Britons Get Their Say on EU

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Yaroslav Trofimov
Turkey’s Rift
With Russia
MIDDLE EAST
CROSSROADS | A2
FRIDAY - SUNDAY, JUNE 24 - 26, 2016 ~ VOL. XXXIV NO. 101
* *
S&P 500 2113.32 À 1.34%
Business & Finance
W agreed to pay over
$10 billion to settle
claims from U.S. owners of
diesel vehicles affected by
the emissions scandal. A1
V
Denmark’s Maersk is replacing its CEO and considering splitting itself up by
separating some units from
it shipping business. A1
The largest U.S. banks
have bolstered their defenses
against a downturn, signaling many will win Fed approval to boost dividends. B5
BSI said it is appealing
“flawed” actions by Swiss
regulators over the bank’s
dealings with 1MDB. B5
Merrill Lynch will pay
$415 million to resolve accusations by the SEC that it
misused customer cash. B5
Angola is tapping international lenders for about $1
billion, as it tries to cope
with the fall in oil prices. B5
Oil firms are pumping
more oil in the Gulf of Mexico
despite the price drop. B1
Hyundai is in talks to join
the world’s largest shipping
alliance as it struggles to
survive an industry slump. B1
Led Zeppelin didn’t steal
the opening of “Stairway to
Heaven,” a jury decided. B1
World-Wide
Britons voted on whether
to remain in the EU, after a
campaign that has divided
the country and underscored the U.K.’s ambivalence about the bloc. A1, A3
Islamic State has begun
posting digital propaganda
in Portuguese, in a challenge
to Brazilian security officials
ahead of the Olympics. A1
U.S.-backed forces entered the Islamic State-controlled city of Manbij in
Syria for the first time. A4
A gunman stormed a German cinema, firing shots and
taking hostages before he
was shot dead by police. A3
The Supreme Court
blocked Obama’s plan to defer deportation and provide
work authorization to millions of illegal immigrants. A7
The U.S. Senate refused
to kill a bipartisan effort to
keep some suspected terrorists from buying firearms. A7
The pope will visit an Armenian memorial to victims
of the 1915 massacre, risking
a new rift with Turkey. A4
Egyptian officials will
send the EgyptAir black
boxes to France for repair,
slowing efforts to find the
cause of the crash. WSJ.com
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Voters Across the U.K. Take Part in Momentous Referendum
EUROPE EDITION
DLR ¥105.86 À 1.39%
VW Near
Deal to
Pay U.S.
Owners
BY MIKE SPECTOR
AND SARA RANDAZZO
From left, a Chelsea pensioner, a voter in Priors Dean, Hampshire, and a nun at polling stations during Thursday’s referendum on the EU.
Britons Get Their Say on EU
Divided country votes
on whether to remain
in the European Union
or go its own way
Jo Dove voted on Thursday
for Britain to leave the European Union. Her husband Bob
voted to stay.
The question of whether the
U.K. should end its four-decade
bond with Europe has divided exit—or “Brexit”—could hurt
families like the Doves, who his business with France and
own one of Lonlower the value
don’s
oldest
of the building
By Ese Erheriene
butcher shops.
he owns just
in London,
Ms. Dove says
south of the
Scott Patterson
the U.K. has
Thames. “I’m
in Sunderland, England
ceded too much
doing it for perand Stu Woo
power to Brussonal benefit,”
in Girvan, Scotland
sels. “I just think
he said.
we need to have our say and
From London’s stormy
take back control,” she said.
southern outskirts to the
Her husband says a British sunny banks of Scotland’s
BY REED JOHNSON
AND ROGERIO JELMAYER
SÃO PAULO—Islamic State
has begun posting digital propaganda in Portuguese, presenting an apparent threat
and a new challenge to Brazilian security officials just six
weeks before the start of the
Olympic Games.
The postings, which have
surfaced on encrypted webpages and an instant-messaging platform, lay out the tenets of the radical militant
group. Brazil’s federal intelligence agency, the ABIN, told
OFF DUTY | W1
Paris’s Most Storied Address
MANSION | W9
When Fake Decor Beats the Real Thing
Maersk
Ousts CEO,
Considers
Split-Up
Danish conglomerate A.P.
Møller-Maersk A/S—buffeted
by the worst ocean-shipping
downturn in years and a historic oil-price rout—said on
Thursday it is replacing its
chief executive and considering splitting itself up.
Maersk said Søren Skou,
now chief executive of its
large shipping business, would
take over from Nils S. Andersen as the head of the entire
company, starting next month.
The 51-year-old’s first task will
be to decide whether to disband the holding company.
Apart from shipping and
energy, Maersk operates ports,
an oil-drilling service company
and other businesses. Maersk
Chairman Michael Pram Rasmussen said the board wants
Mr. Skou to help determine a
Please see MAERSK page A2
The Decision
For the latest on the U.K.’s
vote on the European Union,
please go to WSJ.com.
River Clyde, voters showed
deep rifts in their vision for
the country. Leave supporters
said the U.K. is struggling under the EU’s rules and open
Please see VOTE page A2
Volkswagen AG agreed to
pay more than $10 billion to
settle claims from U.S. owners
of diesel-powered vehicles affected by the German auto
maker’s emissions-cheating
scandal, said people familiar
with the matter.
The proposed deal would
address owners of nearly
500,000 diesel-powered vehicles with two-liter engines
that contain software capable
of duping government emissions tests, the people said.
The arrangement would encompass buying some vehicles
from consumers or making
their vehicles compliant with
environmental regulations,
and also provide additional
compensation to owners, the
people said. Volkswagen plans
to repurchase vehicles based
on their value in September
before the emissions-cheating
crisis was disclosed, one of
the people said.
Consumers are expected to
get at least $5,100 and in
some cases could receive up to
$10,000, beyond a buyback or
repair, the person said.
Separately, Volkswagen is
expected to pay more than $4
billion for environmental remediation efforts and to promote so-called zero-emission
vehicles, the people said.
Volkswagen could face additional government penalties,
Please see VW page A6
Brazil Braces for Terror
Threat at Olympic Games
Inside
BY COSTAS PARIS
Delivering news and insight
on finance and markets
from London
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What’s
News
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Dumbo Doesn’t Fly at Disney’s
New Shanghai Theme Park
i
i
i
Attractions get renamed to make sense
in Chinese; Little Flying Elephant
BY BEN FRITZ
SHANGHAI—When Qi Zhu
visited Shanghai Disneyland on
a day of testing before the
theme park opened June 16, she
was confused by its
slogan: “Ignite the
magical
dream
within your heart.”
When translated into
Chinese, those words
can easily be read as
“strange dream.”
“I was like: ‘What
is
a
strange
dream?’ ” says Ms.
Qi, a marketing employee at a Shanghai
company. “Why would I want a
strange dream in a park?”
Walt Disney Co. spent more
than six years planning every
detail of its new world of princesses, superheroes and swashbuckler Jack Sparrow, which has
cost more than $5.5 billion and
is expected to attract more than
10 million people in its first
year.
It hasn’t been easy, though,
to translate the Disney magic
from English to Chinese. In order to
make sense to local
visitors and mesh
with their cultural
sensibilities,
the
names of some attractions at Shanghai
Disneyland read very
differently in the two
languages posted on
signs throughout the
theme park.
Because the animated classic
“Dumbo” is little-known in
China, the Shanghai Disneyland
ride inspired by the movie is
Little Flying Elephant when
written in the simplified characPlease see DISNEY page A6
The Wall Street Journal on
Thursday that Islamic State’s
Portuguese-language channel
reflects its “extremist ideologies.”
“The opening of this new
front of disseminating information aimed at extremist indoctrination, directed at the
Portuguese-speaking public,
increases the complexity of
the work of confronting terrorism, and represents an additional facility of radicalizing
Brazilian citizens,” ABIN said.
The postings are the latest
threat aimed at Brazil—or
more likely at the U.S. and
other
Olympics
participants, some analysts say—by
the violent organization that
has claimed responsibility for
recent massacres in Paris,
Brussels, San Bernardino, Orlando and other locales.
Following the November attacks in Paris that killed 130
people, Maxime Hauchard, a
French member of Islamic
State, posted a tweet reading,
“Brazil, you are our next target.”
Brazilian officials have said
that while the warnings are
credible, the country is alPlease see BRAZIL page A6
A2 | Friday - Sunday, June 24 - 26, 2016
* *
THE WALL STREET JOURNAL.
WORLD NEWS
Ankara’s Rift With Moscow Frays Turkic Ties
MIDDLE EAST CROSSROADS
YAROSLAV TROFIMOV
KAZAN, Russia—A statue
here in the capital of Russia’s
Tatarstan republic was meant
to symbolize the intimate
links between this Turkicspeaking region and Turkey.
Born nearby, Tatar politician Sadri Maksudi was a
leader of Russia’s Muslims a
century ago.
Then, forced
into exile by
the Communist revolution, he became one of
the closest advisers to Mustafa Kemal Atatürk, helping
him create the modern Turkish state.
A senior visitor from
Ankara, possibly even President Recep Tayyip Erdogan
himself, was supposed to
unveil the statue in Kazan’s
riverside Istanbul Square
last year. Then, Turkey
shot down a Russian warplane on the Syrian border
and relations between the
two countries went into a
tailspin.
The empty pedestal on
which the statue was supposed to be erected here remains boarded up, another
symbol of the bitter breakup
between Russia and Turkey.
L
ong a gateway to Turkish investment in Russia, industrial Tatarstan—home to 3.8 million
people—has tried to blunt
PRESIDENTIAL PRESS SERVICE/ASSOCIATED PRESS
A
ffected the most by
this enmity are the millions of Turkic speakers in Russian regions such as
Tatarstan and, to a lesser extent, in the Turkic post-Soviet
states of Central Asia.
Over the past quartercentury, they have all built
close business, educational
and cultural ties with Turkey. With no reconciliation
in sight between Mr. Erdogan and Russian President
Vladimir Putin, some of
these relationships now are
coming apart.
“We have always thought
of the Turks as our brothers.
When Turkey acted, it
should have considered not
only those who live inside
Turkey itself, but also their
ethnic kin, taking into account the interests of the entire Turkic world,” said Marat Safiullin, a Tatar
economist and vice-rector of
the Kazan Federal University.
As part of Russia’s sanctions, the university has had
to suspend its many cooperation programs with Turkish
universities, sending home
Turkish exchange students
and recalling its own. The
Turkish studies center in Kazan shut down and Tatarstan, along with several
other Russian Turkic republics, also pulled out of Turksoy, a cultural organization
uniting Turkic countries and
regions.
Kazakhstan President Nursultan Nazarbayev, left, and Turkish President Recep Tayyip Erdogan in April.
the impact of Moscow’s
sanctions. Authorities in Kazan, for example, have negotiated an exemption from
Russia’s ban on Turkish
workers for employees of the
roughly 400 Turkish companies operating here. But new
projects are on hold.
“Tatarstan did its best to
protect the Turkish investors. It was an act of courage,” said a Turkish official.
“But despite all of Tatarstan’s activities, the general
confidence of Turkish investors has been broken.”
Frequent harassment by
Russian federal immigration
and security authorities has
made business increasingly
difficult, the Turkish official
said, and has also prompted
many of the Turkish students who studied in Tatarstan outside the exchange
programs to transfer home.
Shamil Ageev, the president of the Tatarstan Chamber of Commerce and Industry, said he hoped the ties
would survive this crisis.
“The ethnic factor, understanding each other’s language, it’s important for us,”
he said. “We must in any
case preserve the business
relationships that took decades to establish. Our position is that Erdogan is not
all of Turkey.”
In fact, Mr. Erdogan’s
global ambitions have
alienated many Turkic
countries and regions even
before the November warplane downing.
“His policy was more proMuslim Brotherhood than
pan-Turkic, and this was not
viewed well by the Central
Asians who were never crazy
about Turkey’s Islamization
under Erdogan,” said Soner
Cagaptay, director of the
Turkish program at the
Washington Institute for
Near East Policy.
Also, despite the budding ties with Turkey, Russia has remained a far more
important partner even for
the independent Turkic
Continued from Page One
borders. EU backers worried a
Brexit would slam the British
economy.
Some voters said they chose
to leave because of concerns
immigrants would take their
jobs; others voted to stay because they welcome the influx
of young, foreign workers.
Prime Minister David Cameron offered the referendum as
an election-year promise in
2015. The vitriolic campaign
reached its nadir on June 16
when pro-EU lawmaker Jo Cox
was shot dead in Yorkshire by
a man who, a witness said,
shouted “Britain First.”
Hours earlier, the anti-EU
UK Independence Party unveiled a campaign poster
showing a massive line of Middle Eastern refugees that even
some of the party’s allies decried as fear mongering.
In the final days of the campaign, pollsters said the race
was still too close to call.
Among those who wrestled
with their decision were
Joshua Gibson and Anna Hart,
both 25 years old.
“Initially I wanted to vote
leave,” said, Mr. Gibson, an account manager in South London, because of the pro-Brexit
MAERSK
“possible new structure,” including potentially “abolishing
the group” as an umbrella
holding company.
The twin moves surprised
investors, and sent the Copenhagen-based company’s shares
up 12% on Thursday to 9,140
Danish krone (about $1,388).
Its Maersk Line shipping
business, the biggest global
operator of container ships by
capacity, has slashed jobs,
slowed expansion of its fleet
and cut other costs as it struggles with falling rates and industry overcapacity. Those
headwinds have triggered a
frenzy of consolidation among
its smaller competitors. Until
recently, Maersk said its scale
would cushion it from the
worst of the downturn.
Meanwhile, nearly two
years of low crude-oil prices
have sapped its energy unit.
Maersk
is
controlled
through a foundation by its
founding family, which built
the business from a steamship
company started in 1904.
The company’s board determined Mr. Skou was best
placed to potentially break up
the company, given that he
leads its biggest unit, people
with knowledge of the situation said. Mr. Skou rose
through the ranks after joining
OLI SCARFF/AGENCE FRANCE-PRESSE/GETTY IMAGES
VOTE
A tribute to slain Member of Parliament Jo Cox at a poling station in Bartley, northern England, on Thursday.
campaign’s claim that the U.K.
sends £350 million (about
$520 million) a week to Brussels. “But then I realized that
leaving a free-trade union and
not being able to get access to
that again didn’t make any
sense.” He voted to stay in.
Ms. Hart, a receptionist,
hadn’t yet made up her mind.
She planned to vote after work
to buy herself more time but
didn’t understand what each
side of the campaign stood for.
Ms. Hart had asked her mother
to explain the key arguments,
but she didn’t understand
them either.
Scrolling through Facebook
and watching clips on Snapchat, where she gets much of
her information, Ms. Hart said
she’d likely just vote Remain
like the majority of her friends
had posted on Facebook. “Even
though they’re writing things,
I don’t think they even get it
either,” she said.
Many voters said they felt
they couldn’t trust the leaders
of either campaign.
“Nobody was telling us
straight what we needed to
know,” said Elaine White, 60,
who lives in North London and
is on disability benefits.
She said she’s a longtime
supporter of the Labour Party,
which is pro-EU, but felt she
couldn’t get a clear message
from its leader, Jeremy Corbyn. So Ms. White says she
voted to leave.
In Sunderland, an industrial
city in northeast England, proBrexit voter sentiment competed with the desire of leaders of the region’s major
employer, a Nissan factory, to
stay within the union.
“Why should we have them
telling us what to do, how to
spend our money?” said Terry
Allen, a 42-year-old construction worker.
“Europe has become a stag-
the company in 1983.
Mr. Andersen, 57, joined the
company from Danish brewer
Carlsberg A/S in 2007. He was
viewed as better suited to running the units as part of a umbrella company, the people
said. Mr. Andersen said he was
proud of Maersk’s results under his leadership. “I find it is
the right time for both me and
A.P. Møller-Maersk to make a
change. Søren has all the qualities it takes to take the group
through to the next strategic
step,” he added.
port operator APM Terminals.
It also includes offshore oil
drilling unit Maersk Drilling,
freight-forwarding company
Damco and Svitzer, a company
involved in towage and emergency response. None of the
units are currently listed.
Analysts said a split-up
could help unlock shareholder
value. But Lars Jensen, who
runs Copenhagen-based SeaIntelligence Consulting, said Mr.
Skou’s dual role should be
short-lived. “The move to split
up the company should come
very soon so he concentrates
on the shipping side, which is
facing major challenges,” Mr.
Jensen said.
Maersk Line accounts for
more than half of the company’s total revenue. The shipping industry is facing one of
its longest-ever downturns.
Excess shipping capacity in
the water and falling demand
have sunk freight rates to levels barely covering fuel costs
over the past year.
In May, Maersk reported a
first-quarter profit of $211
million, compared with $1.54
billion a year earlier. Its Maersk Line unit said freight rates
fell by 26% in the quarter
compared with a year earlier.
Last year, he announced the
company was cutting 4,000 of
its 23,000 land-based staff by
the end of 2017. He also reversed course on Maersk’s ambitious plans to invest in new
ships by slowing the additions.
The company had said that its
ability to boost its fleet as
smaller operators cut back
would allow it eventually to
gain market share.
There are few signs of an
industry turnaround. On
Thursday, debt rating firm
Moody’s Investors Service said
plummeting freight rates and
excess capacity would eat into
profits faster than earlier estimated. The rating agency said
it now expects combined earnings before interest, taxes, depreciation and amortization
for shipping lines to fall be-
tween 7% and 10% this year,
faster than the low-singledigit percentage decline it had
forecast in March.
Maersk Oil, meanwhile, reported an underlying net loss
of $29 million in the quarter,
compared with a profit of
$207 million the year before.
That was with an average per
barrel price of oil at about
$34, compared with a yearearlier $54. At the time, Maersk said the unit expected to
be able to break even if oil
prices averaged between $40
and $45 a barrel for the year.
Maersk Line
accounts for more
than half of total
revenue.
Mr. Rasmussen said the
board would update investors
on the progress of any restructuring plans by the end
of the third quarter.
“The question is whether
we have the right structure or
whether we should change it,”
he said in an interview. “Our
companies are self-running, so
the consideration is whether
they should operate as independent units.” He said some
could eventually be listed.
Mr. Skou will remain chief
executive of Maersk Line. The
Maersk group also includes
Maersk Tankers and Maersk
Oil, its energy unit, and the
CORRECTIONS AMPLIFICATIONS
The name of Yang Xianghua, senior vice president of
Baidu Inc.’s video arm iQIYI,
was incorrectly given as Yang
Xiangdong in the China Circuit
column Thursday about more
users agreeing to pay for online video subscriptions.
A collaboration between
fashion line Vetements and
sunglasses designer Linda
Farrow was canceled after the
article about Vetements in
the July/August issue of WSJ
Magazine had gone to press.
The article said the Vetements show July 3 in Paris
would include a collaboration
between the two.
The show “Pierre Paulin”
opened at Galerie Perrotin
New York on Wednesday. An
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subject of the exhibit, in the
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opening Thursday.
Logan Demmy is head bartender at the Singapore bar 28
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about Singapore cocktail bars
in the July/August issue of
WSJ Magazine incorrectly
said 28 HongKong Street is
headed by Michael Callahan.
Readers can alert The Wall Street Journal to any errors in news articles by
emailing [email protected].
states. As a result, none of
the leaders of Central Asia’s
four Turkic countries, let
alone Russia’s several Turkic regions, took Mr. Erdogan’s side. Even Almazbek
Atambayev, the president of
Kyrgyzstan who had enjoyed a close friendship
with Mr. Erdogan, described Ankara’s decision to
shoot down the Russian
warplane as “the deepest
mistake.”
Y
et Kyrgyzstan and Kazakhstan, the two Turkic countries bound by
a formal defense treaty with
Moscow, have also sought to
minimize the fallout.
Neither of them has followed Russia’s example in
imposing visas on Turks, or
implemented any sanctions.
“It’s clear that some circles in Russia had wanted
Kazakhstan to be more pronounced in its support of
Russia,” said Rustam Burnashev, a political scientist at
the Kazakhstan German University in Almaty. “But Kazakhstan’s position has long
been to avoid putting itself
in the field of tensions.”
In Kyrgyzstan, the Turkish-run network of schools
and universities has remained a major part of its
education system, amplifying
Ankara’s soft power.
“Turkish businesspeople
still feel here like they are at
home,” said Kyrgyzstan’s former foreign minister, Alikbek
Jekshenkulov. “The authorities have succeeded in a balancing act between Turkey
and Russia.”
nant monster,” said Richard
Matthews, 56, a contractor for
Nissan. He said the EU economy is dragging the U.K. down.
Peter Sendall, who works in
research-and-development for
Nissan, disagreed. He said the
bloc is good for business.
When it comes to industry, he
said a country “can’t go on
your own.”
People on all sides had a
common complaint: They resented the tenor of the campaign. Several voters said they
felt the Brexit camp exaggerated the immigration issue,
while the other side exaggerated economic doomsday scenarios.
“It brought the worst of us,”
said Jonathan Kester, an Anglican priest in North London,
“the xenophobia, the racism.”
Mr. Kester said he chose to remain because he believes EU
membership makes the U.K.
stronger.
In their nearby butcher
shop, Ms. Dove was chopping
meat while her husband swept
gristle from the floor. The couple said they discussed Brexit
at length before deciding they
wouldn’t be able to convince
each other.
—Denise Roland, Katie
Riordan, Selina Williams,
Georgi Kantchev
and Jasmine Horsey
contributed to this article.
International crude prices are
now about $50 a barrel, after
trading near $30 earlier.
A.P. Møller-Mærsk was
founded by captain Peter
Mærsk-Møller and his son Arnold Peter Møller in 1904.
—Kjetil Malkenes Hovland
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WORLD NEWS
Centuries of turmoil
and tension lie behind
the U.K.’s ambivalence
toward Europe
BY ALISTAIR MACDONALD
AND JASMINE HORSEY
It isn’t just the English
Channel that separates the
U.K. from the rest of the European Union. Behind the island
nation’s decadeslong ambivalence about the bloc lie centuries of political and historical
differences.
The U.K. voted Thursday on
whether to continue its 43year membership in the bloc,
the first such vote by a member of the modern EU. From
the beginning, the country has
been less enthusiastic than
most of the EU’s now 27 other
states.
Britain’s history, aided by
the surrounding seas, helped
insulate it from some of the
political and military turbulence that pushed countries
from Germany to Poland to
embrace the union.
Its centuries of maritime
power encouraged it to look
far beyond Europe for trade
and influence, driving the creation of an empire that
spanned the globe.
That feeling of being apart
from Europe suggests that
even if the U.K. voted to remain in the EU, it won’t end
its awkward fit. The country
will likely continue to struggle
with the Continent.
“To a country which defines
itself by its independent
past…there has remained a national bipolarity over Europe
that is unlikely to be put to
rest” on referendum day, said
James Ellison, an expert in international affairs at Queen
Mary University of London.
British statesmen were
among the earliest to talk of a
union of European nations.
Robert Gascoyne-Cecil, the
marquess of Salisbury and Victorian-era prime minister,
talked of a “federation of Europe” as the only hope of
averting regional war, while
Winston Churchill called for a
United States of Europe in the
aftermath of World War II.
But the U.K. would only join
what became the modern-day
EU in 1973, almost a quarter of
a century after the union began, entering at a time when
its empire had faded and its
economy trailed most international peers.
For many Britons, the rationale was about becoming part
HULTON ARCHIVE/GETTY IMAGES
Turbulent Past Strains Britain’s EU Ties
Then-opposition leader Margaret Thatcher supported Britain’s EU membership in a 1975 referendum.
of a trading group, whereas
for many of its European
neighbors there was also a
large motivation born of security and political considerations.
“For France, Italy and Germany, the union meant peace
after the war, for Spain and
Portugal, democracy after fascism, for East Europeans security from Russia and prosperity,” said Carles Casajuana, a
former senior Spanish diplomat and ambassador to the
U.K.
While it is an aggressive
military power, the U.K. hasn’t
seen a pitched battle on its
mainland since 1745 when government forces fought a Scotsled rebellion—and it has been
far longer since the country
endured a ground assault from
abroad.
“We are an island with a
long history,” said Malcolm
Rifkind, a former British foreign and defense secretary. “A
lucky island, because we ha-
ven’t been invaded since
1066,” he said, referring to the
Norman conquest by an army
from what is now northern
France.
Britain’s victories in European clashes from Waterloo to
WWII’s Battle of Britain established a still-potent national
identity of the plucky islanders who stood tall against European dictators.
That imbued many Britons
with a sense that the country’s
biggest problems came from
continental Europe and its major allies, the U.S., Canada and
other Commonwealth nations,
were farther afield. “In my
lifetime, all the problems have
come from mainland Europe,
and all the solutions have
come from the English-speaking nations across the world,”
former Prime Minister Margaret Thatcher said.
While other nations are increasingly restless with the
EU, some observers say that
Britain’s former status as the
world’s military and economic
superpower has given it an arrogance that made it harder
for the country to see itself as
a subset of Europe.
There are also key differences between the political
systems in Europe and the U.K
that means the British find integration less attractive.
Unlike most European nations the U.K. doesn’t have a
written constitution and, like
the U.S., the U.K. uses a firstpast-the-post voting system
rather than the proportional
representation practiced in
many other parts of Europe.
For many Britons, such differences are part of their national identity.
“The British have never
been comfortable Europeans,”
Mr. Ellison said.
Police scramble outside a movie theater complex near Frankfurt, where an armed man briefly took hostages before he was shot dead.
German Police Kill Gunman in Cinema
BY RUTH BENDER
AND WILLIAM WILKES
BERLIN—A masked gunman
stormed a movie theater in a
small
western
German
town Thursday, firing shots
and briefly taking hostages before he was shot dead by police.
None of the hostages was
injured in the attack.
The incident came amid
fears that a spate of shootings
and terror attacks committed
in Western capitals could hit
Germany. It was unclear late
Thursday if the incident was
related to terrorism.
“We don’t have any indications at this stage that this
was a terror attack but we
can’t exclude anything,” said a
spokeswoman for the prosecutor’s office in Darmstadt.
Peter Beuth, the interior
minister of the state of Hesse,
described the man as making a
“confused impression.” The
prosecutor’s office said that as
of Thursday evening the assailant hadn’t been identified.
Neither the prosecutor’s office in Darmstadt nor police
would confirm a report on
German daily Bild’s website
that police found an explosive
belt and a hand grenade next
to the dead attacker.
Police on the ground said at
least two stores near the cinema on the shopping center’s
grounds had been briefly evacuated during the incident.
Germany has been spared a
major terrorist attack in recent years but it has seen a
smattering of isolated, violent
incidents and a number of arrests related to alleged Islamist terrorist plots.
The unfolding of events in
the small industrial town
of Viernheim, some 45 miles
south of Frankfurt, remained
sketchy. Police officials said
the man who entered the
movie theater was masked.
He stormed the complex located in a shopping mall
armed with a long gun shortly
before 3 p.m. local time. He
fired four shots and took several hostages, Mr. Beuth said
in the state parliament.
Guri Blakaj, a ticket clerk
who works at the movie theater, described the assailant as
a “thin white man.”
“He was not very tall and
appeared to be around 20
years old,” Mr. Blakaj said.
“He came in and people
said, ‘Please don’t shoot,’ ” the
21-year-old resident of Viernheim said. “I asked if he
wanted money and he said, ‘I
don’t want money’ and then
he went into the theater area,”
Mr. Blakaj said.
Police and the prosecutor’s
office said they couldn’t yet
comment on the identity of
the man.
There were nine employees
and 30 guests in the cinema at
the time, said Gregory Theile,
manager of the Kinopolis
group of movie theaters.
According to Mr. Blakaj,
children’s movies were being
shown in several theaters in
the movie complex at the time
of the incident. Mr. Blakaj said
it took almost an hour for the
police to arrive. Christiane Kobus, a spokeswoman for the
police in Darmstadt, said police arrived shortly after receiving the first phone calls at
around 2:45 p.m. local time.
—Anton Troianovski
and Zeke Turner
Eurozone Recovery Runs Into Hurdles
BY PAUL HANNON
The eurozone economy
likely slowed in the three
months to June after a firstquarter pickup, according to
surveys of purchasing managers that highlighted weakness
in France, the currency area’s
second-largest economy.
The surveys suggest the eurozone entered a fourth year
of recovery in the second
quarter, but remained stuck in
a combination of low growth
and subdued inflation that it
shows few signs of escaping
soon.
Surveys of purchasing managers released Thursday indicate that private-sector activity slowed in June, possibly
held back by uncertainty
ahead of the U.K.’s vote on
whether to remain in, or leave,
the European Union.
The apparent failure of the
currency area to sustain the
higher rate of growth it enjoyed in the first three months
of the year also reflects more
homegrown difficulties.
Since mid-2014, the European Central Bank has
launched a series of stimulus
programs intended to boost
growth and lift inflation. By
contrast, governments have
been slow to overhaul rigid labor markets and address other
impediments to growth.
The pace of the recovery
has been little changed since it
began in mid-2013. Economists
expect the eurozone to grow
at roughly the same 1.6% rate
this year as it did in 2015.
Data provider Markit said a
headline measure of activity
based on responses from 5,000
companies around the eurozone, known as the composite
purchasing managers index,
Fresh surveys of
purchasing managers
point to a slowdown
in June activity.
fell to 52.8 in June from 53.1
in May, reaching its lowest
level since late 2014.
Markit said that over the
three months to June, the
composite PMI suggests quarter-to-quarter growth of 0.3%,
half the rate of expansion recorded in the first quarter.
“June’s survey data point to
steady though disappointingly
lackluster economic growth,”
said
Chris
Williamson,
Markit’s chief economist.
The surveys also highlighted a contrast between the
eurozone’s two largest members. While Germany’s PMI
continued to point to solid
growth, France’s measure fell
below the 50.0 mark, signaling
a slide into contraction.
The French economy had
picked up in the first three
months of the year, and the
scale of the drop in June PMI
surprised economists, who
said it may be linked to broad
protests against President
François Hollande’s labor bill.
To understand why the
European Union has such a
bad reputation with many
citizens and businesses, the
protracted fight over weedkiller glyphosate is a good
place to
start. The
trail doesn’t
lead to
power-grabbing Brussels bureauBRUSSELS
crats, but
BEAT
GABRIELE
rather to
STEINHAUSER national
governments passing an unpopular decision on
to their favorite boogeyman.
Glyphosate, the active ingredient in Monsanto Co.’s
Roundup and other herbicides, is widely used in agriculture, landscaping and gardening. But environmental
and public-health groups
have long campaigned
against the substance, warning it poses risks to human
health and biodiversity. Last
year, the World Health Organization’s International
Agency for Research on Cancer said glyphosate “probably” has the potential to
cause cancer in humans.
At the end of June, glyphosate’s authorization in
the EU runs out, and a European Commission proposal
to extend it failed to secure
the necessary majority
among the bloc’s 28 member
states. Could this be a rare
victory of civil society over
corporate power?
Not exactly. In fact,
Roundup and other glyphosate-containing products
are unlikely to disappear
from European garden sheds
and farmers’ spraying machines this year. Tiny Malta
was the only country that
actively voted against a renewal of glyphosate’s sales
license, with many opting to
avoid voting altogether. That
leaves the commission, the
EU’s executive, with little
choice but to extend authorization next week.
The commission initially
proposed to give glyphosate
another 15-year license,
based on a review by the European Food Safety Authority that concluded glyphosate was unlikely to be
carcinogenic for humans. It
quickly became clear, however, that the plan couldn’t
get the support of a qualified
majority: 16 countries or
more representing at least
55% of the EU’s population.
France and Italy indicated
they would oppose a renewal
if it went to a formal vote,
while Germany said it would
abstain given a dispute in
the governing coalition.
Germany’s center-left en-
vironment minister was
against a new authorization,
while the center-right agriculture minister wanted glyphosate to remain available
to farmers, who use it on
some 40% of their land, according to the Glyphosate
Task Force industry group.
A whittled-down proposal, in which the commission cut the renewal period
down to nine years, also
failed to get sufficient support. With just weeks to go
until the license expired, the
EU’s health commissioner,
Vytenis Andriukaitis, presented a final plan in early
June: Member states should
extend the glyphosate’s authorization by 12 to 18
months, enough to allow the
European Chemicals Agency
to assess the substance’s
health effects.
OLIVIER HOSLET/EUROPEAN PRESSPHOTO AGENCY
ALEXANDER SHEUBER/GETTY IMAGES
Weedkiller Spat
Shows How Blame
Falls to Brussels
The EU’s Vytenis Andriukaitis
It didn’t work out. Although Malta, whose
400,000 citizens represent
less than 0.1% of the EU’s
population, was the only
country to vote against the
plan, those countries voting
in favor didn’t meet the 55%
population threshold. Seven
of them abstained, including
Germany, Italy and France.
In effect, member states’
failure to either support or
vote down the plan hands
the decision over glyphosate
back to the commission,
which is widely expected to
stand by its plan for a 12- to
18-month extension. Mr. Andriukaitis complained about
the “ambiguous position of
certain member states,
which were seeking to induce the commission to take
a decision in their stead.”
A commission decision to
extend the EU lifetime of
glyphosate will shield governments from protests by
angry farmers as well as
concerned citizens. But the
blowback the EU executive
will face could one day leave
national politicians without
a convenient scapegoat.
—Inti Landauro and Andrea
Thomas contributed to this
article.
HK JP
KO ML
SI
IN UK
FR
MN PR
WORLD NEWS
U.S.-Backed Force Moves to Take Syria City
Arab, Kurdish fighters
push into Islamic Stateheld city; aim to close off
access to Turkish border
U.S.-backed forces entered
the Islamic State-controlled
city of Manbij in Syria for the
first time on Thursday, advancing on an area that anchors the extremist group’s
last remaining stretch of territory along the Turkish border.
After weeks of battle to
capture the villages surrounding Manbij and encircle the
city, Arab and Kurdish forces
backed by more than 230 U.S.
coalition airstrikes entered the
western edge of the city, said
Ahmad Hisso Araj, a spokesman for the U.S.-backed coalition known as the Syrian Democratic Forces.
Clashes were taking place
inside the city, according to
the U.K.-based Syrian Observatory for Human Rights, an opposition monitoring group.
The coalition had previously
said it was holding off on
storming the city for fear of
harming civilians still caught
inside. Some civilians remain
in the city, Mr. Araj said.
The U.S.-led Combined
RODI SAID/REUTERS
BY RAJA ABDULRAHIM
Fighters of the Syrian Democratic Forces, an Arab and Kurdish coalition backed by the U.S., stood in a building near Manbij on June 17.
Joint Task Force, which is
overseeing the battle against
Islamic State, said the allied
ground force has been refining
plans for the past week on
how to gain a foothold in the
city and to protect civilians
trapped inside.
The statement said those
forces have consolidated their
position around the city but
didn’t say whether they had
entered yet.
Taking control of Manbij
would be a significant step toward closing off the 60-mile
stretch of territory still controlled by Islamic State along
the Syria-Turkey border. The
group continues to funnel foreign fighters through this area
in Aleppo province.
Syrian anti-Islamic State activists say the militants are
preparing to defend the city by
planting explosive devices, an
often-used tactic. A video re-
leased by Islamic State-affiliated media this month showed
boys and men joining the group
in preparation of the battle.
Earlier this month, U.S. Secretary of Defense Ash Carter
said Islamic State had used its
base in Manbij to hatch plots
against Europe, Turkey and the
U.S. “So it’s an important objective for us and for the counter-ISIL fight in general,” said
Mr. Carter, using an acronym
for the group.
Islamic State has faced increasing challenges to the
wide swath of territory it controls across Syria and Iraq.
Last week, Iraqi forces entered
the Islamic State-held city of
Fallujah and now control at
least half of the city.
The offensive in northwest
Syria has cut off the road linking Manbij with Islamic State’s
de facto capital of Raqqa, isolating the city from the border
and potential reinforcements.
The Syrian Democratic
Forces aren’t the only ones
who are attempting to seize
territory from Islamic State in
Raqqa province.
The Syrian regime launched
an offensive this month from
neighboring Aleppo province
toward the Tabqa air force
base, about 30 miles west of
Raqqa, which it lost to the
radical group in 2014.
Backed by Russian airstrikes, regime forces were
briefly able to take control of
an oil field and a few towns
before being beaten back by
Islamic State militants this
week.
—Noam Raydan
Pope Francis travels Friday
for a three-day trip to Armenia,
where he will visit the memorial
to those who died in the 1915
massacre of Armenians by
Turks, potentially straining relations between the Vatican and
Ankara again.
The trip also comes just after
a major outbreak of violence in
the turbulent Caucasus region,
when ethnic Armenian separatists fought Azerbaijani forces
for four days in April over the
breakaway region of NagornoKarabakh.
The main question when
Pope Francis goes to the Tsitsernakaberd Memorial Complex in
the Armenian capital of Yerevan
on Saturday is whether he will
echo his description last year of
the mass killings by Ottoman
forces as the “first genocide of
the 20th century.”
Turkey responded to the
2015 statement, made during a
commemorative Mass in St. Peter’s Basilica, by immediately recalling its ambassador to the
World
Watch
NORTH KOREA
Leader Hails Launch
Of Ballistic Missile
North Korean leader Kim Jong
Un hailed the first significant
test of a new ballistic missile, a
move U.S. Defense Secretary
Ash Carter said showed the need
to continue building missile-defense systems in the region.
Mr. Kim guided the firing of a
Musudan midrange missile from a
mobile launcher, North Korean
state media reported. The test
sent the missile along a planned
flight path that took it to an altitude of 870 miles, the report said.
The high altitude enabled scientists to verify the heat-resistance of the warhead on return to
Earth, the report said, a key technical step in developing an operational ballistic missile that North
Korea hasn’t yet demonstrated.
U.S. and Japanese officials
confirmed that the missile rose
more than 600 miles and traveled about 250 miles.
Experts estimate the maximum range of the Musudan
would include U.S. bases in
Japan and Guam.
Mr. Carter, speaking at a military base in Fort Knox, Ky., said
that while it wasn’t clear if the
North Korean test was successful, it underscored the need for
robust missile defense systems.
—Alastair Gale
Vatican to Ankara for consultations. It took 10 months before
the ambassador returned. Turkish President Recep Tayyip Erdogan condemned the pope’s
statement and warned him “not
repeat this mistake.”
St. John Paul II used the
word genocide in the Armenian
context during his own 2001
visit to Armenia, in a joint declaration with Catholicos Karekin
II, head of the Armenian Apostolic Church, who will also host
Pope Francis.
But Pope Francis went further by calling the massacre of
Armenians one of “three massive and unprecedented tragedies” in the 20th century, along
with the Holocaust and the
1932-33 man-made famine in
Ukraine and other parts of the
Soviet Union.
Pope Francis also linked the
1915 killings to latter-day attacks
elsewhere on “our defenseless
brothers and sisters who, on account of their faith in Christ or
their ethnic origin, are publicly
and ruthlessly put to death—decapitated, crucified, burned
ereignty over waters at the center of a fishing-rights dispute
between the two nations.
Aboard a navy warship near
Indonesia’s Natuna islands,
which lie between Singapore and
Borneo, Mr. Widodo held a
meeting with members of his
cabinet, discussing issues such
as fishing, energy programs and
defense plans for the area.
The cabinet later said the president’s visit was “an affirmation
that the [Natuna] islands are the
sovereign territory” of Indonesia.
Indonesia for years has tried
to avoid being dragged into territorial disputes in the region,
where countries including China,
Vietnam and the Philippines
claim all or part of the South
China Sea as their own. Tensions
have grown steadily in recent
years after China began building
Pope Francis met Armenian church leaders in 2015 at the Vatican.
alive—or forced to leave their
homeland.” Armenia is predominantly Christian, although Roman Catholics are few.
The pope has been highly vocal about the persecution of
Christians, especially in Muslimmajority countries, and has
called on Muslim leaders to denounce the actions of Islamic
State militants in Syria and Iraq.
However, he recently rejected
the term genocide for the plight
of Christians in the Middle East
in favor of the religious term
martyrdom.
artificial islands on reefs and
atolls it occupies in the area.
In the coming weeks, a United
Nations-backed arbitration court
in the Netherlands is expected to
rule on a complaint from the
Philippines over China’s territorial
claims. China doesn’t dispute Indonesia’s claim to the Natunas,
but says it has the right to fish
in waters near the islands.
—Ben Otto
from doing business with Moscow’s arms industry has left the
Pentagon unable to replace Afghanistan’s Russian-built Mi-17
transport helicopters, which are
being lost at a rapid clip to enemy fire and mechanical failures.
With Taliban militants gaining
ground, U.S. commanders in Afghanistan have pressed the Pentagon in recent months to come up
with a solution, but the Defense
Department hasn’t settled on one.
Options could include waiving
sanctions to allow purchases of
Russian helicopters or revamping
the air force to operate transport aircraft made in the West.
Afghanistan can’t afford to buy
its own aircraft; the helicopters
cost about $19 million each, and
are only available from Russia.
Maj. Gen. Jeff Taliaferro, senior
allied air commander in Afghani-
AFGHANISTAN
U.S. Sanctions Hurt
Air-Force Buildup
U.S. sanctions intended to
punish Russia for its intervention
in Ukraine are making it difficult
for the U.S. military to rebuild
Afghanistan’s hard-hit air force.
President Barack Obama’s
2014 order banning the U.S.
INDONESIA
President Challenges
China on Sea Claims
President Joko Widodo traveled to the southern end of the
South China Sea, sending a
blunt message to Beijing that
his country would assert its sov-
RISE AND SHINE: Bertrand Piccard celebrated at Spain’s Sevilla Airport on Thursday after the Swiss
pilot of the sun-powered Solar Impulse 2 aircraft landed after a 70-hour journey from New York.
Tensions between Armenia
and another neighbor—Azerbaijan—will also hang over the
visit. The two former Soviet republics have fought over the Nagorno-Karabakh region, an ethnic Armenian enclave within
predominantly Muslim Azerbaijan that was overtaken by Armenia during a six-year war that
ended with a 1994 cease-fire.
The recent outbreak of fighting—the worst in decades—began when Azeri forces broke
through Armenian lines in a bid
to retake strategic heights. The
two sides accuse each other of
continued shelling.
The pope will visit Azerbaijan and neighboring Georgia
this fall, Sept. 30-Oct. 2. The
Vatican is officially presenting
the two trips as parts of a single trip to the Caucasus, which
will be completed in the fall.
Before leaving on Sunday,
Pope Francis is to pray at the
Khor Virap monastery, near the
border with Turkey, within sight
of Mount Ararat.
—Laura Mills
stan, is hoping to get a ruling from
Washington in the coming weeks,
but he declined to say which option he had recommended.
—Michael M. Phillips
PAKISTAN
Taliban-Tied School
Gets $3 Million Grant
CRISTINA QUICLER/AGENCE FRANCE-PRESSE/GETTY IMAGES
BY FRANCIS X. ROCCA
ANDREAS SOLARO/AFP/GETTY IMAGES
Pope in Armenia Risks New Rift With Turkey Jail Term
A provincial government gave a
$3 million grant to a hard-line Islamic school once attended by the
founder of the Taliban and other
militant leaders, officials said.
Darul Uloom Haqqania seminary, a giant madrassa in the
northwestern province of Khyber
Pakhtunkhwa that borders Afghanistan, counts Taliban founder
Mullah Mohammad Omar among
its former students. Other graduates include Jalaluddin Haqqani,
the veteran Afghan jihadist who
headed the Haqqani network, a
militant group the U.S. regards
as the most deadly insurgent
outfit in Afghanistan.
The money provided to the
madrassa is the start of a program to “mainstream” the Islamic
schools, said Mushtaq Ghani, a
spokesman for the provincial government, adding that the funds
would be used to build classrooms
where English and computer studies also would be taught.
However, critics said the move
was counter to Pakistan’s declared crackdown on extremism
“without discrimination,” which
followed the killing of more than
130 children by Pakistani militants at a school in Khyber Pakhtunkhwa in December 2014.
“Giving money to this madrassa is just the same as giving
money to the Taliban,” said Bushra
Gohar, a former lawmaker with
the opposition Awami National
Party in Khyber Pakhtunkhwa.
Samiul Haq, the leader of the
madrassa, who is often called the
“father of the Taliban,” has claimed
90% of those who formed the Taliban in Afghanistan the mid-1990s
studied at the Islamic school.
—Saeed Shah
and Safdar Dawar
For Congo
Presidency
Contender
BY NICHOLAS BARIYO
A Congolese court sentenced presidential contender
Moise Katumbi to three years
in jail for illegally selling a
property, intensifying the political impasse in the central
African nation.
Tried in absentia, Mr. Katumbi was also ordered to pay
a fine of $1 million in a verdict
late Wednesday described by
his lawyers as “a miscarriage
of justice” intended to frustrate his presidential bid.
“It was a sham trial and we
have instructions from our client to appeal the sentence,”
said Hubert Dumbi, Mr. Katumbi’s lawyer. “I have never
seen a trial like this; [the]
court did not call any witnesses and there was an order
to defer this case.”
Mr. Katumbi is seen by political observers as the most
credible among a score of challengers preparing to face the
Congo’s President Joseph
Kabila in elections due in November. Mr. Kabila is facing
mounting international pressure to respect the two-term
limit set out in the constitution and cede power.
Critics accuse Mr. Kabila,
who has been in office since
2001, of plotting to delay the
November vote to extend his
stay in power, possibly to ensure the presidency passes to a
loyal subordinate.
Mr. Kabila denies that.
Critics say the verdict is intended to prevent Mr. Katumbi, who is currently in London, from returning to the
country.
Congo’s prosecutor allowed
Mr. Katumbi to fly to South Africa for medical treatment in
May for injuries sustained during a clash with the police.
From South Africa, Mr. Katumbi flew to London.
The country’s state prosecutor told the court in the mineral hub of Lubumbashi on
Wednesday that the 51-yearold businessman fraudulently
sold the house, which is being
claimed by a Greek national.
Mr. Katumbi’s lawyers claim
that the house belongs to his
brother Raphael Katebe Katoto
and has never been sold.
Lambert Mende, Congo’s information minister, said the
trial followed normal court
procedures.
Mr. Katumbi, who is backed
by seven major opposition parties, announced in May that he
would run for the presidency.
Soon afterward, authorities
charged him with treason and
recruiting mercenaries, drawing condemnation from the
U.S. and the European Union.
Last month the U.S. reviewed the possibility of imposing sanctions in response
to “this growing pattern of repression.”
WORLD NEWS
Antigraft Chief
In Malaysia Quits
Amid Fund Probe
ALEXANDRE MENEGHINI/REUTERS
BY YANTOULTRA NGUI
AND CELINE FERNANDEZ
Juan Manuel Santos, left, and FARC rebel leader Rodrigo Londono, right, with Cuba’s President Raúl Castro after signing the cease-fire deal.
Colombia Rebels to Disarm
FARC agrees to
transform itself from
a fighting force to a
political movement
The Colombian rebel group,
FARC, announced Thursday
that it has agreed to disarm,
transforming itself from an organization fighting to topple
the state into a leftist political
movement.
By Kejal Vyas in
Havana and Juan
Forero in Bogotá,
Colombia
The deal is not the final accord after 3 ½ years of peace
talks in Havana between President Juan Manuel Santos’s
government and the FARC, or
Revolutionary Armed Forces of
Colombia. But it is considered
a historic advance that both
Colombia’s government and
the rebels say will help bring
peace to a country that has
suffered from a simmering
conflict for half a century.
“We’re turning this long
page in our history. Now we’re
beginning a new chapter,”
President Juan Manuel Santos
said after a signing ceremony
at a Havana convention hall attended by U.N. Secretary-General Ban Ki-moon and several
Latin American leaders. “There
won’t be any more Colombians
who will become victims of
this conflict.”
Rodrigo Londoño, the FARC
commander better known by
his
nom
de
guerre,
Timochenko, said that the deal
“isn’t all roses.” But he celebrated the signing and what is
to come for his organization,
which morphed into a wellarmed army after starting in
1964 as a peasant movement.
“We trust that within a reasonable time we will be pointing to another ceremony: the
signing of the final accord,” he
said. “May this be the final day
of the war.”
The pact calls for a bilateral
cease-fire to begin once a final
peace accord is signed, which
Mr. Santos has said could be in
the next few weeks.
Rebel fighters have agreed
to then disarm over three
stages that would take 180
days, a process that would be
verified by a U.N. team.
The FARC had long tried to
argue that it should keep its
arms in reserve because commanders feared that rightwing regional warlords would
go after them. But the government held fast against that
plan, instead pledging in the
accord to attack armed groups
and provide security for demobilized guerrillas.
“They’re fully embracing
disarmament,” Bernie Aronson, the U.S. envoy who helped
find common ground between
the two sides in the talks, said
in an interview. “It’s the effective end of the war.”
The two sides also said that
they had come to an agreement on a point the FARC initially opposed, giving voters in
Colombia, a country of 47 million, the chance to approve or
reject the final agreement at
the ballot box.
The deal announced in Havana was quickly rejected in
Colombia by former President
Álvaro Uribe, a leading foe of
the talks who has warned that
FARC commanders who committed atrocities will never
serve time for their crimes.
Last year, though, the government and FARC agreed to
set up tribunals to hear about
the crimes committed during
the conflict and mete out justice. The Colombian government says guerrilla commanders will have to admit to their
role in atrocities and face punishment, which could include
restrictions on their movements, reparations to victims’
families and supplying those
families with details about
what happened to loved ones.
Astrid Hernandez, who believes the FARC killed her son
25 years ago, welcomed the
news from Havana.
“An accord of this kind represents a light of hope,” she
said. “It’s what I have been
waiting for a long time, that
they…begin responding to the
victims.”
—Daniela Ramirez in Bogotá
KUALA LUMPUR—Malaysia
announced the resignation of
the chief of its anticorruption
agency, which has been carrying out an investigation into
state
investment
fund
1Malaysia Development Bhd.
and at one point advised the
nation’s top prosecutor to
bring criminal charges against
Prime Minister Najib Razak.
Chief secretary to the government Ali Hamsa said in a
statement Thursday that Abu
Kassim Mohamed, the Malaysian Anti-Corruption Commission’s chief commissioner,
asked to end his term on Aug.
1, and that the government
accepted his decision.
Mr. Abu Kassim will continue to serve as an anticorruption officer until his mandatory retirement in 2020,
the chief secretary said.
Under the helm of Mr. Abu
Kassim, the antigraft agency
has been one of the lead investigators into a long-running probe into 1Malaysia Development, known as 1MDB,
which was created by Mr. Najib in 2009 as a way to boost
economic growth.
Investigators in at least
seven countries are probing
1MDB. Some investigators
have said they believe that $6
billion has gone missing from
the fund. Mr. Najib and 1MDB
have
repeatedly
denied
wrongdoing, and 1MDB has
said it is cooperating with
the investigations. Malaysia’s
attorney general, Mohamed
Apandi Ali, cleared Mr. Najib
of wrongdoing in January.
A person familiar with the
matter said Mr. Abu Kassim’s
decision to resign was a result
of pressure from Mr. Najib.
Mr. Abu Kassim, who
couldn’t be reached directly,
told Malaysian reporters on
Thursday that he wasn’t withdrawing under pressure and
that he had requested to end
his contract earlier to take up
another opportunity, according to a report by state-run
news agency Bernama.
The prime minister’s office
didn’t respond to a request to
comment on Thursday.
The commission, which is
an independent agency, said
in its statement that this was
the third time Mr. Abu Kassim
has requested to step down
before his contract was due to
expire on Dec. 4, 2018.
“No pressure was made by
any quarter resulting in Mr.
Abu Kassim’s decision to
Official had advised
bringing charges
against Najib for his
links to scandal.
shorten his contract,” the antigraft commission said in its
statement.
The Malaysian Anti-Corruption Commission had
asked the nation’s attorney
general to file criminal
charges against Mr. Najib over
$14 million he received in his
accounts in 2014 and 2015 via
entities linked to 1MDB, a person familiar with the matter
told The Wall Street Journal
earlier this year.
When Mr. Apandi, the attorney general, cleared Mr.
Najib of wrongdoing, he said
the prime minister hadn’t
been aware of the transfers of
the $14 million and hadn’t
given his approval for them.
The anticorruption agency’s
operations review panel recommended in February that
the body continue with its investigations, according to a
statement the agency issued at
the time.
COLOR CHINA PHOTO/ASSOCIATED PRESS
Wild Weather Leads to Dozens of Deaths in China
Deadly downpours, hailstorms and a tornado killed
more than 70 people in eastern
China on Thursday, officials
said. The extreme weather
struck the coastal city of
Yancheng in Jiangsu province,
causing buildings to collapse
and blocking roads. About 500
people were also injured as of
late Thursday, among them
200 people in serious condition. Injured residents, above,
were transported to a hospital.
—Chun Han Wong
What does average
daily oil production
tell you about an
energy company’s
performance?
A Besieged Russia Moves
To Exploit Links to China
Russian President Vladimir
Putin will try to bolster trade
and economic ties when he
visits China on Saturday to
meet Chinese President Xi Jinping, as Russia’s economy
struggles amid Western sanctions and low oil prices.
By Chun Han Wong
in Beijing and Nathan
Hodge in Moscow
Officials in Mr. Putin’s government have said they want
to deepen trade ties with the
Asia-Pacific region to offset a
loss of foreign investment that
resulted from U.S. and European sanctions following Moscow’s annexation of the Black
Sea peninsula of Crimea. The
penalties effectively curtailed
Russia’s access to Western financing.
Mr. Putin’s China visit also
comes at a sensitive diplomatic juncture for his Chinese
counterpart. Chinese diplomats have been actively lobbying foreign governments to
back Beijing’s denunciations of
a coming international legal
ruling that could contradict its
sweeping claims over the
South China Sea.
The Beijing discussions are
scheduled to range from trade
and investment to international issues, both governments say.
Observers say the discussions will likely include efforts
to integrate China’s Silk Road
Economic Belt initiative with
the Russian-led Eurasian Economic Union and to strike
deals over Russian energy exports and Chinese infrastructure investments, such as
high-speed rail.
Last month, China agreed
to provide loans valued at 400
billion rubles ($6.2 billion) for
the development of a highspeed railway line between
Moscow and Kazan, paving the
way for a formal deal on the
project this weekend. Some
analysts also expect the two
governments to advance a liquefied natural gas plant in the
Russian Arctic, backed by $12
billion in loans from two Chinese state-owned banks.
“Deepening economic cooperation is a key issue for both
countries,” particularly given
recent woes blighting both the
Chinese and Russian economies, said Chen Yurong of the
China Institute of International Studies, a think tank run
by China’s foreign ministry.
Alexander Gabuev, a senior
associate at the Moscow Carnegie Center, said the summits
between the Russian and Chinese leaders are carefully calibrated as a display of partnership, bound by protocol that
shows the leaders as equals.
But Russia’s position, he
added, was relatively vulnerable: Sanctions remain in place,
Russia’s investment climate is
poor and commodity prices
are depressed.
“Russia is moving into this
asymmetrical
dependence,
where it needs China much
more than China needs Russia,” he said.
Plenty, as it turns out. This and 200+ more
industry-specific KPIs. Only on I/B/E/S.
financial.thomsonreuters.com/IBES
FROM PAGE ONE
Brazilian soldiers wearing hazmat suits participated in a security drill at Rio’s Deodoro Olympic Park in March while athletes trained.
tember group, counterterrorism planning has been de rigueur for Olympic host cities.
But Rio’s security preparations
may set a new level.
Unlike the U.S. and some
Western European nations,
Brazil treats terrorism largely
as a criminal rather than a
military concern, and assigns
primary responsibility for
combating it to the federal police, not the army.
However, tens of thousands
of military personnel will augment Rio’s Olympics security
forces. The country plans to
deploy roughly 85,000 federal
police and armed-forces mem-
bers, more than double the
number on hand at the 2012
Summer Games in London.
Brazil also has assembled a
broad task force to deal with
cyberattacks.
Brazilian defense officials
say they are in contact with
U.S. intelligence services and
the U.S. Embassy, as well as
the secret services of the U.K.,
France, Israel and Russia.
Thus far, officials say, there
has been no plausible indication that a terrorist attack is
being planned.
“We do not have any evidence, up until this point, that
takes us to a level of concern
that prompts alarm, panic,”
said Minister of Institutional
Security Sergio Etchegoyen,
who is in charge of the ABIN,
Brazil’s equivalent of the CIA.
Brazilian officials have repeatedly stressed that Brazil is
a country with few enemies
and minimal involvement in
foreign wars, making it an unlikely terrorist target.
Harold Trinkunas, an analyst of Latin American and security affairs at the Brookings
Institution in Washington, said
melting-pot Brazil has “done a
remarkable job of integrating
immigrants…from the Middle
East.”
“These communities have
very much taken on a much
more Brazilian identity,” he
said. “They tend not to be radicalized around the issues of
conflict in the Middle East.”
Other analysts aren’t so
sanguine.
“This [neutrality] idea is irrelevant to the extremists,”
said André Luís Woloszyn, a
counterterrorism specialist
who worked in Brazil’s presidential palace in the late
1990s. “What the extremists
want is the show.”
Mr. Woloszyn said intelligence reports indicate there
are “around 100” radicalized
QILAI SHEN/BLOOMBERG NEWS (LEFT); ALY SONG/REUTERS
ready taking all necessary
measures to safeguard the
Games,
which
will
be
held Aug. 5 through 21. Brazilian security and intelligence agents said they are
monitoring an undisclosed
number of Brazilians and foreigners living in Brazil who
may be sympathetic to terrorist organizations.
“The concern with Islamic
State has always been on our
radar,” Raul Jungmann, Brazil’s defense minister, said in a
telephone interview this
week. “We do not know of any
person who has received training, or know of any Islamic
State member who has been to
Brazil.”
As Brazil struggles with a
recessionary economy, an epic
corruption scandal, and a political showdown around President Dilma Rousseff’s impeachment trial, the country is
under tremendous pressure to
pull off an incident-free Olympics.
About 500,000 tourists and
athletes, including an anticipated 200,000 from the U.S.,
are expected to flock to Rio
for the Games. The global
wave of terrorist shootings
and suicide bombings in recent years has raised concerns
that the photogenic city’s turn
on the global stage could be
an irresistible bull’s-eye for a
terrorist group or self-radicalized lone wolf.
Ever since the 1972 Summer Games in Munich, at
which 11 Israeli athletes were
taken hostage and murdered
by members of the Black Sep-
SILVIA IZQUIERDO/ASSOCIATED PRESS
BRAZIL
individuals living in Brazil, including some who have taken
an oath of allegiance to Islamic State’s self-styled Islamic caliphate.
Other analysts say Brazil’s
vast border areas—and the
easy availability of guns
thanks to the illegal drug
trade—put the country at risk.
For several years following
the attacks of Sept. 11, 2001,
U.S. intelligence-gathering focused on the tri-border area
where Brazil, Argentina and
Paraguay meet. Security analysts say the frontier region
has long been a corridor for
drug- and arms-trafficking and
money laundering, and its
substantial Syrian-Lebanese
immigrant population made it
a fundraising target for the
Shiite Islamist militant group
Hezbollah.
Some civil-rights advocates
fear that the expanded surveillance and counterterrorism
measures could be used to
clamp down on street demonstrations and social protests.
The 2014 World Cup tournament, which Brazil hosted,
registered several brutal
street clashes between police
and protesters.
Meanwhile, some cariocas,
as Rio residents are known,
aren’t relying on the government alone for protection.
Celso Garcia, superintendent
of a shopping mall in Rio’s
Barra da Tijuca district where
the Olympic Village is based,
said his company will doubledown on its force of security
guards and increase its battery of security cameras to
700 from 300 in the weeks
ahead.
“We cannot live a sense of
calamity, but we always have
to be careful,” he said.
Visitors at last week’s grand opening of Shanghai Disneyland, where the names of some attractions read very differently in the Chinese and English posted on signs throughout the theme park.
ters used on the Chinese mainland.
Shipwreck Shore, a play area
for children, sounds more ominous than fun in Chinese, so it is
called Ship Water Play Area instead.
The princess-themed beauty
salon known as Bibbidi Bobbidi
Boutique makes no sense in a
literal translation to Chinese, so
Disney decided to call it the Colorful Magical Fanciful Transformation. The Chinese version
also has an alliterative “B”
sound.
“Every time we come up with
a name, we had to make sure it
has a whimsical Disney feel, it
resonates with Chinese people
and it conveys what the experience is,” says Fang-xing Pitcher,
a writer for the Disney Imagineering theme-park design
group. “If you just do a straight
VW
they said.
A Volkswagen spokeswoman declined to comment
on Thursday. Bloomberg and
the Associated Press earlier
reported some details of the
expected settlement.
The people cautioned that
negotiations among Volkswagen, plaintiffs’ lawyers and
government officials involved
in widespread litigation consolidated in a San Francisco
federal court were ongoing
and terms of the settlement
could change. U.S. Judge
design work in English, handling
translation later in the process.
Disneyland Paris and Hong Kong
Disneyland, which opened in
1992 and 2005, respectively,
struggled at first to connect
with local audiences and have
had financial problems.
In Hong Kong, Chinese visitors sometimes complained that
they couldn’t navigate the
theme park and didn’t know
what to do there.
“We’ve learned through the
years it’s always a good idea to
be as accessible to your guests
as you can be,” says Stan Dodd,
an Imagineering creative director. “I think in previous parks
we may not have thought that
through as specifically as we did
here.”
Getting Chinese translations
just right is increasingly important to Disney. China is the
world’s second-largest movie
box office, behind only the U.S.
“Frozen,” the most successful
animated motion picture ever, is
loosely translated as “Enchanted
Charles Breyer, who is overseeing the litigation, set a
June 28 deadline for the auto
maker and other parties to
reach a settlement to resolve
the emissions lapses.
The U.S. Justice Department sued Volkswagen in January on behalf of the Environmental Protection Agency,
alleging the German car giant
violated federal clean-air laws
by using software known as
defeat devices that allowed
vehicles to pollute more on
roadways than during government tests.
The Federal Trade Commission, which enforces U.S. consumer protection laws, also
sued the auto maker in March
alleging the company falsely
advertised “clean diesel” vehicles with low emissions. Aggrieved consumers alleging
declining resale values and
other grievances have also
sued Volkswagen.
Volkswagen still faces U.S.
litigation and investigations
over similar allegations arising from some 85,000 dieselpowered vehicles with threeliter engines.
The proposed settlement
would mark a potential bookend for Volkswagen on an
emissions-cheating crisis that
has spawned litigation and investigations across the globe.
Some Volkswagen investors
earlier this week berated exec-
Destiny of Snow.”
Disney park designers borrowed the name and song translations for a singalong show at
Shanghai Disneyland.
Still, many Chinese names for
attractions at the new theme
park had to include literal de-
scriptions because the movie
references that work for Americans fly right over the heads of
visitors here.
Tron Lightcycle Power Run
probably doesn’t mean much to
anyone who didn’t see the 1982
science-fiction movie “Tron” or
its 2010 sequel, “Tron: Legacy,”
featuring neon-colored electronic motorcycles.
In Chinese, though, Superfast
Speed Light Cycle gets across
the point of the thrill ride loud
and clear.
Roaring Rapids doesn’t quite
sound like an adrenalinecharged adventure when translated literally to Chinese, which
is why it is called Roaring
Mountain Rafting Journey.
Disney’s theme-park designers in Shanghai realized that
coming up with puns is a particular challenge, since playful misspellings aren’t possible in a
pictorial language.
Their solution was to rely on
written Chinese characters that
sound the same but have different meanings. Hunny Pot Spin, a
Winnie the Pooh ride, is known
here as Spinning Honey Pot, in
which a Chinese character used
in the word for “honey” is replaced by the one meaning
“crazy” or “wild.”
“People look and they know
it’s not a very rigid ride, it’s
something playful,” says Imagineering assistant producer
Chang Xu.
Opinions among the new
utives at the company’s annual
shareholders meeting in Germany over the company’s response to the emissions cheating, which U.S. environmental
regulators disclosed in September. The German auto
maker has repeatedly apologized for the scandal.
The Justice Department is
separately conducting a criminal probe of Volkswagen over
the emissions cheating. The
auto maker decided against
releasing initial findings of its
own investigation into the
matter in part because of concerns it could hurt any credit
the company might receive
from U.S. prosecutors for cooperating with the probe.
Volkswagen could also face additional government penalties.
Getting Chinese
translations just right
is increasingly
important to Disney.
park’s first visitors about the effectiveness of Chinese names
were mixed. Zhang Anzhi, a
Shanghai-born business consultant, said the Fantasyland area
was “boring” because he was so
unfamiliar with central characters like Alice in Wonderland.
Zhao Siyu, who is from
Shanghai and attends the University of North Carolina at
Chapel Hill, says she appreciated little touches such as tombstones in the Pirates of the Caribbean section written in
ancient-style characters.
At the June 16 grand opening, visitors seemed to care
much more about getting on the
most new popular rides than
understanding how much effort
went into the surrounding signs.
“I don’t have much memory
about the translations because I
spent most of the day waiting in
line,” said Wang Mengmeng, 24
years old, from Jiangsu province
just north of Shanghai.
—Yang Jie and Zhou Wei
ARND WIEGMANN/REUTERS
DISNEY
translation, all of that gets lost.”
Ms. Pitcher is one of numerous Chinese natives hired to
work on Shanghai Disneyland
from its earliest designs. Disney
owns 43% of Shanghai Disney
Resort, with the majority controlled by the local government’s Shanghai Shendi Group
Co.
Disney also hired as consultants for the new park Chinese
designers, cultural experts and
even comedians. In Southern
California, where Disney is
based, the company used Chinese tourists as focus groups
while in the early stages of planning Shanghai Disneyland.
The focus groups showed
that instructions that seemed to
make perfect sense in English
sometimes didn’t register.
Words that sound whimsical
and inviting to Western ears
were confusing or off-putting in
Chinese.
For its earlier foreign theme
parks in Paris and Hong Kong,
Disney did much of the initial
U.S. NEWS
Gun-Control Measure Has Life in Senate
Bipartisan effort gets
majority support but
faces obstacles; House
Democrats end sit-in
WASHINGTON—The Senate
on Thursday refused to kill a bipartisan effort to keep some
suspected terrorists from purchasing firearms, in a vote that
advocates of new gun restrictions hope will buy them time
to continue to press their cause.
The 46-52 vote against tabling the measure demonstrated that it has majority support in the Senate but probably
not enough backing to clear the
chamber’s 60-vote procedural
hurdles. Still, its supporters, led
by Sen. Susan Collins (R.,
Maine), were heartened that
the measure wasn’t killed.
“It is absolutely not dead,”
said Democratic Sen. Heidi
Heitkamp of North Dakota,
who has been working with
Ms. Collins on the measure.
Ms. Collins also has support
from other Democrats, including Martin Heinrich of New
Mexico, and Republicans such
as Sen. Lindsey Graham of
South Carolina.
Republican critics of the
measure said the fact that it
drew fewer than 60 backers
demonstrated that it was time
for the Senate to move on.
“They had to have 60
votes,” Sen. Orrin Hatch (R.,
Utah) said. “It just shows that
there’s no real accord among
everybody around here as to
what to do.”
The Senate voted just hours
after House Democrats ended
CAROLYN KASTER/ASSOCIATED PRESS
BY KRISTINA PETERSON
AND SIOBHAN HUGHES
House Minority Leader Nancy Pelosi held the hand of Rep. John Lewis as Democrats protested in Washington on Thursday.
their sit-in protest Thursday
afternoon after occupying the
chamber’s floor for more than
25 hours, vowing to take the
push for new gun curbs to
their congressional districts.
The actions in the two
chambers just 11 days after 49
people were killed at an Orlando, Fla., nightclub showed
the power of the gun issue in
the wake of such mass shootings. It isn’t clear, however, that
the partisan divide on guns can
be bridged in either chamber.
In the House, where GOP
leaders haven’t agreed to set
up any votes on gun legislation, Democrats said they
would keep pushing their
cause and seek to energize
their constituents on the issue
over next week’s recess.
“We must never, ever give up
or give in,” said Rep. John Lewis
(D., Ga.), who began the protest
Wednesday morning. “We must
come back here on July 5 more
determined than ever.”
The sit-in was organized by
Mr. Lewis and other Democratic leaders to demand votes
on legislation to expand background checks to all commercial sales and to prevent suspected terrorists from being
able to buy guns. Republicans
dismissed Democrats’ demands.
House Speaker Paul Ryan
(R., Wis.) on Thursday said the
Democrats had disrupted the
House in a publicity stunt and
blasted them for using the
protest to solicit political contributions.
“We are not going to allow
stunts like this from carrying
out the people’s business,” the
speaker said. “If this is not a
political stunt, then why are
they trying to raise money off
this?”
Mr. Ryan said House Republicans are looking into how to
prevent suspected terrorists
from buying guns in a way
that will appease GOP concerns that it could infringe on
law-abiding citizens’ constitutional rights.
Republicans haven’t indicated that they plan to bring
forward gun-related legislation soon.
Because the House was officially in recess for much of
Wednesday and Thursday, the
chamber’s cameras were
turned off, prompting Democrats, including Rep. Scott Peters of California, to stream
the sit-in from their phones
over Periscope, a videostreaming platform owned by
Twitter Inc., which was picked
up by C-Span, the cable network that broadcasts congressional proceedings. On Thursday morning, Rep. Beto
O’Rourke (D., Texas), continued filming the protest on
Facebook.
Rules prohibiting the use of
cameras on the floor when the
House of Representatives isn’t
in session have been in place
since TV cameras were first
installed in the House. The
chamber’s rules prohibit lawmakers from taking pictures
or using mobile electronic devices in a way that “impairs
decorum.”
On Monday, four gun-related measures stalled in the
GOP-controlled Senate after
failing to clear procedural hurdles. One Democratic proposal
would have expanded background checks to all commercial gun sales. Currently, only
federally licensed dealers are
required to perform background checks.
The Senate also defeated a
measure that would have
given the Justice Department
the authority to block gun
sales to people on a set of terrorist watch lists, including
the no-fly list, if authorities
had reasonable belief the
weapon would be used in connection with terrorism. A rival
GOP measure also stalled in
the Senate.
BY LAURA MECKLER
More than 50 business executives, including several longtime Republicans, endorsed
Hillary Clinton for president on
Thursday as her campaign
seeks to capitalize on discomfort with Republican Donald
Trump.
They include Jim Cicconi,
senior executive vice president
at AT&T Services Inc., and Dan
Akerson, who held top positions at General Motors Co.
and Nextel Communications
Inc.
The endorsements reflect
continuing unease among
some Republicans with Mr.
Trump, the presumptive GOP
presidential nominee, despite
his romp through the primary
contest.
Mr. Cicconi, who worked for
Presidents Ronald Reagan and
George H.W. Bush, said he has
backed every GOP presidential
candidate since 1976. “But this
year I think it’s vital to put our
country’s well-being ahead of
party,” he said. “Hillary Clin-
ton is experienced, qualified,
and will make a fine president.
The alternative, I fear, would
set our nation on a very dark
path.”
Mr. Akerson said he has
consistently voted for Republicans for president in the past
but couldn’t support Mr.
Trump. “Serving as the leader
of the free world requires effective leadership, sound judgment, a steady hand and, most
importantly, the temperament
to deal with crises large and
small. Donald Trump lacks
each of these characteristics,”
said Mr. Akerson, who also
served as a Navy surface-warfare officer.
On Wednesday, Brent Scowcroft, a national-security adviser for two Republican presidents, endorsed Mrs. Clinton,
saying her experience, judgment and understanding of the
world prepare her for the job
of commander in chief. His
support came a week after
Richard Armitage, another
longtime Republican foreignpolicy hand, said he would
back Mrs. Clinton if, as expected, Mr. Trump is the GOP
nominee.
After a slow start, Mr.
Trump is racing to shore up
his standing with his party’s
establishment and in recent
weeks has been making overtures to top GOP donors, many
of whom supported others in
the primaries and haven’t been
quick to warm to him.
Mr. Trump attended a fundraiser in New York City on
Tuesday, attended by hedgefund manager John Paulson,
who had backed four of his rivals during the Republican primaries.
He also attended a breakfast Wednesday that was cohosted by New York Jets
owner Woody Johnson, a billionaire who had supported
former Florida Gov. Jeb Bush.
Last week, Mr. Trump raised
money in Texas, meeting with
several of his party’s wealthiest donors.
After a low fundraising haul
in May, Mr. Trump has raised
at least $19 million for his
CHUCK BURTON/ASSOCIATED PRESS
Some Business Leaders
Make Switch From GOP
Democrat Hillary Clinton has party elites behind her but still has work to do to win over others.
joint fund with the Republican
National Committee in recent
weeks and about $3 million for
his campaign, people familiar
with the matter said.
Senior Clinton policy adviser Jake Sullivan briefed several of her supporters from the
business community on a conference call Wednesday, during
which he outlined the economic agenda she laid out in a
Court Blocks Obama on Immigration
WASHINGTON—A Supreme
Court stalemate on Thursday
blocked President Barack
Obama’s plan to defer deportation and provide work authorization to millions of illegal immigrants, but the 4-4 tie
established no precedent and
pushed the issue back into the
political arena.
The one-sentence decision
was an anticlimactic end to
Mr. Obama’s plan to push his
executive authority over immigration, a move blocked by a
federal court in Brownsville,
Texas, after Texas led 26 Republican-leaning states in a
lawsuit against the policy.
The outcome doesn’t require the administration to begin deportations of the affected immigrants—all of
whom had significant ties to
the U.S., starting with children
who are U.S. citizens or lawful
residents. But it does halt the
government’s plan to normalize their presence by granting
them authorization to work.
Mr. Obama expressed frustration with the decision. He
said the court’s stalemate was
a setback for the U.S. immigration system that “takes us fur-
ther from the country that we
aspire to be.”
The president said he
wouldn’t pursue additional executive actions on immigration, adding that he had butted
up against the limits of what
he could do unilaterally.
If there was a silver lining
for the administration, it was
the absence of Justice Antonin
Scalia, who died in February.
Had he lived to vote on the
case, he almost certainly
would have sided with Texas
and created a national precedent limiting executive power
over immigration policy.
Immigration policy has been
one of the sharpest differences
between the two parties in the
presidential election. Presumptive Republican nominee Donald Trump has called for a wall
along the Mexican border and
the mass deportation of illegal
immigrants, while Democratic
rival Hillary Clinton has called
for easing deportations.
In a statement Thursday,
Mrs. Clinton called the Supreme Court’s decision “unacceptable” and said families
needed “relief from the specter
of deportation.” Mrs. Clinton
said that in her first 100 days
ALLISON SHELLEY/GETTY IMAGES
BY JESS BRAVIN
Immigrant families reacting to the Supreme Court decision Thursday.
in office she would introduce
an immigration plan that included a path to citizenship.
Mr. Trump said in a statement: “The executive amnesty
from President Obama wiped
away the immigration rules
written by Congress, giving
work permits and entitlement
benefits to people illegally in
the country.”
Separately, the Supreme
Court on Thursday upheld racial preferences in public-university admissions, a defeat to
a yearslong conservative drive
to roll back affirmative action.
Writing for a 4-3 court, Justice Anthony Kennedy found
that the University of Texas at
Austin’s plan passed constitutional muster because it was
designed in a narrow way to
improve diversity on campus.
The school’s plan considered
race as an additional factor
when evaluating certain black
and Hispanic applicants.
The decision came from a
court with two vacant seats—
one left by Justice Scalia’s
death, another by the recusal of
liberal Justice Elena Kagan,
who as the Obama administration’s solicitor general had participated in the case at earlier
stages to support the university.
pair of speeches this week, as
well as her critique of Mr.
Trump’s record and policies.
The list of business leaders
backing Mrs. Clinton includes
several who have supported
Democrats in the past, including Eric Schmidt of Alphabet
Inc., Sheryl Sandberg of Facebook Inc. and Warren Buffett
of Berkshire Hathaway, Inc.
Others endorsing the for-
U.S.
Watch
mer secretary of state include
Hollywood-turned-internet executive Barry Diller of IAC/
InterActiveCorp, Hollywood
executive Peter Chernin of The
Chernin Group, Wendell Weeks
of Corning Inc., Reed Hastings
of Netflix Inc. and Rob Marcus,
formerly of Time Warner Inc.
—Rebecca Ballhaus
and Rachel Ensign
ing Judge Williams’s order barring
prosecutors or defense lawyers for
the six officers from commenting
until the cases conclude. A lawyer
for Mr. Goodson also declined to
comment, citing the order.
—Scott Calvert
and Jeffrey Sparshott
MARYLAND
MARINE CORPS
Officer Found Not
Guilty in Gray Case
Man in Iwo Jima Photo
Was Misidentified
A judge on Thursday acquitted
police officer Caesar Goodson of
murder and all other charges in
the 2015 death of Freddie Gray, a
defeat for prosecutors who have
yet to secure a conviction after
bringing three officers to trial.
Circuit Judge Barry Williams
also found Officer Goodson not
guilty of manslaughter, reckless
endangerment, second-degree
assault and misconduct in office.
Officer Goodson waived his right
to a jury trial and elected to
have the judge decide the case.
Six officers were charged in
connection with Mr. Gray’s arrest,
transport and death from a broken neck sustained while in a
police van. Officer Goodson drove
the van. Prosecutors alleged that
Officer Goodson, 46 years old,
was criminally negligent in failing
to secure Mr. Gray with a seat
belt or get him medical care.
A spokeswoman for Baltimore
City State’s Attorney Marilyn
Mosby declined to comment, cit-
The U.S. Marine Corps on
Thursday said it had misidentified one of the men who raised
the flag at Iwo Jima during
World War II and that the actual
person in one of the most famous war photos ever taken appears not to have taken public
credit for his role.
Until now, Private First Class
Harold Schultz wasn’t officially
identified as one of the six Marines who raised the flag in the
iconic photo.
The image of Pfc. Schultz
was thought to be a sailor
named John Bradley, whose son
wrote a best-selling book, “Flags
of our Fathers,” that gave the
sailor a central role in the matter.
Pharmacist’s Mate Bradley
was the longest-lived of those
presumed to be in the photo
and died in 1994, never publicly
acknowledging that he wasn’t
actually in the photo. Pfc. Shultz
reportedly died in 1995.
—Ben Kesling
SPORTS
Germany
Switzerland
UEFA EURO
2016
Bracket
Poland
Croatia
Quarterfinals
June 30
9 p.m.
Portugal
Semifinals
July 6
9 p.m.
GEORGES GOBET/AGENCE FRANCE-PRESSE/GETTY IMAGES
Wales
Croatia’s Ivan Perisic celebrates his late goal against Spain, which turned the Euro 2016 bracket on its head.
Northern
Ireland
Hungary
Quarterfinals
July 2
9 p.m.
Final
July 10
9 p.m.
Quarterfinals
July 1
9 p.m.
France
Quarterfinals
July 3
9 p.m.
Belgium
a look ahead from
the wall street journal.
From jetpacks to cloud-connected vertical farms, a special edition digital
magazine explores the possibilities of a future unlike any you’ve imagined.
EXPLORE NOW ON THE APP AND AT WSJ.COM/FOE
Republic of
Ireland
England
Iceland
Note: All times are local
smarting from a 4-0 defeat to La
Roja in the final of Euro 2012. Ireland, which plays France on Sunday,
hasn’t forgiven Les Bleus for costing
it a place at the 2010 World Cup
with a goal that should have ben
ruled out for an obvious handball.
The quarterfinal possibilities are
even more tantalizing. World champion Germany could meet Euro
champion Spain. France, meanwhile,
could face its ancient rival England.
“It wasn’t the path we wanted to
take but that’s football,” said Spain
manager Vicente del Bosque.
As for the overachievers’ half of
the bracket, the lineup of teams has
dismissed the fear that a 24-team
tournament would dilute the quality
of the tournament. Of the 53 European associations, nearly half made
it to Euro 2016, but the minnows
have shown they aren’t in France
merely to make up the numbers.
Four teams that went into the tour-
©2016 Dow Jones & Co. Inc. All rights reserved. 6DJ3906
Paris
When European soccer officials
expanded this summer’s European
Championship to accommodate 24
nations, the plan was to stage a twoweek group stage with more teams,
more drama and more goals.
Now that it’s over, this much is
clear: That plan failed.
The 36 group-stage games required to eliminate just eight teams
were mostly duds. None of the favorites looked especially terrifying. The
most common final score was 1-0.
But boring as it was, this firstround snooze had one unexpected
consequence: It has set up what
could become the most enthralling,
suspense-filled, high-octane knockout rounds in international soccer’s
recent history.
One side of the Euro 2016 bracket
features a murderer’s row of colossal
powers. All five of Europe’s World
Cup winners—England, France,
Spain, Germany and Italy—will fight
it out for a place in the final. The
other is guaranteed to produce a
first-time major tournament finalist,
raising the prospect that a longtime
nobody or upstart nation could wind
up hoisting the trophy in Paris on
July 10.
“I’m looking forward to it, because now these are the exciting
games,” Germany manager Joachim
Löw said. “Sooner or later, the opposition has to risk something, because
you can’t always play 0-0 in the
knockouts.”
Even the organizers appear to
recognize that Saturday’s round of
16 marks the start of a new tournament—UEFA has introduced a new
match ball for the knockout rounds.
The blue bloods’ half of the
bracket has enmity everywhere you
look. Italy is playing Spain, still
Italy
Spain
Semifinals
July 7
9 p.m.
Source: UEFA
A Knockout Round That Packs a Punch
BY JOSHUA ROBINSON
Slovakia
nament draw from the supposedly
weakest pool of qualifiers have advanced, including Euro first-timer
Wales and Northern Ireland, who
square off in Paris on Saturday for a
spot in the quarterfinals.
The teams with the most pedigree
on that side of the bracket are Croatia and Belgium, but neither one was
entirely convincing during group
play. “You can see that all of the big
teams are having to dig really deep
to win games,” said Belgium manager Marc Wilmots.
How the Euro bracket became so
lopsided can be traced to a pair of
unexpected results in the final 48
hours of group play, which conspired
to turn the tournament on its head.
First, England was held to a scoreless draw by Slovakia, then Spain fell
to a 2-1 defeat against Croatia.
England was responsible for its
own misfortune. Figuring his team
was already through, Roy Hodgson
made six changes to his lineup for
the Slovakia clash. The Three Lions
still dominated the match—only one
team at the tournament has taken
more shots per game—but the result
of the stalemate was that Wales won
the group by beating Russia. England, which has only scored three
times in France, flipped to the big
dogs’ half of the draw.
“I think the time will come when
we will take those goal chances and
I think some team will be on the end
of that fairly soon,” Hodgson said.
Spain, on the other hand, resisted
the temptation to shuffle its starters,
but Del Bosque was made to pay for
removing both his frontline strikers
in the second half. Croatia scored a
sucker-punch late winner late on and
Spain’s route to the final suddenly
became a lot more treacherous.
“We are not on the path we
wanted to be,” Del Bosque said. “We
have to rise to the situation.”
BOOKS
‘For nothing can be loved or hated unless it is first known.’ —Leonardo da Vinci
Wisdom on the Installment Plan
Everything Explained
That Is Explainable
By Denis Boyles
Knopf, 442 pages, £21.05
ENCYCLOPEDIA, IN ITS root definition, means circle of knowledge.
Pliny the Elder (A.D. 23-79), perhaps
the world’s first encyclopedist, used
the word to describe his “Natural
History.” The circle implies allround education, which in turn suggests everything worth knowing,
hence omniscience. In 1751, under
Denis Diderot and Jean d’Alembert,
the famous French Encylopédie began publication with roughly this
ambitious intention.
Seventeen years later, in Edinburgh, a printer and antiquary
named William Smellie brought out
the first of a three-volume set of
books under the title “Encyclopaedia Britannica,” a work that would
see its final print version—32,640
pages in 32 volumes—published in
2010. We all live now of course with
that useful if not always reliable
hodgepodge called Wikipedia.
Self-improvement is at the heart
of the encyclopedic enterprise. People certified with degrees from what
the world considers the best universities and colleges sometimes forget
that we are all autodidacts, on our
own in the endless attempt to patch
over the extraordinary gaps in our
knowledge. Doing so in an efficient
way is the promise held out by an
encyclopedia, which claims to provide all the world’s pertinent knowledge, right there in 24, 29, 32 volumes, usually with a bookcase
thrown in at no extra charge.
Encyclopedias, and by extension
encyclopedists, can and have had
their not especially hidden agendas.
The French Encyclopédie was, in effect, a house organ for the Enlightenment; its editors wished to change
the way people thought, which
meant that they wanted to secularize
learning, thereby striking a blow
against the educational dominance
of the Jesuits. The program of many
lesser encyclopedias was more
straightforward: to make a profit.
The one encyclopedia that set out
to do both, show a profit while embodying the spirit of its age, was the
Eleventh Edition of the Encyclopaedia Britannica (1910-11).
The Eleventh was the last great
encyclopedia. Its greatness derived
not alone from its contributors or its
organization but from the spirit infusing it. This spirit was one of confidence in progress—material, scientific, artistic, if not religious than
spiritual. The society in which the
Eleventh was composed and published considered itself, as Denis
Boyles notes in “Everything Explained That Is Explainable,” to be
“the Rome to the long nineteenthcentury’s Greece, an era in which engineers spoke the language of visionaries. And it was English.”
English the Eleventh Edition indubitably was, in its principal editors,
in the vast majority of its contributors, in its imperialist confidence.
Behind the scenes, though, the work
was the inspiration of an American
huckster named Horace Everett
Hooper. A huckster with a difference,
Hooper was also an idealist: He was
wily for the public good, or at least
that portion of the public intent on
its own educational betterment.
In American publishing, the decades preceding the appearance of the
Eleventh were marked by highbinders
and sidewinders. Pirating English
books was all but standard practice.
(Charles Dickens, much aggrieved by
these offenses when practiced upon
his own books, demonstrated his
grievance in his novel “Martin Chuzzlewit,” a chronicle of American operators and charlatans.)
In this freewheeling publishing atmosphere, Mr. Boyles reports, the
English Encyclopaedia Britannica
was “a very lucrative target.” The
encyclopedia had better sales in the
U.S. than in England. The hunger for
self-improvement among Americans
made Britannica fine game for publishing poachers, who served it up to
their readers in revised and bogus
versions. “Entries,” Mr. Boyles
writes, “were edited, omitted, and
added at will, and sometimes without much regard for quality.”
Over the years the cachet of the
Encyclopaedia Britannica never
waned; only its profits did. “The Britannica,” Mr. Boyles writes, “had
brought prestige, but not much
profit, to every proprietor and pub-
MOLLY PATTON
BY JOSEPH EPSTEIN
lisher who had touched it since its
first appearance in 1768.” As Britannica increased in size over the years,
selling it became all the more difficult. Horace Everett Hooper had
ideas about how to change this. One
of the poachers would soon become
the gamekeeper.
Among the books Hooper sold in
America were various versions of
the Ninth Edition of Britannica. He
not only sold it but was immensely
impressed by it. Much therein was
worthy of admiration. The Ninth
Edition of Britannica, brought out in
25 volumes between 1875 and 1889,
represented a dazzling anthology of
English writing. Articles ran to
40,000 words and some to the
length of small books. Among its
contributors were James Bryce,
Matthew Arnold, William Morris,
John Stuart Mill and Robert Louis
Stevenson. (Contributors to the Seventh Edition had included William
Hazlitt, Thomas Malthus, Walter
Scott, and Mill.) The Ninth Edition
was one of the splendid achievements of the Victorian Age.
Horace Hooper, Mr. Boyles writes,
“understood that his business wasn’t
just selling books. It was monetizing
authority.” An Anglophile, Hooper
took it upon himself to improve the
sales of Britannica in England by
leashing it to that other grand English editorial institution, the Times.
Such was the authoritativeness of
the Times that in some foreign countries its correspondents were
thought more powerful than the
English ambassador.
“The Times,” Mr. Boyles writes,
“was as imperishable a part of national life as the Church of England,
though more widely believed.” Despite its towering prestige, the
Times was a financial loser. Hooper
intervened with a plan by which the
two, newspaper and encyclopedia,
could each profit.
On the business side, the fortunes
of the Times began to change when a
man named Charles Moberly Bell,
who had earlier been a cotton merchant and a Times correspondent in
Egypt, became the paper’s business
manager and began to put its financial house in order. The idea of rescuing the Times through its sponsoring
of a revised version of the Ninth Edition was Hooper’s. If the Times would
permit him to sell the old Ninth Edition of Britannica under its auspices—
in what would be called a Times edition—it would gain serious sums in
royalties while Britannica would gain
allure and sales leads through its association with the Times.
Britannica soon thereafter moved
its editorial offices to the top floor
of the Times building at London’s
Printing House Square. Hooper
brought aboard an advertising adept
named Henry R. Haxton, a Hearst
journalist of bohemian spirit who
counted among his friends Ambrose
Bierce, James Whistler and Stephen
Crane, and who didn’t mind pushing
the pedal all the way down on his
advertising copy. In effusive, highly
colored prose, Haxton’s ads suggested that people must acquire the
Encyclopaedia Britannica or remain
forever benighted. As Mr. Boyles
puts it, Haxton made it seem “that
the Britannica was not just a book, it
was a cure.”
In 1903, Hooper and Haxton devised a contest called “The Times
Competition,” whereby readers of
the newspaper were asked to answer, in essay form, questions on
subjects of general information.
Prizes amounting to £3,585 were offered, first among them a full fouryear scholarship to Oxford or Cambridge. Haxton claimed in advertisements that those who entered
ism, Chisholm felt that Britannica
was “the best way of democratizing
self-education.” He coordinated the
gargantuan project of the Ninth
Edition, whose immensity entailed
1,507 contributors, a staff of 64 assistant editors, some 40,000 articles and an index of roughly
500,000 entries, the whole weighing
in at 250 pounds.
Along with being a brilliant editorial manager, Chisholm was a trenchant writer. Mr. Boyles quotes him
from his Britannica entry on Lord
Acton: “Lord Acton has left too little
completed original work to rank
among the great historians; his very
learning seems to have stood in his
way; he knew too much and his literary conscience was too acute for him
to write easily, and his copiousness
The Eleventh was the last great encyclopedia. It not only
embodied a spirit of confident progress; it turned a profit.
the competition would acquire
“Closer concentration of mind, Practice in ready reasoning, Quickness
in finding facts, A new form of recreation, An invaluable fund of general information.”
One could not pick up the questions at the Times offices but had to
mail in one’s request. Readers wise
in the ways of salesmanship will
grasp that this provided an astonishing list of leads for selling the
Ninth Edition. These were used, in
the best full-court-press salesmanship, to inundate possible customers
for Britannica with mail and even
telegrams. “From my bath, I curse
you” was the reply of one such recipient of these sales tactics. But
the general public response was, in
Mr. Boyles’s words, “immediate and
overwhelming.”
Some might view this as commercial genius, but to many Englishmen
of the day it was American vulgarity
let loose and a besmirching of the dignity of the Times. By such heavybreathing advertising and promotions,
Hooper and Charles Moberly Bell,
both victims of English upper-class
xenophobia, withstood insults and resistance, but their methods eventually
brought the Times out of the red.
The Hooper innovation of selling
Britannica on the installment plan
was no small help. Mr. Boyles estimates that Hooper and a business
partner named Walter Montgomery
Jackson cleared more than a million
dollars between them and the
Times—measured by today’s exchange rate, something like £6.5 million ($9.5 million).
The editor of the revised Ninth
Edition and later of the Eleventh—
the edition called the Tenth was actually the Ninth with nine supplemental volumes added—was a
literary journalist named Hugh
Chisholm. Sharing Hooper’s ideal-
of information overloads his literary
style. But he was one of the most
deeply learned men of his time, and
he will certainly be remembered for
his influence on others.”
In a highly readable style, nicely
seasoned with occasional ironic
touches, Mr. Boyles limns the intricate business negotiations that
went into the creation of the Eleventh Edition. He chronicles Britannica’s departure from the Times after Lord Northcliffe acquired the
newspaper in 1908; its being taken
up by Cambridge University, until
that university’s Syndics found its
marketing measures too garish; and
its sale, in 1920, to Sears, Roebuck
in the U.S., which sold it chiefly
through its catalog.
Mr. Boyles provides excellent portraits of the key figures responsible
for the 19th- and early-20th-century
editions of Britannica. His last chapter is given over to the Eleventh’s
mishandling, owing to its having
been a work of its time, of such key,
and in our day supersensitive, subjects as Women, African-Americans,
Native Americans, Asians, Arabs and
its difficulties with Catholic and
Protestant readers. None of this finally diminishes the overall accomplishment that is Encyclopaedia Britannica’s Eleventh Edition.
Mr. Boyles ends by asserting that
the ethos of progress that undergirded the Eleventh was put paid to
by World War I: “Even the most visionary Edwardians would never
have ventured to guess that a deeply
held belief in the ideology of Progress would lead eventually to the
first twenty-four hours of the Battle
of the Somme.”
The elan of the Eleventh Edition
would never be regained. In the U.S.
the set was marketed differently,
chiefly by door-to-door salesmen,
whose pitch was less to self-educa-
tion than to the guilt of parents
concerned about the social mobility
of their children. Prestige, though,
still clung to the encyclopedia: Well
into the 20th century, the person
who wrote the Britannica article on
any given subject was thought to be
the world’s leading authority on
that subject.
In 1943, Sears wished to unload
the Encyclopaedia Britannica and
donated it to the University of Chicago. Robert Hutchins, then president of the university, didn’t see
how an intellectual institution could
also run and sell such a work, so he
offered it for a derisive sum to William Benton, a former advertising
man who was then his vice president for public affairs, with the university to receive a handsome royalty. At Benton’s death in 1973,
these royalties had amounted to
$47.8 million.
Business was carried on as usual
until 1968, when Benton hired William Haley as the editor in chief of
Britannica. Haley had been a director
of the Manchester Guardian, the director-general of the BBC and editor
in chief of the Times—a résumé that
could have been completed in its
perfection only by his having also
been editor of the Oxford English
Dictionary.
I was one of Haley’s senior editors
and held him in the highest esteem.
A cultivated man of gravity and wide
knowledge, he planned to expand
Britannica’s coverage and raise its
literary and intellectual quality
through his connections with Isaiah
Berlin, Hugh Trevor-Roper and other
members of a remarkable generation
of English philosophers, historians
and scientists.
The Encyclopaedia Britannica under Haley figured to be a splendid set
of books, a rival, perhaps, to the great
Eleventh Edition. Alas, it was not to
be. Corporate politics worked against
Haley, who departed the company.
(When I left not long after, he wrote
to me: “I am glad you have departed
the Britannica; they worship different
gods than we.”)
Robert Hutchins, the one man with
influence over Benton, contrived to
elevate his old sidekick Mortimer
Adler to the directorship of a vastly
revised Britannica. Once in charge
Adler, a man whose high IQ was
matched only by his low sensibility,
twisted the set into separate volumes
of longer and shorter entries, called
respectively the Macropaedia and the
Micropaedia, with a vast index volume called the Propaedia. The result
was an intellectually tidy and not especially readable work.
The great day of Britannica’s distinction was done and, after the advent of the internet, would never return. You can look it up.
Mr. Epstein’s recent books include
“Wind Sprints: Shorter Essays” and
“Frozen in Time: Twenty Stories.”
BOOKS
‘Fainthearted animals move about in herds. The lion walks alone in the desert. Let the poet always walk thus.’ —Alfred de Vigny
Stray Cat Strut
and Connecticut, to within 23 miles
of Central Park.
By then, the lion had walked for
two years and over 2,000 miles, more
than double the longest such trek on
record. “This lone cat,” Mr. Stolzenburg writes, “had threaded a gauntlet
that would have given an elite force
of Navy SEALs the night sweats.”
Possibly true. But the problem for
the author is that his subject isn’t a
Navy commando. It’s a stealthy cat
that leaves little record of its exploits apart from scat, paw prints
and deer carcasses. At several
points, the cougar’s trail goes cold,
for up to 10 months. Mr. Stolzenburg can only speculate about his
voyager’s route, not to mention its
inner life. His feline Odysseus
doesn’t even have a name.
Mr. Stolzenburg, a veteran
writer on wildlife, handles these
narrative potholes by detouring
into history and science. We learn,
for instance, about the ecological
damage caused by the eradication
of large carnivores. But other passages—about Pleistocene Africa or
man-eating leopards in India—feel
like padding.
The author also braids his animal
adventure with the efforts of biologists and various lion enthusiasts
(some of whom use themselves as
bait to show cougars’ lack of appetite
for humans). But these characters
are so numerous that they blur together. Meanwhile, those on the opposing side are mostly cast as trigger-happy clods. Only midway
through the book do we learn about
a cougar that ripped off the face of a
mountain biker in 2004. She lived;
another biker ahead of her did not.
Such attacks are very rare, but officials can be forgiven for panicking
when a lion comes to town.
Despite these flaws, “Heart of a
Lion” is gripping because the nomad
at its center remains a marvel to the
end. How does an 8-foot-long cougar
ford rivers and interstates, elude
lawmen and hunters, navigate
sprawl—for two years? Is he lost,
lucky, a super-cougar or so yearning
for a mate that he searches as far as
land will take him?
Full disclosure: I’m a dog person.
But the hero of this book is one very
cool cat.
Heart of a Lion
By William Stolzenburg
Bloomsbury, 245 pages, £18.99
IN CLASSIC WESTERNS, a loner
roams the range, taming the wild
with his rifle and Colt .45. Rugged,
taciturn and quick on the draw, he’s
destined for a shootout in a dusty
frontier town.
William Stolzenburg’s “Heart of a
Lion” subverts this genre. A strong,
silent deerslayer sets off from the
Dakotas—headed east, into territory
made treacherous by too much civilization. He prowls strip malls and culde-sacs before his fateful showdown—on the Wilbur Cross Parkway
in southern Connecticut.
This reverse western reads like
parody, except it’s true, and the lionhearted hero is a Puma concolor (“cat
of one color”), also known as a cougar, panther or mountain lion. The
species has been declared extinct in
the eastern U.S., outside a tiny refuge
in Florida. But in 2009 a nomad appeared: first in the Midwest and eventually in New England, where its kind
hadn’t been seen in a century.
“BIG FREAKING CAT HEADED
YOUR WAY,” a resident of Greenwich,
Conn., texted his neighbor as a mansize feline crossed his yard. A town
official warned locals against freezing in the big cat’s presence. “Stand
up tall, wave your arms and make
noises,” she said. “You don’t want to
act like a bunny.”
This turns out to be sound advice—one of many curiosities in Mr.
Stolzenburg’s compelling if overly
ambitious book. “Heart of a Lion” retraces the lone cougar’s astounding
trek and uses it to explore the long
contest between man and mountain
lion, two “apex predators.” The author also makes it clear which den
he’s in. The result is a literary species that’s hard to classify, mixing
travel, advocacy and the tooth-andclaw drama of “Wild Kingdom.”
Mountain lions are magnificent,
purpose-built killers. They possess a
sprinter’s explosive speed, massive
thighs for vaulting across chasms,
and the stealth and power to ambush large game. The cougar’s signature move: “slinking invisibly to
within striking distance, closing
with a rush, and dispatching big
prey with a surgical, spine-severing
GETTY IMAGES/NATIONAL GEOGRAPHIC CREATIVE
BY TONY HORWITZ
bite to the neck or a suffocating lock
on the windpipe.”
Cougars, however, became quarry
as settlers spread across North America exterminating “predatory vermin”
in their path. By the mid-1800s, cougars had been hunted and starved out
of Eastern forests and Midwest prairie. Further west, ranchers and hired
killers (paid by the government)
launched a “blitzkrieg of poisoning,
shooting, and trapping,” driving cougars to the brink.
It was only in the late 20th century, aided by conservation and growing herds of deer and elk, that cougars staged a comeback, most notably
in the Black Hills of South Dakota.
Researchers studying this lion colony found that adult males hoarded
females and defended their turf with
the ferocity of mafia dons. Young
males in search of mates had to
move on. Most headed deeper into
the Mountain West. But a small
stream began to flow east, out of the
hills and into the plains and prairie.
Conservationists hailed this rewilding of the heartland as a rare
victory for a threatened species. In
reality, Mr. Stolzenburg writes, the
cougars’ exodus was “a death
march.” As the pioneers (including
and other hazards claimed 94 cougars from the Black Hills—“nearly
half of all the lions estimated to be
living there.”
Yet somehow, amid this carnage, a
1-year-old lion ventured out of the
hills and crossed South Dakota undetected. The first sighting came near
A cougar roams the country, prowling strip malls
and cul-de-sacs, before a showdown in Connecticut.
some females) entered more settled
areas, they invariably became road
kill or rifle targets.
The cougars’ apparent resurgence
also prompted South Dakota officials—backed by sportsmen, ranchers and fearful citizens—to remove
lions’ protected status and allow an
annual hunt. The quota grew each
year until, in 2010, guns, cars, traps
Minneapolis, when a startled cop
aimed his dash-cam and caught “the
unmistakable image of a massive,
muscled feline with a fire hose tail.”
The cougar reappeared east of the
Mississippi, headed for a strip of bigbox stores and fast-food outlets. In
Wisconsin, a trail camera captured
the cat fueling up on deer. Then onward: to Michigan, New York state
Mr. Horwitz, a former Journal
reporter, is the author of “Blue
Latitudes” and “Confederates in
the Attic.”
Euterpe’s Daughters
By Anna Beer
Oneworld, 368 pages, £16.99
BY NORMAN LEBRECHT
WHEN THE Metropolitan Opera
announced that it would be performing “L’amour de loin” by Finland’s Kaija Saariaho in its coming
season, headlines blared that this
work was the first by a woman
composer to be performed at the
Met in more than a century. The
last, forgettably, was “Der Wald” by
Ethel Smyth in 1903.
I’m not sure which detail was the
more regrettable—the inexcusable
hiatus or the bad journalism that
zoned in on a composer’s gender. A
woman may, in 2016, direct the
Large Hadron Collider or serve as
chief operating officer at Facebook
without undue comment, but if she
composes an opera it’s front-page
news in New York. A further sign,
perhaps, that opera is out of tune
with our times.
How were women kept out of the
aria? In “Sounds and Sweet Airs,”
Anna Beer, an Oxford historian,
traces a pattern of gradual exclusion
through the lives of eight composers—three in the 17th century, one in
the 18th, two in the 19th and two in
the 20th. Although none achieved
world renown, it still comes as a
something of a shock to learn that
women had it much easier in classical times than in modern.
Francesca Caccini, for instance,
born in 1587 into a Florentine family
of musicians, sang in an opera by
her father when she was just 13 and,
at 20, wrote a carnival piece at the
request of the poet Michelangelo
Buonarroti, great-nephew of the
painter, who designed and scripted
the dance spectacle to go with it. He
deemed her score “very beautiful.”
The Medicis titled her “la musica”
and kept her in steady work. Michelangelo kept her in good verses.
In a princess-run court, Caccini
flourished. She married twice, inherited money from both husbands and
composed at will. Her only constraints were courtly servility. When
she left the Medicis in 1641, however, they expunged all trace of her.
Her place and date of death are unknown. A slim songbook survives.
Would a man of equal gifts have vanished so completely?
A generation younger, born in 1619,
Barbara Strozzi was raised in Venice,
where prostitution was as much a
The early creative spark in Clara
Schumann was numbed by her husband’s wayward genius, eight pregnancies and her touring career as a
pianist. After Schumann died in
1856, Clara never wrote another
note. Manuscripts of her husband’s
A-minor piano concerto show several
key themes in Clara’s hand.
wanted to avenge himself.” He knew
what he was up against.
In 1845, Felix composed a piano
trio. Fanny wrote another the following year. They played them together, vying for precedence. In
April 1847, she complained of composer’s block: “Nothing musical is
succeeding for me.” In May, at age
A woman can run the
Large Hadron Collider
or Facebook, but when
she composes an opera,
it’s still front-page news.
part of the entertainment industry as
opera. Pimped by her father, Barbara
declared a kind of sexual liberation in
her life as a courtesan.
In her composing, she handled
erotic lyrics, Ms. Beer notes, “with
confidence and sophistication” and
wrote most of her songs for sopranos. It was said that men “could not
look past [her] breasts” to admire
Strozzi’s music, but, living at a hub of
the printing industry, she published
seven volumes of compositions between 1651 and 1664, more than any
local contemporary. Although she was
denied a post at court by dint of her
colorful liaisons, her music achieved
posterity (you can find it on YouTube). The vocal line is sensual,
strong and unyielding.
Elisabeth Jacquet de la Guerre
(1665-1729), a prolific Parisian composer of harpsichord music, and the
Viennese prodigy Marianna Martines
(1744-1812), a contemporary of
Mozart’s, are dull by comparison.
GETTY IMAGES
Sounds and Sweet Airs
FLYING FINN The composer Kaija Saariaho at the Pompidou Center in Paris.
In this litany of lost talent Fanny
Mendelssohn’s is the most tragic.
Her distinctive talents were subdued
by her parents in favor of her younger brother’s blazing genius. Felix
was acclaimed as the next Mozart,
but Fanny never gave up. She kept
on composing through marriage,
miscarriages and depression. Her
brother was not much help.
“To encourage her to publish I
cannot do, since it runs counter to
my views and convictions,” sniffed
Felix, adding that “she is too much a
Frau, as is proper.” When Fanny issued her first set of Lieder, Felix
sang his way through all the songs
and, according to his wife, “continually swore in between that he
41, she collapsed in rehearsal and
died of a stroke. Felix, hearing the
dreadful news, fell to the floor and
suffered a cerebral bleed. He was
dead before the year was out,
consumed with remorse. Fanny, to
this day, struggles to get heard.
Ms. Beer’s prototype of a modern
composer is the redoubtable Elizabeth Maconchy, who, facing male resistance in 1930s London, formed a
quasi-feminist concert society with
Imogen Holst, Grace Williams and
Elisabeth Lutyens. Benjamin Britten
helped out as her copyist. Stricken
by tuberculosis, Maconchy retired to
the countryside with her devoted
husband and turned out 13 string
quartets of urgent individuality, the
most coherent body of chamber music by any British composer of her
century. Her daughter Nicola LeFanu
is a second-generation composer.
Lutyens, the first Englishwoman
to adopt Schoenberg’s serialism, encapsulated their struggle in a memorable comparison. “If Britten wrote a
bad score,” she told an interviewer,
“they’d say, ‘he’s had a bad day.’ If I
had written one, it was because I
was a woman.”
That inequality has not gone
away. When Judith Weir, now Master (sic) of the Queen’s Musick,
staged a dreadful opera, “Miss Fortune,” at Covent Garden in 2012,
critics turned to sexual derogation.
“We’re stuck in a situation where
the barriers to women becoming
composers have been removed,”
wrote one right-wing polemicist,
“but they’re still honoured for being
women.”
Ms. Beer’s snapshot lives of women
composers are savvy, sympathetic and
sometimes timid. A general cultural
historian, she refrains from offering
critical analysis, deferring to opinions
by licensed musicologists that take
the edge off her passion.
She might have usefully widened
her remit to include the likes of
Augusta Holmès, forced to publish
under a male pseudonym in fin de
siècle Paris; Galina Ustvolskaya, a
lone hermit in Soviet music; the elusive prewar Czech composer Vítězslava Kaprálová; and the rising generation of American women—Anna
Clyne, Jennifer Higdon, Missy Mazzoli, Augusta Read Thomas—none of
whom has found the Medician favor
of a Met commission.
Their omission, however, only underlines the timeliness of Ms. Beer’s
essential and insightful study of a
woman’s unsung place in the closed
world of classical music.
Mr. Lebrecht is the author of “Why
Mahler?: How One Man and Ten
Symphonies Changed the World.”
BOOKS
‘Darwin, in his day, was unable to fight free of the theoretical errors of which he was guilty. It was the classics of Marxism that revealed those errors.’ —Trofim Lysenko
The Scourge of Soviet Science
say, a liver cell access to all the
genes it needs and to suppress all its
other genes. In humans and other
mammals, these marks are robustly
removed during two waves of erasure between generations. But plants
are less fastidious about scrubbing
off epigenetic marks, and it seems
that they experience epigenetic inheritance quite commonly.
Was Lamarck therefore right? Not
really—it’s more that he wasn’t entirely wrong. The principal means of
inheritance is still through the genes.
But transgenerational epigenetics
provides a kind of soft and probably
impermanent inheritance that can
adapt an organism more quickly to
its environment than can changes in
its genes. Researchers are now trying
to figure out how commonly this
happens. The answer so far seems to
be that it occurs quite a lot in plants
and maybe occasionally in people,
though this has yet to be proved.
But if Lamarck had a point, and if
Lysenko believed, like Lamarck, that
acquired traits could be inherited,
how firmly can one say Lysenko was
wrong? Mr. Graham is on somewhat
tricky ground here. He argues that
Lysenko himself claimed he was not
a Lamarckian. But elsewhere he
writes that Lysenko “preached a doctrine based on the inheritance of acquired characteristics, the idea that
the traits an organism acquires during its lifetime can be passed on to
its offspring.”
Whether Lysenko was a Lamarckian or not, he deserves no credit because he repudiated modern genetics,
on which these new epigenetic insights are based. Moreover, although
vernalization is the kind of environmental change that might in principle
be inherited epigenetically, it seems
that in fact it is not. The epigenetic
changes induced by cold treatment
are firmly reset in the plant’s germline cells. Lysenko contributed nothing to the advance of science.
Mr. Graham’s survey of Lysenkoism
and eugenics in Soviet Russia contains important lessons about threats
to the health of science. The internal
logic of science makes it quite resistant to external interference—Galileo’s or Lysenko’s critics can be silenced by force majeure but only for
a time. Science is much more vulnerable to the blurring of objectivity that
occurs when scientists become passionate advocates for some political
cause in which their discipline gives
them apparent expertise. The internal
checks and balances of science are
then cast aside, and the public yields
to the expert view, which may or may
not be correct.
The appalling creation by American geneticists of the eugenics program, a political cause with no valid
scientific basis, provides a compelling
lesson: Scientists can be dispassionate
scholars or passionate advocates, but
not both, and the public is far better
served by having them in the former
role. Looking round today’s campuses,
one may marvel at how completely
this lesson has been forgotten.
Lysenko’s Ghost
By Loren Graham
Harvard, 209 pages, £18.95
FOR ALMOST 40 years—from the
1920s to the mid-1960s—Trofim Lysenko suppressed the study of genetics in the Soviet Union in favor of his
own belief that traits acquired during a plant’s lifetime could be inherited. Geneticists who opposed the
crackpot ideas of this scheming
agronomist were driven from their
posts. Many died in jail, including a
principal opponent, the distinguished
botanist Nikolai Vavilov.
Among the stranger flowers in
Vladimir Putin’s Russia is a movement by Russian nationalists to rehabilitate Lysenko. Pointing to advances in a field called epigenetics—
which show that acquired traits can
sometimes be passed on, at least in
plants—Lysenko’s new supporters
claim that he was right all along. In
“Lysenko’s Ghost,” Loren Graham, a
historian of Soviet science at MIT,
sets out to drive a stake through the
ghost’s heart, but the task is not as
straightforward as one would like.
His survey of the terrifying milieu in
which Lysenko thrived includes a
discussion of the eugenics movement
in the Soviet Union, and the short
book thus encompasses two major
types of threat to the integrity of scientific inquiry: institutional interference from without and political infection from within. The latter
threat, in particular, is ever present.
Lysenko first came to notice in the
Soviet Union in 1928 for making winter wheat sprout in the spring by exposing seeds to cold. The effectiveness of cold treatment had been
known to farmers for centuries, but
Lysenko’s use of it came at a time
when Soviet agriculture was in disarray and the winter wheat crop had
failed. His name for the treatment,
vernalization, has stuck.
As he gained promotion in part
thanks to his proletarian origins, Lysenko started to assert that vernalization could be inherited. The idea
fitted neatly with Communism’s rejection of genetics as the origin of
human nature and its belief that government could shape Socialist Man,
although Mr. Graham states that this
was not the reason for Soviet leaders’ acceptance of Lysenko’s agronomic policies. The concept of vernalization seemed to echo Lamarck,
who is held to contradict the orthodox Mendelian view that acquired
traits cannot be inherited.
Stalin endorsed Lysenko’s views in
1948, and the secret police began
persecuting Lysenko’s domestic opponents. Some adversaries were executed; others were sent to labor
camps or fled into exile. Dmitri Belyaev, whose remarkable work in domesticating silver foxes only became
known recently in the West, was
merely fired from his Moscow job
and continued his research in faraway Novosibirsk.
However insouciant the Soviet authorities might have been in assign-
GETTY IMAGES
BY NICHOLAS WADE
ing modern genetics to the flames,
they had better sense in dealing with
another product of the genetic revolution, the eugenics movement. Eugenics began with the proposal of
Darwin’s cousin Francis Galton that
eminent families should be encouraged to have more children. But positive eugenics of the Galtonian type
became in time replaced with negative eugenics—the idea that those
with maladies deemed hereditary
should be prevented from having
children.
Negative eugenics had a wide following in Britain and the United
States, but many leading proponents
were progressives. George Bernard
Shaw, Harold Laski, H.G. Wells and
John Maynard Keynes were staunch
advocates. In the United States, it was
the often liberal Justice Oliver Wendell Holmes who wrote the Supreme
Court’s Bell v. Buck decision—“three
generations of imbeciles is enough”—
that opened the floodgates to sterilization programs. By 1940 some
36,000 Americans had been deprived
of the chance of having families.
Eugenics was supported by the
Carnegie Institution, the Rockefeller
Foundation and geneticists at leading
American universities. The eugenicists designated eight categories of
disease as requiring sterilization. In
Germany, the American geneticists’
program was much admired. The National Socialists adopted it wholesale, adding alcoholics and Jews to
the list and replacing sterilization
with mass murder.
Russian geneticists also flirted
with eugenic ideas, Mr. Graham relates. Under socialism, the Russian
geneticist A.S. Serebrovskii wrote,
“love will be separated from childbirth” and women would have to obtain sperm not from their husbands
but from “a specific approved
source.” With “outstanding” men fathering up to 10,000 children, “human selection will make giant leaps
forward,” Serebrovksii predicted.
H.J. Muller, a Nobel-winning Ameri-
can geneticist and staunch Marxist,
made the same proposal in a letter to
Stalin. Russian women, he said,
should be inseminated with sperm
from “the most transcendently superior individuals,” of whom he gave
Lenin as an example, so as to create
a higher type of human being.
Despite Muller’s scientific eminence, this idea, besides its other
drawbacks, was plain nutty. Its best
refutation is in the lapidary reply
given by the biologist George Wald
making them targets for the secret
police. As for Vavilov, “You denounced him in the presence of Stalin, won Stalin’s approval, and the secret police did the rest,” Mr. Graham
told Lysenko.
Lysenko left the table, then returned 10 minutes later with the excuse that he had always been an outsider and that Soviet geneticists “did
not want to make room for a simple
peasant like me.” Having fallen from
power, Lysenko was once again an
After Stalin endorsed Lysenko’s erroneous views
about genetics, the secret police began persecuting the
scientist’s domestic opponents. Some were executed,
others were sent to labor camps or fled into exile.
to a sperm bank that sought donations from Nobel Prize winners. If
they wanted Nobel Prize-winning
sperm, Wald informed the bankers,
they should apply to his father, a
poor tailor, and not to himself, the
father of two guitar players.
Though Soviet leaders had no time
for eugenics, both Stalin and Khrushchev allowed Lysenko to persist in
his persecution of Mendelian geneticists. The most dramatic section of
Mr. Graham’s book is his account of
meeting Lysenko, in 1971, in the faculty club of the Russian Academy of
Sciences in Moscow. Having tried and
failed to interview Lysenko for years,
Mr. Graham one day spotted him sitting alone at a table, so he sat down
and introduced himself.
“Never again would I have the opportunity to test the most infamous
scientist of the twentieth century,”
Mr. Graham writes. Lysenko denied
having caused the death of Vavilov
and many other scientists, saying he
had never been a member of the
Communist Party and had no control
over what the secret police did. Mr.
Graham cited to Lysenko his practice
of denouncing geneticists as traitors,
outsider, he said, and “no one will sit
with me.” Mr. Graham has little sympathy for Lysenko, finding that there
was nothing good in his scientific
work and great evil in the way he arranged for his opponents to be sent
to exile or death.
Turning to those who would resurrect Lysenko as a serious scientist,
Mr. Graham has to deal with the new
science of epigenetics, from which it
has emerged that some traits acquired during an organism’s lifetime
can be passed on to its descendants,
at least in plants, just as Lamarck
claimed. Epigenetics refers to the
chemical modifications made over
the course of an organism’s lifetime
within the cell both to the DNA molecule itself and to the protein spools
around which it is wound for compact packaging. These modifications,
known as marks, constitute a cellular
machinery that can either make the
genes accessible to the cell or lock
and silence them.
Some of these marks are induced
by changes in the environment, and
others are directed by the genes,
particularly those required during
embryonic development—to give,
Mr. Wade is the author of “A
Troublesome Inheritance: Genes,
Race and Human History.”
FICTION CHRONICLE: SAM SACKS
Big Guy Country
tersection of Western mystique and
middle-class reality.
Cal isn’t back in Gladstone two
days before he’s running into trouble
with his granddaughter’s menacing
ex-boyfriend and a delinquent tenant
A satisfying drama forged
from the intersection of
Western mystique and
middle-class reality.
of Bill’s who returns an eviction notice with threats. Cal’s method is the
armed confrontation. As the imbroglios develop, he finds time for a dalliance with a widowed neighbor, Beverly, who’s attracted to the lovelorn
old cowboy despite his unsanded
edges. “Here’s a man for you,” Beverly thinks after a distinctly unromantic rendezvous. “The sheets haven’t even cooled, and he’s yakking
about his dead wife.”
If romance is in short supply, so is
the glamour of cowboy ways. “Believe
me when I say I’ve sunk a hell of a lot
more fence posts than I’ve roped cat-
GETTY IMAGES
CAL SIDEY is not a
man most people
would turn to when
they need a babysitter. In 1963, the year
of Larry Watson’s
“As Good As Gone” (Algonquin
Books, 341 pages, $26.95), he’s a 70year-old ranch hand living alone in a
trailer in eastern Montana. He hasn’t
been in Gladstone, the town of his
birth, for decades, having abandoned
his children after his wife’s accidental death. He fled because he was
suspected of killing a man.
Yet he is the one whom Bill Sidey,
Cal’s son, asks to come to Gladstone
to look after his kids when a medical
procedure forces him and his wife
out of town for a week. “It sounds
like some kind of plan for redemption,” Bill’s wife dubiously remarks.
Mr. Watson, though, doesn’t go
for easy uplift. There’s a plainspoken
toughness to this writer—nothing of
the lofty soliloquizing of Ivan Doig or
the verbal dash of Thomas
McGuane—that has led to him be
overlooked in the large herd of fine
Montana novelists. “As Good As
Gone” is the latest of his books to
forge satisfying drama from the in-
tle,” Cal tells his awestruck grandson.
Mr. Watson points up some grubby
truths behind the archetypal Western
tale of the loner who comes to town
and dispenses rough justice. It’s typical of this thoughtful novelist that the
ending of “As Good As Gone” is nuanced rather than explosive, and its
traces of heroism are found not in violence but in a show of restraint.
Getting dumped: It happens to
everyone. But when it happens to you,
the agony seems unique in the annals
of suffering. Danish writer Dorthe
Nors covers the emotional spectrum
of the experience in the two playfully
experimental novellas of “So Much
for That Winter” (Graywolf, 147
pages, £10.24), finding as much material in the comedy of rejection as in
its humiliations and heartbreak.
“Days,” the lesser of the two works,
recounts a spurned lover’s fragile convalescence through a sequence of
numbered lists, like the minutes of a
tedious meeting: “6. Thought about
my dentist while I boiled eggs, / 7.
wrote a crucial note, / 8. had an attack
of vulnerability from the silence that
fights back.”
The delightful “Minna Needs Rehearsal Space” begins as a young
Copenhagen composer is dropped
by her boyfriend via text message in
favor of a sexy pop musician. In a
brisk translation by Misha Hoekstra, the novella charts Minna’s disequilibrium—and her annoyance
with a noise-sensitive neighbor—in
hundreds of single-sentence paragraphs that pile up like towers of
stacked plates:
Minna puts Bach on the stereo.
Minna turns up Bach.
The neighbor is there instantly.
Bach’s cello suites are playing.
Minna’s fingers are deep in the
wound.
It’s here that Ms. Nors’s impish
wit stands out. To rediscover her
mojo, Minna vacations at a scenic island in the Baltic Sea. Finding an
empty beach, she can finally sing as
loudly as she pleases—“It does the
voice good to plunge headlong”—until an angler appears before her,
shushing: “The fish,” he chides, “are
getting spooked.”
OPINION
REVIEW & OUTLOOK
E
Elon Musk’s Subsidy Aggregation
lon Musk didn’t become a billionaire customers to subsidize their solar-using and
without brass, and this week he often wealthier neighbors. Nevada recently
floated one of his most outrageous capped its solar-metering handout. Hawaii has
bets: an offer by his taxalso changed its repayment
The billionaire tries to structure, and others of the
payer-subsidized Tesla Motors to buy his taxpayer-subor so states with programs
integrate his taxpayer- 40
sidized SolarCity. Tesla
may follow.
backed business model.
shareholders and Wall Street
SolarCity is bleeding cash,
analysts are howling, but
and the suspicion is that Mr.
didn’t they always know they
Musk is engineering what
were buying a business model that depended amounts to a bailout by Tesla. The problem is
on the kindness of politicians?
that Tesla is also spending its available cash to
The electric-car maker offered to acquire develop its Model 3, which is billed as an electric
the solar panel company at a more than 20% car even the masses can afford. Tesla has an unpremium over SolarCity’s previous share price usually high debt-to-equity ratio, and it isn’t obin an all-stock transaction. “Tesla customers vious how adding another cash-needy company
can drive clean cars and they can use our bat- will increase value. Caveat shareholder.
tery packs to help consume energy more effiTesla’s cars have a devoted following, and its
ciently,” the company said in a blog post, “but stock has had a brilliant run. But it isn’t clear
they still need access to the most sustainable how competitive it would be without taxpayer
energy source that’s available: the sun.”
support: The car maker rakes in money—$168
The ostensible plan is to set up a one-stop million in 2015, up from $3 million in 2011—
shop so folks buying $85,000 Teslas don’t thanks to the racket known as state zero-emishave to walk across the street to buy solar sion vehicle credits. Tesla only produces elecpanels, among other “synergies.” Mr. Musk tric cars, so it can sell its extra state-supplied
predicted, with his typically modest ambi- credits to auto makers that don’t reach governtion, that the merger will lead to a Tesla valu- ment fuel-efficiency standards.
ation of $1 trillion, or about 34 times what
Tesla’s $5 billion Nevada battery plant reit was Wednesday.
ceived more than $1 billion in breaks on propHe may need one of his SpaceX rockets to erty and sales taxes, along with discounts on
get there. Tesla shares fell 10% Wednesday, or electricity, and even a 30% federal credit for somore than the $2.8 billion value of SolarCity, lar generation. Don’t forget President Obama’s
as investors asked why one money-losing com- $7,500 federal tax credit for every electric-car
pany would be better off buying another buyer. That’s right, Uncle Sam pays the likes of
money-losing company. SolarCity was once a Leonardo DiCaprio so they can flaunt their
darling of the green-energy set, but its shares green virtue on the highway.
have fallen more than 50% in the past year as
If Mr. Musk can make a market success of
its political advantage ebbs.
electric cars and lithium-ion batteries, he’ll
The company’s solar-panel leasing busi- have served customers and earned his billions.
ness grew rapidly thanks to federal tax credits But so far Tesla looks more like a classic of the
and state “net metering” programs that un- reverse income redistribution of green crony
derwrite installation and let companies hawk capitalism, in which middle-class taxpayers
renewable power back to the grid at high subsidize billionaires who make products to
prices. New York’s Governor Andrew Cuomo satisfy the anti-fossil-fuel indulgences of the
wrote a taxpayer check for $750 million for upper classes. That Mr. Musk is reshuffling his
a SolarCity plant in 2014.
Tesla balance sheet to subsidize his own solar
But net metering has been exposed as a venture is a sign that this may not be a suscrony-capitalist scheme that forces nonsolar tainable business model.
A
Obama’s Fracking Comeuppance
nother day, another judicial rebuke to nar in the Constitution’s separation of powers.
President Obama’s contempt for the rule
Under the BLM argument, Judge Skavdahl
of law. On Wednesday a federal judge writes, “there would be no limit to the scope or
struck down an oil-and-gas
extent of congressionally deleA judge he appointed
drilling rule imposed with no
gated authority BLM has. . . .
statutory authority.
Having explicitly removed the
rebukes
an
antidrilling
In 2015 the U.S. Bureau of
only source of specific federal
regulation as lawless. agency authority over frackLand Management published
new regulations about well
ing, it defies common sense
construction and water manfor the BLM to argue that Conagement for hydraulic fracturing, or fracking, gress intended to allow it to regulate the same
that takes place on federal and Indian lands. The activity under a general statute that says nothBLM asserted “broad authority” to control oil ing about hydraulic fracturing.”
and gas operations on the basis of laws that were
Judge Skavdahl also rebukes the administrapassed in 1920, 1930, 1938, 1976 and 1982 and tive agencies that “increasingly” rely “on Chevron
were allegedly ambiguous. Thus the agency said deference to stretch the outer limits of ‘delegated’
it deserved the benefit of the interpretive doubt statutory authority by revising and reshaping
that the courts call Chevron deference.
legislation.” He reminds that agencies derive
Abusing Chevron is an Obama specialty. But their “existence, authority and powers from ConBLM’s overreach was notably egregious because gress alone,” and that Congress’s “inability or unCongress passed an energy law in 2005 that willingness to pass a law desired by the executive
stripped the executive branch of fracking juris- branch does not default authority to the execudiction and gave that power to the states.
tive branch to act independently.”
The BLM argued that Congress’s choice
A President who rewrites inconvenient laws
didn’t matter because the bureau wasn’t men- ought to alarm Americans of all political persuationed by name in the 2005 law. That claim in- sions. Principled decisions like Judge Skavdahl’s
spired Judge Scott Skavdahl of Wyoming—an help restore the constitutional norms that Mr.
Obama appointee—to conduct a remedial semi- Obama has done so much to dismantle.
N
Modi’s Investment Progress
arendra Modi did right by India on
The climate for foreign investment in manuMonday by raising limits on foreign in- facturing also remains uncertain, mainly bevestment in nine industries, including cause of the problems India’s own companies
retailing, which should allow
face, such as restrictive labor
India wants foreign
companies such as Apple and
regulations and difficulties in
IKEA to open stores in the
acquiring land. Service indusfirms,
but
it’s
still
a
country. It’s about time.
tries remain the engine of the
Critics are complaining that tough place for business. economy, and while they acthe Prime Minister’s liberalcount for more than half of
ization doesn’t go far enough,
GDP, they employ a mere
and it’s true plenty of red tape remains to ham- quarter of the workforce. A growing population
per foreign investment. Yet Monday’s move needs the jobs that labor-intensive manufacbuilds on previous rule changes and more are turing can provide.
in the planning stage. Mr. Modi is gradually reLess than 10% of the workforce is formally
ducing the ownership limits that have isolated employed with a contract and social benefits.
India’s economy since independence.
Labor regulations make it almost impossible
Foreigners will soon be allowed to own 100% to fire workers, so firms are reluctant to exof Indian airlines, arms makers and food pro- pand. Even in the cities, about 70% of Indians
cessors, as well as 74% of pharmaceutical firms. have no choice but to work in the informal
Many stakes will enjoy automatic approval, in- economy, where wages and conditions are far
stead of having to go through the Foreign In- worse than they could expect in a foreignvestment Promotion Board.
owned factory.
Mr. Modi exaggerates when he claims “India
Apple will now get an eight-year reprieve on
is now the most open economy in the world for local-sourcing rules so it can open its own
foreign direct investment.” But he deserves stores. What happens when that runs out? On
credit for consistency and follow-through. present trend it’s unlikely India will be viable
Shortly after taking office two years ago, he for a Foxconn assembly plant to make iPhones
welcomed more foreign investment in insur- as efficient as those it runs in China.
ance, defense and railway construction. A reMr. Modi has used executive orders to aclaxation of local-sourcing requirements for re- complish many of his reforms due to resistance
tailers was proposed last November and from left-wing parties in Parliament. He is
broadened Monday.
gaining politically, with his Bharatiya Janata
The more apt criticism is that removing for- Party and its allies doing better than expected
mal limits on new entrants won’t be enough to in five state elections last month. Some Indian
achieve Mr. Modi’s “Make in India” goal of cre- political analysts estimate he is within 10 votes
ating a global manufacturing hub. He wants to of passing a reform of the goods-and-services
raise manufacturing’s share of the economy to tax in the upper house.
25% from 15% by 2022—a goal that requires
This offers hope that the government will
production to grow about 15% per year. Manu- soon be in a position to push more comprehenfacturing had a banner year in 2015, but growth sive reforms. Mr. Modi’s liberalization Monday
only jumped to 9.3% from 5.5%, and the past was an important step that should encourage
few months have fallen short of that.
foreign investors. There’s more to do.
A Trump-Ryan
Condominium
“A Condominium envisions the joint exercise
of sovereignty over a
single piece of territory,
often arising when two
sovereigns
cannot
agree on the boundary
WONDER
between two territories
LAND
which each controls
By Daniel
alone.”
Henninger
—UCLA JOURNAL OF INTERNATIONAL LAW
The Republican presidential campaign is locked up because two sovereigns cannot agree.
Let us first hear from Paul Ryan,
the sovereign known as the Speaker of
the U.S. House of Representatives, on
the subject of voting for what he
called “a very unique nominee”: “The
last thing I would do is tell anybody to
do something that’s contrary to their
conscience.”
Standing opposite on the Republican
battlefield is Donald J. Trump, presumptive nominee of the GOP. Of the
Ryan conscience alliance he says: “You
know, the Republicans, honestly folks,
our leaders, our leaders have to get
tougher. This is too tough to do it
alone. But you know what, I think I’m
going to be forced to. I think I am going
to be forced to.”
Consider the balance of forces between these two.
Paul Ryan leads a Republican House
delegation that represents 247 congressional districts across the U.S. These
men and women embody millions of individual voters.
Donald Trump, as he often notes, accumulated about 14 million votes from
Republicans and independents in the
presidential primaries.
One hesitates to call this a Mexican
standoff. Still, no truer axiom exists today than that these two political bastions, the house of Ryan and the family
of Trump, must hang together or they
will hang separately.
Running by himself, as he is now, Mr.
Trump is surely headed for the cliff.
Landing atop him in historic ignominy
will be Republican control of Congress.
The moment has come for a TrumpRyan condominium.
The basis for the deal is lying in
plain sight. It is the elements of Mr.
Ryan’s House Republican policy agenda
on the economy, taxes, energy, national
security, health care and, yes, poverty.
Let us be clear about the current
baseline: Donald Trump cannot win
with what he’s doing now—running on
little money and less policy.
Indeed, Mr. Trump’s substantive tank
has run so low that as far as I can tell,
he hasn’t mentioned “the wall” in about
a week. The wall helped get him to this
point, but it won’t be enough to get
him to Pennsylvania Avenue.
He needs more to run on, and he
needs it fast, before the Cleveland
convention and its growing delegate
rebellion.
The Ryan House agenda, “A Better
Way,” is complete, published in short
and long versions, and is the explicit
consensus of the Republican Party, the
party Mr. Trump promised to unify.
The House agenda is the Trump Rosetta Stone. It is an off-the-shelf template
for getting through the next five months.
It is a way for the party’s nominee and
its stressed-out candidates to sing from
the same hymnal rather than threaten to
stab each other in the back.
If Donald Trump doesn’t like the
House sections on free trade, he doesn’t
have to sing those parts. At least 90%
of the ideas—which many House Republicans worked on, argued over and
produced—would be common ground
between them and Mr. Trump.
We’ll elaborate on just one element,
which could cause anxiety among Democrats—poverty.
It’s long been thought that any Republican who could pull more than 15%
of the black vote would put his Democratic opponent on thin ice. Black
Americans, especially younger black
Democrats, are disaffected. The Obama
economy has been harder on them
than on anyone.
These two sovereigns can
hang together or they surely
are going to hang separately.
The Ryan-House poverty proposal is
about one idea: upward mobility, about
not getting stuck for generations in the
same welfare dead end. Donald Trump
should deliver the Trumpian version of
the House’s ideas on getting ahead to
black voters in tough states. That’s what
Chris Christie did in New Jersey and
Bruce Rauner did in Illinois—and what
Mitt Romney did not do in 2012.
There is also a crude case for a
Trump-Ryan peace agreement: It can
be the basis for fundraising. Big contributors aren’t losers. They got on
the donor A-list because they succeeded at something in private life.
Those people won’t give money without some concrete idea of what the
Trump game plan is.
Absent a common policy agenda to
normalize fundraising, these donors
will transfer their money to a parallel
Republican campaign to save the Senate or the House. They will let Mr.
Trump sink, which he will without
party support.
Donald Trump says he’ll rely on the
Republican National Committee’s instate campaign machinery. But the operations that those states and Reince
Priebus created for 2016 are all treading water. Volunteers in a Virginia,
Ohio, Florida or Colorado need something to talk about on doorsteps beyond stop Hillary and make America
great again. The House Republican
agenda is already printed up, with
bullet points.
The Trump-Ryan condominium
would finally put a GOP presidential
campaign in forward motion. At least
half the country’s voters think that moment is overdue.
LETTERS TO THE EDITOR
Confronting Terrorism Wisely and Seriously
Regarding your editorial “Obama
and ‘Radical Islam’” (June 16): French
President François Hollande’s approach to terrorism contrasts with
President Obama’s.
Following the mass shootings in
Paris, where there are extremely strict
gun laws, Mr. Hollande was very angry
and urged his country to combat “radical Islamists” and used his authority
to seek them out. President Obama
was equally angry after the mass
shootings in San Bernardino, Calif.,
and Orlando, Fla., but not at the radical Islamic terrorists. Instead, he was
angry at his political opponents, the
Republicans, for not enacting stricter
gun laws. He was also angry that they
called radical Islamic terrorists “radical Islamic terrorists.”
When another shooting, one that
killed 130 people, took place in Paris,
Mr. Hollande redoubled his efforts
against radical Islamists. After Orlando, President Obama and his successor-candidate, Hillary Clinton, redoubled their efforts against their
political opponents.
Mr. Obama charged his opponents
with being at war with “an entire religion.” Mr. Hollande acknowledged a
war against radical Islamist terrorism, while proclaiming that all faiths
could live peacefully in secular
France. Mr. Obama and Mrs. Clinton
attacked Donald Trump. Mr. Obama
complained that Mr. Trump and his
followers were trying to prevent his
officials from “doing their job,” while
FBI Director James Comey acknowledged, in effect, that his people had
failed to do their job in San Bernardino and Orlando.
Wouldn’t we rather have a President Hollande?
GERALD R. KLEINFELD
Tucson, Ariz.
You object to Mr. Trump’s suggestion of an outright, temporary ban
on Muslim immigrants. You suggest
instead that “we can tighten visa
screening without appearing to apply
a religious test.” I assume that you
mean such a tightened screening
would involve profiling. Almost all
world-wide jihadist attacks are being
carried out by young Muslims,
mostly male. By definition a jihadist
must be Muslim.
Just do it. Critics of profiling in
this war of ideologies (and religions)
say it won’t work, and that jihadi
groups will start using 80-year-old
Caucasian grandmothers from Iowa.
Fine. When they start doing that, then
drop profiling. Until then, do the obvious by identifying who the terrorists are. Hint: They aren’t 80-year-old
grandmothers from Iowa.
MIKE CARROLL
Tuscola, Ill.
Is it possible that the current language debate over the use of the term
“radical Islam” is an instance of the
noisy conflict of half-truths? Although the Obama administration language rule prohibiting its use is patently absurd, as the party of Mr.
Trump insists, it is also true that the
expression may well be offensive to
large numbers of Muslims who do not
wish to destroy Western civilization.
It is at least 14 years since the eminent Middle East scholar Daniel Pipes
recommended the following compromise: “If militant Islam is the problem; moderate Islam is the solution.”
EDWARD ALEXANDER
Seattle
During World War II the U.S. didn’t
admit immigrants from Nazi Germany, fascist Italy or Imperial Japan.
MICHAEL K. PAUL
Medina, Ohio
Letters intended for publication should
be addressed to: The Editor, 1211 Avenue
of the Americas, New York, NY 10036,
or emailed to [email protected]. Please
include your city and state. All letters
are subject to editing, and unpublished
letters can be neither acknowledged nor
returned.
OPINION
Red Cross Killed Non-Lethal Weapons
By Gary Anderson
The retaking of Fallujah
has become another
bloody urban battle. It
didn’t have to be this way.
Those of us who fought in Mogadishu, Somalia, in 1993 believed that
the difficulties faced there would
signal the end of such blunt-force
urban combat (the movie “Black
Hawk Down” is a reasonable depiction of the challenges), and that
more effective and technologically
sophisticated methods had to be on
the horizon.
After Somalia, the U.S. Marine
Corps began experimenting to improve urban-combat capabilities.
Maj. Gen. Mike Myatt had developed
a compelling brief titled “Chaos in
the Littorals” that persuaded the se-
ASSOCIATED PRESS
‘W
e had to destroy
the village to
save it.” That
quote from an
American officer
during the Vietnam War was used to
great effect by the antiwar movement of the 1960s. It comes to mind
after the recent battle for Ramadi in
which the Iraqi army and its associated militias, backed by American air
power, virtually leveled the city to
liberate it from Islamic State. Ramadi was held by fewer than 300 Islamic State fighters, but retaking it
involved a massive assault by thousands of Iraqi security forces.
Now a bloody battle to retake Fallujah from Islamic State is under
way, and the tens of thousands of
men, women and children unlucky
enough to be trapped are being used
as human shields. Meanwhile, those
lucky enough to escape are overwhelming aid agencies. There are
better ways to conduct urban combat than to flatten entire city blocks,
but they won’t be employed in Iraq.
Iraqi security forces advancing during heavy fighting against Islamic State
militants in Fallujah, Iraq, on June 14.
nior Marine Corps leadership that
coastal megacities would be battlegrounds in the future. The Marine
Corps’ experimentation culminated
in a series of exercises in 1998-2000
designated “Urban Warrior.”
Part of that experimentation (in
which I took part) included the development of more-discrete weapons
that could take out a room being
used as a sniper’s roost rather than
raze an entire building.
This experimentation paid off well
after the 2003 U.S. invasion of Iraq
during the first battles for Fallujah
and Ramadi. These were hard battles,
but civilian and U.S. casualties were
a fraction of those in past urban
combat. Some of the new techniques
included using small, unmanned vehicles to disarm improvised explosive
devices, and dispatching unmanned
aircraft (commonly known as drones)
to see what was happening on the
next block.
But the U.S. military’s urbanfighting capabilities in Iraq could
have been even better, with the
lives of more troops and civilians
saved, if not for political considerations that intervened.
During our experimentation in the
1990s, many of us in the U.S. military came to believe that the best al-
ternative to destroying cities and
their populations in order to “save”
them was to develop nonlethal
weapons capable of temporarily incapacitating everyone inside a building. Our troops could then enter the
structure and separate the noncombatants from armed fighters.
In 1995, led by Gen. Tony Zinni,
senior Marines persuaded Congress
to fund a Joint Non-Lethal Directorate. In the two decades since then,
some nonlethal weapons have been
deployed, including warning munitions, optical distractors and vehiclestopping equipment. But other revolutionary nonlethal weapons have
never been deployed.
One such weapon is the VehicleMounted Active Denial System, which
uses directed energy—a focused
beam of millimeter waves—to make
targeted individuals feel that they are
burning up, without actually doing
harm. The effect ends when the target flees or the weapon is turned off.
I know this because in 2005 I led the
team that field tested VMADS. I’ve
probably been zapped by it more
than any other human. It is exactly
the kind of nonlethal weapon that
could have been deployed to great effect in the urban battlefields of Mogadishu in 1993 and Iraq today.
We had hoped to use the same
technology to develop even better
weapons that could clear buildings
nonlethally by causing near-immediate temporary heat prostration to
everyone inside. Unfortunately,
even the existing VMADs weapons
will probably never be used and
more-capable weapons never developed. Why? Because of complaints
by human-rights advocates, who
seem to think that it’s better to be
dead than discomfited.
Ironically, human-rights organizations like the International Committee of the Red Cross and Human
Rights Watch that today decry the
plight of civilians in Fallujah are
the same groups that argued successfully against deploying advanced nonlethal weapons like
VMADS. It is true, as the critics
maintained, that in the wrong
hands such weapons could be used
to suppress peaceful demonstrations or even be set to kill.
We in the military tried on a
number of occasions to work with
the human-rights community to develop law-of-war protocols that
would allow for responsible use of
such weapons and to develop controls that would prevent them from
falling into the wrong hands.
Regrettably, the human-rights
groups were intransigent, and most
of us in the military concluded that
we shouldn’t spend scarce dollars
on systems that would never be
used.
Now, with Iraqi forces ill-trained
for urban warfare and lacking nonlethal weapons that could have
greatly aided their efforts, the retaking of Fallujah has resulted in another bloody urban battle and humanitarian crisis. Sadly, the coming
battles for the far larger city of Mosul and the Islamic State capital of
Raqqa could be even worse.
Mr. Anderson is a retired Marine
Corps colonel who was chief of staff
of the Marine Corps Warfighting
Laboratory during the Urban Warrior experiments from 1998-2000.
Europe’s QE Is Doing What It Should
By Richard Barwell
A
s the European Central Bank’s
quantitative-easing juggernaut
continues to buy billions of euros in assets each month, economists
remain divided over whether it is
doing any good. The truth is there’s
plenty of evidence QE is having a
positive impact. You just need to
know where to look.
Financial markets are a critical
conduit for monetary policy. A rate
cut triggers a realignment of asset
prices, to which households and
companies respond: Bond yields fall,
the currency depreciates, stocks
rally. The QE acid test therefore
boils down to whether asset purchases are affecting asset prices.
Getting inflation to reach a certain
target is just a matter of buying
enough assets.
Most economists agree that QE
can affect prices. The disagreement
is in how. Many believe that QE is
little more than a signaling device.
By buying assets, the central bank
indicates that the economy is in
poor shape and implies that the policy rate will stay low for a very long
time. That in turn means lower longterm interest rates, which then feeds
into a broad range of asset prices.
Some policy makers at the Bank
of England, surprisingly, appear to
share this view. If they are right,
then QE is one very expensive signal.
The Bank has spent £375 billion
($551 billion) on bonds when it could
have just told investors that rates
will stay low.
More than simply a
signaling device, bond
purchases are having the
desired effect on markets.
The signal may also prove counterproductive, scaring people into
spending less and saving more. If investors currently expect that rates
will remain low for the foreseeable
future, then this hypothesis suggests
that future QE will have little impact. It’s a thought that ought to
worry the Bank, since it may need to
use QE again soon.
Not all economists share this
pessimistic assessment. Some of us
think that the central bank can
boost asset prices and ultimately
the economy through increasing the
amount of cash in private hands and
reducing the supply of available securities. Investors who sell to the
ECB will typically end up reinvesting those funds in other securities.
With more money chasing fewer assets, QE will drive up prices or
drive down returns until an equilibrium is reached.
QE can have a particularly large
impact once the central bank starts
buying assets from investors that
have strong preferences for certain
securities. Pension funds and insurance companies, for instance, need
to hold long-term, high-quality
bonds. The higher the ECB can drive
their prices, the more bang it can
get for its QE buck. That realignment
of asset prices is necessary if monetary policy is to successfully reflate
the economy.
To see this in action, look at institutional investors, who frequently
complain that a scarcity of bonds is
responsible for the yield falling to
zero on 10-year German government
bonds or the commentators who repeatedly warn that rock-bottom
bond yields are driving investors
into riskier securities in a search for
higher returns. Both claims are consistent with the ECB’s QE having an
outsize impact on asset prices and
ultimately activity.
Of course, what the ECB buys is
important as well as how much it
buys. The more the central bank disturbs the private sector’s portfolio,
the larger the so-called multiplier effect. Buying risky assets such as ultralong government bonds, corporate bonds or bundles of bank loans
should have a bigger impact per
euro spent than buying a one-year
high-quality government bond,
which is a close substitute for cash.
But alongside the larger multiplier
comes a bigger political headache
from taking more risk onto the central-bank balance sheet.
The ECB hopes that by inflating
asset prices it can ultimately boost
activity and inflation. One advantage
of the ECB’s new program of buying
corporate bonds is that the link between buying securities and encouraging spending becomes more direct. Buying corporate bonds should
drive down the cost of debt for European companies, making it
cheaper for them to invest in new
workers and new machinery. Companies may need a lot of coaxing to
spend, but the ECB’s new program
should help.
Mr. Barwell is a senior economist
at BNP Paribas Investment Partners.
Defeating Islamic State on the Digital Battlefield
By R. James Woolsey
And Chip Register
C
learly, the U.S. and its allies
can and should meet Islamic
State on the battlefield,
whether in Syria or Iraq. But the
war with the Islamic State “virtual
state”—those the terrorist organization inspires over the internet,
like Omar Mateen in Orlando,
Fla.,—will be much harder to fight
and will go on long after Islamic
State ground forces are driven into
mountains and caves.
This virtual phase of the war is
going to require a massive intelligence effort based on a deep capability to look into real-time human
behavior in the digital world: what
people are saying on social media,
what people are browsing on the
web, where people go, what they
buy, whom they chat with. Only
through a significant investment in
monitoring the digital fingerprints
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of all of us will we be able to identify patterns of behavior in real
time that identify threats before
they materialize.
In the past decade, we’ve seen
rapid development in the breadth and
sophistication of social media and the
“dark web” that enables terrorists to
go undetected. But there have been
similar advancements in data collection and analysis that let us find bad
actors before they strike.
The world creates 2.5 quintillion
bytes of data every day; 90% of all
data existing on the planet is less
than 24 months old. That’s a big
area in which to hide if you’re a bad
actor. To find them, we will need intelligent computers to chase them
through the digital landscape.
Winning this phase of the war, and
keeping people safe every day as they
go about their lives, will entail winning a technological space race.
“Moving at the pace of government”
won’t ensure our individual and collective security. We need a more formalized public-private partnership
with the focus of the Manhattan Project and the funding of the Mercury
and Apollo space programs to study
the issue, map out capabilities, assign
responsibilities, guide development
and allocate resources. The critical
success factor here won’t be the
amount of money spent, but speed,
efficiency and effectiveness.
We also need a public-relations
campaign with two primary objec-
tives: to disrupt and delegitimize
the message of Islamic State both in
the U.S. and abroad, and to restore
confidence in our civic institutions
so law-abiding citizens can have a
more productive discussion about
the balance between data privacy
and security.
The U.S. has competent, accountable and well-intentioned intelligence
capabilities. We need to turn them
loose on this threat using the latest
in data science and artificial intelligence. Anyone who has worked in or
near the U.S. intelligence community
can attest to the fact that no one
there is interested in “your damn
emails,” to quote Sen. Bernie Sanders. Rather, they work 24/7 looking
for threats that could manifest themselves as catastrophically as they did
this month in Orlando.
The U.S. bombing campaign and
eliminating Islamic State strongholds in Iraq and Syria will hurt the
terrorists’ cause substantially. But
it won’t prevent another Orlando.
We also have to attack the “virtual
state” on the digital battlefield and
degrade its message and capability
to influence the lone wolf, finance
a cell or purchase a weapon of
mass destruction.
Mr. Woolsey is chairman of the
Foundation for Defense of Democracies’ Leadership Council and a former director of the CIA. Mr. Register
is CEO of Sapient Consulting.
Counterfeit
Goods Have
No Place
On Alibaba
By Jack Ma
I
ncreased scrutiny is part of becoming a global company. When
Alibaba went public in 2014, I
told our customers, employees and
investors that what we had earned
was trust—in myself, my team, and
our company’s mission, vision and
values. With that trust comes great
responsibility. So when I see reports
in the press taking my recent words
about counterfeit goods out of context, I feel compelled to set the record straight. This is my responsibility to all of our stakeholders.
What I shared with our investors
last week was an observation: that
the dynamics between some brands
and their manufacturing partners,
and brands and their customers, are
shifting due to economic and technological developments.
Failing to protect brands is
akin to thievery—and we
have zero tolerance for it.
First, Chinese manufacturers face
declining exports because demand
from Western markets is not what it
used to be. Every day, I see small businesses in China suffer because orders
from their longtime customers are
half of what they once were. Yet these
businesses have made investments in
factories, equipment and people. They
must find new ways to adapt to this
changing environment.
Second, the internet has given
consumers ever-increasing access to
products without the need for complex and costly distribution channels.
Manufacturers in China are increasingly using the internet to tap into
the vast domestic market. Many of
these firms have developed their own
online-only brands with quality products for Chinese consumers.
What I said last week was that
these trends may challenge the business model of some established
brands. That’s reality.
I want to let you know where I
stand on this: Counterfeit goods are
absolutely unacceptable, and brands
and their intellectual property must
be protected. Alibaba is only interested in supporting those manufacturers who innovate and invest in
their own brands. We have zero tolerance for those who rip off other people’s intellectual property.
Failing to protect original designs, trademarks and technology is
akin to thievery, and it is detrimental not only to innovation but also to
the integrity of the marketplace. We
do not and will never condone any
act of stealing.
Alibaba is 100% committed to
leading the fight against global counterfeiting, online and offline. We have
devoted an unparalleled level of technology, capital and people toward our
anticounterfeiting work. Our robust
data processing and analytics enable
real-time scanning of over 10 million
new product listings a day, looking at
product attributes such as trademark, pricing, geolocation, buyer and
seller identity, consumer feedback
and more. For every one takedown
request we receive from a brand, we
have proactively removed eight.
Let’s not forget that this is a longterm crusade. There are no easy or
short-term fixes, because it is a battle
against human greed.
At Alibaba, we have built the
world’s largest platform that enables
more than 10 million merchants and
brands to directly engage with hundreds of millions of consumers.
Brands embrace our platform because
consumers love our marketplaces.
We work hard every day to protect
our stakeholders and ensure that
consumers are not hurt by shoddy
fake products. We are committed to
fighting the root causes of infringement and to protecting creators and
innovators. And we not only comply
with laws and regulations but also
actively assist law enforcement in
cracking down on counterfeiters.
We do all of this because we care
about the sustainability of our business. I’ve been around long enough to
know that authenticity is the only
thing that sustains one’s character
and maintains trust in the long run.
I’m interested in telling the truth
rather than glossing over difficult
subjects.
Alibaba always stands ready to
partner with brands. As such, I see it
as my responsibility to tell them that
the world is changing. The internet
has enabled consumers to assert
their preferences more than ever, and
thus businesses must innovate. The
good news is that we have an opportunity to work together with brands
to get ahead of these new trends.
Mr. Ma is the founder and executive chairman of Alibaba Group.
ARTS & ENTERTAINMENT
Monument to the Death of Imperial Optimism
THE ARC DE TRIOMPHE was intended to exalt
Napoleon’s victories for all eternity. A hundred miles to the north, an arch almost as tall,
and for which the Arc’s design likely served as
the point of departure, looms over the gently
rolling countryside between Amiens and Arras. This arch, the Memorial to the Missing of
the Somme designed by Sir Edwin Lutyens, is
far from triumphal yet intensely monumental.
The Battle of the Somme, which began a
century ago this July 1, was not a triumph for
the British. On that morning in 1916, tens of
thousands of British troops, many of them inexperienced, emerged from their trenches
along a 15-mile front to attack German dugouts arrayed on higher ground and in three
ranks. British artillery already had been unleashed on the enemy lines for a week, but to
limited effect aside from rattling the Germans
with its horrific din and disrupting their supplies of food and water. As the heavily laden
attackers advanced to the enemy’s barbed
wire, German machine guns and artillery
mowed them down with industrial efficiency.
Not only did that day end with the enemy positions mostly intact, but it yielded 60,000
British casualties, a third of them dead or
missing. It was the bloodiest day in the British
army’s history and it spelled the end of an era
of imperial self-confidence and optimism.
It also spelled the end of the cultural dispensation that nurtured Lutyens’s stellar career, which entailed the design of fine country
houses, imposing bank and office buildings
and the palatial Viceroy’s House in New Delhi.
Still, no other British architect had a more
conspicuous role in the commemoration of
World War I than Lutyens.
Located near the little village of Thiepval,
the Somme memorial is built of brick and
limestone, and has a much more complex
physiognomy than an arch of the classic ancient Roman type, where sculpture—as at the
Arc de Triomphe—typically provides the main
dynamic counterpoint to the arch’s static
mass. The Somme memorial, which features
carved ornament but no figure work, is more
wholly dynamic mainly because of the building
up of structural blocks from which arches
spring in a pyramidal formation. The harmonious proportions between and subtle inflections
in these masses, the latter becoming more accentuated toward the summit of the arch’s
richly faceted superstructure, make a powerful
impression that engages both mind and
senses. The way the linear limestone detailing
emphasizes the interlocking of structural components, the organic quality they assume
thanks to the slight batter or slope Lutyens
The Memorial to
the Missing of the
Somme designed
by Sir Edwin
Lutyens.
gave them, and the accents of deep shadow
that he worked into his design all contribute
to one’s sense of densely orchestrated complexity within a readily legible composition.
The monument beckons the visitor from
across a rectangular grass terrace. The approach is formal and processional. The destination is the low altar—the Lutyens-designed
Stone of Remembrance situated at many British military cemeteries—which lies beneath
the lofty central arch. You ascend a high flight
of steps, flanked by panels on which names of
the missing are inscribed, then continue up a
lesser flight to the 10-ton Stone, resting on
three low steps and bearing Kipling’s inscription: “Their name liveth for evermore.” From
there you look straight ahead to a cemetery
with Sir Reginald Blomfield’s Cross of Sacrifice and 600 French and British graves, most
of them home to unidentified soldiers. Beyond
lies gorgeous countryside miraculously re-
Weather
Riga
g w
Glasgow
osco
Moscow
Co
C
p h g
Copenhagen
D
bli
Dublin
Berlin
li
A
d
Amsterdam
London
Lond
kf
Frankfurt
Brussels
arsaw
Warsaw
Pra
Prague
e
Kiev
-15
-10
-5
0
5
10
15
20
25
30
35
Munich
i h
Paris
Vienna
Warm
Budapest
Geneva
Milan
Cold
Bucharest
h
Stationary
Showers
Rome
t b
Istanbul
Rain
Madrid
d id
Lisbon
L b
T-storms
Al
i
Algiers
Athens
Ath
T i
Tunis
Snow
Flurries
Rabat
b
Global Forecasts
s...sunny; pc... partly cloudy; c...cloudy; sh...showers;
t...t’storms; r...rain; sf...snow flurries; sn...snow; i...ice
Mr. Leigh writes about public art and
architecture.
Hi
22
20
34
34
46
29
31
33
33
18
23
26
23
16
38
19
31
35
28
35
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30
43
17
17
32
Today
Lo W
13 t
12 c
25 s
25 pc
29 s
17 pc
25 t
18 s
19 s
10 t
9 pc
16 s
13 t
8 s
25 s
10 sh
25 pc
22 t
17 s
25 s
14 t
16 s
32 s
10 sh
10 sh
19 t
Tomorrow
Hi Lo W
19 13 sh
20 13 c
32 23 t
34 24 t
47 30 s
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31 16 t
17 10 t
27 12 s
27 16 s
19 12 sh
15 8 s
39 25 s
19 12 r
31 26 pc
32 21 pc
31 21 s
35 26 pc
28 14 t
31 19 s
41 31 s
18 10 sh
16 9 sh
24 13 t
City
Geneva
Hanoi
Havana
Hong Kong
Honolulu
Houston
Istanbul
Jakarta
Johannesburg
Kansas City
Las Vegas
Lima
London
Los Angeles
Madrid
Manila
Melbourne
Mexico City
Miami
Milan
Minneapolis
Monterrey
Montreal
Moscow
Mumbai
Nashville
New Delhi
New Orleans
New York City
Omaha
Orlando
Today
Hi Lo W
30 17 t
35 26 t
31 23 pc
34 28 t
29 23 pc
34 24 t
32 23 s
32 25 t
17 3 s
31 22 t
43 28 s
22 16 pc
20 12 pc
27 15 pc
35 18 s
33 26 t
10 6 sh
23 13 t
32 26 pc
34 23 s
29 21 pc
35 20 pc
28 17 s
25 15 pc
31 26 sh
36 23 t
39 27 s
33 25 pc
28 17 s
31 23 pc
35 24 t
Tomorrow
Hi Lo W
23 14 t
35 26 t
32 22 pc
34 29 pc
29 23 c
33 24 t
31 23 s
32 24 t
18 3 s
35 23 pc
42 29 s
22 15 c
19 12 pc
29 16 pc
34 17 s
34 26 pc
11 5 pc
22 13 t
33 26 pc
32 20 t
30 19 t
36 22 pc
30 18 s
25 18 pc
30 26 sh
34 24 pc
38 27 t
34 25 pc
29 18 s
35 20 c
35 24 t
Today
City
Hi Lo W
Ottawa
29 16 s
Paris
23 14 pc
Philadelphia
29 17 s
Phoenix
43 31 s
Pittsburgh
28 18 pc
Port-au-Prince
34 22 t
Portland, Ore.
20 12 sh
Rio de Janeiro
22 17 pc
Riyadh
43 31 s
Rome
31 20 s
Salt Lake City
32 13 s
San Diego
24 19 pc
San Francisco
23 13 pc
San Juan
32 26 pc
Santiago
12 0 s
Santo Domingo 32 22 t
Sao Paulo
18 12 s
Seattle
18 12 sh
Seoul
25 19 r
Shanghai
33 22 t
Singapore
31 26 pc
Stockholm
22 17 t
Sydney
17 8 s
Taipei
35 27 t
Tehran
34 20 s
Tel Aviv
33 24 s
Tokyo
25 22 r
Toronto
28 16 s
Vancouver
19 13 sh
Washington, D.C. 29 20 pc
Zurich
30 17 t
COVERAGE YOU TRUST.
INSIGHT YOU NEED.
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Ice
Tomorrow
Hi Lo W
31 17 s
20 12 sh
31 18 s
43 30 s
30 20 s
35 22 t
26 14 s
23 17 pc
44 31 s
31 19 pc
27 14 s
24 19 pc
23 13 pc
32 26 pc
13
1 s
31 22 t
19 11 pc
22 13 pc
27 19 s
26 21 sh
31 27 t
26 15 pc
16 8 s
35 27 t
35 23 s
32 24 s
27 22 sh
28 17 s
20 13 pc
29 19 s
25 14 t
PUZZLE
CONTEST
65 Winning streak
66 Tevye’s portrayer
14
15
16
67 Endangered
state bird
17
18
19
68 Overly optimistic 29 Penalize via
20
21
paycheck
69 Hits theaters
70 51-Down greeting 33 Experiences
22
23
24 25
26 27
Down
35 Arrest
28
29
30
31
36 Not quite smart
1 Some
37 Black jack, half
2 Shoe brand
32
33
34
35
36
the time
named for a city
37 38 39
40
41
38 Confused
3 Not acquired
memories
from nurture
42
43
44
39 JFK or RFK
4 Earth sci.
45
46
47
48
49 50 51
40 Mythical body of
5 Make after
water
expenses
52
53 54 55
56
57
41 Lacking logic
6 Perch variety
58
59
60
7 “Battle Hymn of 47 Particle with no
mass
the Tiger Mother”
61 62
63 64
49 Accustomed
author Chua
65
66
67
8 Letters before a 50 Chorus syllables
viewpoint
51 Eighth-largest
68
69
70
city in the
9 Ostentatious
Southern
10 Hershey’s
Hemisphere
old-school rival
DOUBLE FEATURES | By Matt Gaffney
53 In an appropriate
11 Cork folk
The answer to this
20 Steeped growth 42 Tall and thin
way
12 Wheaton of
week’s contest
43 Digs for pigs
21 Tenth: Prefix
54 “The Simpsons”
“Stand By Me”
crossword is a
22 Granola bar piece 44 Dismissive
small
13 “That hurt!”
celebrity chef who
utterance
23 Result of leaving
businessman
18
Put
back
in
the
would have made
45 It can fire 600
your eel in the
55
Enhance
oven
a good sixth theme
rounds a minute
oven too long?
19 Its drummer was 56 Continental
entry.
46 Talk nonstop
28 Corleone who
dividers
Bill Berry
went against
48 Ruhr rejections
Across
24 Use mace on (an 60 Orange drink
the family
52 Sound made
1 Sacha Baron
61 Do it wrong
attacker)
when dropping
Cohen’s “voice of 30 “All Songs
62 John for John
25 Front of a boat
Considered” airer
an old movie
da yoof”
Major
26 Indy winner
player?
31 Fuming feeling
5 Bond of recent
63 Cruiser occupant
Luyendyk
57
Senate
“forget
it”
32
“Now
we’re
issue
27 Once around the 64 Do the same
talking!”
58 Jogger’s
10 Vitamin that’s
sun
thing as
entertainment
34 Rand Paul’s
also a plane
system
father
14 Scourge
Previous Puzzle’s Solution
59 Like 66-Across’s
15 Math proposition 36 One side of
G O B I
A L L
B A K E S
A
N A T
M E A L
A B I D E
voice
56-Down
16 Kasich’s domain
S T L O U I S MO
B E N I N
17 Refused to look
37 Person who fired 61 The happiest
A L O N G
P O S E
G S O
A R C
V A N
S A L E MO R
at the person in
boat in the
arrows at the
B I L G E
O N E L
X E N A
the mirror?
marina?
Apache?
T O U R I S T Y
A L E
1
2
3
4
5
6
7
8
9
10
11
12
13
Email your answer—in the subject line—to [email protected]
by 11:59 p.m. Eastern Time Sunday, June 26. A solver selected at random
will win a WSJ mug. Last week’s winner: Christopher Handy, Yarmouth,
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necessary. Void where prohibited. U.S. residents 18 and over only.)
s
© 2016 Dow Jones & Co., Inc. All rights reserved. 6DJ3852
Lutyens seems to have read the Arc de Triomphe’s principal and transverse arches as a
nave and transepts to which, in working out
his Somme design, he added flanking aisles.
The result is a symmetrical composition involving arches of four different sizes whose 16
supporting blocks provided the space needed
for that interminable roster of the dead.
Lutyens’s monument is a highly resolved,
strikingly abstract essay in monumental form
deeply grounded in the classical tradition but
not bound by any stylistic canon. From time
immemorial monuments have marshaled
structural expression to embody the presence
of the dead in our lives. And that’s what
Lutyens’s Thiepval monument does. It has
nothing to say about World War I except that
its dead are with us, and always will be.
The WSJ Daily Crossword | Edited by Mike Shenk
Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day.
City
Amsterdam
Anchorage
Athens
Atlanta
Baghdad
Baltimore
Bangkok
Beijing
Berlin
Bogota
Boise
Boston
Brussels
Buenos Aires
Cairo
Calgary
Caracas
Charlotte
Chicago
Dallas
Denver
Detroit
Dubai
Dublin
Edinburgh
Frankfurt
deemed, it might seem, from the shell-blasted
desolation of a century ago.
The central arch’s soffit, beautifully detailed, soars high above you. From the central
vantage point of the Stone you next take in a
spellbinding interplay not of masses but of
spaces, and you wander from one vaulted enclosure to another. Walls are adorned with
stylized wreaths encircling the locales of more
or less futile bloodletting—including Thiepval
Ridge, for the Germans waged fierce resistance
from the site of Lutyens’s monument as the
Battle of the Somme continued on its terrible
41/2-month course. (Fighting in the area ended
only with the turning back of the Germans’ final Western Front offensive in 1918.) Below the
wreaths lie the stone panels with the names of
72,000 men, British officers and soldiers alike,
for the spirit of British commemoration after
World War I was resolutely democratic.
It’s as if you were in an open-air church.
T
B
I
R
D
S
T
O
R
E
R
O
B A
I
Y L
I S
E
L O
D R
S A
L T
S O
P
E I
A N
S
E
D
I MO R E
P R Y A
H S
S
O O H
N
G E
O U L D
L S E
A S S
A
D
O
B
E
MD
P A R T
T R O P
K B S
T G O
E R C O
N A O H
T Y P O
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BUSINESS NEWS B2 | TECHNOLOGY B3 | MONEY & INVESTING B5 | HEARD ON THE STREET B8
BUSINESS & TECH.
© 2016 Dow Jones & Company. All Rights Reserved.
Friday - Sunday, June 24 - 26, 2016 | B1
Hyundai Mulls Shipping Alliance
BY IN-SOO NAM
SEOUL—Hyundai Merchant
Marine Co., one of South Korea’s major shipping lines, has
entered talks to join the
world’s largest shipping alliance as it struggles to survive
an industry slump.
The move to join the 2M alliance comes as the flagship
unit of the Hyundai Group is
reeling under 5.2 trillion won
($4.48 billion) in debt after
losing money for several years.
The state-run Korea Development Bank and other lenders
have threatened to put it under receivership if it fails to
lower its debt, cut charter
rates and join a global shipping alliance.
Falling demand from China,
Europe and emerging economies has pummeled the global
shipping industry in the past
few years. Freight rates for
container and dry-bulk vessels
are well below operating costs,
and several shipping companies have filed for protection
or folded outright.
“2M has wanted to enhance
its influence in the Asian region. And we want to raise our
presence in Asia-U.S. routes.
Both sides will benefit from a
successful deal,” Hyundai Mer-
chant said on Thursday.
The 2M alliance, made up of
Maersk Line, the A.P. MollerMaersk A/S shipping unit that
is the world’s biggest con-
Hyundai Merchant
Marine looks to cut
costs during
industrywide slump.
tainer line by capacity, and No.
2 carrier Mediterranean Shipping Co., controls about a
third of the Asia-Europe trade
route, the most lucrative.
Hyundai Merchant has been
left out of a global shipping alliance formed recently by six
Asian and European containershipping operators to challenge the dominance of giants
such as Maersk Line and Mediterranean Shipping. Hyundai’s
Korean rival Hanjin Shipping
Co. is part of the six-member
group called “THE Alliance.”
Hyundai has been in talks to
join that grouping, but little
progress has been made. A
spokesman said the company
will end talks to join THE Alliance and focus on negotiations
with M2 members.
Alliance memberships have
LinkedIn
Connects
In China;
Now, Risks
become an imperative in an industry marred by 30% oversupply of vessels in the water
and rock-bottom freight rates.
Alliance partners share ships,
networks and port calls that
cut their costs by hundreds of
millions of dollars annually.
Earlier this month, Hyundai
cleared a major hurdle in its
efforts to avoid bankruptcy by
slashing the rates it pays to
owners of its chartered fleet.
The company currently pays
close to $1 billion a year in
charter fees for 83 vessels
leased from independent overseas shipowners. It operates a
total of 116 vessels.
BY ALYSSA ABKOWITZ
BEIJING—Western technology companies have long
struggled to figure out how to
operate in China, home to the
world’s biggest internet and
smartphone markets but ruled
by an authoritarian government. Yet LinkedIn Corp. is an
exception.
To enter the country,
LinkedIn in 2014 made a rare
concession for a U.S. socialnetworking company when it
agreed to abide by local censorship rules. The company
adjusted its business strategy
to fit Chinese preferences,
joining hands with Chinese
firms China Broadband Capital
and Sequoia China.
Now, though, some China
technology observers are raising concerns that Microsoft
Corp.’s plan to acquire
LinkedIn for $26 billion, announced last week, could interfere with the professional
social network’s progress in
the country.
China’s Great Firewall
fences off the internet to many
of the world’s tech titans, and
foreign competitors complain
about protectionist government policies that they say
crimp their business. Alphabet
Inc.’s Google pulled out in
2010 after declining to censor
results on its search engine.
Facebook Inc. and Twitter
Inc. are blocked. Microsoft and
Qualcomm Inc. have faced
headwinds in China such as
antitrust probes and espionage accusations.
Meanwhile, human-rights
advocates have criticized
LinkedIn for censoring articles
about anniversaries of the
1989 crackdown on Tiananmen
Square protesters or the detention of human-rights lawyers.
Still, LinkedIn’s alliances
and strategy concessions
worked to help establish the
company’s China business.
Since LinkedIn’s entry, its
membership in China has
grown more than fivefold to
20 million users.
“They have realized in order to be successful in China
you cannot take a business
model from the West and cut
Please see CHINA page B3
CAROL M. HIGHSMITH/PLANET PIX/ZUMA PRESS
U.S. Oil Output to Get Boost From Gulf
Oil rigs in the Gulf of Mexico off
the coast of Galveston, Texas.
Surprising surge from
Gulf of Mexico could
prolong crude glut
weighing on prices
BY LYNN COOK
AND ERIN AILWORTH
Oil companies are pumping
more crude off the U.S.
coast in the Gulf of Mexico, a
surprising trend that shows
the resilience of the nation’s
energy industry.
Despite the worst price
downturn in a generation, so
much oil is starting to pour
forth from offshore fields near
Louisiana and Texas that it
is partially offsetting declining
output from shale regions on
shore and propping up total American oil output.
The U.S. is currently pump-
ing about 8.7 million barrels a
day, 480,000 less than at the
end of last year, according to
the Energy Information Administration,
as
low
prices spur companies to shut
down new exploration and
some existing shale-oil wells
begin to peter out.
Production is forecast to
drop further to 8.5 million
barrels a day later this year.
But well over 500,000 barrels a day of new Gulf crude is
set to come online this year
and next, according to a Wall
Street Journal analysis of government data, company presentations and regulatory filings.
The Gulf surge threatens to
prolong the glut of crude that
has built up in storage around
the U.S. and helped push down
prices, said Roger Diwan, vice
president of financial services
at IHS Energy.
“The projects are coming
faster and sometimes bigger
than expected,” he said. “The
ramp-up seems to have accelerated during low prices.”
Gulf production is rising in
part because a handful of
massive oil fields sanctioned
for
development
years
ago by companies like Freeport McMoRan Inc. and BP
PLC when prices were higher
are starting to pump oil this
summer and fall.
But it is also going up because companies are finding
that smaller satellite fields can
be tapped relatively cheaply
by linking them to existing
offshore oil platforms by way
of underwater pipelines.
While production from
many of these so-called tieback wells is reflected in forecasts from banks and analysts,
the Journal analysis found
that some of it appears to
have been undercounted.
American offshore oil production is on track to set a record in 2017, with 1.91 million
barrels flowing out of
the Gulf by year’s end, according to the U.S. Energy Department. That would be a
24% surge over 2015’s offshore oil output of 1.54 million
barrels a day and would beat a
previous high of 1.56 million
barrels a day set in 2009, the
year before BP’s Deepwater
Horizon oil spill disaster temporarily shut down drilling, federal data show.
While the conventional wisdom in the energy industry
was that deep-water oil development was too expensive
at current prices of around
$50 a barrel, producers lookPlease see OIL page B2
Bright Spot
U.S. Gulf of Mexico crude oil
production, in millions of
barrels per day
Annual projections
2.0
1.5
Dec. 2017
production
is expected
to reach
1.9 million
barrels
per day.
1.0
0.5
0.0
1996 ’00
’10
’16
Source: U.S. Energy
Information Administration
Panama Canal Cheers Jury Says Led Zeppelin Didn’t Steal Song
South Carolina Towns
BY ERICA E. PHILLIPS
THE UPSTATE, S.C.—When
the Panama Canal opens up a
new lane for bigger ships this
Industrial Boom
Construction of new industrial
space has recently soared in the
Greenville-Spartanburg, SC area.
Square footage of
new construction
6.8M
6 million
4
2
0
2004
2010
Source: CBRE, Q1 2016
2016
month, a large amount of the
cargo they carry will be
headed for this quiet corner of
the Southeast, some 200 miles
inland.
In the past few years, the
rolling hills and farmland surrounding the South Carolina
towns of Greenville and Spartanburg have given way to
massive warehouses and industrial parks. Restaurants in
Greenville’s formerly neglected
downtown cater to corporate
managers and engineers from
Germany and Japan. Trucks
clog the two main interstates,
carrying engine parts and finished goods to and from the
region’s growing number of
manufacturing plants.
More development is on the
way: over six million square
feet of warehouse space is under construction in the Greenville-Spartanburg region, a
scale typically seen in major
cities like Philadelphia and St.
Louis, according to CBRE Inc.,
a real-estate brokerage.
The construction frenzy is
being fueled by developments
Please see TRADE page B2
Led Zeppelin didn’t steal
the opening bars of its 1971
megahit “Stairway to Heaven”
from the band Spirit, a Los
Angeles federal jury decided
on Thursday.
Michael Skidmore, a trustee
for the estate of the late Spirit
frontman Randy Craig Wolfe,
sued Led Zeppelin along with
divisions of their record company, Access Industries’ Warner Music Group, in federal
court in 2014, three years after the band released a remastered version of “Stairway to
Heaven.” The lawsuit claimed
that the beginning of “Stairway to Heaven” was lifted
from a song called “Taurus,”
which features a similar set of
descending guitar chords.
Spirit’s Mr. Wolfe, who died
in 1997 while saving his son
from an ocean current, never
sued during his life, but
shortly before his death he was
quoted in a magazine as saying
that he believed “Stairway to
Heaven” was a “rip-off” of
“Taurus” and was angry that
Led Zeppelin never said “thank
you” or offered to pay him.
JAY DICKMAN/CORBIS/GETTY IMAGES
BY HANNAH KARP
Led Zeppelin’s Robert Plant and Jimmy Page in an undated photo.
But lawyers for Led Zeppelin’s lead singer, Robert Plant,
and guitarist. Jimmy Page, had
a music professor play on piano for the jury a wide range
of other songs also featuring
the same descending chromatic scale and arpeggiated
chords featured in the twominute-and-14-second intro to
“Stairway to Heaven,” showing
that the band was employing
common musical building
blocks. One song in particular,
a folk song in the public domain called “To Catch a Shad,”
sounded
“extraordinarily”
similar, noted one of the expert witnesses after he’d
played it.
On the witness stand, Mr.
Plant drew laughter when
questioned about his memories of meeting Spirit’s band
members at one of his old
haunts in England.
“I’ve no recollection of
mostly anybody I’ve ever hung
out with,” he said. “In the
middle of all the chaos and
hubbub, how are you going to
remember one guy from another if you don’t see him for
40 years?”
When asked whether he
could write or read music, he
said “I haven’t learnt yet.”
Mr. Page, meanwhile, explained his initial vision for
the nearly eight-minute song.
It would “go through many
moods and changes and basically be like a reveal…[starting] off with something more
whimsical, if you like, but ending up with this huge roll at
the end.”
The decision may represent
a victory for current songwriters, some of whom have been
spooked since another jury
last year found that artists
Pharrell Williams, Robin
Thicke and rapper T.I. owed
millions to the family of Marvin Gaye for infringing on Mr.
Gaye’s song “Got to Give It
Up” to create their 2013 pop
hit “Blurred Lines.”
B2 | Friday - Sunday, June 24 - 26, 2016
INDEX TO BUSINESSES
BUSINESS NEWS
These indexes cite notable references to most parent companies and businesspeople
in today’s edition. Articles on regional page inserts aren’t cited in these indexes.
I
B
QEP Resources............B8
Qualcomm...................B1
iQIYI ............................ A2
R
Bank of America.........B5
Bank Polska Kasa
Opieki........................B8
Birchcliff Energy.........B8
BlackBerry...................B3
BSI...............................B5
H
Hyundai Group............B1
Hyundai Merchant
Marine.......................B1
J
Japan Trustee Services
Bank..........................B7
Raiffeisen Bank
International.............B8
Ralph Lauren...............B8
L
S
Samsung Electronics..B3
Sequoia China.............B1
Shanghai Shendi
Group ........................ A6
Suncor Energy.............B8
C
M
Macy's....................B2,B8
Maersk Line................A2
Mayi.com.....................B3
Mediterranean
Shipping....................B1
Meituan.com...............B3
Microsoft.....................B1
Mogujie.com................B3
Moody's Investors
Service......................A2
O
Dianping Holdings ...... B3
E
Q
LinkedIn.......................B1
Carlsberg Series.........A2
Centennial Resources
Development.............B8
China Development
Bank Financial
Leasing......................B5
China Merchants
Securities..................B7
Citigroup......................B5
D
Powszechna Kasa
Oszczednosci Bank
Polski.........................B8
Powszechny Zaklad
Ubezpieczen..............B8
T
Tencent Holdings........B3
Tesco......................B3,B8
TJX...............................B8
Toshiba........................B7
Tujia.com.....................B3
Twilio...........................B7
Twitter...................B1,B3
U
Emerald Oil.................B8
Encana.........................B8
1Malaysia
Development.............B5
Orient Securities........B5
UniCredit.....................B8
F
P
Facebook................B1,B3
Fiat..............................B3
58.com.........................B3
Pioneer Natural
Resources..................B8
Piper Jaffray...............B8
Walt Disney...........A1,B3
Warner Music Group..B1
W
Y
YouTube.......................B3
INDEX TO PEOPLE
A
Gorman, Amanda ...... W3
S
Andersen, Nils S ........ A1
L
B
Lewis, Dave.................B3
Lundgren, Terry.....B2,B8
Stanley, Chuck............B8
Sutherland, Joel ......... B2
Bavor, Clay..................B3
Brandt, Emily.............W3
C
Cavender, Ben.............B3
Chen, John .................. B3
Constant, Frédérique.W7
M
Manick, Cynthia.........W3
O
T
Taylor, Rebecca..........W3
Tirrell, William............B5
X
Xianghua, Yang...........A2
Olivarez, José............W3
G
P
Gennette, Jeff.......B2,B8
Pennington, Trey ........ B2
Y
Yang, Melissa..............B3
Yersh, James...............B3
Christie’s, Sotheby’s
See Lean Art Sales
BY ANNA RUSSELL
On the heels of disappointing sales in New York last
month, and before the U.K.’s
“Brexit” vote, Christie’s and
Sotheby’s served up a pair of
lean impressionist and modernist sales in London this
week. A few trophy works in
the high-profile sales notwithstanding, pickings were slim
and overall totals were down
from last year.
Collectively, the houses sold
$189 million, down 52% from a
$395 million total for similar
sales last year. The lower totals are partially the result of
fewer lots, with sellers more
hesitant to part with work in
an uncertain market. This year,
Christie’s sale included 33 lots,
while Sotheby’s offered up just
27 works, down from 50 from
each house last year.
Demand for works at the
top end helped drive up sales
totals. On Tuesday, 80% of Sotheby’s $152 million sale came
from two standout works: Picasso’s 1909 cubist painting
“Femme Assise,” which sold
for $63.6 million, and Modigliani’s 1919 portrait of his
red-scarfed lover Jeanne Hébuterne, which sold for $56.6
million.
Both works were won after
dogged bidding from collectors, with some in the sales
room departing after they
sold.
Art advisers Amy Cappellazzo and Adam Chinn, whose
firm Art Agency, Partners was
acquired by Sotheby’s in January, faced off for the Picasso,
touted as a museum-quality
work and one of his rare cubist canvases to come to auction. The painting has been in
a private collection since
1973, when Sotheby’s sold it
in London for £340,000. Over
all, Sotheby’s managed to find
buyers for 88.9% of lots.
On Wednesday, in an otherwise ho-hum sale in which just
64% of lots sold, Christie’s
managed to snag $12.1 million
for another Modigliani, a
mournful 1917 portrait, “Madame Hanka Zborowska.”
The work sold for above its
high estimate of $10.2 million.
(Estimates don’t include house
fees.)
But collectors passed on
other works, especially at
Christie’s, where a particularly rough patch saw five
lots in a row fail to find buyers. Among those was a
breezy outdoor scene by
Claude Monet, which carried
an estimate of £4.5 million to
£6.5 million ($6.6 million to
$9.6 million) and was billed
as a sale highlight. On Tuesday, Sotheby’s gave a bronze
by Rodin, of a naked and
shamed Eve, a low estimate
of £8 million, but the work
stalled at £6.2 million and
went unsold.
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Macy’s CEO to Step Aside in 2017
BY SUZANNE KAPNER
AND JOANN S. LUBLIN
Macy’s Inc.’s Terry Lundgren
will step down as chief executive at a time when the retailer
built over 14 years is struggling
to adapt to changing consumer
demands.
The department store chain
appointed one of Mr. Lundgren’s top lieutenants, President Jeff Gennette, to take over
as CEO in 2017, a move the
company said was part of its
succession plan. Mr. Gennette,
55 years old, joined the retailer
in 1983 as an executive trainee
and has climbed the ranks over
three decades, much like his
predecessor. Mr. Lundgren, who
will turn 65 next year, will remain chairman.
Macy’s directors accelerated
the timetable for Mr. Gennette’s
ascent to give him the freedom
to begin reshaping Macy’s now,
according to a person familiar
with the company. “He is going
to make the radical changes”
before he officially takes the
helm, this person said, adding
that Mr. Gennette “has a tough
job” ahead of him.
Shares of Macy’s rose 2% to
$33.48 in midday trading
Thursday. Even factoring in that
move, the company’s stock has
lost roughly half of its value in
the past 12 months. The decline
attracted activist investor Starboard Value LP, which last year
pressured the company to explore options for its vast realestate holdings.
“Now is the time to reset our
business model to thrive in a
future that is being driven by
rapid evolution in consumer
Terry Lundgren has led the U.S. retailer for more than 14 years.
preferences and shopping habits,” Mr. Lundgren said.
Macy’s results have been disappointing. In the first quarter,
it reported its worst quarterly
sales since the recession, setting off fresh fears about the
health of the U.S. retail sector
and raising concerns as to
whether the chain is losing
market share to online players
like Amazon.com Inc. and fastfashion chains like H&M.
Executives at the retailer,
which Mr. Lundgren built into
the nation’s largest department-store chain, have complained that consumer spending
has shifted from handbags and
cosmetics to experiences and
electronics, areas where it has
little exposure. To address the
changes, Mr. Lundgren has
pushed into off-price retailing
to compete with the likes of
TJX Cos.’ brands TJ Maxx and
Marshall’s. Last year, it also
bought beauty and skin-care
chain Bluemercury Inc. in a bid
to reach customers beyond the
mall.
Finding a lasting solution to
the shifting shopping habits
will now fall on Mr. Gennette,
who was anointed heir-apparent in March 2014 after being
chief merchandising officer for
five years.
Mr. Gennette is steeped in
Macy’s, with a 33-year career
where he climbed every rung of
the hierarchy. Starting as
trainee, he also served as a
store manager for FAO
Schwarz, held merchandise positions for its men’s and children’s businesses, and eventually
took
executive
responsibility for various regions.
Some Macy’s directors initially had been unsure whether
the CEO-to-be could identify
the sweeping steps needed,
given his long Macy’s tenure
and similar background to Mr.
Lundgren, the person familiar
with the matter said. But the
full board ultimately decided
Mr. Gennette “has the courage”
to make the big shifts needed,
this person said.
After elevating Mr. Gennette
to president in 2014 putting
him in pole position to succeed
Mr. Lundgren, Mr. Gennette has
filled holes in his management
experience. He led analysts
meetings, dealt regularly with
Macy’s finance chief, attended
board meetings and learned
more about marketing, this person said.
“There is no doubt that
Macy’s Inc. will need to be a
significantly different retailer in
the future in the way we operate and approach the marketplace,” Mr. Gennette said on
Thursday.
The company said earlier
this year it would close about
40 stores, cutting thousands of
jobs. Macy’s employed about
157,900 full-time and part-time
workers as of Jan. 30. After deciding against a spinoff of its
properties, it has also hired advisers to explore strategic options for its flagship stores and
real-estate portfolio.
—Austen Hufford
contributed to this article
TRADE
Continued from the prior page
at the Panama Canal, nearly
2,000 miles away. A new,
wider channel is expected to
open later this month, allowing bigger ships to pass
through, lowering the cost of
bringing Asian-made goods directly to the East Coast.
Cities from the Gulf Coast
to New York are also trying to
lure more Asian imports once
the canal opens.
Economists and developers
say the Upstate’s low labor
costs and acres of cheap, undeveloped land, give the region an edge. They also cite its
manufacturing base, as the
auto industry draws suppliers
to locate closer to factories,
and growing auto exports require bigger ocean vessels to
reach customers around the
world.
The expanded Panama Canal “is going to drive industry
and create even more businesses there,” said Joel
Sutherland, director of the
Supply Chain Management Institute at the University of San
Diego. “Having a regular flow
of containers…will attract major manufacturing, then their
suppliers, then their suppliers’
suppliers, and ultimately more
people.”
From the Port of Charleston—which is dredging its
harbor to be the deepest on
the East Coast—container
cargo makes the quick trip by
rail to a freight hub in Greer,
S.C., known as the Upstate’s
“inland port.”
Trucks pick up those containers of component parts
and retail goods bound for
nearby factories and distribution centers. And from there,
truckers can reach Atlanta or
Charlotte, N.C., in two or three
hours, and most of the rest of
OIL
Continued from the prior page
ing to squeeze out profits
from existing investments
have rushed to tap tiny wells
offshore and connect them
to oil platforms.
One of them is Exxon Mobil
Corp. It started pumping
13,000 barrels a day at the end
of April from a well 200 miles
south of New Orleans known
as Julia, whose production is
being piped back to Chevron
Corp.’s Jack/St. Malo platform.
Exxon expects
Julia’s production to eventually hit 34,000 barrels a day.
Big oil companies, including
BP and Royal Dutch Shell PLC
as well as independent exploration outfits like Anadarko
Petroleum Corp. and Noble Energy Inc., are pursuing tiebacks. None would quantify
how much production they ex-
LUKE SHARRETT/BLOOMBERG NEWS
G
Goodrich Petroleum....B8
DOROTHY HONG FOR THE WALL STREET JOURNAL
A
Accenture....................B3
Airbnb..........................B3
Alphabet......................B1
Amazon.com ............... B8
Antero Resources.......B8
A. P. Moller-Maersk...A1
Apple...........................B3
The Port of Charleston, shown last year, is dredging its harbor to be the deepest on the East Coast.
the Eastern U.S. within a day’s
drive.
“The Panama Canal is not
even completed, the port
dredging has not been completed, but we’re already attracting major distribution
and manufacturing companies,” said Trey Pennington,
an industrial real-estate broker with CBRE in Greenville.
“The Panama Canal will fundamentally change the market
dynamics of South Carolina in
the coming years.”
The Upstate was a textile
hub for a century before the
industry began to decline in
the 1970s.
Michelin began making
tires in the region in the early
1970s, and BMW AG opened an
auto plant outside Spartanburg in the early 1990s. Suppliers have followed over the
years.
More recently, retailers
have set up distribution centers where they can quickly
ship products to customers
across the Southeast.
Greer’s inland port kickstarted another wave of devel-
opment when it opened three
years ago.
Nearly 95,000 jobs and
$26.8 billion in economic output in the Upstate is directly
or indirectly related to the
Port of Charleston, according
to a 2015 study by the University of South Carolina’s Moore
School of Business.
The study credited the
port’s infrastructure for boosting “the initial stages of future
economic growth that will occur throughout the state.”
Area businesses in the Upstate hope the arrival of larger
ships in Charleston will kick
off that next wave.
“That’s only upside for us,”
said John Sterling, chief executive of Foxfire Technologies
Inc., a warehouse management
software company based in
Greenville. He said his Upstate
clients expect the expansion
will bring about 10% to 20% in
additional goods through their
doors.
Industrial growth in the Upstate has been so rapid that it
is visibly changing the landscape and the economy.
In downtown Greenville,
higher-end residential and retail development—a Brooks
Brothers clothing shop opened
on Main Street in 2013—is
forcing out some longtime residents. Across Greenville and
Spartanburg counties, residents say traffic congestion
has never been worse.
The Upstate’s main roads
are lined with razed fields
where warehouse structures
rise in various states of construction.
Conservationists say the region’s natural landscape in the
foothills of the Blue Ridge
Mountains—which draws outdoor enthusiasts and an especially large number of professional and amateur cyclists—is
under threat as housing and
industrial construction push
further out from the cities and
transportation corridors.
“The Upstate needs to balance this development with
protecting valuable green
spaces and water quality,” said
Andrea Cooper, director of Upstate Forever, an environmental advocacy group.
pect to add from the projects,
citing competitive reasons.
Noble, which has prioritized
tiebacks over some shale development, nearly doubled its
Gulf output in the first quarter
and has another offshore well
starting to pump later this
summer. Anadarko has more
than 30 tieback well prospects
in satellite fields, and will drill
up to seven this year, according to Bob Gwin, chief financial officer.
Tieback wells are drilled in
fields not large enough to justify the hefty expense of
building new giant floating installations in the Gulf. Some
tieback wells are profitable
when oil trades as low as $25
to $30 a barrel, and many
more can make money
when crude is between $30
and $40 a barrel, according to
analysts at Wood Mackenzie, a
consulting firm in Houston.
Constructing the massive
offshore oil platforms that bob
in thousands of feet of water
and suck crude up from beneath the ocean floor can take
nearly a decade and billions of
dollars. Once built, “you might
as well make the most of it”
by maximizing the oil each
platform pumps and processes, said Terry Yen, an ana-
ultra-deep waters southwest
of New Orleans, which
will start up next year, by using a slim-well design offshore
engineers borrowed from onshore shale operations.
Chevron recently executed a
tieback to its Tahiti platform 190 miles south of New
Orleans using a technique that
allowed it to tap two oil reservoirs stacked on top on each
other, resulting in a well that
will produce 50% more oil and
gas than originally thought,
the company said in a recent
earnings call.
Gulf production has also
grown thanks to the ingenuity
of smaller players such
as LLOG Exploration Co., a private deep-water driller based
in Covington, La.
It pioneered a platformbuilding process that it can
bring new projects online in
half the time it takes bigger rivals, said Gordon Loy, a researcher at Wood Mackenzie.
Oil producers are
getting better
at accessing
deep-water finds.
lyst with the U.S. Energy Information Administration.
Deep-water drilling costs
have fallen and will continue
to drop as long-term contracts
on rigs expire, according to
IHS Petrodata.
Companies are also getting
better at accessing deep-water
finds. Shell saved $1 billion
drilling its Stones project in
TECHNOLOGY
@wsjd | wsjd.com
Driverless
Cars Spur
Questions
On Ethics
Handset Slump Stings BlackBerry
Google HaiIs
Promise of
Virtual Reality
CEO John Chen with a Priv phone in Manila last year. BlackBerry’s revenue fell in the latest quarter.
company’s hardware business
profitable, while emphasizing
its mobile software tools.
To bolster its software
business, the company has acquired a string of mobile security firms over the past year
and released software updates
aimed at email, mobile security and crisis communications
in the cloud.
BlackBerry said more than
3,300 new and existing clients
Thursday afternoon.
Hurdles remain in BlackBerry’s handset operations,
where its offerings have fallen
behind competitors Apple Inc.
and Samsung Electronics Co.
Analysts say the company’s
Android-equipped Priv phone,
a high-end phone that incorporates BlackBerry’s mobile
security features alongside
consumer-friendly apps available on Google’s app library,
BY AMY DOCKSER MARCUS
Would you buy a car that
might decide to kill you?
It is a question social-science
researchers are exploring amid
the development of driverless
cars. While commercial applications may be years away, any
fully autonomous vehicle that
eventually takes to the road will
need to make decisions—like
whether to swerve to miss one
pedestrian at the risk of hitting
another.
Many ethicists argue that a
public conversation should be
part of the development process.
In a study published in Science, researchers found people
want the cars to be programmed
to minimize casualties while on
the road. But when asked about
what kind of vehicle they might
actually purchase, they chose a
car that would protect the passengers first.
The paper describes a series
of online surveys that posited
various scenarios.
In one, participants were
asked to imagine that they are
in a self-driving vehicle traveling
at the speed limit. Out of nowhere, 10 pedestrians appear in
the direct path of the car.
Should engineers program the
car to swerve off the road, killing the passenger but leaving
the 10 pedestrians unharmed, or
keep going, killing the 10 people?
Social Media Is Viewed as Office Break
BY LINDSAY GELLMAN
KAREN BLEIER/AGENCE FRANCE-PRESSE/GETTY IMAGES
BY MIKE SHIELDS
Google is betting big on virtual reality.
The emerging technology is
on center stage at the Alphabet Inc. unit’s bustling beachfront pavilion at the Cannes Lions advertising festival this
week. And Google is making it
clear that it believes that no
platform has more virtual reality content than YouTube.
But how many people even
know what virtual reality is—
let alone that it is available on
YouTube or that Google makes
a product called Google Cardboard that lets people watch
VR videos using their mobile
phones?
“The people who have used
or even know about VR at this
point is a rounding error,” said
Clay Bavor, Google’s vice president of virtual reality. “It’s approximately zero percent of
the world.”
Mr. Bavor said he often has
to remind his team that outside of Google and the media
industry, virtual reality is very
much an unknown. Indeed, virtual reality is an early stage of
its evolution, but Google executives argue that broader access on smartphones could encourage mass adoption.
The technology allows a
person wearing a customized
device over their eyes to see
images that appear real. For
example, a person wearing a
VR device can feel as if they
are in a street in Paris or
flying a spaceship—without
leaving their home.
Media companies and advertisers are exploring how
they can take advantage of the
more realistic video experience. Marketers like auto
maker BMW AG, which is making ad content in VR where a
person can don a Google cardboard device and “see” and
“feel” what it is like to race
other cars on an open field,
are trying to get a jump on
consumer adoption.
At an event at Cannes on
Wednesday, Google released
its first ranking of YouTube’s
360-degree ads, which collectively have generated 20 million views on YouTube. (These
videos can be watched with or
without a VR headset.)
The BMW brand is atop the
list, which also includes
McDonald’s, Oreo and Hyundai.
Google has already distributed five million Google Cardboard devices. And manufacturers
like
Samsung
Electronics Co. and HTC Corp.
are pushing forward in the
emerging market—as is of
course, Facebook Inc. with its
Oculus device.
Still, the medium could use
a push. Google believes that
could come this fall with the
launch of Daydream, a new
software platform designed for
virtual reality that will be built
into Android devices.
signed up for software offerings in the quarter. About 74%
of the company’s software revenue in its recent quarter was
recurring, it added. “We’re
very pleased with the momentum,” said Mr. Chen during a
conference call Thursday. “Our
software business continues to
achieve scale and traction.”
Shares in BlackBerry shares
were up 3.5% at $6.97 on the
Nasdaq Stock Market on
hasn’t been a hit.
And while BlackBerry hasn’t
released Priv sales, Mr. Chen
said that at $700, the device
was too expensive for its customer base. A lower-cost Android-equipped device is expected to be launched later
this year, he said.
The company sold about
500,000 handset devices in the
latest quarter at an average
selling price of $290, BlackBerry Chief Financial Officer
James Yersh said on the call.
Handset sales are down
from 600,000 devices sold in
the fourth quarter and
700,000 in the third quarter of
fiscal 2016. At the company’s
annual meeting earlier this
week, Mr. Chen said BlackBerry’s top objective for the
year is to ensure the mobiledevice business is profitable.
Adjusted to exclude items,
however, BlackBerry had a
small loss of $1 million, or
break-even on a per-share basis. That was better than the
eight-cent loss analysts polled
by Thomson Reuters expected.
He said Thursday that the
business segment should become profitable by the third
quarter of the current fiscal
year. BlackBerry had an overall
net loss of $670 million, or
$1.28 a share, in its fiscal
quarter ended May 31.
Workers often visit networks.
CHINA
Continued from page B1
and paste it and expect it to
work,” said Edward Tse, chief
executive of global strategy
consulting firm Gao Feng Advisory Co.
But Microsoft’s deal to buy
LinkedIn might create a hitch
for the social network in
China. “LinkedIn could somehow be hampered by that relationship,” said Travis Wu, a
vice president at Forrester Research in Beijing who previously worked at Microsoft. “It
was seen as independent, but
now it’s part of a big machine
and if the machine has issues
with the government it could
affect them.”
A Microsoft spokesman reiterated what the company
said in its statement announcing the LinkedIn acquisition:
“LinkedIn will retain its distinct brand, culture and independence,” in all geographies,
including China.
LinkedIn declined to comment about how the acquisition would affect the company’s operations in China.
Microsoft’s
deal
for
LinkedIn comes as the Chinese
government cracks down on
Business
Watch
A new Pew Research Center
survey on the use of social
networks during the workday
confirms what you probably
already knew: People visit
Facebook and Twitter to take
a mental break from work.
Pew’s survey of about 2,000
U.S. adults found that employees take work time to like,
retweet and endorse for a variety of reasons, only some of
them job-related.
Employees log on to social
media from the office for personal and professional reasons
and many in between, the survey found. The most common
reason, cited by 34% of respondents, is taking a “mental
break” from the job, according
to the survey.
Others included connecting
with family and friends (27%),
making professional connections (24%) or gathering workrelated information (20%), the
survey said.
Perhaps
unsurprisingly,
plenty of workers said social
media can get in the way of
their jobs.
Among those who use social media for work-related
tasks, 56% said it distracts
them from work they need to
do, according to the survey.
Workers learn about their
colleagues on social platforms
like LinkedIn, and often don’t
like what they find. Some 29%
of workers ages 18 to 29 came
across information online that
lowered their opinion of a colleague, as did 16% of workers
30 to 49 and 6% of workers 50
to 64, the survey said.
It found that 23% of workers 18 to 29, 12% of those ages
30 to 49 and 9% of those ages
50 to 64 said they discovered
something online that improved their opinion of a coworker.
Employees also appear to
be shrugging off corporate attempts to govern employees’
use of social media.
content provided by foreign
companies that have expanded
in China during the past few
years, such as Apple Inc. and
Walt Disney Co. China wants
to prop up its own homegrown
technology outfits, a move
that has already hurt companies like Microsoft.
“If you give a Chinese competitor a window to say, ‘Look
at this foreign company,
they’re not following the
rules,’ they’re going to be
called out,” said Ben Cavender,
principal of China Market Research Group in Shanghai.
China is LinkedIn’s fastestgrowing market. Company cofounder Reid Hoffman has
made frequent trips to the
country to seek favor with the
government and potential users. Many of those trips have
involved events at which Mr.
Hoffman and other tech executives share success stories
with Chinese entrepreneurs.
LinkedIn has become a goto site in China for attracting
talent from overseas or finding Chinese employees with
global experience. Last year it
launched a local adaptation of
was approached for her current job through the careernetworking site. “There’s no
international networking on
Chinese job boards,” she said.
Professional networking websites such as Dajie and Renhe
offer forums within China.
“There are more opportunities
on LinkedIn to find a global
company,” she added.
Still, LinkedIn China faces
tough local competition. The
user base of the company’s
Chitu app is still short of its
full potential, said Mr. Wu of
Forrester Research.
LinkedIn hasn’t disclosed
the number of users on the
Chitu platform. “It’s still early
days, but we are very encouraged by the momentum we
see,” Mr. Shen said.
Part of the problem Chitu
faces is that China’s younger
demographic uses social-media apps such as Tencent
Holdings Ltd.’s WeChat for
personal and professional conversations. While WeChat users can import their LinkedIn
contacts, it is much easier for
them to scan a person’s QR
code or create a group chat
within the WeChat app, instead of connecting via a separate platform, analysts say.
—Lilian Lin
Microsoft’s deal to buy LinkedIn might
disrupt the social network in China.
To that end, LinkedIn
China, which now has about
200 employees in Beijing and
Shanghai, decided after arriving in the country in 2014 to
globally restrict sensitive content coming from China. It revised that policy in September
2014 so that information
deemed sensitive was blocked
only to users inside of China.
Censorship is done by
LinkedIn employees and algorithms that trawl the site for
sensitive content, a person familiar with the matter said.
LinkedIn, called Chitu or “Red
Rabbit.” The platform is aimed
at China’s younger workers.
“Ultimately, our goal is to
help create economic opportunities for millions of Chinese
professionals,” LinkedIn China
President Derek Shen said.
Isabella Chen, greater China
manager for wine trader Les
Grands Chais de France,
checks her LinkedIn app daily
to read wine news and updates
posted by her 81 connections.
The 27-year-old former publicrelations manager said she
1.1 million FCA vehicles in April.
That recall came after drivers
complained that they couldn’t tell
if the transmission was in “park”
after stopping. Maserati says it is
doing the recall even though it
has no complaints of cars rolling
away unexpectedly.
—Associated Press
FIAT CHRYSLER
More Cars Recalled
After Actor’s Death
Fiat Chrysler Automobiles NV
is adding 13,000 Maseratis to a
recall of vehicles with confusing
gear shifters like the one in a
sport-utility vehicle that crushed
and killed “Star Trek” actor Anton
Yelchin.
The company says it is adding
2014 and 2015 Quattroporte and
Ghibli sedans to the recall under
pressure from the National Highway Traffic Safety Administration
in the U.S.
The cars have the same gear
shifters that caused the recall of
ACCENTURE
Consultancy Hopeful
After Profit Rises
Accenture PLC posted revenue
and profit increases and raised its
outlook as the consultancy
pushes into new segments.
Dublin-based Accenture has
been shifting its business to digital, cloud and security services
through acquisitions. The consultancy said those segments accounted for 40% of revenue.
For the year, Accenture now
expects to earn an adjusted $5.29
to $5.33 a share, up from its previous forecast of $5.21 to $5.32.
Most people
understand that
sacrificing one to
save 10 makes sense.
In that scenario, 76% of the
182 participants said the moral
thing for the car to do was sacrifice the passenger rather than
kill the 10.
Most people, researchers say,
intuitively understand that,
when viewed through the lens of
the greatest good, sacrificing
one to save 10 makes sense. But
as researchers continued with
their surveys, eventually involving over 1,900 people in total,
they identified what they call a
“social dilemma.”
Researchers asked participants which car they would prefer to actually purchase, one
programmed to put a heavier
premium on saving more lives,
or one that might sacrifice them
or family members in the name
of the greater good.
In that case, participants
“preferred the self-protective
model for themselves,” the researchers wrote.
“Just as we work through the
technical challenges, we need to
work through the psychological
barriers,” said Iyad Rahwan, associate professor of media arts
and the sciences at the MIT Media Lab at the Massachusetts Institute of Technology and one of
the authors of the paper.
Karl Iagnemma, CEO and cofounder of nuTonomy, a
Cambridge, Mass.-based company developing software for
fully autonomous cars, says ethical questions like the ones
raised in the Science paper are
important to consider. But cars
don’t have the technology to
distinguish “a baby stroller from
a grandmother from a healthy
21-year-old.”
CHRIS RATCLIFFE/BLOOMBERG NEWS
BlackBerry Ltd.’s plan to
expand its mobile software
and services operations helped
the smartphone maker beat
earnings expectations in its
latest quarter, but a slump in
handset sales continued to
drag revenue lower.
The Waterloo, Ontariobased company has been focusing on mobile-device software and services for
governments and businesses
to drive growth after falling
behind in the consumer smartphone market.
Sales from BlackBerry’s
software and services operations generated $166 million in
the fiscal first quarter, up
from $153 million in the previous quarter. BlackBerry, which
surpassed its goal of $500 million in software and services
sales in its most recent fiscal
year, expects the segment to
generate 30% revenue growth
in the current fiscal year.
Still, a continued decline in
handset sales weighed on
overall revenue, which fell to
$400 million for the quarter
ended May 31 and missed both
analyst and company expectations. Since Chief Executive
John Chen took the helm of
BlackBerry in November 2013,
he has focused on making the
SEONGJOON CHO/BLOOMBERG NEWS
BY DAVID GEORGE-COSH
Tesco plans to sell its coffee chain Harris + Toole to Caffe Nero.
The company also expects revenue to increase at a currency-adjusted rate of 9.5% to 10.5%, up
from 8% to 10% previously.
Over all for its fiscal third
quarter ended May 31, Accenture
reported a profit of $897.2 million,
or $1.41 a share, up from $793.7
million, or $1.24 cents a share, a
year prior. Revenue increased
8.4% to $8.97 billion.
—Austen Hufford
TESCO
Company to Renew
Focus on Groceries
Tesco PLC on Thursday re-
ported a rise in group same-store
sales for the first three months
of fiscal 2017 and said that it will
sell coffee chain Harris + Hoole to
Caffe Nero Group Ltd., as part of
its plan to put greater focus on
its core U.K. grocery business.
The U.K.’s No. 1 grocer by market share said group like-for-like
sales for the 13 weeks ended
May 28 rose 0.9%, compared with
a 1.3% sales drop reported for the
same period a year earlier.
Same-store sales for the company’s core U.K. division increased
0.3%, compared with a 1.3% yearearlier drop.
“We have delivered a second
quarter of positive like-for-like
sales growth across all parts of
the group in what remains a challenging market with sustained deflation,” Chief Executive Dave
Lewis said.
Tesco didn’t disclose any financial information in relation to the
sale of Harris + Hoole.
—Tapan Panchal
MARKETS DIGEST B6 | HEARD ON THE STREET B8 | FINANCE WATCH B8
Twilio Soars in Debut,
A Good Sign for Tech
Oil-and-Gas Firms Hit
Record on Share Sales
INITIAL PUBLIC OFFERINGS | B7
ENERGY | B8
As of 4 p.m. ET
EUR/GBP 0.7672 g 0.13%
YEN/DLR ¥105.86 À 1.39% GOLD 1261.20 g 0.54%
OIL 50.11 À 1.99%
U.S. Banks Clear Hurdle
In first part of Fed’s
stress tests, all 33
firms pass bar; second
round is next week
BY RYAN TRACY
AND DONNA BORAK
WASHINGTON—The largest
U.S. banks have significantly
bolstered
their
defenses
against a severe downturn
since the financial crisis and
could continue lending even
during a deep recession, the
Federal Reserve said it has
concluded, signaling that
many will win regulators’ approval next week to boost div-
idends to investors.
In the first part of its annual stress tests released
Thursday, the Fed calculated
that 33 of the largest U.S.
banks would have loan losses
of $385 billion under a hypothetical scenario that envisions the U.S. unemployment
rate more than doubling to
10%, the stock market losing
half its value and financial
markets becoming so topsyturvy that short-term U.S.
Treasury rates turn negative
as investors pay the U.S. government to hold their money.
Still, the central bank said
that despite such big losses,
those institutions meet the
Fed’s definition of good
health—even during a severe
recession—due to a steady increase in capital on their
books, an improvement in the
quality of their loans, and a
drop in costs related to crisisera litigation.
Next week, the Fed will release the second part of the
tests, which include regulators’ decisions on whether to
allow—or block—banks’ plans
to return capital to shareholders through dividends or share
buybacks.
Thursday’s results don’t
necessarily predict the Fed’s
verdict next week. In the past,
banks have shown strong capital ratios in the first part of
the tests, only to be deemed as
failing in the second round,
which uses a broader set of
criteria. In the second round,
the Fed judges banks not just
by their balance sheets, but by
how officials assess banks’
risk-management practices.
The stress tests were created during the financial crisis
and helped in 2009 to convince panicky investors that
big banks weren’t on the brink
of collapse. Congress in the
2010 Dodd-Frank financial
overhaul law made annual
stress tests mandatory, and
the Fed has adopted its own
rules tying shareholder dividends to the tests.
The goal is to force banks
Please see STRESS page B8
10-YR TREAS g 16/32 yield 1.741%
3-MONTH LIBOR 0.64010%
Rocky Road
Hong Kong has had some of the biggest IPO deals globally this
year, but they haven't paid off for investors.
Hong Kong IPO volume as a
Share performance of biggest
percentage of new listings, 2016* IPOs in Hong Kong this year
Hong Kong
21.8%
China Zheshang Bank Thursday:
HK$3.78
U.S.
31.3%
March 30:
HK$3.96
TOTAL
$25.4
billion
Denmark
13.9%
–4.5%
BOC Aviation
June 1:
HK$42
Bank of Tianjin
China
19.4%
Change from
IPO price:
U.K.
13.7%
March 30:
HK$7.39
Source: Dealogic *Through June 21
Thursday:
HK$40.35
–3.9%
Thursday:
HK$7.36
–0.4%
Hong Kong’s IPO
Market: Less Hot
Than It Appears
BENJAMIN SHEPPARD/AGENCE FRANCE-PRESSE/GETTY IMAGES
BY ALEC MACFARLANE
Angola’s capital, Luanda, has earned a reputation as one of the world’s most expensive cities for expatriates.
Angola Looks Abroad for Money
LONDON—Angola is tapping
international lenders for
roughly $1 billion of loans, including one for food and medicine, as Africa’s biggest oil
producer tries to cope with
the fall in global crude prices.
Goldman Sachs Group Inc.
is arranging a syndicated loan
that is partly guaranteed by
the World Bank, while London
investment firm Gemcorp Capital LLP is separately providing dollar financing to the
country to import food, medicine and other necessities,
people familiar with the loans
said this week.
The fresh funds signal that
investors are confident Angola
can ride out the oil slump that
took hold two years ago and
come as the country awaits a
potential $4.5 billion from the
International Monetary Fund.
A halving in crude prices has
cut Angola’s government revenue and economic growth in
half, prompting drastic government-spending cuts and
creating a shortage of dollars
BSI Appeals Actions
Of Swiss Regulator
BY JOHN LETZING
ZURICH—BSI SA, a Swiss
bank embroiled in the legal
controversy surrounding Malaysian state investment fund
1Malaysia Development Bhd.,
said on Thursday that it is appealing “flawed” actions taken
against it by Switzerland’s financial regulator.
The Swiss regulator, Finma,
issued a sternly worded statement in May, saying that BSI
had committed “serious”
breaches of money-laundering
regulations in its dealings with
the Malaysian fund, 1MDB, and
had executed a number of
large transactions for the fund
“despite clearly suspicious indications.” Finma ordered BSI
to pay 95 million Swiss francs
($99 million) in profits tied to
its business with 1MDB to
Switzerland’s public coffers.
Finma also said it was
starting enforcement proceedings against two unidentified
former managers at the Lugano-based bank.
On Thursday, BSI said
Finma’s communication about
actions taken against the bank
“has severely harmed the reputation of the bank and its
employees.” BSI added that it
“challenges Finma’s assessment of the facts, and holds
that the measures [Finma] ordered are unlawful and disproportionate.”
BSI said it has lodged its
appeal with the Swiss Federal
Administrative Court. A BSI
spokesman declined to comment further on what remedies the bank is seeking.
A Finma spokesman said
that its decisions can be challenged and are subject to judicial review, and declined to
comment further.
Finma’s action against BSI
in May corresponded with related action taken by authorities in Singapore, which was
the locus of BSI’s business
with 1MDB, as The Wall Street
Journal has previously reported. Singapore’s central
bank revoked BSI’s local banking license and asked prosecuPlease see 1MDB page B7
in the country.
Angola draws nearly all of
its export earnings and 80% of
government revenue from
crude sales. It surpassed Nigeria as the continent’s top oil
producer this year as attacks
by militants on pipelines and
rigs in the Niger Delta cut output there.
The syndicated loan, one
underwritten by a group of
banks, builds upon a commitment the World Bank made a
year ago to support Angola in
overhauling and diversifying
its economy with a $450 mil-
lion loan and a $200 million
guarantee. Goldman Sachs is
structuring the syndicated
loan that will encompass that
$200 million guarantee for a
loan of roughly $500 million
to $600 million, a person familiar with the matter said.
The World Bank said no one
was available on Thursday to
comment.
The Gemcorp facility could
reach hundreds of millions of
dollars in size, depending on
the government’s needs to import specific goods into the
Please see ANGOLA page B7
Hong Kong is on track to
contend as the world’s top initial-public-offering market this
year. But shares in the biggest
IPOs haven’t been doing well,
and bankers are tapping staterun Chinese entities, rather
than global investors, to get
many of the deals done.
Potential investors in two
IPOs that launched this past
week—Citigroup Inc.’s China
securities joint-venture partner, Orient Securities Co., and
the leasing arm of one of
China’s biggest banks—are
asking for the listings to be
priced at the bottom or middle
of their respective offering
ranges, according to people familiar with the situation. They
cite the poor share performance by the swath of similar
midsize Chinese financial
firms that have gone public in
Hong Kong this year.
Orient Securities, which is
already listed in Shanghai, is
conducting a global roadshow
of presentations to investors
for its Hong Kong offering as
it aims to raise as much as
$1.2 billion. The offering will
be the biggest test of investors’ appetite for Chinese brokerage firms since the Shanghai stock market crashed last
summer. The deal could be a
hard sell because many of Orient’s Hong Kong-listed peers
are trading significantly below
their listing prices.
Meanwhile, bankers are already expecting that China
Development Bank Financial
Merrill Admits Missteps With Client Cash
BY ARUNA VISWANATHA
AND JENNY STRASBURG
Bank of America Corp.’s
Merrill Lynch unit will pay
$415 million to resolve accusations from the Securities and
Exchange Commission that it
misused customer cash, the
agency said Thursday.
The brokerage should have
deposited the customer funds
in a reserve account, but instead engaged in complex options trades that artificially reduced the amount it needed to
deposit, freeing up billions of
dollars each week to finance
trading activities, the SEC
said.
Merrill admitted to wrongdoing in the trades, which occurred between 2009 and
2012, the agency said.
“While no customers were
harmed and no losses were incurred, our responsibility is to
protect customer assets and
we have dedicated significant
resources to reviewing and enhancing our processes,” Bank
of America said.
“The issues related to our
procedures and controls have
WALLACE WOON/EUROPEAN PRESSPHOTO AGENCY
BY MARGOT PATRICK
AND PATRICK MCGROARTY
Leasing Co.—which pitched to
investors in Hong Kong on
Thursday and will move on to
other locations—will price its
up to $978 million IPO at the
bottom end of its range. At
that price, the deal would
raise $759 million. Rival aircraft-leasing company BOC
Aviation Ltd. completed a $1.1
billion IPO in May, securing a
roster of high-profile international investors, including
Boeing Co., but is now trading
3.9% below its listing price.
Orient Securities and CDB
Financial Leasing declined to
comment.
Hong Kong is getting closer
to becoming the world’s top
market for IPOs again, but the
market isn’t as healthy as it
looks. Initial offerings there
have raised $5.5 billion this
year as of Tuesday, second
only to the U.S. with $8 billion, according to Dealogic.
But just five financial-services
companies account for $4.1
billion of Hong Kong’s total,
and all of those financial
stocks are trading below their
listing prices and have underperformed Hong Kong’s Hang
Seng Index.
“Investors are looking for
growth,” said William Ma,
chief investment officer at
Shanghai-based wealth manager Noah Holdings Ltd.
“That’s why when banks and
many financial-sector [companies] list, they don’t attract
enough attention.”
Many of China’s fastestgrowing technology companies
Please see IPOS page B7
Bank of America will pay $415 million to resolve SEC accusations.
It said the settlement won’t affect second-quarter results.
been corrected,” it said.
The bank, which said it cooperated fully with Securities
and Exchange Commission
staff in the investigation, said
the settlement will have no effect on second-quarter results.
The SEC also sued the
firm’s head of regulatory reporting, William Tirrell, in
connection with the case.
Mr. Tirrell is disputing the
charges.
Steven M. Witzel, of law
firm Fried, Frank, Harris,
Shriver & Jacobson LLP, said
that while Mr. Tirrell is disappointed by the lawsuit filed by
the SEC, the 35-year securities-industry veteran “looks
forward to the opportunity to
vindicate himself at trial.”
Merrill Lynch also separately agreed to pay a $10 million penalty to resolve an SEC
case accusing it of misleading
customers on structured notes.
It also paid an additional $5
million to settle a similar case
from the Financial Industry
Regulatory Authority, the Wall
Street regulator said Thursday.
The settlement and investigation, previously reported by
The Wall Street Journal, concerned so-called Rule 15c3-3,
part of the Securities Exchange
Act of 1934, designed to ensure that banks and trading
firms safeguard customer assets by setting aside enough
cash so that if the firms fail,
they can readily pay back what
they owe customers.
The Charlotte, N.C.-based
bank’s Merrill Lynch unit violated the rule by making billions of dollars of loans to finance “riskless trades that
lacked defined terms and economic substance,” the SEC
said.
The Journal previously described some of the trades at
issue in an April 2015 story
disclosing the investigation.
MARKETS DIGEST
Nikkei 225 Index
STOXX 600 Index
S&P 500 Index
Year-to-date
16238.35 s 172.63, or 1.07%
t 14.69%
52-wk high/low20841.97 14952.61
High, low, open and close for each
trading day of the past three months. All-time high 38915.87 12/29/89
346.34 s 5.02, or 1.47%
trading day of the past three months.
Data as of 4 p.m. New York time
Last
2113.32 s 27.87, or 1.34%
trading day of the past three months.
Year-to-date
t 5.32%
52-wk high/low 406.80 303.58
All-time high
414.06 4/15/15
Year ago
Trailing P/E ratio * 23.85 21.73
P/E estimate *
17.87 17.90
Dividend yield
2.19
1.98
All-time high: 2130.82, 05/21/15
* P/E data based on as-reported earnings from Birinyi Associates Inc.
Session high
UP
Close
t
DOWN
Session open
65-day moving average
Open
t
Close
Session low
18000
360
2160
17500
350
2120
17000
340
2080
16500
330
2040
16000
320
15500
2000
310
1960
Bars measure the point change from session's open
15000
Mar.
Apr.
May
300
June
Apr.
International Stock Indexes
Latest
NetChg
World
The Global Dow
MSCI EAFE
MSCI EM USD
2385.06
1689.59
838.15
36.02
28.11
8.82
1.53
1.69
1.06
2033.03
1471.88
691.21
% chg
Low
Americas
Brazil
Canada
Mexico
Chile
DJ Americas
Sao Paulo Bovespa
S&P/TSX Comp
IPC All-Share
Santiago IPSA
509.39
7.18
51672.51 1516.21
14129.97 126.16
46117.59 311.43
3134.72 22.20
1.43
3.02
0.90
0.68
0.71
433.38
37046.07
11531.22
39256.58
2730.24
U.S.
DJIA
Nasdaq Composite
S&P 500
CBOE Volatility
18011.07 230.24
4910.04 76.72
2113.32 27.87
17.64 –3.53 –16.67
1.29
1.59
1.34
15370.33
4209.76
1810.10
10.88
Stoxx Europe 600
Stoxx Europe 50
Austria
ATX
Belgium
Bel-20
France
CAC 40
Germany
DAX
Greece
ATG
Hungary
BUX
Israel
Tel Aviv
Italy
FTSE MIB
Netherlands AEX
Poland
WIG
Russia
RTS Index
Spain
IBEX 35
Sweden
SX All Share
Switzerland Swiss Market
South Africa Johannesburg All Share
Turkey
BIST 100
U.K.
FTSE 100
346.34
2901.24
2242.11
3498.04
4465.90
10257.03
617.69
26924.09
1432.64
17966.17
449.86
46826.85
941.11
8885.30
482.41
8023.05
53585.53
77989.87
6338.10
5.02
38.58
28.34
45.21
85.87
185.97
6.06
134.74
–0.94
642.90
8.61
630.11
13.82
183.30
3.11
50.91
28.33
722.41
76.91
1.47
1.35
1.28
1.31
1.96
1.85
0.99
0.50
303.58
2556.96
1929.73
3117.61
3892.46
8699.29
420.82
20452.90
1383.34
15773.00
378.53
41747.01
607.14
7746.30
432.78
7425.05
45975.78
68230.47
5499.51
Asia-Pacific
Australia
China
Hong Kong
India
Japan
Singapore
South Korea
Taiwan
1374.77
5280.70
2891.96
20868.34
27002.22
16238.35
2793.85
1986.71
8676.68
5.04
9.80
–13.59
73.22
236.57
172.63
7.72
–5.87
–39.57
EMEA
DJ Asia-Pacific TSM
S&P/ASX 200
Shanghai Composite
Hang Seng
S&P BSE Sensex
Nikkei Stock Avg
Straits Times
Kospi
Weighted
–0.07
3.71
1.95
1.36
1.49
2.11
0.65
0.64
0.05
0.93
1.23
1188.42
4765.30
2655.66
18319.58
22951.83
14952.61
2532.70
1829.81
7410.34
0.37
0.19
–0.47
0.35
0.88
1.07
0.28
–0.29
–0.45
52-Week Range
Close
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Coupon
•
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519.17 4.5
54977.70 19.2
14957.24 8.6
46545.32 7.3
3243.62 6.5
18167.63 3.4
5231.94 –1.9
2132.82 3.4
53.29 –3.1
406.80 –5.3
3541.18 –6.4
2567.85 –6.5
3867.21 –5.5
5217.80 –3.7
11802.37 –4.5
805.67 –2.2
27477.51 12.6
1728.89 –6.3
24157.39 –16.1
506.05 1.8
54449.16 0.8
968.03 24.3
11612.60 –6.9
543.12 –4.5
9537.90 –9.0
54760.91 5.7
86931.34 8.7
6869.04 1.5
Commodities
Europe
10
WSJ Dollar index
s
5
s Yen
0
–5
s Euro
–10
2015
2016
US$vs,
YTDchg
Thu
in US$ per US$ (%)
Country/currency
Americas
Argentina peso-a
0.0702 14.2420 10.1
Brazil real
0.2986 3.3491 –15.4
Canada dollar
0.7836 1.2762 –7.8
Chile peso
0.001492 670.30 –5.4
Colombia peso
0.0003438 2908.53 –8.4
Ecuador US dollar-f
1
1 unch
Mexico peso-a
0.0546 18.3245 6.5
Peru sol
0.3043 3.2858 –3.8
Uruguay peso-e
0.0327 30.590 2.3
Venezuela bolivar 0.100100
9.99 58.4
Asia-Pacific
0.7585 1.3184 –3.9
0.1520 6.5778 1.3
Australia dollar
China yuan
Key Rates
Country/currency
Hong Kong dollar
India rupee
Indonesia rupiah
Japan yen
Kazakhstan tenge
Macau pataca
Malaysia ringgit-c
New Zealand dollar
Pakistan rupee
Philippines peso
Singapore dollar
South Korea won
Sri Lanka rupee
Taiwan dollar
Thailand baht
Cur Stock
0.45330%
0.64010
0.92890
1.24975
0.18600%
0.28200
0.44705
0.77425
Euro Libor
One month
Three month
Six month
One year
-0.35857%
-0.28786
-0.16600
-0.03643
-0.08000%
-0.01500
0.05643
0.16929
-0.35800%
-0.26900
-0.16100
-0.02900
-0.06600%
-0.01500
0.04900
0.16200
-0.06543%
-0.02500
-0.00350
0.08729
Offer
0.05929%
0.09571
0.13929
0.25400
Bid
0.5000%
0.6500
1.0000
1.3000
Latest
0.4000%
0.5500
0.9000
1.2000
52 wks ago
3.50%
2.70
1.475
5.00
3.25%
2.85
1.475
5.00
0.00%
0.50
0.50
1.75
1.00
0.25
2.25
0.05%
0.50
0.50
2.00
0.75
0.00
2.00
Overnight repurchase rates
U.S.
0.59%
Euro zone
n.a.
0.17%
n.a.
Eurodollars
One month
Three month
Six month
One year
Prime rates
U.S.
Canada
Japan
Hong Kong
Policy rates
ECB
Britain
Switzerland
Australia
U.S. discount
Fed-funds target
Call money
7.7578 0.1
67.3062 1.7
13119 –5.2
105.86 –12.0
334.90 –1.1
7.9984 –0.1
3.9814 –7.5
1.3829 –5.5
104.803 –0.1
46.488 –0.8
1.3401 –5.5
1143.62 –2.7
147.10 2.0
31.985 –2.8
35.140 –2.5
52 wks ago
Libor
One month
Three month
Six month
One year
Yen Libor
One month
Three month
Six month
One year
0.1289
0.0149
0.0000762
0.009446
0.002986
0.1250
0.2512
0.7231
0.0095
0.0215
0.7462
0.0008744
0.0067981
0.03126
0.02846
Bulgaria lev
0.5813 1.7202 –4.4
Croatia kuna
0.1510 6.621 –5.6
Euro zone euro
1.1361 0.8802 –4.4
Czech Rep. koruna-b 0.0420 23.834 –4.2
Denmark krone
0.1526 6.5516 –4.7
Hungary forint
0.003612 276.88 –4.7
Iceland krona
0.008254 121.15 –6.9
Norway krone
0.1223 8.1757 –7.5
Poland zloty
0.2598 3.8486 –1.9
Russia ruble-d
0.01558 64.194 –10.7
Sweden krona
0.1223 8.1739 –3.2
Switzerland franc
1.0443 0.9576 –4.4
Turkey lira
0.3501 2.8564 –2.1
Ukraine hryvnia
0.0403 24.8240 3.5
U.K. pound
1.4811 0.6752 –0.5
2.6517
0.1125
0.2614
3.3228
2.5973
0.2747
0.2666
0.0693
1.749
2.257
-0.481
0.330
-0.440
0.458
-0.551
0.097
-0.021
1.315
-0.236
-0.140
-0.534
0.190
0.446
3.087
-0.005
1.473
-0.567
0.583
0.526
1.375
0.774
1.739
97.5
51.8
-125.5
-140.9
-121.4
-128.1
-132.5
-164.2
-79.4
-42.4
-100.9
-187.9
-130.8
-154.9
-32.8
134.8
-77.9
-26.6
-134.1
-115.6
-24.8
-36.4
...
...
Spread Over Treasurys, in basis points
Previous
Month Ago
Year ago
74.4
46.5
-138.6
-142.2
-130.1
-131.5
-139.6
-165.7
-93.4
-34.2
-113.8
-193.5
-141.1
-156.8
-67.2
124.3
-99.7
-24.5
-134.1
-105.1
-44.5
-38.4
...
...
97.8
54.3
-124.9
-139.3
-119.8
-126.9
-133.7
-162.4
-76.4
-32.9
-98.9
-183.1
-127.4
-153.0
-27.9
145.0
-74.8
-16.8
-132.3
-110.5
-25.7
-37.2
...
...
Previous
Yield
Month ago
1.728
2.230
-0.499
0.294
-0.448
0.418
-0.587
0.063
-0.014
1.359
-0.239
-0.144
-0.524
0.157
0.472
3.137
0.002
1.519
-0.573
0.582
0.493
1.315
0.750
1.687
1.645
2.301
-0.485
0.414
-0.400
0.521
-0.495
0.179
-0.033
1.494
-0.237
-0.099
-0.510
0.268
0.229
3.079
-0.096
1.591
-0.440
0.785
0.456
1.452
0.901
1.836
137.6
66.6
-80.1
-115.2
-80.7
-118.1
-85.8
-153.3
-40.8
-27.5
-67.3
-194.1
-84.6
-130.9
-63.7
32.8
-41.0
-31.4
-96.2
-134.9
9.5
-28.4
...
...
392.50
1102.75
466.25
113.825
3,177
142.90
19.33
65.48
1722.00
-5.75
-14.00
-6.00
2.200
21
3.20
0.16
0.95
14.00
2.1605
1264.50
17.430
1,634.00
17,175.00
4,700.00
1,718.00
2,057.00
9,265.00
157.20
0.0245
-5.50
0.063
unch.
225.00
103.00
12.00
52.00
25.00
1.60
2382.00
50.04
1.5309
1.6082
2.739
51.51
454.75
8.00
0.91
0.0156
0.0134
0.015
0.91
4.75
CBOT
CBOT
CBOT
CME
ICE-US
ICE-US
ICE-US
ICE-US
ICE-EU
COMEX
COMEX
COMEX
LME
LME
LME
LME
LME
LME
TCE
Sources: WSJ Market Data Group, SIX
Financial Information, Tullett
Sym
Last
AIAGroup
AstellasPharma
AustNZBk
BHP
BankofChina
CKHutchison
CNOOC
Canon
CentralJapanRwy
ChinaConstructnBk
ChinaLifeInsurance
ChinaMobile
CmwlthBkAust
EastJapanRailway
Fanuc
Hitachi
Hon Hai Precisn
HondaMotor
HyundaiMtr
Ind&Comml
JapanTobacco
KDDI
Mitsubishi
MitsuUFJFin
Mitsui
Mizuho Fin
NTTDoCoMo
NatAustBnk
NipponStl&SmtmoMtl
NipponTeleg
NissanMotor
NomuraHldgs
Panasonic
PetroChina
PingAnInsofChina
RelianceIndsGDR
RioTinto
SamsungElectronics
Seven&I Hldgs
SoftBankGroup
Sumitomo Mitsui
SunHngKaiPrp
TaiwanSemiMfg
1299
4503
ANZ
BHP
3988
0001
0883
7751
9022
0939
2628
0941
CBA
9020
6954
6501
2317
7267
005380
1398
2914
9433
8058
8306
8031
8411
9437
NAB
5401
9432
7201
8604
6752
0857
2318
RIGD
RIO
005930
3382
9984
8316
0016
2330
46.20
1613.00
24.44
19.05
3.06
91.65
9.67
3128.00
18340
4.98
16.98
86.95
75.02
9407.00
16605
484.00
82.90
2765.50
141000
4.45
4226.00
3093.00
1851.50
514.00
1259.00
163.50
2714.00
25.58
2088.50
4586.00
1027.00
427.80
956.50
5.42
34.60
29.20
45.80
1430000
4482.00
6076.00
3254.00
88.95
164.00
1.54
-0.83
0.16
1.82
-0.33
0.99
-0.62
0.94
0.88
0.20
0.83
0.35
-0.07
0.41
3.78
3.66
1.72
2.52
0.71
1.60
0.21
-2.00
3.18
2.68
1.74
2.06
-0.29
-0.16
5.45
0.79
1.99
2.44
3.07
0.37
0.44
1.39
2.74
-1.04
0.38
1.37
1.91
-0.06
-1.20
2.052
3.075
-0.126
1.257
-0.131
1.228
-0.182
0.876
0.268
2.134
0.003
0.468
-0.170
1.100
0.039
2.736
0.266
2.095
-0.287
1.060
0.771
2.125
0.676
2.409
3:30 p.m. New York time
-1.44%
-1.25
-1.27
1.97%
0.67
2.29
0.83
1.47
0.82
1.15
-0.43
0.36
unch.
1.33
2.24
0.70
2.59
0.27
1.03
0.34
1.85
1.03
0.84
0.55
1.80
1.06
Year
low
444.00
1,186.25
533.75
125.350
3,241
146.85
20.22
66.64
1,748.00
355.75
868.00
460.00
109.575
2,745
117.15
12.92
54.19
1,400.00
2.3295
1,318.90
18.070
1,675.00
17,500.00
5,070.50
1,888.00
2,082.00
9,575.00
165.00
1.9690
1,065.70
13.930
1,451.50
13,225.00
4,320.50
1,598.00
1,467.00
7,750.00
147.20
2,707.00
52.28
1.5876
1.6591
2.8270
53.30
472.50
2,351.00
32.22
0.9643
1.1366
2.0090
31.33
285.50
Cross rates
0.3771 0.003
8.8878 13.5
3.8249 –1.7
0.3010 –0.8
0.3850 0.02
3.641 –0.1
3.7503 –0.1
14.4306 –6.8
Australia
USD
1.3184
GBP
1.9527
CHF
1.3767
JPY
0.0125
HKD
0.1700
EUR
1.4978
Canada
1.2762
1.8900
1.3328
0.0121
0.1645
Euro
0.8802
1.3036
0.9195
0.0083
0.1135
Hong Kong
7.7578
11.4885
8.1012
0.0733
CDN
1.0332
AUD
...
1.4496
...
0.9679
...
0.6898
0.6676
...
8.8124
6.0790
5.8835
80.2900
105.8640
156.7500
110.5500
...
13.6460
120.2500
82.9500
Switzerland
0.9576
1.4179
...
0.0090
0.1234
1.0876
0.7503
0.7264
U.K.
0.6752
...
0.7053
0.0064
0.0870
0.7672
0.5291
0.5121
U.S.
...
1.4811
1.0443
0.0094
0.1289
1.1361
0.7836
0.7585
Japan
85.25 –0.21 –0.25 –5.46
London close on Jun 23
Source: Tullett Prebon
Sources: Tullett Prebon, WSJ Market Data Group
4 p.m. New York time
% YTD%
Chg Chg
Asia Titans
HK$
¥
AU$
AU$
HK$
HK$
HK$
¥
¥
HK$
HK$
HK$
AU$
¥
¥
¥
TW$
¥
KRW
HK$
¥
¥
¥
¥
¥
¥
¥
AU$
¥
¥
¥
¥
¥
HK$
HK$
$
AU$
KRW
¥
¥
¥
HK$
TW$
Year ago
Sources: SIX Financial Information; WSJ Market Data Group
Close Net Chg % Chg YTD % Chg
WSJ Dollar Index
Latest
Palm oil (MYR/mt) MDEX
NYMEX
Crude oil ($/bbl.)
NY Harbor ULSD ($/gal.) NYMEX
RBOB gasoline ($/gal.) NYMEX
Natural gas ($/mmBtu) NYMEX
Brent crude ($/bbl.) ICE-EU
ICE-EU
Gas oil ($/ton)
Middle East/Africa
Bahrain dinar
Egypt pound-a
Israel shekel
Kuwait dinar
Oman sul rial
Qatar rial
Saudi Arabia riyal
South Africa rand
June
Top Stock Listings
Latest
Euribor
One month
Three month
Six month
One year
US$vs,
YTDchg
Thu
in US$ per US$ (%)
May
Prices of futures contracts with the most open interest
Copper ($/lb.)
Gold ($/troy oz.)
Silver ($/troy oz.)
Aluminum ($/mt)*
Tin ($/mt)*
Copper ($/mt)*
Lead ($/mt)*
Zinc ($/mt)*
Nickel ($/mt)*
Rubber (Y.01/ton)
US$vs,
YTDchg
Thu
in US$ per US$ (%)
Country/currency
15%
Yield
Corn (cents/bu.)
Soybeans (cents/bu.)
Wheat (cents/bu.)
Live cattle (cents/lb.)
Cocoa ($/ton)
Coffee (cents/lb.)
Sugar (cents/lb.)
Cotton (cents/lb.)
Robusta coffee ($/ton)
London close on June 23
Yen, euro vs. dollar; dollar vs. major U.S. trading partners
Apr.
EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; ICE-US: ICE Futures U.S.; MDEX: Bursa Malaysia
Derivatives Berhad; TCE: Tokyo Commodity Exchange; COMEX: Commodity Exchange; LME: London Metal Exchange;
NYMEX: New York Mercantile Exchange; ICE-EU: ICE Futures Europe. *Data as of 6/22/2016
Year
One-Day Change
Commodity
Exchange Last price
Net
Percentage
high
Source: SIX Financial Information;WSJ Market Data Group
Currencies
Country/
Maturity, in years
3.250
Australia 2
4.250
10
3.500
Belgium 2
0.800
10
1.000
France 2
0.500
10
0.000
Germany 2
0.500
10
4.500
Italy 2
2.000
10
0.100
Japan 2
0.100
10
0.500 Netherlands 2
0.250
10
4.350
Portugal 2
2.875
10
4.500
Spain 2
1.950
10
4.250
Sweden 2
1.000
10
1.250
U.K. 2
2.000
10
0.625
U.S. 2
1.625
10
1553.77 –1.1
5706.70 –0.3
4527.78 –18.3
27145.75 –4.8
28504.93 3.4
20841.97 –14.7
3373.48 –3.1
2107.33 1.3
9476.34 4.1
•
Mar.
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 3 p.m. ET
YTD
% chg
2588.48 2.1
1956.39 –1.6
1044.05 5.5
•
•
•
•
•
•
•
•
•
High
1920
June
Global government bonds
Data as of 4 p.m. New York time
Close
Region/Country Index
May
-0.86
-6.84
-12.50
6.66
-11.56
-12.21
19.83
-14.88
-15.09
-6.21
-32.35
-0.63
-12.29
-17.84
-21.23
-30.01
2.60
-29.27
-5.37
-4.91
-5.48
-1.93
-8.70
-32.11
-12.90
-32.85
9.26
-15.30
-13.56
-5.17
-19.73
-37.00
-22.89
6.48
-19.35
-4.58
2.44
13.49
-19.24
-1.03
-29.35
-5.12
14.69
Cur Stock
Sym
Last
¥
HK$
¥
¥
AU$
AU$
AU$
TakedaPharm
TencentHoldings
TokioMarineHldg
ToyotaMtr
Wesfarmers
WestpacBanking
Woolworths
4502
0700
8766
7203
WES
WBC
WOW
4446.00
176.10
3559.00
5737.00
40.80
29.65
20.85
CHF
€
€
€
€
£
€
€
£
€
€
£
€
£
£
CHF
CHF
€
€
€
£
€
£
£
€
£
€
€
£
€
£
CHF
CHF
DKK
£
£
ABB
AXA
AirLiquide
Allianz
Anheuser Busch
AstraZeneca
BASF
BNP Paribas
BT Group
BancoBilVizAr
BancoSantander
Barclays
Bayer
BP
BritishAmTob
FinRichemont
CreditSuisse
Daimler
Deutsche Bank
DeutscheTelekom
Diageo
ENI
GlaxoSmithKline
HSBC Hldgs
INGGroep
ImperialBrands
IntesaSanpaolo
LVMHMoetHennessy
LloydsBankingGroup
LOreal
NationalGrid
Nestle
Novartis
NovoNordiskB
Prudential
ReckittBenckiser
% YTD%
Chg Chg Cur Stock
0.77
-0.56
1.77
2.32
1.14
-0.07
-0.71
-26.69
15.32
-24.47
-23.38
-1.95
-11.65
-14.90
0.54
2.89
1.56
2.39
-0.26
0.30
1.91
2.88
2.10
2.74
4.30
2.72
1.45
0.93
0.49
0.75
1.95
1.68
3.22
2.52
-0.52
3.26
0.67
2.35
3.68
1.31
4.93
1.30
2.27
1.28
-0.44
0.91
0.13
0.14
2.76
0.53
14.87
-14.74
-7.20
-13.48
-0.26
-15.55
1.63
-8.67
-6.78
-13.39
-7.33
-14.60
-19.54
9.31
13.38
-16.57
-39.19
-22.67
-30.90
-10.29
-1.27
5.65
4.08
-15.25
-11.85
2.55
-26.88
-0.21
-1.26
9.88
4.48
-2.95
-11.35
-12.93
-11.27
8.95
Stoxx 50
ABBN
CS
AI
ALV
ABI
AZN
BAS
BNP
BT.A
BBVA
SAN
BARC
BAYN
BP.
BATS
CFR
CSGN
DAI
DBK
DTE
DGE
ENI
GSK
HSBA
INGA
IMB
ISP
MC
LLOY
OR
NG.
NESN
NOVN
NOVO-B
PRU
RB.
20.63
21.51
96.19
141.50
114.10
3898.50
71.87
47.70
439.70
5.78
4.22
186.95
93.17
386.95
4275.50
60.15
13.06
59.99
15.56
14.82
1833.00
14.58
1429.00
454.45
10.97
3678.00
2.26
144.60
72.15
170.65
979.50
72.35
76.95
348.20
1358.50
6843.00
£
CHF
£
€
€
€
€
€
€
CHF
€
£
£
CHF
RioTinto
RocheHldgctf
RoyDtchShell A
SAP
Sanofi
SchneiderElectric
Siemens
Telefonica
Total
UBSGroup
Unilever
Unilever
VodafoneGroup
ZurichInsurance
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
AmericanExpress
Apple
Boeing
Caterpillar
Chevron
CiscoSystems
CocaCola
Disney
DuPont
ExxonMobil
GenElec
GoldmanSachs
HomeDepot
Intel
IBM
JPMorganChase
JohnsJohns
McDonalds
Merck
Microsoft
NikeClB
Pfizer
Procter&Gamble
3M
TravelersCos
UnitedTech
UnitedHealthGroup
VISAClA
Verizon
WalMart
% YTD%
Chg Chg
Sym
Last
RIO
ROG
RDSA
SAP
SAN
SU
SIE
TEF
FP
UBSG
UNA
ULVR
VOD
ZURN
2090.00
246.50
1852.00
71.11
72.00
58.39
97.76
9.22
43.69
15.31
40.79
3186.50
217.90
240.70
1.09
5.58
0.08 -10.82
2.29 21.36
1.46 -3.09
1.17 -8.40
1.78 11.09
1.73
8.77
2.86 -9.94
1.53
8.00
1.73 -21.57
1.09
1.71
0.87
8.88
0.67 -1.40
1.30 -6.85
63.27
96.04
133.55
78.22
104.43
29.22
45.08
99.02
69.20
91.80
31.19
152.74
128.27
32.99
155.27
64.04
117.38
121.15
57.65
51.91
54.14
34.59
84.20
174.08
113.84
102.29
139.15
78.23
54.65
72.08
2.13 -9.03
0.51 -8.76
1.35 -7.64
2.34 15.10
2.09 16.08
1.74
7.60
0.49
4.93
0.23 -5.77
1.66
3.90
0.69 17.77
1.33
0.13
3.11 -15.25
0.53 -3.01
2.17 -4.24
1.54 12.83
2.12 -3.01
0.79 14.27
0.44
2.55
1.07
9.14
1.80 -6.43
-0.79 -13.38
0.35
7.16
0.75
6.03
1.66 15.56
1.80
0.87
0.93
6.47
0.91 18.28
2.22
0.88
1.15 18.24
0.46 17.59
DJIA
AXP
AAPL
BA
CAT
CVX
CSCO
KO
DIS
DD
XOM
GE
GS
HD
INTC
IBM
JPM
JNJ
MCD
MRK
MSFT
NKE
PFE
PG
MMM
TRV
UTX
UNH
V
VZ
WMT
Asia Titans 50
Last: 131.12 s 0.73, or 0.56%
High
Close
Low
25
YTD t 3.8%
150
140
130
120
110
100
50–day
moving average
t
1
8
Apr.
15
22
29
6
May
13
20
27
3
10
June
17
Stoxx 50
Last: 2901.24 s 38.58, or 1.35%
YTD t 6.4%
3000
2900
2800
2700
2600
2500
24 1
8
Apr.
15
22
29
6
May
13
20
27
3
10
June
17
Dow Jones Industrial Average
P/E: 19
Last: 18011.07 s 230.24, or 1.29%
YTD s 3.4%
18500
18000
17500
17000
16500
16000
24
1
8
Apr.
15
22
29
6
May
13
20
Note: Price-to-earnings ratios are for trailing 12 months
Sources: WSJ Market Data Group; Birinyi Associates
27
3
10
June
17
MONEY & INVESTING
Share Prices Leap as U.K. Votes
U.S. and European stocks
rallied Thursday as the U.K.
voted in its historic referendum to decide whether the
country should leave the European Union.
In the U.S., the Dow Jones
Industrial Average rose 230.24
points, or 1.3%, to 18011.07. The
S&P 500 gained 1.3%, and the
Nasdaq Composite added 1.6%.
Financial
THURSDAY’S markets had
MARKETS
followed the
vote closely,
with sterling,
government bonds and stocks
around the world moving as
opinion polls have shifted.
While recent polls had suggested a tight race, the betting
markets had been more confident the “Remain” campaign
would win. Thursday’s broad
market rally, portfolio managers said, seemed to be a sign
that investors increasingly
placed their trust in bookmakers to price in “Brexit” odds.
“From the polls, it’d appear
to be a coin toss. But the market has clearly embraced the
bettors,” said Ronald Sanchez,
chief investment officer of Fiduciary Trust Co. International.
Financial stocks in the S&P
500—the worst-performing
sector this year—jumped 1.7%
MIKE SEGAR/REUTERS
BY RIVA GOLD
AND AKANE OTANI
Barnes & Noble reported a wider fourth-quarter loss but gave an upbeat outlook for the year.
by late afternoon in New York,
leading gains in the index.
European stocks surged,
with many indexes posting
their fifth consecutive session
of gains. The Stoxx Europe 600
climbed 1.5%, London’s FTSE
100 gained 1.2%, and major indexes in Germany, France and
Spain each rose roughly 2%.
Risk assets such as stocks
and oil typically gained when
polls suggested the U.K. would
stay, while haven assets had
been favored as polls tilted to
“Leave.” Traders and investors
have described the market as
being held captive to Brexit in
recent weeks.
With the vote over, the market “will find another subject
to worry about,” said Thomas
Wilson, managing director of
wealth advisory at Brinker
Capital in the U.S., such as
when the Federal Reserve will
raise interest rates.
Investors could also return
to focusing on corporate earnings, which have declined for
four consecutive quarters compared with the year-earlier period, according to FactSet.
In currencies, the dollar
gained 1% against the yen to
¥105.8340 on Thursday, while
the euro gained 0.2% against
the dollar to $1.1353. The British pound fluctuated, trading
near unchanged against the
dollar at $1.4810.
The yield on the 10-year
Twilio Soars in Its Debut 1MDB
BY CORRIE DRIEBUSCH
Twilio Inc. shares surged in
their trading debut, an optimistic sign for other companies considering going public
during a sluggish U.S. market
for initial public offerings.
The San Francisco-based
technology company’s shares
rose 95% to $29.31 in late afternoon trading Thursday in
New York, after the offering
was priced above expectations
at $15 a share late Wednesday.
The stock opened at $23.99.
Twilio—pronounced TWIL-eeoh—said it raised $150 million
by selling 10 million shares;
the company had targeted a
range of $12 to $14 a share.
At $29.31 a share, Twilio
has a market value of $2.4 billion, well above where it was
valued in its previous financing round at about $1 billion,
or $11.31 a share.
Twilio, which enables developers to build applications
that can interact with customers, whether it is messaging,
video or voice, counts as customers Uber Technologies Inc.
and HubSpot Inc., among oth-
ers. Its platform, for instance,
allows Uber passengers to call
or text their drivers by connecting the company’s mobile
app to the phone network.
The offering comes during a
tough patch for younger, private technology companies.
Some of their valuations in
private fundraising rounds
have fallen in recent months
and the amount raised in U.S.
IPOs is on track for its worst
year since the financial crisis.
The U.S. tech firm’s
strong opening is a
good sign for other
firms hoping to list.
In recent years, many tech
companies have steered clear
of the public markets, in part
because they were able to easily raise money at high valuations in private fundraising
rounds, an environment that
analysts and investors have
said could be changing.
Indeed, mutual funds that
hold shares of private compa-
nies have marked down some
of these holdings. As an example, T. Rowe Price marked
down many of its investments
in private technology companies, including Uber Technologies, in the first quarter.
If and when these companies turn to the public markets, investors may value their
companies at a lower level
than in prior financing rounds,
analysts and investors warn.
Some analysts and money
managers looking at the
Twilio IPO questioned how
much the company can grow.
Last year, one customer,
WhatsApp Inc., accounted for
17% of Twilio’s revenue, according to a regulatory filing.
Concerning some analysts is
that according to the filing,
WhatsApp “has no obligation
to provide any notice” to
Twilio if they choose to stop
using Twilio’s services entirely. The result is that a flow
of cash accounting for 17% of
revenue could drop to zero
without advance notice.
Twilio trades on the New
York Stock Exchange under the
symbol TWLO.
tors to investigate some of the
bank’s senior employees.
BSI—which is being acquired
by EFG International, a Zurichbased bank— said later that its
Singapore subsidiary continues
to operate normally, adding
that its license would only be
pulled in the future as BSI is
absorbed by EFG International.
Finma’s action also came
alongside an announcement
from Switzerland’s Office of
the Attorney General that it
was opening criminal proceedings against BSI. The attorney
general’s office said its decision was based on evidence it
had gathered as part of its investigation of 1MDB, and on
issues raised by Finma.
Investigators are gathering
evidence about 1MDB in at
least seven countries. Some
investigators believe as much
as $6 billion was siphoned
from 1MDB, much of it funneled through BSI in Singapore, according to court records, documents viewed by
The Wall Street Journal and
people familiar with the
probes, the Journal has reported. 1MDB was established
several years ago by Malaysian
ANGOLA
country, people familiar with
that loan said.
Businesses and the government alike have struggled to
find dollars for imports this
year. One U.S. dollar on the
black market costs as much as
600 Angolan kwanza, compared
with an official rate of 166 to
the greenback. Following a twoweek visit to the country, an
IMF official said last week that
the government has taken important steps in cutting spending but needs to adjust its currency and contain inflation that
is running at a rate of 29%.
Angola’s economy rode a
yearslong rise in oil prices to
become an ostentatious symbol
of Africa’s increasing wealth.
Its Atlantic Coast capital, Luanda, has earned a reputation
as one of the world’s most expensive cities for expatriates,
with $400-a-night hotels and
$200-a-plate beachside bistros.
Angolan President José Eduardo dos Santos, in power
since 1979, cultivated close
ties with Beijing, trading
nearly a million barrels of
crude each day for Chinesebuilt apartment blocks, railroads and highways across the
tropical country.
Borrowings from Chinese
banks helped double the government’s external debt from
2010 to 2014 to $19.5 billion,
according to a filing last year
for the country’s first international bond.
It has also taken out loans
from several European banks
and private lenders, including
Luminar Finance Ltd., a Swissrun company incorporated in
the British Virgin Islands, and
Gemcorp, a direct lender to
emerging-market governments
and companies, the filing
showed.
A spokesman for the Angolan Finance Ministry didn’t respond to requests for comment on the new loans.
Angolan Finance Minister Armando Manuel told The Wall
Street Journal in March that
debt levels were manageable.
In 2015, the government reduced spending by a third. In
the March interview, Mr. Manuel said further cuts would be
made to its budget this year. In
January, the government eliminated a popular fuel subsidy.
Stuart Culverhouse, an
economist with Exotix, a London-based frontier fund and
advisory firm, said Angola bolstered its reputation with international investors by taking
steps to address the effects of
the oil shock.
“To their credit, the authorities have seen a big macro adjustment since the oil price
began to fall in 2014 and have
devalued the kwanza, tightened monetary policy and
tightened fiscal policy as
well,” Mr. Culverhouse said.
U.S. Treasury note jumped to
1.741% from 1.687% Wednesday,
as prices declined.
Elsewhere, Barnes & Noble
on Wednesday reported that
its losses widened in the
fourth quarter on pressure
from store closures and lower
online sales. Still, the book
seller gave an upbeat outlook
for profitability in the current
year. Its shares jumped 8.3%
by late afternoon Thursday.
In commodities, U.S. crude
oil jumped 2% to $50.11 a barrel. Gold, which analysts have
said was being used as a hedge
against Brexit, dropped 0.5% to
$1,261.20 an ounce.
Many oil specialists largely
stayed out of the market or
minimized positions ahead of
the vote, brokers and traders
said. That relatively low volume let momentum from the
dollar and other technical
moves have an exaggerated
impact, they added.
“The quietness was allowed
to push the market,” said Ric
Navy, senior vice president for
energy futures at brokerage
R.J. O’Brien & Associates LLC.
Oil has nearly doubled in
price since late February.
Japan’s Nikkei Stock Average added 1.1% in quiet trade
as investors prepared for the
U.K. vote, while Hong Kong’s
Hang Seng rose 0.4%. The
Shanghai Composite Index,
however, lost 0.5%.
Prime Minister Najib Razak to
spur economic development.
Mr. Najib has denied
wrongdoing or taking money
for personal gain. He has said
money he received was a legitimate donation from Saudi
Arabia and that most of it was
returned. Malaysia’s attorney
general agreed the money
came from Saudi Arabia legally and that most of the
money was returned, and
cleared Mr. Najib of wrongdoing. 1MDB has denied wrongdoing and said it is cooperating with investigations in
Malaysia and abroad.
Finma has said that BSI
failed to adequately monitor
its relationships with clients
who had ties to 1MDB and
maintained about 100 accounts at the bank.
BSI said on Thursday that
all of its client relationships
related to 1MDB were closed in
early 2015. Since the fall of
2013, the bank said, it had
been “in continuous and transparent contact with Finma relating to…1MDB and related
matters.”
“BSI acknowledges certain
internal shortcomings in the
past,” the bank said. “Where
deficiencies have been recognized, BSI has taken, and continues to take corrective measures.”
Japan’s Pension Sues Toshiba
JOHN PHILLIPS/GETTY IMAGES
BY ELEANOR WARNOCK
Jeff Lawson, shown at a conference last year, is co-founder and CEO of Twilio, which just went public.
IPOS
have preferred to raise money
from private investors rather
than go public. For example,
Didi Chuxing Technology Co.,
China’s privately held $28 billion homegrown competitor to
ride-hailing company Uber
Technologies Inc., raised $7.3
billion earlier this month from
investors and banks without
going public.
While global investors haven’t gotten excited about
IPOs in Hong Kong, many of
the deals are still getting done
thanks to support from domestic Chinese cornerstone investors.
Some of those big backers
are Chinese government entities with ties to the companies
issuing shares.
Cornerstone investors in
Hong Kong commit to buy IPO
shares at the offering price
and hold them for a period of
usually six months after the
shares start trading. The IPOs
since China’s market turmoil
began in June 2015 show a
higher-than-average amount
given to cornerstone investors.
CDB Financial Leasing, for instance, will sell as much as
90% of shares in its IPO to
cornerstone investors, a record.
Bankers and investors say
the growing share of Hong
Kong IPO deals going to big
Chinese investors has tarnished the city’s reputation as
a gateway for Chinese firms to
raise money from global investors.
Brokerage firms such as
Orient Securities, China’s
tenth-largest securities company by assets, were at the
heart of China’s bull run in the
first half of 2015, benefiting
from lofty trading volumes
that they helped fuel by being
a large source of debt-backed
trading, adding to demand for
shares of brokerage firms. Orient listed in Shanghai in
March 2015, and the offering
was more than 90 times oversubscribed.
Other local brokers have
been planning multibillion-dollar Hong Kong IPOs for a
while, although some have
scaled back their ambitions.
China Merchants Securities
Co. has cut the $4 billion to $5
billion expected size of its
coming listing by more than
half, The Wall Street Journal
reported.
China’s financial-services
sector is set to continue as the
driving force for the Hong
Kong market this year, with a
$7 billion Chinese bank IPO
that could be the world’s largest. Postal Savings Bank of
China Corp. is planning to file
its listing application with the
stock exchange before the end
of this month for an offering
expected by October, according to people familiar with the
situation.
TOKYO—Japan’s $1.3 trillion public pension fund said
Thursday that it has sued embattled Toshiba Corp. for
nearly $10 million in damages
after an accounting scandal
that pushed down the electronics company’s share price.
The Government Pension
Investment Fund, the world’s
largest of its kind, is believed
to be the first institutional investor in Japan to sue Toshiba
over its $2.1 billion accounting
scandal. Fifty individual shareholders filed suit together in
December.
A GPIF spokesman confirmed that a lawsuit filed by
one of its asset managers
against Toshiba in May was
made on behalf of the fund. A
representative for the asset
manager, the Japan Trustee
Services Bank Ltd., said that
it pursues lawsuits on behalf
of investors whose money it
manages but declined to comment further. The first hearing
was held Tuesday.
Toshiba CEO Satoshi Tsunakawa declined to comment
Advertisement
Bye-Bye Bonds
Japan’s public pension reserve fund has increased equity holdings in
recent years.
100%
Foreign bonds
Domestic bonds
50
Short-term assets
Foreign stocks
Domestic stocks
0
2012
2013
2014
2015
Source: Government Pension Investment Fund
on the lawsuit, saying, “we
will wait and see the developments” of legal claims against
the company.
The Toshiba scandal unfolded last year as Prime Minister Shinzo Abe pushed companies to increase their
transparency and accountability in a bid to attract more
foreign investment.
Mr. Abe’s government has
urged investors to work to improve medium- and long-termreturns for clients and pensioners.
Toshiba’s stock has plummeted since it said in September that it had overstated
earnings by ¥224.8 billion
($2.15 billion) over seven
years, one of the biggest accounting scandals in Japan in
recent years.
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FINANCIAL ANALYSIS & COMMENTARY
WSJ.com/Heard
U.S. Stock Market Sends Inflation Signal
The message from the
bond market this quarter has
been that U.S. inflation isn’t a
threat. But the stock market
is sending a different message.
This time, it may be the
stock market that turns out
to be right.
Bond-market investors
came into the second quarter
with low expectations for
how much inflation there will
be in the years to come. Now,
if anything, they expect even
less of it. Expectations embedded in Treasury inflationprotected securities suggest
inflation will average just
1.44% over the next 10 years
versus a forecast of 1.62% at
the end of the first quarter.
The stock market tells a
different story. The big gainers of the quarter were energy and basic materials, two
sectors that benefit from rising prices. Investors are saying energy stocks, up 11%,
and basic materials, up 7%,
will be able to hold on to
Expecting Less
Expectations embedded in
Treasury inflation-protected
securities
Inflation over
next 10 years:
1.44%
3%
2
1
0
2010 ’11
’12
’13
’14
’15
’16
Sources: Treasury Deparment; Associated
Press (photo)
The Fed’s Eccles Building in
Washington
their price increases. In contrast, the dividend-paying
utilities and telecommunications sectors, which can be
proxies for fixed income,
have basically treaded water
this quarter. That is a shift
from the first quarter, when
investors hankering for yield
in a low-rate environment
sent the two sectors sharply
higher.
The market signal seems
to be that stock investors believe that oil and raw-materials prices will continue to
pick up—something that often coincides with rising inflation. And investors’ reluctance to chase dividendpaying stocks higher suggests
they are coming to doubt
whether Treasury yields can
remain so persistently low.
The less exuberant bond
market often predicts the future better than stocks. When
the bond market was showing worries in mid-2007,
stocks were blithely unaware
of the crisis that was brewing.
But the case for a meaningful pickup in inflation is
growing. Besides rising commodity prices, a weaker dollar will take a lid off inflation. The dollar is now about
even against the euro from a
year ago, and against the yen
it is down. So the downward
pressure that imports have
been putting on inflation
should ease.
A tightening labor market
has begun putting upward
pressure on wages. The median hourly wage was up an
average of 3.5% in the three
months ending in May from a
year earlier, for the strongest
gain since early 2009, according to the Federal Re-
serve Bank of Atlanta. With
productivity low, partly because investment in technology has been soft in recent
years, companies’ labor costs
are rising—some portion of
which they will probably pass
along to consumers in the
form of higher prices.
If inflation does pick up,
even if it moves above the
Fed’s target rate of 2%, the
central bank may do little to
step in its way. That is because Fed officials see less
risk in letting the economy
heat up a bit too much than
tightening policy and potentially causing another downturn. So bond investors may
come to demand more compensation against higher inflation, sending long-term
Treasury prices down and
yields up.
A rising inflation environment could create challenges
for stocks, too, but they
would probably be in a much
better place than bonds.
—Justin Lahart
OVERHEARD
Central banks: guardians of
inflation, titans of markets…and tourist destinations?
From July 2, the European
Central Bank will open the
doors of its new building on
the first Saturday of every
month for guided tours. In a
fresh take on central-bank
transparency, visitors will get
a “breathtaking view” of
Frankfurt from the 27th floor
of the tower, the ECB says.
The Bank of England has a
museum. And the ECB has already played host to an unexpected guest. In April 2015, a
protester disrupted the central bank’s monetary-policy
news conference, showering
President Mario Draghi with
confetti.
The ECB and Frankfurt
can’t quite match the London
Eye or the Empire State
Building. But it is still good to
see central banks, often
viewed as secretive and aloof,
opening up at least a little.
Why the Amazon Threat to Tesco Is Real Can a 33-Year Veteran Save Macy’s?
Order groceries for dinner
during your lunch break at
the office. That is the foodshopping dream peddled by
Amazon.com, which
launched comprehensive
same-day grocery deliveries
in certain London postal
codes this month.
It is a nightmare scenario
for Britain’s established grocers. But the near-term risk
is less that the U.S. tech giant eats their dinner than
that it raises the bar for
what consumers expect,
making it even harder to run
a profitable online operation.
Tesco is most exposed,
having 36% of Britain’s online market, according to
brokerage house Bernstein.
Chief Executive Dave
Lewis’s e-commerce strategy
has mainly focused on making the sprawling business
he inherited in 2014 pay.
Home deliveries worth less
than £40 (about $59) now
incur a surcharge, up from
£25. Clothing and homegoods websites have been
consolidated. Having chased
growth by opening new
stores for many years, with
disastrous consequences,
Britain’s largest retailer is
wary of chasing growth online.
Yet online sales are still
less profitable than they
used to be. Competition with
rivals like Ocado and WalMart’s Asda has pushed
down the price of delivery,
now as little as £1 at Tesco.
Mr. Lewis said Thursday
that Tesco, which makes
about 7% of its sales online,
had seen no Amazon impact.
That is hardly surprising
given the novelty, geographi-
cal limitations and cost—an
extra £6.99 a month for
Prime customers—of Amazon’s latest offer. Indeed,
Tesco’s first-quarter sales
were strong by recent standards, up 0.3% like-for-like.
But Tesco is also trying
out same-day delivery in
London. Much as it might
want to, the market leader
has limited scope to stand
back from the competitive
fray. It will have to match
Amazon’s service innovations just as it has matched
the German discounters’
prices.
With prices falling by almost 3% a year, it is already
hard to make a decent profit
in U.K. grocery. Keeping up
with Amazon’s logistics and
marketing savvy will only
make it harder.
—Stephen Wilmot
Macy’s is getting a change
at the top. But it would be a
stretch to call it fresh blood.
The department store’s
chief executive, Terry Lundgren, will step down next
year after 14 years, ceding
the role to President Jeff
Gennette, a 33-year company
veteran. Shares rose on the
announcement.
Macy’s, which reported its
worst quarterly sales since
the recession in May, is facing mounting competition
from Amazon.com, as well
as from discounters such as
TJX Cos. The question is
whether Mr. Gennette, who
started there in 1983, can
make the changes needed to
return Macy’s to health.
There is some evidence he
can, or at least will try. Mr.
Gennette has overseen
Macy’s successful website
No Miracle on 34th St.
Macy's same-store sales, change
from a year earlier
5.0%
2.5
0
–2.5
–5.0
FY 2012 ’13
’14
’15
’16
Note: Fiscal years end in January.
Source: FactSet
since 2012, according to J.P.
Morgan, and Thursday’s announcement made it seem
like change would begin
quickly.
One necessary move is to
reduce the store count. Under Mr. Lundgren, Macy’s
store count rose to about
870 from 394 department
stores and 61 specialty
stores. This is now a burden.
Macy’s already is closing
about 40 stores. That almost
certainly doesn’t go far
enough.
Boosting store productivity and figuring out the right
formula for Backstage,
Macy’s fledgling off-price
concept, also should be priorities, analysts say.
Macy’s is hardly alone in
its predicament. The first
quarter brought bad news
for most apparel retailers.
But some companies, including Macy’s supplier Ralph
Lauren, have reacted by
bringing in outsiders with
proven retail-turnaround
track records.
For investors, Macy’s new
CEO still must prove just
how big a change his appointment represents.
—Miriam Gottfried
MONEY & INVESTING
Energy-Stock Sales Reach a Record
BY RYAN DEZEMBER
$20 billion
North American oil-and-gas
company follow-on share sales
this year, a record
SPENCER PLATT/GETTY IMAGES
Stock sales by two North
American oil-and-gas producers vaulted the sums raised by
such deals this year to record
levels, while further cementing the southwestern Permian
Basin as the U.S. oil patch’s
hottest region.
Denver-based driller QEP
Resources Inc. and Canada’s
Birchcliff Energy Ltd. announced offerings late Tuesday that brought to more than
$20 billion the total in North
American oil-and-gas company
share sales this year. That figure tops the record of roughly
$19 billion raised in follow-on
stock offerings—in which already-public companies sell
new shares—for oil-and-gas
producers for all of last year,
according to a Wall Street
Journal analysis of Dealogic
data.
The share-sale activity,
coming with a rebound in oil
prices, shows stock investors’
faith that crude prices won’t
falter again. Also, many of the
companies selling shares lately
are using the cash to acquire
land, a growth move that for
investors blunts the sting of
adding more shares.
Along with QEP’s $367 million share sale, the company
disclosed it is buying about
9,400 acres of Permian Basin
drilling property in West
Texas for about $600 million.
Analysts said QEP’s Permian acquisition represents one
of the highest, if not the highest, price paid for such assets,
and suggested the company
may be overpaying to boost its
holdings there.
Tudor, Pickering, Holt &
Co., the Houston investment
bank, put the price per acre
between $55,000 and $60,000,
“establishing a new high watermark in the basin,” where it
said many recent deals have
been in the $30,000-an-acre
range. The price leaves “little
upside for shareholders,” the
bank said.
Analysts with Piper Jaffray
& Co.’s energy arm, Simmons
& Co. International, shared
similar sentiment: “The transaction does screen expensive.”
Finance
Watch
Firms say drilling in the Permian Basin can be profitable even at low oil prices. A pump jack in Texas.
QEP didn’t respond to requests for comment. Chuck
Stanley, the company’s chairman and chief executive, said
in a statement the acquisition
“broadens our footprint in a
world-class crude oil basin”
and will boost QEP’s oil production growth and operating
efficiency. QEP’s shares fell
5.9%, to $18.19, on Wednesday,
slightly below the offering
price.
A Permian focus for energy
companies has appealed to investors, even with the roughly
50% drop in oil prices over the
past two years.
Companies have said drilling can be profitable there
even at low commodity prices
because stacked layers of energy-bearing rock beneath the
surface allow for large enough
volumes of oil and gas to come
from each well. Of the dozen
independent U.S. energy production companies whose
shares have gained value over
the 12 months ended Wednesday, seven operate primarily in
the Permian.
Meanwhile, in another sign
of renewed expectations of
shareholder enthusiasm for
oil, Centennial Resources Development Inc., which drills
on 42,500 Permian acres in
West Texas, said in a regulatory filing late Wednesday
that it plans an initial public
offering. No oil producer has
debuted on a major U.S. stock
exchange since June 2014, according to Dealogic.
The share-sale boom for energy producers accelerated
last year, when these companies were dealing with the
sharp fall in oil prices. They
mainly sold stock to boost
their cash holdings and pay
down debt. Buyers of some
deals found themselves on the
losing end as share prices fell.
Two companies, Emerald
Oil Inc. and Goodrich Petroleum Corp., that sold new
stock in 2015 have filed for
bankruptcy protection this
year, likely wiping out shareholders.
This year, as oil prices have
recovered—up 33% in 2016—
stock offerings have been used
to help pay for acquisitions.
Birchcliff sold more than $500
million of stock this week as it
agreed to buy drilling fields in
northwest Alberta from Encana Corp. On Wednesday,
Birchcliff’s shares fell 5.6%, to
6.42 Canadian dollars ($5.01),
slightly higher than the offer
price.
This month, Pioneer Natural Resources Inc. and Antero
Resources Corp., among the
largest U.S. producers of oil
and gas, respectively, both
sold large issues of stock to
improve holdings in some
drilling areas. Pioneer sold
about $827 million of shares
to add to its Permian Basin
holdings, its primary operating area. Antero sold $762 million of stock to add land in
West Virginia portions of the
Marcellus and Utica shales.
The largest stock offering
this year from a North American energy producer, accounting for more than 10% of the
year’s total proceeds, came
from Suncor Energy Inc.,
which used some of the proceeds from its $2.2 billion offering on June 7 to bolster its
stake in a big Canadian oilsands venture called the Syncrude project.
Crude for August delivery
fell 72 cents, or 1.4%, to $49.13
a barrel on the New York Mercantile Exchange on Wednesday. Though oil prices have
come down since hitting a
2016 high this month, they are
still up 87% from a 52-week
low reached in February.
DEUTSCHE BANK
Lender Details Cuts
Planned for Germany
Deutsche Bank AG unveiled
details about plans to reorganize
its German retail- and commercial-banking operations that include shedding jobs and closing
branches.
The overhaul is part of the
Strategy 2020 plans Deutsche
Bank announced last year. The
lender said it has reached an accord with labor representatives
over the scope of most of the
job cuts. Under the plans,
Deutsche Bank will cut nearly
3,000 full-time jobs in Germany
by 2018, 2,500 of them in the
private- and commercial-clients
division. Talks with labor representatives are under way over
some 500 other jobs.
The bank will also shrink its
German branch network. The
lender plans to downsize to 535
larger branches in Germany, a
reduction of 188 branches, or
26%, from the current total. In
the course of 2017, it will open
seven bigger advisory centers,
with staff available outside regular banking hours.
Under the plans, Deutsche
Bank will also invest €750 million ($847 million) by 2020 to
STRESS
to manage their finances in a
way that they would still be
able to keep lending during
the worst economic conditions, and to diminish the risk
of big bank failures. The stress
tests are just one of a number
of new drills that regulators
have been running with banks
in an effort to prevent a new
crisis. Banks also face new requirements to hold high levels
of liquidity as well as capital,
to try to prevent a short-term
cash crunch. And they have to
file annual “living wills” which
show how—if all of those
improve its digital offerings.
—Ulrike Dauer
POLAND
Government Looks
At Banks to Buy
Poland’s government is looking at two banks that may be
available for sale in the country
and might encourage financial
companies it controls to buy
them, the country’s Treasury
minister said.
Austrian cooperative lender
Raiffeisen Bank International
AG said last year it was looking
to sell its Polish unit Polbank.
Polish daily Puls Biznesu reported on Thursday that UniCredit SpA, Italy’s largest bank,
is in touch with the Polish government amid a review of its assets. The Italian bank controls
Poland’s second-largest lender,
Bank Pekao SA.
“The Treasury Ministry is
looking at both transactions,
we’re interested,” Dawid Jackiewicz, Poland’s treasury minister,
told reporters. The transactions
would likely take the form of
takeovers by PZU SA, Central
Europe’s largest insurer, or PKO
Bank Polski SA, Poland’s largest
bank by assets, he said.
The Polish government holds
34.19% in PZU and 29.43% in
PKO. It is the controlling shareholder in both companies.
Poland has for years tried to
regain more control over its
banking sector. Some 60% of assets are currently in the hands
of foreign financial groups.
—Martin M. Sobczyk
other defenses collapse and
the banks find themselves on
the brink of bankruptcy—they
could be unwound without an
infusion of taxpayer funds, or
without traumatizing the
broader financial system.
Critics say the Fed programs are overkill, going to
extremes to prevent a crisis
while hampering the economy’s ability to recover from
the last one.
“I think the Fed is trying to
make these entities fail-proof.
I think it’s kind of spilling over
the entire financial community,” Rep. Randy Neugebauer
(R., Texas) told Fed Chairwoman Janet Yellen during a
congressional
hearing
Wednesday.
Can You
Spot the Fake?
MANSION
INSIDE:
Jowls be gone!
The secret
to looking your
best while
FaceTiming
Two relatively
foolproof
ways to whip
up classic
Breton crêpes
W8
W6
|
DRINKING
|
STYLE
|
FASHION
|
DESIGN
|
DECORATING
|
ADVENTURE
|
TRAVEL
|
GEAR
|
GADGETS
Friday - Sunday, June 24 - 26, 2016 | W1
Ritzy Business
Reopening its doors after a long renovation, the historic French hotel
has doubled down on its perfectionist glamour. But can it compete
in the crowded luxury market of tourism-challenged Paris?
PLACE IN HISTORY Above: a view of Louis XIV’s Place Vendôme from the entrance of the newly reopened Ritz Paris. Below: a similar view from inside the hotel taken around 1948.
BY RHONDA GARELICK
P
ARIS’S Place Vendôme is
a splendid plaza of identical
palaces designed in 1702 to
honor Louis XIV. Once homes
to princes and dukes, these
palaces now fly silken awnings like heraldic flags, boasting the names of today’s
royal houses: Dior, Cartier, Chanel. The
most famous awnings, though, belong
not to a grand boutique but to a hotel,
the legendary Ritz Paris, which reopened
two weeks ago.
In 2012, the Ritz’s owner, Mohamed
Al Fayed, announced the unthinkable:
The hotel would shut down for a two-year
renovation. Repeated delays ensued and
two years turned into four, as costs rose to
a reported 400 million euros (about $450
million). The opening itself seemed, if not
doomed, perhaps haunted by the ghosts
of the Paris communards who toppled
Napoleon’s statue on Place Vendôme in
1871, protesting French Imperialism.
The week I arrived in Paris, a few days
before the hotel’s mid-June opening, the
Seine’s floodwaters had risen to cataclysmic
levels. Three months earlier, one of the ho-
tel’s wings caught fire (pushing back a
March reopening). And last year’s terrorist
attacks still cast a pall over the city. But
as I checked into the Ritz later that week,
all that faded from my mind. Sunlight
streamed in through the newly raised and
widened windows, reflected all around by
white marble floors and gilded mirrors.
Why would Mr. Al Fayed close the doors
to the most famous hotel in the world,
depriving its coffers of so much revenue
(room rates here start at about $1,100 a
night) and risking the loss of clientele? The
sheer scope of the project offers a partial
Please turn to page W2
FRANCIS HAMMOND FOR THE WALL STREET JOURNAL (LEFT); GETTY IMAGES (RITZ ENTRANCE, 1948)
EATING
W2 | Friday - Sunday, June 24 - 26, 2016
OFF DUTY
A HOTEL WITH STAYING POWER?
THE RITZ
REVISITED
Tales of woe and wooing at the
most storied address in Paris
Early 1700s Louis
XIV’s architect Jules
Hardouin-Mansart,
who created much
of the Château de
Versailles, oversees
construction of Place
Vendôme in Paris’s
1st arrondissement.
(above) start their
honeymoon at their
beloved Ritz.
COZY LITTLE
CORNERSClockwis
e from above:
Architect Thierry
Despont modeled
the Ritz’s new
garden after the
Palais Royal; the
restored dining
room at L’Espadon
restaurant; the
relocated Coco
Chanel suite.
I later learned was the Ritz’s
own signature perfume called
“Ambre”—as in “preserved in.”
In my suite, filled with golden
fabrics and creamy marble, the
décor was 19th-century but the
technology 21st, albeit deployed
discreetly—and amusingly—in
curiosities like TVs embedded
in antique mirrors and wallmounted electronic dimmers disguised as gilded 19th-century
turnkeys. In the enormous bathroom, I fell for the marble bathtub with a golden faucet shaped
like a swan. Jérémie, the young
man with giant tortoiseshell
glasses who accompanied me to
my room from the front desk,
pointed out the 19th-centurystyle bell cords hanging by the
Nineteenth-century bell
cords hang by the tub,
marked ‘maid’ and ‘valet.’
tub, marked “maid” and “valet,”
for summoning assistance without leaving your bubbles. The
quiet in my suite was palpable;
the only sound I could hear was
the fountain’s gentle gurgle in the
garden below. One real benefit of
old-fashioned luxury, I realized, is
calm. I hadn’t noticed I was tense
until the Ritz’s lull overtook me.
This is, of course, the point.
The hotel prides itself on its mastery of the art of luxury. Staff
often repeated the mantra, “Le
Ritz, c’est le Ritz,” meaning that
the Ritz is so utterly singular
it can only be compared to…itself.
So is that true? Yes, but not just
because of the level of sensuous
pleasures on tap here. The specificity of the Ritz experience lies
in the hotel’s ability to weave
all its comforts into a larger
historical and cultural context—
MIXED RECEPTION
Colin Field, famed barman, back
at work at Bar Hemingway.
1871 The Colonne
Vendôme, built to
honor Napoleon’s
victory at Austerlitz,
is destroyed by the
Paris Commune. (It’s
restored in 1873).
to offer a gift-wrapped “France”
on a velvet cushion.
Joerg Boehler, director of operational development at the
Ritz, told me that all 600 of the
hotel’s employees receive instruction not only on the hotel
but on French history generally.
Scholars are brought in to lecture on topics like the history of
Place Vendôme. “Even a maid
can speak about the history of
this site,” said Mr. Boehler.
Jérémie proved this point in
the hotel corridor, drawing my
attention to floating, Matisse-like
figures painted in gold on the
frosted glass doors of the elevator—motifs taken from battle
scenes of the Napoleonic Wars
depicted on the Colonne
Vendôme (the 1810 monument
outside the hotel’s front door
that has just undergone a major
renovation, financed by Mr.
Al Fayed). These elevator doors,
which took such weighty 19thcentury history and transmuted
it into golden cartoons, felt like
an apt allegory for a stay at today’s Ritz.
As big a draw as the hotel itself is its Bar Hemingway, named
for the habitué who famously,
rifle in hand, “liberated” it from
the Nazis in 1944. (In reality, they
had already fled.) The bar is a
hymn to his macho pursuits: Deer
antlers jut out from the wall and
framed fishing flies decorate the
booths. Photos of Hemingway
line the walls, but for the last
two decades, he’s shared the
limelight with Colin Field, the
English-born, 50-something bartender who compares his mixology to French impressionism:
“Sisley, Seurat and Manet” he
explained, after kissing my hand,
“weren’t just painting a lady on
horseback, they were using their
paint to express something.”
The same, he feels, is true of
cocktails, of which he has invented scores. Mr. Field, coupled
with the author’s iconic status,
has long kept the Bar Hemingway
a hub for Franco-American socializing.
I asked Mr. Field about his
“Chanel cocktail.” A blend of gin,
Lillet and Champagne, served
with a red rose, the drink, he
insisted, evoked “simplicity”—
honoring Coco’s spare aesthetic.
Chanel’s spirit (and lucrative
name) hovers everywhere here
but especially over two places:
the new Chanel spa and the
23,000-euro-a night Chanel Suite,
both maintained by the Chanel
corporation. Coco Chanel owned
her own apartment steps from
Vendôme but she slept nearly
every night, for almost 30 years,
at the Ritz; it made her feel safe
and pampered, she said.
I admit that the prospect of
standing in the rooms where
Mademoiselle had lived and died
gave me a little thrill so I asked
to see them. But my thrill dissipated upon learning that Coco
Chanel had never lived in this
particular suite and that the furniture in it was not original.
Logistical problems had required
relocating the suite and reproducing its contents. I was no longer sure what kind of experience
was being marketed here. Would
sleeping here (if one could afford
it) be less satisfying? Would the
glamour “work” in a simulacrum
of Mademoiselle’s rooms? Coco
herself, who loved seeing knockoffs of her designs, would have
appreciated the irony.
Given how iconic the Ritz is,
and how pervasive in popular
culture, perhaps it could never
avoid becoming “The Ritz”—a
slightly kitschy quotation of itself. The hotel telephone hold
music is a recording of Irving
Berlin’s “Puttin’ on the Ritz.” My
minibar was stocked with “César
Ritz” teddy bears for purchase,
dressed in tiny bellhop uniforms.
At its best, the new Ritz
lights a spark of connection
between guests and some of
France’s richest traditions.
As part of the personalized attention they cultivate, the staff
arrange for unusual Parisian experiences pegged to guests’ interests. A music aficionado, say,
might be sent (for a price) on a
private backstage tour of the
Garnier Opéra house. Sometimes, the connection happens
through wine or food. The new
head sommelier, 35-year-old
Estelle Touzet—formerly of Le
Meurice—excels at this brand
of connecting. Effervescent and
petite, Ms. Touzet is doing a job
normally associated with dour,
older men, and she uses
this to great advantage.
“Sommeliers scare people,” she said. But to Ms.
Touzet, who has curated
a cellar of 50,000 bottles,
“wine is a vector of communication…[that] transmits the stars.”
By later that day, as my taxi
left Place Vendôme, and the
doormen bid me goodbye, waving
their caps in the air (really), the
entire Ritz felt to me like a
dream—a dream of a quasi-mythical, digitally enhanced Paris.
I know very well that this filtered, felted version of France
isn't real, that it turns a certain
slice of culture, from a narrow
window in time, into a commodity—available to very few. But
I still felt buoyed by the experience, becalmed by the luxury.
I had the feeling you get when
exiting a cinema after a matinee,
blinking at the light and still halfliving in the film.
1898 Hotelier César
Ritz (above), former
manager of the London Savoy, acquires,
with partner, chef Auguste Escoffier, No.
15 Place Vendôme
with the intention of
turning it into the
world’s greatest hotel.
1909 Marcel Proust
begins to write much
of his epic “In Search
of Lost Time,” at the
Ritz. On his deathbed, in 1922, Proust
sends his servant out
for a last cold bottle
of his favorite Ritz
beer.
June 1940-1944
The SS requisitions
the Ritz for its officers. The hotel stays
partially open, the
Vendôme side for
German officers, the
Cambon side for
other guests. During
air raids, Ritz employees shepherd guests
to shelters featuring
fur rugs and silk Hermès sleeping bags.
Throughout the war,
the Ritz is a hotbed
of intrigue and “horizontal collaboration.”
Though food is
rationed in the city,
guests enjoy oysters
and caviar.
1950s Hollywood
makes the Ritz a
backdrop for a series
of high-profile films,
including “An American in Paris”, “Love
in the Afternoon”
(above) and “Funny
Face.”
1918 American
socialite Linda
Thomas notices Cole
Porter (above) playing
piano at the Ritz. The
two marry the following year. The Ritz
later makes an appearance in many of
Porter’s song lyrics.
1925 Ernest Hemingway first meets F.
Scott Fitzgerald, who
introduces him to the
Ritz bar. Both become regulars and
the Ritz later appears
in works by both
writers, including
Fitzgerald’s “Babylon
Revisited.”
1926 Noël Coward
writes his play
“Semi-Monde,” originally entitled “The
Ritz Bar.”
1934 Coco Chanel
(above, center) moves
into a suite at the
Ritz.
1934 Nabisco
introduces
“Ritz” crackers. They’re priced
to appeal to Depression-era Americans
but brushed with
coconut oil to look
“rich.” They become
the world’s best-selling crackers.
1937 The Duke and
Duchess of Windsor
1979 Egyptian businessman Mohamed
Al Fayed purchases
the Ritz for around
30 million dollars.
1988 The RitzEscoffier School of
French Gastronomy is
established in honor
of Auguste Escoffier,
the original chef of
the hotel, considered
the founder of haute
cuisine.
1997 After dining in
the Imperial Suite,
Diana, Princess of
Wales and companion, Dodi al-Fayed,
son of the owner,
leave the Ritz in a
limousine driven by
(an inebriated) hotel
employee. All three
die when the car
crashes in the Pont
de l’Alma tunnel.
2006 Long a mainstay of the international fashion industry, the Ritz appears
as a backdrop in the
film “The Devil Wears
Prada” (above).
2012 The hotel
closes its doors for
the first time in its
history.
2016
Two months before
scheduled reopening,
the Ritz suffers a
fire. The hotel
reopens in June.
FRANCIS HAMMOND FOR THE WALL STREET JOURNAL (4); GETTY IMAGES (VENDÔME ILLUSTRATION, RITZ, PORTER, CHANEL, DUKE AND DUCHESS); ALAMY (CRACKER, HEPBURN AND COOPER); EVERETT COLLECTION (HATHAWAY)
Continued from page W1
explanation. According to the
Ritz president Frank Klein,
the hotel underwent a “roof to
basement” renovation designed
to leave it, paradoxically, looking utterly unchanged. “Guests
said, ‘Don’t destroy the Ritz.’
‘Don’t make it modern.’” Mr.
Klein told me. And so the Ritz
spent four years endeavoring
to make these massive renovations—led by architect Thierry
Despont—virtually invisible.
A tall order. As Mr. Klein remarked, “How do you provide
Wi-Fi without antennas?”
In other words, the hotel was
to be restored not just as a hotel, but as a theatrical set of itself. This is unsurprising, since
the Ritz has always been about
theater, about a mythical, idealized Paris of yesteryear—the
Paris that attracted me and
countless other Americans of
a certain age and education
(Americans form the majority
of Ritz clientele), the Paris of
college literature seminars and
Audrey Hepburn movies. The
fact that 20th-century American
greats—Ernest Hemingway,
F. Scott Fitzgerald, Cole Porter—
indulgently lived and worked
here partly explains the attraction. But beyond that, the Ritz
seduces America by conferring
a feeling of royal privilege. It’s
a magic castle that turns commoners into royalty, however
briefly. (Disney resorts play to
the same desires, if for a different demographic.)
Others have shared this view:
Marcel Proust, a Jewish outsider
in French aristocracy, long held
court at the Ritz, where he cajoled haut monde gossip out of
handsome waiters—and sometimes more intimate favors too.
Coco Chanel, at heart a peasant
arriviste, loved playing Queen of
the Ritz.
Marketing this kind of privilege had been precisely César
Ritz’s goal when that son of
Swiss peasants founded the hotel
in 1898. He imagined his creation
as a latter-day Versailles, a gilded
palace where all guests would be
treated like royalty—as long as
they had royal amounts of cash.
Monsieur Ritz’s vision proved remarkably durable, but can it last
indefinitely? Do today’s guests
want a 19th-century stage set on
which to playact high society?
The Ritz is betting they do.
And so, to distinguish itself from
the ever-growing competitive
landscape of Parisian ultraluxury
hotels, it has doubled down precisely on its “Ritziness”: its oldworld charm, extreme Frenchness and legendary history. Mr.
Al Fayed stresses the hotel’s tight
link to its past: “The renovated
Ritz Paris demonstrates how I
have followed the steps of its
original owner, César Ritz,” he
said by email.
Perhaps, then, it’s quite deliberate that the air throughout the
hotel is scented lightly with what
May 1940
In advance of the
approaching German
army, Winston
Churchill arrives in
Paris to assess the
situation. He stays
in the Ritz’s Imperial
Suite.
OFF DUTY
Ode to a
Summer
Dress
THE CAREERIST
It doesn’t take a warbling nightingale
to prompt a modern-day poem:
We asked writers from New York’s
Poets House and the Miami-based
National YoungArts Foundation to muse
on these diverse and lovely looks
THE ROMANTIC
Dress Finds its Girl
Slate blue fabric plies costumed city streets.
A precise breach for thigh, engineered
by artisans, laborers, the leather-warm hands
of marketers, rides steel elevators dotted white
with eyes and numbers leading north, belt gathered
tight around a waist. You feel silk spin
and places where the sun designs to touch.
—Emily Brandt
Footnotes “To create the print, we superimposed polka-dot patterns from the ’30s
and ’60s,” said New York-based designer
Joseph Altuzarra. Give this office-ready
housedress a feminine finish with low-heeled
slingbacks from Paul Andrew. Altuzarra
Aimee Dress, $2,150, neimanmarcus.com
Ode to a Sway
Every woman inside it
enters like a burgundy open
rose just bloomed.
Does she not spool
like a cold river or spring?
Make up for every lost smile
and booted toe covered
during winter? This sway
is a never-ending wave,
blue coral lighter than air.
—Cynthia Manick
THE MINIMALIST
THE FLIRT
A Floral Dress
Splashed with a softened meadow
smooth as the sea
a sleeveless silhouette gently sculpted.
Peeking collarbone greets delicate ruffled V-line,
bare skin warmed under the bare sun’s gaze.
A curious ocean breeze breathes life
into the hemline’s white flutter:
a light majestic rising
of body and weightless silk
to the tempting call of the beach
—Amanda Gorman
Footnotes Cut on a bias for a 1930s feel, this crepe
de chine and chiffon frock by Rebecca Taylor has
a print inspired by Victorian illustrator Anne Pratt. Try
plimsoll sneakers by day; ankle-strap heels at night.
Meadow Floral Ruffle Dress, $550, rebeccataylor.com
I Walk Into the Ocean
I walk into the ocean
& wear the water.
praise the dress that ripples
down the body in waves & lets you carry
the ocean around your waist. why
praise a dress I could never afford?
a lover once called me beautiful
& kissed me so gently you could plant
seeds. we used to sit by the ocean & talk
until the water was clear enough
to see our true selves.
—José Olivarez
Snowflake July
you study winter
borrow its icy blush
make float of cloak
stack ivory suns
you shovel waves
cuff cloud hide
you shoreline frosting
you snowflake july
—Nicole Shanté White
Footnotes Unapologetically feminine, yet unabashedly modern: Long,
cool tiers of liquid blue silk from
Giorgio Armani need only a pair of
silvery heeled sandals. Tiered Ruffle
Dress, $6,195, Giorgio Armani,
212-988-9191
THE MODERNIST
Footnotes French linen
shirting found at flea
markets in the South of
France inspired this minimalist Provençal shirtdress in
crisp cotton poplin. Contrast
its pristine sophistication
with chunky Céline espadrilles. Galeana Bib Front
Dress, $375, apieceapart.com
Go to wsj.com/fashion for information about the poets, as well as details on programs like the Jerome Foundation’s
Emerging Poets Fellowship with Poets House (poetshouse.org) and National YoungArts Week 2017 (youngarts.org).
F. MARTIN RAMIN/THE WALL STREET JOURNAL, STYLING BY ANNE CARDENAS
Footnotes This floor-skimming jersey dress with its
bold blocks of color is the
season’s anti-boho maxi.
Underscore its effortless elegance with a flat slide sandal.
Long Dress, $3,400, and
Belt, $540, Bottega Veneta,
800-845-6790
FAST FIVE
THE THINKING MAN’S CAP
Let the frat boys have their big-billed hats with stiff high crowns and garish logos.
This summer, the more considered choice is soft-domed and subtly hued
American
Industrial Ball
Cap, $78,
thehill-side.com
Polo
Ralph Lauren
Hat, $35,
ralphlauren.com
Core Logo
Hat, $48,
noahny.com
Washed OK
Polo Hat, $32,
onlyny.com
Baseball Cap,
$175, Rag &
Bone, 212-2192204
OFF DUTY
When
Décor Just
Clicks
Can digital decorating
services replace
in-the-flesh pros?
We tested out three
BEFORE
A FINE BLEND NousDecor’s
renderings best merged the
husband’s modernist leanings
with the wife’s eccentric taste.
THE CHALLENGEElevate the décor of
a room that must double as master
bedroom and office, incorporating art the
couple never got around to hanging.
BY JULIE LASKY
W
HEN MY FAMILY settled into our prewar
rental apartment in
New York’s Harlem
neighborhood, we gave
the weary movers quick, reckless instructions on arranging the master bedroom.
Bed here—oof. Dresser there—umph. My
husband, Ernest, and I reassured each
other we’d eventually figure out the right
places for the furniture.
That was six years ago.
Our room, which also serves as my
office, includes beautiful 10-foot ceilings,
two north-facing windows, wood floors
and a nonworking fireplace. We finally
accepted we need help pulling it together,
but decorators charge $50 to $500 an
hour, and we’re too impatient for
a long process.
You supply a problem, photos,
room layout and visual
inspirations, and the service
gets back to you with
solutions and a shopping list.
So we went the budget- and timesaving
route: online decorating services, sites
that offer cut-rate pricing, provided the
process takes place entirely online. You
supply a problem, photos, room layout
and visual inspirations, and they respond
within weeks with solutions and a shopping list that lets you pick what you really
want (or can afford). In most cases, they’ll
order and track the furniture for you.
Would a virtual experience really get
the job done? We set out to test a few
of these services, a new one called
NousDecor and two established businesses: Decorist and Laurel & Wolf. With
each, the fee rises based on the expertise
of the designer you work with. In each
case, we opted for the most basic package.
Our brief was a fresh look for our 256square-foot room. We wanted a better relationship between relaxation and work
areas, a wall color to replace the existing
taupe and advice on placing artworks we’d
never hung. The new scheme would have
to incorporate our 1940s elm-wood chifforobe, a 1960s Edward Wormley walnut
highboy and a blond Terence Conran
bookcase. We didn’t want to spend much
more than $10,000 on the entire project.
To aid the designers, I sent photos that
reflected Ernest’s and my not-especiallycompatible tastes. A die-hard modernist,
he had fallen for magazine shots of a bedroom awash with vintage Scandinavian
furniture and sheepskin rugs. I like richer
colors and eccentric character and found
a fine expression of my taste in a bedroom
by New York decorator Katie Ridder. It included green-and-gold floral wallpaper
and a black-and-gold carved Chinese bed.
How would the service bridge this
divide? With varied degrees of success,
it turned out, in three very different
processes.
Unlike the other two services, NousDecor uses an
in-house design team for its $199 package. We
ultimately communicated with four different decorators. The company was also unique in starting
with a floor plan and following up with furnishing
suggestions. The plan showed an L-shape desk
in the corner to the right of the fireplace.
Once we approved the layout, we received
three design schemes. One in particular was
a masterly blend of our styles, acknowledging
both my love of decorative pattern and Ernest’s
Scandinavian affinities. The blue-gray color of
the ornamental wallpaper made it seem less femi-
The Pleaser
Briefed on our needs and preferred
styles, Laurel & Wolf ($399 per
room for its most basic package)
promised to return a minimum
of three schemes for the space.
Three days later we had seven,
each by a different decorator. The
looks showed furniture, carpets
and window treatments, including
lots of Chinoiserie. Though my inspiration photo included a Chineseinflected bed, I had been drawn to
the room’s patterns and textures,
not a particular style. But how
could my digital partners have
known that?
Our favorite look came from
Kimberlie Wade, of Chell Design
Group Studios in North Carolina. It
skewed toward Ernest’s side of
the style gap, with midcenturymodern elliptical shapes and harvest-gold walls, but we liked the
furniture selections and uncluttered
arrangement. Emailing back and
forth every day for two weeks, we
swapped out the gray-and-beige
abstract rug for a blue Persian,
nine, and its rich hue, as well as gold accents
throughout the room, complemented our dark
furniture. The L-shaped desk idea had been
replaced with vintage Danish modern wall units
by Poul Cadovius on both sides of the fireplace,
arrayed with our artwork. (The decorators had figured out we like to prop pictures on shelves rather
than hang them; it’s less of a commitment.)
One unit contained a desk for me. We thought it
looked great. In an aspirational moment, I had
chosen a budget range that went up from
$10,000 to $15,000, so I asked for cuts that
would bring the final $17,257 cost closer to my
added a runner to offset winter
chill, picked pure white Behr milk
paint for the walls and tossed in
some throw pillows. Kimberlie
gave us choices, down to the desk
accessories. Five revisions followed
that first board. The final, which
included detailed representations
of the items set in an approximation of our room, was delivered
with a floor plan. A number of
watercolor-like renderings blurred
specifics but showed multiple perspectives, with options for placing
furniture, including our existing
pieces. Kimberlie also gave precise
instructions for hanging a dozen
of our artworks.
Best aspect: As close a relationship as a designer and client can
develop without ever having heard
each other’s voices.
Worst aspect: Communicating
through email is exhausting, and
despite our designer’s heroic efforts, the plan never came together in the way we had hoped.
Total product cost: $5,537
The Half-Baker
After soliciting project
details, Decorist ($299
per room) matched us
with a designer based
on our style (we could
have opted to choose
one). She emailed us
three inspiration boards
that each showed
a bed and seating area
but no workspace. We
should have flagged
the omission. But we
assumed we were nailing down style first and
would eventually get
a more complete plan.
Of the schemes, we
picked one whose wintry colors and Scandinavian sheepskins
again catered to
Ernest’s preferences.
We were learning that
designers had an easier
time delivering a precise style than something as vague as
“eccentricity.” Our decorator asked if we
wanted to change anything. We asked for
a new wall color (I dislike beige) and alternatives to the chess
piece-like Eames stools
(they seemed tired).
We also preferred our
schoolhouse pendant
lamp to the plan’s
spherical fixture. I was
too distracted by the
flames in my nonworking fireplace to notice
the giant white surround that had been
included. The decorator
The Takeaway
‘E’ FOR EFFORT Laurel & Wolf dedicated a lot of time to the
project but never delivered a satisfying plan.
$10,000 goal. Cheaper wall units were sourced,
knocking off more than $4,000, and it was suggested that our existing Conran bookshelf could
replace one of the pair. A rendering with that solution lacked the original scheme’s elegance.
Ernest was OK with it, but I had lost my heart to
the pair of étagères and felt less ready to compromise. Perhaps the Conran piece will have to go.
Best aspect: Beautiful renderings that made
a very good solution look even better.
Worst aspect: More than we can afford.
Total product cost: $11,518 with a single,
cheaper shelving unit
HOME-OFFICE OVERSIGHT Decorist provided
only one revision—and didn’t include a desk.
came back with Farrow
& Ball’s Plummett gray
paint (better) and
drum-shaped metal
storage tables meant
to appeal to my fondness for ethnic touches
(equally trite).
We opted not to pay
an extra $99 for a 3-D
rendering and received
two stylized views of
the redesigned space.
Decorist hadn’t reminded us to send pics
of our existing pieces,
as the other services
had, so a Queen Anne
highboy stood in for
our Wormley dresser.
A floor plan put rectangles where our old furniture fit. As for a desk,
there was room to drop
one in somewhere, our
decorator said. I later
discovered they had
a “happiness guarantee,” which promises to
refund your money if
you’re not satisfied.
Best aspect: Executed
at warp speed
Worst aspect: Some
basic needs were overlooked
Total product cost:
$9,308
Working with online design services broke down our creative roadblock.
We had access to pros who knew what they were doing and for the most
part listened to us. And the detachment of the digital relationship yielded
an unforeseen benefit: We were able to pick products we liked rather
than having to commit to a complete look. On the other hand, our decorators never really got to know us. A stroll through a showroom would
have revealed more about our tastes than any amount of online chat. And
we can’t conceive of ordering products without seeing them in person.
Even so, I love NousDecor’s design. Ernest felt less affection but was
carried along by my enthusiasm. So we will probably adopt some ideas,
starting with the wallpaper, which is removable, and a wall unit (or two).
We agreed that it was $199 well spent.
RYAN MESINA/THE WALL STREET JOURNAL (BEFORE PHOTOS)
The Dream Team
OFF DUTY
BREAKFAST 2.0
More Than
One Way to
Flip a Crêpe
GET
GLORIOUSLY
CHEESY...
This simple galette,
filled with melted
gruyère, requires
nothing more.
BY ELIZABETH G. DUNN
THOSE PRACTICED IN the
art of crêpe cookery are
always saying things like,
“Making crêpes is easy once
you get the hang of it!” To
a person (say, me) who has
scorched, torn and otherwise mangled crêpes as
brunch guests stand around
making nervous small talk,
this feels like a vicious lie.
The fact is, making crêpes
is impossible, until suddenly
it’s a breeze. There seems
to be nothing in between. As
someone who was recently
terrible at turning batter
into these thin, supple pancakes, I have some advice to
share that may help speed
the transition from disaster
to perfection.
Between my pride
and an intact galette,
I’ll take the galette.
My favorite style of crêpe
is the savory buckwheat version that is a specialty of
the French region of Brittany: galettes bretonnes.
The traditional way to make
them is to ladle a batter as
thick as melted chocolate
onto a big, hot griddle
coated with bubbling butter,
paint it into a paper-thin circle using a special rake, and
then flip it using one’s fingers. Well, just try doing any
of that properly on your
first try. Or second. Or third.
For starters, let’s assume
you don’t have a purposebuilt crêpe griddle. Instead,
you can use a pan 9 to 10
inches in diameter. It must
be nonstick and the surface
must be completely clean.
It’s better to err in the direction of underheating your
pan as opposed to overheating it, and making the batter
too loose rather than too
thick, to make it easier to
spread the batter evenly before it sets (via tipping the
pan, assuming you’re sans
that special rake, too).
To flip the galette, I don’t
risk using a spatula, much
less my fingers. I cover the
pan with a dinner plate and
invert it, then slide the galette back into the pan on
the reverse side. I’m sure
an actual French person
would not be caught dead
doing this, but between my
pride and an intact galette,
I’ll take the galette.
The galettes bretonnes
used as the base for both
recipes here comes from
Dominique Crenn, chef and
owner of Atelier Crenn and
Petit Crenn in San Francisco,
to whom it was passed down
by her Bretonne mother. It’s
a simple marriage of nutty,
rich Gruyère cheese and
earthy dough, a package
lovely in its austerity. Doubtless Madame Crenn always
made them perfectly round,
wafer thin and glossy back
in France, no doubt while
telling everybody how easy
it is to make crêpes.
A galette is rather like
an omelet in that just about
anything can be turned into
a filling, so once you’ve had
your fill of the cheese-only
version, here’s a great riff,
the perfect excuse to search
out the best produce of the
moment. On a recent Saturday I found the farmers’
market bursting with baby
greens: lamb’s quarters and
baby spinach, radish and
mustard greens, all of which
wilt beautifully into a galette
filling. Spring onions, chives
and shallots were also out
in force, and can be called
on to contribute some astringent kick. Fresh eggs and
a local cheese round out the
combination: I chose an
aged raw cow’s milk cheese
from Consider Bardwell
Farm in Vermont, but anything firm enough to grate
will sub in easily. Honest.
...OR TURN
OVER A NEW LEAF
This one has a filling
of wilted greens,
cheese, shallots and an
egg cooked right
inside.
Gruyère Galette
Egg and Greens Galette
TOTAL TIME: 30 minutes MAKES: 8 galettes
TOTAL TIME: 40 minutes MAKES: 8 galettes
For the galettes:
31/2 cups buckwheat flour
21/2 teaspoons coarse sea
salt
3 cups filtered water
1 large egg
1 cup dry sparkling hard
cider, preferably from
Brittany
1/
2 cup sparkling water
For the filling:
4 tablespoons unsalted
butter
2 cups finely grated
Gruyère cheese
Freshly ground black
pepper
1. Mix flour and salt in a large mixing bowl. Combine water and egg
in a separate bowl. Make a well in center of dry ingredients and
gradually whisk in egg and water until smooth. Whisk in cider.
2. Using sparkling water, adjust consistency of batter until it resembles heavy cream or melted ice cream. You’ll use about 1/2 cup.
3. Place a 9- to 10-inch nonstick skillet over medium heat. Melt
1 tablespoon butter, swirling to coat bottom of pan.
4. Lift pan off burner and pour 1/3 cup batter into center, swirling to
coat pan evenly (use a rubber spatula to spread if necessary). Cook
until galette steams and surface is entirely dry, 30 seconds-1 minute.
5. Flip galette by inverting onto a dinner plate and sliding back into
pan or using a spatula. Sprinkle gruyère evenly across surface and
let melt, about 30 seconds. Fold rounded edges of galette over to
form a square. Slide onto a plate and top with black pepper. Repeat
with remaining ingredients, buttering pan after every few uses.
(While these recipes yield 8 servings, you’ll have enough batter
for 14-16 galettes, allowing a wide margin for error. Leftover batter
will keep 2 days in a sealed container in refrigerator.)
For the galettes:
31/2 cups buckwheat flour
21/2 teaspoons coarse sea salt
3 cups filtered water
1 large egg
1 cup dry sparkling hard cider,
preferably from Brittany
1/
2 cup sparkling water
For the filling:
4 tablespoons unsalted butter
LINDA XIAO FOR THE WALL STREET JOURNAL, FOOD STYLING BY HEATHER MELDROM, PROP STYLING BY STEPHANIE HANES
Feel free to buck tradition a little when
making—and filling—the hearty
buckwheat pancakes known as galettes
8 large eggs
2 cups grated semi-firm
cheese (such as Gruyère,
Manchego, or fontina)
1/
2 cup thinly sliced shallots
2 cups baby greens (such as
lamb’s quarters, baby
spinach or radish greens)
Freshly ground black pepper
1. Mix flour and salt in a large mixing bowl. Combine water and egg
in a separate bowl. Make a well in center of dry ingredients and
gradually whisk in egg and water until smooth. Whisk in cider.
2. Using sparkling water, adjust consistency of batter until it resembles heavy cream or melted ice cream. You’ll use about 1/2 cup.
3. Place a 9- to 10-inch nonstick skillet over medium heat. Melt
1 tablespoon butter, swirling to coat bottom of pan.
4. Lift pan off burner and pour 1/3 cup batter into center, swirling to
coat pan evenly (use a rubber spatula to spread if necessary). Cook
until galette steams and surface is entirely dry, 30 seconds-1 minute.
5. Flip galette by inverting onto a dinner plate and sliding back
into pan or using a spatula. Crack an egg carefully onto middle
of crepe. Sprinkle 1/4 cup cheese evenly over top, then sprinkle with
shallots and greens. Fold rounded edges of galette over to form
a square. Cover with lid and cook until egg white is opaque and
cheese melted, 1-2 minutes. Slide onto a plate and top with black
pepper. Garnish with additional greens, if you like. Repeat with
remaining ingredients, buttering pan after every few uses.
HALF FULL
2
BITTER TRUTHS
3
5
1
Once relegated to industrial brewing, hop extracts are
the secret behind some of today’s briskest craft beers
that remains is clean, shelfstable and concentrated, easy
to preserve and to ship. “Extracts have better longevity
[than raw hops], particularly
in countries with developing
logistics or harsher climates,”
said Alex Barth, CEO of John
I. Haas, part of the BarthHaas Group, supplier of hops
and hop products world-wide.
While smaller brewers love
variations in flavor among
different hop varieties and
crops, those wrinkles are
risks. Extracts, measured by
the bitter alpha acid they
contain, let brewers dial in
bitterness to the decimal
point—and crank it up. Lagunitas brewmaster Jeremy
Marshall said making the intense Hop Stoopid with cones
meant losing about 40% of
each batch to absorption.
Most commercial extracts
don’t come in degrees of
dankness or pungency.
“They’re just generic alpha
acid,” said Mr. Marshall. So
Lagunitas had theirs custommade, using subtler but more
flavorful hops. Sierra Nevada
extracted from their beloved
Cascades strain with steam
distilling equipment borrowed
from a nearby mint farm.
“Alpha isn’t the point anymore,” said Mr. Barth, citing
his company’s line of Pure
Hop Aromas, in blends such
as “Citrussy” and “Floral.”
Still, the new wave of extraction is small. Robert Bourne
of Extractz makes varietyspecific extractions in an Ohio
garage. He supplies a few local brewers but admitted he’s
on the fringes: “It’s more of
a home-brew thing.”
Even when they come from
a garage, extracts haven’t
quite shed their industrial associations. The Hop Stoopid
label shows a rustic barn; the
fine print proclaims the
“mountain of extracts” in the
beer. “People read the label
and call us up saying they
won’t drink it,” Mr. Marshall
said. “They think it’s some industrial, nonnatural thing.”
Others maintain that whether
from a leaf or a vial, flavor
trumps all. Try these extractbrewed beers and judge for
yourself. —William Bostwick
1. Sierra Nevada Brewing
Co. Hop Hunter (6.2% ABV)
Made with hop oils distilled
minutes after harvest, Hop
Hunter sizzles with tangy
citrus.
2. Lagunitas Brewing Co.
Hop Stoopid (8.0% ABV)
A mandarin meteor of citrus
zest and fruit with a syrupy
afterburn.
3. Russian River Brewing
Co. Pliny the Elder (8%
ABV) The easier-to-find but
only slightly less potent sib-
ling to cult IPA Pliny the
Younger, Russian River’s flagship is a head-clearing burst
of orange soda.
4. Mikkeller ApS 1000 IBU
(9.6% ABV) This Danish
entry uppercuts with sour
and kicks low with dark fruit,
like grapefruit crossed with
blood orange.
5. Stone Brewing Co.
Enjoy By IPA (9.4% ABV)
A deeper, richer IPA, tart,
sweet and warming as a
syrupy peach cobbler.
NATURE SCENES RULE on
craft beer labels—mountains,
streams, even a yeti or two.
But you won’t see a pressurized supercritical carbon-dioxide hop extraction chamber
on a label anytime soon.
The dirty secret behind
today’s IPAs: There’s little
dirty about them. Brewers
are sourcing their signature
bitterness in sterile labs, not
muddy hop fields.
The hop plant contains oils
and resins that give beer its
bite; lab-made extracts of
those flavorful and bitter oils
and resins were once relegated to Big Beer’s industrial
toolbox, while craft brewers
stuck to cramming whole
cones of the hop vine into the
brewing kettle. No more.
Not that industrial hop extraction is anything new. In
the 1870s, the New York Hop
Extract Company supplied
brewers with hop resins made
by soaking flowers in gasoline. Today, labs use liquid
CO2 as a solvent, boiling hops
to extract oils and then venting the gas away. The liquid
4
OFF DUTY
THE WATCH MAN: TIMELY ADVICE FROM HOROLOGICAL EXPERT MICHAEL CLERIZO
Q
I’ve heard that the
prices of Swiss mechanical watches are falling.
Is now a good time to buy?
A
You’ve got excellent
intel. Prices for Swiss
watches are, indeed, slipping,
which makes it easier to contemplate a big-ticket purchase. It is happening for
a reason: Sales are down.
According to the Federation of the Swiss Watch Industry, 2015 was the first
year since 2009 that exports
dropped. More recently the
Federation reported that in
April of this year, “the trend
of Swiss watch exports remained sharply negative.”
Exports were down 11.1% in
value compared with April
2015, and “over the first four
months of this year, the
downturn stands at 9.5%.”
What’s behind the drop?
The strong Swiss franc has
kept prices high, while anemic economic growth in
Europe has kept demand
lower than expected. Meanwhile, the low price of oil
has corresponded to decreased spending in Russia
and the Middle East. In
Asia, the weak Chinese
yuan, coupled with an official crackdown on corruption and a shift in tastes
away from conspicuous luxury, has depressed sales in
China and Hong Kong.
Some watch brands
are quietly cutting
prices by 5% to 7%—
but discounting
won’t last.
As a result, inventories
are bulging and some
brands are quietly cutting
prices by 5% to 7%. (Believe
me, in Switzerland nobody
shouts about these things.)
That sounds like good news
for buyers—and it is. But
is a $15,000 watch that now
costs roughly $1,000 less
really a bargain?
The industry realizes that
discounting may not be
enough of an impetus to buy
a luxury watch these days.
So some brands have managed to generate interest by
adding traditionally pricey
features to unusually “affordable” watches, thanks to
cost-saving production innovations. What to look for:
Chronograph/Tourbillons
The most controversial
watch introduced this year
is the TAG Heuer Carrera
Heuer-02T, which boasts
a chronograph (stopwatch
function) and a tourbillon
(a device that improves
accuracy) in a 45-mm titanium case. Prices for similar
watches often start at
$40,000 to $50,000; the 02T
(this is the controversial
part) costs $15,950.
Other executives accused
TAG Heuer of horological
treason for selling a chronograph/tourbillon at so low
a price. At Baselworld,
Thierry Stern, president of
Patek Philippe, commented
on the 02T to Bloomberg
Pursuits: “If they’re willing
to try to kill the quality of
the Swiss product, they’re
on a very good track.”
Jean-Claude Biver, TAG
Heuer CEO and president of
the LVMH Watch Division,
explained the motivation:
“When sales drop, there is
a crisis, but you make the
crisis your friend.” The
brand simplified the production for the 02T, greatly
reducing costs.
DIALING FOR DOLLARS From left: Frédérique Constant Manufacture Perpetual Calendar
Watch, $8,995, Tourneau, 212-758-5830; Carrera Heuer-02T Watch, $15,950, TAG Heuer, 855469-5019; Drive de Cartier Watch, $8,750, Cartier, 212-940-2220
Perpetual Calendars
People who obsess about
timepieces appreciate perpetual calendar watches,
which display the day, date,
month, year and phases of
the moon, making adjustments for leap years. This
spring, Geneva-based Frédérique Constant (acquired
last month by Japan’s Citizen Watch Company) introduced a Manufacture Perpetual Calendar watch with an
easy-to-read dial and a 42mm stainless steel case.
Peter Stas, CEO of Frédérique Constant, touted his
brand’s “lean manufacturing
processes,” which kept the
price to $8,995, well below
the $13,000 to $500,000
similar models fetch.
Complications
Watch lovers know that
a complication (any function or design flourish beyond a simple time display)
can drive costs up. So in
January, when Cartier unveiled the Drive de Cartier,
I was surprised by its
price—$8,750, so much less
than the $20,000 figure
I had guesstimated.
An elegant asymmetry
rules on this watch, which
has a date window at 12,
a second time zone dial at
10, a day/night indicator at
half-past 3 and a small seconds dial at 6. The dial also
has delicate engraved patterns called guilloché. All
that Cartier chic is in a 40mm stainless steel case.
These three watches arguably offer excellent value for
the money. But with most
watch executives predicting
the present doldrums will
last two more years, the
quandary for consumers is:
Do we buy now or wait in
the hope that prices will
drop even further?
Special Advertising Feature
SWITCH OFF, KICK BACK AND RELAX
W
years old, as well as an 800-square-meter family
swimming pool, kids’ plunge pool and a daily
ice-cream “happy hour.”
hen it comes
to vacations,
there are
times when
all we want
is to escape everyday stresses and
unwind in the sun: to read those
novels that have been sitting on the
shelf since last birthday, to swim in
the sea, play with the kids, to ignore
the blinking message light on our
smart phone, to lie in, be massaged
and say yes to second helpings of
pancakes at breakfast. Heck, to say
yes to third helpings of pancakes.
The Domes of Elounda, Autograph
Collection, is situated in the east
of Crete—an island of unspoilt
natural beauty whose rich historical
tapestry has been shaped over
millennia by Minoans, Greeks,
Romans, Byzantines, Venetians and
Ottomans—and perfectly fits the bill
for those wanting a relaxing week
in the Mediterranean.
Within the resort there are family-friendly
zones, adults-only zones and quiet zones, while
the beach is separated into two areas, with a
family-friendly area and a quiet zone—in other
words, everyone gets to choose their own level
of tranquillity.
A further nod to serenity is provided by the
Digital Detox package that can be arranged by
the resort: laptops, smart phones and tablets are
locked away for a day while guests enjoy quality
time with the family; breakfast in bed to start,
then a fishing trip perhaps, an afternoon playing
board games by the pool and an evening of chat
and laughter, rather than computer games where
alien zombies chase killer penguins.
The Mediterranean resort is situated amid unspoilt natural beauty, with
family-friendly and quiet zones.
Original photographs of the Roaring Twenties add unique charm to modern
interiors.
An hour-and-a-half away from the airport at Heraklion, which
has direct flights from many European cities, the hotel sits in
a tranquil, turquoise bay overlooking the UNESCO World
Heritage-listed island of Spinalonga.
The resort is a perfect combination of privacy and luxury,
‘Offline is the new
luxury—everyone feels
more relaxed after the
Digital Detox.’
Delicious, fresh Cretan food is a highlight at Domes
of Elounda. Away from the four main restaurants, which
offer everything from regional Greek cuisine to lobster and
steak, guests can also enjoy a luxuriously remote picnic on
Spinalonga. They can also learn to cook traditional Minoan
dishes in clay pots over the smoldering embers of an evening
fire. The hotel has worked in partnership with a leading
archaeologist at the ancient Minoan site of Knossos to make
these dishes as authentic as possible.
ideal for couples and families, with sumptuously appointed
suites, villas and residences. Even the smallest—hardly an apt
description, given the generous 80 square meters of living
space—have their own private outdoor whirlpool bath or pool,
and guests can enjoy an in-room couples massage, private
dining, or just relax on their sea-view terrace.
Chefs here are keen to share their knowledge with guests,
through private or group cookery demonstrations in villas or in
the resort’s kitchens, using local horta (herbs and wild plants,
foraged nearby) and other island ingredients, including, of
course, some of the world’s finest virgin olive oils. It’s also easy
to arrange for guests to join women in the village bakery at
Kritsa to make pastries and breads.
Last year the “Haute Living Selection” of Ultraluxe Villas
and Luxury Residences was added, with a host of additional
benefits including private pools of up to 50 square meters, inroom check-in, grocery delivery, dedicated villa manager and
pre-booked sunbeds on the resort’s private beach. Perfect for
families who want to spend time together but also enjoy plenty
of space for everyone.
The resort offers guests four different restaurants to choose from.
“Offline is the new luxury,” says Manos
Vatzolas, the resort’s director of sales and
marketing. “Everyone feels more relaxed after the
Digital Detox. Memories come back to them—
and memory is another luxury that builds
fantastic holidays.”
The Domes of Elounda provides the ultimate means
of escape and relaxation for couples and families alike;
something that will be replicated when its sister hotel, Domes
Noruz Chania, Autograph Collection, opens in August.
If parents do want peace and quiet away from the little
ones, there are superb care and entertainment-club facilities
for babies, children and teens, from ages four months to 16
The Wall Street Journal news organization was not involved in the creation of this content.
F. MARTIN RAMIN/THE WALL STREET JOURNAL, STYLING BY ANNE CARDENAS; ILLUSTRATION BY MICHAEL SLOAN
ASwissWatch PriceRollercoaster:Time toBuy?
VALERO DOVAL
OFF DUTY
Climb Every Boulder
You don’t have to trek to a mountain to enjoy natural-rock climbing. In many cities, boulderers clamber for low-altitude thrills
BY SANETTE TANAKA
W
HEN YOU
think about
rock climbing
out in nature,
as opposed to
in a gym with its own beer garden,
certain notions come to mind.
Mountains. Vertigo. Life insurance.
You can, however, get much
the same thrill, and whole-body
workout, safely and without heading to the boonies. Much to urban
dwellers’ delight, you can climb
on bona fide outdoor rock within
many cities or a quick drive away.
Because you rarely get
very high off the
ground, most people
don’t bother running
lines for safety.
A twist on traditional climbing,
bouldering, as the pastime is
known, has climbers maneuvering
across the base of a rock face
rather than straight up it. Because
you rarely get very high off the
ground, most people don’t bother
running lines for safety or strapping on harnesses; instead, they
use a thick cushy mat, called
a crash pad, to break a fall should
they lose their grip. (One, placed
at the most treacherous part of
the route, will usually suffice; you
can also pool your pads when
climbing with others.)
When Jay Kleman, an assistant
store manager at a Manhattan
Patagonia store, wants to go bouldering, he heads to the southern
part of Central Park, a short walk
from his workplace on the Upper
West Side. “You don’t have to
plan,” said Mr. Kleman. “You can
have a half day, or get off work
early, and just go.”
Climbers tend to tackle bouldering routes (called “problems”) at
a faster pace, using quicker footwork than they would with more
traditional climbs. Yet the naturalrock experience is more authentic
than those offered at the indoor
climbing gyms popping up around
the country. According to Annie
Tedesco, a 26-year-old jewelry
maker in New York, finishing
a tough route on natural rock is
more satisfying than on a manmade structure. “Gym problems
come and go, and they set new
ones,” she said, referring to
a gym’s ability to rejigger the
wall. “But outside, they’re real.”
New York isn’t the only metropolis with this perk. Atlanta, Las
Vegas, Salt Lake City, Chattanooga,
Tenn., and other cities have easily
accessible routes that are, at most,
a short drive from town.
Last year, Todd Moy, 37, moved
from Durham, N.C., to Boulder,
Colo., in part to be closer to good
climbing. While he once had to
drive two hours to get his fix, he
now has easy climbs within biking
distance of Boulder’s city center;
Flagstaff Mountain is 3 miles away.
“You see students walking from
the University of Colorado
[Boulder] with crash pads
on their backs,” said Mr. Moy,
a user-interface designer.
Urban bouldering is not without its challenges. The portions
of the rock that climbers grip,
known as holds, become polished
and greasy from overuse. Passersby often stop and gawk. And
then there is the urban wildlife
to contend with—rarely as endearing as the rufous-sided towhee you might spot in the trees
in Kentucky’s Red River Gorge.
According to Mr. Kleman, Rat
Rock, his go-to spot in Central
Park, is aptly named. At dusk,
“rats do come out of the crevices
and scavenge for food,” he said.
“I only saw one or two last night
but heard a bunch,” he said.
The good news is that bouldering requires little gear, one of the
sport’s main draws. “You don’t
have to deal with rope work, or
set anchors,” said Eli Strauss, director of instruction at the Cliffs
Climbing + Fitness, a company
that owns several climbing gyms
in New York. “You basically just
have a pair of climbing shoes, and
you just climb.”
Below, a mercifully short checklist of what you’ll need before hitting the rocks.
The Shoes
When shopping for climbing shoes,
look for a tight fit above all else.
“You want your foot to feel shrinkwrapped—a very, very tight fit,
tighter than you’d ever feel in
a pair of sneakers,” Mr. Strauss
said. It’s not uncommon for beginners to buy shoes that are too
loose, he added.
The tight fit will help you
better maintain your grip on rock
edges—an advantage that’s especially important in bouldering,
which often has you hanging onto
the underside of a rock, Mr.
Strauss said.
For beginners, Strauss recommended the Scarpa Helix ($99,
scarpa.com), La Sportiva Tarantula
($88, sportiva.com) or Five Ten
Rogue VCS ($100, fiveten.com), all
of which have rounded toe boxes,
a flat sole and leather uppers that
mold to the shape of your feet
with time.
The Crash Pad
If there’s one piece to splurge on,
it’s the crash pad. “You’re going to
be falling again and again on it—
you don’t want to be cheap about
it,” Mr. Strauss said.
He recommended pads by
Organic Climbing, a custom shop
in Central Pennsylvania. The
4-inch thick, 3-by-4-foot pad is
made of three layers of foam:
memory foam on top, foam rubber
in the middle and a base layer
of firm soy foam ($175, organicclimbing.com). Start with that
size rather than a larger one, Mr.
Strauss suggested; you can gradually add to your collection as you
take on taller and wider routes.
The Chalk
Climbers use chalk to keep their
hands dry and maintain their grip
on the rock. Chalk bags or buckets
are available in a multitude of
fabrics, colors and styles. They’ve
become something of personalstatement pieces for climbers.
When it comes to the chalk itself,
Metolius Super Chalk is a classic
choice ($2.50 for 2.5 ounces,
metoliusclimbing.com), though
some climbers are turning to new
chalk formulas that promise to
protect skin from overdrying and
cracking, like Colorado-based FrictionLabs’ Unicorn Dust chalk ($10
for 2.5 ounces, frictionlabs.com).
The Apps
Short of befriending an experienced urban boulderer, consulting
an app is probably the easiest way
to learn about climbing routes
near you. “Mountain Project” and
“Rakkup,” both available free on
iOS and Android, catalogue thousands of climbing routes, and work
offline once data is downloaded.
The key difference between the
two is that the 100,000-plus climbs
in Mountain Project are sourced
from the app’s users, whereas
Rakkup’s nearly 24,000 climbs
(available through in-app purchases) are culled from the company’s digital guidebooks, which
are written by local climbers.
“MyClimb,” available free on
iOS and Android, is worth downloading, too. It lets you view
routes posted by the app’s 46,000
registered users. It’s also a great
way to find a potential bouldering
partner; you can make a request
by naming a specific location, date
and time.
THE FIXER: MICHAEL HSU
often use my laptop to video chat, but I’m
Q Imortified
by how unattractive I look. The
camera is basically pointing up my nose. I have
better luck with a smartphone, but when I have
long conversations, my arm gets tired from
holding the phone up. Is there an easier way?
A
To look your best when video chatting, you
want the camera to sit roughly at eye level.
This will avoid the dreaded double-chin effect.
With a laptop, the camera is located at the top
of the screen; even if you have a gigantic laptop,
the camera is going to be a few inches too low.
A smartphone offers more flexibility, but I’ve
still had to search for easy ways to position a
phone at the ideal height. One inexpensive and
adaptable solution is to use a car smartphone
holder—the kind with a gooseneck arm that attaches to the windshield with a suction cup.
Many such models exist, but the Ipow Magnetic Cradleless Windshield Long Arm Car Mount
Holder ($16 on Amazon) is the best I’ve found
for this purpose. As the name suggests, it has an
especially long gooseneck (just over 13 inches).
Its suction cup also has a slightly tackier surface
than usual, which helps it adhere assuredly, even
to slightly curved surfaces. I found it will stick to
a smooth wall or any similar surface and come
off without marring. I’ve used this method to
stick my iPhone to a stairway wall while I sat
FaceTiming on the steps.
I also like that this Ipow model uses a strong
magnet to hold your smartphone in place. This
makes popping your phone on and off easy and
allows the holder to work with any brand and
make of smartphone and case. You’ll just have
to slip a very thin and light piece of metal (included) between the back of your phone and the
case. (If you don’t use a case, this solution is
probably not for you, since you’ll have to stick
the plate directly to your phone.)
Incidentally, if you video chat for work and
need to type while talking, the Ipow holder still
comes in handy. Just stick the suction cup to the
back of your laptop, then hover your smartphone
above the screen to face you while you work.
When using it with a smaller laptop or
one with a loose hinge, the laptop screen may
fall backward from additional weight. But
I found that positioning your phone closer to
you will solve this issue.
Have a problem that a gadget might solve?
E-mail us: [email protected]
KIERSTEN ESSENPREIS
The Secret to Looking Good in FaceTime Chats
HOMES
|
MARKETS
|
PEOPLE
|
MANSION
UPKEEP
|
VALUES
|
NEIGHBORHOODS
|
REDOS
‘I know no place at which an
Englishman may drop down suddenly
among a pleasanter circle of acquaintance...
than he can do at Boston.’
—Anthony Trollope
|
SALES
|
FIXTURES
|
BROKERS
FROM TOP: TONY LUONG FOR THE WALL STREET JOURNAL (4)
A BOOM
IN
BEANTOWN
With poolside cocktails and
rooftop mixers, developers
aim to lure a younger crowd to
a new wave of glassy condos.
BY AMY GAMERMAN
A DIGITAL “TWITTER WALL” flashes trending neighborhood topics inside the lobby of a new high-rise in
the theater district. A freshly built luxury building
across town lures affluent young professionals with
sunset yoga and hip-hop parties on the pool deck.
Downtown, one of San Francisco’s best known restaurateurs, Michael Mina, will craft a new entree every
month for residents of a sleek condo tower. And homeowners at a glass skyscraper set to open in 2018 will
be able to sip cocktails in private “sky cabanas” overlooking a rooftop pool. They may need to look out the
cabanas’ glass walls to remember what city they’re
in—Boston.
Boston—a city with a Puritan back story and an ingrained suspicion of glitz, where a well-preserved Back
FROM TOP: JASON GROW FOR THE WALL STREET JOURNAL (3)
ON THE RISE
Clockwise from
top right: Millennium Tower;
Wayne Adams,
who bought a
condo near
Fenway Park;
Carlton Aird
and Zena Savage-Aird at
Millenium
Tower; view
from One Canal; Chris Gannon at the Troy;
Downtown
Crossing area.
LUXURY HOMES FILLED WITH COPYCATS
HOUSE
OF THE DAY
wsj.com/houseoftheday
High-end homeowners are warming to faux granite, manufactured barn wood and other imitators that can be just as
beautiful but less expensive and easier to install than the real deal. Can impostors pass the appraisers’ inspections?
PRINCETON, N.J. Susan and Frank Pizzi in front of their scagliola fireplace surround, a material made with plaster and silk that looks
like marble. It cost $8,000 to cast and style. The hand-crafted approach enabled them to perfectly match the home’s decor.
SAVILLS
Scotland
A curved home on the
banks of Gare Loch
ROBERT SOCHA
WHEN DAN FRIES got into
the home-appraisal business 30 years ago, stone
was stone and wood was
wood. Now, it’s not so easy
to tell the real stuff from
the copycats.
“I’ve had to adjust my
skill set,” says Mr. Fries, a
high-end home appraiser
based in Atlanta who is often
literally down on his hands
and knees, scratching at
floors and peering at countertops to figure out what
they’re made of.
An array of building materials is now available in a
faux form, many indistinguishable from the real deal.
What looks like antique barn
wood is actually polyurethane. Cedar siding may actually be a composite of
wood fibers and resin. Porcelain tile looks like hardwood
flooring. Even rare granite
countertops and boxwood
hedges have imitators.
“Stone is no longer
unique. Everyone has it,”
says New York based interior
designer Phillip Miller.
Homeowners and builders
United States
A Catskills retreat with
a large master suite
SAUL GOODWIN, PROPERTY SHOT PHOTOGRAPHY
JESSE NEIDER FOR THE WALL STREET JOURNAL
BY NANCY KEATES
Australia
A tropical-style home in
northern Queensland
MANSION
A BUILDING BOOM IN BEANTOWN
TONY LUONG FOR THE WALL STREET JOURNAL (5)
THE TROY Chris Gannon’s one-bedroom apartment at the Troy, a luxury rental building in the South End “I work in a very social up-and-coming company, and I
got the same vibe from the Troy,” said Mr. Gannon, director of talent for a tech company. He pays $3,250 a month for his unit.
WATERSIDE PLACE Dorrie Luck, pictured above with her son James, traded her home in the suburbs for a two-bedroom on the top floor of this 20-story high
rise, built on Port Authority land in the Seaport District. Amenities include a pop-up produce stand in the lobby and al fresco yoga classes.
JASON GROW FOR THE WALL STREET JOURNAL (2)
Bay townhouse has long been the
gold standard of top-tier real estate—is embracing the designer
high rise. Shiny residential towers
are sprouting up across Beantown’s
once drab and neglected precincts,
emblems of Boston’s boom and its
growth as a bigger, more international city.
“I love the historic aspect of
Boston, but the old brownstones
are not for me,” said Wayne Adams, 31, a software developer and
Michigan transplant. After a computer-simulated house tour, he recently paid $1.13 million for a 24thfloor one-bedroom at Pierce
Boston, a 30-story geometric glass
tower now rising near Fenway Park
that will open in 2018.
As a condo owner, he will have
access to a private sky deck with
an outdoor kitchen and fireplace,
and a glass-floored dining room.
For an additional $300,000 or so,
he can buy one of the building’s 12
private rooftop cabanas.
To some longtime locals, these
glassy high-rises might look like
they belong in the opening credits
of “Miami Vice,” not the home of
Paul Revere. But Boston is moving
into a dynamic new chapter in its
long history.
Between 2010 and 2014, the
city’s population grew by 6%—
twice the national rate, according
to government statistics—with as
many as an additional 90,000 new
residents projected over the next
14 years. Many are young professionals, drawn by Boston’s growing
biotech and pharmaceutical industries, and by its hospitals, universities and financial-services industry.
Boston has also seen an influx of
overseas professionals, students
and their families, and the expansion of its international flight service to destinations across Europe,
Asia and the Middle East.
Newly minted Bostonians are
flocking to stylish rental apartments and condominiums with 24hour concierge service and millennial-friendly extras like pet spas
and bike garages. Developers are
winning over an older, moneyed
crowd with multimillion-dollar
apartments kitted out with climatecontrolled wine rooms and private
elevator entrances.
“Starting in 2013, we’re running
at about 13 or 14 million feet under
construction at any given time—
the sheer mass of new development is overwhelmingly residential,” said Brian Golden, director of
the Boston Redevelopment Authority, which approves major real-estate development in the city.
These new towers offer residents a built-in lifestyle, with al
fresco clambakes, private film
screenings and craft beer tastings
in clubby lounges and open-air pavilions. Millennium Tower, a 60story glass skyscraper in downtown Boston slated to open in July,
will offer a spa, salon, private theater, fitness center and a residentsonly restaurant designed by Mr.
Mina, its consulting chef. Millennium’s developer also touts its “La
Vie” program: a packed calendar of
casino nights, TED-style “fireside
chats” by Boston notables, and
wine evenings with live music.
According to Millennium Partners’ Richard Baumert, 95% of the
tower’s 442 condominiums have
sold, including a 13,000-squarefoot penthouse that had been
listed for $37.5 million, now under
agreement for an undisclosed sales
price.
Carlton and Zena Savage-Aird
are among Millennium Towers’
new owners. Longtime Bostonians,
the Airds bought a $1.64 million
condominium in 2014 in the 15story Millennium Place, another
downtown Millennium Partners development that opened in 2013.
Just four months after moving in,
the Airds decided to upgrade to a
$2.975 million condominium in the
then-unbuilt Millennium Tower.
“It’s a 24-hour community
within the confines of a building—
you can choose to stay in the entire weekend and be happy and engaged,” said Mr. Aird, 52, an
executive at an international retail
firm. The Airds plan to move into
their three-bedroom apartment on
Millennium Tower’s 34th floor in
August, having sold their Millennium Place apartment at a profit
last month, for $1.95 million.
“It’s not uncommon now to see
premium condos going for 30%
higher prices than premium single
family homes—even traditional redbrick townhouse units,” said Javier
Vivas, an economic researcher for
realtor.com. (News Corp, which
owns The Wall Street Journal, also
MILLENNIUM TOWER Carlton Aird and Zena Savage-Aird inspect amenities and a model at the 60-story downtown condo building set to open next month.
They paid $2.975 million for a three-bedroom condominium on the 34th floor, and plan to move in in August.
1 mile
1 km
CAMBRIDGE
7
Downtown
5
4
90
South 3
Back Bay
Fenway
1
2
6
North
End
8
9
Seaport
District
End
BOST O N
93
1 Pierce Boston
2 One Dalton
3 Troy Boston
4 Ava Theater District
5 Millennium Place
6 Millennium Tower
7 One Canal
8 Twenty-Two Liberty
9 Waterside Place
owns realtor.com, the listing website of the National Association of
Realtors.) The starting sales price
for high-rise condominiums in the
top tier of Boston’s luxury market is
now $2.3 million—a 74% increase
over 2012 prices.
Twenty-Two Liberty, a 14-story
waterfront residence in the 21-acre
Fan Pier development on Boston
Harbor, sold out before it opened
its doors last December. Its 120
apartments reached top prices of
over $5 million, according to public
records, and a number of them
have since been combined to form
larger units. “The demand that
we’re catering to is from local buyers who want to downsize from
homes into condominiums that provide them with the convenience of
an urban setting, and amenities,”
said Joseph F. Fallon, whose Fallon
Company developed Fan Pier.
One Dalton, an $800 million, 61story Four Seasons hotel and condominium designed by Harry Cobb,
architect of Boston’s landmark
Hancock Tower, will become the
city’s tallest residential skyscraper
when it opens in the Back Bay in
the summer of 2018.
Priced between $2 million and
$40 million, One Dalton’s 186 condominiums are designed as skyboxes on the city, with floor-to-ceiling glass walls, 11-foot-high ceilings,
and fireplaces. Condo owners will
share the fitness center, pool and
spa with Four Seasons guests; however, owners will be able to enjoy a
cocktail in their private club and
restaurant, or chip golf balls in the
residents-only golf simulator room.
Beyond the Back Bay, new luxury
buildings are helping to reshape
and revitalize long-overlooked areas. Waterside Place, a 20-story
high-rise with 236 rental apartments priced between $2,900 and
$5,700, was built on Port Authority
land in the Seaport District in 2014.
“Twenty years ago, this was not
a place you wanted to walk around
in the dark,” said Dorrie Luck, 47, a
mother of three who traded a large
home in the suburbs for an airy
two-bedroom apartment on the top
floor of Waterside Place last year.
“It’s actually so peaceful—I look out
my window and I see the harbor.”
Residents can grow vegetables
in a garden on the 3rd floor sun
deck, which also has a bocce court
and a summer kitchen. A pop-up
grocery stand sells produce in the
lobby every Wednesday.
Across town, Pierce Boston—
where Mr. Adams bought his condo
apartment—will cap the transformation of the Fenway when it
opens in the summer of 2018, with
two floors of shops and restaurants, 240 rental apartments, and
109 condominiums priced from just
under $1 million to $6 million—30% of which have already
been sold, according to developer
Steve Samuels.
“We used to call Fenway the
hole in the doughnut—it was surrounded by all these great neighborhoods and institutions, but the
Fenway itself was the hole, with
old parking lots and Goodyear and
Burger King,” said Mr. Samuels. He
said his company has spent “a couple of billion dollars” to develop
the Fenway since the late 1990s,
creating apartments, restaurants, a
workspace for innovation companies and a boutique hotel.
Pierce Boston is one of several
new luxury buildings that are actively courting younger residents.
In addition to the Twitter wall in
its lobby, AVA Theater District, a
398-unit luxury rental tower in
downtown Boston, offers multiple
common areas for residents to min-
gle, including a rooftop pavilion.
Troy Boston, which opened last
year in the South End, has its own
Instagram page; residents use an
app for valet dry-cleaning, park
their bikes in a ground floor commuter lot, and hang out in several
indoor and outdoor lounges. Recent events include a cooking demonstration by chef Ming Tsai, a
hip-hop pool party, and catered
“yappy hours” at the dog run.
Rents range from $2,395 to $4,613.
“I work in a very social up-andcoming company, and I got the
same vibe from the Troy—you want
to be an active part of it,” said
Chris Gannon, a 31-year-old director of talent for a tech company,
who moved into a one-bedroom
there in January, paying $3,250.
Baby boomers are getting in on
the act, too. Last month, Tom
Joyce, a longtime lobbyist, moved
his wife, teenage daughter and two
dogs from the suburbs to an 11thfloor penthouse at One Canal, a 12story luxury rental building that
just opened in Boston’s Bulfinch
Triangle neighborhood.
“The rooftop pool is open—the
views are spectacular. There’s an
outdoor theater up there, and
grills,” said Mr. Joyce, 68, who
pays about $7,000 in rent for his
1,400-square foot apartment with
two terraces.
“I’ve lived in a condo that had
amenities like a common area, but
the only people who used it were
lounge lizards,” he said. “This place
seems to be much more inviting.”
The Randall Family
of Companies
Coastal Southern New England Property Specialists
Luxury Property Spotlight
PageTaft.com
$3,995,000 "
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The essence of seclusion on this 4 acre peninsula with 360° water views.
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7 81
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Potato Island-captivating 3871 sq ft
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22' +,
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This sun-drenched home is the
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Timeless 5,312 sq ft custom shingle-style home. Elegantly sited on
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MANSION
Eye Test
CAN YOU TELL THE REAL MATERIAL FROM THE COPYCAT?
SLATE ROOF
B
JESSE NEIDER FOR THE WALL STREET JOURNAL (3)
A
RECLAIMED WOOD
A
B
BACK TO NATURE The Pizzis’ scagolia fireplace surround
has an intricately carved acornand-flower design, above, and
is a focal point in the couple’s
6,500-square-foot, Tuscanstyle home.
MARBLE
A
B
BOXWOOD HEDGES
say engineered materials
can be up to 70% less expensive than the real stuff and
are often more durable and
easier to handle. Some see
fake woodwork and plants
as environmentally advantageous because they don’t involve harvested trees or
need watering. Recent advances in digital-printing
technology and cement casting mean the materials look
more realistic than in the
past, when repetitive patterns and uniform colors
were a dead giveaway. Now,
some purists are warming to
some of these knockoffs,
even in luxury homes.
Susan Pizzi says she can
tell immediately if a material is a copy. “I like to use
the real McCoy,” she says.
The 66-year-old homemaker
oversaw the construction of
the 6,500-square-foot Tuscan-style house and a recent 1,400-square-foot addition that she and her
husband Frank built in
Princeton, N.J. She used authentic materials like limestone and terra cotta flooring and real stucco for the
exterior. But there was one
exception: For the fireplace
in the great room, she
chose scagliola, a technique
popular in grand homes in
the 17th and 18th centuries
in which plaster and silk
are cast and styled to look
like marble.
The golden mantle,
flecked with gray and ivory,
cost $8,000—about the same
price as the antique limestone mantles they were
considering. But buying an
old mantle wouldn’t have allowed them to match colors
and get the intricately
carved acorn-and-flower design they wanted. So instead
of hiring an artisan to custom carve real marble, they
hired a Philadelphia firm
called Wells Vissar to create
the scagliola, which took
about two months to complete and 10 days to install.
The studio’s co-founder
Kathy Vissar, who does the
crafting, says her clients
tend to be very wealthy. “It’s
a faux material that’s more
prestigious than the real material,” she says.
Cost also wasn’t an issue
for Cindy and Mike Newlin
when they decided to put
fake boxwood hedges in the
landscaping at their Houston
home this year. Mrs. Newlin,
an interior designer, and Mr.
Newlin, a retired Houston
Rockets basketball player
who acted as the architect
for their home, had tried
hundreds of different real
plants in an area of the yard
that didn’t get a lot of sun,
only to see them all die.
Then Mrs. Newlin saw a
hedge display made by
Greenville, N.C., New Growth
Advances in digitalprinting technology
and cement casting
mean the materials
look more realistic
than in the past.
Designs and couldn’t believe
they weren’t real. “I’m not
someone who puts plastic
flowers out,” she says.
The fake hedges are made
from polyethylene and synthetic resin and constructed
on frames. They provide instant gratification since they
don’t have to grow, they
don’t need water and they
can be custom made to fit
certain spaces. A 5-foot-long,
2-foot-high boxwood costs
from $450 to $500.
Pam Kuhl-Linscomb, who
with her husband owns a design and décor store in
Houston, sells the New
Growth products because
they don’t have that shiny,
stiff plastic look of other artificial plants. Sales of the
fake boxwoods to her clients
have quadrupled over the
past six months, she adds.
The popularity of barn
wood and reclaimed timbers
has driven up prices for
craggy old ceiling beams and
trusses, which can cost as
much as $100 a linear foot.
Retailers like FauxWoodBeams.com now sell fake
beams that look weathered
and ax-hewn. Steve Barron,
president of the Deer Park,
N.Y.-based company, says the
copycats are made from
high-density polyurethane—
the same material as car
bumpers—that is poured
into molds of real timber. So
the finished product replicates every nook, cranny and
worm hole. “Most people
can’t tell” the difference, Mr.
Barron says.
The faux wood beams and
panels don’t rot, are easier
to handle because they’re
lightweight and they cost
about a third of the price as
real reclaimed timber. An 8foot-long faux rough-hewed
ceiling beam costs $145.61,
and a 10-foot-long lightly
distressed faux driftwood
beam stained in red cherry is
$397.88.
Appraisers say the higher
the price range of the house,
the more important it is to
have the real stuff. Any appearance of a material chosen to cut costs could lower
the appraisal value.
However, they say there
are some faux materials that
increase the value of a home.
For example, imitation slate
requires less maintenance
and is easier to install; fake
cedar shakes are more fireproof than real wood. The
key for home values is what
appraisers call “the bundle.”
As long as the overall impact
is that it looks and feels
high-end it will most likely
be compared with other
high-end homes.
“If the appraiser has to
scratch it and see if it is the
real deal, it is probably OK,”
says Mr. Fries.
Quiz answers. The real materials are: Slate-B, Reclaimed wood-A, Marble-B,
Boxwood hedges-B.
TH E P O W E R OF 3
3 ST U N N I N G B E D R O O MS
3 ICONIC VIEWS
3 I N G E N I O U S E X POSURES
Living Room
24' 3" x 20' 0"
(7.39 m x 6.10 m)
ARCHITECTURE AND INTERIORS
BY FOSTER + PARTNERS
3 BEDROOM A–LINE 2,609 SF
FROM $6.935M
LANDSCAPED MOTOR COURT
PRIVATE PARKING AVAILABLE
FITNESS CENTER
75-FOOT SWIMMING POOL
CHILDREN’S PLAYROOM
Foyer
Dining Room
9' 3" x 10' 0"
(2.82 m x 3.05 m)
17' 0" x 11' 8"
(5.18 m x 3.56 m)
IMMEDIATE DELIVERY
50UNP.COM +1 212 906 0550
Bedroom 3
Kitchen
FAUX IN THE HOME
10' 5" x 14' 1"
(3.17 m x4.29 m)
Bedroom 2
E
S
N
12' 5" x 14' 2"
(3.78 m x 4.32 m)
W
WIC
EXCLUSIVE SALES AND MARKETING AGENT:
ZECKENDORF MARKETING, LLC
THE COMPLETE OFFERING TERMS ARE IN AN OFFERING
PLAN AVAILABLE FROM SPONSOR. FILE NO. CD08-0279.
SPONSOR: G-Z/10 UNP REALTY, LLC, 445 PARK AVENUE,
19TH FLOOR, NEW YORK, NY 10022.
EQUAL HOUSING OPPORTUNITY.
WIC
Master Bedroom
24' 3" x 16' 1"
(7.39 m x 4.9 m)
TEST CLOCKWISE FROM TOP LEFT: SLATE SELECT; JESSE NEIDER FOR THE WALL STREET JOURNAL; SHAWN EVANS; LISA CORSON FOR THE WALL STREET JOURNAL; JULIE BIDWELL FOR THE WALL STREET JOURNAL; JOHN COLE PHOTOGRAPHY AND MARY DOUGLAS DRYSDALE; U.S. MARBLE; CLAUDIO PAPAPIETRO FOR THE WALL STREET JOURNAL
B
Gallery
A
ADVERTISEMENT
NEWPORT, RHODE ISLAND
CHARLESTON, SOUTH CAROLINA
ARDEN, NORTH CAROLINA
“Quail Tree House” Meticulously restored Victorian estate with close
proximity to New York Yacht Club and Ocean Drive. Enjoying a wonderfully
private setting, this classic 6,290 sf gem offers the best of the old and
new with custom chef’s kitchen, and updated systems and baths coupled
with original detail. Great for entertaining with a large porch and terrace,
elegant library, gracious sitting and living room, and formal dining room.
Located in Mt. Pleasant’s Old Village, this stunning & masterfully
preserved historic home (c. 1859) offers sweeping views of the Charleston
Harbor, downtown Charleston and Sullivans Island. Built as the Mt. Pleasant
Lighthouse, it now features a gourmet kitchen, light-filled living room,
expansive back porch, deepwater dock, first-floor master wing & more.
A beautiful townhome in Fairway Commons within The Cliffs at Walnut
Cove, Asheville’s premier golf and wellness community. Mountain views
and mature landscaping affords a buyer a very inviting entrance to this
like-new home. Furniture is available. A $30,000 contribution toward a full
golf membership.
$2,795,000
$3,500,000
$1,495,000
Gustave White Sotheby’s International Realty
The Cassina Group
Jimmy Dye
phone: 401.849.3000
phone: 843.452.6482
GustaveWhite.com
www.200Bank.com
go.CliffsLiving.com/ws
The Cliffs
Dorothy Smith
email: [email protected]
phone: 888.247.3466
[email protected]
ANNA MARIA SOUND, FLORIDA
EAGLE ISLAND, LAKE VERMILION, MINNESOTA
BIG TIMBER, MONTANA
Own it. Enjoy it. Rent it. Just moments from the world-famous beaches
of Anna Maria Island, Marina Walk offers you all the luxuries of the awardwinning Harbour Isle lifestyle with the option to place your waterfront Resort
Home with our preferred rental agency for short term rentals. Don’t miss your
chance to own a vacation home that can work for you year round!
Five-acre private island in vast northwoods lake. Unique 4,500+ sq.ft.
home, beautifully finished, furnished, and professionally decorated in 2016.
Watch nesting bald eagles from the elevator-accessed observation deck,
enjoy 60+ sq. miles of pristine water. Five minutes to marina, membership
with boat/RV storage included. 55 miles to commercial airport.
270 Acres– 3 Bedroom, 3 bath house in pristine, private valley. A
spectacular location– East of Bozeman MT near the Yellowstone River, Gallatin
National Forest and 11,000 foot Rocky Mountains. Barn, three car garage,
wildlife, vistas, springs, 3/4 mile private entry road! A rare offering in this
protected big-ranch neighborhood. Come see the real Montana. Located on
scenic Big Timber Canyon Road.
From the $500’s
$2,600,000
$850,000
mintofla.com
www.eagleislandmn.com
www.MileHighMontana.com
Minto Communities
DF & Company
Jim Ertz, Broker
E. H. Clement, Owner
phone: 866.713.1319
phone: 651.242.5814, 651.253.5568 email: [email protected]
phone: 704.975.0205
DARIEN, CONNECTICUT
NEWPORT, RHODE ISLAND
JOHN’S ISLAND – VERO BEACH, FLORIDA
Magnificent 7 Acre Waterfront Estate. One of the largest waterfront
properties in Darien, the 11-room estate sits on a 7.1 acre island.
The 8,300 sq. ft. home has 5 en-suite bedrooms, 8 bathrooms, and great
room with 12 ft. ceilings. 10 sets of french doors lead to a flagstone terrace
and sweeping lawns. Includes a dock, pool/spa, and outdoor shower.
“Ocean Lawn” – OCEANFRONT The former Firestone estate situated on
6.7 acres with access to Cliff Walk and 515’ of ocean frontage. Circa 1889
mansion designed by Peabody & Stearns. Park-like grounds designed by
Innocenti & Webel. Children’s playhouse, ocean-facing pool, garages and 3
gated entries within private compound. Short walk to town.
This established, private, Atlantic coastal community offers 3 miles
of pristine beaches, 3 championship golf courses, 17 Har-tru courts, squash,
pickleball, oceanfront Beach Club & more! A private airport & cultural
amenities are minutes away. Renovated 4BR retreat with pool, offering lake
views, a gourmet island kitchen, den, new spa and two single-car garages.
$17,500,000
$18,500,000
$2,450,000
www.20JuniperRoad.com
http://liladel.re/OceanLawn
www.JohnsIslandRealEstate.com
William Pitt Sotheby’s International Realty
Kim Huffard, Owner/Agent
Lila Delman Real Estate International
John’s Island Real Estate Company
phone: 203.858.6033
phone: 401.284.4820
phone: 772.231.0900
[email protected]
[email protected]
e: [email protected]
KIAWAH ISLAND, SOUTH CAROLINA
NAPLES, FLORIDA
SARASOTA, FLORIDA
Stunning views of the Atlantic, Pete Dye’s Ocean Course, golden marsh,
and ribboning rivers envelop 35 Ocean Course Drive’s shimmering pool,
wraparound porch, and open air entertaining space. Impeccable interior
has Caribbean walnut floors, gourmet kitchen, grand master suite, elevator,
fireplaces, tall windows, porches, and Golf Membership available.
Minto Single-Family Estate Homes located in an area famous for
extraordinary golf communities. TwinEagles boasts not just one championship
course awarded “Best New Private Course in America” by Golf Magazine, but
two 18-hole, tour-quality courses and a spectacular 47,000 sq. ft. country
club lavished with every imaginable amenity. Best of all, golf membership
initiation fee is included with every Minto new home purchase.
Award-winning coastal condominium residence on the private
Golden Gate Point peninsula. Seamless indoor/outdoor open-concept living
with retractable wall to stunning 575sf balcony overlooking Sarasota Bay.
Ultra-luxury construction. In-suite elevator. Bayfront pool. Private boat slip. 3
bedrooms & 3.5 baths. Up to 3,034sf. Immediate occupancy. Move in now!
$5,250,000.00
From the mid $500s to over $1 million
Starting from $2,399,000
kiawahisland.com/real-estate
mintofla.com
www.one88residences.com
Kiawah Island Real Estate
Minto Communities
VANDYK group of companies
Karin Silver & Moriah Taliaferro
phone: 866-542-9243
phone: 888.379.9868
phone: 941.806.7324
[email protected]
To Advertise Call: +44 (0) 207-572-2124
[email protected] [email protected]
MANSION
HOUSE CALL | BROOKE SHIELDS
A Model and Her Mom Against the World
The actress recalls growing up with ‘Teri Terrific,’ her protective, impulsive mother; a box marked ‘Calvins’
My mother, Teri, wasn’t a starcrazed enabler who put me at
risk to advance her own ambitions. She created a bubble for
me and worked hard to keep what
was truly negative about the
modeling and movie business
from being in my life.
Everybody left my mother. Her
father died when she was 9 and
her mother never gave her anything. My mother was engaged in
the 1950s, but her fiancé was
killed crossing Third Avenue after parking his car.
When she was with my father,
Frank, she convinced herself that
she wasn’t good enough for him
and that he was going to leave her,
too. So she left him first—divorcing when I was a few months old.
After I arrived, my mother
wanted to create a world in which
she’d never be left again. I don’t
know if she would have lasted very
long had she not had me.
My mother and I lived first on
New York’s East 52nd Street, but
the home I remember most is our
small two-bedroom apartment at
345 E. 73rd Street, between First
and Second avenues. We moved
there in 1969, when I was 4. It felt
so secure and safe.
My mom designed the furnishings in my bedroom—my sheets
matched the curtains and the nightgown she sewed for my doll. There
were a lot of floral prints—mostly
pink, yellow and green chintz.
I think my mother was driven
on my behalf by an intense love
that she never felt for or from her
own mother. She was passionate
about movies and the entertainment industry. Together, we had a
shot and she funneled her energy
into having confidence in me.
Artists like Andy Warhol and
fashion photographers like Bruce
Weber loved her. She was a character—“Teri Terrific.” She was
charismatic and loved being
larger than life.
As my career took off in the
1980s, my mother fell in love
with real estate. It was an extension of her fantasy. At one point
we had the New York apartment
plus houses in Los Angeles and
New Jersey, a ranch in Montana,
a house on Emerald Island in the
Adirondack Mountains, a townhouse on East 62nd Street and an
office. We were property rich and
cash poor. It was ridiculous.
What’s worse, we never spent
much time in most of those
BRAD TRENT FOR THE WALL STREET JOURNAL; BROOKE SHIELDS (HISTORICAL)
After my mother died in 2012, I was finally
able to look back clearly at our life together
and understand her demons and her love. I’ve
acknowledged the struggle she had with alcohol and what I went through to take care of
her. Now I appreciate how fierce and protective she was. She was my mom.
CAREER GIRL Brooke Shields in the Manhattan townhouse, above, she shares
with her husband, Chris, and two daughters. Above left, Ms. Shields dressed as
a princess ballerina at her home on 73rd Street in the early 1970s.
PRIVATE PROPERTIES | CANDACE TAYLOR
BESPOKE REAL ESTATE (2)
Entertainment Mogul David Geffen
Sells in New York’s East Hampton
Months after purchasing a
nearby oceanfront property, entertainment mogul David Geffen
has sold his 5½-acre East
Hampton estate for $67.3 million, according to people with
knowledge of the transaction.
The Georgica Pond estate,
right, wasn’t officially on the
market, these people said. Mr.
Geffen had planned to renovate
the compound, but instead purchased the nearby property for
$70 million last March, they
added. Mr. Geffen couldn’t be
reached for comment.
Mr. Geffen bought the estate
in 2014 for about $50 million
from Courtney Sale Ross,
widow of Steven J. Ross, former chairman of Time Warner.
With a dock on Georgica Pond,
the estate includes a sevenbedroom main house measuring about 7,500 square feet, an
outdoor swimming pool overlooking the pond and a threebedroom guesthouse.
According to the people with
knowledge of the transaction,
the new owners are aiming to
flip three of the four East
Hampton parcels that make up
the estate. The 1.6-acre lot that
includes the house and swimming pool, plus two other vacant lots, will go on the market
for $55 million with Zachary
and Cody Vichinsky of Water
Mill-based Bespoke Real Estate.
The properties can be purchased together or separately.
The fourth lot, which contains
the guesthouse, isn't for sale,
these people said.
Co-founder of the entertainment company DreamWorks SKG, Mr. Geffen in
2012 paid $54 million for a
penthouse on the Upper East
Side of Manhattan.
houses. She just loved the daydream of it all, and I fell into the
excitement. We’d buy properties
fully furnished, and the houses
would stay that way until we
moved out.
My mother also didn’t always
make the best choices regarding
my image. On the one hand I was
viewed as provocative and on the
other I was America’s sweetheart.
It was a mixed message that confused me in later years.
Today, my husband, Chris, and I
live with our two daughters in a
townhouse in New York’s West Village. It needed a top-to-bottom
renovation when we bought it in
2009. The renovation took three
years. We’re happy there. All the
fireplace mantels in the house are
reclaimed, including a few from
New York’s Plaza Hotel, before its
most recent renovation. I like a
house with character—a place with
history, soul and irregularities.
In 2011, after my mother developed Alzheimer’s, I began to
go through her stuff in her hangar-sized storage unit. I came
across a box labeled “Calvins.”
Inside were two pairs of jeans
she had saved from my 1981 Calvin Klein ad campaign. Naturally,
I had to try on a pair. They were
a little tight, but I managed to
get them zipped up. It wasn’t
pretty but I was determined. I
got on the floor to mimic my ad
and thought, “Wow, I still fit into
them.” I gave one pair to the
Metropolitan Museum of Art’s
costume collection. The other
pair I kept.
—As told to Marc Myers
Actress and model Brooke Shields,
51, has appeared in more than 40
films. She stars in “Flower Shop
Mystery: Dearly Depotted,” which
airs June 26 on the Hallmark Movies & Mysteries channel.
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Britons Get Their Say on EU

Transcription

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