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As of 4 p.m. ET DJIA 18261.45 g 0.71% NIKKEI 16754.02 g 0.32% STOXX 600 345.34 g 0.72% BRENT 45.89 g 3.69% GOLD 1337.20 g 0.24% EURO 1.1231 0.20% DLR 100.99 0.22%

S&P 500
Whats Earnings
News Slump Set
Business & Finance
To Go On
.S. companies are ex-
U pected to report lower
third-quarter earnings,

raising questions about The third quarter was sup-

how far stocks can rise. A1 posed to be when earnings
growth returned to U.S. com-
 Beijing approved the
panies. Not anymore.
use of credit default
Companies in the S&P 500
swaps, which pay out if
are now expected to report
the issuer of a bond or a
negative earnings growth for
loan defaults. B1
the sixth consecutive quarter
 India is being offered blue- in the coming weeks, accord-
prints to advanced combat ing to analysts polled by Fact-
aircraft by aerospace firms as Set. That slump would be the
the country prepares to up- longest since FactSet began
grade its military jet fleet. B1 tracking the data in 2008.
The prolonged contraction

 The Fed proposed new

has raised questions about
restrictions on banks ac-
how far stocks can rise with-
tivities in physical-com-
out corresponding strength in
modity markets. B5
corporate earnings.
 Goldman plans to lay As recently as three months
off over one-quarter of its ago, analysts estimated U.S.
investment bankers in Asia corporate earnings growth
amid a slowdown in deal would return to positive terri-
activity in the region. B5 Workers prepare for Mondays debate, the first between Hillary Clinton and Donald Trump, at Hofstra University in Hempstead, N.Y. tory by the third quarter. As of
Friday, they were predicting a
 Demand from Chinas

Budget Vise Looms in U.S.

2.3% contraction from the
small oil refineries, known
year-earlier period.
as teapots, is helping to
Many of the factors pres-
reshape global markets. B5
suring U.S. corporate earnings
 Hanjin Shipping will in recent quartersincluding a
likely sell some of its most New presidents money or cut taxes than any room to respond if interest stronger dollar and falling oil
valuable ships as it heads president since World War II. rates remain near todays ul- priceshave abated in 2016.
toward liquidation. B1 spending plans will be Not since Harry Truman tralow levels. The WSJ Dollar Index, which
 Sony Pictures is teaming challenged by likely will a new leader enter office  Review: The state of Due to this erosion in the measures the U.S. dollar
with a higher debt-to-GDP ra- American debate............... A8 policy arsenal available to mon- against a basket of 16 curren-
up with Wanda to help mar- widening of deficits tio. And for the first time in  Opinion: Trump debate dos etary policy makers, the burden cies, is down 4% this year, ver-
ket its films in China. B2, B8
decades, the new president and donts............................ A12 for any classic Keynesian re- sus up 8.6% for all of last year,
BY NICK TIMIRAOS will face the specter of widen- sponse would have to fall more and the price of U.S.-traded
World-Wide ing deficits despite a growing on the fiscal side, which crude oil has risen 20% in
Donald Trump and Hillary economy. doesnt take into account what is why the political constraints on 2016, rebounding from its ex-
Clinton are likely to recite their A President Trump or Clin- would happen if the U.S. en- action are more scary, said Tim- treme lows.
 Russia and China are varied promises for fresh gov- ton could try to barrel ahead ters another recession, when othy Geithner, President Barack Still, those moves havent
spending lavishly on new ernment spending at Mondays anyway, of course. But Mrs. falling revenue would send Obamas first Treasury secretary. been enough to project an end
combat aircraft that could presidential debate. One reality Clinton, in particular, is likely deficits even higher. Those fiscal constraints, Please see PROFIT page A2
challenge the Wests supe- theyre unlikely to note: Who- to be checked by the opposing In that scenario, the Fed- though, are increasingly palpa-
riority in the skies. A1 ever wins in November will en- partys control of at least one eral Reserve and other cen- ble. Spending on discretionary  The Outlook: U.S. labor gains
joy far less latitude to spend chamber of Congress. And that tral banks would have less Please see RACE page A7 reach a plateau......................... A7
 Hundreds of civilians
have been killed in heavy
bombing in the Syrian city
of Aleppo since a cease-fire
broke down last week. A3
 A Chinese woman un-
Territorial Output
Hong Kongs GDP relative to
der U.S. scrutiny for her al-
leged role in aiding North 30%
Korea is also a suspect in a Beijing is pressing the territory to mold itself in the mainlands image; the demise of autonomy
Chinese criminal probe. A5 25
BY NED LEVIN AND CHESTER YUNG omous for half a century after the enterprises are snapping up Hong Kong
 The next U.S. president
20 handover in 1997. assets, including its leading English-lan-
will face the specter of
HONG KONGThe integration of Legislators, publishers and journalists guage newspaper and choice real estate.
widening deficits despite
Hong Kong with mainland China was say freedom of expression is being re- New public-infrastructure projects,
a growing economy. A1 15
preordained in handover talks the U.K. stricted. Several candidates for Hong including a multibillion-dollar bridge
 U.S. authorities ar- held with Beijing in the 1980s. The year Kongs legislative elections recently spanning the Pearl River Delta and a
rested a Turkish immi- 10 2047 was the due date. were disqualified from running because high-speed rail link to the mainland,
grant in the shooting It is coming ahead of schedule. they advocated independence from promise to physically tie the city to
deaths of five people at a 5 Hong Kong, long an outpost of free China. Hong Kong authorities have is- southern China as never before.
mall north of Seattle. A7 trade and reliable courts beside Com- sued warnings to educators to rein in Many Hong Kong people used to feel
munist China, is coming under increas- young peoples interest in independence. more superior than mainlanders be-
 India said it will ratify 0
ing pressure from Beijing and local The tidal pull of Chinas giant econ- cause of the rule of law and freedom of
the 2015 global climate 1985 90 00 10 leaders to mold itself in the mainlands omy is making Hong Kong more depen- speech that characterized the city, said
agreement next month,
Source: World Bank image. That is despite Beijings dent on the mainland than ever. Main- Yeung Ke-cheong, 35 years old, a candi-
bringing the deal closer to
THE WALL STREET JOURNAL. pledges to keep the city largely auton- land tycoons and state-owned Please see CHINA page A6
taking effect this year. A5
 Corbyn called for the
U.K. Labour Partys parlia-
mentarians to rally behind
At 13 Pounds, This Novel Just
him after his re-election as
opposition party leader. A4
Lands With a Thud Seconds
i i i Shy of
Bottoms Dream is 1,496 pages History
Inside of linguistic cartwheels; no e-readers CLOSE CALL:
JOURNAL Kenenisa Bekele of
Ethiopia, left, won
REPORT B4 BY STEVEN NORTON the novel tells the story of two the Berlin Marathon
translators and their teenage on Sunday, finishing
Innovations An experimental German daughter who visit a scholar as six seconds behind
novel first published in 1970 is they try to interpret the writ- Dennis Kimettos
In Health Care

set to be one of the biggest ings of Edgar Allan Poe. In- world record set in
books of the season. The pub- spired by James Joyces 2014 in Berlin.
lisher hopes you cant put it Finnegans Wake, it chronicles Bekeles time of two
CONTENTS Markets Digest..... B6 down. events of a single hours, 3 minutes
Business & Fin.. B1-3 Opinion.............. A12-13
Crossword............... A11 Review................. A8-10
At more than 13 day with lewd jokes and 3 seconds is
Europe File............... A2 Sports........................ A11 pounds, it is not easy and linguistic cart- the second-best
Finance & Mkts B5-8 U.S. News.................. A7 to pick up. wheels. mark ever. A11
Heard on Street.... B8 Weather................... A11 The first English- Tony Messenger, a
Journal Report...... B4 World News........ A2-5
language release of 53-year-old book
China: RMB28.00; Hong Kong: HK$23.00;
Indonesia: Rp25,000 (incl PPN);
Bottoms Dream, blogger in Australia,
all 1,496 pages, received Bottoms
Japan: Yen620 (incl JCT); Korea: Won4,000;
Malaysia: RM7.50; Singapore: S$5.00 (incl GST)
KDN PP 9315/10/2012 (031275); MCI (P)
NO. 106/10/2015; SK. MENPEN R.I. NO: 01/
weighs as much as a
bowling ball. With a
Dream earlier this
month. He planned
Spending on Warplanes Spurs Arms Race
14-inch spine, the to read five pages a BY ROBERT WALL ity, spurring a new arms race. heightening urgency among
weighty hardcover day, which would Some of the hardware, both Western military brass to push
tome could topple a Bottoms Dream take him about a For more than two de- planes and antiaircraft capa- for their own, next-generation
flimsy nightstand. year to finish. Then cades, combat aircraft flown bilities, is expected to roll out combat planes.
Its a monster in all ways, he opened it. I now realize that by the U.S. and its European in the next few years. The up- The most pressing chal-
said Stephen Sparks, a book was overly ambitious, he said, allies have pretty much grades come as Moscow flexes lenge for the United States Air
buyer and seller at Green Apple and decided on two years. owned the sky. Now, Russia its muscles in hot spots such Please see COMBAT page A2
s Copyright 2016 Dow Jones & Books in San Francisco. The book contains layers of and China are spending lav- as Eastern Europe and the
Company. All Rights Reserved
Written by German author complex language and a multi- ishly on new weapons that Middle East and Beijing does  Foreign jet-fighter companies
Arno Schmidt, who died in 1979, Please see BOOK page A6 could challenge that superior- so in the South China Sea rush to woo India.................... B1
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A2 | Monday, September 26, 2016 THE WALL STREET JOURNAL.


EU Pushes Back Against Protectionist Forces

jobs dependent on exports. Trade Organization, China is
But public opinion is increas- currently treated as a non-
ingly wary of globalization. market economy, allowing
Both Brexit and the rise of WTO members to apply dis-
antiestablishment insurgent criminatory trade defenses.
parties has been widely per- But this deal expires in De-
EUROPE FILE ceived as a howl of rage by cember. Some EU member
SIMON NIXON left-behind voters, who states had argued that since
blame globalization for ris- China still clearly isnt a
ing inequality, growing job market economy, the EU
The European Union has insecurity, stagnant wages should refuse to change its
always had an ambivalent at- and the erosion of demo- policies rather than expose
titude toward free trade. The cratic controls. sensitive industrial sectors
early days of the European to highly subsidized compe-

project were characterized ven so, Europes free tition. The commission plan,
by tensions between the traders arent giving instead, would see the EU re-


countries that believed a in without a fight. At vamp its trade defenses in a
continent with few natural an informal meeting last way that maintains current
resources week, EU trade ministers levels of protection without
had no took three important steps discriminating against China.
choice but to to try to signal their contin-

be open to ued commitment to open an the EU hold the line
the world markets. against rising protec-
and those The first was to signal tionism? EU leaders
that believed their strong backing for the Protesters in Bratislava, Slovakia, enlisted a Trojan horse as a symbol for EU trade deals last week. could still derail CETA or
in a fortress Europe pro- Canada-EU Comprehensive pull the plug on TTIP in Oc-
tected by high tariff walls. Economic and Trade Agree- olution mechanism would vestment Partnership with and keep alive the possibility tober. And the China com-
That battle looked to have ment, or CETA. This has be- hand too much power to cor- the U.S. This move was that TTIP might be revived. promise may yet fall apart.
been decisively won by the come a totemic test of the porate interests. Trade min- largely symbolic since every- The third step was poten- On the other hand, EU
free traders in the early EUs commitment to free isters decided against re- one accepts that there is no tially the most politically trade officials insist that
1990s, when the EU simulta- trade and whether it can opening the talks, hoping chance of a deal before the sensitive. Trade ministers there is no prospect of turn-
neously signed on to the continue to be taken seri- instead to assuage those U.S. presidential election. agreed to back a commission ing back the clock on free
Uruguay Round of the Gen- ously as a partner. After all, concerns via a legally bind- proposal to overhaul the trade, since this is virtually

eral Agreement on Tariffs this deal has been hailed on ing joint declaration and by everal EU member EUs anti-dumping policies in impossible under the EU sys-
and Trade, which opened up both sides as a new kind of carving out the most conten- states would have liked a way that would allow the tem, in which trade policy is
vast swaths of European in- trade agreement, packed tious issues for separate rat- to take this opportu- EU to recognize China as a an exclusive EU responsibil-
dustry to global competition, with safeguards for workers ification by national parlia- nity to kill TTIP for good, or market economy and thereby itya deliberate decision to
and embraced radical inter- rights and the environment ments. This should allow EU at least rip up the European avoid a trade war. put the bloc beyond the
nal free trade with its single- and respect for national leaders to ratify the bulk of Commissions mandate. But This issue had threatened reach of domestic political
market project. sovereignty. CETA at an Oct. 27 summit, by agreeing to stick with the to become a major test of pressures. The real danger
Yet now the old tensions Yet the deal still ran into paving the way for its provi- current mandate, trade min- the EUs commitment to the for the EU is that as trade
are resurfacing. The EU to- opposition from some mem- sional application in 2017. isters have backed the com- rules-based multilateral trad- moves to center stage, those
day may be deeply inte- ber states, amid concerns The second step was to mission, which was eager to ing system. Under the terms domestic political pressures
grated into the world econ- that the proposed investor refuse to pull the plug on the preserve what has already of a deal struck in 2001 risk undermining the legiti-
omy, with one in every seven protections and dispute-res- Trans-Atlantic Trade and In- been achieved in the talks when it joined the World macy of the EU itself.

PROFIT yet again report the largest

year-on-year earnings de-
cline of all sectors in the S&P
500, with a drop of 66% ex-
Low Expectations
Analysts have cut their forecasts for U.S. corporate-earnings
growth and expect the slump to continue.
2014, according to analysts
polled by FactSet. Nine of the
eleven sectors are predicted to
report year-over-year sales
arent concerned with the
stock markets gains in the
face of earnings contraction
a dynamic that stretches valu-
Continued from Page One pected. It would mark the growth during the third quar- ations, a metric investors use
to the earnings recession. eighth consecutive quarter Analysts forecasts, S&P 500 earnings, ter. Consumer-discretionary to evaluate whether stocks are
After the battered energy that energy companies in the S&P 500 earnings, change from a year earlier companies lead with a pro- overpricedbecause the gains
sector, the newly carved-out index have reported a year- change from a year earlier jected rise of 8.7%. have been relatively slow and
real-estate sector of the S&P on-year fall in earnings, Fact- Grim corporate results ha- steady.
6% 9%
500 has had the second-steep- Set data show. vent kept stocks from reach- The S&P 500 is trading at
est earnings revision for the Oil giant Exxon Mobil Corp. Full-year 2016 ing highs. Since the start of 19.7 times its past 12 months
third quarter. One of the big- was expected to report 80 4 Third quarter 6 this period of earnings con- of earnings, above its average
gest drops was from real-es- cents a share of earnings for traction, the end of March of 16 times earnings over the
tate investment trust SL Green the third quarter as of the end 2015, the S&P 500 has risen past decade, according to
Realty Corp., which analysts of June, but as of Friday that 2 3 about 4.7% and hit 15 fresh FactSet.
now expect to report a $2.51- expectation had worsened to 0.3%* records. However, stock prices are
a-share loss in the third quar- 66 cents a share. 0 0 One reason for stocks meant to be forward looking,
ter, down from a 15-cent loss Even as U.S. oil prices have climb even as earnings shrink some say. And indeed, analysts
projected for the quarter as of stabilized, they still remain far is easy-money central-bank now expect earnings growth to
June 30, according to FactSet. below their 2014 highs and 2 3 policies. Some investors are resume in the fourth quarter.
Overall, the real-estate sector marginally below where they using the resulting low gov- The market is anticipating
is now expected to report a were this time last year. In the 4 2.3%* 6 ernment-bond yields as justifi- were going to see a resump-
6.4% fall in earnings for the third quarter of 2015, the av- cation to buy more stocks in a tion of earnings growth, and I
2016 2014 15 16
quarter. erage price of U.S.-traded oil search for yield, pushing up think thats the right perspec-
DuPont Co. was a drag on was $46.50 a barrel. In the *Estimate as of Sept. 23 Source: FactSet THE WALL STREET JOURNAL. major indexes. tive, said David Lefkowitz, se-
the projected earnings- third quarter of 2016 through Investors dont care about nior equity strategist at UBS
growth rate for materials Friday, the price of U.S. oil av- falling stock prices. On aver- ter than the forecasts. Earn- fundamentals as long as cen- Wealth Management Americas.
companies, while Ford Motor eraged $44.79 a barrel. age, earnings estimates are ings growth for the S&P 500 tral banks have their back, If we were talking about an
Co. has contributed to a de- In four of the past five revised lower during the comes in on average 2.8 per- said Jack Ablin, chief invest- earnings outlook where earn-
crease in earnings expecta- quarters, S&P 500 earnings three months ahead of the centage points ahead of esti- ment officer at BMO Private ings were going to be con-
tions for consumer-discre- would have been positive if quarterly reporting season, mates, FactSet data show. Bank, though he added that he tracting for as far as the eye
tionary companies, according the energy sector was stripped according to FactSet. Revenue growth, mean- finds the lack of earnings can see, Im fairly confident
to FactSet. out, according to FactSet. Those revisions make the while, is set to return to com- growth for such a long period that the market wouldnt be
For the third quarter, the Declining earnings fore- forecasts easier to beat, and panies in the S&P 500 for the is certainly problematic. within a hairs breadth of an
energy sector is projected to casts dont necessarily mean actual earnings tend to be bet- first time since the end of Some analysts say they all-time high.

COMBAT however, can be traced back to

the 1970s. The Air Force has
flown its F-15 since 1975. The
widely used F-16 has been oper-
rapidly closing the gap with
Western air forces across a
broad spectrum of capabilities,
the Pentagon said this year in
twice the previous range.
That enormously compli-
cates the challenge of conduct-
ing any type of military opera-
head of the services Air Com-
bat Command, said at an air
show in England in July.
The U.S. Navy in May kicked
Tornados, developed with Italy
and the U.K., which entered
Luftwaffe service 37 years ago.
Paris, in addition to working
Continued from Page One ational since 1979, and the U.S. its annual assessment of the tion, said David Deptula, a off an 18-month assessment of with the U.K. on new concepts,
Force is the rise of peer com- Navys F/A-18 was first de- Chinese military. retired U.S. Air Force lieuten- how to replace its F/A-18E/F plans to upgrade the Rafale
petitors with advanced mili- ployed in 1978. Chinas J-20, which resem- ant general. Super Hornet multi-role com- combat plane to keep it effec-
tary capabilities rivaling our Those older planes are also bles the U.S. F-22, started fly- China this year deployed its bat jet, with a target date tive against evolving threats, a
own, Air Force Chief of Staff the backbone of the air forces ing in 2011, though it hasnt yet HQ-9 surface-to-air missile around 2035. French Defense Ministry
Gen. David Goldfein told law- of many Asian and European entered military service. A year system to the Paracel Islands The Pentagon is still defin- spokesman said.
makers in June, days before allies, along with newer jets later, Beijing began flight trials in the South China Sea, a ing exactly what it wants in a
being confirmed in the job. like Frances Rafale and the of the FC-31, a look-alike of the chain that is also claimed by new plane, but such plane THE WALL STREET JOURNAL.
Two months later, the U.S. Eurofighter. U.S. F-35. Vietnam. makers as Boeing Co., Lock- Dow Jones Publishing Company (Asia)
Air Force certified its new F-35 Russia plans to start fielding Chinas Defense Ministry To counter those new heed Martin Corp. and Nor- 25/F, Central Plaza, 18 Harbour Road,
Hong Kong
Joint Strike Fighter. Designed its first stealth fighter, the referred to its response in threats, the U.S. Air Force, in a throp Grumman Corp. have all Tel: 852 2573 7121 Fax 852 2834 5291
to be hard to detect, the plane T-50, in 2018. The twin-engine May to the Pentagons report recent assessment of combat started circulating futuristic
Paul Beckett, Asia Editor
is specially built for the sort of plane is designed to be highly when it expressed strong dis- needs, recommended introduc- drawings of what such a plane Troy McCullough, Senior News Editor, Asia
limited, precision strikes that maneuverable and equipped satisfaction and resolute op- ing long-range missiles or might look like. David Holland, News Editor, Asia
Margaret de Streel, International Editions Editor
have become a hallmark of with sophisticated electronics position and accused the U.S. other weapons that would al- The U.K. Defense Ministry Darren Everson, Deputy International Editor
Western military action since to spot enemy aircraft from of improper comment on is- low current planes to strike said it plans a number of tech-
Hugo Restall, Editorial Page Editor
NATOs bombing campaign in miles away. sues including Chinas weap- targets while remaining out- nology maturation efforts in
Bosnia in the 1990s. Meanwhile, it has deployed ons development. side the range of an adver- conjunction with the U.S. and Mark Rogers, Advertising Sales
Jacky Lo, Circulation Sales
What is considered the Fer- some of its latest combat The U.S. still maintains an sarys defenses. France. It is buying the F-35, Jacquelyn Drozdoff, Communications
rari of combat jets, the F-22, is planes, such as the Su-34 edgeits radar-evading planes It is also already pushing but is also pursuing its own ef- Simon Wan, Technology
still relatively new, first fielded bomber and Su-35 fighter, to are operational, while Russia new planes, targeting 2030 for forts, the ministry said. Jonathan Wright,
Managing Director Asia & Publisher
in 2005. Designed to shoot Syria. Russias Defense Minis- and China are still developing an upgraded model, U.S. Air Germany, too, wants a com-
down enemy aircraft while fly- try couldnt be reached for theirs. But it isnt just new air- Force Gen. Herbert J. Carlisle, bat aircraft to replace its aging Advertising through Dow Jones Advertising
ing as fast as twice the speed comment. craft raising concerns. Sales: Hong Kong: 852-2831 2504; Singapore:
65-6415 4300; Tokyo: 81-3 6269-2701;
of sound, it has more recently China has historically relied Both China and Russia are Frankfurt: 49 69 29725390; London: 44 207
evolved into a bomber, too, and
can soak up intelligence over
on Russian designs, many older
and some built domestically
also fielding more sophisti-
cated antiaircraft systems.
CORRECTIONS  842 9600; Paris: 33 1 40 17 17 01; New York:
1-212 659 2176.

Or email: Mark.Rogers@wsj.com
enemy territory. under license. That is starting Moscow says its new S-400 can
Printers: Hong Kong: Euron Limited, 2/F., Block 1,
More than three-fourths of to change with the new proj- shoot down planes at a range Tai Ping Industrial Centre, 57 Ting Kok Road, Tai
Po, Hong Kong; Indonesia: PT Gramedia Printing
the U.S. fleet of jet fighters, ects. The countrys air force is of up to 236 miles, or roughly Group, Jalan Palmerah Selatan 22-28, Jakarta
The last name of Brian day duties other foundations 10270; Japan: The Mainichi Newspapers Co., Ltd.,
1-1-1 Hitotsubashi, Chiyoda-ku, Tokyo, 100-8051;
Killgore, spokesman for the typically assign to executive di-
Dogght Fremont Unified School Dis- rectors, but that isnt her title,
Korea: JoongAng Ilbo. 100 Seosomun-ro, Jung-gu,
Seoul, 100-814. Publisher/ Printer: Song, Pil-Ho;
Malaysia:Dasar Cetak (M) Sdn Bhd, Lot 2, Jalan
The world's major powers are developing more advanced combat jets trict in California, was mis- as was incorrectly reported in Sepana 15/3, Off Persiaran Selangor, Seksyen 15,
40200 Shah Alam, Selangor. (ROC No: 048885)6;
as they seek to keep or gain an edge in the skies over potential adversaries. spelled as Kilgore in a Page a Page One article Thursday Singapore: Singapore Press Holdings Limited, 82
Aircraft Origin Range, in miles Max speed One article in the Friday-Sun- about former U.S. President Bill Genting Lane Media Centre Singapore 349567
day edition about U.S. charter Clintons speaking fees. Trademarks appearing herein are used under
F-22 U.S. Mach 1.7 schools becoming embroiled in license from Dow Jones & Co.
2015 Dow Jones & Company. All rights reserved.
a proxy fight between Turkeys Paris is one of the coun- USPS 337-350; ISSN 0377-9920

F-35 U.S. Mach 1.6

president and Muslim cleric tries in the running to host
Fethullah Gulen. the 2024 Olympics. A Page NEED ASSISTANCE WITH
One article in some editions YOUR SUBSCRIPTION?
Rafale France Mach 1.8
Elizabeth Musmanno is Thursday about Romes mayor By web: http://wsj-asia.com
president of the Fragrance saying she wont support her By email: service@wsj-asia.com
Euroghter Europe* Mach 2.0 Foundation, a perfume indus- citys bid to host the Games By phone: Hong Kong: 800 901 216; Australia:
0011 8000 322 8482; China: 400 991 1174;
try trade group. Ms. Mus- incorrectly said Paris had India: 000 800 440 1938; Indonesia: +62 21
T-50 Russia Mach 2.0 manno performs the day-to- pulled out of the running. 2970 2702; Japan: 0120 779 868; Korea: 0030
844 0063; Malaysia: 1800 804 612; New
Zealand: 0800 442 434; Philippines: 1800 1441
0 500 1,000 1,500 2,000 2,500 0033; Singapore: 1800 823 2042; Taiwan:
Readers can alert The Wall Street Journal to any errors in news articles by
THE WALL STREET JOURNAL. 00801 444 141; Thailand: 001800 441 8323
*Includes U.K., Germany, Italy and Spain Source: IHS Markit Janes emailing wsjcontact@wsj.com.
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THE WALL STREET JOURNAL. Monday, September 26, 2016 | A3

New Fighting in Aleppo Kills Hundreds
Powerful bombs have
shaken the Syrian city
since a cease-fire
collapsed last week

Hundreds of civilians have

been killed in the Syrian city
of Aleppo since a cease-fire
broke down last week, accord-
ing to rescuers, medical work-
ers and rebels who said on
Sunday the toll is due in part
to powerful bombs being
dropped on the city.
Rebels and opposition lead-
ers blamed Russia, Syrias key
ally, for the bombs, which resi-
dents said left craters much
larger than those seen in past
airstrikes and caused shock
waves that destroyed build-
ings streets away from the
point of impact.
The Russian Defense Minis-
try didn't immediately re-

spond to a request for com-
ment on allegations that the
weapons had been dropped on
rebel-held Aleppo.
The first time one struck
everyone thought there was an
earthquake, said Muhammad
al-Zein, who helps oversee
hospitals in the rebel-held part Men walking through rubble inspect damage on Sunday in a rebel-held neighborhood of Aleppo, a Syrian city that is a major battleground in the conflict.
of Aleppo. But the next day
another one hit and we real- Camp. Within hours, rebels ons and bunker buster added that the weapons civil defense group known as The attacks have reduced
ized it was not an earth- said they had retaken the ter- bombs and said the system- weren't dropped on populated the White Helmets. multistory buildings to a fine
quake. ritory. atic use of these types of in- areas, Interfax added. The U.S. and Russia haven't rubble within seconds, leaving
Much of the death toll came State media has been discriminate weapons in Local activists and medical ruled out trying to revive the rescuers combing through the
in the four days since the Syr- mostly quiet about the Aleppo Aleppos densely populated officials in Aleppo said Sunday truce. rubble with their hands as if
ian regime announced on offensive. But on Saturday, neighborhoods could amount that in addition to the power- Yasser Ibrahim al-Youssef, a excavating artifacts from sand,
Thursday the start of a new state news agency SANA to war crimes. ful bombs being referred to as political representative for the according to rescuers and vid-
offensive against Aleppos be- tweeted a video from inside a The U.N. called an emer- bunker busters, they were be- rebel group Nour al-Dine al- eos posted online.
sieged rebel-controlled neigh- nightclub with a DJ and pyro- gency meeting on Sunday over ing hit by phosphorus, cluster Zinki, said the attacks created Those rescued have been
borhoods. technics with the caption: the bombardment of Aleppo. and barrel bombs in opposi- craters 7 meters deep and 20 taken to overwhelmed hospi-
President Bashar al-Assad #Aleppo, now dubbed as the The Russian military has tion-held neighborhoods meters wide. The shock waves tals where doctors and nurses
has vowed to retake all of Worlds Most Dangerous City, acknowledged the use of mu- where some 300,000 people were being felt for about 10 are working as if in a daze,
Aleppo and the offensive was still boasts a thriving night- nitions in Syria that are de- live under siege by the regime. seconds and destroying build- said Mr. al-Zein.
the latest indication that he life. The tweet was widely signed to penetrate concrete The Syrian military and ings up to 75 meters away, he People are dying under our
aims to win the war militarily mocked on social media. structures, which Russian me- Russia kept up the bombard- said. hands because we are unable
despite repeated failed efforts United Nations Secretary- dia has called bunker busters. ment of rebel-held eastern On Saturday, rescuers were to cope, Mr. al-Zein said.
by the U.S. and Russia to reach General Ban Ki-moon said on Last November, a Russian Aleppo on Sunday, killing at pulling survivors and bodies When you have 50 injured
a lasting cease-fire and a dip- Saturday that Aleppo was fac- military spokesman said war- least 50 people, Mr. al-Zein out of a building in the Bustan you have to treat the most in-
lomatic solution. ing the most sustained and in- planes had struck Islamic said. More than 320 civilians al-Qasir neighborhood when jured and someone else might
Syrian state media reported tense bombardment since the State targets with two 1,100- have been killed since the they suddenly heard a building not get treated, they might
that the army on Saturday beginning of the Syrian con- lb. concrete-penetrating cease-fire collapsed a week on another street collapse, bleed out as they are waiting.
seized control of an area north flict in 2011. He reported the bombs, the news agency Inter- ago, said Ammar Ahmad trapping seven people under Nathan Hodge contributed
of Aleppo city called Handarat use of both incendiary weap- fax reported. The spokesman Alselmo, director of the Syrian the rubble, said Mr. Alselmo. to this article.
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A4 | Monday, September 26, 2016 HK JP KO ML SI IN UK FR MN PR THE WALL STREET JOURNAL.


FortuneTurns for Uzbekistan Ruling Family

New leadership
consolidates power
after death of Karimov,
displacing relatives


MOSCOWWhen Uzbeki-
stans longtime president, Islam
Karimov, died this month, one
person was conspicuously ab-


sent at his funeral: His daugh-
ter Gulnara Karimova, a former
pop star and businesswoman.
Ms. Karimova was once de-
scribed in leaked U.S. diplo-
matic cables as a possible suc-
cessor to her father. But her
absence from the state funeral
opened a window into the for-
tunes of the Karimov family
and the countrys new direc-
tion since his death. Gulnara Karimova, the late presidents daughter, has been under house arrest since 2014. Her sister and mother, center, met with Russias Vladimir Putin on Sept. 6.
Observers say the countrys
elite will likely maintain the sources at the moment are very 800 million Swiss francs ($823 thorities. In court documents, she took part, along with her ment between the Kremlin and
status quo to retain control scarce, said Alisher Ilkhamov, million) that, they said, Ms. U.S. authorities have described mother, Tatyana, in the tele- the West. But Tashkent has a
over their patches of the iso- an Uzbekistan analyst for the Karimova was the beneficial the Uzbek official as a relative vised funeral for Mr. Karimov. chance to tilt to Moscow, said
lated economy. Parliament ap- Open Society Foundations. owner of, according to people of the deceased president. Ms. But the countrys acting leader Livia Paggi, an analyst on the
pointed Prime Minister Shavkat Ms. Karimova was a highfly- familiar with the probe. Karimova was the relative, ac- is in a position to quickly consoli- Caucasus region and Central Asia
Mirziyoev acting president, ing member of the Karimov fam- Ms. Karimova couldnt be cording to people familiar with date his power, according to Cen- at risk assessment firm GPW.
paving the way for him to con- ily. The Harvard-educated busi- reached to comment. Grgoire the U.S. and Dutch rulings. tral Asia analysts. Russian state The U.S. and the West
solidate power ahead of elec- nesswoman served as Mangeat, a court-appointed Ms. Karimova has been out media and an Uzbek news outlet have significantly disengaged
tions planned for December. ambassador to Spain and aspired lawyer representing Ms. Kari- of public view since she have reported the government with Central Asia, she said.
But the Karimov family to pop stardom, filming a music mova in Switzerland, said he clashed with powerful people launched an investigation of an Observers say, however, that
whose members, by the ac- video that featured a cameo from has never succeeded in con- in her fathers government import market run by Ms. Kari- the new leader will ultimately
counts of diplomats and ob- French actor Grard Depardieu. tacting his client. over her growing power. Uzbek mova-Tillyayeva and her family. be beholden to the oligarchs.
servers, enriched themselves She has also held sway over Amsterdam-based Vimpel- authorities opened a tax-eva- Neither the late Mr. Kari- There are connections to
during the patriarchs 25-year some areas of the economy Com Ltd., one of the worlds sion investigation and placed movs younger daughter or his businesses in Russia, said Mr.
authoritarian reignwill now and was described as some- largest telecommunications her under house arrest in 2014. widow could be reached to Ilkhamov. But for Mirziyoev,
be vulnerable to asset seizures, thing of a robber baron in a companies, admitted in February Her younger sister has comment. A company represen- they will be second place to
analysts said. leaked U.S. diplomatic cable. to giving more than $114 million sought to raise her profile tative denied that the company keeping other business clans
What Karimovs family has Swiss prosecutors have in bribes to an Uzbekistan offi- since their fathers death. Lola was subject to investigations. and local oligarchs happy.
gained so far could easily be named her as a suspect in a cial and agreed to pay more than Karimova-Tillyayeva was the Mr. Mirziyoev, the countrys David Gauthier-Villars
subject to confiscation by the criminal corruption probe $795 million in civil and criminal first to publicly say the presi- new leader, has praised his pre- in Stockholm
new leadership, because the re- launched in 2012. They seized penalties to U.S. and Dutch au- dent had suffered a stroke. And decessors policy of nonalign- contributed to this article.

Bank of England SleuthsTake Brexits Measure Prospects

Support Network
Dim for
LONDONSeeking clues to
the U.K. economys health af-
ter voters chose to leave the
Post-Brexit reports from the Bank of England's regional agents
suggest companies are cautious on investment; index based on
planned investment compared with previous three months.
European Union, Bank of Eng-
land officials are turning to
their envoys scattered across
Agent scores for investment intentions
Trade Pact
Services Since Brexit vote
With hard data on the econ- 2.0
omy only slowly trickling out, Negotiations over a far-
the hope is the network of re- reaching trade pact between

gional agents will uncover the U.S. and the European

scraps of information that give Union will almost certainly not
officials in London an edge 1.0 be finished during President
as they have in the past. Barack Obamas presidency, Eu-
The BOE has 12 outposts 0.5 ropean trade ministers con-
across the U.K., staffed by 29 cluded during a meeting Friday.
agents and their deputies. In Manufacturing The worlds two biggest eco-
part a legacy of the days when nomic blocs have been negoti-
the BOE was a private bank 2013 14 15 16 ating the Transatlantic Trade
with branches in British towns Note: A score of -5 indicates a steep decline; zero is unchanged and Investment Partnership, or
and cities, they keep in close Source: Bank of England THE WALL STREET JOURNAL. The Bank of England, based in London, has 12 outposts in the U.K. TTIP, since 2013, and have re-
touch with the businesses on peatedly said they hope to con-
their patch to gather intelli- is distinguishing between their mediately change their hiring warning signs the agents un- agents in a typical month quiz clude negotiations before the
gence on the economy. The emotional reaction and what or investment plans but many cover critical to the course of hundreds of businesses on is- end of the Obama administra-
agents compile a monthly re- the business is going to do. said they would keep them un- policy. The central bank has sues including output, prices tion in January.
port for the central banks in- In their most recent report, der close review. Some export- penciled in annual growth of and the availability of finance. The debate showed that a
terest-rate setting panel led by published Wednesday, the ers said they expected a boost just 0.8% in 2017. The responses feed into the conclusion of the TTIP negoti-
Gov. Mark Carney. agents said the worlds fifth- in sales from the falling Official data so far suggest agents monthly scores, ations by the end of the year
Juliette Healey, the BOEs largest economy appears to pound, while others said they the economy has weathered which help officials plot the is unrealistic, said Peter Ziga,
agent for Yorkshire and the have slowed since the referen- anticipated a rise in costs. the initial postvote period well, course of the economy. They Slovakias trade minister who
Humber in Englands northeast, dum but is still growing, as Weighing these and other but third-quarter growth wont also highlight unexpected presided over the ministers
said she reached out to dozens healthy consumer spending data, the BOE in August cut its be published until next month. trends they have uncovered. meeting in the Slovak capital,
of business leaders in the days offsets more cautious behavior benchmark interest rate to a In the U.S., the Federal Re- Ive found [the agents] Bratislava.
after the June 23 vote. from companies. new low of 0.25% as part of a serves 12 regional banks simi- very useful, as the eyes and During Fridays meeting, all
Some of them were very In the wake of the referen- package of measures aimed at larly collect information from ears of whats going on at the ministers expressed their
shocked and worried, said dum, BOE officials asked the cushioning the economy. across the country to feed into company level, said Kristin doubts about being able to con-
Ms. Healey, who has also agents to dig deeper than BOE officials fret that un- officials decisions. Their find- Forbes, a former economic ad- clude this before the end of the
worked at the U.K. Treasury usual. The agents first postre- certainty over the U.K.s future ings are published eight times viser to President George W. Obama presidency, and indeed
and the International Mone- ferendum findings, published economic ties to the bloc may a year in a report known as Bush, who now sits on the it looks increasingly unlikely,
tary Fund. But what these late July, were mixed. Few weigh on spending, hiring and the Beige Book. nine-member Monetary Policy said Cecilia Malmstrm, the
people are very good at doing firms said they planned to im- investment, making early- In the U.K., the BOEs Committee. EUs trade commissioner.
Prospects for completing the
deal have suffered from weaken-

Re-elected Corbyn Faces a Divided Labour Party ing political support in Europe
as well as growing public criti-
cism, as anti-globalization senti-
ment has gained traction on
BY NICHOLAS WINNING sides which we sometimes was at times a rancorous sum- attract hundreds of thousands remains much more popular both sides of the Atlantic.
later come to regret, but al- mer campaign. of people to join Labour, than Mr. Corbyn and her Con- On Sept. 17, hundreds of
LONDONVeteran leftist ways remember in our party, Mr. Corbyn has faced criti- whose membership has soared servative Party holds a com- thousands of people marched
Jeremy Corbyn called for the we have much more in com- cism from moderate Labour to over half a million, more manding lead over Labour in through seven German cities
U.K. Labour Partys disaffected mon than that which divides parliamentarians since he was than double that of the Con- terms of voting intentions. to protest against the EUs
parliamentarians to rally be- us, he said. As far as Im the surprise winner of his first servative Party. We know from all the evi- planned trade pacts with the
hind him after he was re- concerned lets wipe that slate leadership election last Sep- But critics say that while dence that Labour are not go- U.S. and Canada, highlighting
elected leader of the opposi- clean from today and get on tember following the partys Mr. Corbyn has rallied a like- ing to win a general election a strengthening public back-
tion party by a solid margin. with the work we have got to defeat in national elections. minded section of the popula- under Corbyn, said Andrew lash against the blocs trans-
Mr. Corbyn won almost 62% do as a party together. But the veteran peace cam- tion, Labour isnt winning over Hawkins, chairman of polling Atlantic trade policies.
of the votes cast on Saturday Mr. Smith was one of sev- paigner has drawn enthusias- any new political ground un- company Communicate Re- The trans-Atlantic talks have
despite deep divisions in the eral members of Mr. Corbyns tic support from the partys der his leadership and his left- search. We have this bizarre generated more widespread
party over his policies and top team who resigned in late grass roots for his pledges to ist policies will alienate mod- democratic anomaly of Corbyn disapproval in Europe than in
leadership style, beating chal- June and called on the leader fight government spending erate voters who are often the being hugely popular but with Washington, where the Obama
lenger Owen Smith, Labour to step down. They had criti- cuts and scrap Britains nu- key to winning national elec- a tiny proportion of voters. administration is struggling to
announced at its annual fall cized him for his relatively clear weapons. He has helped tions. Polls indicate Mrs. May Mr. Corbyn urged people to get a major Pacific deal
conference in Liverpool. Mr. lackluster endorsement of help Labour build support for through Congress but would
Corbyn was widely expected to Britains membership of the an alternative to the Conser- also like to finish the lower-
win; attention has already European Union in the June vatives, in which the wealth profile talks with Europe.
shifted to whether he can referendum, despite the we all create is shared more If the EU and its member
bring together the partys partys pro-EU position. equally, and announced a La- states are prepared and have
warring factions and lift La- Some three-quarters of the bour campaign against selec- the necessary political will, we
bours poll ratings. partys lawmakers also said tion in education next Satur- can complete an agreement this
In a victory speech, Mr. they no longer had confidence day. The government was year, said Matt McAlvanah, a
Corbyn said it was his respon- in his leadership, with many threatening to take the coun- spokesman for U.S. trade repre-
sibility to unite the party but concerned that the party try backward and dithering sentative Michael Froman.
also the responsibility of La- would fail to win a national as we face the historic chal- If negotiations arent con-
bour members of parliament election with him in charge. lenges of Brexit, he said. cluded by the end of Mr.

to respect the result of the Despite the pressure, Mr. Together, arguing for the Obamas administration, then a
leadership vote and focus their Corbyn refused to step down real change this country natural pause will ensue while
energy on defeating the gov- and said he had the backing of needs, I have no doubt this the new president decides on the
erning Conservative Party of party members and would de- party can win the next elec- priorities, Ms. Malmstrm said,
Prime Minister Theresa May. fend against any leadership tion whenever the prime min- but she added that it is difficult
Elections are passionate challenge. Mr. Smith, a rela- ister decides to call it, and to tell how long it would be.
and often partisan affairs and tive unknown outside Labour form the next government. To William Mauldin
things are sometimes said in circles, stepped up to contest do that we need to work to- in Washington
the heat of the debate on all the leadership, triggering what Mr. Corbyn retained the leadership but faces a fractious party. gether, Mr. Corbyn said. contributed to this article.
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THE WALL STREET JOURNAL. Monday, September 26, 2016 | A4A

Space travel used to be the

occupation of nations and
superpowers, now its also the
pastime of millionaires. But
how can private investment take
space travel to new frontiers?

For a fresh perspective, visit

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A4B | Monday, September 26, 2016 THE WALL STREET JOURNAL.

The best-equipped reader survives.

Visit wsj.com/Markets

2016 Dow Jones & Co., Inc. All rights reserved. 6DJ3946
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THE WALL STREET JOURNAL. Monday, September 26, 2016 | A5


Criminal Link in Pyongyang Probe

BY CHUN HAN WONG In a stock-exchange filing, Ma and her company appears U.S. and South Korea say
Liaoning Darong Technology to mark a new effort by U.S. Hongxiang Industrials trade
BEIJINGA Chinese busi- Co. said it hadnt been able to and Chinese authorities to pur- with North Korea includes
nesswoman under U.S. scrutiny reach Ms. Ma, who chairs its sue Chinese businesses sus- goods that have both civilian
for her alleged role in aiding supervisory board, since the pected of supporting North Ko- and military purposes, includ-
North Koreas nuclear program company learned of the crimi- reas nuclear-arms program. ing applications in nuclear-
is also a suspect nal probe. It didnt The U.S. and China have often weapons development.
in a Chinese crim- specify when it sparred over how best to rein Chinese authorities in re-
inal investigation found out. in North Korea. cent weeks have frozen certain

into her trading Ms. Ma is the Liaoning police announced assets held by Hongxiang and
business, a corpo- s e c o n d - l a rge s t their investigation after prose- Ms. Ma, including her and her
rate filing shows. shareholder in cutors from the U.S. Depart- familys holdings in Darong,
Fridays disclo- Darong, an infor- ment of Justice made two trips which offers mapping and geo-
sure about Ma Xi- mation-technol- to Beijing last month to alert graphic data services.
aohong is the first ogy firm, with a Chinese officials about alleged It isnt known if the Liaon-
to tie her to a 17.2% stake, ac- activities by Ms. Ma and ing police probe is related to A truck crosses a bridge from Dandong, China, into North Korea.
criminal investiga- cording to other Hongxiang Industrial, The Wall the U.S. allegations.
tion. Police in the filings issued this Street Journal reported last Ms. Ma, a Communist Party were unsuccessful. Yao Jizhou, chairman until December,
northeastern Chi- month. In Fridays week. member, founded Hongxiang a Hongxiang Industrial official when she was appointed chair
nese province of Ms. Ma as seen in a filing with a Bei- The Justice Department Industrial in 2000 to trade and assistant to Ms. Ma, de- of its board of supervisors,
Liaoning said this company publication. jing-based ex- cited alleged evidence that Ms. commercial goods with North clined to comment. which monitors the perfor-
month that they change for mostly Ma and her company had aided Korea. She grew her business Calls to police in Liaoning mance of company executives
were investigating the trading smaller companies, Darong Pyongyangs nuclear program into a conglomerate, Liaoning province and in the Chinese and directors. Ms. Mas
firm that Ms. Ma founded, said Ms. Mas situation hasnt and its efforts to evade United Hongxiang Industrial Group, border city of Dandong, where mother-in-law and three sib-
Hongxiang Industrial Develop- affected its operations but Nations and Western sanctions, with some 680 employees cov- Ms. Ma and Hongxiang Indus- lings each hold roughly 1% of
ment Co., for alleged serious could have a negative impact according to U.S. officials. ering interests in cross-border trial are based, werent an- Darong shares.
economic crimes, without on the firm. In a report, researchers trade, hotels and tourism. swered. Junya Qian in Shanghai
naming her. The investigation into Ms. from nonprofit groups in the Attempts to reach Ms. Ma Ms. Ma was Darongs vice contributed to this article

India to Ratify Paris

Accord Next Month
BY NIHARIKA MANDHANA by the end of the year, all but
ensuring that the agreement
NEW DELHIIndia will rat- will take effect in 2016.
ify the 2015 global climate President Barack Obama,
agreement early next month, who championed the agree-
Prime Minister Narendra Modi ment, has pushed world lead-
said Sunday, bringing the deal ers, including Mr. Modi in two
a significant step closer to tak- recent meetings, to expedite
ing effect this year. their efforts to ratify. If the
The accord, struck in Paris pact comes into force this
by 195 countries, laid out a
path to curb global warming
year, the U.S. would be bound
to the agreement for four North America will export more
and, for the first time, re- years, potentially binding the
quired developing countries to
lower the trajectory of their
greenhouse-gas emissions
hands of the next president.
Under the deal, India didnt
agree to cap or cut its emis-
oil than it imports by 2020.
growth. sions like some other emerg-
But it can take effect only ing economies. Instead, New
once 55 countries, represent- Delhi pledged to ramp up its
ing 55% of the worlds green- use of renewable energy and
The global energy landscape is changing dramatically. For
house-gas emissions, ratify it. reduce its emissions relative example, North American oil and natural gas production
So far, 60 countries have done to its gross domestic product is sending the regions demand for imports plummeting
so, including the largest emit- by 33% to 35% by 2030 from
ters, the U.S. and China, fulfill- 2005 levels. This arrangement to historic lows. This creates opportunities as well as
ing the first condition. means emissions by India, the risks. CME Group gives producers and suppliers the
These countries together worlds fastest-growing large tools they need to capture these opportunities while
account for 47.76% of global economy, will continue to
emissions. Once India ratifies, grow but at a slower rate. managing risks in volatile oil and natural gas markets.
that figure will go up to nearly The Paris accord seeks to This is how the energy industry can deliver in the face of
52%, according to the World limit the earths warming to ever-changing consumer demand. This is how the world
Resources Institute, an envi- well below 2 degrees Celsius
ronmental think tank. (3.6 degrees Fahrenheit) above advances. Learn more at cmegroup.com/fuel.
Mr. Modi said at an event of temperatures at the start of
his Bharatiya Janata Party that the industrial age. It allows
India would ratify on Oct. 2. A nations to determine their
further 13 countries have also own emissions-reduction
committed to ratify the deal plans.

lawyer close to the case.

World A formal inquiry hasnt yet
been opened, according to the
Watch attorney. Mr. Temer likely wont
be investigated while he remains
in the top office, thanks to legal
protections afforded to sitting
Luciana Magalhaes
Triple Suicide Attack
Kills 11 Troops Three Police Officers
A triple suicide bombing Killed in Bomb Blast
against a security check point A homemade bomb planted
north of Baghdad killed at least in a road killed three police offi-
11 members of the security cers Friday in insurgency-
forces, a police officer said. plagued southern Thailand, offi-
The spokesman for the Sala- cials said.
huddin province police force, Col. Pongsak Khaonuan, a police
Mohammed al-Jabouri, said investigator in Yala province,
three militants rammed their ex- said the bomb was detonated as
plosives-laden vehicles into the the officers car passed over it,
main check point near the town wrecking the vehicle and killing
of al-Salam. He said 34 other se- the three instantly. Another offi-
curity officers were wounded. cer was taken to a hospital with
Mr. al-Jabouri said the attack injuries. Police said they believe
occurred as the local police chief Muslim separatist insurgents
and head of the provincial secu- were behind the attack.
rity committee were visiting the More than 6,000 people have
site. Both escaped unharmed. been killed since the insurgency
Almost at the same time, an- flared in 2004 in Thailands three
other group of militants on foot southernmost provinces, the only
attacked a check point at the ones with Muslim majorities in
eastern edge of the province, the predominantly Buddhist
killing four policemen and country. Roadside bombings and
wounding two others, he said. drive-by shootings are common
One militant was killed in that tactics of the insurgents, while
attack, while the others fled the the government has blanketed
scene, he said. the region with soldiers.
Associated Press Associated Press

Top Court Approves
Probe of President Consumer Prices
Brazils Supreme Court gave Rose in September
the green light to prosecutors to Vietnams consumer price in-
open a probe into corruption al- dex in September rose 3.34%
legations that President Michel from a year earlier, led by an in-
Temer is linked to a sprawling crease in the cost of health care
graft scandal centered on the and education services, govern-
nations state-run oil company. ment data released Saturday
Brazil Supreme Court Judge showed.
Teori Zavascki on Friday ap- The cost of health-care ser-
proved the preliminary investiga- vices and medicines rose 33.43%
tion, which is based on plea-bar- in the period, while the cost of
gain testimony by a key witness education services was up
that allegedly implicates Mr. Te- 10.30%, the General Statistics
mer and several high-ranking Office said in a statement. CME Group is a trademark of CME Group Inc. The Globe logo is a trademark of Chicago Mercantile Exchange Inc. All other trademarks are the property of their respective owners.
members of his Brazilian Demo- Transport costs, meanwhile, fell Copyright 2016 CME Group. All rights reserved.
cratic Movement Party or PMDB, 5.70% because of lower fuel
including Senate President Re- prices.
nan Calheiros, according to a Vu Trong Khanh
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A6 | Monday, September 26, 2016 THE WALL STREET JOURNAL.


BOOK dered 30 copies for a coming

event with the books translator,
John E. Woods: 15 boxes
showed up, two books per box.
Such heft isnt common for
literary fiction. The 1996 hard-
cover edition of David Foster
Wallaces Infinite Jest, a
a longer book, he said, but I
had no idea.
German literature fans may
wonder where they will keep
hiking britches; He, tall=thin &
hairy). / :
dYou even listen ? To what
I said ?
Continued from Page One Mr. Sparks said he had to play benchmark of the contemporary the book. It will probably stay More than 1,000 copies of
tude of allusions to Joyce, Poe, a little Tetris to squeeze just mega-novel, is 2 inches thick put on the dining room table, Bottoms Dream have been
Shakespeare and other literary two copies onto the New Fiction and weighs 2.6 pounds, accord- like a weird centerpiece, Mr. ordered by U.S. bookstores, said
giants. Heavy stuff. For refer- table. The store has sold two; 16 ing to Amazon.com. A 1992 edi- Sweterlitsch said. John OBrien, founder of Dalkey

ence, Mr. Messenger keeps an line the top of a bookshelf; 10 tion three-book box set of Leo Others wonder whether they Archive Press, the books pub-
iPad and Poes collected works remain in boxes. Tolstoys War and Peace tips will be able to finish it. The cu- lisher; 2,000 were printed.
nearby. The single copy of Bottoms the scales at 4.1 poundsless rator of the literary blog The Mr. OBrien said the idea
You spend more time goo- Dream at Brazos Bookstore in than a third the weight of Bot- Untranslated said he planned of an electronic version was
gling and finding other books Houston sometimes joins the toms Dream. to read the English version af- raised with the Arno Schmidt
than you do actually reading, staff recommendation display, Shipping delivers another Benjamin Rybeck opens the ter he recovers from the shell- Foundation, which has the fi-
he said. where it fits only on the top plot twist. Green Apple in San 1,496-page Bottom's Dream. shock of trying to read the nal say.
Mr. Schmidts oversize novel shelf, towering over the compe- Francisco offers 99-cent flat- original in German. For all but hard-core
is a standout in the e-reader tition. The rest of the time it rate shipping. That means the the past weeks. I dont think there are that Schmidt fans, Bottoms
age. There is no Kindle version. sits with the art books, said store will eat about $8 for ev- My 5-year-old daughter can many people in the world who Dream is likely to be little
The volume isnt likely to fit in Benjamin Rybeck, the stores ery delivered copy of Bot- usually lift packages that come can confidently say that more than an art object, ac-
purses or briefcases; a back- marketing director. The fiction toms Dream. Mr. Sparks said to our house, said David Auer- theyre going to read itand cording to those who have
pack, maybe, or something shelves are too small. he doesnt mind, given the bach, a tech columnist at Slate. deliver on the promise, said seen it.
with wheels. At 1,325,000 Big books can be big busi- novelty of the massive book, She couldnt lift this one. He the curator, who gave his I suspect it will mainly be
words, it is more than double ness. German art book publisher which was released Friday says he reads it on the floor. name only as Andrei. a conversation piece, said Mi-
the length of War and Peace Taschen is known for signed, with a $70 list price. Thomas Sweterlitsch, a fic- He might have a point. From chael Orthofer, founder of
and Atlas Shrugged. limited editions that often come Readers who preordered tion writer in Pittsburgh, mis- the novels first page: Complete Review, a literary
Bottoms Dream is also with a book stand. One release, Bottoms Dream expressed took the Amazon package for a (P had mutterd meanwhile. website. Im not sure about a
proving a weighty challenge for GOAT: A Tribute to Muham- excitement and surprise when three-pack of laundry detergent He towerd, coffee-table additionit would
booksellers. Green Apple or- mad Ali, weighs 75 pounds. it thudded on their doorsteps in he had ordered. I knew it was above & belo, from out his crush mine.

CHINA tions amid record turnout.

The Chinese governments
Hong Kong and Macau Affairs
Office warned after the vote
Continued from Page One that independence violates


date disqualified from recent Chinas constitution and Hong
elections for Hong Kongs 70- Kong laws and harms the terri-
member Legislative Council. torys prosperity and stabil-
Nearly half its seats are re- ity. It said it supports the
served for constituencies that Hong Kong government in le-
represent largely pro-Beijing gally punishing Hong Kong in-
and business interests. Hong dependence activities.
Kongers are more like second- China denies any stepped-
class citizens in China now, up pressure on Hong Kong.
he said. Mainland officials routinely
Zhang Dejiang, the Commu- call for strict adherence to the
nist Partys No. 3 official, has Basic Law, Hong Kongs post-
said that Hong Kong has unique handover constitution, and to
advantages that cant be repli- the principle of One Country,
cated by other Chinese cities Two Systems, which guaran- The pull of Chinas giant economy is making Hong Kong, long an outpost of free trade, more dependent on the mainland than ever.
and criticized a very small mi- tees Hong Kongs different
nority of people for advocat- way of life.
ing independence.
Keeping Hong Kong in line
Hong Kongs leaders say the
territory continues to enjoy a
The Case of the
is a major test for President Xi
Jinping, the countrys most
high degree of autonomy. It re-
mains a bastion of freedom
powerful leader in decades, as compared with the mainland, Hong Kongers are sensitive
he consolidates control amid with street protests, open ac- about encroachment by main-
factional opposition. cess to the internet and some land law enforcement. Last
In Beijings view, China newspapers that can be critical year, several Hong Kong book-
faces threats along its perime- of mainland policies. sellers disappeared after pub-
ter, from Uighur militants in Hong Kong was hardly a lishing thinly sourced, salacious
the far western Xinjiang re- model of democracy under tell-alls about Chinas leaders.
gion, separatists in Tibet and British rule, and China has pro- They turned up later in deten-
Taiwanese leery of the main- vided benefits. Strapped to the tion in mainland China.
lands embrace. Allowing Hong rocket ship of Chinas economy, In a June press conference
Kongers to push for indepen- the citys gross domestic prod- after his release, one of the
dence would set a troubling uct has grown substantially booksellers, Lam Wing-kee, al-
precedent and possibly inspire since the handover. leged that he was abducted at
more calls for autonomy or po- Yet Hong Kongs role in the a Shenzhen border crossing
litical reform elsewhere. It Chinese economy has dimin- and held by a special task
could embolden Mr. Xis oppo- ished. In 1997, its GDP was force of the central Chinese
nents within the Communist 18.5% of Chinas. In 2015, it was government for eight months,
Party, which next year anoints just 2.9%. without charges. Previous
a new leadership that Mr. Xi The citys status as a spe- A market in Hong Kong sells Mao paraphernalia. Mainland Chinese are driving a tourism boom. statements that Mr. Lam and
wants to dominate. cial administrative region can- four similarly detained col-
Anson Chan, a former Hong not last foreverthis is imprac- leagues had made from China
Kong chief secretarythe citys tical, said Kingsley Sit, who were scripted and made under
No. 2 officialsaid in a recent directs a research office for the duress, he said.
speech that challenges to Hong Heung Yee Kuk, an advisory Mr. Lam said one colleague,
Kongs rule of law and civil lib- group that represents rural in- Lee Bo, was spirited away di-
erties are coming so thick and terests outside central Hong rectly from Hong Kong.
fast they no longer even seem Kong and has long backed Bei- Hong Kongs top official,
to cause surprise. jing. The major trend is grad- Chief Executive Leung Chun-
She cited threats to aca- ual integration into China. If ying, said he would write a let-
demic freedom at local univer- Hong Kong became indepen- ter to the mainland govern-
sities, a series of violent at- dent, how feasible would that ment to express concern and
tacks on local journalists and be? Lets do something wise. called for tweaks to the sys-
the disappearances of several In a sign of worries in the tem for notifying the govern-

book publishers who reap- territory, the film Ten Years, ment when a Hong Kong resi-
peared in the custody of main- a collection of vignettes that dent is detained in the
land authorities. envisioned a politically circum- mainlandgestures pro-democ-
Frustrated by a lack of prog- scribed Hong Kong one decade racy lawmakers and activists
ress on what they saw as Bei- from now, was a surprise suc- criticized as underwhelming.
jings promise that Hong Kongs cess over the past year. In one The Chinese Ministry of
chief would be elected by popu- vignette, mainland officials Public Security acknowledged
lar vote, not selected by a stage an assassination attempt inadequacy in the notification
1,200-member committee to spur passage of a national- mechanism between Hong
stacked with Beijing loyalists security law in Hong Kong. In Kong and China.
and businesspeople as it is cur- another, a taxi driver who cant The court built a century ago for the British colony, left, is now Hong Kongs Court of Final Appeal. Ned Levin and Chester Yung
rently done, some young people speak Mandarin struggles to
now advocate independence. find business as the citys na- nese internet firm, pulled out 2047 wasnt spelled out. Many fixed things. So they have to Mainland Chinese companies
That is a leap from 2014, when tive Cantonese language is rele- of agreements to broadcast the locals hoped China would de- take stronger measures. such as China Mobile Ltd. and
student-led protesters occupied gated to second-class status. awards in the mainland. CCTV, mocratize and that its political Beijing issued a policy paper Tencent dominate Hong Kongs
central Hong Kong and de- Banned in the mainland, the Tencent and the award organiz- system would converge with in 2014 emphasizing limits to Hang Seng Index. At the time
manded democracy but not an movie won best film at the ers didnt respond to requests Hong Kongs over time, rather Hong Kongs autonomy. It has of the handover, the top 10
outright break with China. Sev- Hong Kong Film Awards. for comment. than the other way around, al- brought Hong Kong legislators listed companies by market
eral candidates calling for more Many Hong Kong cinemas The worries about Beijing though Chinas crackdown on to Shenzhen for talks on the capitalization were almost all
self-determination, including a didnt screen it or didnt add interference coincide with Tiananmen Square protests in territorys political system, led old-line British colonial firms
23-year-old college student showings to meet demand. questions about Hong Kongs 1989 damped those expecta- by high-level mainland officials. such as HSBC or conglomerates
who helped lead the protests, State broadcaster CCTV and viability as a top financial, tions. Mr. Ding estimates that owned by local tycoons.
won seats in the Sept. 4 elec- Tencent Holdings Ltd., the Chi- business and trading center. Beijing, by contrast, China likely has more than Chinese developers, many
Hong Kongs container port, the thought that pulling Hong 100,000 people in Hong Kong with government backing, are
worlds busiest as recently as a Kong closer into Chinas eco- who help it monitor the city. outbidding Hong Kong counter-
Mainland Inuence decade ago, slid to No. 5 last nomic orbit would win people An official at the central parts for public land, sold by
Since Britain's handover of Hong Kong to China in 1997, companies year as mainland ports such as over. It offered preferential Chinese governments liaison Hong Kongs government.
from mainland China have come to dominate Hong Kong's stock index. Shanghai expand. HSBC Hold- treatment on the mainland for office in Hong Kong declined to Mainlanders now make up
ings PLC decided this year not Hong Kong businesses, en- comment for this article. 12% of the students in Hong
Five largest companies by market capitalization to relocate its London head- couraged Chinese companies The Chinese government or Kongs university system, com-
in the Hong Kong Hang Seng Index quarters to Hong Kong, citing to invest in the territory and mainland corporations now pared with less than 1% in the
Place of headquarters: Hong Kong United Kingdom China Londons talent pool and inter- allowed millions of Chinese to have direct control or stakes in 1996-97 school year. In Au-
national status. travel there, creating a boom eight of Hong Kongs 26 main- gust, Hong Kongs education
1997 Present Hong Kong has been a bone for hotels and shops. stream media outlets, accord- department said that second-
of contention as far back as the In many ways, the strategy ing to the Hong Kong Journal- ary-school teachers advocating
Hutchison Whampoa
HK$259.43 billion 1 Tencent Holdings
HK$2.07 trillion
1840s, when an insubordinate
British captain took possession
backfired. Some middle-class
Hong Kong residents com-
ists Association. That has
contributed to a steady erosion
Hong Kong independence
could have their licenses re-
of the island in the First Opium plained about overcrowding of press freedom, the associa- voked. Mr. Leung, the Hong
War. The colony, with low from mainlanders and worried tion said. Kong chief executive, com-
Sun Hung Kai Properties
HK$222.82 billion 2 China Mobile
HK$1.97 trillion taxes, free-market policies and
Western rule of law, bloomed
that locals were being squeezed
by higher real-estate prices.
It cited the purchase of the
South China Morning Post by
pared teenagers interest in in-
dependence to drug use.
into a major trade entrept and Faced with opposition, Bei- Chinese internet giant Alibaba Many of Hong Kongs newly
Industrial and Commercial financial center and is now jing decided that doling out Group Holding Ltd. last year. elected legislators disagree.
Hang Seng Bank
HK$213.43 billion 3 Bank of China
HK$1.82 trillion
home to more than seven mil-
lion people.
economic favors had run its
course and that it had to get
Alibaba Executive Vice Chair-
man Joseph Tsai said editorial
We Hong Kong people need
to seize the opportunity to de-
In the 1980s, London and more visibly involved in Hong independence would be re- cide our own future, said 25-

HSBC Holdings China Construction Bank Beijing negotiated a handover Kong, Chinese political schol- spected. year-old Yau Wai-ching, one of
HK$208.97 billion HK$1.48 trillion deal that gave China control ars say. He also said in an interview the new legislators, suggesting
of foreign affairs and de- They gave out a lot of with a Hong Kong news web- the tension is unlikely to dissi-
fense. Hong Kong kept the candy, a lot of sugar, said Ding site that coverage of China was pate soon. Self-determination

Cheung Kong Holdings PetroChina right to maintain its own ju- Xueliang, a social scientist at neither complete nor healthy is our inherent right.
HK$175.76 billion HK$1.48 trillion diciary, manage its currency the Hong Kong University of because newspapers tended to Alex Frangos, Te-Ping Chen,
and set social policies for an- Science and Technology. Fi- carry the Western angle. The Anjie Zheng and
Note: HK$1 billion = $130 million other 50 years. nally they realized theyd given Post, he said, would put out Gregor Stuart Hunter
Source: Reuters THE WALL STREET JOURNAL. Exactly what happens in so much, and they still hadnt another angle. contributed to this article.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Monday, September 26, 2016 | A7

Labor Gains Reach Plateau Turkish Immigrant
AND JEFFREY SPARSHOTT Leveling Off Held in Washington
After steady improvement since the recession ended, many important measures of the labor market have
fter a half-decade of
steady gains, the U.S.
labor market appears to
be leveling off. What that pla-
plateaued in the past 6 to 12 months.
Jobless rates Monthly change in nonfarm
Share of the population
that has a job
For Mall Shooting
teau means for the economys 20% 600 thousand 90% A 24-hour hunt for the man Police are also still deter-
trajectory is one of the big- Broadest measure of August suspected of shooting and kill- mining who owns the rifle
400 Workers aged
gest questions hanging over underemployment* +151,000 ing five people at a mall north used in the shooting, Lt.
policy makers and investors. 15 August 80 77.8% of Seattle came to an unevent- Cammock said. Mr. Cetin was
Hiring is consistent but 9.7% ful and abrupt end when he booked Saturday in county
slower than in recent years, 0 was found walking down a jail on an investigative hold
the unemploy- 10 70 street in his home city. and is expected to be charged
THE ment rate is no 200 this week.
OUTLOOK longer falling 400 By Zusha Elinson Investigators believe Mr.
and layoffs are 5 12-month 60 and Jim Carlton Cetin drove away from the
holding at a his- Unemployment rate 600 in San Francisco scene after the shooting, but
torically low level. But partic- 4.9% and Jay Greene didnt go far. At some point,
ipation in the workforce is 0 Recession 800 50 59.7%
in Oak Harbor Mr. Cetin traveled to the is-
stuck near a 40-year low. 2007 09 11 13 15 2007 09 11 13 15 2007 09 11 13 15 land city of Oak Harbor,
If the moderate hiring rate Note: All gures are seasonally adjusted *Includes unemployed workers, involuntary part-timers and those marginally attached to the labor force Police arrested Arcan Ce- about 50 miles north of Seat-
continues, that should keep Source: Labor Department THE WALL STREET JOURNAL. tin, 20 years old, in Oak Har- tle. It is the largest city on
the unemployment rate in bor, about 30 miles from Whidbey Island, a weekend
check by absorbing new en- peaked at 10% in October central bankers didnt view investment, creating a drag where the shootings took
trants to the workforce. 2009, just after the recession the economy as strong on the U.S. expansion this place at the Cascade Mall in
Thats a good thing, but it ended and less than a year af- enough to withstand the first year, which has so far been Burlington. One of the arrest-
The arresting
might not be enough to de- ter Mr. Obama was elected. increase in their benchmark offset by consumer spending. ing officers, Lt. Mike Hawley officer described
liver significantly higher pay- U.S. employers have consis- interest rate since December. The economy has been of the Island County Sheriffs
checks for workers or draw tently added jobs since late The unemployment rate growing very slowly for a Office, said Mr. Cetin said
the suspect as
discouraged Americans back 2010. For the next five years, and other measures of labor number of years now, and we nothing as he was taken into being zombielike
into the labor force. most measures of the labor utilization are little changed dont expect it to materially custody Saturday night. He
Mixed signals from the la- market gradually improved, since the beginning of the change for quite a long time, was just kind of zombielike.
bor data pose a challenge to before leveling off in the past year, Ms. Yellen said. I dont Texas Instruments Inc. Chief Police said they still don't getaway spot for Seattleites.
companies forecasting future six to 12 months. see that as bad news because Financial Officer Kevin March know the motive in the kill- The island is accessed from
demand, Federal Reserve pol- Some gauges are at histor- it may reflect that the strong told investors this month. ings or if Mr. Cetin knew any the south by ferry, though
icy makers attempting to set ically strong levels. The un- labor market is attracting The U.S. economy has of his alleged victims. Four there is a bridge at the north-
interest rates and investors employment rate has been at people from outside the labor been mired in 2% annual women ranging from the ern end of the island, about
trying to assess the climate or just under 5% for nearly a force back into employment. growth for seven years, the teens to senior-citizen age 30 miles from Burlington,
ahead. year. The 12-month moving Ms. Yellen and other Fed weakest expansion since were killed, police said. One where the shooting occurred.
The labor market is close average of job creation, at officials have said they ex- World War II. When the labor man in his 60s later died at a Vigils were held Saturday in
to as good as it gets, given 204,000 a month, is above pected hiring to slow and the market took off in 2014 and Seattle hospital. Burlington. We suffered a dev-
the underlying fundamentals the long-run average. unemployment rate to level 2015 to produce the best jobs Surveillance video showed astating loss of five treasured
of the economy, said IHS off as slack in the labor mar- gains since 1999, many econo- a man in the mall with a rifle members of our community,

Markit Chief Economist Nari- ut other measures have ket diminishes. But in previ- mists predicted robust gains and, initially, police said they said Mayor Steve Sexton.
man Behravesh. But averages stalled out, and remain ous expansions, long stretches in gross domestic product were searching for a suspect
hide a lot of problems. A lot of weaker than before the of sideways movement in la- would follow. They havent. of Hispanic descent, based on


low-skilled and blue-collar recession. A broader measure bor measures were followed Growth in the first half of this eyewitness reports. They dis-
workers have been left behind. of unemployment that in- by an economic downturn. year slowed to a 1% pace. tributed a photo showing a
They might have a job, but it cludes discouraged workers I do think that its fair to man with thick, closely cut

pays less than the job they and those stuck in part-time say that the pace of improve- ome economists now black hair. However, Mr. Cetin
had before the recession. jobs was 9.7% last month. Its ment has slowed, said Tom worry that a leveling-off immigrated from Turkey and
The dichotomy is pre- been little changed for almost Porcelli, chief U.S. economist of the labor market is now a legal permanent
sented frequently in the pres- a year. And the share of at RBC Capital Markets. The might mean hiring is sinking resident in the U.S., Mount
idential race. Democrat Hil- Americans ages 25-54 with plateau can go on for a while, to match weak growth. Vernon police Lt. Chris Cam-
lary Clinton positions herself jobs, 77.8% in August, is near or a slow easing toward a re- Gradually I think things mock said.
as the candidate to maintain a postrecession high, but has cession can go on for a will slow down, said Sung Federal investigators had
President Barack Obamas changed little since January. while. Won Sohn, an economist at said there were no indica-
policies that delivered a long, The data has left the Fed That can leave businesses California State University, tions of terrorism, but they
relatively steady expansion. frozen this year. Chairwoman uncertain, especially when the Channel Islands. The overall couldnt discount that as a
Republican Donald Trump Janet Yellen last week lackluster expansion in the economy is already weighed possibility. When asked about
seizes on the frustration of pointed to modest wage im- U.S. is outpacing developed down by weak business spend- terrorism Saturday night, Lt.
Americans who feel left out of provement and workforce economies in Europe and ing and global headwinds. Cammock said: I am not go-
that recovery. participation as signs the jobs Asia. Companies have already Sooner or later that will get ing to rule out anything at
The unemployment rate market is strengthening. Yet reacted by curtailing capital to employment, he said. this point. Shooting suspect Arcan Cetin

RACE Trumps highest priority, said

Lawrence Kudlow, an economist
who served as a budget official
in the Reagan administration
few years ago, a consequence of
slowing global growth. As a re-
sult, the cost to service the na-
tional debt has fallen to its lowest
Doug Elmendorf, who as
head of the Congressional Bud-
get Office from 2009 until 2015
warned frequently of the toll un-
Continued from Page One and now is advising Mr. Trump. level in nearly 50 years as a per- checked deficits could take on
programs, or those that law- The 2000 election turned on centage of the nations gross do- the economy, now says the next
makers fund directly ev- how to spend a large budget sur- mestic product even though total president should tolerate wider
ery year, is being crowded out plus, and President George W. debt as a share of GDP has dou- short-term deficits to boost

by spending on what are known Bush won backing for sweeping bled to about 75% since before public investment in high-qual-
as mandatory programs, includ- tax cuts after taking office. In the 2007-09 recession. ity infrastructure or education
ing Medicare and Social Secu- 2008, Mr. Obama proposed to Some say the next president programs. My thinking has
rity. About two-thirds of all pay for a range of new programs, should see that as an opportu- changed because interest rates
spendingincluding interest beginning with the health-care nity. We have a window here, have fallen so far, he said.
payments on the national overhaul, by repealing those tax courtesy of central banks of the Others say the case for stimu-
debtis in that latter category, cuts and ending foreign wars. world, to borrow money very lus isnt compelling. If it were,
compared with about half in Both presidents faced recessions cheaply, said Jim Millstein, a wed all be studying the Japa-
the 1980s. Just one-third of in their first year, sending defi- former Treasury official in the nese economic miracle of the last
spending is actually set by Con- cits higher still. Obama administration who is 20 years that never happened,
gress and the White House The 45th president could working on an infrastructure- said Andy Laperriere, political
through annual spending bills. have one beneficial tailwind: bank proposal. With low rates strategist at Cornerstone Macro
President Barack Obama on Saturday helped open the National By 2022, nearly every dollar markets suggest interest rates deterring private firms from in- who served as adviser to former
Museum of African American History and Culture in Washington, D.C. of revenue the U.S. collects will could remain lower for much lon- vestment, he said, were going House Majority Leader Dick
have been committed before ger than most imagined just a to have to use public capital. Armey (R., Texas) in the 1990s.
charges for the officers involved Congress even votes, according
U.S. in Tuesdays shooting of Keith La-
mont Scott, who the chief said
to an analysis by Eugene

Watch was holding marijuana and ignor-

ing police commands to drop his
With more and more federal
spending on autopilot, there is
Disadvantage Ronald George Bill
Reagan H.W. Bush Clinton
George W.
gun before the fatal encounter. almost no discretion or flexibil-
They were reacting to what ity to act to address new chal- The next president 1980 90 2000 10 20 25
they saw, and they have a duty lenges without having to renege looks to inherit a
to do so, Chief Putney said Sat- on past promises to the public, particularly dismal 4
WSJ/NBC POLL urday, referring to the officers ac- says Mr. Steuerle, a Treasury offi- set of scal 2
count that they noticed Mr. Scott cial in the Reagan administration. circumstances.
Third Say Debates to in a parked SUV with a marijuana On the Democratic side, Decit to GDP ratio,
Influence Their Vote cigarette and holding a gun. Mrs. Clintons proposals im- actual (gray) and as
One-third of voters say the Police ordered Mr. Scott to plicitly acknowledge the bud- forecast by the 4
presidential debates will be very drop his weapon multiple times, get headwinds by including off- Congressional Budget 6
important in helping them de- according to video footage. Chief setting revenue increases for Ofce when each 8
cide whom to support for presi- Putney said Mr. Scott didnt most new spending. Those off- president ran for
dent, with slightly more Republi- comply. They perceive an immi- sets avoid running up deficits, 10
cans than Democrats saying so, nent lethal threat by a handgun but they face extra hurdles to 1981 89 93 2001 09 17
a new Wall Street Journal/NBC and they react to that, he said. being politically palatable. An increasing share 80%
News poll has found. After days of public pressure, She has promised a five-year, of the budget is 70
Some 34% of registered vot- the department late Saturday $275 billion infrastructure pro- devoted to
60 Projections
ers said the set of three presi- released dash-cam and body- gram in her first 100 days, a mandatory
dential debates that start on cam video of the shooting. The package roughly equal to a high- spending. 50
Monday in New York would be department also released photo- way-funding reauthorization Share of 40
extremely or quite important to graphs of a gun, an ankle holster Congress approved last year. She government 30
their decision. Among Republi- and a marijuana cigarette that also has proposed to dramati- spending dedicated
cans, 37% said the debates would police said belonged to Mr. Scott. cally cut child-care costs and col- to mandatory
be important to them, while 31% Valerie Bauerlein lege costs by increasing spend- outlays 10
of Democrats said the same. ing and offering tax breaks. 0
Voter groups that seem poised IOWA On the Republican side, Mr. 1981 89 93 2001 09 17
to pay the most attention include Trump has advocated a tax-cut And the situation 100%
several Mrs. Clinton is counting
Residents Along River package that could reduce reve- could vary widely 90 Given a higher rate
on. Some 49% of Hispanics, 42% Brace for Flooding nue by 10% over a decade while based on where
of African-Americans and 39% of Residents on Sunday were endorsing big spending boosts interest rates go in
voters under age 35 say the de- leaving low-lying areas of Cedar for infrastructure, veterans the coming decade. 70 Baseline
bates will be extremely or quite Rapids, Iowa, that are in danger health care and national de- 60 Given a
important to them. of flooding from the rising Cedar fense. He has also promised to Debt to GDP ratio
50 lower rate
Janet Hook River after heavy rains. The river spare Social Security and Medi- under various
crested Saturday night in Water- care, the biggest drivers of interest-rate 40
NORTH CAROLINA loo and Cedar Falls, some 90 ki- spending over the coming de- scenarios 30
lometers upstream. The National cades, from any changes.
Chief Says Video Weather Service predicted the Mr. Trumps advisers say
Exonerates Police river would crest in Cedar Rap- stimulating growth is a bigger 10
Charlotte-Mecklenburg Police ids, a city of about 128,000 peo- imperative than balancing the 0
Chief Kerr Putney said he is ab- ple, on Tuesday morning. budget. Like Ronald Reagan, 1980 90 2000 10 20 25
solutely not recommending Associated Press the deficit maybe isnt Mr. Source: Congressional Budget Ofce THE WALL STREET JOURNAL.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com

Can math disable A new planet

cancers cellular has Christians
machinery? asking if alien
Scientists are souls need
working on it to be saved
A10 A10

A8 | Monday, September 26, 2016 THE WALL STREET JOURNAL. 2016 Dow Jones & Company. All Rights Reserved.

The much-anticipated
face-off between Hillary
Clinton and Donald Trump
will just be a TV spectacle.
Real debate takes place
in the course of governing
(or at least it used to).

The first
presidential debate between Hillary
The first televised presidential debate, star-
ring John Kennedy and Richard Nixon, aired 56
years ago on Sept. 26, 1960. People who listened
on the radio thought Nixon won, but those who
watched on TV thought Kennedy won, and the
tiness of modern debates to the great Lincoln-
Douglas debates of 1858, a series of daylong ex-
changes in various towns around Illinois during
the contest between Abraham Lincoln and Ste-
phen Douglas for a Senate seat. (Lincoln lost.)
Clinton and Donald Trump is Monday election was so close that the TV factor might Whereas in modern televised debates, a candi-
night. What can we hope for? have made a difference. But should it have? Did date often has just 90 seconds for an answer,
A revealing gaffe, a zinger that hits viewers learn something from the grainy, flick- those debates gave each speaker 90 minutes for
ering black and white images on their tiny TVs a single response. Audiences stood all day in the
home, a flash of true spontaneity or a
that was really relevant to the late summer sun to listen to intri-
glimpse of the real character question of which policy or person cate arguments about matters of
of the candidatesthese was best for the country? Even the national importance, such as the
seem to be the most anyone The Kennedy-Nixon debate gar- extension of slavery into the west-
is hoping for, and more nered mixed reviews, including se- vaunted ern territories. Our attention
than we are likely to get. H Debates, vere criticism from establishment Lincoln- spans on the couch at home dont

at their very best, are the diamonds

figures. The journalist Edward R.
Murrow called it a puny contribu-
Douglas compare very well.
But even the Lincoln-Douglas
of democratic politicscrystal clear tion, capsuled, homogenized, per- debates of debates left a lot to be desired.
in argument, sparkling with wit, free haps dangerous in its future impli-
cation. The historian Henry
1858 They brought out vices in both
candidates: Lincoln spun out an
from the discolorations of petty self-
interest and shaped to focus light Steele Commager responded with brought out elaborate conspiracy theory about

on the great issues of the day.

an essay entitled, Washington
Would Have Lost a TV Debate.
vices in both the spread of slavery, Douglas
moralized self-righteously, and
But diamonds are rare, and no one The present formula of TV de- candidates. both pandered energetically to the
is expecting a jewel on Monday. The bate, he remarked, is designed crowds. The architecture of some
problem isnt only that our candidates to corrupt the public judgment of Lincolns greatest thoughts is
and, eventually, the whole political visible in his remarks, but he also
are lackluster, tempting as that process. The American Presidency is too great stooped low, assuring a crowd in Charleston, Ill.,
explanation may be. Nor does the fault an office to be subjected to the indignity of this in the part of the state closer to the South, that
lie mainly in the quality of the technique. Though the televised debates re- he did not believe that African-Americans
questions or the skill of the moderator. turned and eventually became a regular part of Please turn to the next page
The forum itself is flawed. How many the campaign, it is hard to think of even one
that stands out as a model of informed and in- Mr. Garsten is professor of political science
ways are there to say, Vote for me? formative discourse. and the humanities at Yale University and the
That line will always be more During most campaign cycles, someone will author of Saving Persuasion: A Defense of
advertisement than argument. write an essay comparing the disappointing pet- Rhetoric and Judgment.



Hear columnist Jason Gays unique spin on the stories
everyone wants to talk about. From politics to culture
to sports and everything in betweenits a Free for All. P DCASTS

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THE WALL STREET JOURNAL. Monday, September 26, 2016 | A9


The Sad State of American Debate

Continued from the prior page inside. John Quincy Adams, the former president, wrote to
should be voters or jurors or intermarry with white peo- Martin Van Buren that the debate was the most important
ple. As for Douglas, his case for popular sovereignty in one that has taken place since the existence of the govern-
each state merely dressed up the extension of slavery into ment. The two doctrines are now before the nation.
the territories as a matter of principle. Websters contribution has often been compared with that
Traditionalists at the time reacted to these debates in of Edmund Burke in England about 50 years earlier. Burkes
much the same way that Murrow and Commager later re- speeches in Parliament, like Websters in the Senate, became
sponded to the Kennedy-Nixon debateas a scandal and an models of eloquence for generations of aspiring politicians
affront to the dignity of our institutions. The spirit of the and students. Like Webster, Burke did his best work in the
Constitution is being violated in Illinois, wrote the editors context of particular legislative debates. He defended the de-
of the Union, a Washington, D.C. newspaper. In those days, sire for independence of the American colonists, pleaded for
state legislatures, not the people at large, were responsible humane treatment of his native Ireland, predicted the worst
for electing senators, and the point of that arrangement, the excesses of the French Revolution, and excoriated the East
Union reminded its readers, was to place the selection of India Company and colonial managers for their corrupt ad-
a Senator beyond the reach of the maddening issues of the ministration of India.
hour. The whole country, the paper wrote, is disgusted If Websters reply to Hayne offers an example of how to
MIND & MATTER: with the scene in Illinois.
From that traditional perspective, the proper setting for
debate protectionism with more depth than we have heard
lately, Burkes speech in support of the India Bill of Charles
MELVIN KONNER political debate was thought to be the institutions of govern- James Fox in 1783 offers an example of how to debate the
ment themselves, not the campaign trail. Legislatures and proper oversight of large corporations. Burke argued that
parliamentary assemblies had evolved over centuries to en- the East India Company had violated the terms of its corpo-
A Need for More courage substantive discussion of concrete policy choices
and to reduce the danger of demagoguery.
rate charter and should be made to cede control over its op-
erations in India to two commissions appointed by Parlia-
Answers on Teens Lincolns own favorite political oratory came not from
campaign stumping but from congressional debate. He loved
ment. He thus urged regulation of a company that had
enjoyed nearly unlimited autonomy in its operations abroad.
And Pornography Daniel Websters famous Second Reply to Hayne, which
was delivered on the floor of the Senate in 1830. Sparked
The moral and psychological subtlety of Burkes case for
reigning in that particular corporate excess dwarfs anything
WE ALL worry about how inter- by a proposal to limit the sale of federal lands in the west- in our own public discourse. Instead of resorting to populist
net pornography and other sexu- ern territories, the debate quickly turned into an impas- commonplaces, Burke explored the corrupting effects that
alizing influences affect children. sioned discussion of whether the national government was working for the company in India was having on Britains
But good research on the causes a creature of the states or a direct creation of the whole best and brightest. Young men arrived in India and were
and consequences of that expo- American people. promptly given vast political and economic power with little
sure is hard to come by. Sen. Robert Hayne of South Carolina made the case for oversight. They drank the intoxicating draught of authority
One reason has been American squeamish- the priority and independence of the states. Daniel Webster, and dominion before their heads are able to bear it, and
ness. Thirty years ago, I asked a psychologist young but poised and a polished speaker, put forward a vi- then, Burke warned, they brought their newly acquired hab-
running what was then the largest study of sion of a great nation united by modernized roads and infra- its of imperial brutality back to England with them. These
young adolescents ever, What are you structure and fortified by New Englands manufacturers. men, Burke told the House of Commons, marry into your
learning about sex and violence? She re- families; they enter into your senate. His arguments car-
plied, Oh, we cant ask about that. Now the ried the chamber but could not overcome the kings influ-
research situation has improved, although ence in the House of Lords. He and his party ultimately lost
state and local school authorities still have a the debate, but his speech remains an example of what de-
patchwork of rules covering permitted re- bate can be.
search, and parents often wont consent. If we are looking for exemplary debates, we should also
One recent exception is High Heels, Low look behind Burke and Webster to the classical models they
Grades, an article in the Journal of Research would have studied in schoolabove all, Demosthenes and
on Adolescence, describing two studies. In one, Cicero. These were the great orators, respectively, of demo-
91 girls aged 10 to 14 were given a 40-item In- cratic Athens and republican Rome. Plutarch had paired
ternalized Sexualization Scale, or ISS, to mea- them in his Parallel Lives, which was an obligatory part of
sure how important sexual attractiveness was a liberal education. Burkes long campaign to impeach War-
to their identity. After controlling for age, ren Hastings for his corrupt management of India owed
higher scores on the ISS predicted lower much to Ciceros first speech in 70 B.C. against Verres, a cor-
grades in English, science and social studies. rupt Roman governor of Sicily.
In the second study, 95 girls aged 11 to 15 As for Demosthenes, his speeches warning the Athenians
completed a brief mock video newscast about of the growing strength of Philip II of Macedon in the fourth
new animal species in Indonesia. They got a century B.C. had a furious, anxious power that comes across
433-word transcript and had five minutes to even today and even in translation. Simple in style, with lit-
prepare, in a room with beauty products tle rhetorical ornament, Demosthenes sentences concen-
available. The girls also took the ISS. A high trated the force of his mind into a few words, as a good
score predicted less time reading the tran- punch concentrates the bodys force into the inch between
script and more applying makeup. two knuckles. He was not running for office; he was pressing
While studies have lagged in America, it has his fellow lawmakers to act.
been easier to do research in Europe on how Examples like these remind us that public debate at its
common hard-core pornography exposure is, at best is a part of governing, not of campaigning. Webster and
what ages and with what consequences. One Burke, Cicero and Demosthenesall spoke in deliberative as-
Belgian study found that more than 4 in 10 semblies to a specific group of their fellow citizens who
boys age 12 to 15 have viewed explicit porn. In were empowered to decide to-
a large Danish study of people 15 to 25 (about gether a particular law or course
80% of them under 21), 88% of 1,400 males and The Roman of action.
45% of 3,200 females had viewed sexually ex-
plicit materials the year before.
orator Their speeches were tran-
scribed and published beyond the
These and other studies confirm that such Cicero confines of the chamber to a
exposure predicts lower grades in school and
earlier initiation into sex. Still, these are al-
served as a much wider audience, but that
was secondary; the immediate
most all correlational findingswhich sug- model for goal was to govern. The heyday
gest a relationship but do not prove that one men such of political debate in the U.S.
thing causes another. However, one 2015 lasted from the founding era
study in Belgium was a true experiment, fo- as Daniel through much of the 19th century,
cused on the impact of videogames. Webster. when arguments on the floor of
In that study, Karolien Driesmans of the legislatures directly informed de-
University of Leuven and two colleagues ran- cisions on policy. These delibera-
domly assigned 12- to 15-year-olds to play a tive institutions, whether local or
videogame that either featured a sexualized fe- national, focused debaters on particular questions and lim-
male or a neutral character in loose-fitting ited the audience they were addressing. Such settings im-
clothing. The boys, girls and their control parted a natural discipline to the speeches given within
groups then answered questions on tests. them, encouraging substance.
Fifteen minutes with the former game made Today public deliberation hardly ever takes place in our
a difference in results. Both boys and girls legislative assemblies, though sometimes a pretense is
scored higher than control individuals on two staged for the cameras. In the U.S., we have been at war in
well-established measures. One, the Rape Myth one theater or another for 15 years, and yet Congress has
Scale, asks if subjects agree with statements not had a sustained debate about these conflicts since the
like, If a girl goes to a room alone with a guy months leading up to the invasion of Iraq in 2003. In the
at a party, it is her own fault if she is raped. U.K. last spring, leaders declined to follow a centuries-old
The other, Tolerance for Sexual Harassment In- tradition of parliamentary debate and responsibility when

ventory, asks if most girls who are sexually making the most consequential choice of the countrys re-
insulted by a boy pro- cent history, to leave the European Union. They preferred to
voke his behavior by stage debates in the enormous and amorphous public
The power the way they talk, act sphere that the media creates and that individuals dip into
of a short or dress. and out of through their devices.
If a 15-minute vid- In our own increasingly fractured public sphere, the Com-
videogame eogame could have mission on Presidential Debates has announced that the sec-
session. such effects, what ond debate between Mrs. Clinton and Mr. Trump, on October
happens when chil- 9, will take the form of a town meeting, in which half of the
dren play them questions will be posed directly by citizen participants.
hours a week for What exactly will these citizen participants participate
years? We dont know. As Ms. Driesmans in? They are offered roles in a television show. They will ask
and her colleagues wrote, Play for many questions, as a reporter does, to help elicit responses that
hours spread over a period of several weeks TOP: A bust of Marcus Tullius Cicero (106-43 B.C.). ABOVE: might inform the public. This can certainly be useful, but we
or even months could have stronger nega- Daniel Webster (1782-1852), who famously concluded, should not let the language of town meetings and partici-
tive effects, but we need further work to Liberty and Union, now and forever, one and inseparable. pation obscure the limitations of the forum. One thing that
test this assumption. the staged presidential debates cannot offer is a reminder
An American Psychological Association Protecting that manufacturing sector with high tariffs on of what debating sounds like when it is actually a part of
task force warned in 2007 that sexualization imports from Europe was one of Websters immediate goals, self-government.
messages were widespread and directed at but the debate explored how this policy would affect various Years ago, when I lived in Williamstown, Mass., I at-
younger and younger girls, from preschool- parts of the country and linked the issue with questions of tended a real town meeting to discuss the municipalitys
age beauty pageants to bikinis for toddlers. sectional politics, national strategy and constitutional prin- annual budget. Citizens did not pose questions; they made
The task force urged more research. ciple. Webster helped Americans to imagine the nation that arguments. A youth program had been cut, and townspeo-
In an article published in May in the Jour- Lincoln would eventually fight to preserve. ple argued pro and con and then voted. The program was
nal of Sex Research, L. Monique Ward of the Admirers of the Webster-Hayne debate often praise its saved, with funds shifted from elsewhere. No one offered
University of Michigan reviewed 135 studies most famous lines, such as Websters memorable peroration. oratory for the ages, but it was a good debate, full of clear,
of the effects of sexualization of women in Hayne had worried that national unity would threaten the forceful, responsible arguments. Demosthenes would have
media. Of those, 84% were published since states liberty. Websters final line was a succinct answer: been proud.
the task force report. But only five of the Liberty and Union, now and forever, one and inseparable. In the history of democratic societies, it was the intense
studies looked at children under 13 and only But one turn of phrasea tweet, basicallycannot cap- pressures of governing together that occasionally com-
19 at adolescents; just 11 concerned video- ture what was special about Websters speech, or about pressed the sand of ordinary political speech into a gem or
games, and of those, only the study by the Haynes. The real strength of the debate lay in the power two of public oratory worth saving. We have mostly let pub-
Driesmans team looked at children younger and clarity with which both sides elaborated the complex ar- lic debate float free from the pressures of our governing in-
than college age. The Ward survey points up guments behind their different positions, allowing listeners stitutions these days. We should not be surprised that we

the need for us to learn more. to enter into each point of view and understand it from the do not produce diamonds.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A10 | Monday, September 26, 2016 THE WALL STREET JOURNAL.

already compelling evidence, widely published
in scientific journals, to support the existence of
such universal on-off switches for cancer.
Indeed, the more we use quantitative models,
the more we understand that cancer isnt the re-
sult of a single gene going roguethe premise
of the mutation-based therapy approach. Rather,
cancer develops when an entire gang of rogue
proteins work in concert to thwart the defense
mechanisms that cells use to keep cancer at bay.
This is no mere hypothesis. Clinical trials at
Columbia, in patients with metastatic and
drug-resistant breast cancer, have already
started to evaluate how well novel, multi-drug
regimens can target the aberrantly activated
proteins in a tumor checkpoint. And in N of
1 studies, also at Columbiathat is, studies
in which a single patient is the entire trial
tumor checkpoints are being used to select the
best therapy for 260 patients across 14 differ-
ent kinds of previously untreatable tumors.
To identify master regulator proteins and tu-
mor-checkpoint modules, DarwinHealth is using
sophisticated tools such as the VIPER algo-
rithm, which we presented recently in the jour-
nal Nature Genetics. Like astronomers and
physicists discovering dark planets indirectly,
from deviations in the trajectory of the stars
around which they gravitate, we are able to use
VIPER to begin to decode the hidden oncotec-
ture of cancerthat is, the universal regula-
tory architecture of cancer cells.
It might seem counterintuitive to employ a
virtual world to decode something as real as
cancer, but predictions made by these methods
are already undergoing rigorous clinical evalua-
tion. These studies are geared to finding the
specific drugs and drug combinations that, by
short-circuiting the regulatory logic of the can-
cer cell, can help turn these tumor switches to
the off positionpermanently.
Setbacks are inevitable in this line of re-
search. This is cancer, after all, and develop-
ing and testing new checkpoint-based drugs
or innovative combinations is an expensive

process that can take years.

But we are already seeing hopeful develop-
ments. Our individualized N of 1 studies at
Columbia suggest that toggling these on-off
cancer switches may not require new drugs.
Rather, it may be accomplished by drawing

Can Math Crack

tients, and to use single drugs and novel drug from a large tool kit of drugs already approved
combinations to target them. by the FDAmany of them inexpensive and no
We are not alone on this track. An increasing longer under patentsand from compounds
number of systems biologistsFranziska Michor available from late-stage clinical investigations.

Cancers Code?
and Peter Sorger at Harvard University, Gordon We are currently conducting a trial in collabo-
Mills at the MD Anderson Cancer Center and ration with Drs. Kevin Kalinsky of Columbia
Trey Ideker at the University of California, San and Jose Silva of Mount Sinai in New York to
Diego, among othersare also embracing this test how well a new combination of two FDA-
sort of strategy, with growing support from the approved drugs can shut down the tumor
tumors cannot be treated this way. National Cancer Institute. checkpoint of breast-cancer patients who no
Quantitative models focus Researchers are continuing to refine these As a result of this evolution, the focus in longer respond to conventional therapy.
on the architecture of cancer targeted treatments, but new approaches are
neededand here, as in many other fields, the
many labs has shifted from
genes to proteinsthe mo-
Cancer researchers are
only now beginning to appre-
answers may lie in the information revolution. lecular machines that gov- Computations ciate how much they can
Disappointed with the slow pace of discovery
and inclined to look for elegant, universal expla-
ern cell behavior, including
cancer. But while genes can
to pinpoint the learn by applying these new
tools to one of medicines
nations for natures conundrums, many cancer be readily sequenced, pro- command most elusive challenges: dis-
AT SOME POINT in their lives, about half of all
Americans will hear the frightening words, You
researchers have increasingly been asking: Is
there some sort of Da Vinci Code for cancer?
teins are much harder to
observe and measure.
center of the abling, reversing or subvert-
ing the aberrant regulatory
have cancer. For patients and families, the per- And can we crack it using mathematics? There is mounting evi- cancer cell. programs that ignite perfectly
sonal burden of cancer is staggering, and many Quantitative modeling has been extremely dence that virtual, computa- normal cells and morph them
scientists and physicians, though working hero- successful in disciplines as diverse as astron- tion-based methods are par- into monsters that explode
ically on new treatments, remain unsatisfied omy, physics, economics and computer science. ticularly effective in detecting with destructive fury.
with the care that they are able to provide. Can cancer quantsscientists applying quan- aberrant proteins in this hidden layer of cancer Over the centuries, and across countless ar-
Much attention and excitement has fo- titative analyses to the landscape of cancer bi- control. In our own labs, we rely on computa- eas of human need, we have seen the power of
cused lately on precision medicinethe ologyfind the answers we seek? And, if so, tional methods to pinpoint the dark proteins numbers to improve our lives. Increasingly, it
targeted deployment of drugs to counter spe- what would the new paradigm look like? that constitute the command center of the can- looks as if this will hold for cancer, too. It may
cific driver mutations in tumors and also to This approach has been in the works for cer cell. Abnormal activity in these master reg- just be a matter of getting the math right.
activate the bodys own immune system years at Columbia University (in the lab that ulators can result in rapid tumor growth and
against cancer cells. These strategies have re- one of us directs), and we are attempting to devastating propagation of cancer cells.
sulted in some real success stories, but not develop it commercially at the company that Perhaps most important, these proteins form Dr. Califano is Clyde and Helen Wu Professor of
enough patientsespecially those with meta- we co-founded, DarwinHealth. The idea is to tightly knit modulesor tumor checkpoints Chemical Systems Biology at Columbia Univer-
static breast, colon, lung and prostate can- integrate robotics and supercomputers to that represent the ultimate on-off switches in sity and co-founder of DarwinHealth. Dr. Bosker
cerare achieving the kind of lasting remis- identify more universal tumor vulnerabilities, the cancer cells engine room, providing a new is the CEO and co-founder of DarwinHealth and
sions that were expected. Worse, most within a much larger segment of cancer pa- class of targets for anticancer therapy. There is CEO of CMEducation Resources.


BY IAN LOVETT in spreading the Gospel, are starting Jesus was constantly incarnating and
to openly debate whether that duty dying on various worldsa concept
FOR ASTRONOMERS, Proxima b is a extends beyond Earths atmosphere. that few Christians found appealing.
dream planet. Discovered last month As for Mormons, they may have an On a recent morning outside St.
orbiting the star nearest to our own edge: They are already in space Marks Catholic Church in Los Ange-
solar system, it is thought to reside proudly counting several astronauts les, parishioners were at ease with
squarely in what scientists call the in their foldand are used to evange- the possibility of sentient life on
Goldilocks zonewhere the temper- lizing in far-flung places. Utah has other planetsand with spreading
ature for life is just right. stood in for Mars in at least one the Gospel there. The Bible should be
The news prompted excited ques- movie and is home to a research sta- preached all over, Chutti Vanderwall,
tions among scientists: Is there really tion for the Mars Society. 64, said after mass. The Bible
water on Proxima b? Could a rocket The Church of Jesus Christ of Lat- teaches lovenot just here. It teaches
make it there one day? Could there be ter-day Saints declined to comment, us to be good people.
life on the planet? But it started a but a church official pointed to the Some theologians argue that Ms.
very different discussion among Encyclopedia of Mormonism, Vanderwalls observationthat the
Christians: Would alien souls need which accepts the existence of Bible teaches us to be good peo-
saving? And if so, do missionaries other worlds created by God for a pleis precisely why Christians
have a responsibility to rocket into divine purpose that is the same as shouldnt plan to baptize alien life-
space with a trunk full of Bibles? the purpose of earth life. forms. The Gospel tells of the fall and
At a minimum, a Christian would For most denominations of Chris- salvation of humanity, they say, not of
have an obligation to at least tell the tianity, said David Weintraub, an as- other beings on some far-off world.
Gospel story to other life-forms tronomy professor at Vanderbilt Uni- Other theologians posit that intelli-

found outside of Earth, said Bill versity and the author of Religions gent extraterrestrials would have
Nettles, the chair of the physics de- and Extraterrestrial Life, the possi- their own relationships with God.
partment at Union University, an bility of life elsewhere presents seri- Beyond the theological questions
evangelical college in Jackson, Tenn. ous theological problems. Until now, lie serious practical obstacles. Com-
But to other Christians, the idea questions about who created us and munication would take a long time,
that an extraterrestrial, no matter life anywhere else in the universe. In 2014, two Jesuit astronomers at are we alone were purely theological, obviously, said Deborah Haarsma,
how intelligent, could have a spiritual He added, Its not Jesus Christ dy- the Vatican published a book with the he said. But now, astronomers are president of BioLogos, a group that
relationship with God is unthinkable. ing on 1,000 planets. title, Would You Baptize an Extrater- saying, Were taking over some turf promotes the idea that Christianity
Its just planet Earth that has Discussion of alien spirituality has restrial? That year, Pope Francis that used to belong to you. and science are in harmony. Even if
spiritual beings in need of redemp- long been the stuff of science fiction. himselfduring a hypothetical sec- Christians have long argued about communication were possible, she
tion, said Hugh Ross, an astrophysi- But as humans have peered further tion of a weekly homilysaid that he the cosmosat least since Galileo in- added, Can we communicate about
cist who founded Reasons to Believe, into space with telescopes and un- would baptize a green Martian with a sisted in 1633 that the Earth revolved something as profound as God?
a ministry that seeks to show that manned probes, religious groups have long nose and big ears, although around the sun, a heresy that won Christians have plenty of time to
science supports Christian scripture. been forced to grapplesometimes only if the alien ambled into St. Pe- him house arrest for the rest of his decide all this. Proxima b is 4.2 light
That doesnt rule out dolphins or uncomfortablywith what the exis- ters Basilica and asked. Who are we life. Nearly 200 years later, the philos- years awayso a space probe using
grass or bacteria on another planet, tence of intelligent extraterrestrial life to close doors? the pontiff asked. opher Thomas Paine asked whether current technology would take thou-
he said, but he doesnt expect to find would mean for their faith. Evangelical Christians, who believe life on other planets would mean that sands of years to get there.
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THE WALL STREET JOURNAL. Monday, September 26, 2016 | A11

tion for how the event can seem to
turn the games hierarchy on its head.

The Mystery of
For one thing, the format during the
first two days, which includes both al-
ternate-shot and best-ball pairings,
makes players records partly a byprod-
uct of how their partners perform.

The Ryder Cup Even Sunday, which features 18-hole

singles matches, doesnt separate the
best from the rest the way 72-hole
stroke play is designed to do.
How different would the U.S. Open
There are theories but no consensus about why tennis be if every match were played
over one set instead of five? said Paul
some stars struggle while lesser names thrive McGinley, the captain of the winning
European team in 2014.
Thats what you have with the
Ryder Cup. You have 18-hole matches
that are a sprint. If every match were
played over four rounds, you can bet
Tiger Woods would have had a phe-
nomenal Ryder Cup record.
Part of the difficulty in figuring out
who will thrive at the event, which this
year will be played at Minnesotas Ha-
zeltine National Golf Club, is that there
isnt anything else exactly like it. At the
highest level of golf, match play is rare,
and team play is rarer still. The Ryder
Cup combines both.
Then there are the crowds, which
are rowdier than at typical PGA Tour
events. The idea of cheering for a poor
shot by the visiting team might seem
Clockwise from top: Spains Sergio Garcia at the 2014 Ryder Cup, perfectly natural in other sports, but for
and Americans Tiger Woods and Phil Mickelson. pro golfers it is a shock to the system.
Its the closest we get to playing golf
in a football-type environment, where
Davis Love III, the captain of the Weekley, J.B. Holmes and Patrick Reed. youre playing in front of a home crowd
U.S. Ryder Cup team, got to person- Even among more seasoned Ryder or an away crowd, said Justin Rose of
ally choose four of the 12 members of Cup players, there is little consensus as England. The two experiences are com-
the American roster. In doing so, he to what makes a player particularly pletely different from each other.
had reams of data to well-suited for it. When asked what makes players
consider. Its not an easy thing to explain, well-suited for match play, Love men-
Love could have as- Poulter said. Theres something about tioned guys that love the stage. He
sessed which players the Ryder Cup that grips certain play- said, Phil Mickelson, he loves standing
have performed best of ers. I dont know why. on the last hole with $1,000 on the
late and which have More than ever before, both Love and line with his buddies, or standing on
GOLF been better over time. European captain Darren Clarke have re- the last green at Augusta National.
JOURNAL. He could have quantified lied on statistical analysis to help make Yet despite winning the Masters
BRIAN which players strengths their picks. (Love was due to make his three times, Mickelson has been one of
COSTA help negate the teams fourth and final choice by Sunday night.) the biggest American disappointments
weaknesses and evalu- But even the best analysis available only in the Ryder Cup. His career record
ate which players per- goes so far in explaining the most sur- stands at 16-19-6. Meanwhile, Sergio
sonalities seem to jibe best. prising individual performances. Garcia of Spain, golfs perennial also-
But for all of the thought that goes I think its partly some random- ran at majorsseemingly the antithesis
into the selection of the teams, predict- ness, said Jake Nichols, head of golf of the type of player Love described
ing which players will perform best at intelligence for the 15th Club, the Lon- has been among Europes best Ryder
the Ryder Cup is kind of a crapshoot. don analytics firm working for Team Cup players ever, at 18-9-5.
One of the enduring mysteries of Europe. We havent cracked the code, I Poulter, who will be a vice captain for
the event is why some of the most ac- guess. I we wish we had. Europe this year, cited the importance
complished players in the world strug- The idea that the outcome of the of playing with pride and passion. Yet
gle in it while lesser players thrive. the equivalent of last seasons New century, with a 12-4-2 career record. Ryder Cup is essentially random is hard one of Europes best performances in
Tiger Woods reigned for more than York Knicks. In the era of Woods and Phil Mick- to accept at a time when there is an 2014 came from its most outwardly
a decade as the best player in the Ian Poulter has never won a major elson, the four best American Ryder entire task force devoted to assessing aloof player, Victor Dubuisson of France.
world yet his career record in Ryder championship but the Englishman be- Cup players since 2000, in terms of and ending the Americans failures. And therein lies the secret to the
Cup matches is 13-17-3, which by win- came the screaming, bug-eyed face of points won per match played, are of (Europe has won eight of the past 10 Ryder Cup: Nobody really knows
ning percentage makes him roughly Europes Ryder Cup dominance in this far lesser stature: Scott Verplank, Boo times.) But it may be the best explana- what it is.

Heard on The Field

At Berlin Marathon, I wanted to set a personal
Major-League Star
best and its a fantastic time,
A Bittersweet Victory but its a little disappointing to Killed in Boat Crash
Kenenisa Bekele of Ethiopia miss the world record by so lit- Jos Fernndez, the fireball-
pulled away from Wilson Kip- tle, Bekele said. ing and fun-loving ace for the
sang of Kenya late in the race to Bekele is considered one of the Miami Marlins, has died, the
win the Berlin Marathon just greatest distance runners ever. He team said Sunday. He was 24.

outside the world-record time. won three Olympic titles and five Fernndez was one of three
Bekeles winning time of two world-championship golds and is people who died in a boat crash
hours, 3 minutes and 3 seconds the world-record holder over early Sunday, the AP reported.
on Sunday was six seconds out- 5,000 and 10,000 meters. A Cuban defector who at-
side Dennis Kimettos world re- Aberu Kebede led an Ethio- tended high school in Florida,
cord, also set in Berlin in 2014. pian sweep in the womens race Fernndez had quickly become
Bekeles mark is the second- in 2:20:45. Birhane Dibaba was one of the games top pitchers. Marlins right-hander Jos
best time. Evans Chebet of second, Ruti Aga third. The Marlins game Sunday was Fernndez earlier this month.
Kenya was third in 2:05:31. Associated Press canceled. Andrew Beaton

Weather The WSJ Daily Crossword | Edited by Mike Shenk

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-15 1 2 3 4 5 6 7 8 9 10 11 12 13 6 Buglers call 36 Many a
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17 18 19 top of a clock 39 Religious
Beijing 9 ___ your loss! group
10 20 21 22 23
Seoul 41 Waldorf salad
15 10 Applied balm to
Tokyo 20
24 25 26 27 ingredients
h h 11 Lightning
New D lh
Delhi 25 28 29 30 31 producer 42 Rink surface
y dh
Riyadh Ta
T ip
lk t 30
12 Gone With the 43 Glaswegian, for
Karachi 35 32 33 34 35 36 example
Hong Kong Wind name
Hanoi MEGI 45 Blueprint
k k
Bangkok 37 38 39 13 Wee kids
40 41 42 43 44 19 In the 46 Ill be right with
Cold neighborhood you
la LLumpur
Kuala p
45 46 47 Bygone Toyota
Stationary 22 Steel
g p
47 48 49 50 component model
Showers 48 Inflict, as havoc
k 25 Wee
51 52 53 54 55 56
Rain 26 Navel-revealing 49 President born
57 58 59 60 61 suit in the 1960s
T-storms 52 Investors
62 63 64
27 Top pitcher
28 Finish a hole concern
65 66 67
29 Poet Pound 53 Brewpub
yd ey Flurries offerings
30 Add
Ice P.O. BOXES | By Nancy Cole Stuart continuously 55 In the thick of
31 Symbol on a 56 Surrounding
Global Forecasts City
Hi Lo W
Hi Lo W City
Hi Lo W
Hi Lo W
Across 28 Navy counterpart 54 Cheering cry
cellists sheet glow
s...sunny; pc... partly cloudy; c...cloudy; sh...showers; 1 Vatican-related of sergeant 57 Its often used in
Geneva 20 11 pc 21 10 pc Ottawa 18 11 r 19 8 c music 58 Peg for Pebble
t...tstorms; r...rain; sf...snow flurries; sn...snow; i...ice Hanoi 33 26 pc 35 26 pc Paris 20 10 pc 21 13 pc 6 Their miles are 32 Israeli guns stir-frying
34 Music maker in Beach
Havana 31 22 pc 31 22 pc Philadelphia 24 18 s 24 13 r measured by 33 Did some 60 Letter between
Today Tomorrow Hong Kong 33 28 s 35 28 pc Phoenix 31 21 pc 32 22 c a cathedral 59 Metal source
City Hi Lo W Hi Lo W meters canoodling rho and tau
Honolulu 30 24 sh 29 23 sh Pittsburgh 25 10 t 20 8 s 35 Geometry class 61 The Monkees
Amsterdam 18 10 pc 19 15 pc Houston 31 22 t 30 19 c Port-au-Prince 34 22 pc 35 23 pc 11 Boozehound 34 Touch lightly 62 Los Angeles
footballer calculation ___ Believer
Anchorage 9 3 pc 11 2 s Istanbul 21 16 sh 21 16 pc Portland, Ore. 31 15 s 23 9 pc 14 Emanate 37 Where Achilles
Athens 24 17 pc 24 16 pc Jakarta 31 25 t 32 25 t Rio de Janeiro 23 19 c 24 19 pc killed Hector 63 Hardly wordy
Atlanta 31 20 s 28 15 pc Johannesburg 26 11 s 26 13 r Riyadh 39 19 s 40 20 s 15 Samuel on the Previous Puzzles Solution
Baghdad 37 20 s 40 22 s Kansas City 22 9 s 24 11 s Rome 24 15 pc 24 15 s Supreme Court 38 Yale student 64 Text alternative A P E S P A
Baltimore 22 15 pc 23 12 r Las Vegas 32 21 s 31 20 s Salt Lake City 23 11 s 25 12 s H UM L O G
16 Love ___ 39 Address for a 65 Letters before A L P A U R
Bangkok 32 26 t 33 25 t Lima 23 16 pc 23 17 s San Diego 32 22 s 30 20 pc monarch an alias
Beijing 26 17 c 24 9 pc London 18 13 r 21 12 c San Francisco 32 15 s 26 13 pc
neighbor... S T I L T E
Berlin 22 9 pc 21 12 pc Los Angeles 36 21 s 32 18 pc San Juan 32 24 pc 32 26 sh 17 Choir singers 40 Leather shade 66 Tries to find A T E AM A WA I T E D
Bogota 20 7 c 20 7 c Madrid 28 13 pc 29 13 s Santiago 27 10 pc 27 11 pc B E D G E T A G R I P
18 Climbing plant 41 Expands, as a 67 Determined, as MO D E R A T E S
Boise 27 13 s 28 12 s Manila 30 27 t 30 26 t Santo Domingo 32 23 pc 31 23 pc search an attitude
Boston 18 14 s 21 14 r Melbourne 16 7 sh 15 8 sh Sao Paulo 18 12 pc 21 13 pc that can cause C H I T C H A T M C S
Brussels 18 10 pc 20 13 pc Mexico City 22 13 t 21 13 t Seattle 25 14 s 19 10 pc itching 44 Kin of the saber Down B E C K N Y E T L O R A X
Buenos Aires 21 11 s 24 14 s Miami 31 24 pc 31 24 pc Seoul 29 20 s 25 18 r 20 Auto introduced and foil 1 Fall fruit B A T C O N D E M N
Cairo 30 20 s 30 21 s Milan 25 13 pc 24 12 s Shanghai 29 25 pc 29 23 r E V A D E D L O OM I C Y
in 1904 45 Hawaii 2 Wheel T O R E R O A T R A T E A
Calgary 23 10 s 20 5 pc Minneapolis 18 8 s 17 9 pc Singapore 32 25 c 32 25 pc S N E E R S T H A N E S P
Caracas 32 25 pc 32 26 pc Monterrey 30 20 t 25 18 t Stockholm 19 9 pc 19 10 pc 21 Market shoppers surroundings connector
The contest answer is STAGEHAND. Each of the
Charlotte 29 20 c 28 18 c Montreal 17 10 s 19 9 pc Sydney 19 10 s 20 11 s aid 47 Puffy 3 Wall Street Across clues ending with a question mark leads to
Chicago 20 10 pc 18 10 pc Moscow 12 5 s 10 5 c Taipei 29 26 t 28 25 r
Dallas 25 17 pc 27 15 s Mumbai 30 25 sh 30 26 pc Tehran 30 16 s 32 16 s
23 ___ Haute 50 Not fooled by order two answers, the second of which is the result of
Denver 25 9 s 29 9 s Nashville 26 10 pc 25 11 s Tel Aviv 30 22 s 29 23 pc 24 Jetty 51 City-based 4 Busy activity reversing the first and dropping two identical
Detroit 20 11 r 17 11 pc New Delhi 35 25 s 36 26 s Tokyo 27 23 t 27 23 pc letters (LESSER REEL; STILTED DELIS; A-TEAM
26 Island group 52 Give stars to, 5 Stahl of MET; GET A GRIP, PIRATE; MODERATES
Dubai 38 29 s 39 29 s New Orleans 33 25 s 32 24 pc Toronto 20 10 r 18 10 c
Dublin 15 11 r 18 11 pc New York City 22 17 s 23 14 r Vancouver 19 11 s 17 10 pc north of Cuba perhaps 60 Minutes STARDOM; CHITCHAT TACTIC; OMAHA HMO;
Edinburgh 15 7 c 16 10 pc Omaha 22 8 s 24 9 s Washington, D.C. 23 17 pc 24 15 r CONDEMN MEDOC; EVADED EAVE). The dropped
Solve this puzzle online and discuss it at WSJ.com/Puzzles.

Frankfurt 20 10 pc 22 11 pc Orlando 32 23 t 32 23 t Zurich 19 9 t 19 8 pc letters spell the answer in order.

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A12 | Monday, September 26, 2016 THE WALL STREET JOURNAL.

Trump Debate
Whether or Not in Syria Dos and Donts
ussian and Syrian regime forces re- against Islamic State. Hes also unsure of
newed their offensive against the be- whether to provide Syrias Kurdsby far the Which Donald Trump Aleppo question. Her campaign team is
will show up to Hofstra already trying to pressure debate mod-
sieged city of Aleppo on Friday, kill- most effective U.S. ally in the warwith the
University on Monday erators into helping with a gotcha. Jen-
ing 27 civilians in air and weapons they would need to night for the first U.S. nifer Palmieri, Mrs. Clintons communi-
ground bombardments. But Obama could arm evict Islamic State from its presidential debate? cations director, groused on Wednesday
this time the Obama Admin- Syrian capital in Raqqa. The Oval Office may that reporters lower the bar for Mr.
istration isnt taking the out-
Americas friends Whether its worth alienating
rage lying down. Behold Ben the Kurds, but he Turkey by doing so is another POTOMAC hinge on that question. Trump. She said debate moderators
Presidential debates need to ask substantive questions, fac-
Rhodes, warning the Kremlin White House puzzle. always matter, but the tual questions.
that there are limits to the
probably wont. All this is causing some
By Kimberley
stakes in this first Mrs. Clinton will also attempt to
A. Strassel
White Houses diplomatic presidential misgivings, not Trump-Clinton faceoff needle Mr. Trump into an explosion.
patience after Russia flouted least because Mr. Obama are higher than most. She must know (who doesnt?) that
another cease-fire by bombing a humanitar- knows hell be judged harshly for his Syrian Or at least they are for Mr. Trump. nothing drives him to extremes more
The billionaires biggest problem is than personal attackson his wealth,
ian aid convoy. abdication. In an interview for Vanity Fair,
that Americans remain unsure about Trump steaks, his lawsuits. Mrs. Clinton
The question is whether or not we just Mr. Obama told historian Doris Kearns Good- what they would get with a Trump will attempt to turn the corruption
walk away from the table completely at this win that Syria haunts me constantly, and presidency. question around on Mr. Trump, to call
point, the deputy national security adviser that he asks himself what a Winston Church- Over the years theyve seen Donald him out as a con man, but more to de-
said last week, or whether or not we do ill or Dwight Eisenhower might have done the reality-TV star. Theyve seen Donald flect attention from her own pay-to-
some more diplomacy and consultation to in his place. Yet he continues to insist that the one-time Democrat. Theyve seen play and email scandals. Once again she
determine whether or not there is some he got all the big calls right. Regrets, hed Donald the unhinged. More recently, will paint him as the biggest rotten ap-
path forward. have a fewif only he could think of what theyve seen Donald the serious candi- ple in that basket of deplorables.
To whether or notwhen it comes to the Ad- they might be. date. Yet Mr. Trump has no prior
ministrations Syria policy, thats always been If Mr. Obama is really looking for a elected service from which to judge po-
the question. President Obama dithered for Churchillian answer to Syrias dilemmas, he litical or policy leadership. He has run Voters know hes a
only a few ads. For many voters, this
months over whether to call on Bashar Assad could arm Americas Kurdish friends, destroy first debate will be a (re)introduction, scrapper. But he must
to step aside, first deciding in favor of it only the Assad regimes air force and its armor re- and at a critical time. show an optimistic
effectively to reverse himself last year. He serves, and redraw the map of Syria to take ac- The matchup will provide an an-
struggled with the question of whether and to count of the new dividing lines of a broken coun- swerone way or the otherto the vision for America.
what extent to arm a credible opposition force, try. Instead of dispatching John Kerry on more central accusation against Mr. Trump.
only to spend a half-billion dollars training a negotiating dead ends with Russia, he could also The overwhelming focus of Mrs. Clin-
handful of fighters. He drew a red line against impose further economic costs on Moscow for tons campaign has been its unrelenting Word is that Mr. Trump isnt doing a
the use of chemical weapons, but whether to its Middle East adventurism. charge that he is unfit to be president. whole lot of debate prep. But his team
enforce it was another matter. None of this would require deploying U.S. Polls show this resonates with voters. A ought to have at least readied him for
More recently, Mr. Obama has been of two ground troops in large numbers to Syria. But recent New York Times/CBS survey what should be the easy response to all
found that 47% of registered voters the nasty attacks. Mrs. Clintons own
minds over whether to oppose Moscows in- it might warrant restoring Winstons bust to
thought a Clinton presidency would be past is so malodorous, so rife with
tervention in Syria, or join it in a mutual effort the Oval Office where it belongs. a safe choice for the country, versus crooked deals and lies, that Mr. Trump
30% who thought that about Mr. shouldnt have to do much more than

The Wells Fargo Standard Trump. Fifty-five percent said that Mrs.
Clinton had the right kind of tempera-
calmly question her credibility and then
move on to better subjects.

ment to be president, compared with Mr. Trumps impulse no doubt will
emocrats are waging a nonstop cam- ber his role? Mr. Lew spent the weeks before 31% for Mr. Trump. On Monday voters be to take it to her, to hit back, to dwell
paign to punish bank executives for his 2013 Senate confirmation saying he couldnt will see how his temperament holds up on Mrs. Clintons malfeasance. No
misconduct, both real and imagined. even recall the details of investments that blew under stress on live TV. doubt a few tough reminders to the au-
After revelations that Wells up on his watch. Thats why this is such a test. Mr. dience of her ethical failings are neces-
Fargo fired thousands of em- Imagine if the Treasury What makes this so awk- Trumps disciplined campaigning lately
has served him well and helps account
sary. But everyone already knows Mr.
Trump is a scrapper. What he needs to
ployees for setting up ac- Secretary had to live ward is not merely that Sen.
for the tightening polls. But the disci- show now is that he has his own opti-
counts without customer per- Warren and her Democratic pline has been largely the result of pre- mistic and considered plans for change
mission, Massachusetts Sen. by new rules for banks. colleagues overwhelmingly pared speeches, teleprompters, talking in America. This is one of his openings.
Elizabeth Warren and her voted to confirm Mr. Lew to points and a staff that is clearly work- In that same New York Times/CBS poll,
colleagues were howling last run the Treasury. And its ing hard to keep him on message. 48% of voters felt Mr. Trump could
week for Wells to claw back bonuses that had not merely that many of the regulators on The Republican nominees worst mo- bring about real change. Only 36%
been paid to senior executives. Awkwardly for Mr. Lews Financial Stability Oversight Coun- ment in recent weeks was at NBCs com- said that of Mrs. Clinton.
Ms. Warren and her colleagues, Rep. Scott cil are now drafting clawback rules that mander-in-chief forum, where he was By being positive, Mr. Trump would
Garrett (R., N.J.) decided to pursue this line other, less politically connected, bankers will tasked with talking off the cuffand draw a stark contrast. Mrs. Clinton these
of argument a little too vigorously for Demo- have to live by. happily did so, in rambling fashion. days looks perpetually angry and seems
cratic tastes. Monday nights debate, with hours of to have only one volume setting: yell.
Theres also the issue of scale. Mr. Lews
unscripted talk, offers plenty of opportu- The press keeps noting that she is a sea-
At a hearing last week in the House Finan- Citigroup consumed a series of multibillion- nities for Mr. Trump to erase, with one soned debater, but then again she has
cial Services Committee, Mr. Garrett asked dollar taxpayer bailouts and helped trigger loose-lipped error, what credibility he mostly debated fellow Democrats and
Treasury Secretary Jack Lew, who helped pre- a world-wide financial panic. Wells Fargo has built in the past month. Conversely, been questioned by sympathetic press.
side over a titanic financial disaster at Citi- mistreated its customers, but its $2.6 million it could be the moment he begins to look Her style is fairly predictable.
group in 2008, whether the bank had clawed in remediation for those affected is a round- seriously presidential. Mr. Trump is by contrast new to this.
back any of his compensation. ing error at a bank with $86 billion in annual The good news for Team Trump is But that also gives him an advantage, in
YouTube viewers may be entertained revenue. If J.P. Morgans famous 2012 trad- that Mrs. Clintonnothing if not un- that he has the freedom and the per-
watching the video of this exchange, in ing loss was triggered by a London whale, subtleis already radiating her main sonality to be unconventional and un-
which Mr. Lew makes every effort to avoid as a financial matter this is the San Fran- lines of attack. She will attempt to predictable. It could give him new mo-
answering the simple question. At one point cisco minnow. make him look stupid by chiding him mentum toward the White Houseif he
for a lack of policy knowledge and can get this first one right.
the former chief operating officer of two Mr. Garrett sums up the lesson for bankers
sandbagging him with a what is Write to kim@wsj.com.
troubled Citi units says, I was responsible when he says that so long as youre a high-
for administrative activities, not for design- ranking Democratic official, you can make all
ing risk products so lets just remember the money that you want on Wall Street but LETTERS TO THE EDITOR
what my role was. if youre not one of them then you have to play
How could any lawmakers possibly remem- by the rules if the company collapses. Dummies Reply to NeverTrump for Dummies
Regarding NeverTrump for Dum- Mr. Trump will work with Congress
Trumps $1.5 Trillion Tax Detail mies (Global View, Sept. 14): Bret
Stephens concludes by saying, If
and is on the right side of each of
these key issues. Mrs. Clinton will

onald Trump released a new tax-re- ganize as a contractor or personal C corp and youre truly confident in American in- make things worse. This election is
stitutions, then well ride out Mrs. about more than making America
form plan last week, but theres since try to pay 15%. The campaign says Mr. Trump
Clinton just as we have Mr. Obama. great, its about saving America.
been more than a little confusion over would work with Congress to write tax rules Isnt the point that large and growing JAMES HOLLAND
the details. Well try to sort that distinguish the hardware numbers of Americans are not confi- Winchester, Va.
out the debate, but since the The good news is that stores from the lawyers, fi- dent at all in American institutions
candidate prides himself on Congress would rewrite nanciers and the like who and, further, that many people ha- Mr. Stephens, I praise you for hav-
not sweating the details, this might try to game the tax dif- ven't enjoyed the ride of the past ing the courage to say what The Wall
indeterminacy shows how his reform plan. ferential. eight years and dont like where we Street Journal is unable to say. Hillary
unusually reliant a Trump Then again, if the ulti- as a nation are headed? Clinton is undesirable, but Donald
Administration would be on mate cost of this hybrid Americans trust and respect for Trump is, quite simply, unthinkable.
Congress. system would be somewhere between $4.4 their Congress and the government LAWRENCE GAGE
The main virtue of the Republicans plan is trillion or $5.9 trillion, and less after ac- at large is less and less. Isnt that Pittsford, N.Y.
how Donald Trump and Bernie Sand-
directional, in the sense that Mr. Trump says counting for growth, the episode under- ers scored so many points against I have no illusions about Mr.
his top priority will be economic growth after scores how expensive and detail-dependent the institution? Trumps ideological purity, but I dont
a decade of political focus on other goals. But tearing up the status quo would be. Luckily, Perhaps Mr. Stephens should add the think hes going to open the flood-
his campaign got in trouble over how he theres still room to offset following questions to his mock dia- gates for organized labor, environ-
would treat pass-through business income. some of the costs of this logue: Did anyone die on this candi- mentalists, Planned Parenthood, sin-
Mr. Trump is proposing a 15% rate for work in progress, such as dates watch? Did this candidate show gle-payer health care, racial
corporations, and the question is whether downsizing Mr. Trumps flagrant disregard for the law regarding pandering, increased government in-
businesses that are organized as S corps, new entitlement for child communications while serving in the trusion into the economy and educa-
partnerships and the like and pay taxes care. executive branch of government and tion, and support higher taxes. With
through the personal-income code would be Some have also interpreted then flagrantly lie about her actions? Hillary Clinton, all of the above and
BILL DOUGLAS more are a slam dunk.
eligible for the same rate. As we read his the Trump plan as an intellec-
Medford, Mass. RAY PERRY
speech and fact sheet, the 15% rate would tual challenge to the GOPs Warrington, Pa.
apply to all business income. Others came growth wing because of its Mr. Stephenss insulting attitude
to the opposite conclusion. top 33% rate for single income
The Trump campaign told the National Fed- above $112,500. On the cur-
toward dummies like me is very lib-
eral-like: If you dont have the facts or
eration of Independent Business, the small- Donald Trump rent schedule, 33% kicks in for arguments on your side, then engage
business trade group, that the 15% would ap- singles at $190,000. in the politics of personal destruction. Slovakias Foreign Minister, Miro-
ply to its members. The Tax Foundation This is misdirection in part, because the GERRY DENOTTO slav Lajck, holds a masters degree
couldnt get an answer to its satisfaction and Tax Foundations distributional analysis Mount Prospect, Ill. from the Moscow State Institute of
thus modelled the Trump plan with and with- found that the Trump plan would provide a International Relations. The edito-
out the 15% pass-through rate. The plan would substantial tax cut on net for all income Despite her hidden emails, there is rial Who Will Run the U.N. (Re-
no mystery where Mrs. Clinton and view & Outlook, Sept. 20) misstated
reduce federal revenue by either $4.4 trillion groups. But far better to cut marginal tax
the Democratic Party stand on the is- the degree.
or $5.9 trillion, by the Tax Foundations static rates for all groups to improve the incentives sues. There is no Democratic plan to
estimate. to work and invest. restore economic growth and reduce i i i
In one sense, this $1.5 furor is overblown, Trying to evaluate Mr. Trumps ideas has the federal debt. That plan has been
even if the campaign was careless about its a quicksilver quality, because he has so few missing for almost eight years, since Former Vice President Hubert
terminology and the differences between fixed policy convictions and views any pro- President Obama ignored the Bowles- Humphreys first name was mis-
pass-throughs and corporations. Mr. Trumps posal as the opening bid for negotiation. In Simpson recommendations. Mr. Ste- stated in the Oct. 23 op-ed article,
advisers now tell us that under his plan all 1999 he proposed a one-time tax of 14.25% on phens should focus on the key issues: Party Loyalty Cant Make Me Vote
businesses could choose to pay either the 15% the already-taxed wealth of people with net conservative Supreme Court nomina- for Clinton.
rate or stay in the individual code. A hardware worth above $10 million, which would have tions, economic growth unleashed by
tax cuts and regulation reform,
store with a single owner, say, might pay an been the largest tax confiscation in U.S. his- Letters intended for publication should
ObamaCare repeal, restoration of mil- be addressed to: The Editor, 1211 Avenue
individual rate as low as 12%. tory. Now hes emphasizing growth. itary strength and readiness, energy of the Americas, New York, NY 10036,
The Trump campaign is attempting to pre- But the irony is that precisely because he independence and affordability and or emailed to wsj.ltrs@wsj.com. Please
vent a tax avoidance and unfairness problem: is such a tabula rasa, he would be more depen- the reversal of socialist influence in include your city and state. All letters
Since the top marginal rate in Mr. Trumps in- dant than any other President on Congress the Justice Department, IRS, State are subject to editing, and unpublished
dividual proposal would be 33%, every affluent and on those Members most engaged with the Department, EPA, NLRB, FCC and letters can be neither acknowledged nor
professional in American could instantly reor- reforms they think will improve American life. other federal agencies.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL. Monday, September 26, 2016 | A13


The Gathering Nuclear Storm

By Mark Helprin And when rogue states such as North they made good on decades of bur-

Korea and Iran build their bombs, den-sharing delinquency.
ven should nuclear brink- Americas response has been either Russia deploys about 150 more nu-
manship not result in Ar- impotence or a ticket to ride. clear warheads than the U.S. Inten-
mageddon, it can lead to Nor do nuclear reductions lead to sively modernizing, it finds ways to
abject defeat and a com- increased safety. Quite apart from en- augment its totals via undisguised
plete reordering of the in- couraging proliferation by enabling cheating. Bound by no numerical or
ternational system. The extraordi- every medium power in the world to qualitative limits, China speeds its
narily complicated and consequential aim for nuclear parity with the criti- strategic development. To cripple
management of U.S. nuclear policy cally reduced U.S. arsenal, reductions U.S. retaliatory capability, an enemy
rests upon the shoulders of those create instability. The fewer targets, would have to destroy only four or
that Americans elevate to the highest the more possible a (counterforce) five submarines at sea, two sub
offices. Unfortunately, President first strike to eliminate an enemys bases, half a dozen bomber bases,
Obamas transparent hostility to retaliatory capacity. Nuclear stability and 450 missile silos.
Americas foundational principles and depends, inter alia, upon deep re- Russia has 49 attack submarines,
defensive powers is coupled with a serves that make a successful first China 65, with which to track and kill
dim and faddish understanding of nu- strike impossible to assure. The fewer U.S. nuclear missile subs under way.
clear realities. His successor will be warheads and the higher the ratio of Were either to build or cheat to 5,000
no less ill-equipped. warheads to delivery vehicles, the warheads (the U.S. once had more
Hillary Clintons robotic compul- more dangerous and unstable. than 30,000) and two-thirds reached
sion to power renders her immune Consider two nations, each with 10 their targets, four warheads could
to either respect for truth or clear- warheads on each of 10 missiles. Ones strike each aim point, with 2,000 left


headed consideration of urgent first strike with five warheads tasked to hold hostage American cities and
problems. Theodore Roosevelts sec- per the others missiles would leave industry. China and Russia are far
retary of state once said that he was the aggressor with an arsenal suffi- less dense and developed than the
pure act (meaning action). Hillary cient for a (countervalue) strike U.S., and it would take more strikes
Clinton is pure lie (meaning lie), against the now disarmed opponents for us to hold them at risk than vice
with whatever intellectual power she cities. Americas deterrent isnt now as versa, a further indictment of reli-
possesses hopelessly enslaved to re- concentrated as in the illustration, but ance upon sufficiency calculations
flexive deviousness. by placing up to two-thirds of our stra- and symmetrical reductions.
Donald Trump, surprised that nu- tegic warheads in just 14 submarines; Clockwise from top left, Irans Ayatollah Ali Khamenei, Chinas Xi Jinping, Russia dreams publicly of its
clear weapons are inappropriate to consolidating bomber bases; and en- Russias Vladimir Putin and North Koreas Kim Jong Un. former hold on Eastern Europe and
counterinsurgency, has a long history tertaining former Defense Secretary cannot but see opportunity in a
of irrepressible urges and tropisms. William Perrys recommendation to do the cost would be unacceptable. But infrastructure is in part housed in disintegrating European Union and
Rather like the crazy boy-emperors af- away with the 450 missiles in the land- no competent nuclear strategist ever 3,000 miles of tunnels opaque to faltering NATO. China annexes the
ter the fall of the Roman Republic, he based leg of the Nuclear Triad, we are believed that, other than protecting American intelligence, we cannot know South China Sea and looks to South
may have problems with impulse con- moving that way. cities from accidental launch or rogue the exact velocity and extent of its Korea, Japan and Australasia as
troland an uncontrolled, ill-formed, Supposedly salutary reductions states, ballistic-missile defense is buildup. Why does the Obama admin- future subordinates. Given the
perpetually fragmented mind. are based upon an incorrect under- anything but a means of protecting istration, worshipful of nuclear agree- degradation of U.S. and allied
standing of nuclear sufficiency: i.e., if retaliatory capacity, making a coun- ments, completely ignore the nuclear conventional forces previously able to
X number of weapons is sufficient to terforce first strike of no use, and dimension of the worlds fastest rising hold such ambitions in check, critical
Lulled to believe nuclear inflict unacceptable costs upon an en- thus increasing stability. major power, with which the U.S. and confrontations are bound to occur.
emy, no more than X are needed. But In a nuclear world, unsentimental allies engage in military jockeying al- When they do occur, and if without
catastrophe died with we dont define sufficiency, the ad- and often counterintuitive analysis is most every day on multiple fronts? American reaction, China or Russia
the Cold War, America versary does, and the definition var- necessary. As the genie will not be Lulled to believe that nuclear catastro- have continued to augment their stra-
ies according to culture; history; the forced back into the lamp, the heart phe died with the Cold War, America is tegic forces to the point of vast supe-
is blind to rising dragons. temperament, sanity or miscalcula- of the matter is balance and deter- blind to rising dragons. riority where one or both consider a

tion of leadership; domestic politics; rence. But this successful dynamic of first strike feasible, we may see nu-
forms of government; and other fac- 70 years is about to be destroyed. nd then we have Russia, which clear brinkmanship (or worse) in
None of these perhaps three worst tors, some unknown. For this reason, Those whom the French call our re- ignores limitations the Obama which the U.S.startled from sleep
people in the Western Hemisphere, the much maligned concept of over- sponsibles have addressed the nu- administration strives to ex- and suddenly disabused of the myth
and few of their deplorable under- kill is a major contributor to stability, clear calculusin terms of suffi- ceed. According to its own careless or of sufficiencymight have to capitu-
lings, are alive to the gravest danger. in that, if we have it, an enemy is less ciency, control regimes and foreign defiant admissions, Russia cheats in late, allowing totalitarian dictator-
Which is neither Islamic State, ter- likely to calculate that we lack suffi- policyonly toward Russia, as if virtually every area of nuclear weap- ships to dominate the world.
rorism, the imprisoned economy, nor ciency. Further, if our forces are cali- China, a nuclear power for decades, ons: deploying missiles that by treaty Current trajectories point in exactly
even the erosion of Americas na- brated to sufficiency, then presum- didnt exist. While it is true that to supposedly no longer exist; illegally this direction, but in regard to such
tional character, though all are of ably the most minor degradation will begin with its nuclear arsenal was de converting antiaircraft and ballistic- things Mr. Trump hasnt the foggiest
crucial importance. render them insufficient. minimis, in the past 15 years China missile defense systems to dual-capa- and, frankly, Mrs. Clinton, like the

The gravest danger Americans face has increased its land-based ICBMs ble nuclear strike; developing new president, doesnt give a damn.
is fast-approaching nuclear instabil- or is it safe to mirror-image by more than 300%, its sea-based by types of nuclear cruise missiles for The way to avoid such a tragedy is
ity. Many believe it is possible safely willingness to go nuclear. Ev- more than 400%. Depending upon the ships and aircraft; keeping more mis- to bring China into a nuclear control
to arrive at nuclear zero. It is not. ery nuclear state has its own configuration of its missiles, China siles on alert than allowed; and retain- regime or answer its refusal with
Enough warheads to bring any coun- threshold, and one cannot assume can rain up to several hundred war- ing battlefield tactical nukes. Americas own proportional increases
try to its knees can fit in a space volu- that concessions in strategic forces heads upon the U.S. In the almost complete absence of and modernization. And to make sure
metrically equivalent to a Manhattan will obviate nuclear use in response As America shrinks its nuclear its own soft power, Russia fre- that both U.S. nuclear and conven-
studio apartment. Try to find that in to conventional warfare, which was forces and fails to introduce new quently hints at nuclear first use. All tional forces are strong, up-to-date,
the vastness of Russia, China, or Iran. Soviet doctrine for decades and is a types, China is doing the opposite, this comports with historical Soviet- and survivable enough to deter the
Even ICBMs and their transporter- Russian predilection now. increasing them numerically and Russian doctrine and conduct; is an militant ambitions of the two great
erector-launchers can easily be con- Ballistic-missile defense is op- forging ahead in various technolo- important element of Putinesque powers rising with daring vengeance
cealed in warehouses, tunnels and posed and starved on the assumption gies (quantum communications, su- tactics for reclaiming the Near from what they regard as the shame
caves. Nuclear weapons age out, but, that it would shield ones territory af- percomputers, maneuverable hyper- Abroad; and dovetails perfectly with of their oppression.
thanks to supercomputing, reliable ter striking first, and would therefore sonic re-entry vehicles), some of Mr. Obamas advocacy of no first
replacements can be manufactured tempt an enemy to strike before the which America has forsworn, such as use, unreciprocated U.S. reductions Mr. Helprin, a senior fellow of the
with only minor physical testing. Un- shield was deployed. As its oppo- road-mobile missiles, which in sur- and abandonment of nuclear mod- Claremont Institute, is the author of
accounted fissile material sloshing nents assert, hermetic shielding is vivability and range put to shame ernization. Which in turn pair nicely Winters Tale, A Soldier of the
around the world can, with admitted impossible, and if only 10 of 1,500 U.S. Minuteman IIIs. with Mr. Trumps declaration that he Great War and the forthcoming
difficulty, be fashioned into weapons. warheads were to hit American cities, Because Chinas nuclear weapons would defend NATO countries only if novel Paris in the Present Tense.

Presidential Debates Get No Respect. They Should

By Newton N. Minow Today 78 countries and regions time in a modern campaign when vot- some countries, like Sweden or Kenya, ness to debate again, there wouldnt be
And Craig L. LaMay around the world hold leader debates. ers see candidates think on their feet debates have had as many as nine par- another televised presidential debate

This year debates have been held in and speak at length and extemporane- ticipants, while others, like Holland, until 1976. President Ford, down 30
s Americans enter the home Peru, Serbia, the Dominican Republic ously, without the benefit of script or will have separate debates for the ma- points in the polls, agreed to meet
stretch of one of the most and Guatemala, and are scheduled in consultants. The debates give voters jor and minor candidates. Jimmy Carter, who wanted the country
unusual presidential campaigns Cambodia. Argentina held its first multiple opportunities to see how can- In the U.S., the rule for participa- to know him better. Four years later,
in memory, journalists, the political presidential debate last year. Most didates handle pressure, how well they tion is simple: Any candidate who is Mr. Carter refused to go on stage with
parties and voters are awaiting the de- countries of the European Union now legally eligible to be president, who is John Anderson, but Ronald Reagan did,
bates. Everyone is wondering what will hold televised debates; Britain, long a on enough state ballots to win an and changed history.
happen on Monday at the first debate holdout, began leader debates in 2010. Following the U.S. example, electoral majority, and who has 15% Since 1976 the presidential debates
at Hofstra University. And everyone, South Africa held its first in 1994, be- 78 countries or regions voter support in an average of five have continued uninterrupted. They
not least the candidates, has an idea tween Nelson Mandela and F.W. de major polls is automatically included have become the most important fea-
about how to make them better. Klerk, a transformative moment in the now have leader debates. in the debates. ture of Americas presidential cam-
These arent academic debates, nor countrys history. The U.S. Commis- Yes, the debates could be better paigns. They are far better instru-
should they be. In a real debate sion on Presidential Debates has been and the commission works tirelessly to ments to inform the voters than the
judges assign points and declare the instrumental in many of these de- think on their feet. They show the can- make them sobut that we have them nasty commercials that dominate
winner. In presidential debates, voters bates, providing guidance on formats, didates on stage armed with nothing at all is something of a miracle. When campaigns, funded often by anony-
are the judges, and they declare the security, candidate negotiation and but their character and intellect. The Vice President Richard Nixon and Mas- mous sources. The presidential de-
winner on Election Day. There have stage design. American debates are also provided to sachusetts Sen. John Kennedy met for bates treat American voters with re-
been 30 presidential and nine vice- The singular benefit of leader voters without commercials. the first televised debate in 1960, it spect. The U.S. has taken the lead, and
presidential debates, beginning with debates is that voters get to see Debates are imperfect, and always was the first ever face-to-face debate the world has taken notice.
the first on Sept. 26, 1960. Weve candidates talk to each other (or one will be. Candidates dont have to between presidential candidates.
come a long way since. another in parliamentary systems), participate. Incumbents everywhere If Congress in 1960 hadnt given a Mr. Minow is vice chairman of the
Today the televised presidential de- face-to-face. Critics dismiss them as dont like them and often try to avoid one-time suspension of the Equal Time Commission on Presidential Debates
bates arent only an important instru- theater, and sometimes theyre right; them, especially if they lead in the Law of the Communications Act, the and former chairman of the Federal
ment in American democracy; they many of this years U.S. primary polls. There are hard choices about networks couldnt have broadcast them Communications Commission. Mr.
are a near-universal requirement of debates were uninformative, chaotic formats, sponsors, whether there will without including every legally quali- LaMay is associate dean at North-
democratic elections, from Afghani- and even vulgar. be moderators and who they should fied candidateand typically there are westerns Medill School of Journal-
stan to Zambia. If Americans are look- But the presidential debates are an- be, and which candidates and how more than 200. With Kennedys death ism, Media, and Integrated Marketing
ing for something to feel good about other animal. Not only are they sub- many are invited to participate. In and Johnsons and Nixons unwilling- Communications.
this campaign season, this is it. stantive and serious, they are the only


A 1984 letter to President Ronald Dear Andy May I make a suggestion? This
Rupert Murdoch Robert Thomson
Executive Chairman, News Corp Chief Executive Officer, News Corp Reagan, and a draft of his reply, as Im sorry to be so late in answer- administration, believing that govt.
Gerard Baker William Lewis published in the second volume of Let- ing your letter but as you know Ive has done many things that could
Editor in Chief Chief Executive Officer and Publisher ters of Note: An Eclectic Collection of been in China and found your letter better be done by volunteers at the
Rebecca Blumenstein, Matthew J. Murray DOW JONES MANAGEMENT:
Correspondence Deserving of a Wider here upon my return. local level, has sponsored a Private
Deputy Editors in Chief Ashley Huston, Chief Communications Officer; Audience, compiled by Shaun Usher: Your application for disaster Sector Initiative Program, calling
DEPUTY MANAGING EDITORS: Paul Meller, Chief Technology Officer; relief has been duly noted but I upon people to practice volunteer-
Mark Musgrave, Chief People Officer;
Michael W. Miller, Senior Deputy;
Edward Roussel, Chief Innovation Officer;
Dear Mr. President, must point out one technical ism in the solving of a number of lo-
Thorold Barker, Europe; Paul Beckett, Asia;
Christine Glancey, Operations; Jennifer J. Hicks, Anna Sedgley, Chief Financial Officer; My name is Andy Smith. I am a sev- problem; the authority declaring cal problems.
Digital; Neal Lipschutz, Standards; Katie Vanneck-Smith, Chief Customer Officer enth grade student at Irmo Middle the disaster is supposed to make Your situation appears to be a
Alex Martin, News; Ann Podd, Initiatives;
School, in Irmo, South Carolina. the request. In this case your natural. Im sure your Mother was
Andrew Regal, Video; Matthew Rose, Enterprise;
Stephen Wisnefski, Professional News; Jason P. Conti, General Counsel; Today my mother declared my bed- mother. fully justified in proclaiming your
Jessica Yu, Visuals Nancy McNeill, Corporate Sales; room a disaster area. I would like to However setting that aside Ill room a disaster. Therefore you are
Steve Grycuk, Customer Service;
Paul A. Gigot, Editor of the Editorial Page; Jonathan Wright, International;
request federal funds to hire a crew to have to point out the larger prob- in an excellent position to launch
Daniel Henninger, Deputy Editor, Editorial Page DJ Media Group: clean up my room. I am prepared to lem of available funds. This has another volunteer program to go
WALL STREET JOURNAL MANAGEMENT: Almar Latour, Publisher; Kenneth Breen, provide the initial funds if you will pro- been a year of disasters, 539 hurri- along with the more than 3000
Trevor Fellows, Head of Global Sales; Commercial; Edwin A. Finn, Jr., Barrons;
Suzi Watford, Marketing and Circulation; Professional Information Business:
vide matching funds for this project. canes as of May 4th and several already underway in our nation
Joseph B. Vincent, Operations; Christopher Lloyd, Head; I know you will be fair when you more since, numerous floods, forest congratulations.
Larry L. Hoffman, Production Ingrid Verschuren, Deputy Head consider my request. I will be await- fires, drought in Texas and a num- Give my best regards to your
EDITORIAL AND CORPORATE HEADQUARTERS: ing your reply. ber of earthquakes. What Im get- Mother.
1211 Avenue of the Americas, New York, N.Y., 10036 Sincerely yours, ting at is that funds are danger- Sincerely,
Telephone 1-800-DOWJONES
Andy Smith ously low. Ronald Reagan
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A14 | Monday, September 26, 2016 THE WALL STREET JOURNAL.

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Yen vs. Dollar

100.99 s 0.22% Hang Seng
23686.48 t 0.31% Gold
1337.20 t 0.24% WTI crude
46.32 s 2.16% 10-Year JGB
yield -0.049% 10-Year Treasury
yield 1.615%

105 22500 1350 45 -0.10 1.50

100 21200 1300 40 -0.20 0.75

95 19900 1250 35 -0.30 0.00

As of 12 p.m. ET Sources: Tullett Prebon; SIX Financial

2016 Dow Jones & Company. All Rights Reserved. THE WALL STREET JOURNAL. Monday, September 26, 2016 | B1

China Backs Credit Default Swaps Hanjin

To Sell Its
BY SHEN HONG use can build up hidden finan- the burden on Beijing to res- it also suggests we are going
Dumped cial risks. cue companies that get into fi- to see more defaults, said
The number of defaulted bonds in
China has surged in recent years.
SHANGHAIChina has ap-
proved the sale of financial
products that can protect in-
The National Association of
Financial Market Institutional
Investorsan industry body
nancial difficulty.
Following years of rapid
buildup of public- and private-
Wang Ming, a partner at
Shanghai Yaozhi Asset Man-
agement Co., a bond fund that

vestors against bond or loan
defaults, signaling an in-
creased willingness to let mar-
backed by the Peoples Bank of
China, the countrys central
bankannounced the rollout
sector debt, Chinas financial
system is coming under in-
creased strain.
manages 2 billion yuan in as-
By making these so-called
ket forces deal with the rising of four types of so-called There have been 45 defaults credit-risk mitigation tools BY COSTAS PARIS
30 number of companies that credit-risk mitigation tools totaling 26.81 billion yuan available, it simply means that
arent paying back debt. and released guidelines for ($4.02 billion) in Chinas do- now investors will have to bite Hanjin Shipping Co. likely
20 The move means that Chi- each of them on Friday. mestic bond market this year, the bullet themselves, instead will sell some of its most valu-
nese investors will for the first Regulators are hoping that already exceeding the 20 de- of continuing to hope for a able ships as creditors scramble
10 time be able to buy products products such as CDS, which faults on 12 billion yuan in government bailout, Mr. to secure whatever remains of
such as credit default swaps, pay out if the issuer of a bond bonds in all of 2015. Wang said. Koreas biggest container oper-
0 known as CDS. Such deriva- or a loan defaults, will become The latest move is cer- The National Association of ator as it heads toward liquida-
2013 14 15 16* tives drew wide scrutiny in popular among investors in tainly a sign that the authori- Financial Market Institutional tion, people involved in the pro-
*Year to date the West during the global fi- the countrys main $8.5 tril- ties are adopting a more mar- Investors also introduced a cess said.
Source: Wind Info nancial crisis because of the lion bond market. ket-oriented approach in new, complex instrument Those people said Korean
THE WALL STREET JOURNAL. way in which their extensive In turn, that could lower handling rising credit risks but Please see CDS page B2 peer Hyundai Merchant Ma-
rine Co. would be the first to
look at Hanjins 37 container

Self-Driving vessels, with a focus on five

13,000-container ships, the
largest in the troubled car-

Hype Fails riers fleet. But it isnt certain

HMM will find the money to
buy the ships, which could go

To Reflect for about $90 million each.

HMM will be the first to
cherry-pick among Hanjins

Realities vessels, one person said.

They would like to get the big
ones, but that largely depends

O JUDGE by recent on financial backing from the
claims, fully autono- government and Korea Devel-
mous self-driving opment Bank.
technology is just around the Hanjin filed for bankruptcy
corner. Uber Technologies protection in August. HMM is
Inc. is offering Pittsburgh facing its own financial prob-
residents rides in autono- lems, reeling under 5.2 trillion
mous Ford Fusions. Ford Mo- won ($4.54 billion) of debt af-
tor Co., ter being unprofitable for sev-
BMW AG, eral years.
Volvo Car Both the government and
Corp. and KDB have said they would back
Lyft Inc. HMM in buying Hanjin assets,
say they provided such a move would
KEYWORDS will pro- help it stay competitive. HMM is
CHRISTOPHER duce fully looking to secure Hanjins slice
MIMS autono- of moving Koreas exports to
mous vehi- Western markets, but would
cles by 2021 need more capacity to achieve it.
or sooner. Tesla Motors Inc. HMM has said it is explor-
Chief Executive Elon Musk, ing all possibilities with Han-
rarely topped in hyperbole, jin. A Hyundai spokesman said
says the technology will be Friday it was too early to com-
here within 24 months. ment or to take action, as Han-
To many industry insiders, jin has until December to sub-

these claims are largely hype. mit a rehabilitation plan to a

Theyre not false, but they Yeti has grown from a niche supplier of coolers for hunters and fishermen into a mass-market phenomenon. Korean court.
abuse the terms autonomous Both the Korean govern-

Yeti Windfall: A Cool $3.3 Billion

vehicle and self-driving, ment and KDB have said they
which evoke images of hop- wont pump more funds into
ping into a car, entering a Hanjin except for money to un-
destination and disappearing load some of the half-million
into sleep, food or our Small equity firm stands to multiply its investment by about 50 times with IPO of cooler maker containers stranded world-
phones. wide. Yoo Il-ho, South Koreas
That is not what were go- BY MATT JARZEMSKY some of the people said. nomic growth subdued, the The gains reflect Yetis deputy prime minister for eco-
ing to get by 2021. It wont Yeti, which in July filed to companies behind hot prod- growth from a niche supplier nomic affairs, said Friday he
happen for a long time, A small private-equity go public, still has to con- ucts are trading for high into a mass-market phenom- expects 90% of the unloading
maybe decades. firm is about to get a big vince investors it is worth prices relative to their earn- enon. Texas brothers Roy of Hanjin containers to be com-
These statements are as- payoff from a bet on $400 the hefty price tag. The mar- ings. Under Armour Inc. is and Ryan Seiders founded pleted by the end of October.
pirations, theyre not really coolers. keting process for the IPO valued at 67 times its pro- the company a decade ago A U.S. bankruptcy judge on
reality, says Raj Rajkumar, a If all goes as hoped, Cor- has yet to begin, and the jected profit for this year, selling coolers to Gulf Coast Friday expressed concern that
professor of engineering at tec Group, with just 20 em- company could adjust its while ski-jacket-maker Mon- hunters and fishermen. It has Hanjins efforts to cobble to-
Carnegie Mellon University, ployees in Midtown Manhat- projected valuation based on cler SpA trades for 20 times since expanded into soft gether a restructuring plan
who collaborates with Gen- tan, could make a profit on conversations with investors. this years expected income, coolers and other products may be moving too quickly for
eral Motors Co. The tech- paper of about $3.3 billion in A $5 billion valuation according to FactSet. such as drinkware, which U.S. creditors. Its very con-
nology just isnt the coming initial public of- would put Yeti at a steep 36 Still, making back 50 now account for 62% of its densed, Judge John Sherwood
there.Theres still a long fering of Yeti Holdings Inc., times its 2015 earnings be- times an investment in four sales. of the U.S. Bankruptcy Court in
way to go before we can take according to people familiar fore interest, taxes, deprecia- years is nearly unheard of in The companys stainless- Newark, N.J., said at a hearing
the driver away from the with the matter. tion and amortization of private-equity circles. It is steel mugs were a hard-to- in the companys U.S. bank-
drivers seat. The company is seeking a $137 million. The company is pretty rare even in the high- find holiday gift item in ruptcy proceeding. Im just
Dr. Rajkumar is hardly valuation of $5 billion in its growing quickly, however, return world of investing in 2015, thanks in part to a concerned that U.S. creditors
alone in his skepticism. Mary IPO, which could come as and will be basing its pro- tech startups. Cortec already wave of tweeting by owners will be asleep at the wheel, be-
Cummings, a professor of me- soon as October, the people posed value on newer data has collected a $312 million marveling at their ability to cause its a fast process.
chanical, electrical and com- said. Cortec bought a and forecasts. dividend payment from Yeti keep drinks hot or cold for In-Soo Nam
puter engineering at Duke roughly two-thirds stake in With U.S. stock indexes earlier this year, according hours. Its ice chests are so and Tom Corrigan
Please see MIMS page B3 2012 for about $67 million, near all-time highs and eco- to a regulatory filing. Please see YETI page B2 contributed to this article.

Foreign Jet-Fighter Companies Rush to Woo India

BY DANIEL STACEY rushing in with offers to set contain Chinas military. India plan finally was approved by
up production lines to India. has struck deals with the U.S. Shrinking Squadrons Indias government, and an
NEW DELHIIndia is being Efforts to give India un- to buy everything from Many of India's old ghter jets are set to retire soon, leaving a agreement was signed on Fri-
offered blueprints to advanced precedented access to jet Apache helicopters to trans- shortfall. Projected size of Indias Air Force: day.
combat aircraft by the worlds fighter know-how illustrate port planes and artillery, lift- Similarly, efforts to co-de-
aerospace companies, a move the countrys rising impor- ing the country to Indias sec- Year Number of squadrons Authorized level: 42 velop a next generation fighter
unthinkable even a decade tance to the West as Chinas ond-biggest defense trading 2012 37 with Russias Sukhoi stalled
ago, as New Delhi gets ready power increases, analysts say. partner behind Russia. over cost disputes, while a
to place another multibillion- India, until a decade ago, Chinas rise has changed 2017 32 third indigenous jet program
dollar air force order. was trying stubbornly to build the equation, said Pushan aiming to deliver 120 light
2022 35
Indias aging military jet its own jets, after the U.S. and Das, a fellow with the Ob- combat aircraft is behind
fleet desperately needs an up- Japan imposed sanctions fol- server Research Foundation, a 2027 schedule.
grade, which analysts say may lowing its nuclear tests in policy think tank based in New Those programs relied on
spur it to place an order worth 1998, which broke U.S. nonpro- Delhi. Industry experts esti- 2032 22 shortfall state-run Hindustan Aeronau-
more than $10 billion in the liferation laws and sparked mate India needs over 300 tics to build and design jets.
next year. Hoping for an edge, tensions with Pakistan. U.S. new combat jets in the next 15 Source: Angad Singh/Vayu Aerospace and Defence Review Defense experts say the com-
and encouraged by a recent companies were blocked from years. THE WALL STREET JOURNAL. pany faces a skills shortage as
law that allows 100% foreign giving India the technology it It could be a while before a its best engineers are spread
ownership of local defense needed. deal is struck. Successful bid- such attempts have failed. dia fell through last year fol- thinly across projects that in-
firms, jet-fighter makers such Relations between India ders also face the challenge of A deal struck in 2012 with lowing disagreements, and clude retrofitting old Russian
as Lockheed Martin Corp., and the U.S. have improved setting up a jet-manufacturing Frances Dassault Aviation SA was replaced with a smaller and French jet fighters and
Boeing Co. and Saab AB are since, as both share a goal to system from scratch. Previous to build Rafale fighters in In- plan to import 36 jets. That Please see JET page B2
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B2 | Monday, September 26, 2016 THE WALL STREET JOURNAL.


These indexes cite notable references to most parent companies and businesspeople
in todays edition. Articles on regional page inserts arent cited in these indexes.

A Ford Motor..................B1 Shandong Chambroad

Aegis Group ................ B3 G Petrochemical...........B5
Alibaba Group.............A6 Shanghai Yaozhi Asset
General Motors...........B1 Management.............B1
Allianz ......................... B7 Goldman Sachs Group B5 Sony.............................B8
Alphabet......................B3 GoPro...........................B2 Sony Pictures
AMC Entertainment...B8
H Entertainment..........B2
AMC Entertainment
Hanjin Shipping .......... B1 Sukhoi ......................... B1
Apple...........................B2 Hindustan Aeronautics T
.....................................B1 Tesla Motors...............B1
B HSBC...........................A6 Time ............................ B3
BAE ............................. A2 Hyundai Merchant Toyota Motor..............B3
BandLab Technologies B3 Marine.......................B1 Twitter ........................ B8
Barcodes......................B2 I-J U
BMW ........................... B1
Boeing....................A2,B1 Igloo Products.............B2 Uber Technologies ...... B1
Intel.............................B3 Under Armour.............B1
C J.P. Morgan Chase......B5 V
Carlyle Group..............B2 L Vietnam Dairy Products
Carmike Cinemas........B2
LG Electronics.............B1 .....................................B3
China Mobile...............A6
Lockheed Martin...A2,B1 Vinamilk......................B3
Coleman.......................B2 Volvo Car.....................B1


Commerzbank ............. B5
Cortec Group...............B1 M-N W
Wenner Media ............ B3
D-F Moncler ....................... B1
Northrop Grumman....A2 Y
Dalian Wanda Group
............................... B2,B8 S Yahoo...........................B3
Dassault Aviation.......B1 Saab.............................B1 Yeti Holdings .............. B1
Dentsu.........................B3 Salesforce ................... B8 Z
Dongming Petrochemical Samsung Electronics Zurich Insurance Group
Group.........................B5 ............................... B1,B2 .....................................B7

INDEX TO PEOPLE Wanda offered nearly 80% of its scheduling slots to Warcraft on opening day. The film earned more than $220 million in China.
B L Sammons, Jay ............ B2

Sony Targets China With Tie-Up

Brooks, Lane...............B4 Langell, John...............B4 Seiders, Ryan..............B1
Shashua, Amnon ........ B3
C Luo Wenbo..................B5
Shladover, Steven.......B3
Coelingh, Erik..............B3 M
F Matsukawa, Tadashi...B7
Meidan, Michal...........B5
Tsai, Joseph................A6 Under the alliance, Wanda, for its part, can and Walt Disney Co. game adventure Jumanji.
Frank, Alan..................B3 benefit from Hollywoods de- Wanda will strive to high- China limits foreign studios
Fukaya, Koji.................B7 Ming, Wang.................B1 U Wanda will promote cades of moviemaking exper- light the China element in the theatrical releases to 34 films
Urmson, Chris.............B3
Musk, Elon..................B1
studios films to tise, Mr. Huang said. films in which it invests, the a year, and restricts marketing,
N W What Chinese studios know company said. curbing Hollywoods ability to
Gruber, Andreas..........B7
Nakamoto, Shoichi ..... B3 Wang, Jianlin.........B2,B8
Chinese moviegoers are what people like, but they The new alliance under- promote films through tradi-
H Wang, Nelson ............. B5 lack the know-how or a strong scores Hollywoods increasing tional tools such as billboards
Hawkins, William.......B7 Wenner, Gus ............... B3 Sony Pictures Entertain- computer-graphics team, he dependence on the Chinese and TV commercials.
Hong, Kuok Khoon......B3 Paranjape, Abhay........B2 Wenner, Jann..............B3 ment Inc. is teaming up with said. Its going to be a mutually box office. The deal with Wanda
Huttner, Michael.........B7 Paulson, Henry............B5 Widerstrm, Jan.........B2 Dalian Wanda Group to help beneficial partnership. Studios weigh carefully how doesnt guarantee Sony will
J Price, Ray....................B4
Y market its films in China, a The alliance is the latest a film will play in China, and get more films into China, but
Q foray into the global entertain- executives sometimes steer a partnership with one of
Johnson, Alan.............B5 Yamamoto, Toshihiro..B3
Quinn, George.............B7
By Wayne Ma in Beijing ment industry by Wandas bil- clear of topics such as homo- Chinas biggest and most pow-
K Z and Erich Schwartzel lionaire founder, Wang Jianlin, sexuality and the supernatural erful companies cant hurt.
Karp, Mike...................B5 R-S Zhang, Liucheng ......... B5 in Los Angeles who started as a commercial- that tend to alarm the coun- Sony had the worst China box
Kumar, Pratyush.........B2 Rajkumar, Raj ............. B1 Zielke, Martin.............B5 land developer. Earlier this trys censors. office sales of any of the big six
Kuok, Meng Ru...........B3 Rosengren, Eric...........B7 Zimmer, John..............B3 deal that could boost Sonys year, Wanda purchased Leg- Mr. Wang is well on his way Hollywood studios last year. The
box-office returnsand endary Entertainment, a pro- to making his company a global James Bond film Spectre
strengthen Wandas hand in ducer of summer blockbusters force in entertainment. He was earned a modest 542 million

YETI tive of West Marine, a boat-

ing-products retailer that
carries Yeti products. Those
are tricky waters to navi-
the movie business.
Under the deal, Wanda
would leverage its ticketing
platform, entertainment plazas
including Godzilla and War-
craft, for about $3.5 billion.
Wanda is the largest cinema
owner in China, and its AMC
interested in acquiring a large
stake in Paramount Pictures, but
the resolution of a power strug-
gle at parent company Viacom
yuan ($81 million), while An-
nie, a musical comedy featuring
Jamie Foxx, grossed 3.45 million
yuan, one of the lowest for any
Continued from the prior page gate. and theme parks to promote Entertainment Holdings Inc. Inc.which announced last Hollywood film.
popular they have become a Yeti lost $38.2 million in Sony films to Chinese movie- is seeking to become the larg- week that it wouldnt be selling Wandas knack for helping
favorite among thieves. Cool- the first quarter as expenses goers. Wanda could also show- est theater operator in the U.S. off a piece of the studioside- Hollywood films succeed in
ers start at $250 and run to for selling and general and case Sony films on its more with its proposed acquisition lined those ambitions. China was on full display this
$1,300 for a model Yeti says administrative purposes rose than 2,000 screens in China, of Georgia-based Carmike Cin- For Sony, which has strug- summer with Legendarys
can hold multiple elk. to $149.8 million from $13.9 and, according to a person fa- emas Inc. gled at the box office, the part- Warcraft. A disappointing
Yetis sales more than tri- million in the year-earlier miliar with the arrangement, it The Sony deal will move nership will help the market- performer in the U.S., it earned
pled in 2015 to $469 million. quarter, according to a regu- will have the option to buy a Wanda beyond exhibiting and ing of films in a country that more than $220 million from
The company touts its cool- latory filing. Igloo Products small stake in some films it co-financing U.S. films and expects to surpass the U.S. as Chinese audiences, according
ers seamless construction Corp., Coleman Co. and oth- helps market, if Sony agrees. into the critical area of mar- the worlds largest box office to Box Office Mojo.
and the two walls of stain- ers have introduced new What (Wanda) could offer keting. Wanda said in a state- in the next few years. Wanda offered nearly 80%
less steel that give its mugs coolers with features similar Sony is local market knowl- ment that it will continue Sony has a number of major of its scheduling slots to War-
an insulating vacuum. The to Yetis at lower prices. edge, said Richard Huang, an seeking to identify mutually releases hitting theaters in the craft on opening day.
company has also benefited The Seiders brothers grew analyst at Nomura Holdings Inc. beneficial opportunities with next year, including the sci- Lilian Lin in Beijing
from social media, which has up working with their father, They could offer them a little all of the major Hollywood stu- ence-fiction drama Passen- contributed to this article.
made it possible for niche Roger, who founded fishing- more airtime for a specific diosSony, Twentieth Century gers with Jennifer Lawrence,
products to get widespread rod materials company Flex movie, whether its the 007 or Fox, Paramount Pictures, Uni- the toy adaptation Barbie  Heard: China is coming to a
publicity and post explosive Coat Co. out of his garage in Spider-Man franchises. versal Pictures, Warner Bros. and a reboot of the 1995 board- theater near you...................... B8
growth. Houston, according to Yetis
Cortecs potential windfall website.
comes from a strategy that
many of its peers aim to fol-
Cortecs 2012 investment
gave Yeti the funding it
JET and Boeings bids to sell jets in

low. Private-equity firms needed to expand to a more Boeings India President

have their eyes out for hot mainstream market of beach- Pratyush Kumar said it was
products, said Jay Sammons, goers, campers and backyard Continued from the prior page aiming to help India build F/
head of the consumer and re- grillers. It began licensing building helicopters and A-18 fighters and develop jets
tail team at Carlyle Group LP. the logos of dozens of col- drones. The company didnt in the long term.
Mr. Sammons helped oversee leges to win over football respond to requests for com- Saabs plan would have it
a roughly $500 million in- tailgaters, and it rolled out ment. build a second manufacturing
vestment in Beats Electron- lines of mugs and stainless- Impatient with the delays, plant in Sweden for its Gripen
ics that made Carlyle a profit steel drink koozies. India relaxed foreign invest- E jet type, train Indian techni-
of about $1 billion when Ap- Cortec is run by four part- ment laws and defense pro- cians there, and then disman-
ple Inc. bought the head- ners, including a former as- curement rules to kick-start a tle and ship the plant to India,
phone maker. sistant to the chairman of privately managed jet-fighter said its Indian country head
In Yetis case, the risk for annuities seller SunAmerica industry as its air force strug- Jan Widerstrm. Saab hopes
potential investorsinclud- and a former executive of gles to keep its aging fighter to gain an advantage by offer-
ing Cortec, which will con- building-supply company Ply fleet in the sky, including ing the blueprints for the
tinue to own a majority of Gem Industries Inc. It is cur- MiG-21 jets bought in the India agreed Friday to import 36 Dassault-made Rafale fighters. Gripens advanced radar sys-
the company after the IPO rently investing its sixth 1960s. Since then, U.S. manu- tem, Mr. Widerstrm said.
is that sort of popularity can fund, a $1.1 billion pool of facturers Lockheed and Boe- tary cooperation between the side India. Saab and its suppliers could
be fickle. For every Under capital. Its other investments ing, and Swedens Saab, have U.S. and India, said Abhay Still, it could take Lockheed help train 20,000 local techni-
Armour, whose market capi- include Barcodes Inc. and proposed building jets with In- Paranjape, Lockheeds director roughly four years to transfer cians in coming years if their
talization has risen to $16.1 Community Veterinary Part- dian partners. of business development in In- the Fort Worth F-16 line, bid is successful, and build
billion from about $600 mil- ners, according to its web- The U.S. hasnt sold jet dia. which is slated for closure anywhere from 100 to 200 jets
lion in its 2005 stock-market site. fighters to India before, with If you ever want to fight soon when remaining orders for the Indian air force and ex-
debut, there is a GoPro Inc., Most of Cortecs earnings Indias air force preferring Eu- together, you need to train to- for the aging jet type tail off, port customers in places such
whose shares are down 29% on the stake in Yeti will go to ropean and Russian manufac- gether, and to do that you industry officials said. as Thailand and Malaysia, said
from their IPO price. its own investors. The fund turers. need to fly the same kind of A logistics-sharing treaty, Mr. Widerstrm.
The real question is can Cortec used to buy Yeti has Lockheed also has proposed aircraft, Mr. Paranjape said. signed last month, is the first Were offering to set up
Yeti keep innovating, and notched annual returns of moving its F-16 production U.S. industry officials said per- of three agreements the U.S. aerospace capability in India
how far can they take this about 53% through 2015, ac- line in Fort Worth, Texas, to unit costs could drop by as wants India to sign to allow for the next 100 years, he
brand and broaden it without cording to Palico SAS, which India, and training more than much as 20% in India com- for a greater transfer of U.S. said.
losing their authenticity? operates an online market- 5,000 locals. Its bid also is pared with the U.S., poten- military technology, poten- Doug Cameron
said Matt Hyde, chief execu- place for fund stakes. critical to strengthening mili- tially driving fresh sales out- tially strengthening Lockheed contributed to this article.

Samsung Complaints Go On CDS

their debts. But the authori-

Legal Notices BY EUN-YOUNG JEONG Galaxy Note 7 by three days to

ties attitude has shown a no-
table change since last year,
when slowing economic
Oct. 1 in order to swiftly Continued from the prior page growth and a depressed real-
BANKRUPTCIES SEOULCustomer com- complete its recall, citing that called credit-linked notes, a estate market weakened their
plaints that replacement bat- some 200,000 consumers in bond-like product that allows ability to foot the bill even for


 teries for Samsung Electron- South Korea havent yet investors to enjoy both inter- bleeding state-owned compa-


 ics Co.s Galaxy Note 7 have turned in their old phones. est on the notes and credit-de- nies.




       been overheating and quickly On Thursday, South Korean fault insurance. The investors association



 losing battery power threaten television news network YTN hired a group of lawyers and

 !      "        to complicate the South Ko- began reporting incidents of bankers to help align the rules



rean technology giants un- newly exchanged smartphones
The aim: Perfect the of the four products with in-
 ""  $  



precedented recall of its pre- overheating or losing battery markets mechanism ternationally accepted prac-
mium smartphone. power even as they are being tices, including those pub-





In South Korea, where Sam- charged.
of risk spread and lished by the International




"  $  


sung began handing out re- So far, the complaints have risk sharing. Swaps and Derivatives Associ-


&    placement smartphones to been only registered in South ation, a global body based in


   consumers this past Monday, Korea. New York that sets standards



the company acknowledged on The company declined to In a statement, the associa- for derivatives transactions.


 Friday that some consumers confirm if similar cases were tion said the rollout was China first experimented

 !   "#$ "
 ! %
  &   ' &
&) *
& -
 *. had been complaining about found in other countries. partly intended to perfect the with some credit-mitigation
  /      %  0'()*)+ the replacement smartphones, A Samsung spokesman markets mechanism of risk products six years ago.

   " 2    3455 11 6& 7 - 
which contain nonremovable said on Friday that the issue is spread and risk sharing. But that market never took
 / ' 5%  8 +
 3455 11 "#$ 
 / ' 5

 3455 11 
 / ' 51 replacement batteries. completely unrelated to bat- Beijing had long been un- off because the state kept bail-
 &  / %  9
+ 2   '
2  & ++ 
  ' In a statement released on teries, calling the incidents comfortable with the idea of ing out insolvent companies
51 Sunday, Samsung said it will isolated cases related to allowing companies, including instead of letting them de-
delay resuming sales of the mass production issues. private firms, to default on fault.
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THE WALL STREET JOURNAL. Monday, September 26, 2016 | B3

TECHNOLOGY @wsjd | wsjd.com

MIMS Volvos cars might refuse to

go into self-driving mode on
roads that are insufficiently
mapped, says Erik Coelingh, Dentsu Overbilled for Ads
Continued from page B1 the technical lead on Volvos
University, says a fully auton- self-driving car efforts. The Japanese advertising
omous car operates by itself cars will pull over to the side
under all conditions, period. of the road, or come to a giant apologizes to
She adds, Were a good 15 to stop, if inclement weather clients, blames issue on
20 years out from that. impedes the vehicles percep-
Chris Urmson knows the tual abilities, Mr. Coelingh overworked employees
field as well as anyone, hav- says.
ing led the self-driving car That is a scary thought BY SEAN MCLAIN
project at Google parent Al- and one reason why early
phabet Inc. for more than fully autonomous cars will TOKYOAdvertising giant
seven years before departing require monitoring by hu- Dentsu Inc. on Friday said it
in August. Last March, he mans. overcharged at least 111 com-
told the SXSW conference It is worth noting that panies for internet ads, a rare
that self-driving technology Google, the company with the slip for a company that has
will arrive for some of us in a most experience with self- broad reach in Japanese media
few years, and for the rest of driving technology, is among but usually avoids making
us in 30. That is, it could ar- the most cautious. Google has headlines itself.
rive soon for very specific yet to announce a release Dentsu executives bowed
uses; but as a full-bore re- date for its self-driving vehi- deeply and apologized at a To-
placement for humans, it will cles, though it plans to soon kyo news conference, where
take a long time. begin tests in Fiat Chrysler they blamed overworked em-
In other words, it is all minivans. ployees for the overbilling.
about how you define auton- In the near term, self- The improper activity
omous and self-driving. driving cars will resemble came from a lack of capacity
I always remind people Teslas, with their traffic- and a lack of time, said
weve had driverless vehicles aware cruise control that Toshihiro Yamamoto, a vice
carrying people between ter- can maintain a safe following president who manages digi-
minals at an airport for 40 distance, change lanes and tal-media operations. He said
years, says Steven Shla- stop in an emergency. Then he didnt think employees in-
dover, manager of the Part- were likely to see vehicles tended to cheat clients.
ners for Advanced Transpor- that dont require drivers but Dentsu dominates the Japa-
tation Technology program at can only operate on a fixed, nese advertising business, ac-
the University of California, well-mapped route in cities counting for 25% of the total

Berkeley. But theyre operat- with fair weather, such as ad market in 2015. In recent
ing in a very well protected from the airport to the Las years, it has expanded abroad,
right of way. Vegas Strip. acquiring U.K. media-buying
Ford, for example, has said But the consensus of those firm Aegis Group PLC for
it would release a self-driving I interviewed is that it will be around $5 billion in 2012;
car by 2021. Dig into the many years before we get sales outside Japan now ac- The company has so far uncovered 633 cases of potential overcharging valued at $2.3 million.
statements and press for de- cars that can truly go any- count for more than half its
tails, and a Ford spokesman where. total. fied by Dentsu of irregulari- force in television advertising broadcasts, finances movies
says that car will only be self- Not everyone agrees, of The company said it was ties in some digital media in Japan, but it has a smaller and developed a robot in col-
driving in the portion of ma- course. Amnon Shashua, co- still investigating the scale of transactions, the auto maker foothold online. laboration with Toyota that
jor cities where the company founder and chief technology the improper billing but has so said, declining to comment Some industry participants was sent to the international
can create and regularly up- officer of Mobileye, says that far uncovered 633 cases of po- further. view the admission as pointing space station in 2013.
date extremely detailed 3-D the problem of sensing and tential overcharging valued at Dentsus announcement to wider problems in the Japa- Theyre not the 600-pound
street maps. Ford declines to controlling in self-driving a total of 230 million ($2.3 comes as the company makes nese ad business. gorilla, theyre the 1,200-
say how big those areas will cars is mostly solved. Perfect- million). In some cases, prom- a belated push into online ad- James Hollow, president of pound gorilla, Mr. Hollow
be. ing these systems wont re- ised ads never appeared on- vertising, which may have the Japan unit of digital mar- said.
Lyft is collaborating with quire scientific break- line, it said. magnified investors concern keting agency MullenLowe None of Dentsus clients
GM and says it will introduce throughs, he saysjust many Mr. Yamamoto said Dentsu about the news. The com- Profero, said that in Japan have stopped doing business
fully self-driving cars by small improvements in the would investigate ad sales go- panys shares fell 4.8% in To- long-term personal relation- with the company as a result
2021. But co-founder John software, gleaned from ing back to November 2012. kyo on Friday, the first day of ships are important and ad of the overbilling, said Mr. Na-
Zimmer says the vehicles will watching humans drive in the We want to proceed with the trading after the Australian agencies face less pressure kamoto, the finance chief.
be limited to a specific geo- real world. investigation as quickly as publication AdNews and the than elsewhere to make prom- He said in the U.S. or Eu-
graphic area and a top speed The ingredients exist; possible, he said. Financial Times reported ises about a campaigns im- rope, an agency that slipped
of 25 miles an hour. now it is a matter of engi- Dentsus chief financial offi- about the problems. pact. There is less focus on up could completely lose a cli-
Representatives of Volvo neering, Mr. Shashua says. cer, Shoichi Nakamoto, said it Dentsu consolidated its dig- proving return on invest- ents business, while that
and Israels Mobileye NV, Even the skeptics agree opened its investigation in Au- ital marketing businesses in ment, he said. didnt normally happen in
which makes self-driving that self-driving technology is gust after Toyota Motor Corp., April under a new subsidiary In addition, Dentsu has Japan.
technology and is collaborat- coming, will save lives and a major client, complained in called Dentsu Digital Inc. with deep ties with its clients and But I wouldnt be sur-
ing with Intel and BMW, will eventually become part of July that its internet ads the aim of capturing a greater media companies that go be- prised if a client pulls out en-
impose similar limits on their nearly all vehicles. But dont werent having the promised share of the online ad market. yond advertising sales. It owns tirely this time, Mr. Naka-
coming self-driving vehicles. expect it by 2021. impact. Toyota had been noti- The company is the dominant the rights to many sports moto said.

Rolling Stone Sells a Stake


Rolling Stone has struck a

chord with a new investor.
BandLab Technologies
Ltd., a closely held Singapore-
based social music company,
has purchased a 49% stake in
the storied music brand, in-
cluding the magazine and its
digital assets.
Terms werent disclosed.

However, the investment

doesnt include ownership in
closely held Wenner Media
LLC, Rolling Stones corporate
The move comes as many
publishers are seeking to
broaden their portfolios to be-
come less dependent on print BandLabs Meng Ru Kuok at a Singapore music store in July.
advertising revenue. Time Inc.,
the largest U.S. magazine pub- model, said Gus Wenner, who Ru Kuok, BandLabs 28-year-
lisher, has made a string of heads up digital at Wenner old chief executive and co-
deals aimed at growing its dig- Media and also oversees ad founder. Mr. Kuok is the son of
ital advertising business. sales, marketing, and digital Singapore businessman Kuok
Ad pages fell 14% at Rolling editorial across the company. Khoon Hong.
Stone between January and We have the quality that Our strength is local
August compared with a year most matters, a brand that knowledge, Meng Ru Kuok
earlier, according to a spokes- means something to people said.
woman for Rolling Stone. and elicits an emotional re- Mr. Kuok said he views the
BandLabs investment pro- sponse, he said. Mr. Wenner, partnership as a venture that
vides Rolling Stone with the 26 years old, is the son of Jann will extend for many years.
opportunity to expand into the Wenner, Rolling Stones co- We arent coming in as a tra-
live-event, hospitality and founder, editor and publisher. ditional investor with a short-
merchandising businesses in Plans call for Rolling Stone term plan, he said.
Asiaareas where BandLab and BandLab to form a Singa- Rolling Stones website in
has experience. Its flagship pore subsidiary called Rolling August attracted 17.7 million
product is a digital platform Stone International. The busi- unique U.S. visitors, up 59%
for creating and sharing music. ness, which will include Roll- over a two-year period, ac-
Everyone is trying to fig- ing Stones 12 international li- cording to media-measure-
ure out the new business censees, will be led by Meng ment firm comScore Inc.

process of privatizating state- counts, which Yahoo disclosed

Business owned assets as it faces mount-
ing public debt.
Thursday. In that disclosure, Ya-
hoo said the information was
Watch Mr. Chi said SCIC now holds a
44.7% stake at Vinamilk, which
stolen from its network in late
2014 by a state-sponsored ac-
is formally known as Vietnam tor. The person familiar with
Dairy Products JSC. the matter said the intrusion
Vu Trong Khanh was discovered several weeks
after the attack.
VINAMILK YAHOO A Yahoo spokesman pointed
out law enforcement was cur-
Government to Sell Hack Tied to Russia rently investigating the theft of
Shares in Dairy Firm Detected in 2014 data it had disclosed Thursday.
The Vietnamese government Yahoo Inc. executives de- A spokesman at the Russian
will sell a 9% stake in the coun- tected hackers in their systems Embassy in Washington didnt re-
trys largest dairy company, in fall 2014 who they believed spond to a request for comment.
Vinamilk, this year, in a deal were linked to Russia and were At the time of the 2014 attack,
that could be valued at at least seeking data on 30 to 40 spe- Yahoo executives concluded that it
$810 million. cific users of the companys on- was linked to Russia because it
We will hire advisers this line services, said a person famil- was launched from computers in
month for the stake sale, iar with the matter. Russia, the person familiar with
Nguyen Duc Chi, chairman of The person familiar with the the matter said. In addition, the
state-run State Capital Invest- matter didnt know whether that person said, the targets were peo-
ment Corp., said late Friday. attack led to the theft of infor- ple who did business in Russia.
Vietnam is accelerating its mation on 500 million user ac- Robert McMillan
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B4 | Monday, September 26, 2016 THE WALL STREET JOURNAL.


It All Began With an iPhone Flashlight...

A low-cost device could make light leaking, and developing
ways to block it, he says.
surgery more available to With those obstacles over-
come, Dr. Langell used the
people in poor countries Xenoscope last summer to per-
form minimally invasive sur-
gery on a pig. All went well un-
That will allow doctors to per- til he used an electrical
form minimally invasive sur- cauterizing device to finish the
gery virtually anywhereeven operation, and the electromag-
TWO-THIRDS OF the worlds without a hospital or reliable netic interference ruined the
populationsome five billion electricity. video image. That sent the
peoplelack access to safe, af- Xenocor Inc., the company team back to the drawing board
fordable surgical care. the team founded, expects to to find substitute materials for
An $85 device conceived in sell the devices for $300 to the tube and ways to shield the
a sock drawer could help $500, with no need for a capital sensor and data cables.
change that. investment or service contract. By late fall, the team re-
John Langell, a surgeon who Its so inexpensive, if you tested the Xenoscope inside
runs the University of Utahs break it, you just throw it turkey carcasses left over from
Center for Medical Innovation, away, Dr. Langell says. Thanksgiving. Dr. Langell says
had the idea when he was The Xenoscope is part of a he was blown away by the
called in for an emergency late new wave of ultra-low-cost image qualityits as good as
one night and used his iPhone medical devices being designed, any laparoscope Ive used.

flashlight to look for clothes mostly by graduate students, to In May, surgeons in India
without waking his wife. I work in parts of the world performed a first human test of
thought, Wow, this is as bright where money is scarce, elec- the Xenoscope in an operation
as a laparoscope, he recalls. tricity unstable and clean water Surgeon John Langell (left) and Spencer Madsen (center) operate on a pig using the Xenoscope, removing fallopian tubes. Drs.
Dr. Langell passed the isnt assured. Universities are a laparoscope that relays images to a high-definition video screen or to a laptop or smartphone. Langell and Price observed the
thought on to students in his enlisting engineers, scientists, procedure and visited the pa-
bio-innovation class who were designers and business stu- conditions in developed coun- the-shelf solutions sourced tient at her home the next day.
looking for a project: Why not dents to identify health-care- tries, largely because it gives Critical Shortage overseas didn't handle well. She was up, mobile and had
build a low-cost laparoscope delivery problems and to devise patients faster recoveries, Easily treatable conditions often Typically, a smartphone zero pain, says Dr. Langell.
using cellphone parts and low-cost, practical solutions, fewer hospital stays, less pain turn deadly in the developing sensor is capturing images of
bring minimally invasive sur- many of which address a criti- and a lower risk of infection world due to huge gaps in the a person or a mountainnot Hurdles ahead
gery to regions of the world cal need for surgical services. than open surgery. Those same availability of surgical care something five centimeters There are still hurdles
that cant afford it? advantages are even more criti- away, says Lane Brooks, a pi- ahead. The team has asked the
A laparoscope is a thin tube A greater need cal in poor countries, where 5 billion oneer in digital-camera design U.S. Food and Drug Adminis-
with a tiny camera on the end Lack of basic surgical care in hospital beds are scarce and People who lack access and miniaturization who was tration and the European
that allows doctors to perform many middle- and lower-in- family breadwinners cant take to safe, affordable surgery recruited to the team. Union to designate the Xeno-
surgery inside a patients belly come countries is responsible weeks off from work while Mr. Brooks concluded that scope as substantially equiva-
by means of a few small holes
rather than a large incision.
for more than 18 million deaths
a year from burst appendixes,
large incisions heal.
Yet only 18% of the worlds
18.6 million rather than use a camera from
an off-the-shelf smartphone
lent to existing technology,
which means it could forego
Annual fatalities attributed
Surgeons can see a magnified diseased gallbladders, tumors, population has access to lap- to surgical shortages system, the team needed to lengthy clinical trials. Also, Dr.
image of the abdominal cavity traumas and other treatable aroscopic surgery, the Lancet create its own custom optics Langell wants to wait until the
and watch what they are doing conditions, according to esti- Commission reports. and image processor. But the FDA and EU regulators are
on an external video screen. mates from the Lancet Com- In Mongolia, where no- 33 million team was able to buy other key satisfied before the company
Such tools typically cost mission on Global Surgery, a madic herders have a high rate People who face nancial parts, including the image sen- rolls out the Xenoscope more
more than $20,000. And addi- multinational effort to address of gallbladder disease, health ruin each year due to sor and LED light, very inex- broadly.
tional equipment requires a the issue. The World Health Or- officials have clamored for surgical costs pensively because the huge de- Xenocor needs to raise $5
capital investment of as much ganization and World Bank what some patients call the mand for cellphones has made million in Series A funding to
as $700,000. Most systems are identify improving surgical ca- surgery with the little holes, 143 million them cheap commodities. gear up manufacturing. It
sold with an annual service pabilities as an essential step to says Ray Price, co-chair of Additional surgical One early engineering prob- hopes to form partnerships
contract that adds thousands raising health and economic global surgery for the Society procedures needed annually lem was a one- to two-second with companies in developing
of dollars more. standards around the world. of American Gastrointestinal buffering delay in seeing the countries that can assemble
The alternative that Dr. Lan- Youre going to see a lot and Endoscopic Surgeons, or image on the screena poten- and distribute the Xenoscope
gells team devisedthe Xeno- more companies tailoring Sages. Dr. Price, who has
$12.3 trillion tially dangerous time lag dur- locally. It also hopes to market
Estimated GDP losses by 2030
scopecosts about $85 to pro- products for low-income mar- taught laparoscopic surgery in ing surgery. Mr. Brooks de- the tool in the U.S. as a single-
if shortage isnt addressed
duce. Theres no need for a kets, says John G. Meara, co- Mongolia since 2005, plans to signed a custom image- use device, eliminating the
large image-processing tower chair of the Lancet Commis- demonstrate the Xenoscope Source: Lancet Commission
processing pipeline that threat of infection posed by
or video screen. Surgeons can sion and director of the there for gallbladder removal on Global Surgery, 2015 eliminated the need for buffer- laparoscopes.
watch the video feed on an or- program in Global Surgery and this week. THE WALL STREET JOURNAL. ing. Another issue: Light from
dinary laptopeven a smart- Social Change at Harvard As simple as Dr. Langells the LED leaked into the lens, Ms. Beck is a Wall Street
phonewhich can also provide Medical School. idea sounded, getting an inex- dark, wet confines of the ab- bleaching out the image. Journal senior editor in New
all the power the laparoscope Minimally invasive surgery pensive cellphone camera to dominal cavity posed a number We became like plumbers York. She can be reached at
needs for up to eight hours. has become standard for many take high-quality images in the of technical challenges that off- finding each source of the melinda.beck@wsj.com.


From business and global markets to foreign relations, international trade and
morewe continue to bring you the trusted insights and in-depth analysis you
need to understand the 2016 U.S. presidential election and its global impact.

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THE WALL STREET JOURNAL. Monday, September 26, 2016 | B5


Teapots Take Bigger Role in Oil
Demand from Chinas gin importing foreign crude
for the first time.
small refineries is That effectively broke a mo-
helping to reshape nopoly by state-run oil giants
over Chinas imports. Since
global markets then, many have scoured over-
supplied markets for deals, at
When oil ministers from the times shunning OPEC power-

Organization of the Petroleum houses in the Middle East for

Exporting Countries gathered Russian and other suppliers.
at the start of the oil-price For others, its an opportu-
crash two years ago to take nity; for OPEC its a chal-
Goldman CFO Harvey Schwartz stock of an industry in crisis, lenge, said Michal Meidan, a
they banked on demand from China analyst at consultancy

Fed Lays Chinese state oil companies

and Beijings efforts to fill the
countrys strategic reserves to
Energy Aspects. They are cre-
ating an opening for other
suppliers, other traders, and

Out Rules boost prices.

By Brian Spegele
OPEC has to rise up to that
At a recent oil conference

On Banks in Beijing and

Jenny W. Hsu
in Singapore, energy execu-

tives from the Persian Gulf to
and Dan Strumpf the U.S. packed a hotel ball-

Trading in Hong Kong

Today, OPEC is increasingly

room to hear from Zhang Li-
ucheng, vice president for
trading and marketing at
BY DONNA BORAK counting on a new and far less Dongming Petrochemical
AND LIZ HOFFMAN predictable force to increase Shandong Chambroad Petrochemicals is one of Chinas teapot refineries driving import demand. Group, Chinas biggest teapot
exports: private oil refiners in refiner by capacity.
WASHINGTONThe Federal China, known as teapots, than 60% this year, leading to Independent refiners are
Reserve proposed rules Fri- whose demand for foreign a weekslong queue of tankers Gulf Struggles still much smaller than the
day that could drive banks out crude is helping to reshape at Shandongs port of Qingdao Russia is rivaling Saudi Arabia in selling oil to Chinese reners. state-owned enterprises but
of the business of owning, global oil markets. this spring. we are flexible and we can
trading and moving commodi- As the oil bust shows little All the teapot refineries, Change from easily adjust to changes, Mr.
tiessuch as oil and alumi- sign of reversing, independent no matter how big they are Top crude-oil exporters to China, Jan.-Aug. previous year Zhang said.
numby making those lines refiners in China have right now, started with a hum- 2015 Chinas independent refin-
too expensive. emerged as perhaps the most ble beginning, said Mr. Luo. Saudi Arabia 1% ers have been big buyers of
The long-awaited proposal, important, and little-known, Winning these refiners over Russias oil. The latest cus-
designed to force banks to do force in oil markets today. as new customers and secur- Russia 30 toms data show Chinese im-
more to protect themselves They accounted for the vast ing market share in China has ports of Russian crude in Au-
against environmental disas- majority of the 13.5% surge in become an imperative for Angola 15 gust soared 50% year over
ters that might cause huge lia- imports this year by China, OPEC members, who gather in year to more than 1.1 million
bilities, would require banks to which rivals the U.S. as the Algeria this week for a closely barrels a day, topping the Sau-
Oman 13
hold billions of dollars of extra worlds largest crude importer. watched meeting that may dis that month as Chinas big-
capital in their physical com- A few years ago, private re- yield clues on the cartels fu- gest supplier.
modities businesses. The move finers were merely bit players ture output. Iraq 4.5 The surge is partly attribut-
also follows congressional in- in the state-dominated indus- The 14-nation organization able to less stringent terms
vestigations probing whether try. Their origins were so that controls a third of the 0 50 100 150 200 250 imposed by the Russians, who
big banks were using their humble that more than 20 worlds oil once helped set Million barrels allow refiners to make pay-
commodities units to wield years ago many relied on busi- crude prices globally by regu- Source: China General Administration of Customs THE WALL STREET JOURNAL. ments within four months of
outsize power over certain ness models in which workers lating its production levels. delivery, said Nelson Wang, an
markets and inflate prices. lined country roads in coastal But an American oil boom In the first eight months this Corp., or Sinopec. Saudi Ara- analyst at brokerage CLSA, in-
The proposed rules are Shandong province, south of made OPECs output less cru- year, Chinas imports of Ango- bia tested the teapot market in stead of the typical one to two
likely to hit hardest at Gold- Beijing, hawking gasoline di- cial. It also reduced the U.S.s lan crude rose 14.6% to more April, selling one spot cargo to months required by Middle
man Sachs Group Inc., which rectly from jerrycans, says Luo oil imports, setting off a battle than 900,000 barrels a day, or Shandong Chambroad Petro- East suppliers.
has held tighter to commodi- Wenbo, general manager of for market share elsewhere in around half of the West Afri- chemical, but hasnt repeated Middle East suppliers such
ties than have many rivals. Sunshine Oil, the Singapore the worldwith China taking can nations total production. the experiment. as Saudi Arabia and Iran are
While the firm has sold some trading arm of Shandong center stage. By comparison, Chinas im- The changes confronting far more expensive and inflex-
businesses, including a trou- Chambroad Petrochemical. Within OPEC, there is com- ports from Saudi Arabia have OPEC and the industry show ible on pricing, said Mr.
bled Colombian mine and a se- Now, the streets of Shan- petition to tap teapots de- risen 1% this year, to about how policy moves by Chinas Zhang. What the teapots care
ries of metals warehouses, it dong are lined with gas sta- mand. In particular, Angola 1.05 million barrels a day. government ripple globally. about most is still prices, he
has forged ahead into others, tions owned by teapots has benefited from offering Saudi Arabia has long pre- The new demand by Chinas said.
becoming a big player in natu- Chambroad alone owns around Chinese teapots crude grades ferred to deal with Chinas private refiners stems from a
ral-gas marketing. 200and crude-oil imports to with lower sulfur content, state-run oil refiners such as change in government policy  Heard: Assessing Chinas
Weve been in the com- the province have soared more which can be easier to refine. China Petroleum & Chemical last year, allowing them to be- supply trajectory...................... B8
modity business forever,
Goldman Chief Financial Offi-
cer Harvey Schwartz said last
He said the collapse of en-
ergy prices made the banks
Goldman to Lay Off
role as a market maker more
important. It really reinforces
the need for firms such as
Bankers in Region
Goldman Sachs to be in a posi-
tion to provide our clients with BY LIZ HOFFMAN year that effectively killed
liquidity, with financing capac- what had been a lucrative
ity, he said. Goldman Sachs Group Inc. business for Goldman and oth-
A bank spokesman declined plans to lay off more than one- ers in underwriting initial
to comment Friday on the quarter of its investment public offerings.
Feds proposal. bankers in Asia amid a slow- Regional IPO volume, ex-
down in deal activity in the re- cluding Japan, is down 16%
gion, according to people fa- this year from last year, ac-
Weve been in the miliar with the matter. cording to Dealogic.
commodity business The layoffs will be concen- Mergers are down 23% by
trated in Hong Kong and Sing- dollar value from 2015, and

forever. apore and wont affect the high-yield and investment-

HARVEY SCHWARTZ banks operations in Japan, grade debt offers have both
the people said. fallen by double digits, accord-
It is a notable retreat for ing to Dealogic.
The Fed said the proposal is Goldman, which has made a A Goldman spokesman de-
driven by its fear that an oil big push in Asia in recent de- clined to comment on the lay-
spill, mine explosion or power- cades. Former Chief Executive off plans, which were earlier
plant meltdown at a bank- Henry Paulson, who later be- reported by Reuters. More money is being spent on information technology and private wealth management.
owned facility could trigger a came U.S. Treasury secretary, Goldman and other banks

Wall Street Pay Is Shifting

ripple effect of fines, cleanup courted Chinese leaders and have been reducing head count
costs, and loss of investor con- helped open doors for Gold- as they look to rein in costs
fidence that could take down a mans bankers, who spent and convince investors they
financial institution. years cultivating ties with the can be disciplined. Earlier this
Regulators have cited disas- regions ascending private sec- year, Goldman quietly moved BY LIZ HOFFMAN quarters. Technology offers High-yield debt offerings also
ters such as the 2010 Deepwa- tor. to shed about 2,000 jobs, two great promises for finan- are down, and there is less
ter Horizon oil spill in the Gulf But the region remains far about 6% of its workforce, For decades, the battle for cial services: lower costs and merger activity compared with
of Mexico, the 2011 Fukushima less profitable for the bank which it says would save $700 pay and prestige on Wall new or better sources of reve- 2015s record.
Daiichi nuclear-plant melt- than the U.S. and Europe. million a year. Street was fought between in- nue, said Mike Karp, Options Pay is expected to fall dou-
down in Japan, and the fatal Chinas economy has slowed The Asia layoffs are sepa- vestment bankers and traders. Groups CEO. ble-digit percentages in each of
2010 Pacific Gas & Electric Co. and its stock market has been rate from that effort, the peo- As their profits ebbed and Specifically, banks are investment bankings pillars:
natural-gas pipeline explosion volatile, with wild swings last ple said. flowed, the pendulum swung boosting technology spending 10% in merger advisory, 15% in
in San Bruno, Calif., as exam- between them. for a variety of reasons, in- equity underwriting and 12% in
ples of risks that could poten- But both are poised in 2016 cluding becoming more effi- debt underwriting.
tially destabilize the financial
These damages can exceed
Commerzbank Looks to be losers to colleagues in
other rising businesses, includ-
ing technology, wealth man-
cient, improving risk manage-
ment, guarding against new
security threats, keeping up
Theres really nowhere to
hide, said Alan Johnson,
whose firm counsels banks on
the market value of the physi-
cal commodity involved in the
catastrophic events, and can
At Cutting 5,000 Jobs agement and asset manage-
ment, reflecting a shift in
priorities on Wall Street.
with client demands and find-
ing edges in trading.
Trading revenue has tum-
compensation plans. The cost
structure in these traditional
finance businesses is out of
exceed the committed capital BY MADELEINE NISSEN Mr. Zielke, who succeeded Options Group, a financial- bled over the past decade. whack and has been for years.
and insurance policies of the AND EYK HENNING Martin Blessing this year, plans services recruiting and re- Banks can no longer trade for Frustrated with falling com-
organization, according to the mainly to cut back-office staff, search firm, predicts a 12% de- their own account, a source of pensation and heavier compli-
Feds draft plan. FRANKFURTCommerz- one of these people said. cline in overall pay, which past profits, and lower volatil- ance, many trading and bank-
As part of its proposal, the bank AGs management is con- Commerzbanks unit that ca- includes bonuses, for invest- ity has damped clients desire ing employees at big firms are
Fed would impose an unusu- sidering cutting at least 5,000 ters to midsize clients, one of ment bankers this year and to trade. The remaining activ- seeking work elsewhere.
ally steep 1,250% capital jobs, or more than 10% of the its four core operations, would single-digit-percentage de- ity has mostly moved to elec- Meanwhile, banks are racing
charge on Goldman and Mor- banks workforce, and eliminat- be dissolved under the new clines for traders, with the big- tronic platforms, which require to hire technology specialists,
gan Stanley, which had been ing one of its units as part of a strategy, according to two peo- gest drops felt in relatively fewer people. driving up salaries. Technolo-
given extra flexibility by Con- broader overhaul to address ple familiar with the matter. plain-vanilla stock trading. In stock trading, part of gists numbers have swelled
gress to trade in these areas. weak profitability amid low in- One of these people said Revenue from these traditional banks equities divisions, pay across Wall Streetthey ac-
That depresses returns in terest rates and sluggish client smaller clients, those with an- Wall Street functions has fallen could drop 15% in the U.S. Op- count for more than a quarter
those businesses. activity, people familiar with nual revenue of up to 5 mil- as trading has slowed and eco- tions Group found there has of Goldman Sachs Group Inc.s
The proposal also calls for the matter said. lion ($5.6 million), will be nomic growth remains muted. been little hiring among cash 32,000 employeesand they
imposing a strict, but less Germanys second-largest transferred to its retail-banking Meanwhile, employees in in- equities traders and fewer pro- no longer are relegated to sup-
onerous, capital charge of lender by market capitaliza- unit. Larger clients will be formation-technology and pri- motions to managing director. port roles. They fill front-office
300% on a dozen firms, includ- tion is still fine-tuning the job- shifted into Commerzbanks in- vate wealth management are Investment bankers, who positions in trading, risk man-
ing Bank of America Corp., J.P. cut plans, set to be announced vestment-banking activities, expected to get a 5% bump in arrange mergers and raise cap- agement and cybersecurity.
Morgan Chase & Co. and Wells at the end of this week when this person said. pay, according to the report, ital, arent doing much better. Goldman recently hired an
Fargo & Co., which are permit- Chief Executive Martin Zielke The cuts are similar to those which estimates full-year com- IPOs, one of the most lucrative executive from Google to work
ted by the Fed to engage in intends to announce a new at many other European banks, pensation based on bank earn- assignments in finance, have on security for its new con-
physical commodity trading. strategy, these people said. which have been retrenching. ings through the first two slowed to a trickle this year. sumer-banking effort.
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B6 | Monday, September 26, 2016 THE WALL STREET JOURNAL.

MARKETS DIGEST Data as of Friday, September 23, 2016

Nikkei 225 Index STOXX 600 Index S&P 500 Index 4 p.m. New York time
Last Year ago
16754.02 t 53.60, or 0.32% Year-to-date t 11.98% 345.34 t 2.52, or 0.72% Year-to-date t 5.60% 2164.69 t 12.49, or 0.57% Trailing P/E ratio * 24.81 20.59
High, low, open and close for each 52-wk high/low20012.40 14952.02 High, low, open and close for each 52-wk high/low 385.43 303.58 High, low, open and close for each P/E estimate * 18.43 16.45
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 2.13 2.22
All-time high: 2190.15, 08/15/16

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

17500 360 2200

65-day moving average 17000 350 2160

16500 340 2120

16000 330 2080

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

Session open Close

Close Open

15000 310 2000

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

International Stock Indexes Data as of 4 p.m. New York time Global government bonds
Latest 52-Week Range YTD Latest, month-ago and year-ago yields and spreads over or under U.S. Treasurys on benchmark two-year
Region/Country Index Close NetChg % chg Low Close High % chg and 10-year government bonds around the world. Data as of 3 p.m. ET
World The Global Dow 2465.59 14.49 0.58 2047.44 2489.83 5.5 Country/ Spread Over Treasurys, in basis points Yield
MSCI EAFE 1716.74 11.34 0.66 1491.52 1779.25 0.03 Coupon Maturity, in years Yield Latest Previous Month Ago Year ago Previous Month ago Year ago
MSCI EM USD 917.50 3.42 0.37 688.52 927.29 15.5 3.250 Australia 2 1.616 85.8 82.5 68.0 120.2 1.599 1.422 1.905
4.250 10 2.006 39.2 41.9 31.0 52.1 2.040 1.858 2.675
Americas DJ Americas 523.03 3.37 0.64 433.35 529.33 7.3
1.250 Belgium 2 -137.0 -139.3 -130.1 -88.5 -0.618 -0.560 -0.182
Brazil Sao Paulo Bovespa 58697.00 297.17 0.50 37497.48 60231.65 35.4
1.000 10 0.147 -146.7 -149.1 -142.1 -124.3 0.131 0.127 0.911
Canada S&P/TSX Comp 14697.93 99.25 0.67 11843.11 14813.02 13.0
1.000 France 2 -0.606 -136.4 -138.8 -130.9 -88.1 -0.614 -0.568 -0.177
Mexico IPC All-Share 47778.48 196.57 0.41 40265.37 48694.90 11.2
0.250 10 0.217 -139.7 -141.5 -141.0 -125.5 0.207 0.139 0.899
Chile Santiago IPSA 3189.01 4.80 0.15 2759.77 3251.19 8.3
0.000 Germany 2 -0.665 -142.3 -144.1 -136.6 -95.0 -0.666 -0.624 -0.247
U.S. DJIA 18261.45 131.01 0.71 15660.18 18636.05 4.8
0.000 10 -0.080 -169.4 -171.6 -164.2 -155.4 -0.094 -0.094 0.599
Nasdaq Composite 5305.75 33.78 0.63 4266.84 5339.52 6.0
0.250 Italy 2 -0.116 -87.4 -90.4 -82.5 -56.9 -0.129 -0.083 0.135
S&P 500 2164.69 12.49 0.57 1829.08 2190.15 5.9
1.600 10 1.211 -40.3 -43.0 -41.3 -41.2 1.192 1.136 1.742
CBOE Volatility 12.29 0.27 2.25 11.34 28.14 32.5
0.100 Japan 2 -0.220 -97.8 -99.5 -94.7 -68.8 -0.221 -0.205 0.016
EMEA Stoxx Europe 600 345.34 2.52 0.72 303.58 385.43 5.6 0.100 10 -0.049 -166.3 -164.5 -163.9 -182.0 -0.023 -0.091 0.334
Stoxx Europe 50 2869.70 21.85 0.76 2566.26 3293.71 7.4 4.000 Netherlands 2 -0.633 -139.1 -141.2 -133.0 -93.4 -0.638 -0.588 -0.231
France CAC 40 4488.69 21.13 0.47 3896.71 4984.15 3.2 0.500 10 0.036 -157.9 -159.9 -152.2 -137.4 0.023 0.026 0.779
Germany DAX 10626.97 47.21 0.44 8752.87 11382.23 1.1 4.450 Portugal 2 0.439 -32.0 -31.0 -26.7 -31.1 0.465 0.475 0.392
Israel Tel Aviv 1461.56 Closed 1382.34 1583.00 4.4 2.875 10 3.369 175.4 173.1 145.7 43.5 3.353 3.005 2.589
Italy FTSE MIB 16452.84 184.85 1.11 15103.58 22736.86 23.2 0.250 Spain 2 -0.199 -95.7 -99.1 -93.8 -54.9 -0.217 -0.196 0.154
Netherlands AEX 454.48 1.03 0.23 382.61 472.24 2.9 1.950 10 0.967 -64.7 -70.4 -59.8 -19.1 0.918 0.950 1.962
Russia RTS Index 993.94 8.19 0.82 628.41 1013.11 31.3 4.250 Sweden 2 -0.654 -141.2 -143.0 -138.6 -118.9 -0.656 -0.645 -0.485
Spain IBEX 35 8823.60 111.30 1.25 7645.50 10478.30 7.6 1.000 10 0.207 -140.8 -139.7 -145.6 -144.6 0.225 0.092 0.708
Switzerland Swiss Market 8272.89 34.74 0.42 7496.62 9016.56 6.2 1.250 U.K. 2 0.102 -65.7 -69.5 -61.2 -11.4 0.079 0.130 0.589
South Africa Johannesburg All Share 51999.45 104.27 0.20 46282.02 54609.01 2.6 2.000 10 0.631 -98.3 -101.4 -100.2 -46.5 0.608 0.546 1.689
Turkey BIST 100 79756.44 39.50 0.05 68567.89 86343.65 11.2 0.750 U.S. 2 0.758 ... ... ... ... 0.774 0.742 0.703
U.K. FTSE 100 6909.43 1.97 0.03 5536.97 6941.19 10.7 1.500 10 1.614 ... ... ... ... 1.622 1.548 2.153
Asia-Pacific DJ Asia-Pacific TSM 1496.11 2.09 0.14 1190.45 1498.20 7.7
Australia S&P/ASX 200 5431.30 56.80 1.06 4765.30 5587.40 2.6 Commodities Prices of futures contracts with the most open interest 4 p.m. New York time
China Shanghai Composite 3033.90 8.42 0.28 2655.66 3651.77 14.3 EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; ICE-US: ICE Futures U.S.; MDEX: Bursa Malaysia
Hong Kong Hang Seng 23686.48 73.32 0.31 18319.58 24099.70 8.1 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 9/22/2016
India S&P BSE Sensex 28668.22 104.91 0.36 22951.83 29045.28 9.8 One-Day Change Year Year
Indonesia Jakarta Composite 5388.91 8.65 0.16 4120.50 5461.45 17.3 Commodity Exchange Last price Net Percentage high low
335.25 -1.50 -0.45% 449.00 314.75
Japan Nikkei Stock Avg 16754.02 53.60 0.32 14952.02 20012.40 12.0 Corn (cents/bu.) CBOT
Soybeans (cents/bu.) 953.25 -23.25 -2.38 1,186.25 868.00
Malaysia Kuala Lumpur Composite 1670.99 1.33 0.08 1600.92 1727.99 1.3
Wheat (cents/bu.)
CBOT 403.75 -1.75 -0.43 551.50 386.75
New Zealand S&P/NZX 50 7296.74 14.97 0.20 5585.43 7571.11 15.4
Live cattle (cents/lb.) CME 106.875 -0.075 -0.07 125.500 101.275
Pakistan KSE 100 39781.95 353.36 0.88 30564.50 40414.72 21.2
Cocoa ($/ton) ICE-US 2,858 -62 -2.12 3,216 2,728
Philippines PSEi 7723.60 38.75 0.50 6084.28 8102.30 11.1
Coffee (cents/lb.) ICE-US 151.75 -3.50 -2.25 160.90 119.40
Singapore Straits Times 2856.95 10.89 0.38 2532.70 3083.07 0.9
Sugar (cents/lb.) ICE-US 22.74 0.07 0.31% 23.88 13.48
South Korea Kospi 2054.07 4.37 0.21 1835.28 2066.53 4.7
Cotton (cents/lb.) ICE-US 69.98 -1.73 -2.41 77.98 54.19
Taiwan Weighted 9284.62 49.36 0.53 7664.01 9284.62 11.4 Robusta coffee ($/ton) ICE-EU 1967.00 -35.00 -1.75 2,028.00 1,423.00
Thailand SET 1492.88 13.11 0.87 1224.83 1552.64 15.9
Copper ($/lb.) COMEX 2.2025 0.0080 0.36 2.3290 1.9710
Source: SIX Financial Information;WSJ Market Data Group Gold ($/troy oz.) COMEX 1341.90 -2.80 -0.21 1,384.40 1,066.00
Silver ($/troy oz.) COMEX 19.750 -0.349 -1.74 21.250 13.865
Currencies London close on Sept. 23 Aluminum ($/mt)* LME 1,620.50 42.50 2.69 1,700.50 1,451.50
Tin ($/mt)* LME 19,500.00 90.00 0.46 19,625.00 13,225.00
Yen, euro vs. dollar; dollar vs. major U.S. trading partners US$vs,
Fri YTDchg Copper ($/mt)* LME 4,832.50 73.50 1.54 5,070.50 4,320.50
Country/currency in US$ per US$ (%) Lead ($/mt)* LME 1,961.00 -7.00 -0.36 1,968.00 1,598.00
Europe Zinc ($/mt)* LME 2,304.50 11.50 0.50 2,364.00 1,467.00
Bulgaria lev 0.5736 1.7434 3.2 Nickel ($/mt)* LME 10,600.00 220.00 2.12 10,950.00 7,750.00
Croatia kuna 0.1497 6.680 4.7 Rubber (Y.01/ton) TCE 169.50 0.50 0.30 170.30 149.50
s Yen Euro zone euro 1.1231 0.8904 3.3
0 Palm oil (MYR/mt) MDEX 2675.00 -50.00 -1.83 2,729.00 2,180.00
Czech Rep. koruna-b 0.0416 24.062 3.3
s Euro Denmark krone 0.1506 6.6385 3.4 Crude oil ($/bbl.) NYMEX 44.81 -1.51 -3.26 53.39 34.10
10 s WSJ Dollar index
0.003673 272.24 6.3
Hungary forint NY Harbor ULSD ($/gal.) NYMEX 1.4235 -0.0430 -2.93 1.6112 1.0272
Iceland krona 0.008730 114.55 12.0 RBOB gasoline ($/gal.) NYMEX 1.3561 -0.0226 -1.64 1.4812 0.9764
20 Norway krone 0.1233 8.1081 8.3
0.2612 3.8291 2.4
Natural gas ($/mmBtu) NYMEX 3.029 -0.032 -1.05 3.1660 2.1680
2015 2016 Poland zloty
Russia ruble-d 0.01564 63.924 11.1 Brent crude ($/bbl.) ICE-EU 46.74 -1.47 -3.05 54.12 33.05
US$vs, US$vs,
YTDchg YTDchg Sweden krona 0.1171 8.5370 1.1 Gas oil ($/ton) ICE-EU 418.25 -12.50 -2.90 481.75 307.00
Fri Fri
Country/currency in US$ per US$ (%) Country/currency in US$ per US$ (%) Switzerland franc 1.0310 0.9699 3.2
Turkey lira 0.3388 2.9512 1.1 Sources: SIX Financial Information; WSJ Market Data Group
Americas Hong Kong dollar 0.1289 7.7566 0.1
Ukraine hryvnia 0.0385 25.9905 8.3
Argentina peso-a 0.0660 15.1570 17.1
India rupee
Indonesia rupiah
66.6654 0.7
13075 5.5
U.K. pound 1.2966 0.7712 13.7 Cross rates London close on Sep 23
Brazil real 0.3099 3.2268 18.5 Middle East/Africa
Japan yen 0.009902 100.99 16.1
Canada dollar 0.7601 1.3157 4.9 USD GBP CHF JPY HKD EUR CDN AUD
Kazakhstan tenge 0.002958 338.04 0.2 Bahrain dinar 2.6532 0.3769 0.05
Chile peso 0.001512 661.20 6.7 Australia 1.3122 1.7011 1.3526 0.0130 0.1691 1.4734 0.9974 ...
Macau pataca 0.1251 7.9914 0.2 Egypt pound-a 0.1126 8.8808 13.4
Colombia peso 0.0003468 2883.50 9.2 Canada 1.3157 1.7058 1.3561 0.0130 0.1696 1.4774 ... 1.0026
Malaysia ringgit-c 0.2432 4.1123 4.4 Israel shekel 0.2660 3.7594 3.4
Ecuador US dollar-f 1 1 unch
New Zealand dollar 0.7239 1.3814 5.6 Kuwait dinar 3.3177 0.3014 0.7 Euro 0.8904 1.1547 0.9179 0.0088 0.1148 ... 0.6769 0.6787
Mexico peso-a 0.0507 19.7289 14.7
Pakistan rupee 0.0095 104.800 0.1 Oman sul rial 2.5970 0.3851 0.03 Hong Kong 7.7566 10.0565 7.9974 0.0768 ... 8.7103 5.8956 5.9113
Peru sol 0.2999 3.3350 2.3
Philippines peso 0.0208 48.116 2.7 Qatar rial 0.2746 3.641 0.04 Japan 100.9850 130.9200 104.1000 ... 13.0190 113.4000 76.7600 76.9600
Uruguay peso-e 0.0350 28.540 4.6
Singapore dollar 0.7361 1.3586 4.2 Saudi Arabia riyal 0.2666 3.7510 0.1 0.9699 1.2577 ... 0.0096 0.1250 1.0895 0.7374 0.7393
Venezuela bolivar 0.100150 9.99 58.4 Switzerland
South Korea won 0.0009064 1103.21 6.2 South Africa rand 0.0731 13.6771 11.6
U.K. 0.7712 ... 0.7951 0.0076 0.0994 0.8663 0.5863 0.5878
Asia-Pacific Sri Lanka rupee 0.0068325 146.36 1.5 Close Net Chg % Chg YTD % Chg
0.7621 1.3122 4.4 Taiwan dollar 0.03191 31.341 4.8 U.S. ... 1.2966 1.0310 0.0099 0.1289 1.1231 0.7601 0.7621
Australia dollar WSJ Dollar Index 86.46 0.20 0.23 4.12
China yuan 0.1499 6.6693 2.7 Thailand baht 0.02888 34.630 3.9 Sources: Tullett Prebon, WSJ Market Data Group Source: Tullett Prebon

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

Latest 52 wks ago % YTD% % YTD% % YTD%
Libor Cur Stock Sym Last Chg Chg Cur Stock Sym Last Chg Chg Cur Stock Sym Last Chg Chg Asia Titans 50
One month 0.52222% 0.19430% TakedaPharm 4502 4805.00 0.86 -20.77 RoyDtchShell A RDSA 1865.00 0.59 22.21 Last: 145.59 t 0.50, or 0.34% YTD s 6.8%
Three month 0.85294 0.32610 Asia Titans HK$ TencentHoldings 0700 218.20 1.68 42.89 SAP SAP 81.63 -0.89 11.24
Six month 1.24472 0.53610 51.80 0.78 11.16 68.45 High
HK$ AIAGroup 1299 TokioMarineHldg 8766 4061.00 -0.17 -13.82 Sanofi SAN -0.70 -12.91
One year 1.55744 0.86085 1594.50 0.92 -7.91 62.96
AstellasPharma 4503 ToyotaMtr 7203 5950.00 -3.16 -20.54 SchneiderElectric SU -0.27 19.79 Close 140
Euro Libor AU$ AustNZBk ANZ 27.59 1.32 -1.22 AU$ Wesfarmers WES 44.04 0.11 5.84 Siemens SIE 106.20 -0.42 18.16 Low 135
One month -0.11857% t
-0.37400% AU$ BHP BHP 1.17 20.55 AU$ WestpacBanking WBC 30.32 1.27 -9.65 CHF Syngenta SYNN 428.80 0.85 9.30
Three month -0.32029 -0.04143 HK$ BankofChina 3988 3.57 -1.65 3.18 AU$ Woolworths WOW 23.35 2.64 -4.69 Telefonica TEF 9.53 -0.94 -6.90 50day 130
Six month -0.21186 0.01643 HK$ CKHutchison 0001 100.30 -0.10 -3.93 Total FP 42.53 -1.21 5.15 moving average 125
One year -0.07329 0.13071 HK$ CNOOC 0883 9.45 0.32 17.10 Stoxx 50 CHF UBSGroup UBSG 13.44 -0.30 -31.15
Euribor AU$ CSL CSL 105.66 1.63 0.33 CHF ABB ABBN 22.12 0.09 23.16 Unilever UNA 41.12 -0.77 2.54
One month -0.37000% -0.11100% Canon 7751 2921.00 -0.73 -20.52 ASMLHolding ASML 97.25 -0.06 17.81 Unilever ULVR 3631.50 0.17 24.09 24 1 8 15 22 29 5 12 19 26 2 9 16 23
Three month -0.30200 -0.04100 CentralJapanRwy 9022 17625 -0.56 -18.40 AXA CS 19.77 ... -21.64 Vinci DG 68.69 -0.16 16.15 July Aug. Sept.
Six month -0.20000 0.03000 HK$ ChinaConstructnBk 0939 5.93 -0.84 11.68 AirLiquide AI 96.40 -1.08 -6.99 VodafoneGroup VOD 220.70 -1.25 -0.14
One year -0.05900 0.14600 HK$ ChinaLifeInsurance 2628 20.95 -1.64 -16.53 Allianz ALV 136.60 ... -16.48 CHF ZurichInsurance ZURN 256.30 ... -0.81
Yen Libor HK$ ChinaMobile 0941 96.35 -0.72 10.11 Anheuser Busch ABI 116.20 ... 1.57
DJIA Stoxx 50
One month -0.07843% 0.02929% HK$ ChinaPetro&Chem 0386 5.49 0.18 17.06 AstraZeneca AZN 5170.00 0.25 11.99
Last: 2869.70 t 21.85, or 0.76% YTD t 7.4%
Three month -0.01914 0.08357 AU$ CmwlthBkAust CBA 73.40 0.71 -14.18 BASF BAS 73.31 -0.33 3.66 $ AmericanExpress AXP 63.85 -1.21 -8.20
Six month 0.00707 0.11929 EastJapanRailway 9020 9383.00 1.73 -18.05 BNP Paribas BNP 46.95 -0.73 -10.10 $ Apple AAPL 112.71 -1.67 7.08 2925
One year 0.10929 0.23757 Fanuc 6954 17170 -0.67 -18.55 BT Group BT.A 397.60 0.15 -15.71 $ Boeing BA 131.78 -0.07 -8.86
82.44 -1.27 21.31 2850
Offer Bid Hitachi 6501 483.70 -1.31 -30.05 BancoBilVizAr BBVA 5.49 -0.69 -17.78 $ Caterpillar CAT
TW$ Hon Hai Precisn 2317 79.80 0.25 97.52 BancoSantander SAN 3.96 -3.25 -13.16 $ Chevron CVX 99.22 -0.76 10.29 2775
HondaMotor 7267 3007.00 -2.37 -23.09 Barclays BARC 171.40 -1.04 -21.70 $ CiscoSystems CSCO 31.34 -1.01 15.41
One month 0.6000% 0.5000%
$ CocaCola KO 42.74 -0.51 -0.51
Three month 0.9500 0.8500 KRW HyundaiMtr 005380 142000 2.90 -4.70 Bayer BAYN 91.48 -0.80 -21.00
HK$ Ind&Comml 1398 4.88 -2.98 4.27 BP BP. 436.90 0.53 23.42
$ Disney DIS 93.27 -0.15 -11.24 2625
Six month 1.3000 1.2000
JapanTobacco 2914 4008.00 -0.99 -10.36 BritishAmTob BATS 4939.00 1.56 30.97
$ DuPont DD 66.77 -0.12 0.26 2550
One year 1.6000 1.5000
$ ExxonMobil XOM 83.45 -0.11 7.06
Latest 52 wks ago KDDI 9433 1.77 0.06 Daimler DAI 63.52 0.16 -18.12 24 1 8 15 22 29 5 12 19 26 2 9 16 23
$ GenElec GE 29.89 -0.50 -4.04
Mitsubishi 8058 2174.00 0.83 7.20 DeutscheTelekom DTE 15.28 -0.33 -7.56 July Aug. Sept.
Prime rates $ GoldmanSachs GS 165.13 -1.72 -8.38
MitsubishiElectric 6503 1317.00 1.39 2.69 Diageo DGE 2225.00 0.72 19.85
U.S. 3.50% 3.25% $ HomeDepot HD 127.79 -0.75 -3.37
MitsubishiUFJFin 8306 544.80 -1.54 -28.04 ENI ENI 12.60 -0.40 -8.70
Canada 2.70 2.70 $ Intel INTC 37.19 -0.96 7.95
Mitsui 8031 1367.50 0.66 -5.40 1653.00 0.24 20.39
Hong Kong
5.00 Mizuho Fin 8411 182.50 -1.93 -25.05

HSBC Hldgs
HSBA 574.30 -0.52
7.11 $
-0.72 12.61
-0.21 1.85
Dow Jones Industrial Average P/E: 20
NTTDoCoMo 9437 2617.00 1.32 5.35 INGGroep INGA 11.06 -0.81 9.02 $ JohnsJohns JNJ 118.81 -0.54 15.66 Last: 18261.45 t 131.01, or 0.71% YTD s 4.8%
Policy rates
ECB 0.00% 0.05%
AU$ NatAustBnk NAB 28.00 1.74 -7.28 ImperialBrands IMB 3989.50 0.87 11.24 $ McDonalds MCD 117.17 -0.16 -0.82
Britain 0.25 0.50
NipponTeleg 9432 4727.00 0.64 -2.25 IntesaSanpaolo ISP 2.00 -3.20 -35.36 $ Merck MRK 62.96 -0.10 19.20 18800
Switzerland 0.50 0.50
NissanMotor 7201 1033.50 0.98 -19.23 LVMHMoetHennessy MC 153.75 -0.29 6.11 $ Microsoft MSFT 57.43 -0.67 3.51
Panasonic 6752 1049.50 -0.24 -15.40 LloydsBankingGroup LLOY 55.98 -2.05 -23.39 $ NikeClB NKE 55.15 -0.47 -11.76 18300
Australia 1.50 2.00
HK$ PingAnInsofChina 2318 41.50 -1.54 -3.26 LOreal OR 169.00 -0.41 8.82 $ Pfizer PFE 34.26 0.32 6.13
U.S. discount 1.00 0.75 17800
Fed-funds target 0.25 0.00
$ RelianceIndsGDR RIGD 32.80 ... 7.19 NationalGrid NG. 1074.50 -0.56 14.61 $ Procter&Gamble PG 87.76 -1.38 10.52
Call money 2.25 2.00
KRW SamsungElectronics 005930 1571000 -2.90 24.68 CHF Nestle NESN 76.80 -1.66 3.02 $ 3M MMM 177.39 -1.37 17.76 17300
Seven&I Hldgs 3382 4667.00 -1.14 -15.91 CHF Novartis NOVN 79.15 -0.13 -8.81 $ TravelersCos TRV 115.31 -1.22 2.17
Overnight repurchase rates 16800
U.S. 0.51% 0.16%
SoftBankGroup 9984 6658.00 -0.06 8.45 DKK NovoNordiskB NOVO-B 296.80 -2.37 -25.78 $ UnitedTech UTX 102.56 -0.43 6.76
Euro zone n.a. n.a.
Sony 6758 3400.00 0.80 13.26 Prudential PRU 1408.00 -0.49 -8.03 $ UnitedHealthGroup UNH 140.51 -0.38 19.44 24 1 8 15 22 29 5 12 19 26 2 9 16 23
Sumitomo Mitsui 8316 3629.00 -1.63 -21.21 ReckittBenckiser RB. 7199.00 -0.21 14.62 $ VISAClA V 82.54 -0.98 6.43 July Aug. Sept.
Sources: WSJ Market Data Group, SIX HK$ SunHngKaiPrp 0016 118.60 0.25 26.51 RioTinto RIO 2519.00 1.16 27.25 $ Verizon VZ 52.56 0.40 13.72 Note: Price-to-earnings ratios are for trailing 12 months
Financial Information, Tullett TW$ TaiwanSemiMfg 2330 187.50 1.08 31.12 CHF RocheHldgctf ROG 245.50 0.16 -11.18 $ WalMart WMT 72.35 0.11 18.03 Sources: WSJ Market Data Group; Birinyi Associates
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THE WALL STREET JOURNAL. Monday, September 26, 2016 | B7


Insurers Split on Tactics First Day After

Allianz has turned to
wind farms, sewer
BOJ Policy Shift,
tunnels and housing;
Zurich sticks to bonds Bond Yield Falls
AND RACHEL ROSENTHAL into Japans financial system.
ZURICHFor years, Allianz Its new target for 10-year
SE was content with an invest- TOKYOThe brave new yields, a policy measure rarely
ment diet of mostly low-risk world for Japanese govern- adopted by central banks in
bonds. More recently, the Ger- ment bonds got off to a shaky the past, is designed to
man insurer has lavished start on Friday, as investors steepen the yield curve, or
money on a military garrison struggled to interpret the lat- widen the difference between
for the U.K.s Parachute Regi- est moves by the countrys short-term and long-term
ment, a Texas wind farm and a central bank that are set to yields. That should help Japa-

26-kilometer sewer tunnel in deepen its influence over the nese banks, which tend to lend
London. $11 trillion market. over the longer term, become
Meanwhile, Switzerland- The Bank of Japan had said more profitable, encouraging
based Zurich Insurance on Wednesday that it would themthe hope goesto dole
Group AG has largely stuck start to target a yield of out more credit.
with its bond-heavy ways. around zero for the countrys In a sign of the challenge
The diverging strategies of benchmark 10-year govern- now facing the Bank of Japan,
two of Europes largest insur- ment bond, the latest radical prices for government bonds
ers reflect the challenges fac- step it has taken in its years- of different maturities on Fri-
ing an industry that has been long fight to stoke higher in- day moved in ways counter to
upended by low and even neg- Allianz was early to the party. A 2008 deal granted the German insurer the proceeds from Chicago flation in the country. its aims. The yield curve flat-
ative interest rates, depriving parking meters for more than 70 years. On Friday, the first full day tened slightly during the day:
it of the steady returns that of trading since the BOJs an- The yield on shorter-term
once were the lifeblood of the years, said Keefe, Bruyette & Officer Andreas Gruber said as insurers to earn returns. nouncementThursday was a bonds, such as the two-year
sector. Woods analyst William Haw- that about 90 billion ($100.4 Insurers, collectively, are an holiday in Japanthe bond tenor, rose slightly, while the
Allianzs less easily resal- kins. He said firms generally billion), or 15%, of Allianzs investing behemoth. In Eu- market failed to fall into line. yield on Japans newest 20-
able, but promising real-estate are seeking out investments roughly 600 billion portfolio rope, their combined assets The yield on Japans 10- year bond was trading at
and infrastructure investments with greater risk and better is now dedicated to alternative under management amounted year government bond fell 0.375% compared with 0.415%
of late amplify a 2008 deal returns. But there is a poten- investments such as real es- to 9.8 trillion last year, an slightly to minus-0.055%, from on Wednesday.
that granted the insurer pro- tial downside to committing to tate, and the firm aims to in- amount equal to 61% of the minus-0.030% at Wednesdays
ceeds from Chicago parking less-liquid assets or those less crease that portion to 110 bil- European Unions total eco- close, further away from the
meters for more than 70 years. easily sold for cash than lion or more over the next few nomic output, according to in- central banks new target.
We need to find out
These deals now offer the bonds, he said: Could the as- years. Alternative investments, dustry group Insurance Eu- Bond yields fall when prices what the BOJs
prospect of higher returns sets suddenly blow up? I do including real estate, totaled rope. rise.
than traditional bonds and re- think at some point that could roughly 50 billion, or about One reason Allianz has con- Trading in the worlds sec-
strategy is.
flect a burgeoning creativity lead to some surprises. 10% of Allianzs portfolio, as sidered different investments, ond-largest government-bond TADASHI MATSUKAWA
and potentially higher-risk Federal Reserve Bank of recently as 2012. analysts said, is its exposure market was light, participants
profilefor an industry known Boston President Eric Rosen- Recent deals include paying to the German life-insurance said, as investors waited to
for its conservative ways. In gren has cautioned that low about $420 million for a 44% business, which features long see how the Bank of Japan The new stance also means
the downside-up world of neg- interest rates may be fueling a stake in 10 Hudson Yards, an contracts and guaranteed re- would implement its new pol- that the centerpiece of the
ative interest rates, Allianz rise in commercial-real-estate office complex that Allianz de- turns for customers. icy. BOJs easing program since
isnt the only insurer feeling a prices, which could plummet scribed as being part of the Analysts said that helps to We need to find out what 2013buying huge amounts of
need to get more inventive. and cause broader fallout if biggest development in New make Allianz emblematic of an the BOJs strategy is, said Ta- government bondswill
The average portfolio yield economic conditions change. York since Rockefeller Center, element of the industry seek- dashi Matsukawa, head of change. Now, the amount the
is around 3% for most of these Pressure on insurers prof- and snapping up an interest in ing to get more creative with Japan fixed income at Pine- BOJs purchases could rise or
companies, J.P. Morgan Chase its has been behind a spurt of the Colbecks Corner wind investments, while Zurich In- Bridge Investments in Tokyo. fall depending on how close to
& Co. analyst Michael Huttner merger activity in the sector, farm in Texas. surance represents the oppo- We dont know what the tar- 0% yields hover.
said of insurers. You dont which rose in value to roughly Negative interest rates, a site end of the spectrum. get rate of buying is yet, and Just how the BOJ will
have to go many years ago to $111 billion last year from $64 tool wielded by central banks Zurich Insurance Chief Fi- there was no mention in the steepen the yield curve is dif-
where they wouldve been 4% billion in 2014, according to a in several countries, particu- nancial Officer George Quinn BOJ statement. ficult to predict, said Koji Fu-
and maybe 5%. report from Ernst & Young. larly in Europe, have created a cautioned that getting creative The central bank already kaya, chief executive at FPG
Analysts said dwindling Last month, Allianz re- jarring reversal. They have might bolster insurers tempo- has an outsize role in the mar- Securities in Tokyo, because
yields have yet to cut into in- ported a sharp decline in made borrowing cheaperin rarily, but it also could cause ket: It owns about one-third of the central bank will be able
surers profitability in a signif- profit for the first half of this some cases, even resulting in fallout when conditions all Japanese government to buy shorter- or longer-term
icant way. The question is year due in part to lower in- firms being paid to borrow change. The music stops, and bonds, or JGBs, outstanding, maturities freely, depending
where this industry is going to vestment returns. but also have made it more dif- you find yourself at peak asset having bought up trillions of on its view of the economys
be over the next five to 10 Allianz Chief Investment ficult for bond investors such risk, Mr. Quinn said. yen worth in recent years in condition at a given time.

2016 Dow Jones & Co., Inc. All rights reserved. 6DJ4192
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B8 | Monday, September 26, 2016 THE WALL STREET JOURNAL.

Email: heard@wsj.com

China Coming to Theater Near You OVERHEARD TwitterDeal

Matt Damon defending nese films abroad. The maestro has spoken,
Culture Clash
monsters at the Great Wall of
China could be what Holly-
wood films are going to look
Revenue of Chinese lms overseas
The tie-up with Sony came
two days after Viacom said it
would no longer seek to sell a
but his words have a lot less
impact these days. Ignoring
him might be a mistake,
versus foreign lms in China
like. At least that is the vision minority stake in Paramount though. Money may be burning a
20 billion yuan
of Chinas richest man. !"#$%&%'(#)*&'+ Pictures, another major Holly- Former Federal Reserve hole in Marc Benioffs
Dalian Wanda Group, a wood studio that was report- Chairman Alan Greenspan pocket. So far, his investors
Chinese lms overseas
property-to-theme-parks busi- 15 edly a target of Wanda. warned in a Bloomberg inter- are the ones getting singed.
Foreign lms in China
ness empire that is controlled This shows how eager Mr. view on Thursday that yields The ambitious chief execu-
by billionaire Wang Jianlin, Wang is to get a piece of the on the benchmark U.S. Trea- tive of Salesforce.com made
said Friday that it had reached action. sury note could rise to 5%. no secret of his effort to grab
an open-ended investment Wandas statement even That would mean a paper LinkedIn from the clutches of
partnership with major Hol- 5 spoke of working hand in loss of about 25%, though he Microsoft a few months back.
lywood studio Sony Pictures. hand with all of Hollywoods didnt suggest it would occur Now, his eyes have report-
For Sony, the deal is a clear 0 Big Six studios. overnight. edly turned to another beat-
positive. It gets the financial Matt Damon, left, and director Wandas Legendary Pic- The yield promptly sank to en-down internet name:
11 12 13 14 15
backing of a prominent Chi- Zhang Yimou at a press tures, a smaller studio that it a two-week low. How differ- Twitter.
nese mogul while enjoying the Source: Wind Info conference for their lm 'The acquired earlier this year, will ent it was 20 years ago, Media reports Friday said
vast cinema networks of THE WALL STREET JOURNAL. Great Wall' in Beijing. release The Great Wall in when Mr. Greenspan gave his that the cloud software firm
Wanda, which owns the most December in China and in Feb- famous irrational exuber- is exploring a potential deal
movie theaters in China. cleared in China have done from China. ruary in the U.S. ance speech about technol- with the microblogging site.
Wanda also owns AMC En- well. Yet Mr. Wangs dreams The $150 million film, the ogy stocks: The Nasdaq Com- The talks are said to be at an
tertainment, which is in the Half of the top 10 highest- seem bigger than bringing costliest U.S.-China co-produc- posite fell 3.4% from its early stage.
process of creating Americas grossing films there are from Hollywood to China. The Chi- tion to date, features Mr. Da- intraday high to the following It should be noted that
biggest theater chain in its Hollywood, including Furious nese company says it will mon as a European mercenary, sessions low. this is the latest in a long-
merger with Carmike. It also is 7 and Transformers: Age of strive to highlight the China incongruously romping After that, Mr. Greenspans running chain of rumors in-
pursuing Europes largest cin- Extinction. element in Sonys films. around medieval China. warning was ignored, and the volving Twitter. Previous ru-
ema chain, Odeon & UCI. There are caveats, however. Instead of just featuring By having a say at a major index soared 280% in a little mors have involved media
Sony also may be able to To be considered a co-produc- Chinese actors as a ploy to Hollywood studio, Mr. Wang over three years before sink- companies, Facebook and
get around Chinas quotas on tion, a movie must be partly win fans at home, Mr. Wang takes another step toward ing nearly 80%. His bond pretty much any other tech
imported films by making co- filmed in China. may hope to achieve some- selling Chinese movies to a warning may be right eventu- company with a decent-sized
productions with Wanda. Hol- Also, at least a third of the thing quite the oppositeex- global audience. ally, too, but this time it has wallet.
lywood movies that have been leading actors have to be tending the influence of Chi- Jacky Wong been ignored from the start. Salesforce is a new en-
trant to that listalso a puz-
zling one. The company sells

All the Texas Tea in China Just Isnt What It Used to Be subscription-based enter-
prise software to large busi-
nessesa very different in-
Anyone looking to this as Kuwait and Norway com- is a fungible commodity, so dustry than advertising.
So Pumped weeks oil meeting in Algeria bined in 2015. and far more Chinas impact on the overall But Mr. Benioff has spoken
2015 output of petroleum and for the future of oil produc- than major OPEC members global energy balance is the previously of an M&A win-
other liquids, in thousands of tion should shift their gaze Iran and Venezuela, accord- factor to watch. After the dow created by a harsh sell-
barrels a day eastward to China. ing to the U.S. Energy Infor- U.S., where output has been off in software and internet
China, the worlds mar- mation Administration. falling, it is one of the lead- companies earlier this year.
United States 15,044 ginal consumer of nearly ev- Now its output is falling ing contributors to a needed Twitter fits that bill, at

Saudi Arabia 11,949 erything that comes out of fast. In terms of barrels, RBC adjustment in supply. least. Its shares were down
the ground, is a big factor in Capital Markets commodity OPEC output is near re- 19% for the year before Fri-
Russia 11,030
the demand side of the equa- strategist Michael Tran says, cord levels and even non- days reports, as its once-
China 4,722 tion. But for oil, the worlds the drop this year versus the OPEC production, largely rapid growth has stalled. But
Canada 4,506
most valuable resource, its same period in 2015 is more PetroChina is reducing thanks to Russia, was higher that doesnt make Twitter
impact on the supply side is than in troubled Nigeria or investment in aging fields. in the first half of 2016 than any sort of bargain.
Iraq 4,050 underestimated, but could Venezuela. Rather than vio- in the first half of 2014. If Twitter commanded a
United Arab Emirates 3,474 gain more attention soon. lence or economic chaos, where they had to spend Chinas stimulus spending similar deal multiple to
Based on output alone, though, the explanation lies heavily to maintain output. and building of its own stra- LinkedIn of about 6.8 times
Iran 3,447 China wouldnt be out of in a sudden focus on the bot- In August, Chinese crude-oil tegic petroleum reserve have forward sales, that would put
Brazil 3,183 place in the Organization of tom line at Chinese oil pro- production fell to its lowest been helping to bolster weak the price in the $18 billion
the Petroleum Exporting ducers. level since late 2009. demand. While projecting range, which is $18 billion
Kuwait 2,710
Countries. Of course, it is the PetroChina Co. and Cnooc Chinese crude imports, how those will affect oil more than what Salesforce
Venezuela 2,685 worlds No. 2 consumer and Ltd. have both projected fall- therefore, may not deceler- market demand in the future has in net cash. A lot, in
Source: U.S. Energy Information hence not an exporter. But ing hydrocarbon production ate as much as some pro- is tough, Chinas downward other words, to chase a
Administration China produced as much pe- this year as they cut back on jected. So far this year, they supply trajectory is crystal highly speculative dream.
THE WALL STREET JOURNAL. troleum and related liquids investment in aging fields are up by about 9%. But oil clear. Spencer Jakab Dan Gallagher


Investors See an Opening

existing debt and for general pur- symbolic return to global markets
Finance poses, according to a term sheet.
The company sold $1.1 billion
after a previous issue faltered
earlier this year.
Watch worth of three-year bonds with a VTB Capital PLC, the sole or-

In Hong Kong Shares

1.75% coupon, the term sheet ganizer of the bond placement,
said. It also sold $1.3 billion worth said Russias Finance Ministry had
of five-year bonds with a 2.% cou- raised $1.25 billion in 10-year Eu-
pon and $600 million of 10-year robonds with a 3.99% yield.
BY MIA LAMAR LyGH Capital, that means in- looking more to Hong Kong bonds with a 2.75% coupon. That brings Russia to its tar-
vesting in Hong Kong stocks for investment opportunities SINOPEC Carol Chan get of $3 billion in external bor-
Foreigners are loath to own right now is simply a matter in part because conditions at rowing for this year.
Chinese stocks. Few strategists of following the money. home are no longer favorable.
Energy Firm Sells RUSSIA In May, Russia fell short of
think the economy is turning a There is a good chance for Market conditions in China $3 Billion of Bonds State Raises Cash that goal when it raised only
corner. But some investors are the Hong Kong market to go are different than two years China Petrochemical Corp., $1.75 billion in its first bid for in-
piling in anyway. further higher even though ago. At that time, equity was known as Sinopec Group, raised a In Offshore Market ternational funding since it was
After spending the first global investors sentiment on cheap, bond yields were high, combined $3 billion from a U.S. Russia overcame sanctions-re- hit by sanctions in 2014 over the
seven months of the year in China [is] still subdued, Ms. property prices were not that dollar-denominated bond offering lated hurdles to tap international Ukraine crisis.
the red, the Hong Kong-listed Lu said in a note to investors outrageous, Ms. Lu said in via three tranches to refinance debt markets Friday, marking a Laura Mills
shares of Chinese companies this month. the interview.
known as H-shareshave Hong Kong stocks now Lim Say Boon, chief invest-
clawed their way into positive
territory with a 10% surge
make up 40% of her portfolio,
up from 10% two months ago,
ment officer of DBS Bank, re-
peated some earlier advice
since July. Some investors see she said in an interview with this week, urging his clients in
further gains. The Wall Street Journal. a note to follow the money [ Search by company, category or country at asia.WSJ.com/funds ]
The reason: A rush of cash and buy H-shares.
from investors in mainland To be clear, its not about NAV %RETURN
China who are snapping up
H-shares have the Chinese economy, which
VP Classic-C Units AS EQ HKG 09/22 USD 15.80 5.3 7.2 4.9
Hong Kong sharescheaper clawed their way will continue to struggle, Mr. VP Classic-C Units AUD H
VP Classic-C Units CAD H
09/22 AUD
09/22 CAD
and higher yielding than those Lim said. Our call at midyear
at homevia the citys stock-
into the black, rising was driven by low valuations
VP Classic-C Units HKD H
VP Classic-C Units NZD H
09/22 HKD
09/22 NZD
Data as shown is for information purposes only. No offer is being made by VP Classic-C Units RMB AS EQ HKG 09/22 CNH 10.68 4.7 NS NS
trading link with Shanghai. 10% since July. and expectations of policy Morningstar, Ltd. or this publication. Funds shown arent registered with the
U.S. Securities and Exchange Commission and arent available for sale to United
VP Classic-C Units RMB H
VP Multi-Asset Fund Cls A HKD
09/22 CNH
09/22 HKD
Even after the recent rally, support. And both factors re- States citizens and/or residents except as noted. Prices are in local currencies. VP Multi-Asset Fund Cls A USD OT OT HKG 09/22 USD 10.17 3.6 NS NS
companies in Hong Kongs main valid. All performance figures are calculated using the most recent prices available. VP Taiwan Fund AS EQ CYM 09/22 USD 17.31 20.1 20.5 2.9

Hang Seng China Enterprises So far in September, main- Still, the rally could stall if NAV %RETURN
Index, which tracks H-shares, land investors have bought a mainland support for the citys For information about listing your funds,
are trading at 8.4 times what net 49.4 billion yuan ($7.4 bil- stocks were to dry up. Indeed, n Chartered Asset Management Pte Ltd - Tel No: 65-6835-8866 please contact: Freda Fung tel: +852 2831
Fax No: 65-6835 8865, Website: www.cam.com.sg, Email: cam@cam.com.sg
analysts expect them to earn lion) in Hong Kong shares the buying spree hit a speed CAM-GTF Limited OT OT MUS 09/16 USD 302948.64 8.2 13.3 -7.8 2504; email: freda.fung@wsj.com
in the coming year, compared through the trading link, more bump Thursday as the trading
with 13 times for yuan-denom- than three times the monthly link recorded its first day of
inated A-shares traded in average this year. A fresh wave net outflows from mainland
Shanghai and 34 times for of money could be coming: investors since Aug 1.
stocks on Chinas tech-heavy
Shenzhen Stock Exchange.
For the likes of Grace Lu, a
Among the investors recently
given the green light to use
the link are the countrys in-
Global investors wary of
Chinas slowing economy and
opaque companies have been
n Website: Https://Www.Valuepartners-Group.Com/ Tel: (852) 2143 0688
China A-Share Fund Cls A AUD H OT
China A-Share Fund Cls A AUD UnH OT
China A-Share Fund Cls A CAD H OT
09/22 AUD
09/22 AUD
09/22 CAD
11.99 -5.4
10.92 -9.8
11.16 -6.4
China A-Share Fund Cls A EUR H OT OT HKG 09/22 EUR 11.78 -7.1 4.3 NS
former China stock picker for surance companies. reluctant to step up buying of China A-Share Fund Cls A EUR UnH OT OT HKG 09/22 EUR 11.43 NS NS NS

Temasek Holdings Pte. Ltd.

who now runs hedge fund
Investors and strategists
said mainland investors are
Chinese shares this year de-
spite an emerging-market rally
China A-Share Fund Cls A GBP H OT
China A-Share Fund Cls A GBP UnH OT
China A-Share Fund Cls A HKD H OT
China A-Share Fund Cls A HKD UnH OT
09/22 GBP
09/22 GBP
09/22 HKD
09/22 HKD
11.79 -3.8
13.19 6.2
11.92 -6.4
11.80 -5.4
that boosted stocks from Paki- China A-Share Fund Cls A NZD H OT
China A-Share Fund Cls A NZD UnH OT
09/22 NZD
09/22 NZD
11.79 -5.4
9.99 -11.7
stan to Brazil. China A-Share Fund Cls A RMB (CNH) OT OT HKG 09/22 CNH 12.71 -4.0 7.9 NS
China A-Share Fund Cls A USD OT OT HKG 09/22 USD 11.78 -5.5 3.5 NS
Headed to Hong Kong Others warn Hong Kong China A-Share Fund Cls A USD H OT
China Greenchip-A Units AS
09/22 USD
09/22 HKD
11.85 -6.0
54.71 3.3
shares are getting less cheap,
Flows from mainland China into Hong Kong stocks via a trading link, China Greenchip-A Units AUD H AS EQ CYM 09/22 AUD 9.22 3.7 3.6 -6.0
particularly given the possibil- China Greenchip-A Units CAD H AS EQ CYM 09/22 CAD 9.00 2.7 2.3 -6.8
as a percentage of a 250 billion yuan quota China Greenchip-A Units NZD H AS EQ CYM 09/22 NZD 9.44 4.4 4.2 -4.7
ity the Federal Reserve will China Greenchip-A Units USD AS EQ CYM 09/22 USD 9.06 3.3 3.0 -6.4
Usage of investment quota raise interest rates this year, China Greenchip-A2 QDIs Units AS
GC Hi Yield Inc - Cls A MDIs GBP H OT
09/22 HKD
09/22 GBP
9.97 3.3
9.66 12.7

80% which would dent the higher- GC Hi Yield Inc-Cls A MDIs AUD H OT
GC Hi Yield Inc-Cls A MDIs CAD H OT
09/22 AUD
09/22 CAD
9.21 14.1
9.25 13.0
7.7 In print & online. Contact:
yielding bank and property GC Hi Yield Inc-Cls A MDIs NZD H OT OT CYM 09/22 NZD 9.51 14.7 18.5 10.6
GC Hi Yield Inc-Cls P HKD Acc sh OT OT CYM 09/22 HKD 13.76 13.3 16.4 7.6
shares that have been popular GC Hi Yield Inc-Cls P HKD MDIs sh OT OT CYM 09/22 HKD 9.08 13.4 16.4 7.6
GC Hi Yield Inc-Cls P MDIs SGD H OT OT CYM 09/22 SGD 9.96 13.4 17.0 NS
60 with mainland investors GC Hi Yield Inc-Cls P USD Acc sh OT OT CYM 09/22 USD 13.87 13.1 16.3 7.6
The flow coming to Hong GC Hi Yield Inc-Cls P USD MDIs sh OT OT CYM 09/22 USD 9.13 13.1 16.3 7.6 wsja.advertising@dowjones.com
GC Hi Yield Inc-ClsA MDIs EUR H OT OT CYM 09/22 EUR 10.09 12.0 15.0 NS
Kong I think is very sustain- Hi-Div Stk Cls A RMB H Acc OT OT HKG 09/22 CNH 10.56 7.6 9.4 4.0
Hi-Div Stk Cls A RMB UnH Acc OT OT HKG 09/22 CNH 12.51 7.4 10.5 5.4
40 able, but I think we are past Hi-Div Stk Cls A1 OT OT HKG 09/22 USD 76.47 6.4 7.2 1.6
the really cheap-valuation Hi-Div Stk Cls A2 AUD H MDIs OT
Hi-Div Stk Cls A2 CAD H MDIs OT
09/22 AUD
09/22 CAD
stage, said William Ma, chief Hi-Div Stk Cls A2 GBP H MDIs OT OT HKG 09/22 GBP 9.11 5.5 6.1 NS
Hi-Div Stk Cls A2 HKD MDIs OT OT HKG 09/22 HKD 9.85 6.8 7.5 1.5
20 investment officer of wealth Hi-Div Stk Cls A2 MDIs OT OT HKG 09/22 USD 10.79 6.4 7.2 1.6
Hi-Div Stk Cls A2 NZD H MDIs OT OT HKG 09/22 NZD 9.72 6.2 7.5 3.0
manager Noah Holdings Ltd. Hi-Div Stk Cls A2 RMB H MDIs OT OT HKG 09/22 CNH 9.31 8.5 10.3 4.3
What we need is an earnings Hi-Div Stk Cls A2 RMB UnH MDIs OT OT HKG 09/22 CNH 9.58 8.3 11.9 5.9
0 recovery instead of just being
Intel-China Converg Fund-A AUD H AS
Intel-China Converg Fund-A CAD H AS
09/22 AUD
09/22 CAD
Intel-China Converg Fund-A NZD H AS EQ CYM 09/22 NZD 10.76 NS NS NS
2014 15 16 cheap. Intel-China Converg Fund-A Units AS EQ CYM 09/22 USD 142.57 -2.5 -1.5 3.3

Note: The quota was abolished in August. 250 billion yuan = $37.5 billion Gregor Stuart Hunter Intel-Chinese Mainland Foc Fund AS
VP Classic-A Units AS
09/22 USD
09/22 USD
39.49 -4.4
277.85 5.6
Source: Thomson Reuters THE WALL STREET JOURNAL. contributed to this article. VP Classic-B Units AS EQ HKG 09/22 USD 125.22 5.3 7.1 4.7