WORLD NEWS - English Language Learning

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VOL. XXXVI NO. 133
(India facsimile Vol. 3 No. 194)
FRIDAY - SUNDAY, MARCH 9 - 11, 2012
* *
asia.WSJ.com
Japan City Sees Light
In Sendai, Money for Rebuilding Means 17 Jobs for Each Job Seeker
BY YUKA HAYASHI
AND JURO OSAWA
SENDAI, Japan—A year
after this city in Japan’s
northeast was slammed by a
gigantic earthquake and tsunami, it is experiencing a
boom reminiscent of the
c o u n t r y ’s
bubble economy a quarter century
ago.
D u m p
JAPAN trucks
from
as far away
ONE
Okinawa
YEAR ON as
r u m b l e
through snowy streets,
lights are back on in its
once-deserted entertainment
district, and sales of German
cars and Italian handbags
are brisk.
The region now is getting
projects such as a $4.3 billion plan for giant incinerators to process debris left by
the tsunami. Wages for some
jobs are doubling, according
to local business owners. At
the public employment office in Sendai, 17 jobs are
available for each job seeker
hoping to work as a traffic
controller at a construction
Inside
Henry Tang says he is
open to adjusting the
Hong Kong dollar’s
trading band against
the U.S. dollar if he is
elected as the city’s
next chief executive.
World News ............ 3
European investors are
taking a bigger bite out
of dim sum bonds
issued by a growing
variety of companies.
Markets ................. 15
Debt Swap
Gets Closer
For Greece
ATHENS—More than 75%
of private-sector creditors
have pledged to take part in
Greece’s planned €200 billion
($262.98 billion) debt swap, a
Greek government official
said late Thursday, as Athens
prepared to announce early
Friday the participation level
in the largest-ever such debt
restructuring.
Agence France-Presse/Getty Images
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MICA (P) NO. 030/10/2011
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KDN PP 9315/10/2012 (031275)
WEEKEND JOURNAL W1
By Nektaria Stamouli,
Costas Paris
and Alkman Granitsas
A 330-ton fishing vessel swept up by the March 11, 2011, tsunami remains where it was left by
the giant waves, near traffic in Miyagi prefecture.
site, while 11 jobs are offered
to each iron-beam worker in
need of work.
But the growth, fueled by
government reconstruction
spending, also shows the
short-term
nature—and
long-term limits—of postdi-
saster expansion. Builders
are struggling to keep up
with orders, the result of a
labor-shortage intensified by
a sharp exodus of young residents.
“It’s mostly the peak
working-age people who are
leaving,” said Seiichi Otaki,
an economics professor at
Tohoku University here.
“This really limits the scope
Please turn to page 13
Amid the turmoil, some see
a chance for change............12
Economic Engines Falter
In Emerging Markets
Fresh signs of economic
weakness in Brazil are adding
to a growing worry for the
global economy: that the
emerging markets that have
boosted growth in recent
years are slowing.
By John Lyons
in São Paulo
and Bob Davis
in Beijing
That is a big concern amid
the drag of the European debt
crisis and a sluggish U.S. recovery. Brazil, China, Russia,
India and South Africa are
among the dynamic economies that helped the world
bounce back from the 2008 financial crisis.
This time around, they
seem less likely to provide the
same boost as they deal with
problems such as strong currencies, inflation, deficits and
real-estate bubbles.
Earlier this week, Brazil
said its economy grew around
2.7% in 2011, less than half
the rate the government predicted a year ago. And
Wednesday, Brazil said industrial production fell 2.1% in
January, the most since the
2008 crisis. Later, Brazil’s
central bank slashed its
benchmark interest rate by
three-quarters of a percentage
point, a bigger cut than expected, to spur growth.
“The strain of carrying the
weight of world growth on
their backs has started to
wear on the emerging market
economies,” said Cornell University economist Eswar
Prasad, who has advised India
and other emerging nations
on economic policy. “The ability of emerging-market economies to contribute to a global recovery is being tested.”
Growth forecasts are falling across the developing
world. On Monday, China’s
Premier Wen Jiabao reduced
the country’s annual growth
target to 7.5% after keeping it
at 8% since 2005. Last week,
India said its economy grew
6.1% in the final quarter of
2011, its slowest pace in two
years. Economists expect
South Africa’s growth to slow
to 2.5% this year, a far cry
from the 7% rate its centralbank governor, Gill Marcus,
spoke of chasing just a year
ago in order to dent high unPlease turn to page 6
“The participation rate exceeded 75%” Wednesday evening, a government official
said. “At the moment, it appears that we will exceed
even the optimistic scenario.”
The results of the so-called
private-sector involvement
were to be published Friday
at 6 a.m. GMT on the official
website for the exchange, said
a person in the finance ministry. The deadline for bids was
Thursday at 8 p.m. GMT.
“The participation will be
quite substantial. The target
is to hit 80%,” said a person
involved in the process.
Charles Dallara, managing
director of the Institute of International Finance, a lobby
group for the world’s largest
banks, said he was “quite optimistic” that the Greek debtrestructuring deal would
come together in the final
hours. Speaking in Rio de Janeiro, he expressed optimism
that participation would be
“very, very high.”
Growing optimism about
the Greek debt restructuring
buoyed some of the weaker
euro-zone government bond
markets, where the specter of
a Greek default had been
weighing on sentiment for
months. Italian government
bond yields fell to their lowest levels since mid-2011, and
Spanish
yields
declined
sharply in early trading
Thursday, before later recovering part of their losses.
ECB expects euro-zone
economy to shrink.................... 7
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2 | Friday - Sunday, March 9 - 11, 2012
THE WALL STREET JOURNAL.
* *
PAGE TWO
What’s News—
Inside
Associated Press
On Other Fronts: For
shear thrills, a contest
in New Zealand. 14
India on Thursday celebrated Holi, the Hindu festival of colors that marks the advent of spring. The festival involves people throwing colored powder, or ‘gulaal,’ on
each other. Many believe that the Hindu god Krishna once smeared color on his companion Radha’s face because he was envious of her fair complexion.
i
i
i
Business & Finance
n The ECB said the euro-zone’s
economy is likely to contract this
year, and inflation will exceed the
bank’s medium-term target. ECB
President Draghi also played down
evidence of a rift between the
bank and Germany. 7
n The restructuring of Europe’s
banking industry may continue to
move at a slow pace thanks to the
ECB’s recent wave of cheap lending to the Continent’s banks. 15
n Swedish auto maker Volvo is
expected to sign a technologysharing pact with its Chinese
owner as early as Friday that
could determine how they will position their auto brands. 15
n EADS’s CEO accused EU officials of sparking a fight with
China over aircraft emissions that
could cost the parent of Airbus
$12 billion in jetliner orders. 3
n The U.S. Justice Department
warned Apple and five U.S. publishers that it plans to sue them
for allegedly colluding to raise the
price of electronic books. 18
n Rabobank of the Netherlands
plans to expand lending to China’s
food producers and processors,
both in yuan and in foreign currencies. 20
n The U.S. Treasury sold 206.9
million of shares in AIG for $29
each, further reducing its stake. 22
i
i
i
World-Wide
n China’s securities regulator is
pushing for a system where companies disclose essential information so investors can judge IPOs
for themselves. 20
n China unveiled legislation that
restricts police powers to detain
people at undisclosed locations
without telling their families. 4
n Huawei is beefing up its design
team, as the Chinese maker of mobile devices and telecom gear
aims to raise its profile in the global smartphone market. 17
n The intrigue deepened surrounding Bo Xilai, Communist
Party chief of the southwestern
city of Chongqing, after he missed
a major parliament meeting. 4
Marketplace: A plain
old name for new iPad
puzzles experts. 14
n China would likely mount a cyberattack on the U.S. in the event
of a conflict, and the U.S. has no
clear policy on how to respond, a
congressional advisory panel was
set to warn Thursday. 4
n Syria’s deputy oil minister announced his defection, while former U.N. chief Kofi Annan said his
priority as special envoy to Syria
is to end violence and deliver aid.
n Nuclear envoys from North and
South Korea have a chance for informal talks at a New York conference as diplomacy on Pyongyang’s
atomic program gathers pace.
Business & Finance:
Hong Kong airline bets
on business class. 16
n Flooding worsened in Australia’s New South Wales state, with
heavy rains threatening coastal areas, including the city of Sydney.
ONLINE TODAY
Most read in Asia
1. Apple Tries to Keep Edge
2. Big Solar Storm to Hit Earth
3. Australia’s Sydney Coast
Threatened By Floods
4. U.S. Warns Apple, Publishers on
E-Books
5. Furniture Does Double Duty
Scene Asia
wsj.com/scene
Sports
‘Travelers to
Canton in the 19th
century described
these banquets at
great length. They
were...astonished.’
Where are
America’s multimillionaires? The
Internal Revenue
Service says
California is the
state with the most.
Amitav Ghosh offers insight into his
research for the novel ‘River of Smoke’
Most emailed in Asia
1. Apple Tries to Keep Edge
2. ‘Sterilized’ Bond Buying an
Option in Fed Arsenal
3. Spiders Battle Flooding in
Australia
4. Australia’s Sydney Coast
Threatened by Floods
5. The Most Exclusive House in
America?
Wealth Report
wsj.com/wealth
Singapore: Boxing’s next
big draw? Two world-title
bouts are coming up.
wsj.com/sea
Heard on the Street:
Japan statistics aren’t
what they appear. 28
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Friday - Sunday, March 9 - 11, 2012 | 3
WORLD NEWS: ASIA
BY JEFFREY NG
AND TE-PING CHEN
HONG KONG—Former Hong
Kong Financial Secretary Henry
Tang, a contender in the race to be
the city’s next chief executive, didn’t
rule out adjusting the Hong Kong
dollar’s trading band against the
U.S. dollar if he is elected, but affirmed the need to maintain the U.S.
currency peg.
“The peg with the U.S. dollar has
actually served Hong Kong well for
nearly 30 years. We have had the
stability…that [has] facilitated many
of our exporters so that they don’t
have to account for exchange risks,”
Mr. Tang said in an interview with
The Wall Street Journal.
Many lawmakers have recently
criticized the currency peg for contributing to rising inflation in the
city, as food imports from mainland
China, which account for the bulk of
Hong Kong’s food supplies, have become much more expensive amid an
appreciating yuan and a weaker U.S.
dollar. Rock-bottom interest rates,
even while the city’s economy continued to soar, have also fueled asset prices in Hong Kong, particularly
in the property market.
Hong Kong’s government pegged
the local currency at 7.80 Hong
Kong dollars per U.S. dollar in 1983,
partly as a bid to boost confidence
amid mounting uncertainties about
the city’s 1997 handover to Chinese
rule. Now, about 15 years since the
change in sovereignty, some analysts are suggesting that it may be
time for Hong Kong to consider
modifying the peg or abandoning it
altogether.
The currency regime was last
overhauled in 2005 when the Hong
Kong dollar was allowed to trade in
a tight band between HK$7.75 and
HK$7.85. The Hong Kong Monetary
Authority said Thursday it sees no
need to adjust the trading band and
added it has no plans to do so.
As finance chief, Mr. Tang helped
oversee the implementation of the
trading band in 2005. “Putting in
this band actually introduced a
mechanism where we could have
more wiggle room when we want
to,” he said.
“That band was put in place for
a reason. I would not speculate or
comment on whether this is the
right moment to expand the band so
that we will have more wiggle room,
but I think by putting in a mechanism, one can make use of the
mechanism to the best interest of
Hong Kong when necessary.”
Mr. Tang’s poll numbers have
languished, and his chances of becoming the city’s chief executive are
looking increasingly dim. Once seen
as Beijing’s favored candidate, he
now trails his opponent Leung
Chun-ying by 26 percentage points
in most recent polls. A series of
scandals have dogged his campaign,
including an extramarital affair and
public fury over an illegal basement
addition to his luxury home.
Sporting a colorful aqua tie with
a fish theme, Mr. Tang, 59 years old,
seemed unfazed by his campaign’s
unpopularity. He spoke ebulliently
about how Hong Kong’s current
Darren Hayward/The Wall Street Journal
Henry Tang: Don’t Scrap Currency Peg
Henry Tang didn’t rule out adjusting the Hong Kong dollar’s trading band.
chief executive race is the last one
before the city’s leader will be chosen via universal suffrage in 2017.
The winning candidate of the March
25 elections will be chosen by a
1,200-member election committee
composed largely of political and
business elites.
Despite his flagging poll numbers, Mr. Tang said he was betterequipped to shepherd Hong Kong
along its path to democracy than
Mr. Leung, a former cabinet member, saying the city needs someone
who is able to “build consensus”
across parties to enact political reform. A spokesman for Mr. Leung
didn’t return calls seeking comment.
Specifically, Mr. Tang endorsed
the idea of lowering barriers to entry for future chief executive candidates. To run for chief executive,
candidates currently must receive
nominations from one-eighth of the
city’s election committee. Mr. Tang
on Thursday supported the idea of
reducing that threshold down to
one-tenth, or even one-twelfth. The
rules for choosing candidates in the
2017 election haven’t yet been set.
On Hong Kong’s development as
an offshore yuan hub, Mr. Tang said
he believes more channels need to
be created to allow yuan funds
raised in the city to be remitted to
mainland China. He said that while
sizable amounts of yuan-denominated bonds have been sold, the
market has still fallen short of its
potential.
“Until they open up more of
these channels, I believe the constraints will put a cap on the development of that particular sector,”
said Mr. Tang, who pledged to work
closely with Chinese regulators to
boost the channels for yuan fund
flows into China.
He argued that Hong Kong can
continue to build on its reputation
for “brand quality,” especially when
it comes to consumers from mainland China, who know that “when
you buy soy sauce [in Hong Kong],
you get real soy sauce.” Makeup,
skin-care products, pharmaceuticals
and cooking sauces are manufacturing areas Hong Kong could further
explore, he said.
When it comes to the scandals
that have engulfed his campaign,
Mr. Tang said he was surprised at
the public outcry that followed revelations of his illicit basement, which
local media outlets likened to an
“underground palace.”
“In retrospect,” he said, “I could
have handled it better by coming
clean on it earlier.”
Online>>
See a video with Mr. Tang discussing
Hong Kong’s economic strengths and
the media circus surrounding his
campaign for chief executive at
asiaWSJ.com.
EADS Says China
Is Blocking Sales
BY DANIEL MICHAELS
AND DAVID PEARSON
PARIS—The chief executive of
Airbus parent EADS accused European Union officials of sparking a
fight with China over aircraft emissions that threatens to cost the
plane maker $12 billion in jetliner
orders.
Louis Gallois said that European
Aeronautic Defence & Space Co. is
a “hostage” to the dispute between
Beijing and Brussels, which has put
the fate of 45 unbuilt large planes in
question.
“China is putting on hold orders
already agreed with airlines but not
approved” by industry overseers in
Beijing, Mr. Gallois said. “We are
worried that this conflict is becoming a commercial war.”
The EADS chief executive blamed
Chinese officials’ anger at the EU’s
levies on emissions of carbon dioxide, which this year were extended
to include aviation.
Any airline operating at a European airport must have special credits to offset its carbon-dioxide emission through a program known as
the emissions-trading system, or
ETS. Airlines have said the system
will cost them billions of dollars.
Governments outside the EU
charge that the 27-country bloc is
exerting extraterritorial authority
by charging for emissions that occur
outside the EU.
Officials at the European Commission, the EU’s executive arm,
have said the system is legal. A top
EU court last year backed that position. Talks that might resolve the
dispute are now continuing in the
United Nations’ International Civil
Aviation Organization, but their
prospects for success remain unclear. China is one of more than 25
countries that have vocally opposed
the EU program.
Staff at the Chinese embassy to
the EU declined to comment on the
situation and officials in Beijing
weren’t available for comment. A
spokesman for EU climate commissioner Connie Hedegaard, the top
official overseeing the ETS program,
declined to comment on “possible
commercial decisions.”
The involvement of Airbus in
China’s dispute with the EU
emerged in June, when the announcement of an order for 10 Airbus A380 superjumbo jetliners by
Hong Kong Airlines Ltd. was put on
hold. Airbus officials have said the
freeze was due to Beijing’s anger
over the ETS. More recently, 35
smaller Airbus A330s have also been
put on hold, Mr. Gallois said.
China hasn’t explicitly forbidden
its airlines from buying Airbus
planes. Air China Corp. spokeswoman Joyce Zhang said she didn’t
believe China had banned airlines
from ordering Airbus aircraft, adding Air China has no plans to cancel
existing orders. China Eastern Airlines Corp. and China Southern
Airlines Co. couldn’t be immediately
reached for comment.
Instead, EADS officials say Beijing isn’t signing off on permission
for commercial deals that require
government approval.
—Andrew Galbraith in Shanghai
contributed to this article.
BENTLEY GMT
BREITLING for BENTLEY.COM
WORLD NEWS: ASIA
ChinaTargetsDetentionPractices Washington
To Warn
BEIJING—China’s parliament unveiled legislation that restricts police powers to detain people at undisclosed
locations
without
informing their families—a move
hailed as a small victory for legal
reformers who led a public outcry
last year against legalizing the practice.
The revisions to the Criminal
Procedure Law presented Thursday
during an annual parliament session
still allow police to hold suspects in
certain serious crimes under “residential surveillance” outside their
homes or state-run detention centers.
But even in those cases, the new
revisions require police to inform
suspects’ relatives within 24 hours,
according to draft legislation that
the National People’s Congress—a
rubber-stamp parliament that essentially affirms the decisions of
China’s Communist Party leadership—is expected to approve during
the ongoing session.
China’s security forces have routinely detained dissidents, humanrights lawyers and other activists at
undisclosed locations without informing their relatives, especially
since online appeals appeared last
year for a Chinese version of the uprisings in the Arab world.
The increasing use of such detentions without charges or court
hearings last year raised concerns
among Chinese lawyers and liberal
academics that China was sacrificing three decades of efforts toward
building a legal system for the sake
of maintaining political stability.
In a case that sparked an international outcry, Ai Weiwei, China’s
most famous contemporary artist
and an outspoken critic of the government, was detained in such a
way for 81 days last year, before being released and fined on tax-evasion charges that he disputes.
Chen Guangcheng, a blind lawyer
who served more than four years in
prison for campaigning against
forced abortions, is still being con-
Associated Press
BY JEREMY PAGE
Blind activist Chen Guangcheng, in an undated photo, is being confined at home.
fined at home in a form of detention
that lawyers say is technically illegal
but condoned by the government.
And Liu Xia, the wife of Liu Xiaobo, who won the Nobel Peace
Prize in 2010, is still under effective
house arrest at her apartment in
Beijing despite never having been
formally arrested or charged, let
alone convicted of any crime, according to her friends.
Mr. Ai and other activists say
Chinese police rarely observe legal
procedure, and the new revisions in-
clude many loopholes that would
still allow police to make people
“disappear” in politically sensitive
cases.
“Police behavior is violating the
law every day,” Mr. Ai said in an interview. “In my case I still don’t
know why I was detained, or why I
was released. I can’t sue anybody
because the courts won’t accept the
case. You can’t argue with their
power because it is too unified.
There is no structure or system to
limit it.”
But many legal experts said the
revisions marked an improvement
over the last version of the law, approved in 1996, and a draft revision
circulated in August last year that
proposed allowing police to hold
dissidents and terror suspects under
residential surveillance without informing their families.
That provision was branded “the
KGB clause” by activist Hu Jia, himself living under a form of house arrest, and prompted a wave of criticism from Chinese Internet users,
academics and journalists last year.
The revised law says that when
suspects or defendants are “involved in crimes concerning state
security, terrorism or especially serious corruption and notification of
where they are residing could obstruct investigations,” they can be
held in residential surveillance, but
their families must be told within 24
hours.
Wang Zhaoguo, the vice chairman of the NPC, told parliament as
he introduced the revisions: “It is
necessary to strictly limit exceptions to the provision of notifying
family members after a coercive
measure is adopted.”
Other revisions that have been
welcomed by legal experts are designed to improve lawyers’ access to
suspects and defendants, and to
prevent the use of evidence obtained through torture and other illegal means.
Legal experts said the revisions
represented a rare example of public
and expert legal opinion pushing
back against China’s increasingly
powerful law-enforcement agencies.
But many expressed concern that
the revisions still didn’t go far
enough.
“On paper, there are a lot of
good things that have been introduced in this legislation,” said
Joshua Rosenzweig, a human-rights
researcher based in Hong Kong.
“The problem is how well will they
be enforced, and how well can they
be enforced when there are very few
remedies or sanctions in the law itself in case of noncompliance.”
Chongqing Party Chief Intrigue Thickens
BY JEREMY PAGE
BEIJING—The intrigue surrounding Bo Xilai, Communist Party chief
of the southwestern megacity of
Chongqing, deepened on Thursday
after he missed a major parliament
meeting and his police detained a
local businessman who claimed to
have fresh details about China’s biggest political scandal.
A lawyer for the detained businessman, Zhang Mingyu, a former
property developer and member of
Chongqing’s local legislature, said
Mr. Zhang had a compromising
voice recording of Wang Lijun, the
former Chongqing police chief at
the center of the scandal.
Mr. Wang was taken away by
Chinese security forces after spending a night in the U.S. Consulate in
the nearby city of Chengdu last
month.
Mr. Bo is usually one of the stars
of the annual parliament meeting,
and was until recently considered a
front-runner for promotion to the
party’s Politburo Standing Committee—the top decision-making body—
in a once-a-decade leadership
change this fall.
He won plaudits from fellow
leaders for a high-profile crackdown
on organized crime and a campaign
to get residents to sing Maoist revolutionary songs—two elements of
what was dubbed the “Chongqing
model” of government.
But his political prospects appear to have been severely compromised by Mr. Wang, who led the
fight against gangsters in Chongqing, but is now himself under investigation, according to Chinese officials.
Many analysts believe he could
be in a position to provide evidence
that Mr. Bo’s opponents in the party
could use to thwart his leadership
ambitions.
Critics of Mr. Bo say his policies
in Chongqing were used to target
uncooperative business leaders, and
to discredit his predecessor, Wang
Yang, who is now the party chief of
the southern province of Guangdong
and a potential rival for promotion
in the fall.
A
Chongqing
government
spokesman played down the significance of Mr. Bo’s unusual absence at
Thursday’s meeting of the National
People’s Congress, the parliament,
which is halfway through its annual
meeting, which usually lasts around
10 days.
All the other members of the
party’s 25-strong Politburo were at
the meeting, and Mr. Bo’s absence
triggered a flurry of speculation
among political observers in Beijing
as well as Chinese Internet users.
State television cameras filming
the parliament meeting panned
across every Politburo member but
stopped just before reaching Mr.
Bo’s empty seat.
The Chongqing spokesman said
Mr. Bo would definitely attend a
meeting of the Chongqing delegation, and a news conference, on Friday morning—which could be the
first time he faces direct questioning in public about the scandal surrounding him.
Among Mr. Bo’s many critics are
at least two local property developers who have publicly alleged that
they were forced to hand over their
businesses to allies of the Chongqing Party chief during the campaign against organized crime.
One of those property developers, Zhang Mingyu, hinted that he
had fresh details about the Wang Lijun case Wednesday when he wrote
a cryptic message on Sina Weibo, a
microblogging service that works a
bit like Twitter.
“The jigsaw puzzle of Wang Lijun
should all become clear,” he wrote.
Mr. Zhang, who has been living
in Beijing since fleeing Chongqing,
had a voice recording of Wang Lijun
warning him not repeat those allegations, according to his lawyer, Pu
Zhiqiang.
Chongqing police visited Mr.
Zhang’s apartment in Beijing on
Wednesday and told him to return
to Chongqing and to stop writing
about Mr. Wang on Weibo, according to Mr. Pu. He said he didn’t
know his client’s current whereabouts.
Mr. Zhang also posted a message
on Weibo on Wednesday afternoon
saying he was being held in his flat
by four people from Chongqing. His
last post on Wednesday evening
said: “Zhang Mingyu is not yet out
of danger.”
Another lawyer for Mr. Zhang
said he had received a text message
from his client on Thursday saying:
“I have a family emergency. I’m already back in Chongqing. This afternoon’s press conference is canceled.
Pass this on.”
Mr. Zhang’s mobile phone appeared to be switched off.
A Chongqing police spokesman
said he had seen reports of Mr
Zhang’s detention online, but had
no additional information.
Of Chinese
Cyber Tactic
BY SIOBHAN GORMAN
WASHINGTON—China almost
certainly would mount a cyberattack
on the U.S. in the event of a conflict,
and the U.S. has no clear policy to
determine how to respond appropriately, a congressional advisory panel
is set to warn on Thursday.
In a lengthy report analyzing
Chinese cyber-capabilities and the
threat facing the U.S., the U.S.-China
Economic and Security Review Commission found that the U.S. telecommunications supply chain is particularly vulnerable to cyber-tampering
and an attack could result in a “catastrophic failure” of U.S. critical infrastructure.
The report was written for the
commission by analysts at defense
firm Northrop Grumman Corp.
The commission’s findings are
likely to stoke a fight on Capitol Hill
over competing cybersecurity proposals, which are likely to reach the
Senate floor in the coming weeks.
Supporters of a White House-backed
cybersecurity bill have clashed with
Republicans over whether the government should require critical infrastructure companies to meet new
standards.
Late Wednesday, the White
House pressed its case for new standards with a classified administration briefing that pointed to the inadequacy of current cybersecurity
authorities of the U.S. government,
an administration official said. The
briefing for senators from top intelligence and national security officials focused on how the U.S. would
respond to a cyberattack on its infrastructure.
While the congressional proposals aim to improve U.S. cyberdefenses, they wouldn’t address the
key policy gap the commission identified: In the event of a cyberattack
during a conflict with China, there
is no standard U.S. policy for responding proportionally, when it
can’t clearly prove who carried out
the attack.
China’s military, the People’s Liberation Army, has been intensifying
its focus on cyberwarfare, the report concluded.
Chinese military leaders appear
to have reached agreement on the
importance of developing tactics
and techniques to pursue “information confrontation” against its adversaries in concert with traditional
military means, according to the
commission report.
The PLA now regularly incorporates cyberattack and defensive
techniques into its national military
exercises, as it has done for the past
three years, the report says.
The Chinese government regularly denies allegations of cyberspying and has called the U.S.-China
commission a “product of Cold War
mentality.”
The commission report warns
that Chinese telecommunications
companies receive support from the
Chinese government and maintain
relationships with the PLA, so they
could be used to assist the Chinese
government with cyber-warfare research, training, and cyber-surveillance.
Some of those companies, including Huawei Technologies Co.,
have denied any link to the Chinese
government.
WORLD NEWS: U.S.
Delegate Math Challenges Romney Foes
BY NEIL KING JR.
AND PATRICK O’CONNOR
BOSTON—Mitt Romney didn’t
deliver a knockout blow in winning
six of the 10 states up for grabs on
Super Tuesday, but he did expand
his delegate lead in ways that his
rivals will find increasingly hard to
bridge.
The Romney campaign tried to
make the case Wednesday to fellow
Republicans that it now has an allbut-insurmountable advantage in
delegates to the August nominating
convention.
After contests in 23 states, Mr.
Romney leads the field with 415
delegates, according to an Associated Press tally that includes socalled unbound delegates, who
aren’t required to support him. Former Sen. Rick Santorum has 176
delegates, former House Speaker
Newt Gingrich has 105 and Texas
Rep. Ron Paul has 47 in the AP
tally.
Figures from Mr. Romney’s campaign put the totals a bit higher,
counting 430 for Mr. Romney. It
takes 1,144 delegates to win the
nomination.
Given his lead, Mr. Romney
needs 48% of the remaining delegates to clinch the nomination, according an analysis offered by his
campaign.
It also estimates that Mr. Santorum needs to win 65% and Mr. Gingrich 70% of the outstanding delegates to cross the threshold.
Romney political director Rich
Beeson drove the point home in a
memo to reporters, saying, “Super
Tuesday dramatically reduced the
likelihood that any of Gov. Romney’s opponents can obtain the Republican nomination.”
The Romney campaign’s message: Math—not passion or political
posturing—will deliver the nomination for a candidate whose wellsynchronized
campaign
has
planned for every eventuality in a
wildly fluctuating race.
Mr. Romney’s opponents rejected that conclusion, arguing that
just over a third of the delegates
have been distributed so far, allowing plenty of chances for a comeback.
The Gingrich campaign acknowledges it needs to make up ground
quickly. It canceled an end-of-theweek trip to Kansas, which holds
its caucus on Saturday, in order to
focus its attention on Alabama and
Mississippi, both of which hold primaries next Tuesday.
The challenge is that even a win
won’t do him or Mr. Santorum
much good at this point because all
but four states spread their delegate bounty among at least the top
two finishers and, in some cases,
top three.
Oklahoma’s results on Tuesday
help illustrate the long road that
any challenger now faces. Mr. Santorum won the state by nearly six
percentage points, but he ended up
with just 14 of the state’s 43 delegates. Mr. Romney and Mr. Gingrich, as the second- and third-place
finishers, each got 13.
There are other problems with
the Gingrich comeback plan. His
campaign believes it can make up
ground with several late-voting
states that use a winner-take-all
delegate system. But they are in
places where Mr. Romney appears
to be the better fit, including New
Jersey, Delaware and Utah.
The Romney campaign also
points out that from now on, there
are few big single-day delegate
hauls left. Five contests on April 24
will put 231 delegates in play, while
another five on June 5 will offer
299.
But the pickings are few beyond
that, and many of the big states
still to vote—New York, for example—distribute their delegates on a
proportional basis, eliminating the
potential for a big, delegate-rich
victory.
In scrambling to make up
ground, the Gingrich and Santorum
campaigns face another obvious
hurdle: each other. The two Republicans continue to split conservatives’ votes, prompting conservative activist Richard Viguerie to call
on Mr. Gingrich to leave the race to
give Mr. Santorum a fighting
chance at the nomination.
Mr. Romney is likely to suffer
some delegate slippage in the
weeks ahead. The nine contests re-
maining in March—in Kansas, Alabama, Mississippi, American Samoa, the U.S. Virgin Islands,
Missouri, Puerto Rico, Illinois and
Louisiana—will distribute 346 delegates. And while Mr. Romney likely
will win some delegates, he isn’t favored to win many of them outright.
While aides argued that Mr.
Romney’s victory was inevitable,
the campaign was taking steps to
form more solid connections with
voters—particularly those at the
lower end of the income scale.
In Ohio, where Mr. Romney won
a narrow victory in the most competitive Super Tuesday state, he
The Romney campaign is arguing that his rivals are
helping Democrats by prolonging the competition.
Mr. Romney’s campaign said
Wednesday that it had raised $11.5
million in February, but it didn’t
disclose its expenditures. Finance
reports from January showed a
campaign that was far outspending
the $6.5 million it had raised that
month.
trailed Mr. Santorum among voters
earning less than $50,000 annually,
according to exit polls. In Tennessee, a state Mr. Romney lost by a
wider margin than his campaign
expected, Mr. Santorum trounced
him among lower-earning voters.
Mr. Romney altered his tone in
his victory speech in Massachusetts
Tuesday evening as he attempted
to strike a more emotional chord
and sympathize with Americans’
economic struggles.
“To the millions of Americans
who look around and can only see
jobs they can’t get and bills that
they can’t pay, I have a message:
You have not failed. You have a
president that’s failed you,” Mr.
Romney said.
The Romney campaign is pointing to the math to argue that their
rivals are only doing the Democrats
a favor by prolonging the competition. “As Gov. Romney’s opponents
attempt to ignore the basic principles of math, the only person’s
odds of winning they are increasing
are President Obama’s,” Mr. Beeson
wrote in his memo.
—Sara Murray
WORLD NEWS
Continued from first page
employment.
To be sure, most of the world’s
developing economies are still
cruising faster than the U.S., Europe and Japan. Foreign investment
in the regions is recovering, and
rising commodity prices should
help growth in resource-rich nations like mining giant South Africa
and Brazil, a major exporter of iron
ore, soy, beef and other goods.
“The emerging markets are still
at the front of the train, but it’s a
slower-moving train,” said Mohamed El-Erian, chief executive of
Pacific Investment Management
Co., which manages some $1.3 trillion in bonds.
In 2009, he helped coin the term
“new normal” to describe a global
economy where emerging markets
would consistently outpace developed world growth. Mr. El-Erian
said his theory holds, though the
onus is on European policy makers
to resolve the region’s debt crisis
to prevent it from feeding into
other regions.
But an important shift in the
global growth mix has already happened. In 2010, economists spoke
of a “two-speed recovery,” where
emerging-market
economies
zoomed ahead while rich ones stagnated. Now, both the haves and the
have-nots are slowing. In January,
the International Monetary Fund
reduced its 2012 emerging-market
forecasts from just three months
earlier by 0.7% to 5.4%. The bloc
grew 6.2% in 2011.
A collection of factors explains
Agence France-Presse/Getty Images; Reuters
Emerging Markets’ Economic Engines Falter
Emerging markets are seeing slower economic growth. A Chinese steel mill, left, and soy being harvested in Brazil
the slowdown. China is purposefully decelerating to a more sustainable growth rate. Export flows
to Europe, and the U.S. are slowing,
as are flows of commodities to
China. In some poor nations, muchneeded economic reforms stalled
amid an expectation permanently
higher growth rates had already
been achieved.
A slowdown in China—the biggest trade partner for Brazil, South
Africa and other commodity exporters—will be felt across the
globe. China buys iron ore and soy
from Brazil; more iron ore plus
magnesium, copper and other metals from South Africa, and ash and
copper from India. Not to mention
cars and luxury goods from the rich
world.
China’s economy grew at an average rate of 10% for 30 years—
something no other country has
ever accomplished. But the growth
model relied heavily on three pillars that are each now under pressure: exports, investment in capital-intensive industries and realestate appreciation.
The Japanese investment bank
Nomura estimates China’s February
exports fell 15.2% compared with a
year ago as markets in the U.S., Europe and Japan wobble. Apartment
prices in China’s biggest cities
soared so much they are now out of
reach for much of the population,
undermining the boom and creating
policy headaches for leaders.
Now, China’s leaders are making
clear that the years of 10%-plus
growth are coming to a close. The
idea is to shift to growth that depends more on domestic consumer
demand. That could give China a
sturdier foundation for growth well
into the future. But managing the
transition while still creating new
jobs is tricky.
In Brazil, the government officials blame the U.S. and Europe for
lowering interest rates, and sending a wave of speculative cash its
way, overvaluing its currency and
hurting its competitiveness.
But many of the country’s problems are home-grown. High tax
rates, poor roads, a sprawling bureaucracy and endemic corruption
make Brazil one of the most expensive places in the world to produce
things.
The result is that Brazil’s increasingly uncompetitive industrial
sector is dying a slow death while
its commodity exporters and service providers such as restaurants
and movie theaters are doing well.
This is a troubling trend because
manufacturing is where the good
jobs are created in a poor, undereducated population like Brazil’s.
Brazil’s biggest manufacturing
group, the National Industry Confederation, issued a statement calling Brazil’s economic outlook
“alarming” this week. Brazil’s industrial base is contracting: Production of durable goods fell 7.6%
in January from a year ago.
The slowdown carries enormous
political stakes for the government
of President Dilma Rousseff, who
campaigned on job creation
through fast growth. In a Feb. 22
interview, Finance Minister Guido
Mantega promised a range of measures to spur growth, from more
lending to infrastructure spending
and lower interest rates.
The 5.5% annual growth rates
Mr. Mantega forecast for the future
are no longer in the cards, many
economists say. The consensus for
2012 is 3.3%. “Our goal is still between 4% and 5%.” Mr. Mantega
said.
India is also wrestling with the
fallout from slower-than-predicted
growth. Some analysts say it was
caught off guard by its slowdown,
which made expensive promises of
social spending and fuel subsidies
harder to afford. A year ago, India
predicted it would notch 9% growth
for the year ending March 2012, its
fiscal year. Recently it cut the forecast to 7%.
The government will be hard
pressed to pay for the subsidies
without opening up wider budget
deficits. But the government may
be forced to go deeper into the red
to fund more subsidy programs to
maintain popularity.
“Here’s a country that has potential to do a lot more, but because of government myopia and
inaction it is suffering,” said Rajeev
Malik, senior economist at CLSA
Asia-Pacific Markets.
Brazil blames Europe and
the U.S. for cutting rates,
which sent speculative
cash its way, overvaluing
its currency and hurting
its competitiveness.
South Africa is also slipping below its government’s more optimistic forecasts of 4% annual growth
made last year, hurt by its heavy
reliance on Chinese commodity
purchases. Mining production
shrank by 13% in 2011, crimping
growth to 3%. The declines complicate the nation’s bid to provide jobs
to a population facing a 24% unemployment rate.
“The immediate challenge we
face is ensuring the current situation does not deteriorate,” South
Africa’s Finance Minister Pravin
Gordhan wrote in an op-ed in
Wednesday’s Business Day newspaper.
—Patrick McGroarty
in Johannesburg
and Amol Sharma in New Delhi
Cooling Off
The International Monetary Fund has lowered its growth forecasts from just a
few months ago for big emerging markets that have driven the global economy.
2011 growth
SUNG-JOO KIM
CHAIRPERSON, MCM HOLDING & SUNGJOO GROUP
South Korea’s Sung-joo Kim bought over struggling German luxury
brand MCM and turned it around. CNBC’s Christine Tan catches up
with the retail force about the craft behind her turnaround strategy,
and how tough beginnings drove her to build her fashion empire.
FRI 6:30PM SAT 6PM SUN 5PM (SIN/HK)
SAT 6:30PM SUN 7:30PM (AEDT)
managingasia.cnbc.com
Forecast in September 2011
Forecast in January 2012
RUSSIA
CHINA
INDIA
BRAZIL
2011 ’12
2011 ’12
2011 ’12
2011 ’12
10%
SOUTH
AFRICA
8
6
4
2
0
Source: IMF
2011 ’12
The Wall Street Journal
* *
WORLD NEWS: EUROPE
ECB Forecasts Economic Contraction
LONDON—The European Central
Bank said Thursday that the eurozone’s economy is likely to contract
this year and that inflation will exceed the bank’s medium-term target.
It was the third quarter in a row
that the ECB cut its growth estimate
for this year—a testament to the
protracted damage caused by the region’s sovereign-debt crisis and the
fiscal adjustments caused by it.
In his monthly news conference,
ECB President Mario Draghi also
played down increasing evidence of
a rift between the ECB and Germany, whose officials have been
critical of many of the emergency
actions the ECB has taken to avert a
credit crunch in the region.
Mr. Draghi said fears of the increased risks to the Eurosystem
from the recent operations were
“vastly overblown,” and he stressed
that more than 400 small German
banks had made use of last week’s
controversial long-term refinancing
operation. The operation was the
largest in the ECB’s history, injecting €530 billion ($697 billion) into
the system.
He said last week’s operation,
and another like it in December, had
“great success” in stabilizing financial markets, saying the sovereigndebt markets, as well as the market
for banks’ covered bonds “and even
the interbank market,” had reopened as a result of them.
Mr. Draghi said banks had made
only modest use of the ECB’s relaxation of its collateral framework for
the second operation, posting €53
billion in credit claims as collateral.
He said that in most cases, the
banks that did this already had excess collateral posted against their
loans from the ECB.
The loosening of the credit rules
led to Bundesbank President Jens
Associated Press
BY GEOFFREY T. SMITH
European Central Bank President Mario Draghi played down evidence of a rift between the ECB and Germany.
Weidmann, via a leaked letter, expressing concern at the accumulation of risks on the ECB’s balance
sheet, but Mr. Draghi denied that
there was a rift, and he said the
Bundesbank had never been “isolated.”
Mr. Draghi said he had an “excellent” personal and professional relationship with Mr. Weidmann, and
said everyone on the ECB’s governing council “shared the same ideals”
of stability. “We are all custodians
of stability,” Mr. Draghi said, adding
there was “nothing to gain from
fighting publicly.”
Mr. Draghi also denied that the
swelling of the ECB’s balance sheet
to more than €3 trillion represented
in itself bigger risks.
Even so, the bank said in a statement separately it had added another €1.166 billion to its provisions
in 2011 to protect it against “foreign
exchange rate, interest rate, credit
and gold price risks, which are monitored on an ongoing basis.”
Mr. Draghi said the central assumption of the Eurosystem’s forecasters is now that the economy will
shrink by 0.1% this year, that being
the midpoint in a range between minus-0.5% and 0.3%. For 2013, the
ECB now expects growth of 1.1%,
versus a prior forecast of 1.3%.
Mr. Draghi said however that
“the economic outlook is still subject to downside risks,” notably the
risk of renewed tension in financial
markets and spillovers into the real
economy. He also mentioned the
risk of higher commodity prices.
On the price front, Mr. Draghi
said that higher-than-expected energy prices, along with increases in
various state-administered prices,
meant that “inflation is expected to
remain above 2% in 2012, with upside risks prevailing.”
The central inflation forecast for
2012 is now 2.4%, up from 2.0%
three months ago, Mr. Draghi said,
while the central forecast for 2013 is
now 1.6%, up from 1.5%.
Mr. Draghi also gave credit to
political reforms enacted by the
euro zone’s governments, notably
the “fiscal compact” signed at last
week’s EU summit.
He said he was “absolutely confident” that governments would stick
to what they agreed on, despite
signs that Spain, for one, is unwilling to impose any more budget cuts
for fear of causing irreparable damage to its economy.
“It’s quite clear, that if countries
don’t release some…of their fiscal
sovereignty…they can’t be together,”
Mr. Draghi said, adding that it was
intolerable that some countries
should be asked to finance other
countries’ spending over the long
term.
He played down suggestions that
greater transparency in reporting
the ECB’s internal discussions and
voting patterns would improve the
bank’s
communications,
and
stressed that the ECB was different
from the Federal Reserve and the
Bank of England in not representing
a single country.
Mr. Weidmann’s letter had expressed concern at the Bundesbank’s own exposure to the rest of
the Eurosystem, expressed through
its assets in the so-called Target2
payment system.
Analysts have said that these assets would be at risk only in the
event of a breakup of the euro zone,
and Mr. Draghi said that the ECB’s
governing council isn’t making any
provisions to that end.
“To have a Plan B is to admit defeat, and we don’t want to be defeated,” Mr. Draghi said.
The ECB’s governing council left
its key interest rate unchanged at 1%
at its monthly meeting earlier
Thursday, in line with expectations.
Mr. Draghi said the council hadn’t
even discussed changing interest
rates at Thursday’s meeting.
Greek Debt-Swap Deal Nears as More Creditors Sign On
The deal aims to reduce Greece’s
debt burden from more than 165% of
gross domestic product to a more
sustainable 120.5% by 2020. Greece’s
European partners, which helped
bail out the country two years ago,
have demanded that Athens proceed
with the debt write-down as a precondition for its receiving a second
bailout valued at €130 billion.
The International Monetary
Fund, which has also been participating in the bailouts, said on
Thursday that its board of directors
European Pressphoto Agency
In late February, Greece formally
launched the debt deal, which aims
to cut the amount of debt the country owes private-sector creditors
roughly in half. Under the terms,
which were negotiated with the
Washington-based IIF, Greek bond
investors would give up 53.5% of the
principle by swapping their existing
Greek government bonds with new
ones with less than half the face
value and paying a sharply lower interest rate.
People pass a branch of the National Bank of Greece in Athens on Thursday.
would meet on March 15 to decide
on approving its portion of the second loan.
The deal is being billed as a “voluntary” debt exchange, but Athens
has said it is prepared to invoke socalled collective-action clauses that
are designed to strong-arm any
holdouts into the deal.
Asked if Athens would activate
those clauses, a person close to the
process said: “We will have to see
the final number, and we will then
decide in agreement with our partners in the euro zone.” However, another person close to the process
said activating the clauses “is almost certain.”
The bonds involved in the restructuring fall into two distinct
categories: those issued under Greek
law, representing 85% of the total,
and those issued under foreign,
mainly U.K., law. Greece wants participation to be as high as 90%, but
analysts say it will be difficult to hit
that target.
One reason is that Greece is aiming for 90% participation for all
debt subject to the restructuring,
not just the Greek-law bonds, and
may face greater resistance from investors holding those foreign-law
bonds. Another reason is that creditors who have insured their holdings with credit-default swaps—contracts that pay off in case of
default—need Greece to force the
exchange on investors in order to
trigger terms of the CDS contracts.
Thus, bondholders who also hold
CDS are likely to hold out from the
exchange, but at the same time vote
to give Greece the authority to force
them into the deal.
If participation falls well below
90%, Greek Finance Minister Evangelos Venizelos has indicated Greece
won’t hesitate to bind reluctant
creditors to the deal through the
use of the collective-action clauses.
The clauses are legal tools that
allow the will of a majority of creditors to be binding for all creditors.
They aren’t considered a marketfriendly approach and likely would
trigger the CDS, which, in turn,
would see banks and hedge funds
moving to settle billions of euros of
those insurance contracts.
The final decision on whether
the CDS is triggered ultimately will
depend on a ruling by the International Swaps and Derivatives Association, which will decide whether
the debt swap was voluntary or coerced.
Following a Greek cabinet meeting on Thursday, one government
official who attended said there has
been “no unexpected events, in general everything is going well.”
—Diana Kinch
in Rio de Janeiro
and Tommy Stubbington
in London
* *
WORLD NEWS
Afghan Air Force Probed in Drug Trade
April Shooting Incident Draws New Scrutiny; ‘In a Landlocked Country, Moving Goods by Air Is Everything’
BY MARIA ABI-HABIB
KABUL—The U.S. is investigating
allegations that some officials in the
Afghan Air Force, which was established largely with American funds,
have been using aircraft to ferry
narcotics and illegal weapons
around the country, American officials told The Wall Street Journal.
Two probes of the Afghan Air
Force, or AAF, are under way—one
led by the U.S. military coalition and
another by the U.S. Drug Enforcement Administration, officials said.
“The nature of the allegations is
fairly dramatic and indicated that
[AAF officials] were transporting
drugs on aircraft and transported
weapons not owned by the government of Afghanistan for the use of
private groups,” said U.S. Army Lt.
Gen. Daniel Bolger, commander of
the North Atlantic Treaty Organization Training Mission-Afghanistan,
the command that is establishing
and financing Afghan security
forces, including the AAF.
Gen. Bolger cautioned that the
investigation was still preliminary
and the allegations couldn’t be
proved at this stage.
As part of the inquiry, the military also is looking into whether the
alleged transporting of illegal drugs
and weapons was linked to an April
incident in which an AAF colonel
gunned down eight U.S. Air Force
officers at Kabul Airport. In a 436page report released by the U.S. Air
Force in January about the killings,
several American officials are
quoted as mentioning that the
shooter, Col. Ahmed Gul, was likely
involved in the transportation of illicit cargo and wanted to shut down
a probe into it.
The April shooting, for which the
Taliban claimed responsibility, was
the deadliest attack by Afghan
troops on coalition personnel in the
10 years of war. The majority of the
victims were involved in an early inquiry into the misuse of AAF aircraft. Col. Gul, the Afghan officer
who killed them, coordinated AAF’s
cargo movement.
Lt. Col. John Dorrian, an Air
Force spokesman said: “There are a
number of factors that were turned
up as a part of the investigation. To
call any of them a definitive motive
would be speculation at best.”
An AAF spokesman, Lt. Col. Mohammed Bahadur, denied the allegations and said he was unaware of
any investigations into the air force.
Afghanistan’s Minister of Defense,
Gen. Abdul Rahim Wardak, said he
hadn’t been informed of any inquiry.
Western officials say preliminary
findings of the investigation suggest
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TAJIK.
UZBEK.
Illicit Harvest
BADAKHSHAN
Opium production increased in
2011 over the previous year.
KUNAR
100 miles
BAGHLAN
FARYAB
100 km
Afghanistan's estimated
opium production
KAPISA
BADGHIS
AFGHANISTAN
HERAT
9,000 metric tons
KABUL
LAGHMAN
DAYKUNDI
NANGARHAR
6,000
URUZGAN
FARAH
IRAN
ZABUL
NIMROZ
HELMAND
PAKISTAN
3,000
KANDAHAR
Provinces where opium
poppy was cultivated in 2010
Additional poppy-growing
provinces in 2011
Source: United Nations Office on Drugs and Crime
certain senior officials in the AAF
and other parts of the Afghan government may have been involved in
the alleged drugs and weapons
transporting, or have turned a blind
eye to the activity.
The probe of alleged drugs and
weapons transport is still in its
early stages, and Afghan investigators aren’t involved in it. The allegations have come from “credible” Afghan officers inside and outside the
AAF, the investigators say, and from
coalition personnel working with
the AAF.
The NATO Training Mission-Afghanistan has provided roughly $20
billion, almost all of it from the U.S.,
this year and last to build up Afghan
forces, with $1.9 billion going to the
AAF. Future funding for the Afghan
security forces is slated to be discussed at a NATO summit in Chicago in May.
The U.S. had hoped to reach by
then a deal on long-term American
military presence in Afghanistan.
But the talks have stalled because of
President Hamid Karzai’s insistence
that the coalition end night raids
and transfer all of its detainees to
Afghan custody, U.S. and Afghan
sources say.
Afghanistan accounts for some
90% of the world’s illicit opium production, according to the United Nations. Before the 2001 U.S.-led invasion of Afghanistan, opium revenue
enabled commanders of the Northern Alliance—the anti-Taliban fighters who would later aid the U.S. in
toppling the regime—to finance
their war effort.
Many of these commanders now
occupy senior positions in the Af-
0
2005
’07
’09
’11
ghan security forces or government.
American investigators say they believe some of these former commanders are now selling drugs
again to buy weapons. Their aim: to
rearm loyal militias in northern Afghanistan in case civil war erupts
after most foreign forces withdraw
from the country in 2014.
The U.S.-led coalition is looking
at specific senior Afghan officials in
its current investigation into the
misuse of the air force.
The investigating officials say
they haven’t yet found any proof
that Afghan officials met with international drug networks or any other
hard proof of likely criminal activity.
“We found some circumstantial
evidence and a few guys willing to
give us statements,” Gen. Bolger
said.
The DEA said it couldn’t confirm
or deny its role in the investigation,
and declined to comment further.
U.S. Air Force Lt. Col. Frank Bryant, a coalition adviser at AAF,
spearheaded an initial, informal investigation after months of watching Afghan “helicopters just disappearing without flight plans,” said
an American military officer who
worked closely with him.
Early last year, Col. Bryant decided to impose U.S. control over
the scheduling of Afghan military
flights and suggested cutting off
fuel to the AAF until it improved
transparency about flight destinations and cargo, according to interviews with officials and the U.S. Air
Force report on the shooting in
April at Kabul International Airport.
Of particular concern was cargo
ramp No. 5 at the airport, where un-
scheduled aircraft were landing late
at night and cargo was being unloaded in a hurry, several Western
officials with knowledge of Col. Bryant’s probe said.
The airport is a joint civilian-military facility. Unlike in most of the
airport, the U.S.-led coalition has no
oversight role at ramp No. 5. A
Western official called that cargoloading area the “Grand Central station of illicit activities” in Afghanistan.
That initial probe was cut short
on April 27, when Col. Gul burst into
a meeting room at the military side
of Kabul airport and shot Col. Bryant, seven other U.S. service members and a U.S. contractor. Col. Gul
killed himself later that day.
A U.S. Air Force investigation
into the shooting, released in January, didn’t establish a conclusive
motive for the attack, but said Col.
Gul had “self-radicalized,” possibly
during a stay in Pakistan.
Now, senior American military
officers in Kabul are pushing for
that probe into the April killings to
be reopened, saying Col. Gul may
have been trying to derail the inquiry into a high-powered network
of organized crime.
“These guys didn’t die because of
some nut job that radicalized overnight. They died because they took
a stand to not let a criminality expand,” one of the officials said.
“It’s not just Afghans profiting
from Afghans but includes international mafias. In a landlocked country, moving goods by air is everything.”
The U.S. Air Force investigation
report quotes Col. Gul’s friends and
family as denying he had become religious, and as saying he had financial problems and a dispute with the
U.S. mentors.
A U.S. sergeant major quoted in
the report wrote that imposing U.S.
control over scheduling flights,
something Col. Bryant wanted,
“could impact [Col. Gul’s] income if
he took payments for arranging
flight and cargo movements.”
Col. Gul likely paid for his colonel’s position, and needed the illicit
traffic to pay off his superiors, two
Western officials told the Journal.
Family members had a different
take on Col. Gul’s actions. “He
wasn’t a radical or a terrorist,” a
family member of Col. Gul said. “He
was stressed from financial problems,” he said. The family member
denied that Col. Gul was involved in
any corrupt activity.
Another witness, a U.S. lieutenant colonel, was cited in the report
as saying some senior Afghan officials see the AAF aircraft as a
source of income.
They “want to continue these nefarious and profitable activities with
the billions of dollars worth of aircraft we’re buying them and the
hundreds of millions we spend every
year on maintenance and fuel,” he
told investigators.
In April, a coalition spokesman
couldn’t give a conclusive answer
about why Col. Gul opened fire, but
suggested it was because of a disagreement with coalition forces.
About half of all incidents where
Afghan servicemen turn on their coalition counterparts are the result of
personal disputes, NATO Training
Mission-Afghanistan said shortly after the April shooting, challenging
the Taliban claim of having planted
Col. Gul.
The current probe into alleged
drugs and weapons transport continues to look into ramp No. 5. Investigators are also looking into
movements at other military airfields used by the AAF, especially
those near northern border areas.
Northern Afghanistan is a major
route for the transport of opium and
heroin to consumers in Russia and
Western Europe. Opium is mostly
grown in southern Afghanistan, and
is smuggled to the north to be
moved on to the rest of the world,
Western officials say.
Suspicions that AAF aircraft have
been used to ferry money, weapons
and drugs throughout the country
first surfaced in late 2010, Western
officials say.
—Yaroslav Trofimov, Habib Khan
Totakhil, Ziaulhaq Sultani
and Julian E. Barnes
U.S., Afghanistan Near Agreement on Bagram Prison
BY CHARLES LEVINSON
AND DION NISSENBAUM
KABUL—The U.S. and Afghan
governments are close to an agreement on the hand-over of a U.S.-run
detention center in Bagram to Afghan control, the spokesman for the
Afghan president said.
Such a deal, if reached, would remove one of two main obstacles
holding up a U.S.-Afghan strategicpartnership pact outlining U.S. military presence here after most international forces withdraw in 2014.
“Both sides are close to reaching
an agreement and signing a memo-
randum of understanding by which
the authority over Bagram prison
will be transferred to an Afghan
high-ranking official from our Ministry of Defense,” President Hamid
Karzai’s spokesman Aimal Faizi said
in an email.
Bagram prison, known officially
as the Parwan Detention Center, is
the main U.S.-run prison facility in
Afghanistan. It is located on the Bagram Air Base, one of the largest
U.S. military bases in the country,
northeast of Kabul.
U.S. officials in Afghanistan said
they couldn’t comment on the status
of the negotiations with the Afghan
government until a deal was completed.
“It’s premature. Negotiations are
still ongoing,” said Lt. Col. Jimmie
Cummings, a spokesman for the U.S.
military in Kabul.
The strategic-partnership agreement, which U.S. and Afghan officials have been negotiating for over
a year, has snagged over two issues:
the transfer of U.S.-run prisons to
Afghan control and Afghan demands
that the U.S. halt night raids to nab
suspected insurgents.
U.S. officials hope to conclude
the partnership agreement ahead of
a May North Atlantic Treaty Organi-
zation summit in Chicago, where alliance leaders are expected to hash
out an agreement to support Afghanistan for years to come.
Mr. Karzai has long demanded
the prison’s hand-over, arguing that
continuing U.S. detentions of Afghan
citizens represent a violation of Afghanistan’s national sovereignty and
provide a rallying cry to insurgents
looking to recruit new fighters.
U.S. officials have twice postponed plans to hand over authority
for Bagram prison. In the past they
have said they believe the Afghan
justice system remains ill-equipped
to manage the facility.
OPINION: REVIEW & OUTLOOK
Beijing at 7.5%
C
hinese Premier Wen Jiabao set
off a firecracker on Monday
when he announced the government is targeting only 7.5% growth for
2012. This is being presented in many
quarters as a sign that Beijing is willing to tolerate slower growth in the
name of better growth—more balanced,
socially harmonious and less prone to
bubble formation. If only it were so.
A lot is riding on this announcement, especially among those who
hope that China will be able to contribute to global “rebalancing” by
shifting away from export- and investment dependence and toward domestic
consumption. And at first blush this
looks exactly like what Beijing is trying
to do. “[B]y setting [this target] we
will guide all localities to focus their
work on restructuring the economy,
transforming its development pattern,
and improving the quality and effect of
its growth,” the powerful National Development and Reform Commission
(NDRC) notes in its 2012 work plan,
also released Monday.
To that end, Beijing lists a lot of
things it plans to do: “[We will] formulate and promulgate a guiding list for
key products and services of strategic that China is nearing the end of the
emerging industries”; “We will promul- line for its current strategy. All develgate and implement the plan for allo- oping countries can achieve high
cation of the productive forces and re- growth rates simply by importing (or
structuring in key [heavy] industries”; copying) technologies available else“We will formulate the list for encour- where. Eventually, however, the tactic
aging the development of emerging in- no longer works. Upon reaching the
dustries and new busitechnology frontier, the
ness models in the
only way to grow is to
Doing less of the
service sector.”
stretch the frontier itwrong thing is not
All of this will surely
self. China is fast reachproduce a slower growth
ing that point.
the same as doing
rate—it’s harder going
Beijing
presumably
the right thing.
than simply dumping bilagrees with this. But one
lions of yuan into roads
refreshing conclusion of
and bridges. The problem
the report is the warning
is the “we” in the NDRC report. Rather that only private enterprise can lead
than allowing the market to allocate advanced growth. “The role of the priresources, Beijing proposes to have the vate sector is critical because innovagovernment continue stage-managing tion at the technology frontier is quite
development, only in a supposedly bet- different in nature from simply catchter way.
ing up technologically,” the report
For reasons why this approach says. “The process becomes essentially
won’t work, look no further than a ma- one of trial and error, with the chances
jor report released last month by the of success highly uncertain. Innovation
World Bank and the Development Re- is not something that can be achieved
search Center of China’s State Council, through government planning.”
which assesses China’s prospects over
It’s a good bet that Communist
the next two decades. The report of- Party leaders understand that the old
fers the not-so-surprising conclusion investment-dependent model is failing
in a politically significant way: It is
not spreading the returns from growth
sufficiently widely. Yet this week’s dogand-pony show in Beijing constitutes
another reminder that Beijing has
made a political calculation not to undertake a genuine transformation. Doing so would cede too much Party control of the economy. The alternative
would require empowering individual
entrepreneurs and consumers in ways
that cut against the Party grain.
Which leads to a different interpretation of that new 7.5% target. Michael
Kurtz of Nomura argued in a research
note this week that a benefit of a
lower number is that Beijing will feel
less compelled to over-goose the economy to meet or exceed its desired
growth rate. An extrapolation from this
surmise is that perhaps Beijing hopes
scaling back some of its most distorting policies, and especially its reliance
on cheap credit as stimulus, will constitute sufficient “reform.”
Maybe so. But doing less of the
wrong thing is not the same as doing
the right thing. That’s a point to keep
in mind as Beijing touts its latest commitment to rebalancing.
From Obama With Love
W
hen U.S. Secretary of State Hillary Clinton in December criticized fraudulent parliamentary
elections in Russia, Vladimir Putin accused her of sending a “signal” to prodemocracy protestors. He can be forgiven for thinking his attack worked.
This week, after Mr. Putin claimed a
first round victory in similarly suspect
presidential elections, Washington’s response has been muted and accommodating.
State put out a tongue-tied statement
to “congratulate the Russian people on
the completion of the elections” and
“note” (three times) the concerns of independent election monitors and “urge”
(twice) the Kremlin to try harder next call for Congress to repeal Jacksontime. There was not a word of criticism, Vanik, which puts restrictions on trade
much less condemnation, about the ex- with Russia. Making the repeal of an
clusion of any credible opposition from amendment passed in 1974 a Presidenthe airwaves and ballot
tial priority the week afand other obvious manipter a shady election sends
Steal an election,
ulations of the vote,
unmistakable signal to
get U.S. concessions. an
which has become the Puthe Kremlin that its antitin standard for 12 years.
Americanism will be rePresident Obama, who
warded.
made “reset” with Russia a hallmark of
So does Tuesday’s disclosure on Capihis foreign policy, avoided the subject tol Hill that the Administration wants to
altogether. At least he didn’t call to con- share classified U.S. data about missilegratulate the Russian leader on extend- defense tests. Brad Roberts, a deputy asing his term in office. But in his first sistant secretary of defense, told a
mention of Russia since Sunday’s elec- House committee that the U.S. hopes to
tion, Mr. Obama on Tuesday repeated his press ahead with talks on cooperation to
overcome Russian opposition to a Europe-based missile-defense system.
Never mind the Kremlin’s blistering attacks on the West in recent weeks, including threats to target NATO allies
with Russian nukes.
Administration officials say the U.S.
needs to work with any Russian ruler
on a range of issues. That’s true. Yet
even on the realpolitik terms favored by
this White House, this week’s overeager
show of re-engagement seems unlikely
to help U.S. interests. Mr. Putin gets
policy concessions and the U.S. blessing
he wants to legitimize his form of democracy, while the U.S. gets nothing.
Welcome to Russian “reset,” round two.
China’s Debate Over Rights
B
eijing’s rubber-stamp legislature have stretched the meaning of the
was presented with a revised term to justify holding dissidents such
Criminal Procedure Law yester- as the artist Ai Weiwei and human
day, giving the public its first look at rights lawyers such as Gao Zhisheng
what is almost guaranteed to be the fi- for months on end without even notinal wording of this controversial legis- fying their family members or lawyers
lation. Missing from the law was a pro- that they are in custody.
vision found in earlier
Such cavalier violadrafts that would have
tions of the law are part
A proposed law to
allowed the police to
of a longstanding pheallow “enforced
hold suspects incommunomenon that Jerome
nicado and in secret loCohen, a law professor
disappearances”
cations. That represents
New York University
sparked a backlash. at
progress, but it’s hard to
and authority on the
say how significant the
Chinese legal system,
change will be.
has dubbed China’s “two
That’s because the existing Criminal criminal processes.” The majority of
Procedure Law also doesn’t allow au- defendants are tried in accordance
thorities to “disappear” suspects, yet with the law. Yet when it comes to
the practice is common. The current prosecuting political cases, authorities
law does provide for “residential sur- throw the law out the window.
veillance,” meaning house arrest,
The new Criminal Procedure Law ofwhich is supposedly a less severe form fers some glimmer of hope. The govof detention than jail. But authorities ernment released 99 draft amendments
to the law last August, many of which
offer new procedural safeguards that,
if followed, will protect defendants’
rights.
More importantly, the proposed revision of Article 73, allowing “residential surveillance,” instantly sparked
public debate. Legal experts, human
rights experts and journalists criticized
the draft for legalizing the kidnapping
of dissidents. And for the first time,
public consultation on a proposed
criminal law made a significant difference, forcing the government to backtrack yesterday.
This reflects the emergence of what
some call “rights consciousness,”
which is just a fancy term for the public demanding that the government
abide by its own laws. The Chinese
Communist Party says it wants to
move toward “rule by law”—the use of
laws rather than reliance on fiat—but
it still won’t accept the concept of
“rule of law,” which would subordinate
the Party to an independent judiciary.
Public opinion will have to drag it
kicking and screaming toward this
goal.
The real test of whether this fight
makes a difference will come the first
time the police disappear somebody
under the new law. It’s unlikely that
the authorities will stop abusing the
law without a fight. Now, at least, human-rights lawyers can argue that it’s
illegal by pointing to the fact that the
government backed down from legalizing it.
Comments? The Journal welcomes
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and editorials. It is important
to include your full name, address
and telephone number. Please
send letters to the editor to:
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OPINION
American Crisis, Chinese Opportunity
Forget Mao, the Chinese are
channeling Rahm Emmanuel.
President Obama’s first chief of
staff popularized the dictum that
“you never want a serious crisis
to go to waste” back in 2008. And
it has been taken to heart by
China’s leadership, which sees
America’s deficit crisis as a perfect opportunity to further shrink
the military gap between Beijing
and Washington.
Beijing hikes military
spending as the U.S. cuts.
At stake is no less than the
liberal international order.
For the first time, China’s official military budget this year will
top $100 billion, even though
many observers believe that the
real number is more than double
that amount. China’s increase of
at least 11% at a time when America is cutting its own military
budget by nearly $500 billion
over the next decade should put
to rest any doubt that Beijing
plans to supplant American supremacy in Asia. Now the question is whether the combination
of China’s rise and America’s
weakness presages the breakdown
of the post-World War II global
order.
True, this year’s increase in
the military budget is less than in
2011, when it jumped 12.7%, but
annual growth has been in the
double digits for well over a decade. The Institute for International Strategic Studies now estimates that China accounts for
more than 30% of all defense
spending in Asia, and that Asia
this year will spend more on its
military than the West for the
first time in centuries.
Some might argue that it’s
simply catching up from a very
low base. Until the 1990s, China
had a 1950s-style army, only a
coastal navy and no real air force
to speak of.
But those days are long gone.
Despite some remaining weaknesses, the military is increasingly fielding sophisticated weapons systems, including
intercontinental ballistic missiles,
nuclear submarines, advanced jet
fighters and even modernized
bombers. In addition, China appears to be trying to innovate in
the military sphere. It’s producing
an anti-ship ballistic missile, developing its own stealth jet
fighter and pursuing (it is suspected) cyberwarfare capabilities.
What remains unclear is why
China is building the world’s second-largest military. Beijing
would argue that America has
done the same thing over the past
70 years, only cloaked in hypocritical rhetoric about freedom
and opportunity. Now, as America
weakens, it is only natural that
the world’s fastest-growing econ-
disruptive regimes such as North
Korea, Iran and Sudan, while continuing to repress its own people.
So it seems less likely to merge
with global liberal trends and
more interested in trying to reorder the international status quo
in its favor.
Thus, the Obama administration, and whoever follows it,
needs to reverse course on military cuts that speed up our decline in Asia and around the
world. Those cuts do almost nothing to reduce America’s deficit,
but they will hamper the one role
only we can play in the world. It’s
irrelevant that the U.S. spends
more on its military than the next
10 nations combined—none of
them have anything remotely like
America’s global responsibilities.
Our aging planes and ships and
overworked military personnel
are now going to be asked to do
more with less. Something has to
give, and at this rate it likely will
be America’s ability to remain a
credible global stabilizer.
The liberal international order
has been the most beneficial one
in recent history. If it weakens
and cracks, the costs of avoiding
war or containing aggression will
be far greater than the billions of
dollars we are trying to save now
and which the Chinese are willing
to spend.
Associated Press
BY MICHAEL AUSLIN
A Chinese Navy nuclear-powered submarine sails near Qingdao.
omy begins to take its place in
the sun, just as America supplanted Great Britain in the 20th
century.
Yet there is a great gulf between China’s vision of the world
and America’s. America’s hegemony for the past three-quarters
of a century has been strikingly
benign, by historical standards.
Indeed, it has sought to set a new
norm for great powers, even
while protecting its interests and
upholding its commitments to allies and friends. It has further
evolved Great Britain’s uneven experiment in international liberalism.
The U.S. has extended this approach to China. For the past four
decades, the United States has actively sought to bring China into
the world community, and its
Navy has protected the sea lanes
used by China’s export machine.
Whether under Republican or
Democratic administrations,
Washington has largely hesitated
to confront Beijing over its human
rights abuses or bullying of neighboring nations. Beijing may worry
about America’s alliances in Asia,
but all those long predate China’s
rise. The Obama administration’s
“pivot” now focuses on China
only because of the country’s dramatic military buildup, which began in the Clinton years.
There is little reason so far to
believe that China shares any of
these values or that it would act
for the common global good in
the same way. It openly bullies its
neighbors. It chafes at the open
trading system even as it benefits
from it. And it routinely supports
Mr. Auslin is a resident scholar
in Asian studies at the American
Enterprise Institute and a columnist for wsj.com.
Theater, Life and the Afterlife:
Tomb Decor of the Jin Dynasty
From Shanxi
China Institute
Through June 17
BY LEE LAWRENCE
New York
In the jigsaw puzzle of China’s
rulers and ethnic groups, the 12thcentury Jurchen Jin dynasty
(1115-1234) is one of the least
known, particularly outside China.
Sweeping down from the steppes of
Manchuria, these “people of the
forest” carved out a kingdom that
has in many history books been upstaged by the Northern Song
(960-1127), who preceded them,
and the Yuan dynasty (1206-1368),
who defeated them.
A small but rich show at the
China Institute Gallery, “Theater,
ASI A
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Christine Brendle, Publisher
Published since 1889 by
Dow Jones and Company
© 2012 Dow Jones & Company. All Rights Reserved
Life, and the After Life,” aims to
correct that with a selection of 80
pieces culled from 11 tombs
excavated in southern Shanxi—an
area some 500 miles southwest of
Beijing.
On loan from the Shanxi
Museum in Taiyuan, almost all are
reliefs on brick slabs in a variety of
sizes and styles, chosen to
illustrate the range of popular
motifs. As a result, the exhibition
unfolds across the gallery’s two
rooms like a 3-D catalog of
funerary décor, complete with demonstration tomb.
We see reliefs of musicians
blowing into flutes or beating
drums, dancers caught midstride,
and a wonderful series of scenes
plucked from folk performances in
which actors used horses and other
props made of bamboo and paper.
On a more sober note, there are vignettes from Confucian stories of
filial piety, depictions of Taoist deities known as the Eight Immortals,
and a motif in tomb art that became popular under the Han (206
B.C.-A.D. 220): a set of double
doors with one slightly ajar revealing a woman who stands half-in,
half-out. Although there is some
argument about just what this signifies, the most commonly accepted
interpretation is that the woman
symbolizes the threshold between
life and death.
Though the labeling does not
explain how the works are made,
some reliefs appear to be molded,
others incised, then painted by
applying pigment directly onto the
clay or on a base coat of lime or
other material. Some are therefore
more labor-intensive than others,
just as the workmanship in some is
of higher quality. The Eight
Immortals, for example, are almost
crude compared with some of the
musicians or with a scene from
daily life showing a muscular horse
pulling on its tether. It seems safe
to assume that the Immortals
might have hailed from a less expensive workshop, a reminder that
one’s choice of tomb décor was as
much a function of one’s pocketbook as an expression of one’s
preferences.
Did the Jurchen people of
China’s Jin dynasty
believe in an afterlife?
By Chinese standards, Jin tombs
were modest. Almost all of the 100
or so tombs unearthed to date are
single chambers, often small, always made of brick. On the outside,
they are plain; inside, the wall decorations emulate architectural features of Shanxi houses and display
the deceased’s choice of motifs. We
see this in a tomb excavated in
2009 and reassembled in the gallery where, ingeniously, director
Willow Weilan Hai Chang repositioned the south wall to allow visitors inside the space. It is about 48
square feet, enough for a funerary
bed and a few household objects
(removed for the show) with little
room to spare.
The far wall features carved
doors, this time tightly shut and
flanked by deeply carved reliefs of
a man and woman. These stand-ins
for the tomb’s occupants look on
without expression, hands clasped.
Opposite them, four other figures
look back. They sport hats and
clothes that identify them as the
principal characters in a popular
form of Jin theater: the leading
man; the foil or straight man, here
wearing an orange robe with white
polka dots; the jester; and the court
official. Along the side walls, bricks
are carved to resemble lattice windows, beneath which peonies
bloom in pots, auspicious lions
prance and guardians who look like
miniature Sumo wrestlers keep
watch.
What comes through loud and
clear is that the Jin adopted
Chinese beliefs and customs and
that they loved their
entertainment. But at least one
scholar finds it puzzling that, for
all this emphasis on theater, the actors never seem to be enacting a
particular play. The effigies of
actors placed in the tomb appear
stiff and generic. Did the deceased
avoid one set script because they
wanted the actors to vary their
repertoire throughout eternity?
“Maybe,” says Nancy S.
Steinhardt, a professor of East
Asian art at the University of
Pennsylvania and contributor to the
show’s catalog. “Or,” she speculates,
“maybe they don’t really believe
there is an afterlife,” in which case
they include actors as a nod to their
love of theater, not because they
believe they will need entertaining.
Shanxi Museum
A Dynasty Without the Hereafter?
Figure of a musician playing a waist
drum, from the Jin dynasty (11151234).
This would also explain the scaleddown tombs and the lack, so far, of
any sign that the Jin tried to preserve corpses. There are no jade
suits, no embalming, no wire-metal
encasements as are found at other
times and places. This is a theory
Ms. Steinhardt is still testing. If it
pans out, then Jin tombs could
point to a significant shift in
thinking in 12th-century China and
provide one more reason to pay
attention to this little-known
dynasty.
Ms. Lawrence is a writer in
Brooklyn, N.Y.
OPINION
BY JOHN BOLTON
In the transition from an old
dictator to a new one, some observers were losing faith in the
Democratic People’s Republic of
Korea, believing it had lost its
magic touch in the arts of dissembling. Others had deeper faith,
though, and they were rewarded
last week when the State Department proudly announced the umpteenth breakthrough toward the
goal of denuclearizing North Korea.
The two sides agreed that
Pyongyang would suspend uranium enrichment and other “nuclear activities” at its Yongbyon facility, allow very limited
Diplomacy has costs.
Tehran’s mullahs
will be watching.
international inspection, and implement a moratorium on longrange missile launches. In State’s
telling on Feb. 29, we gave nothing
in return for the North’s (apparently) unilateral concessions, “designed to improve the atmosphere
for dialogue and demonstrate its
commitment to denuclearization.”
How sweet. Unfortunately, the
Leap Day deal is worse than just
another failed effort to chitchat
North Korea out of its nuclear
weapons. It provides a political
and economic lifeline to Kim Jong
Eun’s uncertain new regime, and it
schools him on how to outwit
America. Tehran’s mullahs will
take careful note of the Obama administration’s desperation to announce a deal, any deal, that can
be described as “progress” on the
nuclear-proliferation front.
State’s pronouncement is extraordinarily limited in scope and
verification. It contains nothing
new or different from a long string
of past “commitments” North Korea has broken and lied about with
impunity. Pyongyang has repeatedly violated Security Council resolutions requiring it to cease
nuclear and missile activities, a
point conspicuously absent from
our U.N.-centric administration’s
publicity about the latest deal.
There’s no mention, for instance, of the North’s role, possibly
financed or otherwise aided by
Iran, in constructing a reactor in
Syria, destroyed in 2007 by Israel,
for which duplicity neither North
Korea nor Syria nor Iran ever paid
a price.
International Atomic Energy
Agency inspectors will be limited
to the Yongbyon facility, which is
like looking at North Korea through
a straw—and at the wrong place no
less. The overwhelming mass of the
North’s important nuclear-weapons
activities have long been deeply
buried in hidden locations, unknown even to U.S. intelligence, let
alone IAEA inspectors.
Regarding ballistic missiles,
there was a similar moratorium in
1998, after a North Korean Taepodong missile panicked Japan by
flying over it and landing to its
east. That moratorium also covered only launch testing, and not
the countless other critical aspects
of ballistic-missile development. In
response, Pyongyang simply
shifted to deeper cooperation with
Iran, which uses the same Sovietera Scud-missile technology, the
ban thus driving the two rogue
states closer.
Most objectionable morally, despite U.S. denials of a quid pro
Associated PRess
Obama’s Sweet Deal for North Korea
North Koreans attend a large assembly at Kim Il Sung Square in Pyongyang.
quo: We are providing 240,000
tons of food aid that will almost
certainly be diverted to the DPRK
military and other favored recipients. It is a strict canon of U.S. humanitarian assistance that such
aid be closely monitored, but there
is no reason to believe that monitoring will be any more effective
than in the past. Make no mistake,
we are simply feeding young Kim’s
dictatorship.
This agreement is a sham, pure
and simple—which the North’s
separate communiqué highlights.
Pyongyang emphasizes that the
deal with Washington is a prelude
to resuming the six-party talks (including South Korea, China, Russia
and Japan), which will focus on
“the lifting of sanctions on the
DPRK and provision of light water
reactors.”
Those are hallmarks of the
failed 1994 Agreed Framework that
the North never honored. If Pyongyang’s version of the deal is even
vaguely true, it (plus the food aid
we know about) flatly violates
pledges like Secretary of State Hill-
ary Clinton’s last year that “we do
not intend to reward the North
just for returning to the table. We
will not give them anything new
for actions they have already
agreed to take.”
With such predicates, why did
the Obama administration proceed? Most likely, it followed ideology and habit. The diplomacy
here is entirely faith-based, as in:
“There’s nothing to lose, so why
not try negotiation? Maybe this
time it will work.”
But diplomacy, like all human
activity, is never cost-free. There is
always something to lose. In this
instance, Washington’s declaration
that it has no “hostile intent” toward North Korea reduces pressure on the undeniably vulnerable
new regime, providing it at least a
partial get-out-of-jail-free card for
coming misbehavior.
What we should have done is
concentrate on finding ways to exploit the North’s leadership transition in order to hasten Korean reunification. Unfortunately, last
week’s deal is visible proof that
President Obama never seriously
contemplated undertaking this arduous but vital effort, which is
now a lost opportunity. Instead,
we have strengthened the DPRK’s
confidence, sustained its nuclearweapons and missile programs,
and prolonged the agony of its
people.
Iran, meanwhile, must be relishing this latest display of U.S.
weakness and memory loss. Even
as the acute threat of military
force against Iran has been rising,
Tehran sees with laser-sharp clarity that when the going gets tough,
Team Obama gets negotiating.
The critical elements of the
Leap Day deal are available for
Tehran to use to its advantage: unverifiable moratoria, the resumption of long-failed negotiations
that will buy it time, and the expectation of reduced economic
pressure. Iran can even count on
Mr. Obama to try to restrain Israel,
its strongest and most determined
regional opponent.
Undoubtedly, a campaigning
President Obama, fearing that his
much-touted foreign-policy successes are less than meet the eye,
is looking for quick diplomatic triumphs. He certainly does not want
inconvenient crises in Iran and
North Korea erupting simultaneously later this year.
But whatever the electoral impact of the North Korea deal may
be, its national-security consequences are all too painful. Let’s
hope a new president can reverse
them.
Mr. Bolton, a senior fellow at the
American Enterprise Institute, is
the author of “Surrender Is Not an
Option: Defending America at the
United Nations” (Simon & Schuster, 2007).
Midwifing a Burmese Peace
BY EVA KUSUMA SUNDARI
The government of President
Thein Sein has had considerable
success in wooing Western countries with a flurry of reforms. A
transition to peaceful democracy,
however, will be simply impossible
without overcoming decades of
mistrust and acrimony between
the state and armed ethnic
groups. Third-party mediation,
whether through the U.N. or the
Association of Southeast Asian
Nations (Asean), is the way forward.
Representatives of the government recently signed agreements
with the United Wa State Army,
the National Democratic Alliance
Army, the Democratic Karen Buddhist Army, the Restoration Council of Shan State, the Chin National Front, the Karen National
Union, the Shan State Progress
Party and the New Mon State
Party. Despite these agreements,
and promises by the regime to follow up with development projects
and parliamentary discussion,
some groups refuse to negotiate
and violence continues. Kachin
state is currently experiencing its
worst fighting in decades in some
areas, with continuing reports of
gross human rights abuses by the
military against ethnic minorities.
In fact the government’s strategy to improve relations with
armed ethnic groups is in serious
need of repair. The recent ceasefires are questionable in their validity as steps toward lasting
peace, and in many cases have fomented further distrust. Some
ethnic leaders claim they were
hoodwinked and misled into joining the talks by a government that
A third party is needed in
the peace talks between the
regime and minorities.
has no sincere intention of peace,
but only to use them in the public
relations offensive to woo foreign
observers. As such, these talks
should not yet be taken as serious
progress toward national reconciliation. Many ceasefires have been
signed and broken over the years.
Many ethnic groups do not recognize the legitimacy of the military government’s 2008 Constitution, which essentially renders
redundant the 1947 Panglong
Agreement and 1948 Union Constitution, signed between the myriad
ethnic groups and General Aung
Sang. The Panglong Agreement secured certain autonomy for the
ethnic areas under a federal system. It is this agreement that they
wish to re-enact under any future
national peace process.
For national-level peace talks
to be effective and binding, they
need to be held in a neutral environment and with the benefit of a
neutral third party as host. Burma
is opening up—enough so that allowing a third party to organize
peace talks follows naturally. Mediation could be arranged regionally, through Asean, or internationally through a U.N.-authorized
team involving the EU, U.S. and
Asean. Alternatively, an individual
host nation, such as Indonesia,
could take the lead. The key is to
bring neutrality and legitimacy to
a difficult process.
Third-party mediation is
tested, and has shown results in
Aceh in Indonesia, Cambodia and
many African countries. If the Burmese regime truly wants peace,
and to join the world community
on equal footing, inviting a foreign
organization to oversee talks will
demonstrate its sincerity. This
will, in turn, increase trust in the
Burmese regime abroad and speed
the removal of foreign sanctions
and other investment barriers—
the regime’s ultimate goal.
It is to the advantage of ethnic
groups to publically pressure Nay-
pyidaw for third-party talks. The
United Nationalities Federal Council, an umbrella organization that
incorporates most of the ethnic
groups, has already complained
that the regime has been using
military might in suppressing
some groups, while luring those
who have signed ceasefires with
the incentive of regional development in a deceitful attempt to unhinge their struggle for political
equality.
As third-party talks work to
unite Burma’s factions from the
ground up, the parliamentary process can work from the top down.
The country’s laws and Constitution do not yet match the dream
of a united, federal Union of
Burma. They do not incorporate
the views and visions of all parties, especially ethnic groups.
When opposition National League
for Democracy members hold parliamentary seats again after the
April by-elections, this goal can
become a top priority.
Burma is a nation poised at one
of the most important junctures of
its short but often tragic history.
Its future as a strong and united
democracy is reliant on peace.
Now is the time for all concerned
parties to take the first step toward that end and push for thirdparty mediated peace talks. Hope
is descending on this conflict-ravaged country of enormous potential; but its government, its Parliament, its people and the
international community can ensure this hope is not lost, as it has
been so many times in the past.
Ms. Sundari is the president of
the Asean Inter-Parliamentary
Myanmar Caucus, an Indonesian
member of parliament for the
Democratic Party for Struggle
and member of several parliamentary commissions, including
the Parliamentary Commission on
Law and Human Rights.
Pepper . . . and Salt
THE WALL STREET JOURNAL
“We’re top management, Don,
we can’t stage a coup.”
JAPAN: ONE YEAR ON
Amid Upheaval in Japan
Signs of Progress, Charity
Tomoko Akiha, from left, her son, Lennon, and volunteer worker Anri Ishihara, in front of the Akiha home in Ryozen, Fukushima prefecture.
ful local leaders, such as the mayors of Tokyo and Osaka, who may field their own
legislative candidates in the next national
election.
Mr. Kamei says he may join them. “We
have to build something new amid the
waves swelling throughout Japan,’’ he says.
Building something new is the goal of
the marine-products division of the Miyagi
prefectural government, in the northeast.
Even before the tsunami hit, Miyagi’s fisheries were in decline, says Yuji Izumi, a government official overseeing the industry.
The prefecture has proposed issuing
fishery licenses—now largely reserved for
local fishermen—to joint ventures between
locals and larger commercial concerns.
But it’s a tough sell. “We’re telling them
we have to build something that can survive
even in a very competitive market,” says
Mr. Izumi.
The Japanese government is trying to
woo businesses to the northeast with a
range of tax breaks and subsidies. Yukon
Kaname, head of the Japan branch of Ontario-based solar-panel maker Canadian
Solar Inc., hopes to build power-generating
solar farms in areas where farmland has become too salt-soaked for crops. He says he
Faces of
The Disaster
One Year On
Online>>
Read more profiles on asia.WSJ.com.
is even readying a proposal for a solar facility inside the contaminated no-go zone
around the Fukushima Daiichi nuclear plant.
“They lost a lot of their main industries—fishing, forestry, farming,’’ says Mr.
Kaname. “A lot of that isn’t coming back,
especially in Fukushima.”
The fallout from Fukushima is driving
Ms. Akiha, the Fukushima mother, out of
her hometown of Date, about 56 kilometers
northwest of the Daiichi plant.
Ms. Akiha, like other mothers in Date,
kept her children indoors after the radiation plume moved toward them, refusing
her 12-year-old son’s pleas to let him play
baseball outside.
Fearful of radiation, she packed lunches
for her children rather than letting them
eat at the school cafeteria.
The in August, she sent them to a summer camp, arranged by Aichikara, based in
the central Japan city of Nagoya, far from
their home.
Anri Ishihara, 28 years old, founded the
group last April and arranged the summer
camp. She also organized visits for Aichikara members to Date.
Ms. Ishihara had never participated in
volunteer activities before. “I thought they
were uncool,” says Ms. Ishihara, an energetic political secretary.
But after the disaster, she went north to
deliver relief supplies, and came back transformed, she says. The group now has 30
core members.
During another camp organized by Aichikara in December, Ms. Akiha listened
with distress while the Date children read
out questions they had composed for a time
capsule to be opened 10 years later.
“What will the radiation levels be?’’
went one question. “Will I still be alive?”
went another.
“I couldn’t stop crying,” Ms. Akiha recalls.
Soon after, she decided to move with her
children away from Fukushima prefecture.
Ms. Ishihara helped the Akiha family find an
apartment in an area where many Aichikara
members live. She also helped Ms. Akiha
get free furniture from the Red Cross, and
took her to city hall to complete paperwork.
Ms. Akiha’s husband, a home builder,
will stay behind to tend to his business. Ms.
Akiha says she is apprehensive about the
move, but grateful.
“I’ll be able to live as an ordinary person
again,’’ she says.
Evacuee Turned Activist
BY YUKA HAYASHI
Yuka Hayashi/The Wall Street Journal
At the end of the month, Tomoko Akiha
finally is moving.
A group called Aichikara has come to the
aid of Ms. Akiha, finding her an apartment
in central Japan—far from her Fukushima
home, which was contaminated by last
year’s nuclear disaster. It also found schools
for Ms. Akiha’s children and arranged meetings with the principals.
The March 2011 disasters, in which some
19,000 were killed and hundreds of thousands were displaced, upended her life. But
amid the turmoil that continues to change
the landscape, she has forged new friendships and connections.
“Despite the awful things that happened,
there is hope as well,’’ she says.
On the northeast coast, where whole
towns were swept away by the tsunami,
communities are struggling not just to rebuild what was lost, but also seek new
kinds of businesses, such as solar-power
farms, call centers and commercial fisheries
that could eventually bring growth to the
long-stagnant region.
In many cases, the good is tightly allied
with the bad. New businesses are moving
into the northeast because the old ones
were lost in the floodwaters.
Companies are casting about for new
sources of energy after the loss—at least
for now—of the country’s nuclear reactors.
Public debate has focused on how to reform
a utility sector long criticized as inefficient
and hidebound, following the meltdowns at
the Fukushima Daiichi complex.
Japan also has seen a renaissance in activism and volunteer work. Throughout the
country, local leaders and organizations
have stepped up to fill the void left by a
confused and slow-moving national government.
Still, plenty of things haven’t changed.
Japan is mired in the same political paralysis that gripped it before the accident, with
the country’s two biggest parties quarreling
over passage of a proposed tax law, even
though both agree it needs to be passed.
Both the ruling and main opposition parties have seen support ratings tumble to
less than 15% amid charges they mismanaged disaster response and dragged their
feet on reconstruction, according to polls
from the Mainichi newspaper.
Ruling coalition member Shizuka Kamei
says Japanese voters are flocking to force-
Ko Sasaki for The Wall Street Journal
BY PHRED DVORAK
Kenta Sato, a resident of Iitate.
Kenta Sato has traveled a long
way since a nuclear accident forced
him to leave a small mountain village in Fukushima.
Hundreds of Twitter dispatches
he sent after Iitate became a radioactive hot spot brought attention
from media and lawmakers.
Soon, the well-spoken young
man—who until then had helped his
father run a small family business—
found himself deep in activism, advocating for hundreds of thousands
of Fukushima residents like himself
subjected to varying degrees of radiation exposure.
Since last summer, Mr. Sato has
spoken at the National Cancer Center in Tokyo and organized an inter-
national conference.
He has also visited villages contaminated by the Chernobyl accident in Ukraine.
“We saw places densely covered
with trees,” he said. “It was hard to
imagine flowers had once bloomed
and people had lives there.”
His efforts have yielded some results.
Mr. Sato persuaded village officials to send booklets to Iitate residents who have left, in which to record their activities since March 11
so there would be details on their
radiation exposure.
He is working with artists and
doctors to set up a fund to help underprivileged families cope with radiation-related health problems that
may emerge.
JAPAN: ONE YEAR ON
Sendai Sees Light at End of Tunnel
of reconstruction efforts.”
Japan’s economy was mired in a long
slump before the historic natural disasters hit,
and the blow was exacerbated by the Fukushima nuclear accident, which crimped the
country’s electricity supply, raised questions
about food safety, and undermined a nascent
tourism promotion effort. The triple-whammy
pushed the slow-growing nation back into recession, with gross domestic product contracting at an annualized pace of 6.8% during
the first quarter of 2011.
The disasters left scars on Japan’s economy, darkening the outlook for the already beleaguered nation. Reconstruction spending is
adding to the nation’s huge debt burden. The
OECD projected in November that Japan’s
government debt would grow to 227% of its
economy by 2013, compared with 200% in
2010.
Boom or Bust | Reconstruction spending is bolstering Japan’s economy,
Gross public debt
GDP growth
March 11,
2011
Percentage of GDP
250%
150
16000
Japan
3
50
0
’08
Daily close
4%
Greece
Italy
U.S.
100
Nikkei Average
Annual figures
Japan
200
but also expanding its debt burden
U.S.
U.K.
2
12000
1
10000
0
’09
‘
’10
’11
8000
Forecasts
–1
’12
Forecast
’10
’12
’10
’12
’10
’
Ratio of jobs to job seeker
In millions
In Tohuku and nationwide
15
1.0
0
1980
'90
2000
'10
Yes
69%
45
Miyagi
Iwate
Fukushima
National
average
40
35
30
0.2
The disasters also have given Japan’s manufacturers more incentives to move production overseas, a setback for an economy reliant on exports for growth. In a survey
conducted late last year by the Japan External
Trade Organization, a government trade and
foreign-investment promotion bureau, about
30% of large companies said March 11 made
them consider setting up new facilities overseas or expanding existing ones.
“We are seeing positive effects of reconstruction on the economy right now but they
won’t last for a long time,” said Takahide Kiuchi, chief economist for Nomura Securities,
who thinks the spending boost will peak in
the April-June quarter. “Japan’s economy
could well be in worse shape than before the
disasters, once reconstruction demand dissipates.”
But for now at least, Japan’s economy is
doing well, considering the setbacks of the
past year. Adding to the disasters, Japan also
faced a strong yen crimping exporters and
flooding in Thailand, which temporarily crippled a regional manufacturing hub for many
leading Japanese companies.
The Organization for Economic Cooperation and Development estimates Japan’s econ-
’12
Consumer-sentiment index
0.4
5
’11
No reponse
9%
Manufacturing jobs
0.6
’10
Others
9%
NOTE: The survey was sent to 216 large manufacturers in May, answered by 163
0.8
’09
Not really
18%
Will a move to shift production in the
supply chain overseas accelerate
following the disaster?
10
6000
2008
’12
METI survey on ‘hollowing out’ after the 3/11 disaster
‘For a while, I thought Sendai was
done for. I was convinced my
business would go under,’ said
Kentaro Mihara, a 47-year-old
owner of a luxury-watch shop in
the city’s shopping district. ‘I
never thought things would turn
around so quickly.’
14000
0.0
March 2011
25
2010
January 2012
’11
’12
Sources: OECD (debt and GDP forecasts); the governments (actual GDP); FactSet (Nikkei); Ministry of Internal Affairs and Communications (jobs); The Ministry of
Health, Labor and Welfare (job ratio); Cabinet Office (sentiment index)
omy will grow 2% this year after shrinking
0.7% last year. That equals the projected pace
for the U.S. and far outpaces the euro zone’s
0.2% forecast. The government’s monthly consumer-sentiment index, after plunging in the
wake of the disasters, is now nearing preMarch 11 levels. The Nikkei Average Index has
rallied 14% year-to-date, beating the 6.8% rise
for the Standard & Poor’s 500 Index.
That itself, for many Japanese looking back
to the despair of last year, is a remarkable
achievement.
“For a while, I thought Sendai was done
for. I was convinced my business would go under,” said Kentaro Mihara, a 47-year-old
owner of a luxury-watch shop in the city’s
shopping district. “I never thought things
would turn around so quickly.”
Sales in his stores are up 30% from
pre-3/11 levels, he said.
A big source of Japan’s recovery is government reconstruction spending. Tokyo plans to
spend ¥20.9 trillion ($258 billion) on the
northeastern Tohoku region during the first
two years after the disaster, providing housing for hundreds of thousands of people made
homeless, rebuilding infrastructure such as
ports and roads, and cleaning up the vast area
in Fukushima contaminated by the nuclear accident. That mammoth budget is roughly
equal to the GDP of Portugal or Chile.
The gush of money is creating what some
see as a minibubble in a region that had suffered from declines in agriculture and fishery,
an exodus of young people to big cities and
shrinking public-works spending by the government.
But some analysts see the labor shortage
as a sign of trouble awaiting Tohoku once the
reconstruction boom ends, and symbolizes
what many other regions in Japan face over
the coming decades.
Damage from the tsunami and nuclear accident prompted many to leave towns and villages for big cities, sapping energy out of
communities.
Onagawa, a tsunami-ravaged town, has lost
20% of its population since 3/11.
“After so many years of shrinking, we are
having a hard time catching up with the orders flying in,” says Hirohide Ito, secretarygeneral of the Miyagi General Construction
Association, a local trade group.
The labor shortage is met in part by workers brought in from other parts of Japan, who
have filled up the area’s hotels and apartments.
BY DAISUKE WAKABAYASHI
BY JURO OSAWA
In a few weeks, more than one year after
the tsunami washed away his family sweets
shop in Rikuzentakata, Masayuki Kimura
says the store will reopen—at last. It has
been a long struggle for Mr. Kimura, who
had originally thought he would be able to
restart the business in October.
In recent months, he moved out of an old
railcar where he had started baking into a
kitchen on a hillside away from the destroyed central part of the city. This location, which he is borrowing from a mushroom farmer, has more space so he can make
more desserts at one time. He is working on
some new creations including doughnuts
made from different vegetables.
He has also been busy planning the look
and feel of his new store. Working with designers, the stores are trying to replicate the feel of
Last summer, cattle shipped from prefectures around Fukushima Daiichi were found to
have been contaminated with radioactive cesium exceeding the government-set provisional limit. The government suspended beef
shipments from the areas until late August,
when it implemented a new, stricter screening
system. The controversy over contaminated
beef seriously damaged the lives of local cattle farmers. Toshimi Fukazawa said in July
that he had little hope his business could survive. He said he had savings that would last
only a month.
Mr. Fukazawa’s farm, about 70 kilometers
southwest of Fukushima Daiichi, is still alive
and shipments have resumed. They are only
about half preaccident levels. “I keep hearing
from wholesalers that consumers still avoid
Fukushima beef, even when it’s really
Masayuki Kimura’s store will reopen soon.
shops in a rural English village, rather than in a
boxy prefab building. Construction crews have
nearly completed the building and Mr. Kimura
hopes to open the shop in early April.
Juro Osawa/The Wall Street Journal
Compensation Fund Is Only Hope
Hisashi Murayama for The Wall Street Journal
New Vegetables, New Doughnuts
Toshimi Fukazawa, 62, and his wife, Natsu, 56.
cheap”—and radioactivity tests have shown
his cattle weren’t contaminated, Mr. Fukazawa says. “It’s really painful.”
He said the government loans and payments to date from Tokyo Electric Power
Co., the Fukushima operator, were far from
enough to make up price drops. “If we can’t
get enough money from Tepco, that would
be the end for us.”
* *
ON OTHER FRONTS
For Shear Thrills, Nothing Beats This Competition
In New Zealand, 600 Sheep Handlers Test Skills; Now Some Fans Even Have Olympic Dreams
BY LUCY CRAMER
Masterton, New Zealand
Pete Nikolaison
C
had Furlong, a 23-year-old
from Springfield, Ore., has a
secret. He shears sheep for a
living. Journeying thousands of kilometers to New Zealand, Mr. Furlong is one of a hard-core group of
U.S. sheep handlers who competed
in the recent Golden Shears World
Championships.
In a converted basketball court
in this small town in a prime
farming region, he tested his
speed and dexterity with a pair of
electric clippers, and strength in
controlling a wriggling sheep,
against 600 shearers from 25
other nations.
“In the states you don’t really
mention you are a shearer because
they’d laugh at you,” says Mr. Furlong, a former cowboy.
At stake in New Zealand—the
spiritual home of shearing and a
country where sheep outnumber
people about seven to one—is a
prize of $2,000 and the title of
world’s best shearer.
Thousands of dollars are bet on
the outcome. The country’s Prime
Minister John Key had a front-row
seat for the final day of the contest last weekend. Now some fans
even have Olympic aspirations.
New Zealand’s farm lobby
group wants the International
Olympic Committee to include
shearing as a demonstration
event. “Time has come to elevate
shearing’s sporting status to the
ultimate world stage,” said Federated Farmers Meat & Fibre chairwoman Jeannette Maxwell. “It has
competitors racing against each
other, the clock and in our case,
sheep.”
In the U.S., sheep shearing as a
spectator sport is still in its infancy. The American Sheep Shearers Council was set up two years
ago and is part of the world governing body that regulates shearing. It has around 500 members
and fielded a team of four shearers and two wool handlers, who
sort the oily fleece and are scored
Emily Chamelin competing in the World Hand Shearing Championship. Fellow shearers gave her tips on technique.
for efficiency at the sheep-fest
here.
To win in New Zealand, shearers were scrutinized by judges,
facing penalties if they don’t take
the fleece off in one go, if they
leave wool on the animal or if
they nick or cut the sheep. Speed
counts, making up about a third of
the competitors’ eventual score.
Top clippers can finish the job
with a pair of high-powered electric shears—a more powerful version of those found in barber
shops—in about 45 seconds.
But for purists like U.S. team
member Emily Chamelin—winner
of the U.S. National Blade Shearing Contest in Baltimore—the true
test of a shearer’s skill is in the
dying art of cutting off a fleece
with hand shears, which look like
giant scissors.
Ms. Chamelin, 28, fell into
shearing by accident. She had two
pet sheep as a teen in her small
town of Westminster, Md., and
couldn’t find anyone to shear
them, so she did it. Now she
works as a full-time shearer and
decided to compete in New
Zealand. “When I told people back
home I was coming, it just blew
their mind,” said Ms. Chamelin,
sporting her U.S. shearing team
hoodie, emblazoned with the image of a pair of shears straddling
the globe over the U.S. and New
Zealand flags.
After spending two months in
New Zealand preparing by shearing 4,000 sheep, she was disappointed she didn’t win. But fellow
shearers were “extremely supportive,” giving tips on gear and technique, “so I really have benefited
from doing this,” she said.
“It’s like a martial art,” said
Angus Moore, 27, and New
Zealand national champion, who
was taking his third shot at the ultimate title. “Everything has got
to be perfect. Your harmony with
the animals makes you the best or
not the best.”
Each round lasts about 14 min-
utes for the electric-powered machine shearers, but longer for divisions where cutting is done by
hand. By the end, competitors are
dripping with sweat and there are
always a couple of injuries to contend with. Bad backs are par for
the course and bangs and bruises
are to be expected.
“It takes the same amount of
energy to work in a shearing shed
for eight hours as it does to run a
marathon twice,” said Leann Brimmer, 38, of Biddle, Mont. Not only
was she in New Zealand competing as a wool handler, but she
travels the world following the
shearing season each year sorting
the fleeces as they come off the
animals.
As the final approached, six
shearers waited nervously in the
changing rooms. Winning the trophy is a serious business, and
there are few jokes between competitors. Instead, they blankly
stared ahead to summon the concentration required to take on the
sheep. Only one person can win,
and one clumsy nick or frisky
sheep can be the difference between glory, or failure and a long
trip home.
Kiwis, as New Zealanders are
known, find shearing makes a fun
bet. TAB, New Zealand’s official
betting agency, which set up a
large tent across the road from
the competition, expanded the
number and types of shearing-related bets to meet demand, taking
wagers in different divisions.
Betting at the event was up
30% from last year, with large
bets, including two 10,000 New
Zealand dollars (US$8,200) wagers on one former champ to win,
according to a spokesman for the
agency.
In the end, New Zealander
John Kirkpatrick, 41, took away
the Golden Shears Open Shearing
Final, which is open to all shearers whether they made their national team or not.
Gavin Mutch, 32, who represented Scotland, won the World
Open Machine Shearing event, for
those on national teams. Winning
was “surreal,” he said. He had been
battling injury and hadn’t been
sure he would be up to competing.
“I’d normally do a lot of training
but this year, it’s been the complete opposite,” he said. “Fitness is
a huge part of it.”
Some think shearing should be
recognized as a sport like rodeo.
“If bowling is a sport then sheep
shearing definitely is,” said Alex
Moser, 31, a shearer from Lester,
Iowa.
Mr. Furlong, of Oregon, is hoping for more recognition of the
skill back home in the U.S. “If they
saw it in the Olympics on TV, and
it was advertised more, I think
people would see it is a good
sport, and that it’s not something
to be laughed at,” he said.
Online>>
See a video about the world shearing
competition in New Zealand at
WSJ.com/Ahed.
MARKETPLACE
BY SUZANNE VRANICA
AND JESSICA E. VASCELLARO
Apple Inc.’s introduction of the
latest iPad has left Madison Avenue,
and Silicon Valley, scratching their
heads.
While some pundits predicted
the device announced Wednesday
would be called the iPad 3—and others said iPad HD—Apple threw a
curveball and didn’t use a specific
moniker for its latest upgrade.
Rather, the company simply called it
“the new iPad.”
The company didn’t provide a
detailed explanation. Phil Schiller,
Apple’s senior vice president of
world-wide marketing, simply said
that Apple broke from the convention “because we don’t want to be
predictable.”
Branding experts said the lack of
a new name is potentially confusing,
given the fact that Apple has given
new names or tweaks to line extensions before.
“It does seem to be a bit confus-
ing, when you have a product evolution, naming is a way to differentiate,” said Charles Rashall, president
and founder of Brandadvisors, a
branding firm in San Francisco. The
new name is “communicating that
they are going backwards.”
Some attendees at the device’s
San Francisco unveiling, hosted by
Chief Executive Tim Cook, seemed
confused, too. For years, Apple has
named new iPhones with new model
numbers. The initial iPad gave way
to the iPad 2, which will remain on
sale at a lower price following the
arrival of the new model. It has
used subnames, not numbers, for its
iPod product line, which has different size hardware. It currently sells
an iPod nano and iPod touch.
The Wall Street Journal earlier
reported that Apple is working with
suppliers to test a tablet with a
smaller screen. Apple declined to
comment at the time.
An Apple spokeswoman didn’t
respond to request to comment
about the possibility of naming con-
fusion.
The company also surprised customers last fall by naming its latest
iPhone the 4S instead of iPhone 5.
The lack of a new name quickly
became a hotly debated topic on the
Twitter website. “Let’s be honest,
the name “The New iPad” is already
a $10 billion mistake, black eye on
the Tim Cook era, and it’s an hour
old,” read one typical post.
Even Silicon Valley CEOs
weighed in on the name choice.
Salesforce.com Chief Executive Marc
Benioff tweeted: “Lame name of
ipad3 “The New iPad”. Where is the
zen? Ipad3? Ipads? Ipad retina? Ipadx?”
Ad experts predict that consumers will eventually call the product
the iPad 3.
There is plenty of evidence that
odd or confusing names haven’t
hurt Apple sales in the past. When
Apple first launched the iPad in
2010, the name immediately become
a viral joke. Much of the comedy revolved around the name’s suggest-
Reuters
A Plain Old Name Puzzles Experts
Apple CEO Tim Cook at the unveiling in San Francisco of ‘the new iPad.’
ing of a feminine-hygiene product.
A headline on the Winnipeg Free
Press at the time read: “The iPad Is
a Really Bad Name. Period.”
Back then many experts believed
that there would be confusion be-
cause of the one-letter difference
between Apple’s iPad and its digital
music player, the iPod. But neither
product has appeared to suffer.
—Ian Sherr
As of 12 p.m. ET
Euro 1.3256 À 0.82%
Yen/US$ ¥81.49 À 0.54%
Yen/A$ ¥86.52 À 0.87%
Oil 106.83 À 0.63%
Gold 1694.40 À 0.66%
10-year Treasury g 15/32 yield 2.023%
U.S. Warns Apple, Publishers
It Will Sue Over E-Book Pricing
American LNG Isn’t
A Panacea for Japan
CORPORATE NEWS 18
HEARD ON THE STREET 28
Friday - Sunday, March 9 - 11, 2012
**
Geely, Volvo to Discuss Projects
Executives Weigh Use of Swedish Technology in New China Brand and in Small Cars
BY NORIHIKO SHIROUZU
BEIJING—Volvo is expected to
sign a technology-sharing pact with
its Chinese owner as early as Friday,
a move that raises delicate issues of
potential brand dilution and alienating senior executives of the Swedish
car maker even as it gives the China
side a lift.
Top leaders from Volvo and Chinese owner Zhejiang Geely Holdings Group Co. are expected to sign
an agreement on Friday that would
start discussions over specific ways
Geely can tap technology that the
Swedish arm plans to phase out
over the next couple of years, according to people familiar with the
matter. Such a move could provide
a lift to Geely’s car-making abilities
and help the combined company cut
costs and tap synergies.
The talks will include to what degree Volvo technology will be used
in a planned China-only joint brand,
the people said. The companies also
are putting finishing touches to a
separate agreement that might allow Volvo and Geely to jointly develop electric-vehicle and small-car
technologies, the people said.
Such arrangements typically are
a given between a parent company
and its unit. But the Geely-Volvo
agreement carries special risks for
the Volvo side because close ties to
a Chinese auto maker could be seen
as weakening the Swedish brand.
Paired Up
A look at the two companies
Car sales, 2011:
449,255 (Up 20.3% from 2010)
432,000 (Up 4.9% from 2010)
2010 revenue:
$16.8 billion
$3.2 billion
Employees:
21,512
17,000
Head office:
Gothenburg, Sweden
Hangzhou, China
Chairman:
Li Shufu
Li Shufu
CEO:
Stefan Jacoby
An Conghui
Note: Revenue converted at current rates
Sources: the companies
The two have to be careful because
Ford Motor Co., from which Geely
acquired Volvo in 2010, has intellectual-property rights on some of
Volvo technology, according to a
person familiar with the matter.
Executives “are fully aware that
it is easy to talk about technologysharing, but it is difficult to execute
correctly,” said one person familiar
with the matter. “Benefits are immediate and obvious for Geely, but
we want to make sure we don’t dilute the Volvo brand through a careless execution.”
The discussions by a parent and
subsidiary show how Geely is respecting Volvo’s independence.
Citing the China-only brand, another person said Geely is “going to
make sure those new brand cars occupy a market segment that is separate from Volvo’s.”
The sensitivities underscore the
difficulties Chinese companies face
in their push to accumulate global
brands and move up the manufacturing value chain.
Lenovo Group Ltd. struggled to
maintain market share for years after its 2005 purchase of International Business Machines Corp.’s
personal-computer business. SAIC
Motor Corp. purchased roughly half
of South Korea’s Ssangyong Motor
Co. in 2004 but sold its stake in
2010 after Ssangyong’s business
slumped in the wake of the 2008 financial crisis.
Auto alliances in general can be
difficult, as shown by Daimler AG’s
previous ownership of Chrysler.
“This is precisely why Geely bought
Volvo—to capture advanced technology and benefit from association
with a prestigious brand,” said
Michael Dunne, head of Hong Kong
consulting firm Dunne & Co.
“Whether it is workable depends a
lot on how the company cultures
connect—or fail to connect.”
If successful, the tie-up could offer lessons to other Chinese companies looking to buy big-name business abroad.
Volvo Chief Executive Stefan Jacoby was expected to arrive in
China on Thursday for meetings in
Shanghai with Geely Chairman Li
Shufu and other executives.
The agreement is the result of
yearlong discussions by executives
from the two auto makers in a
group called the Geely Volvo Dialogue Committee. According to one
of the people familiar with the matter, Geely would first use older
Volvo technology on existing
brands, then eventually in a new,
more upscale China-only brand
Geely hopes to create as part of a
50-50 Geely-Volvo joint venture. The
Volvo technology that Geely is seeking includes vehicle underpinnings,
Dim Sum Bonds Get a Western Flavor
BY ALISON TUDOR
HONG KONG—European investors are taking a bigger bite out of
dim sum bonds issued by a growing
variety of companies, giving a fillip
to the swelling offshore market in
China’s currency.
Dim sum bonds, named after the
lunch staple of small items popular
in Cantonese cuisine, are denominated in yuan and represent one of
the few ways in which China’s currency is gradually circulating beyond its borders.
As a result of growing investor
appetite from Europe, Chinese companies are starting to ramp up their
marketing efforts in London. Chinese policy banks China Development Bank Corp. and Export-Import Bank of China are planning
roadshows in London to court investors for their dim sum bonds, said
people familiar with the matter.
While the vast bulk of yuan for
investment in dim sum bonds still
sits in Hong Kong, the growing interest and infrastructure to handle
yuan products outside Asia is a
boost for the City of London, which
is vying for a slice of the offshore
trade in the yuan, also known as
renminbi, with other financial cen-
3-month Libor 0.47355
Acquired Taste
Geographical allocation of recent dim sum deals
Asia
Europe
Hong Kong
Singapore
Tesco
BP PLC
China Development Bank
On Aug. 25, 2011
On Sept. 7, 2011
On Jan. 12, 2012
19% 53%
Total
value:
$114
18% million
32% 48%
9% 91%
Total
value:
$110
million
Total
value:
$238
million
19%
Source: Dealogic
ters across the world.
As yuan funds build up in London, European companies will also
find it easier to raise yuan to finance their Chinese operations and
Chinese companies could lessen
their foreign-currency exposure.
Bankers are vying for the prestige
that comes with advising on landmark deals.
“Hong Kong is still the major
center, but this has gone beyond
Asia,” said Augusto King, Royal
Bank of Scotland’s co-head of debt
capital markets in Asia, talking
about investors’ interest in dim sum
bonds.
Britain’s Schroders PLC and
Stratton Street Capital LLP are
among asset managers that have set
up dedicated dim sum bond funds.
In recent deals, Germany’s
Lanxess AG sold 44% of a dim sum
bond to Europeans, France’s Alstom
SA sold 25% and Britain’s BP PLC
sold 19%, according to data provider
Dealogic. Some Chinese companies
are also selling their bonds to Europeans, but the percentages of the
deals tend to be smaller. European
investors bought about 9% of a
China Development Bank dim sum
bond and 8% of one sold by Beijing
Enterprises Group, Dealogic said.
As a result, bankers are pushing
Chinese companies to market themselves beyond their home turf. But
some companies are balking at the
extra time and expense needed to
reach out to Europeans when they
can issue bonds relatively cheaply in
Hong Kong. One executive at a
mainland Chinese bank said bankers
are constantly urging him to tap demand in London, but he was concerned Europeans would demand
higher yields and the market would
be far less liquid.
The yuan clearly remains small
in a global context. It was used for
just 0.29% of all global payments by
the end of last year, according to
data from financial network Swift.
By comparison, the euro’s share is
around 43%. But London is growing
faster than other financial centers,
such as Singapore, as a hub for offshore yuan payments, including payments for currency trading, imports
and exports and dim sum bond settlements. The U.K. accounted for
30% of global yuan payments outside Hong Kong, up from 22.1% in
the first quarter of 2011, Swift said.
Bankers are also creating the inPlease turn to page 21
asia.WSJ.com
Banks Creep
Ahead With
Revamping
BY DAVID ENRICH
AND SARA SCHAEFER MUÑOZ
LONDON—The long-awaited restructuring of Europe’s banking industry is slowing creaking into motion, and may move at an even more
leisurely pace, thanks to the European Central Bank’s recent wave of
cheap lending to the Continent’s
banks.
On Thursday, top French bank
BNP Paribas SA agreed to sell a
stake in a French property company
to U.S. shopping-mall giant Simon
Property Group, and Banco Bilbao
Vizcaya Argentaria SA, Spain’s second-largest lender, agreed on
Wednesday to buy nationalized Catalonian savings bank Unnim. The
deals are the latest in a recent
flurry of mostly small transactions
as the industry consolidates and
lenders look to thicken their capital
cushions by dumping assets.
Some banks and outside experts
say they expect the volume of such
transactions to continue growing in
coming months. The impetus is that
a group of about 30 banks has until
the end of June to satisfy regulatory
requirements to come up with a total of €106 billion ($139 billion) of
capital.
“We expect to see a surge” in asset and business-line sales, as well
as mergers between banks, assuming European regulators don’t postpone the June 30 deadline, as some
banks are advocating, said João
Soares, a partner at Bain & Co. who
focuses on European financial services.
But experts say the process of
slimming down Europe’s beleaguered banks is moving slower than
expected. The banks have been defying many predictions of a flood of
asset sales, divestitures and mergers amid an industrywide cleanup.
One reason for the relatively
sluggish pace is the European Central Bank’s recent infusions of cheap
three-year loans into the banking
sector, according to bankers and
outside experts. Through two
batches of 1% loans, in which at
least 800 lenders received a total of
more than €1 trillion, the ECB relieved some of the urgent pressure
on the industry, allowing struggling
banks to delay their deleveraging
plans.
“It isn’t as important now,” said
the chairman of a major European
bank. His bank has temporarily
shelved plans to sell certain portfolios of real-estate assets, figuring
that the bank can afford to wait until prices bounce back from their
current lows.
The ECB loan program “has
bought time,” said Richard Barnes, a
credit analyst at Standard & Poor’s.
As a result, “it’s more likely to be a
gradual and organic process rather
than there being large volumes of
BUSINESS & FINANCE
Risky Bet on London
BY JOANNE CHIU
HONG KONG—The launch this
week of Hong Kong Airlines Ltd.’s
business-class flights to London reflects a risky attempt to break the
dominance of Cathay Pacific Airways Ltd. and other international
airlines in Hong Kong’s highly competitive aviation market.
The foray by the fledgling carrier,
in which Chinese aviation-and-leisure conglomerate HNA Group Co.
holds a controlling stake, is part of a
drive to expand its fleet and route
map. The goal is to get investors on
board for a Hong Kong Airlines initial public offering of stock later this
year that is expected to raise as
much as US$300 million.
Hong Kong Airlines President
Yang Jianhong said he expects the
route to break even in its first six
months with a load factor—a measure of how much seat capacity is
used—of 75%. Celebrities and investment bankers have expressed interest in the London flight, he said in
an interview.
Mr. Yang estimated that the new
route will account for around 10% of
the carrier’s total passenger revenue
after a year. The airline reported
revenue of 2.84 billion yuan
(US$449.7 million) for January
through September, more than double its 2010 full-year revenue of 1.08
billion yuan.
Mr. Yang said the airline is considering introducing similar service
to Paris later this year.
The airline on Wednesday inaugurated once-a-day service from
Hong Kong to London’s Gatwick airport using Airbus A330 planes configured to capture business and premium leisure traffic between the
international financial hubs by
charging lower prices than its rivals.
Hong Kong Airlines charges
16,640
Hong
Kong
dollars
(US$2,140) for each Club Classic
seat and HK$33,640 for each Club
Premier flat-bed seat on the LondonHong Kong flight. The latter is most
comparable with Cathay Pacific’s
business-class seat, which costs
about HK$51,370, according to its
website, more than seven times the
average economy fare.
By selling tickets at a steep discount to traditional business-class
fares, Hong Kong Airlines hopes to
tap a potentially large market for
customers who are able to spend
more than the average economy fare
for a better seat but are unwilling to
fork out the huge difference for typical premium travel.
Since it started up in 2006, Hong
Kong Airlines has struggled to compete effectively on its home turf
against the much bigger and financially sound Cathay Pacific. The
smaller airline resorted to flying
short-distance routes between Hong
Kong and Asian leisure destinations.
Hong Kong Airlines last week began flights to Taipei from Hong
Kong—one of the world’s most prof-
itable commercial air routes—and
unveiled plans to hire hundreds of
flight attendants to increase its
cabin staff by nearly 60% by year
end and meet the needs of an expanding fleet.
Hong Kong’s high costs—including for wages and airport fees—prevented the carrier from pursuing a
low-cost business model, which has
been hugely successful in other
parts of the region with brands like
Malaysia’s AirAsia. The move to
start the business-class flights underscores the pressing need to carve
out a niche for itself.
Dozens of companies in past decades have tried and mostly failed to
sustain profitable all-premium
flights as they grappled with surging
costs and inconsistent demand.
Short-lived European and U.S. luxury
carriers such as Silverjet, Maxjet
Airways Inc. and Eos Airlines Inc.
went bust around the 2008 financial
crisis. Analysts and industry executives say Hong Kong Airlines faces
similar challenges, especially as fuel
prices continue to soar.
Competition on the route is rife,
with five airlines currently operating
nine daily nonstop flights to London
from Hong Kong. Australia’s Qantas
Airways Ltd. plans to discontinue its
daily Hong Kong-London flight from
late March.
Yet unlike the earlier unsuccessful ventures, Hong Kong Airlines has
the backing of a financially robust
parent. HNA Group, which also con-
Agence France-Presse/Getty Images
Hong Kong Air Challenges Larger Rivals With Cheaper Business Fare
Hong Kong Airlines uses Airbus A330s, like the one above, on its London flights.
trols China’s fourth-biggest airline,
Hainan Airlines Co., in recent
months has emerged as one of the
most active Chinese companies
seeking overseas investment opportunities. Hainan Airlines in December bought a 19.02% stake in Hong
Kong Airlines for 842 million yuan.
“With strong Chinese backing,
the carrier should have sufficient
funds to cope with its expansion
plan in the near term, but if the
macroeconomic conditions go
against its capacity boost in the longer run, its business might be hurt
because of excess supply,” said
Kelvin Lau, an aviation analyst at
Daiwa Capital Markets.
A person familiar with the airline
said Hong Kong Airlines’ inaugural
London flight, which included VIPs
and other guests, was around 70% to
80% full. The person said bookings
for the first month of flights remain
under 50% of capacity, however,
highlighting the difficulties to fill all
116 business class seats on each
flight.
Reliability and flight frequency
remain key concerns for business
travelers, with price playing just one
part in the equation. Many corporate
travelers with membership of mileage clubs won’t easily switch to
other carriers.
“Many
business
travelers
couldn’t afford to use an airline
[with limited schedules] no matter
how cost-effective and comfortable
the offering might be. So that favors
the incumbents,” said Martin Craigs,
chief executive at Pacific Asia Travel
Association, which represents airlines, hotels and other travel-related
firms in the Asia-Pacific region.
Cathay Pacific, for example, runs
several flights a day between Hong
Kong and London. And because
Hong Kong Airlines has just two aircraft equipped for the flight, it is
subject to delays if mechanical difficulties arise.
Hong Kong Airlines said it plans
to take delivery in the middle of this
year of another plane for the route,
which will increase reliability.
AirFranceChiefAimsforGrowthasChallengesPersist
BY DANIEL MICHAELS
PARIS—Air France-KLM SA will
succeed in cutting costs and return
to profitable growth despite posting
a big loss last year and facing further discussions with labor unions,
Chief Executive Jean-Cyril Spinetta
said in an interview.
The French-Dutch airline group
on Thursday posted a net loss of
€809 million ($1.06 billion) for 2011,
compared with a net profit of €289
million for the year earlier. Revenue
rose 4.5% to €24.36 billion.
Mr. Spinetta blamed the loss
largely on a combination of rising
fuel prices and increased competition that squeezed ticket prices. He
said the company launched a costcutting program in January, which
aims to reduce nonfuel unit costs
10% by 2014.
A large part of the turnaround
plan entails boosting staff efficiency
and flexibility by changing the terms
under which employees work, particularly in France. The company has
begun labor negotiations in France
and the Netherlands and aims to
reach new pacts by the end of June.
“It is urgent that we make progress, and the majority of staff understand this,” Mr. Spinetta said, predicting success.
Negotiations in France could
prove challenging because the process is “cumbersome” and the timetable “is aggressive,” Mr. Spinetta
acknowledged.
The group’s costs in France are
higher than those of rivals, and
France has labor laws that tend to
favor workers. But Mr. Spinetta said
the French system can produce results that let companies remain globally competitive, citing French car
makers as a successful example.
Mr. Spinetta declined to say
whether the group is considering
layoffs. “We seek improvements in
efficiency,” he said. “We are talking
about how to achieve that.”
French labor union CGT, one of
the largest at Air France, issued a
statement on Thursday with the title
“The situation is deteriorating and
so is the labor climate.” The statement criticized some of the planned
cuts in the company’s unprofitable
cargo operation.
France holds presidential elections this spring, and the campaign
has prompted many companies to
delay announcing job cuts.
INDEX TO BUSINESSES AND PEOPLE
Businesses
This index of businesses
mentioned in today’s
issue of The Wall Street
Journal is intended to
include all significant
reference to companies.
First reference to the
companies appears in
bold face type in all
articles except those
on page one and the
editorial pages.
Agricultural Bank of
China..........................23
AIA Group.....................22
Air China.........................3
Air France-KLM.............16
Alstom...........................15
Amazon.com ................. 28
American Intl Group.....22
ANA.............................W6
Anglo American............19
Anheuser-Busch InBev.19
Apple..............14,17,18,28
Australia & New Zealand
Banking Group...........20
Bank of America......18,22
Barclays.........................18
Barnes & Noble ............ 18
BP.............................15,21
Canadian Solar..............12
Cathay Pacific Airways 16
CBS................................18
China Development Bank
................................... 15
China Eastern Airlines...3
China Life Insurance .... 23
China Mobile.................28
China Southern Airlines.3
Chinatrust Financial
Holding.......................23
Citigroup ............. 18,20,22
Cnooc.............................23
Credit Suisse Group 18,22
Daimler..........................15
Deutsche Bank.........18,22
European Aeronautic
Defence & Space.........3
Export-Import Bank of
China..........................15
Facebook ....................... 18
Fast Retailing...............23
Ford Motor....................15
Fortescue Metals Group
.......................................23
Foxconn Intl Holdings .. 23
Glencore Intl.................19
Goldman Sachs........18,22
Google...........................17
Hainan Airlines.............16
Heng Leong Intl..........W9
HNA Group....................16
Hon Hai Precision
Industry ..................... 23
HSBC Holdings ........ 20,21
HTC................................17
Huawei Technologies.4,17
Inpex..............................23
International Business
Machines....................15
Jiangxi Boya BioPharmaceutical..........21
Jiangxi Copper..............23
J.P. Morgan Chase...18,22
Kia Motors....................23
Lagardere......................18
Lanxess.........................15
Lenovo Group................15
LG Electronics..........17,23
LVMH...........................W9
Mitsubishi UFJ Financial
Group..........................23
Mitsui............................21
Morgan Stanley.......18,22
MTV Networks Intl.....W6
News Corp.....................18
Nikon.............................23
Nokia.............................17
Nomura Holdings..........23
Northrop Grumman........4
Peace River Coal...........19
Pearson.........................18
Ping An Insurance........23
Qantas Airways............16
Rabobank ................. 20,23
RBC Capital Markets....18
Rio Tinto.......................19
Royal Bank of Scotland
Group..........................21
SABMiller......................19
SAIC Motor...................15
Samsonite...................W6
Samsung.......................28
Samsung Electronics....17
Schroders......................15
Shenyang Blue Silver
Industry Automatic
Equipment ................. 21
Singapore Airlines......W6
South African Airways
.....................................W6
Ssangyong Motor.........15
Standard Chartered......20
Stratton Street Capital15
Talisman Energy...........19
Toyota Motor................23
Verlagsgruppe Georg von
Holtzbrinck ................ 18
Visa ............................... 18
Wells Fargo Securities.18
Woodside Petroleum....23
Xstrata..........................19
Zhejiang Geely Holdings
Group..........................15
ZTE................................17
People
This index lists the
names of businesspeople and government
regulators who receive
significant mention in
Today’s Journal.
Allen, Paul...................W2
Azoff, Irving................W2
Benioff, Marc................14
Benmosche, Robert H..22
Bentz, Tom....................22
Caruso, Rick ................ W2
Chan, Justin..................21
Cook, Tim.................14,28
Craigs, Martin...............16
Dallara, Charles..............1
Daly, Bob.....................W2
Dunne, Michael.............15
Dutra, Felipe.................19
Eisner, Michael ........... W2
Ellison, David..............W2
Esho, Peter ................... 23
Evans, Bob...................W2
Fendler, Hagen..............17
Fesharaki, Fereidun......28
Field, Ted.....................W2
Freyberg, Peter.............19
Fu, Johnson...................20
Gallois, Louis..................3
Gartman, Dennis .......... 22
Gates, Bill ................... W2
Geffen, David..............W2
Gersh, Bob...................W2
Gianopulos, Jim..........W2
Gordon, Lawrence.......W2
Grazer, Brian...............W2
Greene, Graham..........W5
Guangcheng, Chen..........4
Guber, Peter................W2
Hefner, Hugh...............W2
Horbury, Peter..............19
Horn, Alan...................W2
Iovine, Jimmy..............W2
Jacoby, Stefan..............15
Jia, Hu.............................4
Kerkorian, Kirk............W2
King, Augusto...............15
Kiuchi, Takahide ........... 13
Koh, Ethan...................W9
Kotick, Bobby..............W2
Ladd Jr, Alan...............W2
Lasseter, John.............W2
Leong, Heng................W9
Lignos, Elsa...................22
Lynch, William..............18
Malik, Rajeev..................6
Malthus, Thomas........W5
Massad, Tim.................22
Mawston, Neil.........17,28
McCourt, Frank............W2
McGuire, Richard..........23
Meyer, Barry...............W2
Meyer, Ron..................W2
Milchan, Arnon ........... W2
Mohn, Jarl...................W2
Moonves, Les..............W2
Moss, Jerry ................. W2
Murdoch, Rupert.........W2
Otaki, Seiichi .................. 1
Ovitz, Michael.............W2
Page, Jeremy..................4
Parkes, Walter............W2
Perelman, Ron.............W2
Perenchio, Jerry..........W2
Rashall, Charles............14
Redstone, Sumner......W2
Rice, Peter...................W2
Rijk, Gerard...................19
Rosen, Fred.................W2
Rosen, Rick..................W2
Rosenzweig, Joshua.......4
Rothman, Tom ............ W2
Saban, Haim................W2
Sassa, Scott................W2
Schat, Sipko..................20
Schiller, Phil..................14
Schwarzman, StephenW2
Semel, Terry................W2
Shufu, Li ....................... 15
Silver, Joel...................W2
Smith, Adam...............W5
Snider, Stacey.............W2
Spinetta, Jean-Cyril......16
Tak, Kai........................W6
Tisch, Steve ................ W2
Tutor, Ron ................... W2
Weintraub, Jerry.........W2
Xia, Liu............................4
Xiaobo, Liu......................4
Yang Jianhong .............. 16
Zhang, Joyce...................3
Zhaoguo, Wang .............. 4
Corrections Amplifications
Chinese Premier Wen Jiabao said China
would finish five million low-income
apartments in 2012 as part of its socialhousing project. A Tuesday front-page
article about the nation’s economy incorrectly said Mr. Wen put the number at
two million apartments.
BUSINESS & FINANCE
Huawei to Develop Pricier Smartphones
Chinese Company Will Broaden Product Lineup in Push to Expand Global Market Share; Design Team to Grow
HONG KONG—Huawei Technologies Co. is beefing up its design
team, as the Chinese maker of mobile devices and telecommunications
gear aims to raise its profile in the
competitive and fast-growing global
smartphone market.
Shenzhen-based Huawei plans to
introduce a series of midprice to
high-end smartphones later this
year in a bid to capture a bigger
share of the category, said Hagen
Fendler, the company’s chief design
director for handsets.
“We want to be the top three
player within the next five years,
and in order to do that, we have to
broaden out our portfolio,” Mr. Fendler said in a recent interview.
Huawei held a 4% share of the
global smartphone market in the
fourth quarter, making the company
the world’s sixth-largest smartphone
vendor, according to market-research firm Strategy Analytics.
“It is quietly creeping up the
rankings, as it expands distribution
Reuters
BY YUN-HEE KIM
Huawei held 4% of the global smartphone market in the fourth quarter.
and product ranges,” said Neil Mawston, executive director at Strategy
Analytics.
Huawei faces a steep climb. U.S.based Apple Inc. ranked first in the
global smartphone market in the
fourth quarter, with a 23.9% share.
Samsung Electronics Co. of South
Korea and Nokia Corp. of Finland
followed with shares of 23.5% and
12.6%, respectively.
Huawei’s design operations currently employ nearly 300 people at
studios in mainland China, the U.S.,
Japan and Europe. Mr. Fendler said
Huawei will add employees, although the company didn’t elaborate on its specific hiring plans.
A focus on expensive mobile
phones would be a strategic change
for privately owned Huawei,
founded in 1987 by Ren Zhengfei,
who previously served in the People’s Liberation Army of China.
Huawei began as a supplier of
low-cost telecom equipment to carriers. It has branched out into the
devices business, first supplying
data cards and eventually offering
handsets to carriers on an originaldesign-manufacturer basis. And
since last year, Huawei has been
building up its own-brand mobile
devices, including smartphones and
tablet computers, as these markets
take off. Revenue totaled US$15.2
billion in the first half of 2011.
Raising Huawei’s handset profile
might be critical, given that the
company’s equipment business has
faced stumbling blocks. In the U.S.,
the House Intelligence Committee is
investigating whether the expansion
into the U.S. by Huawei and rival
ZTE Corp. is a security threat.
Last month, at the Mobile World
Congress in Barcelona, Huawei unveiled a high-end smartphone called
Ascend D Quad, based on Google
Inc.’s Android operating software.
The phone comes with a 4.5-inch
high-definition touch screen, a
speedier processor and full-HD
video-capturing capability. The
phone is expected to be on the market in the second half of this year,
Mr. Fendler said.
He declined to comment on the
phone’s price or give a more specific
time frame for its release. Typically,
midprice to high-end phones cost
about US$300-US$500. Generally,
low-cost phones are priced between
US$100 and US$200.
Huawei’s foray into the midprice
to high-end smartphone market isn’t
likely to be an easy transition.
Strong Asian competitors—such as
Samsung and LG Electronics Inc. of
South Korea, as well as HTC Corp. of
Taiwan—already have worked for
years building their brands. Huawei
also needs to contend with Apple,
which is seeking to expand in China.
Apple shipped 93 million handsets
world-wide last year, nearly doubling its previous year’s volume, according to Strategy Analytics.
CORPORATE NEWS
E-Book Pricing Prompts U.S. Warning
Apple and Five Major Publishers Face Threat of Lawsuit as Justice Department Examines Possible Collusion
The U.S. Justice Department has
warned Apple Inc. and five of the
biggest U.S. publishers that it plans
to sue them for allegedly colluding
to raise the price of electronic
books, according to people familiar
with the matter.
Several of the parties have held
talks to settle the antitrust case and
head off a potentially damaging
court battle, these people said. If
successful, such a settlement could
have wide-ranging repercussions for
the industry, potentially leading to
cheaper e-books for consumers.
However, not every publisher is in
settlement discussions.
The five publishers facing a potential suit are CBS Corp.’s Simon &
Schuster Inc.; Lagardere SCA’s Hachette Book Group; Pearson PLC’s
Penguin Group (USA); Macmillan, a
unit of Verlagsgruppe Georg von
Holtzbrinck GmbH; and HarperCollins Publishers Inc., a unit of News
Corp., which also owns The Wall
Street Journal.
Representatives for the five publishers and the Justice Department
declined to comment. Apple, which
introduced a new version of its iPad
tablet Wednesday, declined to comment.
The case centers on Apple’s
move to change the way that publishers charged for e-books as it
prepared to introduce its first iPad
in early 2010. Traditionally, publishers sold books to retailers for
roughly half of the recommended
cover price. Under that “wholesale
model,” booksellers were then free
to offer those books to customers
for less than the cover price if they
wished. Most physical books are
sold using this model.
To build its early lead in e-books,
Amazon Inc. sold many new best
sellers at $9.99 to encourage consumers to buy its Kindle electronic
readers. But publishers deeply disliked the strategy, fearing consumers would grow accustomed to inexpensive
e-books
and
limit
publishers’ ability to sell pricier titles.
Publishers also worried that retailers such as Barnes & Noble Inc.
would be unable to compete with
Amazon’s steep discounting, leaving
just one big buyer able to dictate
prices in the industry. In essence,
they feared suffering the same fate
as record companies at Apple’s
hands, when the computer maker’s
Bloomberg News, left; Associated Press
BY THOMAS CATAN
AND JEFFREY A. TRACHTENBERG
Apple persuaded publishers about pricing before then-CEO Steve Jobs unveiled the iPad. Right, Amazon’s Kindle e-reader.
iTunes service became the dominant
player by selling songs for 99 cents.
As Apple prepared to introduce
its first iPad, the late Steve Jobs,
then its chief executive, suggested
moving to an “agency model,” under
which the publishers would set the
price of the book and Apple would
take a 30% cut. Apple also stipulated that publishers couldn’t let rival retailers sell the same book at a
lower price.
“We told the publishers, ‘We’ll
go to the agency model, where you
set the price, and we get our 30%,
and yes, the customer pays a little
more, but that’s what you want anyway,’” Mr. Jobs was quoted as saying by his biographer, Walter Isaacson.
The publishers were then able to
impose the same model across the
industry, Mr. Jobs told Mr. Isaacson.
“They went to Amazon and said,
‘You’re going to sign an agency contract or we’re not going to give you
the books,’ ” Mr. Jobs said.
The Justice Department believes
that Apple and the publishers acted
in concert to raise prices across the
industry, and is prepared to sue
them for violating federal antitrust
laws, the people familiar with the
matter said.
The publishers have denied acting jointly to raise prices. They have
told investigators that the shift to
agency pricing enhanced competition in the industry by allowing
more electronic booksellers to
thrive.
William Lynch, chief executive of
Barnes & Noble, gave a deposition
to the Justice Department in which
he testified that abandoning the
agency pricing model would effectively result in a single player gaining even more market share than it
has today, according to people familiar with the testimony. A spokeswoman for Barnes & Noble declined
to comment.
Prior to agency pricing, Amazon
often sold best-selling digital books
for less than it paid for them, a
marketing stance that some publishers worried would make the emerging digital-books marketplace less
appealing for other potential retailers. The publishers’ argument that
agency pricing increased competition hasn’t persuaded the Justice
Department, a person familiar with
the matter said. Government lawyers have questioned how competition could have increased when
prices went up. Amazon declined to
comment.
It isn’t clear if the talks will lead
to a settlement or how many of the
parties would sign on. One publishing executive familiar with the situation said that the talks have been
going on for some time and “negotiations have taken many turns.”
A second publishing executive
said that “a settlement is being considered for pragmatic reasons but
by no means are we close.” This
person said that there are significant legal costs associated with the
probe. “You have to consider a settlement, whether you think it’s fair
or not,” the person said.
Contracts such as Apple’s prevent publishers from selling books
to other buyers at a cheaper rate.
Such terms, known as “most favored
nation” clauses, have drawn the
scrutiny of the Justice Department
in recent years in the health-care industry because they can sometimes
be used to hamper competition.
One idea floated by publishers to
settle the case is to preserve the
agency model but allow some discounts by booksellers, according to
the people familiar with the matter.
Among the issues that the Justice Department has examined is the
effort by three publishers involved
in the probe to “window” e-books in
late 2009, according to people familiar with the matter. That December, Simon & Schuster, HarperCollins and Hachette said they would
delay the electronic publication of a
certain number of titles for a limited time after the publication of the
hardcover edition.
At the time, the publishers expressed concern that $9.99 digital
best sellers represented a long-term
threat to the future of the publishing business. The windowing efforts,
however, gradually faded away.
The European Union has said it
is also investigating the allegations.
Several class-action lawsuits have
been filed and consolidated in a
New York federal court. Apple
moved to dismiss the case this
month, arguing it didn’t coordinate
with any publishers. “Apple’s entry
created new competition in eBook
distribution and a vastly larger pool
of eBook consumers,” it wrote in its
motion.
For publishers, digital-book revenue is still the fastest-growing segment of the business at a time when
the sale of physical books is in decline. E-book sales more than doubled to $970 million in 2011, according to a survey of 77 publishers
conducted by the Association of
American Publishers.
As more consumers migrate to
dedicated e-readers and tablet reading devices, the number of consumers reading digitally will likely increase.
At the same time, there are
fewer bookstores in which to sell
physical books, highlighted by the
liquidation last year of Borders
Group Inc., once the country’s second-largest book chain. In addition,
the nation’s largest bookstore chain,
Barnes & Noble, has increasingly
dedicated more of its space to nonbook-related items such as its popular line of educational toys and
games.
It isn’t the first time the Justice
Department has taken action against
Apple for allegedly colluding with
other companies. In 2010, several
technology companies agreed to settle Justice Department allegations
that they colluded to hold down
wages by improperly agreeing not
to poach each other’s employees.
The evidence that surfaced in
that case, as well as an ongoing private class-action lawsuit that followed, showed Mr. Jobs as a prime
mover behind that antipoaching
agreement. Apple didn’t admit to
any wrongdoing.
Facebook Beefs Up Its IPO Roster and Credit Line
BY RANDALL SMITH
AND SHAYNDI RAICE
Facebook Inc.’s march toward its
highly anticipated initial public offering of stock is now coming with a
lot more help.
On Wednesday, the social network said in a new disclosure document that it added 25 underwriters
to an original group of six for its
IPO, as the company also boosted its
financial muscles with a new credit
line and bridge loan. In addition, it
offered more information on where
it derives its revenue.
The beefing up comes as Facebook prepares for what is expected
to be the biggest U.S. Web IPO to
date. The Menlo Park, Calif., com-
pany filed to go public in February,
and people familiar with the matter
have said the company hopes to
raise as much as $10 billion at a valuation of as much as $100 billion.
Facebook’s new underwriters include five big banks—Citigroup Inc.,
Credit Suisse Group AG, Deutsche
Bank AG, RBC Capital Markets LLC
and Wells Fargo Securities LLC—as
well as an additional 20 smaller
firms which will help sell the stock.
The additions increase the number
of underwriters to 31, joining existing underwriters such as Morgan
Stanley. By comparison, the largest
previous U.S. IPO, Visa Inc., had 45
underwriters.
Meanwhile, Facebook also doubled the size of its credit line to $5
Facebook added 25
underwriters to an
original group of six for
its initial public offering.
billion and arranged a $3 billion
bridge loan to help cover taxes due
on employee stock grants that take
effect six months after the IPO.
While Facebook has said it may sell
some of the employees’ 93 million
shares to cover the taxes, the bridge
loan could be used in case market
conditions are unfavorable for a
stock sale.
At a $100 billion value for Face-
book, which is where the company’s
shares are currently trading in some
private-market sales, the employee
shares would be worth $3.7 billion.
Facebook said earlier it would withhold taxes at a 45% rate for the
sales. Facebook has also indicated
its chief executive, Mark Zuckerberg, would sell stock in the IPO to
cover taxes on profits from options
on 120 million shares.
The new credit line was led by
J.P. Morgan Chase & Co., with
Morgan Stanley, Goldman Sachs
Group Inc., the Merrill Lynch unit of
Bank of America Corp. and Barclays PLC serving as joint book-runners. The bridge loan was led by J.P.
Morgan and Morgan Stanley.
Facebook, which made $1 billion
in profit amid revenue of $3.71 billion last year, also gave insight into
the geographic breakdown of its
revenue.
The company said in its regulatory filing that over half its revenue—about $1.9 billion—for 2011
was generated by users from the
U.S. and Canada. By comparison, Europe accounted for $1.1 billion in
revenue. About $365 million in revenue came from Asia.
Facebook said that it is experiencing rapid growth in Brazil and
India because the number of users
in those countries is growing, as are
their engagement levels with Facebook. The company also said it is increasing its sales efforts in those
markets.
CORPORATE NEWS
Anheuser Net Rises
On Global Growth
BY SIMON ZEKARIA
LONDON—Anheuser-Busch InBev NV sounded an optimistic tone
as the brewing giant’s profit increased sharply in the latest quarter. But volumes fell as weakness in
Western Europe and North America
offset gains in emerging markets.
Net income for the final three
months of 2011 jumped 91% to $1.85
billion, beating analysts’ consensus
expectations for $1.61 billion. The
year-earlier figure had been hit by a
high tax bill and several one-time
items, including a loss on interestrate swaps.
Revenue for the fourth quarter
increased 4.2% to $9.87 billion.
However, the volume of beer sold
fell 0.6%, with North American volume sales down 4.5%.
The company is compensating
for stagnating volumes, rising commodity costs and a spending slowdown across mature economies by
paring costs and raising prices in
key beer-drinking markets, such as
the U.S. and Brazil, to boost margins.
The maker of Budweiser, Stella
Artois and Beck’s is benefiting from
growing demand for premium beer
in Latin America and Asia, where
rising incomes are driving consumption. But exposure to the U.S., where
high unemployment has hit beerdrinking, remains a concern.
Still, Anheuser said Thursday
that U.S. beer volumes in the first
two months have been “encouraging,” boosted by favorable weather,
early signs of a recovery in consumer confidence and better-thanexpected results from the rollout of
Bud Light Platinum.
Chief Financial Officer Felipe
Dutra said the company is “very
bullish” on trading in Brazil, as it
eyes the soccer World Cup in 2014
and the Olympic Games in 2016. Volumes there will resume growth in
2012 after stagnating this year,
helped by a 7.5% increase in the
minimum wage, he said.
The company proposed a fullyear dividend of €1.20 a share, up
from 80 European cents. Mr. Dutra
said the company targets growing
dividend payouts in future.
Xstrata Buys Coal Deposit
In Canada for $500 Million
BY ALEX MACDONALD
AND BENOIT FAUCON
LONDON—A unit of Swiss mining
giant Xstrata PLC said Thursday it
had agreed to acquire a Canadian
coal deposit from Talisman Energy
Inc. for $500 million in cash.
The acquisition comes as Xstrata
is in the midst of a merger with
commodities-trading company Glencore International PLC to create
the world’s fourth-largest diversified-mining company, with a market
capitalization of about $90 billion.
The deposit, called Sukunka, is
located in the Peace River coal field
in British Columbia. It is contiguous
with other properties Xstrata Coal
acquired in the province last year.
There has been a surge in demand for hard coking coal as China,
the world’s largest steel producer,
became a net importer of the steelmaking raw ingredient and as other
emerging economies rapidly industrialize and urban populations swell.
Miners have scurried to secure
more of the high-quality coal in different parts of the world. Last year
Rio Tinto PLC acquired Mozambique-focused coking-coal company
Riversdale for about $4 billion,
while Anglo American PLC decided
to retain rather than sell its Peace
River Coal Ltd. venture.
Sukunka has coal resources of
236 million tons.
“Based on our due diligence and
technical analysis, Sukunka has the
potential to be a high quality metallurgical coal mine,” Xstrata Coal
Chief Executive Peter Freyberg said
in a statement. “Once developed,
Sukunka would meaningfully increase our exposure to hard coking
coal, while unlocking synergies with
our neighboring assets in the Peace
River coal field and providing additional regional scale.”
Geely, Volvo Discuss Sharing
Continued from page 15
engines and safety technologies, two
of the people said.
For Geely, a maker of low-cost
cars, the possibility of using technology from an advanced Western
car maker gives it hope to better
compete in China, where foreign
brands are popular. Mr. Li, who is
also chairman of Volvo, “wants to be
aggressive,” one of the knowledgeable people said. “He wants to see
progress.”
Another one of the people familiar with the matter said the two
companies are “ready to push
ahead” with technology-sharing,
though it isn’t clear exactly what
they will be sharing yet. “That still
needs to be worked out,” the person
said.
The deal to jointly develop new
technologies could benefit Volvo by
spreading the cost of developing key
future technologies for electric vehicles and fuel-efficient small engines.
Those new technologies the two
companies might develop jointly include primary electric-vehicle components, small engines and smallcar underpinnings.
Still, a perception of Volvo cars
carrying the same technologies and
components Geely cars use would
hurt Volvo’s brand image, especially
in more advanced markets such as
Europe and the U.S.
“Some technologies may be too
old for a luxury car maker, but they
could still be very good for a mainstream car maker,” said one person
close to the matter. “In other words,
there are many possibilities for
technology sharing for Volvo and
Geely, but we need to make sure
both parties get benefits.”
Geely is likely to appoint Peter
Horbury, a former Volvo design
chief whom Geely last year shifted
from its Volvo arm to work in China,
as chief of the new brand, a person
familiar with the matter said.
MARKETS
Beijing Aims to Step Back on IPO Role
Regulator Wants Disclosure to Play Bigger Part in Determining Which Deals Go Ahead; Doubts in the Market
HONG KONG—Individual investors who buy most Chinese initial
public offerings have become used
to the idea that prices jump on the
first day of trading, but as markets
have weakened in recent months
that is true less often.
As a result, China’s securities
regulator, whom investors have
come to count on to approve highquality deals, has become a target of
frustration. In response, the China
Securities Regulatory Commission is
pushing for a more market-based
system, in which it takes a back seat
and companies disclose essential information so investors can judge
deals for themselves.
But China isn’t ready, according
to bankers and lawyers active in the
market. Moving to a disclosurebased system will take years, said
Fang Fang, vice chairman of Asia investment banking and chief executive of China investment banking at
J.P. Morgan Chase & Co.
China’s “system is an ecosystem
that consists of several key parts—
the issuer, the investor, the regulator, the intermediary and the overriding legal system,” said Mr. Fang.
“You cannot move one part without
moving the others.”
In recent interviews with staterun media, commission Chairman
Guo Shuqing, who has set cleaning
up the mispricing of IPOs as a goal,
has said the “key is to ensure full,
comprehensive and accurate information disclosure from enterprises.”
The intention is that requiring a
Bloomberg News
BY PRUDENCE HO
AND NISHA GOPALAN
Guo Shuqing, above, chairman of the China Securities Regulatory Commission, has targeted the mispricing of IPOs.
higher level of disclosure, as the
U.S. system does, would force the
parties involved in a company’s listing, including underwriters, lawyers
and auditors, to take more responsibility for the quality of deals.
Small changes to boost transparency have been made, but the goal,
according to people familiar with
the process, is for the commission
to rely more on vetting by other
parties. That could lead to a reduction in the backlog of IPOs.
The regulator recently released
for the first time a list of companies
that have applied for IPOs. More
than 500 are on the list, including
some that have been waiting more
than three years for approval.
Some market participants warn
that a disclosure-based system with
no implicit commission guarantee of
a company’s quality will discourage
institutional investors from participating in the IPO market. The market is prone, as CLSA noted in a
February report, to “gambling on
IPO stocks.”
Moreover, a system based solely
on disclosure depends on legal rem-
LEGAL NOTICES
BANKRUPTCIES
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edies to ensure the system’s integrity. In the U.S., shareholders can
band together and launch a class-action lawsuit. Such suits are far more
difficult in China.
“Without active civil litigation, a
heavier burden falls on the securities regulator not only to enforce
disclosure laws postlisting, but also
to screen out unsuitable listing candidates before they list,” said Steven
Winegar, corporate partner at international law firm Paul Hastings in
Hong Kong.
If the commission moves toward
a disclosure-based system, banks
that underwrite deals will likely
bear increasing responsibility for
ensuring the companies they bring
to market provide the information
investors need to make decisions.
“It is a system that will add more
responsibilities for sponsoring
banks,” said Mr. Fang.
Under the current system, individuals designated as sponsors
within investment banks act as
gatekeepers for IPOs. These individuals, rather than the banks, risk losing their licenses to sponsor deals,
as well as public censure, if there is
a misstatement in the IPO prospectus.
“With investors who tend to be
less well-informed, we cannot rely
on listed companies alone for timely
and accurate disclosure,” said
Ronald Wan, head of investment
banking at China Merchants Securities. “We need active involvement
from the regulator.”
Given the “multiyear evolution”
that is required of China’s IPO system and the dominance of individual
investors, J.P. Morgan’s Mr. Fang
said that a good model for China is
Hong Kong’s Securities & Futures
Commission and the Hong Kong
Stock Exchange’s shared role as
gatekeepers and watchdogs.
Backlogs to list are much shorter
than in China because most of the
due diligence already is done by
bankers ahead of an application, and
the exchange vets companies without regard for economic, market and
political considerations.
—Amy Li and Dinny McMahon
Rabobank Targets
China Agribusiness
BY LINGLING WEI
AND DINNY MCMAHON
BEIJING—Rabobank Groep NV,
known as a bank for farmers, plans
to expand lending—both in the yuan
and in foreign currencies—to
China’s food producers and processors, making it the latest foreign
lender to embrace the country’s vast
agricultural sector.
The Netherlands-based bank will
focus on providing financing to Chinese food and agricultural companies to make purchases or acquisitions abroad, said Sipko Schat, a
member of Rabobank’s executive
board and chairman of its international wholesale division, ahead of
the Friday opening of the bank’s
first branch in Beijing. Rabobank already has a branch in Shanghai, its
first in China.
Mr. Schat said the bank intends
to make loans both in the Chinese
and foreign currencies.
“It’s our expectation that the use
of the yuan will increase in global
trade and investment over time,”
Mr. Schat said in an interview on
Thursday.
Rabobank’s planned expansion in
China’s food and agricultural markets comes as foreign banks—including HSBC Holdings PLC, Citigroup Inc., Standard Chartered
PLC, and the Australia & New
Zealand Banking Group Ltd.— have
flocked to China to set up rural operations, aiming to capitalize on
Beijing’s drive to boost incomes in
the countryside.
Chinese regulators also have
made the rural-banking sector one
of the few areas in the country’s financial-services industry open to
foreign competition. They have been
encouraging foreign banks to invest
in rural and agricultural finance as
part of an effort to channel credit to
the sectors that have been poorly
served by China’s state-owned
banks.
“It’s a heavily regulated market,
but it is opening up,” Mr. Schat said,
referring to China’s banking sector.
But unlike some of its foreign rivals, Rabobank doesn’t plan to set
up banks in China’s rural areas to
provide financing to individual
farmers, Mr. Schat said. Rather, it
will focus on lending to food- and
agriculture-related
businesses
through its branches in Beijing and
Shanghai.
With branches in a broad range
of countries, Rabobank has become
a major lender for the food and agricultural sectors in the past decades.
Currently, profits generated in
Asia represent 10% of the bank’s
wholesale banking income. Rabobank executives plan to bump up
that level to 25% in the next five
years.
“We certainly hope China will be
a big part” of the increase, said
Johnson Fu, head of China for Rabobank, in the same interview.
* *
MARKETS
Shenzhen Tightens Curbs on New Issues
SHANGHAI—The Shenzhen Stock
Exchange temporarily suspended
trading in two companies as rules
intended to rein in speculation on
newly listed shares took effect.
Trading in Shenyang Blue Silver
Industry Automatic Equipment Co.
and Jiangxi Boya Bio-Pharmaceutical Co. was halted on the Growth
Enterprise Market for smaller companies after more than 50% of their
shares changed hands, violating one
of the rules introduced Thursday.
The measures, designed to protect smaller investors, also require a
trading halt if a newly listed company’s shares rise or fall more than
10% from the opening price.
In either situation, trading of the
stock can be halted until three minutes before the market closes.
Speculative trading “has distorted the pricing mechanism, aided
illegal behavior and damaged the
fundamental interests of investors,”
the exchange said on its website.
The exchange noted that speculative activity involving new stock
offers has been on the rise, with
eight new issues since mid-February
seeing average gains of 63% on their
first trading day in the Shenzhen
and Shanghai markets.
Such speculation has also led to
steep falls in prices after the initial
day of trading.
’It’s a reasonable rule in
a crazy market,’ says
Li Bin, an analyst with
Guolian Securities.
The exchange said that 34 stocks
had risen more than 100% on their
debuts in Shenzhen since the start
of 2010 to end-February, and 33 had
later fallen an average of 23%.
Stocks in China may not rise or
fall more than 10% in daily trading,
but until now the curbs on prices on
a stock’s first day of trading had
been fairly loose.
In the past, Shenzhen stocks
were suspended from trading for 30
Banks’ Revamps Plod Along
sales…Maybe the market’s expectations [of a huge volume of deals]
were too high.”
Prospective investors, many of
which are from the U.S., include private-equity firms, hedge funds, sovereign-wealth funds, insurance companies and even some banks,
according to bankers and investors.
Some would-be asset-buyers say
they are hopeful that the recent
trickle of transactions will soon intensify.
David Rubenstein, the founder
and managing director of privateequity firm Carlyle Group, told an
industry conference in Berlin last
week that Europe was the “single
best opportunity in the world at the
moment” for buyout firms. But he
said it will take time for prices to
come down as banks off-load assets
to meet capital requirements.
“Many [assets] were overpriced,
making returns more difficult,” Mr.
Rubenstein said. “Going forward, in-
vestment opportunities will be better.”
Thus far, the recent activity has
been mostly clustered around a relatively small group of banks, such as
BNP, that have been hustling to
drum up capital. Last month, it
agreed to sell its North American
energy-lending business, composed
of $9.5 billion in loans, to Wells
Fargo & Co. And on Thursday, it announced the sale of a 29% stake in
Klepierre SA to Simon Property
Group, generating a €1.5 billion capital gain.
Spain, where a bursting property
bubble has wounded a broad swath
of the banking industry, has been
the busiest location for asset sales
and other transactions. In Wednesday’s transaction, BBVA agreed to
buy Unnim for the symbolic sum of
€1, and the government is largely
protecting BBVA from any losses on
Unnim’s assets.
—Marietta Cauchi
West Tastes Dim Sum Debt
frastructure in London to stimulate
the circulation of yuan in the city.
HSBC Holdings PLC and Royal
Bank of Scotland Group PLC, which
are among the banks taking yuan
deposits, have recently set up teams
dedicated to developing offshore
yuan services and can now issue
dim sum bonds in London.
The buildup has political backing. Britain and Hong Kong set up a
forum this year to discuss working
more closely in yuan trade clearing
and settlement. Hong Kong is also
extending the operating hours of its
yuan payments systems, making it
easier for yuan transactions to be
settled in London.
HSBC recently listed the first
yuan debt deals in London for Japan’s Mitsui & Co. and BP PLC in
London, although the bulk of the
deals were still placed in Hong
Kong, according to Dealogic.
“Could we issue a dim sum bond
in London or not? Technically yes.
There should also be sufficient de-
mand to absorb the whole of a 300
million to 500 million [yuan] bond
for the right name,” said Justin
Chan, HSBC’s deputy head of global
markets, Asia Pacific, and head of
Hong Kong trading.
Some bankers are concerned that
even if bonds are issued in London,
trading in the secondary market
would gradually seep back into the
hands of Asian investors more familiar with Chinese companies.
Also, since Beijing loosened its tight
grip on its currency more than two
years ago, investors’ confidence that
the yuan will appreciate has cooled.
But others argue that with growing awareness of dim sum bonds
and London-based deal teams, the
market will grow.
“If a bond is issued in London,
then we can assume that the majority will be distributed to European
investors and will create a critical
mass of trading in London’s time
zone,” said HSBC’s Mr. Chan.
—Fiona Law and Lingling Wei
minutes if they rose or fell by more
than 20% from their opening price,
with a further 30-minute suspension
if the price change exceeded 50%
once trading resumed. Shares would
be suspended until three minutes
before the market closed if they
rose or fell more than 80%.
Guo Shuqing, who took over as
China’s top stock regulator in October, has been pushing for tighter
controls on prices for initial public
offers, hoping to make trade less
speculative and more suitable for
long-term investment.
The Shenzhen exchange also said
that if 50% or more of a company’s
shares change hands in preopen
trading, the stock will be suspended
three minutes after the opening.
Although the new rules could restrict trading of a newly listed company, analysts are generally positive.
“It’s a reasonable rule in a crazy
market. If a stock has potential to
rise, it can rise on its second or
third day of trading,” said Li Bin, an
analyst with Guolian Securities.
—Wynne Wang
Bloomberg News
Trading in Two Companies Halted as Volume Restriction Kicks In; Move Aims to Mitigate Pops and Drops
The Shenzhen Stock Exchange, shown in 2010, is ramping up efforts to curb
speculative trading in new stock issues.
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MARKETS
U.S., European Shares Continue Gains
BY CHRIS DIETERICH
day, with materials and health-care
stocks leading the advance. Alcoa,
up 1.8%, and J.P. Morgan Chase, up
1.5%, notched the Dow’s biggest
gains on a percentage basis. Shares
of McDonald’s weighed on blue
chips after it reported that global
same-store sales grew 7.5% in February, just below expectations. U.S.
same-store sales exceeded forecasts,
but sales in Europe were less than
expected. McDonald’s fell 3%.
In U.S. economic data, the number of workers filing for new unemployment benefits rose 8,000 to a
seasonally adjusted 362,000 last
week, more than forecasts for a rise
of 2,000. Also, outplacement firm
Challenger, Gray & Christmas said
planned layoffs announced by U.S.
employers fell 3.3% in February.
Thursday’s news from the labor
market precedes Friday’s closely
watched monthly employment re-
NEW YORK—U.S. stocks rose despite mixed news about employment, as optimism increased that
Greece will complete a debt-swap
deal.
The Dow Jones Industrial Average was up 54 points, or 0.4%, to
12891 in midday
ABREAST OF trading. The StanTHE MARKET dard & Poor’s 500stock index advanced 11 points, or 0.8%, to 1363
and the Nasdaq Composite tacked
on 28 points, or 1%, to 2964.
The Dow rose 78.18 points on
Wednesday to snap a three-session
losing streak, posting the largest
point and percentage gain in nearly
three weeks on the heels of Tuesday’s decline of more than 200
points.
All sectors traded higher Thurs-
port. Economists are forecasting the
unemployment rate will hold steady
at 8.3% for February and that the
economy added 213,000 jobs.
“People are expecting a decent
jobs number, and for Greece’s bond
swap to be successful, so we’re getting a second day of a recovery after
Tuesday’s correction,” said Peter
Tuz, president of Chase Investment
Counsel, an independent money
manager in Charlottesville, Va.
Crude futures gained 0.6% to
$106.73 a barrel, while gold futures
tacked on 0.7% to $1,695.70 a troy
ounce. The U.S. dollar was mixed,
losing ground against the euro but
rising against the yen. The yield on
the 10-year Treasury rose to 2.019%.
In corporate news, the U.S. Treasury said it was launching a sale of
up to $6 billion of American International Group’s common stock.
The stock was down 3.1% in late
morning trading.
Amylin Pharmaceuticals indicated it was offering 13 million
shares of common stock for sale to
the public. The biopharmaceutical
company’s stock lost 1%.
Williams-Sonoma reported fiscal fourth-quarter earnings and revenue that were slightly above expectations. The high-end homefurnishing retailer also said its chief
financial officer, Sharon McCollam,
plans to retire on March 16, and
named its current treasurer and
controller, Julie Whalen, as acting
finance chief. Its shares fell 6.2%.
Apple was warned by the U.S.
Justice Department that the company and five of the largest U.S.
publishers may be sued for allegedly
colluding to raise prices of electronic books. Apple’s stock edged up
1.2%; the company unveiled its latest iPad tablet on Wednesday.
European Stocks
European markets were higher,
buoyed by the belief that the participation rate of private-sector creditors in the Greek debt-swap will be
high enough for Greece to receive
another round of bailout funds.
The Stoxx Europe 600 index
closed 1.6% higher at 264.16.
One sign of investor confidence
was the yield on 10-year Italian government bonds, which fell to the
lowest level since last June. Spanish
yields also fell sharply.
Separately, the European Central
Bank and Bank of England left key
lending rates unchanged, as was
widely expected.
Anheuser-Busch InBev ended up
3.6% after releasing upbeat results.
Carrefour finished 0.5% higher. The
retailer said it will reduce its costs
in 2012 following a decrease in 2011
net profit.
U.S. Treasury Reduces Stake
In AIG, Selling Stock at $29
Optimism Over Debt Deal
In Greece Boosts Crude Oil
BY ERIK HOLM
AND SERENA NG
NEW YORK—Crude-oil prices
gained on optimism that the Greek
debt-swap deal will be approved,
keeping a bailout plan on track.
Major Greek and European banks
have signaled support of the plan,
smoothing its approval. The euro
was buoyed by the developments on
Thursday, rising against the dollar.
The lower greenback, in turn,
sparked bargain-buying in oil futures by investors using other currencies.
Gains in the European benchmark, North Sea Brent crude, were
larger than those registered in the
U.S. benchmark crude amid signs
that physical supplies of North Sea
crude will be tighter in April than in
March.
Meanwhile, Asian buyers are
showing stepped-up interest in
North Sea barrels, underpinning
prices, as the U.S.-led push for sanctions on Iran has some buyers limit-
AIG agreed to buy back 103.5 million of the 206.9 million shares the U.S.
Treasury sold. The sale reduces the government’s stake to about 70%.
ing purchases from that nation,
which is the second-biggest oil producer in the Organization of Petroleum Exporting Countries.
“We are getting closer to a deal
in Greece and the euro is climbing,
so we are looking at an up day today,” said Tom Bentz, director at
BNP Paribas Prime Brokerage.
Light, sweet crude oil for April
delivery on the New York Mercantile
Exchange was up 67 cents, at
$106.83 a barrel. ICE North Sea
Brent crude for April was $1.01
higher, at $125.14 a barrel. The
spread between the two benchmarks
hit its widest level in a month.
Rising prices, which have hit
highs each month since October, are
steering a sharp drop in gasoline
use. U.S. data released Wednesday
showed demand in the last four
weeks posted a 7.8% decline from
the same period last year.
That is the biggest year-on-year
decline in any four-week period
since 1991.
Japanese Current Account
Puts Yen Under Pressure
Bloomberg News (top); Agence France-Presse/Getty Images
The U.S. Treasury Department
sold a chunk of its shares in American International Group Inc. for
$29 each Thursday morning, further
reducing the government’s holding
in the insurer more than three years
after it was rescued during the financial crisis.
The sale of 206.9 million shares
is expected to bring the Treasury
about $6 billion. AIG, which has
bounced back from the brink of collapse and expects steady profits in
coming years, has agreed to purchase 103.5 million shares worth
about $3 billion. That buyback could
help prevent the Treasury’s sale
from weighing on AIG’s share price.
But shares were trading lower
late Thursday morning, down 3.1%
at $28.54. Shares had climbed 40
cents on Wednesday to $29.45 in
New York Stock Exchange composite
trading, a gain of 54% from the 52week low last October.
The U.S. had been wanting to sell
off more of its holdings in late 2011,
but the sale was delayed when the
shares fell in the second half of 2011
and traded below $28.73, the price
taxpayers effectively paid for the
government’s stake. AIG’s rescue in
2008 was part of the government’s
Troubled Assed Relief Program.
“We’re continuing to move forward to wind down TARP and exit
our stakes in private companies as
soon as practicable,” said assistant
Treasury Secretary for financial stability Tim Massad. “Today is another important step in our efforts
to recover the taxpayer’s investment
in AIG.”
The sale should reduce the Treasury’s common stake from 77% to
about 70%. The U.S. last sold AIG
shares in May 2011 at $29 apiece.
AIG shares have climbed 27%
this year. Last month, the company
reported fourth-quarter earnings
that included a large tax benefit, reflecting expectations the company
will generate billions of dollars in
profits in the coming years.
AIG will also fully repay the government’s remaining $8.5 billion
preferred interest in another bailout-era vehicle that was collateralized by AIG’s minority portion of
Asian life insurer AIA Group Ltd.
BY DAVID BIRD
BY JESSICA MEAD
and other assets. The majority of
the funds AIG will use in the transaction will come from the sale of a
portion of its stake in AIA scheduled
to close Thursday.
The U.S. government bailed out
AIG in 2008 with a record bailout
that required up to $182.3 billion in
taxpayer support. A chunk of the
money has been repaid, and the
Treasury needs to recoup $41.8 billion from selling its majority stake
in AIG.
“The people of AIG have
achieved another significant milestone in our progress toward our
goal that American taxpayers re-
coup their entire investment in AIG
at a profit,” AIG Chief Executive
Robert Benmosche said Wednesday.
The Treasury appointed units of
Citigroup Inc., Credit Suisse Group
AG and Morgan Stanley to jointly
coordinate the offering.
The last offering in May, which
didn’t go as well as AIG and Treasury officials had hoped, was led by
Bank of America Corp., Deutsche
Bank AG, Goldman Sachs Group
Inc. and J.P. Morgan Chase & Co. In
the months following that sale, Mr.
Benmosche said there would likely
be changes to the lineup of top underwriters.
The euro firmed against the yen
and dollar Thursday, as currency
traders grew more confident about
a successful Greek debt-swap.
The yen came under pressure after Japan posted a record currentaccount deficit in January amid
flagging
exports
CURRENCY
and soaring energy
MARKETS
imports.
“In its race to
destroy its nuclear-power generation programs,” the Japanese government “is putting itself in very
real jeopardy as it has no choice but
to import more and more energy
from abroad in relentless fashion,”
said Dennis Gartman in his daily investment letter.
The euro extended gains as European Central Bank President Mario
Draghi pointed to progress in the
euro zone’s economy and financial
markets, relieving some worries
that the region’s sovereign-debt crisis may spread further.
In midday trading in New York,
the euro was at $1.363, up from
$1.3149 late Wednesday in New
York. The dollar was at ¥81.53, compared with ¥81.09, while the euro
was at ¥108.20 from ¥106.62. Meanwhile, the pound was trading at
$1.5820 from $1.5742, and the dollar
was buying 0.9089 Swiss franc from
0.9166 franc.
The ICE dollar index, which measures the greenback against a basket of six currencies, fell to 79.193,
from 79.692.
“As we move closer to the final
Greek deadline, markets are—
rightly—optimistic that we will
avoid the worst-case scenario where
Greece doesn’t even meet the
threshold for introducing collective
action clauses,” said Elsa Lignos, senior currency strategist at RBC Capital Markets in London.
A much stronger-than-expected
German industrial-production figure
for January also boosted the common currency.
The pound was unmoved after
the Bank of England chose to keep
the key interest rate at 0.5% and the
central bank’s asset-purchase target
at £325 billion ($512 billion).
INTERNATIONAL INVESTOR
Greek Hopes, Data
Lift Asian Markets
Treasurys
Decline on
Optimism
BY VIRGINIA HARRISON
AND V. PHANI KUMAR
BY CYNTHIA LIN
NEW YORK—U.S. Treasury prices
declined Thursday even though the
U.S. reported a third-straight weekly
rise in the number of workers filing
for jobless benefits.
Investors were awaiting the results of Greece’s debt-swap offer, expected early Friday in London.
“Markets are
U.S. CREDIT
trading with a
MARKETS
glass-half-full
view about the
Greece restructuring,” said Richard
McGuire, senior fixed-income strategist at Rabobank. “Signs are positive that Greece will have sufficient
participants, at least enough for it
to employ the collective-action
clauses so it can strong-arm the remaining holdouts.” As of late
Wednesday, owners of a bit more
than half of the eligible Greek debt
had pledged to take part in the deal.
In midday trading, benchmark
10-year Treasury notes were down
11/32 in price to yield 2.018%, climbing above the 2% mark that has become a tipping point between selling and buying in the market.
Uncertainty about Friday’s U.S.
jobs report is keeping investors hesitant about placing bold bets.
Asian stock markets ended
higher Thursday, with Tokyo, Shanghai and Hong Kong snapping threeday losing streaks as optimism grew
about Greece’s debt restructuring
and strong U.S. economic data supported regional exporters and resource shares.
“It’s looking more than likely that
the Greek debt deal will go through,
which is reducing
ASIA-PACIFIC some concerns in
STOCKS
the market right
across a region,”
said Peter Esho, chief market analyst
at City Index in Sydney. “Stocks that
were sold off yesterday are rebounding as [Asia joins] a global bounce.”
Japan’s Nikkei Stock Average
jumped 2% to 9768.96, Hong Kong’s
Hang Seng Index rose 1.3% to
20900.73 and China’s Shanghai
Composite Index climbed 1.1% to
2420.28, all three rising for the first
time this week. Also snapping this
week’s string of losses, South Korea’s Kospi added 0.9% to 2000.76,
Australia’s S&P/ASX 200 gained 0.7%
to 4171.00 and Taiwan’s Taiex advanced 1% to 7984.56. Indian markets were closed for a holiday.
The rally came after gains on
Data as shown is for information purposes only. No offer is being made by
Morningstar, Ltd. or this publication. Funds shown aren’t registered with the
U.S. Securities and Exchange Commission and aren’t available for sale to United
States citizens and/or residents except as noted. Prices are in local currencies.
All performance figures are calculated using the most recent prices available.
FUND NAME
NAV
GF AT LB DATE CR
NAV
FUND NAME
NAV
GF AT LB DATE CR
Prosperity Return Fund C
Prosperity Return Fund D
Renaissance Hgh Grade Bd A
Renaissance Hgh Grade Bd B
Renaissance Hgh Grade Bd C
Renaissance Hgh Grade Bd D
OT
OT
JP
JP
JP
JP
OT
OT
BD
BD
BD
BD
LUX
LUX
LUX
LUX
LUX
LUX
03/05
03/05
03/05
03/05
03/05
03/05
USD
EUR
JPY
JPY
USD
EUR
Europe Long/Short Equity
These funds primarily take long/short positions in European equities. At least 60% of assets are invested
in Developed Greater Europe equities. Ranked on % total return (dividends reinvested) in U.S. dollars for
one year ending March 08, 2012
Wall Street Wednesday, following
upbeat jobs data and a report pointing to the possibility the Federal Reserve could take more steps to
boost the economy if needed. Signs
of progress on Greek’s debt-swap
deal also aided confidence that Athens will secure the required support
by Thursday’s deadline.
Exporters and companies with
global business interests benefited.
Toyota Motor climbed 2.6% and
Nikon jumped 4.3% in Tokyo. Fast
Retailing, a heavyweight constituent in the Nikkei, gained 3.6%.
Elsewhere, LG Electronics added
3.9% and Kia Motors advanced 2.1%
in Seoul, Foxconn International
Holdings jumped 5.2% in Hong
Kong, and Hon Hai Precision Industry climbed 2.2% in Taipei.
Resource firms recovered some
of their recent losses, as commodity
prices strengthened. Jiangxi Copper rose 1.7% in Hong Kong and 1.9%
in Shanghai, while in Sydney,
Fortescue Metals Group rose 3.8%.
Among energy plays, Woodside
Petroleum gained 1.9% in Sydney,
Inpex rose 1.6% in Tokyo and Cnooc
climbed 1.1% in Hong Kong.
Financials also rebounded. Nomura Holdings rose 4.7% and Mitsubishi UFJ Financial Group added
2.7% in Tokyo, and Chinatrust Fi-
INTERNATIONAL INVESTMENT FUNDS
Advertisement
Fund Scorecard
NAV
90.62
124.75
10024.60
8602.11
94.34
104.82
-5.3
13.8
-1.0
-5.1
-4.0
0.5
FUND FUND
RATING * NAME
5
5
4
5
3
4
NS
3
3
NS
-0.4
13.6
1.0
-3.0
2.0
3.7
TradeWind
TradeWind Capital
EURNLD
Equity Fund
Melchior
Dalton Strategic
USDCYM
European Fund USD Partnership LLP
Nordic
Nordic Fund
SEKIRL
Absolute Return Fund Management Ltd
Abaco
PCE Investors
USDCYM
Financials Fund – USD
Adapto
Adapto Advisors AB
SEKLUX
Nordic A
Sierra
Sierra Global
USDVGB
Europe Offshore - Euro B Management LLC
Eclectica
Eclectica Asset
EURCYM
Fund C EUR
Management LLP
Rhine Alpha
RBR Capital AG
EURCYM
Class C EUR
Marshall
Marshall Wace
EURIRL
Wace–MWEurekaFund-A2EUR Asset Management Ltd
Mercer UK
Mercer Global
GBPIRL
Credit Fund M-5£ Investments Management Ltd
NOTE: Changes in currency rates will affect performance and rankings.
KEY: ** 2YR and 5YR performance is annualized
NA-not available due to incomplete data;
NS-fund not in existence for entire period
nancial Holding climbed 2.4% in
Taipei.
Ping An Insurance (Group) Co.
of China jumped 5.1%, Agricultural
FUND NAME
NAV
GF AT LB DATE CR
Russia Equity AA
Taiwan Equity AA
Turkey Equity AA
U.S. Bond AA
U.S. Sm Cap Equity AA
U.S. Special Opportunities
U.S. Tsy Inf-ProtSec AA
EE EQ LUX 03/07 USD
AS EQ LUX 03/07 USD
OT OT LUX 03/07 USD
US BD LUX 03/07 USD
US EQ LUX 03/07 USD
US BD LUX 03/07 USD
OT OT LUX 03/07 USD
NAV
—%RETURN—
YTD 12-MO 2-YR
0.70
1.28
0.80
1.22
0.92
0.83
1.34
20.8
15.6
20.5
2.7
13.6
13.5
0.9
-21.9
2.0
-8.2
6.8
-15.8
-12.9
12.6
1.3
13.2
4.7
7.3
1.4
1.5
9.2
Indonesian Grth Fund
GL
EQ BMU 02/29 USD
189.45
5.3
12.4
GL
EQ LUX 07/29 EUR
46.59
-8.9
-8.2
-2.7
n ALLIANZ GLOBAL INVESTORS KAPITALANLAGEGESELLSCHAFT
Concentra AE
Industria AE
InternRent AE
EU EQ DEU 03/07 EUR
EU EQ DEU 03/07 EUR
EU BD DEU 03/07 EUR
61.98
73.24
42.92
14.6
8.6
-1.1
-2.5
-2.5
12.8
10.4
1.8
8.5
n CHARTERED ASSET MANAGEMENT PTE LTD - TEL NO: 65-6835-8866
Fax No: 65-6835 8865, Website: www.cam.com.sg, Email: [email protected]
CAM-GTF Limited
OT
OT MUS 02/29 USD 368607.01
20.0
-3.8
12.4
10.5
17.3
-1.5
-6.6
-1.1
-5.4
n HSBC Trinkaus Investment Managers SA
E-Mail: [email protected]
Telephone: 352 - 47 18471
Prosperity Return Fund A
Prosperity Return Fund B
Advertisement
FUND NAME
JP BD LUX 03/05 JPY
OT OT LUX 03/05 JPY
9603.33
8193.72
American Growth
American Growth AA
Asian Equity
Asian Equity AA
Asian Sm Cap Equity AA
China Value A
China Value AA
Dragon Growth
Dragon Growth AA
Emerging Mkt Infrastructure
Emg Eastrn Europe A
Emg Eastrn Europe AA
European Growth
European Growth AA
Global Contrarain AA
Global Property AA
Global Resources AA
Healthcare AA
India Equity AA
International Growth
International Growth AA
Japanese Growth
Japanese Growth AA
Latin America Equity AA
Manulife GF Strategic Income Fund AA
Manulife Glbl Fund Asia Total Return AA
MGF Asia Value Dividend Equity Fund
US EQ LUX
US EQ LUX
OT OT LUX
OT OT LUX
OT OT LUX
AS EQ LUX
AS EQ LUX
AS EQ LUX
AS EQ LUX
OT OT LUX
EU EQ LUX
EU EQ LUX
EU EQ LUX
EU EQ LUX
GL EQ LUX
OT EQ LUX
GL EQ LUX
OT EQ LUX
EA EQ LUX
GL EQ LUX
GL EQ LUX
JP EQ LUX
JP EQ LUX
GL EQ LUX
OT OT LUX
AS BD LUX
OT OT LUX
03/07 USD
03/07 USD
03/07 USD
03/07 USD
03/07 USD
03/07 USD
03/07 USD
03/07 USD
03/07 HKD
03/07 USD
03/07 USD
03/07 USD
03/07 USD
03/07 USD
03/07 USD
03/07 USD
03/07 USD
03/07 USD
03/07 USD
03/07 USD
03/07 USD
03/07 USD
03/07 USD
03/07 USD
03/07 USD
03/07 USD
03/07 USD
18.62
1.07
2.57
0.83
1.53
7.25
2.27
1.50
7.30
0.97
4.69
2.01
8.56
0.61
0.94
0.79
1.11
1.08
0.99
3.27
0.76
2.64
0.68
1.27
1.12
0.98
1.26
6.7
6.7
10.1
10.0
13.2
11.3
11.2
12.5
12.4
NS
21.5
21.4
11.3
11.2
19.1
12.1
3.3
6.7
17.4
7.6
7.5
4.8
4.7
13.0
3.3
4.5
10.8
2.1
1.8
-10.2
-10.4
-1.4
-11.8
-12.1
-15.2
-15.8
NS
-17.1
-17.1
-16.8
-17.0
-20.3
-3.0
-18.1
1.1
-14.7
-4.3
-4.5
-16.0
-16.3
-10.1
4.1
NS
-6.8
10.6
10.3
4.6
4.3
15.0
4.0
3.7
-1.7
-2.1
NS
0.8
0.7
0.0
-0.2
1.2
9.1
2.1
4.7
-4.4
4.0
3.8
-3.0
-4.1
1.2
7.7
NS
6.3
[ALTERNATIVE INVESTMENT FUNDS www.WSJ.com] Advertisement
NAV
GF AT LB DATE CR
NAV
—%RETURN—
YTD 12-MO 2-YR
n ALEXANDRA INVESTMENT MANAGEMENT
Tel: +1 212 301 1800 Fax: +1 212 301 1810
AlexandraConvertibleBondFundI,Ltd.(ClassA) OT OT VGB 08/31 USD
2155.22
1.2
-22.0
1.6
FUND NAME
NAV
GF AT LB DATE CR
Platinm-Gbl Dividend
Platinm-Nordic
Platinm-Premier
Platinm-Turnberry
GL
OT
OT
OT
EQ
OT
OT
BD
CYM
CYM
CYM
USA
02/29
02/29
12/31
02/28
USD
SEK
USD
USD
NAV
NS
NS
NS
60.14
Asia Value Formula Fd-B
NS
18.5
17.7
6.2
12.8
-55.9
-1.2
-22.0
-10.7
-66.0
-3.0
-1.8
-3.9
-44.3
NS
OT
OT
OT
OT
OT
OT
OT
OT
EQ
OT
CYM
USA
CYM
CYM
USA
02/29
10/31
02/29
02/29
05/29
USD
USD
USD
USD
USD
NS
129.92
NS
NS
35.02
OT
OT
OT
OT
OT
CYM
LUX
CYM
CYM
AUT
03/06
03/06
03/06
03/06
03/06
USD
USD
USD
USD
EUR
38.99
1834.00
1226.64
1102.03
6183.00
1.6
-1.1
6.1
11.1
0.1
-32.7
-31.4
-9.8
-2.7
-19.1
2.8
-4.6
13.9
4.8
0.4
n WINTON CAPITAL MANAGEMENT LTD
Tel: +44 (0)20 7610 5350 Fax: +44 (0)20 7610 5301
n PLATINUM CAPITAL MANAGEMENT
Tel: +44 207 024 9840, www.platinumfunds.net
Platinm-All Star
Platinm-All Weather
Platinm-Dynasty
Platinm-Emancipation
Platinm-Equity Plus
GL
GL
GL
GL
GL
3.6
2.4
-0.2
6.8
-18.2
-4.4
3.2
-12.6
-4.3
-63.7
0.5
3.8
-4.7
9.0
-45.6
Winton Evolution EUR Cls H
Winton Evolution GBP Cls G
Winton Evolution USD Cls F
Winton Futures EUR Cls C
Winton Futures GBP Cls D
Winton Futures JPY Cls E
Winton Futures USD Cls B
GL
GL
GL
GL
GL
GL
GL
OT
OT
OT
OT
OT
OT
OT
CYM
CYM
CYM
VGB
VGB
VGB
VGB
01/31
01/31
01/31
01/31
01/31
01/31
01/31
EUR
NS
GBP
NS
USD
NS
EUR
241.14
GBP
260.75
JPY 16854.25
USD
856.27
10.08
15.7
-2.7
12.5
NS
15.23 14.23 8.00
10.04 14.20 17.80
7.99
1.90
12.77
8.88
9.18
7.78
7.00
6.42
4.13
1.23
6.79
1.01
5.73
-0.57
6.72
NS
NS
10.52
6.55 11.30
4.70
4.60
5.77
8.03
5.13
4.69
5.54
NS
NS
Source: Morningstar, Ltd
1 Oliver’s Yard, 55-71 City Road
London EC1Y 1HQ United Kingdom
www.morningstar.co.uk; Email: [email protected]
Phone: +44 (0)203 107 0038; Fax: +44 (0)203 107 0001
Bank of China added 2.5% and
China Life Insurance added 1.4% in
Hong Kong; in Shanghai, they added
2%, 0.7% and 1.4%, respectively.
NAV
GF AT LB DATE CR
FUND NAME
Yuki Mizuho Jpn Gro
Yuki Mizuho Jpn Inc
Yuki Mizuho Jpn Lg Cap
Yuki Mizuho Jpn LowP
Yuki Mizuho Jpn PGth
Yuki Mizuho Jpn SmCp
Yuki Mizuho Jpn Val Sel
JP
JP
JP
JP
JP
JP
AS
EQ
EQ
EQ
EQ
EQ
EQ
EQ
IRL
IRL
IRL
IRL
IRL
IRL
IRL
03/08
03/08
03/08
03/08
03/08
03/08
03/08
JPY
JPY
JPY
JPY
JPY
JPY
JPY
NAV
5313.00
6866.00
4408.00
10446.00
6047.00
6323.00
4772.00
—%RETURN—
YTD 12-MO 2-YR
8.5
11.0
13.5
12.0
7.5
10.5
10.7
OT BMU 01/31 USD
OT IRL 02/23 USD
OT ARE 02/23 AED
990.72
1006.20
4.82
Intel-Chin Mainlnd Foc
Intel-China Converg*
VP Classic - A
VP CLassic - B
VP High Dividend Stk
AS
AS
AS
AS
OT
EQ
EQ
EQ
EQ
OT
CYM
CYM
CYM
CYM
CYM
03/07
03/07
03/07
03/07
03/07
USD
USD
USD
USD
USD
33.46
119.27
204.69
94.37
55.48
-1.9
-1.9
-1.9
0.6
0.6
0.7
0.6
1.1
0.7
0.6
7.2
6.9
6.2
6.9
9.6
9.5
9.4
12.2
12.2
11.6
12.1
JF ASEAN Eq (SGD)A(acc)
JF ASEAN Eq (USD)A(acc)
JF Asia Pac ex-Jap Eq(SGD)A(acc)
JF Asia Pac ex-Jp (USD)A(acc)
JF China (SGD)A(acc)
JF China (USD)A(dist)
JF Greater China (SGD)A(acc)
JF Greater China (USD)A(dist)
JF India (SGD)A(acc)
JF India (USD)A(acc)
JF Korea Equity (SGD) A (Acc)
JF Korea Equity (USD) A (acc)
JF Pacific Tech (USD) A (acc)
JF Singapore (SGD)A(acc)
JF Singapore (USD)A(dist)
JF US Technology A (dist) - USD
JPM Africa (USD) A (acc)
JPM Amer Large Cap (USD)A(Dist)
JPM America Large Cap A (acc) - SGD
JPM Asia Pac Bond (USD)A(acc)
JPM Brazil Eq (SGD)A(acc)
JPM Brazil Eq (USD)A(acc)
JPM East Eur (EUR)A(dist)(JF)
JPM Emerg EMEA (SGD)A(acc)
JPM Emerg EMEA (USD)A(dist)
JPM Emerg Mid East Eq(SGD)A(acc)
JPM Emerg Mid East(USD)A(acc)
JPM Emerg Mid East(USD)A(dist)
JPM Emerg Mkt Eq (SGD)A(acc)
JPM Emerg Mkt Eq (USD)A(acc)
JPM Emerg Mkt Eq (USD)A(dist)
JPM Emerg Mkt Infra(SGD)A(acc)
JPM Emerg Mkt Infra(USD)A(acc)
JPM Emerg Mkt LC Debt(SGD)A(acc)
JPM Emerg Mkt LC Debt(USD)A(acc)
JPM Emerg Mkt LC Debt(USD)A(mth)
JPMEmergingMarketsDebtA(mth)-USD
JPM Glb Dyn (SGD)A(acc)
JPM Glb Dyn (SGD)A(acc)(Hedged)
JPM Glb Dyn (USD)A(dist)(JF)
JPM Glb Nat Res (EUR)A(dist)
JPM Glb Nat Res (SGD)A(acc)
JPM Glb Nat Res (USD)A(acc)
JPM Glbl Consumer Trends (SGD)A(Acc)
JPM Glbl Consumer Trends (USD)A(Acc)
JPM Glbl Mining (SGD)A(Acc)
JPM Glbl Mining (USD)A(Acc)
JPMGlobalCorporateBondFundA(mth)-USD
JPM Latin Amer Eq(SGD)A(acc)
JPM Latin Amer Eq(USD)A(dist)JF
JPM Russia (USD) A (dist)
JPMUSAggregateBondA(mth)-SGD(Hedged)
JPM US Aggregate Bond A (mth) - SGD
JPM US Aggregate Bond A (mth) - USD
JPM US Sm Cap Grwth (USD)A(Dist)
JPM US Technology A (acc) - SGD
JPMIFGlobalConvertibles-USDClassA(acc)
JPMIFGlobalFinancials-SGDClassA(acc)
JPMIFGlobalFinancials-USDClassA(acc)
JPMIF Global Select Eq USD Class A (acc)
JPMIFIncomeOpportunityUSDClassA(acc)
AS
AS
AS
AS
AS
AS
AS
AS
EA
EA
AS
AS
OT
AS
AS
OT
OT
US
US
AS
OT
OT
EU
OT
OT
OT
OT
OT
GL
GL
GL
OT
OT
OT
OT
OT
GL
GL
GL
GL
GL
GL
GL
OT
OT
GL
GL
US
GL
GL
EE
US
US
US
US
OT
OT
OT
OT
GL
OT
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
OT
EQ
EQ
BD
OT
OT
EQ
OT
OT
OT
OT
OT
EQ
EQ
EQ
OT
OT
OT
OT
OT
BD
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
BD
EQ
EQ
EQ
BD
BD
BD
EQ
EQ
OT
EQ
EQ
EQ
OT
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
03/07
SGD
USD
SGD
USD
SGD
USD
SGD
USD
SGD
USD
SGD
USD
USD
SGD
USD
USD
USD
USD
SGD
USD
SGD
USD
EUR
SGD
USD
SGD
USD
USD
SGD
USD
USD
SGD
USD
SGD
USD
USD
USD
SGD
SGD
USD
EUR
SGD
USD
SGD
USD
SGD
USD
USD
SGD
USD
USD
SGD
SGD
USD
USD
SGD
USD
SGD
USD
USD
USD
15.55
16.18
12.53
17.59
10.83
41.61
12.83
25.17
12.90
23.11
14.41
10.43
15.01
15.01
31.36
2.13
10.17
10.97
13.14
11.46
13.58
11.24
28.78
13.09
55.85
11.56
14.86
19.93
13.64
21.65
30.26
15.00
8.01
18.43
18.64
15.69
15.49
13.84
11.22
12.85
18.05
20.60
16.84
19.19
16.97
18.97
108.70
102.00
14.01
43.91
12.71
12.86
12.68
10.74
100.63
13.80
110.40
14.63
86.50
149.85
168.66
7.8
10.7
8.5
11.5
8.3
11.3
9.9
12.9
14.5
17.6
12.2
15.9
10.1
11.0
14.1
13.3
9.8
7.4
NS
5.0
14.7
18.4
19.4
12.0
15.0
7.7
11.1
11.2
8.4
11.4
11.4
13.1
16.3
6.2
9.1
9.1
5.7
5.2
7.5
8.1
9.6
7.7
10.7
8.1
11.1
5.7
8.6
3.5
12.9
16.6
22.6
NS
NS
1.2
7.5
NS
6.4
10.7
13.7
9.6
1.9
FUNDS
0.4
8.4
11.5
-9.1
-3.5
-2.2
-4.7
NS
-0.7
10.1
11.1
10.3
10.2
10.1
-6.4
-10.1
-8.5
-9.0
-4.0
8.0
4.3
5.6
5.1
10.2
-19.5
-12.0
-15.0
-14.9
-21.0
-17.3
-18.8
-7.6
-5.6
-7.7
-5.5
-10.9
-2.4
-8.4
4.2
4.4
-13.5
-13.3
-16.8
-16.6
-11.5
-11.5
-11.0
-10.8
NS
-4.7
-12.8
-2.9
-2.7
-4.5
-7.5
0.5
NS
6.1
-1.9
-1.6
-15.1
-10.9
-10.7
-5.2
-5.0
-5.2
-6.3
-6.2
-6.1
NS
-8.6
NS
4.1
4.1
10.1
-8.9
NS
-8.7
-18.4
-23.7
-23.6
NS
-6.6
NS
NS
8.5
-2.7
-2.4
-26.3
NS
NS
8.5
-2.6
NS
-6.4
NS
-18.2
-8.4
0.1
In print & online. Contact:
NS
19.3
NS
-0.6
-8.8
-3.9
-2.3
2.7
-5.8
-0.9
NS
11.2
0.4
3.6
9.1
16.1
5.4
8.4
NS
NS
NS
4.4
0.2
NS
3.4
NS
0.8
0.7
-1.5
3.6
3.6
NS
4.8
NS
8.4
8.4
11.5
-1.0
NS
4.2
5.2
-1.7
3.4
NS
3.1
NS
NS
NS
NS
5.7
-3.4
NS
NS
NS
14.1
NS
0.9
NS
-4.9
3.1
2.7
[email protected]
—%RETURN—
YTD 12-MO 2-YR
n SUPERFUND ASSET MANAGEMENT GMBH
For info about open funds, contact [email protected] and www.superfund.com
*Closed for New Investments
Superfund Cayman*
Superfund GCT USD*
Superfund Green Gold A (SPC)
Superfund Green Gold B (SPC)
Superfund Q-AG*
OT CYM 03/07 USD
n WEBSITE: WWW.VALUEPARTNERS.COM.HK, TEL: (852) 2880 9263, FAX: (852) 2564 8487
*formerly known as China ABH Shares Fund
n YUKI MANAGEMENT & RESEARCH
Yuki 77 General
Yuki 77 Growth
103.20
OT
TNI MENA Special Sits Fund OT
TNI MENA UCITS Fund
OT
TNI UAE Blue Chip Fund
OT
YMR-N Growth Fund
GL OT WSM 03/07 USD
-0.93
15.56 27.99
LIST YOUR
n THE NATIONAL INVESTOR
TNI Tower | Zayed 1st Street Khalidia| Web:www.tni.ae
n Yuki 77 Series
CPS-Master Priv Fund
2.45
n J.P. MORGAN ASSET MANAGEMENT
For additional fund prices, please visit www.jpmorganam.com.sg
Tel: +65 6882 1328
n SENSIBLE ASSET MANAGEMENT LIMITED
www.samfund.com.hk Tel: (852) 2868 6848 Fax: (852) 2810 9948
n YMR-N Series
n CREDIT PACIFIC ASSET MANAGMENT
www.creditpacific.com
% Return in $US **
1-YR 2-YR 5-YR
21.0
n MANULIFE ASSET MANAGEMENT TEL:(852)2108 1110
Internet:http://www.manulife.com.hk 47/F Manulife Plaza, Causeway Bay, Hong Kong
AHW Top-Div.Int.
YTD
n PT CIPTADANA ASSET MANAGEMENT
Tel: +62 21 25574 883 Fax: +62 21 25574 893 Website: www.ciptadana.com
—%RETURN—
YTD 12-MO 2-YR
n AHW CAPITAL MANAGEMENT
Tel (+49) 1805 - 23 82 82
www.ahw-capital.com
LEGAL
CURR. BASE
FUND MGM'T CO.
[ Search by company, category or country at asia.WSJ.com/funds ]
—%RETURN—
YTD 12-MO 2-YR
11.7
15.3
12.3
19.2
13.4
11.2
Leading 10 Performers
JP
EQ IRL 03/08 JPY
8484.00
10.4
-15.2
-4.4
JP
JP
EQ IRL 03/08 JPY
EQ IRL 04/27 JPY
5162.00
5230.34
11.1
-7.3
-15.9
-5.4
-7.0
-27.3
EQ IRL 03/08 JPY
9049.00
11.6
NS
NS
EQ IRL 03/08 JPY
EQ IRL 03/08 JPY
5963.00
7066.00
10.3
13.0
-15.2
-17.1
-6.2
-5.3
n Yuki Asia Umbrella Series
Yuki Rebounding Gro Fd
JP
n Yuki Chugoku Series
Yuki Chugoku Jpn Gen
Yuki Chugoku JpnLowP
JP
JP
n Yuki Hokuyo Japan Series
Yuki Hokuyo Jpn Gen
Yuki Hokuyo Jpn Inc
Yuki Hokuyo Jpn Sm Cap
n Yuki Mizuho Series
Yuki Mizuho Gen Jpn III
Yuki Mizuho Jpn Dyn Gro
Yuki Mizuho Jpn Exc 100
Yuki Mizuho Jpn Gen
JP
JP
JP
EQ IRL 03/08 JPY
EQ IRL 03/08 JPY
EQ IRL 03/08 JPY
4023.00
4545.00
4622.00
12.7
9.2
11.5
-12.4
-13.4
-13.4
-7.0
-7.6
-2.0
JP
JP
JP
JP
EQ
EQ
EQ
EQ
3773.00
3647.00
6018.00
7691.00
12.7
9.4
13.0
11.0
-12.6
-20.8
-11.6
-15.7
-6.4
-10.4
-5.8
-4.9
IRL
IRL
IRL
IRL
03/08
03/08
03/08
03/08
JPY
JPY
JPY
JPY
For information about listing your funds, please email [email protected] or call +852 2573-7121
asia.WSJ.com
BLUE CHIPS & BONDS
Dow Jones Asia Titans: Thursday's best and worst...
Major players &
benchmarks
At right, a look at the Asia Titans, the biggest and best known
companies in Asia. Below, some of the Dow Jones Titans indexes
of biggest and most liquid stocks in individual countries and regions
Giants around the world
In U.S.-dollar terms.
Dow Jones Country Titans
Year-to-date
Property Casualty Insurance $20.6
Japan Tobacco
Japan
Tobacco
52.5
445,500
Mitsubishi
Japan
Industrial Suppliers
39.1
1,938
Cheung Kong
Hong Kong
Real Estate Holding Development
32.3
Mitsubishi UFJ Finl
Japan
Banks
72.0
-13.0
25.7
-0.28
-7.5
-3.5
Westfield Grp
Australia
Retail
21.2
8.65
-0.23
-11.6
20.4
NTT DoCoMo
Japan
Mobile Telecommunications
71.9
140,300
-8.6
-1.1
1.40
Hong Kong
1.45
13.1
-9.9
Singapore
1.89
12.9
-4.9
Italy
0.99
12.0
-25.0
China 88
1.22
11.8
-15.2
Sweden
1.66
10.3
-4.1
South Korea
1.07
9.9
-1.3
France
1.36
Netherlands
0.99
6.6
-12.1
Switzerland
0.42
5.4
-7.5
U.K.
0.85
4.9
-0.3
South Africa
0.44
4.5
12.3
Canada
0.35
3.6
-10.7
Shin-Etsu Chml
23.1
Japan (Specialty Chemicals)
Toyota Motor
131.5
Japan (Automobiles)
Shinhan Financial Grp
18.2
South Korea (Banks)
Sumitomo Mitsui Finl
46.9
Japan (Banks)
Mitsui
30.7
Japan (Industrial Suppliers)
Mizuho Financial Grp
39.6
Japan (Banks)
East Japan Railway
26.4
Japan (Travel Tourism)
Reliance Industries
50.9
India (Exploration Production)
Hon Hai Precision Ind
36.4
Taiwan (Electrical Components Equipment)
Canon
54.8
Japan (Electronic Office Equipment)
Nissan Motor
41.9
Japan (Automobiles)
Honda Motor
67.1
Japan (Automobiles)
China Construction Bank
194.0
Hong Kong (Banks)
Woodside Petroleum
30.5
Australia (Exploration Production)
Bank of China
35.0
Hong Kong (Banks)
Nintendo
17.9
Japan (Toys)
Seven I Hldgs
25.0
Japan (Broadline Retailers)
China Mobile (HK)
209.4
Hong Kong (Mobile Telecommunications)
China Life Insurance
20.2
Hong Kong (Life Insurance)
PetroChina
31.0
Hong Kong (Integrated Oil Gas)
-11.5
Dow Jones Regional Sector Titans
-4.0%
17.7%
15.9
-2.4
Banks
1.54
15.0
-17.7
Constructn Mat
1.83
14.1
-12.1
Tiger 50*
1.36
13.5
-5.8
Technology
0.65
13.1
9.5
Global 50
0.54
-13.4
9.3
-9.1
-7.2
2.7
7.2
Market value,
in billions (U.S)
Company/Country (Industry)
-16.6
0.40
0.07%
...And the rest of Asia's blue chips
-14.4
Arab 50
-1.13%
-7.4
14.4
11.6
11.0
-0.50
Germany
10.6
-2.4
25.08
-5.0
1.15
3.5
401,500
15.5
1.28
84.8
-6.3
27.7
1.19
Insurance
-14.2
2.72
32.6
Brazil
Asian 50
2.86
415.00
Food Retailers Wholesalers
-5.6
1.79%
108.00
Steel
15.8
1.07
72.9
Australia
1.82
Auto Parts
100.1
-14.3
South Korea
Russia
Fincl Svcs
34.0
3.03
Woolworths
-3.7
1.6
4.21
*Asia excluding Japan
Latest,
in local
currency
STOCK PERFORMANCE
Latest 52-week Three-year
4,440
2.66%
3,330
2.62
-10.0
14.8
42,900
2.51
-14.7
109.3
2,735
2.47
-8.5
-1.1
1,383
2.44
-7.1
64.3
135.00
2.27
-18.7
-23.3
5,440
2.26
-4.4
-0.2
31.13
2.23
-28.5
36.2
101.00
2.23
-12.9
50.0
3,715
2.20
-3.1
69.6
1.0%
Company/Country (Industry)
Nippon Steel
17.2
Japan (Steel)
National Australia Bk
54.6
Australia (Banks)
CNOOC
96.4
Hong Kong (Exploration Production)
Panasonic
20.2
Japan (Consumer Electronics)
Indl Comm Bk China
58.7
Hong Kong (Banks)
Sun Hung Kai Prop
38.5
Hong Kong (Real Estate Holding Development)
Hitachi Ltd.
25.8
Japan (Electronic Equipment)
Commonwlth Bk of Aus
80.3
Australia (Banks)
Taiwan Smcndtr Mfg
69.9
Taiwan (Semiconductors)
BHP Billiton
116.8
Australia (General Mining)
Kansai Elec Power
15.6
Japan (Electricity)
Samsung Electronics
136.9
South Korea (Semiconductors)
Sony
20.1
Japan (Consumer Electronics)
Westpac Bking
65.6
Australia (Banks)
Nippon T&T
59.5
Japan (Fixed Line Telecommunications)
Rio Tinto Ltd.
29.0
Australia (General Mining)
Softbank Corp.
31.9
Japan (Mobile Telecommunications)
Takeda Pharm
35.5
Japan (Pharmaceuticals)
Wesfarmers Ltd.
30.4
Australia (Home Improvement Retailers)
Aus NZ Bk
60.8
Australia (Banks)
3.7%
817.00
2.13
-0.2
150.6
3,035
2.02
-11.4
41.2
6.26
1.95
-11.3
58.6
35.70
1.88
-16.4
0.4
3.25
1.88
-22.6
53.4
11,380
1.79
-50.4
-56.2
2,307
1.72
2.2
18.4
80.95
1.57
7.4
24.5
21.10
1.44
-30.8
-0.9
11.38
1.43
2.5
122.3
Market value,
in billions (U.S)
NOTICE TO READERS
All statistics published in
Asia from markets outside
the Asian-Pacific region
reflect preliminary data.
Latest,
in local
currency
STOCK PERFORMANCE
Latest 52-week Three-year
223.00
1.36%
1.34
23.38
-21.8%
-10.4%
-7.6
39.2
16.74
1.09
-8.9
175.3
710.00
1.00
-34.8
-34.9
5.25
0.96
-15.2
72.6
116.40
0.95
-8.6
106.0
470.00
0.86
-8.6
91.8
48.04
0.80
-7.3
77.9
79.70
0.76
11.5
64.3
34.30
0.73
-26.4
24.1
1,409
0.71
-33.8
-37.5
1,180,000
0.68
31.3
134.6
1,648
0.61
-43.3
-3.9
20.41
0.54
-13.1
30.0
3,835
0.39
-4.7
0.9
62.66
0.38
-25.3
37.1
2,351
0.34
-31.0
98.2
3,665
0.27
-9.6
-4.1
28.65
0.24
-13.0
68.0
21.79
0.18
-8.3
76.3
Sources: Dow Jones Indexes; WSJ Market Data Group
Source: Dow Jones Indexes
Tracking
credit
markets &
dealmakers
13.0%
POSCO
16.8
-4.0%
Three-year
-16.5%
-13.8%
0.61
8.5
52-week
4.24%
2,189
526,000
Turkey
0.54
Japan
STOCK PERFORMANCE
Previous session
Mobile Telecommunications $27.4
17.0%
0.66
Tokio Marine Hldgs
Previous
close, in
local currency
Japan
2.05%
Spain
Industry
KDDI
Japan
Australia
Country
52-week
INDEX PERFORMANCE
Previous session
Market value,
in billions
of US$
Company
Credit derivatives
Credit-default swaps: Asian companies
Spreads on credit derivatives are one way the market rates
creditworthiness. Regions that are treading in rough waters
can see spreads swing toward the maximum—and vice versa.
Indexes below are for five-year swaps.
At its most basic, the pricing of credit-default swaps measures how much a buyer has to pay to purchase-and
how much a seller demands to sell-protection from default on an issuer's debt. The snapshot below gives a
sense which way the market was moving yesterday.
Markit iTraxx Indexes
Showing the biggest improvement...
Index: series/version
Mid-spread,
in pct. pts.
Mid-price
Europe: 16/1
Eur. High Volatility: 16/1
Europe Crossover: 16/1
Asia ex-Japan IG: 16/1
Japan: 16/1
Spreads
Spreads on fiveyear swaps for
corporate debt;
based on Markit
iTraxx indexes.
Coupon
SPREAD RANGE, in pct. pts.
since most recent roll
Maximum Minimum
Average
And the most deterioration
CHANGE, in basis points
CHANGE, in basis points
1.36
98.40%
0.01%
2.08
1.27
1.68
1.97
95.79
0.01
3.16
1.87
2.52
Nankai Elec Rwy
119
–7
–5
–7
5.89
96.65
0.05
8.74
5.50
7.12
CASIO COMPUTER
72
–2
...
1
1.67
97.02
0.01
2.78
1.56
1.99
Cr Saison
154
–3
5
2
1.46
97.91
0.01
2.32
1.37
1.79
KT&G Co
132
–2
–3
–1
Sun Hung Kai Pptys
Yesterday Yesterday Five-day 28-day
Note: Data as of March 7
Singapore Telecom
In percentage points
Daiwa Secs
Index roll
Europe Sub Financials
t
6.40
4.80
3.20
Europe
t
69
–1
2
–5
255
–3
–3
–10
Yesterday Yesterday Five-day 28-day
Philippine Long Distance
128
9
3
2
Kobe
150
9
12
2
SHARP
209
12
38
51
Kawasaki Kisen Kaisha
474
24
55
19
180
9
14
1
66
3
4
6
Tokio Marine Nichido Fire
Ins
Kawasaki Heavy Inds
115
–1
1
–19
Shinsei
359
–4
12
55
NEC
230
10
17
27
Teijin
61
–1
1
–3
Nippon Yusen Kabushiki
Kaisha
190
7
9
19
Nikon
55
–1
–4
–3
Mitsui OSK Lines
189
7
9
16
49
2
...
–1
Japan Tob
1.60
0
Sept. Oct. Nov. Dec. Jan. Feb. Mar.
2011
2012
Source: Markit Group
WSJ.com>>
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Source: Markit Group
Europe: Asia’s
Bank revenues
equity capital markets
Behind
deals:from
Bank revenues from equity capital markets
Behind every IPO,
follow-on or
convertible equity
offering is one or
more investment
banks. At right,
investment banks
historical and yearto-date revenues
from global equitycapital-market
(ECM) deals
n Equity capital markets n Debt capital markets (both in billions, left axis)
ECM as a percentage of total
6
60%
(right axis)
t
4
40
2
20
0
2005
2006
2007
2008
2009
2010
2011
0
2012
Source: Dealogic
GLOBAL MARKETS LINEUP
Commodities
Currencies
Prices of futures contracts with the most open interest
EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; NYBOT: New York Board of Trade; MDEX: Bursa Malaysia
Derivatives Berhad; LIFFE: London International Financial Futures Exchange; LME: London Mercantile Exchange; NYMEX: New York Mercantile Exchange;
ICE: IntercontinentalExchange
Year
ONE-DAY CHANGE
Commodity
Exchange
Last price
Net
Percentage
high
Corn (cents/bu.)
Soybeans (cents/bu.)
Wheat (cents/bu.)
Live cattle (cents/lb.)
Cocoa ($/ton)
Coffee (cents/lb.)
Sugar (cents/lb.)
Cotton (cents/lb.)
Rapeseed (euro/ton)
Cocoa (pounds/ton)
Robusta coffee ($/ton)
642.00
1335.25
641.50
126.175
2,378
186.70
24.19
90.17
468.50
1,500
2,054
2.00
8.50
2.25
0.600
101
-1.90
0.27
0.05
1.25
48
23
3.7940
1695.80
33.635
2,214.50
22,950.00
8,390.00
2,115.50
2,037.50
19,105
0.0270
11.90
0.050
-6.00
495.00
129.50
41.50
34.00
210
108.63
3.2652
3.3148
2.359
125.86
1,032.00
0.70
0.0458
0.0274
-0.041
1.74
22.25
CBOT
CBOT
CBOT
CME
ICE-US
ICE-US
ICE-US
ICE-US
LIFFE
LIFFE
LIFFE
Copper ($/lb.)
Gold ($/troy oz.)
Silver ($/troy oz.)
Aluminum ($/ton)
Tin ($/ton)
Copper ($/ton)
Lead ($/ton)
Zinc ($/ton)
Nickel ($/ton)
COMEX
COMEX
COMEX
LME
LME
LME
LME
LME
LME
Crude oil ($/bbl.)
Heating oil ($/gal.)
RBOB gasoline ($/gal.)
Natural gas ($/mmBtu)
Brent crude ($/bbl.)
Gas oil ($/ton)
NYMEX
NYMEX
NYMEX
NYMEX
ICE-EU
ICE-EU
679.00
1,339.00
696.00
131.500
2,499
241.10
25.81
99.54
470
1,612
2,070
0.31%
0.64
0.35
0.48
4.44
-1.01%
1.13
0.06
0.27
3.31
1.13
AMERICAS
Year
low
604.00
1,160.00
612.50
124.150
2,030
186.05
22.43
87.80
423
1,321
1,743
-0.27
2.20
1.57
2.00
1.70
1.11
110.25
3.3165
3.3868
3.2590
128.40
1,043.25
0.65
1.42
0.83
-1.71
1.40
2.20
Per euro
Major stock market indexes
PREVIOUS SESSION
Close
Net change
PERFORMANCE
Percentage change
Yr.-to-date
ASIA-PACIFIC
DJ Asia-Pacific
Australia
SPX/ASX 200
4171.00
27.30
2.8
-11.2
China
CBN 600
21987.89
284.85
1.31
13.0
Hong Kong
Hang Seng
20900.73
272.95
1.32
13.4
130.63
Sensex
17145.52
Jakarta Composite
3967.669
25.152
Japan
Nikkei Stock Average
9768.96
192.90
Malaysia
Kuala Lumpur Composite
0.2306
Euro zone euro
1
1
0.7544
1.3256
1.7755
0.5632
1-mo. forward
0.9998
1.0002
0.7542
1.3258
1.3263
Canada dollar
1.3150
0.7605
0.9920
1.0081
3-mos. forward
0.9995
1.0005
0.7540
Chile peso
642.39
0.001557
484.60
0.002064
6-mos. forward
0.9988
1.0012
0.7535
1.3272
Czech Rep. koruna-b
24.797
0.0403
18.706
0.0535
2339.38 0.0004275
New Zealand
NZSX-50
South Korea
1.3256
0.7544
1
1
Denmark krone
7.4342
0.1345
5.6081
0.1783
Mexico peso-a
16.9417
0.0590
12.7803
0.0782
Hungary forint
293.12
0.003412
221.12
0.004522
Peru sol
3.5453
0.2821
2.6745
0.3739
Norway krone
7.4127
0.1349
5.5919
0.1788
Uruguay peso-e
25.916
0.0386
19.551
0.0511
Poland zloty
4.1044
0.2436
3.0962
0.3230
U.S. dollar
1.3256
0.7544
1
1
Russia ruble-d
38.933
0.02569
29.370
0.03405
0.229885
Sweden krona
8.8931
0.1124
6.7087
0.1491
Switzerland franc
1.2053
0.8297
0.9093
1.0998
1.1002
5.77
0.173417
4.35
ASIA-PACIFIC
Australia dollar
1.2486
0.8009
0.9419
1.0617
1-mo. forward
1.2049
0.8299
0.9089
1-mo. forward
1.2531
0.7981
0.9453
1.0579
3-mos. forward
1.2040
0.8306
0.9082
1.1010
3-mos. forward
1.2617
0.7926
0.9518
1.0507
6-mos. forward
1.2023
0.8318
0.9069
1.1026
1.2744
0.7847
0.9614
1.0402
Turkey lira
2.3576
0.4242
1.7785
0.5623
China yuan
8.3746
0.1194
6.3176
0.1583
U.K. pound
0.8380
1.1933
0.6321
1.5819
Hong Kong dollar
10.2812
0.0973
7.7558
0.1289
1-mo. forward
0.8381
1.1931
0.6323
1.5816
India rupee
66.1813
0.0151
49.9250
0.0200
3-mos. forward
0.8385
1.1926
0.6325
1.5809
6-mos. forward
1.5797
12113 0.0000826
9138 0.0001094
Egypt pound-a
6-mos. forward
107.81
0.009276
81.33
0.012296
Israel shekel
5.0109
0.1996
3.7801
Malaysia ringgit-c
3.9908
0.2506
3.0106
0.3322
Jordan dinar
0.9402
1.0636
0.7093
1.4099
New Zealand dollar
1.6085
0.6217
1.2134
0.8241
Kuwait dinar
0.3683
2.7148
0.2779
3.5988
Pakistan rupee
120.591
0.0083
90.970
0.0110
Lebanon pound
1993.00 0.0005018
1503.45
0.0006651
Philippines peso
56.437
0.0177
42.575
0.0235
Saudi Arabia riyal
4.9715
0.2011
3.7504
0.2666
Singapore dollar
1.6613
0.6019
1.2532
0.7979
South Africa rand
9.9708
0.1003
7.5216
0.1330
United Arab dirham
4.8690
0.2054
3.6730
0.2723
1481.44 0.0006750
1117.55 0.0008948
Taiwan dollar
39.092
0.02558
29.490
0.03391
Thailand baht
40.529
0.02467
30.574
0.03271
a-floating rate b-commercial rate c-government rate c-commercial rate d-Russian Central Bank rate.
Source: ICAP Plc.
Region/Country
Index
Euro Zone
Euro Stoxx
-21.2
Denmark
OMX Copenhagen
-11.5
Finland
OMX Helsinki
-6.3%
0.66
0.64
2.01
1.63
Close
Euro Stoxx 50
Net change
248.71
5.44
2514.22
53.45
411.06
1.35
6098.89
93.51
86.03
2.54
10.1
163.43
2.45
15.9
-3.2
15.5
-6.4
Italy
FTSE MIB
16664.25
265.36
10.4
-24.5
Netherlands
AEX
325.11
5.47
Russia
RTSI
1677.21
Spain
IBEX 35
8307.4
145.60
9.4
Switzerland
SMI
6153.93
51.39
25.2
Turkey
ISE National 100
59673.75
194.02
-3.4
U.K.
FTSE 100
5859.73
68.32
AMERICAS
DJ Americas
359.76
3.71
Bovespa
67114.68
1097.92
17.0
13.4
12.2
9.6
1.0
7984.56
81.48
1.03
12.9
-7.6
1168.31
15.15
1.31
13.9
14.6
Argentina
Merval
2705.25
17.28
EUROPE
Stoxx Europe 600
264.16
4.05
8.0
-4.9
Mexico
IPC
37634.12
85.58
Stoxx Europe 50
2477.11
31.10
4.5
-5.2
Dow Jones Indexes
Net
change
Global TSM
2570.45 25.99
Global DOW
1965.99 23.43
Global Titans 50
186.99
1.01
Asia/Pacific TSM
1290.11 14.37
Asia/Pacific ex-Japan TSM 3274.52 43.44
Europe TSM
2577.94 46.56
Emerging Markets TSM 4302.23 53.35
Asian Titans 50
131.93
1.67
BRIC 50
581.77
4.85
CBN China 600 -c
21987.89 284.86
China Offshore 50
3982.82 66.50
Shanghai -c
299.77
3.98
1.27
PERFORMANCE
YearThree-yr.,
to-date
52-wk. annualized
Daily
1.02%
1.21
0.54
1.13
1.34
1.84
1.26
1.28
0.84
1.31
1.70
1.35
9.7% -3.1%
9.0
-8.2
7.2
2.7
11.0
-7.2
13.0
-6.4
9.8
-9.5
15.5
-6.9
10.6
-9.1
17.1
-10.1
13.0 -21.2
12.6
-8.9
13.1 -20.3
24.3%
19.3
19.8
21.5
30.2
20.4
30.3
17.4
27.3
5.4
20.5
6.0
Price-toDividend earnings
yield*
ratio* Dows Jones Index
1.08% 23
1.90
21
5.37
15
5.50
11
4.99
8
4.02
19
1.66 20
1.88
18
2.67
15
1.38
14
3.05
25
European and Americas index data are as of 12:00 p.m. ET.
Last
Shenzhen -c
338.36
U.S. TSM
14128.58
Global Select Div -d
214.03
Asia/Pacific Select Div -d 310.92
Hong Kong Select Div -d 199.57
U.S. Select Dividend -d 394.12
Islamic Market
2261.31
Islamic Market 100
2388.03
Islamic China/HK Titans 30 1612.57
Sustainability Korea
1467.84
Brookfield Infrastructure 2603.47
DJ-UBS Commodity -p 144.33
Net
change
4.39
68.32
2.80
2.87
2.09
1.18
21.30
18.13
26.79
27.42
11.81
0.63
*Fundamentals are based on data in U.S. dollar. Footnotes: c-in local currency. d-dividends reinvested. p-previous day. Note: All data as of 11:30 a.m. ET.
U.S.
Australia
Britain
Canada
China
Euro
Hong Kong
India
Indonesia
Japan
New Zealand
South Korea
Malaysia
Philippines
Singapore
Switzerland
Taiwan
Thailand
1.062
1.582
1.008
0.1583
1.326
0.129
0.0200
0.0001
0.012
0.824
0.0009
0.332
0.023
0.798
1.100
0.034
0.033
PERFORMANCE
YearThree-yr.,
to-date
52-wk. annualized
Daily
1.31%
0.49
1.33
0.93
1.06
0.30
0.95
0.76
1.69
1.90
0.46
0.44
14.6% -24.9%
8.5
4.5
6.3
-3.3
11.6
6.3
15.8
-9.1
1.9
7.6
9.3
0.5
7.3
5.1
14.8
-5.6
15.2
-1.6
3.8
11.7
2.6 -12.2
10.8%
27.1
31.6
38.3
20.4
27.8
23.2
19.4
22.4
38.6
27.6
10.9
Source: DowJones Indexes
U.S.-dollar and euro foreign-exchange rates in global trading
1.490
0.949
0.149
1.249
0.121
0.0189
0.0001
0.012
0.776
0.0008
0.313
0.022
0.752
1.036
0.032
0.031
0.637
0.100
0.838
0.082
0.0127
0.0001
0.008
0.521
0.0006
0.210
0.015
0.504
0.695
0.021
0.021
C$
0.992
1.053
1.569
0.157
1.315
0.128
0.0199
0.0001
0.012
0.818
0.0009
0.330
0.023
0.792
1.091
0.034
0.032
YUAN
6.318
6.707
9.994
6.369
8.375
0.815
0.1265
0.0007
0.078
5.206
0.0057
2.098
0.148
5.041
6.948
0.214
0.207
EURO
0.754
0.801
1.193
0.760
0.119
0.097
0.0151
0.0001
0.009
0.622
0.0007
0.251
0.018
0.602
0.830
0.026
0.025
HK$
7.756
8.234
12.269
7.818
1.228
10.281
0.1553
0.0008
0.095
6.392
0.0069
2.576
0.182
6.189
8.530
0.263
0.254
RUPEE
49.925
53.006
78.977
50.329
7.903
66.181
6.437
0.0055
0.613
41.144
0.0447
16.583
1.173
39.837
54.908
1.693
1.633
RUPIAH
9137.95
9701.84
14455.47
9211.85
1446.44
12113.42
1178.21
183.03
112.13
7530.76
8.18
3035.31
214.63
7291.48
10049.94
309.87
298.88
YEN
81.492
86.521
128.914
82.151
12.899
108.027
10.507
1.6323
0.0089
67.159
0.0729
27.069
1.914
65.025
89.625
2.763
2.665
NZ$
1.213
1.288
1.920
1.223
0.192
1.609
0.156
0.0243
0.0001
0.015
0.0011
0.403
0.029
0.968
1.335
0.041
0.040
WON
1117.55
1186.51
1767.86
1126.58
176.90
1481.44
144.09
22.38
0.12
13.71
920.99
371.21
26.25
891.73
1229.08
37.90
36.55
RINGGIT PH. PESO
3.011
42.575
3.196
45.202
4.762
67.349
3.035
42.919
0.477
6.739
3.991
56.437
0.388
5.489
0.0603
0.8528
0.0003
0.0047
0.037
0.522
2.481
35.086
0.0027
0.0381
14.142
0.071
2.402
33.972
3.311
46.824
0.102
1.444
0.098
1.393
S$ S FRANC
1.253
0.909
1.331
0.965
1.983
1.438
1.263
0.917
0.198
0.144
1.661
1.205
0.162
0.117
0.0251
0.0182
0.0001
0.0001
0.015
0.011
1.033
0.749
0.0011
0.0008
0.416
0.302
0.029
0.021
0.726
1.378
0.042
0.031
0.041
0.030
TW$
29.490
31.309
46.650
29.728
4.668
39.092
3.802
0.5907
0.0032
0.362
24.303
0.0264
9.795
0.693
23.531
32.433
BAHT
30.574
32.460
48.365
30.821
4.839
40.529
3.942
0.6124
0.0033
0.375
25.196
0.0274
10.155
0.718
24.396
33.625
1.037
0.965
Source: ICAP Plc.
1.62
1.71
4.0
-10.2
21.4
-14.0
-3.0
-20.4
3.7
-3.9
16.4
-5.5
1.18
5.2
0.2
1.04
9.3
3.0
Closed
Weighted
1.56
-12.3
3478.36
6834.54
0.2
0.94
-17.7
CAC-40
4.2
18.61
-5.1
13.9
DAX
0.32
1.96
-13.6
France
10.733
57.22
8.5
15.2
Germany
3413.788
0.71
1.56
52-wk.
-12.4%
-7.2
4.1
34.83
2.17
0.33
10.2%
10.6
-10.2
0.20
2.24%
3.8
3.1
26.44
PERFORMANCE
Percentage change
Yr.-to-date
10.9
14.8
2970.38
£
0.632
0.671
0.2645
0.012282
0.22
2000.76
A$
0.942
0.1657
0.012275
81.42
SET
US$
2.6531
6.0333
81.47
0.009265
Taiwan
Cross rates
0.3769
0.1250
0.009259
107.93
0.012271
3.53
1956.19
Last
2.0014
7.9978
108.00
81.49
Thailand
19
23
17
20
17
19
13
18
14
15
15
15
0.6330
3-mos. forward
0.009257
Brazil
2.38%
2.25
2.29
2.67
2.96
3.04
2.47
3.04
2.84
1.44
2.62
1.44
1.1917
1-mo. forward
108.03
13.45
Manila Composite
yield*
ratio* Dows Jones Index
0.8391
MIDDLE EAST/AFRICA
Bahrain dinar
0.4996
Japan yen
836.16
13271.39
Kospi
1764.75 0.0005667
1578.36
Topix
Straits Times
In
U.S. dollars
4.3374
Indonesia rupiah
52-wk.
10.9%
Closed
India
Singapore
1.15%
1.48
Indonesia
Philippines
Per
U.S. dollar
0.1739
PREVIOUS SESSION
Index
KSE 100
In euros
Stock indexes from around the world, grouped by region. Shown in local-currency terms.
Region/Country
Pakistan
Per euro
0.4249
South Korea won
Follow the markets throughout the day with updated stock quotes, news and commentary at at
WSJ.com. Also, receive email alerts that summarize the day’s trading in Europe and Asia. To sign
up, go to WSJ.com/Email
EUROPE
2.3536
6-mos. forward
WSJ.com>>
In
U.S. dollars
5.7497
Venezuela bolivar
Sources: SIX Telekurs; WSJ Market Data Group
Per
U.S. dollar
Brazil real
Ecuador US dollar-f
98.11
2.9152
2.7919
2.3410
107.67
913.50
In euros
Argentina peso-a
Colombia peso
4.00
3.40
1,792.70 1,572.30
37.58
28.17
2,349.00 2,028.50
25,700.00 19,450.00
8,647.00 7,485.50
2,318.00 1,963.50
2,195.50 1,843.00
21,880
18,425
0.72
0.71
0.15
London close on March 8
1.78
0.84
0.33
1.66
0.64
18.3
1.6
9.9
-20.6
1.5
4.9
0.23
Sources: SIX Telekurs; WSJ Market Data Group
MSCI indexes
Developed and emerging-market regional and country indexes
from MSCI Barra as of March. 08, 2012
yield
ratio Morgan Stanley Index
LOCAL-CURRENCY
PERFORMANCE
Last
Daily
YTD
52-wk.
2.70% 14
ALL COUNTRY (AC) WORLD* 324.02
-0.32%
8.2%
-6.0%
2.80
14
World (Developed Markets) 1,270.77
-0.42
7.5
-6.0
2.10
21
World Small Cap
232.08
-0.81
9.7
-6.4
2.80
13
Kokusai (World ex-Japan) 1,269.30
-0.54
7.4
-5.1
3.60
14
EAFE
1,515.10 -0.08
7.3
-13.4
2.60
12
Emerging Markets (EM)
1,037.71
0.34
13.2
-6.3
3.10
12
AC ASIA PACIFIC EX-JAPAN 433.17
0.90
10.3
-6.5
2.70
12
AC Far East ex-Japan
487.85
0.78
11.7
-3.5
2.30
27
Japan
505.06
-0.71
13.2
-14.9
2.70
11
China
58.87
-0.93
11.3
-9.5
1.40
14
China A (China Domestic)
2,502.34
-0.71
11.2
-21.5
2.70
12
Hong Kong
11,342.72
0.02
13.9
-5.7
1.30
16
India
677.48 -0.04
13.4
-3.3
1.20
11
Korea
565.78
-0.97
8.9
1.5
2.80
17
Malaysia
575.03
-1.02
2.8
5.0
3.40
12
Singapore
1,563.44
-0.75
11.3
-5.2
4.20
15
Taiwan
279.77
-0.58
10.0
-8.7
3.10
12
Thailand
464.98
0.00
14.4
15.8
4.90
13
Australia
834.96
-1.39
1.5
-15.4
3.9
5.20
16
New Zealand
2.00
15
US BROAD MARKET
4.00
12
EUROPE
90.20
0.47
6.3
1,524.83
-0.76
8.0
1.4
89.95
0.59
5.9
-9.3
*Twenty-three developed and 26 emerging markets
Source: MSCI Barra
SCANNING THE GLOBE
DowJones
JonesIndustrial
IndustrialAverage
Average
Dow
NasdaqComposite
CompositeIndex
Index
Nasdaq
P/E: 14
s 44.46, or 0.35%
LAST: 12881.79
YEAR TO DATE:
OVER 52 WEEKS
s 24.52, or 0.84%
LAST: 2960.21
YEAR TO DATE:
OVER 52 WEEKS
s 664.23, or 5.4%
s 668.70, or 7.5%
Index
S&P 500 Index
P/E: 12*
P/E: 16
s 9.61, or 0.71%
LAST: 1362.24
YEAR TO DATE:
OVER 52 WEEKS
s 355.06, or 13.6%
s 208.49, or 9.6%
s 104.64, or 8.3%
s 42.22, or 5.2%
High
Close
Low
13500
3025
1375
13000
2900
1300
12500
2775
1225
12000
2650
1150
11500
2525
1075
t
50–day
moving average
11000
9
16
23 30 6
Jan.
13
20
27
3
Feb.
10
17
24
2400
2
Mar.
9
16
23 30 6
Jan.
13
20
27
3
Feb.
10
17
24
1000
2
Mar.
9
16
23 30 6
Jan.
13
20
27
U.S. stocks: most active...
Symbol
Volume,
in millions
Latest
AT&T
Alcoa
AmExpress
BankAm
Boeing
Caterpillar
Chevron
CiscoSys
CocaCola
Disney
DuPont
ExxonMobil
GenElec
HewlettPk
HomeDpt
Intel
IBM
JPMorgChas
JohnsJohns
KftFoods
McDonalds
Merck
Microsoft
Pfizer
ProctGamb
3M
TravelersCos
UnitedTech
Verizon
T
AA
AXP
BAC
BA
CAT
CVX
CSCO
KO
DIS
DD
XOM
GE
HPQ
HD
INTC
IBM
JPM
JNJ
KFT
MCD
MRK
MSFT
PFE
PG
MMM
TRV
UTX
VZ
7.6
9.6
2.1
78.1
1.9
3.1
2.7
14.6
2.6
2.5
1.6
9.3
16.0
4.9
4.6
14.3
1.3
10.2
5.6
3.2
10.5
5.5
19.2
14.7
2.2
1.1
1.0
0.9
6.8
$30.97
9.73
52.78
8.07
74.09
109.66
109.71
19.70
69.37
42.08
50.93
84.87
18.98
24.56
47.93
26.83
199.08
40.52
64.91
37.94
97.17
37.48
32.09
21.55
67.00
86.48
56.83
83.31
39.24
0.09
0.18
0.51
0.05
0.58
1.38
0.25
0.29
0.58
0.33
0.70
–0.96
0.21
0.20
0.54
–0.08
1.31
0.57
0.61
0.11
–3.01
0.17
0.25
0.18
0.42
1.01
–0.04
0.74
0.37
WalMart
WMT
3.1
59.59
0.13
Stock
CHANGE
Points
Percentage
0.28%
1.88
0.97
0.62
0.78
1.27
0.23
1.49
0.84
0.79
1.39
–1.12
1.12
0.82
1.14
–0.30
0.66
1.43
0.95
0.29
–3.00
0.47
0.79
0.84
0.63
1.19
–0.07
0.90
0.95
17
24
2
Mar.
ADRs of Asian companies*
Stock
Volume,
Symbol in millions
Latest
CHANGE
Points
Percentage
BankAm
SPDR S&P 500
AmeriCapAg
SPDR FnclSelSct
AmIntlGp
Dendreon
AnnalyCap
iShrMSCI Jpn
SprintNextel
PwrShrs QQQ
iShrRu2000
Microsoft
FordMotor
iShrMSCIEmrgMkt
OracleCp
BAC
SPY
AGNC
XLF
AIG
DNDN
NLY
EWJ
S
QQQ
IWM
MSFT
F
EEM
ORCL
78.1
50.1
45.1
38.8
38.0
21.9
21.8
20.6
20.3
19.8
19.3
19.2
18.2
17.2
16.6
$8.07
136.79
29.50
14.76
28.63
9.72
16.16
10.04
2.59
64.63
80.18
32.09
12.49
43.60
30.13
0.05
1.10
–0.77
0.13
–0.82
–1.15
–0.30
0.17
0.16
0.57
0.70
0.25
0.25
0.69
–0.09
0.62%
0.81
–2.55
0.89
–2.78
–10.58
–1.85
1.69
6.38
0.89
0.88
0.79
2.03
1.61
–0.30
TEAR
266.8
STLY
162.5
MWA 4,082.6
SQNM 5,545.3
OCLR 1,302.3
$2.76
4.37
3.37
4.24
4.49
0.50
0.79
0.52
0.58
0.60
22.12%
22.07
18.25
15.85
15.42
$2.23
20.49
9.72
4.91
29.03
–0.28
–2.51
–1.15
–0.56
–3.03
–11.12%
–10.91
–10.58
–10.24
–9.45
52-WEEK
High
Low
TearLab
StanlyFurn
MuellerWater
Sequenom
Oclaro
...Biggest losers
CLNT
30.7
CLVS
26.4
DNDN 21,866.9
SIGM
760.1
UGAZ
11.5
CleantechSolnsIntl
ClovisOncology
Dendreon
SigmaDsgn
VelocityShares3xLg
Volume,
Symbol in OOOs
Stock
$50.57 $22.02
35.08
16.16
14.80 10.75
9.98
1.70
165.96 100.95
53.34
43.51
104.59 62.54
37.58
8.79
20.29
12.89
29.06
14.33
74.25
46.12
22.50 15.30
2.89
1.77
9.24
3.75
5.40
4.01
51.50
24.14
21.14
14.18
5.69
4.00
8.12
0.75
36.96 29.86
37.46 29.28
55.00 35.74
36.80 24.47
67.50 46.08
24.98
7.10
58.99 32.77
5.78
2.12
26.32
21.25
271.94 141.27
125.36 82.50
Biggest gainers...
0.21
10
Sources: WSJ Market Data Group; Birinyi Associates
*Price-to-earnings ratio for the Nasdaq 100 Note: Price-to-earnings ratios are for trailing 12 months
DJIA component stocks
3
Feb.
CtripInt ADS
SonyCpADS
TaiwanSemi
SuntechPwr
Baidu ADS
ChinaMobile
BHPBilton ADS
FocusMediaHldg
SK Tele ADS
TataMtrs ADS
InfosysADS
ChinaUnicomHK
UtdMicro ADS
AU Optrncs
MitsuUFJ ADS
ICICI Bk ADS
KT Crp ADS
AdSemEg ADS
Ku6Media
TelkomIndo
ChunghwaTel
Netease.com
HDFC Bnk
PhlpLngDst
SilicnMotnTch
ChinaLfIns ADS
SemiMfgInt ADS
Nippon ADS
Cnooc ADS
ChinaPete ADS
CTRP
SNE
TSM
STP
BIDU
CHL
BHP
FMCN
SKM
TTM
INFY
CHU
UMC
AUO
MTU
IBN
KT
ASX
KUTV
TLK
CHT
NTES
HDB
PHI
SIMO
LFC
SMI
NTT
CEO
SNP
CHANGE
Latest Points Percentage
3,374.6 $24.20 –0.33
2,642.9 20.38 –0.04
2,503.7 14.53 0.13
2,032.5
2.90 –0.04
1,954.1 137.55
2.61
1,351.1 52.55 0.91
1,268.6 73.68 0.76
855.8 24.75 0.16
743.5 13.79 –0.15
655.1 27.37 0.32
529.9 57.76 0.70
513.7 18.50 0.44
497.9
2.59 0.02
435.9
5.26
0.11
404.5
5.09 0.10
386.5 35.05 0.36
372.4 14.48 –0.09
275.4
4.87 0.12
260.6
2.19 –0.17
260.4 30.54 0.13
250.0 30.77 –0.20
233.0 52.02
1.17
220.0 33.75 0.55
197.6 64.14 0.07
196.8 17.98 –0.03
196.4 40.83 0.40
181.3
2.64 0.14
173.5 23.51 –0.11
44.3 215.97 2.27
39.5 114.47 0.83
–1.35%
–0.20
0.89
–1.19
1.93
1.77
1.04
0.65
–1.08
1.18
1.23
2.44
0.77
2.14
2.00
1.04
–0.62
2.53
–7.20
0.42
–0.66
2.30
1.66
0.11
–0.17
0.99
5.60
–0.47
1.06
0.73
*Most active American depositary receipts tracked by Dow Jones
Source: WSJ Market Data Group
U.S. Treasury yield curve
Global government bonds
Latest, month-ago and year-ago yields and spreads over or under U.S. Treasurys on benchmark two-year
and 10-year government bonds around the world. Data as of 12 p.m. ET
Coupon
4.300
Maturity, in years
Austria* 2
SPREAD OVER TREASURYS, in basis points
Yield
Latest
0.721
41.1
TOTAL RETURN
5%
YIELD
Previous
Month Ago
Year ago
Previous
Month ago
Year ago
43.5
55.7
85.9
0.732
0.819
1.588
10
2.808
79.3
85.9
93.8
9.9
2.835
2.970
3.654
Belgium 2
0.886
57.7
59.0
107.7
199.5
0.887
1.339
2.724
4.000
10
3.417
140.2
151.5
151.3
78.0
3.491
3.545
4.335
3.125
Finland* 2
0.379
7.0
10.0
25.7
90.5
0.398
0.519
1.634
3.500
10
2.208
19.3
24.0
36.8
-4.2
2.216
2.400
3.513
2.000
France 2
0.456
14.7
19.3
30.7
106.8
0.491
0.569
1.796
3.250
10
2.787
77.2
85.2
86.8
10.9
2.828
2.900
3.664
0.250
Germany 2
0.134
-17.6
-16.0
-0.9
103.3
0.138
0.253
1.762
2.000
10
1.795
-22.0
-20.0
-4.6
-24.4
1.776
1.986
3.312
n.a.
Greece 2
n.a.
...
...
...
...
...
...
...
One year ago
s
3.650
4.250
4
3
2
1
s
Country/
The curve shows the yield to maturity of current bills, notes and bonds; all data as of 3 p.m. ET.
Wednesday
0
1
3
6
month(s)
1
2 3 5 710
years
maturity
30
Ryan Index
Yield to
maturity
Modified
duration
30-year Treasury
10-year Treasury
7 Year Treasury
Five-year Treasury
Ryan Index
3 Year Treasury
Two-year Treasury
1 Year Treasury
Six-month Treasury
Ryan Cash Index-a
Three-month bill
3.114%
1.970
1.366
0.848
1.335
0.413
0.301
0.183
0.142
0.115
0.081
19.33
8.97
6.63
4.86
7.45
2.93
1.97
1.00
0.50
0.46
0.25
One-month bill
0.056
0.08
Month
to-date
Quarter
to-date
–0.22 %
0.19
0.31
0.17
0.09
0.04
0.01
–0.01
–0.01
...
...
Year
to-date 12-month
–3.49 %
0.47
0.37
0.45
–0.35
–0.06
0.08
–0.04
–0.03
–0.02
...
–3.49 %
0.47
0.37
0.45
–0.35
–0.06
0.08
–0.04
–0.03
–0.02
...
35.85 %
19.67
15.62
10.37
14.26
4.01
1.63
0.47
0.25
0.22
0.12
0.01
0.01
0.04
...
a-Performance of a cash investment
Source: Ryan ALM
n.a.
10
n.a.
...
...
...
...
...
...
...
2.250
Italy 2
1.831
152.2
150.6
268.9
197.0
1.803
2.950
2.699
5.000
10
4.788
277.3
294.9
346.2
133.8
4.925
5.494
4.893
1.000
Netherlands 2
0.304
-0.6
3.2
3.6
81.8
0.330
0.298
1.547
U.S.
3.25%
3.25%
0.44321%
0.85813%
2.250
10
2.260
24.5
27.8
26.6
4.1
2.254
2.298
3.597
Canada
3.00
3.00
Three month
0.83843
1.12438
Three month
5.450
Portugal* 2
11.539
1123.0
1137.3
1393.3
381.8
11.671
14.195
4.547
Japan
1.475
1.475
Six month
1.18929
1.43438
Six month
0.5900
0.4900
Britain
0.50
0.50
One year
1.54714
1.87563
One year
0.9000
0.8000
3.850
10
13.557
1154.1
1157.4
1100.8
399.4
13.550
13.040
7.549
ECB
1.00
1.00
6.750
Spain 2
2.267
195.7
203.0
214.2
251.4
2.328
2.404
3.243
Switzerland
0.51
0.55
Euribor
One month
303.4
311.2
291.1
191.3
5.088
4.943
5.468
4.75
0.92000
U.S. discount
0.75%
0.75%
5.049
4.25
1.17200
10
Australia
Three month
3.500
Hong Kong
5.00
5.25
Six month
1.22900
1.48700
Fed-funds target
0.00
0.00
2.250
U.K. 2
0.424
11.5
14.0
16.2
65.0
0.437
0.424
1.379
One year
1.56100
1.93800
Call money
2.00
2.00
3.750
10
2.066
5.0
8.3
15.5
11.7
2.058
2.187
3.672
0.310
...
...
...
...
0.298
0.262
0.729
0.30214%
0.16929%
U.S. 2
0.24275%
0.25900%
0.250
Three month
0.47455
0.30950
Three month
0.40143
0.23893
Overnight repurchase rates
U.S.
0.17%
2.000
10
2.015
...
...
...
...
1.976
2.032
3.555
Six month
0.74320
0.46250
Six month
0.54143
0.30000
One year
1.05440
0.78650
One year
0.83214
0.63143
Key money rates
Latest
Source: Tullett Prebon, except * marked countries from ICAP plc
52 wks ago
Prime rates
Libor
One month
Latest
Euro Libor
One month
Hibor
One month
0.51100%
52 wks ago
Offer
Eurodollars
One month
0.90400%
Bid
0.1100%
0.2500%
0.3900
0.2900
Latest
52 wks ago
0.14%
U.K. (BBA)
0.495
0.537
Euro zone
0.13
0.77
Sources: WSJ Market Data Group, SIX Telekurs, ICAP
MARKETS LINEUP
Moving the
markets
Asian index movers…
At right, Japan’s benchmark stock index
and the biggest movers among the
larger Asian stocks indexes and stocks
Thursday. Below each index are its most
actively traded stocks. The charts show
the percentage change in each index’s or
stock’s value, rather than the point
change, for purposes of comparison. The
index level or stock price is indicated on
each axis. All indexes and stocks are
shown in local currency terms.
Nikkei Stock Average
Hang Seng
Japan
Hong Kong
s
9768.96
2.01% or 192.90
Stocks snapped a three-day losing
streak, as exporters got a boost from a
drop in the yen, driven by progress in
Greece’s debt plan. Nikon rose 4.3%.
Also, receive emails that summarize
the day’s trading in Europe and Asia.
To sign up, go to WSJ.com/Email.
Stock
Mizuho Fin
Volume
in millions
Close
144.27
135
Change
Net
s
21987.89
1.31% or 284.85
Stocks rose for the first time in four
days. Metal stocks gained on rises in
metals prices. Jiangxi Copper climbed
1.9%; Zijin Mining advanced 0.9%.
South Korea
s
2000.76
0.94% or 18.61
Financials, shipbuilders and construction
firms gained after being battered in recent sessions on growth fears. Hyundai
Engineering & Construction rose 2.7%.
30000
36000
3000
12500
25000
30000
2500
10000
20000
24000
2000
7500
15000
18000
1500
5000
Follow the markets throughout the
day, with updated stock quotes, news
and commentary at WSJ.com.
Optimism over Greece’s debt swap
lifted stocks. Developers gained on bargain hunting. Cheung Kong rose 2.9%
after dropping 6% since Monday.
Kospi
China
15000
M A M J J A S O N D J F
2011
2012
WSJ.com>>
s
CBN 600
20900.73
1.32% or 272.95
%
10000
2011
2012
Stock
Volume
in millions
Close
5.25
3
2.27
Ind&Comml
291.90
12000
2011
2012
Change
Net
%
Stock
Volume
in millions
Close
0.05
0.96
TCL
206.68
2.42
Change
Net
Stock
%
…
1000
2011
2012
…
SsangyongMaterials
Volume
in millions
Close
Change
Net
41.20
3,045.00 -535.00
%
–14.94
MitsuUFJFin
88.31
415
11
2.72
BankofChina
240.02
3.25
0.06
1.88
FounderSecurities
181.19
5.05
0.19
3.91
WooridulPharm
36.21
1,650.00
90.00
5.77
NomuraHldgs
63.88
378
17
4.71
ChinaConstructnBk 236.43
6.26
0.12
1.95
SuningApplianceA
153.67
10.18
0.08
0.79
WooridulLifeSci
24.46
2,125.00 -70.00
–3.19
TEC&Co
23.15
215.00
-6.00
–2.71
ShinilIndustrial
18.15
1,060.00
-75.00
–6.61
MazdaMtr
60.91
128
2
1.59
AIAGroup
75.80
27.40
–0.10
–0.36
ChinaUtdNtwkComms
134.85
4.63
…
…
NipponSheetGlass
34.42
128
1
0.79
ChinaPetro&Chem
64.27
8.90
0.10
1.14
ChinaStateConstrA
131.69
3.26
0.03
0.93
Asian stocks in the news
LG Electronics Inc.
Korea
Nikon Corp.
Want Want China Holdings Ltd. Ping An Insurance (Group) Esprit Holdings Ltd.
90,700 won Japan
¥2,241
s 3.9% or 3,400 won
Hong Kong
s 4.3% or ¥93
HK$8.76
Hong Kong
s 4.7% or HK$0.39
HK$62.35 Hong Kong
s 5.1% or HK$3.05
Hopes for strong first-quarter results on
robust smart-phone sales lifted shares.
The yen’s decline amid progress in Greek
debt talks boosted Japanese exporters.
The stock is up 16% in three session on a
better-than-expected earnings report.
Asian financial shares bounced back
after losses earlier in the week.
In won
In yen
In Hong Kong dollars
150000
3500
120000
2800
60000
1400
4
40
N.A.
N.A.
1.5
-8.3%
-17.2%
Transurban Group
82
32.49
1.3
Personal & Hshld Gds
Nikon Corp.
0.9% -0.7%
4.3% 2.6%
In Australian dollars
In yen
1.3%
-0.9%
Price-to-earnings ratio
Earnings per share, past four quarters
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Food & Beverage
Want Want China Holdings Ltd.
1.0% 0.1%
4.7% 16.8%
3.3%
36.9%
Korea
1000000
23,650 won
6
M A M J
2011
N.A.
N.A.
N.A.
J
A S O N D J F
2012
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Insurance
Ping An Insurance (Group)
2.1% -3.4%
5.1% -5.2%
-17.2%
-27.4%
Korea
t 1.7% or 400 won
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Retail
Esprit Holdings Ltd.
0.8% -0.5%
5.6% -0.7%
4.0%
-51.7%
Sharp Corp.
72,200 won Japan
¥520
t 2.2% or 1,600 won
t 4.8% or ¥26
Defensive shares like utilities weakened
on an upbeat day for the market.
The tobacco maker fell as investors sold
defensive shares on optimism about
Greece’s debt deal.
The stock is down 21% this year.
In won
In won
In yen
50000
N.A.
N.A.
N.A.
125000
1250
100000
1000
6
600000
30000
75000
750
4
400000
20000
50000
500
200000
2011
2012
62
0.09
5.1
-1.2%
0.2%
A S O N D J F
2012
40000
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Indus Gds & Svcs
Transurban Group
N.A.
N.A.
N.A.
J
800000
S O N D J F
2012
Dividend yield
20
M A M J
2011
8
2
A
-8.3%
17.9%
¥526,000
The stock is up 6.3% this year.
J
Dividend yield
t 1.1% or ¥6,000
Domestically exposed companies fell as
disappointing Australian jobs data
followed weak GDP figures.
M A M J
2011
A S O N D J F
2012
Korea Electric Power Corp. KT&G Corp.
Japan
t 0.9% or A$0.05
10
J
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
KDDI Corp.
A$5.56
2
M A M J
2011
Dividend yield
42
30
18
700
J A S O N D J F
2012
54
80
60
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Australia
8
6
M A M J
2011
0.9% -0.7%
3.9% 6.2%
100
2100
30000
LG Electronics Inc.
The stock had lost 10% from Monday to
Wednesday.
90000
2011
2012
Dividend yield
10
HK$18.24
s 5.6% or HK$0.96
-8.6%
5.9%
10000
2011
2012
11
58537.60
2.5
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Telecommunications
KDDI Corp.
0.5%
-1.1%
-1.2%
0.8%
2.3%
-5.2%
25000
2011
2012
N.A.
N.A.
N.A.
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Utilities
Korea Electric Power Corp.
0.5%
...
-1.7% -5.8%
-21.0%
-13.8%
250
M A M J
2011
N.A.
N.A.
4.8
J A S O N D J F
2012
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
KT&G Corp.
0.9% -0.7%
-2.2% -1.4%
-8.3%
23.4%
50
11.32
3.9
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Sharp Corp.
0.9% -0.7%
-4.8% -6.1%
-8.3%
-36.3%
HEARD ON THE STREET
FINANCIAL ANALYSIS & COMMENTARY
Email: [email protected]
A Leaky LNG Plank
Perhaps one good thing to come
out of last year’s disasters in Japan
was a newfound drive to take a serious look at cutting costs in the nation’s gold-plated power-generation
system. But one plank of that—a
plan to import liquefied natural gas
from the U.S. over the long term—
may not be the panacea to lower
costs that its proponents argue.
At present, the Japanese government, utilities and trading companies are trying to secure U.S. LNG,
while changing the pricing model
that ties LNG prices to crude-oil
costs. The current formula makes
Japan’s LNG imports about five
times more expensive than domestic
U.S. natural-gas prices, based on the
Henry Hub benchmark.
That expense and the cost-plusprofit pricing used by power monopolies have added to the litany of burdens—including the strong yen—
facing Japanese corporations.
Indeed, commercial electricity rates
are at least double those of South
Korea, Taiwan and the U.S., says the
International Energy Agency.
So why is the scenario less rosy
than at first glance, even though
LNG accounts for about one-fourth
of Japan’s electricity needs?
First, there is a concern in Tokyo
Gas Hubbub
Prices of three energy sources
Oil
Japanese
liquefied
natural gas
U.S. natural gas*
$20 per million BTU
15
10
5
0
2001 ’02
’04
’06
’08
’10
*Henry Hub
Source: BP Statistical Review of World Energy 2011
that Washington may not approve
more exports—or later would interrupt the LNG flow—because of national-security concerns or for ecological reasons. Already, some
members of Congress and LNG customers are arguing that expanded
exports of natural gas could reduce
domestic supplies and send prices
higher for U.S. users.
Another issue is that Japan,
which doesn’t have a free-trade
agreement with the U.S., must undergo a stricter authorization process to get LNG shipments than do
free-trade signatories.
Moreover, even when the U.S. is
able to export LNG to Japan, beginning in 2018, imports could account
for only 10% to 20% of Japan’s LNG
needs, says Fereidun Fesharaki,
chairman of oil-and-gas consultancy
Facts Global Energy. At best, only
half of the imports would be based
on the U.S. Henry Hub price, he said.
For Japan, the world’s No. 1 LNG
importer, the lure is understandable.
Even adding the expense of supercooling the natural gas, liquefying
and shipping, the landed cost in Japan of that Henry Hub-based price
model could still be about one-third
less than the current pricing system.
Still, diversifying LNG sources
and trying to gain some leverage on
pricing and input costs at utilities
more than makes sense.
Energy policy clearly isn’t something that changes overnight, but
Tokyo is on the right track—at least
for LNG. Japan needs to try to negotiate cheaper contracts now and
overcome any obstacles so that one
day LNG also means “lower natural
gas” prices.
—James Simms
WSJ.com/Heard
Japan’s GDP Shows
Ephemeral Flavor
Once again, Japan’s economic
statistics aren’t quite what they appear to be.
A closer look at the nation’s
fourth-quarter growth indicates that
the jump in capital expenditures,
which usually accounts for about
15% of the economy, is out of line
with other statistics, such as shipments of factory equipment and machinery orders.
As such, Japan’s gross domestic
product for the year could be overstated because of the higher jumping-off point. That factor could lift
2012’s GDP by 0.3 percentage point,
says Morgan Stanley MUFG.
The continuing differences between the preliminary and revised
data could also do some damage to
corporate and investor confidence in
the GDP data. Uncertainty regarding
the nation’s overall statistics also
make it difficult for policy makers
when deciding how to adjust economic policy.
As released Thursday, Japan’s
price-adjusted GDP shrank at an annualized rate of 0.7% in the Octoberto-December period versus the previous quarter, a much better
performance than the initial 2.3%
contraction. The upgrade was
mainly because capital expenditures
were revised upward to a 4.8% jump
from a preliminary 1.9% increase.
But fourth-quarter figures for
capital-goods shipments show only
a 1% increase from the previous period and a fall of 0.7% when excluding transportation equipment.
In addition, core machinery orders, an indicator of spending on
plants and equipment in the following quarters, posted a 2.5% increase
in the second quarter versus the
prior period and a 1.5% rise in the
third. Both of those are more in line
with Japan’s initial GDP capex figure.
Despite this, Japan’s economy
appears on a recovery track—and
could expand faster than other developed economies in coming quarters—because of postearthquake reconstruction spending and state
incentives for buying fuel-efficient
cars.
With all the recent disasters, Japan’s statistics need to provide a
clearer picture of the economy more
than ever.
—James Simms
Apple iPads Its Portfolio,
With More in the Pipeline
The name is odd, but the product
should get the job done.
Apple Chief Executive Tim Cook
on Wednesday delivered a workmanlike upgrade to the company’s
tablet franchise, with a product curiously called “the new iPad” instead of, perhaps, iPad 3. The “new”
version has better screen resolution,
a more powerful camera, a faster
chip and the ability to connect to
faster fourth-generation wireless
networks. That should keep Apple
well ahead of rival tablet makers.
Analyst Neil Mawston of Strategy Analytics estimates Apple will
sell 50 million iPads this year, up
23% from the prior year. Nearest
competitor Samsung is expected to
sell just eight million. Mr. Mawston
says growth will be even higher if
new “ultrabook” PCs don’t eat into
the tablet business.
For all of the hoopla around the
latest product upgrade, though,
other, forthcoming devices should
have investors more excited. Later
this year, Apple is expected to deliver the next version of the iPhone.
It may come with a chip that is
compatible with China Mobile’s
network. That could mean Apple’s
flagship device will soon be officially available at the largest wireless carrier in the world.
In tablets, Apple is working with
Asian component suppliers to test a
tablet with a smaller screen. An
“iPad Mini,” if Apple releases one,
could compete with Amazon.com’s
Kindle Fire.
Still, Apple didn’t get where it is
through iterations of existing products—it conquers new frontiers. As
good as the new iPad may be, Mr.
Cook has yet to show he can do
that. Apple’s existing set-top box
aside, TV awaits. —Rolfe Winkler
Getty Images
Apple CEO Tim Cook unveils ‘the new iPad’ in San Francisco.
Technology helps create the world that we dream of.
Hyundai Heavy Industries pursues the happiness of the
global community with its advanced technology.
In the realm of heavy industries, our technology is everywhere,
improving the quality of life and happiness of everyone.
We are building a world of shared dreams.
LNG Carrier
Drillship
Containership
Published by Dow Jones Publishing Company (Asia). Printed in Hong Kong by Superflag Printing and Communication Ltd., 1/F, 8 Chun Ying St., Tseung Kwan O Ind. Est., Tseung Kwan O, NT. Printed in Indonesia by PT Gramedia Printing Group, Jalan Palmerah Selatan 22-28, Jakarta 10270. Printed in Japan by Yomiuri Shimbun, 1-7-1, Otemachi, Chiyoda-ku, Tokyo 100-8055. Printed in Korea by JoongAng Ilbo. 7, Soonwha-Dong, Chung-Ku, Seoul 100-130. 1997 June 04 Registration no.: SeoulKA00020 (Daily Newspaper), Publisher/Editor/Printer: Song, Pil-Ho.
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Deluxe screening rooms
in private homes are
becoming Hollywood’s
most exclusive
social networks.
BY LAUREN A. E. SCHUKER
W
Top, the screening room of Jarl and Pamela
Mohn, who hold a film festival every year.
Michal Czerwonka for The Wall Street Journal (3)
hen Brett Ratner, the director behind the “Rush Hour” franchise,
presses a button, the lights in his
living room—part of a Beverly Hills estate
once owned by Ingrid Bergman—go dim.
Shades creep across the windows, shrouding
a Rodin sculpture in darkness. As an 18-footwide screen descends from the wood-paneled
vaulted ceiling, part of the dark wood floor
falls away, revealing an enormous speaker
that rises from the basement below.
Mr. Ratner, who regularly watches movies
with pals Brian Grazer, Edward Norton and
Eddie Murphy, spent six months digging
through his home’s concrete foundation for
the speaker elevator alone. In all, he sank
about half a million dollars into renovating
his tricked-out private screening room, an increasingly important fixture in Hollywood.
Steven Spielberg recently finished building his new screening facility at his Pacific
Palisades home. With a touch of his iPad, he
can unlock a hidden door that opens onto a
corridor leading to the projectionist booth
and lobby. In his 1940s Art Deco-styled
screening room, with frosted-glass sconces,
cherry-wood ribbing and fluted bronze panels, Mr. Spielberg sits in the back, on the
highest tier of the stadium seats, directing
the entire experience with his remote.
Jarl Mohn, who created E! Entertainment
Television, and his wife have held their own
film festival every year at their Brentwood
home between Christmas and New Year’s.
Dubbed “MohnDance,” it screens a new firstrun film for about 10 people each night for
seven nights. This holiday season, the roster
included “Tinker Tailor Soldier Spy,” “Mission: Impossible—Ghost Protocol,” “Hugo”
and “Young Adult.”
“Our screening room is the centerpiece of
our social life,” says Mr. Mohn. People familiar with the room say Mr. Mohn spent more
than $2 million furnishing and equipping it.
The first private screening rooms were
built in the 1930 and 1940s for the original
movie moguls to watch films they and their
competitors made. But in recent years, as
digital projection has replaced the need to
hire a projectionist and run 35-millimeter
film, there has been a screening-room building boom. As DVDs, video on demand and
movies on the Web proliferate, the idea of
watching a new movie the old-fashioned way
has taken on new allure. Exclusive private
screenings have become an increasingly essential component of both the social and
business culture of Hollywood.
Please turn to next page
[ INSIDE ]
FASHION & STYLE
A portrait of the painter
as a sartorialist W8
GOLF JOURNAL Not at home
on the range W3
AUTOS Why less is more with the
new BMWs W16
W2 | Friday - Sunday, March 9 - 11, 2012
WEEKEND JOURNAL
Hollywood’s Most Exclusive Cinemas
Hollywood’s Secret
Screener List
Bill Gates is a member, as are Tom Cruise
and Derek Jeter. In Hollywood, one coveted
prize is a spot on the “Bel-Air circuit,” a list
of VIPs who are allowed to borrow prints
of movies the weekend they hit theaters
(and sometimes earlier). Each of the six
major Hollywood studios has one, and the
lists are highly similar with some small
variations. Below is a sampling of the
“circuit,” compiled from several lists
supplied by people close to the studios.
Michal Czerwonka for The Wall Street Journal (4)
Ben Affleck, actor
Prince Saud al-Faisal, son of late King
Faisal
Paul Allen, Microsoft co-founder
Woody Allen, director
Marc Andreessen, Netscape co-founder
Judd Apatow, director
Irving Azoff, chairman, Live Nation
Warren Beatty, actor
Ron Burkle, businessman
James Cameron, director
George Clooney, actor
Robert De Niro, actor
Dr. Dre/Andre Young, rapper/producer
Petra Ecclestone, British heiress
Michael Eisner, former Disney chief
Ari Emanuel, super agent
Roy Furman, vice chairman of Jefferies & Co.
Larry Gagosian, superstar art dealer
Bill Gates, Microsoft co-founder
David Geffen, entertainment mogul
Samuel Goldwyn Jr., producer, son of
movie mogul Samuel Goldwyn
Brad Grey, CEO of Paramount Pictures
Tom Hanks, actor
Hugh Hefner, Playboy magnate
Dustin Hoffman, actor
Alan Horn, ex-president of Warner Bros.
Jimmy Iovine, music executive
Derek Jeter, New York Yankee
Jeffrey Katzenberg, CEO of DreamWorks
Animation
Kirk Kerkorian, casino magnate
Nicole Kidman, actress
Calvin Klein, fashion designer
Sherry Lansing, former CEO of Paramount
Pictures
John Lasseter, Pixar and Disney Animation
chief creative officer
David Lynch, filmmaker
Barry Manilow, singer/songwriter
Frank McCourt, owner of the Los Angeles
Dodgers
Ron Meyer, Universal Studios president
Barry Meyer, CEO of Warner Bros.
Les Moonves, CEO of CBS Corp.
Tommy Mottola, music executive
Rupert Murdoch, CEO of News Corp.
(which owns The Wall Street Journal)
Eddie Murphy, actor/comedian
Michael Ovitz, co-founder of CAA
Amy Pascal, Co-Chairman Sony Pictures
Entertainment
Ron Perelman, businessman
Sumner Redstone, founder, Viacom
Stephen Schwarzman, CEO of privateequity firm Blackstone Group
Martin Scorsese, director
Ryan Seacrest, host of “American Idol”
Sylvester Stallone, actor
Barbra Streisand, singer, actress
Harvey Weinstein, producer/founder,
Weinstein Co.
Continued from previous page
For people in the entertainment world,
having an elaborate private screening room
can be a tool for entertaining business associates, building buzz and ginning up awards
support. The ability to show a film at home
before or when it comes out in theaters requires getting on an exclusive list, often referred to as the “Bel-Air circuit.” Each of the
six major Hollywood studios has its own list,
but their rosters include mostly the same
cast of characters, with a few variations.
They spell out the roughly 300 to 500 power
brokers, mostly in Los Angeles—from Mr.
Spielberg and actor George Clooney to rapper Dr. Dre and businessman Ron Burkle—
who are eligible to receive films from the
studios on, or before, opening weekend.
For inclusion, one needs a strong track record in the entertainment business. Movie
stars have an automatic entrée. The occasional sports superstar is included: New York
Yankees shortstop Derek Jeter was recently
added to the lists at some studios. Studios
refer to New Yorkers on their lists (Woody
Allen, Harvey Weinstein) as the “subway circuit”; the Florida crew is the “gator circuit.”
Once on the list, members can make requests to borrow a print or, increasingly, a
digital copy; each weekend, a top studio official approves each request. At Paramount,
for example, Chief Executive Brad Grey and
Vice Chairman Rob Moore—the studio’s two
highest-ranking executives—personally handle each one. At Weinstein Co., the Weinstein
brothers approve requests.
The cost of a top-of-the-line screening
room averages $500,000 but can run up to
$2 million or more with all the bells and
whistles, according to Joseph Cali, a highend home-theater designer and installer who
built the screening rooms for George Clooney, Matt Damon and Tom Cruise. In Hollywood, few on the circuit have a screen
smaller than 14 feet in width, says Mr. Cali.
Most are 16 to 18 feet.
Standard screening room accoutrements
are stadium-style seating, cutting-edge
acoustics, ergonomic couches and automated
shade coverings as well as fancy candy offer-
ings. The room of restaurateur Michael
Chow, best known for his eponymous restaurant chain Mr. Chow, shares a wall with his
pool to create an aquarium effect. Often, the
same companies that build screening rooms
for the major studios are constructing these
spaces.
The screening-room designer most in demand is Jeff Cooper, an MIT-educated architect and acoustic engineer who has built facilities for George Lucas, Martin Scorsese,
Francis Ford Coppola, Robert Zemeckis and,
most recently, Mr. Spielberg.
Mr. Cooper is currently building a 49-seat
screening room for “Transformers” franchise
director Michael Bay in Bel-Air. To create a
starry sky that appealed to Mr. Bay’s love of
special effects, Mr. Cooper is topping the theater with an elliptical dome and fiber-optic
stars.
‘If you want people in town
to chat up a movie, this is the
best way to do it,’ says one studio
marketing executive.
To extend the Bel-Air circuit to a larger
group and possibly profit from it, a start-up
called Prima Cinema is working with the studios to roll out a service that will make firstrun studio films available the day they hit
the big screen. Available in a few months, the
service will allow homeowners with a highend digital-projection screening room (who
also pay $35,000 to install Prima’s highly secure digital delivery system) to watch firstrun films for an additional $500 each. The
service won’t deliver movies before their
opening date.
Most owners of screening rooms tend not
to visit other people’s spaces. The most coveted screening rooms to get into are often
the most private; few have seen Mr. Spielberg’s space, widely considered one of the
most beautiful. Tom Cruise’s sitting room in
his Beverly Hills home, which his interior
decorators Alexandra and Michael Misczynski designed, transforms into another
sought-after screening room. Mr. Cruise
screens films most weekends, but few outsiders are invited, according to people close to
Mr. Cruise who have visited the space. With
the touch of a button, the room—which overlooks Mr. Cruise’s garden—turns dark, a
screen falls in front of French doors and
about 20 different speakers and subwoofers
hidden behind fabric walls turn on.
Invitations can be strategic; the owner
wants a business associate to see a particular
film or is doing a favor by promoting a film
for a studio. Some studios will ask prominent
screening-room owners to host so-called
tastemaker screenings, where the owners invite influential friends to come see a particular film. “The Artist,” which won several Oscars, including best picture, was also
screened in rooms across town this year,
these people add.
“If you want people in town to chat up a
movie, this is the best way to do it,” explains
one studio marketing executive, referring to
tastemaker screenings.
Food is one of the rare polarizing issues.
Some strictly forbid it; Mr. Scorsese, who
maintains a private screening room in his
New York office, allows guests to bring in
only water, according to a person close to the
director. Sherry Lansing, who built a room in
her home after leaving her post as chief executive of Paramount Pictures, says she allows both water and candy.
Phil Rosenthal, the creator of “Everybody
Loves Raymond” whose new film “Exporting
Raymond” just hit HBO, started hosting Sunday night screenings in the 1970s for his
high-school buddies with a 19-inch color television and take-out pizza. Since then he has
upgraded: Five years ago, when he installed a
screening room at his Hancock Park home, he
also built a wood-burning pizza oven. A professional chef cooks the pizza before the
movie.
“It’s like programming your own movie
theater—you choose the movie, the food, the
time,” Mr. Rosenthal says. “But you also get
to choose everyone in the audience.”
Mitch O’Connell
Top left, Brett Ratner and his personal
screening room; above, Mr. Chow and his
aquarium-like space.
Friday - Sunday, March 9 - 11, 2012 | W3
SPORTS
The Wrong Way to Improve Your Game
Why Much of the Work That Golfers Do Doesn’t Help Them Get Better; ‘the Illusion of Competence’
[ Golf Journal ]
You’re on the
range, pounding
balls, and suddenly
golf seems easy. All
the parts of your
swing sync and
you start striping one career-best
drive after another. “By golly, I’ve
got it,” you say to yourself. You
can’t wait to get to the course.
Science has a name for this exalted state, but unfortunately it’s
not “flow” or “in the zone.” It’s
“the illusion of competence,” and
the odds are it’s doing your golf
game more harm than good.
You may think you’ve got it,
but you haven’t. More than most
people realize, the range has little
to do with actual golf. “After most
sessions on the range or even lessons, golfers haven’t really
learned anything, if by learning
you mean making a skill usable,
durable and automatic in other
contexts,” said Fran Pirozzolo, a
Ph.D. in neuropsychology who has
worked on performance training
with PGA Tour pros, elite athletes
from football and baseball, Navy
SEALs and NASA astronauts. By
“other contexts” he means playing
in the pressure of competition,
but also driving off the first tee in
front of friends and hitting off a
downhill lie.
We golfers, it turns out, are
bad at assessing the state of our
skills. We are even worse at understanding how our brains work
when we try to make changes, and
most instructors aren’t much help,
either. “Our golf culture is set up
to pass along knowledge in halfhour or one-hour lessons. In that
time, a teacher can fix a shank or
get somebody to slice the ball
less, and everyone leaves the lesson happy. But there’s not much
of a system in place to transfer
that knowledge onto the course,”
Pirozzolo said.
Elite athletes know themselves
better. “That’s why Tour pros talk
about needing months or even a
year to integrate a swing change.
Eighteen-handicappers almost
never understand that,” he said.
Drawing heavily on the latest
research in neuroscience, Pirozzolo is working with Steven Levitt, a professor of economics at
the University of Chicago and the
co-author of “Freakonomics,” on a
golf research project to determine
which transfer techniques work
and which don’t.
One technique that clearly
doesn’t work is “massing”—that
irresistible urge most golfers have
to hit interminable balls at the
range until, maybe, they get it
right for a short spell. “Massing
can be useful for introducing new
skills because you have to create a
basis. But fairly quickly, if you
want to progress and retain what
you’ve learned, you need more advanced techniques,” Pirozzolo said.
A lot of these can be uncomfortable, since they involve frequent
failure. The good news is they can
take less time than the random
ball-whacking many golfers are already doing. Some can be adapted
into games against other players,
especially short-game drills.
John Fraser
BY JOHN PAUL NEWPORT
“Interleaving” is one example.
That’s neuroscience-speak for constantly alternating clubs, drills
and targets. In one experiment
that Levitt and Pirozzolo conducted, the goal was to increase
proficiency on 110-yard wedge
shots. One group of participants
hit 90 shots to targets exactly that
far away. A second group hit 30
shots to 70-yard targets, 30 shots
to 110-yard targets and 30 shots
to 120-yard targets. In the end,
the second group substantially
outperformed the first group in
hitting to 110-yard targets, even
though they had hit only a third
as many shots to that distance.
Generally speaking, the best
practice techniques are those that
lay down multiple, vivid memory
patterns in the brain. Sometimes
that entails introducing “desirable
difficulties” such as simulated pressure, hitting in strong winds and
from bad lies. Practicing in short
sessions across many days is more
effective than “cramming” the
same work into a single session,
opening more avenues for recall.
Not all golfers are willing to
put themselves through such grief,
of course, even though they’d ultimately enjoy the game more if
they did. (A recent study by the
golf research firm Pellucid determined that for each stroke lower a
midhandicap golfer scores, he or
she will play, on average, 10%
more rounds because of increased
enthusiasm.)
A major reason for players’ reluctance to make the effort is
their frustration with previous
lessons, when what they learned
on the practice tee (or thought
they learned) didn’t stick. “Golfers
are being sold a lie when they’re
told they’ll get better with 30
minutes of swing analysis,” said
Rick Jensen, a sports psychologist
who argued in his book “Easier
Said Than Done” that simple lessons aren’t enough. “Golfers need
coaches like in other sports,
someone to give them drills, monitor their progress, send them out
to scrimmage and give them feedback,” he said.
The intensive coaching model
that works for Tour pros is too expensive for most amateurs, but
Jensen said that if players are better educated about what it really
takes to improve, they and their
teachers can better decide how to
use the time and money that is
available. There are signs that this
philosophy is gaining steam.
Top-50 instructor Michael Hebron
now teaches almost entirely in
light of the latest brain-science research. “You never hit the same
shot twice on a golf course, so
why should you on the range?” he
said. Golftec, a national chain of
teaching centers, sells most of its
lessons in multimonth or yearlong
packages that include gym-membership-type access to video-enhanced practice facilities.
Even for local teaching pros,
there’s a better way, said John
Kennedy, the director of golf at
Westchester Country Club in Rye,
N.Y. The starting point is establishing realistic long-term goals
that are within the student’s budget and physical limitations. “A
45-year-old 20 handicapper in OK
shape, with a lesson every other
week or so, should probably be
able to get down to a 12 handicap
in one season. But he’d have to really commit to his teacher and follow through on drills and proper
practice and the short game,”
Kennedy said. “It’s doable and enjoyable. But people have to be told
the truth. And they have to really
want to get better in their heart.”
Email John Paul at
[email protected].
CULTURE & ENTERTAINMENT
The Little Olsen Sister Gets Her Close-Up
BY RACHEL DODES
Someday soon, discussions
about one of the hottest actresses
in movies won’t start with her tabloid-fodder twin sisters. After a
turn as a cult member in last year’s
indie hit “Martha Marcy May Marlene,” Elizabeth “Lizzie” Olsen, age
23, has been cast in major roles in
several more films, two of which
premiered at the Sundance Film
Festival in January. She’s reportedly in talks to star in Spike Lee’s
coming “Oldboy.” She’s also the
younger sibling of Mary-Kate and
Ashley Olsen, the child actresses
turned gossip subjects who parlayed their TV fame into successful
careers in fashion. Their “Elizabeth
and James” clothing line is named
after her and her older brother.
Her latest project may be her
most technically challenging yet:
“Silent House” was shot in real
time, meaning that several long
takes were cobbled together to
make the finished film, with no editing. “Lizzie had to take us
through this arc—what you see is
what you get, because you can’t fix
it in the cutting room,” says co-director Chris Kentis, whose first
film, with partner Laura Lau, was
2003’s “Open Water,” a thriller
about a couple stranded in sharkinfested waters.
“Silent House” is permeated by
different types of predators: ghosts.
The film—adapted from a Uruguayan movie called “La Casa
Muda”—centers on a young woman
who has a psychological breakdown
while helping her dad to fix up a
haunted summer home. Ms. Olsen
is alone in almost every frame and
speaks very little throughout.
Up next is “Liberal Arts,” in
which she co-stars with writer/director Josh Radnor and “Peace,
Love and Misunderstanding,” with
Jane Fonda. She also co-stars in
“Red Lights” with Robert De Niro
and Cillian Murphy. Soon she will
shoot her first costume drama—
“Thérèse Raquin,” from the Émile
Zola novel—in which she stars opposite Glenn Close as a woman in
19th-century Paris who becomes
embroiled in a messy love affair after she’s forced to marry her
cousin.
Some of those takes were very long,
right? How did that work?
They rigged the entire house,
so it really was like a haunted
house. There were different people hiding in corners to slam
doors and drop things. The sound
guys could never be seen. You
could never see a shadow. It was
just very difficult.
The Wall Street Journal: You weren’t
a child actor like your sisters, right?
Not really. I did lots of camps and
acting classes. I went on about 10
auditions at most. But I was a
dancer and an athlete, so acting
didn’t work out with my extracurricular-activity schedule. Growing
up, my brother and I would go to
the set to visit my sisters, so that
all four kids could be in the same
place. I was in some of their videos but that’s about it.
How did you resist going into acting,
being surrounded by it so much?
I kind of overcompensated by
trying to prove myself. I cared a
lot about academics and being a
good athlete and dancer and rehearsing a lot for whatever scene
work I had in class. Everything I
did I tried to make sure it was
based on my own merit. I think
it’s led me to be where I am now. I
don’t think I have as much of a
complex about it as I used to. I
just wanted to build up my own
confidence and do as much as I
could, so in case anybody wanted
to destroy me in the press, I
would have something that makes
me unique.
What have you learned from your
sisters about media gossip?
We don’t directly talk about it
in our family. We just know success is all about the work you do,
and it has nothing to do with anything else. It has nothing to do
with what people are saying on
blogs.
Your “Silent House” character—much
like the one in “Martha”—becomes
mentally unstable. Are they similar?
I think the two characters are
so different. In “Silent House,” the
whole thing is that she’s not
How did you make yourself cry?
I feel like I blocked it out. I
think everyone just pulls from different things, and sometimes towards the end of filming, like the
last week it would be really helpful to have the makeup lady help
out with your eyes. Then once you
start to feel a little emotion come
on—your actual eyes or your nose
starts to get stuffed up—everything else follows somehow. So if I
was too exhausted to actually pull
something emotionally, the physical helped too.
You had bad dreams while you were
shooting?
I had the worst nightmares.
The most vivid one was where I
was watching this family through
an open door to their house, and
there was a 5-year-old girl whose
floral dress was hanging off her
shoulder and there was a father,
who was really short with a pot
belly, was walking around in boxers. So I watched him about to
rape his daughter—and I came in
and intervened.
Contour/Getty Images
[ The Interview ]
She resisted acting at first: ‘I just wanted to build up my own confidence...in
case anybody wanted to destroy me in the press.’
aware of anything. She doesn’t act
outwardly tormented. It’s only at
the last moments of the film when
you start to understand her past.
Martha is someone who’s trying
to work things out in the present,
while through most of “Silent
House,” Sarah is completely oblivious to what is going on psychologically.
There were some scenes where
there would be a reflective aluminum thing that the director of
photography was holding, and you
had to move your flashlight in a
specific way for it to reflect onto
your face.
The DP and I—we felt like we
were doing a ballet together the
whole time. And he would tell me
while we were filming to walk
faster or slower, or raise my light
higher. All of that dialogue is happening during that film, but we
just cut it out. It was really a cool
thing to get to do because I was
so part of this technical aspect of
the movie.
You never saw “Open Water”?
I will not see it. I am terrified
of sharks and the ocean. My
brother, however, has seen it and
he loves the movie. I know exactly
what happens, but I will not sit
through it.
What do you think about being characterized as an “it” girl?
I have a sense of humor about
it. I don’t think anyone wants to
be the “it” whatever at any moment in time because it’s so
ephemeral. It just goes away so
fast. I am in it for the long run.
Film, Dance, Theater: The Moving Whitney Biennial
BY ELLEN GAMERMAN
at age 57 and never saw this work
exhibited in its entirety, though
parts of it were screened in Detroit.
The Biennial is showcasing three
videos of Mr. Kelley’s project.
(There are plans for the home to be
installed near the Museum of Contemporary Art Detroit.)
A
Werner Herzog
© Mike Kelley; Corine Vermuelen (photo)
child mannequin heaves its
robotic chest while a voiceover intones, “Is this death?”
A performer in a horse mask appears in a dance. A projection displays a giant housefly.
The Whitney Biennial, one of the
art world’s most high-profile showcases, strives to explore the strange
and inventive. The contemporary art
survey—a mix of performance, film,
photography, sculpture, painting
and other work—runs through May
27 at the Whitney Museum of American Art in New York.
The exhibition features 51 artists,
the smallest number in the event’s
history. It’s designed to allow more
breathing room between galleries
and afford audiences a deeper look
at individual artists. Some performances will rotate, and some work
will be fleeting, created live before
viewers.
Cinema is at the forefront this
year, with timed screenings of features and experimental shorts.
Nearly an entire floor is a stage for
music, dance and theater, with a
see-through dressing room that re-
‘The Mobile Homestead in front of the abandoned Detroit Central Train Station,’
2010, by Mike Kelley, is featured in the Biennial.
veals behind-the-scenes action. Here
is a look at some exhibition highlights.
Mike Kelley
In “Mobile Homestead,” Mike
Kelley created a facade of his Detroit-area childhood home, put it on
a truck and sent it through Detroit
with a film crew, creating an urban
portrait that includes interviews
with strip-club dancers, motorcyclegang members and car-company executives.
Mr. Kelley, an artist known for a
punk aesthetic, died earlier this year
After hearing several young artists cite Mr. Herzog as a major influence, curators approached the filmmaker, known for documentaries
such as “Grizzly Man,” and asked
him to create a Biennial work. Mr.
Herzog responded with a multimedia rumination on an artist who inspired him, 17th-century Dutch
painter and printmaker Hercules
Segers.
Images depicting craggy 1630s
landscapes flash on screens to music by Dutch performer-composer
Ernst Reijseger. The piece includes
film footage of Mr. Reijseger in a
trance-like state while playing cello
for the score of Mr. Herzog’s movie
“Cave of Forgotten Dreams.” Mr.
Herzog’s work is set in a gallery
that’s accessed through black plastic
sheets that dangle to the floor. Get-
ting to the work feels a little like
walking through a car wash.
Dawn Kasper
The Los Angeles artist has
moved nearly everything she owns
into the Whitney for the threemonth exhibition, turning a gallery
into her studio—what the museum
calls a “living sculpture.” The overstuffed room is strewn with personal effects as well as her art, like
a warped tennis racket spinning on
a motor and a photograph of her
carving a geometric tattoo into her
leg in a performance.
The 35-year-old artist isn’t sleeping at the gallery, but she is spending five days a week talking with
museum visitors, performing music
and creating other works. She came
up with the idea a few years ago:
After finishing a job as an assistant
to Mr. Kelley, she went on unemployment and lost her studio. She
felt unmoored, she said, “as if I
wasn’t taken seriously if I didn’t
have a studio.” She takes some time
off from the exhibition at an apartment in Brooklyn. “I’ve been told by
a spiritual healer that I need at least
one hour by myself,” she said.
CULTURE & ENTERTAINMENT
How a Novelist Recreates History
A Universal Theme:
Ungrateful Children
Amitav Ghosh on Bringing to Life the Lost Canton of the 1820s and 1830s
In South Korea she is a bestselling author, but in the U.S.,
Kyung-sook Shin is experiencing the
giddy anticipation of a writer’s
debut all over again.
The author of seven novels,
seven short-story collections and
three books of essays, Ms. Shin, 49
years old, is well-established in
Korea—but her novel “Please Look
After Mom” is the first to be
translated into English. Published
last April, the translation has sold
an estimated 33,000 copies in the
U.S., according to Nielsen BookScan,
and is being distributed in 18 other
countries. (The original is a millionseller in Korea.)
“This whole process has brought
back what it felt like when I
published my first book,” she said.
“There were a few times when I
was anxious, but for the most part,
the experience has been enjoyable.”
“Please Look After Mom’s” sales
got a considerable boost in the
English-speaking world when it was
shortlisted for the Man Asian
Literary Prize, given each year to
the best novel in English by an
Asian writer. Ms. Shin is the first
Korean writer to make the shortlist.
The book’s cross-cultural appeal
lies in its universal themes, she
said: motherhood and a child’s guilt
over whether he did enough to
show his appreciation for his family.
As “Please Look After Mom”
begins, Park So-nyo, the mother of
four grown children, has gone
missing from a local train station.
The story is told from four
perspectives, as family members
come to terms with losing her and
begin to realize how they failed to
take time from their busy urban
lives to express gratitude for her
generosity and devotion.
Ms. Shin said she wrote the
book as a reflection on the itinerant
nature of contemporary
professional life, both in Korea and
abroad, whereby young people
leave their families and hometowns
in search of faraway opportunities.
“These people are the new
nomads,” she said. “Regardless of
where they are from, I think
people’s feelings about their families
have become all the more acute.”
Awards and book sales aside,
Ms. Shin’s own measure of the
book’s success is set at a more
intimate register. “I hope that my
readers will be seized by the longing
to remember and see again that
someone they’ve forgotten,” she
said. “If anyone wants to call his or
her mother after reading this book,
it would please me very much.”
Her latest book, “I’ll Be Right
There” (published in Korea in 2010)
is being translated and prepared for
international release by Alfred A.
Knopf. She’s at work on her eighth
novel.
The most striking aspect of the “Ibis
Trilogy” so far is the richness of languages, cultures and customs from
the pre-Opium War period.How did
you bring it to life?
In some sense, Guangzhou itself
is a protagonist in the second book.
So it was very important for me to
be able to, as it were, recreate it.
But the specific place I was recreating was the small foreign enclave
in Canton, and that doesn’t exist
anymore—it was burnt down in
1856. So even though I spent a lot
of time in Guangzhou, it was completely an extrapolation, and I had
to depend mainly on all kinds of
source material. Fortunately, the
source material on Canton in the
19th century is very abundant. On
top of my travel to China, I spent
some time in the Greenwich Maritime Museum in London, where I
found many memoirs, journals and
collections of letters that described
the place. There’s a wonderful visual archive of Canton too, because
the artists of the day made an incredible number of paintings and
drawings of the foreign enclave.
How did you go about rediscovering
the sensory details: the food, smells
and sounds? There’s so much of that
in the book.
This highlights a big difference
between the way novelists and historians approach history. As a nov-
‘River of Smoke,’ Amitav Ghosh’s latest book, is volume two of a trilogy set in the years before the first Opium War.
elist, my interest when I’m researching and writing about a place
is what was it like to be there.
Walking down the street in Canton,
what would you wear, what would
you smell, what would you see?
These are questions that historians
don’t often ask or answer. It’s just
not what interests them. But for
me as a novelist, it’s very exciting
to seek these things out. But you
do sort of have to piece it together.
For example, many of the menus
from the banquets are actually described in the memoirs of people
who went to them. And by reading
the back issues of the Canton Register, the newspaper of the time,
you can actually find out what the
weather was like on any given day.
Are there records of meals like the
88-course one (hosted by a great Cantonese Mandarin) in the book?
All the details of that scene are
taken directly from a memoir. I
added a couple of things here and
there, of course, but it’s very authentic. Many travelers to Canton
in the 19th century described these
banquets at great length. They
were sort of astonished and
amazed by them. But you have to
remember, although there were 88
of them, most of the dishes were
quite small.
“River of Smoke’s” themes resonate
today: the virtues of the free market
versus the greater social good, China’s
trade relationships, and cultural exchange between its Asian neighbors
and the West. Did you have contemporary affairs in mind?
I can see perfectly well why
you would think that. But in fact,
these same discussions and arguments were going on right then
and there in the Canton of the period. A lot of the words that are
spoken in the book come directly
from the sources. They’re in the
letters and written about in the
newspapers of the time. You have
to remember that a lot of the people who were in Canton in the
1820s and 1830s were Scotsmen
and were Adam Smith and
Thomas Malthus’s first students.
Malthus himself worked in the
East India office. So they were
very much exposed to these ideas
and they were the first generation
of people to discuss them.
What’s astonishing is how little
the discussion has changed. In another sense, it’s amazing how people talk so much about the principle of free trade today without
anyone ever bringing up the fact
that the central commodity at issue
in the original free-trade dispute
was a drug, opium.
Chinese authors have won the Man
Asian Literary Prize three of its first
four years. Is India due for a win?
I can’t say that I’ve looked into
the matter [laughs]. A win would
be good for Indian literature, but
I’m a great admirer of Chinese literature as well. You can’t decide
these things by a quota system.
Since you split time between the U.S.
and India, in broad strokes, what
would you say distinguishes their literary cultures?
I don’t know if I would draw
such a broad line of distinction. Indians read a lot of American literature, and I’ve always had a deep interest in American writing. That
said, our writing is often very
much built upon narrative. There
are so many amazing untold stories
in India. There’s so much happening in India. It’s a society in a circumstance of such incredible
change. I sometimes look around
me, and I think, even if I lived to be
150 years old, I wouldn’t be able to
tell half the stories I’d like to tell
about this place. In the United
States, even though there’s a lot of
technological change and so on, it’s
not a society in upheaval in the
same way as India, and I think
that’s reflected in the writing. It’s a
very exciting moment in Indian
writing.
You’re now at work on the third and
final installment in the “Ibis” series.
Anything you can share with us about
where the story goes next?
Oh, no. Like some of my characters, I’m a bit superstitious. I think
it’s very bad luck to talk about a
book before it’s finished.
When you have a novel underway, as
you do now, what is a regular day of
work like for you?
I usually spend the first half of
the day writing and the latter half
reading. The two go hand in hand,
really. But there are no rules. Some
days I’ll write all day long. It’s a
very unpredictable process, you
know? All my life I’ve tried to make
it a sort of routine thing, but still
no two days are the same. Graham
Greene used to write 500 words a
day and then promptly stop—no
more and no less. If I tried to do
that, the work would just collapse.
I think the anxiety would kill me.
My wife is an author as well, and
you know, we’re constantly reading
and writing. We do other things
too, but books are the central axis
of our lives.
— Edited from an interview by
Patrick Brzeski
Online>>
Read more of this interview on
WSJ.com/scene.
Lee Byungryul
In “River of Smoke,” Amitav
Ghosh puts his background in journalism and social anthropology to
good use, evoking 19th-century Chinese opulence in scenes such as
one banquet where a dish called
“Buddha Jumps Over the Wall” is
served: “It had taken two days to
prepare and included some 30 condiments—crisp shoots of bamboo
and slippery sea-cucumbers; chewy
tendons of pork and juicy sea scallops; taro root and abalone; fishlips and mushrooms…reputed to
have lured many a monk into
breaking his vows.”
“River of Smoke,” Mr. Ghosh’s
latest book, is the second in his
“Ibis Trilogy,” the story of wayfarers cast aboard the ship Ibis during
the years preceding the outbreak of
the first Opium War.
The first book in the series,
“Sea of Poppies,” was shortlisted
for the Man Booker Prize in 2008.
“River of Smoke” has been shortlisted for the Man Asian Literary
Prize, the winner of which will be
announced next week in Hong
Kong, not far from where much of
the book’s action takes place—although in a harbor much transformed by the intervening years.
Born in Calcutta, Mr. Ghosh, 55
years old, spent his youth in Bengal, Bangladesh, Sri Lanka and New
Delhi, before going on to study in
England and later teach comparative literature in the U.S. He is married to the biographer and essayist
Deborah Baker, with whom he has
two grown children. Today, the
couple split time between homes in
Brooklyn and Goa.
The Wall Street Journal spoke
with Mr. Ghosh about the splendor
of old Canton, 88-course meals, and
opium’s central role in the history
of free-market capitalism.
Agence France-Presse
[ The Moment ]
Kyung-sook Shin
TRAVEL
The Miracle of the Airline Meal
turbulence situation or air-travel
scare imaginable—landing on ice
and sliding down the runway in
Moscow or once being ushered onto
a plane in Russia that was entirely
empty except for me. I find that
when you’re in these uncomfortable
positions, you can somehow endure
them better with a soundtrack.
Bill Roedy retired from MTV
Networks International as chairman
and chief executive last January
after 22 years with the company.
But as chairman, envoy or board
member of seven global health
initiatives—including UNAIDS, Global
Business Initiative, and the Bill &
Melinda Gates Foundation’s Global
Alliance for Vaccinations and
Immunizations—he continues to
travel the globe regularly.
The 63-year-old, who now lives
in London with his wife and four
children, spoke to The Wall Street
Journal about why he loves airplane
food, his favorite line from “The
Godfather” and landing in Mumbai
in the dead of night.
How often are you up in the air? I
can still travel about once a week.
It’s been pretty much nonstop for
the past 30 or 40 years. During my
time with MTV I would occasionally
do some unfortunate itineraries. My
record was six cities in one day.
Where do you go most in the
region? Over the years, Singapore
has been my most-visited Asian
city.…But I get everywhere.
What frequent-flier plans do you
use? All of them. It’s nice how
they’re all so connected now. But
I’m a member of everything, from
South African Airways to Emirates
to ANA.
Which Asian carrier offers the
best travel experience? Anybody
who says they’d rather fly private
probably hasn’t flown first-class
with Singapore Airlines on the A380.
That’s the height of air-travel luxury
as far as I’m concerned. And by now
it’s legendary, but when you fly into
Changi Airport on Singapore Airlines,
your luggage actually beats you to
the baggage claim.
Bill Roedy
favorites is Narita to Tokyo, because
it’s so long and you can’t see anything.
How do you beat jet lag? You just
have to accept that you’re going to be
tired a lot. That’s the nature of global
business. To quote my favorite line
from “The Godfather:” “This is the life
you’ve chosen.”
Preferred luggage? When Samsonite
invented these four-wheelers, that was
it for me. After back surgery, there’s
nothing that beats those.
Which airline serves the best food?
We all complain, but think about it:
You’re flying in this steel contraption at
36,000 feet, going from continent to
content at an unbelievable speed, and
yet they still have the capability of
serving you a warm meal? I’m pretty
thankful for whatever I get in that
context.
How do you keep up with exercise
while on the road? I actually exercise
less on the road because my time is so
limited. I like to convert my gym time
into walking. If it’s doable—say, 45
minutes to an hour—I’ll walk back to
my hotel from my meetings. This does
two things: it gives you more of a
vertical connection to the local
culture—which I firmly believe is an
important part of doing global
business—and you get your exercise.
Essential travel gadgets? My iPod is
critical. I’ve encountered every
What city has the best taxis?
London still beats everybody. The
cars are classic and comfortable,
and the drivers have to take a twoyear course, so they’ll never get
baffled. Tokyo is a close second.
How long does it take you to
pack? I can do it in about 15
minutes. You’ve got to be
methodical. Ninety percent of
people take too much. I actually try
to under pack and leave space for
gifts and accumulated paperwork
that’s going to be too heavy to
carry it in my briefcase.
Other than music, what does a
retired MTV exec do for in-flight
entertainment? When I’m on the
way there, I tend to focus on
reading and preparing for the visit,
whether it’s cultural prep with
travel guides and the local
newspaper, or getting things clear
on the business side. Coming back,
it’s the exact opposite: I dig into the
in-flight entertainment. I avoid the
big action movies—because you
want to see those in the cinema—
go for the smaller films that I’ve
missed, which are often the most
meaningful.
Takeaway travel tip? I find my
best ideas come to me on the
airplane. I try to sit by the window.
When you have those views,
combined with that solitude, it can
be so inspiring. So, make sure you
always have a piece of paper and a
pen—in my case, it’s a favorite
green ink pen—to jot down ideas
before they float away.
—Edited from an interview
with Patrick Brzeski
Favorite airport in the region? I
got to see the new airport in
Beijing, Bangkok and Terminal 3 in
Singapore all in the same week. I’d
put those three at the very top. I
loved affectionately Kai Tak, the old
Hong Kong airport, because there
was no city approach like it.
Favorite airport-to-city journey?
It’s hard to beat the beauty of the
ride from Changi in Singapore. But
what’s actually more interesting for
me are those airport-to-city trips
where you can look out the window
and see the diversity of the local
street culture. I like to get a real
taste of the place where I’ve just
landed. So I just love Mumbai,
especially when you land in the
dead of night and have to travel
across town. I just came from
Dhaka and that was pretty
extraordinary, too. One of my least
Agence France-Presse/Getty Images; Jonas Karlsson (Roedy)
Best hotel in Asia? For those with
the budget, the Ritz-Carltons in
Hong Kong and Tokyo are pretty
stunning. But my favorite hotel
anywhere is the Four Seasons in
Singapore.…And everyone has to
put the Okura in Japan on their list.
It’s like a microcosm of Tokyo—tiny
rooms that are an intricate mosaic
of everything fitting together and
working perfectly.
A jet on its final, hair-raising approach to Hong Kong’s old Kai Tak airport
On a ski run in
Alta Ski Area, Utah
At the Ski to Live Camp,
It’s Mind Over Mountain
BY BRIGID MANDER
‘I
t is ungraspable,” she said.
“You can’t understand it.”
Kristen Ulmer, extremesports pioneer and former U.S. Ski
Team member, was teaching us how
to ski. Sort of.
“You can only be the concept,”
she said to the retired physician,
one of the more exasperated of the
17 skiers, ranging in age across almost five decades, gathered in a
sparse room at the base of Alta Ski
Area, near Salt Lake City.
For nine years, Ms. Ulmer has
been running Ski to Live, a threenight, two-day ski camp that promises to be transformative with almost no technical instruction. The
all-in-your-head program is supposed to make skiers, snowboarders
and telemarkers into better athletes,
but also better people. During the
first session, Ms. Ulmer proclaimed:
“By the end of the camp, you’ll feel
freer than you ever have.”
It wasn’t the life-changiness that
had attracted me to the idea, though.
Half of me wanted to ski Alta’s famous steeps and chutes; the other
half just wanted to meet the teacher.
Ms. Ulmer was famous for skiing
you-fall-you-die Alaskan faces, hucking front flips off 21-meter cliffs and
pushing the limits of extreme skiing.
Then, in 2003, in the middle of a
flourishing career, she told her sponsors she was quitting. She wanted
something more, she said.
“I was an egotistical hedonist,”
Ms. Ulmer told me. Believing that
mindset had been crucial to her skiing success, she decided to start
camps that focused on the mental
game. The first one, which involved
a sports psychologist, didn’t feel
quite right. On a whim she invited
Zen teacher Dennis Merzel to her
second, and everything clicked.
When the first session began, I
was a little in awe. But there was little talk of her ski stardom. Instead,
she delved into the basics of Mr.
Merzel’s Big Mind Zen: a blend of
Buddhist concepts of self with a
Western psychological approach
called “voice dialogue.”
Her approach was fairly straightforward, peppered with humor and
anecdotes. Big Mind Zen posits that
there are many facets, or “voices,”
in every personality. Some we nurture, some we repress. By recognizing the voices we are squashing, and
simplifying our thoughts, we can
change our patterns for the better.
So far, so good. Then Ms. Ulmer
asked to “speak” to certain voices—
first, the “gatekeeper,” our wall.
“My job is to protect, and keep the
world out, so she doesn’t get hurt!”
one student yelled out. It was unnerving—and not just because my
voices didn’t have as much to say.
Re Wikstrom (2)
ROA D WA R R I OR
The writer at the top of a chute.
There was a palpable air of apprehension about our first day on
Alta’s advanced terrain. We started
by practicing to ski in each voice—
doing a run as if one feeling ruled
our world. We began with fear. I
picked the most advanced of our
three groups for more challenging
runs, and tried to ski around feeling
afraid of everything. We moved on
to control, arrogance, the analytical
mind, the show-off and anger. I
tried my best to play the game—and
was eventually amazed at how different each run felt. Skiing in the
analytical mind taught us that overthinking skiing is not fun. A few
runs later, I furiously smashed my
skis into the snow, finding that anger pairs excellently with big moguls. As the know-it-all, I thought
about all the skiing I’ve done, and
the terrain fell away behind me.
I finished the day exhilarated. I
was experiencing the hill in a new
way. I was also exhausted from all
the exertion—and all the thinking.
The evening was another three
hours of anecdotes, voice dialogue
and Zen wisdoms, followed by yoga,
which I skipped in favor of bed.
The next day I decided I was really enjoying ski camp. Even the
doctor was getting it. But then a
mother of four who wanted to write
a book tearfully broke down during
a lesson. Everyone looked around
understandingly, but I felt awkward
and clueless again.
I got on the lift, crankily mulling
my failure to grasp what had just
happened. But a few minutes into
the ride, I realized that maybe I did
understand what we were doing—I
just couldn’t explain it. It all seemed
OK. Which is, actually, very Zen.
By the final day, some of us decided we were ready for some of
Alta’s most challenging terrain—a
steep, bumpy, double-black. Fear
was given a nod, then let go as we
found different voices to replace it
with. And we dropped one by one,
for a perfect descent.
FOOD & DRINK
There’s an Art—and a Science—to the Swirl
Release Those Esters (Aromatic Compounds), Soften Those Tannins… and Flatten That Champagne?
[ On Wine ]
After decades of
wine drinking,
there are certain
things that I do almost automatically: Check the alcohol level on the wine label,
examine the cork upon removing
it from the bottle and swirl the
wine around in my glass. The latter is an absolute among oenophiles—an action as necessary as
tasting, perhaps even more so
considering the importance of a
wine’s aroma.
Swirling releases the wine’s aromatic compounds, known as esters,
into the air. Every wine has these
volatile aroma compounds, although some wines have more than
others, depending on the structure
and character of the grape. Swirling can also affect the wine’s flavor. The oxygen introduced by the
act of swirling binds with the tannin molecules to make the wine
seem softer, more accessible.
I began thinking more seriously about swirling after watching a YouTube video a few weeks
ago. (Isn’t that where most of today’s obsessions begin?) Created
by a group of physics professors
and students from the Swiss Federal Institute of Technology in
Lausanne, the video, titled “Modelling the swirling of a glass of
wine,” depicted research team
member and Ph.D. candidate Martino Reclari (unaccountably attired in a Guinness T-shirt) swirling a glass of wine and explaining
that his team had studied the
“shape of the wave” of a swirled
glass of wine in the belief that it
could be applied to their study of
cellular cultures.
While the Swiss researchers
found wine swirling worthy of scientific analysis, the wine professionals I talked with seemed a bit
more blasé. “Swirling?” Alexander
LaPratt repeated when I told him
the reason for my call. I thought
Mr. LaPratt, the sommelier of New
York’s DB Bistro Moderne and the
reigning Best Sommelier in America (as the winner of the biannual
competition hosted by the American Sommelier Association) might
have some deeper insight into the
subject of swirling—perhaps he’d
even taken a few swirling tests in
his title quest?
He had not, but he did, in fact,
swirl all the time. “I do it automatically. It’s a reflex,” he said.
What did Mr. LaPratt consider the
greatest benefit of swirling? That
was easy. “Oxygenation,” he said.
“Swirling is like a kind of miniature decanting.”
What about Champagne? There
are conflicting theories about this:
Some wine drinkers believe Champagne should be swirled like any
wine, others believe the act is deleterious to the bubbles in the
glass. Then of course, there is the
practical challenge—it’s hard to
swirl a Champagne flute or detect
much aroma from the narrow
bowl of the glass. “It’s funny how
controversial things get when you
add bubbles,” laughed Mr. LaPratt,
who does swirl his Champagne,
which he drinks out of a regular
Serge Bloch
BY LETTIE TEAGUE
glass. “But I’m fine with drinking
flat Champagne,” he said.
The glass is of great importance when it comes to swirling.
So is the volume of wine: The
glass should be no more than onethird full. This allows the aromas
enough room to circulate—and
gives the swirler sufficient space
to fit his or her nose into the
glass. The glass itself should be
generously proportioned; the
glasses that Mr. LaPratt employs
at his restaurant are large enough
to fit the contents of an entire
bottle of wine.
Is there an optimum swirling
glass? I put the question to Maximilian Riedel, scion of Riedel
glass.
“The glass must be lead crystal,” Mr. Riedel said. “When you
swirl a wine in lead crystal, the
aromas are easier to identify—the
wine rubs the inside wall of the
glass.” Lead crystal is rougher
than regular glass—it agitates the
surface of the wine, thereby increasing the oxygen flow.
Though Riedel makes hundreds
of types of wine glasses, seemingly one for each grape—and Mr.
Riedel strongly recommends having multiple sets of glasses for
different varietals—I decided I’d
use one type of glass for my swirl-
ing exercises. After all, most people can’t afford that many sets of
glassware. And in his book “The
Taste of Wine,” famed Bordeaux
oenologist and researcher Émile
Peynaud recommended using a
single glass for tastings: “Otherwise a wine’s odor cannot be analyzed exactly the same way.”
The glass should be no
more than one-third full,
to provide the aromas
enough room to circulate.
I decided on a Riedel Vinum
Burgundy glass—the bulbous
shape and large bowl of the Burgundy stem is designed to allow
the accumulation of aromas. I
gathered a group of friends and
an eclectic group of wines, some
overtly aromatic and others not:
Pinot Noir, Gamay, Zinfandel, Cabernet, Sauvignon Blanc and
Gewürztraminer, as well as less
famous grapes like Falanghina,
Greco di Tufo, Torrontés and
Frappato.
I chose only young wines.
Many older wines may not benefit
from a vigorous swirl—for exam-
ple, a fragile old Burgundy is best
left unswirled.
It’s also important to smell the
wine before swirling to note the
difference. In most cases, we
didn’t find much in the way of
aromas preswirl, save for the
Cloudy Bay Sauvignon Blanc,
whose grassy character practically
jumped out of the glass.
Then we swirled. For how
long? No one seemed to know the
ideal, but four or five seconds
seemed like the right amount of
time.
Some wines were aromatically
reticent even after a vigorous
swirl, so for those, I put my hand
over the top of the glass and reswirled. This helps to concentrate
the aromas—or, in some cases,
amplify a wine’s problems.
I noticed that we were all
swirling in the same direction:
counterclockwise. Why? “Because
I’m right-handed,” offered one
friend. “Because I live in the
Northern Hemisphere,” suggested
another, positing that people in
the Southern Hemisphere swirled
their wines clockwise, just as their
water went down the drain in a
different direction. (I checked
with a couple of Southern Hemisphere winemakers, Peter Gago,
chief winemaker of Penfolds in
Australia and Susana Balbo of
Crios in Argentina, and found that
both swirled counterclockwise,
though Ms. Balbo said sometimes
she went the other way, too.)
Could the direction of the swirl
make a difference? For example,
did a clockwise turn emphasize
fruit, while counterclockwise produced more notes of oak? I had
read that some winemakers believed that direction made a difference, but when my friends and
I tried swirling both ways, opinions were decidedly mixed. Some
thought the fruit was more vibrant in a counterclockwise direction, while others disputed there
was a difference at all.
There is clearly much more to
know about swirling, which for all
its simplicity and benefits is an
act whose particulars—direction
and duration of the swirl and optimal glass—are unknown. Perhaps the Swiss physicists knew
more? I emailed Mr. Reclari, who
replied that he was in the middle
of additional research but the results would not be available for
several months. Meantime, I’ll
keep swirling. After all, as Prof.
Peynaud said, “The study of
aroma requires considerable application and many repeated attempts.”
FASHION & STYLE
Clockwise from above, artist David Hockney sitting for a portrait by Lucian Freud, who’s wearing his trademark jacquard scarf and unlaced paint-spattered boots, and four Freud portraits with notable outfits: ‘Woman in a
Portrait Painter as Sartorialist
[ Style ]
BY TINA GAUDOIN
To say that Lucian
Freud liked clothes
is a slightly odd
contention to make
about a portrait
painter who once
said, “When I paint clothes I am
really painting naked people who
are covered in clothes.”
But take a look at either of the
two Freud exhibitions now in London—the blockbuster National
Portrait Gallery show, “Lucian
Freud Portraits” (until May 27),
and the more intimate show of his
drawings at Blain/Southern (until
April 5)—and it becomes clear
that while he eschewed clothes on
some of his subjects and often in
self-portraits, Freud had a fashion
designer’s eye for detail and a
deep appreciation for the clothes
his subjects wore.
“He was always trying to capture the essence of someone, not
by which clothes you wore but
sometimes by whether you wore
them at all,” says Jeremy King, coowner of London’s Wolseley restaurant, who sat for Freud in
2006 and 2007, wearing a suit by
British tailor Timothy Everest that
Freud had mentioned he liked,
with a Volpe shirt and a pocket
handkerchief and geometric tie by
Turnbull & Asser.
“It was very frayed by the time
he finished,” he says of the tie. “I
sat well over 100 times.”
Freud, who died last July, had
a keen interest in accessories. “He
was brilliant on pocket handkerchiefs and the minute detailing on
rings and watches,” says Sarah
Howgate, curator of the National
Portrait Gallery exhibition. She
points to “Guy and Speck” (198081, in which a slimline watch
peeps out beneath a pale-gray
Savile Row cuff, while a dark-blue
tie and pocket handkerchief accent Guy’s gray-brown cashmere
suit, and “Two Irishmen in W11”
(1984-85), in which a man in a
dark, buttoned-up suit stands nervously behind his seated father, in
a three-piece suit, the last button
on his waistcoat undone, a signet
ring on his right ring finger.
“Clothes were a technicality to
him in terms of his work, but that
doesn’t mean he didn’t appreciate
them,” says art critic Martin Gayford, whose book “The Man with
the Blue Scarf” recounts his experience with Freud. “He was alive
to the intimate connection between an individual and what they
were wearing.” Leaving a Ray
Charles concert, Freud said Mr.
Gayford, “Now he really knows
how to wear clothes.”
“He was sartorially aware,” Mr.
King says. “He had some wonderful clothes himself, many of which
had engaged with the paint, which
added to the overall effect.”
Freud’s daughter Bella, a fashion designer, says her father’s
dress sense was inspiring. “I remember him looking dazzlingly
understated,” she says. “When he
was younger, he used to go to
[Savile Row tailor] Huntsman and
experiment with different jackets,
with and without vents and pockets.” Freud was particular about
his trademark neck scarves, too.
“They were ’40s jacquard scarves,
which he always wore in place of
a tie. You can’t find them anymore,” she adds. And the boots?
Paint-spattered and always worn
without laces, as featured in his
naked 1992-93 self-portrait
“Painter Working, Reflection.”
Getting the paisley right in
one painting ‘nearly sent
him over the edge,’ curator
Sarah Howgate says.
“He wore them everywhere,”
Bella says. “I once bought him a
pair of trainers in pale blue with
stripes as a change, but he
thought they took over, so he took
them off, saying they were ‘too
much of a look.’”
Freud was just as particular
when it came to the clothes of his
subjects. “He wanted his sitters to
be comfortable,” Ms. Howgate
says, “but he insisted that if they
were wearing clothes, they never
deviated from the original outfit”
because clothes throw tones on
the skin. Mr. Gayford recalls unwittingly turning up for a sitting
for his 2005 portrait in a blue
scarf “a quarter shade of blue different” from his usual.
“He was upset, he kept saying
to me, ‘There must be something
wrong with me; I don’t know why
I can’t mix this blue color today,’”
Mr. Gayford says. “It was only
when I returned home that my
wife pointed out to me that I had
the wrong scarf on.”
Many of Freud’s paintings include clothing in their title as if
its a metaphor for the subject.
“Girl in a Dark Jacket” (1947), an
early portrait of his first wife, is
an intense study not only of her
deep gaze but also of her inkyblack jacket. In “Girl with a Beret”
(1951-52), the beautiful girl with
short, cropped hair, gold loop earrings and black round-necked
sweater could be a model for the
French designer Vanessa Bruno. In
another, “Woman in a Fur Coat”
(1967-68), the fur—likely real—almost slinks off the canvas with feline insouciance.
“I’m inclined to think of them
naked, or if they’re dressed as animals dressed up,” Freud said of
his subjects in art critic William
Feaver’s book “Lucian Freud.”
“There’s a definite sense that
clothes for Lucian were almost
like a human being’s pelt,” says
Ms. Howgate. In one of his most
famous early paintings, “Girl with
a White Dog” (1950-51), the detailing on the lemon-yellow dressing
gown on the Madonna-like figure
of his pregnant wife is so acute as
to make one feel that the cord
(and the gown) needs a good
wash. The dog has a pristine
white, silky-smooth coat that
matches his wife’s alabaster skin.
“The picture was unposed and the
dressing gown was almost incidental,” says Ms. Howgate, pointing out similarities between the
lines of Freud’s early work and Ingres’s “smooth, linear approach.”
With his departure in 1958
from his original style—from sitting and using fine sable brushes
to standing and using rougher
hog’s hair brushes—Freud’s painting became more vigorous. And
the artist appears to have become
more fascinated by the contours
and contrasts of naked skin.
“As far as I’m concerned the
paint is the person,” he said. “I
want it to work for me just as
flesh does.” The clothes on his
subjects became more textured,
though no less precise. In “Red
Haired Man on a Chair” (1962-63),
Freud’s apparent ease at painting
even shoes is represented in a
pair of brown brogues that look at
once comfortable and stylish.
“His painting was timeless, but
also very much of its time,” says
Ms. Howgate. Today, even the outfits from his ’60s portraits appear
contemporary. “Michael Andrews
and June” (1965-66)—she in her
red shift and he in his mushroom
vest and white shirt—look for all
the world like a couple one might
see today in the Wolseley, where
Freud dined regularly. In his “Reflection with Two Children (Self
Portrait)” from 1965, the artist
stares down at the viewer in what
U.K. paint makers Farrow & Ball
would probably describe as an “elephant gray” flannel suit, likely
Savile Row (minus the shirt—a
Freud trademark). And in a por-
FASHION & STYLE
TOP FIVE
a Fur Coat’ (1967-68); ‘The Painter’s Mother Resting I’ (1976); ‘Guy and Speck’ (1980-81); ‘Michael Andrews and June’ (1965-66)
trait of the Dowager Duchess of
Devonshire, “Woman in a White
Shirt” (1956-57), painted during
the artist’s transitional period, the
collar on the duchess’s smooth,
cotton shirt sits proudly in pristine contrast to the heavily contoured shades on her face.
During the 1960s, what Ms.
Howgate calls “Freud blue”—a
light, almost denim color—begins
to appear. “He was very good at
blue,” she says. “He had a particular penchant for it.” In “Man in a
Blue Shirt” (1965), George Dyer,
Francis Bacon’s lover, wears an
open-necked shirt that could be
denim but is more likely cotton
with a sheen. Later, in portraits of
David Hockney and Mr. Gayford,
the subject’s blue shirt and scarf,
respectively, form part of the essential construct. In “Triple Portrait” (1986-87), “Annabel Sleeping” (1987-88) and “Flora with
Blue Toenails” (2000-01), various
permutations of blue appear, all
sensual feminine adaptations of a
traditional “male” color.
“I want the person looking to
see not, ‘Who’s that in a blue
shirt?’ but, ‘Who’s that? Oh,
they’re wearing a shirt.’ Which is
different isn’t it?’” Freud said to
Mr. Feaver.
Mr. Gayford remembers the
artist as a man who was “endlessly interested in people.” “He
had this extraordinary ability to
erect a force field around him so
that he didn’t get bothersome levels of attention,” he says. “He always said he didn’t want attention
for himself but for his paintings.”
At the Wolseley, Freud would
famously look around for someone
to fix upon. “Those that interested
him were not necessarily beautiful
or well-dressed, and it would be
hard to predict what would catch
his attention,” says Mr. Howgate.
Indeed, one could be “too famous”
in Freud’s eyes. “Madonna wanted
to meet him,” recalls Bella, “but
he didn’t want to meet her because of her level of fame, which
is a shame because they would
probably have got along.”
Freud used the act of painting
to get closer to his family, most
notably his late mother. “Doing
her portrait allowed me to be with
her,” he told Modern Art Museum
of Fort Worth curator Michael
Auping. “I suppose I felt I needed
her to forgive me. I tried to be unavailable to her when I was
young.” In one 1976 portrait, “The
Painter’s Mother Resting I,” she
lies in repose in a paisley outfit
that could almost be from the Jil
Sander spring 2012 collection.
“He told me that paisley pattern nearly sent him over the
edge,” laughs Ms. Howgate. She
adds that a later portrait, “The
Painter’s Mother” (1982-84),
shows his mother in white—suggesting a peace both in their relationship and in his mother’s attitude to her life’s nearing its end.
In “Large Interior, W11 (after
Watteau)” (1981-83), Freud by his
own admission was ambitious,
“partly because it is quite large,
and also because I had to gather
family.” The group certainly had a
unique dynamic. Bella poses with
two of her father’s lovers, Celia
Paul and Suzy Boyt; Boyt’s son
Kai; and another young girl.
“I hated the dress I wore in
that painting, but he was very
particular about it,” Bella says.
“We picked it out together from a
market. It was a hot and prickly
process, that painting.”
“He gave the same attention to
everything,” she adds. Indeed,
some of his most famous paintings of “Big Sue,” U.K. benefits supervisor Sue Tilley, involve a
shabby-chic-looking chesterfield
armchair, with tumbling roses lovingly painted, the stuffing softly
falling from an arm; in other pictures, rumpled sheets, old mattresses and junk-shop carpets receive the same careful treatment.
Freud attended all of his
daughter’s runway shows. “He was
very interested in what I was doing as a designer,” she says. He
even designed a logo, a line drawing of a dog’s head. “It was very
unusual because he didn’t normally do things spontaneously,
but he got out a drawing book at
the kitchen table and just drew
it,” Bella says. “It was perfect and
had the playfulness that I wanted
to pursue with my own clothes.”
“He always noticed clothes,”
she says. “And I was always conscious that when I was sitting for
him I wanted to wear something
he’d like in colors he’d appreciate.” He continued to notice even
in his final days. “I had bought an
old army shirt in khaki,” she says,
recalling that he told her, “I like
that. The green is awfully good.”
Given that he grew up with a tannery in his backyard, it’s not surprising
that Ethan Koh has made a career out of leather.
“Exotic skins have always been my passion,” says the 25-year-old.
Mr. Koh is the fourth generation of a family that has been working with
leather since his great-grandfather learned exotic-skin tanning from the
British, who then ruled Singapore. Last October, French luxury conglomerate
LVMH paid about 160.8 million Singapore dollars (about US$126 million at the
time) for a controlling stake in Heng Long International, the tannery his family
owns. Heng Long provides skins to the likes of Hermes and Prada.
Mr. Koh is also the founder of Ethan K, a range of leather accessories sold
in upscale department stores such as London’s Harrods and L’Eclaireur in
Paris. His latest collection, launched in November, is Wildlife Odyssey. The
handbags and minaudières (small bags treated as accessories) were finished
in Italy and Switzerland and sell for upwards of £1,790 (about $2,800).
He spoke to the Journal about the five influences behind Wildlife Odyssey.
Crocodiles: While the clasps of his latest bags feature different animals, Mr.
Koh said the most important one is the crocodile. “The crocodile is a very
formidable creature,” he says, yet “they are an endangered species, and their
skins are [rare] like diamonds.”
Feng shui: Another animal featured on the clasp of his bag is the frog, which
Mr. Koh said brings harmony. “In many cultures, the frog is said to bring luck.
Many of my clients have statues of frogs outside their houses,” he says. “For
us Asian designers, elements in harmony are very important.”
Asian forests: “I was very inspired by flora and fauna of tropical rain forests
in Asia,” he said. “This is reflected by the colors of the exotic skins. They are
in rich purple and [many shades of] green. “
Colonial Singapore: “We have a very short history but an exciting one,” says
Mr. Koh. “Imagine in the past, how many people were immigrants from
different countries. It makes us very cultural in a sense. [This is somewhat]
reflected in the old British architecture in Singapore.”
Georgian architecture: “People say London is a very cool and chic city, but
there is a lost heritage,” he says. “In Mayfair, where I live, there is beautiful
Georgian architecture, so there is a little Georgian mirror inside all my bags. It
is inspired by a mirror in the first floor of [the hotel] Claridge’s.”
— Kristiano Ang
Harry Harrison
Clockwise from left: David Dawson, courtesy of Hazlitt Holland-Hibbert; The Lucian Freud Archive (3); Tate, London 2012
Beauty Is Only Skin-Deep,
But That May Be Enough
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HOMES & DECORATING
Crime (Writing) Pays With Desert Retreat
The Four Homes of Best-Selling Novelists Jonathan and Faye Kellerman Include Santa Fe Compound
BY NANCY KEATES
Santa Fe, N.M.
Jesse Chehak for The Wall Street Journal (4)
‘R
Clockwise from top: On 2.4 hectares,
the compound overlooks Santa Fe; the
fireplace in the casita, or small house;
the living room in the main house.
! "
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age,”
“Victims”
and
“Twisted” are some of the
titles of the gory, graphically detailed best sellers written by
Jonathan Kellerman. The corpsefilled novels by his wife, Faye
Kellerman, have titles like “Gun
Games” and “Stalker.” The couple
spend most of their time in Beverly
Hills, Calif., and also have places in
Malibu, Calif., and New York. But
when they want to write without
distractions, they retreat to their
adobe-style compound in the serene
hills overlooking this artsy town.
The couple said they’re inspired
by the openness and nature here.
“It’s so quiet all the time. Just look
at these views,” said Mr. Kellerman,
62, pointing out the four mountain
ranges he can see from his livingroom windows. “It’s almost like
Switzerland.”
Buying their first home here in
2000 for $935,000, the Kellermans
kept adding on, and now own four
buildings on 2.4 hectares. Next to
their 4,300-square-foot, two-bedroom main home, in 2004 they built
a “casita,” a smaller home next door,
as an office for Mr. Kellerman and
guesthouse, for $350,000. In 2008
they bought a 5,500-square-foot
main home with its 700-square-foot
guesthouse from a neighbor for $1.7
million. They bought the last two
homes because wanted to keep their
own house private and thought the
homes could be a good spot for
when their four children and three
grandchildren visit.
The properties are now unified by
flagstone paths and flanked by small
trees and adobe walls that snake
along the ridge of the 7,500-foot-high
cliff that slopes into a canyon. All
four buildings are typical of the area,
with low slung, geometric shaped exteriors made of thick, beige clay
walls and flanked by covered outdoor
porches called “portals.”
Inside the main house, a pink
stone-floored entry hall has a large
iron chandelier with yellow glass
shades that hangs from a 3.9-meter
ceiling. In the living room, with
floor-to-ceiling glass doors and large
windows that overlook the mountains, a stone fireplace is topped by
a white mantle and a round mirror.
On one side of the main house is a
den where Mr. Kellerman plays guitar. A big, light, open kitchen leads
to the office of Mrs. Kellerman, 59.
There an old-fashioned wood desk
faces a window that looks out on to
the mountains.
The flagstone path outside leads
to the 1,200-square-foot casita. Its
main room has a large bronze antelope head on a white adobe wall
that tops a curved fireplace. There’s
a separate bedroom for guests and a
portal (the outdoor covered porch)
where Mr. Kellerman takes writing
breaks, peering down at the canyon
below and the mountains beyond.
A path going the other direction
leads to the second guesthouse, with
a home gym and two guest bedrooms and Mr. Kellerman’s painting
studio. The largest house is the least
used and is rented out much of the
year. A four-bedroom, four-bathroom 4,500-square-foot house
nearby is for sale for $2 million.
Santa Fe and its locals sometimes appear in the couple’s work.
Half of “Double Homicide,” a book
they wrote together, takes place
here. And a recurring character in
Jonathan and Faye Kellerman
Mrs. Kellerman’s novels—a peripatetic pianist—is based on friend
Marc Neikrug, a composer and pianist who lives in Santa Fe.
“Their house is in an area of incredible physical beauty,” said Mr.
Neikrug, who added that unlike
most second-home owners, the
Kellermans are friends with many
locals in Santa Fe. He said he hardly
recognizes the couple in their work;
they never talk about crime or dark
subjects with him.
With their laid-back, casual style,
their 40 years of marriage and their
large family, the Kellermans seem
like a conventional American couple.
They work out in their home gym
together every morning. Mr. Kellerman said most crime writers are
nice people—they get their dark
thoughts out in their writing.
It is mostly incidents he saw in
his training in psychology that are
the source for his novels. Mr. Kellerman, who has a doctorate in clinical
psychology from the University of
Southern California, got his big
writing break in 1985, when his first
published novel, “When the Bough
Breaks,” became a best seller and a
TV movie. Since then he has written
a book or two a year; more than 75
million copies are in print internationally. He’s best known for his
psychologist hero Alex Delaware,
who appears for the 27th time in
the recently released “Victims.”
Mrs. Kellerman also started out
in another profession: She has a
doctorate in dentistry from UCLA.
Her first novel, “The Ritual Bath,” in
1986, was a hit. Her books have
more than 20 million copies in print
internationally. She’s best known for
her detectives Peter Decker and
Rina Lazarus.
The novelty and variety in their
lives comes from their real estate,
said Mr. Kellerman. There’s the big
Beverly Hills home with a pool, tennis court, koi pond and lots of art.
When they need a break from that,
they head to their glass-and-wood
house on the beach in Malibu or to
their 1,700-square-foot apartment in
an Art Deco building on Fifth Avenue
in New York. “I love going from the
rush of New York to the dead quiet
of Santa Fe,” said Mr. Kellerman.
Santa Fe has some action—the
animal kind. The Kellermans hear
coyotes howling, see rattlesnakes
and bears—and occasionally run
away from bobcats they bump into
on walks around the neighborhood.
They like seeing the lights from
homes on the hills across the canyon. “It can get spooky at night,”
said Mrs. Kellerman.
HOMES & DECORATING
Thinking From the Outdoors In
BY ALASTAIR GORDON
L
andscape architects are usually the last ones called into a
building project, brought in
only after a house is completed.
When the owners of an island property on Miami’s Biscayne Bay
dreamed of giving their 1950s home
a treehouse effect, they took an unlikely route. They consulted local
landscape architect Raymond Jungles first, before the structural remodeling.
The aptly named Mr. Jungles—
working with a boxy 5,000-squarefoot house situated on a nondescript
14,240-square-foot corner plot—began with the idea of an adult-size aerie, tethered to the ground. And, in
the process, he went on to transform
the space into a tropical paradise.
“I wanted to unify the exterior
and interior and make it feel like a
single environment,” said Mr. Jungles, who has become one of the most
celebrated landscape architects in the
U.S. Some of his recent projects include a swamp-like environment for a
pedestrian concourse in front of a
Herzog & de Meuron building on Miami Beach’s Lincoln Road; the Miami
Beach Botanical Garden; and the
“Brazilian Modern” exhibition at the
New York Botanical Garden’s 2009
Orchid Show.
For the Biscayne house, architectural consultants and interior designers were summoned at a later stage,
while Mr. Jungles was the lead designer throughout the project—an unusual backward approach. In a sense,
it’s an “inside-out” house that started
outdoors and worked its way in.
Steven Brooke (4)
How a 1950s Miami Box Was Turned Into an Edenic Retreat Worthy of Gauguin; Adult-Size Aerie
THE TERRACE
The master bedroom was extended with a grid-like overhang and raised terrace that can be closed off for privacy with sliding
panels. The hanging basket seat and a massive Hugo Franca chair made from a gnarly species of Brazilian hardwood serve as
sculptural accent pieces. The terrace was further delineated with a narrow fire pit of river stones and a slit waterfall that pours
into the infinity swimming pool below.
UNITED STATES
THE LIVING ROOM
The entryway leads into a long living room that hardly feels like an “interior”
space at all. The eye is immediately drawn outside again through floor-to-ceiling
glass that spills out toward the central courtyard. Wall panels by Joaquim Tenreiro, reclaimed from a midcentury house in São Paulo, Brazil, dominate one end
of the room.
THE ENTRANCE
The entry was transformed from a standard driveway and front stoop into an elegant arrival sequence. Two columns rise from a garden pool that contains silver
Juncus grass, Nymphaea (water lily) and exotic fish, shaded by silver buttonwoods. (The stone columns—testigos (silent witnesses)—were carved by Colombian sculptor Hugo Zapata.) The outer shell of the original house was preserved
but transformed, using hidden pumps and drainage systems, to feel as if it had
been lifted above a river that flows underneath and cascades into the entry pool.
THE COURTYARD
The most magical part of the house is the central courtyard. Spanish moss hangs
from Simpson Stoppers and Senna trees; air plants, orchids and bromeliads
sprout mysteriously from forks in the branches. The sculptural settee and table
were carved by Hugo Franca from wood rescued from the Amazon Basin.
UNITED STATES
UNITED STATES
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AUTOS
Complacency Dogs Excellence of BMW’s 3
In Many Ways Impeccable, the New Generation Suffers a Bit From an Air of Privileged Incumbency
[ Rumble Seat ]
When in the
course of human
events someone
asks you which
fresh-off-the-boat
BMW 3-series you
want to drive for the week, you
say, “The fast one,” naturally. And
so I did. But I was wrong.
The correct answer was, the
slow one. I hereby invoke air
quotes.
The “slow” one is the 2012
328i, the base model for the new
generation of the legendary 3-series (the F30 chassis, in nerdspeak, replacing the E90). How
about some numbers? The F30 is
longer (3.7 inches) than its predecessor on a 1.9-inch longer wheelbase, with wider front and rear
tracks (1.5 inches and 2 inches, respectively) and is most readily
identified by new LED headlamp
assemblies that reside on the face
of the car like Poirot’s pince-nez.
The marquee hardware in this,
the company’s most consequential
automobile, is a new twin-scroll
turbo four-cylinder engine, codenamed the N20 because, well,
BMW engineers code-name everything. I’d like you to meet my
daughter, the Alpha-Heidi-5.
The high-pressure turbo 2.0-liter puts out a stout 240 horsepower and 260 pound-feet of
torque in a vast swath of tachometer—anywhere from 1,250 rpm to
in excess of 5,000 rpm. BMW puts
the 328i’s 0-60 mph acceleration
at 5.9 seconds, which is pretty
darn snappy for a 3,461-pound
four-door. Paired with the standard eight-speed automatic transmission and the auto stop/start
feature, as well as a driver-selected fuel-saving program called
“Eco Pro”—are there “Eco Amateurs,” I wonder?—the N20 also
posts an astonishing 36 miles per
gallon on the highway. Look for
that number to be blazed across
the advertising firmament in
months to come.
I do so wish this story were
about that car.
The fast one, the 335i delivered
to my hotel in Los Angeles, is a
more familiar construct, with
BMW’s excellent N55 singleturbo’ed 3.0-liter in-line six held
over from the previous generation
(300 hp/300 pound-feet). This engine is likewise wondrously free of
stiction and internal inertia and is
smoother than hot-buttered sin.
With the same eight-speeder, the
3,594-pound car sprints to 60
mph in about 5.4 seconds—i.e., a
half-second quicker than the
328i—but its fuel economy is a little less mind-blowing: 33 mpg on
the highway. There’s also the notinconsiderable $7,500 delta between the price of the four- and
six-cylinder models, or $3,750 per
cylinder.
So that’s the showroom calculus: $7,500, 0.5 seconds to 60, 3
mpg on the highway, and about
133 pounds of curb weight. Realworld car buyers should prefer
the four-cylinder car, reasoning
that the fractional loss of horsepower is more than compensated
by the 328i’s price, the fuel econ-
Dan Neil/The Wall Street Journal (2)
BY DAN NEIL
omy and the comparative lightness. As an enlightened car guy, I
should have been among them.
But no. In that moment when
the functionary at BMW offered
me any 3-series I wanted, I succumbed to maximalism. Maximalism is the mostly male mind-set
that assumes “more” is better.
Spare me your relativism on matters of weight/price/performance/
fuel economy. I will not measure
out my life in coffee spoons. I
want wider tires, bigger brakes,
harder suspension, faster windshield wipers. I want the El Presidente, the Venti, the subzero
sleeping bag, the full-frame CMOS,
the triple-core processor. This is
straight out of Thorstein Veblen,
the University of Chicago economist who coined the phrase “invidious comparison.”
Take care not to confuse Veblen with his contemporary Max
Weber, inventor of the carburetor.
How was the 335i? I have to
say, a little disappointing. Let’s
take styling. The F30’s enlarged
headlamp openings are pointless,
functionally and aesthetically, and
because the familiar glowing
irises of the instruments appear
unchanged, the car looks like it’s
flaring its eyes in haughty, Joan
Crawford-like insanity. The
owner’s manual recommends no
wire hangers.
This mild revision of the sheet
metal is altogether timid and unaffecting: The side light-line has
been pulled up from the rocker
panel into the doors; the Graf Zeppelin-like sculpting on the hood
has been toned down. A bore, in
other words. Frankly, I like the old
body style, and headlamps, better.
Also annoying: The F30’s sweeping interior redesign leaves the
6.5-inch LCD display clumsily
thrust through the top of the
dash, like an electronic Pop-Tart
leaving the toaster.
New for 2012 are three trim
packages: Sport, Luxury and Modern. Being the very model, I chose
the Modern trim level—think
Scandinavian hotel lobby—with
the strikingly weird “Fineline
Pure” textured wood trim. It
means to suggest driftwood. It
suggests topsoil erosion. If you
want leather seats with that, it’s a
punishing $3,600. Porsche and
BMW are currently competing to
see which can better rake consumers over the coals on optional upgrades. On the 3-series, the navigation and multicolor heads-up
display is $2,550. You’ll pay
$3,600 for the Premium package
(basically moonroof and leather
seats). The Sport Line package
(adaptive M suspension, some
trim and nice steering wheel) is
$2,500. Oh you want the leather
Sport seats? That’s another
$1,450. The good Harman Kardon
sound system? $950. Oof. BMW
appears to be getting procurement
lessons from the Pentagon.
Of course, dynamics are the 3series stock in trade, and here the
car delivers. The test 335i—with
18-inch all-season radials gripped
in the fender wells—practically
glided over the crumbly asphalt in
the Malibu canyonland with a
deeply settled stance that largely
quelled bounding and oscillation.
The struts-and-multilinks suspension is largely carry-over, but the
elastomerics have been tuned to
greater ride compliance and better NVH. There’s a small trade-off
in play here. In hasty corner-tocorner transitions, the car rolled
and pitched more than I had expected.
Yet the BMW-patented liveliness is still there, that sweet connectedness with the driver. The
revised speed-sensitive electric
steering offers excellent feel and
feedback. The fixed four-pot front
brakes are also impeccable. And,
as usual, the bounteous torque in
first through sixth gears and at
any rpm gives the car a hugely
willing and enthusiastic character.
Love that.
I would like to drive this car
with a proper set of sport tires on
it, though. I frequently found less
turn-in bite and more understeering in corners than I’d like, and
when I’d try to get the car to rotate with the throttle it balked,
even though I had it in the most
liberal performance setting,
Sport+, which allows quicker yaw
rates and less traction intervention. Over and over again, the car
seems to be waiting on the tires
to regain purchase.
The 3-series is still, and again,
an excellent car: state-of-the-art
driver-assist technologies, great
switchgear and materials, flawless
dynamics, stellar fuel economy,
even with the six-cylinder. Heck,
even the trunk is bigger. And yet
the F30 project still manages to
convey a certain privileged incumbency and laurel-resting about it,
if not raw profit-taking. The pace
of excellence definitely has slowed
with the F30.
Unfortunately for BMW, it’s
happening just as the competition
is speeding up.

WORLD NEWS - English Language Learning

Transcription

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