Professional Documents
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2015 03 23 Wall Street Journal Europe
2015 03 23 Wall Street Journal Europe
2015 03 23 Wall Street Journal Europe
FTSE 100 7022.51 0.86% DAX 12039.37 1.18% CAC 40 5087.49 1.00% Euro 1.0855 1.82% Pound 1.4981 1.54%
EUROPE EDITION VOL. XXXIII NO. 36 $1.75 (C/V) - KES 250 - NAI 375 - 1.70
Pour Assets
Out of Euro
BY TOMMY STUBBINGTON portfolios away from Europe
and into the U.S. in search of
A major shift in the flow of returns.
money around the globe is Big central banks appear
driving down the euro at a to be following suit, with
rapid clip, boosting the U.S. China and the oil-rich Middle
dollar and leaving smaller Eastern countries that had
countries to struggle with the poured some of their foreign
consequence of an extraordi- reserves into euros changing
nary flood. course.
A wave of cash is leaving Its all about the flows,
the eurozone, where returns said Roger Hallam, chief in-
on safe assets are infinitesi- vestment officer for currency
mal, if they are positive at all, at J.P. Morgan Asset Manage-
and headed to the U.S. and to ment, which oversees $1.7 tril-
refuges such as Denmark and lion. The firm has bet on a
Switzerland. weaker euro throughout the
Europes common currency recent decline and believes it
Reuters
has fallen 22% against the can fall further.
dollar in less than a year, from The ECB pushed interest
$1.39 to $1.08. The euro rates down to nearly zero and
touched a 12-year low of less the rate it pays on commer- Anti-Houthi protesters flee as police loyal to Houthi rebels in Yemen fire tear gas to disperse them in the southwestern city of Taiz on
than $1.05 this month. The cial-bank deposits below Sunday. As rebels stepped up their advance toward the south, the U.S. withdrew its final 100 military personnel. Article on page 8
European Central Bank is zero last summer. This year,
holding interest rates, while it started quantitative easing,
the U.S. Federal Reserve is in which it prints euros to buy
PAGE TWO
NEWS
Associated Press
anti-immigration, anti-European Na- store growth and reduce unemploy- Valls called on voters to block the
tional Front took 26.4% of the first- ment while persistent budget defi- National Front by casting their bal-
round vote, a jump of almost 11 cits have pushed public debt to over lot for what he called Republican
points from 2011. 95% of annual economic output. parties in the second round, even if
With about one in two voters ab- The strength of the National that means voting for the center National Front leader Marine Le Pen votes in Henin-Beaumont, northern France
staining, the first round of elections Front in the first round of voting un- right. on Sunday. Her party took 26.4% of the first-round vote.
Spanish
Socialists
Take Lead
In Andalusia
BY DAVID ROMN
EUROPE NEWS
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6 | Monday, March 23, 2015 THE WALL STREET JOURNAL.
EUROPE NEWS
are seeking to hold back the sepa- gression. He described Western were training are the right people
ratists in a conflict that has killed sanctions on Russia as relatively who are going to carry the fight to
more than 5,000 people over the Soldiers of the U.S. Army 2nd Cavalry Regiment on exercise Sunday in Estonia. mild. ISIL, said Mr. Fallon.
THE WALL STREET JOURNAL. Monday, March 23, 2015 | 7
U.S. NEWS
Texas Senator
Set to Declare
His 2016 Bid
BY JANET HOOK who has discussed the announce-
ment with the senator, said the tim-
Texas Sen. Ted Cruz, a champion ing was designed to capitalize on the
of the tea-party movement who advantage of getting out early.
hopes to woo the Republican Partys Why not be first? the strategist
most conservative voters, is due to said.
announce Monday that he is a candi- With a formal declaration of can-
date for his partys presidential didacy, Mr. Cruz would be free to
nomination in 2016, Cruz campaign raise money for his presidential
aides said on Sunday. campaign directly, rather than rely-
Mr. Cruz would be the first major ing on donations to a political-action
Republican candidate to officially committee supporting him. Some
announce a start to his campaign in donors are reluctant to make contri-
Reuters
terface in a positive way with those Resources for the Future, an envi- come under scrutiny in recent years
states that have moved forward and ronmental think tank in Washington. as its use skyrocketed.
will provide a common baseline Storing leftover liquids in open pits Erin Ailworth
across the country in all states. has been common in Texas and A derrick outside Watford City, N.D., in 2013 is set up to tap the Bakken Shale. contributed to this article.
8 | Monday, March 23, 2015 THE WALL STREET JOURNAL.
WORLD NEWS
sion posted online the alleged names Army Gen. Carter Ham said Sunday sponsibility for an attack Wednesday
and addresses of personnel in the Air on ABC. on a museum in the capital of Tunisia
Force, Army and Navy. Islamic State has been weakened that killed more than 20 people. CIA Director John Brennan said the group has been weakened in Syria and Iraq.
It called on Muslims in the U.S. to in Syria and Iraq, Mr. Brennan said The U.S. cant relent on its contin-
kill them, according to SITE Intelli- on Fox. ued work with partners in the region, theyre trying to push back against it President Barack Obamas strategy of
gence Group, a monitoring service for The U.S. has pushed back al Mr. Brennan said. is having some great, I think, prog- relying largely on airstrikes to
Jihadist threats. Qaeda, but groups such as Islamic ISIS momentum inside of Iraq ress. weaken Islamic State militants.
SITE said the Islamic State affili- State will prompt a hard fight over and Syria has been blunted, and it A U.S. led coalition has been car- Mr. Brennan said it was wrong to
ate posted the information on March the next decade, he said. has been stopped, said Mr. Brennan. rying out airstrikes against Islamic blame the rise of Islamic State on the
20 and distributed a link to it on a It is a very twisted, perverted in- So, they are not on the march as State, which gained a foothold in pullout of U.S. troops from Iraq. In-
Twitter account on Friday. terpretation of a religion that they they were several months ago. We large parts of Syria and Iraq last stead, he said, Iraqis had squandered
Lt. Col. John Caldwell, a Marine purport to represent but in no way are working with the Iraqis, and summer. Republicans have criticized opportunities to establish stability.
THE WALL STREET JOURNAL. Monday, March 23, 2015 | 9
WORLD NEWS
Reuters
Obama at the White House on Tues- shaken up Kabuls political culture. that Mr. Ghani has met with the
day, the first meeting between the Afghan officials privately complain chief executives of every Afghan
two since the Afghan president took they are working long hours. People bank, asking them to submit action Ashraf Ghani will make the case for continued aid on his Washington trip.
office in late September. who work closely with Mr. Ghani, plans to push the institutions into
The stakes are high for the Af- who boasts of sleeping only five having top positions staffed and within at the World Bank, studying I really dont know anyone who
ghan government. Mr. Ghani is head- hours a night, describe him as a mi- meeting international compliance the social impact of big infrastruc- has gone from thought leader and
ing to Washington to make the case cromanager who is quick to dismiss rules to combat money laundering. ture projects in the developing indirect leadership to direct leader-
for continued aid to his country, people he sees as underperforming. Despite his finance experience, world. Ashraf was sort of fasci- shipand been good at both, he
which depends on international sup- He fires more people than he Mr. Ghani has an often adversarial nated by how power gets wielded, said.
port to pay the army and police appoints, said an associate of Mr. relationship with the international said Mr. Guggenheim, who fre- The Afghan president must com-
forces that are the main line of de- Ghani. advisers who oversee billions of dol- quently visits Kabul to advise the pete for the attention of Washington
fense against Taliban insurgents. Khan Afzal Hadawal, the acting lars in aid to his country. His book president on development policy. policy makers who face crises on
Fixing Failed States, published in Its a lot more fun to be watching multiple fronts, including the con-
2008, took international develop- that up close than from far away. frontation with Russia and the rise
Tapering Off ment experts to task for ignoring A return to Afghanistan didnt of Islamic State in the Middle East.
U.S. funds appropriated for Afghan reconstruction, by program the needs of the worlds poorest and seem likely in the mid-1990s, when Mr. Ghani took office after a pro-
most marginalized peopleand for Afghanistan was largely under Tali- tracted election crisis that ended
Security Governance and Humanitarian International squandering billions of dollars in ban control. Development expert with the formation of a national
development Affairs Operations poorly conceived aid projects. and author Michael Fairbanks re- unity government. His rival for the
$175 billion More recently, Mr. Ghani has called meeting Mr. Ghani at his presidency, former Foreign Minister
moved to wrest control of a $500- small, neatly appointed office in Abdullah Abdullah, serves as the
150 million-a-year fund administered by Washington in 1997 at the World countrys chief executive officer.
the United Nations Development Bank and asking if he planned to re- Mr. Ghanis government isnt a
Program to pay for the Afghan po- turn soon to Afghanistan, then iso- complete break with the past: He
125
lice. Close advisers say he has clear lated from the rest of the world. won office by forging an alliance
ideas how aid should workand No, Mr. Ghani replied, accord- with Abdul Rashid Dostum, an eth-
100 wants greater Afghan control over ing to Mr. Fairbanks. I wont, be- nic Uzbek and former warlord with
spending foreign cash. cause there will never be that op- a large vote bank in the countrys
75 Mr. Ghani has followed an un- portunity. My kids are being raised north. Disagreements within the
usual career trajectory. Trained as in America and they are culturally unity government have delayed the
an anthropologist, he left academia American. formation of a cabinet.
50 in 1991 to join the World Bank, and Mr. Fairbanks, who worked with He obviously had to make a lot
he still works closely with a small Mr. Ghani at the World Bank and in of compromises, said Idrees Zaman,
25 group of trusted advisers from his Afghanistan, said Mr. Ghanis trans- an independent Afghan political ana-
career in international development. formation from policy wonk to pres- lyst, of Mr. Ghani. He enjoys as an
0
Scott Guggenheim, a develop- ident showed his evolution from an academic and a thinker a very good
ment expert who has known the Af- indirect leaderone who leads reputation, but he is running a very
FY2003 04 05 06 07 08 09 10 11 12 13 14 15* ghan president since he was a grad- through force of intellect but doesnt compromised government.
Note: Fiscal year ends Sept. 30 *Estimate uate student, said Mr. Ghani was control people or budgetsto a tra- Margherita Stancati
Source: Special Inspector General for Afghanistan Reconstruction THE WALL STREET JOURNAL. part of the the opposition from ditional direct leader. contributed to this article.
they reclaimed from Boko Haram Ali Khamenei. Minister Javad Zarif are expected to
over the past week. Still, in tough remarks that resume Thursday in Lausanne.
The militants had been killing Chadian soldiers in the recently retaken town of Damasak, Nigeria, last week. brought fresh cries of Down with The two sides have set a June 30
people before they fled, said one America from the public at his Ira- deadline to complete a detailed, fi-
military leader. Possibly they didnt graves found in Damasak, or progress group killed more than 20,000 peo- nian new years speech, Mr. Khame- nal agreement that seeks to ensure
have food to feed these potential in the broader military campaign. ple and staged attacks in the far-off nei demanded that any deal must Iran cant quickly amass enough nu-
captives or a way to move them. Nigeria is eager to show prog- capital, Abuja, and beyond. After so lift sanctions on his country imme- clear fuel for a bomb, in exchange
Damasak is one of several key ress in the fight against Boko much turmoil, many pro-democracy diately and said Iran and the U.S. for the lifting of sanctions.
towns retaken in an intensifying Haram before national elections advocates are skeptical that Nige- were set to remain foes. In my conversations with For-
assault against Boko Haram this Saturdaythe reason officials gave rias government will be able to as- Mr. Kerry met Saturday evening eign Minister Zarifwe have made
month. Of the Belgium-sized swath for postponing the vote from its sure the safety of nearly 70 million in London with the U.K., French, genuine progress in the talks, Mr.
of impoverished farmland that the long-scheduled date of Feb. 14. voters who could show up at the German and European Union foreign Kerry said Saturday. But we recog-
group controlled earlier this year, The arrival of troops from Cam- more than 100,000 polling stations. ministers to discuss the latest devel- nize that fundamental decisions
Nigerias military says it has cor- eroon, Chad and Niger appears to We have not seen the neces- opments. Russia and China complete have to be made now and they dont
ralled Boko Haram fighters into have turned the fight in Nigerias fa- sary security, said Zik Ibrahim, the six-power group that negotiates get any easier as time goes by.
just three areas now. vor. Boko Harams unprecedented chairman of the Transition Moni- with Iran. We have not yet reached the
A spokesman for Nigerias mili- retreat from more than 30 north- toring Group, a constellation of Late Saturday, the Obama admin- finish line, but make no mistake: we
tary didnt immediately respond to eastern towns and areas this month civic organizations that plans to istration and its European diplo- have the opportunity to try to get
requests for comment on the mass comes after six years in which the monitor the voting. matic partners vowed to remain this right, he said.
10 | Monday, March 23, 2015 THE WALL STREET JOURNAL.
WORLD NEWS
Border Conflict
Tests Beijings
Commitments
BY CHUN HAN WONG why did they bring the war to us or-
dinary folk in China? his mother,
LINCANG, ChinaWhen war- 48-year-old Zhang Xiaowu, said from
planes involved in fighting over her hospital bed this week, after her
northern Myanmar streaked across left leg was amputated. Our military
Development Bank estimates its re- order, from the Chiang Mai Initia-
same governance and operational move past the diplomatic mess, re- gion alone faces an annual financing tive, a regional currency swap facil-
standards, he said, it could both bol- unite with its trans-Atlantic allies on shortfall of $800 billion a year. The ity designed to mimic the Interna-
ster the international financial sys- this issue and counter any percep- World Bank President Jim Yong Kim consulting firm McKinsey & Co. esti- tional Monetary Fund, to the Brics
tem and help meet major infrastruc- tions that the U.S. is wholly opposed mates global infrastructure-invest- bank, an infrastructure bank named
ture-investment gaps. to the institution as part of a China- international development institu- ment needs through 2030 total $57 after the worlds largest emerging
No decision has been made by containment strategy. tion with 188 nations as members. trillion. market economies.
the new Chinese-led bank about Our concern has always But others have emerged amid con- By comparison, the Asian Devel- But without the standards that
whether it will partner with existing beewill it adhere to the kinds of cerns about drawing more invest- opment Bank has just $160 billion in the World Bank and other U.S.-influ-
multilateral development banks, as high standards that the interna- ment and attention to fast-growing capital and the World Bankwhich enced lending facilities have devel-
the facility is still being formed, tional financial institutions have de- regions. Those include the Asian De- has co-financed with other regional oped over decades, Chinas new
though co-financing is unlikely to veloped? U.S. Treasury Secretary velopment Bank, the African Devel- institutions for yearshas around bank risks fomenting distrust with
face opposition from U.S. allies. Jacob Lew told U.S. lawmakers last opment Bank, European Investment $500 billion. The China-led bank the U.S. and creating a host of social
Zhu Haiquan, a spokesman at week. Bank and the Inter-American Devel- plans to have a $50 billion fund to and economic issues. It could also
Chinas embassy in Washington, said Co-financing, combined with Eu- opment Bank. start. help subsidize Chinese corporate in-
Beijing is open to collaboration with ropean membership, will make it The banks loans are designed to We have every intention of terests.
the existing institutions and that the more likely this institution largely foster infrastructure and develop- sharing knowledge and co-investing But while wary of China, Wash-
new bank is built in the spirit of conforms to the international stan- ment projects that are often high- in projects throughout Asia, said ington has at the same time been
openness and inclusiveness and will dards, said Matthew Goodman, an risk and long-term, helping to lower Mr. Kim, who was picked by Presi- trying to pull the country into the
follow high standards. Asia expert at the Center for Strate- the costs for governments that dent Barack Obama in 2012 as the global political and economic archi-
It will effectively cooperate with gic and International Studies adviser couldnt afford borrowing from the U.S. nominee to lead the World tecture based on the theory that
and complement the existing multi- and former economics director at private sector. For the most power- Bank. Beijings participation cultivates
lateral development banks such as the U.S. National Security Council. ful lending countries, they cultivate From the perspective simply of greater responsibility. Co-financing
the World Bank and the Asian Devel- The World Bank, forged out of regional growth prospects and can the need for more infrastructure could become a steppingstone for
opment Bank to provide investment World War II, remains the leading provide a political tool for influenc- spending, theres no doubt that we the U.S. to join in a few years.
THE WALL STREET JOURNAL. Monday, March 23, 2015 | 11
WORLD NEWS
OBITUARY | Lee Kuan Yew 1923-2015
Singapore Founding
Father Dies at 91
BY CHUN HAN WONG phy of Mr. Lee, saw it another way:
For Mr. Lee, he wrote, means
Lee Kuan Yew, who dominated never mattered so long as the ends
Singapore politics for more than he desired were reached. He ran
half a century and transformed the Singapore like a tightly managed
former British outpost into a global private corporation, paying what he
trade and finance powerhouse, set- considered good dividends to the
ting a template for emerging mar- shareholders.
kets around the world, died Mon- When Mr. Lee assumed power,
day. He was 91 years old. Singapore was saddled with huge
Mr. Lee had been battling se- income disparities and a fragile
vere pneumonia, a condition the economy as an entrept, or trading
government disclosed in late Febru- post. By the mid-1960s, its neigh-
ary after he was admitted to Singa- bors, including Malaysia and Indo-
Cyclone-Hit Vanuatu
ernment said that his condition had come efficient enough to compete
weakened even further. with their global peers. Many, such
as Singapore Airlines and Singa-
pore Telecommunications, became
highly profitable.
and business tax breaks, notably for ian Affairs in the Pacific, said rebuild- based on subsistence farming, grow-
electronics companies, powering TANNA, VanuatuBefore a ing costs were expected to be high ing crops like breadfruit and a local
the city-states growth as an export deadly cyclone struck this remote based on the extent of the damage. banana. Some continue to live under
hub. South Pacific island chain, Joseph Aid agencies including Oxfam, the rule of a chief, much like their
Hundreds of Western companies Komisak ran a reasonably successful Red Cross International, CARE and ancestors have lived for generations
set up regional headquarters there, business renting out tourist bunga- World Vision are all working to and never venturing far afield.
with Hewlett-Packard Co. and Gen- lows at the base of Mount Yasura meet the emergency needs of locals, While English and French are spo-
eral Electric Co. among the early live volcano with bubbling lava that while the New Zealand and Austra- ken, there are 113 distinct dialects of
Lee Kuan Yew died at 91 on Monday. investors. Gross domestic product constantly booms across the valleys. lian defense forces and New Caledo- the local language.
per capita, which stood at $512 in Mr. Komisak had plowed every- nias security force are on the Many locals were struggling
Mr. Lees core principlesin- 1965, grew to more than $56,000 in thing hed saved from his gardening ground offering services. even before the storm hit. Evidence
cluding a focus on clean and effi- recent yearssimilar to levels in job to build four bungalows and a A number of governments have of hunger is everywhere in Tanna,
cient government, business-friendly the U.S. and surpassing those of Ja- tree hut, as well as a new horse- offered initial relief packages. New where barely clothed children with
economic policies, and social or- pan and Germany. riding business. But the Category-5 Zealand pledged US$1.8 million and distended bellies can be seen in
derhelped attract massive invest- The government transferred tropical storm that swept through Australian offered US$3.8 million. dusty villages alongside roaming
ment and many of the worlds big- some of the wealth to Singaporeans Vanuatu just over a week ago wiped One of the worst hit among Van- pigs, chickens and dogs. Access to
gest companies to Singapore after in the form of subsidized housing all of that out. uatus dozens of islands was Tanna water has also become a major
he became prime minister in 1959, and other benefits. Rather than The only income here is tour- in the south, where residents still problem since the storm, which con-
catapulting living standards to First give money directly to the poor and ism, said the 45-year-old father of lack access to electricity, phone taminated supplies and tipped over
World status from Third World lev- unemployed, Mr. Lee supplied af- three, as he surveyed the ruins. lines or the Internet. many of the islands rain-gathering
els in hardly more than a genera- fordable state-built apartments that When we have money, this is for Unless the all-important tourist tanks.
tion. he encouraged citizens to buy. To- paying school fees and helping our dollars return, its inhabitants will Mr. Komisak and other locals are
Leaders of other countries day, 90% of Singaporean resident community. Its a real worry. struggle to feed their families once anxious over the pace of recovery,
rushed to copy his model, with households own their homes, one of As the cleanup begins following aid agencies call a halt to supplying particularly as they head into
some success, though they often the highest rates in the world. the worst cyclone to hit Vanuatu in emergency relief. Tannas traditionally busiest
fell short because they didnt rein Mr. Lee, who was influenced by recent history, fears are growing months, April through July, knowing
in corruption or were governing socialism in his youth, argued his among the population here about that tourists tend to choose safer
states too big to manage as easily. hard-nosed policies were born of how the Pacific nationlying 2,236 Tourists tend to choose destinations for a long time after a
Along the way Singapore, now necessity, because tiny Singapore miles east of Australiawill recover natural disaster strikes an area.
one of the worlds richest nations, lacked many of the material advan- and entice foreign visitors so crucial
safer destinations for a It took the Maldives, an island-
drew criticism from rights groups tages enjoyed by countries like the to the local economy to return. long time after a disaster. nation in the Indian Ocean torn
that said it attained its developed- U.S., China or even Indonesia, with An exotic destination cherished apart by the 2004 Asian tsunami,
world living standards without their vast natural resources, abun- by divers and adventure seekers, the three years to attract well-heeled
adopting full Western-style democ- dant farmland and large popula- archipelago faces a long path of re- vacationers once again. Maldivian
racy or some of the freedoms taken tions. What Singapore did have was building from two days of devasta- Its bad for the economy, particu- national income fell 40% in the year
for granted in Western societies. a prime location along one of the tion wrought by Cyclone Pams 250- larly for tourism, Joe Natuman, Van- following the disaster, which also
Although Singapore held regular worlds busiest shipping lanes, kilometer-per-hour (155mph) winds. uatus prime minister, told reporters devastated parts of Thailand, Sri
free elections under Mr. Lee, laws which argued for doing everything The death toll from the storm at Tanna airport after arriving on an Lanka and Indonesia,
proscribing public gatherings and possible to make it a global trade stands at 24, far smaller than simi- aid plane from the New Zealand air Even before the cyclone, Vanu-
limiting other civil liberties ham- hub attractive to investors, he rea- lar-sized Pacific storms, such as last force. On this island, tourism is the atus tourist industry was being
pered the development of a power- soned. His philosophies were fur- years Typhoon Haiyan, which killed main industry and all the bungalows slugged by sharp falls in the Austra-
ful opposition. Western media ther influenced by Confucian ideals, 6,000 people in the Philippines. But have been blown away. lian dollar, which has encouraged
called Singapore a nanny state which called for thrift, self-reliance the infrastructure damage has been Most holidaymakers arrive here more Australians to stay at home
and lampooned its attempts to cre- and respect for elders, education overwhelming. from New Zealand, the French terri- and persuaded many New Caledo-
ate an orderly society through and social order. I stressed that More than half of Vanuatus build- torial island of New Caledonia and nians to visit Australia instead of
rules, incentives and ad campaigns, freedom could only exist in an or- ings have been badly damaged Australia. But the cyclone halted all neighboring Vanuatu.
including a famous ban on the sale derly state, he wrote in a memoir, many having their roofs blown off inbound tourism, causing immediate John Nicholls, owner of Ever-
of chewing gum that was relaxed From Third World to First. leaving up to a third of the countrys economic pain when the country is green Resort and Tours on Tanna,
slightly in 2004. Mr. Lees success meant that his 266,000 people homeless. Forests, facing a costly recovery. Tourism said the number of visitors to his
Mr. Lee argued that Western- name became synonymous with where holidaymakers were fond of dominates the nations underdevel- resort were shrinking even before
style democracy just wasnt suit- Singapore. The political party he trekking, were shredded by the oped economy, contributing about the cyclone left the resort unviable.
able for all nations, and that young co-founded, the Peoples Action storm, while crops such as coffee 40% of its gross domestic product. In Commercially, we are all gone,
countries needed stability and eco- Party, or PAP, has won every elec- across the island were destroyed. 2013, Vanuatus per capita GDP was New Caledonian-born Mr. Nicholls
nomic development before they tion since 1959when Singapore Authorities and aid agencies are US$3,082, with 12.7% of the popula- said. Firstly all the forest is gone,
could afford the luxuries of democ- became self-governingand has al- hesitant to estimate how much re- tion living below the poverty line ac- most of the buildings are defunct.
racy and personal liberty in a West- most always controlled the vast construction will cost, as much of the cording to Asian Development Bank. The main structure is still there so
ern mold. majority, and at one point all, of damage still hasnt been fully as- Many Ni-Vanuatu, as the locals we could rebuild, but we dont have
Writer T.J.S. George, in a biogra- the countrys parliamentary seats. sessed. But Sune Gudnitz, head of the are known, live in thatched houses the money.
12 | Monday, March 23, 2015 THE WALL STREET JOURNAL.
IN DEPTH
IN DEPTH
Some former Adidas executives say that
analytical style could sometimes keep German
headquarters out of touch with U.S. consum-
ers.
During Mr. Hainers tenure, Adidas had
four U.S. bosses before Mr. King. In 2005, Adi-
dass U.S. retail market share had fallen to
about 10% in sports shoes, says industry re-
searcher SportsOneSource, versus Nikes
roughly 35% and Reeboks 8%.
That year, Mr. Hainer agreed to buy Ree-
bok for roughly $3.8 billion. In 2006, he
signed a deal, estimated at $400 million, to
supply the National Basketball Associations
jerseysrights previously belonging to Ree-
bokthrough 2017.
Mr. Hainer boasted Adidas was gaining on
Nike, telling a German newspaper that year:
They feel us breathing down their back.
The Reebok deal surprised top staff in
America, say former U.S. executives. From
the moment we started looking at the num-
bers, we knew it was a screwed-up business
and that wed paid too much, says a former
Adidas executive involved in handling the af-
termath.
Efforts to fix Reebok diverted resources
from the Adidas brand, say several former ex-
ecutives.
The Adidas spokeswoman says that like
all deals of this size, only a small amount of
Bloomberg News
Founded by German athlete and shoemaker Adolf Dassler in 1949, Adidas turned sneakers into mainstream-fashion items. Its three-striped shoes were everywhere in America in the 1970s.
14 | Monday, March 23, 2015 THE WALL STREET JOURNAL.
T
he U.S. is going to need more IRS Justices declaredrightlythat limits taste of what President Obamas fond-
agents. Thats the gist of Presi- on union and corporate spending on ness for government by mandate
dent Obamas latest bid to im- campaigns was a limit on free speech? means. Before it won its Supreme
pose yet another mandate on the Amer- The President invoked Australia and Court case, the crafts chain Hobby
ican people. This time he wants to went on to recommend Lobby was faced with
require all Americans to vote, whether that the U.S. require The President fines of $1.3 million for
they want to or not.
In Cleveland on Wednesday the Pres-
Americans to vote as
they do Down Under. It
has another offer every day it refused to
obey the contraceptive
ident called for compulsory voting in would be transformative you cant refuse. mandate. This year, with
response to a question from the audi- if everybody voted, said the April 15 tax deadline
ence. What, the questioner inquired, is Mr. Obama. That would approaching, many
the best way to limit money in elec- counteract money more than anything. young and healthy Americans who
tions and overturn the Supreme Courts Hes surely wrong about the money have disobeyed the Obama mandate to
decision in Citizens United, in which the point. Politicians would have to spend buy health insurance from the govern-
as much as ever to sway more voters. ments limited menu are going to have
But it would be transformative. By defi- to deal with the IRS.
nition a legal mandate requires enforce- Everything not forbidden is compul-
Comments? The Journal welcomes
readers responses to ment. Even the good-natured Aussies sory. That line comes from British
all articles and editorials. It is important to impose a fine for not voting, which can writer T.H. White, in his novel re-
include your full name, address and expand to include court costs and jail creating the life and times of King Ar-
telephone number. Please send letters to time if you dont cough up. thur. White meant it as mockery. Presi-
the editor to: Letters@WSJ.com Some Americans have already got a dent Obama doesnt get the joke. Whats with all the sleeping at night?
THE WALL STREET JOURNAL. Monday, March 23, 2015 | 15
OPINION
the world a lesson in the differ- turned for another extended stay volvement, not less.
ence between religious devotion in the U.S. in 2005 at the Army Meantime, Mr. Sisi sees it as
and radicalism. War College in Carlisle, Pa. his personal mission to save
There are misconceptions and Recalling the two visits, he Egypt, even as he insists he has no
misperceptions about the real Is- notes the difference. The U.S. had intention of becoming another
lam, now-President Sisi tells me been a community that had been that tightly restrict street protests apt. Under Mr. Musharraf, Paki- president-for-life. When I ask him
during a two-hour interview in his living in peace and security. Be- recall the Mubarak era. Last June stan continued to make opportu- to name Mr. Mubaraks biggest
ornate, century-old presidential fore 9/11, even the military bases several Al Jazeera journalists, in- nistic deals with terrorists while mistake, he says simply: He
palace in Heliopolis. Religion is were open. There was almost no cluding Australian reporter Peter giving safe harbor to leaders of stayed in power for a long time.
guarded by its spirit, by its core, difference between civilian life Greste, were sentenced to lengthy the Afghan Taliban. A day before our interview, I
not by human beings. Human be- and life on a military base. By prison terms on dubious charges By contrast, its impossible to watched him close an investment
ings only take the core and devi- 2005, I could feel the tightening. of reporting that was damaging doubt the seriousness of Mr. Sisis conference in the resort town of
ate it to the right or left. to national security, though they opposition to Islamic extremism, Sharm el-Sheikh, where he cele-
Does he mean to say, I ask, that have since been released. The or his aversion to exporting insta- brated General Electrics decision
members of the Muslim Brother- We are keen on a strategic Muslim Brotherhood has been bility. In late February he ordered to invest to ease Egypts chronic
hood are bad Muslims? Its the
ideology, the ideas, he replies.
relationship with the U.S. banned, Mr. Morsi is in prison and
on trial, and Egyptian courts have
the bombing of Islamic State tar-
gets in neighboring Libya after Is-
power outages. He describes his
economic philosophy as the need
The real Islamic religion above everything else, passed death sentences on hun- lamic State decapitated 21 Egyp- to encourage the business commu-
grants absolute freedom for the
whole people to believe or not be-
says Egypts new president. dreds of alleged Islamists, albeit
mostly in absentia.
tian Coptic Christians. Egypts
security cooperation with Israel
nity to come here and invest. He
constantly stresses the imperative
lieve. Never does Islam dictate to And we will never turn our My message to liberals is that has never been closer, and Mr. Sisi of acting swiftly: The magnitude
kill others because they do not be-
lieve in Islam. Never does it dic-
backs on youeven if you I am very keen to meet their ex-
pectations, Mr. Sisi rejoins. But
has moved aggressively to close
the tunnels beneath Egypts bor-
of the effort needed to secure the
needs of 90 million people is huge
tate that [Muslims] have the right turn your backs on us. the situation in Egypt is over- der with Gaza, through which and beyond any one mans effort.
to dictate [their beliefs] to the whelmed. He laments the Al Hamas has obtained its weapons. Hes also aware that the most
whole world. Never does Islam say Jazeera arrests, noting that the in- Later this month, Mr. Sisi will important work will take time. In
that only Muslims will go to para- The remark is intended to un- cident damaged Egypts reputation host an Arab League summit, the January Mr. Sisi went before the
dise and others go to hell. derscore to a visiting American even as thousands of international centerpiece of which will be a joint religious clerics of Cairos Al-
Jabbing his right finger in the journalist his deep sympathy with correspondents are working very Arab antiterrorism task force. He Azhar university to demand a
air for emphasis, he adds: We are and admiration for the U.S. He freely in this country. says he wont put Egyptian boots revolution in Islam. The follow-
not gods on earth, and we do not also goes out of his way to stress Later, while addressing a ques- on the ground to fight Islamic through wont be easy. The most
have this right to act in the name that he has no intention of alter- tion about the Egyptian economy, State in Iraq, which he says is a difficult thing to do is change a
of Allah. ing the pro-American tilt of Egyp- he offers a franker assessment. In job for Iraqis with U.S. help. And religious rhetoric and bring a shift
i i i tian foreign policy, despite sugges- the last four years our internal he takes care to avoid mentioning in how people are used to their re-
When Mr. Sisi took power in tions that he is flirting with debt doubled to $300 billion. Do Irans regional ambitions or saying ligion, he says. Dont imagine
July 2013, following street pro- Russias Vladimir Putin for poten- not separate my answer to the anything critical of its nuclear ne- the results will be seen in a few
tests against Mr. Morsi by an esti- tial arms purchases and the con- question regarding disappointed gotiations, which he says he sup- months or years. Radical miscon-
mated 30 million Egyptians, it struction of Egypts first nuclear liberals. Their country needs to ports while adding that I under- ceptions [about Islam] were in-
wasnt obvious that he would power plant. survive. We dont have the luxury stand the concern of the Israelis. stilled 100 years ago. Now we can
emerge as perhaps the worlds A country like Egypt will to fight and feud and take all our But he does say the new force see the results.
most significant advocate for Is- never be mischievous with bilat- time discussing issues like that. A is needed to preserve what is Thats not to say he doesnt
lamic moderation and reform. His eral relations with America, he country needs security and order left of the stable Arab world. In think its doable. Popular sympa-
personal piety aside, Mr. Sisi insists. We will never act fool- for its mere existence. If the world particular, he stresses that there thy with the idea of religion was
seemed to be a typical Egyptian ishly. When I ask about the deliv- can provide support I will let peo- shouldnt be any arrangements at dominating the whole scene in
military figure. Unflattering com- ery of F-16 fighters to Egyptsus- ple demonstrate in the streets day the expense of the Gulf states. The Egypt for years in the past. This
parisons were made to Hosni pended by the U.S. after Mr. and night. security of the Gulf states is indis- does not exist anymore. This is a
Morsis overthrow, and now pend- Sensing my skepticism, he pensable for the security of change I consider strategic. Be-
ing a decision by President adds: You cant imagine that as Egypt. cause what brought the Muslim
Obamahe all but dismisses the an American. You are speaking the He also decries the Western Brotherhood to power was Egyp-
matter. language of a country that is at habit of intervening militarily and tian sympathy with the concept of
Thorold Barker, Editor, You can never reduce our rela- the top of progress: cultural, fi- then failing to take account of the religion. Egyptians believed that
Europe, Middle East & Africa
tions with the U.S. to matters of nancial, political, civilizational consequences. Look, NATO had a the Muslim Brothers were advo-
Bruce Orwall, Senior Editor, Europe
weapons systems. We are keen on its all there in the U.S. But if mission in Libya and its mission cates of the real Islam. The past
Gren Manuel, Executive Editor, Europe
a strategic relationship with the American standards were imposed was not accomplished, he says of three years have been a critical
Terence Roth, Managing Editor, Europe
U.S. above everything else. And on Egypt, he adds, it would do his the North Atlantic Treaty Organi- test to those people who were
Joseph C. Sternberg, Editorial Page Editor we will never turn our backs on country no favors. zation. The United Nations contin- promoting religious ideas. Egyp-
youeven if you turn your backs I talk about U.S. values of de- ues to impose an arms embargo tians experienced it totally and
Lauren Berkemeyer, Marketing on us. mocracy and freedom. They on Libya that adversely affects the said these people do not deserve
Kate Dobbin, Communications There is also a deeper purpose should be honored. But they need legitimate, non-Islamist govern- sympathy and we will not allow
Florence LeFevre, Institutional Sales Europe to Mr. Sisis pro-American entreat- the atmosphere where those val- ment based in Tobruk while it.
Will Wilkinson, Advertising Sales ies and his comments on 9/11: He ues can be nurtured. If we can armed militias obtain an unstop- Throughout our interview, Mr.
Jonathan Wright, Circulation Sales wants to remind his critics of the bring prosperity we can safeguard pable flow of arms and muni- Sisi has been speaking in Arabic
Published since 1889 by trade-off every country strikes be- those values not just in words. tions. through an interpreter. But after
Dow Jones & Company tween security and civil liberties. All of this seems in keeping I wasnt with the Gadhafi re- delivering this point, he said in
2015 Dow Jones & Company. All Rights Reserved Its a point he returns to when with Mr. Sisis military upbringing gime, he says, but there is a dif- colloquial American English, You
I note the anger and disappoint- and reminds me of Pervez ference between taking an action got that?
ment that so many Egyptian liber- Musharraf, the former Pakistani and being aware of what that ac-
alsmany of whom had backed general turned president. But the tion will bring about. The risks of Mr. Stephens writes the Jour-
him in 2013now feel. New laws comparison is fundamentally in- extremism and terrorism werent nals Global View column.
16 | Monday, March 23, 2015 THE WALL STREET JOURNAL.
OPINION
Fed Forecast:
Only Technocrats Can Save Greece Now Cloudy With
BY YANNIS PALAIOLOGOS with the February agreements flexi-
A Chance
On Monday in Berlin, Greeces
bility on the level of the primary fis-
cal surplus Athens must achieve.
Of Slowdown
prime minister, Alexis Tsipras, will But the Germans will never allow BY DAVID MALPASS
have his first meaningful bilateral the political to operate indepen-
meeting with Germanys chancellor, dently of the technical. Financial markets applauded the
Angela Merkel. The omens are not They will not grant any leeway U.S. Federal Reserve last week
encouraging. without having a full picture of the when it straddled the fence on rate
Video emerged last week of economic and fiscal situation in hikes, but the bigger message was
Greeces current Finance Minister, Greece, and of how it is projected to the downgrade in its growth fore-
Yanis Varoufakis, raising his middle evolve under concrete policies pro- cast to 2.5% in 2015. That means
Associated Press
finger at Germany during a speech posed by Athens. That is why Mrs. another year stuck in the weak
in 2013. Greeces demands for World Merkel got the IMF involved to be- new normal that began in 2009.
War II reparations from Germany, gin withso that their objective, Yes, the stock market has
among other provocations, seem to politics-free assessments could en- reached record highs. But real me-
have turned the German public deci- NUMBERS AND FIGURES From left, Germanys Chancellor Angela Merkel, Frances sure a rigorous process, which in dian household income has fallen to
sively in favor of a divorce. In a You- President Franois Hollande and Greeces Prime Minister Alexis Tsipras in Brussels her view was unlikely under the below $52,000 in 2011-13 from
Gov poll last week, 59% of Germans last week. faint-hearted tutelage of the Euro- more than $56,000 in 2007.
said they would prefer that Greece pean Commission. Near-zero rates and the Feds
leave the eurozone, up from 48% a under different names. (The troika constructing a fully fledged, meticu- Mr. Tsipras needs to explain very rapidly expanding regulatory con-
month earlier. of the European Central Bank, Euro- lously budgeted reform program specifically why he believes Greek trol of finance have put the Fed at
After the miniature summit in pean Commission and the Interna- that creditors will approve, leading growth will be at 1.5% or higher this the center of capital allocation.
Brussels in the early hours of Friday tional Monetary Fund became the to the release of the 7.2 billion year, and how he arrived at an esti- This has caused credit to gravitate
in which they both participated, Mr. institutions, the new program to ($7.79 billion) without which Greece mate for this years primary fiscal to well-established borrowers at
Tsipras and Mrs. Merkel seemed to be agreed by June would be a con- will likely default by mid-April. surplus of 1% to 1.5% of gross domes- the expense of more growth-ori-
emerge with very different under- tract, and so on.) As leader of the opposition, Mr. tic product, both numbers he men- ented savers and borrowers.
standings of what they had agreed Since then, the Greek govern- Tsipras made much of the perceived tioned in his Friday press conference The Feds belief that near-zero
ment has pretended that what it national humiliation involved in the in Brussels. Greeces creditors will be rates lead to growth is deeply em-
agreed to was something com- troika review process. He harped on particularly keen to find out how bedded, but experience shows that
Athens will wrest further pletely different from the continua- the horror of having what they de- that primary surplus level can be growth comes from private-sector
tion and completion of the existing scribed as low-level pencil-pushers achieved without recessionary mea- dynamism, which thrives on market
concessions from creditors program. That program, within the question ministers about the prog- sures (again, Mr. Tsiprass formula- pricing, not artificially low rates.
only if it can convince them vague limits of flexibility set out by ress of measures mandated by the tion), given that it came in below The Fed stopped saying it
the February deal, is a necessary bailouts. target last year at 0.3% of GDP. would be patient about hiking
its numbers add up. condition for any new funding to be Athens was caught in a negative In a speech to Parliament last rates. Thats a nod to the interest-
released to Athens. feedback loop. The unwillingness week, the prime minister proudly rate normalizers, who argue that
Yet the prime minister and his and inability of the Greek political announced that his government was small rate hikes will increase loan
to. The same divergence of interpre- top lieutenants keep insisting to system and the bureaucracy to im- putting an end to the practice of demand (to get ahead of rate
tation has plagued Greeces Feb. 20 their domestic audience that auster- plement the agreed-upon reforms having technocrats write legislative hikes), incentivize saving and lend-
agreement to extend its bailout by ity is over, that the oversight of fis- made the troika particularly inva- bills. He should reconsider. Politics ing, unfreeze the moribund inter-
four months. cal data and policy proposals by the sive in its inspections. That kind of has taken him as far as it can. To bank market and begin to unwind
This is no accident. The new creditors staff is a thing of the past, micromanagement was bound to move forward, and keep at bay a ca- the Feds takeover of the markets
government in Athens is trapped and that national sovereignty has lead to a backlash. tastrophe of historic proportions for role in capital allocation.
between its pre-election promises to been reclaimed. They have obsessed But when Mr. Tsipras contrasts Greece, it is the technocrats skills While that part of the Feds state-
voters and the demands of its credi- over where negotiations will take technical reviews unfavorably with that he now needs. ment was good, the Federal Open
tors. Under the specter of a shut- place and whether a Greek photog- his preferred methodthat of a Market Committee (FOMC) had to
down of the banks and the imposi- rapher will be able to spot some political negotiationhe misses Mr. Palaiologos, a journalist at Ka- lower its view of appropriate 2015-16
tion of capital controls, Mr. member of the institutions techni- the point. A political negotiation thimerini newspaper in Athens, is interest rates due to falling expecta-
Varoufakis signed on to the Febru- cal teams entering a ministerial of- can lead to concessions by Greeces the author of The Thirteenth La- tions for growth and inflation.
ary deal, which left the bailout in- fice in Athens. They have done too creditors on the targets of the pro- bour of Hercules (Portobello Wednesdays new Fed view showed
frastructure essentially in place if little on the only front that matters: gram, something already achieved Books, 2014). slower growth and roughly one less
hike each year than in December. It
pointed to a 2% Fed-funds rate at the
end of 2016 rather than 2.5% in the
INDEX TO BUSINESSES
Businesses AbbVie...........................32 Bilfinger........................20 European Central Bank 32 Industry ..................... 19 Prudential Financial ..... 24
This index of businesses Adidas.............................1 BlackRock......................23 Express Scripts HTC................................22 Qualcomm.....................18 Corrections Amplifications
mentioned in todays Aer Lingus Group ......... 19 BlueScope Steel ........... 32 Holding.......................32 Hunan Xindaxin............17 Rio Tinto.......................32
issue of The Wall Street Alibaba Group..........18,19 Caesars Entertainment 20 Exxon Mobil....................7 Intel...............................18 RWE .............................. 17 The second part of Miguel de Cer-
Journal is intended to Allianz...........................23 Citigroup ....................... 24 Federal Trade Jasper Infotech.............19 Ryanair Holdings..........19 vantess magnum opus Don Quixote
Amazon.com ............ 18,19 Clean Harbors.................7 Commission...............21 Snapdeal.com................19
include all significant Lafarge..........................21 was published in 1615. A Europe News
Amgen...........................32 CVS Health ................... 32 Flipkart Internet...........19 SoftBank.......................19
reference to companies. Microsoft.......................21 article Wednesday about researchers
Ant Financial ................ 19 Dart Group....................19 General Electric............24 Syngenta.......................17
First reference to the Monsanto......................17 possible identification of the authors re-
Apollo Global Deutsche Bank..............23 Gilead Sciences.............32 TABCorp Holdings ........ 32
companies appears in Management..............20 Deutsche Post .............. 18 Google......................18,21
News Corp.....................21
UniCredit.......................23 mains incorrectly implied the entire
bold face type in all Apple.............................19 DuPont .......................... 17 Harvey Norman Nike.................................1 United Parcel Service...18 book was published in that year.
articles except those BaFin.............................23 eBay .............................. 19 Holdings.....................32 Novartis ........................ 32 Vattenfall......................17 Readers can alert the London newsroom of The
on page one and the Baker Hughes.................7 Emirates Airline ........... 19 Holcim...........................21 One97 Communication.19 Wizz Air Holdings........19 Wall Street Journal to any errors in news articles
editorial pages. Bank of America...........24 EnBW Energie Baden- Hong Kong Exchanges & Oracle............................21 Yelp................................21 by emailing wsjcontact@wsj.com or by calling
Barclays.........................32 Wrttemberg.............17 Clearing......................23 Origin Agritech.............17 Yuan Longping High-Tech +44 (0)20 7842 9901.
BHP Billiton..................32 E.ON..............................17 Hon Hai Precision Pfizer.............................32 Agriculture.................22
THE WALL STREET JOURNAL. Monday, March 23, 2015 | 19
Regulator
Takes Action
Labor Strife at Emirates Airline
BY RORY JONES exceptions that comply with safety
Airlines trouble. Emirates Airline staff soar. spond to a request seeking comment
In the U.S. and Europe, the 50 million 50 thousand about deferred leave.
Dubai-owned carrier is fighting ac- The company declined to com-
44.5 million passengers carried 41,471 employees
BY ROBERT WALL cusations by rivals that it benefits ment generally about cabin-crew
from unfair government subsidies. 40 40 complaints, and to make executives
LONDONBritains aviation reg- Back home, however, Emirates, the available for interviews. Saif Al Su-
ulator is taking action against Aer worlds largest international airline waidi, director general of the Gen-
30 30
Lingus and two other European car- by traffic, is engaged in a rare tussle eral Civil Aviation Authority, the
riers regarding their treatment of with its own cabin-crew staff. U.A.E.s airline regulator, said issues
passengers when flights are dis- According to current and former 20 20 about airline labor conditions are a
rupted, and expressed concern over staff, cabin-crew employees have matter to be sorted out between
the actions of Ryanair Holdings been complaining internally about a Rest of employees staff and management.
PLC. host of issues, including accusations 10 10 The sessions initiated this year
Aer Lingus and budget airlines the airline is asking crew to work are one way Emirates is trying to
Wizz Air and Jet2 now are subject more hours and shortening layovers Cabin crew manage the complaints. In an email
to enforcement action, the U.K.s between connecting flights. In re- 0 0 in January to staff announcing the
Civil Aviation Authority said on Sat- sponse, Emirates is holding a series FY2004 06 08 2010 12 FY2004 06 08 2010 12 meetings, Terry Daly, Emirates se-
urday. The CAA said the move of meetings where staff can air -05 -07 -09 -11 -13 -05 -07 -09 -11 -13 nior vice president of service deliv-
comes after a six-month review of grievances directly to senior man- Note: Fiscal years end March 31 Source: the company THE WALL STREET JOURNAL. ery, wrote he was aware that there
how carriers act on issues, such as agement. It also recently suspended are a number of subjects that are
how they deal with passengers when a performance-evaluation system of also enjoy benefits not typical at is straining current staff, according causing concern at the moment. He
flights are delayed. cabin staffconducted after each many other airlines, including free to some employees. called the meetings an opportunity
The aviation regulator said the flightthat employees complained accommodation and transportation Flight attendants say they are to talk about these directly with
three airlines are failing to meet Eu- was too critical. to and from work. That has all having to work more shifts, with me, according to a copy of the
ropean Union rules on passenger Labor trouble is a frequent head- helped keep a lid on labor strife shorter layovers. First-class atten- email reviewed by The Wall Street
rights. It also said it was reviewing ache for global carriers, where among its roughly 20,000 cabin- dants, who typically work their way Journal.
how Ryanair, Europes biggest dis- strikes and other job action can dis- crew employees until now. up to their postings in premium cab- Emirates has held three sessions
count carrier by traffic, deals with rupt service. But in Dubai, a semiau- The dissent comes as the airline ins, are being asked to work in econ- so far. In a statement, Emirates said
passenger claims when flights are tonomous monarchy that is part of is growing rapidly and recruiting ag- omy to make up for shortages there, the forums last month were just one
hit by technical problems. the United Arab Emirates, strikes gressively to fill its cabins. Emirates according to these employees. Many of many ways employees could com-
Airlines are well aware of the and unions are banned. carried 44.5 million passengers in cabin-crew staff had some annual municate with management.
support they must provide when Emirates has long been a de- its latest financial year, and fore- leave allocation deferred last year, Emirates Chief Executive Tim
there is disruption, CAA Chief Exec- manding employer, especially for casts 70 million passengers by 2020. they said. Clark has weighed in. Late last year,
utive Andrew Haines said. The issue cabin-crew personnelrequiring rig- It plans to hire 5,000 more cabin Emirates said in a statement that he started to send a quarterly up-
was clarified last year when airlines orous training, including in etiquette staff this year, to accommodate it hasnt shortened layover times, date email to employees, soliciting
challenging payment requirements and grooming. But cabin-crew staff growth and attrition. That fast clip and any changes to staff routines are feedback from staff.
lost their case, he said.
The regulator said Aer Lingus,
diverged after the merger agree- sons, Princes William and Harry.
ment, with Lafarge underperform- However, one former Ministry of
ing, the Holcim side started to ques- Defense employee who was paid
tion whether Mr. Lafont was the 100,000 pounds ($149,000) by the
right person to lead the new entity. The role of Lafarge Chief Executive Bruno Lafont emerged as a sticking point to the proposed Lafarge-Holcim merger. paper for passing on stories was
In two days of meetings recently, di- jailed for one year.
rectors at each firm convened sepa- ture of the deal remain. The chal- in performance, the one-for-one eq- tle over Mr. Lafont created tension The issue of whether journalists
rately to hash out a compromise. lenge now before the two boards is uity swap didnt sit well with Hol- on both sides. Lafarge employees should face criminal action for pay-
They ultimately agreed to appoint to quickly complete a decision on cim directors and shareholders. The largely rallied behind Mr. Lafont in ing for stories they deem to be in
Mr. Lafont as nonexecutive co-chair- the CEO, mend any personal animos- financial balance tilted further when the past few days, said one person the public interest has been contro-
man of the combined firm, alongside ity triggered by the fight over Mr. the Swiss franc soared against the familiar with the matter. There was versial. Critics argue that such cases
Holcim Chairman Wolfgang Reitzle. Lafonts role and restore a sense of euro, meaning Holcim shares were massive solidarity behind him, this should never be brought to court.
Lafarge will officially propose a purpose on integrating the two op- suddenly worth more Lafarge person said. There is no celebration whilst
new CEO for the merged company in erations. shares, when converted into euros. On the Holcim side, too, there this witch hunt continues against my
coming weeks. The two companies Mr. Lafont, who is 58 years old, Distrust ratcheted up in February, were efforts to assuage Mr. Lafont. colleagues who are still facing the
have already tentatively agreed on a emerged as a sticking point to the when Lafarge said it was increasing Mr. Reitzle, who will be serving as nightmare that I hopefully one day
candidate, a Lafarge executive cho- Franco-Swiss merger aimed at cre- its dividend despite weak results. co-chairman with Mr. Lafont, told will wake up from, Duncan Lar-
sen by Mr. Lafont, according to peo- ating a globe-spanning construction In February, Holcims board ap- some people privately that he is combe, the papers royal editor, told
ple familiar with the matter. The de- behemoth. Over the 11 months since pointed Perella Weinberg Partners counting on the Lafarge boss to help reporters after being found not guilty.
cision isnt final, however, and a few the deal was announced, Holcim ex- banker Dietrich Becker to serve as an make the merger a success, said an-
other candidates are still being con- ecutives grew uncomfortable with independent adviser on renegotiating other person familiar with the mat-
sidered, these people said. Mr. Lafont running the combined some elements of the deal. He ter. Holcim CEO Bernard Fontana The investigation arose
Shares in both companies rose company as a result of Lafarges worked alongside Goldman Sachs will be stepping down after the
Friday after the deal was an- weak performance and his handling banker Franois-Xavier de Mallmann, merger.
out of an inquiry into
nounced. Swiss billionaire Thomas of the merger process, people famil- who was sole adviser to Holcim on Still, the deal isnt done yet. The phone hacking.
Schmidheiny, who owns about a iar with the matter said. the original merger. Lafarge was rep- merger is subject to a vote by the
fifth of Holcim, praised the deal and The implementation of such a resented by investment banking companies shareholders at their re-
the concession made by Mr. Lafont. merger is not possible without creat- brothers Michael and Yoel Zaoui of spective meetings later this year. In
All people involved attached ing tension and frustration, Mr. La- Zaoui & Co. Investment bank Roth- the wake of the squabble, the two The police investigation into ille-
more importance to the interests of font told reporters this past Friday. schild also worked for Lafarge. companies have delayed the ex- gal payments arose out of an inquiry
the new corporation than to their Since Sunday, my attitude showed The Holcim demands prompted pected completion of the deal by into phone hacking by journalists on
own ambitions, Mr. Schmidheiny individuals shouldnt stand in the 11th-hour efforts by top executives one month to the end of July. the Suns sister paper, the News of
said. way of the realization of the merger. from both companies this past week Inti Landauro the World, which led to the jailing of
But key questions about the fu- As Lafarge and Holcim diverged to keep the tie-up on track. The bat- contributed to this article. ex-editor Andy Coulson and a num-
ber of other senior staff last June.
News UK, the British newspaper
Strong Dollar Slams U.S. Multinationals is pushing companies to triple their contributed to this article.
Continued from page 17 dollar over the next 12 months. Bank of America Merrill Lynch.
outlook on annual profit growth by Thats an enormous headwind for The flip side of the stronger dollar
that scale was in the six months companies that are selling interna- is the boost to non-U.S. stocks. Most
leading to March 2009, according to tionally, Mr. Kostin said. notably, Germanys DAX, with its high
FactSet, as stocks were tumbling to According to FactSet, companies concentration of manufacturing ex-
their crisis-era lows. And should that generate more than 50% of porters, is up 23% this year. In dollar
profit growth come in at the 2.1% sales outside the U.S. are expected terms, the index has gained 9.2%.
rate for all of this year, it would be to post an earnings decline of 11.6% European companies will be in a
slowest pace of earnings growth in the first quarter when results much better situation as the cur-
since profits shrank 7.9% in 2009. start rolling in next month. rency weakens, said William Ken-
David Kostin, chief U.S. equity Companies that generate less nedy, who manages the $11.5 billion
strategist at Goldman Sachs Group than half of sales outside the U.S. are Fidelity International Discovery
Inc., said that when the dollar has expected to post flat earnings for the Fund. Mr. Kennedy has tilted the
rallied in the past, consumer-discre- quarter, according to FactSet. foreign-stock fund to shares of com-
tionary and consumer-staples stocks Companies in the S&P earned panies that stand to benefit the
have fared better than the broader 46% of their sales outside the U.S. in most from a weakening euro, such
Huang Menglin
market. These sectors have relatively 2014, according to S&P Dow Jones as German auto makers and other
low exposure to overseas markets. Indexes. By contrast, 19% of sales exporters as well as hotel operators.
Goldman Sachs expects the euro for Russell 2000 companies comes James Ramage
to fall an additional 12% against the from outside the U.S., according to contributed to this article. Young hybrid corn stalks at Origin Agritech, a Beijing-based seed developer.
THE WALL STREET JOURNAL. Monday, March 23, 2015 | 23
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AlexandraConvertibleBondFundI,Ltd.(ClassA) OT OT VGB 08/31 USD 2155.22 NS NS NS Tel: +7501 258 3160 www.hermitagefund.com E-Mail: funds@hsbctrinkaus.lu Paragon Limited USD A EU EQ CYM 12/31 USD NS.00 12.7 12.7 14.2
The Hermitage Fund GL EQ JEY 03/12 USD 963.12 4.5 105.6 -23.2 Telephone: 352 - 47 18471 UK Fund USD A OT OT CYM 04/13 USD 157.94 1.8 NS NS
HSBC Trinkaus Golden Opportunities OT OT LUX 03/19 USD 55.00 0.1 -33.3 -30.4
n HORSEMAN CAPITAL MANAGEMENT LTD. Prosperity Return Fund A JP BD LUX 12/06 JPY 8577.68 -9.3 -8.4 0.3 n PT CIPTADANA ASSET MANAGEMENT
T: +44(0)20 7838 7580, F: +44(0) 20 7838 7590, www.horsemancapital.com Prosperity Return Fund B EU BA LUX 12/06 JPY 9032.12 4.6 11.0 13.2
Horseman EurSelLtd EUR EU EQ GBR 02/28 EUR 360.26 NS NS NS
Tel: +6221 25574 883 Fax: +6221 25574 893 Website: www.ciptadana-asset.com
Prosperity Return Fund C EU BA LUX 12/06 USD 79.01 -12.2 -11.1 -1.0 Indonesian Grth Fund GL EQ BMU 03/11 USD 162.58 -3.9 2.5 -8.3
Horseman EurSelLtd USD EU EQ GBR 02/28 USD 392.54 NS NS NS Prosperity Return Fund D EU BA LUX 12/06 EUR 121.37 -9.0 -8.8 8.1
Horseman Glbl Ltd EUR GL EQ CYM 02/28 USD 605.47 NS NS NS Renaissance Hgh Grade Bd A EU BA LUX 12/06 JPY 10807.34 3.5 5.1 11.3
n BANC INTERNACIONAL D'ANDORRA. BANCA MORA. Horseman Glbl Ltd USD GL EQ CYM 02/28 USD 605.47 NS NS NS Renaissance Hgh Grade Bd B EU BA LUX 12/06 JPY 11130.39 17.9 25.6 23.9
Avgd. Meritxell 96, Andorra la Vella. Andorra. Ph. +376.884884 www.bibm.ad Renaissance Hgh Grade Bd C EU BA LUX 12/06 USD 96.94 -0.9 0.7 8.4
Andfs. Anglaterra UK EQ AND 11/16 GBP 8.47 2.8 3.6 14.9 n HSBC ALTERNATIVE INVESTMENTS LIMITED Renaissance Hgh Grade Bd D EU BA LUX 12/06 EUR 102.83 -4.6 -4.1 6.9
Andfs. Borsa Global GL EQ AND 03/19 EUR 6.58 15.8 0.7 2.9 T +44 20 7860 3074 F + 44 20 7860 3174 www.hail.hsbc.com
Andfs. Emergents GL EQ AND 11/02 USD 14.77 -20.4 -19.2 -4.7 HSBC ALTERNATIVE STRATEGY FUND
Andfs. Espanya EU EQ AND 03/19 EUR 15.19 11.5 -6.9 21.9 Special Opp EUR OT OT GGY 02/27 EUR 131.14 2.4 5.4 9.1
Andfs. Estats Units US EQ AND 03/19 USD 21.01 -7.0 -1.8 10.0 Special Opp Inst EUR OT OT GGY 03/31 EUR 88.51 0.7 -0.3 13.3 n THE NATIONAL INVESTOR
Andfs. Europa EU EQ AND 03/19 EUR 7.60 12.3 -4.3 9.2 Special Opp Inst USD OT OT GGY 03/28 USD 123.18 4.2 18.5 10.6 PO Box 47435, Abu Dhabi, UAE Web:www.tni.ae
Andfs. Franca EU EQ AND 02/24 EUR 10.98 0.2 17.7 13.7 MENA Special Sits Fund OT OT BMU 02/26 USD 1012.08 4.7 -9.7 -2.2
Special Opp USD OT OT GGY 02/27 USD 138.65 2.5 5.4 9.1
Andfs. Japo JP EQ AND 03/19 JPY 817.66 9.5 27.9 19.2
Andfs. Plus Dollars US BA AND 10/22 USD 9.66 2.3 3.0 6.2 MENA UCITS Fund OT OT IRL 03/16 USD 1333.23 1.3 -3.8 11.6
n HSBC Portfolio Selection Fund n MP ASSET MANAGEMENT INC.
Andfs. RF Dolars US BD AND 03/18 USD 12.52 0.3 2.2 1.1 UAE Blue Chip Fund OT OT ARE 03/18 AED 9.86 -4.8 -9.4 26.8
GH Fund CHF Hdg OT OT GGY 02/27 CHF 133.17 1.7 5.4 6.0 Tel: + 386 1 587 47 77
Andfs. RF Euros EU BD AND 03/19 EUR 12.13 1.0 3.3 2.3 GH Fund EUR Hdg (Non-V) OT OT GGY 02/27 EUR 148.89 1.9 5.8 6.0 MP-BALKAN.SI EE EQ SVN 08/12 EUR 19.29 -1.9 -8.4 -10.9
Andorfons EU BD AND 03/19 EUR 15.93 1.1 0.5 1.8 GH Fund GBP Hdg OT OT GGY 02/27 GBP 165.23 1.9 6.3 6.5 MP-TURKEY.SI OT OT SVN 03/19 EUR 43.85 -4.1 37.1 -8.1
Andorfons Alternative Premium GL EQ AND 12/31 EUR 109.45 16.9 16.9 8.3 GGY
GH Fund Inst USD OT OT 02/27 USD 143.03 2.0 6.6 7.0 n OTHER FUNDS
Andorfons Mix 30 EU BA AND 03/19 EUR 9.55 -6.5 -7.9 -1.8
GH FUND S EUR OT OT CYM 02/27 EUR 167.97 2.1 7.2 7.4 For information about these funds, please contact us on Tel: +44 (0) 207 842 9694/9633
Andorfons Mix 60 EU BA AND 12/19 EUR 8.96 4.4 7.1 -2.5
GH FUND S GBP OT OT CYM 02/27 GBP 176.40 2.1 7.5 7.6 Medinvest Plc Dublin OT EQ IRL 09/30 USD NS.00 NS 1.3 -4.4
n CG Portfolio Fund Ltd GH Fund S USD OT OT CYM 02/27 USD 197.40 2.1 7.2 7.5
NAV OT OT CYM 06/07 GBP 25839.68 5.3 10.9 9.8 GH Fund USD OT OT GGY 02/27 USD 338.14 1.9 5.9 6.2 n WINTON CAPITAL MANAGEMENT LTD
Hedge Investments OT OT GGY 08/16 USD 158.48 NS NS 3.6 Tel: +44 (0)20 7610 5350 Fax: +44 (0)20 7610 5301
n CHARTERED ASSET MANAGEMENT PTE LTD - TEL NO: 65-6835-8866 Leverage GH USD OT OT GGY 02/27 USD 164.14 3.5 9.8 10.5 Winton Evolution EUR Cls H GL OT CYM 02/27 EUR 1425.23 3.3 20.9 15.2
Fax No: 65-6835 8865, Website: www.cam.com.sg, Email: cam@cam.com.sg MultiAdv Arb CHF Hdg OT OT JEY 02/27 CHF 104.24 0.2 3.3 3.2
n MERIDEN GROUP CYM
Winton Evolution GBP Cls G GL OT 02/27 GBP 1447.12 3.3 21.3 15.6
CAM-GTF Limited OT OT MUS 03/13 USD 323131.76 -5.0 -3.9 -12.1 MultiAdv Arb EUR Hdg OT OT JEY 02/27 EUR 117.09 0.7 4.0 3.7
Tel: + 376 741 175 Fax: + 376 741 183 Email: meriden@meriden-ipm.com Winton Evolution USD Cls F GL OT CYM 02/27 USD 1812.57 3.2 20.6 15.3
JEY Antanta Combined Fund EE EQ AND 02/20 USD 166.78 5.8 -20.0 -21.4
MultiAdv Arb GBP Hdg OT OT 02/27 GBP 128.30 0.9 4.6 4.2 Winton Futures EUR Cls C GL OT VGB 02/27 EUR 294.58 2.8 17.0 11.5
n Citadele Antanta MidCap Fund EE EQ AND 02/20 USD 166.68 9.5 -52.8 -36.8
MultiAdv Arb S EUR OT OT JEY 02/27 EUR 133.39 0.8 4.9 4.8 Winton Futures GBP Cls D GL OT VGB 02/27 GBP 321.70 2.8 17.4 11.8
Republikas square 2a, Riga, LV-1522, Latvia MultiAdv Arb S GBP OT OT JEY 02/27 GBP 141.34 0.9 5.3 5.1
Meriden Opps Fund GL OT AND 02/05 EUR 22.68 0.0 -11.2 -11.0
Winton Futures JPY Cls E GL OT VGB 02/27 JPY 20624.60 2.6 17.0 11.8
Citadele Eastern Europ Bal EU BD LVA 03/19 EUR 15.44 1.7 -5.2 -3.1 Meriden Protective Div GL EQ AND 11/24 EUR NS.00 -2.8 NS NS
MultiAdv Arb S USD OT OT JEY 02/27 USD 152.40 0.8 4.9 4.8 Winton Futures USD Cls B GL OT VGB 02/27 USD 1049.65 2.7 16.8 11.6
Citadele Eastern Europ Bd EU BD LVA 03/19 USD 19.25 2.4 -3.9 -2.1
Citadele Russian Eq EE EQ LVA 03/19 USD 12.71 11.8 -28.4 -24.0 MultiAdv Arb USD OT OT JEY 02/27 USD 221.52 0.7 4.1 3.9
n POLAR CAPITAL PARTNERS LIMITED
INDICES
n DJE INVESTMENT S.A. n HSBC Uni-folio
internet: www.dje.lu email: info@dje.lu phone:+00 352 269 2522 0 fax:+00 352 269 25252 Asian AdbantEdge EUR OT EQ JEY 06/30 EUR 91.36 -6.2 -4.5 2.5 International Fund Managers (Ireland) Limited PH - 353 1 670 660 Fax - 353 1 670 1185
DJE Real Estate P OT OT LUX 03/20 EUR 2.95 0.7 -10.7 -9.1 Asian AdvantEdge OT EQ JEY 06/30 USD 171.19 -6.2 -4.4 2.8 Global Technology OT EQ IRL 03/19 USD 25.67 5.7 8.5 18.9
DJE-Absolut P OT OT LUX 03/20 EUR 303.13 17.9 23.3 11.9 Emerg AdvantEdge OT EQ JEY 09/28 USD 151.22 3.4 -2.4 -5.5 Japan Fund USD JP EQ IRL 03/20 USD 21.71 6.1 11.3 4.1
DJE-Alpha Glbl P OT OT LUX 03/20 EUR 217.24 12.4 21.1 9.2 Emerg AdvantEdge EUR OT EQ JEY 09/28 EUR 82.99 2.8 -3.0 -5.9 Polar Healthcare Class I USD OT EQ IRL 03/19 USD 40.72 13.2 21.1 41.6 NAV %RETURN
DJE-Div& Substanz P OT OT LUX 03/20 EUR 367.60 17.0 33.1 16.3 Europ AdvantEdge EUR OT EQ JEY 06/30 EUR 127.84 -3.4 -1.3 2.2 Polar Healthcare Class R USD OT EQ IRL 03/19 USD 39.69 13.1 20.4 40.9 FUND NAME GF DATE CR NAV 1-WK 1-MO 1-Q 1-YR 2-YR
DJE-Gold&Resourc P OT EQ LUX 03/20 EUR 125.52 11.9 0.6 -9.8 Europ AdvantEdge USD OT EQ JEY 06/30 USD 135.07 2.0 4.3 5.1
DJE-Renten Glbl P EU BD LUX 03/20 EUR 157.20 3.6 7.7 4.9 Real AdvantEdge EUR OT OT JEY 04/30 EUR 104.69 1.3 -9.5 -1.9 n Hemisphere Management (Ireland) Limited
LuxPro-Dragon I AS EQ LUX 07/20 EUR 144.57 -8.5 5.0 7.6 Real AdvantEdge USD OT OT JEY 04/30 USD 105.31 1.5 -8.8 -1.7 n ARIX ABSOLUTE RETURN INVESTABLE INDEX
Discovery USD A GL OT CYM 12/31 USD 101.35 NS NS NS
LuxPro-Dragon P AS EQ LUX 07/20 EUR 140.29 -8.8 4.4 7.0 Trading AdvantEdge OT OT GGY 02/27 USD 154.27 2.1 21.8 4.0 Feri Institutional Advisors, www.feri.de
Elbrus USD A OT OT CYM 02/28 USD 9.12 NS NS NS ARIX Composite Gross USD OT OT GBR 02/28.00 USD1706.18 1.6 5.1 6.1
LuxTopic-Aktien Europa EU EQ LUX 03/20 EUR 23.84 14.0 17.8 12.5 Trading AdvantEdge EUR OT OT GGY 02/27 EUR 139.88 2.1 22.2 4.2
LuxTopic-Pacific OT OT LUX 03/20 EUR 22.21 7.7 11.3 0.8 Europn Conviction USD B EU EQ CYM 01/31 USD 160.39 -3.2 -0.7 0.2 n CG Portfolio Fund Ltd
Trading AdvantEdge GBP OT OT GGY 02/27 GBP 149.38 2.0 22.2 4.2
Europn Forager USD B EU EQ CYM 01/31 USD 319.76 -3.3 -1.3 5.0 NAV OT OT CYM 06/07.00 GBP25839.68 5.3 10.9 9.8
Data as shown is for information purposes only. No offer is being made by Morningstar, Ltd. or this publication. Funds shown arent registered with the U.S. Securities and Exchange Commission and arent available for sale to United States citizens and/or residents
except as noted. Prices are in local currencies. All performance figures are calculated using the most recent prices available. 12-month and 2-year returns may be calculated over 11- and 23-month periods pending receipt and publication of the last month end price.
For information about listing your funds, please contact: Freda Fung tel: +852 2831 2504; email: freda.fung@wsj.com
24 | Monday, March 23, 2015 THE WALL STREET JOURNAL.
MARKETS
at U.S. public companies, only direc- Scott Stringer, the adviser to the The nation produced a record 1.7 As of March 17, bullish hedge funds,
tors who are supported by the com- citys pension funds. million metric tons of cocoa in the pension funds and others outnum-
pany are nominated to the board. Another shareholder group that year ended September, according to bered those betting on lower prices
The changes could give pension BofA CEO Brian Moynihan. Taking the had opposed combining the chair- the International Cocoa Organiza- by 34,539 contracts, the smallest
funds, unions and other big inves- chairmans role has been faulted. man and CEO jobs, the Interfaith tion in London. Market watchers say gap since July 2013, according to
tors more influence over U.S. com- Center on Corporate Responsibility, Ivory Coast cocoa output is on track data from the U.S. Commodity Fu-
panies. Bank of Americas agreement Citigroup Inc. recently decided had filed a proposal on separating to be about the same this year, at a tures Trading Commission.
requires that shareholders own at to support a similar shareholder the two roles. But it dropped the time when the world is consuming That said, the prospect that by
least 3% of the shares for at least proposal, though its strategy differs proposal after the bank promised to less chocolate. 2020 there could be a global cocoa
three years, though up to 20 inves- slightly from Bank of Americas. instead issue a report on its busi- Reports indicate a good mid- shortage is still on some investors
tors will be allowed to pool their While Bank of America already ness principles. crop coming on, which should keep minds. With about 70% of global co-
holdings to reach that threshold. changed its bylaws, Citigroup is sup- The bank worked out a separate selling pressure on, said Jack
The shareholders that helped porting a shareholder amendment compromise this year with another Scoville, vice president of Price Fu-
push for the changethe California that investors can vote on at the an- shareholder group, the UAW Retiree tures Group in Chicago. Higher wages for cocoa
Public Employees Retirement Sys- nual meeting. Medical Benefits Trust, which had Ivory Coast produces two cocoa
tem, the California Teachers Retire- Bank of America had previously proposed that the bank disclose crops a yeara main harvest that
farmers in Ivory Coast
ment System and the adviser to New opposed similar proxy-access pro- each year whether it had clawed begins in October and a smaller and wet weather are
York Citys five pension fundscol- posals filed by activist investor John back pay from top executives. The mid-crop that is reaped starting in
lectively own about 90 million Harrington, including one filed for bank agreed to adopt a similar mea- April. Higher wages for cocoa farm-
making for increased
shares, or about 0.9% of the total. this years ballot. sure. The bank had opposed another ers in Ivory Coast and wet weather bean production.
Giving shareholders more say The bank said it had numerous shareholder proposal, by the con- are are making for increased bean
over who is on the board is a fun- discussions this year with a range of sumer-advocacy group Public Citi- production, while demand for choc-
damental shareholder right and shareholders on the issue of giving zen, asking for a report on whether olate has been less than some inves-
necessary for making board mem- investors more say over who joins the bank should sell off more units. tors had expected. coa production in West Africa, the
bers accountable to shareholders, the board before making the change. The Securities and Exchange Com- Global demand, as measured by crop is vulnerable to plant diseases
said Anne Simpson, senior portfolio The pension funds victory Friday mission ruled last week that it the amount of cocoa processed, is or civil strife. In addition, many of
manager of Calpers, the biggest pub- came after an unsuccessful effort on would allow that proposal to appear likely to decline this year in every the trees there are older and less-
lic pension fund in the U.S. another governance change last fall, on the ballot at the annual meeting. region except Africa, the ICCO said. productive.
Demand in Europe, the biggest choc- There are a number of potential
olate-consuming region, and the threats to cocoa production over the
Germanys Coming Nuclear Costs Spark Fears Americas are expected to fall 2%
each, while consumption in Asia,
once seen as the region with the
next five years, but the market has
baked a lot of that risk in, said Hec-
tor Galvan, senior market strategist
Continued from page 17 most growth potential, could fall at RJO Futures in Chicago. You can
We are convinced, to the best of Energy Source 4%, according to the ICCOs fore- only beat a dead horse for so long
our knowledge, that the provisions Germanys share of electricity from nuclear power has declined, and the casts. before you come up empty.
are sufficient, said RWE executive- country aims to phase out its nine remaining nuclear reactors by 2022. Asia is pulling back, everyone is Also, while demand has declined,
board member Rolf Martin Schmitz. pulling back from cocoa because the it doesnt stay down for long, Mr.
He said costs directly linked to de- Share of electricity from Compared to other countries price got really high and chocolate Galvan said. The worlds craving for
commissioning are fairly predict- nuclear power in Germany in 2013 is a luxury, not a need, said Shawn chocolate always bounces back.
able. Less certain are costs depen- 40%
dent on political conditions,
particularly related to final disposal
France 73.3%
Fund Scorecard
of waste. 30
The energy companies are being
Belgium 52.1 EUR High Yield Bond
pummeled by falling electricity de- Fundsthatinvestinhigheryieldingsecuritiesdenominated/hedgedinEuropeancurrencies
mand in Europe and billions of eu- Switzerland 36.4
20 40%ofassetsinsecuritieswithacreditqualityequivalenttoBB,orlower.Rankedon%total
ros in government-subsidized, so- return (dividends reinvested) in Euros for one year ending March 20, 2015
called green energy flooding the U.S. 19.4
power grid. Both effects are eroding
Leading 10 Performers
10
FUND FUND LEGAL % Return in $US **
wholesale power prices, leaving con- Germany 15.4 RATING * NAME FUND MGM'T CO. CURR. BASE YTD 1-YR 2-YR 5-YR
ventional power stations unprofit- NS YCAP High YCAP Asset USDLUX 16.07 34.86 NS NS
able. And because big, complex proj- 0 Yield K USD Dis Management (Europe)
ects often go over budget, pledging China 2.1
1994 2000 05 10 14 4 Banque Carnegie Fund EURLUX 9.17 15.96 11.09 9.03
that decommissioning wont cost
CarnegieHighYieldBondC Services S.A.
taxpayers any money is very opti- Sources: Germanys Federal Statistical Ofce (historic); International Atomic Energy Agency (countries)
mistic, said Equinet analyst THE WALL STREET JOURNAL NS Pictet-EUR Pictet Funds CHFLUX 15.58 15.63 10.99 NS
Michael Schaefer. ShortTermHighYieldHICHF (Europe) S.A.
Germany isnt alone in tackling highly radioactive waste slated to be found, all waste will be stored tem- NS Ampega Ampega Investment EURLUX 3.57 10.70 NS NS
decommissioning. The International shipped back soon from France and porarily. Keeping interim facilities CrossoverPlusRentenfondsI GmbH
Energy Agency says roughly half of Britain, where German nuclear fuel safe is expensive. E.ON has said de- 4 Aberdeen Aberdeen Global GBPLUX 6.25 9.87 10.10 11.26
the worlds 434 nuclear-power had been sent for reprocessing. lays in finding a disposal site will GlobalSelHighYieldBdD1 Services SA
plants will be retired by 2040. Most There has been no outward, vis- cost the German nuclear industry NS Petercam L Petercam EURLUX 4.21 9.72 NS NS
are in Europe, the U.S., Russia and ible progress on the question of 2.6 billion. Bonds EUR Corp Hi Yld A Institutional Asset Management
Japan. where to store the nuclear waste, Utilities have sued the German 2 Petercam L Petercam EURLUX 3.94 9.25 6.43 7.64
Despite this global trend, no said Matthias Lang, a Dsseldorf- government to recover some
Bonds Higher Yield A Institutional Asset Management
country yet has a site ready for final based attorney at law firm Bird & cleanup costs, but verdicts could be
disposal of radioactive waste. Bird. years away. And their efforts face 2 Accent Yield Socit Gnrale EURBEL 4.66 9.22 5.82 4.22
Germany is trying to find a deep In 2013 Germany restarted its political opposition. Opportunities Acc Private Banking NV
geological site suitable to store long-running site search because of The government needs to wake 4 Regard Haut Pro BTP Finance EURFRA 3.05 8.39 9.61 NS
highly radioactive waste for about public concerns about a tentative up and prevent the companies from Rendement
one million yearsthe time waste selection. The government now aims relegating their nuclear legacy to us NS Indep Haut Indep'AM EURFRA 4.30 7.14 9.67 5.58
needs to become safe to most living to designate a disposal site by 2031, taxpayers, said Sylvia Kotting-Uhl, Rendement A/I
organisms. The country expects though subsequent geological explo- a parliamentarian representing the NOTE: Changes in currency rates will affect performance and rankings. Source: Morningstar, Ltd
about 600,000 cubic meters of ra- ration and construction could delay Green party. KEY: ** 2YR and 5YR performance is annualized 1 Olivers Yard, 55-71 City Road
NA-not available due to incomplete data; London EC1Y 1HQ United Kingdom
dioactive waste by 2080. any opening to about 2050. Christian Grimm NS-fund not in existence for entire period www.morningstar.co.uk; Email: mediaservice@morningstar.com
And that doesnt include more Until a final disposal site is contributed to this article. Phone: +44 (0)203 107 0038; Fax: +44 (0)203 107 0001
THE WALL STREET JOURNAL. Monday, March 23, 2015 | 25
Commodities Prices of futures contracts with the most open interest Currencies London close on March 20
EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; ICE-US: ICE Futures U.S.MDEX: Bursa Malaysia Per In Per In
Derivatives Berhad; LIFFE: London International Financial Futures Exchange; COMEX: Commodity Exchange; LME: London Metal Exchange; AMERICAS Per euro In euros U.S. dollar U.S. dollars Per euro In euros U.S. dollar U.S. dollars
NYMEX: New York Mercantile Exchange;ICE-EU: ICE Futures Europe. *Data as of March 19, 2015 Per In
ONE-DAY CHANGE Year Year Argentina peso-a 9.5500 0.1047 8.7974 0.1137 EUROPE Per euro In euros U.S. dollar U.S. dollars
Commodity Exchange Last price Net Percentage high low Brazil real 3.4871 0.2868 3.2123 0.3113 Bulgaria lev 1.956 0.5112 1.8019 0.5550
Corn (cents/bu.) CBOT 385.00 11.50 3.08% 418.25 367.00 Canada dollar 1.3640 0.7331 1.2567 0.7958 Croatia kuna 7.631 0.1310 7.042 0.1420
Soybeans (cents/bu.) CBOT 972.50 10.75 1.12 1,067.00 953.50
Chile peso 685.52 0.001459 631.50 0.001584 Euro zone euro 1 1 0.9213 1.0855
Wheat (cents/bu.) CBOT 530.00 18.00 3.52 607.50 478.25
Colombia peso 2795.00 0.0003578 2574.55 0.0003884 Czech Rep. koruna-b 27.494 0.0364 25.327 0.0395
Live cattle (cents/lb.) CME 150.825 0.600 0.40 158.250 138.575
Cocoa ($/ton) ICE-US 2,764 49 1.80 3,038 2,674 Ecuador US dollar-f 1.0855 0.9213 1 1 Denmark krone 7.4559 0.1341 6.8687 0.1456
Coffee (cents/lb.) ICE-US 142.80 -1.35 -0.94% 187.40 128.75 Mexico peso-a 16.3077 0.0613 15.0225 0.0666 Hungary forint 303.25 0.003298 279.35 0.003580
Sugar (cents/lb.) ICE-US 12.70 0.08 0.63 16.27 12.39 Peru sol 3.3520 0.2983 3.0878 0.3239 Iceland krona 148.79 0.006721 137.06 0.007296
Cotton (cents/lb.) ICE-US 62.61 -0.34 -0.54 66.24 57.95 Uruguay peso-e 27.844 0.0359 25.650 0.0390 Norway krone 8.6816 0.1152 7.9984 0.1250
Rapeseed (euro/ton) LIFFE 371.00 unch. unch. 374 340
U.S. dollar 1.0855 0.9213 1 1 Poland zloty 4.1320 0.2420 3.8064 0.2627
Cocoa (pounds/ton) LIFFE 1,944 21 1.09 2,046 1,864
Venezuela bolivar 6.83 0.146362 6.29 0.158883 Russia ruble-d 64.193 0.01558 59.137 0.01691
Robusta coffee ($/ton) LIFFE 1,820 5 0.28 2,077 1,685
ASIA-PACIFIC
Copper ($/lb.) COMEX 2.7570 0.0970 3.65 2.8380 2.4200 Sweden krona 9.3317 0.1072 8.5969 0.1163
Australia dollar 1.3942 0.7172 1.2845 0.7785
Gold ($/troy oz.) COMEX 1181.90 12.90 1.10 1,308.80 1,141.60 Switzerland franc 1.0576 0.9456 0.9743 1.0264
Silver ($/troy oz.) 16.745 0.631 18.535 15.260 China yuan 6.7387 0.1484 6.2022 0.1612
COMEX 3.92 Turkey lira 2.7928 0.3581 2.5727 0.3887
Aluminum ($/ton)* LME 1,781.50 5.00 0.28 1,889.50 1,746.50 Hong Kong dollar 8.4200 0.1188 7.7568 0.1289
Ukraine hryvnia 25.0190 0.0400 23.4315 0.0427
Tin ($/ton)* LME 16,875.00 -300.00 -1.75 19,750.00 16,875.00 India rupee 67.5510 0.0148 62.2275 0.0161
U.K. pound 0.7247 1.3802 0.6675 1.4981
Copper ($/ton)* LME 5,812.00 137.00 2.41 6,247.00 5,369.00 Indonesia rupiah 14118 0.0000708 13005 0.0000769 MIDDLE EAST/AFRICA
Lead ($/ton)* LME 1,698.00 -22.00 -1.28 1,894.00 1,698.00 Japan yen 130.39 0.007668 120.13 0.008325 Bahrain dinar 0.4093 2.4434 0.3770 2.6523
Zinc ($/ton)* LME 2,011.50 5.50 0.27 2,196.50 2,005.00
Kazakhstan tenge 200.44 0.004990 186.01 0.005376 Egypt pound-a 8.2867 0.1207 7.6343 0.1310
Nickel ($/ton)* LME 13,685 80 0.59 15,540 13,600
Macau pataca 8.6579 0.1155 7.9756 0.1254 Israel shekel 4.3990 0.2273 4.0523 0.2468
Crude oil ($/bbl.) NYMEX 46.41 0.88 1.93 56.75 44.03
Malaysia ringgit-c 4.0274 0.2483 3.7100 0.2695 Kuwait dinar 0.3251 3.0760 0.2994 3.3396
Heating oil ($/gal.) NYMEX 1.7099 0.0072 0.42 1.9384 1.5550
RBOB gasoline ($/gal.) NYMEX 1.7882 0.0167 0.94 1.9795 1.5188 New Zealand dollar 1.4319 0.6984 1.3189 0.7582 Oman sul rial 0.4181 2.3921 0.3851 2.5967
Natural gas ($/mmBtu) NYMEX 2.811 -0.018 -0.64 3.2000 2.6200 Pakistan rupee 110.615 0.0090 101.898 0.0098 Qatar rial 3.953 0.2530 3.642 0.2746
Brent crude ($/bbl.) ICE-EU 55.16 0.73 1.34 63.66 48.95 Philippines peso 48.655 0.0206 44.833 0.0223 Saudi Arabia riyal 4.0717 0.2456 3.7509 0.2666
Gas oil ($/ton) ICE-EU 521.75 4.50 0.87 584.25 462.75 Singapore dollar 1.4966 0.6682 1.3787 0.7253 South Africa rand 13.0464 0.0766 12.0187 0.0832
Sources: SIX Financial Information; WSJ Market Data Group South Korea won 1208.01 0.0008278 1112.81 0.0008986 United Arab dirham 3.9872 0.2508 3.6730 0.2723
Sri Lanka rupee 144.40 0.0069252 133.02 0.0075177
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35.356
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31.320
32.570
0.03193
0.03070
a-floating rate b-financial c-government rate c-commercial
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26 | Monday, March 23, 2015 THE WALL STREET JOURNAL.
Previous High
close, in STOCK PERFORMANCE
Company Country Industry Volume local currency Previous session YTD 52-week
Close 18500
Banco Santander S.A. Spain Banks 202,431,380 6.80 4.83% -1.8% 8.6%
Low
Glencore PLC United Kingdom General Mining 64,726,445 299.30 4.74 0.2 -0.7
BHP Billiton United Kingdom General Mining 16,195,909 1,539 3.60 10.8 -14.2 18000
ENI Italy Integrated Oil & Gas 35,153,520 16.25 3.44 12.0 -9.7
Banco Bilbao Vizcaya Argn Spain Banks 48,991,862 9.37 3.23 19.3 10.7 t
17500
50day
Diageo United Kingdom Distillers & Vintners 6,509,933 1,924 -0.85% 4.1 7.4 moving average
Reckitt Benckiser Grp United Kingdom Nondurable Household Products 1,987,326 5,960 -0.50 14.4 23.0 17000
British American Tobacco United Kingdom Tobacco 6,144,310 3,657 -0.30 4.5 13.8
Siemens Germany Diversified Industrials 7,312,596 100.65 -0.30 7.4 3.0
16500
Prudential United Kingdom Life Insurance 7,732,973 1,748 -0.26 17.1 29.5
credit
creditworthiness. Regions that are treading in rough waters how much a seller demands to sell-protection from default on an issuer's debt. The snapshot below gives a
can see spreads swing toward the maximumand vice versa. sense which way the market was moving yesterday.
Indexes below are for five-year swaps.
dealmakers
CHANGE, in basis points CHANGE, in basis points
Europe: 22/1 0.52 102.26% 0.01% 0.78 0.48 0.60 Yesterday Yesterday Five-day 28-day Yesterday Yesterday Five-day 28-day
Eur. High Volatility: 20/1 0.52 101.79 0.01 0.84 0.48 0.64 CABLE WIRELESS Hellenic Telecom 602 77 124 168
WORLDWIDE 51 3 4 1
Europe Crossover: 22/1 2.65 110.18 0.05 4.05 2.50 3.25 Deutsche Bk 68 4 8 2
Lafarge 70 3 5 6
Asia ex-Japan IG: 22/1 1.02 99.91 0.01 1.28 0.97 1.09 HSBC Bk 54 3 6 4
Airbus Group 50 1 3 ...
Japan: 22/1 0.55 102.13 0.01 0.79 0.55 0.65 Deutsche Lufthansa 106 5 10 6
SABMiller 53 1 2 8
Note: Data as of March 19 Portugal Telecom Intl Fin 478 24 102 122
LVMH Moet Hennessy 23 1 ... 3
In percentage points
Spreads Louis Vuitton Carrefour 45 2 4 1
Index roll Stmicroelectronics 60 2 4 23 LLOYDS BK 51 2 5 3
Spreads on 2.00
Fresenius 65 2 ... 7 Commerzbank 78 3 7 4
ve-year swaps t Europe Sub Financials
1.50 Stora Enso 106 3 3 13 UPM Kymmene 76 3 7 6
for corporate Deutsche Bahn 18 ... 1 4 WENDEL 79 3 12 3
debt; based on 1.00
Glencore Intl 175 4 15 15 Source: Markit Group
Markit iTraxx t Europe Senior Financials
0.50
indexes.
0
Oct. Nov. Dec. Jan. Feb. Mar. Behind US deals: Bank revenues from equity capital markets
2014 2015
Source: Markit Group Behind every IPO, n Equity capital markets n Debt capital markets (both in billions, left axis)
follow-on or
convertible equity ECM as a percentage of total
6 (right axis) 75%
offering is one or t
more investment
banks. At right, 4 50
investment banks
historical and
year-to-date
WSJ.com>> revenues from global
2 25
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stock quotes, news and commentary at WSJ.com. (ECM) deals 0 0
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THE WALL STREET JOURNAL. Monday, March 23, 2015 | 27
PERSONAL JOURNAL
BOOKS
and testament At the Top of My studied dutifully after his death. It led, as Mr. Jangfeldt takes pains
Voice, and the full-throttle way in Bengt Jangfeldt suggests in this bi- to show us, to the tragic end that
which he lived his life was more ography that Mayakovskys poetry is his poetry had predicted from the
than a match for the hyperbole of now studiously neglected in his very beginning. If you wish, he
his writing. Everything was extrava- homelandexcept, ironically, in the had written in 1915, I shall rage on
gant about Mayakovsky, from his sort of professional milieus he once RED LETTERS Mayakovskys Caricature Against the Constituent Assembly (1921). raw meat / or, as the sky changes
size 12 shoes and towering physical expressly forswore. its hue / if you wish, I shall grow
presence (his surname is derived Mayakovskys tumultuous and stoy, etc. to be thrown from the ter his affair with Lili ended in 1923. irreproachably tender: / not a man,
from mayak, the Russian word for fascinating life, replete with pas- ship of modernity. Along with their entourage, which but a cloud in trousers!
lighthouse) to his desperate gam- sionate love affairs, artistic quarrels But beneath Mayakovskys brash included the brilliant literary schol- Since the lifting of Cold War cen-
bling habit, neurotic hypochondria and political intrigue, is a biogra- and anarchic posturing was a sensi- ars Roman Jakobson and Viktor sorship, many revelatory books and
and enormous need for love. As he phers dream. Born a provincial for- tive, lyrical nature, unleashed when Shklovsky and Lilis sister, Elsa, they articles have shed light on the leg-
wrote in his diary in 1923, after his est rangers son in 1893, he began he met the supremely self-assured occupy a large amount of space in acy of a poet whose name had been
jealousy compelled his paramour, writing poems while imprisoned for and captivating Lili Brik, who would Mayakovsky: A Biography. Much devalued through ubiquitous associ-
Lili Brik, to impose a two-month seditious political activity in his become his muse and paramour. Lili of this is justified, particularly ation with metro stations, statues
moratorium on their relationship: I teens. During his impoverished and her husband, Osip, a cutting- where it concerns Osips coopera- and streets. With this biography, the
love you, I love you, despite every- years at art school in Moscow, he edge critic, immediately recognized tion with the secret police, which fruit of a lifetime of research, Maya-
thing and because of everything. I was drawn into the citys avant- Mayakovskys talent when he read appears to have played no small role kovsky takes his rightful place as
have loved you, I love you and I will garde and rapidly became one of the his first major poem to them in in facilitating all of their extensive one of the most important and rep-
love you. . . . Is love the total sum of leaders of the nascent Russian Fu- 1915. They began championing his foreign travel in the early 1920s. But resentative artists of his age.
everything to me? Yes, only in an- turist movement. Mayakovsky was work and also welcomed him into this background comes at the ex- Ms. Bartletts books include
other sense. Love is life, love is the an enthusiastic contributor to its their marriage, which was a model pense of other figures who might Victory Over the Sun: The
main thing. My poetry, my actions, notorious 1912 manifesto, A Slap in of emancipated sexual mores. have cast Mayakovskys life in Worlds First Futurist Opera, as
everything else stems from it. Love the Face of Public Taste, which The Briks remained important greater perspective. well as biographies of Chekhov
is the heart of everything. called for Pushkin, Dostoevky, Tol- figures in Mayakovskys life even af- The iconoclastic poet was natu- and Tolstoy.
THE WALL STREET JOURNAL. Monday, March 23, 2015 | 29
BOOKS
Associated Press
Islamic State is scaring the day- snuff films have proved to be an ef- guide to religious truth. Islamic State
lights out of us. Al Qaeda announced fective marketing tool, especially is not Islam, but it is certainly Is-
itself to the world with an unspeak- with foreign audiences. Important Is- lamic. This is not an observation
able bang but over time retreated lamic State messages are simultane- about ancient scripture but about
(and regrouped) in the face of drone ously released in English, French and ROLE MODELS Two boys in Suru, Turkey, restage one of the beheadings seen in current practice. Extremist Chris-
attacks and heightened surveillance German and then translated into fur- the videos distributed by ISIS. Suru is on the Syrian border, near intense fighting. tians or Jews or Hindus might be
and law-enforcement efforts. Islamic ther languages. Beheading British able to point to similar justifying
State, also known as ISIS, seems only and American prisoners enacts a authors, a fellow at the Institute of ites and Sunni rivals. passages in their own sacred texts,
to proliferate, like a lethal virus that deeply satisfying drama of vengeance Modern Russia in New York and an Jihadist atrocities finally trig- but they would not gain much trac-
has escaped from the lab and begun and power-reversal to those who feel analyst at the Delma Institute in Abu gered the Sunni backlash known as tion because far fewer of their coreli-
madly self-replicating. Already estab- crushed by, and in, the West. Dhabi, respectively, write. He boot- the Awakening. This was the moment gionists would sympathize with their
lished across a chunk of Iraq and But Islamic State would not be legged alcohol and may have been a when Islamic State could have been views.
Syria equal in size to Great Britain, it nearly so powerful, or so protean, an pimp. Zarqawi had the makings of an destroyed. The 2007 surge brought But Islamic State is also a prob-
has begun to colonize Libya, almost organization if it appealed only to Al Capone until his desperate mother an interval of peace and hopes for a lem in geopolitics. The war in Iraq
a thousand miles away, and perhaps bloodlust. Unlike al Qaeda, which of- enrolled him in religious classes at a nonsectarian Iraq. But Iraqs prime crystallized for many Muslims the
also the Sinai, Afghanistan and Ye- fers the possibility of victory only in mosque. He emerged a committed minister, Nouri al-Maliki, a Shiite tri- long-standing sense of insult that
men. Kurdish soldiers and American some remote era, Islamic State, by Salafist and warrior for Islam. After umphalist with the same zero-sum came of Western incursions into the
pilots are killing hundreds or thou- occupying territory and declaring the five years in a Jordanian jail for mili- worldview as his Sunni enemies, Middle East. Islamic State was born
sands of Islamic State warriors, but caliphate, invites its followers to live tant activities, Zarqawi traveled to turned on the Sons of Iraq who had in Iraq. Should we say, then, that it
still more thousands stream across in the prophesied paradise. It offers Afghanistan in 1999. When bin Laden helped the U.S. defeat the terrorists. constitutes a particularly virulent re-
the Turkish border to die a glorious destruction right now, redemption asked him to make bayatto pledge Mr. Maliki, in effect, proved that sponse to the U.S. invasion? That is,
death. Islamic State seems to be right now. Ms. Stern, a lecturer on allegiancehe refused. This ruthless what the Sunni extremists had been would a less bellicose U.S. policy
nourished from a demonic well- terrorism at Harvard who served in jihadist was a born schismatic. saying about Iraqs Shiite rulers was have deprived Islamic State of a cen-
spring. the Clinton administration, and Mr. Zarqawi moved to Iraq in the af- true. tral grievanceindeed, of a reason
Berger, a Brookings fellow specializ- termath of the U.S. invasion. It was Could anything have been done to for being? Many on the left make this
ing in studying extremism, describe he who masterminded the truck- prevent this slide back into sectarian argument. Neither of these books
a high-definition video released by bomb attack in Baghdad in 2003 that violence? Messrs. Weiss and Hassan even addresses it, chiefly because,
Unlike al Qaeda, which offers Islamic State at the end of Ramadan killed Sergio Vieira de Mello, the argue that both the Bush and the unlike al Qaeda, Islamic State seems
victory in some remote era, last year in which foreign fighters chief United Nations representative Obama administrations, equally ea- only passingly interested in the iniq-
urge Muslims everywhere to emi- in the country, and 21 others. In this ger to see the last of Iraq, disengaged uities of the West. One of the distin-
ISIS, in occupying territory grate to the land of Khilafah. A and other spectacular killings, the politically as well as militarily, aban- guishing features of the groups ob-
and declaring the caliphate, chant plays in the background: Our authors note, Zarqawi had help from doning the Sunni tribes to Mr. Ma- sessive takfiri culture is a relentless
state was established upon Islam, / Iraqs dethroned Baathist leaders. likis Shiite mercies. Its true, at the focus on the near enemy of Islamic
invites its followers to live in and although it wages jihad upon the The central role that Baathists have very least, that neither foresaw the regimes rather than the far ones of
the prophesied paradise now. enemies, / it governs the affairs of played in the rise of Islamic State is maelstrom that Iraq would become. the Western democracies. Messrs.
the people. / It looks after its flock seen as both a paradox and a poten- And that was all the space the su- Weiss and Hassan argue that Zarqawi
with love and patience. The camera, tial source of weakness. How long, premely adaptive Islamic State jihad- and his allies gave little thought to
Islamic State has advanced to the the authors note, lingers on a child after all, can secularists and millena- ists needed. Ayyub al-Masri was fighting the Americans until the Bush
center of our lives, and our night- holding a realistic-looking subma- rians make common cause? The an- killed in a U.S.-led raid in April 2010, administration installed a Shiite gov-
mares, with astonishing speed. In chine gun. swer seems to be: longer than we and Islamic State regrouped under ernment in Baghdad. Of course, if Mr.
January 2014, Barack Obama called The caliphate constitutes an exer- think. Messrs. Weiss and Hassan Abu Bakr al-Baghdadi. He formed ad- Bushs fatal mistake was not invading
the organization the junior varsity cise in nation-building and a viable point out that in his last years Sad- ditional alliances with Baathist lead- Iraq but opening the Pandoras box of
team to al Qaedas varsity. Within six alternative to the apostate regimes dam Hussein organized an Islamic ers while adding to Islamic States sectarianism, thats still a very big
months of that ill-considered taunt, otherwise covering the face of the Faith campaign designed to give reli- ranks through a series of deftly exe- mistake.
Islamic State had routed the Iraqi earth. In a recent report for the gious legitimacy to his secular totali- cuted attacks on prisons in Iraq hold- In The Rise of Islamic State: ISIS
army; conquered Mosul, Iraqs sec- Brookings Institution, the Middle tarianism and create a new category ing veteran jihadists. Mr. Maliki was and the New Sunni Revolution, a
ond largest city; gained control over East analyst Charles Lister notes of Salafist-Baathists. Zarqawi was Islamic States first gift; the next was quickie book rushed into print to ride
a vast swath of Syria; and declared a that, within two days of the conquest himself a point of contact between Bashar Assad, whose savage cam- the wave of Islamic State anxiety (en-
caliphate in its territory. Islamic of Mosul, Islamic State had issued a the groups, for his long career of paign to liquidate what began as a tire sentences are repeated in several
State is a much better organized, 16-point document laying out its gov- crime had introduced him to a highly peaceful uprising turned Syria into a different chapters), Patrick Cockburn
more adaptive and more media-savvy erning principles. Elsewhere in Iraq, differentiated violent underworld. charnel house. makes a different case for U.S. re-
organization than almost anyone he writes, Islamic State has filled the Most fundamentally, Zarqawi was Since Islamic State is not actually sponsibility. In the aftermath of 9/11,
very much including U.S. intelli- vacuum of authority with policing, motivated by the same hatred of Shi- a flourishing high-tech startup but a he argues, the U.S. should have con-
genceunderstood. The president education, Sharia courts, humanitar- ism that had moved Iraqs Sunnis to band of apocalyptic murderers, it is fronted Saudi Arabia and Pakistan,
had his metaphor backward. On the ian aid and the like. A favorite data rise up in rebellion against the Shiite very much to the point to ask who, or the true sponsors of Islamist extrem-
strength of three recent books about point of terrorism experts is the con- government installed by the U.S. In a what, should be blamed for its devel- ism. Instead, those countries became
this new generation of extremists, I sumer protection bureau that Islamic letter Zarqawi wrote to bin Laden in opment. This is a bitterly contested allies in the war on terror. This may
would say that al Qaeda is IBM and State has established in Raqqa, its 2004, he described Shiismnot the question. If we understand Islamic well be true, though Mr. Cockburn, a
Islamic State is Apple. Syrian capital. Islamic State promises West, not secularismas the loom- State essentially as an extremist reli- Mideast correspondent for the Inde-
One of these works, ISIS: The slaughter to angry young men and a ing danger and the true challenge. gious organization, then the problem pendent newspaper, does not say
State of Terror, by Jessica Stern and Salafist kibbutz to their sisters. His goal was to provoke a civil war presumably lies with Islam itself and what the U.S. could have or should
J.M. Berger, reads at times like a If Islamic State really were a busi- by hitting Shiites and their holy must be addressed by the Islamic have done to change Saudi or Paki-
Harvard Business School case study ness-school case, we would want to places. Single-minded sectarianism is world. I was recently on a talk show stani behavior.
on developing organizational culture understand how its distinctive cul- the common coin of jihadists and with Asra Nomani, an Indian-Ameri- Containment requires patience,
in the digital world. After al Qaeda ture evolved. On this subject, Ms. Baathists. can journalist and self-described and patience is very hard to muster
leader Ayman al-Zawahiri formally Stern and Mr. Berger largely rely on In 2004, Zarqawi finally made Muslim feminist and reformer. She in the face of persistent savagery. We
disavowed it in February 2014, Is- second-hand sources. We must turn bayat to bin Laden and renamed his brandished a copy of the hadiths will need to remind ourselves that Is-
lamic State launched a Twitter cam- instead to ISIS: Inside the Army of organization al Qaeda in Iraq (AQI). the teachings of Muhammadand lamic State is not Nazism or Soviet
paign through its base of online fol- Terror, by Michael Weiss and Has- In 2006, four AQI operatives blew observed that many of the most hor- Communism. It is terrifying, but it
lowers imploring its leader, Abu Bakr san Hassan, who have talked to a up the al-Askari Mosque in Samarra, rible acts committed by Islamic does not threaten our civilization.
al-Baghdadi, to declare the caliphate. great many of the jihadists them- triggering the civil war Zarqawi State, including slavery and the kill- Jessica Stern and J.M. Berger offer
The groups publicists then took to selves and tell a far more detailed sought. Four months later, he was ing of apostates, enjoyed religious an admonition that we should keep
social media to turn the demand and nuanced story. Islamic State, killed by an American airstrike. But sanction. This is also the theme of a in our wallet and pull out whenever
into a groundswell. Instead of the ji- they note, traces its origin to an en- AQI had momentum, and the organi- much-discussed recent essay in the the anxiety level gets too high: You
hadi elite, Ms. Stern and Mr. Berger trepreneur of violence very different zation was earning as much as $200 Atlantic Monthly in which the jour- are significantly more likely to die in
write, living (sometimes literally) on from Osama bin Laden, a child of million a year in criminal enter- nalist Graeme Wood observes that Is- a car accident, especially if you fail to
a mountaintop, reading The New Saudi privilege who grew up to be- prises that ranged from kidnapping lamic State, far from being un-Is- wear a seat belt, than to be attacked
York Times and watching al Jazeera come an austere ideologue. Abu to oil smuggling. Its new leader, Abu lamic, as both Muslim scholars and by ISIS. Wear a seat belt.
to gauge the mood of the Muslim Musab al-Zarqawi, the founder of Is- Ayyub al-Masri, rechristened the President Obama insist, relies for its Mr. Traub writes a weekly
masses, the newly rechristened Is- lamic State, was a semiliterate but group the Islamic State of Iraq, pre- doctrine upon coherent and even column for ForeignPolicy.com. His
lamic State had adopted a feedback very charismatic Jordanian thug. figuring the goal of the caliphate, learned interpretations of Islam. biography of John Quincy Adams,
loop model. Earlier this month, Is- His first stint in prison was for drug and embarked on a ferocious cam- This is self-evidently true. Messrs. Militant Spirit, is forthcoming
lamic State was reported to have es- possession and sexual assault, the paign of car bombs to kill both Shi- Weiss and Hassan point out that from Basic Books.
30 | Monday, March 23, 2015 THE WALL STREET JOURNAL.
SPORTS
HEARD ON
THE PITCH
Manchester United Seizes
Advantage Over Liverpool
Steven Gerrards tumble in a de-
cisive home game against Chelsea
last spring went down as the mo-
ment the Premier League title
slipped away from Liverpool. His
40 seconds of madness on Sunday
afternoon could prove almost as
costly to the clubs main objective
this season: a top-four finish.
With Liverpool trailing 1-0 to
Manchester United at Anfield, Ger-
rard was sent off less than a min-
ute after coming on for stamping
on Ander Herrera. That left his side
to play the entire second half with
10 men on its way to a 2-1 defeat.
The result put five points of
daylight between United in fourth
and Liverpool in fifth with eight
games remaining in the season.
Gerrard, of course, wasnt en-
tirely to blame for the result. He
wasnt even in when Juan Mata
scored his first of two goals in the
14th minute. But without a full
side, Liverpool never quite worried
United late in the game.
The first half was very good
because I knew in advance that
Liverpool would press us and they
did, but we played them off the
A
fter careful consideration, Ty- large statues, and I have a child that
ler Keillor made a decision: T. I paid $25 for, he says. I think I got
rex had lips. In the debate a great deal. When he has time, he
over dinosaurs oral margin, one of plans to construct a little bit of
the countrys top paleoartists has cave wall and a prop campfire with
taken sides. Mr. Keillors job is to flickering lights so theyll feel more
create flesh models of dinosaurs at home.
Bob Stefko for The Wall Street Journal
and other prehistoric animals based Lips aside, Hes one of the best
on fossil evidencegiving creatures sculptors out there, says Dr. Carr,
that died millions of years ago a who considers Mr. Keillor a master
face, a story and sometimes lips. of realistic painting and scales. Ty-
Using traditional mediums like ler has little competition at the pres-
clay and resin, as well as CT scan- ent time, he adds.
ning and 3-D printing, he is at the An example is his baby sauropod,
forefront of incorporating digital art just hatched from its egg, about to
and technology into paleontology. be eaten by a snake. Mr. Keillor
Mr. Keillor works at the Univer- Paleoartist Tyler Keillor at his home studio with a Herrerasaurus he sculpted, based on fossil evidence. made the diorama for the University
sity of Chicago Fossil Lab under ce- of Michigan and is marketing a min-
lebrity paleontologist Paul Sereno. tistic decisions come from fossils ger, Mr. Keillor read technical papers pect it to breathe, to blink. iaturized version of it in Prehistoric
His work, found in museum collec- and from studying dinosaurs near- about the animals nearest relative. Whenever Mr. Keillor needs en- Times magazine. The scene, discov-
tions around the world, is often the est living relatives: reptiles and He concluded the texture was an al- couragement, he can turn to the ered by paleontologist Jeff Wilson,
publics first look at a newly discov- birds. He decided to give his Hetero- most perfect match for a bag of dry roommates who inhabit the base- was preserved in one fossilized mo-
ered species, as with the pebbly- dontosaurus a fleshy protuberance lentils. So he fashioned the crea- ment of his suburban Chicago home. ment. I followed the bones and did
faced predator Rugops primus, over its nose like a turkey because tures pebbled, scaly skin out of len- Posed in a semicircle are nine cave what they told me to do, says Mr.
which was unveiled in 2004. A of an indentation in the fossil skull. tils pressed into clay. For the skin of man sculptures from the 1930s, dis- Keillor. Yet the pathos on the face of
plain fossil doesnt look like a heck He also gave it a beak, fangs, molars, a little head-butting dinosaur, which carded when Chicagos Field Mu- the little green sauropod is enough
of a lot to the average person, Mr. cheeks and fiendish-looking eyes. is so new it has yet to be named, he seum, where Mr. Keillor once to melt the most rigorous of hearts.
Keillor says. But he is quick to point out, Theres used impressions from dried avo- worked, eliminated its beloved Hall
Instead of studying science, he a bone above the eye that makes it cado skins. of Man exhibit.
cut his teeth working in a dental lab- look evil. Its not me, its the bone. Tyler has a level of exacting de- Details like the bloody knuckles Online>>
oratory, doing special-effects Much of a paleoartists work is tail and creativity thats really re- on one of the cave men have a vis- Watch a video and see more photos
makeup and studying wig making at determining textures, colors and tis- markable, Dr. Sereno says. Adds Mr. ceral narrative quality Mr. Keillor of Tyler Keillor at work at
Chicagos Lyric Opera. As a child, he sues not preserved, or barely pre- Borucki, of Acme Design, You ex- brings to his own work. The Keillors WSJ.com/OffTheWall.
would try to make little puppets of served, in the fossil record. I have
the alien from Alien, he says. He to be able to justify every choice, ev-
dropped out of college to work on ery millimeter of the sculpture, Mr.
low-budget horror movies, commer- Keillor says. He concedes that he is Photography by Brigitte Lacombe
cials and stage productions. willing to find a feasible way to
His skill set was well-suited to Dr. make the thing more visually inter-
Serenos team. After another pa- esting.
leoartist struggled with the hair of a His boss is emphatic about see-
7,000-year-old beautiful woman, ing the balance and the beauty in
Dr. Sereno says, he turned her over the animals his lab animates. (Dr.
to Mr. Keillor. When you see it in Sereno himself was named one of
the ground in the field, you need to People Magazines 50 Most Beautiful
have the mind and eye of an artist, People in 1997.)
he says. Paleontology is about envi- Usually, I give my dinosaurs
sioning things and bringing them lips, Mr. Keillor says. An animal
back to life. living in an arid terrestrial climate
On a recent Thursday, the soft- would have had lips, he reasons,
spoken Mr. Keillor, 42 years old, was pointing to carnivorous reptiles like
painting orange silicone over pieces Komodo dragons as living examples.
of a 95-million-year-old rib, the last But the oral margin remains contro-
of about 100 Spinosaurus bones he versial.
was reproducing for the University Thomas Carr, director of the Car-
of Chicago before it repatriated the thage Institute of Paleontology at
originals back to Morocco. Carthage College in Kenosha, Wis., is
The Sereno teams work on staunchly opposed. If artists put
Spinosaurus, a carnivorous, semi- lips on a dinosaur reconstruction I
aquatic theropod, was detailed in know that theyre doing so without Mike McCue. CEO, entrepreneur, innovator and Wall Street Journal reader.
the recent Nova film Bigger Than T. any evidence to support that idea,
rex. Among other reasons, the proj- he says, Theyre simply not playing
ect is exceptional for being the first by the rules of rigor. Dr. Carr con-
life-size skeleton produced from a siders birds and crocodiles, who are