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Smartphone Stunner Prisoner Wages

Hunger Strike
Samsung’s new Galaxy S7 and S7 Edge To Defy Putin
outshine rivals, but are they worth it?
PERSONAL JOURNAL | A8 OPINION | A10
WEDNESDAY, MARCH 9, 2016 ~ VOL. XXXIV NO. 28 WSJ.com EUROPE EDITION
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On Guard in Aleppo, Syria, as Talks Approach Slump in

What’s
Trade
News
Business & Finance
Puts Heat
T he ECB faces the tough
challenge at its policy
On China
meeting of combating low
BY MARK MAGNIER
inflation without undermin-
ing the region’s banks. A4
BEIJING—China’s worsen-
China reported its largest ing export performance is ex-
monthly drop in exports pected to strengthen Beijing’s
since the financial crisis, commitment to doing more to
likely strengthening Beijing’s shore up flagging growth in
efforts to boost growth. A1 the world’s second-largest
economy.
The U.S. is expanding its
On Tuesday, China reported
probe of VW, using a law
its largest monthly drop in ex-
against bank fraud to go af-
ports since the financial crisis.
ter the German auto maker
SHARIFULIN VALERY/TASS/ZUMA PRESS
The customs administration

over emissions cheating. B1
said exports in February fell
Burberry shares surged
over 6% amid speculation
that the British firm could be Inside
the target of an activist in- Weak Chinese data weigh
vestor or a takeover offer. B1 on Europe miners.............. B9
The Goldman partner
who handled deals for Ma-
25.4% in dollar terms year-
laysia’s controversial govern-
VIGILANT: A Kurdish militia member in the Sheikh Maqsood neighborhood of Aleppo on Tuesday, the site of fighting between U.S.- over-year, compared with a
ment investment fund was
backed militias and Islamist rebel groups. United Nations-run talks between government and opposition officials are set for next week. drop of 11.2% in January.
suspended and later quit. B5
While trade flows were af-
RWE said it would lay off fected by February’s long Lu-
EU Strikes Deal With Turkey

about one-fifth of the work- nar New Year holiday, the de-
force at its U.K. unit, after a cline was sharply lower than
customer exodus led to an economists had forecast.
operating loss last year. B1 Imports also declined, fall-
ing 13.8% last month, the
Vale and Fortescue un-
agency reported, compared
veiled a proposed mining
alliance amid a long period Despite misgivings, Border restrictions along worked out, and the price of British Prime Minister Da- with an 18.8% drop in January,
the Balkans migrant route Ankara’s further cooperation is vid Cameron said the agree- in a further cooling of demand
of weak iron-ore prices. B1 leaders see hope of from Greece through to Ger- high. Humanitarian groups ment was “the basis for a in China that is affecting its
Porsche and TAG Heuer easing migrant crisis many and a surprise offer have criticized the deal as cyni- breakthrough” under which all Asian neighbors. China’s trade
suspended their ties with from Turkey this week to take cal, and legal questions hang migrants arriving in Greece surplus narrowed sharply in
Sharapova after the tennis BY LAURENCE NORMAN back migrants from Greece has over it. could be returned to Turkey. February to $32.59 billion
star failed a drug test. B1 AND VALENTINA POP opened the possibility of a sig- But the accord—which “Now that would, if imple- from $63.29 billion in January.
nificant slowdown in the num- some senior EU officials be- mented, break the business The worse-than-expected
Two United shareholders
BRUSSELS—European lead- bers reaching the bloc. Euro- lieve was only possible once model of the people smugglers trade results dovetail with
launched a fight to reshape
ers expressed hope that the pean Union officials admitted, choking off the Balkan route and end the link between get- other data signaling an econ-
the airline’s board and its
tentative accord struck with however, that the emerging within Europe reduced Tur- ting in a boat and getting set- omy facing more choppiness
approach to investors. B4
Turkish Prime Minister Ahmet solutions are neither morally key’s leverage—could in time tlement in Europe,” he said. ahead, economists said.
Davutoglu in the early hours comfortable nor politically reduce the incentive for poten- Tuesday’s agreement, sup- “China’s exports declined
World-Wide of Tuesday brought them easy and that plenty could still tial migrants to risk the jour- posed to be completed next more than expected in Febru-
closer to containing the migra- go wrong. ney to the EU from the Turk- week when EU leaders gather ary, confirming our view that
tion crisis that has shaken the Key details of the Turkey ish coast across the Aegean again, emerged from a chaotic external trade will likely be a
The EU struck a tentative continent since summer. agreement must still be Sea. Please see TURKEY page A4 Please see TRADE page A2
migration accord with Tur-
key that European leaders
New Pressure on Volkswagen
hope will bring them closer
to containing the crisis. A1
Germans reacted coolly
to the deal ahead of votes
Carney Warns of Risks
seen as referendums on
Merkel’s migration policy. A4
The Bank of England
said the possibility of Brit-
In U.K. Exit From Bloc
BY JASON DOUGLAS already and that a vote in fa- dry assessment of how EU
DAMIEN MEYER/AGENCE FRANCE-PRESSE/GETTY IMAGES
ain leaving the EU poses the vor of leaving could cause a membership affects their abil-
biggest domestic risk to the LONDON—The Bank of Eng- short-term hit to the wider ity to meet the central bank’s
U.K. financial system. A1 land waded into the highly economy. twin goals of maintaining sta-
The scope of airstrikes charged debate on the nation’s A possible departure repre- ble inflation and safeguarding
on an al-Shabaab camp in membership in the European sents “the biggest domestic financial stability. However,
Somalia underscores Union, saying the possibility risk to financial stability,” Mr. that hasn’t stopped advocates
mounting U.S. concerns that Britain chooses to leave Carney said, with potential of an EU exit from criticizing
over the jihadist group. A3 the bloc represents the biggest consequences for Britain’s bal- the central bank for overstep-
domestic risk to the stability ance of payments with the rest ping the mark.
Biden arrived in Israel of the U.K. financial system. of the world, its housing mar- There were at-times heated
amid U.S.-Israeli tension In wide-ranging testimony ket, foreign investment and its exchanges during the almost-
after the cancellation of a to lawmakers on the U.K.’s banks. three-hour-long testimony,
planned trip to Washing- economic relationship with the Like many other central with some so-called euroskep-
ton by Netanyahu. A3 EU, BOE Gov. Mark Carney bankers, BOE officials take tic lawmakers on the panel ac-
Clinton’s national lead POWERED-UP CASE: The U.S. is expanding its probe of the said Tuesday that uncertainty pains to avoid being dragged cusing the central banker of
over Sanders narrowed German car maker over emissions cheating, using a far-reaching surrounding the outcome of into the political fray. Please see CARNEY page A2
slightly to nine points law against bank fraud and eyeing possible tax-law violations. B1 the coming referendum on Officials carefully have
among Democratic primary Britain’s future in Europe is sought to frame their com- ECB faces a difficult
voters, a new poll found. A7 being felt in financial markets ments on the referendum as a balancing act.............................. A4
The U.S. urged Saudi
POLICE CAMERAS POSE Got a Weasel in Your Bracket?

Arabia to avoid more eco-
nomic retaliation against
Lebanon over Hezbollah’s
Fans Pick Their Mammals
DILEMMA FOR U.S. CITIES
growing power in Beirut. A3
Iran test-fired ballistic i i i
missiles despite pressure
from the U.S., which imposed March tournament puts animals
new sanctions in January. A3
A Brazilian judge sen- After Ferguson, efforts to quickly roll out video devices run into friction in imaginary contests; orca vs. hyena
tenced an ex-construction
CEO to 19 years for his role BY DAN FROSCH stun-gun king, and last year reached a $4.5 BY NICOLE FRIEDMAN His pick, the Sumatran rhi-
in a corruption scandal. A5 AND ZUSHA ELINSON million agreement for 2,000 cameras. noceros, crushed the dwarf
Soon, Memphis learned its then-mayor’s At the height of last year’s mongoose in the final round.
CONTENTS Opinion.............. A10-11 American cities rushed to provide police campaign manager had business relations March Madness tournament, Mr. Robertson wasn’t watch-
Arts & Ent............... A9 Personal Journal.. A8
Business & Tech. B1-4 Property Report... B6
departments with body cameras, spurred by with Taser through a consulting firm, draw- Matthew Robertson sat at ing the popular college basket-
Crossword.............. A12 Technology............... B3 public outcry over shooting incidents in Fer- ing public criticism. City officials then con- home sur- ball tournament
Heard on Street. B10 U.S. News.................. A7 guson, Mo., and elsewhere. Having moved cluded that processing the flood of footage rounded by his in the U.S. He
Markets Digest..... B8 Weather................... A12 fast, however, cities are now running into would require it to hire far more staff than phone, iPad and was following
Money & Inv... B5-10 World News........ A2-5
friction, often from within their own ranks. expected. two computer Mammal March
€3.20; CHF5.50; £2.00; Opponents of the contract arrangements Jim Strickland, the new mayor who took monitors to keep Madness.
U.S. Military (Eur.) $2.20
say officials may have cut corners by sign- office in January, put the Taser body-camera up with the ac- The animal
ing no-bid deals, by not testing options rollout on hold. “I believe in the use of body tion. competition
thoroughly or by becoming too cozy with cameras,” he said in an email. “But in the ef- His favorites kicked off Mon-
vendors. Other cities, after hurrying into fort to do something good for our people had been Sumatran Rhinoceros day, a week
camera initiatives, have found unexpected and our officers, the process was rushed. We knocked out ahead of the
costs, and some are pulling back. want to do this the right way.” early in the past, but this year men’s basketball tournament,
Memphis decided it urgently needed body The former mayor, A C Wharton Jr., said he was sure of his plan. “Bet on with a brawl between the
s Copyright 2016 Dow Jones & cameras to provide more police accountabil- he hadn’t known of Taser’s financial deal- the shortsighted and angry Thor’s hero shrew and King
Company. All Rights Reserved
ity. As with many cities, it turned to a famil- ings with his campaign manager, who said ones,” said Mr. Robertson, a 41- Midas bat. The shrew won.
iar company, Taser International Inc., the Please see TASER page A6 year-old camera salesman. Please see MARCH page A6
A2 | Wednesday, March 9, 2016 THE WALL STREET JOURNAL.
WORLD NEWS
For China’s Leaders, Politics Trump Economics and International Studies.
T
o be sure, the overall
environment has
changed dramatically
since Mr. Zhu ran the econ-
omy with an iron hand. The
CHINA’S WORLD state enterprises he went af-
ANDREW BROWNE ter in those days were small,
scattered and financially
weak. By contrast, the cur-
SHANGHAI—A year ago, rent crop have bulked up on
Premier Li Keqiang set out bank loans, and acquired new
the case for difficult indus- political muscle, making
trial overhauls. “This is not them much harder to cull.
nail-clipping,” he warned, As the global economic
“it’s like taking a knife to outlook darkens, the tempta-
one’s own flesh.” tion among politicians every-
The comments recalled where is to kick the can
his fearsome predecessor down the road.
Zhu Rongji who eliminated Still, the fact that China’s
30 million jobs practically in leaders have joined the pro-
one go in a cleanup of state crastinators reveals new in-
enterprises in the late 1990s. securities, which may undo
But Mr. Li the regime in the long run. A
has yet to large body of Western aca-
follow demic writing suggests that
through. The when the entire rationale for
problems he authoritarian systems turns
LI XUREN/XINHUA/ZUMA PRESS
was grap- to maintaining power, rather
pling with than facilitating change, the
back then have all gotten game is over.
much worse—colossal indus- David Shambaugh, a pro-
trial overcapacity, soaring fessor of political science at
corporate debt, plunging George Washington Univer-
profits, declining factory sity, is among those who see
prices. His reluctance to this playing out in China. In
draw blood underscores a Premier Li Keqiang at the National People’s Congress in Beijing. China’s leaders are under pressure to step up economic overhauls. his new book “China’s Fu-
critical change that has come ture,” Mr. Shambaugh writes
over a Chinese leadership avoid social instability that cal goal—to double gross do- ernment has abandoned all two million, a big number in that the Chinese administra-
that once had a reputation could in any way threaten mestic product by 2020 com- pretense of corporate “de- absolute terms but only a tion is in a state of “atrophy
for pursuing economic goals the party’s hold on power. If pared with 2010 to give the leveraging”—reducing debt— fraction of the country’s vast and ossification” as a result
with ruthless pragmatism. that means delaying unpopu- nation reason to celebrate on that must come one day. workforce. And while the of- of its unwillingness to toler-
Today, politics trump eco- lar economic adjustments, so the centenary of the Commu- ficial target to cut steel ca- ate political change. If it
U
nomics. be it. nist Party’s founding in 1921. sing delicate language, pacity by up to 150 million maintains its current course,
Both high-level economic That’s the way to read Yet it can only be Mr. Li suggested in his tons may sound dramatic, it he writes, “I predict that
policy making and its practi- Mr. Li’s report to the annual achieved by unleashing new report that corporate will still leave idle capacity economic development will
cal implementation, once the meeting of the National Peo- gushers of credit that gave deadbeats should be handled of some 200 million tons— stagnate and even stall, ex-
preserve of the State Council ple’s Congress, which opened rise to the recurrence of a “proactively yet prudently.” more than double America’s acerbating already acute so-
headed by the premier, have last weekend, calling for am- problem that former Premier He said measures should total annual production. cial problems, and producing
increasingly fallen into the bitious growth over the next Zhu seemed to have slain include mergers, reorganiza- Under Mr. Xi, “the objec- the protracted political de-
hands of Communist Party five years of between 6.5% once and for all: debt-laden tions, debt restructuring and tive of economics no longer cline of the [party].”
committees led by President and 7%. In setting that num- industrial “zombies,” many bankruptcy—in that order, has absolute priority in the For now, a gulf is opening
Xi Jinping. ber, the administration in- of them in the state sector, precisely to avoid as much economic policy-making pro- between the desire of Chi-
The choices they make tended above all to send a that threaten China with fi- discomfort as possible. cess,” writes Chen Ling, an nese leaders to avoid painful
are shaped by Mr. Xi’s politi- message of government con- nancial insolvency and global Mr. Li gave no figures for associate professor at Tsin- choices, and the expectations
cal preoccupations: to fidence, thereby bolstering markets with chronic insta- projected job losses but num- ghua University’s School of of foreign investors who are
strengthen the party, primar- public support for the ad- bility. bers put forward so far in Public Policy and Manage- looking for evidence of
ily through an anticorruption ministration. Relatively rapid economic the steel and coal industries, ment, in a recent study on change that really hurts. So
campaign; to root out chal- The number itself derives growth is at odds with indus- the two areas worst affected the Chinese economy issued far we’re seeing nail scis-
lenges to the regime; and to from a long-standing politi- trial restructuring. The gov- by overcapacity, run to about by the Center for Strategic sors, not a scalpel.
TRADE and a higher budget deficit.

“GDP has become China’s
‘whatever it takes’ line,” said
Evan Lucas, an analyst with
for the 13th-straight month—
the island’s longest export
slump since the global finan-
cial crisis—while South Ko-
Trading Down
China's exports and imports
cloaked as legitimate trade
deals. Trade with Hong Kong
has drawn particular scrutiny.
In January, Chinese customs fig-
ports and exports declined by
8%, a 14-percentage-point gap
below its target of 6% growth.
Ms. Sun, the agricultural
slide as global demand wanes.
Continued from Page One IG Markets Ltd. rean exports declined for the Change from a year earlier: ures show China’s imports from equipment saleswoman, said
drag on economic growth in China’s latest export fig- 14th consecutive month. Hong Kong increased 108%; she doesn’t expect many of
2016 amid lackluster global ures follow a call by senior China’s February results were 90% Hong Kong data, however, show the trade-promotion policies
demand,” said Mizuho Securi- officials from the Group of 20 the weakest since May 2009, exports to China fell 7.9%. coming out of Beijing to ben-
ties Asia Ltd. economist Jian- major economies in Shanghai when exports fell 26.4%. Though their accounting efit relatively small exporters
guang Shen, in a research last month for coordinated Sun Sandy, sales manager at 60 differs, the figures should like her company, which had
note. “Government stimulus to efforts to spur global growth. Yancheng Shunyu Agricultural roughly match, and econo- sales of less than $1 million
boost domestic activity will be Machinery Co. in the eastern mists have said the discrep- last year. Proposed changes
critical for stabilizing eco- city of Yancheng, said the 30 ancy suggests that companies from which she said her com-
nomic growth in 2016.”
China’s poor data fit global environment has made it are inflating invoices to cir- pany would benefit are faster
China has started the year on with trade results tougher to export the firm’s cumvent China’s capital con- export rebates and stream-
a weak footing after gross do- tractor parts to Europe, the trols. In February, China re- lined customs inspections.
mestic product growth slowed
from other exporters U.S., Africa and Southeast Asia.
0
corded an 88.7% rise in “The sooner, the better,”
Imports
to 6.9% last year, its weakest in the region. “Exports aren’t doing well -13.8% imports from Hong Kong. Ms. Sun said. “Some of these
pace in a quarter-century. right now,” she said. “We’re Exports Hong Kong has yet to release reviews are really a waste of
At Saturday’s opening of really hoping for some sort of –30 -25.4% February trade data. time and money.”
the national legislature’s an- At the meeting, Beijing breakout.” 2010 ’12 ’14 ’16 Unlike in recent years, China —Grace Zhu and Liyan Qi
nual session, which runs pledged to avoid a significant At the legislature, Mr. Li Source: General Administration of Customs didn’t issue a foreign trade tar- contributed to this article.
through mid-March, Premier depreciation in its currency also pledged to promote ex- THE WALL STREET JOURNAL. get this year, a reflection of the
Li Keqiang pledged to ensure to bolster exports. ports, speed up payment of diminished importance of ex-
the economy grows 6.5% this
year, saying the government
China’s poor data fit with
trade results from other ex-
tax rebates for exporters and
otherwise improve conditions
growth but is now struggling.
Imports have been keenly
ports and Beijing’s growing dif-
ficulty hitting the numbers af-
CORRECTIONS
will use infrastructure spend-
ing, tax cuts, monetary policy
porters in the region. Last
month, Taiwan’s exports fell
for a part of the economy
that once powered China’s
watched by economists looking
for evidence of capital flight
ter four years of falling short.
Last year, China’s combined im-
AMPLIFICATIONS
Around 300 lawyers, law-
CARNEY the U.K. would be freer to

prosper outside the bloc, while
campaigners for Britain to re-
main a member say that the
some financial-sector activity
would “without question”
move elsewhere in the EU if
Britain lost access to the EU’s
the EU and that leaving may
make it easier to broker deals
with emerging markets that
would benefit financial ser-
While proponents of Brit-
ain’s exit from the EU have
questioned how substantive
the reforms are, Mr. Cunliffe
firm staff and legal activists
were interrogated or taken
into custody last summer in
China. A World News article
Continued from Page One economy would suffer if it lost single market. vices. said these new terms were Tuesday about lawyer Chen
inappropriately venturing into access to the EU’s vast single Still, the BOE governor said Mr. Cameron in February “material and significant” and Taihe being released incor-
political waters. market for goods and services. so-called passporting arrange- negotiated new terms for Brit- should help the bank fulfill its rectly said it was more than
Jacob Rees-Mogg, a law- Mr. Carney said that some ments that would allow con- ain’s EU membership, which objectives of maintaining low 300 people.
maker in Prime Minister David banks are drawing up contin- tinued access to the single included provisions safeguard- and stable inflation and pro-
Readers can alert The Wall Street
Cameron’s Conservative Party gency plans to shift jobs and market in the event Britain ing the rights of non-eurozone tecting the financial system. Journal to any errors in news articles
who favors quitting the EU, activities elsewhere in the EU left the EU should be possible countries to police their own “From the bank’s perspective, by emailing wsjcontact@wsj.com.
accused Mr. Carney of “politi- in the event of a British exit, to achieve. Advocates of the financial systems, a key British the agreement is very impor-
cal partisanship” that threat- although he declined to tell U.K. quitting the EU say Lon- goal amid deepening economic tant,” he said. THE WALL STREET JOURNAL.
ens the central bank’s “Olym- lawmakers which institutions don’s position as one of the integration among the 19 The two officials also de- Europe Edition ISSN 0921-99
pian detachment.” he meant, citing “supervisory world’s pre-eminent financial countries that use the single tailed the risks the BOE sees The News Building, 1 London Bridge Street,
London, SE1 9GF
Mr. Cameron is campaign- confidentiality.” He added that centers would endure outside currency. surrounding the vote and the
ing for Britain to remain in the potential short-term conse- Thorold Barker, Editor, Europe
Bruce Orwall, Senior Editor, Europe
EU ahead of a June 23 referen- quences of a decision to leave. Cicely K. Dyson, News Editor, Europe
dum on the U.K.’s continued They said a recent slide in Margaret de Streel, International Editions Editor
Darren Everson, Deputy International Editor
membership. Mr. Carney said the pound and an increase in
he wasn’t giving a view on investors purchasing insurance Joseph C. Sternberg, Editorial Page Editor
how Britons should vote and against a further decline in Anna Foot, Advertising Sales
denied the accusations that sterling are reflections of mar- Jacky Lo, Circulation Sales
Stuart Wood, Operations
the BOE has been persuaded ket nerves about the vote. Jonathan Wright, Commercial Partnerships
to support the pro-EU cause Mr. Carney said “a host of
by the government. asset prices” could be affected Katie Vanneck-Smith,
Global Managing Director & Publisher
“We are expressing views by an exit vote and that banks
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THE WALL STREET JOURNAL. Wednesday, March 9, 2016 | A3
WORLD NEWS
Somali Strike Reflects Militants’ Threat
Al-Shabaab’s widening killed a few fighters but not as “It is a concern because the were behind enemy lines, in
many as 150. “The air bom- last three times they did areas that were supposed to
attacks drive large- bardment occurred, but we something similar to this, they be liberated areas.”
scale U.S. air assault strongly reject that number had an ability to conduct a The attacks have raised
claimed, that 150 were killed. devastating attack on [African concerns that the countries
against training camp There are a few of our fighters Union Mission to Somalia] that contribute troops to the
who died during the attack.” forces,” he said. African Union force in Soma-
BY HEIDI VOGT Local Somali officials, how- Al-Shabaab has in- lia—Uganda, Burundi, Djibouti,
ever, said they believe about creased the scale of its strikes Kenya and Ethiopia—might
NAIROBI, Kenya—The scope 200 insurgents were killed. against beleaguered African start to waver.
of U.S. airstrikes that de- “We have confirmed that Union forces over the past The Somali government
stroyed an al-Shabaab training about 200 newly trained fight- year and launched a failed at- welcomed the U.S. assault,
camp underscore Washington’s ers were inside the facility and tempt to bring down a pas- stressing it was executed in
mounting concerns over the all were killed. We have also senger jet in February. collaboration with Somali
resilience of a jihadist group confirmed the death of five Neighboring countries have forces. It was a rare victory
increasingly attacking the So- top commanders of al-Sha- increased security at borders for the government.
mali government and neigh- baab,” said Abdiasis Durow, and airports amid mounting “It’s best when we take the
REUTERS
boring states. commissioner of nearby Bu- concerns that al-Shabaab will war to their turf instead of
The Pentagon said the war- loburte district. He didn’t pro- imminently launch new at- waiting for them to attack,”
planes and drones used vide names of the command- tacks outside Somali borders. Al-Shabaab attacked a hotel in the capital Mogadishu in July. said Abdisalam Aato, a Somali
in Saturday’s airstrike killed ers. He said smoke continued The size and location of the government spokesman.
more than 150 al-Shabaab to rise from the bombed area training camp showcased the strikes against leaders. “This capital—in September killed But analysts said the need
fighters gathered at a training for more than a day after the group’s strength in Somali’s could be a way of saying, some 50 Ugandan troops. In to resort to the U.S. airstrike
base ahead of a planned attack attack. rural areas, allowing the insur- ‘We’ve got your back. We’re January, al-Shabaab fighters also shows the ways that Afri-
against U.S. and African Union Gen. David Rodriguez, head gent group to mass large num- going to work to minimize the overran a Kenyan base near can Union and Somali troops
forces inside Somalia. It was a of U.S. forces in Africa, told bers of forces needed to over- casualties.’ ” the Kenyan border, killing have failed to gain the upper
surprisingly large-scale attack members of the Senate Armed run a military base. Over the past year, al-Sha- at least 180 troops, the Somali hand against al-Shabaab.
for the U.S. military in Soma- Services Committee on Tues- “This attack changes every- baab launched deadly assaults government said. Kenyan au- Matt Bryden, director of Sa-
lia, which has previously fo- day that the U.S. has seen a thing. Now they’re going after on three African Union bases. thorities have yet to release han Research, a think tank in
cused on targeted “tactical upswing” in al-Sha- rank and file—freshly trained An attack in June near Lego— official numbers. Kenya, said that “al-Shabaab’s
strikes against specific leaders baab activities in Somalia and young recruits,” said Ken Men- about 60 miles northwest of “They were allowed to greatest strength is the weak-
of the Islamist group. that the group conducts “al- khaus, a Somalia expert at Da- Mogadishu—killed more than flourish in [the] countryside,” ness of its adversaries.”
An al-Shabaab spokesman, most daily lethal asymmetric vidson College in North Caro- 70 Burundian soldiers. said Stig Hansen, a Norwegian —Felicia Schwartz
Abdiasis Abu Musab, attacks” against African Union lina, adding that previous U.S. An attack in Janale dis- academic who studies al-Sha- in Washington
said Saturday’s airstrikes troops there. attacks had been surgical trict—to the southeast of the baab. “Some of these attacks contributed to this article.
Biden Trip U.S. Urges Saudi Arabia to Ease Up on Lebanon

To Israel BY JAY SOLOMON
AND DANA BALLOUT
tween Lebanon and its Gulf
neighbors was sparked by Bei-
Comes The Obama administration

is pressuring Saudi Arabia not
rut’s refusal in January to sup-
port an Arab League resolu-
tion condemning Iran for
Amid Strife to take further steps to punish

Lebanon economically in retal-
iation for the growing political
failing to prevent an attack on
the Saudi embassy in Tehran
that month.
BY RORY JONES power amassed in Beirut by Saudi officials said the vote
Hezbollah, the Iranian-backed by Lebanese Foreign Minister
TEL AVIV—U.S. Vice Presi- Lebanese militant and political Gebran Bassil, an ally of Hez-
dent Joe Biden arrived in Is- group, U.S. and Arab officials bollah’s, signaled Beirut aban-
rael on Tuesday amid renewed said. doning its longtime alliance
tension between the two coun- The dispute over Lebanon with Saudi Arabia, which has
ties and as violence flared be- marks the latest foreign-policy aided the Lebanese economy
tween Israelis and Palestin- rift to emerge between Wash- for decades.
MOHAMMED ZAATARI/ASSOCIATED PRESS
ians. ington and Riyadh, decades- Saudi Arabia has displayed

Relations between Israel old allies, particularly con- a greater willingness to pursue
and the White House have cerning the regional role a foreign policy independent
been strained this week after a played by Iran and its proxies. of the U.S. since the ascension
planned trip to Washington by Saudi Arabia in February to the throne last year of King
Israeli Prime Minister Benja- said it had suspended $3 bil- Salman and the appointment
min Netanyahu was canceled. lion in military aid for the of his son, Mohammad bin Sal-
The White House said it Lebanese armed forces. A man, as defense minister.
first learned about the cancel- group of oil-rich Arab states, Riyadh has led a yearlong
lation of the trip from the Is- led by Riyadh, placed restric- air war against Iranian-backed
raeli media. tions on their citizens visiting Hezbollah fighters attended the funeral of a senior commander in Ansar, Lebanon, last week. militias in Yemen, which has
The dispute is the latest Lebanon, and suggested addi- fueled concerns in Washington
point of friction between Mr. tional financial penalties could were reckless and risked driv- But Saudi Arabia said it is dif- formation Minister Adel Al To- about the toll on noncombat-
Netanyahu and the Obama be imposed on Beirut. ing the Lebanese further into ficult for it to continue fund- raifi said recently in Washing- ants in the Arab country.
White House. Last year, the Senior U.S. diplomats, in- the hands of Iran,” said a se- ing a dysfunctional Lebanese ton. “If the government isn’t Washington and Riyadh
administration accused the Is- cluding Secretary of State nior U.S. official briefed on the government dominated by functioning, what will happen have also split on the ways to
raeli leader of breaking diplo- John Kerry, have privately communications with Saudi Hezbollah and its political al- to the money?” end the Syrian war.
matic protocol after he ar- warned Saudi Arabia and Arabia. “It feels like a signifi- lies. Saudi Arabia has expelled The Obama administration
ranged to address a joint other Gulf states that they cant overreaction.” Lebanon hasn’t had a presi- Lebanese workers in recent has sought to cooperate with
session of the U.S. Congress in were overreacting and risked The French government of dent in more than two years weeks that Riyadh alleges are Iran and some of its allies in
March without notifying or destabilizing Lebanon’s President François Hollande because of a political standoff Hezbollah members, the Saudi confronting the Islamic State
consulting the president. broader economy, these offi- has also raised concerns about between Hezbollah and its al- minister said. Other Gulf terrorist organization, which
The vice president’s visit cials said. Lebanon in recent meetings lies, and parties aligned with States have said they are con- is active in Syria, Iraq and
also comes amid some of the Beirut is heavily dependent with the Saudi government, Saudi Arabia. Iran is Hezbol- sidering pulling their deposits Lebanon.
worst violence in Israel and on Arab investment and remit- U.S. and Arab officials said. lah’s primary financial backer from Lebanon’s central bank This has included sharing
the Palestinian territories in a tances from Lebanese workers Arab officials have privately and arms supplier. and reducing other invest- intelligence with Lebanese se-
decade. living in the Persian Gulf. acknowledged differences with “You feel like there is no ments in the country. curity services close to Hez-
Palestinians mounted three “We thought the actions the U.S. on Lebanon strategy. Lebanon anymore,” Saudi In- The unprecedented rift be- bollah, U.S. officials said.
separate stabbing and shoot-
ing attacks in the cities of Je-
Iran Test-Fires Missiles Amid Tighter Sanctions

rusalem, Tel Aviv and the Arab
port of Jaffa the day Mr. Biden
touched down, killing at least
one and wounding more than
a dozen, Israeli police said. BY ASA FITCH the capability to strike Israel,
Police said a Palestinian but Iranian officials insist the
gunman opened fire on police DUBAI—Iran test-fired sev- program was for peaceful en-
officers near Jerusalem’s Old eral ballistic missiles on Tues- ergy production and medical
City, injuring two. Minutes day, fulfilling vows by officials research.
later, police reported a stab- to continue developing the Iran agreed to scale back
bing attack in a Tel Aviv sub- weapons despite pressure nuclear activities under the
urb. A third Palestinian then from the U.S., which imposed deal, reached in July, shutting
went on a stabbing spree fresh sanctions on the pro- thousands of uranium-enrich-
through Jaffa and Tel Aviv’s gram in January. ment centrifuges. It also
beachside promenade, injuring The tests aimed to show agreed to redesign a nuclear
EBRAHIM NOROOZI/ASSOCIATED PRESS
at least 10 people and killing Iran’s “deterrent power” and reactor at Arak, near Tehran,
one American tourist, who “all-out readiness to counter so that it is unable produce
wasn’t immediately identified any threat,” the official Is- nuclear material that could be
by Israeli police. lamic Republic News Agency weaponized.
Two of the alleged attack- reported. They were carried In exchange, Iran got relief
ers were shot dead by police out by the Islamic Revolution- from international sanctions
at the scene, while the victim ary Guard Corps, a powerful that have crippled its econ-
in the attack in the Tel Aviv military force charged with omy. Those annulled included
suburb killed his alleged as- safeguarding the country’s Is- United Nations Security Coun-
sailant in a struggle, police lamic system. cil resolutions banning missile
said. The surface-to-surface mis- President Hassan Rouhani, left, attended a meeting of the Assembly of Experts in Tehran on Tuesday. development.
Since September, Palestin- siles were fired from silos in But a Security Council reso-
ian assailants have killed more central Iran and hit targets tional nuclear agreement with The U.S. sees the program Israeli-Palestinian conflict in lution endorsing the nuclear
than 30 Israeli civilians and 435 miles away, the semioffi- Iran, known as the Joint Com- as a potential threat to Israel, the final year of Barack deal called upon Iran not to
soldiers in more than 300 at- cial Fars news agency re- prehensive Plan of Action, or a key Middle East ally and Obama’s presidency. undertake any development of
tacks, according to Israel’s for- ported. JCPOA. longtime Iranian foe, and to Iranian officials have said missiles capable of delivering
eign ministry. More than 150 These were the first tests “To be very clear, such tests Persian Gulf allies that lie its recent tests don’t violate nuclear weapons for eight
Palestinians, mostly alleged since the U.S. Treasury im- are not a violation of the within striking distance of lon- international accords, and that years. It wasn’t clear whether
attackers, have also been posed sanctions in January on JCPOA,” the official said. ger-range missiles, including the weapons are merely for the missiles tested on Tuesday
killed by Israeli security 11 Iranian entities with alleged “That said, there are strong Saudi Arabia and the United defense. President Hassan were designed to carry nuclear
forces, according to Palestin- links to Tehran’s ballistic mis- indications that the test is in- Arab Emirates. The U.S. is also Rouhani ordered the missiles’ warheads.
ian officials. sile program, citing the “sig- consistent with U.N. Security concerned with safeguarding development to be expedited Iran is pushing forward
The Obama administration nificant threat” the weapons Council Resolution 2231. If military assets of its own in in December, amid the pros- with the tests despite a shift
is considering one last push to posed to regional and global confirmed, we intend to raise the region, including a naval pect of new U.S. sanctions. in domestic politics toward
revive the peace process be- security. Iran last tested its the matter in the U.N. Security base in Bahrain. Iran’s historic nuclear deal moderates like Mr. Rouhani,
fore the president leaves office missiles in October and No- Council. We will also encour- The test came as U.S. Vice with six world powers includ- who favor a policy of engage-
in January. However, the vice vember. age a serious review of the in- President Joe Biden arrived in ing the U.S. took effect in Jan- ment with the world based on
president isn’t expected to A senior Obama administra- cident and press for an appro- Israel before meeting with Is- uary, ending more than a de- mutual respect. Mr. Rouhani’s
launch any major initiatives tion official in Washington priate response.” raeli Prime Minister Benjamin cade of escalating pressure allies made significant gains in
while in Israel. said the missile tests were in- The official said the U.S. Netanyahu on Wednesday. from Western powers over February elections for the
Mr. Biden is scheduled to consistent with a United Na- would continue to work with U.S.-Israeli relations have Tehran’s disputed nuclear pro- 290-member parliament and
meet with Mr. Netanyahu on tions Security Council resolu- other countries as well as “to come under strain in recent gram. the 88-member Assembly of
Wednesday. He will also meet tion restricting Iran’s missile aggressively apply” U.S. sanc- years, but Mr. Biden’s visit Western countries long sus- Experts, a clerical body.
with Palestinian Authority activity, but didn’t represent a tions against Iran to enforce could be a part of an attempt pected that Iran sought to de- —Carol E. Lee in Washington
President Mahmoud Abbas. breach of last year’s interna- the prohibitions. to revive talks to resolve the velop nuclear weapons with contributed to this article.
A4 | Wednesday, March 9, 2016 HK JP KO ML SI IN UK FR MN PR THE WALL STREET JOURNAL.
WORLD NEWS
Central Bank Faces Debt Divergence

The Europen Central Bank could soon run short of bonds to buy,
even if it doesn't boost its QE program on Thursday.
Tough Balancing Act
MARTIN MEISSNER/AGENCE FRANCE-PRESSE/GETTY IMAGES

Months left until limit is reached under current purchase program*
Belgium
Italy
France
Malta
BY TOM FAIRLESS flation falling far below target its bond purchases by six Austria
this year and next. months hammered European Netherlands
FRANKFURT—The Euro- “The ECB is caught between and U.S. stocks and drove the Ireland
pean Central Bank faces a a rock and a hard place be- euro up against the dollar. Slovenia
Germany
tough challenge at its pol- cause they have used a lot of Before that announcement,
Finland
icy meeting this week: how to stimulus already,” said Martin policy makers were divided Spain
combat persistently low infla- Lueck, chief German invest- over the need for fresh stimu- Lithuania
tion without undermining the ment strategist at BlackRock, lus, according to a sum- Latvia
region’s fragile banks. Inc., which manages assets mary of their December meet- Portugal
A year after the bank worth $4.5 trillion. “At the ing. Some members argued Slovakia
launched a €1.5 trillion ($1.65 same time, nobody could have that the bloc’s economy was Luxembourg ECB President Mario Draghi,
trillion) stimulus program, the expected commodity prices to recovering and underlying in- 0 10 20 30 40 50 above, has promised to boost
euro area has slid back into fall so much.” flation—after stripping out *Based on 33% limit Source: Capital Economics THE WALL STREET JOURNAL. stimulus if necessary.
deflation amid a sharp drop in Many economists expect energy and food prices—was
oil prices, and its sluggish the ECB to cut its deposit creeping up. 13-month low. because the traditional lever— profits, but also send a
economic recovery appears to rate—the interest charged to Bundesbank President Jens There are clear signs of de- cutting interest rates—has “pretty bleak signal” to other
be stalling. The ECB has banks to store funds with the Weidmann, who has publicly mand and credit growth weak- been neutered by the fact that firms.
missed its inflation target central bank—by at least 0.1 opposed the ECB’s bond-pur- ening again in the euro area, rates are at or near zero. A To help offset the costs for
near 2% for three straight percentage point, to minus chase program, warned in late which requires fresh action by subzero deposit rate, the ECB banks, economists expect
years, leading some investors 0.4%. They also expect an in- January that the central bank the ECB to prevent inflation argues, complements its bond the ECB to introduce a tiering
to question the power of its crease in its bond-purchase shouldn’t overreact to cheaper from falling further, said purchases by encouraging system if it cuts rates much
policies. program of at least €10 billion oil. Holger Schmieding, chief banks to lend money to busi- further, which would impose
Complicating the situation a month, to €70 billion. Those arguments will be economist at Berenberg Bank nesses and consumers rather the highest charge on only a
is recent turmoil in banking Investors are currently much more difficult to jus- in London. than storing it with the cen- portion of banks’ reserves.
stocks, which could be exacer- pricing in a 0.12 percentage- tify now, economists said. Eu- One reason to expect more tral bank. They also expect the ECB to
bated if the ECB cuts interest point cut in the ECB’s deposit rozone consumer prices fell by rate cuts is that they are rela- But the prospect of even change the design of its bond-
rates much further below rate, and they also expect €10 0.2% in February from a year tively uncontroversial within lower interest rates is raising purchase program, if it boosts
zero. Subzero rates act as a billion to €15 billion a month earlier, the first subzero read- the ECB’s governing council, concerns from a widening ar- it again, to avoid dominating
tax on banks because they of additional bond purchases, ing since September, the Euro- according to a summary of the ray of actors. Banks and inves- some markets, particularly ul-
can’t easily pass on the costs Mr. Lueck said. pean Union’s statistics agency bank’s December policy meet- tors warn they will pile fur- tra-safe German government
to customers. Both policy options are po- said last week. Crucially, un- ing. Several council members ther pressure on the region’s bonds. But adjustments could
ECB President Mario Draghi tentially complicated, how- derlying inflation also fell to a said they would favor a stressed lenders, whose stock pose legal problems, some an-
has pledged not to “give ever, raising the risk that in- 10-month low of 0.7%, indicat- deeper rate cut over other prices have fallen about 10% alysts say, if it skews the pur-
in” on inflation and says he is vestors might be ing that lower oil prices may stimulus tools, such as asset this year amid profitability chases toward Spanish or Ital-
ready to boost the bank’s disappointed by a smaller- be feeding through to wages purchases. concerns. ian government debt. That
stimulus on Thursday if new than-expected stimulus—just and other prices—a key con- The ECB, like other major “At some stage, easing pol- could raise concerns that the
data show it is needed. The as they were three months cern for the ECB. Meanwhile, central banks, is buying assets icy too aggressively can back- central bank was printing
bank’s latest quarterly eco- ago when the ECB’s decision a closely watched business from private holders as the fire,” Mr. Lueck said. Subzero money to finance individual
nomic forecasts on Thurs- to cut its deposit rate by 0.1 survey indicated last week primary mechanism for inject- interest rates, he argued, not governments, which is forbid-
day are expected to show in- percentage point and extend that growth had slowed to a ing money into the economy, only put pressure on banks’ den under EU treaties.
EU Review TURKEY World

Addresses Continued from Page One Watch
process of negotiation that
started on Sunday night, when
Economic German Chancellor Angela
DIMITAR DILKOFF/AGENCE FRANCE-PRESSE/GETTY IMAGES
Merkel huddled for six hours

of talks with Mr. Davutoglu KOREAS
Imbalances and Dutch Prime Minister
Mark Rutte to work on the
Seoul Eliminates
BY VIKTORIA DENDRINOU new Turkish offer. Ties to Pyongyang
Under a previous plan, South Korea shut its few re-
BRUSSELS—European reached in November, Turkey maining links with North Korea
Union authorities said that the agreed to take back migrants as part of a new set of sanc-
economies of France, Italy, from Greece only if their asy- tions in response to Pyongyang’s
Portugal and others have ex- lum claims were refused and recent tests of a nuclear bomb
cessive imbalances and require only after June 1. The proposal and rocket.
tighter monitoring, urging put forward Monday, and ap- Seoul said it would ban any
them to move quickly with proved early Tuesday, would ships that have traveled to
economic changes. see Turkey immediately start North Korea in the previous 180
The findings by the Euro- accepting back both Syrian days, effectively terminating a
pean Commission, the EU’s ex- refugees and other migrants People at a makeshift camp on the Greek-Macedonian border near the Greek village of Idomeni. project to deliver coal from a
ecutive arm, came after the who cross to Greece. North Korean port to the South.
bloc launched in-depth re- The EU pledged in return to tion aiming to give Turkish Faymann acknowledged after thousands of people have The initiative had sought to de-
views of 18 economies in No- resettle one Syrian refugee di- citizens visa-free access to the the summit that he had “quite drowned in recent years. velop the North Korean port of
vember to assess whether they rectly from Turkey for every open-border Schengen area in intense discussions” with Ms. Many EU diplomats ques- Rajin by loading coal from Rus-
were experiencing weaknesses Syrian returned from Greece. June. Turkey is likely to get Merkel but was unapologetic. tion whether Turkey will stick sia on to ships bound for South
and how serious these were. The idea is to discourage peo- most of what it asked for, offi- “That’s what political work is to its part of the bargain. Korea.
The reviews are part of the ple from trying to enter cials said. for,” he said. “It’s not a feel- There are also serious le- The steps are unlikely to
bloc’s new system for coordi- Greece without permission, Within the 28-member bloc, good workshop.” gal questions about the Tur- have a major impact on North
nating economic policy, aimed while simultaneously creating the Turkey proposal was con- There are many caveats to key deal. The United Nations Korea. South Korea already im-
at preventing a repeat of the a legal channel for giving refu- troversial, pitting countries the pieces falling into place. High Commissioner for Refu- poses strict controls on its citi-
eurozone’s debt crisis. gees haven in the EU. such as Austria, which trig- Migrants could take alterna- gees, Filippo Grandi, told the zens’ interaction with the North.
The system requires gov- Turkey attached a signifi- gered the closure of the Bal- tive routes from Greece into European Parliament on —Alastair Gale
ernments to undergo repeated cant price: It wants EU finan- kan route, against Germany’s other EU countries, for in- Tuesday that his agency is
scrutiny of their economic cial aid doubled from the €3 Ms. Merkel, who has urged Eu- stance via Albania to Italy. “deeply concerned about any AUSTRALIA
performance to determine if billion ($3.3 billion) already ropean countries to keep bor- Earlier on their journeys, they arrangement that involves the
there are economic trends and agreed, further acceleration of ders open and ensure refugees may avoid Turkey altogether blanket return of all individu-
U.S. to Boost Role
policies that are sowing the its decadelong negotiation to are protected. and again use the dangerous als from one country to an- To Counter Russia
seeds of future problems. join the EU and fast-track ac- Austrian Chancellor Werner Libya-Italy sea route, on which other.” Russia is increasingly flexing
Tuesday’s report also found its air muscle in Asia, the com-
excessive economic imbal- mander of the U.S. Air Force in
Doubts Greet Merkel on Migrant Pact

ances in Bulgaria and Croatia, the Pacific said, potentially add-
while it said Germany, Ireland, ing to the strategic complexity
Spain and four other countries for the U.S. in a region where it
face less serious imbalances. is already jostling with China.
“The situation differs across BY ANTON TROIANOVSKI pendent on Turkey.” The U.S. plans to expand its
countries but in general the On the other end of the po- rotation of bombers and refuel-
main reasons for concern are BERLIN—After marathon litical spectrum, Cem Özdemir, ing aircraft in Australia into a
STEPHANIE LECOCQ/EUROPEAN PRESSPHOTO AGENCY
the persistence of very high talks in Brussels on Monday head of the Green party, issued more frequent presence, Gen.
levels of indebtedness, be it night, German Chancellor An- a similar warning for different Lori Robinson said, much as U.S.
public, private or external; vul- gela Merkel announced she reasons. Marines have done in the coun-
nerabilities in the financial was finally on the verge of a “Turkey is using the crip- try’s vast northern tropics.
sector and deteriorating com- breakthrough deal with Turkey pling disunion in the EU to Russia has eased back on
petitiveness,” said Valdis Dom- to stop the flow of migrants to achieve as high a price as pos- long-range air patrols near Euro-
brovskis, the commission’s vice Europe. sible for its role as a door- pean nations, but its reconnais-
president in charge of the euro. But the reaction at home man,” said Mr. Özdemir, whose sance aircraft are now appearing
The commission said in its the morning after was a cool party has largely supported more frequently over Asia, Gen.
report that France’s imbal- one. We’ll believe it when we Ms. Merkel in the migrant cri- Robinson said. The Russian navy
ances, stemming from its large see it, friends and foes said. sis. “I warn against closing our has also been expanding its re-
public debt and deteriorated “This is a very important eyes to the human-rights situ- gional presence. —Rob Taylor
ability to compete at a global interim step toward a solu- ation in Turkey.”
level, bear risks for the coun- tion,” Volker Kauder, the Ms. Merkel arriving for a news conference Tuesday in Brussels. Ms. Merkel’s center-right GERMANY
try’s economy and could have leader of Ms. Merkel’s conser- Christian Democrats have long
cross-border implications. vatives in parliament, said on sharply reduce the number of cross the Aegean Sea’s narrow been skeptical of a closer rela-
Industrial Production
Italy is also at risk due to breakfast television Tuesday. people arriving in Germany straits to Greece. Ms. Merkel tionship with Turkey over the Jumped in January
its high debt levels and weak “All this will still be difficult.” and applying for asylum. As spent six hours negotiating course of the EU’s long-run- German industry fired on all
competitiveness as well as The skeptical response in the chancellor took a welcom- with Turkish Prime Minister ning accession talks with An- cylinders in January, raising
slow progress in dealing with Germany to Ms. Merkel’s hard- ing stance, roughly a million Ahmet Davutoglu in Brussels kara. That resistance boiled to hopes of better-than-expected
the high level of bad loans fought if tentative deal showed such migrants from the Middle on Sunday ahead of Monday’s the surface on Tuesday among growth in Europe’s biggest econ-
that have clogged banks’ bal- the European Union’s most East and elsewhere came last crisis meeting of EU leaders. some of her conservative al- omy this quarter despite flag-
ance sheets, the report said. powerful leader on the defen- year. The initial wave of Ger- But the reliance on Turkey lies, even as others voiced op- ging business confidence and
Greece and Cyprus weren’t sive days ahead of important man solidarity flagged in the is causing new domestic prob- timism that the chancellor was the uncertain global economic
included in the reviews because state elections. The votes on face of growing fears that the lems for Ms. Merkel just as the making progress. outlook.
their economies are monitored Sunday in three German states migrant influx would change state elections loom. Critics on Polls show that all three of Industrial production rose
by separate bailout programs. are being widely seen as refer- the country for the worse. the left say the chancellor is Sunday’s state elections could 3.3% in January from the preced-
While the commission endums on Ms. Merkel’s mi- Ms. Merkel has tried her turning a blind eye to human- bring bad news for Ms. Merkel. ing month, while output in-
didn’t put Germany in the “ex- gration policy, with analysts critics’ patience by refusing to rights abuses there, while poli- In the eastern German state of creased 2.2% from January 2015,
cessive” category, it did say saying Ms. Merkel may be de- close the German border to ticians on the right fear her Saxony-Anhalt, the Alternative adjusted for calendar effects, the
the country would be subject livering too little, too late, to migrants, insisting that doing readiness to allow visa-free for Germany is polling close to Economy Ministry said on Tues-
to monitoring due to its imbal- prevent an electoral defeat for so would destroy Europe’s sys- travel for Turkish citizens will 20%—a remarkable rise for a day.
ances, particularly its large her party. tem of passport-free travel and only lead to a new influx. party founded just three years The surge in output, which
current-account surplus. “She can keep trying to pull seamless cross-border trade “Ms. Merkel sees this as a ago. In the western German took many economists by sur-
In a news conference ear- rabbits or doves out of a hat,” that she says has secured Ger- breakthrough—we don’t,” said states of Baden-Württemberg prise, was the sharpest monthly
lier Tuesday, German Finance said Gero Neugebauer, a Berlin many’s success. Frauke Petry, head of the anti- and Rhineland-Palatinate, con- increase in German industrial ac-
Minister Wolfgang Schäuble political scientist. “But she Instead, she has insisted immigrant Alternative for Ger- servative voters defecting to tivity since September 2009 and
said his country was already ad- doesn’t have many hats left.” that Europe has no choice but many party, which is poised that anti-immigrant party the highest production volume
dressing some of the concerns. After a decade in power, to work with Turkey, the mi- for dramatic gains in Sunday’s could cause Ms. Merkel’s since records began in January
—Gabriele Steinhauser Ms. Merkel has staked her po- grants’ main relay point, to votes. “Yet again we are pre- Christian Democrats to lose to 1991, according to the federal
contributed to this article. litical future on a promise to stop people from trying to pared to make ourselves de- left-of-center challengers. statistics office. —Nina Adam
WORLD NEWS
BrazilCEOConvictedinPetrobrasScandal
Marcelo Odebrecht is prison terms meted out to he was involved in the bid-rig-
other executives and political ging-and-bribery scheme. The
sentenced to 19 years figures in the scandal, marks a Odebrecht company figures
for role in vast shift within Brazil’s justice prominently in the probe.
system. In the past, members Prosecutors suspect that
corruption scheme of the elite frequently evaded Mr. da Silva benefited from ex-
conviction and escaped pun- tensive renovations made by
SÃO PAULO—A Brazilian ishment. Odebrecht to a country ranch
judge on Tuesday sentenced Nabor Bulhões, Mr. Ode- used by the former president
Marcelo Odebrecht, the former brecht’s attorney, called the and his family.
chief executive officer of sentence “unfair and unjust” Prosecutors allege that Mr.
South America’s biggest con- and said the defense team da Silva helped organize an
would appeal to higher courts. elaborate scheme to divert
HEULER ANDREY/AGENCE FRANCE-PRESSE/GETTY IMAGES

The executive’s conviction funds from Petrobras to fund
By Marla Dickerson, has raised speculation that he campaigns for the Workers’
Luciana Magalhaes could cut a deal with prosecu- Party and its political allies
and Jeffrey T. Lewis tors to reduce his sentence, a and that his think tank might
practice allowed under Brazil- be a conduit for the dirty
struction company, to 19 years ian law, and potentially impli- money. Mr. da Silva and the
in prison for his involvement cate others in a scandal that Workers’ Party have denied
in a sprawling corruption now threatens to engulf the wrongdoing.
scandal centered on Brazil’s government of President Separately, Mr. da Silva is
state oil company, Petrobras. Dilma Rousseff. under investigation for influ-
The scion of a billionaire “It’s a tough sentence…and ence peddling on behalf of
family, Mr. Odebrecht was con- could encourage him to accept Odebrecht, which has snagged
victed of money laundering, a deal,” said Pierre Moreau, a major public-works contracts
corruption and organized partner in São Paulo’s Moreau in Latin America and Africa.
crime. He was CEO of Ode- Advogados law firm. Officials are trying to deter-
brecht SA when he was ar- In recent months, a number Marcelo Odebrecht arrived for a hearing at the Federal Justice court in Curitiba in September. mine whether the popular Mr.
rested and jailed in June 2015. of prominent defendants have da Silva used his clout upon
He later resigned from the either signed or are in talks In the sentencing docu- Contractors,” is the biggest implicated in the sprawling leaving office to convince in-
company, which his grandfa- with prosecutors to turn ment, Federal Judge Sergio yet for Mr. Moro, who has corruption investigation at ternational leaders to award
ther founded. state’s evidence, accelerating Moro described Mr. Odebrecht worked with a tight-knit Petróleo Brasileiro SA, as the contracts to Odebrecht and to
Prosecutors allege that the probe. Defense lawyers for as one of the ringleaders of group of prosecutors in a oil company is officially push Brazil’s development
some of Brazil’s largest con- Mr. Odebrecht said he hasn’t the scam and urged his com- widening probe that has known, and has denied knowl- bank, known as BNDES, to fi-
struction firms, including Ode- made any deal with the court. pany to accept accountability shaken the highest levels of edge of the graft ring. But the nance those deals with subsi-
brecht, skimmed billions of Tuesday’s developments as a step toward recovering Brazilian business and gov- scandal has moved ever closer dized loans.
dollars from Petrobras come at a tense time in Brazil- his reputation. ernment. In contrast to the to her door as one high-profile The alleged offenses oc-
through inflated contracts, ian politics. Anger over the “The admission of responsi- U.S., federal judges in Brazil figure after another has been curred between 2011 and 2014,
then channeled some of the revelations of corruption bility doesn’t eliminate the play an active role in investi- ensnared in the probe. after Mr. da Silva left office,
funds to the ruling Workers’ threatens to destabilize the wrongdoing, but it’s a decent gations, approving key war- On Friday, former Brazilian and involved a series of big in-
Party and its allies as part of a government of the deeply un- way to get past it,” Mr. Moro rants and reviewing evidence President Luíz Inácio Lula da frastructure deals that Ode-
yearslong pay-to-play scheme. popular Ms. Rousseff, who is said. in addition to meting out sen- Silva, Ms. Rousseff’s political brecht won in nations includ-
Mr. Odebrecht’s stiff sen- facing a growing number of The conviction of Mr. Ode- tences. mentor, was taken in for ques- ing Ghana, Angola, the
tence, along with the lengthy calls for her ouster. brecht, dubbed “Prince of the Ms. Rousseff hasn’t been tioning by police who suspect Dominican Republic and Cuba.
Myanmar to Choose New President Japan Leader’s Goals

BY SHIBANI MAHTANI
YANGON, Myanmar—Myan-
Tested as Growth Lags
mar’s parliament will nomi- BY MITSURU OBE yen, which is seen by many as
nate the country’s new presi- a haven asset during turbulent
dent Thursday, but the process TOKYO—Japan’s economy is times.
is testing the delicate relation- struggling to return to growth, Tokyo stocks, the sharp rise
ship between the still-power- adding pressure on Prime Min- of which was touted as an
ful military and the democracy ister Shinzo Abe’s government achievement of Abenomics,
movement led by Aung San as an election approaches. have tumbled. The Bank of
Suu Kyi, whose party domi- The risk of another reces- Japan stepped in to introduce
nates the legislature. sion is likely to strengthen negative interest rates in late
Ms. Suu Kyi is constitution- calls for new, stronger fiscal January, but the move had
ally barred from being a can- stimulus. In recent weeks mul- limited impact on markets
HEIN HTET/EUROPEAN PRESSPHOTO AGENCY
didate. But her National tiple advisers to Mr. Abe have while generating criticism
League for Democracy is ex- called for a government spend- among banks and consumers.
pected to use its overwhelm- ing package to shore up weak All of these developments
ing legislative majority to in- domestic demand, and another have also hurt already weak
stall a candidate from its delay in the sales-tax increase consumer confidence, which
ranks who is likely to have lit- set to take effect next year. fell sharply in February to the
tle of Ms. Suu Kyi’s stature More gloomy economic data lowest level since January last
and whom she has already would complicate Mr. Abe’s year, according to government
stated she will control from political calculations. Though data released Tuesday.
behind the scenes. his support is holding up, Private consumption and
The new president will be opinion surveys also indicate exports remain weak, and
the first to lead a democrati- Lawmakers from the National League for Democracy, led by Aung San Suu Kyi, met on March 1. the public is starting to lose there is little reason to expect
cally elected government confidence in his economic Japan’s economy to stage a
whose leaders are untainted Tin Oo, a former co-leader of nence in the democracy move- The upper and lower program, just months before meaningful rebound during the
by military links since the the party and onetime general, ment in 1988, when Myan- houses of parliament and the an election that may prove first quarter, said Izumi Deva-
armed forces seized power in who is almost 90 and frail. mar’s military crushed street military bloc can each nomi- critical to his goal of revising lier, economist at HSBC.
1962. The new government fol- Speculation has also turned protests in a bloody crack- nate a vice president. The the nation’s constitution. “Right now we are seeing a
lows a nominally civilian tran- to Ms. Suu Kyi’s personal phy- down. She was awarded the three groups then vote on Japan’s gross domestic period of [market] stability.
sition regime of former gener- sician, Tin Myo Win, or her Nobel Peace Prize in 1991. which candidate will be ele- product has contracted in two But this is a very fragile equi-
als who ruled from 2011 but personal secretary and closest The head of state will be vated to president. The NLD’s of the past four quarters, librium,” said Ms. Devalier.
were defeated in November confidant, Tin Mar Aung. Mr. chosen under a constitution choice is assured passage, shrinking at an annual rate of Further weak growth could
elections won by the NLD. Tin Oo has previously insisted imposed when the military given the party controls both 1.1% during the fourth quarter make it more difficult for Mr.
The NLD hasn’t said who it that Ms. Suu Kyi must be pres- was in power. It states that no houses. Both the losing candi- of the last calendar year, ac- Abe to achieve his political
will offer up as a candidate, ident. None of the others has one with close foreign rela- dates will be vice presidents. cording to revised data re- goals. He is looking for a
and party leaders have offered commented. tives can be president; Ms. The NLD’s second nominee leased Tuesday. The revised strong showing in an upper
only vague clues. Win Htein, a “In general, it is not that Suu Kyi’s two sons are British, is likely to be an ethnic-minor- GDP figure marked a slight im- house election this summer to
central executive committee important who the president as was her late husband. The ity candidate from an affili- provement from the prelimi- pave the way for his goal of
member, has said that Ms. Suu is, as long as it is the right constitution reserves one- ated ethnic-based party, ac- nary number, but BNP Paribas amending the U.S.-written con-
Kyi “cannot be president” and kind of person—someone who quarter of seats in parliament cording to party officials. It is said in a note Tuesday there stitution to loosen restrictions
has suggested only that the follows instructions from for serving military officers— unclear who the military bloc’s are no signs that the main cul- on the country’s military, an
candidate’s name will have Aung San Suu Kyi,” said Rich- enough to block any amend- candidate will be. prit behind the contraction— initiative that requires a two-
two words. ard Horsey, a Yangon-based ments, which need more than The candidates’ names will weak household spending—has thirds majority in both cham-
A name that has been analyst. “But if it is someone 75% support. be put forward Thursday, but improved. bers of parliament.
floated is Htin Kyaw, an Ox- who ruffles the feathers of the NLD officials had briefly it is unclear how long the pro- Global conditions have also Mr. Abe’s Liberal Demo-
ford graduate, senior party military or develops ideas dif- sought support to suspend the cess will take to finalize. The taken a toll. Market turmoil cratic Party and its coalition
member and son-in-law of ferent from hers, then it mat- constitutional prohibition, new president will pick a cabi- and fears of a China-sparked partner Komeito already have
NLD co-founder U Lwin. An- ters a lot.” rather than amend it, but the net, and officially take over global slowdown have hit ex- such a majority in the lower
other potential candidate is Ms. Suu Kyi rose to promi- armed forces refused. the government on April 1. ports and strengthened the house.
In Brazil, Zika Virus Fuels an Abortion Debate

Pregnant women face fraught choices amid fears of birth defects
BY REED JOHNSON ing around $15,000 on rent can be transmitted through Steiner, secretary-general of health need,” said Ms. Diniz, ing across Latin America,
AND LUCIANA MAGALHAES and other expenses while she semen. the National Conference of who also is vice chair of the where more than 20 coun-
stays temporarily in South Those developments, Brazilian Bishops, said the New York-based International tries and territories have re-
SÃO PAULO—As her Florida during her baby’s among others, have set off a pope’s opposition to abortion Women’s Health Coalition. corded the virus’s presence.
homeland battles a viral epi- gestation. chain reaction of debate on couldn’t be clearer. “In rela- Brazilian law permits Several Latin American coun-
demic that may cause babies “All my generation…are questions of public health tion to abortion, the church abortion only in cases of tries afflicted by Zika, such
to be born with undersized feeling this sadness, very and women’s reproductive is not going to change its po- rape, when there is a health as El Salvador and Ecuador,
skulls and brains, Brazilian afraid,” said Ms. Salviano, 30 freedom, including whether sition,” he said. threat to the mother’s life, or have antiabortion laws as re-
radiologist Juliana Salviano years old, who lives in the the use of contraceptives and Other listeners had very if the fetus has anencephaly, strictive as Brazil’s. In 2012,
has a plan for giving birth to prosperous central-western even extending access to le- a disorder in which large Uruguay became the second
a healthy child: moving to
Miami.
city of Goiânia. “Zika is tak-
ing the freedom of women to
gal abortion are justifiable
measures to stem the epi-
A women’s rights parts of the brain are miss-
ing.
Latin American country, after
Cuba, to decriminalize abor-
Ms. Salviano and her choose when to have their demic. group is petitioning Ms. Diniz’s group, Anis, tion.
husband want to conceive a
baby this year. But they have
first child or raise their fam-
ily.”
Pope Francis made head-
lines world-wide last month
the top court to relax plans to petition Brazil’s Su-
preme Court to allow preg-
So far, suspected cases of
Zika-related microcephaly
no confidence that Brazil will When Zika first sur- when he said contracep- antiabortion laws. nant women who have con- have occurred only in Brazil
soon tame the mosquito- faced two years ago in Brazil, tives—which the Roman tracted Zika to obtain and during an earlier out-
borne Zika virus. Authorities the obscure virus seemed un- Catholic Church normally abortions. The guiding prin- break in French Polynesia.
strongly suspect that a surge likely to spur anxious doesn’t condone—might be different takeaways. Debora ciple in the debate, Anis The discussion over Zika’s
in the number of Brazilian thoughts and heated discus- an acceptable “lesser evil” in Diniz, an anthropologist and maintains, should be relation to reproductive is-
babies born with the congen- sion on issues of sexuality the face of the Zika virus and founder of a Brazilian women’s rights to dignity, sues is fraught with uncer-
ital condition known as mi- and reproductive rights. its possible connection to mi- women’s rights group, thinks health care, and freedom tainty, not least because
crocephaly is linked to preg- Then authorities began re- crocephaly. The pope also the pope’s remarks opened a from psychological torture, while many international
nant women being bitten and porting a jump in cases of drew a sharp distinction be- space for examining whether which are enshrined in Bra- health authorities say the
infected with the virus. babies with microcephaly, tween contraception and Brazil’s strict antiabortion zil’s 1988 postdictatorship link between Zika and micro-
So once Ms. Salviano be- and health authorities in the abortion, which he called “a laws should be relaxed dur- constitution. cephaly appears increasingly
comes pregnant, the cou- U.S. and elsewhere discov- crime, an absolute evil.” ing the epidemic. The controversy over Zika likely, it hasn’t been proven
ple is contemplating spend- ered evidence that the virus Bishop Leonardo Ulrich “It’s not a crime, it’s a and contraception is spread- scientifically.
FROM PAGE ONE
MARCH Arizona State University associ-

ate professor who founded the
tournament. Dr. Hinde and
three fellow scientists analyze
According to sports lore, the
term was first used in the early
20th century to describe high-
school basketball. But “there is
stand on edge and detach if the
tenrec is attacked.
The weasel ran away in de-
feat, “to likely develop barb
Drew, a lecturer at Columbia
University and one of the tour-
nament’s organizers, who has
explained the competition to
rights to the “March Madness”
trademark, says it isn’t familiar
with its mammal-themed coun-
terpart. But the association
Continued from Page One and rank 65 animals based on no doubt in my mind that who- wound infection!” Dr. Hinde college students and his son’s suggested it doesn’t always
Mammal March Madness traits like size, body mass and ever coined the phrase ‘March tweeted. second-grade class. “People take kindly to imitators.
will feature contestants like a temperament. Madness’ was inspired by the “The tenrec was just the don’t often think, ‘I’m going to “Each unauthorized use of
bighorn sheep and an Andean Organizers assign a proba- idiom ‘as mad as a March miracle,” said ecologist Tara sit down and learn about en- NCAA trademarks is evaluated
mountain cat squaring off in bility of victory in each match, hare,’ ” said Anatoly Liberman, Chestnut of Ashford, Wash., dangered forest elephants.’” on a case-by-case basis,” a
imaginary combat. It may be but to give all animals a fight- an etymology expert at the Uni- who hadn’t expected it to win Though Ms. Willcocks, 18 spokeswoman said, and the or-
the only way to know what ing chance, some luck is in- versity of Minnesota. European any battles. “It’s a fascinating, years old, doesn’t fill out a bas- ganization “is careful to ensure
would happen if a giant panda volved. First, they decide the hares fight each other during spiky, tiny mammal…and it just ketball bracket, she swears that that others don’t use our trade-
attacked a giant forest hog. The percentage chance Animal A the spring mating season. kicked booty.” zoological bracketology is marks improperly in a manner
fictional clashes are reported would win a fight, say 60%. In tribute, Dr. Hinde included Twitter users sent 24,200 harder. “The March Madness that confuses the public or mis-
blow-by-blow on Twitter to the Then they use a random num- the European hare in last year’s tweets related to the tourna- tournament is…more predict- represents the NCAA.”
tournament’s fans, which com- ber generator to generate a tournament, but the oversize ment in March 2015, up from able, because you have the As with basketball, fans
prise scientists, science teach- number between 1 and 100. If bunny was ousted by the ele- 1,200 in March 2013, according team history, you have the share their passions on social
ers and students. the number is 1 through 60, An- phant seal in the first round. to a Twitter spokeswoman. stats,” she said. media. “There will be plenty of
Emma Willcocks, a high- imal A wins. If the number is 61 As with college basketball, The organizers are commit- Probably no one has seen a trash talking before battles and
school senior in Illinois who through 100, Animal B wins. Mammal March Madness is ted to keeping bouts “scientifi- brown bear fight a Northern el- after battles,” said Eli Kresta,
learned about the tournament The scientists write narra- most thrilling during upsets. cally plausible,” Dr. Hinde said, ephant seal or an orca battle a 22, a senior at Harvard Univer-
from her biology teacher, went tives of each battle in advance The No. 13 seed lowland although only to a point. Ex- pack of hyenas. sity, who plans to follow the
deep in researching the contes- that are delivered through 140- streaked tenrec, a hedgehog- tinct mammals and mythical “We were Team Orca until fights on Twitter as a study
tants’ habitats, weights and jaw character tweets. like critter that weighs under mammals also tangle. “I’ve the end,” said Charon Henning break from his organic chemis-
sizes before filling out her While the mammal tourna- half a pound, pulled off three had some very prestigious, of her co-workers at Cirque du try homework. “It’s kind of like
bracket last year. “Hypothetical ment was inspired by college surprise triumphs last year. very senior scientists email me Rouge, a tattoo parlor in Wash- merging the comic book world
mammals battling to the basketball’s famous competi- The tenrec’s first-round because they’re filling out ington, D.C. The tattoo artists and the sports world into one
death—it’s ridiculous,” she said. tion, Dr. Hinde maintains that matchup took place on the least their bracket and they want to gathered in a nearby bar to for science and bio nerds,” he
“But it’s also so intellectual.” the phrase March Madness has weasel’s home turf, the wood- know whether a species is go- share appetizers and follow the said, “and I love it.”
The winner of each Mammal its roots in the animal kingdom, lands, and the carnivorous host ing to be a male or a female,” orca-hyena fight in 2014, gar- He’s rooting for the polar
March Madness bout is deter- not the hard court. “March went for a knockout blow with she said. nering “quite a lot of attention” bear, who is one of this year’s
mined by a combination of sci- Madness is literally derived a bite to the neck. But before The battle narratives include as they read tweets aloud. top-seeded combatants along
ence and probability, said Katie from animal battles,” she de- the weasel could strike, it got a links to research papers. “It’s The National Collegiate Ath- with a giant panda, a mountain
Hinde, the anthropologist and clared. face full of barbed quills, which sneaky education,” said Josh letic Association, which has goat and a bison.
TASER Baltimore.”
Taser’s Mr. Isner said even
EMILY BERL FOR THE WALL STREET JOURNAL (2); ALBUQUERQUE POLICE DEPARTMENT/ASSOCIATED PRESS (VIDEO STILL)
where no-bid contracts were
awarded, Taser cameras were
Continued from Page One often first pitted against com-
she didn’t do anything im- petitors’. “We’re happy to
proper. Taser, which cut ties compete and we believe the
with the firm, said it hadn’t product’s merits prove itself,”
known the consultant was a he said.
campaign manager.
For U.S. police departments,
body cameras have become the Rankled rivals
tool of choice in responding to Fast-tracked city deals have
demands for stronger oversight rankled Taser’s rivals, who say
of officers. Police typically wear in some cases they could have
the small video cameras on offered comparable products
their uniforms to record ar- at lower costs.
rests, traffic stops and other in- Washington, D.C., which ap-
teractions with the public. proved a no-bid contract with
Law-enforcement officials Taser late last year, said it
and civil-rights activists alike also tested products from
believe cameras will prompt Vievu and Wolfcom.
better relations between po- Wolfcom chief executive
lice and citizens. The Justice Tiffany Wang said the capital’s
Department has awarded police department didn’t per-
about $20 million to help po- form training and didn’t in-
lice buy them. stall software necessary to up-
Taser, of Scottsdale, Ariz., load video from the cameras.
has an early lead in the mar- “We were very perplexed,” she
ket, and since the 2014 Fergu- said. Vievu said Washington
son shooting, demand has police bought equipment and
soared. Of the 50 largest local scheduled training for a field
U.S. police departments, 24 test but canceled the sessions.
have chosen a body-camera Cities are rushing to outfit officers with body cameras like the Taser model on Los Angeles police Sgt. Rich Joaquin’s belt at a shooting The police department said
vendor, with 22 picking Taser, scene last month, where officer Pavel Gomez wore one on his tactical vest, below. Helmet and body cameras captured details, bottom, an evaluation team “tested the
according to a Wall Street of the 2014 fatal shooting of James Boyd by Albuquerque officers, two of whom face murder charges and have pleaded not guilty. other cameras as well,” but
Journal count. Two cities chose not to conduct a wide-
chose cameras from Vievu, a spread test with other vendors
unit of Safariland Group. Camera Ready because officials concluded
Jim Bueermann, a retired Most of America's largest local police departments have chosen Taser had the only adequate
police chief of Redlands, Calif., body-camera systems or are considering them, with many leaning solution for annotating video
and president of the Police toward Taser. in the field and for cloud-
Foundation, a research organi- based storage.
zation, said police chiefs are City Number of sworn officers New Mexico’s attorney gen-
comfortable buying Taser’s New York 34,454 eral is investigating former Al-
cameras because of their expe- Chicago 12,042 buquerque Police Chief Ray
rience with its stun guns. Cities Los Angeles 9,920 Schultz and the city’s Taser
are “just trying to save time Philadelphia 6,515 body-camera contract. The
Houston 5,295
and money through the pro- state auditor found Mr.
Washington, D.C. 3,865
cess,” he said. Schultz took a consulting job
Dallas 3,478 Body camera
Taser’s camera strategy Phoenix 2,952 with Taser while chief and
Tested/testing
takes the cellphone-carrier Baltimore 2,949 cameras
helped secure a roughly $2
business model. It uses hard- Miami-Dade 2,745 million no-bid city contract
Taser chosen
ware to sell subscriptions to Las Vegas 2,743 with Taser in 2013. The move
Vievu chosen
Evidence.com, its service for Detroit 2,526 No cameras came after a rash of police
storing and sharing body-cam- Memphis 2,413 shootings in the city led to a
era footage. Taser said it has Suffolk County, N.Y. 2,396 call for body cameras.
signed up roughly 5,000 of the Milwaukee 2,294 As part of the investigation,
18,000 U.S. law-enforcement a state grand jury is looking
*Not all deals finalized; all officers not necessarily outfitted with cameras
agencies to the service. Sources: Bureau of Justice Statistics (department size);
into Mr. Schultz’s role in help-
“We view Evidence.com as Wall Street Journal survey (cameras) THE WALL STREET JOURNAL. ing Taser win the Albuquerque
the iTunes of law enforce- contract, according to court
ment,” said Josh Isner, Taser’s as police body cameras,” he Chicago police spokesman subpoenas. Mr. Schultz declined
executive vice president of said, “run unnecessary risks Anthony Guglielmi said Taser to comment, referring to recent
global sales. that can cause them problems was the best fit for the depart- remarks he made in the Albu-
In the contract’s first year, in the long run.” ment’s existing equipment and querque Journal that there had
Memphis agreed to pay Chicago took an approach that a police team tested other been “due diligence” to buy the
$576,000 for 2,000 body cam- similar to Los Angeles’s piggy- brands, concluding Taser best body-camera system.
eras and more than $1.6 million backing. City officials didn’t worked best. “Financially it A Taser spokesman, Steve
to use Evidence.com, according hold competitive bidding before made sense,” he said, “and Tuttle, said the company has
to contracting documents. reaching a five-year contract in technologically it made sense.” cooperated with authorities. A
Only after the agreement, January with Taser that city re- In Baltimore, where riots spokesman for New Mexico At-
said Mr. Strickland, Memphis’s the Taser deal. “is ensuring that the city is act- cords value at up to $10 mil- last year followed Freddie torney General Hector Balderas
mayor, did city officials find Some council members ing appropriately and doing all lion. The contract to Gray’s death in police custody, wouldn’t confirm or deny the
they would still need extra staff questioned why the city didn’t the due diligence.” buy roughly 2,000 body cam- officials recently chose Taser grand-jury probe.
to pore over hours of footage. conduct its own competitive Taser referred inquiries on eras and up to 800 stun cameras. The city first tested As part of Memphis’s 2015
bidding. Kern’s Taser deal was the contract to the city. guns came after police shoot- the technical quality of various agreement, Taser signed an
for 30 cameras, while the LAPD Steve Soboroff, a Los Ange- ings that led Mayor Rahm cameras without viewing price $880,000 contract with a mar-
L.A.’s ‘piggybacking’ intends to buy more than 6,000. les police commissioner who Emanuel to fire city Police Su- tags. After Taser scored high- keting firm headed by Deidre
Unexpected staffing costs “Why are we piggybacking spearheaded the body-camera perintendent Garry McCarthy. est, the city unsealed the com- Malone, the campaign manager
also helped halt Taser’s prog- on the Kern County con- effort, said the city was set to Days after Chicago released for Mr. Wharton, who was run-
ress toward what would be one tract?” an aide to Los Angeles get a better deal than Kern a video showing a black teen- ning for re-election as mayor.
of its biggest body-camera con- City Council President Herb County and had negotiated a ager, Laquan McDonald, being
‘In the effort to do Mr. Wharton, who lost to Mr.
tracts, with the Los Angeles Po- Wesson, a Democrat, wrote in clause requiring Taser to lower shot dead by police, Mr. Eman- something good,’ said Strickland, said he didn’t know
lice Department. a December email obtained its price if it did elsewhere. uel announced it would expand Taser had hired the firm until
Los Angeles was looking through a public-records re- “We did everything legally a pilot program using Taser
Memphis’s mayor, ‘the after the contract was signed,
into body cameras before Fer- quest. to do this as expeditiously as body cameras. Adam Collins, a process was rushed.’ declining to comment further.
guson, when the initiative Mr. Wesson and other coun- possible to not satisfy contract spokesman for Mr. Emanuel, Ms. Malone said her consulting
gathered steam. The police de- cil members put a hold on the experts but to save lives and said the expansion stemmed deal was based on her firm’s
partment first purchased 860 deal late last year over this and create transparency on both from a desire for more trans- pany’s price. qualifications and nothing else.
Taser cameras with private do- other concerns, said Vanessa sides of the camera,” he said. parency around such shootings. Howard Libit, a spokesman Taser’s Mr. Isner said: “Obvi-
nations, after testing different Rodriguez, a spokeswoman for “This was not done for the The city based its procure- for Mayor Stephanie Rawlings- ously, we wished that turned
brands. A city proposal last Mr. Wesson. Chief among them critics. This is not the Acad- ment procedure on a deal New Blake, said Baltimore will now out a little differently.”
year to expand camera use was the total cost of adopting emy Awards.” Jersey made with Taser, using negotiate with Taser over its Mr. Strickland, a city coun-
called for a five-year, $31 mil- the cameras. On top of the $31 an approach Chicago officials bid of $12.8 million, which he cilman before being elected
lion deal with Taser that would million that would go to Taser, call a “reference contract,” said was within the range offi- mayor, said after taking office
skip competitive bidding and the police department re- No-bid risk which they said they use for a cials anticipated. this year, he realized “there
expedite the deal by “piggy- quested $26 million for smart- Mike Purdy, a government- range of products and can save “In the grand scheme of was no discussion at city coun-
backing” on a contract by Cali- phones, data plans and other contracting consultant who has time and money. According to procurements we do, it is an cil or in the community of the
fornia’s Kern County—taking a technology for the rollout. Po- worked with Washington state New Jersey records and Taser, uncommon practice,” he said full cost and amount of man-
process already undertaken as lice officials said they would and cities such as Seattle, said the state has a 2012 contract of the sealed pricing and tech- power this was going to need.”
the basis for its own. need to hire 122 people to han- no-bid deals expose cities to with the company for police nical testing. “There was a “Obviously, all across the
Los Angeles procurement of- dle the video. potentially overpaying and can supplies. State records show great desire to make sure that country people are realizing
ficials said the city uses piggy- The city is going back to the raise the specter of favoritism New Jersey has spent about the technology was rigorously the importance of body cam-
backing in “commodities,” or drawing board to reduce costs. and inappropriate influence. $230,000 on Taser products tested to ensure it was going eras,” he said. “But I don’t feel
goods, about 10% of the time “Balancing the need for swift- “Agencies that do not bid since then. Taser said the state to work and deliver on what any pressure in Memphis to
but said they don’t keep figures ness in the community” on products, especially highly visi- hasn’t bought any of its body was needed for police and roll them out before they’re
on contracts for services like cameras, said Ms. Rodriguez, ble and political products such cameras. prosecutors and the citizens of ready to be rolled out.”
U.S. NEWS
Poll Shows Clinton
With Narrower Lead
BY AARON ZITNER point lead among men.
Strongest support groups
Hillary Clinton’s national for Mr. Sanders include youn-
lead over Sen. Bernie Sanders ger voters; he takes 60% of
has narrowed slightly to nine those under age 50.
points among Democratic pri- Mr. Sanders leads Mrs.
mary voters, a new Wall Street Clinton by 28 points among
Journal/NBC News poll has white men, by 14 points
found. among liberals and by 24
Mrs. Clinton draws support points among independents
from 53% of voters who said who say they will vote in the
they would participate in a Democratic primary.
Democratic primary, while Mr. The survey was released on
Sanders has 44%, the poll the day Democrats were vot-
found. Mrs. Clinton’s lead was ing in primaries in Michigan
11 points in February and 24 and Mississippi.
points in January, according to Before Tuesday’s voting,
GERRY BROOME/ASSOCIATED PRESS
the poll. Mrs. Clinton had won 12 pri-

The new poll reflects the maries and caucuses, com-
strengths each candidate has pared with eight won by Mr.
shown in primary and caucus Sanders. She had support from
voting so far. Mrs. Clinton’s 1,130 convention delegates to
strongest support groups in- 499 for Mr. Sanders. Those
clude women age 50 and totals include support from
older—she wins 73% of that party insiders known as super-
group—as well as nonwhite delegates, who can change
Some of Donald Trump’s ideas, like launching a trade war with Mexico and imposing tariffs on China, have spooked diplomatic advisers. voters and ideologically mod- their allegiance and back any
erate and conservative voters. candidate regardless of how
Trump Upends Foreign-Policy Tack

Mrs. Clinton leads Mr. their home states voted. A
Sanders by 48 points among candidate needs 2,383 dele-
women age 50 and older, by gates to secure the presiden-
29 points among nonwhite tial nomination.
GOP candidate’s plan the U.S., are more planned and to authoritarian leaders.” reversed himself after vowing voters and by 26 points among The survey, conducted
have formed the basis of a But Mr. Trump’s posture of for months to order the tor- moderates and conservatives. March 3-6, interviewed 410
likely would smooth sweeping, if turbulent, foreign strength and straight talk ap- ture of terrorists and the tar- She holds a 24-point lead people and has a margin of er-
some tensions and policy that would reorder Amer- pears to be serving him well. His geted killing of their family over Mr. Sanders among ror of plus or minus 4.84 per-
ican priorities and relationships. supporters often say they be- members, telling The Wall women, while he holds a 14- centage points.
widen other fissures The basic tendencies in Mr. lieve he would stand up for Street Journal Friday that he
Trump’s foreign policy are America against other countries. wouldn’t force the military to
BY DAMIAN PALETTA these: confrontations with The next president will in- perform illegal acts.
China and Mexico, particularly herit a plethora of global chal- In many areas, Mr. Trump
WASHINGTON—Republi- over trade and immigration, lenges, including Russian ag- promises a new toughness,
can front-runner Donald but cooperation with Russia. He gression in the Middle East even when it comes to allies.
Trump has sketched out a for- has also expressed reluctance and Eastern Europe; the emer- He has said he would demand
eign policy that would mark a to challenge dictatorships in gence of Iran as a regional that Germany, South Korea,
sharp change in the way the the Middle East and elsewhere, power; unstable regimes in Japan and Saudi Arabia in-
U.S. approaches global hot saying that inevitably drags the Libya, Iraq, Syria and Yemen; crease payments to the U.S. for
spots, mollifying tensions with U.S. into costly predicaments. and Islamic State’s large foot- military protection.
BILL PUGLIANO/GETTY IMAGES

some leaders and widening fis- As Mr. Trump continues to print. The U.S. is also grappling He has also promised to
sures with others. amass delegates toward the Re- with China’s economic strug- lead a confrontation with
Part of Mr. Trump’s appeal to publican nomination, the voices gles and military expansion. China and Mexico, countries he
voters is his rejection of the sta- of alarm are increasing. Mitt Some Republicans, including accuses of fleecing the U.S. by
tus quo, but some of his ideas— Romney, the 2012 GOP White presidential hopeful Sen. improperly luring manufactur-
launching a trade war with Mex- House nominee, last week said Marco Rubio of Florida, have ing jobs to distort trade. He
ico, taking oil out of Iraq, Mr. Trump’s proposals would embraced a hawkish approach vows to build a 1,000-mile wall
imposing steep tariffs on China— make the U.S. “less safe.” That to these threats, while Sen. Ted along the U.S.-Mexico border,
have spooked some diplomatic sentiment was echoed by more Cruz of Texas advocates using to be financed by Mexico’s Democratic candidate Hillary Clinton at a Detroit coffee shop Tuesday.
advisers from Democratic and than 100 conservative national- force relatively narrowly—a government, an idea angrily
Republican administrations. Mr. security experts in a recent split that loosely reflects the rejected by Mexican leaders.
Trump has been unapologetic. open letter that criticized his divide within the GOP and the In contrast, Mr. Trump to offer assistance to Islamic
“When I see the policy of
some of these people in our
proposals dealing with Russia,
Japan and Muslims.
conservative movement.
Mr. Trump’s proposals don’t
would look to improve rela-
tions with some countries, no-
U.S. State. Mr. Pugh never made it be-
yond Turkey because he was
government, we’ll be in the
Middle East for another 15
“Trump is a throwback to
an earlier, isolationist age,”
fit neatly into either category.
He has appointed just one per-
tably Russia. The U.S. and Rus-
sia are at odds in multiple Watch stopped by Turkish authorities at
the airport in Istanbul and de-
years, if we don’t end up losing said Thomas Wright, director son to his national-security ad- conflicts, including over the ported to the U.S., where he was
by that time because our coun- of the Brookings Institution’s visory committee—Sen. Jeff fighting in Syria, where Russia arrested soon after in New Jersey.
try is disintegrating,” Mr. Project on International Order Sessions (R., Ala.). And there are has helped prop up President Mr. Pugh is among the dozens
Trump told MSNBC last week. and Strategy. “He has a consis- gaps in his positions; he hasn’t Bashar al-Assad. Mr. Trump of suspected Islamic State support-
While some of Mr. Trump’s tent worldview dating back 30 detailed plans for dealing with has traded compliments with MARYLAND ers who have been charged in the
proposals appear to be off-the- years. He would destroy Amer- the weak governments of Iraq Russian President Vladimir Pu- U.S. since early 2014, and his case
cuff, many others, like a tempo- ica’s alliances, close the global and Afghanistan, for example. tin, who isn’t trusted by most
Officer Must Testify was among the first to go to trial.
rary ban on Muslims entering economy and give free license Just last week, Mr. Trump American leaders. In Other Police Trials He is charged with attempting to
In a win for prosecutors, provide material support to Islamic
Maryland’s high court on Tues- State and with obstruction of jus-
Fed Unlikely to Raise Rates Next Week

day ruled that one of the six Bal- tice, which stems from allegations
timore police officers charged in that he tried to destroy four thumb
connection with the April 2015 drives in his possession before U.S.
death of Freddie Gray must tes- agents could examine them. If con-
BY JON HILSENRATH tify at the trials of the other five. victed, he faces a maximum sen-
The question of whether Offi- tence of 35 years in prison.
Federal Reserve officials are cer William Porter could be com- Mr. Pugh served as a me-
likely to hold short-term inter- pelled to testify while he faced chanic in the U.S. Air Force from
est rates steady at their policy pending criminal charges had 1986 to 1990. His lawyer, Eric
meeting next week and leave put the brakes on court proceed- Creizman, said in his closing
open-ended when they will ings against five of the officers. statement Tuesday that Mr.
next raise rates, given The Court of Appeals’ ruling Pugh was “fantasizing” about Is-
their uncertainties about mar- means the other officers’ trials lamic State but never had any
kets and global growth. can resume in Baltimore Circuit intention of joining the group.
For Fed Chairwoman Janet Court. The court gave no expla- —Nicole Hong
Yellen, that likely means craft- nation for the ruling. The seven-
MICHAEL REYNOLDS/EUROPEAN PRESSPHOTO AGENCY
ing a message that gives the judge panel will issue written CALIFORNIA
central bank flexibility to lift opinions at a later date, a court
rates in April or June should spokeswoman said.
High-Speed Rail Plan
the economy perform well in The 25-year-old Mr. Gray, Is Allowed To Proceed
the weeks ahead, without com- who was black, sustained a bro- A judge has ruled that Cali-
mitting to a move in case eco- ken neck in police custody and fornia’s plans for a $64 billion
nomic data disappoint or new died about a week later. Hours high-speed rail system don’t vio-
market turmoil erupts. after his funeral, the city’s worst late promises made to voters
The Fed in December raised rioting in decades broke out, and when they approved state fi-
its benchmark federal-funds Mr. Gray’s death further galva- nancing for the project.
rate from near zero to a range nized a national debate on polic- The ruling released Tuesday
between 0.25% and 0.5% and ing in minority communities. by Sacramento County Superior
signaled officials expected Charges against some of the Court Judge Michael Kenny al-
more rate increases in 2016. six officers include involuntary lows planning and financing of
They next meet March 15-16 Fed chief Janet Yellen is trying to forge an agreement between two camps on the path of rate increases. manslaughter and second-degree the project to proceed.
and on Tuesday began a week murder. All six have pleaded not Attorneys who represent
of closed-door deliberations for providing support should qualitative picture hasn’t The risks to growth and guilty. Only Mr. Porter has stood Kings County and a group of
about how to proceed. the U.S. economy weaken. changed.” hiring now don’t look so trial so far. His manslaughter landowners had argued that the
Recent comments by offi- “From a risk-management Market expectations for threatening, in part because case ended in a mistrial in De- state’s projections on ridership,
cials showed they were re- perspective, this argues for rate increases have shifted financial conditions have im- cember, and his retrial is sched- construction and operating fig-
lieved by recent signs the patience as the outlook be- down since the Fed met in De- proved. uled for June. ures aren’t reliable. They asked
economy is weathering head- comes clearer,” Fed governor cember. Traders in futures Stocks have recovered some Lawyers for Mr. Porter didn’t the judge to block the state from
winds from slowing global Lael Brainard said in a markets see an average fed- lost ground after falling in respond to requests for com- spending money on the project.
growth and turbulent financial speech Monday. funds rate of 0.6% in Decem- January and early February. ment, nor did a spokeswoman The judge, however, said the
markets. Their forecasts for Ms. Brainard is among a ber and 0.9% at the end of Recent data on the econ- for Baltimore City State’s Attor- 2008 ballot initiative specified
modest growth and continued group of Fed officials who see 2017, well below the Fed’s me- omy’s performance look stable ney Marilyn Mosby. only that the state could issue
hiring, which will be updated risks the economy and infla- dian projections of 1.375% at and modest. —Scott Calvert bonds to construct a high-speed
before the meeting, appear to tion could underperform and the end of 2016 and 2.375% at The Federal Reserve Bank of rail system and didn’t prevent
be holding up. In December, greater-than-usual uncertainty the end of 2017. The Atlanta estimates economic NEW YORK modifications to the plan given
they projected the jobless rate about the outlook. This group Fed’s projections could recede output is expanding at a 2.2% to voters. He agreed with the
would drop to 4.7% by the end wants to proceed cautiously. as officials delay raising rates. annual rate in the first quarter,
Jury Set to Consider plaintiffs that the California
of 2016 and that economic Other officials, including Ms. Yellen and her col- near the Fed’s estimate of how Terror Suspect’s Case High-Speed Rail Authority hasn’t
output would expand 2.4% this San Francisco Fed President leagues need to resolve sev- it will do this year. A jury in Brooklyn will soon proven the trains will be finan-
year. The unemployment rate John Williams, say the econ- eral debates as they consider “I continue to expect that begin deliberating about whether cially viable or can meet the
was 4.9% in February. omy is performing well and how to proceed. the economy will expand over a U.S. veteran violated federal travel times voters were prom-
However, officials are want to stay on a course of One is over the risks to the the course of this year at a terrorism laws when he flew to ised but said the system contin-
weighing mixed signals on in- gradual rate increases. economic outlook. In January, pace slightly above its long- Turkey last year, one of the ues to evolve so it is premature
flation, which has been run- “The big picture hasn’t officials disagreed about term trend—sufficient to push many pending cases in the coun- for the court to intervene.
ning below their 2% goal for changed in any fundamental whether economic output, hir- the unemployment rate down try linked to Islamic State. “The authority may be able to
nearly four years. Moreover, way,” he said in a speech last ing and inflation were at risk a bit further and to more fully Prosecutors say Tairod Pugh, a accomplish these objectives at
they are wary of raising rates week. Some recent news of falling short of their fore- utilize the nation’s labor re- 48-year-old U.S. citizen, bought a some point in the future. This proj-
prematurely, given the fragile means there may be “a tweak casts. Some thought the risks sources,” New York Fed Presi- one-way ticket to Turkey in Janu- ect is an ongoing, dynamic, chang-
state of the global expansion here or there when we raise were mounting, but others ar- dent William Dudley said in a ary 2015 as the first stop on a ing project,” Judge Kenny wrote.
and their own limited scope rates or not, but the basic gued it was too soon to say. speech in China last week. trip to Syria, where he intended —Associated Press
PERSONAL JOURNAL
Samsung’s Head of the Smartphone Class

BY GEOFFREY A. FOWLER (Chrome), and Samsung also kept
many aspects of Google’s elegant
Samsung is that slightly awk- design.
ward boy who’s been studying Here’s something I never
very hard in school. The Galaxy S7, thought I’d say: I really like some
which arrives in stores this week, of Samsung’s newest apps. Sam-
is his first solid A. sung+ offers support and a self-di-
Yep, Samsung just moved to the agnostic tool for problems with
head of the smartphone class. your phone. And Samsung Pay lets
Would you be disappointed by you use your phone as a credit
buying a different phone? Probably card at registers Apple Pay can’t.
not. There are The Galaxy S7’s most mediocre
lots of phones quality is its battery. In my lab
that score nearly stress test, which cycles through a
as high, many for series of websites at uniform
hundreds less screen brightness, the Galaxy S7
than the $680 the lasted over seven hours, about 40
PERSONAL Galaxy S7 can minutes short of the iPhone 6s. At
TECHNOLOGY cost without a 8½ hours, the Galaxy S7 Edge only
contract. Some slightly underperformed the
might be sexier or iPhone 6s Plus.
eke out a little more battery life. There’s some science behind
But after years of producing B+ this. The Galaxy S7’s new battery
phones, Samsung’s now the one I’d has 75% more capacity than the
want to captain my mathlete one in the iPhone 6s—it’s even
squad. The Galaxy S7 and larger bigger than the one in last year’s
S7 Edge have a camera that beat Samsung’s new Galaxy S7 and S7 Edge outshine the Apple iPhone 6s and Android rivals. Are they worth the high price? Galaxy S6. But it has to drive a
the iPhone 6s Plus in every low- The Galaxy S7 lets you add storage, below left, and has a camera, below right, that beat the iPhone 6s in low light. much higher-resolution screen.
light situation I’ve tested. Its The Galaxy S7 compensates
screen is a stunner, packing in with power-saving smarts. Its new
more than three times as many always-on screen—which shows
F. MARTIN RAMIN/THE WALL STREET JOURNAL (3)

pixels as the iPhone 6s. And its the time and basic alerts—seems
blazing fast processor is well- like it would be a major drain. But
suited for the new world of virtual the phone’s Amoled screen only
reality. has to power the pixels you can
Samsung earns extra credit for see. Samsung says this is more ef-
calling out some of the baloney ficient than firing up the whole
that makes smartphones annoying screen just to check the time every
and costly. Instead of gouging you 20 minutes.
for built-in storage, the Galaxy S7 In regular use, the Galaxy S7
lets you add your own. It is also makes it through the day, but just
water resistant. barely. And although the battery
My concern: Samsung may have can’t be removed like earlier Sam-
aced this year’s test—but only by sung phones, it is incredibly quick
memorizing last year’s study to charge. With Samsung’s in-
guide. That underwater trick? as the iPhone 6s with a 4.7-inch soon. I tripled my Galaxy S7’s stack of other smartphones. The cluded plug, you’ll go from 0 to
Samsung is just bringing back a screen. 32GB built-in storage by adding an S7 was able to focus and snap im- 100 in under 90 minutes, about an
feature from the Galaxy S5. For $100 more, the Galaxy S7 $18 64 GB MicroSD card in the mediately (example here), while hour faster than an iPhone 6s. (It
There’s no versatile USB Type-C Edge has a 5.5-inch screen with SIM tray. Shame on Apple (and, the iPhone 6s Plus—with Apple’s can also charge wirelessly, but that
port or pressure-sensitive screen curved glass that slopes down on previously, Samsung) for charging best camera—kept struggling to requires extra equipment.)
like Apple’s 3D Touch. There’s both sides. Call it phablet lite: The $100 to up storage to 64GB. And find its spot (example here). The Galaxy S7 refined features
nothing surprising like the two Edge is slimmer and lighter than a I’m also glad Samsung brought Across dozens of shoot outs, the that matter to become the best
cameras LG put on the back of its 5.5-inch iPhone 6s Plus. The back water resistance—up to 5 feet Galaxy S7 photos and video had a smartphone you can buy. That’s a
new G5. You can’t even expect curved part of the screen also of water for 30 minutes—without much more pleasing dynamic giant feat. But a question haunts
fresh Android updates: Samsung comes with its own controls, requiring a special USB plug. range, pulling out detail in places Samsung: In a world with lots of
takes months to deliver the capa- which you can use to access apps, The Galaxy S7’s camera is what the iPhone just left dark, without great smartphones, what justifies
bilities that Google introduces people or news with one swipe. wowed me most. The reason we blowing out the highlights. I’d the price premium?
each year. It’s clear Samsung was brutal in take blurry shots of city lights and rather carry around the Galaxy S7 Samsung’s novel ideas for
You will get a free (and impres- its self-assessment of past Galaxy people in restaurants is that camera than any other. phones have had many goofy turns
sive) Gear VR headset when you design failings. This year’s model phones’ tiny sensors have a hard We choose sides in the Android over the years—remember head-
buy a Galaxy S7, but the phone it- carries over the Apple-esque glass time seeing in the dark. The Gal- vs. Apple divide based on how well based hands-free scrolling? But
self doesn’t point toward the fu- and metal makeover from the Gal- axy S7’s new 12-megapixel camera all our stuff plays together—and Samsung’s early adoption of the
ture. The Galaxy S7 is everything axy S6, and smooths down edges is lower resolution the Galaxy S6’s how difficult it would be to switch. phablet also defined the super size
you want in a smartphone—but even further. The camera bulge camera, but that’s a worthy trade- But cluttered, confusing software of every phone sold today, despite
nothing you didn’t know you that marred the backside of the off, because each pixel can now is no longer Samsung’s Achilles’ Apple’s resistance.
wanted. Galaxy S6 has been tailored down capture 95% more light. heel. The Galaxy S7’s version of Samsung got out in front of the
The Galaxy S7 has rounded to just a hair. I could really see it when I the powerful Android Marshmal- virtual reality race with the Gear
edges that make its 5.1-inch screen Samsung’s design reckoning in- hiked at sunset to my favorite hill- low 6.0 is the cleanest Android VR. The Galaxy S7 should have
feel slightly smaller than last cludes reviving a few actually use- top overlooking San Francisco, version I’ve seen Samsung offer. given us a bigger dose of the fu-
year’s S6, and is almost as slender ful features it had killed off too armed with the Galaxy S7 and a There’s now just one Web browser ture, too.
A Son Becomes the Caregiver for His Aging Mother

BY CLARE ANSBERRY
Chicago
Marcus Waller and his mother
are on an uneasy journey, she in
aging and he in caregiving.
The 56-year-old postal worker
moved from the condo he bought
with his partner into the upstairs
bedroom of his mother’s home.
His mother, Melida Butler, is 83
years old.
Every night, Mr. Waller picks
up dinner on his way home from
DAVID KASNIC FOR THE WALL STREET JOURNAL (2)
work. If the weather

TURNING is nice, he and his
POINTS mother take a short
walk. Most evenings,
they watch a movie
together. Afterward, he helps his
mother climb the stairs, support-
ing her from behind as she clings
to the banister. She has difficulty
walking and using her hands be-
cause of rheumatoid arthritis. He
helps her get undressed and into
the shower. He scrubs her down
and dresses her for bed. Marcus Waller and his mother Melida Butler at their home in Chicago, above left. Mr. Waller, a 56-year-old postal worker, moved back in with his 83-year-old
“People at work say a man mother who has rheumatoid arthritis. Photographs of Mr. Waller, his mother and their family are displayed above the staircase in their home, above right.
shouldn’t be cleaning his mother,”
he says. “You do what you have to being caregivers in the first place,” commodation reluctantly made. habilitation centers. At one center, herself. “I don’t know if I should
do.” she says. “When faced with per- When she was younger, Mrs. But- he found her lying soiled in her just answer again or let her know
The caregiving landscape is sonal care—bathing, dressing—it’s ler dressed stylishly, and rarely bed. Angry, he wheeled her into she already asked the question,”
changing. Traditionally, daughters even harder.” went out without her hair and the shower, and in his work he says. “I’m playing this all by
assumed the care of aging parents, While often entitled to unpaid nails done. clothes, turned the water on them ear.”
but more women are working, and time off through the U.S. Family Mr. Waller learned from her both and bathed her. He brought She gets discouraged. Walking
there are too many people 80 and Medical Leave Act, a program that family comes first, which is her home soon after and has never is painful. She wishes she could
years and older to leave care to that Mr. Waller has used, many why he is there. Mrs. Butler, the hesitated to bathe her since. make her own meals. “My hands
one gender. Sons are stepping up. men don’t take it, feeling it would youngest of five children, helped His older brother, Rick, isn’t don’t let me do too much,” she
About 7.4 million sons are caring hurt their career. bring her sister, one brother and sure he could provide the same says.
for parents, which represents 17% Melida, who was born and two nephews to the U.S., filing the care. “He’s my hero,” says Rick, He watches her face brighten
of all caregivers, according to the raised in Panama, arrived in Chi- necessary papers and giving them who calls his mother daily. when his brother, her grandchil-
National Alliance for Caregiving. cago when she was in her early a place to live. Because of her needs, Marcus dren, nephews and their families
Millennial men, those 18 to 34, 20s. She married at 25, had two After Mrs. Butler’s second hus- switched to a 6:30 a.m.-to-3 p.m. visit.
are already as likely to be a care- boys, Rick and Marcus, and di- band died of Alzheimer’s in 1999, shift at the postal distribution and On ordinary days, though, she
giver—which can mean taking an vorced when Marcus was 3. At she asked Marcus to stay because processing center. When she has a often gets down. That is the hard-
older relative to a doctor’s ap- times, when the boys were in mid- she wasn’t comfortable being doctor’s appointment, or isn’t feel- est thing for him. “Not being able
pointment, managing their fi- dle school, Mrs. Butler, a lab tech- alone. It made more sense for him ing well, he calls in that morning to lift this woman’s spirits up
nances or helping them dress—as nician, worked three jobs, leaving than his brother. Rick, 59, lives and leaves a message, saying he bothers me the most,” he says.
millennial women, says Amy the house at 2 a.m. to catch a bus further away and has a family. needs to take an unpaid day off. In April, he’s taking her to Pan-
Goyer, AARP’s family and caregiv- for her first job, which ended at At first, Marcus stayed three or Sometimes she will call him at ama to see her brother who had a
ing expert. noon, and then heading to two four nights with her, returning the work and he has to go home. Once stroke.
The task is not easy for any part-time jobs. rest of the week to the apartment she fell out of bed. “Three and four generations of
child, but can be more difficult for They sit in the living room of he shared with his partner of 32 “Sometimes—I won’t lie—it people are here because of you,”
sons, says Donna Wagner, dean of their orange brick house in Chi- years. As her condition worsened, brings me down to come home,” he tells her. “You are loved. I’m
the New Mexico State University cago’s South Side. Family photos he started spending more nights he says. “She is so depressed.” As here.”
College of Health and Social Ser- line table tops. She rubs her with her and now spends only Sat- an outlet, he writes and performs Mr. Waller says he often thinks
vices. They tend to keep things to hands, her knuckles enlarged from urday with his partner. poetry. of his friends. Most have lost their
themselves, don’t seek support or the arthritis. Little tasks like turn- He entered a new realm of care He tries to be patient and un- parents. “As hard as it is, it’s re-
confide in friends and co-workers, ing stove knobs and buttoning her in 2012, when his mother almost derstanding, but gets frustrated. warding to know she is still here
and feel isolated, she says. shirt are painful. She often wears died from a spinal infection and Her short-term memory comes and and I can still take care of her,” he
“They don’t feel comfortable loose smocks for comfort, an ac- was in and out of hospitals and re- goes, and she sometimes repeats says.
ARTS & ENTERTAINMENT
Van Dyck’s
Masterly Portraits
REVIEW “Portrait of a Seventy-Year-Old Man”
(1613)—Van Dyck was 14—and a lively self-
KAREN WILKIN portrait, on panel, all red curls and steady
gaze (c. 1613-15), which begin two of the ex-
hibition’s three sections, respectively. (Draw-
New York ings and related works, introduced by self-
When Anthony van Dyck died in London, portraits in oil, are installed in the Frick’s
age 42, in December 1641, the Flemish-born lower-level galleries, prints are in the main-
painter had been making ambitious art for floor cabinet gallery, and paintings in the
almost three decades. A true prodigy, Van main-floor rotunda and adjoining gallery.)
Dyck was apprenticed at 10 to an Antwerp Van Dyck’s early prowess is attested to
artist. By 14, the astonishingly talented boy by the Frick’s splendid pendant portraits of
was painting accom- the esteemed Flemish
GALLERIA PALATINA/PALAZZO PITTI; ;GEMÄLDEGALERIE DER AKADEMIE DER BILDENDEN KÜNSTE, VIENNA
plished heads that dem- painter Frans Snyders
onstrate his mastery of and his wife (both c.
Flemish standards of the 1620), now placed side
time and his surprising by side, allowing us to
assimilation of a relaxed, savor, across both paint-
Italianate manner. At ings, the sensitive char-
age 18, admitted as a acterization of the cou-
master to the Antwerp ple and the play of
artist’s guild, he never- exquisitely rendered
theless put his gifts into lace and linen against
the service of his cele- velvety blacks and sil-
brated compatriot Peter very grays. (There’s a
Paul Rubens, contribut- terrific drawing of Sny-
ing to some of the se- ders downstairs.)
nior artist’s most impor- Van Dyck’s Italian pe-
tant projects, while also riod is represented by
producing notable works the dazzling, full-length
on his own. In his early seated “Cardinal Guido
20s, during an extended Bentivoglio” (1623),
stay in Italy, Van Dyck never before seen in the
made some of the most U.S. A miracle of sump-
incisive, gorgeously painted portraits of the tuous red silk and deep red velvet, the
period. painting suggests a fleeting moment of alert
A superb draftsman and an inventive response, as the cardinal looks up from
printmaker, Van Dyck could also do anything reading a letter; the crisp white paper
he wished to with paint. The directness of against pleated white silk is pretty amazing,
his paintings of friends and colleagues is too. And there’s a spectacular group of the
striking, but so are the elegance and refine- works for which Van Dyck is perhaps best Above: ‘Cardinal Guido Bentivoglio’ (1623); left: Van Dyck’s self-portrait (c. 1613–15).
ment of his portrayals of aristocratic pa- known, portraying the court and family of
trons. No wonder he spent about half of his Charles I, the doomed English king, along his mentor Rubens (both 1617) of the same glimpse into the process, suggesting how
too-short working life as the much traveled, with penetrating (but flattering) character- Jesuit missionary in Chinese costume under- brilliantly Van Dyck could conjure up per-
much sought-after darling of the nobility of izations of the painter’s well-born English scores the differences between the two art- sonality with bold brushstrokes.
the Low Countries, Italy and England. wife and plebeian mistress. ists’ approaches. Rubens evokes his stocky But Van Dyck could also draw magnifi-
All this comes to fascinating life in “Van Impressive as Van Dyck’s paintings are, subject’s particular costume and features cent likenesses when required, as the chalk
Dyck: The Anatomy of Portraiture,” at the and instructive as it is to see them near the with nuanced smudges and strokes; Van drawings and oil studies for a series of por-
Frick Collection—the first major U.S. show Frick’s 18th-century English portraits, for Dyck records basic forms and details with a trait prints attest; engravers needed exact
devoted to the artist since 1990—organized which they served as potent models, the minimum of marks, elongating the figure to models to follow, for imagery and tonal
by the guest curators, Stijn Alsteens, of the section of the show devoted to drawings is make him more imposing. massing, so Van Dyck provided them. A vig-
department of Drawings and Prints at the its most revealing. It’s like watching the art- Van Dyck’s working drawings can be even orous chalk “Portrait Study of Charles I”
Metropolitan Museum of Art, and Adam ist at work as he scrutinizes how drapery more expedient. In contrast to the majority (c. 1632-36) suggests that he could do it for
Eaker, the Met’s newly appointed assistant falls or how an elaborately dressed figure of his colleagues’ careful preparations, his his own use, too. “Van Dyck: The Anatomy
curator of Northern Baroque Painting. Al- stands, recording his observations with casual sketches barely indicate heads and of Portraiture” makes clear that he could do
though focused solely on portraits, the show rapid, urgent strokes of black chalk or spiky features. Likenesses were developed directly anything.
tells us a lot. pen marks. Only the most essential informa- in paint, on the finished canvas. Two por-
The artist’s prodigious abilities are docu- tion is noted. trait studies in oil, necessitated by the enor- Ms. Wilkin is an independent curator and
mented by the carefully observed canvas The pairing of studies by Van Dyck and mous size of a commissioned work, offer a critic.
ZOOTROPOLIS © DISNEY
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OPINION
REVIEW & OUTLOOK
The Return of the 1930s
Trump, Voters and the GOP Convention In temperament, he was
“bombastic, inconsis-
cans have been returning home than
coming here. So China is destroying our
D
onald Trump may pile up more than free to vote for the nominee of their choice tent, shallow and vain- manufacturing—except industrial em-
enough delegates in the primaries to on the second ballot. By the third ballot, 89.4% glorious.” On political ployment has surged in recent years, es-
questions, “he made up pecially in the Rust Belt. So the great
make his GOP presidential nomination are free to choose. This gradual liberation is
his own reality as he mass of Americans are now unprotected
this summer a formality. But designed to prevent a stale- went along.” Physically, from the vagaries of the global econ-
what if he doesn’t? Mr. Party rules require a mate and let the delegates GLOBAL
the qualities that stood omy—save for Medicare, ObamaCare,
Trump, Ted Cruz and their VIEW
media mouthpieces are claim-
majority of delegates, work their will to coalesce
eventually around the best By Bret
out were “the scowling the earned-income tax credit, public-
forehead, the rolling employee pensions and every other enti-
not just a plurality. Stephens
ing it would be political theft nominee. This isn’t cheating eyes, the pouting tlement Mr. Trump promises to protect.
to choose the nominee at a or “stealing the nomination.” mouth.” His “compul- All this generates the hysteria, the
contested convention. These It’s how the process is sup- sive exhibitionism was part of his cult of penchant for histrionic rhetoric, the
timid souls need an education in party rules, posed to work. machismo.” He spoke “in short, strident promise of drastic measures, the disdain
political history and muscular democracy. Ah, but aren’t the delegates part of the “es- sentences.” Journalists mocked his “ab- for civility, the combination of victim-
The Republican Party’s rules say a candidate tablishment”? If by establishment you mean surd attitudinizing.” hood and bullying on which the Trump
Remind you of someone? candidacy feeds, and which it fuels.
needs the votes of 1,237 of the 2,472 delegates stalwart party members in the provinces, then
The description of Benito Mussolini Reading through the avalanche of pro-
at the July convention in Cleveland to win the yes. They are often the rank-and-file GOPers comes from English historian Piers Trump emails that arrive in my inbox,
nomination. They don’t say all one needs is a who run state and local party operations. But Brendon’s definitive history of the what’s notable are the belittling put-
plurality, or to have won the most primaries. others are activists chosen to become dele- 1930s, “The Dark Valley.” So does this downs (“you’re an $@%&, Bret-boy”),
There is no moral right to the nomination be- gates by the various candidates. mean that Donald Trump is the second the self-importance (“I make more
cause a candidate wins 40%, or even 49%, of It’s true that three delegates from each coming of Il Duce, or that yesteryear’s money than you”) and the sense of in-
the delegates. He needs a majority, and the state are Republican National Committee Fascists are today’s Trumpkins? Not ex- jured pride (“how dare you call me a
1,237 number is no secret. members. But the rules this year require actly. But that doesn’t mean we should vulgarian?”). This is precisely the M.O.
Parties set this public requirement because nearly all of those RNC members to vote in the be indifferent to the parallels with the of their candidate.
they exist to win elections, and a nominating first ballot for the candidate who won the last dark age of Western politics.
majority is the best indicator of the rough con- most at-large votes in a state primary or cau- Among the parallels: The growing be-
sensus necessary to unite the party behind the cus. So those RNC members, a small minority
lief that democracy is rigged. That cha- His demagoguery may be a
risma matters more than ideas. That
winner. A candidate who can’t put together a of delegates, are expressing the will of the strength trumps principles. That coarse- foretaste of what’s to come.
majority of delegates is unlikely to unite the voters in the first go-round. ness is refreshing, authentic.
party and is probably a loser in November. The premature protests by Messrs. Cruz and Also, that immigrants are plundering
Before the primary system became the norm Trump are entirely self-serving. Both men the economy. That the world’s agonies “In breaking the taboos of civility
in the decades after World War II, party nomi- think they have a good chance to win a plural- are someone else’s problem. That free and civilization, a Trump speech and
nees were always chosen at the convention. ity of delegates but can’t be sure they’ll get all trade is a game of winners and losers— rally resembles the rallies of fascist
But even in the primary era, a convention fight the way to 1,237. They want to cry havoc in ad- in which we are the invariable losers. leaders who pantomimed the wishes of
has been possible. vance so party members will shrink in fear of That the rest of the world plays us for their followers and let them fill in the
As recently as 1976, Gerald Ford came into a GOP breakup if there’s a nominating fight at suckers. That our current leaders are text,” writes the University of Mary-
not who they say they are, or where land’s Jeffrey Herf in a brilliant essay
the convention with more delegates than Ron- the convention.
they say they are from. That they are in the American Interest. “Trump says
ald Reagan, who offered the vice presidency to These candidates and Republicans generally conspiring against us. what they want to say but are afraid
Senator Richard Schweiker to turn the Penn- should toughen up. If Messrs. Trump or Cruz These are perennial attitudes in any to express. In cheering this leader, his
sylvania delegation his way. The influential couldn’t sway a majority at the convention, it democracy, but usually marginal ones. supporters feel free to say what they
Drew Lewis chose to honor his pledge to Ford, would be because they couldn’t convince their They gained strength in the 1920s and really believe about Mexicans, Mus-
kept the Pennsylvania delegation in line, and fellow Republicans that they have the best ’30s because the old liberal order had lims, and women.”
denied Reagan the nomination. chance of winning. Every candidate entered the been shattered—first at Gallipoli, Ver- This is not the politics of economic
Democrats had to go three rounds of ballot- race knowing the rules, and every candidate dun and Caporetto; then with the Bol- anxiety or dislocation. It’s a politics of
ing in 1952 to produce Illinois Gov. Adlai Ste- has an equal opportunity to exploit them. Mr. shevik coup in Russia, hyperinflation in personal exhibitionism, the right-wing
venson as their nominee. In 1956 Democrats Trump certainly has used the accelerated pri- Germany, Black Tuesday in the United equivalent of refusing to be “body-
staged a floor flight over which of more than mary calendar to his advantage, racking up a States. “What are the roots that clutch, shamed.” Thanks to Donald, the Trump-
what branches grow / Out of this stony kins at last have a license to be as ugly
a dozen candidates to nominate for vice presi- delegate lead before he’s been subject to any
rubbish?” wondered T.S. Eliot in “The as they want to be.
dent. Estes Kefauver won. And in 1980 there real scrutiny. Waste Land,” in 1922. Mussolini’s Black- i i i
was a short-lived effort at the Democratic It’s always possible that a losing Mr. shirts marched on Rome the same year. Mr. Trump’s bid for the presidency
convention to change the rules to help Ted Trump would bolt the GOP and run as a third- Modern Americans have experienced takes place during a period of medio-
Kennedy catch Jimmy Carter, who had lost party candidate or urge his supporters to nothing like those shocks, which is one cre but nonetheless unmistakable eco-
nearly every late primary to the Massachu- boycott in November. But the same might important difference with the 1930s. nomic and employment growth in the
setts Senator. happen in reverse if Mr. Trump becomes the The French army lost more men on an U.S. But as a wise friend of mine noted
With this history in mind, each party con- nominee despite what is growing opposition average day on the Western Front than the other day, what happens when the
tinues to have rules for how long delegates are from traditional Republicans. If the business- the U.S. lost in our worst year in Iraq. next bubble bursts and recession ar-
pledged to a candidate. Under the GOP rules, man can’t rally a majority at the convention, At the height of the Great Depression, rives? A reasonable person can argue
about 1,700 delegates out of 2,472 (69%) are then he can’t unite the GOP enough to beat real per capita GDP fell by nearly 30% that Donald Trump is more Silvio Ber-
from its previous peak. At the depth of lusconi than a new Mussolini. Maybe.
bound in the first ballot to vote for the candi- Hillary Clinton. the 2008-09 recession, it fell by about Or maybe Mr. Trump’s style is just a
date for whom they are pledged—usually by a Many primaries have yet to be held, and the 6%, and soon recovered. foretaste of what’s to come, especially
primary or caucus result. The 31% who are un- odds are that the voters will give one candidate Then again, the pain you’re in is the if an American downturn became a
bound come from states that don’t hold bind- a clear majority before Cleveland. But if they pain you tell yourself you’re in. Or, at global depression.
ing presidential preference contests, or from don’t, the voters themselves will have set the least, the pain you’re told you’re in, usu- In the work of preserving civilization,
states that allow some of their delegates to re- stage for the convention fight. The event could ally by political doctors who specialize nine-tenths of the job is to understand
main uncommitted. be a great education in party democracy, and in hyping the misery of others. the past and stress its most obvious les-
If the first ballot doesn’t produce a major- it certainly would do better in the ratings than So we’re being “invaded” by Mexi- sons. Now would be a good time to re-
ity, nearly 80% of the delegates then become the usual four-day infomercial. cans—except that for years more Mexi- remember the ’30s.
Putin’s Ukrainian Hostage The Man Who Cracked

U
krainian helicopter pilot Nadya might release her to Ukrainian custody once the
Savchenko spent her sixth day on Tues- “trial” has concluded. The Kremlin knows that
day without food and water in a Rus- Ukrainians won’t carry out whatever sentence
Donald Trump’s Code
sian prison. The 34-year-old the Russian courts impose. For any Republican for our souls.” It does so with reason
Iraq War veteran has been Nadya Savchenko has More likely Moscow wants to Party elder still scratch- and a willingness to go where the facts
held for nearly two years in ing his head over the take it. This is the political incorrect-
Russian captivity. She
launched a dry hunger use her as a bargaining chip in
talks with Kiev. rise of Donald Trump, ness that is under siege today.
launched her hunger strike on strike in a Russian jail. Ukrainian President Petro the man with the an-
swer is Bill Maher.
Question the science behind global
warming, for example, and you will be
Thursday after a Russian Poroshenko told us in an
The comedian gave it met with accusations you are a “denier.”
court delayed her final state- email that Kiev is appealing MAIN in August on “Real Hold the same views on marriage Ba-
ment in a “war-crimes” trial. to the West to “ramp up pressure” on Moscow STREET Time with Bill Maher” rack Obama claimed to hold until very
Lt. Savchenko was fighting as part of a to win her freedom. The European Union on By William
when he summed up recently—that it ought to be confined to
ground combatant unit on June 17, 2014, in east- Monday called on Russia to release Lt. McGurn
Mr. Trump’s appeal to one man and one woman—and you will
ern Ukraine when pro-Russian forces took her Savchenko, citing the so-called Minsk II ac- the electorate this way: lose your job if you are the CEO of
hostage. How did she wind up in Russia? Mos- cords between Moscow and Kiev. Yet Ukrai- “They are desperate to have some- Mozilla. If you are African-American and
cow’s bizarre claim is that she was released by nian armed forces the same day counted more body lead them,” Mr. Maher explained. you write about black crime and the cri-
the rebels, then made it across the border on her than 50 provocations from the rebel side in “Somebody to say, ‘You know what, I just sis of fatherless families, you will be de-
own. Russian prosecutors charged Lt. the east, often involving heavy-artillery fire don’t bend to your bull—.’ And Donald nounced as an “Uncle Tom.”
Trump, I’ve got to say, I don’t agree with Mr. Trump’s political incorrectness,
Savchenko with illegal entry and directing mor- banned under Minsk II.
him on a lot, but I kind of get him. We’ve by contrast, is rooted in outrage and
tar fire that they allege killed two journalists In other words, the accord remains an in- been doing the same thing.” coarseness. This is also Mr. Maher’s spe-
that day. Yet her cellphone location data and strument by which the West ties Kiev’s hands Yes indeed. When Mr. Trump goes un- cialty, along with the easy yuck. Thus
videos shot by her captors show that Lt. while Moscow continues to violate Ukrainian filtered, it baffles polite society that such his most recent show featured Trump-
Savchenko was elsewhere, and already in captiv- sovereignty with impunity. Ukrainians remain comments don’t sink him. Especially like subtitles (e.g., “We’re going to make
ity, when the mortar rounds were fired. Moscow defiant, and Lt. Savchenko has become the since his response when called on it al- Germany great again”) superimposed on
has no legal jurisdiction over her. main international symbol of Kiev’s resistance most always is to double down on the a video of Hilter giving a fiery speech.
The Russians last year suggested that they against the bully next door. provocation, even when he’s wrong. A Republican as the Führer. Amusing,
One explanation for the Trump phe- yes. Brave, hardly.
nomenon is that it proves the American Into this world comes Mr. Trump. As
Apple’s Antitrust Anticlimax people (or at least Republicans) are just
what the Democrats say they are: an
the Good Book puts it, Never spake man
like this man before. A huge chunk of the
T
odd bunch of gun nuts, bitter clingers, American people find it refreshing.
he Apple e-book antitrust saga petered ety of routine business practices automatically homophobes, racists, sexists, Muslim Here’s the further complication: Even
out on Monday, as the U.S. Supreme illegal, and perhaps this will be remembered haters and other assorted kooks. In this political incorrectness like Mr. Trump’s
Court declined to hear the company’s as merely a single-serving pretext to loot a view, all Mr. Trump has done is bring occasionally veers into a substantive
appeal. The question now is great American company. But the ugliness out into the open. point. Mr. Maher has done so in his
whether the legal damage can Justice Scalia’s absence if the precedent spreads, it The other explanation is a version of warnings about the threat of radical Is-
be contained or will continue is already felt as the will pose a dangerous threat Mr. Maher’s. Americans are tired of the lam and a Democratic Party trying to
to grow. to competition, efficient mar- pieties that prevent their leaders from pretend it doesn’t exist.
Apple tentatively settled Court declines an appeal. kets and whatever random addressing problems honestly. They see, The Donald makes his own contribu-
with the Justice Department companies prosecutors decide for example, their president refusing to tions here. Though no one (save possi-
and 33 state Attorneys Gen- to shake down next. utter the words “Islamist terror” even af- bly himself) would ever confuse him
ter bloody terrorist rampages that leave with Francis of Assisi, at a time when
eral pending the resolution of its appeal for It’s impossible to say how Antonin Scalia’s
Americans dead. the Obama administration wrings its
supposedly engaging in price fixing by letting absence influenced the result, though the late So when Mr. Trump vows to kill not hands about whether what’s happening
publishers set the prices of their own intellec- Justice was a formidable critic of the plastic- just the terrorists but their wives and to Christians in Syria and Iraq is geno-
tual property on the iPad. So the tech maker ity and incoherence of antitrust law. He wrote children too, it doesn’t follow that this cide, Mr. Trump speaks bluntly about
will pay $400 million to e-book purchasers or joined most of the key precedents that sup- is what his supporters are in fact cheer- U.S. impotence in the face of “people
and $50 million to the states and plaintiffs port Apple’s argument, and one or more of ing on. More likely what they hear Mr. chopping the heads off Christians” in
lawyers who contrived this farce. four sitting center-right Justices inclined to Trump saying is this: I am going to keep the Middle East.
Apple deserves recognition for challenging agree on the merits may have concluded that you safe, and I’m not going to let politi- Give Mr. Maher his due: Though he
the government’s claims so fiercely, not least the risk of a 4-4 deadlock was too great to cal correctness get in the way. At a time and Mr. Trump clearly play for differ-
because its creation of a new platform to com- grant Apple’s petition. when two out of three Americans are ent teams, they are playing the same
pete with the former monopolist Amazon has telling pollsters political correctness is game. No one should be surprised.
Justice Scalia’s death has propelled a wave
a huge problem, Mr. Trump is tapping When you suppress the healthy kind of
caused e-book prices to fall. Most corporations of companies to fold and pre-emptively settle into a powerful sentiment. political incorrectness, you end up with
would have paid to make the trouble go away with the trial bar, including Dow Chemical’s Unfortunately, Mr. Trump’s is the in- the insults and vulgarity of its bastard
long ago, especially companies as rich as Apple, $835 million disposition of an antitrust class ferior version of political incorrectness. brother.
but larger principles were at stake. action. The dispiriting Apple denouement is The better kind challenges what In the entertainment world, it comes
Apple was arraigned on a quarter-baked another reminder of how important his re- George Orwell called “the smelly little out as Bill Maher. In this year’s presi-
theory of antitrust liability that makes a vari- placement on the High Court will be. orthodoxies which are now contending dential election, it’s Donald Trump.
OPINION
Rising Global Debt and the Deflation Threat

By George Melloan ary malaise. Here is a possible reason rates to rock-bottom levels resulted
F
why they can’t: Years of government in advanced economies holding the
ranklin D. Roosevelt’s “stimulus” spending are working highest public debt-to-GDP ratios
March 1933 inaugural line against them. that had ever been seen.”
“that the only thing we Irving Fisher, a prominent mone- Global debt of all types grew by $57
have to fear is fear itself” tary economist in the 1920s and ’30s, trillion from 2007 to 2014 to a total of
was inspiring, but wrong. explained how deflation could result $199 trillion, the McKinsey Global In-
There was plenty to fear, not least from an abnormal buildup of debt. A stitute reported in February last year.
the deflation that then gripped the debt bubble, he wrote (Econometrica, That’s 286% of global GDP compared
nation. 1933) ultimately would burst with 269% in 2007. The current ratio
Today America is in a new age of “through the alarm of either debtors is above 300%. The big boost came
anxiety, with voters opting for anties- or creditors or both.” Debt will be liq- from governments. The debt load,
tablishment outsiders like Donald uidated by the distress sales of as- McKinsey noted, “poses new risks to
Trump and Bernie Sanders. Ameri- sets, the contraction of bank deposits financial stability and may undermine
cans are not experiencing deflation, as bank loans are paid off, and the global economic growth.”
GETTY IMAGES
but there are some early symptoms. slowing down of monetary velocity The Fed says it wants to “reflate”
More important, the potential cause (the turnover from account to ac- to the tune of 2% annual inflation—
is apparent. count that modulates the effective which would let the U.S. Treasury,
supply of money). among others, work off its debt with
With falling prices come plummet- cheaper dollars. But the Fed isn’t get-
Years of deficit spending ing profits that force employee lay- and a lower bound of zero. There it encouraged consumers and business ting the inflation it wants and the
offs. The resulting pessimism and stayed until the quarter point in- to releverage. Cars are now financed deflation risk persists. Its despera-
and near-zero interest loss of confidence leads to “hoarding crease in December 2015. with low or no-interest five-year tion can be deduced from Ms. Yellen’s
rates have led to massive and slowing down still more of Unfortunately, Congress also loans. With the 2008 housing debacle suggestion that she would consider
velocity of [monetary] circulation.” passed, at President Obama’s urging, forgotten, easier mortgage terms negative rates. “Helicopter money”—
borrowing but little growth. The effective money supply con- a massive and highly politicized $831 have made a comeback. Corporations with the Fed bypassing the banks and
tracts, hence deflation. In Fisher’s billion “stimulus” bill a few months also couldn’t let cheap money go to somehow funneling money directly to
view, that’s why the American econ- later. The spending didn’t lead to waste, so they have piled up debts to consumer accounts—is even being
Among the symptoms, dollar prices omy sank into Depression in the early much if any growth, but it was fol- buy back their own stock. Such “in- discussed in the press.
of oil and many other commodities 1930s. (Why it stayed depressed for a lowed by a string of trillion-dollar- vestment” produces no economic Ironically, voters are turning
have slumped; the U.S. consumer-price decade is another story.) plus deficits. Federal debt, a bit over growth, but it has to be paid back toward a developer, Donald Trump,
index hardly budged in 2015. The Eu- When global stock markets $10 trillion in 2009, has ballooned to nonetheless. who never met a highly leveraged
ropean Central Bank and central banks crashed in 2008, Fed Chairman Ben more than $18 trillion. Amid the Great Recession, many project he didn’t like. As for Bernie
in Japan, Switzerland, Denmark and Bernanke was determined not to re- In other words, while Mr. Ber- worried that the entire economy of Sanders, his wishes are simple: more
Sweden are now charging commercial peat a mistake made in 1929. After nanke and current Fed Chairman the U.S., or even the world, would be federal spending and borrowing on
banks interest on their reserve depos- that crash the Fed failed to create Janet Yellen were trying to prevent “deleveraged.” Instead, we have a welfare programs. Should we be
its (negative interest rates) to try to enough money to compensate for the deflation, the federal government new world-wide debt bubble. “The worried about any of this?
stimulate lending. sudden loss of bank liquidity and a was engineering its cause, excessive billions of taxpayer dollars that have
The decline in energy prices is deflationary contraction of the debt. And the Fed abetted the pro- been spent on bailing out the banks,” Mr. Melloan is a former deputy ed-
appropriately celebrated, but the big money stock. And so Mr. Bernanke in cess by purchasing trillions of dollars Aaran Fronda recently wrote in Lon- itor of the Journal editorial page. His
question is whether the U.S. Federal December 2008 lowered the Fed’s in- of government paper, known as quan- don’s World Finance magazine, “com- book “When the New Deal Came to
Reserve and other central banks can terest-rate target to an upper bound titative easing. bined with huge amounts of quantita- Town” will be published by Simon &
arrest a slide into a general deflation- of a quarter of a percentage point Near-zero interest rates also have tive easing and reducing interest Schuster in the fall.
ObamaCare Has Become My Largest Household Expense

By Christopher E. Press dustrial Average is up about 80%, the increase has been more than four- each other, so I grudgingly renewed. Medicare retirees, part-timers and
T
consumer-price index is up 42%, gold fold. The kids are “OTP”—off the My individual health-care cost risk the unemployed have no shield. Who
his year my family joined mil- is up 200%, median new-home prices payroll; just my wife and me now. In for 2016? It is $1,231 x 12, plus can be surprised if they go uninsured?
lions of others whose health- are up 74%, and the average cost per December 2014, I shopped on the $12,900 in deductibles, for a grand If you can’t afford $14,000 in premi-
insurance premium has become gigabyte of hard drive is down 99% to Internet for new health insurance. I total of $27,672. My individual share ums, why pay them when all it buys is
their biggest annual expense. More less than three cents from $22. bought a Bronze plan for two people is half—$13,836. Nearly 13 times more the exposure to another $14,000 (in
than our mortgage. More than our Here’s the math behind my than the $1,072 of 1999. deductibles) you don’t have?
property taxes. More than our state whopping increase. In 1999, having I accept that inflation accounts for I know the idea is that, over time,
income tax. More than our annual gone into business for myself, I My Bronze plan’s monthly some of this increase. And, being higher premiums and deductibles will
food or energy costs. With this year’s needed health insurance for my older, I present a higher actuarial lead to lower health-care prices,
$194-a-month premium increase, I then-young family. To enroll, I met premium jumped $194 this risk. But 13 times more? The increase more competitors and better value.
could roughly buy a Chevy Sonic or a Blue Cross Blue Shield agent at year. I never thought I’d reflects an enormous shift of eco- But “over time” reeks of the econo-
Ford Fiesta. Since 1999 our premiums Starbucks. We insured our family of nomic risk from the insurer to . . . mists’ adage “in the long run”—when
are up 350%. Bad as this is, the story four for $274 a month with a $250- look forward to Medicare. me. One might think that this would we’re all dead and, notably, have no
gets worse. per-person deductible. lower my premium, not raise it. Alas, health-care costs.
Each year our family is subject to Our annual health-care cost risk no. Risk assessment has gone Meanwhile, how can we claim to
paying health-insurance premiums was $274 x 12, plus $1,000 in deduct- that cost $1,037 a month and had a kablooey. have the world’s best health-care
and, if we see a doctor, deductibles ibles for a total of $4,288. My indi- $12,600 family deductible ($6,300 I never thought I’d look forward to system when a healthy family’s insur-
and copays. Think of this total expo- vidual risk (that is, my personal each). We were blessed last year; we Medicare. If I were eligible today, my ance premiums are its largest house-
sure as “health-care cost risk”—the share, excluding my dependents) was didn’t have perfect health but never premium would be $122 a month, hold expense?
sum of certain payments (premiums) $1,072. By 2009, those figures had filed a claim. about one-tenth of my current pre-
plus the potential payments you could jumped to $10,716 in annual premi- So I was shocked when my 2016 mium. I have 21 months to go. Mr. Press, a former president of
incur (copays and deductibles). Since ums for our family of four, plus renewal notice showed a 19% monthly Many in the workforce have been Blanchard Valley Hospital in Ohio, is
early 1999 my family’s health-care $2,000 in deductibles—a threefold premium increase to $1,231—with a shielded by their employers from the a health-care consultant and adjunct
cost risk has increased 1,190%. Over increase in health-care cost risk. higher deductible. All comparable full effects of these changes. Small professor at Emory University’s Roll-
the same period, the Dow Jones In- Since ObamaCare became law, the Bronze plans were within dollars of businesses, the self-employed, pre- ins School of Public Health.
BOOKSHELF | By Thomas A. Bass
The Odds Are Stacked Against Humanity

The Perfect Bet Mr. Kucharski interviewed some of
the key figures in recent schemes,
poker players. Lottery games have
been picked off by brute-force attacks
have witnessed the rise of auto-
mated gamblers, artificial arbitrag-
eventually get too smart, creating a
future where “humans are unable to
By Adam Kucharski and he does a good job of describing (buying up large combinations of ers and algorithmic trading that de- participate in real time, and, instead,
Profile, 271 pages, £12.99 in general terms how they work. Any- numbers). Using customized com- pends on lightning-fast execution, an ultrafast ecology of robots rises
L
one planning to enter a casino or puter models, Bill Benter, an Ameri- measured in milliseconds. up to take control.”
ady Luck has left the house. place an online bet would be advised can gambler who moved from card Here Doyne Farmer enters the pic- Along with finance, Mr. Kucharski
Computers are beating us at to keep this book handy. counting to horses, has gained an ture again. After beating roulette, he takes us through the world of poker,
our own games. From quiz I should mention that I appear in edge in betting at race tracks in Hong and Norman Packard founded a sta- where bots now infest online high-
shows to foreign-exchange trading, Mr. Kucharski’s account. Featured in Kong and elsewhere. Sports betting tistical-arbitrage operation called the stakes tables. Checkers and chess
from poker to arbitrage, artificial in- his narrative is the work of Eudae- pools are now being designed for pen- Prediction Co. that successfully ap- have fallen to computers, and the
telligence is winning. monic Enterprises, a scientific com- sion funds; Mr. Kucharski quotes a fi- plied nonlinear dynamics to the programs keep getting stronger with
The story begins 500 years ago, mune in Santa Cruz, Calif., that built nancial planner saying that gambling the addition of artificial intelligence,
when Gerolamo Cardano leapt up toe-operated computers into shoes is “the missing asset class.” particularly in areas known as “oppo-
from a card game in Venice to stab a and beat the game of roulette in the Many of these strategies rely on AI poker players can beat nent modeling,” or knowing when to
cheating opponent. Wondering if late 1970s. Proceeds from this ven- teams of players or syndicates. humans, computer models bluff. In 2011, an IBM computer, Wat-
there might be a less bloody defense ture went into a communal pot, There is also a move toward cutting son, beat the game show “Jeopardy!”
against card sharps, Cardano began known as the Eudaemonic Pie, which out the middleman. Online ex- can predict horse races, and Watson has since become key to
mathematically analyzing games of was the title of the 1985 book I wrote changes such as Betfair are handling stock trades move too fast IBM’s strategy to profit from “cogni-
chance and working out the laws of about my alternating roles as Eudae- millions of bets a day. Betfair’s tive computing,” and a new manager
probability. Thus commenced the monic scribe and high-stakes bettor. founder, Andrew Black, launched his for people to keep up. for Watson has just been brought in
long tradition of gamblers as godfa- Mr. Kucharski brings the story up to site in 2000 with a mock funeral from the Weather Co. (Weather, with
thers to statistics, chaos theory, arti- the present. He describes a successful procession through London’s finan- its complex systems and big data, is
ficial intelligence and scientific sys- computer-aided attack on London’s cial district, which included, says Mr. movements of futures, currency and another fruitful area for developing
tems for predicting the world Ritz casino in 2004, and recent work Kucharski, “a coffin announcing the other financial markets. After being predictive systems.)
financial markets. by Doyne Farmer, Norman Packard ‘death of the bookmaker.’ ” bought out by the bank UBS, Mr. “Machines take me by surprise
Adam Kucharski, a young Ph.D. and other Eudaemons on building In a chapter called “Rise of the Packard moved into modeling the ori- with great frequency,” said mathema-
from the University of Cambridge who models for market prediction. Robots,” Mr. Kucharski talks about gins of life, while Mr. Farmer delved tician Alan Turing. With computer
specializes in the mathematical mod- Science and gambling are “inter- automated strategies for arbitrage, a deeper into modeling financial mar- programs competing against one an-
eling of infectious disease, provides an twined,” Mr. Kucharski says, with wa- practice he dates from 1844, when kets. If one thinks of markets not as other at 2,000 games per second, no
elegant and amusing account of these gers being “windows into the world of Samuel Morse sent his first tele- static sets of rules but as evolving wonder our machines are getting
developments in “The Perfect Bet: chance.” Statisticians are getting graph message up the line from ecosystems, one can imagine how bi- smart. We design them to surpass us,
How Science and Math Are Taking the good at predicting sports scores. In- Washington to Baltimore. Once ca- ology and finance might eventually and they do.
Luck out of Gambling.” telligent algorithms can beat human bles had been stretched around the unite in a grand unified model. Mr. Mr. Kucharski ends with a discus-
world, it was possible to buy pork Farmer, who is currently a researcher sion of whether poker is a game of
bellies in Chicago and sell them in at Oxford, speculates in “The Perfect skill or chance. This is a practical as
Beijing or vice versa. Since then we Bet” that smart machines might well as a theoretical issue, since the
PUBLISHED SINCE 1889 BY DOW JONES & COMPANY laws covering Internet gambling are
different from those covering games
Notable & Quotable

Rupert Murdoch Robert Thomson
Executive Chairman, News Corp Chief Executive Officer, News Corp of “skill,” such as stock trading or
Gerard Baker William Lewis horse racing. A U.S. court ruled in
Editor in Chief Chief Executive Officer and Publisher 2012 that poker is a game of skill,
Rebecca Blumenstein, Matthew J. Murray DOW JONES MANAGEMENT:
From a speech at the University of hard about amnesty for next month.” which means that it doesn’t count as
Deputy Editors in Chief Ashley Huston, Chief Communications Officer; Chicago Booth School of Business by You laugh, but American corpora- gambling under U.S. law. “The line
DEPUTY MANAGING EDITORS: Paul Meller, Chief Technology Officer; Larry Summers, Harvard economist tions have $2 trillion-plus overseas. If between luck and skill—and between
Mark Musgrave, Chief People Officer;
Michael W. Miller, Senior Deputy;
Edward Roussel, Chief Innovation Officer;
and former U.S. Treasury secretary, they bring that cash back right now, gambling and investing—is rarely as
Thorold Barker, Europe; Paul Beckett, Asia;
Christine Glancey, Operations; Jennifer J. Hicks, Anna Sedgley, Chief Financial Officer; March 1: they pay 35 percent. If you’ve picked clear as we think,” Mr. Kucharski
Digital; Neal Lipschutz, Standards; Alex Martin, Katie Vanneck-Smith, Chief Customer Officer up any newspaper in the last seven says. Now that the bots are combin-
News; Ann Podd, Initiatives; Andrew Regal, Video;
OPERATING EXECUTIVES: With respect to private invest- years, you’ll know that Congress has ing mathematics, physics and psy-
Matthew Rose, Enterprise; Stephen Wisnefski,
Professional News; Jessica Yu, Visuals
Nancy McNeill, Corporate Sales; ment, tax reform is critical. been actively debating changes to chology, let the games begin. Or
Steve Grycuk, Customer Service; Permit me an analogy here. Imagine that policy—for seven years. Just like should I say—with perfect bets and
Paul A. Gigot, Editor of the Editorial Page; Jonathan Wright, International;
Daniel Henninger, Deputy Editor, Editorial Page DJ Media Group: that you are running a library and that the sign on the door of the library winning strategies played by super-
WALL STREET JOURNAL MANAGEMENT: Almar Latour, Publisher; Kenneth Breen, there is a substantial volume of over- saying they’re thinking about am- fast computers—the games are over?
Trevor Fellows, Head of Global Sales; Commercial; Edwin A. Finn, Jr., Barron’s; due books. You might offer amnesty to nesty for next month. It would be
Chris Collins, Advertising; Jason P. Conti, Legal; Professional Information Business:
Suzi Watford, Marketing and Circulation; Christopher Lloyd, Head; get people to return the books. You hard to conceive a policy better de- Mr. Bass, a professor at SUNY
Joseph B. Vincent, Operations; Ingrid Verschuren, Deputy Head might announce you will never offer signed to keep that cash outside the Albany, is the author of “The Pre-
Larry L. Hoffman, Production amnesty, so people will take fines seri- US and not invested in the US than dictors: How a Band of Maverick
EDITORIAL AND CORPORATE HEADQUARTERS: ously and return the books. Only an id- the policy we have pursued. That’s Physicists Used Chaos Theory to
1211 Avenue of the Americas, New York, N.Y., 10036 iot would put a sign on the door saying, why I stress business tax reform as Trade Their Way to a Fortune on
Telephone 1-800-DOWJONES
“No amnesty now, but we’re thinking important for economic growth. Wall Street.”
WEATHER & CROSSWORD
Body Image Concerns Affect Men, New Study Shows

Men worry about being says he told her to look the other
way when he was getting dressed
thin and muscular almost and he tried to hide his stomach
as much as women do when they were intimate. “I al-
ways thought I was going to lose
BY ELIZABETH BERNSTEIN her,” he says.
Two years ago, when his then-
Movies and TV shows full of employer had a weight-loss con-
svelte celebrities. Magazines and test, he signed up and won, losing
websites pushing weight loss and 40 pounds. When acquaintances
exercise. commented on his appearance, his
It is tough being a man these girlfriend became upset.
days. Mr. Shade says his girlfriend
Just-published research, from told him she was worried he was
one of the largest studies on male going to leave her, and that he
body image, shows how much men tried to reassure her. He says the
worry about couple began to fight a lot and
BONDS: ON being thin and eventually broke up.
RELATIONSHIPS muscular: Not Now Mr. Shade is single. But he
KEVIN WHIPPLE FOR THE WALL STREET JOURNAL
quite as much has learned some lessons for his

as women ago- next relationship. “You have to say
nize about their bodies. But still a how you feel,” he says. “And
lot. And it affects their relation- women don’t really care too much
ships in surprising ways. about what you look like.”
A partner may become resent- Therapists recommend: Com-
ful that her man slimmed down municate—before and after the
without her—or jealous of all the weight loss. “Be open about the
new attention he is getting. She hurdles you might go through as a
may worry he will find someone couple,” says Helen M. Farrell, a
else. Or he might encourage her to staff psychiatrist at Beth Israel
lose weight or work out to feel Deaconess Medical Center in Bos-
better, and she could view this as ton and an instructor at Harvard
a not-so-subtle hint. Lots of Likes Medical School.
We all make sure our online The pressure for men to have thin or perfectly muscular bodies can affect their relationships. Therapists Dr. Farrell says it is also impor-
presence makes us look fantastic. have strategies for couples to handle the changes. tant to focus on the ways that get-
Better tone up the dad bod. ting in better shape has benefited
“There’s a much more extreme your relationship: Are you happier
model today of what a healthy looked at body satisfaction and The third category looked at people if they had avoided having together? Do you have better sex?
man looks like,” says David Freder- found that men and women have social pressure. Men feel a lot of sex during the past month because Do you sleep well with less snor-
ick, assistant professor in health similar levels of dissatisfaction it. Sixty-one percent of heterosex- they felt bad about their body. ing to disturb your partner?
psychology at Chapman University, with their physical appearance: ual men and 77% of gay men said Just 5% of heterosexual men said If you’re a man who isn't com-
in Orange, Calif., and lead re- 21% of heterosexual men and 29% they felt people judged them on they did, compared with 20% of fortable receiving compliments, ex-
searcher on the new male body- of gay men were dissatisfied, com- their looks and many said they felt gay men. plain that to your partner. Say: “I
image study. pared with 27% of heterosexual pressured by magazines and tele- All of this male body angst can like it when you tell me I look
The research, published online women and 30% of lesbians. vision to have a better body. cause romantic problems. A 2013 great, but too many compliments
in February in the journal “Psy- When it comes to their weight, study in the journal “Sex Roles” makes me worry you didn’t find
chology of Men and Masculinity,” 39% of heterosexual men and 44% found that men who felt body me attractive before.”
analyzed the answers of 111,958 of gay men said they were dissat-
There’s a much more shame were less likely to seek A man whose partner is wor-
heterosexual and 4,398 gay men isfied. When asked about muscle extreme model today of out—and maintain—romantic rela- ried or insecure should work to
who responded to a series of five tone, 30% heterosexual men and tionships. make her more comfortable, says
surveys posted on MSNBC.com, 45% of gay men were unhappy.
how a healthy man Alan Shade says he’s been both- Dawnn Karen, a therapist and pro-
NBCNews.com and Today.com be- The second category found that looks, a researcher says. ered by his weight ever since he fessor at the Fashion Institute of
tween 2003 and 2012. The respon- 29% of heterosexual men and 37% was “kind of a chubby” child. He Technology in New York. Hold her
dents ranged from 18 to 65 years of gay men said they had gone on noticed that the men on TV were hand tightly when you go out.
old, and the researchers found no a weight-loss diet in the past year. The last category looked at sex. always thin and the fat guy was Compliment her more. And be
differences in body satisfaction ac- More than half of both heterosex- People were asked if they tried to the butt of the jokes. “Even the careful on social media: Shirtless
cording to age. For comparison, ual and gay men had exercised to hide parts of their body during sex Power Rangers were all skinny,” shots that garner a lot of likes
the researchers also analyzed the lose weight in the past year. during the past month and which says the 27-year-old entrepreneur aren’t going to help.
answers of 103,376 heterosexual The researchers asked people parts. Twenty percent of hetero- from Las Cruces, N.M.
women and 2,145 lesbians who an- how many times they checked in sexual men, 39% of gay men did. When he was 21, Mr. Shade met Write to Elizabeth Bernstein at
swered the surveys. the mirror each day. The most The body part they tried to hide a woman, whose figure he de- elizabeth.bernstein@wsj.com or
The research divided the re- common response, for all groups, the most? Their stomach. scribes as “like a pinup.” After follow her on Facebook, Twitter or
sults into four categories. The first was one to three times. Finally, the researchers asked they moved in together, Mr. Shade Instagram at EBernsteinWSJ.
Weather The WSJ Daily Crossword | Edited by Mike Shenk

Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day.
-15 1 2 3 4 5 6 7 8 9 10 11 Down
12 32 Eagle mascot
-10 of the 1984
13 14 15 16
1 Laurence who
Riga -5 Los Angeles
Glasgow
g w headed CBS
0 Olympics
Copenhagen
Co
C p h g
Moscow
osco 17 18 19 from 1986 to
5
1995 33 Brown, e.g.
10 20 21 22
15 2 Bags 34 Lee follower
Dublin
D b Berlin
li 23 24 25 26
Amsterdam
A d 20 3 Cash for a hit? 36 People on a rack,
London
Lond Warsaw
arsaw 25 27 28 29 30 e.g.
Brussels 4 Have control of
Frankfurt
kf 30
Prag
Prague Kiev
e
35 31 32 33 34 35 5 “Watch it, 37 Mossad agents,
mister!” e.g.
Paris
P i Munich
i h 36 37 38 39 40 41
Vienna
V Warm 6 Dating site 38 1983 film whose
Geneva
Budapest 42 43 44 goal iconic line starts
Cold
the answers to
Milan Bucharest
h Stationary 45 46 47 48 49 50 7 Less outgoing the starred clues
51 52 53 54 55 56 8 They’ve been 39 Devil’s domain
Showers framed
Rome 57 58 59 44 Saddler’s tool
Rain 9 Email address
Madrid
d id Istanbul
b 46 Gotham City
60 61 62 63 ender
Lisbon
L b
T-storms butler
10 Star of
64 65 66 48 Allowing a peek
Al i
Algiers T i
Tunis Athens
Ath
Snow
38-Down
67 68 69 70 11 Eavesdrop 49 Heath bar
Flurries innards
Rabat
b 12 Princess-
Ice MIAMI VICE | By David J. Kahn turned-general 50 Violent
of film struggle
Global Forecasts City
Today
Hi Lo W
Tomorrow
Hi Lo W City
Today
Hi Lo W
Tomorrow
Hi Lo W
Across 26 Opening day 52 •Member of
53 Troy story
1 Recipe meas. starter, usually Robin Hood’s 15 Prayer
s...sunny; pc... partly cloudy; c...cloudy; sh...showers; Geneva 7 -1 c 10 0 pc Ottawa 9 1 sh 4 -1 r
t...t’storms; r...rain; sf...snow flurries; sn...snow; i...ice band pronoun 54 SAT taker
Hanoi 29 18 pc 19 13 c Paris 7 2 r 10 1 c 4 Eponymous 27 Spa feature
Havana 30 17 s 30 18 s Philadelphia 26 13 s 26 16 pc physicist Georg 57 Some whistle 18 LGBT rights 55 Hardly relaxed
Today Tomorrow Hong Kong 22 13 c 14 10 r Phoenix 27 13 s 30 14 s 28 Target of a pick advocate
City Hi Lo W Hi Lo W blowers 56 Seasonal music
Honolulu 26 19 c 26 21 pc Pittsburgh 24 12 pc 22 11 c 7 ___-mo 31 •“___ With Love”
Amsterdam 9 0 pc 9 0 c Houston 23 17 t 24 15 t Port-au-Prince 33 18 s 33 19 s 58 Hightail it 22 Deck of wands, 57 It’s high praise
Anchorage 2 -4 pc 3 -2 s Istanbul 16 9 c 14 9 sh Portland, Ore. 12 8 r 14 6 c 10 Full commitment (#1 hit of 1967) swords, cups
59 Target of a pick indeed
Athens 18 10 t 17 9 sh Jakarta 31 24 t 30 25 t Rio de Janeiro 34 25 pc 35 25 pc 13 With 16-Across, 35 Ancient region of and pentacles
Atlanta 25 14 pc 25 17 pc Johannesburg 19 15 t 21 14 t Riyadh 29 15 s 30 17 s
embarrassing modern Turkey 60 Menu phrase 61 Hip-hop’s ___
Baghdad 25 10 s 26 13 s Kansas City 17 8 c 18 6 c Rome 12 4 sh 13 5 sh 24 Recorded Rida
Baltimore 25 13 s 26 17 pc Las Vegas 23 12 pc 26 13 pc Salt Lake City 14 4 c 20 7 pc way to be caught 36 Bear mascot of •
61 Sentry’s 25 Eastern path 62 Market indicator,
Bangkok 36 27 pc 37 27 pc Lima 30 22 pc 30 22 pc San Diego 20 14 s 21 14 pc 14 Much-discussed the 1980 question
Beijing 6 -6 pc 8 -7 s London 8 4 r 10 3 c San Francisco 18 14 r 18 14 r
topic Moscow 29 Color, briefly
Berlin 8 0 pc 8 0 pc Los Angeles 22 11 s 23 12 pc San Juan 27 23 pc 28 23 pc 64 Falcons defensive hippie-style
Bogota 23 9 pc 21 10 sh Madrid 14 2 pc 12 2 pc Santiago 32 12 s 30 12 s Olympics end Beasley 63 Big word on a
16 See 13-Across
Boise 12 8 c 17 8 c Manila 34 26 s 34 25 c Santo Domingo 30 19 s 31 19 s 40 Salute to Caesar 30 Terrific time buck
Boston 20 12 pc 16 7 sh Melbourne 32 19 pc 22 19 t Sao Paulo 30 22 c 28 21 c 17 •Cameron 65 Gets support
Brussels 7 -1 c 9 0 c Mexico City 14 4 sh 14 0 pc Seattle 12 7 r 13 3 sh Crowe’s 41 Some jackets or from Previous Puzzle’s Solution
Buenos Aires 24 10 pc 22 12 pc Miami 27 23 pc 28 22 pc Seoul 5 -6 pc 4 -4 s directorial debut collars 66 Sinuous A N T E O B AMA C H A P
Cairo 32 16 s 27 16 s Milan 10 1 pc 14 2 s Shanghai 9 4 c 8 2 c P O O R L A B E L R OMA
Calgary 9 -1 pc 15 1 pc Minneapolis 10 3 pc 12 2 pc Singapore 33 26 t 33 27 c 19 Letter before 42 Music rights gp. swimmer E D N A EW I N G O P E N
Caracas 30 23 pc 30 23 pc Monterrey 25 12 t 20 12 sh Stockholm 4 -2 pc 5 -3 pc omega S C A L E D R AW I N G
Charlotte 26 13 s 25 16 pc Montreal 10 1 r 3 1 r Sydney 30 23 s 30 23 pc
43 •“Oops” 67 Jargon suffix S A T U R N E N D
20 Glades snapper O B E R O N P L E A S I N G
Chicago 18 8 sh 11 3 sh Moscow 4 0 c 5 -3 pc Taipei 21 13 r 15 12 r 45 First-class 68 Anomalous N AM E C A L L I N G C U E
Dallas 22 13 r 18 13 r Mumbai 34 21 pc 34 22 pc Tehran 19 7 pc 19 8 s 21 Crescent shapes 47 Brother of Virgil 69 Farm female A S P A A A H A I
Denver 13 -2 s 17 3 s Nashville 25 17 pc 25 19 c Tel Aviv 29 17 s 21 14 s T E L B A R N R A I S I N G
Detroit 18 11 r 18 6 r New Delhi 30 17 pc 31 18 pc Tokyo 12 5 r 9 3 pc 22 “Cheerio!” and Morgan Earp 70 Gender-changing A D E L A I D E T R A N C E
E R R F O R G E R
Dubai 26 22 t 26 21 t New Orleans 27 20 c 25 18 r Toronto 16 10 sh 11 5 r • B L I N D F O L D I N G
Dublin 9 2 pc 11 6 c New York City 23 14 pc 24 15 pc Vancouver 11 6 r 12 4 r 23 “Greetings!” 51 “___ we done?” suffix L I O N AMO U R E B A Y
Edinburgh 8 0 pc 9 5 sh Omaha 17 4 pc 17 4 pc Washington, D.C. 24 15 s 27 17 pc O N T O R A I D S N I C E
Solve this puzzle online and discuss it at WSJ.com/Puzzles.
s
Frankfurt 9 -1 pc 9 0 pc Orlando 28 17 pc 30 18 s Zurich 6 -3 pc 9 0 pc B E A N E R N S T T O E S

BUSINESS & TECH.

INSIDE:
MONEY &
INVESTING
A Euro Debt Sale
Uber Readies French Blitz Triggers Anger
SERGIO PEREZ/REUTERS
Ad campaign aims to counter fierce resistance TECHNOLOGY | B3 FINANCE | B5

© 2016 Dow Jones & Company. All Rights Reserved. THE WALL STREET JOURNAL. Wednesday, March 9, 2016 | B1
U.S. Adds Arrow in VW Emissions Case

BY DEVLIN BARRETT civil financial fraud law that potential wrongdoing that is cles in the U.S. over 10 years, twice as far as
AND ARUNA VISWANATHA the Obama administration de- not directly linked to financial A Volkswagen spokes- many fraud statutes allow.
ployed to extract record-set- misconduct. woman declined to comment “This has become a compe-
WASHINGTON—The Justice ting multibillion-dollar settle- Using the law this way “is on its discussions with regula- tition among enforcers, and
Department is expanding its ments from big banks in the pushing the legal theory to its tors. “We are committed to you’re now getting a free-for-
probe of Volkswagen AG us- wake of the 2008 financial outermost limits, against a de- regaining the trust of our cus- all without much coordina-
ing a far-reaching law against crisis. It suggests the car fendant that is not particu- tomers and dealers and will tion,’’ said Mr. Coffee who
bank fraud to go after the maker faces another potential larly sympathetic,’’ said John continue to cooperate with all added that among government
German auto maker over source of penalties after ad- Coffee, a law professor at Co- relevant government agen- agencies, “everybody would
emissions cheating, and eye- mitting it used illegal soft- lumbia University who studies cies,” the spokeswoman said. like a little credit for doing
KRISZTIAN BOCSI/BLOOMBERG NEWS

ing possible violations of tax ware that allowed its diesel- white-collar prosecutions. The new investigation something to Volkswagen.’’
laws, according to people fa- powered vehicles to pollute The company already faces comes as German prosecutors Volkswagen has set aside
miliar with the probe. more on the road than during a multifront fight—including widened their criminal inves- $7.3 billion to cover the cost
The Justice Department has government emissions tests. battling the Environmental tigation into the emissions of fixing the tainted engines,
issued a subpoena under the Prosecutors also have used Protection Agency, the Justice scandal to include 17 people. and said an internal investiga-
Financial Institutions Reform, Firrea to probe alleged mis- Department’s criminal divi- A Firrea-based investigation found a “chain of mis-
Recovery and Enforcement deeds in the auto loan indus- sion, state attorneys general tion adds a front that could takes’’ and a “culture of toler-
Act, or Firrea, to pursue pos- try, but the Volkswagen sub- and civil lawsuits from car pose new issues because the ance’’ for rule-breaking led to
sible wrongdoing at Volks- poena marks the first known buyers—over alleged fraud in statute allows the Justice De- the cheating and deception.
wagen, these people said. instance of the government marketing the fuel efficiency partment’s civil division law- The scandal resulted in the Diesel-exhaust test cheating
That is a novel use of the using a banking law to pursue of some 580,000 of its vehi- yers to look back at conduct Please see VW page B2 spawned vast legal reviews.
Burberry Gets Caught Up in Talk of Deal RWE Sets

Shareholder disclosure
of stake in company
Cuts at
stirs speculation and
pushes shares higher
U.K. Unit
BY MONICA HOUSTON-WAESCH
AND SELINA WILLIAMS
BY SAABIRA CHAUDHURI
FRANKFURT—RWE AG said
LONDON—Burberry Group Tuesday it would lay off about
PLC shares surged more than one-fifth of the workforce at
6% Tuesday amid speculation its U.K. unit npower and re-
that the 160-year-old British lated partners, part of a two-
luxury house could be the tar- year recovery plan to turn
get of an activist investor or a around the unit after a cus-
takeover bid. Recovering tomer exodus hit earnings last
A routine shareholding dis- Burberry's daily share price year.
closure filed last month 2,000 pence Retail energy supplier
showed an undisclosed inves- npower plans to cut 2,400 of
tor had briefly accrued a stake roughly 11,500 jobs at the com-
of more than 5% in Burberry, 1,800 pany or its customer and in-
and a Financial Times report formation-technology services
late Monday about Burberry’s Tuesday: 1,462 by 2018. The reduction comes
1,600
response to the stake led to after billing problems sparked
ANDREW COWIE/EUROPEAN PRESSPHOTO AGENCY
the share-price move. a 7% drop in customers last

Burberry has asked HSBC 1,400 year, which resulted in a 2015
Holdings PLC, which is listed operating loss of £99 million
as the custodian of the stake, 1,200
($141.2 million), compared
to name the investor, but the with a £183 million profit in
bank hasn’t yet responded, ac- 2014.
cording to a person familiar 1,000 Paul Coffey, npower’s chief
with the conversation. How- 2015 2016 executive, called the result ex-
ever, under U.K. rules, once an tremely disappointing, and
Source: FactSet
investor’s stake has crossed said the recovery plan aimed
THE WALL STREET JOURNAL.
5%, the target company can to simplify operations and im-
mandate disclosure of the prove customer service. “[The
stake’s owner. Burberry ex- results] show a business that
pects to get more details from Models took to a London catwalk to present Burberry men’s fashions in January. Burberry has posted lackluster sales recently. tried to do too much too soon,
HSBC in coming days, the per- while not focusing enough on
son said. Europe, where luxury compa- and Japan, leaving it less able have climbed 2.1% over this pressure on Burberry’s leader- the fundamentals,” he said,
Burberry is in discussions nies such as Kering SA and to capitalize on the influx of period while LVMH’s have ship down the road.” which led to “complicated pro-
about the stake with its exist- LVMH Moët Hennessy Louis Chinese visitors, who have jumped 21%. Mr. Bailey did, however, re- cesses and procedures result-
ing bankers Morgan Stanley Vuitton SE are grappling with traveled to take advantage of Despite the macroeconomic cently move to make runway ing in unhappy customers, too
and Robey Warshaw, the per- their own issues or don’t have currency fluctuations. headwinds the company faces, designs available to customers many complaints and extra
son said. Robey Warshaw, a deep-enough pockets. A more Burberry is expected to an- Mr. Bailey—whose dual role as immediately after they are costs to put things right.”
London-based boutique, is likely buyer is a sovereign fund nounce significant changes in chief creative officer and CEO modeled on the catwalk, In late 2015, npower agreed
known for being employed to or private-equity firm. its full-year results in May, is unusual in the industry—is breaking with a tradition to pay the U.K. energy-market
defend against takeover bids. Burberry has reported lack- triggering ratings upgrades by widely seen as having contin- among luxury houses. Collec- regulator £26 million because
The stake in question, luster sales in recent quarters some analysts in anticipation. ued to follow a strategy he tions usually are put on show of customer-service failings,
which crossed the 5% thresh- as the company continues to The company said in January helped create under former several months before they after consumer complaints cul-
old that triggers a disclosure, be buffeted by a slowdown in that Burberry is accelerating CEO Angela Ahrendts, who left can be bought in stores. minated in a management
subsequently fell below 5% on China, its largest market. The initiatives to enhance produc- to head retail at Apple Inc. The The decision’s impact on shake-up.
March 1, according to securi- company in January reported tivity and efficiency and is ad- company has invested heavily Burberry’s profit remains to be “I regret that, as we sim-
ties filings. flat same-store sales growth dressing how to optimize fu- in building out a digital strat- seen. Analysts have said the plify and streamline our activi-
Burberry shares rose 6.6% for its fiscal third quarter. ture revenue opportunities, egy and recently moved to end reduced lead times will pres- ties, this will mean inevitable
to end at 1,462 pence ($20.86) The company’s store foot- investment plans and its capi- a decades-old license agree- sure Burberry’s supply chain. job losses, but I am convinced
Tuesday in London. They reprint is more heavily weighted tal structure. ment in Japan, where it now Were the recently disclosed that these steps are critical to
main well short of the 52-week toward mainland China and Shares have dropped 7.7%, directly operates its stores. stake to belong to an activist protect the thousands of jobs
high of 1,900 pence set about a Hong Kong—places where its excluding Tuesday’s move, “More of the same doesn’t investor, Mr. Solca said push- that will remain,” Mr. Coffey
year ago. sales have suffered lately— since design chief Christopher seem to be enough anymore,” ing for Mr. Bailey’s two- added. The U.K. energy sup-
Analysts said any possible than that of its rivals. The Bailey added the title of chief said Exane BNP Paribas analyst pronged role to be sliced in plier employs 7,500 people di-
takeover bid for Burberry is fashion house has fewer stores executive in May 2014. By con- Luca Solca. “My sense is there half would likely be high on rectly and a further 4,000
unlikely to be mounted out of in Europe—outside the U. K.— trast, rival Kering’s shares is probably going to be more the investor’s list. through outsourced partners.
Vale, Fortescue to Blend Iron-Ore Work Sponsors Suspend

BY RIHANNON HOYLE ney-based fund manager Aus-
bil Dexia, a shareholder in
Ties With Sharapova
SYDNEY—As the global Fortescue. BY SARAH SLOAT recently banned by the World
iron-ore market slumped, Vale In a detour from the asset Anti-Doping Agency.
SA and Fortescue Metals sales that most of the world’s FRANKFURT—Luxury “We’ve suspended all events
Group Ltd. raced to cut costs biggest mining companies brands Porsche AG and TAG and activities with Ms.
to narrow the gap with big An- have been pursuing, the alli- Heuer on Tuesday became the Sharapova for the time being,”
glo-Australian rivals Rio Tinto ance is one of the first signs latest sponsors to distance a spokesman for Porsche said.
and BHP Billiton. Now, they that miners are considering themselves from Ma- The car maker stopped
have a new plan: join forces. joining together to survive a ria Sharapova, a day after the short of cutting ties defini-
Vale and Fortescue on Tues- broad commodities downturn tennis star said she failed a tively, saying it would await
day unveiled a proposed alli- that has ravaged markets such drug test at this year’s Austra- the outcome of the case. Ms.
JIM REGAN/REUTERS
ance, roughly a year in the as oil, coal and nickel. lian Open. Both Swiss watch- Sharapova, a brand ambassa-
making, that could bolster The iron-ore sector has maker TAG Heuer and German dor for Porsche since 2013,
their profits and help them de- been grappling with a sharp sports car maker Porsche said had been scheduled to appear
velop new projects amid a pro- downturn in prices over the they were suspending their at the Porsche Grand Prix ten-
longed period of weak iron-ore past few years, hitting a de- marketing relationships with nis event in Stuttgart, Ger-
prices. Under the tie-up, Vale A Fortescue iron-ore mine in Western Australia last year. cade-low of below $40 a ton in the Russian tennis player. many in April.
could buy as much as 15% in December versus a high of They follow Nike Inc., The tennis player had also
the Australian iron-ore pro- existing pits in remote north- gressive expansion to trans- above $190 a ton in early 2011. which said on Monday it was been under contract with TAG
ducer—a stake valued at west Australia or pursue plans form from a tiny explorer to Spot prices surged on Monday, putting its relationship with Heuer until the end of last
roughly US$1.1 billion today— for mining projects with its the world’s No. 4 exporter of posting a record one-day jump Ms. Sharapova on hold pend- year, a spokesman for the
giving the Brazilian company a new partner, the companies iron ore, behind Vale, Rio of 20% as confidence in ing results of her case. Swiss company said. “We had
foothold in Australia closer to said in separate statements. Tinto and BHP. China’s economic outlook im- Ms. Sharapova on Monday been in talks to extend our
its key customer, China. Fortescue was founded by bil- “It is a surprise, but it is proved, although analysts are said she failed the drug test collaboration. In view of the
Vale also might choose to lionaire Andrew Forrest in certainly smart,” said Paul skeptical the recovery will for a medication she had been current situation, the Swiss
invest directly in Fortescue’s 2003 and undertook an ag- Xiradis, chief executive of Syd- Please see ORE page B4 taking for 10 years that was Please see DRUG page B2
B2 | Wednesday, March 9, 2016 THE WALL STREET JOURNAL.
INDEX TO BUSINESSES BUSINESS NEWS

These indexes cite notable references to most parent companies and businesspeople
in today’s edition. Articles on regional page inserts aren’t cited in these indexes.
Aberdeen Asset
A
Management.............B9
Global Payments.........B5
Goldman Sachs
Group....................B5,B9
Publicis Groupe...........B3
R
Regency Centers.........B7
Takata Taps Restructuring Lawyers
Albertsons...................B9 Greystar Real Estate
Rio Tinto ..................... B1
BY MIKE SPECTOR bear later. Analysts have esti-
Altimeter Capital Partners....................B6 AND MATT JARZEMSKY mated the cost could reach bil-
Robey Warshaw..........B1
Management.............B4 H lions of dollars. Takata has said
Round Hill Capital ...... B6
American Express.......B9 Harter Secrest & Takata Corp. has enlisted it can’t yet predict the final
RWE.............................B1
Apple...........A8,B1,B5,B9 Emery........................B2 restructuring lawyers amid an costs of the recalls.
S onslaught of recalls covering The company also could face
B Henderson Global
Investors...................B5 Samsung Electronics..A8 millions of vehicles with rup- a hefty fine depending on the
Balyasny Asset ture-prone air bags the Japa- outcome of a U.S. Justice De-
Honeywell Shearman Sterling ..... B5
Management...........B10
International.............B5 Siemens.......................B4 nese company supplied, said partment criminal probe. A
HYUNGWON KANG/REUTERS
Bank of America.........B9 HSBC ........................... B1 Sony.............................B3 people familiar with the mat- separate $70 million U.S. regu-
Bank of England.........A1 ter. latory fine could jump to $200
K Square.........................B5
Barclays.......................B9 The Japanese automotive million should regulators flag
Behringer Harvard......B6 Kering..........................B1 T
supplier is working with re- Takata for additional infrac-
Kroger..........................B9 TAG Heuer...................B1
BHP Billiton................B1 structuring lawyers at law firm tions. The company agreed to
Blackhawk Network L Takata..........................B2 Weil, Gotshal & Manges LLP, the fine for failing to alert reg-
Holdings....................B9 LendLease Group........B5 Taser International.....A1 the people said, tapping them ulators to defective air bags in
Blackstone Group ....... B6 London & Continental Theranos......................B4 for advice on looming uncer- A Takata airbag that was removed after a recall program. a timely manner as legally re-
Brewin Dolphin.........B10 Railways....................B5 Twitter ........................ B5 tainties about costly recalls of quired.
Burberry....................B10 LVMH ................... B1,B10 U air bags linked to 10 deaths and Weil lawyers, for instance, rep- tions ever. More than 60 mil- Takata eventually must re-
Burberry Group...........B1 M dozens of injuries globally. resented General Motors Co. in lion vehicles have been recalled call all air bags using the chem-
Uber Technologies ...... B3
C Weil’s restructuring practice the Detroit auto maker’s $50 globally due to the safety prob- ical ammonium nitrate as a
MasterCard ................. B5 United Continental
has been working with Takata billion government rescue and lem, Japan’s transport ministry propellant unless the company
Canada Pension Plan Merck...........................B2 Holdings....................B4
since at least the fall, they said. bankruptcy restructuring. has said. U.S. regulators and proves the devices are safe. Of-
Investment Board .... B6 Millenniata..................B3 United Technologies...B5
The strategies Weil lawyers The firm last year repre- lawmakers have suggested tens ficials have cited the chemical
Chevron ....................... B4 Morgan Stanley..........B1 V are advising Takata to pursue sented auto-parts supplier of millions of additional air as being prone to destabilizing
Citigroup......................B9 N and the scope of the firm’s en- Chassix Holdings Inc. in bank- bags eventually could be re- and exploding after prolonged
Vale......................B1,B10
Coca-Cola.....................B9 Vantiv..........................B5 gagement remain unclear. But ruptcy court. Weil has repre- called. exposure to moisture. Takata
Nike.............................B1
Commonwealth Bank of Visa..............................B5 Weil’s restructuring practice sented companies in five of the Takata, which had roughly has said it is cooperating with
Australia...................B7 O
Visium Asset recently has devoted more time six largest bankruptcies in U.S. $535 million in cash at the end government officials.
ConocoPhillips.............B4 Orbitz Worldwide.......B4 to Takata, one of the people history, including the collapse of December, is trying to sell Moreover, Honda Motor Co.,
Management...........B10
D P Volkswagen.................B1 said. of Lehman Brothers Holdings its automotive interiors divi- Takata’s largest customer, in
Deutsche Bank............B5 Panasonic....................B3 W Restructuring lawyers typi- Inc., which helped trigger the sion to raise money amid the November said it would no lon-
PAR Capital cally help troubled companies financial crisis. recalls. Takata is working with ger use the supplier’s front
F-G Weingarten Realty
Management.............B4 raise money, rework debt or Takata isn’t at immediate Japanese bank SMBC Nikko Se- driver or passenger air-bag in-
Investors...................B7
Facebook......................B3 PayPal..........................B5 steer their way through bank- risk of running out of money. curities Inc. and U.S. bank Moe- flaters in new vehicles under
Fortescue Metals B1,B10 Porsche Automobil
Z ruptcy proceedings. No bank- The company recently posted lis & Co. on the potential sale, development. Other auto mak-
Foxtons Group.............B6 Holding......................B1 ZTE..............................B3 ruptcy filing or other signifi- profits, and currently expects which The Wall Street Journal ers made similar moves.
cant restructuring is imminent additional financial gains even previously reported. Auto makers recalled an-
INDEX TO PEOPLE for Takata, the people said.

Still, Takata’s use of Weil’s
restructuring lawyers is signifi-
amid mounting recalls.
Fourteen auto makers are
recalling some 24 million vehi-
Shares of the Japanese sup-
plier, which has a market capi-
talization of about $415 mil-
other five million vehicles in
the U.S. earlier this year after a
man died in South Carolina
A Frankovsky, Frank.......B3 Niu, Kun ...................... B9 cant, as the firm’s practice usu- cles in the U.S. with Takata air lion, have traded at historic when an air bag ruptured in his
Ahrendts, Angela........B1 Fridman, Mikhail.........B6 O ally is enlisted to help execute bags that risk exploding and lows this year. Takata’s current Ford Motor Co. truck. Ford has
Arnault, Bernard.......B10 G Orlandi, Andrea...........B6 deals stemming from the most spraying shrapnel—one of the financial condition doesn’t re- said it is cooperating with reg-
Asaduzzaman, pronounced corporate troubles. largest such automotive ac- flect recall costs it may have to ulators.
Muhammad.............B10
Gkoutzinis, Apostolos B5 P
Gore-Coty, Pierre-
Atkinson, Robert ........ B3 Peng, Nicole................B3
VW
Dimitri.......................B3
Power, Nev..................B4 people said. The law permits The law gives criminal examining whether the com-
B Gottlieb, Jacob..........B10
R investigations of potential prosecutors and civil govern- pany may be on the hook le-
Bailey, Christopher H
Roche, Talbott.............B9 fraud “affecting” financial in- ment lawyers flexibility to gally and financially for cus-
............................. B1,B10 Harford, Barney..........B4
Ross, Tom....................B5
stitutions. The resale value of share information, making it tomers who obtained tax
Bethune, Gordon M....B4
Hjelm, Chris................B9 Continued from the prior page the diesel cars has dropped an attractive option for the credits when they bought cars
Boubouras, George.....B4 S ouster of former CEO Martin since the software use became government. If prosecutors they thought emitted fewer
K
Budden, Nic.................B6 Shi, Lirong...................B3
Kuhn, Wolfgang..........B9
Winterkorn, as the company public last September. get the information through a pollutants than they actually
C Simphal, Thibaud........B3 faces more than $18 billion in Firrea was originally grand jury subpoena, they are did, the people familiar with
Kuroda, Haruhiko........B9
Cheng Lixin ................. B3 Smisek, Jeff................B4 fines from the civil lawsuit passed in 1989 in response to generally unable to share it the matter said. Before 2011,
Clark, Duncan..............B3 L Solca, Luca..................B1 the Justice Department filed the savings and loan crisis as with their civil counterparts. Americans could receive
Coffey, Paul.................B1 Leissner, Tim .............. B5 Stein, Hap...................B7 in January on behalf of the a way of probing fraud in the “The advantage of doing it $1,300 tax credits for purchas-
D M Szlosek, Tom...............B9 EPA. banking industry. In recent this way is that your hands ing certain clean burning ve-
Meyer, Henry..............B4 W Using Firrea, the depart- years, it was used to investi- aren’t tied,” said former civil hicles, including some of the
Dorsey, Jack................B5
ment’s civil division is now gate big banks that packaged frauds prosecutor Brian Feld- Volkswagen models at issue in
Duncan, Mallory..........B9 Munoz, Oscar..............B4 Watson, John..............B4
exploring whether lenders shoddy mortgages into securi- man, who is now a lawyer at the case.
F N White, Jason...............B7
were harmed by financing ties that lost much of their Harter Secrest & Emery LLP. Volkswagen remains in dis-
Ferrara, Greg...............B9 Narev, Ian....................B7 X customers’ purchases of the value when the U.S. housing In the Volkswagen case, cussions with the government
Forrest, Andrew..........B1 Neale, Jon...................B6 Xiradis, Paul................B1 cars under inflated values, the market collapsed. federal prosecutors also are to create a fix for the cars.
Germany’s Merck Gets Boost

BY CHRISTOPHER ALESSI ment investments.
Quarterly revenue climbed
Merck in 2014 paid €1.9 bil-
lion for U.K.-based AZ Elec- Take Your
Investments
DARMSTADT, Germany— 16% to €3.46 billion, boosted tronic Materials, a producer of
Merck KGaA on Tuesday re- by sales from laboratory- high-purity specialty chemicals
ported a rise in underlying equipment maker Sigma-Al- for the electronics market. The
Wherever Life
fourth-quarter profit, driven drich, which Merck acquired company’s specialty chemicals
by growth at its life-sciences for $17 billion last year. business, known as Perfor-
business, even as the German Costs related to the Sigma- mance Materials, has been
pharmaceuticals group issued
cautious guidance for 2016.
The company’s closely
Aldrich deal—a central part of
Merck’s strategy to diversify
beyond its drug business—led
driven by its expertise in liq-
uid-crystal technology, used in
display screens for televisions,
Takes You
watched earnings before inter- smartphones and tablets.
est, taxes, depreciation and At the Performance Materi-
amortization excluding one-
Drugmaker said als business, Ebitda before
time items grew 6.3% to €933 it expects ‘slight’ one-time items jumped 27% to
million ($1.03 billion), beating €1.1 billion in 2015, boosted by
analysts’ expectations of €917
organic sales growth positive currency effects and
million. for the current year. the integration of AZ.
Merck said it expects Mr. Kley’s shift in strategy
“slight” organic sales growth was largely prompted by
for the current year and fore- to a 55% drop in quarterly net Merck’s struggle to bring lu-
cast Ebitda before one-time profit to €125 million, com- crative new drugs to market in
items to rise by a low double- pared with a year earlier. recent years.
digit percentage. The company That deal, first announced Merck’s best-selling drug,
posted 2015 Ebitda before one- in September 2014, is the lat- multiple sclerosis treatment
items of €3.6 billion. est step by Chief Executive Rebif, continues to face stiff
The outlook was held back Karl-Ludwig Kley, who is step- competition from cheaper ge-
by the company’s health-care ping down next month, to neric versions. Sales of Rebif
division. Merck expects Ebitda move Merck away from its tra- fell 11% in 2015.
before items at the unit to de- ditional pharmaceuticals busi- Ebitda before one-time
cline by a high-single-digit to ness by investing more in the items at the life-sciences divi-
midteens percentage, partly a life-sciences and specialty sion rose 30% last year to €856
result of research and develop- chemicals divisions. million.
to doping allegations of its

sponsored athletes, said Brian
Socolow, an attorney at Loeb
ROBYN BECK/AGENCE FRANCE-PRESSE/GETTY IMAGES
& Loeb in New York specializ-

ing in sports law.
He pointed to the sports-
wear maker’s experience as a
sponsor of Lance Armstrong,
who in 2013 admitted to hav-
ing used performance-enhanc-
ing drugs in Tour de France
competitions.
“It is not a surprise that
Nike dropped her,” said Mr.
Socolow. But Ms. Sharapova’s
initial response to the situa-
tion was positive, he said, and Clarity. So you can jump straight to it.
‘I made a huge mistake,’ said Maria Sharapova on Monday. she may yet redeem her image.
“She will have to demon-
DRUG
With a streamlined dashboard, quick-read
dated, but didn’t check to see strate that it was an honest
what new substances were in- mistake and there are no other market indexes and a seamless device-to-device
cluded. She took full responsi- improper reasons she took the experience, the new MarketWatch gives you easy
bility for having the drug in drug,” he said. access to critical data wherever you are.
Continued from the prior page her system and apologized for The International Tennis
watch brand has suspended letting down her fans and the Federation said in a statement Explore now at MarketWatch.com
negotiations,” the person said. sport. that Ms. Sharapova would be
The drug Ms. Sharapova “I made a huge mistake,” she provisionally suspended from
had been taking, meldonium, said during a brief news confer- competition on March 12,
was added to the banned list ence in Los Angeles on Monday. pending a full determination
in September, and went into “I don’t want to end my career of her case.
effect on Jan. 1. Ms. Sharapova this way and I really hope that —Brian Blackstone, ©2016 Dow Jones & Co. Inc.
said she was notified via email I will be given another chance Tom Perrotta All rights reserved.3DJ3356
in December that WADA’s anti- to play this game.” and Sara Germano
doping policies had been up- Nike is especially sensitive contributed to this article.
THE WALL STREET JOURNAL. Wednesday, March 9, 2016 | B3
TECHNOLOGY @wsjd | wsjd.com
Uber Takes France Sony Unveils Archival System

For Ride in Ads
BY SAM SCHECHNER baud Simphal, general man-
BY DON CLARK
Many companies have little

idea where their data will be in
ager of Uber France. “We were 100 years. Sony Corp. is bet-
PARIS—Uber Technologies maybe wrong to think that it ting it will be stored on optical
Inc. is planning an advertising could work here like it did in discs.
blitz in France, where it is of- the U.S. where markets are a The Japanese company on
ten painted as an American in- little more open to change.” Tuesday unveiled a massive,
vader, that is part of a broader France, Uber’s first market jukebox-like system called
strategy to depict its service outside the U.S., has presented Everspan that is designed to
in a positive light amid regula- a particular challenge. The store, fetch and read high-ca-
tory hurdles across Europe. company says it has attracted pacity discs that are descen-
Beginning Wednesday, the some 1.5 million regular users dants of CDs and DVDs. Sony
California-based car-hailing in the country. But after a se- said it would offer a 100-year
service plans to blanket bus ries of taxi strikes, the govern- guarantee on the disc media.
kiosks and transit hubs in 10 ment has repeatedly tightened Sony is one of many compa-
YUYA SHINO/REUTERS
French cities with a series of transport rules, slowing the nies trying to develop long-
billboards showing typical growth of Uber’s ranks of driv- term storage technology. Pana-
French riders and drivers sit- ers. At the same time, “Uber- sonic Corp., for example, in
ting in Uber cars. The ads, ization” has become a buzz- January introduced an archival
which will also appear in na- word in political circles for a system based on optical discs
tional and local print publica- future economy where low- that are expected to be com- Sony is one of many companies trying to develop long-term storage technology.
tions, all have taglines that wage workers live without em- patible with Sony’s.
play on Uber’s name. ployment contracts and are The two longtime rivals and style computer servers and net- 300 gigabytes, while Panasonic said. An air-filtration system to
“Uberet” reads one ad summoned with the swipe of a others are trying to address work switches. He joined Sony is starting with 100 gigabyte reduce dust buildup draws
showing a trio of weathered smartphone app. needs of companies that expect in 2015 after Sony bought a discs. most of the power, he said.
Frenchmen in berets smiling The government has also to retain data for a very long startup he formed, Optical Ar- Millenniata Inc., a Utah- Potential customers evaluat-
in the back of a sedan. An- taken direct aim at Uber. Mr. time. They face worries that chive Inc. based startup, has been offering the system, which is ex-
other shows a flamboyantly Simphal is currently awaiting current storage options—pri- Many companies today use ing discs that work with Blu- pected to be generally available
dressed rider looking pen- the verdict in a criminal case marily tape drives—will at tape-cartridge systems for ray devices based on an in July, include Los Alamos Na-
sively out the window under in which he and Pierre-Dimitri some point stop reliably retain- long-term data storage, an ap- inorganic material that it says tional Laboratory, Mr. Frank-
the headline “Uberdumat,” Gore-Coty, Uber’s top execu- ing data, or that hardware to proach that backers say has ad- will be able to store data for ovsky said. The company isn’t
which means, roughly, “Uber tive in Europe, the Middle East read aging storage formats will vantages such as the large ca- 1,000 years. It offers capacities disclosing pricing, because
o’clock in the morning.” and Africa, are charged with become unavailable. pacity of each cartridge. But up to 100 gigabytes. such system sales are typically
The car-hailing service de- violating French transport and Yet another fear is that com- discs have their own selling Sony’s ulterior motive is to negotiated individually, he said.
clined to say precisely what it privacy laws. panies will have to keep spend- points, including the ability to sell hardware, which includes a Mr. Frankovsky’s former em-
is spending on the several- Prosecutors have asked that ing to transfer old information retrieve a particular piece of robotic system that shuttles ployer, Facebook, in January
week campaign, which comes Uber be fined €1 million ($1.1 as new storage media become data without needing to rewind behind refrigerator-size cabi- said it helped Panasonic de-
from Paris-based firm Marcel, million) and that Messrs. available. With Everspan, “they or fast-forward. nets to retrieve trays full of velop its storage system and
part of Publicis Groupe SA, Simphal and Gore-Coty be per- will never have to migrate or Where conventional CD-Rs discs. Everspan uses as many expected to deploy it.
but executives said it was in sonally fined smaller amounts remaster the data,” said Frank and DVD-Rs record data on or- as 64 drives to read data at ex- He attributed that choice by
the ballpark of hundreds of and banned from running a Frankovsky, who is spearhead- ganic materials that can de- tremely high speed, Mr. Frank- Facebook largely to Sony’s de-
thousands of euros. company for five years. ing the effort as chief executive grade over decades, the new ovsky said. cision to delay shipping its sys-
The campaign reflects Uber’s French campaign of Sony Optical Archive Inc. archival discs are based on in- While tape-drive storage tem to add key features, hint-
Uber’s efforts to promote what seeks to broaden its appeal to Mr. Frankovsky is better organic materials that are ex- systems generally house drives ing that Facebook may
it says are its social and eco- consumers, painting it as an known in Silicon Valley for hav- pected to retain data longer. and cartridges in separate facil- eventually use hardware for
nomic benefits for Europe, app for women traveling home ing led Facebook Inc.’s hard- They also have higher capacity ities, Everspan places discs and both companies.
where it has faced some of its late at night, to an older cou- ware design and supply-chain than the highest-capacity con- readers alongside companies’ “The fact that customers im-
fiercest resistance. ple traveling to a wedding. operations as well as the Open ventional discs, Blu-ray, which server systems, shortening the mediately have a choice be-
Under pressure from taxi The campaign is also cou- Compute Project, a multicom- typically store about 50 giga- time to retrieve archived data. tween two optical storage sup-
companies and regulators in pled with a study from econo- pany effort that promotes bytes of data. Power consumption is ex- pliers is great for the industry,”
countries from Germany to mists, showing that Uber is open-source designs for Web- Sony’s initial models store tremely low, Mr. Frankovsky he said.
Spain, Uber has retreated from helping increase employment,
its services that don’t use pro- especially in France’s de-
ZTE’s U.S. Phone Goals Hit Hurdle

fessional drivers, and is regu- pressed suburbs.
larly assailed as a Silicon Val- “It has been a mistake not
ley giant that runs roughshod to talk about the benefits of
over local rules. the product,” Mr. Simphal
“The heart of Western Eu- said. “For those who have a ZTE Corp. has expanded its ing to ZTE’s internal docu- selling moderately priced
rope has sadly been the most negative vision, we want to try smartphone business rapidly Bumpy Ride ments obtained and disclosed smartphones with features it
resistant to Uber,” said Thi- to show the positive side.” in the U.S. in recent years, be- ZTE, the biggest Chinese by the U.S. agency, ZTE’s legal says are comparable to those
coming the only Chinese hand- smartphone maker in the U.S., department recommended on costlier phones from Apple
set brand with a substantial now faces challenges as a result that the company set up shell Inc. and Samsung Electronics
of trade restrictions. companies when doing busi- Co. of South Korea.
By Juro Osawa in ness with clients in Iran to cir- The investments have paid
Hong Kong and U.S. smartphone market in 2015 cumvent U.S. export controls. off. In the fourth quarter of
Eva Dou in Beijing Samsung Apple ZTE said in a statement last year, the U.S. was the sin-
23% 41% that it adheres to laws and gle biggest market for ZTE
presence in the country. Now, regulations wherever it oper- smartphones, accounting for
its smartphone ambitions face ates. “ZTE has been cooperat- 24% of the company’s global
a setback following U.S. trade ing, will continue to cooperate shipments, while China made
restrictions that may block the LG 162.5 and communicate with all U.S. up 22%, according to research
DAVID PAUL MORRIS/BLOOMBERG NEWS
14% million
company’s access to critical units agencies as required. The com- firm Canalys.
components such as chips and pany is working expeditiously Mr. Cheng declined to com-
sensors. towards resolution of this is- ment on how much the restric-
The U.S. Commerce Depart- sue,” it added. tions may affect ZTE’s smart-
ment’s decision, an- ZTE Others The trade restrictions— phone business. Analysts say
7% 15%
nounced Monday, sent shock which essentially will bar U.S. the restrictions will hurt the
waves through ZTE’s global of- Source: Canalys companies from supplying ZTE company’s expansion in the
fices. THE WALL STREET JOURNAL. with an array of restricted U.S., where it has gained 7.2%
“I’m shocked and surprised. goods, including computers of the market to rank fourth
We are very disappointed by of executives to cope with the and software—come as the behind Apple, Samsung and
Cisco is committing $150 million to its own collaboration tool. this situation,” Cheng Lixin, situation. In the letter, which Chinese technology company South Korea’s LG Electronics
head of ZTE USA, said in a was reviewed by The Wall has been increasing its invest- Inc., according to Canalys.
Cisco to Invest in
phone interview Tuesday. “We Street Journal, Mr. Shi urged ments in the U.S. smartphone “ZTE found more success
will work with the [U.S.] gov- employees to stay “sober and market, sponsoring National with its handset business, but
ernment to try to solve this is- united,” adding that ZTE’s Basketball Association teams now this threatens to unravel
sue.” management has the capabil- and trying to sell more high- its progress there,” said Dun-
Germany, Slack Rival Chief Executive Shi Lirong

said in a letter Tuesday to
ZTE’s roughly 80,000 employ-
ees world-wide that the com-
ity to meet the challenge.
The Commerce Department
alleges ZTE broke export rules
by supplying Iran with U.S.-
end phones using U.S. compo-
nents such as Qualcomm Inc.’s
mobile processors. In the U.S.,
ZTE has positioned itself as an
can Clark, chairman of con-
sulting firm BDA.
Mr. Cheng of ZTE said that
he was committed to the U.S.
BY DON CLARK been trying to one-up the pop- pany has set up a special team made high-tech goods. Accord- “affordable premium” brand, market despite the challenges.
ular Slack service with its own
Cisco Systems Inc. an- collaboration tool, called
nounced plans to invest $500 Spark—not to be confused MSD—and expect the project
million in Germany over three
years and $150 million to help
with the open-source project
of the same name—which al-
Business to wind down by the end of
2016.
bolster its challenger to busi-
ness-messaging specialist
lows workers to post messages
in a fashion designed to cut Watch “We believe that focusing
our efforts on opportunities
Slack Technologies Inc. down on email. Cisco also has unique to our respective com-
The Silicon Valley company integrated Spark with its voice panies will better position us
also said it has acquired Syn- and videoconferencing offer- to drive growth, execute in a
MICHELE LIMINA/BLOOMBERG NEWS
ata Inc., a San Francisco ings. more efficient manner and op-
startup that offers technology Rowan Trollope, a Cisco se- SANOFI timize vaccine coverage,” the
to let companies search data nior vice president who over- companies said in a statement.
stored on their own premises sees its collaboration offer-
Joint Vaccine Venture “By bringing vaccines more
and at external cloud services. ings, said the $150 million Is Coming to an End rapidly to market, both compa-
Financial terms of the deal Spark Innovation Fund will Drugmakers Merck & Co. nies would deliver greater
weren’t disclosed. help companies that are build- and Sanofi SA will end their value to all stakeholders.”
Cisco, the biggest maker of ing apps that work with Spark joint vaccines operations in Eu- —Joshua Jamerson
networking equipment, has or otherwise fostering an “eco- rope, the companies said Tues-
long sought to forge close ties system” around the service. In day, as the firms plan to LINDT Lindt called 2015 a tough year even as the firm’s profit advanced.
with domestic- and foreign- some cases, Cisco will take eq- merge their respective Euro-
government agencies responsi- uity stakes in startups; in pean vaccination businesses
Chocolate Maker’s Lindt said it increased sales parties had waited for the ap-
ble for setting technology poli- other cases, it may fund joint into their own operations. Profit Rose for Year in all its major markets, de- proval of the Argentine com-
cies and handling major development projects or take The move comes as sales Lindt & Spruengli AG on spite describing 2015 as a munications regulator Enacom,
procurements. Last July, for other steps to help developers, at the joint venture had fallen Tuesday reported an 11% in- tough year where higher raw- which came last week.
example, Cisco pledged to in- Mr. Trollope said. in recent years. Sales in 2015 crease in full-year profit as the material prices and the ele- Under the deal, Telecom Ita-
vest more than $10 billion in The Synata deal, he said, had declined to $923 million, Swiss chocolate maker over- vated level of the Swiss franc lia sold its 51% stake in Sofora
China over the next several addresses goals of the Spark an 18% slide from $1.13 billion came a “persistently challeng- were negative factors. Telecommunicaciones SA,
years to help rebuild its posi- team to add search and secu- a year earlier, according to a ing market environment” —John Revill through which the Italian com-
tion in the market amid geo- rity. Cisco said Synata’s tech- recent regulatory filing by where a hot summer slack- pany controlled Telecom Ar-
political headwinds. nology includes the capability Merck. ened demand for chocolate TELECOM ITALIA gentina.
Germany, an influential, to search through documents Merck, which is known as and a strong Swiss franc Telecom Italia said that the
high-tech hub, has been promi- that have been stored in an en- MSD outside of the U.S. and weighed on results.
Stake Sale Complete total amount generated by the
nent in prodding companies in crypted form, a capability be- Canada, and Sanofi Pasteur, Lindt said 2015 net profit At Telecom Argentina sale is $960 million, which in-
fields such as privacy and data yond that of most conven- the vaccines division of Sanofi, increased to 380.4 million Italy’s Telecom Italia SpA cludes $329.5 million that the
security. Cisco said it plans to tional search engines. created the joint venture in Swiss francs ($382 million) said Tuesday it completed the Italian firm previously received
help Germany accelerate its “Just like I don’t put my 1994 to develop and commer- from 342.4 million francs a sale of its stake in Telecom from Fintech and future reve-
“digitization,” including in- passwords on sticky notes, I cialize vaccines originating year earlier. Argentina to investment firm nue that is set to be gener-
vestments in startups and ven- don’t want my team’s commu- from both companies’ pipe- The maker of Lindor choco- Fintech Group for $550.6 mil- ated by technical support that
ture funds in the country and nications lying around unen- lines. Amid declining sales re- late balls had previously an- lion. Telecom Italia will provide to
collaborating with the public crypted on a server some- sults, the companies mutually nounced a 7.9% increase in an- The announcement comes Telecom Argentina under the
sector on technology projects. where,” Mr. Trollope wrote in agreed to end their partner- nual sales to 3.65 billion francs almost a year and a half after contract signed.
Closer to home, Cisco has a blog post. ship—known as Sanofi Pasteur for 2015. the deal was first struck. Both —Manuela Mesco
BUSINESS NEWS
United Continental Faces Proxy Fight

BY SUSAN CAREY censed jet mechanic, airline ously run a board fight. PAR
AND DAVID BENOIT pilot and Boeing Co. execu- has taken numerous positions
tive. in U.S. airlines over the years,
Two United Continental Henry Meyer, a retired along with stakes in on-line
Holdings Inc. shareholders banking executive who became travel companies and inflight
who say they aren’t activists nonexecutive chairman of entertainment and connectiv-
launched a public fight Tues- United last September, said ity providers.
day to reshape the airline’s Tuesday that the proxy fight is Altimeter, named after the
board and its approach to in- “a hostile action… that could cockpit meter that determines
vestors, putting new pressure distract the company from ex- altitude, was founded in 2008
on the company, which has ecuting on Oscar’s strategic by former PAR principal Brad
struggled since the merger plan.” Gerstner. It had about $1.8 bil-
TED S. WARREN/ASSOCIATED PRESS

that created it. Mr. Bethune, an industry lion of holdings as of yearend,
The looming proxy battle at veteran who turned around with United about a third of
the No. 3 U.S. airline by traffic Continental in the mid-1990, that. Mr. Gerstner is one of
follows the ouster of its previ- said Tuesday that he teamed the six director nominees.
ous chief executive last fall up reluctantly with investment Mr. Bethune, the would-be
and the heart problems and firms PAR Capital Manage- chairman in the proxy fight,
prolonged medical leave of its ment Inc. and Altimeter Capi- said he has known PAR for 15
new CEO, Oscar Munoz. Mr. tal Management LP. or 20 years “and they have
Munoz is scheduled to return Mr. Bethune recruited Mr. never been activists. To get
to full-time duties at the air- Munoz to Continental’s board Shareholders PAR Capital and Altimeter Capital hold a combined 7.1% stake in United Continental. their ire, you really need to do
line on Monday, just over two in 2004 and said he thinks something egregious.”
months after a heart trans- highly of the former railroad experience. Mr. Meyer said to the potential board lightly, but after thorough, se- United, which broadened its
plant. executive. When Mr. Munoz, United offered to amend its shakeup. The unions repre- ries and objective analysis, we route map in the 2010 merger
United, full of promise after 57, was plucked from the bylaws to extend its March 12 senting flight attendants and feel compelled to act.” with Continental, has failed to
United Airlines’ 2010 merger United board to take the sud- deadline for director nomina- airport ground workers re- Even without the presence live up to the promise of that
with Continental Airlines, has denly vacant CEO job without tions, but the two investment newed their support of Mr. of a typical activist investor union. Unlike some other large
consistently underperformed a formal executive search last firms “refused to cooperate in Munoz. Meanwhile, United swooping in with criticism, airline mergers in recent
its rivals in profitability, fall, Mr. Bethune said the new making their nominees avail- mechanics, who recently re- the fight Tuesday got going years, the union has been
shareholder returns and cus- chief called for advice, and the able to be interviewed.” jected a new labor contract, with acrimony. Both sides plagued with problems. Its fi-
tomer metrics, although it re- former mentor “gave him all Mr. Munoz, who suffered a demonstrated outside of a blasted the other for a failure nancial results lagged behind
cently has begun turning the the pointers I could.” serious heart attack weeks af- United investor presentation to reach a private settlement, those of its largest rivals,
tide. Chicago-based United, ter taking the CEO post, had Tuesday in New York. and criticized the other over though the company is start-
On Tuesday, two invest- which last year lost its No. 2 heart-transplant surgery in PAR and Altimeter, are prior negotiations. They even ing to bridge that gap and re-
ment firms that together own standing by traffic to Delta January. He said in a memo to pressing ahead, using their offered different views on ported record results last year.
7.1% of the company’s stock, Air Lines Inc., is fighting back employees Tuesday that the United combined stake, which whether the six nominees It continues to deal with la-
nominated six directors, in- hard against the hedge funds investment firms’ six-person makes them United’s second- would comprise a majority of bor strife, and five years after
cluding former Continental moves. slate “is designed to put their largest shareholder. Their the board. the merger, its flight atten-
CEO Gordon Bethune. On Monday, the company, nominees in control of the United stakes constitute the PAR, a Boston-based invest- dants and mechanics are with-
Mr. Bethune said he agreed which had been in talks with board and our company’s fu- largest position in both firms’ ment fund founded in 1990, out joint contracts. While
to participate, so long as he is the investment firms, abruptly ture,” and counseled workers portfolios. has been in and out of United United has made recent
designated nonexecutive announced that it had added not to lose their focus. “We are generally patient shares in recent years, and be- strides in punctuality, its prior
chairman for a two-year term. three independent directors to United employees, many of investors,” the firms wrote to gan building its current stake delays have drawn consumer
“I do know the front end from its 12-member board, effective whom were elated when Mr. United’s board on Tuesday. in 2014. The firm has about complaints. Postmerger infor-
the back end of the airplane,” immediately. Munoz came aboard and “We certainly are neither trad- $4.5 billion in assets, accord- mation technology transitions
he said later on CNBC, a refer- Two of the new board promised to listen to their ers not activists. We have not ing to a person familiar with were mired in problems that
ence to his tenure as a li- members have airline-industry concerns, had mixed reactions made this difficult position the matter, and hasn’t previ- upset passengers.
Tough Timing
Massive liquefied natural gas projects in Australia were approved when oil prices were on the rise. They have begun shipping the chilled
natural gas amid a slump in benchmark crude prices.
Theranos Ran Tests
$125
100 Amid Quality Issues

75
BY JOHN CARREYROU People who have seen the
50 AND CHRISTOPHER WEAVER Theranos inspection report
BRENT CRUDE OIL PRICE said it seems to indicate the
IN DOLLARS PER BARREL 25 A U.S. federal inspection re- company ignored quality-con-
port said a Theranos Inc. labo- trol results for the blood-clot-
0
ratory ran an important blood ting test that fell short of its
2009 ’10 ’11 ’12 ’13 ’14 ’15 ’16 test on 81 patients in a six- own criteria.
month period despite erratic The results produced in the
results from quality-control quality-control checks repeat-
Project and GORGON QUEENSLAND GLADSTONE PRELUDE* AUSTRALIA WHEATSTONE ICHTHYS
budget estimate
checks meant to ensure the edly deviated from the lab’s
CURTIS LNG LNG PACIFIC test’s accuracy, people familiar typical result by more than
$54 BILLION $20.4B $18.5B $18.4B† $29B $37.4B with the report said. two standard deviations, those
The report hasn’t been pub- people said.
licly released but is far more The erratic quality-control
detailed than the letter that results occurred between April
Investment decision Sept. 1, 2009 Oct. 1, 2010 Jan. 3, 2011 May 2, 2011 July 1, 2011 Sept. 1, 2011 Jan. 3, 2012 summarized the results of last 1 and Sept. 23, 2015, the peo-
fall’s inspection of the Newark, ple said. Despite those prob-
LNG Capacity 15.6 MILLION 8.5M 7.8M 3.6M 9.0M 8.9M 8.9M
(metric tons a year)
Calif., lab by the federal Cen- lems, inspectors found that
ters for Medicare and Medic- Theranos sent blood-test re-
Project operator Chevron BG Group Santos** Royal Dutch Shell Origin Energy Chevron Inpex aid Services and was sent to sults to the 81 patients, ac-
Production start date March 2016 December 2014 September 2015 December 2015 2017†† 2017†† Theranos in late January, cording to the people familiar
*Budget estimate and production start not disclosed, Bernstein estimates the cost at US$16 billion, with a 2017 start-up **Santos operates the upstream activities, wells and compression these people said. with the report.
hubs while the JV operate the LNG plant †Converted from Australian dollars at current rate ††Scheduled That letter cited “deficient “We have conducted assess-
Sources: Thomson Reuters (oil prices); the companies THE WALL STREET JOURNAL. practices” in five categories. ments to identify any patients
In one of them, hematology, affected or having the poten-
Falling Prices Test Chevron LNG Bet

the problems found by inspec- tial to be affected by the issues
tors posed “immediate jeop- identified by CMS, and we
ardy to patient health and have no reason to believe that
safety,” regulators said. these issues have affected pa-
BY ROBB M. STEWART as construction progresses, and Shell, which own about lia’s northeastern coastline The test that inspectors tients’ health,” said Kingshuk
offers a scant return on the 25% of Gorgon each, declined coincided with a parallel in- found Theranos kept doing de- Das, director of Theranos’s lab
MELBOURNE, Australia— huge investment with energy to comment. vestment boom in other re- spite the erratic quality-con- in California.
Six years ago, Big Oil was so prices at current levels. Oil Last year, China’s LNG im- sources such as iron ore and trol results was a hematology Dr. Das added: “At its heart,
confident in the outlook for prices were at roughly $60 a ports fell 1% as the economy gold. test that measures how long it the CMS report is about people
global energy demand that it barrel—and rising—in Sep- cooled. At the same time, The result was that Chev- takes blood to clot, the people and processes in one Theranos
bet tens of billions of dollars tember 2009, when Chevron, rapid growth in North Ameri- ron had to pay more to hire familiar with the matter said. lab in the past, and does not
to turn part of a remote Aus- Exxon and Royal Dutch Shell can shale-gas production people—from pipe fitters to The test is an important reflect the current state of that
tralian island known for its PLC signed off on the proj- sparked fears of a global en- welders—while the construc- part of the treatment regimen lab.” Theranos, based in Palo
breeding grounds of rare sea ect’s construction. That is ergy glut that is likely to take tion frenzy helped to drive up for patients who are at risk of Alto, Calif., and one of the
turtles into a vast gas-export roughly 60% above where oil years to clear. the cost of raw-material im- strokes or have blood disor- highest-profile startups in Sili-
hub. prices sit currently. “We’re looking at a world ports such as steel. ders. con Valley, was founded by
Now, the Chevron Corp.- Gas sales from LNG proj- of significantly lower returns A strengthening Australian Inaccurate results from the Elizabeth Holmes and has an-
led Gorgon plant has become ects in the Asia-Pacific region compared to the old days of currency inflicted additional test can be especially serious other lab in the Phoenix area.
emblematic of how quickly such as Gorgon are linked to the LNG industry,” said Mi- pain for Chevron, which had for patients taking blood thin- Theranos spokeswoman
the assumptions that under- swings in oil prices, meaning chelle Neo, a Singapore-based calculated its costs in U.S. ners such as warfarin, also Brooke Buchanan said: “The
pinned giant energy bets returns on investment are analyst at energy consultancy dollars. known by its brand name Cou- PT/INR issues identified by
world-wide have been shaken more vulnerable to volatility FGE. Barrow Island’s status as a madin. Too much warfarin can CMS related to tests run on
by falling energy prices. in commodity markets than Gorgon is Chevron’s big- government-protected nature cause fatal bleeding, while too conventional equipment using
On Tuesday, Chevron said export-oriented facilities in gest global bet on LNG and it reserve since 1910 also little can leave patients vulner- venipuncture samples.”
it had started producing liq- the U.S. In 2015, LNG prices will produce as much as 15.6 brought complications. Chev- able to clots and strokes, ac- A CMS spokeswoman de-
uefied natural gas—natural in Asia roughly halved. million metric tons of LNG a ron and its partners had to cording to medical experts. clined to comment.
gas cooled to a liquid form so year, plus enough gas to gen- comply with strict environ-
it can be transported by erate electricity for 2.5 mil- mental conditions, ranging
ORE
ship—from the Gorgon proj-
Gorgon plant starts lion Australian homes. from shrouded lights to avoid exert control over the market.”
ect and the company expects production as Gorgon, along with seven disturbing the nighttime mat- One of the first ventures for
to send its first cargo to cus- other gas-export facilities in ing of marine turtles to some Fortescue and Vale is likely to
tomers in Asia next week.
investors grow more Australia and neighboring Pa- of the world’s toughest quar- be a tie-up on sales of existing
However, the plant is becom- skittish about China. pua New Guinea, promised to antine procedures to cut the Continued from page B1 ore. The companies want to
ing operational at the same help redraw the energy map risk of invasive species being last. blend some of the ore they
time investors are more skit- by moving the epicenter of brought in by workers. Vale and Fortescue have each dig up to create a new
tish regarding the health of Energy companies say the global gas trade away The Gorgon project “is the been trying to reduce operat- product they can sell to steel-
China’s economy, amid an shareholders will benefit from the politically volatile poster child of rampant cost ing costs to help counter fall- makers in China, the world’s
oversupply of major commod- from a guaranteed revenue Middle East. About $180 bil- inflation gone wrong in the ing prices, which have de- biggest buyer of the main in-
ities. stream from Australia. Chev- lion was committed by com- Australian LNG industry,” voured their profits. In gredient in steelmaking.
Last month, Chevron, ron estimates gas output panies including Chevron, said Neil Beveridge, a Hong December, Citigroup estimated Fortescue’s ore is of a lower
which owns nearly 50% of from Gorgon will last at least ConocoPhillips and France’s Kong-based senior analyst at the pair had break-even costs quality than what comes from
Gorgon, was among 10 U.S. oil 40 years. Also, Chevron and Total SA to Australia’s gas- Sanford C. Bernstein. He esti- of about $33 and $37 a metric its competitors, meaning it
companies whose credit rat- its partners have locked export industry between mated that the project’s over- ton, respectively—only a touch contains less iron per metric
ings were cut by Standard & Asian customers including 2009 and 2012. all cost could come in at below the then-spot price of ton and is typically more diffi-
Poor’s because of the oil- China into deals linked to oil As well as concerns raised close to $60 billion, or $39. BHP and Rio Tinto’s cult to process. Some analysts
price rout. prices that last as long as 20 by the impact of falling prices roughly $4,000 a ton of ca- break-even costs were esti- have questioned whether it
Another of Gorgon’s big in- years, meaning that they on margins, onshore LNG pacity—about twice the cur- mated at $29 a ton. could also become harder to
vestors—Exxon Mobil Corp.— must pay for natural-gas sup- projects are costly because rent break-even estimate Fortescue Chief Executive sell as China takes a tougher
had its triple-A corporate rat- ply whether they need it or they require refrigeration based on current prices. Nev Power denied the deal is stance on industries seen as
ing placed on watch by not. tanks and a network of trans- Chevron expects the proj- about wresting customers contributing to a worsening
Standard & Poor’s Ratings “We expect legacy assets portation pipelines, while in ect to add a little more than away from BHP and Rio. Nor is pollution problem.
Services for a possible down- such as Gorgon will drive many cases sea channels need 200,000 barrels a day to its it a precursor to a takeover, he In contrast, Vale’s ore typi-
grade. long-term growth and create to be created for LNG tankers production when fully opera- added. “This is about creating cally has a higher iron content
Many experts say Gorgon, shareholder value for decades to arrive at ports and load tional. That compares with a long-term constructive rela- than its competitors, but
now estimated to cost $54 to come,” John Watson, Chev- up. the company’s output of 2.67 tionship between the two com- doesn’t receive enough of a
billion to build versus an ron’s chief executive, said. Gorgon’s construction on million barrels a day in the fi- panies,” Mr. Power said. “This premium for its quality, say
original budget of $37 billion Representatives for Exxon isolated scrubland off Austra- nal three months of 2015. is not any strategy to try and fund managers.
MARKETS DIGEST B8 | TUESDAY’S MARKETS B9 | HEARD ON THE STREET B10 | FINANCE WATCH B10
High-End Slowdown Insurance Unit Under

Takes Toll at Foxtons Fire at Australian Bank
THE PROPERTY REPORT | B6 REGULATION | B7
© 2016 Dow Jones & Company. All Rights Reserved. THE WALL STREET JOURNAL. Wednesday, March 9, 2016 | B5
As of 4 p.m. ET EUR/GBP 0.7749 À 0.35% YEN/DLR ¥112.51 g 0.83% GOLD 1262.10 g 0.09% OIL 36.50 g 3.69% 3-MONTH LIBOR 0.63515% 10-YR TREAS À 20/32 yield 1.832%
A Euro Debt Sale Triggers Anger Easy Money

U.S. companies are issuing more
and more debt in euros, lured by
ultralow borrowing costs on the
Investors complain its balance sheet. gripe and continue buying? The Honeywell declined to com- used mainly by professional in- continent.
“Surely that can’t be right,” answer will say a lot about in- ment. vestors and therefore aren’t
Honeywell didn’t let Mr. Ross, a fund manager at vestors’ tolerance levels as they To be sure, large companies generally subject to the same Euro-denominated debt from
U.S. companies
on about deal talks Henderson Global Investors, search for returns amid rock- frequently discuss M&A op- regulatory requirements as
€60 billion
remembers telling colleagues. bottom interest rates. tions. To take themselves out of markets for securities that are
ahead of bond sale But it was, and within 24 Either way, investors say the capital markets as they do this also sold to retail investors,
hours he had sold his bonds issue has highlighted a legal could present problems. Also, if such as initial public offerings.
BY CHRISTOPHER WHITTALL amid widespread investor an- gray area over how much infor- companies pull out of a debt is- But companies selling debt typ- Full year
ger that Honeywell hadn’t dis- mation companies are obligated sue while it is being marketed, ically publish lengthy prospec- Jan. 1 – March 7
Last month, investor Tom closed an event that would af- to disclose before selling debt that could tip off investors that tuses to provide investors with 40
Ross bought bonds from Hon- fect the value of this recently securities. a deal, or other corporate ac- material information that could
eywell International Inc., one issued debt. “It was disappointing,” said tion, is in the works. affect the value of their securi-
of a growing number of U.S. Honeywell abandoned the Mr. Ross. “Until that news was With M&A volumes so high, ties.
companies issuing debt in Eu- takeover in early March, but public, they should have held investors are aware of the in- These prospectuses are legal
20
rope. the repercussions continue. off printing the [bond] deal.” creased risk that takeovers can documents.
Days later, Mr. Ross was at Some fund managers now Mr. Ross said Honeywell had load debt onto the companies “Typically it’s things you
his desk when a headline made ask whether investors in Eu- given no indication it was look- whose bonds they own. But in- don’t say that hurt investors,
him do a double-take. rope will become more cautious ing at a significant acquisition vestors say they were surprised rather than things you do
Honeywell was proposing to over the increasing number of when he spoke to company offi- by the speed with which Hon- say,” said Apostolos Gkoutzinis, 0
buy rival United Technologies U.S. companies taking advan- cials at their roadshow ahead eywell went from selling bonds head of the European capital
Corp, in an acquisition that tage of the region’s ultralow of the issue. Investors said they to being able to talk publicly markets group at Shearman 2000 ’02 ’04 ’06 ’08 ’10 ’12 ’14 ’16
the company said would add borrowing rates, or if they will couldn’t think of a precedent in about the potential deal. Sterling LLP. Source: Dealogic
around $36 billion of debt to soon get over their Honeywell European bond markets. Corporate bond markets are Please see BONDS page B9 THE WALL STREET JOURNAL.
Olympic Renewal
For London Site
BY ART PATNAUDE “What’s happening in Strat-
ford is very much in its in-
Real-estate investors are fancy,” but development plans
betting London is on track to are “significant,” said Gordon
deliver a rare feat: the lasting Aitchison, director of transac-
revitalization of neighborhoods tions at Legal & General Prop-
around an Olympic park, years erty, the property arm of Legal
after the games ended. & General. “It’s a transforma-
In many cities over the tion of the entire area.”
years, the closing ceremonies Office buildings are a big
have coincided with a slow- component. The asset-manage-
down of economic growth in ment arm of Deutsche Bank
the districts where the games paid £370 million for a 515,000-
took place. square-foot office building
Venues from the 2004 scheduled for completion in
games in Athens have been 2018. The Financial Conduct
abandoned, while many Olym- Authority, the U.K. financial
pic sites from the 2008 games watchdog, has already commit-
in Beijing are in disrepair. Rel- ted to a 20-year lease for
Total amount loaded Gift cards have Counterfeit cards The most popular gift-card types ics from the 1984 Sarajevo Win- around 3,800 of its employees.
onto prepaid cards been growing accounted for during the 2015 shopping season*: ter Olympics have been de- Legal & General, meanwhile,
stroyed or abandoned. The 1976 bought a 265,000-square-foot
in popularity,
49%
Montreal Olympics nearly office building for £246 million
Store-specific cards
especially those Restaurants 34.8% drove the city to financial ruin. that, when completed next year,
$300 billion
that can be used Department stores 34.4% London, by contrast, seems will be occupied by Transport
poised for growth. In Stratford, for London, which runs the
150 Est.
anywhere, also General purpose 22.7% the district that hosted the city’s public transport network.
known as ‘open- of world-wide 2012 Olympics, German lender The building is pre-let for 25
General-purpose
0 loop’ cards. credit-card losses of Coffee shop Deutsche Bank AG and U.K. as-
set manager Legal & General in
years.
The buildings are part of the
’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 $16.31 billion in 2014. cards 20.1% January spent a total of £616 International Quarter, a joint
million ($878.7 million) in two venture between Australian
*Numbers add up to more than 100% because respondents could select more than one answer. separate deals on office build- property firm Lendlease Group
Sources: Mercator Advisory Group; the Nilson Report; National Retail Federation; iStock photo (coffee cup); Cindy Yamanaka/The Orange County Register/Zuma Press (cards) ings currently under construc- and London & Continental
tion. Railways, which manages
Gift Cards Feel Pinch of New Rules

Before the Olympics, Strat- property assets for the U.K. De-
ford and other parts of Lon- partment of Transportation.
don’s East End were among the About one-fifth of the four mil-
poorest areas of the U.K., suf- lion square feet of planned In-
BY ROBIN SIDEL cards with cash or asking that The restrictions are putting load $651 billion on prepaid fering a long-term decline from ternational Quarter office space
they show identification. Oth- a crimp on an increasingly cards this year, up 57% from its industrial past. But years of is now sold. Lendlease expects
Retailers are making it ers have cut back to smaller popular form of plastic, not six years ago, according to booming real-estate markets in to finish development of nine
tougher to buy gift cards, a denominations, put limits on only among gift-givers, but consulting firm Mercator Ad- London, government and pri- other office buildings by
consequence of new credit- repeat purchases or stopped also among shoppers—in visory Group. Nearly half of vate investment in Stratford, around 2025.
card rules that put them on selling certain cards alto- stores and online—looking to that is expected to involve the and improving transportation The Smithsonian in Wash-
the hook for fraud. gether, according to people rack up loyalty points by using “open-loop” cards branded by have supported Olympic plan- ington, D.C., meanwhile, is in
Some merchants are requir- who are familiar with the a credit card. Visa Inc., MasterCard Inc. or ners’ long-term renewal strat- talks to open its first space out-
ing that customers buy the stores’ policies. Americans are expected to Please see CARDS page B9 egy. Please see LONDON page B6
Goldman Banker for 1MDB Can Fintech Pay for Square?

Quit Firm After an Inquiry BY STEVEN RUSSOLILLO
The so-called fintech indus-

try will reach another water-
Almost Full Circle
Square’s share price
resents a tiny sliver of its
overall revenue.
Furthermore, Square’s val-
uation looks rich, especially
BY JUSTIN BAER Mr. Leissner wasn’t linked to the country’s prime minister. shed moment on Wednesday: $14 for a money-losing company.
AND KEN BROWN business that Goldman did for As authorities in five coun- Square Inc.’s first quarterly 13 Analysts expect Square to
the Malaysian fund, and the tries probed the fund, Gold- report as a public company. post a loss of 13 cents a share
The Goldman Sachs Group firm has found nothing wrong man quietly began its own in- Judging by the stock’s 12 in the fourth quarter on reve-
Inc. partner who handled deals with his dealings with the fund, quiry into Mr. Leissner’s role, more-than-40% pop from last nue of $343 million. Mean-
11
for a controversial Malaysian the people said. the people said. month’s low, in- while, the stock fetches a 12-
government investment fund Meanwhile, Mr. Leissner 1MDB didn’t respond to a re- AHEAD vestors have 10 month trailing enterprise-
was suspended and later quit has been subpoenaed by U.S. quest for comment. OF THE high hopes for value-to-sales ratio of 3.85
after bank investigators found investigators probing possible The email review also came TAPE the mobile-pay- 9 times, higher than rivals
he allegedly violated company wrongdoing at the fund, a per- as Goldman resigned from a ments company. Global Payments Inc. and
8
policies, said a person familiar potentially lucrative mining They might Vantiv.
with the matter. deal in Indonesia being led by want to temper some of that 2015 ’16 While Square now trades
Goldman placed Tim Leiss-
Tim Leissner was Mr. Leissner because of the in- enthusiasm. Source: FactSet above its $9 initial public of-
ner, the firm’s Southeast Asia placed on leave in volvement of someone in the Square, known for the THE WALL STREET JOURNAL. fering price, it remains below
chairman, on leave after a re- deal who the bank believed small piece of plastic that $13.07, its close on its first
view of his email found that
January and he could hurt the firm’s reputa- plugs into smartphones to ac- bine aspects of financial ser- trading day. It also is far from
he had allegedly sent an unau- resigned a day later. tion, said one person familiar cept payments, was one of vices and technology. the $15.46 price at which it
thorized reference letter on with the matter. Bank investi- the highest-profile companies For one, Square’s payment- raised money in a private
behalf of an individual to an- gators found that Mr. Leissner to go public last year. toll-taking business has fundraising in 2014, under-
other financial firm in 2015, son familiar with the matter had offered an internship to a Founded and run by Twitter plenty of competition and few scoring the broader rerating
the person said. said. News of the subpoena child of the individual, the Inc. chief Jack Dorsey, trading barriers to entry. PayPal Inc. of valuations many private
The letter also included was earlier reported by person said. has been volatile since its No- is looking at ways in which companies once garnered.
statements that Goldman be- Bloomberg News. The decision to back out of vember debut. its mobile-phone app Venmo An uncertain environment
lieves to be inaccurate, the per- Mr. Leissner was Goldman’s the project irritated Mr. Leiss- Part of this may have to do could do similar functions for plus an uncertain road to
son said. Mr. Leissner was top banker to 1Malaysia Devel- ner, who argued that Goldman with Mr. Dorsey’s dual role as small businesses. Apple Inc. profitability plus an uncertain
placed on leave in January and opment Bhd., a government- was scrutinizing his deals chief of both companies. A is increasing the scope and competitive landscape is the
he resigned a day later, several investment fund now engulfed Please see 1MDB page B7 bigger reason may lie with in- functionality of Apple Pay. kind of equation that doesn’t
people said. His last day was in scandal over its alleged con- vestor difficulty figuring out And Square’s real opportu- add up for Square investors.
Feb. 23, the people said. nection to transfers of funds An executive is leaving BSI, a how to value Square and nity—software-driven busi-
The letter allegedly sent by into the personal accounts of Swiss bank.................................. B7 other companies that com- ness-services products—rep- Email: tape@wsj.com
THE PROPERTY REPORT

New Stage in U.S. Real Estate: Defaults
Commercial-property ing boomtowns in West Texas ner has previously said the
and North Dakota, where capital markets have re-
market shows rising apartment rents have plunged trenched and the timing is un-
signs of weakness; thanks to a growing level of fortunate. The developer has
new supply hitting the market been seen as something of a
pain in oil boomtowns at the same time that low oil canary in the coal mine. He
prices have sapped demand. was among the early, high-
BY ELIOT BROWN A similar effect can be seen profile defaults in 2008, when
in New York, where the condo- he lost control of a $4 billion
For nearly a decade, the 14- minium market aimed at the Las Vegas casino project.
story Houston office building superrich has slowed just as a Meanwhile, loans are be-
KEVIN HAGEN FOR THE WALL STREET JOURNAL

called Northborough Tower wave of towers are hitting the coming harder to secure even
proved a reliable investment market. for safe investments such as
for fund manager Behringer “The for-sale condo busi- well-leased buildings. That is
Harvard, staying fully leased ness has dramatically slowed because broader market vola-
and generating millions in at all price points and in all tility has caused lenders who
profit. neighborhoods,” said Steven sell off their loans via bonds
But now the gleaming Roth, chief executive of Vor- known as commercial-mort-
building is being surrendered nado Realty Trust, during an gage-backed securities to grow
to creditors. Its $21 million earnings call last month. The wary. While the segment made
mortgage came due in Janu- company is building a 950-foot about $100 billion in loans last
ary, and Behringer Harvard condo tower on Central Park year, it has come to a virtual
wasn’t able to find buyers South. halt today, lending executives
willing to pay more than that. Developer Ian Bruce Eichner faces an effort to seize his site in New York’s Harlem section. In turn, lenders have es- said. If that continues, it will
At the same time, its only ten- chewed the sector, leaving de- become more difficult for
ant is leaving and the Houston in areas that were considered values and market direction. manageable.” velopers who paid high prices landlords who took out 10-
office market is reeling from overheated, occurring in small “There’s going to be a market Still, there are several pock- for land unable to pay off their year loans in 2006 to refi-
low oil prices. numbers for now, but stoking correction.” ets of concern. debts. nance today.
“We received no offers fears that more could be on If there is a downturn, few The Northborough Tower is Such is the case for the The pullback might bring
above the debt balance,” said the way. expect it to be severe because one of numerous office build- Bauhaus Group, a developer back business for so-called
Thomas Kennedy, president of This comes as there is a the economy still is creating a ings in which debt is coming that had planned a slim, tall workout specialists, who help
the Behringer Harvard fund growing view that the best healthy level of jobs and lend- due in the Houston area, condo tower on Manhattan’s landlords escape foreclosure
that bought the building for days are in the past for this ing has been far less aggres- where the amount of office East Side but is now fighting by modifying their debt.
$33 million in 2007. property cycle, which bene- sive than in past booms like space vacant or soon to be in court with lenders seeking With more debt coming due
New signs of weakness are fited strongly from low inter- 2007, when highly leveraged available for lease was 23% at to foreclose after the owner and other conditions, defaults
surfacing in the commercial- est rates and demand by developers defaulted as the the end of 2015, up from 17.8% didn’t repay $147 million in are bound to increase, said
property market, ending a global investors from regions market slowed. Developers a year earlier, according to debt. Robert Verrone, a veteran
half-decade run of improve- like China and oil-dependent back then were routinely able real-estate-services firm Another developer, Ian lender whose Iron Hound
ment with steadily climbing economies in the Middle East. to secure debt for more than Savills Studley. With vacancy Bruce Eichner, is facing a sim- Management Co. also helps
values. “We’re at the top of the 90% of the value of a building, expected to rise further still, ilar attempt to seize his site in borrowers modify troubled
Amid global shifts like the market,” said Kenneth Riggs, compared with less than 80% investors are staying away the Harlem neighborhood, mortgages.
sluggish Chinese economy and president of Situs RERC, a today. from the area and lenders where he had planned a 680- “The amount of inbound
a new era of low oil prices, de- real-estate-research firm that Any correction now, Mr. have grown particularly wary. apartment rental project. phone calls has definitely in-
faults on loans are popping up advises investors on property Riggs said, will be “let’s call it, Worse yet are the oil-drill- A spokesman for Mr. Eich- creased,” he said.
Investors Target
Students in U.K.
BY ART PATNAUDE umes just a few years ago,”
Mr. Neale said.
International investors are For U.K. student accommo-
piling into U.K. student hous- dation, the average investment
ing, with a flurry of deals yield has been 5.8% this year,
showing renewed interest in compared with 5.1% on offices,
this small corner of the prop- according to Real Capital Ana-
erty market. lytics data.
Greystar Real Estate Part- The yield on student hous-
ners of the U.S. has agreed to ing is down from 6.4% last
buy a student-housing portfo- year, a reflection of rising
lio for about £600 million prices.
($856 million) from U.K. pri- There were about $2.4 bil-
vate-equity group Round Hill lion of student housing trans-
Capital LLC, a person familiar actions in the U.K. in 2014,
with the deal said. down 18% from 2013, accord-
Last week, the Canada Pen- ing to Real Capital Analytics.
sion Plan Investment Board U.S. firms Greystar, LaSalle In-
spent £1.1 billion to acquire vestment and Goldman Sachs
JEFF J MITCHELL/REUTERS
the U.K.’s Liberty Living, while have been among the biggest
a company headed by Russian buyers in the last two years,
oligarch Mikhail Fridman paid the data show.
£532 million for another Lon- Last Friday, the Canadian
don student-housing portfolio. Pension Plan bought 16,700
Yields on office buildings student rooms in more than
and other traditional property 40 residences across 17 cit-
types have fallen as investors ies—as well as the company The Olympic Stadium at the London 2012 Olympic Games. The area is now growing as more office buildings are being built.
flush with cash and able to that manages the business—
borrow at low rates have
pushed prices higher. That has
some investors looking else-
where for higher returns.
from the Brandeaux Student
Accommodation Fund.
This was the Canadian in-
vestor’s largest-ever real-es-
LONDON East London remain some of
the poorest in Britain.
Regeneration was a major
part of London’s original Olym-
don have made the new office
space being created in Strat-
ford more attractive. TfL, the
tube operator, will pay £36.50 a
should support office develop-
ment, said Jessica Hardman,
head of real-estate transac-
tions, U.K. and Ireland at
Traditionally, real-estate in- tate deal in Europe, and its Continued from page B5 pic bid, said David Goldstone, square foot for their new office Deutsche Asset Management.
vesting “has been focused first there in the alternative side the U.S. in Stratford. Other chief executive at the London space, around half the average For those living nearby,
around the main commercial space, said Andrea Orlandi, London cultural institutions, Legacy Development Corp. Ken London office rent. travel just got cheaper. The
property types of retail, office, head of European real-estate such as the Victoria and Albert Livingstone, the mayor of Lon- Property broker JLL, the London subway network has six
and industrial,” a February re- investments. Museum and University College don from 2000 to 2008, leasing agent for the Interna- zones, with fares rising incre-
port from the Investment For CPP, student accommo- London, are set to take up new “wasn’t interested in sport. He tional Quarter, is currently talk- mentally away from central
Property Forum, a U.K. indus- dation provides “a noticeable spaces there. was interested in regenerating ing to major technology firms, Zone 1. In January, Stratford
try body, said. pickup in the yield” offered by And the Olympic facilities an area of massive depriva- banks and other government and nine other East London
But investors’ hunt for office investments, Mr. Orlandi continue to draw crowds. The tion,” Mr. Goldstone said. agencies looking to cut costs, stations changed from Zone 3
higher long-term returns is said. aquatic center where Michael “I remember talking to the said Matthew Mycock, a direc- to the newly designated Zone
producing “significant changes The opportunity to buy the Phelps won four gold medals Sydney organizers” about the tor at JLL. Office rents for the 2/3.
in the market,” said Jon Neale, management company and its offers swimming lessons to games it hosted in 2000, Mr. next phase of construction in Travelers heading into Lon-
head of U.K. research at bro- team means, “we can look to 1,500 children each week. The Goldstone said. “It was only the International Quarter could don will pay the lower Zone 2
ker JLL. The fastest-growing buy more assets” in a sector Olympic Stadium hosted Rugby during the games that they be around £45 a square foot, fare, while those traveling out
sectors are now those deemed “that can, and will, consolidate World Cup games last autumn. started to ask, ‘What are we which is still below another of London will pay the Zone 3
“alternatives”—like student- in the future,” he said. The band AC/DC is performing going to do about the legacy?’ ” East London business district, fare. The change was an effort
housing, hotels, health care In the Greystar deal Mon- there in June. he said. Canary Wharf, he said. “to recognize the shifting eco-
and privately rented residen- day, Round Hill is selling three In the 1800s, industrializa- Development plans in Strat- Another boon for Stratford nomic map of London towards
tial real estate—£11.6 billion of London residences with 2,375 tion turned London’s East End ford have coincided with a Lon- development: London has been east London,” a statement from
which traded in 2014, a 33% beds, a portfolio it bought for from farmland into a busy man- don real-estate boom. Around gradually migrating eastward TfL said.
increase from 2013, JLL fig- $415 million from Blackstone ufacturing hub with a reputa- $42.5 billion was invested in for decades. The recent housing Stratford should continue to
ures show. Group in 2012. Round Hill will tion for slums and crime. Trade London commercial property boom, which has seen prices benefit from the influx of peo-
It remains a small part of retain the student-housing along the River Lea served the last year, only slightly less that vault to record highs, has ple, culture and jobs, and lower
the £65 billion of U.K. real es- brand Nido, its management growing manufacturing base. the $45.1 billion invested in all helped usher home buyers into office rents, Ms. Hardman said.
tate traded last year, but alter- business and one student resi- But the industrial area was of Germany, according to Real the less-expensive eastern ar- “The Olympic effect was im-
natives “accounted for only a dence in London it bought ear- devastated by heavy bombing Capital Analytics. eas. The growing population portant,” she said. “Otherwise
few percentage points of vol- lier this year. during World War II. Areas of Years of rising prices in Lon- wanting to live near work it’s just another office park.”
Slowing in High End Hits a British Broker

BY ART PATNAUDE ter the financial crisis. growth across all segments, and plans to open seven more
AND OLGA COTAGA “Activity in central London with sales up 3.4%, leases up this year.
property markets has been es- 2.3% and mortgage brokering Stock-market analysts were
LONDON—The demise of pecially constrained due to up 32%. cautious about performance
the high-end London housing strong recent price growth Shares in Foxtons were up going forward. Issues facing
boom pushed down profit last and stamp duty changes, 1.1% Tuesday afternoon at 160 the firm include its premium
year for U.K. real-estate agent which have significantly in- pence. The stock is down more fees and Britain’s vote on Eu-
Foxtons Group PLC, one of creased the cost of moving than 20% from a year ago and ropean Union membership in
MATTHEW LLOYD/BLOOMBERG NEWS
the biggest property brokers home,” said Nic Budden, chief about 58% from March 2014. June.
in the capital. executive, in a statement. The company dropped out of “Whilst we acknowledge
Foxtons on Tuesday said its Foxtons said while sales are the FTSE 250 index in Decem- Foxtons has the strongest
2015 pretax profit fell 2.6% to expected to grow this year, the ber because of the deep share- brand profile among the U.K.
£41 million ($58.5 million). “recovery in volumes will be price declines. Estate Agent sector, we con-
Weaker profit coincided affected by a low level of As prices for luxury homes tinue to have concerns regard-
with a drop in deal making in stock.” in central London fall, Foxtons ing London end market dy-
the market for luxury London The company reported a is expanding outward. In 2015 namics, which we suggest may
homes, which had become one 4.1% increase in revenue to the firm opened seven curtail volumes,” said Citi ana-
of the hottest global assets af- £149.8 million, and revenue branches outside the center lysts in a note to investors. Foxtons is one of the biggest real-estate brokers in London.
MONEY & INVESTING
Lender’s Insurance Unit Is Under Fire

Regulator to probe monwealth Bank’s CommInsure port would lead to a judicial
business in which doctors were royal commission, which is
claims regarding arm pressured by CommInsure em- Australia’s highest form of in-
of Commonwealth ployees to change their assess- vestigation.
ments to avoid life-insurance In 2015, CommInsure paid
Bank of Australia payouts on claims made by ter- more than 850 million Austra-
minally ill clients. lian dollars (US$635 million)
Australia’s securities regu- A spokeswoman said Com- in life and income-protection
lator will investigate claims monwealth Bank wasn’t able payments to 22,000 people
that the insurance arm of one to respond to the specific alle- and their families, according
of the country’s largest banks gations. to a company statement.
tried to avoid payments to In a statement issued on This isn’t the first time that
Saturday, Commonwealth Bank financial practices at Com-
By Robb M. Stewart Chief Executive Ian Narev ex- monwealth Bank have come
in Melbourne and pressed disappointment over under scrutiny. In 2014, Com-
Rob Taylor in Canberra how the claims were handled, monwealth Bank offered more
although he didn’t comment than 400,000 customers a free
sick and dying people, allega- directly on the allegations that review of recommendations
tions that have ignited politi- payments were intentionally given by its financial planners
cal anger and could lead to delayed or denied. after Mr. Narev apologized for
DAVID GRAY/REUTERS
scrutiny of the entire insur- He said the company had losses that clients faced be-
ance industry. failed to meet its responsibil- cause of what he described as
The Australian Securities ity to deal with claims as sen- “poor advice provided by
and Investments Commission sitively, quickly and fairly as some of our advisers” between
confirmed Tuesday it would possible regarding customers 2003 and 2012.
examine media allegations who had been the subject of Ian Narev, the bank’s CEO, has expressed disappointment over how claims were handled. At that time, a parliamen-
that the Sydney-based Com- the media report. tary committee recommended
monwealth Bank of Australia “We focused too much on was possible that among Com- clear they intended to put a ernment had asked the securi- that a royal commission be es-
Ltd. sought in several in- process rather than people,” mInsure’s four million custom- spotlight on the industry. ties commission for an urgent tablished to examine the
stances to deny or reduce the he said, adding that he would ers there might be other in- “We are absolutely shocked report to look at whether the bank’s actions as well as
payout on insurance claims. personally write to the cus- stances similar to those by the allegations,” Assistant actions described in the media whether ASIC, the securities
The allegations, made in a tomers concerned to apolo- highlighted in the media re- Treasurer Kelly O’Dwyer told report were isolated instances regulator, should have done
joint report by the Australian gize. “We focused on details port, but expressed the belief state radio. “They are deeply at CommInsure or reflected in- more to protect consumers of
Broadcasting Corp., the coun- which caused delays at critical that they weren’t the norm. shocking, they are deeply con- dustrywide practice. financial services. But the fed-
try’s public broadcaster, and times for customers that Government officials re- cerning and they need to be New South Wales Sen. John eral government opted against
Fairfax Media in recent days needed help.” acted strongly after the report properly investigated.” Williams said he expected that establishing such a commis-
described a culture at Com- Mr. Narev also said that it was broadcast and made it Ms. O’Dwyer said the gov- political unease over the re- sion then.
Shopping-Center REITs Thriving Asia Executive

BY LIAM PLEVEN
Downtown may be trendy,

Council of Shopping Centers, a
trade group. By comparison,
the amount of space grew by Is Leaving BSI
ANGEL VALENTIN FOR THE WALL STREET JOURNAL
but landlords are thriving with 3.3% in 2006 alone, before the
properties often seen as subur- recession hit. BY JOHN LETZING ruption-related investigation
ban eyesores: strip malls and “New supply is at histori- AND JAKE MAXWELL WATTS in Singapore and other juris-
shopping centers. cally low levels,” said Hap dictions, including Malaysia
The main reason: safety. Stein, CEO of Regency Centers SINGAPORE—The head of and Switzerland. BSI hasn’t
While economic uncertainty Corp., which owns more than Asian operations for Swiss been accused of wrongdoing in
clouds the outlook for many 300 properties from Massachu- bank BSI SA, Hanspeter Brun- those investigations.
businesses, owners of open-air setts to California. Mr. Stein ner, has “decided to retire,” Switzerland’s attorney gen-
retail space have gotten a rela- said the firm’s properties are the bank said on Tuesday. eral said in January that his
tive boost because their tenants about 96% occupied and rents The company didn’t give a office’s investigation into
often include grocers, discount- grew by more than 9% on aver- more specific reason for the transactions involving 1MDB
clothing stores and pharma- age in 2015. departure. And the 64 year-old showed $4 billion may have
cies—stores that consumers Developers also are wary of Mr. Brunner, who is a BSI been misappropriated from
shop at in good times and bad. Strip shopping centers like this one in North Miami, Fla., are doing building new shopping centers board member based in Singa- Malaysian state-owned compa-
“They’ll cut back on food a well in a tepid U.S. economy. because new homes aren’t be- pore, didn’t respond to a re- nies.
little bit. They’ll buy hamburger ing built at a rapid clip in sub- quest for comment.
instead of filet mignon,” said lions of dollars’ worth of strip On Sunday, analysts at Ever- urban areas where this kind of The Swiss bank on Tuesday
Drew Alexander, chief executive malls and shopping centers re- core ISI downgraded the shop- retail space thrives, said Paul said Mr. Brunner’s responsibil-
One of BSI’s major
of Weingarten Realty Inves- flect the favorable conditions. ping-center sector to “hold” be- Morgan, an analyst at Canac- ities will be handed over to its clients is the state
tors, a Houston-based shop- In many cases, they fared bet- cause the companies’ stock- cord Genuity. Real estate in head of Private Banking Asia,
ping-center landlord whose ma- ter than the broader market market valuations “seem a bit densely populated urban areas Raj Sriram.
investment fund
jor tenants include grocers when fears of a recession rat- stretched.” is in fashion. BSI, which is based in the 1MDB.
such as Kroger Co. and Whole tled investors early this year Nonetheless, “from a funda- To take the risk of building Italian-speaking region of
Foods Market Inc. “But the im- and then logged gains as the mental standpoint,” they said in a slow-growth economy, de- Switzerland, historically ca-
portant thing is they still come market rebounded in recent in a report, the outlook for the velopers and lenders generally tered to Italian clients. BSI re- 1MDB said at the time that
to the center.” weeks. sector is positive “due to the need a commitment from an lied on Mr. Brunner to aid its it was prepared to cooperate
At the same time, the tepid Office landlords have gotten limited supply and the ability anchor tenant to occupy the expansion in Asia, after he with authorities, and it has de-
economy is limiting construc- hit in 2016 by investor con- to push rents.” new space, Mr. Morgan said. joined the bank from the Sing- nied wrongdoing. A represen-
tion of new space, according to cerns about weak tenant de- Regional malls get much of The scarcity of new space apore office of RBS Coutts in tative for 1MDB on Tuesday
real-estate executives and ana- mand if the economy slows, the attention from shoppers can put owners of existing 2009. didn’t respond to a request for
lysts. As a result, retailers are while apartment REITs have and retailers, but open-air properties in desirable loca- In early 2010, BSI said Mr. comment.
showing steady demand for suffered from worries that con- shopping centers make up a far tions in a relatively strong po- Brunner’s appointment was an Last year, Singapore police
many existing properties, and struction of new multifamily greater share of America’s total sition if vacancies arise. important part of its increas- told Malaysian authorities in a
occupancy is running high, they buildings will lead to a glut. retail square footage, Mr. White Conor Flynn, CEO of Kimco ing presence in Asia. The fol- letter reviewed by The Wall
said. By contrast, many shopping- said. They can range from small Realty Corp., one of the largest lowing year, BSI announced Street Journal about more
“There’s an argument that center REITs were up roughly properties with two or three lo- shopping-center REITs, said that its number of employees than $500 million in transfers
this good-enough environment 2% to 4% this year through cal merchants to large proper- there is “a waiting list” to get in Asia had increased to 280 made between 2011 and 2013
is ideal,” said Jason White, a Monday’s close. The S&P 500 ties occupied by national into the firm’s properties and from 50 over the course of a from an entity tied to 1MDB
senior analyst at Green Street was down slightly more than brands. he said anchor stores are more year and a half. into a BSI account. 1MDB has
Advisors, a real-estate research 2% over the same period, and New space at such centers than 98% occupied. When va- One of BSI’s major clients— acknowledged that it holds a
firm. the MSCI US REIT Index, which has been growing less than 1% cancies do occur, the company Malaysian state investment BSI account in Singapore. BSI
Share prices of real-estate tracks owners of various types annually in recent years, ac- can often command a higher fund 1Malaysia Development has declined to comment on
investment trusts that own bil- of properties, is down 0.1%. cording to the International rent, Mr. Flynn said. Bhd., or 1MDB—is under cor- the matter.
1MDB bawa and is one of the world’s

biggest copper mines. It is par-
tially owned by the govern-
ment.
stop scrutinizing the deposits,
a notion echoed by Mr. Najib.
Mr. Leissner’s departure
from Goldman despite his com-
ner’s departure with the U.S.
securities industry’s self-regu-
lating arm, Finra, people famil-
iar with the matter said.
Continued from page B5 Mr. Leissner arrived in mercial success underlines Wall One person familiar with the
more heavily because of his in- Southeast Asia when it was Street’s heightened concerns matter said Mr. Leissner left
volvement in the 1MDB con- considered by many to be a fi- over the risks posed by employ- Goldman quietly in January and
troversy, people familiar with nancial backwater and helped ees operating far from the by last month had ceased com-
the matter said. He was also the bank forge key relation- watchful gaze of compliance of- municating with some of his
frustrated with Goldman for ships. When Malaysia estab- ficers and lawyers back at their closest colleagues in Asia.
failing to support his request lished 1MDB in 2009 to spur headquarters. Those fears have Goldman’s investment-bank-
to move to Los Angeles. He is economic development, Mr. deepened with each regulatory ing executives didn’t note his
married to fashion designer Leissner became a key adviser probe into allegations of money resignation with a memoran-
Kimora Lee Simmons, who is to the fund. laundering, corruption and im- dum to their employees, a step
based there. The Wall Street Journal re- proper ties to government em- normally taken with partners
The departure of its star ported this month that global ployees or their children. who leave the firm in good
PRESLEY ANN/PATRICK MCMULLAN/ASSOCIATED PRESS
banker in the region and the investigators believe $1 billion Offering internships to rela- standing, according to a person
resignation from the mining that originated with 1MDB was tives of clients or potential cli- familiar with the matter.
deal are blows to Goldman’s lu- transferred to personal ac- ents had been common busi- After leaving Goldman, Mr.
crative business in Southeast counts of Najib Razak, Malay- ness practice for big banks in Leissner took on an advisory
Asia, which Mr. Leissner built sia’s prime minister. In October, Asia. But the practice has come role with Wildcat Capital Man-
over more than a decade. the Journal reported that U.S. under scrutiny for possible vio- agement, the family office of
Goldman had been helping a investigators had begun to ex- lations of U.S. bribery laws and private-equity giant David Bon-
group of investors secure fi- amine Goldman’s dealings with Goldman is among several in- derman. Mr. Leissner is close
nancing in their potential bid the fund. ternational banks being investi- with executives in Asia at TPG
for a controlling stake of an In- Investigators in two of the gated for hiring relatives of top Capital, the firm founded by
donesian copper-mining opera- countries probing 1MDB, while Chinese government officials, Mr. Bonderman. A person fa-
tion when the firm’s executives agreeing most of the money according to regulatory filings. miliar with the matter said Mr.
grew concerned about an ad- transferred to Mr. Najib’s ac- Goldman officials have declined Leissner was no longer an ad-
viser to one member of the count ultimately was returned, to comment on the probes. viser to his firm.
group. The person’s name ap- Goldman’s Tim Leissner and his wife, Kimora Lee Simmons. believe the money originated Goldman is expected to dis- —Tom Wright
peared on emails involving the with 1MDB, according to people close some details on Mr. Leiss- contributed to this article.
deal, which were seen by Gold- have generated more than that controls the copper-mining familiar with the probes.
man investigators looking at $50 million in revenue for the operations, declined to com- Mr. Najib has denied wrong-
ADVERTISEMENT
Mr. Leissner’s activities, people bank, making it one of the big- ment. At a Feb. 29 mining con- doing or taking any money for
familiar with the matter said.
The person involved in the
deal also asked Mr. Leissner
gest transactions in the region
since three big bond offerings
by the Malaysian fund in 2012
ference in Florida, Newmont
Chief Executive Gary Goldberg
said that “Newmont and our
personal gain. The 1MDB fund
said in a statement on Feb. 19
that it “has not paid any funds
Business Real Estate & Auctions
whether Goldman could hire his and 2013. Those transactions partner, Sumitomo, are in dis- to the personal accounts of the
child as an intern, and Mr. generated hundreds of millions cussions with certain interested Prime Minister.” Malaysia’s at- CARIBBEAN
Notable Commercial
Leissner agreed, a person fa- of dollars in revenue for Gold- parties” over the potential sale torney general said the money
miliar with the matter said. man. of the mine. that went into Mr. Najib’s ac- Properties. Saint Lucia
The presence of the person, The bidders hired Credit Su- “But to date,” he added, count was a legal donation Commercial Listings
For Sale By Receiver
whose identity couldn’t be isse Group AG after Goldman “none have secured fully com- from a member of Saudi Ara- Every Wednesday.
learned, caused Goldman to withdrew, the people said. The mitted financing or deal bia’s royal family, and most Prime Development Lots
List Your Property Today.
pull out of the deal. deal is still being negotiated. A terms.” Newmont said the was returned. The attorney At Five Star Resort Property
Call +44 (0) 207 572 2123
The deal, which included fi- spokesman for Newmont Min- mine, called Batu Hijau, is lo- general said there was nothing Contact: Jeffcoyne@msn.com
nancing and hedging, would ing Corp., the U.S. company cated on the island of Sum- improper and it was time to
MARKETS DIGEST
Nikkei 225 Index STOXX 600 Index S&P 500 Index Data as of 4 p.m. New York time
Last Year ago
16783.15 t 128.17, or 0.76% Year-to-date t 11.82% 337.48 t 3.45, or 1.01% Year-to-date t 7.74% 1979.26 t 22.50, or 1.12% Trailing P/E ratio * 23.08 20.50
High, low, open and close for each 52-wk high/low20868.03 14952.61 High, low, open and close for each 52-wk high/low 414.06 303.58 High, low, open and close for each P/E estimate * 16.55 17.65
trading day of the past three months. All-time high 38915.87 12/29/89 trading day of the past three months. All-time high 414.06 4/15/15 trading day of the past three months. Dividend yield 2.27 1.97
All-time high: 2130.82, 05/21/15
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19000 380 2050
65-day moving average

18000 360 2000
Session high 17000 340 1950

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t
Session open Close

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t
Session low 15000 300 1850
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Dec. Jan. Feb. Mar. Dec. Jan. Feb. Mar. Dec. Jan. Feb. Mar.
International Stock Indexes Data as of 4 p.m. New York time Global government bonds
Latest 52-Week Range YTD Latest, month-ago and year-ago yields and spreads over or under U.S. Treasurys on benchmark two-year
Region/Country Index Close NetChg % chg Low Close High % chg and 10-year government bonds around the world. Data as of 3 p.m. ET
World The Global Dow 2243.26 –19.65 –0.87 2033.03 • 2643.78 –4.0 Country/ Spread Over Treasurys, in basis points Yield
MSCI EAFE 1613.10 –9.56 –0.59 1471.88 • 1956.39 –6.0 Coupon Maturity, in years Yield Latest Previous Month Ago Year ago Previous Month ago Year ago
MSCI EM USD 788.19 –6.99 –0.88 691.21 • 1067.74 –0.8 5.500 Australia 2 1.967 108.5 106.2 121.2 119.8 1.967 1.882 1.925
4.250 10 2.566 73.4 68.3 84.8 40.4 2.592 2.597 2.649
Americas DJ Americas 473.93 –6.04 –1.26 433.38 • 525.25 –2.7
3.500 Belgium 2 -132.9 -135.2 -110.9 -86.8 -0.446 -0.439 -0.141
-0.447
Brazil Sao Paulo Bovespa 49120.84 –125.26 –0.25 37046.07 • 58574.79 13.3
0.800 10 0.481 -135.2 -137.9 -117.0 -171.7 0.530 0.579 0.529
Canada S&P/TSX Comp 13312.56 –71.04 –0.53 11531.22 • 15524.75 2.3
4.250 France 2 -0.442 -132.4 -134.1 -109.3 -85.3 -0.436 -0.423 -0.126
Mexico IPC All-Share 44514.20 –452.96 –1.01 39256.58 • 46078.07 3.6
1.000 10 0.493 -133.9 -135.9 -114.9 -154.6 0.550 0.600 0.699
Chile Santiago IPSA 3042.73 –13.91 –0.45 2730.24 • 3361.36 3.4
0.500 Germany 2 -0.529 -141.1 -141.7 -117.5 -92.7 -0.511 -0.505 -0.200
U.S. DJIA 16964.10 –109.85 –0.64 15370.33 • 18351.36 –2.6
0.500 10 0.185 -164.8 -168.3 -152.9 -189.4 0.225 0.220 0.351
Nasdaq Composite 4648.82 –59.43 –1.26 4209.76 • 5231.94 –7.2
4.500 Italy 2 -0.058 -94.0 -94.8 -59.8 -54.7 -0.042 0.073 0.181
S&P 500 1979.26 –22.50 –1.12 1810.10 • 2134.72 –3.2
2.000 10 1.420 -41.2 -44.5 -4.8 -92.9 1.464 1.701 1.316
CBOE Volatility 18.76 1.41 8.13 10.88 • 53.29 3.0
0.100 Japan 2 -0.224 -110.6 -111.4 -86.3 -71.8 -0.208 -0.193 0.009
EMEA Stoxx Europe 600 337.48 –3.45 –1.01 303.58 • 414.06 –7.7 0.100 10 -0.094 -192.6 -195.5 -171.2 -186.0 -0.047 0.037 0.385
Stoxx Europe 50 2832.35 –22.95 –0.80 2556.96 • 3602.76 –8.6 0.500 Netherlands 2 -0.501 -138.3 -141.3 -114.8 -86.6 -0.507 -0.478 -0.139
Austria ATX 2236.97 4.25 0.19 1929.73 • 2695.57 –6.7 0.250 10 0.305 -152.7 -155.2 -137.0 -179.5 0.356 0.379 0.450
Belgium Bel-20 3371.19 –27.03 –0.80 3117.61 • 3910.33 –8.9 4.350 Portugal 2 0.275 -60.7 -69.9 -46.7 -54.1 0.207 0.203 0.187
France CAC 40 4404.02 –38.27 –0.86 3892.46 • 5283.71 –5.0 2.875 10 2.968 113.6 104.2 143.7 -49.3 2.951 3.186 1.752
Germany DAX 9692.82 –86.11 –0.88 8699.29 • 12390.75 –9.8 0.500 Spain 2 -0.049 -93.1 -94.4 -64.1 -58.8 -0.039 0.029 0.140
Greece ATG 563.67 4.23 0.76 420.82 • 857.92 –10.7 2.150 10 1.560 -27.3 -32.6 1.0 -95.9 1.582 1.759 1.286
Hungary BUX 25255.40 344.09 1.38 18329.36 • 25255.40 5.6 3.750 Sweden 2 -0.619 -150.1 -151.1 -124.9 -86.4 -0.605 -0.579 -0.136
Israel Tel Aviv 1460.48 3.00 0.21 1383.34 • 1728.89 –4.5 2.500 10 0.488 -134.4 -136.8 -127.5 -141.5 0.540 0.475 0.831
Italy FTSE MIB 18017.56 –41.71 –0.23 15773.00 • 24157.39 –15.9 1.000 U.K. 2 0.383 -49.9 -49.3 -35.8 -32.3 0.413 0.313 0.404
Netherlands AEX 432.89 –3.11 –0.71 378.53 • 510.55 –2.0 2.000 10 1.385 -44.7 -42.6 -33.4 -27.0 1.482 1.415 1.975
Poland WIG 46534.99 –308.49 –0.66 41747.01 • 57460.44 0.1 0.750 U.S. 2 0.882 ... ... ... ... 0.906 0.670 0.727
Russia RTS Index 839.23 … Closed 607.14 • 1092.52 10.9 1.625 10 1.832 ... ... ... ... 1.908 1.749 2.245
Spain IBEX 35 8740.30 –46.50 –0.53 7746.30 • 11884.60 –8.4
Sweden SX All Share 481.88 –3.20 –0.66 432.78 • 564.90 –4.6 Commodities Prices of futures contracts with the most open interest 3:30 p.m. New York time
Switzerland Swiss Market 7971.15 –47.98 –0.60 7425.05 • 9537.90 –9.6 EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; ICE-US: ICE Futures U.S.; MDEX: Bursa Malaysia
South Africa Johannesburg All Share 52247.84 –425.95 –0.81 45975.78 • 55355.12 3.1 Derivatives Berhad; TCE: Tokyo Commodity Exchange; COMEX: Commodity Exchange; LME: London Metal Exchange;
NYMEX: New York Mercantile Exchange; ICE-EU: ICE Futures Europe. *Data as of 3/7/2016
Turkey BIST 100 77682.88 199.03 0.26 68230.47 • 88651.88 8.3
One-Day Change Year Year
U.K. FTSE 100 6125.44 –56.96 –0.92 5499.51 • 7122.74 –1.9 Commodity Exchange Last price Net Percentage high low
360.00 1.00 0.28% 378.25 354.25
Asia-Pacific DJ Asia-Pacific TSM 1320.40 –8.14 –0.61 1188.42 • 1621.10 –5.0 Corn (cents/bu.) CBOT
Soybeans (cents/bu.) 884.75 3.00 0.34 890.50 856.00
Australia S&P/ASX 200 5108.00 –34.80 –0.68 4765.30 • 5982.70 –3.5
Wheat (cents/bu.)
CBOT
CBOT 464.75 2.00 0.43 493.50 442.25
China Shanghai Composite 2901.39 4.05 0.14 2655.66 • 5166.35 –18.0
Live cattle (cents/lb.) CME 137.200 1.250 0.92 138.550 127.150
Hong Kong Hang Seng 20011.58 –148.14 –0.73 18319.58 • 28442.75 –8.7
Cocoa ($/ton) ICE-US 2,976 -34 -1.13% 3,215 2,738
India S&P BSE Sensex 24659.23 12.75 0.05 22951.83 • 29044.44 –5.6
Coffee (cents/lb.) ICE-US 121.65 0.75 0.62 128.25 113.35
Japan Nikkei Stock Avg 16783.15 –128.17 –0.76 14952.61 • 20868.03 –11.8
Sugar (cents/lb.) ICE-US 14.87 0.21 1.43 14.93 12.61
Singapore Straits Times 2778.77 –44.74 –1.58 2532.70 • 3539.95 –3.6
Cotton (cents/lb.) ICE-US 56.94 -0.44 -0.77 64.30 54.53
South Korea Kospi 1946.12 –11.75 –0.60 1829.81 • 2173.41 –0.8 Robusta coffee ($/ton) ICE-EU 1410.00 16.00 1.15 1,568.00 1,342.00
Taiwan Weighted 8664.31 4.76 0.05 7410.34 • 9973.12 3.9
Copper ($/lb.) COMEX 2.2175 -0.0660 -2.89 2.3040 1.9440
Source: SIX Financial Information;WSJ Market Data Group Gold ($/troy oz.) COMEX 1263.40 -0.60 -0.05 1,280.70 1,061.90
Silver ($/troy oz.) COMEX 15.415 -0.218 -1.39 16.005 13.760
Currencies London close on March 8 Aluminum ($/mt)* LME 1,586.50 14.00 0.89 1,588.00 1,451.50
Tin ($/mt)* LME 17,225.00 375.00 2.23 17,225.00 13,225.00
Yen, euro vs. dollar; dollar vs. major U.S. trading partners US$vs,
Tue YTDchg Copper ($/mt)* LME 4,989.50 79.50 1.62 4,989.50 4,320.50
8% Country/currency in US$ per US$ (%) Lead ($/mt)* LME 1,888.00 41.00 2.22 1,888.00 1,598.00
6 Euro
s
WSJ Dollar index Europe Zinc ($/mt)* LME 1,839.00 -4.00 -0.22 1,843.00 1,467.00
4 s
Bulgaria lev 0.5642 1.7724 –1.5 Nickel ($/mt)* LME 9,400.00 345.00 3.81 9,400.00 7,750.00
2
Croatia kuna 0.1457 6.863 –2.1 Rubber (Y.01/ton) TCE 175.20 -2.30 -1.30 180.00 154.10
0
Euro zone euro 1.1032 0.9065 –1.6
–2 Palm oil (MYR/mt) MDEX 2529.00 -8.00 -0.32 2,653.00 2,425.00
Czech Rep. koruna-b 0.0408 24.516 –1.5
–4 s
Denmark krone 0.1478 6.7652 –1.6 Crude oil ($/bbl.) NYMEX 36.23 -1.67 -4.41 40.50 28.74
–6 Yen
Hungary forint 0.003558 281.03 –3.2 NY Harbor ULSD ($/gal.) NYMEX 1.1976 -0.0249 -2.04 1.2425 0.8750
–8 Iceland krona 0.007775 128.62 –1.2
–10 RBOB gasoline ($/gal.) NYMEX 1.3819 -0.0108 -0.78 1.5695 1.1253
Norway krone 0.1171 8.5372 –3.5
0.2552 3.9189 –0.1
Natural gas ($/mmBtu) NYMEX 1.717 0.027 1.60 2.5120 1.6110
2015 2016 Poland zloty
Russia ruble-d 0.01373 72.859 1.3 Brent crude ($/bbl.) ICE-EU 39.43 -1.41 -3.45 41.48 28.58
US$vs, US$vs,
YTDchg YTDchg Sweden krona 0.1180 8.4760 0.4 Gas oil ($/ton) ICE-EU 359.75 -0.50 -0.14 374.00 260.25
Tue Tue
Country/currency in US$ per US$ (%) Country/currency in US$ per US$ (%) Switzerland franc 1.0067 0.9933 –0.9
Turkey lira 0.3436 2.9103 –0.3 Sources: SIX Financial Information; WSJ Market Data Group
Americas Hong Kong dollar 0.1287 7.7675 0.2
Ukraine hryvnia 0.0381 26.2220 9.3
Argentina peso-a 0.0648 15.4370 19.3
India rupee
Indonesia rupiah
0.0149
0.0000758
67.3085 1.7
13192 –4.7
U.K. pound 1.4238 0.7023 3.5 Cross rates London close on Mar 8
Brazil real 0.2657 3.7643 –5.0 Middle East/Africa
Japan yen 0.008888 112.51 –6.5
Canada dollar 0.7475 1.3378 –3.3 USD GBP CHF JPY HKD EUR CDN AUD
Kazakhstan tenge 0.002894 345.60 2.0 Bahrain dinar 2.6529 0.3770 –0.04
Chile peso 0.001466 681.90 –3.8 Australia 1.3408 1.9092 1.3501 0.0119 0.1726 1.4792 1.0027 ...
Macau pataca 0.1250 8.0031 –0.01 Egypt pound-a 0.1277 7.8320 0.03
Colombia peso 0.0003139 3185.89 0.4 Canada 1.3378 1.9045 1.3468 0.0119 0.1722 1.4753 ... 0.9973
Malaysia ringgit-c 0.2424 4.1261 –4.1 Israel shekel 0.2561 3.9040 0.3
Ecuador US dollar-f 1 1 unch
New Zealand dollar 0.6778 1.4754 0.8 Kuwait dinar 3.3278 0.3005 –1.0 Euro 0.9065 1.2906 0.9126 0.0081 0.1167 ... 0.6778 0.6759
Mexico peso-a 0.0558 17.9249 4.2
Pakistan rupee 0.0095 104.765 –0.1 Oman sul rial 2.5978 0.3849 –0.01 Hong Kong 7.7675 11.0593 7.8206 0.0690 ... 8.5690 5.8064 5.7914
Peru sol 0.2896 3.4532 1.1
Philippines peso 0.0213 46.953 0.2 Qatar rial 0.2746 3.641 –0.03 Japan 112.5130 160.1900 113.2700 ... 14.4850 124.1100 84.1188 83.9100
Uruguay peso-e 0.0311 32.190 7.6
Singapore dollar 0.7232 1.3828 –2.5 Saudi Arabia riyal 0.2667 3.7502 –0.1 0.9933 1.4144 ... 0.0088 0.1279 1.0958 0.7425 0.7407
Venezuela bolivar 0.158595 6.31 0.005 Switzerland
South Korea won 0.0008282 1207.45 2.7 South Africa rand 0.0650 15.3916 –0.5
U.K. 0.7023 ... 0.7070 0.0062 0.0904 0.7749 0.5251 0.5238
Asia-Pacific Sri Lanka rupee 0.0069008 144.91 0.5 Close Net Chg % Chg YTD % Chg
0.7458 1.3408 –2.3 Taiwan dollar 0.03047 32.814 –0.3 U.S. ... 1.4238 1.0067 0.0089 0.1287 1.1032 0.7475 0.7458
Australia dollar WSJ Dollar Index 88.60 –0.05 –0.05 –1.75
China yuan 0.1537 6.5054 0.2 Thailand baht 0.02827 35.370 –1.8 Sources: Tullett Prebon, WSJ Market Data Group Source: Tullett Prebon
Key Rates Top Stock Listings 4 p.m. New York time

Latest 52 wks ago % YTD% % YTD% % YTD%
Libor Cur Stock Sym Close Chg Chg Cur Stock Sym Close Chg Chg Cur Stock Sym Close Chg Chg Asia Titans 50
One month 0.44185% 0.17790% ¥ TakedaPharm 4502 5447.00 -0.67 -10.19 £ RioTinto RIO 2026.00 -9.43 2.35 Last: 126.38 t 0.78, or 0.61% YTD t 7.3%
Three month 0.63515 0.26770 Asia Titans HK$ TencentHoldings 0700 146.30 -0.14 -4.19 CHF RocheHldgctf ROG 250.80 -0.40 -9.26
150
Six month 0.89770 0.40420 HK$ AIAGroup 1299 41.40 -0.72 -11.16 ¥ TokioMarineHldg 8766 3955.00 -1.42 -16.07 £ RoyDtchShell A RDSA 1659.00 -0.90 8.72
One year 1.20700 0.71085 ¥ AstellasPharma 4503 1568.50 -0.85 -9.41 ¥ ToyotaMtr 7203 5990.00 -1.80 -20.01 € SAP SAP 69.38 -0.27 -5.45 50–day 140
24.98
moving average
Euro Libor AU$ AustNZBk ANZ -1.96 -10.56 AU$ Wesfarmers WES 40.86 0.84 -1.80 € Sanofi SAN 72.46 0.14 -7.81
130
One month -0.28857% -0.00714% AU$ BHP BHP 18.21 -1.83 1.96 AU$ WestpacBanking WBC 31.81 -0.97 -5.21 € SchneiderElectric SU 56.01 -1.23 6.56 t
Three month -0.23929 0.02143 HK$ BankofChina 3988 3.10 -1.59 -10.40 AU$ Woolworths WOW 23.00 -0.09 -6.12 € Siemens SIE 88.70 -0.65 -1.31 High 120
Six month -0.13514 0.07929 HK$ CKHutchison 0001 97.10 -1.07 -6.99 € Telefonica TEF 9.80 -0.39 -4.21 Close 110
One year -0.02329 0.20643 HK$ CNOOC 0883 9.26 0.22 14.75 Stoxx 50 € Total FP 42.04 -1.80 1.88 Low 100
Euribor ¥ Canon 7751 3297.00 -0.99 -10.29 CHF ABB ABBN 18.16 -1.47 1.11 CHF UBSGroup UBSG 16.25 -1.81 -16.75
One month -0.28700% -0.00900% ¥ CentralJapanRwy 9022 19405 0.31 -10.16 € AXA CS 20.70 -1.69 -17.95 € Unilever UNA 39.77 0.13 -0.85 11 18 25 31 8 15 22 29 5 12 19 26 4
Three month -0.22100 0.03200 HK$ ChinaConstructnBk 0939 4.81 -1.23 -9.42 € Allianz ALV 140.80 -0.21 -13.91 £ Unilever ULVR 3110.00 0.75 6.27 Jan. Feb. Mar.
Six month -0.13800 0.10200 HK$ ChinaLifeInsurance 2628 17.80 -1.33 -29.08 € Anheuser Busch ABI 104.30 -1.23 -8.83 £ VodafoneGroup VOD 217.65 -0.30 -1.52
One year -0.02500 0.21900 HK$ ChinaMobile 0941 84.80 0.18 -3.09 £ AstraZeneca AZN 4054.50 0.95 -12.17 CHF ZurichInsurance ZURN 223.80 -0.75 -13.39
Yen Libor AU$ CmwlthBkAust CBA 75.45 -1.87 -11.79 € BASF BAS 63.69 0.20 -9.94
DJIA Stoxx 50
One month 0.23757% 0.23857% ¥ EastJapanRailway 9020 9724.00 -1.38 -15.07 € BNP Paribas BNP 45.66 0.07 -12.58
18195 2.05 -13.69 59.42 0.71 -14.57 Last: 2832.35 t 22.95, or 0.80% YTD t 8.6%
Three month 0.57156 0.38786 ¥ Fanuc 6954 £ BT Group BT.A 463.45 -0.48 -1.75 $ AmericanExpress AXP
Six month 0.90313 0.54071 ¥ Hitachi 6501 513.20 -0.87 -25.78 € BancoBilVizAr BBVA 6.10 -1.20 -9.54 $ Apple AAPL 101.04 -0.81 -4.01 3400
One year 1.27026 0.84214 TW$ Hon Hai Precisn 2317 83.00 1.72 2.72 € BancoSantander SAN 4.14 0.97 -9.10 $ Boeing BA 122.27 -0.51 -15.44
¥ HondaMotor 7267 3140.00 -0.95 -19.69 £ Barclays BARC 172.00 -0.98 -21.43 $ Caterpillar CAT 71.73 -4.07 5.55 3200
Offer
KRW HyundaiMtr 005380 148000 1.02 -0.67 € Bayer BAYN 97.60 -0.66 -15.72 $ Chevron CVX 88.76 -2.11 -1.33 3000
Eurodollars
HK$ Ind&Comml 1398 4.11 -0.48 -12.18 £ BP BP. 354.20 -3.10 0.06 $ CiscoSystems CSCO 27.06 -0.29 -0.35
One month 0.4500% 0.3500%
44.32
2800
Three month 0.6500 0.5500
¥ JapanTobacco 2914 4673.00 1.06 4.52 £ BritishAmTob BATS 4012.50 0.10 6.40 $ CocaCola KO 0.70 3.17
¥ KDDI 9433 2871.50 0.37 -8.96 CHF FinRichemont CFR 67.70 1.04 -6.10 $ Disney DIS 97.85 -1.55 -6.88 2600
Six month 0.9000 0.8000
¥ Mitsubishi 8058 2041.50 -0.92 0.67 CHF CreditSuisse CSGN 15.02 -2.47 -30.75 $ DuPont DD 63.53 -1.82 -4.61 2400
One year 1.2500 1.1500
¥ MitsuUFJFin 8306 538.80 -2.60 -28.83 € Daimler DAI 65.05 -2.88 -16.15 $ ExxonMobil XOM 82.64 -2.15 6.02
Latest 52 wks ago
1456.00 30.07 -0.74 -3.48 11 18 24 31 8 15 22 29 5 12 19 26 4
¥ Mitsui 8031 0.41 0.73 € Deutsche Bank DBK 17.36 -2.11 -22.91 $ GenElec GE
Prime rates 178.70 -1.27 -26.61 $ GoldmanSachs GS 151.54 -2.45 -15.92 Jan. Feb. Mar.
¥ Mizuho Fin 8411 € DeutscheTelekom DTE 15.30 -0.52 -8.33
U.S. 3.50% 3.25% ¥ NTTDoCoMo 9437 2494.50 -1.85 0.42 £ Diageo DGE 1866.50 0.40 0.54 $ HomeDepot HD 126.70 0.97 -4.20
Canada 2.70 2.85 AU$ NatAustBnk NAB 26.85 -1.40 -11.09 € ENI ENI 13.25 -2.50 -3.99 $ Intel INTC 30.56 -1.23 -11.29
Japan
Hong Kong
1.475
5.00
1.475
5.00
¥ NipponStl&SmtmoMtl 5401 2193.00 -0.02 -9.23 £ GlaxoSmithKline GSK 1400.00 1.82 1.97 $ IBM IBM 139.06
58.79
-0.78
-1.92
1.05
-10.96
Dow Jones Industrial Average P/E: 17
¥ NipponTeleg 9432 4672.00 -0.89 -3.39 £ HSBC Hldgs HSBA 448.80 -0.34 -16.30 $ JPMorganChase JPM
Policy rates ¥ NissanMotor 7201 1091.00 -2.63 -14.73 € INGGroep INGA 11.17 -0.49 -10.28 $ JohnsJohns JNJ 106.27 -0.44 3.46 Last: 16964.10 t 109.85, or 0.64% YTD t 2.6%
ECB 0.05% 0.05% ¥ NomuraHldgs 8604 524.00 -2.07 -22.84 £ ImperialBrands IMB 3673.00 0.34 2.41 $ McDonalds MCD 118.46 1.12 0.27
$ Merck MRK 52.45 -0.36 -0.70 18000
Britain 0.50 0.50 ¥ Panasonic 6752 992.00 -2.75 -20.03 € IntesaSanpaolo ISP 2.49 0.89 -19.49
Switzerland 0.50 0.50 HK$ PetroChina 0857 5.36 -0.92 5.30 € L'AirLiquide AI 98.60 -0.03 -4.87
$ Microsoft MSFT 51.65 1.21 -6.90 17400
Australia 2.00 2.25 HK$ PingAnInsofChina 2318 34.90 -1.97 -18.65 € LVMHMoetHennessy MC 154.80 0.10 6.83
$ NikeClB NKE 59.79 0.91 -4.34
16800
U.S. discount 1.00 0.75 $ RelianceIndsGDR RIGD 30.05 0.17 -1.80 £ LloydsBankingGroup LLOY 70.63 -2.91 -3.34
$ Pfizer PFE 29.36 -1.44 -9.05
Fed-funds target 0.25 0.00 45.26 -2.60 1.23 $ Procter&Gamble PG 83.07 -0.04 4.61 16200
AU$ RioTinto RIO € LOreal OR 154.80 0.58 -0.32
Call money 2.25 2.00 KRW SamsungElectronics 005930 1192000 -2.53 -5.40 £ NationalGrid NG. 948.80 0.88 1.21
$ 3M MMM 160.20 -0.23 6.35 15600
4445.00 -0.91 -19.91 $ TravelersCos TRV 110.82 0.93 -1.81
Overnight repurchase rates ¥ Seven&I Hldgs 3382 CHF Nestle NESN 71.25 -0.42 -4.43 15000
5851.00 1.69 -4.69 $ UnitedTech UTX 96.86 -0.06 0.82
U.S. 0.42% 0.18% ¥ SoftBankGroup 9984 CHF Novartis NOVN 72.00 -0.28 -17.05
3545.00 -1.94 -23.04 $ UnitedHealthGroup UNH 121.63 -0.11 3.39 11 18 24 31 8 15 22 29 5 12 19 26 4
Euro zone n.a. n.a. ¥ Sumitomo Mitsui 8316 DKK NovoNordiskB NOVO-B 381.60 -1.40 -4.58
93.70 -0.95 -0.05 $ VISAClA V 70.64 -1.81 -8.91 Jan. Feb. Mar.
HK$ SunHngKaiPrp 0016 £ Prudential PRU 1326.50 ... -13.36
Sources: WSJ Market Data Group, SIX 152.00 ... 6.29
$ Verizon VZ 52.48 0.52 13.54 Note: Price-to-earnings ratios are for trailing 12 months
TW$ TaiwanSemiMfg 2330 £ ReckittBenckiser RB. 6470.00 0.53 3.01
Financial Information, Tullett $ WalMart WMT 68.04 0.22 11.00 Sources: WSJ Market Data Group; Birinyi Associates
MONEY & INVESTING
Commodity Shares Slide Market in Limbo:

Weak Chinese data
weigh on European
Risky and Safe
mining sector;
U.S. win streak ends Bets Both Gain
BY CARLA MOZEE BY LESLIE JOSEPHS double-digit percentages every
AND SAUMYA VAISHAMPAYAN year from 2012 to 2014, while
A broad rally that has the S&P 500 rallied. But over
European stocks slid Tues- swept up the prices of global the past month, the yen has
day as a fall in Chinese ex- stocks, U.S. junk bonds and gained about 3% against the
ports and a drop in oil prices industrial commodities alike U.S. dollar. Meanwhile, the
helped drive commodity over the past month comes S&P 500 rose more than 7%.
shares lower. with an unusual asterisk: It There still is demand for
U.S. stocks also declined, has been accompanied by a U.S. government debt, which
snapping a five-session win- rally in less-risky investments many investors consider
ning streak. such as gold and Japan’s yen among the safest investments.
TUESDAY’S The Stoxx and broad stability in rich- The yield on the 10-year Trea-
MARKETS Europe 600 country government bonds. sury note has crept up over
fell 1% to This is an unusual configu- the past month, but remains
DADO RUVIC/REUTERS
337.48, with ration that has investors and below 2%.

no sector moving higher. In- analysts scratching their heads Gold futures are up more
vestors also were looking and wondering what the mar- than 5% over the past month.
ahead to Thursday’s European ket’s next turn will be. Some The largest emerging-market
Central Bank policy decision. say we could start to see the exchange-traded fund, the
The mining sector was Steel wires at an ArcelorMittal plant in Bosnia and Herzegovina. The firm’s stock fell 8% Tuesday. beginnings of an outline of Vanguard FTSE Emerging
among the worst performers that shift in coming days, Markets ETF, is up roughly
because of its sensitivity to cheer about on Thursday,” said rel. On Tuesday, Brent for May “The market has come a when the European Central 10% and the iShares iBoxx $
developments in China, a ma- Connor Campbell, a financial delivery lost $1.19 a barrel, or long way in a hurry,” said Bank, the Federal Reserve and High Yield Corporate Bond
jor buyer of metals. Data from analyst at Spreadex, in a note. 2.9%, to $39.65. John Brady, managing direc- the Swiss National Bank all are ETF, the largest junk-bond
China showed February’s ex- Mr. Draghi has repeatedly In the oil sector, Tullow Oil tor at futures brokerage RJ due to meet, with potentially ETF, is up 5.4%.
ports slid 25.4% from a year hinted the ECB will again ex- slid 7.5% in London and Repsol O’Brien. Now, ahead of a slew significant decisions at hand. In recent weeks, the U.S.
earlier, compared with the 15% pand its easing measures at fell 2.9% in Madrid. of central-bank meetings The moves underscore the has issued more upbeat eco-
decline expected. Imports also the meeting. The U.K.’s FTSE 100 index “where global central-bank uncertainty surrounding global nomic figures, helping allevi-
fell, by 13.8%, suggesting a In London, shares of plati- dropped 0.9% to 6125.44. Ger- policy is set to further di- economic growth and the out- ate investors’ concerns that
continuing slowdown in do- num producer Anglo American many’s DAX gave up 0.9% to verge,” investors are becom- look for asset prices at a time the U.S. was heading toward a
mestic demand. tumbled 15%, iron-ore heavy- 9692.82. France’s CAC 40 lost ing more cautious, he added. of both expansive monetary recession and boosting stock
The weak data were “the weight BHP Billiton fell 8.5%, 0.9% to 4404.02. In addition to the ECB meet- policy and an epic commodity prices that tumbled earlier
kind of ugly reminder of and miner and commodity In the U.S., the Dow Jones ing this week, the Bank of bust. The market disturbance this year. Meanwhile, Chinese
China’s spluttering economy trader Glencore slid 18%. Steel Industrial Average declined Japan and Federal Reserve that sent the Dow Jones In- growth has slowed, the world
investors certainly don’t need producer ArcelorMittal 109.85 points, or 0.6%, to are both scheduled to meet dustrial Average down 10% for remains oversupplied with oil,
at the moment, something dropped 8% in Amsterdam. 16964.10. The S&P 500 fell next week. the year at its trough in Febru- the U.S. manufacturing sector
that likely makes it even Oil prices pulled back after 1.1%, and the Nasdaq Compos- The 10-year U.S. Treasury ary has reminded investors of is struggling and global eco-
harder for [ECB President] a run higher that had carried ite dropped 1.3%. yield fell 0.07 percentage point the risks of stock investing af- nomic growth still is tepid.
Mario Draghi to provide the Brent crude, the global bench- Energy and materials stocks to 1.832%. Yields fall as prices ter a seven-year-long rally, but “We’ve reversed some of
markets with something to mark, to more than $40 a bar- also dropped in the U.S. rise. low yields still are prompting the irrational or fear-driven
many investors to hunt for components of the selloff, but
better-returning assets. the reality is…there are some
Japan Debt Yields Fall to Records

“We are in the weirdest legitimate headwinds,” said
type of market,” said Vadim David Lefkowitz, senior equity
Zlotnikov, chief market strate- strategist at UBS Wealth Man-
gist at AllianceBernstein, not- agement in New York. The
BY HIROYUKI KACHI The Bank of Japan’s move record lows of 0.305% and “Individuals and firms as a ing that the U.S. doesn’t appear firm has reduced its U.S. in-
to negative interest rates, an- 0.485%, respectively, on Tues- whole will definitely benefit to be moving into a recession vestors’ exposure to stocks
TOKYO—The yield on nounced in late January and day. That means investors from this policy,” Mr. Kuroda but it also is unclear what is this year, while also buying
Japan’s benchmark 10-year implemented in mid-February, who commit money for 30 said in a speech on Monday. going to drive growth. some high-yield debt, Mr. Lef-
government bond hit a new low has pushed down yields across years—exposing themselves While there was no major He said some of the recent kowitz said.
in negative territory on Tues- the board. The 10-year yield to any negative shock that economic news driving Tues- moves, such as gold’s gains, re- Despite the recent rally, the
day and longer-term bond dropped into negative terri- might occur during the long day’s bond trading in Tokyo, flect investors’ concerns S&P 500 is off 2.9% in 2016.
yields also fell to record lows, tory in February. span—can expect the equiva- investors paid close attention around unconventional mone- “Everyone’s searching for
reflecting the effects of the Institutional investors with lent of less than 50 cents in to the 30-year government- tary policy such as negative in- the same pot of gold,” said
central bank’s monetary easing. few alternatives for parking interest annually on a $100 bond auction that took place terest rates in Japan and Eu- Phil Blancato, chief executive
The 10-year yield briefly their cash have been piling investment, during the lunch break. When rope. When such measures at Ladenburg Thalmann Asset
touched minus 0.1% in after- into government bonds, and in Bank of Japan Gov. Har- the results showed strong de- influence the direction of mar- Management. He said he re-
noon trading, the same nega- some cases seeking longer- uhiko Kuroda said this week mand for the ¥726 billion kets as much they have lately, cently bought shares of mas-
tive interest rate the Bank of term debt that still carries a that the slide in long-term ($6.4 billion) issue, prices for “the investment setting be- ter-limited partnerships, in-
Japan started imposing last positive yield. yields showed his policy was other bonds also rose quickly. comes less predictable,” Mr. vestments focused on energy
month on a portion of com- The benchmark yields on working. Rates on home loans Bond prices move in the oppo- Zlotnikov said. infrastructure. “Don’t throw
mercial bank deposits. 20- and 30-year JGBs fell to have come down as well. site direction of yields. For example, the yen fell by all your chips in,” he said.
CARDS Federation, a trade group.

In general, grocery stores,
small businesses and gas sta-
tions have been slower to im-
the stores are accepting only
cash payments
the gift cards.
A Safeway spokesman de-
for
Talbott Roche told analysts re-
cently when the company re-
ported quarterly earnings. She
cited efforts to limit or control
GLEN STUBBE/MINNEAPOLIS STAR TRIBUNE/ZUMA PRESS
Continued from page B5 plement the new chip-based clined to comment. the sale of higher-denomina-
American Express Co. that card technology, making them Kun Niu used to buy tion open-loop cards.
can be used anywhere and that more vulnerable to fraud, pay- Visa gift cards regularly at his The company said the issue
are affected by the new limits. ments specialists said. local Safeway in Dublin, Calif., will likely fade as more retail-
Gift cards also are a favor- Kroger is in the midst of but said the store recently ers begin accepting chip cards.
ite among criminals, who pay upgrading its checkout equip- stopped selling them. The Chip cards are designed to
for them with stolen credit- ment to accept chip cards and computer programmer said he limit a criminal’s ability to
card data. Historically, the expects to complete the over- now plans to go to a drugstore create counterfeit cards by
cost of that fraud was borne haul by the end of the month. to buy the cards, which he creating a unique code for
by the financial institutions To ward off thieves, the grocer uses to pay his mortgage each transaction. That is dif-
that issued the credit cards. is limiting the number through a third-party website ferent from cards that contain
That changed in October, when of gift-card purchases that are instead of writing a check. a traditional magnetic strip on
new card-industry rules went made on a credit card within a The restrictions are having the back, which contains static
into effect making merchants 24-hour period, said Chris other ramifications. Black- data about the cardholder’s
liable for fraud-related losses Hjelm, the chain’s chief infor- Gift cards are often bought using stolen credit-card data. hawk Network Holdings Inc., account that can be used to
if they haven’t upgraded their mation officer. which distributes gift cards to create a counterfeit card.
checkout technology to accept “We have done some differ- whether they should revise In one case last summer, retailers, said its revenue While the chip itself won’t
credit cards that are embed- ent things for nonchip trans- gift-card purchase policies. He police in Petaluma, Calif., said growth will be hit this year stop a thief from hacking into
ded with computer chips, actions to make sure we are said the trade group’s mem- a couple used a stolen partly due to new gift-card a merchant’s payment system,
which are more secure. mitigating the risk,” he said. bers are “reporting a signifi- credit card to buy $15,000 of policies at chains that aren’t any stolen information from a
Kroger Co. and Albertsons Mr. Hjelm declined to discuss cant uptick in suspected gift cards at a store. ready to meet the new chip- chip card is virtually useless
Cos. Inc. unit Safeway are further details, saying “the fraud.” Such crimes contrib- Shoppers at Safeway stores card rules. because the data change each
among those that are clamp- bad guys would love to know.” uted to $3.89 billion in coun- in recent weeks have noticed “Some of our retail distri- time the card is used.
ing down, people familiar with Greg Ferrara, senior vice terfeit payment-card losses clerks removing open- bution partners who are not But the technology works
their strategies said. president of government rela- that were incurred by issuers loop gift cards from the racks, compliant have taken mea- only if chip cards are pro-
“Gift cards are a challenge,” tions at the National Grocers in 2014, according to the Nil- according to postings at online sures to limit exposure to cessed on machines that are
said Mallory Duncan, general Association, said smaller son Report, a payments news- message boards. Other Safe- those credit-card losses in upgraded to accept chip pay-
counsel at the National Retail chains also are thinking about letter. way shoppers have said that their stores,” Chief Executive ments.
BONDS The news caused the bonds

to sell off, widening the differ-
ential between yields on one
part of the deal and safe gov-
Continued from page B5 ernment debt by around 0.35
Mr. Gkoutzinis said that percentage point, according to
whether to disclose a potential one investor.
merger can be a difficult judg- Standard & Poor’s Ratings
ment call and depends on the Services said the addition of
KRIS TRIPPLAAR/SIPA USA/ASSOCIATED PRESS
probability of completion, but $36 billion in debt to Honey-

he advises clients to err on the well’s balance sheet could cause
side of caution. its assessment of the com-
Honeywell said in filings pany’s financial-risk profile to
with the Securities and Ex- deteriorate.
change Commission it was rais- Honeywell told investors
ing €4 billion in bonds for gen- that the company had taken le-
eral corporate purposes. gal advice on the issue of dis-
This debut euro debt sale closure and been told it had
proved popular. Banks handling done nothing wrong, said one
the sale on Feb. 16—Bank of investor.
America Corp., Barclays PLC, On March 1, Honeywell
Citigroup Inc. and Goldman called off its pursuit of United Honeywell International’s euro-denominated bonds bounced back after it called off its pursuit of United Technologies on March 1.
Sachs Group Inc.—received Technologies, saying the com-
€11.25 billion ($12.4 billion) of pany was unwilling to engage manager at Aberdeen Asset Coca-Cola Co. and Apple Inc. tors say they now will be more At a March 2 investor con-
orders, according to a person in negotiations. Management, who didn’t buy borrowed in euros last year, cautious on new U.S. deals. ference, Chief Financial Officer
familiar with the deal. Honeywell’s euro-denomi- the Honeywell bonds. selling a record €66 billion in Others think that Europe’s Tom Szlosek said the February
On the day that the deal set- nated bonds bounced back. But The European Central Bank’s euro-denominated debt, ac- rock-bottom interest rates will sale had helped connect Honey-
tled, Feb. 22, reports surfaced investors haven't. vast stimulus program has low- cording to data provider Dea- continue to attract U.S. compa- well with new lenders.
that Honeywell had been in “This is not how I would like ered borrowing costs in euros, logic. This year, U.S. companies nies, while yield-starved local “It’s a market that we think
merger talks with United Tech- to be treated as a bondholder. tempting U.S. companies, who have accounted for more than investors will continue to buy we can potentially go to again
nologies since last year. This We have to rely on what com- are also eager to widen their one-third of total bond issuance them. in the future,” he said.
was later confirmed by the panies are telling us,” said investor bases. in euros. Honeywell, for one, hasn’t —Ted Mann
companies. Wolfgang Kuhn, a portfolio U.S. companies including But some European inves- given up on Europe. contributed to this article.
Email: heard@wsj.com
HEARD ON THE STREET FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard
The Real Point of Europe’s Negative Rates Iron Miners’

Deal Keeps
Banks and insurers don’t The reality is that, while nancing costs for govern-
Lower Bound
like it, borrowers are seeing
little or no benefit from it
and savers and pensioners
Interest rates on new loans*
real growth might be stimu-
lated through more lending,
this isn’t happening because
ments. Two-year government
bond yields are below zero
in Spain and Italy; Germany’s
Ore Plentiful
3.5%
fear their money is being negative rates are hurting debt-service bill has col- Two of the world’s biggest
eaten away by it: The policy bank profitability. lapsed. iron-ore miners are blending
of negative interest rates is 3.0 In much of Northern Eu- But fiscal stimulus in the forces, but not to consolidate
as unpopular as it is mysteri- rope, negative rates aren’t eurozone still looks difficult supply in an overcrowded in-
ous. 2.5 cutting the cost of loans. given German resistance. dustry. Rather, Australia’s
The European Central Netherlands This is because banks are And easing debt-service Fortescue Metals and Bra-
Bank looks likely to cut rates 2.0 Italy unwilling and often unable pressures also may allow zil’s Vale are bulking up so
further into negative terri- France to pass on their own costs governments to duck hard they can fight their giant ri-
Germany
tory this week and yet no 1.5
from negative rates onto re- decisions that might boost vals, Rio Tinto and BHP Billi-
one really knows exactly how tail depositors. Mortgage growth in the longer term. ton, for longer.
it is supposed to help. 2013 ’14 ’15 ’16 costs already are rising in Europe is in a bind and Fortescue said Tuesday
The banal answer is that *Weighted average of corporate loans and Switzerland despite negative negative rates aren’t helping that it will tie up with Vale,
mortgages
the aim is to stoke inflation Sources: ECB; Barclays; European rates and higher credit costs sluggish growth. But the pol- most immediately to literally
from its current level of mi- European Central Bank Pressphoto Agency (photo) might be taking hold within icy still could help inflation blend their respective grades
nus-0.2% toward the ECB’s President Mario Draghi THE WALL STREET JOURNAL. the eurozone in Germany, by driving people and com- of iron ore. Though iron ore
target of below, but close to France and the Netherlands, panies to spend their cash, has risen sharply in the past
2%. But inflation alone also which are vulnerable to an- income to use for consump- according to Barclays. thereby increasing the veloc- month, its price is still
is the most important another downturn, but also to tion or investment. Low in- The longer interest rates ity of money, or by lifting ex- roughly a quarter of its peak
swer even when there is evi- relatively high private-sector flation, particularly if it stay negative, the worse the pectations of inflation. And level in 2011.
dence that negative rates are borrowing in countries in- proves persistent, means effect on bank profits is the alternative, were the ECB Blending ores is a creative
failing to stimulate growth cluding France, Belgium and debt burdens aren’t being likely to be. Earnings on not to act, is to risk tighter way to better each com-
through lending and that the Netherlands. eroded as borrowers might their bond portfolios will financial conditions that pany’s terms with buyers.
competitive currency devalu- In the simplest terms, have expected. That can fall, or even become a cost. make the target even harder Fortescue’s lower-quality
ations don’t last. debt effectively stakes a force them to devote greater Their funding costs on junior to achieve. What is clear is ores go for a discount to the
Inflation is a vital part of claim on economic activity resources to deleveraging, debt and some forms of bank that without a pickup in in- benchmark grade. Vale’s
the effort to reduce the in the future: Inflation hampering growth. capital may rise if investors flation soon it is hard to see above-benchmark quality ore
heavy burden of debt in Eu- means that each hour So, inflation and nominal become more worried about how Europe can escape from fetches a premium but is
ropean economies. This ap- worked or each product sold economic growth could be missed dividends or coupon the dead weight of its debt harder to sell in volume.
plies most obviously to the in the future will eat away a more important than real payments. burden. Mixing the two will yield a
strained government fi- larger chunk of debt that ex- economic growth, at least in One visible positive effect —Paul J. Davies blend close to the bench-
nances of southern Europe, ists today. That leaves more the near term. of negative rates is lower fi- and Richard Barley mark, improving Fortescue’s
selling price and strengthen-
ing both firms’ market share.
No Easy Bargains for Burberry’s Mystery Investor The Brazilian miner may
eventually buy up to 15% of
the Australian company’s
Selling the luxury sector is interest, taxes, depreciation value of £6.5 billion ($9.3 bil- turns over about €5,000 for Burberry’s sales, according shares in the open market,
so last year. News that and amortization. Its shares lion), would be an easier tar- every square foot of store to Brewin Dolphin—could plus invest in some of
a mystery investor has been also have substantially out- get; the company is a rarity space, according to UBS, accelerate, restoring like-for- Fortescue’s mines. These as-
building a 5% stake in British performed those of Burberry in the luxury-goods world for compared with under €2,000 like growth. This crucial pects of the alliance aren’t
high-fashion group Burberry over the past year, as inves- not having a controlling at Burberry. metric has been unusually set in stone. Vale’s high net
sent the shares up 6% on tors have sought refuge from shareholder group. Another explanation for volatile in Burberry’s finan- debt and lack of free cash
Tuesday morning. Not for the luxury downturn in its But LVMH already makes the stake-building is that an cial year so far, which runs flow seem an impediment.
the first time, LVMH has diversity of brands, which over half its profits from investor or activist has sim- through March—up 6% in the By tossing each other a
been touted as a potential range from Louis Vuitton to clothes, handbags and suit- ply spotted an opportunity. first quarter, down 4% in the lifeline, however, the pair en-
bidder. TAG Heuer. cases. Buying Burberry But Burberry shares have second, flat in the third. sure each other’s output re-
But it isn’t clear why LVMH’s boss Bernard Ar- would compound the imbal- risen by a fifth this year. Co- Alternatively, costs could mains high. If Vale does
LVMH would want Burberry. nault, still France’s richest ance. inciding with cuts to earn- be sliced, perhaps after re- drum up the cash to take a
And for a more opportunistic man, is no stranger to anony- It would also hurt mar- ings forecasts, that has placing Christopher Bailey, stake in Fortescue, that
investor, Burberry’s shares mous stake-building. In 2010 gins. Burberry made a 14% pushed their forward earn- the lead designer cum chief could keep away rivals who
already are pricing in an the group used derivatives to adjusted operating margin in ings multiple above 20 times. executive, with a numbers wanted to control Fortescue
earnings revival. accumulate a clandestine 17% the six months to Septem- Buying today is therefore a man. An activist seems more and reduce production.
The French bellwether interest in rival Hermès. Mr. ber—half the 28% reported wager that profits can re- likely to be interested in this A Vale-Fortescue alliance
certainly has the financial Arnault finally sold his by LVMH’s fashion and bound. more controllable strategy. spells plenty of supply for
wherewithal, with net debt stake in 2014 under legal leather-goods division for It seems an odd time to be No wonder Burberry is eager the foreseeable future. That
of €4.2 billion ($4.6 billion) pressure from the controlling 2015. That reflects lower betting that demand growth to know what its new inves- is a reason the rally in iron-
at the end of 2015 just half family. prices and therefore sales from Chinese consumers— tor is up to. ore prices could end soon.
of expected earnings before Burberry, with a market densities: Louis Vuitton who account for some 40% of —Stephen Wilmot —Abheek Bhattacharya
MONEY & INVESTING
Hedge Fund Trades Probed

BY GREGORY ZUCKERMAN York University Medical “Additionally, they have re-
School who has focused on quested information regard-
Visium Asset Manage- health-care stocks. ing the trading of certain se-
ment LP said Monday it is be- Previously, Dr. Gottlieb curities, including the use of a
ing investigated by federal worked at Balyasny Asset consultant who stopped pro-
authorities over trading and Management, which spun off viding services to the firm in
valuation issues, a sign that Visium into a new firm, and 2011. We are providing the re-
scrutiny of hedge-fund trad- was an analyst at Sanford C. quested information to the
ing may be intensifying, in- Bernstein & Co. He regularly Government.”
cluding at funds with signifi- speaks at hedge-fund confer- Previously, the Journal re-
cant investments in the ences and is quoted about ported that Visium was
ASHIKUR RAHMAN/REUTERS
health-care industry. health-care issues. among the hedge funds that

The New York-based firm’s The firm uses borrowed were tipped by a Washington
managing partner, Jacob money amounting to about research firm about a coming
Gottlieb, told employees Mon- 2.5 times its assets, a person 2013 change in government
day morning of inquiries by familiar with the matter said, health-care policy.
the Justice Department and suggesting that the firm holds Visium has been a top per-
the Securities and Exchange nearly $20 billion of invest- former recently, though this
Commission, according to ments. year has been rougher. Its The Bangladesh central bank in Dhaka alleges that money was stolen from its U.S. account.
people close to the matter. Half the holdings are in global fund was up 10.25%
The firm, with $8 billion
under management, is one of
the largest hedge funds with a
focus on health-care shares. It
health-care shares and the
other half in other types of
investments.
The letter to Visium inves-
last year, though it is down
about 2% so far in 2016. Its
health-care fund was up 5.5%
last year. It isn’t clear how it
Bangladesh Recovers Funds
also informed its investors of tors said the government “re- has done so far this year. BY SYED ZAIN AL-MAHMOOD Mr. Asaduzzaman said. “The payment instructions
the probes in a letter dated quested information from Someone who worked with A statement posted on Ban- in question were fully authen-
Monday that was reviewed by several years ago regarding Dr. Gottlieb in the past said DHAKA, Bangladesh—Ban- gladesh Bank’s website Mon- ticated by the SWIFT messag-
The Wall Street Journal. the valuation of certain secu- his trading style is more gladesh’s central bank day night said Bangladesh’s Fi- ing system in accordance with
Spokesmen for Visium, the rities in the firm’s credit fund short-term oriented than said Tuesday it had recovered nancial Intelligence Unit was standard authentication proto-
Justice Department and the which was closed in 2013.” some rivals in the sector. a portion of the money alleg- cooperating with anti-money- cols,” the spokeswoman said.
SEC declined to comment. One institution that had in- Dr. Gottlieb said in his let- edly stolen by hackers from an laundering agencies in the “The Fed has been working
Visium, which also has of- vested in the credit fund said ter the firm expects “only the account held by the country at Philippines to trace “funds with the central bank since the
fices in London and San Fran- it recently has been asked a highest ethical conduct from the Federal Reserve Bank of hacked from a reserve held in incident occurred and will
cisco, was founded in 2005. It series of questions by SEC in- all of our employees.” New York. the U.S.” continue to provide assistance
has more than 170 employees vestigators, suggesting the “We are in contact with Muhammad Asaduzzaman, The statement said investi- as appropriate.”
and is run by Dr. Gottlieb, a fund remains of interest to our advisers as we work a spokesman for Bangladesh gators in the Philippines had Representatives for SWIFT,
high-profile investor with a the investigators. through this matter,” the let- Bank, said there was “suffi- obtained court orders freezing an interbank secure messaging
medical degree from New The Visium letter said: ter added. cient proof” that money from the bank accounts to which service that is also used by
the account had been electron- the funds had flowed. central-bank account holders
ically diverted to banks in the A spokeswoman for the at the Fed, didn’t return a re-
2016,” he said. The average bo- tors said, undermined by a Philippines, despite a state- New York Fed reiterated on quest for comment.
Finance nus last year was the lowest
since 2012, when the average
strong dollar and rising prices.
Last year, many real-estate
ment from the New York Fed
on Monday that there was no
Tuesday that the bank had no
evidence of a breach of its sys-
The New York Fed offers
transaction services to about
Watch was $142,860. In his annual re-
port estimating Wall Street bo-
experts predicted that foreign
investors could flock to U.S. real
evidence of a breach of its sys-
tems.
tems related to an account
held there by Bangladesh’s
250 foreign central banks and
government-related entities
nuses, Mr. DiNapoli also said estate as a haven amid global “Our investigators have central bank. Nevertheless, she around the world as part of its
profit in the securities industry economic tumult. Last June, the been working for about two said that Fed officials were in broader payments services.
declined for the third year in a NAR reported that Chinese buy- weeks to recover the stolen touch with the central bank of Mr. Asaduzzaman said he
row, reaching their lowest level ers surpassed Canadians as the funds and we have been able Bangladesh, while having no couldn’t disclose the amount
COMPENSATION since 2011. top foreign buyers of U.S. real- to recover some of it with the evidence that money had been of money stolen or the propor-
Mr. DiNapoli noted that both estate, saying this reflected help of authorities in Manila,” stolen from its account. tion that had been recovered.
Average Wall Street New York state and New York growing interest in the U.S. as a
Bonus Drops by 9%
INTERNATIONAL INVESTMENT FUNDS
City budgets depend heavily on secure place to park money.
The average bonus on Wall the securities industry and that There is growing evidence Advertisement
Street fell 9% to $146,200 in “lower profits could mean fewer that many foreign buyers have
2015, making it the lowest aver- industry jobs and less tax reve- been pulling back, partly because
age in three years as profits nue.” prices in cities such as New York [ Search by company, category or country at europe.WSJ.com/funds ]
continued to slip at securities —Joshua Jamerson have risen sharply.
firms, New York state Comptrol- In January, the median price NAV —%RETURN—
FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR
ler Thomas P. DiNapoli said. REAL ESTATE of existing U.S. homes had in-
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CAM-GTF Limited OT OT MUS 03/04 USD 287158.88 2.5 -14.4 -7.7
year in the financial markets. U.S. Homes Ebbs rate, from a year earlier, accord-
“Ongoing weaknesses in the Demand from foreign buyers ing to the NAR. For a buyer Data as shown is for information purposes only. No offer is being made by
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For information about listing your funds,
global economy and market vol- for U.S. real estate is weakening, from Canada, it increased 27%. U.S. Securities and Exchange Commission and aren’t available for sale to United
States citizens and/or residents except as noted. Prices are in local currencies.
please contact: Freda Fung tel: +852 2831
atility may damp profits in the National Association of Real- —Laura Kusisto All performance figures are calculated using the most recent prices available. 2504; email: freda.fung@wsj.com

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FROM PAGE ONE

MARCH Arizona State University associ-

the poll. Mrs. Clinton had won 12 pri-

Trump Upends Foreign-Policy Tack

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Fed Unlikely to Raise Rates Next Week

Samsung’s Head of the Smartphone Class

F. MARTIN RAMIN/THE WALL STREET JOURNAL (3)

A Son Becomes the Caregiver for His Aging Mother

work. If the weather

ARTS & ENTERTAINMENT

Attend a VIP Screening of “Zootropolis”

Putin’s Ukrainian Hostage The Man Who Cracked

Rising Global Debt and the Deflation Threat

ObamaCare Has Become My Largest Household Expense

BOOKSHELF | By Thomas A. Bass

The Odds Are Stacked Against Humanity

Notable & Quotable

WEATHER & CROSSWORD

Body Image Concerns Affect Men, New Study Shows

quite as much has learned some lessons for his

Weather The WSJ Daily Crossword | Edited by Mike Shenk

Frankfurt 9 -1 pc 9 0 pc Orlando 28 17 pc 30 18 s Zurich 6 -3 pc 9 0 pc B E A N E R N S T T O E S

BUSINESS & TECH.

Ad campaign aims to counter fierce resistance TECHNOLOGY | B3 FINANCE | B5

U.S. Adds Arrow in VW Emissions Case

KRISZTIAN BOCSI/BLOOMBERG NEWS

Burberry Gets Caught Up in Talk of Deal RWE Sets

the share-price move. a 7% drop in customers last

Vale, Fortescue to Blend Iron-Ore Work Sponsors Suspend

INDEX TO BUSINESSES BUSINESS NEWS

INDEX TO PEOPLE for Takata, the people said.

Germany’s Merck Gets Boost

to doping allegations of its