For personal, non-commercial use only. Do not edit, alter or reproduce.
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GUIDANCE STARTS WITH HEARING YOU OUT.
Our Financial Consultants listen before they help you plan. Flip to page R10 to learn more.
Last week: DJIA 24100.51 g 288.44 1.2%
What’s
News
Business & Finance
U .S. companies are
making record divi-
dend payouts this year,
providing a silver lining to
what lately has been a
wobbly stock market. A1
 Amazon is having second
thoughts about some of its
online sales because they
don’t make money, and it is
pushing big brands to change
how they use its site. A1
 Renault is pressing Nis-
san to open a discussion into
the balance of power atop
the Japanese car maker. B1
 Of the 10 energy-related
public offerings in the Per-
sian Gulf announced in 2016,
only one has materialized. B1
 A Glencore-controlled min-
ing firm and some individuals
agreed to settle with Canadian
regulators over past business
activities in Congo. B2
 Technology executive Co-
lin Kroll, co-founder of the
popular HQ Trivia web app,
was found dead of an appar-
ent drug overdose. B1
 Boeing opened a new Chi-
nese production facility. B3
 Deloitte named its au-
dit-practice chief as the
firm’s next U.S. CEO. B3
World-Wide
 The charged politics
around funding a wall along
the southern border left both
parties struggling to keep the
government funded as the
clock ticked toward a partial
shutdown at week’s end. A1
 Homelessness rose for the
second straight year, as rents
in many cities soared. A3
 Lawmakers began grap-
pling with whether to re-
spond with legislation to a
federal court ruling that
found the Affordable Care
Act to be unconstitutional. A4
 U.S. negotiators played
a role in crafting new
guidelines to curb global
warming, while protecting
American interests. A8
 Many of Zinke’s biggest pol-
icy changes remain unfinished
as he prepares to depart as In-
terior Department chief. A4
 A strong economy and a
polarizing president have
left Americans with mixed
feelings about the nation’s
course, a new poll finds. A4
 A lull in protests has
given France’s Macron
breathing room to repair
his image and insulate his
pro-business agenda from
further demands. A9
JOURNAL REPORT
Couples Who
Retire to Start
A Business
Wealth Management, R1-10
CONTENTS
Business News...... B3
Crossword.............. A16
Heard on Street... B10
Journal Report... R1-10
Life & Arts..... A13-15
Markets............... B9-10
s 2018 Dow Jones & Company, Inc.
All Rights Reserved
* * * * MONDAY, DECEMBER 17, 2018 ~ VOL. CCLXXII NO. 142
NASDAQ 6910.66 g 0.8%
Tensions Between Ukraine, Russia Rise Over Breakaway Church
GENYA SAVILOV/AGENCE FRANCE-PRESSE/GETTY IMAGES
on
us l,
al a
e
IN PRAYER: The first liturgy since the creation of a new Ukrainian church independent from Russia was conducted in St. Michael’s
Golden-Domed Cathedral in Kiev on Sunday. The move is a setback for Russian President Vladimir Putin. A11
ci on
Record Dividends Buoy Investors
er rs
Last year’s corporate-tax overhaul
m e
reduced companies’ tax burden,
making dividends more attractive.
m rp
Dividends per dollar
of pretax income
$0.6
0.4
co Fo
0.2
0 Indices. More than two dozen
Pre-2003 ’03-’17 ’18
Note: Each period takes into account changes
to corporate and qualified dividend tax rates.
Source: ClearBridge Investments
THE WALL STREET JOURNAL.
Lavish Lifestyle Spelled End
n-
For Carlos Ghosn at Nissan
no
A secret probe unearthed alleged pay scheme, luxury homes
The house that helped
trigger the downfall of By Sean McLain, Phred Dvorak,
Carlos Ghosn is a rose-col- Sam Schechner and
ored mansion in one of Patricia Kowsmann
Beirut’s most expensive
neighborhoods.
Its walls were adorned with portraits of
the automobile titan, who with his second
wife had personally supervised the $15 mil-
lion purchase and renovation of the property, uncomfortable alliance with France’s Renault
people close to Mr. Ghosn say. Two ancient
sarcophagi, unearthed during the remodel-
ing, were visible through a glass floor lead-
ing to a wine cellar.
Why Does Your Coffee Taste Like
Tires? A Bean Battle Brews
i i
Colombian growers reconsider arabica
BY JULIE WERNAU
AND JOHN OTIS
Markets Digest..... B7
Opinion.............. A17-19
Sports........................ A16 MONTERÍA, Colombia—For
Technology............... B4 as long as this country has
U.S. News......... A2-4,6 been producing coffee, one
Weather................... A16
World News...... A8-11
bean has been so reviled by
Colombians that no one dared
grow it.
> Producers have long fa-
vored the milder, more expen-
sive arabica bean and shunned
robusta, the variety most of-
ten found in instant coffee and
in coffee blends.
“People say it tastes like
STOXX 600 347.21 À 0.5% 10-YR. TREASURY g 12/32 , yield 2.891%
BY MICHAEL WURSTHORN S&P 500 is on pace to fall 2.8%
this year for its first annual
U.S. companies are paying loss since 2015, as concerns
out a record amount of divi- including a trade spat with
dends this year, helping prop China, Federal Reserve inter-
up what has been a turbulent est-rate increases and a sharp
stock market. drop in oil prices point to the
Companies in the S&P 500 potential for an economic
have spent nearly $421 billion slowdown. But an index that
on dividends through Novem- measures the S&P 500’s total
ber, eclipsing last year’s mark return, which includes divi-
of about $391 billion and the dends, is roughly flat in 2018
full-year tally of $420 billion, after more than 300 compa-
according to S&P Dow Jones nies in the broad index in-
creased or initiated payouts
companies announced divi- this year.
dend increases so far this It is the latest benefit of a
month, which will push this surge in company profits that
year’s total even higher. was precipitated by last year’s
Those payouts come as the sweeping corporate-tax cut.
Earlier this year, a
team of Nissan Motor Co.
executives working with-
out Mr. Ghosn’s knowl-
edge discovered that the
Beirut house and other properties had actu-
ally been purchased by Nissan, using a net-
work of shell companies. Nissan, which Mr.
Ghosn has led since 1999 in an increasingly
SA, also paid for the building’s renovation,
Please turn to page A12
 Renault pressures Nissan on alliance...................B1
Amazon Targets Unprofitable Items,
i Sharpens Its Focus on Bottom Line
Amazon.com Inc. has trained
people to buy everything from
major appliances to daily sta-
tires. Like petroleum barrels,” ples online. Now it is having
said Andrew Hetzel, a consul- second thoughts about some of
tant in the specialty coffee in- those sales because they don’t
dustry. “I’ve even heard it de-
scribed as ‘the tears of By Laura Stevens,
children.’ ” Sharon Terlep
Arabica makes up 65% of and Annie Gasparro
the world’s coffee production.
However, global demand for make money—and is pushing
less expensive robusta beans big brands to change how they
is rising, especially in Asia. use its site.
That’s left Latin American na- Inside Amazon, the items are
tions scrambling to plant it. known as CRaP, short for “Can’t
Guatemala and Nicaragua are Realize a Profit.” Think bottled
expanding their robusta plan- beverages or snack foods. The
Please turn to page A10 products tend to be priced at
WSJ.com
OIL $51.20 g $1.41
.
ly
The earnings boost was a one-
time catalyst, though, and
with two weeks left in the
year, investors are bracing for
a pullback in profit growth
that could lead companies to
hold their dividends steady, or
cut them, in the months
ahead.
“There was a confluence of
a couple of things that con-
tributed to dividends that
won’t happen again,” said Jim
Tierney, chief investment offi-
cer of concentrated U.S.
growth at AllianceBernstein.
“Far more companies brought
their dividends back and were
more comfortable paying that
Please turn to page A2
INSIDE
THE BATTLE
TO CONTROL
MINDFULNESS
LIFE & ARTS, A13
$15 or less, are sold directly by
Amazon and are heavy or bulky
and therefore costly to ship—
characteristics that make for
thin or nonexistent margins.
As Amazon focuses more on
its bottom line in addition to its
rapid growth, it is taking aim at
CRaP products, according to
major brand executives and
people familiar with the com-
pany’s thinking. In recent
months, it has been eliminating
unprofitable items and pressing
manufacturers to change their
packaging to better sell online,
according to brands that sell on
Amazon and consultants who
work with them.
ADVERTISEMENT
HHHH $4.00
EURO $1.1309 YEN 113.37
Parties
Dig In
On Wall
Funding
With a shutdown
looming, a short-term
deal is under discussion
as the impasse heats up
BY KRISTINA PETERSON
WASHINGTON—The
charged politics around fund-
ing a wall along the southern
border has both parties strug-
gling to keep the government
funded as the clock ticks to-
ward a partial shutdown at
week’s end.
With seven spending bills
set to expire at 12:01 a.m. Sat-
urday, Republicans and White
House officials over the week-
end discussed a two-week
spending measure, aides said,
which would push the fight
into next year. But it wasn’t
clear they would pursue that
route, given that Democrats
will gain more leverage when
they take control of the House
in January. Congressional Re-
publicans are likely to take
their cue from President
Trump, who hasn’t signaled
whether he would be open to a
short-term extension.
Democrats, who aren’t eager
to help the Republican presi-
dent fulfill his signature cam-
paign pledge in 2016, also said
Mr. Trump’s boast at the White
House last week that he would
be “proud” to shut down the
government over wall funding
saddled him alone with the po-
litical blame if one occurs.
On Sunday, both sides made
clear they saw little room for
compromise on the wall,
though that dynamic could
Please turn to page A4
 Outlook: States raise spending
on infrastructure....................... A2
DAVID GOLDMAN/ASSOCIATED PRESS
EXPAND
THE COLLEGE
PLAYOFFS
JASON GAY, A16
One example: bottled water
from Coca-Cola Co. Amazon
used to have a $6.99 six-pack of
Smartwater as the default order
on some of its Dash buttons, a
small device that allows for au-
tomatic reordering with a single
press. But in August, after
working with Coca-Cola to
change how it ships and sells
the water, Amazon notified
Dash customers it was changing
that default item to a 24-pack
for $37.20.
That raised the price per
bottle to $1.55 from $1.17. And
Coca-Cola will start shipping
those orders directly to con-
Please turn to page A11
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
A2 | Monday, December 17, 2018
THE OUTLOOK | By Sarah Chaney and Heather Gillers
States Ratchet Up Spending on Infrastructure
S Comeback
tate and local govern-
ment investment in
roads, bridges, build-
ings and other infrastructure
hasn’t returned to its previ-
ous peak, but it is now show-
ing signs—deep into the ex-
pansion—of a real recovery.
Since the 2007-09 reces-
sion, slow economic growth
and rising expenditures on
Medicaid and pensions
crowded out infrastructure
investment. Spending on
school buildings, hospitals
and public safety languished.
Now, bigger state and lo-
cal tax collections, propelled
in part by an acceleration in
sales-tax receipts from con-
sumer spending, is boosting
capital projects and driving a
municipal borrowing boom.
At a time when other en-
gines of U.S. economic
growth show signs of slow-
ing, public spending at the
state and local level could
help keep the expansion go-
ing.
New money is going into
projects aimed at making cit-
ies and towns more livable
and efficient. Spending on
Urban
The new Urban embodies the
heartbeat of the city.
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transportation infrastructure
in October was up 15% from
a year earlier, according to
Commerce Department data.
Spending on amusement and
recreation facilities was up
31% from a year ago.
“From an economic per-
spective, this is about as
good an environment as a
state or local policy maker is
going to see,” said Dan
White, director at Moody’s
Analytics. “If they’re ever
going to do more one-time
investment for infrastructure
or put more money in their
rainy-day fund…this is ex-
actly the time when you
would expect to see that.”
In all, state and local con-
struction spending was up
9.7% in October from a year
earlier to an annual rate of
$288 billion, still shy of the
$296 billion pace reached in
March 2009.
Borrowing is supporting
the pickup. State and local
governments issued $228.45
billion in bonds for new
projects in the 10 months
through October, a 19% in-
crease from the same period
us l,
al a
e
ci on
er rs
m e
m rp
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Available at:
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* according to Goldman Sachs.
B E V E R LY H I L L S SAN FRANCISCO
LAS VEGAS PHILADELPHIA S E AT T L E
U.S. NEWS
a year earlier, according to
data compiled by Citigroup
Inc. Some borrowers want to
lock in loans now, before in-
terest rates go much higher.
Given the lag between
bond issuance and project
spending, this year’s surge in
bond sales bodes well for
state and local spending in
the coming quarters.
P
ent-up demand for in-
frastructure improve-
ments might also keep
the upturn going into 2019.
Indiana is one such place be-
ginning to address business
and farmer demands for
road and bridge repairs.
Many cities and towns were
unable to repair such infra-
structure for more than a
decade, restrained by declin-
ing revenue. Now, the state
is doling out money to locali-
ties from reserve funding
and gas taxes to finance re-
pairs of roads, bridges and
other infrastructure.
Dennis Maple, a corn and
soybean farmer in Green-
town, Ind., said large equip-
ment often can’t be trans-
Ice Skaters Brave the Rain in New York City
on
GETTING ALL WET: Only a few stalwarts hit the rink on a rainy Sunday in Midtown Manhattan’s
Bryant Park. Sunnier weather, with temperatures in the 40s, was expected to return on Monday.
Record
Dividends
Help Stocks
Continued from Page One
higher dividend, driven by
earnings growth.”
Without the corporate-tax
cut as a stimulus, profit growth
is projected to drop by more
than half next year, with Fact-
Set projecting an 8.3% earnings
expansion rate, down from
nearly 21% this year.
That could put corporate
profits in a tight spot if trade
tensions heighten next year or
economic growth slows, po-
tentially forcing some com-
pany boards to consider halt-
ing their dividend increases or
worse—trimming them.
Companies that are more
leveraged may take a pause,
said Tony DeSpirito, BlackRock
Inc.’s head of U.S. fundamental
active equity, adding that busi-
nesses with more predictable,
consistent cash flows will have
better odds of keeping up their
pace of dividend increases.
For now, analysts are fore-
casting another potentially ban-
ner year for dividends in 2019,
assuming profit growth ends up
near current projections.
Dividends are projected to
increase as much as 6% next
year, albeit less than the 9%
growth rate in 2018, putting the
payouts north of $500 billion,
Helping those forecasts is
the fact that companies are
putting a smaller percentage
of their net income toward
dividends thanks to the corpo-
rate-tax cut, giving them more
room to work with. S&P 500
companies reported a divi-
dend-payout ratio of about
33% as of mid-December, down
from about 38% at the end of
last year, according to FactSet.
“Can the pace of dividend
growth continue? Not a
chance,” Mr. Tierney of Alli-
anceBernstein said. “Will the
level of dividends continue?
Maybe, but certainly not the
rate of growth.”
Take industrial distributor
Fastenal Co.: Strong earnings
and a robust flow of cash led
* * THE WALL STREET JOURNAL.
this month, the city’s first care of the backlog of capital
bond issuance against its projects that we had that we
State and local investment in
own credit since its 2013 hadn’t been able to pay for,”
construction climbed in 2018.
bankruptcy. said Christina Cassotis, chief
$400. billion RECESSION “We have an upward tra- executive of Allegheny
jectory on our property tax County Airport Authority.
and on the value of prop-
N
300
erty,” John Hill, Detroit’s ationwide, state tax
chief financial officer, told revenue grew 6.3% in
200 reporters. 2018 compared with
The bond money will pur- an average 2.5% growth rate
chase new police cars, for the previous seven years,
100
firetrucks and other emer- according to an analysis of
gency vehicles, and fund im- tax-revenue data from Tax
0 provements to parks and Policy Center.
2000 ’05 ’10 ’15
recreational facilities in Moreover, some local gov-
Note: Seasonally adjusted annual rate some of the city’s more pop- ernments are flush with cash
Source: Commerce Department ulous neighborhoods. this year because of tax-law
THE WALL STREET JOURNAL. At the Adams Butzel Rec- changes. Residents of high-
reation Complex on Detroit’s tax states rushed to prepay
ported across rural bridges east side, the city is planning their 2018 property taxes at
because the bridges are too to replace playground equip- the end of 2017 in order to
small. “It’s detrimental to ment, add parking spaces avoid limitations on deduc-
farmers to travel four to five and improve landscaping, tions created by last year’s
miles out of the way,” Mr. city officials said. tax overhaul.
Maple said. “Any time that Pittsburgh’s airport is State tax revenue grew
we have to do extra road planning to spend $75 million 6.3% in the second quarter of
travel, [it] takes longer to next year to revamp a termi- 2018 compared with an aver-
harvest or plant our crop in nal. Separate capital funding age second-quarter growth
a timely manner.” will provide upgrades to fire rate of 2.5% for the previous
The improvement in state alarms, terminal lighting and eight years, according to an
and local finances has airport roads. analysis of inflation-adjusted
buoyed even Detroit, which “We’re finally able to gen- tax revenue data from Tax
sold $135 million in bonds erate enough cash to take Policy Center.
ECONOMIC
.
CALENDAR
ly
Wednesday: The U.S. Com-
merce Department publishes
third-quarter trade data. The
current-account deficit, a mea-
sure of the nation’s trade and fi-
nancial flows with other coun-
tries, narrowed in the second
quarter on ramped-up goods and
services exports. The data will
be watched as the Trump ad-
ministration’s trade spat with
China continues. Economists sur-
veyed by The Wall Street Jour-
AMR ALFIKY/REUTERS
nal expect the trade gap wid-
ened in the third quarter.
The U.S. National Associa-
tion of Realtors releases its
gauge on November sales of
previously owned homes. Pur-
chases of such homes posted
their largest annual decline
since 2014 in October as the
housing market continues to
Spending Spree
Dividend and buyback spending jumped in 2018, and companies are
sputter because of higher mort-
gage rates that are reducing
home affordability. Economists
expected to continue diverting large sums of cash to shareholders surveyed by the Journal expect
next year. sales declined in November
S&P 500 use of cash
The U.S. Federal Reserve
$3 trillion Projections
Capex releases its statement and pro-
jections from its December
2 R&D meeting. Recent economic data
Cash releases, including a solid jobs
acquisitions report, are likely to keep the
1 Fed on track to raise rates at
Buybacks the meeting. Fed officials be-
lieve the economy is on a
0 Dividends strong footing but is likely to
2009 ’15 ’18 ’19 slow in the coming year, a tran-
Source: Goldman Sachs Global Investment Research THE WALL STREET JOURNAL. sition they are monitoring
closely. The pace of the Fed’s
the company to raise its divi- Dividend cuts can be devas- interest-rate increases could
dend twice this year, once in tating for a stock price as they slow next year, analysts say.
January and again in July, can signal to investors that a Friday: The U.S. Commerce
boosting its dividend yield to business may not be as Department publishes its No-
2.9% from 2.3% a year earlier. healthy as thought. vember figures on orders for
But Fastenal’s operating out- General Electric shares, for long-lasting factory goods. Its
look darkened in October when example, fell precipitously after most recently published report
company executives told ana- the ailing conglomerate cut its showed a decline in orders that
lysts that some of the tariffs the quarterly dividend to a token suggested business investment
U.S. enacted on imports were penny a share in October. The is softening, a discouraging sign
directly hurting its customers’ stock is down nearly 60% for for economic growth in the
supply chains in North America, the year, on pace for its worst- fourth quarter. Economists sur-
compressing its margins. ever annual performance. veyed by the Journal think or-
“We don’t know what the That is why even companies ders picked up in November,
next leg is going to be,” Chief that perennially lift their divi- however.
Executive Daniel Florness said dends have warned against The department is also re-
at the time in response to a overdoing it. leasing November personal in-
query about whether margin “Every seven years, don’t come, spending and inflation
pressure will continue in 2019. increase it,” said JPMorgan data on Friday. Its October re-
“We don’t know if we’re going Chase Chief Executive James port showed a fresh sign of
to be sitting here in March Dimon at a Goldman Sachs weakening inflationary pressures,
and 10% [tariffs] is at 25%…or conference earlier this month, although price increases could
10% is at 0%.” even though the bank has accelerate if pressure from labor
Fastenal’s shares are down raised its dividend eight con- shortages and tariffs intensifies
1.5% for the year but up 1.4% secutive years since 2010. or if oil prices pick up after a re-
on a total-return basis. A com- “I’ve seen company after cent slump. Economists sur-
pany executive didn’t return a company get crippled over veyed by the Journal expect
message seeking comment. this every year.” price growth to have picked up.
THE WALL STREET JOURNAL CORRECTIONS 
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 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
RICHARD B. LEVINE/NEWSCOM/ZUMA PRESS
A person sleeps in a New York City subway station. Homelessness nationwide has risen in the past two years, reversing a trend.
Homeless Problem Worsens
BY LAURA KUSISTO
AND NOUR MALAS
Homelessness nudged higher
in 2018 for the second consecu-
tive year, as cities struggled to
get people off the streets even
as many ramped up building and
poured millions of dollars into
potential solutions.
The increase was slight—just
0.3%, according to an annual
report to Congress by the De-
partment of Housing and Urban
Development to be released
Monday. But after seven years
of declines, the small rises over
the past two years are a trou-
bling reversal at a time when
unemployment is at a near 50-
year-low and wages are rising.
“There is a critical shortage
of affordable rental housing in
every jurisdiction across the
country,” said Barbara Poppe,
who oversaw the federal re-
sponse to homelessness under
President Obama. Ms. Poppe
said a lack of affordable rental
homes spurred the homeless
crisis that began in the
mid-1980s and has underpinned
homelessness since.
HUD Secretary Ben Carson
said he believes his agency can
help by taking steps to pro-
mote more housing develop-
ment. Mr. Carson noted that
given escalating home sales
and rental prices, for home-
lessness “to be relatively flat
is actually pretty good.”
Expensive metropolitan ar-
ESTEBAN BIBA/EPA-EFE/REX/SHUTTERSTOCK
Jakelin Caal, a 7-year-old from
Guatemala, died on Dec. 8.
McKinsey Is Scolded
no
In Bankruptcy Case
BY TOM CORRIGAN
A Justice Department official
asked a federal judge to with-
hold payments to McKinsey &
Co. for its work advising a bank-
rupt Colorado coal mining com-
pany, adding another voice to a
chorus of criticism faulting how
the firm discloses potential con-
flicts of interest.
In a Friday filing with the
U.S. Bankruptcy Court in Hous-
ton, Acting U.S. Trustee Henry
Hobbs Jr. said disclosures that
McKinsey filed to support its ap-
plication to advise Westmore-
land Coal Co. are neither trans-
parent nor complete.
Because McKinsey’s disclo-
sures don’t comply with the law,
it shouldn’t be compensated for
the services it has already pro-
vided, he said.
The U.S. Trustee Program
serves as the government’s
bankruptcy watchdog and is
tasked with preserving the in-
tegrity of the system. With Fri-
day’s filing, the Justice Depart-
ment ratcheted up pressure on
McKinsey, which now faces legal
challenges in several courts as
well as the prospect of losing
millions of dollars in compensa-
tion for its work in two large
bankruptcy cases, Westmoreland
and Alpha Natural Resources.
“We stand behind our disclo-
sure practices and continue to
believe they are completely in
line with the law,” a spokesman
for McKinsey said in a state-
* * * *
U.S. NEWS
eas have struggled with how
to tackle homelessness at a
time when limited new hous-
ing supply is being created,
and what does get built tends
to be very expensive. Nearly
one-quarter of the nation’s
homeless population lives in
New York or Los Angeles.
Rents in Los Angeles have
increased 35% since 2012, while
New York rents have grown
20%, according to Reis Inc.
Rents in Seattle, another place
grappling with homelessness,
are up 64%, Reis said.
Overall homelessness in New
York increased 2.8% this year,
driven by an increase in people
living in the city’s shelters,
while the number of people
sleeping on the streets declined.
In the nation’s largest city,
the rise in homelessness in
us l,
recent years has been a politi-
cal challenge for Mayor Bill
al a
e
de Blasio. His administration
has redoubled efforts to
tackle homelessness but has
ci on
at best managed to stabilize
the problem.
The city increased spending
on homeless services by about
$172 million in 2018, which of-
er rs
ficials said was focused on im-
proving living conditions and
security in existing shelters
and opening new shelters. Ste-
m e
ven Banks, the city’s social
services commissioner, said
more than 100,000 people
m rp
have been connected with per-
manent housing through city
Girl’s Family Calls for Probe
co Fo
BY ALICIA A. CALDWELL
Lawyers for the father of a
Guatemalan girl who died in
Border Patrol custody said Sat-
urday that the family is asking
the U.S. government for a neu-
tral and transparent investiga-
tion into the girl’s death.
Jakelin Caal Maquin died
about a week ago at a hospital
n-
in El Paso, Texas, a little more
ment Saturday.
The chapter 11 bankruptcy
process requires advisers to dis-
close all relationships that might
give rise to a conflict of interest,
to ensure that advisers will be
disinterested advocates for their
clients and that other partici-
pants in the cases are aware of
them.
In Westmoreland, McKinsey
withheld the names of six con-
nections as “confidential cli-
ents,” based on what it says is a
longstanding policy of protect-
ing its consulting clients’ identi-
ties.
Court papers show that one
such confidential client accounts
for about 17.5% of McKinsey’s re-
structuring business’s gross an-
nual revenue.
“McKinsey RTS does not
even try to address its pervasive
disclosure deficiencies that
cover about one-fifth of its an-
nual revenues,” Mr. Hobbs said
in his objection. “No other pro-
fessional would be allowed to do
this.”
The McKinsey spokesman
said its disclosures follow a pro-
tocol previously approved by the
U.S. Trustee and that it intends
to file supplements.
A hearing in the Westmore-
land case is set for Tuesday.
Judge David Jones, who is over-
seeing Westmoreland’s bank-
ruptcy, took the unusual step of
ordering both lawyers and
McKinsey officials to attend the
hearing.
Monday, December 17, 2018 | A3
numbers was the culmination
Tough Predicament of a recent boost in funding
Homeless population and coordination that just
kicked in last year.
700,000 people Unsheltered L.A. city voters in 2016 ap-
Sheltered
proved a $1.2 billion bond to
600,000
help build 10,000 units of
500,000
housing for the homeless over
10 years. A countywide sales
400,000 tax passed last year generates
about $350 million annually
300,000 for services ranging from
homelessness prevention, such
200,000 as rental assistance, to help
for the already homeless, such
.
100,000 as mental-health support.
ly
“We are seeing the results of
0 investment that voters have
2007 ’10 ’15 made, and we are doing better
on Source: U.S. Department of Housing and with the resources we have,” M Y L A G O S M Y W AY
Urban Development said Peter Lynn, executive di-
THE WALL STREET JOURNAL. rector of the Los Angeles
Homeless Services Authority.
programs, a sign that the city’s In Los Angeles, entire blocks
“strategies are taking hold.” have given way to tent cities
Smart Caviar is not approved, endorsed or affiliated with Apple, Inc. Watch sold separately.
In Seattle and surrounding far beyond the few locations
King County, the number of where they were once concen-
homeless rose 4% this year, trated. Recognizing a mismatch
raising pressure on local offi- between the long haul of build-
cials spending tens of millions ing homes and a proliferating
of dollars annually on home- population on the streets,
lessness to show more progress. Mayor Eric Garcetti this year
In Los Angeles County, a dedicated special funding for
4.7% decline in the number of every city district to set up
homeless this year marked a temporary shelters.
breakthrough after four con- Mr. Garcetti said in a state-
secutive years of rises, show- ment: “We were encouraged to
ing how major investment on see that we have fewer people
multiple fronts—preventing on the streets than in previous
homelessness while improving years, but we’ll keep pushing
shelters and building hous- forward as aggressively as
ing—can turn the tide. possible until we can bring
Officials said the dent in this crisis to an end.”
than a day after she and her to a station in Lordsburg, N.M.,
father were arrested with a hours after their arrest. She
group of about 160 other peo- became ill during the ride and
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A4 | Monday, December 17, 2018
Health Law Back on Table
BY STEPHANIE ARMOUR
AND KRISTINA PETERSON
WASHINGTON—Lawmak-
ers in both parties began grap-
pling with whether to respond
with legislation to a federal
court ruling that found the Af-
fordable Care Act to be uncon-
stitutional, as Democratic at-
torneys general weighed legal
action intended to support the
health law.
Republicans on Sunday said
they wanted to maintain the
2010 law’s guarantee of insur-
ance coverage for people with
pre-existing conditions. But
they also said they continued
to oppose most or all of the
law, such as its requirement
that most people obtain health
insurance, the so-called indi-
vidual mandate.
How they might accomplish
both goals remained unclear.
“There is widespread sup-
port for protecting people with
pre-existing conditions. There’s
also widespread opposition to
the individual mandate,’’ said
Sen. Susan Collins (R., Maine),
speaking on CNN. She said the
insurance-purchasing require-
ment, which is intended to en-
CAROLYN KASTER/ASSOCIATED PRESS
Interior Secretary Ryan Zinke, seen at the Congressional Ball on Saturday, is subject to more than a dozen government investigations.
Zinke Exit Unlikely to Shift Policy
BY HEIDI VOGT
AND VIVIAN SALAMA
WASHINGTON—Many of
Ryan Zinke’s biggest policy
changes remain unfinished as
he prepares to depart as head
of the Interior Department,
though his deputy and possi-
ble successor appears likely to
continue along a similar route.
Mr. Zinke, subject of more
than a dozen government in-
vestigations, will leave his po-
sition by the end of the year,
President Trump said on Sat-
urday. Mr. Trump said he ex-
no
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sure enough healthy people
buy policies to make the plans
economically viable, was par-
ticularly burdensome for low-
and middle-income families.
Democrats called for a
quick vote to intervene in the
federal case, to show the judge
in the case that the intent of
Congress has been to preserve
the law.
Sen. Chuck Schumer (D.,
N.Y.) said Sunday on NBC that
Lawmakers grapple
for a response to a
judge’s move that
endangers health law.
Democrats will press the GOP
leadership to hold a floor vote
urging intervention in the case.
“We have a divided House and
Senate,” he said. “I think the
courts have to be the first and
best way to go.”
U.S. District Judge Reed
O’Connor, a George W. Bush ap-
pointee, ruled Friday that the
ACA is unconstitutional. He
on
us l,
al a
e
ci on
er rs
m e
m rp
pects to nominate a new inte-
rior secretary this week.
co Fo
Mr. Zinke has pushed for-
ward on efforts to shrink the
amount of land the Obama ad-
ministration had designated as
national monuments. He has
worked to accelerate the open-
ing of the Arctic National
Wildlife Refuge for oil-and-gas
drilling and announced plans
to reverse an Obama-era pro-
tection for the sage grouse as
an endangered species.
But Mr. Zinke’s departure
will leave his successor to try
n-
to complete many of these
P W L C 10 11 12
sided with the claims of 20 Re-
publican-led states that
brought a lawsuit seeking to
strike down the law.
The law remains in place for
now, and the Trump adminis-
tration has signaled it plans to
enforce it. But its future is un-
certain, and the ruling essen-
tially leaves decisions on im-
plementing the law to the
states in the near term.
Congress has been unable
to pass substantive health
care legislation at a time
when Republicans control
both houses of Congress and
the White House. With Demo-
crats taking control of the
House next month, the pros-
pects for anything beyond
modest legislation are likely
to become dimmer.
That could mean the next
substantial steps rest on legal
action rather than legislation.
The legal staff working for
Attorney General Xavier Bec-
erra of California, one of sev-
eral Democratic-led states
moving to defend the health
law, spent the weekend exam-
ining their legal options. They
said they would challenge the
decision soon.
changes. Expanded drilling
and the sage grouse decision—
along with rollbacks of rules
for offshore-drilling safety and
methane controls—are all still
in various stages of review
and are likely to face court
challenges from environmental
groups.
Democratic lawmakers and
interest groups could use the
confirmation process to call
for a shift in approach.
“There is a concern that
what could happen is we
would just have the Depart-
ment of Interior operating
Impasse
On Wall
Heats Up
Continued from Page One
change as the spending dead-
line approaches.
“President Trump should
understand, there are not the
votes for the wall in the House
or the Senate. He is not going
to get the wall in any form,”
Sen. Chuck Schumer of New
York, the chamber’s Demo-
cratic leader, said Sunday on
NBC.
Spending bills need 60 votes
to clear procedural hurdles in
the Senate, where Republicans
currently hold 51 seats.
White House senior adviser
Stephen Miller said the presi-
dent was ready to shut down
the government if Democrats
refused to budge on funding.
“We’re going to do whatever
is necessary to build the bor-
der wall to stop this ongoing
crisis of illegal immigration,”
Mr. Miller said on CBS. He said
those steps could include a
shutdown—“if it comes to it,
absolutely.”
Federal agencies have been
put on notice to begin planning
for a shutdown, though a
White House official empha-
sized Sunday that the step is
normal procedure in the event
of a potential funding lapse.
Republicans who had hoped
to label any partial shutdown a
“Schumer shutdown” backed
H T G K B F A M 1 2 3 4 5 6
U.S. NEWS
House Democrats are gear-
ing up to push legislation in-
troduced in March by Repre-
sentatives Frank Pallone Jr.
(D., N.J.), Richard Neal (D.,
Mass,) and Bobby Scott (D.,
Va.) that would block Trump
administration initiatives to
roll back the ACA.
Many Republicans said on
the campaign trail this fall that
they supported some goals of
the ACA, most prominently en-
suring coverage for people with
existing conditions. Now, Re-
publican lawmakers will have
to decide whether to support
legislation that meets those
goals or resume the GOP push
to overhaul the health law.
“We’ll sit down with the
Democrats, if the Supreme
Court upholds,’’ President
Trump said on Saturday. He
was apparently referring to ex-
pectations that the ACA case
will reach the high court.
Sen. Chuck Grassley (R.,
Iowa), who will lead the Senate
Finance Committee in the new
Congress, said the committee
would hold hearings on the
health law.
—Brent Kendall
contributed to this article.
with the same policies and
just operating more efficiently
without Secretary Zinke at
the head,” said Nada Culver of
the Wilderness Society, an ad-
vocacy group. Mr. Zinke said
he would leave the job on Jan.
2.
Changes seem unlikely un-
der the expected interim sec-
retary, current deputy David
Bernhardt. Mr. Bernhardt is a
former lobbyist for oil-and-gas
industries, and has played a
key role in the administra-
tion’s efforts to scale back en-
dangered-species protections.
U.S. Customs and Border Protection officials patrolled near the border with Mexico last week.
off that line of attack after
Tuesday’s White House meet-
ing with Mr. Schumer and Rep.
Nancy Pelosi (D., Calif.), who is
likely to again be House
speaker come January.
“There’s absolutely no ex-
cuse to shut down government
on this issue or any other is-
sue,” Sen. Susan Collins (R.,
Maine) said Sunday on ABC.
For each party, “the goal of
pleasing the base is a huge im-
pediment to getting a deal
done,” said Greg Valliere, chief
global strategist at Horizon In-
vestments. “Trump feels, with
some justification, that his
base wants a very tough immi-
gration policy and a wall.
That’s a really enormous prom-
ise he made to his base.”
Meanwhile, Democrats, he
said, “smell blood. They want
to show their base how tough
they are.”
GOP leaders had offered to
spread $5 billion in proposed
wall funding over two years,
7 8 9 O I X X **** THE WALL STREET JOURNAL.
Souring Sentiment
Polls show that President Trump’s approval rating has decreased,
while more Americans are less optimistic about how the economy
will turn out next year.
Trump’s job approval
60 %
Disapprove
54%
50
40 Approve
43%
30
Feb. ’17 Jan . ’18 Dec.
Source: WSJ/NBC News telephone poll, most
recent of 900 adults, conducted Dec. 9–12;
margin of error: +/- 3.27 pct. pts.
Divisions Sharpen
Over Nation’s Path
BY AARON ZITNER
WASHINGTON—A strong
economy and a polarizing
president have left Americans
with mixed feelings about the
nation’s course. A majority say
2018 was a good, or at least
average, year for the country,
but also that the U.S. is on the
wrong track.
According to a new Wall
Street Journal/NBC News poll,
one-third of Americans say the
economy will get worse in
2019, the highest level of wari-
ness in five years.
The poll found views of the
.
country’s direction and econ-
ly
omy are sharply split by politi-
cal party. For example, 48% of
Republicans predict economic
improvement in the coming
year and 12% see a downturn,
while those proportions are re-
versed among Democrats.
The poll was conducted
Dec. 9-12, a period of stock-
market turbulence. Unemploy-
ment remains at a 49-year
low, and the pace of wage
growth has picked up.
Overall, 28% of Americans in
the survey said they believe the
economy will get better in 2019,
while 33% said it would get
worse. That was the first time
the larger share of respondents
predicted a worsening economy
since October 2013, when politi-
cal squabbling led to a partial
government shutdown.
The poll results reflect a na-
tion looking for more clarity
about the course of the econ-
omy and in politics, said Micah
Roberts, a Republican pollster
who worked on the survey with
Democrat Fred Yang.
“People can look back and
say, ‘That was a good year, eco-
nomically,’ and can look for-
ward and say, ‘I’m not sure
about the next 12 months,’ ” Mr.
Roberts said. The result of mid-
term elections, in which Repub-
licans lost their House majority
but strengthened their power in
the Senate, “doesn’t provide
clarity,” Mr. Roberts said.
Peter Hart, a Democrat who
also worked on the survey, read
the results as a rebuke to Presi-
dent Trump, given that 56% of
which Democrats have re-
jected. Democrats support bor-
der security but believe the
wall is an ineffective use of
funds.
At the White House on
Tuesday, Democratic leaders
proposed passing six less-con-
troversial spending bills for
funding the government while
extending current funding for
the Department of Homeland
Security, which oversees the
border wall, through Septem-
ber. Alternatively, they said
they were willing to extend
current funding for all seven
bills through the next fiscal
year.
Both proposals would con-
tinue to permit Homeland Se-
curity to build new fencing and
levee walls but bar the admin-
istration from building a solid
concrete border wall.
If the government does shut
down, its effects would likely
be more limited than in previ-
ous shutdowns. Congress has
What Americans think will
happen to the economy next
year
60 %
Stay the same/
unsure
40
Improve
20
Worsen
0
2014 ’15 ’16 ’17 ’18
THE WALL STREET JOURNAL.
respondents said the nation
was on the wrong track despite
a strong economy.
Presented a list of eight ma-
jor events in 2018, Republicans
said the strong economy was
most important to them per-
sonally, followed by trade and
tariff negotiations with U.S.
trading partners.
Democrats said the most im-
portant events were mass
shootings, such as those at a
Florida high school in February
and a Pittsburgh synagogue in
October, as well as the separa-
tion of families and the arrival
of immigrants seeking asylum
at the southern border.
The survey also found in-
creased challenges for Mr.
Trump in his response to the
special-counsel investigation
into Russian interference in the
2016 election.
Some 62% of Americans dis-
agreed with the idea that Mr.
Trump has been honest and
truthful in the investigation,
compared with 56% in an Au-
gust survey of registered vot-
ers. Some 45% said special
counsel Robert Mueller’s inves-
tigation should continue, com-
pared with 34% who said it
should end.
By large majorities, Republi-
cans viewed Mr. Trump as
truthful and said the probe
should end, while large majori-
ties of Democrats and large
shares of independents said the
opposite.
The Wall Street Journal/NBC News
poll was based on nationwide tele-
phone interviews of 900 adults, includ-
ing 405 who use only a cellphone. It
was conducted from Dec. 9-12, 2018, by
the polling organizations of Bill McIn-
turff at Public Opinion Strategies and
Fred Yang at Hart Research Associates.
The sample was drawn in the fol-
lowing manner: Individuals were ran-
domly selected from national lists of
households and were chosen by a sys-
tematic procedure to provide a bal-
ance of respondents by sex. Respon-
dents reached on their cellphone were
randomly selected from national lists
of cellphone numbers.
Of the 900 adults in the survey,
405 respondents were reached on a
cellphone and screened to ensure that
their cellphone was the only phone
they had. In addition, 16 respondents
were reached on a cellphone but re-
ported also having a landline.
Overall, the data’s margin of error is
plus or minus 3.27 percentage points.
CARLOS GARCIA RAWLINS/REUTERS
already funded swaths of the
government, including the De-
fense and Labor departments.
“Obviously we want to avoid
a government shutdown, but if
you look at what the real-
world consequences would be,
I think this shutdown would be
different because we have
funded most of the govern-
ment,” said Rep. Richard Hud-
son (R., N.C.).
Lawmakers and aides said a
short-term deal could grow
more attractive as lawmakers
grow antsy to return home for
the holidays and as Mr.
Trump’s planned vacation in
Florida beckons. Lawmakers
had passed a two-week exten-
sion earlier this month.
Mrs. Pelosi said if the matter
isn’t resolved by the time Dem-
ocrats take the House majority
in January, they would pass an
extension of current funding.
—Andrew Duehren, Natalie
Andrews and Alex Leary
contributed to this article.
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

THE WALL STREET JOURNAL. Monday, December 17, 2018 | A5

.
ly
on
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m e
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n-
no

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A6 | Monday, December 17, 2018
Voter Data
Fight Roils
Democrats
Information is seen as
valuable for campaigns
ahead of 2020
presidential elections
BY JULIE BYKOWICZ
WASHINGTON—Democrats
are in a deepening internal
battle over data seen as key in
helping get out the vote ahead
of looming 2020 presidential
elections, correspondence re-
viewed by The Wall Street
Journal shows.
The party is struggling to
catch up with Republican ef-
forts to collect and store voter
data that allow politicians to
directly target outreach. But a
fight between the Democratic
National Committee and state
parties about how to handle
the process is threatening
unity as the primary period ap-
proaches and candidates turn
to voter lists to build support.
Under the current setup,
state parties collect data and
the DNC covers the cost of
cleaning up and analyzing it.
Democrats want to upgrade
the data sets, adding informa-
tion such as email addresses,
social media accounts and mo-
bile phone numbers. The DNC
has proposed mimicking the
Risk of Jetliner-Drone Crash in Focus After Incident
BY ANDY PASZTOR
U.S. government and indus-
try efforts to prevent accidents
between planes and drones are
receiving heightened attention
in the wake of a possible colli-
sion last week between an Aer-
omexico jetliner and an un-
manned aircraft.
Days after one of the car-
rier’s planes touched down in
Tijuana with a large dent and
an adjoining gash in its nose,
investigators and airline offi-
cials on both sides of the bor-
der still haven’t definitively
said whether the cause was hit-
ting a drone, striking a bird or
some unrelated structural prob-
lem. No injuries were reported.
Aeromexico has said only
that the cause of the damage is
under investigation. According
to U.S. industry and govern-
ment officials, there appeared
to be no sign of feathers or
blood on the damaged section
of the aircraft, nor did Mexican
authorities find embedded
remnants of a drone.
The U.S. National Transpor-
tation Safety Board is looking
to send a sample from the
Mexican jetliner’s nose to the
Smithsonian Institution, which
has experts for identifying mi-
Lawmakers Want More Say in Potential Saudi Nuclear Deal
BY MICHAEL R. GORDON
The Trump administration’s
push to sell civilian nuclear
technology to Saudi Arabia is
emerging as the next battle-
ground in the
ANALYSIS struggle be-
tween the
White House and Congress
over U.S. policy toward Riyadh
following the killing of jour-
nalist Jamal Khashoggi.
The debate over Riyadh’s
nuclear ambitions intensified
last week after Energy Secre-
tary Rick Perry brushed aside
congressional appeals that nu-
clear talks be suspended be-
cause of Mr. Khashoggi’s kill-
ing and traveled to Saudi
Arabia, where he accentuated
the role American companies
could play in helping the coun-
try establish a nuclear energy
program.
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Republican National Commit-
tee’s data project, setting up a
separate trust to warehouse
the information and license it
to all members of the party
and allies, including super
PACs and other outside
groups.
But in an email Friday, the
leader of state Democratic
parties suggested rejecting the
DNC’s plan.
Ken Martin, president of
the Association of State Demo-
cratic Committees, proposed
to his members that state par-
ties cut out the DNC alto-
gether and instead work with
a for-profit company with
whom they have an existing fi-
nancial relationship. That
company, TargetSmart, gives
state parties a commission
when it licenses their raw
voter data to its other clients.
TargetSmart has worked with
state and national Democratic
parties for more than a de-
cade, TargetSmart Chief Exec-
utive Tom Bonier said.
“My first priority and goal
is to protect our state parties
and make sure that our num-
ber one asset, our voter file,
remains firmly in our grasp
and control,” Mr. Martin
wrote. He said members would
hold a conference call about
the matter on Monday.
us l,
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Experts have said their worst fear is a serious accident between a drone and a commercial airliner.
nuscule remains of birds, a
person briefed on the matter
said.
If the culprit was a drone, it
would mark the first docu-
mented collision in North
America between an unmanned
aircraft and a large passenger
jet. A military helicopter and
n-
regional turboprop previously
have been involved in drone-re-
lated accidents in the region,
and there have been dozens of
no
close calls. There also are a
Trump administration offi-
cials have long argued that the
Saudi market is too important
to ignore at a time when the
U.S. nuclear power industry is
in decline. And they assert
that U.S. involvement in a nu-
clear deal would give Wash-
ington the leverage to per-
suade the Saudis to limit their
program to peaceful pur-
poses—leverage they say the
U.S. would forfeit if Riyadh
turned to other suppliers.
But the CIA assessment
that Saudi Crown Prince Mo-
hammed bin Salman likely or-
dered Mr. Khashoggi’s killing
has fueled concerns in Con-
gress that the Saudi leader is
too ruthless to be entrusted
with nuclear technology. Saudi
Arabia has repeatedly said the
crown prince had no knowl-
edge of the operation.
Lawmakers of both parties
are demanding a deal be based
on the most stringent nonpro-
liferation controls. And some
are now pushing legislation
that would give Congress
more of a say by requiring
that a nuclear accord with
Saudi Arabia be approved by
the Senate and the House of
Representatives.
“Before Khashoggi, I would
say our chances were quite
modest,” said Rep. Brad Sher-
man, a California Democrat,
referring to prospects of House
legislation he is drafting. “Now
U.S. NEWS
People waited to vote in Miami in November. Political parties count on voter data to directly target outreach for their candidates.
DNC Chairman Tom Perez
responded in a lengthy Satur-
day email to state party chair-
men and executive directors,
sounding the alarm about Mr.
Martin’s alternative.
“For some inexplicable rea-
son, this proposal would tear
down just about everything
about our current data struc-
ture, reversing so much of the
progress we made over the
past decade,” Mr. Perez wrote.
“In short we are perplexed and
dumbfounded by this proposal.
Since 2005, the DNC and
state parties have shared a na-
tional data set of voter infor-
mation, starting with voter
on rolls provided by state elec-
tion officials and enriched by
information candidates and al-
number of unverified reports of
collisions between drones and
small planes in other countries,
according to air-safety experts.
But for years, many of these
experts have said their worst
fear is a serious accident be-
tween a drone and a commer-
cial airliner filled with hun-
dreds of passengers.
Wednesday’s Aeromexico
incident is bound to prompt
greater focus on the various
ways airports, regulators and
Rep. Brad Sherman’s bill would require both Senate and House
approval for a deal to sell civilian nuclear technology to Riyadh.
I would have to say our
chances are better than 50-50.”
An identical measure is be-
ing prepared in the Senate by
Sens. Ed Markey (D., Mass.)
and Marco Rubio (R., Fla.),
though the prospects for win-
ning approval are likely to be
more challenging.
The prospective nuclear deal
comes amid a broader debate
over Saudi policy, including a
* *** THE WALL STREET JOURNAL.
lies gathered during cam- without running afoul of Fed-
paigns by knocking on doors eral Election Commission pro-
and calling home phones. The hibitions on coordination. The
more data points, the easier it GOP voter data include digital
is for candidates and party information, whereas the
committees to decide which Democratic data is heavy on
messages to use in communi- physical information such as
cating with different types of home addresses and in-person
voters. contacts.
For years, Democrats were The DNC is seeking to start
ahead of Republicans in their its own outside trust. Mr. Mar-
collection and use of such tin said that is legally risky—
data, strategists in both par- and puts too much power out-
ties said. That began to side the party committee. The
change in 2011, when the RNC, FEC ruled unanimously that the
.
under then-chairman Reince Republican setup is permissible.
ly
Priebus, began building its Under Mr. Martin’s pro-
own voter data set. posal, the state parties would
That set is held in an out- feed their data to TargetSmart
side trust so that all candi- and other corporate data part-
dates, party committees and ners, instead of to the DNC or
outside groups can access it its proposed data trust. The
backed by Boeing Co. Local of-
ficials and business leaders in
the San Francisco Bay Area
also have picked Fortem as part
of a proposed airspace safety
and security initiative centered
on the city of Palo Alto, the
company said.
San Diego and Raleigh, N.C.,
are among cities participating
in separate federally spon-
sored pilot programs to de-
velop collision-avoidance sys-
DREW ANGERER/GETTY IMAGES
tems for drone package
delivery other applications.
Timothy Bean, chief execu-
tive of Fortem, said advanced
technology allows the creation
of many more no-fly zones,
but public education and legis-
lation are inadequate to miti-
gate risks. “When it comes to
enforcing the rules, we are far,
drone operators are experi- far behind,” Mr. Bean said.
menting to reduce the risk of The goal of projects incorpo-
such midair crashes, particu- rating various drone-track-
larly in the vicinity of airports ing systems nationwide is to
when planes are more suscep- promptly alert airport manag-
tible because they are flying ers, air-traffic controllers and
slowly and low. law-enforcement agencies about
Some recent developments suspicious airborne intruders.
suggest gradual progress. Salt Some approaches rely on
Lake City International Airport tiny, novel ground radars—
is about to install portable ra- weighing barely two pounds—
dar systems covering two run- designed to detect small, low-
ways supplied by Fortem Tech- flying drones. Others depend
nologies Inc., a startup partly on what are called “geofenc-
ons state.
That prompted a letter to
Congress from experts warn-
ing that the U.S. has never
concluded a nuclear coopera-
tion agreement with a nation
that has publicly stated it
would pursue the development
of nuclear weapons under cer-
tain circumstances. They
warned against relaxing prolif-
eration controls to facilitate a
nuclear deal.
While there has been talk
that the Saudis want to build
as many as 16 reactors costing
ERIK S. LESSER/EPA-EFE/REX/SHUTTERSTOCK
$80 billion, people close to the
talks say that Riyadh is ex-
pected to start with two reac-
tors, most likely purchased
from South Korea with some
American technology.
Under current law, a nu-
clear cooperation agreement
with Saudi Arabia would go
forward unless congressional
opponents backed a joint reso-
lution against it. That means
two-thirds of the lawmakers
would need to oppose the ac-
Senate vote last week to halt cord so Congress could over-
U.S. support for the Saudi-led come a potential veto.
coalition fighting in Yemen. Mr. Sherman’s new bill aims
Prince Mohammed has done to put nuclear accord skeptics
little to help his case in Con- in a more favorable position
gress. In a March interview on by requiring the administra-
CBS’s “60 Minutes” the prince tion to win approval from both
insisted Saudi Arabia doesn’t the Senate and the House.
want to acquire nuclear weap- That means a simple majority
ons but would nonetheless do in one legislative chamber
so as soon as possible if Iran would be enough to block the
ever becomes a nuclear-weap- agreement.
RHONA WISE/AGENCE FRANCE-PRESSE/GETTY IMAGES
DNC is welcome to participate
in that process, he said.
But Mr. Perez said there are
problems with that plan, in-
cluding that state parties
would have to foot the bill for
tasks that had been covered by
the DNC.
Adding to the stress, the
party is about to begin a pres-
idential primary period that
could include 20 or more
Democratic candidates. One of
the first things a candidate of-
ten does is ask for the national
data set.
“I don’t know why, in a year
like 2020, anyone would con-
template blowing up a very
important partnership,” said
Mary Beth Cahill, a DNC con-
sultant.
ing” techniques, which use on-
board navigation and software
to permanently block drones
from entering certain areas.
More work needs to be
done before there is an indus-
try consensus, and the Federal
Aviation Administration is
years from finalizing regula-
tions spelling out performance
requirements. But already,
there is widespread industry
agreement that a fatal airliner-
drone collision could instantly
set back the rapidly growing
industry—and likely prompt
knee-jerk reactions from regu-
lators and lawmakers. “That’s
always been the big fear,” ac-
cording to Kenji Sugahara, a
consultant and drone pilot.
Mr. Sugahara is part of an
industry group, working under
the auspices of the American
Society for Testing and Materi-
als, that is crafting voluntary
industry standards for the re-
mote detection of drones. He
said the standards are expected
to be released early next year.
On Friday, an FAA spokes-
man said technologies able to
detect unmanned aircraft and
prevent collisions “are essen-
tial for safe drone operation
and further integration with
the air-traffic system.”
U.S. WATCH
ARMY
Trump Says He Will
Review Murder Case
President Donald Trump said
he would review the case of a for-
mer U.S. Army commando being
charged with murder.
Mr. Trump tweeted that he
will examine allegations that
Mathew Golsteyn hunted down
and killed a suspected bomb-
maker during his deployment in
Afghanistan in 2010.
Any review or intervention by
Mr. Trump could constitute un-
lawful command influence and
could threaten the case.
—Associated Press
HEALTH
Campus Machines
Sell Contraception
Some universities are installing
vending machines where students
can purchase emergency contra-
ception, in order to remove barri-
ers to and anxiety surrounding
products like Plan B.
Barnard College in New York
said it would soon install a vend-
ing machine, months after Colum-
bia University did.
Stanford University, Dartmouth
College and a few University of
California campuses have added
vending machines with Plan B or
its generic alternative in recent
years.
—Melissa Korn
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

THE WALL STREET JOURNAL. Monday, December 17, 2018 | A7

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 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
A8 | Monday, December 17, 2018
U.S. Helped to Shape Climate Rulebook
Officials move to
protect American
interests after 2017
Paris accord pullout
BY EMRE PEKER
Despite White House push-
back against the Paris climate
accord, U.S. negotiators played
a significant role in driving a
compromise effort to establish
a new rulebook to curb global
warming.
Negotiators from around the
world agreed on Saturday on
guidelines that would bolster
the 2015 accord amid concerns
countries would fail to deliver
on commitments to fight what
many scientists call a rising
threat from climate change.
President Trump decided
last year to pull out of the
agreement and an increasing
number of countries have fol-
lowed him in questioning it.
But behind the scenes, engage-
ment by Washington high-
lighted U.S. interest in shaping
global rules even as the ad-
ministration walks away from
international deals.
The U.S. shift at the talks
in Katowice, Poland, was evi-
dent. The U.S. hosted an event
on the sidelines to promote
fossil fuels, including coal.
Washington also joined Saudi
Arabia, Russia and Kuwait in
weakening a motion to wel-
come an October U.N. climate
report warning of irreversible
changes in 12 years if global
warming isn’t limited.
But simultaneously, U.S. ne-
gotiators participated in crunch
discussions past the summit’s
Friday close to secure a deal.
“The U.S. is half-in, half-
out,” said Bas Eickhout, a
Dutch lawmaker with the Euro-
pean Green Party in the Euro-
pean Parliament and former
U.N. climate report contributor.
“On the political level, they will
be obstructive. On the techni-
cal-negotiations level they will
usually be good in drafting
compromise language.”
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Michal Kurtyka, president of the climate talks in Katowice, Poland, clambered over his table in celebration after delegates agreed on guidelines to bolster the 2015 Paris accord.
The State Department said
the U.S. participates in climate
change talks to protect its in-
terests.
“U.S. negotiators—a dedi-
cated group of professionals
from across the federal gov-
ernment—worked tirelessly to
advance core U.S. interests
and worked with partners to
identify ways to level the play-
ing field for U.S. businesses,” a
us l,
spokesman said.
The compromise marked an
al a
e
effort to bridge longstanding
gaps between rich and poor
countries on curbing green-
ci on
house-gas emissions, an issue
global leaders led by President
Obama and China’s Xi Jinping
delayed addressing to clinch
the Paris accord.
er rs
Negotiators agreed on
wording on transparent re-
porting requirements for
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WORLD NEWS
Countries Pledge
Tougher Targets
The High Ambition Coali-
on tion, a group of countries that
includes the EU and two dozen
Paris-agreement signatories,
pledged to raise their emis-
sion-reduction targets by the
end of 2020.
That means exceeding the
greenhouse-gas emissions and
progress toward curbing such
releases. But Saturday’s talks
failed to reach consensus on
more-ambitious targets to
curb emissions, putting off the
discussion until a September
summit on the sidelines of the
U.N. General Assembly.
THE WALL STREET JOURNAL.
KACPER PEMPEL/REUTERS
fice economic prosperity or en-
pact’s commitment to keep Panel on Climate Change. The ergy security in pursuit of en-
global warming “well below” U.N. scientific body, known as vironmental sustainability,” Mr.
.
two degrees Celsius, or 3.6 de- IPCC, assesses thousands of re- Trump’s senior adviser on en-
ly
grees Fahrenheit, in an effort to search papers published annu- ergy and climate affairs, Wells
cap postindustrial temperature ally. Griffith, said in Katowice.
increases at 1.5 degrees Celsius. “Every extra bit of warming Protesters disrupted Mr.
The difference of a half de- matters,” said Hans-Otto Pört- Griffith’s speech, unfurling a
gree Celsius, or 0.9 degree ner, of the IPCC working group banner depicting oil- and gas-
Fahrenheit, will determine that drafted the U.N.’s October drilling wells.
whether some ecosystems live report. “Warming of 1.5 degrees Brazil introduced language to
and major cities avoid flooding, Celsius or higher increases the the draft rulebook that effec-
among other drastic changes, risk associated with long-last- tively derailed provisions on
said the Intergovernmental ing or irreversible changes.” creating an international carbon
market, officials and environ-
mental organizations said. To
They also failed to reach a to the pact, providing €20.4 avoid derailing the rulebook, the
deal on what has been called billion ($23.1 billion) in 2017 U.S., EU, China and Brazil bro-
the “unsung hero” of the Paris alone. China doesn’t contrib- kered a compromise that de-
pact: a global carbon market ute financing, and Mr. Trump layed discussions on interna-
pushed by China, the Euro- said the U.S. would cease the tional cooperation and
pean Union and California. “draconian financial and eco- accounting terms until a climate
The EU’s 28 countries have nomic burdens” of the accord. summit in Chile next November.
pledged more money and re- “We strongly believe that no —Alex Leary in Washington
sources than any other party country should have to sacri- contributed to this article.
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 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

THE WALL STREET JOURNAL. Monday, December 17, 2018 | A9

WORLD NEWS

I N T RO D U C I N G T H E N E W
IAN LANGSDON/EPA-EFE/REX/SHUTTERSTOCK

DIFFERENT BY DESIGN.
DISRUPTIVE BY CHOICE.
Yellow-vest protests were smaller this weekend. A rally in front of the Paris opera house on Saturday.

Lull in French Protests

Offers Macron a Respite
Unprecedented performance. Industry-leading
technology. Exceptional comfort.

BY NOEMIE BISSERBE couraged people from hitting
the streets, protesters and
PARIS—A lull in the yellow- some analysts said, as did a
vest protest movement has weekend cold snap.
given French President Em- “There may be a truce for
manuel Macron some breath- the holidays, but it doesn’t say
ing room to try to repair his much about what will happen
battered image and insulate next,” said Olivier Rouquan, a
his pro-business agenda from political analyst.
further demands. For now, the movement has
New measures he an- deprived Mr. Macron of political
nounced a week ago to boost capital as he seeks further over-
the purchasing power of work- hauls, such as his plans to
ing-class French appeared to change unemployment benefits
Ifop conducted Dec. 11-13 Introducing the new midsize Praetor 500
found Mr. Macron would easily
make it to a runoff with far- and the super-midsize Praetor 600 – the world’s
right leader Marine Le Pen if most disruptive and technologically advanced
elections were held now.
Voters for other candidates business jets.
are expected to rally around
Mr. Macron in such a runoff,
because support for Ms. Le A record-breaking best-in-class range.
Pen among left-leaning voters
is very low.
Enviable performance in challenging airports.
While many political lead- Full fly-by-wire with active turbulence reduction.
ers have expressed their sup-
port for the gilets jaunes, in- Unparalleled comfort in a six-foot-tall, flat-floor

.
lessen the impact on Saturday and pensions. His approval rat- cluding Ms. Le Pen and far-left cabin. Ka-band home-like connectivity.

ly
of a fifth consecutive weekend ing fell this month again to 23%. leader Jean-Luc Mélenchon, it
demonstration by antigovern- The movement has also ex- hasn’t helped boost their pop-
ment protesters known for posed fissures in his political ularity. Power the future. Take command. Lead the way.
wearing yellow reflective coalition, as some lawmakers The yellow-vests remain a
on
vests, or gilets jaunes. and ministers have called for leaderless movement without
France’s Interior Ministry Mr. Macron to reconsider his any party affiliations, and its Learn more at executive.embraer.com.
said 66,000 protesters took decision to abolish a wealth list of demands continues to
part in demonstrations across tax. grow even as Mr. Macron has
us l,

the country, less than half of Mr. Macron has pledged to made concessions.
the crowds that gathered a simplify France’s highly frag- Armel Deslandes, a 48-year-
al a
e
week ago. Saturday’s protest mented pension system. He old teacher from a Paris sub-
was also largely peaceful com- also wants to extend unem- urb who took part in Satur-
pared with the rioting and ployment payments—currently day’s protests, called for the
ci on

looting that erupted during limited to people who are laid
the two previous weekends. off—to business owners who
Other factors contributed to go bankrupt and steadily em-
the lower turnout, protesters ployed people who are seeking
said, suggesting Saturday was a career change.
er rs
overhaul of fiscal and mone-
tary policies.
“We want to change the
country’s political and mone-
tary system,” he said.

more of a temporary respite Still, given the country’s
for Mr. Macron than a turning fractured political landscape,
of the tide. A terrorist attack Mr. Macron doesn’t seem to
in the eastern French city face any serious political op-
m e
Jean Trebuchet, 37, wants
Mr. Macron to break up banks.
“We want a real division be-
tween retail and investment

Strasbourg on Tuesday dis- ponent. A poll of 1,125 people banks,” he said.

WORLD WATCH
m rp

Germany
To Tighten
co Fo

Rules on
PETER KOHALMI/AGENCE FRANCE-PRESSE/GETTY IMAGES

Acquisition
BY CHRISTIAN GRIMM
AND PATRICIA KOWSMANN

Germany is making it
harder for non-European com-
panies to buy stakes in Ger-
man firms without its ap-
n-

proval, signaling growing

concern in Berlin about
China’s push to acquire key People marched Sunday in Budapest to protest changes to a
technology and know-how. labor law proposed by Prime Minister Viktor Orban’s party.
no

China’s aggressive plans to

purchase assets around the HUNGARY pute that risked overshadowing
world has forced a series of the event that attracts a who’s
countries to take steps to Thousands Protest who from governments, finance
screen the investments, many Labor Law Change ministries and businesses around
times blocking them. The Euro- the world.
pean Union has recently agreed About 10,000 Hungarians Russian aluminum magnate
to establish a common frame- marched through central Budapest Oleg Deripaska, construction bil-
work to tackle the issue. In the on Sunday for a fourth day of lionaire Viktor Vekselberg and
U.S., Congress has moved to protests against Prime Minister banker Andrey Kostin had been
strengthen the vetting proce- Viktor Orban, one of Europe’s asked not to attend the economic
dures for transactions involv- most outspoken nationalist lead- gathering to avoid problems with
ing homegrown technology. ers, and a law that would require American delegates, according to
Despite that, U.S. national them to work up to 400 extra Russian officials. In response, Rus-
security officials have warned hours a year. sian Prime Minister Dmitry Med-
Beijing continues to exploit The protesters, streaming past vedev said Moscow would boycott
U.S. technology to develop its hundreds of police, demanded Mr. the event unless the organizers
own economy, heightening ten- Orban reverse a law, passed reversed their decision to block
sion between the two countries Wednesday, that allows employers the tycoons from attending.
currently spatting over trade. to require paid overtime amount- — Brian Blackstone
In Germany, growing con- ing to an extra day a week. Em- and Ann M. Simmons
cerns are forcing the govern- ployers can now demand workers
ment to tighten acquisition perform overtime of up to 250 BELGIUM
rules set only a year ago. hours a year.
Germany’s cabinet on Hungary’s government has said Police, Anti-Migration
Wednesday is set to approve the law will help ameliorate one of Protesters Clash
rules stating that any non-Eu- the thriving economy’s weak
ropean foreign company plan- spots: a small and shrinking labor Police fired tear gas and wa-
ning to buy more than 10% of pool. It has refused to bring in for- ter cannons on demonstrators
a German company involved in eign workers, instead scheduling who had gathered around the
defense, technology or media increases to the retirement age European Union headquarters in
will see its deal probed by au- and attempting to stretch out the Brussels after marching against
thorities, according to people labor it can draw from locals. a new United Nations migration
familiar with the plan. —Drew Hinshaw pact.
Since 2017, the threshold has and Anita Komuves About 5,000 people joined
been 25%, which has applied to the march that local authorities
strategically important compa- WORLD ECONOMIC FORUM initially banned for fear of vio-
nies if the investment puts lence. Belgium’s high court over-
public order or safety at risk. Sanctioned Russians turned the ban, citing the right
Germany hasn’t directly Can Attend Davos to protest peacefully.
mentioned China as the target The government was shuffled
of the regulations, but it re- The World Economic Forum last week because the main co-
cently blocked two deals by said sanctioned Russian business- alition party opposed Prime Min-
the Asian powerhouse. men may attend January’s Davos ister Charles Michel’s decision to
Chinese officials have called event, after Moscow threatened sign the U.N. pact, which seeks
on the EU not to discriminate to boycott the annual gathering of to streamline and smooth inter-
against foreign investments the business and political elite. national mass migration.
and uphold global rules. The decision fends off a dis- —Associated Press
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
A10 | Monday, December 17, 2018
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YOUR FEET
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Mr. Enríquez estimates that
ci on
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tral Americans camped in Ti-
juana could have jobs by the
end of December.
er rs
Support
Brews for
m e
m rp
Robusta
Continued from Page One
co Fo
tations. Costa Rica in February
lifted a 30-year ban on grow-
ing it. In Colombia, the coun-
try that invented arabica
snobbery, a small group of pi-
Travel tip: comfortable feet make everything oneers are breaking with tra-
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Some coffee connoisseurs
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after all, produced in the right
conditions.
“The big roasters want
more and more of it,” said Ri-
n-
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WORLD NEWS
A human-resources recruiter spoke with potential employees at the Tijuana job fair on Dec. 10.
President Proposes
Modest Budget Rise
President Andrés Manuel
López Obrador unveiled a bud-
get proposal for 2019 that calls
for a moderate increase in
spending without raising taxes
or the country’s debt.
The $289 billion budget
plan allocates less than had
been expected for some of Mr.
López Obrador’s flagship in-
vestment and social programs
The city of 1.6 million in-
habitants is a hub for labor-in-
tensive plants that assemble
everything from flat-screen
televisions to medical equip-
ment that is exported tariff-
free to the U.S.
The low salaries paid by
these firms were among the
reasons President Trump de-
manded a renegotiation of the
North American Free Trade
Agreement with Mexico and
Canada. The new trade deal
ity manager in Colombia for
Nestlé SA, which buys about
5% of the country’s annual cof-
fee production.
At the Agriculture Minis-
try’s plant nursery near the
farm town of Monteria, agron-
omists are tending to the very
first 3,000 robusta seedlings
shipped from Nestlé facilities
in France and Mexico.
To inspect the baby ro-
busta, a visitor has to don a
blue sanitary smock and hair-
net, step through an iodine
foot bath and go through three
doors designed to keep out in-
sects and microbes.
Government agronomist
Juan Carlos Pérez treats the 4-
inch-high interlopers like his
own children. He carefully ca-
resses them—each sprout
marked with an orange tag
and number.
Mr. Pérez comes from a cof-
THE WALL STREET JOURNAL.
in order to reach a surplus be-
fore debt payments equal to
1% of gross domestic product.
Government spending is set
to rise 6.1% in real terms from
what was approved for 2018,
with revenue estimated to in-
crease by 6.3%—also in real
terms. Mr. López Obrador says
his administration aims to re-
duce corruption in government
contract awards and be more
efficient in tax collection.
The new administration ex-
.
pects 2% growth next year.
ly
—Juan Montes
signed by the three countries
in November aims to improve
wages and labor conditions in
Mexico and discourage plants
from relocating from the U.S.
“There are opportunities
here, and if migrants want to
take advantage of them, they
are within their reach,” said
Ernesto Bravo, head of the
western division of Tecma, a
U.S. firm that helps foreign
firms set up in Mexico.
Wages at most maquiladora
Technicians examine robusta plants in Montería, Colombia.
fee producing family that’s
proud to cultivate arabica on a
picturesque mountain farm.
“But you have nothing to lose
by experimenting,” he said.
Robusta has sold wholesale
for an average of 87 cents a
pound this year, compared
with $1.39 for Colombian ara-
bica. However, Asia, where ro-
busta dominates, is the fast-
est-growing region for coffee
sales, with consumption ex-
pected to rise 3.1% this year.
That compares to 0.5% in Eu-
rope and 2.6% in North Amer-
ica, where arabica rules, ac-
cording to the International
Coffee Organization, an inter-
governmental organization
based in London.
Robusta has a few advan-
tages for farmers, said James
Watson, senior beverages ana-
lyst at Rabobank. “It is liter-
ally robust. It is stronger
against diseases. It generally
has higher yield and is easier
to grow.”
Still, he said he usually or-
ders cold brew coffee at shops,
and picks the specialty, single-
origin beans over the house
blend.
“I have never had a cup of
robusta,” he said. “My under-
standing is you wouldn’t really
want to drink it.”
Robusta doesn’t have to
taste like tar, said Jorge Cue-
vas, chief coffee officer at Sus-
tainable Harvest, a coffee im-
porter based in Portland, Ore.
—it’s just that growers don’t
have the financial incentive to
put the same amount of care
into the beans as arabica. A
good robusta, he said, is
creamy and intense, with a
full, syrupy mouthfeel, and is
sometimes used in espresso
drinks. (It’s found in U.S.-sold
brands such as Sanka and La-
vazza.)
He put it this way: If ro-
busta and arabica walked into
a bar, arabica would blend in,
but robusta “would be bigger,
ERIN SIEGAL MCINTYRE FOR THE WALL STREET JOURNAL
jobs are double or triple the
minimum wage, which is less
than $5 a day.
It isn’t the first time Ti-
juana has dealt with an exodus
of migrants trying to reach the
U.S.
“A Haitian migration surge
paved the way for this job fair.
Back then, recruiters would go
to shelters to hire Haitian mi-
grants,” said Nayla Rangel, the
fair’s manager.
Some 17,500 Haitians
flocked to Tijuana in 2016 and
2017, according to government
estimates. Many were de-
ported to Haiti after seeking
to enter the U.S. illegally or
because their asylum petitions
were rejected, but some 3,500
ended up settling in Tijuana.
One of them is Roudy Jo-
seph, who was hired as a re-
cruiter in 2017 by Tecma,
which provides customs com-
pliance, facilities and human-
resources support to firms
that employ about 3,000 peo-
ple in Tijuana.
“Having a job, that is what
mattered,” the 29-year-old Mr.
Joseph said.
CARLOS VILLALON FOR THE WALL STREET JOURNAL
louder, funny and charismatic.
It would draw a lot of atten-
tion. You can’t miss it.”
Colombia has long shunned
robusta over concerns that
growing it would damage the
country’s reputation for qual-
ity, said Juan Lucas Restrepo,
head of the Agriculture Minis-
try’s research branch that is
running the robusta experi-
ment.
The country gained promi-
nence for its coffee in the
1960s, when the Colombian
Coffee Growers Federation in-
troduced an ad campaign tout-
ing its arabica beans. Numer-
ous U.S.-produced TV spots
followed starring a fictional
straw-hatted farmer named
Juan Valdez and his trusty
mule, Conchita. One featured
the captain of the Queen Eliza-
beth II abruptly turning the
luxury liner back to port after
running out of Colombian ara-
bica.
“It was the only civilized
thing to do,” intoned the nar-
rator.
By 1979, Colombian coffee
exports had doubled.
As emerging markets
picked up a coffee habit, ro-
busta demand began to perco-
late. In 2000, Vietnam dis-
placed Colombia as the world’s
No. 2 coffee exporter, behind
Brazil, thanks to its robusta
production.
A government-sponsored
white paper in 2014 recom-
mended that Colombia plant
robusta, citing growing world
demand brought on by rising
prices for arabica and the de-
velopment of better-quality
robusta. Improvements have
prompted coffee companies
that once used 20% robusta in
their blends to increase the
amount to about 60%, said Ro-
berto Vélez, chief executive of-
ficer of the Coffee Growers
Federation, which represents
400,000 of Colombia’s 540,000
producers.
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
New Ukraine Church Is Rebuff to Russia
BY JAMES MARSON
KIEV—For 27 years of
Ukraine’s independence, its
only internationally recog-
nized Orthodox Church was
controlled by Russia, a pillar
of the Kremlin’s continued in-
fluence in its former vassal.
But 4½ years into an armed
conflict against Russia and sep-
aratists in the country’s east,
Ukraine on Saturday founded
its own national church, en-
dorsed by the foremost leader
of global Orthodoxy.
“We will get out from under
Moscow’s hoof,” said Viktor
Kolesnyk, a 67-year-old retiree
who was among several thou-
sand people gathered near St.
Sophia Cathedral, where bish-
ops from three Orthodox
churches met for a Unification
Council.
The creation of the Ortho-
dox Church of Ukraine is a sig-
nature victory for U.S.-backed
President Petro Poroshenko,
whose country has lost control
Amazon
Takes Aim
At Margins
Continued from Page One
sumers, sparing Amazon the ex-
pense of shipping from its
warehouses. Manufacturers
shipping from their warehouses
is something Amazon has asked
more brands to do to cut its
own costs.
Amazon told Coca-Cola that
it was losing money on the
smaller, cheaper shipments, ac-
cording to people familiar with
the matter. Coca-Cola responds
that it works with partners to
learn together and constantly
changes its offerings.
Moves like that can increase
costs for brands. Amazon can
get away with it because manu-
MEDICINE IN THE RAW
no
* * * *
over parts of its territory in
the conflict, which has left
more than 10,000 people dead.
Mr. Poroshenko, who faces an
election in March, told the
crowd that “today we finally
attained our Ukrainian inde-
pendence from Russia.”
The move is a setback for
Russian President Vladimir Pu-
tin, who has used the coun-
tries’ shared cultures and pasts
to justify his efforts to keep
Ukraine in the Kremlin’s sphere
of influence. The Moscow Pa-
triarchate, the Ukrainian arm
of the Russian Orthodox
Church, has long been a propo-
nent of close ties with Russia,
supporting politicians favored
by Moscow and, in recent
years, giving mostly vague
statements calling for peace
without condemning Mr. Putin.
Mr. Poroshenko, senior offi-
cials and Ukrainian bishops
shuttled back and forth to Is-
tanbul to coordinate with Ecu-
menical Patriarch Bartho-
lomew I, the first among
facturers of food and household
products are hooked on the on-
line retailer’s size—it accounts
for a majority of total e-com-
merce revenue growth—said
consultants who work with
brands on their online strategy.
For big consumer brands, not
being on Amazon “is not an op-
tion anymore,” said Guru Hari-
haran, chief executive of Boo-
merang Commerce, which
makes e-commerce software.
“They have the power; they
on pushing big brands to
have the shoppers.”
Amazon also has greater lee-
us l,
way to curb CRaP items because
of the rise of independent sell-
al a
e
ers on its site.
They have added hundreds of
millions of items, helping en-
ci on
sure that Amazon’s virtual
shelves are stocked with the va-
riety shoppers expect. And
those sales tend to be more
profitable for Amazon, which
er rs
typically collects a 15% cut plus
fees for warehousing.
Chief Financial Officer Brian
m e
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WORLD NEWS
Congregants attended the first prayer service of the Orthodox Church of Ukraine in Kiev on Sunday.
equals of Orthodox leaders,
and his advisers. In granting
the new Ukrainian church offi-
cial, self-governing status,
Bartholomew is asserting his
FROM PAGE ONE
Olsavsky said earlier this year
that eliminating CRaP items is
“something that we do and
work with our vendors on all
the time,” adding that it hasn’t
caused a change in profitability
for the company in 2018.
Amazon, like other retailers,
has made changes to inventory
The online giant is
lower prices and
change packaging.
when an item isn’t selling well
and is unprofitable. It also has
moved some products—such as
its smaller package of Smartwa-
ter—into its Prime Pantry cate-
gory, in which consumers fill up
a box with items to reduce the
cost of shipping.
Amazon is trying to boost
authority in the second-largest
Christian denomination.
To be sure, the new
church’s path is fraught with
obstacles: Russia has opposed
profitability in its core retail
business after years of focusing
on growth, according to the
people. The company’s profit
has risen sharply in the past
couple of years, helping its
stock price soar, although its
market value has fallen again
recently. But most of that prof-
itability has stemmed from its
growing cloud business and ad-
vertising unit.
Brand executives privately
say Amazon’s push for profit-
ability can be a double-edged
sword. Amazon has pressured
them to lower prices and
change packaging, both of
which can be costly. And elimi-
nating or changing what they
sell on Amazon can hurt sales.
Some executives, however,
said it can help both companies.
Seventh Generation, a Uni-
lever PLC unit that makes plant-
based household products, has
altered its Amazon selling strat-
egy after talking with Amazon
about improving the profitabil-
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Monday, December 17, 2018 | A11
Russian politicians in Ukraine
have warned of potential
bloodshed if the Ukrainian
government and the new
church try to take control of
religious buildings that the
Moscow Patriarchate uses.
Thousands gathered from 9
a.m. outside the 11th-century
St. Sophia Cathedral where the
council was taking place. Many
were veterans of a 2014 revo-
lution that ousted a pro-Rus-
sian president.
Mr. Poroshenko has placed
the church issue at the center
of his re-election campaign,
NURPHOTO/ZUMA PRESS
but polls place him third amid
anger over corruption and
economic inequality.
The church’s new leader, 39-
year-old Metropolitan Epifaniy,
will visit Istanbul on Jan. 6 to
receive a decree from Bartho-
lomew granting self-governance.
its creation and the Ukrainian He held his first liturgy as head
church will face a battle to at- of the new church on Sunday
tract clergymen and congrega- and offered to welcome Moscow
tions from the Moscow Patri- Patriarchate members “with fra-
archate. Russia and pro- ternal love and mutual respect.”
ity of products for sale on the
platform, CEO Joey Bergstein
said.
products Amazon has dubbed
unprofitable over the past year,
although they wouldn’t say
Mr. Bergstein said his com-
pany has developed new prod-
uct formats that are more prof-
which items. But they are taking
steps to change. Mars, for ex-
ample, has seen better success
itable to sell online—on Amazon on Amazon in selling bigger
.
or elsewhere. Amazon is “really bags of Life Savers or Dove
ly
clear that they have a profitabil- Promises, a spokeswoman said,
ity threshold,” he said. “We’ve and it has better figured out
been clear about saying, ‘Let’s how to offer products online
make sure what we’re selling is that shoppers want for different
profitable, and we’re not just
lining Amazon’s pockets.’”
occasions.
Campbell Soup Co. is re-
That has meant selling vamping packaging for Amazon
smaller, lighter laundry prod- for items such as Campbell’s
ucts like detergent pods and Chunky Soup and Pepperidge
skipping cheaper paper towels. Farm Goldfish crackers, which
Instead of promoting a three- are typically cheap at the store
pack of dish soap, Seventh Gen- but relatively heavy to ship.
eration recently started adver- Campbell now uses predic-
tising a 6-pack for about $17, tive technology to monitor pric-
and it created a larger, 504- ing dynamics so that it can ad-
count package of baby wipes for just sizes, change the variety or
$19.91 for sale on Amazon and redesign packaging to ensure
elsewhere. the products will be profitable
Mars Wrigley Confectionery enough to stay on Amazon.
and Kellogg Co. executives said —Heather Haddon
they have seen an uptick in contributed to this article.
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 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
A12 | Monday, December 17, 2018
Lavish Life
Ends Rule
Of Ghosn
Continued from Page One
according to people familiar
with the matter.
The discovery of Nissan’s
role in financing Mr. Ghosn’s
jet-setting lifestyle ignited a
powder keg of frustration and
discontent that had long been
building—and may have pre-
empted a plan by Mr. Ghosn to
move against management at
the company himself.
This account, based on in-
terviews with dozens of Nissan
veterans and people close to
the investigation, shows that
accusations of hidden pay and
lavish spending on the com-
pany dime were intertwined
with a deep sense of discon-
tent over Mr. Ghosn’s long
reign over the auto maker.
Nissan employees had groused
that Nissan profits were prop-
ping up Renault, and many
feared Mr. Ghosn was prepar-
ing a Renault takeover of its
bigger Japanese partner.
For months, a group of Nis-
san executives secretly gath-
ered information on Mr.
Ghosn, laying the groundwork
for a Nov. 19 strike against the
executive and a top aide, Greg
Kelly. The group even per-
suaded Mr. Kelly, who is based
in the U.S., to fly to Japan on
the same day Mr. Ghosn was
expected. The maneuvering al-
lowed Japanese prosecutors to
swiftly arrest both men, then
raid company offices and his
Tokyo apartment in the space
of hours, say people familiar
with the events.
When Nissan CEO Hiroto
Saikawa, who was Mr. Ghosn’s
handpicked successor, held a
town hall at headquarters to
explain what had transpired,
the assembled employees
broke into applause, according
to people who attended. The
sentiment against Mr. Ghosn in
Nissan had been building “like
a volcano,” says one person fa-
miliar with Nissan’s probe.
Swift reversal
It was a swift reversal for a
man once revered as the savior
of Nissan, and one of the auto
industry’s most powerful lead-
ers. After his November arrest,
Nissan quickly removed Mr.
Ghosn as chairman, and Re-
nault, where Mr. Ghosn was
chairman and CEO, put interim
leaders in place. On December
10, Japanese prosecutors
charged Mr. Ghosn with under-
stating his compensation in
Nissan’s financial reports. Re-
nault is now pressing Nissan
to call a shareholder meeting
to deal with “significant risks”
to the alliance.
Mr. Ghosn’s Japan-based at-
torney didn’t respond to re-
quests for comment. A person
familiar with his legal defense
said Mr. Ghosn continues to
maintain his innocence.
Meanwhile, Mr. Ghosn re-
mains in detention, and under
no
Japan’s criminal system, he
could remain locked up well
into 2019 as prosecutors add
charges and he awaits trial.
Prosecutors haven’t filed
charges or raised suspicions
related to Mr. Ghosn’s ex-
penses or his use of company
property. But the Nissan-
owned home he used in Beirut,
and another in Rio de Janeiro,
have become the subject of
court battles, after Nissan took
control of them and changed
the locks. Members of Mr.
Ghosn’s family have sued for
access to retrieve personal be-
longings, artwork and cash.
Mr. Ghosn’s family argues
that his arrest and allegations
of his misuse of company
funds are part of a broader
battle for control.
“The truth is his arrest is a
result of a corporate dispute
between Renault on one side
and Nissan and Mitsubishi on
the other,” the family’s lawyers
said in court filings in Brazil,
adding: “The surprising arrest
of Carlos Ghosn is part of a
sordid strategy by Nissan to
undermine the Renault alli-
ance.”
Mr. Ghosn’s children believe
that the perks he enjoyed at
Nissan should be weighed
against the turnaround he led
at the company and the wealth
he created for others at the
company over the past two de-
cades, according to a person
close to the Ghosn family.
“For as long as we can re-
member, we heard from our fa-
ther every Sunday — no mat-
ter how busy he got with
work,” according to a written
statement from Mr. Ghosn’s
four children, who used to joke
that Nissan was his fifth child.
“It’s now been four Sundays
since we’ve been able to speak
to him. We miss him so much.”
“The cause of this chain of
events is Mr. Ghosn’s miscon-
duct,” a Nissan spokesman
said in an emailed statement.
“During the internal investiga-
tion into this misconduct, the
Tokyo Prosecutors Office be-
gan its own investigation and
took action.”
A spokesman for Renault
declined to comment.
After helping to engineer
Renault’s $5.4 billion bailout of
an ailing Nissan in 1999, Mr.
Ghosn stitched the firms into a
technology and platform-shar-
ing alliance that later added
Mitsubishi Motors Corp. to be-
come the world’s largest, col-
lecting compensation from
each that totaled roughly $17
million in 2017, according to
the companies’ public filings.
While that is well above the
salaries of his Japanese com-
petitors, it is below that of
American executives in his line
of work, such as General Mo-
tors Co. Mary Barra’s $22 mil-
lion.
For Mr. Ghosn, the proper-
ties, private planes and other
perks were part and parcel of
his life’s work, often spent on
the road, away from his family.
Until his arrest, Mr. Ghosn
spent at least 100 days a year
in the air, according to flight
records and a person close to
his family.
Only a handful of Nissan ex-
ecutives realized the extent to
which the company was foot-
ing the bill for Mr. Ghosn’s use
of the properties, people famil-
iar with the matter say. on
The most costly assets at
Mr. Ghosn’s disposal were the
series of private jets that Nis-
san had purchased over the
us l,
last 18 years, each decked out
with a vanity-plate registration
al a
e
number: N155AN
The latest, a Gulfstream
G650 with a list price of $64.5
ci on
million, according to trade
publication Corporate Jet In-
vestor, is fitted with a bed-
room where he often sleeps,
according to a person close to
er rs
the Ghosn family.
“This kind of lifestyle can
take a toll on you, both physi-
cally and socially. It is not
m e
without a price to pay, and you
have to manage that,” Mr.
Ghosn wrote in a recent auto-
m rp
biography posted on Nissan’s
website. “It helps that I can
sleep well on an airplane.”
This year the plane he uses
departed from at least 35 dif-
co Fo
ferent airports on over 80
travel days as he crisscrossed
the globe. In the seven weeks
before Mr. Ghosn’s arrest, the
plane departed Beirut eight
times, according to flight re-
cords.
Inside Nissan, Mr. Ghosn’s
lifestyle stood in contrast with
the cost-conscious manage-
ment style he championed to
boost the bottom line. After
the allegations surfaced that
his lifestyle was funded by Nis-
n-
san, the sense of betrayal
deepened.
Mr. Ghosn came from rela-
tively humble origins. His pa-
ternal grandfather moved from
Lebanon to Brazil at the age of
13 with nothing but a suitcase,
and started a handful of busi-
nesses in the country’s inte-
rior, where Mr. Ghosn was
later born, according to Mr.
Ghosn’s autobiography. When
Mr. Ghosn was 6, his father
sent him to Beirut, where he
lived with his grandmother,
mother and siblings.
After attending two elite
engineering schools in Paris,
Mr. Ghosn joined French tire
manufacturer Michelin. In
1996, Mr. Ghosn was hired by
Renault SA, the French auto
maker, and moved to France
with his family. By the late
1990s, Nissan was on the brink
of bankruptcy. Renault came to
the rescue with a $5.4 billion
bailout that Mr. Ghosn pushed
Driving Results
Renault’s part-ownership of Nissan has been a boon
to the French automaker’s earnings.
$8 billion
Nissan Renault
profits profits
6 to Renault’s
4
2 ecutive pay, and Mr. Ghosn had
0 made.
FY2013 ’15 ’17 2013 ’15
Note: Nissan's fiscal year begins in April. Figures converted at $1=¥113.38,
$1=€0.88. Amounts for 2018 are half years.
Source: the companies
FROM PAGE ONE
‘This kind of lifestyle can take a toll on you,
both physically and socially. It is not without a
price to pay, and you have to manage that...It
helps that I can sleep well on an airplane.’
Carlos Ghosn wrote in a recent autobiography posted on Nissan’s website.
A mansion, above, in an expensive Beirut neighborhood helped trigger Mr. Ghosn’s ouster. A team of
Nissan executives discovered earlier this year that the car company had actually bought the house.
for. The deal gave Renault a Ghosn nudged what he had to
controlling 37% share in Nis- disclose lower still by asking
san, later increased to 43.4%, Nissan to pay him the equiva-
while Nissan purchased a 15% lent of about $7.8 million and
stake in Renault. postponing the payment of
Moving to Tokyo in 1999 as nearly $2 million, the person
Nissan’s chief operating offi- said.
cer, Mr. Ghosn got the nick- The change was handled by
name “7-11” for the long hours Mr. Kelly, then in charge of the
he worked. He closed factories, CEO’s office and human re-
slashed staff and cut off ineffi- sources, whom colleagues de-
cient suppliers. scribe as a fierce Ghosn loyal-
Japanese executives fretted ist and troubleshooter. It
that Mr. Ghosn was increas- rested on an interpretation of
ingly absent. Still, he was mak- a gray area of the new disclo-
ing far more than others at sure rules, concerning how to
Nissan. In the fiscal year that treat deferred compensation.
ended in March 2009, Nissan
paid him $15 million—more
than twice what the other nine
top executives of the company
For Mr. Ghosn, the
were making together—ac- properties, planes
cording to a person familiar
with Nissan’s probe.
and perks were part
When Japan changed corpo- of his life’s work.
rate-disclosure rules in 2010 to
require that all executives re-
ceiving more than about
$880,000 had to reveal their Nissan’s audit firm, Ernst &
compensation, Mr. Ghosn was Young ShinNihon LLC, didn’t
worried about public-relations agree with the company’s pro-
fallout, according to the per- posed interpretation of those
son. He and other executives rules, says a person familiar
were already taking a pay cut with the matter. Mr. Kelly had
amid a global recession. Mr. an opinion from outside ex-
perts supporting him, Mr.
Kelly’s lawyer says.
Even so, Mr. Ghosn’s pub-
licly disclosed compensation
topped Japan’s charts and
caused a furor at Nissan’s
shareholders’ meeting. Mr.
Contribution Ghosn defended his salary by
of Nissan saying Ford Motor Co.’s Alan
Mulally made nearly twice as
pretax profit much.
Only a handful of people at
the company knew what was
going on, Nissan says. There
was no compensation commit-
tee of the board to oversee ex-
almost sole authority to decide
how much money top officials
’17 ’13 ’15 ’17 Then there were the perks.
At the end of 2010, Nissan cre-
ated a company named Zi-A
THE WALL STREET JOURNAL. Capital BV in the Netherlands,
* *** THE WALL STREET JOURNAL.
azu, a quiet manufacturing
veteran at Nissan who became
compliance auditor for the
board in 2014—a job that in-
volves policing the actions of
directors, according to people
familiar with the probe.
Mr. Imazu was trying to fig-
ure out what Zi-A was doing,
but was stymied by the chain
of shell companies it used in
places like the British Virgin
Islands, two of the people said.
So around June, Mr. Imazu
sought help from one of Zi-A’s
directors, a Malaysia-born
British-educated lawyer named
Hari Nada, who was running
global compliance as well as
the CEO’s office, two of the
people said.
Mr. Nada was a protégé of
Mr. Kelly and had been listed
as a Zi-A director since 2012,
along with Mr. Kelly, according
to company filings. He took
Mr. Imazu to talk to Zi-A’s
third director, Toshiaki Onuma,
a longtime support staffer for
Mr. Ghosn who handled paper-
work for the deferred compen-
sation, according to corporate
documents and a person with
knowledge of Nissan’s probe.
Fuller picture
As the three compared
notes, Mr. Imazu began to get
a fuller picture of the money
Nissan was spending on Mr.
Ghosn and the amount of de-
ferred compensation, which by
this year totaled around $80
million, according to prosecu-
tors’ allegations and people fa-
miliar with the probe.
.
By the end of the summer,
ly
the Nissan group had con-
sulted informally with Japa-
nese prosecutors, and in early
October, those prosecutors de-
cided they had a case, accord-
ing to people familiar with the
probe. Mr. Imazu and his
FROM TOP: JOEL SAGET/AGENCE FRANCE-PRESSE/GETTY IMAGES; DONNA ABU-NASR/BLOOMBERG NEWS group drew up a formal whis-
tleblower report, stating that a
Nissan unit was being used to
provide homes for Mr. Ghosn
at no cost, and that the direc-
tors’ compensation informa-
tion on financial filings was in-
complete, one of the people
said.
Mr. Nada began laying the
groundwork for an elaborate
operation to seize Mr. Ghosn
as well as evidence to help the
prosecutors’ case.
Nissan’s investigators didn’t
want to confront Mr. Ghosn di-
rectly since they were fearful
that he would have the power
to crush the probe once he
found out, say several people
with knowledge of the matter.
Instead, they planned with
prosecutors to detain Mr.
Ghosn right after he landed at
Tokyo’s Haneda airport on
Nov. 19, ahead of the month’s
board meeting. Mr. Nada cho-
reographed schedules to en-
sure that everyone prosecutors
would want to question was at
which Mr. Kelly told Nissan’s Nissan’s office at around the
board would be used to make time of Mr. Ghosn’s arrest,
venture investments, accord- said people familiar with the
ing to company filings and events.
people familiar with the mat- The team of Nissan investi-
ter. Zi-A, which eventually got gators now needed to get Mr.
$82.8 million in funding, be- Ghosn’s alleged co-conspirator,
came the vehicle through Mr. Kelly, to Tokyo. Mr. Kelly
which Nissan would buy addi- had been living in semiretire-
tional homes, including the ment in Florida since 2015, ac-
one in Beirut, through multiple cording to people familiar with
layers of shell companies reg- the matter.
istered in offshore locations. Mr. Nada called Mr. Kelly
In 2012, Mr. Ghosn’s sister and told him he was needed
Claudine Bichara de Oliveira for the board meeting, the
helped negotiate the purchase people said. Mr. Ghosn was
of a four-bedroom, beachfront planning to call a vote to re-
apartment in Rio de Janeiro’s shuffle the company’s top
Copacabana neighborhood, ac- management—including re-
cording to a person familiar moving Mr. Saikawa as CEO
with the deal. A second-tier and reinstating Mr. Kelly in a
subsidiary of Zi-A named management position, accord-
Hamsa 1 Ltd. paid $5.7 million ing to people familiar with the
for the apartment, making it plans.
company property. Mr. Nada insisted that Mr.
As Mr. Ghosn pushed Nissan Kelly, who normally attended
and Renault to cut costs by Tokyo board meetings by vid-
sharing parts and manufactur- eoconference, come in person
ing platforms, engineers on a private jet. Mr. Nada as-
squabbled about whose tech- sured Mr. Kelly he would be
nology and factories to use. back in the U.S. in time for a
Nissan staffers felt revenues scheduled back surgery.
from the Japanese company, Mr. Kelly’s plane arrived at
which had grown bigger than Tokyo’s Narita airport in the
its French controlling share- early afternoon of Nov. 19, ac-
holder, were being used to cording to flight records and
prop up Renault. people familiar with that day’s
A person close to Renault events, shortly before Mr.
said it was “excessive” to say Ghosn touched down at
Nissan propped up the French Haneda airport. As soon as Mr.
company. “If you speak to peo- Ghosn was taken into custody,
ple at Renault they would say Mr. Kelly’s driver received a
that Mr. Ghosn favored Nis- phone call and pulled into a
san,” the person said. “The rest area. Mr. Kelly was
success of the alliance is about handed over to Tokyo prosecu-
balance. Is this difficult to tors, said one of the people.
achieve? Yes.” At 10 p.m. an unusually
Little did Mr. Ghosn know emotional Mr. Saikawa held a
that the forces that would press conference.
eventually topple him were “Beyond being sorry—I
gathering. Nissan’s audit firm, don’t know how to say this—I
Ernst & Young, continued to feel strong anger and despair,”
raise questions each year he said.
about Zi-A Capital, the entity —Yoko Kubota, Nazih
through which the homes for Osseiran, Paulo Trevisani,
Mr. Ghosn were purchased, Nick Kostov, Mark
says a person briefed on the Maremont, Chester Dawson
matter. Those flags came to and Jim Oberman
the attention of Hidetoshi Im- contributed to this article.
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Hospitals Try a More Personal Approach
Hotel industry veterans
help facilities refocus
on patient comfort,
build a service culture
BY MELANIE GRAYCE WEST
The friendly touches at a
luxury hotel aren’t normally
expected at a busy Bronx hos-
pital. But that is exactly what
Marcello Khattar of Mon-
tefiore Health System is trying
to do—put a little of the hotel
experience into the health-
care setting.
Mr. Khattar, 36 years old, is
a director of patient experi-
ence and customer service at
Montefiore, a new role. His
charge is to make the hospital
experience feel a little warmer,
easier and more personal. It
isn’t enough for a patient or
family member just to have
medical needs met, he says.
“In a hospital, or in a
health-care setting, people are
vulnerable and they are afraid.
How you treat them makes a
big difference,” he said.
Mr. Khattar is part of a
cross-discipline field that is
growing, in part, as hospitals
face greater competition amid
broader shifts to value-based
care. Hospitality veterans who
work on improving the service
culture at a hospital can be
found at New York’s Northwell
Health and at NewYork-Pres-
byterian Brooklyn Methodist
Hospital.
At Hackensack Meridian
Health in New Jersey, Kunle
Modupe, vice president of hos-
pitality services, for example,
instituted a talent assessment
program for hiring, which in-
cludes emotional intelligence, a
system he used during his
years with the Ritz-Carlton Ho-
New Jersey Lawmakers Pull Redistricting Legislation
BY JOSEPH DE AVILA
New Jersey Democrats,
stung by overwhelming oppo-
sition that forced them to pull
a legislative redistricting pro-
posal, will re-evaluate their
plans to change the process,
senior lawmakers said.
The weekend decision to
pull the legislation, which had
been scheduled for a Monday
vote, follows last week’s public
hearing on the measure, during
which no members of the pub-
lic spoke out in favor of the
proposal. Dozens of groups that
advocate for fair elections have
objected to the measure, and it
was opposed by New Jersey
Gov. Phil Murphy, a Democrat.
“I commend legislative lead-
ership for pulling the redis-
Brooklyn Author’s Novel Is Year’s Most Popular With City Readers
no
BY CHARLES PASSY
When it comes time to curl
up with a good book, New
Yorkers apparently go for a
hometown favorite.
Jennifer Egan’s “Manhattan
Beach,” the Brooklyn novelist’s
historical tale set in her home
borough, was the most
checked-out adult title
throughout New York City’s li-
braries during the past year,
according to data provided by
all three of the branch sys-
tems—the New York Public Li-
brary, Brooklyn Public Library
and Queens Library.
Beyond the hometown fac-
tor, Ms. Egan had plenty in her
favor to spur demand, includ-
ing the fact the novel was al-
ready chosen by city residents
as their pick for the 2018 “One
Book, One New York” program.
* *
GREATER NEW YORK
The welcome desk at Montefiore Health System in the Bronx now features workers who carry iPads and wear identifiable jackets.
tel Co. He also instituted a daily
five-minute lineup, also com-
mon in hotels, to bring staff to-
gether to understand priorities
and themes for the day.
Public scores on patient-
satisfaction surveys conducted
by the Centers for Medicare
and Medicaid Services have
made some hospitals sensitive
to refocusing efforts on pa-
tient needs, according to
Brooke Hollis, the associate di-
rector of the Sloan Program in
us l,
Health Administration at Cor-
nell University’s College of Hu-
al a
e
man Ecology. Those scores are
tied to reimbursements, mean-
ing the better a hospital does
ci on
er rs
tricting proposal,” Mr. Murphy
said Saturday. “I’m grateful
they heard the voices of so
m e
many within New Jersey and
around the country who saw
that the proposal would have
m rp
made our legislature less repre-
sentative and less accountable.”
The legislation called for a
constitutional amendment that
would have established a new
co Fo
formula for drawing legislative
maps, requiring certain dis-
tricts to be more favorable to
a political party if that party
had a higher percentage of
votes in elections for presi-
dent, senator and governor in
the prior decade. The amend-
ment would have had to be ap-
proved by New Jersey voters.
Supporters of the measure
said the formula would have
n-
Scribner, the novel’s publisher,
also supplied 1,500 free copies
to city libraries to ensure that
New Yorkers had plenty of op-
portunity to read the book.
Ms. Egan, who has received
such honors as the Pulitzer
Prize and the National Book
Critics Circle Award for her
2010 novel “A Visit from the
Goon Squad,” said it was nev-
ertheless meaningful to learn
about her status among New
York library users.
“Especially for this book
because I was so dependent on
the library for my research,”
she said in an interview.
The top 10 lists do vary
greatly from branch system to
branch system. Indeed, no au-
thor other than Ms. Egan
landed on all three lists.
The list for the New York
Public Library, whose system
NY
on room cleanliness or nurse
communication, for example,
the higher the potential reim-
bursement.
Word-of-mouth is another
concern. Roughly 72% of pa-
tients make their health-care
decisions on the recommenda-
tion of family or friends, ac-
on cording to recent research
from the Beryl Institute, a
Texas-based nonprofit focused
on patient experiences. A bad
story, a bad hospital experi-
ence, can have consequences
in a compressed market, said
Jason Wolf, who leads Beryl.
What is most important to
consumers, said Mr. Wolf, is to
At a public hearing,
no members of the
public spoke out in
favor of the proposal.
offered a more accurate reflec-
tion of the electorate. Oppo-
nents said it would have given
Democrats an unfair advantage.
Registered Democrats outnum-
ber Republicans by more than
900,000, according to the New
Jersey State Department.
The League of Women Vot-
ers of New Jersey disapproved
of the use of election results
as the primary metric, rather
than citizen input, to draw
encompasses branches in Man-
hattan, the Bronx and Staten
Island, was arguably the most
eclectic. It blended works of
literary fiction along with such
nonfiction titles as Michael
Wolff’s “Fire and Fury: Inside
the Trump White House” and
J.D. Vance’s “Hillbilly Elegy: A
Memoir of a Family and Cul-
ture in Crisis.”
By contrast, perennially
popular authors of romance
novels and thrillers, such as
Danielle Steele, John Grisham,
James Patterson and David
Baldacci, figured heavily on
the Brooklyn and Queens lists.
The Queens Library’s list
also included a test-prep book,
Kaplan Publishing’s “TASC
Strategies, Practice & Review,”
which is geared for a high-
school equivalency exam.
“It’s always popular,”
“listen to me, treat me with
courtesy and respect, and
communicate to me in a way
that I can understand.”
Carl Ginsburg is a spokes-
man for the New York State
Nurses Association, whose
members are in the midst of
contract negotiations with the
League of Voluntary Hospitals
and Homes of New York. Mr.
Ginsburg said that members
are “all for a better experience
for patients at Montefiore,”
which is part of the league.
“And as frontline nurses
and caregivers, we draw on
our own experience where we
see overcrowding and under-
legislative maps.
“That’s the classic defini-
tion of partisan gerrymander-
ing,” said Nancy Hedinger,
league president.
Senate President Steve
Sweeney, a Democrat who sup-
ported the amendment, said
the legislature would continue
to work on a redistricting
overhaul.
“This will give us the time
and opportunity to review the
input we have received from
the public, our legislative col-
leagues and others to deter-
mine if any of these ideas
would improve the proposal,”
Mr. Sweeney said.
Democratic Assembly
Speaker Craig Coughlin, who
also supported the measure,
said the public feedback played
Queens Library Technical Ser-
vices Director Hong Yao said
of the title.
In almost every case, how-
ever, the library lists are quite
different than the best-seller
ones. NPD Group, a market re-
search firm, notes that the
year’s top-selling book in print,
both in the New York market
and nationally, is Michelle
Obama’s “Becoming,” which
was released in November.
But at libraries, the title
hasn’t been out long enough
to generate significant bor-
rowing, though library offi-
cials said the demand is cer-
tainly there. Sheila Schofer,
the Brooklyn Public Library’s
director of neighborhood ser-
vices, added that she “abso-
lutely expected” the title
would show up on the top 10
checked-out list in 2019.
Monday, December 17, 2018 | A12A
to staff. A recent theme on em-
pathy, for example, empha-
sized that every patient should
feel heard, understood, valued
and cared for.
There have been other small
shifts in the customer experi-
ence, too. Mr. Khattar—who
previously worked for Star-
wood Hotels & Resorts, the
Ritz-Carlton Hotel Co., the Four
Seasons Hotels and The Pierre
Hotel—overhauled Montefiore’s
welcome desk by adding work-
ers who carry iPads and wear
identifiable jackets. Simply
adding a welcome sign and re-
arranging the positions of staff
members at the entrance
helped improve traffic flow.
He expanded an art pro-
YANA PASKOVA FOR THE WALL STREET JOURNAL
gram to enliven drab hallways
and added piped music to the
main waiting area. Lighting
has been improved in some ar-
eas and the answering system
for the hospital’s main phone
number was streamlined so
callers could more easily reach
a patient room or hospital re-
cords. Montefiore has 800 in-
patient beds and gets around
15,000 calls to its main num-
ber each month.
There are some things that
staffing at serious levels,” said are harder to change and irk-
Mr. Ginsburg. some to Mr. Khattar who, after
A spokeswoman for Mon- 15 years in hotels, reflexively
tefiore, one of the largest em- picks up stray pieces of trash
ployers in the metro region, from the hospital floors and
.
said to best meet each pa- leans gently at the waist when
ly
tient’s needs, “we’ve brought he opens a door. The mish-
on additional staff, upgraded mash of directional signage,
technology, and made all ser- which sometimes confuses pa-
vices available 24 hours a day, tients, causing them to arrive
seven days a week.” to an appointment late or take
Mr. Khattar’s changes at a longer-than-necessary route,
Montefiore have included a is a long-term project. Empha-
“We Care” program that fos- sizing to staff the need to
ters a culture of courtesy and knock on a door before enter-
respect. The program includes ing, to make eye contact and
in-person training and a give a gentle touch when
weekly short curriculum cen- speaking to patients or fami-
tered on a theme and emailed lies are ongoing goals.
into his decision to pull the bill. that commission.
“I want to integrate some
of the valuable input received
Yurij Rudensky, counsel with
the Democracy Program at the
to help create a better mea- Brennan Center for Justice at
sure and improve the redis-
tricting process overall,” Mr.
New York University, said the
proposed formula could harm
Coughlin said. the state’s African-American,
Democratic state Sen. Nich- Latino and Asian communities.
olas Scutari, who co-spon- The proposal could dilute the
sored the bill, said in an inter- political power of these groups
view before the legislation was by unfairly spreading the elec-
pulled that statewide elections torate from these communities
draw the most voters, so the across disparate legislative dis-
proposed system would have tricts, he said.
been fairer because it re- New Jersey Republican
flected the preferences of the Chairman Doug Steinhardt ap-
most people. He also said the plauded the decision not to
measure incorporated many bring the bill up for a vote.
changes, including banning “Its withdrawal is a win for
lobbyists from serving on the New Jersey’s 9 million resi-
commission that draws the dents and the foundation on
maps and guaranteeing mem- which our democracy is built,”
bers of the public spots on Mr. Steinhardt said.
New York Public
Library Checkouts
1. ‘Manhattan Beach’ by Jen-
nifer Egan
2. ‘Origin: A Novel’ by Dan
Brown
3. ‘The Handmaid’s Tale’ by
Margaret Atwood
4. ‘Sing, Unburied, Sing: A
Novel’ by Jesmyn Ward
5. ‘Fire and Fury: Inside the
Trump White House’ by Mi-
chael Wolff
6. ‘Little Fires Everywhere’ by
Celeste Ng
7. ‘A Gentleman in Moscow’
by Amor Towles 9. ‘The Underground Railroad:
8. ‘Hillbilly Elegy: A Memoir of A Novel’ by Colson Whitehead
a Family and Culture in Crisis’ 10. ‘Exit West: A Novel’ by
by J. D. Vance Mohsin Hamid
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

A12B | Monday, December 17, 2018 NY * * THE WALL STREET JOURNAL.

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 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
A pair of apps preach relaxation to millions of customers—but the competition between them is anything but Zen
BY HILARY POTKEWITZ
T
he two smartphone apps
taking meditation main-
stream exude a Zen vibe
and trumpet nearly iden-
tical missions to increase
health and happiness around the
world.
But behind the blissful market-
ing mantras, Headspace and Calm
are locked in a head-to-head fight
to dominate the booming $1.2 2
billion meditation market.
“I would say we’re in
mindful competition with
each other,” says Michael Ac-
ton Smith, co-CEO and co-
founder of Calm, based in
San Francisco. “And they
have six times as many em-
ployees as we do.” Calm has a
staff of about 40, while Head--
space employs 230.
“The irony is not lost on
me,” says Rich Pierson, CEO
and co-founder of Headspace,
of the rivalry with Calm. But
he’d rather focus on his Santaa
Monica, Calif.-based company’sy’s
authenticity, he says, which iss
drawn from co-founder Andy
Puddicombe’s 10 years of study-dy-
ing meditation at Buddhist mon- on-
asteries.
no
“If you were going to see a
psychologist, you’d probably
want to know where they
trained and qualified. It’s
the same with meditation,”
Mr. Pierson says. Calm’s
founders previously above, co-founder of
worked in online gaming
and advertising.
Both startups are venture-
backed, founded by charis-
matic British guys who moved to
California. Both practice what they
preach, offering officewide daily
meditation sessions. And both apps
have been downloaded more than
38 million times, with each hitting
1 million paid subscribers in June,
the companies say.
“Headspace launched two years
before us, and now we’re neck and
neck,” says Dun Wang, Calm’s chief
product and growth officer.
Founded in 2010, Headspace had
dominated the meditation category
until this year, when Calm caught
up.
Calm got a boost from winning
the 2017 iPhone App of the Year
award from Apple’s App Store last
December. “Since winning App of
the Year, we seem to have a much
higher growth rate than they do,
and we’ll surpass them from now
on,” Calm’s Ms. Wang says.
Calm has topped the category in
both downloads and mobile reve-
nue since last December, with reve-
nue through October at $50.7 mil-
lion, according to estimates from
mobile-data firm Sensor Tower.
Headspace, now in second place,
saw revenue of $34.3 million, ac-
cording to Sensor Tower. Both offer
standard subscription rates of $13 a
month. Annual subscriptions cost
$96 a year at Headspace and $70 a
year at Calm.
LIFE&ARTS
The Battle to Control
Your Mindfulness on
us l,
al a
e
ci on
er rs
m e
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co Fo
How the two popular meditation apps compare:
HEADSPACE
H CALM
$75 million
38+ million
$34.3 million  2018 app revenue*  $50.7 million
$ n
n-
Note: * Jan-Oct; Source: Sensor Tower
N its bbenefits. (Neither is a paid
Andy Puddicombe, A Headspace
spokeswoman
Headspace, was says Sensor
ordained as a Tower’s data didn’t
Buddhist monk. account for sub-
scriptions that come
through its website and
corporate partnerships, which
would push its 12-month revenues
“north of $100 million.” The com-
pany declined to provide year-over-
year comparisons. Calm didn’t dis-
pute Sensor Tower’s data.
The award is a touchy subject at
Headspace. Apple does not reveal
its selection methods or criteria.
“I think people are blowing App-
of-the-Year way out of proportion,”
says Ben Spero, a managing direc-
tor at Spectrum Equity, a Head-
space investor. “It’s good P.R., but
it’s not determinative. It’s not that
Apple was saying that Calm is a
better app—they’re big fans of
Headspace, too,” he says, pointing
out that the App Store often fea-
tures Headspace on its landing
page. Apple declined to comment
on the 2017 award.
The meditation industry—includ-
ing studio classes, workshops,
books, online courses and apps—is
worth about $1.2 billion and grow-
ing, according to a 2017 estimate
by Marketdata Enterprises. Studies
show meditation can reduce stress
and improve sleep.
The national meditation rate has
tripled over the past five years. The
number of U.S. adults meditating is
on track to surpass the number of
those practicing yoga in the next
two years, according to an October
TECHNOLOGY
Headspace vs. Calm
2010  Founded  2012
 VC funds raised  $28 million
230  # Employees  40
 Downloads  38+ million
report from the Centers for Disease
Control and Prevention.
Businesses are eager to help em-
ployees tap into their higher con-
sciousness in the hopes that it will
improve productivity and reduce
stress-related health-care costs.
About 22% of companies started of-
fering mindfulness meditation
training in 2016, and another 21%
planned to add it in 2017, according
to a survey by The National Busi-
ness Group on Health and Fidelity
Investments.
All the attention has fueled a
digital bonanza, with more than
2,000 new meditation apps
launched over the past three years.
Headspace and Calm account for
about 85% of the revenue generated
by the top 10 apps in the category,
according to Sensor Tower data.
Headspace uses quirky cartoons
to walk the user through medita-
tion sessions, all guided by Mr.
Puddicombe. In addition to pro-
grams for stress and anxiety, it of-
fers sessions for sleep, work/pro-
ductivity and fitness.
Calm lets listeners choose from
several different meditation teach-
Monday, December 17, 2018 | A13
.
ly
Michael Acton
Smith, below,
is co-CEO and
co-founder
of Calm.
ers and peaceful nature scenes.
About half of Calm’s users use it
primarily as a sleep app rather
than a meditation app, the com-
pany says. They tune in to Calm
Sleep Stories, which are bedtime
stories narrated by actors including
Matthew McConaughey, and Calm
Music, which offers curated musical
playlists.
Headspace is pushing for growth
through corporate partnerships,
last year hiring chief business offi-
cer Ross Hoffman away from Twit-
ter, where he led global content
partnerships. “We’re just fishing
where the fish are,” Mr. Hoffman
says. Over the past 18 months, he
has signed deals with more than
300 companies to integrate Head-
space subscriptions into their em-
ployee health and wellness benefits,
including Unilever, Adobe, Genen-
tech and LinkedIn.
Last March, Headspace an-
nounced a deal with the National
Basketball Association to become
the league’s official mediation and
mindfulness partner. It involves
branded content, promotions and
about 7,000 subscriptions for play-
CAROL HENAFF; PHOTOS CLOCKWISE FROM TOP: CALM (2); BLOOMBERG NEWS; HEADSPACE
ers and staff, but no money ex-
changed hands, Headspace says.
Calm has largely ignored the
business market, declining most
corporate requests until recently,
when some major companies
started calling. Calm executives say
start
suc deals don’t add substantial
such
rrevenue. Corporations typically
negotiate bulk purchasing dis-
ccounts of up to 50% off stan-
dard subscription fees.
d
“Calm has managed to over-
ttake Headspace because they’ve
b
been laser-focused without get-
ting distracted by the types of
ti
vanity partnerships, like with
va
sp
sports teams, that look good in
th
the press but don’t move the
ne
needle,” says Harley Miller, prin-
cipal at Insight Venture Partners,
cip
aC Calm investor.
Headspace responds that all its
partners serve a strategic pur-
pa
pose.
pos Seeing professional athletes
practice mindfulness and medita-
pra
tion with Headspace will encour-
age young aspiring athletes to do
the same, Mr. Hoffman says, espe-
cially
cial with stars like Kevin Love of
the Cleveland Cavaliers and retired
leag MVP Steve Nash extolling
league
spokesman.)
spok
“We have the strongest brand,”
“W
Mr. Hoffman
H says, pointing out that
morn ning talk shows and late-night
comedy hosts regularly turn to
Headspace’s Mr. Puddicombe to
teach viewers about meditation.
Early reluctance aside, Calm is
expanding into the corporate arena,
often on the heels of its biggest
competitor.
“Companies will approach us
and say, ‘We got this offer from
Headspace, do you guys want to
put in an offer as well?,’ ” Calm’s
Ms. Wang says. “It’s working out
great for us. We don’t need to be
the ones making the cold calls to
win these projects.”
PricewaterhouseCoopers and
Samsung were among Calm’s first
corporate clients. In October, Amer-
ican Airlines became its first airline
partner. (Headspace already has
content deals with 11 airlines, in-
cluding JetBlue, Delta and United.)
Calm’s soothing nature videos will
play on all seat-back screens during
boarding, putting the brand in the
faces of more than 200 million pas-
sengers a year, according to the
carrier.
Headspace isn’t taking this lying
down. Its Headspace Health divi-
sion is currently seeking Food and
Drug Administration approval to
become the first prescription medi-
tation app for certain chronic ill-
nesses. FDA approval would pave
the way for Headspace programs to
be covered by health insurance.
Calm’s leadership team is fo-
cused on achieving mass mindful-
ness, and on victory. “We’re both
growing the sector. This is such a
huge market, there’s going to be
room for a few different winners,”
Mr. Acton Smith says. “We want
Calm to be the number one, of
course—and we wish the others the
best for second place.”
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

A14 | Monday, December 17, 2018 THE WALL STREET JOURNAL.

LIFE & ARTS

WHAT’S YOUR WORKOUT? | By Jen Murphy

A Rare Disease Won’t Keep

This Hiker Off the Trails
Ben LeNail has ALD, but a daily exercise regimen and Pilates help him stay healthy and active
Ben LeNail’s workouts include hikes
with his dog, left, and physical
therapy sessions with Vicky Ferreira,
above and below, that end with slow
dancing to practice fluid movement.

using cables and pulleys that build

core strength, flexibility and im-
prove balance. “My body can be a
bit spastic, but the repetitive, con-
trolled movements help me build
stability,” he says. “And there’s no
risk of me falling with the cables
attached to my wrists and feet.”
Vinyasa yoga is too fast-paced,
so he has embraced yin yoga, a
slower style. “It’s just the right
mix of mindfulness and balance,
and many poses are performed on
the floor,” he says. Three days a
week, he trains at Form Fitness in
Palo Alto, Calif. To help his mus-
cles avoid atrophy, he says “con-
stant strengthening is crucial.” He
uses a mix of free weights and ma-
chines and adds in high-intensity
interval training segments.
Mr. LeNail has a pool at his
ANGELA DECENZO FOR THE WALL STREET JOURNAL

house and swims three to four

days a week, mixing breaststroke
and freestyle. “Swimming is the
one intense cardio thing I can do,”

.
he says. “It also loosens up my

ly
legs, which can feel very heavy at
the end of the day.”
At least three days a week, he
on takes his golden retriever, Hazel,
for a hearty walk on the trails of
Coal Creek Preserve or Baylands
Nature Preserve, both in the Bay
Area. “Put me on a trail and the
us l,

T
memory of my hiking days comes
wo decades ago, Ben Le- back,” he says. “I seem to walk,
al a
e
Nail’s typical weekend not effortlessly, but with more
included a mix of cycling, each other properly, they can’t send ease for a few miles.”
running, backpacking, messages to our muscles,” she says.
ci on

mountaineering and ski- “As a result, our muscles can get The Diet
ing. A self-described mountain man, smaller to the naked eye, weaken and Mr. LeNail was born in France and
he had summited bucket-list peaks, have a tendency to get tighter.” Exer- jokes that as a Frenchman, he loves
including Mount Rainier in Wash- cise can be the best medicine for age- rich foods. He tries to curb his in-
ington and Monte Rosa in Switzer- or disease-related muscle atrophy. dulgences by fasting from 7 p.m. to
er rs

land, in his 30s. But in his early Pilates can be particularly helpful for 7 a.m. “Sometimes at 9 p.m. I really
40s, he found himself struggling to people with stability and motor-related crave a cookie or some cheese,” he
find his footing on the trails. issues, says Jane Hein, a physical thera- says. “But I allow myself to eat well
At first, he thought the lethargy pist and lead Pilates instructor at the the rest of the day.” Breakfast is
m e

could be age-related. But at home, Mayo Clinic Healthy Living Program in three eggs, and oatmeal or granola
leaden legs turned his gait into a Rochester, Minn. “As our muscles dete- topped with fruit and goat milk.
shuffle. In 2011, after a three-year riorate, our postural stabilizers that Three days a week, he orders lunch
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diagnostic odyssey, Mr. LeNail was support our spine and trunk become from an Indian restaurant. His go-to
told he had X-linked adrenoleu- weaker and suddenly, gravity poses a is chicken curry with tomatoes and
kodystrophy (ALD). The rare neu- challenge,” she says. “Everyday activi- spinach. He refuels after a workout
rodegenerative disease, drama- ties like standing up straight and walk- with an Odwalla protein shake.
tized in the movie “Lorenzo’s Oil,” ing can become difficult. The risk of He and his wife have a Sun Bas-
co Fo

is similar to progressive multiple falls increases.” ket membership. The meal-delivery

sclerosis and is slowly robbing him
of his ability to walk.
“Suddenly, I had the body of an
85-year-old,” he says. “Our society
has a very traditional vision of
masculinity—a man should be able
to throw a ball, jump, run. I had to
reinvent myself with my disease.”
Refusing to be wheelchair
bound, Mr. LeNail, 53 years old,
embraced a daily regimen of Pi-
lates, physical therapy, swimming
and hiking. He continues to lead as
n-
As we grow older, our skeletal muscles tend to wither and
weaken, a phenomenon known as sarcopenia. Muscle at-
rophy also occurs in people who suffer from spinal-cord
injuries, stroke and neurologi-
How Pilates cal disorders such as multiple
Helps Fight sclerosis, Parkinson’s disease
Muscle Atrophy and Amyotrophic Lateral
Sclerosis, or Lou Gehrig’s dis-
ease, says Kara Flavin, a clinical assistant professor of
physical medicine and rehabilitation at Stanford University.
“When the brain, spinal cord and nerves can’t talk to
She says a Pilates apparatus such as the reformer, service ships ingredients and reci-
which looks like a bed frame with a sliding carriage and pes that they prepare for dinner.
adjustable springs, eliminates gravity, allowing people to Frequent meals include rainbow
perform strengthening exercises on their back, stomach trout with a vegetable stir fry or
and sides. Having your feet and hands attached to the re- salmon with sautéed kale. He also
former machine’s straps and pulleys while doing exercises enjoys cooking soups and quiches.
provides proprioceptive feedback to the body’s neuromus- His weakness is goat cheese.
cular system.
“The person feels more safe and supported,” she says. The Gear & Cost
“It opens up the entire body, so much so that people fre- He wears Vibram FiveFingers
quently say they feel taller after a session,” she says. shoes ($80) during Pilates and
yoga. “They separate my toes and
that gives me more ankle sup-

normal a life as possible, enter-
taining friends with his wife, hik-
ing with his dog and two sons,
ages 19 and 24, and working as the
no
would remain a vigorous human therapist Vicky Ferreira. They focus so my movements become less stiff port,” he says. Lifting his feet
being both mentally and physi- on core strength, squats and exer- and more harmonious,” he says. takes extra effort, so he likes that
cally,” he says. “Ironically, the dis- cises that utilize bands and pulleys. He credits his weekly reformer Asolo Path GVS boots ($125) are
ease makes it more important than For the last 20 minutes of each ses- Pilates class with keeping him out lightweight while delivering ankle

director of business development
at Alta Devices, a Sunnyvale, Calif.-
based solar-energy company and
an angel investor in startups.
“I may not be able to summit a
mountain, but I promised myself I
ever to exercise every day.”
The Workout
Mr. LeNail exercises for an hour
daily, sometimes twice a day. Once
a week, he works with physical
sion, they slow dance. “My disease
makes my feet very lazy,” he says.
“Rather than stare down at my feet
and be tense, I can find some com-
fort and balance in her body next
to mine. That helps my brain relax
of a wheelchair. “My disease causes
the muscles to atrophy, so the body
becomes very stiff, almost
hunched,” he says. “Pilates helps
open up my body.” The workout
consists of controlled movements
and foot stability. He pays $29 per
reformer class at Club Pilates in
Palo Alto. His gym membership,
which includes yoga classes, costs
$169 a month and he pays $150
per physical-therapy session.

UP NEXT

‘VANITY FAIR’ GETS A MODERN MAKEOVER

Hughes, Becky Sharp strives to be accepted
BY TOBIAS GREY
in royal court circles in spite of her lowly
birth. An indefatigable social climber, she
THE BRITISH MAKERS of a new television does everything to be seen in the right
adaptation of the classic novel “Vanity Fair” places with the right people. “If Becky Sharp
by William Makepeace Thackeray set out to was alive today she’d have 10,000 followers
break the mold. on Instagram,” Mr. Strong says. “She’s
“I wanted this to be period drama for someone who realizes that you can better
people who don’t normally like period yourself by using all of your charm and in-
drama,” says director James Strong. “It’s a telligence to outwit those around you.”
bit more in-your-face than the stately ele- Each episode opens with an image of the
gance that is usually on offer.” main characters aboard a turning carousel.
The seven-part series, which comes to “There is the idea of the fair as a metaphor
Amazon Prime on Friday, is still set during for life, which appears charming on the sur-
the early, corset-constrained 19th century. face but if you look at it too deeply is rather
However, it employs a soundtrack of con- hollow,” Mr. Strong says.
temporary pop music, and a leading actress The choice of music such as Madonna’s
who often breaks the fourth wall by ad- “Material Girl” and Kate Bush’s “Running Up
dressing the audience directly. That Hill” accentuates this point, as well as
Olivia Cooke, 24, who plays Thackeray’s Becky Sharp’s grasping nature.
manipulative and ambitious antiheroine Ms. Cooke says she took inspiration for
Becky Sharp, says she learned to use the her performance from Emma Thompson’s
camera “as a bit of a conspiratorial tool.” starring turn as Beatrice in the 1993 film
Ms. Cooke, who co-starred in Steven version of “Much Ado About Nothing.”
MAMMOTH SCREEN/ITV

Spielberg’s “Ready Player One”, says confid-
ing in viewers became “a way of inviting the
audience to be in the know alongside of
Becky who is so imperfect and unapologetic
about it.”
In the TV series, scripted by Gwyneth
“She was so naughty and so knowing in
that,” Ms Cooke says. “I remember thinking
I’d love to emulate that level of connivance
one day.”
“Vanity Fair” premieres Friday on Ama-
Olivia Cooke plays the calculating Becky Sharp in a new adaptation of ‘Vanity Fair’ for television. zon Prime.
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Beauty in the Meticulous
Vija Celmins’s obsessive drawings and painstaking process fly in the face of today’s art-museum spectacles
BY PETER PLAGENS
‘I
San Francisco
want to pin the image in
the structure of the paint-
ing,” said Vija Celmins in
no
conversation with curator
Gary Garrels at the press
preview for her retrospective at the
San Francisco Museum of Modern
Art. Elsewhere, Ms.
Celmins says in the
museum’s press mate-
rials that “black images
of night sky invite you
in, you come close, but
then you’re kept out by
their physical flatness.”
These and similar
eat-your-lima-beans
formalist assertions
about the 140 paint-
ings, drawings, prints
and a few sculptures in
“Vija Celmins: To Fix
the Image in Mem-
ory”—representing al-
most half the oeuvre of
her 55-year career—fly
in the face of the art-
museum spectacles and political-ad-
vocacy art that dominate the current
scene. It remains to be determined,
however, if a viewing public that’s
accustomed to easy whiz-bang
bright color and gigantism will cot-
ton to an exhibition consisting of ob-
sessive graphite drawings of seem-
ingly indistinguishable sections of
ocean and the starry firmament
above, a few oil paintings of the
same, and some deadpan sculptures
replicating common objects.
For viewers willing to pause and
ponder, there’s plenty to relish in
Ms. Celmins’s art, and in Mr. Gar-
rels’s bravely commandeering a
goodly amount of SFMoMA’s wall
space for such quiet, modest works.
Ms. Celmins was born in 1938 in
Latvia and fled the country with her
family when the Soviets invaded near
the conclusion of World War II. They
ended up in Indianapolis, where she
on
us l,
al a
e
ci on
er rs
m e
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co Fo
eventually attended the Herron
School of Art and Design. A fellow-
ship to the Yale Norfolk Summer
n-
School of Art and Music brought her
into contact with a larger art world,
and she moved to Los Angeles in
1962 to be a graduate student at
UCLA. (Ms. Celmins relocated to New
York in 1981.) Los Angeles art in the
early 1960s was enamored with ei-
ther late manifestations of Abstract
Expressionism or forays into Pop Art,
but neither of those appealed to Ms.
Celmins, whose temperament was,
and remains to this day, artistically
and socially matter-of-fact.
The artist was precocious but
slow. Realist paintings of ordinary
objects in her studio from her pre-
MFA-degree UCLA days, such as
“Envelope” (1964) and “Heater”
(1964), begin the mostly chronologi-
cally ordered show. Ms. Celmins’s
first breakthrough in her steady-Ed-
die aesthetic progress came from
photographs of the ocean off Venice
Beach that she began taking in 1968.
She drew from them, meticulously,
working from the lower right to the
upper left. (An almost invisible
white-ish X—coming from the paper
that’s not drawn on—is visible in
two of the drawings; it’s the artist’s
way to disrupt the illusionism and
force viewers to slow down and real-
LIFE & ARTS
ART REVIEW
ize the work is a species of abstrac-
tion.)
Drawing, not the ocean, is the sub-
ject of these pictures. And so it goes
through all her carefully worked
drawings and often reworked paint-
ings of the night sky (“Night Sky
#16,” 2000-01 has 20 layers). Actu-
ally, seeing is what they’re all about.
The exhibition’s subtitle derives from
“To Fix the Image in Memory I-XI”
(1977-82), a sculpture consisting of 11
stones retrieved from the New Mex-
ico desert and 11 bronze casts of
those same stones carefully painted
to match. According to an SFMoMA
person at the preview, the only way
the installation crew could tell the
difference was to weigh both in their
hands.
Monday, December 17, 2018 | A15
.
ly
Ms. Celmins’s brand of realistic
nonrealism combines the painterly
poetry of the Italian modernist Gior-
gio Morandi and a Bay Area contem-
porary, Robert Bechtle, with the pre-
ternatural verisimilitude of such
19th-century American “dollar bill”
painters as William Hartnett. In the
ocean and night-sky works there
also lurks what the critic Thomas
McEvilley, in the 1980s, called “vow
art,” by which he meant perfor-
mance art that involved conspicuous
endurance for no practical purpose.
With Ms. Celmins, it would mean
meticulously hand-rendering a se-
lected part of a sky or ocean that to
most people appears entirely ge-
neric.
In the exhibition, the artist’s mo-
CLOCKWISE FROM TOP: ERIC MCNATT/SFMOMA; ©VIJA CELMINS/MATTHEW MARKS GALLERY (4)
Contemporary artist Vija Clemins, top;
her ‘Night Sky #16’ (2000-01), above;
‘Heater’ (1964), above left; ‘Envelope’
(1964), left, and ‘Table With Gun’
(2009-10), far left
dus operandi extends to a painting of
a piece of weathered wood (“Desert
Surface #1,” 1991), one of the faded
cover of a Japanese book, and of
small antique school slates. For the
last of these, Ms. Celmins commis-
sioned a sculptor to make physical
duplicates and then hand-painted
them to look exactly like the origi-
nals. “They had all these scratches
and all this kind of, what I would say
romantic atmosphere to it,” Ms.
Celmins says in the exhibition’s audio
guide, “which I would not allow my-
self to do in my own work, but which
I could mimic now in doing the
blackboards.”
We know what Ms. Celmins gets
out of playing things so close to the
vest, but our rewards as the audience
are less obvious. The paradox is that
when Ms. Celmins jazzes up her work
even slightly, as in “Concentric Bear-
ings D” (1984), which juxtaposes im-
ages of a sky with that of an airplane
and Marcel Duchamp’s roto-relief
sculpture, we lose interest. When she
sticks to her simple, loving complexi-
ties, we are riveted. Ms. Celmins’s
retrospective is both a homage to
very slow art and a kind of defiance.
“I’m not a symbolic painter or politi-
cal painter,” she says. It’s that obdu-
rateness that moves us.
Mr. Plagens is an artist and writer in
New York.
Vija Celmins: To Fix the Image in
Memory
San Francisco Museum of Modern Art,
through March 31, 2019
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

A16 | Monday, December 17, 2018 * * THE WALL STREET JOURNAL.

SPORTS

TIM WARNER/GETTY IMAGES

West Virginia quarterback Will Grier is one of the latest NFL prospects to bail on a bowl game, deciding to prep for the late April draft instead of competing in the Dec. 28 Camping World Bowl.

COLLEGE FOOTBALL | By Jason Gay

.
ly
Expand the Playoff, College Football on
The current format has sucked all the urgency out of bowl season. But money is what will push the playoff to eight teams
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My favorite non- shock—Americans love a do-or-die coaches, not for athletes; don’t be coolness from the Gator Bowl—or, Champs Sports, Russell Athletic.
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sense sports debate at tournament) and puff themselves ridiculous—college football finds a ahem, the TaxSlayer Gator Bowl— OK I’m just kidding, WSJ Sports
the moment is whether up about fairness (in the four- way. but here we are. didn’t sponsor this bowl, but we
or not college football team model, high quality teams, They should do it ASAP. I don’t Meanwhile, if you’re still plan- totally would, if we could do it for
ci on

will eventually move to even conference winners, get left need to tell you that the playoff ning a Cheribundi Tart Cherry under $75.)
an eight-team playoff. out). Everyone gets to say “UCF format sucked all the urgency out Boca Raton Bowl party, a re- In the past, Grier’s move might
It’s like watching someone debate would be in!” “Georgia would be of the rest of college bowl season, minder: It’s this Tuesday, Dec. 18. outrage the college football pooh-
whether or not they’ll get the in!” and “Ohio State would be in!” relegating it to a meaningless pa- That tells you everything you need bahs. Old-schoolers would bray
curly fries with a cheeseburger. and feel good about their spirit of rade of also-rans with weirdo to know about these games in about Grier letting down his
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Come on. Get the fries! No one inclusiveness. Of course, nobody sponsors. (I know the playoff semi- 2018. Bowls may lack relevance, school, yadda, yadda, yadda.
in human history has ever enjoyed confesses the true motivation to but they are convenient live pro- But in 2018 that kind of criti-
a cheeseburger with a sad side expand, because nobody wants to gramming to spread like Nutella cism is quaint. People get it.
salad. sound like a crass jerk. across random weekdays in De- Should a player really risk his pro-
Don’t talk about the
m e

Of course there will eventually But your buddy Jason is happy cember, giving them value to net- fessional livelihood for a shot at
be an eight-team playoff in college to sound like a crass jerk! sanctity of the Camping works, especially ESPN. (It doesn’t branded glory in the Camping
football, expanding from the cur- Really, the reason to expand really matter if the bowl is good or World Bowl?
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rent four-team format. from four teams to eight is the

World Bowl. Instead, not. If you could convince your I say ‘No.’
How is this even a debate? only reason anything truly gets follow the money. dog to run around a loop with a Would expanding the playoffs
Detractors of playoff expansion done in college sports: Money. pair of underwear on its head, I from four to eight prompt more
have their reasons—“I love all the It’s about the money, it always could find you a sports network to top players to stick around, since a
funky matchups. I love the Funky is. The four-team playoff has buy it.) playoff bid would come with a
co Fo

Cold Medina Poulan Weed Eater proven itself to be a lucrative bo-
Bowl,” Clemson coach Dabo Swin- nanza, and the first rule of lucra-
ney said the other day, an impec- tive bonanzas is to try and make
cable Dadjoke reference to a 90s them more lucrative.
bowl sponsor and a late-80s Tone There will be some performa-
Loc song. But Swinney’s sentimen- tive hand-wringing about how to
tality here is just bizarre. It’s like do it—should conference champi-
being emotionally attached to Den- ons automatically get in?—but the
nis Rodman movies. thing will get done because it
Proponents of expansion, on the makes too much financial sense.
other hand, cite the public’s appe- When it comes to $$$—that is,
tite for playoffs (as if this is a $$$ for conferences, schools, and
n-
finals are technically bowls—this
year the Cotton and the Orange—
but be serious: nobody cares. Peo-
ple call them the semifinals.)
Even the Funky Cold Medina
Bowl bowl-loving Swinney be-
moans the impact. “I hate the fact
that all of a sudden now it’s not
cool to go to the Gator Bowl,” he
said.
Dabo’s right. I didn’t think it
was possible to remove the edgy
College players sense this mean-
inglessness. It’s officially a trend
for potential NFL picks to bail on
their teams as bowl season ap-
proaches—West Virginia quarter-
back Will Grier is one of the latest,
deciding to prep for the late-April
NFL draft instead of competing in
the Dec. 28 Camping World Bowl
(the bowl’s prior sponsors: Block-
buster, Carquest, MicronPC, Flor-
ida Tourism, Mazda, WSJ Sports,
shot at a national title? Maybe.
Would giving an automatic playoff
bid to a conference champion in-
still critical stakes in those mostly
dull neutral-field made-for-TV con-
ference championships? Seems like
it would.
But in the end, money will be
what pushes the four-team playoff
to eight.
Count on it. And order the curly
fries.

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.
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d p Pittsburgh
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0s 10s
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l l 70s 70s Miami Showers Flurries 49 Catcall
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 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Inner Peace Is a Booming Business
California is
weird—and
full of contra-
dictions. On
the one hand,
California as a
country would
INSIDE
VIEW have the
world’s fifth-
By Andy
largest econ-
Kessler
omy. On the
other hand,
state Senate leader Toni G. At-
kins is doing her best to di-
minish that wealth by pushing
a campaign to ban fossil fuels.
Despite the drama, a 2017 Wal-
letHub survey concludes that
12 of the 20 happiest Ameri-
can cities are in California.
Hmmm. Maybe it’s because
California is home to an end-
less expanse of spiritual re-
treats—a booming enlighten-
ment industry.
You may know of such
places, promoting harmony
among mind, spirit, body
and earth. They have rooms
filled with crystals to tune
your vibrational frequency,
Himalayan-salt therapies
high in negatively charged
ions, and meditation mazes
with a speaker blasting “Om-
mmm” from its center. On
your way to happiness are
large doses of xylophonic-
oboe-harpy new-age music,
root-vegetable dining, cozy
chakra chambers and, of
course, handwritten signs
with Eckhart Tolle-like spiri-
tualist scribblings every-
where. “You have only one
life to live, but if you do it
right, you’ll only need one.”
Insightful! And “Let go of
your material possessions.”
Argentina’s Monetary Rescue
Guido Sand-
leris isn’t a
politician, but
he could be
the most in-
fluential fig-
AMERICAS ure in Argen-
tina’s politics
By Mary
over the next
Anastasia
10 months.
O’Grady
Since Sep-
tember the
47-year-old economist, who
studied at the University of
Buenos Aires, Columbia Uni-
versity and the London
School of Economics, has
been governor of Argentina’s
central bank. His tenure coin-
cides with dramatic changes
in the bank’s monetary pol-
icy, halting a peso plunge
that took 55% off the value of
the currency between mid-
December 2017 to the end of
September.
If the policy set by Mr.
Sandleris and his team con-
tinues, it could usher in a
new era of Argentine cur-
rency stability. That’s no
small thing in a country
where 13 zeros have been
lopped off the peso note
since 1970. According to Aldo
Abram, an Argentine econo-
no
mist and director at the Lib-
erty and Progress Foundation
in Buenos Aires, a one-peso
note in 1970 is today equal to
10 trillion pesos.
Handicapping a winner for
the October 2019 presidential
election is already the hot-
test parlor game in Buenos
Aires. President Mauricio
Macri ought to be the odds-
on favorite. But a series of
fiscal-policy missteps since
he took office in 2015 have
Reading From Left to Left at Barnes & Noble
By Dave Seminara
D
id you grow up read-
ing memoirs about
persecuted illegal
aliens, morality plays with
3-year-old vegan protago-
nists, and autobiographies
of liberal Supreme Court
justices? Neither did I. But
such children’s fare may be
on offer at your local book-
store.
Just as many of us try to
inflict our sporting alle-
giances on our children—ask
my 9- and 11-year-old sons
how fun it is to root for the
Buffalo Bills—so do we foist
our political views on them.
When it comes to books and
other media, liberals are
spoiled for options, while
conservatives are offered
thin gruel. Unless you lock
your children in a screen-
less cave in Idaho, they’ll
consume a steady diet of
leftist dogma simply by ex-
Conveniently, the Ranch at
Live Oak Malibu takes care
of that for you. One week
starts at $7,800 a person—I
hope that includes bottom-
less cups of bearberry herbal
tea.
The famous Esalen Insti-
tute, left over from the culty
’70s, offers more than 400
workshops on topics from
cosmology to other shams—
er, I mean “shamanic rituals.”
In 2013 Esalen brought in al-
most $18 million in revenue
with margins rivaling some
software companies.
Follow the money. Accord-
ing to Marketdata Enter-
prises, meditation is a more
than billion-dollar business.
Deepak Chopra is the medita-
tion master and mogul, offer-
ing books, seminars, videos
and several California-based
“Perfect Health Retreats”
where you can get instruc-
tion in primordial-sound
meditation.
I heard Mr. Chopra pitch
one of his more than 100
books at a conference I at-
tended. His spiel was some-
thing about “your cosmic
self.” He went on about the
vastness of time and space
and then stopped and asked
attendees, “Shall I teach you
how to meditate?” “Yes!”
they roared. “OK, close your
eyes, relax,” he said—then
launched into a bunch of stuff
about rotating galaxies and
interstellar motion and
karma. I started chuckling,
because all I could think
on
about was my favorite bath-
room-stall graffito, “My
karma ran over your dogma.”
us l,
al a
e
disappointed the nation.
ci on
Early polling now suggests
the possibility that Peronist
former President Cristina
Kirchner could return to
power.
er rs
As president, Mrs. Kirch-
ner destroyed the economy
and undermined institutions.
She faces multiple corruption
m e
indictments. Yet the Peronist
machine is powerful. Unless
Mr. Macri can turn things
m rp
around, many Argentines will
look for an alternative when
they go to the polls.
Mr. Macri started out on
the right foot in 2015. He
co Fo
lifted capital controls and
freed the exchange rate. The
peso immediately weakened
and inflation shot up, but it
was a necessary adjustment.
The trouble is that Mr.
Macri resisted downsizing
the public sector and even
expanded the cabinet and its
bureaucracy. The central
bank viewed the persistence
of large fiscal deficits as a
threat to the availability of
credit for the private sector
n-
and growth. So it kept issu-
ing pesos. This fueled infla-
tionary expectations and de-
molished central-bank
credibility.
Demand to hold pesos
plummeted. By September
Argentina was again in the
throes of a currency crisis.
Disbursements under an In-
ternational Monetary Fund
rescue program had to be ac-
celerated. The central bank
appeared to be such a lost
cause that I recommended
dollarization.
Enter Mr. Sandleris, whose
initial challenge—as it is with
posure to American popular
culture.
At Barnes & Noble the
other day, my sons and I no-
ticed a display called “Inspir-
ing Books to Empower Young
Readers.” The collection in-
cluded “First Generation: 36
Trailblazing Immigrants and
A notably one-sided
selection of ‘Inspiring
Books to Empower
Young Readers.’
Refugees Who Make America
Great,” which lionizes,
among others, Univision an-
chorman Jorge Ramos and
the first fashion model to
wear a hijab.
There were three memoirs
by illegal aliens, two novels
whose protagonists were ref-
ugees, Sonia Sotomayor’s
OPINION
I opened my eyes and saw a
room in a trance. Then Mr.
Chopra caught my eye and I
thought I saw him crack a
tiny smirk. Maybe that’s how
he achieves his own moments
of zen.
I often wonder what happi-
ness and “mind-body syn-
ergy” really consist of. Are
they just an induced endor-
phin rush? Hiking in Bhutan,
a country known for its wide-
spread spirituality (and vege-
tarianism), my wife and I had
Voices calling you to
‘find your escape’ are
likely seeking a buck
like everyone else.
a driver who was the ultimate
in calmness. He drove as if
he’d face a firing squad if he
went 1 kilometer an hour
over the speed limit. Well,
until someone cut us off—at
which point he launched into
what I assume was an exple-
tive-laced tirade, with a vein
on his forehead twitching,
poised to explode. People
who profess inner peace of-
ten are the most dangerous.
Serenity now!
Bhutan is famous for its
“Gross National Happiness”
philosophy, something that
was inscribed in the country’s
constitution in 2008. Actu-
ally, Bhutanese expand their
gross domestic product by
selling Gross National Happi-
ness hats and T-shirts. Cali-
fornia must be jealous.
any inflationary spiral—was
to create a shock to expecta-
tions. He did this by freezing
the monetary base—putting
an end to the issuance of new
money.
The central bank also in-
troduced a new foreign-ex-
change intervention rule: As
long as the peso trades
within a band (plus or minus
15% of an established price)
the central bank won’t inter-
vene in the foreign-exchange
market. If the peso weakens
beyond the band, the central
bank has the authority but
An end to money
creation brings
down inflation and
stabilizes the peso.
not the obligation to use up
to $150 million a day of in-
ternational reserves to buy
pesos. It can also intervene
at the other end of the band
to sell pesos, but only up to
the equivalent of $50 million
a day.
The rule isn’t intended to
provide a floor price but to
signal to the market that
there is liquidity. Impor-
tantly, the intervention won’t
be “sterilized,” which is to
say that the central bank
won’t put the pesos it re-
moves from the market back
into circulation by buying
debt. Instead, those pesos
will be extinguished.
My sources tell me this is
the first time there has been
a commitment to fully “un-
“Turning Pages: My Life
Story,” and “We Rise, We Re-
sist, We Raise Our Voices,”
an anthology that includes a
fictional story of a child who
is arrested by Immigration
and Customs Enforcement
agents at school as he en-
dures taunts from white
classmates wearing “Make
America Great Again” hats.
One “Portlandia”-esque ti-
tle, “You are Mighty: A
Guide to Changing the
World,” is billed as a “how-
to manual on being an activ-
ist.” It features Genesis
Palacio, a preteen girl wear-
ing a “Vegan Power” T-shirt
who became a vegetarian
when she was 3 after learn-
ing that “animals were
killed” for her food. (Barnes
& Noble stores in other cit-
ies told me they have simi-
lar displays; the chain’s cor-
porate office didn’t answer
my emails.)
Conservative-themed chil-
Which brings us back to
Sen. Atkins. Last month she
led a delegation on a five-day
trip to Bhutan, which sounds
like rough duty. They visited
the country’s National Coun-
cil “to learn and experience
Gross National Happiness es-
pecially with regards to envi-
ronmental conservation” and
“take back lessons and imple-
ment” it in California. Yikes.
It’s like a secret mission from
Gov.-elect Gavin Newsom to
turn California into a giant
Dis-zen-eyland and have a
unicorn replace the bear as
the state (spirit) animal. In-
genious, and almost sinister
really: Wreck the economy
with heavy-handed policy,
then change the measure-
ment to unquantifiable happi-
ness. I told you California
was weird.
Don’t misinterpret my ap-
prehension. I’m OK with
mindfulness mania; to each
his own. But isn’t it cheating
if you use shortcuts, whether
mind-altering drugs or wallet-
lightening spiritual guides?
It’s the ultimate in selfish “me
time”: deep breathing, man-
tras, holistic wellness, per-
sonal transformation, etc.
You don’t need to pay for
spirit coaches or feverish
yoga yurts. I hate to break
the news, but Gross National
Happiness isn’t real; it’s an
excuse for politicians to
waste taxpayer dollars with
glee. I tend to find enlighten-
ment during treks to take-
your-breath-away vistas or in
the sublime chaos of loud
meals with my wife and boys.
That’s priceless.
sterilized” intervention under
an IMF program. That sounds
about right, since the fund
has a record of preferring de-
valuation to sound money.
Putting an end to money cre-
ation and destroying excess
pesos will shrink the quantity
of money in circulation, sta-
bilize the price of the peso,
and bring down inflation.
The plan has the full sup-
port of the U.S. Treasury, and
for good reason. Since it was
launched, the peso is up
about 12% against the dollar.
Monthly core inflation was
3.3% in November, down from
7.6% in September and 4.5%
in October. If the central
bank sticks with the program,
2% monthly core inflation
will be achievable by the be-
ginning of 2019, with more
disinflation expected
throughout the year. Peso in-
terest rates have also come
down, which is a prerequisite
for a return to growth.
Many risks remain, and, as
Mr. Abram pointed out to me
last week, it is particularly
worrying that the govern-
ment aims to bring down the
fiscal deficit using a heavy
tax burden rather than mak-
ing sufficient cuts in lavish
public spending. Country
risk—which measures con-
cerns about default—is still
high.
Yet he also stressed the
importance of this crucial
first step in monetary policy.
“We need a central bank that
recovers confidence. Without
monetary stability, it’s impos-
sible to do anything.” Truer
words were never spoken.
Write to O’Grady@wsj.com.
dren’s books are out there.
There’s “Donald Drains the
Swamp” by Eric Metaxas, au-
thor of an excellent biography
of Martin Luther. And who
could resist “What’s Right,”
the story of Stumpy, a squir-
rel who learns that “expecting
handouts is wrong and work-
ing hard is right.” But you
have to seek out these sub-
versive titles like pornogra-
phy before the internet.
Liberals are devoted to di-
versity, but they define it in
a peculiar way—obsessing
over race, sex and sexual ori-
entation while demanding
conformity of thought. The
folks who put together the
Barnes & Noble display prob-
ably never considered that
there are literate Americans
who wish to expose their
children to ideas outside the
liberal orthodoxy.
Mr. Seminara is a journal-
ist and former diplomat.
Monday, December 17, 2018 | A17
BOOKSHELF | By John Donvan
Science-Fair
Confidential
The Class
By Heather Won Tesoriero
(Ballantine, 432 pages, $27)
C
ertain areas of science may be enduring new
onslaughts of disrespect lately, but at least one
scientific institution—the high-school science fair—is
acquiring a certain degree of cool. September, for example,
saw the release of “Science Fair,” an acclaimed documentary
film that follows a nail-biting competition for a $75,000
Intel-sponsored prize. The students in the documentary, who
are as combative as they are creative, obliterate (mostly)
the stereotype of socially awkward science-fair eggheads.
Furthering this narrative is Heather Won Tesoriero’s “The
Class: A Life-Changing Teacher, His World-Changing Kids,
and the Most Inventive Classroom in America,” the first full-
length book on the science-fair universe. For an entire
school year, Ms. Tesoriero followed a single group of
students from a public high school in the affluent town of
Greenwich, Conn. A half dozen of these students get most of
the spotlight, but we meet many other important characters
along the way.
Incorporating such a
large cast into a navigable
narrative is no easy task, but
Ms. Tesoriero makes it work.
She introduces us to Romano,
who quit the football team
because he was tired of his
coach’s abuse—“the biggest
mistake of your life” was the
coach’s parting shot the day
Romano walked away. We also
.
meet William, a gifted classical
ly
musician and the son of Chinese
immigrants, who in four years
completed 20 Advanced Placement
exams while getting straight As in all 10
classes he took during his junior year. There’s
Sophia, a shy freshman whose stamina is challenged by
Lyme disease—“as if her head were encased in a sinister
grip”—and Olivia, a competitive swimmer and a supremely
confident public speaker.
The students in “The Class” are further distinguished by
the projects they pursue. One wants to make a mushroom-
based battery. Another aims to devise a liquid bandage that
solidifies upon application. Sophia wants to enhance the
performance of antibiotics used against Lyme disease.
Olivia, as the book begins, has already won accolades (and
money) for creating a cheap diagnostic test for Ebola that
doesn’t require refrigeration, a critical advantage in Africa.
These students don’t play out as types. With access to
their conversations, emails and text messages, Ms. Tesoriero
discovers a disparate set of impulses compelling them to put
in the heavy hours of reading and experimentation
necessary to win a science fair. These motives range from
curiosity and natural competitiveness to altruism and
altruism’s frequent flip side: hubris. Some of these students
know they’re the smartest in the class. Not accepting the
challenge isn’t an option.
And then there’s the drive for college admission. For all
of them, being able to put a science-fair victory on their
college applications is a significant motivator. One poignant
passage in the book has William surrounded by his family
when the early decision from Harvard arrives. He has been
deferred. Ms. Tesoriero describes the scene: “shock,
bewilderment, and sadness, eyes that are at once a scream
A year spent with a group of driven, talented
students at a Connecticut high school—and the
‘life-changing’ teacher who believed in them.
and a cry,” and puzzlement at how “this destructive meteor
landed in their backyard.” But worry not for William. Today,
he attends Stanford. Indeed, the overwhelming majority of
his classmates in the science-fair program are now at
colleges and universities of similar caliber—including four at
Harvard.
“The Class” reveals that, for all the hype of the science
fair, these bright high schoolers aren’t creating world-
changing breakthroughs. Olivia’s Ebola test, for whatever
reason, isn’t the standard used in Africa today. Nor is pure
research part of a winning strategy. Instead, prizes tend to
go to projects that dazzle by “solving” newsmaking
problems—with solutions often based on existing devices or
discoveries, cobbled together in some ingenious way.
But science always builds on what’s already known, and
ingenuity is a talent to be recognized and nurtured. In that,
the students in “The Class” are lucky to have Andy
Bramante in their corner. A former industrial chemist, Mr.
Bramante quit the private sector to run the science-research
classroom at Greenwich High. He works hard, cares about
the kids and actually listens to them. He’s the “life-changing
teacher” of the book’s subtitle.
Together, the elements in this book could have produced
the standard “super teacher” storyline, but Ms. Tesoriero, an
Emmy-winning former journalist for CBS and this
newspaper, delivers something much better: a complex
portrait of the ups and downs of teaching in a culture that
undervalues what teaching delivers. Mr. Bramante, in her
account, is both filled with joy from his work with the
students and candidly resentful about being underpaid and
feeling, at times, disrespected. He shares with Ms. Tesoriero
his exasperation with overprivileged parents who insist on
special treatment for their children, and who insinuate that
he is to blame when their children don’t win top honors. He
complains bitterly about the school administrator who ducks
his request for a modest raise by suggesting he call the
district office to make the plea himself; indignant, Mr.
Bramante refuses “to grovel for four thousand dollars.” He is
hurt when a Yale professor, impressed by one of Mr.
Bramante’s students, turns to the teacher—who worked hard
to arrange the meeting—and asks, “Why are you here?” It’s
a jaw-dropping moment. By the book’s end, Mr. Bramante is
wondering whether it’s past time to find a different job.
Such portrayals add rich texture to the book. Even the
foibles of an extremely privileged community such as
Greenwich, ripe for cheap shots, aren’t overplayed. Yes,
some of those parents are truly a teacher’s nightmare, but
“The Class” leaves one believing that their lucky children—
lucky in intellectual inheritance, and lucky in the
opportunities they’ve been provided—may still be cool as
grown-ups. And maybe they will do something good in, and
with, science.
Mr. Donvan is the co-author, with Caren Zucker, of “In a
Different Key: The Story of Autism.”
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

A18 | Monday, December 17, 2018 THE WALL STREET JOURNAL.

OPINION
REVIEW & OUTLOOK LETTERS TO THE EDITOR

Criminal Justice Advances On Good Investing vs. Investing for the Good

W
ashington has been having a messy tory minimum sentences if a defendant is coop- Profs. Max M. Schanzenbach and of the beneficiaries, without regard to
and often uninformed debate about erating with law enforcement, among other Robert H. Sitkoff argue against the re- collateral benefits. Fiduciaries also
cent trend among pensions and en- must invest with risk-return objectives
whether to reform the criminal jus- conditions.
dowments to incorporate environmen- reasonably suited to the beneficiaries.
tice system in the waning days Critics then said that con- tal, social and governance (ESG) “Exclusive benefit” and “sole inter-
of the 115th Congress. The The Senate will take up victs will exploit the credits factors in their portfolio management est” fiduciary standards are time-hori-
good news is that the final a bill that learns from they aren’t entitled to com- (“‘Investing for Good’ Meets the Law,” zon dependent, and therein lies legal
product may be better follow- bined with shortened sen- op-ed, Dec. 10). They base their asser- wiggle room for fiduciaries. A pension
ing the kind of compromise GOP state experience. tences and, voila, offenders tions by applying a fiduciary standard portfolio invested on behalf of thou-
that used to be the norm in would be on the streets in half but, as they note, trustees of these sands of participants and beneficiaries
passing bills. the time. The drafters have funds must “act for the ‘exclusive’ has a very long time horizon (several
The Senate this week will take up the First since added more crimes to the exemption list benefit of the beneficiaries, consider- decades), and ESG advocates have
Step Act, a bill with cosponsors from both par- and pared back the provision that allowed for ing ‘solely’ their interests.” What the made inroads by arguing that non-ESG
ties and an endorsement from President Trump. more judicial discretion. professors fail to consider are cases investment criteria are too short-term
where an organization’s operating in- oriented and therefore not consistent
The original version of the bill passed the House This compromise is expected to clear the
terests are in direct opposition to an with prudent risk-return objectives
with more than 350 votes, and Speaker Paul Senate with more than 60 votes, though not ev- investment alternative. over the long term.
Ryan was among the backers. eryone is happy. Mr. Cotton is offering three There’s obviously a very wide range As more pension and 401(k) money
The thrust is that maybe prisoners would be amendments, including further expansions of as to what constitutes “fiduciary,” as gravitates toward a few very large in-
less likely to return to crime if they spend more the list that bans certain offenders from earning evidenced by the dispersion of hold- dex fund managers, a handful of firms
of their time in prison on education or voca- time on supervised release. His colleagues will ings (and returns) of the multitude of (including BlackRock, run by ESG en-
tional training. Current federal law allows pris- be hard-pressed to vote down adding carjacking pensions and endowments in the thusiast Larry Fink) will have collec-
oners who aren’t serving a life sentence to earn and assault to the list. world. Fund managers have discretion tive power to steer corporations to-
early release for good behavior, a low standard Ditto for amendments that would require to allocate as they deem appropriate, ward ESG goals of sustainability and
that basically means not stabbing anyone. victims to be notified if an inmate is moving and incorporating ESG criteria (or an social responsibility. “Long term” to
These are called “good time credits.” approach which is aligned with the activists pushing ESG investing is a
into a halfway house, which offers victims a
values of the institution) is perfectly time frame that looks past our termi-
The First Step Act would add “earned time chance to tell the warden if, say, the person has valid as long as there is simultaneous nal age of carbon fuels and income in-
credits,” which work as follows: Prisoners un- contacted or threatened them while in prison. consideration for generating positive equality into a future of sustainable
dergo a risk assessment, which is used in Texas The third amendment would require data on re- returns. capitalism. Non-ESG investors may do
and Georgia and considers factors like criminal arrests for those who are part of the program. Negative screens do indeed make well in spurts, but they are on the
history or behavioral tendencies. The public has the right to know how prisoners sense—for instance, one wouldn’t rea- wrong side of progressive history that
Only those deemed low or minimum risk to act once they’re released under this bill. sonably expect the American Cancer will leave carbon-based fuels stranded
society can apply these credits toward spending Then again, Mr. Cotton’s political style has Society to invest its endowment in to- in the dust.
more of the sentence in home confinement or reduced the odds his amendments will pass. He bacco stocks. In the same manner, pro- The authors argue that a flaw in
a halfway house. This doesn’t reduce a sen- has treated good-faith concessions as proof that actively investing in a manner that ESG investing is that ESG investment
tence, only where it’s served. Some 95% of pris- he was right about his colleagues wanting to let lends common cause with an organiza- criteria are highly subjective; but the
tion’s mission logically follows, partic- same argument can be made for most
oners aren’t there for life, and the point is to sex offenders and violent criminals on the
ularly when that approach is within investment strategies. The authors
help rehabilitate at least some. street. Democrats feel like they’ve made enough the bounds of fiduciary considerations also note that ESG results are mixed
The original Senate bill excluded prisoners concessions and aren’t likely to go along. The with the expectation of market-level and contextual, but so are the results

.
convicted of some 50 serious crimes from ap- votes of a couple Republicans can defeat the returns. Contrary to Profs. Schanzen- of all other investment strategies—de-

ly
plying credits toward time in a halfway house, amendments, and Mr. Cotton didn’t earn any bach and Sitkoff’s characterization, pending on the time horizon for mea-
even if prisoners are low risk. This list of crimes goodwill by insulting his colleagues as soft on ESG factor investing isn’t a pursuit of surement. Institutional managers have
was created to assuage skeptics that the many violent criminals. “collateral benefits to third parties,” been piling onto the ESG bandwagon,
violent and highly dangerous criminals in fed- The best news for the Senate, and for delib-
on but rather aligning financial position- in part because do-good investing is
eral prison won’t benefit from the bill. erative government, is that all of this can be de- ing with institutional goals. good for asset gathering and espe-
Yet the exclusions list turned into a political bated and voted on the Senate floor. Under both MICHAEL LUSTIG cially appealing to next-generation in-
nightmare, as critics like Tom Cotton of Arkan- parties, the Senate has become a leadership- New York vestors. A long-term investment hori-
zon will be advanced in court as the
us l,

sas focused on dangerous crimes that didn’t driven body with too little opportunity for real
The law constrains the actions of raison d’être of ESG investing.
make the roster. The reality is that prisoners debate. GOP Leader Mitch McConnell deserves trustees and other fiduciaries who DAVE GLENN
who aren’t excluded from earning credits aren’t credit for bringing the bill forward.
al a
e
must invest for the exclusive benefit Orlando, Fla.
automatically entitled to them. Inmates must Many on the right don’t want to consider any
first be deemed low risk. change in criminal laws despite reforms in
ci on

The Senate and White House also added sen- states that have reduced prison populations
tencing reforms, most of which aren’t contro- without increasing the crime rate. Politically
versial, such as retroactive reductions for those this cedes the issue to the left, which wants far
Progressive Privilege Prejudice and the U.N.
sentenced unfairly for crack cocaine. Yet some more lenient punishments that would threaten Dovid Efune refutes criticism from husbands, fathers, sons and male em-
on the right didn’t like expanding the legal public safety. Republicans have a use-it-or-lose- journalists who are skeptical about ployers when making decisions and
er rs

President Trump’s nomination of for- casting votes. Researchers who stud-

“safety valve” that allows relief from manda- it moment to show they have better ideas.
mer journalist Heather Nauert to be ied voting patterns of women con-
U.S. ambassador to the United Na- cluded that white women married to

The Heart of Texas? tions (“Nauert Gives Hope to Journal- men who vote for Republicans do so
m e

ists,” op-ed, Dec. 13). However, the because the GOP supports policies

T
criticism of Ms. Nauert’s qualifica- that protect the economic interests of
he midterm election results in Texas party job. The excuse is that Islam is in contradic- tions has little to do with her career their husbands and improve the mar-
m rp

weren’t exactly an occasion for Republi- tion with American values and the party. in journalism and much to do with ried couple’s status.
can whoopin’ and hollerin’. Ted Cruz nar- That this faction’s initiative is an ugly post- journalists’ bias against conservative Journalists cannot attack Ms. Nau-
rowly held his Senate seat election look for the party isn’t women in positions of authority. ert directly for her demographic
against Beto O’Rourke, and Shahid Shafi knows lost on its leadership. Dr. Shafi There is an assumption on the left characteristics or her Fox News back-
previously secure House Mem- has received support from that a woman isn’t normal unless ground, so they malign her for being
America better than
co Fo

she’s a liberal Democrat, and criti- “just a journalist.” Why give any cre-
bers such as John Culberson Senator Cruz, Texas land com-
cism of Ms. Nauert’s capabilities is dence to a critique for being just a
and Pete Sessions lost in the many other Republicans. missioner George P. Bush and driven by the progressive ideological journalist that comes from just a
suburbs. We’re going to guess the county chairman who ap- privilege of many in the media who journalist?
the last thing most Texas Re- pointed him. marginalize conservative women. ROGER LARSON
publicans thought they needed now is a contro- Dr. Shafi for his part isn’t put off by the mini- Had Hillary Clinton won the 2016 Greenville, S.C.
versy over Shahid Shafi. revolt. He says, “Anyone wondering if one can election and nominated, say, CNN’s
Dr. Shafi came to the U.S. from Pakistan in 1990, be a practicing Muslim, which I am, a good Christiane Amanpour to be ambassa-
is a surgeon, and is vice chairman of the Republi- American, which I am, and a Republican, which dor to the U.N., would CNN commen- People In Some Jobs Last
can Party in Tarrant County, which includes Fort I am—I’m a living example that one can be all tators be disparaging her for lack of
relevant experience? Conservative
Longer Than You’d Think
Worth. A faction of local Republicans are seeking three.”
a recall vote next month to turn him out of his We hope he wins the recall vote. commentators who might foolishly Regarding Ron Faucheux’s “The
hammer her for being just a liberal Presidency Can Add Years to Your
journalist would be pilloried for con- Life” (op-ed, Dec. 10): In the era of
n-

Texas ObamaCare Blunder cealing their sexism in an attack on a

journalist with tremendous knowl-
Democrat versus Republican races
(1856 to the present), individuals who

N
edge of international affairs. sought and eventually won the presi-
o one opposes ObamaCare more than we The Affordable Care Act has also been up and The ideological privilege of liberals dency lived on average 75.1 years.
no

do, and Democrats are now confirming running since 2014, which means so-called reli- allows the left to stereotype white, Those who were nominated but never
that it was designed as a way-station to ance interests come into play when considering married women (30% of the elector- achieved the office managed only
government-run health care. a precedent. Millions of people ate) as susceptible to influence from 70.9 years. As if the reputational hit
But a federal judge’s ruling Fri- A judge’s ruling will be now rely on ObamaCare’s sub- for running and never winning
day that the law is unconstitu- weren’t bad enough.
tional is likely to be overturned
overturned and could sidies and rules, which argues
against judges repealing the Many Benefit-Eligibility EVERETT WATERS
Setauket, N.Y.
on appeal and may boomerang backfire on Republicans. law by fiat. Standards Poorly Enforced
politically on Republicans. Judge O’Connor breezes It is very disheartening to read If you can’t be president of the
Judge Reed O’Connor ruled past this like a liberal Ninth Robert Doar’s analysis of how today’s U.S., the next best thing may be to be
for some 20 state plaintiffs that the Affordable Circuit appeals judge handling a Donald Trump “means tested” welfare programs are a Nobel laureate in economics from
Care Act’s individual mandate is no longer legal appeal. He’s right that Democrats claimed the being mismanaged at the local, state the U.S. Of the 25 U.S.-based laure-
because Republicans repealed its financial pen- individual mandate was essential to the Afford- and federal levels (“‘Means Tested’ ates in economics who have passed
alty as part of the 2017 tax reform. Recall that able Care Act. But when Congress killed the fi- Welfare Means Nothing in Practice,” away, 12 lived to be over 90, and
Chief Justice John Roberts joined four Justices nancial penalty in 2017 it left the rest of Obama- op-ed, Dec. 12). I am a former federal seven of those reached 94 or 95.
to say ObamaCare’s mandate was illegal as a Care intact. When judging congressional intent, official responsible for oversight of However, the honor of the longest-
command to individuals to buy insurance under a judge must account for the amending Congress many grant programs. It is especially lived Nobel laureate in economics
disappointing because we know that, goes to Ronald Coase of the U.K., who
the Commerce Clause. “The Framers gave Con- as well as the original Congress.
with proper and accountable empha- was 102 at his death.
gress the power to regulate commerce, not to In any case, the Supreme Court’s “severabil- ses, welfare fraud can be reduced JEFF COMBS
compel it,” he wrote. ity” doctrine calls for restraint in declaring an significantly. Roswell, Ga.
Yet the Chief famously salvaged ObamaCare entire law illegal merely because one part of it For example, when President Nixon
by unilaterally rewriting the mandate to be a is. Our guess is that even the right-leaning Fifth was re-elected in 1972, he believed
“tax” that was within Congress’s power. Never Circuit Court of Appeals judges will overturn that eligibility for welfare (then Aid Pepper ...
mind that Democrats had expressly said the pen- Judge O’Connor on this point. to Families With Dependent Children,
alty was not a tax. Majority Leader Roberts de- As for the politics, Democrats claim to be now Temporary Assistance for Needy
And Salt
clared it to be so. alarmed by the ruling but the truth is they’re Families) and Medicaid needed more THE WALL STREET JOURNAL
Enter Texas Attorney General Ken Paxton, elated. They want to use it to further pound Re- federal scrutiny. He brought some of
who argues in Texas v. U.S. that since Congress publicans for denying health insurance for pre- then-Gov. Ronald Reagan’s key Cali-
fornia welfare officials to Washing-
has repealed the mandate, the tax is no longer existing conditions if the law is overturned.
ton. They initiated quality-control
a tax, and ObamaCare is thus illegal. Judge Democrats campaigned across the country programs for welfare and Medicaid to
O’Connor agreed with that logic, and he went against Mr. Paxton’s lawsuit to gain House and emphasize that recipient fraud would
further in ruling that since Congress said the Senate seats in November, and they will now not be tolerated.
mandate is crucial to the structure of Obama- press votes in Congress so they can compound It’s sad that today’s administrators
Care, then all of ObamaCare must fall along with the gains in 2020. loosen standards and don’t enforce
the mandate. President Trump hailed the ruling in a tweet, them.
We’ll admit to a certain satisfaction in seeing but he has never understood the Affordable Care CHARLES GALE
the Chief Justice hoist on his own logic. But his Act. His Administration has done good work re- Hollywood, Fla.
ruling in NFIB v. Sebelius was in 2012 and there vising regulations to reduce health-care costs
is more at issue legally now than the “tax” issue and increase access, but the risk is that the law- Letters intended for publication should
in that opinion. One legal complication is that suit will cause Republicans in Congress to panic be addressed to: The Editor, 1211 Avenue
of the Americas, New York, NY 10036,
Congress in 2017 repealed the financial part of politically and strike a deal with Democrats that or emailed to wsj.ltrs@wsj.com. Please
the individual mandate, not the structure of the reinforces ObamaCare. This is what happens include your city and state. All letters
mandate itself. Republicans used budget rules when conservatives fall into the liberal trap of are subject to editing, and unpublished “The number of Christmas cards
to pass tax reform so they couldn’t repeal the thinking they can use the courts to achieve pol- letters can be neither acknowledged nor this year is down 14%. Is that
returned.
mandate’s express language. icy goals that need to be won in Congress. an economic indicator?”
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Germans,
Take a Stand
Against Nord
Stream 2
By Richard A. Grenell
R
Berlin
ussia’s recent aggression in the
Sea of Azov reminds us of the
need for vigilance against
Vladimir Putin’s malign activities.
The U.S. and Germany have re-
sponded by strongly condemning
Moscow’s blockade of the Kerch
Strait, a clear violation of interna-
tional law. While we appreciate Ger-
many’s support for European solidar-
ity, action should be taken to show
Russia that its aggressions have con-
sequences.
With this in mind, we ask Berlin to
join the chorus of nations that view
Gazprom’s Nord Stream 2 pipeline
project for what it is—an affront to
Europe’s energy and national-secu-
rity goals.
The pipeline project would
aggravate dependence on
Russia, harming European
states’ national security.
Russia’s actions highlight the dan-
ger of giving Moscow more sway
over Germany’s energy supply. In
2017 Germans imported more than
50% of their natural gas from Russia.
If Nord Stream 2 is built, bypassing
our Eastern European allies, it is
bound to increase Germany’s reliance
on Russia even further. Russian influ-
ence would flow through the pipeline
along with gas.
And what would flow the other
way? Billions of euros that would
support Moscow’s destabilizing for-
eign policy, including its increasingly
aggressive posture along NATO’s
eastern flank. We hope Germany pur-
sues other supply options that would
drive a competitive natural-gas mar-
ket, rather than help Mr. Putin domi-
nate the market.
If built, Nord Stream 2 and a sec-
ond line of TurkStream would allow
Russian gas to bypass Ukraine and
undermine its security. That’s clearly
what Mr. Putin wants. Nord Stream 2
would open the door to increased ag-
gression against Kiev, since Moscow
would no longer have to worry about
how its activities could affect its gas
sales to Western Europe. The Ukrai-
nian government would also lose bil-
lions in essential gas-transit in-
come—a sum roughly equivalent to
Kiev’s entire defense budget. We wel-
come the commitment of Germany’s
chancellor to ensure that gas delivery
through Ukraine will continue. Unfor-
tunately, time and again Russia has
demonstrated it cannot be trusted to
uphold its promises or its contractual
obligations.
Ukraine has no greater friend than
the U.S. in the face of continued Rus-
sian aggression. Europe should send
Moscow that clear message, too. The
U.S. will continue its decades of
strong support for the European goal
of energy security through diversifica-
tion. The latest Russian provocations
show how urgent this effort is. Many
no
German policy leaders already recog-
nize this reality. Leading Bundestag
members from the Christian Demo-
cratic Union and Green Party have
called for a restriction on Russian gas
imports to Germany. That would be a
step in the right direction.
Germany has made tireless efforts
to resolve tensions between Russia
and Ukraine through diplomacy. Now
it is uniquely placed to use its politi-
cal and economic clout to hold Russia
accountable for its actions. By taking
a tough stance through action on
Nord Stream 2, Germans can show
that they stand in solidarity with
Ukraine and the rest of Europe, and
that Mr. Putin won’t get away with
continued aggression.
Mr. Grenell is U.S. ambassador to
Germany.
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Fed Tightening? Not Now
By Stanley F. Druckenmiller
And Kevin Warsh
A
round Oct. 1, global cen-
tral-bank liquidity re-
versed and stocks began
their descent from peak
prices. That is no coinci-
dence. The Federal Reserve should
take an important signal from re-
cent developments at its meeting
this week.
The Fed created quantitative eas-
ing as a novel crisis-response tool a
decade ago. It bought assets from
the public and stocked them away
for safekeeping. Market participants
understood the not-so-subtle mes-
sage: The Fed had investors’ backs.
The stock market rallied. The cost of
credit fell. And the business and fi-
nancial cycles charged ahead.
The crisis ended in the U.S. in
early 2010, but central-bank asset
purchases did not. Other large cen-
tral banks—the European Central
Bank, the Bank of Japan and the
Bank of England—followed the Fed’s
lead. Together they amassed more
than $11 trillion of additional stocks,
bonds and other financial assets.
In unheralded news a couple of
months ago, quantitative easing gave
way to global quantitative tightening
as central banks withdrew overall li-
quidity from the market. True, the
Fed had begun to taper its balance-
sheet holdings 15 months earlier, but
that was more than offset by other
central banks’ still-growing asset
purchases.
As we head into 2019, quantitative
tightening is expected to accelerate.
It has been paired with expectations
of interest-rate increases from the
Fed—and the timing could scarcely
be worse. on
Economic growth outside the U.S.
decelerated over the past three
months. Global trade growth also
slowed markedly, running about one-
us l,
third lower than earlier in the year.
Growth in some important econo-
al a
e
mies, like China, is significantly
weaker. No ocean is large enough to
insulate the U.S. economy from slow-
ci on
downs abroad. And no forecasting
model adequately captures the spill-
overs and spillbacks between the U.S.
economy and the rest of the world.
er rs
The Yellow Jackets Are Right About Green Policies
m e
By George Melloan
S
eek out the most basic cause of
m rp
the French riots and you’ll
come to a bizarre answer: car-
bon dioxide. More specifically, the
demonization by political activists of
that vital element of the earth’s at-
co Fo
mosphere.
French President Emmanuel Ma-
cron stirred popular rage by trying to
raise the gasoline tax by about 25
cents a gallon. He argued that higher
taxes would reduce fuel use and
hence emissions of CO2, helping
France meet the lower emissions
goals to which it is pledged as a sig-
natory to the United Nations’ Paris
Agreement to fight climate change.
Mr. Macron has learned the hard
way that voters don’t see climate
change as a threat demanding per-
n-
sonal sacrifices. The rebellion is
global. Green measures that caused
energy prices to soar damaged Chan-
cellor Angela Merkel in Germany’s
2017 election. Green energy plans
were repudiated by voters in Austra-
lia and helped cause a political up-
heaval in the Canadian province of
Ontario.
Voters in Washington state and
Arizona rejected November ballot
measures aimed at reducing CO2
emissions. The Journal’s William
McGurn reported last week that 200
prominent civil-rights leaders have
filed suit against the California Air
Resources Board. Green policies, they
argue, are saddling the poor with
higher living costs.
The voter rebellion is on solid sci-
entific ground. The global expendi-
ture to curb CO2 emissions, esti-
mated in 2009 by Danish scientist
Bjorn Lomborg to cost $180 billion a
year, stems from the U.N.-engineered
1997 Kyoto Protocol. That treaty was
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OPINION
U.S. financial-market indicators
also signal caution. Market prices
may be showing their true colors for
the first time since QE’s expansion.
These indicators aren’t foolproof, but
they have a better track record than
economists. Bank stocks are down
about 15% since Oct. 1. Other eco-
nomically sensitive sectors, like
housing, transport and industrials,
The central bank should
pause its double-barreled
blitz of higher interest
rates and tighter liquidity.
are down by double digits, underper-
forming the broader markets. Credit
markets are softening, and the de-
cline in major commodity prices is
foreboding.
These indicators are at odds with
strong U.S. economic growth for
2018, which will come in at around
3.25%. Labor markets also remain
strong, although they too are a lag-
ging indicator.
The new Fed leadership team
faces the most difficult challenge
since Chairman Ben Bernanke and
his team confronted shocks to the
financial system in 2007-08. They
deserve forbearance, not censure.
always about politics, not science. In
recent years global weather stations
have measured ups and downs, but
data from U.S. and British monitoring
agencies showed that global temper-
atures in 2017 were roughly what
they were 20 years earlier.
Climatology is mostly guesswork.
There’s no way to conduct a con-
trolled experiment to ascertain scien-
tific validity. Climatologists have
learned a lot about climate and
weather in the past century, but actu-
ally controlling the climate is some-
thing else entirely.
In a lecture this year, Massachu-
setts Institute of Technology meteo-
rologist Richard Lindzen posited two
immense, complex and turbulent flu-
ids—the oceans and the air in the at-
mosphere—are in constant reaction
with each other and the land, causing
what we experience as storms and
temperature changes. Variations in
the sun’s radiation and the rotation
of the planet play parts as well. And
yet, he said, climate modelers claim
that only one tiny component of this
enormous churning mass, CO2, con-
trols the planet’s climate.
This borders on “magical think-
ing,” he said, and yet it is a narrative
that has been widely accepted. The
story begins with Maurice Strong, a
Canadian oil tycoon who believed the
Club of Rome’s doomsday forecast in
1972 that a rising global population
would soon exhaust the planet’s re-
sources. Strong persuaded the U.N. to
Requiem for a Doorman
By Bob Brody
H
e worked the door at my
apartment building for more
than 30 years. Everyone who
knew him loved him. Now, too soon,
he’s gone.
Carlos Nino came to the U.S. from
Colombia at age 18. He had little
money and education. But he kept
two jobs to support his family and
put both his sons, Jason and Ken-
neth, through college.
I knew him for more than 40
years. He started as a porter, then
graduated to doorman. He greeted
tenants and visitors alike with a
smile and a warm hello. He stooped
low to talk to babies and little kids.
He ran outside to help elderly people
carrying bags of groceries.
Some doormen become family. We
talked about our children. Carlos
once told me his eldest son Jason,
just out of law school, was already
earning twice as much as he. You
could see the pride radiating from his
face.
A few years ago, Carlos told me
his wife was suffering from breast
Monday, December 17, 2018 | A19
PHIL FOSTER
But time is tolling, and the Fed is
well-advised to break from the old
regime.
The Fed should worry less about
fine-tuning its communications
strategy and more about getting pol-
icy right. In recent months, Chair-
man Jerome Powell stepped up out-
reach to Congress and other
interested parties. He spoke with re-
freshing humility about the appro-
priate policy rate setting. And he
prudently scaled back on the kind of
pinpoint forecasts his predecessors
made. These moves, while welcome,
are insufficient.
In response to market tumult, the
Fed governors recently hinted at less
enthusiasm for rate increases next
.
year. The new forward guidance is
ly
different from what they signaled in
September. But it is no more reli-
able. The Fed should stop this op-
tion-limiting exercise entirely. And if
data dependence is the Fed’s new
mantra, it should actually incorpo-
rate recent data into its forthcoming
policy decision.
The Fed’s balance sheet is where
the money is. Yet it has provided lit-
tle additional clarity on its balance-
sheet plans since Chair Janet Yellen’s
tenure. At a time of global quantita-
tive tightening and uncertain eco-
nomic prospects, the Fed’s silence on
its asset holdings is contributing to
the tumult. We were assured by pol-
put him in charge of an environmen-
tal program to save the planet.
In the 1980s, the Reagan State De-
partment, seeking to get more sci-
ence into the climate debate, prodded
the U.N. to create the Intergovern-
mental Panel on Climate Change. Its
mission was to assemble scientists
and assess whether mankind was
having an effect on climate. The first
assessment, in 1990, could find no
“signal” of such an effect. Neither
could the second assessment, in 1995.
They have distinguished
company in questioning
the science behind
climate-change dogma.
But the U.N. issued a separate “report
to policy makers” saying essentially
the opposite—human activity is mak-
ing the climate hotter.
Frederick Seitz—a pioneer in
solid-state physics, former president
of the National Academy of Sciences
and recipient of the National Medal
of Science—was furious. He wrote an
op-ed for the Journal in June 1996 al-
leging the report had been edited af-
ter being peer reviewed “to deceive
policy makers and the public into be-
lieving that the scientific evidence
shows human activities are causing
global warming.” He and some col-
cancer. He planned to retire soon to
help care for her. The weekend before
he left, I stationed myself in our
lobby with an oversize greeting card
and asked residents passing by for
signatures and messages.
Carlos was an immigrant
who put his heart into his
job every day and touched
more lives than he knew.
Within hours the card was full and
I had to go buy another. The same
happened to a second card, and then
to a third. After three days, more
than 100 well-wishers had bid him
goodbye.
On his last day at the door I
handed him the cards. He touched his
hand to his heart. He had no idea
what to say, and so he said nothing—
and everything.
We stayed in touch, and I learned
his wife’s cancer was in remission.
But Carlos himself became sick. His
icy makers that QE provided large
benefits to the real economy. If so,
won’t its reversal in the form of QT
come with a cost? It can’t all be rain-
bows and unicorns.
In a first-best world, the Fed
would have stopped QE in 2010. It
might then have mitigated asset-
price inflation, a government-debt
explosion, a boom in covenant-free
corporate debt, and unearned-wealth
inequality. It might also have avoided
sowing the seeds of future financial
distress. Booms and busts take the
Fed furthest from its policy objec-
tives of stable prices and maximum
sustainable employment.
In a second-best world, on Mr.
Powell’s arrival in February 2018, the
Fed would have shrunk its balance
sheet with speed and determination
before raising rates. The economic
expansion was still gaining traction
at home and abroad. Tax and regula-
tory reforms were jolting the supply
side of the economy from its slum-
ber. Accelerated Fed QT, in the ab-
sence of rate rises, would have been
much less disruptive to the real
economy. Asset prices could then
have found a more durable equilib-
rium and laid a stronger foundation
for future growth.
The time to be dovish was when
the crisis struck and the economy
needed extraordinary monetary ac-
commodation. The time to be more
hawkish was earlier in this decade,
when the economic cycle had a long
runway, the global economy ample
momentum, and the future consider-
ably more promise than peril.
This is a time for choosing. We
believe the U.S. economy can sustain
strong performance next year, but it
can ill afford a major policy error, ei-
ther from the Fed or the rest of the
administration. Given recent eco-
nomic and market developments, the
Fed should cease—for now—its dou-
ble-barreled blitz of higher interest
rates and tighter liquidity.
Mr. Druckenmiller is chairman
and CEO of Duquesne Family Office
LLC. Mr. Warsh, a former member of
the Federal Reserve Board, is a dis-
tinguished visiting fellow in econom-
ics at Stanford University’s Hoover
Institution.
leagues circulated a petition to Con-
gress with their complaint and ulti-
mately received the signatures of
more than 32,000 scientists and engi-
neers.
Nevertheless, Strong and his
American allies President Clinton and
Vice President Al Gore, who were
then seeking a big tax on energy, took
the climate-change ball and ran with
it. They engineered the Kyoto Proto-
col, in which 37 industrial nations
and the European Union pledged
drastic reductions in emissions of
CO2. Although Mr. Gore signed the
pact, it was never ratified by Con-
gress. President Trump pulled out of
the Paris Accords, the follow-on to
Kyoto, shortly after taking office,
calling the whole thing a “hoax.”
Maurice Strong died in 2015.
What’s happened to this “fragile”
planet in the 46 years since he raised
the climate alarm? According to a
NASA satellite survey, the Earth has
gotten greener, thanks in large part
to a rising concentration of that vital
plant food CO2. That means we are
able not only to feed an expanded
population but give the poorest
among us a more nutritious diet. The
French strikers have a better grip on
reality than their ruling elites.
Mr. Melloan is a former deputy ed-
itor of the Journal editorial page. His
book about the costs of bogus science
will soon be published by Lyons
Press.
kidneys were failing. It was as if he
had relieved his wife’s suffering by
taking it on himself.
I never saw him again. The last
time we spoke by phone, he assured
me his health was improving. As
proof, he pointed out he had man-
aged a walk around the block that af-
ternoon. Word of his death, in Co-
lombia at age 64, came to me
through a fellow doorman.
Carlos was not only a dear man
but also a great doorman, a classic
case of how your job is what you de-
cide to make of it. He felt privileged
to be a doorman and put his heart
into his job every day. His is the story
of an immigrant dream come true.
Carlos wanted to earn his keep
and be of service. But some people
are put on earth to show us how to
be. He taught all who knew him an
important lesson: Try to do some
good—and do it while you still can.
Mr. Brody, an executive and essay-
ist in New York City, is the author of
the memoir “Playing Catch With
Strangers: A Family Guy (Reluc-
tantly) Comes Of Age.”
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

A20 | Monday, December 17, 2018 THE WALL STREET JOURNAL.

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ci on
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Inspired by chefs.
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Created for you.

Michelin Three StarChef ChristopherKostow
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© 2018 Samsung Electronics America, Inc.

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TECHNOLOGY: RAPPER TAKES LEGAL STEPS AGAINST ‘FORTNITE’ DANCE MOVES B4

BUSINESS & FINANCE

© 2018 Dow Jones & Company. All Rights Reserved. * * * * THE WALL STREET JOURNAL. Monday, December 17, 2018 | B1

Last Week: S&P 2599.95 g 1.26% S&P FIN g 3.54% S&P IT g 0.02% DJ TRANS g 4.39% WSJ $ IDX À 0.65% LIBOR 3M 2.801 NIKKEI 21374.83 g 1.40% See more at WSJMarkets.com

Higher Rates Pinch Small Banks
Bigger Is Better
Share of banks posting each
year-over-year change in net
interest margin for third quarter
Fell Flat
Rose No data
Large and midcap banks
Small-cap banks
0% 25 50
Note: Analysis includes publicly traded banks
without mergers.
Source: FIG Partners
THE WALL STREET JOURNAL.
BY RACHEL LOUISE ENSIGN
AND ALLISON PRANG
Rising interest rates were
supposed to help banks. They
are hurting many of them in-
stead.
Three years after the Fed-
eral Reserve began raising
rates from near zero, bank
customers are starting to de-
mand more interest on their
deposits, particularly at small
and regional U.S. banks. Many
75 100 of these same banks ramped
up lending after the financial
crisis by adding long-term,
low-rate loans. Now, as they
pay out more to depositors,
the rates they are earning on
loans are barely moving.
Pinched banks can be found
across the country. They in-
clude 34-branch Banc of Cali-
fornia Inc., where interest
costs rose 68% over the last
year as it paid up to attract de-
positors; Southern National
Bancorp of Virginia Inc.,
which is now paying 2.25% in-
terest on certain checking ac-
counts while national lenders
continue to pay effectively 0%,
and New York Community
Bancorp Inc., whose deposit
costs are rising faster than the
yields on its loans for city
apartment buildings.
Overall, profit margins from
lending are still rising at banks
of all sizes. But at many small
banks, the metric has started
to go in the opposite direction.
Net interest margin, which is a
key profit metric, fell at nearly
half of a sample of small U.S.
banks in the third quarter
from a year earlier, according
to an analysis from investment
bank FIG Partners LLC.
It is the latest sign of a
growing divide between large
and small financial institutions.
Big banks have spent billions
of dollars developing mobile
apps and other technology to
attract and keep customers
without paying higher rates.
Renault
Pressures
They also added loans to their
balance sheets that benefit
when rates go up.
Nissan on
Smaller banks face a more
immediate need to raise de-
posit rates. These banks use
Alliance
more of their deposits to make BY NICK KOSTOV
loans, meaning a loss of cus-
tomers could jeopardize their PARIS—Renault SA is
ability to cheaply fund that pressing Nissan Motor Co. to
lending. Their depositors often open a discussion into the bal-
skew toward business ac- ance of power atop the Japa-
counts and consumers with nese auto maker after prose-
certificates of deposit, two cutors charged its former
groups that tend to keep a chairman, Carlos Ghosn, and
close eye on rates. the Japanese firm with finan-
The pressure to raise rates cial misconduct.
Please turn to page B2 Thierry Bolloré, deputy
chief executive of Renault,
which owns 43.4% of Nissan,

A Founder A Boeing Production Plant Lands in China sent a letter dated Dec. 14 to
Nissan CEO Hiroto Saikawa
urging him to call a share-

Of Popular holder meeting “as promptly

as practicable” that would al-
low a discussion of Renault’s

Trivia App representation on Nissan’s

nine-member board and within
the ranks of its top managers.

Dies at 34 Nissan’s board, which meets

.
Monday, has been without a

ly
chairman since Japanese pros-
BY MELANIE GRAYCE WEST ecutors, acting on a tip from
AND ZOLAN KANNO-YOUNGS Nissan, arrested Mr. Ghosn on
on suspicion of financial miscon-
NEW YORK—Colin Kroll, duct. Nissan then ousted Mr.
co-founder of the HQ Trivia Ghosn as chairman.
web app, was found dead of an The Japanese auto maker’s
apparent drug overdose Sun- “indictment creates significant
us l,

day morning in his Manhattan risks to Renault, as Nissan’s

apartment, authorities said. largest shareholder, and to the
al a
e
Mr. Kroll, a well-known stability of our industrial alli-
technology executive, ance,” Mr. Bolloré wrote in the
launched HQ Trivia in August letter. “We believe a share-
ci on

2017, with the app quickly be- holder forum would be the
coming a pastime for thou- best manner of addressing
sands of people who sought to these matters in an open and
win cash for correctly answer- transparent fashion.”
ing trivia questions. Renault hasn’t received a
er rs

“We learned today of the response from Mr. Saikawa, a

passing of our friend and person familiar with the mat-
THOMAS PETER/REUTERS

founder, Colin Kroll, and it’s ter said. Nissan didn’t respond
with deep sadness that we say to requests for comment.
m e

goodbye,” HQ Trivia tweeted. The letter is a sign of how

“Our thoughts go out to his the arrest of Mr. Ghosn—once
family, friends and loved ones the glue that held the compa-
m rp

during this incredibly difficult nies together—is testing the

time.” TAKEOFF: The first finished jet, a 737 Max, rolled off the line of Boeing’s new facility in Zhoushan on Saturday. The center paints and Please turn to page B2
Before co-founding HQ fits interiors and is intended to cater to the aircraft maker’s top export market while steering clear of trade tensions. B3
Trivia, Mr. Kroll, who was 34
years old, founded video app
INSIDE
co Fo

Vine, which was sold in 2012 to

Twitter Inc., which later closed
it. Before that, he was chief
technology officer at Jetsetter,
an engineering manager at Ya-
hoo Inc. and a software man-
ager at Right Media, according
to his LinkedIn biography.
HQ Trivia, a twice-daily on-
line quiz show whose co-
founder is Rus Yusupov, was
initially a big success—among
the most popular apps on Ap-
ple. In one notable event that
Boom in Oil IPOs Fails to Erupt in Mideast
BY CHRISTOPHER ALESSI
AND SUMMER SAID
The Persian Gulf was poised
this year for a financial revo-
lution that never arrived.
After Saudi Arabia’s na-
tional oil company launched
plans for the world’s biggest
n-
public offerings in recent
years, only one has material-
ized—a 10% flotation of a
piece of Abu Dhabi National
Oil Co. in the second half of
last year. The company listed a
portion of its fuel-retailing
business, known as Adnoc Dis-
tribution, on the Abu Dhabi
A higher crude price “does
take off the urgency for re-
form,” said Robin Mills, chief
executive at Dubai-based con-
sulting firm Qamar Energy.
The spate of potential pub-
lic offerings was expected to
provide a boon for big global
investment banks doing busi-
Aramco’s, were part of reform
plans launched when oil prices
were mired below $50 a barrel
in the wake of the price crash
of late 2014. Petroleum-depen-
dent Middle East countries
were trying to diversify their
economies, and many hoped to
HERE’S THE
sell investors on the notion DIRT ON ROBOT

year, the game show on a Sun-

day drew 680,000 players to
click on the iPhone app at cer-
tain set times. The game’s pop-
no
public offering in early 2016, a
wave of energy-related IPOs
was supposed to sweep across
the region, transforming many
stock exchange and raised
$851 million.
A rebound in oil prices
from their 2015 lows helped
ness in the region. HSBC
Holdings PLC, Morgan Stan-
ley and JPMorgan Chase &
Co. all did IPO preparation
that they planned to make
state-operated enterprises
VACUUMS
more efficient, accountable
and competitive. Aramco’s IPO PERSONAL TECHNOLOGY, B4

ularity has subsequently de-
creased.
The medical examiner
hasn’t determined an official
cause of death. Officers found
cocaine and heroin near Mr.
Kroll’s body, leading them to
believe he died of a drug over-
dose.
traditionally statist oil compa-
nies. But the partial privatiza-
tion of Saudi Arabian Oil Co.,
better known as Aramco, was
put on hold, creating ripple ef-
fects across the Gulf.
Of the nine other Middle
Eastern state-owned energy
companies that announced
erase much of the economic
incentive for public stock of-
ferings. Even with the recent
crude slump, oil prices are
roughly 30% higher than the
lows from that year. On Thurs-
day, Brent crude—the global
benchmark—was trading up
about 0.5% at $60.45.
work for Aramco and handled
the Adnoc listing. But the
other deals haven’t gotten far
enough for bankers to get in-
volved—a sign of how quickly
the projects were shelved, ac-
cording to people familiar
with the matter.
The planned IPOs, including
was supposed to be the cen-
terpiece of Saudi Crown Prince
Mohammed bin Salman’s plan
PATENT SUITS
to diversify Saudi Arabia’s TURNED OUT
economy beyond oil.
More recently, Saudi utility
TO BE BAD IDEA
giant ACWA Power, Oman Oil
Co., Omani drilling company SMALL BUSINESS, B5
Please turn to page B9

Midcap companies:
Carry like a minivan. Corner like a roadster.
MDY
MDY, the SPDR® S&P Midcap 400® ETF, invests in midcap powerhouses – still growth-hungry,
but grown-up enough not to be a flash in the pan. And it has beaten 85% of the Morningstar THE
U.S. Mid-Cap Blend Category over the last 3, 5 and 10 years. spdrs.com/MDY MIGHTY
MDY is one of many first-to-market ETFs from State Street Global Advisors. MIDCAP

Source: Morningstar as of 9/30/18. Based on funds in the Morningstar Mid-Cap Blend Category (oldest share class). Rankings are based on returns after taxes that are net of all fees, maximum federal tax rate (39.6%) and applicable sales loads. Rankings
reflecting lower tax rates may have resulted in less favorable results for exchange traded funds due to their tax efficiency. Universe: 151 funds for 3 years, 135 funds for 5 years, and 112 funds for 10 years. MDY’s 1 year peer group percentile is 28% (51 of 179 funds).
Past performance is no guarantee of future results.
ETFs trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETF’s net asset value. ETF shares may not readily trade in all market conditions. Brokerage commissions and ETF expenses will reduce returns.
Investments in mid-sized companies may involve greater risks than those in larger, better known companies, but may be less volatile than investments in smaller companies.
©2018 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar
nor its content providers are responsible for any damages or losses arising from any use of this information.
SPDR® S&P MidCap 400® ETF Trust, a unit investment trust, is listed on NYSE Arca, Inc.
SPDR®, S&P and S&P MidCap 400 are registered trademarks of Standard & Poor’s Financial Services LLC, a division of S&P Global (“S&P”) and have been licensed for use by State Street Corporation. No financial product offered by State Street or its
affiliates is sponsored, endorsed, sold or promoted by S&P.
ALPS Distributors, Inc. (fund distributor); State Street Global Advisors Funds Distributors, LLC (marketing agent).
State Street Global Advisors and its affiliates have not taken into consideration the circumstances of any particular investor in producing this material and are not making an investment recommendation or acting in fiduciary capacity in connection with the
provision of the information contained herein.
Before investing, consider the funds’ investment objectives, risks, charges and expenses. To obtain a prospectus or summary prospectus, which contains this and other information,
call 1.866.787.2257 or visit www.spdrs.com. Read it carefully.
2273729.1.1.AM.RTL Not FDIC Insured • No Bank Guarantee • May Lose Value
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

B2 | Monday, December 17, 2018 * *** THE WALL STREET JOURNAL.

INDEX TO BUSINESSES BUSINESS & FINANCE

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.

A
Abraj Energy Services
.....................................B9
Abu Dhabi National Oil
.....................................B1
ACWA Power..............B1
Adnoc Distribution ..... B1
Adobe ........................ B10
Airbus..........................B3
Air China.....................B3
Amazon.com...A1,B10,R6
AT&T............................B2
B Katanga Mining..........B2
BabyQuip.....................R1
Banc of California.......B1
Bayer.........................B10
Best Buy ................... B10
Boeing ......................... B3
C Shipping & Transit......B5
China Literature..........B9
Cinemark Holdings ..... B9
Comcast.......................B2
D M
Deloitte ....................... B3
E McKinsey.....................A3
Electronic
Communications
Technologies.............B5
Epic Games ................. B4
F Distribution...............B9
Fastenal ...................... A2
G Netflix.........................B4
General Electric.....A2,B3
INDEX TO PEOPLE
A H
al-Falih, Khalid............B9
Ambwani, Shawn........B5
Amis, Doug ................. R1
B Jones, Martin Kelly....B5
Bailey, Eric..................R6
Beattie, Geoff.............B3
Bolloré, Thierry...........B1
Bruns, John.................B3
D Swain, Philip...............B5
DeSpirito, Tony...........A2
Dimon, James.............A2
Glencore ...................... B2
H
HSBC Holdings............B1
I BY ERICH SCHWARTZEL
Investors Bancorp.......B2
J
J.C. Penney................B10
Johnson & Johnson..B10
JPMorgan Chase ... A2,B1
K 1. Spider-Man: Into the Sony
KPMG .......................... B3
Kuwait Foreign
Petroleum Exploration
.....................................B9
Kuwait Oil Tanker.......B9
Kuwait Petroleum
International.............B9
L Southern National
Lowe's.......................B10
Macy's.......................B10
Meituan Dianping.......B9
Morgan Stanley..........B1
Motivational Health
Messaging.................B5
Muscat Electricity
N Walt Disney................B4
New York Community
Hariharan, Guru........A11
Hirsch, Jeffrey............B9
J Parker, Brian...............R2
K
Kennedy, Scott............B3
Khoman, Ehsan...........B9
Kroll, Colin...................B1
M T
Marinac, Christopher..B2
Bancorp.....................B1
NIO .............................. B9
Nissan Motor..............B1
O
Oman Oil.....................B1
1A Auto.......................B5
P SALES, IN MILLIONS
Pinduoduo ................... B9
Pinnacle Financial
Partners....................B2
R lywood gears up for some of
Renault........................B1
S
Salalah Methanol ....... B9
Samsung Electronics B10
Saudi Arabian Oil ....... B1
Sears Holdings..........B10
Sony.............................B2
Bancorp of Virginia..B1
T tal Engines” took its place
Target........................B10
Tencent Holdings...B4,B9
Tencent Music
Entertainment Group
.....................................B9
Tesla............................B9
W
Walmart....................B10
Weight Watchers
International.............B9
Orchard, Stephen........B5
Otsuru, Motonari........B2
P
Petersen, Matt ........... B4
Powell, Jerome...........B9
S
Siefers, Scott..............B2
Sirianni, Peter.............B5
Tierney, Jim................A1
‘Spider-Man’ Swings Atop Box Office
LOS ANGELES—Sony Pic-
tures Entertainment had its
second Spider-Man hit of the
year over the weekend, as Hol-
its most important weeks of
business.
“Spider-Man: Into the Spi-
der-Verse” collected a already a hit before opening in
healthy $35.4 million in the
U.S. and Canada, according to
preliminary studio estimates,
while Clint Eastwood’s “The
Mule” opened well and “Mor-
among the major bombs of
the year.
Hollywood is entering the
busiest weeks in moviegoing,
when holiday breaks allow
weekday grosses to perform
like a Saturday night.
Movies that appear to open
modestly during this time can
ride out the holiday corridor
and emerge a hit.
That is what Sony is hoping
is the case with “Spider-Man,”
a critically acclaimed animated
installment in the comic-book
universe.
Estimated Box-Office Figures, Through Sunday
FILM
Spider-Verse
2. The Mule Warner Bros. $17.2
3. Dr Seuss’ The Grinch Universal
4. Ralph Breaks the
Internet
5. Mortal Engines
*Friday, Saturday and Sunday
Sony’s hit Spider-Man
spinoff, “Venom,” has grossed
more than $850 million
world-wide since opening in
October.
“They’re very different
films,” said Adrian Smith,
head of domestic distribu-
tion at Sony Corp.’s studio.
“We look at [‘Into the Spi-
der-Verse’] as playing to
families.”
“Spider-Man” had a budget
of about $90 million.
“The Mule,” starring Mr.
Eastwood as an octogenarian
million to produce.
“Mortal Engines,” about a
futuristic dystopia in which
the city of London is a roving
DISTRIBUTOR WEEKEND* CUMULATIVE % CHANGE predator on wheels, was
crushed by poor critical re-
$35.4 $35.4 --
views and general fan disin-
terest.
$17.2 -- In other box-office news,
$11.6 $239.3 -23 Warner Bros.’ “Aquaman” is
Disney $9.6 $154.5 -41
the U.S.
Warner Bros. made the un-
Universal $7.5 $7.5 --
usual call to open the comic-
Source: Comscore book epic in China and other
international markets before
its domestic launch, a move
drug carrier, collected an es- that cuts down on piracy and
timated $17.2 million in sec- allows the movie to get ahead
ond place. of the holiday rush in those
It was released by AT&T territories.
Inc.’s Warner Bros. and is “Aquaman” has grossed
among the stronger openings $261.3 million so far. It opens
of Mr. Eastwood’s career, stateside on Dec. 21.
which has seen weak perfor- Of all this weekend’s new
mances in recent movies such releases, audiences liked “Spi-
as “The 15:17 to Paris.” der-Man” best.
“Mortal Engines,” distrib- It received a rare “A+”
uted by Comcast Corp.’s Uni- grade, according to the Cine-
versal Pictures, grossed an es-
timated $7.5 million—
maScore market research
firm, while “The Mule” got
automatic-flop territory for a an “A-” and “Mortal Engines”
fantasy film that cost $100 a “B-.”

.
Marshall, Eric..............B9
E U

Engelbert, Cathy.........B3
F .....................................B2
Foutty, Janet .............. B3
Fucci, Mike..................B3
G
Gertler, Dan ................ B2
Ghosn, Carlos..............B1
ly
Mills, Robin.................B1
Mistakidis, Aristotelis Ucuzoglu, Joseph........B3
V
Moeller, Philip.............R6 Villere, Sandy..............B9
Moerdler, Mark.........B10 W-Y
Murset, Gregg...........R10
N-O
Waddell, Danika..........R2
on
Whipple, Kyle..............R1
Nazer, Daniel .............. B5 Yusupov, Rus .............. B1
us l,

Smaller launched a campaign to tout a

al a
e
money-market account paying

SONY PICTURES ANIMATION

1.69%.

Banks Hurt “These customer wars are

ci on

new,” said Christopher Mari-

nac, director of research at FIG

By Rates Partners. “I’m not sure it gets

better unless the Fed changes
gears.”
er rs

Smaller banks still have ‘Spider-Man: Into the Spider-Verse’ is an acclaimed animated installment in the comic-book universe. It is 2018’s second Spider-Man hit.
Continued from page B1 above-average net interest
to retain deposits has become margins, but the gap is nar-
much more profound in the rowing, according to the Fed-
Glencore-Related Mining Firm Is Fined
m e

past six months or so, said eral Deposit Insurance Corp.

Scott Siefers, an analyst at That is because bigger banks
Sandler O’Neill. continue to benefit from the
m rp

When rates were near zero, Fed rate increases as they BY BEN DUMMETT allege that Katanga lacked confirmed the Canadian inves- manding records related to its
many small banks used plenti- tend to have more floating- AND SCOTT PATTERSON proper internal financial con- tigation. compliance with American an-
ful interest-free customer de- rate loans such as consumer trols, leading it to overstate Katanga and the individuals tibribery and money-launder-
posits to grow loans aggres- credit-card debt and corporate A Glencore PLC-controlled copper production and under- have agreed to jointly pay a ing laws in Congo, Nigeria and
sively, often in the area of loans. mining company and some of state mining costs, potentially fine of more than 30 million Venezuela.
co Fo

commercial real estate. In the Banks of all sizes are grap- its current and former direc- inflating the company’s perfor- Canadian dollars ($22 million) Mr. Gertler in 2016 was a
process, many of these banks pling with slowing loan tors and executives have mance, according to the per- to settle the allegations, ac- central figure in a $412 million
tacked on a record number of growth, while a flattening agreed to pay more than $22 son. cording to the person. settlement between the Jus-
loans that carried low, fixed yield curve threatens to crimp million to settle Canadian alle- Glencore owns about 86% of The people named in the tice Department and Securities
rates for long periods. The Fed the margins they earn from gations that they hid the risks Katanga. In 2017, Glencore pur- OSC settlement will be banned and Exchange Commission
moves have thrown a wrench borrowing short term and of doing business with an Is- chased Mr. Gertler’s stakes in for certain periods from acting with New York hedge fund
into that approach. lending longer term. raeli businessman closely as a director or officer of a Och-Ziff Capital Management
Pinnacle Financial Part- Over the past three linked to Congolese President publicly traded company listed Group LLC.
ners Inc. more than quadru- months, the KBW Nasdaq Re- Joseph Kabila, said a person The regulator in Ontario, the person said. A spokesman for Fleurette
pled its assets to $24 billion gional Banking index is down familiar with the matter. is focusing on The settlement is expected to Group, Mr. Gertler’s main com-
over the past eight years and 20%, compared with 18% for The expected settlement be- Katanga’s be announced as early as this pany in Congo, said it “has al-
went on a hiring spree, entic- the big-bank KBW Nasdaq tween the Ontario Securities longstanding week. A panel of the OSC must ways acted appropriately and
ing bankers with the promise Bank index. Commission and Toronto- ties to Israeli approve any settlement agree- with integrity in the DRC.
of less bureaucracy than bigger Over the last four years, listed Katanga Mining Ltd. is investor Dan ment at a public hearing for it Nothing has ever been proven
n-

institutions. New Jersey-based Investors related to the company’s busi- Gertler. to take effect. against the company or its ex-
But in the past year, the Bancorp nearly doubled its ness activities in Congo be- It is unclear whether Ka- ecutives in a court of law.”
Nashville-based bank’s profit book of loans for apartment tween 2014 and 2016, the per- tanga and the individuals ad- A year ago, the Treasury
margins from lending have buildings to $8 billion. Some son said. Katanga and another giant mit to wrongdoing in the set- Department sanctioned Mr.
no

started to shrink due to higher 62% of the bank’s loans are for The regulator is expected to copper mine in Congo. tlement. Katanga Chief Gertler, alleging he traded on a
deposit costs. Its shares have commercial real estate, largely name several of Katanga’s cur- The settlement is expected Executive Johnny Blizzard has friendship with Mr. Kabila to
given back all of their gains in New York and New Jersey. rent and former executives to name Glencore’s former also agreed to resign as part of amass a fortune through
since Donald Trump’s 2016 Rates aren’t budging on many and directors in the settlement representatives on Katanga’s the settlement, the person said. “opaque and corrupt” deals on
election sparked a broad rally of those loans. Commercial and will focus on Katanga’s board, according to this per- Katanga’s settlement repre- behalf of multinational compa-
in bank stocks. real-estate loans typically have longstanding ties with Dan son. Those individuals, who in- sents another reputational hit nies seeking to do business in
Pinnacle is trying to reverse fixed-rate periods from three Gertler, the Israeli business- clude Aristotelis Mistakidis, for Glencore and its operations Congo. Mr. Gertler has denied
the slide. It is hiring bankers to 10 years, a span that often man who first invested in Ka- one of Glencore’s most senior in Africa. In July, the London- wrongdoing and has declined
who specialize in gathering got longer in recent years due tanga alongside Glencore in executives, stepped down from listed mining giant said it had to comment on the Treasury
deposits and, though it es- to fierce competition for bor- 2008, the person said. the board in November 2017 received a subpoena from the allegations and Justice Depart-
chewed ads in the past, rowers. The OSC is also expected to after Glencore and Katanga U.S. Justice Department de- ment investigation.

Renault for what it called “false disclo-

sures” and said it would im-
prove its governance.
said it wouldn’t allow Renault
to name a successor because
Mr. Ghosn remains one of Re-

Pressures Publicly, Renault and Nissan

have said they want to con-
tinue the partnership, which
nault’s three directors and, in
Nissan’s view, Renault isn’t en-
titled to any further represen-

Nissan allows them to share technol-

ogy. Behind the scenes, how-
ever, employees at both com-
tation on the Nissan board.
Mr. Bolloré pushed back in
the letter dated Dec. 14, writ-
panies say mistrust is rising. ing that a shareholder meeting
Continued from page B1 Renault bailed out Nissan in “would allow for appropriate
strength of the world’s largest the late 1990s, but since then disclosure and discussion of
auto-making alliance. Nissan has grown to become governance and other matters, Big 5 banks Synchrony Bank
On Dec. 10, Tokyo prosecu- the larger of the two. That has including the Renault appoin-
tors charged Nissan alongside
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led Nissan executives to pri- tees on the Nissan board and
in senior management.”
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 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

THE WALL STREET JOURNAL. * * * * Monday, December 17, 2018 | B3

BUSINESS NEWS

Boeing Opens Plant for Top Buyer China

Aircraft maker launches
finishing facility as it
navigates turbulence
over trade disputes
BY TREFOR MOSS
ZHOUSHAN, China—Boeing
Co. opened a new Chinese pro-
duction facility, as the Ameri-
can aviation company tries to
cater to its top export market
while steering clear of the ten-
sions battering U.S.-China re-
lations.
At what Boeing calls its
“completion and deliver cen-
ter” here on an island south of
Shanghai, the first finished jet,
a 737 MAX, rolled off the pro-
duction line Saturday, ready
for delivery to Air China Ltd.
Though a Boeing billboard
for the facility at the local air-
port proclaims “the future is
built here,” the center doesn’t
actually build planes. Rather,
it paints and fits the interiors
of jets flown in from Boeing’s
factory in Renton, Wash.,
ahead of their delivery to Chi-
nese airlines.
The facility, and its limited
remit, illustrate the tightrope
Boeing is walking as Washing-
ton and Beijing spar over
trade, including the transfer of
technology.
“Boeing’s walking a fine
line,” said Scott Kennedy, an
expert on China’s industrial
policies at the Center for Stra-
tegic and International Stud-
ies, a Washington, D.C., think
tank.
Boeing, he said, must court
China to safeguard its market
position without risking a
backlash at home, where man-
ufacturers are under pressure
to build more in America and
less in China.
Boeing China’s president,
John Bruns, called the new
center in Zhoushan “a big
deal.” It will produce 100 jets
a year and employ 300 people
at full capacity.
“It really demonstrates our
commitment to this market,”
Mr. Bruns told reporters Sat-
urday ahead of the center’s
opening ceremony. That is es-
pecially so, given the “chal-
lenging time we’re going
through,” he said, referring to
U.S.-China relations.
After threatening and then
imposing tariffs on goods that
cover about 60% of their
trade, the U.S. and China de-
clared a 90-day truce this
ers goes to a Chinese carrier.
Cabin Pressure China’s commercial airline Over the next two decades, the
The U.S.-China trade dispute could put Boeing’s lucrative
fleet, by manufacturer company expects China to buy
China business in jeopardy. Airbus Boeing one in six of all jetliners sold
1,677 1,751 globally—some $1.19 trillion in
Boeing vs. Airbus global order book aircraft Chinese orders Boeing expects
2018 ORDERS to split with European rival
45.4 47.4%
Airbus SE.
453 189 Single-aisle While Airbus would like to
enlarge its share at Boeing’s
79 Wide-body
7.2 expense, both companies are
301 struggling to clear yearslong
Other 264 backlogs of orders. As a result,
ORDER BACKLOG
China can’t hammer Boeing
4,616 1,187 without disrupting its own
fast-growing aviation sector.
6,262 1,075
Tellingly, a 5% tariff China
slapped on U.S. aircraft in Sep-
Boeing’s forecast demand for jetliners, 2018-2037
tember exempted Boeing’s
TOTAL ORDERS: 42,730 large jets.
Boeing is “not immune to
the trade war, but it’s at the
China: 7,690 Other: 35,040 bottom of the list” of targets,
Estimated value: $1.19 trillion
CSIS’s Mr. Kennedy said.
In the longer term, China’s
Notes: Boeing 2018 orders though October; Airbus 2018 orders through November. plan to develop its own jetlin-
Sources: CAPA-Centre for Aviation (fleet); the companies (order book); Boeing (demand) THE WALL STREET JOURNAL. ers is a risk. China’s home-
grown C919, a rival to the 737,
month to create room for ne- China’s leadership has set cracies and state companies is still in testing, but deliver-
gotiations. Even if the two its sights on retooling the believe that such an upgrade ies to state-owned Chinese air-
sides manage to put punitive country’s manufacturing base is critical if China is to become lines should start by around
tariffs in abeyance, harder to to dominate industries of the a superpower. 2021. And aviation companies
resolve will be many of the future, including aviation. As the biggest U.S. exporter are under pressure to help
Chinese trade practices the While officials are considering of all, Boeing’s dependence on China’s budding aviation sec-
U.S. says are unfair, including shelving the centerpiece strat- China makes it an obvious tar- tor, by providing technology
the coercive transfer of tech- egy for that effort as a conces- get in a trade war. One of ev- and know-how, in exchange for
nology. sion, many powerful bureau- ery four planes Boeing deliv- market access.

Deloitte Nominates

.
U.S. Top Executive
ly
BY MICHAEL RAPOPORT been our norm for the past
two decades.” Still, it isn’t un-
on
Deloitte LLP’s board has usual for Big Four chiefs to
nominated the head of its audit serve second terms.
us l,

practice as the Big Four ac- In a statement released

counting firm’s next U.S. chief
executive, apparently closing
off the last chance that current
through Deloitte, Ms. Engelbert
al a
e
said it had been “my privilege”
to serve as CEO. “I am excited

Meet our new

chief Cathy Engelbert might for the future and look forward
ci on

get a second term. to supporting a successful and

The board has selected Jo- smooth transition process to
seph Ucuzoglu as its official new leadership through the
candidate to be CEO and Janet end of my term,” she said.

Managing Directors
Foutty, head of Deloitte’s con- Ms. Engelbert became the
er rs

sulting business, to be U.S. first woman CEO of a U.S. Big

chairman, according to an Four firm when she took the
email to partners Friday re- helm at Deloitte in 2015. She
viewed by The Wall Street has been at the firm since 1986
m e

Journal. Both candidates are and previously ran its audit

subject to ratification in a vote practice. She will continue as
by Deloitte’s partners and prin- CEO until her current term ex- At Credit Suisse, we believe that progress is driven by people who take
m rp

cipals early next year.
The board believes Mr. Ucu-
zoglu and Ms. Foutty are “the
pires next June. responsible ownership of their decisions and actions. Today we are proud to
Throughout the nomination introduce our new Managing Directors who will carry forward Credit Suisse’s
process, Ms. Engelbert retained commitment to making change happen and creating value for our clients.
significant support among
partners who wanted to see
These leaders bring their personal commitment, expertise, and
co Fo

Cathy her stay.

Engelbert, At Deloitte’s annual part- entrepreneurial mindset to clients in about 50 countries.
current U.S. ners’ meeting in Las Vegas in
chief September, she received two
executive, standing ovations when she Rafael Abati Jeremy Duksin Robert Leichter François Schnyder
won’t serve a spoke about the state of the Sanjay Advani Georges El Khoury Dabby Leung Christopher Schofield
second term. firm, according to people fa- Laith Al Kurdi Ilya Feldman Yiping Li Dominique Schwitz
miliar with the matter. Fahad Al-Ebrahim Stewart Finlay Lillian Liao Richard Sehayek
In a November email to Girish Anthur Antony Fisher See Bing Lim Masahito Shimada
most qualified and best pre- partners, the firm’s nominating Anita Antonopoulos Russell Gale Antonio Limones Drew Shoemaker
pared candidates” to lead the committee acknowledged that José Arcilla Thomas Geiser Marcus Linfoot Tanvi Singh
firm, Mike Fucci, Deloitte’s partners wanted more infor- Özgür Arzik George Geotes Mandy Loo Nikhil Singhvi
current U.S. chairman, wrote in mation about the succession Angeline Aw Eugenio Giancotti Marcus Lutz Conor Stransky
the email to partners. process and were “largely dis- Gustavo Azevedo Katrina Glover Luis Macias Meryl Sullivan
n-

The board chose Mr. Ucuzo- appointed” with how informa- Vik Bali Neil Glynn Nicholas Markson Maarten Swart
glu after deciding earlier this tion was communicated to Sabine Barbier-Goldman Mark Green Matthew Masso Teddy Swigert
year not to nominate Ms. En- them. Franck Bataille Rafael Gross Leonardo Mayer Vincent Tay
gelbert for another term, in a Ms. Engelbert remained Alexis Baumont Shivam Gupta Tim McKessar Robert Taylor
no

move that stunned Deloitte’s publicly silent about the pro- Nevin Bhatia Elena Hainaut David Mechlin Winson Toh
partners, the Journal reported cess, but in response to a ques- Julien Binnie Tariq Hasan Lars Moeller Jonathan Tse
in June. tion during an internal Deloitte Bruno Bischoff Jos Hehenkamp Daniel Monckton Tim Tu
Until last week, there was webcast this fall, she said she Ian Blair Philippe Herminjard Annabel Morris Alexander Tyo
still a chance Ms. Engelbert’s would be honored to continue Lea Blinoff Ralf Hippenmeyer Erik Morris Giorgio Valle
name might be put back into as CEO, according to a person Ryan Bondroff John Hoffman Reinhard Mues Michele Van Tassel
consideration as part of Del- familiar with the matter. Christophe Bonjour Lynn Honkanen Maria Nacheva Ravi Venkataraju
oitte’s elaborate CEO-selection Mr. Ucuzoglu has run Del- Simon Booth Edward Hope Javier Nardiz Adil Virani
process. In the email, Mr. Fucci oitte’s audit practice since William Bors Christian Hübner Daniela Nievergelt Marc von Widekind
said write-in candidates were 2015. Previously, he was the Niklaus Boser Holger Inhester Guido Niffenegger Bin Wang
put forth for the board to con- firm’s national managing part- Conrad Bruggisser Michael Jakob Erik Nijssen Jeans Wang
sider, but he didn’t say ner for government, regulatory Marc Buchli Craig Jeffers Patrick No Qing Wang
whether Ms. Engelbert was and professional matters. Ms. Urs Burgherr Steven Jorgensen Paul Norris Robert Wartchow
among them. Foutty has led Deloitte’s con- Pauline Cahill Timothy Joyce Connor O’Keeffe Masashi Washida
Like the rest of the Big Four, sulting business since 2016 and Barbara Capobianco Stephen Ju Mathias Ordody Tracy Watkinson
Deloitte is a private partner- before that ran the firm’s fed- Pablo Carrasco John Katsikoumbas Yair Oshman Thomas Wechsler
ship that elects its CEOs for eral-agency practice and Del- Matthew Cattee Gary Katz Mohammed Patel Germane Wee
fixed terms. In a statement, the oitte Consulting’s technology Allen Cermak Gavin Kelly Sébastien Pesenti Kathrin Wehrli
firm said one-term CEOs “have practice. Raynard Cheng Lokesh Khiani Valerie Philips Ross Whittaker
Marcello Chilov Alexandrine Kiechler Romain Pointurier Urs Widmer
David Cohen Sven-Christian Kindt Chris Pollard Ryan Williams

GE Weighs Replacing Michael Comisarow

Stuart Crabtree
Peter Cross
Tom Koffer
Edouard Kohler
Pawel Kowalski
David Rabuano
Stefan Rauch
Igor Rena Cardoso
Mark Wilson
Mary Kate Wynperle
Wang Xue

KPMG as Its Auditor Eleonore Dachicourt

BY AISHA AL-MUSLIM
General Electric Co. is
moving ahead with a plan to
solicit bids for an independent
auditor after the industrial
conglomerate revealed a series
of accounting issues earlier
this year.
Although GE is keeping
KPMG LLP as its auditor for
2019, the process might mean
the accounting firm could lose
a relationship it has held for
more than a century.
GE said Friday the auditing
firm’s selection will be based
on progress on efforts to reor-
ganize the company.
The announcement comes
despite about 65% of GE
Martial Décoppet
Diego Discepoli
Sandro Kutschera
Andrew Lai
Ashley Lam
Adam Roberts-Thomson
Paolo Roncati
Steven Rosen
Cyril Yip
Serge Yokoyama
Mascha Zaugg Portmann
shareholders voting in favor of
Vamil Divan Martin Lamb Andreas Roth
approving KPMG’s appoint-
Christopher Doolin Eduardo Lapena Daniel Rupli
ment as GE auditor for 2018.
Andrew Duff Will Lau Gregory Rye
Since the shareholder vote,
the company’s audit commit-
tee sought feedback from
shareholders and considered
other options in response, GE
said.
Launching a tender process
to find an auditor is in re-
sponse to “shareowners and
balances the competing con-
siderations about undertaking
an audit firm rotation amidst
the portfolio and other strate-
gic actions that the Company
Promotions effective January 1, 2019.
is currently executing,” GE Au- Copyright © 2018 Credit Suisse Group AG and/or its affiliates. All rights reserved.
dit Committee Chairman Geoff
Beattie said in a prepared
statement.
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

B4 | Monday, December 17, 2018 * * THE WALL STREET JOURNAL.

TECHNOLOGY WSJ.com/Tech

PERSONAL TECHNOLOGY | By David Pierce

Robot Vacuums Tidy Up Their Performance

A robot attachable pad that turns the “The house needs to get bet-
vacuum al-
ways seemed
Floor Warriors robot into a mop. It works
well enough, but the Ecovacs
ter at understanding itself,”
Mr. Angle said.
like a nice Robot vacuums are no longer just early-adopter extravagances, but useful home helpers. Here’s a can’t be both vacuum and Buying a robot vacuum is
idea. I’d obvi- range of talented models from $300 to nearly $1,000. mop simultaneously, and a bit like buying a car, in
ously rather NAME PRICE SCORE PROS CONS switching modes often took that there’s no one choice
delegate the hoovering than longer than just wiping up that’s right for everyone. If
do it myself. But for years, Eufy $300 Smarts Mercifully quiet; Not especially my coffee spills. you’re only worried about
the devices didn’t work well Robovac 30c Power inexpensive; low well-made; tends For many people, a robot the basics, you don’t need to
enough. They were just ex- Noise enough to fit under to move vac still seems like an expen- spend much. The Eufy Robo-
travagances that could help most things haphazardly sive luxury rather than a vac 30c is a good vacuum
a bit but couldn’t fully re- household necessity. But it is that takes the job out of
place the manual labor. Ecovacs $500 Smarts Doubles as a mop; Setup was tricky;
true luxury. Here’s what my your hands. I didn’t test its
Deebot Ozmo 930 tidy cleaning vacuum didn't
Now there are dozens of Power vacuum routine is like now: I less expensive sibling, the
pattern; can always stay
robot vacuums, and many Noise deep-clean a single connected to Wi-Fi
press the button on the ro- $150 Robovac 11s, but the
companies have similar line- spot bot to start cleaning, or open only difference between the
ups, plus or minus a few sig- its corresponding app and two is the Wi-Fi connection,
nature features. For my Shark $500 Smarts Simple, usable app; Mediocre at start it that way. (All five of so if you don’t care about
tests, I chose a sample of Ion S87 comes with a hand cleaning; more my testers have straightfor- the app, you can save even
Looks
vac that also expensive than
five of the most popular and Noise ward apps that let you start more money.
charges in the dock other similar
interesting ones on the mar- or schedule a cleaning re- If you want the grand lux-
products
ket: the $300 Eufy Robovac motely, and integrate with ury vehicle of the bunch,
30c, the $400 Ecovacs Dee- Neato Robotics $700 Smarts D-shaped body Loud; bumps into voice assistants to do the there’s just no beating the
bot Ozmo 930, the $500 Botvac D7 Power gets into corners everything same.) Then I go for a walk Roomba i7+. It can’t mop—I
Shark Ion S87, the $700 better; app lets you or head to work. When I wish it could—but the
Noise
Neato Botvac D7 and the pick places to avoid come back, everything is just
$950 iRobot Roomba i7+. All as I left it, except now my
five have their pros and iRobot $950 Smarts Built-in dustbin Expensive; dock floor is clean.
cons, but even the least means less is huge For some, like the Eufy,
The key jobs: clean
Roomba i7+ Power
costly model was able to Noise
emptying; maps cleaning and getting back to well; don’t get stuck;
pick up nearly all the dirt home so you can base is about where the
from my floor. say where to clean smarts end. Higher-end mod-
return to the charging
I’m all in. Robot vacuums els do much more. The Neato base when done.
are the best smart-home Note: Higher Noise score means quieter performance. generates a floor plan of
gadget I’ve tested yet be- Source: the companies (photos); WSJ analysis of the vacuums THE WALL STREET JOURNAL. your home as it works, then
cause they solve a real prob- allows you to draw virtual
lem rather than just compli- avoid what’s in the way and Eufy’s Robovac was just tell you when it finds some- lines in the app to tell the Roomba has a useful app,
cating how I turn on my tea get home to its charging short enough to get under thing under the couch, such vacuum where not to go. The and lots of smart features. It
kettle. I still have my stick base when it’s done. the railing at the top of my as your keys. Or dog poop. Roomba i7+, the most expen- just does its job really well.

.
vacuum, but it’s buried in Not all robot vacuums staircase—and get trapped. Sadly for the world and my sive vacuum I tested, creates Its crowning feature is a

ly
the closet. It’s only for seri- measure up to that low bar, And I experienced the carpet, we aren’t there yet. a similar floor plan and al- dustbin built into its base:
ous spillage now. but many do, including my dreaded dog-poop incident: These robot vacuums lows you to choose where Instead of emptying the vac-
Matt Petersen, Neato Ro- five test subjects—for the One of my vacuums at- can’t clean stairs or couch the robot should clean. You uum every time you run it,
botics’ chief executive, told most part. Neato’s Dotvac D7 on tempted to pick up the leav- cushions, so they likely can’t can say, “Alexa, tell Roomba you empty it every few
me a robot vacuum has two has an unusual D-shape that ings and instead smeared be your only vacuum. The to clean the kitchen,” and off weeks. And there are less
jobs. To be useful, it has to helps it clean in corners and them around my carpeted Shark Ion S87 comes with a it goes. costly versions of this bot
clean well and not get stuck. along walls, but it also ended bedroom. That was rough. small hand vac that shares Over time, the smartest of too, without some of these
I’d add a third: It has to go up wedged underneath chair Multiple vacuum makers told the dock with the robot, but these products will be much extras.
us l,

home when it’s finished. In legs a few times. And there me it’s an important, and even it wasn’t enough for re- more robot than vacuum. After a few days, I hardly
general, a good robot vac- was the time the Neato hard, problem to solve. ally serious messes. Since they know where ev- even thought about the
al a
e
uum is one you never think cleaned up half a pile of Dor- iRobot CEO Colin Angle Many of these vacs have erything is in your house, Roomba i7+, which is exactly
about: It’s as if your floors ito crumbs before returning said the company is working trouble with wet messes. and can move around it, vac- what I was looking for. I
are just magically clean all to its base and happily de- on teaching robots to recog- The Ecovacs Deebot Ozmo uums could be a handy place don’t vacuum anymore, but
ci on

the time. To do that, a robot claring mission accom- nize and avoid cables and 930 has a clever solution: a from which to control and my floors are clean. I’m liv-
needs to clean what’s dirty, plished. Which, nope. even building a feature to built-in water reservoir and manage your smart home. ing the dream.

‘Fortnite’ Dance Move Spawns a Lawsuit From Rapper

er rs

BY SARAH E. NEEDLEMAN mid-2017, according to indus- ifornia district court, is the Terrence Ferguson, is suing limits protection to original on microtransactions last
m e

try tracker SuperData. latest legal tussle for game de- Epic for selling the “Milly choreographed works, defined year, up nearly 10% from
A lawsuit filed against the Now 2 Milly is suing for an velopers attempting to keep Rock,” a dance move he says as a series of organized dance 2016, according to SuperData
maker of “Fortnite” by the unspecified cut of the profits. their works culturally relevant. he created in 2011. Epic calls movements and patterns. Last estimates.
m rp

New York rapper 2 Milly is
taking aim at one of the more
popular and colorful aspects
of the smash-hit videogame:
the celebratory dances players
He and another artist, Chance Activision Blizzard Inc. was the move in question “Swipe year, the U.S. Copyright Office “Fortnite” regularly taps
the Rapper, say Epic incorpo- sued last year by the maker of It” and sold it in a $10 pack- issued fresh guidance, saying into trends. It added a dance
rates dance moves without Humvee for allegedly including age of virtual goods over the it “cannot register short dance move from the new Disney
their originators’ permission, trademarked vehicles in its summer. routines consisting of only a film “Ralph Breaks the Inter-
and the works of African- The suit alleges “Fortnite” few movements or steps with net.” Last month, the game
co Fo

buy for a few bucks. American artists in particular. unlawfully steals from several minor linear or spatial varia- sold virtual National Football
“Fortnite” is among a That charge has sparked de- dance creators. The complaint tions, even if a routine is novel League jerseys for players’ av-
handful of shooter games in bate in the game community
Add-ons like costumes names rapper Calvin Cordozar or distinctive.” atars. In those cases, Epic was
which players can take a over which moves are accept- and celebratory dances Broadus Jr., better known as Still, a court could choose in partnership with the organ-
break from the heat of battle able to replicate and which Snoop Dogg, as well as the ac- to side with Mr. Ferguson, izations.
to make their characters bust ones warrant a creator’s per-
have boosted revenue tor Will Smith; Alfonso Ri- Case Western Reserve Univer- Cole Walsh, a high-school
a move. Many of the dance mission. The origins of many for Epic Games. beiro, who performed the sity law professor Aaron Per- senior in Corte Madera, Calif.,
moves, also known as popular dance moves are eponymous Carlton dance zanowski said. “The Copyright said he has spent about $70
“emotes,” mimic real-life murky. while on the sitcom “The Office’s guidance isn’t bind- on a few dozen dance moves
dances like the running man A spokesman said Epic Fresh Prince of Bel-Air,” and ing,” he said. “Courts can in “Fortnite” over the past
and the floss. doesn’t comment on ongoing “Call of Duty” games. Take- Donald Faison, who starred in make their own determination year so he can taunt his
Those dances are lucrative. litigation. Epic, which counts Two Interactive Software Inc. “Scrubs.” as to whether or not a work is friends when he offs their ava-
While the “last-man standing” Tencent Holdings Ltd., Walt was sued in 2016 by a tattoo Mr. Ferguson also argues protected.” tars during a match.
mode of “Fortnite” is free, Disney Co. and others as in- business claiming the com- the company violated his right Analysts say pop-culture “It’s a comical moment to
n-

sales of emotes, costumes and vestors, and recently raised pany unlawfully reproduced under California common law references make videogames take away from the ubercom-
other add-ons have helped money at a valuation of nearly copyrighted tattoos in its to control the commercial dis- more engaging, driving up petitive style of the game,” he
Epic Games Inc. generate $15 billion, doesn’t make pub- “NBA 2K” series. Both suits tribution of his likeness. spending on virtual goods. said. “I don’t think it would be
more than $2 billion in reve- lic its financial data. are pending. The U.S. Copyright Act of Gamers world-wide across all as popular as it is without the
no

nue since it launched in The suit, filed Dec. 5 in Cal- 2 Milly, whose real name is 1976 covers the art of dance. It platforms spent $78 billion dances.”

Netflix Cues Up Big Concert Films

ADVERTISEMENT

The Marketplace
To advertise: 800-366-3975 or WSJ.com/classifieds
BY ANNE STEELE show had grossed $111.2 mil- higher than the average paid
lion from its start in October price on StubHub throughout
DEA Two of the highest-grossing 2017 though the week ended the run as a whole—while
concert tours of the year will Dec. 9, according to Playbill. TicketLiquidator.com had a
 
 get video-streaming encore Ms. Swift’s “Reputation” pair of prime orchestra-level
         !" # $% &    
' ( )(#   ) )    '          
runs. tour—her first entirely in sta- seats for the final Saturday
(   '  (( ) (  *+  '       ( )(     Netflix Inc. is offering the diums, as opposed to smaller performance listed for $42,511
,    *+  '  (   ' #(( &      '  
 (   '  ( #   # *+  '
(   ' ) (   ((# concert films from Bruce venues—set the record for each.
- ..  & $ $ /++//      (- /01*/10+/2 
 !/"   Springsteen’s Broadway resi- highest-grossing U.S. tour, rak- Tickets don’t always sell for
.  
.  ( 3 +44+*5   6- +210010++7 #8  - () 9
*0:*; 2*  <( /  % = $ //*7+> 
 !/"
?://1?? <?
) '  ( dency and Taylor Swift’s sta- ing in more than $266.1 mil- such exorbitant asking prices,
3 .;:+++;;4/   6- +210010++7 #8  - () 9 *0:*; 2*  <(
/  % = $ //*7+> 
 !/" *2
()
  
  ( 3 /+++*25
dium tour across the U.S.—two lion domestically, according to and resale sites don’t typically
  6- +210010++7 #8  - () 9 *0:*; 2*  <( /  % of the hottest tickets of 2018. Billboard Boxscore, with over disclose actual sale prices.
= $ //*7+> 
 !/" @' *2+  () )( %     ( 3 .74/.7
  6- +*1/410++5 #8  - (&  A9B 5.. ? &  4= @, $ The Boss’s film became two million tickets sold. Regularly priced seats were
/+;4+> 
 !/"   C .  ( 3 @/0;2   6- +/10/10++; available early Sunday, just Both stars were prominent $75 to $850 at face value.
#8  - #  =:$  45/   &  ( $ //55*> 
 !/"
  C . ( ( 44.  ( 3 @/0;2   6- +/10/10++; #8 hours after his final curtain faces of Ticketmaster’s latest Ms. Swift’s tour, which
 - #  =:$  45/   &  ( $ //55*> 
 !/" 9 . call at the Walter Kerr The- attempt to get tickets into the wrapped up its second U.S. leg
  (   6- +/10/10++; #8  - #  =:$  45/   &
 ( $ //55*> 
 !/" *2  () 9 &(&  ( 3 2/.*;   6- atre, while Ms. Swift’s hits hands of fans, rather than Oct. 6, also employed an ag-
+/10/10++; #8  - #  =:$  45/   &  ( $ //55*> 
Netflix New Year’s Eve. scalpers. gressive pricing strategy, with
RICHARD WAINWRIGHT/EPA-EFE/REX/SHUTTERSTOCK


 !/" /0      #  #  ) (  ( 3 ?D7;*24   6-
+/10/10++; #8  - #  =:$
 45/   &
 ( $ //55*>  The tours, which tested new The ticketing giant’s “Veri- the best seats costing $800 to

 !/" .  ()     6- +;1/10++; #8  - #  =:$

45/   &
 ( $ //55*> 
 !/" C ( ( A22:2   2 ticketing methods in an effort fied Fan” program asks users $1,500 at face value and spots
 ()  ( 3 025455  9  A     6- +21/10++7 #8  -
= E  9 E@ 
to thwart scalpers, com-
manded high ticket prices and
rank among the top earners
BUSINESS OPPORTUNITIES BUSINESS OPPORTUNITIES for the year.
Tickets for both shows ran
over $800 apiece. This month,
  
to register weeks before tick- in the back of the house priced
ets go on sale, providing their around $50.
names, email addresses and With the premium seats
phone numbers. priced closer to their market
After the system mines value, Ms. Swift in just 38
though Ticketmaster’s own shows beat the previous re-
 
     fans across the world will be sales records, along with pub- cord set by the Rolling Stones’
  

   
      
    able to watch taped versions licly available data such as so- 2005-2007 “A Bigger Bang
 
 
     
 

   

 
  
    
  of the performances for the cial-media history, to verify Tour,” which grossed $245
  
           
   price of a monthly subscrip- would-be buyers’ identities, million in 70 shows, according
  

        tion to Netflix—around $8 to those deemed legitimate are to Billboard.
 
 
   
    $14. sent codes that let them ac- Taylor Swift on tour in Australia Netflix bought the rights to
Mr. Springsteen sold out cess tickets. Mr. Springsteen’s show for
 
   236 “Springsteen on Broad- That spawned a market prices on resale websites such more than $20 million, ac-
way” shows at the 960-seat among ticket brokers for the as StubHub. cording to people will knowl-
THE MARKETPLACE 
   theater in New York City. codes themselves—with scalp- The run-up in prices was edge of the deal.
ADVERTISE TODAY   !   

  
"   Though the run was extended ers offering as much as $1,000 particularly pronounced in re- Terms of the service’s deal
(800) 366-3975   " # ! #   ! three times from its original for a single code to access cent days: StubHub said the with Ms. Swift weren’t dis-
wsj.com
     eight weeks, tickets still tickets for Mr. Springsteen’s average paid price for a final- closed.
© 2018 Dow Jones & Company, Inc.
All Rights Reserved.  ! 
 " fetched a premium, averaging show—and, coupled with high week seat at Mr. Springsteen’s Netflix declined to com-
more than $500 apiece. The demand, helped drive up show was $2,188—about 50% ment on the deals.
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

THE WALL STREET JOURNAL. * * * * Monday, December 17, 2018 | B5

SMALL BUSINESS

Company That Filed Patent Suits Derails

The litigious Florida-based Shipping & Transit declared bankruptcy after some of the small firms it targeted fought back
BY RUTH SIMON clude specific amounts for
the three judgments against
Shipping & Transit LLC it for attorneys’ fees.
sued more than 100 mostly Also in 2017, 1A Auto Inc.,
small companies in 2016, an online auto-parts retailer,
making it the largest filer of was awarded $120,000 in at-
patent lawsuits that year. torneys’ fees and costs, but
But when the Florida com- the bankruptcy has stopped
pany recently declared bank- efforts to collect that money.
ruptcy, it valued its U.S. pat- “I believe they pocketed all
ents at just $1. the money or they pocketed
Its demise followed three money they could have used
cases in which companies to pay our attorneys’ fee
fought back and were judgment,” said the com-
awarded legal fees after pany’s attorney, Philip Swain.
Shipping & Transit decided Mr. Swain described Ship-
not to pursue the patent ping & Transit’s strategy as
claims against them. Judges “a stickup based on the cost
in the cases awarded a total of litigation. Our client had
of more than $245,000 in at- the guts to fight,” he said.
torneys’ fees and costs to “Not many do.”
businesses in 2017. Stephen Orchard, an attor-
Shipping & Transit doesn’t ney representing Shipping &
sell tracking systems or any- Transit in the bankruptcy
thing else. Instead, it claims proceeding, said he has seen
to own patents “for provid- nothing to support the alle-
ing status messages for gation that assets were
cargo, shipments and peo- transferred to the company’s
ple,” according to court fil- owners ahead of the bank-
ings. The company typically ruptcy filing. He said Ship-
demanded licensing fees of ping & Transit filed for bank-
$25,000 to $45,000 from ruptcy liquidation because
companies it said were in- collection efforts against the
fringing on its patents. Most company “had ramped up.”

agree to pay small amounts
to avoid costly litigation.
Martin Kelly Jones, a
Shipping & Transit co-owner,
filed the first patent held by
courts ordered it to pay at-
from Shipping & Transit
the Supreme Court decision,
JAMES YANG
It made more sense “to have
an orderly resolution of the
business affairs,” Mr. Or-
chard said, rather than face
that the company’s “strategy “litigation and collection ef-

.
Shipping & Transit in 1993. torneys fees and questioned would fight back rather than but still “remain extremely is predatory and aimed at forts from coast to coast.”

Mr. Jones, who didn’t re-
spond to requests for com-
ment, previously said that in
the 1980s he came up with
an idea to notify families
of arriving school buses
but was unsuccessful in
bringing a tracking product
the company’s motives
in bringing the patent
lawsuits.
In 2016, Shipping & Tran-
sit filed 107 patent lawsuits,
according to legal analytics
firm Lex Machina. It filed
five patent lawsuits in 2017
us l,
settle, Mr. Nazer said.
In one ruling, a U.S. dis-
trict judge in Santa Ana, Ca-
on lif., called Shipping & Tran-
sit’s patent claims “object-
ively unreasonable” in light
of a 2014 Supreme Court de-
cision that held that certain
high,” said Shawn Ambwani,
chief operating officer of
Unified Patents, which spe-
cializes in challenging these
There was a ‘clear
ly
reaping financial advantage Mr. Sirianni said he is still
from defendants who are un- involved with another patent
willing or unable to engage filer, Electronic Communi-
in the expense of patent liti- cations Technologies. The
gation.” company filed 35 patent law-
Peter Sirianni, a co-owner suits between 2016 and 2018,
of Shipping & Transit, said according to Lex Machina.
the California decision “un- Messrs. Sirianni and Jones

to the market. and none this year. The com- kinds of abstract ideas pattern of serial justly” went against the are associated with another
Despite the many lawsuits pany had revenue of weren’t patentable. company and “knocked the company, Motivational
filings,’ a U.S.
al a

Health Messaging, that says

filed by Shipping & Transit,
a court has never ruled on
the validity of the company’s
e
$707,000 in 2016 and There was a “clear pattern asset out from under us.”
$348,000 in 2017, but none of serial filings,” the judge district judge said. Given the court rulings, the it has patents on “unique so-
in 2018, according to bank- said, even when Shipping & patents “are worth $1 to lutions to maximize the ef-
ci on

patent claims, said Daniel
Nazer, a senior staff attorney
at the Electronic Frontier
Foundation, a nonprofit that
works on intellectual-prop-
ruptcy filings. Transit “should have realized me,” he said. “I am not li- fectiveness of ‘health track-
The challenges to its pat- it had a weak litigation censing them anymore.” ers.’”
ent claims and the fee position.” types of assertions. In its chapter 7 bank- The company hasn’t filed
awards were “really the Patent assertions by com- In another of the cases ruptcy filing in West Palm any patent lawsuits, accord-
death knell for the company” panies that don’t make prod- from 2017, a federal magis- Beach, Shipping & Transit ing to a review of court fil-
er rs

erty issues. But Shipping &
Transit’s business model
took a hit after multiple
because they increased the ucts and are primarily fo- trate judge in West Palm listed more than $420,000 in ings, but has issued letters
chances that other compa- cused on making money off Beach, Fla., said Shipping & secured and unsecured demanding licensing fees for
nies facing patent lawsuits patents have declined since Transit’s actions suggest claims. That total doesn’t in- use of its patents.
m e
m rp
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THE WALL STREET JOURNAL. Monday, December 17, 2018 | B7

MARKETS DIGEST
Dow Jones Industrial Average S&P 500 Index New to the Market
Last Year ago Last Year ago
24100.51 t 288.44, or 1.18% last week Trailing P/E ratio 20.08 21.70 2599.95 t 33.13, or 1.26% last week Trailing P/E ratio * 20.96 25.12
Public Offerings of Stock
High, low, open and close for each of P/E estimate * 15.38 20.09 High, low, open and close for each of P/E estimate * 16.15 19.82 IPOs in the U.S. Market
the past 52 weeks Dividend yield 2.35 2.13 the past 52 weeks Dividend yield 2.03 1.90 None expected this week
All-time high 26828.39, 10/03/18 All-time high 2930.75, 09/20/18
Lockup Expirations
Current divisor 0.14748071991788 Below, companies whose officers and other insiders will become eligible
27000 2900 to sell shares in their newly public companies for the first time. Such
sales can move the stock’s price.
65-day moving average 65-day moving average
26000 2800 Lockup Offer Offer amt Through Lockup
expiration Issue date Issuer Symbol price($) ($ mil.) Friday (%) provision
Dec. 17 June 20, ’18 Aptinyx APTX 16.00 117.8 38.2 180 days
25000 2700
June 20, ’18 Magenta Therapeutics MGTA 15.00 100.0 –53.9 180 days
June 20, ’18 Kezar Life Sciences KZR 15.00 86.3 99.9 180 days
24000 2600
June 20, ’18 Xeris Pharmaceuticals XERS 15.00 98.3 34.1 180 days
Week's high June 20, ’18 AvroBio AVRO 19.00 114.7 28.3 180 days
DOWN UP 23000 200-day moving average 2500 June 20, ’18 i3 Verticals IIIV 13.00 99.4 65.4 180 days
t

Monday's open Friday's close

June 20, ’18 Essential Properties Realty Trust EPRT 14.00 455.0 –1.1 180 days
Friday's close Monday's open –4.3
t

22000 2400 June 20, ’18 Eidos Therapeutics EIDX 17.00 122.2 180 days
Dec. 18 June 21, ’18 Autolus Therapeutics AUTL 17.00 172.5 93.1 180 days
200-day moving average Week's low
21000 2300 June 21, ’18 ElectroCore ECOR 15.00 89.7 –71.9 180 days
Sources: Dealogic; WSJ Market Data Group
Bars measure the point change from Monday's open
20000 2200 IPO Scorecard
D J F M A M J J A S O N D D J F M A M J J A S O N D Performance of IPOs, most-recent listed first
Primary % Chg From % Chg From
NYSE weekly volume, in billions of shares market Composite Company SYMBOL Friday3s Offer 1st-day Company SYMBOL Friday3s Offer 1st-day
t
t

Financial Flashback IPO date/Offer price close ($) price close IPO date/Offer price close ($) price close
24
16 The Wall Street Journal, December 17, 2002 360 Finance
QFIN Dec. 14/$16.50
16.50 ... ... Synthorx
THOR Dec. 7/$11.00
14.90 35.5 18.2

8 Cadbury Schweppes PLC agreed to buy Pfizer Inc.’s Chardan Healthcare Acquisition 10.00 ... ... MOGU 20.33 45.2 45.2
0 Adams confectionery business, including Trident and CHACU Dec. 14/$10.00 MOGU Dec. 6/$14.00
D J F M A M J J A S O N D Dentyne gum, for about $4.2 billion, including debt. CF Finance Acquisition 10.00 ... –0.1 Medalist Diversified REIT 9.00 –10.0 –4.3
CFFAU Dec. 13/$10.00 MDRR Nov. 28/$10.00
*Weekly P/E data based on as-reported earnings from Birinyi Associates Inc.
Tencent Music 12.81 –1.5 –8.5 Taiwan Liposome Co. 5.90 1.7 1.7
TME Dec. 12/$13.00 TLC Nov. 21/$5.80
Major U.S. Stock-Market Indexes Nasdaq Composite
Moderna 18.32 –20.3 –1.5 Tiziana Life Sciences 8.00 –19.2 –4.2
Latest Week 52-Week % chg t 58.59, or -0.84% MRNA Dec. 7/$23.00 TLSA Nov. 20/$9.90
High Low Close Net chg % chg Low Close (l) High % chg YTD 3-yr. ann.
Dow Jones
last week Sources: Dow Jones Market Data; FactSet Research Systems
Industrial Average 24828.29 23881.37 24100.51 -288.44 -1.18 23533.20 l 26828.39 -2.2 -2.5 11.5 Other Stock Offerings
Transportation Avg 10026.08 9485.95 9514.11 -437.05 -4.39 9514.11 l 11570.84 -8.5 -10.3 8.3
7250 Secondaries and follow-ons expected this week in the U.S. market
Utility Average 762.26 740.28 757.85 4.34 0.58 647.90 l 759.55 0.6 4.8 11.0
Total Stock Market 27607.37 26602.68 26707.00 -391.06 -1.44 26677.14 l 30390.61 -3.4 -3.5 8.6 None expected this week
629.49 -15.84 -2.45 l 7100
Barron's 400 656.27 628.25 629.49 786.73 -11.1 -11.5 7.3 Off the Shelf
Nasdaq Stock Market “Shelf registrations” allow a company to prepare a stock or bond for
6950 sale, without selling the whole issue at once. Corporations sell as
Nasdaq Composite 7197.29 6878.98 6910.66 -58.59 -0.84 6777.16 l 8109.69 -0.4 0.1 11.7

.
Nasdaq 100 6867.66 6534.33 6594.96 -18.31 -0.28 6306.10 l 7660.18 2.0 3.1 13.0 conditions become favorable. Here are the shelf sales, or takedowns,
6800 over the last week:

ly
S&P 7 10 11 12 13 14 Takedown date/ Deal value
500 Index 2685.44 2583.23 2599.95 -33.13 -1.26 2581.00 l 2930.75 -2.8 -2.8 8.7 December Issuer/Industry Registration date ($ mil.) Bookrunner(s)
MidCap 400 1798.73 1728.83 1732.81 -48.13 -2.70 on 1732.81 l 2050.23 -8.2 -8.8 7.8 DJ US TSM HCP Inc Dec. 10 $498.5 BofA ML, Citi,
918.03 875.54 878.11 -27.15 -3.00 878.11 l 1098.36 -5.8 -6.2 9.9 Real Estate/Property May 31,318 RBC Cptl Mkts, UBS
SmallCap 600 t 391.06, or -1.44%
Ra Pharmaceuticals Dec. 11 $149.5 Jefferies, BMO Cptl Mkts,
Other Indexes last week Healthcare Nov. 1,317 Stifel
Russell 2000 1471.96 1407.11 1410.81 -37.28 -2.57 1410.81 l 1740.75 -7.8 -8.1 8.1 Fluidigm Dec. 11 $55.0 Piper Jaffray, UBS
NYSE Composite 12074.91 11696.58 11755.38 -186.55 -1.56 11755.38 l 13637.02 -7.4 -8.2 5.6 Healthcare March 8,317
us l,

Value Line 512.52 492.01 493.08 -13.00 -2.57 493.08 l 593.57 -11.5 -12.3 4.0 27850 NeoGenomics Dec. 11 $138.1 MS
NYSE Arca Biotech 4631.43 4398.02 4425.05 -42.91 -0.96 4148.85 l 5400.34 6.0 4.8 7.6 Healthcare Dec. 11,318
al a
e
NYSE Arca Pharma 597.68 572.54 574.09 -9.49 -1.63 516.32 l 609.15 4.8 5.4 2.7 Angi Homeservices Dec. 11 $24.7 GS
27400 Technology Oct. 22,318
KBW Bank 93.04 87.92 88.10 -5.16 -5.54 88.10 l 116.52 -17.1 -17.4 6.9
Marinus Pharmaceuticals Dec. 12 $45.0 Jefferies, Leerink Prtnrs
ci on

PHLX§ Gold/Silver 69.03 66.80 67.59 -0.35 -0.52 61.84 l 92.08 -15.8 -20.7 14.9 Healthcare Oct. 3,317
26950
PHLX§ Oil Service 97.37 88.86 89.24 -8.67 -8.86 89.24 l 170.18 -33.0 -40.3 -17.9 Global Medical REIT Dec. 12 $31.5 Stifel, BMO Cptl Mkts
PHLX§ Semiconductor 1216.01 1152.18 1177.57 19.70 1.70 1140.15 l 1445.9 -5.9 -6.0 21.5 Real Estate/Property April 18,317
CBOE Volatility 25.94 20.34 21.63 -1.60 -6.89 9.15 l 37.32 129.6 95.9 -1.6 26500 Tocagen Dec. 12 $30.0 Citi, Leerink Prtnrs
7 10 11 12 13 14 Healthcare May 11,318

Nasdaq PHLX Sources: SIX Financial Information; Dow Jones Market Data December
Hannon Armstrong Sustainable Infrastructure CapitalDec. 12 $111.5 BofA ML, RW Baird & Co,
er rs

Real Estate/Property Dec. 21,316 JPM, MS, UBS, WFS

$37.5
International Stock Indexes CommoditiesandCurrencies VBI Vaccines
Healthcare
Dec. 13
May 15,317
BMO Cptl Mkts, Oppenheimer
Canaccord Genuity
Latest Week 52-Week Range YTD Last Week YTD Axovant Sciences Dec. 14 $30.0 Jefferies,
m e

Region/Country Index Close % chg Low Close High % chg Close Net chg %Chg % chg Healthcare Dec. 30,316 Guggenheim Partners
World The Global Dow 2813.48 –0.81 2803.94 • 3323.74 –8.8 DJ Commodity 602.89 -16.56 -2.67 -3.60
Public and Private Borrowing
DJ Global Index 360.64 –1.24 360.64 • 425.41 –9.2
m rp

TR/CC CRB Index 180.31 -3.84 -2.08 -6.99

DJ Global ex U.S. 226.43 –1.09 224.38 • 285.34 –15.1
Crude oil, $ per barrel 51.20 -1.41 -2.68 -15.26 Treasurys
Americas DJ Americas 615.47 –1.42 615.47 • 695.86 –4.2
Natural gas, $/MMBtu 3.827 -0.661 -14.73 29.60 Monday, December 17 Thursday, December 20
Brazil Sao Paulo Bovespa 87449.51 –0.76 69814.74 • 89820.09 14.5
Gold, $ per troy oz. 1237.00 -9.80 -0.79 -5.31
Canada S&P/TSX Comp 14595.07 –1.35 14595.07 • 16567.42 –10.0 Auction of 13 week bill; Auction of 4 and 8 week bill;
announced on December 13; settles on December 20announced on December 18; settles on December 26
Mexico S&P/BMV IPC 41312.17 –1.33 39427.28 • 51065.49 –16.3 U.S. Dollar Index 97.42 0.91 0.94 5.75
co Fo

Chile Santiago IPSA 3806.18 1.29 3707.41 • 4442.56 –9.6 WSJ Dollar Index 90.85 0.59 0.65 5.67 Auction of 26 week bill; Auction of 5 year TIPS;
EMEA Stoxx Europe 600 347.21 0.51 338.99 • 402.81 –10.8 Euro, per dollar 0.8843 0.0061 0.69 6.14 announced on December 13; settles on December 20announced on December 13; settles on December 31
Stoxx Europe 50 2844.81 0.56 2781.94 • 3274.97 –10.5 Yen, per dollar 113.37 0.65 0.58 0.59 Public and Municipal Finance
Eurozone Euro Stoxx 338.83 0.74 330.97 • 404.86 –12.1 U.K. pound, in dollars 1.26 -0.0148 -1.16 -6.88 Deals of $ 150 million or more expected this week
Euro Stoxx 50 3092.60 1.11 3016.99 • 3672.29 –11.7 52-Week Final Total Rating Bookrunner/
Austria ATX 2911.96 –0.81 2841.82 • 3688.78 –14.9 Low Close(l) High % Chg Sale maturity Issuer ($mil.) Fitch Moody’s S&P Bond Counsel(s)
Belgium Bel-20 3384.29 1.19 3286.92 • 4176.88 –14.9
DJ Commodity 596.81 l 667.35 1.02
France CAC 40 4853.70 0.84 4742.38 • 5640.10 –8.6
206.38 -2.28
Dec. 17 prelim. Connecticut 300.0 N.R. N.R. N.R. Barclays/—
Germany DAX 10865.77 0.72 10622.07 • 13559.60 –15.9 TR/CC CRB Index 179.60 l Hlth & Ed Facs Auth
Greece Athex Composite 645.24 –0.53 593.05 • 886.54 –19.6 Crude oil, $ per barrel 50.29 l 76.41 -10.65 Dec. 17 prelim. New Jersey 335.4 N.R. N.R. N.R. RBC Cptl Mkt/—
Israel Tel Aviv 1596.03 –0.03 1391.67 • 1676.03 5.7 Natural gas, $/MMBtu 2.55 l 4.84 46.52 Economic Dev Auth
Italy FTSE MIB 18910.79 0.90 18410 • 24544 –13.5 Gold, $ per troy oz. 1176.20 l 1362.40 -1.38 Dec. 17 prelim. So California 175.6 N.R. N.R. N.R. J P Morgan
Netherlands AEX 506.53 0.51 495.31 • 576.24 –7.0 Metro Water Dt Securities LLC/—
Portugal PSI 20 4803.42 –0.69 4778.06 • 5791.88 –10.9 U.S. Dollar Index 88.59 l 97.54 3.72
n-

Dec. 17 Aug. 15, 2047 Williamson 207.5 N.R. N.R. N.R. FTN Financial
Russia RTS Index 1116.50 –3.58 1043.46 • 1324.62 –3.3 WSJ Dollar Index 82.70 l 91.10 4.31 (Leander) ISD Capital Markets/
South Africa FTSE/JSE All-Share 51560.47 1.02 50434.39 • 61684.77 –13.4 Euro, per dollar 0.7996 l 0.8913 3.88 Norton Rose Fulbright
Spain IBEX 35 8886.10 0.80 8660.0 • 10609.5 –11.5
Yen, per dollar 104.73 l 114.53 0.67 Dec. 21 prelim. Port of Port 315.0 N.R. N.R. N.R. Goldman & Co/—
Sweden OMX Stockholm 545.09 1.30 530.68 • 617.64 –4.2
Arthur Navig Dt
no

l 1.43 -5.55
Switzerland Swiss Market 8713.68 –0.31 8456.95 • 9611.61 –7.1 U.K. pound, in dollars 1.25
Source:Thomson Reuters/Ipreo
U.K. FTSE 100 6845.17 0.99 6704.05 • 7877.45 –11.0
Asia-Pacific Real-time U.S. stock
Australia
China
S&P/ASX 200
Shanghai Composite
5602.00
2593.74
–1.40
–0.47
5552.5
2486.42
•
•
6352.2 –7.6
3559.47 –21.6 WSJ
.COM
quotes are available on
WSJ.com. Track most-
A Week in the Life of the DJIA
A look at how the Dow Jones Industrial Average component stocks
Hong Kong Hang Seng 26094.79 0.12 24585.53 • 33154.12 –12.8 active stocks, new
did in the past week and how much each moved the index. The DJIA
India S&P BSE Sensex 35962.93 0.81 32596.54 • 38896.63 5.6 highs/lows, mutual
lost 288.44 points, or 1.18%, on the week. A $1 change in the price of
Japan Nikkei Stock Avg 21374.83 –1.40 20617.86 • 24270.62 –6.1 funds and ETFs.
any DJIA stock = 6.78-point change in the average. To date, a $1,000
Malaysia FTSE Bursa Malaysia KLCI 1661.96 –1.11 1652.63 • 1895.18 –7.5 Plus, get deeper money-flows data and investment on Dec. 31 in each current DJIA stock component would
Singapore Straits Times 3077.09 –1.09 2966.45 • 3615.28 –9.6 email delivery of key stock-market have returned $31,068, or a gain of 3.56%, on the $30,000
South Korea Kospi 2069.38 –0.31 1996.05 • 2598.19 –16.1 data. investment, including reinvested dividends.
Taiwan TAIEX 9774.16 0.14 9489.18 • 11253.11 –8.2
All are available free at The Week’s Action
Source: SIX Financial Information; Dow Jones Market Data WSJMarkets.com Pct Stock price Point chg $1,000 Invested(year-end '17)
chg (%) change in average* Company Symbol Close $1,000
4.53 4.19 28.41 Procter & Gamble PG $96.64 $1,089
Consumer Rates and Returns to Investor 3.50 1,063
Benchmark Yields and Rates 2.61
1.62
3.22
10.98
21.83
Intel
Caterpillar
INTC 47.86
CAT 126.77 823
U.S. consumer rates Selected rates Treasury yield curve Forex Race 1.15 1.21 8.20 Microsoft MSFT 106.03 1,261
A consumer rate against its Money market accounts Yield to maturity of current bills, Yen, euro vs. dollar; dollar vs. 0.51 0.25 1.70 Coca-Cola KO 49.34 1,113
benchmark over the past year notes and bonds major U.S. trading partners 0.47 0.56 3.80 IBM IBM 119.90 817
Bankrate.com avg†: 0.61%
0.20 0.22 1.49 Walt Disney DIS 112.20 1,060
earn.bank 2.31%
Federal-funds 4.00% 8% 0.18 0.33 2.24 McDonald’s MCD 183.29 1,092
2.00% San Diego, CA 844-371-3276
target rate WSJ Dollar index –0.27 –0.12 –0.81 Pfizer PFE 43.80 1,252
Vio Bank 2.35% Friday 3.00
s
t 1.50 t 4 –0.29 –0.50 –3.39 Home Depot HD 172.29 929
Phoenix, AZ 888-999-9170
Yen –0.31 –0.24 –1.63 Merck MRK 76.48 1,401
s

Money market 1.00 Popular Direct 2.36% 2.00 0 –0.54 –0.65 –4.41 United Technologies UTX 118.80 952
account yields New York, NY 800-274-5696
t
t –0.92 –0.98 –6.64 American Express AXP 105.70 1,080
0.50 One year ago 1.00 –4 s
CFG Community Bank 2.40% –1.04 –0.60 –4.07 Verizon VZ 57.08 1,130
Euro
Baltimore, MD 888-205-8388 –1.08 –2.14 –14.51 3M MMM 196.10 855
0.00 0.00 –8
J FMA M J J A S O N D MySavingsDirect 2.40% 1 3 6 1 2 3 5 710 30 –1.10 –0.81 –5.49 Nike NKE 72.53 1,173
Ossining, NY 2018
2018 877-752-1919 month(s) years –1.34 –0.62 –4.20 Cisco Systems CSCO 45.82 1,233
maturity –1.38 –4.47 –30.31 Boeing BA 318.75 1,102
Yield/Rate (%) 52-Week Range (%) 3-yr chg
Interest rate Last (l)Week ago Low 0 2 4 6 8 High (pct pts) Sources: Ryan ALM; Tullett Prebon; Dow Jones Market Data –1.44 –1.34 –9.09 WalMart WMT 91.85 952
–1.44 –1.66 –11.26 Chevron CVX 113.83 944
Federal-funds rate target 2.00-2.25 2.00-2.25 1.25 l 2.00 2.00
Corporate Borrowing Rates and Yields –1.47 –2.02 –13.70 Visa V 135.09 1,193
Prime rate* 5.25 5.25 4.50 l 5.25 2.00
Spread +/- Treasurys, –1.55 –4.16 –28.21 UnitedHealth Group UNH 265.02 1,218
Libor, 3-month 2.80 2.77 1.61 l 2.80 2.28 Yield (%) in basis pts, 52-wk Range Total Return –1.79 –3.01 –20.41 Apple AAPL 165.48 993
Money market, annual yield 0.61 0.59 0.25 l 0.61 0.35 Bond total return index Last Wk ago Last Low High 52-wk 3-yr
–1.80 –0.97 –6.58 DowDuPont DWDP 52.78 758
Five-year CD, annual yield 1.98 2.01 1.46 l 2.01 0.60 10-yr Treasury, Ryan ALM 2.891 2.851 -2.00 0.17 –2.44 –3.01 –20.41 Travelers TRV 120.55 910
30-year mortgage, fixed† 4.69 4.66 3.88 l 4.99 0.74 DJ Corporate n.a. 4.451 n.a. n.a. –2.65 –2.06 –13.97 Exxon Mobil XOM 75.58 941
15-year mortgage, fixed† 4.04 4.06 3.30 l 4.34 0.86 Aggregate, Barclays Capital 3.450 3.440 n.a. 34 52 -1.01 1.70 –2.90 –3.00 –20.34 JPMorgan Chase JPM 100.29 959
Jumbo mortgages, $424,100-plus† 4.71 4.73 4.26 l 5.16 0.25 High Yield 100, Merrill Lynch n.a. 6.958 n.a. n.a. n.a. n.a. n.a. –3.02 –2.45 –16.61 Walgreens WBA 78.74 1,110
Five-year adj mortgage (ARM)† 4.38 4.34 3.70 l 4.89 0.84 Fixed-Rate MBS, Barclays 3.550 3.520 n.a. 22 38 -0.15 1.38 –3.84 –6.90 –46.79 Goldman Sachs GS 172.77 688
New-car loan, 48-month 4.61 4.66 3.20 l 4.70 1.41 Muni Master, Merrill n.a. 2.607 n.a. n.a. n.a. n.a. n.a. –8.55 –12.43 –84.28 Johnson & Johnson JNJ 133.00 978
Bankrate.com rates based on survey of over 4,800 online banks. *Base rate posted by 70% of the nation's largest EMBI Global, J.P. Morgan 7.038 7.120 413 289 430 -4.492 4.958
banks.† Excludes closing costs. *Based on Composite price. DJIA is calculated on primary-market price.
Sources: SIX Financial Information; Dow Jones Market Data; Bankrate.com Sources: J.P. Morgan; Ryan ALM; S&P Dow Jones Indices; Barclays Capital; Merrill Lynch Source: Dow Jones Market Data; FactSet.
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

B8 | Monday, December 17, 2018 THE WALL STREET JOURNAL.

Listed are the 300 largest closed-end funds as
measured by assets. Closed-end funds sell a limited
number of shares and invest the proceeds in securities.
Unlike open-end funds, closed-ends generally do not
buy their shares back from investors who wish to cash
in their holdings. Instead, fund shares trade on a stock
exchange. NA signifies that the information is not
available or not applicable. NS signifies fund not in
existence of entire period. 12 month yield is computed
by dividing income dividends paid (during the previous
twelve months for periods ending at month-end or
during the previous fifty-two weeks for periods ending
at any time other than month-end) by the latest
month-end market price adjusted for capital gains
distributions.
Source: Lipper
Friday, December 14, 2018
52 wk
Prem Ttl
Fund (SYM) NAV Close /Disc Ret
General Equity Funds
Adams Divers Equity Fd ADX 15.39 13.08 -15.0 0.2
Boulder Growth & Income BIF 12.55 10.28 -18.1 -2.2
Central Securities CET 31.11 25.23 -18.9 -1.2
CohSteer Opprtnty Fd FOF 12.15 11.18 -8.0 -7.3
EtnVnc TaxAdvDiv EVT 21.37 20.82 -2.6 -1.9
Gabelli Dividend & Incm GDV 21.50 19.10 -11.2 -11.1
Gabelli Equity Trust GAB 5.50 5.49 -0.2 -0.6
Genl American Investors GAM 36.16 29.90 -17.3 -3.9
HnckJohn TxAdv HTD 23.98 21.47 -10.5 -7.6
Liberty All-Star Equity USA 6.09 5.55 -8.9 -0.6
Royce Micro-Cap RMT 8.88 7.83 -11.8 -8.7
Royce Value Trust RVT 14.25 12.43 -12.8 -14.0
Source Capital SOR 38.37 33.02 -13.9 -16.2
Tri-Continental TY 28.42 24.68 -13.2 -3.9
Specialized Equity Funds
Aberdeen Glbl Prem Prop AWP 6.17 5.40 -12.5 -10.3
Adams Natural Rscs Fd PEO 18.77 15.55 -17.2 -14.4
AllnzGI NFJ Div Interest NFJ 13.25 11.32 -14.6 -10.7
BlkRk Enh Cap Inco CII 15.76 14.40 -8.6 -4.7
BlkRk Engy Res Tr BGR 12.58 11.25 -10.6 -11.1
BlackRock Enh Eq Div Tr BDJ 8.97 7.91 -11.8 -7.4
BlackRock Enh Gl Div Tr BOE 11.32 9.79 -13.5 -14.3
BlkRk Intl Grwth&Inco BGY 5.86 5.10 -13.0 -14.9
BlkRk Health Sci BME 36.88 38.67 +4.9 14.0
BlackRck Rscs Comm Str Tr BCX 8.61 7.33 -14.9 -15.0
BlackRock Science & Tech BST 26.89 28.47 +5.9 12.2
BlackRock Utilities Infr BUI 19.42 20.12 +3.6 0.3
Corporate Debt
Price moves by a company's debt in the credit markets sometimes mirror and sometimes anticipate, moves in
that same company’s share price.
Investment-grade spreads that tightened the most…
Issuer Symbol Coupon (%)
Credit Agricole ACAFP
Qualcomm QCOM
Laboratory Corp of America Holdings LH
Morgan Stanley MS
Kinder Morgan Energy Partners KMI
Baker Hughes BHI
Occidental Petroleum OXY
Colgate–Palmolive CL
52 wk
Prem Ttl
Fund (SYM) NAV Close /Disc Ret
CBREClarionGlblRlEstIncm IGR 7.93 6.56 -17.3 -9.2
ClearBridge Engy Mid Opp EMO 10.09 8.95 -11.3 -9.8
ClearBridge MLP & Mid TR CTR 10.23 8.99 -12.1 -13.0
ClearBridgeMLP&Midstrm CEM 12.86 11.31 -12.1 -10.6
Cohen & Steers Infr Fd UTF 23.41 21.34 -8.8 -0.4
C&S MLP Incm & Engy Opp MIE 9.52 8.53 -10.4 -8.2
Cohen & Steers Qual Inc RQI 12.74 11.50 -9.7 -0.6
CohnStrsPfdInco RNP 21.10 18.11 -14.2 -6.5
Cohen & Steers TR RFI 12.67 11.75 -7.3 -0.2
CLSeligmn Prem Tech Gr Fd STK 17.58 NA NA NA
DNP Select Income Fund DNP 9.54 11.04 +15.8 6.4
Duff&PhelpsGblUtilIncFd DPG 15.49 13.25 -14.5 -7.3
Eaton Vance Eqty Inco Fd EOI 14.04 13.23 -5.8 -0.9
Eaton Vance Eqty Inco II EOS 15.34 14.74 -3.9 3.6
EtnVncRskMngd ETJ NA 8.82 NA 3.4
Etn Vnc Tax Mgd Buy-Write ETB 14.65 14.20 -3.1 -8.8
Eaton Vance BuyWrite Opp ETV 13.97 14.26 +2.1 1.0
Eaton Vance Tax-Mng Div ETY 11.31 10.81 -4.4 -3.7
EatonVanceTax-MngdOpp ETW NA 10.01 NA -6.9
EtnVncTxMngGlDvEqInc EXG 8.07 8.09 +0.2 -5.2
FT Energy Inc & Growth Fd FEN 20.83 19.44 -6.7 -11.8
FstTrEnhEqtIncFd FFA 14.74 13.73 -6.9 -8.8
First Tr Engy Infr Fd FIF 16.41 14.11 -14.0 -16.4
First Tr MLP & Engy Incm FEI 11.93 10.62 -11.0 -20.8
Gabelli Hlthcr & Well GRX 11.65 10.05 -13.7 4.1
Gabelli Utility Tr GUT 4.92 6.24 +26.8 2.9
GAMCOGlblGoldNatRscs&Inc GGN 4.19 3.87 -7.6 -14.9
John Hancock Finl Opps Fd BTO 30.17 29.87 -1.0 -18.3
NeubergerBermanMLPIncm NML 8.49 7.30 -14.0 -11.3
Neubrgr Brm Rl Est Sec Fd NRO 4.99 4.42 -11.4 -9.6
Nuveen Dow 30 Dynamic DIAX 17.53 16.86 -3.8 -2.0
Nuveen Core Eq Alpha JCE 13.10 12.47 -4.8 -5.8
Nuveen Diversified Div JDD 10.79 9.26 -14.2 -15.4
Nuveen Engy MLP Fd JMF 9.94 9.01 -9.4 -11.6
NuvNASDAQ100DynOver QQQX 21.26 21.26 0.0 -5.0
Nuveen Real Est Incm Fd JRS 10.13 9.01 -11.1 -10.2
Nuveen Real Asset Income JRI 17.04 14.23 -16.5 -11.7
NuvS&P500DynOverwrite SPXX NA 14.92 NA -3.9
NuveenS&P500Buy-Write BXMX 12.97 12.35 -4.8 -5.1
Reaves Utility Fund UTG 32.00 31.27 -2.3 6.3
Tekla Hlthcr Investors HQH 21.58 19.36 -10.3 NE
Tortoise Energy TYG NA 21.20 NA -12.8
Spread*, in basis points
Maturity Current
8.375 Oct. 13, ’49 169
2.600 Jan. 30, ’23 75
3.600 Feb. 1, ’25 117
4.100 May 22, ’23 123
3.500 March 1, ’21 80
2.773 Dec. 15, ’22 113
4.100 Feb. 1, ’21 50
2.450 Nov. 15, ’21 38
CLOSED-END FUNDS
52 wk 52 wk Prem12 Mo 52 wk
Prem Ttl Prem Ttl Fund (SYM) NAV Close /Disc Yld Prem Ttl
Fund (SYM) NAV Close /Disc Ret Fund (SYM) NAV Close /Disc Ret Fund (SYM) NAV Close /Disc Ret
Templeton Global GIM NA 6.03 NA 6.3
Tortoise MLP Fund NTG NA 12.75 NA -14.4 New Germany Fund GF 16.91 14.79 -12.5 -19.1 Wstrn Asset Emerg Mkts EMD 14.81 12.44 -16.0 9.7 NexPointRlEstStrat;C 19.68 NA NA 1.6
Income & Preferred Stock Funds Swiss Helvetia Fund SWZ 8.09 7.18 -11.2 -8.3 Wstrn Asset Gl Def Opp Fd GDO 17.14 15.05 -12.2 8.4 NexPointRlEstStrat;Z 19.68 NA NA 2.5
Calamos Strat Fd CSQ 11.53 10.83 -6.1 -3.3 Templeton Dragon TDF NA 17.02 NA -11.0 National Muni Bond Funds PREDEX;I 26.20 NA NA 6.2
Cohen & Steers Dur Pfd LDP 23.73 21.40 -9.8 -11.8 Templeton Emerging EMF NA 12.99 NA -18.2 AllianceBrnstn NtlMun AFB 14.04 12.04 -14.2 4.6 PREDEX;T 26.20 NA NA NS
Cohen & Strs Sel Prf Inco PSF 24.25 25.22 +4.0 -4.1 Virtus Total Return Fund ZF NA 9.19 NA -18.2 Blackrock Invest BKN 15.02 13.22 -12.0 5.2 PREDEX;W 26.19 NA NA NS
FT Interm Duration Pfd FPF 21.90 19.30 -11.9 -16.0 Wells Fargo Gl Div Opp EOD NA 4.94 NA -10.8 BlackRock Mun 2030 Target BTT 23.41 20.30 -13.3 4.0
SharesPost 100;A 28.70 NA NA 7.3
John Hancock Pfd Income HPI 19.27 19.91 +3.3 0.0 BlackRock Municipal Trust BFK 13.68 12.35 -9.7 5.8
Prem12 Mo SharesPost 100:I 28.77 NA NA 7.5
John Hancock Pfd II HPF 19.01 19.70 +3.6 0.0 Fund (SYM) NAV Close /Disc Yld BlackRockMuni BLE 14.26 12.80 -10.2 5.6
SharesPost 100:L 28.64 NA NA NS
John Hancock Pfd Inc III HPS 16.93 16.61 -1.9 -3.1 BlackRockMuni Tr BYM 14.38 12.53 -12.9 5.1
U.S. Mortgage Bond Funds
BlkRk MuniAssets Fd MUA 13.79 12.83 -7.0 5.0 Tot Inc+ RE:A 30.27 NA NA 7.2
JHancock Pr Div PDT 14.09 14.96 +6.2 -4.3
BlackRock Income Trust BKT 6.21 5.75 -7.4 6.1 Tot Inc+ RE:C 29.24 NA NA 6.4
LMP Cap & Inco Fd SCD 13.61 11.69 -14.1 -7.8 BlkRk Munienhanced MEN 11.24 9.86 -12.3 5.8
Invesco High Incm 2023 IHIT 9.96 9.87 -0.9 5.9 Tot Inc+ RE:I 30.69 NA NA 7.5
Nuveen Pfd & Incm Opps Fd JPC 9.34 8.38 -10.3 -12.6 BlkRk MuniHldgs Inv MFL 13.81 12.44 -9.9 5.9
Nuveen Mtg Opp Term Fd JLS 23.83 23.43 -1.7 8.1 Tot Inc+ RE:L 30.15 NA NA 7.0
Nuveen Pfd & Incm Secs Fd JPS 8.99 7.90 -12.1 -17.5 BlkRk MuniHldgs Qlty II MUE 13.22 11.58 -12.4 5.6
Investment Grade Bond Funds USQ Core Real Estate:I 25.86 NA NA 6.5
Nuveen Preferred & Incm JPI 22.48 20.36 -9.4 -12.3 BlkRk MuniVest MVF 9.12 8.42 -7.7 5.9
Blackrock Core Bond Tr BHK 13.53 12.19 -9.9 6.4 USQ Core Real Estate:IS 25.86 NA NA 6.5
Nuv Tax-Adv Div Gr JTD 15.39 14.36 -6.7 -8.4 BlkRk MuniVest II MVT 14.35 13.21 -7.9 5.9
BlkRk Credit Alloc Incm BTZ 13.40 11.54 -13.9 6.8
TCW Strategic Income Fund TSI NA 5.39 NA 2.8 BlkRk MuniYield MYD 14.08 12.92 -8.2 5.6 Versus Cap MMgr RE Inc:I 27.93 NA NA NE
John Hancock Income Secs JHS 14.10 12.83 -9.0 5.7
Virtus Global Dividend ZTR NA 9.67 NA -17.1 BlkRk MuniYld Quality MQY 14.96 12.98 -13.2 5.4 Versus Capital Real Asst 24.82 NA NA 1.3
MFS Inc Tr MIN 4.03 3.70 -8.2 9.8
Convertible Sec's. Funds BlkRk MuniYld Qlty II MQT 13.17 11.49 -12.8 5.3 Wildermuth Endwmnt:A 13.45 NA NA 7.6
Western Asset Infl Incm WIA 12.33 10.73 -13.0 3.8
AllianzGI Conv & Incm NCV 5.43 5.80 +6.8 -7.9 BlRkMunyldQltyIII MYI 13.65 11.87 -13.0 5.6 Wildermuth Endwmnt:C 13.16 NA NA 6.9
Western Asset Infl Opps WIW 11.94 10.28 -13.9 4.1
AllianzGI Conv & Incm II NCZ 4.87 5.02 +3.1 -9.4 Dreyfus Mun Bd Infr Fd DMB 13.64 12.07 -11.5 5.0 Wildermuth Endowment:I 13.55 NA NA 7.9
Loan Participation Funds
AllianzGI Equity & Conv NIE 21.84 19.42 -11.1 -2.3 Dreyfus Strat Muni Bond DSM 7.91 7.09 -10.4 6.0
Apollo Sr Fltg Rate Fd AFT 16.72 14.48 -13.4 7.6 Income & Preferred Stock Funds
Calamos Conv Hi Inco Fd CHY 10.56 9.91 -6.2 -7.7 Dreyfus Strategic Munis LEO 8.16 7.21 -11.6 5.9
BlkRk Debt Strat Fd DSU 11.82 10.15 -14.1 7.9 Destra Alt Acc;A 13.63 NA NA -4.9
Calamos CHI 10.03 9.38 -6.5 -9.5 BlackRock FR Incm Strat FRA 14.23 12.29 -13.6 5.9 DWS Muni Income Trust KTF 11.76 10.47 -11.0 5.9
Destra Alt Acc;C 13.23 NA NA -5.6
World Equity Funds Blkrk FltRt InTr BGT 13.76 11.99 -12.9 5.8 Eaton Vance Mun Bd Fd EIM 12.93 11.19 -13.5 5.1
Destra Alt Acc;I 13.84 NA NA -4.6
Aberdeen Total Dyn Div AOD 8.97 7.60 -15.3 -10.5 BlackstoneGSO Strat Cred BGB 16.14 14.10 -12.6 8.6 Eaton Vance Mun Income EVN 12.74 11.27 -11.5 5.6
Destra Alt Acc;L 13.36 NA NA -5.4
Calamos Glbl Dyn Inc CHW 7.52 7.03 -6.5 -13.6 Blackstone GSO Sr Float BSL 17.18 16.02 -6.8 6.8 EV National Municipal Opp EOT 20.73 19.08 -8.0 5.2
Flat Rock Opportunity 19.31 NA NA NS
Cdn Genl Inv CGI 29.62 21.15 -28.6 -7.6 Eagle Point Credit ECC NA 14.73 NA 14.5 Invesco Adv Mun Incm II VKI 11.38 9.95 -12.6 6.2
Variant Altrntv Inc:Inst 25.45 NA NA NS
China Fund CHN NA 17.93 NA -15.0 Eaton Vance FR Incm Tr EFT 15.06 13.08 -13.1 6.1 Invesco Mun Incm Opps Tr OIA 7.26 7.12 -1.9 5.6
Variant Altrntv Inc:Inv 25.44 NA NA NS
EtnVncTxAdvGblDiv ETG 15.70 14.14 -9.9 -13.0 EatonVnc SrFltRate EFR 14.79 12.99 -12.2 6.4 Invesco Mun Opportunity VMO 12.71 11.09 -12.7 5.8
EatonVance TxAdv Opport ETO 20.71 20.20 -2.5 -12.0 Eaton Vance Sr Incm Tr EVF 6.97 6.03 -13.5 6.0 Invesco Municipal Trust VKQ 12.71 11.09 -12.7 6.0 Convertible Sec's. Funds
First Trust Dynamic Eur FDEU 14.91 13.21 -11.4 -23.1 First Trust Sr FR Fd II FCT 13.42 11.52 -14.2 6.1 Invesco Qlty Mun Inco IQI 12.83 11.17 -12.9 6.0 Calamos Dyn Conv & Incm CCD 18.70 17.97 -3.9 -0.2
Gabelli Glbl Multimedia GGT 7.47 8.06 +7.9 -0.3 FT Sr Floating Rate 2022 FIV 9.23 8.50 -7.9 5.6 Invesco Inv Grade Muni VGM 13.13 11.42 -13.0 6.0 World Equity Funds
GDL Fund GDL 11.08 8.95 -19.2 -4.6 Highland FR Opps Fd HFRO 14.70 13.91 -5.4 6.3 Invesco Value Mun Incm Tr IIM 15.39 13.35 -13.3 5.4 ACAP Strategic:A 14.29 NA NA -7.7
India Fund IFN 25.25 21.67 -14.2 -4.2 Invesco Credit Opps Fund VTA 12.34 10.35 -16.1 6.8 MainStayMacDefinedMuni MMD 19.80 19.96 +0.8 5.4 ACAP Strategic:W 10.65 NA NA -6.9
NA NA NA NA Invesco Senior Income Tr VVR 4.66 3.98 -14.6 5.7 NuveenAMT-FreeMunValue NUW 15.94 14.78 -7.3 4.7 BMO LGM Front ME 9.19 NA NA -10.8
Japan Sml Cap JOF
36.97 32.31 -12.6 -18.7 Nuveen Credit Strt Inc Fd JQC 8.66 7.42 -14.3 6.5 Nuveen AMT-Free Quality NEA 14.32 12.27 -14.3 5.3 Calamos Global Tot Ret Fd CGO 10.94 10.74 -1.9 -9.5
Korea Fund KF
14.78 12.88 -12.9 -14.8 NuvFloatRteInco Fd JFR 10.80 9.36 -13.3 7.6 Nuveen AMT-Free Mun NVG 15.58 13.77 -11.6 6.0
Mexico Fund MXF Prem12 Mo
Morgan-Stanley Asia-Pac APF 17.45 16.78 -3.8 -5.8 Nuv Float Rte Opp Fd JRO 10.73 9.32 -13.1 7.7 Nuveen Mun Credit Incm Fd NZF 15.21 13.49 -11.3 6.0
Fund (SYM) NAV Close /Disc Yld
MS China a Shr Fd CAF 22.79 19.64 -13.8 -9.0 Nuveen Senior Income Fund NSL 6.46 5.58 -13.6 7.5 Nuveen Enhncd Mun Val Fd NEV 14.33 12.73 -11.2 5.7
MS Emerging Fund MSF 16.85 16.36 -2.9 -5.4 Pioneer Floating Rate Tr PHD 11.80 10.17 -13.8 6.9 Nuveen Intermed Dur Mun NID 13.53 12.37 -8.6 4.4 U.S. Mortgage Bond Funds
NuveenMuniIncoOpp Fd NMZ 12.87 11.77 -8.5 6.1 Vertical Capital Inc:A 11.99 NA NA 3.3
MS India Invest IIF 26.53 22.73 -14.3 -22.1 High Yield Bond Funds
AllianceBernstein Glbl AWF NA 10.70 NA 7.7 Nuveen Muni Value Fund NUV 9.93 9.34 -5.9 4.0 Vertical Capital Inc:C 12.15 NA NA NS
Barings Glbl Short Dur HY BGH 19.04 16.66 -12.5 10.6 Nuveen Qual Mun Incm Fd NAD 14.60 12.49 -14.5 5.3 Loan Participation Funds
Nuveen Sel TF NXQ 14.39 13.35 -7.2 3.7
BlackRock Corp Hi Yd Fd HYT 11.13 9.60 -13.7 8.7
BlackRockDurInco Tr BLW 16.04 13.68 -14.7 6.7 PIMCO MuniFd PMF 12.24 12.31 +0.6 5.6
504 Fund 9.69 NA NA 3.8
Angel Oak Str Crdt:Inst NA NA NA NS
Brookfield Real Assets RA 22.95 19.71 -14.1 11.8 Pimco Muni Inc II PML 11.50 13.11 +14.0 5.9
Blackstone/GSO FR EI D 23.99 NA NA NS
Credit Suisse High Yld DHY 2.51 2.28 -9.2 10.7 PIMCO Muni Inc III PMX NA 11.05 NA 5.9
Pioneer Mun Hi Inc Adv Tr MAV 11.25 10.46 -7.0 6.0
Blackstone/GSO FR EI I 24.00 NA NA NS
DoubleLine Incm Solutions DSL 19.30 17.35 -10.1 9.8 Blackstone/GSO FR EI T 23.94 NA NA NS
Dreyfus Hi Yd Strat Fd DHF 3.18 2.85 -10.4 9.4 Pioneer Mun Hi Incm Tr MHI 12.25 10.89 -11.1 5.7
Putnam Tr PMM 7.70 7.00 -9.1 5.2 FedProj&TrFinanceTendr 10.09 NA NA 4.2
Stock Performance Fst Tr Hi Inc Lg/Shrt Fd FSD 16.16 13.64 -15.6 9.6
PutnamMuniOpportunities PMO 12.91 11.56 -10.5 4.7 Invesco Sr Loan A NA NA NA 4.2
One-day change Last week Close ($) % chg Ivy High Income Opps Fund IVH 14.71 12.56 -14.6 9.5
Neuberger Berman HYS NHS 12.04 10.17 -15.5 7.9 Wstrn Asset Mngd Muni MMU 13.15 12.59 -4.3 5.9 Invesco Sr Loan C NA NA NA 3.4
–31 165 ... ... NexPoint Strat Opps Fund NHF 23.91 20.96 -12.3 11.0 WesternAssetMunTrFund MTT 20.39 19.65 -3.6 4.9 Invesco Sr Loan IB NA NA NA 4.4
–31 113 57.62 –0.81 Nuveen Credit Opps 2022 JCO 9.35 8.95 -4.3 6.2 Single State Muni Bond Invesco Sr Loan IC NA NA NA 4.3
–30 n.a. 137.41 –1.65 Nuveen Gl Hi Incm Fd JGH 16.56 14.03 -15.3 9.5 BlackRock CA Municipal Tr BFZ 14.25 12.15 -14.7 5.0 Invesco Sr Loan Y NA NA NA 4.4
Nuveen High Incm Dec19 JHD 9.96 9.92 -0.4 4.5 BlkRk MuniHldgs CA Qlty MUC 14.66 12.46 -15.0 4.8 Sierra Total Return:T 24.74 NA NA 5.2
–23 158 39.64 –2.36 BlkRk MunHl NJ Qlty MUJ 14.99 12.72 -15.1 5.3
Nuveen Hi Incm Nov 2021 JHB 9.69 9.39 -3.1 6.0 High Yield Bond Funds
–19 n.a. ... ... PGIM Global Short Dur HY GHY 15.62 13.22 -15.4 7.6 BlRk MuHldg NY Qlty MHN 14.02 11.94 -14.8 4.8 Griffin Inst Access Cd:A NA NA NA 6.0
–17 n.a. ... ... PGIM Short Duration HY Fd ISD 15.85 13.31 -16.0 7.7 BlkRk MuniYld CA Fd MYC 14.58 12.97 -11.0 5.0
Griffin Inst Access Cd:C NA NA NA 6.0
–17 70 65.10 –2.37 Pioneer High Income Trust PHT 9.60 8.22 -14.4 9.3 BlkRk MuniYld CA Quality MCA 14.82 12.62 -14.8 5.0
Griffin Inst Access Cd:F NA NA NA 6.0
Wells Fargo Incm Opps Fd EAD NA 7.42 NA 8.7 BlkRk MuniYld MI Qlty MIY 14.78 12.56 -15.0 5.3
–16 39 65.17 –0.46 Griffin Inst Access Cd:I NA NA NA 6.0
Wstrn Asset High Inco II HIX 6.93 5.93 -14.4 9.1 BlRk Muyld NY Qlty MYN 13.44 11.49 -14.5 4.7

.
Eaton Vance CA Mun Bd EVM 11.75 10.03 -14.6 4.9 Griffin Inst Access Cd:L NA NA NA 6.0
…And spreads that widened the most Wstrn Asset Opp Fd HIO 5.25 4.47 -14.9 7.0
PIMCO Flexible Cr I;Inst 10.06 NA NA 7.2

ly
West Asst HY Def Opp Fd HYI 15.59 13.55 -13.1 7.7 Invesco CA Value Mun Incm VCV 12.65 11.23 -11.2 5.4
Citigroup C 5.875 March 27, ’49 291 224 275 55.02 –1.34 Other Domestic Taxable Bond Funds Invesco PA Value Mun Incm VPV 13.26 11.50 -13.3 5.9 PionrILSBridge NA NA NA NS
General Electric GE 7.500 Aug. 21, ’35 388 21 n.a. 7.10 –1.39 Ares Dynamic Credit Alloc ARDC NA 14.14 NA 8.6 Invesco Inv Grade NY Muni VTN 13.69 12.00 -12.3 5.7 WA Middle Mkt Dbt 712.85 NA NA 9.6
Barings Corp Investors MCI NA 15.16 NA 5.9 Nuveen CA AMT-Free Qual NKX 14.90 12.75 -14.4 5.3 WA Middle Mkt Inc 744.55 NA NA 9.5
ENEL Finance International* ENELIM 6.000 Oct. 7, ’39 304 20 293 ... ... Nuveen CA Muni Value NCA 10.04 9.03 -10.1 3.8
BlackRock Multi-Sector IT BIT 18.26 15.79 -13.5 9.5 Other Domestic Taxable Bond Funds
Xerox XRX 4.500 May 15, ’21 264 19 260 24.45 –1.21
Lloyds Banking
Cooperatieve Rabobank*
LLOYDS 7.500 June 27, ’49
RABOBK 11.000 June 30, ’49
540
747
on 18
18
545
746
...
...
...
...
BlackRock Taxable Mun Bd BBN 22.29 20.99 -5.8 7.4
Doubleline Oppor Credit DBL 19.54 18.45 -5.6 10.2
Duff & Phelps Utl & Cp Bd DUC 9.02 8.15 -9.6 5.3
14.11 11.88 -15.8 7.1
Nuveen CA Quality Muni NAC 14.73 12.63 -14.3 5.4
Nuveen MD Qual Muni NMY 13.94 11.78 -15.5 4.6
Nuveen MI Qual Muni NUM 14.83 12.42 -16.3 4.4
Nuveen NJ Qual Muni NXJ 15.15 12.75 -15.8 5.2
Am Beacon Apollo TR:Y 9.94 NA NA NS
Am Beacon SP Enh Inc:Y 10.11 NA NA NS
BlackRock Mlt-Sctr Oppty 92.57 NA NA NS
Johnson & Johnson JNJ 3.625 March 3, ’37 83 14 77 133.00 –10.04 EtnVncLtdFd EVV Capstone Church Capital 11.98 NA NA 2.4
Franklin Ltd Duration IT FTF 10.33 9.25 -10.5 13.9 Nuveen NY AMT-Free NRK 13.79 11.70 -15.2 4.6
Anheuser–Busch InBev Finance ABIBB 3.650 Feb. 1, ’26 157 12 162 ... ... Nuveen NY Qual Muni NAN 14.40 12.22 -15.1 4.8
CION Ares Dvsfd Crdt;A 25.30 NA NA 5.4
us l,

High-yield issues with the biggest price increases…
Bond Price as % of face value
al a
KKR Income Opps Fund KIO NA 14.32 NA 10.2
8.50 7.35 -13.5 9.6
MFS Charter MCR
Nuveen Taxable Muni NBB 20.69 19.08 -7.8 6.1
Stock Performance PIMCO Corporate & Incm PTY NA 15.03 NA 10.0
CION Ares Dvsfd Crdt;C 25.30 NA NA 5.4
Nuveen OH Qual Muni NUO 15.90 13.32 -16.2 4.3
Nuveen PA Qual Muni NQP 14.59 12.25 -16.0 4.9 CION Ares Dvsfd Crdt;I 25.30 NA NA 5.4
Nuveen VA Qual Muni NPV 13.78 11.72 -14.9 4.6 CION Ares Dvsfd Crdt;L 25.30 NA NA 5.4

Issuer Symbol Coupon (%) Maturity Current One-day change Last week Close ($) % chg CNR Select Strategies 10.23 NA NA 0.0
e
PIMCO Corporate & Incm PCN NA 14.94 NA 8.7 PIMCO California Muni PCQ 13.25 16.31 +23.1 5.7
PIMCO HiInco PHK NA 8.07 NA 11.8 PIMCO California Mun II PCK 8.24 8.11 -1.6 5.3 GL Beyond Income 1.94 NA NA NE
Frontier Communications FTR 7.125 March 15, ’19 98.500 4.00 n.a. 2.64 –2.58
PIMCO Inco Str Fd PFL NA 10.52 NA 9.7 52 wk OFI Carlyle Pvt Credit;A NA NA NA NS
United States Steel X 6.250 March 15, ’26 93.500 1.75 91.219 20.02 –0.94
ci on

PIMCO Incm Strategy Fd II PFN NA 9.44 NA 9.7 Prem Ttl OFI Carlyle Pvt Credit;I NA NA NA NS
Springleaf Finance AMGFIN 7.125 March 15, ’26 93.500 1.25 92.250 ... ... Putnam Mas Inco PIM 4.79 4.34 -9.4 6.4 Fund (SYM) NAV Close /Disc Ret OFI Carlyle Pvt Credit;L NA NA NA NS
PulteGroup PHM 7.875 June 15, ’32 104.250 1.05 n.a. 25.61 –0.77 Putnam Premier Income Tr PPT 5.33 4.87 -8.6 6.3 Specialized Equity Funds OFI Carlyle Pvt Credit;Y NA NA NA NS
XPO Logistics XPO 6.125 Sept. 1, ’23 98.250 0.88 100.710 51.55 15.84 Wells Fargo Multi-Sector ERC NA 11.22 NA 11.0 Broadstone Rl Asst Acc:I 10.21 NA NA NS Palmer Square Opp Inc 18.86 NA NA 4.8
Foresight Energy FELP 11.500 April 1, ’23 87.770 0.77 87.000 3.44 –1.71 World Income Funds Broadstone Rl Asst Acc:W 10.21 NA NA NS Resource Credit Inc:A 10.78 NA NA 6.3
Abeerden Asia-Pacific FAX 4.70 4.00 -14.9 9.0 Resource Credit Inc:C 10.89 NA NA 5.6
QualityTech QTS 4.750 Nov. 15, ’25 95.000 0.75 94.500 ... ... Brandywine Global Incm BWG 12.43 10.28 -17.3 8.9
CC Real Estate Income;Ad 8.89 NA NA -1.9
Owens–Brockway Glass Container OI 5.875 Aug. 15, ’23 102.030 0.66 100.602 ... ... Griffin Inst Access RE:A 27.26 NA NA 6.0 Resource Credit Inc:I 10.81 NA NA 6.6
er rs

Etn Vnc Short Dur Fd EVG NA 12.62 NA 6.5

Griffin Inst Access RE:C 26.60 NA NA 5.2 Resource Credit Inc:L 10.77 NA NA 6.1
MS EmMktDomDebt EDD 7.42 6.35 -14.4 9.4
…And with the biggest price decreases PIMCO Dynamic Credit PCI NA 21.84 NA 8.6 Griffin Inst Access RE:I 27.49 NA NA 6.3 Resource Credit Inc:W 10.78 NA NA 6.3
PIMCODynamicIncomeFund PDI NA 29.95 NA 8.4 NexPointHCOpp;A 15.92 NA NA NS World Income Funds
Sable Permian Resources Land AMEPER 7.375 Nov. 1, ’21 27.750 –3.25 37.250 ... ... NexPointHCOpp;C 15.86 NA NA NS Destra Int&Evt-Dvn Crd:I 23.77 NA NA NS
PIMCO Income Opportunity PKO NA 24.72 NA 8.9
Alta Mesa Holdings ALTMES 7.875 Dec. 15, ’24 70.000 –2.75 72.500 ... ... PIMCO Strat Income Fund RCS NA 9.37 NA 8.9 NexPointHCOpp;Z NA NA NA NE National Muni Bond Funds
m e

PetSmart PETM 7.125 March 15, ’23 61.500 –2.75 66.000 ... ... Templeton Emerging TEI NA 9.40 NA 11.7 NexPointRlEstStrat;A 19.58 NA NA 2.1 Tortoise Tax-Adv Soc Inf 9.96 NA NA NS
Covey Park Energy COVPAR 7.500 May 15, ’25 91.500 –1.50 93.875 ... ...
EP Energy EPENEG 8.000 Feb. 15, ’25 49.000 –1.50 53.000 ... ...
m rp

Chesapeake Energy
CNG Holdings
CHK
CNGHLD
8.000 Jan. 15, ’25
9.375 May 15, ’20
96.000
94.500
–1.25
–1.25
98.000
n.a.
2.33
...
–9.69
...
Borrowing Benchmarks | WSJ.com/bonds
Tapstone Energy TAPENE 9.750 June 1, ’22 81.250 –1.25 83.000 ... ...
*Estimated spread over 2-year, 3-year, 5-year, 10-year or 30-year hot-run Treasury; 100 basis points=one percentage pt.; change in spread shown is for Z-spread. Money Rates December 14, 2018
Note: Data are for the most active issue of bonds with maturities of two years or more
Sources: MarketAxess Corporate BondTicker; Dow Jones Market Data Key annual interest rates paid to borrow or lend money in U.S. and international markets. Rates below are a
co Fo

guide to general levels but don’t always represent actual transactions.

Insider-Trading Spotlight Inflation Week
Latest ago
—52-WEEK—
High Low
Week
Latest ago
—52-WEEK—
High Low
Trading by ‘insiders’ of a corporation, such as a company’s CEO, vice president or director, potentially conveys Nov. index Chg From (%) Six month 2.90056 2.88581 2.90088 1.77443
new information about the prospects of a company. Insiders are required to report large trades to the SEC level Oct. '18 Nov. '17 Treasury bill auction One year 3.09769 3.10056 3.14413 2.04763
within two business days. Here’s a look at the biggest individual trades by insiders, based on data received by 4 weeks 2.325 2.365 2.365 1.230
U.S. consumer price index 13 weeks 2.375 2.365 2.375 1.320 Euro Libor
Thomson Financial on December 14, and year-to-date stock performance of the company All items 252.038 –0.33 2.2 One month -0.410 -0.413 -0.390 -0.420
26 weeks 2.480 2.495 2.495 1.460
KEY: B: beneficial owner of more than 10% of a security class CB: chairman CEO: chief executive officer CFO: chief financial officer Core 259.105 0.02 2.2 Three month -0.356 -0.354 -0.343 -0.389
CO: chief operating officer D: director DO: director and beneficial owner GC: general counsel H: officer, director and beneficial owner Six month -0.325 -0.327 -0.304 -0.339
Secondary market
I: indirect transaction filed through a trust, insider spouse, minor child or other O: officer OD: officer and director P: president UT: International rates One year -0.212 -0.215 -0.205 -0.263
unknown VP: vice president Excludes pure options transactions Fannie Mae
Week 52-Week 30-year mortgage yields Euro interbank offered rate (Euribor)
Biggest weekly individual trades Latest ago High Low
One month -0.368 -0.368 -0.367 -0.372
30 days 4.290 4.338 4.607 3.450
Based on reports filed with regulators this past week No. of shrs in Price range ($) $ Value 60 days 4.308 4.356 4.632 3.469
Three month -0.311 -0.315 -0.311 -0.329
Prime rates Six month -0.238 -0.246 -0.238 -0.279
Date(s) Company Symbol Insider Title trans (000s) in transaction (000s) Close ($) Ytd (%)
U.S. 5.25 5.25 5.25 4.50 One year -0.128 -0.137 -0.128 -0.194
Other short-term rates
n-

Canada 3.95 3.95 3.95 3.20

Buyers Japan 1.475 1.475 1.475 1.475 Value 52-Week
Week 52-Week Latest Traded High Low
Nov. 28-30 Zillow Group Z J. Hoag DI 949 33.63-36.30 33,614 32.38 -20.9 Policy Rates Latest ago high low
Dec. 4-6 Iovance Biotherapeutics IOVA W. Rothbaum DI 1,221 9.86-10.31 12,454 9.68 21.0
DTCC GCF Repo Index
Euro zone 0.00 0.00 0.00 0.00 Call money Treasury 2.287 37.366 2.447 1.339
Dec. 10-12 Reata Pharmaceuticals R. Mcgaughy DOI 111 57.93-60.07 6,584 59.47 110.0 Switzerland 0.50 0.50 0.50 0.50
no

RETA
4.00 4.00 4.00 3.25 MBS 2.295 131.700 2.448 1.372
Dec. 10-12 J. Traweek BI 111 57.93-60.07 6,584 Britain 0.75 0.75 0.75 0.50
Australia 1.50 1.50 1.50 1.50 Open Implied
Dec. 6-10 Trinity Industries TRN B. Boze DOI 281 21.90-21.99 6,146 20.95 -22.3 Commercial paper (AA financial) Settle Change Interest Rate
Dec. 11 Newmark Group NMRK B. Gosin CEO 585 9.25 5,407 9.07 -43.0 Overnight repurchase 90 days 2.56 2.72 2.80 1.54
Dec. 10 B. Gosin CEO 306 8.59 2,632 DTCC GCF Repo Index Futures
U.S. 2.36 2.33 2.55 1.33 Libor
Dec. 12 Live Oak Bancshares LOB J. Mahan CEOI 334 16.08 5,378 14.84 -37.8 Treasury Dec 97.595 -0.010 607 2.405
U.S. government rates One month 2.45500 2.40019 2.45513 1.49500 Treasury Jan 97.530 unch. 73 2.470
Dec. 10-11 Mohawk Industries MHK F. Balcaen DI 43 119.15-119.50 5,182 116.98 -57.6 Treasury Feb 97.525 0.005 76 2.475
Three month 2.80069 2.77106 2.80069 1.61331
Dec. 6-7 F. Balcaen DI 23 118.91-119.92 2,736 Discount
Nov. 29 Zillow Group ZG J. Hoag DI 100 35.59 3,559 31.97 -21.5 2.75 2.75 2.75 2.00 Notes on data:
Dec. 12 Aramark ARMK E. Foss CEO 93 32.46 3,004 32.08 -24.9 U.S. prime rate is the base rate on corporate loans posted by at least 70% of the 10 largest U.S. banks,
Federal funds and is effective September 27, 2018. Other prime rates aren’t directly comparable; lending practices
Dec. 4-6 United Continental Holdings UAL E. Shapiro D 30 90.80-92.92 2,777 87.74 30.2 vary widely by location; Discount rate is effective September 27, 2018. DTCC GCF Repo Index is
Effective rate 2.2400 2.2300 2.2500 1.3300 Depository Trust & Clearing Corp.'s weighted average for overnight trades in applicable CUSIPs. Value
Nov. 30 JM Smucker SJM R. Smucker OD 20 103.09 2,062 101.91 -18.0 High 2.3500 2.3500 2.4500 1.5625 traded is in billions of U.S. dollars. Federal-funds rates are Tullett Prebon rates as of 5:30 p.m. ET.
Dec. 13 Royal Caribbean Cruises RCL R. Fain CEOI 19 105.60 1,996 107.09 -10.2 Low 2.1300 2.1000 2.1900 1.1900 Futures on the DTCC GCF Repo Index are traded on NYSE Liffe US.
Dec. 11-13 Entercom Communications ETM J. Field ODI 300 6.42-6.74 1,982 6.38 -40.9 Bid 2.1700 2.1700 2.2000 1.3100 Sources: Federal Reserve; Bureau of Labor Statistics; DTCC; SIX Financial Information;
Dec. 6-10 J. Field ODI 300 6.32-6.50 1,929 Offer 2.2000 2.2000 2.4000 1.3200 Tullett Prebon Information, Ltd.
Nov. 29-Dec. 6US Auto Parts Network PRTS D. Kanen B 1576* 1.11-1.25 1,904 1.19 -52.8

Sellers Cash Prices | WSJ.com/commodities Friday, December 14, 2018

Dec. 11-12 Walmart WMT S. Walton DOI 1,574 93.64-94.33 147,634 91.85 -7.0
Dec. 11-12 A. Walton BI 1,574 93.64-94.33 147,634 These prices reflect buying and selling of a variety of actual or “physical” commodities in the marketplace—
Dec. 11-12 J. Walton BI 1,574 93.64-94.33 147,634 separate from the futures price on an exchange, which reflects what the commodity might be worth in future
Dec. 4 IQVIA Holdings IQV J. Connaughton DI 768 123.72 94,964 118.02 20.6 months.
Dec. 7 Workday WDAY D. Duffield DO 310 159.52-166.60 50,010 162.03 59.3 Friday Friday Friday
Dec. 3 A. Bhusri CEO 300 162.85-167.60 49,661 Platinum,Engelhard industrial 787.0 Wheat,Spring14%-pro Mnpls-u 6.9150
Dec. 10-12 Okta OKTA B. Horowitz DI 620 63.31-67.03 40,438 66.81 160.9 Energy Platinum,Engelhard fabricated 887.0 Wheat,No.2 soft red,St.Louis-bp,u 5.5500
Dec. 11-13 Cracker Barrel Old Country Store CBRL S. Biglari BI 130 174.70-175.20 22,684 171.43 7.9 Propane,tet,Mont Belvieu-g n.q. Palladium,Engelhard industrial 1240.0 Wheat - Hard - KC (USDA) $ per bu-u 5.2825
Butane,normal,Mont Belvieu-g 0.7433 Palladium,Engelhard fabricated 1340.0 Wheat,No.1soft white,Portld,OR-u 6.2250
Dec. 7 ID Systems IDSY N. Subin UTI 2,111 5.80 12,245 5.29 -23.8 Aluminum, LME, $ per metric ton *1924.0
Coal,C.Aplc.,12500Btu,1.2SO2-r,w 81.400 Food
Dec. 6 AutoZone AZO W. Giles CFO 14 866.36-874.47 11,747 871.24 22.5 Coal,PwdrRvrBsn,8800Btu,0.8SO2-r,w 11.950 Copper,Comex spot 2.7605
Dec. 6 M. Finestone O 12 864.58-876.37 10,273 Iron Ore, 62% Fe CFR China-s 69.9 Beef,carcass equiv. index
Dec. 6-7 Groupon GRPN E. Lefkofsky DOI 3,000 3.04-3.09 9,195 3.14 -38.4
Metals Shredded Scrap, US Midwest-s,m 363 choice 1-3,600-900 lbs.-u 189.17
Steel, HRC USA, FOB Midwest Mill-s 747 select 1-3,600-900 lbs.-u 178.05
Dec. 4 AbbVie ABBV L. Schumacher O 94 91.77-94.34 8,810 85.61 -11.5 Gold, per troy oz Broilers, National comp wghtd-u,w 0.8611
Dec. 7 Equity Residential EQR S. Zell CB 122 71.83 8,752 69.94 9.7 Engelhard industrial 1236.75 Fibers and Textiles Butter,AA Chicago 2.1900
Engelhard fabricated 1329.51 Cheddar cheese,bbl,Chicago 131.00
Dec. 10 Capital City Bank Group CCBG E. Mitchell BI 324 24.75 8,030 24.80 8.1 Handy & Harman base 1235.35 Burlap,10-oz,40-inch NY yd-n,w 0.5500 Cheddar cheese,blk,Chicago 140.75
Dec. 10 D. Smith BI 324 24.75 8,030 Handy & Harman fabricated 1371.23 Cotton,1 1/16 std lw-mdMphs-u 0.7685 Milk,Nonfat dry,Chicago lb. 94.00
Dec. 11 Illinois Tool Works ITW M. Larsen CFO 59 132.73-132.98 7,806 131.04 -21.5 LBMA Gold Price AM *1244.45 Cotlook 'A' Index-t *88.25 Coffee,Brazilian,Comp 1.0240
LBMA Gold Price PM *1242.75 Hides,hvy native steers piece fob-u n.q. Coffee,Colombian, NY 1.2858
Dec. 10 Facebook FB S. Sandberg COI 55 139.63-142.44 7,752 144.06 -18.4 Krugerrand,wholesale-e 1287.10 Wool,64s,staple,Terr del-u,w n.q. Eggs,large white,Chicago-u 1.1750
* Half the transactions were indirect **Two day transaction Maple Leaf-e 1299.48 Flour,hard winter KC 15.15
p - Pink Sheets American Eagle-e 1299.48 Grains and Feeds Hams,17-20 lbs,Mid-US fob-u 0.61
Mexican peso-e 1500.17 Barley,top-quality Mnpls-u n.a. Hogs,Iowa-So. Minnesota-u 54.31
Buying and selling by sector Austria crown-e 1216.10 Bran,wheat middlings, KC-u 135 Pork bellies,12-14 lb MidUS-u 1.3259
Austria phil-e 1299.48 Corn,No. 2 yellow,Cent IL-bp,u 3.5000 Pork loins,13-19 lb MidUS-u 0.7344
Based on actual transaction dates in reports received this past week
Silver, troy oz. Corn gluten feed,Midwest-u,w 115.0 Steers,Tex.-Okla. Choice-u n.q.
Engelhard industrial 14.5500 Corn gluten meal,Midwest-u,w 479.3 Steers,feeder,Okla. City-u,w 156.38
Sector Buying Selling Sector Buying Selling Engelhard fabricated 17.4600 Cottonseed meal-u,w 253
Handy & Harman base 14.6170 Hominy feed,Cent IL-u,w 98 Fats and Oils
Basic Industries 1,719,221 5,252,678 Finance 5,964,747 73,195,424
Handy & Harman fabricated 18.2710 Meat-bonemeal,50% pro Mnpls-u,w 213 Corn oil,crude wet/dry mill-u,w 26.5500
Business services 226,958 14,716,527 Health care 1,053,599 45,401,027 LBMA spot price *£11.6000 Oats,No.2 milling,Mnpls-u 3.2550 Grease,choice white,Chicago-h 0.2400
Capital goods 0 0 Industrial 8,387,148 15,611,213 (U.S.$ equivalent) *14.6800 Rice, Long Grain Milled, No. 2 AR-u,w 24.25 Lard,Chicago-u 0.3100
Consumer durables 9,334,203 396,049 Media 4,577,078 339,172 Coins,wholesale $1,000 face-a 10864 Sorghum,(Milo) No.2 Gulf-u 7.4950 Soybean oil,crude;Centl IL-u 0.2842
Other metals SoybeanMeal,Cent IL,rail,ton48%-u 309.30 Tallow,bleach;Chicago-h 0.2650
Consumer nondurables 5,535,689 20,155,530 Technology 2,239,544 52,058,891 *794.0 Soybeans,No.1 yllw IL-bp,u 8.4700
LBMA Platinum Price PM Tallow,edible,Chicago-u 0.3250
Consumer services 2,988,964 29,663,926 Transportation 4,098,245 50,241
Energy 3,419,412 3,178,747 Utilities 3,869 14,603,452 KEY TO CODES: A=ask; B=bid; BP=country elevator bids to producers; C=corrected; E=Manfra,Tordella & Brooks; G=ICE; H=Hurley Brokerage;
M=monthly; N=nominal; n.a.=not quoted or not available; R=SNL Energy; S=Platts-TSI; T=Cotlook Limited; U=USDA; W=weekly, Z=not quoted. *Data as of 12/13
Sources: Thomson Financial; WSJ Market Data Group Source: WSJ Market Data Group
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

THE WALL STREET JOURNAL. * * Monday, December 17, 2018 | B9

MARKETS

Tencent Offers Don’t

Live Up to the Hype
BY STEVEN RUSSOLILLO
Tencent Holdings Ltd., one
of China’s most influential
companies, also is one of the
most active technology inves-
tors, backing some of the
world’s biggest initial public
offerings. But the technology
giant’s support doesn’t make
these deals a sure thing for in-
vestors.
The latest from its stable is
Tencent Music Entertain-
ment Group. The Chinese mu-
sic-streaming company started
trading Wednesday, in one of
the biggest U.S.-listed IPOs by
market value in years. Shares
note. He said these companies
tend to get hyped up by the
market because they have Ten-
cent’s support but often fail to
live up to lofty expectations.
Bankers and investors say
recently listed companies also
have been caught up by gen-
eral market turbulence, which
has partly been driven by wor-
ries about U.S.-China trade
tensions and slowing global
growth.
“IPO market valuations for
some select companies have
been on the richer side,” said
Johnson Chui, head of equity
capital markets for Asia Pa-
cific at Credit Suisse in Hong

rose 7.7% in their debut, but a
5% drop Friday to $12.81 a
share dropped the stock below
its IPO price of $13.
Since 2017, at least 19 Ten-
cent-backed companies have
gone public in either the U.S.,
The big company
focuses on profit
measures that exclude
valuation gains.
Hong Kong or South Korea, ac-
cording to Arun George, an an-
alyst who publishes on the in-
dependent research platform
BRENDAN MCDERMID/REUTERS
Kong, speaking broadly about
post-IPO performance. “In or-
der for these companies to
perform in the aftermarket,
supportive market conditions
are a key factor.”
Tencent, which operates
China’s biggest social network
and is one of the world’s larg- Santa Claus visited the NYSE floor in November. A year-end boost likely is needed to keep the S&P 500 from posting a loss for 2018.
est videogame makers, has it-
Stocks Could Use a Santa Rally
self struggled. Shares have
fallen 24% this year, roughly
double the Hang Seng’s loss.
It still maintains a market
cap of $376 billion, according BY JESSICA MENTON The S&P 500's percentage “But if they raise rates one starts to a December since
to FactSet. Taking stakes in change over the seven-day more time like everyone is ex- 1980.
companies has been a lucra- Investors hoping to avoid 'Santa Claus rally' trading period pecting and deliver more dov- Still, other portfolio manag-
tive endeavor for Tencent. In the first annual decline for ish commentary, I think Santa ers already are snatching up
2017, almost one-quarter of its major U.S. stock indexes since 8% will come flying down the stocks ahead of the coming
$11.1 billion in net income 2015 are dreaming of a Santa chimney.” holidays.
came from valuation gains in Claus rally. 6 In a Santa Claus rally, the Eric Marshall, director of
companies it has stakes in that Since 1969, the S&P 500 has first half of December is usu- research and portfolio man-

.
Smartkarma. Several, like Ten- went public. averaged a gain of 1.3% over 4 ally weaker as tax-loss selling ager at Hodges Capital Man-

cent Music, trade below their
IPO prices.
The list includes Hong
Kong-listed stocks such as
Meituan Dianping, whose app
spans services such as food
delivery and hotel bookings,
and China Literature Ltd.,
“Regarding stock-price per-
formances, when we make an
investment, we focus on the
long-term strategic value and
synergies to be created from
the partnership with the in-
vestee companies rather than
the short-term financial re-
us l,
the seven-day period that en-
compasses the last five ses-
sions of the year and the first
on two trading days of the new
year, according to Dow Jones
Market Data.
Such a year-end boost will
likely be necessary if the S&P
ly
dominates trading, with inves-
tors focusing on selling stocks
2 that have declined in value so
the loss can be used in that
0 tax year to offset gains on
other securities. In the second
–2
half of the month, when retail
investors retreat for the holi-
agement, recently increased
his exposure to Cinemark
Holdings Inc., the third-larg-
est U.S. cinema chain by loca-
tions. It yields a favorable div-
idend and the frequency of
new releases in 2019 should
bode well for its business, he

which operates the country’s
largest online publishing web-
site. Meituan, which has a $42
billion market capitalization,
has fallen 24% from its Sep-
turns,” a Tencent spokes- 500 is to avoid finishing in the days, institutional investors said. Cinemark shares are up
woman said. red. It is down 2.8% this year –4 scoop up bargains. When they 16% this year.
al a
e
She said the company fo- through Friday. 1970 ’80 ’90 2000 ’10 aren’t buying up stocks, that “Historically, whether you
cuses on profit measures that But trade tensions with Note: Years mark the end of the periods. signals something is amiss in have a recession or not, people
exclude valuation gains and China, slumping commodities the stock market, Mr. Hirsch still go to the movies,” Mr. Mar-
ci on

Source: Dow Jones Market Data

tember IPO through Friday.
Hong Kong’s benchmark Hang
Seng Index has slid 4.8% over
the same period.
China Literature nearly
believes analysts and institu-
tional investors generally did
the same.
Some Tencent-backed firms
have shined. Chinese electric-
er rs
prices and concerns about the
Federal Reserve’s pace of in-
terest-rate increases have
forced investors to reassess
the global growth outlook.
THE WALL STREET JOURNAL.
proach to raising rates next
year. Economists have scaled
back their predictions for
said.
Santa’s failure to deliver
typically doesn’t bode well for
stocks heading into the new
year. The past six times the
shall said. “It’s a very afford-
able form of entertainment.”
Sandy Villere, portfolio
manager at Villere Balanced
Fund, said his fund has added

doubled on its first trading
day about 13 months ago. It is
now down 30% from its IPO
price. In comparison, the Hang
vehicle maker NIO Inc., which
some consider as an emerging
rival to Tesla Inc., has risen
24% since its September list-
m e
The Fed is widely expected 2019, calling for two rate in- rally didn’t materialize were to its position in Weight
Wednesday to raise interest creases next year rather than followed by three flat years in Watchers International Inc.
rates for a fourth time this the three they expected when 1994, 2004 and 2015, two bear on expectations the company
year and likely indicate how surveyed last month. markets in 2000 and 2008 and will add more subscribers dur-

Seng Index is down 10% from ing through Thursday. Shang- much and how often officials Any change in that senti- a downturn that ended in Feb- ing the New Year’s resolution
that time. hai-based e-commerce com- expect to increase rates in ment would likely rattle the ruary 2016, according to Stock season. The stock is up 8% in
“While Tencent’s backing pany Pinduoduo Inc. has coming years. already volatile stock market. Trader’s Almanac. 2018, but has lost about one-
m rp

can prove to be a winner for
companies, it often proves to
be a loser for IPO investors,”
Mr. George said in a research
jumped 19% since going public
in July. Both are listed in the
U.S. and have beaten the S&P
500.
co Fo
Dovish signals from Fed
Chairman Jerome Powell late
last month helped reassure in-
vestors that the central bank
will take a more measured ap-
“If the Fed flips back to be-
ing more hawkish, that would
be the thing that derails this,”
said Jeffrey Hirsch, editor of
the Stock Trader’s Almanac.
This month already has
been particularly rocky, with
the S&P 500, Dow Jones In-
dustrial Average and Nasdaq
Composite off to their worst
third of its value in the fourth
quarter.
“Yesterday’s losers could
certainly be tomorrow’s win-
ners,” Mr. Villere said.

Currencies
U.S.-dollar foreign-exchange rates in late New York trading
Fri
US$vs,
YTDchg Fri
US$vs,
YTDchg
Mideast “has not made any progress
whatsoever, and the entire
plan has been delayed,” said a
Saudi Energy Minister Khalid
al-Falih has said.
Still, there is not a set time-
vatization plans.”
Mr. Khoman also noted that
the 30% drop in oil prices over
Country/currency
Americas
Argentina peso
in US$ per US$ (%)

.0262 38.1533 105.1

Country/currency
Europe
Czech Rep. koruna
in US$ per US$ (%)

.04385 22.807 7.2

Fails to See senior Kuwaiti oil official, cit-
ing bureaucracy and govern-
ment cabinet reshuffles.
table in place, as Aramco’s IPO
plans remain on hold indefi-
nitely, according to people fa-
the past two months “could
act as a conduit to bring these
privatization strategies back
Brazil real
Canada dollar
Chile peso
Ecuador US dollar
.2553 3.9170 18.3
.7471 1.3386 6.5
.001462 683.80 11.1
1 1 unch
Denmark krone
Euro area euro
Hungary forint
Iceland krona
.1514 6.6038
1.1309 .8843
.003494 286.23
.008115 123.23
6.4
6.1
10.5
19.0
IPO Boom Oman has not yet com-
pleted preparatory studies
that had been slated for last
miliar with the matter.
What happens with Aramco
“will set the tone for the rest,”
on track.”
Saudi Arabia’s ACWA Power
was planning to list a 30%
Mexico peso .0494 20.2388 2.9 Norway krone .1161 8.6164 5.0 year. The government thinks stake on Riyadh’s stock ex-
Uruguay peso .03104 32.2200 11.9 Poland zloty .2634 3.7959 9.1 Continued from page B1 current market conditions change by the end of this year.
Venezuela b. fuerte .000004248567.8501 2403414.4 Russia ruble .01497 66.787 15.8 Salalah Methanol, Oman’s aren’t ideal given volatile oil It was also considering a sec-
Oman thinks current
n-

Sweden krona .1104 9.0613 10.7

Asia-Pacific Abraj Energy Services, prices, according to senior ondary listing, potentially in
Switzerland franc 1.0018 .9982 2.4
Australian dollar .7175 1.3937 8.8
Turkey lira .1864 5.3635 41.3 Oman’s Muscat Electricity Omani oil officials. market conditions London. But the company
China yuan .1448 6.9076 6.2 Distribution Co., Kuwait Pe- “Some IPOs in the Gulf re- postponed the flotation in
Ukraine hryvnia .0361 27.7240 –1.5
Hong Kong dollar .1280 7.8129 ...
UK pound 1.2583 .7947 7.4 troleum International, Ku- ceived lukewarm responses
aren’t ideal given September amid challenges
India rupee .01390 71.920 12.6
no

Indonesia rupiah .0000686 14585 8.2 Middle East/Africa wait Foreign Petroleum Ex- that made everyone rethink volatile oil prices. meeting regulatory require-
Japan yen .008821 113.37 0.6 Bahrain dinar 2.6524 .3770 –0.02 ploration Co. and Kuwait Oil their plans,” said a senior oil ments for a dual listing, ac-
Kazakhstan tenge .002697 370.85 11.5 Egypt pound .0557 17.9530 1.0 Tanker Co. have all put for- official from the Sultanate of cording to people familiar
Macau pataca .1243 8.0453 –0.01 Israel shekel .2650 3.7730 8.4
Malaysia ringgit .2389 4.1855 3.1 Kuwait dinar 3.2854 .3044 1.0
ward privatization plans that Oman. with the process.
New Zealand dollar .6797 1.4712 4.4 Oman sul rial 2.5958 .3852 0.1 have either been halted or Saudi Arabia officially re- said Ehsan Khoman, head of Across the region, IPOs
Pakistan rupee .00719 139.125 25.7 Qatar rial .2747 3.640 –0.2 permanently shelved, accord- mains committed to listing research for the Middle East have lost their appeal. “As
Philippines peso .0188 53.062 6.2 Saudi Arabia riyal .2665 3.7517 0.03 ing to senior government offi- Aramco, the centerpiece of the at MUFG Bank Ltd. “Credibility long as oil prices remain at a
Singapore dollar .7265 1.3764 2.9 South Africa rand .0694 14.4016 16.5
South Korea won .0008828 1132.70 6.1
cials and people familiar with country’s economic transfor- of the broader reform program comfortable level for every-
Sri Lanka rupee .0055617 179.80 17.1 Close Net Chg % Chg YTD%Chg the matter. mation plan, but the kingdom in the Gulf will increasingly be one, I don’t think many of the
Taiwan dollar .03241 30.856 4.0 WSJ Dollar Index 90.85 0.27 0.30 5.67 Kuwait’s raft of shelved will proceed with the IPO “at a brought into question if au- IPOs previously announced
Thailand baht .03046 32.830 0.7 Sources: Tullett Prebon, Dow Jones Market Data IPOs aimed for 2020 launch time of its own choosing when thorities fall short in their will materialize,” an Omani oil
Vietnam dong .00004294 23288 2.5 dates. But the government conditions are optimum,” ability to deliver on their pri- official said.

THE TICKER | Market events coming this week

Monday Jabil 0.88/0.80 Estimate/Year Ago($) Walgreens 1.43/1.28

Micron Tech. 2.94/2.45 General Mills 0.81/0.82
Empire Manufacturing
Paychex 0.63/0.59 Friday
Nov., previous 23.3
Dec., expected 21 Wednesday Durable-goods orders
Fed policy meeting ends
Thursday Oct., previous down 4.3%
Earnings expected* Target rate 2.00%-2.25% Initial jobless claims Nov., expected up 1.5%
Estimate/Year Ago($)
Previous 206,000
Heico 0.48/0.40 Mort. bankers indexes Gross domestic product
Expected 215,000
Oracle 0.78/0.70 Purch., previous up 3% Percentage change, annual rate
Red Hat 0.87/0.73 Refinan., previous up 2% EIA report: natural gas 3rd qtr. sec. est. up 3.5%
Previous change in stocks in 3rd qtr., third est. up 3.5%
billions of cubic feet
Tuesday EIA status report
Previous change in stocks in down 77 GDP deflator
Fed 2-day meeting starts millions of barrels 3rd qtr. sec. est. up 1.7%
Crude oil down 1.2 Leading indicators 3rd qtr., third est. up 1.7%
Building permits Gasoline up 2.1 Oct., previous up 0.1%
Oct., previous 1.263 mil. Distillates down 1.5 Nov., expected 0.00% Personal income
Nov., expected 1.26 mil. Oct., previous up 0.5%
Current account Philadelphia Fed survey Nov., expected up 0.3%
RICHARD B. LEVINE/NEWSCOM/ZUMA PRESS

Housing starts 2nd quarter, previous Nov., previous 12.9

Oct., previous 1.228 mil. $101.46 billion deficit Dec., expected 14.5 Personal spending
Nov., expected 1.23 mil. 3rd quarter, expected Oct., previous up 0.6%
$126.3 billion deficit Earnings expected* Nov., expected up 0.3%
Earnings expected* Estimate/Year Ago($)
Estimate/Year Ago($) Existing-home sales Accenture 1.86/1.79 Earnings expected*
Darden Restaurants Oct., previous 5.22 mil. Carnival 0.70/0.63 Estimate/Year Ago($)
0.91/0.73 Nov., expected 5.20 mil. Cintas 1.70/1.31 CarMax 1.01/0.81
FactSet 2.29/2.04 Conagra 0.57/0.55
FedEx 3.95/3.18 Earnings expected* Nike 0.46/0.46

* FACTSET ESTIMATES EARNINGS-PER-SHARE ESTIMATES DON’T INCLUDE EXTRAORDINARY ITEMS (LOSSES IN PARENTHESES)  ADJUSTED FOR
STOCK SPLIT NOTE: FORECASTS ARE FROM DOW JONES WEEKLY SURVEY OF ECONOMISTS A Nike store in New York. The sportswear maker is scheduled to post quarterly results on Thursday.
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
B10 | Monday, December 17, 2018
Investors Turn Focus to Fed’s 2019 Rate Path
The Federal Reserve will conclude its final policy
meeting of the year Wednesday. With traders
widely expecting the central bank to raise
short-term interest rates, many say the
attention will be on Fed officials’ comments on
the economy. Volatile markets and mixed
inflation data have amplified investors’ doubts
about how many times the Fed can raise rates
next year. Also fueling the hesitation are
remarks by Chairman Jerome Powell, who said
in November that rates looked like they were
‘just below’ neutral, a level that would neither
speed nor hamper economic growth.
The result: Many traders have
begun pricing in a more gradual
course of rate increases
for 2019.
While higher oil prices
can lead to higher inflation,
pushing the Fed to move faster with
its rate increases, weak commodities
markets can do the opposite.
U.S. crude-oil futures price
$80 a barrel
70
60
50
2018
Market-implied odds of at
least three rate increases*
by the end of 2019
0% February
*Assumes the Federal Reserve raises rates as expected in December
Sources: CME Group (rate-increase odds); Refinitiv’s Lipper (flows); Dow Jones Market Data (crude); Tullett Prebon Information (yields); Federal Reserve Bank of St. Louis via Freddie Mac (mortgage rates)
Email: heard@wsj.com
Adobe Posts
Higher Profit
But at a Cost
Even for Adobe, the bill
eventually comes due.
In late September, Adobe
announced its largest acquisi-
tion ever with the purchase of
marketing-software maker
Marketo for $4.75 billion.
That followed Adobe’s $1.7
billion buy of Magento just
four months earlier.
no
Neither was considered
cheap, but Adobe received the
benefit of the doubt consider-
ing its stellar execution over
the past few years. Before the
company’s fiscal fourth-quar-
ter results late Thursday,
Adobe’s share price was up
41% for the year.
But those deals also are
weighing on the company’s
bottom line in the near term.
Adobe projected adjusted per-
share earnings of $1.60 for
the fiscal first quarter and
$7.75 for the 2019 fiscal year.
Both were below Wall Street’s
estimates.
The full-year target still
implies growth of 15% for its
bottom line. But Adobe’s per-
share earnings growth has av-
eraged 51% over the past four
years, making the company a
stark exception to the conven-
tional wisdom that a cloud-
software business must burn
piles of money in the name of
growth. Adobe’s shares closed
down 7% on Friday following
the report.
Adobe says the effect on
earnings comes mostly from
the accounting impact of its
acquisitions. Most analysts
believe this will be short-
lived. Mark Moerdler of Bern-
stein projects adjusted per-
share earnings will return to
20%-plus growth by the next
fiscal year. But Adobe’s shares
were trading for 32 times for-
ward earnings before the re-
port, leaving little room for
error. Even top-notch cloud
stocks occasionally need to
let out some air.
—Dan Gallagher
THE WALL STREET JOURNAL.
MARKETS
Doubts about the U.S.
In another sign investors economy and monetary policy
are pricing in less inflation ahead, have helped drive money into utilities
funds focused on Treasury inflation- shares, whose dividends look more attractive
protected securities have suffered outflows. to investors less optimistic about growth.
Net flows into or out of the iShares Net flows into or out of the iShares U.S.
TIPS bond exchange-traded fund utilities exchange-traded fund
$500 million $100 million
30%
0 0
–500 –100
2018 2018
Many investors say that, Mortgage rates,
even with the possibility of a more which hit their highest level in
gradual rate path, they remain cautious more than seven years in October,
heading into 2019. The yield curve, the gap have fallen with Treasury yields. That is
between two- and 10-year Treasury yields, has good news for economists who have worried
continued to flatten in the fourth quarter. Historically, that the housing sector will face increasing
that has signaled trouble ahead for the U.S. economy. pressure as rates rise.
6% Recession 5.0%
Treasury yields, monthly
4.5 20%
3 10-year note
Average rate for a 30-year
fixed-rate mortgage in the U.S.
4.0
2018
0 Two-year
2006 ’10 ’15 ’18
.
ly
10%
on Federal Reserve Powell
Chairman Jerome says rates
Powell says rates are ‘just
are a ‘long way’ below’
us l,
from neutral neutral
al a
e
Fed minutes show
ci on
officials have greater
confidence in hitting
2% inflation
March April May June July August September October November December
er rs
Reporting by Akane Otani, graphic by Peter Santilli/THE WALL STREET JOURNAL.
HEARD ON THE STREET
m e
m rp
FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard
No Reason to Panic
co Fo
Ready for the Holidays
Share-price performance
Over J&J’s Trouble
10%
0
Walmart Investors hate uncertainty, vestors have a better idea of
goes the old Wall Street cli- what the company might
–10
ché. The saying is especially owe in judgments and settle-
Macy's apt when a blue-chip stock ments.
known for being a safe in- In addition to its prodi-
–20 Lowes
vestment suddenly becomes gious dividend, J&J has
n-
Target a source of worry. spent nearly $3 billion so far
Johnson & Johnson this year on stock buybacks.
–30 Best Buy
shares plunged 10% Friday At the very least, it isn’t
September October November December after Reuters reported that hard to imagine that pace
Source: SIX THE WALL STREET JOURNAL. company executives have slowing.
known for decades that its But while investors should
Picking Retail’s Winners
baby powder sometimes be wary, they needn’t panic;
tested positive for small J&J’s strong finances and di-
amounts of asbestos. verse revenue base are good
J&J said in a statement coping mechanisms. The
Investors have every rea- sales from the closed toy baskets. that its baby powder is safe company has $20 billion in
son to expect that this holi- specialist, according to in- Macy’s is the most under- and asbestos-free, calling the cash and securities on its
day season will be even bet- dustry experts. estimated retail operation allegations an “absurd con- books. It generated $16 bil-
ter for retailers than the last Walmart also will be a out there. The company has spiracy theory.” But inves- lion in operating cash flow in
one. Low unemployment, ris- top-three winner in toy made moves to improve its tors, faced with the possibil- the first three quarters of
ing wages and strong con- sales, vying with Target and margins, including closing ity of years of expensive the year—more than double
sumer confidence provide Amazon.com. Its toy depart- unprofitable stores and im- litigation and hearings from dividends paid. And even if
prime conditions for spend- ment already was strong be- proving its inventory man- angry members of Congress, the uproar caused a hit to
ing. And with many chains fore America’s leading toy agement. Its holiday surge were clearly rattled. The related products, baby-care
no longer in business, the re- retailer exited the game. may mostly come not from stock had its worst day in sales of $472 million were
maining retailers have more On top of that, the job and its own efforts but from the more than 16 years. only about 2% of the com-
business to pick up. wage increases of the past failure of its competitors. Litigation risks are diffi- pany’s top line in the third
Toys “R” Us, Sports Au- year have largely gone to the Some 300 department-store cult to quantify and take quarter.
thority, RadioShack, Bon- sort of consumers who shop branches that previously years to play out, but they That is good reason not to
Ton, Payless Shoes, H.H. at Walmart. Their holidays competed with Macy’s stores can be severe. Shares of Ger- overreact to the news, even
Gregg, The Limited, Gymbo- will be better—as will the re- have shut their doors in the man agricultural giant Bayer though a rapid rebound in
ree and Gander Mountain all tailer’s, which has been rid- past year. Those consumers are down nearly 40% this the stock seems unlikely.
have disappeared from the ing 40% growth in its e-com- are very likely to wander year, in part due to legal is- —Charley Grant
retail landscape. On top of merce sales. over to Macy’s instead. sues surrounding its
that, others like Sears and Lowe’s isn’t the most ob- Best Buy has long been a Roundup weed killer prod-
J.C. Penney are in retreat. vious stop for holiday shop- model for how to fight Ama- uct. Wound Care
That is good news for the re- ping. Its biggest season is in zon. It has made its stores J&J already faces thou- Johnson & Johnson's
tailers still standing. But the spring, when consumers do double duty as ware- sands of lawsuits over its share price
even among these, investors take to home-improvement houses, speeding up shipping baby powder. In July, a jury
can expect to see winners projects. times and giving consumers found that the company $150
and losers. Here are five that But Christmas is its sec- the option to pick up online should pay nearly $4.7 bil-
may win big: ond biggest, and the store is purchases in store. At the lion in damages to 22 plain-
Target has made massive the go-to place to find gifts same time, it has invested in tiffs for related baby-powder 140
investments, remodeling its for men. That will be en- its stores’ minishops by safety problems. While the
stores at the same time it hanced this year by its Samsung and Microsoft fea- company is appealing that
has invested in its e-com- acquisition of exclusive turing specially trained sales judgment, it would amount
merce capabilities. Those are rights to Craftsman tools, staff able to offer insights to roughly half this year’s ex- 130
the right moves in the digi- which used to belong consumers can’t find online. pected dividend payout. And
tal era, when consumers to Sears. That its previous competi- with the broader stock mar-
want the flexibility and con- As Sears disappears from tors, including RadioShack, ket suddenly wobbling, in- 120
venience of both bricks-and- the retail landscape, Lowe’s Circuit City and H.H. Gregg, vestors aren’t in the mood to
mortar and online shopping. also has been taking market are all bankrupt doesn’t hurt hear bad news of any type.
In the wake of Toys “R” Us’s share in the appliances cate- either. Among national The stock now trades at 110
demise, Target also has in- gory. Consumers buying consumer-electronics retail- about 16 times this year’s
July Dec.
creased its square footage power tools might also find ers, Best Buy is the last man adjusted earnings forecast. It
for toys. It is expected to themselves adding more standing. is possible the multiple could Source: SIX
take the largest share of toy kitchen appliances to their —Elizabeth Winkler fall further—at least until in- THE WALL STREET JOURNAL.
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

JOURNAL REPORT

© 2018 Dow Jones & Company. All Rights Reserved. THE WALL STREET JOURNAL. Monday, December 17, 2018 | R1

Follow
The Experts
Online at
wsj.com/experts

.
ly
MICHAL CZERWONKA FOR THE WALL STREET JOURNAL

on
us l,
al a
e
ci on

WHEN
er rs

Caryn Arrowood handles the financial

F
BY CHERYL WINOKUR MUNK
side of Montemar Wines in Lompoc,
m e

COUPLES
Calif., while her husband, Steve, does
or some couples, retire- the winemaking, which complements
ment is a time to stop each of the spouse’s strengths.
m rp

working and relax to-

gether. For others, it’s a
time to start working, penter, 65 years old, hunts down baby-

RETIRE—
together. equipment deals, and Mr. Carpenter, 67,
Specifically, they’re handles the computer side of the busi-
co Fo

launching businesses. ness and the marketing.

They’re doing so for reasons that can The Carpenters say the business—
be financial, emotional or both. On the fi- which started paying for itself after the

& THEN
nancial side, consider that a 2017 study first few orders—allows them to make
by the American Institute of CPAs found some extra money in retirement, without
that nearly half of nonretired adults in being too taxing on their time. They get
the U.S. said they weren’t confident they to set their own hours, which allows
would be financially prepared to retire them to do other things they love, such

START A
when it was time. Working together is an as spending time with family, tending to
opportunity for some couples to turn a their horses and potbellied pigs, and
hobby or long-held passion into a crucial camping. “It works around our life. Our
source of income. life doesn’t work around it,” Mr. Carpen-
ter says.

BUSINESS
There are, of course, ways such to-
n-

getherness can go wrong. Financial advis-

‘When you work with ers who work with couples running busi-
your spouse, you can’t nesses together warn that without careful
planning and execution, it can put signifi-
no

simply go home at the cant financial and emotional strain on a

end of the day and marriage. “It’s easier said than done,”
says Doug Amis, chief executive of Cardi-
ignore the issues.’ Becoming entrepreneurs can bring nal Retirement Planning Inc. in Durham,
N.C., who works with several couples who
emotional and financial benefits. have gone into business together after re-
And plenty of challenges. tiring from their full-time careers.

Then there’s the emotional aspect. As Many questions

people expect to live longer and health- Ideally, couples considering setting up
ier, they’re increasingly looking to retain shop in retirement should begin discus-
the kind of stimulation and challenge sions while they are still working, says
they enjoyed in their working years. At Kyle Whipple, a financial adviser with C.
the same time, by working together, cou- Curtis Financial Group in Plymouth, Mich.
ples can stay connected in a way they This gives them ample time to discuss
weren’t always able to when they were the specifics of a potential business and
pursuing individual careers. the type of lifestyle they want to lead, he
“We’ve got a lot of life left, and we’re says.
not ready to hang up our spurs,” says Indeed, there are financial, operational
Craig Carpenter of Fort Collins, Colo., and emotional decisions to consider be-
who with his wife, Sandy, operates a fore starting out. On the financial and op-
business renting out baby gear through erational side, couples need to ask them-
the online platform BabyQuip. Ms. Car- Please turn to the next page

INSIDE

A Young Librarian’s Goal: How to Boost It Isn’t All About the

Full-Time Writer Employee Generosity Overhead
She seeks advice on saving for For one, corporate matching When evaluating nonprofits,
the career change and paying programs make it more likely potential donors must think
down student debt R2 workers will donate R4 more broadly R8

A Look at Student-Loan What to Do if You’re Tips on Deciding Which Filing

Forgiveness Retiring in a Bear Market Status Is Best
What is available from federal The most important thing: Focus Do you file jointly or separately?
and state programs—and how to your preparations on things you There may be some powerful
make sure you qualify R3 can control R6 reasons to do the latter R9

Bringing Social Security Into Want to Learn a Apps to Help Children Learn
the 21st Century New Hobby? About Charity
The program was devised for a It has never been so easy or so These digital tools make it easier
different era, but four simple cheap, thanks to a host of digital for children to get into the habit
strategies can update it R4 and online tools R8 of giving R10
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

R2 | Monday, December 17, 2018 THE WALL STREET JOURNAL.

JOURNAL REPORT | WEALTH MANAGEMENT

Couples Start William Seavey who runs a bed

& breakfast in Cambria, Calif.,

Businesses
(inset) with his wife, Eleanor,
says couples who are business
partners can’t afford—on a

Together in personal or professional level—

to let conflicts fester.

Retirement
more than three or four days a week,
Continued from the prior page but his wife sometimes finds it hard
selves a host of questions, including: to turn away business. At first, there
—How much money would the were some hard feelings because she
business need to make to be worth booked guests without first getting
the effort? his buy-in. But after he stormed off
—Where will our funding come in anger a few times, she started
from? checking with him before accepting
—What is the projected time com- reservations.
JOSHUA CURRY FOR THE WALL STREET JOURNAL (THE SEAVEYS); CHET STRANGE FOR THE WALL STREET JOURNAL (THE CARPENTERS)

mitment for each of us? Mr. Seavey says it’s not always
—How will the business be man- easy, but couples who are business
aged day-to-day? partners can’t afford—on a personal
—Will we need to hire outside or professional level—to let conflicts
help—and can we afford it? fester. “When you work with your
—What is our exit timeline and spouse,” he says, “you can’t simply
strategy? go home at the end of the day and
—What is our plan if one of us ignore the issues.”
wants to exit before the other? The Seaveys recently made the
Couples also need to keep in mind joint decision to scale back a bit
that there may be limits to what more and try to enjoy life in other
they can earn without affecting So- ways besides their business. For ex-
cial Security payments if either one ample, they served a year-long stint
is younger than full retirement age. as co-presidents of a local couples
On the emotional side, spouses dance club, and they travel fre-
should aim to honestly assess quently. While working and
whether they have the right business being in business for them-
chemistry. For instance, do they selves is a “juggling act,” Mr.
have the personalities that will com- Seavey says, it’s hard to
plement each other in business—or imagine them not working in
is one spouse likely to overpower some capacity. “We don’t
the other when it comes to decision- want the traditional retire-
making? If both spouses are strong- ment,” he says. Their income
willed, does each have the ability goes toward property taxes,
and desire to compromise? various home expenses and
“If you routinely argue about travel.
something as trivial as whether the

.
toilet paper hangs in front or in back Together

ly
of the roll, you’re in for some bigger too much?
arguments on inventory or business Another factor for couples to
development,” says Mr. Amis. “And consider is whether a jointly
there’s bigger dollar signs attached on run business will mean too
to it.” much time together.
Each spouse also should identify The Carpenters say their
what he or she hopes to get out of arrangement works well be-
the business. Then, the couple cause they aren’t spending
us l,

should determine together whether Fort Collins, Colo., their entire day working together on
they have similar desires or have dif- couple Craig and their baby-equipment business. At
al a
e
ferent and incompatible expecta- Sandy Carpenter say their busiest, in the summer and
tions. their baby-equipment around holidays, they put in about 15
Another issue to discuss are the business, BabyQuip, to 20 hours a week, Ms. Carpenter
ci on

potential trade-offs. For example, gives them extra says.

running a business could interfere money in retirement, For the Seaveys, dividing job re-
with travel plans or leave less time without being too sponsibilities helps them maintain
to spend with grandchildren. Cou- taxing on their time. the balance necessary for the bed-
ples also should consider whether and-breakfast to run smoothly. They
er rs

they will have too much time to-
gether, such that their marriage be-
comes strained.
“A lot of people really like the
say they are both strong-willed and
opinionated, so taking on different
duties so they don’t step on roles helps ensure they generally
each other’s toes. This was aren’t at odds. He’s the handyman
m e

idea, but once they talk about the particularly important to and marketing and promotions guy.
nitty-gritty, they decide it’s some- Caryn Arrowood, 57, who She shops for supplies, makes fur-
thing that sounds better in theory,” owns and operates Mon- nishing decisions and plays hostess
m rp

Mr. Whipple says.
While couples need to have frank
discussions together, Mr. Whipple
also recommends they run their
ideas by a close friend, a financial
temar Wines in Lompoc, when they have guests.
Calif., with her husband, In the Arrowoods’ case, each
Steve, 59. spouse spends significant time pur-
“I had to have my own suing his or her own interests apart
job,” says Ms. Arrowood, a from the business. She spends con-
co Fo

adviser or accountant to help them
identify questions and concerns they
might not otherwise have thought
of. Sometimes couples can get
caught up in an idea, but once some-
one asks them pointed questions
about real issues, they become more
circumspect, he says.
Brian Parker, co-founder and
managing director at EP Wealth Ad-
visors in Torrance, Calif., tries to
simulate for couples various things
that could go wrong, such as higher-
than-expected startup costs or a sig-
former finance manager at siderable time with friends and fam-
Raytheon Co. “There ily near the couple’s home in Los An-
needed to be clear defini- geles, while he often stays at their
tion of what he was responsible for decision-making capabilities. She together and still have time to travel home in Lompoc, closer to the win-
versus what I’m responsible for.” handles the financial side of the win- several weeks a year and do other ery, so he can be hands-on in the
Mr. Arrowood retired in 2012 ery, while her husband does the activities they enjoy, collectively and winemaking process. They travel to-
from his sales position at Raytheon. winemaking, which complements individually. “You have to like the gether, but he also takes trips on his
He told his wife, who was still work- both their strengths. In addition, job that you’re doing, otherwise it own, such as one to Mexico earlier
ing, that he wanted to use this time they hired a compliance professional could lead to tension and frustra- this year to see concerts by Dead &
to focus on the wine business they and an accountant—functions nei- tion,” Ms. Arrowood says. Company, the successor to the Grate-
had incorporated in 2009 after two ther of them had the time, expertise ful Dead.
decades of making wine in their ga- or desire to do. The Arrowoods say Making Compromises “Couples have to find their own
rage for friends and family. Initially, the business has broken even and is Over the course of their 15 years in happy medium—the balance that
she was reluctant to leave her full- on track to beat initial expectations. the bed-and-breakfast business, Wil- works for them as far as indepen-
n-

nificant business loss.
Establishing roles
Couples who own businesses to-
no
time position out of concern she’d be Another potential issue is when liam Seavey, 71, and his wife Eleanor, dence and their own interests and
tied down to a job at the winery that couples aren’t on the same page age 69, have had some conflicts over their own time,” Ms. Arrowood says.
she didn’t love. about work vs. more typical retire- how much time to spend on the
Their solution was to carve out a ment activities like travel. The Arro- business. Ms. Winokur Munk is a writer in

gether in retirement say it’s impor- role that she would be happy with— woods say they are happy to have Mr. Seavey prefers not to have West Orange, N.J. Email her at
tant for each spouse to have distinct a managerial one in which she had built a small but growing business guests at their Cambria, Calif., home reports@wsj.com.

THE GAME PLAN

A YOUNG LIBRARIAN’S GOAL: BE A FULL-TIME WRITER

a strong start. While Ms. Duncan has sizable
BY CHRIS KORNELIS student debt, Ms. Waddell applauds her for
tucking money away for retirement already.
EMILY DUNCAN reads to babies and writes She would like to see Ms. Duncan use
about monsters. some of the money in her savings to pay off
As a youth-services librarian, she orders her credit card and as much as she can of the
graphic novels, helps create outreach pro- high-interest student loan (a $7,000 balance)
grams for children and hosts a story time for while keeping at least six months of expenses
those under 24 months. As a novelist, she’s in in savings. She should transfer the rest of her
the thick of a three-book deal. The first book savings to an online savings account, where
in her “Something Dark and Holy” series, she can get a return in the 2% range. Any bal-
“Wicked Saints,” is being released in April. ance remaining on the high-interest student
At 25, she enjoys her work, but she’d like loan the financial planner suggests paying off
to get her finances to a place where someday with one of her book-deal payments.
she can be a full-time writer and a part-time Ms. Waddell says Ms. Duncan should save
librarian. Along the way, she’d like to get her $26,000 to $30,000 for a 20% down payment
retirement plans shored up as well. on a home—perhaps again drawing from her
Ms. Duncan lives in Cuyahoga Falls, Ohio, book deal. With 20% down, Ms. Waddell esti-
and makes $33,000 a year as a librarian, mates the mortgage would be comparable to
bringing home about $2,180 a month after what Ms. Duncan is paying in rent.
taxes, insurance and contributing 10% to a re- Once she’s paid off her credit card and the
tirement account. She also has money still to high-interest student loan and has six months
ANNA LAPP

be paid from her $100,000 book deal. After of expenses in savings (roughly $13,000), Ms.
taxes and her agent’s 15% cut, Ms. Duncan Waddell suggests Ms. Duncan raise her re-
says she still has roughly $40,000 to take tirement contribution to 15%.
home over the next few years. An adviser says Emily Duncan should pay down high-interest student debt with savings. Ms. Waddell also says the young writer
She currently has about $6,000 in her re- shouldn’t feel like she has to pay off all of her
tirement account and $18,000 in savings. student debt before she lives a little. “She’s
But Ms. Duncan also has $86,000 in stu- car payment; $124 for internet, electricity, that she says she would prefer to use toward done a really cool thing by getting this book
dent-loan debt, with rates of about 3% to Hulu and Spotify; $80 for car insurance and buying a townhome some day. deal. Taking a couple thousand dollars and do-
6.9%. She pays about $600 monthly on that $40 on gas; about $200 on groceries, $150 ing something to celebrate is totally justified.”
debt. She has $1,000 on a credit card and eating out; roughly $120 on miscellaneous ex- Advice from a pro: Danika Waddell, a certi-
owes $6,000 on her 2013 Mitsubishi Mirage. penses; and about $50 a month on books. fied financial planner at Goddard Financial Mr. Kornelis is a writer in Seattle. He can be
Other monthly expenses include $137 for a She pays $720 a month in rent, money Planning in Seattle, says Ms. Duncan is off to reached at reports@wsj.com.
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

THE WALL STREET JOURNAL. Monday, December 17, 2018 | R3

JOURNAL REPORT | WEALTH MANAGEMENT

All You Need to Know About proving every eligible application for
PSLF under the “strict rules” estab-
lished by Congress. It is also conduct-
ing regular outreach to borrowers
into two categories: those tied to a
specific occupation or those tied to
living in a specific region, or both.
Many of these programs cover pri-

Student-Loan Forgiveness about the program via social media,

Here’s what is available from both federal and state form (the document borrowers can
plans—and how to make sure you qualify use to ensure they’re on track to-
ward forgiveness) approved, nearly
12% are repaying their loans under a
nonqualifying repayment plan, ac-
webinars and in person events.
“FSA is committed to enhancing
the process, outreach, and communi-
cations related to the program,” she
wrote in an email.
Teacher loan forgiveness: Teachers
who work for five consecutive years
in qualifying schools—typically those
vate student loans, which federal
debt-forgiveness programs don’t.
“Almost every single state has at
least one program,” says Betsy May-
otte, president of the Institute of
Student Loan Advisors, which re-
cently compiled a list of 115 debt-
forgiveness programs.
While the list is a good place to
start, Ms. Mayotte cautions that the

S
BY JILLIAN BERMAN
cording to the department. Congress serving low-income students-—may eligibility criteria and funding avail-
authorized a temporary expansion of be able to receive up to $17,500 in able for many of these programs
TUDENT-LOAN FORGIVENESS MIGHT seem out of reach PSLF earlier this year for borrowers forgiveness on certain federal loans, changes constantly, so borrowers
for many of the 44 million people who have educational who met all of the program’s other depending on what subject they need to check with the entities offer-
debt. But some of these borrowers may qualify for re- requirements but were using certain teach. They also need to have been a ing forgiveness directly before mak-
lief—if they know where to look. nonqualifying repayment plans. new borrower as of Oct. 1, 1998, ing a financial plan based on them.
Advocates also worry that bor- meaning that they had no prior In some cases, borrowers may be
Student-loan forgiveness has gotten somewhat of a bad
rowers who have Federal Family Ed- loans still outstanding as of this able to combine a state or local pro-
rap in recent months, largely because of controversy sur- ucation Loans, which don’t qualify date. Also, they must have com- gram with Public Service Loan For-
rounding the federal Public Service Loan Forgiveness pro- for PSLF, are working in eligible jobs pleted at least one of their qualify- giveness, says Heather Jarvis, an at-
gram, which allows public servants with a certain type of federal stu- and repaying their debt, assuming ing years of teaching after the torney and student-loan expert.
dent loans to have their debt discharged after 120 monthly payments. they’ll qualify for forgiveness only to 1997-1998 academic year. Occupation-focused programs
The first cohort of borrowers became eligible for forgiveness under later face a rude awakening. Borrow- Teachers can’t use this program
PSLF in the fall of 2017 and in the months since, advocates have ers can consolidate FFEL debt into and PSLF at the same time, so they
grown concerned that confusion need to pick that one that best suits
about the program’s require- their financial needs. The American Of the roughly 28,000
Federation of Teachers, a national
ments, combined with sloppy Are You Eligible? teachers union, tends to advise bor-
people who sought loan
implementation on the part of
student-loan companies and the
Borrowers who want to know if they are on track to qualify for the federal Public rowers to focus on PSLF, which of- forgiveness under PSLF
Service Loan Forgiveness program can submit an employment certification form. A fers superior benefits, unless the as of June 2018, just 96
government, have made it diffi- separate application is needed to claim forgiveness. borrower doesn’t plan to stay in
cult for eligible borrowers to public service for the full 10 years. have succeeded.
qualify. Of the roughly 28,000 Forms processed* Reasons for denial
people who had filed an applica- Denied Employer not qualified Perkins Loan cancellation: Nurses,
tion for debt forgiveness under 892,432 firefighters, public defenders and
the program as of June 2018, others may be eligible for cancella-
just 96 had loans forgiven, gov- tion of their Perkins Loans, federal typically center on health care, edu-
ernment data show. 21% need-based loans for both undergrad- cation or legal-services jobs, Ms.
33% uate and graduate students. Typically, Mayotte says. Location-based pro-
PSLF may be the best known Missing/
loan-forgiveness program, but it Total: incorrect a percentage of the loan is forgiven grams, while not as widespread,
2,695,188 information for each year of service, culminating simply require the borrower to live
isn’t the only one. Not only are in 100% of the loan being discharged in a certain region, she adds.
No eligible 47%

.
there other federal programs, after up to seven years. Of course, when considering any
67% loans
cities and states across the coun-

try offer some debt forgiveness
for people who work in certain
jobs or even live in certain areas.
Here is a closer look at some
programs and their require-
ments:
ly
32% Congress ended schools’ authority loan-forgiveness program tied to a
to make new Perkins Loans last year, job or place, borrowers need to ask
so there won’t be any new borrowers themselves how committed they are
on Approved receiving them—at least for now. to staying put for a long period.
* As of August 2018 1,802,756
While a loan-forgiveness pro-
Source: Department of Education's Federal Student Aid Office/ Income-driven repayment forgive- gram essentially helps to make a
FedLoan Servicing THE WALL STREET JOURNAL.
ness: Borrowers using income-driven low-paying career possible with
plans for federal loans can have the high student-debt levels, it “really
us l,

Federal programs
PSLF: To be eligible, borrowers must
work full-time in a public-service job
for the right type of employer—typi-
time payments toward their debt.
It’s hard to say exactly why so
al a
e
many borrowers who applied to have
their loans forgiven were rejected. It
could be that many simply hadn’t
ci on
Direct Loans, but they may not know
to do that unless they receive infor-
mation about it from their student-
loan servicer. Borrowers who think
they might qualify for PSLF should
balance of the debt discharged after
20 or 25 years of payments, even if
they aren’t working in public service.
But under current law, debt relief is
taxed as income, so borrowers may
isn’t an incentive to go into a par-
ticular occupation,” says Mark Kan-
trowitz, the publisher of Saving-
forcollege.com and a financial-aid
expert. “In most cases,” he says,

cally a federal, state or local govern-
ment or a nonprofit with a 501(c)3
designation. They also must have the
right type of loan—a federal Direct
Loan—and be in an income-driven
been working in public service or
paying down their loans for the full
10 years. But some data indicate that
confusion over the program’s re-
quirements played a role.
er rs
reach out to their servicer and ask
whether they have Direct Loans, and,
if not, how they can consolidate
their student debt into Direct Loans.
Liz Hill, an Education Department
face a heftier-than-normal tax bill
after their loans are discharged.
State, local programs
States and regions across the country
“you might actually be better off
taking a job in a different field that
pays better.”
Ms. Berman is a reporter at Mar-

repayment plan to benefit. Borrow-
ers also need to have made 120 on-
no
Of borrowers who have had at spokeswoman, says the agency’s of- offer a variety of student-loan for- ketWatch. You can email her at
least one employment certification fice of Federal Student Aid. is ap- giveness programs, most of which fall jberman@marketwatch.com.
m e
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co Fo
n-

I THOUGHT THE STRESS WOULD

KILL ME BEFORE THE CANCER DID.
Cancer comes with many different challenges. That’s why we provide free rides to
chemo, a free place to stay near treatment, and a 24/7 helpline for advice and support.

Please give what you can today at cancer.org

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R4 | Monday, December 17, 2018 THE WALL STREET JOURNAL.

JOURNAL REPORT | WEALTH MANAGEMENT

4 Simple Changes
To Bring Social Security Into the 21st Century
The program was which private pension income
has shifted from the automatic
devised for a totally lifelong payouts of a defined-
different era. benefit plan to the uncertain
It’s time to update. income stream of a 401(k).
One option is to have a one-
time 5% increase in benefits at
BY ALICIA H. MUNNELL
age 85, with a capped dollar

S
amount.
OCIAL SECURITY was
designed in the 1930s  Increase the minimum benefit.
for a working dad and Raising the minimum benefit
stay-at-home mom. would protect workers with
The program remains very low average wages. Cur-
as crucial as ever, and some rently, Social Security has a
simple updates could help special minimum benefit on its
modernize it. books; the original aim of this
Ensuring Social Security provision was to protect full-
benefits can be paid in the fu- career workers from poverty
ture should be the most im- in retirement. However, this
portant item on any retire- benefit has severely eroded
ment-income agenda, because over time due to a design flaw
the program serves as the so that virtually no new retir-
backbone of the retirement ees today are even eligible to
system. Social Security cur- receive it. One proposal is to
rently faces a long-term defi- increase the minimum benefit
cit, which could be closed eq- to 125% of the poverty level
uitably with additional and index that amount by
revenue by some combination wages going forward.
of increasing the payroll-tax Given Social Security’s
rate and expanding the Social long-term financial shortfall,
Security wage base. Relying on these four enhancements
additional revenue, rather should be fully offset by bene-
than benefit cuts, to shore up fit reductions to ensure that
the system’s finances is impor- they are cost neutral to the
tant because Social Security program. Three types of off-
benefits are modest, and many sets that would do the trick
of today’s current workers are are: reducing benefits for

.
already at risk of having insuf- higher earners, lowering the

ly
ficient savings for retirement. spousal benefit, and slightly
Solving the system’s finan- trimming the annual cost-of-
cial shortfall should also be living adjustment. These off-
taken as an opportunity to up- sets, together with the benefit

MIKEL JASO
date the program, given that
the nature of the family and
on improvements, would make
the system a bit more progres-
the employment patterns of sive and would shift benefits
women have changed dramati- from points in time when re-
us l,

cally since the 1930s. Most their costs could be easily off- tially reflected in retirement Who Is Collecting tirees are less vulnerable
married women now work, set by small changes else- benefits. Currently, individuals (early in retirement, married)
al a

About 62 million individuals are being paid a Social Security benefit.

which means that they in-
creasingly receive benefits
based on their own earnings
e
where in the program. who reduce their work hours
or temporarily leave the labor
 Improve widow’s benefits. force to raise a family may
ci on
to points when they are more
Retired workers Widow(er)s and parents vulnerable (late in retirement,
widowed).

and receive a smaller share of
the couple’s benefit when wid-
owed. At the same time, an in-
crease in divorce and a decline
in marriage have sharply
This change would offset the
decline in benefits relative to
household benefits experi-
enced by wives who had
worked. Under the current
er rs
significantly reduce their life-
time earnings and, thus, their
Social Security benefits. Tradi-
tionally, the Social Security
spousal benefit implicitly rec-
Disabled workers Spouses of retired and disabled workers The bottom line is that So-
Men Women cial Security needs to continue
to do the job it was designed
to do: provide a base income
on which people can build for

raised the percentage of
households headed by single
mothers. Despite their in-
creased workforce activity,
system, a woman in a tradi-
tional one-earner couple re-
ceives a widow’s benefit equal
to 67% of what the household
m e
ognized this caregiving role. a secure retirement. Given the
However, many women today 82% 67% fragility of the current retire-
aren’t eligible for a spousal 13% ment system, policy makers
benefit because either they need to ensure that Social Se-

women continue to be at a dis- received when both members aren’t married or they qualify curity will have the resources
advantage in the labor market were still alive. In contrast, a for their own worker’s benefit. 17% 12% to fulfill this task in the fu-
compared with men, in large woman in a two-earner couple One proposed policy change is ture. In addition, the targeted
m rp

part due to their caregiving
duties. In addition, life expec-
tancy at 65 has increased from
about 14 years to 20 years so
the value of benefits at older
with equal earnings receives a
widow’s benefit of just 50%.
To help widows of all types of
households, one idea is to in-
crease the widow’s benefit to
co Fo
to allow caregivers to average
their earnings over 30 rather
than 35 years when determin-
ing their Social Security bene-
fits.
7% benefit improvements outlined
here could help ensure that
> 1% > 1% Note: Totals do not equal 100% due to rounding. the system reflects societal
changes that have occurred
over the past 80 years.

ages has become more salient.
Finally, the increase in in-
equality means that those at
the lower end of the wage dis-
tribution remain vulnerable.
Given these developments,
four changes could greatly im-
prove the protections offered
by Social Security. If these
changes are well targeted,
75% of the couple’s benefit,
with a capped dollar amount
to target the improvement
more to low- and middle-in-
come households.
 Adopt caregiver credits.
This addition would ensure
that time spent raising chil-
dren would be at least par-
n-
Beneficiaries by age
 Increase benefits at Dr. Munnell is the director
an advanced age. Under 18 85 or older of the Center for Retirement
This change would protect the Research at Boston College,
oldest old. As life expectancy 18-61 62-64 65-74 75-84 and the Peter F. Drucker
rises, more retirees face the professor of management
higher risk of poverty associ- 5% 13% 8% 42% 23% 9% sciences at Boston College’s
ated with declining resources Carroll School of
and widowhood. This risk is Note: Data as of December 2017 Management. Email her at
even greater in a world in Source: Social Security Administration THE WALL STREET JOURNAL. reports@wsj.com.

Ways to Boost Employee Generosity

EXPERTS' VOICES | TED JENKIN
no

IF YOU’RE BEHIND ON
RETIREMENT SAVINGS
A recent Allianz Life study found that nearly half
of individuals between the ages of 45 and 65
surveyed consider themselves to be retirement
chasers. These are people who are saving for re-
tirement—but have either fallen behind on where
they should be, wish they could accumulate sav-
ings faster, or worry that if they don’t boost sav-
ings soon it will be too late to have a comfort-
able retirement. If you are a retirement chaser,
consider some moves I often suggest to clients:
Start using the 20/30/50 rule: This helps
chasers by having them take 20% off the top for
savings (retirement and other savings) 30% for
variable expenses and 50% for fixed expenses.
Rethink your risk tolerance: You need to bal-
ance your appetite for loss relative to the risk for
gaining the necessary return, so you can retire on
time. Four options for those behind on retirement
goals—reduce the goal, extend the time frame,
save more money or increase your rate of return.
—Ted Jenkin is co-CEO and founder of oXYGen Financial.
The Experts are industry and though leaders who
write on topics of their expertise. You can read this
full blog post and others at WSJ.com/Experts.
Among the things compa-
nies should know: Corporate
matching programs
make it more likely workers
will donate to charities
BY GENEVIEVE G. SHAKER
AND ROBERT K. CHRISTENSEN
EMPLOYEE GENEROSITY is a point of
pride for companies. But they could be
doing a much better job at getting their
workers to give to good causes.
Businesses often tout their work-
place-charity campaigns as part of their
social-responsibility efforts, yet the
numbers tell a different story. Some of
the most prominent workplace giving
groups have seen declining participa-
tion and contributions.
It seems that it’s time for companies
to overhaul their old strategies for get-
ting employees to give. So, what’s the
best way to do it?
To find the answers, we analyzed sur-
vey data from 2008 about charitable giv-
ing to workplace campaigns, together
with Jon Bergdoll, an applied statistician
at the Indiana University Lilly Family
School of Philanthropy at IUPUI.
In our analysis, 64% of people with
access to workplace programs gave at
work, donating an average of $227 dur-
ing the previous 12 months. Similar pro-
portions of male and female employees
donated. Older employees (48-66 years
old) gave more money than their youn-
ger co-workers. The higher the salary
and education levels, the bigger the gift
amounts.
Our research, published in the jour-
nal “Nonprofit Management & Leader-
ship,” revealed four key pieces of infor-
mation about workplace campaigns that
could help employers trying to boost
employee giving.
Employees respond differently based on
who asks. People were more motivated
to give when their employer asked than
when the request came from a co-worker
or friend. One possible explanation for
the disparity: People might expect such a
request from their employer, while it
might seem awkward coming from a
peer.
Employers should therefore be cau-
tious about using employees’ peers to
Incentive to Give
Nine out of 10 companies suveyed matched
employee donations in 2017.
Year-round policy
Dollars for doers
Disaster relief
Workplace-giving campaign
Other 19%
Source: The Conference Board/CECP's Giving in Numbers
THE WALL STREET JOURNAL.
raise funds in campaigns. When they do,
they should allow all employees a say in
creating and shaping the charity cam-
paigns. That way, employees will have a
sense of ownership of the campaign, so
that a request from a co-worker won’t
feel so strange.
Employees don’t need—or want—atten-
tion for their giving. Employees were
not motivated by the promise of being
recognized for taking part in campaigns.
Employers should publicly celebrate gen-
erosity by focusing on the collective im-
pact of employee giving, not by praising
individuals.
Employees want to pick their causes.
The ability to choose among charities
had a close relationship to people’s giv-
ing: During the 12 months of the study,
people with a choice of charities gave an
average of $58 more than those who did
not. Employers should not only let em-
ployees choose from a range of charities,
they should also regularly discuss those
options to make sure they reflect em-
ployee preferences.
Employees like to spend company dollars
on philanthropy. Employees who were of-
fered company matching programs were
80% more likely to give—and gave 8% more—
than those without the programs.
53% Companies should not only offer this
option but, ideally, offer it in combina-
tion with the one above. In other words,
48%
employees should not only be able to
choose where their own charity money
46% goes, but also where matching money
goes.
That’s because our research shows
that being able to choose a charity is a
stronger motivator than getting match-
ing contributions. So, if employees also
have the chance to direct somebody
else’s dollars as they see fit, they may
be inspired to donate more of their own
dollars, too.
Dr. Shaker is associate professor of
philanthropic studies in the Indiana
University Lilly Family School of Phi-
lanthropy at IUPUI. Dr. Christensen is
an associate professor at the Romney
Institute of Public Management at
Brigham Young University. Email: re-
ports@wsj.com.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

.
ly
on
us l,
al a
e
ci on
er rs
m e
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no
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
R6 | Monday, December 17, 2018
ASK ENCORE | GLENN RUFFENACH
What to Do if You’re Retiring in a Bear Market
The most important thing: Focus your preparations on things you can control
I’m planning to retire in
2019, but the turmoil in the
markets has me worried.
Any thoughts about retiring
in a bear market? Is it bet-
ter to wait for things to set-
tle down?
I have no idea when, or if,
markets will settle down.
What I do know is that it’s
easy to get caught up in is-
sues that are out of our
hands: the markets, interest
rates, changes in government
programs, etc. At their worst,
such anxieties can leave peo-
ple paralyzed. Put another
way, you could end up delay-
ing—and delaying—your retire-
ment for a very long time.
So…instead, focus on the
parts of your retirement
preparations where you have
control.
Pop quiz: If you are, in fact,
retiring in 2019, how many of
the following steps—for which
you’re the boss—have you
taken?
 Setting a budget.
It’s among the most impor-
tant steps in planning for
later life, but fewer than 3 in
10 workers (29%) have put
pencil to paper, according to
the Employee Benefit Research In-
stitute.
 Reducing debt.
Yes, it’s difficult. But entering retire-
ment with little or no debt will
make it easier to ride out market
downturns. The numbers are worry-
ing: In 1989, about 21% of home-
owners age 65 and older had a
mortgage on their primary resi-
dence, according to the Urban Insti-
tute and the Federal Reserve. The
median amount: $16,800. In 2016,
41% of homeowners age 65-plus
had a mortgage, with a median
amount of $72,000.
 Timing Social Security.
We tackled this in a recent column.
Rather than simply jumping in the
pool at age 62 (the earliest most
people can claim benefits) or sort-
ing through different (and confus-
ing) claiming scenarios, take advan-
tage of a service that can run the
numbers for you. One good bet:
Open Social Security (opensocialse-
curity.com).
 Creating a pension.
The turmoil in the markets under-
scores the need for investments that
throw off income in retirement, re-
gardless of what’s happening on
Wall Street. If you’re fortunate
enough to have a pension, great. If
not, there’s no excuse for failing to
buy and hold products—dividend-
paying stocks, bond funds, annui-
THE GAME PLAN
A POT OF MONEY, A NEW HOME
no
RYAN CAVANAUGH
Logan Bowers and Jerina Pillert should set up personal and business emergency funds.
BY LISA WARD
JERINA PILLERT, 36, and her husband,
Logan Bowers, 37, are pursuing unusual
career paths. The couple owns a recre-
ational marijuana business, which she
manages. He, meanwhile, is running for
Seattle City Council.
Inspired by a relative who legally sells
medical marijuana in Arizona, Ms. Pillert
and Mr. Bowers applied in 2013 for a li-
cense to sell cannabis recreationally in
Seattle. Hashtag Cannabis opened in
April 2015. The couple now has two retail
outlets, and wants to open a third soon.
They want to buy a home and start a
family sometime in the next few years. If
they stay in Seattle, they anticipate pay-
ing about $800,000 for a home.
The couple’s primary source of income
is the business: a salary of $120,000 a
JOURNAL REPORT | WEALTH MANAGEMENT
ties—that generate cash.
 Managing taxes.
You can’t control tax rates, but you
on
can practice “tax diversification.”
Ideally, the more buckets you have—
individual retirement accounts, bro-
kerage accounts, Roth IRAs, munici-
us l,
al a
e
Take a Deep Breath
How workers feel about the idea that
ci on
preparing for retirement makes them
feel stressed:
Strongly
disagree
11% Strongly
er rs
agree
19%
Somewhat
disagree
m e
30% Somewhat
agree
m rp
40%
Source: Employee Benefit Research Institute, “2018
Retirement Confidence Survey”
co Fo
THE WALL STREET JOURNAL.
pal bonds, real estate—the more
flexibility you have in pulling funds
from different sources at different
times to minimize taxes.
 Planning for long-term care.
Difficult—but an area where failing
n-
year. They expect about $250,000 in
profit this year, which they plan to rein-
vest in the business or save for future
endeavors. Ms. Pillert runs the daily oper-
ations. Mr. Bowers, an ex-Amazon.com
Inc. employee, is focusing on his cam-
paign. If he wins in the November 2019
election, his salary likely will be more
than $120,000 a year.
Assets include a brokerage account
with about $400,000, about $30,000 in
Mr. Bowers’s 401(k), and $4,800 in a sav-
ings account. Their only debt is a student
loan of about $26,000, for which they pay
almost $370 monthly.
The biggest monthly expense is their
$2,400 rent. That includes utilities except
electricity, which costs $100. They pay
$210 for phone, internet and streaming;
$500 for groceries; $600 for restaurants,
coffee and bars; $300 for health insur-
ance; $150 for car insurance; and about
THE WALL STREET JOURNAL.
Medicare Advantage plan,
also known as a Medicare pri-
vate health plan or Medicare
Part C.
Such plans, which are of-
fered by private insurers, pro-
vide the same benefits as
(and, in some cases, more
bells and whistles than) tradi-
tional Medicare, and they fre-
quently come bundled with
prescription-drug coverage.
One big drawback, how-
ever, is that participants are
more restricted in terms of
the network of doctors and
hospitals they can use.
Two resources do a great
job of providing information
for people choosing between
Medicare Advantage and tra-
ditional Medicare. The Kaiser
Family Foundation (kff.org), a
nonprofit that specializes in
health-policy analysis, gives
an overview of Medicare Ad-
vantage plans across the
country (enrollment trends,
premiums, out-of-pocket lim-
its, etc.) and publishes reports
about the plans. (Example:
“How Robust Are Plans’ Phy-
SONIA PULIDO
sician Networks?”)
The nonprofit Medicare
Rights Center operates “Medi-
care Interactive” (medicarein-
.
teractive.org), which explains
ly
to act could prove devastating. As A spouse who claims a benefit how Medicare Advantage works
we noted in a recent article, more based on his or her living partner’s and does a nice job of comparing
people are looking at hybrid prod- earnings isn’t entitled to the en- types of coverage, including eligibil-
ucts, which combine long-term-care hanced benefit that results from ity, enrollment and costs.
coverage with potential life-insur- delayed retirement credits. Let’s say Next, pick up a copy of “Get
ance benefits. a husband is entitled to a monthly What’s Yours for Medicare,” by
Getting back to your original benefit of $2,000 at his full retire- Philip Moeller. We have highlighted
questions: Don’t let the markets ment age of 66, and a benefit of this book in the past, and with good
alone govern your decision; they $2,640 at age 70. And let’s say he reason: Mr. Moeller is one of the
could seesaw for years. People have first claims Social Security at 70. If most knowledgeable voices in the
more control over their financial fu- his wife files for a spousal benefit country about Medicare. In particu-
ture than they realize. And that at her full retirement age, she lar, his chapters about Medicare Ad-
should help take some of the anxi- would receive $1,000, or half the vantage tell you what to look for,
ety out of retirement planning. benefit her husband would have re- and what questions to ask, when
ceived at 66. Her spousal benefit you are evaluating various plans
i i i
doesn’t include the delayed retire- and insurers.
I am getting conflicting informa- ment credits her husband earned. Finally, Medicare itself has a
tion about survivors’ benefits. I de- But a surviving spouse is entitled valuable online tool, Plan Finder,
ferred claiming Social Security un- to these credits. If the husband in that can help you identify and eval-
til I was 70. On the one hand, I the above example dies first, the uate specific Medicare Advantage
have been told that, if I die before wife’s survivor’s benefit (if claimed plans. (Go to: medicare.gov/find-a-
my wife, her survivor’s benefit will at full retirement age or later) will plan/.) Choose “Basic Search,” enter
be equal to what my benefit would be based on 100% of what her hus- your ZIP Code, answer a few brief
have been at age 66. On the other band was collecting at the time of questions (you can enter the pre-
hand, I have read several articles his death, including his delayed re- scription drugs you take, if you
that state that my wife, at my tirement credits. wish), and this service will produce
death, can elect to receive my cur- a list of Medicare Advantage op-
i i i
rent “deferred benefit.” Which po- tions in your area, the health bene-
sition is correct? I will turn 65 in 2019, and I’m con- fits associated with each, the costs
sidering enrolling in a Medicare involved, drug coverage, and cus-
The answer: the latter. Advantage plan instead of tradi- tomer-satisfaction ratings. Invalu-
The subject here is “delayed re- tional Medicare. Can you recom- able.
tirement credits,” the increase in mend some good resources to help
benefits that people get when they with this decision? Mr. Ruffenach is a former reporter
delay claiming Social Security be- and editor for The Wall Street Jour-
yond their “full retirement age,” as If you take the Medicare Advan- nal. His column examines financial
defined by the Social Security Ad- tage route, you’ll have plenty of issues for those thinking about,
ministration. The rules involving company. About one-third of all planning and living their retirement.
these credits are different for Medicare beneficiaries (about 20 Send questions and comments to
spouses and surviving spouses. million people) are enrolled in a askencore@wsj.com.
$40 to charge their electric car. EXPERTS' VOICES | JONATHAN GUYTON
They don’t have rental or life insurance.
They try to save about $800 monthly.
Advice from a Pro: Eric Bailey, founder
and CEO of Bailey Wealth Advisors in Sil-
ver Spring, Md., suggests the couple first
build up their savings account to at least
three months of personal expenses in
case of an emergency. Similarly, he rec-
ommends setting aside three months of
operational expenses for the business.
The cannabis trade is an inherently risky
venture, he notes, since federal law still
considers cannabis an illegal substance.
Next, to afford an $800,000 home, Mr.
Bailey says they need to avoid using
A SMALL WINDOW
funds in the brokerage account—which
gives them a head start on retirement
FOR TAX STRATEGIES
and provides a buffer should anything When it comes to retirement planning,
happen to their business—and increase perhaps the most crucial—but often over-
their income. If Mr. Bowers is elected, his
salary can go mostly to saving for a looked—period is between the time of re-
down payment. The couple also should tirement and age 70. This is when there
talk to an accountant to see whether are fertile opportunities to both increase
their business is structured in the most income and decrease taxes in the years
tax-efficient way. Increasing their salary
that will follow. Here are a couple of ideas.
(the amount they pay themselves from
the business) also would make it easier Strategic income generation: The goal
to save for a down payment and help is to tax other sources now before they
them qualify for a larger home loan, also make more of your Social Security
though that could also make it more diffi- taxable. The best way to do this is to
cult to fund the business expansion.
use aftertax savings and investments for
Mr. Bailey suggests creating a 401(k)
plan for their business—with an employer income since (most) of it won’t appear on
match—and funding their accounts to the your tax return.
maximum of $18,500 a year. Another way Roth IRA conversion: You pay tax on
to beef up their retirement savings is an the converted amount now, at 12%, but
employee profit-sharing plan, where some
of the profits are invested in a separate
this money—and its future growth—never
tax-deferred account. appears on any future tax return.
Finally, he recommends more insurance. —Jonathan Guyton is principal at Cornerstone
They should have an umbrella policy, which Wealth Advisors Inc., a fee-only advisory firm in
would shield their assets should someone Minneapolis.
try to sue them. They also should buy
rental, life and disability insurance that The Experts are industry and though leaders
would replace their income should one of who write on topics of their expertise.
them no longer be able to work. You can read this full blog post and others
at WSJ.com/Experts.
Ms. Ward is a writer in Mendham, N.J.
She can be reached at reports@wsj.com.
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

THE WALL STREET JOURNAL. Monday, December 17, 2018 | R7

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R8 | Monday, December 17, 2018 THE WALL STREET JOURNAL.

JOURNAL REPORT | WEALTH MANAGEMENT

Want to Learn
A New Hobby?
It Has Never
Been So Easy
Or so cheap, thanks to a quire in-person instruction and/or
expensive equipment (scuba diving
host of digital tools and and falconry spring to mind), there
online communities are many more hobbies that you can
teach yourself, thanks to online
guides. Start with YouTube, where
you’ll find all the how-tos you need
BY ALEXANDRA SAMUEL
for such hobbies as knitting, cooking
or crafting. If you prefer to get your

I
WAS 13 WHEN I FIRST
learned to knit…a little. I
tried again at 18, and then in
my late 20s, and then again
as a new mom in my 30s.
With each attempt I’d shell out for
needles and some nice yarn. But
I never made it further than a few
sad rows of misshapen loops before
I gave up, daunted by my own poor
eye-hand coordination and the ex-
pense of taking up a new hobby that
guidance in the form of diagrams,
look on Pinterest or simply Google
the words “beginner,” “how to” and
“[insert your hobby here].” Different
experts may have different presenta-
tion styles and techniques, so take
note of the YouTube channels or
websites that feature guides you
like. Make those your first stop
when you need to problem solve or
learn a new technique.

required not only raw ingredients,
but expert guidance.
About a year ago, I decided it was
time for my once-a-decade knitting
AMANDA BERGLUND
When you’re ready for your
first (or next) challenge…find
an online community.
There is an online community for ev-

.
experiment. I stopped in at my local ery hobby: Visual artists have Devi-

yarn store to pick up some yarn and
a pair of knitting needles. The
friendly clerk who helped me select
beginner-friendly options took a mo-
ment to jot down a quick note that
would help me get started: an index
card with the URL of her favorite
YouTube knitting videos.
ly
antArt, golfers have GolfWRX, and
genealogists have Geni.com. Where
new hobbyists once had to pay for ing how to complete the pattern I’d to accomplish tasks inexpensively or When your hobby takes over the
classes, teachers or coaches—or to picked out. In the pre-Internet world
on free. Whatever your hobby, there’s house…get an inventory app.
get to the nearest gathering or there was only one easy way to make almost certainly a mobile tool kit to If you’re anything like me, half the
teach-in—we can now access help good on a premature investment in help you out. Whenever I discover a fun of a new hobby is that it opens a
from one another, anywhere and a fancy camera, a snowboard or a new enthusiasm, I create a new app whole new category for shopping ex-
anytime. backyard meat smoker: hire someone folder on my phone, and fill it with cursions—and for overspending. Ev-
us l,

It took all of one hour for me to
realize that YouTube was a game-
changer that would make this knit-
ting effort different from all of my
previous attempts. That wasn’t all: A
For me, that free help comes to teach you. These days, social me- all of the free or cheap apps that ery time I place an Amazon order I
through Ravelry, an online commu- dia can help you avoid that expense. look useful. I also compare apps with find myself throwing in some stitch
al a
e
nity where knitters and crocheters In my case, a Facebook friend of- other knitters whenever I get into markers or a new kind of knitting
share patterns, yarn options, project fered to do a video call and show me conversation at a knitting store or bag, and whenever I’m on the road,
photos and preferred techniques. My the stitch herself. Half an hour later knitting circle. Indeed, that is how I I now use Yelp to find that city’s
ci on

whole range of online communities own knitting took a I was back on discovered Knit Companion, which is best knitting store. To get the physi-
and digital tools were now available leap forward once I track—plus my the app I now use for viewing and cal and financial mess under control,
to help me realize my long-held aspi- realized that Rav- Facebook friend had annotating my knitting patterns. I used Ravelry to set up an inventory
ration of becoming a knitter. Within elry not only let me Whatever your just turned into a of all my yarn purchases and needle
a few weeks, I’d mastered the basics. find knitting pat- real friend! If you’ve When you need in-depth sizes, so that I can keep all my knit-
er rs

And nine months in, I’m proud to terns, but gave me hobby, there’s picked up a hobby reference materials…download ting gear tucked away without losing
say that I’ve completed three cowls, access to feedback almost certainly that’s relatively digital guidebooks. sight of what I own, and avoid mak-
a cotton beret, a tie, a giant shawl, and discussions common, your ex- Book buying is another way a new ing duplicate purchases. Similar
three scarfs, one sleeveless jacket about the various an app or other isting Facebook, In- hobby can overtake both your bud- tools for other hobbies include
m e

and a misshapen stuffed hedgehog. patterns I was in- mobile tool kit to stagram or Twitter get and your home. I have book- Model Train App (for model-train
The broader lesson here, of terested in trying. circle may well in- cases that reflect hundreds (or enthusiasts), Aquarimate (for track-
course, isn’t about knitting, as proud Reading the discus- help you out. clude people who thousands!) of dollars spent during ing the fish and gear for your per-
m rp

as I am of my newfound talent.
Rather, it’s that I’ve discovered a
new use for technology. By providing
ready access to expertise, tools and
community, social and digital media
sions of specific are happy to an- my musical theater, cooking and sonal aquarium) and CLZ Comics
patterns has helped swer any questions; web-design phases. This time (for comic-book collectors).
me steer away from if you’re engaging around, I committed to an all-digital Together, these digital solutions
projects that are beyond my current in something more esoteric, a Face- knitting collection. I use the Over- not only will make it easier and
skill level, identify adaptations that book group or online community drive app to access my local li- cheaper to pick up a new hobby,
co Fo

make it both cheaper and easier to
take up a new hobby.
Here are some of the things I’ve
learned in my quest to overcome de-
cades of knitting false starts.
When you want to get started…
find online how-tos.
Expertise is the most essential part
of taking up a new hobby—and get-
ting it can be expensive. While there
are certain kinds of hobbies that re-
will make a pattern easier to exe- dedicated to that hobby will likely brary’s collection of knitting books, they’ll also make it more likely that
cute, and solve problems I encounter include some generous souls who which includes a range of how-to you’ll stick with your new avocation
while working on a specific project. can help you out if you run into and pattern books. I have even more and steadily improve. Far from dis-
trouble. free options through my subscrip- tracting us from hands-on creativity,
When you hit a roadblock…turn tion to Amazon’s Kindle Unlimited technology can be the gateway to re-
to online friends or discussion When you need specialty (though an awful lot of the free discovering the joys of making,
boards. tools…look for a mobile app. downloads seem to be patterns for crafting and collecting.
Six months into my new hobby, I de- In the olden days, woodworkers knitting your own Kindle cover). So
cided I was ready to tackle a bigger needed a range of measuring tools, before you build your own personal Ms. Samuel is a technology
challenge—which is another way of plumbs and levels. Today, rather hobby library, check out what you researcher and the author of
saying I invested in some really ex- than buying and storing expensive can get free—or cheap—in your fa- “Work Smarter With Social
pensive yarn without actually know- tools, hobbyists often can use apps vorite e-reader. Media.” Email: reports@wsj.com
n-

EXPERTS' VOICES | DAVID BLANCHETT To illustrate the disconnect between the overhead
BY JASON COUPET AND JESSICA BERRETT
no

ratio and true efficiency, we used data from Habitat for

Humanity. This included not only financial reports, but
THE LESS A NONPROFIT spends on overhead, the bet- also reports on the number of houses built, rehabili-
ter, right? After all, that leaves more money available tated, repaired and recycled by 795 Habitat affiliates.
to fund the charity’s programs. It’s simple logic. The We measured the efficiency of each Habitat affiliate
problem is, it’s too simple. with two very different techniques from management
Many potential donors rely on the ratio of overhead science that consider productivity in their analysis. We
expenses to total spending to judge a nonprofit’s effi- then ranked the affiliates, from most to least efficient,
ciency in achieving its goals. And for many, a charity’s ef- separately for each of those techniques. We also ranked
ficiency is an important factor—sometimes the determin- them separately based on their overhead ratios, with
ing factor—in deciding whether to make a contribution. the affiliates that had the lowest overhead ratios
But based on the results of our recent study, pub- ranked as most efficient.
lished in the journal Nonprofit Management & Leader- We found that while both techniques from manage-
ship, the overhead ratio ment science mostly ranked
ADD TO A 401(K)? isn’t a particularly good in-
dicator of whether or not a
the affiliates similarly, nei-
ther aligned well with the
MAYBE NOT. nonprofit spends efficiently, rankings produced by the

There are roughly 100 million people in the U.S. today covered
by defined-contribution plans such as 401(k)s. And each per-
because it’s too narrow a
gauge.
The biggest flaw is that
It Isn’t All overhead ratio.
For example, when ranked
by the overhead ratio, the
son has to figure out whether to participate in the plan and, if
so, how much to save. The common advice is simple: Partici-
the overhead ratio assumes
that all overhead expenses
are a negative. Yet some-
About the top-ranking Habitat affiliate
had a ratio of less than 1%;
the most efficient affiliate ac-
pate, and save as much as possible. But while that’s a decent
strategy, it’s isn’t necessarily always going to be the best one.
The most attractive feature associated with saving in a
times, increasing spending
on overhead helps nonprof-
its have a greater impact,
Overhead cording to one of the scien-
tific techniques had one of
the highest overhead ratios,
or even to survive. And lim- When evaluating nonprofits, at 32%. But the affiliate with
401(k) plan is the employer match. This is pretty much iting overhead spending too the 1% ratio produced two
free money. And the benefit of saving in a 401(k) changes severely can hamper a char- donors must think broadly new houses; the one with the
considerably beyond the employer match, and especially if ity’s mission and even drive 32% ratio produced 382
the there is no employer match offered at all. it out of business. houses.
For example, a charity These results show how
The 5% return you might earn investing in the market is
with old, outdated computers might benefit immensely ill-equipped the overhead ratio is for evaluating the ef-
probably a lot lower than the 20%-plus interest rate you from an information-technology upgrade. Investing in ficiency of nonprofit organizations.
might be paying on your credit cards, and even the rates such an upgrade, however, could increase the ratio of We recommend that charity watchdogs look toward
you might be paying on your student loan or home-equity overhead expenses substantially. The higher ratio scientific tools to assess nonprofit performance. Addi-
loan. There are other accounts worth considering instead might mean less support from donors who don’t know tionally, donors and watchdogs need to encourage non-
that the organization really needed those new comput- profits to collect and share data on their performance.
of the 401(k), such as an individual retirement account or ers. So, the charity may forgo an investment that it In this way, nonprofits, donors and watchdogs can
a health savings account. critically needs—allowing it to report a more attractive work together to achieve truly higher efficiency and a
—David Blanchett is the head of retirement research for Morning- overhead ratio but weakening its ability to meet the greater impact on communities in need.
star Investment Management. needs of the community it serves.
Persisting with unmet needs year after year to re- Dr. Coupet is an assistant professor of public
The Experts are industry and though leaders who write on topics port a lower overhead ratio is what’s known as the administration at North Carolina State University.
of their expertise. You can read this full blog post and others at starvation cycle. Ms. Berrett is a doctoral student in the School of
WSJ.com/Experts. A more accurate assessment of a nonprofit’s efficiency Public and International Affairs at North Carolina
requires consideration of not only what it spends on State University. They can be reached at
overhead, but also of what impact it is having. reports@wsj.com.
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

THE WALL STREET JOURNAL. Monday, December 17, 2018 | R9

JOURNAL REPORT | WEALTH MANAGEMENT

TAXES | TOM HERMAN

Tips on Deciding Which Filing Status Is Best

Do you file jointly or separately? There may be some powerful reasons to do the latter.

“Who are you? Who, who, who,
who?”
—The Who
For most taxpayers, the answer
probably seems obvious. But for
some, it can be surprisingly tricky to
determine which tax-filing status will
hold the most advantages.
The choices may involve more
thought and number-crunching than
might be apparent at first glance. A
few issues may be important for
some taxpayers to consider before
New Year’s Day because of tax-law
changes enacted late last year and
other factors.
Here are a few suggestions from
tax pros on avoiding an identity cri-
sis—and making sure you don’t wind
up paying more in taxes than you
need to pay.
Joint or separate
For starters, married couples can file
either jointly or separately. The
choice is important since your filing
status is used to determine such
things as the standard-deduction
amount, eligibility for certain tax
credits and other breaks, and, ulti-
mately, how much tax you will owe.
Most married couples file joint re-
turns. About 54.1 million returns re-
ceived by the Internal Revenue Ser-
vice for 2016 were joint returns (or
returns of “surviving spouses”), ac-
Kostelanetz & Fink in New York. If
you file jointly, you are responsible
for what’s on that joint return—un-
less you can qualify for special re-
lief. But winning “innocent-spouse”
relief can be “very complicated and
difficult to accomplish,” Mr. Skarla-
tos says.
Thus, filing separately can be a
smart move in cases where you
want to be responsible only for
what is on your own return, says
Eric L. Green, a lawyer at Green &
Sklarz in New Haven, Conn.
 Special Factors: In some cases,
it might be better for a married
couple to consider filing separately
to enable one spouse to claim cer-
tain deductions or other breaks
that would be reduced, or even
lost, on a joint return.
One example is a lower-earning
spouse who has large amounts of
medical expenses or might be eligi-
ble for a large casualty-loss deduc-
tion, says Mark A. Luscombe, prin-
cipal analyst at Wolters Kluwer Tax
& Accounting. Filing separately
might enable that spouse to de-
duct more of those items than he
or she would on a joint return be-
cause the expenses are deductible
only to the extent they exceed cer-
tain thresholds.
Also check if there are any state-
What's Your Bracket? to be tax-deductible under agree-
ments signed this year or in prior
Federal income-tax rates and income brackets for 2018 tax year years, she says. Another change: Re-
Married joint filers (and surviving spouses) cipients of alimony payments under
TAXABLE INCOME TAX AMOUNT agreements executed after this year
won’t be taxed on those payments.
Not over $19,050 10% of the taxable income
The new law doesn’t change the
Over $19,050 to $77,400 $1,905 plus 12% of the excess over $19,050 tax treatment of child-support pay-
ments, says Mr. Green of Green &
Over $77,400 to $165,000 $8,907 plus 22% of the excess over $77,400
Sklarz.
Over $165,000 to $315,000 $28,179 plus 24% of the excess over $165,000
Over $315,000 to $400,000 $64,179 plus 32% of the excess over $315,000
Head of household
This category can be a source of
Over $400,000 to $600,000 $91,379 plus 35% of the excess over $400,000 significant confusion and taxpayer
errors, both honest and otherwise.
Over $600,000 $161,379 plus 37% of the excess over $600,000
“Generally, you may claim head of
household filing status on your tax
Single filers return only if you are unmarried and
TAXABLE INCOME TAX AMOUNT pay more than 50% of the costs of
Not over $9,525 10% of the taxable income keeping up a home for yourself and
your dependent(s) or other qualify-
Over $9,525 to $38,700 $952.50 plus 12% of the excess over $9,525 ing individuals,” the IRS says on its
Over $38,700 to $82,500 $4,453.50 plus 22% of the excess over $38,700 website.
For exceptions to this general rule
Over $82,500 to $157,500 $14,089.50 plus 24% of the excess over $82,500 and other key points, search the IRS
Over $157,500 to $200,000 $32,089.50 plus 32% of the excess over $157,500 website for “head of household.”
Over $200,000 to $500,000 $45,689.50 plus 35% of the excess over $200,000 When a spouse dies
Over $500,000 $150,689.50 plus 37% of the excess over $500,000 Suppose your spouse died this year
Note: The numbers for people who are married but file separately are the same as those for most singles,
and you haven’t remarried. It might
except for the two highest brackets. For separate filers, the 35% rate applies to income of over $200,000 to seem logical to assume you are sin-
$300,000, while the 37% rate applies to income over $300,000. gle. However, you’re eligible to file a
Source: IRS and Wolters Kluwer Tax & Accounting THE WALL STREET JOURNAL. joint return with your deceased
spouse for this year. Also, for the
next two years, you may be eligible
tax than if each spouse had re- rately might be eligible to make for special benefits as a “qualifying

.
cording to the latest IRS data. Only tax issues that might affect the cal- mained single. Lawmakers have greater use of this deduction than widow(er).” See IRS Publication 501

3.1 million returns came from mar-
ried couples filing separately.
The reason is simple: Generally,
married couples would pay more
combined tax if they file separately
than if they file jointly.
But not always, says Mark T.
Nash, a tax partner at Pricewater-
culations, says Sidney Kess, senior
consultant at Citrin Cooperman and
of counsel to Kostelanetz & Fink.
on
 Marriage bonus or penalty:
Getting married this month, or
postponing the official ceremony
until next year, might have a sur-
us l,
taken steps to reduce or eliminate
the marriage penalty in certain cases
and to increase the amount of the
bonus in many others. But these is-
sues haven’t disappeared entirely.
 Pass-through businesses: The
new law includes a 20% deduction
ly
by filing jointly with a spouse who
has significant amounts of income.
It’s complex and details can vary
widely depending on individual cir-
cumstances, so it’s best to consult
a tax expert.
Implications for divorce
for more details.
i i i
For those who want more infor-
mation about what status they
should use, the IRS offers an online
interview, “What Is My Filing Sta-
tus,” a tool that asks individuals

houseCoopers. When in doubt, run
the numbers both ways.
Here are some powerful reasons
to consider filing separately:
prising impact on your taxes in
certain cases. For example, some
al a
e
two-income couples who get mar-
ried this year and are in the top
brackets may wind up owing more
ci on
for owners of various types of
“pass-through businesses.” Such
businesses, which include partner-
ships, sole proprietorships and S
corporations, pass along profits to
Part of the new law generally says
you won’t be allowed to deduct ali-
mony payments you make under a
divorce or separation agreement
executed after 2018. This new re-
questions and offers answers that
can help them decide. Tax-prepara-
tion software can also be helpful in
wading through these issues.

 Untrustworthy spouse: Beware
of filing a joint return if you suspect
your spouse is hiding taxable income
or isn’t telling the truth about de-
ductions, credits or other issues,
in combined federal income tax
than they would if they had each
remained single—commonly known
as the marriage penalty tax.
But in other cases, a married
er rs
their owners, who report them on
their personal returns.
The deduction has limits that
begin above certain amounts of
taxable income. Because of these
striction won’t apply to agreements
finalized this year or in prior years,
says Elena Karabatos, a matrimo-
nial lawyer at Schlissel Ostrow and
Karabatos PLLC.
Mr. Herman is a writer in New
York City. He was formerly The
Wall Street Journal’s Tax Report
columnist. You can email your
comments and tax questions to

says Bryan Skarlatos. a lawyer at couple winds up paying less total limits, an owner who files sepa- Alimony payments will continue taxquestions@wsj.com.
m e

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 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
R10 | Monday, December 17, 2018
Apps to Help
Children Learn
About Charity
These digital tools make it easier for young
kids to get into the habit of giving
BY CHERYL WINOKUR MUNK
T
eaching younger children
to be philanthropic isn’t
always easy. But there
are digital tools than can
help.
Sharon Poteet, a parent from Or-
tonville, Mich., uses the allowance-
management app RoosterMoney.
Through the app, her 11-year-old
daughter and 14-year-old son each
receive a virtual allowance of at
least $10 a week, 30% of which goes
into a savings bucket, 60% into a
spend bucket and 10% to a give pot.
Although her children see her
write checks to charities, Ms. Po-
teet wants them to have skin in the
game by donating a portion of the
money they earn (and as tracked by
RoosterMoney) to causes they care
about. “They have actual ownership
in that donation. It’s because of
them,” she says. “It isn’t because I
pulled out my checkbook.”
RoosterMoney is just one of sev-
eral online and mobile-friendly al-
lowance and chore-management
tools that make it easy for children
to create philanthropic goals and
set aside money for them. The pro-
grams can be used by children as
young as age 4 or 5 with parental
support.
“Just like every other habit, the
younger you are, the more in-
grained it is in you as a person,”
says Jacqueline Valouch, head of
philanthropy at Deutsche Bank
Wealth Management in New York.
What’s nice about digital tools is
they allow children to “get engaged
in the way they are used to getting
engaged,” she says.
Here’s a look at some of the dig-
ital tools that can help encourage
children to be philanthropic:
no
Guidance starts with hearing you out.
TD Ameritrade’s Financial Consultants take the time to understand what matters to you and why, before
discussing investment strategies. To help you find the plan that works for you, we want to get to know you first.
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jurisdiction where we are not authorized to do business. TD Ameritrade, Inc., member FINRA/SIPC. © 2017 TD Ameritrade.
JOURNAL REPORT | WEALTH MANAGEMENT
$2.49 a month, or $18.99 a year.
When they are ready to donate,
children click on the app’s “Give”
pot and search for one of more
than 25,000 charities hosted on
JustGiving, a global online social
platform for giving. They also can
designate a charity that isn’t
listed on that platform.
Children choose the amount
they want to donate and send it to
a parent for approval. Once ap-
proved, the amount is subtracted
from the child’s Give pot. If the
chosen charity is listed on the
JustGiving platform, parents are
directed to a donation portal,
where they can plug in a credit
card and make the donation online.
Bankaroo
Bankaroo is an online virtual bank
designed to help children from
ages 5 to 14 keep track of their al-
lowance, gifts and chore earnings
and save up for specific spending
goals, including purchases, as well
as gifts to charity.
No money changes hands
through the site; parents remain in
control of the actual funds. Once
children reach a savings target,
they ask parents to disburse the
money they have saved to the
charity of their choice. That
amount is then deducted from the
child’s Bankaroo account.
RoosterMoney
This app, available on mobile de-
vices and tablets and generally
aimed at children between the
ages of 4 and 14, allows users to
on
track their allowance, set savings
goals and allocate funds toward
spending, saving or giving.
No actual money changes hands
us l,
through the app; parents are re-
sponsible for handing over the
al a
e
cash, check or credit card to make
a purchase or donation once the
child has saved up enough to
ci on
cover it.
Most of the basic features that
help children manage their money
are free, though RoosterMoney
does offer a subscription-based
er rs
service with some add-ons for
m e
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n-
visit tdameritrade.com/goalplanning to learn more.
THE WALL STREET JOURNAL.
Bankaroo offers a free online card that parents can control. In
and mobile-web version. For fami-
lies that prefer to use the tool as
an app on Android, Kindle or IOS
devices, there’s a one-time cost of
addition to being able to set sav-
ings goals, track spending and
learn responsible spending with a
debit card, children can choose to
$2.99 per family.
There also is an enhanced ver-
sion, Bankaroo Plus, available for a
one-time fee of $4.99 per family
donate a portion of their weekly
earnings to Boys & Girls Clubs of
America. It’s a new capability go-
henry rolled out in November;
via the app stores. With it, chil-
dren can manage separate ac-
counts for checking, savings and
charity. They can move virtual
funds into their charity bucket on
parents can elect whether to turn
the feature on.
a one-time or recurring basis.
BusyKid
This platform allows parents to
assign their children chores with
a cash value, and to pay them an
allowance each week through a
linked bank account. The child’s
money is held in a FDIC-insured
BusyKid account at Axos Bank.
The child’s earnings can be di-
vided into three buckets: save,
share and spend. The allocation is
initially determined by BusyKid
based on the child’s age. For ex-
ample, an allocation for a 13-, 14-
or 15-year old would start at 40%
in save; 10% in share, 50% in
spend, but parents can tweak
those allocations if they choose.
Children can use the money in
their share bucket to support 19
charities, including Special Olym-
ROOSTERMONEY, BANKAROO, GOHENRY (SCREENSHOTS); F. MARTIN RAMIN/THE WALL STREET JOURNAL (PHONES)
pics and Toys for Tots, and
BusyKid continues to expand
those options. BusyKid also plans
to add a self-directed option early Children select an amount,
next year for parents who want to ranging from 10 cents to 25 cents,
choose a charity that isn’t already to donate weekly to the charity.
listed, says Gregg Murset, the Parents receive a notification on
company’s co-founder and chief their phone, alerting them to the
executive. pledge. Each week on payday, the
.
Parents have to approve trans- donation comes out of the child’s
ly
actions via text before any money account.
can be donated. Once approved, the Users who want to donate to a
money is moved from the child’s charitable organization other than
account to the parent’s linked ac- Boys & Girls Clubs can create a
count, and the parent is sent a link savings goal and time frame for
to make the donation directly. reaching it. Once that goal is at-
BusyKid costs $14.95 per family tained, the money can be trans-
a year, after a 30-day free trial, ferred to the child’s spending ac-
regardless of the number of chil- count and used to make a
dren. The service can be used on donation to the charity of their
a desktop, tablet or Android or choosing.
IOS device. The service is most There is a monthly member-
appropriate for children between ship fee of $3.99 per child to use
the ages of 5 and 17. gohenry. The target age range is
ages 6 to 18.
Gohenry Ms. Winokur Munk is a writer in
Gohenry offers users an online ac- West Orange, N.J. She can be
count, mobile app and a debit reached at reports@wsj.com.
Call (800) 870-9668 or