For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
DJIA 20596.72 g 0.29%
Whats
News
Business & Finance
H ollywood is moving
ahead with plans to
make major movies avail-
able to home viewers
within weeks after they
hit theaters. A1
 OPEC urged its mem-
bers to adhere to their pro-
duction cut agreement. B1
 Mideast oil producers
are weighing taking
money up front against fu-
ture production amid
strain from the fall in
crude prices. B7
 The EUs antitrust
chief said her department
is reviewing recent
merger clearances on
suspicions companies
misled investigators in
securing approval. B2
 Apples iPhone 6 and 6
Plus dont infringe on
patents held by a local
manufacturer, a Beijing
court found. B4
 Opposition in China to
GMOs has been brought to
the forefront by Chem-
Chinas $43 billion deal to
buy Syngenta. B1
 Uber suspended testing
of its autonomous vehicles
after one was involved in an
accident, a dramatic halt to
one of the most high-profile
self-driving programs. B4
 Johnson Controls
CEO received $46.4 mil-
lion in compensation
from Sept. 2 to Sept. 30,
according to documents
filed with the SEC. B3
 Greece has received three
binding bids for a majority
stake in its second-largest
port in Thessaloniki. B3
World-Wide
 British officials criti-
cized tech firms in the wake
of the rampage outside Par-
liament for profiting from
terrorists propaganda and
offering them secret places
to communicate. A1
 The White House is sig-
naling it may be time to
work with Democrats fol-
lowing the collapse of the
GOPs health bill. A1
 Thousands took part in
anticorruption demonstra-
tions across Russia, the
most significant challenge
to Putin in years. A4
 Iran sanctioned 15 U.S.
firms in response to re-
strictions imposed by the
Trump administration. A3
 Hong Kongs electoral
committee picked a
staunchly pro-China candi-
date to lead the city. A5
 Pakistan said it has be-
gun building a fence along
its border with Afghani-
stan, a move that could fur-
ther inflame tensions. A5
 Flynn, while serving as
a Trump campaign adviser,
is said to have met with
Turkish officials and dis-
cussed removing a Muslim
cleric from the U.S. A3
 Iraqs military said a
deadly blast in Mosul was
triggered by an ISIS booby
trap, contradicting claims
that a U.S.-led coalition
airstrike caused it. A3
 Russias role in Libya is
causing growing concern
at the NATO with the
Kremlin appearing to
throw its support behind
Gen. Khalifa Haftar. A3
CONTENTS
Business News...... B3
Crossword.............. A12
Europe File............... A2
Finance & Mkts... B5,7
Heard on Street.... B8
Keywords................... B1
3.20; CHF5.50; 2.00;
U.S. Military (Eur.) $2.20
s Copyright 2017 Dow Jones &
Company. All Rights Reserved
NASDAQ 5828.74 0.19%
Crackdown in Moscow
MAXIM SHEMETOV/REUTERS
DEFIANCE: Opposition leader Alexei Navalny, above, was arrested while walking to an anticorruption protest in Moscow against the government
of President Vladimir Putin. The gathering was the biggest in a wave of protests, one of the most extensive shows of defiance in years. A4
White House Changes Tack
Trump administration
signals opening to
Democrats in wake of
health-care-bill failure
BY SIOBHAN HUGHES
WASHINGTONThe White
House, stung by the collapse
of the House Republican
health bill last week, is signal-
ing it may be time to start
working with moderate Demo-
crats to enact President Don-
ald Trumps agenda, a shift
with the potential to upend
Studios Set to Offer Films HOLLYWOODS
Faster for Home Viewing NEW VILLAIN
BY BEN FRITZ
Hollywood studios are pre-
paring to upend decades of
tradition by releasing movies
at home less than 45 days af-
ter they debut on the big
screen, according to people
with knowledge of their plans,
a goal they have pursued un-
successfully for years.
The studios and theater
owners have long been at log-
gerheads over the issue,
which Hollywood executives
consider vital to their long-
term survival and cinemas
consider a threat to theirs.
But now, faced with changing
consumer habits fueled by
proliferating on-demand en-
tertainment options, the two
sides are finally discussing a
compromise, people with
knowledge of the talks said.
INSIDE
EUROPES QUIET
ABORTION
POLITICS
LIFE & ARTS, A12
Life & Arts.... A8-9,12
Markets...................... B8
Opinion.............. A10-11
Technology............... B4
U.S. News.................. A7
BRIAN SPEGELE/WSJ
Weather................... A12
World News........ A2-5
SYNGENTA DEAL
FEEDS GMO
FEARS IN CHINA
BUSINESS & FINANCE, B1
MONDAY, MARCH 27, 2017 ~ VOL. XXXV NO. 40
NIKKEI 19262.53 0.93% STOXX 600 376.51 g 0.18%
years of partisanship in Wash-
ington.
This president is not going
to be a partisan president,
White House Chief of Staff
Reince Priebus said on Fox
News Sunday. He said that
while I think its time for our
folks to come together, I also
think its time to potentially
get a few moderate Democrats
on board as well.
It was one of a rapid-fire
series of signs that the Trump
administration is fed up with
many of the factions in the
House Republican conference
and is considering changing
Shrinking Window
Average number of days
between a movies theatrical
debut and home video release.
150 days
125
2005
135 days
100
2016
75
102 days
50
25
0 DVDs or digital platforms un-
2005 10 15
Source: Kagan, a group within S&P
Global Market Intelligence
THE WALL STREET JOURNAL.
A Pandas Two Jobs: Be Adorable,
Help Spread Chinese Propaganda
i i
Beijing sends bears abroad to warm
relations, win favors; soft-power resource
BY KATE OKEEFFE
China produces roughly
25% of the worlds vehicles,
half its steel and 75% of its
smartphones.
It controls 100% of the
worlds panda production,
though, and therein
lies the key to panda
diplomacy, the soft-
power tool Beijing
mercilessly uses for
global influence.
China strategi-
cally dispatches the
bears to zoos around Bao
the world through
loan agreements that guard its
panda monopoly. The black-
and-white diplomats, who nap
and snack on the job, promote
warm feelings about China even
when leaders rhetoric is cold.
They are critical especially
for ordinary people, not politi-
BRENT 50.80 0.47%
its legislative strategy. The
president took to Twitter to
criticize hard-line conserva-
tivesknown as the House
Freedom Caucuswho had
worked to topple the GOP
health plan.
Democrats are smiling in with Mr. Trump.
D.C. that the Freedom Caucus,
with the help of Club for
Growth and Heritage, have
saved Planned Parenthood &
Ocare! Mr. Trump wrote.
Whether the Trump admin-
istration can work with Demo-
crats remains an open ques-
tion. While Mr. Trumps
ideological flexibility could
The only question that re-
mains for so-called premium
video-on-demand is when
and on what terms it starts,
not whether it does, the peo-
ple said. By year-end, it is
likely films will start to be-
come available on VOD sev-
eral weeks after their theatri-
cal debut for between $30
and $50.
Such a move would trans-
form the economic model of
the movie business, while
blurring the line that has long
made film first and foremost
an out-of-home, big-screen
experience.
Today, movies released na-
tionwide arent available on
til at least 90 days after they
open, because most theaters
wont play them otherwise,
Please see FILMS page A2
i The ongoing legal battle is
cians or diplomats, to under-
stand that people with different
systems can still work together,
says Liu Yuqing, a Chinese-em-
bassy press officer in Washing-
ton. Officials from New York to
New Zealand have proven sus-
ceptible to this weaponized
adorability, cozying
up to Beijing in
hopes of tapping into
its arsenal of giant
pandas2,239 as of
Chinas latest census.
Last month, U.S.
Rep. Carolyn Malo-
Bao ney (D., N.Y.) pre-
sented Chinas New
York consul general as an hon-
ored guest at the inaugural
Panda Ball at the Chinese-
owned Waldorf Astoria hotel.
Black-and-white-clad partygo-
ers raised nearly $500,000 to-
ward trying to acquire a bear
Please see PANDA page A6
WSJ.com
GOLD 1248.20 0.10%
open the door for some agree-
ment, the president also would
still have to bridge divides
within the Republican Party.
Moreover, the liberal wing of
the Democratic base is suspi-
cious of any efforts to work
The minute he got into of-
fice, maybe led by Vice Presi-
dent Pence and some of the
others, he moved so far to the
hard right that its virtually
impossible for us to work with
Please see TRUMP page A7
 The Outlook: GOP may face
another fight on taxes......... A7
Netflix is hogging talent and pushing up prices
to create shows, spurring pushback
BY JOE FLINT
AND SHALINI RAMACHANDRAN
Tara Flynn, a rising star at
a TV production unit of 21st
Century Fox, walked into her
bosss office last August and
told him she was quitting
and joining streaming-video
giant Netflix Inc.
The news wasnt well-re-
ceived.
Netflix is public enemy
No. 1, said Bert Salke, the
head of Fox 21 Television
Studios, where Ms. Flynn
was a vice president, accord-
ing to a Netflix legal filing.
When Netflix finalized Ms.
Flynns hire a few weeks
later, Fox sued, accusing it of
a brazen campaign to
poach Fox executives. In re-
sponse, Netflix argued Foxs
contracts are unlawful and
unenforceable.
just one sign of the escalat-
ing tensions between Netflix
and Hollywood as the
streaming-video company
A Triumph for Merkels Party
ELECTORAL TEST: Annegret Kramp-Karrenbauer, minister president of
the small German state of Saarland, celebrated as Angela Merkels
Christian Democrats scored a clear victory in a state election there. A4
EUROPE EDITION
EURO 1.0810 0.24%
Britain
Hits Tech
Firms
Following
Attack
BY JENNY GROSS
LONDONBritish officials
tore into technology compa-
nies for what they said was
profiting from terrorist propa-
ganda and offering secret
places to communicate, in
strong criticism of Silicon Val-
ley days after a terrorist ram-
page outside Parliament left
four people dead.
A U.K. intelligence official
said investigators believe after
interviews with people con-
nected with Khalid Masood
that he acted alone. Police are
combing through massive
amounts of computer data to
establish whether he was influ-
enced online, the official said.
U.K. officials have locked
horns with technology compa-
nies over where to draw the
line between user privacy and
national security and argued
that internet providers have a
responsibility to police their
sites to stop people from be-
ing radicalized online.
Home Secretary Amber
Rudd on Sunday called it un-
acceptable that technology
firms offered end-to-end en-
cryption, which she said gives
terrorists places to hide.
We need to make sure or-
ganizations like WhatsApp,
and there are plenty of others
like that, dont provide a se-
cret place for terrorists to
communicate with each other,
Ms. Rudd told the British
Broadcasting Corp. We need
to make sure that our intelli-
gence services have the ability
Please see TERROR page A4
moves from being an upstart
dabbling in original pro-
gramming to a big-spending
entertainment powerhouse
that will produce more than
70 shows this year.
It is expanding into new
genres such as childrens
fare, reality TV and stand-up
comedy specialsincluding a
$40 million deal for two
shows by Chris Rock. The
shift has unnerved some TV
networks that had become
used to Netflixs original
content being focused on
scripted dramas and sitcoms.
Netflixs spending on orig-
inal and acquired program-
ming this year is expected to
be more than $6 billion, up
from $5 billion last year,
more than double what Time
Warner Inc.s HBO spends
and five times as much as
21st Century Foxs FX or CBS
Corp.s Showtime. It spent
close to $10 million an epi-
sode on The Crown, a lav-
ish period drama about a
Please see NETFLIX page A6
THORSTEN WAGNER/EUROPEAN PRESSPHOTO AGENCY
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A2 | Monday, March 27, 2017
Brexit Casts a Shadow on Irish Peace Pactthe EU has opened up new
EUROPE FILE
SIMON NIXON
Last weeks funeral of
Martin McGuinness provided
the clearest evidence of the
extraordinary success of the
Northern Ireland peace pro-
cess. What was most remark-
able was not just that Arlene
Foster, the leader of the hard-
line Demo-
cratic Unionist
Party, came to
pay her re-
spects to the
former IRA
commander
turned Sinn Fein peace-maker,
but that her arrival was
greeted with applause.
Such scenes would have
been unthinkable 20 years
ago.
Yet beneath the symbol-
ism, the strains in Northern
Irish politics today are as
great as at any time since
the 1998 Good Friday Agree-
mentand the greatest
threat to the constitutional
balance is Brexit.
The UKs decision to quit
ECONOMIC
CALENDAR
The week ahead will feature
a speech from Federal Reserve
Chairwoman Janet Yellen and
bring data from around the
globe, including a first look at
the February U.S. trade deficit,
eurozone inflation and reports
on Chinese manufacturing and
Japanese industrial production.
TUESDAY: Ms. Yellen will speak
in Washington about workforce
development challenges in low-in-
come communities. She headlines
a week in which about a dozen
speeches from U.S. central-bank
officials are scheduled. Watch to
see if the officials signal a plan for
two additional rate increases this
year, as projected in their latest
projections. Fridays release of the
Feds preferred inflation gauge, the
personal-consumption expendi-
tures price index, could help
shape their views. The measure
could meet the Feds 2% annual in-
flation target for the first time in
nearly five years.
The U.S. Commerce Depart-
ment will publish its advance look
at the trade deficit in goods for
February. It will be an early signal
to see if the trade gap widened
further last month. The full trade
report, which also includes ser-
vices, will be released a week later.
The overall gap in January was the
largest in five years. That could be
a concern to President Donald
Trumps administration, which has
made closing the gap a priority.
THURSDAY: Inside the latest
revision to fourth-quarter U.S.
gross domestic product from the
Commerce Department will be the
first reading of fourth-quarter and
full-year corporate profits. The
previous reading of fourth-quarter
GDP showed a modest 1.9% annu-
alized growth rate. Economist
dont project a significant revision.
FRIDAY: Figures released by
the European Unions statistics
agency are expected to show
that the annual rate of inflation
in the eurozone fell in March, af-
ter exceeding the European Cen-
tral Banks target for the first
time in four years during Febru-
ary. A decline could quiet calls
from Germany for an end to the
ECBs stimulus measures.
Chinas manufacturing pur-
chasing managers index (Thurs-
day evening release time in the
U.S.), is expected to edge up
from Februarys 51.6 as infra-
structure spending and a still
buoyant property market in ma-
jor Chinese cities prop up
growth. This is expected to be
the eighth consecutive month
that the official PMI will come in
above the 50 level that sepa-
rates expansion from contraction.
Japan will release several im-
portant data points (Thursday
evening in the U.S.) likely show-
ing economic growth and infla-
tion gradually picking up. Econo-
mists forecast that industrial
production increased 1.3% on
month in February on a pickup in
exports, rebounding from a 0.4%
fall the previous month. National
core consumer prices, which ex-
clude fresh food, are seen rising
0.2% on year, the second month
of increase after months of price
declines. That is good news for
the inflation-targeting Bank of
Japan, yet still far from the
banks 2% inflation target.
divisions within Northern
Ireland, where a majority in
fact voted against Brexit, and
between Northern Ireland
and the Irish Republic, which
will remain in the EU. The
challenges facing the whole
island are so worrying that
the European Commissions
chief negotiator, Michel
Barnier, last week said that
finding a swift solution was
one of his three top priori-
ties for the divorce talks.
T
he issue is primarily
one of borders. It is
often unappreciated
just how important a role
the EU played in facilitating
peace as the UK and Ire-
lands joint membership of
the EUs single market and
customs union removed any
economic need for a hard
border with the Irish Repub-
lic, leaving only a security
border to be dismantled as
an impediment to peace.
Since that border was re-
moved, the economies of
north and south have be-
come increasingly inte-
grated. Many businesses now
have operations, supply
chains and workforces strad-
dling the border.
No one wants the re-intro-
duction of a hard border, not
least because any infrastruc-
FILMS
Continued from Page One
fearing earlier home availabil-
ity will reduce ticket sales.
Movie companies are eager
for new revenue streams. The
home-entertainment business
declined 7% in 2016 to $12
billion, following a 6% drop in
2015. Global box-office growth
has been slowing, rising just
1% last year to $38.6 billion.
There is a growing consen-
sus in Hollywood that a
monthslong delay is anachro-
nistic, given the vast array of
content, including movies,
that consumers can stream at
their convenience on an in-
ternet-connected TV, tablet
or phone.
Major studios and exhibi-
tors are trying to work out
how to respond to consumer
desires so they can remain
competitive, said Doug Bel-
grad, a former president of
Sony Pictures Entertainments
motion picture group who
runs an independent film and
television company.
The heads of Time Warner
Big Screen to Bed
As Hollywood studios consider
an earlier premium home
viewing option, the approximate
time it currently takes a lm to
move from theaters to other
platforms.
Theatrical release
About 90 days later a
movie is available for
digital purchase.
Two weeks later its
available to buy on
Blu-ray or DVD, and
to rent via video-on-
demand (iTunes,
cable, etc.)
Up to four weeks after
this the DVD would be
available to rent from
Redbox.
Seven to 10 months
after theatrical release,
the movie is on a pay
TV service like HBO,
Starz or Netix.
Source: Staff reports
THE WALL STREET JOURNAL.
Intel Corp.s 3D XPoint
computer memory technol-
ogy is 10% the speed of dy-
namic random-access mem-
ory. A Technology article on
March 20 about new Intel
storage drives incorrectly
said 3D XPoint is 1% the
speed of DRAM.
The Portland Art Museum
in Portland, Ore., will host an
exhibit called Reunited: Fran-
cescuccio Ghissis St. John Al-
Readers can alert The Wall Street Journal to any errors in news articles by emailing wsjcontact@wsj.com.
WORLD NEWS
Sinn Fein slates polled well in regional Northern Ireland elections.
ture could become a target
for attack.
Yet the UKs decision to
quit both the EUs customs
union and single market
makes the re-introduction of
some form of border inevita-
ble. Even if the UK succeeds in
negotiating tariff-free access
to EU markets, goods crossing
the border will still need to be
checked to see that they com-
ply with rules of origin.
Similar concerns apply to
the movement of people: Both
London and Dublin want to
maintain the Common Travel
Area which has existed since
1923. But this doesnt extend
rights of free movement to
other EU or non-EU citizens,
raising the prospect of pass-
Inc.s Warner Bros. and 21st
Century Fox Inc.s Twentieth
Century Fox, Kevin Tsujihara
and Stacey Snider, have pub-
licly advocated for premium
VOD in the past few months.
Jeff Shell, who runs Comcast
Corp.s Universal Pictures, has
been a leading voice behind
the scenes.
The issue is expected to be
widely discussed at this
weeks CinemaCon, an annual
convention for theater owners
at which studios tout their
coming releases.
If the two sides fail to
reach a consensus soon, at
least one studio may force the
issue by announcing a pre-
mium VOD policy, people with
knowledge of the plans said.
Other studios would likely fol-
low suit, forcing theaters to
cooperate or lose out on hun-
dreds of releases.
Past attempts at premium
VOD, such as one spearheaded
by Viacom Inc.s Paramount
Pictures in late 2015, included
only a few films and fizzled in
the face of exhibitor opposi-
tion. Hollywood expects a dif-
ferent outcome this time by
including most or all movies
from many companies.
Studio executives say they
would prefer to reach a deal
with theaters, one reason
they have been reluctant to
unilaterally announce a new
policy. In addition, they want
a plan that competitors will
follow without reservationa
complicated calculation since
antitrust laws prevent studios
from discussing strategy.
Some studio executives be-
lieve the early window should
start just 10 days after a
movie opens in theaters,
while others believe it should
be 17 days, or between 30 and
45 days.
Some argue it will work
only if the same policy ap-
plies to every film, while
others believe the home re-
lease date should vary de-
pending on box office re-
ceiptsso flops would be
available on premium VOD
faster than hits.
Faced with the studios ag-
gressive stance, the major
theater chains appear open to
the idea, if not enthusiastic,
according to people with
knowledge of discussions.
Their priority is to get a piece
of the action.
Amy Miles, chief executive
of Regal Entertainment
Group, the No. 2 U.S. theater
chain by screen count, said in
CORRECTIONS  AMPLIFICATIONS
tarpiece. A Life & Arts article
Tuesday about the work incor-
rectly said the exhibit is at the
Portland Museum of Art and
didnt make clear in which
state the museum is located.
GrabTaxi Holdings Pte. op-
erates in 40 cities in Indone-
sia, Singapore, Malaysia, Thai-
land, Vietnam and the
Philippines. A Business Watch
article Wednesday about the
Southeast Asian ride-sharing
THE WALL STREET JOURNAL.
argues that special treatment
for Ireland is warranted be-
cause its circumstances are
unique: all Northern Irish
citizens are entitled to Irish
citizenship and the people of
Northern Ireland have the
right under the Good Friday
Agreement to vote to reunite
JEFF J MITCHELL/GETTY IMAGES
with the Irish Republicand
thereby become part of an
EU member state.
B
ut this attempt at an
all-Ireland solution is
viscerally opposed by
hardline unionists who are
suspicious of any moves to
make Northern Ireland
port checks somewhere. more Irish.
Yet any solution risks un- It is also opposed by the
dermining the fragile constitu- British government which
tional settlement put in place fears that any special status
by the Good Friday Agree- established for Northern Ire-
ment. An obvious answer is to land could create a precedent
put any new borders around that would be used by Scot-
the whole island, effectively tish nationalists to advance
allowing Northern Ireland to their secessionist claims.
remain in the EU customs Mrs. May is also reluctant
union and single market. to antagonize the Brexit-sup-
This is the delicate path porting DUP whose parlia-
down which the Irish gov- mentary votes she may need
ernment has been venturing to call upon to bolster her
over the past nine months wafer-thin majority. Instead,
through a determined diplo- the UK hopes to use the
matic effort both in Ireland risks to the Northern Ireland
and across the EU. peace process as a bargain-
It has established an all- ing chip to secure its goal of
Ireland civic dialogue de- a frictionless trade deal for
signed to build confidence on the whole UK, thereby mini-
both sides of the border. It mizing border issues.
Audience members at the Tennessee Aquarium IMAX theater in Chattanooga in January.
Premium Video on lieve there is money waiting to be
Demand: The Fallout made from consumers who never
go to the multiplex because they
Theaters worry box-office have young children or hate
receipts will plummet if films crowds. When forced to wait 90
go to home video sooner days, those people may forget a
film advertised on TV months
No one knows exactly what ago or turn to illegal piracy.
the impact will be of premium Theater owners worry box-
video-on-demand, which lets office receipts will plummet
consumers watch a movie at when people know they need
home a few weeks after it de- wait only a few weeks to watch
buts in theaters, since it has a new film in their living rooms.
never before been tried on a They believe their very survival
mass scale. Nonetheless, three may depend upon a long exclu-
camps in Hollywood have sive window that preserves the
strong views. special status of the cinema.
Most studio executives be- That latter argument ap-
a February earnings call she man of Paramount.
would consider a plan if it ex- Cable giant Comcast owns
panded the overall business Universal and AT&T Inc. has
and provided her company agreed to buy Warner Bros.
appropriate long-term finan- parent Time Warner Inc., po-
cial participation. tentially increasing the pres-
A Regal spokesman did not sure on those studios to
respond to a request for com- make movies available ear-
ment. A spokesman for its lier, to help fuel their parent
larger competitor, AMC Enter- companies digital distribu-
tainment Holdings Inc., de- tion businesses.
clined to comment. The company putting the
To compensate theaters for most pressure on studios,
lost box office, studios may however, is Netflix Inc., many
share 10% to 20% of premium studio executives say. It has
VOD revenue with them if the moved aggressively into fea-
window is less than 30 days ture films over the past year,
after the cinema debut, peo- outbidding studios for high-
ple with knowledge of the profile projects with big
talks said. A key sticking names such as Will Smith,
point is for how many years Brad Pitt and Ridley Scott.
would theaters be guaranteed Netflix is in talks to spend
their take before studios $120 million to $130 million
could cut them out. for a Martin Scorsese-di-
Theaters are more likely rected movie that would star
to want security over time Robert De Niro and Al Pacino,
than an extra 5% or 10%, said according to people familiar
Rob Moore, former vice chair- with the matter.
startups starting service in ness & Finance article in the
Myanmar incorrectly said the Friday-Sunday edition about
company operates in 35 cities. the cost of sand incorrectly
said that fracking a well re-
Fracking a West Texas quired 200 railcars filled with
well in some sweet spots takes sand. It also incorrectly said
10 million pounds of sand, that the Wisconsin study said
which takes 200 truckloads to shipping 5 million pounds of
transport. Meanwhile, a 2013 sand can require 100 railcars
study by the University of and 200,000 truckloads. The
Wisconsin said that shipping 5 article also incorrectly de-
million tons of sand can re- scribed independent invest-
quire 50,000 railcars or ment bank Evercore ISI as an
200,000 truckloads. A Busi- energy investment bank.
Meanwhile, Dublins ef-
forts took a major knock ear-
lier this month following
snap elections for Northern
Irelands regional assembly
which led to a significant po-
larization of local politics.
The trigger for those elec-
tions was a local scandal but
Brexit concerns helped drive
a surge in support for Sinn
Fein, which came within a
whisker of over-taking the
DUP as the largest party.
Sinn Fein and the DUP now
remain deadlocked ahead of
a Monday deadline to form a
coalition government, as re-
quired under the Good Friday
Agreement, with differences
over a common Brexit plat-
form a complicating factor.
Failure to reach a power-
sharing deal would lead to
fresh elections, with the risk
of further polarization, or
worse, a return to direct rule
by London, raising doubts
about the viability of the
constitutional settlement.
The message from Mr.
McGuinnesss funeral was that
no one in Northern Ireland
has any appetite for a return
to the violence of the past.
Yet there are growing
fears on both sides of the
border that Brexit has
stirred up political forces
that they hoped had long
been laid to rest.
LUKE SHARRETT/BLOOMBERG NEWS
peals to some of Hollywoods
most respected filmmakers.
Heavyweights like Christopher
Nolan, James Cameron and
Woody Allen have long said
they make movies to be seen
on movie screens, not on iPads.
These questions might be
answered if studios and the-
aters decide to experiment with
offering movies in different re-
lease windows at different
prices. For those opposed to
premium video on demand on
principle, however, thats like
opening Pandoras box just to
take a peek.
Ben Fritz
While Amazon.com Inc. re-
spects traditional windows
for its movies, Netflix streams
its original films the same
day they open in theaters, if
they play on the big screen at
all, which could further re-
duce consumers patience for
staggered releases.
If studios dont take com-
petitive steps, theyre just go-
ing to let Netflix seize control
of the entertainment busi-
ness, said Mr. Moore.
Erich Schwartzel
contributed to this article.
THE WALL STREET JOURNAL.
Europe Edition ISSN 0921-99
The News Building, 1 London Bridge Street,
London, SE1 9GF
Thorold Barker, Editor, Europe
Grainne McCarthy, Senior News Editor, Europe
Cicely K. Dyson, News Editor, Europe
Darren Everson, International Editions Editor
Joseph C. Sternberg, Editorial Page Editor
Anna Foot, Advertising Sales
Jacky Lo, Circulation Sales
Andrew Robinson, Communications
Jonathan Wright, Commercial Partnerships
Katie Vanneck-Smith,
Global Managing Director & Publisher
Advertising through Dow Jones Advertising
Sales: Hong Kong: 852-2831 2504; Singapore:
65-6415 4300; Tokyo: 81-3 6269-2701;
Frankfurt: 49 69 29725390; London: 44 207
842 9600; Paris: 33 1 40 17 17 01;
New York: 1-212-659-2176
Printers: France: POP La Courneuve; Germany:
Dogan Media Group/Hrriyet A.S. Branch; Italy:
Qualiprinters s.r.l.; United Kingdom: Newsprinters
(Broxbourne) Limited, Great Cambridge Road,
Waltham Cross, EN8 8DY
Registered as a newspaper at the Post Office.
Trademarks appearing herein are used under
license from Dow Jones & Co.
2017 Dow Jones & Company. All rights reserved.
Editeur responsable: Thorold Barker M-17936-
2003. Registered address: Avenue de Cortenbergh
60/4F, 1040 Brussels, Belgium
NEED ASSISTANCE WITH
YOUR SUBSCRIPTION?
By web: http://services.wsje.com
By email: subs.wsje@dowjones.com
By phone: +44(0)20 3426 1313
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
Iran Slaps Sanctions on 15 U.S. Companies
Move is retaliation for
Trump restrictions last
month over Tehrans
missile program
BY ASA FITCH
DUBAIIran imposed sanc-
tions on 15 American compa-
nies on Sunday in retaliation
for restrictions that the
Trump administration placed
on companies and people al-
legedly connected with its bal-
listic-missile program.
Iran had vowed reciprocal
action soon after the Trump
administrations move last
month, one of several escala-
tions between Iran and the
U.S. since President Donald
Trump took office in January.
The new strains could ham-
per regional peacemaking ef-
forts, roll back the Obama ad-
Official
Cautions
On Russias
Libya Role
BY LAURENCE NORMAN
BRUSSELSRussias role in
Libya is causing growing con-
cern at the North Atlantic
Treaty Organization, a senior
official said Saturday, with the
Kremlin appearing to throw its
support behind Gen. Khalifa
Haftar, a rival of the United
Nations-backed coalition gov-
ernment in Tripoli.
I am very concerned about
Russian forces seemingly gath-
ering to influence the situation
there. It troubles me very
much, said Rose Gottemoeller,
a deputy secretary general at
NATO.
Speaking at the Brussels Fo-
rum annual foreign policy con-
ference, she noted that Russia
had backed the United Nations
Security Council resolution
aimed at gathering interna-
tional support behind the frag-
ile national unity government.
However, she said it seemed
that there was a decision
made in the Kremlin to simply
toss out that resolution.
Apparent support
from the Kremlin for
a Libyan general
causes concern.
The fact that they have
turned to the general nowto
General Haftarand theyre
putting an emphasis on work-
ing with himthats not the at-
tempt at establishing a gov-
ernment of national unity that
was established by the U.N. Se-
curity Council resolution, she
told reporters later.
European countries have
lobbied Russia to use its influ-
ence with Gen. Haftar, who has
received support from Egypt,
the United Arab Emirates and
Saudi Arabia, to get him to
reconcile with the U.N.-backed
Tripoli Government of Na-
tional Accord, led by Faiez
Serraj.
I actually hope we could
get Russia to recommit to the
U.N. Security Council resolu-
tion, Ms. Gottemoeller said.
They voted for it and they are
a respected member of the
U.N. Security Council.
Gen. Haftar, seen by critics
as a would-be autocrat in the
mold of late Libyan dictator
Moammar Gadhafi, has trav-
eled to Moscow twice in the
past eight years and has re-
quested weaponry, people
close to the Kremlin have said,
despite a U.N. arms embargo.
Moscow says it maintains
contact with all sides in Libya
in the interest of finding a po-
litical solution to divisions in
the country. Russia has denied
that it has sent any Russian
soldiers to aid Gen. Haftars
Libyan National Army, which
controls much of the eastern
part of the country.
Ms. Gottemoeller cited me-
dia reports suggesting Russia
was building up forces in
Egypt, near Libya. The Russian
Defense Ministry declined to
comment on her remarks.
Thomas Grove in Moscow
contributed to this article.
Iranian leader Khamenei in the northeast city of Mashhad last week.
ministrations nuclear
diplomacy with Iran, and even
lead the countries into more
direct confrontation.
Iran is deeply involved in
the six-year Syrian civil war,
Iraq Military Blames ISIS for Civilian Deaths
BY TAMER EL-GHOBASHY
AND ALI A. NABHAN
HAMAM AL-ALIL, Iraq
The Iraqi military said Sunday
a blast that killed scores of ci-
vilians in western Mosul was
triggered by an Islamic State
booby trap, contradicting local
officials and residents who
claimed a U.S.-led coalition
airstrike caused the deaths.
The Iraqi military statement,
based on an initial assessment,
came a day after the U.S.-led
coalition acknowledged it car-
ried out an airstrike on March
17 at the request of Iraqi secu-
rity forces against Islamic State
fighters in western Mosul. The
location corresponded to alle-
gations of mass casualties.
The coalition, which is
backing Iraqi troops that are
engaged in fierce fighting to
retake the entire city from Is-
lamic State, said it is investi-
gating to determine if the
strike caused several houses
to collapse, trapping what lo-
cal officials said could be up to
200 people.
It wasnt possible to inde-
pendently verify the cause of
the blast.
On Sunday, an official with
Iraqs civil-defense authority
said it had recovered 172 vic-
tims so far from a cluster of
collapsed homes in the Mosul
al-Jadeeda neighborhood that
is at the center of the blast
probe.
The blast, and the possible
U.S.-led coalition role in it, has
brought into focus the extreme
dangers the latest push to root
out Islamic State from Mosul
poses to an estimated half mil-
lion people believed to be
trapped by the combat. Civil-
ians face increasingly harrow-
ing conditionswith dwindling
food, clean water and fuel sup-
pliesand those who flee of-
ten dodge crossfire between
Islamic State and Iraqi forces.
Turkey, Flynn Said to Discuss Clerics Removal
Retired Army Lt. Gen. Mike
Flynn, while serving as an ad-
viser to the Trump campaign,
met with top Turkish govern-
ment ministers and discussed
removing a Muslim cleric from
By James V. Grimaldi,
Dion Nissenbaum
and Margaret Coker
the U.S. and taking him to
Turkey, according to former
Central Intelligence Agency Di-
rector James Woolsey, who at-
tended, and others who were
briefed on the meeting.
The discussion late last sum-
mer involved ideas about how
to get Fethullah Gulen, a cleric
whom Turkey has accused of
orchestrating last summers
failed military coup, to Turkey
without going through the U.S.
extradition legal process, ac-
cording to Mr. Woolsey and
those who were briefed.
Mr. Woolsey told The Wall
Street Journal he arrived at
the meeting in New York on
Sept. 19 in the middle of the
discussion and found the topic
startling and the actions being
discussed possibly illegal.
The Turkish ministers were
interested in open-ended think-
ing on the subject, and the ideas
were raised hypothetically, said
the people who were briefed.
The ministers in attendance in-
cluded the son-in-law of Turkish
Monday, March 27, 2017 | A3
WORLD NEWS
cluding the U.S. that edged to- legedly helping Israel and con- Tehran called the Trump
ward repairing a long-frayed tributing to regional instabil- administrations sanctions in
relationship. ity, according to the official February an affront to its right
OFFICE OF THE IRANIAN SUPREME LEADER/ASSOCIATED PRESS
Mr. Trump, however, prom- Islamic Republic News Agency, to self-defense and a violation
ised to rip up the nuclear deal citing a Foreign Ministry of 2015s nuclear deal. Under
during his campaign. Last statement. that deala foreign-policy pri-
month, he tweeted that Iran Other companies sanc- ority for the Obama adminis-
was on notice over its ballis- tioned included Denver-based trationthe U.S., European
tic-missile program. Iran was real-estate giant Re/Max Hold- Union and United Nations
also among the Muslim-major- ings Inc., which the ministry lifted many sanctions against
ity countries whose citizens said had a role in Israeli set- Iran in exchange for curbs on
were barred from entering the tlements in Palestinian territo- its disputed nuclear program.
U.S. under two executive or- ries. Re/Max and the other The imposition of new
ders that the Trump adminis- companies didnt immediately sanctions by the U.S. is based
tration said aimed to keep ter- respond to requests for com- on fabricated and illegitimate
rorists out. Those orders have ment. pretexts and amounts to an
been stayed by federal judges. Dealings with the named action against international
Irans sanctions on Sunday companies were prohibited, regulations as well as the
mainly targeted American de- the ministry said, and their as- word and spirit of the [nuclear
fense companies, including sets in the Islamic Republic deal], Irans Foreign Ministry
Massachusetts-based defense were frozen. Representatives said, according to IRNA.
and is a key player along with giant Raytheon Co., Minne- for the companies wouldnt be A U.N. Security Council res-
the U.S. in international talks sota-based firearms manufac- given visas, it said. olution endorsing the nuclear
toward a political solution. turer Magnum Research Inc., It wasnt clear if any of the deal called upon Iran not to
During Mr. Obamas adminis- and Illinois firearms manufac- companies had any ongoing develop ballistic missiles de-
tration, Iran reached a nuclear turer Lewis Machine and Tool business with the country or signed to be capable of carry-
deal with six world powers in- Co., singling them out for al- assets that could be frozen. ing nuclear warheads.
AHMAD AL-RUBAYE/AGENCE FRANCE-PRESSE/GETTY IMAGES
An Iraqi inspected damage Sunday in the Mosul al-Jadeeda neighborhood of Mosul, the northern city Baghdad is trying to recapture.
After reaching a muddy government-allied strikes. the three months of fighting in The coalitions Saturday
field designated as a receiving Iraqi troops have been bat- the east. statement didnt specify which
center outside Mosul, Ahmed tling Islamic State in western Iraqi politicians have raised of those strikes was found to
Khadim, from the Wadi Hajar Mosul since mid-February, af- questions over the military have taken place in Mosul al-
district, spoke of hunger and ter wresting back eastern Mo- tactics Iraqs security forces Jadeeda. Local residents and
the constant blasts that ruined
his hearing.
sul from the extremist group
in late January. The overall
and their U.S.-led coalition ad-
visers have employed in the
officials said the civilian
deaths were clustered in four
We were running out of campaign to recapture Mosul heavily populated city. Iraqs homes, but the level of de-
food supplies day after day,
said the 33-year-old motorcy-
began in mid-October.
Iraqs government has re-
speaker of parliament said the
Mosul al-Jadeeda incident
struction made it difficult to
determine which house was
cle mechanic. The whole fam- fused to release casualty fig- would be the subject of a spe- apparently targeted.
ily at some point shared just ures, but statistics compiled cial session this week. Iraqs If confirmed that the strike
one loaf of bread. by independent groups have defense ministry said it had killed the civilians, it would
Some 201,000 people have shown the battle for western launched a probe. represent the largest death
managed to escape western Mosul has been far deadlier According to a U.S. military toll by a U.S.-led coalition air-
Mosul, according to the Iraqi for civilians than in eastern news release from March 17, strike since its air campaign
government. Many have Mosul. The Iraqi Observatory the coalition conducted four against Islamic State began in
emerged with stories of leaving for Human Rights said since strikes in Mosul targeting nu- August 2014.
behind relatives buried under February 19, 3,864 civilians merous Islamic State posi- Ghassan Adnan
rubble from blastswhether have been killed in the west, tions, weapons systems, vehi- in Baghdad
militant bombs or mortars or compared with 2,190 killed in cles and a car bomb. contributed to this article.
Flynn had been consulting on day he had given the White
behalf of the Turkish govern- House and U.S. Attorney Gen-
ment when he named him na- eral Jeff Sessions new evidence
tional security adviser, White linking Mr. Gulen to the coup.
OZAN KOSE/AGENCE FRANCE-PRESSE/GETTY IMAGES
House press secretary Sean Mr. Woolsey said he attended
Spicer said this month. the Sept. 19 meeting at the urg-
In its filing, Mr. Flynns firm ing of the Flynn Intel Groups
said its work from August to chairman and president, Bijan
November could be construed Kian. Mr. Woolsey said he had
to have principally benefited agreed to be on the groups ad-
the Republic of Turkey. The visory board and was offered a
filing said his firms fee, consulting fee for his work, but
$530,000, wasnt paid by the turned it down because of what
government but by Inovo BV, a he heard at the meeting. He
Dutch firm owned by a Turkish held no stake in the firm.
businessman, Ekim Alptekin. The meeting, at the Essex
U.S.-Turkish relations dete- House hotel in Manhattan, in-
Protesters rallied to support Turkish President Erdogan on Sunday. riorated in the final year of the cluded Mr. Cavusoglu and Berat
Obama administration over Albayrak, Mr. Erdogans son-in-
President Recep Tayyip Erdogan any other such activities. disagreements about extradit- law and the energy minister, ac-
and the countrys foreign minis- Mr. Flynn served as Presi- ing Mr. Gulen and U.S. support cording to the disclosure docu-
ter, foreign-lobbying disclosure dent Donald Trumps national for Syrian Kurdish forces bat- ments. Also present were
documents show. security adviser for 24 days tling Islamic State. The Turkish Messrs. Alptekin and Mr. Kian.
Mr. Woolsey said the idea and resigned after he misled government has been demand- Mr. Woolsey said he didnt
was a covert step in the dead Vice President Mike Pence and ing Mr. Gulens extradition to say anything during the discus-
of night to whisk this guy others about his contact with face charges that he was the sion, but later cautioned some
away. The discussion, he said, a Russian diplomat. The Fed- architect of an unsuccessful attendees that trying to remove
didnt include actual tactics for eral Bureau of Investigation is military coup last summer to Mr. Gulen was a bad idea that
removing Mr. Gulen from his looking into whether Trump overthrow Mr. Erdogan. might violate U.S. law. Mr.
U.S. home. If specific plans had campaign officials collabo- Mr. Gulen, who since 1999 Woolsey said he also informed
been discussed, Mr. Woolsey rated with the Russian govern- has lived in the Pocono Moun- the U.S. government by notify-
said, he would have spoken up ment to influence the presi- tains north of Philadelphia and ing Vice President Joe Biden
and questioned their legality. dential election. has a green card giving him through a mutual friend.
Price Floyd, a spokesman for On March 2, weeks after permission to live in the U.S., The mutual friend confirmed
Mr. Flynn, who was advising the Mr. Flynns departure from the denies involvement. Mr. Erdo- to the Journal he told Mr. Biden
Trump campaign on national Trump administration, the gan has been trying for years to about the meeting. Mr. Bidens
security at the time of the Flynn Intel Group, his consult- undermine Mr. Gulen, a one- spokeswoman declined to com-
meeting, disputed the account, ing firm, filed with the Justice time ally whom Turkey has now ment on the matter, other than
saying at no time did Gen. Department as a foreign agent branded as a terrorist leader. to say Mr. Biden felt the Gulen
Flynn discuss any illegal actions, for the government of Turkey. Turkish Foreign Minister matter should be handled
nonjudicial physical removal or Mr. Trump was unaware Mr. Mevlut Cavusoglu said Tues- through the courts.
 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A4 | Monday, March 27, 2017 HK JP KO ML SI IN UK FR MN PR THE WALL STREET JOURNAL.

WORLD NEWS

Russia Faces
Protests Over
Corruption
Opposition figure where they faced off with
ranks of Interior Ministry po-
Alexei Navalny was lice in riot gear.
among hundreds Police officials told news
agency Interfax that 7,000 to
detained in protests 8,000 people participated and
around 500 were arrested. The

BY NATHAN HODGE
MOSCOWThousands of
demonstrators took to the
streets of cities across Russia
on Sunday to protest official
corruption in the most signifi-
cant challenge to President
Vladimir Putin in years.
Sundays marches were
called by leading opposition
figure Alexei Navalny, who was
detained during the protest in
Moscow, according to support-
ers and local media.
There are things in life
worth being detained for, Mr.
Navalny said on Twitter.
Crowds chanting Russia
without Putin and carrying
placards decrying official cor-
ruption converged on Pushkin
Square in the Russian capital,
radio station Echo of Moscow,
drawing on unofficial esti-
mates, put the number of par-
ticipants in Moscow much
higher.
The demonstrations are a
sign of public dissatisfaction
in Russia despite the consis-
tently high approval ratings
Mr. Putin receives in opinion
surveys.
Russias economy has strug-
gled and the country has been
hit with international sanc-
tions since it annexed Crimea
from Ukraine in 2014. Trans-
parency International rates
the country as one of the most
corrupt in Europe.
I dont like the kind of
Russia we have today, or the
people who are in power, said
Anna Tursina, who attended
Opposition supporters in Moscow marched in an anticorruption rally against the government, part of a nationwide protest.
the Moscow march. Theres
no money for education, or
science, for children, mothers
and the elderly.
Ms. Tursina carried a sign
emblazoned with the slogan,
A thief should sit in jail.
Images on Russian social
media showed crowds of hun-
dreds or thousands in cities
across the country. Supporters
of Mr. Navalnys posted photos
of demonstrations in Siberian
cities of Irkutsk, Tomsk and
Krasnoyarsk.
Interfax, citing local au-
thorities, reported that 1,500
demonstrators turned out for
a protest in Vladivostok on
Russias Pacific Coast.
In Moscow, police warned
demonstrators to disperse.
You are violating public
order, a police officer said
over a loudspeaker. Consider
the consequences.
In response, members of
the crowd answered by shout-
ing: Were out for a walk! As
detained protesters were led
away, members the crowd
shouted, Shame!
Protesters said they were
mobilized in part by a film
produced by Mr. Navalny and
his Anti-Corruption Founda-
tion.
The group accuses Prime
Minister Dmitry Medvedev of
amassing a vast collection of
properties and using charities,
offshore companies and net-
MAXIM SHEMETOV/REUTERS
works of friends to disguise
his wealth.
A spokeswoman for Mr.
Medvedev couldnt immedi-
ately be reached for comment.
Kremlin officials have dis-
missed Mr. Navalnys allega-
tions as baseless.
Kremlin spokesman Dmitry
Peskov said Mr. Navalnys calls
for a march were illegal ap-
peals and nothing more than
a provocation, the news
agency RIA-Novosti said.

Merkel Survives Test in Key Vote

ARNE DEDERT/AGENCE FRANCE-PRESSE/GETTY IMAGES

BY ANDREA THOMAS
BERLINGerman Chancel-
lor Angela Merkels conserva-
tive party scored a clear vic-
tory Sunday in the small state
of Saarland, dashing hopes
among her center-left con-
tenders that the election
would signal a change of polit-
ical sentiment ahead of a na-
tional vote in September.
Preliminary results showed
the first of three state elec-
tions ahead of the Sept. 24
ballot was likely to return the
outgoing government, a con-
servative-led alliance with the
left-of-center Social Demo-
cratic Party as a junior part-
ner.
Such a government mirrors
the set-up in Berlin, where Ms.
Merkel rules with her main ri-
vals in a junior position.
This is an encouraging re-
sult for [Ms. Merkels] Chris-
tian Democratic Union because
we can witness that pragmatic
and honest governing pays
off, Peter Altmaier, the chan-
cellors chief of staff, said as
the results came through.
Ms. Merkels CDU, which
has ruled Saarland, the
sparsely populated state that
borders both France and Lux-
embourg, for 18 years, came in
at 40.4%. That dealt a blow to
the Social Democrats, who fin-
ished with 30.4% of the vote,
preliminary results showed.
Many opinion polls ahead
of Sundays vote had predicted
a neck-and-neck race between
the two mainstream parties.
The Social Democrats had
hoped the nomination of Mar-
tin Schulz, a former European
Parliament president, as their
new chairman and lead candi-
date for the general election
would give their party a boost
in the conservative state.
This is not a good eve-
ning, said Mr. Schulz. But
this doesnt mean we wont
achieve our goal. Our goal re-
mains to bring about a change
in government in Germany. A voter casts a ballot in Pttlingen, southwestern Germany.

Attackers Life Punctuated by Violence

Khalid Masood used many names and many addresses, was jailed for knifing a man
BRIGHTON, EnglandOn
Tuesday, Khalid Masood ate
CARL COURT/GETTY IMAGES

a takeout kebab for dinner

and spent his last night alive
alone in a small, budget ho-
tel in this English seaside
town. He checked out be-
fore 8 the next morning, like
anyone else with plans for
Police officers patrolled Londons Westminster Bridge on Friday. the day. He just put the key
on the counter and left, the

TERROR Google. YouTube charges an

advertiser about $7 to $12 per
1,000 ad views on average, de-
pending on the targeted audi-
hotels receptionist said.

Continued from Page One
to get into situations like en-
crypted WhatsApp.
Foreign Secretary Boris
Johnson told the Sunday
Times it was disgusting that
tech companies were profiting
from ads placed next to ex-
tremist material online.
The British media has re-
ported that Masood looked at
WhatsApp in the minutes be-
fore the attack, but police
wouldnt confirm that.
A spokeswoman for Whats-
App, which is owned by Face-
book Inc., responded that we
are horrified by the attack car-
ried out in London earlier this
week and are cooperating with
law enforcement as they con-
tinue their investigations. She
didnt comment further.
Mr. Johnson attacked Al-
phabet Inc.s Google for what
he said was its failing to re-
move extremist websites and
cashing in on them by running
advertisements alongside
them. Im furious about it, across the Westminster Bridge,
Mr. Johnson told the newspa-
per. Its disgusting. They need
to stop just making money out
of prurient violent material.
Earlier this month, Google
said it would give advertisers
more control over where their
ads appear online after major
clients in the U.K., including
the government, withdrew
their spots because ads ran be-
fore extremist video on its
YouTube site.
The government had pulled
its spending from YouTube
and the Google Display Net-
work, a network of more than
2 million websites that part-
ner with Google to serve ads.
Each time a user watches
an ad Google has placed be-
fore a YouTube video, the ad-
vertisers pay a small fee split
between the creator and
ence, advertisers say.
A spokesman for Google de-
clined to comment. Google has
said it already employs soft-
ware to automatically scan
YouTube video titles and im-
ages to decide whether they
are appropriate for advertising
before placing ads on them.
Masood, who had a range of
convictions unrelated to terror-
ism, lived an itinerant life. In
recent years, he appeared to
have moved among places with
links to extremism, including
Luton and Birmingham.
He lived in Luton in the
years around 2010 and 2011, ac-
cording to a neighbor. That was
at a time that Junead Khan,
later convicted of preparing a
terror attack in connection with
a plan to kill Royal Air Force
personnel, was also there.
Khan posted a video on You-
Tube in those years showing
himself listening to music that
is featured in some Islamic
State propaganda, while driving
story and decipher his mo-
the scene of Masoods attack.
Since the attack, officers
have carried out 15 searches at
addresses across England and
Wales. Twelve people have
been arrestedthe latest a 30-
year-old man in Birmingham
on Sundaywith nine released
with no further action.
Among two people released
on Saturday was Masoods wife,
Rohey Hydara, a 39-year-old
woman living in East London.
No one responded to a knock on
her door in an apartment block
near the former Olympic Village.
Over the weekend, members
of the public lay flowers on
Westminster Bridge in memory
of the victims of the attack.
Stu Woo, Jack Nicas,
Jason Douglas and Alistair
MacDonald contributed to
this article.
By Stu Woo,
Jenny Gross
and Max Colchester
Hours later, police say,
Masood went on a rampage
50 miles to the north in Lon-
donmowing down pedes-
trians with his car, killing
three, before leaping from
the vehicle and stabbing an
unarmed policeman to death
outside the British Parlia-
ment. Police then shot and
killed Masood.
In the days before the at-
tacks, Masood, a 52-year-old
British convert to Islam,
crisscrossed the country,
traveling from Brighton on
the south coast to the cen-
tral city of Birmingham and
back before aiming himself
at the heart of the capital to
undertake the last acts in an
itinerant life punctuated
with violence.
On Friday, police and in-
telligence officers were still
trying to assemble the ele-
ments of Masoods confusing
official said. The
tives. Born Adrian Elms in
southeast England, he used
multiple names and aliases,
police said.
He changed addresses reg-
ularly, appearing in recent
years to move among places
that have had connections to
extremist plots. He had multi-
ple criminal convictionsthe
first when he was still a teen-
agerand served jail time.
Since Wednesdays terror-
ist assault, the worst in Brit-
ain since a series of coordi-
nated bombings in 2005
killed 52 people, hundreds of
detectives have worked to
trace Masoods movements
and associates.
After a series of raids on
locations connected to
Masood, police on Friday
were holding four people on
JOEL GOODMAN/LONDON NEWS PICTURES/ZUMA PRESS (ABOVE); METROPOLITAN POLICE/PRESS ASSOCIATION/ZUMA PRESS (BELOW)
Visitorss shadows are seen on a wall of memorial flowers at the Houses of Parliament on Sunday.
suspicion that they were pre- Masood once attacked a Katie Garricques, who lives
paring terrorist acts. A fifth womans car with a baseball in Luton on the outskirts of
person was released from bat after an argument. London, said she recognized
custody on bail. In 2000, Masood lashed Masood from a police photo
A British intelligence offi- out again. Heather Mott said as her neighbor for a couple
cial said authorities were her late husband, Piers, was of years around 2010 and
looking into whether Masood in a pub when Masood 2011. He lived there with his
became radicalized in prison, started an argument with wife, who wore African attire,
an increasingly common path another customer. Mr. Mott and two children, she said,
to terrorism. The official also stepped in. adding he worked frequently
said it was unclear what role An angry Masood attacked in the garden. She said they
several trips Masood made to her husband with a knife, would exchange hellos.
Saudi Arabia had played. Mrs. Mott said. The assault He was very fatherly and
Were trying to left a 3-inch gash loving and I was quite
piece together on Mr. Motts face, shocked. There was never any
what we can, the according to a re- indication that hed be radi-
port of the court calized or aggressive, she
big question is at proceedings pub- said. I felt sickened.
what point did he lished that year in Later, Masood seems to
decide to do this the local newspa- have moved to Birmingham,
and why, and who per, the Argus. where police have searched a
else is involved. A lawyer for series of addresses and de-
Long stretches Masood argued tained two people.
of Masoods life there were racial Ciaran Molloy and other
are difficult to ac- Police photo of overtones to the neighbors said they recog-
count for. He was Khalid Masood dispute, the Argus nized Masood as a previous
born on Christmas said. Masoods occupant of one of the houses
Day in 1964, according to po- mother is white, his father being searched from a photo
lice. He attended high school black. Masood was sentenced circulated in the media.
in Kent, southeast of London. to two years in prison. Several neighbors said
By the late 1990s, when Masood went to Saudi Ara- Masood occasionally dressed
Masood was in his 30s, he bia after he was released from in a white robe and a skull-
had landed in the quiet vil- prison. The Saudi Embassy in cap, while his wife wore a
lage of Northiam in nearby London said Masood was in head scarf but didnt cover
East Sussex. Saudi Arabia on a work visa her face.
He was a normal guy un- to teach English from Novem- Masood and his family
til he had a couple of ber 2005 to November 2006 lived on the street for at least
drinks, said Nigel Gill, who and again from April 2008 to three years, several neighbors
runs a local convenience April 2009. He was there said, and left just before
store and used to sell beer to again on a pilgrimage visa in Christmas. It was pretty sud-
Masood. Mr. Gill said 2015, the embassy said. den, Mr. Molloy said.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
Hong Kong Chooses a Pro-China Leader
Panel selects a city
official widely viewed
as Beijings favorite
for a five-year term
BY CHESTER YUNG
AND JOHN LYONS
HONG KONGHong Kongs
electoral committee picked a
staunchly pro-China candidate
to lead the city in voting that
underscored Beijings growing
political influence on the for-
mer British colony.
The 1,194-member commit-
tee stacked with pro-Beijing
business leaders and politi-
cians chose Carrie Lam, a
longtime city official who was
widely viewed as Beijings fa-
vorite in the three-person
race. During the campaign,
electors acknowledged receiv-
ing phone calls from Beijing
representatives instructing
them to pick Ms. Lam.
The vote for chief executive
comes at a sensitive time for
Beijing. This summer marks
the 20th anniversary of Brit-
ains handover of Hong Kong to
China. Meanwhile, President Xi
Jinping is tightening political
control ahead of a Communist
Party congress this fall that is
expected to further cement his
leadership. Both events put a
OAS Chief Gets Stern on Caracas
BY KEJAL VYAS
Back when he was foreign
minister of tiny, left-leaning
Uruguay, Luis Almagro
praised Venezuelas Socialist
government for being in the
vanguard of a continent that
was largely leftist and anti-
globalization.
Now, as secretary-general
of the Organization of Ameri-
can States, Mr. Almagro is lob-
bying the 34-nation, Washing-
ton-based body to oust
Venezuela from its ranks un-
less President Nicols Maduro
permits elections and eases a
clampdown on opponents and
the press.
The carrot he holds out to
Mr. Maduro is money: The
OAS secretary-general argues
that if it makes the demo-
cratic reforms he demands,
Venezuelas cash-strapped
government would be able to
WORLD WATCH
EUROPEAN UNION
Leaders, Minus May,
Celebrate Anniversary
European Union leaders, except
British Prime Minister Theresa
May, pledged their allegiance to
the bloc on the 60th anniversary
of its founding, but deep divisions
remain over its future after Brexit.
In a ceremony on Romes Capi-
toline Hill on Saturday, the blocs
leaders signed a symbolic declara-
tion to continue the European proj-
ect, which brought peace to a con-
tinent scarred by two world wars.
Unity is both a necessity and
our free choice, the leaders
pledged in a declaration. Taken
individually, we would be sidelined
by global dynamics. Standing to-
gether is our best chance to influ-
ence them, and to defend our
common interests and values.
But in a sign of how deep divi-
sions run between the 27 coun-
tries that will form the EU once
the U.K. leaves the bloc, the text
was watered down after Poland
and Greece threatenedfor differ-
ent reasonsnot to sign.
Valentina Pop
PAKISTAN-AFGHANISTAN
Islamabad Building
Afghan Border Fence
Pakistan said it has begun
building a fence along its border
with Afghanistan, a move that
could further rile relations be-
tween the countries, which accuse
each other of harboring terrorists.
Kabul doesnt recognize hun-
dreds of miles of Pakistans moun-
tainous northwest border, which
was drawn up under British colo-
nial rule. Pakistan in February
closed the border for security rea-
sons for more than a month, to
protests from landlocked Afghani-
stan, reopening it on March 20.
Militants from Pakistan have
relocated in Afghanistan and use
its territory to stage attacks into
Pakistan, Islamabad says.
Conversely, Kabul says Paki-
stan has been for years shelter-
ing the Afghan Taliban and the
Carrie Lam waved after she won the election for Hong Kongs chief executive on Sunday.
premium on having a Hong
Kong leader in place who can
avoid political disturbances
such as those in 2014, when
dissatisfaction with the politi-
cal process led to widespread
pro-democracy protests.
Ms. Lam, 59 years old, steps
into a post fraught with pitfalls.
The former bureaucrat, who will
become the citys first female
chief executive, must balance
tap international credit lines.
With Venezuelans suffering
from chronic shortages of
food and medicine, the coun-
try badly needs financing be-
cause its investment-starved
oil industry, once a cash cow,
has seen output fall, spurring
fears of a default on the coun-
trys sovereign debt. Suspen-
sion from the OAS would fur-
ther close the door to loans
from multilateral financial in-
stitutions linked to the re-
gional organization.
Venezuela has to re-de-
mocratize itself in order to re-
finance itself, Mr. Almagro
said in an interview with The
Wall Street Journal. No one is
putting money into Venezuela.
With a dictatorship in power,
every minute is like an earth-
quake for the country.
The OASs permanent coun-
cil will hold a special meeting
to discuss Venezuela on Tues-
allied Haqqani network, a con-
cerned echoed by Washington.
Pakistan has decided it needs
to do more to try to close off the
border. Much of the border on
the Pakistan side is made of up
of tribal areas, a zone where reg-
ular laws dont apply. Pakistans
army chief, Gen. Qamar Bajwa,
visiting the border Saturday, said
construction of a fence has begun
in the Bajaur and Mohmand parts
of the tribal areasboth frequent
crossings points for militants.
Saeed Shah
EGYPT
Mubarak Released
From Cairo Detention
Former President Hosni
Mubarak was released from de-
tention in Cairo, ending efforts to
hold him accountable for abuses
during his three-decade rule that
was upended by the Arab Spring
uprising six years ago.
Mr. Mubaraks release on Fri-
day from the Armed Forces Hos-
pital came after a court cleared
him of involvement in the killing
of protesters during the uprising.
He had been detained at the
hospital for treatment, his law-
yer said. Accompanied by
guards, he was taken home to
the Cairo suburb of Heliopolis.
Mr. Mubaraks arrest in 2011,
nearly two months after he was
forced to step down by protests,
was celebrated, along with court
convictions.
His ouster paved the way for
a period of largely unfettered
political expression. Egyptians
voted for the first time in the
countrys history.
In 2012, the Muslim Brother-
hoods Mohammed Morsi won
the first democratic presidential
election. A year later, a military
coup sent him and thousands of
his supporters to jail.
In 2014, the election of Presi-
dent Abdel Fattah Al Sisi,
Egypts former military chief,
ushered in a period that critics
described as more oppressive
than the Mubarak era.
Dahlia Kholaif
WORLD NEWS
the demands of mainland Chi-
nese authorities who are seek-
ing greater control over Hong
Kong life with city residents
who are accustomed to Western
norms such as the rule of law.
She defeated John Tsang, a
U.S.-educated Hong Kong civil
servant who polls indicated
was far more popular than Ms.
Lam, but who was widely seen
as lacking the backing of Bei-
day. It comes after 14 nations,
including the most important
ones in the Americas, issued a
joint statement Thursday call-
ing for Venezuela to release
political prisoners, return full
powers to the congress and
hold regional elections that
Mr. Maduro had indefinitely
postponed. We feel the time
has come to act, Mexican For-
eign Minister Luis Videgaray
said in revealing the initiative.
Officials from two large
lenders active in the region
said their institutions were
delaying disbursing more than
$1 billion to projects in Vene-
zuela partly because Mr. Ma-
duro has stripped the opposi-
tion-controlled legislature of
budget oversight, generating
legal uncertainties for multi-
lateral and private lenders.
Last year, Mr. Maduros rivals
in congress warned interna-
tional investors that any deals
Farmers Seek Shelter From Nafta Storm
U.S. agricultural producers
are lobbying hard on both
sides of the Mexico border to
try to ensure that a renegotia-
tion of the North American
Free Trade Agreement doesnt
turn U.S. farm exports into
collateral damage.
By Dudley Althaus
and Santiago Prez
in Mexico City
and William Mauldin
in Washington
Farm groups are making
their case in Washington in the
hopes that changes to the 23-
year-old trade deal dont hurt
what has become the No. 1 mar-
ket for many U.S. grain, meat
and dairy products, often from
states that supported President
Donald Trump in the election.
Agriculture groups have been
flocking to Mexico in recent
weeks to strengthen ties with
clients and the government
amid concerns Mexico could
slap retaliatory tariffs on goods
if the U.S. pulls out of Nafta.
Mexico Foreign Minister
Luis Videgaray raised that
A truck crosses the border into Mexico at the World Trade Bridge in Nuevo Laredo.
BOBBY YIP/REUTERS
jing. Ms. Lam garnered 777
votes, compared with 365 for
Mr. Tsang and 21 for a third-
place finisher. She will serve a
five-year term.
In a speech after the results
were announced, Ms. Lam said
she would focus on mending
social rifts.
My priority will be to heal
the divide and to ease the frus-
trations, and to unite our soci-
signed without their legisla-
tive support wouldnt be valid.
Despite sitting atop the
worlds largest oil reserves,
the economy contracted by
17% last year, according to
some estimates. There are gas-
oline shortages and three out
of four people in the country
reported losing 19 pounds or
more in weight during 2016
because of food scarcities, ac-
cording to a recent poll by
three Venezuelan universities.
With debt markets demand-
ing nearly 30% yields to hold
Venezuelan bonds, the single-
digit borrowing rates gener-
ally offered by multilaterals
would be the cheapest source
of financing for them, one of
the officials from a multilat-
eral lender said. But they are
basically cut off from credits.
Amid the fast-deteriorating
situation, Mr. Maduro has dis-
missed calls for reforms and
threat last month, saying that
retaliatory duties could be
used as a response to unilat-
eral trade barriers. In 2009,
Mexico did just that: following
a dispute over allowing Mexi-
can trucks to cross the border,
Mexico put import tariffs on up
to 99 products, affecting some
$2 billion in U.S. farm exports.
Weve got to have export
markets, its that simple. We
cant survive without them,
said Phillip Councell, chairman
of the U.S. Grains Council, a
Washington-based organiza-
tion which promotes grains ex-
ports. Mr. Councell, who farms
nearly 2,000 acres of grain and
vegetables in eastern Mary-
land, was part of a delegation
that visited Mexican officials
and clients in mid-March.
Mr. Trump has called Nafta
which also includes Canada
the worst trade pact the U.S.
has ever made, saying it is re-
sponsible for millions of factory
jobs being lost to Mexico. He has
said that he expected talks to
begin this year, and that they
would either revamp the pact in
favor of American workers or he
Monday, March 27, 2017 | A5
ety to move forward, she said. ers of the 2014 pro-democracy
Ms. Lam campaigned on a protests, said the result Sun-
platform of increasing spend- day was a nightmare for the
ing to alleviate day-to-day people of Hong Kong.
problems such as housing [Ms.] Lams victory despite
shortages and improve social her lack of representation and
services in a city with one of popular support reflects the
the widest rich-poor gaps of Chinese Communist Partys
any developed society. complete control over Hong
But tensions resurfaced on Kongs electoral process and
Sunday as protesters decried its serious intrusion of Hong
the result, which they deem Kongs autonomy, the group
undemocratic because the said in a statement.
citys 7.35 million people have Hong Kong activists said
no direct vote. A small group China is eroding the promise
of protesters carrying signs it made for autonomy en-
and shouting pro-autonomy shrined in a one country, two
slogans inside the convention systems in the agreement
hall where the ballots were sealing the U.K.s 1997 hand-
counted briefly disrupted the over of its former colony.
announcement of Ms. Lams In 2015, associates of a
victory. Ms Lam stood expres- Hong Kong book store that
sionless on a stage until the specialized in gossipy books
disturbance died down. about Chinese politicians
Political analyst Dixon Sing went missing and resurfaced
says Ms. Lam may come under detained in mainland China.
pressure from Beijing to pass One of the booksellers alleged
laws that further curb free- he was whisked from Hong
doms in Hong Kong. Kong, a violation of the two-
Carrie Lams ability and system rule.
willingness to resist Beijings China has counted on sup-
hard-line policy will be a chal- port from Hong Kong elites
lenge for her legitimacy in the with deep business ties on the
eyes of Hong Kong people, mainland, as well what some
said Mr. Sing, an associate call a silent majority of locals
professor at the Hong Kong who see bucking China as fu-
University of Science and tile and would rather spend
Technology. their energy earning a living
The Demosisto party, and keeping up with steadily
founded by some of the lead- rising property prices.
LENIN NOLLY/EFE/ZUMA PRESS
Luis Almagro, center, advocates firmer stance toward Venezuela.
for opening up his country to for a resolution that would
humanitarian aid. The presi- seek action against Venezuela
dent has also hurled a litany by June. Mr. Maduros admin-
of insults at Mr. Almagro, call- istration, Mr. Almagro said in
ing him inept, an intervention- a 75-page report last week, is
ist and human trash. in violation of the OASs hu-
Im not going to respond man-rights charter, to which
to him at that level, Mr. Al- Venezuela is a signatory.
magro said. Intellectually it Weve reached an inflec-
would devalue me. tion point where we have to
Instead, the 53-year-old ca- take firmer steps against the
reer diplomat is meeting with violation of democratic order,
OAS members to rally support Mr. Almagro told the Journal.
would scrap it altogether. U.S. farmers have expressed
Mr. Trump has also asserted concern about Mr. Trumps
his support for U.S. farmers. agenda and its focus on manu-
As my Administration fights facturing. This month, 11 farm
for better trade deals, agricul- groups met with Gary Cohn, di-
ture will be an important con- rector of the National Economic
sideration so that its signifi- Council, a White House office
cant contributions will only that advises the president.
increase in the years ahead, Our big concern is touching
he wrote on Tuesday. Nafta at all: Its hard for us to
Nafta has greatly aided the improve on our access to Can-
industrialization of Mexico as ada and Mexico, said Kent Ba-
U.S. firms built factories to cus, director of international
supply American consumers. trade and market access at the
But Mexico also made signifi- National Cattlemens Beef Asso-
cant concessions in the pact by ciation. The White House and
opening its markets to more ef- the U.S. Trade Representative
ficient U.S. and Canadian farm- declined to comment on the
ersat the expense of many farmers message about Nafta.
poor, small Mexican farms. Commerce Secretary Wilbur
U.S. farm imports are now Ross, during his confirmation
critical for Mexicos food supply, hearing earlier this year, sug-
providing all of it corn and sor- gested the U.S. has the upper
ghum imports, for example. hand. Since many trading
Mexico has about a $60 bil- partners depend on food im-
lion trade surplus with the ports, the U.S. can use its com-
U.S., mostly due to manufac- petitive edge in agriculture in
tured products such as cars. In trade talks, he said.
turn, Mexico enjoys a surplus But the U.S. farm lobby wants
of $7 billion in agricultural the administration to remember
products, providing U.S. con- that Mexico has leverage, too.
sumers with winter vegetables With the productivity of U.S. ag-
such as tomatoes and fruits. riculture growing faster than
domestic demand, the sector re-
lies heavily on exports to sustain
prices and revenue.
U.S. farm exports to Mexico
totaled close to $18 billion last
year, according to U.S. trade
figures, compared with $4.2
billion in 1994, the year Nafta
was signed.
U.S. lobbyists said their
meetings with Mexican offi-
cials were constructive and
that local clients seemed reas-
sured. Mexicos Economy Min-
istry, which leads Naftas rene-
gotiation, declined to comment
on the talks with these groups.
Should talks on Nafta break
down, Mexicos retaliatory tar-
DANIEL BECERRIL/REUTERS
iffs in 2009 are an example of
what could happen. Mexico im-
posed the tariffs after it won a
Nafta dispute resolution that the
U.S. had unfairly blocked Mexi-
can trucks from U.S. roads.
Jesse Newman contributed
to this article.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A6 | Monday, March 27, 2017
NETFLIX
Continued from Page One
young Queen Elizabeth II.
Its shock-and-awe spend-
ingcombined with that of
Amazon and other new play-
ersis driving up costs indus-
trywide and creating a scarcity
of people and equipment.
You just cant compete
with someone coming in with
fresh money, low overhead and
a lot less baggage than you,
said Darrell Miller, an enter-
tainment lawyer at Fox Roth-
schild LLP. One veteran televi-
sion executive likened Netflixs
onslaught to Genghis Khans.
TV stars are demanding
movie star salaries of some
$250,000 per episode when
they previously were content
with half that, according to
studio executives. Competition
for A team camera crews,
sound engineers and postpro-
duction specialists is fierce.
Its a feeding frenzy to get
the best people, said Jeff
Greenberg, a prominent cast-
ing director.
TV networks and studios
helped fuel the rise of what is
now a competitor. When
streaming video led to a
plunge in DVD sales about a
decade ago, licensing shows to
Netflix was seen as a new way
to cash in and extend the fi-
nancial life of expensive pro-
gramming. With Netflix now
seen as a direct rival for origi-
nal programming, some media
companies are cutting back on
those licensing deals, includ-
ing Discovery Communica-
tions Inc. and Scripps Net-
works Interactive.
We of course have flare-
ups because we compete for
people, we compete for proj-
ects, said Netflix Chief Con-
tent Officer Ted Sarandos. But
we are in this together with
media companies, he said.
About 20 other 21st Cen-
tury Fox employees not under
contract have recently jumped
to Netflix, a person familiar
with the matter said. Netflix
also recently plucked away
Stacey Silverman, a senior ex-
ecutive at Comcast Corp.s NB-
CUniversal Television, as well
as executives from Sony Corp.
and Walt Disney Co., among
others. (21st Century Fox and
Wall Street Journal-owner
News Corp share common
ownership.)
Faced with spiraling costs,
TV chiefs are redoubling ef-
forts to discover new writers,
show creators and less-expen-
sive stars. Scripps created an
HGTV show called Home
Town starring a fix-it couple
found on Instagram, and it has
several in the works with You-
Tube stars. NBCUniversal said
it would make shows with
BuzzFeed based on popular
web video and news content.
Producers and agents are
beginning to talk about the
downsides for talent of being
on Netflix shows and mov-
iesfor example, by saying
they dont get the promotion
they deserve on Netflixs
crowded shelf of contentbut
many Hollywood stars still
relish the chance to be in a
Netflix original. Netflix tends
to offer more money up front
along with a more flexible
filming schedule due to fewer
episodes, and several of its
PANDA
Continued from Page One
pair for New York City, which
the sponsor, The Pandas Are
Coming To NYC, billed as an
important symbol of Sino-
American friendship.
Guests broke open red for-
tune cookies that predicted a
panda tastic life. In a pice de
panda rsistance, the sponsors
brought out Ed Cox, Richard
Nixons son-in-law, to laud the
late presidents role in Chinas
epic 1972 deployment of pandas
Ling-Ling and Hsing-Hsing to
the National Zoo. The nonprofit
group says it still needs to raise
tens of millions and to win a
contract from China to get
bears by its 2020 goal. A pair
of Giant pandas would be great
for New Yorks economy, says
Rep. Maloney.
The Netherlands Ouwehands
Zoo waited nearly two decades
for pandas, working Dutch and
Chinese government contacts,
says director Robin de Lange.
The Dutch had high hopes in
2012, upon the 40th anniver-
sary of the establishment of
Sino-Dutch diplomatic relations,
he says. We thought This is a
perfect moment, but nothing
happened, he says. Finally in
2015, the zoo signed a contract
in Beijings Great Hall of the
shows have won critical acco-
lades and industry buzz.
Some TV industry execu-
tives and Wall Street skeptics
question whether the company
can add enough subscribers,
especially in international
markets, to support its break-
neck spending pace and justify
a $60 billion market capital-
ization that values Netflix at
more than 300-times its 2016
earnings. Netflixs overall sub-
scriptions grew 25% in 2016
from the previous year to
nearly 94 million.
MoffettNathanson analyst
Michael Nathanson estimates
Netflix this year will have neg-
ative free cash flowa mea-
sure of profitabilityof about
$2 billion due to elevated
spending on original shows,
which require a higher upfront
outlay than library deals.
Netflix has financed the
spending by borrowing
money, increasing its debt
burden more than 17-fold
since 2012 from $195.8 million
to $3.4 billion.
Investors and Netflix execu-
tives are focused on sub-
scriber growth over any other
metric and have been encour-
aged by a surge in interna-
tional customers over the past
couple of quarters. Last quar-
ter, it added 5.12 million sub-
scribers abroad, beating ex-
pectations. Shares are up 44%
in the past year.
Netflixs desire for domina-
tion is on display in its push
into comedy. It has gone after
big name stand-up comics that
used to call HBO home, includ-
ing Mr. Rock, Louis C.K. and
Amy Schumer, with an aggres-
siveness not seen since CBSs
famed talent raids on NBC in
the late 1940s, when it wooed
away radio stars such as Jack
Benny and Edgar Bergen. Mr.
Rocks $40 million payday is
more than double what he was
getting at HBO, according to
people familiar with the terms.
Mr. Sarandos, the content
officer for Netflix, declined to
comment on Mr. Rocks deal.
Netflix is also attracting
big-name reality show cre-
ators like David Broome of the
hit NBC weight-loss show The
Biggest Loser. In an inter-
view, Mr. Broome said he
struck a deal with Netflix that
will give it first dibs on all his
future creations ahead of
other networks, and allow him
to sell merchandise world-
wide based on his Netflix
shows, with the streaming ser-
vice receiving a cut.
Mr. Broome said he made
the decision after an NBC
show he was working on last
yearStrongfailed to gain Scripps Chief Operating Offi-
traction because of what he
said was awkward scheduling,
including a clash with basket-
ball star Kobe Bryants final
NBA game. He said he realized
Netflix would unchain him
from being jammed into a
hole in traditional TV.
He has since created for
Netflix Ultimate Beastmas-
ter, an international competi-
tion series that launched in
February featuring an elabo-
rate obstacle course. The high
budget he was given allowed
him to make the genre, which
many consider to be lowbrow,
feel like a piece of film, Mr.
Broome said. He did a shoot
with more than 50 ultrahigh
definition cameras, which he
said never in the history of
Giant Panda cubs Fu Feng and Fu Ban hide from their mother, Yang Yang, at a Zoo in Vienna.
People in the presence of Presi-
dent Xi Jinping and King Wil-
lem-Alexander. The pandas are
set to arrive next month.
Panda diplomacy dates to
the Tang dynasty, when Em-
press Wu Zetian (624-705 A.D.)
gave pandas to the Japanese
emperor, and it later became a
Cold War-era strategy. Beijing
gave a panda to the Soviet
Union in 1957 and another in
IN DEPTH
Netflix staff readied the second-season launch of its superhero series Daredevil. It is also moving into comedy specials and unscripted shows.
our industry has been done.
Some shows with high ex-
pectations havent fared well
on Netflix. Chelsea Handlers
late-night-style talk show isnt
generating buzz, and the Q
Scores Company, a research
firm that measures appeal and
popularity, said her scores
have fallen since she made the
move from TV to streaming.
The shows original three epi-
sodes per week have been cut
to one.
Mr. Sarandos said Ms. Han-
dler is a very funny and pro-
vocative host but the show is
a work in progress and still
getting there.
A spokesperson for Ms.
Handler didnt respond to re-
quests for comment.
Netflix must keep things
cordial with Hollywoods tra-
ditional studios to make deals
for reruns and movies, and
prevent them from turning to
its main competitors, Amazon
and Hulu. The vast majority
of viewing on Netflix is still of
the licensed material, its ex-
ecutives say. Measurement
firm Luth estimates more
than 70% of Netflix viewing is
for that content.
Food Network-owner
Scripps grew wary when Net-
flix began making original
cooking and lifestyle program-
ming, with another 20 un-
scripted TV shows under de-
velopment. Late last year,
Scripps decided not to renew a
rerun-licensing deal with Net-
flix, which was turning into a
direct competitor. That was
sort of untenable, said
ods of time, potentially cur-
cer Burton Jablin.
Mr. Sarandos said recycled
content from companies such
as Scripps has come and gone
from Netflixs service, but
viewing hours havent dropped
as a result.
Netflix set off tensions in
the film world when it offered
$120 million to $130 million
for world-wide rights for The
Irishman, director Martin
Scorseses coming movie about
the death of Jimmy Hoffa,
which will star Robert De Niro,
Al Pacino and Joe Pesci. Via-
com Inc.s Paramount Pictures
previously had a deal to dis-
tribute the movie domestically
for $15 million and indepen-
dent company STX Entertain-
ment had bought the foreign
1959. It gave Washington pan-
das after President Nixons trip
to China ended decades of es-
trangement.
Giant pandas live in the wild
only in China. The panda rep-
resents a fascinating soft-power
resource, wrote University of
Oxford researchers in a 2013
study. Its presence in non-Chi-
nese zoos involves others in the
appreciation and care of a Chi-
THE WALL STREET JOURNAL.
rights for $50 million, said its high price tag north of $7
people with knowledge of the million an episode, people fa-
arrangements. miliar with the situation said.
As the movies budget bal- Sony cant shop the show to
looned due to costly visual ef- other buyers for at least a de-
fects, the movies backers cade, since Netflix has the
turned to Netflix, which would global rights.
stream it online and release it People close to Netflix said
simultaneously in a handful of it paid for those potential fu-
theaters. While Paramount ture profits up front, arguing
was willing to let the film go, Sony didnt lose money. Sony
STX insisted it still had for- hasnt approached Netflix to
eign rights and Netflixs bid buy those rights back, the peo-
was invalid, leaving tempers ple said.
high and the issue unresolved, A Sony spokeswoman de-
the people said. clined to comment.
Were highly interested in As Netflixs shelf of original
Martin Scorsese making the shows has become crowded, it
film for Netflix, Mr. Saran- has cut back on individual
dos said. shows marketing budgets,
In other cases, Netflix has some producers and agents
earned praise for investing in complain. That consideration
film categories that major is becoming top of the list in
studios have largely aban- the negative column against
donedsuch as mid- and low- Netflix, a top talent agent
budget specialty movies and said. They are not promoting
star vehicles, such as Will the vast majority of the shows
Smiths coming Bright, in- they make. Its starting to be
stead of franchise movies and felt by everybody.
blockbuster sequels. Mr. Sarandos said the com-
panys approach of using its
data to market shows in the
app to people who are most
Skeptics question likely to watch is more cost-ef-
whether it can add fective than big TV or bill-
board ad campaigns.
enough subscribers to He added a lot of Netflix
support its spending. originals arent meant to be
everyones favorite show. Do-
ing Coca-Cola level of market-
ing for Master of None
In television, star produc- doesnt make a lot of sense,
ers and actors can make huge Mr. Sarandos said, referring to
sums of money for years a comedy starring Aziz Ansari,
when reruns get sold, but targeted at younger urban au-
Netflix demands world-wide diences.
rights to shows for long peri- Culture is not getting
made because of Netflix, said
tailing income. Propagate Contents co-CEO
When you make a deal Ben Silverman, who helped
with Netflix, youre making a create several hit network
deal with the devil financially shows like Jane the Virgin
because, basically, they are and a now-canceled, big-bud-
buying out all rights, said Lee get Netflix drama Marco
Dinstman, a partner at the Polo. Because you are only
APA talent agency who repre- reaching Netflixs subscribers,
sents several show creators. youre missing so many peo-
He recently chose a Hulu offer ple, said Mr. Silverman.
over one Netflix made to his Two of televisions hit
client due to potentially bigger shows, NBCs This is Us and to cancel your show, said
international sales. He said ev- AMCs The Walking Dead, Gilmore Girls creator Amy
ery shows prospects are dif- average 15.2 million viewers
ferent and that Netflix at and 16.4 million viewers, re-
times may offer the best route. spectively, according to Niel-
Sony Television executives sen. Netflix doesnt release
felt slighted by the way Netflix viewership numbers, so cre-
abruptly canceled the dark ators have only a limited idea
drama Bloodline after decid- of how their shows perform.
ing that it wasnt achieving Mr. Sarandos disputes the
the global viewership to justify idea that Netflix shows arent
lion a year to help with conser-
vation, state-media reports say,
and bears born abroad are gen-
erally shipped back to the moth-
erland by age 4 for breeding.
The Smithsonian National
Zoo recently gave up its Wash-
ington-born 3-year-old Bao
Bao. A Chinese embassy offi-
cial escorted her to a private
jet after an extensive series of
farewell parties. We have this
ambassador, the panda ambas-
sador, which really comes in
very handy, says the em-
bassys Ms. Liu. When theres
a very cute and friendly and
lovely ambassador such as the
panda, it is definitely easier
for us to promote the friend-
SCHOENBRUNN ZOO/REUTERS
ship and cooperation between
the two countries.
Some in Omaha, Neb., sus-
pected other motives. The citys
zoo spent nearly nine years
fundraising for a chance at a
pair after a Chinese diplomat
dangled the prospect, says
Omaha Zoo Foundation Chair-
nese national treasure. man Lee Simmons.
In the 1980s, China stopped As a practical businessman,
giving pandas, lending them in- these numbers will scare the
stead, according to zoos and hell out of you, says Mr. Sim-
Chinese state media. Pandas are mons, who says he cut the
posted in strategically impor- quest short in 2007 after the
tant countries across North Chinese embassy called re-
America, Europe, Asia and Aus- questing help scuttling a trade
tralia. In exchange, zoos work deal between Nebraska and Tai-
with Chinese scientists on wan. They never had any in-
panda research and typically tention of ever sending pandas
pay China $500,000 to $1 mil- to Omaha, he says. I think
GLENN CHAPMAN/AGENCE FRANCE-PRESSE/GETTY IMAGES
entering the cultural conver-
sation, pointing to critically
acclaimed series like
Stranger Things and Mak-
ing a Murderer.
NBCUniversal is touting to
Hollywood its ability to pro-
mote a show across its entire
suite of cable networks, in-
cluding USA, Oxygen, Syfy, E!
and Bravo, as well as other
businesses like theme parks.
Alternatively, Scripps and
Discovery executives are sell-
ing producers and talent on
the fact that their companies
channels only showcase a few
themeslike home, food and
travel for Scrippsso cre-
ators are guaranteed a built-
in fan base.
Some TV executives are try-
ing to turn one of Netflixs
supposed selling pointsre-
leasing entire seasons of
shows at once for users to
bingeinto an argument
against the company.
I think a lot of people
have now come around to say
its nice when your show is
out there 10 or 13 or, in the
case of The Walking Dead, 16
weeks. That is cultural cur-
rency, said Joel Stillerman,
AMCs president of program-
ming. Advocates say the wa-
ter-cooler effectfriends
chatting about and spreading
excitement for a showcan
help build its momentum.
Netflix has said its con-
sumption research shows
subscribers want to watch
shows at their own pace
rather than be tied to a net-
works schedule.
Many show creators say
Netflix executives generally
dont pass down heavy-
handed notes to dictate a
shows direction like tradi-
tional TV outlets do.
If you disagree with a note
from Netflix or Amazon, you
can have a creative discussion
about it. Its not viewed as,
You didnt take my notes?
Youre an enemy and Im going
Sherman-Palladino.
After a wonderful experi-
ence creating the last season
of Gilmore Girls for Netflix,
Ms. Sherman-Palladino said:
My network days are proba-
bly done.
Ben Fritz contributed
to this article.
they just played us. Mr. Sim-
mons account of Omahas
panda pursuit was reported by
the Omaha World-Herald in Oc-
tober. I have never heard any-
thing about it, the Chinese em-
bassys Ms. Liu says.
In 2008, when pro-China
leader Ma Ying-jeou assumed
the Taiwan presidency, China
sent two bears. Their names,
Tuan Tuan and Yuan Yuan,
combined mean reunion, a
reference to Beijings goal of
reunification.
New Zealand had its own
pandamonium after Defense
Minister Gerry Brownlee at-
tempted what media there
branded a black ops panda
mission. While meeting with
the Peoples Liberation Army in
2015, the media reported, he
visited a panda-breeding center
and delivered a letter from Wel-
lingtons then-mayor Celia
Wade-Brown in which she
sought to procure a pair. Some
lawmakers publicly accused Mr.
Brownlee of misplaced priori-
ties. In a press release, one la-
beled him a panda pimp. The
three New Zealand officials de-
clined to comment. New Zea-
land remains panda-less.
Some panda fans worry Pres-
ident Donald Trumps anti-
China trade rhetoric could spoil
the program, but Ms. Liu says
the program will continue. This
is only one chapter, she says.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
GOP May Face Another Fight on Tax Overhaul
B
ruised and beaten by
an intraparty fight
over health care, Re-
publicans are heading for
what they see as safer politi-
cal ground: a major tax bill.
But they might be heading
right into another minefield.
In theory, rewriting the
tax code could be easier than
revamping the whole health-
care industry.
THE Republicans
OUTLOOK pride them-
RICHARD selves on ideo-
RUBIN logical unity in
favor of lower
tax rates. And
the stakes appear lower for
Americanspaperwork and
money are far different than
matters of life and death.
Tax reform is less vis-
ceral, said Rep. David Sch-
weikert (R., Ariz.). I can pull
up a calculator and say its
this or thisits hard legis-
lating to anecdotes and sto-
ries.
Treasury Secretary Steven
Mnuchin said Friday that a
tax bill would be a lot sim-
pler than a health-care
overhaul. There is very, very
strong support.
But scratch deeper, and
the GOP quest for a full over-
haul of the tax code is
fraught with squabbles, pro-
cedural hurdles and difficult
trade-offs. The partys failure
on health careafter having
seven years to prepare
shows how hard it is for Re-
publicans to write complex
legislation that attracts sup-
TRUMP
Continued from Page One
him, Senate Minority Leader
Chuck Schumer (D., N.Y.) said
on ABCs This Week.
The Trump administration
on Sunday provided a re-
minder for Democrats about
why they have opposed his
presidency. Environmental
Protection Agency Administra-
tor Scott Pruitt told ABCs
This Week that on Tuesday,
Mr. Trump is expected to sign
an executive order to undo
President Barack Obamas plan
to curb global warming.
If anything, Democrats are
feeling greater pressure from
their activist base, which has
tasted victory on health care
and is even more convinced
now in the wisdom of an out-
right resistance strategy, said
Brian Fallon, a longtime Dem-
ocratic aide who is now the
senior adviser to Priorities
USA, a Democratic super PAC.
Mr. Trump will have two
opportunities in coming
months to shift his legislative
strategy.
The first comes over a
spending bill that will need to
be passed once a current mea-
sure that runs through April
28 expires. Congress and the
White House will have to sort
through divides over whether
to increase military spending
at the expense of domestic
programs, a perennial fight.
The White House and Re-
publicans have also made an
overhaul of the tax code their
Slow Housing Recovery Took Economic Toll
BY LAURA KUSISTO
The decline in homeowner-
ship rates to near 50-year lows
is partly to blame for the U.S.
economys sluggish recovery
from the last recession, new
data suggest.
If the home-building indus-
try had returned to the long-
term average level of construc-
tion, it would have added more
than $300 billion to the econ-
omy last year, or a 1.8% boost
to gross domestic product, ac-
cording to a study expected to
be released Monday by the
Rosen Consulting Group, a
real-estate consultant.
In 2016, total spending on
housing declined to 15.6% of
GDP, a broad measure of goods
and services produced across
the U.S., compared with a 60-
year average of nearly 19%.
The share of spending specifi-
cally linked to new-home con-
struction and remodeling like-
wise declined to 3.6% of GDP,
just over half its prerecession
peak in 2005.
If lenders were to ease
credit standards back to their
early 2000s levels, that could
jump-start home purchases
port from their moderate and
conservative wings.
Its just a reminder of
how incredibly hard transfor-
mational legislation is, said
John Gimigliano, a former
GOP congressional tax aide
now at KPMG LLP.
T
o succeed, Republicans
need to bridge at least
three big gaps.
First, they must balance
competing desires to cut tax
rates sharply and to slow the
rise of national debt. Repub-
lican leaders in Congress say
they want a revenue-neutral
planone that brings in
about as much money as to-
days tax system. Faster eco-
nomic growth might help,
but it doesnt fully bridge the
divide. To accomplish reve-
nue neutrality while sharply
lowering rates, they will at-
tempt to whack popular tax
breaks, such as business de-
ductions of interest on debt
and individual state and local
tax deductions. They will
meet resistance from groups
that want to protect those
breaks.
Second, they have to rec-
oncile alternate visions of
what they are setting out to
accomplish and who will ben-
efit. Mr. Trump has said his
priority is middle-class tax
cuts for individuals. Not the
top 1%, said Mr. Mnuchin.
House Speaker Paul Ryan (R.,
Wis.) and Ways and Means
Chairman Kevin Brady (R.,
Texas) want an overhaul pri-
U.S. President Donald Trump, with, with his health secretary, Tom Price, at the U.S. Capitol last week.
next big legislative priority, a
matter that is particularly
fraught.
If Mr. Trump produces a
middle-class tax cut, there
could be Democratic support.
But his campaign plans fea-
tured significant rate cuts for
high-income households, in-
cluding a repeal of the estate
tax. Tax policies along those
lines wouldnt find much favor
among Democrats.
I dont think theyre
headed in the right direction,
and construction activity, said
Ken Rosen, chairman of Rosen
Consulting and chairman of
the Fisher Center for Real Es-
tate and Urban Economics at
the University of California,
Berkeley.
If you want to get the
economy going, housing is typ-
ically the flywheel, he said.
Of course, lax lending stan-
dards was a primary culprit of
the 2008 financial crisis, and
Mr. Rosen isnt suggesting a
return to that easy-money era.
Still, housing-industry execu-
tives say the pendulum has
swung too far in the other di-
rection, to the detriment of
middle-class families and eco-
nomic growth.
Housing serves as an eco-
nomic engine through home
construction as well as ancil-
lary activities such as appli-
ance purchases, spending on
home renovations and jobs for
real-estate agents. Each new
single-family housing unit built
typically creates three jobs, ac-
cording to the National Associ-
ation of Home Builders.
The homeownership rate
stood at 63.7% in the fourth
quarter of 2016, according to
U.S. NEWS
Tax Troubles
U.S. corporate tax rates are among the highest in the world, but reducing them won't be easy.
Top statutory corporate tax rate, 2012
U.S.
Japan
Argentina
South Africa
France
Brazil
India
Italy
Germany
Australia
0% 10%
Source: Congressional Budget Ofce
marily focused on promoting
economic growth, even if
that means tax cuts that fa-
vor the very top of the in-
come scale. The plans they
all campaigned on are tilted
to the top, according to inde-
pendent analyses.
Third, the party is at odds
over the Ryan-Brady plan for
border adjustmenttaxing
imports and exempting ex-
ports. The Trump adminis-
tration has been ambivalent
and sometimes critical of the
idea. Senate Republicans are
outright cold to it. Messrs.
Ryan and Brady say its cru-
cial because it provides
about $1 trillion to offset
corporate-tax-rate cuts and it
discourages companies from
Mr. Schumer said. Theyre
going to repeat the same mis-
take they made on Trumpcare
with tax reform.
Mr. Trump has also flashed
signs of ambivalence about
working with Democrats. On
Saturday, he said that unified
Democratic opposition was the
reason the health bill was
pulled, and he has also called
Mr. Schumer the Democrats
head clown.
But the president and Mr.
Schumer do have a relation-
Tighter credit, both for builders and buyers, has slowed home
construction, which has had an impact on the U.S. recovery.
the U.S. Census Bureau. That
was down from a high of 69.2%
during the housing boom and
below the 65% economists say
is a normal level.
Strict mortgage lending
standards, younger households
putting off marriage and chil-
dren and a lack of inventory of
homes for sale are combining
to depress homeownership.
It is unlikely that easing
credit alone would be enough
to bring the share of house-
Effective corporate tax rate, 2012
39.1%
Indonesia
France
20% 30% 40%
shifting profits abroad.
None of those divisions in-
side the GOP have been re-
solved yet, and dozens more
are lurking, including de-
bates over tax breaks for re-
newable energy, credits that
aid low-income households,
and the treatment of carried
interest income for private-
equity managers.
The notion that tax is
easier than health is not
borne out by the facts, said
a Senate GOP aide. Having
discussed health care for
seven years, Republicans
were 75% in agreement on
the policy. On tax, none of
the foundational questions
have been answered.
The big-picture tax de-
ship, and Mr. Trump has met
with Senate Democrats such as
Sens. Joe Manchin (D., W.Va.)
and Heidi Heitkamp (D., N.D.).
Mr. Trump has also repeatedly
talked about working with
House Democrats who are
pushing a plan to allow the
government to negotiate for
lower drug prices and a large
infrastructure project to re-
build the nations roads and
bridges is also a measure that
could bring both sides to the
table.
holds who own back up to his-
toric norms. Even in hot mar-
kets where demand is strong
despite tight credit standards,
builders cant construct
enough homes to meet demand
because of labor shortages and
regulatory barriers, said Rob-
ert Dietz, chief economist at
the National Association of
Home Builders.
You would get more activ-
ity, but there are limits on how
fast you can grow in any given
Monday, March 27, 2017 | A7
Argentina
Japan
U.K.
U.S. 18.6%
Brazil
Germany
India
Mexico
0% 10% 20%
THE WALL STREET JOURNAL.
batehigher taxes vs.
lowerbreaks down along
party lines, but little issues
can quickly turn parochial.
For example, Republicans
from high-tax states such as
New York and New Jersey
may be less willing to kill the
state and local tax deduction
than their counterparts from
Texas and Florida, which lack
income taxes.
A million details come
out of the woodwork that
you never thought of, Mr.
Gimigliano said.
Procedural challenges also
loom. Democrats are unlikely
to go along with deep tax
cuts, so Republicans are
likely to use rules that allow
a party-line vote in the Sen-
The opening of the door to
potential collaboration be-
tween Mr. Trump and Demo-
crats took place against a
backdrop of Republican in-
fighting over whom to blame
for the collapse of the health
bill and where to go next.
While hard-line conserva-
tives said that legislation
didnt go far enough to dis-
mantle the Affordable Care
Act, middle-of-the-road Re-
publicans said that the White
House had them driven away
by making too many conces-
sions to conservatives. The
MANDEL NGAN/AGENCE FRANCE-PRESSE/GETTY IMAGES
main concession offered last
week was to strike a require-
ment that insurance provide a
minimum level of coverage for
health services like maternity
and mental-health care.
A lot of the concessions
that the White House was
making at the end of this pro-
cess were to try to appease
and placate the hard right,
Rep. Charlie Dent (R., Pa.) said
on Meet the Press.
Conservatives are defend-
ing their role in bringing down
the House GOP health plan last
week. Rep. Jim Jordan (R.,
Ohio), a former chairman of
the House Freedom Caucus,
said on Fox News Sun-
day that his group of 30 to
40 lawmakers had done the
right thing because the House
GOP plan fell short of party
ideals.
Instead of doing the blame
game, lets get to work, Mr.
Jordan said.
Mr. Ryan also ended up in
the middle of the burgeoning
controversy over who was to
year, Mr. Dietz said.
Ed Brady, president of
Bloomington, Ill.-based Brady
Homes, said his company built
150 homes in 2006. Last year,
it built 15.
Mr. Brady said part of the
PHELAN M. EBENHACK/ASSOCIATED PRESS
reason activity has fallen off is
that he doesnt build in as
many markets as he used to.
Tight creditboth for builders
and buyersis another factor.
Im not suggesting that we
go back to the maverick days,
but I do think that there are a
lot of people that could afford
to repay their loans but are not
buying because theyre afraid
to go in for the inquisition of
trying to get a loan, he said.
Tighter mortgage lending
has led to sharp declines in de-
fault rates and helped produce
a market in which price
growth is linked to economic
prosperity.
But some experts argue de-
fault rates are too low. Under
typical conditions, similar to
those in the early 2000s, about
12% of mortgages are at risk of
default. In the third quarter of
2016, just 5.1% of mortgages
were at risk of defaulta level
that indicates that lenders
ate. That means they cant
increase deficits outside of
the budget window, typically
10 years.
That constraint is why the
2001 and 2003 tax cuts un-
der President George W.
Bush were set to expire at
the end of 2010. Eventually,
many of the tax cuts were
extended permanently, but
not all of them. Democrats
restored the estate tax and
raised the Bush-era rates on
high-income households.
A
repeat of temporary
cuts is possible, but
potentially counterpro-
ductive, particularly if Re-
publicans want to achieve a
corporate-tax overhaul. Busi-
ness owners want permanent
policy so they can plan for
the long-run. Without perma-
nence, an overhaul might
damp the boost to spending
and investment that Republi-
cans want.
Mr. Mnuchin said the ad-
ministration would soon re-
lease its plan. Mr. Brady is
aiming to push a bill out of
his panel before summer.
So far, said Rep. Kenny
Marchant (R., Texas), Ways
and Means members have
been reviewing concepts. He
said he doesnt expect text of
a tax bill for weeks and said
he learned from the health-
care bills collapse about the
dangers of an accelerated
legislative process.
Deadlines, he said, are
not helpful.
blame. On Saturday, Mr.
Trump told his followers to
watch @JudgeJeanine on
@FoxNews tonight at 9:00
P.M. In that show, host Jean-
ine Pirro started her segment
by saying that Paul Ryan
needs to step down as Speaker
of the House because he
didnt deliver the votes to pass
the health legislation and had
sold Mr. Trump a bill of
goods.
White House officials said
that Mr. Trump harbored no
bad feelings toward Mr. Ryan
and had promoted the show
simply to help out the host.
Ive never seen the presi-
dent, for a second, try to
blame Paul Ryan for this, Of-
fice of Management and Bud-
get Director Director Mick
Mulvaney said on Meet the
Press.
AshLee Strong, a spokes-
woman for Mr. Ryan, said that
he and the president had spo-
ken on Sunday. The president
was clear his tweet had noth-
ing to do with the speaker,
she said. They are both eager
to get back to work on the
agenda.
As for working with Repub-
licans, Mr. Priebus said that
well give these guys another
chance. But he said that his
calls to consider working with
Democrats amounted to more
or less a warning shot that
were willing to talk to any-
onewe always have been,
and I think more so now than
ever.
Richard Rubin, Brent
Kendall and Janet Hook
contributed to this article.
Smaller Contribution
Share of GDP stemming from
home construction and
improvement*
8%
7 Historical average
1959-2016
6
5
4
3
2
1
0 Recession
1960 70 80 90 2000 10
*Ination adjusted
Source: Commerce Department
THE WALL STREET JOURNAL.
arent making loans to thou-
sands of people who pose little
risk, according to the Urban
Institute, a nonprofit think
tank.
Mr. Rosen said many mid-
dle-class families have missed
out on the appreciation that
has occurred over the past five
years because they havent
been eligible for mortgages.
Were being paternalistic in
our regulatory environment
and its forcing lower middle-
class peopleto rent, he said.
 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A8 | Monday, March 27, 2017 THE WALL STREET JOURNAL.

LIFE&ARTS
TELEVISION REVIEW

Dorothy Rabinowitz

In the Wake of
Homegrown
Terror
SHOWTIME

Carlos Bledsoe

THIS DOCUMENTARY on American cable

network Showtime about Americans who be-
came, in that loose phrase, homegrown ter-
rorists shines a rare penetrating light on
parents and siblings whose loved ones went
happily off to become soldiers of Islam. In

SONY PICTURES (2)

doing so it evokes the reality of these shat-
tered livesthe mix of anguish and fury of
parents whose children had become strangers
to them, pledged to kill in the name of Allah.
The family of Carlos Bledsoea Tennes-
see-born convert to Islam who was sen-
tenced to 11 consecutive life terms for a
drive-by shooting in Little Rock, Ark. in
2009 that killed one American serviceman
and wounded anotherrecalls the changes
in him. He was an outgoing boy who had
loved animals, especially his dog, but after
his conversion to Islam he abandoned the
dogleft it in the woods.
That Golden Retriever was his heart, his
sister tells us. But her brother argued that a
Muslim must not keep a dog in the home.
Carloss father, Melvin Bledsoe, says My
son was trained, processed, and programmed
to kill in Yemen, a foreign country.
After his arrest, Carlos publicly pro-
claimed that he had committed a just act,
due punishment for crimes against Muslims.
He was practically telling the world, his sis-
ter says in tones of bitter wonderment, that
if you let him go hed go out and do it again.
During his travels in Yemen her brother
carried inspirational literature from Anwar
al-Awlakiborn in America to parents from
Yemenwhose career as a singularly suc-
cessful terrorist recruiter is amply covered
here. These stories of Americans who joined
up testify to his powers to persuade his au-
diences to take up arms against the enemies
of Islam. Prime among his injunctions to
them: Trust no nonbeliever. Among his de-
voted correspondents was Maj. Nidal Hasan,
who murdered 13 unarmed American ser-
vicemen and women at Fort Hood, Texas in
2009. AlAwlaki was killed by a US drone
strike in 2011.
American Jihad isnt without its flaws,
chief among them its lurch, toward the end,
into sermonizing about the American poli-
cies, deeds and attitudes that have contrib-
uted to the growth of enlistees in the cause
of terrorismopinions, however sliced, that
come perilously close to rationalizations for
the murderous carnage visited on Americans
in terrorist attacks.
One commentator delicately explains the
Fort Hood religious zealot, Maj. Hasanwho
carried a card with the words Soldier of Is-
lam on it and shouted Allahu Akbar while
mowing down his victimsas a man trou-
bled by conflicts about his Muslim-American
identity.
It is, nonetheless, a film rich in enter-
prise, compelling in its portraiture.
Lifeand Dearth
Martian soil samples contain a lifeform that portends bad news for a space stations crew
FOR ALL ITS FLASHY trappings, weighty
ruminations and zero-gravity floatings
aboard the International Space Station,
Life turns out to be another variant of
Alien, though without the grungy horror
and grim fun. In space no one can hear you
snore.
Nor can anyone hear micro-meteorites
banging against a planetary probe, but they
bang loudly in a preface that bodes ill for
plausibility. The probe, damaged but still
intact, has just reached the space station
from Mars, where it scooped up soil sam-
ples that may or may not contain signs of
life. Then bingo, a single-cell organism
Jake Gyllenhaal as David Jordan, top, and Rebecca Ferguson as Miranda North, above
FILM REVIEW | Joe Morgenstern
starts wiggling its cilia beneath the micro-
scope of a British scientist, Hugh Derry
(Ariyon Bakare), who declares jubilantly:
Were looking at the first incontrovertible such an ominous growth spurt might not
proof of life beyond Earth.
Wow. But hold onthis epochal discov-
ery is being entrusted to one man, toiling
in a tiny laboratory in orbit, rather than to
a team of pre-eminent scientists on Earth?
Its one of many notions that make sense
only within the movies narrow plot and
claustrophobic setting. Another is Hughs
enchantment with the little critter, which
he names Calvin; he tickles and pokes it
recklessly while Calvin grows from one cell
to a much bigger critter with a startling
gift for mobility. Hasnt he seen Alien?
Cant he guess that a creature capable of
remain his new best friend?
Taken on its own terms, as a kinetic
thriller, Life is lively enough for a while.
The director, Daniel Espinosa (Safe
House), knows how to move things
alongmostly through the stations very
long passageways, though also outside dur-
ing spacewalks when emergencies require
them. The reliably excellent Seamus Mc-
Garvey photographed Nigel Phelpss physi-
cally impressive production, with its myr-
iad screens dispensing cascades of data.
The six-person crew includes Ryan Reyn-
oldss Rory Adams, a cocky mission special-
ist; the stations pilot, David Jordan (an
oddly bleak Jake Gyllenhaal); and a micro-
biologist, Miranda North. Shes played by
Rebecca Ferguson, a lovely and skillful ac-
tress who brings, dare I say it, some
needed gravity to the proceedings.
Its needed because the expansive poten-
tial of the title dwindles down to one more
monster, a sort of oversize octopus on a
rampage. The screenplay was written by
Rhett Reese and Paul Wernick, who did the
hugely successful Deadpool and the de-
lightful genre comedy Zombieland. They
do what they can here, but it isnt enough;
clever chatter and perfunctory character-
izations (Hugh is a paraplegic, David is
alienated from earthly concerns) cant com-
pensate for a repetitive narrative in which
Calvins predations take him outside the
station, then back in, then outside again,
and always to the accompaniment of re-
lentless orchestral blasts. Who knew there
were so many trombones in space?

MICHAEL OCHS ARCHIVES/GETTY IMAGES

PLAYLIST: CANDI STATON

A Ruth Brown Hit Channeled a

Singers Feelings About Her Father
Candi Staton, 77, a
soul and gospel
singer, had 24 Bill-
board R&B hits and
is the author of
Young Hearts Run
Free (Heritage Pub-
lishing). She spoke
with Marc Myers.
Many people know
my hits Young
Hearts Run Free and
Victim. What they
dont know is that
David Crawford wrote them after
I told him about my many abu-
sive relationships. The problem
began early, and Ruth Browns
(MAMA) HE TREATS YOUR
DAUGHTER MEAN helped me
get through childhood.
I grew up in Colony, Ala.,
about 13 miles southwest of
Hanceville, where I was born.
Colony was an African-American
community settled after the Civil
War by former slaves that picked up three stations, in-
who were dropped off cluding one that played blues. I
there and given land first heard Ruth Browns (Mama)
and a mule. He Treats Your Daughter Mean
At home in the on that radio in 1953.
early 1950s, we didnt The song opens with just a
have TV, and we tambourine beat, followed by
barely had radio. horns and a rhythm guitar play-
What we had were ing a medium-tempo blues riff.
two churchesone Then Ruth Brown sings. The lyric
Baptist and the other that stood out for me was,
Methodist. It was re- Mama, my heart is aching / I be-
ally one church, since lieve its breaking / Mama, Ive
everyone belonged to stood all that I can stand / Whats
both. Thats where we the matter with this man? Thats
heard our music and sang. how I felt about my father.
My father didnt take very Sadly, many of my relation-
good care of us, and he abused ships with men rolling forward
my mother terribly. He had no ed- were tough as well. After my
ucation, and his only joy was get- fourth divorce in 2012, I gave up
ting with his friends and drinking hope of marrying again. I just
the liquor they made. If my stopped looking. Then at church, I Ruth Brown
mother complained about money, met Henry, an insurance agent in a photo,
my father beat her. As a child, I and a former member of the U.S. probably from
felt helpless. My sister and I regu- Secret Service. Hes kind, and we the late 50s.
larly hid the hammers and knives. married last year. It took a life-
We had an old battery radio time, but Im finally happy.
 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
WEEKEND CONFIDENTIAL
Alexandra Wolfe
Marisa
Tomei
GREGG DELMAN FOR THE WALL STREET JOURNAL
MARISA TOMEI wants to take a nap. I need
a rest, the actress saysor at least 20 min-
utes to herself at home before her evening
performance of the new play How to Tran-
scend a Happy Marriage at New Yorks Lin-
coln Center. For the past few weeks, the Os-
car-winning actress has been in all-afternoon
rehearsals followed by evening preview
shows. So instead of holding our interview at
Lincoln Center, the two of us pile into an
SUV outside the theater and talk as we are
driven to her apartment downtown.
Her part as the star and narrator of the
play, which opened on March 20, is a physi-
cal and emotional feat, she finds. Just stand-
FRANOIS OZONS Frantz is a
very modern period pieceand a
beautiful onewith a fascinating
lineage. The period is post-World
War I1919, to be exact, immedi-
ately after the war to end all
wars. In a quiet German town, a
young woman, Anna (Paula Beer),
discovers that a mysterious
Frenchman has laid flowers on
the grave of her fiancthe
empty grave, since the body of
her beloved Frantz vanished in
the chaos and carnage of trench
warfare.
This was the starting point of
Broken Lullaby, a 1932 film by
Ernst Lubitsch, who, in turn, had
borrowed the premise from a play
by Maurice Rostand. Lubitsch had
no peer as a director of sophisti-
cated comedies, but Broken Lul-
laby was a serious melodrama
with a pacifist message, and a
box-office disaster.
In Frantz, which Mr. Ozon de-
scribes as having been inspired by
the Lubitsch film, pacifist senti-
ments are voiced ardently by the
Frenchman, Adrien (Pierre Niney),
who recounts his friendship with
Frantz before the war, when they
were both young students in
Paris. But those sentiments are no
longer meant to touch our hearts;
we know all too well how postwar
pacifism fared in the Nazi whirl-
wind. Instead, Mr. Ozon gives us
the possibility of romance (be-
tween Anna and Adrien, of
course) along with a coming-of-
age story as Anna emerges from
her grief, and all of it seen
through a contemporary prism, or
LIFE & ARTS
ing onstage for two hours and speaking much
of the time takes endurance, and she has to
get in the right frame of mind before each
show. Afterward, she says, she has expended
so much energy that she could eat anything
in sight. I could probably eat your arm off if
you were nearby, she laughs. Its like an
athletic act.
The plays plot revolves around two tradi-
tional couples who meet a 20-something girl
and her two boyfriends and invite the three-
some to spend New Years Eve with them.
What starts out as a dinner party turns into
a trippy orgy fueled by hash brownies. The
characters end up groping each other and
FILM REVIEW | Joe Morgenstern
WAR-TORN TRUTH
Pierre Niney and
Paula Beer
more properly a beam-splitter. films as Under the Sand and
Whose stories are true, whose are Swimming Pool. (He wrote this
lies? And, just as provocatively, screenplay with Philippe Piazzo.)
do the lies hurt or heal? But he also has a quietly spell-
For a film that moves at a de- binding star in Ms. Beer, who was
liberate pace, Frantz grows re- only 20 when production began.
markably involving; Mr. Ozon is a Her performance is pure, entirely
formidable storyteller, as he has of the periodno small accom-
previously demonstrated in such plishment for a young contempo-
simulating a mass sex scene on stage. The
woman who plays Ms. Tomeis best friend
gets completely nude. Both couples end up
questioning their own relationships and the
social norms that shape their lives.
Bundled up in a coat, baggy pants and a
sweater, Ms. Tomei, 52, still speaks in the en-
ergetic cadence she became known for in her
breakout role in the comedy My Cousin
Vinny (1992), which won her an Oscar for
best supporting actress. After that early suc-
cess, she starred in a string of smaller films,
such as Only You (1994) and Happy Acci-
dents (2000). Her film career has enjoyed a
recent resurgence after she won strong re-
rary actressand full of life,
whether Anna is trapped in de-
spair or seized by fresh hope. Mr.
Nineys portrayal provides an in-
triguing counterpoint: Adrien is
soulful, mercurial, even oddly
funnyhis sudden suggestion that
they go swimming in the nude
comes out of some surprising no-
Monday, March 27, 2017 | A9
The movie and theater actress keeps on
pushing boundaries
views for playing an aging stripper in The
Wrestler (2008), co-starring Mickey Rourke.
She has also won acclaim for her theatrical
turns in such Broadway productions as Sa-
lome (2003) and Top Girls (2008).
Her current stage role intrigued her be-
cause of the characters readiness to trans-
gress boundaries. I havent experienced
[polyamory] myself, so I dont know, but it
sounds like a great idea to me, she says. Ms.
Tomei, who has never been married, likes the
plays unconventional approach to relation-
ships. There are so many paths, all to the
same ultimate goal, which is more love, she
says.
Ms. Tomei was raised in an Italian-Ameri-
can family in Brooklyn. Her father was a law-
yer, and her mother was an English professor.
They loved the theater and used to take her
to Broadway shows, such as Night, Mother
with Kathy Bates and the original Chorus
Line. After high school, she attended Boston
University but left after a year to pursue act-
ing.
In the 1980s, she won television roles in
shows such as As the World Turns and A
Different World. She made her film debut
with a small part in The Flamingo Kid
(1984). In My Cousin Vinny, she stole the
show as Mona Lisa Vito, the brash fiance of
Vinny (played by Joe Pesci).
Ms. Tomei is outspoken about the disparity
in her profession between the roles and pay
offered to men and women. The Center for
the Study of Women in Television & Film at
San Diego State University found that women
played 29% of protagonists and 37% of sup-
porting major characters in last years 100
top-grossing films. In 2016, according to
Forbes, 95% of Hollywoods best-paid actors
were older than 40, but just half of the best-
paid actresses were. You think, Well, its just
me, Im having a career lull, but its hard to
separate whats going on [in the industry]
with yourself as a performer, she says.
She values keeping her personal life out of
the press and dislikes the increasing lack of
privacy that she sees in Hollywood. The
scrutiny, the level of the minutiae of the sor-
did detail is higher now, she says, and
theres this just kind of hangover [in which]
you dont feel as safe in your own skin. She
thinks that social media has encouraged a
culture driven by cameras.
Ms. Tomei splits her time between New
York and Los Angeles and likes to have a mix
of theater and film work, though preferably
not at the same time. I have done both at
once, she says, but I never felt like I could
do either one very well in those circum-
stances. When she was preparing for The
Wrestler, she was also doing the play Top
Girls. I was exercising like a fiend and
learning all my stripteaseand then playing
the English explorer Isabella Bird on Broad-
way in a fat suit, she says.
Next, she is hoping to help produce a tele-
vision miniseries about Ms. Magazine and
the feminist icon Gloria Steinem, though the
project is still in development. I say a lot of
hosannas for that to happen, she says.
This summer, she will appear as Peter
Parkers Aunt May in Spider-Man: Home-
coming, out July 7. In past comic books,
Aunt May had gray hair and wrinkles, and
Spider-Man fans have complained online that
Ms. Tomei is too young for the role. She
looks out the window and says, Thats kind
of a backhanded compliment.
Having arrived now at her downtown
apartment, we still have a few minutes left
for the interview, so she asks the driver to
pull over. She double-parks, but Ms. Tomei
asks her to find another spot. Can you pull
over? she asks. I want to feel tucked in.
MUSIC BOX FILMS
where. Another spell is bound by
Pascal Martis cinematography.
Its mostly in luminous black-and-
whiteyes, black-and-white can
be luminousthough color is
used to show the past. Or what
passes for the past. Whats re-
counted in Frantz isnt always
what happened.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A10 | Monday, March 27, 2017 THE WALL STREET JOURNAL.

OPINION
REVIEW & OUTLOOK
Lets Empty the Files
The Kremlins Woman in Paris On Russia and Putin
M
arine Le Pen made a surprise visit to and Islamic fundamentalism.
the Kremlin Friday, and Vladimir Pu- Ms. Le Pen made clear that shed pursue a The American media Silicon Valleys ethos that history is
needs to get a grip. bunk and only tomorrow matters.
tins warm reception left little doubt policy of appeasement toward Russian aggres-
News in essence is But dont news outlets like the Wash-
about Moscows choice to win sion against the countries that about how today dif- ington Post and the Associated Press have
the French Presidential elec- Marine Le Pen seeks live in Moscows shadow. Sov- fers from yesterday, a editors who have some sense of what
tion in a month. and getsVladimir ereignty is sacred to herun- corollary of which is happened the day before yesterday?
The National Front leader less youre Georgian or Ukrai- that yesterday was dif- Mr. Trump suffers the opposite prob-
was looking for at least a de Putins endorsement. nian. I was one of the few BUSINESS
ferent from today. lem. Just as his understanding of wire-
WORLD
facto Kremlin endorsement a politicians in France who were By Holman W.
Reporters commit tapping seems to date from the 1971
month from the first round of defending their own point of the fallacy of anachro- movie The French Connection, he ap-
Jenkins, Jr.
voting, and she received it with news footage view on Ukraine that coincided with that of Rus- nism out the wazoo pears blithely, confidently at sea amid
that showed the Russian strongman smiling sia, she said at the Russian Parliament. with their treatment of the evolving quandaries of the U.S. rela-
next to her. She went on to denounce Ukraines elected a report that Paul Manafort, who briefly tionship with Russia. A tad perverse is
served as Trump campaign manager, indi- the hunt now for organized collusion,
We do not want to influence events in any government using rhetoric that would make the
rectly offered in 2005 to help the Putin re- with Russia or anyone, on the part of so
way, Mr. Putin said, and how would anyone get producers at Russia Today blush: We are gime with its PR efforts in the West. I disorganized a campaign. Didnt Mr.
that idea? Pro-Kremlin news sites merely pub- forced to deal with a government that came to dont know Mr. Manafort or have any need Trump, during a televised news confer-
lished reports that the Kremlin had pledged to power illegally, as a result of the Maidan revolu- to defend him, but an implication that he ence, openly invite Russia and other
help Ms. Le Pens cash-strapped campaign be- tion, and now bombs the population in Donetsk was working against U.S. interests is plau- hackers to release Hillary Clinton
fore correcting the stories and deleting the and Luhansk. This is a war crime. She vowed sible only if you confuse 2005 with 2014, emails? Didnt he laud WikiLeaks? How
tweets. In 2014 the National Front received a $10 to fight European sanctions imposed in re- when the U.S. imposed sanctions on Russia much collusion do you want?
million loan from a Kremlin-linked bank. sponse to Russias illegal annexation of Crimea over its aggressive actions in Ukraine.
Ms. Le Pen returned the public admiration, and proxy invasion of eastern Ukraine. Back in 2005, improving Mr. Putins
saying Mr. Putin represents a new vision of Ms. Le Pen has long been a Putin apologist, PR, in fact, was a major U.S. goal due to Trump and his associates
the need for Russias support of U.S. mil-
conservative nationalism and sovereignty but the difference is that now she has a plausi- are caught up in the
itary operations in Afghanistan.
along with Donald Trump and Indian Prime ble path to the lyse Palace. Being open to ne-
Minister Narendra Modi. Thats an insult to gotiations with Mr. Putin is one thing, excusing
This reliance began almost immedi- backlash over the Wests
ately, with Mr. Putin in December 2001
Messrs. Trump and Modi, who have won fair and endorsing Russian imperialism another. If blessing the use of an ex-Soviet air base in long tolerance of Putin.
elections. She also called on Paris and Mos- shes elected, Mr. Putin will have an overt fifth Kyrgyzstan to mount attacks on the Tali-
cow to join forces to combat globalization columnist in the heart of NATO. ban. By 2009, ambushes and pilfering of
U.S. supplies moving through the south- He later claimed he was joking, but he
ern route in Pakistan had become so intol- clearly reveled in the Clinton campaigns
The Westminster Jihadist erable, President Obama and Gen. David
Petraeus made a deliberate choice to in-
email mugging. The problem is, so did
the mediaall of the media. If your taste

I
t is still early in the investigation of the absorbing violent, anti-Western videos. crease reliance on the northern route. Not didnt run to revelations that Donna Bra-
without irony, most of the U.S. freight for zile leaked CNN debate questions to Mrs.
deadly vehicular assault on Westminster Whether that is true of Masood or whether he
the war ended up flowing over Soviet rail Clinton, then it surely ran to the discov-
Bridge, but police have identified the ter- had accomplices remains to be learned, though lines built to support its own Afghanistan ery that John Podesta sneered at conser-
rorist as Khalid Masood, born police initially arrested seven war in the 1980s. Hundreds of U.S. troops vative Catholics. Those colluding in
52 years ago in Kent, near The victims include people in Birmingham, where a week passed through Russian airspace the Russian goal of making U.S. democ-
London. As a native Brit, a Utah man sight- he lived. Antiterrorism ex- on their way to the battle. racy seem a feckless circus would fill the
Masood fits the profile of a perts have cited Birmingham When President Bush traveled to Tidal Basin.
radicalized Muslim in the seeing with his wife. as a breeding ground for Is- Moscow in 2002 and sang Mr. Putins Every third time he opens his mouth,
mold of American jihadists lamic radicalization. praises, he was engaged in PR for the Mr. Trump says something about Russia
like Omar Mateen who mur- Among the four killed was war effort. When President Obama was or Mr. Putin that he probably shouldnt.
dered 49 people in an Orlando night club in Kurt Cochran, a 54-year-old American from caught on a hot mike patting Dmitry He was destined to have a steep learning
2016. Masood had a 20-year criminal record, Utah who was in London for a wedding anniver- Medvedev on the arm and asking him to curve given his lack of experience in
pass along a message of future flexibility government. A year from now, if he lasts
and Prime Minister Theresa May said he had sary with his wife Melissa, who was injured.
to Boss Putin, it wasnt because Mr. that long, dont put it past him to have
come to the attention of British security agen- Also among the injured on Westminster Bridge Obama mistook Mr. Putin for a cham- a better handle on Putin than Obama or
cies but was deemed not to be a threat. This is were three French children, four South Koreans, pion of Obama values. The Russians Bush did. Mr. Putin himself is the major
also like Mateen. two Romanians, two Greeks, a Chinese, Pole and even then were prepping for Americas factor in changing the alignments to al-
A day after the murders Islamic State German. The origins of these victims demon- use a former Soviet air hub in Ulya- low and require Western governments
claimed Masood as a soldier, and we have strates the indiscriminate nihilism of these jiha- novsk, birthplace of Lenin. increasingly to treat him unambiguously
learned by now that it is possible to produce a dist assaults. Fighting them is the responsibility If you wonder why the U.S. and other as leader of a hostile power.
terrorist if someone spends enough time online of all nations. countries were and have remained rela- As for Trump collusion, where
tively mute on the sins of the Putin re- theres smoke, theres fire, goes a typical
gime, Afghanistan is a decent place to bit of journalistic deep thinking. But
The ObamaCare Republicans start. Watergate analogies have been ban-
died about lately, but what really is needed
sometimes theres just a smoke machine
furiously being cranked by Rep. Adam

H
is a Pentagon Papers scandal. We need an Schiff, ranking Democrat of the House
ouse Republicans pulled their health- Messrs. Trump and Ryan are right that the emptying of the files to lay out in its full Intelligence Committee.
care bill shortly before a vote on Friday, ObamaCare markets are imploding, and prices glory the history of awkward, contradic- In the end, Mr. Schiff will likely prove
and for once the media dirge is right will rise and choices will shrink again next year tory and humiliating straddles that West- right about one thing only: his oft-stated
about a GOP defeat. This is a on present trends. Republicans ern governments have engaged in con- complaint that the Obama administra-
major blow to the Trump Pres- The GOP right blows can try to blame Democrats, cerning the rise of the Putin regime. tion did little to deter Mr. Putins adven-
idency, the GOP majority in up its best chance to but theyre in charge. It probably is too much to expect any turism. Indeed, the mind slightly bog-
Congress, and especially to the Health and Human Ser- awareness of this history from glib mil- gles that Russian jets still fly
cause of reforming and limit- reform government. vices Secretary Tom Price can lennial reporters feasting on the Trump- unmolested over Ukraine and Syria
ing government. use regulation to improve in- Russia story. It may be too much to ex- without facing covertly supplied U.S.
pect from Jeff Bezos, saturated in man-portable missiles.
The damage is all the more surance markets at the mar-
acute because it was self-inflicted. President gin, but the bill would have given him more re-
Trump was right to say on Friday that Demo- form tools. The Trump Administration is
crats provided no help, but Democrats were inevitably invested in improving ObamaCare
never going to vote to repeal President Obamas instead of standing up a replacement, and the
Did Obama Abuse
most important legislation. And thats no ex- voters harmed by rising premiums and declin-
cuse. Republicans have campaigned for more ing choices may punish Republicans in the
than seven years on repealing and replacing 2018 midterms.
Raw Intelligence?
ObamaCare, and they finally have a President This failure also reveals the unfortunate By Peter Hoekstra from FBI Director James Comey and Na-

I
ready to sign it. In the clutch they choked. skills gap between Democrats and modern Re- tional Security Agency Director Adm.
i i i publicans in practical legislative politics. Demo- t was remarkable when Devin Nunes, Mike Rogers. Mr. Comey said there was
chairman of the U.S. House Intelligence no basis to support the tweet from Pres-
Speaker Paul Ryan and Mr. Trump worked to- crats have their Bernie Sanders faction, which
Committee, revealed last week that ident Trump that his wires had been
gether and to their credit to broker a compro- claimed to oppose ObamaCare in 2009-10 for Trump campaign officials were caught up tapped by Barack Obama. What he didnt
mise between the GOPs moderate and conserva- lacking a government-run public insurance op- in the inadvertent collection of intelli- sayand wasnt askedwas whether in-
tive wings. Their bill worked off the reality that tion. But the far left voted for the bill anyway gence. Read between the lines with a clear formation was collected on Trump staff
the U.S. health system has changed under because they concluded, rightly, that a new enti- understanding of the intelligence commu- by other means. Mr. Trump was a little
ObamaCare and thus an orderly transition is tlement was a great leap toward single-payer nity, and its positively astonishing. inarticulate in the context of Twitters
necessary to get to a free-market system with- national health care. Starting with the premise of Mr. 140-character limit, but it seems he got
out throwing millions off insurance. The GOP An ideal free health-care market is never go- Nuness announcement, theres evidence the general picture right.
also is a center-right coalition with competing ing to happen in one sweeping bill. The Ameri- to show that communications involving Then theres Mr. Comeys testimony
views and priorities. The bill had flaws but was can political system is designed to make people connected with the Trump transi- that the FBI had been investigating
tion were collected by Americas intelli- Trump staff for eight months. It almost
the largest entitlement reform and spending re- change slow and difficult, thank goodness. Re-
gence apparatus. We dont know the par- certainly included surveillance; an inves-
duction in recent decades. publicans have to build their vision piece by ticulars, but it could include conversations tigation without surveillance would ap-
That wasnt good enough for the 29-or-so piece, carefully gauging how to sustain their between Trump transition staff and for- proach farcical.
members of the House Freedom Caucus who policy gains politicallythe same way Demo- eign officials whose conversations were Adm. Rogers told the House Intelli-
sabotaged this fragile legislative balance. When crats expanded the welfare and entitlement subject to intelligence monitoring. gence Committee that there are strict
one of their demands was met, they dug in and state over the last century. Things begin to get a little frightening controls in place for masking and un-
made another until they exceeded what the rest But much of the current conservative estab- when we learn that this inadvertent col- masking the identities of people caught
of the GOP conference could concede. You cant lishment profits from fanning resentments, not lection of Trump staff conversations was up in the inadvertent collection of infor-
have a good-faith negotiation when one party governing. Legislative compromises dont help followed up with transcriptions of those mation and the distribution of this kind
doesnt know how to say yesor wont. Heritage Action raise money for its perpetual conversations and the disclosure (or un- of material. It now appears he either
The Washington chorus now claims Mr. Ryan outrage machine. An earlier generation of lead- masking) of the persons involved in the misled the committee or doesnt know
conversation. These transcripts would be whats happening inside his own agency.
made a mistake by leading with health care, and ers at Heritage understood that the goal of win-
considered raw intelligence reports. If Mr. Nunes is right, the rules either
perhaps in retrospect he did. But he was re- ning elections was to achieve something. The When I was chairman of the House werent followed or were much less
sponding to demands for immediate repeal by current leaders seem happy with failure. Intelligence Committee, I was routinely stringent than Adm. Rogers let on.
the same conservatives who later abandoned Heritage was joined in opposition by the Club involved in briefings as a member of the Last, and rather damningly, I believe
him. They wanted a repeal-only vote that had for Growth and the Koch brothers political ma- Gang of Eightboth parties leaders in that Mr. Comey and Adm. Rogers would
no chance of passing, which is why Mr. Ryan and chinery, also on grounds that the bill was imper- the House and Senate and on the intelli- have to have known that raw transcripts
Senate Republicans worked on the compromise fect. But good luck finding any comparable gence committees. I cannot recall how of captured conversations that included
of repeal and replace. chance to shrink government. This demonstra- many times I asked to see raw intelli- members of the Trump team were at the
The critics assailed the bill as ObamaCare tion of GOP dysfunction will make Members gence reporting and was refused be- White House. It is inconceivable that peo-
Lite, but the result of their rule-or-ruin strat- even more skittish about taking other difficult cause that stuff is just not made avail- ple in those positions of power would not
egy will now be the ObamaCare status quo, and votes, including tax reform. able to policy makers. know. While this may not be criminal, it is
But according to Mr. Nunes, such infor- at least a cause for them to be fired.
Mark Meadows (North Carolina), Jim Jordan Mr. Trump said Friday he wants to move for-
mation made its way to the Obama White My greatest concernthe one that
(Ohio), Louie Gohmert (Texas) and the rest own ward on cutting taxes, and Ways and Means House before Inauguration Day. Few if any keeps me awake at nightis that the
all of its problems. Please spare everyone your Chairman Kevin Brady wants to do the same. We people working in the White House would awesome powers of Americas intelli-
future grievances about rising health spending wish them luck and support the effort. But ever need to see raw intelligence. Like in- gence community might have been cor-
or an ever-larger government. health reform is about a single industry. Tax re- telligence-committee members, they are rupted for political purposes. While
The grand prize for cynicism goes to Senator form implicates every industry and its denizens typically consumers of intelligence prod- were not witnessing broad, Stasi-style
Rand Paul, who campaigned against the bill are the definition of the Washington swamp. ucts, not raw intelligence. surveillance of citizens, its clear there
while offering an alternative that hasnt a prayer Success on health care would have produced The raw transcripts of masked per- have been serious errors of judgment
of passing. I applaud House conservatives for momentum and confidence that Republicans sonsor unmasked persons, or U.S. per- and action among an otherwise profes-
keeping their word to the American people and could fulfill their promises. Now Democrats and sons who can be easily identifiedmak- sional intelligence community. This is
ing their way to the White House is very truly scary. We have to learn the entire
standing up against ObamaCare Lite, said Dr. the swamp rats smell blood.
likely unprecedented. One can only imag- truth before anyone, in or out of Con-
Paul. I look forward to passing full repeal of Perhaps Mr. Trump and the GOP can recover ine who, at that point, might be reading gress, can again have confidence in the
ObamaCare in the very near future. from this debacle, but as an opening act to a new these reports. Valerie Jarrett? Susan intelligence community.
There will be no such repeal in this Congress, Presidency the collapse of his first legislative Rice? Ben Rhodes? The president him-
and probably not in any other. Republicans run campaign is ominous. In business Mr. Trump self? We dont know, and the people who Mr. Hoekstra, a Michigan Republican,
the government and that means they are re- liked to get even. Hes got some scores to set- do arent talking at the moment. was chairman of the House Intelligence
sponsible for what happens in health care. tle with the Freedom Caucus. Then we have the testimony last week Committee, 2004-07.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
High Anxiety Over U.S. Health-Care Reform
DECLARATIONS
By Peggy Noonan
W
Washington
hat politicians, those
hardy folk, dont un-
derstand about
health care is how
anxious it makes
their constituents. Not suspicious,
not obstinate, but anxious. Because
unlike such policy questions as tax
reform, health care can be an im-
mediate life-or-death issue for you.
It has to do with whether, when,
and where you can get the chemo if
youre sick, and how long theyll let
you stay in the hospital when you
have nobody, or nobody reliable
and nearby, to care for you.
ObamaCare proved to be a
catastrophic victory. The
Republican plan had the
makings of another one.
To make it worse, the issue is all
hopelessly complicated and com-
plex and pits you as an individual
against huge institutionsthe in-
surance company that doesnt an-
swer the phone, the hospital that
says Im afraid thats not cov-
eredand you have to make the
right decisions.
Its all on you.
Politicians dont understand all
this, in part because they and their
families are well-covered on a gov-
ernment insurance policy, and they
have staff to put in the claim and
argue with the insurance company,
which, when its a congressman
calling, answers the phone in one
quick hurry. They dont know its
not easy for everyone else. Or
rather they know on some abstract
level but forget in the day-to-day,
as one does with abstractions.
By Bill Lane
O
n July 4, 1918, Pvt. Thaddeus
Sylvester Lewandowski of
Chicago was wounded near
the village of Le Hamel, France. By
World War I standards, it was a
modest affair. In 93 minutes, at a
cost of 1,400 men killed and
wounded, the allies captured the
town, killed 2,000 German soldiers,
and took another 1,600 prisoner.
The Battle of Hamel had two
lasting legacies. The allies, led by
Australias Gen. John Monash,
conducted a coordinated, com-
bined-arms operation that in-
cluded smoke and gas diversions,
creeping artillery, robust assaults
by Mark V tanks and infantry, plus
the first ever air drops to resup-
ply infantry.
The successful model would later
New Yorks Sen.
Chuck Schumer
made history last
week, in formally
declaring his inten-
tion to break the
POTOMAC U.S. Senate. Add
this to the list of
WATCH
Democratic wreck-
By Kimberley
age Republicans
A. Strassel
may now be
obliged to fix.
Thats the best way to process
the minority leaders announce-
ment Thursday that he will vote to
filibuster the nomination of Judge
Neil Gorsuch to the U.S. Supreme
Court and urge his fellow Demo-
crats to join him.
Not even Mr. Schumer denies
Judge Gorsuch possesses a singu-
larly gifted legal mind and is emi-
PUBLISHED SINCE 1889 BY DOW JONES & COMPANY
Rupert Murdoch
Executive Chairman, News Corp
Gerard Baker
Editor in Chief
Matthew J. Murray
Deputy Editor in Chief
DEPUTY MANAGING EDITORS:
Michael W. Miller, Senior Deputy;
Thorold Barker, Europe; Paul Beckett,
Washington; Andrew Dowell, Asia;
Christine Glancey, Operations;
Jennifer J. Hicks, Digital;
Neal Lipschutz, Standards; Alex Martin, News;
Shazna Nessa, Visuals; Ann Podd, Initiatives;
Matthew Rose, Enterprise;
Stephen Wisnefski, Professional News
Paul A. Gigot, Editor of the Editorial Page;
Daniel Henninger, Deputy Editor, Editorial Page
WALL STREET JOURNAL MANAGEMENT:
Suzi Watford, Marketing and Circulation;
Joseph B. Vincent, Operations;
Larry L. Hoffman, Production
EDITORIAL AND CORPORATE HEADQUARTERS:
1211 Avenue of the Americas, New York, N.Y., 10036
Telephone 1-800-DOWJONES
But I want to speak of how its
all on you: You dont want to be
seenby others, by yourselfas
someone who couldnt make the
right decisions for yourself and
your family.
She didnt know she needed
Part B. She got the supplement
that says she cant be treated in
Jersey. You dont want to be hu-
miliated. What a dope. What fa-
tal lack of sophistication.
And then these jokers in Con-
gress come along. Seven years ago
its Democrats: Wow, were so su-
percompetent, well make it better!
And suddenly you lose your doctor
or your coverage, or your premiums
spike, and its a mess. They cant
even make the website work. And
youre anxious, and you have to re-
navigate an entire opaque empire of
rules and passive-aggressive clerks.
Its a shadow on your life.
And then it settles down, as
things do after seven years. You
hate the system, but it is what it is
and youre used to it. And now
these new jokers come along and
say, Well make it nice, trust us!
And its all big and complicatedso
complicated the president negotiat-
ing it appears to have no idea what
hes saying yes or no to.
But the effects and implications
of his decisions will all be left on
you. And you watch from the cor-
ner of your eye as you pass the
television, and suddenly your
blood pressures spiking again. For
you its all more anxiety and di-
shevelment and confusion, but in a
new package, this time delivered
by Republicans.
When all you want is the card
in the wallet so when youre
strapped to the gurney in the
emergency room, theyll see it and
theyll say the word you want to
hear: Covered. Then you can
happily pass out.
People need simplicity and clar-
ity. They deserve it. Theyll pay for
it as best they can, a lot if they
have to. But they need not to be
jerked around anymore.
And that is what Congress
doesnt know.
A New Role for Americas No. 1 Ally
be applied to bigger battles that
eventually breached the Hinden-
burg Line and won the war.
Hamel also set in motion a re-
markable military alliance. Ten
green Illini companies had been at-
tached to the British Expeditionary
Force to gain experience. Four
joined the battle, making it the first
time Americans and Australians
fought side by side. It was also the
first time Americans fought under
foreign command.
If one measures U.S. allies by
dependability, Australia is No. 1.
Americans and Australians have
fought together in every major
conflict of the past century: World
War I, the Russian Civil War,
World War II, the Cold War, Korea,
Vietnam, the Gulf War, Afghanistan
and Iraq. We are both engaged in
the fight against al Qaeda and Is-
Chuck Schumer Breaks the U.S. Senate
nently qualified for the court. His
objection, instead, is that the nom-
inee is conservative. This is ap-
parently now a disqualifying attri-
bute for any Supreme Court
justice.
Not that Mr. Schumers an-
nouncement should count as news.
In early January, before Donald
Trump had even taken office, Mr.
Schumer told MSNBCs Rachel
Maddow that it was hard for him
to imagine any nominee that
Donald Trump would choose that
would get Republican support that
we could support. He promised
to do his best to keep the seat
open the entirety of the Trump
presidency.
Democrats were always going to
oppose anyone Mr. Trump picked.
The president could have named
Robert Thomson
Chief Executive Officer, News Corp
William Lewis
Chief Executive Officer and Publisher
DOW JONES MANAGEMENT:
Mark Musgrave, Chief People Officer;
Edward Roussel, Innovation & Communications;
Anna Sedgley, Chief Operating Officer & CFO;
Katie Vanneck-Smith, President
OPERATING EXECUTIVES:
Ramin Beheshti, Product & Technology;
Jason P. Conti, General Counsel;
Frank Filippo, Print Products & Services;
Steve Grycuk, Customer Service;
Kristin Heitmann, Transformation;
Nancy McNeill, Advertising & Corporate Sales;
Jonathan Wright, International
DJ Media Group:
Almar Latour, Publisher;
Kenneth Breen, Commercial
Professional Information Business:
Christopher Lloyd, Head;
Ingrid Verschuren, Deputy Head
OPINION
Speaker Paul Ryan and OMB Director Mick Mulvaney on Thursday.
We go now to the failure of the
ObamaCare repeal-and-replace bill.
Politically its all obvious. For
the new administration its a loss
and a significant one. It has dam-
aged the new presidents prestige. this bill he couldnt tell his sup-
Every president until he fails has
the aura of unused power. Boy,
when I use it, youre gonna see
muscle. He used it. No muscle. Fa-
tal? No. Damaging and diminish-
ing? Yes.
It is an embarrassment too for
Speaker Paul Ryan. Together they
couldnt get a win on the board af-
ter they threw everything they had
into it. This doesnt speak well for
everything they have.
They picked the wrong issue at
the wrong time and pursued it in
the wrong way. (Constituent,
should we focus on a better tax
system or on health care? Um, if
you go with health care can it in-
clude suicide coverage?)
The failure of the bill demon-
strated something no president,
especially a new one, ever wants
made public. That is that Republi-
cans in the House dont really
fear him.
When members of your party
fear you, they are fearing one
thing: your popularity. You can har-
lamic State. No other U.S. ally can
match that record.
World War I was also the start
of Americas wider role as a de-
fender of democracy. Since the end
Australia has fought
with the U.S. since
World War I. What
now in the Trump era?
of the World War II, the president
has often been referred to as the
leader of the Free World.
That appears to be changing.
President Trump reportedly had
harsh words for Australian Prime
Minister Malcolm Turnbull during
their first official conversation.
Mr. Schumer himself to the high
court, and Mr. Schumer would
have filibusteredon principle.
The slow-rolling nature of the
process has nonetheless masked
the extraordinary new standard
Mr. Schumer is setting, and the
damage to the Constitution. Hes
saying that every Supreme Court
nominee will now require 60 votes
to be confirmed. This is a massive
shifta break with the Founders
vision of advice and consent, and Democrats are floating
an affront to two centuries of Sen-
ate history.
Its a declaration that Demo-
crats will permanently wield the
judicial filibuster as a political
weapon, robbing the president and
the Senate majority of the ability
to appoint, and stripping the Su-
preme Court of a full complement
of justices.
What makes the standard sud-
denly real is that Mr. Schumer can
likely enforce it against his mem-
bers. Never in U.S. history have we
had a successful partisan filibuster
of a Supreme Court nominee. In
1968 a bipartisan group of senators
filibustered the proposed elevation
of Justice Abe Fortas to chief jus-
tice, because he was a crook. The
left edged nearer the precipice in
2006 with the attempted filibuster
of Samuel Alito, but only 25 Demo-
crats joined.
Since then, progressives have
lost any fear of the electoral con-
sequences of playing abject poli-
tics with the high court. The
American Bar Association unani-
mously awarded Judge Gorsuch its
highest possible rating. He floated
through last weeks confirmation
hearings. Liberal and conservative
colleagues alike have praised him
to the stars.
GETTY IMAGES
ness it to hurt them if theyre un-
cooperative. But Mr. Trump doesnt
have that much popularity, as they
know. Hes at 40% or thereabouts
in his approval numbers. And on
would always own it, and when the
porters to go out and cream con-
gressmen who would vote against
him, because his own supporters
dont much like the bill.
The central dynamic behind the
bills difficulties is that the Repub-
lican conference in the House is di-
vided between institutionalists,
who support the leadership; con-
servatives, who found the bill too
soft; and moderates, who found it
too hard. By putting forward the
bill, they allowed this division
which was wholly predictable and
may be irreconcilableto play out
as a public breakdown rather than
an impasse.
The president made a political
mistake in throwing his lot with
the leadership, and then conserva-
tives, not Republican moderates,
and then Democrats.
A mere poll probably contributed
to the collapse of support. That
would be the Quinnipiac survey
published Thursday, just hours be-
fore the delay in the vote. It found
the repeal-and-replace bill highly
Counterproductive dust-ups fol-
lowed with Mexico, Britain and
Germany.
To be fair, we were warned. In
his recent address to U.S. Congress,
Mr. Trump declared: My job is not
to represent the world. My job is to
represent the United States of
America. Thats a stark contrast
with President Kennedys proclama-
tion: Let every nation know,
whether it wishes us well or ill,
that we shall pay any price, bear
any burden, meet any hardship,
support any friend, oppose any foe,
to assure the survival and the suc-
cess of liberty.
Surely theres a middle ground.
Time will tell if Mr. Trump will
continue pushing toward protec-
tionism and isolationism, or
whether he will pivot toward open
markets and engagement.
Yet not a single Democratnot
even vulnerable moderates such as
West Virginias Joe Manchin or
North Dakotas Heidi Heitkamp
has publicly supported him. Before
last weeks drama had even ended,
Democratic senators were queuing
to oppose him.
Why desperate red-state
a deal to let Judge
Neil Gorsuch through.
Opposing a nominee is not the
same as denying him a floor vote.
But Mr. Schumer has the power to
punish Democrats who dont follow
his filibuster order. And progres-
sive groups are promising that any
Senate Democrat who fails to sup-
port a filibuster will face a pri-
mary challenge. Senate sources tell
me there is good reason to believe
Mr. Schumer can muster the votes
to block the nomination.
Not that red-state Democrats
are happy, as evidenced by news
that some are floating a deal un-
der which Democrats would allow
Judge Gorsuchs nomination to
come to a vote in return for Re-
publican agreement to keep the fil-
ibuster in place for future Trump
nominees. The proposal is proof
that some Senate Democrats are
worried about being blamed back
home for a partisan filibuster of
an impeccable candidate.
Its also ludicrous, because Re-
publicans have no need to make a
deal. They already have the power
to invoke the nuclear optionas
Harry Reids Democrats did in
Monday, March 27, 2017 | A11
unpopular. Only 17% of respondents
approved of the bill, with 56% op-
posed and 26% undecided.
Bloombergs Sahil Kapur, read-
ing the cross tabs, noted on Twit-
ter that the bill was 26 points un-
derwater among noncollege
whites, and an astounding 46
points underwater among voters
50 to 64. This is Trumps base,
Mr. Kapur noted.
When your own base doesnt like
the bill on which youve staked
your early legislative prestige, you
have made a political error of the
first order.
Seven years ago, when Obama-
Care was on its way to passing
with not a single Republican vote,
I called it a catastrophic victory. It
wouldnt work; the government
would not be able to execute; it
was a Rube Goldberg machine. It
was a bill created not by visionar-
ies or political masters but by tech-
nocratsand the worst kind of
technocrat, the one who sees him-
self as a secret visionary.
On top of that the Democrats
program failed, Republicans would
have no motivation to help them
save it.
That is what RyanCare or
TrumpCare would have been if it
had passed: a catastrophic victory.
No Democratic support, an opaque
and impossible-to-understand bill,
one that is complex and compli-
cated, one that would be unpopu-
lar back home. And created by
technocrats who think themselves
visionaries.
Mr. Trump warned House Repub-
licans they would lose their seats
next year if they vote no. They
judged theyd lose their seats in
2018 if they voted yes.
When Mr. Trump wins, he wins
big, and when he flops, he flops
big. He just did.
A proper White House reaction?
Not anger, bluff and bluster, not
finger-pointing or defensiveness
but modesty and calm. And this:
Offer to work with Democrats and
moderate Republicans to create leg-
islation that will help and can pass.
Nearly a century ago, Australia
showed the world how to win
World War I and proved it stood
ready to be a reliable ally to
America.
My grandfather, Pvt. Lewan-
dowski, was part of that history.
My hope is that during the next
four years Australia will keep
steady, demonstrating the impor-
tance of multilateral cooperation,
mutual defense and international
trade. By doing so it may show our
new president that interdepen-
dence, not just independence,
makes Americans safe, strong and
prosperous.
If it does, Australia may earn the
title leader of the Free World.
Mr. Lane is a retired director of
global government affairs at Cater-
pillar Inc.
2013 for all nominations except to
the high courtand get Judge
Gorsuch on the court, and theyd
be irresponsible to commit to Mr.
Schumers new filibuster standard
going forward. The deal is a
nonstarter.
As to that nuclear option, bear
the Schumer standard in mind as
Democrats and the media gin up
stories suggesting Majority Leader
Mitch McConnell is about to do
something outrageous. I would
not want to be the person . . . that
basically changed the Senate from
what the Founding Fathers in-
tended, Mr. Manchin told reporters
last week. (The West Virginia sen-
ator was one of only three Demo-
crats to dissent when Mr. Reid
went nuclear in 2013.)
These comments aim at pressur-
ing institutionalist Republican
senators with an attachment to the
chambers traditions. But it wont
be Mr. McConnellan institution-
alist among institutionalists
changing anything. Its Mr.
Schumer who is destroying the
Founders principle of advice and
consent.
It will be Republicans, in exer-
cising the nuclear option, who
would return the Senate and Su-
preme Court to functioning order.
It will be Republicans preserving
the institution and its rightful
powers.
If Mr. Manchin and fellow Demo-
crats want to retain the filibuster
for future, justified use, thats sim-
ple. All they need do is refrain from
abusing that power against a highly
intelligent, perfectly qualified nom-
inee. This is Mr. Schumers mess.
Either his party can clean it up, or
Republicans will do it.
Write to kim@wsj.com.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A12 | Monday, March 27, 2017 THE WALL STREET JOURNAL.

LIFE & ARTS

ESSAY

Europes Quiet Abortion Politics

Newly resurgent, right-wing populist movements have largely ignored the issue
Poland, the procedure is illegal in
BY FRANCIS X. ROCCA
most cases; in Malta, it is totally
forbidden. Waiting periods of sev-
THE ELECTION of Donald Trump eral days are mandatory in Ger-
has boosted the profile and pros- many, the Netherlands and Belgium.
pects of the U.S. antiabortion move- In Germany and the U.K., abortion
ment. A wave of right-wing popu- is technically illegal except under
lism is also hitting Europe, but on certain conditions.
the continent, abortion is almost in- Though their political impact has
visible as a political issue. No major been limited, antiabortion demon-
party in the coming elections in strations in Europe can be robust.
France and Germany, or in last Recent protests on the continent
weeks vote in the Netherlands, has have drawn 50,000 in Paris and
proposed more restrictive abortion 30,000 in Rome, according to orga-
laws. nizers.
In fact, recent months have Religious leaders play a less
brought setbacks for Europes anti- prominent role in the antiabortion
abortion movement. In October, movement in Europe than they do
protests led Polands conservative in the U.S. In some countries, such
government to drop plans for a law as Poland and Spain, Catholic bish-
that would have prohibited abortion ops are vocal and visible in their
in all cases except danger to the support for the cause. The Polish
mothers life. Early this year, the Pope John Paul II returned to the
Dutch government and the Euro- country to campaign for the restric-
pean Parliament separately pro- tive law passed there in 1993. But
posed ways to increase funding for bishops are generally less militant
abortion in developing countries, a in France, Germany and Italy. The
response to the cutoff of such sup- only cardinal to have ever walked in
port from the Trump administra- Italys annual March for Life is Car-
NURPHOTO/GETTY IMAGES

tion. And in February, the French dinal Raymond Burke, an American

parliament instituted tough penal- who is an outspoken conservative
ties for websites that discourage on sexual and medical ethics.
abortion with what authorities Joseph Meaney, an antiabortion
deem misleading information. activist with Human Life Interna-
The disparity between the U.S. tional in Paris, says that Catholic
and Europe reflects sharply differ- bishops across the continent are
ent popular attitudes toward abor- Antiabortion activists in the annual 'March for Life' in Rome, May 10, 2015. generally more skittish about
tion. A 2015 BuzzFeed News/Ipsos overt political involvement on abor-
poll found that two-thirds of French Despite these differences, abor- from what it considers the threat of practice was legalized in Europe. In tion than their counterparts in the
and British respondents thought tion rates in North America and Muslim immigration. Party leader 1973, the U.S. Supreme Court estab- U.S. This reflects, he says, a more
abortion should be permitted Western Europe are similar, at 17 Marine Le Pen is pitching herself lished a constitutional right to abor- deferential and less confrontational
whenever a woman says she wants and 18 abortions per 1,000 live as the candidate of the rights of tion, a move that even some sup- approach by church leaders toward
onecompared with only 40% of births, respectively. Eastern Europe women, with the idea that Islam is porters say short-circuited necessary government authority in Europe,
Americans. A 2013 survey by the has higher ratesof about 42 abor- oppressive to women, said Pascal- political debate. where churches often receive large
Pew Research Center found that tions per 1,000 live birthsbecause Emmanuel Gobry, a Paris-based fel- By contrast, European countries public subsidies.
only 19% and 14% of German and of the less frequent use of contra- low of the conservative Ethics and permitted abortion through legisla- That approach is unlikely to
French respondents, respectively, ceptives, according to the Gutt- Public Policy Center. tive processes that helped to shape change under Pope Francis, who has
saw abortion as morally unaccept- macher Institute, a group that sup- Germanys anti-immigrant Alter- a broad consensus. Abortion is also played down church teachings on
ablecompared with nearly half of ports abortion rights. native for Germany party calls in its more restricted in Europe, which, sexual and medical ethics in favor
Americans. Low support for rolling back platform for focusing the countrys according to many observers, makes of political and economic questions.
The more religious character of abortion helps explain why Europes already mandatory pre-abortion the practice less provocative to Italian Archbishop Vincenzo Paglia,
American society, particularly the right-wing populists have avoided counseling on protection of unborn those with moral qualms about it. head of the Vaticans bioethics of-
greater presence of evangelical the issue in favor of socioeconomic life but doesnt propose more re- On most of the continent, abortion fice, said that the current pontifi-
Protestants, is part of the explana- and cultural ones. In recent years, strictive laws. on demand is available only up to cate makes it a priority to avoid po-
tion, says Drew Halfmann, a sociol- Frances populist National Front has Another important reason for the the 12th week of pregnancy. (No larization and encourage dialogue
ogy professor at the University of shed its antiabortion position to fo- trans-Atlantic differences over abor- U.S. court has upheld such a limit.) with those who disagree with
California, Davis. cus on defending French secularism tion is the less polarizing way the In Ireland, Northern Ireland and church teachings.

Weather The WSJ Daily Crossword | Edited by Mike Shenk

Shown are todays noon positions of weather systems and precipitation. Temperature bands are highs for the day.
-15 1 2 3 4 5 6 7 8 9 10 11 12 13 Down 29 Steakhouse
-10 1 Court officials order
14 15 16
Riga -5
2 Surface measure 30 Even score
0 17 18 19
Moscow
osco
Glasgow
Glasg
sgo Copenhagen
Co
C p h g 5 3 Chitchat 32 Big ox
10 20 21 22 34 Scales back, or a
4 Analyzes
Dublin
D bli 15
23 24 25 26 grammatically hint to the starts
Berlin
li
Amsterdam
A t d
arsaw
Warsaw
20 of the starred
25 27 28 29 30 5 Sheep sounds answers
London
Brussels 30 6 Circle segment
Frankfurt
kf Prague Kiev
e 31 32 33 34 35 36 35 National Velvet
35
7 Grasp author Bagnold
Paris Munich
i h 37 38 39
Vienna
V Warm 8 Stop already! 36 Contradict
Budapest 40 41 42
Geneva Cold 9 Easy-to-make- 38 Install, as
Milan 43 44 45 out text carpeting
Bucharest
h Stationary
46 47 48 49 50 10 Hayloft setting 39 Hans love
Showers 41 Chair part
Rome Istanbul
t b 51 52 53 54 55 11 I Am the
Rain Walrus, on the 44 Look into, as a
Madrid
d id
56 57 58 59 Hello, Goodbye cold case
Lisbon
L b
T-storms single
60 61 62 45 Duds
Al i
Algiers T i
Tunis Athens
Ath
Snow 12 Its capital is 46 Happy face, e.g.
63 64 65 Doha
Flurries 47 Potters field?
Rabat
b 13 Reaches across
Ice
DESCENDING ORDER | 18 Transmitted
48 Start a match

Global Forecasts Today Tomorrow Today Tomorrow By David C. Duncan Dekker copy 50 Tavern vessel
City Hi Lo W Hi Lo W City Hi Lo W Hi Lo W 52 Potential poppy
s...sunny; pc... partly cloudy; c...cloudy; sh...showers; Across 26 Hosp. sections 46 Middle of 22 Pop star Grande
Geneva 18 6 pc 19 5 pc Ottawa 6 2 r 7 -2 pc
t...tstorms; r...rain; sf...snow flurries; sn...snow; i...ice Hanoi 21 17 c 24 19 c Paris 18 8 s 17 8 pc 1 Grating sound 27 Play divisions summer? 24 Difficulties 53 Full of guile
Havana 29 15 s 30 16 s Philadelphia 22 12 r 22 10 t 49 Greek alphabet 54 Take to the air
Today Tomorrow Hong Kong 23 20 pc 24 21 c Phoenix 28 14 s 24 12 s 5 Ring-shaped roll 29 Slam-dancing 25 Make a request
City Hi Lo W Hi Lo W Honolulu 29 22 sh 29 22 sh Pittsburgh 20 12 c 19 7 sh spot ender 55 Whirl of water
10 Backyard 27 SOS singers
Amsterdam 15 5 pc 17 8 pc Houston 30 20 t 30 21 pc Port-au-Prince 32 19 pc 32 19 pc cookouts, for 50 Geographical
Anchorage 3 -5 c 5 -1 pc Istanbul 11 6 r 13 6 s Portland, Ore. 12 6 r 13 8 r 31 Substantial 28 West Virginia 58 Bravo!
Athens 16 9 t 16 10 pc Jakarta 32 25 t 32 24 pc Rio de Janeiro 28 22 pc 27 21 sh short snake high pts.
export 59 Flee
Atlanta 25 17 c 25 16 t Johannesburg 24 12 s 28 10 s Riyadh 26 15 c 28 18 c 14 Writer Bombeck 51 Orchestra
Baghdad 26 15 s 25 15 c Kansas City 16 7 r 19 10 pc Rome 17 5 pc 17 6 s 32 Computer whiz
Salt Lake City 11 4 sh 13 1 c 15 Spot for sports leader Previous Puzzles Solution
Baltimore 22 12 r 24 10 t Las Vegas 23 13 pc 23 11 s
Bangkok 31 23 pc 34 26 pc Lima 28 22 pc 28 22 pc San Diego 19 13 pc 21 13 s
33 Made a surprise S A A R M O D E S A W S
16 Hastily, in memos attack on 53 Pointless O V N E I K E A S P R E E
Beijing 16 1 s 18 2 pc London 17 7 s 16 10 pc San Francisco 17 9 pc 19 10 s D I G A O N A L S T O I L E
Berlin 15 4 pc 18 7 s Los Angeles 22 11 pc 26 11 s San Juan 28 23 pc 29 22 sh 17 Former reality 37 Slow love songs 56 Shrek, e.g. A D E D D U P E M E R A L D
Bogota 18 11 sh 19 10 sh Madrid 13 3 sh 17 3 pc Santiago 25 11 s 24 10 s show hosted by L I I I E A T
Boise 12 1 sh 13 4 pc Manila 33 26 pc 32 26 pc Santo Domingo 31 20 pc 31 20 pc 39 First callers spot 57 Ended a spat, in S A D I S T G O L L Y G E E
Boston 10 5 r 11 5 c Melbourne 32 13 t 23 13 s Sao Paulo 25 17 t 24 17 r Joe Rogan a way E R E C T MO A T S A X L
on hold T I E A S I L K S G R I M
Brussels 16 7 s 18 8 pc Mexico City 26 12 pc 26 10 pc Seattle 11 7 r 11 8 r 19 Hayworth of A S P O P E D S G A B L E
Buenos Aires 27 18 s 26 17 pc Miami 27 18 pc 28 19 pc Seoul 11 1 pc 13 2 pc 40 Acids opposite 60 Nonsense T E S T R U N S P U R S E R
Hollywood O A R A R A B
Cairo 25 15 pc 28 18 pc Milan 16 5 s 20 6 s Shanghai 19 10 s 22 11 c 61 Kick back
Calgary 12 -3 pc 12 -2 pc Minneapolis 10 0 c 13 1 pc Singapore 31 25 t 31 25 t 20 Dips for chips 41 Musical Horne R I C O T T A S I V A I S M
A S O N E A T A N A N G L E
Caracas 30 24 pc 31 25 pc Monterrey 36 17 s 36 15 pc Stockholm 15 1 s 8 1 pc
42 Take the title 62 Hit the books P L A I D R E N T Z E A L
Charlotte 24 14 pc 26 12 c Montreal 5 1 r 7 0 sh Sydney 27 22 s 26 22 pc 21 Kenyans T E T E P E A S O T T O
Chicago 13 5 r 11 2 pc Moscow 4 0 c 2 -5 r Taipei 23 15 s 25 17 pc neighbor 43 Tag cry 63 Chilled
The contest answer is SPACE. Five constellations
Dallas 27 15 s 28 19 t Mumbai 37 27 pc 35 28 pc Tehran 19 9 s 20 10 pc
Tel Aviv 22 11 pc 21 12 pc 23 Superman foe 45 Samberg of 64 Opposing of the zodiac are hidden in the grid in DIAGONALS
Denver 17 3 pc 12 1 r Nashville 24 15 c 23 10 pc
Luthor group (as suggested by 16-Across, and by AT AN ANGLE,
Detroit 18 7 c 13 3 pc New Delhi 38 23 pc 39 23 pc Tokyo 9 5 r 13 6 s Brooklyn at 55-Across). Each of the answers to the starred
Dubai 29 23 c 28 21 pc New Orleans 28 20 t 28 19 pc Toronto 15 6 c 11 1 pc 24 Bet Nine-Nine 65 Catch sight of
Dublin 11 8 c 13 10 sh New York City 15 10 r 18 8 c Vancouver 11 6 sh 10 6 r
clues crosses one of the constellations, and the
Edinburgh 13 3 c 12 6 sh Omaha 16 3 c 16 5 pc Washington, D.C. 24 15 sh 26 12 t crossing letters, in top to bottom order, spell the
Solve this puzzle online and discuss it at WSJ.com/Puzzles.
s

Frankfurt 17 4 s 20 7 pc Orlando 29 15 s 31 16 s Zurich 17 3 s 19 5 pc contest answer.

THE DAILY SHOT

Micro Trends, Macro Context. In Minutes.

Get a complete look at the trends moving global markets
with The Daily Shot. WSJs latest member-exclusive
newsletter delivers a sophisticated, impartial view in 30-plus
charts, every morning. Sign up at WSJ.com/dailyshot

2017 Dow Jones & Co., Inc. All rights reserved. 6DJ5150
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
BUSINESS & FINANCE
2017 Dow Jones & Company. All Rights Reserved.
Euro vs. Dollar 1.0810 0.24%
OPEC to Members: Do Your Part
BY MICHAEL AMON
OPEC officials on Sunday
urged member nations to cut
their oil production in line
with an agreement last year,
warning that the petroleum
market would remain de-
pressed if they didnt.
Members of the Organiza-
tion of the Petroleum Export-
ing Countries, the 13-nation
cartel that controls a third of
global production, need to
take compliance with a cut of
1.2 million barrels a day very
seriously, said Kuwaiti Oil
Minister Issam A. Almarzooq,
chairman of the groups com-
mittee overseeing compliance.
More has to be done, Mr.
Almarzooq said in a speech dis-
tributed by OPEC. We need to
see conformity across the
Why Prices
On Amazon
Fluctuate
So Wildly
I wanted to buy some mini
marshmallows recently, so I
went on Amazon. Perhaps
because of their resemblance
to packing materiallight,
bulky, ubiquitousI figured
theyd be
cheap. But
when I found
the most
popular
brand, not
KEYWORDS only did the
CHRISTOPHER marshmal-
MIMS lows cost
twice what
Id pay at my
local store, but the price had
skyrocketed overnight.
Just beneath the placid
surface of a typical product
page on Amazon lies an un-
seen world, a system where
third-party vendors can sell
products alongside Ama-
zons own goods. Its like a
stock market, complete with
day traders, code-slinging
quants, artificial-intelli-
gence algorithms and, yes,
flash crashes.
Amazon gave people and
companies the ability to sell
on Amazon.com in 2000,
and it has since grown into
a juggernaut, representing
49% of the goods Amazon
ships. Amazon doesnt break
out numbers for the portion
of its business driven by in-
dependent sellers, but that
translates to tens of billions
in revenue a year. Out of
more than 2 million regis-
tered sellers, 100,000 each
sold more than $100,000 in
goods in the past year, Peter
Faricy, Amazons vice presi-
dent in charge of the divi-
sion that includes outside
sellers, said at a conference
last week.
Its clear, after talking to
sellers and the software
companies that empower
them, that the biggest of
these vendors are growing
into sophisticated retailers in
their own right. The top few
hundred use pricing algo-
rithms to battle with one an-
other for the coveted Buy
Box, which designates the
default seller of an item. Its
the Amazon equivalent of a
No. 1 ranking on Google
search, and a tremendous
driver of sales.
To see what all this means
for the consumer, download
the Chrome extension Keepa,
which will show you the
price history for any given
item on Amazon. For the
marshmallow listing I had
been eyeing, the wild pricing
gyrations resembled a penny
stock during heavy trading.
Amazons retail business
is like this massive slowed-
down stock exchange, says
Juozas Kaziuknas, founder
and chief executive of Mar-
ketplace Pulse, a business-in-
telligence firm focused on e-
commerce. The usual market
dynamics are at work: Sellers
entering and leaving the
market, temporary scarcity
Please see MIMS page B4
TECHNOLOGY: LIVE STREAMS NAB SPOTLIGHT IN THE U.S. B4
FTSE 100 7336.82 g 0.05%
OPEC officials held a meeting in Kuwait City on Sunday.
board. We assured ourselves
and the worldthat we would. sustained when 11 countries
Oil prices rose 20% ini-
tially after OPECs produc-
tion-cut deal was announced
Syngenta Deal Feeds Fears in China
A researcher monitored an assortment of corn plants in a greenhouse at Syngentas biotechnology center in Beijing last February.
More genetically
engineered products
are possible; local
farmers are resisting
BY BRIAN SPEGELE
ZHAODONG, ChinaThe Hu-
iji Hotpot restaurant is a local
favorite here, where diners boil
meat and vegetables in caul-
drons of brothcomfort food
to gird against the subzero
winter in this far northern
farming community.
A couple of years ago cus-
tomers started to quiz manager
Wu Xiaofeng: Did his restau-
rant use oil made with geneti-
cally modified soybeans in its
kitchen? He hung a sign next to
Huiji Hotpots cash register,
pledging no.
We felt it was better just
to tell them not to worry, Mr.
Wu said.
For Entrepreneur, a New Ordeal Looms
BY MARGOT PATRICK
AND JENNY STRASBURG
LONDONLars Windhorst,
onetime German entrepre-
neurial whiz kid, has twice
bounced back from bank-
ruptcy, with the help of high-
profile investors in the U.S.
and Europe.
Now, Mr. Windhorst is on
the edge again. His Sapinda
Group, an eclectic collection of
startups, is selling assets after
running out of cash and get-
ting sued by several creditors.
Can Mr. Windhorst, 40
years old, rebound a third
time?
In an interview, he said
most of the lawsuits have been
settled and Sapinda still has a
very loyal following.
THE WALL STREET JOURNAL. Monday, March 27, 2017 | B1
Gold 1248.20 0.10% WTI crude 47.97 0.57% German Bund yield 0.406% 10-Year Treasury yield 2.396%
with pledges to cut a total of OPEC has said non-OPEC
Big Group
In Europe
558,000 barrels a day. producers have been even
Seeks Exit
YASSER AL-ZAYYAT/AGENCE FRANCE-PRESSE/GETTY IMAGES
But oil prices have fallen less compliant. Russia, which
in recent weeks as doubts pledged 300,000 barrels a
grow among oil traders that
OPECs cuts are enough to
bring a vast oversupply of
day in cuts, has delivered
only about a third of that, ac-
cording to the International
From Steel
petroleum back in line with Energy Agency. Russia has BY CHRISTOPHER ALESSI
demand. On Friday, the price said it would reduce its out-
of Brent, the international put gradually this year. FRANKFURTThe boss of
benchmark, was at $50.80 a Saudi Arabia, OPECs big- Thyssenkrupp AG is finally on
barrel, while West Texas In- gest producer, has picked up the brink of putting steel in
termediate, its U.S. equiva- the slack, cutting about the German companys past
lent, settled at $47.97. 800,000 barrels a dayfar if he can sever ties with its
Overall, OPEC has cut 94% more than the 486,000 bar- European steel legacy.
of its target of 1.2 million rels a day it promised. But The storied industrial com-
barrels a day, but individual the kingdoms energy minis- pany, which traces its roots to
countries have fallen short of ter, Khalid al-Falih, has said the early 19th century, took a
their pledges. The United Please see OPEC page B2 big step away from its once-
Nov. 30, and those gains were Arab Emirates, for instance, core steel business when it un-
has pledged to cut 139,000  Low price of crude prods Gulf expectedly announced late last
outside the cartel, including barrels a day but in February nations to borrow .................. B7 month the sale of the last of
Russia, the worlds largest had only reached 87,000 bar-  Oil investors tap a deep well its beleaguered steel assets in
producOper, joined the effort rels a day of cuts. of cash........................................... B7 the Americas, a Brazilian
plant. The deal, flagged by The
Wall Street Journal in Octo-
ber, is the most concrete sign
to date that Chief Executive
Heinrich Hiesinger is driving
forward the companys trans-
formation from staid steel gi-
ant into a lean capital-goods
operation.
Investors are watching to
see whether Mr. Hiesinger can
deliver on the next part of his
strategy: separating Thyssenk-
rupps European steel busi-
ness. That unit has been
Thyssenkrupp faces
a protracted steel glut
and inexpensive
imports from China.
squeezed by a protracted steel
glut and inexpensive steel im-
ports from China, amid con-
solidation in the industry.
Mr. Hiesinger has said he
wants to remake Thyssenk-
rupp around high-margin capi-
tal goods such as elevators,
sophisticated car components
and submarines. But his ef-
forts to get rid of the Brazilian
plant were long thwarted by
KIM KYUNG-HOON/REUTERS
challenging market conditions
in that region.
The company plans to sell
the plant to Ternium SA, a
Luxembourg-based steel pro-
ducer with a strong presence
in Latin America, for 1.26 bil-
lion ($1.36 billion). The trans-
action would result in a 900
Such worries arent going farmhouse is heated from an say theyre needed as part of million write-down, but would
away soon. oven that burns dried cobs broad reforms to boost har- also reduce the companys
The opposition to geneti- from the field. There could be vests and avoid more imports. roughly 3.5 billion in net
cally altered food and grains in problems with the foods You dont bring Syngenta debt by 1.5 billion.
China has been brought to the safety, so if thats the case we to China and leave biotechnol- Folks in the market
forefront by China National wouldnt dare use it. ogy out, said William Niebur, thought [the plant] would be
Chemical Corp.s $43 billion Fear of genetically modified president of Origin Agritech an overhang and realize very
deal to buy Swiss agro-giant grains stems in part from wide Ltd., a Nasdaq-listed seed re- little value, said F. David Se-
Syngenta AG, a leading pro- distrust of Chinas food indus- search company. gal, a portfolio manager at
ducer of genetically engineered try, where scandals killed or That may be the plan, but Franklin Mutual Series, a
seeds. The ChemChina deal sickened thousands. In one of its complicated by resistance Thyssenkrupp shareholder.
would be by far Chinas big- the worst, tainted milk and in rural communities like Zha- The fact that they were
gest-ever foreign acquisition. baby formula sickened nearly odong in Chinas northern Hei- able to get what appears to be
While China doesnt cur- 300,000 children, and killed longjiang province. The re- good value earlier than antici-
rently allow planting of such six, in 2008. gionon the border with pated allows all stakeholders
seeds for grains like soybeans, The U.S. government, the Russialooks like Iowa with its to focus on the future of Thys-
many in the agriculture busi- National Academies of Sci- fields of corn and soybeans. Its senkrupp when its out of the
ness expect that to gradually ences, Engineering and Medi- farmers produced 10% of steel business, Mr. Segal said.
change once the Syngenta ac- cine, and even some Chinese Chinas total grains last year, European steelmakers have
quisition clears regulatory hur- leaders say GMO crops are more than any other province, shed thousands of jobs and
dles, expected later this year. safe. Such products have be- according to government data. closed unprofitable plants in
Any changes could face re- come common in the U.S. and Mr. Li and many others recent years. After hitting all-
sistance from local farmers and other countries. want China to continue to bar time lows in early 2016, steel
other Chinese. All we know is Proponents say the high- growing genetically modified prices have since started to
that its not natural, said Li tech seeds boost farm yieldsa staples. Currently China only rally, helped in part by moder-
Shubin, who grows corn on his priority for the government as allows planting genetically Please see STEEL page B2
familys 3-acre plot in Changfu it looks to feed a billion-plus modified cotton and papaya,
village, near Zhaodong. His population. Industry executives Please see SEEDS page B2
INSIDE
We have made a lot of next company, a predecessor 2010 was a fresh start for Mr.
money for ourselves and oth- to Sapinda, failed in the finan- Windhorst. He hired financier
ers, he said. Many people cial crisis. Roland Berger and former
MEI-CHUN JAU FOR THE WALL STREET JOURNAL
are fascinated by the story Setting up in London in Thyssenkrupp AG Chief Execu-
that we present. tive Edwin Eichler. He spoke
Buying or building startups, of restoring his reputation and
Sapinda has a dozen invest- won new supporters such as
ments as varied as a Califor- Peter Mandelson, a former
nia-based e-sports streaming U.K. government minister.
platform, a German medical With the new respectability,
robot maker and a Kazakhstan Mr. Windhorst cultivated a
KLAUS-DIETMAR GABBERT/DPA/ZUMA PRESS
oil company. Many are unprof- network of private bankers,
itable, according to public fil- brokers and fund managers to
ings and people familiar with buy bonds issued by Sapinda
the portfolio. and its companies. Hes very
After dropping out of high charismatic, said Gavin Laun-
school, Mr. Windhorst began
importing Chinese electronics.
der, a fund manager with Le-
gal & General Investment
MALL REITS
That made him an emblem of Management. TAKE A TUMBLE
German innovation, before he
and the company went bust in
A few years ago, Mr. Laun-
der bought more than 1 mil-
IN THE U.S.
the dot-com crash in the early lion ($1.25 million) of shares
part of the last decade. His Sapindas Lars Windhorst Please see INVEST page B2 MARKETS, B8
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B2 | Monday, March 27, 2017
INDEX TO BUSINESSES
These indexes cite notable references to most parent companies and businesspeople
in todays edition. Articles on regional page inserts arent cited in these indexes.
A
Abu Dhabi National
Oil.............................B7
Alphabet...........A4,B2,B4
Amazon.com..........B1,B8
AMC Entertainment
Holding......................A2
Anadarko Petroleum...B7
Apple...........................B4
B Kayne Anderson Capital
Bank of America.........B5
Barclays.......................B5
BMW ........................... B8
C Ternium.......................B1
Capital One Financial.B5
Carlyle Group..............B3
CBL & Associates
Properties.................B8
Centennial Resource
Development.............B7
China National
Chemical..................B1
CMA CGM....................B3
CreditCards.com..........B5
Credit Suisse
Group..................B5,B8
INDEX TO PEOPLE
B M
Berger, Roland............B1
C-D
Crowe, Scott...............B8
Durkay, Laurel.............B8
H R
Hiesinger, Heinrich.....B1
Hofmann, Alex............B4
L Schmidt, Craig ............ B8
Launder, Gavin............B1
Gene Pool
The worlds biggest agriculture companies believe genetically
modied seeds could help boost harvests in China, where yields trail
those in the U.S.
CORN
Yield
12,000 kilograms a hectare
10,000
8,000
6,000
4,000
2,000
2000
Genetically engineered seeds, share of total U.S. plantings
100%
80
60
40
20
0 0
2000
Sources: United Nations Food and Agriculture Organization (yield);
United States Department of Agriculture (plantings)
SEEDS
Continued from the prior page
but allows imports of some ge-
netically modified grains.
A survey in Heilongjiang
last year found over 90% of re-
spondents opposed genetically
modified crops. A nationwide
poll by a government think
tank found less than 20%
would eat genetically modified
food, commonly known as
GMOs.
Even some farmers in Zha-
odongwho could end up with
higher yields and incomes by
using genetically modified
seedssay theyre wary about
safety.
For years, China has been an
elusive Holy Grail for the
global seed industry. While
Western giants including Syn-
genta, DuPont Co. and Mon-
santo Co. are active in the
worlds most populous country,
the restrictions on genetically
modified seeds make it harder
to set themselves apart from
local competitors. Chinas seed
market has been valued as high
as $17 billiona tantalizing
market that could help the
Swiss company grow its nearly
$13 billion in annual sales.
Chinas seed industry is dif-
fuse and highly competitive,
agriculture executives say, with
thousands of small companies
vying to sell to farmers. Intro-
ducing high-tech foreign seeds
would likely squeeze many of
them out of business, and
many will likely fight to keep
the status quo.
Chinese government offi-
cials appear mindful of the
need to turn around public
opinion. Asked about GMO
grains at a media briefing this
month, vice minister of agricul-
OPEC
Continued from the prior page
it wont support free riders
indefinitely.
OPEC said its compliance
committee will meet again in
late April and make a recom-
D-G
Daimler........................B8
Deutsche Bank............B5
Facebook................A4,B2
GameStop....................B8
Riverstone Holdings...B7
Rosen Consulting
Group.......................A7
Royal Dutch Shell.......B3
S
Google....................A4,B2
Sapinda Holding..........B2
J-K
Sears Holdings............B8
J.C. Penney..................B8
Johnson Controls........B3 Shenzhen Baili
Marketing Services..B4
J.P. Morgan Chase......B5
Silver Run
Advisors....................B7 Acquisition................B7
M Syngenta.....................B1
Macy's.........................B8 T investigators in securing ap-
Musical.ly....................B4
N-O
Tesla............................B8
Netflix.........................A1
Thyssenkrupp..............B1
Northern Trust............B5
Time Warner.........A1,A2
Occidental Petroleum.B7
P U
Pennsylvania Real Uber Technologies ...... B4
Estate Investment UBS Group...................B5
Trust..........................B8
U.S. Bancorp ............... B5
PNC Financial Services
Group.........................B5 W the regulator leveled charges
R Washington Prime
Regal Entertainment Group.........................B8
Group ........................ A2 Wells Fargo.................B5
Sideman, Adi...............B4
Mandelson, Peter ....... B1
T
O-P
Orhan, Ben..................B2 Thoma, Georg ............. B2
Papa, Mark..................B7 V-W
Vestager, Margrethe .. B2
Rosenfeld, Seth..........B2
Windhorst, Lars..........B1
S trust regulator, was scrutiniz-
Z ing instances in which com-
Schnure, Calvin...........B8 Zhu, Alex.....................B4
SOYBEAN
3,500 kilograms a hectare
U.S. U.S.
3,000
2,500
2,000
China
1,500 China
1,000
2010 2000 2010
100%
80
60
40
20
2010 2000 2010
THE WALL STREET JOURNAL.
ture Zhang Taolin said in prin-
ciple the government believed
they were safe, but didnt give
a timeline for when theyd be
grown domestically.
In a statement, Syngenta
noted that Chinas government
endorsed significant research
into GMO, and viewed it as a
key part of modernizing
Chinas farms.
Agricultural biotechnology
can improve productivity, se-
cure yields and improve quality
of crops while minimizing the
environmental impact of their
production, the company said.
ChemChina didnt reply to
requests for comment.
Jian Wu, China business di-
rector at DuPonts seed devel-
opment unit, said altering per-
ceptions on GMO could take
years.
In earlier years, the govern-
ment didnt do a good job to
educate the general public
about the real benefits of
GMO, he said.
All that means more sales
for Zhang Xiufang, who makes
cooking oil from non-GMO soy-
beans at her home near Zha-
odong. Over the past decade,
she gained a following for her
fragrant soybean oil. Custom-
ers drive two hours from the
provincial capital of Harbin to
fill their jerrycans, preferring
what they see as her more nat-
ural oil to the mass-produced
types, which may include im-
ported GMO soybeans, sold at
Chinese groceries, she said.
Sensing opportunity, her
family bought new equipment
to increase production, hired
workers, and registered a
brand name.
The people all like it, she
said of her oil. They think its
healthier this way.
Yang Jie
contributed to this article.
mendation to the cartel about
whether the cuts need to be
extended for another six
months. That decision will of-
ficially be made on May 25,
and Mr. Falih and other OPEC
officials have said they wont
decide on cuts until they have
fresh data on the vast
amounts of oil now in stor-
EU Reviews Past Mergers
BY NATALIA DROZDIAK
BRUSSELSThe European
Unions antitrust chief
said Friday that her depart-
ment is reviewing a handful of
recent merger clearances on
suspicions companies misled
proval.
The unusual reassessment
could lead to formal charges
and ultimately significant
fines for the companies or
though highly unlikely and
complicatedwithdrawal of
clearances.
In similar circumstances,
in December against Face-
book Inc. In that case, the EU
accused the social-media com-
pany of giving incorrect or
misleading information to reg-
ulators reviewing its planned
purchase of chat app Whats-
App in 2014. Facebook said it
provided accurate information
to the EU about its plans and
technical capabilities.
In an interview, Margrethe
Vestager said the European
Commission, the EUs anti-
pany representatives from a
range of industries intention-
ally or negligently misin-
formed regulators studying
proposed mergers.
In each and every individ-
ual casewe need correct in-
formation, in order to have
the very high quality of our
casework that we want to
have, Ms. Vestager said. We
have found in more than one
case that there was a case of
INVEST
Continued from the prior page
in Sequa Petroleum NV, a Sap-
inda-controlled oil explorer
that bought drilling rights in a
Kazakh field but didnt find
any oil. In February, Sequa
wrote off the project. Mr.
Launder said his investment
was down about 90%.
Clearly, its not been a
great experience, he said.
By 2014, Mr. Windhorst was
sending his private jet to pick
people up for business meet-
ings. If an investor became
concerned about a Sapinda
company stock or bond, Mr.
Windhorst would fly them by
helicopter to the yacht to talk
it over, said a former investor
who took such a trip.
Then, last year, a Sapinda
funding vehicle was six weeks
late making an interest pay-
ment. Cash that Sapinda com-
mitted to companies never
STEEL
Continued from the prior page
ating competition and plant
closings, experts say.
The steel industry is now a
global industry and to [com-
pete in] that you need size,
said Ben Orhan, a steel expert
at IHS Markit Ltd.
Thyssenkrupp has been in
talks with Tata Steel Ltd. of
India for roughly two years to
form a European flat-steel-
products joint venture that
would allow the German com-
pany to untangle steel from its
capital-goods operations. But
the potential deal has stalled
in part over a dispute regard-
ing pension obligations.
Mr. Orhan said a tie-up be-
tween Thyssenkrupp and Tata
makes perfect sense, but the
companies could lose their
window of opportunity.
The longer it sits, the less
likely it becomes, Mr. Orhan
said.
A Tata representative said
the company continues to be
engaged in constructive dis-
cussions with Thyssenkrupp
on a tie-up.
Mr. Hiesinger declined to
comment. Thyssenkrupp has
said that consolidation in the
European steel industry is
necessary, and that it is in
talks with Tata and others.
If Thyssenkrupp is ever go-
ing to be seen by investors as
a lucrative capital-goods en-
agea proxy for the scale of
the global glut.
OPEC officials have said
they want stored oil levels to
fall by about 300 million bar-
rels. Instead, U.S. inventories
have been rising, a trend that
has pushed oil prices down.
OPEC Secretary-General
Mohammad Barkindo blamed
BUSINESS & FINANCE
Margrethe Vestager said European Commission is studying whether regulators received bad information.
misleading information.
The EU declined to identify
the companies under the mi-
croscope but indicated the
cases involve merger reviews
that took place within the past
five years. The commissioner
said the EU was still deciding
whether to file formal accusa-
tions outlined in what is called
a statement of objections.
If found guilty in such
cases, companies face fines of
up to 1% of global revenue. In
an unlikely scenario, the EU
could also revoke its clearance
of the merger if more accurate
information could have led to
a different decision.
The EU has already said its
case against Facebook wont
turned up, according to people
who work at the firms. Mr.
Windhorst said he wasnt
overly concerned about the
delays right away, because he
was close to landing 1 billion
($1.08 billion) in funding from
an investment company of
Sheik Sultan bin Khalifa Bin
Zayed Al Nahyan, the eldest
son of the United Arab Emir-
ates president.
To tide the group over, Mr.
Windhorst took loans against
Sapinda securities he owned.
Last year, he and Sapinda
were hit by four lawsuits al-
leging he failed to repay the
money, including a 60 million
claim from a company of Len
Blavatnik, a Ukraine-born in-
dustrialist and early supporter
of Mr. Windhorst. A settle-
ment with the Blavatnik com-
pany for the full amount was
announced in January.
A spokesman for the Blav-
atnik company declined to
comment.
The transactions rang
Sidelining Steel
Thyssenkrupp's plan to sell its Steel Americas unit is part of a broader effort
to reshape the company around lucrative capital goods like elevators.
Revenue breakdown, in billions
Materials
Services
FY 2016 11.89
FY 2018 forecast 12.71
Note: Fiscal years end Sept. 30
terprise rather than a slow-
growing steel dinosaur, it
would have to secure a deal
with Tata soon, according to
investors.
Mr. Hiesinger would have to
show he can get that across
the finish line, said Franklin
Mutuals Mr. Segal.
A deal with Tata or a
spinoff of the European steel
business would likely mean
the gap with peers should
close and the market should
focus on Thyssenkrupp as a
capital-goods company, Mr.
Segal said.
Thyssenkrupp posted total
sales of 39.29 billion and net
profit of 296 million in fiscal
2016. Its elevator business
the crown jewel of its capital-
goods businessesdelivered a
profit margin of 11%, com-
pared with a margin of 5.7% at
Steel Europe and a loss at
Steel Americas.
We are now more indepen-
low seasonal demand for the
high inventory levels. He also
acknowledged that big oil pro-
ducers pumped flat out in the
last months of 2016 just be-
fore cutting, increasing supply
by 2.3 million barrels a day
when demand went up only
200,000 barrels a day.
This supply growth is now
THE WALL STREET JOURNAL.
affect its clearance of the
WhatsApp deal, which closed
in 2014.
The commission suspects
Facebook inaccurately claimed
during the review in 2014 that
it couldnt routinely match
Facebook and WhatsApp user
accountssomething the com-
pany started doing two years
later when it began combining
user data across the ser-
vices. The antitrust regulator
is currently analyzing Face-
books response to the accusa-
tions, Ms. Vestager said.
Such cases are rare in Eu-
rope given the threat of fines
and other sanctions. Lawyers
representing companies in the
merger-review process can
alarm bells for some people
close to Mr. Windhorst. In
2009, he had been charged in
Germany for allegedly de-
frauding an investor over a
loan backed by securities in
his then-insolvent company.
Mr. Windhorst, threatened
Last year, a Sapinda
funding vehicle was
six weeks late making
an interest payment.
with a prison sentence, admit-
ted to a lesser breach-of-trust
offense, paid 3.5 million and
received a years probation.
That same year, a U.S.
hedge fund claimed Mr. Wind-
horst manipulated a Utah
companys share price. Mr.
Windhorst disputed the allega-
tion, and a New York civil case
was dismissed. In 2010, he
Steel Elevator Components
Europe Technology Technology
7.63 7.47 6.81
8.85 8.17
Source: Jefferies
dent from fluctuations in the
steel market, Mr. Hiesinger
said after the announcement
of the Brazilian plant sale. Af-
ter the deal, expected to close
by October, Thyssenkrupp will
generate roughly 75% of sales
from capital goods, Mr.
Hiesinger said.
Since Thyssenkrupp hired
Mr. Hiesinger in 2011 after
corruption scandals and years
of stagnation, the Siemens AG
veteran has steered the com-
pany back to a fragile profit-
ability. One of his initial moves
was to sell Thyssenkrupps Al-
abama steel-rolling and coat-
ing plant for $1.55 billion to a
consortium of ArcelorMittal
SA and Nippon Steel Sumi-
tomo Metal Corp., improving
the balance sheet and shifting
investment to capital goods.
The expected sale of the
Brazil plant sets the stage for
a successful re-rating of the
company based on its capital-
working its way through the
system. It will take time for
the market to fully absorb,
Mr. Barkindo said in a speech
in Kuwait released by OPEC.
He said OPEC members
needed to fully implement
their production cuts to coun-
ter the trends pushing prices
down. We expect 100% con-
OLIVIER HOSLET/EUROPEAN PRESSPHOTO AGENCY
also be stripped of their li-
censes to practice law if they
are found to have intention-
ally misled regulators. The EU
said that prior to the Face-
book case it hadnt pursued
such action since new rules
that boosted fines came into
effect in 2004.
Ms. Vestager said the com-
mission over the past year
looked at several cases involv-
ing misleading information,
but that they wouldnt all nec-
essarily be formally opened or
decided upon as a package.
We have to respect the
flow of each individual case,
even in these areas where its
procedural concerns that we
have, she said.
paid 1 million to settle a Ger-
man banks suit alleging un-
paid securities transactions in
the Utah company and others.
Some senior advisers are
gone, including Mr. Berger,
who continues to be a share-
holder in the groups main
holding company, and Mr.
Mandelson, who left his paid
role in September. Both men
declined to comment.
In October, Mr. Eichler
stepped down as Sapinda
Holding CEO after clashing
with Mr. Windhorst over strat-
egy and spending, according
to people familiar with their
relationship. Mr. Eichler said
his three-year contract ended,
and that Mr. Windhorst is a
great entrepreneur.
In November, the deal with
the sheik fell apart. The
sheiks company didnt re-
spond to a request for com-
ment. Mr. Windhorst instead
raised 200 million in January
at a double-digit-percentage
interest rate.
Steel
Industrial Americas Corporate
Solutions 1.49 0.26
Total:
5.74 41.28
0.23
7.45 5.91 43.31
THE WALL STREET JOURNAL.
goods businesses, said Seth
Rosenfeld, an analyst at Jef-
feries LLC.
But it is unclear whether in-
vestors will value Thyssenk-
rupp on par with profitable
capital-goods companies such
as German peer Siemens.
One of the big problems of
Thyssenkrupp is that it
doesnt generate any free cash
flow, and the last quarter was
again a huge disaster in terms
of cash flow, said Jrg
Schneider, a portfolio manager
at Thyssenkrupp shareholder
Union Investment.
Free cash flow for the first
quarter of fiscal 2017, ending
Dec. 31, came in at a loss of
1.7 billion, which the com-
pany attributed to a tempo-
rary increase in net working
capital. And because of that
Im not willing to give them a
multiple like a traditional cap-
ital-goods company, Mr.
Schneider said.
formity, Mr. Barkindo said.
Mr. Almarzooq of Kuwait
said OPECs cuts could bring
the oil market back into bal-
ance by this summer or early
fall, though he warned that if
members didnt all work to-
gether toward a common
objective...this date may be
pushed further out.
 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Monday, March 27, 2017 | B3

BUSINESS NEWS

Greece Receives Port Bids

Proceeds from sale Link (a subsidiary of CMA Dockworkers oppose the sale,
CGM) and Russian-Greek in- saying it reduces the value of
could provide revenue vestor Ivan Savvidiss group. the port.
to help pay back Greece had given investors Last summer, Greece com-
until March 24 to submit bind- pleted the sale of a 67% stake
international creditors ing bids for a 67% stake in the in the port of Piraeus, the
VICTOR J. BLUE/BLOOMBERG NEWS

port. The submissions were countrys largest, to Chinese

BY NEKTARIA STAMOULI made at Morgan Stanley in shipping company China Cosco

ATHENSGreece has re-
ceived three binding bids for a
majority stake in its second-
largest port in Thessaloniki,
the state privatizations agency
said on Saturday, as the coun-
CEO Alex Molinarolis September compensation was $46.4 million. try tries to privatize parts of
its infrastructure to meet bail-
ALEXANDROS AVRAMIDIS/REUTERS
London on Friday. Revenues Holding Co. for 368.5 million.
from the sale and other priva- Without the billions pen-
tizations are a key part of the ciled in from asset sales,
countrys continuing 86 bil- Greece would need to tap more
lion ($92.77 billion) bailout loans and eventually would
deal with the European Union need further debt relief.
and the International Mone- But the loans are also vital
tary Fund. for overcoming investors
Apart from the price it has yearslong aversion to putting

Johnson Controls out terms.

The offers came from Phil-
ippines-based International
to pay for the majority stake,
the preferred bidder will have
to implement investments of
Greeces port in Thessaloniki

workers.
money into Greece and bring-
ing down a 23% unemployment
rate.

Keeps Mum on Pay

BY THEO FRANCIS
Johnson Controls wont say
how much it paid its chief exec-
utive for 11 of the months he
ran the publicly traded com-
pany last fiscal year, taking ad-
vantage of a loophole in pay-
disclosure regulations.
Alex Molinaroli, who has
been CEO of Johnson Controls
since 2013 and an employee
since 1983, received $46.4 mil-
lion in compensation from
Sept. 2 to Sept. 30, according
to documents recently filed
with the U.S. Securities and Ex-
change Commission. The docu-
ments omit what he made for
the rest of the companys fiscal
year.
Johnson Controls Inc.
merged with Tyco Interna-
tional PLC on Sept. 2, creating
a conglomerate renamed John-
son Controls International PLC
that sells everything from
smoke alarms to car batteries.
The SEC doesnt require a
company to disclose what its
top executives were paid by a
firm before it disappears or be-
comes a subsidiary in a merger.
SEC rules do not call for
the company to file additional
information about Mr. Molin-
arolis compensation before the
merger with Tyco, which we
did not, spokesman Fraser
Engerman wrote in an email.
All SEC guidelines were fol-
lowed in the formation of our
proxy.
In the merger, the old John-
son Controls became a subsid-
iary of Tyco, which then took
the Johnson Controls name and
stock symbol. However, for ac-
counting purposes, securities
filings note, the old Johnson
Controls was considered the
acquirer.
In the interest of transpar-
ency, it seems like youd want
to disclose, even though you
dont have to, said David
Larcker, director of Stanford
Universitys Corporate Gover-
nance Research Initiative.
The value of premerger pay
also wasnt disclosed for three
other executives making the
transition from the old Johnson
Controls to the new one, com-
pany filings show.
Attorneys who handle com-
pensation and pay disclosure
for large companies say such
omissions are uncommon but
not unheard of. SEC staff have
endorsed the approach in guid-
ance provided to companies for
Container Terminal Services; at least 180 million within Conflicting interests in the The country must raise
Dubai-based Peninsular and seven years. Greek government have some 6 billion through the
Oriental Stream Navigation The sale of Thessaloniki threatened to derail attempts sale of state-controlled assets
Co. (DP World); and a consor- Port began in July 2014 but to sell state assets to pay by 2018, according to the
tium comprising German pri- has been delayed several times down debt and bring in for- terms of its third bailout
a decade. The SEC declined to vate-equity firm Deutsche In- because of political resistance eign investment, a key ele- agreement with creditors
comment. vest Equity Partners, Terminal and waves of strikes by port ment of Greeces bailout plan. reached in 2015.
Essentially, the rules pro-
vide that if you are an execu-
tive at an acquired company
and your company goes away
in the transaction, the compen-
sation that was paid to you by
your original company, it just
evaporates, said Mark Borges,
a pay consultant with Compen-
sia Inc. and a former special
counsel in the SEC division that
polices corporate disclosure.
In recent years, other com-
panies going through big merg-
ers also have left pre-transac-
tion compensation undisclosed.
That list includes United Conti-
nental Holdings Inc. in 2010
and Office Depot Inc., which
bought OfficeMax in 2013. A
United spokeswoman said the
company followed SEC report-
ing requirements. Office Depot
The complexity of
declined to comment.
Compensation consultants
and former SEC officials say
the approach is rooted in the
global currencies evolved 12-fold
idea that the proxy is intended
to reflect decisions by the con-
tinuing companys boardan over the last decade.
acquired companys directors
are no longer the ones under
scrutiny. None of the members
The foreign exchange market is the largest and most liquid in the world
of the compensation committee
at the old Johnson Controls, for and also the most deeply intertwined. In fact, there are currently more than
example, now sit on the com- 1,300 potential currency pairings. That shared opportunity also presents
bined companys pay commit-
tee.
shared risks. CME Group offers products designed to manage those risks
But some say that doesnt across currencies. This is how individuals and institutions can navigate an
justify giving incomplete pay increasingly interconnected and ever-changing global marketplace. This
figures, and leaving investors
unsure how much has been is how the world advances. Learn more at cmegroup.com/finance.
omitted. The immediate ques-
tion is, what are you trying to
hide, and why are you trying to
hide it? said Nell Minow, a
longtime corporate-governance
advocate.
The pay Johnson Controls
disclosed for Mr. Molinaroli in-
cludes $27 million in stock
awards, $5.4 million in cash in-
centive payments, and a $13.1
million payout of his balance
from a deferred-compensation
plan. Much of it was tied to the
merger and paid out after it
closed.
Mr. Engerman said investors
could look up Mr. Molinarolis
2015 salary in an earlier securi-
ties filing to calculate that por-
tion of his premerger 2016 pay,
and could identify equity
awards made during fiscal 2016
using vesting and expiration
dates listed in tables in the cur-
rent proxy. Johnson Controls
doesnt provide values for
those awards.

BUSINESS WATCH
SHELL
Carlyle Buys Gabon
Onshore Interests
Oil major Royal Dutch Shell
PLC said Friday it is selling its
Gabon onshore interests for up
to $737 million as part of its
continuing drive to reduce debt.
The assets are being bought
by Assala Energy Holdings Ltd., a
portfolio company belonging to
Carlyle Group LP, for an initial
$587 million. The payment of a
further $150 million depends on
production performance and
commodity prices, Shell said,
adding that Carlyle will also take
on debt of $285 million. The
deal is expected to close
mid-2017.
Ian Walker
SINOPEC
Company to Raise
Capital Spending
China Petroleum & Chemical
Corp. said Sunday it planned to
raise capital expenditures this
year by as much as 44% after
reporting higher annual profit
due to strong refining and petro-
chemicals performances.
The company, also known as
Sinopec, reported net profit of
46.67 billion yuan ($6.79 billion)
for 2016, up 44% from a year
earlier. The company said operat-
ing revenue fell more than 4% to
1.93 trillion yuan, according to a
statement filed with the Hong
Kong stock exchange. Combined
oil and gas production fell 8.6%
last year to 431 million barrels of
oil equivalent.
Brian Spegele
LOTTE GROUP
Chairman Revives
Plan for Hotel IPO
Lotte Groups chairman said
he would revive plans for an ini-
tial public offering after next
year, as he attempts to restruc-
ture one of South Koreas most
complex business empires.
Shin Dong-bin, whose con-
glomerate spans interests in
chemicals, hotels, hamburgers
and duty-free stores, has been
under pressure from regulators
to untangle the business after
wresting control of it from his
father and older brother in 2015.
Last year, Mr. Shin pursued an CME Group is a trademark of CME Group Inc. The Globe logo is a trademark of Chicago Mercantile Exchange Inc. All other trademarks are the property of their respective owners.
Copyright 2017 CME Group. All rights reserved.
IPO for Hotel Lotte Inc. The plan
was scrapped amid an investiga-
tion into corruption at the group.
Jonathan Cheng
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B4 | Monday, March 27, 2017 THE WALL STREET JOURNAL.

TECHNOLOGY WSJ.com/Tech

Live Streams Grab U.S. Spotlight Uber

BY HANNAH KARP
Halts
Testing for
When Boston high-school
student Alex Pace wanted to
Self-Drive
connect with one of her favor-
ite up-and-coming musicians,
she recently tuned in his live
Program
daily after-school broadcast on BY GREG BENSINGER
her smartphone, watched for
10 minutes or soand then Uber Technologies Inc.
gave him a virtual-currency tip said on Saturday it is suspend-
of several dollars in birthday ing testing of its autonomous
money. vehicles after one of the autos
That prompted the aspiring was involved in an accident in
pop singer and comedian Zach Tempe, Ariz., a dramatic halt
Clayton to put on a wig and to one of the most high-profile
lipstick and show off some of self-driving programs.
his dance moves, while thank- The ride-hailing company is
ing Alex and friends by their pulling vehicles from streets
user names. in Pittsburgh, Tempe and Cali-
He really connected with fornia while it investigates the
MICHAEL BEZJIAN/GETTY IMAGES

us, said 16-year-old Alex. incident in which a Volvo

The burgeoning live-stream XC90 sport-utility vehicle op-
economy is a potentially lucra- erated by Uber was upended.
tive gig for newcomers to the Tempe Police Sgt. Josie
music industrywhere now Montenegro said the Uber ve-
even established acts earn far hicle wasnt responsible for
more from performing live the accident and that a regular
than from selling recordings. vehicle failed to yield. She said
Young music fans today The band Los 5 performed in November at the Los Angeles offices of Musical.ly Inc., owner of the Live.ly live-streaming app. no serious injuries were re-
dont buy many CDs or down- ported.
loads, but the rise of virtual tips, according to Musical.ly Last month, YouTube un- ing apps had because of its tie first album in the next few The Uber vehicle was in
tip jars is evidence some fans Inc., the owner of both Live.ly veiled a feature called Super to the Musical.ly app. months. self-driving mode with no cus-
are still willing to spend and an app for making music Chat where fans watching a Musical.ly, which launched Aaron Doh, a 22-year-old tomers on board when the in-
money on novel kinds of inter- videos called Musical.ly. live stream stand out from in 2014, has more than 50 mil- Los Angeles film producer, cident occurred. We are con-
actions with their favorite And in coming months, the the crowd and get a creators lion active monthly users, 40% says he earns $20,000 a tinuing to look into this
acts. makers of a popular Chinese attention, by purchasing of them in the U.S. Users pro- month doing live comedy on incident, a spokeswoman for
Zach Clayton, who is also 16 live-streaming app plan to of- brightly colored messages that duce and share music videos, Live.ly. He uses certain tip-en- Uber said.
and a resident of Austin, fer a U.S. version with a tip- stay at the top of the chat and get alerts when friends or hancing tactics during rou- Like many technology com-
Texas, said he earned more ping feature, according to peo- window for as long as five performers they follow are tines: He guests tippers, panies, including rival Alpha-
than $100,000 last year per- ple familiar with the matter. hours, driving extra revenue to broadcasting on Live.ly. The making their faces visible to bet Inc.s Waymo, Uber is in-
forming on a live-streaming One-third of the tips gener- the content creator. Its like Live.ly app doesnt disclose ex- other viewers. He recently vesting heavily in self-driving
app called YouNow. He is one ated using these apps goes to paying for that front-row seat actly how many users it has raked in about $50 in tips for vehicles with the belief they
of a growing number of per- Apple Inc. or Alphabet Inc., in the digital age, YouTubes beyond saying they they num- singing a smooth-pop rendi- will reduce fatalities and im-
formers who live on tips and which charge companies fees blog announcement said. ber in the millions. tion of Elvis Presleys Cant prove fuel and traffic effi-
gifts from online fans. for purchases made on apps Adi Sideman, founder of the Musical.ly Inc.s Mr. Hof- Help Falling in Love With ciency by limiting human er-
YouNow, a New York City- sold in their app stores. The YouNow app, said he noticed mann said the Musical.ly app You. ror.
based app founded six years lions share of the remaining the booming virtual-gifting plans to add virtual tips and Lauren Godwin, a 17-year-
ago and now with nearly 34 tip revenue goes to the con- economy in China when he gifts, as the Live.ly app has, old aspiring comedian, said
million registered users, said it tent creators; the Live.ly app launched his company in 2011. and the company plans to ex- she has earned more than
has dozens of personalities itself takes a small cut, accord- At the time, he wasnt sure periment with revenue models $50,000 so far this year on
The move came after
who earn six figures singing, ing to Alex Hofmann, Musi- whether this kind of cultural like corporate sponsorship and Live.ly and recently withdrew a self-driving Uber
cracking jokes and showcasing cal.ly Inc.s president for North behavior was going to trans- media-company partnerships. from her Houston high school
other talents. For many, their America. late to the West, he said. Live-streaming for tips isnt to focus on doing live streams
vehicle was involved
living rooms and bedrooms are Facebook Inc. has consid- We had our doubts, Mr. exactly glamorous work. Brent and meet-and-greets with in an accident.
their stages. YouNow uses hu- ered adding a tip jar to its live Sideman said. Morgan, a 29-year-old musi- fans; she has also enrolled in
man monitors and an auto- videos, according to people fa- Alex Zhu, Musical.ly Inc.s cian in Huntsville, Ala., broad- online classes. Her parents
mated system to detect and miliar with the process. Shanghai-based co-founder, casts twice a day on YouNow were initially concerned that
block users from broadcasting Live-streaming apps are a also was inspired by the popu- for a total of three hours a she needed to spend more But the technology is still
inappropriate, offensive or il- twist on Alphabets YouTube, larity in China of live-stream- day, playing guitar and other time on her homework, her many years from being ready.
legal activities. where popular performers post ing for tips when he decided instruments while writing cus- mother, DAnn Godwin, said. Uber, for instance, typically
At Live.ly, a rival app videos and earn revenue from last year to roll out Live.ly. In- tom jingles on the spot for big But after the money started puts two employees in each
launched in 2016, the top 20 advertising and sponsorship, dustry executives say the app tippers. He said he nets be- coming in, Ms. Godwin said, vehicle, one in the driver seat
content creators earn an aver- but until recently havent inter- was able to get more traction tween $15,000 and $20,000 a they realized: This is like a who can take control when
age of $31,000 a month in fan acted live with their fans much. in the U.S. than previous gift- month and plans to release his job. needed and another with a
computer to monitor the
autos efficacy. Customers

Apple Notches Win in China

could also hail the self-driving
cars in the test program, ac-
companied by Uber employees.

Over Patents for Its iPhones

Alphabets Waymo self-
driving car unit has logged
more than 2.5 million miles on
U.S. roadways, more than any
other company, though it
BEIJINGA Chinese court of Apples unique and innova- ing to top officials and pledg- hasnt opened them up yet for
has overturned a ruling against tive design, an Apple spokes- ing further investment in the regular customers.
Apple Inc. over iPhone patents, woman said in a written state- country. The Apple spokes- Waymo cars, which mostly
a win for the tech giant in one ment on Sunday. woman declined to say if Mr. cruise streets in and around
of its toughest markets. Bailis lawyer, Andy Yang of Cook had spoken with officials Alphabets hometown of
The Beijing IP Court ruled Beijing Wis & Weals, said Sun- about the suit during his visit. Mountain View, Calif., have re-
the iPhone 6 and iPhone 6 Plus day the decision would be ap- If Apple had lost its appeal, ported several minor accidents
dont infringe on patents for pealed. We think some of the it would have had minimal im- but most werent the fault of
exterior smartphone design facts ascertained by the Beijing mediate impact on its business, the self-driving vehicles. In
held by a defunct local manu- IP court are not accurate, so because it only covered older February, a Waymo car was at
facturer, Shenzhen Baili Mar- Baili is definitely going to con- iPhone models. But it could fault when it hit a bus, but the
keting Services Co. tinue to safeguard its legiti- have paved the way for further vehicles were traveling slowly
The court found Baili had no mate rights, he said. cases against Apples newer and no one was injured.
grounds to claim the exterior In May last year, the Beijing models. For Uber, the technology is
WANG DONGZHEN/XINHUA/ZUMA PRESS

designs were exclusive, and Intellectual Property Office China has been Apples considered essential for the
that it was easy for consumers granted Baili a sales injunction toughest market in recent $68 billion company to even-
to detect the differences, ac- in the capital city against the times, as local rivals eat into tually reach consistent profit-
cording to the verdict reported iPhone 6 and iPhone 6 Plus. its market share with lower- ability as it will eliminate the
by a newspaper supervised by The injunction was immedi- priced, high-spec devices. expense of paying legions of
Chinas Supreme Peoples ately suspended pending an Chinese internet giant Baidu drivers.
Court. appeal from Apple. Inc. was a major investor in Uber began testing the au-
Baili has been trying to The Beijing IP Courts deci- Baili in 2013, but has since dis- tonomous vehicles in Tempe
claim our work as their own sion on March 24 came shortly tanced itself from the com- last month after California reg-
and we thank the Beijing IP after Apple Chief Executive pany. ulators revoked the cars regis-
Court for recognizing the value Tim Cook visited China, speak- Eva Dou and Yang Jie A Beijing court ruled that Apple didnt infringe on a phone design. trations because the startup
failed to get a permit to oper-
ate them. Uber has since paid

MIMS claims to use artificial intelli-

gence to learn the market
dynamics behind every item
in a catalog. This system is
mallow merchant, is that the
customer isnt always getting
the absolute best price, espe-
cially compared with in-store
centage change in any given
price is likely to shrink, says
Victor Rosenman, chief exec-
utive and founder of Feedvi-
viewed say it is common for
Amazon to notice a product
category that does well and
begin selling it as well. Ama-
$150 to obtain a permit for
two vehicles in California. It
has been testing in Pittsburgh
since last September.
Continued from page B1 set it and forget it, says retail. But the point of Ama- sor. Just as in any other zon may even go further and Ubers autonomous vehicle
when someone runs out of Barry Lampert, one of Feed- zon, he adds, isnt to offer a market, the more sellers develop a house-branded program faces perhaps a big-
stock or a manufacturer falls visors customers and a consumer the absolute low- there are for an item, the version of a product. While ger test than a traffic accident.
behind, and sellers testing top-500 seller on Amazon. est price possible; its to of- less power any one has to af- the price of a pack of Dura- Alphabet has sued the ride-
consumers and each other The algorithm will often fer the lowest price possible fect its price. cell AAA batteries, for in- hailing company, alleging An-
with high and low prices. raise the price on items in a given the convenience that The rapid growth of Ama- stance, fluctuates from one thony Levandowski, a former
The vendor of the marsh- sellers catalog, to see if Amazon offers. Free ship- zons third-party seller pro- day to the next, the price of executive at Alphabets
mallows I wanted told me his other sellers will follow suit. ping, after all, isnt free for gram and the cutthroat com- Amazons own brand of AAAs Google, stole corporate secrets
high price was an attempt to The goal is to maximize sales the seller. petition Amazon encourages is stableand, as of this to found his self-driving big
bait competitors into raising while avoiding bidding wars As more sellers compete mean the mix of sellers on writing, costs almost half as rig company Otto, which was
their own asking prices for that can be a race to the bot- on Amazon, its possible Amazon has changed tre- much per battery. acquired by Uber last year.
the item. This works because tom. price volatility will increase. mendously since its incep- Mr. Lampert says he wor- Alphabet is seeking an in-
sellers of commodity items The result, said my marsh- At the same time, the per- tion, and will continue to ries every day about Amazon junction to halt Ubers use of
on Amazon are constantly change, says Mr. Kaziuknas. moving into his most lucra- the technology. Uber is ex-
monitoring and updating Initially, it was mostly sellers tive product categories, pected to respond on the in-
their prices, sometimes hun- Market Turbulence engaged in retail arbitrage which often happens. Thats junction in early April and re-
dreds of thousands of times Prices of everyday staples change so fast on some Amazon products buying things from actual one reason he maintains spond to Alphabets lawsuit
a day across thousands of that the activity can often resemble a stock during heavy trading. stores or wholesalers, then shops on other platforms, in- later in the month. Uber has
items, says Mr. Kaziuknas. selling them for a higher cluding those operated by said the claims are a baseless
Most use rules-based pric- The cost of a 20-pack of Duracell batteries price on Amazon. Later, bet- Amazon competitors eBay attempt to slow down a com-
ing systems, which simply $12 ter-organized resellers who and Wal-Marts Jet.com. petitor and that it would de-
seek to match competitors bought directly from manu- In the end, Amazon seems fends itself in court.
prices or beat them by some 11 facturers piled on. Now, to be fulfilling its promise of The Tempe accident is the
small fraction. If those sys- many resellers are feeling using its platform to lower latest setback for Uber, which in
tems get into bidding wars, squeezed out both by manu- prices while expanding the recent weeks has faced accusa-
10
items offered by only a few facturers, who are more than variety of items available to tions of permitting sexual ha-
sellers can suffer sudden ever selling through Amazon the customer. The question rassment and sexism in the
price collapsesflash 9 directly, and by bigger, tech- for its partners, however, workplace, a string of executive
crashes. savvier fellow merchants. should be whether or not departures and a rare apology
More sophisticated sys- 8 The most vigorous com- their own businesses may from Chief Executive Travis Ka-
tems for pricing are offered petitor to sellers on Amazon eventually be disrupted in lanick after an embarrassing
Nov. Dec. Jan. 2017 Feb. Mar.
by companies like New York is, in many cases, Amazon it- the name of customer ser- video leaked of him aggressively
City-based Feedvisor, which Source: Keepa THE WALL STREET JOURNAL. self. The merchants I inter- vice. confronting a driver.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
Issuers Quick to Waive Card Fees
Competition is driving
concessions lenders
are making on annual
credit-card levies
BY ANNAMARIA ANDRIOTIS
Annual credit-card fees
arent set in stone. In fact,
many people who ask their
card company for a break get
it.
More than 80% of people
who ask their card company
for relief from their annual
fees receive it, according to a
new survey. Most get the fee
waived entirely, while a
smaller portion receive a fee
reduction, according to
a CreditCards.com report re-
leased Monday that surveyed
about 950 card users.
Indeed, several large credit-
card lenders told The Wall
Street Journal that they of-
ten give in to such requests.
The card companies didnt
want to speak publicly about
their actions since that could
encourage more card holders
to ask for breaks on their fees.
Intense competition be-
tween credit-card issuers is
the main reason for this flexi-
bility on fees. Nearly every
Why the Trump Slump Stings Retail Investors
BY STEVEN RUSSOLILLO
When the S&P 500 fell
1.2% last Tuesday, individual
investors probably fared
even worse.
The drop made headlines
for several reasons. Not only
was it the biggest of the
year, but it
AHEAD OF also snapped
THE TAPE a streak of 109
trading days
without a 1%
decline, the longest span
since the first Clinton admin-
istration. In a market that
has churned higher since the
election without much get-
ting in the way, investors
shouldnt be fazed by the
first sign of volatility. The
problem is, they usually are.
Such attention to one-day
moves often triggers a rash
of irrational investor behav-
ior when retail investors
would almost always fare
better by ignoring the noise.
U.S. Regional Banks Pass Test of Bankruptcy Plans
BY RYAN TRACY
WASHINGTONU.S. regula-
tors gave 15 regional banks a
passing grade on their living
will plans for bankruptcy, a
victory for those firms that
demonstrates how their regu-
latory environment is signifi-
cantly less stressful than for
the largest U.S. banks.
The verdicts from the Fed-
eral Reserve and Federal De-
posit Insurance Corp. mean
the regional banksincluding
U.S. Bancorp, PNC Financial
Services Group Inc. and Capi-
tal One Financial Corp.have
for the moment satisfied regu-
lators that they have feasible
plans for going through bank-
ruptcy without needing a tax-
payer bailout.
The plans, known as living
wills, are required under the
2010 Dodd-Frank financial law.
The exercise is significant for
banks because if regulators
OM ASSET MANAGEMENT
HNA Group to Buy
24.9% of Company
A unit of HNA Group agreed
to acquire a stake in U.S. inves-
tor OM Asset Management, the
latest deal in the Chinese con-
glomerates ambitious global
buying spree.
HNA Capital U.S. plans to pay
about $446 million in cash in
two tranches, leaving the com-
pany with 24.9% of OM Asset
Management, an arm of U.K. in-
surer Old Mutual PLC.
HNA Group, whose domestic
interests range from hotels and
supermarkets to Hainan Airlines,
has turned to international mar-
kets for growth. The conglomer-
ate struck a deal last year for
Ingram Micro Inc., a U.S. com-
puter-logistics company. In Janu-
ary, it agreed, along with RON
Transatlantic EG, to buy a stake
Card issuers have been paying out more in rewards in an effort to boost card usage and revenues.
large bank is vying for more
market share in the credit-
card market.
To this end, card issuers
have been paying out more in
rewards in recent years in an
effort to boost card usage and
revenues. One of the biggest
appeals for lenders is the dou-
ble-digit interest rates that
History shows investors tend
to pile into the market when
it hits big, round numbers,
such as Dow 20000, but also
bail on stocks just as quickly
at the first sign of trouble.
For instance, investors
pulled nearly $8 billion from
U.S. equity funds in the week
after Brexit, one of the big-
ger weekly withdrawals of
2016, according to the In-
vestment Company Institute.
The S&P 500 fully recovered
from Brexit less than a
month later, with many of
those investors missing out
on the rebound and locking
in what should have been
just a temporary paper loss.
This is a big reason why
investors almost always un-
derperform the actual mar-
kets returns. Consider a
long-running study of inves-
tor returns by Dalbar, a fi-
nancial-research firm in Bos-
ton. It found the average
investor in U.S. stock mutual
dont approve of them, sanc-
tions such as higher capital re-
quirements or forced breakups
can be imposed. This is the
first time regulators have is-
sued a judgment about regional
banks plans. The firms will
have to continue submitting
PNC was one of 15 banks whose living wills were approved.
in hedge-fund investing firm
SkyBridge Capital from founder
Anthony Scaramucci, a surrogate
for U.S. President Donald Trump
who exited the business to help
secure a White House position.
And just last week, HNA agreed
to buy 245 Park Avenue, a New
York skyscraper, for $2.21 billion.
OM Asset Management over-
sees $240 billion in assets. The
business will add two HNA-nom-
inated directors to its board, Old
Mutual said on Saturday.
News of the agreement was
reported earlier by the Financial
Times.
Justin Baer
RESPONSIBLE INVESTING
State Street Offers
Screening Tools
Asset managers, pensions
and endowments will soon be
able to screen their invest-
FINANCE & MARKETS
many borrowers pay on card their payments and threaten
balances. to stop using the card or to
The willingness to bend on close it if the fee isnt waived,
annual fees, though, doesnt according to CreditCards.com
necessarily hold true for all and banks.
credit-card lenders. Some lenders say the an-
Among card users who ask nual fee can be waived as
for breaks on fees, those who soon as the first or second
have the best luck tend to be year of having the card. One
those who are on time with large lender said it has been
funds lost 2.3% in 2015, while
the S&P 500 was slightly Missing Out
positive that year, including Annual returns, average U.S.
dividends. Dalbar, which has equity mutual fund investor and
published this study each S&P 500
year since 1994, plans to re- Investor returns S&P 500
lease an updated version this
15%
week.
And 2015 wasnt an anom- 10
aly. The gap between inves- 5 backs tend to be the best
tors returns and the mar- 0 buying opportunities. Since
kets performance is even
5
wider over a longer time ho-
One Five 10
rizon. Equity-fund investors year years years
earned just 3.7% annually Note: Figures are as of Dec. 31, 2015.
over the past 30 years S&P 500 performance includes dividends
through 2015 compared with Source: Dalbar
a 10.4% annual return for the THE WALL STREET JOURNAL.
S&P 500.
Performances for market Investors are already at a
indexes and mutual funds are disadvantage due to poor
calculated from the begin- mutual-fund performance.
ning to the end of a measure- Only 19% of actively managed
ment period, but people equity funds outperformed
dont often invest in such lin- their respective benchmarks
ear fashion. Instead, they last year, according to Bank
buy and sell along the way of America Merrill Lynch.
depending on market condi- And investors propensity for
tions or even life events. buying high and selling low
updated plans in the future. to keep the firm operating
The one exception Friday during a bankruptcy. They re-
was Northern Trust Corp. quired the firm to address the
Regulators said they con- perceived shortcomings by the
cluded that firm has a num- end of this year.
ber of shortcomings in its liv- A Northern Trust spokes-
ing will, related to the funding man said the bank maintains
and internal services available a strong financial position
and has been making improve-
ments since it originally sub-
mitted its living will to regula-
tors.
The positive verdict for the
regional banks stands in con-
trast to outcomes for eight of
the largest U.S. banks, includ-
ing J.P. Morgan Chase & Co.
and Bank of America Corp.
VICTOR J. BLUE/BLOOMBERG NEWS
Those firms are much larger
and more complex than re-
gional banks and have had a
harder time persuading regu-
lators that they could fail
without taxpayer help.
In April 2016, the Fed and
FDIC concluded all eight of
those firms had shortcomings
in their plans and saw prob-
FINANCE WATCH
ments more easily for environ- meeting its strategic objectives.
mental, social and governance In its annual report, the bank
risks. said the boards compensation
The development is thanks committee acknowledged that
to State Street Corp., which is the 2016 financial results re-
launching a set of analytical flected a year of significant tran-
tools aimed at capitalizing on sition as well as a hefty settle-
the appetite for responsible in- ment with U.S. authorities
vesting. Many firms have made related to crisis-era mortgage-
similar strides to help investors backed securities.
tackle ESG exposure, but few Still, the business made gains
can harness as much data as in areas such as cutting costs and
State Street, whose custody
INTERNATIONAL INVESTMENT FUNDS
business safeguards $29 tril-
lion. Justin Baer Advertisement
CREDIT SUISSE
[ Search by company, category or country at europe.WSJ.com/funds ]
Bonus Pool Grows
Despite Loss at Bank
Credit Suisse Group AG in-
creased its bonus pool by 6% in
2016 to more than three billion
Swiss francs ($3 billion), despite Data as shown is for information purposes only. No offer is being made by
Morningstar, Ltd. or this publication. Funds shown arent registered with the
posting a sizable loss, as the U.S. Securities and Exchange Commission and arent available for sale to United
States citizens and/or residents except as noted. Prices are in local currencies.
bank cited strong progress in All performance figures are calculated using the most recent prices available.
Monday, March 27, 2017 | B5
giving in to more of these re-
quests in the past couple of
years.
Other terms are also flexi-
ble. Some 87% of card users
who asked their lender to
waive their late fee were suc-
cessful, according to the Cred-
itCards.com survey. And nearly
70% who asked for a lower in-
terest rate got it. Consumers
seem to have a better shot at
getting issuers to agree to
these requests if they have a
history of paying on time.
In some instances, card
holders can get an annual fee
waived if they agree to spend
a certain amount on the card
JONATHAN ERNST/REUTERS
within a set period of time, ac-
cording to one card-issuing
bank that didnt want to be
identified.
One of the requests most
likely to be granted isnt asso-
ciated with fees. Many banks
are offering increases for
credit-card spending limits.
That can have the added
benefit of helping to boost a
consumers credit score and
can be a signal a card lender
views that person as a better
credit risk. The cardholders
credit score is more likely to
rise if he or she doesnt take
out more debt using the in-
creased borrowing limit.
means they typically fare
even worse than their funds
performances.
With the U.S. equity bull
market in its ninth year,
some say a decline is long
overdue. Perhaps it is. But as
analysts at Strategas Re-
search Partners note, pull-
Black Monday in 1987, the
S&P 500 has suffered 21 cor-
30
years rectionsdeclines of at least
10% from a recent peak. Half
of them havent been associ-
ated with bear markets or re-
cessions, according to Strate-
gas. And the S&P 500 has
averaged a 14% gain three
months after all these cor-
rections have bottomed out.
It is every investors dream
to get out before a market
tumble slices their portfolio,
but episodes like last weeks
tumble show that trying to
do so is like death by a thou-
sand cuts.
lems so severe in five of them
that they said the plans didnt
meet the Dodd-Frank stan-
dard.
In December 2016, regula-
tors said most of those firms
had addressed their concerns.
They also said Wells Fargo &
Co. hadnt, and restricted
some of the lenders business
activities. Wells Fargo was
given until March to address
regulators concerns. All eight
of the big banks must file new
living wills this summer.
Also on Friday, regulators
gave four large non-U.S. banks
guidance about how to im-
prove their living wills but
didnt render a verdict on the
plans.
Those banks will have until
July 2018 to make their plans
conform to the guidance. The
foreign-owned firms are Bar-
clays PLC, Credit Suisse
Group AG, Deutsche Bank AG
and UBS Group AG.
gaining market share, the bank
said.
The bonus pool totaled 3.1
billion francs in 2016.
Credit Suisse posted a pretax
loss of 2.3 billion francs in 2016,
largely due to charges related to
litigation in the U.S. The bank
booked around 2 billion francs in
net litigation expenses during the
fourth quarter.
Brian Blackstone
FUND NAME
GF AT LB DATE CR
n Chartered Asset Management Pte Ltd - Tel No: 65-6835-8866
Fax No: 65-6835 8865, Website: www.cam.com.sg, Email: cam@cam.com.sg
CAM-GTF Limited
For information about listing your funds,
please contact: Freda Fung tel: +852 2831
2504; email: freda.fung@wsj.com
Barclays
Unit Sells
Subprime
Card Debt
BY ANNAMARIA ANDRIOTIS
Barclaycard is shedding a
chunk of its subprime card
balances, in a deal that re-
flects diverging views in the
card industry about the future
of the U.S. economy and the
wisdom of wagering on risky
borrowers.
The credit-card issuer, a
unit of British bank Barclays
PLC, sold $1.6 billion of credit-
card balances owed by mostly
near-prime and subprime bor-
rowers to privately held per-
sonal-loan firm Credit Shop
Inc., according to people fa-
miliar with the matter.
The deal marks the first
time that Austin, Texas-based
Credit Shop, which is mostly
focused on extending personal
loans to near-prime and sub-
prime borrowers, purchased
credit-card accounts and bal-
ances. The firm, which
launched in 2013 and counts
Chinese firm Renren Inc. as
an investor, is planning to
launch its own credit card
later this year, according to
people familiar with the mat-
ter. Several executives at
Credit Shop were previously
with Barclaycard.
Subprime card issuance has
been on the rise in recent
years, partly as some banks
have grown more comfortable
taking on more risk and some
nonbank lenders enter the
card market for risky borrow-
ers.
At the same time, there is
growing anxiety among inves-
tors and some lenders that a
turn in the credit cycle could
be near and that losses could
soon rise. Card defaults, while
still near record lows, have
been on the rise recently. Sev-
eral large lenders also recently
reported jumps in charge-offs,
which are unpaid balances
that lenders write off as losses
when they dont expect bor-
rowers to pay them.
Missed payments are up at
Barclaycard. Thirty-day delin-
quencies hit 2.6% in the fourth
quarter, up from 2.2% a year
prior, while 90-day delinquen-
cies reached 1.3%, up from
1.1%, according to Barclayss
latest earnings report. Most of
the credit-card balances sold
in this deal werent delin-
quent, said people familiar
with the matter.
While they represent more
risk, subprime borrowers pay
higher interest charges that
can result in bigger returns for
lenders in a strong economy.
Fear is building that
a turn in the credit
cycle could be near
and losses could rise.
Nonbanks are becoming
more active in the subprime
card market as many banks re-
main hesitant to expand in
this space. Subprime lender
LendUp launched a credit card
in 2015 that it has since ex-
panded in availability.
Once a relatively small
player in the U.S. card market,
Barclaycard has been acquir-
ing large accounts over the
past year as it has focused on
expanding its presence in the
U.S. credit-card market.
Much of this growth has oc-
curred on the co-branded side,
where the issuer lends to con-
sumers who are mostly prime
but also include subprime, a
lending mix that likely will
continue, according to a per-
son familiar with the matter.
Total U.S. purchase volume
on Barclaycard credit cards in-
creased 8% in 2016 to $70.5
billion, according to the Nilson
Report, a trade publication. It
is the ninth largest U.S. card
issuer by both volume and
outstanding balances.
NAV
NAV
%RETURN
YTD 12-MO 2-YR
OT OT MUS 03/17 USD 309967.63 2.6 7.3 -2.1
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B6 | Monday, March 27, 2017 THE WALL STREET JOURNAL.

MARKETS DIGEST Data as of Friday, March 24, 2017

Nikkei 225 Index STOXX 600 Index S&P 500 Index 4 p.m. New York time
Last Year ago
19262.53 s 177.22, or 0.93% Year-to-date s 0.78% 376.51 t 0.69, or 0.18% Year-to-date s 4.18% 2343.98 t 1.98, or 0.08% Trailing P/E ratio * 24.52 23.53
High, low, open and close for each 52-wk high/low 19633.75 14952.02 High, low, open and close for each 52-wk high/low 378.32 308.75 High, low, open and close for each P/E estimate * 18.27 17.55
trading day of the past three months. All-time high 38915.87 12/29/89 trading day of the past three months. All-time high 414.06 4/15/15 trading day of the past three months. Dividend yield 1.97 2.23
All-time high: 2395.96, 03/01/17

20000 385 2390

19500 375 2350

19000 365 2310

18500 355 2270

Session high
65-day moving average
DOWN UP 65-day moving average
18000 345 2230
t

Session open Close

65-day moving average Close Open
t

17500 335 2190

Session low
Bars measure the point change from session's open
17000 325 2150
Dec. Jan. Feb. Mar. Dec. Jan. Feb. Mar. Dec. Jan. Feb. Mar.

International Stock Indexes Data as of 4 p.m. New York time Global government bonds
Latest 52-Week Range YTD Latest, month-ago and year-ago yields and spreads over or under U.S. Treasurys on benchmark two-year
Region/Country Index Close NetChg % chg Low Close High % chg and 10-year government bonds around the world. Data as of 3 p.m. ET
World The Global Dow 2684.08 0.95 0.04 2197.91 2704.60 6.0 Country/ Spread Over Treasurys, in basis points Yield
MSCI EAFE 1797.68 4.68 0.26 1520.94 1800.33 6.8 Coupon Maturity, in years Yield Latest Previous Month Ago Year ago Previous Month ago Year ago
MSCI EM USD 969.13 1.21 0.13 781.84 973.08 12.4 5.250 Australia 2 1.767 51.9 51.7 65.3 109.0 1.777 1.802 1.975
4.750 10 2.761 36.2 33.1 42.5 69.3 2.754 2.739 2.593
Americas DJ Americas 564.86 0.26 0.05 480.83 577.52 4.5
3.000 Belgium 2 -175.4 -174.3 -173.5 -131.8 -0.483 -0.586 -0.433
-0.505
Brazil Sao Paulo Bovespa 63853.77 322.98 0.51 48096.24 69052.03 6.0
0.800 10 0.883 -151.6 -150.4 -159.9 -145.9 0.919 0.716 0.441
Canada S&P/TSX Comp 15442.67 9.06 0.06 13266.44 15922.37 1.0
0.000 France 2 -0.493 -174.2 -172.1 -169.6 -130.1 -0.461 -0.548 -0.416
Mexico IPC All-Share 49083.85 406.94 0.84 44282.03 49083.85 7.5
0.250 10 0.996 -140.4 -137.8 -139.5 -136.4 1.045 0.919 0.536
Chile Santiago IPSA 3675.06 25.84 0.71 3054.30 3675.06 14.0
0.000 Germany 2 -0.739 -198.8 -199.2 -209.9 -136.2 -0.732 -0.950 -0.477
U.S. DJIA 20596.72 59.86 0.29 17140.24 21115.55 4.2
0.250 10 0.406 -199.3 -198.9 -212.4 -171.7 0.433 0.190 0.184
Nasdaq Composite 5828.74 11.04 0.19 4594.44 5904.03 8.3
0.300 Italy 2 -0.078 -132.7 -131.5 -113.4 -85.0 -0.055 0.015 0.035
S&P 500 2343.98 1.98 0.08 2000.54 2395.96 4.7
1.250 10 2.228 -17.1 -15.1 -13.9 -60.1 2.272 2.175 1.299
CBOE Volatility 12.96 0.16 1.22 10.58 25.76 7.7
0.100 Japan 2 -0.259 -150.7 -153.1 -141.6 -110.3 -0.270 -0.267 -0.218
EMEA Stoxx Europe 600 376.51 0.69 0.18 308.75 378.32 4.2 0.100 10 0.065 -233.4 -236.5 -225.1 -199.0 0.057 0.064 -0.090
Stoxx Europe 50 3126.94 9.37 0.30 2636.71 3141.99 3.9 4.000 Netherlands 2 -0.738 -198.6 -199.6 -199.9 -138.1 -0.736 -0.850 -0.496
Austria ATX 2829.43 6.38 0.23 1988.40 2850.76 8.1 0.750 10 0.651 -174.8 -175.5 -183.2 -162.7 0.668 0.482 0.273
Belgium Bel-20 3747.43 15.67 0.42 3141.13 3799.86 3.9 4.450 Portugal 2 -0.084 -133.2 -130.8 -119.5 -60.6 -0.048 -0.046 0.279
France CAC 40 5020.90 11.86 0.24 3984.72 5032.76 3.3 2.875 10 3.799 140.0 144.1 159.4 88.4 3.863 3.908 2.784
Germany DAX 12064.27 24.59 0.20 9268.66 12095.24 5.1 2.750 Spain 2 -0.197 -144.6 -147.1 -140.7 -85.9 -0.211 -0.258 0.026
Greece ATG 635.66 4.54 0.71 519.33 665.21 1.2 1.500 10 1.696 -70.3 -71.0 -71.6 -45.0 1.713 1.599 1.450
Hungary BUX 32097.09 30.80 0.10 25390.23 34324.99 0.3 4.250 Sweden 2 -0.556 -180.4 -181.2 -181.5 -152.7 -0.552 -0.666 -0.642
Israel Tel Aviv 1415.99 Closed 1382.34 1502.66 3.7 1.000 10 0.676 -172.3 -173.3 -176.2 -138.2 0.689 0.553 0.518
Italy FTSE MIB 20188.02 20.53 0.10 15103.58 20188.02 5.0 1.750 U.K. 2 0.153 -109.5 -110.0 -106.5 -39.9 0.160 0.083 0.486
Netherlands AEX 511.53 1.09 0.21 411.62 516.24 5.9 4.250 10 1.198 -120.1 -119.0 -115.7 -44.3 1.232 1.157 1.457
Poland WIG 59069.56 24.12 0.04 43549.58 60440.57 14.1 1.125 U.S. 2 1.248 ... ... ... ... 1.260 1.149 0.885
Russia RTS Index 1124.66 0.31 0.03 843.42 1195.61 2.4 2.250 10 2.399 ... ... ... ... 2.422 2.314 1.900
Spain IBEX 35 10309.40 15.50 0.15 7645.50 10324.90 10.2
Sweden SX All Share 557.97 1.16 0.21 445.00 563.92 4.4 Commodities Prices of futures contracts with the most open interest 3:30 p.m. New York time
Switzerland Swiss Market 8613.64 15.00 0.17 7593.20 8698.53 4.8 EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; ICE-US: ICE Futures U.S.; MDEX: Bursa Malaysia
South Africa Johannesburg All Share 51816.31 211.67 0.41 48935.90 54474.09 2.3 Derivatives Berhad; TCE: Tokyo Commodity Exchange; COMEX: Commodity Exchange; LME: London Metal Exchange;
NYMEX: New York Mercantile Exchange; ICE-EU: ICE Futures Europe. *Data as of 3/23/2017
Turkey BIST 100 90382.71 618.60 0.69 71594.98 91044.99 15.7
One-Day Change Year Year
U.K. FTSE 100 7336.82 3.89 0.05 5923.53 7429.81 2.7 Commodity Exchange Last price Net Percentage high low
355.75 -1.00 -0.28% 387.25 355.25
Asia-Pacific DJ Asia-Pacific TSM 1559.57 6.71 0.43 1315.32 1569.47 9.6 Corn (cents/bu.) CBOT
Soybeans (cents/bu.) 975.50 -15.50 -1.56 1,088.25 972.25
Australia S&P/ASX 200 5753.50 45.50 0.80 4924.40 5816.30 1.5
Wheat (cents/bu.)
CBOT
CBOT 425.25 4.25 1.01% 477.00 416.25
China Shanghai Composite 3269.45 20.90 0.64 2806.91 3282.92 5.3
Live cattle (cents/lb.) CME 112.725 -0.075 -0.07 114.200 103.150
Hong Kong Hang Seng 24358.27 30.57 0.13 19694.33 24593.12 10.7
Cocoa ($/ton) ICE-US 2,133 -43 -1.98 2,273 1,869
India S&P BSE Sensex 29421.40 89.24 0.30 24673.84 29648.99 10.5
Coffee (cents/lb.) ICE-US 137.40 -3.10 -2.21 159.30 136.70
Japan Nikkei Stock Avg 19262.53 177.22 0.93 14952.02 19633.75 0.8
Sugar (cents/lb.) ICE-US 17.80 0.20 1.14 21.21 17.02
Singapore Straits Times 3142.90 15.97 0.51 2729.85 3169.38 9.1
Cotton (cents/lb.) ICE-US 77.45 0.18 0.23 79.46 71.55
South Korea Kospi 2168.95 3.77 0.17 1925.24 2178.38 7.0 Robusta coffee ($/ton) ICE-EU 2140.00 -23.00 -1.06 2,279.00 2,093.00
Taiwan Weighted 9902.98 27.76 0.28 8053.69 9972.49 7.0
Copper ($/lb.) COMEX 2.6355 -0.0090 -0.34 2.8360 2.4800
Source: SIX Financial Information;WSJ Market Data Group Gold ($/troy oz.) COMEX 1254.80 4.70 0.38 1,268.10 1,152.20
Silver ($/troy oz.) COMEX 17.790 0.197 1.12 18.540 16.000
Currencies London close on March 24 Aluminum ($/mt)* LME 1,923.00 1.50 0.08 1,939.00 1,688.50
Tin ($/mt)* LME 20,375.00 unch. unch. 21,225.00 18,760.00
Yen, euro vs. dollar; dollar vs. major U.S. trading partners US$vs,
Fri YTDchg Copper ($/mt)* LME 5,825.00 84.00 1.46 6,156.00 5,518.00
Country/currency in US$ per US$ (%) Lead ($/mt)* LME 2,368.00 44.00 1.89 2,445.00 2,022.00
20%
s Europe Zinc ($/mt)* LME 2,840.00 1.50 0.05 2,958.50 2,555.00
Yen 0.5526 1.8095 2.6 9,995.00 10.00 11,095.00 9,430.00
10 WSJ Dollar index
Bulgaria lev Nickel ($/mt)* LME 0.10
s Croatia kuna 0.1457 6.862 4.3 Rubber (Y.01/ton) TCE 247.40 -2.60 -1.04 n.a. n.a.
Euro zone euro 1.0810 0.9251 2.7
0 Palm oil (MYR/mt) MDEX 2755.00 -16.00 -0.58 3068.00 2642.00
Czech Rep. koruna-b 0.0400 24.995 2.7
Denmark krone 0.1453 6.8807 2.7 Crude oil ($/bbl.) NYMEX 47.97 0.27 0.57 57.50 47.01
10 s Euro
0.003483 287.13 2.4
Hungary forint NY Harbor ULSD ($/gal.) NYMEX 1.5049 0.0079 0.53 1.7770 1.4825
Iceland krona 0.009055 110.44 2.2 RBOB gasoline ($/gal.) NYMEX 1.6139 0.0126 0.79 1.9065 1.5824
20 Norway krone 0.1179 8.4821 1.9
0.2537 3.9416 5.9
Natural gas ($/mmBtu) NYMEX 3.151 0.020 0.64 3.5070 2.7370
2016 2017 Poland zloty
Russia ruble-d 0.01753 57.061 6.9 Brent crude ($/bbl.) ICE-EU 50.95 0.29 0.57 59.89 50.00
US$vs, US$vs,
YTDchg YTDchg Sweden krona 0.1135 8.8099 3.3 Gas oil ($/ton) ICE-EU 452.00 1.75 0.39 523.50 444.00
Fri Fri
Country/currency in US$ per US$ (%) Country/currency in US$ per US$ (%) Switzerland franc 1.0101 0.9900 2.8
Turkey lira 0.2769 3.6117 2.5 Sources: SIX Financial Information; WSJ Market Data Group
Americas Hong Kong dollar 0.1287 7.7671 0.1
Ukraine hryvnia 0.0369 27.1250 0.2
Argentina peso-a 0.0641 15.5970 1.7
India rupee
Indonesia rupiah
0.0153
0.0000752
65.3883
13302
3.8
1.6
U.K. pound 1.2494 0.8004 1.2 Cross rates London close on Mar 24
Brazil real 0.3211 3.1147 4.3 Middle East/Africa
Japan yen 0.009023 110.83 5.3
Canada dollar 0.7475 1.3378 0.5 USD GBP CHF JPY HKD EUR CDN AUD
Kazakhstan tenge 0.003155 316.99 5.0 Bahrain dinar 2.6529 0.3770 0.1
Chile peso 0.001514 660.60 1.4 Australia 1.3120 1.6393 1.3254 0.0118 0.1689 1.4183 0.9807 ...
Macau pataca 0.1250 8.0030 1.1 Egypt pound-a 0.0554 18.0500 0.5
Colombia peso 0.0003450 2898.71 3.4 Canada 1.3378 1.6712 1.3512 0.0121 0.1722 1.4461 ... 1.0196
Malaysia ringgit-c 0.2260 4.4255 1.3 Israel shekel 0.2752 3.6343 5.6
Ecuador US dollar-f 1 1 unch
New Zealand dollar 0.7033 1.4219 1.5 Kuwait dinar 3.2826 0.3046 0.3 Euro 0.9251 1.1557 0.9343 0.0083 0.1191 ... 0.6915 0.7051
Mexico peso-a 0.0531 18.8476 9.1
Pakistan rupee 0.0095 104.815 0.4 Oman sul rial 2.5974 0.3850 0.01 Hong Kong 7.7671 9.7040 7.8454 0.0701 ... 8.3965 5.8061 5.9200
Peru sol 0.3083 3.2440 3.2
Philippines peso 0.0199 50.186 1.2 Qatar rial 0.2746 3.642 0.04 Japan 110.8280 138.4700 111.9400 ... 14.2690 119.8200 82.8500 84.4700
Uruguay peso-e 0.0353 28.360 3.4
Singapore dollar 0.7148 1.3989 3.3 Saudi Arabia riyal 0.2666 3.7505 0.01 0.9900 1.2369 ... 0.0089 0.1275 1.0704 0.7401 0.7546
Venezuela bolivar 0.100050 10.00 unch Switzerland
South Korea won 0.0008959 1116.15 7.6 South Africa rand 0.0804 12.4433 9.1
U.K. 0.8004 ... 0.8085 0.0072 0.1031 0.8653 0.5984 0.6101
Asia-Pacific Sri Lanka rupee 0.0065894 151.76 2.2 Close Net Chg % Chg YTD % Chg
0.7622 1.3120 5.5 Taiwan dollar 0.03299 30.310 U.S. ... 1.2494 1.0101 0.0090 0.1287 1.0810 0.7475 0.7622
Australia dollar 6.6 WSJ Dollar Index 89.92 0.11 0.12 3.25
China yuan 0.1453 6.8835 0.9 Thailand baht 0.02896 34.530 3.6 Sources: Tullett Prebon, WSJ Market Data Group Source: Tullett Prebon

Key Rates Top Stock Listings 4 p.m. New York time

Latest 52 wks ago % YTD% % YTD% % YTD%
Libor Cur Stock Sym Last Chg Chg Cur Stock Sym Last Chg Chg Cur Stock Sym Last Chg Chg Asia Titans 50
One month 0.98278% 0.43500% TakedaPharm 4502 5262.00 0.44 8.83 RoyDtchShell A RDSA 2083.00 -0.69 -7.11 Last: 153.91 s 0.75, or 0.49% YTD s 9.2%
Three month 1.15128 0.62860 Asia Titans HK$ TencentHoldings 0700 225.20 0.99 18.71 SAP SAP 90.80 -0.16 9.65
Six month 1.42711 0.91090 HK$ AIAGroup 1299 50.10 -0.20 14.51 TokioMarineHldg 8766 4895.00 1.24 2.06 Sanofi SAN 82.87 -0.52 7.76 High 155
One year 1.80289 1.23115 67.31 0.18 1.82
AstellasPharma 4503 1520.00 0.96 -6.38 ToyotaMtr 7203 6229.00 1.12 -9.44 SchneiderElectric SU Close 150
Euro Libor AU$ AustNZBk ANZ 31.36 1.92 3.09 AU$ Wesfarmers WES 43.88 1.11 4.13 Siemens SIE 124.35 0.20 6.46 Low t 145
One month -0.39786% -0.32986% AU$ BHP BHP 24.26 0.29 -3.19 AU$ WestpacBanking WBC 33.90 1.38 3.99 CHF Syngenta SYNN 437.00 0.51 8.57
Three month -0.35571 -0.24886 3.92 Telefonica TEF 10.45 -0.67 18.42 50day 140
HK$ BankofChina 3988 -0.51 13.95 AU$ Woolworths WOW 25.94 1.29 7.63
moving average
Six month -0.24729 -0.13929 HK$ CKHutchison 0001 97.80 ... 11.26 Total FP 46.21 -0.62 -4.20 135
One year -0.11429 -0.01714 HK$ CNOOC 0883 9.24 3.94 -4.74 Stoxx 50 CHF UBSGroup UBSG 15.54 -0.38 -2.57
130
Euribor AU$ CSL CSL 123.50 0.92 23.00 Unilever UNA 46.60 -0.18 19.14
CHF ABB ABBN 23.18 -0.43 7.91
One month -0.37200% -0.33100% Canon 7751 3495.00 0.34 6.07 Unilever ULVR 4018.00 0.05 22.03 30 6 13 20 27 3 10 17 24 3 10 17 24
ASMLHolding ASML 122.95 2.29 15.28
Three month -0.33000 -0.24200 CentralJapanRwy 9022 18770 1.79 -2.39 Vinci DG 74.36 0.85 14.93 Jan. Feb. Mar.
AXA CS 23.55 -0.38 -1.81
Six month -0.24200 -0.13400 HK$ ChinaConstructnBk 0939 6.39 -0.16 7.04 VodafoneGroup VOD 211.60 0.28 5.88
AirLiquide AI 106.20 -0.33 0.52
One year -0.10700 -0.00500 HK$ ChinaLifeInsurance 2628 24.00 -1.23 18.81 CHF ZurichInsurance ZURN 286.70 0.21 2.25
169.55
Yen Libor HK$ ChinaMobile 0941 86.45 -0.92 5.17


Allianz
AB InBev
ALV
ABI 102.40
-1.02
-0.78
7.99
1.84 DJIA Stoxx 50
One month -0.01486% -0.07514% HK$ ChinaPetro&Chem 0386 6.20 1.14 12.73 AstraZeneca AZN 4928.50 -0.63 11.06 Last: 3126.94 t 9.37, or 0.30% YTD s 3.9%
Three month 0.01864 -0.00557 AU$ CmwlthBkAust CBA 83.38 0.52 1.18 BASF BAS 90.26 0.68 2.21
$ AmericanExpress AXP 78.20 0.46 5.56
Six month 0.04179 0.02343 EastJapanRailway 9020 9802.00 0.78 -2.95 BNP Paribas BNP 60.46 -1.05 -0.15
$ Apple AAPL 140.64 -0.20 21.43 3175
One year 0.14729 0.11229 Fanuc 6954 23065 1.70 16.40 BT Group BT.A 325.65 -1.74 -11.24
$ Boeing BA 175.82 -0.81 12.94
$ Caterpillar CAT 92.15 -0.09 -0.64 3100
Offer Bid Hitachi 6501 616.40 0.39 -2.47 BancoBilVizAr BBVA 7.19 -0.28 12.08
TW$ Hon Hai Precisn 2317 90.60 -0.77 7.60 $ Chevron CVX 107.99 0.11 -8.25 3025
Eurodollars BancoSantander SAN 5.71 -0.16 15.25
HondaMotor 7267 3440.00 0.17 0.73 $ CiscoSystems CSCO 34.08 0.35 12.77
One month 1.1000% 1.0000% Barclays BARC 226.95 1.36 1.57 2950
KRW HyundaiMtr 005380 164000 -0.61 12.33 $ Coca-Cola KO 42.12 -0.12 1.59
Three month 1.3000 1.2000 Bayer BAYN 107.00 0.05 7.94
2875
HK$ Ind&Comml 1398 5.16 -0.19 10.97 $ Disney DIS 112.14 -0.09 7.60
Six month 1.4000 1.3000 BP BP. 451.85 -1.04 -11.33
$ DuPont DD 79.60 -1.19 8.45
One year 1.7500 1.6500 JapanTobacco 2914 3786.00 0.88 -1.51 BritishAmTob BATS 5277.00 1.99 14.18 2800
KDDI 3002.00 1.01 1.44
$ ExxonMobil XOM 81.23 -0.77 -10.00
Latest 52 wks ago 9433 Daimler DAI 70.56 -0.03 -0.23 $ GeneralElec GE 29.72 0.34 -5.95 30 6 13 20 27 3 10 17 24 3 10 17 24
Mitsubishi 8058 2446.50 0.68 -1.75 DeutscheTelekom DTE 16.14 0.09 -1.28 $ Jan. Feb. Mar.
Prime rates GoldmanSachs GS 228.41 -1.50 -4.61
MitsubishiElectric 6503 1622.00 -0.98 -0.46 Diageo DGE 2308.00 0.30 9.38 $
U.S. 4.00% 3.50% HomeDepot HD 147.71 -0.19 10.17
MitsubishiUFJFin 8306 717.10 1.24 -0.43 ENI ENI 14.99 -0.27 -3.10 $
Canada 2.70 2.70 Intel INTC 35.16 -0.31 -3.06
1639.00 1.52 1.99 1670.50
Japan
Hong Kong
1.475
5.00
1.475
5.00


Mitsui
Mizuho Fin
8031
8411 209.70 1.40 -0.05


GlaxoSmithKline
HSBC Hldgs
GSK
HSBA 648.30
-0.27 6.95 $
0.17 -1.31 $
IBM
JPMorganChase
IBM
JPM
173.83
87.29
-0.57
-0.11
4.72
1.16
Dow Jones Industrial Average P/E: 21
NTTDoCoMo 9437 2690.00 1.07 1.01 INGGroep INGA 13.77 -1.26 2.95 $ J&J JNJ 125.48 -0.33 8.91 Last: 20596.72 t 59.86, or 0.29% YTD s 4.2%
Policy rates
ECB 0.00% 0.00%
AU$ NatAustBnk NAB 32.09 1.04 4.63 ImperialBrands IMB 3815.00 0.41 7.69 $ McDonalds MCD 129.34 0.26 6.26
Britain 0.25 0.50
NipponTeleg 9432 4992.00 0.93 1.63 IntesaSanpaolo ISP 2.54 -0.31 4.62 $ Merck MRK 63.18 -0.16 7.32 20700
Switzerland 0.50 0.50
NissanMotor 7201 1126.00 0.85 -4.21 LVMHMoetHennessy MC 201.10 -0.42 10.86 $ Microsoft MSFT 64.98 0.17 4.57
Panasonic 6752 1193.50 -0.54 0.34 LloydsBankingGroup LLOY 68.05 -0.56 8.86 $ Nike NKE 56.36 1.79 10.88
20150
Australia 1.50 2.00
HK$ PingAnInsofChina 2318 43.85 0.46 13.02 LOreal OR 177.85 -0.36 2.57 $ Pfizer PFE 34.00 -0.85 4.68
U.S. discount 1.50 1.00 19600
Fed-funds target 0.75-1.00 0.25-0.50
$ RelianceIndsGDR RIGD 39.27 1.35 24.48 NationalGrid NG. 1013.00 0.55 6.45 $ Procter&Gamble PG 90.57 -0.22 7.72
Call money 2.75 2.25
KRW SamsungElectronics 005930 2075000 -0.72 15.15 CHF Nestle NESN 77.20 -0.26 5.68 $ 3M MMM 191.51 -0.33 7.25 19050
Seven&I Hldgs 3382 4439.00 1.23 -0.31 CHF Novartis NOVN 73.75 -0.54 -0.47 $ Travelers TRV 120.77 -0.43 -1.35
Overnight repurchase rates 18500
U.S. 0.78% 0.37%
SoftBankGroup 9984 8011.00 -0.47 3.17 DKK NovoNordiskB NOVO-B 231.60 0.87 -9.07 $ UnitedTech UTX 111.80 -0.04 1.99
Euro zone n.a. n.a.
Sony 6758 3603.00 1.78 10.02 Prudential PRU 1721.00 -0.06 5.75 $ UnitedHealth UNH 165.00 -0.18 3.10 30 6 13 20 27 3 10 17 24 3 10 17 24
Sumitomo Mitsui 8316 4204.00 1.42 -5.74 ReckittBenckiser RB. 7345.00 0.15 6.67 $ Visa V 89.19 0.37 14.32 Jan. Feb. Mar.
Sources: WSJ Market Data Group, SIX HK$ SunHngKaiPrp 0016 114.30 -0.52 16.63 RioTinto RIO 3257.50 -0.28 3.13 $ Verizon VZ 49.68 0.08 -6.93 Note: Price-to-earnings ratios are for trailing 12 months
Financial Information, Tullett TW$ TaiwanSemiMfg 2330 192.50 -0.52 6.06 CHF RocheHldgctf ROG 252.90 0.12 8.73 $ Wal-Mart WMT 69.61 -0.36 0.71 Sources: WSJ Market Data Group; Birinyi Associates
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
Gulf Oil Producers Are Forced to Borrow
Faced with anemic
energy prices, some
get loans against
future crude output
BY SARAH MCFARLANE
Some Middle Eastern oil
producers are considering tak-
ing money upfront against fu-
ture production, as the fall in
the price of crude pushes
them to look at new ways to
plug budget holes.
In this type of pre-export fi-
nance, companies or countries
pledge revenues from future
sales to banks and trade
houses that lend money to
them.
Oman recently closed its
first crude-export finance, in
which banks paid the country
$4 billion in exchange for rev-
enues from future oil produc-
tion over five years, according
to bankers familiar with the
matter.
Last month the Abu Dhabi
National Oil Co., or Adnoc,
said it had signed a pre-export
financing deal for the supply
of liquefied petroleum gas
over the next 10 years. And
the worlds top exporter of oil,
Saudi Arabia, also is consider-
ing such finance, bankers said.
Blind Bets
Investors again are ocking to
companies that have no assets
and raise cash to make future
acquisitions.
Cash raised for special-purpose
acquisition companies
$12 billion
10
8 for an oil business to buy.
6 In staking Silver Run Ac-
4 are hoping that Riverstone
2 Holdings LLC, the energy-fo-
0
04 06 08 10 12 14 16 17* named entity it launched last
*Through March 23.
Source: Dealogic
THE WALL STREET JOURNAL.
Middle Eastern govern-
ments have spent extrava-
gantly for years as the high
price of oil filled coffers. But
after almost three years of a
weaker price, regional govern-
ments now need to borrow.
Bankers say there has been
an increase in interest for
such export finance.
Ten to 15 years ago, you
didnt see Middle Eastern pro-
ducers coming into the struc-
tured trade commodities fi-
nance market to raise
financing, but now they are,
said Irfan Afzal, a director
of syndication and agency at
African Export-Import Bank.
Representatives from Oman
and Saudi Arabia didnt im-
mediately respond to requests
for comment.
Such deals, particularly a
potential Saudi Arabian deal,
could be large.
If they go ahead, it would
have to be big if it was to be
meaningful for the budget,
said Kris Van Broekhoven,
head of commodity trade fi-
nance at Citibank. Still, some
countries may be reluctant to
use this type of finance be-
cause it entails handing over
future royalties from a na-
tional resource.
Its the crown jewels of the
country, and you dont pledge
A $1 Billion Blank Check to Buy an Oil Firm
BY RYAN DEZEMBER
AND MAUREEN FARRELL
Investors handed a blank
check for $1 billion to a New
York investment firm and a re-
tired-energy-CEO-turned-the-
ology-student so they can hunt
quisition Corp. II, investors
cused investment firm, can re-
peat the success of a similarly
erstone endeavor are betting
year with another big-name
oil executive.
That blank-check company,
FINANCE & MARKETS
Banks recently paid Oman, seen here, $4 billion in exchange for revenue from future oil production.
your crown jewels as a matter But for oil-rich Middle East-
of principle, Mr. Van Broek- ern nations, it is a novel tactic.
hoven said. Last year, after oil prices
Since 1992, Ghana has bor- fell below $30 a barrel, the
rowed hundreds of millions of governments of Saudi Arabia,
dollars in pre-export financing Qatar, Abu Dhabi, Bahrain and
from banks each year so it can Oman raised around $39 bil-
buy the local cocoa crop from lion on international bond
farmers. Angolas state-owned markets, up from around $2.5
oil producer Sonangol also has billion in 2015, according to
used pre-export finance. Moodys Investors Service.
led by Mark Papa, who earlier an oil patch also-ran into one
built an Enron Corp. castoff of the worlds largest energy
into one of the largest U.S. oil explorers before retiring in
producers, last year raised 2013 to get a theology degree
$500 million. at Harvard Divinity School.
It put the cash toward buy- The stock sale, which
ing a pair of closely held West launched Thursday and raised
Texas oil producers. Now a little over $1 billion, includ-
known as Centennial Re- ing shares that the banks man-
source Development Inc., its aging the deal bought, tied the
shares have been among the record for the largest blank-
energy industrys best per- check offering set a decade
formers, up 72% since the Feb- ago, according to Dealogic.
ruary 2016 listing. The Silver Run shares
Investors in the latest Riv- gained 3.6% in their stock-
market debut Friday, an un- style of deal making.
on the second act of James usual move in the early days
Hackett, who transformed An- of such a company.
adarko Petroleum Corp. from Blank-check companies, also
ASIA
Technologys Most Ambitious Minds,
On Stage and On the Record.
June 89, 2017
Hong Kong & Shenzhen
The Wall Street Journals premier technology event is coming to Asia for the first time.
D.LIVE ASIA will assemble an elite group of global executives, founders and innovators
to discuss the latest technology developments in the Asia-Pacific region and beyond.
FEATURED PARTICIPANTS INCLUDE:
BHAVISH AGGARWAL
Co-Founder and CEO
Ola
CONNIE CHAN
Partner
Andreessen Horowitz
ERIC JING
CEO
Ant Financial
Additional speakers to be announced soon.
D.LIVE is by invitation.
For more information please visit dliveasia.wsj.com
Proudly supported by:
Monday, March 27, 2017 | B7
cause banks can typically take
comfort in a producers record
of exporting fuel, they say. The
risk to the borrower is that if
the price of oil falls dramati-
cally, they may have to either
extend the repayment term or
pump more oil.
Rating company Moodys
expects the six Gulf Coopera-
tion Council countriesBah-
rain, Kuwait, Oman, Qatar,
Saudi Arabia and the United
Arab Emiratesto raise al-
most as much again this year,
after their combined balance
BILDAGENTUR-ONLINE/UIG/GETTY IMAGES
sheet for 2015-2016 swung to
a deficit equivalent to 9% of
combined gross domestic
product, compared with a
combined surplus of around
5% of their GDP in 2014 when
oil traded above $100 a barrel.
But that may not be
enough. Saudi Arabias $17.5
billion bond covered only 22%
of its 2016 fiscal deficit.
Moodys estimates that oil
The 2016 sum included accounts for around 25% of
$17.5 billion in bonds that GDP in Gulf Cooperation Coun-
Saudi Arabia sold last October, cil countries, and around two-
the largest-ever emerging- thirds of government revenue.
market debt issue. Kuwait has If oil prices were to fall
launched its debut interna- back to $40, we would see
tional bond sale earlier this much larger deficits to fi-
month to raise $8 billion. nance, said Mathias Angonin,
Such deals tend to be analyst at Moodys.
cheaper than an unsecured Summer Said
bond, bankers say. That is be- contributed to this article.
called special-purpose acquisi- pipelines, filed paperwork ear-
tion companies, or SPACs, lier this month to raise as
start with no assets and sell much as $402 million for a
shares to raise cash that they blank-check company.
then use to make acquisitions. In a SPAC that could rival
They traditionally have at- those of Riverstone for star
tracted hedge funds willing to power, TPG is in talks to
make speculative bets on spe-
launch a blank-check company
cific deal makers, but these headed by former Occidental
days bankers say they are Petroleum Corp. Chief Execu-
pitched to a broader swath of tive Stephen Chazen, accord-
investors. ing to people familiar with the
Centennials surging shares discussions.
have made energy investors Riverstones Thursday of-
particularly bullish on this fering more than doubled in
size from the $400 million the
Kayne Anderson Capital deal makers first proposed in
Advisors LP, a Los Angeles securities filings three weeks
private-equity firm focused on ago.
JENNY LEE
Managing Partner
GGV Capital
RICHARD LIU
CEO
JD.com
KAVIN BHARTI MITTAL
Founder and CEO
Hike Messenger
2017 Dow Jones & Co., Inc. All rights reserved. 6DJ5206
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B8 | Monday, March 27, 2017
Mall REIT
Stocks Slide
As Retailers
Close Stores
Investor unease about
broad shifts in the
retail sector takes toll
on real-estate shares
BY BEN EISEN
Accelerating troubles
among big retailers are weigh-
ing on a corner of the market
for real-estate investment
trusts, a rare bout of under-
performance for one of the
hottest sectors in recent years.
As Sears Holdings Corp.
said Wednesday that it may
struggle to continue operating,
an index of regional mall
REITs dropped 2.2%. Some in-
dividual REITs fared worse
that day: CBL & Associates
Properties Inc. fell 4.9%,
Pennsylvania Real Estate In-
vestment Trust dropped 3.5%,
and Washington Prime Group
Inc. fell 3.3%.
All three stocks are down
more than 17% this year, re-
flecting investor fears that
store closures and financial
struggles among the biggest
tenants of shopping malls will
hit the companies that finance
mall real-estate assets.
Short interest in retail
REITs is up about 20% from
the end of last year, though it
has dipped recently, according
to S3 Partners, a financial ana-
lytics firm. Investors who
short a stock seek to profit
from its decline.
We believe some of the
Email: heard@wsj.com
Curious Quirks at Credit Suisse
Something unusual in
Credit Suisses earnings de-
serves investors attention.
Credit Suisse got even
more net interest income
from its wealth divisions
than it got from groupwide
loans and deposits in the
fourth quarter last year, rais-
ing questions over the sus-
tainability of this revenue.
Quality of revenue mat-
ters right now because the
Swiss bank is considering
asking shareholders for sev-
eral billion more in capital,
according to media reports,
rather than pursuing a
planned partial sale of its
Swiss domestic business. If
investors are going to back a
capital raise, they will need
to believe not only in the fu-
ture promise of Credit Su-
isse, but also that the reve-
nue gains it has produced
are dependable.
New figures in the Swiss
banks annual report pub-
lished Friday showed that
the net interest income at
group level on all loans and
deposits in the fourth quar-
ter was less than the total it
earned from three divisions
Mercedes and BMW Take Different Roads to Race Tesla
For two companies that
make similar products in
similar numbers, BMW and
Daimler are placing radi-
cally different bets on the
future of the car.
The popularity of Teslas
cars among rich and status-
seeking Americans, histori-
cally among the German
companies best customers,
spurred them into announc-
ing new electric-vehicle
strategies last year. Both
now expect electrified
carswhether pure battery-
electric cars or plug-in hy-
brids that combine old and
new technologiesto ac-
count for between 15% and
25% of unit sales in 2025.
The watchword of BMWs
annual press and investor
movements of these stock
prices are warranted, said
Laurel Durkay, associate port-
folio manager of real-estate
securities at Cohen & Steers.
We think were in the third
inning, with regard to store
closures and the rationaliza-
tion for real estate within the
space.
REITs, which can hold real
estate of all types, have been
star performers in aggregate,
boosted in recent years by the
Federal Reserves low-rate pol-
icies that made high-income
holdings more attractive. The
asset class returned nearly 11%
annually between 2002 and
2016, the best performer
among 10 investment groups
tracked by J.P. Morgan Asset
Management.
Last year, the S&P 500
added real estate as an 11th
sector of the benchmark. With
rates ticking higher this year,
the sector is trailing the S&Ps
4.7% rise in 2017; it is up just
1.9%.
The drop in mall REITs un-
derscores investor unease
about wider shifts in the retail
sector as e-commerce sites
like Amazon.com Inc. take
market share from traditional
brick-and-mortar stores. The
SPDR S&P Retail exchange-
traded fund has dropped 19%
over the last two years, even
as the S&P 500 climbed 12%.
Ms. Durkay said her firm
has trimmed its mall-REIT ex-
posure over the past year
while adding to REITs that
HEARD ON THE STREET
Adding Wealth
Credit Suisse's quarterly net interest income
Group loans & deposits
1.4 billion swiss francs
1.2
1.0
0.8
0.6
0.4
0.2
0 grew by 16% last year, for ex-
2015
Note: Wealth businesses are Swiss Universal Bank, International
Wealth and Asia Private Bank. $1 is equal to 0.9913 francs.
Source: the company
that report their own net in-
terest income: the Swiss do-
mestic bank, international
wealth and the Asian private
bank.
This mathematical quirk
increased through the year
and was more than twice as
large in the fourth quarter
than in earlier quarters. In
2015, this didnt happen:
group net interest income
exceeded that from these di-
visions in every quarter.
Credit Suisse looks very
conferences this month was
flexibility in the face of an
uncertain future. One key
feature of this approach is
the development of a so-
called platformessentially
a blueprint for undercar-
riage manufacturecom-
mon to both electric and
conventional vehicles. Daim-
ler, on the other hand, is in-
vesting headlong in a dedi-
cated electric-vehicle
platform. Of the up to 10
billion ($10.8 billion) the
company has said it would
spend on its electric-vehicle
project by 2025, analysts
expect roughly half to go
toward developing new
products and half to fund
the common platform.
The worlds leading pre-
MARKETS
Trouble in Store
The continuing struggles of big retailers that rely on sales from brick-and-mortar stores
are weighing heavily on a corner of the market for real-estate investment trusts.
60%
40
20
Annual returns
20
40
0
5%
2002 03 04 05 06
0
5
10
15
Percentage change
20
since 2016
25
January 2017
Sources: WSJ Market Data Group (change since 2016); S3 Partners (short interest); J.P. Morgan Asset Management (returns)
hold other assets, like data
centers, particularly as compa-
nies accelerate online sales.
Some see the stock-price
moves as an overreaction to a
secular trend that has been
ongoing. Sears is just one re-
Short interest in retail REITs has risen about
20% since the end of last year, research says.
tailer to stoke concerns;
GameStop Corp. said Thurs-
day it would close 150 stores.
Last month, J.C. Penney Co.
said it would close as many as
140 of its 1000 stores by June.
Macys Inc. said it would close
nearly 70 stores. Sears said
earlier this year it would shut
FINANCIAL ANALYSIS & COMMENTARY
Sum of wealth businesses
16
THE WALL STREET JOURNAL.
different from UBS on this
score. UBSs interest income
from its divisions consis-
tently adds up to less than
what the group earns.
One big reason behind
what is happening at Credit
Suisse is likely because it is
charging its own investment
bank and markets business
higher rates to borrow its
other clients funds, or it is
using more of those funds
and less of the external mar-
ket funding that is more
mium car specialists sit on
opposing sides of the old
tech wisdom: Invest too
early and you lose money;
invest too late and you lose
the market. Daimler is hold-
ing itself hostage to for-
tune: Its margins could be
eroded by underused capac-
ity if demand for electric
vehicles doesnt materialize.
For BMW, analysts at UBS
see the risk that Daimler
and Tesla use their dedi-
cated platforms to come up
with better products at a
lower cost, once the sector
booms.
History offers perspec-
tive. Over a 30-year period,
BMW has generated a re-
turn to investors more than
six times Daimlers.
07 08 09 10
February
a combined 150 Sears and
Kmart stores.
Retail REITs are getting
oversold because malls are ei-
ther dead or alive, said Scott
Crowe, chief investment strat-
egist at CenterSquare, which
invests in real estate and in-
frastructure. This has been a
slow-moving train wreck for
many years.
Many of the malls in REIT
portfolios that have lost major
tenants are finding they can
replace those tenants, accord-
ing to Calvin Schnure, senior
costly. Probably it is doing a
bit of both.
The bank has spent time
getting clients to change the
way they hold deposits at
Credit Suisse to make the
money fit better with regula-
tory guidelines about what
can and cant be used for in-
ternal funding.
To be sure, the bank has
also been increasing lending
more to its rich clients
loans in international wealth
ample. Some numbers it re-
ports suggest its loans are
getting riskier, although
other regulatory changes
may have added to their ap-
parent riskiness as well.
For investors, the ques-
tion that remains is how
much more benefit Credit
Suisse can get using more
deposit funding to back its
investment banking and
trading.
If Credit Suisse is going to
ask investors for more eq-
uity, it is going to have to
convince them that the
growth in interest revenue is
solid and repeatable.
Paul J. Davies
Pulling Ahead
Unit sales
Mercedes-Benz BMW brand
2.0 million
1.5
1.0
0.5
0.0
10
Source: the companies
THE WALL STREET JOURNAL.
But the tables seem to
have turned since the 2009
recession. BMW spent bil-
lions of euros developing its
slow-selling electric i3
model while Daimlers Mer-
cedes-Benz brand has en-
joyed a new lease on life.
REITs Large-cap equity High-yield bonds
11 12 13 14 15 16
March
economist at the National As-
sociation of REITs, a trade
group.
He pointed to REIT data
showing that among regional
malls that have been open for
more than a year, net operat-
ing income was up 3.4% in the
final three months of last year
from the same period a year
earlier.
The assets held by publicly
traded retail REITs often vary
widely, making analysis of the
portfolios a delicate task.
Many analysts categorize
malls into A, B, and C tiers.
Bank of America Merrill Lynch
equity researchers this month
divided the assets contained in
individual REITs into six dif-
ferent tiers based on various
operating metrics.
REITs own a dispropor-
OVERHEARD
The oil price and the ruble
exchange rate have been
through a lot together in re-
cent years.
Oils 2014 plunge was mir-
rored by the Russian cur-
rency; both hit their nadir in
early 2016, before rising to-
gether. But March has seen
the two part company.
Brent crude is down more
than 8% for the month. But
the ruble has kept its nerve,
and is up 2% against the dol-
lar for the month and nearly
8% this year.
The ruble has some do-
mestic reasons for cheer.
Growth is picking up, leading
Standard & Poors to dish out
a positive outlook on Russias
credit rating this month. And
in a world of low rates, Rus-
sia stands out: Even after a
Central Bank of Russia cut
Friday, the benchmark inter-
est rate stands at 9.75%.
Still, the black stuff cant
be ignored in Russia. One
technical support for the ru-
ble may fade: Exporters have
been buying rubles to pay tax
bills due next week. Russias
key export? Oil.
Last year, consumers glob-
ally bought more Mercedes
than BMWs for the first
time in over a decade, and
over five years Daimler has
delivered a better return to
shareholders.
Most analysts expect the
more recent trend to con-
tinue, with Daimler outper-
forming thanks to the
newer, trendier Mercedes
product range. But investors
need to be mindful of a pos-
sible reversal. The truth
wont out for many years,
but Daimlers big bet on
electric vehicles in retro-
spect might look like an-
other example of the cars
inventor overplaying its
hand.
Stephen Wilmot
THE WALL STREET JOURNAL.
Retail REIT short interest
$8 billion
7
5
2016 2017
FTSE NAREIT/ Equity
Reginional malls
CBL & Associates
Properties
Washington Prime Group
Pennsylvania Real Estate
Investment Trust
THE WALL STREET JOURNAL.
tionate share of the better
malls, as they have been ac-
tively culling the weaker as-
sets from their portfolios to
focus on their more dominant
ones, the analysts, led by
Craig Schmidt, wrote.
Still investors are largely in
agreement that a good portion
of the lower-tier malls will
cease to exist in the coming
years as their tenants continue
to be pressured. Higher-tier
malls, meanwhile, could be
poised to benefit from consoli-
dation in the sector.
Mr. Crowe believes that
about 35% of the malls seen as
lowest tier will shutter in the
coming years. He is concen-
trating investments in the re-
tail REIT space among the 15%
of malls that he sees as the
most dominant.
WSJ.com/Heard
Europes
Surprising
Good Health
Europes charms as a vaca-
tion destination are obvious,
its lure for international in-
vestors less so. But the latest
economic data suggest it
shouldnt be underappreci-
ated.
Fridays flash purchasing
managers indexes for
France, Germany and the eu-
rozone all beat consensus ex-
pectations. Indeed, the com-
posite eurozone PMI hit a 71-
month high of 56.7 in March,
according to compiler IHS
Markit, up from 56 in Febru-
ary. Among the impressive
details of the survey were
the best employment growth
for almost a decade and in-
creasing signs of inflationary
pressures.
This is noteworthy be-
cause it follows previous
positive surprises. It should
be getting harder for eco-
nomic data to beat expecta-
tions; indeed, the consensus
forecast compiled by Fact-
Set was for a slight decline
in the composite PMI. It
also runs counter to the
heavy emphasis placed on
political risks in the euro-
zone. Consumers have
shown no sign of being dis-
turbed by political worries
yet: On Thursday, the Euro-
pean Commissions con-
sumer-confidence indicator
also showed a gain in
March.
Far from heading for par-
ity, the euro has gained 2.6%
against the dollar this year
to $1.08. As a result, in dollar
terms, the Stoxx Europe 600
is moving ahead of the S&P
500, helped by an improving
profit picture for European
companies.
Europe is still a collection
of what-if scenarios for in-
vestors in terms of politics.
But the question investors
need to weigh up is: What if
the eurozone economy is re-
ally motoring?
Richard Barley