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Trump, Congress Face Crowded Agenda, Controversy on Return Trump

What’s Is Sued
News In CFPB
Business & Finance

T he number of people
visiting U.S. stores on
Thanksgiving and Black BY YUKA HAYASHI
Friday fell 4% from last
year, while online pur- WASHINGTON—An Obama-
chases increased 18%. A1 era official at the Consumer Fi-
nancial Protection Bureau sued
 Meredith has agreed
the Trump administration Sun-
to pay $18.50 a share in
day night to block the installa-
cash for Time, valuing
tion of budget director Mick
the fabled New York pub-
Mulvaney from taking control
lisher at $1.85 billion, in
of the agency.
a bet on the future of the

Leandra English, a career

magazine industry. B1
staffer appointed to lead the
 Trump and his pick for CFPB by its former director

acting director of the Richard Cordray, filed the law-


CFPB were sued by an ap- suit in federal court the night

pointee of the agency’s de- before the bureau was set to
parting chief, who sought reopen with dueling temporary
to block the president. A1 leaders vying to take it over. In
doing so, she touched off a le-
 Loan growth at banks is
gal fight that will trigger court
slowing, defying expecta-
interpretations on how differ-
tions of a banner year for fi-
FAST TRACK: President Donald Trump, departing Florida on Sunday, top, and Congress are dealing with issues ranging from the tax ent statutes regarding succes-
nancial institutions after last
overhaul to charges of sexual harassment on Capitol Hill. House Minority Leader Nancy Pelosi, bottom center, declined to say whether sion apply to the unusual
November’s elections. A1
Rep. John Conyers, left, should resign. Senate Majority Leader Mitch McConnell, right, could bring the tax proposal to a vote this week. A4 struggle over control of a fed-
 Powell is likely to sail eral agency.
through confirmation as President Donald Trump as-
Fed chairman with less serts he has the power to ap-

Black Friday Crowds Thin

partisan wrangling than point an acting director, while
previous nominees. A2 the departing chief believed
the law says otherwise.
 SoftBank is expected to
Last-minute maneuvering by
proceed with an offer to
Mr. Cordray means that come
buy billions of dollars
worth of shares from As more holiday sales stores on Thanksgiving and The number of people visit- console, the Super NES Classic, Monday morning, two different
Black Friday while online pur- ing U.S. stores on Thanksgiving which has been in short supply officials have a claim on the
Uber’s stakeholders. B1 shift online, retailers chases continued to surge. and Black Friday fell 4% from since it was released in Sep- acting top job: Mr. Mulvaney,
 Ford CEO Hackett wants use new tactics, play On Thanksgiving evening, last year, according to RetailN- tember. who also serves as head of the
to focus on electric and driv- Alex and Yanira Garcia, who say ext Inc., which analyzes in-store Wal-Mart also calibrated the Office of Management and
erless cars, but the auto to their strengths they traditionally buy nearly videos to count shoppers. selection of discounted prod- Budget, and Ms. English.
maker’s efforts are being everything on Amazon, chose Meanwhile, online sales in- ucts it offers online versus in The lawsuit, filed at the U.S.
hurt by safety-recall costs. B3 BY SARAH NASSAUER to stand in line at a busy Wal- creased 18% over that period, stores, U.S. CEO Greg Foran District Court for the District
AND LAURA STEVENS Mart store in Westbury, N.Y., to said software company Adobe said in an interview. of Columbia, escalates the con-
World-Wide purchase pajamas, toys, a TV Systems Inc., a shift that is Online, the retailer offered frontation between the White
Wal-Mart Stores Inc. and and other gifts that filled two forcing traditional retailers to more electronics and bulky toys House and the Obama-era lead- Inc. battled to shopping carts. adopt new tactics. that customers want shipped to ership of the CFPB, an inde-
 Trump reiterated his capture spending over the holi- “I heard that lots of stores Best Buy Co. chose to hold homes, then stocked stores pendent agency created after
stance that the election of day weekend, as the shifts that are giving you deals so you back some deals from its web- with additional lower-priced the financial crisis.
Democrat Doug Jones to have upended the retail indus- come in the store,” said Mr. site. On Saturday morning, the deals like $5 DVDs, pajamas Ms. English, a former chief
the Senate would mark a try this year were on display: Garcia, a 39-year-old cook at an retailer started selling only in and other items customers pre- of staff, was appointed by Mr.
serious blow to the Repub- fewer people visited traditional elementary school. stores a retro Nintendo game Please see STORES page A2 Please see CFPB page A4
lican agenda. A4
 Lawmakers are working
OPEC Nears Deal to Extend Cuts
to accomplish a dizzying
list of tasks before the year
ends, including a tax over-
haul and a new federal
Loan Growth Hits a Rut OPEC and other major oil producers are expected to strike an
agreement this week to extend supply cuts. Some producers and
BY CHRISTINA REXRODE ness lending, an important vestment is rising. analysts caution a deal could cause prices to soar. B2
spending agreement. A4
source of revenues for banks Tepid rates of loan growth
Total oil inventories in OECD countries
 Pakistan’s law minister Loan growth at banks is in recent years, plumbed its along with continued low long-
resigned in a deal with Isla- slowing, casting a cloud over lowest level since the first term interest rates have taken compared with their five-year averages
mists to end a three-week what was supposed to have quarter of 2011. some of the sizzle out of bank 400 million barrels
demonstration that has been a banner year for finan- While loan balances are still stocks. Financial shares were
shaken the government. A5 cial institutions following last rising, the slowing rate of among the chief beneficiaries 300 ABOVE
November’s elections. growth has defied the expecta- of last November’s election sur- AVERAGE
 Rep. Conyers said he
The rate of 12-month loan tions of bankers. Many have prise, soaring on hopes of a 200
would leave his committee
growth at U.S. banks in the spent the year looking for tax-code overhaul, lighter regu-
leadership post while an
third quarter hit its lowest growth-reviving catalysts that lation and stronger economic 100
ethics panel investigates
level since the end of 2013, ac- never came and remain puz- growth. With progress in these
allegations of sexual ha-
cording to data released last zled by the slowdown. areas uneven during 2017, gains
rassment against him. A4 0
week by the Federal Deposit Even more surprising is are more muted.
 Venezuela’s Maduro Insurance Corp. That marked that falling rates of loan The KBW Nasdaq Bank In-
named an active general to the sixth consecutive quarter growth are occurring as many dex, a measure of 24 of the –100 BELOW
lead the state oil company, of decline for this measure of signals point to a more buoy- largest commercial banks, is AVERAGE
further empowering the loan growth. ant U.S. economy. Unemploy- up about 8% since the start of –200
country’s military. A9 Growth in each of the four ment continues to decline, the year, about half the rise of 2014 ’15 ’16 ’17
major lending categories mea- gross domestic product the S&P 500. Source: International Energy Agency THE WALL STREET JOURNAL.
 The damage from the
sured by the FDIC fell. Nota- growth came in at 3% in the “There was such enthusi-
Northern California wild-
bly, the growth rate for busi- third quarter and business in- Please see LOANS page A6
fires is revealing the state’s
complex housing crisis. A3
 A looming U.S. sanc-
U.S. Mint Makes a Mint Selling
tions trial that could im-
plicate prominent Turkish
officials is inflaming ten-
Gold Coins at a 25% Markup A Self-Made Star Shows One
sions between Washing-
ton and Ankara. A7
i i i

‘Proof condition’ collectibles don’t shine

Way to Crack the Gen Z Code
Journal Report as investments in retirement accounts
An entrepreneur
with autism finds BY MICHAEL ROTHFELD sheathed in plastic and never
Advertisers are flocking to Liza Koshy, a 21-year-old YouTube celebrity
his own path. Small touched by human hands. Last
Business, R1-8 The U.S. Mint makes a pretty year, sales totaled $112 million. BY JOHN JURGENSEN The intersection of old and new media was
penny selling gold and silver The government currently is a nod to one of the biggest challenges facing
coins. But there are two sides to selling the gold-coin proofs at a A recent video by 21-year-old YouTube star entertainment companies and marketers: The
CONTENTS Markets............. B10-11 the deal, which 25% markup over Liza Koshy had her in mustache and wig to Gen Z audience, which watches video from a
Business News...... B3 Opinion.............. A15-17
Crossword.............. A14 Sports....................... A14 some investors are per-ounce gold play a favorite character, the heavily accented wide variety of online platforms and which of-
Heard on Street.. B11 Technology............... B4 calling highway rob- prices, a premium Jet Packinski. She deadpanned silly answers ten embraces self-made stars, is tough to cap-
Journal Report.. R1-8 U.S. News............. A2-4 bery. that can run as high to questions like “Favorite type of flower?” ture.
Keywords................... B1 Weather................... A14
Life & Arts....... A11-13 World News....... A5-9
After years of as $360 per coin. (“Gluten free”) and “How would you describe The generation—young people born after
making pennies and The silver coins yourself?” (“Using adjectives”). about 1996—favors irreverent, DIY stars seen
nickels that cost carry a more than It was a parody of Vogue magazine’s 73 as “authentic,” who produce bite-size content,
> more to produce 200% premium over Questions video series with celebrities. Ms. sometimes daily, tailored to social-media and
than they are worth, market silver prices. Koshy’s parody has notched 18 million other outlets.
the Treasury De- Gold proof coin That might be views—even more than the 16 million views They were raised on smartphones, and no
partment is making well worth it for racked up by a real Vogue episode with pop single app or social media platform—Snap-
s Copyright 2017 Dow Jones &
a mint off a line of pricey Amer- coin collectors and hoarders— music superstar Taylor Swift. This month, chat, Instagram,—monopolizes
Company. All Rights Reserved ican Eagle coins in what is or for stashing in a post-apoca- Vogue released a real 73 Questions with the their time. When it comes to entertainment
known as proof condition— Please see COINS page A10 comedian. Please see STAR page A10
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or
A2 | Monday, November 27, 2017 THE WALL STREET JOURNAL.

THE OUTLOOK | By Nick Timiraos

Fed Plan for 2017 Nears Completion CALENDAR

TUESDAY: On Capitol Hill, the
Senate Banking Committee holds
Federal Re- weakness has proved more quickly, leading to an unsus- a confirmation hearing for Jerome
serve officials widespread and stubborn. Mixed Signals tainable rise in prices that Powell, the man nominated by
are preparing Many economists, including Financial conditions have eased this year, despite moves by the Fed forces the Fed to raise rates at President Donald Trump to serve
to raise inter- Fed Chairwoman Janet Yellen, to remove support from the economy, and remain looser than the a fast clip, triggering a reces- as the next chairman of the Fed-
est rates in De- have long trusted in the historical average given current growth and inflation. sion. “We don’t want a boom- eral Reserve. His nomination isn’t
cember, allow- framework advanced by the bust policy,” Ms. Yellen said in expected to encounter much resis-
ing them to accomplish economist A.W. Phillips, who Chicago Fed Adjusted National Financial Conditions Index New York last week. tance in the Senate, but the hear-
something that eluded them in in 1958 hypothesized employ- –0.2 The second risk is inflation ing could offer insight on how he
each of the past two years: ers would bid up wages when doesn’t respond as expected would run the central bank.
They will have delivered on workers grew scarce and hold –0.4 but the Fed keeps raising rates WEDNESDAY: The Joint Eco-
their projections at the start wages steady when workers –0.6 because unemployment falls nomic Committee of Congress
of the year, which for 2017 were abundant. lower. This could push infla- hosts Fed Chairwoman Janet
showed three rate increases –0.8 tion even lower still and hold Yellen to discuss the economic

plus the start of the shrinking oday, wages and prices Fed rate Balance sheet back the economy. Persistently outlook.
of their large bond portfolio. haven’t moved as the hikes normalization low inflation in the end would The U.S. Commerce Depart-
Whether officials can pull framework would sug- –1.2 force the Fed to cease any rate ment releases its second estimate
off a repeat performance by gest, raising questions over 2013 ’14 ’15 ’16 ’17 increase campaign and could for third-quarter economic growth.
sticking to their road map of whether the labor market leave it with little room to ma- Economists surveyed by The Wall
gradual rate increases again might have more slack or if Inflation has slowed in 2017 and continues to underperform the Fed's neuver should another reces- Street Journal expect gross do-
next year is clouded by con- something more permanent is projections of reaching the 2% target over the medium term. sion hit. mestic product grew at a 3.3%
flicting signals on two items holding inflation back. Personal Consumption Expenditures price index, annual The third risk is the econ- annual rate last quarter, following
that matter most to the cen- “We’re not seeing quite omy avoids an inflation run-up a 3.1% rate in the second. That
tral bank: employment and in- what we’re expecting to see,” 2.5% but rising asset values and low represents the best six-month
flation. said New York Fed President 2.0
Fed target market volatility fuel financial stretch of growth in three years.
Steady job gains have William Dudley this month. Core inflation imbalances. The last two ex- THURSDAY: The U.S. Com-
dropped the unemployment “That creates a bit of uncer- 1.5 pansions ended this way, with merce Department releases infla-
rate to lower-than-expected tainty about the best course the tech-stock bubble of 2000 tion data for October. Septem-
levels, at 4.1% in October, a 17- going forward.” and the housing-market col- ber’s reading showed prices were
year low. If the unemployment Most Fed officials expect 0.5 Overall inflation lapse of 2007. up 1.6% from the previous year,
rate drops next year as much once the jobless rate falls low short of the Fed’s 2% target.

as it did this year—a 0.7 per- enough, price pressures will 0.0 s. Yellen’s nominated Figures from the European
centage point slide—it would re-emerge. No one is quite 2012 ’13 ’14 ’15 ’16 ’17 successor, Fed gover- Union’s statistics agency are ex-
plumb lows not seen since the sure what that exact level is, Source: Chicago Fed (financial conditions); nor Jerome Powell, pected to show unemployment
late 1960s. but each decline in the unem- Commerce Department (inflation) THE WALL STREET JOURNAL. might try to use regulatory nudged down again in October.
Yet inflation has been puz- ployment rate brings the econ- tools to fight an asset price Data on consumer prices during
zlingly soft. After nosing omy a little closer to it. Mr. as sustainable, around 4.6%. little in order to hold the un- boom. But such tools have had November are expected to show
above the Fed’s 2% target for Dudley said low inflation isn’t Last December, Fed officials employment rate steady, at mixed results in other coun- inflation edged up to 1.5% from
the first time in five years at all bad because it means the projected the unemployment around 4%, with inflation tries, and Republicans want 1.4% in October, still below the
the start of 2017, it slowed un- economy might be able to sus- rate would end this year slowly returning to its 2% tar- Mr. Powell to lighten the regu- target of just under 2%.
expectedly and hasn’t yet re- tain a lower jobless rate. within a range of 4.4% to 4.7%. get. Tight labor markets latory load. He might instead FRIDAY: Inflation data from
bounded. Excluding volatile The Fed has held its bench- In September, the projection would continue to boost be pressed toward fighting an Japan are likely to reflect further
food and energy categories, mark federal-funds rate in a had edged down to a range of wages while encouraging em- asset price boom with higher baby steps toward strengthening
the Fed’s preferred inflation range between 1% and 1.25% 4.2% to 4.5%. Economists at ployers to pull workers out of interest rates. price growth (release time is
gauge rose just 1.3% from a since lifting it in June. Goldman Sachs expect the un- the shadows of the labor mar- Mr. Powell’s confirmation Thursday in the U.S.). October fig-
year earlier in September. The economy is still adding employment rate to keep fall- ket and to provide more non- hearing on Tuesday before a ures are expected to show the
At first, officials believed a more than enough jobs to ing, to 3.7% by the end of 2018 wage benefits, such as worker Senate panel could offer early core consumer-price index rising
few idiosyncratic price de- keep up with the growth of and 3.5% by the end of 2019. training. insight into how he will ap- by 0.8% from a year earlier, com-
clines, such as wireless phone the working-age population, For the Fed, the ideal sce- Three risks loom. proach the coming year of dif- pared with September’s 0.7% gain,
plans and prescription drugs, and the unemployment rate is nario would look something The first is the unemploy- ficult trade-offs and even though that still leaves Japan far
were to blame, though the now below levels officials view like this: job growth slows a ment rate drops too low, too harder choices. from its 2% inflation goal.

Fewer Pitfalls Are Seen for Powell in Confirmation

BY JOSH ZUMBRUN crat Chris Dodd, slow-walked Bush’s presidency, combined 2011, of nominating a Republi- holding a slight edge in the
the nominations ahead of the with other term expirations, can and a Democrat to the Fed Senate, they appeared headed
Jerome Powell is likely to sail 2008 presidential election, meant that by 2010, President board, hoping the package for defeat.
through confirmation as Federal which Democrats appeared in- Barack Obama had three Fed could win approval. It took an improbable event
Reserve Board chairman, even creasingly likely to win as the openings to fill at once. He nom- The White House initially to break the impasse. J.P. Mor-
though the process has grown economy deteriorated. The new inated San Francisco Fed Presi- wanted to nominate Jeremy gan Chase & Co. lost nearly $2
increasingly politicized since the president could fill any open Fed dent Janet Yellen for Fed vice Stein, a Harvard economist and billion when a London trader’s
days when Ben Bernanke was board slots. chairwoman, plus Sarah Bloom Democrat, to one seat and Rich- bet went sour. The loss sparked
confirmed as Fed chief in 2006 While the committee allowed Raskin—a Maryland state bank- ard Clarida, a Republican econ- an uproar about oversight of
by a voice vote with little oppo- Ms. Duke’s nomination to ad- ing regulator—and Massachu- omist and adviser to Pacific In- banks. Senate Majority Leader
sition. vance, it never voted on Mr. setts Institute of Technology vestment Management Co., or Harry Reid (D., Nev.) leveraged
Mr. Powell, now a Fed gover- Klane’s. It also declined to ap- economics professor Peter Dia- Pimco, to the second. the moment to advance Messrs.

nor, heads into his confirmation prove another term for Fed gov- mond for governors. Mr. Clarida pulled out. About Powell and Stein.
hearing Tuesday before the Sen- ernor Randall Kroszner, a Bush Both women won Senate con- the same time, Treasury Secre- In May 2012, Mr. Powell was
ate Banking Committee having nominee. firmation. As a regional Fed tary Timothy Geithner learned approved, 74-21. Twenty-five
garnered support from Republi- The Fed’s responses to the fi- bank president and former Fed that Mr. Powell, a Republican Republicans voted for him, but
cans and Democrats. It isn’t the nancial crisis, including its res- governor, Ms. Yellen had solid who had served in President 20 voted no, along with an in-
first time he has been a Fed can- cues of several big financial central-bank experience. Ms. George H.W. Bush’s Treasury dependent. Mr. Stein was also
didate who offered the path of firms, attracted political fire Bloom Raskin’s background as a Department, had been challeng- confirmed, on a 70-24 vote.
least resistance. from both parties. When Mr. bank regulator was newly rele- ing members of his own party Less than two years later,
The recent wrangling started Bernanke was appointed for a vant after the financial crisis. not to play games with the U.S. Mr. Powell’s term expired. Mr.
in 2007, when President George second term in 2010, he was op- Mr. Diamond ended up the Jerome Powell debt ceiling. Obama nominated him for a
W. Bush nominated two bankers, posed by 30 senators—18 Re- odd person out. Sen. Richard Thus Mr. Powell was nomi- second term, as part of a pack-
Larry Klane and Elizabeth Duke, publicans, 11 Democrats and an Shelby (R., Ala.), then the rank- lier rejections of Messrs. Klane nated to the Fed alongside Mr. age with two other Fed board
to the Fed board of governors. independent—in the Demo- ing minority member of the and Kroszner. Stein in late 2011. But in May candidates. Mr. Powell was con-
The Senate Banking Committee, cratic-controlled Senate. banking committee, led the op- The Obama White House hit 2012, with a presidential elec- firmed with 67 yeses by a Sen-
then led by Connecticut Demo- The vacancies left from Mr. position, smarting over the ear- upon the idea, in the summer of tion nearing and Democrats ate with a Democratic majority.

STORES area mall on Thanksgiving with
just one shopping bag. The duo
have made going to the mall on
Thanksgiving night a tradition,
that tracks its prices, Mr. Hari-
haran said. Amazon often kicks
price-tracking technology off
its site to prioritize customers
Continued from Page One even though both do nearly all when traffic surges. An Amazon
fer buying immediately or are of their shopping year-round spokeswoman said the com- Hewlett Packard Enterprise
unprofitable to ship, Mr. Foran on Amazon and Google Express. pany hadn’t made changes to Co. named Antonio Neri presi-
said. “Going to the mall is very its practices regarding price- dent in June. A Business & Fi-
THANK YOURSELF In stores, “is [Black Friday] rare for us now,” Ms. Rao said. tracking bots. nance article on Wednesday in-
the mayhem that it might have In-store sales still account Amazon also tried to create correctly said the move

been eight or 10 years ago?” for about 90% of retail pur- some holiday store frenzy. Af- occurred in July.
Mr. Foran said on Thanksgiv- chases, according to the U.S. ter purchasing grocer Whole
ing. “I think that world is Census Bureau, but the balance Foods earlier this year, Amazon Readers can alert The Wall Street
Journal to any errors in news articles
gone.” is shifting fast. Adobe said $7.9 offered a discount on turkeys, by emailing or
ShopperTrak, another firm billion worth of merchandise plus an extra markdown for by calling 888-410-2667.
that measures foot traffic to members of Prime. The online
traditional stores, found that giant also used more than 100
visits declined a combined 1.6%
on Thanksgiving and Black Fri-
In-store sales still of its 470 Whole Foods stores
to sell its discounted gadgets. (USPS 664-880)

ARE UP TO day from a year earlier. While account for about Amazon has an advantage as
(Eastern Edition ISSN 0099-9660)
(Central Edition ISSN 1092-0935)
most big chains still opened on
90% of retail online sales rise. More than (Western Edition ISSN 0193-2241)

Editorial and publication headquarters:
Thanksgiving evening, some re- 50% of online product searches
1211 Avenue of the Americas,
tailers adjusted their hours af- start with the site. It also com- New York, N.Y. 10036
ter discovering that the extra manded an average of about 42 Published daily except Sundays and general
legal holidays. Periodicals postage paid at
hours didn’t necessarily lift cents of every dollar spent on-
* overall holiday sales. Target line through October, compared
New York, N.Y., and other mailing offices.
Corp. closed its stores from was purchased online on Thurs- with nearly 2 cents at Wal- Send address changes to The Wall Street
Journal, 200 Burnett Rd., Chicopee, MA 01020.
midnight Thanksgiving until re- day and Friday, and expects Cy- Mart, according to Slice Intelli- All Advertising published in The Wall Street
opening at 6 a.m. on Black Fri- ber Monday to be the largest gence, which tracks a panel of Journal is subject to the applicable rate card,
copies of which are available from the
day. online shopping day in history, more than 5 million U.S. shop- Advertising Services Department, Dow Jones
Rosa Hilburn, 58, was among with sales up nearly 17% to $6.6 pers. & Co. Inc., 1211 Avenue of the Americas, New
the first people inside a Target billion. Madison Lennon of Virginia York, N.Y. 10036. The Journal reserves the right
not to accept an advertiser’s order. Only
in Houston on Black Friday Wal-Mart has added tens of Beach, Va., headed to her publication of an advertisement shall constitute
morning, but she was in and millions of products to its web- nearby Wal-Mart on Friday af- final acceptance of the advertiser’s order.
out in minutes with only a site over the past year, so head- ternoon to load up on DVDs Letters to the Editor:
Fax: 212-416-2891; email:
CHICAGO BOSTON L AS VEGAS PHILADELPHIA S E AT T L E small bag of loot—several ing into the holiday shopping from the discount bins. But
F O R I N S I D E R FA S H I O N A C C E S S : T H E W I N D O W. B A R N E Y S . C O M shirts and a Garth Brooks al- period around 75% of the most first the 24-year-old, who NEED ASSISTANCE WITH
bum for her husband. frequently purchased toys were works at a movie theater, YOUR SUBSCRIPTION?
Ms. Hilburn said she was on, the highest checked Amazon’s prices. By web:;
“really shocked” there weren’t percentage of a traditional re- Most were priced similarly By email:
By phone: 1-800-JOURNAL (1-800-568-7625);
more people at the store but tailer, said Guru Hariharan, or weren’t available, she said. Or by live chat at
attributed it to the changing chief executive of Boomerang, So she decided to head to Wal-
times. “Most people do it on- an e-commerce performance Mart to “see if they have them REPRINTS & LICENSING
line now like the millennials,” firm that studies pricing and for a cheaper deal,” she said.
By email:
she said. “But I still like to see other metrics. “And if not, I’ll come home and By phone: 1-800-843-0008
and touch things.” Meanwhile, Amazon made it buy it on Amazon.”
*Up to 40 percent off regular prices on select clothing, shoes, and Al Rao, 44, and her sister-in- harder for other retailers to —Miguel Bustillo
accessories for women, men, and children, as well as gifts for the home. GOT A TIP FOR US?
Specific exclusions apply. See store associate for details.
law Sunanda Dugar, 43, were match its prices, more fre- and Julie Jargon SUBMIT IT AT WSJ.COM/TIPS
walking through a Los Angeles- quently blocking technology contributed to this article.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or
THE WALL STREET JOURNAL. Monday, November 27, 2017 | A3


©T&CO. 2017

Chimneys remain standing in the Coffey Park neighborhood of Santa Rosa, Calif., on Nov. 13, a month after wildfires swept through. THE NEW HOME & ACCESSORIES

Roadblocks to Rebuilding
Wildfires have laid
Construction Crisis Economies of Scale Rosa, the aim is to get groups
bare how difficult it is The number of homes destroyed of homeowners to agree to a 800 843 3269 TIFFANY.COM

to erect houses in in Northern California's wildfires

Key to Comeback limited number of home de-

in October is far greater than the signs so a developer can start

Northern California annual pace of construction in building several houses at once.
parts of the area. Across California’s wine “Economies of scale in re-
BY CHRIS KIRKHAM country, a basic challenge to building are very important,”
AND NOUR MALAS 4,000 rebuilding in the aftermath of said Hugh Futrell, a Santa
Homes the area’s wildfires is finding Rosa builder who lost his
For Damian Clopton, the destroyed people to do the work. home and is working with
initial shock of losing his in October
There are 15% fewer con- banks, contractors and builders M Y L A G O S M Y W AY
home in last month’s Northern struction workers in Napa and to rebuild more quickly. “To
California firestorm is begin- 2,000 Residential Sonoma counties today than in build 10 houses in a neighbor-
ning to wear off and a hard re- building the mid-2000s, according to hood like Coffey Park, scat-
ality is setting in: Insurance permits Labor Department data, even tered across 10 different
won’t be enough to rebuild his 1,000 in 2016 as the population and housing blocks, is not going to attract a
burned-down house, and there demand have increased. Con- contractor to do the job.”
are no clear answers on how struction costs have soared in The way insurance is paid
to fill the gap. 0 recent years as a result. complicates the process, be-
“I’m not going to get my Santa Rosa Sonoma Napa Ad hoc groups are coming cause each homeowner may
house back,” Mr. Clopton said. city County County together across damaged be on a different timeline.
“I’m going to get something Sources: Trulia (permits); state and local neighborhoods to set ground- —Chris Kirkham
considerably less.” government estimates (homes destroyed) rules for rebuilding. In Santa and Nour Malas
The aftermath of the North- THE WALL STREET JOURNAL.
ern California wildfires is lay-
ing bare the state’s multilay- landscaping with fruit trees. retain our community and our ing, including recreational ve-
ered housing crisis, as They all turned to ash and workforce.” hicles.
thousands of people who lost charred metal. Rebuilding thousands of California Insurance Com-
their homes navigate the com- Based on insurance claims homes at once is a significant missioner Dave Jones said it is
plexities of rebuilding in one so far, more than 4,700 homes challenge in a part of the state still too early to determine how
of the nation’s most expensive were destroyed in Northern where, before the fires, there many homeowners will get suf-
housing markets. Those who California and 10,000 more was already a severe shortage ficient payouts for the cost of
want to rebuild are left to un- were partially damaged, lead- of construction labor and a rebuilding. The answer will de-
tangle a web of insurance ad- ing to total insured losses of supply of new homes that fell pend on “what it costs to re-
justers, contractors and local more than $3 billion statewide. far short of demand. build the home, but also what
permitting agencies. Local officials in the coun- Santa Rosa, which lost kind of coverage the home-
The result is a prolonged re- ties most affected by the fires nearly 3,000 homes, built only owner purchased,” he said.
building process that could are working with federal half that number of single- Mr. Clopton hopes to apply
leave thousands of families emergency and disaster-relief family houses in the past de- for construction or small-busi-
waiting months to return to agencies to set up temporary cade, according to permitting ness loans to make up the dif-
their neighborhoods, a scenario shelters and find new ways to data analyzed by real-estate ference from his insurance
prompting local officials to act speed up the rebuilding pro- tracker Trulia. payout.
fast to avoid a population drain. cess, which, like elsewhere in Santa Rosa has worked to Jeff Okrepkie, who lost his
Mr. Clopton, 33 years old, California, involves layers of streamline the system, aiming home in Coffey Park and is
lived in the Coffey Park neigh- permits and approvals. to process building plans in helping to organize neighbors
borhood of Santa Rosa. As he “We have a sense of ur- less than two weeks, according looking to rebuild, described
fled the flames consuming his gency,” said David Guhin, to city officials. the daunting task they feel
neighborhood, while clutching Santa Rosa’s director of plan- In the meantime, to help they face: “You’re taking 5,000 C AV I A R C O L L E C T I O N S
his four cats and a laptop, he ning and economic develop- house people who lost their homeowners and asking them
left behind what was supposed ment. “We have to do every- homes, Santa Rosa officials to turn into developers, and ex- AVA I L AB LE AT L A G O S . C O M
to be a fireproof safe, new thing we can to provide have changed or waived rules perts in insurance, and experts BLOOM I NGDALE’S 59TH ST
granite countertops and ornate solutions to people so we can to allow for temporary hous- in city permits in three weeks.”

Race Highlights a Changing Atlanta

BY CAMERON MCWHIRTER calls falsely claiming to be
from her supporters were
ATLANTA—Joe Meadows made to white sections of the
has lived in his five-bedroom city urging people to vote for

home in this city’s Kirkwood her “to keep Atlanta black.”

neighborhood since 1966, Ms. Norwood has said Ms.
when he bought it for $10,000. Bottoms has tried to portray
In 50 years, the 83-year-old her as a supporter of Presi-
retired construction foreman dent Donald Trump to frighten
has seen his neighborhood Atlanta’s black voters. She said
transform from predominantly she voted for Hillary Clinton
white to largely African-Amer- and Barack Obama in recent
ican. Now it is on its way back presidential elections.
to majority-white again. In Kirkwood, the changes
“I’m not going to be around are evident. Its commercial
much longer,” said Mr. Mead- district now has trendy res-
ows, who is black, citing the taurants, a vegan bakery and
forces of gentrification that Joe Meadows at home in Atlanta’s Kirkwood neighborhood. new apartments. On residen-
have pushed up property val- Gentrification is a key issue in the city’s mayoral runoff election. tial streets, older smaller
ues and driven out many of his homes are being demolished
black neighbors. “It’s all about narrowly lost to Mr. Reed in a mayoral forum in October. and replaced with bigger ones.
money, money.” 2009 and who calls herself an The median home value in Freddy Luster, 47, who
What’s happening in Kirk- independent. the city has risen 53% since works in corporate real estate,
wood is taking place in many Both have addressed con- 2010, faster than the national said he and his family moved
neighborhoods. For the first cerns that economic forces are rate of 27%, according to the to Kirkwood as African-Ameri-
time since at least 1970, At- pushing out poorer residents, real-estate website Zillow. Av- can professionals because they
lanta is on the verge of not be- most of whom are black, and erage rents in the Atlanta liked its diversity. Mr. Luster’s
ing a black-majority city, in bringing in wealthier ones, metro area rose 33% since wife, Patricia, 43, said she
part because it has become a many of whom are white. 2010, according to Jay Par- feels Ms. Norwood, who lives
magnet for newcomers drawn “If we have a city that is sons, vice president of data in the wealthier, predomi-
to a lower cost of living, de- not a city for all, then we re- analytics at RealPage Inc., a nantly white area of Buckhead,
cent job prospects and warm ally are not fulfilling the Richardson, Texas, company. “lives in a bubble.”
weather. promise that Atlanta has had Ms. Bottoms has called for In Buckhead, signs backing CLASSIMA Starting at
Gentrification has become a for so many generations,” Ms. $1 billion public-private fund Ms. Norwood are more numer- Collection $990
key issue in the Dec. 5 runoff Bottoms, 47, said at a debate. to fight displacement, as well ous. Marion Smith, 72, a re-
election for the next mayor. Ms. Norwood, 65, said she as zoning changes. Ms. Nor- tired white lawyer and Nor-
The two candidates are long- has fought to protect home- wood has promised a citywide wood backer, said residents in
standing city council members owners but has been critical of initiative to protect citizens Buckhead and elsewhere have FELDMAR WATCH CO. / Los Angeles, CA / 310.274.8016
who ran as nonpartisans. One the current administration, from displacement, including long believed their taxes were RAZNY JEWELERS / Highland Park, IL / 847.432.5300
is Keisha Lance Bottoms, an which is in the throes of a fed- reducing, freezing or delaying too high for the services they
WEMPE / New York, NY / 212.397.9000
African-American woman who eral corruption investigation. property taxes for longtime receive. Ms. Norwood would
says she is a Democrat and is “What gets in our way is residents in changing areas. be “responsive to the entirety
backed by Democratic Mayor power and money, and who The two campaigns have of the city,” he said.
Kasim Reed. Her rival is Mary has and who doesn’t have it traded allegations of race-bait- —Laura Kusisto
Norwood, a white woman who and who wants it,” she said at ing. Ms. Bottoms said robo- contributed to this article.
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A4 | Monday, November 27, 2017 P W L C 10 11 12 H T G K B F A M 1 2 3 4 5 6 7 8 9 O I X X ***** THE WALL STREET JOURNAL.


Congress Prepares for Year-End Sprint

Lawmakers rush deals pressed over how the tax bill
treats pass-through businesses,
on taxes and spending whose owners pay taxes on
as sexual-harassment their individual returns.
Also, at least three GOP sen-
allegations reverberate ators have expressed concerns
over the $1.5 trillion the tax bill
BY KRISTINA PETERSON is expected to add to the federal
budget deficit over 10 years, to
WASHINGTON—Lawmak- pay for the cost of lowering the
ers returning to Washington corporate tax rate and many in-
face a tight calendar and a diz- dividuals’ income-tax rates. The
zying list of legislative tasks, negotiations over the spending
from a major tax overhaul to a limits could add to those con-
new federal spending agree- cerns and potentially turn them
ment, with the added complica- off the tax bill, since congres-
tion of sexual-harassment alle- sional leaders have been dis-
gations that are reverberating cussing increasing government
in the halls of the Capitol. spending over the next two
For weeks, the political spot- years by around $200 billion.
light has focused on Republi- “We’re $20 trillion in debt
cans’ efforts to pass the first and it’s ‘party like there’s no to-


major revision of the tax code morrow’ time in Washington,”
in more than three decades. Af- said Sen. Bob Corker (R., Tenn.)
ter failing in their push to dis- on Twitter recently in response
mantle the Affordable Care Act to articles about the negotia-
earlier this year, GOP lawmak- tions. GOP Sens. Jeff Flake of
ers are counting on the tax re- Arizona, who is retiring next
write to mark one major legis- year, and James Lankford of
lative accomplishment they can Oklahoma also have expressed
tout to voters in next year’s concerns about the tax bill’s im-
midterm elections. pact on the federal deficit.
The Senate could vote on its Without a budget deal,
version of the overhaul this As the end of the year approaches, congressional Republicans are moving quickly to accomplish a range of complicated tasks. spending levels would revert to
week after the House recently lower levels established in 2011.
approved its own bill. GOP lead- pect Congress will have to pass hopefully come through for all days—suggest that claims of pressing challenge for GOP Under current law, regular mili-
ers say they expect the two a short-term spending patch of us. The Tax Cut Bill is getting sexual misconduct may con- Senate leaders is that the Re- tary spending is capped at $549
chambers to hash out a deal on that would stretch for just two better and better. The end re- tinue to jolt Capitol Hill. publicans who control swing billion for fiscal year 2018,
one bill before year’s end. or three weeks until a longer- sult will be great for ALL!” The closely watched election votes on the tax bill have goals while nonmilitary spending is
But the tax bill’s passage term spending bill is completed. GOP leaders have advised for the Alabama Senate seat va- that could be almost impossi- capped at $516 billion.
could be affected by the out- President Donald Trump is lawmakers they may remain cated by Attorney General Jeff ble to reconcile in a spending That has upset Sen. John
come of other, lower-profile ne- expected to meet with leaders in Washington until close to Sessions also takes place Dec. bill needed to keep the gov- McCain (R., Ariz.), who has said
gotiations, most notably over of both parties in both cham- Christmas, or beyond, to fin- 12, pitting GOP candidate Roy ernment funded. With a slim Congress must increase military
where spending levels should bers Tuesday to discuss legisla- ish the tax bill and other leg- Moore, who faces accusations 52-48 majority in the Senate, spending. Mr. McCain hasn’t di-
be set for the remainder of fis- tive priorities, aides said. islation. of sexual misconduct toward Republican leaders can afford rectly connected his vote on the
cal 2018, which ends Sept. 30. Mr. Trump returned to At the same time, allega- teenage girls, against Democrat to lose no more than two GOP tax bill to the level of military
Once a budget deal has been Washington late Sunday after tions of sexual misconduct by Doug Jones. A GOP loss would votes on the tax bill, with Vice spending, but several aides say
reached, lawmakers will then celebrating Thanksgiving in Sen. Al Franken (D., Minn.) narrow the Republicans’ Senate President Mike Pence prepared they believe angering him over
need a few weeks to fill in more Florida. He tweeted: “Back in and Rep. John Conyers (D., majority to 51-49. In either out- to cast a tiebreaking vote. military funding could make it
detailed spending legislation. D.C., big week for Tax Cuts and Mich.) as well as the release of come, GOP leaders hope to pass GOP leaders are working to harder to get his support for a
Because the government’s many other things of great im- a nude photograph of Rep. Joe the tax bill before the next Ala- resolve concerns some Republi- tax overhaul.
current funding expires after portance to our Country.” He Barton (R., Texas)—all of bama senator is sworn in. cans, including Sen. Ron John- —Ian Talley
Dec. 8, lawmakers and aides ex- added: “Senate Republicans will which happened in a matter of Most immediately, one son of Wisconsin, have ex- contributed to this article.

Trump Warns of a Senate Setback

BY SHARON NUNN taxes among other issues. ting things done for real Ala- make passing certain partisan
Mr. Moore has denied any bamians. His record as a legislation even more difficult.
President Donald Trump re- sexual misconduct and has prosecutor speaks for itself.” Senate Majority Leader
iterated his stance that the vowed to stay in the race. He He said Mr. Moore’s accusers Mitch McConnell (R., Ky.) said
election of Democrat Doug has blamed the media and “served as witnesses to all Ala- this month that he believed
Jones to an Alabama Senate Democrats for spreading what bamians of his disturbing con- Mr. Moore’s accusers and that
seat would mark a serious he called false allegations. duct.” Mr. Moore should step aside

blow to the Republican Mr. Trump’s comments In his Sunday tweets, Mr. ahead of the Dec. 12 vote.
agenda, while not explicitly echoed statements he made Trump also tried to temper the Republican senators said on
saying he backed GOP nominee last week, when he said Mr. appearance of a personal in- Sunday that the Moore candi-
Roy Moore, who faces allega- Jones, a former U.S. attorney, vestment in Mr. Moore, noting dacy wasn’t helping the GOP
tions of sexual misconduct was “terrible” on various polit- that he supported Sen. Luther agenda.
with teenagers decades ago. ical issues. As in the most re- Strange, Mr. Moore’s GOP pri- “It is pretty clear to me that
“The last thing we need in cent comments, he didn’t di- mary opponent, in the race. the best thing that Roy Moore
Alabama and the U.S. Senate is rectly say he supported Mr. Mr. Strange was named to the could do for the country is to Rep. John Conyers, shown in 2015, joined Congress in 1965.
a Schumer/Pelosi puppet,” Mr. Moore, and when asked about seat when Jeff Sessions be- move on,” Sen. Tim Scott (R.,
Trump said on Sunday on Twit-
ter, referencing Democratic
leaders Sen. Chuck Schumer of
the accusations against the
candidate, he pointed to Mr.
Moore’s denials.
came attorney general. He lost
the primary to Mr. Moore.
The Alabama race has cre-
S.C.) said on ABC. “In my opin-
ion, and in the opinion of
many Republicans and conser- Conyers to Leave
Committee Post
New York and Rep. Nancy Pelosi Sebastian Kitchen, a Jones ated a headache for GOP lead- vatives in the Senate, it is time
of California. “Jones would be a spokesman, said: “Doug Jones ers. Republicans hold a narrow for us to turn the page, be-
disaster!” said Mr. Trump, cit- is continuing to focus on find- 52-48 advantage in the Senate, cause it is not about partisan
ing border security, crime and ing common ground and get- and a loss of the seat would politics.”
BY KRISTINA PETERSON ing him the longest-serving
current House member.

CFPB As acting director, Mr. Mul-

vaney would have full author-
ity to implement changes at
the bureau and is expected to
Conyers said Sunday he would
step aside from his post as the
top Democrat on the House Ju-
In an interview Sunday on
NBC, House Minority Leader
Nancy Pelosi (D., Calif.) called
Mr. Conyers “an icon” and said
Continued from Page One do so aggressively. The former diciary Committee while an he has done “a great deal to
Cordray as deputy director so Republican House member ethics panel investigates alle- protect women.” Asked
she could assume the role of from South Carolina once gations of sexual harassment whether Mr. Conyers should

acting director of the agency called the CFPB a “sad, sick against him. resign from the House, Mrs.
under a provision in the Dodd- joke,” and has called for an “I have come to believe that Pelosi said: “He will do the
Frank financial law, which cre- overhaul of the agency, includ- my presence as Ranking Mem- right thing in terms of what he
ated the CFPB. Mr. Trump’s ap- ing curtailing its budget. Other ber on the [Judiciary] Com- knows about his situation.
pointment of Mr. Mulvaney, a possible actions include delay- mittee would not serve these That he’s entitled to due pro-
harsh critic of the CFPB, is ing the enactment of a recently efforts while the Ethics Com- cess. But women are entitled
based on the Federal Vacancies issued rule on payday lending, mittee investigation is pend- to due process as well.”
Reform Act, which sets rules amending a 2013 mortgage ing,” Mr. Conyers, of Michigan, In a separate statement, she
for vacant government agency rule that tightened underwrit- said in a statement. “I cannot said there would be conse-
positions and gives the presi- ing standards, and reassessing in good conscience allow these quences for anyone found to
dent authority to appoint an pending lawsuits against com- charges to undermine my col- have sexually harassed others.
acting director. panies such as student-loan leagues in the Democratic Cau- Last week, the House Ethics
Calling herself the “rightful Mick Mulvaney is the president’s pick to be CFPB acting director. servicer Navient Corp. cus.” Committee said it had begun
acting director” of the bureau, Mr. Mulvaney said in a Rep. Jerrold Nadler of New investigating and would gather
Ms. English is seeking a judg- also released a memo from was created in the wake of the statement Friday that “Ameri- York will take over as the com- more information about the
ment and a temporary re- CFPB General Counsel Mary financial crisis. Democrat Eliz- cans deserve a CFPB that seeks mittee’s top Democrat. Conyers allegations. The com-
straining order to prevent Mr. McLeod in which she advised abeth Warren, now a leading to protect them while ensuring Mr. Conyers acknowledged mittee said it wouldn’t make
Mulvaney from becoming in- senior CFPB officials to “act critic of Wall Street in the Sen- free and fair markets for all last week that he settled a further public statements
terim CFPB chief. consistently with the under- ate, was the brain behind the consumers.” wrongful-dismissal claim in pending its initial review.
“Ms. English has a clear le- standing that Director Mulva- agency’s birth. Many of the On Saturday, Mr. Trump 2015 involving a former female On congressional commit-
gal entitlement to the position ney is the acting director of staff joined the agency as en- called the Obama-era leader- employee, but he denied alle- tees, the ranking member typi-
of acting director of the CFPB,” the CFPB.” The memo by Ms. thusiastic supporters of its ship of the agency a “total di- gations of sexual harassment. cally works closely with a
the lawsuit said. “The presi- McLeod, who was hired by Mr. mission. saster,” adding that financial He again denied the allega- panel’s chairman in crafting
dent’s purported or intended Cordray, was dated Saturday. Until the lawsuit was filed, institutions “have been devas- tions on Sunday. any bipartisan legislation, and
appointment of defendant Mul- In a memo issued on Satur- CFPB officials had remained si- tated and unable to properly Mr. Conyers said he settled during committee hearings can
vaney as acting director of the day, the Justice Department lent since Mr. Cordray’s an- serve the public.” the complaint to avoid litiga- often make comments or ask
CFPB is unlawful.” argued the Federal Vacancies nouncement Friday on his res- The White House says Mr. tion. He added he would coop- questions before other law-
Ms. English wants the court Reform Act gives the president Trump will eventually nomi- erate with any further investi- makers. Mr. Conyers was
to decide that the Federal Va- power for “temporarily autho- nate his own choice for the gation in the House. chairman of the panel while
cancies Reform Act doesn’t rizing an acting official to per- next permanent director of the “I deny these allegations, Democrats controlled the
control the appointment of a form the functions and duties”
The 2010 Dodd- CFPB, who then needs to be many of which were raised by House from 2007 to 2011.
temporary CFPB director and of the CFPB’s director. The de- Frank Act created the confirmed by a simple majority documents reportedly paid for Speaking Sunday on ABC,
block any temporary Trump partment acknowledged that in the Senate. by a partisan alt-right blogger. Rep. Jackie Speier (D., Calif.)
appointment. Dodd-Frank permits a properly
agency in the wake of Financial industry experts I very much look forward to said Mr. Conyers should resign
Deepak Gupta, a former appointed deputy to serve as the financial crisis. expressed alarm at the uncer- vindicating myself and my from Congress if an investiga-
CFPB lawyer who has sued the temporary director, but that it tainty created by the fight. family before the House Com- tion reveals the sexual-miscon-
Trump administration previ- “doesn’t displace the presi- “If there has been one con- mittee on Ethics,” Mr. Conyers duct allegations to be true.
ously, is the lead attorney rep- dent’s authority under the Va- sistent criticism of the CFPB, said in the statement Sunday. “The Ethics Committee
resenting Ms. English. cancies Reform Act” to appoint ignation and Ms. English’s it’s a lack of predictability, and The allegations were first re- needs to move very
In a written statement, an acting director. appointment. Agency spokes- we are now left with the great- ported by BuzzFeed, which swiftly.…Staff up if necessary
White House spokeswoman Alan Kaplinsky, a Ballard men didn’t respond to repeated est uncertainty since the bu- said it received the documents to determine whether or not
Sarah Sanders said, “The ad- Spahr lawyer critical of the requests for comment. Neither reau was established,” said Ben from Mike Cernovich, a social- those allegations are accurate.
ministration is aware of the CFPB, said that “chaos will en- Ms. English nor Mr. Cordray Olson, a Buckley Sandler law- media personality who is a And if they’re accurate, I do
suit filed this evening by dep- sue at the CFPB.” could be reached for comment. yer and a former CFPB official self-described “American na- believe that Congressman Con-
uty director English. However The unfolding drama is the The president has promised who advises financial compa- tionalist,” and independently yers should step down,” she
the law is clear: Director Mul- latest twist for the CFPB, to install a more business- nies. confirmed their authenticity. said.
vaney is the acting director of which has been mired in parti- friendly leadership at the na- —Ian Talley Mr. Conyers, 88 years old, —Sharon Nunn
the CFPB.” The White House san battles since the agency tion’s regulatory agencies. contributed to this article. joined Congress in 1965, mak- contributed to this article.
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THE WALL STREET JOURNAL. * * * * * * Monday, November 27, 2017 | A5

Pakistani Official Quits to End Standoff
Law minister resigns change the oath members of
Parliament take to swear Mu-
in an agreement with hammad was the final
Islamist activists who prophet.
The government had called
had clashed with police in the army on Saturday to
help restore order as demon-
BY SAEED SHAH strators clashed with police
and paramilitary forces, but on
ISLAMABAD, Pakistan—The Sunday, the military called for
country’s law minister re- a peaceful solution.
signed on Monday, in an With the failed operation,
agreement with religious ac- the government was forced
tivists to end three weeks of back into talks with the pro-
demonstrations that shook an testers. Interior Minister Ah-
already fragile government, san Iqbal on Sunday said the
the state broadcaster and the government had acted in re-
protesters said. sponse to an order from the
Around 2,000 protesters Islamabad High Court to clear


had blocked a major road be- the road.
tween Islamabad and the adja- “We are trying everything
cent city of Rawalpindi. The to put this fire out,” he said
activists’ main demand was late Sunday.
the resignation of Law Minis- A better-equipped paramili-
ter Zahid Hamid, who they tary force, the Rangers, which
said is responsible for a pro- operates under the Interior
posed change in legislation Ministry, was deployed on
they said amounted to an in- Sunday near the protest site,
sult to the Prophet Muham- the government said.
mad. A State Department spokes-
A government operation on person on Sunday said the U.S.
Saturday by police and para- was monitoring the situation
military forces had failed to closely.
dislodge the protesters and Protesters with Tehreek Labbaik Ya Rasool Allah attending the funeral Sunday of a demonstrator who was killed Saturday in Islamabad. Prime Minister Shahid
was suspended that night af- Khaqan Abbasi met on Sunday
ter at least seven demonstra- Saturday’s crackdown in Is- Prime Minister Nawaz Sharif tion. The agreement with the weeks. for talks with army chief Gen.
tors were killed and 260 in- lamabad had sparked protests this year. Mr. Sharif, whose protesters was confirmed by The group aims to maintain Qamar Bajwa. In a written re-
jured. by sympathizers elsewhere in party remains in office, has re- their spokesman, Ejaz Ashrafi. Pakistan’s draconian blas- sponse to the government’s
Under the agreement bro- the country, including Karachi peatedly said the military es- The protesters are from the phemy laws, which carry the requisition of the army, issued
kered by Pakistan’s powerful and Lahore, its two biggest tablishment is the force be- mainstream Barelvi sect of Is- death penalty for anyone in- before that meeting, the mili-
military, previously arrested cities. hind his removal, an allegation lam and organized around a sulting the Prophet Muham- tary criticized the handling of
protesters would be released, The government has had a it denies. group called Tehreek Labbaik mad. the operation, saying the po-
according to the text of the tense relationship with the State-owned PTV news re- Ya Rasool Allah, which formed The demonstrators said the lice on Saturday had “not been
deal. military since the ouster of ported Mr. Hamid’s resigna- a political party in recent proposed legislation would optimally utilized.”

In Egypt’s Sinai, a Call to Cooperate With the Army

Bedouin leaders in the Sinai “We call on men and youths they were aware of the group. The Egyptian army’s licing of the insurgency. Con- 25 armed men used guns and
Peninsula have issued a rare call of Sinai tribes to join their The call for cooperation, is- spokesman didn’t respond to secutive governments invested explosives against Muslim
for solidarity with the Egyptian brothers…to coordinate for a sued on Friday, comes after requests for comment. little in education and infra- worshipers at the Al Rawda
army to fight against Islamic major operation with the years of tension between the Sinai Province has recruited structure for the territory. mosque in the town of Ber al
army” to end terrorism, said a army and Sinai tribesmen. It disaffected young Egyptian “The military has for years Abd, killing 305 people, in-
By Dahlia Kholaif in statement posted on Facebook also underscores the despera- Bedouins, causing friction be- refused to collaborate with cluding 28 children, according
Cairo and Rory Jones by the Union of Sinai Tribes. tion to end the Islamist insur- tween tribes and the Egyptian tribes for different reasons, in- to Egyptian officials.
in Tel Aviv It isn’t immediately clear gency in Sinai, where an affili- army, according to political cluding not to give them Nobody has claimed re-
how many tribes the group ate of Islamic State known as and military analysts. power,” said Mohannad Sabry, sponsibility for the attack. But
extremism in response to a Fri- represents. The group’s Face- Sinai Province has been fight- Tribal leaders have accused a researcher who has written at least one militant waved an
day attack that killed more than book page has nearly 220,000 ing authorities and staging at- the Egyptian government of about the Sinai Peninsula. Islamic State flag, officials
300 Muslims at a local mosque. followers, and tribesmen said tacks in recent years. neglect and heavy-handed po- In Friday’s attack, at least said.
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A6 | Monday, November 27, 2017 * * THE WALL STREET JOURNAL.


France Vows Crackdown on Harassment

Government launches cently rocked by a series of al- the charges, which were later
legations and the resignation dropped.
antiviolence campaign Nov. 1 of British Defense Sec- That reticence melted after
amid rising complaints retary Michael Fallon after he multiple women leveled accu-
was accused of inappropriate sations at Hollywood producer
of sexual intimidation behavior. He acknowledged Harvey Weinstein, who has
not living up to the high stan- apologized for his past behav-
BY WILLIAM HOROBIN dards of the military. ior with colleagues but denied
AND STACY MEICHTRY In Italy, allegations of sex- allegations of nonconsensual
ual assault by a prominent sex. One of his accusers was
PARIS—The recent wave of film director have prompted a the prominent French actress


sexual-harassment and mis- new debate over harassment Léa Seydoux. She published an
conduct allegations is crashing of women in the workplace, essay in the Guardian alleging
down on France and the myth which remains largely toler- harassment by Mr. Weinstein
of the French lover. ated and rarely reported. Swe- and movie directors she didn’t
Victims of sexual abuse den, long seen as a champion name, saying it was “very
have set social media ablaze of gender equality, has been common to encounter men like
with the French equivalent of stunned in recent days by a these.”
the #MeToo hashtag known as host of allegations of rape and The conflagration quickly
#balancetonporc, or “expose sexual harassment in media spread to the worlds of French
your pig.” France’s national and entertainment. academia, business and poli-
police force reported a 23% in- France has historically tics, where women have been
crease in complaints of sexual shown reluctance to confront speaking out. Most of the ac-
violence filed in October com- allegations of sexual miscon- counts surfacing on social me-
pared with the same month a duct, particularly at the high- dia haven’t identified the al-
year earlier. The gendarmerie, French President Emmanuel Macron greets Marlène Schiappa, the secretary of state for equality. est levels of society. The coun- leged aggressors.
which is responsible for polic- try’s respect for individual French newspaper Libéra-
ing in rural areas, reported a çaise, the French lover, sweet making gender equality the would introduce fines for ver- privacy has often led the me- tion in November published
30% rise. talk or gallantry,” Marlène “national cause” of his five- bal sexual harassment and au- dia to look the other way accounts from eight women
The outpouring is fueling a Schiappa, France’s secretary of year term in office with a fo- tomatically classify sex with when it comes to the sexual describing alleged sexual as-
reassessment of some male state for equality, said in an cus on combating sexual vio- minors as rape. His govern- behavior of powerful men. saults between 2010 and 2014
behavior. Unwanted kissing, interview. “French women lence next year. In 2018, ment is holding 300 work- Many supporters of Domin- by the head of the youth
groping and other acts previ- have had enough.” government spending on shops around the country to ique Strauss-Kahn, the former movement of France’s Socialist
ously often went unchallenged, The French government equality will rise to €420 mil- seek advice on how to International Monetary Fund Party, Thierry Marchal-Beck.
French officials and victims says one woman is killed every lion ($501 million), Mr. Ma- strengthen the bill. People are chief and onetime Socialist The movement said in a state-
say, because French society three days by a partner or for- cron said. “Our entire society also invited to weigh in on a presidential contender, ini- ment it was “revolted” by the
branded it a form of seduction mer partner. is sick with sexism,” he said. government website. tially rallied behind him after reported acts and will further
in a romantic culture. On Saturday, French Presi- “We need to act before it’s too France isn’t the only Euro- U.S. authorities arrested him its efforts to prevent and sanc-
“In France we relativize dent Emmanuel Macron said late.” pean country grappling with for allegedly assaulting a tion sexist behavior. Mr. Mar-
sexual violence, saying it’s he would lead French society Mr. Macron’s government is public anger. In the U.K., the housekeeper in a New York chal-Beck couldn’t be reached
French culture, love à la fran- into a “cultural battle” by planning legislation that political establishment was re- hotel. Mr. Strauss-Kahn denied for comment.

Greek islands are straining as they host far more people than facilities were designed to hold.
Monthly arrivals in Greece Migrants and refugees currently on the islands
compared with facilities’ capacity
5,000 Through Nov. 23
2,649 Lesbos
4,000 Chios Capacity
3,000 Samos

2,000 Kos

1,000 Leros

0 Other
2016 ’17 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000
Sources: UNHCR (arrivals through October); Greek Migration Ministry (November arrivals, people, capacity) THE WALL STREET JOURNAL.


Despair of Next Chapter

Processing delays, violence and the approach of winter-
weather hardship dim island newcomers’ hopes for the future
BY NEKTARIA STAMOULI cusations that EU and Greek eral times the intended ca-
authorities are leaving thou- pacity and many have been
SAMOS, Greece—Three sands of migrants exposed to living in them for nearly two
months ago, Shehab Kabalan, disease, cold weather and vi- years. Syrian Shehab Kabalan has been living on Samos, where he says he and others are ‘dying slowly.’
a 20-year-old from Syria, olence as a deterrent to Local authorities refuse to
traveled in a small boat from other would-be refugees. allow bigger facilities to be
Turkey to Greece in the hope Earlier this fall, 200 peo- built, leaving thousands liv- Strains Appear Almost two years after the be transferred to the Greek
of receiving asylum in Eu- ple were crossing to the ing in summer tents that are understanding was reached, mainland while their applica-
rope and starting a new life. Greek islands of Samos, mushrooming around the of- In EU-Turkey Pact only five Syrian asylum-seekers tions are considered.
Instead he is trapped on Chios, Lesbos, Leros and Kos ficial facilities. Aid groups have been returned to Turkey. But there are long delays in
the island of Samos, living in daily, a fourfold increase have struggled to persuade Under the European Union’s Greek judges recently proposed that process as well. As a re-
a flimsy tent among dozens over the spring. Arrivals local hotels and apartment agreement with Turkey, mi- some adjustments to the asy- sult, thousands are stuck in
of other migrants and refu- have declined in recent owners to rent out empty grants and refugees who apply lum process to accelerate it. short-stay reception centers.
gees, prevented from travel- weeks but remain high de- rooms to house the mi- for asylum once they arrive in Meanwhile, migrants on the A review of the EU-Turkey
ing to the mainland and now spite the worsening weather. grants. Greece are to be returned to islands who are considered vul- deal is unlikely, particularly
bracing for a hard winter. “The EU-Turkey deal in- Now, as winter ap- Turkey while their applications nerable or who have family ties given worsening relations be-
Earlier this month, he corporates strong elements proaches, Greece risks re- are processed. elsewhere in Europe can ask to tween Europe and Ankara.
slashed his wrists. A doctor of deterrence,” said Gabriel peating last year’s disaster,
patched him up and sent him Sakellaridis, head of Greek when six people died in the
back to the tent camp. “I felt operations for Amnesty In- camps, including four who Syria. Aid groups are urging pions and fights: These are theless stuck in Athens due
desperate,” Mr. Kabalan said. ternational. “No political inhaled toxic fumes when authorities to move people the things I deal with every to monthslong delays in ap-
“We are dying slowly here.” considerations should tram- burning garbage to keep to the mainland before win- day,” Mrs. Elmonazed said. proving the paperwork
Greece’s migration crisis ple upon human rights like warm. ter sets in. The situation is better on needed to leave the country.
has faded somewhat from that.” Moreover, two-thirds of Samar Elmonazed, a 20- the mainland, but challenges About 30,000 are stranded
view since a March 2016 pact The Greek government the new arrivals in Septem- year-old Syrian woman who remain. Arrivals, including in camps throughout Greece,
between the European Union and EU officials have said ber were women and chil- has been living in a tent for Syrian families, from across according to UNHCR esti-
and Turkey stanched the they are accelerating their dren, increasing the vulnera- three months, said her 11- the Greek-Turkish land bor- mates. Another 30,000 have
enormous flows of migrants efforts to offer more appro- ble population, according to month-old daughter often der have almost tripled in smuggled themselves out of
crossing the Aegean Sea. priate accommodation for the United Nations High wakes in fright from the recent months. the country since the bor-
But a surge in recent the migrants. Commissioner for Refugees. noise of wild animals or the Many refugees who have ders were sealed in March
months has created abysmal On Chios, Lesbos and Sa- Most of the newcomers are fights that break out fre- secured permission to join 2016, according to official
conditions here, sparking ac- mos, the centers house sev- from Afghanistan, Iraq or quently. “Snakes, rats, scor- family in Germany are none- estimates.

LOANS 10,000,” said Christopher Mar-

inac, director of research at
investment-banking boutique
FIG Partners. “There are many
profitable loans. Still, Mr. King
nodded at deeper issues
around the downshift, saying
“the mega issue here is that,
cern for all banks is business
lending. In the third quarter,
the 12-month growth rate for
business loans fell to 2.48%
pronounced based on weekly
Federal Reserve data. Com-
mercial and industrial loans,
or business lending, in early
ing to get to the point where
they say, ‘I can’t wait to find
out what is going to happen in
Washington,’ ” he said.
Continued from Page One banks that are concerned you know, we’ve been on a from 2.79% the prior quarter November were up less than Even so, “that doesn’t mean
asm coming out of the elec- about how much they can nine-year slow economy.” and 7.67% a year earlier. 1% from a year prior, the data I think we’re going back to
tion,” said Gerard Cuddy, CEO grow the loan book in 2018.” An area of particular con- The drop-off is even more show. 2015 or 2016 levels” of loan
of Beneficial Bancorp Inc., a At the biggest U.S. banks, From mid-2014 through growth, Mr. King added.
community lender in Phila- loan growth in the third quar- mid-2016, growth of such Some bankers also have
delphia. “I think reality is ter was spotty. At J.P. Morgan Squeeze Play loans was regularly in the dou- cited heightened competition.
setting in.” Chase & Co. and Bank of Differences in yields of 10-year Twelve-month growth rate for ble digits. This is putting 2017 More business customers are
The slowdown in lending America Corp., total loans and two-year U.S. Treasurys business lending, quarterly on track to be the worst year tapping the bond market in-
growth raises questions about grew 3% from a year earlier. for business-loan growth since stead of bank loans to take ad-
3.0 percentage points 20%
firms’ prospects for 2018, es- Citigroup Inc. posted growth 2010, when the economy was vantage of low interest rates
pecially given that long-term of 2%, while total loans at 15 still wrestling with the imme- there, while insurance compa-
interest rates haven’t moved Wells Fargo & Co. fell 1%. diate aftermath of the finan- nies are offering to fund 30-
much, even as short-term ones Loan growth was anemic 10 cial crisis. year commercial mortgages
are climbing. The difference, among many smaller banks. At It remains unclear why. and hedge funds are lending to
or spread, between 10-year BB&T Corp., total loans in the 5 Throughout the year, some riskier companies.
and two-year U.S. Treasury third quarter were roughly flat banks have said more subdued Others think the slowdown
debt, a rough proxy for bank compared with a year earlier. business lending was due to a in business lending is a hang-
profitability, is around 0.6 per- In an earnings call last month, –5 lack of clarity from Washing- over from above-average
centage point, its lowest level CEO Kelly King said more cli- ton on the fate of initiatives growth in recent years. Many
in a decade. ents were taking advantage of –10 on taxes and health care. potential corporate clients are
If loans balances aren’t low rates in the bond markets Such worries should even- already loaded up on debt,
0 –15
growing briskly and the inter- and paying off their bank tually fade, though, said Dar- said Kevin Barker, an analyst
est-rate spread is narrow, it is loans. Hurricanes in the south- ren King, finance chief at M&T at Piper Jaffray & Co. That
–0.5 –20
far tougher for banks to in- ern U.S. also had an effect. Bank Corp., where loans in the tamps down demand for loans.
crease net-interest income. He added the bank is pur- 2007 ’10 ’15 2007 ’10 ’15 third quarter were down 2% It also makes some banks
“The plane used to be flying posely restructuring its loan Sources: FactSet (spread); Federal Deposit versus a year earlier. “Busi- wary of lending even more to
at 30,000 feet, now it’s at portfolio to focus on more- Insurance Corp. (growth rate) THE WALL STREET JOURNAL. ness owners are eventually go- these companies, he added.
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THE WALL STREET JOURNAL. NY Monday, November 27, 2017 | A6A

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THE WALL STREET JOURNAL. * * * * Monday, November 27, 2017 | A7


Indonesia Volcano U.S. Trial Ruffles Turkey

Curbs Flight Traffic Ankara assails case of
Turkish suspects
BY I MADE SENTANA Government volcanologist charged with helping
Gede Suantika said a red-yel-
JAKARTA, Indonesia—Erup- low light visible in ash above Iran evade sanctions
tions at a volcano in Bali dis- the mountain was the reflec-
rupted thousands of vacation- tion of lava in the crater and A trial opening in Manhattan
ers’ plans after flights to and that Agung could spew ash for this week that could implicate
from the popular resort island at least a month. But the vol- prominent Turkish officials is
were canceled. canologist said he didn’t ex- exacerbating already inflamed


Authorities on Monday in- pect a major eruption. tensions between the U.S. and
creased the alert level at Authorities warned anyone Turkey.
Mount Agung to the highest still in the exclusion zone
level of four, as the volcano around the volcano, which ex- By David Gauthier-
continued erupting, spewing tends about 4.6 miles from the Villars in Istanbul
black ash more than 2 miles crater in places, to leave. and Nicole Hong
into the air. Mount Agung last staged a in New York
Bali’s Ngurah Rai Interna- series of eruptions in 1963-64,
tional Airport, which handles which killed more than 1,700 The arrest of a Turkish gold
as many as 420 flights a day, people, according to Indone- trader in Miami last year on
was closed on Monday. Arie sia’s disaster agency. charges of conspiring with
Ansanuroohim, spokesman for It started showing in- Turkish banking and govern-
Indonesia’s second-largest air- creased activity in September, ment officials to help Iran evade
port, said it would remain triggering an exodus of more U.S. sanctions upset the authori- Turkish gold trader Reza Zarrab during his brief detention by Istanbul police in 2013.
shut through Tuesday. than 130,000 residents in the ties in Ankara. At the time, Pres-
Officials said 45 flights area. More than 25,000 people ident Recep Tayyip Erdogan U.S. government has raised con- the Manhattan U.S. attorney’s cussed his efforts with Mr. Er-
were canceled on Sunday by remain evacuated outside the suggested U.S. prosecutors may cerns over how Mr. Erdogan re- office said he remains in federal dogan.
Cathay Pacific Airways, Jet- exclusion zone. have had “ulterior motives” to sponded to a failed coup last custody. A lawyer for Mr. Mr. Zarrab’s troubles began
star, AirAsia and Garuda Indo- Last month, Indonesia’s implicate his government. year by cracking down on oppo- Zarrab, who has pleaded not in January 2013, when fog en-
nesia, affecting more than government estimated Bali Now, indications that the 34- sition groups, imprisoning thou- guilty, declined to comment on veloping parts of Istanbul forced
5,500 passengers. sustained some $150 million in year-old businessman, Reza sands of people and repressing his client’s status. a plane arriving from Ghana to
On Saturday, 14 flights were economic losses due to the Zarrab, may be cooperating the media. There have been several re- land at an airport on the Euro-
canceled, affecting some 2,350 volcanic activity, mostly due with U.S. prosecutors are infuri- On Turkey’s side, Mr. Erdo- cent signs that Mr. Zarrab, who pean, rather than the Asian, side
passengers. to a fall in tourism. ating Mr. Erdogan. gan has been irked that Wash- had been scheduled to begin of the city. Inspecting the air-
Garuda said it was also can- The ash was blowing south- “You are putting my citizen ington hasn’t met his repeated trial with Mr. Atilla, may be co- craft, customs officers found an
celing flights for the neighbor- east Sunday, away from the on trial and trying to make him demands to extradite a Turkish operating. For one, his lawyers undeclared load of gold.
ing island of Lombok, which airport. confess,” Mr. Erdogan said in a Muslim cleric living in Pennsyl- haven’t participated in any Turkish prosecutors traced
was in the path of ash drifting Indonesia sits on the Pacific recent speech. “Is this democ- vania, whom he accuses of plan- court hearings or filed pretrial the cargo to Mr. Zarrab, accord-
from the Mount Agung vol- Ring of Fire, and has nearly racy? Is this justice?” ning a July 2016 coup attempt. motions since September. For- ing to the 2013 court docu-
cano. 140 active volcanoes. The State Department has Fethullah Gulen, the cleric, has mer law-enforcement officials ments. U.S. prosecutors suspect
Mount Agung, which is lo- In recent years, volcanic denied Turkey’s accusations. said he didn’t play a role in last also say Mr. Zarrab’s “released” the shipment was part of a bar-
cated in the northeastern part eruptions stranded tens of U.S. prosecutors have year’s events. status on the Bureau of Prisons ter arrangement under which
of the island, spewed volcanic thousands passengers in this charged Mr. Zarrab, who has The trans-Atlantic crossfire website could mean he has been Mr. Zarrab violated U.S. sanc-
ash Tuesday and again Satur- fast-expanding air travel mar- pleaded not guilty, and eight has alarmed members of the relocated to facilitate coopera- tions by allegedly purchasing
day afternoon and Sunday. ket. others in the case. Seven of the business community, who fear tion. natural gas from Iran, paying
defendants are at large, leaving that trial evidence implicating If Mr. Zarrab is cooperating, for it in gold.
300 miles
one defendant who is expected Turkish financiers and govern- he could bolster the U.S. case by In late 2013, he was formally
M A L A Y S I A to appear for trial in Manhattan ment officials could tarnish the helping to authenticate Turkish arrested on corruption charges,
300 km federal court on Monday: Meh- country’s reputation in financial court documents that prosecu- which he denied. Days later, Mr.
met Hakan Atilla, a former man- markets, spook foreign inves- tors have cited in pretrial pro- Erdogan, who was then prime
ager at Halkbank, a large state- tors and inflate Ankara’s bor- ceedings. minister, said the investigation
owned Turkish bank. Mr. Atilla, rowing costs. U.S. prosecutors have argued was a conspiracy against him
I N D O N E S I A who has also pleaded not guilty, The Turkish lira has lost 13% that Turkish government and and called Mr. Zarrab a philan-
has been in U.S. custody since of its value against the U.S. dol- banking officials were “integral thropist. Charges against him
his arrest in March. lar in the past two months, a to the sanctions evasion were dropped.
The trial is adding to a long drop analysts largely blame on scheme.” One of the defendants In March 2016, the gold
Jakarta list of disagreements straining the heightened bilateral ten- is a former Turkish economy trader landed with his family in
Mount Agung U.S.-Turkey relations. Washing- sions. minister. At Mr. Atilla’s trial, Miami. Asked about the purpose
JAVA ton and Ankara, a key member The U.S. government hasn’t prosecutors are expected to of his visit, he said: “Disney
I n di a n O cea n of the North Atlantic Treaty Or- said whether Mr. Zarrab is co- present jurors with 2013 wire- World.”
BALI LOMBOK ganization, have been at odds operating. He is listed as re- tap recordings, including con- —Dion Nissenbaum
over how to combat the Islamic leased on the Bureau of Prisons versations in which Mr. Zarrab in Washington
THE WALL STREET JOURNAL. State terror group in Syria. The website, but a spokesman for allegedly indicated he had dis- contributed to this article.

Seoul’s Draft Is Challenged


SEOUL—South Korea’s com-

pulsory military service, long
regarded as sacrosanct in a
nation still technically at war
with North Korea, faces a legal
test over whether citizens can
refuse to serve because of
their beliefs.

An army stint is a rite of pas-

sage for most young men here,
where conscription has existed
since 1949 and military influ-
ence extends well beyond the
barracks. Schools and compa-
nies arrange three-day boot
camps for workers and students
to experience military life. Protesters rallied in May in Seoul seeking alternative service.

Your full
That culture has left little
room for conscientious objec- ticipate a determination by his brother Hyeon-woo was
tion. The country imprisons the Constitutional Court on found not guilty by a different
more young men for refusing the whether to recognize consci- judge in the same court.

retirement picture.
draft than the rest of the world entious objection as a right. “I thought I’d also go to
combined, according to Amnesty While no acquittal has yet prison like my brother,”
International, which said in a been upheld by the Supreme Hyeon-woo, a physical thera-
February report that about 400 Court, the shift has fueled pist, said. “My brother later

In one place.
were behind bars last year. hopes—and dread—that the joked about how I’d left him
Women are exempt from service. government may be poised to behind when I visited him.”
The draft has made South Ko- scrap prison sentences for ob- Three bills on alternative
rea a garrison state, said Park jectors. service are pending at the Na-
Min-young, a culture critic. Caught in the middle are tional Assembly that would
“Military culture seeps into people like Kim Hyeon-woo give young men the option of
companies, schools and personal and Kim Sun-woo, 23-year-old working with the disabled or
relationships here,” he said. twins from the port city of the elderly in social-welfare When you plan for retirement with Fidelity,
In recent months, though, a Busan. Like most conscien- facilities, or conducting disas- you’ll have instant access to all your retirement
judicial rift over the subject tious objectors in South Korea, ter-relief work, instead of savings details and goals, including:
has begun to play out in lower the Kims are Jehovah’s Wit- serving in the military.
courts here, setting up a de- nesses, who refused military “Introduction of alternative
• How much you may need in retirement
bate over what many see as a service because it conflicted military service should be
bedrock of Korean society. with their religious beliefs. carefully scrutinized in consid- • How much you’re on track to have
Courts first ruled in favor Last December, Kim Sun- eration of public consensus on
• How retirement fits with all your other
of objectors in 2004, but the woo was found guilty and the issue,” said a spokesman
number of acquittals has jailed for 1.5 years. Four days at the presidential Blue House. savings and investing goals
soared this year as judges an- after Sun-woo’s imprisonment, The proportion of South • Steps you can take to help strengthen
Koreans in favor of alternative your plan
service rose to 46.1% last year
South Korea's Objectors from 10.2% in 2005, according It’s your retirement. Know where you stand.
South Korea has sent thousands of young men to prison over the to a survey conducted by the
years for refusing military service, but the country's lower courts country’s National Human
have been acquitting some conscientious objectors of late. Rights Commission.
Many oppose changing the
Conscientious objection cases* draft, saying military duty
Acquittals Convictions must come first. “The constitu-
40 1,000 2016: Many cases left tion stipulates national defense
2017: 39 pending in anticipation as a duty. If refusing to serve
as of Nov. 17 of new ruling in the military is conscientious,
30 750 800.FIDELITY |
is the constitution then uncon-
scientious?” a conservative IMPORTANT: The projections or other information generated by the Planning & Guidance Center’s
20 500 lawmaker, Chung Jin-suk, told Retirement Analysis regarding the likelihood of various investment outcomes are hypothetical in
2004: First a recent parliamentary audit. nature, do not reflect actual investment results, and are not guarantees of future results. Your results
10 ruling in favor 250 Shin Taek-soo, 27, who may vary with each use and over time.
of objectors completed his military stint in
2011, said alternative service Investing involves risk, including the risk of loss.
0 0 would only work if the service Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917
2004 ’10 ’15 2004 ’10 ’15 period were longer than that
© 2017 FMR LLC. All rights reserved. 812684.1.0
*Doesn’t include those who objected for nonreligious reasons, which experts say amounts to
for military service. “Other-
four to five cases a year. wise, people will flock to do
Source: Jehovah's Witnesses THE WALL STREET JOURNAL. alternative service,” he said.
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A8 | Monday, November 27, 2017 THE WALL STREET JOURNAL.

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THE WALL STREET JOURNAL. * * * * * Monday, November 27, 2017 | A9


Venezuela Fuels an Oil Shift

NEPAL was under investigation.
Two people were killed and
Turnout Exceeds 65% two more seriously injured, the
In First Provincial Polls district office announced on its
social-media account. It gave no
Maduro names general Residents of mountain vil- details of the deaths.
lages and foothill towns voted At least 30 other people were
with no industry Sunday in Nepal’s first provincial taken to hospitals, according to
experience to lead polls, with the hope of bringing
government closer to the Hima- —Associated Press
ministry and state firm layan nation’s remote areas.
Nepal’s chief election commis- ISRAEL
BY ANATOLY KURMANAEV sioner, Ayodhi Prasad Yadav, said
turnout was more than 65% Minister Steps Down
CARACAS, Venezuela—Pres- among the 3.2 million voters Over Sabbath Work
ident Nicolás Maduro named who were choosing lawmakers
an active general to lead the in seven newly formed federal Health Minister Yaakov Litz-
state oil industry, the nation’s states and for the national as- man, who heads a powerful ul-
last major economic sector sembly. tra-Orthodox political party in
that had been outside the mili- The lawmakers who were Prime Minister Benjamin Netan-
tary’s control. elected on Sunday, and those yahu’s government, resigned,

National Guard Maj. Gen. who will be elected on Dec. 7 in saying he opposed continued
Manuel Quevedo will be the the remaining parts of the coun- maintenance work on the coun-
new energy minister and pres- try, will be able to name their try’s railways on the Sabbath,
ident of state-run Petróleos states, draft provincial laws and when all labor is strictly prohib-
de Venezuela SA, known as choose local leaders. ited by Jewish law.
PdVSA, which accounts for al- —Associated Press Ultra-Orthodox parties have
most all the country’s foreign- provided Mr. Netanyahu with
currency income. State oil company PdVSA has been racked by a corruption probe that has led to jailing of executives. CHINA support to stabilize his coalition,
Gen. Quevedo, who has no while the government carves out
oil-sector experience, takes the Quevedo would spearhead the PdVSA’s output fell a record this month saying he wants to Port Blast Kills Two, large budgets for the minority
reins at PdVSA from Nelson continuing anticorruption cam- 6.2% in October from Septem- restructure the national debt. Injures at Least 30 community. They have in the
Martinez, a U.S.-educated com- paign in an effort to turn ber, a 13th consecutive With three of four Venezue- past threatened to topple coali-
pany veteran who was under- around the company’s fortunes. monthly decline, according to lans saying they want Mr. Ma- An explosion in a port city tion governments by robbing
mined by last week’s arrests of “We’re going for a total re- government figures reported duro out of office, the presi- south of Shanghai killed two them of their majority.
his associates at the firm’s U.S. structuring of PdVSA,” Mr. dent has increasingly relied on people and injured at least 30 Mr. Litzman’s resignation
arm, Citgo Petroleum Corp. Maduro said on Sunday. “It is the military to bolster his others as it knocked down build- could pressure the other two ul-
Another U.S.-educated veteran time for a new oil revolution.” ‘It is time for a power. Retired and active offi- ings and left streets littered tra-Orthodox coalition partners
oilman, Eulogio Del Pino, was But some analysts said they new oil cers now make up almost half with damaged cars and debris, to squeeze concessions from Mr.
fired as the oil minister. saw the appointment as a deci- revolution,’ his cabinet and hold most of the government and news re- Netanyahu to prove to their con-
The appointment follows a sive power grab by Venezuela’s President the top portfolios. ports said. stituents that they respect the
four-month purge at PdVSA military and security officers Nicolás “The military have reached The early Sunday morning ex- Sabbath as much as the former
amid a deepening economic that would only worsen the Maduro said the last frontier of power with plosion struck a riverfront neigh- health minister.
crisis and declining output. country’s economic problems. on Sunday. the appointment of General borhood in Ningbo, one of The prime minister said later
More than 50 company offi- “These are negative Quevedo,” said Rocio San Mi- China’s busiest ports, China’s of- at a government meeting that
cials and contractors have been changes,” said Asdrubal Olive- guel, a Caracas-based security ficial Xinhua News Agency and he regretted Mr. Litzman’s deci-
arrested and jailed in Venezu- ros, director at Caracas-based to the Organization of the Pe- analyst. other outlets reported. Xinhua sion, describing him as “an excel-
ela since August on charges of consultancy Ecoanalitica. troleum Exporting Countries. Venezuela’s economy has said it happened at a factory. A lent health minister.”
alleged corruption, including “You’re militarizing the indus- The company is teetering on contracted nearly 30% since police statement said the cause —Associated Press
most top Citgo executives. try and generating more uncer- defaulting on about $30 billion 2016, according to the Interna-
Mr. Maduro said Gen. tainty” for investors, he said. of its bonds, with Mr. Maduro tional Monetary Fund.

Honduran President Claims Election Win

A Wall Street Journal Roundup Mr. Hernandez 43.93% of the nandez told supporters at a once among the world’s worst.
vote, with Salvador Nasralla, Tegucigalpa hotel. But allegations of corruption
Honduran President Juan Or- who leads a broad left-right The opposition alliance said and drug trafficking have cast
lando Hernandez, a center-right coalition called the Opposition early numbers gave it a strong a shadow over his government,
U.S. ally, cited multiple exit polls Alliance Against the Dictator- lead but added it would only ac- and his re-election bid fueled
on Sunday to declare himself ship, at 34.7%. cept physically counted ballots. charges that his conservative
victorious in a bid for a second “The count is more than “We are winning,” Mr. Nas- National Party has trampled
term in the Central American clear and resounding that we ralla told supporters. the country’s institutions in a
nation, despite the opposition won this election, that is what Mr. Hernandez’s popularity is bid to entrench itself in power.

saying it was winning. the polls say and that is what based largely on a drop in vio- Turnout appeared to be
A poll released by network the results we are seeing from lence in the impoverished coun- heavy, with relatively minor
Televicentro gave 49-year-old the count are saying,” Mr. Her- try, whose homicide rate was irregularities reported. Rescue workers comb the site of an explosion in Ningbo, China.

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A10 | Monday, November 27, 2017 THE WALL STREET JOURNAL.


STAR How Gen Z Watches

Teens consume most of their
entertainment on streaming
Continued from Page One services.
programming, they spend less
than a third of their screen
time on traditional television,
and the rest on a mix of Netflix, Traditional YouTube
YouTube and other streaming TV* 27% 34%
services, according to a survey
by the media company Awe-
someness. Netflix
To reach them, creators
compete with other profession- 27%
als and also with the everyday
people who fill up social-media Other Other streaming
feeds, giving them seconds to 2% services† 10%
prove a piece of content is Note: Platform teens identified as their
worth a longer look. primary means of consumption *includes on
demand and premium TV †includes Hulu,
Two years after introducing Amazon Prime and Twitch
herself on YouTube with a Source: 2017 Awesomeness survey of 1,500
squirrel impression, Ms. Koshy teens
has cracked the code, accumu- THE WALL STREET JOURNAL.


lating 1.6 billion views and the
advertising business that channel.”
chases those numbers. Her ethnic impersonations
The entrepreneur’s strategy and gonzo style occasionally
presents a way forward for en- run afoul of her socially sensi-
tertainment companies and tive young audience. A backlash
marketers, who have flocked to erupted in the comments sec-
Ms. Koshy’s expanding brand. tion of her anxiety video as
The latest placement: a series of some viewers said she was
comical advertisements for Ap- mocking people with the disor-
ple Inc.’s Beats earphones that der and using it as clickbait.
play on her fast rise and obses- “Gen Z finds things more of-
sive fans. Online, her Beats ads YouTube star Liza Koshy at MTV’s ‘TRL,’ which was relaunched last month. Media firms hope to reach her millions of online followers. fensive,” says Ms. Koshy.
have four times the rate of “They’re more informed about
clicks for those starring other chasing Gen Z viewers, whose the world and more opinion-
celebrities, including quarter- A Strategy—and Unique Content—for Each Platform tastes were shaped by the cri- ated about it, which isn’t a bad
back Tom Brady, Apple says. ses of the 2000s. “They’re post- thing. But it makes them a little
“To me, she’s like the next Online comedian Liza Koshy tailors content to different outlets, saying each app ‘is a different diary of me.’ recession, post-ISIS, post-‘my more touchy.”
generation of Lucille Ball,” says YOUTUBE TWITTER older brother has too many During a recent interview,
Susanne Daniels, global head of school loans.’ They’re kind of while shopping for Post-its,
original content for YouTube, 17.5 million 1.6 million world weary,” says Nick Shore, notebooks and other props for
which developed a TV series
with Ms. Koshy for its subscrip-
subscribers followers chief creative strategist at As-
tronauts Wanted, a youth-fo-
her next video at a Staples near
her Los Angeles home, Ms. Ko-
tion service, YouTube Red. On two channels; weekly Jokes about her life and cused production company shy was waylaid repeatedly by
“She’s not afraid to go for it, comedy videos that invite updates on projects founded by former MTV Net- fans: A cashier got so flustered
and you feel that lack of fear.” repeat viewing works head Judy McGrath. that he overcharged her. A
The Texas native is best Compared to their millennial tween hid her braces with her
known for antic, observational  ADVERTISEMENTS 14.5 million elders—who came of age with hand as she asked Ms. Koshy

videos poking fun at consumer For Beats and others; reality television—Gen Z favors for a selfie. “My bosses are a
culture and trends that run on comical bits playing on her followers DIY “creators” like Ms. Koshy, bunch of 11-year-olds,” she says.
her two YouTube channels, popular characters and Polished portraits with who launch themselves on so- She is petite, about the size
which total 17.5 million sub- obsessive fans funny captions, ad placements cial media. In contrast to the of the kids who recognize her
scribers. obviously manufactured reality in the store, and wears black
Her Twitter feed has 1.6 mil- programs, Gen Z insists on au- tights, a mini backpack and a
lion followers, and 14.5 million wear on Instagram. She also her video. The 32,000 com- She got her start as a Hous- thenticity, or the idea that peo- T-shirt that reads “Clickbait,”
track her Instagram. Her videos creates stand-alone ads, such as ments on the episode included, ton high schooler on Vine, the ple stay true to the personality from a merchandise line sold
on Snapchat average about two the rap video she made for “i broke the replay button” and now-defunct app for looping they present online. by Mr. Dobrik.
million views each. Last month, Procter & Gamble Co.’s Always “i’ve watched this video about six-second videos, where she Ms. Koshy often uses a self- Ms. Koshy has proven to be
she began appearing as a corre- pads, and Snapchat clips pro- 15 times.” found a following for sight gags mocking style to unpack the ev- safe territory for established
spondent on a reboot of MTV’s moting movie snack deals for Ms. Koshy’s share of You- that often involved her mug- eryday feelings that make us entertainment companies and
music video countdown show AMC Theatres. Tube ad revenue ranges from ging with rubbery facial expres- embarrassed or insecure. In a advertisers who have fled from
“TRL,” and she stars in a teen- In the Beats ads, she is seen about $10,000 to $15,000 a sions. recent video on YouTube titled edgier online content after get-
horror TV series that recently working on one of her home- month for each of the new vid- She switched to YouTube to “Facing My Anxiety,” she makes ting burned in recent months.
aired its second season on made videos, dressed up as her eos she posts weekly, she says. create more elaborate—and a fake phone call to avoid a ca- Prominent brands including
Hulu. Jet character, and getting That doesn’t include the ad monetizable—sketches. With sual encounter and appears Wal-Mart Stores Inc. and Star-
Her comedy is heavy on self- chased by fans. When the ad money accumulated by her her parents’ blessing, she alongside herself to voice a bucks Corp. pulled some adver-
deprecation, slapstick and word- premiered on MTV, it cut di- older videos, or the typically dropped out of college at 19, panicked inner monologue. tising from YouTube in droves
play, more goofy than snarky. rectly to Ms. Koshy running five-figure sums she receives moved to Los Angeles and “Time to go home and over- after reports of ads appearing
She has a soft spot for potty onto the set of “TRL.” for creating sponsored clips. signed with Creative Artists think this interaction,” she says. alongside offensive videos, in-
jokes, but overall her work is One reason her sketches She adapts her style to mul- Agency, the Hollywood talent cluding clips uploaded by ex-
PG—an attraction for advertis- work for advertisers is the re- tiple platforms. Her YouTube firm. tremist groups. As “brand
ers, who have been burned by
offensive content on YouTube
play factor. In the six-minute 73
Questions parody video, Ms.
channel is the flagship for her
weekly “Wednezzzdays With
She competes in an online
ecosystem that has become
Gen Z—born after safety” became the buzzword
for advertisers, YouTube made
and social media. Among her Koshy squeezed in dozens of Lizzza” videos, which take her more varied in recent years, about 1996—favors drastic changes to the auto-
YouTube peers, she says, “I’m
the only kind of clean one.”
puns and double meanings, in
part to encourage easily dis-
three or four days to write,
shoot and edit. She uses a sec-
with videogamers, musicians,
makeup artists and assorted
irreverent, DIY stars mated advertising system that
allows YouTubers to monetize
She has worked paid product tracted viewers to re-watch. ond YouTube channel for more “vloggers,” a term for anyone seen as ‘authentic.’ their videos. Ads fell dramati-
placements for Nike Inc. into The higher the view count, the improvisational material, often who trains a camera on them- cally on videos flagged by You-
her routines on YouTube, and more money she earns from the featuring fellow creators such selves, typically to document Tube for having potentially of-
posed in Calvin Klein under- advertisements that play before as David Dobrik, Ms. Koshy’s their lives, do stunts or orches- fensive language or imagery.
boyfriend. trate pranks. She says being perceived as The so-called adpocalypse
Instagram is for polished Star vloggers include Mr. Do- “ethnically ambiguous” helps stung the earnings of many
Screens of Choice portraits of herself—an image brik, who has 8.8 million sub- her broaden her Gen Z audi- YouTube creators, but Ms. Ko-
Gen Z prefers smartphones and tablets and accesses more she often punctures with a scribers and, in a recent video, ence, which is more ethnically shy didn’t lose the 15- and 30-
entertainment on those devices. Technology ownership by generation: scatological joke at her own persuaded a friend’s mother to and racially diverse than previ- second ads that play before her
expense in the caption. She shock him with a stun gun. ous generations. Her father, a videos.
Generation Z Millennials Generation X Baby boomers
uses Snapchat to confess when More than a decade after petroleum executive, moved to YouTube is banking on her
100% she is blowing her Wednesday YouTube helped create a new the U.S. from India as a teen, comedy skills and marketabil-
video deadline, or to deliver category of fame, digital cre- and her mother, a yoga instruc- ity with an eight-episode sit-
the occasional serious mes- ators now anchor the entertain- tor, is white. A self-described com called “Liza on Demand”
75 sage, like her recent rant ment landscape for young audi- “little brown girl,” she stands for its YouTube Red subscrip-
about an Uber driver who sug- ences. CAA uses a data team to out in YouTube’s predominantly tion service, to premiere in
gested that Ms. Koshy find a track emerging online stars and white upper echelon of stars. 2018. In the scripted series,
50 rich man to pay her bills. evaluates their potential for In a video titled “Mixed Kid Ms. Koshy plays a fictional
Each app, she says, “is a dif- long-term earning through, for Problems,” she recalls bouncing character living with room-
ferent diary of me.” example, Hollywood roles, book among racial groups and con- mates getting by in the gig
Twitter is the only feed that deals and live events. CAA re- stantly fielding queries about economy, plunging into odd
she supplies grudgingly. “I wish cently signed Tanner Braun- her ethnic background. jobs and random tasks for pay.
I could tweet the one-liners gardt, a 17-year-old from Kansas “Now you may not relate if MTV is hoping that by add-
that I come up with for You- whose specialty is trampoline you’re just a white girl watch- ing Ms. Koshy and other social
Tube, but the bosses will call acrobatics. The firm has bro- ing this, or a just a black guy media stars to its “TRL” reboot
Smartphone Tablet DVD Video game Subscription you out for recycling content,” kered a clothing deal for him, watching this,” she says in the it can make an influential TV
console video on she says, referring to her fans, along with endorsements and a video. “But you two should program from the 2000s, and
who keep track of everything tour of indoor trampoline parks. meet up, make a mixed baby the network itself, relevant to a
Source: Nielsen Total Audience Report, 1Q 2017 THE WALL STREET JOURNAL. she does online. Most of the creators are and have him subscribe to my new generation of young people.

COINS the coins back at a loss. He

since has given up on
gold and instead bought land in
“We buy it high, mark it up and
sell it high.”
Then he pointed a finger at
the government. “Maybe you
Mr. Mezei said his account
statement after the purchase
valued the coins at $35,000. “I
just wanted to diversify,” he
Continued from Page One The government’s proof should ask that question of the said, calling the dealer’s 30%
lypse bunker along with the sales amount to a heads-I-win- Mint: Why are you charging so markup unfair. Gold prices rose,
guns and freeze-dried maca- tails-you-lose deal, according to much for these coins?” he said. so he sold the coins last year
roni. But some unhappy inves- George Cooper of USAGold, a The U.S. Mint does operate a for more than he paid, though
tors have deposited them into Denver investment firm. bit like a coin dealer. Salespeo- he would have made more had

retirement accounts, where the He said he won’t sell the proof ple answer phones. An online he invested in regular gold bul-
shiny gold and silver coins have coins without reciting an exten- store, with a pop-up chat win- lion.
performed like lead sinkers. sive disclaimer. dow, adorns the website. Cus- Most buyers are better off
Paul Rumage, a 64-year-old Marvin E. Johnson, 61, of Ka- tomers can sign up to have an- not expecting any profits from
retired software engineer from nawha, Iowa, said American nual proof sets charged to their U.S. proof coinage, experts say.
Michigan, said he was looking Bullion Inc. sold him 930 Amer- credit cards. Some collectors say they get joy
for a haven from stocks for his ican Eagle silver proof coins for Mint profits on gold Eagle simply by possessing the coins.
individual retirement account his retirement account. He paid proofs hit nearly 18% last year. The American Eagle proof, a
in 2013. A private dealer per- the equivalent of nearly 2 1/2 Net profits on the Silver Eagle double-struck coin colored with
suaded him to buy 45 four-coin times the market price of silver. proofs were even better, reach- a special dye, has been de-
sets of American Eagle gold Then he sued when he saw his ing about 41% last year. Silver proof coins from the U.S. Mint facility in West Point, N.Y. scribed as the most beautiful
proofs, and 979 ounces of silver investment drop like a rock. The Mint transfers its profits coin ever made. Plus, “you get a
Eagle proofs, records show. “He bought them at a pre- to the Treasury’s General Fund. Before the ban, said Ken tion to the rule, making them a certificate” and “a little leather
The 1,135-coin treasure of mium where I don’t think he’d “We are not in it to make Swab, former counsel for a favorite for coin dealers pitch- box,” said Rick Boss of Ohio, a
gold and silver cost him ever make a profit,” said money,” said Kristie McNally, House subcommittee on con- ing a “Gold IRA” to retirees. proof-coin collector and retired
$308,000, which included a 6% Thomas Reavely, Mr. Johnson’s the Mint’s chief financial officer. sumer affairs and coinage, in- Balint Mezei, a self-em- AT&T engineer. “You’re getting
commission for the broker. Less lawyer and coin collector. Mint officials said they vestors could keep Persian rugs ployed contractor, said he a piece of history.”
than a month later, his IRA Mr. Johnson and American pitch proof coinage as collec- in their living rooms and IRA bought about $50,000 worth of Nonetheless, Jeffrey Chris-
statement valued the coins at Bullion later settled the coin tor’s items, not investments. accounts. U.S. proof coins around 2006 tian, a precious-metals invest-
$212,000. dispute confidentially. Orkan But Congress kept the door “It was perfect,” he said. for his retirement account after ment adviser, said he steers his
“I knew something was Ozkan, American Bullion’s chief open to putting the coins into “You could walk on your tax de- being convinced by a coin clients away: “It’s sort of like
wrong,” Mr. Rumage said. executive, said it wasn’t the retirement account investments duction every day.” dealer they would be safer from buying a car and driving it off
After filing a lawsuit against company’s fault. Mr. Johnson, a few years after banning other Lawmakers allowed Ameri- the government’s hands than the parking lot. It will have an
the dealer and broker, he sold he said, paid the going rate: collectible items in 1981. can Eagle proofs as an excep- regular bullion. immediate depreciation.”
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or
THE WALL STREET JOURNAL. * * NY Monday, November 27, 2017 | A10A


Panthers Beat Jets 35-27
R Train Derails in Latest Mishap
BY MARA GAY ridership after decades of un- “There is a general sense ski resorts, the state should re-
derinvestment. that the subway system is com- turn those dollars to city tran-
Even in a subway system be- Riders in New York City have ing apart before our very eyes,” sit riders,” he said, referring to
set with delays and other woes, endured increasing delays in re- said John Raskin, executive di- a nearly $5 million payment
the derailment of an R train on cent years, as well as more rector of the Riders Alliance, a the MTA made last year to a
Sunday raised some eyebrows. crowded trains. After several transit-advocacy group. state ski authority.
The train was entering the high-profile incidents earlier Gov. Andrew Cuomo, who Morris Peters, a Cuomo bud-
86th Street station in the Bay this year, including one in controls the MTA, has said get spokesman, said the MTA
Ridge section of Brooklyn at which hundreds of people were Mayor Bill de Blasio should pay owed the state money, but that
about 5:30 a.m. when a chunk half of an $836 million plan to the payment was small com-
of wall collapsed onto the track, stabilize the subway system. pared with the amount of state
lodging itself under the train Mr. de Blasio has refused, not- funding allocated to the transit
and causing it to derail.
No one was hurt in the ing that is about the same agency. He said the $456 mil-
No one was hurt and work- incident. Monday’s amount the governor has di- lion was used to pay debt ser-
ers restored service by verted from the MTA’s operat- vice on MTA capital projects.
late Sunday afternoon, accord-
commute isn’t expected ing fund for other state uses. Cuomo spokeswoman Dani

ing to a spokesman for the Met- to be affected. “New Yorkers deserve a safe Lever said the state is commit-
ropolitan Transportation Au- and reliable transit system. The ted to improving the transit
thority. Officials said they didn’t first step towards that starts system and has allocated $8.4
expect the incident to af- with a fully funded subway ac- billion in capital money and half
fect Monday’s commute. trapped underground in an F tion plan, which should be of the $836 million in funding
But transit advocates and train for more than 40 minutes funded by returning the $456 for the subway stabilization
others said the episode was a in June without air condition- million the state diverted from plan. “While we take action to
grim reflection of the state of ing, improving the subway sys- our subways and buses,” Austin meet the transit challenge, the
TOUGH LOSS: Kaelin Clay avoided Lac Edwards as he ran back New York City’s overstressed tem emerged as possibly the Finan, a de Blasio spokesman, city refuses to do the same at
his punt for a touchdown at MetLife Stadium on Sunday. subway system, which is strug- city’s hottest political issue in said in an email. “Instead of the expense of the New York-
gling to keep up with record the Nov. 7 election. spending our dollars on upstate ers,” she said in an email.

N.J. Office Rents

Near Fresh Highs
As Perks Pay Off
BY KEIKO MORRIS New Jersey research director.
In New Jersey, asking rents
Asking rents for New Jersey rose in eight of the past nine
office space are nearing re- quarters. In 16 of 21 submar-
cords as landlords undertake kets, third-quarter rents in-
extensive reno- creased from the previous year,
PROPERTY vations and fill Transwestern said. Submarkets
older properties such as the Hudson waterfront,
with amenities Newark and urban Essex
from beach volleyball courts County and the Short Hills and
and yoga studios to outdoor Millburn areas were among of-
lounges with fire pits. fice districts with the biggest
The steady climb in asking rent increases.
rents during the past two years The state’s vacancy rate,


reached $26.86 a square foot in meanwhile, dropped to 14.8% in
the third quarter, just shy of the third quarter from 15.5% in
the record $26.90 from the the same period last year,
second quarter of 2001, accord- Transwestern said.
ing to real-estate services firm Since the 2008 financial cri-
Transwestern. sis, the recovery of New Jer-
“Landlords are investing sey’s office market, particularly
capital, adding amenities into its suburban areas, has lagged
office buildings, many built in behind New York City’s. Con-
the ’80s and ’90s, which has solidations in a number of in-
given them the ability to in- dustries, including the pharma-
crease the office rents,” said ceutical sector, left behind
Matthew Dolly, Transwestern’s sprawling vacant campuses,
which weighed on the state’s Comic Karen Bergreen performing at West Side Comedy Club, one of the new spots that have opened in the city in recent years.
rents. The preference of a
On the Rise
Average asking rent for New Jersey
office space, quarterly data
younger generation of workers
for walkable, urban settings
near mass transportation also
New Clubs, Venues Punch Up Comedy Scene
put suburban office parks at a BY CHARLES PASSY
$27.00 per square foot disadvantage. How Owners “You don’t want to have any themselves—typically, at no
But real-estate investors New York City is getting se- blender drinks,” Mr. Ashe said. cost to club owners, with per-
26.50 buying and improving older rious about joking around. Can Hit It Big formances for an audience
properties in desirable loca- The city is enjoying a comedy u Create showcases on filled with family and friends.
26.00 tions have found that tenants boom with the opening of sev- Want to run a successful slower nights: It’s easy to pack At West Side Comedy Club,
have been willing to pay higher eral new clubs in the past few comedy club? It’s all about fol- a club on the weekends with which hosts a Tuesday talent
rents for extensively renovated, years. West Side Comedy Club, lowing a few key rules, accord- name talent, but what about night, the comics are required
modern spaces with upgraded a 100-seat venue on Manhat- ing to Eugene Ashe, owner of to bring 10 patrons.
mechanical and power capacity tan’s Upper West Side, is one of West Side Comedy Club, a new
25.00 to accommodate more dense the latest additions to the scene, stand-up venue on the New u Capitalize on the week-
office settings. launching in early October. York City scene. ends: Club owners often
24.50 “There is a combination of And other venues are add- add a third show on Friday
new money, new equity and in- ing comedy to the mix. Fish- u Keep the food and and Saturday nights to
vestors who had not been in bowl, a bar and lounge at the drink simple: At restau- take advantage of larger
the market previously entering Dream Midtown hotel, has rants or bars, patrons ar- audiences.
2000 ’10 the market,” said Curtis Foster, launched a monthly comedy rive at various times. But
Source: Transwestern executive managing director at program, with the next one at comedy clubs, they u Make sure the comics
THE WALL STREET JOURNAL. Cushman & Wakefield. slated for Wednesday night. typically come all at once. are happy: It isn’t enough
Conversions of obsolete of- Established clubs say their That means club owners just to offer a comedian a
fice parks into apartment business has been growing as must keep the menu short, free drink as part of a gig. Mr.
Following Revamp, buildings or mixed-use projects well. Case in point: Carolines with lots of finger foods and Ashe likes to serve them a
have removed low-rent office on Broadway, the 284-seat sandwiches, so the staff can meal, saying it creates good-
Tenants Stay Put properties from the market, Times Square club that has a get multiple orders out at the will and spreads the word
another factor pushing the roster of such familiar comedi- same time. The same goes for about the club in the comedy
Keystone Property Group in state’s average asking rents ans as Tracy Morgan, Kathy drinks, with a caveat: Because the start of the week? Clubs community. “We have had
the past year completed major higher, said brokers and ana- Griffin and Dave Chappelle. service often occurs during often offer open-mic or “talent” comics come in and be like, ‘I
renovations at a Morristown, lysts. Owner Caroline Hirsch says shows, noise has to be kept to nights. Such events give bud- heard about these chicken
N.J., office building and a Pis- But landlords spending to attendance has increased a minimum. In other words, ding comics a chance to prove wings,’ ” he said.
cataway, N.J., complex pur- upgrade buildings is a primary roughly 50% during the past
chased in 2014 as part of a driver, and the bet already has 25 years to about 150,000 a
three-state portfolio, revamping paid off for some. Depending year. Comedy is “bigger than ing venue. West Side Comedy and we’re not going to have a pealing fare, so there is no
fitness centers and cafeterias on the property, landlords said ever right now,” she said. Club is located in the basement stand-up show at 1 p.m. in the need to force customers to or-
and adding conference centers. they have seen rent increases Several factors are driving of Playa Betty’s, a Mexican res- afternoon,” said Chris Gers- der. “You are going to want
One result so far has been ranging between 7% and 15% this trend, industry insiders taurant, and the two businesses beck, who handles Q.E.D.’s more,” he said.
retention, eliminating vacant after completing renovations. said. Comedy has become more have the same ownership. That marketing. Minimum or no minimum,
periods and costs to bring in a Mountain Development accessible, with stand-up acts means there is less pressure for Some newer clubs are dis- Mr. Kimowitz is enjoying suc-
new tenant, said Tom Sklow, Corp. and Square Mile Capital showcasing their work through the club to succeed by itself, pensing with drink or food cess, particularly at the Stand,
vice president of development Management LLC invested a range of mediums, including said Eugene Ashe, the principal minimums for customers, long where he says the club has to
and leasing. The tenant-reten- more than $20 million to rede- online videos, podcasts and owner of both the stand-up a key part of the economic turn away patrons on Fridays
tion rate is 99% at the complex velop and market 56 Livingston satellite radio. Such platforms venue and restaurant. equation for stand-up venues. and Saturdays, its busiest
at 30 Knightsbridge Rd. in Pis- Ave. in Roseland, a 400,000- serve to boost interest at the It also means Playa Betty’s times. “We do our best to get
cataway, he said. square-foot property purchased club level by building familiar- and West Side Comedy Club those customers back in on a

Meanwhile, a joint venture from Merck & Co. in 2012. ity with the comedians. can cross-market themselves. late show or another night
of Time Equities Inc. and Berg- Since then, the joint venture Audiences have “more of an The restaurant encourages cus- that week,” he said.
man Real Estate Group is com- has signed large leases with idea of who they’re coming to tomers to head downstairs by What is happening today
pleting a $4.5 million overhaul law firms Lowenstein Sandler see,” said Jim Norton, a vet- providing a sneak peek with a recalls a few decades ago,
of a three-building Parsippany LLP and Connell Foley LLP. eran stand-up and a host on live feed of shows from the Yearly attendance at the comedy when stand-up comedy first
campus. Among the tenant Rents for conventional office satellite service SiriusXM. club. The club tries to get pa- club Carolines on Broadway went mainstream and clubs
perks are a massage room, bi- buildings were in the low $20s, Mr. Norton appeared at the trons to hang out at the restau- flourished. That led to an
cycle-share program and an art but after the overhaul of the 2017 New York Comedy Festi- rant after performances with overexpansion, and the nation-
studio with local artists provid- Roseland property, the part- val earlier this month. The 14- the offer of a free mini-cocktail. wide comedy boom went bust
ing classes. ners now expect to get above year-old festival, widely con- West Side Comedy Club “We find that it alienates by the mid-1990s.
Occupancy has risen from $30 a square foot, said Michael sidered the city’s premier isn’t alone in thinking outside our patrons,” said David Kimo- Now, there is hope that the
50% to 60% since the venture Seeve, president of Mountain annual comedy showcase, has the box. At Q.E.D., a three- witz, one of the owners of the boom will stick. As the world
bought the 280,000-square- Development. The company experienced growth as well. It year-old club in the Astoria Stand comedy club in Manhat- becomes a more unsettling
foot office park last year, said has launched a similar strategy now encompasses 100-plus neighborhood of Queens, the tan’s Gramercy Park neighbor- place, the comedy club becomes
Aaron P. Medeiros, Time Equi- at 5 Garret Mountain Plaza in shows, more than three times space is used during the day hood and the Standing Room a haven of sorts, insiders say.
ties director of acquisitions and Woodland Park, a 102,000- the number in its early years. for classes in everything from in Long Island City, Queens. “It’s one of the last places
policy. square-foot building where Comedy clubs also have embroidery to origami. Mr. Kimowitz said ditching where people tell the truth,”
—Keiko Morris plans call for transforming the tweaked their business models “There are so many creative minimums puts the onus on said Mr. Ashe of West Side
rooftop into an outdoor lounge. from the traditional free-stand- people in the neighborhood, the clubs to deliver more ap- Comedy Club.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or
A10B | Monday, November 27, 2017 NY * * THE WALL STREET JOURNAL.



Gun Is Discharged
Into Floor of Mall
A crowded mall in Hudson
Valley was evacuated Sunday af-

ter a gun discharged into the
floor, causing minor injuries to
two bystanders, police said.
The gun went off shortly af-
ter 3 p.m. at the Galleria at Crys-
tal Run in Middletown, about 70
miles north of Midtown Manhat-
tan. Video posted on social me-
dia showed armed police in tac-
tical gear running down a
corridor of the mall while shop-
pers ran in the other direction.
Chief Robert Hertman of the
Wallkill Police Department said
officers were still seeking the

Chefs Cause Stir

man whose gun went off. Police
didn’t know if the discharge was
accidental, he said.
The two people who were

As Pasta Comes
hurt were being treated for mi-
nor lacerations. Chief Hertman
said it was unclear how they

To Fast Casual
were injured.
—Associated Press Chef Mark Ladner, left and above left with his staff at Pasta
Flyer in Greenwich Village. Above, spaghetto alla vodka with
NEW JERSEY meatballs from ePasta, a new restaurant in the Financial District.
Predominantly Black BY JEANETTE SETTEMBRE The gnocchi pesto is $12; the marinara sauce with a side that it’s often overcooked or
Churches Vandalized same dish costs $23 at Allora. salad, and a soda or sparkling mushy, this was super al dente.
It’s spaghetti and meatballs It is no surprise that chefs water. It’s excellent,” Gina Zafran, 29,
Acts of vandalism committed like grandma used to make, with fine-dining backgrounds Sides such as the lasagna of the Upper West Side, said of
at five predominantly black served in the culinary equiva- are looking to cash in on a snack—a deep-fried bar of the fusilli.
churches in northern New Jersey lent of a New York minute. fast-casual future. Sales at cheesy pasta—can be served in Nona’s Italian food is served
are being investigated as possi- Made-to-order pasta dishes quick-service restaurants were under five minutes. in a hip, pink dining room at
ble bias crimes, prosecutors said. such as fettuccine Alfredo and forecast to reach $234 billion Chef Mark Ladner, formerly “We’re not necessarily inter- the Sosta in the Nolita neigh-
Broken windows and dam- rigatoni Bolognese are being in 2017, a 5.3% gain over of Michelin-starred Del Posto, ested in the foodie community. borhood of Manhattan. Insta-
aged exterior signs were discov- churned out at the speed of 2016’s $222 billion, according set out to open the McDonald’s We’re trying to become a nor- gram-obsessed diners hold
ered Saturday at the Morristown burrito-slinging at Chipotle. to the National Restaurant As- of noodles, only healthier, with mal place to normal Americans smartphones up to the neon
Church of Christ in Morris Town- Italian food is having its fast- sociation. Pasta Flyer in Greenwich Vil- who think food is just a meal,” sign blaring “Mangiamo Baby!”
ship and four churches in nearby casual moment. In 2015, Panera Bread raked lage. The space, a former Chi- Mr. Ladner said. above the counter, where zuc-
Morristown—Church of God in After launching upscale red- in more than any other fast-ca- potle, has been transformed On a recent evening, 63- chini noodles can be substi-
Christ for All Saints, Bethel sauce restaurant Allora in Mid- sual restaurant with $4.8 bil- into a terrestrial-inspired din- year-old diner Philip Ashley, tuted for the carb-filled variety.
A.M.E. Church, Calvary Baptist town last year with his father, lion sales in the U.S.; Chipotle ing room with a hanging UFO who lives in the neighborhood, An early adopter of the grab-
Church and Union Baptist Tim Gjonbalaj created a more ranked No. 2 with $4.4 billion, and a black-and-white mural of said: “The pasta and meatballs and-go noodle trend was boxed-
Church. casual noodle concept, ePasta, according to food-service in- Rome. were right on the money.” He pasta brand Barilla. Casa Barilla
The vandalism apparently oc- which is set to open Monday in dustry research firm Tech- Mr. Ladner leads the assem- suggested, however, that pa- restaurant opened in Midtown
curred late Friday or early Satur- Manhattan’s Financial District. nomic Inc. bly line stirring up sauces for trons “may want slightly bigger in 2013, serving pasta, pizza
day, authorities said. It wasn’t Customers order at a marble Shake Shack’s Danny Meyer pasta combos such as fusilli portions.” and salads in a snap. The chain
clear if any of the acts are counter in the open kitchen recently dabbled in grab-and-go with pesto; whole-grain riga- Boiling pasta is easy, but recently expanded to Southern
linked or how many people may from a menu that features Italian with his pizzeria Mar- toni in a meat ragout; creamy serving it perfectly al dente California and to Dubai. Prices
have been involved. dried and fresh pastas including tina in Manhattan’s East Vil- fettuccine Alfredo; and gluten- quickly and consistently is the range from $7.95 to $12.95.
Police have increased the bowls of bowtie-shaped farfalle lage, which also serves meat- free penne. Each are is priced challenge. If the noodles sit out “This is about better ingredi-
number of patrols at the with broccoli rabe and Italian ball subs, salads and rice balls. at $7 to $8. too long, they get soggy. At ents and better foods in the
churches. No arrests have been sausage, or penne in a spicy ar- A number of other quick- For $9.99, customers can get Pasta Flyer, dry pasta is cooked, right portions that happen to
made. rabiata sauce whipped up in service Italian spots are twirl- a full meal of spaghetti and frozen and flash-boiled. be delicious,” said restaurant
—Associated Press minutes with a pasta cooker. ing up pasta, pronto. miniature-size meatballs in “I get pasta a lot and I find consultant Clark Wolf.

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THE WALL STREET JOURNAL. Monday, November 27, 2017 | A11


The Mystery Inside 2017’s Hot Toys

Anticipation and surprise for children are themes as companies ride the YouTube unboxing phenomenon

TOY MAKERS are bringing an el-

ement of surprise to the holiday
Taking a cue from the YouTube
phenomenon known as unboxing—
viral videos in which people theat-
rically unpack hot new products—
companies are churning out tiny
charms, stickers and golf-ball-size
critters, all tucked away inside lay-
ers of plastic. The mystery objects
have become one of the hottest
categories of toys this season.
MGA Entertainment Inc.’s L.O.L.
Surprise! Big Surprise is a glit-
tery, half-sphere container that
includes three tiers of toys, each
bigger than the last. The 19
smaller packages feature “fizz
balls,” plastic charms and L.O.L.
Surprise! dolls and clothing. The
Los Angeles-based company,
which also makes Bratz dolls, says
the $70 toy “takes unboxing to
new extremes.”
Big Surprise is already sold out
in many stores, and is being of-
fered on eBay and elsewhere for
significantly more.
For Charlotte, N.C., sisters
Regan and Piper Haycock, a big
part of what makes the toy so de-
sirable is discovering what’s inside
all that packaging.
“There’s so many layers you can
unwrap!” says Piper, age 7. smartphones and tablets for chil-
She and Regan, 9, watch toy-un- dren’s attention. Total toy sales
boxing videos on YouTube almost rose 5% in 2016, down slightly
every day after school, says their from a 7% increase a year earlier,
mother, Stacy Haycock, a financial according to NPD data.
analyst for Perdue Farms. After MGA Entertainment Chief Exec-
seeing numerous videos of review- utive Isaac Larian says the com-
ers unboxing the Big Surprise, the pany underestimated demand for
girls could talk of little else. When the L.O.L. Surprise! Big Surprise by
a Target holiday store circular ar- more than half. Since the toy’s
rived in the mail, Piper circled a launch on Sept. 29, 1.2 million Big
picture of the toy with black Surprises have been shipped to
marker. stores. Mr. Larian says current
So when Ms. Haycock noticed company estimates indicate de-
one Big Surprise left on a shelf at mand for more than 3 million total
her local Target in early Novem- units.
ber, she grabbed it and used a cou- MGA Entertainment plans to ex-
pon to bring the price down to pedite another 300,000 units to
about $50. “I don’t usually spend stores by Dec. 12, but Mr. Larian
$50 on toys, but I figured I should says factory capacity limits how
get it because I may never see one many toys can be delivered by
again,” says Ms. Haycock. She is Christmas.
saving it for under the Christmas The company is launching an-
tree. Children don’t know precisely what other unboxing product on Dec. 3,
Unboxing videos, also big with will be in the Hatchimals Surprise due in part to the success of Big
technology and fashion reviewers, egg, top, or the Crate Creatures Surprise. Aimed at boys ages 6 to
have become a key way children Surprise, right. Mystery is part of the 10, Crate Creatures Surprise fea-
learn about new toys, and their toys’ appeal. Some Pikmi Pops items, tures pet monsters such as Blizz
popularity has grown exponen- above, can be attached to backpacks. the Yeti and Snorthog the Wart-
tially in recent years. A recent hog.
search for “toy unboxing” on You- it’s no surprise that toy makers The standard-size Pikmi Pops Martin, head of robotics at the To- Tung Tu, a 44-year-old program
Tube, a unit of Alphabet Inc.’s are pushing their own versions of Surprise Pack retails for about $11 ronto-based company. The color of manager who lives in Gaithers-
Google, brought up more than 12 unboxing. and is designed for girls ages 5 to each speckled egg suggests which burg, Md., says his 7-year-old
million results. A Google spokes- Australia-based Moose Toys, 10, who are encouraged to collect family the creatures inside belong daughter, Violet, had been asking
woman declined to provide more maker of the popular Shopkins all of the characters. to, without revealing the identity for a Big Surprise every day for a
specific numbers on the genre, but grocery-store figurines, launched The toys come with string to of the set of twins that will hatch. month. Mr. Tu noticed that most
pointed to a 2014 study the com- its Pikmi Pops in September. The latch the characters, classified as Mr. Martin says consumers stores were sold out of the toy. He
pany did that showed a 57% toy, a plastic lollipop-shaped con- common, rare or ultrarare, onto don’t necessarily want a complete eventually found a Wal-Mart store
growth in unboxing videos views tainer, hides “mystery items’” such backpacks for displaying at school. surprise when they’re paying 45 minutes away, in Washington,
between 2013 and 2014, and a 50% as stickers, lanyards and charms. Each of Spin Master Corp.’s $69.99 for a toy. “You don’t want D.C., that had it in stock, and or-
increase in uploads. “It’s like a ‘Blind Bag’ on ste- Hatchimals Surprise, released in to worry a mom spending $70 and dered the toy for next-day pickup.
With the weeks between roids,” says co-chief executive Paul October, holds plush twin critters getting something she doesn’t He ended up buying three. Violet
Thanksgiving and Christmas mak- Solomon, referring to the popular in a single egg that cracks open af- want,” he says. received her Big Surprise in ex-
ing up one-third of the entire $27 merchandising concept of hiding ter being cuddled. The demand for unbox- change for an excess of Halloween
billion toy business, according to small figurines in foil bags. “We When designing the toy, the ing toys has been a welcome sur- candy. Mr. Tu intends to give the
Juli Lennett, senior toy analyst at put a lot of focus on packaging company decided to provide con- prise for companies, whose prod- other two to his nieces, ages 5 and
market-research firm NPD Group, and presentation.” sumers with a clue, says James ucts must compete with the lure of 2½, for Christmas.




RELEASED IN MAY 1975, 10cc’s After breakfast, I went off to the
“I’m Not in Love” reached #2 on living room, where I had a grand pi-
Billboard’s pop chart and helped ano and my acoustic guitar. I began
inspire the British synth-pop writing a song about saying “I love
movement of the early ‘80s. Re- you” without actually saying it.
cently, co-writer, electric pianist As I worked on the lyrics, I tried
and lead vocalist Eric Stewart; co- to balance what Gloria wanted me
writer, guitarist and bassist Gra- to say and how saying it would
ham Gouldman; drummer Kevin trivialize how much I loved her. At
Godley; pianist Lol Creme and for- first, I tried a contrast. I sang, “I’m
mer receptionist Cathy Redfern not in love” followed by things like
talked about the song’s evolution. “It’s because I adore you.” But on
Mr. Stewart’s latest album is “An- paper, it seemed clichéd and trite.
thology” (Cherry Red), Mr. Gould- Instead, I wrote about the con-
man’s is “Play Nicely and Share” flict between feeling a certain way
(Wienerworld) and Mr. Godley’s is and avoiding expressing it.
“Muscle Memory” (PledgeMusic). When I arrived at Strawberry
Edited from interviews. Studios in Stockport, about 20
minutes from my home, Lol Creme

Eric Stewart: One morning in the and Kevin Godley were busy on an-
fall of 1974, my wife, Gloria, and I other song. So Graham Gouldman
were having breakfast at home in and I worked on “I’m Not in Love.”
England. At some point, she said, He came up with masterful chords.
“Why don’t you say you love me so
much any more?” Graham Gouldman: We also needed a
We had been married nine years second eight-bar bridge. All at once,
by then. I said, “Look, if I say that Eric and I came up with, “Oooh,
every day, the words will lose their you’ll wait a long time for me”
meaning, won’t they?” She said, along with the music and chords.
10cc in 1975. From left, Graham Gouldman, Eric Stewart, Kevin Godley and Lol Creme. “No, they won’t.” We left it at that. Please see ANATOMY page A13
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A12 | Monday, November 27, 2017 NY THE WALL STREET JOURNAL.



The Football Team Full of Ph.Ds

The Brigham Young University women’s faculty flag football team spends a night each week battling younger opponents
THE WOMEN on Brigham Young
University’s faculty flag football
team are no slouches on the field
or in the classroom. The team in-
cludes lawyers, astrophysicists, po-
litical scientists and psychologists.
“Most of the people on the team
have at least three degrees,” says
team captain Denise Stephens, an
associate professor in the depart-
ment of physics and astronomy.
Since forming in 2011, A Lot has
been the sole women’s intramurals
faculty team, playing opponents an
average of 20 years younger on A Note on
fields at the Provo, Utah, campus. ACL Injuries
Head coach and associate political
science professor Jessica Preece Anywhere from 80,000 to
jokes that the team doesn’t score 250,000 ACL injuries occur each
often, but the name is a reminder year in the U.S., according to the
that, even if they don’t win, they American College of Sports Medi-
still have great parking. cine. The ligament connects the
Kif Augustine-Adams, a profes- femur to the tibia and helps sta-
sor of law at BYU’s J. Reuben Clark bilize the knee during cutting and
Law School, has played defensive pivoting activities. The injury is
tackle since the team’s inception. frequently associated with sports
At 53, she’s one of the oldest but can occur in daily life, like if
members. “I’m gray-haired and you suddenly lunge to grab
starting to wrinkle, but when I ef- something, says Margot Putukian,
fectively block a 20-year-old on director of athletic medicine at
the defensive line or rush the op- Princeton University.
posing quarterback and almost Data suggests that noncon-
pull her flags before she throws, I tact ACL injuries can be pre-
feel triumphant,” she says. vented by implementing
The team recruited Dr. Ste- strengthening exercises that tar-
phens, 43, in 2014 after learning says she sees A Lot BYU’s women’s faculty flag football team play women half their age. Meagan Ricks, below, get the core and the muscles
she played on a recreational soccer as role models for runs with the ball. Denise Stephens, above, has helped lead the women’s faculty flag football surrounding the hip and lower ex-
team. At first, she was pegged to students. “It’s good team to its winningest season this year. tremities, Dr. Putukian says.
play safety because of her speed. for the younger gen- “Exercises that work on im-
But when teammates saw that she eration to see that proving the techniques of jump-
could also catch a football, they your athletic life ing and landing, so that the knee
moved her to wide receiver. On de- doesn’t have to end is flexed and the knee remains
fense she plays cornerback. after college,” she over the toe, can lessen impact
“My legs get a great workout says. forces,” she says.


trying to pick off 20-year-old re- The team finished If someone sustains an ACL
ceivers,” she says. “It feels like do- the regular season injury and requires surgery, a re-
ing wind sprints.” 2-3. “It’s probably habilitation program should allow
This season, as team captain, our best season them to return to sports, Dr. Pu-
Dr. Stephens has played every po- ever,” Dr. Stephens tukian says. “An emphasis on
sition except running back. “I’m says. If A Lot wins hamstring strength versus quad-
like a mom, making sacrifices so its tournament game riceps strength is recommended,”
everyone is happy and positions on Nov. 30, the team she says, “and one-legged squats
are covered,” she says. will advance to the or functional training emphasizing
Dr. Stephens had surgery for a divisional champion- balance and proprioception are
torn right anterior cruciate liga- ship on Dec. 2. useful.”
ment seven years ago, and last
fall she had her right meniscus re- The Workout
moved following a soccer injury. Flag football has Her indulgence is Baskin-Robbins
She has reluctantly decided to spring (April-May) peanut butter ’n chocolate ice
give up soccer. Flag football re- and fall (September- cream.
quires diving and quick moves, November) seasons.
but Dr. Stephens says it’s less ag- A Lot held formal The Gear
gressive than soccer and allows practices once a Dr. Stephens wears soccer cleats, a
her to have a competitive outlet week during its first knee brace, a team jersey and yoga
with less risk of injury. “The most season in 2011 to work on plays, ranging from 5Ks to half-mara- when she can’t make it to the gym. pants for games. “Some ladies
common injury is breaking a fin- but it became too tough to sched- thons. wear sticky football gloves, and I
ger while trying to nab a flag,” ule. Games take place one night a Dr. Stephens alternates running The Diet need to get a pair,” she says. Each
she says. week and consist of two 20-minute with strength training at the BYU “I’ll be honest, I’m not the best team pays $40 for one season of
Completing passes and gaining halves, with seven players on each gym, which faculty members can with diet,” Dr. Stephens says. Pre- flag football, which works out to
yards has brought the women to- side on the field. use at no cost. She does four to run she makes a SlimFast shake about $5 per member. Because Dr.
gether as friends and colleagues. On the morning of a game, Dr. five exercises focusing on upper with almond milk. Post-run, she Stephens often runs in the dark,
“A lot of academic collaboration Stephens likes to run. “I think it body one day and on lower an- has a protein shake or, if she isn’t she also uses a reflective vest and
has happened because of A Lot,” loosens up my body,” she says. She other. teaching, she might have a fried headlamp. She pays between $100
says Dr. Stephens, who is working runs for 60 to 70 minutes three Lower-body strength has been egg with toast and avocado. A and $130 for her Altra running
with two teammates to write a days a week, often at 5 a.m. “I’m especially crucial since her knee chicken breast, an apple, cheese sneakers.
grant for the National Science also an astronomer, so getting to injuries. “I’ve learned to love the sticks, celery or cucumber slices,
Foundation to increase the reten- see the constellations while I run leg-press machine,” Dr. Stephens and Greek yogurt go into her lunch The Playlist
tion of women majoring in the sci- is incentive to wake early,” she says. She also uses the hamstring- bag. With seven children, she jokes “I have an ’80s playlist of songs like
ences. says. Afterward, Dr. Stephens curl machine and does lunges, calf that dinner is “whatever I can get ‘Girls Just Want To Have Fun,’ by
Dr. Stephens, who is married spends 10 minutes stretching. She raises and squats. She keeps a set my kids to eat.” Fajitas and spa- Cyndi Lauper, and ‘Vogue,’ by Ma-
with seven children ages 3 to 21, also competes in five races a year, of dumbbells at home for the days ghetti and meatballs are staples. donna. I also like upbeat country.”

Tuesday December 5, 2017 at 10 am


Wednesday December 6, 2017 at 10am
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THE WALL STREET JOURNAL. Monday, November 27, 2017 | A13


sorship for Magrath at Harvard of her approach.
and established the first Depart- These Nutshells are in a mu-
ment of Legal Medicine there, seum because of Lee’s demand
teaching a scientific approach to that they display “the utmost ac-
crime. The replacement of elected curacy and fidelity in dimension
coroners by physician medical ex- and proportion.” She would some-
aminers was times combine
spurred by her known cases, but
advocacy. otherwise detail
In 1943, at 65, was scrupulously
she began to accurate. Though
create finely de- these scenes

tailed scenes to cannot be

teach criminal touched by visi-
investigation. tors, locks can
She used them be turned with a
during weeklong key, shades can
seminars to be opened and
train police. And closed. Lee knit
when the Har- tiny stockings
vard department for one victim
closed in 1967, and wrote let-
her scenes, ters for another
which she called using the tip of
Nutshells, were a human hair. In
sent to the Of- one Nutshell, the
fice of the Chief wood used for
Medical Exam- the barn authen-
iner in Balti- Frances Glessner Lee’s Nutshells: tically came
more. Together ‘Red Bedroom’ (c. 1944-48), left, and from a hundred-
with one held a detail of ‘Barn,’ also known as year-old shed on
elsewhere, the ‘The Case of the Hanging Farmer’ Lee’s property.
surviving 19 are (c. 1943-44), above Doll houses
temporarily were a great
united here. Victorian preoccupation. Lee took
Each is accompanied by a short that domain of feminine play and,
description of its characters and in a bizarre twist that was surely
EXHIBITION REVIEW situation. Each can be viewed with related to her own restricted home
a magnifying glass. And in each, life, overturned it, creating gro-
the goal is to determine not who- tesque, artful scenes of domestic

Murder, She Built dunit but whether death is an acci- violence. As the exhibition points
dent, murder or suicide. “Solu-
tions” are not revealed because
the Nutshells are still used for
out, the setting for 17 of the Nut-
shells is the home; victims were
largely women. They are shot in
teaching. But isn’t it strange that bed, hanged in an attic, or dead in
woman born in the Victorian Mid- amounts of decay. But what was in the massacre of an entire fam- a bathtub. Lee put a miniature
west to have been so practiced in her motive? ily, the rifle is left in the kitchen, a painting of her home in one Nut-
killing: hanging, stabbing, shoot- Lee was a brilliant eccentric, shell is found in a child’s room, shell, and sometimes used her own
Washington ing, burning. She was obsessive. If heiress to an International Har- and toy chairs on a dresser are wallpaper and furniture for mod-
WE NOW KNOW whodunit. And she left clues it was deliberate: an vester fortune, who was prevented overturned? Or that a woman on a els. In some ways, she was making
with the startling exhibition “Mur- angled pattern in the blood splat- from going to college or pursuing parsonage floor seems a lot more exaggerated self-portraits.
der Is Her Hobby: Frances Glessner ter or crumbled love letters on an a profession by her father. She freshly dead than the maggot-cov- The exhibition, we are con-
Lee and the Nutshell Studies of attic floor. Money was irrelevant; grew up in coddled solitude in a ered meat she was supposedly car- vinced, has it right: She had the
Unexplained Death” at the Renwick she didn’t need any, already pos- granite castle-like home in Chi- rying? means, she had the opportunities
Gallery of the Smithsonian Ameri- sessing millions. Each killing cost cago. It wasn’t until she inherited The writer Erle Stanley Gardner and she also had motives for her
can Art Museum, we now know a her as much as $6,000—the price, her fortune with the death of her became a fan, attended her semi- unexplained crimes.
lot more about how she dunit. The in the 1940s, of a home. father in 1936—when she was in nars, and said she was the only
best forensic minds have scruti- The most peculiar thing is that her late 50s—that she could culti- person who surpassed Perry Ma-
nized the evidence. A serial perp, she executed her plans using a vate her passion, which wasn’t for son in criminal insight; he would Murder Is Her Hobby: Frances
with perhaps 20 murders to her custom ruler that turned every committing murders, but solving have known. She may have been Glessner Lee and the Nutshell
name, Frances Glessner Lee foot into an inch. A 30-inch-high them. the inspiration for Angela Lans- Studies of Unexplained Death
(1878-1962) planned crimes down dining-room table became 2.5 As a child, she had followed bury’s character in the TV series Renwick Gallery at the Smithsonian
to the finest detail: the calendars inches tall. A revolver was an inch Sherlock Holmes and later became “Murder, She Wrote.” She is the American Art Museum, through Jan.
she hung on the walls, the water long. Lee was a miniaturist of a friend of George Burgess subject of a forthcoming documen- 28, 2018
stains she created, a carton la- murder. And these crimes? She Magrath, who studied medicine at tary by Susan Marks (part of
beled “Campbell’s soup” half- staged them inside doll houses. Harvard and became Medical Ex- which appears in the exhibition).
stowed. The dead were bloodied dolls aminer of Suffolk County in Mas- And she inspired episodes of Mr. Rothstein is the Journal’s
It is almost unheard of for a painted to reflect appropriate sachusetts. Lee endowed a profes- “C.S.I.”—a series that evolved out Critic-at-Large.

Continued from page A11
Mr. Stewart: When Graham and I finished,
Kevin and Lol joined us, and we recorded
our first run-through using a light bossa
nova beat. But during the playback, Kevin
wasn’t happy with the bossa.

Kevin Godley: For me, the bossa thing wasn’t

daring. We needed something bigger and
more atmospheric and evocative. What I
heard in my head was a wash of voices, a
choir that would hover above the music, like
the one I had heard in the movie “2001: A
Space Odyssey.”

Lol Creme: Kevin’s choir idea was great but it

would be costly. Instead, I suggested we re-
cord the voice parts ourselves. I said we
could do it by singing 13 notes in a chro-
matic scale and recording them onto 13 dif-

ferent tape loops. Then we’d record the

loops individually onto our 16-track tape

Mr. Stewart: It was ingenious. But first we Cathy Redfern at Strawberry Studios in 1974.
had to record the song’s basic rhythm track
and my lead vocal as a guide. sounded harsh. So I changed it to “Be quiet,
On one track, I played the electric piano big boys don’t cry,” which felt softer and
and sang the lead vocal. Graham played more comforting.
rhythm guitar on the second track. On the
third, Kevin used a mini-Moog set to sound Ms. Redfern: I went into the studio with
like a bass drum. Kevin, who was there to steady me and give
Once we recorded the rhythm track, we me a cue. We both put on headphones so we
spent weeks recording our voices and trans- could hear the song. Kevin touched my arm
ferring them onto our recorder. Then the four when it was time to say the words.
of us worked the mixing console’s 24 volume
faders with two hands to create a choir be- Mr. Stewart: At first, Cathy’s delivery wasn’t
hind the rhythm track and my lead vocal. musical enough. We said, “Go softer, go
softer, Cathy. Whisper. Get closer to the
Perfect Holiday Palette
Mr. Creme: The song still needed texture. I mic.” Then she got it. Color-Changing Alexandrite
suggested Graham overdub an eight-bar
bass solo on the first bridge. Next came my Ms. Redfern: Hearing my voice after was sur-
Color-changing stone. Extraordinary rarity. Natural wonder.
piano intro to the bridge. I also suggested real. I couldn’t believe it was me. I was This highly coveted gem exhibits one of nature’s most
we have a female voice whisper, “Get it to- thrilled. fascinating phenomena. The rare 1.94-carat alexandrite
gether.” displays a lovely greenish hue in daylight, and transforms
Mr. Creme: I went out and bought a child’s to a rich burgundy hue when exposed to incandescent light.
Mr. Stewart: At that very moment in our con- plastic toy music box. When you pulled the
versation, Cathy Redfern, the studio’s recep- box’s string, it played the English nursery
Certified by the Gemological Institute of America as a natural
tionist, stuck her head in. She whispered, rhyme, “Boys and Girls Come Out to Play.” alexandrite, it has undergone no treatment or enhancements
“Eric, there’s someone on the phone for I swung the little box over my head be- to achieve its unique color change. Set in 18K yellow gold
you,” and left. Lol said, “That’s it! Let’s get tween the two mics as it played the tune. with Old European-cut diamonds. #30-6079
Cathy to speak the words.” We wound up with an eerie sound, shifting
from one speaker to the other.
Mr. Creme: I went down the hall after Cathy.
When I told her what we wanted, she pro- Mr. Stewart: When we finished the album, I
tested a bit, saying she had never recorded drove Gloria to the studio. The wives of the
anything before. other guys joined us. We turned out the
lights and listened to the whole thing, play-
Cathy Redfern: I was 21 then. I adored the ing it over and over for what seemed like
boys, and they treated me like their sister. hours. Everybody loved it.
When Lol told me their idea, I thought it On the drive home, Gloria asked what
might be a prank. They were always kidding “I’m Not in Love” was about. I told her, “It’s 630 Royal Street, New Orleans, Louisiana • 888-867-9583 • •
around. But Lol picked me up and threw me my answer to your question about why I
over his shoulder. In the control room, the didn’t say ‘I love you’ more often.’” Since 1912, M.S. Rau Antiques has specialized in the world’s finest art, antiques and jewelry.
guys were serious. Gloria said the song was so beautiful. Backed by our unprecedented 125% Guarantee, we stand behind each and every piece.
Then she said, “I’d still love if you’d say ‘I
Mr. Creme: But the more I thought about love you’ more often.” From then on, I’ve
that line, the more “Get it together” said ‘I love you’ to Gloria every night.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or
A14 | Monday, November 27, 2017 * * THE WALL STREET JOURNAL.


Philly Is Feeling Good...and It’s Weird
Yes: I need to spend
the rest of this week
having a full-blown
panic attack about Sat-
urday’s Wisconsin vs.
Ohio State Big Ten
championship—in my nightmares,
Urban Meyer is sitting in my
kitchen in a Buckeyes windbreaker,
cackling, eating all of my Trader
Joe’s animal crackers.
But before my sweaty Badger
anxiety kicks in, let’s address a
handful of NFL topics. (The NFL is
the pro-style football league that
plays on Sundays, Mondays and, I
believe, most Thursdays.)

1. The Philadelphia Eagles are very

Auburn is in the SEC title game. good. I know: I’m really going out on
a long limb of courage here, after
the Eagles improved to 10-1 follow-
ing Sunday’s 31-3 demolition of Chi-
cago. I can’t be the only person
who’s been quietly waiting for an
THERE ARE potentially cataclys- Eagles implosion, which has yet to
mic scenarios every season that happen—and may not, because this
would force the College Football Philadelphia outfit is balanced and
Playoff committee into tricky deci- confident. It has an MVP fave in tall
sions. Occasionally, one of them person and second-year quarterback
comes true. This year, pretty much Carson Wentz; It has one of the
all of them did. league’s highest-rated defenses;
No. 1 Alabama (11-1) had its un- There’s a giddy optimism around the
defeated season ruined by rival Au- club that feels, well, un-Philly-like.
burn in the Iron Bowl on Saturday, Philly fans can be tough. A few
and there is a real possibility the years ago, former Journal col-
Crimson Tide won’t make the play- league Mike Sielski left to become
off. Auburn (10-2) gets the chance a (great!) sports columnist at the
to play Georgia (11-1) in the South- Philadelphia Inquirer, and to an av-
eastern Conference title game. ocado toast-eating New York me-
The winner of that game will al- dia sissy like me, his job looks like
most certainly make the four-team a meat suit in a shark tank. But lo,
field. Either way, this year’s playoff here’s a shiny, happy Philadelphia
could be headed toward unprece- sports sensation—the Eagles are
dented territory. A two-loss team off to their best start since the
has never made the playoff before. 2004 club that reached the Super
Now there might be as many as Bowl, the rest of the NFC East is Philadelphia Eagles receiver Nelson Agholor leaps over Chicago Bears cornerback Kyle Fuller for a touchdown.
three. Two teams from the same dusted in the rear view, and local
conference have never made it to- complaints are hard to find. An the Atlanta Falcons—the good like he’s going to help me collect bums me out—football is better
gether. Now the SEC might rewrite Eagles team with a rowdy home kind, not the kind we laugh at. Ha- lobster pots and inspect shellfish- when the Cowboys are rocking,
that rule. Alabama has never not field could be a real handful in the haha, they’ve heard all your 28-3 ing licenses on a snowy morning and I still want to see Jerry and
been in the playoff. Now the Crim- playoffs. Of course, I am sure I just jokes—they’re hilllllarrrious!—but off Cuttyhunk. Related: The Patri- Roger Goodell settle their dispute
son Tide might be on the outside jinxed them, and now I’m going to lately they’ve been playing like ots are now 9-2, with four of their with a Gulfstream race.
looking in. get all of Sielski’s angry mail. they’re sick of them. After Sun- last five games coming from the
Auburn helps explain just how day’s 34-20 win over Tampa Bay, buffet that is the AFC East. 7. MR. KHAKIPANTS NFL RU-
peculiar this season has been. It 2. The Minnesota Vikings could be- the Falcons have won 4 of 5, seem MORS. As soon as the Peripatetic
doesn’t matter that the Tigers have come the first NFL team to, you comfortable in their fancy-pants Jim Harbaugh arrived in Ann Ar-
lost twice. They also might be the know. Vikings fans will haaaate new space station/nuclear reactor, bor, it was inevitable that rumors
best team in the country. Another that I’m even whispering about the and are starting to resemble their like this would happen—even if
win over Georgia would all but possibility that Minnesota could dynamic 2016 selves. Julio Jones
An Eagles team with a there’s not even a hint of smoke
rowdy home-field

clinch their playoff spot. host a Super Bowl on its actual had 253 yards receiving versus the that Mr. Khakipants is interested
Alabama doesn’t have another home field. Thanks a lot, Jinxy Bucs, which is more yards than in wearing his khakis on another
chance to strengthen its resume. McJinxFace! But it’s hard to not be the Browns have had in the last 47
advantage could be a sideline. There’s this, however:
Nick Saban’s team will be stuck enthused about these matte Purple seasons combined. handful in the playoffs. Fox’s Jay Glazer reported that a
rooting for two-loss Ohio State to Vikings, especially if you watched number of NFL clubs are enjoying
beat undefeated Wisconsin in the that Turkey Day handling of the Li- 4. Are the Browns going to go the recent Wolverines skid, hoping
Big Ten Conference championship ons (burp!) Case Keenum: Who 0-16? Mmmm, very possi- it would inspire Harbaugh to con-
and two-loss Texas Christian to up- knew? (Besides Case Keenum.) I’m ble…though they do have a Grinch 6. The Cowboys’ star is fading. sider a return to the pro ranks.
set one-loss Oklahoma in the Big 12 going to shut up now because Min- Special Christmas Eve game The wagon wheels appear off in Personally, I don’t like it when tal-
Conference title game. nesota fans are going to get against the Bears. Bears vs. Dallas, now 5-6 after a Thanksgiv- ented coaches leave unfinished
There is no provision in the grouchy. But listen: don’t Airbnb Browns: The perfect way to tell ing home thrashing by the Los business behind—like that old Mi-
sport’s governing documents that your place yet for the first weekend your family: I hate the holidays. Angeles-ish Chargers. Finger ami Dolphins coach, Nicholas Sa-
stipulates Alabama must be in the of February! How would you feel if pointing has commenced; Cow- ban, who fled the NFL to go back
playoff. (We checked.) But any con- the Vikings were in a hometown 5. Grumpy Lobster Boat Captain boys released running back Dar- to the college game, and was
versation about the four best Super Bowl and you had six wea- Bill Belichick Is Scissoring Off His ren McFadden this weekend; and never heard from, ever again.
teams in college football must in- selly Patriots fans sleeping in your Sleeves Again. I don’t know about Jerry Jones disappointingly ap- Whatever happened to Saban?
clude the Crimson Tide. There are guest bedroom, eating Pop-Tarts you, but I don’t like it when Bill pears to have stood down in his I’ve been so focused on America’s
two-loss teams being considered and asking for the Wi-Fi password? wears some uncomfortable, ironed legal battle to turn the NFL last truly great college football
for the fourth playoff spot while Al- Nike pullover like it’s Date Night league office into a Jerry Jones team, the Wisconsin Badgers. And
abama has only one loss. 3. The Atlanta Falcons look like at Panera. I want Belichick to look Original Texas Steakhouse. This my Ohio State panic attack.

Weather The WSJ Daily Crossword | Edited by Mike Shenk

Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day.
Edmonton <0 1 2 3 4 5 6 7 8 9 10 11 12 13 Down 34 Island east of
0s 1 “Breakfast at Java
Vancouver Calgary
Calgary 30s 0s 14 15 16
Tiffany’s” author 36 Bad thing to hit
Winnipeg 17 18 19
Seattle 10s 20s 2 Perfect place 37 God with a
30s 20s
Por d 50s t
Montreal 30s 20 21 22 23 3 Put up a fight trident
Helena A
Ottawa 40s
Billings Bismarckk 30s 24 25 26 27 28 4 Fills completely 39 Lush
Eugene 30s 40s
Torontot A
Albany y 50s
p s /St. Pa
Boston Paul 5 Angsty rock 40 “Ewww, enough
40s Boise 30s ff l
Buffalo 60s
29 30 31 32 33
oux FFalls
Pierre Sioux ll Detroit
Hartford genre already!”
Milwaukee k New Yorkk
ew Y
Chic g 70s 34 35
Reno es Moines
Des Cleveland 6 Piccolo’s cousin 41 Chivalrous offer
ltt Lake
L City
City Cheyenne Omaha h Phhil d lphi
Philadelphia 80s
40s 60s Pittsbb
Pittsburghg h 36 37 38 39
42 Lavished
Sacramento Denver p g d Indianapolis
Springfield di p 7 Bone-dry
50s Washingtonhington
hi gton D.C.
DC 90s
an Francisco 50s Topeka Kansas C h l
Charleston 40 41 42 affection (on)
C d
Colorado 70s City h
Richmond d 100+ 8 Big Apple line
60s Vegas St.. Lou
LLouis LLouisville
p g
Springs h
Raleigh h 43 44 45 46 47 9 Some are bitter 44 EMT expertise
h ill
Los A
Ange l 70s Santaa FFe 80s C h l tt
Charlotte 45 Climbs, or what
Oklahoma City Memphis hi 10 Shout to a sailor
70s Ph Alb q q
Albuquerque 60s 48 49 50 51
San Diego 60s
Phoenix C
Warm Rain the starred
Little Rock Atlanta
Atl t
80s Tucson
T c i h
Birmingham 52 53 54 55 56 11 Chewy squid answers all have
90s El Paso 80s Ft. Worth Dallas
D ll 70s appetizer
Cold T-storms
J k
Jacksonville 57 58 59 60 46 “Shoot!”
bil 12 “Well, here we
0s A ti
Austin 70s Stationary Snow 47 Like the smell of
Houstont go!”
-0s Newew Orleans l d
Orlando 61 62 63
10s Tampa bread dough
70s an Antonio
San A t i
13 ___ Antonio
A h g Honolulu
l l Showers Flurries 64 65 66 51 Extreme
20s Miami
80s 80s
30s 80s 60s 18 Worries
40s Ice 53 Not at all wild
CLIMBS | By Zhouqin Burnikel 23 “Moreover...”
54 Destiny’s Child,
U.S. Forecasts City Hi
Lo W
Hi Lo W City Hi
Lo W
Hi Lo W
Across 27 Soccer star 48 Anger 25 Takes advantage
for one
s...sunny; pc... partly cloudy; c...cloudy; sh...showers; 1 Say bad words Hamm 49 Paper towel
Omaha 71 40 s 55 25 pc Frankfurt 42 39 pc 42 31 r 55 Societal troubles
t...t’storms; r...rain; sf...snow flurries; sn...snow; 26 Isn’t frugal
Today Tomorrow
Orlando 76 61 s 78 63 pc Geneva 42 31 pc 44 36 r 6 Fortune’s partner 29 Grab a bite layer
57 Give under
Philadelphia 52 34 s 57 43 s Havana 81 64 sh 84 66 pc 28 Pop the question
City Hi Lo W Hi Lo W Phoenix 83 52 s 78 59 s Hong Kong 75 71 c 78 72 pc 10 Makes a move 30 •State fish of 50 “Great pressure
Anchorage 23 16 c 26 23 c Pittsburgh 49 37 s 58 43 s Istanbul 63 50 r 56 47 r Rhode Island comeback!” 31 “Believe It or
Atlanta 63 40 s 64 46 s Portland, Maine 41 18 pc 39 33 pc Jakarta 88 77 t 87 76 t 14 First-stringers 59 Lifeboat mover
34 In addition 52 Explosive stuff Not!” guy
Austin 77 51 s 78 52 s Portland, Ore. 50 43 pc 49 39 r Jerusalem 60 47 pc 62 46 s 60 Muscles
Baltimore 56 34 s 60 39 s Sacramento 60 41 pc 60 45 pc Johannesburg 70 52 pc 72 55 pc
15 It’s west of 32 Mental flashes
Afghanistan 35 Composer Satie 54 Suit accessory strengthened by
Boise 49 31 c 50 32 pc St. Louis 69 47 s 73 46 s London 51 37 r 43 34 pc
33 Noggin belly-dancing
Boston 46 27 pc 44 40 s Salt Lake City 60 31 r 49 34 pc Madrid 55 29 pc 56 38 c 16 “That’s so funny!” 36 Places to relax in 56 Logan of
Burlington 34 19 sf 45 41 pc San Francisco 62 48 pc 61 50 pc Manila 90 79 s 90 78 pc mud “60 Minutes”
Charlotte 63 33 s 64 35 s Santa Fe 66 32 s 54 25 pc Melbourne 71 55 c 86 64 s 17 •Stamp seller Previous Puzzle’s Solution
Chicago 57 47 pc 60 32 pc Seattle 50 44 c 48 41 r Mexico City 68 42 s 72 43 s 38 Bank counter 57 Pop in a bottle M I S O SWF S E N E C A
Cleveland 50 42 s 59 43 s Sioux Falls 68 40 pc 50 27 pc Milan 46 30 pc 42 35 pc 19 Lena of “The fixture I R A N OWL E MO J I S
Dallas 77 56 s 75 48 s Wash., D.C. 58 39 s 61 43 s Moscow 30 25 c 29 22 sn Reader” 58 •Country R VMA N U F A C T U R E R S
Denver 76 29 pc 49 30 pc Mumbai 93 72 pc 92 74 pc 39 “Bear with me” album? G E L I G H T B U L B T I S
20 Aunt Bee’s
44 38 s
82 72 sh 82 73 r
60 37 s
International Paris
Rio de Janeiro
43 c
73 t
47 34 r
79 70 t charge
40 Hammer or 61 Proton’s place
Houston 76 51 s 80 53 s Today Tomorrow Riyadh 79 60 pc 76 54 s hatchet G B S H AW S Q Y A R D
City Hi Lo W Hi Lo W 21 Pomegranate’s 62 Knight wear E Y E O N B E E P S D A D
Indianapolis 60 42 s 62 40 s Rome 53 32 pc 55 47 pc 41 Princess T I E U P T O MA C E
Kansas City 68 54 s 57 34 pc Amsterdam 49 41 r 46 35 c San Juan 87 75 s 88 76 s color 63 Packers great O P T T V C H A R A C T E R
Las Vegas 68 46 pc 64 49 s Athens 64 49 r 56 46 sh Seoul 42 27 s 48 28 pc Jasmine’s love P R A Y I K E T U G
22 Chichén Itzá Favre R U P A U L S D R A G R A C E
Little Rock 69 41 s 69 46 s Baghdad 66 45 pc 68 46 s Shanghai 63 54 s 66 53 pc 43 •It may involve A N I M A L R A G A L A N
Los Angeles 70 53 pc 76 54 pc Bangkok 89 76 s 91 78 pc Singapore 84 75 t 83 77 c natives 64 Heredity factor
Miami 80 72 pc 81 72 t Beijing 42 28 s 46 19 s Sydney 78 69 t 80 70 t
learning lento H E R S E Y A Y E WA R D

Milwaukee 51 45 pc 54 33 c Berlin 41 39 r 45 34 sh Taipei 74 70 c 85 72 s 24 Sniffler’s need and largo 65 Son of The contest answer is STUFFED CRUST. Each
Minneapolis 58 38 pc 46 27 s Brussels 47 36 r 44 34 sh Tokyo 57 49 pc 60 51 c Aphrodite starred entry begins with a separate two-letter
26 Greed or 45 Veggie burger term: RV, GE, GB, SQ, TV, and RU. Alphabetically
Nashville 64 41 s 66 42 s Buenos Aires 74 46 s 72 54 s Toronto 39 31 s 56 39 s
New Orleans 68 50 s 75 60 s Dubai 81 69 s 84 73 s Vancouver 49 42 r 48 40 r gluttony protein 66 Pert stuffed between the letters of each are R(STU)V,
New York City 50 35 s 54 46 s Dublin 45 34 r 43 32 s Warsaw 39 31 pc 41 33 pc G(F)E, G(FEDC)B, S(R)Q, T(U)V and R(ST)U,
Solve this puzzle online and discuss it at

Oklahoma City 73 52 s 66 39 pc Edinburgh 44 31 r 41 27 pc Zurich 41 34 pc 43 31 c which spell out the contest answer.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or
THE WALL STREET JOURNAL. Monday, November 27, 2017 | A15

Who’s Afraid of Index Funds? BOOKSHELF | By Michael Barone

By Barbara Novick price of these securities be- Combine the effects of What cannot be disputed is An Isolationist
comes increasingly unteth- greater size and faster turn- that indexing’s success has up-
hallenges to the status ered from the value of indi- over, and it’s clear that the ended the status quo. The ef-
quo—political, economic
or social—always evoke
strong emotions, from enthu-
siastic support to fierce criti-
vidual companies. They argue
that companies included in
these indexes see their stock
prices fly higher and higher
price of stocks is overwhelm-
ingly determined by active
Critics of indexing some-
fect will grow as regulatory re-
gimes around the world
require the kind of consumer-
friendly price transparency
Changes His Mind
cism. The loudest critics often regardless of their perfor- times point to the specter of that benefits index products.
have the most to lose, even if mance, while non-indexed a 100% indexed market. What To be sure, there are still
Arthur Vandenberg
they acknowledge some bene- stocks get ignored like wall- would happen, they ask, if in- questions to address. For ex- By Hendrik Meijer
fits of the new regime. flowers at a dance. dexing replaced stock-picking ample, investors need to bet- (Chicago, 432 pages, $35)

This clash is now unfold- entirely? Naturally, this ter understand the difference
ing over ascendant invest- would make it impossible to between plain-vanilla ETFs ny old timer’s lament about the dearth of foreign-
ment vehicles: index and ex- If passive investing price individual securities and highly leveraged exchange policy bipartisanship will surely invoke, sooner or later,
change-traded funds, or ETFs. properly. But this hypotheti- traded notes, or ETNs, which the memory of Arthur Vandenberg—and justifiably so.
The dramatic growth of such creates market cal ignores the natural equi- have more volatile prices. But During World War II and after, the formerly isolationist
products has been revolution- distortions, active librium created by supply and while debate is healthy, it Republican senator provided critical support to the interna-
ary. More investors are demand. needs to be based on facts tionalist policies of Franklin Roosevelt and Harry Truman.
choosing indexing over funds managers can win big. If indexing began to distort rather than fear. There is a big Though he left behind diaries and scrapbooks, there has
managed by traditional stock stock prices, that would cre- difference between disrup- been no definitive biography of Vandenberg since his death
pickers, known in the indus- ate an enormous opportunity tions to the way traditional in 1951. Now there is one, almost serendipitously. Some 25
try as active managers. Since But the numbers tell a dif- for active fund managers to asset managers do business, years ago, the daughter of a deceased academic historian,
2009, U.S. index funds have ferent story. Despite the pop- reap big returns—attracting which certainly are occurring, who had published an account of Vandenberg’s life that
seen inflows of some $1.7 ularity of indexing, active more dollars to those active and disruptions to the basic stopped at 1945, telephoned the Historical Society of
trillion, compared with out- managers still dominate the funds and at least partly re- functioning of capital markets, Michigan and asked if anyone wanted her father’s research
flows of nearly $1 trillion for buying and selling of stocks. versing the flow toward index which are not. files. She was referred to businessman Hendrik Meijer, who
actively managed mutual Indexed assets—including management. This process is Far from undermining the had recently delivered a lecture on his fellow Grand Rapids
funds. mutual funds, ETFs and insti- why active management re- markets, indexing has un- native. Mr. Meijer accepted the papers and, amid his work as
Indexing has democratized tutional portfolios—account mains—and will continue to leashed new competition, chairman of the family-
investing. Today, all Ameri- for less than 20% of all remain—essential. driven innovation and identi- owned Meijer super-
cans can inexpensively and global equities, according to Indexing is only one com- fied new ways to deliver prof- market and retail chain,
conveniently invest in mar- our analysis. That’s about ponent of a diverse, robust its. Even active managers are conducted dozens of
kets, countries and strategies $12 trillion of a $68 trillion and constantly innovating using more ETFs, while every- interviews and consulted
once open only to institu- market. The rest is actively ecosystem. Think of ETFs day investors are saving more. multiple archives. The result
tional investors. Yet a few de- managed. and index funds as levers The rise of indexing has is “Arthur Vandenberg: The
tractors have compared such Those actively managed that sit alongside individual changed for the better the Man in the Middle of the
passive investing to Marxism assets trying to beat the mar- stocks and bonds, actively way all investors seek returns, American Century,” an engag-
and declared it an existential ket trade much more fre- managed funds, futures and manage risk and build portfo- ing and thorough account of
threat to the modern securi- quently than indexed assets swaps, private equity and lios. That’s a development ev- Vandenberg’s life.
ties market. What exactly do do. At BlackRock, we estimate IPOs. Together, they combine eryone should welcome. The man Mr. Meijer describes
they object to? that for every $1 of U.S. stock to support the smooth func- was a natural politician with a
As more individuals and trades driven by investors tioning of U.S. capital mar- Ms. Novick is a co-founder Horatio Alger beginning. He
institutions invest in index buying or selling index funds, kets and Americans’ ability and vice chairman of Black- started working at age 9, when his
products rather than individ- there are $22 of trades to confidently buy and sell Rock, a global leader in asset father’s harness-making business foundered
ual stocks, critics claim, the driven by active stock pickers. securities. management. in the depression of 1893. He spent a year at the University of
Michigan, lost one job for playing hooky to see vice-presidential
candidate Theodore Roosevelt in 1900, and snagged another at

Puerto Rico Doesn’t Want Reform the Grand Rapids Herald, soon turning in more copy than any
other reporter. In 1906 the paper’s editor died, and the propri-
etor, soon-to-be Sen. William Alden Smith, named Vandenberg
It has been 10 of existing debt.” Heaven locked in a power struggle, Yet mutual assistance is all to replace him. He was five days short of turning 22.
weeks since forbid. and the board is losing. about emergency response Vandenberg’s prose style—featuring “five-dollar words”
Hurricane Ma- More unthinkable was ru- The Prepa fiasco is in- and the company could have and “overstuffed phrasing”—doesn’t match our modern
ria slammed ining the “flat broke” image structive. Earlier this month solved its money problems by tastes, Mr. Meijer concedes. But it made him influential in
into Puerto the commonwealth has been Mr. Rosselló’s handpicked accepting the financing offer Michigan. He wrote two books praising his hero, Alexander
Rico. The dev- cultivating so it can write Prepa director, Ricardo Ra- from Prepa bondholders. Hamilton, and defended the homespun businessman at the
AMERICAS astation was down debt and skip the mos, resigned amid allega- Then again Mr. Ramos was center of “Babbitt,” Sinclair Lewis’s 1922 satirical novel.
fierce. Yet it matching requirements nec- tions that he grossly mis- a political hire and may have “Without him this would be a sodden land,” he editorialized.
By Mary
cannot ex- essary to receive Federal managed the hurricane lacked the necessary utility Vandenberg was gearing up to run for the Senate in 1928
plain why al- Emergency Management recovery. As the Journal’s experience to handle the cri- and, when the incumbent died, was appointed to fill the
most half the Agency funds. It’s also more Andrew Scurria reported ear- sis. And Mr. Rosselló almost vacancy; he won with 72% in November. With the auto
generating ca- convenient to tap taxpayers lier this month, a $300 mil- certainly didn’t want to give boom, Michigan was the fastest-growing state east of the
pacity of the Puerto Rico Elec- than to borrow money from lion no-bid contract with creditors—whom the Promesa Rockies and north of Florida, and Vandenberg kept his eye
tric Power Authority (Prepa) private entities asking for ac- Whitefish Energy Holdings to board has already sidelined— on the new masses of auto workers in Detroit and Flint.
is still down. countability. This is particu- restore the island’s power new leverage over an institu- After Michigan’s banks were forced to close in February
Credit for that goes to larly true for a state-owned lacked protections for Prepa tion that, according to Puerto 1933, he was the prime sponsor of federal deposit insurance
Congress, which in June 2016 monopoly like Prepa, which is and went against the recom- Rican tradition, is part of his and, with the help of Vice President John Nance Garner,
passed the Puerto Rico Over- as much a political instru- mendations of the utility’s fiefdom. overcame Franklin Roosevelt’s opposition to the measure.
sight Management and Eco- ment as it is an electricity lawyers. Now Mr. Rosselló is asking Vandenberg was the only Republican senator from a large
nomic Stability Act, a k a company. for $94 billion in aid from industrial state re-elected in the Democratic year of 1934.
Promesa. It opened the door When critics complained Washington for reconstruc-
to debt defaults that violate last year that Promesa would The Promesa law, not tion costs. But he’s refused to
the Puerto Rican constitution alleviate the pressure on is- implement furloughs and Having opposed Lend-Lease and supported
and U.S. law. As is always the land politicians to reform the Hurricane Maria, is pension cuts mandated by the neutrality, a prominent Republican senator
case when the rule of law welfare state, their concerns the real culprit behind Promesa board. In August the
takes a back seat to politics, were pooh-poohed. Congress board sued him for that. The decided to back FDR and internationalism.
it has fueled chaos. said Promesa’s “financial the island’s troubles. matter was dropped after
Prepa blames its disas- management and oversight Maria hit and so was the
trous post-hurricane deci- board” would impose the broader board-certified fiscal Mr. Meijer does not sidestep Vandenberg’s peccadilloes. In
sions on a shortage of cash. discipline necessary for re- Before a House subcom- plan requiring Puerto Rico to the late 1930s he sometimes drank too much, and he had an
Yet in the immediate after- form. Negotiated settlements mittee on Nov. 14 Mr. Ramos tighten its belt. affair with the wife of a British diplomat. He was an active
math of the storm, a group of with bondholders were to be defended his decision to hire He then fought the board member of the Nye Committee that blamed World War I on
Prepa bondholders offered given priority and existing the company, arguing that it in court to stop it from ap- munitions makers, a vocal supporter of the 1937 Neutrality
the company fresh debtor-in- restructuring agreements— was driven by a cash crunch. pointing retired Air Force Act, and an opponent of increased defense spending. After a
possession financing that in- like the one between Prepa But that’s a difficult narrative Col. Noel Zamot as “chief failed stab at the 1940 Republican presidential nomination,
cluded a swap of $1 billion in and its creditors—were to be to sustain. transformation officer” to he was the “generalissimo” of the opposition to Roosevelt’s
existing debt for $850 million preserved. After Mr. Rosselló can- run Prepa. Bondholders also Lend-Lease aid to Britain. But as war continued to rage, this
in new bonds and $1 billion None of this happened. Ac- celed the Whitefish contract objected to Mr. Zamot, citing instinctive politician concluded that “prudence lies
in new cash. cording to a spokesman for in late October, Mr. Ramos a lack of utility experience. somewhere in between” isolationism and interventionism.
Puerto Rico rejected the the Ad Hoc Group of Puerto called on the American Public But Mr. Rosselló’s reasoning He voted for Roosevelt’s huge increases in defense
offer. “The bondholders’ pro- Rico General Obligation Power Association and Edi- is that Prepa leadership must spending and backed him solidly after Pearl Harbor, although,
posal is not viable and would Bondholders, the group son Electric Institute for be his call. On Nov. 13 a fed- as he wrote in his diary, “even in the Senate we can’t find out
severely hamper and limit reached a negotiated settle- help. Utility experts say that eral judge ruled in his favor. what’s going on.” He bristled at Roosevelt’s 1943 plan to
Prepa’s capacity to success- ment with the commonwealth post-hurricane protocol is to Last week he announced the deliver relief aid to liberated areas in Europe without
fully manage its recovery,” in the spring. But the go first to these industry bankrupt commonwealth congressional approval, then supported an authorizing joint
Puerto Rico’s Fiscal Agency Promesa board nixed it. The groups, which organize “mu- would pay Christmas bonuses resolution. He persuaded Republican officials, gathered at
and Financial Advisory Au- board also vetoed an existing tual assistance” from other to its employees. their summer 1943 Mackinac Island confab, to back “responsi-
thority said at the time. It agreement between creditors utility companies. Mr. Ros- And so it goes. Mr. Rosselló ble participation . . . in [a] postwar cooperative organization
added that the offer had the and Prepa, in violation of selló has said “Prepa did not liked the Promesa board when among sovereign nations” and in 1944 started working out
“appearance” of “being made Promesa guarantees. go that route . . . because it tore up contracts. But now plans for one with Secretary of State Cordell Hull.
for the purpose of favorably Now the oversight board they had timing issues and he wants it to go away. In January 1945, in a much-noted Senate speech,
impacting the trading price and Gov. Ricardo Rosselló are money issues.” Write to O’ Vandenberg said that, when it came to international
security, no nation “can immunize itself by its own
exclusive action.” The isolationist had become an

What My Mother Told Me About Bad Men internationalist. Roosevelt had seen how Woodrow Wilson’s
failure to include Republicans had resulted in the Versailles
Treaty’s falling short of Senate ratification. So he appointed
By Angela Rocco My mother was born in Italy Don’t misunderstand. The of their little seats. Well, boys Vandenberg, the man in the middle, to the group tasked
DeCarlo in 1903. I doubt she’d ever been Hollywood episodes are more are the same way when they with drafting the United Nations charter in San Francisco.

in a hotel room in her life. Yet about power than carnal at- see a beautiful girl. Don’t take Vandenberg shrewdly held in reserve but never exercised
omen have always had somehow she knew what every traction, though sex is the ob- it personally.” his prerogative of disagreeing with the administration and
to deal with misbe- woman should know—going to jective for sure. The power im- As a teenage model I had an repeatedly used the threat of Senate disapproval to bring
having men—sidewalk a man’s hotel room alone is balance in the film business is assignment for a jewelry photo the Soviet delegation into line. The charter passed the
cat callers, subway gropers, rarely a smart choice. enormous. It’s mostly men shoot. The stylist gave me a Senate 89-2 in July 1945. He mistrusted the Communists,
workplace harassers, and the pulling the strings, deciding length of satin cloth to wrap warning of an “iron curtain” five months before Churchill
occasional complete rotter. Yet which supplicants get roles, around my chest so I could used the phrase. In February 1947, now chairman of the For-
it’s also true that some women Going to a man’s script assignments and other bare my shoulders. After the eign Relations Committee, he was summoned to a meeting
misuse their sexual charms to hotel room alone is high-demand jobs. photographer had taken his with Truman. Britain was pulling out of Greece; Truman
advance in life. The whole ar- Add to that this: Some men shots he wanted a different an- wanted to protect it and Turkey from Soviet takeover. “If
rangement is unfair, often rarely a smart choice. are cracked. They weren’t gle. He tried to reposition the you will say that to the Congress and the country,” Vanden-
predatory and can be degrad- raised by actual wolves but satin cloth. berg asserted, “I will support you and I believe most of its
ing. But it is the way of the something definitely went hay- “I can’t let you do that,” I members will do the same.”
world. Two years ago our local pa- wire somewhere. They see fe- said. He did and they did, but it wasn’t always simple.
“Never go to a man’s hotel per ran a photograph on the males as prey, not just pretties. “You aren’t going to make it Vandenberg maneuvered and added his own touches to the
room,” my mother once told front page of a teenage girl in This is reality and everyone in- as a model with such a silly at- Truman Doctrine, the Marshall Plan and NATO. As Mr. Meijer
me. I had a job profiling ce- a plunging neckline holding a volved should be aware. titude,” he huffed. He was writes: “The line between advice and consent and making
lebrities for Chicago newspa- sign: “Instead of body sham- When my granddaughter, right. I wasn’t going to make policy grew blurred.” Truman’s 1948 victory brought back
pers. I brushed off the ad- ing girls, teach boys that girls Michelle, started high school, I it, especially if compromising Democratic majorities and “an end to Vandenberg’s aura of
vice—I was a professional are not sexual objects.” The could see the boys were gaga my values was the price. indispensability.” His health deteriorated in October 1950, and
woman, after all—until I story, following the notion on over her. To put her on her Don’t go to the hotel room he died six months later. But by then America’s bipartisan Cold
found myself in a hotel room the sign, was that girls should guard I explained how things alone. If you can’t take your War policy was solidly in place and would last for decades. As
with a barefoot guy wearing a be able to appear in any state work. mother, take videos. Mr. Meijer’s first-rate chronicle shows, Vandenberg was very
white terrycloth bathrobe. I of undress and no one, espe- “Mishie,” I said. “You know much, in Dean Acheson’s phrase, “present at the creation.”
kept my back against the door cially boys, had any right to how babies get excited if you Ms. DeCarlo formerly cov-
while he patted the loveseat react. jangle a bunch of keys in front ered culture, travel and enter- Mr. Barone is senior political analyst at the Washington
cushion, bidding me come Sorry, young lady. The world of their faces? They laugh, tainment for the Chicago Trib- Examiner, resident fellow at the American Enterprise
hither. I asked my questions doesn’t work that way. Some- wave their arms and legs, and une and the Las Vegas Review- Institute and author of “Our Country: The Shaping of
and fled. one should have told you. act like they want to jump out Journal. America From Roosevelt to Reagan.”
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or
A16 | Monday, November 27, 2017 THE WALL STREET JOURNAL.


Tax Reform, Growth and the Deficit Not Much Light at End of Afghanistan Tunnel

he Senate may vote as soon as this week three to five years and then settle at 2.5%. The Hy Rothstein and John Arquilla It’s the only approach to Afghanistan
on tax reform, and the outcome hangs Tax Foundation predicts the Senate plan will make the point that’s been proven that has not been tried and failed.
time and again about Afghanistan, BOB BRONSON
on a few GOP holdouts. Two worries of produce more than $1 trillion in revenue, in part
that foreign occupiers face a quagmire Aurora, Ill.
the fence-sitters are how thanks to an investment cata- in an almost ungovernable country
much the reform will improve A U.S. growth rate of lyst from immediate capital ex- (“Trump’s Afghan Policy Goes The State Department is responsi-
the economy and whether it 1.9% will never balance pensing in the first year. Wrong,” op-ed, Nov. 17). President ble for America’s policy implementa-
will add to the federal deficit. The left ignores all this and Obama desperately wanted to pull all tion in Afghanistan, and it does a bad
Let’s examine these concerns the federal budget. flogs as unrefutable whatever forces out of Iraq and Afghanistan, job. The reasons are manifest: lack of
against the budget math and emerges from the Joint Com- but he was trapped by his oft-re- focus, lack of engagement, lack of con-
economic evidence. mittee on Taxation. But Joint peated campaign statement that Af- sistency, lack of talent.
i i i Tax assumes the U.S. is a partially “closed” ghanistan was the “smart war.” When I was in Afghanistan helping
Start with the fact that the GOP budget out- economy with little access to global markets. Forced into a corner, Mr. Obama had to train its police, the biggest regional
line allows for a net tax cut of $1.5 trillion over Its models assume that higher deficits will no choice but to agree with the Penta- challenges were lack of central Afghan
gon’s plan for a major surge, but he government control, local chaos cre-
a decade on a statically scored basis thanks to “crowd out” private borrowing and thus drive
gave the generals fewer troops than ated by the Taliban (supported by Pak-
a deal brokered by Senators Pat Toomey and Bob up interest rates and offset the growth impact they asked for and told the world (and istan), Afghan government corruption
Corker. Democrats and their media chorus are of the tax cut. Yet a major goal of the tax re- the enemy) the exact time we would and the State Department’s inability to
using that number to claim that reform will bust form is make the U.S. more competitive as a leave the country. This seemingly implement its policies.
the budget and add to the federal debt. This destination for foreign capital, and interest laughable strategy appeased Mr. Integrating a network of highways,
comes with ill grace from people who cheered rates in a global capital market will be deter- Obama’s hard-left base at home, while railroads, power grids and local gov-
Barack Obama’s doubling of the national debt in mined by far more than a modest increase in appearing to keep his campaign prom- ernments, combined with consistent
eight years, but it’s also overwrought. the U.S. budget deficit. ise on the “smart war.” management of provinces by the cen-
The actual budget hole is smaller than $1.5 Another false charge from the left is that the The authors propose forgetting tral Afghan government, are crucial to
trillion because the GOP budget is scored on a GOP bills are merely a tax cut without any re- about trying to align with the govern- long-term progress if the Defense De-
“current law” baseline. This assumes that tax form. But the bills eliminate trillions of dollars ment in Kabul. This has never been partment, with our allies, can suppress
successful for anyone, as the former insurgency. The State Department has
breaks that are “current policy” will expire and in loopholes, such as the state and local tax de- Soviet Union and presidents of both to lead the support we provide, in
more revenue will flow to Treasury. This is duction. The House bill caps the mortgage-inter- U.S. political parties have discovered. partnership with the DOD. There is no
worth more than $400 billion over 10 years, est deduction at $500,000. Their suggestion to forget Kabul and local solution in Afghanistan.
which means the budget “hole” is closer to $1 Also on the chopping block are business concentrate on creating relationships BOB ROSENKRANZ
trillion out of the $43 trillion the Congressional carve-outs—including cuts in the deductibility with local institutions makes sense. Richmond, Va.
Budget Office projects in revenues over the next of interest—that are used to pay for lower busi-
decade. In other words, this is a modest net tax ness tax rates. We’d like to see every loophole
cut even assuming no additional economic eliminated, but this really is the most far-reach-
growth. ing business-tax reform since 1986. Senate’s Take on Tax: Best to Reduce Gaming
CBO’s estimates are inherently speculative One fair objection is that the true deficit im-
The editorial “Reducing Corporate The Senate’s approach to closing
because no one knows when the next recession pact is partially hidden because the Senate’s in-
Tax Games” (Nov. 20) rightly recog- this loophole is indeed the better
might hit or what some future Congress might dividual tax cuts expire after 2025, though ev- nizes the importance of dealing with one than that approved by the
do. But CBO has typically underestimated the eryone assumes Congress would extend them. base erosion in tax reform. The cur- House, whose weak provisions un-
growth and revenue feedback from tax cuts. A This fudge is driven by the Senate’s mistake in rent tax code is full of loopholes that dermined its own professed goal to
classic example is the 2003 cut in the tax rate on doubling to $2,000 the child tax credit, which allow foreign-based companies oper- stop inversions. The Senate approach
capital gains. Dan Clifton of Strategas Research does nothing for growth and is thus a dead- ating in the U.S. to avoid paying taxes should carry the day. Base erosion is
notes that in January 2004, eight months after weight revenue loss to Treasury. here on their U.S.-generated business. a very real problem, particularly in
the tax cut passed, CBO predicted $215 billion This is a sellout to Senators Marco Rubio and Meanwhile, U.S.-based companies are the insurance industry. Comprehen-
in capital-gains revenue through 2007. The ac- Mike Lee, as well as to the income distribution competing for the same business but sive tax reform is the right place to
tual figure? $377 billion. CBO underestimated tables and the class-war left—not that it is mut- paying full freight. deal with it.
economic growth and how much investors would ing the critics. If the budget hawks want to re- This unequal tax treatment creates WILLIAM R. BERKLEY
winners and losers and gives compa- On behalf of the Coalition for
cash in their gains. duce reform’s deficit impact, the child tax
nies that invert to low or no tax juris- American Insurance
CBO’s roughly $43 trillion revenue estimate credit’s size and income phaseout of $500,000 dictions (tax havens) a very real and Miami
also depends on a projection of average eco- should be their targets. significant competitive advantage in
nomic growth of 1.9% a year. But the U.S. econ- i i i the marketplace. From the perspective
omy has never grown that slowly for so long. The question Senators need to ask them- of U.S.-based insurers, this is a real Coins Are Right Half the
CBO says that every 0.1% increase in GDP adds selves in the end is whether this reform, all problem. Foreign-based insurers are
about $270 billion in revenue over 10 years. That things considered, is a net benefit for the coun- currently allowed to strip profits gen-
Time, Beating Economists
means a mere four years at 3% growth—the U.S. try. We think it is—not least because it is a vote erated in the U.S. to overseas affili- In your editorial “A Nafta Reces-
historical norm—could fill a $1 trillion hole. An of confidence that better policies can restore ates and avoid paying any taxes on sion?” (Nov. 13), you cite a survey
average growth rate of even 2.4% over the de- America’s traditional economic vigor. Democrats that income. That’s a glaring loophole of economists in which “82% said
and their media friends have given up on that that has cost U.S.-taxpayers nearly $9 the economy would grow more
cade would more than fill the hole.
billion over a decade. slowly for the next two years than
Nearby we reprint a letter from some of the score, concluding that we are doomed to “secu- it would otherwise, and 7% pre-
country’s most distinguished economists mak- lar stagnation” and that our politics must de- dicted a recession.” The Organiza-
ing the case that the House and Senate reforms volve into a brawl to divide up the spoils of what- Bob Menendez Trial Defines tion for Economic Cooperation and
will significantly raise U.S. growth potential. The ever meager growth we can muster. Development and Citigroup have
biggest boost comes from the reductions in the That is not the country we have known and Down Constituent Service published data on the inaccuracy of
tax burden on capital, which should increase in- it is an America that would be much diminished Concerning your editorial “The economists’ predictions. Tim Hart-
vestment and thus growth. and harsher. Republicans need to decide if they Menendez Mistrial” (Nov. 18): What ford in the Financial Times reports
One of the signers, Larry Lindsey, predicted still believe America can prosper again, or if it in less brazen times would effectively Prakash Lougani, an economist with
in our pages this fall that economic growth un- is doomed to the slow growth and stagnant be viewed as felony bribery—a sena- the IMF, wrote in 2001: “The record
der the GOP plan would accelerate to 3.2% for wages of the last 11 years. tor “helping” a longtime “friend” in of failure to predict recessions is
return for political donations, opulent virtually unblemished” (throughout
vacations, free trips and other life- 1990s). Mr. Hartford reports that

Patents and Property at the Supremes style goodies—has now been defined
down as constituent service.
Mr. Lougani and a colleague, Hites
Ahir, in 2014 continued to report

You can hear the laughter echoing the dismal predictive results of
an government bureaucrats vitiate pri- Panels also use a “preponderance of the evi- throughout Tammany Hall: honest economists internationally. Since
vate property rights without a jury trial dence” to invalidate patents rather than the more graft, now with the imprimatur of the only 7% of economists predict re-
and fair compensation? That’s the ques- rigorous “clear and convincing” standard applied courts. cession this may be the more likely
tion the Supreme Court will by federal courts in civil law- The problem isn’t how constituent event. Once 82% predict a reces-
consider on Monday in what The Justices will decide suits. Patent owners can be service, corruption, bribery and quid sion, it has either already happened
could become a landmark pat- pro quo are defined. The problem is or it won’t.
ent case, Oil States Energy v.
if Congress can let the subject to double or quadruple
jeopardy since inter partes re- the inexorable economic largess of MICHAEL P. CARTER
executive revoke patents. view doesn’t limit the number government. The more regulatory and Savannah, Ga.
Greene’s Energy.
economic control government exerts
At issue is the inter partes of challenges. One panel deci- over its citizens’ lives, the more the
review that Congress estab- sion isn’t binding on another Salomon Melgens and Bob Menen- Saudi Arabia Should Allow
lished with the 2011 America Invents Act to panel. The Federal Circuit Court of Appeals, dezes of the world will engage in self-
curb abusive patent litigation. Owners of low- which hears patent cases, has even ruled that in- interested crony politics.
The Freedom of Religion
quality patents—e.g., abstract ideas or pro- ter partes review panels can invalidate patents Perhaps a less influential govern- Regarding Karen Elliott House’s
cesses with broad applicability—extort busi- upheld by federal courts and juries. ment one-half or one-third its current “The Strategy Behind the Saudi
nesses with infringement lawsuits that are The Patent and Trademark Office director size might do a far better job for the Strife” (op-ed, Nov. 7): I have a rel-
often cheaper to settle than fight. This can de- also wields enormous discretion. When unsatis- people it professes to represent. ative who has worked as a teacher
ter innovation. Inter partes review allows any- fied with results of a review, Obama PTO direc- WILLIAM A. MATTHEWS in Saudi Arabia for over 20 years.
Boston In all of that time, he hasn’t been
one to challenge a patent at any time. The Pat- tor Michelle Lee granted rehearings and added
allowed to practice his faith. The
ent Trial and Appeal Board, composed of judges. In other words, she stacked the adminis- same is true of others whose faith
administrative judges appointed by the Com- trative courts. Kill, Don’t Try to Reform, differs from that of the Sunni ma-
merce Secretary, then decides whether to grant Oil States is before the High Court because jority, including the Shiite minority,
a review and perhaps revoke a patent. the Federal Circuit broke with 200 years of judi- The Unaccountable CFPB though in a less rigorous way.
Oil States lost an inter partes review chal- cial precedent in 2015 by declaring that patents Dennis Shaul makes it abundantly Saudi Arabia will have to become
lenge after suing Greene Energy for infringe- are public rights—that is, executive privileges— clear that the Consumer Financial a more tolerant society if it is ever
ment. The company then claimed that inter and thus not entitled to Article III or Seventh Protection Bureau is primarily an un- to join the community of progres-
partes review violates the Constitution’s Article Amendment protections. Large tech companies accountable, overstaffed, overpaid sive nations. Ms. House cites, among
III and the Seventh Amendment because it al- have supported this radical legal departure to bureaucracy undertaking procedures other changes, the newfound
lows an administrative agency to revoke patents salvage inter partes review. duplicative of other financial regula- (though limited) freedom for women
tors, politically biased and funded in and the presence of restive young
without a jury trial. Article III sets the qualifica- In its landmark McCormick decision (1898),
a way to avoid congressional over- men. Freedom of religion must ac-
tions for the federal judiciary—that is, judges the Supreme Court asserted that “upon the issue sight (“What Went Wrong With the company any other change that the
are appointed by the President with the consent of [a] patent, the patent office . . . los[es] juris- CFPB,” op-ed, Nov. 20). present autocratic and theocratic
of the Senate. They also have lifetime tenure. diction over it.” The Court has consistently reaf- So why is the Trump administra- rulers are planning to allow.
The Seventh Amendment guarantees a jury trial firmed that patents are private property rights, tion going to appoint a new director PETER O’REILLY
in suits involving common law such as private as recently as 2015 when Chief Justice John Rob- to the CFPB, an agency the Republi- Redondo Beach, Calif.
property, contracts and trademarks. erts wrote in Horne v. Dept. of Agriculture that cans never wanted and that was cre-
Congress has increasingly ceded authority to a patent “confers upon the patentee an exclusive ated after the financial crisis when
administrative bodies over disputes involving property in the patented invention which cannot President Obama and the Democrats Pepper ...
public rights—those between the government be appropriated or used by the government it- were in full control?
If the party of low taxes and lim-
And Salt
and individuals that don’t have a basis in common self, without just compensation.”
ited government wants to maintain THE WALL STREET JOURNAL
law. But private rights are strictly the domain of Patents encourage innovation by protecting
that reputation, it seems that closing
the federal judiciary. This distinction is crucial the fruits of entrepreneurs’ labor, and that pro- the CFPB would be a good place to
since Article III judges are intentionally insulated tection is undermined if patents can be revoked start. The voters are still waiting for
from politics and the two political branches. at any time by an administrative agency. While the swamp to be drained. A year after
Imagine if an Administration official could ad- abusive litigation can sap innovation, inter the Republicans took control of the
judicate a fraud case between Jeff Bezos and partes review offers the potential for legal and White House and Congress, it looks
Ivanka Trump. A similar potential for executive government abuses. like the swamp is alive and well.
abuse and political interference exists with the The Supreme Court in May curbed forum ELLEN SANDLES
Patent Trial and Appeal Board, which lacks the shopping in patent infringement cases, and New York
due process and separation-of-powers protec- Congress can create other patent-troll deter-
tions enshrined in Article III. Administrative rents such as requiring more rigorous training Letters intended for publication should
judges are essentially political appointees with for examiners who issue patents. Lawmakers be addressed to: The Editor, 1211 Avenue
of the Americas, New York, NY 10036,
civil service protections. A patent challenger could also establish district patent tribunals or emailed to Please
doesn’t even have to be a party to a case or con- similar to bankruptcy courts within the federal include your city and state. All letters
troversy to present a claim. Hedge-fund investors judiciary. Inter partes review was well-in- are subject to editing, and unpublished
have been known to file petitions to invalidate tended, but any economic benefits aren’t worth letters can be neither acknowledged nor “Any other skills besides
patents prior to short-selling stocks. the constitutional damage. doing crossword puzzles in ink?”
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THE WALL STREET JOURNAL. Monday, November 27, 2017 | A17


How Tax Reform Will Lift the Economy

Editor’s note: The following is a before concluding. A key concept in finance going back to Adam Smith.
Nov. 25 letter to Treasury Secretary this context is the “user cost of capi- We believe that the reforms embod-
Steven Mnuchin: tal,” which essentially measures the ied in the House and Senate Finance

expected cost to firms of making ad- bills would achieve this objective.
ear Mr. Secretary: ditional investments in equipment. A The increased growth, in turn,
The present debate considerable body of economic re- would lead to greater taxable in-
over tax reforms pro- search concludes that reductions in come and federal tax revenues,
posed by President the user cost of capital raise output which would reduce the static cost
Trump’s administration in the short and long run. Several of of lost federal tax revenue from the
and embodied in bills that have the proposals that have emerged in reform.
passed the House of Representatives the current debate are key to lower- We hope these analytical points of
and the Senate Finance Committee ing the user cost of capital. For ex- support for the growth effects of tax
has raised the basic question of ample, expensing, which allows plans being discussed are useful to
whether the bills are “pro-growth”: firms to deduct the full cost of in- you and to the Congress as you com-

Would the proposals raise current vestment at the time it is made, low- plete the important economic task of
and future economic activity and ers the user cost of capital relative fundamental tax reform. We would
generate federal tax revenue that to depreciation over time. A lower be happy to discuss our conclusions
would reduce the “static cost” of the corporate tax rate also lowers the with you at your convenience.
reforms? This letter explains why we user cost of capital, which not only
believe that the answer to these induces U.S. firms to invest more, Robert J. Barro, Paul M. Warburg
questions is “yes.” but also makes it more attractive for Professor of Economics, Harvard
both U.S. and foreign multinational a 20.4% increase in the capital stock business income is substantial in University
corporations to locate investment in in the long run and a 4.8% increase in the United States, both bills would Michael J. Boskin, Tully M. Fried-
We believe the Republican the United States. GDP in the long run. More conserva- reduce taxation of non-corporate man Professor of Economics, Stan-
There is some uncertainty about tive estimates from the OECD suggest business income and increase the ford University; Chairman of the
bills could boost GDP just how much additional investment that corporate tax changes alone amount of capital expensing al- Council of Economic Advisers under
3% to 4% long term by is induced by reductions in the cost would raise long-run GDP by 2%. In lowed. While difficult to quantify, as President George H.W. Bush
of capital, but based on an extensive short, there is a substantial body of the bills specify different effective John Cogan, Leonard and Shirley
reducing the cost of capital. body of scholarly research, many research suggesting that fundamental tax rates, these provisions would in- Ely Senior Fellow, Hoover Institu-
economists believe that a 10% reduc- tax reform of the type being pro- crease investment and GDP above tion, Stanford University; Deputy Di-
tion in the cost of capital would lead posed would have an important effect the level associated with the corpo- rector of the Office of Management
Economists generally think of fun- to a 10% increase in the amount of on long-run GDP. We view long-run rate tax changes discussed above. and Budget under President Ronald
damental tax reform as a set of tax investment. Simultaneously reducing effects of about 3% assuming five Also on the individual side, both the Reagan
changes that reduces tax distortions the corporate tax rate to 20% and years of full expensing, and 4% as- House and Senate bills reduce mar- Douglas Holtz-Eakin, President,
on productive activities (for exam- moving to immediate expensing of suming permanent full expensing, as ginal tax rates on labor income for American Action Forum, former di-
ple, business investment and work) equipment and intangible invest- reasonable estimates. most taxpayers, increasing the re- rector of the Congressional Budget
and broadens the tax base to reduce ment would reduce the user cost by Another advantage of the corpo- ward for work. Increases in labor Office
tax differences among similarly situ- an average of 15%, which would in- rate rate reduction embodied in the supply, in turn, increase taxable in- Glenn Hubbard, Dean and Russell
ated businesses and individuals. Fun- crease the demand for capital by House and Senate Finance bills is come and tax revenues. One should L. Carson Professor of Finance and
damental tax reform should also ad- 15%. A conventional approach to eco- that it would lead both U.S. and for- note, however, that some taxpayers Economics (Graduate School of Busi-
vance the objectives of fairness and nomic modeling suggests that such eign firms to invest more in the would face increases in effective ness) and Professor of Economics
simplification. an increase in the capital stock United States. In addition, U.S. multi- marginal tax rates because of base- (Arts and Sciences), Columbia Uni-
The quest for such fundamental would raise the level of GDP in the national firms would face a reduced broadening features of the bills, versity; Chairman of the Council of
tax reform has been pursued by pol- long run by just over 4%. If achieved incentive to shift profits abroad, such as limits on the federal tax de- Economic Advisers under President
icy makers and economists for de- over a decade, the associated in- which would raise federal revenue, ductibility of state and local income George W. Bush
cades. Examples include the Tax Re- crease in the annual rate of GDP all else equal. taxes. On balance, though, we be- Lawrence B. Lindsey, President
form Act of 1986, proposals for growth would be about 0.4% per In the foregoing analysis, we as- lieve that the individual tax base and Chief Executive Officer, The
reducing the double taxation of cor- year. Because the House and Senate sumed a revenue-neutral corporate broadening embodied in the propos- Lindsey Group; Director of the Na-
porate equity by the Treasury De- bills contemplate expensing only for tax change. Deficit financing of part als would enhance economic effi- tional Economic Council under Presi-
partment and the American Law In- five years, the increase in capital ac- of a reduction in taxes increases fed- ciency by confronting most house- dent George W. Bush
stitute (enacted in part in 2003), the cumulation would be less, and the eral debt and interest rates, all else holds with lower marginal tax rates. Harvey S. Rosen, John L. Wein-
“Growth and Investment Plan” from gain in the long-run level of GDP equal. For the House and Senate Fi- In addition, fairness would be berg Professor of Economics and
President George W. Bush’s Advisory would be just over 3%, or 0.3% per nance bills, this offset is likely to be served by reducing differences in Business Policy, Princeton Univer-
Panel on Federal Tax Reform, and ar- year for a decade. modest, given that the United States the tax treatment of individuals sity; Chairman of the Council of Eco-
guments from President Obama’s ad- Is this estimate of the growth ef- operates in an international capital with similar incomes, and simplifi- nomic Advisers under President
ministration to lower corporate tax fect realistic? According to one lead- market, which means that the impact cation by reducing the number of George W. Bush
rates. The proposals emerging from ing model using an alternative frame- of changes in interest rates resulting individuals who itemize for federal George P. Shultz, Thomas W. and
the House, Senate, and President work, the proposal would increase from greater investment demand and tax purposes. Susan B. Ford Distinguished Fellow,
Trump’s administration, fall squarely the U.S. capital stock by between 12% government borrowing are likely to Confirming a Pro-Growth Objec- Hoover Institution, Stanford Univer-
within this tradition. and 19%, which would raise the level be relatively small. tive Is Important for the Path For- sity; Secretary of State under Presi-
Reducing Corporate Tax Rates, as of GDP in the long run by between 3% Lowering Individual Tax Rates ward dent Ronald Reagan; Secretary of the
Proposed, Will Increase Economic and 5%. Yet another model, this one Also Offers Generally Positive Eco- You have consistently stressed Treasury under President Richard
Activity used in the analysis of the “Growth nomic Effects that the objective of tax reform Nixon
While the overall House and Sen- and Investment Plan” in the 2005 The House and Senate bills also should be to enhance prospects for John. B. Taylor, Mary and Robert
ate tax plans contain numerous President’s Advisory Panel on Federal contemplate a number of individual increased economic growth and Raymond Professor of Economics,
household and business provisions, Tax Reform, found that a business tax provisions that can affect eco- household incomes. We agree with Stanford University; Undersecretary
we focus on the corporate tax cash-flow tax with expensing and a nomic activity and incomes. In recog- this objective, which is consistent of the Treasury for International Af-
changes, returning to other provisions corporate tax rate of 30% would yield nition of the fact that non-corporate with the traditional norms of public fairs under President George W. Bush

Immigrants Need Better Protection—From Their Lawyers

By Benjamin Edwards to find and afford lawyers who do It’s difficult to file a bar complaint immigration lawyers’ track records The Justice Department already

honest and decent work. after you’ve been deported. could improve the market for repre- tracks lawyers practicing in immi-
alls and travel bans get Bad lawyers generate real costs— The best solution—a right to im- sentation. It almost certainly would gration court by number. It should
most of the attention, but and not only for their clients. A preda- migration counsel similar to the drive some of the worst out of busi- begin to collect, crunch and disclose
there is another serious im- tory attorney might take an immi- right to a criminal defense lawyer— ness. Who wouldn’t shop around af- their case outcomes. This would arm
migration problem that few talk grant’s money and file baseless ter discovering a lawyer ranked in immigrants with the information
about: incompetent and predatory asylum claims. These meritless claims the bottom 10% by client outcomes? they need to select competent coun-
immigration lawyers. Such attorneys clog judicial dockets and increase de- This area of law is prone Although no lawyer should be ex- sel. It might also flag the fraudsters
do enormous harm to immigrants, tention times for immigrants with le- pected to win them all, immigrants for state bar associations.
courts and the federal fisc. This com- gitimate cases. And the costs quickly to abuse. It’s difficult to should get nervous if their lawyer al- Increased disclosure is not a sil-
plex problem won’t go away over- add up: The federal government file a bar complaint after ways loses. ver bullet. A world with informed
night, but the Trump administration spends about $158 a day to detain When immigrants lack a way to clients will face different problems
can limit the damage. someone, according to a 2014 Govern- you’ve been deported. differentiate between the shoddy than the current system, and not all
As a group, the private immigra- ment Accountability Office report. and the skillful, the worst lawyers immigrants will be aware of the new
tion bar now contains the worst law- The blame for America’s inade- keep collecting cases and fees. This database. Some lawyers would try to
yers in all of law. A 2011 survey of quate immigration bar does not lie probably can’t garner enough sup- also means that the best immigra- game the system and duck hard
federal judges by Richard Posner and with vulnerable immigrant commu- port on Capitol Hill. Lawyers orga- tion lawyers may struggle to make a cases to protect their records. It
Albert Yoon found that, of all prac- nities. No rational immigrant would nized and funded like public living because their corner-cutting might make it more difficult for cli-
tice areas appearing in federal knowingly shell out $10,000 for an defenders would be better positioned competitors depress the price of ser- ents with more challenging claims to
courts, immigration lawyers pro- asylum claim destined for failure. to police their own ranks. But this vices. That’s part of why many tal- secure representation. But these po-
vided the lowest-quality representa- Rather, immigrants make the com- does not mean that Congress and the ented practitioners choose to aban- tential pitfalls aren’t worse than the
tion. In another 2011 survey, 31 im- mon mistake of assuming that a Trump administration should keep don immigration law. This has led to status quo so many immigrants al-
migration judges in New York valid law license means that a lawyer ignoring the problem. a shortage of representation. One ready know.
classified nearly half of the attor- will do a decent job. In a forthcoming article in the 2015 study found that only 37% of
neys appearing before them as ei- The free market has failed to Washington and Lee Law Review, I people in removal proceedings have Mr. Edwards is a law professor at
ther inadequate or grossly inade- weed out the worst immigration law- argue that requiring disclosure of lawyers. the University of Nevada, Las Vegas.
quate. A 2015 study found that yers for a variety of reasons. For
immigrants would be better off with- one, immigrants often do not under-
out an attorney than entrusting their
fate to the bottom 10% of immigra-
tion lawyers.
stand complex administrative court
processes or the details of immigra-
tion law, forcing them to turn to cor-
If GPS Failed, We’d Be More Than Lost
Not all immigration lawyers are rupt counselors. Community reputa- By A.P.D.G. Everett No one was injured, but someone satellites all over the world could be
atrocious. Pro bono lawyers—who tion provides only an imperfect And Alex Berezow setting out to do deliberate harm destroyed. NASA warns that they

handle less than 10% of cases—win guide. Predatory immigration law- could pose a security risk in the can’t be protected. The U.S. would
about 90% of the asylum claims they yers sometimes enjoy good reputa- orth Korea and Russia pose future. be wise to stockpile communications
file. Law school clinics also deliver ex- tions in the community because the increasingly serious geopolit- As troublesome as a minor threat satellites to replace the ones the
cellent results for their clients. The U.S. deports their victims. When only ical threats to the U.S. and is, what if GPS as a whole were at- sun obliterates.
private immigration bar contains winners remain, immigrants never its allies. While these rogue nations tacked? The detonation of a nuclear A better option is to build a land-
many fine lawyers, but there are far hear about the lost cases. State bars possess nuclear weapons and formi- device high in the atmosphere—and based navigation system. The good
too many scoundrels. Clients struggle also struggle to police this behavior. dable conventional forces, they the creation of an electromagnetic news is that such a system, known
have also used unconventional pulse, or EMP, that would follow— as Loran, already exists and was
methods like hacking to attack gov- present the most likely threat to used by the U.S. Coast Guard for
ernment institutions and private the satellites that underpin the sys- years. But President Obama declared
PUBLISHED SINCE 1889 BY DOW JONES & COMPANY companies. Add another target to tem. In September 1962, a nuclear Loran obsolete in 2009, and Con-
Rupert Murdoch Robert Thomson the list of concerns: the Global Po- test conducted by the U.S. acciden- gress pulled funding for it. That was
Executive Chairman, News Corp Chief Executive Officer, News Corp sitioning System. tally destroyed a British satellite incredibly shortsighted. Loran is a
Gerard Baker William Lewis Built primarily for the U.S. mili- and streetlights in Hawaii, demon- great backup system because its sig-
Editor in Chief Chief Executive Officer and Publisher tary, GPS is now used by civilians strating the potential devastation of nals would be difficult to jam and it
Matthew J. Murray DOW JONES MANAGEMENT: across the globe. Smartphones, per- an EMP. would be less exposed to celestial
Deputy Editor in Chief Mark Musgrave, Chief People Officer; sonal navigation units, and air-traf- Anything that requires precise events.
Edward Roussel, Innovation & Communications;
Anna Sedgley, Chief Operating Officer & CFO;
fic control all rely on it. They’re part timing would be affected because Congress is considering a bill, the
Michael W. Miller, Senior Deputy;
Thorold Barker, Europe; Paul Beckett, Katie Vanneck-Smith, President of modern life, constantly perform- GPS satellites serve as global time- Department of Homeland Security
Washington; Andrew Dowell, Asia; OPERATING EXECUTIVES: ing trivial and critical functions all keepers. The loss of clock synchroni- Authorization Act, that would revive
Christine Glancey, Operations; Ramin Beheshti, Product & Technology; over the country. Fifteen of the “18 zation across the world would cause and enhance Loran into a highly reli-
Jennifer J. Hicks, Digital; Jason P. Conti, General Counsel;
Neal Lipschutz, Standards; Alex Martin, News; Frank Filippo, Print Products & Services; Critical Infrastructure and Key Re- the internet to stall and financial able, ground-based backup system.
Shazna Nessa, Visuals; Ann Podd, Initiatives; Steve Grycuk, Customer Service; source sectors” in the U.S. are GPS- transactions to cease. Our ability to This kind of system will not be com-
Matthew Rose, Enterprise; Kristin Heitmann, Transformation; reliant, according to the Department monitor and forecast the weather pletely impervious to EMPs or solar
Stephen Wisnefski, Professional News Nancy McNeill, Advertising & Corporate Sales;
Jonathan Wright, International of Homeland Security. would be hobbled, too. storms, but it would be less vulnera-
Paul A. Gigot, Editor of the Editorial Page;
Daniel Henninger, Deputy Editor, Editorial Page
DJ Media Group: Temporary, local GPS failures Even if America’s adversaries are ble than GPS satellites. In a world
Almar Latour, Publisher; have already proved chaotic. A truck not capable of pulling off such a full of threats, it wouldn’t hurt to
Suzi Watford, Marketing and Circulation; Professional Information Business: driver in New Jersey used an illegal feat, Mother Nature certainly is. In have a backup.
Joseph B. Vincent, Operations; Christopher Lloyd, Head; but easily acquired GPS jammer to 1859, a ferocious solar storm known
Larry L. Hoffman, Production Ingrid Verschuren, Deputy Head prevent his boss from tracking him. as the Carrington Event shot Mr. Everett is a systems engineer.
EDITORIAL AND CORPORATE HEADQUARTERS: As he drove past Newark Liberty In- charged particles from the sun to- Mr. Berezow is senior fellow at the
1211 Avenue of the Americas, New York, N.Y., 10036 ternational Airport, his jammer ward Earth. If it were to happen American Council on Science and
Telephone 1-800-DOWJONES
blocked air-traffic control signals. again today, experts believe that Health.
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A18 | Monday, November 27, 2017 THE WALL STREET JOURNAL.

With Watson, marketers can delight
more customers more often. By using
weather, shared location and
personal data they can predict what
customers want and where they’ll
want it. Find out more at
This is marketing to the power of IBM.

IBM and its logo, and Watson are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. See current list at Other product and service names might be trademarks of IBM or other companies. ©International Business Machines Corp. 2017.
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© 2017 Dow Jones & Company. All Rights Reserved. * * * * THE WALL STREET JOURNAL. Monday, November 27, 2017 | B1

Last Week: S&P 2602.42 À 0.91% S&P FIN À 0.19% S&P IT À 1.76% DJ TRANS À 1.45% WSJ $ IDX g 0.78% LIBOR 3M 1.468 NIKKEI 22550.85 À 0.69% See more at

Meredith in Deal to Buy Time Inc. SoftBank

Better Homes & try to find their footing in an brothers. More recently, the nue and a new generation of company will have more than

Gardens owner to pay

$1.85 billion for fabled
increasingly digital world.
Meredith, based in Des
Moines, Iowa, has agreed to
stock closed Friday at $16.90.
Including the assumption of
Time’s debt, the deal is valued
online rivals emerged.
Stephen Lacy, Meredith’s
chairman and chief executive,
10 billion annual video views
and nearly $700 million in dig-
ital advertising revenue. “This
Offer for
magazine publisher
pay $18.50 a share for Time,
the fabled New York publisher
of Fortune, People and Sports
at $2.8 billion.
The deal caps the end of an
era. Time, whose namesake
said the combined company
will be able to reach almost
200 million consumers across
is also a digital play for Mere-
dith, one that transforms the
company into a top 10 digital
Uber Stake
BY JEFFREY A. TRACHTENBERG Illustrated, the companies Time magazine hit the news- all platforms, including digital. media company in the U.S.” BY ELIOT BROWN
said. The boards of both com- stands in March 1923, emerged “The vision is the absolute Mr. Lacy said he expects AND GREG BENSINGER
Meredith Corp., the owner panies have approved the as one of the country’s great premiere media company in the acquisition to close in
of Better Homes & Gardens transaction. journalistic enterprises, shap- the country with premium about 60 days. As soon as this week, Soft-
and Allrecipes, has struck a That is a 46% premium to ing both the political and cul- branded content on every plat- Tom Harty, Meredith’s chief Bank Group Corp. is expected
deal to buy magazine pub- Time’s closing price on Nov. tural landscapes. But in recent form,” Mr. Lacy said in an in- operating officer, said that the to proceed with an offer to
lisher Time Inc. for $1.85 bil- 15, before reports of Mere- years, the magazine publisher terview. “We’re very excited to combined properties won’t be buy billions of dollars worth of
lion in cash, a significant bet dith’s renewed interest in a lost ground as a shift among bring these businesses to- entirely dependent on adver- shares from Uber Technolo-
on the future of the magazine deal with financial backing readers to digital platforms gether.” tising thanks to their 60 mil- gies Inc.’s stakeholders.
industry as media companies from the billionaire Koch cut into traditional print reve- Mr. Lacy said the combined Please see TIME page B6 First it must settle on an of-
fer price, only days after Uber
disclosed a security breach in-

Dollar volving 57 million accounts

that took place a year ago and
prompted regulatory scrutiny

Remains from government agencies

around the world.
Uber’s decision to keep

King Years quiet about last year’s data

breach until early last week
raises the prospect that the in-

After Crisis cident could affect SoftBank’s

offer price.
SoftBank learned of the
BY JON SINDREU AND MIKE BIRD hack about a month ago, which
may have changed its evalua-
It is one of the ironies of the tion of Uber’s shares, accord-


global financial crisis: A decade ing to people familiar with the
later, a panic whose origins matter.
were in the U.S. has left the dol- Some investors and observ-
lar more important to the rest ers say corporate breaches are
of the world than ever before. becoming so routine that they
Putative contenders for its shouldn’t weigh on a com-
throne—the euro, the Chinese pany’s valuation, though Uber’s
yuan—have failed to gain global string of controversies this
acceptance. It remains the dom- year has given shareholders
inant force in world trade. A reason to question what’s next.
slow, yearslong decline in the A group of investors led by
proportion of dollars among the SoftBank plans to launch an
holdings of the world’s central Members work out at the Life Time Athletic gym in Franklin, Tenn. Health clubs are taking over mall space once held by department stores. effort in the coming days to
banks, which were trying to di- buy at least 14% of the ride-

Once Mall Pariahs, Gyms Step Up

versify, has stopped. And the hailing firm from existing
commercial banks of Japan, shareholders through the ten-
Germany, France and the U.K. der offer at a steep discount,
now have more dollar-denomi- as well as through a direct in-
nated liabilities than those in BY RACHEL BACHMAN reason to go to that mall,” mall owners to grapple with “Twenty-five years ago, the vestment of at least $1 billion
their own currencies. says Mr. Mullins, a senior pas- declining foot traffic and ris- best real estate was given to at Uber’s prior $68 billion val-
The dollar dominance is test- Todd Mullins and his wife, tor at a local church. ing vacancies. At the same the department stores,” says uation. The investor group in-
ing the world again: Rules de- Julie, started going to a shop- Mall owners long treated time, fitness centers have Sandeep Mathrani, CEO of Chi- cludes Dragoneer Investment
signed to make finance safer ping center 15 minutes from gyms like pool halls, unwanted boomed and diversified, and a cago-based property owner Group and General Atlantic.
have already made dollars their Palm Beach Gardens, tenants that attracted lower- proliferation of smaller, bou- GGP Inc. “And the department SoftBank has negotiated for
harder to come by. To add to Fla., home about a year ago— rent visitors who were un- tique gyms that draw higher- stores sort of prevented you weeks with Uber’s board to
the pain, the Federal Reserve is after they joined a gym inside likely to shop. Now they’re end customers have created from doing anything but hav- move forward with a deal, while
sucking dollars out of the it. They work out at the Or- giving health clubs some of more attractive tenants that ing retail shopping. So today, some big investors have pri-
world’s financial system as it angetheory Fitness there three their best real estate. are easier to accommodate. their sort of slow retraction is vately said they would balk if
tries to tighten its monetary to four times a week, and at The reason is twofold. Re- The result is that health giving us the opportunity to the valuation is too low. Former
policy. least half the time they visit a tailers have closed hundreds clubs that were once pariahs reinvent the wheel.” Chief Executive Travis Kalanick,
“‘Our currency, your prob- nearby juice shop, restaurant of stores across the country at malls are helping transform Mr. Mathrani says gyms are who holds about 10% of Uber
lem’—it’s basically like that,” or Trader Joe’s, he says. amid increasing competition them into hubs of living, work- one element in making regional shares, has indicated he won’t
Please see DOLLAR page B2 “There would be no other from online shopping, leaving ing and playing. Please see MALL page B2 Please see UBER page B2

Global outstanding debt
KEYWORDS | By Christopher Mims
Laws of Innovation Everyone Should Heed
by currency
$12 trillion

10 Domestic currency*
Three de- fear of missing out. Fortunately, the laws have a seemingly mundane obser-
Offshore dollars cades ago, a You’ve probably never been passed down by a small vation, is also his most im-
Other foreign historian heard of these principles or group of technologists who portant. He realized that the
6 currencies wrote six laws their author, Melvin Kranz- say they have profoundly af- impact of a technology de-
to explain so- berg, a professor of the his- fected their thinking. The pends on its geographic and
4 ciety’s unease tory of technology at Geor- text should serve as a foun- cultural context, meaning it
with the power and perva- gia Institute of Technology dation—something like a is often good and bad at the
2 siveness of technology.
Though based on historical
who died in 1995.
What’s a bigger shame is
Hippocratic oath—for all
people who build things.
same time.
His example was DDT, a
0 examples taken from the that most of the innovators pesticide and probable car- RECALLS PROVE
1967 ’70 ’80 ’90 2000 ’10 Cold War, the laws read as a
cheat sheet for explaining
today, who are building the
services and tools that have
1. “Technology is neither
good nor bad; nor is it neu-
cinogen that nonetheless
saved the lives of hundreds
*Includes U.S. debt issued in dollars
Source: Bank for International Settlements our era of Facebook, Google, upended society, don’t know tral.” of thousands of people in In-
THE WALL STREET JOURNAL. the iPhone and FOMO, or them, either. Prof. Kranzberg’s first law, Please see MIMS page B4 AUTOS, B3


For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or
B2 | Monday, November 27, 2017 * *** THE WALL STREET JOURNAL.


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.

General Motors...........B3
Green Bridge Growers
Panty Drop..................R5
Phillips Edison............B2
OPEC Is Poised to Extend Oil Cuts
Apple...........................B4 .....................................R1 Postmates...................R3 BY GEORGI KANTCHEV tial public offering of the
Asperger Experts........R1 H S
AND SUMMER SAID Rising Price state-owned Saudi Aramco, the
OPEC strategy and geopolitical threats to production in Iran, Iraq and world’s biggest oil-producing
B Highland Capital SafetyTat.....................R2 After years of doing too lit- company. The IPO is the cen-
Management.............B7 Saudi Arabia are driving Brent crude-oil futures prices higher.
Boeing ......................... B4 SmartGlamour ............ R5 tle, OPEC could suddenly be terpiece of a plan to transform
HNA Group..................B7 Societe Generale.........B2 doing too much. Brent crude-oil futures the kingdom’s economy, less-
I SoftBank Group..........B1 The Organization of the Pe- $125 a barrel ening its dependence on oil
Cardlytics .................... B2
Intel...........................B10 Space Exploration troleum Exporting Countries’ and developing the world’s
Chewbeads..................R4 Technologies.............B4
Intuit ........................... R3 14 members and other major largest sovereign-wealth fund
Citgo Petroleum ......... A9 100
Starbucks....................B2 producers like Russia are to create new industries.
Comme des Garcons...R5 Stuttering King Bakery widely expected But Saudi oil officials say
D Javelin Venture .....................................R1 THE WEEK to strike an they also don’t want to overdo
Partners....................B4 75
Dow Jones...................B7 T AHEAD agreement this it. Saudi Energy Minister Khalid
K week to con- al-Falih told Bloomberg TV this
Dragoneer Investment Takata..........................B3
Group.........................B1 Kickstarter..................R3 tinue withhold- 50 month that the kingdom doesn’t
TaskRabbit .................. R3
E M ing about 2% of global oil sup- want “any spikes in prices that
Time ............................ B1 ply from the market. The shock the market; we don’t
Eight & Sand...............R5 Meredith......................B1 Time Warner...............B6 national energy ministers of 25 want any price movements that
Eloquii ......................... R5 Micron Technology....B10 Trader Joe's ................ B1 about two dozen countries are are not healthy for demand.”
EnerVest....................B10 N U set to meet Thursday at the oil “Our preference is that the
EV Energy Partners..B10 cartel’s headquarters in Vienna. market balances gradually,”
Netease.......................B4 Uber Technologies.B1,R3
But OPEC is beset by doubts 2014 ’15 ’16 ’17 Mr. Falih said.
F Niantic.........................B4 UBS Group...................B2
Facebook......................B4 Nvidia........................B10
that renewing its production Source: WSJ Market Data Group THE WALL STREET JOURNAL. Not all OPEC members think
W agreement for another several the extension is a good idea.
Ford Motor..................B3 O Wal-Mart Stores........A1 months will help its members, level since June 2015. The up- delivering.” Most are reeling economically
G Walt Disney................B6 say OPEC representatives and ward trend is partly thanks to Overshooting their mark and politically from oil prices
General Atlantic..........B1 ... R7 Wefunder .................... R2 independent market watchers. OPEC’s production limits but could hurt demand for crude that are still around half of
Some members, along with also to geopolitical threats to around the globe and accelerate their 2014 levels. Higher prices
outside analysts, say that production in Iran, Iraq and a push toward electric vehicles would also lead to members
INDEX TO PEOPLE OPEC could overstimulate the
market and send prices too
Saudi Arabia, and Saudi public
statements suggesting the
and other technologies expected
to cut into oil consumption.
cheating on their production
targets to sell more crude, an-
high next year. That, in turn, kingdom is committed to sup- Higher prices could also in- alysts say.
A H Pilarski, Jan ................ R1 risks depressing demand for porting oil prices. centivize U.S. shale producers Ecuador, for instance, has
Adelstein, Dan............B2 Hackett, Jim ............... B3 Pozsar, Zoltan.............B2 crude. For years, OPEC had fought to ramp up drilling, raising the already all but said it won’t
C Hanke, John................B4 R “There’s actually a chance against a perception that it prospect of a flood of new oil comply with OPEC directives.
Hinrichs, Joe...............B2 Raede, Danny..............R1 the market will overtighten and was no longer relevant to an that could depress the market. OPEC members like Libya and
Chase, Mariah.............R5
prices go close to $70 soon,” oil market shaped by U.S. shale American producers seem al- Nigeria, which aren’t bound to
Chen, Feng .................. B7 J S
said Doug King, chief invest- drillers. The cartel did nothing ready to be taking advantage. production limits because of
Cook, Tim....................B4 Johnson, Brian............B3 Snider, Jeffrey............B2 ment officer of the Merchant when oil prices crashed in After falling for much of the civil strife, have also posed
Crislip, Matt..............B10 T
K Commodity hedge fund, which 2014. Then, when it finally de- past three months, the number problems for the cartel, as
D Tan, Adam...................B7 has $165 million under manage- cided to cut production last of rigs drilling for oil rose by their production rises.
Kalanick, Travis...........B1
Daugherty, Patrick......B7 Terry, Josh .................. B7 ment. “But they are also vulner- year, the desired effect— nine to a total of 747 this past “I’m not sure all of us
Dondero, James..........B7 Tidmarsh, Chris .......... R1 able if they don’t extend; that higher prices—took longer week, according to oil-services wanted to be in that deal for
Landon, Stéphane.......B2 will spook the market.” than expected. company Baker Hughes. that long,” said an OPEC dele-
E Tommarello, Nicholas.R2
M U Brent crude, the interna- Today, investors and execu- Saudi Arabia, OPEC’s most gate from a Persian Gulf coun-
Edison, Jeff.................B2
Mathrani, Sandeep.....B1 tional benchmark, is already up tives worry the cartel is over- powerful member, has advo- try where there are lingering
G Upadhyaya, Paresh.....B2
more than one-fifth in the past doing it. cated extending the production doubts about the efficacy of
Mullins, Todd .............. B1 W
Gartner, Steven .......... B2 three months, closing at $63.86 “I’m used to OPEC not do- cuts for an additional nine the production cuts.
Musk, Elon..................B4
Geiger, Angela ............ R1 Wang Jian...................B7 a barrel on Friday. U.S. crude ing enough,” said Rainer Seele, months, through the end of
Greenwald, Lisa..........R4 N-P Welsh, Michele...........R2 oil futures settled 1.6% higher chief executive of oil company 2018. The kingdom needs  Heard on the Street: Russia’s
Griffin, Cary................R1 Neri, Antonio..............A2 Woodbury, Don...........R7 at $58.95, the highest closing OMV AG. “Now they are over- higher prices as it plans an ini- role is pivotal in oil talks... B11

MALL UBER part of those measures, Uber

also set a deadline of 2019 for
an initial public offering.
Uber was obligated to dis-
Continued from the prior page Continued from the prior page close the hack before the ten-
malls as well rounded as down- sell in the tender offer, while der offer was announced be-
town areas were years ago, Benchmark Capital has wa- cause a breach of its size could
with a YMCA and small shops vered on whether it would sell be material to investors, peo-
as well as department stores. some of its 13% stake. Represen- ple familiar with the matter
GGP plans to integrate fitness tatives for both Mr. Kalanick and have said. The disclosure
centers into half of its 115 malls Benchmark had no comment. means all Uber investors and
in the next decade, he says. The Japanese firm hasn’t yet employees are now aware,
Phillips Edison & Company set a price, said a person famil- which could strengthen Soft-

has gyms in 44% of its more iar with the matter, though talks Bank’s hand, observers said.
than 340 grocery-anchored between the SoftBank consor- “This is just going to be
shopping centers, according to tium and Uber investors in re- more leverage for SoftBank,”
CEO Jeff Edison. In the cent weeks centered on a valua- said Anand Sanwal, chief exec-
mid-1990s, the company had tion of around $50 billion. While utive of tech-focused research
just a few centers with gyms a discount is customary in sec- firm CB Insights. If investors
because tenants viewed typical ondary sales, some investors believe there is new potential
gym-goers as teenage weight- have also marked down their for litigation and regulatory
lifters more likely to hang out valuations of the company amid measures, he said, “that is go-
on the curb than to shop, Mr. its executive-suite turmoil in the ing to have an impact on the
Edison says. past year. valuation.”
Westfield Corp. has 33 U.S. SoftBank wants to name the Mitchell Green, founding
malls, many with assets A member lifts weights on the fitness floor at the Life Time Athletic gym in Franklin, Tenn. lowest number possible, while in- partner at Lead Edge Capital,
greater than $1 billion. More vestors and board members are an Uber investor, said breaches
than half of them have some were “on a long list of prohib- dios and bargain chains. thought. More than 40% of pushing for a higher valuation. have become so commonplace
sort of health club, up from ited uses that included mas- Yet overall, fitness has been health-club members reported Too steep of a discount risks re- that consumers are going to
about 10% a decade ago. sage parlors, billiards halls booming. More than 57 million household incomes exceeding pelling would-be sellers and im- keep using the service and the
Many of the new tenants at and pawnshops,” says Steven people belonged to a health $100,000 in 2016, according to periling the tender offer, which core business won’t be affected.
shopping centers are gyms Gartner, managing director of club last year—19.3% of the IHRSA, compared with 26% of lasts 20 business days. SoftBank The breach should have been
and specialty fitness studios retail at CBRE, the commercial U.S. population—and member- the overall population. can try again at a higher price if disclosed, Mr. Green said, but
that in some cases are barely real-estate services and in- ships have jumped 26% since Consumer spending at fit- its initial attempt fails. the executives who oversaw
bigger than a Starbucks store. vestment firm. If gyms were 2009, according to IHRSA. ness centers climbed 3.7% in It is in Uber’s interest to get that decision are now gone, and
But owners of regional malls allowed in malls at all, land- Gyms fit into a broader the third quarter over last year, the deal done. In October, the he said there is wide support
also are welcoming sprawling, lords often relegated them to push by mall owners to rein- according to Atlanta-based board passed a series of corpo- for the new chief executive.
full-service health clubs as an- back corners. vent themselves as centers of spending-data analysis firm rate-structure changes that “That was Uber 1.0,” Mr. Green
chor tenants, sometimes re- The fitness industry brings entertainment at a time when Cardlytics. Spending on ap- only kick in if the SoftBank con- said. Now, “this company is be-
placing the stores that once its own risks. Streaming fitness so much of apparel sales have parel at brick-and-mortar sortium reaches its 14% stake ing run by seasoned manage-
excluded them. services used remotely are on moved online. Landlords are stores rose 0.5%. threshold. The changes include ment,” he said.
GGP is replacing a Macy’s at the rise, and the growth of adding restaurants, ice-skating “We’re like the nice-looking revoking the supervoting rights Uber said no financial infor-
Oklahoma City’s Quail Springs health clubs is outpacing mem- rinks, pools and other recre- girl at the dance. Everybody of early investors, which mation was obtained in the
Mall with a 180,000-square- bership, according to the Inter- ational options to boost sag- wants to dance with us these granted them multiple votes breach and it has found no evi-
foot Life Time health club with national Health, Racquet & ging foot traffic. days,” says Dan Adelstein, vice per share, as well as expanding dence of fraudulent use of per-
indoor and outdoor pools and Sportsclub Association. Many There is also evidence that president of international de- the size of the board by six to sonal information. It said it
tennis courts. midprice gyms have struggled gyms might not be the retail velopment for Orangetheory 17 directors. SoftBank would was assured the stolen data
Years ago, health clubs to compete with boutique stu- repellent that mall owners long Fitness. get two of the new seats. As were destroyed.

DOLLAR Greenback Scarcity

Hits Non-U.S. Banks
time. The lender said it was be-
cause of sharp movements in
Swiss franc and euro interest
are anathema to global inves-
tors. Meanwhile, the share of
official reserves held in dollars
recently stopped its multiyear
To the Policyholders of
Continued from the prior page rates and declined to comment decline, and in the second quar- THE GUARDIAN LIFE INSURANCE
said Credit Suisse analyst and further. ter of 2017, foreign-country dol- COMPANY OF AMERICA
money-market guru Zoltan Poz- The scramble for dollars can Now Société Générale is lar-denominated debt rose to an
sar, of the move by the U.S. hurt non-U.S. banks as the cur- working to put its own counter- all-time high of $8.6 trillion, ac- Notice of Annual Election of Directors
Since the financial crisis, rency’s scarcity makes them measures in place, by diversify- cording to the BIS.
markets have been flashing a more expensive to borrow. ing sources of dollar funding “The dollar’s downward
red light, warning that dollars In December 2016, it drove across markets and types of in- trend of the last 40 years is The Annual Election of Directors of The Guardian Life
are scarce. Spreads on deriva- French lender Société Générale vestors. over,” said Paresh Upadhyaya, Insurance Company of America will be held at its Home
tives contracts called cross-cur- SA to its worst trading day of “This is something that fund manager at Amundi Pio- Office, located at 7 Hanover Square, New York, NY 10004
rency basis swaps, which are the year—and the only one we’re very careful and aware of,” neer, Europe’s largest asset on December 13, 2017. The polls will open at 10:00 AM
used by investors and compa- when the bank’s statistical esti- said Stéphane Landon, head of manager. and remain open until 4:00 PM on that day. Policyholders
nies to source dollars, have mates of probable losses were group treasury at Société Gé- So will there be enough dol- whose policies or contracts are in force on the date of the
jumped. Were greenbacks freely breached—its annual report nérale. “It’s true that we have lars for the world in the future? election and have been in force at least one year prior to
borrowed and lent, the spread showed. limited access to retail dollar Since the 1950s, that respon- the election date are entitled to vote in person or by proxy.
would be zero, economists say. Swiss bank UBS Group AG funding. So we have developed sibility has fallen to the euro- Proxies may be obtained from the Office of the Corporate
Whenever banks need to breached its statistical model more access to wholesale prod- dollar market, an offshore Lon- Secretary, The Guardian Life Insurance Company of
clean up their books around for group revenue at the same ucts overall,” he added. don-based market roughly $5 America, 7 Hanover Square, H-27-A, New York, NY 10004
quarter- and year-ends—closing trillion in size, dwarfing any or through Guardian’s website at
their dollar taps to borrowers— other offshore lending market. about-guardian/corporate-governance.
the gulf gets bigger. As the end drive American companies to reign that was established after Yet, banks in the eurodollar
of 2017 approaches, the three- repatriate a chunk of their cash World War II, especially after market might not be capable of Harris Oliner
month spread has ballooned to stashed abroad. President Richard Nixon un- satiating the world’s hunger for Senior Vice President
a one-year high. All of this means that dollars pegged the greenback from gold dollars, investors say, because and Corporate Secretary
Since October, the Fed has are flowing out of the rest of in 1971. The creation of the euro postcrisis regulations have
been allowing $10 billion of its the world’s pockets. Research- in 1999 and the breakneck raised the cost of short-term
$4.5 trillion balance sheet—ac- ers at the Switzerland-based growth of the Chinese economy lending.
quired under bond-buying pro- Bank for International Settle- led many analysts to say the “Above all the rest of the
grams after the financial cri- ments have found that, when- dollar would need to share the system, there’s the eurodollar
sis—to roll off every month, ever the dollar becomes scarcer, limelight. system,” said Jeffrey Snider,
while the U.S. Treasury is stash- credit gets harder to come by But the euro became politi- head of global investment at Al-
ing increasing amounts of cash around the world. cally unpopular during the Eu- hambra Investment Partners,
at the central bank, and ana- Many economists have long ropean debt crisis, and Chinese “and if it doesn’t work, the rest
lysts expect U.S. tax overhaul to predicted an end to the dollar capital controls to peg the yuan of the currencies don’t work.”
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or
THE WALL STREET JOURNAL. Monday, November 27, 2017 | B3


Recalls Mar Ford’s Drive for New Vigor

Safety-related costs
Total Recall
climb at same time Ford’s stock price has remained stagnant amid concerns about the
CEO steers a move to company’s future strategic endeavors, a period also punctuated by
unexpected recall expenses.
electric, driverless cars
$14 a share
Oct. 18
BY MIKE SPECTOR $267 million
AND MIKE COLIAS Faulty door latches
13 on late-model
Ford Motor Co. Chief Exec- June 28 pickup trucks
$142 million
utive Jim Hackett wants to
Defective driveshafts
push the 114-year-old auto 12 on vans
maker toward the future as
fast as he can.


Right now, though, he is 11 Sept. 8, 2016
contending with mounting $640 million
costs from safety recalls. Faulty door latches
Ford has disclosed over $1.3 on various models March 29
10 $295 million
billion in charges for recalling
Some engines posed a fire risk;
vehicles since September 2016, repairs to defective door latches
with the latest coming at the on older cars
same time Mr. Hackett aims to
divert a portion of profit from 2016 ’17
booming truck sales to the de- A Ford assembly line in Louisville, Ky. The auto maker’s latest recall is related to faulty door latches. Sources: the company; WSJ Market Data Group (shares) THE WALL STREET JOURNAL.
velopment of electric cars and
driverless vehicles. to criminal charges against other safety problems. Takata, future technologies. charge, which is being booked industry and don’t reflect con-
The recall expenses have both companies and record in- facing a multibillion-dollar re- Companies such as Waymo in the fourth quarter, covers sistent quality problems in the
caught Wall Street’s attention dustrywide recalls of at least call tab, filed for bankruptcy LLC, the driverless-car divi- faulty door latches on 1.3 mil- company’s vehicles.
as Mr. Hackett, who became 50 million vehicles annually in protection. sion of Google parent Alpha- lion F-series pickup trucks “Ford’s vehicle quality—
CEO in May, is trying to revive the U.S. for several years. Still, Ford’s recall charges bet Inc., don’t face similar sold during the past three based on trusted third-party
investor enthusiasm for the Ford until recently had are a reminder of the chal- manufacturing headaches, pre- model years. “Charges like surveys—is near an all-time
company. He has committed to largely managed to avoid suc- lenges traditional car manu- ferring to form partnerships these demonstrate that per- high and we have achieved
significantly cut spending on cessive, significant recall ex- facturers face in the race to with existing auto makers haps all was not well in the some of the industry’s lowest
conventional car making. penses, and the charges and compete with Silicon Valley while remaining focused on Ford factories over the last warranty costs,” said Joe Hin-
The sizable expenses are other consequences for the technology companies on driv- their technological expertise. couple of years,” said Barclays richs, Ford’s global operations
the latest to hit a mainline au- company haven’t reached lev- erless vehicles. The complexity Ford’s latest recall charge, PLC analyst Brian Johnson. chief. Warranty expenses re-
tomotive manufacturer since els suffered elsewhere. GM of vehicles and the supply at $267 million, is larger than Ford executives contend re- flect auto makers’ costs for
2014, when revelations of spent $6 billion spanning 2014 chain needed to build them the company’s investment on cent disclosures of recall ex- covering repairs in the initial
deadly flaws with General and 2015 on recalls and legal can contribute to expensive an annual basis in Argo AI, a penses are part of an effort to years after a car is sold. Recall
Motors Co. ignition switches settlements stemming from manufacturing problems just driverless-car startup it took be more transparent amid re- charges are one-time expenses
and Takata Corp. air bags led the ignition switches and as auto makers place bets on control of this year. The cent record recalls across the taken to fix defective parts.

FAA Tries to Ease Pilots’ Path From Military to Airlines

BY ANDY PASZTOR the controls while in uniform, lations that are slated be the FAA, is that the initiative The FAA’s move has poten- for-1 regulatory swap, accord-
the agency on Friday formally scrubbed. is “a deregulatory action” be- tially broad implications for ing to people familiar with
As part of efforts to make it proposed revising current reg- The document published in cause the proposed changes future rule-making by federal their thinking.
easier for U.S. military avia- ulations spelling out experi- the Federal Register—previ- “result in cost savings” rather transportation officials af- On Friday, the U.S. Depart-
tors to become commercial ence requirements for new ously reviewed by officials at than additional financial bur- fecting a variety of issues, ment of Transportation said
airline pilots, the Federal Avi- commercial captains and co- the Transportation Depart- dens. ranging from drones to air- that Secretary Elaine Chao is
ation Administration has pilots. ment and White House Office Anticipated savings include traffic control to autonomous pursuing a common-sense
found a strategy around White The goal is to help alleviate of Management and Budget— simplified record-keeping for vehicles. approach and a regulatory
House mandates to eliminate shortages of entry-level pilots, explicitly indicates the pro- the FAA, plus tens of thou- In some aviation areas, FAA agenda—spanning ground
two existing regulations for an undersupply that particu- posed rule falls outside the sands of dollars in potential chief Michael Huerta and Dan and air technologies—built
each new rule that is pro- larly is dogging certain re- scope of President Donald savings for individual pilots Elwell, the agency’s deputy ad- on a “carefully crafted bal-
posed. gional carriers. Trump’s executive order de- who would avoid paying for ministrator, similarly hope to ance that accelerates the
Seeking to permit pilots of But it is also the first major manding a 2-for-1 trade-off be- extra flight hours now re- persuade White House regula- safe integration of technol-
military helicopters and tilt- safety rule to come out of the tween existing and future reg- quired before they are eligi- tory officials to sign off on ogy without imposing addi-
rotor craft to claim civilian FAA this year without simulta- ulations. ble to transfer into civilian new safety initiatives without tional costs or stifling inno-
credit for hours spent behind neously identifying any regu- The reason, according to cockpits. automatically imposing a 2- vation.”


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B4 | Monday, November 27, 2017 THE WALL STREET JOURNAL.


Space Taxis Seek to Lower Risks Gaming’s

Boeing and SpaceX
are struggling to meet
NASA’s requirements
for aircraft safety Funding

Can NASA send astronauts The maker of the hit aug-

into space as safely as it mented-reality game “Pokémon
promised? Go” has raised about $200 mil-
The space agency is scruti- lion in new financing.
nizing that question as both Niantic Inc.’s Series B comes
Boeing Co. and Elon Musk’s just weeks after the game maker
SpaceX work on new space- said it plans to release a new ti-
craft that NASA would begin tle called “Harry Potter: Wiz-
using as early as next year to ards Unite.” Niantic gained no-
fly astronauts to the interna- toriety in the summer of 2016 as
tional space station. “Pokémon Go” became an over-
These commercial efforts night hit, pushing millions of
face formidable obstacles in players to get outside and chase
meeting safety requirements digital monsters with their
set by the National Aeronau- smartphones.
tics and Space Administra- Spark Capital led the round,
tion, posing policy and public- with participation from Found-

relations dilemmas for the ers Fund, Meritech, Javelin

agency’s chiefs. Venture Partners, along with
Experts say NASA likely will branding agency You & Mr.
require inspections in space to Jones and internet company
reduce the threat of cata- NetEase Inc., according to
strophic accidents, a last-ditch Niantic.
safeguard that it had hoped to A NASA test exercise. The agency is preparing to use next-generation spacecraft to send astronauts to the international space station. Niantic Chief Executive John
avoid when approving the plan Hanke said via email that the
three years ago. Still, it is un- station, a 250-mile-high orbit- call for a statistical limit of no funding would enable new stra-
clear whether such on-orbit ing laboratory. NASA’s ulti- more than one possible fatal Debris in Space submitted by each of the con- tegic opportunities for the com-
checks by NASA would do mate sign-off also is likely to accident per 270 flights. By tractors. So far, the agency has pany.
enough to alleviate dangers prompt congressional scrutiny. contrast, scheduled airlines ex- Poses the Biggest committed roughly $4 billion “Pokémon Go” reached $1
from space debris and tiny Boeing recently said com- perience roughly one accident Danger to Capsules overall on the two systems, billion in revenue globally just
meteor fragments, say experts pany engineering models show per one million departures with a total of 16 flights ex- seven months after its release
inside and outside the agency. its CST-100 Starliner “is a safe, globally. Although even the pected through the mid-2020s. last July—faster than any other
For months, these experts robust vehicle” that will meet new standard seems perilous, it The biggest safety chal- A NASA spokeswoman mobile game, including Activi-
have warned that without new all mandatory safety numbers. is a reflection of the mission’s lenge for designers stems from said the agency plans to sion Blizzard Inc.’s “Candy
protections, neither Boeing’s “NASA will review that analy- technical difficulties. The stan- thousands of tiny meteors or “work with the contractors Crush Saga,” according to App
nor SpaceX’s vehicles appear sis” next month, according to a dard is still more than four particles that can damage or [Boeing and SpaceX] through Annie Inc.
likely to comply with safety Boeing spokeswoman, and “we times safer than that of the penetrate space capsules. Trav- their final certification” and In “Pokémon Go,” Niantic
levels. Minutes of NASA’s will not speculate on their space shuttle fleet that was re- eling at approximately 17,000 neither company “has re- combines location-tracking and
Aerospace Safety Advisory findings prior to the meeting.” tired in 2011 under budgetary miles an hour, even a paint quested a formal waiver from augmented reality, technology
Panel, composed of six inde- Space Exploration Technol- strains and safety concerns. chip can spark disaster. Boeing NASA” not to comply with the that overlays digital images on
pendent safety watchdogs, are ogies Corp., the official name The commercial designers Co. partly addressed this by required safety metrics. real-world environments. Play-
rife with concerns of danger. of Mr. Musk’s space-transpor- are seeking to alleviate other changing its design to install Aerospace industry consul- ers can search for beloved mon-
The stakes are high both for tation company, recently said it risks. They are concerned that Kevlar backing. SpaceX is rely- tant Doug Cooke, a former se- sters like Pikachu on a digital
NASA and the companies. Af- and NASA are “working closely extra shielding to better safe- ing on other features. nior NASA official, said he wasn’t map on their phones. When they
ter fatal explosions of two to ensure all safety require- guard equipment and crews The international space sta- surprised by difficulties comply- arrive at the locations on the
space shuttles in 1986 and ments are met” for its new, from collisions with debris could tion also faces risks from such ing with safety standards related map, they see digital images of
2003, NASA said it was com- manned Dragon spacecraft. It make a spacecraft too heavy. orbital debris, but its design to orbital debris. “It’s always the popular characters blended
mitted to making future space- said the company was evaluat- Today, only Russian rockets minimizes hazards and it can been a difficult requirement to into real-world environments.
craft substantially safer. Fall- ing a number of options, in- and spacecraft transport as- maneuver to avoid collisions. meet,” Mr. Cooke said. “NASA San Francisco-based Niantic
ing short of the safety cluding space inspections. Gov- tronauts into orbit. But Mos- A comprehensive review of has to make a judgment on also makes “Ingress,” another
benchmark could further delay ernment and company experts cow’s safety record for un- capsule safety, slated for early where the overall risk stands,” a mobile game that combined
the goal of ending American “have jointly made significant manned missions is worse next month, is expected to decision that is “always done augmented reality and location
reliance on Russian spacecraft progress in defining” orbital than that of the U.S., and provide NASA’s preliminary with a lot of data and a lot of years before “Pokémon Go.” The
to ferry U.S. astronauts to and debris risks, SpaceX said. Washington is eager to take conclusions about assessments hand-wringing,” he said. game never attained widespread
from the international space NASA’s requirements now back that responsibility. popularity.


Legal Notices
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Continued from page B1
dia as a cheap and effective
malaria prevention. Today,
CLASS ACTIONS we can see how one technol-
ogy, Facebook groups, can
serve as a lifeline for parents

 of children with rare dis-
            eases while also radicalizing
        political extremists.
                 There is no absolute good
        or bad here, just how good

      or bad a technology is in a
        > 0 8 given context. This points to
            8FA -H*, E @B 70 a problem tech companies
   !"   !#  $%& ' F -4 + - -4  are too often reluctant to
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, $ ' # 
23   2 &)3' means they have an obliga-
-!  8 tion to try to anticipate the
    ,   / B%%& 8%B 9F&F
     1  - +/ E *99% 990 potential impact of anything Melvin Kranzberg in the 1960s. He became a technology historian.
4   )  &) $ 5 ('  H46/ B -4  they produce.
, /      !  )) 4 +64 *9 G sort of intrinsic power, and the U.S. and the former
 !!/ 1  4  4 , $"' G"  2. “Invention is the it doesn’t,” says historian U.S.S.R.? Or was that conflict
2- +/ 3 ) 4 )   %4/  - mother of necessity.” Robert C. Post, who was itself driven by previous
  / ( 4    -7%0,FB BF-% E 8F&BF 70 Yes, that’s backward from Prof. Kranzberg’s friend and technological developments
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the way you remember it. It colleague. “It has to be moti- that allowed Hitler to
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 means “every technical inno- vated by political power or threaten both nations?
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make it fully effective,” Prof. Recently, representatives human activity.”
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( -8 9 -8  *  -8 0
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$ 2-8 &)3'  4  
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4 ) - +/    . - :4 *) 14 (      - from phone cases to 5G wire- their services, bringing them “But it doesn’t want to do
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at your phone too much? A and print. These disclosures anything.” The point, Mr.
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times a day. regulation not for any tech- spite its power, how we use
/ / ( 4 )             !   nical reason, but because, in technology is up to us.
( ) 1= ) (  4  )    *) 14 !1 3. “Technology comes in 2006, the Federal Election The trick is, because tech-
   7))= /   :4 14) )   - 0 14 packages, big and small.” Commission took a light nology generally reaches
/        !  :  (   4 1 1  /   To understand any part of touch when regulating the mass adoption via corpora-
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the rest of it, Prof. Kranz- vacy, data transparency, na- they profit from them.
    , & 74    - 0 04= I4 )  ( berg wrote—including the tional security and antitrust Mr. Cook sets the tone at
- 0   )  !4  ) 1= )  /   : 1 human beings essential to issues in tech—more because Apple, with his penchant for
 $:4/ 1 &)     )(/  4  )    C4 how it functions. While inno- of a shift in our culture than public pronouncements
)  4  )5'  4 < 4  "         !  vation destroys jobs, it also in the technology itself. about how the company pro-
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creates countless new ones. tects users’ data. Google has
   4 )   5  )(/ Steel, oil and rail were the 5. “All history is rele- recently adopted antidis-
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      *) 14 !   ( 4 14 / //   ing the 21st century. them anywhere on Earth. they’re rolled out.
!   14 1   1        That led to the development As Prof. Kranzberg pre-
(((47,49/  1 /  *) 14 ! I4 4  / 14 1 4. “Although technology of a war-proof communica- sciently noted at the dawn of
(/   )(/ - 0 09 04  - 0 04 5 ! #  might be a prime element tion system: the internet. the internet age, “Many of
@/1 7 A       $    $      in many public issues, non- Many related innovations our technology-related prob-
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, $ '
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as an abstraction has some existential contest between sive scale.”
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or
THE WALL STREET JOURNAL. Monday, November 27, 2017 | B5

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B6 | Monday, November 27, 2017 NY * *** THE WALL STREET JOURNAL.


Disney’s ‘Coco’ Tops Holiday Weekend BY BEN FRITZ $93.6 million and $82.1 million, but until January. That is due
respectively, over the Thanks- to differing schedules for
In what’s becoming a holi- giving weekend. But it was school holidays, said Disney
day tradition, Walt Disney Co. above 2010’s successful “Tan- distribution chief Dave Hollis.
won Thanksgiving weekend at gled,” which made its debut to Its domestic success comes
the box office with a new fam- $68.7 million on the holiday as the once-reliable Pixar has
ily animated film. weekend and Pixar’s 2013 flop had a mixed track record at
“Coco,” from the company’s “The Good Dinosaur,” which the box office recently, with
Pixar Animation Studios, started with $55.5 million. this summer’s disappointment
opened to a healthy $71.2 mil- Perhaps most important for “Cars 3” and “The Good Dino-
lion in the U.S. and Canada be- Disney and Pixar, “Coco” saur” bracketing the 2016 hit
tween Wednesday and Sunday, earned overwhelmingly posi- “Finding Dory.”
according to studio estimates. tive reviews and audiences For the holiday weekend,
That put it ahead of the su- gave it an average grade of A+, “Justice League” declined 57%
perhero team-up “Justice according to market research from its soft $93.8 million
League,” which grossed $59.6 firm CinemaScore. That means opening. That is less than the
million over the same period it is positioned well for a long 69% and 67% drops for 2016’s
and family drama “Wonder,” box-office run driven by “Batman v Superman” and

which came in No. 3 with a strong word-of-mouth. “Suicide Squad,” respectively,

surprisingly robust $32.3 mil- Disney now has 10 of the 11 but more than the 43% second
lion. Both films opened the highest openings ever over the weekend box-office drop for
prior weekend. Thanksgiving holiday, most of this summer’s “Wonder
“Coco,” about a boy on a which were family animated Woman.” It is an indication
journey in the land of the films. The only competitor’s audience buzz on “Justice
dead, opened below the 2013 movie in the mix is the 2008 League” is decent compared
Disney hit “Frozen” and last comedy “Four Christmases” from with other DC superhero films
The animated film ‘Coco’ came out ahead of ‘Justice League’ at the box office amid positive reviews. year’s “Moana,” which grossed Time Warner Inc.’s Warner Bros. from Warner Bros., though not
“Coco,” which draws exten- stellar. The nearly $300 mil-
sively on Mexican cultural tra- lion production has grossed a
ditions, is already the highest total of $481.3 million globally.
grossing movie ever in that Ticket sales for “Wonder,”
country in local currency, with meanwhile, declined only 19%,
$53.4 million through Sunday. a sign that word-of-mouth is
Combined with a solid start in very strong for the adaptation
China and so-so-debut in Rus- of a book about a physically
sia, “Coco” has grossed $82.2 scarred boy’s first days at
million overseas. It has yet to school. The low-budget movie
open in many foreign coun- is becoming a hit for distribu-
tries, including all of Western tor Lions Gate Entertainment
Europe. In some major mar- Corp. and its financing partners
kets, such as Brazil, the U.K. on the movie, Participant Media
and South Korea, it won’t de- and Walden Media.

Estimated Box-Office Figures, Through Sunday

Developing countries will consume FILM DISTRIBUTOR


65% of global energy by 2040.

1. Coco Disney $49 $71.2 —
2. Justice League Warner Bros. $40.7 $171.5 -57
3. Wonder Lions Gate $22.3 $69.4 -19
4. Thor: Ragnarok Disney $16.8 $277.5 -23
5. Daddy’s Home 2 Paramount $13.3 $72.7 -8
The world energy landscape is changing dramatically.
*Friday, Saturday and Sunday Source: comScore
For example, two-thirds of energy-supply investment
is now taking place in emerging economies. This

creates opportunities as well as risks. CME Group is undergoing profound
gives producers and suppliers the tools they need changes as print advertising
to capture these opportunities while managing risks revenues continue to decline
and publishers face off with
in volatile oil and natural gas markets. This is how Continued from page B1 tech giants for online ad dol-
the energy industry can deliver in the face of ever- lion paid subscriptions, which lars. Meredith is betting team-
changing consumer demand. This is how the world will account for one-quarter of ing up with Time will give it
revenue. more scale online to compete
advances. Learn more at This is at least the third with Alphabet Inc.’s Google
time Meredith has attempted and Facebook Inc., which are
to buy Time. Meredith made a projected to account for more
run earlier this year but than 63% of U.S. digital adver-
couldn’t secure enough financ- tising spending this year, ac-
ing, and Time in late April cording to eMarketer.
ended the sales process. Mere- The impact has been dra-
dith was also in talks to buy a matic, especially on smaller
number of Time titles in 2013 publishers, contributing to
that ended with Time Warner consolidation in the magazine
Inc. instead spinning off Time industry. Most recently, Hearst
Inc. into a separate publicly agreed to acquire family-
traded company. owned magazine publisher
This time around, Meredith Rodale Inc., and Jann Wenner
approached Time with a fully is seeking to sell his majority
financed offer, including $650 stake in Rolling Stone.
million from a private-equity Time Inc. has been invest-
unit of Koch Industries called ing in online video and
Koch Equity Development. branded content, yet its print
The backing of the Koch magazine circulation and ad-
brothers, together with a vertising still account for
group of bank lenders, imme- about two-thirds of total reve-
diately gave Meredith’s re- nue. In the first nine months
newed effort greater weight. of the year, magazine revenue
Koch Industries is one of the dropped 17% to $1.3 billion.
largest privately owned com- Time Inc. claims 30 million
panies in the U.S., and the two print subscribers. Time ex-
billionaire brothers who con- pects to generate about $1 bil-
trol it, Charles Koch and David lion this year in nonmagazine
Koch, are known for support- revenue.
ing conservative causes. Meredith’s own magazine
Mr. Harty described the revenue has slipped slightly,
Koch investment as “passive” but it has somewhat of a buf-
and said the firm “won’t have fer thanks to its ownership of
any influence on Meredith’s local television stations. For
operations, including edito- the fiscal year ended June 30,
rial.” Koch Industries, he revenue at its magazine group
added, has expressed no inter- fell 2% to $1.08 billion, while
est in acquiring any individual its TV station group saw reve-
Time Inc. titles. nue rise 15% to $630 million.
Mr. Lacy said he has never Meredith describes itself as
met with the Koch brothers. a business whose “cornerstone
“They won’t have a seat on the is knowledge of the home,
board of which I chair,” he family, food and lifestyle mar-
added. kets.” Such Time titles as Real
A representative for Koch Simple, InStyle and People, as
Industries didn’t immediately well as Cooking Light, South-
respond to a request for com- ern Living, and Well Done, a
ment. social video brand, will all fit
The magazine industry, like neatly alongside Meredith’s
the broader media landscape, current portfolio.

CME Group is a trademark of CME Group Inc. The Globe logo is a trademark of Chicago Mercantile Exchange Inc. All other trademarks are the property of their respective owners.
Copyright © 2017 CME Group. All rights reserved.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or
THE WALL STREET JOURNAL. Monday, November 27, 2017 | B7


HNA Deal
Under Fire
Highland Loses Ruling on Ouster
Arbitration panel says public recently in a lawsuit ing in court against another

From Swiss firm falsely accused

portfolio manager of
filed by Mr. Terry in Dallas
County District Court to re-
cover the award, as the money
former fund manager, Patrick
Daugherty. The firm sued Mr.
Daugherty in 2012, alleging he
BY JULIE STEINBERG can’t be automatically col- defamed Highland and publi-
improper relationship lected with just an arbitration cized confidential information
Chinese conglomerate HNA ruling. The two sides are ex- after leaving in 2011. Mr.
Group Co. supplied false in- BY MATT WIRZ pected to continue their battle Daugherty countersued, alleg-
formation and failed to dis- in the district court. ing he had been forced out of
close key ownership stakes of An arbitration panel found A Highland spokeswoman the firm for refusing to ap-
some of its executives while that fund-management com- said in a statement: “In this prove asset transfers ordered
acquiring a company last pany Highland Capital Man- ongoing compensation dis- by Mr. Dondero. A jury found
year, a Swiss regulator found. agement used pretexts and pute, Highland’s remaining in favor of each of the sides on
The regulator, the Swiss false allegations of a sexual re- claims regarding Josh Terry’s different issues in 2014 and
Takeover Board, said Friday lationship with a co-worker to misconduct, including over a both Highland and Mr. Daugh-
that HNA, which has been fire a portfolio manager with- year of malicious taping of co- erty have since been litigating
facing increasing scrutiny out paying millions of dollars workers and counter-parties, to collect the amounts the jury
from regulators in the U.S. it owed him. will dwarf the arbitration awarded them.
and China, last year gave in- The finding is one of sev- award.” The arbitration panel Highland has subpoenaed
correct information about eral legal reversals over the found that Mr. Terry was enti- The Wall Street Journal re-
two of its own stakeholders past several years for the Dal- tled to keep all the recordings lated to the litigation between
in its offer prospectus for its las-based firm, which has been he had made of his conversa- the firm and Mr. Daugherty.
$1.5 billion deal to acquire fighting in court with former tions with Highland employ- Dow Jones has challenged the
Swiss air-travel logistics com- investors, former employees ees. subpoena and the matter is
pany Gategroup Holding AG. and trading partners since the Highland specializes in pending before the Dallas
The board said HNA inac- financial crisis. trading distressed debt and Court of Appeals. Mr. Daugh-
curately represented the own- Highland’s founder, James secured loans of companies erty was found in contempt of
ership stake held by Beijing Dondero, fired the firm’s most court in that case in August
resident Guan Jun as well as productive portfolio manager, and was sentenced to 38 days
that of Bharat Bhise, chief ex- Josh Terry, in June 2016 after in jail, a ruling he is now ap-
ecutive of Hong Kong-based Mr. Terry opposed a plan by
The finding is one of pealing.
private-equity and invest- Mr. Dondero to transfer funds several legal reversals Mr. Terry was in good

ment advisory firm Bravia between Highland investment standing at Highland, manag-
Capital. vehicles and to delay repaying
over the past several ing more than $10 billion of
The regulator said their money owed to Highland in- years for the firm. the firm’s assets under man-
share holdings were actually vestors, the Dallas arbitration agement, until his abrupt fir-
12.01% and 17.15%, respec- panel determined in October. ing, according to the ruling.
tively, not 12.35% and 17.4%, Mr. Terry believed the plan James Dondero in 2011. He fired Highland’s Josh Terry last year. The conflict started in 2016
as HNA had claimed in the of- was a breach of his fiduciary with junk credit ratings and when Mr. Dondero instructed
fer prospectus. duty to Highland clients and him, Highland sued Mr. Terry, The relationship never hap- managed about $39 billion at Mr. Terry to lend $17 million
HNA also failed to disclose an external lawyer hired by who had been trying to collect pened and “this allegation was its peak in 2007. The firm took from an investment fund Mr.
that the two were holding the firm sided with him retirement investments from based solely on someone’s fan- heavy losses in the financial Terry managed to another
stakes on behalf of the com- against Mr. Dondero, accord- his former employer. Highland tasy related to costumes they crisis, leading to the liquida- Highland fund to pay for the
pany’s co-founders, including ing to the panel. alleged Mr. Terry had acted wore to an office Halloween tion of several of its hedge acquisition of a Brazilian latex
Chen Feng, Wang Jian and “Dondero was simply angry against the interests of inves- party,” the panel stated. Two funds and to multiple lawsuits. manufacturer, according to the
Adam Tan, who should have and realized Terry was not a tors in a fund he managed and other sexual relationships Its assets under management ruling. Mr. Dondero also
been listed as the beneficial ‘yes man’ willing to let Don- that he had sexual relation- Highland alleged Mr. Terry have shrunk to $13.5 billion, planned to postpone a $56
owners of the shares, the reg- dero have his wrongheaded ships with several subordi- had with co-workers were in- according to a company web- million payment owed in May
ulator said. way,” the panel found in its nates. The court ordered the significant in one case and un- site. 2016 to investors in other
“We cooperated fully with ruling. “So Dondero fired two parties to arbitration. proven in the other, according Highland also lost an arbi- Highland funds, the panel
the Swiss Takeover Board’s Terry on the spot and later Mr. Terry never caused to the arbitrators. tration in 2016 against inves- found.
inquiry, and we respect its sought to characterize Terry’s damage or loss to the fund The panel said Mr. Dondero tors in one of its hedge funds Mr. Terry opposed the plan
authority in this matter,” a termination of employment Highland alleged he misman- retrospectively constructed a who alleged they had been to delay repaying money owed
spokesman for HNA said. ‘for cause’.” aged, according to the arbitra- pretext for the firing to justify cheated out of millions of dol- to clients. In early June 2016,
HNA will pay operating The panel also found Mr. tion ruling. The arbitration not paying Mr. Terry $5.7 mil- lars. The firm subsequently an internal Highland commit-
costs of 50,000 Swiss francs Terry “did not prove that the panel, made up of three for- lion he was owed by Highland. reached an agreement with tee approved the Brazilian ac-
($51,000) and could face sole reason for his termination mer Texas district court Arbitrators awarded Mr. Terry the investors. Separately, a quisition but required the $56
monetary penalties for failing was his refusal to commit an judges, also determined that $7.9 million in damages and New York State Supreme Court million obligation be paid
to provide complete informa- illegal act.” The panel didn’t Highland’s accusation that Mr. interest. judge in April dismissed a law- without further delay.
tion during the takeover. The rule on whether Mr. Dondero’s Terry had sex with a junior “The arbitration award suit by the firm accusing an That left Mr. Dondero with
size of such a potential pen- plan would constitute a breach lawyer at the firm and in- speaks for itself,” said Rogge investor of libel, a ruling High- less money to fund his plan
alty, if one is imposed, hasn’t of fiduciary duty. volved her in alleged financial Dunn, Mr. Terry’s attorney. land is appealing. and he promptly fired Mr.
been made clear. Three months after it fired improprieties was “offensive.” The decision was made Highland also is still fight- Terry, the panel determined.

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B8 | Monday, November 27, 2017 THE WALL STREET JOURNAL.

Dow Jones Industrial Average S&P 500 Index New to the Market
Last Year ago
23557.99 s 199.75, or 0.86% last week Trailing P/E ratio 20.74 20.89 2602.42 s 23.57, or 0.91% last week Trailing P/E ratio 24.49 24.35
Last Year ago
Public Offerings of Stock
High, low, open and close for each of P/E estimate * 19.35 17.86 High, low, open and close for each of P/E estimate * 19.50 18.45
Dividend yield 2.19 2.48 Dividend yield 1.92 2.12
IPOs in the U.S. Market
the past 52 weeks the past 52 weeks
All-time high 23590.83, 11/21/17 All-time high: 2602.42, 11/24/17 None expected this week

Current divisor 0.14523396877348

Lockup Expirations
23000 2600 Below, companies whose officers and other insiders will become eligible
to sell shares in their newly public companies for the first time. Such
22000 65-day moving average 2500 sales can move the stock’s price.
Lockup Offer Offer amt Through Lockup
expiration Issue date Issuer Symbol price($) ($ mil.) Friday (%) provision
21000 2400
Dec. 3 June 6, ’17 ShotSpotter SSTI 11.00 35.4 30.7 180 days
Sources: Dealogic; WSJ Market Data Group
65-day moving average 20000 2300

Week's high 200-day moving average

IPO Scorecard
DOWN UP 19000 2200 Performance of IPOs, most-recent listed first
% Chg From % Chg From

Monday's open Friday's close

Company SYMBOL Friday3s Offer 1st-day Company SYMBOL Friday3s Offer 1st-day
2100 IPO date/Offer price close ($) price close IPO date/Offer price close ($) price close
Friday's close Monday's open 18000

Big Rock Ptnrs Acquisition 10.03 0.3 0.2 SailPoint Tech 15.80 31.7 21.5
200-day moving average BRPAU Nov. 20/$10.00 SAIL Nov. 17/$12.00
Week's low 2000
17000 AMERI Hldgs 3.25 –21.1 –6.9 scPharmaceuticals 14.07 0.5 –0.2
AMRH Nov. 17/$4.12 SCPH Nov. 17/$14.00
Bars measure the point change from Monday's open
Bluegreen Vacations 14.25 1.8 9.6 Sterling Bancorp 12.82 6.8 5.4
16000 1900 BXG Nov. 17/$14.00 SBT Nov. 17/$12.00
N D J F M A M J J A S O N N D J F M A M J J A S O N Legacy Acquisition 10.00 ... ... Stitch Fix 18.62 24.1 22.9
LGC.U Nov. 17/$10.00 SFIX Nov. 17/$15.00
NYSE weekly volume, in billions of shares market Composite Level Brands 5.50 –8.3 –0.9 Arsanis 16.57 65.7 18.1

Financial Flashback LEVB Nov. 17/$6.00 ASNS Nov. 16/$10.00

20 The Wall Street Journal, Nov. 27, 2007 Sources: WSJ Market Data Group; FactSet Research Systems
10 Citigroup shares fell although the bank announced a $7.5
0 billion investment by the Abu Dhabi Investment Other Stock Offerings
N D J F M A M J J A S O N Authority in exchange for a 4.9% stake in the bank. Secondaries and follow-ons expected this week in the U.S. market
Weekly P/E data based on as-reported earnings from Birinyi Associates Inc. None expected this week
Major U.S. Stock-Market Indexes Nasdaq Composite Off the Shelf
Latest Week 52-Week % chg s 106.37, or 1.57% “Shelf registrations” allow a company to prepare a stock or bond for
High Low Close Net chg % chg Low Close (l) High % chg YTD 3-yr. ann. sale, without selling the whole issue at once. Corporations sell as
Dow Jones
last week
conditions become favorable. Here are the shelf sales, or takedowns,
Industrial Average 23617.80 23360.58 23557.99 199.75 0.86 19097.90 l 23590.83 23.0 19.2 9.8 over the last week:
Transportation Avg 9656.31 9456.16 9620.20 137.11 1.45 8783.74 l 10038.13 6.4 6.4 1.6 Takedown date/ Deal value Registration
Utility Average 762.32 754.76 759.07 0.99 0.13 626.66 l 774.47 18.6 15.1 8.7 Issuer/Industry Registration date ($ mil.) (mil.) Bookrunner(s)
Total Stock Market 27003.22 26712.18 26990.54 272.32 1.02 22773.93 l 26990.54 17.1 16.0 7.9 Black Knight Nov. 20 $227.5 ... GS
Barron's 400 699.28 687.76 696.57 9.18 1.33 583.16 l 697.81 17.1 15.8 8.4 6850 Computers & Electronics May 8,317

Nasdaq Stock Market Performance Food Group Nov. 20 $141.3 ... Barclays
6800 Food & Beverage Nov. 16,316
Nasdaq Composite 6890.02 6779.49 6889.16 106.37 1.57 5251.11 l 6889.16 27.6 28.0 13.2
Nasdaq 100 6410.77 6301.88 6409.29 94.78 1.50 4734.10 l 6409.29 31.6 31.8 14.4
Standard & Poor's
6750 Public and Private Borrowing
17 20 21 22 23 24
500 Index 2604.21 2578.24 2602.42 23.57 0.91 2191.08 l 2602.42 17.6 16.2 7.9 November Treasurys
MidCap 400 1863.97 1839.40 1859.19 18.45 1.00 1623.28 l 1859.19 13.3 12.0 8.5 DJ US TSM Monday, November 27 Tuesday, November 28
SmallCap 600 930.89 909.07 927.25 18.34 2.02 808.59 l 927.81 12.4 10.7 10.6 s 272.32, or 1.02% Auction of 13 and 26 week bills; Auction of 4 week bill;
Other Indexes last week announced on November 22; settles on November 30announced on November 27; settles on November 30
Russell 2000 1524.18 1492.93 1519.16 26.34 1.76 1313.80 l 1519.16 12.8 11.9 8.6 Auction of 2 year note; Auction of 7 year note;
0.97 l 12430.52 announced on November 22; settles on November 30announced on November 22; settles on November 30
NYSE Composite 12431.69 12294.96 12421.94 119.05 10808.63 14.2 12.3 4.0
Value Line 550.25 542.63 549.04 6.28 1.16 496.60 l
549.04 8.7 8.5 2.9 26975 Auction of 5 year note;
announced on November 22; settles on November 30
NYSE Arca Biotech 4225.66 4106.03 4217.84 67.83 1.63 3075.02 l
4304.77 25.3 37.2 7.4
NYSE Arca Pharma 538.74 531.24 538.23 3.71 0.69 463.78 l 560.52 13.5 11.8 -0.3 26850
KBW Bank 100.01 98.88 98.92 -0.27 -0.27 85.30 l 102.31 13.8 7.8 10.5 Public and Municipal Finance
PHLX§ Gold/Silver 82.15 79.69 81.11 0.24 0.29 73.03 l 96.72 2.5 2.9 3.7 Deals of $ 150 million or more expected this week
PHLX§ Oil Service 132.74 129.57 131.64 0.33 0.25 117.79 l 192.66 -21.5 -28.4 -19.0 Final Total Rating Bookrunner/
PHLX§ Semiconductor 1342.05 1311.35 1341.69 34.76 2.66 836.79 l 1341.69 50.6 48.0 26.1 Sale maturity Issuer ($mil.) Fitch Moody’s S&P Bond Counsel(s)
CBOE Volatility 12.08 8.56 9.67 -1.76 -15.40 9.14 l 16.04 -21.6 -31.1 -8.5 26600
17 20 21 22 23 24 Nov. 28 Dec. 1, 2042 Illinois 750.0 N.R. N.R. N.R. Preliminary/
Philadelphia Stock Exchange Sources: SIX Financial Information; WSJ Market Data Group November
Chapman and Cutler LLP

International Stock Indexes Commodities and Nov. 29 June 1, 2030 Washington 190.1 N.R. N.R. N.R. Preliminary/

Latest Week 52-Week Range YTD

Currencies Last Week YTD
Suburban McKennon
Region/Country Index Close % chg Low Close High % chg Sanitary Dt Shelton & Henn
Close Net chg %Chg % chg
World The Global Dow 2993.71 1.44 2455.59 • 2993.71 18.3 DJ Commodity 615.71 2.62 0.43 8.54 Nov. 30 prelim. Washington 499.1 N.R. N.R. N.R. Preliminary/
DJ Global Index 389.48 1.38 318.80 • 389.48 19.5
TR/CC CRB Index 192.22 1.83 0.96 -0.15 K&L Gates LLP
DJ Global ex U.S. 263.11 1.78 208.83 • 263.11 23.0
Crude oil, $ per barrel 58.95 2.24 3.95 9.74
Americas DJ Americas 626.51 1.01 529.05 • 626.51 15.9
Natural gas, $/MMBtu 2.813 -0.28 -9.17 -24.46 Dec. 1 prelim. Central Utah 185.4 N.R. N.R. N.R. George K
Brazil Sao Paulo Bovespa 74157.37 0.98 57110.99 • 76989.79 23.1
Gold, $ per troy oz. 1286.70 -9.10 -0.70 11.89 Wtr Baum &
Canada S&P/TSX Comp 16108.09 0.68 14951.88 • 16131.79 5.4
Conservancy Dt Company Inc/—
Mexico S&P/BMV IPC 47941.88 0.18 44555.26 • 51713.38 5.0 U.S. Dollar Index 92.76 -0.91 -0.97 -9.25
Chile Santiago IPSA 3820.81 –6.57 3137.71 • 4255.93 18.5 WSJ Dollar Index 86.41 -0.68 -0.78 -7.02
Dec. 1 prelim. Clark- SD 315.3 N.R. N.R. N.R. J P Morgan
EMEA Stoxx Europe 600 386.63 0.74 339.36 • 396.77 7.0 Euro, per dollar 0.8381 -0.0099 -1.16 -11.83
Securities LLC/—
Stoxx Europe 50 3170.49 1.05 2810.21 • 3276.11 5.3 Yen, per dollar 111.57 -0.54 -0.48 -4.65
Eurozone Euro Stoxx 389.89 0.89 323.64 • 400.44 11.3 U.K. pound, in dollars 1.33 0.0116 0.88 8.00 Dec. 1 prelim. Delaware City- 360.0 N.R. N.R. N.R. Citi/—
Euro Stoxx 50 3581.23 0.95 3015.13 • 3697.40 8.8 52-Week Ohio
Austria ATX 3328.48 0.42 2485.18 • 3445.23 27.1 Low Close(l) High % Chg
Belgium Bel-20 3985.46 0.79 3427.61 • 4118.51 10.5
DJ Commodity 532.01 l 616.58 11.39 Dec. 1 prelim. Denver City 252.5 N.R. N.R. N.R. Raymond
France CAC 40 5390.46 1.34 4510.39 • 5517.97 10.9
and Co- James/—
Germany DAX 13059.84 0.51 10513.35 • 13478.86 13.8 TR/CC CRB Index 166.50 l 195.14
Greece Athex Composite 723.18 1.50 604.06 • 858.08 12.4 Crude oil, $ per barrel 42.53 l 58.95 27.99
Israel Tel Aviv 1432.71 1.93 1363.50 • 1478.96 –2.6 Natural gas, $/MMBtu 2.56 l 3.93 -8.82
Dec. 1 prelim. Florida 600.0 N.R. N.R. N.R. M. Stanley/—
Italy FTSE MIB 22416.31 1.46 16217 • 23046 16.5 Gold, $ per troy oz. 1127.80 l 1346.00 9.21
Netherlands AEX 540.63 0.75 449.60 • 555.22 11.9 Development Fin
Portugal PSI 20 5283.35 0.47 4392.12 • 5475.67 12.9 U.S. Dollar Index 91.35 l 103.25 -8.61
Russia RTS Index 1166.09 2.97 973.33 • 1195.61 1.2 WSJ Dollar Index 84.49 l 93.56 -5.90
Dec. 1 prelim. Houston Co- 610.0 N.R. N.R. N.R. Goldman &
South Africa FTSE/JSE All-Share 60323.95 0.33 48935.90 • 61211.52 19.1 Euro, per dollar 0.83 l 0.96 -11.24
Texas Co/—
Spain IBEX 35 10053.50 0.43 8607.1 • 11135.4 7.5
Yen, per dollar 107.84 l 118.18 -1.46
Sweden SX All Share 577.11 –0.04 514.43 • 600.20 8.0
l 6.85
Dec. 1 prelim. Iowa Finance 346.0 N.R. N.R. N.R. BoA Merrill/—
Switzerland Swiss Market 9325.60 1.55 7779.11 • 9325.60 13.5 U.K. pound, in dollars 1.20 1.36 Authority
U.K. FTSE 100 7409.64 0.39 6730.72 • 7562.28 3.7
Asia-Pacific Real-time U.S. stock Dec. 1 prelim. Long Island 350.0 N.R. N.R. N.R. Citi/—
S&P/ASX 200
Shanghai Composite
3353.82 –0.86
0.42 5400.4
3052.79 •
• 6049.4
8.1 WSJ
quotes are available on Track most-
Hong Kong Hang Seng 29866.32 2.29 21574.76 • 30003.49 35.8 active stocks, new
India S&P BSE Sensex 33679.24 1.01 25807.10 • 33731.19 26.5 highs/lows, mutual Dec. 1 prelim. Maryland 426.0 N.R. N.R. N.R. BoA Merrill/—
Japan Nikkei Stock Avg 22550.85 0.69 18274.99 • 22937.60 18.0 funds and ETFs. Stadium
Malaysia FTSE Bursa Malaysia KLCI 1717.23 –0.26 1617.15 • 1792.35 4.6 Plus, get deeper money-flows data and Authority
Singapore Straits Times 3442.15 1.77 2859.33 • 3442.15 19.5 email delivery of key stock-market
South Korea Kospi 2544.33 0.41 1963.36 • 2557.97 25.6 data. Dec. 1 June 15, 2047 NYS 323.6 N.R. N.R. N.R. RBC Cptl Mkt/
Taiwan Weighted 10854.09 1.42 9078.64 • 10854.57 17.3
All are available free at Environmental Facs SquirePattonBoggsLLP/DSeaton&Associates
Source: SIX Financial Information;WSJ Market Data Group
Dec. 1 prelim. Pennsylvania 400.0 N.R. N.R. N.R. BoA Merrill/—
Hghr Ed
Consumer Rates and Returns to Investor Benchmark Yields and Rates Facs Auth
U.S. consumer rates Selected rates Treasury yield curve Forex Race
Yen, euro vs. dollar; dollar vs. Dec. 1 prelim. PennsylvaniaStateUniversity 200.0 N.R. N.R. N.R. BoA Merrill/—
A consumer rate against its New car loan Yield to maturity of current bills,
benchmark over the past year notes and bonds major U.S. trading partners avg†: 3.00% Dec. 1 prelim. San Francisco 316.8 N.R. N.R. N.R. Hilltop
Think Mutual Bank 1.89% 3.75% 10%
City/Co- Securities Inc/—
4.00% s
Rochester, MN 800-288-3425 Euro California
Prime rate 3.00 5
UniBank for Savings 2.24%
3.50 Dec. 1 prelim. Texas A&M 158.8 N.R. N.R. N.R. Goldman &
Whitinsville, MA 800-578-4270 2.25 0
s University Co/—
TrustCo Bank 2.37% Friday

3.00 Yen
t 1.50 –5 System
Orlando, FL 407-422-7129
New car loan 2.50 De Witt Savings Bank 2.45% 0.75 –10 s Dec. 1 prelim.
One year ago Texas A&M 360.0 N.R. N.R. N.R. Barclays/—

Clinton, IL 217-935-6342 WSJ Dollar index

2.00 0.00 –15 University
D J FMAM J J A S O N Lake City Bank 2.49% 1 3 6 1 2 3 5 710 30 2017 System
2017 Warsaw, IN 888-522-2265 month(s) years
Yield/Rate (%) 52-Week Range (%) 3-yr chg maturity Dec. 1 prelim. Univ of 437.7 N.R. N.R. N.R. Wells Fargo &
Interest rate Last (l)Week ago Low 0 2 4 6 8 High (pct pts) Sources: Ryan ALM; Tullett Prebon; WSJ Market Data Group
Colorado Bd of Co/—
Federal-funds rate target 1.00-1.25 1.00-1.25 0.25 l 1.25 1.00 Regents
Prime rate* 4.25 4.25 3.50 l 4.25 1.00
Corporate Borrowing Rates and Yields
Libor, 3-month 1.47 1.44 0.93 l 1.47 1.23 Spread +/- Treasurys, Dec. 1 prelim. Univ of Texas 253.5 N.R. N.R. N.R. Barclays/—
Yield (%) in basis pts, 52-wk Range Total Return
Money market, annual yield 0.33 0.32 0.26 l 0.36 -0.10 Bond total return index Last Wk ago Last Low High 52-wk 3-yr Sys Bd of
Five-year CD, annual yield 1.49 1.48 1.19 l 1.49 -0.07 Regents
10-yr Treasury, Ryan ALM 2.342 2.352 2.32 1.78
30-year mortgage, fixed† 3.89 3.90 3.73 l 4.33 -0.11
DJ Corporate 3.129 3.162 6.09 3.97
15-year mortgage, fixed† 3.29 3.30 2.99 l 3.50 0.09 Dec. 1 prelim. Wisconsin 369.5 N.R. N.R. N.R. RBC Cptl
Aggregate, Barclays Capital 2.650 2.660 37 35 47 3.65 2.38
Jumbo mortgages, $424,100-plus† 4.28 4.26 4.21 l 4.88 -0.02 Mkt/—
High Yield 100, Merrill Lynch 5.520 5.587 345 307 436 8.146 4.051
Five-year adj mortgage (ARM)† 3.70 3.55 3.20 l 4.03 0.20
Fixed-Rate MBS, Barclays 2.870 2.890 24 12 34 2.60 2.00
New-car loan, 48-month 3.00 2.99 2.85 l 3.36 -0.19 Dec. 1 prelim. Wisconsin Hlth 273.2 N.R. N.R. N.R. J P Morgan rates based on survey of over 4,800 online banks. *Base rate posted by 70% of the nation's largest Muni Master, Merrill 2.132 2.045 8 -4 18 4.566 2.564
& Ed Fac Auth Securities LLC/—
banks.† Excludes closing costs.
Sources: SIX Financial Information; WSJ Market Data Group;
EMBI Global, J.P. Morgan 5.559 5.587 319 303 393 10.349 5.661
Sources: J.P. Morgan; Ryan ALM; S&P Dow Jones Indices; Barclays Capital; Merrill Lynch
Source:Thomson Reuters/Ipreo
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or
THE WALL STREET JOURNAL. * * NY Monday, November 27, 2017 | B9


Listed are the 300 largest closed-end funds as 52 wk 52 wk 52 wk Prem12 Mo 52 wk

measured by assets. Prem Ttl Prem Ttl Prem Ttl Fund (SYM) NAV Close /Disc Yld Prem Ttl
Closed-end funds sell a limited number of shares and Fund (SYM) NAV Close /Disc Ret Fund (SYM) NAV Close /Disc Ret Fund (SYM) NAV Close /Disc Ret Fund (SYM) NAV Close /Disc Ret
invest the proceeds in securities. Unlike open-end Blkrck MunHl NJ Qlty MUJ 15.57 14.41 -7.5 5.6
funds, closed-ends generally do not buy their shares ASA Gold & Prec Metals ASA 13.07 11.23 -14.1 4.7 John Hancock Finl Opps Fd BTO 35.93 35.65 -0.8 10.8 AllianzGI Equity & Conv NIE 23.22 21.29 -8.3 22.0 BlRk MuHldg NY Qlty MHN 14.72 13.84 -6.0 5.0 Wildermuth Endwmnt Str 12.83 NA NA 11.6
back from investors who wish to cash in their holdings. Wildermuth Endwmnt S:C 12.66 NA NA 10.7
Instead, fund shares trade on a stock exchange. BlkRk Enh Cap Inco CII 16.77 16.00 -4.6 26.3 Macquarie Glbl Infrstrctr MGU 28.06 24.86 -11.4 36.2 Calamos Conv Hi Inco Fd CHY 11.94 11.93 -0.1 27.4 BlkRk MuniYld CA Fd MYC 15.47 15.00 -3.0 5.1
a-The NAV and market price are ex dividend. b-The BlkRk Engy Res Tr BGR 15.00 13.56 -9.6 2.7 NeubergerBermanMLPIncm NML 9.13 8.37 -8.3 -3.2 Calamos CHI 11.33 11.52 +1.7 28.6 BlkRk MuniYld CA Quality MCA 15.61 14.77 -5.4 5.1 Wildermuth Endwmnt S:I 12.89 NA NA NS
NAV is fully diluted. c-NAV is as of Thursday’s close. d- BlackRock Enh Eq Div Tr BDJ 9.73 9.04 -7.1 20.1 Neubrgr Brm Rl Est Sec Fd NRO 5.80 5.44 -6.2 14.3 World Equity Funds BlkRk MuniYld MI Qlty MIY 15.35 14.06 -8.4 5.5 Income Preferred Stock Funds
NAV is as of Wednesday’s close. e-NAV assumes rights
BlackRock Enh Gl Div Tr BOE 14.36 13.50 -6.0 25.2 Nuveen Dow 30 Dynamic DIAX 18.59 17.99 -3.2 29.0 Alpine Tot Dyn Div AOD 10.01 9.09 -9.2 31.0 MultiStrat Gro & Inc:A 15.29 NA NA 4.3
offering is fully subscribed. f-Rights offering in process. BlRk Muyld NY Qlty MYN 14.10 12.93 -8.3 5.0
g-Rights offering announced. h-Lipper data has been BlkRk Intl Grwth&Inco BGY 7.06 6.60 -6.5 30.3 Nuveen Core Eq Alpha JCE 16.40 16.14 -1.6 29.5 Cdn Genl Inv CGI 32.78 23.56 -28.1 32.6 MultiStrat Gro & Inc:C 14.96 NA NA 3.5
Eaton Vance CA Mun Bd EVM 12.25 11.75 -4.1 4.9 MultiStrat Gro & Inc:I 15.48 NA NA 4.5
adjusted for rights offering. j-Rights offering has
BlkRk Health Sci BME 35.39 35.89 +1.4 13.9 Nuveen Diversified Div JDD 13.12 12.16 -7.3 19.8 China Fund CHN 24.42 22.19 -9.1 42.6 Invesco CA Value Mun Incm VCV 13.34 12.62 -5.4 5.0
expired, but Lipper data not yet adjusted. l-NAV as of
Clough Global Opp Fd GLO 12.41 11.26 -9.3 39.9 MultiStrat Gro & Inc:L 15.07 NA NA 3.8
previous day. o-Tender offer in process. v-NAV is BlackRck Rscs Comm Str Tr BCX 10.19 9.03 -11.4 17.8 Nuveen Engy MLP Fd JMF 10.69 10.39 -2.8 -14.7 Invesco PA Value Mun Incm VPV 13.98 12.08 -13.6 5.1
EtnVncTxAdvGblDiv ETG 18.22 17.14 -5.9 31.3 The Relative Value:CIA VFLEX 25.45 NA NA NS
converted at the commercial Rand rate. w-Convertible BlackRock Science & Tech BST 28.87 27.29 -5.5 53.7 NuvNASDAQ100DynOver QQQX 23.21 24.35 +4.9 36.6 Invesco Inv Grade NY Muni VTN 14.50 13.74 -5.2 5.0 Convertible Sec's. Funds
Note-NAV (not market) conversion value. y-NAV and EatonVance TxAdv Opport ETO 24.58 24.59 0.0 33.5
market price are in Canadian dollars. NA signifies that BlackRock Utility & Infr BUI 21.32 21.27 -0.2 22.2 Nuveen Real Est Incm Fd JRS 11.58 11.09 -4.2 17.8 Nuveen CA AMT-Free Qual NKX 15.73 15.35 -2.4 5.0 Calmos Dyn Conv and Inc CCD 21.12 20.87 -1.2 18.4
the information is not available or not applicable. NS CBREClarionGlblRlEstIncm IGR 8.90 7.80 -12.4 15.4 NuvS&P500DynOverwrite SPXX 16.51 NA 24.5 First Trust Dynamic Eur FDEU 18.65 NA 37.0 Nuveen CA Muni Value NCA 10.41 10.51 +1.0 3.9 World Equity Funds
signifies fund not in existence of entire period.
Central Fund of Canada CEF 13.64 13.38 -1.9 14.1 NuveenS&P500Buy-Write BXMX 14.43 14.15 -1.9 16.7 Gabelli Glbl Multimedia GGT 9.42 8.79 -6.7 29.5
12 month yield is computed by dividing income Nuveen CA Quality Muni NAC 15.59 14.40 -7.6 5.5 BMO LGM Front ME 10.42 NA NA 16.1
ClearBridge Amer Engy CBA 7.36 NA -7.7 Reaves Utility Fund UTG 33.16 30.81 -7.1 13.6 GDL Fund GDL 11.62 9.90 -14.8 8.9 CalamosGlbTotRet CGO 13.61 14.19 +4.3 26.5
dividends paid (during the previous twelve months for Nuveen MD Qual Muni NMY 14.50 12.64 -12.8 5.0
periods ending at month-end or during the previous ClearBridge Engy MLP Fd CEM 12.74 NA -9.7 Tekla Hlthcr Investors HQH 24.07 22.72 -5.6 3.8 India Fund IFN 31.27 27.44 -12.2 32.8
Nuveen MI Qual Muni NUM 15.29 13.33 -12.8 4.8 Prem12 Mo
fifty-two weeks for periods ending at any time other
Clearbridge Engy MLP Opp EMO 10.34 NA -12.0 Tekla Healthcare Opps Fd THQ 18.94 17.32 -8.6 13.6 Japan Sml Cap JOF 14.93 13.24 -11.3 38.3
than month-end) by the latest month-end market price Nuveen NJ Qual Muni NXJ 15.77 13.57 -14.0 5.2 Fund (SYM) NAV Close /Disc Yld
adjusted for capital gains distributions. Clearbridge Engy MLP TR CTR 11.02 NA -3.8 Tekla Life Sciences HQL 19.91 19.36 -2.8 13.6 Korea Fund KF 51.02 44.64 -12.5 38.9
Nuveen NY AMT-Free NRK 14.34 12.95 -9.7 4.9 U.S. Mortgage Bond Funds
Source: Lipper
Cohen & Steers Infr Fd UTF 25.83 23.21 -10.1 28.7 Tekla World Hlthcr Fd THW 14.49 13.44 -7.2 10.0 Mexico Fund MXF 16.05 NA 13.1
Morgan-Stanley Asia-Pac APF 21.01 18.30 -12.9 35.0 Nuveen NY Qual Muni NAN 14.97 13.97 -6.7 5.1 Vertical Capital Income 12.69 NA NA 3.2
Friday, November 24, 2017 C&S MLP Incm & Engy Opp MIE 10.00 9.20 -8.0 -3.0 Tortoise Energy TYG 23.39 25.71 +9.9 -9.5
MS China a Shr Fd CAF 28.39 24.20 -14.8 33.3 Nuveen OH Qual Muni NUO 16.53 14.77 -10.6 4.7 Loan Participation Funds
52 wk Cohen & Steers Qual Inc RQI 13.80 12.68 -8.1 19.6 Tortoise MLP Fund NTG 15.65 15.88 +1.5 -6.3
Prem Ttl MS Emerging Fund MSF 20.31 17.74 -12.7 34.2 Nuveen PA Qual Muni NQP 15.13 13.34 -11.8 5.2 504 Fund 9.79 NA NA 3.7
CohnStrsPfdInco RNP 23.07 20.99 -9.0 22.7 Voya Gl Equity Div IGD 8.26 7.88 -4.6 23.7 Nuveen VA Qual Muni NPV 14.40 13.02 -9.6 4.3 FedProj&TrFinanceTender 10.07 NA NA NS
Fund (SYM) NAV Close /Disc Ret
Cohen & Steers TR RFI 13.57 12.71 -6.3 14.3 Income Preferred Stock Funds
MS India Invest IIF 40.15 35.97 -10.4 44.9
New Germany Fund GF 21.89 19.47 -11.1 58.8 PIMCO California Muni PCQ 14.07 17.18 +22.1 5.3 Invesco Sr Loan A 6.65 NA NA 4.2
General Equity Funds CLSeligmn Prem Tech Gr Fd STK 23.13 23.89 +3.3 40.4 Calamos Strat Fd CSQ 12.77 12.19 -4.5 30.8 Invesco Sr Loan B 6.65 NA NA 4.2
Swiss Helvetia Fund SWZ 14.05 12.61 -10.2 27.2 PIMCO California Mun II PCK 8.59 10.11 +17.7 5.6
Adams Divers Equity Fd ADX 17.03 14.77 -13.3 29.1 Duff & Phelps DNP 10.02 11.35 +13.2 19.9 Cohen & Steers Dur Pfd LDP 27.31 26.18 -4.1 18.4 Invesco Sr Loan C 6.66 NA NA 3.5
Boulder Growth & Income BIF 12.36 10.49 -15.1 24.0 Templeton Dragon TDF 24.89 22.01 -11.6 41.0 52 wk
Duff&PhelpsGblUtilIncFd DPG 17.68 15.65 -11.5 12.2 Cohen & Strs Sel Prf Inco PSF 27.96 27.96 0.0 19.8 Prem Ttl Invesco Sr Loan IB 6.65 NA NA 4.4
Central Securities CET 32.40 26.88 -17.0 28.3 Templeton Emerging EMF 19.89 17.72 -10.9 52.1
Eaton Vance Eqty Inco Fd EOI 14.73 14.29 -3.0 25.4 FT Interm Duration Pfd FPF 24.82 NA 24.7 Fund (SYM) NAV Close /Disc Ret Invesco Sr Loan IC 6.65 NA NA 4.3
CohSteer Opprtnty Fd FOF 13.69 12.89 -5.8 18.0 Virtus Total Return Fund ZF 13.48 12.67 -6.0 26.5
Eaton Vance Eqty Inco II EOS 15.62 15.09 -3.4 21.2 Flaherty & Crumrine Dyn DFP 26.47 26.74 +1.0 25.5 Invesco Sr Loan Y 6.65 NA NA 4.4
Cornerstone Strategic CLM 13.42 14.89 +11.0 20.3 Voya Infr Indls & Matls IDE 16.74 16.19 -3.3 25.4 General Equity Funds
EtnVncRskMngd ETJ 9.97 9.20 -7.7 13.3 Flaherty & Crumrine Pfd FFC 20.49 20.86 +1.8 15.2 RiverNorth MP Lending RMPLX 25.16 NA NA 6.6
EtnVnc TaxAdvDiv EVT 22.97 22.53 -1.9 20.5
Wells Fargo Gl Div Opp EOD 6.27 NA 31.3 Specialized Equity Funds
Sierra Total Return:T SRNTX 24.88 NA NA NS
Etn Vnc Tax Mgd Buy-Write ETB 16.26 16.63 +2.3 3.1 John Hancock Pfd Income HPI 21.38 21.39 0.0 15.3 Griffin Inst Access RE:A 27.01 NA NA 6.9
Gabelli Dividend & Incm GDV 24.02 22.50 -6.3 20.2 Eaton Vance BuyWrite Opp ETV 14.90 15.18 +1.9 10.5 John Hancock Pfd II HPF 21.13 21.20 +0.3 14.9 Prem12 Mo Voya Senior Income:A 12.50 NA NA 5.3
Fund (SYM) NAV Close /Disc Yld Griffin Inst Access RE:C 26.57 NA NA 6.1 Voya Senior Income:C 12.48 NA NA 4.8
Gabelli Equity Trust GAB 6.51 6.13 -5.8 19.9 Eaton Vance Tax-Mng Div ETY 12.10 11.86 -2.0 24.5 John Hancock Pfd Inc III HPS 18.87 18.31 -3.0 15.5
U.S. Mortgage Bond Funds Griffin Inst Access RE:I 27.17 NA NA 7.2 Voya Senior Income:I 12.46 NA NA 5.6
Genl American Investors GAM 39.68 33.52 -15.5 18.7 EatonVanceTax-MngdOpp ETW 11.56 11.89 +2.9 23.8 JHancock Pr Div PDT 15.92 16.91 +6.2 30.9 Griffin Inst Access RE:L 26.99 NA NA NS
Guggenheim Enh Fd GPM 8.93 8.77 -1.8 22.9 EtnVncTxMngGlDvEqInc EXG 9.39 9.30 -1.0 25.1 LMP Cap & Inco Fd SCD 13.82 NA 14.0 BlackRock Income Trust BKT 6.64 6.14 -7.5 5.1 Voya Senior Income:W 12.51 NA NA 5.6
Griffin Inst Access RE:M 26.88 NA NA 6.4
HnckJohn TxAdv HTD 26.25 25.76 -1.9 25.9 Fiduciary/Clymr Opp Fd FMO 11.32 10.96 -3.2 -18.2 Nuveen Pfd & Incm Opps Fd JPC 10.76 10.46 -2.8 19.4 Nuveen Mtg Opp Term Fd JLS 26.54 25.55 -3.7 5.2 High Yield Bond Funds
NexPointRlEstStrat;A 20.73 NA NA 7.9 Griffin Inst Access Cd:A NA NA NA NS
Liberty All-Star Equity USA 6.67 6.07 -9.0 30.4 FT Energy Inc & Growth Fd FEN 22.34 22.19 -0.7 -5.7 Nuveen Pfd & Incm Secs Fd JPS 10.37 10.29 -0.8 26.8 Investment Grade Bond Funds
NexPointRlEstStrat;C 20.67 NA NA 7.1 Griffin Inst Access Cd:C NA NA NA NS
Royce Micro-Cap RMT 10.66 9.36 -12.2 22.5 FstTrEnhEqtIncFd FFA 16.53 15.70 -5.0 24.6 Nuveen Preferred & Incm JPI 25.94 25.25 -2.7 17.6 Blackrock Core Bond Tr BHK 14.90 14.10 -5.4 5.5
NexPointRlEstStrat;Z 20.68 NA NA 8.1 Griffin Inst Access Cd:F NA NA NA NS
Royce Value Trust RVT 17.82 16.00 -10.2 28.4 First Tr Engy Infr Fd FIF 18.50 18.00 -2.7 4.1 BlkRk Credit Alloc Incm BTZ 14.83 13.29 -10.4 6.3
TCW Strategic Income Fund TSI 5.61 NA 13.3 Resource RE Div Inc:A 10.16 NA NA 6.6 Griffin Inst Access Cd:I NA NA NA NS
Source Capital SOR 44.31 40.33 -9.0 16.1 First Tr MLP & Engy Incm FEI 13.94 14.13 +1.4 -4.4 Virtus Global Dividend ZTR 12.94 13.45 +3.9 39.4 John Hancock Income Secs JHS 15.56 14.75 -5.2 5.4
Resource RE Div Inc:C 10.15 NA NA 5.8 Griffin Inst Access Cd:L NA NA NA NS
Tri-Continental TY 29.47 26.27 -10.9 25.1 Gabelli Hlthcr & Well GRX 11.34 9.90 -12.7 6.9 Convertible Sec's. Funds
MFS Inc Tr MIN 4.42 4.18 -5.4 9.2 Resource RE Div Inc:D 10.31 NA NA 6.0
WstAstClymr InfLnkd Fd WIW NA 11.34 NA 3.6 PIMCO Flexible Cr I;Inst 10.52 NA NA NS
Specialized Equity Funds Gabelli Utility Tr GUT 5.53 7.08 +28.1 26.4 AdvntClymrFd AVK 17.56 15.94 -9.2 19.9 Resource RE Div Inc:I 10.59 NA NA 6.6 PionrILSInterval 9.58 NA NA 10.5
WstAssetClymr InflLnk Sec WIA NA 11.61 NA 3.3 Resource RE Div Inc:L 10.16 NA NA NS
Adams Natural Rscs Fd PEO 21.83 18.73 -14.2 1.4 GAMCOGlblGoldNatRscs&Inc GGN 5.41 5.38 -0.6 11.4 AllianzGI Conv & Incm NCV 6.63 7.01 +5.7 23.2 WA Middle Mkt Dbt NA NA NA 11.2
Loan Participation Funds Resource RE Div Inc:T 10.13 NA NA 5.8
AllnzGI NFJ Div Interest NFJ 14.70 13.52 -8.0 15.3 GoldmanSachsMLPIncOpp GMZ 8.28 NA -4.1 AllianzGI Conv & Incm II NCZ 5.95 6.21 +4.4 24.9 WA Middle Mkt Inc WMF NA NA NA 11.2
Apollo Sr Fltg Rate Fd AFT 17.98 16.38 -8.9 7.4 Resource RE Div Inc:U 10.17 NA NA 6.6
AlpnGlblPrProp AWP 7.32 6.41 -12.4 36.7 Goldman Sachs MLPEnergy GER 5.65 NA -11.7 AllianzGI Div Incm ACV 22.82 22.20 -2.7 32.2 Other Domestic Taxable Bond Funds
BlkRk Debt Strat Fd DSU 12.69 11.66 -8.1 6.9 Resource RE Div Inc:W 10.32 NA NA 6.5 Capstone Church Capital 11.43 NA NA 1.5
BlackRock FR Incm Strat FRA 14.92 13.77 -7.7 5.6 SharesPost 100;A 26.47 NA NA -1.7 CION Ares Dvsfd Crdt;A NA NA NA NS
Blkrk FltRt InTr BGT 14.41 13.81 -4.2 5.3 26.47 NA NA NS
Borrowing Benchmarks |
SharesPost 100:I CION Ares Dvsfd Crdt;C NA NA NA NS
BlackstoneGSO Strat Cred BGB NA 15.79 NA 8.4 Tot Inc+ RE:A 29.67 NA NA 7.0 CION Ares Dvsfd Crdt;I NA NA NA NS
Blackstone GSO Sr Float BSL NA 17.26 NA 6.7 Tot Inc+ RE:C 28.89 NA NA 6.2 CNR Select Strategies 7.88 NA NA NS
Money Rates November 24, 2017 Eagle Point Credit ECC NA 19.15 NA 8.3
Eaton Vance FR Incm Tr EFT 15.46 14.18 -8.3 5.7
Tot Inc+ RE:I 30.01 NA NA 7.3 GL Beyond Income 3.69 NA NA NE
Tot Inc+ RE:L 29.63 NA NA NS Palmer Square Opp Income NA NA NA 5.0
Key annual interest rates paid to borrow or lend money in U.S. and international markets. Rates below are a EatonVnc SrFltRate EFR 15.13 14.11 -6.7 6.0 USQ Core Real Estate:I USQIX 25.26 NA NA NS Resource Credit Inc:A 11.19 NA NA 6.4
Eaton Vance Sr Incm Tr EV