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>
yet.
Devotees have
No justice? by New York mag-
azine and “one of
rise of Republican protection-
ism and the nation’s polarized
of workers in the manufactur-
ing sector, according to a Wall
REFUNDS FOR
grown especially hopeful the most assaultive movies politics. It will help shape this Street Journal analysis of cen- WELLS ADD-ON
about the prospect of “Snyder ever made” by The Wall Street
cut” news with Thursday’s Journal.
year’s midterm elections.
South Carolina’s Third
sus data.
Today, the district is repre-
SERVICES
s 2018 Dow Jones & Company, Inc.
start of Comic-Con in San Di- An ardent group of fans be- Congressional district, on sented by a Republican, Jeff
All Rights Reserved ego, where studios frequently lieve “Batman v Superman” the edge of the Blue Ridge Duncan. He has compared ille- BUSINESS & FINANCE, B1
make big announcements to Please turn to page A11 Mountains, epitomizes the Please turn to page A11
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A2 | Friday, July 20, 2018 * ***** THE WALL STREET JOURNAL.
U.S. NEWS
Senate GOP Cool to New Tax Plan At Least
BY RICHARD RUBIN tax cuts that Americans are al-
ready working on and using
8 Die in
now can become permanent,”
WASHINGTON—House Re-
publicans are busily preparing
what they call “Tax Reform
2.0,” an extension of tax cuts
said Rep. Jim Renacci (R.,
Ohio).
Tax increases embedded in
Missouri
they passed last year that are
scheduled to expire after 2025.
So far, their Senate counter-
the law, including limits on the
state and local tax deduction
and the elimination of deduc-
Boating
parts aren’t so interested. tions for personal exemptions,
House Republicans expect to
vote on their tax plan in Sep-
tember, and one leading option
would also reverse after 2025 if
Congress doesn’t act.
On net, extending all those
Accident
is a three-bill package: Exten- major changes would reduce BY JOE BARRETT
CORRECTIONS AMPLIFICATIONS
gress to maximize employment
THE WALL STREET JOURNAL
and maintain stable prices, and
(USPS 664-880) (Eastern Edition ISSN 0099-9660)
its leadership today seeks infla- (Central Edition ISSN 1092-0935) (Western Edition ISSN 0193-2241)
tion of 2% because it sees that Editorial and publication headquarters:
level as reflecting a healthy In some editions Thursday, showed 2016 gross domestic trading partner. A July 2 U.S. 1211 Avenue of the Americas, New York, N.Y. 10036
economy. Carnoustie, Scotland, was in- product per hour worked, in U.S. News article about economic out- Published daily except Sundays and general legal holidays.
With the economy expanding correctly listed as Carnoustie, dollars. The chart incorrectly put incorrectly said it is the big- Periodicals postage paid at New York, N.Y., and other mailing offices.
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solidly and the unemployment England, in the dateline of a was labeled in percentages. gest foreign buyer of U.S. goods. 200 Burnett Rd., Chicopee, MA 01020.
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decades, the central bank has British Open. The Labor Department said U.S. companies are ex- copies of which are available from the Advertising Services Department, Dow Jones & Co. Inc.,
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THE WALL STREET JOURNAL. * * * * * * Friday, July 20, 2018 | A3
U.S. NEWS
HIGH FLYER/REUTERS
million a day on a partially federal funding. ment the same message: Keep
built South Carolina nuclear “It’s a classic example of a building the MOX plant. Last
facility that it wants to aban- big project run amok and con- year, Congress authorized the
don due to soaring costs. tinuing for parochial reasons, energy secretary to stop con-
Congress has continued which is jobs in South Caro- struction if evidence showed
funding construction of the lina,” said Tom Clements, di- South Carolina wants Washington to continue building the Mixed-Oxide Fuel Fabrication Facility. another method would cost
plant, which would be used to rector of the nonprofit watch- less than half as much.
dispose of surplus weapons- dog group SRS Watch. decide to produce the pits at a In May, Energy Secretary
grade plutonium, despite a se- In 2014, the Energy Depart- different facility elsewhere. Moving Target Rick Perry invoked the provi-
ries of reviews casting doubt ment concluded plutonium “The department has the abil- Estimates for the so-called MOX sion and prepared to halt con-
on the financial logic involved. could be disposed far more ity to significantly reduce the plant's construction costs and struction in June. South Caro-
Last month, a federal judge cheaply using a different cost of our plutonium disposi- completion date lina sued, and U.S. District
ordered the work to keep go- method, known as “dilute and tion mission and provide re- have changed Judge J. Michelle Childs
ing, while South Carolina pur- dispose.” The shift is opposed sources for national security over the years. 17.2 granted a preliminary injunc-
sues a legal bid to force the by South Carolina officials and needs,” a DOE official said. $4.8 7.4 tion June 7 in the state’s favor,
Energy Department to stay the members of the state’s con- Lisa Gordon-Hagerty, ad- billion pending further litigation.
course. gressional delegation, includ- ministrator of the National South Carolina Attorney
The plant’s future is now ing Republican Sen. Lindsey Nuclear Security Administra- Year of General Alan Wilson, a Repub-
estimate: 2007 2012 2016
the subject of budget negotia- Graham. tion, a semiautonomous lican, said the state wants
tions on Capitol Hill. Lawmak- The department says it agency in the Energy Depart- Expected DOE “to abide by the rules
ers are haggling over whether wants to repurpose the MOX ment in charge of maintaining completion they agreed to abide by, and
to continue funding the proj- facility so it can produce plu- the U.S. nuclear weapons date: 2016 2019 2048 we want them to not make
ect in fiscal 2019, which starts tonium cores, or “pits,” for stockpile, said in a memo last Sources: Government Accountability Office; South Carolina a dumping
Oct. 1, or wind it down. The new nuclear weapons as part month that the agency was re- Energy Department THE WALL STREET JOURNAL. ground for nuclear waste.”
federal government has spent of a push to modernize the na- thinking the “viability to exe- Mr. Graham has said he
$5.4 billion on the plant since tion’s nuclear stockpile. cute enduring missions” at the 1,800 associated with the MOX community that has always hopes the injunction would al-
construction began in 2007, The judge’s order requiring Savannah River Site, an impor- plant, officials say. tried to do right by DOE,” he low the state’s congressional
and the facility accounts for work to continue prevents tant employer in western The uncertainty worries Ai- said. “Maybe it’s naive, but we delegation to “stop this mad-
nearly 2,000 jobs at the En- DOE from beginning to carry South Carolina. The site em- ken’s mayor, Rick Osbon, who certainly hope we can expect ness and ensure South Caro-
ergy Department’s Savannah out that plan, it said, raising ploys about 11,400 federal and would like to see the plant the same from them.” lina is not left holding the
River Site near Aiken, S.C. the possibility the U.S. could contractor workers, including completed. “I think we’re a The MOX is linked to a bag.”
Tornadoes
Batter Cities
In Central Iowa
A flurry of tornadoes that
formed unexpectedly swept
through central Iowa Thursday, in-
juring at least 17 people, flattening
buildings in three cities and forc-
ing the evacuation of a hospital.
The tornadoes hit Marshall-
town, Pella and Bondurant as
surprised residents ran for cover.
The storms injured 10 people in
Marshalltown and seven at a
factory near Pella, but no deaths
were reported.
Marshalltown, a city of
27,000 people about 50 miles
northeast of Des Moines, ap-
peared to have been hit the
hardest. Brick walls collapsed in
the streets, roofs were blown
off buildings and the cupola of
the historic courthouse tumbled
175 feet to the ground.
The only hospital in Marshall-
town was damaged, spokes-
woman Amy Varcoe said. All 40
of the patients at UnityPoint
Health were being transferred to
CHARLIE NEIBERGALL/ASSOCIATED PRESS
plement two rules under the ther not eligible, or not yet of the youngest children to
federal lead and copper rule, known to be eligible, for re- their parents. Forty-six of
including maintaining an in- unification.” those children weren’t re-
ventory of lead service lines In the filing Thursday, the united with parents, the gov-
for monitoring in the city and government said parents of ernment said, for a variety of
requiring the use of anti-corro- 136 children waived their reasons including the criminal
sive additives in drinking wa- right to be reunited, while 91 histories of some adults.
ter after the water switch. children’s parents had a “pro- Lee Gelernt, the ACLU law-
Scott Kincaid, 65 years old, hibitive criminal record” or yer handling the case, said the
who served on Flint’s city were otherwise “deemed ineli- number of children the gov-
council for 30 years before gible” by Immigration and ernment says can’t be re-
stepping down in November, Customs Enforcement offi- united with parents is “very
said he wished the EPA had cials. Two other children’s high but of course we cannot
stepped in to address the parents are in criminal jails, evaluate the number because
city’s water quality sooner. the filing said. the government is not trans-
“Unfortunately for us in Flint, U.S. District Judge Dana Sa- parent.”
we were the ones that had to A worker loaded cases of bottled water into vehicles in Flint, Mich., in April. The state ended a braw gave the administration Another hearing is sched-
suffer,” he said. free-water program after tests showed that water quality was below federal action levels for lead. until July 26 to reunite the uled in the case Friday.
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A4 | Friday, July 20, 2018 P W L C 10 11 12 H T G K B F A M 1 2 3 4 5 6 7 8 9 O I X X **** THE WALL STREET JOURNAL.
U.S. NEWS
WASHINGTON WIRE
Appeals Court Nominee Bows Out FBI CONSUMER PROTECTION
BY NATALIE ANDREWS Mr. Scott would vote no and
AND BRENT KENDALL Mr. Rubio was leaning in that Three Cybersecurity CFPB Nominee Seeks
direction, the “no” votes Officials Resigning To Strike Balance
WASHINGTON—A promi- started to rack up, the Repub-
nent federal appeals court lican aide said, prompting Mr. Three of the top cybersecu- The Trump administration’s
nominee withdrew from con- McConnell to withdraw the rity officials at the Federal Bu- pick to run the Consumer Finan-
sideration on Thursday after a nomination. reau of Investigation are retiring cial Protection Bureau said she
Republican senator voiced Democrats sought to use from government service, ac- would pursue the “proper bal-
concern over what he said the development to bolster cording to people familiar with ancing of all interests,” including
were racially insensitive writ- their case against Supreme the matter—departures that those of consumers and financial
ings by the nominee several Court nominee Judge Brett Ka- come as cyberattacks are a ma- companies, signaling she would
YURI GRIPAS/REUTERS
years ago, and other GOP law- vanaugh. Democrats are refus- jor concern for security agencies. continue a shift in the bureau’s
makers joined him in opposi- ing to meet with the nominee Senior U.S. intelligence offi- operations from the Obama era.
tion. until they see more of the cials say the country is at a Kathy Kraninger, a senior offi-
Senate Majority Leader judge’s past writings. “critical point” in facing unprece- cial at the White House’s Office
Mitch McConnell (R., Ky.) “If Republicans agreed that dented cyberthreats. of Management and Budget,
dropped a scheduled floor vote Bounds is not qualified be- Scott Smith, the assistant FBI faced grilling by lawmakers on
for the nomination of Ryan Lawmakers objected to past writings from Ryan Wesley Bounds. cause of what he wrote in col- director who runs the bureau’s the Senate Banking Committee
Wesley Bounds to the Ninth lege, how could they possibly cyber division, is leaving this on Thursday, her first opportu-
U.S. Circuit Court of Appeals Stanford University. For exam- Senate leaves no margin for argue that material from Brett month. His deputy, Howard Mar- nity to publicly present her views
after the senators said they ple, in a 1995 piece for the stu- internal disagreement. Kavanaugh’s time in the White shall, also left in recent weeks. on consumer-finance oversight.
couldn’t support him. dent-run Stanford Review Mr. “After talking with the nom- House and as a political opera- Mr. Marshall has accepted a job Since Trump-appointed officials
The withdrawal marks the Bounds coined the term “race- inee last night and meeting tive aren’t relevant?” said Sen. at Accenture, a consulting firm. took control of the CFPB in No-
first time the Trump adminis- think,” which he defined as a with him today, I had unan- Dianne Feinstein (D., Calif.), Mr. Smith is also expected to vember, the agency has sought a
tration has failed with a nomi- misplaced emphasis on multi- swered questions that led to the top Democrat on the Sen- move to the private sector. friendlier approach to the compa-
nee for one of the 12 regional culturalism. He lamented me being unable to support ate Judiciary Committee. David Resch, executive assis- nies it regulates, a change from
U.S. appeals courts, which are “race-focused” groups on cam- him,” South Carolina Sen. Tim The White House has priori- tant director of the FBI’s crimi- the Obama administration.
influential because they are pus and wrote that “the exis- Scott said in a statement. tized nominees for the U.S. ap- nal, cyber, response and services President Donald Trump in
the final word on most litiga- tence of ethnic organizations Mr. Scott, the only black Re- peals courts above nominees branch, is departing the bureau, June nominated Ms. Kraninger to
tion in the federal system. The is no inevitable prerequisite to publican senator, “raised some for trial courts and other spe- as well. Mr. Resch, who was succeed CFPB acting Director Mick
White House confirmed Mr. maintaining a diverse univer- issues” on Thursday, ahead of cialized courts. Until Thursday, named to his senior post by FBI Mulvaney, who has been retooling
Bounds pulled his name for sity community—white stu- the vote, said Sen. Marco Ru- the administration had suc- Director Christopher Wray in the agency while also serving as
consideration after GOP sena- dents, after all, seem to be do- bio as he left the GOP closed- cessfully placed 23 judges on April, supervised Mr. Smith and White House budget director.
tors’ support faded. ing all right without an Aryan door lunch. The Florida Re- appeals courts 18 months into Mr. Marshall. Ms. Kraninger said she would
The Ninth Circuit covers Student Union.” publican shared his colleague’s the Trump presidency. That is Additionally, Carl Ghattas, ex- carry on the pro-business policy
nine Western states, including Multiple attempts to reach concerns, and was troubled more than double the number ecutive assistant director of the shift started by Mr. Mulvaney.
California, and is one of the Mr. Bounds for comment that Mr. Bounds hadn’t dis- of appeals court judges Presi- FBI’s national-security branch, Her strategy would emphasize
country’s most left-leaning ap- weren’t successful. closed his college writings to a dent Barack Obama saw con- has decided to leave for the pri- cooperation with other regula-
peals courts. Judicial nominees need a state nominating committee, firmed at the same point in his vate sector. The White House tors and state officials, she said,
Lawmakers objected to past simple majority vote to win according to a Republican aide presidency. declined to comment. while going after those who en-
writings from Mr. Bounds confirmation, but Republicans’ familiar with the matter. —Siobhan Hughes —Dustin Volz gage in illegal activities.
when he was a student at narrow 51-49 majority in the After it became clear that contributed to this article. and Shelby Holliday —Yuka Hayashi
3
investors or strategic suitors to
finance a higher bid, people
close to the company said.
spective and a regulatory per-
spective,” said Dennis Hersch,
who used to head Davis Polk &
Continued from Page One higher, expecting a bidding war. Comcast The challenges to Comcast Wardwell’s mergers-and-acqui-
has been trying since 2016 to Comcast’s pursuit of Fox 2 grew larger. Because of an ar- sitions practice and was a for-
buy the rest of Sky. was a struggle from the start. cane provision in U.K. takeover mer adviser to Mr. Roberts on
Disney has indicated in regu- Fox initially struck a $52.4 bil- 1 rules, as either Disney or Com- deals. “Sky offers an amazing
latory filings that it is in charge lion, all-stock deal with Disney Disney cast raised their bids for the platform for Comcast, and I
of whether Fox continues pur- in December, snubbing Com- 0 Fox assets in the U.S., the im- think they understand that
suing Sky. Disney still hasn’t cast’s substantially higher plied value of Sky would go business much better than Dis-
decided if it will top Comcast’s stock offer, citing regulatory –1 up—meaning Comcast would ney does from their experience
bid, people with knowledge of concerns, according to a Fox 21st Century Fox be bidding against itself with a in the cable industry.”
–2
Disney’s thinking said, but regulatory filing. The move higher Fox offer. It was a no- Mr. Hersch dismissed the
some analysts and people close stung Comcast executives, in- –3 tion that caught all parties off idea that Comcast would turn to
to Comcast have argued that it cluding Mr. Roberts, who felt guard, people familiar with the other deals after losing on Fox,
might be smarter to sell Fox’s their efforts weren’t being 9:30 a.m. 10 11 noon 1 p.m. 2 3 4 matter said. saying that Sky would already
Sky stake to Comcast, rather taken seriously, people close to Source: SIX THE WALL STREET JOURNAL. Comcast’s pursuit then hit a be a “big bite” for Comcast if it
than spend tens of billions of the company said. setback after the Justice De- were to win that contest.
dollars to buy a big pay-TV dis- Mr. Roberts also was up doch family preferred to own for months and thought they partment said last week that it Investors on Thursday
tributor that may not be a key- against personal dynamics. Disney stock over Comcast’s, had a path to win when a fed- would appeal the AT&T deci- cheered Mr. Roberts’s decision
part of Disney’s future. While Messrs. Murdoch and the people said, because they eral judge in June blessed sion, which Comcast had used to pull out of the Fox race,
In either case, a move isn’t Iger have long been friends, would have more power in a AT&T Inc.’s takeover of Time to rebut concerns about regula- sending Comcast shares up
expected soon from Disney. A Mr. Murdoch and his sons combined Disney-Fox, as Mr. Warner Inc. over the Justice tory risk. 2.6% as the broader market de-
vote by shareholders to ap- viewed Mr. Roberts with wari- Roberts controls one-third of Department’s objections, a sign Comcast executives began to clined. The stock had been un-
prove its acquisition of Fox is ness after years of tough deal- Comcast’s voting power. In ad- that a Comcast-Fox deal could determine that they would der pressure amid concerns
scheduled for July 27, and Dis- ings with Comcast over TV- dition, Mr. Iger has had a ri- withstand government scrutiny. have to raise their bid for Fox about the deal’s potential costs.
ney wants to confirm it will be channel carriage fees and Hulu, valry with Mr. Roberts, dating The next day, Comcast lobbed substantially to top a competi- Disney shares rose 1.3%, while
getting those assets, including which they jointly own, people back to Comcast’s hostile bid in an unsolicited $65 billion, tor that didn’t appear to be go- Fox slid 3 cents to $46.65.
the Sky stake, before making familiar with the Murdochs’ for Disney in 2004. all-cash bid for the Fox assets ing away and capture a com- —Ben Fritz and Keach Hagey
its next move, a person famil- thinking have said. The Mur- Comcast executives plotted that was about 20% higher pany whose owner didn’t contributed to this article.
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THE WALL STREET JOURNAL. Friday, July 20, 2018 | A5
TIMING MANKIND’S
G R E AT E S T H O U R
On July 21, 1969, at 02:56:15 UTC,
history changed with one small step – and
Earth’s most trusted chronograph became
the first watch worn on the moon.
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A6 | Friday, July 20, 2018 * * THE WALL STREET JOURNAL.
WORLD NEWS
Trade’s Widening Battleground
The Trump administration’s use of tariffs on imported
goods started slowly but has broadened to include
Ross Says It Is ‘Too Early’
To Make Call on Auto Tariffs
hundreds of billions of dollars in goods from China and
other big economies. The timeline illustrates the rapid
increase in the number of products subject to new duties.
IMPORTS BY JOSH ZUMBRUN labor union, the United Auto Automotive Policy Council, a who called the government’s
AND CHESTER DAWSON Workers, which has expressed lobby representing General Mo- investigation long overdue af-
Tariffs on goods qualified support and criti- tors Co., Ford Motor Co. and ter “decades of disinvest-
coming to the U.S. WAS H I N GT O N — C o m - cized industry moves to shift Fiat Chrysler Automobiles N.V. ment.”
merce Secretary Wilbur Ross production outside the U.S. “There is no evidence that Ms. Kelly said the UAW sup-
April 2017 said it is “too early” to say Representatives for U.S. automotive imports pose a ports “targeted” measures but
whether the Trump adminis- trading partners, auto makers, threat to national security,” stopped short of endorsing
U.S. launches probe of aluminum Jan. 22, 2018 tration will move ahead with components suppliers and said Matt Blunt, president of across-the-board tariffs. Trade
and steel imports and sets U.S. imposes proposed tariffs of as much as dealers testified Thursday the group. Mr. Blunt, former tactics, she added, should take
tariffs of approximately 20% on tariffs on 25% on imported vehicles and against the tariffs, arguing governor of Missouri, said into account the globalized na-
washing auto parts. they would hurt the economy there is domestic capacity to ture of the industry.
Canadian lumber.
machines Mr. Ross said the govern- meet any national security re- “Any rash actions could
and solar ment was still analyzing quirements. have unforeseen conse-
whether it would impose tariffs Auto industry officials have quences, including mass lay-
February 2018
panels.
on national security grounds,
Auto industry grown increasingly alarmed at offs of American workers, but
following a similar move on officials are alarmed the prospect of adding yet an- that doesn’t mean we should
metals imports this year. other tariff to those already do nothing,” she said.
His comments came at the
at the prospect of imposed by the White House Bob Carroll, a 37-year-old
TARIFFS BY COUNTRY/REGION opening of a hearing Thursday adding another tariff. this year on aluminum, steel machinist in New Jersey, sub-
Proposed in which all but one of 43 par- and some Chinese-made mitted a public comment sup-
Imposed ticipants who testified spoke goods. porting tariffs, although he
out against automotive tariffs. The widespread opposition said Thursday he couldn’t take
Canada China EU The Commerce Department and put jobs at risk by raising to tariffs in Thursday’s testi- time off to attend the hearing
Multiple/other countries hearings are part of an inves- consumer prices and sparking mony contrasted with previous in person. He expressed frus-
tigation launched in May into a trade war. tariff hearings on Chinese im- tration with the import of
whether the Trump adminis- The European Union said ports that attracted businesses auto parts.
Width indicates value of goods tration can use a 1962 national earlier in the day that it would and lobbying groups both in Workers at some nonunion
subject to tariff:
$25B security law to impose duties retaliate if the U.S. imposes support of and in opposition to auto factories expressed more
50 on foreign-sourced cars and tariffs on imports from Europe, White House policy. opposition to the tariffs. Toy-
100 car parts. cautioning Washington against The day’s only testimony ota Motor Corp. said dozens of
The Trump administration’s unilateral measures that favoring a tougher approach workers at its U.S. plants
hard line has won praise in threaten global free-trade. to auto trade policy came from staged a protest involving a
some quarters, including the Opponents of proposed tar- Jennifer Kelly, director of the caravan of vehicles driving
March country’s largest automotive iffs also include the American UAW’s research department, around the capital.
WORLD NEWS
Envoy to Beijing
Feels the Heat
Bitter Harvest
Import tariffs in China, the top buyer of U.S. soybeans, will take a toll on farm states.
Soybean exports to China, millions of dollars, 2016 China’s share of U.S.
None soybean exports
3 50 100 500 1,000 2,000 70%
Wash. N.H. 60
Vt. Maine
Mont. N.D. Minn.
Ore. 50
Idaho S.D. Wis. N.Y. Mass.
Wyo. Mich.
Neb. Iowa Pa. 40
Nev. Ohio
Utah Ill. Ind. R.I.
Colo. W.Va.
Calif. Kan. Mo. Va. Conn. 30
Ky.
N.C. N.J.
Ariz. Okla. Tenn. Del. 20
N.M. Ark. S.C.
Md.
Miss. Ala. Ga.
Texas 10
La.
Fla. 0
Alaska
Hawaii 2000 2010
Sources: U.S. Department of Agriculture, Economic Research Service (state exports); Census Bureau (U.S. exports)
Kara Dapena/THE WALL STREET JOURNAL.
WORLD NEWS
utive branch will take Hungary ian government has two Russian authorities’ wish to
to court over the government’s months to respond to the com- AND VIVIAN SALAMA question certain U.S. citizens,
treatment of asylum seekers, mission’s concerns before it be- including Michael McFaul, a
escalating a battle over how to gins assessing whether Mr. Or- WASHINGTON—President former ambassador to Russia
balance the continent’s legal ban has breached EU rules. “We Donald Trump rejected a pro- under President Barack Obama
guarantees for refugees with are, of course, ready for the de- posal from Russian President and now a lecturer at Stanford
popular demand for tighter bates that this procedure is go- Vladimir Putin to allow Russian University.
borders. ing to bring,” said Hungarian investigators to question a As ambassador, Mr. McFaul
After nearly three years of Foreign Minister Peter Szijjarto. number of Americans, one day was an architect of Mr.
threatening legal action Among European leaders, after White House officials Obama’s attempted reset with
against Hungary for its strict Mr. Orban was early to surf a touched off a backlash on Capi- Moscow, but was sometimes
antimigrant laws, the European wave of anti-immigration senti- tol Hill by saying they were re- critical of the Kremlin, a pos-
Commission on Thursday said ment that has brought nation- viewing the idea. ture which brought intrusive
it would ask the EU’s highest alist parties to power in neigh- White House press secretary Russian media scrutiny and of-
courts to consider the govern- Hungarian Prime Minister Viktor Orban visited the Yad Vashem boring Austria and Slovenia. Sarah Sanders said in a state- ficial accusations that his mis-
ment in violation of several EU Holocaust Memorial museum in Jerusalem on Thursday. Indeed, in the short term, ment that Mr. Putin’s proposal, sion was to undermine the
treaties requiring protection the court case could empower broached at the summit meet- country’s leadership.
for foreigners seeking asylum ist politics of Prime Minister late the treaties Hungary Mr. Orban, some analysts said, ing in Helsinki on Monday, Secretary of State Mike
on the continent. Those courts Viktor Orban, who has cam- signed up to in 2003 when it by keeping public attention fo- “was made in sincerity by Pres- Pompeo, in an interview
have the power to fine Hun- paigned almost exclusively on voted overwhelmingly to join cused on his signature issue of ident Putin, but President Thursday with CBN News, was
gary for noncompliance. keeping out refugees since the EU. Since 2015, the com- policing the country’s border. Trump disagrees with it.” asked about the prospect of
The decision, conveyed in a 2015, when more than one mil- mission has asked Mr. Orban This year, Mr. Orban hopes Mr. Putin said he would be turning over U.S. citizens for
formal letter, likely leaves the lion people crossed into Eu- to modify his laws. to pass a constitutional willing to give the U.S. access to Russian interrogation. “Yeah.
European Court of Justice to rope from the Middle East and The legal battle has posed amendment that would block Russians, such as the 12 intelli- That’s not going to happen,”
rule on a fundamental debate Africa. He won a third consec- deep questions over the pur- the EU from enforcing refugee gence officials recently indicted Mr. Pompeo said.
cleaving Europe, with broad utive term in April. pose and future of Europe’s settlement rules here. in the U.S. election-meddling Mr. Trump’s willingness to
implications for how the bloc Mr. Orban has pursued ac- collective union, with govern- The violations the EU’s case, if the U.S. were willing to entertain the proposal from
settles differing notions of de- tions, such as detaining asy- ments in Poland and Slovakia commission cited Thursday fo- give Russia access to its targets. Mr. Putin sparked outrage on
mocracy and human rights. lum seekers for months in re- backing Mr. Orban’s hard-line cus on the militarized border A day earlier, Ms. Sanders Capitol Hill.
Hungarian voters have modeled shipping containers, stance. Mr. Orban’s critics say Mr. Orban has installed along confirmed that Messrs. Trump —Byron Tau
broadly endorsed the national- that the commission says vio- he is eroding the rule of law Hungary’s southern front. and Putin privately discussed contributed to this article.
White House press secretary commander of U.S. Central that relationship in a place
Sarah Sanders issued a state- Command, which is responsi- where we reduce the risk to
ment saying Mr. Trump had ble for the Middle East, said the United States from threats
declined Mr. Putin’s request. Thursday that he had “no new from Russia,” Mr. Pompeo said.
It was the third consecutive guidance as a result of Hel- “Given the controversy it’s
day of damage control for the sinki.” not surprising the White House
White House following Mr. Sen. Lindsey Graham, a is delaying the usual practice of
Trump’s one-on-one meeting South Carolina Republican and Vladimir Putin said the Helsinki briefing key administration of-
and joint news conference with a senior member of the Senate talks led to ‘useful promises.’ ficials and members of Con-
Mr. Putin in Helsinki Monday. Armed Services Committee, gress on the Putin meeting,”
On Tuesday, about 24 hours said Thursday that he had “no Mr. Trump’s performance, not said Elliott Abrams, who served
after his news conference, Mr. idea” if any agreements were to debrief them. as deputy national security ad-
Trump said he misspoke when reached between the two lead- One person who received viser under former Republican
he said he didn’t know of any ers. “I want to know,” Mr. Gra- such a call said the officials President George W. Bush. “But
reason why Russia would in- ham said. acknowledged that any devel- the grace period of a few days
trude on U.S. elections. On Democrats, voicing the opments the discussions may is over, and they need to get
Wednesday, he appeared to same frustration, called on Mr. have yielded were overshad- that information out.”
say he didn’t believe Russians Trump’s translator to testify owed by the public-relations Meanwhile, details of the
were trying to meddle in this before Congress, a request the challenge that followed the meeting began emerging
year’s midterm elections, Republican leadership rejected. joint news conference. Thursday from Russia. During
which would contradict the “It’s unconscionable if Some administration offi- the summit, Mr. Putin pro-
findings from intelligence agreements were reached that cials said the lack of an imme- posed holding a referendum to
agencies. Ms. Sanders said we don’t know what they are, diate briefing on Russia was, help resolve the conflict in
later that his remarks were that the president doesn’t tell in part, a result of Mr. eastern Ukraine, and agreed
misunderstood. us what they are,” said Rep. Trump’s top-down approach to not to disclose the plan so the
The fallout from the news Jerrold Nadler (D., N.Y.). “To dealing with Moscow. The re- U.S. president could consider
conference has so consumed hear from the Russians now lationship between the two it, according a person close to
the White House that the typi- that there were agreements governments at the staff level the Russian foreign ministry.
cal briefings that would follow reached and [the White House] has failed to progress in re- Bloomberg first reported on
such a meeting haven’t hap- tell us what those agreements cent years, these officials said, the possible referendum.
pened, according to officials were—it’s beyond imagination.” and the president has told ad- Asked about the referen-
familiar with the scheduling. Following the meetings in visers he wants to fix that by dum, a White House national
Officials said the delayed brief- Helsinki, Russia analysts at restoring diplomacy at the security spokesman said that
ings illustrate what can hap- various Washington-based presidential level. the U.S. position on Ukraine
pen when the president leaves think tanks received informal Secretary of State Mike remains unchanged.
private meetings without any phone calls from National Se- Pompeo is scheduled to meet —Peter Nicholas, Vivian
notes, giving Moscow the abil- curity Council officials seeking with senators next week, but Salama, and Thomas Grove
ity to set the agenda for what to gauge general reaction to some lawmakers are pressing contributed to this article.
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THE WALL STREET JOURNAL. Friday, July 20, 2018 | A9
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the country as a Jewish state, homeland for Jews. Mr. Plesner. Still, it could solidate his support as he bat-
a step supporters say en- Critics, including opposition “drive a wedge between the tles corruption allegations.
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said it was “deeply disap-
The legislation, approved nority populations. More than ties, tore up copies of the bill pointed” by the new law. The
early Thursday after hours of one-fifth of Israel’s nine mil- and tossed the scraps on the group said the demotion of
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valid on refurbished models. Only valid national home of the Jewish Parliament passed the law The group called on the clause regarding Jewish settle-
towards purchase of a NEW Acorn Stairlift people” and says only Jews by a vote of 62-55 after some government to focus on ment “put at risk the commit-
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ROC 278722, CA 942619, MN LC670698, also downgrades Arabic from called on the Supreme Court Jewish character. Jewish and democratic.”
OK 50110, OR CCB 198506, RI 88, WA an official language to a “spe- to look to Jewish tradition in Since Israel’s founding, Israel doesn’t have a consti-
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the Jewish people, that re- moved. treated as second-class citi- fined Israel as both Jewish
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UPGRADE
partnership.
Ties between the U.S. and
India have been expanding for
over a decade, as India has
shed a nonaligned foreign pol-
YOUR NETWORK:
icy in favor of closer trade and
security relations with the
world’s sole superpower after
the collapse of the Soviet
The U.S. and India were ex- “Indo-Pacific” command in a nity through the United Na-
pected to mark significant nod to India. The two countries tions.
REGISTER TODAY: DLIVE.WSJ.COM milestones this year, including
signing agreements to bolster
have expanded joint military
exercises and India has pur-
The U.S. and India have
sidestepped similar past run-
military cooperation and kick- chased more and bigger U.S.- ins, such as during the Obama
PROMO CODE: DLIVE1 ing off talks between high- made military hardware. They administration’s campaign to
level defense and foreign-af- are discussing a further expan- sanction Iran. The U.S. granted
fairs officials. Indian officials sion of military ties, including India, as well as several other
are holding out hope President ways to integrate some weap- countries, waivers from the
Donald Trump will agree to be ons systems together. sanctions for scaling back
the guest of honor at India’s The trouble is that even as dealings with Iran without
Republic Day celebration early U.S. and Indian officials move coming anywhere near elimi-
next year, taking Prime Minis- to get their high-level talks nating them.
ter Narendra Modi up on an Indian officials hope that
invitation to visit the country sort of compromise emerges
made when the two leaders again, but Trump administra-
met last year.
Ties between the U.S. tion officials last month an-
Then last month the U.S. and India have been nounced that no waivers
postponed, for the second would be granted.
time, the high-level defense
expanding for over a A significant part of India’s
and foreign-affairs dialogue as decade. security depends on maintain-
Secretary of State Mike ing and upgrading Russian-
Pompeo flew off to North Ko- made equipment, and it is
rea instead. poised to purchase a Russian-
While the meeting has been back on track, a major irritant made $5.8 billion air-defense
rescheduled for early Septem- is emerging: tightening sanc- missile system. Meanwhile,
ber, the delay set off hand- tions the U.S. has placed on Iran is India’s third-largest
wringing in New Delhi policy Russia and Iran, two countries supplier of oil.
© 2018 Dow Jones & Co., Inc. All rights reserved. 6DJ6360
circles about new tensions with which India has extensive “Sanctions are coming, and
over sanctions and trade, dealings it has no intention of we’re going forward on that.
which could cloud relations. ceasing. With India and the U.S. build-
India’s growing economic Indian officials refuse to ing strong relationships, we
heft, strategic location in Asia recognize as legitimate the hope they would lessen their
and shared democratic values U.S. sanction threats—made dependence on Iran and move
have put it at the center of under legislation known as the in other directions,” said U.S.
U.S. efforts to maintain a dom- Countering America’s Adver- Ambassador to the U.N. Nikki
inant role in Asia in the face saries Through Sanctions Haley after a meeting with Mr.
of Chinese economic and mili- Act—to punish those who do Modi recently in Delhi.
tary assertiveness. business with the two coun- “There’s a political will
The U.S. military recently tries. They say India recog- from both sides to figure out
renamed the Asia-Pacific re- nizes only sanctions imposed how to make this work,” she
gional operational area the by the international commu- said.
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THE WALL STREET JOURNAL. Friday, July 20, 2018 | A11
IN DEPTH
To GOP 1 2 3 4 5 6
The 20 Congressional districts with the highest share of manufacturing jobs, by election result
7 8 9 10 11 12 13 14 15 16 17 18 19 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
cording to David Autor, a Massa-
chusetts Institute of Technology
economist who studied how im-
Continued from Page One Republican Democratic district port competition affected politi-
gal immigrants to “any kind of district cal affiliation. What linked
vagrant or animal,” gets a 5% Counties where manufacturing is at least 25% of all jobs, by presidential election result groups on the left and right was
rating by the AFL-CIO and de- County went for George H.W. Bush County went for Bill Clinton County went for Donald Trump County went for Hillary Clinton skepticism of free trade.
rides the World Trade Organiza-
tion as a “globalist organization” 438 424 306 17
with too much power. Trade deal
“We’re in servitude” to Chi- These changes are evident in
nese bond buyers and other Ohio’s Eighth Congressional dis-
creditors, he told a constituent trict, long a Republican bastion
during a teleconference with in the Cincinnati suburbs.
voters in May. In 1992, the district was rep-
The Republican Party didn’t resented by Republican John
have a grand strategy to capture Boehner, the former House
manufacturing. It happened over speaker. He voted for the North
time as the economy and party American Free Trade Agree-
changed. ment, and helped pave the way
Many counties that leaned to- for the Trans-Pacific Partner-
ward Democrats lost so many ship, a trade deal among the U.S.
factory jobs during the past 25 and 11 Pacific-Rim nations that
years that they ceased being Mr. Trump pulled out of on his
manufacturing centers. first workday in office.
As the U.S. factory workforce From 1990, when Mr. Boehner
Source: U.S. Census Bureau; Brookings Institution (manufacturing); Dave Leip's Atlas of U.S. Presidential
diminished in size—from 15.4% Elections; University of Colorado Boulder’s Congressional District Data File (election results) Brian McGill/THE WALL STREET JOURNAL. was elected, to 2015, the per-
of the U.S. workforce in 1992 to centage of the workforce em-
8.5% today—it moved out of big Wayne Wright worked at the ployed in manufacturing in his
cities that were union strong- Greenwood Mills textile plant in district declined from 30% to
holds and into blue-collar sub- Greenwood, S.C. Below, GOP 21%. It moved up in the ranking
urbs. Rep. Warren Davidson spoke at of manufacturing intensive dis-
The Northeast and New Eng- Hartzell Propeller in Piqua, Ohio. tricts, from No. 27 to No. 12, be-
land, strongholds for Democrats, cause the country’s concentra-
largely disappeared from the whelmingly oppose free-trade tion of manufacturing workers
map of manufacturing-intensive deals, their voters don’t. By 57% declined even more. General Mo-
DANIELLE PAUL FOR THE WALL STREET JOURNAL
counties, according to an analy- to 16%, Democrats said that free tors Co. closed a nearby factory
sis for the Journal by the Brook- trade helped the U.S., according in 2008 that employed 2,400
ings Institution’s metropolitan to a February 2017 Wall Street people. NCR Corp. moved its
policy program. There are no Journal/NBC poll, the last one to headquarters out of the area in
manufacturing-intensive coun- address this issue. 2009.
ties any longer in Massachusetts Republicans, meanwhile, have Seven area golf courses, long
or Connecticut. become more attuned to the de- establishment Republican
Pittsburgh, another Demo- sires of manufacturers and their strongholds, have closed since
cratic bastion, shed its Steel City workers. They have led a crack- 2012. Without the GM plant,
heritage and became a univer- down on immigration, moved “there is no middle-level man-
sity and health-care center. Man- away from plans to privatize So- agement that can afford the dues
ufacturing jobs declined by cial Security and support some structure anymore,” said Steve
37,000 in the metropolitan area infrastructure spending. Most Jurick, executive director of the
since 1992, while the number of Declining Sector notably, the party has retreated Miami Valley Golf Association.
service-industries employees in- Manufacturing as a percentage from free trade. Mr. Boehner retired in 2015,
creased by 168,000. of all jobs In 1992, the Republican Party as the growing power of populist
platform declared the GOP the conservatives in the House made
16% party of “tough free traders” his caucus more difficult to man-
New heartland 14 who pushed an expansive “free age. His successor is Republican
The new manufacturing 12 2017 trade agenda.” In 2016, reflect- Warren Davidson, a member of
heartland runs through areas ing Mr. Trump’s presidential the Freedom Caucus that bedev-
ANDREW SPEAR FOR THE WALL STREET JOURNAL
8.5%
outside suburbs along interstate 10 candidacy, the platform said in- iled Mr. Boehner.
highways south from Michigan, 8 stead that the U.S. needed “bet- Though he has criticized
Minnesota and Wisconsin ter negotiated trade agreements
through Ohio and into the Caro- 6
that put America first.” The plat-
linas and the deep South. 4 form coupled “free trade” with
There, whites without a col- “fair trade,” a term that Rust
The shift in factory
2
lege education, who identified Belt Democrats have long used. towns will help shape
with the Republican Party’s fo- 0 In December 1999, the earli-
cus on social issues and abortion 1990 ’95 2000 ’05 ’10 ’15 est that The Wall Street Journal/
this year’s midterm
restrictions, took up many of the Source: Labor Department via the Federal NBC polled on trade issues, Re- elections.
factory jobs. The Trump admin- Reserve of St. Louis publicans by 37% to 31% said
istration’s tough stance on trade THE WALL STREET JOURNAL. that free trade deals helped the
deepened the bonds with work- U.S. By February 2017, the re-
ers who believed they were hurt Trump in 2016 by margins of owned business employed came from “linthead” families, sults were vastly different. By across-the-board tariffs, he has
by free-trade deals. more than 25 percentage points. around 3,000 people in the U.S. using the local term for textile 53% to 27%, Republicans said supported Mr. Trump’s tariffs on
“Manufacturing moved to Labor unions, which have in 2000, he says. Now that work- workers. “They all love Trump.” free trade hurt the U.S. Chinese goods. Like Mr. Trump,
where the Republican Party has long allied with Democrats, now force is just 320. The changing allegiances in Republicans need to hold on Mr. Davidson faults the WTO for
been building strength,” says represent just 9% of manufactur- As with many onetime Demo- factory towns have scrambled to their manufacturing base to failing to rein in China, whose
Jonathan Rodden, a Stanford ing workers, down from 20% in cratic manufacturing strong- politics for both Democrats and retain control of Congress. imports have battered the dis-
University political scientist, 1992, according to Barry Hirsch, holds, social issues played a role Republicans. The Democrats need to pick trict’s many small metal fabrica-
who studies the geography of an economist at Georgia State in the shift to red from blue. Voters for Democrats now up 23 seats to take control of the tion plants.
political change. University. Rep. Derrick supported the 1993 tend to be better educated, more House of Representatives. About At a meeting with local busi-
Other manufacturing areas “My image of Republicans is Brady Bill that mandated back- urban and less likely to identify 50 Congressional districts rated ness leaders in May, he likened
have flipped to vote for Republi- of a blue-collar type,” says Larry ground checks on firearms pur- themselves as blue-collar than competitive by political analysts trade to a basketball game.
cans. In 1992, there were 860 Smith, a 68-year-old weave chases. Angry gun owners Republicans and Independents, have manufacturing workforces “They are not calling fouls and
counties where at least 25% of room supervisor at Greenwood packed a town hall meeting in according to pollsters. higher than the national average. no one is taking free throws,” he
the working population was em- Mills Inc. in South Carolina’s Pickens, S.C. He did not run for As the economic core of met- In the Senate, Democrats need to told the group. “I’m glad Presi-
ployed in manufacturing. Demo- third Congressional District. He re-election in 1994. ropolitan areas has changed add two seats, and many big dent Trump is making them call
crat Bill Clinton won 49% of voted for Democrats before, in- Rep. Derrick, who died in from manufacturing to services, manufacturing states have Sen- fouls.”
those counties. By 2016, manu- cluding Barack Obama in 2008, 2014, was succeeded by a series finance and technology, the ate races this fall, including the The message goes over well
facturers employed at least a but sided with Mr. Trump in of Republicans, all of whom took party has made little room for states that won Mr. Trump the with factory owners and work-
quarter of the workforce in only 2016. “Democrats come from conservative positions on social the conservative cultural views White House—Michigan, Ohio, ers in the district.
320 counties. Ninety-five per- more financially successful issues and opposed the free of many blue-collar workers and Pennsylvania and Wisconsin. “A lot of our workers voted
cent of them went for Donald groups.” trade deals unpopular in the dis- has embraced gay rights and in- If President Trump’s aggres- for Trump,” says Neil Douglas, a
Trump. His boss, Jay Self, says a lot trict. “Down here, the Democrats creased immigration. The 2016 sive trade policy toward China, Democrat who is president of
In Wisconsin, five manufac- of local voters were turned off to shifted their attention to career Democratic platform, for in- the European Union and else- the International Association of
turing-intensive counties in the the Democratic Party when Bill people like in the medical indus- stance, had 19 mentions of rights where resonates, that could put Machinists and Aerospace Work-
northwest of the state have Clinton eased the entry of China try, accountant or lawyers,” for LGBT people. The 1992 plat- Republicans over the top in ers in Middletown, Ohio. “The
flipped from Democrats to Re- into the WTO in the late 1990s, Clemson University political sci- form had a single mention of the these places. If his tariffs—and Democrats around here—some-
publicans since 1992. Three of which he blames for wrecking entist David Woodard said. But word “gay.” retaliation—damage local econo- times we do feel like the party
those counties went for Mr. the textile business. His family- current factory workers, he said, While House Democrats over- mies, the GOP could find its left us.”
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A11A | Friday, July 20, 2018 NY * * THE WALL STREET JOURNAL.
FROM TOP: DREW ANGERER/GETTY IMAGES; ELIZABETH SHAFIROFF FOR THE WALL STREET JOURNAL
The blast erupted in the
Flatiron District at 6:39 a.m.,
emitting thick plumes of roar-
ing steam that rose at least 22
stories high. Grayish debris
blanketed nearby streets.
“All of a sudden I heard
‘Pow!’ ” Shella Eckhouse said.
“There was debris coming
down and steam flying. I was
covered in mud.”
Ms. Eckhouse, a Manhattan
resident who works at a jewelry
business, was riding a Citi Bike
to an exercise class in Chelsea
when the pipe exploded a few
feet away. She said she “ped-
aled so fast” to get away as
quickly as possible.
Within minutes she had
parked her Citi Bike, made her
way to the gym, toweled her-
self down and started class.
More than 100 firefighters
and medical personnel, as well
as 25 firetrucks, responded to A Manhattan blast sent plumes of steam rising into the air. Five people suffered minor injuries and more than 100 firefighters and medical personnel responded.
the scene. Five people suffered
minor injuries, the Fire De-
partment New York said. Flatiron Rupture ing a tow-truck driver who was violent interaction of steam and
Firefighters and police cor- severely burned by the scalding cooler water. Heavy rains the
doned off a four-block area Echoes 2007 Blast spray. One woman died after morning of the incident and a
around the site at Fifth Ave- suffering a heart attack. clog in the steam trap created
nue and 21st Street. Officials The explosion 11 years ago the extreme pressure inside the
said 49 commercial and resi- The steam-pipe explosion was the result of “an excessive 20-inch pipe, which had been
dential buildings in the area, that rocked the Flatiron District internal pressure from a water installed in 1924.
including 28 in the main on Thursday was a roaring re- hammer,” according to a De- Robert Vecchio, chief execu-
blast area, were evacuated, minder of a fatal blast that oc- cember 2007 report prepared tive of LPI Inc., a consulting
and residents wouldn’t be curred 11 years ago in Midtown. for Consolidated Edison and firm, is working with Consoli-
able to return for at least a The last major steam-pipe written by the ABSG Consult- dated Edison on Thursday’s
few days. rupture occurred on July 18, ing Inc. office in Stratham, N.H. blast, but declined to comment
Mayor Bill de Blasio said 2007, on a street near Grand A water hammer, investiga- on the cause. “The investigation
debris from the explosion Central Terminal. The explosion tors wrote, is a rapid pressure is just starting,” he said.
tested positive for asbestos injured dozens of people, includ- shock inside a pipe caused by —Melanie Grayce West
but air in the area was clean.
“There is real concern
about whether any debris en- son has set up decontamina- tors were still trying to deter- company, got off the subway thought that the solid sub- cause of the incident, accord-
tered into buildings or into tion stations where people can mine what caused the explo- at Union Square just before stance was ash and it was a ing to the Metropolitan Trans-
air-conditioning systems,” he drop off exposed clothing. sion. The steam pipe that 6:45 a.m. He noticed the steam fire, but it’s just gray and not portation Authority.
said after arriving at the The explosion left a large exploded was 20 inches in di- but thought it was coming ash,” Mr. Hinnant said. A shaken Ms. Eckhouse at-
scene. “So there is going to be crater on Fifth Avenue and ameter and installed in 1932, from a restaurant. When he He said two cars were “to- tended her exercise class after
thorough assessment to make 21st Street, and a smaller hole according to Con Edison. turned toward Fifth Avenue, tally covered in whatever is the explosion, but she was
sure that all the buildings are on Fifth Avenue and 20th A utility official said steam he saw a cloud plume and falling out of the thing.” somewhat philosophical about
clean and safe.” Street. Mr. de Blasio said Fifth pipes have no expiration dates heard the roar of steam. The blast disrupted the what occurred.
Those who were in the vi- Avenue between 19th and and age doesn’t necessarily “There’s a solid sort of sub- morning commutes of riders “It’s New York City,” she said.
cinity of the Manhattan blast 22nd streets likely would be play a factor when they fail. stance coming out of the cloud on the R and W subway lines. “Anything can happen anytime.”
were advised to bag their closed until the weekend. Ernest Hinnant, who works that’s sort of coating the Those trains bypassed 23rd —Charles Passy
clothing and shower. Con Edi- The mayor said investiga- in the area at a co-working ground. At first I honestly Street in both directions be- contributed to this article.
Garner Cop Will Face NYPD Trial High Bar for Charges
BY ZOLAN KANNO-YOUNGS
internal trial against Officer examining whether the foun- Cuomo, a Democrat, said that
Pantaleo, even though there is dation or its officers, including after the attorney general’s of-
no law saying the city had to do President Donald Trump, fice sued, the governor’s office
so. Officer Pantaleo has been broke state tax laws by trans- checked with the tax depart-
on modified duty since Mr. Gar- ferring assets or making mis- ment about the issue. It was
ner’s death on July 17, 2014. representations to the state unclear whether the tax de-
On Monday, the eve of the that might affect tax liability, partment began investigating
fourth anniversary of Mr. Gar- the official said. before or after the attorney
ner’s death, the NYPD issued The state tax department general’s office filed its suit.
an ultimatum to the Justice Gwen Carr wore a shirt with the image of her son Eric Garner on the fourth anniversary of his death. could issue a criminal referral Legal experts say charging
Department, vowing to move to either the New York state
forward if federal investiga- ner in a chokehold, a move London, the attorney for Offi- vestigation into Mr. Garner’s attorney general’s office or the
tors didn’t announce criminal banned by the NYPD in 1993. cer Pantaleo, will then have death opened in December Manhattan district attorney’s
charges by the end of August. The chokehold was captured time for discovery. A trial date 2014 after a state grand jury office, the official said. The of-
The investigation
Two days later, the Justice on cellphone video, and Mr. at the NYPD’s headquarters declined to indict the officer. fice that got the referral would could result in a
Department informed Law- Garner’s death prompted mass hasn’t been determined. The Justice Department de- decide whether to prosecute.
rence Byrne, the NYPD deputy protests in New York City and Mr. London on Thursday clined to comment on Thursday. A spokesman for the tax de-
criminal referral to a
commissioner of legal matters, around the U.S. over police use told The Wall Street Journal: The federal case remains in partment declined to com- prosecutor’s office.
that the police department of force on unarmed black “We’re looking forward to be- legal limbo. Federal civil-rights ment. A spokeswoman for the
could start its process. The men. New York City’s medical ing vindicated in trial.” prosecutors earlier this year rec- Trump Organization, Mr.
trial against the officer and a examiner said the chokehold An NYPD-employed adminis- ommended bringing charges Trump’s flagship holding com-
separate trial against his ser- contributed to the death of Mr. trative trial judge would decide against the officer, but it was pany, didn’t respond to a re- tax crimes, such as fraud, car-
geant, aren’t criminal proceed- Garner and ruled it a homicide. Officer Pantaleo’s case and unclear at the time if top Justice quest for comment; neither ries a high bar because prose-
ings. Possible punishments in- The process of holding a could recommend disciplinary Department officials would be did a lawyer representing the cutors must prove that a de-
clude a loss of vacation days disciplinary trial for Officer action. Police Commissioner willing to move ahead with a Trump Foundation. fendant intended to deceive or
and termination from the force. Pantaleo will begin with the James O’Neill would have a fi- case, people familiar with the The investigation, and the commit wrongdoing. “It’s not
Mr. Garner, who was 43 years NYPD serving him excessive- nal decision on any punishment. matter said at the time. Prosecu- possibility of a criminal refer- enough that you failed to pay
old, died after plainclothes offi- force charges recommended Sgt. Adonis will face tors made the recommendation ral, could complicate a pend- your taxes,” said Harry Sand-
cers, including Officer Pantaleo, by the city’s Civilian Com- charges of failure to supervise, to Deputy Attorney General Rod ing civil case brought by the ick, a former Manhattan fed-
moved to arrest him on a Staten plaint Review Board, which in- Mr. Byrne said previously. The Rosenstein, who must weigh in office of New York state Attor- eral prosecutor. “It isn’t even
Island street for allegedly selling vestigates complaints against Sergeants Benevolent Associa- on whether to allow them to ney General Barbara Under- enough that you filled out the
loose cigarettes. When Mr. Gar- officers. The CCRB will serve tion didn’t respond to requests move forward with the case. wood. In June, her office sued forms incorrectly. You have to
ner refused to be handcuffed, as the prosecution in the trial. for comment. —Lara Korte the Trump Foundation, alleg- do this with an intent to en-
Officer Pantaleo placed Mr. Gar- Both the CCRB and Stuart The Justice Department in- contributed to this article. ing the president used the gage in criminal activity.”
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THE WALL STREET JOURNAL. * * NY Friday, July 20, 2018 | A11B
AMPLIFICATIONS
up to $49 million, is hardly years of experience, is a a record year, with ticket sales vestors, money isn’t the only
the only entity of its kind. A smaller fund that concentrates of $1.7 billion and attendance consideration. Just as impor-
1.0
handful of investment vehi- on a handful of shows at a of 13.8 million. tant is the opportunity to be a
cles, created by others within time. So far, Ms. Waxman has A pooled investment offers a part of the scene. Investors in
The most recent draft of the theater and financial created two iterations of the chance to partake of the boom individual shows can attend
0.5
the Metropolitan Transporta- worlds, essentially do the fund, one that was capped at while minimizing the risk, the- events ranging from early stage
tion Authority capital budget same thing in terms of putting $500,000 and another that atrical and financial profes- readings to opening nights.
allocates $1.4 billion for 535 money into multiple shows, was capped at $1.5 million. sionals generally agree. And But that may not be true
0
new subway cars. An article Broadway and off-Broadway, She is now seeking inves- that risk is high. Experts say at for investors in a fund because
Thursday about a report from at once. tors for a third iteration that least two-thirds of Broadway 2009 ’11 ’13 ’15 ’17 there isn’t as direct a connec-
the nonpartisan Citizens Bud- Each investment is struc- would be capped at $3 million shows end up in the red. YEARS SHOWN BY SEASON ENDING tion, said Ryan Stana, chief ex-
get Commission incorrectly tured somewhat differently. and has a minimum invest- That doesn’t mean the Source: The Broadway League ecutive officer of RWS Enter-
said it allocated $1.7 billion for The Broadway Strategic Re- ment of $50,000. model is perfect. Just as a few THE WALL STREET JOURNAL. tainment Group, a New York-
450 new cars. turn Fund, launched in 2016, is The cost of producing bad stocks can bring down based company that
an open-ended fund that Broadway shows, especially even a fairly diversified mu- man said the first iteration of specializes in theater and live
Readers can alert The Wall Street spreads its money—so far, just musicals, has increased con- tual fund, the same is true in a her Alexis Fund was hurt by events. “When you’re part of a
Journal to any errors in news articles
by emailing wsjcontact@wsj.com or more than $10 million—among siderably during the past de- pooled theatrical investment. an investment in the failed fund, you’re losing the glam-
by calling 888-410-2667. an array of titles. Currently, it cade, say theatrical profes- A case in point: Ms. Wax- musical “Tuck Everlasting,” our,” Mr. Stana said.
InspiredByPenta.com
LIFE&ARTS
TELEVISION REVIEW
By John Anderson
A Town of
Many
Miseries
AT LEAST TWO constituencies will be
pleased by the arrival of “Castle Rock,”
Hulu’s latest entry into the overcrowded
field of horror-accented series. One is the
fan base of Stephen King, whose locales of
choice—Maine, specifically the town of
Castle Rock and, here, a prison called
Shawshank—provide the backdrop for the
10-part premiere season of what’s in-
tended as an open-ended anthology series.
The other happy group will be the
fans of André Holland, whose perfor-
mances in “Moonlight” and “The Knick”
have established him as one of the more
convincing and watchable actors on
screen. Here he plays Henry Matthew
Deaver—remember that name—an appel-
Top Pop
Castle Rock, where Henry’s adoptive
mother, Ruth (Sissy Spacek), is succumb-
ing to dementia; where the just-retired
prison warden (Terry O’Quinn) has just
driven off a cliff with a noose around his
neck; and where, back in 1991, Henry dis-
appeared for 11 days and turned up not
saying—or perhaps not knowing—where
he’d been. His father died in the process.
ABBA hits, extravagant settings and high-energy performances tell a family story with feeling
Henry’s always been blamed.
Mr. King (serving only as an executive
producer here) often creates horror rooted AH, SWEET(ISH) surrender…there’s Jessica Keenan Wynn, Lily James
in the everyday—ghoulish phenomena simply no defense against “Mamma and Alexa Davies, above, and Julie
arising from mundane circumstances. Mia! Here We Go Again,” with its Walters and Amanda Seyfried, left
“Castle Rock” dutifully reflects this. And bright colors, brighter smiles, exuber-
while previous adaptations of his writing ant music, merry villagers and moist
have included some dauntingly impressive radiance. Yes, the glee is industrial- “Mamma Mia! Here We Go Again”
work (“The Shining”), “Castle Rock” rises strength, and the ABBA-fueled pro- goes in for all sorts of magnifica-
to the occasion; some of its creepier mo- duction numbers are so far over the tion—outsize performances, senti-
ments have one wishing it were on a big top that the film is at once topless ments, costumes and settings.
screen, the better for skin to crawl. and chaste. Yet there’s a wellspring of (When Bill and Harry show up at
Mr. Holland gives an appropriately lay- genuine feeling in this time-hopping the island for the hotel’s grand re-
ered portrayal of an off-balance charac- sequel, framed as an origin story. opening, they arrive with a flotilla
ter. Likewise Melanie Lynskey, whose In the first film, which opened 10 of boats that suggests some alt-
Molly Strand, a childhood friend of years ago, Meryl Streep was the un- world Dunkirk.) What’s notable
Henry’s, is both an empathic clairvoyant quenchable Donna Sheridan, a for- about the broadness, though, is
and an opioid addict. mer rocker and the owner of a hotel that it stays clear of grandiosity.
The social commentary is never over- on an idyllic Greek island. Amanda That’s a tribute to the skill and
done, but it’s there—from the oxycontin Seyfried was her daughter, Sophie, confidence of the writer-director,
plague to the privatization of prisons. about to be married and determined Ol Parker. The original production
Shawshank, it should be noted, has gone to find the identity of her father. was extremely likable, but far from
corporate, which leads to the arrival of a Now the adult Donna is out of the expert. Nor was it considered fash-
new warden (the delightfully poisonous picture—though not entirely, as the ionable—I took a lot of teasing for
Ann Cusack), who looks around her new trailers reveal—and Ms. Seyfried’s Sophie, chosen to give the valedictory address at my positive review—while this new one may
digs and mutters, “If this were my office about to have a baby (and to reopen the ho- her graduation from Oxford, bursts into be- be welcomed for being so upbeat about life at
I’d kill myself, too.” She’s so deliciously tel), wants to understand the beloved witching dance and song in a rendition of a time when we need all the legal high spirits
awful she’ll fit right in. mother who brought her into the world. “When I Kissed the Teacher,” accompanied we can get.
Powered by that potent pretext, the story by Tanya and Rosie, who are played as I’ve waited until now to talk about an ap-
Castle Rock shuttles between Sophie’s present and a young women by Jessica Keenan Wynn and parition that the film saves for almost-last:
Begins Wednesday, Hulu long-ago in which Donna, a free and buoyant Alexa Davies. (Jeremy Irvine, Hugh Skinner the arrival, on the storybook island, of Cher
spirit, is played by Lily James. Dominic Coo- and Josh Dylan are dreamboat-charming as in the role of Ruby Sheridan, a hitherto un-
per is, once again, Sophie’s heartthrob, Sky. Donna’s boyfriends, the very same Sam, seen and conspicuously uninvited denizen of
Christine Baranski and Julie Walters are Harry and Bill.) Las Vegas who is Donna’s mother and So-
back as Donna’s old friends and former Dy- Ms. James, like Ms. Seyfried, sings in a phie’s grandmother. If you stop to think
namos band mates, Tanya and Rosie. So are modest and mostly endearing voice that’s about it, Cher is only three years older than
Pierce Brosnan, Colin Firth and Stellan closer to the style of “The Umbrellas of Cher- Meryl Streep, so Ruby would have been un-
Skarsgård as her old boyfriends, Sam, Harry bourg” than to the tradition of Broadway usually precocious in the child-bearing de-
and Bill, any one of whom might have fa- belters. She makes Donna a joy, if occasion- partment. But no one will stop to think
thered Sophie, and all of whom help Sophie ally an overjoy; sometimes you wonder about it when Cher, clad goddess-like in
evoke her mother’s past. (As for solving the whether the movie’s young heroine will ever white with platinum hair, descends from her
paternity mystery once and for all, I’ll say stop smiling. She does, though—beauty is no helicopter to join a climactic party in prog-
only that in the course of the new film no defense against pain—and you are hereby ress. She speaks slowly, as if from another
DNA tests are administered.) challenged to remain unmoved when the film planet, and when she sings and dances to
The “Here We Go Again” part of the title, juxtaposes the birth of Sophie’s child with So- “Fernando” with Andy Garcia’s Fernando,
which deftly invokes the ABBA song, might phie being born to a flower child living alone who manages the hotel, fireworks fill the
also have served as a confessional comment on rocky soil in a faraway place. sky as they have not since Katharine Hep-
on Hollywood’s all-pervasive sequelitis, but In one of a string of romantic scenes, the burn kissed Rossano Brazzi on a Venice bal-
HULU
there’s no sense of weariness here. The en- moon floats so large above the Aegean that it cony in “Summertime.” Restraint is for the
Bill Skarsgård in Hulu’s ‘Castle Rock’ ergy level is set from the start when Donna, seems to have continents instead of craters. faint of heart.
in 2016, in which he used six differ- ana Maslany, Kellie Overbey and band are going to get a divorce, is
ent women (and a doll) to portray a Susan Pourfar) appear in 10 of the immediately followed by a scene
seemingly ordinary Ohio accountant 11 vignette-like scenes in which in which she is portrayed as a 19-
whose life is a scrapbook of what it Mary Page is seen as a baby and Please turn to page A13 Kayli Carter, Ryan Foust and Susan Pourfar in Tracy Letts’s play
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THE WALL STREET JOURNAL. * * * * * Friday, July 20, 2018 | A13
INQUIRIES
19TH CENTURY Madalina Lazen
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Gary Wilmes and Tatiana Maslany in the play about an accountant in the Midwest
does time for drunken driv- woman, all of whom look tteachout@wsj.com.
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A14 | Friday, July 20, 2018 THE WALL STREET JOURNAL.
SPORTS
BRITISH OPEN
EVEN-PAR
START FOR
WOODS
BY BRIAN COSTA
Carnoustie, Scotland
Tiger Woods showed up for his
first British Open in three years on
Thursday with a strip of therapeu-
tic tape across the back of his
neck. And it was easy then to
imagine how the day could turn
out like so many others for him in
recent years: another injury—this
time a sore neck—standing be-
tween him and good golf or any
about the noisy throngs on moun- pumping. You can look at their American team that has lost its Drinking continues apace.
taintop finishes. On one hand, it’s a eyes and see exhausted souls. leader and yellow jersey hopeful, After four days in France, I feel
spectacular sight: hundreds of Elsewhere, however, there is idi- Rigoberto Uran, to injuries from a like a human croissant. Beyond the
thousands of fans, lining a climb to ocy. I will learn later that some crash. Early on, his teammate Alps come the Pyrenees. There are
cheer, literally arm’s length—or dingbat down the mountain put a Pierre Rolland attempts a valiant nine stages left before the finish in
less—from the best riders in the menacing hand on Froome—a true solo attack, only to get swept up Paris.
world. There’s nothing like it in no-no—and that a race motorbike by the leaders. It’s beautiful madness. And now,
Tiger Woods shot a 71 on Thursday. sports. operator, riding into a cloud of One silver lining for EF is the wine.
R E N T S B E T T E B I N
Minneapolis 76 65 sh 82 65 pc Brussels 79 60 pc 78 60 pc Tokyo 92 81 pc 91 82 s A N D R E A N E O P H Y T E
by 11:59 p.m. Eastern Time Sunday, July 22. A solver selected at random A T TWO R H E A
Nashville 89 73 t 89 71 t Buenos Aires 52 38 c 55 39 pc Toronto 85 71 pc 81 68 pc
New Orleans 96 80 t 96 81 pc Dubai 104 89 s 107 91 s Vancouver 70 53 s 72 57 pc will win a WSJ mug. Last week’s winner: Nate Lindsay, Dallas, TX. A C I D K I S S Y A N T I
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THE WALL STREET JOURNAL. Friday, July 20, 2018 | A15
OPINION
Brennan and the 2016 Spy Scandal BOOKSHELF | BY Heller McAlpin
The Trump-
R u s s i a
sleuthers have
Brennan. Before his nomina-
tion as CIA director, he served
as a close Obama adviser. And
sponsible for the hack, or as-
cribe motivation. Mr. Brennan
also couldn’t get the FBI to
tained in the infamous Steele
dossier, insisting that the FBI
use “every resource available
Deer Isle
been back in
the news,
again giving
the record shows he went on
to use his position—as head of
the most powerful spy agency
sign on to the view; the bureau
continued to believe Russian
cyberattacks were aimed at
to investigate this matter.”
The Reid letter marked the
first official blast of the Bren-
In Twilight
POTOMAC A m e r i c a n s in the world—to assist Hillary disrupting the U.S. political nan-Clinton collusion narrative
WATCH cause to doubt
their claims of
Clinton’s campaign (and keep
his job).
system generally, not aiding
Mr. Trump.
into the open. Clinton opposi-
tion-research firm Fusion GPS
The Last Lobster
By Kimberley
nonpartisan- Mr. Brennan has taken The CIA director couldn’t followed up by briefing its me- By Christopher White
A. Strassel
ship. Last credit for launching the Trump himself go public with his Clin- dia allies about the dossier it (St. Martin’s, 240 pages, $26.99)
W
week it was investigation. At a House Intel- ton spin—he lacked the sup- had dropped off at the FBI. On
Federal Bureau of Investigation ligence Committee hearing in port of the intelligence com- Sept. 23, Yahoo News’s Mi- ith its alarming title and troubling statistics, “The
agent Peter Strzok testifying to May 2017, he explained that he munity and had to be careful chael Isikoff ran the headline: Last Lobster,” Christopher White’s deep dive into
Congress that he harbored no became “aware of intelligence “U.S. intel officials probe ties the $1.7 billion Maine lobster industry, blares
bias against a president he still and information about con- between Trump adviser and foghorn warnings about a business and a culture under
describes as “horrible” and tacts between Russian officials Obama’s CIA director Kremlin.” Voilà. Not only was threat. As in Paul Greenberg’s 2010 book, “Four Fish: The
“disgusting.” This week it was and U.S. persons.” The CIA the collusion narrative out Future of the Last Wild Food,” one culprit is overfishing. But
former FBI Director Jim Comey can’t investigate U.S. citizens, acknowledges egging there, but so was evidence Mr. White’s ambitious book—as stuffed with facts as Lobster
tweet-lecturing Americans on but he made sure that “every on the FBI’s probe that the FBI was investigating. Thermidor is stuffed with claw meat and cream—also
their duty to vote Democratic information and bit of intelli- In their recent book “Rus- addresses climate change, supply and demand, and inter-
in November. gence” was “shared with the of Trump and Russia. sian Roulette,” Mr. Isikoff and national trade. Above all, it offers vivid, well-observed
But the man who deserves bureau,” meaning the FBI. This David Corn say even Mr. Reid portraits of people directly affected by lobster’s recent
a belated bit of scrutiny is information, he said, “served believed Mr. Brennan had an boom-and-bust cycles.
former Central Intelligence as the basis for the FBI investi- not to be seen interfering in “ulterior motive” with the A journalistic Ahab, Mr. White tenaciously chases his
Agency Director John Bren- gation.” My sources suggest U.S. politics. So what to do? briefing, and “concluded the whale of a story over the course of four years. He sets up
nan. He’s accused President Mr. Brennan was overstating He called Harry Reid. In a late CIA chief believed the public base camp in Stonington, Maine, a not-yet-gentrified Mid-
Trump of “venality, moral tur- his initial role, but either way, August briefing, he told the needed to know about the Rus- Coast lobster village on Deer Isle, which sits in the Gulf of
pitude and political corrup- by his own testimony, he as an Senate minority leader that sia operation, including the in- Maine between Penobscot and Jericho Bays. Stonington’s
tion,” and berated GOP inves- Obama-Clinton partisan was Russia was trying to help Mr. formation about the possible year-round population of 1,200
tigations of the FBI. This week pushing information to the FBI Trump win the election, and links to the Trump campaign.” includes 350 lobster captains,
he claimed on Twitter that and pressuring it to act. that Trump advisers might be (Brennan allies have denied 450 sternmen, and dozens of
Mr. Trump’s press conference More notable, Mr. Brennan colluding with Russia. (Two his aim was to leak damaging dealers, dockworkers and seafood
in Helsinki was “nothing short then took the lead on shaping years later, no public evidence information.) restaurant workers. “In other
of treasonous.” This is rough the narrative that Russia was has emerged to support such a Clinton supporters have a words,” Mr. White writes, “nearly
stuff, even for an Obama par- interfering in the election spe- claim.) plausible case that Mr. three-quarters of the residents
tisan. cifically to help Mr. Trump— But the truth was irrele- Comey’s late-October an- actively work in the industry. The
That’s what Mr. Brennan which quickly evolved into the vant. On cue, within a few days nouncement that the FBI had remainder are relatives. The town
is—a partisan—and it is why Trump-collusion narrative. of the briefing, Mr. Reid wrote reopened its investigation into has a singular purpose; it stands
his role in the 2016 scandal is Team Clinton was eager to a letter to Mr. Comey, which of the candidate affected the for something—getting lobsters
in some ways more concerning make the claim, especially in course immediately became election. But Trump support- from the ocean floor to the family
than the FBI’s. Mr. Comey light of the Democratic Na- public. “The evidence of a di- ers have a claim that the pub- table, sustainably.”
stands accused of flouting the tional Committee server hack. rect connection between the lic outing of the collusion nar- Stonington’s population doubles
rules, breaking the chain of Numerous reports show Mr. Russian government and Don- rative and FBI investigation in summer with vacationers, but
command, abusing investiga- Brennan aggressively pushing ald Trump’s presidential cam- took a toll on their candidate. Mr. White is interested in the locals,
tory powers. Yet it seems far the same line internally. Their paign continues to mount,” Politics was at the center of and he gets to know many of them as he
likelier that the FBI’s Trump problem was that as of July wrote Mr. Reid, going on to that outing, and Mr. Brennan traces the lobster’s path from sea to market.
investigation was a function of 2016 even then-Director of Na- float Team Clinton’s Russians- was a ringmaster. Remember Snatches of dry Maine humor provide welcome respite from
arrogance and overconfidence tional Intelligence James Clap- are-helping-Trump theory. Mr. that when reading his next a deluge of eye-opening but sometimes repetitive or
than some partisan plot. No per didn’t buy it. He publicly Reid publicly divulged at least “treason” tweet. conflicting numbers (including the year-round head count,
such case can be made for Mr. refused to say who was re- one of the allegations con- Write to kim@wsj.com. variously reported as 1,100 or 1,200).
In pursuit of his story, Mr. White rises before dawn and
heads out to Jericho Bay with Capt. Frank Gotwals and his
The Pastor Caught in Turkey’s Chaos sternman, Alyssa LaPointe, on the Seasong, a 38-foot wooden
boat that Capt. Gotwals built with his own hands. Despite
working without a chart, the captain easily locates his 750
HOUSES OF Izmir, questioning the pastor’s arrest, as they had previously said Mr. Trump’s tweet wasn’t traps scattered around the islands, which he checks for
WORSHIP Turkey but Turkey denied the deten- only prosecution witnesses the first plea for Mr. Brunson’s sweet, summertime shedders—newly molted adult lobsters.
By Kristina President tion had anything to do with could testify. The judges aided freedom. The White House, the Mr. White remarks that Capt. Gotwals, an avid lobsterman,
Arriaga T r u m p his Christianity. Yet in the 62- the prosecution witnesses’ rec- secretary of state and several gardener, and celebrated Maine songwriter and guitarist in
tweeted page indictment, which the ollections by reminding them senators have worked for his his 60s, “may be the most content man in America.”
Wednesday prosecution leaked to the press of their written testimony. release. Last month Sens. Lind- Six hundred lobsters are a modest day’s catch. Mr. White
evening: “A total disgrace that before presenting it to Mr. When a judge asked one of the sey Graham and Jeanne Sha- describes the many steps involved in their harvest, including
Turkey will not release a re- Brunson’s lawyer, the govern- witnesses about the names of heen visited Mr. Erdogan and spotting and hooking the captain’s distinctively colored buoys,
spected U.S. Pastor, Andrew ment alleges that his pastoring people involved in activities asked him to free the pastor. hauling up traps from the ocean floor, measuring the catch
Brunson, from prison. He has had the effect of “dividing and against Turkey, the witness re- The Senate version of the Na- and throwing back undersized and female lobsters. Claws are
been held hostage far too separating [Turkey], by means plied that while he didn’t re- tional Defense Authorization banded before placing the keepers in saltwater tanks, and
long.” He called on Turkish of Christianization.” The gov- member now, he might remem- Act calls for the U.S. govern- traps baited with fresh herring before they’re reset. Mr. White
President Recep Tayyip Erdo- ernment also alleged that Gül- ber later. The judge accepted ment not to sell F-35 jets to captures the hard work, intense concentration and banter.
gan to free the North Carolina enists and the PKK “misuse this reply. Turkey unless Mr. Brunson is
native, who has spent more persons’ religious beliefs and released. The United Nations
than 600 days behind bars. try to create a synergy that Working Group on Arbitrary A $1.7 billion industry, and an age-old way of
Mr. Brunson, a Presbyterian poses a threat to their own Andrew Brunson Detention recently agreed to American life, is threatened by overfishing,
minister, stands accused of aid- government.” take the case. Yet Turkey, a
ing the Kurdistan Workers’ Since the indictment, the preached peacefully North Atlantic Treaty Organi- warming waters and international trade wars.
Party, a militant terrorist government has held three for decades. Then zation ally, won’t budge.
group known by the initials hearings—each more bizarre Ankara responded to the
PKK, and supporting Mr. Erdo- than the last. Most of the evi- the coup happened. president’s tweet, claiming The author also gets to know Julie Eaton, captain of the
gan’s exiled rival, Fethullah dence is based on secret testi- that the “Brunson case is a le- Cat Sass, and Sid Eaton, captain of the Kimberly Belle, a
Gülen. The prosecution is call- mony obtained by the govern- gal process” and “Turkey is a couple whose marriage runs on laughter and competition.
ing for 35 years in prison. For ment. Wednesday’s hearing in For two hours the pastor state of law.” This simply isn’t Together, in a boom year, they make $250,000 during their
the 50-year-old American, who Izmir, which I attended, proved sat straight, serenely listening true. Since the coup attempt, 16-week season, which runs from July through October. Julie,
has spent 23 years leading a as preposterous as the others. to people claiming to be mem- Mr. Erdogan has initiated a whose preferred title is lobsterman, is one of the rising
church in Turkey, that’s effec- Three judges sat on a raised bers of his church, saying he rapid crackdown on civil liber- number of female captains and crew—though women still
tively a life sentence. wood-paneled dais. At a lower provided Bibles in Kurdish ties, religious freedom among account for only 4% of Maine’s commercial lobster licenses.
The ordeal started in Octo- level, Mr. Brunson’s attorney and kept a map of Kurdistan. them. Turkey’s Constitution Mr. White is lucky enough to witness a “wicked awesome”
ber 2016. Mr. Brunson received stood behind a fixed podium. None of the judges asked to provides for freedom of belief boom, when Maine’s annual lobster harvest tops 130 million
a notice to appear at the local Witnesses were placed across see evidence, and none was and worship, along with the pounds—six times the average haul during the 1980s. With
police station in Izmir. He did from the attorney. Sitting on a presented. personal right to share reli- lobstermen making as much as $200,000, they’re riding
and hasn’t been home since. row of fixed chairs sat Mr. At noon, a judge asked Mr. gious ideas. high—but they know it can’t last. Even amid the bounty,
After 13 days in detention, au- Brunson, who has lost 50 Brunson to speak. He replied in But as Mr. Brunson’s case there are worrisome price and cost fluctuations due to an
thorities placed him in an over- pounds while imprisoned. Be- Turkish: “My faith teaches me shows, religious freedom has oversupply of lobsters and a shortage of herring bait.
crowded prison cell, where he hind him, among hundreds of to forgive. I forgive those who become a nominal right in Tur- Mr. White explains how the biggest threat to this bustling
stayed for several months be- empty chairs, five policemen testified against me.” The judge key. Such a blatant contradic- industry is also part of the reason for the boom: climate
fore he was moved to a more idled. On the opposite side of loudly objected to this mention tion between Turkey’s Consti- change. Optimal water temperature for lobsters is between 53
humane cell with only one the court, Mr. Brunson’s wife of faith and admonished Mr. tution and its conduct should and 64 degrees Fahrenheit. As oceans heat up, lobsters move
roommate. He spent more than watched quietly. She was sur- Brunson to speak on the facts give pause to anyone consider- north in search of cooler waters. This has occurred at a rate of
a year without being charged. rounded by fellow Christian only. The pastor added later: ing traveling to or doing busi- 3 to 4.3 miles per year, which has added up to a northward
Meantime, the government- pastors, friends, foreign and lo- “None of the witnesses heard ness in Turkey. shift of 215 miles in the last 50 years. A dearth of predators—
controlled press ran absurd ac- cal press, and U.S. diplomatic from my mouth a word that including overfished cod—has also contributed to the recent
counts about his supposed in- officers. was sympathetic with the Ms. Arriaga is vice chair- lobster boom. “Lobster bottom is like a stadium full of
volvement in the 2016 coup The judges allowed a single PKK.” At the end, a judge an- woman of the U.S. Commission Christians and no lions in sight,” one captain comments.
attempt against Mr. Erdogan. witness for the defense to nounced the next hearing on International Religious “Migrating lobsters are as clear a symbol of climate
American officials started speak. This was a “concession,” would take place in October. Freedom. change as are the melting glaciers of Montana,” Mr. White
writes. But at the present rate, he notes, by sometime
between 2036 and 2046, “the majority of ‘American’ lobsters
Pipeline Builders Abuse Eminent Domain might reside in Canada.” (In the epilogue, Mr. White reports
that the long-expected slump hit Maine lobstermen hard in
2017, with a 16.4% decline in yield.)
By Robert McNamara such rulings. Right now FERC from judicial review. haved this way, federal courts This brings up another issue: trade. Chinese demand
And David Bookbinder presides over a system that Furthermore, FERC’s ap- have deemed it unconstitu- accounts for about 10% of all Maine lobster exports. In addition,
A
strips property owners of their proval comes with eminent do- tional. Yet FERC continues to 60% of Maine lobsters are trucked to Canada for processing.
cross the country activ- rights without courts getting main authority, allowing pipe- harm eminent-domain victims “The Last Lobster” was printed before the current escalating
ists are speaking out involved. line companies to seize by failing to inform them how trade wars, whose economic repercussions could be calamitous.
against the use of emi- When FERC approves the property before seeking other to protect their rights. This is not the first time Mr. White has written about the
nent domain to construct nat- use of eminent domain to necessary approvals. In one in- No one’s property should be dire effects of climate change. Previous books include “The
ural-gas pipelines. Some have build a pipeline, landowners stance, a company seized part taken without a real chance at Melting World: A Journey Across America’s Vanishing
climbed trees and refused to have the right to appeal to a of a Pennsylvania family’s judicial review. Property own- Glaciers” and “Skipjack: The Story of America’s Last Sailing
come down. The agency in federal court only after they property to build a FERC-au- ers who go to court don’t al- Oystermen.” But in “The Last Lobster,” he addresses the
charge of approving these thorized pipeline only to have ways win, but some do. Prop- impact of the environment on one of America’s signature
pipelines—the Federal Energy the project fall apart when of- erty owners in both fisheries with a greater sense of urgency. He untangles the
Regulatory Commission, or How FERC denies ficials in New York refused to Pennsylvania and Texas have complex economics of the lobster industry with admirable
FERC—is reconsidering how landowners the right grant a permit to build an- persuaded state judges to re- clarity, though a more streamlined, less repetitive magazine
eminent domain, by which the other part of the pipeline. The ject pipeline-related property article might have been even more compelling. Even so, his
government legally expropri- to meaningful appeal. taking, which also involved seizures in recent years. Per- book makes a passionate, convincing case for the need for
ates private property for pub- cutting down more than 500 haps property owners who’ve careful marine management, and, through his chorus of
lic purposes, is used. of the family’s trees, was ulti- been subject to eminent do- lobstermen’s voices, makes it in human terms.
While we stand with those have asked the agency to re- mately for nothing. main expropriations by FERC-
who stand for individual consider its decision and had As rotten as these proce- approved pipelines would find Ms. McAlpin reviews books regularly for NPR, the
rights—and enjoy a good tree- their request denied. But FERC dural shenanigans are, FERC is similar success. The agency Washington Post and the Los Angeles Times.
climb—protests like these can has developed the habit of guilty of a more consequential should afford them the chance
only go so far. The U.S. is a granting these requests so deception. Under current law, to find out.
country of laws, and if a court that it can draw out the time it the agency can approve a pipe- Coming in BOOKS this weekend
rules that eminent domain can spends “thinking” about them. line without telling property Mr. McNamara is a senior Rocky Marciano’s fight for perfection • On the Colorado
be used to construct a pipe- While FERC dawdles, the pipe- owners that decisions will be attorney with the Institute for with John Wesley Powell • The Flying Tigers who saved
line, then Americans must re- line companies use eminent effectively unreviewable un- Justice. Mr. Bookbinder is chief China • Building the world’s fastest clipper ship • The
spect that ruling. But judges domain to snatch thousands of less they file an immediate ap- counsel for the Niskanen Cen- return of Philip Marlowe • Sam Sacks on fiction • & more
haven’t actually issued many landowners’ properties free peal. When states have be- ter.
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A16 | Friday, July 20, 2018 THE WALL STREET JOURNAL.
OPINION
REVIEW & OUTLOOK LETTERS TO THE EDITOR
V
ladimir Putin knows what he wants sanctions and tried to lure Donald Trump Jr. to Regarding your editorial “Con- “What if Gorbachev’s real plan is to
from Donald Trump, and one priority is support relief in the 2016 campaign. Recall that taining Putin—and Trump” (July 18): lull the West?” Mr. Will accused
With President Trump’s faux pas Reagan of reversing his formerly
help in silencing businessman and hu- Kremlin-linked lawyer Natalia Veselnitskaya
with President Vladimir Putin, per- staunch anticommunist position and
man-rights advocate Bill met Don Jr. and son-in-law haps it is time to think about what selling out to Mikhail Gorbachev.
Browder. Someone should tell Putin wants Trump to Jared Kushner in June 2016 at the real crimes are in this situation. Ronald Reagan was roundly criti-
Mr. Trump that he and Mr. Trump Tower on the pretext There appears to be little doubt that cized by Republicans, Democrats
Browder were both targeted
help silence the man of having dirt on Hillary Clin- the Russians attacked the U.S. elec- and much of the press for his per-
by Fusion GPS, the political who was also targeted ton. It turned out she had toral system. It was a blatant at- formance in a series of summits
gun-for-hire that midwifed nothing on Mrs. Clinton but tempt to disrupt our democratic po- with General Secretary Gorbachev.
the Steele dossier in 2016.
by Fusion GPS. wanted to lobby the two to litical system, and an attack by a On Nov. 9, 1989, the Berlin Wall
Mr. Browder has been on support repeal of the Mag- hostile power on the U.S. There is was torn down as the Soviet Union
Moscow’s enemies list since nitsky Act. also no doubt that it took place dur- crumbled.
he lobbied Congress to pass the Magnitsky Act Mrs. Veselnitskaya also worked alongside Fu- ing the Obama administration. As we are now bombarded with
From all indications, President unparalleled and careless Trump cri-
in 2012. The law is named for Mr. Browder’s late sion GPS to undermine the Magnitsky Act, which
Obama, James Comey, James Clap- tiques from Mr. Will, John Brennan
lawyer and auditor Sergei Magnitsky, who ex- means Fusion was working both for the Russians per and John Brennan were all (“treasonous”) and other critics, it’s
posed a $230 million fraud embarrassing to the to smear Mr. Browder and the Clinton campaign aware of it. They chose to do noth- healthy to consider past times they
Kremlin, was arrested on trumped-up charges, to smear Mr. Trump via the Steele dossier. ing and allowed it to continue. This offered similar counsel.
and died from torture and neglect in a Moscow Mr. Browder has told Congress that Fusion seems to have been overlooked in PETER KORMAN
detention center at age 37. spread false information to news outlets that all of the furor. Atlanta
The Magnitsky Act, versions of which have Magnitsky wasn’t murdered. And Fusion co- JIM BAUGH
also passed in Britain, Canada and the Baltic founder Glenn Simpson told Congress that he Cleveland, Tenn. I am shocked, shocked! to find
states, allows for sanctions and travel restric- had planted information with U.S. media about spying going on here. But I must
tions on human-rights violators. The U.S. has Mr. Browder’s “activities in Russia” and his I am far more concerned about ask: If Russia’s meddling in our
sanctioned 51 Russians under the law. The supposed “history of tax avoidance.” We doubt the alleged efforts within our FBI to elections was an act of war, was
tamper with the 2016 presidential President Obama’s meddling in Is-
Kremlin has been hounding Mr. Browder for Mr. Putin told Mr. Trump about the Kremlin link election than I am with those of rael’s election (an ally) also an act
years, lodging “red notice” requests with Inter- to Fusion in their private conversation about Russian intelligence officers at- of war?
pol for his arrest and filing frivolous lawsuits Mr. Browder. tempting to do the same through STANLEY SPATZ
in U.S. and British courts. All of this is another way of saying to Mr. social media. We expect this kind of Hollywood, Fla.
The news this week is that Mr. Putin com- Trump that Vladimir Putin is trying to con you, behavior from the Russians, but not
plained about Mr. Browder in Helsinki at his sir. And on that point, the U.S. Senate did Mr. from the FBI. I regard the U.S. as Australia’s
news conference with Mr. Trump. The Russian Trump a favor Thursday by voting 98-0 for a WILLIAM MORSE best friend, almost the only one
accused Mr. Browder of tax fraud and “a contri- resolution warning the President not to let the Grosse Ile, Mich. worth having. President Trump said
bution to the campaign of Hillary Clinton,” the Russian government question diplomats or he doesn’t trust the U.S. intelligence
latter of which looks like an unsubtle attempt other officials. It’s clear the Journal opinion staff agencies. From reading your paper
has grave concerns following the (and the president would know
to seduce Mr. Trump to help him. On Thursday afternoon the White House
Trump-Putin summit in Helsinki. It much more), I don’t either, and I
The next day Russia’s prosecutor general seemed to see where the politics of this was go- isn’t the first time we’ve seen such suspect the feeling is general world-
said Moscow wants to question several U.S. offi- ing when it released a statement saying that the criticism of a U.S. president. Histori- wide and has been growing for quite
cials allegedly involved with Mr. Browder, in- request to interview U.S. officials “was made in ans won’t confuse the oratorical a while.
cluding former U.S. Ambassador to Russia Mi- sincerity by President Putin, but President skills of President Trump with those PAUL EVERINGHAM
chael McFaul. Asked about that Wednesday, Trump disagrees with it.” The White House of Ronald Reagan. That said, the Hamilton, Australia
White House press secretary Sarah Sanders said then announced that Mr. Trump will invite Mr. press attacked Reagan, too.
“the President’s going to meet with his team Putin to meet in Washington. In May 1988 George Will warned I never thought I would hear this
and we’ll let you know when we have an an- Mr. Trump should know that critics of the America that Ronald Reagan was president, of all people, sound like
nouncement on that.” What? Kremlin often end up dead, and Mr. Browder is getting duped in a column that ran Neville Chamberlain.
It seems Mr. Putin also sought Mr. Trump’s undoubtedly a target. Before he cuddles with in many papers, including the Des- BRUCE BOWERS
ert Sun which used the headline Los Altos, Calif.
intervention against Mr. Browder during their the bear again, Mr. Trump ought to say publicly
private meeting in Helsinki. The State Depart- that Mr. Putin will get no help from the U.S.
ment rightly rejected Mr. Putin’s interrogation against Mr. Browder. And that if anything hap-
request as “absurd” on Wednesday, but allow pens to Mr. Browder—if he should fall from a
us to connect some dots for Mr. Trump. bridge, or be shot as he gets out of a car—the
Many Obstacles for STEM-Trained Women
Mr. Putin wants relief from Magnitsky Act world is going to blame Vladimir Putin. Regarding Barbara Oakley’s “Why It’s important to show the students
Do Women Shun STEM? It’s Compli- why the solution to a math or science
cated” (op-ed, July 14): As a private problem works. It is a kind of code
Why Your Pension Is Doomed tutor at all levels of school mathe-
matics, I get to talk one-on-one to
they can learn. Yes, games and
groups are helpful, but the logic be-
P
ension costs are soaring across the New Jersey’s pension funds would be broke girls (and boys) who are struggling hind what they are learning is even
with math and science. One factor more interesting.
country, and government unions blame even had politicians squirrelled away billions not mentioned in the article is the ef- Several years after I had taught a
politicians for “under-funding” benefits. more. fect of parents’ attitude toward their small eighth-grade algebra course
Lo, if only taxes were higher, Ditto for Illinois, where the daughters pursuing STEM subjects. In one of the students from the class
state budgets would be A new study shows that pension liability has grown by my own family I have seen two exam- saw me in a restaurant and reintro-
peachy. The real problem, as a benefits are rising faster 8.8% annually over the last 30 ples of fathers who encouraged their duced herself. I commented: “I don’t
new study shows, is that poli- years. Yet when the Illinois Su- daughters’ interest in science and know whether you knew how much I
ticians have promised over- than GDP in most states. preme Court in 2015 blocked math, including my own. enjoyed teaching your class.” She an-
generous benefits. state pension reforms, the In the case of mothers, I often swered: “Oh yes, we all knew!”
In a novel analysis, the Illi- judges rebuked politicians for hear: “My mother can’t help me with JENNIFER SCHOFIELD, PH.D.
nois-based policy outfit Wirepoints compared inadequately funding pensions. The solution, ac- my math homework. She says she Napa, Calif.
couldn’t do math, and that most girls
the growth of state pension liabilities relative cording to unions, is always to raise taxes. But
can’t do it. Just don’t worry about it.” We don’t need to bemoan that a
to state GDP and fund assets. Most studies have no tax hike is ever enough because benefits keep Many elementary school teachers highly competent woman, like Ms.
examined “unfunded” pension liabilities, which growing faster than revenues. are still expected to teach all sub- Oakley’s hypothetical straight-A “Na-
is the difference between current assets and the New Jersey recently raised corporate and in- jects. Many teachers, especially in dine,” can select any career path she
present value of owed benefits. But this obfus- come taxes on high earners, but the state would grades three to five, don’t like math wishes. Nor should we be bothered
cates the excessive pension promises that poli- need to spend billions more on pensions each and find it hard to express enthusi- when “Sara,” with an A in English
ticians have made. year to adequately finance promised benefits. asm for it. Since the majority of the and a C in Physics, chooses a major
According to the study, accrued liabilities— Illinois’s Democratic Legislature last year over- teachers are women, this can elicit in the humanities.
how much states are on the hook for—between rode GOP Gov. Bruce Rauner’s veto of a corpo- negative reactions from the girls in We should be much more con-
2003 and 2016 grew more than 50% faster than rate and income tax hike. Yet the Democratic the class. The teachers have never cerned with a different hypothetical:
the economies in 28 states and more than twice candidate for Governor, J.B. Pritzker, and been taught to make the subject in- a woman who is exceptionally tal-
teresting. ented in science or math, but who
as fast as GDP in 12 states. Leading the list are unions are now campaigning to kill the state’s
still ends up in a career outside of
the usual suspects of New Jersey (4.3 times flat tax rate and raise taxes again. STEM, or in no career at all. Statis-
faster than GDP), Illinois (3.23) and Connecticut Stanford University lecturer David Crane has We Need Employer-Based tics show that women leave STEM ca-
(3.18), as well as New Hampshire (3.46) and calculated that every additional penny that Cal- reers in droves, often to pursue ca-
Kentucky (3.08). ifornia schools have received from the state’s Training for Job Positions reers that they are intensely
Between 2003 and 2016, New Jersey’s pen- 2012 “millionaire’s tax,” which raised the top Ivanka Trump’s plan for a “new” overqualified for, or to leave the
sion liability ballooned 176%. Unions blame law- individual rate to 13.3% from 10.3%, has gone to- job training initiative (“Training For workforce altogether. Census data
makers for not socking away more money years ward retirement benefits. The only salve to the Jobs of Tomorrow,” op-ed, July show that in the U.S. only one in
ago, though lower pension payments helped state pension woes, as the Wirepoints study 18) sounds very much like all the seven women with a STEM degree ac-
them bargain for higher pay. The reality is that notes, is to rein in current worker benefits. plans that have been advanced over tually works in STEM. These depar-
the last 30 years and failed. The gov- tures are generally not caused by
ernment has never been a good crushing bias in the workplace that
B
for new industries. This idea suffers careers after finding that many
en Franklin is credited with advising his Democrats are crowing about the defeat. from the conceit that government can highly technical jobs are inflexible
fellow revolutionaries that if they didn’t Sen. Chuck Schumer (D., N.Y.) even suggested prepare workers for a future they and difficult to balance with respon-
hang together, they would assuredly that if Mr. Bounds can be denied confirmation know nothing about. sibilities outside of the workplace—
hang separately. The Republi- because of college writings, A better way forward is to apply namely, child care and elder care.
can Senate learned this lesson Scott and Rubio defeat “it’s going to be hard to argue tax incentives for companies to train While these challenges aren’t unique
the hard way Thursday when that [Supreme Court nominee workers for positions they need to STEM women, those in technical
last-minute doubts by Sen.
a good nominee and Brett] Kavanaugh’s writings filled, rather than getting the admin- fields often find it much harder to
Democrats crow. istration involved in a new scheme to stay afloat after a career break, espe-
Tim Scott (R., S.C.) killed the in the White House are not
fund a new government program. cially if they have not stayed current
nomination of Ryan Bounds to relevant.” Why repeat the mistakes of the past, with technology.
the Ninth Circuit Court of Ap- The larger story is that ju- wasting tax dollars and giving false HEATHER LIDDELL, PH.D.
peals. The defeat overshadowed what should dicial confirmations have been a great Republi- hope to trainees that doesn’t result in Washington
have been the news this week: a record number can accomplishment. The day before Mr. real jobs? We can learn from other
of appellate-court confirmations since Presi- Bounds’ nomination was withdrawn, the Sen- countries which have created appren-
dent Trump took office. ate confirmed Mr. Trump's 23rd appellate nom- tice programs aimed at high-school- Pepper ...
The two Democratic Senators from Ryan inee—breaking the record held by George H.W. age students, while at the same time
Bounds’ home state of Oregon—Ron Wyden Bush for most appellate-court nominees con- dropping the tired liberal meme of
And Salt
and Jeff Merkley—have objected to his nomi- firmed in a President’s first two years. Accord- college for everyone. THE WALL STREET JOURNAL
nation largely due to college writings they in- ing to the U.S. Courts website, there are seven WES POTTER
Natick, Mass.
correctly claim he tried to conceal. But what appellate-court nominees awaiting Senate con-
really killed the nomination was when Mr. firmation, five nominees pending for vacancies This plan seems to envision our
Scott, the sole black Republican in the Senate, that will occur in the future, and 14 current va- children as a “workforce,” just
told colleagues Thursday he didn’t have cancies to fill. drones, products to serve industry.
enough information to vote “yes,” and Sen. As for Judge Kavanaugh, the Bounds fiasco When education brings back the
Marco Rubio (R., Fla.) said he’d back Mr. Scott. ought to galvanize Senate Republicans. Shortly wonders of classical education and
Majority Leader Mitch McConnell pulled the before the Bounds vote was cancelled, the Sen- the great books, I’ll be on board.
vote rather than risk a defeat. ate reported four more appellate judges out of KAY BUCCOLA
Mr. Scott is not on the Judiciary Committee committee—one for the Third Circuit, two for Kenmore, Wash.
so is unlikely to be as familiar with the charges the Fourth and one for the Eleventh.
as those who are. But the information was Republicans hold the Senate at least until Letters intended for publication should
available—long before the time to vote. What January, and President Trump still has time to be addressed to: The Editor, 1211 Avenue
of the Americas, New York, NY 10036,
Mr. Scott would have seen had he looked is a nominate someone to take Mr. Bounds’ place or emailed to wsj.ltrs@wsj.com. Please
college kid writing sarcastically about political on the Ninth Circuit. Confirmations are a team include your city and state. All letters
correctness, identity politics and multicultural- sport, and with an effective 50-49 majority, are subject to editing, and unpublished
ism on campus. These are flimsy and unfair Senate Republicans need to show up prepared letters can be neither acknowledged nor “Yet you say you have
returned.
grounds to defeat a nominee. and ready to play. a fear of commitment.”
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THE WALL STREET JOURNAL. Friday, July 20, 2018 | A17
OPINION
L
et the hand-wringing and
denunciations begin. On
policy adopted by the international
community in 1922 in the League of
Nations Mandate for Palestine,
Cry ‘Treason’
Thursday Israel finally ex- which sought to “encourage . . .
pressed in constitutional close settlement by Jews.” Again, By Michael Anton
P
law the basic achievement the provision is only declaratory of
of Zionism: Israel is the nation-state values, and does not prescribe or resident Trump is, as ever, for-
of the Jewish people. In the seven authorize any particular policies. By tunate in his enemies. What-
years since the new provision was contrast, the state constitution of ever one thinks of what he
first proposed, it has attracted a Hawaii authorizes land policies to said in Helsinki, the overreaction is
The Sick Man of Europe Risks a Relapse plenty of evidence of illicit American
interference in the 2016 election, all
of it to defeat Mr. Trump and elect
Throughout the OECD detects a widening gap be- vestment boom, and there are plenty roads, bridges, railways and fiber in- Hillary Clinton. Yet when Mr. Trump
1990s and much of tween the most productive compa- of ways to start one. One is to en- ternet connections, Germany could points that out, he’s literally called a
the 2000s, Ger- nies and the rest. The most efficient courage startups, since entrepreneur- restore its productivity dominance. traitor—by the former head of the
many was known service firms are now around 20% ial firms typically take the lead in de- But there’s no reason to think the Central Intelligence Agency. John
as the sick man of more productive than in 2006; but veloping and diffusing innovations. German government can invest more Brennan and James Clapper attack
Europe. Weighed the other 95% of service companies Yet the pace of business creation is wisely than private companies can. the president in vitriolic terms al-
POLITICAL down by the costs are 20% less productive. The most low and slowing, in part because Worse, Berlin can’t afford this invest- most daily. James Comey occasion-
ECONOMICS of reunification, productive companies should pull starting a business in Germany re- ment because it’s spending too much ally chimes in with a Bible quote.
suffocated by high others up as their new technologies quires more red tape than in most on social benefits. They have a First Amendment right
By Joseph C.
taxes and labor and methods spread through the developed countries. That’s the conclusion of a report to do so. But constantly bashing the
Sternberg
regulations, and economy. Not in Germany. this week from the Ifo Institute, president casts doubt on their im-
battered by the That’s because German companies which finds that Germany’s social partiality and professionalism while
competitive pressures of globaliza- aren’t investing at home. Corporate Germany’s economy looks outlays—now roughly half the budget in office.
tion—if you could name an economic savings (outside financial industries) good, but consider the low and higher than Scandinavia—are Despite all this, Mr. Trump says
torture, Germany suffered from it. have increased steadily for 20 years, crowding out the ability to undertake he believes their case that Russia
Maybe that’s why the new crisis feels the International Monetary Fund productivity growth. public-works projects. Berlin could meddled in 2016. So do I. But I
less urgent than it is. noted this month, but investment is run a fiscal deficit, but the result stress the word “believe.” I don’t
Germany’s economy today is in a stalling relative to GDP. would be an economy with more know and neither does anyone out-
state of health that usually seems un- Looking at the factors that influ- Companies, especially smaller debt, unsustainable entitlements, side the highest levels of govern-
attainable for old Europe. Real ence overall labor productivity ones, may also be storing up cash to white-elephant public-works proj- ment. Those in the media who
growth was 2.5% last year. Exports growth, the IMF finds that capital in- fund future research and develop- ects, and slower long-term growth. hyperventilate every time Mr.
power a trade surplus of 8% of gross vestment plays a smaller role in Ger- ment. The key is to make other Berlin is headed in that direction Trump is insufficiently emphatic in
domestic product. Unemployment is many than in any other major econ- sources of financing available so anyway, since too many politicians acknowledging Russian meddling
at a postreunification low of 3.7%. omy. Most of Germany’s middling firms feel compelled to stockpile less now seem to want a public-works- don’t seem to realize he is one of
But those happy numbers mask productivity gains come from compa- savings. Financial reforms, such as and-entitlement blowout if only they the very few people in the country
what is set to become a debilitating nies figuring out how to do more privatizing state-owned banks, might can protest enough first to avoid who’ve actually seen the underlying
drag on the eurozone’s largest econ- with existing resources. If German help stimulate more adventurous looking reckless. Significant tax cut- evidence.
omy. Germany is in the grip of a pro- firms could combine that aptitude business lending, or encourage more ting, the one fiscal policy that would Before last week’s indictments, all
ductivity crisis. Without a solution, with the capital-investment growth venture-capital financing. directly encourage the private invest- the intelligence community had
stagnation will return as entitlement of Belgium—yes, Belgium—Germany Instead, politicians and wonks are ment Germany needs, remains the made public was a 14-page unclassi-
burdens become crushing. would lead the world in productivity fixated on government investment. policy its ideologically confused and fied summary that states conclu-
Germany’s reputation for effi- growth. They imagine that if Berlin and state politically brittle government seems sions but reveals nothing about how
ciency is justified but misleading. Germany needs a corporate-in- governments could spend more on least likely to deliver. they were reached. That’s typical for
The most productive industries are an unclassified product, but it
exporting manufacturers, and the means the rest of us—including the
most productive companies are large
ones. But the clear majority of com-
panies are smaller service firms,
An ObamaCare Tax Worth Keeping media—have to take the case on
faith. Yet, bizarrely, the media insist
they know better than Mr. Trump.
whose productivity increasingly lags. By James C. Capretta plans encourage consumers to use benefits by paying higher wages to There is more public evidence of
H
Productivity for manufacturers more health services than they oth- their workers. American meddling—politicized
employing more than 250 people ouse Republicans want to erwise would, which drives up costs. Capping the tax break for job- leaks, gaming a criminal investiga-
grew on average 5% a year between pass a bill delaying Obama- On average, employer plans cost 35% based insurance, with the Cadillac tion, surveillance of campaign asso-
2009-14, according to the Organiza- Care’s 40% excise tax on more than they would if health bene- tax or something better, is essential ciates, and strings of biased mes-
tion for Economic Cooperation and high-cost employer plans—the “Ca- fits were fully taxed like cash com- for a market-based approach to cost sages by officials—than of Russian.
Development. But the figure was only dillac tax”—by another year, to pensation, according to a 2008 control. The federal government There may be piles of secret evi-
2% for smaller firms. In services, 2023. GOP hostility to this tax is a study. heavily subsidizes every extra dollar dence of the latter. If so, why not
productivity fell 0.1% a year in large mistake. Keeping it would promote spent on job-based insurance, which make more of it public? Especially
companies and 0.4% in small ones. market-based health care more than undermines the incentive for em- since, as we have been told, ac-
Any discussion of productivity re- killing it. The levy on ‘Cadillac’ ployers and workers to seek out knowledging Russian interference is
quires some caveats. Labor-law re- The Cadillac tax would apply to plans will help counter lower-cost options. the patriotic imperative of our time.
forms in 2003-05 encouraged em- premiums above approximately Initially, only about 4% of all em- From what has been made public,
ployers to hire more workers instead $11,000 for individual coverage and perverse tax incentives. ployer plans would have premiums Russian meddling consisted of troll-
of eking more production out of ex- $30,000 for families. It is a second or above the Cadillac tax thresholds. ing social media and allegedly hack-
isting employees. This is especially third-best answer to a longstanding The thresholds are indexed annually ing Democratic National Committee
likely to account for the decline in problem: Workers pay income and For years economists have urged to grow with inflation, which is ex- emails. Information operations are
service productivity, since low-skilled payroll taxes on their cash wages but lawmakers to put a limit on the tax pected to be less than the rate of ris- also as old as statecraft. There’s not
service professions absorbed many of not on the value of job-based health break. President Reagan proposed ing medical costs. Consequently, over a lot the target country can do to
the workers pushed into the labor insurance. That differential tax treat- capping it in 1983, as did President time, more employers would have to stop them, beyond pointing out and
market by the reforms. ment encourages employers to shift George W. Bush in 2007. These ef- cut their costs to avoid the tax. ridiculing ham-fisted propaganda.
Yet that doesn’t fully explain Ger- compensation toward generous forts failed because of the unified Some Republicans have wanted to Throughout the Cold War, most
man productivity problems. The health benefits. Overly rich health opposition of businesses and labor kill the Cadillac tax since it was en- Americans not on the left were unaf-
unions. In 2008 Barack Obama acted in 2010. It was originally fected by far more aggressive and
helped his campaign for president by scheduled to take effect in 2018, but better-financed Soviet disinforma-
attacking John McCain for proposing opponents have twice successfully tion. But we’re supposed to believe
PUBLISHED SINCE 1889 BY DOW JONES & COMPANY to tax job-based health benefits “for attached provisions to larger budget that $10 million spent on Facebook
Rupert Murdoch Robert Thomson the first time in history,” as Mr. deals which delay its start date. ads and troll farms overcame Mrs.
Executive Chairman, News Corp Chief Executive Officer, News Corp
Obama put it. Some Republicans believe they Clinton’s $768 million war chest?
Matt Murray William Lewis
Editor in Chief Chief Executive Officer and Publisher Mr. Obama reversed himself and can kill the Cadillac tax and replace Every effort should be made to
Karen Miller Pensiero, Managing Editor DOW JONES MANAGEMENT:
supported the Cadillac tax, which it later with a better alternative. protect all of America’s cyber-
Mark Musgrave, Chief People Officer; will subject health benefits to taxa- That’s wishful thinking. If Congress networks, including the privacy of
Jason Anders, Chief News Editor; Thorold Barker,
Europe; Elena Cherney, Coverage Planning;
Edward Roussel, Chief Innovation Officer; tion for the first time, although in a keeps delaying the tax and eventu- campaign operatives. But it’s absurd
Anna Sedgley, Chief Operating Officer
Andrew Dowell, Asia; Neal Lipschutz, Standards; way intended to obscure its effects. ally kills it, there will be no appetite to assume that a single vote in
OPERATING EXECUTIVES:
Meg Marco, Digital Content Strategy;
Ramin Beheshti, Product & Technology;
To avoid accusations of a flip-flop, to impose a different version of the Michigan, Pennsylvania or Wisconsin
Alex Martin, Writing; Michael W. Miller, Features
& Weekend; Shazna Nessa, Visuals; Kenneth Breen, Commercial; Mr. Obama designed the Cadillac tax same policy. was turned by reading John Pode-
Rajiv Pant, Product & Technology; Ann Podd, News Jason P. Conti, General Counsel; to look like it applies to employers, Many provisions in ObamaCare sta’s embarrassing emails.
Tracy Corrigan, Chief Strategy Officer;
Production; Matthew Rose, Enterprise;
Frank Filippo, Print Products & Services;
not workers. Although employers should be repealed, but the Cadillac Few of the president’s opponents
Michael Siconolfi, Investigations;
Nikki Waller, Live Journalism; Steve Grycuk, Customer Service; will be on the hook to pay the tax if tax isn’t one of them. Republicans actually say that Russia swung him
Stephen Wisnefski, Professional News; Kristin Heitmann, Chief Commercial Officer; premiums exceed the thresholds, should look past its origin as part of the election. But that’s clearly what
Nancy McNeill, Advertising & Corporate Sales;
Carla Zanoni, Audience & Analytics
Christina Van Tassell, Chief Financial Officer;
that won’t happen often. Most em- ObamaCare and leave it alone. They they insinuate and want people to
Gerard Baker, Editor at Large ployers will avoid the tax by adjust- don’t have the will to replace it with believe. Mr. Trump understands this
Suzi Watford, Chief Marketing Officer;
Paul A. Gigot, Editor of the Editorial Page; Jonathan Wright, International ing what they offer workers. They something better, and killing it and is frustrated by it. Can you
Daniel Henninger, Deputy Editor, Editorial Page DJ Media Group: Almar Latour, Publisher can lower premiums by raising de- would help those who say the only blame him?
WALL STREET JOURNAL MANAGEMENT: Professional Information Business:
Joseph B. Vincent, Operations; Christopher Lloyd, Head; ductibles, contracting with tighter answer to rising costs is more gov-
Larry L. Hoffman, Production Ingrid Verschuren, Deputy Head networks of physicians and hospitals, ernment regulation. Mr. Anton, a lecturer at Hillsdale
EDITORIAL AND CORPORATE HEADQUARTERS: and restricting benefits. In a compet- College’s Kirby Center, served as
1211 Avenue of the Americas, New York, N.Y., 10036 itive labor market, employers would Mr. Capretta is a resident fellow deputy assistant to the president for
Telephone 1-800-DOWJONES
make up for the lower cost of health at the American Enterprise Institute. strategic communications, 2017-18.
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A18 | Friday, July 20, 2018 THE WALL STREET JOURNAL.
WORLD NEWS
WORLD WATCH
SYRIA and Kfarya villages was one of the negotiations and has criti- AUSTRALIA Catholic Church officials in the and the church’s wider response
the largest population transfers cized such transfers as forced world to be convicted of the to a long-running inquiry into in-
Rebels Let Thousands in Syria’s conflict. It followed a displacement. Turnbull Asks Pope crime, has resisted pressure stitutional child abuse.
Leave Assad Territory deal negotiated between govern- Negotiators were reported to To Fire Archbishop from an array of Australian law- The 67-year-old archbishop
ment forces and the rebels. be nearing a deal to have rebels makers and community groups denied through his trial having
The residents of two Syrian The government is expected hand over the remaining pockets Prime Minister Malcolm Turn- to resign since a judge sen- known about the abuse of altar
pro-government villages in the to release a number of militants of opposition-controlled territory bull appealed to Pope Francis to tenced him this month to home boys in the 1970s by another
country’s northwest—over 7,000 from its jails in exchange. in Syria’s southwestern Quneitra fire a Catholic archbishop found detention over the conviction. priest, James Patrick Fletcher,
people—who were besieged by The evacuation of the vil- province to the government af- guilty of concealing child sexual “The time has come for the who died in prison in 2006.
the rebels for three years were lages was used as a negotiating ter a monthlong military cam- abuse, in an unusual intervention pope himself to sack him,” Mr. The prime minister’s interven-
evacuated to government-held chip in earlier population trans- paign by government forces, in church oversight of his case. Turnbull said Thursday ahead of tion was one of the strongest
territory, state-run media said. fers along conflict lines. The backed by Russia. Adelaide Archbishop Philip a meeting with senior clergy by a political leader in recent
The emptying of the Foua United Nations wasn’t part of —Associated Press Wilson, one the most senior about Archbishop Wilson’s case years. —Rob Taylor
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S&P 2804.49 g 0.40% S&P FIN g 1.44% S&P IT g 0.33% DJ TRANS À 0.42% WSJ $ IDX À 0.18% LIBOR 3M 2.347 NIKKEI (Midday) 22652.42 g 0.49% See more at WSJMarkets.com
Microsoft’s success in
5 building out its cloud business
has driven up shares of the
0 company more than 40% in
2018 ’19 ’20 ’21 ’22 the past year. The company’s
market capitalization tops
*Excluding Japan
Sources: ICE Bank of America Merrill
$800 billion, putting it in a
Lynch bond indexes via FactSet (yield); league with internet giants
Thomson Reuters (maturities) Apple Inc., Amazon and Al-
THE WALL STREET JOURNAL. When measured by the absolute rise in yields, China’s junk-debt selloff is its worst since 2011. phabet Inc.
Microsoft shares moved lit-
BY MANJU DALAL In Hong Kong, for example, shook markets. The divergence reflects as great a proportion of new tle after the company reported
AND MIKE BIRD Agile Group Holdings Ltd., When 2018 began, interest Asia’s vulnerability both to issuance. robust fiscal fourth-quarter re-
which last August was able rates on dollar-denominated global forces, like rising U.S. Ken Hu, chief investment sults but jumped more than
Asia’s junk-bond market, borrow for five years at Asian junk bonds broadly interest rates, a stronger dol- officer for Asia Pacific fixed 3% during after-hours trading
anxious over China’s debt 5.125%, this month had to offer matched the global market, lar and trade conflict and to income at Invesco in Hong when finance chief Amy Hood
problem, is showing cracks af- an 8.5% coupon on three-year according to ICE Bank of homegrown challenges. As a Kong, said big news has an gave Wall Street analysts a
ter years of rampant growth. bonds. The Chinese developer America Merrill Lynch indexes. mountain of debt nears matu- outsize impact on Asian bor- strong outlook for the current
Falling prices for below-in- recently upset investors by Now the yield on the Asian in- rity, the Chinese government rowers. “They’re the most ex- quarter.
vestment-grade Asian bonds failing to buy back some other dex—representing $138.1 bil- isn’t preventing defaults as it posed to headline risks, more The 43-year-old company
have sent yields sharply debt as expected. lion in government and corpo- once did. China accounts for than anywhere else,” he said. struggled for years as it wres-
higher, leaving creditors nurs- Measured by absolute in- rate debt—runs nearly 2 nearly three-quarters of Asia’s “That’s true of rising volatility, tled with a slow-growing per-
ing big paper losses and crease in yields, the selloff is percentage points above the maturing dollar-denominated defaults, trade.” sonal-computer business,
clouding the prospects for re- the worst since 2011, when world average, having recently junk bonds, according to Investors haven’t aban- which hampered its Windows
financing maturing debt. doubts about the euro’s future topped 9%. Thomson Reuters, and almost Please turn to page B10 operating-system franchise.
Microsoft was late to tectonic
industry shifts, including mo-
HEARD ON THE STREET | By Charley Grant
Fakes Hit Brands on Amazon bile devices and web search.
But the company has re-
versed its fortunes, largely un-
A new mys- This proposal seemingly guts bers of customers, but that has Estimated total gross merchandise volume world-wide
tery unfolding
in Washington
doesn’t sound
it. If not replaced with some
other scheme, their current
business model evaporates and
also enabled some counterfeit-
ers to cut into their business.
Sassa Akervall relies on Am-
$125 billion INSIDE
good for drug they become what they were— azon for much of the sales of 100
supply-chain low-margin claims processors,” the SISU-brand mouthguards
investors. he said. Both Express Scripts that her family invented. The 75 Amazon
The Department of Health and CVS sold off in Thursday Michigan-based entrepreneur
retail sales
and Human Services sent the trading, while UnitedHealth said fake versions of the prod-
White House Office of Manage- Group, which operates a large uct on the site have undercut 50
Third-party
ment and Budget a new pro- PBM, was down 1%. her price and hurt her busi- merchant
posed regulation Wednesday Whether rebates to health- ness. She has reported the 25 sales
evening that could reshape plan sponsors save money on problem repeatedly to Amazon,
how prescription drugs are
priced and sold.
prescription drugs is hotly
contested. The Pharmaceutical
but the fakes keep resurfacing.
“It’s frustrating,” Ms. Aker-
0 PARAMOUNT TV
The rule’s language isn’t Please turn to page B9 vall said, adding that the fake 2015 ’16 ’17 ’18 BOSS FIRED
available to the public until
OMB completes its review, but
products and their reviews have
hurt the brand’s reputation.
Sources: the company (retail sales); FactSet (gross merchandise volume)
THE WALL STREET JOURNAL.
OVER REMARKS
there are hints of what could Caught in the Middle Amazon said it prohibits
be in store. The publicly avail- CVS Health share price the sale of counterfeit prod- that also has allowed impostors rized distribution. So, in some MEDIA, B3
able title of the rule is “Re- ucts. “We invest heavily to to create ersatz versions of hot- cases, counterfeiters are listing
moval of Safe Harbor Protec- $72 protect the integrity of our selling items, according to small their versions of hot-selling
tion for Rebates to Plans or stores,” a spokeswoman said brands and seller consultants. items on the same page and at
PBMs Involving Prescription in a statement, and “will con- When retailers log into Am- lower prices. Amazon’s pricing
Pharmaceuticals and Creation 70 tinue to aggressively pursue azon’s website for sellers, most algorithms see the lower price
of New Safe Harbor Protec- those who harm our customer product pages have a button and then assigns the default
tion.” and seller experience.” next to the item that makes it “add to cart” option to the
That title suggests trouble 68 Counterfeiters, though, have easy for someone to list the counterfeiter, elbowing brands
for pharmacy-benefit manag- been able to exploit Amazon’s same product. That strategy out of selling their own goods.
ers such as CVS Health and drive to increase the site’s se- works well for consumers and “The reality is this is a cat-
Express Scripts Holding, ac-
cording to pharmaceutical-in-
66 lection and offer lower prices.
The company has made the
Amazon on widely distributed
items like shampoo and sneak-
and-mouse game,” said James
Thomson, a brand consultant
BREXIT WEIGHS
dustry lobbyist Barrett Thorn- process to list products on its ers because it increases com- with Buy Box Experts. “You HEAVILY
hill of McManus Group. The
current safe harbor that ex-
64
website simple—sellers can reg-
ister with little more than a
petition and that usually leads
to lower prices for consumers.
have to find a way to remove
more and more of the cheat-
ON STERLING
empts discounts from antikick- June July business name, email and ad- Most small brands, however, ers. As soon as [Amazon]
back statutes “is the soft un- Source: FactSet dress, phone number, credit are closely held and harder to closes one loophole, somebody CURRENCIES, B10
derbelly of the PBM alligator. THE WALL STREET JOURNAL. card, ID and bank account—but get access to outside of autho- Please turn to page B2
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B2 | Friday, July 20, 2018 * *** THE WALL STREET JOURNAL.
A F Nucor...........................B3
AbbVie.........................B5 Fidelity International O
Agile Group Holdings . B1 Asian High Yield Fund Omnicom Group..........B3
Alcoa............................B3 ...................................B10
P
AllianceBernstein Ford Motor................B10
Holding......................B9 Pfizer...........................B5
G
Allianz Global Investors Philip Morris
General Motors.........B10 International...........B11
...................................B10
Gilead Sciences...........B5 Publicis Groupe...........B3
Alphabet...........A6,B1,B3
Goldman Sachs Group B9
Amazon.com...B1,B3,B11 R
Google ......................... B3
American Express.....B10 Roy Harvey..................B3
Gymboree Group.........B5
Apple...........................B1
H S
AT&T............................B3
Hilton Worldwide Singulato Motors........B2
B
Holdings....................B9 Sky.......................A1,B11
Bank of America.........B1 SoftBank Group..........B4
Huawei Technologies . A7
Bank of New York
Mellon................B9,B10 J T
Blackstone Group ....... B9 J.P. Morgan Chase......B9 Travelers..............B9,B10
C Juul Labs...................B11 21st Century Fox
K ........................A1,B3,B11
Capital One Financial.B9
Century Aluminum ..... B3 KKR..............................B9 U-V
Citigroup......................B1 Kohl's.........................B11 Uber Technologies ...... B4
Comcast...............A1,B11 Kraft Heinz ................. B3 Unilever.......................B3
Credit Suisse Group ... B9 L UnitedHealth Group....B1
CVS Health..................B1 Viacom.........................B3
LabCorp ....................... B4
VCG/GETTY IMAGES
D W
M-N
Didi Chuxing Technology Walmart....................B11
Macy's.......................B11
.....................................B4 Walt Disney...A1,B3,B11
Merck...........................B5
E Wells Fargo..........B1,B10
Microsoft.....................B1
WPP.............................B3
eBay...................B10,B11 Morgan Stanley..........B9
Express Scripts Holding Netflix..................A1,B11 Z Singulato Motors was founded by a group led by a former internet-security executive who had never run a car company before.
INDEX TO PEOPLE
BY TREFOR MOSS tech industries. Regional gov- ducing electric cars will have came to us.”
A H P ernments are making similar to compete against established Tongling, which means
al-Aama, Adeeb........B10 Haiyin, Shen................B2 Patel, Viraj................B10 TONGLING, China—Officials funding commitments. Direct foreign and domestic auto “Copper Hill,” sits about 230
Antonelli, Michael .... B10 Hammond, David........B9 Pitkethly, Graeme.......B3 in this old mining town knew government subsidies on elec- makers rolling out their own miles west of Shanghai. Like
B Harte, Jeff .................. B9 Powell, Amy................B3 almost nothing about electric tric-vehicle sales have totaled fleets. hundreds of cities, it is striv-
Blankfein, Lloyd..........B9 Hood, Amy..................B1 R vehicles when they gave a $15 billion over the past five Some 777,000 electric vehi- ing to upgrade its economy
Bryan, Jeremy...........B10 Hueber, Dan..............B11 startup $535 million in land years. cles were sold in China last and move away from tradi-
Reback, Brad...............B2
C I-J and capital to build an elec- Singulato Chief Executive year, nearly half of the global tional heavy industry.
S
Cai, Wei.......................B9 Iger, Bob....................B11 tric-car plant here two years Shen Haiyin estimates that total. But with so many EV “Car manufacturing reflects
Sadoun, Arthur...........B3
Carr, Michael...............B9 Jindal, Nitin ................ B9 ago. just 10% of today’s EV startups companies joining the race, a city’s strength,” said Liu Yi,
Schachter, Ben..........B11
Chavez, Martin ........... B9 L The startup, Singulato Mo- will survive the next five excess supply looks inevitable. director of Tongling’s invest-
Scharf, Charles............B9
F Liu, Yi..........................B2 tors, was founded by a group years. Some auto analysts put ment bureau. “I don’t think we
Schenkel, Scott.........B11
Foley, Jane................B10 M
of tech professionals led by a the figure nearer to 1%. need to worry about overca-
Shah, Ashish...............B9
Frost, Ben....................B9 Siegel, Simeon..........B11
former internet-security exec- “A lot of capital is being in- Singulato CEO pacity.”
McDougall, Michael..B11
G Solomon, David...........B9
utive who had never run a car vested in this industry,” said Shen Haiyin Before meeting Singulato
Moorthy, Hari ............. B9
Son, Masayoshi .......... B4 company before. Paul Gong, an analyst at UBS. estimates 10% executives for the first time,
Gallea, Chris................B9 N Such partnerships are “A lot of it will be wasted.” of electric-car Ms. Liu pored over books on
Gianopulos, Jim..........B3
Nadella, Satya ............ B1 T
Gong, Paul...................B2 springing up all over China, Lured by the prospect of startups will EVs to educate herself about
Nordin, Adam..............B9 Thornhill, Barrett........B1 spurred by Beijing’s call for handouts, many companies survive the the technology. When she met
Gray, Jonathan............B9
O Turner, Craig ............. B11 the country to become a world have concluded that “simply next five years. the Singulato team, everything
Greenberg, Larry.........B9
Greenfield, Rich........B11 O'Rourke, Mike.........B10 W power in electric-vehicle tech- giving it a shot and receiving clicked: their concept of an EV
Griesemer, Daniel.......B5 O'Shea, Conor.............B3 Waldron, John.............B9 nology and by local govern- government support can be a that would be easy to person-
ments eager to jump on the reasonable business model, Having raised around $1.2 alize, like a smartphone,
bandwagon. President Xi Jin- even if they never put an elec- billion from private investors, sounded like a winner, Ms. Liu
Fakes Hurt
Brands on
Amazon
STEPHANIE AARONSON/THE WALL STREET JOURNAL
BUSINESS NEWS
Google’s
EU Fine
Publicis Results Depress Ad Stocks week: Rival Omnicom Group
Crucial revenue gauge ers cutting back on the fees Saatchi & Saatchi, said reve- doctors to sell products, was
the rigor of its arguments, say use the internet to shop around. its beauty and personal-care divi-
former competition officials (At right, an ice-cream factory in sion, but rose slightly in food and
and lawyers. Since then, almost Russia.) Growing popularity of refreshments, and home care.
no commission competition rul- discount retailers, from dollar Unilever reported net profit of
ing has been rejected. stores to Germany’s Aldi, is also €3.04 billion ($3.54 billion) for the
“The commission’s track re- pushing down prices. six months to June 30, down
cord is formidable,” said Assi- Unilever’s Chief Financial Offi- from €3.11 billion in the year-ear-
makis Komninos, a competition cer Graeme Pitkethly said the lier period. Revenue declined to
lawyer at White & Case in Brus- trend was particularly notable in €26.4 billion from €27.7 billion.
sels. condiments, where a battle for —Saabira Chaudhuri
EU law places a particular
onus on companies that domi-
nate a sector and tries to pro-
IN EVERY
iffs are hurting its earnings. $50 a share
The Pittsburgh company,
which made only about 14% of 48
the aluminum it produced
STEP
globally last year in the U.S.,
relies on imports from Canada. 46
Those imports have become
DANIEL ACKER/BLOOMBERG NEWS
TECHNOLOGY WSJ.com/Tech
such a stupid country,” said tion has led to little public foray.
Mr. Son, whose SoftBank outcry because taxis offering “I am a big fan” of Japa-
Group Corp. owns 15% of Uber high-quality service are read- nese taxi drivers, said Didi
and is a major investor in Chi- ily available in city centers President Jean Liu at a news
nese ride-hailing company and public transportation is conference. “We can help taxi
Didi Chuxing Technology Co. convenient. companies grow faster.”
“This is a dangerous situation In contrast to Mr. Son’s out- Uber, in which SoftBank in-
where the government is halt- burst, the ride-hailing compa- vested $7.7 billion this year,
ing progress toward the fu- nies in which he has invested has approached the Japanese
ture.” expressed willingness to offer government about providing
Japan has banned drivers services that work within the data-analysis tools to help
from ferrying passengers for existing legal constraints. lower congestion during the
money unless they have a taxi Hours after Mr. Son’s Tokyo Olympics in 2020, but
license or a similar profes- speech, Didi—in which Soft- nothing has materialized from
Japan is one of the few leading economies without ride hailing, although Uber Eats operates there. sional qualification. Bank and its Vision Fund have the talks, an official said.
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price actions is relatively lim- started selling Zepatier in 2016
ited, sparing most of its top- at a list price of about $54,600
selling products from cuts, such for a 12-week course of treat-
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B6 | Friday, July 20, 2018 THE WALL STREET JOURNAL.
MARKETS DIGEST
EQUITIES
Dow Jones Industrial Average S&P 500 Index Nasdaq Composite Index
Last Year ago Last Year ago Last Year ago
25064.50 t 134.79, or 0.53% Trailing P/E ratio 23.45 21.01 2804.49 t 11.13, or 0.40% Trailing P/E ratio * 24.52 24.29 7825.30 t 29.15, or 0.37% Trailing P/E ratio * 26.45 26.14
High, low, open and close for each P/E estimate * 16.34 18.41 High, low, open and close for each P/E estimate * 17.45 18.80 High, low, open and close for each P/E estimate * 21.36 20.91
trading day of the past three months. Dividend yield 2.14 2.33 trading day of the past three months. Dividend yield 1.87 1.99 trading day of the past three months. Dividend yield 0.94 1.12
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THE WALL STREET JOURNAL. NY Friday, July 20, 2018 | B6A
PAID ADVERTISEMENT
C
hina continues to honor on average nearly 30% a year of the Dujiangyan base of the China
the commitments it made global economic growth. Conservation and Research
to enter the World Trade China’sreformandopening-upover Center for the Giant Panda in
Organization and could the past 40 years have far exceeded Sichuan province.
benefit more from further steps to the commitments it gave to gainWTO China is pursuing a An inauguration ceremony
open its economy, analysts said after access, he said, and it has become a trade strategy that for the Key Laboratory on
benefits itself and
the central government published a major trading partner of more than Conservation Biology of Rare
other countries, the
white paper on June 28. 120 countries and regions. Animals at the park was held on
government says.
In the white paper, titled China The documents provide ample BAI XUEQI / XINHUA June 19.
and the World Trade Organization, examples and data showing what Itwasthelatestbigdevelopment
the government reiterated that Chinahasdonetoobserveanduphold since planning for the Giant Panda
it is pursuing a trade strategy that WTOrules.Theydemonstratesupport WTO entry commitments, but also the vast size of the Chinese market National Park began 17 months
benefits both China and others and for a multilateral trading system that pushed itself to go much further in the andthegreatpotentialofthecountry’s ago.
will continue to open up in “a more is open, transparent, inclusive and scope and depth of opening-up,” said innovation industry and high-end Zhang Hemin, deputy director
comprehensive, profound and nondiscriminatory. Song Hong, an international trade manufacturing sector, said Yang of the laboratory, said the
diversified way.” The white paper shows China has researcher at the Chinese Academy Weiyong, an economics professor laboratory is needed because the
Wang Shouwen, vice-minister of been an active participant, strong of Social Sciences. at the University of International park encompasses an area with
commerce,said China has been a key supporter of and major contributor Further opening-up in more key Business and Economics in Beijing. some of the most complex terrain
engine for world economic recovery to the multilateral trading system. sectorsisboundtobenefitthecountry and abundant wildlife in the world.
and growth since 2002, contributing “China has not only honored its as well as the global economy, given SEE “DUTIES” ON P2 The park, covering 10,500
square miles, is three times the
size of Yellowstone National Park.
China Watch materials are distributed by China Daily Distribution Corp., on behalf of China Daily Beijing, China.
Additional information is on file with the Department of Justice, Washington, D.C.
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B6B | Friday, July 20, 2018 NY THE WALL STREET JOURNAL.
PAID ADVERTISEMENT
W
hen some Chinese
schools first began
to introduce the
concept of positive
education, many parents feared
that the programs would sacrifice We are trying to develop
academic rigor. However, research character skills that improve
f ro m C h i n a a n d a ro u n d t h e long-term wellbeing.”
world shows that programs to
teach productive character traits ZHAO YUKUN
and virtues, including curiosity, ADMINISTRATIVE DIRECTOR OF
THE POSITIVE PSYCHOLOGY
optimism, leadership, gratitude, RESEARCH CENTER AT
teamwork, grit, resilience and long- TSINGHUA UNIVERSITY
term planning, raise not only life
satisfaction, but also the test scores
of students. province, which launched a large
“Some people misunderstand the positive education program in
concept of positive education,” said 2014, found that the percentage of
Zhao Yukun, administrative director graduating students admitted to
of the Positive Psychology Research key universities rose from 28% to
Center at Tsinghua University. 41% by last year. At the same time,
“They think it aims to make the suicides were reduced from seven
kids as happy as possible. This to one. Similarly, in the 19th Middle
is wrong. The only way you could School in Beijing (which teaches
do that is to indulge them, to let grades seven to 12) the percentage
them follow their own will. But of graduates admitted to first-
this will not give them sustainable class universities rose from 70% to
happiness. We are trying to develop Students of the elementary school affiliated with Tsinghua University in Beijing in class. PROVIDED TO CHINA DAILY 75% in three years after a positive
character skills that improve long- education program was adopted.
COMMENT
CHINAWATCH.CN
China’s Rise Reshapes
CONNECTING THINKERS Global Game Culture
BY ROMANO PRODI being superior. Wise politics is a
quest to find the instruments of
Despite various crises affecting compromise with the principle
large parts of the world, global of an open cultural dialogue as a
economic growth stands at around priority. Ports like Yangshan in Shanghai are likely to enjoy greater cargo throughput as
4% and is spread relatively evenly Such an approach is important overseas companies gain greater access to China. XU CONGJUN / FOR CHINA DAILY
between developing and wealthy for the survival of Western
countries. democracies and is also vital for
In some ways, this should be a
reassuring trend. But a defining
feature of our time is the disconnect
China, which has become deeply
integrated into the global system.
To re-evaluate the significance
Duties: Barriers Fall as China
between economic dynamics and
cultural identity.
While rapid economic
of culture does not mean to ignore
the importance of the economy.
We cannot underestimate the
Widens Access to Market
globalization, bringing existence of competition and
unprecedented interconnectivity, Romano Prodi even a clash of interests, but we FROM PAGE 1 for foreign-provided services, Mei
has been taking place for the past FORMER PRIME MINISTER OF ITALY also cannot forget that any trade said.
few decades, various forms of AND PRESIDENT OF THE dispute is structurally linked to a China, which joined the WTO in The white paper said China has
nationalism have emerged as a EUROPEAN COMMISSION cultural environment and to the 2001, issued a new negative list on revised the catalog for the Guidance
reaction to increasing economic anxiety generated by an identity June 28 that sets out which of its ofForeignInvestmentIndustriestwice
disparities between and within an understanding of what makes crisis. industries are closed to foreign over the past five years, reducing
countries and what is perceived the uniqueness of a civilization and It must be our collective goal to investors.It was first drawn up in 1995 restrictive measures on foreign
by many as imposed cultural a capacity to empathize with one harmonize our different identities, and has now been revised eight times. investment by 65%.
homogenization. There is a deep another. which will allow us to trade with The new list cuts the restrictions The government will ease market
and growing sense of identity Wise politics finds the resources unavoidable competition but from63 to 48,especiallyin the service access by removing the equity cap on
that is penetrating even inside a to avoid both the fiction of“the end without unnecessary conflict. This industry, infrastructure, railway foreign investment in sectors such as
country, as is the case of Catalonia. of history” or of a “flat world” and is the best guarantee for long- passenger transport, international shipbuilding and aircraft and motor
So it is time to reconsider the the course that leads to a “clash of lasting peace. shipping, grain purchases and for vehicle manufacturing.
importance of cultural identity civilizations.” We have had the intelligence wholesale items. It will become Since China joined the WTO it has
and how it impacts the political Some globalists are to develop our economies and, effective on July 28. comprehensively honored its tariff
economy, geopolitics and security. uncomfortable with the realization by doing so, we have become The pledge to widen access to reduction commitments, reducing
Some proponents of that China follows its own path increasingly interdependent. What Chinese markets and pursue a tariffs, upgrading its tariff catalog
globalization make the mistake because they choose to ignore the we need now is to find the wisdom strategy that benefits China and and improving the tariff structure,
of thinking that identities do not dimensions of history, culture and to take note of our differences its trading partners came just days said Tu Xinquan of the University
exist. This is not true. Even if they identity. The same sentiment is and, as a consequence, deepen before the U.S. imposed tariffs on of International Business and
evolve and are complex, identities growing in the opposite direction, our legitimate interests respecting Chinese imports worth billions of Economics in Beijing.
are real and constitutive of human with complaints that the United our roots and our history. dollars and China retaliated in kind. From 2001 to 2017 the value of
societies. States lives by different values. Difference must be considered China’s stance of further opening- China’s goods imports rose from
A reflection on identities is Chinese history is not the same an asset, not a liability. upandbeingmoreinclusiveisinsharp $243.6 billion to $1.84 trillion, with
absolutely necessary because it is as American history, and to be contrast to the U.S.’ protectionist annual average growth of 13.5%,
the recognition of the differences Chinese is not the same as being The author is a former prime stance,Yang said. making the country the world’s
that characterize our various American or European. The ups minister of Italy and president of It is clear who is right and who is second-largest importer.
collective constructions, yet at and downs in relations between the European Commission. wrong, and the truth will eventually Wang Shouwen, the vice-minister,
the same time we arrive at the the West and China are often the emerge, he said. saidChinahastakenfurtherinitiatives
conclusion that these differences consequence of not recognizing Mei Xinyu, a researcher at the to cut its import duties on certain
do not necessarily clash. On the the diversity of our roots and Chinese Academy of International medicines and will substantially
contrary, differences should be cultures. Trade and Economic Cooperation, reduce duties on automobiles and
seen as a pre-condition of harmony. In addition to efforts to take said, “The new negative list certainly parts as well as a number of daily
Wise politics is action that identities into account, we must is shorter and opens more sectors, consumer goods starting from July 1.
takes note of all the nuances also avoid what can be called the Scan it! especially the financial sector.”
between harmonization and trap of reciprocal superiority: Read more on More preferential policies and lower Reuters and Xinhua contributed to
homogenization, and presupposes Being different does not mean chinawatch.cn market thresholds have been granted this story.
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THE WALL STREET JOURNAL. NY Friday, July 20, 2018 | B6C
PAID ADVERTISEMENT
Trade: U.S.
Seen as Loser
in Conflict
FROM PAGE 1
Cross-border Commerce
on Chinese goods reflects two of his
deeplyheldbeliefsthattradeisazero-
sum game and that other countries
have been taking advantage of the
U.S. for decades with their trade
surplus. “You can see these two
T
he digital highway that is branches in 10 countries, including China. household supplies are proving to of them in the long run.
part of the modern Silk the United States,Britain,Germany, “ B u t i t a l so b r i n gs a b o u t be the favorite products among “A trade war would be very costly
Road is enabling relatively Canada, Japan and Australia. new issues and challenges. By overseas buyers, industry reports to both economies and the global
small Chinese companies This helps build visibility for their l eve ra g i n g A m a zo n ’s g l o ba l show. economy as a whole.”
previously unknown outside the brands globally. A virtuous cycle network and resources we can For instance, the Chinese A study led by Mary Lovely at the
country to share in its export ensues: brighter brands generate provide customized solutions earphone maker Bluedio sells its Peterson Institute showed Trump’s
bonanza. highersales;next,greaterconsumer to meet the needs of Chinese products worldwide via AliExpress, latest tariffs on China will hit non-
That business sent goods to expectation prompts the brands to sellers and cultivate cross-border Alibaba Group Holding Ltd.’s Chinese supply chains even harder.
more than 200 countries and invest in research and development e-commerce talent in China.” business-to-customer website Many Chinese exports to the U.S.
regions serving more than 100 and improve the quality of their Last year sales revenue from that serves foreign users. come from foreign companies
million consumers last year, taking products; this, in turn, encourages third-party sellers on Amazon’s “Sales on Singles Day (on Nov. operating in China.
in 903 billion yuan ($140 billion). firms such as Amazon to launch online marketplace accounted for 11) last year rose about 120% Edward Alden, a senior fellow at
This business is about ambitious plans like “service+,” a program to half of global sales, among which compared with the previous the Council on Foreign Relations,said
targets: A single e-commerce impart Chinese sellers lessons in SMEs accounted for more than fe s t i va l ,” s a i d L i J i a c h e n g , the only thing that will make the U.S.
platform expects to serve 1 billion the art and science of cross-border one-fourth of Amazon’s overall m a r ke t i n g h ea d of B l u e d i o. change course is domestic political
overseas consumers and 1 billion e-commerce. third-party businesses. “AliExpress is a good starting pressure.
domestic buyers by 2025. point.” “My hope is that then there will be
In this world, local companies The company set up a a period of reflection in which all the
and brands may not boast glamor 30-member task force to pursue countries involved will find a way to
but command reach and sales R&D for critical technologies, he come back to the negotiating table,”
that could stoke awe in marketing said. he said.“I still believe there is time to
giants. AliExpress serves 224 countries prevent this trade war from further
One such company is Ecovacs, and regions worldwide with escalation, but we are in a dangerous
which makes robotic vacuum more than 100 million overseas period.”
cleaners. buyers. Its content is available in OnJuly 6 the Office of the U.S.Trade
It receives orders from U.S. 18 languages, including Russian, Representative announced guidance
consumers via the global Spanish and French. for companies on how to apply for
e-commerce company Amazon. “C h i n ese m e rc h a n ts we re exclusion from the newly imposed
Last year during the Black Friday intermediaries,” said Shen Difan, tariffs on products made in China.
shopping carnival, Ecovacs sold an general manager of AliExpress. Companies were told they would have
average of 1,000 vacuum cleaners “They had no say in pricing 90 days to file the requests.
an hour, earning Ecovacs fourth power, but now they can take Li Yong, deputy director of China
rank among overall household part in international competition Association of International Trade
product sales. under a transparent and fair Expert Committee, said, “Even if a
David Qian, president of Ecovacs’ environment created by cross- certain number of U.S. companies
international business department, border e-commerce platforms.” obtained exclusions from the
said, “We’re building our own Alibaba says that by 2025 additional tariffs, it would not relieve
brand and investing 10% of our it expects to serve 2 billion the pressure on its overall economy.
annual revenue in research and consumers worldwide, among High costs imposed on Chinese
development. We have over 1,000 In the Chilean capital, Santiago, warehouse staff process packages that have whom 1 billion will be overseas goods would eventually be passed
patents both at home and abroad.” arrived from China. XINHUA users, Shen said. on to U.S. consumers.”
PAID ADVERTISEMENT
Art of Doing
L
in Dihuan is wildly
popular as a painter,
thanks to his works
Different choose the right form to express
the right feelings.”
As a lover of traditional
Things
such as a series of culture, Lin said he endeavors
ink-and-brush paintings to present Chinese culture in
dedicated to the Chinese his works, and provide a way
24 Solar Terms as well as for young people to get in
two series of stage settings touch with traditions.
tailored for the TV show According to his friend
Rendezvous With Chinese Guan Jianren, a researcher at
Poetry. For the multitalented SunYat-sen University,people
The 43-year-old teaches
communication and design
Lin Dihuan, life is unfulfilled like Lin’s works because they
connect traditional Chinese
at Sun Yat-sen University
in Guangzhou, Guangdong
if you do just one thing or culture with modern life and
awaken the “cultural genes” in
province.
Lin, a Guangdong native,
have just one career. young people.
“They(theyoungergeneration)
became a celebrity after his 24 Liu Xiangrui reports find resonance in his works,” said
Solar Terms work was chosen Guan.
as the illustration for a UNESCO Lin’s caricatures, which feature
heritage listing application. traditional styles and materials, often
Hisillustrationsplayedanimportant reflect his observations of modern
role in getting the 24 Solar Terms society. For example, some mock
— a treasure trove of knowledge people’s addiction to electronic
developed through years of observing devices.
the sun’s annual movements — “I hope that my caricatures can
added to UNESCO’s List of Intangible have a positive effect and make
Cultural Heritage in November 2016. people optimistic,” Lin said.
Lin said he spent nearly three latest season. He has Asked how he deals with his
monthscombiningtraditionalChinese L i n sa i d h i s published celebrity status, Lin, who is now well
elements with more contemporary painting is based on several books on known as a painter, photographer,
aesthetics to produce the 24 Solar traditional calligraphy, on photography, including his calligrapher, columnist and author,
Terms series, which were originally which he spends more than 10 best-seller Waiting forABlossom. said that becoming famous has not
created for a book on photography hours a week. He continues to record the lives of affected his daily life, and that he
that he put out in 2012. “Unlike many professional artists, ordinary Chinese with his lens and manages to strike a good balance
The paintings were based on his I am not too focused on techniques shoot photos about daily life in small between his work and his hobbies.
observations of rural life, which when I paint. I try to look at a painting cities and rural areas. He updates his official account
are closely connected with the with an outsider’s perspective, and Speaking about children, he said on WeChat, a popular social media
solar terms. And he used circular often bear in mind questions like what he remembers being shocked while platform, almost every day, posting
compositions with minimal strokes to thepaintingcanbringtome,toothers, photographing a 5-year-old girl in pictures, new paintings or articles for
depict each solar term’s typical traits. and to the world.” Weining, Guizhou province, during more than 900,000 followers.
“I had no idea back then that my His style changes according to the a trip there in 2016 as the girl was He values his bond with his fans,
work would be a part of a UNESCO themes, he said, but the principle suffering from malnutrition and was whom he treats as friends, he said.
Intangible Cultural Heritage is that he has sympathy and “a soft poorly clothed in winter. As for his opinion of social media
application,” he said. heart” when painting, and tries to So he made up his mind to do and the impact it has on his work,
Later, Lin’s popularity soared even deliver that feeling to viewers. something for those children. In the he said, “In the internet age, sharing
more when he was invited to do stage Lin, who grew up in a rural family in past couple of years, Lin has raised works helps you get quick feedback.
backdrops for Rendezvous With thecoastalcityZhanjiang,Guangdong nearly 1 million yuan ($156,000) So it pushes artists to constantly
Chinese Poetry, broadcast on China province, has loved calligraphy and through sales of his paintings to fund adjust and innovate.”
Central Television. painting since he was a child. educationofthe“left-behind”children Artisnotonlyaboutself-expression,
The 10 works, based on lines from When he was little the family in a remote rural school in Weining. but should resonate with people, he
10 ancient poems, impressed many was too poor to afford regular art He has also organized several trips said.
education, so he taught himself. The amateur painter and photographer to send aid there, including clothes, “WhenIcreate,Icareaboutviewers’
with their illustrations of the poems’
Lin Dihuan and the paintings among
content and the painting techniques. He used to spend his pocket books, stationery and snacks. feelings, and try to make my work
his series of ink-and-brush works that
Hewasaskedagainlastyeartopaint money on books and magazines are dedicated to the Chinese 24 Solar During his most recent visit to the graceful,light and happy,a little candy
stage backdrops for the program’s from recycling centers, and copy the Terms. PHOTOS PROVIDED TO CHINA DAILY area,Lintookalongpaintingmaterials for viewers.”
paintings from them. for the children.
To cut costs he learned to use a Zhou Lu, one of Lin’s photography
minimum palette and the simplest and“do anything I find interesting.” enthusiast friends, said,“He is always
materials. He became one of the first- energetic.”
Lin started doing caricatures for generation web designers in China in Zhou also remembers Lin walking
magazines when he was in middle the 1990s, and thanks to that he was around a market for hours to find
school. Later he heeded his father’s later transferred to the university’s suitable clothes for the children.
advice and studied clinical medicine internet center, before eventually In recent years Lin has spent a
in college. taking on his current position. lot of his time on painting, including
However, instead of becoming a He took up photography in 2007 caricatures, which he regards as an
doctorhestarteddoingadministrative and is now a member of the National important way to entertain himself
work at the university because he Photographers Association, and and relax.
felt he was too “unrestrained and was recognized in 2012 as one of Painting, photography, calligraphy
vigorous”to be a doctor. the most influential photographers and writing are just different means
Since then, he has made full use of of the year by the newspaper China of expression, Lin said.
his free time to pursue his hobbies Photography. “So, the most important thing is to
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Metal & Petroleum Futures Jan'19 2.965 3.001 t 2.939 2.992 .038 139,823 Sept 484.90 490.60 484.90 484.90 –15.00 4,408 Dec 96.9950 97.0350 96.9650 97.0200 .0200 1,815,031
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Sept 2.7655 2.7785 t 2.6735 2.6955 –0.0645 167,541 Sept 347.00 352.00 345.00 351.25 4.00 643,866 Sept .8894 .8958 t .8868 .8925 .0028 212,384
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Aug 1227.30 1229.60 t 1210.70 1224.00 –3.90 245,732 Aug
Oct 1231.90 1234.20 t 1215.70 1228.70 –4.20 32,489 Sept 234.50 235.25 229.00 232.00 –2.00 1,668 Coffee (ICE-US)-37,500 lbs.; cents per lb. Sept .7600 .7606 .7532 .7553 –.0044 151,062
Dec 1237.60 1239.50 t 1221.00 1234.00 –4.40 207,670 Dec 239.00 241.00 233.50 237.25 –3.00 3,168 July 105.80 105.80 t 105.80 105.25 .65 1 British Pound (CME)-£62,500; $ per £
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1.3089 1.3029 –.0048 806
June 1253.50 1256.90 t 1243.30 1251.70 –4.60 6,418 Aug 842.00 846.75 836.75 846.00 3.75 81,332 Sugar-World (ICE-US)-112,000 lbs.; cents per lb. Sept 1.3107 t 1.2988
1.3114 1.3047 –.0048 185,160
Dec 1265.90 1265.90 t 1262.90 1271.10 –4.60 3,746 Nov 857.50 862.50 851.75 861.50 3.75 435,342 Oct 11.08 11.11 10.93 10.97 –.11 518,565 Swiss Franc (CME)-CHF 125,000; $ per CHF
Palladium (NYM) - 50 troy oz.; $ per troy oz. Soybean Meal (CBT)-100 tons; $ per ton. March'19 11.78 11.79 11.64 11.67 –.10 279,975 Sept 1.0060 1.0089 1.0004 1.0061 .0003 91,644
Sept 903.00 905.90 t 853.30 866.20 –35.60 18,870 Aug 328.50 330.20 326.00 328.80 .60 52,544 Sugar-Domestic (ICE-US)-112,000 lbs.; cents per lb. Australian Dollar (CME)-AUD 100,000; $ per AUD
Dec 899.90 900.30 t 850.60 863.10 –35.60 2,347 Dec 325.70 327.60 323.40 326.10 .50 203,995 Sept 25.22 25.22 25.22 25.22 –.28 1,592 Aug .7430 .7434 .7327 .7359 –.0042 702
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Platinum (NYM)-50 troy oz.; $ per troy oz. Aug 28.08 28.12 27.71 27.83 –.24 52,723 Cotton (ICE-US)-50,000 lbs.; cents per lb. Oct .7424 .7434 t .7329 .7360 –.0042 311
July 814.40 814.40 798.00 800.60 –13.10 15 Dec 28.49 28.52 28.11 28.21 –.26 238,509 Oct 88.81 88.81 88.30 88.30 –.53 142 Dec .7401 .7435 .7328 .7362 –.0042 523
Oct 820.60 822.10 t 794.50 806.30 –11.50 77,842 Rough Rice (CBT)-2,000 cwt.; $ per cwt. Dec 88.13 88.46 87.30 87.55 –.53 176,210 March'19 .7392 .7392 t .7361 .7368 –.0042 128
Silver (CMX)-5,000 troy oz.; $ per troy oz. Sept 1193.00 1193.00 1171.50 1186.50 4.00 6,489 Orange Juice (ICE-US)-15,000 lbs.; cents per lb. Mexican Peso (CME)-MXN 500,000; $ per MXN
July 15.210 15.325 t 15.135 15.340 –0.163 670 Nov 1165.00 1173.00 1153.50 1169.00 2.00 1,215 Sept 169.00 170.90 168.25 169.95 .35 12,116 Sept .05248 .05249 .05171 .05207 –.00048 157,444
Sept 15.565 15.590 t 15.185 15.402 –0.172 154,067 Wheat (CBT)-5,000 bu.; cents per bu. Nov 169.30 171.00 168.50 170.30 .65 2,835 Dec .05124 .05149 .05103 .05134 –.00047 106
Crude Oil, Light Sweet (NYM)-1,000 bbls.; $ per bbl. Sept 493.75 505.75 490.25 504.25 9.75 204,581 Euro (CME)-€125,000; $ per €
Aug 68.95 70.17 67.80 69.46 0.70 60,863 Dec 510.50 521.50 507.00 520.50 9.75 150,957 Aug 1.1663 1.1694 1.1600 1.1664 –.0006 1,326
Sept 67.89 68.79 66.62 68.24 0.49 474,641 Wheat (KC)-5,000 bu.; cents per bu. Interest Rate Futures Sept 1.1695 1.1728 1.1623 1.1694 –.0006 480,038
Oct 66.46 67.21 65.32 66.53 0.15 240,524 Sept 488.00 497.50 485.00 496.50 8.75 136,643 Treasury Bonds (CBT)-$100,000; pts 32nds of 100%
Dec 65.54 66.26 64.50 65.60 0.07 290,490 Dec 513.00 522.50 511.25 521.50 8.50 86,752 Sept 144-260 145-180 144-120 145-090 18.0 838,199 Index Futures
Jan'19 65.27 65.86 64.20 65.26 0.07 157,905 Wheat (MPLS)-5,000 bu.; cents per bu. Dec 143-290 144-220 143-220 144-160 18.0 701
Dec 61.80 62.43 61.02 61.87 0.11 207,742 Sept 528.00 537.25 527.25 536.75 8.75 30,214 Treasury Notes (CBT)-$100,000; pts 32nds of 100% Mini DJ Industrial Average (CBT)-$5 x index
NY Harbor ULSD (NYM)-42,000 gal.; $ per gal. Dec 546.50 555.50 545.50 554.75 8.50 17,615 Sept 25164 25209 25034 25059 –102 85,785
Sept 120-025 120-135 119-275 120-095 7.5 3,714,797
Aug 2.0907 2.1093 2.0665 2.0901 –.0002 67,053 Cattle-Feeder (CME)-50,000 lbs.; cents per lb. S&P 500 Index (CME)-$250 x index
Dec 119-275 120-070 119-240 120-045 8.0 1,901 Sept 2815.70 2817.50 2801.00 2805.30 –10.70 62,101
Sept 2.0956 2.1144 2.0713 2.0945 –.0007 109,418 Aug 154.500 154.925 153.800 154.450 … 15,535 5 Yr. Treasury Notes (CBT)-$100,000; pts 32nds of 100%
Gasoline-NY RBOB (NYM)-42,000 gal.; $ per gal. Sept 154.775 155.000 153.975 154.775 .125 12,076 Mini S&P 500 (CME)-$50 x index
Sept 113-145 113-210 113-100 113-187 4.5 3,836,495 Sept 2814.50 2818.00 2800.25 2805.25 –10.75 2,696,845
Aug 2.0476 2.0580 2.0172 2.0435 –.0009 59,131 Cattle-Live (CME)-40,000 lbs.; cents per lb. 2 Yr. Treasury Notes (CBT)-$200,000; pts 32nds of 100%
Sept 2.0186 2.0305 1.9895 2.0135 –.0024 129,123 Aug 109.050 109.300 108.550 108.900 –.050 66,719 Dec 2819.00 2821.50 2804.50 2809.25 –10.75 52,763
Sept 105-247 105-267 105-232 105-260 1.5 1,928,864 Mini S&P Midcap 400 (CME)-$100 x index
Natural Gas (NYM)-10,000 MMBtu.; $ per MMBtu. Dec 114.175 114.700 113.750 114.425 .225 62,584
Dec 105-195 105-210 105-195 105-207 1.5 971 Sept 2002.10 2016.40 1994.20 2012.70 8.40 83,796
Aug 2.733 2.776 2.704 2.769 .048 107,901 Hogs-Lean (CME)-40,000 lbs.; cents per lb.
Sept 2.702 2.743 t 2.671 2.736 .047 277,327 Aug 67.525 68.475 t 66.850 67.250 .050 37,672
30 Day Federal Funds (CBT)-$5,000,000; 100 - daily avg. Mini Nasdaq 100 (CME)-$20 x index
July 98.088 98.090 98.085 98.085 … 230,999 Sept 7400.0 7416.0 s 7354.8 7367.8 –36.8 243,337
Oct 2.718 2.758 t 2.688 2.751 .046 154,297 Oct 52.050 53.550 51.475 52.225 .300 108,041
Nov 2.768 2.803 t 2.737 2.797 .042 121,906 Lumber (CME)-110,000 bd. ft., $ per 1,000 bd. ft. Oct 97.855 97.865 97.855 97.855 … 283,610 Dec 7436.3 7441.8 s 7382.5 7394.5 –36.8 1,818
10 Yr. Del. Int. Rate Swaps (CBT)-$100,000; pts 32nds of 100% Mini Russell 2000 (CME)-$50 x index
Sept 95.734 96.047 95.719 95.984 .250 31,308 Sept 1694.70 1707.20 1687.00 1705.50 11.30 561,094
1 Month Libor (CME)-$3,000,000; pts of 100% Mini Russell 1000 (CME)-$50 x index
Cash Prices | WSJ.com/commodities Thursday, July 19, 2018 Aug ... ...
Eurodollar (CME)-$1,000,000; pts of 100%
... 97.9050 .0050 3,135 Sept 1561.20 1562.60
U.S. Dollar Index (ICE-US)-$1,000 x index
1555.80 1558.90 –6.00 10,579
These prices reflect buying and selling of a variety of actual or “physical” commodities in the marketplace— Aug 97.6075 97.6150 97.6000 97.6125 .0050 140,796 Sept 94.82 95.44 s 94.67 94.94 .13 44,588
Dec 97.3200 97.3500 97.3050 97.3350 .0100 1,823,953 Dec 94.38 95.00 s 94.30 94.52 .12 1,593
separate from the futures price on an exchange, which reflects what the commodity might be worth in future June'19 97.0950 97.1300 97.0700 97.1150 .0150 1,354,920 Source: SIX Financial Information
months.
Thursday Thursday Thursday
Energy
(U.S.$ equivalent)
Coins,wholesale $1,000 face-a
*15.4400
11306
SoybeanMeal,Cent IL,rail,ton48%-u
Soybeans,No.1 yllw IL-bp,u
339.30
8.1400
Bonds | WSJ.com/bonds
Propane,tet,Mont Belvieu-g 0.8938 Other metals Wheat,Spring14%-pro Mnpls-u 6.6175
Butane,normal,Mont Belvieu-g 1.1405 LBMA Platinum Price PM *810.0
Wheat,No.2 soft red,St.Louis-bp,u 5.1250 Tracking Bond Benchmarks
NaturalGas,HenryHub-i 2.720 Wheat - Hard - KC (USDA) $ per bu-u 5.2650
Platinum,Engelhard industrial 801.0 Wheat,No.1soft white,Portld,OR-u 5.8250 Return on investment and spreads over Treasurys and/or yields paid to investors compared with 52-week
NaturalGas,TranscoZone3-i 2.700 Platinum,Engelhard fabricated 901.0
NaturalGas,TranscoZone6NY-i 2.770 highs and lows for different types of bonds
Palladium,Engelhard industrial 891.0 Food
NaturalGas,PanhandleEast-i 2.430 Palladium,Engelhard fabricated 991.0 Total Total
NaturalGas,Opal-i 2.470 Aluminum, LME, $ per metric ton *2040.0 Beef,carcass equiv. index return YTD total Yield (%) return YTD total Yield (%)
NaturalGas,MarcellusNE PA-i 2.310 Copper,Comex spot 2.6860 choice 1-3,600-900 lbs.-u 179.87 close return (%) Index Latest Low High close return (%) Index Latest Low High
NaturalGas,HaynesvilleN.LA-i 2.610 Iron Ore, 62% Fe CFR China-s n.a. select 1-3,600-900 lbs.-u 170.78
1.1248 Broad Market Bloomberg Barclays Mortgage-Backed Bloomberg Barclays
Coal,C.Aplc.,12500Btu,1.2SO2-r,w 69.150 Shredded Scrap, US Midwest-s,m n.a. Broilers, National comp wghtd-u,w
Coal,PwdrRvrBsn,8800Btu,0.8SO2-r,w 13.050 Steel, HRC USA, FOB Midwest Mill-s n.a. Butter,AA Chicago 2.2500 1976.32 -0.6 Mortgage-Backed 3.420 2.660 3.580
Cheddar cheese,bbl,Chicago 131.50 1921.12 -1.2 U.S. Aggregate 3.290 2.380 3.430
Metals Fibers and Textiles Cheddar cheese,blk,Chicago 153.25 U.S. Corporate Indexes Bloomberg Barclays 1945.16 -0.5 Ginnie Mae (GNMA) 3.360 2.630 3.540
Milk,Nonfat dry,Chicago lb. 76.75
Gold, per troy oz Cocoa,Ivory Coast-w n.a. 2730.94 -2.4 U.S. Corporate 3.970 3.030 4.070 1158.74 -0.7 Fannie mae (FNMA) 3.430 2.670 3.590
Burlap,10-oz,40-inch NY yd-n,w 0.5700
Engelhard industrial 1219.72 Coffee,Brazilian,Comp 1.0733
Engelhard fabricated 1311.20
Cotton,1 1/16 std lw-mdMphs-u 0.8680
Coffee,Colombian, NY 1.3105 2589.98 -1.2 Intermediate 3.680 2.530 3.760 1783.63 -0.8 Freddie Mac (FHLMC) 3.450 2.680 3.610
Cotlook 'A' Index-t *98.20
Handy & Harman base 1217.55 Eggs,large white,Chicago-u 1.4050 523.49 0.2 Muni Master 2.392 1.736 2.653
Hides,hvy native steers piece fob-u 55.250 3735.07 -5.1 Long term 4.580 3.990 4.750
Handy & Harman fabricated 1351.48 Flour,hard winter KC 15.90
Wool,64s,staple,Terr del-u,w n.a.
LBMA Gold Price AM *1223.45 Hams,17-20 lbs,Mid-US fob-u n.a. 559.83 -1.6 Double-A-rated 3.400 2.470 3.500 364.65 -0.2 7-12 year 2.476 1.744 2.702
LBMA Gold Price PM *1224.50 Grains and Feeds Hogs,Iowa-So. Minnesota-u 74.42
Krugerrand,wholesale-e 1273.48 Pork bellies,12-14 lb MidUS-u n.a. 704.85 -2.4 Triple-B-rated 4.270 3.340 4.370 411.72 -0.1 12-22 year 2.789 2.213 3.004
Maple Leaf-e 1285.73 Pork loins,13-19 lb MidUS-u 1.0008
Barley,top-quality Mnpls-u n.a. High Yield Bonds Merrill Lynch 399.72 -0.1 22-plus year 3.175 2.716 3.411
American Eagle-e 1285.73 Steers,Tex.-Okla. Choice-u n.a.
Bran,wheat middlings, KC-u,w 63
Mexican peso-e 1484.38 Steers,feeder,Okla. City-u,w 162.63 420.38 0.7 High Yield Constrained 6.379 5.373 6.619 Global Government J.P. Morgan†
Corn,No. 2 yellow,Cent IL-bp,u 3.2000
Austria crown-e 1203.25 Corn gluten feed,Midwest-u,w 119.6 Fats and Oils 545.17 0.2 Global Government 1.550 1.300 1.680
Austria phil-e 1285.73 436.90 4.0 Triple-C-rated 9.972 9.597 11.091
Corn gluten meal,Midwest-u,w 433.1
Silver, troy oz. Cottonseed meal-u,w 250 Corn oil,crude wet/dry mill-u,w 28.7500 2880.07 0.7 High Yield 100 6.015 4.948 6.319 763.16 1.1 Canada 2.110 1.930 2.450
Engelhard industrial 15.3000 Hominy feed,Cent IL-u,w 98 Grease,choice white,Chicago-h 0.2650
Engelhard fabricated 18.3600 Meat-bonemeal,50% pro Mnpls-u,w 268 Lard,Chicago-u n.a. 378.04 -0.2 Global High Yield Constrained 6.075 4.934 6.298 374.04 1.0 EMU§ 1.132 0.956 1.362
Handy & Harman base 15.2910 Oats,No.2 milling,Mnpls-u 2.8125 Soybean oil,crude;Centl IL-u 0.2671
0.2850 305.14 -0.4 Europe High Yield Constrained 3.246 1.897 3.611 722.99 1.8 France 0.740 0.690 1.040
Handy & Harman fabricated 19.1140 Rice, Long Grain Milled, No. 2 AR-u,w 25.75 Tallow,bleach;Chicago-h
LBMA spot price *£11.8500 Sorghum,(Milo) No.2 Gulf-u 6.6075 Tallow,edible,Chicago-u 0.3200 U.S Agency Bloomberg Barclays 515.59 1.6 Germany 0.370 0.340 0.740
1630.82 -0.4 U.S Agency 2.820 1.690 2.870 291.35 0.9 Japan 0.340 0.340 0.430
KEY TO CODES: A=ask; B=bid; BP=country elevator bids to producers; C=corrected; E=Manfra,Tordella & Brooks; G=ICE; H=Hurley Brokerage; I=Natural Gas Intelligence;
M=monthly; N=nominal; n.a.=not quoted or not available; R=SNL Energy; S=Platts-TSI; T=Cotlook Limited; U=USDA; W=weekly, Z=not quoted. *Data as of 7/18 1460.78 -0.1 10-20 years 2.730 1.510 2.760 570.73 1.8 Netherlands 0.460 0.450 0.830
Source: WSJ Market Data Group 3311.93 -2.2 20-plus years 3.300 2.730 3.550 943.18 1.3 U.K. 1.480 1.340 1.830
2427.11 -1.5 Yankee 3.680 2.610 3.760 779.60 -3.5 Emerging Markets ** 6.505 5.279 6.822
Exchange-Traded Portfolios | WSJ.com/ETFresearch *Constrained indexes limit individual issuer concentrations to 2%; the High Yield 100 are the 100 largest bonds † In local currency § Euro-zone bonds
** EMBI Global Index Sources: Merrill Lynch; Bloomberg Barclays; J.P.Morgan
Closing Chg YTD
Largest 100 exchange-traded funds, latest session ETF Symbol Price (%) (%)
Thursday, July 19, 2018 Closing Chg YTD SchwabUS SC SCHA 76.26 0.53 9.3
Global Government Bonds: Mapping Yields
ETF Symbol Price (%) (%) SPDR DJIA Tr DIA 250.79 –0.49 1.4
Closing Chg YTD
SPDR S&PMdCpTr MDY 365.62 0.43 5.9
Yields and spreads over or under U.S. Treasurys on benchmark two-year and 10-year government bonds in
ETF Symbol Price (%) (%) iShMSCI EAFE EFA 67.75 –0.21 –3.6
iShMSCI EAFE SC SCZ 62.81 –0.22 –2.6
SPDR S&P 500 SPY 280.00 –0.38 4.9 selected other countries; arrows indicate whether the yield rose(s) or fell (t) in the latest session
AlerianMLPETF AMLP 10.60 2.32 –1.8
SPDR S&P Div SDY 94.87 0.40 0.4
CnsmrDiscSelSector XLY 112.65 –0.23 14.1 iShMSCIEmgMarkets EEM 43.34 –1.23 –8.0 Country/ Yield (%) Spread Under/Over U.S. Treasurys, in basis points
TechSelectSector XLK 72.53 –0.36 13.4
CnsStapleSelSector XLP 52.54 0.06 –7.6 iShMSCIEurozone EZU 41.98 –0.43 –3.2 Coupon (%) Maturity, in years Latest(l)-2 -1 0 1 2 3 4 Previous Month ago Year ago Latest Prev Year ago
UtilitiesSelSector XLU 52.66 0.92 –0.0
iShMSCIJapan EWJ 58.01 0.02 –3.2
EnSelectSectorSPDR XLE 75.15 0.03 4.0
VanEckGoldMiner GDX 21.58 –1.28 –7.1 2.500 U.S. 2 2.599 t l 2.607 2.549 1.360
FinSelSectorSPDR XLF 27.51 –1.50 –1.4 iShNasdaqBiotech IBB 118.35 0.10 10.8
FT DJ Internet FDN 144.48 –1.12 31.5 iShNatlMuniBd MUB 109.40 0.12 –1.2
VangdInfoTech VGT 190.33 –0.10 15.5 2.875 10 2.845 t l 2.872 2.897 2.272
VangdSC Val VBR 139.54 0.41 5.1
HealthCareSelSect XLV 86.93 –0.56 5.1 iShRussell1000Gwth IWF 149.46 –0.35 11.0
VangdSC Grwth VBK 183.48 0.40 14.1
4.500 Australia 2 2.065 s l 2.028 2.017 1.907 -53.4 -58.0 54.7
IndSelSectorSPDR XLI 74.52 –0.04 –1.5 iShRussell1000 IWB 156.26 –0.31 5.1
InvscQQQI QQQ 179.03 –0.50 14.9 iShRussell1000Val IWD 123.37 –0.32 –0.8
VangdDivApp VIG 105.07 –0.12 3.0 2.250 10 2.668 s l 2.648 2.634 2.732 -17.7 -22.4 46.1
VangdFTSEDevMk VEA 43.15 –0.42 –3.8
iShRussell2000Gwth 213.68 0.65 14.5
InvscS&P500EW RSP 104.50 –0.02 3.4 IWO
VangdFTSE EM VWO 42.36 –1.14 –7.7 0.000 France 2 -0.449 t l -0.428 -0.543 -0.412 -304.8 -303.6 -177.2
InvscSrLoan BKLN 23.05 0.04 0.0 iShRussell2000 IWM 169.17 0.71 11.0
iSh1-3YCreditBond CSJ 103.67 0.04 –0.8 iShRussell2000Val IWN 134.87 0.72 7.3 VangdFTSE Europe VGK 56.97 –0.28 –3.7 0.750 10 0.628 s l 0.628 0.648 0.798 -221.7 -224.4 -147.4
iShRussell3000 IWV 167.03 –0.23 5.6 VangdFinls VFH 69.75 –1.15 –0.4
iSh3-7YTreasuryBd IEI 119.95 0.19 –1.8
VangdFTSEAWxUS VEU 52.27 –0.51 –4.5 0.000 Germany 2 -0.625 s l -0.632 -0.635 -0.636 -322.4 -323.9 -199.7
iShCoreMSCIEAFE IEFA 63.94 –0.25 –3.3 iShRussellMid-Cap IWR 217.74 0.16 4.6
iShCoreMSCIEmgMk IEMG 52.43 –1.21 –7.9 iShRussellMCValue IWS 89.85 0.17 0.8 VangdGrowth VUG 155.51 –0.26 10.6 0.500 10 0.271 t l 0.284 0.375 0.543 -257.4 -258.8 -172.9
iShCoreMSCITotInt IXUS 60.41 –0.49 –4.2 iShS&PMC400Growth IJK 232.66 0.27 7.8 VangdHiDiv VYM 84.85 –0.26 –0.9
iShS&P500Growth 169.29 –0.42 10.8 VangdIntermBd BIV 81.09 0.22 –3.3 0.350 Italy 2 0.538 t l 0.595 0.593 0.059 -206.1 -201.2 -130.1
iShCoreS&P500 IVV 281.92 –0.41 4.9 IVW
VangdIntrCorpBd VCIT 83.94 0.20 –3.9 2.000 10 2.503 t l 2.516 2.544 2.192 -35.5 -8.0
iShCoreS&P MC IJH 200.63 0.43 5.7 iShS&P500Value IVE 112.64 –0.32 –1.4 -34.2
iShCoreS&P SC IJR 87.04 0.78 13.3 iShUSPfdStk PFF 37.64 0.35 –1.1 VangdLC VV 128.85 –0.38 5.1
iShS&PTotlUSStkMkt ITOT 64.60 –0.25 5.7 iShShortTreaBd SHV 110.37 ... 0.1 VangdMC VO 162.57 0.09 5.0 0.100 Japan 2 -0.130 t l -0.125 -0.135 -0.109 -272.9 -273.2 -146.9
112.39 0.14 –1.5 VangdMC Val VOE 113.15 0.02 1.4 0.100 10 0.040 t l 0.045 0.028 0.075 -282.7 -219.6
iShCoreUSAggBd AGG 106.48 0.15 –2.6 iShTIPSBondETF TIP -280.5
iShSelectDividend DVY 98.89 0.23 0.3 iSh1-3YTreasuryBd SHY 83.25 0.05 –0.7 VangdRealEst VNQ 81.87 1.17 –1.3
iShEdgeMSCIMinEAFE EFAV 71.85 –0.37 –1.5 iSh7-10YTreasuryBd IEF 102.58 0.27 –2.8 VangdS&P500 VOO 257.22 –0.38 4.9 1.150 Spain 2 -0.282 t l -0.277 -0.313 -0.285 -288.1 -288.5 -164.5
VangdST Bond BSV 78.19 0.08 –1.2
iShEdgeMSCIMinUSA USMV 54.63 0.02 3.5 iSh20+YTreasuryBd TLT 122.26 0.63 –3.6 1.400 10 1.280 s l 1.279 1.241 1.545 -156.5 -159.2 -72.6
iShEdgeMSCIUSAMom MTUM 113.55 –0.68 10.1 iShRussellMCGrowth IWP 132.01 –0.02 9.4 VangdSTCpBd VCSH 78.15 0.09 –1.5
iShFloatingRateBd FLOT 50.96 –0.01 0.3 PIMCOEnhShMaturity MINT 101.53 0.04 –0.0 VangdSC VB 161.18 0.44 9.1 2.000 U.K. 2 0.726 t l 0.750 0.712 0.277 -187.3 -185.8 -108.3
iShGoldTr IAU 11.73 –0.34 –6.2 SPDR BlmBarcHYBd JNK 35.70 –0.06 –2.8 VangdTotalBd BND 79.34 0.19 –2.7
4.250 10 1.189 t l 1.229 1.282 1.197 -165.6 -164.3 -107.5
iShiBoxx$InvGrCpBd LQD 115.59 0.16 –4.9 SPDR Gold GLD 115.81 –0.43 –6.3 VangdTotIntlBd BNDX 54.99 0.13 1.1
iShiBoxx$HYCpBd HYG 85.58 –0.05 –1.9 SchwabIntEquity SCHF 33.33 –0.36 –2.2 VangdTotIntlStk VXUS 54.38 –0.51 –4.3 Source: Tullett Prebon
145.10 –0.24 5.7
iShJPMUSDEmgBd
iShMBSETF
EMB
MBB
108.66
104.21
–0.02
0.15
–6.4
–2.2
SchwabUS BrdMkt
SchwabUS Div
SCHB
SCHD
68.17
50.67
–0.22
0.06
5.7
–1.0
VangdTotalStk
VangdTotlWrld
VTI
VT 74.75 –0.37 0.7 Corporate Debt
iShMSCI ACWI ACWI 72.54 –0.47 0.6 SchwabUS LC SCHX 67.13 –0.31 5.3 VangdValue VTV 106.74 –0.48 0.4 Price moves by a company's debt in the credit markets sometimes mirror and sometimes anticipate, moves in
that same company’s share price.
Borrowing Benchmarks | WSJ.com/bonds Investment-grade spreads that tightened the most…
Spread*, in basis points Stock Performance
Issuer Symbol Coupon (%) Maturity Current One-day change Last week Close ($) % chg
Money Rates July 19, 2018
Kinder Morgan KMI 5.050 Feb. 15, ’46 213 –20 235 17.99 1.18
Key annual interest rates paid to borrow or lend money in U.S. and international markets. Rates below are a Emera US Finance EMACN 2.700 June 15, ’21 80 –16 n.a. ... ...
W W Grainger GWW 4.200 May 15, ’47 121 –12 n.a. 341.45 0.73
guide to general levels but don’t always represent actual transactions.
Aercap Ireland Capital Dac* AER 4.500 May 15, ’21 107 –11 114 … …
Inflation Week —52-WEEK— Week —52-WEEK— Citigroup C 6.300 May 15, ’49 285 –11 298 68.99 –1.23
Latest ago High Low Latest ago High Low Energy Transfer Partners ETP 5.800 June 15, ’38 256 –11 267 20.06 3.40
June index Chg From (%)
level May '18 June '17 Bid 1.8800 1.9100 1.9200 1.0600 Three month -0.358 -0.358 -0.349 -0.389 Williams Partners WPZ 4.000 Sept. 15, ’25 132 –10 141 43.31 3.29
Offer 1.9100 1.9300 2.1500 1.0700 Six month -0.319 -0.313 -0.298 -0.339 Allegion US Holding ALLE 3.200 Oct. 1, ’24 137 –8 138 … …
U.S. consumer price index One year -0.237 -0.232 -0.185 -0.263
All items 251.989 0.16 2.9
Treasury bill auction …And spreads that widened the most
Core 257.697 0.09 2.3 4 weeks 1.880 1.850 1.880 0.940 Euro interbank offered rate (Euribor)
Warner Media T 4.050 Dec. 15, ’23 123 24 134 … …
13 weeks 1.980 1.945 1.980 1.000 One month -0.369 -0.370 -0.366 -0.374
International rates 26 weeks 2.140 2.100 2.140 1.105
Royal Bank of Scotland RBS 7.500 Aug. 10, ’49 326 23 305 6.43 –0.92
Three month -0.321 -0.321 -0.321 -0.332 Discovery Communications DISCA 6.350 June 1, ’40 251 11 n.a. 26.69 0.41
Week 52-Week Secondary market Six month -0.269 -0.271 -0.267 -0.279 Barclays BACR 4.375 Jan. 12, ’26 184 10 189 ... ...
Latest ago High Low One year -0.179 -0.179 -0.151 -0.194
Fannie Mae Dominion Energy Gas Holdings D 3.550 Nov. 1, ’23 100 10 n.a. … …
Prime rates 30-year mortgage yields Value 52-Week HSBC Holdings HSBC 6.000 May 22, ’49 383 10 377 47.14 –0.61
Latest Traded High Low Digital Realty Trust 4.450 July 15, ’28 150 8 153 116.68 1.22
U.S. 5.00 5.00 5.00 4.25 30 days 4.166 4.170 4.344 3.253
DLR
Canada 3.70 3.70 3.70 2.95 60 days 4.189 4.195 4.371 3.281 DTCC GCF Repo Index
Japan 1.475 1.475 1.475 1.475
Treasury 1.954 24.700 2.233 1.022
High-yield issues with the biggest price increases…
Other short-term rates Bond Price as % of face value Stock Performance
Policy Rates MBS 1.973 75.100 2.321 1.038 Issuer Symbol Coupon (%) Maturity Current One-day change Last week Close ($) % chg
Euro zone 0.00 0.00 0.00 0.00 Week 52-Week
Open Implied
Switzerland 0.50 0.50 0.50 0.50 Latest ago high low
Settle Change Interest Rate
Ultra Resources UPL 6.875 April 15, ’22 71.875 3.38 68.500 … ...
Britain 0.50 0.50 0.50 0.25 Murray Energy MURREN 11.250 April 15, ’21 75.000 2.63 65.625 ... ...
Australia 1.50 1.50 1.50 1.50 Call money DTCC GCF Repo Index Futures MSCI MSCI 4.750 Aug. 1, ’26 98.562 1.06 97.125 170.69 –0.49
3.75 3.75 3.75 3.00 Altice Luxembourg S.A. ATCNA 7.625 Feb. 15, ’25 94.096 1.03 94.375 ... ...
Overnight repurchase Treasury Jly 98.005 0.002 892 1.995
U.S. 1.96 1.95 2.18 1.01 Commercial paper (AA financial) Treasury Aug 97.985 0.005 1272 2.015 Acosta ACOSTA 7.750 Oct. 1, ’22 48.750 1.00 46.000 ... ...
90 days 2.21 2.11 2.31 1.14 Treasury Sep 97.940 unch. 662 2.060 Tronox Finance TROX 5.750 Oct. 1, ’25 97.473 0.85 n.a. … …
U.S. government rates SM Energy SM 5.000 Jan. 15, ’24 95.063 0.81 94.432 26.53 0.23
Libor Weekly survey
Discount
2.50 2.50 2.50 1.75
One month 2.08100 2.07163 2.10288 1.22667
Latest Week ago Year ago …And with the biggest price decreases
Three month 2.34706 2.33919 2.36906 1.30911
Six month 2.52725 2.51963 2.52725 1.44767 American Tire Distributors ATD 10.250 March 1, ’22 31.000 –3.00 28.250 ... ...
Federal funds One year 2.80744 2.78531 2.80744 1.69511
Freddie Mac Macquarie Bank MQGAU 6.125 March 8, ’49 90.500 –1.75 90.625 ... ...
Effective rate 1.9300 1.9300 1.9500 1.0700 30-year fixed 4.52 4.53 3.96 Novelis HNDLIN 5.875 Sept. 30, ’26 95.000 –1.71 96.438 ... ...
High 2.1500 2.1500 2.1500 1.3125 Euro Libor 15-year fixed 4.00 4.02 3.23 Windstream Services WIN 7.750 Oct. 15, ’20 90.000 –1.63 91.500 3.70 –0.27
Low 1.8700 1.8700 1.9000 0.9700 One month -0.402 -0.398 -0.394 -0.420 Five-year ARM 3.87 3.86 3.21
Uniti UNIT 8.250 Oct. 15, ’23 93.750 –1.50 96.500 18.64 –1.17
Notes on data: First Quantum Minerals FMCN 6.875 March 1, ’26 94.750 –1.25 96.000 ... ...
U.S. prime rate is the base rate on corporate loans posted by at least 70% of the 10 largest U.S. banks, and is effective June 14, 2018. Other prime rates Rent–A–Center RCII 6.625 Nov. 15, ’20 99.070 –0.95 100.500 14.74 0.27
aren’t directly comparable; lending practices vary widely by location; Discount rate is effective June 14, 2018. DTCC GCF Repo Index is Depository Trust & Veritas US VERITS 10.500 Feb. 1, ’24 85.000 –0.88 84.250 ... ...
Clearing Corp.'s weighted average for overnight trades in applicable CUSIPs. Value traded is in billions of U.S. dollars. Federal-funds rates are Tullett Prebon
rates as of 5:30 p.m. ET. Futures on the DTCC GCF Repo Index are traded on NYSE Liffe US. *Estimated spread over 2-year, 3-year, 5-year, 10-year or 30-year hot-run Treasury; 100 basis points=one percentage pt.; change in spread shown is for Z-spread.
Sources: Federal Reserve; Bureau of Labor Statistics; DTCC; SIX Financial Information; Note: Data are for the most active issue of bonds with maturities of two years or more
Tullett Prebon Information, Ltd. Sources: MarketAxess Corporate BondTicker; WSJ Market Data Group
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B8 | Friday, July 20, 2018 THE WALL STREET JOURNAL.
–20
ment Fund had agreed to up to
$20 billion in matching com-
mitments, which could eventu-
ally take the infrastructure
Blackstone said it paid a 10-
cent special dividend and re-
purchased 2.2 million of its
shares during the second
$4.14B
BNY Mellon’s total revenue in the
S&P 500 climbed 2.9% in the Jan. Feb. March April May June July
fund to $40 billion. quarter as part of a previously second quarter
second quarter, despite wor- Also during the quarter, announced buyback.
ries about trades tensions, as Source: FactSet THE WALL STREET JOURNAL. Blackstone sold out of the last Blackstone’s second-quarter
technology stocks overcame of its remaining stake in Hil- distributable earnings, the
their first-quarter slump. sensus estimate of 74 cents a structure and become a corpo- ton Worldwide Holdings Inc., share of profits that could be help modernize the custody
The investment firm’s eco- share by analysts polled by ration. Blackstone, whose closing out the most profitable returned to shareholders, fell bank and pull it out of its low-
nomic profit, which reflects FactSet. shares have climbed 15% over private-equity investment in to $700.1 million, or 56 cents a growth doldrums. He has re-
changes in the value of unreal- Analysts have been watch- the period, including a 1.6% real estate ever. Proceeds from share, from $781.4 million, or vamped his management team,
ized investments, rose to $1.08 ing shares of Blackstone rival decline Thursday, said it is that and the sale of three U.K. 63 cents a share, a year earlier. built out sales coverage in cer-
billion, or 90 cents a share, KKR & Co., which have still weighing whether to make office properties, led to $4.3 Blackstone said it would pay a tain businesses and increased
from $695.7 million, or 58 climbed 26% since it an- a similar move. billion of real-estate realiza- 58-cent dividend for the quar- the firm’s technology budget
cents a share, a year earlier. nounced earlier this year it “We’ve been impressed by tions in the quarter. ter, compared with 54 cents by $300 million this year.
The figure exceeded the con- would ditch its partnership KKR’s recent stock perfor- Blackstone said assets under for the year-earlier quarter. Those changes, along with
many new investment funds
and back-office services, will
Earnings
said.
Total revenue during the
second quarter was $4.14 bil-
Up Sharply lion.
The average estimate among
analysts was $4.13 billion, ac-
BY ANNAMARIA ANDRIOTIS cording to S&P Global Market
Intelligence, though some ana-
Capital One Financial lysts, including Mr. Harte, had
Corp.’s second-quarter profit been expecting more.
rose sharply as consumer card Net income rose 14% to
spending surged and credit $1.06 billion, or $1.03 a share,
losses fell. from $926 million, or 88
Net income for the quarter cents a share, a year earlier.
surged 84% to $1.91 billion, or Analysts polled by S&P Global
$3.71 a share, from $1.04 bil- had predicted a per-share
lion, or $1.94 a share, in the profit of $1.02. Total revenue
year-ago period. Revenue rose rose 5%, led by gains in net
7% to $7.2 billion from $6.7 interest income, while fee
billion. revenue climbed 3% to $3.21
Results beat analyst esti- billion.
mates, and shares rose 2% in af-
NICK WAGNER/AUSTIN AMERICAN-STATESMAN/ASSOCIATED PRESS
MARKETS
Regional Pounded
How many dollars £1 buys*
Inflation $1.44
Treasurys 1.40
$21.4 billion, according to It was a lesson for investors next month. The Saudi official said
Thomson Reuters. That de- who relied on ratings and bail- Light, Saudi Arabia’s policy is to
cline is far smaller than for outs, said Mitch Reznick, co- sweet crude for August deliv- work on satisfying customers’
overall sales of dollar-denomi- head of credit at Hermes In- ery ended 1% higher at $69.46 needs, but to do so while ad-
nated bonds from emerging- vestment Management in a barrel on the New York Mer- hering to the production pact.
market companies. London. “China Energy’s de- cantile Exchange. Brent crude, Oil prices also got a lift
Several specialist funds fault showed how faith-based the global benchmark, was from a late-session drop in the
have suffered, after swelling in investing is a road to hell,” he 0.4% lower at $72.58 a barrel. dollar against some other ma-
size as investors poured in said. Concerns that Saudi Arabia jor currencies after Mr. Trump
money. Net assets in a fund Yields on dollar bonds from Defaults are rising on debt that is denominated in yuan. and its partners are moving to said he is “not thrilled” with
run by Allianz Global Inves- local-government financing substantially oversupply the the Federal Reserve raising in-
tors GmbH have declined by vehicles have risen to 8.6% brokers now are setting up market are “without basis,” terest rates. The business of oil
roughly one-quarter, or $250 from 4.6% since the start of credit teams and they’re Saudi Arabia’s governor to the trading is conducted with dol-
million, since March. Assets the year, according to ANZ Re-
Some investors spy building their own internal Organization of the Petroleum lars, so its movements up or
under management at Fidelity search, reflecting rising con- opportunity in the ratings.” Exporting Countries, Adeeb al- down tend to cause oil prices
International Asian High cern that Beijing won’t step in And while the market tur- Aama, said. to go in the opposite direction.
Yield Fund, one of the largest, if they run into trouble. Like
shake-up in the junk- moil has led the Chinese gov- He added that Saudi Arabia Investors had pushed oil
ended June just below $4 bil- China Energy, these vehicles bond market. ernment to ease its campaign is committed to the production prices lower during the over-
lion, down nearly 13% from a were previously believed to to slow debt growth, Beijing agreement between OPEC and night session after weekly
peak in January. enjoy central-government sup- is unlikely to abandon its lon- its allies, and its oil exports in data showed U.S. oil stockpiles
Bryan Collins, head of Asian port. ger-term efforts, not least be- July will be roughly equal to climbed nearly 6 million bar-
fixed income at Fidelity, said Defaults also are rising on ing investors to look more cause the alternative would their June levels, while in Au- rels last week, while econo-
falling bond prices had debt denominated in yuan—a closely at company funda- require propping up failing gust they will fall by around mists expected a decline.
prompted selling by investors sign that the government is mentals, to the extent they companies at great cost. 100,000 barrels a day. Still, the report showed a
who have less experience in content to let market forces can trust the numbers in Some investors spy oppor- Oil prices had fallen sharply big, bullish decline in gasoline
the asset class, or are invest- determine the fate of weaker mainland China. tunity in the shake-up. In- in early July, in part on the supplies, and it also reported
ing borrowed money. “We’ve companies, said Alejandro “There was previously vesco’s Mr. Hu said that even belief the Saudis and their robust fuel demand that indi-
seen this many times over the Arevalo, a fund manager at Ju- very little demand for credit if default rates in China dou- OPEC partners would heed cates the U.S. summer driving
years,” he added. piter Asset Management in analysis,” said Qinwei Wang, bled, yields of 8% to 10% rep- calls by President Donald season is quite active.
Chinese local-government London. senior economist at Amundi resent an attractive trade-off Trump to take measures that —Christopher Alessi
vehicles and property compa- The new approach is forc- Asset Management. “Local between risk and return. would reduce oil prices, which contributed to this article.
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THE WALL STREET JOURNAL. Friday, July 20, 2018 | B11
MARKETS
Trade Fears Crunch U.S. Grain Prices
BY BENJAMIN PARKIN Many of these crops are in
Futures-price performance, year to date Wheat, global stocks
Prices have declined the crosshairs of governments
Gluts of corn, wheat and 25% since May around the world looking to
300 million metric tons
other crops are finally easing retaliate against U.S. duties on
after years of oversupply, but steel, aluminum and other
prices have yet to meaning- products. China this month in-
fully rebound. 200 troduced tariffs on U.S. soy-
The enormous stocks of ag- 20 beans, corn, wheat and cotton.
ricultural commodities that Mexico, one of the largest buy-
piled up around the world in Wheat ers of American grain, is al-
100
recent years are due to start ready levying duties on U.S.
falling, the U.S. Department of 15
goods including pork and
Agriculture said. A combina- cheese, and many expect corn
tion of robust demand for 0 could follow if there’s any new
grain to feed to livestock and 2000 ’05 ’10 ’15 ’19
escalation.
droughts from Kansas to the Cotton Gluts of agricultural com-
Black Sea region have helped 10 modities, sparked in part by
chip away at record oversup- Cotton, global stocks the rise of major crop export-
ply. ers like Brazil and Russia,
That has done little to bol- 100 million bales damped investor demand and
ster prices, however, leaving quashed volatility. Many had
5
some analysts scratching their already started to bet earlier
heads. Hedge funds and other Corn this year that situation was
investors instead have focused correcting, before tension over
on the prospect that tariffs on 50 trade ramped up.
U.S. agricultural goods levied 0 “It has frustrated analysts
by China, Mexico and others because things had been look-
could kill demand, erode mar- ing better,” said Michael Mc-
ket share and leave American Dougall, senior vice president
farmers sitting on even larger at ED&F Man Capital Markets.
–5 0
surpluses. “After the trade talk came out,
Corn futures at the Chicago Jan. Feb. March April May June July 2000 ’05 ’10 ’15 ’19 I don’t think people perhaps
Board of Trade have fallen 15% believed it would continue as
from a late May peak. They CFTC net fund bets on corn-price direction, weekly Corn, global stocks it has.”
traded last week at the lowest Analysts say traders are
point in almost a year. Prices taking their cues from soybean
200,000 contracts 200 million metric tons
for wheat are down around prices, which fell to near 10-
10% over a similar period and year lows this month. China is
cotton has slid 7% from mid- 100,000 Bets prices the largest buyer of American
June. will fall oilseed. The duties of 25% al-
“It’s a new situation for ev- ready have the country’s grain
eryone,” said Craig Turner, a 0 100 merchants buying more soy-
senior broker at Daniels Trad- beans from Brazil, but the
ing in Chicago. “When you see –100,000
agency says higher costs will
that kind of uncertainty and Bets prices force some to cut back on oil-
will rise
there’s no playbook, every- seed consumption. Chinese im-
thing gets sold eight ways to –200,000 0 ports are expected to fall as a
Sunday.” Jan. Feb. March April May June July 2000 ’05 ’10 ’15 ’19 result, pushing up domestic
Nowhere is this pessimism and global supplies next year.
more evident than in the corn Note: All stocks data are for crop years 1999-2000 through 2018-19. The figures for 2018-19 are estimates. Prices in a number of agri-
Sources: FactSet (futures); U.S. Department of Agriculture (stocks); Thomson Reuters (positions) Peter Santilli/THE WALL STREET JOURNAL.
market, with hedge funds and cultural markets have started
other speculators betting that to turn higher this week,
prices are headed lower. They stocks falling so far next year 20% from the same time a year Report. “They just assume that stocks due to fall over 8%. Pro- which some say is helped by
have built a net short position that some analysts say another earlier. Supplies of corn sitting supply is always going to be ducers of both crops have been the recent lull in heated rheto-
of more than 100,000 futures weather issue could spark in domestic grain bins are ex- there.” hit by a series of weather is- ric on trade out of Washing-
and options contracts, data tight supplies around the pected to fall by almost one- Traders of wheat and cot- sues this year, with growers in ton, Beijing and Mexico City.
from the Commodity Futures world, which could cause quarter over the same period. ton are facing a similar situa- the southern Plains struggling Traders say they may never-
Trading Commission show. It prices to jump. The agency’s “We’ve been lulled into tion: The USDA’s latest figures through months of drought theless struggle to continue
is a shift from June when they most recent estimates put complacency because we’ve show a 5% reduction in the and cotton farmers in China’s putting their money behind
held a net long position of a global corn stocks at the end produced large crops,” said global wheat surplus in key cotton-producing region of the improving long-term out-
similar size. of the 2018-19 crop year at 152 Dan Hueber, general manager 2018-19 from a year earlier, Xinjiang toiling through bad look as long as the uncertainty
Yet the USDA projects corn million metric tons, down over of advisory firm The Hueber with international cotton weather. around export flows remains.
Email: heard@wsj.com
HEARD ON THE STREET FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard
The Battle for Sky Isn’t Over Yet Tariffs Give Retailers
The central battle for 21st
Century Fox assets ended on Media Drama
But Disney shouldn’t walk
away without giving Sky a
A Holiday Dilemma
Thursday when Comcast Share-price performance second thought. Sky has a Consumers have months based shipping-industry ex-
dropped its bid, ceding the direct relationship with 23 to decide what to buy for ecutive.
prize to Walt Disney. But 50% million customers across Eu- Christmas. Retailers are de- But that carries risks. The
Fox
the side skirmish for control 40 rope. Controlling it would ciding now, so a new round biggest is that they lose con-
of Sky, the European pay-TV give Disney a huge leg up in of proposed tariffs on Chi- trol of their inventory and
leader, remains unresolved. 30 its campaign to go global. nese products couldn’t have wind up with too much on
The rational move would be 20 “Disney isn’t letting Sky come at a worse time. the shelves. That would
for Disney to leave Sky to go,” says Rich Greenfield of President Donald Trump bring back bad memories of
10
Comcast, lowering the risk of BTIG Research, citing the has threatened to put tariffs 2015 and 2016, when too
its purchase of the other Fox Disney benefits of owning all of Sky. on $200 billion worth of Chi- much unsold goods forced
0
assets and quieting the loser Disney CEO Bob Iger has nese imports. Retailers have retailers to offer steep dis-
–10
with a consolation prize. called Sky a “crown jewel” of a tough choice: They can or- counts during the holiday
In a drama of outsize me- –20 the Fox assets. der early to beat the penal- season.
dia egos, however, reason Comcast Disney’s low cost of debt ties, which the White House After lots of hard work,
–30
might not prevail. Comcast means it may have more to says won’t take effect for at retailers kept inventory
made Disney pay more for Jan. Feb. March April May June July gain by fighting for Sky. At least two months, and run tighter during the 2017 holi-
Fox; now Disney can make Source: SIX THE WALL STREET JOURNAL. the very least, lifting its bid the risk of ending up with day season and stronger
Comcast pay more for Sky. for Sky will probably pro- excess inventory. Or they can profits followed.
The best reason for Dis- Dropping its pursuit of like Fox’s film and TV stu- voke Comcast to raise its wait and risk paying the If they decide to wait and
ney to give up on Sky is to Sky would make it easier for dios, and leave the distribu- bid, too. Having ceded the higher costs if the tariffs do see whether tariffs actually
save money. If Comcast pre- Disney to keep spending tion asset, a business in shiniest Fox assets to Disney, go through. take effect, retailers will ei-
vails, Disney can sell its 39% heavily on content to com- which it doesn’t have any ex- Comcast isn’t about to relin- Many companies have ther pass on the higher
stake in Sky and reduce its pete with streaming services perience. quish Sky too. So by bidding, tried to tamp down anxiety prices to consumers or eat
debt on the $71 billion Fox like Netflix. Sky isn’t a The market appears to be- Disney can either snag Sky by saying they have been re- the cost with lower margins.
deal by $13 billion. In securi- “must-have” asset anyway. lieve that Disney will let or force Comcast to pay ducing their exposure to The effect on retailers won’t
ties filings this week and As a satellite-TV service, it, Comcast get Sky: On Thurs- more. China. But they can shift be the same across the
last, Disney implied it too, is being disrupted by day, shares of the buyers— The big corporate drama only so much production, es- board, says Simeon Siegel, a
wouldn’t bid and explicitly streaming. In some ways, it Disney and Comcast—were is over. But there may be one pecially on short notice. retail analyst at Nomura Se-
laid out the cost of a higher makes more sense for Disney up and the sellers—Fox and more act left. Relocating supply chains curities. Some retailers have
bid. to take the content assets, Sky—were down. —Elizabeth Winkler is no easy or inexpensive been raising prices anyway.
task. It is certainly hard to But those selling mass,
imagine it happening in time lower-priced goods, like Wal-
Philip Morris Can’t Snuff Out Risk for the holiday-order rush.
Retailers appear to be plac-
ing orders early to get them
through customs before tar-
mart, Kohl’s and Macy’s,
will have a harder time.
Just when retailers
thought they had figured
Where there is no smoke, cigarette smoking is under in heated-tobacco products iffs hit. “Shippers are defi- things out, Mr. Trump may
there is fire for Philip Mor- Puffing assault from health authori- is similar to that of its Philip nitely shipping early to beat send them spiraling again.
ris International. Philip Morris International ties and faces ever-harsher Morris brand cigarettes, the tariffs,” says an Asia- —Elizabeth Winkler
The tobacco giant was share price taxation, that didn’t mean it which has an international
once again done in by a couldn’t be an altogether market share of just 1.6%.
product meant to one day
replace cigarettes. Although
$120
110
pleasant decline. In 2012, for
example, the company paid
The company also faces com-
petition from upstarts. In the
OVERHEARD
Philip Morris handily beat 100
some $12 billion, or nearly U.S., Juul Labs, spun out of
analysts’ earnings estimates 10% of its market value, to a company founded just over According to eBay, buyers Total revenue in the second
for the second quarter, the 90 shareholders via buybacks a decade ago and funded by of fidget spinners are fidgety. quarter fell short of expecta-
company cut full-year guid- 80 and dividends and invested a private equity, has by far the Last year’s most annoying tions, denting the stock.
ance due to anticipated little over $1 billion. leading brand of reduced- toy fad apparently drew buyers But that can’t fully be
70
weakness in what it calls re- But in the past 12 months, risk products. to the online marketplace, set- blamed on fidget spinners. The
duced-risk products, primar- 2017 ’18 Philip Morris had 50% more Buying Philip Morris stock ting up a tough comparison for real threat against the com-
ily its IQOS smokeless-to- Source: SIX in capital expenditures and today with its 5.8% dividend this year’s second quarter, pany is Amazon.com, which
bacco technology. The strong returned barely half as much yield is itself a reduced-risk which recorded no growth in continues to take share in e-
dollar also is seen taking a results a few months ago cash as in 2012. A dividend proposition. The danger re- the number of items sold over commerce. However, Ben
toll on the company, which and fell another 1.5% Thurs- boost announced on Thurs- mains, though, that the the site. Schachter of Macquarie notes
sells cigarettes only outside day. More than $60 billion in day didn’t do much to as- Marlboro Man pours too On the company’s earnings that eBay has mentioned Ama-
the U.S. market value has gone up in suage fears over the com- much of its cash into an iffy call, CFO Scott Schenkel said zon only twice in its past four
Shareholders are justifi- smoke in the past year. pany’s uncertain bet on new product rather than rid- last year’s buyers of fidget earnings calls. Fidget spinners
ably worried. The stock had The reason is that the na- reduced-risk products. ing gracefully off into the spinners “were kind of one and are apparently more fun to dis-
its sharpest ever postresults ture of Philip Morris as an in- Philip Morris boasted on sunset. done.” cuss.
drop following first-quarter vestment has changed. While its call that its global share —Spencer Jakab
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B12 | Friday, July 20, 2018 THE WALL STREET JOURNAL.
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HOMES |
M8
MARKETS | PEOPLE
SALES |
—Miles Davis
FIXTURES | BROKERS
Friday, July 20, 2018 | M1
BY NANCY KEATES
INSIDE
DENMARK’S GEM IN JULY
The resort town of Skagen draws vacation-home buyers to its natural beauty, artistic culture and lively nightlife,
but local tradition and building rules dictate the homes be modest in size and in style. ‘Location is the luxury.’
DUELING PALACES
$188 million vs. $180
million in L.A. M10
SVEINUNG BRÅTHEN FOR THE WALL STREET JOURNAL
ROOM AT THE TOP The most expensive home now for sale in the Danish resort is this 2,200-square-foot Gammel Skagen home, with an asking price of $3.45 million.
of the country’s mainland. that rarely exceed 2,500 The typical Skagen house tions and decades-old build-
BY J.S. MARCUS
The vacationers, drawn to square feet. is often only a single story, ing codes have dictated a
the area’s natural beauty as “We don’t want castles with a converted attic for ex- narrow range of options.
THE CREAM OF Denmark’s well as to its artistic legacy, here,” says local architect Al- tra space. The size compels Positioned at the top of a
entrepreneurial class is gath- live it up at a few local bars fred Hansen, who is credited its summering millionaires thin peninsula that itself tops
ering in Skagen this month, and restaurants before hun- with designing hundreds of to do without the typical up- Denmark’s Jutland peninsula,
as the short summer season kering down for the night in new and refurbished homes scale amenities, such as Skagen offers miles of sandy AT FULL STEAM
kicks into high gear in the their million-dollar homes— in the area. “The location is pools, home cinemas and beaches and a distinctly Nor- Homeowners chill in
resort town at the very top surprisingly modest cottages the luxury.” spas. Centuries-old tradi- Please turn to page M12 Turkish baths M7
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M2 | Friday, July 20, 2018 NY THE WALL STREET JOURNAL.
MANSION
PRIVATE PROPERTIES | KATHERINE CLARKE
Mr. Rubin entered contract to vator, a screening room, a library Madeline Hult Elghanayan, Lauren
buy the unit in October 2017, ac- and four fireplaces. The building Muss, Kirk Rundhaug and Dennis
cording to these people, but the was developed by a partnership Mangone of Douglas Elliman rep-
deal has not yet closed. When it that included real estate investor resented the developer. A spokes-
does, the property will be the prici- and hotelier Ian Schrager, and was man for Douglas Elliman declined
est home ever sold below 14th designed by the architecture firm to comment.
owned by the onetime teen heart- said. Mr. Cassidy, who bought the matic boat lift.
throb is coming on the market for house in the early 2000s, was go- Mr. White said he and Mr. Wat-
$3.9 million. ing through financial troubles at kins had originally considered liv-
Known as Casa De Mayan, the the time, Mr. White said. ing in the property, but eventually
roughly 7,000-square-foot, six-bed- The current owners renovated decided the layout didn’t fit their
room home still includes an array the home and have been renting it lifestyle. After they sell, he plans
of Mr. Cassidy’s personal memora- out, marketing it as Mr. Cassidy’s to move on to other renovation
bilia, including autographed pho- former home. Mr. White said the projects. Mr. White and Mr. Wat-
tos of him taken there. These home commands about $1,389 per kins are listing the property them-
items, as well as Cassidy family night during off-season and up- selves.
crest throw pillows and pieces of wards of $1,789 a night during Mr. Cassidy gained fame after
furniture previously owned by Mr. high season. starring in the 1970s sitcom “The
Cassidy will be included in the The property is located on Partridge Family,” and later in life
sale, according to Thomas White, South Ocean Drive, overlooking appeared on “Celebrity Appren-
one of the sellers. the Mayan River. It has two master tice.” He died in November 2017 at Two Bel Air Homes Duel to Become America’s Most Expensive M10
Mr. White and his partner Scott suites, an exercise room, an office, age 67.
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THE WALL STREET JOURNAL. Friday, July 20, 2018 | M3
MANSION
THE TRADE
CLOCKWISE FROM TOP LEFT: OKO GROUP (RENDERING); PORSCHE DESIGN TOWER (RENDERING); ALEXIA FODERE FOR THE WALL STREET JOURNAL (2)
At the same time, the inventory
BY KATHERINE CLARKE
of newly built residences continues
to rise, with 4,868 new condo
ARGENTINE REAL-ESTATE devel- units slated for delivery this year,
oper Juan Pablo Verdiquio is a the most since 2008, according to
self-confessed “car guy.” He owns data from brokerage Fortune Inter-
a Porsche and several Ferrari and national Group. The Aston Martin
Audi sports cars. In 2015 he paid tower specifically could face chal-
almost $4.2 million to buy a lenges because it’s just getting out
slightly different model of Porsche: of the ground as the market
a three-bedroom condo in Miami’s reaches peak supply, said Peter Za- BRAND POWER From left, a master bath at the Missoni Baia building includes
Porsche Design Tower. lewski, a principal with the Miami the brand’s zigzag pattern; a car elevator in the Porsche Design Tower. Right,
Mr. Verdiquio’s decision had real-estate consultancy Condo Vul- Robert Thorne in the Armani/Casa showroom; below a model bedroom.
nothing to do with his need for tures. (Developers declined to dis-
speedsters. Rather, he said he cuss the percentage of units in lux-
thinks the Porsche brand could ury-branded buildings that have
help ensure that his condominium been sold.)
maintains its value, even if the Mi- “They’re swimming out and the
ami market, known for its dra- crest of the wave is coming right
matic ups and downs, gets choppy. towards them,” he said.
“Buying into a brand that’s been Some industry experts also cau-
around for 100 years? I’d take that tion that affiliating with a new
bet any day. It’s like buying into condominium project in this cli-
Coca-Cola,” said Mr. Verdiquio, 41. mate could be risky for the reputa-
In the Miami area alone, tion of luxury brands if the project
Porsche, Armani, Fendi and Mis- doesn’t come to fruition, or if
soni have loaned their names to sales don’t live up to expectations.
condo projects over the past few “I tell them before we start that Expanding a brand’s reach helps
years. And currently under con- it can do more harm than good,” luxury-goods companies face the
struction on Biscayne Boulevard said Gil Dezer of Dezer Develop- challenges of e-commerce and at-
Way is an Aston Martin-branded ment, whose firm has partnered tracting younger shoppers. “These
66-story condo, where units are with Porsche Design Group and Ar- fashion companies have never
expected to start at roughly mani/Casa Interior Design Studio been under more pressure to real-
$700,000 and go up to around $50 on new Miami towers and who em- the owner of health-focused design lobbies, for example. In exchange, ize returns when their core busi-
million for the penthouse, accord- ployed the model in the early 2000s firm Wellness Habitat Company, they pocket a fee that’s usually in ness is besieged by all sorts of
ing to an Aston Martin spokesman. with President Donald Trump. “If who paid $1.4 million for a two- the tens of millions, according to other issues,” said Pauline Brown,
Miami’s flattening luxury real-es- you don’t get financing, if the units bedroom unit at the Armani/Casa one developer. They can also pocket the former North American chair-
tate market will test the power of come out badly, there are so many project last year. “Outside of the a small percentage of sales. man for LVMH Moët Hennessy
these luxury brands to persuade things that can happen.” fact that it brings value, it secures At the Aston Martin building, the Louis Vuitton, the luxury-goods
buyers—many of them interna- Major real-estate developers, the fact that the building is not go- car company masterminded a design company.
tional—to pay top dollar for a such as the Related Group and HFZ ing to change much from the origi- that includes door handles wrapped Simon Sproule, the chief market-
home. Capital Group, have both paused nal proposal,” he said. “Once the in stitched leather, a carbon-fiber ing officer and chairman of the
Luxury-branded residences com- on new projects in Miami over the developer is sold out, the condo as- welcome desk in the lobby and an Americas for Aston Martin, declined
mand almost no price premium past 18 months amid rumblings of sociation can’t forgo the upkeep Aston Martin parked outside. The to say how much the company re-
over comparable luxury condos in oversupply, for example. they committed to.” Porsche Design Tower famously fea- ceived for its Miami project. But the
the Miami area however, according “The premise that the brand He said he believes the luxury tures a car elevator that allows resi- returns have be high enough for it
to research by listings website Zil- adds or helps maintain value be- brands put more pressure on de- dents to drive right into their apart- to explore other opportunities.
low.com. In an analysis of the Mi- comes challenged when you have a velopers to keep the building up to ments. At the Missoni Baia building “We’re in discussions with a
ami market by Zillow, the company lot of competition entering the appropriate standards. developed by OKO Group, the Mi- number of different projects
found that the price per square market,” said appraiser Jonathan The luxury companies themselves ami-based company founded by around the world,” he said. “It
foot commanded by “designer Miller, who tracks Miami sales. “It have a lot to gain in these partner- Russian billionaire Vladislav Dor- might look on paper like a stretch
properties” was indistinguishable becomes less black and white.” ships. The brands consult with the onin, the Italian brand’s iconic zig- for us to be doing real estate but
from prices for other luxury con- There are other advantages, developers on design choices for zig pattern pervades the furnishings we have expertise in design and
dos, according to a spokeswoman. however, said Robert Thorne, 57, the buildings’ common areas and in common areas. knowledge of the luxury market.”
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M4 | Friday, July 20, 2018 NY THE WALL STREET JOURNAL.
MANSION
SPREAD SHEET | ADAM BONISLAWSKI
IN REAL es-
tate, location
is every-
thing—and
that goes
not just for
buildings,
but the
ground beneath them as
well.
Move a scoop of soil from
Beverly Hills, Texas, to Bev-
erly Hills, Calif., and its value
soars.
To illustrate this idea
more, well, concretely,
Spread Sheet asked real-es-
tate firm NeighborhoodX to
look at some large-scale
land-reclamation projects
and the money they created
by moving dirt from one
place to another.
Before a 19th-century in-
fill effort, Boston’s Back Bay
neighborhood was exactly
that—a bay. Today it is one
of the city’s priciest residen-
tial districts, with homes go-
ing for an average of $1,384
a square foot, according the
NeighborhoodX. Much of the
material used to build up the
area was excavated from
nearby Needham, Mass.,
where prices average around
$400 a square foot.
Likewise, New York’s Bat-
KELLI ANDERSON
tery Park City was built, in
part, atop sand shipped in
from the southern shore of
Staten Island during the
early 1970s. That move took
prices from around $350 a age in Richmond, Calif., tions have essentially out- Middle East, and, in some $4,457 a square foot in 2017. student proposal to connect
square foot in Staten Island where a portion of the land- lawed coastal infill projects cases, Europe.” Land reclamation is ex- lower Manhattan to Gover-
to an average $1,431 a square fill came from throughout in the U.S. due to environ- Monaco is undertaking a pensive, so “you only really nors Island via infill. It is un-
foot in the lower Manhattan the second half of the 19th mental concerns, says $2.3 billion project to add 15 see it in top tier cities with likely such a project could
neighborhood. century. Another portion of Vishaan Chakrabarti, associ- acres to its coast using sand really booming economies happen for legal and envi-
Results in San Francisco’s the landfill, though, came ate professor at Columbia imported from Sicily. The [and] great land scarcity,” ronmental reasons, but, he
Financial District are more from San Francisco’s Tele- University’s Graduate School tiny Mediterranean princi- Prof. Chakrabarti says, citing notes, it would be on solid
mixed. Residential prices in graph Hill neighborhood, of Architecture, Planning and pality is the world’s most ex- as examples spots like Tokyo ground financially. “It is very
the area average $1,183 a where prices today average Preservation. But, he says, pensive real-estate market and Hong Kong. hard to argue with the eco-
square foot today, well above $1,448. “it’s still a very common according to real-estate firm Several years ago, Mr. nomics of creating more
the $388 a square foot aver- Federal and state regula- practice in parts of Asia, the Savills, with prices averaging Chakrabarti advised on a Manhattan,” he says.
Size Dining Room that seats 30, Library, Billiard Room, Family Room, Formal Living Room,
Breakfast Room, 50’ Indoor Pool with Cathedral Ceiling, Indoor Basketball Court, 14 Seat
Suites. Seven additional Bedrooms, each with its own Bath. 50’ Outdoor Pool. Tennis Court,
Alpine, NJ
MA2122
Arrowhead Farm Skyview One of the great Estates in Alpine, set majestically on an 8 acre knoll overlooking courtyards
28.04± Acres, Newburyport, MA | $1,750,000 26.07± Acres, Old Chatham, NY | $1,299,000
Nicole Monahan Cindy Welch and manicure grounds. Impressive gates open to the winding driveway through a colonnade of
617-948-8038 • nmonahan@landvest.com 413-418-3233 • cwelch@landvest.com
MA2165
materials available. 11 spacious bedroom suites throughout this estate are located on both
room and Banquet size dining room are some of the main reception spaces.A large exercise
room overlooks a 3,425 square foot indoor basketball court; theater and 8 car garage are
additional amenities. Pool and a lighted US Open deco turf cushioned tennis court.All outside
irrigation provided by well.Total square footage of home is 35,384. $25,000,000
Hoboken, NJ
4-Story Masterpiece Townhome
$2,750,000 | Web#18582197
Matt Brown 201.478.6709
Peter Cossio 201.478.6710
Halstead Manhattan, LLC; Halstead New Jersey, LLC; Halstead Connecticut, LLC; All information is from sources deemed reliable but is subject to errors, omissions, change or price, prior sale or withdrawal without notice. No representation or guaranty is made as to accuracy of any description. All
measurements and other information should be re-confirmed by customer.
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M4B | Friday, July 20, 2018 NY / NE THE WALL STREET JOURNAL.
every
one
deserves a decent
place to live.
Learn more at
habitat.org.
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THE WALL STREET JOURNAL. NY Friday, July 20, 2018 | M5
MANSION
ANNOTATED ROOM
1. The upholstered pair of headboards are semi-cus- from Etsy, captures a favorite line from a grandparent. Serena & Lily, based in Sausalito, Calif., has a sail-
tom made. They were purchased, on sale, from Price: $650 inspired shape (color discontinued).
Crate & Barrel, then re-covered in about 7 yards of Price: $228
striped fabric from Osborne & Little, the U.K. wall- 4. The storage ottomans are custom-built and cov-
paper and fabric brand. ered with four yards of Mulberry-pattern material 7. Three gallons of Benjamin Moore in two colors:
Price: $2,091 total; headboards, $199 each; fabric, for Lee Jofa fabric. Acapulco Sand and Chantilly Lace, in eggshell.
2
$113 a yard Price: $1,492 for two; $148 a yard Price: $54.99 a gallon
2. The star decals, made of silver paper, are by Ca- 5. Velvet throw pillows in fuschia-colored Donghia 8. The beige, easy-to-clean, “form-fitted” wool rug
nadian wall-decal company Urbanwalls. “Covet” fabric. is from Rosanti Floors, Westhampton Beach, N.Y.
Price: $39 for 50 stars Price: $69 per yard; $218 for two The rug follows the shape of the room, and is cut 2
inches away from the wall to create a border.
3. A custom-made neon sign, done in script font, 6. A Newport Lounger beanbag-style chair from Price: $3,000
Experience a California Closets system custom designed specifically for you and the way you live.
Visit us online today to arrange for a complimentary in-home design consultation.
californiaclosets.com
TRIBECA - Newly remodeled UPPER EAST SIDE HAWTHORNE - Newly remodeled
NEW CITY MANHASSET GREENVALE - Coming soon 6 4 6 .4 8 6 .3 9 05
MIAMI 3 05.6 2 3 .8 2 8 2 facebook & instagram: @caliclosetsnyc @caliclosetsmiami
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M6 | Friday, July 20, 2018 THE WALL STREET JOURNAL.
MANSION
TYLER CHARTIER FOR THE WALL STREET JOURNAL (3); JENNIFER WEISS (”BEFORE” IMAGE)
decades can also mean freeing it
from a not-too-pretty moment in
time. The renovations are as much
about the style as about repairing
the plumbing. These projects can
range from major reconstructive
surgery to a metaphorical change of
clothes, but they often come with
complications, such as labyrinth-
like floorplans and uncooperative
neighbors. Longtime residents often
let things go, content to ignore new
technologies and design trends.
It was a floor-to-ceiling Buddhist
shrine in the living room that Jaime
Mannon, 41, suspects deterred
other buyers from the 1940s house
she and her husband bought in 2011
for $700,000 in Berkeley, Calif. The
lack of a furnace also could have
been a factor. The woman who lived
there was 90 when she died, and
had been there for decades before
it was sold by the estate.
The couple hired Oakland archi-
tectural firm Tierney Conner to
transform the dark, segmented in-
terior into simple, clean, open
spaces with white walls and mod-
ern furniture—for about $500,000.
But there were some things Ms.
Mannon couldn’t change, like all
the other houses on her street.
They were done in a Minimal Tra-
ditional style that many love but
that she calls “pretty damn ugly.”
“Why didn’t I think about the
fact that I could change my own
house and not the other houses in
the neighborhood?” Ms. Mannon
asks. Some of the neighbors have
been hard on her. One left a note
WYNN MYERS FOR THE WALL STREET JOURNAL (2); DAVID HANCOCK (”BEFORE”)
MANSION
OVER THE TOP IN LOS ANGELES
Le Belvedere, a lavish Bel-Air mansion by developer Mohamed Hadid, fea-
tures an elaborate, traditional hammam with a bathing pool, large swaths of
blue-and-white marble tile and colorful light fixtures. Max Fowles-Pazdro, a
Los Angeles-based investor who recently bought the property for $56 mil-
lion, said he liked the concept of the hammam but felt that it looked a little
“cheesy” in its current form. He plans to update the room and make it more
contemporary with a more neutral palate. Mr. Hadid didn’t respond to a re-
quest for comment on the original cost.
Cost: About $500,000 for the renovation only
CLOCKWISE FROM TOP LEFT: GIBEON PHOTOGRAPHY; DAVID O. MARLOW; REDUNDANT PIXEL; DOUGLAS ELLIMAN DEVELOPMENT MARKETING
A HOT SLAB IN THE DESERT
In Palm Desert, Calif., designer Gordon Stein worked on a hammam for a local client who was building a new home in a
Moroccan style, he said. He visited Morocco with his client a few times to do reconnaissance on all the materials, includ-
ing the mosaic tiles for the floor and the base of the bathing pool, which were sourced from the country. The owner
hired a team of 20 craftsmen from Morocco to go to California to work on the home project. They spent between five
and six months on site. A jewel-like light fixture was handmade in brass using small handsaws. A fireplace is made of
black Tadelakt, a plaster surface that is rammed, polished and treated with soap.
Cost: $350,000 to $500,000.
ELEMENTS
More luxury developers and public bathhouse that is typical in been in domed rooms clad in mo- with a traditional aesthetic, while the word “hammam” in their list-
homeowners are turning to Turk- Islamic countries, involves a grad- saic tiles, complete with stone others pursue a more modern ing description, according to real-
ish hammams for inspiration for ual warming of the body in a slabs for laying down and cisterns twist on the hammam with estate listings website Zillow.
their private bathrooms and spa heated environment, followed by of water for rinsing and keeping sleeker, cleaner materials. Here is a look at four examples of
areas. an exfoliating body scrub. cool. Roughly 50 homes currently private residential hammams.
The hammam, a version of the Traditionally, hammams have Today, some builders are going for sale in the U.S. incorporate —-Katherine Clarke
RESPITE IN MANHATTAN
At 111 Murray Street, a new residential
skyscraper in New York’s Tribeca
neighborhood, designer David Rock-
well said he looked to the hammam
to bring something “a little bit
unique” to the building’s amenity
spaces. “I was intrigued by the fact
that it’s a room you can spend a lot
more time in than a sauna,” he said.
“You’re decelerating from the speed
of New York City into a more relaxing
gear.” For the design, Rockwell Group
incorporated black granite for the
EMBRACING THE HEAT AT THE BEACH floors, mosaic-tile walls and thick
At Eighty Seven Park, a beachfront condominium in Miami Beach designed by white marble plinths for reclining. The
Pritzker Prize-winning architect Renzo Piano, Julia Capp and a team of design- plinths appear to float above the
ers at RDAI sought to replicate natural light with a wood-panel light fixture that granite. Polished nickel-clad pipes
allows some rays to seep into the space. In the room’s center is a hot stone hang from the ceiling over stone
plinth heated from the inside, with a small pipe that provides steam. There is bowls to deliver water. The hammam
also a freestanding bath and a body-scrub area with water jets that hang from was built offsite in Leverkusen, Ger-
the ceiling. Just off the room is a separate sauna and scrub area. Ms. Capp many, and will be shipped to the U.S.
said the materials were inspired by the property’s proximity to the beach. for the project.
Cost: About $1 million Cost: About $1.5 million.
Watchcase Penthouse
3 BR | 3.5 BA | SAG HARBOR VILLAGE
Jack Pearson
Lic. A ssoc. RE Broker
FAIR HOUSING. SHARED 516 . 4 5 7.7111
OPPORTUNITY IN EVERY COMMUNITY. j p e a r s o n @ c o r c o r a n .c o m
Equal Housing Opportunity. The Corcoran Group is a licensed real estate broker located at Main &
Madison Streets, Sag Harbor, NY 11963 and 1936 Montauk Hwy., Bridgehampton, NY 11936
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M8 | Friday, July 20, 2018 THE WALL STREET JOURNAL.
MANSION
HOUSE CALL | AL JARDINE
FROM LEFT: SHAYAN ASGHARNIA FOR THE WALL STREET JOURNAL; LOU THOUVENIN/MCFARLAND
took a job with Eastman Kodak In 1955, Royal Blueprint reas- house and sang for my mother.
and moved the family to Roches- signed my father to manage its The five of us sat on the floor in
ter, N.Y. In the early ’50s, he Los Angeles plant. We lived in the living room and sang “Their
taught at the Rochester Institute Hawthorne, near LAX airport. I Hearts” and Brian’s “Surfin’.” My
of Technology. wasn’t happy about moving, but I mother loved our sound. She gave
Both of my parents loved music. cheered up when I heard Disney- us $300, a month’s salary, so we
My father played clarinet in col- land had just opened about a half- could record. Thanks to her, we
lege. My mother, Virginia, who hour away. had enough to rent an upright
went to the same school, the Uni- In 1958, I began listening to folk bass and a snare drum. I played
versity of Toledo, was an arts ma- music. I loved folk’s melodies, and the bass, Carl played guitar and
jor. She also played violin. At home, the lyrics provided an escape. I Brian played the snare with
they had a good collection of pop played guitar and formed a folk brushes. The three of us, plus Mike
78s, and we sang as a family. group called the Islanders. and Dennis, sang vocals around
In Rochester, my parents bought I met Brian Wilson for the first one overhead mic but had to jostle
me a four-string ukulele that I time that year. We were on the for position. It took 26 takes to get
picked on. I also played the clarinet Hawthorne High School football the right vocal mix. When
in grade school, but the instrument team. I had no idea then he was “Surfin’” was released, it took off.
was difficult and discouraging. interested in music until we ran Today, my wife, Mary Ann, and I
Eventually, my mother grew into each other at an A&W root- live in Big Sur, Calif. We have a
restless and wanted to live in a beer stand on Hawthorne Boule- two-story ranch house and a re-
warmer climate. Teaching didn’t vard. Over burgers, we talked cording studio I built in a red barn
exactly suit my dad. In 1952, when about forming a group. out back.
I was 9, we moved to San Fran- When I finished high school in Our place is more of a hobby
cisco. By then, my father’s experi- 1960, my dad moved us to Big farm. When our rooster crows just
ence in lithography had landed Rapids, Mich., where he had taken VIBRATIONS Al Jardine, above, at the Coach House in San Juan Capistrano, before dawn, I’m a different per-
him a job managing a plant for the a one-year job at Ferris Institute Calif. Top, on left, Mr. Jardine with brother, Neal, and parents, Virginia and Don, son. I feel like I’m back in Lima.
Royal Blueprint Co. It produced as a lecturer. I enrolled there and in Lima, Ohio, around 1950. (Photo from ‘Becoming the Beach Boys 1961-1963.’) —As told to Marc Myers
detailed blueprints for the mili- majored in dentistry.
tary. In September 1961, when we re- Between classes one day, we Carl and Dennis. Their cousin Mike Al Jardine, 75, is a founding mem-
San Francisco was our land of turned to Hawthorne, I attended El met in the music room, but the Love came around a few days after ber of the Beach Boys. The band’s
dreams. Our first summer there, Camino College. At the start of my teachers kicked us out. So Brian that. hits appear on “The Beach Boys
we went to the beach. My brother, sophomore year, I ran into Brian invited me over to his family’s We jelled quickly in 1961 as the With the Royal Philharmonic Or-
Neal, and I immediately ran down again. So we picked up where we house. A couple of weeks later, we Pendletones. The first song we chestra” (Capitol). He is on his
to the surf to taste the salt water. left off. got together with Brian’s brothers, sang was “Their Hearts Were Full Postcard From California tour.
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M10 | Friday, July 20, 2018 THE WALL STREET JOURNAL.
MANSION
PRIVATE PROPERTIES | KATHERINE CLARKE
SIMON BERLYN
manager Barry Rosenstein in 2014. ness center has a gym designed by
The $180 million newcomer was celebrity trainer Harley Pasternak.
developed by Raj Kanodia, a promi- Outside on 1.2 acres is the water-
nent Los Angeles plastic surgeon fall, a vegetable and herb garden
who lives across the street on and an outdoor kitchen. “We communicated, chatted and tion whether Bel-Air can support & Hyland, who with colleagues
Nimes Road. Known for his rhino- Sitting next to Dr. Kanodia’s collaborated many times,” said Dr. two mega listings. “The ultrahigh- Rayni Williams and Tyrone McKil-
plasties, Dr. Kanodia boasts numer- contemporary home is a 38,000- Kanodia of Mr. Makowsky. “ He end spec market has softened,” len is representing the homes, said
ous references in fashion magazines square-foot behemoth with 12 bed- was laughing at me, saying I’m in said Michael Nourmand, an L.A. there is “no competition” between
and celebrity clients like Britney rooms and elevators lined with the wrong business.” Mr. Ma- agent who is not involved with the the two homes. “They’re two very
Spears and Kim Kardashian West. crocodile skin. It was developed by kowsky said there might be listings. “Having two properties in different styles even though
Dr. Kanodia originally said he Bruce Makowsky, a luxury hand- friendly competition, but said he proximity isn’t ideal because it they’re both modern,” he said.
had invested roughly $50 million in bag entrepreneur. His mansion wishes Dr. Kanodia the best. “I gives buyers more choices.”
building the home. Upon reflection originally came to market last year hope he gets his price and I get Mr. Makowsky said he’s confi- See more photos of notable
and consultation with his accoun- seeking $250 million; the price mine,” he said. dent there will be buyers for both homes at WSJ.com/Mansion.
tant however, he later revised that was cut to $188 million in April. Some real-estate agents ques- homes. Branden Williams of Hilton Email: privateproperties@wsj.com
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MANSION
Grenen
Ruths DENMARK
Hotel
Gammel
Skagen Skagen
Port of
Skagen D
DEN
DENMARK
Copenhagen
Denmark’s
Gem in July
MAP BY JASON LEE; SVEINUNG BRÅTHEN FOR THE WALL STREET JOURNAL (5)
Continued from page M1
dic blend of forest and dunes. A
sandbar called Grenen marks the
spot where waters of the North
and Baltic seas meet.
The high-end market shows
signs of picking up, said Troels
Theill Eriksen, chief economist of
DE, Denmark’s national organiza-
tion of real-estate agents. He said
the number of Skagen homes that
have sold above $1 million has in-
creased from less than a handful in
2012 to nearly 20 in 2016-17.
Still, the market overall has
come down since its peak a decade
ago, say local brokers. Bright spots BLUE SKIES A main crossroad in Skagen, a summer resort getting more year-round buzz. Most Danes vacation in July, finding sunny skies and temperatures
include the most traditional near 70 degrees in the area. Those with vacation homes often return for Christmas and Easter holidays.
houses, painted yellow with red
tile roofs, as well as certain areas
of Skagen proper on the penin-
sula’s east side, which is becoming
a year-round getaway.
Skagen attracts weekend visi-
tors from Norway and an interna-
tional cruise-ship crowd. But due
to restrictions on second-home
purchases by foreigners, the high-
end second-home market is almost
entirely Danish, with a strong con-
tingent coming from Copenhagen’s
northern suburbs about a five-
hour drive away.
Most Danes vacation in July,
which in Skagen means tempera-
tures nearing 70 degrees and skies
that are often sunnier than farther
south. Year-round residents and
off-season visitors say the penin-
sular setting helps lighten up the
dark days of winter, when temper-
ature hover around freezing.
Mr. Hansen says many prime
homes in the area are used only a
few weeks a year, with owners re-
turning for Christmas and Easter
holidays.
Skagen was a fishing village at
the end of the 19th century, then
became home to a colony of Scan-
dinavian artists who adapted the
ideas of French Impressionism to
the Nordic setting. The twin bodies ART LOVERS Top: Local beaches in-
of water—the Skagerrak and the spired artists, whose works fill Ska-
Kattegat—on either side of the gens Museum. A sitting room, left, in
peninsula have a mirror-like effect, the for-sale Moller home, above.
creating an intensity of light that
inspired the painters. The area still trees, which are thought to be espe-
enjoys an artistic cachet. cially hearty, says Ms. Wanting
The Skagen group of artists—in- Moller, adding: “And you can see
cluding Anna Ancher, daughter of a the sea from every window.”
Skagen innkeeper—were soon joined The couple, long based in cen-
by Denmark’s royal family, who built tral Jutland, bought the house in
a summer home on the east side of 1977 and used it a summer home
the peninsula. Current summer resi- for decades. Now in their retire-
dents include Maersk shipping heir- ment, they live in Skagen full time
ess Kirsten Olufsen and Kasper Ror- but plan to relocate to a stairless
sted, chief executive of Adidas. bungalow in the Grenen area.
Skagen’s most expensive homes The couple did a makeover, re-
tend to be on the west side of the building the roof and turning an
peninsula, in a village-like area isolated dune area, is on the mar- In Vesterby—a neighborhood in mel Skagen seafront home of Ib attic space into a home office for
known as Gammel Skagen, home to ket for $2.03 million. The five-bed- Skagen proper—a 2,500-square- Moller, an 80-year-old Danish entre- Mr. Moller, a Skagen native and
Ruths Hotel, a swanky summer wa- room, three-bathroom bungalow foot, front-line home is listed for preneur, and his wife, Inger Wanting distant relative of painter Anna
tering hole and restaurant. South sits on a 5¼-acre lot. $2.5 million. It was built in 2008, Moller, a 75-year-old retired teacher. Ancher. Mr. Moller decorated the
of Gammel Skagen, an enclave Prime lots in Gammel Skagen not long after prices peaked. It The three-bedroom, two-bathroom home with antiques, such as a
called Kandestederne offers much can be much smaller. A 1,950- rests on a ¼-acre lot and has views home on a 1/3-acre waterfront lot is 19th-century Danish pharmacy
larger lots. In Skagen proper, the square-foot home near Ruths Ho- of Skagen’s former royal residence, listed at $3.45 million. chest. Ms. Wanting Moller brought
Osterby neighborhood has quaint tel, on a 1/5-acre lot, has an asking used since 2000 as a retreat for The 2,200-square-foot, four-level in a pastel palette.
lanes and easy beach access. price of $2.35 million. The home, artists and scientists. home, painted a traditional yellow, “The sea here is blue and green-
A 2,200-square-foot thatched- with a spacious converted attic, The most expensive property was built in 1915. It still has its orig- ish blue,” she says, “and those
roof Gammel Skagen house in an has three small bedrooms. now on the local market is the Gam- inal windows, made from peninsula were the colors I chose.”
Huge lots are a key selling point in this Skagen-area enclave near This home has a full second story, which is a rarity in Skagen This thatched-roof cottage is located in dunes beyond the village-
the southern tip of the peninsula, where this isolated cottage homes. The top floor has sea and town views, and there are sev- like heart of Gammel Skagen, where the resort’s most expensive
dates back to the 1920s. The home is on more than 9 acres. The eral outdoor sitting areas. A popular beach is a few hundred feet homes are located. The home, built in the 1990s in a traditional
property includes a small guesthouse. away. It is on a 1/6-acre lot. style, is on a 5¼-acre lot.
Agent: Kristian Lützau, Lützau Agent: Kasper Lykke Nielsen, Home Agent: Kasper Lykke Nielsen, Home