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PERSONAL JOURNAL | D1
Last week: DJIA 15973.84 g 231.13 1.4%
What’s
News
Business & Finance
lobal markets soared
G while U.S. exchanges
were closed. European
shares climbed 3%, led by
auto and bank stocks; Japa-
nese shares rose 7.2%. A1
 The ECB is ready to boost
stimulus in March if it thinks
market turmoil or lower oil
prices could weigh on low
inflation, Draghi said. C1
 The yuan had its biggest
jump in over a decade against
the dollar as China guided
the currency higher. C1
 Fantasy sports operators
have launched a lobbying
blitz to exempt the industry
from gambling laws. B1
 IBM plans initiatives to
promote blockchain, a tech-
nology that underpins the
Bitcoin digital currency. B1
 Apollo is nearing a deal
to acquire home-security
company ADT. B1
 Fox’s “Deadpool” opened
to an estimated $150 million
to set a Presidents Day week-
end box-office record. B1
 A VW executive warned
management in 2014 about a
U.S. probe into whether the
car maker used “test recog-
nition” on diesel engines. B3
 Anglo American’s credit
rating was slashed to junk by
Moody’s, a day ahead of the
miner’s earnings report. B3
 Freeport agreed to sell a
13% stake in an Arizona cop-
per mine for $1 billion in a
bid to pay down debt. B3
World-Wide
 Scalia’s death is likely to
set off a protracted election-
year battle. Obama plans to
pick a nominee, rejecting
GOP calls to leave the Su-
preme Court seat vacancy for
his successor to fill. A1, A7-8
 Violence escalated in
northern Syria with the
U.S. accusing the regime,
backed by Russia and Iran,
of bombing hospitals. A9
 The EU reached a pact
with the Assad regime to set
up an office in Damascus to
help with aid deliveries. A9
 Ugandan officials arrested
the president’s chief chal-
lenger, as the longtime leader
uses heavy-handed tactics
to remain in power. A10
 Pope Francis blasted the
treatment of indigenous peo-
ples as he celebrated Mass in
Mexico in both Spanish and
three Maya languages. A11
 A Brazilian state banned
a mosquito larvicide after it
was linked to microcephaly,
a claim challenged by other
health authorities. A11
 Several small countries in
Europe are joining to set bar-
riers along the migrant path
across the Continent. A10
 Airline-safety data show
that not a single passenger
world-wide died from a jet-
liner accident last year. A10
 A winter storm ham-
pered travel on much of
the Eastern Seaboard. A2
CONTENTS
Business News. B2-4
Crossword................. B5
Election 2016.... A4-6
Global Finance........ C3
Health & Wellness.. D2-4
Heard on Street.... C6
s Copyright 2016 Dow Jones &
Company. All Rights Reserved
* * * * * *
NASDAQ 4337.51 g 0.6%
Scalia’s Death Sets Up Collision
J. DAVID AKE/ASSOCIATED PRESS
Visitors to the Washington Monument on Monday walk past flags flying at half-staff in honor of Supreme Court Justice Antonin Scalia.
Senate Girds for a Pivotal Battle
BY SIOBHAN HUGHES
AND KRISTINA PETERSON
WASHINGTON—Senate Ma-
jority Leader Mitch McCon-
nell’s insistence that the next
president fill the sudden Su-
preme Court vacancy has won
broad support from fellow Re-
publicans, opening a new front
in election-year battles with
Markets
Soar Amid
Growing
Confusion
Global markets soared on
Monday, as investors extended
a rally that is offering a glim-
mer of hope after a punishing
start to the year.
By Min Zeng, Riva Gold
and Corrie Driebusch
Still, traders are bracing for
another turbulent week, fueled
by an increasingly fractious
debate over whether it is the
global economy or just finan-
cial markets that are showing
signs of ill health.
Stocks in Europe and Japan
rallied Monday while U.S. mar-
kets were closed for the Presi-
dents Day holiday. The Stoxx
Europe 600 closed up 3%, led
by the auto and banking sec-
tors, while Japan’s Nikkei
Stock Average soared 7.2%, its
Please see MARKET page A2
 Beijing guides yuan up in
shift on valuation..................... C1
Album of the Year
For Taylor Swift
Journal Report.. R1-6
KEVORK DJANSEZIAN/GETTY IMAGES
Moving the Mkt.... C2
Opinion.............. A13-15
Sports.......................... D6
U.S. News.... A2-3,7-8
Weather..................... B5
World News..... A9-12
> bles, 58-year-old Ms. Zhang was
GRAMMYS: The singer lauded
women’s achievements in
accepting her second win in the
category. More on B4, WSJ.com
Michael W. McConnell
Justice Scalia Was
Democracy’s Champion
OPINION | A13
TUESDAY, FEBRUARY 16, 2016 ~ VOL. CCLXVII NO. 37 WSJ.com HHHH $3.00
STOXX 600 312.41 g 4.1% 10-YR. TREASURY new , yield 1.746% OIL $29.44 g $1.45 EURO $1.1256 YEN 113.25
White House, GOP
clash as Obama plans
to nominate Supreme
Court justice shortly
BY CAROL E. LEE
AND JESS BRAVIN
WASHINGTON—President Ba-
rack Obama’s vow to nominate a
replacement for Justice Antonin
Scalia, and Republicans’ determi-
nation to stop that nomination,
mean the two parties are pre-
pared to make the long-term di-
rection of the Supreme Court a
central issue in the 2016 cam-
paign.
The death of Justice Scalia
over the weekend put the White
House and the Republican-led
Congress on a high-stakes colli-
sion course that by Monday
seemed almost unavoidable.
The White House is gearing
up for a titanic fight over Mr.
Obama’s nominee, which his
aides said he would announce in
coming weeks, and began reach-
ing out to lawmakers on Capitol
Hill.
Mr. Obama is rejecting calls
from Republicans in Congress
and on the presidential cam-
paign trail for him to leave the
Supreme Court vacancy for his
successor to fill. White House
spokesman Eric Schultz said do-
ing so would be “irresponsible
and unprecedented.”
“The president will take the
time and rigor that this process
deserves before selecting a
created by Justice Antonin rack Obama in the last elec- nominee,” Mr. Schultz said. “We
Antonin Scalia Scalia’s death already has tion. believe it would be wholly irre-
 Justice’s larger-than-life moved to the center of the Mr. McConnell has been un- sponsible to leave the Supreme
legacy....................................... A7 presidential campaign. But it abashed in his determination Court short staffed, especially
 No clear parallels in history now also figures to be just as to run the Senate in a way considering the important work
for nomination.................... A7 prominent in key Senate races, that helps such GOP senators pending before them.”
particularly for vulnerable Re- survive, and his call for put- Senate Majority Leader Mitch
publican incumbents in states ting off a confirmation for a McConnell (R., Ky.) has sug-
Democrats where control of such as New Hampshire, Penn- new justice until after the gested that any nominee Mr.
the Senate is at stake. sylvania, Ohio and Wisconsin election figures to appeal to Obama chooses would go no-
The fight over the opening that voted for President Ba- Please see BATTLE page A8 Please see SCALIA page A8
MILLENNIALS UNSETTLE RACE
Primary results in Iowa and New Hampshire show young voters’ impact on both parties
BY JANET HOOK Those cautionary notes were clear in
the results from Iowa and New Hamp-
seem to have ulterior motives,” she
says.
This year’s election cycle marks a
generational turning point. For the first
time, millennials will match baby boom-
shire, and in interviews with voters like
Alison Sanderlin, who was raised in a
conservative town in rural Virginia. She
Many like-minded millennials partici-
pated in the Iowa caucuses, where 17-
to 29-year-olds favored Mr. Sanders
ers as a share of the electorate. says as a college student she was put over Mrs. Clinton by an overwhelming
There are messages for both parties off by GOP stands on social issues and 84% to 14%. In New Hampshire, young
in polling data about the generation cast her first vote for president for Mr. voters favored Mr. Sanders by a nearly
born after 1980. For Republicans who Obama. Now 26 years old, with a job in identical 83% to 16%.
think millennials will outgrow their lib- a photo lab and student debt to pay, she About half of millennials—who like
eral tilt in the last two presidential con- still thinks the GOP message falls flat. boomers account for 31% of eligible vot-
tests: Don’t count on it. For establish- But she isn’t enamored with Demo- ers—don’t identify with either party,
ment Democrats who hope Hillary cratic front-runner Mrs. Clinton either, though polling data about them suggest
Clinton can inherit Barack Obama’s because of her shifting positions on im- they are more liberal than their parents
young followers: Don’t take it for portant issues. So she is backing Ver- are now, and more liberal than younger
granted. mont Sen. Bernie Sanders. “He doesn’t Please see VOTE page A6
Irrational Exuberance Takes Hold
© 2015 SAP SE or an SAP affiliate company.All rights reserved.
At China’s Stock-Trading Halls
i i i
Retirees meet to knit, chat, play
mahjong; ‘all my friends are here’
BY TE-PING CHEN back, then returned to chatting
with friends.
BEIJING—As Chinese mar- At this China Securities Co.
kets vacillated one day last stock-trading hall in central Bei-
month, Zhang Jie stood in a jing, markets may be down, but
stock-trading hall and did the good times are rolling.
natural thing: She danced a Earlier that day, at least six HOW DO YOU KEEP UP WITH 145 MILLION
stiff-armed simultaneous card ATHLETES WITHOUT BREAKING A SWEAT?
shimmy reminis- games were under IT’S SIMPLE. THE ANSWER IS SAP HANA.
cent of the Mac- way, including a
arena. boisterous one be-
Afternoon tween Ms. Zhang
trading had be- and friends, who
gun, and people debated who was
were trailing in winning while also
from the cold. Af- discussing what
ter a spirited kind of radish was
game of cards and a prolonged tastiest.
snack of home-pickled vegeta- Other retirees sat peeling
pomelo fruit or drinking tea.
in a good mood. Some napped. Others knitted,
“Is today more volatile than showing no sign of intending to
it was yesterday?” she called buy or sell stocks. SAP HANA® is helping Under Armour
across the hall to a retiree by a Across China are thousands reinvent the way we all keep fit.
See how at sap.com/hanastories
computer. The man nodded. of trading centers like this.
“Got it, brother!” she shouted Please see HALLS page A12
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 | Tuesday, February 16, 2016 * *** THE WALL STREET JOURNAL.

U.S. NEWS

Terror Convicts Pose Issue After Release BY NICOLE HONG Brooklyn, N.Y., jury selection so few will get deported after
Charging ISIS began Feb. 9 in the trial of serving their sentences.
The individuals arrested in the U.S. on charges related to Islamic As convicted Islamic State Tairod Pugh, a 48-year-old Some countries, including

U.S. ATTORNEY’S OFFICE/ASSOCIATED PRESS

State are mostly male U.S. citizens and often caught when they supporters in the U.S. serve U.S. Air Force veteran accused Indonesia and Saudi Arabia,
attempt to travel overseas to join the terrorist group. their sentences, authorities of attempting to join the ter- have so-called deradicalization
are tackling a new challenge: rorist group overseas. Mr. programs that seek to change
ISIS cases in the U.S., March 1, 2014 to Feb. 12, 2016: what to do with them when Pugh is pleading not guilty. In the ideologies of terrorist in-
Foreign fighters vs. Citizenship/ they get out of prison. Arizona federal court, jury se- mates before releasing them
domestic plotters immigration status Gender Since 2014, more than 75 lection will begin Feb. 16 in back into society, sometimes
people have been arrested in the trial of Abdul Malik Abdul with the help of former jihad-
the U.S. on charges related to Kareem, who is accused of ists who have disengaged from
Islamic State, a terrorist group hosting and providing weap- violence. In Germany, deradi-
also known as ISIS or ISIL. Of ons to the two gunmen who calization programs were
the 25 individuals who have died trying to attack people started in 2000 to rehabilitate
pleaded guilty, eight have been Mohammed Hamzah Khan last May in Texas at an exhibit neo-Nazis and have since in-
given prison sentences, while pleaded guilty in October 2015. of cartoons depicting the spired similar programs for Is-
the rest will be sentenced in Prophet Muhammad. Mr. Kar- lamic militants.
the coming months, according people involved in the discus- eem is pleading not guilty. Some U.S. experts are voic-
to Fordham Law School’s Cen- sions. A spokesman for the Most of the current Islamic ing concerns that government
ter on National Security. The Justice Department declined State-related defendants are programs to change inmates’
cases of those who haven’t to comment. charged with “providing mate- belief systems will collide with
pleaded guilty are pending. These types of programs rial support” to the terrorist civil liberties and freedom of
Some of those convicted haven’t been applied in the group, which often means religion. Singapore, which has
could be exiting prison as U.S., largely due to the rela- sending money to Islamic a well-known deradicalization
early as 2017, raising the ques- tively small number of con- State or attempting to travel program, relies “a great deal
tion of how to reintegrate victed terrorists. More than overseas to Syria, not commit- on religious leaders to take
them back into their commu- 300 inmates with a connection ting violent crimes. this interventionist approach,”
nities across the U.S. to terrorism may have been The federal material-sup- says Faiza Patel, co-director of
“What happens when these released in the U.S. since 2001, port statute carries a maxi- the liberty and national secu-
folks start getting out?” asked according to an analysis by mum sentence of 20 years in rity program at the Brennan
John Carlin, who heads the Human Rights First, a New prison. But the eight people Center for Justice in New
Foreign fighter U.S. citizen Men Justice Department’s national York nonprofit group. sentenced after pleading guilty York. “I don’t know how much
aspirants1 Lawful permanent resident Women security division. “There are Over the next five years, in Islamic State-related cases the U.S. government could do
Domestic plotters2 Refugee/asylum seeker programs for drug addicts and the issue is likely to become received an average sentence that without running afoul of
Cyber terrorists Unknown or not in the U.S. gang members. There is not more pressing, say govern- so far of more than nine years the First Amendment.”
Overstayed visa one with a proven track record ment officials and counterter- in prison, less than the aver- The issue of re-entry into
Type of crime and number of individuals charged of success for terrorism.” rorism experts. age sentence of more than 15 society has come up in a hand-
The Bureau of Prisons said Rep. Peter King (R., N.Y.), years for the 297 convictions ful of cases. Last October in
Material support 71
in a statement that inmates during a hearing of the U.S. on “jihadist terror crimes” Chicago, 20-year-old Moham-
Obstruction of justice; false statements; perjury 17 convicted on terror charges counterterrorism and intelli- overall from 2001 to 2013, ac- med Hamzah Khan pleaded
Weapons violations 16 have the same opportunity to gence subcommittee in Octo- cording to the Center on Na- guilty to a material-support
Conspiracy to kidnap, maim or injure in a foreign country 9 receive re-entry programming ber, said more than 100 in- tional Security. charge after attempting to
Weapons of mass destruction and explosive materials 8 as other inmates, including mates in federal prison with Experts say rehabilitating travel to Syria to join Islamic
Conspiracy to commit offense or defraud the U.S. 6 drug treatment and faith- links to terrorism would be re- sympathizers of Islamic State State with his two younger
Immigration violations 4 based programs. leased over the next five is especially important be- siblings in 2014.
Homicide of officers and employees of the U.S. 3 But as part of the govern- years. “We have never been cause they are younger than As part of his plea agree-
Violent crimes 3 ment’s broader initiative to faced with such large numbers typical terrorism defendants. ment, prosecutors recom-
Fraud 3
“counter violent extremism,” of terror inmates before,” said The average age of those ar- mended “violent extremism
the Justice Department and Mr. King, the chairman of the rested is 26 years old, mean- counseling” for him upon re-
Drug crimes 1
other agencies are exploring committee. ing many of them could be re- lease. A program would be
Computer crimes 1 The first trials of alleged Is- leased in their 30s and 40s.
the possibility of creating spe- chosen by the probation office,
1
Individuals who either allegedly succeeded in joining or attempted to join ISIS abroad. cial programs to help reinte- lamic State supporters in the Almost 90% of the Islamic the Chicago U.S. attorney’s of-
2
Individuals who allegedly devised attacks on U.S. soil. grate inmates with terrorism- U.S. are set to start this State-related defendants are fice said. Mr. Khan is sched-
Source: Center on National Security at Fordham Law THE WALL STREET JOURNAL. related charges, according to month. In federal court in U.S. citizens or legal residents, uled to be sentenced in June.

MARKET traded as much as 1.35%

Continued from Page One
biggest daily gain since Sep-
tember. Those moves followed
a 313.66 point gain for the
Dow Jones Industrial Average
on Friday.
The rally extended through
most Asian markets early
Tuesday, with the Shanghai
Composite Index up 2.5%,
Hong Kong’s Hang Seng Index
up 1.7% and Japan’s Nikkei up
0.9%.
Adding further optimism
for stock investors, European
Central Bank President Mario
Draghi on Monday said that
the bank “will not hesitate to
act” at its next policy meeting
in March if recent financial-
market turmoil or lower oil
prices weigh on inflation.
Also boosting sentiment
was China’s yuan, which hit its
higher against the dollar than
the previous close, its biggest
gain since 2005.
Those sorts of positive indi-
cators have been in the minor-
ity in 2016, as stocks broadly
have swooned. Those hardest
hit include economically sensi-
tive sectors such as banks, car
companies and consumer
shares. Meanwhile the prices
of safe government bonds
have surged, sending the yield
on the 10-year U.S. Treasury
note down more than half of a
percentage point this year.
Those trends, along with
rising credit spreads, reflect-
ing the yield premium inves-
tors demand for buying bonds
riskier than Treasurys, are
widely taken as possibly sig-
naling recession.
Yet many investors say they
aren’t seeing signs that the
U.S. economy is in danger of
falling into a recession, de-
expand, if at an uneven pace,
borne out in many months of
solid employment gains and,
U.S.
most recently, Friday’s stron-
ger-than-expected retail-sales Watch
data. Some say those relying
on market recession signals
risk watching a broken clock
that no longer reflects the in-
ternal health of the economy WEATHER
as it did before the age of ex-
pansive central-bank policy.
Winter Storm Snarls
Analysts and portfolio man- Traffic on East Coast
agers say they expect volatil- Snow and ice hampered
ity to continue to rise while much of the Eastern Seaboard
the debate plays out, a recipe on Presidents Day, causing traf-
for further large moves in fic accidents, highway closings
stocks, bonds and currencies. and flight cancellations.
“We are at a point of insta- Meantime, tornadoes touched
bility in markets,’’ said Jason down in Florida’s Panhandle and
Evans, co-founder of hedge in Mississippi, destroying up to
fund NineAlpha Capital LP in 10 homes, the Associated Press
New York, who is former head reported.
of U.S. government-bond trad- The storm moved into the
ing at Deutsche Bank AG and Northeast early Monday, fueled
Goldman Sachs Group Inc. by moisture from a low pressure
“People just don’t know what system in the South colliding
is going on.” with Arctic air that had sent
MICHELE TANTUSSI/GETTY IMAGES

strongest level this year after
the central bank guided it
sharply higher. The yuan
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fined as two quarters of con-
tracting output. Instead, they
see an economy continuing to
A widely followed gauge of temperatures plunging in many
volatility in the $13 trillion cities in the Northeast to record
U.S. government-bond market lows over the weekend.
reached a one-year high last FlightAware.com said more
week. Volatility in the cur- than 300 flights into or out of
rency markets is at its highest Ronald Reagan Washington Na-
level since late 2011, according tional Airport were canceled, as
to the JP Morgan Global FX were 250 traveling to or from
Volatility Index. New York’s La Guardia Airport.
Wall Street’s fear gauge, the ECB President Mario Draghi said the bank ‘would not hesitate to act.’ The forecast calls for higher
CBOE Volatility Index of op- temperatures later this week,
tions-based price-swing expec- into the ECB’s deliberations, economy is healing, even if said Mike Musher, a National
tations, rose last week though and on Wednesday the Federal clear-cut signs haven’t yet Weather Service meteorologist.
it remains well below its re- Reserve is scheduled to re- risen to the surface. That dy- —Jim Carlton
cent high last August. lease the minutes of its last namic is likely to keep markets
The moves capture the ris- policy meeting, which traders on edge for many months, PENNSYLVANIA
ing anxiety among money will scour for clues about U.S. they said.
managers over how to allocate officials’ desire to further “We are quickly approach-
Norovirus Confirmed
assets amid uncertainty over raise interest rates following ing a showdown between what In College Outbreak
economic growth and the im- December’s first increase in the market believes and what Norovirus has been confirmed
pact of exotic monetary policy nine years. the Fed believes,’’ said Kevin by health authorities as the
tools on the global financial On Friday, the government Giddis, head of fixed-income cause of a stomach illness that
system. will release the consumer- capital markets at Raymond sickened more than 200 stu-
Mr. Draghi’s comments on price index for January, giving James. “This obvious discon- dents last week at Ursinus Col-
Monday provided a window analysts a fresh chance to re- nect between the two is caus- lege in Collegeville, Pa., school
view signs that inflation, re- ing much of the recent volatil- officials said Monday.
THE WALL STREET JOURNAL cently below the Fed’s 2% tar- ity. That will likely continue Classes resumed Monday after
(USPS 664-880) get for 44 straight months, is until the data proves one right being canceled Thursday after-
(Eastern Edition ISSN 0099-9660)
(Central Edition ISSN 1092-0935) ticking up. and the other wrong.” noon and Friday. The school din-
(Western Edition ISSN 0193-2241) Interest-rate futures that Few believe that process ing hall was closed for a time, but
Editorial and publication headquarters:
1211 Avenue of the Americas, Wall Street uses to bet on the will be either quick or pain- it reopened after an inspection.
New York, N.Y. 10036 Fed’s rate policy are forecast- less, reflecting in part the pau- —Associated Press
Published daily except Sundays and general
legal holidays. Periodicals postage paid at New
ing no rate increases by the city of clear-cut economic sig-
York, N.Y., and other mailing offices. Fed this year. Yet many ana- nals at a time when the U.S. COLORADO
POSTMASTER: Send address changes to The lysts say they believe the remains by some measures the
Wall Street Journal, 200 Burnett Rd., Chicopee,
healthiest large economy even
Planned Parenthood
MA 01020.
All Advertising published in The Wall Street with headline growth figures Clinic Reopens
Journal is subject to the applicable rate card,
copies of which are available from the
Advertising Services Department, Dow Jones
CORRECTIONS  far below precrisis norms.
“We will look back at some
A Planned Parenthood clinic
in Colorado Springs has partially
AMPLIFICATIONS
& Co. Inc., 1155 Avenue of the Americas, New
York, N.Y. 10036. The Journal reserves the
point and say this is a blip, but reopened nearly three months
right not to accept an advertiser’s order. Only I think it’s going to be longer after a gunman killed three peo-
publication of an advertisement shall
constitute final acceptance of the advertiser’s
than six months,” said Jim ple there and injured nine. The
order. The “51 across” clue in the Sarni, managing principal at main entrance—damaged by a
Letters to the Editor: Friday, Feb. 12, daily cross- Payden & Rygel, who said mar- police vehicle during the re-
Fax: 212-416-2891; email: wsj.ltrs@wsj.com
word read “offensive lineman” kets could be volatile until the sponse to the Nov. 27 shoot-
NEED ASSISTANCE WITH and was to prompt the answer U.S. presidential election in ing—is sheathed in plywood.
YOUR SUBSCRIPTION? “halfback.” However, the clue November. Robert Lewis Dear has been
CONTACT CUSTOMER SUPPORT. was incorrect because a half- Of the economy, he said, charged with murder, attempted
By web: customercenter.wsj.com back in football is not a line- “It’s not hunky dory, but I murder and other counts. He has
By email: wsjsupport@wsj.com man. think things are on a solid acknowledged carrying out the
By phone: 1-800-JOURNAL footing.” shooting, citing abortions done
(1-800-568-7625) Readers can alert The Wall Street —Mike Cherney and at the clinic. A judge has ordered
Or by live chat at wsj.com/ Journal to any errors in news articles
livechat by emailing wsjcontact@wsj.com or Saumya Vaishampayan him to undergo a mental exam.
by calling 888-410-2667. contributed to this article. —Associated Press
 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL. Tuesday, February 16, 2016 | A3

U.S. NEWS

©T&CO. 2016
I WILL
REJECT 99.96% OF THE WORLD’S FINEST DIAMONDS
BECAUSE THERE’S A DIFFERENCE
BETWEEN QUALITY AND TIFFANY-QUALITY.
MAX WHITTAKER/REUTERS

A skier does a flip at Squaw Valley Ski Resort in Olympic Valley, Calif., Dec. 5, 2015, where renewed demand took resorts by surprise.

Lake Tahoe Bounces Back

Snowfall fueled by a year earlier. America. said John Monson, director of
“In the context of the past The number of skier days sales and marketing at Sugar
El Niño boosts ski four years, it’s as good as it fell there by 37% to 2.9 million Bowl, whose season-pass sales
800 843 3269 | TIFFANY.COM

resorts throughout gets,” said Andy Wirth, presi- in the 2013-14 season from 4.6 have soared 68% this season
dent and chief executive offi- million in the last big snow from last. “We’ve had days
Sierra Nevada region cer of Squaw Valley Ski Hold- season of 2010-11, according to bigger than in 10 years.”
ings Inc., whose namesake the California Ski Industry As- Andrew Ward said the
BY JIM CARLTON resort has been buried this sociation. drought had kept him away
season in nearly 25 feet of Industry officials say a pull- from the slopes since moving B E L M O N D M O U N T N E L S O N H OT E L ,
TAHOE CITY, Calif.—At this snow—more than in all of the back in flights at the nearby from Massachusetts to a San C A P E TOW N
time last year, so little snow 2014-15 season. Reno-Tahoe International Air- Francisco suburb three years
had fallen around Lake Ta- Ski resorts across much of port—which has since been re- ago.
hoe that a nearby golf course the Western U.S. are enjoying versed—also hurt ski visits. “I wanted to come last year, THE HEART
opened months earlier than bountiful snow conditions, in And then at the beginning but there wasn’t any snow,”
usual, and ski resorts had to
make their own powder on
contrast to the weaker perfor-
mance of many Eastern ski ar-
of November, the snow started
falling and didn’t really stop
said Mr. Ward, a 34-year-old
software engineer, as he took OF THE CITY,
runs flanked by bare ground. eas. until a dry spell that began in a break skiing last week at
But this year, Lake Tahoe is
once again a winter wonder-
Meteorologists say that is
in large part due to storms
early February.
Squaw Valley’s Alpine
Squaw Valley. “But now, al-
most all the runs are open.”
THE SOUL
land: resorts are enjoying the
most snowfall since Califor-
fueled by the El Niño weather
condition, which has also
Meadows resort opened in
mid-November, a month ahead
The onslaught has un-
leashed a spending boom. OF CAPE TOWN.
nia’s drought began more than helped keep the East warmer of schedule—and like other re- At Tahoe Mountain Sports in
four years ago. and drier than normal much of sorts, found there was unusu- Truckee, Calif., owner Dave
That is creating a positive the winter. ally strong interest in skiing Polivy said his sales of ski gear
ripple effect throughout the Western ski resorts typi- after the recent dry years. and other items have roughly
picturesque region in the Si- cally experience great swings “The pent-up demand of the doubled in the October-Janu-
erra Nevada, which has suf- in snowfall, given the region’s last four years has made more ary period from a year earlier.
fered economically due to the propensity to drought. people come up here,” said “When people are happy,
dry weather. Ski officials say unpredict- John “J.T.” Thompson, tourism they spend more,” he said.
Squaw Valley/Alpine Mead- able snowfall is prompting director of the North Outside the ski areas, snow
ows says it is on track to re- them to make changes so that Lake Tahoe Resort Associa- lovers have packed into res-
cord more than a million visi- the destinations can become tion, which reported a 17.7% taurants, bars and spas. A 30%
tors this season for the first more dependable attractions, surge in rental occupancies in jump in bookings for massages
time ever. such as by adding alpine January. at Well Being in Kings Beach,
Vail Resorts Inc. credits coasters and mountain bicycle The resorts were caught Calif., prompted the business
strong performance at its trails that don’t depend on somewhat off guard by all the to double its staff of contract
Heavenly, Northstar and Kirk- cold weather. demand, much of which came therapists to 10 from about
wood destinations at Ta- Few winter resorts have from the San Francisco Bay five last year, said co-owner
hoe for helping lift the com- been bit harder by Western Area about 200 miles west. Sarah Hughes.
pany’s overall U.S. ski visits drought than Lake Tahoe, “When Mother Nature did “It’s feast or famine,” Ms.
11.1% in the season which hosts one of the largest return, they came out in num- Hughes said. “And as of now
through Jan. 11 compared with collection of ski areas in North bers beyond our expectations,” we are feasting.”

Maryland University Money

To Latin
President Declines to Quit America
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8 0 0 - 2 3 7-1 2 3 6 O R C O N TAC T YO U R T R AV E L C O N S U LTA N T

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BY MELISSA KORN nesslike approach—including

A clash over the leadership

and direction of a historic
trimming retirement and
health-care benefits and talk-
ing about the need to focus on
Soars © 201 6 B elmond M a nagement Ltd . B elmond is a registered tradema rk .

Catholic university in the hills more marketable majors—ran- BY MIRIAM JORDAN

of northern Maryland showed kled many on campus.
MOUNT ST. MARY’S UNIVERSITY/ASSOCIATED PRESS

no signs of easing after the During their deliberations, The amount of money mi-
school’s embattled president some faculty members said grant workers world-wide sent
declined to resign by Monday they wanted to proceed with to Latin America and the Ca-
morning, as called for by the certain of Mr. Newman’s initia- ribbean reached $68.3 billion
faculty. tives, no matter the result of in 2015, surpassing a prereces-
In a 87-to-3 vote on Friday, the vote on whether he was sion peak of $64.5 billion in
the faculty of Mount St. Mary’s asked to resign. 2008, according to a report set
University demanded Presi- Board Chairman John Coyne to be released on Tuesday.
dent Simon Newman step said on Monday trustees chose The analysis by the Inter-
down following weeks of ten- Mr. Newman because they American Dialogue, a Washing-
sion over his leadership style sought a “change agent” who ton, D.C., think tank, attributed
and vision. They voted shortly could help the school achieve the increase to a spike in Cen-
after two professors were fired financial sustainability. He said tral American immi-
and Mr. Newman then offered Simon Newman Mr. Newman could “eradicate grants, devaluation of regional
to reinstate them earlier in the the fuzzy feelings and get currencies, and growing eco-
week. leges are struggling to stay down to data,” and lead the nomic opportunity in the
The firings came after a afloat as enrollments fall, costs school through a difficult but U.S. Most of the money came
student newspaper reported rise and families question the necessary transformation. from immigrants in the U.S.
on remarks by Mr. Newman value of an education that isn’t The president fired two fac- who help support family in
that likened students to bun- explicitly vocational. ulty members last week. Thane their countries of origin.
nies that needed to be Mount St. Mary’s, which has Naberhaus, a tenured associate “Remittance levels not only
drowned. He had made the about 2,200 undergraduate professor of philosophy, was are back at prerecession levels,
comments in reference to a and seminary students and a accused of not showing suffi- but we expect them to keep
proposed program that would $46 million endowment, is cient loyalty to the school and rising,” said Manuel Orozco,
weed out weaker students ear- largely dependent on student was dismissed by the presi- the report’s lead author.
lier in the school year, poten- tuition for revenue. Under Mr. dent without a standard fac- Guatemala had the biggest
tially bolstering the retention Newman, the school is seeking ulty review, drawing outrage jump in the total value of trans-
rate the school reports to the to add new programs and di- from academics nationwide. fers, increasing more than 15%
federal government. versify its revenue to become Mr. Naberhaus has been criti- to $6.3 billion. Honduras and El
Students of the Emmits- more financially sustainable, cal of Mr. Newman’s leader- Salvador had 10.9% and 3%
burg, Md., school held a vote according to William E. Davies, ship. Edward Egan, a law pro- growth to $3.72 billion and
of their own over the weekend, vice president for business and fessor and adviser to the $4.28 billion, respectively.
with the results of an online finance. student newspaper, also was Colombia had the second-
poll showing nearly 76% of re- Mr. Newman, a Stanford fired. largest increase in the region
spondents voting in favor of M.B.A. with a background in The proposed reinstate- last year, with a 13.3% jump to Adhaesio
Mr. Newman’s leadership Sun- consulting and private equity, ments of Messrs. Naberhaus $4.64 billion. One hand – two times
day night. Of the 1,573 under- challenged the student paper’s and Egan were effective imme- Despite a drop in Mexican
graduate students who were account of his remarks about diately, though neither had ac- immigration to the U.S., remit-
www.meistersinger.net
surveyed, 61% submitted re- struggling students. And the cepted the offer on Friday. tances to that country rose
sponses. Mount St. Mary’s board issued Messrs. Naberhaus and Egan 4.8% to $24.77 billion, which
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Newman said on Monday. were colluding to undermine Higher Ed, an online publica- ing on temporary agricultural Martin Pulli Fine Jewelry Philadelphia, PA; Aaron Faber Gallery New York, NY
“They’re our client. They’re the president. tion, reported Monday that the visas, others coming illegally Bassano Jewelry New York, NY; Saltzman‘s Watches and More Cranston, RI
our consumer.” He sought to reboot the lib- two were planning to go back not accounted for in official Danson Jewelers Hasbrouck Heights, NJ; Robert Goodman Jewelers Zionsville, IN

Many small, liberal arts col- eral-arts school, but his busi- to teach classes this week. data and better job prospects.
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 | Tuesday, February 16, 2016
Gloomy Campaign Rhetoric Shakes Markets
CAPITAL JOURNAL
GERALD F. SEIB
inancial markets are in
a precarious state,
while the underlying
U.S. economy looks increas-
ingly shaky. And the presiden-
tial campaign appears to be
making things worse.
Damage is being done on
three fronts.
The cam-
paign is re-
warding can-
didates who
talk down the
state of the
economy, adding to both con-
sumer and investor jitters. It
has scared financial markets
by making front-runners of
the two contenders—Donald
Trump and Sen. Bernie Sand-
ers—who offer the most radi-
cal economic formulas. And a
stilted campaign debate is
providing only sketchy discus-
sion of what candidates actu-
ally would do on fiscal and
tax policy if they win.
Heard on
the Stump
Trump Threatens
To Sue Cruz
Donald Trump threatened
Monday to sue Texas Sen. Ted
Cruz over questions regarding
Mr. Cruz’s eligibility to be presi-
dent, escalating a feud five days
before the Republican presiden-
tial primary in South Carolina.
Mr. Trump also questioned
those who have said former
President George W. Bush kept
the country safe after the Sept.
11, 2001 attacks and likened it to
saying the other team “scored
19 runs in the first inning but af-
ter that we played well.”
On Monday, he seemed intent
on focusing on Mr. Cruz, who
was born in Canada. The senator
is “the biggest liar” in the GOP
primary, Mr. Trump said, and de-
manded an apology for ads and
remarks he said misrepresent
his record on abortion, guns and
gay marriage.
A recent ad from the Cruz
camp questioned Mr. Trump’s cre-
dentials to choose a Supreme
Court justice, saying, “We cannot
trust Donald Trump with these se-
rious decisions.” Mr. Cruz said in a
Monday tweet: “You cannot simply
scream ‘liar’ when someone points
out your actual positions.”
In an interview Monday, Flor-
ida Sen. Marco Rubio said he be-
lieves Mr. Cruz is eligible to run
for president, but accused him
of lying repeatedly about his
own record and about Mr. Ru-
bio’s policy positions.
—Valerie Bauerlein, Josh
Dawsey and Janet Hook
‘This is the
most rattled
I’ve ever seen
Donald.’
TEXAS SEN. TED CRUZ Monday
after Donald Trump
threatened to sue him.
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Traders on the floor of the New York Stock Exchange last week.
That’s all on top of a gen-
eral anti-Wall Street tone in
both parties. The financial
world is taking note.
“Elections don’t move in a
straight line, but after last
night, investors can’t dismiss
the odds of an extreme elec-
tion outcome that poses ma-
jor risks to the stock market,”
Andy Laperriere, head of fis-
cal policy research at Corner-
stone Macro, wrote to clients
the day after Messrs. Trump
and Sanders won New Hamp-
shire’s Republican and Demo-
cratic primaries. “
Global forces well beyond
Trump Ramps Up Voter Outreach
Some question quality
of his ground game
in South Carolina as
GOP primary nears
BY JOSH DAWSEY
AND VALERIE BAUERLEIN
GREENVILLE, S.C.—About
three dozen Donald Trump
volunteers packed a downtown
office here Sunday afternoon,
using iPads, computers and
landlines to contact voters and
read detailed scripts praising
the candidate.
Other supporters fanned
out across the region’s neigh-
borhoods, rich and poor, hold-
ing iPhones with addresses
pinned on a map that is linked
to a campaign database.
Mr. Trump has been criti-
cized in other states for a
flawed ground game, and he
said his voter-turnout effort
fell short in Iowa. In South
Carolina, his aides set up shop
months ago, trying to buttress
a campaign built on star
power with more traditional
methods.
As in prior early-voting
states, Mr. Trump leads in
public surveys. In one recent
poll, conducted Feb. 10-12 by
CBS News/YouGov, Mr.
Trump’s support stood at 42%,
Texas Sen. Ted Cruz was at
20% and Florida Sen. Marco
Rubio had 15%. The challenge
is to get those backers to vote
in Saturday’s primary.
“We made 70,000 calls yes-
terday across the state,”
James Epley, the campaign’s
director for upstate South Car-
olina, said Sunday. “We
chuckle when people say we
don’t have a ground game. Un-
derestimate us at your peril.”
Still, many question some
aspects of the campaign. The
Trump voter lists are still less
Kasich Bets on Michigan for Momentum
BY BEN KESLING
ALLENDALE, Mich.—John
Kasich held rallies across the
state Monday as part of his
GOP presidential campaign
strategy to focus on states he
thinks he can win and pull
back from those he can’t.
The Ohio governor is bet-
ting big on Michigan, which
holds its Republican primary
March 8, as well as other
states, such as his home state,
where he hopes voters will be
drawn to his Midwestern roots
and affable approach. In con-
trast, he has scaled back cam-
paigning in South Carolina, a
state where he could finish
well behind the front-runners.
His strategy mirrors the
one he used weeks ago as he
conserved resources in Iowa,
and pushed hard in New
Hampshire. He ended up an
also-ran in Iowa, but finished
second in the Granite State
while appearing to rise above
P W L C 10 11 12
the campaign are pushing
down stock markets around
the world—the Dow Jones In-
dustrial Average has fallen al-
most 7% so far this year—in-
cluding slow American
economic growth that is being
exacerbated by a downshift in
world trade. Yet some fear
that the tenor of the campaign
is adding to the problems by
undermining confidence.
The diagnoses of economic
problems offered by Messrs.
Trump and Sanders are quite
different—one blames eco-
nomic woes on bad trade
deals and immigration, the
GOP candidate Donald Trump at a campaign stop Monday in Mount Pleasant, S.C., ahead of Saturday’s primary in the Palmetto State.
precise than other campaigns.
His biggest support is from
working whites without col-
lege degrees. Yet on Sunday, a
group of volunteers fanned out
in a wealthy neighborhood in
downtown Spartanburg, about
30 miles from Greenville.
Most residents they
reached said they were sup-
porting other candidates. “I’m
not going to vote for Donald
Trump,” said Mark VanGeison,
who answered the door and
said he wasn’t interested.
More than two dozen voters
said they had heard much
more from other major candi-
dates by mail, email and
phone. Few reported being
contacted by the Trump cam-
paign.
GOP legislators said they
have had lunch, coffee or at
least a phone call with many
candidates, but few have spo-
ken to Mr. Trump. Evangelical
the mudslinging of his fellow
Republicans, something voters
at his rallies noted.
“Until New Hampshire, no
one thought of him as a seri-
ous candidate,” said Allison
Brotherton, 21 years old, who
wore a John Kasich sticker on
her shirt, following his rally at
Grand Valley State University.
“He’s very likable. He shows
he has a lot of experience.”
Ms. Brotherton echoed the
sentiments of a number of
people at Mr. Kasich’s rallies
in Michigan on Monday, many
of whom only recently decided
to support the candidate.
“I hadn’t been impressed
with the field. I was looking
for a grown-up,” said Chris
Hall, 40, who decided to sup-
port Mr. Kasich after the New
Hampshire primary. “He’s a
real dude, and he’s got just
enough wonk in him, and ex-
perience, to get things done.”
Mr. Kasich has never led
the GOP field, but he has been
H T G K B F A M 1 2 3 4 5 6
other on Wall Street greed—
but both advance a similar as-
sertion that the economy is in
a bad state.
“The rhetoric from politi-
cians like Trump and Sanders
is so relentlessly gloomy, but
the facts don’t support this
narrative,” says Greg Valliere,
chief strategist for Horizon
Investments. “The labor mar-
ANDREW BURTON/GETTY IMAGES
ket is healing, autos have
done great, consumers have
more money in their pockets.
But the politicians only ped-
dle gloom, and that has cre-
ated a sour mood and a medi-
ocre economy.” He adds:
“Gloom sells.”
In response, Messrs. Sand-
ers and Trump are offering so-
lutions that would have been
outside the mainstream just a
few years ago. Mr. Sanders
proposes to raise the top two
tax rates to 48% and 52%. He
would impose a surcharge on
“Wall Street speculators,” and
would more than double the
federal minimum wage to $15
an hour. Mr. Trump goes in
the opposite direction on
taxes, with a plan that offers
the biggest tax cuts of any-
one—removing millions of
families from the tax rolls and
dropping the top personal rate
to 25% and the corporate rate
to 15%—in a plan that analysts
ministers said the same.
“For a while I thought the
most buzz was for Trump, but
I’m not so sure anymore,” said
GOP state Rep. Ralph Kennedy,
who said he is undecided.
The billionaire business-
man’s aides dismiss criticism
of their approach, saying most
traditional campaign spending
in Iowa and New Hampshire
was a waste, with some candi-
dates shelling out thousands
of dollars per vote only to
place deep in the pack.
Mr. Trump’s South Carolina
co-chairman, Ed McMullen, a
veteran of a GOP think tank,
said the centerpiece of Mr.
Trump’s strategy is his rallies,
which average 7,000 to 10,000
people. The campaign asks
supporters to sign up online
for tickets and uses their con-
tact information to follow up
with calls and emails. It also
uses demographic modeling to
carefully using his resources
on the ground to gain popular-
ity and cautiously avoiding in-
traparty brawls. He said he
would fight back but vowed
not to go negative.
“I’m not going to be a pin-
cushion or a marshmallow—
I’m going to run a positive
campaign,” Mr. Kasich said to
a crowd later in the day in
East Lansing. “I’ll just go back
to Ohio instead of going to the
dark side and trashing some-
one else.”
At his rallies, new support-
ers said they have warmed to
the governor in part because
he is an alternative to the
sheer vitriol from front-run-
ners during debates that
boiled over Saturday. As his ri-
vals called each other liars,
Mr. Kasich was left laughing
on stage and telling the mod-
erator: “This is just crazy.”
On the campaign trail, Mr.
Kasich is selling his congres-
sional experience working to
7 8 9 O I X X THE WALL STREET JOURNAL.
fear would balloon the deficit.
The part of the Trump
plan that most shakes the
markets is his call to ditch
free-trade deals such as the
new one negotiated with Pa-
cific nations and impose what
essentially would be tariffs on
imported goods from Mexico
and China. In the latter case,
he has suggested the tariff
rate should be an eye-popping
45%. “Donald Trump could
spark a trade war, is breath-
takingly uninformed on do-
mestic and national security
issues, and is utterly unpre-
dictable,” writes Mr. Laperri-
ere. “Bernie Sanders is calling
for a political revolution to
upend the existing economic
order through massively
higher taxes, crushing Wall
Street, and a single-payer
health care system.”
T
he broader market con-
cern is that Messrs.
Trump and Sanders will
push their parties’ policies
away from the mainstream
even if, ultimately, they don’t
win the nominations. Yet it’s
hard to tell just how far other
candidates are willing to travel
a similar path because of a
general paucity of serious eco-
nomic debate in the campaign.
Former Secretary of State
identify likely supporters, he
said. Mr. McMullen said no
other campaign is “doing the
kind of depth we’re doing,”
and other GOP models reliant
on publicly available voter
files have proven ineffective.
“Obama taught us a lot,”
said Mr. McMullen, citing
President Barack Obama’s
data-driven 2008 campaign.
“Republicans in the 2012 cycle
with [Mitt] Romney saw a sys-
tem blow up on Election Day.
You wouldn’t believe the inep-
titude. A lot of people made a
lot of money, for nothing.”
On Sunday, most volunteers
at the Greenville call center
said they had never worked
for a campaign. Many came
from out of state and stayed at
a local Econo Lodge.
Fuller Parker, a 20 year-old
college student, recently drove
an RV decorated with Mr.
Trump’s likeness across South
balance the budget and his gu-
bernatorial experience work-
ing with the Ohio Legislature
as proof he is ready to work
the day he takes office. But at
the same time, he is stressing
his outsider status, especially
as someone who can buck his
own party.
Ohio governor hopes
to replicate strategy
that netted success
in New Hampshire.
“The Republican Party is
my vehicle and not my mas-
ter,” he told a cheering crowd
in Allendale. “I take orders
from nobody.”
Though Mr. Kasich fared
well in New Hampshire and is
slowly moving up in the polls,
he still has some major hur-
dles, including South Carolina
next week and other southern
Hillary Clinton has offered a
tax plan with more modest
changes than the one pro-
posed by Mr. Sanders, pro-
posing a four-percentage-
point surcharge on the very
wealthiest taxpayers and rais-
ing the tax rate on many capi-
tal gains. But she also has
echoed some of Mr. Sanders’
anti-Wall Street rhetoric.
On the GOP side, an inter-
esting conversation started to
break out at a debate Satur-
day over the rival tax plans of
Texas Sen. Ted Cruz, who
proposes a combination of a
flat tax on personal rates and
what amounts to a flat value-
added business tax, and Flor-
ida Sen. Marco Rubio, who
proposes higher personal
rates but large credits to ease
burdens on families.
Yet such ideas aren’t
sparking the detailed debate
one would expect. “Normally,
elections settle back into pre-
dictable patterns and centrist
candidates of one shade or
another are elected, but the
anger many voters are ex-
pressing at the polls calls into
question whether the old
rules apply,” write the ana-
lysts at the Keefe, Bruyette &
Woods financial-services firm.
“We are increasingly believing
that they do not.”
MATT ROURKE/ASSOCIATED PRESS
Carolina, parking at Wal-Mart
stores to attract voters.
“Driving the RV is far better
than door knocking, Mr.
Parker said. ”They just flock
to you when you’re driving it.”
Yet the execution of the
turnout operation can be
spotty. Outside a livestock
arena in Clemson last Tuesday,
Mr. Parker and other volun-
teers left a sign-up table for
supporters unattended as
thousands streamed by, many
without pausing to jot their
names down.
South Carolina Lt. Gov.
Henry McMaster, Mr. Trump’s
most prominent backer in the
state, says stumping at the lo-
cal Lizard’s Thicket Southern-
cooking restaurant would be a
waste of time. “The difference
is, most candidates have to go
to the people,” Mr. McMaster
said. “With Donald Trump, the
people come to him.”
states on March 1. And while
he might be getting more at-
tention now, he is still at the
back of the pack with fellow
Republicans on fundraising.
“You go and do what you
can with what you have,” Mr.
Kasich told reporters when
asked if his strategy to cherry-
pick the states he is focusing
on could be dangerous. “I
gotta go to where I think is
the most fertile ground. And
there’s a lot to do.”
At events across Michigan,
the Kasich style is paying divi-
dends, as evidenced by a
string of people at his cam-
paign stops who said they
have recently come around to
him and finally think he might
be able to win.
“I’ve always liked him from
the beginning but I didn’t back
him because I didn’t think he
has what it takes to win,” said
Tim Zwartz, 22. “Now that
there’s six candidates, he’s not
just the one on the end.”
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL. Tuesday, February 16, 2016 | A5
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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A6 | Tuesday, February 16, 2016
VOTE
Continued from Page One
generations were just a few de-
cades ago.
Yet any millennial advantage
for Democrats will matter only
if young people are motivated
and turn out to vote, which
may be easier said than done.
A poll by Harvard’s Institute of
Politics late last year found
that young voters, who are al-
ways less inclined to vote than
their elders, are more disen-
gaged in politics than they
were just four years ago.
For many, the ardor for Mr.
Obama has cooled over his two
terms, and it isn’t clear that
Mrs. Clinton, if she is the nom-
inee, can engender the enthusi-
asm among young people that
Mr. Sanders has or Mr. Obama
once did. Sensing an opening,
Republican candidates are try-
ing to move in.
In the Iowa caucuses, the
two youngest candidates in the
GOP field drew the most sup-
port from young voters. En-
trance polls indicated that Sen.
Ted Cruz, 45, pulled 27% of the
under-30 vote, and Sen. Marco
Rubio, 44, drew 24%, while
businessman Donald Trump
got 19%. In the New Hampshire
GOP primary, the antiestablish-
ment candidates did best with
young voters, with Mr. Trump
winning 37%, and Mr. Cruz,
16%.
The Democratic Party is fac-
ing the historically difficult
task of holding the White
House for a third term, some-
thing that has happened only
once in the last seven decades.
Democrats are counting on
young people as a key to help
Mrs. Clinton overcome nega-
tive feelings many other vot-
ers—particularly older white
males—have about her. Accord-
ing to the latest Wall Street
Journal/NBC News poll, the
only age group that views Mrs.
Clinton more positively than
negatively is 18- to 34-year old
bracket.
In any case, millennials are
distinctive on a variety of
fronts, as seen in a 2014 Pew
Research Center study. It found
them:
• The most ethnically di-
verse generation in U.S. his-
tory. Some 43% are nonwhite,
compared with 28% of baby
boomers.
• Less religious than their
elders. Some 35% aren’t reli-
giously affiliated, compared
with 17% of boomers.
• Slower to marry. Twenty-
six percent were married be-
tween ages 18 to 33, down
from 48% of that age bracket
in 1980.
The Republican Party has
traditionally drawn its greatest
support from white, religious,
married people with traditional
values.
“The groups Republicans do
well with, these are all demo-
graphic traits that are shrink-
ing among millennials,” says
Kristen Soltis Anderson, a Re-
publican pollster who has been
studying millennials for years
and discusses them in her
book, “The Selfie Vote.” “It
spells bad news for Republi-
cans.”
Not so long ago, young peo-
ple voted differently.
In 1980, 18- to 29-year-olds
divided almost equally between
Jimmy Carter and Ronald Rea-
gan. Four years later, they
picked Mr. Reagan over Walter
Mikayla Bodey, 20, a student at Ohio State University, says she plans to vote for Hillary Clinton.
Youth Tilt
Although many young voters don't identify with either party, polling data suggest they will present a
challenge to Republicans and establishment Democrats this election cycle.
Party preference to win Entrance poll results for candidate preference
the presidential race among 17- to 29-year-olds in the Iowa caucuses…
among 18- to 34-year-olds
DEMOCRAT
60%
Bernie Sanders
Hillary Clinton
27% REPUBLICAN
Ted Cruz
Marco Rubio
Democrat Republican Donald Trump
Sources: WSJ/NBC News telephone poll of 800 registered voters, including 237 18- to 34-year-olds, conducted Jan. 9-13, full sample margin of
error: +/–3.46 pct. pts (party preference); National Election Pool entrance/exit polls conducted by Edison Research
Mondale, and then George H.W.
Bush over Michael Dukakis.
When millennials first began
voting, in 2000, 18- to 29-year-
olds split almost evenly be-
tween Al Gore and George W.
Bush.
But beginning in 2004,
when they chose John Kerry
over Mr. Bush, young people
have tilted Democratic. In
2008, Mr. Obama won that age
group by 34 percentage points,
and in 2012, by 23 points.
For the coming election,
60% of 18- to 34-year-olds indi-
cated that they preferred a
Democrat to win the White
House, and 27% indicated Re-
publican, according to latest
Wall Street Journal/NBC News
poll.
In the 2014 midterm elec-
tions, the turnout among mil-
lennials didn’t match that of
other age groups—a typical
pattern with young voters.
Moreover, Democrats didn’t
win as large a percentage of
them as two years earlier.
That points to the nagging
question for Democrats:
whether their recent advantage
has been mostly a result of
President Obama’s millennial
appeal.
Democrats profess confi-
dence that their edge among
young voters will outlast Mr.
Obama. Republicans see oppor-
tunity to make gains because
millennials are far less at-
tached to traditional political
parties than their elders.
“Obama had this ability to
mobilize young people. They
bought into him as a person,”
says Raffi Williams, a Republi-
can National Committee offi-
cial who is working on a pro-
gram to expand the party’s
outreach to millennials. “With-
out Obama there, we are com-
ing onto equal ground trying to
win over young voters.’’
…and exit poll results for
18- to 29-year-olds in the
New Hampshire primary
84%
14
27
24
19
Both parties are watching
millennials carefully because
young people are seen as shap-
ing debate on social issues
such as gay marriage and racial
diversity.
“I kind of hate to say it,”
says GOP pollster Bill McIn-
turff, “but the millennial gen-
eration is now important. Their
views are becoming the domi-
nant public views. Their atti-
tudes about gay marriage and
social tolerance are radically
different than the previous
generations, and they are re-
structuring our views.”
The shift among young vot-
ers on social issues cuts across
race and party. On gay rights,
64% of millennial Republicans
believe homosexuality should
be accepted in society, com-
pared with 45% of baby
boomer Republicans, according
to the 2014 Pew Research Cen-
ter survey. On immigration,
57% of millennial Republicans
say immigrants strengthen the
country, compared with 39% of
baby boomer Republicans.
Economic issues don’t cut
clearly in either party’s favor.
Young voters have experienced
an economy shadowed by
debt—the government’s and
their own.
Many millennials entered
the workforce in the throes of
the 2008 financial crisis and
the slow-growth period that
followed.
For Chase Hagaman, 27, of
Portsmouth, N.H., the $250,000
debt he carries from college
and law school is one factor in
his and his wife’s decision to
postpone having children. Mr.
Hagaman works for the Con-
cord Coalition, a group that ad-
vocates for federal-deficit re-
duction. He brought his
concerns to a New Hampshire
town hall meeting of Ohio Gov.
John Kasich.
* * THE WALL STREET JOURNAL.
For the Republican front-
runner, Mr. Trump, the grow-
ing millennial vote cuts two
ways.
Some younger voters like
his unscripted style. “He’s the
most honest candidate we’ve
ever had,” says Robbie Maass,
34, a Republican farmer from
Ellsworth, Iowa. “His antics
have garnered a younger audi-
ence to take a look at the Re-
publican Party more than they
ANDREW SPEAR FOR THE WALL STREET JOURNAL
normally would.”
But his anti-immigration
stands pose a risk of alienating
young voters and making it dif-
ficult in a general election to
win the large cohort of His-
panic millennials. The latest
Wall Street Journal/NBC News
poll found that 69% of Hispanic
voters overall viewed Mr.
Trump negatively, and 22%
positively. Among all ethnici-
ties, the poll found that 18- to
34-year-olds are the least likely
age group to view Mr. Trump
favorably, with only 17% rating
him positively.
The generation’s racial di-
versity has thus far helped the
Democrats. Hispanics and
blacks overwhelmingly favored
Democrats and Mr. Obama in
recent elections, while whites
83%
tilted Republican. In 2012, His-
16 panic millennials favored Mr.
Obama by 74% to 23%, while
white millennials broke for
16
Mitt Romney 51% to 44%.
For Mrs. Clinton, the results
12 in Iowa and New Hampshire
reveal that she has much work
37 to do to win over millennials.
She has succeeded with Mi-
kayla Bodey, 20, a student at
THE WALL STREET JOURNAL. Ohio State University. Ms.
Bodey says she had been inter-
“We should be electing indi- ested in Mr. Kasich, whose re-
viduals willing to confront fis- cord as Ohio’s Republican gov-
cal issues,” he said in an inter- ernor she admired. Then she
view. heard Mrs. Clinton speak at a
Pete Lashier, a 19-year-old Columbus rally about the im-
marketing student at Iowa portance of women’s rights.
State University, says fiscal is- When she met the candidate
sues are a priority. on the rope line, Ms. Bodey
“We’re in a huge hole that says, she wept with emotion.
could end up as something my She is now committed to
generation has to be responsi- Mrs. Clinton, she says, because
ble for,’’ says Mr. Lasher, who of the tone and rightward tack
says he is inclined to vote Re- of the GOP candidates. “I feel
publican. “I’m not super like they are not speaking to
pumped up about that.” me anymore,” she says.
College debt is a concern for But as Iowa and New Hamp-
many young voters. shire revealed, Mr. Sanders is
“I have almost $20,000 in something of a campus phe-
loans, and I’m only a sopho- nom, even though, at 74, he is
more,” says Zach Rodgers, 20, the oldest candidate on the
an Iowa State student who is campaign trail. Much of early
working with the Clinton cam- Mr. Sanders’s fundraising suc-
cess was the handiwork of a
Democrats are 24-year old who built a popu-
lar fan forum for him on Red-
counting on young dit.
people to support Ms. Sanderlin, the 26-year-
old from Richmond, Va., says
Mrs. Clinton. she is supporting Mr. Sanders
because he has been consistent
on his positions through a long
paign and sees college afford- career in politics, while Mrs.
ability as a major issue among Clinton shifted on issues such
his peers. “Whether you are a as gay marriage and the Iraq
Republican or a Democrat, stu- war. “I feel like she has
dents are trying to get candi- changed her mind on things
dates to talk about it.” because that is what is popular
Some GOP presidential can- for Democrats right now,” says
didates have been looking for Ms. Sanderlin.
an opening in the economic John Della Volpe, who as di-
pressures that millennials feel. rector of polling at the Harvard
“The consequences of Institute of Politics has been
Obama’s agenda have really surveying millennials since
come home to roost” for young 2000, says young voters gener-
people, Mr. Cruz of Texas told ally seem less interested in
a college audience in New politicians’ résumés than in
Hampshire in January. their candor.
Mr. Rubio is the youngest “Young people are really
major GOP candidate and the less interested in past accom-
one most explicitly pitching his plishments and more inter-
message to younger voters. He ested in today and the future,”
talks frequently about his own he says. “They look for candi-
student loan debt. In January dates who are focusing emo-
he launched a video ad tar- tion, talking about the mo-
geted at millennial voters. ment, being authentic.”
HHHHH
CAMPAIGN
WIRE
HHHHH
REPUBLICAN PRIMARY
George W. Bush
Joins Campaign Fray
Making his first campaign ap-
pearance since leaving the White
House, former President George
W. Bush went to South Carolina
Monday to vouch for his brother,
Jeb Bush, as a “serious candidate”
and draw an implicit contrast with
GOP front-runner Donald Trump
in what could be a defining mo-
ment of the Bush family’s pursuit
of a third presidency.
The former president didn’t
mention Mr. Trump but seemed
to allude to the New York bil-
lionaire more than once, saying,
“We do not need someone in
the Oval Office who mirrors and
inflames our frustration.”
Later, he told hundreds at a
North Charleston rally that “the
strongest person usually isn’t
the loudest one in the room. I’ve
seen in my brother a quiet con-
viction and a core of conscience
that cannot be shaken.”
The appearance comes at a
critical juncture in Jeb Bush’s
2016 campaign. Failing to get
more votes than Florida Sen.
Marco Rubio and Ohio Gov. John
Kasich in Saturday’s South Caro-
lina primary would be a major
setback to the former Florida
governor’s goal of consolidating
support in his party’s establish-
ment. He placed sixth in Iowa
and fourth in New Hampshire.
More broadly, the former
president is stepping into an in-
tense debate over his family’s
legacy and the GOP’s future ig-
nited by criticism from Mr.
Trump, who at Saturday’s de-
bate ripped into the former
president for failing to prevent
the Sept. 11 attacks and accused
him of lying about weapons of
mass destruction in Iraq.
Mr. Trump’s criticism could
backfire in a military-friendly
state where the Bush family has
strong ties. Victories in the state
primary helped both former
Presidents George H.W. Bush
and George W. Bush lock down
the nominations. George W.
Bush has continued to support
veterans in the state and nation-
wide since he left office, and he
and former first lady, Laura
Bush, visited an American Le-
gion post in Columbia.
—Beth Reinhard
NEVADA CAUCUSES
Lack of Polls Leaves
Outcome in Doubt
With five days to go before
the Nevada Democratic cau-
cuses, there are so few polls
that the state of the race is al-
most a total mystery.
Nevada is the third state in
the Democratic nominating pro-
cess, but only six public polls
have been conducted in the past
year. Iowa, by contrast, was
polled nine times in January
alone—and nearly 100 times in
the year leading up to the Feb-
ruary caucuses. New Hampshire
residents were polled nearly 50
times in the weeks leading up to
their primary. As a result of the
scarcity of public polling, the
race between Secretary of State
Hillary Clinton and Vermont Sen.
Bernie Sanders in the state is al-
most totally unknown.
—Byron Tau
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. * * * * * Tuesday, February 16, 2016 | A7

AFTER SCALIA

Justice Leaves Larger-Than-Life Legacy

BY JESS BRAVIN hibition of their use is invalid.”
In a 2013 dissent, he dis-
The death of Justice Antonin missed the majority’s rationale
Scalia means the Supreme for striking down parts of the
Court has lost a justice who federal Defense of Marriage Act
during three decades there in- as “legalistic argle-bargle” that
vigorated conservative jurispru- would inevitably lead to a later
dence, revived a focus on the holding that same-sex couples
Constitution’s original meaning had a constitutional right to
and emerged as a larger-than- marry. The court reached that
life figure. conclusion two years later.
Mr. Scalia, who was found Yet he also joined Jus-
dead over Presidents Day week- tice Ruth Bader Ginsburg—the
end while stay- liberal icon who for decades had
OBITUARY ing at a Texas been his closest personal friend

CHARLES TASNADI/ASSOCIATED PRESS

ANTONIN resort, was 79
SCALIA years old. His
1936-2016 death has
prompted an
outpouring of
condolences from across the
political spectrum, with admir-
ers and foes praising his intelli-
gence, wit and impact on Amer-
ican law.
“He was an extraordinary in-
dividual and jurist, admired and
treasured by his colleagues,”
Chief Justice John Roberts said
in a statement for the court.
“His passing is a great loss to
the court and the country.”
President Barack
Obama called the Reagan ap-
pointee “one of the most conse-
quential judges and thinkers to
serve on the Supreme Court.”
The justice’s son, Eugene
Scalia, released a written state-
ment Sunday on behalf of his
eight siblings. “We were blessed
to have a father with great wit,
warmth, and compassion. We
mourn his loss, while smiling in
remembrance of our time with
him. We are proud of his contri-
Justice Antonin Scalia was appointed by President Ronald Reagan and sworn by then-Chief Justice Warren Burger in 1986.
butions to the court and the
country.”
Officials said Justice Scalia,
who was visiting the Cibolo
Creek Ranch during the court’s
winter break for a hunting trip,
apparently died overnight of
natural causes. He went to bed
early Friday night, telling
friends he felt tired, the officials
added. In the morning, he didn’t
get up for breakfast, and when
people went to check on him,
he was found unresponsive.
Whoever succeeds Justice
Scalia will have big shoes to fill.
The former law professor
brought an outsize personality
and an intellectual clarity to his
work, writing lines so memora-
ble they have been adapted for
stage and opera.
Born in Trenton, N.J., and
raised in Queens, N.Y., Justice
Scalia attended Georgetown
University and Harvard Law
School. He practiced law in
Cleveland, taught law at the
University of Virginia and the
University of Chicago and
served in the Richard Nixon and
Gerald Ford administrations.
President Ronald Reagan ap-
pointed him to the U.S. Court of
Appeals for the District of Co-
lumbia Circuit in 1982, and four
years later elevated him to the
Supreme Court. The Senate
confirmed him, 98-0.
Justice Scalia came to the
bench as a champion of origi-
nalism, which sought to apply
the Constitution according to
the meaning its text held at its
adoption. Conservatives saw it
as a corrective to the “living
Constitution” approach backed
by liberal justices who said they
should interpret foundational
principles in light of changing
times.
Justice Scalia wrote historic
rulings on gun rights, criminal
law and free speech, and dis-
sented, sometimes furiously,
from landmark decisions ex-
panding gay rights, reining in
on the court—in decisions pro-
tecting criminal defendants from
intrusive searches and affirming
rights of state juries to award
punitive damages as they see fit.
He asserted there was no in-
consistency. Rather, he said he
followed his originalism ap-
proach wherever it led. For that
reason, Justice Scalia joined lib-
erals to hold that the First
Amendment protects the right
the death penalty and affirming to burn the American flag—even
abortion rights. as he expressed his personal
In 2008 he wrote a 5-4 rul- distaste for the “sandal-wearing,
ing striking down Washington, scruffy bearded weirdo” who
D.C.’s ban on handguns in an might wish to do so.
opinion that for the first time He was an inspiration to gen-
said the Second Amendment erations of legal conserva-
confers gun ownership rights in tives—many of whom passed
the home. through his chambers as law
“There are many reasons clerks before going on to pow-
that a citizen may prefer a erful careers in law and govern-
handgun for home defense,” he ment—and his charisma knew
wrote, citing a list of advan- no ideological bounds.
tages handguns offer for per- After Justice Ginsburg, per-
sonal protection. “Whatever the haps his closest friend on the
reason, handguns are the most court was the newest jus-
popular weapon chosen by tice, Elena Kagan, whom he in-
Americans for self-defense in troduced to the pleasures of
the home, and a complete pro- hunting.

No Clear Confirmation Parallels in Recent Court History

BY BRENT KENDALL
WASHINGTON—The Senate
in rare instances has con-
firmed Supreme Court justices
in an election year near the
end of a presidential term, but
those cases don’t offer clear
parallels to the circumstances
following the death of Justice
Antonin Scalia.
Justice Scalia’s death has
created an opening in a heated
election season and prompted
Republicans to say his succes-
sor should be chosen by the
next president. President Ba-
rack Obama said he would
nominate a successor and ex-
pected the Senate to consider
his choice.
Justice Scalia is the fourth
Supreme Court justice to die in
office since 1950. Most justices
in modern times have left the
court through retirements, of-
ten aiming to depart when the
president is most likely to ap-
point a like-minded successor.
The last justice to obtain an
election-year seat on the court
was Justice Anthony Ken-
nedy, who was confirmed
unanimously by the Demo-
cratic-controlled Senate in
early 1988. He was nominated
by President Ronald Reagan in
late 1987, and only after two
earlier nominations fell be-
cause of partisan wrangling
and personal revelations, leav-
ing the seat open for months.
Mr. Reagan’s first choice for
the slot, Robert Bork, was re-
jected by the Senate in 1987 ing Justice Abe Fortas as chief
amid concerns, predominantly justice to succeed the retiring
from Democrats, that his views Earl Warren, and the naming
were outside the legal main- of Judge Homer Thornberry to
stream. A second nominee, fill the Fortas seat. The Sen-
Douglas Ginsburg, withdrew in ate’s tactics ultimately allowed
part because of his admission President Richard Nixon to fill
to past marijuana use. two vacancies, as Justice For-
In 1968, the Senate pre- tas left the court the next year.
vented lame-duck President —Jess Bravin
Lyndon Johnson from appoint- contributed to this article.

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A8 | Tuesday, February 16, 2016 NY * *** THE WALL STREET JOURNAL.

AFTER SCALIA

BATTLE Confirmation Gantlet

Continued from Page One
the party’s conservative base.
That base is important to sen-
ators in those closely fought
states, and the swing-state Re-
publicans within days em-
braced the strategy.
“I believe the best thing for
the country is to trust the
American people to weigh in
on who should make a lifetime
appointment that could re-
shape the Supreme Court for
generations,” Republican Sen.
Rob Portman of Ohio, who is
up for re-election, said in a
Monday statement.
He joins GOP Sens. Ron
Johnson of Wisconsin, Kelly
Ayotte of New Hampshire and
Pat Toomey of Pennsylvania,
all in tight races, in siding
with the Republican leader.
Sen. John McCain of Ari-
zona, who is considered a cen-
trist on topics such as climate
change and immigration and is
up for re-election, also said on
Monday the president who
succeeds Mr. Obama should
choose the next justice.
But the strategy, popular
with conservatives, also leaves
Republicans open to criti-
cism—already manifest on the
campaign trail—that the Sen-
ate would be neglecting its
constitutional duties for politi-
cal gain, a charge that could
be especially cutting for Mr.
McConnell, who has touted his
efforts to make the Senate
function again.
The key may be how main-
taining that stance over the
next 8½ months before the
November elections plays with
independent voters who often
say they want to see Washing-
ton working. The potential to
alienate moderates would be
greater if Mr. Obama, who has
said he plans to put forward a
nominee in coming weeks, se-
lects someone more moderate
than his previous picks, Elena
Kagan and Sonia Sotomayor.
Democrats like Ted Strick-
land, who is running against
Mr. Portman, are playing up
the issue. “Senator Portman is
failing to do his job, shirking
his responsibilities to our na-
tion, jeopardizing the institu-
Duration of previous Supreme Court nominees’ confirmation processes
Announced
John Paul Stevens 1975
Sandra Day O’Connor 1981
William Rehnquist* 1986
Antonin Scalia 1986
Robert Bork 1987
Anthony Kennedy 1987
David Souter 1990
Clarence Thomas 1991
Ruth Bader Ginsburg 1993
Stephen Breyer 1994
John Roberts Jr. 2005
John Roberts Jr.* 2005
Harriet Miers 2005
Samuel Alito Jr. 2005
Sonia Sotomayor 2009
Elena Kagan 2010
0 21 days
*Nominated to chief justice Source: U.S. Senate
With the GOP Primed for a Fight, List of Possible Nominees Shrinks
Republican opposition to fill-
ing the Supreme Court vacancy
means President Barack Obama
may have to eliminate candi-
dates he might favor in a differ-
ent political climate. Against this
backdrop, here are some candi-
dates who could be in the mix:
Sri Srinivasan, 48, was con-
firmed unanimously in 2013 as
Mr. Obama’s first judge on the
U.S. Court of Appeals for the
District of Columbia Circuit,
considered the nation’s second
most powerful court. Born in In-
dia and raised in Kansas, Judge
Srinivasan worked in the U.S.
Solicitor General’s office during
Democratic and Republican ad-
ministrations and was a law
clerk to two Republican-nomi-
nated jurists: Justice Sandra
tions of our democracy and
engaging in exactly the kind of
dysfunctional behavior that
frustrates Ohioans about Con-
gress,” Mr. Strickland said.
Still, so far, only one Senate
Republican has come close to
questioning Mr. McConnell’s
strategy. “It seems premature
for Washington to be speculat-
Formally nominated Judiciary committee hearings begin
42
Sri Srinivasan Merrick Garland
Day O’Connor and Judge J. Har-
vie Wilkinson. Nominating him
now potentially could damage
his prospects for a future court
post when the chances of con-
firmation are more likely.
Merrick Garland, the 63-
year-old chief judge of the D.C.
Circuit, is respected in both par-
ties and considered a careful,
experienced judge not driven by
ideology. His age would mean
the president may not leave as
lasting an imprint as with a
ing so soon about a new Su-
preme Court nominee,” said
Republican Sen. Susan Collins
of Maine. “Our role in the Sen-
ate is to evaluate the nomi-
nee’s temperament, intellect,
experience, integrity, and re-
spect for the Constitution and
the rule of law.”
Even if Republicans were to
Referred to full Senate
NUMBER OF DAYS
Nomination to associate justice withdrawn
63 84
Randy Yeip/ THE WALL STREET JOURNAL.
Jane Kelly Paul Watford Loretta Lynch
younger nominee, though that
could make him a more appeal-
ing to Republicans. A Clinton
pick for the federal bench, he
has served on the appeals court
since 1997.
Jane Kelly, 51, received unan-
imous Senate confirmation in
2013 for a seat on the St.
Louis-based Eighth U.S. Circuit
Court of Appeals. She spent
nearly 20 years as a federal
public defender, giving her
criminal-defense expertise, and
agree to hold a nomination
hearing and schedule votes, it
isn’t clear that Mr. Obama’s
nominee could muster the 60
votes needed to get past a
procedural hurdle on the Sen-
ate floor, or even the 51 votes
for confirmation. Democrats
control only 46 seats and need
14 Republicans to take up the
Senate action
COMMITTEE SENATE
VOTE
15–0
17–0
13–5
18–0
5–9
14–0
13–1
7–7
18–0
18–0
13–5
Withdrawn
10–8
13–6
13–6
105
previously enjoyed support
from Iowa GOP Sen. Charles
Grassley, the head of the Sen-
ate Judiciary Committee.
The president also could
seek to name his first African-
American high-court nominee.
His options would include
Judge Paul Watford, 48, who
was confirmed in 2012 to the
Ninth Circuit in San Francisco,
and Attorney General Loretta
Lynch, though her confirmation
last year was delayed and she
garnered only 56 votes.
There also is the chance the
president could consider a poli-
tician or a state-court judge, or
perhaps even someone previ-
ously nominated by a Republi-
can president.
—Brent Kendall
nomination. After that, Demo-
crats would need to peel off
five Republicans to confirm
the new justice.
The highly polarized Senate
Judiciary Committee could
present another set of prob-
lems. The chairman, Republi-
can Sen. Charles Grassley of
Iowa, has an investigative bent
and likes to dig for informa-
tion, an approach that Demo-
crats complain has in the past
delayed the confirmation of
important officials, such as At-
torney General Loretta Lynch.
Moreover, Republican presi-
VOTE
98–0 dential contender Sen. Ted
Cruz of Texas is on the Judi-
99–0
ciary Committee, a perch that
65–33 he uses to push other Republi-
98–0 cans toward hard-line conser-
vative positions. Making mat-
42–58 ters more potentially explosive
97–0 is the presence of a dynamic
that coincides with some of
90–9
the ugliest confirmation bat-
52–48 tles in living memory. For the
96–3 first time in a quarter century,
a committee controlled by one
87–9
party will be asked to consider
a Supreme Court nominee
78–22 picked by a president from the
other party.
The last time Senate Judi-
58–42 ciary took up a Supreme Court
nominee selected by a presi-
68–31
dent from the opposite party
63–37 was 1991, when then-President
George H.W. Bush nominated
Clarence Thomas. The Demo-
cratic-controlled committee
initially rejected him after a
hearing that featured explicit
testimony from a former law
professor, Anita Hill, who ac-
cused Mr. Thomas of sexually
harassing her. Mr. Thomas de-
nied the allegations.
The panel ultimately sent
the nomination to the Senate
floor without a recommenda-
tion, but the battle hung for
years over Justice Thomas,
who rarely speaks from the
Supreme Court bench.
Some GOP aides said vul-
nerable Republican incum-
bents would find it easier po-
litically to distance themselves
from Mr. McConnell’s stance,
if necessary. And some Repub-
lican strategists said the blan-
ket opposition to any Obama
nominee wouldn't alienate
centrist voters.
“I have a hard time believ-
ing that the center of the elec-
torate will conclude that the
Senate has an obligation to put
another left-wing Justice on
the court,” said Josh Holmes,
Mr. McConnell’s former chief
of staff, who ran his 2014 cam-
paign. “Reasonable people will
conclude that voters ought to
have a say with their vote for
the next president.”

MODERN & CONTEMPORARY ART SCALIA justice isn’t about “some ab-
stract legal theory,” but “about
the reality of how it affects peo-
TOM WILLIAMS/CONGRESSIONAL QUARTERLY/ZUMA PRESS

ple’s lives,” the spokesman said.

Continued from Page One
May 2, 2016 | New York | Live & Online where in the Senate. Other Re-
publican senators have taken
the same view.
“I intend to make 2016 a ref-
erendum on the Supreme
Court,” Sen. Ted Cruz of Texas,
a Republican presidential candi-
date, said Monday while cam-
paigning in South Carolina.
While the Senate has in the
past confirmed Supreme Court
justices in a presidential elec-
tion year, those cases are rare
and most occurred before the is-
sue of judicial appointments be-
came such a political flashpoint.
The last Supreme Court nomi-
nee to be confirmed during an
election year was Justice An-
thony Kennedy in 1988. But his
nomination had been announced
the previous year, and came af-
ter President Ronald Reagan’s
first two nominees fell through.
Justice Kennedy received unani-
mous support in the Senate.
A protracted fight over a suc-
cessor could hobble the Supreme
Court as it prepares to rule on
politically divisive cases involv-
ing abortion, contraception cov-
erage, unions and voting rights.
Conservatives had been counting
on their narrow majority; an
empty seat instead could result
in a 4-4 deadlock. Among them:
 A challenge to a Texas law
requiring abortion clinics to
meet the standards of ambula-
tory care centers and doctors to
hold admitting privileges at a
local hospital.
 A California case question-
ing whether public employees
can be required to join a union
or pay it a fee for collective-bar-
gaining services.
 Claims that the Obama ad-
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avoid providing contraceptive
coverage under the Affordable
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 Another Texas case that
questions whether legislative
districts must be equal in popu-
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lation, or whether only regis-
For more information, visit HA.com/Modern tered voters, or only U.S. citi-
zens, should be counted.
On the other hand, while the
court’s right has lost a singular
voice, it has retained the votes
to restrict abortion access. In
the abortion case, if Justice
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vote on abortion rights—sides
with fellow conservatives to up-
hold the Texas law while liberals
Selecting a more moderate
nominee could raise the political
stakes for Republicans, particu-
larly GOP senators defending
seats in Democratic-leaning
states, pinning Mr. Obama’s
hopes on enough of them break-
ing ranks to approve his nomi-
nee.
There are risks for Republi-
cans if they outright reject any
Obama nominee. While many
Republicans may see that posi-
tion as principled, Democrats
Senator Mitch McConnell would argue it reflects pure par-
tisanship, and will lead to more
vote to strike it down, the 4-4 gridlock and division.
split will leave the state’s re- More significantly, Republi-
strictions in force. cans risk a Pyrrhic victory
The White House’s approach should they stymie Mr. Obama’s
to the fight over a pivotal life- plans for the court. If their gam-
time appointment will funda- ble fails—and Democrats retain
mentally shape the debate. As the White House, capture the
he weighs a list of potential Senate or both—Republicans
nominees, Mr. Obama faces sev- can expect no quarter from their
eral possible strategies in his at- opponents. A Democratic presi-
tempt to install a third Supreme dent might be inclined to nomi-
Court justice during his presi- nate a more liberal figure than
dency. the more moderate one Mr.
Any approach faces signifi- Obama is likely to put forward.
cant obstacles. That leaves open the possi-
“There’s a chance—but not a bility of a recess appointment to
great chance—that he could find the court. The White House was
a way to thread the needle,” cool to the option, which would
Matt Bennett, a Democratic both limit the nominee’s time on
strategist and senior vice presi- the high court and touch off a
dent at Washington, D.C., think political storm.
tank Third Way, said of the pres- The president can bypass
ident. Senate approval and appoint an
Some Democrats have pro- official for a maximum two-year
moted the idea of Mr. Obama term if a vacancy occurs while
using the vacancy to make a po- Congress is in recess. However,
litical statement by nominating courts ruled that Mr. Obama
a liberal, such as Massachusetts overstepped his authority in
Sen. Elizabeth Warren, who January 2012 by filling three
could rally the party base head- long-standing vacancies on the
ing into the November election. National Labor Relations Board
White House officials shot while the Senate was on a three-
down such speculation, saying day break.
Mr. Obama would rather leave A 2014 Supreme Court ruling
his own imprint on the Supreme on those appointments nar-
Court than make a symbolic rowed the opening a president
move intended to benefit Demo- can use while the Senate is in
cratic candidates. recess, effectively giving the
The president appears to be Senate control over the power.
on track to select a nominee Still, Senate Republicans
who might win the bipartisan could agree to take a recess and
support needed for confirma- allow Mr. Obama to appoint a
tion, a path that suggests a caretaker justice, ensuring the
more moderate candidate whose court was fully staffed for a pe-
record could deflect charges of riod of time. Senate Republicans
extremism. would avoid voting on an
Mr. Schultz said the presi- Obama nominee and allow the
dent is seeking a justice “who next president and Senate to de-
will faithfully apply the law to cide whether the recess appoin-
the facts at hand,” and would tee deserves confirmation.
rely on “ethics and moral bear- —Brent Kendall
ings” in cases where the law is and Janet Hook
ambiguous. In Mr. Obama’s view, 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
THE WALL STREET JOURNAL.
Russia Is Accused of Bombing Hospitals
U.S. says Syria regime
and its allies targeted
civilians; Assad insists
rebels give up weapons
Violence in northern Syria
escalated Monday, casting
deep doubt on a planned
cease-fire as the U.S. accused
the Assad regime and its ally
Russia of bombing civilian hos-
pitals.
By Sam Dagher
and Dana Ballout
in Beirut and Thomas
Grove in Moscow
The intensified fighting also
is complicating the challenge
of getting humanitarian aid to
tens of thousands of civilians
trapped in besieged areas—an-
other component of the deal
on Syria reached last week in
Munich.
President Bashar al-Assad
remained defiant, insisting he
would never accept a cease-
fire with rebels until they sur-
rendered their weapons, and
wouldn’t negotiate a political
transition with those he called
traitors.
“For us everyone bearing
arms against the state and the
Syrian people is a terrorist,
this matter is nonnegotiable,”
he said during a long, televised
speech.
The U.S. said the airstrikes
Monday in and around Aleppo,
Syria’s biggest city, targeted
innocent civilians, including at
two hospitals. At least 50 peo-
ple were killed at medical fa-
cilities and schools in rebel-
held areas in Aleppo and Idlib
provinces, the United Nations
said.
State Department spokes-
man John Kirby said the
bombing of civilian targets
“casts doubt on Russia’s will-
ingness and/or ability to help
bring to a stop the continued
brutality of the Assad regime
against its own people.”
Susan Rice, President Ba-
* *
People gathering around the rubble of a damaged hospital backed by Doctors Without Borders in Syria's Idlib province Monday.
rack Obama’s national security
adviser, also condemned the
continued bombing. “We think
it runs counter, frankly, to the
commitment made in Munich
on Friday,” she said.
Hadi al-Bahra, a Syrian op-
position leader in the Saudi
city of Jeddah, called it “a
huge escalation and a clear
message that the Russian, Ira-
nian and Syrian regime strat-
egy is that they will use Mu-
nich to concentrate on their
military campaign.”
Under the agreement
reached this past Friday by
world powers, humanitarian
aid deliveries to some besieged
areas of Syria were to begin
quickly, while an international
task force co-chaired by the
U.S. and Russia works out the
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WORLD NEWS
terms of a nationwide cease-
fire by Friday.
In his speech, Mr. Assad
played down the chances for a
deal. “They say they want a
cease-fire in one week,” he
said. “Fine, but who is capable
of lining up all the conditions
and prerequisites? Nobody.”
In an interview out Monday,
Russia’s deputy foreign minis-
ter Gennady Gatilov said war-
planes would keep bombing
terrorist targets in the Aleppo
region regardless of any cease-
fire.
The Munich deal allows
fighting to continue against
groups designated terrorist by
the United Nations: Islamic
State and al Qaeda-linked
Nusra Front. Mr. Assad and his
allies regularly conflate more-
Same-day appointments available.
U.S. News & World Report 2015-16
moderate rebel groups with
the extremists, targeting them
all in bombing raids.
“Strikes on terrorist groups
will continue in any case, even
if a cease-fire is agreed upon
in Syria,” Mr. Gatilov told the
German magazine Der Spiegel.
“After all, the main point is
that the cease-fire would cover
those who are truly interested
in a beginning to the negotia-
tion process, and not terror-
ists.”
In Brussels, Iran’s Foreign
Minister Javad Zarif also sig-
naled that the pressure on re-
gime opponents would con-
tinue. “What we agreed in
Munich is cessation of hostili-
ties, not a pause to allow the
allies of certain regional play-
ers to regroup,” he said.
Tuesday, February 16, 2016 | A9
EU to Open Aid
Post in Damascus
BRUSSELS—The European
Union reached an agreement
with the Assad regime to set
up an office in Damascus to
help the bloc coordinate hu-
manitarian aid deliveries from
inside Syria, European Union
foreign-policy chief Federica
Mogherini said Monday.
Speaking after a meeting of
foreign ministers, Ms. Mogh-
erini said she expects the new
office to be operational “in the
coming weeks.” It will likely
have a small staff of experts
from the EU, officials said.
“We have worked on this in
GHAITH OMRAN/AGENCE FRANCE-PRESSE/GETTY IMAGES
the past few months quietly,”
she said. “Obviously you can-
not expect that this happens
without the regime agreeing.”
The EU is the biggest offi-
cial donor of humanitarian aid
for Syria and will play a major
role in the delivery of assis-
tance under last week’s Munich
agreement. That deal set out a
list of besieged cities and
towns where government and
opposition forces are obliged to
let through aid convoys.
—Laurence Norman
There was no immediate out Borders said the airstrikes
comment from Moscow on the hit several hospitals including
latest airstrikes; it has fer- one in Azaz, near the Turkish
vently denied hitting civilian border, where thousands of
targets in the past. Syrian newly displaced people have re-
state media said the regime’s located from Aleppo.
air force struck “terrorist hide- Antiregime activists and
outs” in the north. Aleppo residents said a chil-
U.N. special envoy Staffan dren’s and maternity hospital in
de Mistura had said that aid Azaz was bombed, killing at
convoys should begin to head least 10 people including a baby.
out by Tuesday or Wednesday, Doctors Without Borders
but that it would be difficult also said that a hospital it sup-
with fighting going on. ports in Idlib province was de-
The assistance was slated to stroyed by an airstrike and at
go to rebel-controlled areas least seven people were killed.
around Damascus and to be- Eight others were missing and
sieged, pro-regime areas in presumed dead, it added.
neighboring Idlib. Monday’s “This appears to be a delib-
airstrikes could make rebels erate attack on a health struc-
less likely to agree to allow aid ture,” said Massimiliano Re-
through. baudengo, the group’s head of
The aid group Doctors With- mission in Syria.
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 | Tuesday, February 16, 2016
Europe Seeks New Barriers for Migrants
Some small countries
outline bid for internal
border controls; Austria
to detail changes
BY ANTON TROIANOVSKI
BERLIN—Several small
countries in Europe are band-
ing together in their most con-
certed effort yet to set new
roadblocks along the path that
has funneled a million refu-
gees and migrants across the
Continent.
Austria, a key destination
on the so-called Balkan Route
from Greece, is expected to
announce on Tuesday the de-
tails of new, more stringent
border controls, Austrian offi-
cials said. Some countries
along the migrant trail, includ-
ing Slovenia and Macedonia,
said they would have no
choice but to follow suit.
And on Monday, the leaders
of Hungary, Poland, Slovakia
and the Czech Republic, meet-
ing in Prague, outlined a plan
to support Macedonia and Bul-
garia, which also attended the
summit, as bulwarks against
migrants coming from Greece.
Their proposal comes as a
rebuke to the strategy of Ger-
man Chancellor Angela Merkel
and her supporters in Brus-
sels, who have insisted that
refugees be distributed more
evenly across the Continent
and that countries focus on
securing the European Union’s
external border rather than
erecting fences between each
other.
"Europe is weak and de-
fenseless,” Hungarian Prime
Minister Viktor Orban told the
Hungarian parliament on Mon-
day. “In the eye of the Euro-
Nationalism Wreaks Havoc in Divided Continent Air Safety
EUROPE FILE
SIMON NIXON
There are many different
ways the European Union
could fall apart in the coming
weeks, but all of them have a
common thread: the inability
of national politicians to
adopt a European perspective
when confronted by common
European
challenges.
This is as
true of the
crisis sur-
rounding the
U.K.’s mem-
bership of the EU and the mi-
gration crisis, which will dom-
inate a crunch EU leaders’
summit this week, as it is true
of the eurozone economic cri-
sis, which has burst back on
the agenda following recent
moves in financial markets.
Take Britain’s EU member-
ship: When Prime Minister
Longtime Uganda President Runs on Hard Line
BY JOE PARKINSON
AND NICHOLAS BARIYO
KAMPALA, Uganda—A de-
cade after he became Uganda’s
president in 1986, Yoweri Mu-
seveni was hailed abroad as
the model for a new kind of
African leader, the opposite of
the “big men” who dominated
Africa’s politics in the postco-
lonial era.
But far from helping to
usher in an end to the conti-
nent-wide grip of autocratic
rule, Mr. Museveni since then
has become one of its most
deft practitioners, parrying
challenges to his continued
stay in power with an adept
mix of patronage, intimidation
and fear-mongering.
Days before voters go to the
polls to decide whether to give
Mr. Museveni a fifth term in
office, those tactics appeared
to be on display again on Mon-
day.
Ugandan authorities ar-
rested Mr. Museveni’s chief
challenger, Kizza Besigye,
when he tried to hold a cam-
paign rally in the center of the
capital Kampala.
Mr. Besigye’s detention
came at the end of a campaign
in which the 71-year-old Mr.
Refugees aboard a train waited at a transit center near the southern Macedonian town of Gevgelija on Sunday.
pean public, the politics of
Brussels has failed.”
Senior officials in other
countries along the migrant
route from Greece to Germany
said they hope Ms. Merkel’s
strategy to find a comprehen-
sive European solution to the
migration crisis succeeds, but
that a Plan B was necessary.
Beefing up controls at the
Macedonian-Greek border rep-
resented “a backup if nothing
else works,” said Tina Strafela,
a spokeswoman for the gov-
ernment of Slovenia, Austria’s
southern neighbor.
European countries have
moved to tighten border con-
David Cameron first said that
he wanted a new deal for the
U.K. ahead of a referendum he
has pledged to hold by the
end of 2017, he insisted that
the reforms he was seeking
would benefit the whole of
Europe.
Yet the draft deal that EU
leaders will discuss does
nothing of the sort. It consists
of a series of carve-outs for
the U.K. carefully crafted to
stop other countries from tak-
ing advantage of them. In-
deed, EU officials are clear
that if other member states
try to make use of a contro-
versial “emergency brake”
that will allow the U.K. to re-
strict welfare payments to EU
migrants for four years, the
deal with the U.K. government
would fall apart.
T
he deal may fall apart
anyway: European
Council President Don-
ald Tusk has warned that the
process is “fragile.” Mr. Cam-
eron can’t even be sure he
will achieve even his limited
objective of persuading key
figures in his party to back
his deal, complicating his ef-
forts to win the referendum
Police fired tear gas at presidential candidate Kizza Besigye, center, and supporters on Monday.
Museveni has cast himself as
the guarantor of stability in
the East African nation. Voting
him five more years in office,
he has said, is “a matter of life
and death.”
“We won't leave the coun-
try to the wolves,” Mr. Musev-
eni declared last year in the
town of Kabale as the primary
and general election season
WORLD NEWS
trols in recent months, but
their efforts have failed to sig-
nificantly reduce the flow of
migrants moving toward
Northern Europe, and officials
fear a new influx of refugees
from Syria. Still, the moves re-
flect increasingly coordinated
attempts in Central and South-
eastern Europe to shut down
the migrant trail from Turkey
before more people attempt to
make the journey in spring
weather.
Ms. Merkel meanwhile is
sticking to her plan, and her
supporters say that her strat-
egy is showing signs of bear-
ing fruit. Turkey, under in-
that he hopes to hold in
June.
Either way, the deal looks
likely to make the EU harder
rather than easier to manage.
The price of trying to keep
Britain in the EU has been to
put in question core EU prin-
ciples including nondiscrimi-
nation against EU citizens, the
free movement of workers
and the integrity of the sin-
Politicians facing
common challenges
haven’t adopted a
pan-European view.
gle-market rule book. That
looks like a recipe to em-
bolden nationalists across the
continent, showing that uni-
lateral threats can deliver re-
sults.
Similarly, nationalist
thinking lies at the heart of
the difficulties in managing
the migration crisis. Northern
and Eastern European politi-
cians blame Southern Europe-
ans for failing to control their
borders or implement agreed
asylum processes.
began. “The opposition want
to tear Uganda apart, I won’t
give them chance. I have the
support of my army.”
To bolster grass-roots sup-
port for Mr. Museveni, a youth
group affiliated with his ruling
National Resistance Movement
has swelled with 200,000 new
recruits in the months leading
up to this week’s vote.
* *** THE WALL STREET JOURNAL.
new refugees this year,
roughly a third of last year’s
total.
On Tuesday, the govern-
ment plans to announce
tougher border checks and
daily quotas designed to im-
plement that limit—a move
that officials in countries up-
stream on the Balkan Route
fear could lead to a backlog of
migrants being turned away.
Macedonian Foreign Minis-
ter Nikola Poposki said other
countries had already contrib-
uted equipment and personnel
to help his country control the
flow from Greece and turn
away people who aren’t from
Syria, Iraq, or Afghanistan.
For Ms. Merkel, the key to
preventing another million mi-
BORIS GRDANOSKI/ASSOCIATED PRESS
grants arriving in 2016 lies in
Turkey. She has been meeting
with Turkish leaders on a
near-weekly basis this year,
pushing them to break up mi-
grant-smuggler networks and
improve conditions for the
more than two million refu-
gees living in Turkey.
In exchange, the EU has of-
fered more than $3 billion in
aid, the possibility of visa-free
tense pressure from Ms. would create in Greece—not travel to Europe for Turkish
Merkel, has become more ag- only would that be a non-Eu- citizens, and that some Euro-
gressive in recent days in pre- ropean way of doing things, pean countries will take in ref-
venting people from crossing but it also wouldn’t solve our ugees from Turkey voluntarily.
the narrow straits of the Ae- problems,” Ms. Merkel said in A new North Atlantic
gean Sea to Greece, European an interview Monday with the Treaty Organization mission,
officials say. Stuttgarter Zeitung newspa- pushed by Ms. Merkel, will
She argues that potential per. provide intelligence on mi-
border closures along the Bal- Greece has been bracing for grant boats to the Turkish
kan Route would further in- the possibility of a Macedo- coast guard to allow it to
flame the refugee crisis, which nian border closure, which bring the boats back before
has already proved one of Eu- some Athens officials see as they leave Turkish waters. On
rope’s most divisive issues inevitable if the flow of mi- Thursday, EU leaders will meet
since World War II. grants from Turkey doesn’t in Brussels to consider further
“Simply building a protec- decline. measures to reduce the flow.
tion fence in Macedonia, Elsewhere, the gates are al- —Martin Sobczyk, Margit
which is not even an EU mem- ready starting to come down. Feher, Nektaria Stamouli
ber, without worrying about On Jan. 20, Austria said it and Valentina Pop
the kind of emergency that would set a limit of 37,500 contributed to this article.
Angela Merkel stands al-
most alone among national
fear that the ECB is running
out of ammunition: Steps it
Soared
politicians in insisting that
migration is a common Euro-
pean challenge that requires a
might take to boost inflation
may actually make the eco-
nomic situation worse, not
Last Year,
common response. least through what the mar-
ket now clearly believes to be Data Show
B
ut it is in the economic the dire consequences of neg-
sphere that nationalism ative interest rates on the BY ANDY PASZTOR
may yet wreak the banking system.
greatest havoc. Last week’s If the ECB now finds its The latest airline-safety sta-
volatility in global markets credibility in question, much tistics show that for all of
has been widely attributed to of the blame can be laid at the 2015, not a single passenger
a loss of confidence in central door of national politicians died from a jetliner accident
banks. That is particularly who for years failed to inter- anywhere in the world.
worrying in the European nalize the implications of Capping years of unprece-
context because the European membership of a single cur- dented improvements in over-
Central Bank has consistently rency. all commercial-aviation crash
proved to be the one institu- If growth is weak and in- rates, data released Monday
tion in Europe with the power flation is low in the eurozone, by the airline industry’s lead-
and the willingness to act in that is in part because na- ing international trade associ-
what it perceives to be the tional governments didn’t use ation show what had been
wider European interest. the time gained via ECB ac- considered an unreachable
Through its liquidity oper- tion to take steps to tackle goal: zero fatalities from the
ations and more recently its debt overhangs and improve crash of a passenger jetliner
government bond-buying pro- productivity and potential attributed to pilot error, air-
gram, the ECB has so far held growth via reforms. craft malfunctions, bad
the eurozone together and National governments un- weather or any combination of
helped engineer a modest re- der pressure from voters are those factors.
covery. But it hasn’t been able increasingly threatening to re- The same group reported
to engineer a return to infla- verse previous reform three fatal jetliner accidents.
tion to its target of close to achievements. The latest figures, which
but below 2%, which would Can the EU reverse its exclude planes believed to
ease concerns about the euro- drift to nationalism? More have been brought down by
zone’s large debt burden. than the stability of its finan- criminal acts, also revealed
Now the market appears to cial system is at stake. the number of deadly acci-
dents for all planes fell at
least 50% from the two pre-
ceding years, with a compara-
ble reduction in fatality
counts.
Taking into account the 37.6
reason for the closures is that million flights by jets and tur-
the stations aired interviews boprops that safely trans-
with opposition politicians. ported more than 3.5 billion
Few Ugandans expect the passengers world-wide last
incumbent to lose Thursday to year, the International Air
Mr. Besigye, his former doctor, Transport Association called it
or Amama Mbabazi, his former an “extraordinarily safe year.”
prime minister. Still, the vote Tony Tyler, IATA’s director-
puts the political fate of one of general and chief executive,
the world’s longest-serving singled out safety advances by
rulers in the hands of one of sub-Saharan Africa, a region
its youngest populations. that by some measures is the
Many of Uganda’s 15.3 mil- most dangerous place to fly.
lion eligible voters hadn’t been
born when Mr. Museveni first
swept to power in 1986 as a Pilots Urge Tight Curbs
BEN CURTIS/ASSOCIATED PRESS
rebel leader who helped topple After Laser Imperils Jet
the dictator Idi Amin, then his
autocratic successor, Milton LONDON—Lasers should be
Obote. categorized as offensive
How Thursday’s voting un- weapons, a pilot group argued
folds will be watched closely after a New York-bound Virgin
elsewhere in the continent, Atlantic plane from London
where a number of long-stand- turned around after takeoff
ing leaders are seeking to ex- because a laser beam caused
tend their rule this year. a crew member to feel sick.
While members of the gov- “Across the region, strong- Lasers are among the big-
ernment-financed and armed men are digging in and their gest threats to commercial
group are officially called systems are becoming further planes, along with drones, ac-
“crime preventers,” rights or- entrenched, said Nicholas Sen- cording to pilot groups. Aim-
ganizations say they have car- goba, a political analyst in ing one at an aircraft is a fed-
ried out attacks against oppo- Kampala. “Museveni is a sol- eral crime in the U.S.
sition activists. dier, so he never takes things The U.S. Federal Aviation
Authorities have closed at for granted. He knows that Administration recorded more
least 10 radio stations for li- even if things look good, you than 3,800 laser incidents in-
censing irregularities. Oppo- may be walking into an am- volving aircraft in 2014.
nents and critics say the actual bush.” —Robert Wall
 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.
EDGARD GARRIDO/REUTERS
Worshipers applauding as the pop celebrated Mass on Monday.
Pope in Mexico
Praises Diversity
BY FRANCIS X. ROCCA
AND LAURENCE ILIFF
SAN CRISTÓBAL DE LAS
CASAS, Mexico—Pope Francis
blasted the “oppression, mis-
treatment and humiliation” of
indigenous peoples in a multi-
lingual Mass on Monday in this
mostly Mayan highland town
in southern Mexico, and said
the world has much to learn
from indigenous cultures.
The Mass was in Spanish,
the language of the conquista-
dors, but also in three Maya
languages—Tzotzil, Tzeltal and
Ch’ol. “Your peoples, as the
bishops of Latin America have
recognized, know how to inter-
act harmoniously with nature,”
the Argentine-born pope said.
“And yet, on many occa-
sions, in a systematic and or-
ganized way, your people have
been misunderstood and ex-
cluded from society,” he said
at the Mass, held in a sports
arena. “Some have considered
your values, culture and tradi-
tions to be inferior. Others, in-
toxicated by power, money and
market trends, have stolen
your lands or contaminated
them. How sad this is!”
The ceremony was a cele-
bration of Mexico’s mixed heri-
tage. It included Maya Indian
women in colorful embroi-
dered dresses, dancing to vio-
lin music, native children in
* *
dark ponchos swaying to a ma-
rimba band, and mestizo, or
mixed-race Mexicans, in casual
urban wear singing religious
songs accompanied by guitar.
The Mass shifted between
Spanish and Maya Indian lan-
guages so many times that
television commentators often
confused one with another.
The ceremony was held in
Chiapas, one of Mexico’s poor-
est states. It is also where
Protestant churches have made
their biggest inroads in Mex-
ico, especially among indige-
nous groups here and in neigh-
boring Guatemala.
The pontiff, who has made a
special point of ministering to
native peoples in the Ameri-
cas, issued a decree authoriz-
ing the use of native languages
in the liturgy, part of the
church’s attempt to boost its
missionary efforts to Chiapas’s
indigenous population. About
1.1 million people in the state
speak indigenous languages,
according to official figures.
The sports center where the
Mass was held has a capacity
of 100,000, according to the
Vatican, and appeared full.
In the afternoon, the pope
traveled by helicopter to Tux-
tla Gutiérrez, the state capital,
where he presided over a
meeting of families at a soccer
stadium filled with about
40,000 people.
NY
WORLD NEWS
Zika Claim Prompts Shift
BY REED JOHNSON
AND ROGERIO JELMAYER
SÃO PAULO—Brazil’s south-
ernmost state halted the use of
a mosquito larvicide that an
Argentine doctors’ group
warns could be behind the re-
cent surge of babies born with
microcephaly.
The ban was imposed de-
spite assertions by the federal
government and U.S. health
authorities that there is no sci-
entific basis linking use of the
chemical to the birth defect.
Health officials in Rio
Grande do Sul over the week-
end suspended the use of the
larvicide Pyriproxyfen to de-
stroy mosquito eggs and larvae
in the state’s drinking water
supplies, in what they called a
“preventive measure.”
The decision came just days
after the Argentine group Red
Universitária de Ambiente y
Salud (University Network of
Environment and Health), re-
leased a report that links the
pesticide to the huge increase
in Brazil in recent months of
suspected cases of microceph-
aly, in which infants are born
with shrunken heads and un-
derdeveloped brains.
Medardo Ávila Vazquez, a
pediatrician and neonatal de-
velopment specialist at the
Universidad de Córdoba who
belongs to the group, acknowl-
edged that the group hasn’t
done any lab studies or epide-
miological research to support
its assertions, but it argues
that using larvicides may
cause human deformities.
The group’s assertions were
quickly rejected by Brazilian
and U.S. health authorities,
and run contrary to the beliefs
of many health authorities in
Brazil and internationally that
the more likely cause of the
rise in suspected microcephaly
cases is the mosquito-borne
Zika virus that is rapidly
spreading across the Americas.
Mr. Ávila Vazquez said the
group is calling on Brazil and
other governments in the re-
gion to be cautious about
drawing fast conclusions about
Tuesday, February 16, 2016 | A11
ADRIANO MACHADO/REUTERS
A government truck sprayed a street with insecticide in Brazil’s capital, Brasília, on Thursday.
Brazil’s Health Ministry is-
Medical Mystery sued a statement that there is
Only a fraction of cases initially suspected of being microcephaly no evidence linking larvicide
have so far been linked to Zika virus, underscoring the difficulty to microcephaly. “The associa-
in understanding the current outbreak in Brazil. tion between the use of Py-
riproxyfen and microcephaly
Initially suspected cases* Of these: has no scientific basis.”
5,000 41 linked to Zika virus Sumitomo Chemical Co.
421 confirmed as Ltd., which manufactures Py-
microcephaly but cause riproxyfen, said Pyriproxy-
4,000
remains uncertain fen has been approved by the
WHO to combat mosquitoes
765 found to be and that extensive testing has
3,000 microcephaly by other
causes or ruled out as shown that it doesn’t cause
microcephaly nervous system damage or af-
2,000 fect reproductive ability.
Nationwide, Brazil has 41
1,000 confirmed cases of Zika-re-
lated microcephaly, plus 421
3,852 are still under confirmed cases of microceph-
0 investigation aly whose cause hasn’t yet
2015 2016 been determined, according to
*Cumulative Source: Brazilian Health Ministry THE WALL STREET JOURNAL. the health ministry.
Rio Grande do Sul, along
the relationship between Zika fects. The World Health Organ- the Argentine border, is among
and microcephaly. The group ization this month declared the Brazilian states least af-
comprises about two dozen the Zika virus a global public- fected by the microcephaly
people in Argentina, mostly health emergency. The agency outbreak. “Although we have
doctors, who are concerned called for more research to de- no indication that the larvicide
about the use of insecticides termine whether there is a has a link with microcephaly
and other agrochemicals. causal link between micro- cases, it is also true that we
“We think it is likely that cephaly and Zika. do not have any strong evi-
Pyriproxyfen is the problem,” That uncertainty has al- dence that it has no links,”
Mr. Ávila Vazquez said. lowed room for new theories said João Gabbardo Dos Reis,
The Argentine doctors’ re- on the cause of the outbreak, the state’s health secretary.
port is the latest twist in the put forward with wildly vary- —Tom Burton
battle to decipher the Zika vi- ing degrees of evidence, to and Taos Turner
rus and its potential health ef- proliferate on social media. contributed to this article.
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For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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A12 | Tuesday, February 16, 2016 * *** THE WALL STREET JOURNAL.

WORLD NEWS

Japan Wages Reveal Strain

BY MITSURU OBE
TOKYO—For evidence of the
limitations of Japan’s “Abe-
nomics” policies, look no fur-
ther than Toyota Motor Corp.
The car maker last year re-
ported a record net profit of
¥2.17 trillion ($19 billion), and
expects to report a third con-
secutive record profit for the
fiscal year ending March 31.
Yet the union representing the
car maker’s employees plans to
ask for only a 0.8% increase in
base salary this week as annual
negotiations begin, a union
spokesman said. That would
represent an average monthly
pay increase of just ¥3,000
($26).
The Japanese Trade Union
Confederation has scaled back
its request for increases in base
pay this year, asking for “about
2%” compared with “at least
2%” last year. A spokesman
said the change reflected lower
oil prices and weaker inflation.
Japan’s headline inflation rate,
which includes energy prices, is
running at near zero.
Bank of Japan Gov. Haruhiko
Kuroda has cited strong wage
growth as key to a “virtuous
cycle” of rising profits and
wages that will lead to 2% in-
flation, the ultimate target of
nearly three years of extraordi-
nary quantitative-easing mea-
sures and, now, negative inter-
est rates on some banks’
reserves. Wages at Toyota are
considered a bellwether, sug-
gesting a revival in consumer
spending again looks unlikely.
The modest requests reflect
sagging expectations at a cru-
cial time for Prime Minister
Shinzo Abe’s growth program
and stimulus policies, known as
Abenomics. The economy
shrank last quarter, by 1.4% on
employers, follows a stark warn-
World ing from some of the EU’s lead-
ing governments that the bloc’s
Watch steel sector faces an impending
risk of collapse. If the 28-country
bloc formally designates China
Bogged Down as a market economy, it would
Real wages in Japan have fallen steadily in recent years, causing consumers to hold off purchasing be more difficult for Europe to
big-ticket items. impose tariffs on Chinese goods.
VENEZUELA Beijing says a 2001 agree-
GDP and private consumption, Real wages, growth from Durable-goods consumption*, ment allowing it to join the
growth from previous quarter previous year growth from previous quarter
Businessman Named World Trade Organization means
New Economic Chief it should receive market-econ-
15% GDP 2% 80% President Nicolás Maduro an- omy status by December 2016.
Private nounced he appointed a busi- However, some European indus-
10 consumption 1 60 nessman as the country's new tries say China’s economy is still
economic czar, the first private- controlled by the state.
5 0 40
sector representative to occupy —Viktoria Dendrinou
0 –1 20 a senior post in the Maduro ad-
ministration. UNITED KINGDOM
–5 –2 0 The choice of Miguel Perez
Abad, an infrastructure contrac-
Bank of England
–10
–3 –20 tor from eastern Venezuela who Official Turns Dovish
–15 –4 –40 -0.3% is currently the trade and indus- Ian McCafferty, until this
try Minister, raised hopes of month the Bank of England’s
–20 –5 –60 more substantial reforms amid sole advocate for higher borrow-
2013 ’14 ’15 2013 ’14 ’15 2013 ’14 ’15
the deepest recession in the na- ing costs, said he has withdrawn
tion’s history. his call for an interest-rate in-
*Consumption soared ahead of a sales-tax increase that took effect April 1, 2014. Mr. Perez replaced a leftist crease because inflationary pres-
Sources: Cabinet Office (GDP, durable-goods consumption); Ministry of Health, Labour and Welfare (wages) THE WALL STREET JOURNAL. sociologist who has denied exis- sures in the U.K. have receded.
tence of inflation and had been Mr. McCafferty, one of four
rency and rising stocks are Motor Co., said last week that Fiscal stimulus was declared in the post for just a month. Mr. members of the rate-setting
seen as key to delivering higher despite the currency swings, one of the pillars of Abenomics. Perez will remain trade and in- Monetary Policy Committee
corporate profits and improv- the car maker was confident it However, after a sharp rise in dustry minister. drawn from outside the bank’s
ing sentiment among busi- could hit its full-year profit tar- spending in 2013, public de- —Anatoly Kurmanaev ranks, said a recent fallback in
nesses and consumers. get. mand weighed on economic wage growth in Britain suggests
Private consumption fell a “We believe that we growth both last year and in EUROPE there is no longer an urgent
sharp 3.3% on an annualized shouldn’t be affected by each 2014, according to data re- need to raise rates.
basis last quarter as consumers and every move of the financial leased Monday.
Steelmakers Protest Between August and January,
remained burdened by an in- markets. Our role is to support There are bright spots in China Market Status Mr. McCafferty was the lone
crease in sales tax, to 8% from Abenomics and the policies of Japan’s economy, which is ex- Representatives from Eu- voice for higher borrowing costs
5%, in April 2014. Since then, the central bank,” he said. pected to grow by 1.3% in the rope’s struggling steel industry on the nine-member panel, but
durable-goods consumption Exports unexpectedly fell in fiscal year starting in April, ac- protested in Brussels in an at- he abandoned that call this
has fallen in six of the past the latest quarter, by an annu- cording to economists surveyed tempt to stop the European month. The panel voted unani-
seven quarters. alized pace of 3.4%, due partly by the Japan Center for Eco- Union from granting China mar- mously in February to keep the
There are signs that recent to weaker demand for smart- nomic Research. ket-economy status this year. bank’s benchmark rate on hold at
turmoil in financial markets is phones in China and equipment Business investment grew The protest, by workers and 0.5%. —Jason Douglas
among U.S. energy producers. an annualized rate of 5.7% in
Japanese exporters could the fourth quarter, a second
Modest union salary face headwinds from a stronger straight quarterly increase.
requests reflect yen, which last week reached a The central bank’s quarterly
15-month high against the U.S. tankan business survey, re-
sagging hopes for Mr. dollar. leased in December, showed
Abe’s growth plan. Mitsumaru Kumagai, chief that business investment is ex-
economist at the Daiwa Insti- pected to rise by a healthy 8%
tute of Research, said the latest in the fiscal year ending in
also taking a toll. Companies results show the “time has March, compared with 5% the
reported last month that come for greater use of fiscal previous year.

an annualized basis, the gov-
ernment said Monday. It was
the fourth contraction in seven
quarters. Weak private con-
sumption was to blame.
Falling stock prices and a
strengthening yen have also
threatened what progress has
been made toward revitalizing
the economy. A weaker cur-
slumping stock prices were
hurting sales, while household
survey data indicated that the
wealthiest 20% of Japanese cut
spending last year, according to
government agencies.
Some business leaders have
brushed off the recent market
turbulence. Joji Tagawa, corpo-
rate vice president of Nissan
policy” to support growth
world-wide, following years of
monetary stimulus by central
banks.
“Fiscal spending to support
the global economy is likely to
become a leading focus for the
Group of Seven countries plus
China in the run-up to the May
summit in Japan,” he said.
ANINDITO MUKHERJEE/REUTERS
Still, Japan’s economy is
consumer-driven, and wage
growth is essential. After ad-
justment for inflation, Japa-
nese wages declined 0.9% last
year, as businesses remained
cautious about committing to
raises.
—Yoko Kubota CAMPUS PROTEST: College students in New Delhi rallied Monday
contributed to this article. after a student was arrested for sedition by the government.

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Time Only they feature seats and computer is good, there’s no entrance fee customers move online, compa-
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sport large screens flashing A security guard at the trad- GF Securities Co., a listed
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While Chinese investors in- recreational behavior. “gradually eliminating trading
creasingly trade on smart- “The elderly do everything halls in order to lower the cost
phones or home computers, they want here: sleep, play of operation.” Last year, it said,
trading halls offer a place for games,” he said. “It’s basically in-person trades were 2.4% of
ordinary citizens to exchange Beijing’s second form of transactions, down from 5.5%
tips—or to just hang out. Any- hutong,” he said, referring to two years before.
one can walk in. Trading isn’t the city’s narrow alleyways pop- Mr. Jia lives near the China
required. Securities hall and walks there
“Some investors go there for on workdays, breaking for lunch
entertainment,” says University
China’s swelling at a nearby canteen with a $2
of Hong Kong professor Frank retiree ranks are all-you-can-eat buffet. He said
Song, who researches financial his hall had grown crowded, as
markets. “Some retirees also just
seeking daytime those from now-closed halls
find it an exciting place to be.” leisure. sought new venues. “Sometimes
In other unlikely locations, it can be hard to get a seat.”
too, China’s swelling retiree Hao Hong, a Bank of Commu-
ranks are seeking daytime lei- ular with older residents who sit nications Co. managing director
sure. At IKEA stores, they can and sun-bask or play chess. who writes about the markets,
Amazing New Hybrid be found lounging in the cafete-
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China Securities declined to
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said the halls fuel the trading
culture that contributes to mar-
beds with no apparent plan to Jia Zhiwei, a regular who ac- ket swings.
Runs Without Gas shop.
The Shanghai Zoo has be-
tually makes trades at the hall,
sat thumbing a newspaper. It
“It’s almost like a casino,” he
said. “The way people invest,
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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.
Democracy’s Legal Champion
By Michael W. McConnell
A
ntonin Scalia, who died
Saturday at age 79, was
the most influential Su-
preme Court justice of the past
30 years. Not because he had
the votes. He was influential
because he had a clear, consis-
tent, persuasive idea of how to
interpret the Constitution: It
means what it says; it means
what those who enacted it
meant to enact.
And Justice Scalia was in-
fluential because he wrote
opinions with verve and good
sense, in prose that any Amer-
ican could read and under-
stand. He was the best writer
the Supreme Court has ever
known—and with justices like
John Marshall, Oliver Wendell
Holmes and Robert Jackson,
that is saying a lot. He was
the court’s most withering
logician. He showed us what a
real judge can be, even on that
most political court.
Scalia changed the
way judges looked at
text and law, and was
the Supreme Court’s
best writer ever.
When Justice Scalia arrived
at the Supreme Court in 1986,
its jurisprudence had become
sloppy, results-driven, plagued
with fuzzy three-part tests and
fuzzier four-part tests, all of
them concocted by his prede-
cessors with little basis in
constitutional text. Today, the
entire court—even the liberal
justices—have adopted Justice
Scalia’s style: close attention to
text, awareness of history,
analytical rigor. The Supreme
Court has not announced an
impressionistic multipart “test”
in years.
As a law professor, I find it a
joy to teach a Scalia opinion.
His opinions make clear their
premises. They follow logically.
Sometimes students point out
that Justice Scalia is not being
true to his principles. That is a
compliment, because it means
he has principles that can be
identified and objectively ap-
Israel Looks Beyond America
Jerusalem
Talk to Israelis
about the
United States
these days and
you will pro-
voke a physi-
cal reaction.
GLOBAL
Barack Obama
VIEW
is an eye roll.
By Bret
John Kerry is
Stephens
a grimace. The
ad m i n i s t ra-
tion’s conduct of regional pol-
icy is a slow, sad shake of the
head. The current state of the
presidential race makes for a
full-blown shudder. The Israeli
rundown of the candidates goes
roughly as follows: “Hillary—
she doesn’t like us.” “Cruz—I
don’t like him.” “Rubio—is he
done for?” “Sanders—oy vey.”
“Trump—omigod.”
As for Israel’s own trou-
bles—a continuing Palestinian
campaign of stabbings; evi-
dence that Hamas is rebuild-
ing its network of terror tun-
nels under the Gaza border
and wants to restart the 2014
war; more than 100,000 rock-
ets and guided missiles in the
hands of Hezbollah—that’s
just the Middle East being
itself. It’s the U.S. not being
itself that is the real novelty,
and is forcing Israel to adjust.
I’ve spent the better part
of a week talking to senior
officials, journalists, intellec-
tuals and politicians from
across Israel’s political spec-
trum. None of it was on the
record, but the consistent
theme is that, while the Jew-
ish state still needs the U.S.,
especially in the form of
military aid, it also needs to
Notable & Quotable: Justice Scalia
From a Sept. 7, 1999, Journal
op-ed by Supreme Court Justice
Antonin Scalia, who died Feb.
13 at age 79, on the most signif-
icant development in the law
over the past millennium:
My selection of democratic
self-government as develop-
ment of the millennium as-
sumes—perhaps optimistically—
At the Supreme Court Feb. 14 after Justice Antonin Scalia’s death.
plied. Many justices have no
principles for interpreting the
Constitution, other than to see
in it their own opinions about
the issues of the day. Every
year, in Constitutional Law, a
liberal student will raise his or
her hand and say, sheepishly, “I
never thought I would say this,
but I agree with Scalia.” That is
because his highest commit-
ment was to rational deduction
from our highest law.
Justice Scalia’s text-and-his-
tory approach to constitutional
interpretation sounds wonkish.
How can the attractions of text
and history compare with get-
ting quick national victories on
same-sex marriage, affirmative
action, abortion, or capital
punishment?
But text and history are
about more than fastidious ju-
risprudence. They are about
democracy: allowing Ameri-
cans to decide contentious
questions for themselves,
where the Constitution is,
honestly read, silent.
As Justice Scalia wrote in
Planned Parenthood v. Casey
(1992), “if in reality our pro-
cess of constitutional adjudica-
tion consists primarily of mak-
ing value judgments,” instead
of “doing essentially lawyers’
work up here—reading text and
discerning our society’s tradi-
tional understanding of that
text,” then the issue is properly
one for democratic debate.
“The people know that their
value judgments are quite as
good as those taught in any
law school—maybe better.”
After all, he wrote, “value judg-
ments should be voted on, . . .
not dictated.”
diversify its strategic partner-
ships. This may yet turn out
to be the historic achieve-
ment of Benjamin Netan-
yahu’s long reign as prime
minister.
On Sunday, Israeli Defense
Minister Moshe Ya’alon pub-
licly shook hands with former
Saudi intelligence chief Prince
Turki al-Faisal at the Munich
Security Conference. In Janu-
ary, Israeli cabinet member
Yuval Steinitz made a trip to
Abu Dhabi, where Israel is
opening an office at a renew-
able-energy association. Tur-
key is patching up ties with
Israel. In June, Jerusalem and
Riyadh went public with the
strategic talks between them.
In March, Egyptian President
Abdel Fatah al-Sisi told the
Washington Post that he speaks
to Mr. Netanyahu “a lot.”
This de facto Sunni-Jewish
alliance amounts to what
might be called the coalition of
the disenchanted; states that
have lost faith in America’s
promises. Israel is also re-
inventing its ties to the aspir-
ing Startup Nations, countries
that want to develop their own
innovation cultures.
In October, Israel hosted
Indian President Pranab
Mukherjee for a three-day
state visit; New Delhi, once a
paragon of the nonaligned
movement that didn’t have
diplomatic ties to Israel for
four decades, is about to
spend $3 billion on Israeli
arms. Japanese Prime Minis-
ter Shinzo Abe, who is per-
sonally close to Mr. Netan-
yahu, sees Israel as a model
for economic reinvention. Chi-
a continuing appreciation of the
need for these structural
checks. It also assumes, as the
precondition for that apprecia-
tion, what our Framers would
have called a liberal disposition
on the part of the people: a
reluctance to impose their
views by law in the face of sig-
nificant opposition, a reticence
to require others to love all that
OPINION
videogames (among many
other examples).
He championed the author-
ity of regulatory agencies to
interpret their operating stat-
utes, even when Democrats
controlled those agencies. He
insisted that all executive
EUROPEAN PRESSPHOTO AGENCY
power must be exercised by a
unitary president, even when
that president was Bill Clinton
or Barack Obama. Bush v.
Gore? His detractors forget
that the key holding in that
case was joined by seven of
the nine justices.
True, the results of his text-
and-history approach were of-
This is fundamental. If con- ten conservative. He believed
stitutional controversies are in a colorblind Constitution; he
governed by discernible law, saw no basis in the Constitu-
there is a good reason to allow tion for abortion rights; he
judges to make the decision. defended the presence of reli-
That is what judges do: They gion in the public square; he
interpret and apply laws made defended the right to keep and
by the delegates and represen- bear arms; and he opposed
tatives of the people at some congressional attempts to reg-
time in the past. ulate campaign speech.
As the great Chief Justice On every one of those is-
John Marshall wrote in Mar- sues, he offered reasons based
bury v. Madison (1803), “It is on text and history, never on
emphatically the province and his own philosophy or moral
duty of the judicial department intuitions. He may have been
to say what the law is.” But if wrong on some of them—I cer-
constitutional controversies tainly disagreed with more
are governed by something than a few of my former law
other than law, if they are gov- professor’s constitutional posi-
erned by “what the Court calls tions—but he reached his in-
‘reasoned judgment,’ which terpretations in good faith, as a
turns out to be nothing but judge and not as a philosopher-
philosophical predilection and king. He deserves great credit
moral intuition,” as Justice for that.
Scalia put it, there is no reason Justice Scalia’s opinions, es-
judges should decide. In other pecially his dissents, scintil-
words, it would not be the lated with wit, blistered with
province or duty of the judicial scorn and often soared with
department to say what the appreciation for our constitu-
law should be, or to resolve tional heritage. No one brought
disagreements about philoso- more laughter to oral argu-
phy or morality. ments or more trepidation to
Justice Scalia’s political de- oral advocates. Sometimes he
tractors sometimes scoffed went too far. But he made his
that he was merely packaging mark. As a result of his three
his own preferences in the decades on the Supreme Court
trappings of text and history, bench, constitutional law more
but any student of the Supreme closely resembles what the
Court can supply numerous Constitution actually says. The
counterexamples. Justice Scalia American people had their
was undeniably conservative, democratic champion. He will
but he joined with liberals to be sorely missed.
demand due process for Guan-
tanamo detainees, to protect Mr. McConnell, a law pro-
flag-burning (and cross-burn- fessor and the director of the
ing), to give new teeth to pro- Constitutional Law Center at
cedural protections for crimi- Stanford Law School, is a
nal defendants, and to senior fellow at the Hoover In-
invalidate a law against violent stitution.
nese investment in Israel hit quo are worse. Over the week-
$2.7 billion last year, up from end, U.N. Ambassador Saman-
$70 million in 2010. In 2014, tha Power came to Jerusalem
Israel’s exports to the Far East to preach the virtues of a two-
for the first time exceeded state solution. Her case would
those to the U.S. be unarguable if the Palestin-
Then there is Europe—at ian state to be created along-
least the part of it that is side Israel were modeled on
starting to grasp that it can’t Costa Rica—democratic, demil-
purchase its security in the itarized, developing, friendly to
coin of Israeli insecurity. outsiders.
Greece’s left-wing Prime Min- But the likelier model is
ister Alexis Tsipras used to Gaza, or Syria. Why should
Israelis be expected to live
next to that? How would that
How many allies does help actual living Palestinians,
as opposed to the perpetual
President Obama martyrs of left-wing imagina-
think the U.S. can tion? And why doesn’t the
U.S. insist that Palestinian
afford to squander? leaders prove they are capable
of decently governing a state
before being granted one?
lead anti-Israel protests. But Those are questions Mr.
Greece needs Israeli gas, so he Obama has been incapable of
urges cooperation on terror- asking himself, lest a recogni-
ism and calls Jerusalem Is- tion of facts intrude on the
rael’s “historic capital.” In the narrative of a redemptive
U.K., Prime Minister David presidency. But a great power
Cameron’s government is that cannot recognize the
moving to prevent local coun- dilemmas of its allies soon
cils from passing Boycott, becomes useless as an ally,
Divestment and Sanctions and it becomes intolerable if it
(BDS) measures against Israel. then turns its strategic igno-
All this amounts to another rance into a moral sermon.
Obama administration predic- More than one Israeli offi-
tion proved wrong. “You see cial I spoke with recalled that
for Israel there’s an increasing the country managed to sur-
delegitimization campaign vive the years before 1967
that has been building up,” without America’s strategic
Mr. Kerry warned grimly in backing, and if necessary it
2014. “There are talks of boy- could do so again. Nations
cotts and other kinds of that must survive typically do.
things. Today’s status quo The more important question
absolutely, to a certainty, I is how much credibility the
promise you 100%, cannot be U.S. can afford to squander
maintained.” before the loss becomes irre-
Except when the likely al- coverable.
ternatives to the lousy status Write bstephens@wsj.com.
they love and to hate all that comments to a group of newly
they hate. A society that feels naturalized Americans: “The
passionately about everything, spirit of liberty is the spirit
or that lightly—without a sure which is not too sure that it is
and certain need—adopts laws right; the spirit of liberty is
obnoxious to many of its mem- the spirit which seeks to
bers, cannot sustain democratic understand the minds of other
self-government, and is fit only men and women; the spirit of
to be ruled by others. liberty is the spirit which
The point was put well by weighs their interests along-
the great Learned Hand, in his side its own without bias.”
Tuesday, February 16, 2016 | A13
BOOKSHELF | By John J. Ross
Measuring the
Placebo Effect
Cure
By Jo Marchant
(Crown, 300 pages, $26)
W
hen Bonnie Anderson’s water purifier sprang a leak,
she slipped on the wet tiles in her kitchen and
cracked a bone in her spine. The 75-year-old, for-
merly an avid golfer, was crippled by pain and insomnia. In
desperation, she volunteered for an experimental procedure
called vertebroplasty, in which medical cement is pumped
into the fracture. The treatment succeeded beyond all expec-
tations: Bonnie walked out of the hospital and soon returned
to the golf course. “Except,” as science journalist Jo Marchant
writes in “Cure,” “there’s something Bonnie didn’t know
when she took part in the trial: she wasn’t in the vertebro-
plasty group. The surgery she received was fake.” The operat-
ing team went through all the motions without actually in-
jecting the cement.
Ms. Marchant’s “Cure” is a cautious, scrupulous investiga-
tion of how the brain can help heal our bodies. It is also an
important look at the flip side of this coin, which is how
brains damaged by stress may make bodies succumb to phys-
ical illness or accelerated aging.
The best known brain-body interaction in medicine is the
placebo effect. Ms. Marchant documents some rather aston-
ishing examples: In a laboratory on a cliff in the Alps, fake
oxygen prevents an attack of altitude sickness; tremor and ri-
gidity in a patient with Parkinson’s disease abate with a
phony infusion of dopamine; an autistic child becomes more
interactive after a sham medication. Some patients respond
to placebos even when they know they are taking placebos.
The more drastic the pla-
cebo, the greater the response.
Capsules are better than pills,
injections trump capsules and
placebo surgeries work best of
all. The favored remedies of the
19th century, such as toxic doses
of mercury and copious bloodlet-
ting by lancet and leech, were es-
pecially ferocious placebos, abet-
ted by the plausibility and
charisma of their practitioners.
Ms. Marchant cautions that pla-
cebos have limitations: “Any ef-
fects caused by belief in a treat-
ment are limited to the natural tools that
the body has available.” Fake oxygen can fool the
brain into responding as if it had been exposed to real oxy-
gen, but it cannot actually raise the levels of oxygen in the
blood. In fact, the effects of placebos “tend to be limited to
symptoms—things that we are consciously aware of, such
as pain, itches, rashes or diarrhea.” According to Ms.
Marchant, “placebo effects also seem to be particularly
strong for psychiatric disorders such as depression, anxiety
and addiction. In fact, they may be the main mode of action
for many psychiatric drugs.”
One of the more intriguing chapters in “Cure” deals with
fatigue. Ms. Marchant cites the English psychiatrist Peter
White, who believes that tiredness is a purely mental phe-
nomenon. Dr. White’s research suggests that graded exer-
cise therapy can help the brains of some patients with
chronic fatigue syndrome reset their fatigue threshold. This
notion is more controversial than Ms. Marchant lets on; the
methodology and validity of Dr. White’s work have been
harshly criticized.
The opposite of the placebo effect is the nocebo effect.
Injections hurt more when the patient is told to expect a
little bee sting, compared with simply being told that the
needle is going in. Similarly, patients have more side effects
from a new medication when their doctor warns them that
they may occur.
Churchgoers seem to live longer than non-
churchgoers—an effect that may have more to do
with stress reduction than divine intervention.
To minimize nocebo effects connected to medical and sur-
gical procedures, Boston radiologist Elvira Lang has devised
an approach that she calls Comfort Talk. Patients are warned
of potential harms well in advance of the procedure, not im-
mediately before. Staff soothe the patient, encouraging him
or her to relax and focus on positive imagery. Dr. Lang has
shown that Comfort Talk reduces claustrophobia in patients
undergoing MRI, often eliminating the need for sedation and
anesthesia. “It’s kind of crazy,” one radiology technician told
Ms. Marchant, “but it really does work.”
Ms. Marchant travels to rural Georgia to investigate the
relationship between income and well-being. As she writes,
“there’s a linear health gradient through the entire socioeco-
nomic spectrum.” This is especially true in the United States,
where those in the top 10% of income live about 10 years
longer than those in the bottom 10%. This effect holds up
even after controlling for health behaviors such as alcohol,
tobacco and drug use. Poverty and lack of control leads to
chronic stress, which damages the cardiovascular system and
hinders the immune system. Chronic stress even affects our
ability to maintain the integrity of our chromosomes. Ac-
cording to Ms. Marchant, “feeling stressed doesn’t just make
us ill. It ages us.”
In the last chapters of “Cure,” Ms. Marchant examines the
possible benefits of a variety of stress-reduction techniques,
including meditation and mindfulness training, compassion
training, biofeedback, and a rewarding social life. She even
travels to Lourdes to investigate the health effects of spiritu-
ality and religion. Regular churchgoers seem to live longer
than non-churchgoers, an effect that may be mediated by
stress reduction and stronger social networks rather than di-
vine intervention. When it comes to health outcomes here on
Earth, a God who is mild and forgiving might be preferable.
As Ms. Marchant notes, belief in “an angry or judgmental God
seems to make people more stressed, with subsequent effects
on their health.”
Mainstream practitioners often regard alternative medi-
cine as, at best, an outlet for patients such as Mrs. Renfrew
in “Middlemarch,” for whom “the fullness of professional
knowledge might need the supplement of quackery.” Con-
versely, patients may turn to alternative therapies because
conventional physicians sometimes do a lousy job of provid-
ing attention and empathy. But “Cure” points a way toward a
future in which the two camps might work together. After all,
any medicine that makes a patient better, whether conven-
tional, alternative, or placebo, is simply medicine.
Dr. Ross, a physician, is the author of “Shakespeare’s
Tremor and Orwell’s Cough.”
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
A14 | Tuesday, February 16, 2016 THE WALL STREET JOURNAL.

OPINION
REVIEW & OUTLOOK LETTERS TO THE EDITOR

The Supreme Court After Scalia Methane Leaks: Major Distraction, Minor Ill

W
ith the death of Antonin Scalia, lacks the votes to correct Mr. Obama’s illegal In his Feb. 4 op-ed “Fixing the The Earth produces 300 million
Democrats and the media are gra- expansions of executive power. These include Methane Leaks That Deflate Natural- tons of methane naturally (marshes,
Gas Gains,” Fred Krupp rightfully etc.), cows produce a further 127 mil-
ciously offering Republicans an ulti- the House challenge to his rewriting of Obama- calls for further reduction of methane lion tons (flatulence) and landfills an
matum: Give them control of Care and the Texas case leakage. However, he overlooks the additional 44 million tons. This
the Supreme Court now, or The stakes are so high against his unilateral legaliza- major progress already being made in makes eight million tons of natural-
they’ll use the vacancy as a because the left made tion of four million illegal im- reducing emissions using industry gas leaks dispersed over thousands of
political club to hold the migrants. If the Court ties 4-4 standards. His call for new, national miles of infrastructure a classic case
White House and retake the the Court so political. on immigration, as it probably regulations is shortsighted. of going after 1% of the problem at
Senate. False choices don’t get will, the Fifth Circuit’s stay on Since 2005, by the U.S. EPA’s own likely the highest cost.
more false than that. Mr. Obama’s order will con- calculation, methane emissions from MIKE WEILL
The reality is that no one President Obama tinue until the courts rule on the merits. But fracked oil and natural-gas wells have Houston
is likely to nominate for the Court this year has a 5-4 liberal majority is all but certain to uphold fallen 79% even as production has
surged. In the past 30 years, the nat- The regulations proposed by the
a chance to be confirmed in a GOP Senate. Re- anything a Democratic President does on so po-
ural-gas transmission industry has re- Interior Department and the EPA to
publicans could vote for José Cabranes of the litical a subject. duced the number of pipeline leaks cut methane emitted by flared and
Second Circuit Court of Appeals, but he’s 75 We know this because this is how all Demo- by 94%. The natural-gas industry is leaked gas have no basis in science.
years old and too independent-minded for cratic Justices have voted for more than a gen- clearly making progress and has am- While it is true that each molecule
Democrats. Conservatives would revolt if Re- eration. Not since Byron White retired has any ple incentive to reduce leakage. Es- shows strong infrared (IR) absorption
publican Senators voted to confirm any other Democratic appointee broken with the liberal caped methane is, after all, lost reve- bands—and therefore CH4 qualifies to
Obama appointee. lockstep on issues that truly matter to the left. nue. Also, the large Porter Ranch (no be called a “greenhouse” (GH) gas—
And well they should. The stakes are simply Justice Stephen Breyer provided a rare sixth relation) leak outside of Los Angeles, its climate impact is essentially zero,
too great with the High Court now split 4-4 on vote after the Sixth Circuit said the people of a black eye others won’t want to re- for three independent reasons. The
so many legal issues. The most important aren’t Michigan couldn’t ban racial preferences peat, only adds to the pressure for number of molecules is too small—
even the social issues like abortion and gay (Schuette, 2014), but the liberals had already further progress. only 1% of CO2 and only 0.01% of wa-
Greater use of natural gas in place ter vapor (WV), the most important
marriage that preoccupy the media. Roe v. lost that case.
of coal has driven carbon emissions atmospheric GH gas. Absorption by
Wade isn’t going to be overturned by replacing Otherwise the four current liberals are a from the nation’s power plants to a strong IR bands of water vapor over-
Justice Scalia, so the disputes would be over solid bloc that never breaks. Among Mr. nearly 30-year low. In fact, no coun- laps (“shades”) those of CH4. There is
laws that regulate abortion in late term or to Obama’s appointees, Elena Kagan is a more nu- try is reducing its greenhouse-gas only a minor amount of energy in the
protect the health of the mother. Same-sex anced thinker than Sonia Sotomayor, but on big emissions faster than the U.S.—an IR emission from the Earth’s surface
marriage won’t be overturned either. cases they vote the same. By contrast, Republi- achievement driven by the shale gas in the region of CH4 absorption
The more consequential cases are over the can appointees Harry Blackmun, John Paul Ste- revolution. We need more investment bands.
Bill of Rights and the separation of powers that vens, David Souter, Sandra Day O’Connor, An- in natural-gas production and infra- The proposed EPA regs are unsci-
President Obama has so abused to serve his po- thony Kennedy and John Roberts all broke with structure to encourage further use of entific, will have no perceptible effect
litical goals. Take the First and Second Amend- conservative political preferences on major le- clean-burning natural gas in the on global climate, constitute a com-
ments. The Friedrichs case on coerced union gal issues. For that matter so did Justice Scalia, power sector. However, costly federal plete waste of resources and put a
regulation of methane could be coun- heavy economic burden on the energy
dues that the Court is scheduled to rule on this albeit for more principled legal reasons. terproductive to the goal of reducing industry—with all costs, like a tax,
year is probably now a 4-4 tie. That would let i i i U.S. greenhouse-gas emissions. passed along to consumers who can
stand the mistaken Ninth Circuit ruling that de- The larger point is that progressives have J. WINSTON PORTER least afford them.
nies workers their right not to support political made the Court so political that it’s under- Savannah, Ga. EM. PROF. S. FRED SINGER
causes they oppose. The Little Sisters of the standable that Republicans want to let the next Mr. Porter is a former assistant University of Virginia
Poor are also now likely to lose their religious- President fill Justice Scalia’s vacancy. A GOP administrator of the EPA. Arlington, Va.
liberty challenge to ObamaCare’s coerced subsi- Senator who voted to confirm an Obama nomi-
dies for abortion. nee would demoralize his own supporters.
A new 5-4 liberal majority would also take Meanwhile, the outrage among Democrats over A Terrorism That Dare Not Speak Its Name
aim at the conservative precedents of recent being denied a vote is entirely synthetic as they
Only in the last paragraph of his re- lobby group (a Muslim Brotherhood
years. These include the 5-4 rulings upholding use the issue to mobilize their own partisans.
view does Walter Russell Mead gently legacy group), whose officials have
individual gun rights in D.C. v. Heller and (See Chuck Schumer nearby.) suggest that the entire thesis of Peter suggested Israel was behind 9/11.
McDonald v. Chicago. Justice Ruth Bader Gins- Majority Leader Mitch McConnell and Judi- Bergen’s book “United States of Jihad” Enough said.
burg, who read her Heller dissent from the ciary Chairman Chuck Grassley are right to say may be dangerously misguided (Book- In Britain, a recent study found that
bench, gave a speech saying she expected that that the Senate should refuse to consider any shelf, Feb. 2). the extremist ideology of the Muslim
a future Court would overturn Heller. nominee this year. An election-year hearing and Mr. Mead tells us that Peter Bergen, Brotherhood can be a conveyor belt
Also in peril would be Citizens United and vote would only politicize the Court more and CNN’s national security analyst, turning radical young Muslims toward
other rulings that struck down limits on financ- be unfair to the nominee. agrees with the Obama administra- terrorism. Obviously, American Isla-
ing political campaigns. The lawyer for the So ignore any complaints you read about tion’s thinking about homegrown ter- mist groups will never admit to the
Obama Administration said during oral argu- “unprecedented” GOP “obstruction.” As Justice rorism, which plays down the role of connection of Islamism to Islamist ter-
ment for Citizens United that even books could Scalia warned (our Sunday editorial on his leg- radical theo-political ideology (Isla- ror. The long-term threat lies not with
mism) in spawning terrorist acts and sudden explosive acts of “lone
be banned as an independent campaign expen- acy can be found on wsj.com), legal progres-
focuses instead on such factors as fi- wolves,” but with the pernicious effect
diture. Mr. Obama and Hillary Clinton say they sives made the Court a partisan cause by mak- nancial turmoil and mental illness that of radical ideology that festers within
want to rewrite the First Amendment to limit ing value judgments that are best left for voters may turn a Muslim toward extremist self-segregated, Islamist-led Muslim
campaign donations, and it would take a brave to decide. One result is that Democrats will thinking. The FBI now believes that communities.
liberal to buck that pressure. have to fight and win an election in 2016 to re- psychological problems, and not the For the safety of all Americans, in-
Justice Scalia’s death also means the Court place the greatest contemporary Justice. doctrines of Islamist supremacy, spark cluding those brave, moderate Muslim
jihadist assaults. Yet this is bizarre. voices fighting extremism in their own
When a white supremacist guns down communities, it is bizarre to ignore
The Schumer Precedent black Americans, it might be worth-
while to look at his personal troubles,
such ideology and wicked to deny it.
M. ZUHDI JASSER

S
peaking of politicizing the Supreme Court
(see above), Sen. Chuck Schumer always
delivers. In July 2007 the New York Dem-
ocrat gave a speech to a progressive legal society
in which he said this about confirming a George
W. Bush nominee in the last 18 months of his
Presidency as recounted in Politico:
“‘We should reverse the presumption of con-
firmation,’ Schumer told the American Constitu-
tion Society convention in Washington. ‘The Su-
preme Court is dangerously out of balance. We
cannot afford to see Justice [John Paul] Stevens
replaced by another [Chief Justice John] Rob-
erts, or Justice [Ruth Bader] Ginsburg by an-
other [Samuel] Alito.’” Mr. Schumer went on to
say that he would recommend to his Senate col-
leagues “that we should not confirm any Bush
nominee to the Supreme Court except in extraor-
dinary circumstances.”
Mr. Schumer and the media may want to for-
get this as he insists on replacing Justice An-
tonin Scalia this year, but there it is.
but it would be ridiculous to discount President
his racism. American Islamic Forum
Mr. Bergen has explained that the for Democracy
policy not to connect terrorist acts Phoenix
with the religious orientation of the CHARLES JACOBS
perpetrators was prompted by pro- President
tests from, among others, the Muslim Americans for Peace and Tolerance
Public Affairs Council, an Islamist Boston
Two Well-Intentioned Aims and Laws Collide
As a concerned resident of Ver- touched by man? Ah, the beauty of

Donald Trump’s MoveOn.org Moment mont, I appreciate Robert Bryce’s

perceptive analysis of the draw-
nature! But now those same believ-
ers in a pristine environment have

B
backs of wind turbines (“The Wind- no qualms at all with tall industrial
y now it’s a cliché that Donald Trump can Their report of more than 600 pages con- mills of Bernie’s Mind,” op-ed, Feb. wind farms marring the landscape
say anything he wants, and his support- cludes that it was the CIA’s “own independent 8). However, he gives scant atten- and chopping up flying species. No
ers don’t care. They love him for his atti- judgments—flawed though they were—that led tion to their unfortunate impact on one seems to inquire as to what the
tude and bluster, which has be- them to conclude Iraq had ac- nature. Those widely considered os- constant and loud vibrations are do-
come a proxy for their rage His claim that Bush ‘lied’ tive WMD programs.” The re- tensibly “green” alternatives to fos- ing to the creatures on and under
against the political machine. sil or uranium fuels as generators of the soil, including humans. Those
Maybe that will be true again
about WMD in Iraq is a port adds that “the Commis-
sion found no evidence of energy are, of course, meant to invested in wind energy don’t want
lie spread by the left. ameliorate our ever increasing de- to uncover the long-term negative
after Saturday night’s debate political pressure” to alter in- mand for electricity. However, wind aspects of wind turbines. Science is
in South Carolina, but someone telligence findings: “Analysts turbines are simply disastrous to once again settled, until it is not.
has to point out how the GOP universally asserted that in no the well-being of both the bats and DIANE SHORE
presidential frontrunner has adopted the politi- instance did political pressure cause them to birds with which we perforce share Scottsdale, Ariz.
cal left’s worldview on fundamental questions— skew or alter their analytical judgments.” the biosphere. Indeed, our nation’s
including blatant distortions of fact. It’s fair if the New York businessman wants existing wind turbines are conserva-
Take his full-throated endorsement of the to tout his opposition to the Iraq war way back tively estimated to each year kill at ‘Rhett Butler Effect,’ Quotas
conspiracy theory that the George W. Bush Ad- when, though he’d soon learn in the Oval Office least 880,000 bats and 570,000
birds, including federally protected
And Higher-End Smuggling
ministration deliberately lied to get the U.S. that Presidents must often make decisions
into the Iraq war. “You call it whatever you based on imperfect intelligence. Failing to act species. These deaths add to the Benjamin Soskis’s review of Andrew
several serious bat and bird de- Wender Cohen’s “Contraband” (“The
want. I wanna tell you. They lied,” Mr. Trump can be as dangerous as ordering military action,
clines currently being experienced Prince of the Smugglers,” Bookshelf,
replied to a question by CBS moderator John as we learned from Bill Clinton’s passivity to- from other, often anthropogenic, Feb. 8) omits public fascination with
Dickerson. “They said there were weapons of ward al Qaeda in the late 1990s and President causes. another smuggler that began in 1936.
mass destruction. There were none. And they Obama’s paralysis on Syria since 2011. ARTHUR H. WESTING, PH.D. Who? Rhett Butler in Margaret Mitch-
knew there were none. There were no weapons But peddling false conspiracy theories ought Putney, Vt. ell’s “Gone With the Wind.” Butler
of mass destruction.” to be disqualifying behavior in a presidential Mr. Westing is a former director (played by Clark Gable in the movie)
Despite years of investigation and countless candidate because it corrodes public trust in de- of the United Nations Environment smuggled goods past the North’s block-
memoirs, there is no evidence for this claim. mocracy. Mr. Trump is claiming that govern- Programme’s project on Peace, Secu- ade of Confederate seaports during the
None. The CIA director at the time, George Te- ment officials lied so they could send Americans rity, and Environment. Civil War. What kind of goods? High
net, famously called evidence of WMD in Iraq to their deaths, and for what? So Mr. Bush could value and low volume. This is why But-
a “slam dunk.” Other intelligence services, in- nearly lose an election over the war in 2004, and Remember when the reason we ler could woo Scarlett O’Hara (played
couldn’t drill for oil again in Alaska by Vivian Leigh) with diamonds.
cluding the British, also believed Saddam Hus- Republicans could lose Congress and the White
was that it was too pristine, too un- It’s noteworthy that economists la-
sein had such programs. After the first Gulf War House because of it in 2006 and 2008? bel the phenomenon whereby import
in 1991 the CIA had been surprised to learn that MoveOn.org and others on the left have quotas lead to a higher quality of im-
Saddam had far more WMD capability than it spread these lies for years because they have Review of ‘The Butcher’s ports the “Rhett Butler Effect” and not
had thought. So it wasn’t crazy to suspect that an unrestrained will to power and they really the “Charles L. Lawrence Effect” after
Saddam would attempt to rebuild it after he had do believe the United States is the main source Trail’ Revives Bad Memories the main character in “Contraband.”
expelled United Nations arms inspectors in the of trouble in the world. But this is not a world- Mark Yost’s review of Julian EM. PROF. T. NORMAN VAN COTT
late 1990s. view that conservative leaders have adopted, Borger’s “The Butcher’s Trail” (“Get- Ball State University
President Bush empowered a commission, at least until now. ting Away With Murder,” Bookshelf, Muncie, Ind.
led by former Democratic Sen. Chuck Robb and We have enough respect for voters to appreci- Jan. 29) reminds me of things I have
spent the last 20 years trying to for-
federal Judge Laurence Silberman, to dig into ate that they support Mr. Trump for rational rea- Letters intended for publication should
get. I traveled extensively in Bosnia, be addressed to: The Editor, 1211 Avenue
the WMD question with access to intelligence sons. And we’d like to see him start to act more Croatia and Serbia in 1990, ’91 and of the Americas, New York, NY 10036,
and officials across the government. The panel presidential in case he does become the GOP ’95 and remember how easy it was to or emailed to wsj.ltrs@wsj.com. Please
included Patricia Wald, a former chief judge of nominee. But his willingness to indulge the most be killed because of the sound of your include your city and state. All letters
the D.C. Circuit Court of Appeals appointed by crackpot left-wing conspiracy theory shows the name. are subject to editing, and unpublished
Jimmy Carter, and Richard Levin, president of tremendous risk Republicans would be taking if JOSEPH SLAVICH letters can be neither acknowledged nor
returned.
Yale University at the time. they make him their standard-bearer. St. Charles, Mo.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL. Tuesday, February 16, 2016 | A15

OPINION

Why Obama’s Middle East Policy Is Failing

By Kenneth M. Pollack symptom of a much larger problem state system, which has produced and spread across the region, but ily) in Iraq. But it will only work if it
And Barbara F. Walter in the Middle East. By fixating on state collapse, power vacuums and effectively only to states in civil is properly resourced and deliber-

I
magine that it is Dec. 8, 1941,
the day after the attack on
Pearl Harbor. President
Franklin Roosevelt goes be-
fore the Congress to request
a declaration of war against . . . the
Nazis’ SS.
Not the Japanese—they could
never occupy the U.S. Not Hitler—
we don’t much like him, but he’s
not doing the killing. Not the regu-
lar Wehrmacht troops, they’re fol-
lowing orders. Not the Nazi Party—
they aren’t a direct, physical threat
to the U.S. Only the SS, because
they are perpetrating the genocide
that is the Third Reich’s worst
crime.
Then FDR calls up Stalin and
Churchill and urges them to quit
worrying about German army divi-
sions and the Luftwaffe and Hitler’s
munitions factories—and focus only
on the SS.
If America had taken that ap-
proach to World War II, it would
have been utterly nonsensical, yet
that is, in effect, how the Obama
administration is dealing with the
Middle East conflagration: by focus-
ing exclusively on Islamic State.
The murderous jihadists of Is-
lamic State, or ISIS, are only one
this one symptom—rather than its
sources—and then trying to con-
vince everyone else in the region to
do the same, we are setting our-
selves up for failure.
In contrast, what the Russians
have done makes perfect sense to
the people of the Middle East. The
Russians picked a side: the Shiite
side of the conflict in Syria, the
Assad regime, backed by Iran and
Hezbollah (with the Iraqi govern-
ment occasionally dragged along).
This doesn’t mean that the Sunni
Arab states, which are America’s
traditional allies, like the Russian
choice. But they understand it. What
they don’t understand is the fright-
ening strategy their longtime pro-
tector is pursuing. The result is that
a traditional U.S. ally like Saudi
Arabia has felt obliged to take risky
actions in self-defense, such as exe-
cuting a Shiite cleric last month,
and intervening in Yemen’s civil war
by backing the Sunni-led govern-
ment against the Shiite Houthis
favored by Tehran.
Most Middle Easterners regard
ISIS as abhorrent and want to see
it obliterated. But ISIS is not the
root problem. The real problems of
the Middle East stem from the fail-
ure of the post-World War II Arab
civil wars, such as those raging in
Iraq, Syria, Libya and Yemen.
These wars have now spilled
over on to their neighbors in mas-
sive refugee flows, terrorism, wide-
spread radicalization, cross-border
Focusing on Islamic State
alone leaves the contagion
of civil wars to drag the
region deeper into disaster.
violence, economic dislocation and
the specter of a regionwide Sunni-
Shiite conflict. This destabilizing
spillover now threatens Europe’s
and America’s national interests—
and the main threat is the region’s
civil wars.
Such conflicts invariably spawn
extremist groups like ISIS and al
Qaeda. ISIS was born (initially as al
Qaeda in Iraq) after civil war broke
out in Iraq. The group was brought
to the brink of extinction when the
U.S. finally succeeded in ending the
Iraqi civil war in 2007-10, only to
escape and revive when neighbor-
ing Syria slid into civil war in 2011.
ISIS and al Qaeda have since grown
war or on the brink—Syria, Yemen,
Libya, Mali, Somalia, Egypt and,
once again, Iraq.
Even if the U.S. were able to
“defeat” or “degrade” ISIS, as long
as civil wars burn on in the region,
the conditions that led to its emer-
gence would still exist, and new rad-
ical groups would simply emerge to
replace it. End the civil wars, and
the terrorist groups will wither.
Moreover, civil wars can be con-
tagious. One of the best indicators
that any country will experience a
civil war is if it borders a country
in a civil war already. The longer
conflicts continue in Iraq, Syria,
Yemen and Libya, the more likely
they will destabilize their neigh-
bors. Jordan, Lebanon, Tunisia,
Bahrain, Saudi Arabia and Kuwait
are already experiencing violent un-
rest, while nascent civil wars are
catching fire in Turkey, Egypt and
South Sudan.
What should the U.S. do? The
history of civil wars since 1945
provides clear lessons that current
policy is ignoring.
Contrary to common wisdom, it
is possible for an external power to
extinguish someone else’s civil war.
Since 1945, over 20% of the approx-
imately 150 civil wars have ended
in negotiated settlements. That
number increased to nearly 40%
ately pursued. External interventions
that don’t employ this approach or
don’t employ enough resources to
make it plausible not only fail, but
also tend to make the conflict (and
its spillover) worse.
The problem is that the Obama
administration is not pursuing this
settlement approach in either Iraq
or Syria. The sketchy cease-fire in
Syria announced late last week is
unlikely to accomplish much other
than let some of the warring fac-
tions catch their breath.
In Syria, Secretary of State John
Kerry’s diplomatic efforts might
someday produce a workable
power-sharing arrangement on the
political side. But it will have no
chance at success until there is a
parallel military effort. Such a mili-
tary effort need not be as expensive
and painful as America’s recent
experiences in the region, including
Afghanistan or Iraq. It does need to
create a robust opposition force
able to halt all of the radical fac-
tions and the Assad regime, so that
it is clear to everyone that negotia-
tion is the only way out. It would
also need to provide real security,
so that warring factions and their
supporters believe they will not be
slaughtered if they disarm.
In Iraq, the opposite is true. The
American-led military campaign

Grow, Baby, Grow! after 1991, as in the Balkans,

Why can’t Republi-
cans talk about eco-
nomic growth the
way Bernie Sanders
talks about his pot-
ted socialism or
Donald Trump about
MAIN
making America
STREET
great again: with an
By William
enthusiasm that
McGurn
connects with ordi-
nary Americans?
Take Mitt Romney. In his 2012
run for president, Mr. Romney’s
days as a partner at Bain Capital led
to his being caricatured as a real-
life Gordon “Greed Is Good” Gekko.
Mr. Romney responded by playing
his opponent’s game, emphasizing,
for example, how his plan would
ensure that the top 1% income earn-
ers would pay no less and possibly
even more than they were paying.
Republicans have a great
message about economic
growth for middle America.
Why make it so boring?
By going on defense, Mr. Romney
allowed Democrats to define his
Bain years as a time when he
destroyed lives rather than res-
cued companies. His greatest
strength became his greatest
weakness. And amid the wreckage
of the election results, we learned
that he lost to Barack Obama 81%
to 18% on the question “cares
about people like me.”
It’s not looking much better to-
day, at least judging from the way
the Republican candidates spoke
about economic growth during
Saturday night’s debate in South
Carolina. Almost all checked the
right boxes—lower taxes, smaller
government, and so on. But they
sound as dry and distant as Ben
Stein’s high school Econ teacher in
“Ferris Bueller’s Day Off,” boring his
students out of their skulls as he
drones on about the Smoot-Hawley
tariff and the Laffer curve.
The tragedy is that the GOP’s
rhetorical flatness comes at a mo-
ment when economic growth ought
to be the heart of the Republican
attack. After all, since 2000 the
economy has been limping along at
a tepid average annual growth rate
of 2%. By contrast, in the half-cen-
tury before that, the economy aver-
aged 3.5% annual growth.
Hint: It’s not about numbers. The
issue is the damage that low
growth inflicts on possibility and
Mozambique, Cambodia and El
Salvador, in part because the inter-
against Islamic State might someday
convince the combatants that out-
right victory is impossible, but the
aspirations and a ladder up. And or Hillary Clinton promising paid national community learned how to U.S. has not shown the same vigor
the huge improvement in life for family leave. Most Republicans un- facilitate such settlements. in pursuing a commensurate politi-
the Ordinary Joe if we could bump derstand that jacking up taxes to We now know that negotiating cal process of national reconciliation
up that growth just one percentage expand social spending is a sucker’s an early end to a civil war involves that could produce a workable new
point. bet. But most Republicans are not three things: (1) shifting the mili- power-sharing agreement.
John Cochrane, an economist at yet fluent in a language of growth tary dynamics to a situation where In neither Iraq nor Syria is the
Stanford’s Hoover Institution, high- and opportunity that goes far none of the warring factions U.S. or its coalition partners build-
lights what’s at stake in an essay beyond vows of “creating jobs.” believes it can win an outright ing indigenous institutions or put-
that can be found on his blog, the The dominant narrative today victory and all believe they can ting in place an external peacekeep-
Grumpy Economist. The most strik- holds that economic growth is safely lay down their arms; (2) ing force that could convince Iraqis
ing fact from that essay? From 1952 something that benefits only hedge- forging a power-sharing arrange- and Syrians to trust that the
to 2000, real income per person in fund managers and Wall Street. In ment among all of the rival groups changes would last. Until Washing-
the U.S. rose from $16,000 to fact, a booming economy is the that ensures an equitable distribu- ton is willing to take such steps and
$50,000. Ordinary Joe’s only real hope for a tion of political power and eco- make ending the civil wars in Iraq
Think about that. That’s more better future for himself and his nomic benefits, coupled with guar- and Syria its priority, nothing
than doubling the standard of living family, and this future withers when antees against the oppression of worthwhile is likely to be achieved.
for the average American. Here’s growth is anemic. This presidential minorities; and (3) putting in place
the kicker: If over that same period campaign still awaits the Republi- institutions (external or internal) Mr. Pollack is a senior fellow of
of time the U.S. economy had been can with the wit and vision to make capable of ensuring that the first the Brookings Institution. Ms. Wal-
growing at our present 2% rate, real that case effectively to the Ameri- two conditions endure. ter is a professor at the School of
income per person in 2000 would can people. This approach is what the U.S. Global Policy and Strategy at the
have been only $23,000, not Write to mcgurn@wsj.com. achieved in Bosnia and (temporar- University of California San Diego.
$50,000.
In other words, a growing econ-
omy means a growing standard of
living. In human terms, that 3.5%
growth from 1950 to 2000 trans-
lated into more dreams fulfilled for
more Americans, whether that
meant a college degree, a home in a
decent neighborhood, or just the
certainty that your children would
do even better than you did. Not to
mention the national wherewithal P DCASTS
to do everything from tackling dis-
ease to providing for a military
strong enough to meet America’s
many challenges around the globe.
Now consider the future. In a
back-of-the-envelope calculation
that assumes a modest 1% boost in
population, Mr. Cochrane worked
out the difference between a U.S.
THE NEXT FOUR
economy whose GDP grows at 2%
(the “new normal”) over the next
eight years or one that grows at 3%
(better than what we have, but by
no means pie in the sky). For a guy
earning $50,000 a year, with 2%
YEARS AND BEYOND
average GDP growth, his income
would rise to $54,400 in eight
years. With 3% GDP growth, it’s
$58,675.
The point is, small marginal
gains in economic growth translate
into huge gains for the American
people. Better yet, this growth is
compounded—like getting a raise
year after year.
“Next to this increase in the
standard of living, nothing the can-
didates are talking about—monetary
policy, Fed, fiscal stimulus, mini-
mum wage hikes, pay equity, and so
on—even comes close to what
growth can bring ordinary Ameri-
cans,” says Mr. Cochrane.
This is the Republican answer to
all those Democratic promises of
new goodies, whether it’s Bernie
Sanders saying college will be free

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URBAN GARDNER A18 | CITY NEWS A18, A19 | THEATER TUESDAY A20 | HEARD & SCENE A21 | SPORTS A22

Time to Light It Up ‘Beauty’ Viewed

NBAE/GETTY IMAGES

Seven Ways
Why Calderon should be shooting guard | A22 ARTS | A21

WSJ.com/NY * * * * THE WALL STREET JOURNAL. Tuesday, February 16, 2016 | A17

La Guardia’s A New Terminal B

After a series of changes,

Revamp Pegged a long-awaited overhaul of a major

La Guardia Airport terminal is under
consideration by the Port Authority

At $4.2 Billion Pro

jec
tL
Ru
nw
ay
of New York and New Jersey.

New buildings
New estimate reflects often-ridiculed terminal build- im
its New roads/
ing, which was built in 1964, is
addition of central hall expected to close in coming Concourse A road structures
ay

to Terminal B project; months. The Port Authority,

nw

which operates the area’s ma-

Ru

decision looms on lease jor airports, is likely to con-

Hangar 3 Concourse B
sider terms of a final lease on FAA
Thursday. Hangar 5 control
BY ANDREW TANGEL West tower Headhouse
The cost of designing and parking
5A
The price tag of La Guardia constructing the new Terminal garage
Airport’s long-awaited over- B and related infrastructure is 5B
haul is now coming in at more pegged at $3.93 billion. That Connector to
Terminal C Terminal C
than $4.2 billion as major po- figure excludes other items,
Central heating and refrigeration plant
tential changes loom for the such as $147 million for Port East end substation
busy travel hub. Authority costs including staff Blvd.
Ditmars
The latest figure comes af- and overhead, $96 million for y. East
kw
ter a series of design changes third-party consultants and a lP parking
e ntr East lighting vault
and costs related to replacing $35 million for a temporary n dC garage
93rd St.

Gra EAST ELMHURST

92nd St.

the airport’s Central Terminal parking deck, according to a Terminal D

90th St.

Building, known to travelers as Port Authority resolution re- 750 feet Dit
Terminal B. A 2014 estimate of leased Friday. 24th Ave. ma
102nd. St.
101th St.

rs
100th St.
99th St.

Blv
98th St.

$3.6 billion from the Port Au- The agency also plans to set Sources: Federal Aviation Administration;
97th St.

d.
96th St.
95th St.
94th St.

thority of New York and New aside $182 million in reserves Port Authority of New York and New Jersey
Jersey for the overall project for the project. Factoring in THE WALL STREET JOURNAL.
didn’t include a new central other costs such as financing
hall. could push the project’s price
Plans for Terminal B include tag to about $5 billion, a per- evolved in the last year, and to be a boon to travelers. “Even if The Port Authority’s board cost and how long it will take.
the hall to unify it with the rest son familiar with the matter be sure, cost estimates in big there is some additional cost, on Thursday is also set to con- Another planned project, to re-
of the airport and added space said. projects often change as con- it’s so well worth it—the pay- sider a $2.3 billion revamp of make Terminals C and D, which
for security screening and re- The terminal project will be struction nears and once it back is mind-boggling,” said Terminal A at Newark Liberty are occupied by Delta Air Lines
tailers, as well as a potential constructed and financed commences. Joseph Sitt, chairman of the International Airport. Inc., has yet to take shape.
hotel. It is currently expected largely by a private consortium An airport-advocacy group Global Gateway Alliance. “We It remains unclear how Nor is it clear whether the
to open by the end of 2021. known as La Guardia Gateway said improvements to La Guar- deserve a top-notch, quality much La Guardia’s broader Port Authority will lift a 1984
A deal to replace the aging, Partners. The scope has dia are long overdue and would airport.” transformation will eventually Please see AIRPORT page A18

Teacher Decodes Path to Success Business of Albany

BY LESLIE BRODY

Allison Cuttler, a computer-

Stirs in Coffee Shop
science teacher in Newark, tries BY MIKE VILENSKY said City Hall official and for-
to boil hard concepts down to mer gubernatorial aide Erik
things that her students relate ALBANY—Lobbyist Barbara Bottcher, referring to the Mid-
to. Like how to order a McChi- Crosier had education funding town see-and-be-seen restau-
cken sandwich. on her mind when she bumped rant. “Albany has the Capitol
“When you go to into one of Gov. Andrew Dunkin’ Donuts.”
McDonald’s, you’re not sup- Cuomo’s aides at what might It is typically the first stop
posed to go behind the stand be the state’s most unassuming for Emily Giske, a partner at
and make your own,’’ explains power-broker hangout: the lobbying firm Bolton-St. Johns,
one of her students, Bren’et Capitol Dunkin’ Donuts. when she comes to town from
JENNIFER WEISS FOR THE WALL STREET JOURNAL

Muldrow, a 17-year-old senior. She ordered hazelnut coffee New York City. “You just walk
In other words, writing code is and mentioned her priority is- in and observe, and you figure
like telling an invisible cook sue to the aide. Now Ms. Cro- out what the rhythm of the
how to do something complex sier has a meeting scheduled week is,” she said.
through basic instructions. with an important Cuomo offi-
Ms. Cuttler’s tactics work.
Her computer-science students
cial to discuss preschool spe-
cial-ed funding. She has
‘Manhattan has
had a 100% passing rate on the Dunkin’ Donuts to thank. Michael’s...Albany
Advanced Placement exam last
spring, compared with 64% na-
At the humble spot that Ms.
Crosier said she uses as her Al-
has the Capitol
tionwide. Ten of the 39 African- bany office, “you see a lot of Dunkin’ Donuts.’
American teenagers who people come through,” she
passed it last year in New Jer- said. “It’s those kind of un-
sey were in her class. Allison Cuttler talks to students Martins Osasuwen and Nathalie Leonardo in her computer-science planned, unscheduled encoun- Ms. Giske said she can tell
Their achievement stands class at a Newark charter school. Watch a video about Ms. Cuttler and her class at WSJ.com/NY. ters, where you often see peo- which issues will come up in a
out at a time when few poor ple you might not be able to given week by seeing who’s sit-
and minority students nation- Science for All” initiative in science program three years conception that teachers need get an appointment with, that ting at Dunkin’.
wide tackle this challenging AP hopes of exposing students to ago to introduce city teenagers extensive experience in com- gets work done.” For Damien LaVera, a com-
subject, often because they lack what is increasingly seen as a to its creative logic well before puter science to teach it. Ms. Though the state Capitol munications director for the
access, find it intimidating or crucial and lucrative skill for the college, so they have time to Cuttler began her career as a has two regal chambers for attorney general, Dunkin’ puts
aren’t prepared. Some don’t modern job market. New York complete a major as undergrad- math teacher seven years ago legislating and plenty of public the political chessboard on dis-
have computers at home. AP City Mayor Bill de Blasio called uates if they find they love it. and has a masters in applied spaces for politicking, much of play. He realized one of his col-
courses cover college-level for a similar push last fall, The subject is a “great moti- math from University of Cali- Albany’s business goes down leagues was on the way out
work and can give students a promising more professional de- vator,” she says. “It’s an easy fornia San Diego. While there off the clock at this ground- when he saw the colleague
leg up in college admissions. velopment to address the dearth way for them to be able to pic- she took one undergraduate floor coffee shop. Over French holding frequent meetings with
Capable teachers for this of teachers who see themselves ture themselves in a high- class in computer science. She crullers and dark roasts, lobby- other officials there, “trying
high-tech subject are in great as equipped to teach it. achieving professional world prepared to teach the subject ists rub shoulders with policy awkwardly to avoid making eye
demand as districts nationwide Ms. Cuttler, a 31-year-old because they are learning a through a weeklong AP Sum- makers, political aides strate- contact,” Mr. LaVera said.
try to ramp up their offerings. teacher at North Star Academy skill that is directly market- mer Institute in 2013 and gize and partisan friction sub- “Wouldn’t you know it, a
Last month President Barack College Preparatory High able.” worked through several Java sides. few months later, they re-
Obama announced a “Computer School, started its computer- In her view, there is a mis- Please see TEACH page A18 “Manhattan has Michael’s,” Please see ALBANY page A18

56°
TODAY’S
Weather
Real Feel
A Rising Playwright Revisits the Family Holiday Drama
HIGH
9 a.m. 38° BY LIZZIE SIMON out. Ultimately, shameful se- atre after a successful run off-
5 p.m. 38° crets are revealed and broader Broadway last fall, wasn’t the
Stephen Karam had hoped existential terrors unleashed. It classic family plays, he said.
Record High
to write a thriller. is territory trod by giants of Rather, it was an interest in
71° (1954)
Instead, in his tragicomic the genre, such as Eugene the experimental contemporary
RAINY, Sunrise/Sunset play “The Humans,” already O’Neill, Tennessee Williams, works by playwrights Caryl
WINDY 6:49 a.m./5:32 p.m. garnering Tony Lorraine Hansberry and August Churchill and María Irene
THEATER Award buzz, Wilson. Fornés—specifically Ms.
Wednesday’s High some of the big- Mr. Karam, who at 36 makes Churchill’s facility with lan-
gest “action” his Broadway debut with the guage involving large groups of
46° comes in the form of mysteri- play on Thursday, isn’t entirely people and Ms. Fornés’s inno-
ous ceiling thumps and a comfortable with the compari- vations with staging plays in
STEVE REMICH FOR THE WALL STREET JOURNAL

grandmother wandering from son. real time.

N.Y. Sports Lineup her seat on the couch.
Not that “The Humans,”
7 p.m. Tuesday chronicling the Thanksgiving-
Flyers @ Devils day gathering of an Irish-
American clan from Scranton,
Pa., isn’t gripping. In the tradi-
tion of classic American family
8 p.m. stage dramas, it lures audi-
Wednesday ences with sharp humor and
Blackhawks @ unpretentious, ripped-from-
Rangers the-dinner-table dialogue. Be-
fore long, simmering tensions
For N.Y. sports coverage, see A22 and resentments start seeping
“I think I and virtually every He also drew inspiration
playwright has been deeply in- from a 1919 essay by Sigmund
fluenced by ‘Long Day’s Jour- Freud, “The Uncanny,” wherein
ney’ and ‘Death of a Salesman’ the famed founder of psycho-
and ‘Glass Menagerie’ and ‘Rai- analysis explores, in his words,
sin in the Sun’ and ‘The Piano “in what circumstances the fa-
Lesson,’ etc.,” he said. “They miliar can become uncanny and
are a part of our conscious- frightening.”
ness. There’s no not being in- “I thought the play would be
fluenced by them.” far stranger and more experi-
What sparked his writing mental,” he said, and more in
“The Humans,” now in pre- the thriller mode. “The influ- Playwright Stephen Karam’s comedy-drama ‘The Humans,’ which
views at the Helen Hayes The- Please turn to page A20 opens soon on Broadway, is already generating Tony Award buzz.
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
A18 | Tuesday, February 16, 2016
CITY NEWS
AIRPORT The Museum of Sex Demotes the X
weighed in on the perimeter
rule early last year, according
to Port Authority documents
obtained via a public-records
Continued from page A17 request. While it isn’t among the
restriction on flights to desti- Jeffrey Goodell, an executive myriad issues I lose sleep
nations more than 1,500 miles at JetBlue Airways Corp., over, I do miss those giant
away. Lifting the so-called pe- which has a hub at JFK, said colorful banners, the size of
rimeter rule at La Guardia any change to the perimeter tall-ship sails, that once hung
would shake up New York rule “would add an additional from the Metropolitan Mu-
City’s airport system that gen- layer of traffic and complexity seum’s beaux-arts facade ad-
erally relegates long-haul do- to an already challenging envi- vertising the exhibits inside.
mestic and overseas flights to ronment.” They were replaced by more
Newark and John F. Kennedy Kate Gebo, an executive at discreet signage several years
International airports. United Airlines Inc., which has ago.
Delta, which has generally a hub at Newark, warned of When you see them now
handled about 40% of La Guar- “significant impacts on air traf- in photographs or movies
dia’s passengers, has long sup- fic, congestion and competi- they evoke a
ported lifting the restriction. tion” across the region’s air- bygone era.
Eliminating the perimeter space. So it was
rule would likely allow the air- Melinda Katz, the Queens with some
line to offer lucrative long-dis- borough president, has called trepidation
tance flights from its La Guar- for an environmental-review that I
dia hub. Higher fares and process to address potential learned re-
increased passenger volumes noise, pollution and traffic con- URBAN cently that
could also help the airline fi- cerns at La Guardia, which is GARDNER the Museum
nance its expected portion of located in Queens. RALPH of Sex, on
La Guardia’s overhaul. The Port Authority, which GARDNER JR. Fifth Avenue
“Eliminating the perimeter has been studying potentially in the Twen-
rule will give customers the lifting the rule, likely wouldn’t ties, is up-
ability to choose how and reconsider the restriction until dating its branding, too.
where they fly and allow carri- the fall, a senior official at the “One of the challenges
ers to match capacity with that agency said. from Day One was describing
demand,” Delta President Ed- “It needs to be an open and what the Museum of Sex was
ward Bastian wrote to the Port transparent process that re- and wasn’t,” Dan Gluck, the
Authority in a March 2015 let- flects the fact that the decision museum’s founder and execu-
ter. has been made on the merits,” tive director, told me over the
Lifting the perimeter rule this official said. “There are no phone.
raises a host of issues includ- preconceived outcomes here.” I frankly thought they’d
ing aircraft noise, whether air- A decision would likely fol- done a pretty good job. Say
lines would retain flights to low at least a few months of what you will about sex, it is
smaller markets and effects on public disclosure and opportu- one of the strongest brands
Delta’s competitors. nity to comment on the matter, out there.
Some of those airlines also the official said. The original logo, con-
ceived by graphic designer
Michael Bierut in 2002, in-
cluded an “X” that was
bolder than the other letters.
I always thought that both
obvious and clever. But ap-
parently it no longer satisfies
the museum’s evolving mis-
sion. “It wasn’t the whole
story,” Mr. Gluck explained.
“It rang too much of erotica.
We’re not an erotica brand.
We’re trying to build a Kunst-
halle for human sexuality.”
So Mr. Gluck commis-
sioned Base Design, an inter-
national branding agency, to
come up with something that
better captured his institu-
tion’s not inconsiderable am-
bitions.
I met with two of Base’s
LIFE DOESN’T partners, Min Lew and Geoff
Cook, to review their work on
MoSex’s behalf and perhaps,
LIFE DOESN’T
Your time is valuable,
...so choose MMU.
before it was too late, to add
my two cents’ worth. I still
miss the oversize banners
Your than
timeyou
is valuable,
TEACH
We’re closer think
...so choose MMU.
...minutes to Manhattan.
We’re closer than you think
...minutes to Manhattan. Continued from page A17
software books on her own.
Her success earned her a
$25,000 national teaching prize
in December from the Milken
Family Foundation. She plans
mmuair.com to spend it on furthering her
computer-science education
–––––––––– Runway 5/23 6000’ Cat I, ILS ––––––
mmuair.com
24hr Index B Aircraft Rescue ––––––––––
and a college fund for her 10-
month-old son.
––––– User Fee U.S. Customs & Border Protection –––– FAA Air Traffic Control Tower –––––
Ms. Cutler’s smiling but no-
nonsense style was on display
during a recent lesson. She used
Proud provider of Phillips 66® Jet A and 100LL. a timer to change tasks every
©2014 DM
Morristown
AIRPORTS,
Municipal
LTD. AllAirport.
rights reserved.
All rights reserved.
ww.ad.wsj.12.14
ww.ad.wsj.5.13
two or five minutes to keep a
sense of urgency. As her stu-
dents worked in pairs to write
Java code on paper, she moved
from team to team asking, “How
would you fix that?” and “How
do you know?” and “Why?”
Expectations are high. Her
classroom wall has a faux park-
ing sign warning “No Slacking
Any Time.” Below it hangs a
Don’t just ALBANY
Continued from page A17
walk down
signed to start a new gig,” he
added.
New York political veterans
said the Dunkin’ Donuts is the
latest in a long lineage of local
the aisle...
clubhouses. Far from home for
many legislators, Albany has
long had a reputation for bad
behavior. But with scandals
rattling the Statehouse and in-
creased public scrutiny, the po-
litical crowds have thinned out
at some local after-hours ven-
ues as new regulations have
been placed on lobbyists buy-
ing big dinners and drinks for
Own it. lawmakers.
Instead, those crowds now
turn to coffee, a beverage that
might get them into less trou-
ble.
Jack McEneny, an Albany
Let our Wedding Consultants help you choose historian and retired assembly-
man, recalled how new regula-
the perfect wedding suit or tuxedo tions began to change the capi-
tal’s social scene. “There have
always been places where peo-
ple have gathered, but it’s be-
come a problem in this modern
age,” he said. “If you meet
Custom clothing for the knowing man. someone for dinner, they think
you’re cutting a deal.”
Learn more about our complimentary wedding services -weddings@mysuit.com Mr. McEneny said “neutral
turf” like Dunkin’ is important
Min Lew and Geoff Cook of Base Design are overhauling the marketing of the Museum of Sex.
that graced the Met’s facade.
I also have a certain affection
for erotica, tastefully ren-
dered.
“From Day One, Dan de-
fined the Museum of Sex as
an experimental platform,”
Ms. Lew explained. “They’re
not a collecting museum.
We’re no longer playing with,
or highlighting, the ‘X’.”
She offered examples of
exhibitions for which a bold
“X” might leave visitors, who
pay $18.50 + tax admission,
feeling oversold.
“The Sex Life of Animals”
“Sex In Design”
“Museum = container in
which ideas are being bred
and conceived,” Mr. Cook
added (whether the pun was
intentional or inadvertent I
wasn’t sure) as images
flashed on a screen in their
Financial District conference
room. “We’re not saying a
lot; just capturing their
spirit.”
The images included sev-
eral that weren’t unexpected,
such as a pair of luscious fe-
male lips and what appears
to be vintage erotica of a cou-
ple, well, sharing a moment.
There is also an image of
Donald Trump that his fol-
lowers might consider sexy,
Cracking the Code
The number of U.S. students taking Advanced Placement exams in
computer science is growing but few are poor, black or Hispanic.
2015 Advanced Placement Computer Science examinees
Total
Low-income students 6,079 (13% of total)
Hispanic students 4,272 (9% of total)
Black students 1,784 (4% of total)
Source: College Board
chart that tracks each student’s
absences to underscore the
connection between their
grades and showing up. All of
her AP students have manda-
tory tutorials in small groups
outside of class. Some see her
for one-on-one help too.
Nigel Harvey, 17, says Ms.
Cuttler has a way of making
him feel like he should keep
pushing himself. “I remember
this time I got 100 on a test,”
he says. “There was an extra
The Dunkin’ Donuts on the ground floor of the Statehouse has
become a place for Albany power brokers to see and be seen.
so that lawmakers can see each
other as humans. “In the name
of good government, the capi-
tols of this country are becom-
ing much duller,” he said.
Not dull enough for some
officials.
On a recent morning at the
Statehouse Dunkin’, New York
City Comptroller Scott Stringer
said it had “too many parti-
tions” that could enable back-
room brokering. Pointing to his
staff, he added, “We’re Man-
hattan reformers.”
Dunkin’ isn’t the only game
in town. When a group of
young lawmakers planned
Sheldon Silver’s ouster last
* ***
though it looked to me like a
simian engaged in some sort
of dominance display.
The BASE team suggested
I not read too much into the
sample. The point is that
pretty much anything could
be thrown into that vessel,
between the words “Mu-
seum” and “of Sex.”
“It doesn’t have to be
Donald Trump,” Mr. Cook ex-
plained. “The role of this is to
make the public understand
‘We’re not an erotica
brand. We’re trying
to build a Kunsthalle
for human sexuality.’
that at the Museum of Sex
there is this breath of investi-
gative process. It’s a play-
ground, a lab.”
One of the more lyrical
images involved a topless fe-
male frolicking in a field of
wildflowers, the “S” and the
“E” of “sex” discreetly cover-
ing her breasts.
“It’s very Sound of Music,”
Mr. Cook observed.
As attractive as the new
branding is, I was slightly
concerned that MoSex is
46,344
Note: The College Board calls
this course Computer Science A.
A new course called Computer
Science Principles will
start in the fall 2016.
THE WALL STREET JOURNAL.
credit problem, and she said
‘Nigel, you could do better.’ ”
Many of her students intend
to be the first in their families
to get a four-year college de-
gree. The high school is one of
11 charters run by North Star,
which serves about 4,000 stu-
dents in Newark. The network
says 95% are African-American
or Hispanic and 86% qualify for
free or reduced-price lunch.
The Newark network wants
to grow but faces opposition
year, they did it at an Ap-
plebee’s just outside the city
limits. Some higher-end steak-
houses and Italian restaurants
in the area continue to bring in
business from politicians too.
But the nearly two-year-old,
3,150-square-foot Dunkin’ Do-
nuts in the Capitol building has
its logistical advantages, such
as Wi-Fi and power outlets,
which come in handy for day-
trippers without Albany of-
fices.
Its employees have taken
notice of the Capitol crowds.
On Tuesdays, “the retail area is
packed with lobbyists,” Dunkin’
employee Kayla Montanaro
THE WALL STREET JOURNAL.
RALPH GARDNER JR/THE WALL STREET JOURNAL
throwing out the proverbial
baby with the bath water.
Mr. Cook told me not to
worry. “The people coming
for the sex are always going
to come,” he explained. “The
point is to get the others that
might not consider that for a
Saturday afternoon.”
I saw his point. Given all
the cultural options available
in New York City, chances are
I’d hit the Élisabeth Louise
Vigée Le Brun show at the
Met before I would “The Sex
Lives of Animals.”
Dan Gluck’s goal is noth-
ing less than to persuade the
average Met patron that sex-
uality, human or otherwise,
can be as intellectually stimu-
lating as Surrealism and as
elegant as French Neoclassi-
cism.
He isn’t dismissing a fu-
ture partnership with the
Met, either. “The Met has a
massive collection of items
they don’t necessarily feel
comfortable showing to the
public,” he said without spec-
ifying what they are, but cer-
tainly piquing my interest. “I
feel they hold back because
they don’t want to be too
controversial.”
ralph.gardner@wsj.com
from Mayor Ras Baraka, a for-
mer district school principal. In
December he asked the state
education chief to halt further
charter expansion until the dis-
trict schools have enough
money to deliver quality educa-
tion. Charter opponents say
these taxpayer-funded, inde-
pendently operated sites drain
too many resources from tradi-
tional public schools, while fail-
ing to serve their fair share of
the most challenging students.
District officials say about
17% of its nearly 36,000 stu-
dents have special needs. North
Star says 8.4% of its students
are classified that way, though
more get intervention services.
North Star is part of Uncom-
mon Schools, a charter man-
agement organization where
John B. King, Jr. served as
managing director before be-
coming state education com-
missioner in New York. Now he
is acting U. S. Secretary of Edu-
cation.
said through a communications
firm for Dunkin’.
Michael Kink, the executive
director of the union-backed
Strong Economy For All Coali-
KEVIN HAGEN FOR THE WALL STREET JOURNAL
tion, a liberal advocacy group,
was in Albany lobbying against
a tax credit for private schools
last year when he ran into sup-
porters of the credit at Dunkin’
and exchanged “some good-na-
tured joshing.”
The groups have sparred be-
fore, but under the coffee
shop’s fluorescent lighting,
there was something more like
camaraderie and a “town
square” feel, Mr. Kink said.
“It’s a place you can have
coffee and say, you got that
bill,” he added, referring to
legislation, and perhaps also
the tab, “but I’m going to get
the next one.”
We Want to Hear
From You
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 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.
Tenants in Maze
Of Courts Get
A Helping Hand
BY ZOLAN KANNO-YOUNGS
When 74-year-old Marie Em-
manuel received a summons to
appear in housing court for the
first time in her life, she said
she felt alone, afraid and over-
whelmed.
Ms. Emmanuel, a soft-spo-
ken widow, has lived in her
two-bedroom, rent-stabilized
apartment in Brooklyn for more
than 30 years. She said didn’t
have money for a lawyer, and
that she dreaded the prospect
of standing in front of both a
judge and her landlord, who
she presumed would have an
attorney.
Navigators explain
how the courts work,
and help gain access
to social services.
“I worried a lot about the
whole process,” she said. “It’s
my first time, so I don’t know
how much to say.”
But when a judge addressed
her on a recent morning in a
Brooklyn courtroom during the
latest phase of her housing dis-
pute, a calm Ms. Emmanuel
didn’t need to say much. She
left the talking to her court
navigator, Ernest Martinez.
The Court Navigator Pro-
gram, which the court system
launched in February 2014,
guides people who don’t have
an attorney through the com-
plexities of their legal case. Un-
like criminal court, civil court
doesn’t provide a lawyer to
those who can’t afford one.
The navigators, most of
them college students, typically
start by helping eligible liti-
gants with their initial paper-
Top Dogs Take Center Stage in New York
PETER J. SMITH FOR THE WALL STREET JOURNAL (4)
CANINE SHINE: The 140th annual Westminster Kennel Club Dog Show got under way on Monday. Above, a line of
Bichon Frises wait to be judged. Watch a video on dogs getting prepped to compete in the show at WSJ.com/NY.
Greater
New York
Watch
BRONX
Officer Shoots, Injures MANHATTAN
A Man Waving Gun Grand Central Partly
A New York Police Department In Dark After Outage
officer shot and injured an armed
gunman on Monday, officials said.
A motorist alerted a trio of of-
ficers that he saw a 29-year-old
man waving around his gun near
Tinton Avenue in the Morrisania
section at 3:43 p.m., police said.
The suspect, identified by a
law-enforcement official as
George Watson, ignored orders to
drop his firearm, police said. He
was shot once in his right shoul-
der and was taken to Lincoln
* * * *
work in the clerk’s office. They
help explain how the court sys-
tem works and help access in-
terpreters and social services.
They also can accompany liti-
gants in the courtroom in every
borough except Staten Island.
Navigators are trained and
supervised, but they aren’t li-
censed lawyers and aren’t per-
mitted to give a legal opinion.
In court, however, they can re-
mind oft-overwhelmed tenants
of facts and respond to a judge
if asked a question.
Fern Fisher, the program’s
supervisor and deputy chief ad-
ministrative judge for New York
City Courts, said the naviga-
tors’ most valuable service is to
stand in court with a tenant
who can’t obtain a free lawyer
from another legal service.
“People before the court often
become very nervous and they
forget to provide valuable in-
formation,” Judge Fisher said.
Last month, when a judge
asked Ms. Emmanuel about her
attempts to get her landlord to
finish repairs in her Crown
Heights apartment, and she had
no response, the judge turned
to her navigator.
Mr. Martinez, 27, then asked
the judge if the court could
send an inspector to the apart-
ment to ensure the repairs get
completed.
Mr. Martinez said he be-
lieves having a lawyer in civil
court is just as important as in
criminal court. “When it comes
to the right of having a lawyer
in a civil court case, a housing
court case, their livelihood is
totally at stake too,” he said.
“Things would’ve gone so much
more faster for her if she
would’ve had a lawyer.”
Many organizations in New
York City provide legal services
for civil cases, including one
Medical Center in stable condition,
police said. The suspect’s .22 cali-
ber Ruger pistol was recovered at
the scene, police said.
The three officers were taken
to a Jacobi Medical Center and
treated for tinnitus caused by the
gunfire, officials said. Mr. Watson
hasn’t yet been charged with a
crime, police said.
—Mark Morales
A power outage at Grand Cen-
tral Terminal on Monday left
some of the station in the dark
but had minimal impact on trains,
a Metropolitan Transportation Au-
thority spokesman said.
A water pipe had burst, flood-
ing a transformer vault that feeds
power to Grand Central, the
spokesman said.
Some ticket vending machines
weren’t working, and all trains on
the lower level were rerouted to
CITY NEWS
Navigator Ernest Martinez was allowed to stand with Marie Emmanuel, 74 years old, in front of a Brooklyn Housing Court judge.
Navigator Traci Krasne left, helps a client at Brooklyn’s Housing
Court. The service helps litigants who can’t afford their own lawyer.
aimed at senior citizens in
need. That program denied Ms.
Emmanuel’s request for a law-
yer, even though she fit the
qualifications, Mr. Martinez
said. The problem was too few
lawyers, he said.
Mayor Bill de Blasio recently
the upper level, he said.
On Monday afternoon, ATMs
and train monitors had blank
screens, and escalators leading to
the station’s lower level were sta-
tionary and blocked by yellow
tape. The station’s lower level ap-
peared dark and empty.
“It’s crazy,” said Trae Basore,
31, who had planned to meet a
Brooklyn Firefighters battled the blaze that engulfed a three-story
wood-frame house in the Greenpoint neighborhood late on Sunday.
Tuesday, February 16, 2016 | A19
Records show between 85%
and 90% of all tenants who en-
ter housing court don’t have
legal representation, Judge
Fisher said.
“Even with as much funding
as we can come up with, there
still will be people without
lawyers,” she said. “[When]
lawyers can’t be there, the
navigators fill in.”
Traci Krasne, 24, who is ap-
plying to law school, spends
her Monday and Wednesday
mornings weaving through a
line of frustrated tenants
cramped inside the bland sec-
ond-floor of housing court in
Brooklyn.
Navigators look for people
who are starting the process
announced the creation of the with their nonpayment case
Office of Civil Justice, which and live in rent-stabilized
would manage $70 million for apartments. Out of the scores
legal-assistance programs. But of people who waited in line,
even with that new effort, the Ms. Krasne said she would
available services are insuffi- likely consult with four by the
cient to meet the enormous end of the day.
need, Judge Fisher said. “People are pretty frus-
Breeds include, clockwise from
above, Yorkshire Terrier, English
Springer Spaniel and Dalmatian.
friend at the Oyster Bar. The res- BROOKLYN
taurant was closed due to the
power outage. “I’ve lived here a
Four People Injured
long time and have never seen
this happen before,” he said.
In Greenpoint Fire
A four-alarm fire in Greenpoint
The MTA expects power to be
fully restored by Tuesday morn-
late Sunday night injured four
people and required 168 firefight-
ing, an MTA spokesman said on ers to quell the blaze, the Fire De-
Monday evening. partment of New York said on
—Corinne Ramey Monday.
The FDNY received a call at
10:22 p.m. on Sunday, and the fire
was under control by 1:28 a.m.
Monday, a fire department
spokesman said.
PETER J. SMITH FOR THE WALL STREET JOURNAL
Two firefighters and two civil-
ians had minor injuries, and all
four were taken to hospitals.
Three residential buildings on
Diamond Street sustained heavy
water and fire damage, the
spokesman said.
Photos and videos posted on
Twitter show flames engulfing
the building. “It was just flames
shooting out, windows popping
and shattering,” said Michele
Colic, 46, who lives nearby.
Fire officials said the cause is
STEVE REMICH FOR THE WALL STREET JOURNAL (2)
trated and overwhelmed,” she
said.
“A lot of people don’t really
know what the process is.
They’re coming in with diffi-
cult circumstances because a
lot of people are here because
they can’t pay their rent or ha-
ven’t paid their rent,” she
said. “They can’t get a hold of
their landlord to talk about it.”
When Nadia Membreno, 34,
of Bensonhurst came to court
to answer a petition from her
landlord and saw the line on
the second floor, she said she
thought her whole day was
wasted.
But after speaking to Ms.
Krasne, she was able to cut
into the line and received indi-
vidual help filling out the pa-
perwork. She was out of the
courtroom with a referral to a
legal service within 20 min-
utes.
“I would’ve never thought I
was going to get out this
easy,” she said.
under investigation but that the
blaze didn’t appear suspicious.
—Corinne Ramey
NEW YORK
London Flight Is Hit
By Laser, Turns Back
A Virgin Atlantic flight bound
for New York from London was
turned back Sunday night after a
laser was beamed into the cockpit,
officials said.
Flight VS025 had just left
Heathrow Airport when the inci-
dent occurred, authorities said. The
plane turned around as a precau-
tionary measure, officials said.
Customers were offered over-
night accommodations before be-
ing placed on other flights to New
York.
“We are working with the au-
thorities to identify the source of
the laser that caused the return of
the aircraft to Heathrow,” said a
spokeswoman for Virgin Atlantic.
No arrests have been made.
—Mark Morales
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
A20 | Tuesday, February 16, 2016 * *** THE WALL STREET JOURNAL.

THEATER TUESDAY

BRIGITTE LACOMBE (2)

Two scenes from ‘The Humans,’ which opens at the Helen Hayes Theatre on Thursday in playwright Stephen Karam’s Broadway debut.

Rising Playwright Goes to Broadway

Continued from page A17
ence of classic family dramas
crept in slowly until it took a
hold of the piece, almost in
spite of myself.”
In “The Humans,” which
takes place in a single scene
over 95 minutes, the Blake
family convenes for Thanksgiv-
ing in the basement Chinatown
apartment of the youngest sib-
ling, Brigid (Sarah Steele), and
her boyfriend Rich (Arian
Moayed). The couple is hosting
Brigid’s mother Deirdre (Jayne
Houdyshell) and father (Reed
Birney), as well as her sister
Aimee (Cassie Beck) and
grandmother Momo (Lauren
Klein).
These people seem to like
each other more than usual for
family dramas. Their fights lack
the hysteria and vitriol custom-
ary to the form. Their secrets
are rather ordinary. And their
anxieties—about old age, ill
health, heartbreak and
money—are the inevitable wor-
ries of almost any family
around any table.
“I seem to be interested in
the dark underbelly of even
functional families,” said Mr.
Karam, “instead of capital-D
dysfunctional drama.”
Mr. Karam, raised in Scran-
ton, Pa., comes from an enor-
mous, close-knit Lebanese-
American clan: At last count, he
had more than 40 cousins. He
said his plays, which include
“Speech and Debate” and “Sons
of the Prophet,” a Pulitzer fi-
nalist, are all works of “emo-
tional autobiography.”
Between laughs, “Humans”
quietly packs a wallop, tapping
into deep human anxieties: the
lingering terror of having been
an up-close witness to 9/11, the
dread and confusion of demen-
tia or finding oneself suddenly
on the precipice of retirement,
without savings.
“I still don’t know how Ste-
phen does this, because in a
‘Humans’ is inspired
partly by a 1919
Sigmund Freud essay
‘The Uncanny.’
sense it’s all incredibly mun-
dane, and the play seems so ef-
fortless and without any obvi-
ous machinations,” said Mr.
Birney. “But it gets under your
skin. That’s very difficult to
achieve.”
He said he was an “interest-
ing and not obvious choice” to
play the patriarch, Erik Blake, a
janitor at a private Catholic
school. “Usually I’m playing
teachers, suits, upper-middle-
class types. I think perhaps I
bring a more obvious vulnera-
bility.”
Ms. Houdyshell estimated
she has played a mother in
family dramas more than 30
times across her 40-year ca-
reer. “Each and every one of
them is an individual in her
own right.”
She characterized Mr.
Karam’s writing as some of the
most delicate and hyper-natu-
ral she has ever performed.
“And in this day and age, I
think we are especially respon-
sive to more nuanced realities
than in other eras when senti-
ment, or larger emotional dy-
namics prevailed.”
A new work by a relatively
unknown playwright performed
by an ensemble of noncelebri-
ties isn’t an alluring commer-
cial prospect. And yet producer
Scott Rudin quickly negotiated
the Broadway transfer after at-
tending an early preview at the
Roundabout before the reviews
were even in.
“It’s a beautiful production
of a profound and personal play
that takes remarkably everyday
events and makes them some-
how huge and haunting,” said
Mr. Rudin, who saw parallels
between “The Humans” and the
family dramas of Arthur Miller.
“Who could say no to that?”
Particularly compelling to
him was the interplay of finan-
cial and existential issues bear-
ing down on Mr. and Mrs.
Blake, who represent many
middle-class Americans feeling
disenfranchised and disempow-
ered.
“I felt that this was a subject
that very few new plays of
breadth and scale have tackled
in a long time, and it felt like a
subject with which many the-
atergoers might have a per-
sonal relationship.”
Mr. Karam said the arrival of
his play on Broadway feels like
something of a miracle.
The Helen Hayes is located
across the street from “Phan-
tom of the Opera,” the first
Broadway show he saw as a 12-
year-old on a school trip from
Scranton. “I’m in awe of the fact
that we’re here. There’s some-
thing otherworldly about it.”

ance last summer with her tary, on story boards.

John Atkinson Grimshaw
Autumnal Day, Stapleton Park
British master. Monumental size. Iconic
setting. This original oil on canvas by
John Atkinson Grimshaw permeates
with the red glow of the autumnal sun.
The picturesque Stapleton Park was
the subject of some of the renowned
painter’s most significant works, and
the idyllic park provides the perfect
setting for his celebrated autumnal
scenes. Showcasing Grimshaw’s mastery of light and atmosphere, this romantic
scene is enhanced by its grand size of nearly four feet wide, drawing the viewer
ever deeper into the majestic composition. Signed “Atkinson Grimshaw 1877”
(lower right). Canvas: 311/4”h x 471/4”w; Frame: 411/4”h x 563/4”w. #30-4501
Backstage
Buzz
Mike Nichols, Telling
His Life’s Stories
The HBO documentary “Be-
coming Mike Nichols,” which airs
Feb. 22, brims with observations
and stories shared by the ac-
claimed director and performer.
And it all started with a case
of writer’s block.
Nichols was having severe
trouble writing his autobiogra-
phy, said the documentary’s di-
rector, Douglas McGrath. Nichols
shared his frustration with his
friend, theater director Jack
O’Brien, who suspected that a
trove of great stories would go
untold. Among friends, the idea
of a documentary came up,
which writer and producer Frank
Rich took to HBO.
The result: a 72-minute inter-
view between Mr. O’Brien and
Nichols, filmed at Broadway’s
Golden Theatre in the summer
of 2014, just months before
Nichols death in November.
The interviews took place in
two sessions, one with an audi-
ence, one without.
“We knew that some of the
conversations would be more in-
timate, more personal and less
designed for a seated audience,”
said Mr. McGrath, who knew
that Nichols also had stories
more suited to telling at a party.
“Those don’t benefit from being
told one-on-one.”
The lucky folks in the audi-
ence weren’t entirely theater and
Hollywood friends of the cre-
ators, said Mr. McGrath—at
Nichol’s request: “He wanted it
to be strangers who were com-
ing because they were inter-
ested.”
nightclub jazz act. “I was in a
gold lamé dress,” she said. “And
behind me was the set for ‘A
Moon for the Misbegotten.’ ” The
festival staged the Eugene
O’Neill play last August, starring
six-time Tony Award winner
Audra McDonald.
As for playing Principal Mc-
Gee in Fox’s “Grease Live,” Ms.
Gasteyer said she relied on her
“Saturday Night Live” experience,
where “everyone is in a whirlpool
of anxiety and angst. Everyone,
down to the hairdresser, is expe-
riencing the same panic.”
The trick, she said, is setting
a goal, be it having fun or being
free enough to remember the
performance. “If you are telling
yourself ‘I am going to be the
best,’ ” she said, “you‘re going to
blow it.”
‘Hamilton’ Prepares
For the Grammys
To get ready for the 2016
Grammy Awards broadcast, the
nominated cast of “Hamilton”
spent most of Monday, typically
a day off, painstakingly preparing
the show’s opening number.
Director Thomas Kail and cho-
reographer Andy Blankenbuehler
led the rehearsal, stopping and
starting over and over, enabling
the multiple cameras to give mil-
lions of viewers the visuals to
pair with music that has spread
far beyond Broadway. The
soundtrack has dominated Bill-
board’s cast-album rankings and
topped its rap chart last year.
“For this audience, music is so
important,” said Mr. Blankenbue-
hler, who had worked out the
number, an expository rap about
the nation’s first Treasury Secre-
Still, he was well aware of
the limited camera view com-
pared with what audiences usu-
ally see in the theater: “You can’t
see all the framing devices.”
Nominated for Best Musical
Theater Album, “Hamilton” had
the opportunity to perform live,
within its home at the Richard
Rodgers Theatre, because the
Grammys chose to broadcast on
a Monday, when the theater is
usually dark.
While the moment wasn’t
lost on the room—“America is
going to love this!” someone in
the dark theater shouted—the
cast did start getting punchy.
That included the show’s creator,
Lin-Manuel Miranda, who spun
out of a solo moment and
launched into Stephen Foster’s
“Old Folks at Home,” with some
impromptu help from an out-of-
sight pianist.
Manning the ‘Boats’
Come summer, Playwrights
Horizons and Clubbed Thumb
will bring back the gender-
bender comedy “Men on Boats”
for a run at Playwrights’ Peter
Jay Sharp Theater July 19 to
Aug. 14.
Inspired by geologist and ex-
plorer John Wesley Powell’s 1869
expedition on the Colorado River,
the production dramatizes out-
door adventure—complete with
running rapids, fishing and
drowning—all while challenging
expectations of gender and race.
A hit of Clubbed Thumb’s 2015
summer series, “Men on Boats”
sold out its short, 11-perfor-
mance run, said Maria Striar,
producing artistic director.
—Pia Catton

Berkshires Bidding
Singer and comedian Ana
Gasteyer kept the Williamstown
Theatre Festival gala crowd
laughing during its charity auc-
BOB WILLOUGHBY/MPTV/HBO

tion last week. As bidding on

two “Hamilton” tickets hit
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Gasteyer made her first appear- film editor Sam O’Steen. ‘Becoming Mike Nichols’ airs Feb. 22.
 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. * * Tuesday, February 16, 2016 | A21

ARTS & ENTERTAINMENT

Smart Design, With a Dose of Beauty Too

BY ANDY BATTAGLIA

T
he eye of the beholder
is in for a sight at
“Beauty—Cooper Hewitt
Design Triennial,” an exhibit
featuring top recent design
work from around the world.
The fifth in a series inaugu-
rated in 2000, the triennial
surveys the vision of 63 de-
L-R: MATT FLYNN/COOPER HEWITT, SMITHSONIAN DESIGN MUSEUM; YEONGKYU YOO; DELFINA DELETTREZ

signers working in vastly dif-

ferent fields, from furniture to
product design to fashion.
This year’s theme, “Beauty,”
is viewed through the prism of Clockwise from left:
seven different categories: Giambattista Valli gown;
Ethereal, Intricate, Transfor- Yeongkyu Yoo bottle
mative, Transgressive, Ele- humidifier; Delfina Delettrez
mental, Emergent and Extrav- earring; Vlisco textile; Humans
agant, with several designers since 1982 timepiece; Neri
grouped within each. Oxman ‘wearable, synthetic
“What we’re seeking to do organ system’; and Brynjar
with this show is to have visi- Sigurðarson side table.
tors experience and under-
stand design and its play with ing, the theoretical body aid is
the senses,” said Andrea part of a project that calls on
Lipps, assistant curator at the ideas culled from robotics,
Cooper Hewitt, Smithsonian material engineering and syn-
Design Museum and co-cura- thetic biology. It also comes in
tor, with Ellen Lupton, of the orange, for the astral traveler
show. “Design is utilitarian in need of a different look. couture. Described on the dis-
and very much about solving play label as a “feathery tulle
problems, but part of its func- Theme: Extravagant ball-gown skirt with piped pa-
tion can be teasing our minds Designer: Giambattista jama top,” it pours to the
and heightening our senses.” Valli floor in a manner that signals
The exhibit, which opened This cascading gown by Gi- both sensible wearability and
Friday and remains on view ambattista Valli represents high-fashion romanticism,
until August, takes over galler- the Italian-born designer’s with candy colors that
ies on two floors as well as Theme: Ethereal patterns that have found favor Theme: Elemental forays into the realm of haute sweeten the deal.
the lobby, an elevator and Designer: Humans Since in Africa, where they are fash- Designer: Yeongkyu Yoo
hallways of the museum, 1982 ioned into clothes that seem to From home bases in South
which is part of the Smithso- Created by a design duo in flicker and blink as they move. Korea and Seattle, Yeongkyu
nian Institution network based Stockholm (both of whom The “wax print” designs are Yoo designs clean, elegant ob-
in Washington, D.C. Below are were born in 1982), this monu- applied to cotton via an Indo- jects that make technology
seven highlights, one from mental timepiece features 288 nesian batik process, and the seem pliable and soft. His bot-
each category. clocks sweeping through syn- resulting patterns—displayed tle humidifier, like other
chronized, abstract move- on a colorful mannequin in the pieces designed for his com-
ments until, every 60 seconds, museum—are often made in mercial enterprise cloudandco,
the hands collectively spell out dialogue between the Dutch is simple and austere, with a
the correct hour and minute of designers and the African seductive white matte finish
the day. traders who use them. and a power cord that takes
The kinetic action is mes- the form of a USB cable in
merizing as wild lines and de- Theme: Transformative bold, bright orange. Other
signs take shape. And when Designer: Brynjar pieces include an aluminum
the clocks’ hands come to- Sigurðarson speaker unit with a leather
gether to configure numbers, During a trip to a tiny fish- strap that looks like a mini-
they illustrate a conceptual ing village in Iceland, Brynjar malist canteen.
conceit: digital time displays Sigurðarson took some tips
made from whirring analog from a local shark hunter and Theme: Emergent
clocks. wound up with his Silent Vil- Designer: Neri Oxman
lage collection of furniture Born in Israel, Neri Oxman
Theme: Intricate crafted with homegrown tech- is affiliated with the Massa-
Designer: Vlisco niques. chusetts Institute of Technol-
Textiles by Vlisco, founded Employing knots and knit- ogy Media Lab, where the rou-
VLISCO NETHERLANDS B.V.

in the Netherlands in 1846,
tend toward vivid, hypnotic
ting patterns used for fishing
nets, he affixed earthy ele-
ments to simple structures,
such as a side table adorned
with bits of rope, feathers and
fishing hooks, and a large
shelving unit accentuated with
chains and fur. The results are
burly and delicate, rugged and
refined.
tine workday can be devoted
to designing products such as
this “wearable, synthetic or-
gan system” conceived for the
sake of “enabling human sur-
vival on distant planets.” Ma-
terialized through 3-D print-

Theme: Transgressive
Designer: Delfina
Delettrez
This Italian jewelry de-
T-B: FABRICE GOUSSET/GALERIE KREO; NERI OXMAN

signer, a fourth-generation de-

COOPER HEWITT, SMITHSONIAN DESIGN MUSEUM

scendant of the Fendi family,

evokes the fantastical history
of surrealism in pieces that
gleam and surprise. A single
earring, meant to be worn solo
for the sake of asymmetry,
dangles ruby lips beneath a
pearl, in tribute to a brooch by
Salvador Dali. Other pieces on
display include a fiercely
twisted nose ring with dia-
monds and white gold.

HEARD & SCENE

Dazed and Garaged: A Fashion-Forward Party Circuit

If there were a rewards At a dinner on the man- The real hot spot, appar-
program for miles trekked sion’s top floor hosted by ently, to have a fashion soi-
between New York Fashion Diesel founder Renzo Rosso, ree these days is in a parking
Week events, we would be even artistic director Nicola garage. Last fall, Riccardo
well on our way to titanium Formichetti said he had Tisci, Givenchy and, again,
status. What such a program friends waiting to get in to Ladyfag took over a massive
might reward us in the long the event downstairs. La- garage on the Lower East
run is too challenging a dyfag admitted she was sur- Side for a afterparty that
question to ask in this icy prised things had gotten so went well into the middle of
weather. frenzied so quickly. the night.
DAVID X PRUTTING/BILLY FARRELL AGENCY

It should “It’s usually impossible to Following suit, Kanye

WILL RAGOZZINO/BILLY FARRELL AGENCY

come as no get people to come early to West celebrated his Yeezy

surprise that anything,” she said. Season 2 zine last Wednes-
many of those After a few bites of steak, day with a party at the 75
following the Joe Jonas, who had flown in Kenmare parking garage,
MARSHALL NYFW party that morning for the event, which has been earmarked
HEYMAN scene are will- was ready to return to the for a condominium project.
ing to go to main salon for a perfor- Perhaps more appropri-
the ends of the mance by his band DNCE. ately, Dasha Zhukova took
earth for an open bar and “You ready to party?” he over the Mercer Parking Ga-
the perfect Snapchat. On Fri- asked his table mates. They rage on Mercer Street last
day that meant lots of parka- Diesel’s Renzo Rosso and Adrien Brody; and Karlie Kloss, Garage’s Dasha Zhukova and Bob Iger. were. Thursday to celebrate her
clad folks headed to a raw Sunday meant a visit to the own magazine’s collabora-
space in Brooklyn’s Bushwick ask: “Who is Kelela?” Lewis and Kenya Kinski- cally, the Academy Mansion new Barneys New York in tion with Marvel. Said publi-
neighborhood. That is usually the point of Jones milled about around on East 63rd Street, for an Chelsea, where there was hot cation is actually called Ga-
It was here that Calvin a fashion-week party: to make her. “But we wanted a raw afterparty hosted by the cider and gummy hearts, and rage, and among the guests
Klein and Dazed & Confused you feel both out of touch space that people had never nightlife personality Ladyfag. then later in the evening, to who came to enjoy multicol-
magazine hosted a party to and plugged in at the same been to before.” Call time was 8:30 p.m., the East Broadway Mall in ored bagels with rainbow-
celebrate the launch of the time; to expose you to new The next night, many of and by 9:00 there was a lot Chinatown for some Tiger colored cream cheese were
“Dazed 100,” a group of a artists and new locations. the same guests ventured in of frigid clamoring at the beer, a leek bun and a glimpse Bob Iger, Karlie Kloss and
hundred “visionary talents” “People will come to a the opposite direction—both door to get inside. It was the of Rosario Dawson and Charli Candice Swanepoel.
shaping our culture. The Ethi- party wherever it is,” said Is- geographically and spiritu- most intense crowd the XCX. This was Opening Cere- “I didn’t want to do this
opian-American singer Kelela abella Burley, the editor in ally—to celebrate Diesel’s neighborhood has no doubt mony’s afterparty following in a clinical gallery space,”
is on the Dazed 100, and she chief of Dazed & Confused, newest flagship store on seen in some time. Security the line’s show. Thankfully said Ms. Zhukova. “This is
performed a set at this party, as Zach Quinto and Miles Madison Avenue. This meant guards said, at that point, the there were no Valentine’s Day more informal. And, it says
prompting many guests to McMillan, Gabriel-Kane Day- the Upper East Side, specifi- party was already at capacity. accouterments here. ‘Garage.’ ”
 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
A22 | Tuesday, February 16, 2016 * *** THE WALL STREET JOURNAL.

SPORTS
Knicks’ Best Shot Is Shifting the Point
Moving Jose Calderon along with Jerian Grant in the
second unit, which may free
to shooting guard up the veteran along the pe-
could provide a lift to rimeter in more of a drive-
and-kick system, given that
a struggling offense New York uses more pick-and-
roll with Grant in the game.
BY CHRIS HERRING (That could work given that
Calderon was far more pro-
With the Knicks slipping ductive with point guard
out of playoff contention, and Shane Larkin on the floor last
the NBA trade deadline loom- year, shooting 48.4% with him
ing on Thursday at 3 p.m. ET, as opposed to just 40% with-
it’s natural to ponder Carmelo out him, per NBA.com.)
Anthony’s role and whether he There’s an argument to be
would consider waiving his made that moving Calderon to
no-trade clause to join a team shooting guard could aid his
better positioned to make a ti- longevity. Forcing him to de-
tle run. fend more jump-shooters, as
Anthony, however, said he’s opposed to penetrators, would
here to stay—“I’m not going help with that, as would han-
anywhere,” he recently told dling the ball less on offense.
SiriusXM radio—so the Knicks
would be better served looking
for other ways to improve.
Calderon’s shooting
The team has more big men splits suggest he
than it needs, and could part
ways with a younger post
may benefit from a
player to add talent on the lighter workload.
wing, though Knicks president
Phil Jackson admits his roster
lacks leverage and doesn’t A look at Calderon’s perim-

NATHANIEL S. BUTLER/NBAE/GETTY IMAGES

“have a tremendous amount of
favorable trade items.”
But if the Knicks can’t
swing a deal to improve the
backcourt, they could consider
an experiment to get more
production out of one of their
starters: moving Jose Calde-
ron, the team’s starting point
guard, over to shooting guard.
For a number of reasons, it
would be in the team’s best in-
terest to use Calderon differ-
ently than they have since he
joined the club in the Tyson
Chandler deal in June 2014.
The 34-year-old, the oldest
starting point guard in the
NBA, shoots less frequently
and drives to the basket less
on a per-minute basis than
any other starting floor gen-
eral, per NBA.com. His lack of
foot speed hurts the offense in
two ways: it limits his ability
to create for others, leaving
Anthony with too much play-
making responsibility; while
Calderon’s inability to get
Knicks point guard Jose Calderon, center, attempts a shot during a game against the Los Angeles Clippers last month.
open prevents the team’s best
shooter from being able to
shoot the way he should.
When given at least 4 feet
of open space, Calderon
knocks down better than 51%
(37-of-72) of his 2-point jump-
ers from 10 feet out or farther,
and has hit better than 43%
(50-of-115) of his triples when
given that much space, ac-
cording to the NBA’s tracking
statistics. The Knicks cur-
rently rank in the bottom-five
in 3-point percentage.
The numbers highlight why
it makes little sense for Calde-
ron to possess the ball for a
team-high 4 minutes and 20
seconds, roughly, each game:
If he has the ball in his hands
that much, and can’t get
around defenders, he has al-
most no opportunity to use his
best attribute. It also leaves
opposing point guards with
more juice at the end of
games, since they don’t have
to exert much energy to stay
with Calderon defensively.
While many fans would love
to see Calderon dealt, Jackson
addressed that topic last year,
essentially saying opposing
teams weren’t interested,
meaning he’s likely to stay
with the Knicks, since he’s un-
der contract for another sea-
son after this at $7.7 million
next year.
For that reason, finding an-
other role for him would be
beneficial. And logistically,
there are at least a couple of
ways to implement such a
change. The first would in-
volve starting Langston Gallo-
way at point guard—a consid-
eter shooting splits the past
two-plus seasons—38.9% from
deep when he’s playing on no
days of rest, but 44.6% on one
day of rest and 45.4% on at
least two days of rest—sug-
gest he may benefit from hav-
ing a lighter workload.
After a strong game against
Memphis on Feb. 5, in which
he scored 18 points, Calderon
said he was able to take ad-
vantage of the Grizzlies’ de-
erable upgrade defensively at fensive scheme, which strug-
arguably the league’s deepest gled to contain Porzingis on
position—and playing Calde- the back side. “They were kind
ron and other starters (Arron of slow in recovering, so I was
Afflalo, Anthony and Kristaps able to turn the corner almost
Porzingis) up a position, while every time and either find my
moving center Robin Lopez to teammates, or get a couple of
the bench as a sixth man. layups,” Calderon said. “But
Or Galloway could replace more than anything, some-
Afflalo in the lineup, leaving times you just need to feel
Afflalo to come off the bench comfortable out there.”
to solidify the team’s second- Getting Calderon to feel
unit scoring while pushing comfortable at shooting guard
Calderon over to shooting may be the best way for the
guard. The other possibility: Knicks to get more out of him
Play Calderon off the ball from night to night.

Islanders Defense Gets Offensive

BY ALEX RASKIN
Until Monday’s 4-1 matinee
victory over visiting Detroit,
the Islanders were undeniably
light in the “quality wins” de-
partment. Specifically, they
were a pitiful 0-8-1 against
Eastern Conference playoff
contenders Washington, Pitts-
burgh, Boston, Florida, and
the Red Wings, the latter of
whom had outscored the Isles
9-3 over their previous two
meetings.
Now, ahead of Thursday’s
home game against the NHL-
best Capitals, the Islanders
have won four of their last
five games, and they’re build-
ing the kind of offensive mo-
mentum they had last year,
when they finished tied for
third in scoring.
To coach Jack Capuano, the
improvement began with the
benefited from 16 points from
their blue liners, and the re-
sults have been overwhelming.
The Islanders squeezed
nearly a month’s worth of
scoring into the previous
week, netting an NHL-best 18
goals over that time. Beyond
their 8-1 pounding of visiting
Edmonton on Feb. 7, the Isles
pulled out an impressive 5-2
victory over Los Angeles on
Thursday, albeit one in which
Kings ace netminder Jonathan
Quick was out with an undis-
closed injury.
Best of all, captain John Ta-
vares appeared to break out of
his slump, scoring four goals
and adding another five as-
sists over the team’s previous
five games.
But if the Islanders’ offense
is encouraging optimism
among fans, that effort is be-
ing undermined somewhat on
over the previous four games,
a 17.3% jump over his season
mark entering Monday.
Against Detroit, things were
far more difficult for Tavares,
who had a pair of breakaways
over the first two periods but
was denied by Red Wings net-
minder Jimmy Howard on
each occasion.
Tavares would make up for
those missteps in the third pe-
riod when he dropped a nifty
no-look pass to trailer Ryan
Strome, who sealed the win by
blasting the puck past Howard
for the 4-1 lead.
Strome had an impressive
assist himself in the second
period, when he sent an aerial
centering pass to Brock Nel-
son, who initially tried to swat
the descending puck into the
net. That attempt didn't get
past Howard, but Nelson re-
trieved his rebound and
E N A V S.

team’s defensemen, led by
Johnny Boychuk, who has
seven points this month, in-
the defensive end. Over that
same four-game span, the Is-
landers still yielded 11 goals
S E RN IAC KI I N K A
scored his 21st goal of the sea-
son and 100th career point.
Nelson would go on to add
VS.

cluding a pair of assists against
the Red Wings on Saturday.
“You got to realize in to-
day’s game,” Capuano said,
“you have to utilize your de-
fensemen if you’re gonna have
any success.”
Entering Monday, the Is-
landers ranked 20th in the
NHL in scoring among defen-
semen (93 points, 1.72 a
game), according to Stats LLC.
Over their last five games,
however, the Islanders have
and 116 scoring chances—
three more opportunities than
they created for themselves,
according to War-on-Ice.com.
Were it not for an unusu-
ally high unblocked shooting
percentage over those four
games (10.1%, compared with
their season mark of 6.7%) the
Islanders might not be sitting
in third place in the Metropol-
itan Division with 66 points.
Tavares himself made a whop-
ping 30% of his shot attempts
WOZ WAWRO N FI LS
his 101st career point on an
assist later in the second pe-
riod, when Josh Bailey gave
the Islanders a 2-0 lead by
knocking a Boychuk rebound
into a wide-open net. Marek
Zidlicky netted a similar goal
shortly thereafter.
M
The Islanders’ biggest mis-
take came in the third, when
they failed to clear their de-
fensive zone, and Red Wings
veteran Pavel Datsyuk scored.
Otherwise, goaltender PLUS A

Salute to Serena
Thomas Greiss was marvelous,
stopping 29 shots. Greiss’s
strong play this season gives
Capuano more flexibility over
the remainder of the regular
season, when the Islanders
play 27 times in 55 days. The
MARCH 8, 2016
team still relies on Jaroslav
Halak, who is just 13-12-4 de-
spite posting an impressive
2.42 goals-against average. TICKETS ON SALE NOW
DENNIS SCHNEIDLER/ICON SPORTSWIRE/ASSOCIATED PRESS

However, Greiss’s .930 save

percentage ranks among the
best in hockey and is one big
reason the Islanders are 15-6-2
when he starts.
“The one thing you want to
make sure is that you’re
fresh,” Capuano said, sidestep-
ping the question of whether
Greiss could overtake Halak to
become the team’s starter.
“Playing every other
day…there’s a lot of hockey, so Photos courtesy of Getty Images.*Players subject to change.
we want to utilize [them] and
make sure we do the right
Defenseman Johnny Boychuk has seven points this month. things with our players.”
 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
Grammys
Pay Tribute
MUSIC | B4
© 2016 Dow Jones & Company. All Rights Reserved.
IBM Bets on Bitcoin Ledger
Company becomes
backer of blockchain,
which underpins
the digital currency
BY ROBERT MCMILLAN
International Business
Machines Inc. is becoming the
biggest backer of a technology
that underpins the Bitcoin dig-
ital currency. In the coming
year, IBM will begin testing its
own variation on the transac-
tional software known as
blockchain, aiming to simplify
life for customers who lease
IBM’s computer hardware, the
company said.
ANDREW HINDERAKER FOR THE WALL STREET JOURNAL
Beer’s market share fell to 48% last year from 56% in 2000. Liquor has risen to 35% and wine to 17%. The bar at Timna in New York.
Cocktails Sip Away at Beer Market
Liquor industry makes remarkable comeback, helped by TV ads, fickle young drinkers
BY TRIPP MICKLE
ATLANTA—Shortly after
finishing a full-bodied India
pale ale, Jack Knauss asked
the bartender at Atkins Park
Tavern for a cocktail.
“I love beer,” the 28-year-
old sales executive said, but he
doesn’t drink too much of it
because of what he calls “belly
fill. It fills me up,” he says.
Mr. Knauss is symbolic of a
big problem for the beer in-
dustry—and a big boon for li-
quor. Despite the craft beer
craze, beer lost a portion of its
share of U.S. alcohol revenue
in 2015 to liquor for the sixth
consecutive year and the 12th
time in the past 15 years, ac-
cording to data released this
Please see LIQUOR page B4
Apollo Nears a Deal
To Purchase ADT
BY DANA MATTIOLI
AND DANA CIMILLUCA
Private-equity firm Apollo
Global Management LLC is
nearing a deal to buy home-se-
curity company ADT Corp., ac-
cording to people familiar with
the matter, in the latest sign
market volatility hasn’t derailed
the red-hot merger market.
Exact terms of the expected
takeover couldn’t be learned,
but with a $4.4 billion market
value as of Friday, a deal could
value ADT at well north of $5
billion given typical premiums
and also because the company’s
shares have fallen sharply. Of-
ten, companies with beaten-
down shares demand extra to
surrender control, in part out of
fear of selling at a bottom.
ADT stock is down 30% in
the past year, in part as a result
of a broader swoon brought on
BUSINESS & TECH.
* * * *
IBM, in a bid to establish a
new standard for blockchain
software, on Tuesday expects
to contribute computer code it
developed to a free, open-
source project called Hyper-
ledger.
The company also plans to
introduce new services in-
tended to help software devel-
opers build blockchain ser-
vices for its mainframe
computers and for devices
that use radio-frequency
identification tracking tags.
Additionally, the company
plans to set up a network of
what it calls “IBM Garages” in
London, New York, Singapore
and Tokyo, where customers
can experiment with its block-
Lifting Spirits
Growth of cocktail-friendly liquors like bourbon, Tennessee whiskey, tequila and cognac have helped
spirits take share from beer in recent years. Sales volume of 9-liter cases in the U.S.
Bourbon and Tennessee whiskey
25 million
2015
20.37M
9-liter cases
20
15
10
5 online gambling analyst who
0 would have just essentially le-
2010 ’11 ’12 ’13 ’14 ’15
Source: Distilled Spirits Council of the U.S.
by factors including a fear of
slowing economic growth.
The deal, which could be
announced as soon as Tuesday,
would signal that volatility in
equity, debt and other markets
this year hasn’t brought take-
over activity to a halt. Indeed,
activity so far in 2016 has been
surprisingly robust in the
wake of the record activity
notched in 2015, when compa-
nies struck nearly $5 trillion of
mergers.
Other big deals so far this
year that signal companies
still have a yen for mergers de-
spite the volatility include in-
clude China National Chemical
Corp.’s $43 billion deal for ag-
ricultural-products provider
Syngenta AG and Shire PLC’s
$32 billion planned purchase
of Baxalta Inc.
Private-equity buyouts can
Please see ADT page B2
CFO JOURNAL B5 | CROSSWORD B5
Facebook Plan
Stirs Up India
KEYWORDS | B4
THE WALL STREET JOURNAL.
chain software.
IBM Chief Executive Vir-
ginia Rometty is expected to
announce her company’s
blockchain initiatives at a con-
ference on Tuesday.
IBM’s effort is one of sev-
eral experiments that are
pushing blockchain’s method
of managing online transac-
tions beyond Bitcoin. Compa-
nies including Nasdaq Inc. and
J.P. Morgan Chase & Co. also
are exploring the software’s
potential.
Blockchain has attracted at-
tention because it provides a
way for different entities to
share information in a tamper-
proof public ledger. It could
one day provide a digital alter-
Tequila
14.81M
9-liter cases
2010 ’11 ’12 ’13 ’14 ’15
‘Deadpool’ Slays Box-Office Records
BY BEN FRITZ
Upending everything Holly-
wood studio executives
thought they knew about the
superhero genre, a hard-R
rated, modestly budgeted
movie that made few allow-
ances for non-fanboys de-
stroyed records at the box of-
fice.
“Deadpool,” from 21st Cen-
tury Fox Inc.’s Twentieth Cen-
tury Fox, opened to an esti-
mated $150 million in the U.S.
and Canada over the four-day
holiday weekend. The prior
Presidents Day weekend re-
cord was $93 million for “Fifty
Shades of Grey” last year.
Through Sunday, “Deadpool”
grossed $132.8 million, sur-
passing the prior record for an
R-rated opening weekend of
$91.8 million set by “The Ma-
trix Reloaded” in 2003.
It was bigger than super-
hero hits such as Warner Bros.
native to a range of record-
keeping systems, many of
which still rely on paper, tech-
nologists say.
IBM believes blockchain
could be used to coordinate
back-end systems that are in-
volved when the company
leases computer equipment.
Others think it could be used
to track stock or real-estate
ownership. “I think the num-
ber of places that a distributed
ledger can be used could be-
come almost limitless,” said
Arvind Krishna, a senior vice
president of IBM.
For all of the interest in
blockchain, however, there is
scant data measuring its real-
Please see IBM page B2
Brandy and cognac
12.36M
9-liter cases
2010 ’11 ’12 ’13 ’14
THE WALL STREET JOURNAL.
‘Deadpool,’ starring Ryan Reynolds, opened to an estimated $150 million in the U.S. and Canada.
and DC Comics’ “Man of
Steel,” Marvel’s “Iron Man 2,”
or any of Fox’s “X-Men” mov-
ies.
The ultraviolent film, star-
Dividends Fail
To Buoy Stocks
CFO JOURNAL | B5
Tuesday, February 16, 2016 | B1
The effort is led by FanDuel, DraftKings and a trade association.
Fantasy Sites
Urgently Lobby
State Lawmakers
BY ALEXANDRA BERZON
Facing legal questions that
could threaten its survival, the
fantasy-sports industry has
initiated a lobbying blitz in
statehouses across the coun-
try.
Since Jan. 1, legislators in
16 states have introduced bills
to carve out legal protections
for fantasy-sports operators,
nearly all of them supported
by the operators themselves.
Several other states have ac-
tive bills that were introduced
last year. Legislative bodies in
California, Virginia and Indi-
ana recently passed bills,
while in several other states
bills have passed through
committees.
The measures may still be
months away from becoming
law and still face headwinds.
They come as some payment
processors have begun pulling
back from working with fan-
tasy-sports companies amid
legal and regulatory concerns.
The lobbying effort is being
coordinated by the Fantasy
Sports Trade Association and
FanDuel Inc. and DraftKings
Inc., the industry’s two biggest
players. It involves 78 lobby-
ists in 34 states, up from four
lobbyists a year ago, according
to a person familiar with the
matter. The companies are
spending between $5 million
and $10 million on the lobby-
ing effort this year and are
hoping to pass bills exempting
fantasy sports from state gam-
bling laws in at least six to
eight states, this person said.
“This legislative rush in the
first few weeks of the new
year is unlike any on gambling
that I’ve seen,” said Chris
Grove, a fantasy-sports and
has closely studied the effort.
“If all these bills passed you
’15 galized a ton of sports betting
that is unregulated and un-
ring Ryan Reynolds, took in an
additional $150 million over-
seas and posted the biggest
opening for a film in Russia.
Concerned that its appeal
NICOLAUS CZARNECKI/ZUMA PRESS
taxed. I don’t think lawmakers
get the ramifications of what
they are doing.”
Unlike typical gambling leg-
islation, most of the approxi-
mately 25 bills under consid-
eration don’t seek to tax or
heavily regulate fantasy
sports.
“My goal is not to generate
revenue,” said Joe Negron, a
Florida state senator who has
introduced gambling legisla-
tion, at a committee hearing
last week.
The bills are careful to dis-
tinguish the practice from
gambling, particularly since
most states aren’t allowed to
authorize sports betting under
Since Jan. 1,
legislators in 16
states have
introduced bills.
federal law. Most of the bills
instead require that operators
pay a fee to register with the
state and operate with some
consumer protections, such as
age requirements and mea-
sures to protect player funds.
“We view it as a game of
skill,” said Peter Schoenke, a
member of the Fantasy Sports
Trade Association working on
the legislative effort. “We
want to clarify it is legal.”
Yet some who have looked
at the bills think that they
may be moving too fast
around gambling laws.
California Assemblyman
Marc Levine said in a recent
statement that consideration
for fantasy sports should be
treated like any other form of
gambling expansion in Califor-
nia rather than bypassing
gambling laws.
As Mr. Levine became the
only assemblyman to vote no
on a bill there, the fantasy-
Please see FANTASY page B2
TWENTIETH CENTURY FOX FILM CORP.
would be limited compared to
the typical PG-13 rated comic-
book fare with a better-known
character, Fox spent $58 mil-
Please see MOVIES page B4
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 | Tuesday, February 16, 2016 * **** THE WALL STREET JOURNAL.

INDEX TO BUSINESSES BUSINESS NEWS

These indexes cite notable references to most parent companies and businesspeople
in today’s edition. Articles on regional page inserts aren’t cited in these indexes.

A
ADT..............................B1
Advisory Board...........R6
Aetna...........................R6
Anglo American..........B3
Apollo Global
Management.............B1
B
BHP Billiton................B3
C Home Depot................C5
Caterpillar ................... B5
CereProc......................R4
Charity Investment
Asset Management..C1
Chevron ....................... B5
China Securities ......... A1
Colgate-Palmolive.......R2
Costco Wholesale.......B2
D Johnson & Johnson....R2
Deutsche Bank............C2
DraftKings...................B1
E Kroger..........................B2
Española de Petróleos
.....................................B3
Euro Disney.................C1
Excellus BlueCross
BlueShield.................R2
F Not only does the new ap-
Facebook......................B4
FanDuel ....................... B1
Ford Motor..................B5
Freeport-McMoRan.....B3
G
General Electric .......... B3
General Motors...........B5
Glencore ...................... B3
Green Street AdvisorsC1
H
Henkel &......................R2
Hewlett-Packard.........C5
Hologic.........................C5
HSBC............................C3
I
International Business
Machines...................B1
International Paper .... B5
Iron Mountain.............B5
J .....................................B3
K to store design.
Kaiser Permanente.....R2
L
Lukoil...........................B3
M V
MillerCoors..................B4
Mondelez International
..................................... C5
Mylan...........................C2
N Walt Disney...........B4,C1
NYCA Partners............B2
O
OPEC............................C3
P
Procter & Gamble.......R2
Public Storage.............C1
R debt firms like Apollo typically
Relational Investors...C5
Rio Tinto ..................... B3
Rochester Regional
Health System..........R2
Rosneft........................C3
Royal Caribbean Cruises
.....................................B5
S
SPX..............................C5
Sumitomo Metal Mining
T broad latitude to handle ev-
Time Warner...............B4
Total ............................ B3
21st Century Fox........B1
U natural and organic foods re-
University of Rochester
Medical Center ......... R2
Vail Resorts................A3
Viacom.........................B4
VocaliD ........................ R4
W
Whole Foods Market..B2
Whole Foods Attempts ADT
To Revamp Its Approach
Continued from the prior page
be even more vulnerable to
such volatility given how much
Chain pares autonomy employ to make acquisitions,
making the deal all the more
of its local managers noteworthy.
as it seeks to gain The transaction could rep-
resent one of the biggest lever-
greater efficiency aged buyouts in recent years.
ADT has more than $5 billion
BY ILAN BRAT in debt, according to S&P Capi-
tal IQ, and an enterprise value
Whole Foods Market Inc. of close to $10 billion.
is known for giving its store Apollo plans to use Protec-
managers and regional bosses tion 1 Inc., which it bought last
year, as a vehicle to buy ADT,
erything from buying cheese the people said.
ADT makes security prod-
But, as stiffer competition ucts for residential customers
erodes its profit growth, the and businesses, ranging from
burglary-alarm systems to
tailer is whittling away at that wireless cameras and video
autonomy, centralizing and surveillance. It has worked to
streamlining some functions in position itself as a player in
PATRICK T. FALLON/BLOOMBERG NEWS
a bid to cut costs and boost its the smart-home market, which
clout with suppliers. aims to connect consumers
wirelessly to various house-
proach mark a shift in Whole hold devices.
Foods’ decentralized manage- ADT, based in Boca Raton,
ment style, it also requires the Fla., has more than 17,000 em-
company to find a delicate bal- ployees, according to its web-
ance: wringing more efficiency site. The company had revenue

INDEX TO PEOPLE out of its stores without sacri-

A J
Adkerson, Richard ...... B3
al-Naimi, Ali................C3
Andreessen, Marc.......B4
Aylett, Matthew.........R4
B Komileva, Lena............C1
Balogh, Jason ............. B5
Bernanke, Ben.............C2
Buxton, Iain ................ R4
C Shanks, Robert...........B5
Collins, Francis............R5
Cutifani, Mark.............B3
D Simonelli, Lorenzo......B3
Day, Roderick..............B5
Del Pino, Eulogio ........ C3
de Souza, Jonas..........R5
Draghi, Mario..............C1
Dumyati, Ghinwa........R2
F
Flint, Douglas..............C3
Francis, Pope ............ A11
G O
Gianopulos, Jim..........B4
Gulliver, Stuart ...........C3
H-I
Hertel, Jim..................B2
Icahn, Carl...................B3
Javadi, Rokneddin.......B3
K
Kachiwku, Emmanuel
Ibe..............................C3
Krishna, Arvind...........B1
Kuroda, Haruhiko........C2
L store workers and replenish-
Liberty, Jason ............. B5
Linden, David J...........D1
Loevinger, David ......... C2
M Sperry, Tim ................. B2
Mackey, John..............B2
Meltzner, Geoff .......... R4
Moffett, James R.......B3
Mogherini, Federica....A9
N W
Nakazato, Yoshiaki.....B3
Novak, Alexander........C3
Oberhelman, Douglas.B5
Olsha, Alon ................. B3
P Z
Patel, Margie .............. B5
Patel, Rupal ................ R4
Peng, Jerry..................C2
Penicka, Eric................B4
Pinder, Jeanne ............ R6
Plansky, Max...............R4
R
Rassou, Patrice...........B3
Roberts, Carol.............B5
Rometty, Virginia.......B1
S tensive tasks like scheduling
Sharma, Anshu...........B4
Sica, David..................B2
Stahl, Zach..................R4
Surdoval, Nancy..........R6
V
Voronkov, Vladimir ..... C3
Wagle, Nikhil..............R4
Whitworth, Ralph.......C5
Wyatt-Tilby, James....B3
Y shoppers, Whole Foods hopes
Yellen, Janet ............... C2
Zhou Xiaochuan..........C1
Zuckerberg, Mark ....... B4
ficing the local flavor and spe-
cialty offerings that have Whole Foods is under pressure to boost its stock and reignite growth.
of $3.6 billion and net income
of $296 million in its last fiscal
year, ended in September.
helped fuel the chain’s success. Given its steady stream of
Whole Foods is shifting it announced. “The art of what Foods’ customer-friendly repu- monthly income from a slew of
more responsibility for buying we’re trying to do is we want to tation and turning off shop- loyal customers, it has long
packaged foods, dish detergent evolve the structure in such a pers who place a high value on been thought of as a target for
and other nonperishable items way that we take out redun- local products, such as blue- a cash-flow-seeking private-
for the company’s more than dancy and waste, and at the berries and hometown pasta equity buyer.
430 stores to its Austin, Texas, same time though, we’re not di- sauces, and niche items, said ADT is the latest offshoot
headquarters and deploying minishing the culture, the em- Jim Hertel, senior vice presi- of the former Tyco conglom-
software to simplify labor-in- powerment efforts that make dent at retail consulting firm erate put together by L. Den-
Whole Foods Market special,” Willard Bishop, a unit of Inmar nis Kozlowski to become
he told analysts in November. Inc. “The battle that always takeover fodder. Mr. Ko-
ing shelves. The chain also is A company spokeswoman gets waged [at supermarkets] zlowski was convicted in
seeking to save about $300 declined to elaborate on his is cost relative to localized 2005 and later served prison
million a year by September comments. consumer preferences,” said time for looting Tyco.
2017, partly by eliminating The chain is under pressure Mr. Hertel. The chain must In 2007, Mr. Kozlowski’s
more than 2,000 jobs, a plan it to boost its stock and reignite take care not to “damage the successor broke up what was
announced las`t fall. sales growth. Whole Foods reputation for being a top- then a company with nearly
The plan is part of the com- shares have tumbled in the quality location for regional 240,000 employees.
pany’s broader push to beat past year. products,” he said. ADT had merged with Tyco
back competition from major Sales growth at established The relative autonomy in the late 1990s in a $5.4 bil-
retailers such as Kroger Co. stores has been anemic, and Whole Foods has long granted lion deal that scuttled a hostile
and Costco Wholesale Corp. registered a rare decline of its individual stores and re- takeover attempt from West-
that have expanded their 0.2% in the quarter ended in gional units—now 12—reflects ern Resources Inc. Tyco used
range of natural and organic September. That compares a bedrock principle of Mr. ADT’s Bermuda domicile to re-
products, and frequently offer with consistent growth of at Mackey, who co-founded the locate abroad and lower its tax
them at lower prices. To lure least 6% per quarter as re- company in 1978. Until the rate.
cently as two years ago early 1990s, the chain’s stores In 2012, Tyco spun off ADT
to offer more discounts. The stakes are also high on bought their own staples, said to shareholders to refocus the
John Mackey, Whole Foods’ another front. Transferring Tim Sperry, a natural-products sprawling conglomerate’s op-
co-chief executive, acknowl- more authority to headquar- industry consultant who was erations.
edged the delicacy of the ters and automating more one of the company’s first re- —Matt Jarzemsky
streamlining effort shortly after tasks risks harming Whole gional buyers. contributed to this article.

FANTASY Regulated Fantasies

Pending state legislations would allow daily fantasy sports operators to operate
with the following types of regulation:
IBM companies ultimately go into
production with a company
like IBM because they have
dealt with them forever.”
Continued from the prior page Continued from the prior page IBM intends for Hyper-
sports industry ran a radio Consumer Regulation Blanket exemption Bans daily fantasy sports Advisory/ world utility, said David Sica, ledger to make blockchain
commercial against him. “We protections from gambling laws study vice president of NYCA Part- faster, more scalable and eas-
work hard during the week ners LLC, a venture fund fo- ier to use, Mr. Krishna said. It
and sometimes it’s fun to play Wash. N.H. Maine cused on financial-services also expects the software to
fantasy sports with our Mont. Vt. technology. provide advantages for owners
N.D. Minn.
friends,” the commercial said. Still, Mr. Sica expects that of IBM hardware. The soft-
“If Assemblyman Marc Levine Ore. IBM’s entrance into the block- ware works on any computer
Idaho Mass.
wants to vote no on fantasy S.D. Wis. N.Y. chain market will push more that runs the open-source Li-
Wyo. Mich.
football, maybe we should be large companies into testing nux operating system, but Mr.
voting no on Marc Levine.” Iowa Pa. R.I. the technology. “I think it Krishna said he believes it will
Nev. Neb.
The lobbying push comes Utah Ill. Ind. Ohio Conn. makes a lot of sense that [IBM find a home on IBM’s main-
W.Va.
amid legal reviews by several Colo. Va. N.J. is] in this space,” he said. “I frame computers as well as
Calif. Kan. Mo. Ky.
state attorneys general. Seven, Del. wouldn’t be surprised if these lower-cost systems.
including those in New York, N.C.
Tenn. Md.
Illinois and Texas, have said Ariz. Okla.
N.M. Ark. S.C.
they believe daily fantasy
Miss. Ala. Ga.
sports violates their gambling
laws. Rhode Island in early
Februarybucked the trend,
Alaska
Texas
La. Get the Highest Caliber
saying the practice largely Fla.
complies with state law.
So far the industry hasn’t
faced a large amount of push-
Hawaii

Sources: Gambling Compliance; Legal Sports Report; state legislatures

Home Protection Today
THE WALL STREET JOURNAL.
back in legislatures. But that Built by the leading engineers in the country with
could change as the movement most states’ gambling rules is obligated to continue pro- large companies aren’t profit- revolutionary wireless technology. Engineered to
gains more attention in state- because the games involve cessing its customers’ pay- able since they spend so much make your home feel like a fortress.
houses. One legislator in Iowa, skill, and fantasy-sports sites ments, and has said in court money on advertising and
where the state senate last are challenging the attorney filings that without Vantiv it prize payouts, analysts say. SimpliSafe has no vulnerable landlines for burglars
year approved a bill to exempt general opinions in some state might not be able to continue The state lobbying effort to cut. It sends emergency alerts up to ten times
fantasy sports from gambling courts. to operate. Vantiv didn’t re- started in earnest around a faster than traditional systems. Our professional
laws, said he intends to try to The companies also are fac- spond to questions about year ago. monitoring was named best-in-industry by the CSAA
amend that legislation to in- ing civil lawsuits from con- DraftKings. Several of the legislators
stead tax and regulate fantasy sumers, as well as investiga- Citigroup Inc. recently said sponsoring bills that have for its industry-leading response time.
sports as gambling, tions by the U.S. Justice it had taken steps to block been introduced since then
Department. credit-card processing for have said they enjoy the game
DraftKings and FanDuel al- DraftKings and FanDuel cus- themselves or have family
Operators of daily ready have pulled out of Ha- tomers in New York, where the members and friends who do.
fantasy-sports sites waii and Nevada, both states attorney general has taken a Their position is bolstered by
where officials have said the particularly aggressive stance support from popular local
say the games business is illegal, as well as against the companies. sports teams.
involve skill. states where officials had pre- The insecurity of the pay- “I fall on the side of the
viously determined it was ille- ment-processing system has coin that says this is not gam-
gal, such as Washington and underscored the importance of bling,” said Alan Morrison, a
“We thought it was a bunch Montana. They have been re- victories in legislatures, these state representative in Indiana
of guys playing season-long luctant to pull out of bigger people say. who introduced a bill similar
fantasy sports in basements, states such as New York, Illi- A legislative win “can cre- to one the state senate passed
but now it’s major league gam- nois or Texas because they ate a different dynamic,” said last week.
bling revenue,” said Iowa Rep. need large numbers of users Behnam Dayanim, an attorney Some gambling addiction
Guy Vander Linden. “We can’t for their businesses to work. [ who represents payment pro- experts warn that they have
ignore that. We don’t let any But the effort to continue cessors and other participants seen impacts among some fan-
business play for free.” operating in openly hostile in fantasy sports. tasy-sports users similar to
Daily fantasy-sports sites states is becoming increas- The fantasy sports industry those they have seem among
generally allow users to create ingly difficult. is relatively small, with esti- people addicted to poker,
virtual sports teams out of Last month Vantiv, a major mated total revenue of around sports betting or other forms
real athletes. The make-be- credit-card payment processor, $290 million last year, accord- of gambling, and have asked
lieve team’s standing rises and said it would stop working ing Eilers and Krejcik Gaming, sites to do more to address
falls based on the real-life per- with fantasy-sports sites at and around four million active these concerns.
formance of its individual
members. The site operator
makes money from entry fees,
the end of February.
Worried by the recent at-
torney general opinions, Van-
paying users. But it has gar-
nered attention thanks to in-
vestments and marketing
“My main message was
‘Whoa,’” said Karen Tallian, an
Indiana state senator. “To
SimpliSafe.com/ws
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 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.
2014 VW Memo
Warned of Probe
BY WILLIAM BOSTON
BERLIN—A senior Volks-
wagen AG executive commis-
sioned with troubleshooting
and known internally as “the
fireman” warned the com-
pany’s top management in May
2014 about an impending in-
vestigation by U.S. environ-
mental authorities into
whether the German car maker
was using “test recognition”
on some of its diesel engines.
The warning, communicated
in a note to then-Chief Execu-
tive Martin Winterkorn, came
from Bernd Gottweis, a qual-
ity-control executive who ran a
team of product sleuths that
Volkswagen management dis-
patched around the world to
put out quality flare-ups be-
fore they grew into a full-
fledged blaze.
The memo makes the first
known reference to a defeat
device in the investigation into
Volkswagen’s emissions-cheat-
ing scandal and might suggest
that the company’s top execu-
tives knew more than they are
saying now. It isn’t known
whether Mr. Winterkorn saw
the memo.
“There was a short memo
from Mr. Gottweis about this
issue, but it would be a mis-
take to assume that it was
clear back then that we knew
it was cheating software. That
was not clear,” a person famil-
iar with the situation said.
“We don’t know if Winterkorn
read the memo or not.”
Mr. Winterkorn couldn’t be
reached through his attorney
for comment. The existence of
Mr. Gottweis’s memo was re-
ported by the weekly Bild am
Sonntag newspaper on Sunday.
The newspaper says it has in-
ternal Volkswagen documents
that turned up during the in-
vestigation led by U.S. law firm
Jones Day, which it says Mr.
Winterkorn received on May
23, 2014. Bild said the memo
was part of a package of docu-
ments that Mr. Winterkorn
took home over that weekend.
Volkswagen became aware
ALLEN G. BREED/ASSOCIATED PRESS
Probes placed on the tailpipes of a Jetta during tests in January.
Iran’s Crude Oil Starts
Shipping to Europe
BY BENOÎT FAUCON
The first shipment of Ira-
nian crude oil to the European
Union in over three years
sailed Monday, with two more
poised to follow in the coming
days, Iranian officials said.
A tanker chartered by
French energy giant Total SA
sailed with 2 million barrels on
Monday, the officials said. An-
other carrying 1 million barrels
for Spain’s Cia. Española de
Petróleos, or Cepsa, is poised
to follow Tuesday, they said. A
third vessel, also of 1 million
barrels and booked by Litasco,
the trading arm of Russia’s Lu-
koil, arrived this weekend at
the Iranian terminal of Kharg
Island, and its loading will fol-
low soon after, the officials
said.
The ships are part of a flood
of new oil that Iran says it is
producing since world powers
agreed to lift Western sanc-
tions related to the country’s
nuclear program. Those sanc-
tions crippled Iran’s oil indus-
try, reducing its export capac-
ity by more than 1 million
barrels a day.
Rokneddin Javadi, the dep-
uty oil minister, told state tele-
vision broadcaster Press TV on
Sunday that Iran’s crude-oil
production had increased
400,000 barrel each day. the
bulk of its stated short-term,
post-sanctions target of ramp-
ing up production by 500,000
barrels a day.
Total Chief Financial Officer
Patrick de la Chevardière last
week said his company, “as
any other oil company,” is cur-
* * * *
in April 2014 that a study con-
ducted by emissions experts at
West Virginia University dis-
covered that Volkswagen die-
sel-powered Passat and Jetta
models spewed more than 30
times the allowable levels of
nitrogen oxide, or NOx, emis-
sions during normal driving,
even though the vehicles
passed laboratory tests.
The academics shared their
data with the California Air
Resources Board, which began
trying to figure out why the
NOx emissions were so high.
In the memo, Mr. Gottweis
discussed the emissions tests
from U.S. environmental au-
thorities and said Volkswagen
engineers in the U.S. were at a
loss to explain the problem.
“No plausible explanation
for the dramatically increased
NOx emissions can be given to
the authorities,” Mr. Gottweis
wrote, according to Bild, which
claims to have copies of the
documents. “It is to be as-
sumed that the authorities will
subsequently examine VW sys-
tems to determine if Volks-
wagen has installed test recog-
nition into the engine control
software (a so-called defeat
device).”
The German car maker ad-
mitted in August that the NOx
emissions were masked by
software that shut down emis-
sions control when the cars
were on the road.
In September, after the En-
vironmental Protection Agency
disclosed the emissions fraud,
Volkswagen admitted install-
ing the software on nearly 11
million vehicles world-wide.
The company faces regula-
tory and criminal investiga-
tions and civil litigation in the
U.S. and Europe, and up to $46
billion in potential fines.
When Volkswagen got wind
of the increased NOx emis-
sions, the company sent Mr.
Gottweis in to investigate. In
May, he sent the note to VW
headquarters in Wolfsburg.
Volkswagen declined to make
Mr. Gottweis available for
comment.
rently buying Iranian oil on the
spot market, though he de-
clined to elaborate.
Litasco and Cepsa didn’t re-
spond to requests for com-
ment.
Iran is aiming its new ex-
ports at two of its prime cus-
tomers before sanctions: Asia
and Europe. While some Asian
buyers continued doing busi-
ness with Iran at reduced rates
during sanctions, Europe had
imposed a total embargo.
Now Iran has lowered its
prices to refineries along the
Mediterranean Sea in an effort
to compete with rivals like
Saudi Arabia and Russia,
which had moved to grab
Iran’s market share when it
was driven out of Europe.
The tankers began loading
after European oil traders and
shippers won a key victory al-
lowing the cargoes to be in-
sured. The American Steam-
ship Owners Mutual Protection
and Indemnity Association Inc.
said U.S. sanctions preventing
it from covering cargoes origi-
nating from Iran had been re-
moved.
The new Iranian oil has
weighed on crude prices,
which were already struggling.
Prices have fallen more than
70% since their June 2014 peak
of $114 a barrel.
Iran is a member of the Or-
ganization of the Petroleum
Exporting Countries, which
produced an additional
280,000 barrels a day last
month, said the International
Energy Agency.
—Inti Landauro
contributed to this article.
BUSINESS NEWS
Iron ore at an Anglo American joint venture in Brazil in 2014. The mining company is seeking to restructure and reduce debt.
Anglo American Cut to Junk
Moody’s slashes the
miner’s credit rating
one day ahead of
2015 earnings report
BY ALEX MACDONALD
AND SCOTT PATTERSON
LONDON—Anglo American
PLC, a day before a highly an-
ticipated earnings report, suf-
fered a fresh blow Monday
when Moody’s Investors Ser-
vice slashed its credit rating
to junk status, marking a new
low for giant mining compa-
nies facing plunging commod-
ity prices.
Moody’s, which cut Anglo’s
rating three notches to Ba3
from Baa3, said the London
company faces substantial
hurdles in trying to execute
the massive restructuring and
debt-reduction plan it unveiled
in December.
“With the downturn likely
to be deeper and longer than
Freeport Sells Part of Arizona Mine
BY JOHN W. MILLER
Freeport-McMoRan Inc. on
Monday said it reached a deal
to sell part of its stake in an
Arizona copper mine to one of
the mine’s other owners, in an
effort to pay down debt.
Phoenix-based Freeport, one
of the world’s biggest copper
miners, said it would sell a 13%
ownership interest in its Mor-
enci mine, located in the desert
on the Arizona-New Mexico
border, to Sumitomo Metal
Mining Co. for $1 billion. The
company said it would record a
gain of $550 million on the
deal, the difference between
the sale price and the stake’s
book value of $450 million.
Freeport Chief Executive
Richard Adkerson said the
transaction was part of the
company’s plan to reduce what
it owes to creditors “while re-
taining a portfolio of high-
GE’s Oil Chief Pays Call on Tehran
BY BENOIT FAUCON
AND TED MANN
LONDON—The chief execu-
tive of General Electric Co.’s
oil-and-gas business has vis-
ited Tehran to explore busi-
ness opportunities there, the
company said, the first known
visit by an energy executive of
an American company since
before Western sanctions were
imposed on Iran over its nu-
clear program.
Lorenzo Simonelli, CEO of
GE Oil & Gas, visited Iran in
recent days and departed on
Monday as the company takes
another look at the country
now that nuclear-related sanc-
tions have ended, a GE spokes-
woman said.
“In line with the easing of
sanctions, we have begun
looking at potential business
opportunities in Iran, while
fully complying with the rules
laid out by the U.S. govern-
ment,” the spokeswoman said.
“Mr. Simonelli’s visit…was part
of our efforts to that end.”
American businesses have
trod cautiously since world
powers last month ended in-
ternational restrictions on
trading with Iran’s oil sector
and other industries.
Several layers of U.S. sanc-
tions against Iran remain in
place over terrorism, human
previously anticipated, the rat-
ing agency believes that price
risk remains to the downside,
given global economic uncer-
tainties and slowing growth in
China,” Moody’s said.
Anglo is the first among the
world’s top five mining com-
panies to see its credit rating
cut to below investment grade.
The credit ratings of Swiss
mining company Glencore PLC
and Vale SA, the Brazilian
iron-ore miner, sit just one
notch above junk, while the
ratings of BHP Billiton and
Rio Tinto both remain well
above junk.
The downgrade highlights
the challenges that Anglo
American’s chief executive,
Mark Cutifani, is facing amid a
global rout in the commodities
it mines and sells around the
world. Analysts expect the
company to post disappointing
full-year earnings Tuesday as
low commodity prices cut
deeper into its balance sheet.
While mining companies are
quality assets and resources.”
Mr. Adkerson pledged last
month to cut the company’s
$20 billion debt by as much as
$10 billion.
Freeport, the U.S.’s biggest
mining company by market
capitalization, has been under
pressure from falling commod-
ity prices and activist investor
Carl Icahn, who has a stake of
roughly 8.7%, according to re-
cent disclosures. He has been
lobbying for cutting costs and
reducing debt.
Since Mr. Icahn disclosed his
initial investment last August,
Freeport has suspended its divi-
dend, cut capital spending, and
announced the resignation of
longtime chairman James R.
Moffett, a colorful oil wildcatter
largely responsible for building
its global copper empire.
With or without Mr. Icahn,
major mining companies have
acknowledged the need to pre-
GE Oil & Gas chief Lorenzo Simonelli visited Iran in recent days.
rights and weapons, and there
continues to be a ban on
American dollar transactions
with the country. Washington
now allows U.S. companies to
trade with Iran as long as the
business is carried out by a
foreign subsidiary. U.S. citi-
zens and U.S. technology can’t
be a part of the transaction.
GE Oil & Gas, based in Lon-
don, is a subsidiary of its
American parent company.
GE and other American en-
ergy companies are drawn to
the promise of Iran’s oil-and-
gas sector, which is trying to
ramp production back up after
more than three years of de-
cline under sanctions. Iran
Tuesday, February 16, 2016 | B3
DADO GALDIERI/BLOOMBERG NEWS
trying to unload unprofitable remain frustrated.
assets, they have wrestled to “PIC is concerned with the
find willing buyers, because slow progress on restructur-
many potential investors re- ing,” said Daniel Matjila, chief
main concerned commodity executive of South Africa’s
prices will spiral lower. state-owned Public Investment
Anglo American spokesman Corp., Anglo American’s larg-
James Wyatt-Tilby said the im- est shareholder. The process,
pact of the Moody’s downgrade he said, “could have been done
will be limited. “Anglo Ameri- much faster.”
can is taking the necessary “The market is running out
steps to further strengthen its of patience,” said Patrice Ras-
balance sheet” and expects to sou, head of equities at South
regain an investment-grade rat- Africa’s Sanlam Investment
ing, he said in an emailed state- Management, which FactSet
ment on Monday. says holds Anglo shares valued
Investors are piling pres- at $26 million.
sure on Anglo to move more Anglo is forecast to report a
quickly on its restructuring 57% drop in underlying earn-
program, launched when Mr. ings before interest and taxes
Cutifani took over in 2013. It to $2.1 billion for 2015, ac-
now involves more radical ele- cording to a FactSet poll of 20
ments that include getting rid analysts.
of a huge chunk of its mines Net profit could be much
and cutting more than half its lower than that if, as expected,
workforce. the commodities slump forces
Though Mr. Cutifani has the company to write down
said the company has made the value of its assets again,
substantial headway on the Macquarie Group analyst Alon
turnaround, some investors Olsha said.
pare for a long siege of low of around $2 per pound.
commodity prices by paring Once the sale is completed
costs, laying off workers and re- in mid-2016, Freeport will own
ducing debt, even if it means 72% of Morenci, down from
selling pieces of their crown 85%, with the rest belonging
jewels. Freeport would like to to Sumitomo, a Japanese in-
unload oil-and-gas assets it dustrial conglomerate, or its
bought in 2013, and which have affiliates. With the deal, Sumi-
declined in value as crude oil tomo is buying a heavier flow
prices have dropped. But its of raw copper, which it hopes
most attractive assets are in its to capitalize on when prices
portfolio of top-flight copper improve. Copper prices will
mines in Arizona, the Demo- “eventually come back,”
cratic Republic of Congo, Chile, Yoshiaki Nakazato, president
Peru and Indonesia. of Sumitomo Metal Mining,
In the deal announced Mon- told reporters.
day, Freeport will retain con- Freeport said it reaped $2.2
trol of Morenci, one of three billion in revenue last year
mines, along with complexes from the mine, which pro-
in Peru and the DRC, that it
has spent billions expanding
this decade. These so-called
duced around a billion pounds
of copper.
Last month, Freeport-Mc-
super-mines operate at ex-
tremely low costs, around $1.5
per pound of copper produced,
MoRan reported a loss of
$4.09 billion, or $3.47 a share,
widening from a year-earlier
making them profitable even loss of $2.86 billion, or $2.75 a
with copper at its current lows share.
miliar with the matter.
European companies have
moved more quickly than
American firms in Iran, ex-
ploiting decades-old business
relationships with Tehran. To-
tal SA, the French energy com-
pany, and other oil traders
shipped the first Iranian crude
to the European Union in more
MIKE KIREEV/DEMOTIX/CORBIS
than three years on Monday.
Those shipments were a
sign that the remaining U.S.
sanctions on doing business
with Iran are surmountable.
Until this week, oil-tanker op-
erators were having trouble
getting any shipment from
Iran insured because pooled
insurance included an Ameri-
produced almost 3 million bar- can group. The U.S. Treasury
rels of oil a day in January, up Department issued an exemp-
from 2. 7 million barrels a day tion allowing the insurance.
at times last year, but far less GE Oil & Gas has had a
than its capacity of 3.6 million team of 50 in Dubai and Flor-
barrels a day, according to the ence preparing to work in Iran
International Energy Agency. for months, examining every
GE manufactures oil-drilling detail to ensure compliance
and processing equipment, in- with U.S. sanctions, a person
cluding subsea pumps and familiar with the matter said.
pipeline-service units. Mr. Si- That includes insulating any
monelli’s visit included a potential Iran business from
meeting with a top Iranian oil its U.S. parent and avoiding
official, according to a person any use of U.S. technology.
familiar with the matter. GE isn’t a stranger to Iran.
The company wants to sell The company received U.S.
spare parts, compressors and government approval under
turbines from its unit Nuovo humanitarian exemptions to
Pignone, based in Florence, It- sell health-care equipment in
aly, according to a person fa- Iran during sanctions.
 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 | Tuesday, February 16, 2016
Grammys Pay Tribute to Music Legends
Taylor Swift’s ‘1989’
wins top album award;
‘Hamilton’ creator raps
acceptance speech
BY HANNAH KARP
Pop star Taylor Swift’s
“1989” won the album of the
year award while Mark Ron-
son’s “Uptown Funk” featur-
ing Bruno Mars was named
record of the year at the
58th Grammy Awards Mon-
day, in a night full of tributes
to recently deceased musical
legends.
Ms. Swift’s album, which
has sold nearly six million cop-
ies in the U.S., according to
Nielsen Music, prevailed over
Kendrick Lamar’s jazz-in-
flected hip-hop album “To
Pimp a Butterfly,” which has
sold more than 800,000 copies
in the U.S.
Doo-wop-influenced pop
star Meghan Trainor won the
best new artist award, thank-
ing the head of her record la-
bel “for looking at me as an
artist, not just a songwriter.”
Ms. Trainor catapulted to fame
thanks to her 2014 hit “All
About That Bass,” which cele-
brates female curves with the
lyrics “I ain’t no size two, but
I can shake it shake it like I’m
supposed to do.”
Facebook’s Free Web Plan Needs Revamping LIQUOR
T
o hear the reaction in
India to Facebook’s ef-
fort to bring free Inter-
net access to the country, you
would think it was sponsored
by the British East India
Company
and signi-
fied a return
to colonial
rule. In con-
trast, the re-
action in the
KEYWORDS U.S. to a de-
CHRISTOPHER cision by In-
MIMS dia’s Inter-
net
regulator
that Facebook’s “Free Basics”
is banned in the country was,
at least initially, dismissive to
the point of being patroniz-
ing.
After talking to people at
every point on the spectrum,
I can say two things. First,
Facebook’s chief executive,
Mark Zuckerberg, appears to
be sincere in his goal to le-
verage the popularity of Face-
book to bring Internet to the
world’s poor. The second is
that the means by which
Facebook has accomplished
this to date—by working
closely with telecoms that are
eager to use free Facebook to
tempt users into later buying
more data—are inappropriate
in India, and probably in
other countries as well.
I sincerely hope the team
at Internet.org reads this col-
umn and internalizes that the
strategy Facebook has been
using since 2010 to try to get
people in the developing
world onto Facebook is no
SHIRISH SHETE/ASSOCIATED PRESS
Facebook CEO Mark Zuckerberg this past October in India, where Facebook has met criticism.
MOVIES
Continued from page B1
lion to make “Deadpool,” less
than a third of the budget of
some superhero films. As a re-
sult, the movie should be very
profitable for the studio, which
until 2013 was part of the
same company as The Wall
Street Journal.
“I think what audiences re-
sponded to most was its au-
thenticity,” said Twentieth
Century Fox Chief Executive
Jim Gianopulos, whose studio
suffered a painful superhero
movie flop last summer with a
reboot of “The Fantastic Four.”
Ed Sheeran accepting the award for the song of the year, ‘Thinking Out Loud,’ at the 58th Annual Grammy Awards on Monday.
As for the fourth of the big
honors, British singer-song-
writer Ed Sheeran and Amy
Wadge won song of the year
for their “Thinking Out Loud,”
beating songwriters including
Pharrell Williams, Ms. Swift
and Max Martin. Before an-
nouncing Mr. Sheeran’s win,
superstar musician Stevie
Wonder opened the envelope
and displayed a blank-looking
longer suited to their organi-
zation’s goals. Continuing to
pursue that strategy could
backfire in ways that damage
both Facebook’s bottom line
and its global effort to bring
Internet to the world’s poor.
But first, a little back-
ground: Last week TRAI, In-
dia’s Internet regulator, de-
clared that services favoring
any type of content by offer-
ing it free—that is, waiving
the usual mobile data
charges—are illegal. Only a
handful of other countries
have banned so-called “zero
rating” of content, including
Chile, the Netherlands and
Slovenia.
Subsequently, Marc An-
dreessen, a venture capitalist
and Facebook board member,
managed to offend an entire
subcontinent by appearing,
via Twitter, to advocate colo-
nialism, forcing Mr. Zucker-
berg to publicly repudiate his
comments. Mr. Andreessen
later apologized. Days later,
Facebook’s managing director
in India stepped down, saying
she is moving to the U.S. and
exploring “new opportunities
at Facebook” in Menlo Park,
Calif.
TRAI’s ruling coincided
with the first anniversary of
a stripped-down version of
Facebook being offered, along
with a few dozen other ser-
vices, free by mobile tele-
communications company Re-
liance Communications. All of
the services on Facebook Free
Basics—the company’s plan
to offer free access to a lim-
ited number of websites—
Mr. Gianopulos said he and
other Fox executives were
“pinching themselves” as box-
office results came in. The
movie not only had a strong
start among fanboys, but kept
performing well all weekend.
Females made up a surpris-
ingly high 38% of the opening-
weekend domestic audience,
nearly half of which was non-
white, according to exit polls.
The average audience grade
was A, according to market re-
search firm CinemaScore, indi-
cating that word-of-mouth was
excellent.
Fox spent years developing
“Deadpool,” a foul-mouthed
spinoff character from Mar-
vel’s X-Men comics, but hesi-
BUSINESS NEWS
card, teasing the audience:
“You can’t read braille.”
The award for best rap al-
bum went to Mr. Lamar’s “To
Pimp a Butterfly,” which pre-
vailed over works by Dr. Dre,
Nicki Minaj, J. Cole and Drake,
while Alabama Shakes won
best rock performance for
“Don’t Wanna Fight.”
Chris Stapleton won best
country album for his “Travel-
have their Internet traffic
channeled through Face-
book’s servers for technical
reasons.
In the past year, according
to Reliance, Facebook Free
Basics brought one million
more people onto the Inter-
net in India. That pales in
comparison to the 100 million
Indians who came online for
the first time in 2015, bring-
ing the total number of Inter-
net users in India to 400 mil-
lion, 300 million of which
access the Internet from mo-
bile devices, according to the
Internet and Mobile Associa-
tion of India.
To a Western observer,
the thing that leaps to mind
about Free Basics is, why
would anyone, especially in a
country as poor as India, say
no to anything?
And the answer is simple:
self-determination.
The problem with Free Ba-
sics is that if it had been al-
lowed to play out, and even-
tually succeeded in bringing
not one million Indians online
but tens or hundreds of mil-
lions, it would have given
Facebook the power to deter-
mine which companies, both
indigenous and multinational,
win or lose on India’s still-na-
scent domestic Internet.
That is because Facebook
itself has to approve every
service that piggybacks on its
deal with Reliance. Though
Facebook has pledged to al-
low onto Free Basics any ser-
vice that meets Facebook’s
requirements, the very exis-
tence of those requirements,
tated to pull the trigger be-
cause it was so different from
previously successful super-
hero movies. In 2014, after test
footage leaked online and fans
rallied in support, the studio
finally assented.
Once the studio decided to
go ahead, Fox gave director
Tim Miller wide latitude to
make a movie with not only a
high body count, but frequent
barbs aimed at other superhe-
roes, including the X-Men, and
even Mr. Reynolds himself.
The studio’s marketing cam-
paign embraced a similar
sense of playfulness, including
an April Fool’s Day prank in
which Mr. Reynolds falsely an-
nounced “Deadpool” would be
ler,” beating competitors such
as Sam Hunt’s “Montevallo.”
“I’d like to thank Taylor
Swift for glitter bombing me
earlier,” Mr. Stapleton said
while accepting the award, re-
ferring to the glittery bodysuit
she donned as she kicked off
the show with a dramatic per-
formance of her song “Out of
the Woods.”
But the most memorable ac-
including that services sup-
ported by Free Basics be “low
bandwidth,” is problematic.
“The government of the
U.S. does not delegate the re-
sponsibility of figuring out
which Internet services are
acceptable to Facebook or
Microsoft,” said Anshu
Sharma, a U.S.-based venture
capitalist at Storm Ventures.
Even if Facebook’s re-
quirements for partners on
Free Basics are relatively lax
today, there is the not-small
matter of a country trusting
the company—which is after
all a foreign corporation with
its own interests—not to
change those requirements in
the future. And then there is
the matter of what kind of
precedent Free Basics sets.
“Once you create walled
gardens that raise barriers of
entry, anybody capable of
getting into agreements like
Free Basics are in a competi-
tive sense the only companies
who can be online,” said Mi-
shi Choudhary, a lawyer and
activist at the Software Free-
dom Law Center.
Facebook declined to com-
ment for this column. Mr.
Zuckerberg has previously
written in The Wall Street
Journal that “If [Internet.org
works], we can expect to con-
nect billions of people within
the next decade—and this
will transform their lives and
communities.”
It seems apparent based
on recent public comments
from Mr. Zuckerberg that he
remains baffled that India
has rejected what he regards
as an act of benevolence.
But it is that attitude that
is itself the problem. Ms.
Choudhary, who traveled in
India for seven weeks during
Facebook’s countrywide Free
Basics ad blitz, said that the
campaign came across as “a
way of saying, ‘We the people
in the U.S. understand better
than you what your needs
are, and by the very fact you
insist the poor should have
the same Internet as every-
one else, you’re going against
the progress of your own
country.’”
Write to Christopher Mims at
christopher.mims@wsj.com.
rated PG-13, momentarily out-
raging fans.
Fox is already working on a
script for a “Deadpool” sequel,
said Mr. Gianopulos.
Walt Disney Co., which
owns Marvel, will benefit from
the success of “Deadpool” as it
receives a percentage of the
film’s revenue. Disney and Fox
both have a stake in licensing
revenue for the character.
With one movie dominating
at multiplexes, two other new
releases suffered. The roman-
tic comedy “How to Be Single,”
from Time Warner Inc.’s War-
ner Bros. and Metro-Goldwyn-
Mayer Inc., starring Rebel Wil-
son, opened to a modest $20.6
million.
* *****
ceptance speech was delivered
by “Hamilton” creator Lin-Ma-
nuel Miranda, who rapped his
thanks to those who helped
him win for best musical the-
ater album.
Other performance high-
lights included Lady Gaga’s
tribute to the late David
Bowie, whom she mimicked
with facial expressions, outfits
and dance moves. Interactive
Continued from page B1
month by the Distilled Spirits
Council of the U.S. Beer’s mar-
ket share fell to 48% last year
from 56% in 2000. Liquor has
risen to 35% from 29% and
wine to 17% from 16%.
The liquor industry—once
the pariah of the alcohol
world—has been steadily gain-
ing popularity due to a major
cocktail renaissance, a return
to television advertising, and
because of fickle young drink-
ers like Mr. Knauss whose gen-
eration switches between beer,
whiskey and wine more fre-
quently than ever before.
“Among baby boomers, the
guy who has been drinking beer
since he was 25 years old is still
drinking beer, but younger gen-
erations consume differently,”
said Eric Penicka, an analyst
with Euromonitor, an indepen-
dent research firm. “They’re not
loyal to an alcohol type.”
Total alcohol revenue for
producers rose 30% over the
past 10 years to $68 billion
from $52.2 billion. Of that, li-
quor increased 40% to $24.1
billion; wine rose 35% to $11.6
billion; and beer rose 23% to
$32.3 billion.
It is a remarkable comeback
for liquor, which for decades
was dogged by concerns about
its higher alcohol content and
a 1980s increase in drunken
driving accidents. By contrast,
beer, the first alcoholic drink
to be legalized after prohibi-
tion, became “America’s Bev-
erage of Moderation,” and got
stacked high in grocery stores
nationwide.
Attitudes began to shift,
though, as cocktail bars mi-
grated from New York to San
Francisco and Los Angeles, said
Philip Dobard, director of New
Orleans-based Museum of the
American Cocktail. One of the
forces behind the change was
Dale DeGroff, bartender at New
York’s famous Rainbow Room
atop 30 Rockefeller Center.
Mr. DeGroff was trying to
achieve for spirits in the 1990s
what culinary pioneers like
James Beard did for food in
the 1950s—introducing people
to new flavors and old recipes
like the cognac-based Between
the Sheets and gin-based
Fitzgerald cocktails. “Now
there’s virtually no market of
Estimated Box-Office Figures,
Through Monday
FILM DISTRIBUTOR
1. Deadpool 20th Century Fox
2. Kung Fu Panda 3 20th Century Fox
3. How to Be Single Warner Bros.
4. Zoolander 2 Paramount
5. The Revenant 20th Century Fox
*Friday, Saturday, Sunday and Monday
“Zoolander 2,” a follow-up
to the cult favorite in which
Ben Stiller plays a dimwitted
supermodel, opened to a weak
THE WALL STREET JOURNAL.
holograms and other digital
technology animated her face
to mimic various famous looks
of Mr. Bowie’s. At one point a
spider appeared to crawl out
of her eye.
Jackson Browne and the
surviving members of the Ea-
gles paid tribute to their late
bandmate Glenn Frey, who
died last month.
Mr. Lamar performed his
songs “The Blacker the Berry”
ROBYN BECK/AGENCE FRANCE-PRESSE/GETTY IMAGES
and “Alright,” appearing
chained up in prison with
glow-in-the-dark paint on his
jumpsuit, while Canadian art-
ist the Weeknd earned a stand-
ing ovation for his more sub-
dued performance of a medley
of songs from his album
“Beauty Behind the Madness.”
Lionel Richie sang “All
Night Long” with a slew of
stars such as Demi Lovato and
John Legend who had paid
tribute to him Saturday night
when he was named “Person
of the Year” at a fundraiser
event for the charity Musi-
Cares.
Skrillex and Diplo won best
electronic recording for their
“Where Are U Now,” featuring
Justin Bieber, and Best Elec-
tronic Album for their
“Skrillex and Diplo Present
Jack U.”
Alabama Shakes also took
home awards for best alterna-
tive album and best rock song.
any size…where you cannot
find a quality craft cocktail
bar,” Mr. Dobard said in an in-
terview from Los Angeles.
The rise of the cocktail
movement coincided with a
period of consolidation in the
liquor industry. Major players,
such as Diageo PLC, began
pushing to have liquor treated
the same as beer and wine. A
sign of its success is that spir-
its tastings are now allowed in
stores in 38 states compared
with 22 in 2001—a change the
industry said has fueled sales
of new and more expensive li-
quors much as wine tastings
fueled sales of new wines.
TV advertising also surged
after the industry dropped a
self-imposed ban in 1996. Ini-
tially, liquor companies adver-
tised on cable and local TV, and
then spread the message to
network TV in 2011. About the
same time, television shows
like “Mad Men” and “Board-
walk Empire” fueled the popu-
larity of liquor and helped ig-
nite a surge in popularity of
American whiskey, sending
sales of bourbon and Jack Dan-
iel’s up 45% to more than $2.9
billion last year from $2 billion
in 2011, according to the Dis-
tilled Spirits Council.
“All those things have made
[spirits] cool,” said Bryan Fry,
president of Pernod Ricard
USA.
Beer tried to push back. At
different times, August Busch
III, Anheuser-Busch’s former
chief executive, gave congres-
sional leaders a booklet say-
ing, “A drink is not a drink,”
implying that consuming beer
and liquor is not the same be-
cause liquor has a higher alco-
hol content by volume than
beer. His company pressed
networks to decline Smirnoff-
related advertisements.
Now beer is trying a new
tack: if you can’t beat ’em join
’em. Brewers are creating what
they call “near beer” products.
Anheuser-Busch InBev NV, the
nation’s largest brewer, has
rolled out hybrid brews like Bud
Light Lime-a-Rita and Mixxtail,
which are made with malt in a
brewery but taste like cocktails.
This year AB InBev and Mil-
lerCoors LLC, the nation’s No. 1
and No. 2 brewers, are expand-
ing into alcoholic soda with Best
Damn Root Beer and Henry’s
Hard Soda. So far, though, noth-
ing has succeeded in arresting
beer’s market-share decline.
SALES, IN MILLIONS
WEEKEND* CUMULATIVE
$150 $150
$26 $100.3
$20.6 $20.6
$16 $16
$7.8 $160.1
Source: comScore
$16 million—lower than the
original 15 years ago. It was
released by Viacom Inc.’s Par-
amount Pictures.
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. * * * * Tuesday, February 16, 2016 | B5

CFO JOURNAL.
Investors Shrug Off Lofty Payouts 8
The Big Number

Dividends, buybacks invest. From longer-term

shareholders, who make up a
fail to ignite stocks big chunk of Royal Caribbean’s
as economic jitters owners, “There is no noise.”
Fund managers focused on
preoccupy market capital returns aren’t con-
vinced now is the time to buy
BY MAXWELL MURPHY stocks with the highest divi-
dend yields, given market tur-
Finance chiefs say they bulence. “Unfortunately, the
aren’t influenced much by market can handicap stocks
short-term stock prices, but a very well,” said Margie Patel,
growing number of them are senior portfolio manager with
scratching their heads about Wells Fargo Funds.
why the market is punishing She says higher yields are
their stocks despite record consistent with her view that
revenues and rising dividends. stock prices will drop another
Over the past year, the S&P 10% or more before what she
500 index has fallen 11%, even believes will be a second-half
though many of its constitu- rebound this year. “One of the
ents sport lofty dividends. biggest mistakes I’ve seen is
Many companies also continue investors focused on the divi-
to buy back their stock. But dend,” she said, even as com-
that hasn’t been enough to panies move away from share
tempt investors, who are wor- repurchases to focus on their
ried about global economic payouts, as they did during
growth and low oil prices. the recent recession.
Ford Motor Co. is reward- She says she follows a “less
Average number of
preparation days
used by companies
with the best
forecasting records
Businesses that take an aver-
age of eight days to develop
sales and earnings projections
tend to report results that devi-
ate from their forecasts by
about 6%.
Companies that spend more
time preparing—an average 17
days—miss their targets by 10%
or more, the consulting firm
said.
“The organizations that exe-
cute a forecast faster are often
more confident in their capabili-
ties,” said Jason Balogh, who
heads Hackett’s corporate-per-

ROBERT NEUBECKER
ing shareholders with a sup- is more” approach, and favors formance management team.
plemental $1 billion dividend stocks with a more modest “It’s a tighter ship.”
on top of its regular first- dividend and room for growth For finance teams weaned on
quarter payout. The auto over those with rich distribu- the idea that longer planning
maker’s regular dividend now tions whose businesses or in- equates to better predictions,
yields 5.2%. Still, shares are dustries carry the risk of a the shorter-the-better concept is
down 18% this year, including A GM spokesman said the tency, yield 5%. jeopardize the returns on the rapidly changing economy. hard to accept. The difference
a 10% slide since the extra div- company “can’t control the A Chevron spokesman de- real-estate-investment trust, “Companies that were the comes down to better planning
idend was announced. stock market,” but is “confi- clined to comment. which distributes the bulk of leaders 20 years ago,” Ms. Pa- and more efficient use of re-
“It’s disappointing for sure. dent solid business results Heavy-machinery maker its earnings to shareholders tel said, often became a bad sources, Mr. Balogh said.
Am I discouraged? No.” said translate into stock perfor- Caterpillar Inc. yields 4.9% a via dividends. investment. Companies whose quarterly
Robert Shanks, Ford’s chief fi- mance.” year. Its stock has been pun- “We’ve tried to lay out the Even so, some CFOs are projections miss the mark
nancial officer. The company’s Dividends can bolster ished because its sales depend path” of stable dividends, said doubling down. International should rely less on spreadsheets,
share price, he said, will likely stocks, especially when they partly on China, whose growth Roderick Day, Iron Mountain’s Paper Co. raised its dividend use their technology better and
move higher over the long outperform corporate and is slowing, and oil-field ser- CFO. “The dividend is sacro- during the fourth quarter, and plot rolling forecasts, rather than
term if its financial results government bonds, assuming vices, a sector battered by sanct.” also boosted the percentage of static ones, he added.
continue to improve. companies are able to fund the cheap energy prices. Royal Caribbean Cruises free cash flow it hopes to re- “The biggest pushback I get
Ford isn’t alone. Nearly one payments for the long term. Douglas Oberhelman, Cater- Ltd., with a more modest 2.2% turn to investors, said CFO is they feel it’s more work,” said
in five companies in the index The annual payout on 30-year pillar’s chief executive, re- distribution, is wondering if it Carol Roberts. Mr. Balogh, referring to compa-
have a dividend yield that U.S. Treasurys is roughly 2.6%. cently told investors that its should return more cash to in- As for investors seeking nies that resist the suggestion
beats yields of 30-year U.S. Of course, stocks can fall, cash flow would more than vestors. The cruise operator’s short-term, share-price pops, they change their forecasting
Treasury bond. Over 100 yield and dividends sometimes get cover its dividend and capital shares tumbled 15% earlier she said, “There’s not much strategy.
3.3% or more, meaning the cut during tough times. But spending, but it is closely this month on disappointing you can really do to satisfy the Many companies aim to hire
dividend will return more than unlike with bonds, rising stock monitoring spending to keep it guidance, and CFO Jason Lib- 90-day investors.” more employees in the financial-
the cost of investment over prices and dividend increases below last year’s levels. Pro- erty said its management and planning and analysis depart-
the next three decades, assum- can fatten investor returns tecting the company’s balance directors are evaluating VISIT ONLINE ment and consolidate those
ing the payouts hold. over time. sheet and dividend, he said, whether increased capital dis- functions in one location. Yet the
General Motors Co., like Low crude-oil prices are are “really a high priority.” tributions would help. This coverage ones that do a better job of
Ford coming off a record year
for adjusted earnings, carries
a payout fractionally higher
pummeling oil and oil-related
stocks, despite solid payouts.
Shares of Chevron Corp.,
At 7.1% a year, Iron Moun-
tain Inc.’s yield ranks sixth in
the S&P 500. But a downtrend
He said many investors
these days want to know
“what is going to happen in
WSJ
.COM
was produced by
CFO Journal. For
more, visit
forecasting plan to add staff at
a more-rapid clip than their less-
accurate peers.
than Ford’s. known for its dividend consis- in earnings could in theory the next 90 days” before they wsj.com/cfoj —Maxwell Murphy

Weather The WSJ Daily Crossword | Edited by Mike Shenk

Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day.
Edmonton
d -0s <0 1 2 3 4 5 6 7 8 9 10 11 12 13 3 “It’s a deal!” 35 Daydreams
Vancouver
V 0s 0s 14 15 16 4 “Haystacks on a 36 Alien’s craft
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Mpls./St. P Toronto
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Hartford 60s 41 Treasury
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Cleve d New Yorkk
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Ph
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b h 39 40 41
Sacramento 40s
Denver p gfi ld Indianapolis
Springfield di p h g on D.C.
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gh 56 57 58 59 12 Stuff from veins 48 Sock option
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30s 70s a lab coat and tusks
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WINNING WORDS | By Jacob Stulberg bow tie 57 Cave man’s attire,
Today Tomorrow Today Tomorrow 26 Article in cartoons
U.S. Forecasts City Hi Lo W Hi Lo W City Hi Lo W Hi Lo W
Across 25 What 51 With 47-Across,
s...sunny; pc... partly cloudy; c...cloudy; sh...showers; 1 Fraudster’s gossipmongers car’s tank top 27 Philosopher 58 Country ruled
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Orlando 78 50 c 75 49 s Geneva 42 30 sh 42 30 c ploy dish 54 Catherine of “A by a sultan
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Atlanta 59 41 pc 58 36 s Portland, Maine 49 32 r 44 22 c Jakarta 84 76 t 86 76 t 9 Underpinnings with “the” 32 “Gotcha, 60 CBS symbol
Austin 80 44 s 78 47 s Portland, Ore. 58 46 r 60 45 r Jerusalem 71 57 s 71 58 s
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Boston 53 36 r 46 28 c Salt Lake City 53 34 pc 55 43 pc Madrid 46 25 s 47 36 pc
Burlington 50 33 i 34 17 sn San Francisco 72 57 s 63 51 r Manila 87 76 s 88 76 pc 15 Word after 38 Six-time Pro 64 Takes care of the
Previous Puzzle’s Solution
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Detroit 35 20 c 34 12 pc Paris 41 24 s 39 29 pc
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Houston 79 49 s 75 51 s Riyadh 77 49 s 73 48 s sunburn, perhaps B O O Z E S P I N T O B Y
Indianapolis 39 24 c 37 24 c City Hi Lo W Hi Lo W Rome 60 49 sh 58 44 r 19 Insurrection 43 Elapsed I L I A D R E L I T S E E
Kansas City 47 26 pc 56 39 pc Amsterdam 40 25 s 38 29 pc San Juan 84 74 pc 85 73 sh participant 44 Kitt who played 68 Be G E L H E E L E R B E G
H A L F B A C K A G O G O
Las Vegas 76 50 s 80 57 pc Athens 70 53 pc 68 55 pc Seoul 39 21 sf 41 24 s 69 Monthly expense
Little Rock 65 35 pc 62 41 s Bangkok 92 72 s 92 72 s Shanghai 50 32 s 51 40 c 20 Boxing, with Catwoman A N A L Y Z E B L U R R E D
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Los Angeles 89 57 s 73 56 pc Beijing 45 25 s 48 30 s Singapore 89 80 pc 88 78 c “the” 46 Binary base 70 Cash register bills R A P P E L S A D A G E S
Miami 81 63 pc 79 58 pc Berlin 38 29 pc 38 32 sn Sydney 80 65 s 76 65 s The contest answer is DEUCE. By changing one
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Minneapolis 35 13 sn 26 18 s Buenos Aires 91 73 pc 89 70 t Tokyo 49 38 pc 53 39 s whitened 50 “You just blew 1 Begins examples of the bracketed category (ALL/TIDE;
Nashville 50 34 sh 47 30 c Calgary 50 30 pc 45 30 c Toronto 35 21 sn 33 1 sn
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New Orleans 71 50 s 68 47 s Dubai 74 61 s 74 62 pc
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Solve this puzzle online and discuss it at WSJ.com/Puzzles. the contest answer.
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B6 | Tuesday, February 16, 2016 THE WALL STREET JOURNAL.

You needed VMware.

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YOU’LL LOVE
NUTANIX.

The Enterprise Cloud Company

nutanix.com/love
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MOVING THE MARKET C2 | MARKETS DIGEST C4 | BORROWING BENCHMARKS C5

An Emerging
Oil Cuts on the Table

RICARDO MORAES/REUTERS
Debt Threat
HEARD ON
Saudi, Russian ministers to discuss COMMODITIES | C3 THE STREET | C6
© 2016 Dow Jones & Company. All Rights Reserved. * * THE WALL STREET JOURNAL. Tuesday, February 16, 2016 | C1
DJIA 15973.84 Closed S&P 1864.78 Closed NASDAQ 4337.51 Closed 10–YR. TREAS. Closed, yield 1.746% OIL $29.44 Closed EURO $1.1155 YEN 114.60 See more at WSJMarkets.com

Shiny
Gold futures
$1,250 Friday: $1,239.10
Draghi: ECB ‘Ready’ to Do More
1,200
European leader low inflation, ECB President bank stocks have come under The ECB disappointed in- uary and is expected to fall be-
Mario Draghi said. particular pressure, raising vestors in December with an low zero over the coming
signals March would “The ECB is ready to do its fears that rising equity costs expansion of its stimulus that months, far below the ECB’s
1,150 bring greater stimulus part” to bolster the eurozone’s could constrain lending and fell short of expectations, driv- target of just below 2%. Earlier
economy, Mr. Draghi told Eu- undermine the ECB’s efforts to ing stocks lower and the euro Monday, the Bundesbank
1,100
if hard times persist ropean lawmakers in Brussels, boost the economy. higher against the dollar. The slashed its German inflation
underlining the bank’s willing- “The ECB is facing a credi- new measures included a re- forecast for this year to 0.25%
1,050 BY TOM FAIRLESS ness to reconsider its €1.5 tril- bility challenge,” both in terms duction in the already-negative from 1.1% in December. The
AND TODD BUELL lion ($1.7 trillion) stimulus at of its ability to drive inflation deposit rate—charged to banks ECB will publish its quarterly
its policy meeting March 10. back toward its target, and in for storing funds at the central inflation forecast for the euro
1,000
The European Central Bank The hearing at the Euro- protecting the stability of the bank—a six-month extension area on March 10.
Nov. Dec. Jan. Feb. won’t hesitate to boost its pean Parliament was closely eurozone’s financial system of its bond-purchase program “We are far from our objec-
Source: WSJ Market Data Group stimulus in March if it believes watched by investors for signs given the sharp drop in bank and a decision to reinvest tive,” Mr. Draghi said during a
THE WALL STREET JOURNAL. recent financial-market tur- of how the ECB might respond stocks, said Lena Komileva, an principal payments on the question-and-answer session
moil or lower oil prices could to the recent bout of financial- economist with G+ Economics bonds it holds. Yet inflation in with lawmakers. He said the

Central
weigh further on stubbornly market volatility. European in London. the eurozone was 0.4% in Jan- Please see ECB page C3

Bankers Different Rides

Walt Disney's shares have made
$125 €250
Range of recapitalization:
Oct. 6, 2014–Nov. 17, 2015 Beijing
strong gains, particularly in recent €1.27
Guides
Have Lots
100 200
years, but Euro Disney shares
have lost almost all their €1.54
value since launch. 75 150
Yuan Up
Of Ammo Walt Disney’s share price 50 100
2014
Euro Disney’s share price
’15

In Shift
Today begins a new column 25 50 China’s yuan had its big-
called Streetwise by James gest jump against the dollar
Mackintosh on markets and in more than a decade on
economics. Its goal is to ex- 0 0 Monday, as Beijing keeps
plain how markets really 1990 2000 2010 1990 2000 2010 markets off guard with a
work—or don’t—and what shifting approach to manag-
that means for investors. ing its currency.

Since the medieval church By Lingling Wei in Beijing

clamped down on the sale of and
indulgences, it has been hard Carolyn Cui in New York
to put a price on religious
faith. Not so with central The central bank is keep-
banks. The value of trust in ing its options open, swing-
the world’s leading policy ing between its pledge to at-
makers is calculated second tach the yuan’s value to the
by second, and stood at about currencies of its major trad-
$1,209 an ounce on Monday. ing partners and, when that
The gold works against it, repegging it
price is far to the dollar.
from a per- Since mid-January, the
fect measure People’s Bank of China has
of belief—or quietly rehitched the yuan’s
lack of it—in value to a weakening dollar,
STREETWISE policy mak- despite vowing just a month
JAMES ers. But its earlier to use multiple cur-
MACKINTOSH 14% rise sup- rencies as the yuan’s refer-
ports one ence points.
popular ex- For investors, China’s op-
planation for this year’s tum- Note: €1=1.12 Sources: Thomson Reuters (share price); Reuters (photo) THE WALL STREET JOURNAL. portunistic approach sows
bling markets: Investors have confusion, which has led to

Euro Disney Investors Square Off

lost faith that the central volatile trading. On Monday,
bankers know what they are the central bank suddenly
doing. guided the yuan sharply
The supporting evidence higher.
seems pretty convincing. The BY LAURENCE FLETCHER Euro Disney, has siphoned off in the firm. The group of hedge Euro Disney. An executive said Chinese officials and ad-
most obvious comes from excessive royalties while Euro funds, led by Paris-based Char- contracts with Walt Disney had visers close to the central
moves in currencies and from Minority shareholders in the Disney’s assets have been un- ity Investment Asset Manage- been disclosed since it became

6.4938
banks, which suffer when they struggling Euro Disney resort dervalued, in an attempt to ment’s CIMA fund, says small public, while royalties were
cannot pass on negative inter- say they have been taken for a drive out minority shareholders. shareholders weren’t told of within market comparisons. A
est rates to most of their cus- ride. During a restructuring that the true value of the firm’s as- spokeswoman for Walt Disney
tomers. In a cluster of legal disputes was concluded in November sets and the health of its busi- said: “We believe that the case Value of yuan to the dollar in
Currencies haven’t moved playing out in French courts, a and that Euro Disney said was ness. is utterly without merit.” late mainland China trading
as expected. Negative rates group of activist shareholders designed to, and did, improve Euro Disney says the claims Another of CIMA’s com- Monday
ought to weaken a currency alleges Walt Disney Co., the its finances, Walt Disney was are baseless and that the re- plaints centers on incentives
Please see STREET page C2 majority owner of Paris-listed able to almost double its stake structuring was a positive for Please see DISNEY page C6
bank said the move was
aimed at shoring up dwin-

What if Bernie Sanders Hidden Gem in Public Storage dling confidence in the Chi-
nese currency, also known as
the renminbi, that has led

Gets Wall Street Tax? Stored Treasure

BY STEVEN RUSSOLILLO earlier. Revenue is expected
to have risen 9%. Chances
businesses and individuals to
rush to move capital out of
the country. Analysts esti-
BY JOHN CARNEY In these tumultuous finan- Total return, including dividends are Public Storage will fare mate China’s capital outflows
cial markets, boring is often better. The company has ex- ranged between $500 billion
Sen. Bernie Sanders wants to better. Few fit that bill bet- 2,500% ceeded expectations all but and $1 trillion last year.
raise a lot of money from Wall ter than the biggest operator 2,000 Public Storage twice over the past five “The central bank wants
Street. of self-storage units. S&P 500 years. to be flexible,” one of the of-
Mr. Sanders’s plan isn’t to ask Public Stor- 1,500 There are risks, of course. ficials said. “The goal is to
Wall Street for money; it is to AHEAD OF age, a real-es- As with other REITs, Public reference the renminbi, in-
1,000
demand it in the form of a fi- THE TAPE tate investment Storage is sensitive to fluctu- stead of strictly pegging it,
nancial-transaction tax. trust, buys, 500 ations in interest rates. That to the basket.”
Proponents say the tax would builds and is because many investors In published remarks over
collect tens of billions of dollars, manages the buildings where 0 view REITs as alternatives to the weekend, China’s central-
discourage speculative and high- people stash old furniture, fixed-income investments bank governor, Zhou Xiaoch-
–500
frequency trading and make valuables and other keep- such as bonds. When interest uan, gave a hint of Beijing’s
JIM YOUNG/REUTERS

markets safer and less volatile. sakes. It operates more than 1996 2000 ’10 rates rise, REITs tend to look desire to be opportunistic in
Its opponents say the revenue 2,200 company-owned facili- Source: FactSet less attractive. remaking its exchange-rate
estimates are overstated and ties in the U.S. and Europe. THE WALL STREET JOURNAL. But with long-term bond regime. Speaking to Caixin, a
the tax will actually make mar- And on Wall Street, it has yields falling, and investors prominent Chinese magazine,
kets more volatile. been a cash cow. year. betting that the Federal Re- Mr. Zhou said China would
The Democratic presidential Sen. Sanders wants to use the Over the past 20 years, Public Storage has bene- serve isn’t likely to raise proceed with the overhaul of
candidate wants to use funds tax to fund his education plan. Public Storage shares have fited from rising rents and rates soon, it isn’t surprising referencing the yuan to the
raised by this tax to pay for his risen 17% annually, including improved occupancy rates. that Public Storage has out- currency basket when there
college-education agenda, which incur a 0.5% tax rate, or $5 for dividends. That is more than Limited construction follow- performed the broader mar- is “a window” of opportunity
includes making public colleges every $1,000 of stocks traded. double the S&P 500. Up ing the financial crisis also ket. Its 2.7% dividend yield and will be “pragmatic and
free, cutting interest rates on Bond trading gets a more than 2,000% over that has helped, restraining com- isn’t shabby, either. patient” when there isn’t.
student loans and increasing fi- 0.10% tax rate, derivatives a time, it is also one of the petition. These favorable While Public Storage isn’t “The direction is clear, but
nancial aid. The costs of these 0.005% tax rate. best-performing REITs, ac- conditions should help drive exactly a bargain, it fetches a the path to reform won’t be
proposals—$75 billion a year by Although those tax rates seem cording to research firm Public Storage’s fourth-quar- multiple that is reasonable a straight line,” Mr. Zhou
Mr. Sanders’s count—could be small, in theory they could raise Green Street Advisors. And ter results, out Tuesday. relative to its rivals. said.
fully paid for by the tax, accord- a lot of revenue for the govern- Public Storage has fared bet- Analysts estimate the This still is a good place Returning to what some
ing to Mr. Sanders. ment because of the size of U.S. ter than most during the company earned $1.71 a to store some cash. analysts call a quasidollar
Under a bill Mr. Sanders in- financial markets. The total dol- stock market’s latest tailspin, share for the period ended in peg has helped Beijing at a
troduced last May, investors lar value of U.S. stocks is around down just 6% so far this December, up 4% from a year Email: tape@wsj.com time the dollar has weakened
would be required to pay an ex- $25 trillion, and more than $300 sharply against the yen and
cise tax on any transfer of a billion in shares are traded on a the euro as expectations for
INDEX Closed-End Funds.................................C4, C5 Currencies........................................................... C2 Global Finance................................................. C3 Markets Digest....................................... C4
stock, bond, partnership interest typical day. The bond market is Borrowing Benchmarks.................... C5 Commodities.................................................... C4 Financial Flashback..................................... C4 Heard on the Street.................................... C6 New to the Market.............................. C4 interest-rate increases in the
or derivative. Stock trades would Please see SANDERS page C6 Please see YUAN page C2
 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
C2 | Tuesday, February 16, 2016 * * THE WALL STREET JOURNAL.

MOVING THE MARKET

THE TICKER | Market events coming this week YUAN
Continued from the prior page
U.S. fade.
That has allowed the yuan
to ride down with the dollar
and discreetly depreciate
against the currencies of
China’s trading partners.
“Things right now are
working in the central bank’s
favor,” said David Loevinger,
a managing director and
emerging-market sovereign
analyst at TCW Group, with
$180.7 billion of assets under
management. “For the mo-
ment, that’s taken a lot of the
pressure from the Chinese
yuan. There’s less need for
them to have the yuan depre-
ciate against the dollar.”
But it isn’t clear how long
the favorable winds will blow
for China. Monday’s currency
movements gave an indica-
JOE RAEDLE/GETTY IMAGES
Return to the Dollar Peg
Beijing has quietly repegged the yuan to the U.S. dollar, a move that
has allowed the Chinese currency to ride down with the greenback
Chinese central bank wants
to build something thought
of as the Singapore model.
Under the “basket, band and
and depreciate against the currencies of China's trading partners. crawl” system, the Monetary
Authority of Singapore man-
How many yuan one U.S. dollar Yuan vs. basket of currencies ages the Singaporean dollar’s
buys* index value against a trade-
weighted currency basket, al-
6.35 104
lows it to trade within a
Spot rate 103 band and lets the band crawl
6.40
Fixing rate upward or downward as the
6.45 102 central bank sees fit.
With that kind of model in
6.50 101 place, the people say, China’s
central bank would give a
6.55 100
general guidance of future
6.60 99 movement of the country’s
currency and reduce its in-
6.65 SCALE INVERTED 98 tervention in the market.
D J F D J F The state of the Chinese
2015 ’16 2015 ’16 economy—which decelerated
*China's central bank sets an official reference rate—known as fixing—for the yuan before daily to a growth rate of 6.9% last
trading begins. The yuan is allowed to move up and down 2% in either direction of that rate. year, the slowest pace in a
Source: Macquarie Securities THE WALL STREET JOURNAL. quarter century—and
whether the yuan will
pegging pattern will still dling economic growth. That sharply depreciate have be-
hold because stemming out- is because the central bank, come a worry for global in-

tion of the complexity of flows remains the central to maintain the peg, would vestors, who have counted on
China’s gambit. bank’s top priority.” have to intervene more heav- China as a source of growth
The yuan strengthened by Monday’s jump erased ily in currency markets, for more than a decade.
as much as 1.35% against the most of the losses the yuan which would have the effect That anxiety has been no-
dollar in mainland trading on had sustained in early Janu- of draining yuan funds out of ticed by Beijing. Senior Chi-
Monday on the first day of ary, when the central bank China’s financial system. nese officials have pledged to
trading following a weeklong unexpectedly weakened the “They have enough fire- better communicate with the
A Miami Wal-Mart store. The retailer reports results Thursday. Lunar New Year holiday. currency amid an economic power to play this game for a market, though officials at
Before Monday’s surge, slowdown. The yuan is down long time, but not forever,” the central bank have also
Tuesday Jan., exp. Philadelphia Fed which brought the yuan to a slight 0.3% against the dol- Mr. Loevinger said. signaled that, when it comes
up 0.1% survey 6.4938 per dollar in late lar since the end of last year. The central-bank officials to fighting off speculators, it
Empire
Housing starts
Jan., prev. -3.5 mainland trading, the yuan By comparison, the yuan has and advisers stress that ref- sometimes helps to be un-
Manufacturing
Dec., prev. 1.15 mil.
Feb., exp. -4.0 had been hovering around weakened 1.7% against a bas- erencing the yuan against a predictable.
Jan., prev. -19.4
Jan., exp. 1.18 mil. 6.57 to the dollar. ket of 13 currencies, the com- basket of currencies remains China’s central bank has
Feb., exp. -10 Leading indicators The central bank engi- position of which the central the central bank’s long-term been criticized for how it has
Dec., prev. down 0.2% neered the jump to maintain bank disclosed in December, goal. The central bank is ex- managed and communicated
Earnings expected* Building permits
Jan., exp. down 0.2% the yuan’s relative stability including the dollar, yen, pected to revert to the bas- its exchange-rate policies
Estimate/Year Ago($) Dec., prev. 1.20 mil.
Baxalta 0.55/0.68 Jan., exp. 1.20 mil. against other currencies af- euro and Australian dollar. ket approach, they say, as over the past eight months
Earnings expected* ter some of them strength- Should the dollar resume the amount of money leaving in a series of surprises and
Express Scr. 1.56/1.39 Estimate/Year Ago($)
Hormel 0.37/0.35 Industrial production ened against the dollar last its surge, Beijing would need the country eases and in the reversals. As it devalued the
Con. Ed. 0.54/0.58 week. “It’s a catch-up with to adjust its strategy again event of renewed strength of yuan in August, the central
Liberty Gl. 0.13/(0.62) Dec., prev. down 0.4%
Duke En. 0.90/0.86 movements in the dollar af- because a yuan more closely the dollar, which has weak- bank tried a new way to fix
Public Strg. 1.71/1.64 Jan., exp. up 0.4%
PG&E 0.44/0.53 ter the holiday,” said Jerry pegged to a rising dollar ened against some major the yuan’s value each day,
Zoetis 0.38/0.40 Wal-Mart 1.46/1.61
Capacity utilization Peng, an analyst at Mac- would hurt the Chinese cen- currencies in recent weeks. only to all but drop it when
Dec., prev. 76.5% Waste Mg. 0.68/0.67 quarie Securities. “But in the tral bank’s ability to ease In the long run, the offi- confused investors sold off
Wednesday Jan., exp. 76.6% Welltower 0.53/0.57 near term, the [yuan-dollar] credit, a crucial tool in rekin- cials and advisers say, the the currency.
Mort. bankers indexes
Purchase, prev. Earnings expected* Friday

STREET
up 0.2% Estimate/Year Ago($)
Analog Dev. 0.54/0.63 Consumer-price index
Refinan., prev. All items, Dec. down
up 16% Barrick Gold 0.06/0.15
Dr Pepper 0.99/0.88 0.1%
Marriott 0.76/0.68 Jan., exp. down 0.1%
EIA status report Continued from the prior page
Previous change in stocks in Priceline 11.81/10.85 Core, Dec. up 0.1%
millions of barrels Jan., exp. up 0.2% by making it less attractive
T-Mobile US 0.15/0.12 to hold, one reason that cen-
Crude oil down 0.8
Gasoline up 1.3 Earnings expected* tral banks in the eurozone,
Distillates up 1.3 Thursday Estimate/Year Ago($) Japan, Switzerland, Sweden
Ameren 0.15/0.19 and Denmark are so keen on
Initial jobless claims
Producer-price index Cabot Oil (0.04)/0.23 them.
Previous 269,000
All items, Dec. Deere & Co. 0.70/1.12 But when the Bank of
Expected 275,000
down 0.2% Pinnacle W. 0.26/0.05 Japan surprised economists
NEIL HALL/REUTERS

Jan., exp. EIA report: natural PSEG 0.49/0.49 by cutting to negative rates
down 0.2% gas V.F. Corp. 1.01/0.98 for the first time at the end
Core, Dec. Previous change in stocks in of January, the yen had just
up 0.1% billions of cubic feet one weak day before
down 70 strengthening back to be
* FACTSET ESTIMATES EARNINGS-PER-SHARE ESTIMATES DON’T INCLUDE EXTRAORDINARY
worth more than it was be- The gold price, which has risen 14% this year, isn’t a perfect measure of belief in central bankers.
ITEMS (LOSSES IN PARENTHESES)  ADJUSTED FOR STOCK SPLITNOTE: FORECASTS ARE FROM fore the cut. Against the dol-
DOW JONES WEEKLY SURVEY OF ECONOMISTS
lar, it is now worth 4% more rock-solid case to give up makes the Fed less likely to said in a famous 2002
than before the cut. hope and buy gold, you step in to help than before, speech, “we can take comfort
Sweden faced the same aren’t alone. But far from a Fed Chairwoman Janet that the logic of the printing
Currencies problem last week, as its loss of faith in central Yellen failed to provide any press example must assert it-
central bank, the Riksbank, banks—the case beloved of relief when she spoke last self, and sufficient injections
U.S.-dollar foreign-exchange rates in late New York trading cut its main policy rate more “goldbugs” that paper money week. For investors who see of money will ultimately al-
US$vs, US$vs,
Mon YTDchg Mon YTDchg than expected to minus-0.5%. is ultimately just paper—the central-bank intervention as ways reverse a deflation.”
Country/currency in US$ per US$ (%) Country/currency in US$ per US$ (%) By the next morning, the explanation is more nuanced. a backstop for markets—the Markets have a tendency
Americas Vietnam dong .00004466 22390 1.1 krona was in fact stronger First, there are plenty of “Yellen put”— this suggests to panic first and reflect
Argentina peso .0677 14.7706 14.1 Europe than before the action. other things pushing markets more turmoil will be needed later. If the fear continues,
Brazil real .2496 4.0067 1.2 Czech Rep. koruna .04128 24.223 –2.7 Both cases seem to show around, from rising fear of to spur the Fed into action. central banks will eventually
Canada dollar .7229 1.3834 unch Denmark krone .1495 6.6912 –2.6 that investors fear negative recession to worries about Investors who nonetheless break out some serious hard-
Chile peso .001423 702.50 –0.9 Euro area euro 1.1155 .8965 –2.6 rates more than they respect China to concern of mount- count on central banks to ware—and faith will be re-
Colombia peso .0002895 3453.90 8.8 Hungary forint .003604 277.44 –4.5
their power to stimulate. ing debts of oil drillers and rescue anxious markets stored at the point of a gun.
Ecuador US dollar 1 1 unch Iceland krona .007870 127.07 –2.4
Mexico peso .0531 18.8305 9.5 Norway krone .1160 8.6213 –2.5 Part of this is down to the miners. shouldn’t forget the banks The real anxiety is over how
Peru new sol .2853 3.505 2.7 Poland zloty .2537 3.9411 0.4 effect on the banking sys- Second, this looks more retain the ultimate weapon much money investors might
Uruguay peso .03154 31.7100 6.0 Russia ruble .01299 77.003 7.1 tem, particularly in Europe. like a lack of belief in the to fight deflation: the print- lose before the Fed steps in
Venezuela b. fuerte .158595 6.3054 unch Sweden krona .1179 8.4849 0.5 power of negative rates than ing press. The concern, of with QE4.
Asia-Pacific Switzerland franc 1.0132 .9870 –1.5 a loss of trust in the entire course, is too little inflation
Australian dollar .7139 1.4008 2.1
Turkey lira .3394 2.9461 1.0 Central banks retain central-bank arsenal. will rapidly become too Contact James Mackintosh at
Ukraine hryvnia .0381 26.2720 9.5
China yuan
Hong Kong dollar
.1539 6.4995
.1285 7.7851
0.1
0.4
UK pound 1.4436 .6927 2.1 the ultimate weapon While negative rates gar- much inflation. As former James.mackinosh@wsj.com or
nered big headlines, their Fed Chairman Ben Bernanke on Twitter at @jmackin2.
India rupee .01468 68.132 2.9 Middle East/Africa to fight deflation: lack of effectiveness can
Indonesia rupiah .0000746 13397 –3.2 Bahrain dinar 2.6504 .3773 0.1
Japan yen .008726 114.60 –4.7 Egypt pound .1276 7.8345 0.1 the printing press. partly be explained by the
Kazakhstan tenge .002751 363.50 7.3 Israel shekel .2567 3.8955 0.1 fact they involve relatively

1.4%
Macau pataca .1248 8.0154 0.1 Kuwait dinar 3.3487 .2986 –1.6 small cuts of 0.1 or 0.15 per-
Malaysia ringgit .2415 4.1400 –3.8 Oman sul rial 2.5937 .3855 0.2 Banks haven’t been able to centage point, rather than
New Zealand dollar .6648 1.5042 2.8 Qatar rial .2745 3.643 unch
Pakistan rupee .00954 104.875 unch Saudi Arabia riyal .2666 3.7507 –0.1
pass on negative rates to the usual 0.25-point moves.
Philippines peso .0211 47.390 1.1 South Africa rand .0636 15.7230 1.6 customers, hurting their Investors sense central
Singapore dollar .7140 1.4005 –1.3 margins even as bondhold- banks’ reluctance to unlock
South Korea won .0008233 1214.60 3.3 Close Net Chg % Chg YTD%Chg
WSJ Dollar Index 89.40 0.41 0.46 –0.85
ers worry that corporate de- the armory, with practical The average percentage decline in an
Sri Lanka rupee .0069132 144.65 0.3 faults are set to rise. limits on how negative they
Taiwan dollar .03015 33.168 0.8 Sources: Tullett Prebon, WSJ Market Data Group If central banks were could go and no sign so far acquirer’s stock price the trading day after
Thailand baht .02806 35.640 –1.1
trusted to boost the economy, of producing new weapons. announcing a $1 billion-plus deal
higher demand for loans and Yet, there is still
fewer bad debts should amply hope. Monday’s monster
offset negative rates’ effects
on bank profits. Bank shares
rally in Japanese stocks, with
the Topix rising 8% in its
Big Buyers Get Bitten
suggest otherwise. fifth-best day since 1986, fol- Investors are punishing com- atile week of trading, investors
In Japan, bank shares fell lowed surprisingly bad data panies for deal making this year. pushed Mylan’s stock down 18%
more than 40% in three on both Chinese trade and The stock price of companies the day after the deal was an-
months, before Monday’s Japanese production and announcing $1 billion-plus deals nounced.
Notice of Record Date nearly 9% rally. This is their economic growth. The old have averaged a 1.4% decline the While investors’ reactions
third-worst three-month paradigm of bad news mean- following trading day, according aren’t typically as extreme, sell-
The Annual General Meeting of the Shareholders of
drop since 1983, behind only ing more Bank of Japan eas- to Dealogic. ing out of an acquirer’s stock in
Canadian National Railway Company will be held the postbubble crash in the ing, meaning higher stock That is a sharp reversal from the wake of a deal announce-
at Le Windsor, Windsor Ballroom, 1170 Peel Street, early 1990s and the 2008 prices seemed to be back in the past four years when inves- ment has become an increas-
Montreal, Quebec, Canada, on Tuesday, April 26, 2016, Lehman Brothers panic. force. (Just because stocks ingly common response.
at 10:00 a.m. (EDT). Banks are also struggling are up again doesn’t make MONEYBEAT The drop in an acquirer’s
in Europe, where the Euro- them a good buy, so be wary: share prices is the worst since
Shareholders registered at the close of business on pean Central Bank has The four better days for Jap- tors were quick to reward corpo- 2000 when the shares of buyers
March 3, 2016 will be entitled to receive notice of the strongly hinted that it will anese stocks mostly proved rations for deal making. Between averaged a 2.8% drop after a
meeting and vote at the meeting. take rates deeper into nega- to be dead-cat bounces.) 2012 and 2015, the shares of deal was announced, according
tive territory come March. Bank policy makers may companies announcing a $1 bil- to Dealogic
By order of the Board of Directors, Eurozone bank shares have ignore growing political op- lion-plus acquisition rose be- —Maureen Farrell
Sean Finn fallen a third in three position to alternative mone- tween 1% and 3%, on average,
Executive Vice-President
months, the fifth-biggest tary missiles; Bank of Japan according to Dealogic. ONLINE
drop since the common cur- Gov. Haruhiko Kuroda insists Mylan NV’s deal to buy
Corporate Services and rency was created. Among there is no shortage of Swedish pharmaceutical com- For more

Chief Legal Officer the hardest hit is Deutsche
Bank, where one-year credit-
Montreal, Quebec
default swaps suggest it is in
February 16, 2016 www.cn.ca greater peril than even in the
post-Lehman days.
If this all sounds like a
WSJ
ammo, for example. But ac- pany Meda AB for $7.2 billion MoneyBeat blog
tion by the U.S. Federal Re- serves as a stark example of in- posts go to
.COM
serve, the most important vestors’ concerns for deal mak- blogs.wsj.com/
central bank, would require ing this year. In what was a vol- MoneyBeat
an embarrassing reverse of
last year’s rate increase. That
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL. NY Tuesday, February 16, 2016 | C3

GLOBAL FINANCE
HSBC Keeps Its Home in London ECB
Continued from page C1
Bank’s choice to forgo it affects the bank’s costs and ECB’s 25-member Governing
regulatory direction. It comes Council would examine at its
a move to Hong Kong during a rough few weeks for next policy meeting whether
or New York is a vote bank stocks, as investors look lower oil prices were feeding
hard at how low interest rates, through to wages and other
of confidence for U.K. weak revenue and high costs prices, which could lead to a
are crippling big lenders. downward spiral in prices, and
HSBC Holdings PLC will HSBC is well-capitalized com- how the recent financial tur-
continue straddling the pared with many peers but is moil had affected lending by
world’s biggest economies heavily exposed to Asia’s slow- financial institutions.
from its London perch after ing economies. While the ECB president
concluding that it is “the best In Hong Kong, the rejection didn’t elaborate on how the
of both worlds” to house its prompted soul-searching bank might expand stimulus,
multitrillion-dollar balance about the former British col- he stressed that it still had “a
sheet in the U.K. while focus- ony’s status on the world variety” of tools at its disposal
stage and how its growing ties to drive up inflation, rejecting
By Margot Patrick to China are perceived by in- suggestions by some lawmak-
in London and Julie vestors. When the review ers that the bank is running
Steinberg in Hong Kong started, Hong Kong had looked out of room to maneuver.
like a strong contender for a Markets are currently pric-
HANNAH MCKAY/REUTERS

ing on Asia for growth. move. The bank was founded ing an 86% probability that the
HSBC’s board spent 10 there in 1865 and dominates central bank will cut its nega-
months weighing how regula- swaths of its financial busi- tive deposit rate by a further
tors, governments and tax of- ness. 0.2 percentage point in March
ficials in the world’s biggest HSBC said London won out to minus 0.5%, with more to
financial centers might treat because of its strong regula- follow, Ms. Komileva said.
the bank now and in decades tory and legal system and im- HSBC’s decision effectively ends an argument that Britain’s firm regulations are suffocating banks. Many analysts also expect the
to come. The vote by direc- portance in global finance. “It ECB to accelerate its bond-pur-
tors, including former finan- does not in any way shape or Hong Kong booksellers disap- England calmed banks by say- HSBC’s tax bill and lifted it at chase program, which is run-
cial regulators and bank veter- form signal any drawing back” peared and reappeared in ing it wasn’t planning fresh least partially out of European ning at €60 billion a month.
ans Chairman Douglas Flint on HSBC’s ambitions to keep mainland China this year. As a demands on the capital they Union restrictions on pay Mr. Draghi did little to dis-
and Chief Executive Stuart growing in Hong Kong and special administrative region hold against losses. across its world-wide work- courage such expectations. He
Gulliver, was unanimous and China, Mr. Gulliver said in an of China, Hong Kong largely HSBC’s decision confirmed force of 260,000. said the bank’s stimulus pro-
came after what the bank interview. Those include plans operates independently from that “the U.K. is the best place The U.S. was discarded as a gram had “worked a lot,” and
called an exhaustive process. to invest heavily in China’s the mainland but potential fu- to base a global business,” the viable option because of ob- was responsible for about half
The bank’s shares rose 1.4% in Pearl River Delta region and to ture changes to its framework Treasury said Sunday. stacles including a dividend of the eurozone’s economic
London. establish a majority-owned haven’t been fully mapped out. Mr. Gulliver said HSBC is tax that would apply to HSBC’s growth over recent years, with
The outcome was seen as a joint-venture securities com- The Hong Kong Monetary committed to remaining head- large base of Hong Kong the other half attributable
strong vote of confidence in pany in the country. “We are Authority, Hong Kong’s de quartered in the country, even shareholders. mainly to lower oil prices.
London and the U.K. govern- aiming here for the best of facto central bank, said Mon- if Britons decide to exit the Mr. Gulliver, a 36-year He warned of a “general de-
ment and effectively ends a both worlds,” Mr. Gulliver day it respects HSBC’s choice European Union in a coming HSBC veteran who became terioration in market senti-
debate over the idea that Brit- said. in staying put. Main oversight referendum. He said it might CEO in 2011 after holding top ment” since early December,
ain’s firm regulation is suffo- Countries from Jamaica to of HSBC would have trans- have to move some of its treasury and markets roles, as well as “heightened uncer-
cating banks. HSBC started the Canada had courted HSBC, a ferred to the HKMA from the global banking and markets said Monday that there is a tainties” around the global
review in April and considered linchpin in the world’s finan- Bank of England if it had jobs, though, if it were no lon- risk the recent market selloff economy and broader geopo-
cities including New York and cial system because of its moved, but China would have ger able to conduct business will lead to lower economic litical risks.
Paris for potential relocation, $2.67 trillion balance sheet been seen as the ultimate su- freely between the U.K. and activity. But he predicted that Some parts of the eurozone
before narrowing the choices and role in global trade. For- pervisor. Local regulators also the EU. banks generally “do have banking sector, Mr. Draghi
to the U.K. and Hong Kong. It mer government officials, geo- monitor HSBC’s activities “We believe it is in Britain’s enough capital” to withstand said, “still face a number of
called both “world class finan- political strategists, accoun- across 72 countries. best economic interest to re- the pressure. challenges,” ranging from un-
cial centers” that could play tants and lawyers were While the review was under main in the EU,” Mr. Gulliver He said he plans to remain certainty about litigation and
host to one of the banks most enlisted to give advice to the way, London, home since said. in his role until at least the restructuring costs to working
important to the global finan- HSBC directors, who hail from HSBC bought a major British Not everyone in London end of 2017, when a planned through a stock of nonper-
cial system. half a dozen countries. bank in 1993, started looking was pleased with the decision. restructuring he has overseen forming loans. Still, he said eu-
The “status quo, however The process took on a new friendlier for banks. The Trea- Ian Gordon, a bank analyst at will conclude. Some share- rozone banks were in a “very
boring, is preferable to change dimension when China deval- sury moved to cut a tax last Investec, in a note said the re- holders pressed the bank last different” state than in 2012.
right now,” said Ronit Ghose, ued the yuan and markets year on bank balance sheets view was a missed opportunity year to prepare succession Banks have “significantly
global head of banks research turned volatile last year. Con- that irked Mr. Flint and Mr. to move to Hong Kong and plans and consider drafting an strengthened their capital po-
at Citigroup Inc. The decision tinuing questions about Hong Gulliver for hitting HSBC’s that the bank is now “trapped” outsider when it eventually sitions over the past few
has been closely watched by Kong’s independence also global business disproportion- in the EU. Moving to Hong chooses a successor to Mr. years,” making them more re-
analysts and investors because came into focus when several ately. In December, the Bank of Kong would have likely cut Flint. silient to shocks, he said.

Oil Ministers to Talk Cuts

BY SUMMER SAID
AND BENOIT FAUCON

The energy ministers of

Saudi Arabia and Russia—the
world’s two largest crude-oil
exporters—are set to discuss
production in Qatar on Tues-
day, OPEC delegates said Mon-
day, amid mounting pressure
to prop up
COMMODITIES fallen oil
prices.
The sur-
prise meeting between Saudi
Arabia’s Ali al-Naimi and Rus-
sia’s Alexander Novak comes
after Iran launched its first oil
JACKY NAEGELEN/REUTERS

exports to the European Union

in more than three years fol-
lowing the lifting of sanctions
over its nuclear program. Ira-
nian officials said over the
weekend that the country had
boosted exports by 400,000
barrels a day, adding to an al- Saudi Arabia’s Ali al-Naimi will meet with his Russian counterpart.
ready saturated oil market.
Crude-oil prices have have to join,” the Gulf OPEC ents a solid plan, the Saudis
plunged more than 70% since official said, noting that Vene- would join, the delegates said.
June 2014, falling below $27 a zuelan officials have privately The talks would come after
barrel last week, largely be- said they can convince Iran. previous attempts led by Vene-
cause of surging supplies from “So we will see.” zuela to agree on a production
the U.S., Russia and members Mr. Naimi and Mr. Novak cut failed earlier this month.
of the Organization of the Pe- will be joined in Qatar’s capital Nigeria has called for an emer-
troleum Exporting Countries of Doha by OPEC member Ven- gency OPEC meeting to talk
including Saudi Arabia, Iraq ezuela’s oil minister Eulogio about cutting production
and Iran. Del Pino, the delegates said. ahead of the cartel’s scheduled
OPEC officials say a new On Sunday, their Nigerian gathering in June in Vienna.
idea has been discussed in re- counterpart, Emmanuel Ibe The fall in oil prices has
cent days: a production Kachiwku, also will be in Qatar, devastated the economy in
“freeze,” requiring members which holds the OPEC’s cere- Venezuela, Nigeria and other
and Russia to not pump more monial presidency this year. oil producers. Russia’s econ-
than they are now. That would Nigeria and Venezuela have omy also is starting to strain,
allow Iran to continue pump- been strong advocates for as oil-dependent government
ing at its current rate, while OPEC to initiate a production revenues plummet.
Russia wouldn’t have to cut in coordination with other It isn’t clear that Russia
change much as its production large producers, such as Rus- would be willing to pull back
is projected to be flat this year. sia, in hopes that it would production. Igor Sechin, an ally
An OPEC official with a Per- bring supply back into balance of Russian President Vladimir
sian Gulf Arab country said with demand and boost prices. Putin and president of the
Monday that Saudi Arabia’s OPEC officials have said country’s largest oil company,
position remained essentially Saudi Arabia would be closely state-run OAO Rosneft, dis-
unchanged. watching Iran’s return to the missed talk of a coordinated
Saudi Arabia has resisted market before deciding production cut last week.
the idea of OPEC resuming its whether a production cut is Russia’s representative to
traditional role of pulling back wise. The first shipments of OPEC said Monday that his
production during price down- Iranian crude to Europe on country isn’t in talks with
turns, arguing behind the Monday appeared to be a cata- OPEC on potential cuts to oil
scenes that such a move would lyst for beginning discussion. output but is talking with
only benefit rivals that con- “Iran’s first exports to Eu- some of the group’s members,
tinue to pump full blast. Saudi rope have changed every- mostly through Venezuela.
Arabia has said it would need thing,” an OPEC delegate said. “Dialogue is taking place
cooperation from other major Saudi Arabia would con- with certain member countries
producers such as Iran and sider joining a cut if Russia of the organization, mostly
Russia, which has a spotty re- and other non-OPEC producers through Venezuela,” Vladimir
cord of following through on come along, but it won’t initi- Voronkov said Monday, Inter-
promised cuts. ate talks, OPEC delegates have fax reported.
“Even if it is a production- said. If Algeria or Venezuela —James Marson
freeze agreement Iran will organizes the effort and pres- 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
C4 | Tuesday, February 16, 2016 THE WALL STREET JOURNAL.

MARKETS DIGEST CLOSED-END FUNDS

52 wk
Dow Jones Industrial Average S&P 500 Index Listed are the 300 largest closed-end funds as
measured by assets.
Closed-end funds sell a limited number of shares and
Prem Ttl
Last Year ago Last Year ago Fund (SYM) NAV Close /Disc Ret
invest the proceeds in securities. Unlike open-end
15973.84 t 231.13, or 1.43% last week Trailing P/E ratio * 16.78 16.96 1864.78 t 15.27, or 0.81% last week Trailing P/E ratio * 20.58 20.44 funds, closed-ends generally do not buy their shares
back from investors who wish to cash in their holdings.
Gabelli Hlthcr & Well GRX 10.82 9.02 -16.6 -12.4
P/E estimate * 14.59 16.73 P/E estimate * 15.25 17.45 Gabelli Utility Tr GUT 5.15 5.54 +7.6 -12.8
High, low, open and close for each of High, low, open and close for each of Instead, fund shares trade on a stock exchange.
a-The NAV and market price are ex dividend. b-The GAMCOGlblGoldNatRscs&Inc GGN 5.50 4.63 -15.8 -29.2
the past 52 weeks Dividend yield 2.79 2.45 the past 52 weeks Dividend yield 2.39 1.96 NAV is fully diluted. c-NAV is as of Thursday’s close. d- GoldmanSachsMLPIncOpp GMZ 5.97 5.69 -4.7 -66.2
NAV is as of Wednesday’s close. e-NAV assumes rights
All-time high 18312.39, 05/19/15 All-time high: 2130.82, 05/21/15 offering is fully subscribed. f-Rights offering in process. Goldman Sachs MLPEnergy GER 3.97 4.10 +3.3 -71.3
g-Rights offering announced. h-Lipper data has been John Hancock Finl Opps Fd BTO 22.56 20.80 -7.8 -3.6
adjusted for rights offering. j-Rights offering has KayneAndersonEngyTRFd KYE 6.01 5.92 -1.5 -74.5
expired, but Lipper data not yet adjusted. l-NAV as of
Current divisor 0.14602128057775 65-day moving average previous day. o-Tender offer in process. v-NAV is Kayne Anderson MLP Invt KYN 11.84 12.02 +1.5 -63.6
18500 2150 converted at the commercial Rand rate. w-Convertible Kayne Andrsn Midstr Engy KMF 7.86 8.26 +5.1 -71.3
Note-NAV (not market) conversion value. y-NAV and
200-day moving average market price are in Canadian dollars. NA signifies that Macquarie Glbl Infrstrctr MGU 20.99 17.08 -18.6 -29.3
the information is not available or not applicable. NS NeubergerBermanMLPIncm NML 5.36 5.72 +6.7 -65.2
18000 2100 signifies fund not in existence of entire period. Neubrgr Brm Rl Est Sec Fd NRO 4.92 4.24 -13.8 -16.5
12 month yield is computed by dividing income
dividends paid (during the previous twelve months for Nuveen Dow 30 Dynamic DIAX 14.75 12.86 -12.8 -11.7
periods ending at month-end or during the previous NuvDivInco JDD 11.36 9.36 -17.6 -16.0
17500 2050 fifty-two weeks for periods ending at any time other
Nuveen Engy MLP Fd JMF 7.09 6.78 -4.4 -60.5
than month-end) by the latest month-end market price
adjusted for capital gains distributions. NuvNASDAQ100DynOver QQQX 17.90 NA NA NA
Source: Lipper Nuveen Real Estate Fd JRS 10.44 9.22 -11.7 -14.6
17000 2000 Friday, February 12, 2016 NuveenS&P500Buy-Write BXMX 12.57 11.61 -7.6 -4.9
52 wk Reaves Utility Fund UTG 26.31 NA -10.1
200-day moving average Prem Ttl Tekla Hlthcr Investors HQH 24.11 21.76 -9.7 -29.0
Week's high Fund (SYM) NAV Close /Disc Ret
16500 1950 Tekla Healthcare Opps Fd THQ 16.58 13.96 -15.8 -24.2
DOWN UP General Equity Funds Tekla Life Sciences HQL 18.16 16.36 -9.9 -33.4
t

Monday's open Friday's close Adams Divers Equity Fd ADX 13.61 11.30 -17.0 -13.7 Tekla World Hlthcr Fd THW 15.16 12.36 -18.5 NS
16000 1900 Boulder Grwth & Inco BIF 6.87 NA -20.4 Tortoise Energy TYG 20.55 20.69 +0.7 -50.1
Friday's close Monday's open Central Securities CET 21.82 16.75 -23.2 -15.4 Tortoise MLP Fund NTG 14.03 13.29 -5.3 -44.8
t

CohSteer Opprtnty Fd FOF 11.22 9.92 -11.6 -18.1 Voya Gl Equity Div IGD 7.24 6.12 -15.5 -17.8
65-day moving average Cornerstone Strategic CLM 13.00 12.61 -3.0 -24.2 Income Preferred Stock Funds
Week's low 15500 1850 EtnVnc TaxAdvDiv EVT 19.31 17.04 -11.8 -11.5 Calamos Strat Fd CSQ 9.77 8.31 -14.9 -20.1
Gabelli Dividend & Incm GDV 18.75 15.84 -15.5 -21.5 Cohen & Steers Dur Pfd LDP 23.06 21.82 -5.4 -1.0
Bars measure the point change from Monday's open Gabelli Equity Trust GAB 5.16 4.66 -9.7 -20.6 Cohen & Strs Sel Prf Inco PSF 24.91 23.78 -4.5 -3.3
15000 1800 Genl American Investors GAM 33.73 27.28 -19.1 -19.8 FT Interm Duration Pfd FPF 21.58 20.34 -5.7 -0.6
F M A M J J A S O N D J F F M A M J J A S O N D J F HnckJohn TxAdv HTD 22.81 19.92 -12.7 -0.8 Flaherty & Crumrine Dyn DFP 22.39 22.19 -0.9 2.2
Liberty All-Star Equity USA 5.25 4.37 -16.8 -18.0 Flaherty & Crumrine Pfd FFC 17.68 18.97 +7.3 -0.3
Primary Royce Micro-Cap RMT 7.47 6.12 -18.1 -25.4 John Hancock Pfd Income HPI 20.44 19.81 -3.1 3.0
NYSE weekly volume, in billions of shares market Composite
t
t

Financial Flashback Royce Value Trust RVT 12.15 9.99 -17.8 -23.8 John Hancock Pfd II HPF 20.18 19.02 -5.7 -2.1
John Hancock Pfd Inc III HPS 17.84 17.41 -2.4 3.1
30 Source Capital SOR 70.69 64.53 -8.7 -3.0
20 The Wall Street Journal, February 16, 1989 Tri-Continental TY 21.44 17.91 -16.5 -14.6 JHancock Pr Div PDT 14.76 13.58 -8.0 3.6
Zweig Fund ZF 13.01 11.25 -13.5 -22.0 LMP Cap & Inco Fd SCD 12.57 10.29 -18.1 -34.2
10 Church’s Fried Chicken Inc. said it agreed to be acquired Nuveen Preferred & Incm JPI 22.42 22.26 -0.7 4.3
Specialized Equity Funds
0 by Popeyes Famous Fried Chicken & Biscuits, for $11 a Adams Natural Rscs Fd PEO 19.13 15.96 -16.6 -31.5 Nuveen Preferred Inc Opp JPC 9.39 8.84 -5.9 1.0
F M A M J J A S O N D J F share in cash and stock, or about $392 million. AllnzGI NFJ Div Interest NFJ 13.28 10.89 -18.0 -25.5 Nuveen Quality pf JTP 8.24 7.94 -3.6 0.9
* P/E data based on as-reported earnings from Birinyi Associates Inc. AlpnGlblPrProp AWP 5.74 4.69 -18.3 -24.1 Nuveen Fd2 JPS 8.75 8.59 -1.8 0.2
BlkRk Enh Cap Inco CII 13.33 11.97 -10.2 -11.8 TCW Strategic Income Fund TSI 5.13 NA -1.6
BlkRk Engy Res Tr BGR 12.83 11.38 -11.3 -44.5 Zweig Total Return ZTR 12.54 10.90 -13.1 -15.5
Major U.S. Stock-Market Indexes Nasdaq Composite BlackRock Enh Eq Div Tr BDJ 7.95 6.86 -13.7 -9.6 Convertible Sec's. Funds
AdvntClymrFd AVK 13.96 11.30 -19.1 -28.5
Latest Week 52-Week % chg t 25.63, or -0.59% Blackrock Global Trust BOE 12.39 10.65 -14.0 -14.1
AllianzGI Conv & Incm NCV 5.18 4.51 -12.9 -42.4
High Low Close Net chg % chg Low Close (l) High % chg YTD 3-yr. ann.
BlkRk Health Sci BME 30.89 32.13 +4.0 -4.7
Dow Jones
last week BlkRk Intl Grwth&Inco BGY 6.07 5.40 -11.0 -16.7 AllianzGI Conv & Incm II NCZ 4.60 4.08 -11.3 -45.4
BlackRck Rscs Comm Str Tr BCX 7.78 6.38 -18.0 -30.2 AllianzGI Equity & Conv NIE 19.14 16.32 -14.7 -13.0
Industrial Average 16201.89 15503.01 15973.84 -231.13 -1.43 15660.18 l 18312.39 -11.4 -8.3 4.4 BlackRock Science & Tech BST 16.71 14.08 -15.7 -17.6 Calamos Conv Hi Inco Fd CHY 10.06 8.87 -11.8 -31.9
Transportation Avg 7100.31 6791.39 7048.69 105.87 1.52 6625.53 l 9178.48 -22.0 -6.1 6.1 BlackRock Utility & Infr BUI 18.49 16.92 -8.5 -9.0 Calamos CHI 9.51 8.27 -13.0 -30.2
4425 CBREClarionGlblRlEstIncm IGR 8.20 6.81 -17.0 -20.1 World Equity Funds
Utility Average 629.68 606.14 610.87 -13.75 -2.20 541.97 l 626.77 2.9 5.7 8.6 Alpine Tot Dyn Div AOD 8.10 6.65 -17.9 -17.4
Central Fund of Canada CEF 12.99 12.12 -6.7 -3.5
Total Stock Market 19206.54 18473.24 19029.42 -197.76 -1.03 18663.11 l 22287.78 -13.0 -9.8 6.2 Central GoldTrust GTU NA NA NA Calamos Glbl Dyn Inc CHW 7.19 6.03 -16.2 -24.8
Barron's 400 460.43 441.63 455.95 -4.61 -1.00 446.15 l 586.75 -18.0 -11.7 4.8 4350 ClearBridge Amer Engy CBA 5.37 5.14 -4.3 -66.3 Cdn Genl Inv CGI 16.00 NA -16.3
ClearBridge Engy MLP Fd CEM 10.56 NA -56.9 China Fund CHN 14.80 12.85 -13.2 -24.9
Nasdaq Stock Market Clearbridge Engy MLP Opp EMO 7.92 7.29 -8.0 -64.2 Clough Glbl Eqty Fd GLQ 12.35 10.25 -17.0 -23.8
4275 Clearbridge Engy MLP TR CTR 7.73 7.43 -3.9 -61.9 Clough Global Opp Fd GLO 10.87 9.00 -17.2 -19.5
Nasdaq Composite 4369.62 4209.76 4337.51 -25.63 -0.59 4266.84 l 5218.86 -11.4 -13.4 10.8 EtnVncTxAdvGblDiv ETG 14.81 13.05 -11.9 -15.2
Cohen & Steers Infra UTF 20.98 17.24 -17.8 -18.9
Nasdaq 100 4045.48 3888.78 4019.19 -5.28 -0.13 3947.80 l 4719.05 -8.3 -12.5 13.3 C&S MLP Incm & Engy Opp MIE 6.45 5.77 -10.5 -67.7 EatonVance TxAdv Opport ETO 20.09 18.48 -8.0 -16.7
4200 Cohen & Steers Qual Inc RQI 12.06 10.56 -12.4 -7.2 First Trust Dynamic Eur FDEU 16.56 14.26 -13.9 NS
Standard & Poor's 5 8 9 10 11 12 CohnStrsPfdInco RNP 19.73 16.42 -16.8 -8.4 Gabelli Glbl Multimedia GGT 7.38 6.32 -14.4 -28.3
500 Index 1881.60 1810.10 1864.78 -15.27 -0.81 1829.08 l 2130.82 -11.1 -8.8 7.1 February Cohen & Steers TR RFI 12.44 11.24 -9.6 -8.4 GDL Fund GDL 11.72 9.67 -17.5 0.1
CLSeligmn Prem Tech Gr Fd STK 14.61 15.82 +8.3 -2.6 India Fund IFN 22.97 19.80 -13.8 -26.5
MidCap 400 1276.35 1229.10 1261.89 -17.43 -1.36 1238.82 l 1549.44 -16.0 -9.8 4.3 DJ US TSM Japan Sml Cap JOF 9.86 8.53 -13.5 -0.5
Divers Real Asset Incm Fd DRA 16.60 13.78 -17.0 -14.1
SmallCap 600 607.43 581.78 598.52 -6.64 -1.10 588.26 l 742.13 -15.2 -10.9 5.2 t 197.76, or -1.03% Duff & Phelps DNP 8.24 9.30 +12.9 -3.2 Mexico Fund MXF 17.07 14.99 -12.2 -25.7
Duff&PhelpsGblUtilIncFd DPG 15.52 12.64 -18.6 -33.6 MS China a Shr Fd CAF 19.00 14.60 -23.2 -23.6
Other Indexes last week Eaton Vance Eqty Inco Fd EOI 12.57 12.24 -2.6 -5.7 MS India Invest IIF 25.21 21.74 -13.8 -24.5
Russell 2000 983.45 943.10 971.99 -13.63 -1.38 953.72 l 1295.8 -20.5 -14.4 1.9 Eaton Vance Eqty Inco II EOS 12.47 11.63 -6.7 -11.4 New Germany Fund GF 13.98 12.37 -11.5 -8.8
EtnVncRskMngd ETJ 10.22 9.25 -9.5 -5.4 Swiss Helvetia Fund SWZ 11.03 9.58 -13.1 -9.6
NYSE Composite 9315.96 8944.05 9229.68 -160.65 -1.71 9029.88 l 11239.66 -16.4 -9.0 1.0 Templeton Dragon TDF 17.75 14.81 -16.6 -15.4
Etn Vnc Tax Mgd Buy-Write ETB 14.40 14.32 -0.6 -3.2
Value Line 400.33 379.79 392.00 -8.33 -2.08 383.82 l 522.42 -23.4 -12.1 -0.5 19350 Eaton Vance BuyWrite Opp ETV 13.34 13.62 +2.1 1.6 Voya Infr Indls & Matls IDE 13.21 10.96 -17.0 -20.9
NYSE Arca Biotech 2769.03 2575.58 2750.71 7.27 0.26 2642.53 l 4431.87 -26.0 -27.9 18.2 Eaton Vance Tax-Mng Div ETY 10.70 9.82 -8.2 -6.7 Wells Fargo Gl Div Opp EOD 6.48 5.40 -16.7 -21.8
-1.11 l EatonVanceTax-MngdOpp ETW 10.47 9.61 -8.2 -9.7 Prem12 Mo
NYSE Arca Pharma 490.44 473.20 482.68 -5.43 477.25 605.94 -13.4 -10.9 7.1 19050 Fund (SYM) NAV Close /Disc Yld
EtnVncTxMngGlDvEqInc EXG 8.70 7.63 -12.3 -12.3
KBW Bank 61.01 55.99 59.54 -1.84 -2.99 56.51 l 80.41 -17.9 -18.5 2.2 Fiduciary/Clymr Opp Fd FMO 9.51 9.05 -4.8 -58.1 U.S. Mortgage Bond Funds
PHLX§ Gold/Silver 60.76 51.85 60.64 5.34 9.66 38.84 l 77.12 -21.4 33.9 -26.2 FT Energy Inc & Growth Fd FEN 20.05 18.37 -8.4 -44.3 BlackRock Income Trust BKT 7.04 6.50 -7.7 5.8
18750 FstTrEnhEqtIncFd FFA 13.60 11.74 -13.7 -15.8 Brkfld Mortgage Opp Incm BOI 16.46 14.53 -11.7 10.4
PHLX§ Oil Service 142.20 125.30 133.63 -8.18 -5.77 128.61 l 224.32 -34.6 -15.3 -18.5
First Tr Engy Infr Fd FIF 14.89 12.92 -13.2 -40.0 Brookfield TR Fund HTR 24.30 23.85 -1.9 9.8
PHLX§ Semiconductor 578.66 552.26 571.90 -14.35 -2.45 559.18 l 746.08 -18.9 -13.8 10.3 First Tr MLP & Engy Incm FEI 11.54 9.96 -13.7 -47.7 Continued on Page C5
CBOE Volatility 30.90 24.47 25.40 2.02 8.64 11.95 l 40.74 72.9 39.5 26.2 18450
5 8 9 10 11 12

Philadelphia Stock Exchange Sources: SIX Financial Information; WSJ Market Data Group February New to the Market

International Stock Indexes on Monday Public Offerings of Stock

Commodities and Currencies
Monday 52-Week Range YTD
Close
Monday
Net chg %Chg
YTD
% chg
IPOs in the U.S. Market
Region/Country Index Close % chg Low Close High % chg
None expected this week
WSJ Dollar Index 89.40 0.41 0.46 -0.85
World The Global Dow 2102.99 1.59 2047.44 • 2639.52 –10.0
Euro, per dollar 0.8965 0.0080 0.91 -2.64
DJ Global Index 278.22 1.34 272.15 • 341.62 –9.7
Yen, per dollar 114.60 1.35 1.19 -4.73 Lockup Expirations
DJ Global ex U.S. 189.62 2.76 184.52 • 246.68 –9.8 U.K. pound, in dollars 1.44 -0.007 -0.47 -2.04
None expected this week
Global Dow Euro 1776.82 2.49 1699.54 • 2305.98 –12.3
Last Week YTD
DJ TSM Global 2856.45 1.31 2795.15 • 3510.20 –9.8 Close Net chg %Chg % chg
IPO Scorecard
Global ex U.S. 1914.38 2.72 1863.63 • 2482.77 –9.8 DJ Commodity 444.88 4.28 0.97 -1.97
Developed ex U.S. 1897.27 2.89 1843.94 • 2403.18 –10.0 Reuters-Jefferies CRB 160.36 -1.57 -0.97 -9.02 Performance of IPOs, most-recent listed first
Global Small-Cap 3727.79 1.37 3665.30 • 4716.91 –11.6 Crude oil, $ per barrel 29.44 -1.45 -4.69 -20.52
Company SYMBOL
% Chg From
Friday3s Offer 1st-day Company SYMBOL
% Chg From
Friday3s Offer 1st-day
Global Large-Cap 2727.55 1.31 2667.12 • 3337.56 –9.5 Natural gas, $/MMBtu 1.966 -0.097 -4.70 -15.88
Gold, $ per troy oz. 1239.10 81.30 7.02 16.86
IPO date/Offer price close ($) price close IPO date/Offer price close ($) price close
Americas DJ Americas 442.28 0.06 433.35 • 524.44 –9.2
95.97 -1.00 -1.03 -2.76
AveXis 17.80 –11.0 –1.4 Atlassian 20.10 –4.3 –27.6
Brazil Sao Paulo Bovespa 40092.89 0.72 37497.48 • 58051.61 –7.5 U.S. Dollar Index
WSJ Dollar Index 88.99 -0.82 -0.91 -1.31
AVXS Feb. 11/$20.00
–22.8
TEAM Dec. 10/$21.00
8.00 –11.1
Canada S&P/TSX Comp 12381.24 –3.00 11843.11 • 15450.87 –4.8
Euro, per dollar 0.8885 -0.0078 -0.87 -3.51
Proteostasis Thera
PTI Feb. 11/$8.00
6.18 –6.9 Axsome Thera
AXSM Nov. 19/$9.00
–8.5
Mexico IPC All-Share 43205.91 1.86 40265.37 • 45773.31 0.5
Yen, per dollar 113.25 -3.62 -3.10 -5.85 BeiGene 23.98 –0.1 –15.3 Duluth Hldgs 14.99 24.9 9.8
Chile Santiago IPSA 2935.21 0.33 2759.77 • 3359.04 –0.3 U.K. pound, in dollars 1.45 0.0002 0.01 -1.57 BGNE Feb. 3/$24.00 DLTH Nov. 19/$12.00
Europe Stoxx Europe 600 321.76 2.99 303.58 • 414.06 –12.0 52-Week Range Editas Medicine 15.40 –3.8 –15.4 Match Grp 9.82 –18.2 –33.4
Stoxx Europe 50 2722.81 2.68 2566.26 • 3591.47 –12.2 Low Close(l) High % Chg EDIT Feb. 3/$16.00 MTCH Nov. 19/$12.00
Eurozone Euro Stoxx 300.61 3.00 284.92 • 392.35 –12.9 DJ Commodity 420.23 l 584.70 -21.41
Yirendai
YRD Dec. 18/$10.00
3.68 –63.2 –59.6 Mimecast
MIME Nov. 19/$10.00
9.51 –4.9 –5.8
Euro Stoxx 50 2833.87 2.82 2680.35 • 3828.78 –13.3 Reuters-Jefferies CRB 155.01 l 231.77 -30.03
Belgium Bel-20 3298.59 2.96 3130.76 • 3905.71 –10.9 Crude oil, $ per barrel 26.21 l 61.43 -44.22 Sources: WSJ Market Data Group; FactSet Research Systems
France CAC 40 4115.25 3.01 3896.71 • 5268.91 –11.3 Natural gas, $/MMBtu 1.76 l 3.02 -29.89 Other Stock Offerings
Germany DAX 9206.84 2.67 8752.87 • 12374.73 –14.3 Gold, $ per troy oz. 1050.80 l 1247.90 1.03 Secondaries and follow-ons expected this week in the U.S. market
Israel Tel Aviv 1407.27 1.73 1383.34 • 1723.56 –7.9
U.S. Dollar Index 93.23 l 100.20 1.89 Symbol/
Italy FTSE MIB 17041.82 3.19 15773 • 24031 –20.4
WSJ Dollar Index 84.11 l 91.66 4.24 Primary Amount Friday’s
Netherlands AEX 403.96 3.09 382.61 • 509.24 –8.6 Euro, per dollar 0.86 l 0.95 1.20 Expected Issuer/Business exchange ($mil.) price ($) Bookrunner(s)
Spain IBEX 35 8179.20 3.26 7746.3 • 11866.4 –14.3 Yen, per dollar 112.43 l 125.62 -4.67 Feb. 15 Great Basin Scientific GBSN 6.0 0.19 Roth Cptl Ptnrs
Sweden SX All Share 462.14 3.41 435.21 • 564.90 –8.5 U.K. pound, in dollars 1.42 l 1.59 -5.80 Healthcare Nq
Switzerland Swiss Market 7848.33 2.50 7496.62 • 9526.79 –11.0
Real-time U.S. stock Off the Shelf
U.K. FTSE 100 5824.28 2.04 5536.97 • 7103.98 –6.7
Asia-Pacific
Australia
DJ Asia-Pacific TSM 1236.86
S&P/ASX 200 4843.50
3.90
1.64
1190.45
4765.3
•
•
1619.39
5982.7
–11.0
–8.5
WSJ
.COM
quotes are available on
WSJ.com. Track most-
active stocks, new
“Shelf registrations” allow a company to prepare a stock or bond for
sale, without selling the whole issue at once. Corporations sell as
conditions become favorable. Here are the shelf sales, or takedowns,
China Shanghai Composite 2746.20 –0.63 2655.66 • 5166.35 –22.4
highs/lows, mutual over the last week:
Hong Kong Hang Seng 18918.14 3.27 18319.58 • 28442.75 –13.7
funds and ETFs.
India S&P BSE Sensex 23554.12 2.47 22951.83 • 29593.73 –9.8 Issuer/Industry
Takedown date/ Deal value Registration
Registration date ($ mil.) (mil.) Bookrunner(s)
Japan Nikkei Stock Avg 16022.58 7.16 14952.61 • 20868.03 –15.8 Plus, get deeper money-flows data and
Mast Therapeutics Feb. 10 $8.0 $150.0 Roth Cptl Ptnrs
Singapore Straits Times 2607.90 2.68 2532.70 • 3539.95 –9.5 email delivery of key stock-market
Healthcare March 24,315
South Korea Kospi 1862.20 1.47 1829.81 • 2173.41 –5.1 data.
Taiwan Weighted 8066.51 0.04 7410.34 • 9973.12 –3.3 All are available free at Public and Private Borrowing
Source: SIX Financial Information;WSJ Market Data Group WSJMarkets.com
Treasurys
Consumer Rates and Returns to Investor Benchmark Yields and Rates Tuesday, February 16 Thursday, February 18
Auction of 13-week & 26-week bills; Auction of 30-year tips;
U.S. consumer rates Selected rates Treasury yield curve Forex Race announced on Feb. 11; settles on Feb.18 announced on Feb.11; settles on Feb.29
A consumer rate against its 30-year mortgage, Rate Yield to maturity of current bills, Yen, euro vs. dollar; dollar vs. Wednesday, February 17
benchmark over the past year notes and bonds major U.S. trading partners
Bankrate.com avg†: 3.57% Auction of four-week bills;
Pacific Finance Group, LLC 3.25% announced on Feb. 16; settles on Feb.18
5.00% 10%
4.00% Bothell, WA 425-354-5602
t
4.00 5
WSJ Dollar index
s Public and Municipal Finance
30-year fixed-rate American Trust Savings Bank 3.40%
3.00 Deals of $ 150 million or more expected this week
mortgage Dubuque, IA 800-373-1841 3.00 0 Final Total Rating Bookrunner/
2.00 Alpine Mortgage Company 3.50% Sale maturity Issuer ($mil.) Fitch Moody’s S&P Bond Counsel(s)
t 2.00 –5
River Edge, NJ 800-876-5626
10-year Treasury s s Feb. 15 prelim. Florida 1,750.0 N.R. N.R. N.R. BoA Merrill/—
One year ago t
t

note yield 1.00 American National Bank Trust 3.50% 1.00 –10 Yen Euro
Friday Development
Wichita Falls, TX 940-397-2300 Fin
0.00 0.00 –15
M AM J J A S ON D J F BB&T 3.50% 1 3 6 1 2 3 5 710 30
Ashland, KY 2015 2016 Feb. 17 prelim. Massachusetts 182.5 N.R. Aa2 AA Preliminary/
2015 2016 800-226-5228 month(s) years
St College Mintz Levin
Yield/Rate (%) 52-Week Range (%) 3-yr chg maturity Bldg Au Cohn Ferris
Interest rate Last (l)Week ago Low 0 2 4 6 8 High (pct pts) Sources: Ryan ALM; Tullett Prebon; WSJ Market Data Group

Federal-funds rate target 0.25-0.5 0.25-0.5 0.00 l 0.50 0.25 Feb. 17 Dec. 1, 2029 Nevada 290.8 AA+ Aa2 AAA Preliminary/
Prime rate* 3.50 3.50 3.25 l 3.50 0.25
Corporate Borrowing Rates and Yields Sherman &
Spread +/- Treasurys, Howard
Libor, 3-month 0.62 0.62 0.26 l 0.62 0.33
Yield (%) in basis pts, 52-wk Range Total Return
Money market, annual yield 0.27 0.27 0.24 l 0.42 -0.23 Bond total return index Last Wk ago Last Low High 52-wk 3-yr Feb. 18 prelim. Los Angeles 188.3 N.R. Aa1 AAA Preliminary/
Five-year CD, annual yield 1.31 1.32 1.29 l 1.53 ... Metro Trans Kutak Rock
10-yr Treasury, Ryan ALM 1.746 1.846 4.44 3.57
30-year mortgage, fixed† 3.57 3.68 3.57 l 4.22 -0.21 Auth
DJ Corporate 3.398 3.357 -1.05 2.37
15-year mortgage, fixed† 2.85 2.95 2.85 l 3.42 -0.22
Aggregate, Barclays Capital 2.290 2.320 70 42 70 1.36 2.28
Jumbo mortgages, $417,000-plus† 4.22 4.28 4.00 l 4.97 0.05 Feb. 19 prelim. Oregon Health 200.0 N.R. Aa3 AA- J P Morgan
High Yield 100, Merrill Lynch 8.500 7.946 719 374 741 -10.454 -0.411 Science Securities
Five-year adj mortgage (ARM)† 3.27 3.25 3.14 l 3.99 0.21
Fixed-Rate MBS, Barclays 2.400 2.460 27 13 36 2.41 2.70 University LLC/—
New-car loan, 48-month 3.28 3.26 2.71 l 3.33 0.78
Muni Master, Merrill 1.473 1.520 -5 -10 7 4.127 3.088 Source:Thomson Reuters/Ipreo
HELOC, $30,000 4.76 4.76 4.24 l 5.01 -0.19
Bankrate.com rates based on survey of over 4,800 online banks. *Base rate posted by 70% of the nation's largest EMBI Global, J.P. Morgan 6.979 6.825 525 359 538 -0.797 0.134 Corporate Debt
banks.† Excludes closing costs.
Sources: SIX Financial Information; WSJ Market Data Group; Bankrate.com Sources: J.P. Morgan; Ryan ALM; S&P Dow Jones Indices; Barclays Capital; Merrill Lynch None scheduled this week
THE WALL STREET JOURNAL.
Continued from Page C4
Prem12 Mo
Fund (SYM) NAV Close /Disc Yld
Nuveen Mtg Oppy Term Fd JLS 24.44 22.18 -9.2 6.6
Investment Grade Bond Funds
AllianceBrnstn IncoFd ACG NA 7.58 NA 6.4
Blackrock Core Bond Tr BHK 13.81 12.97 -6.1 6.9
BlkRk Credit Alloc Incm BTZ 13.27 11.72 -11.7 7.8
John Hancock Income Secs JHS 14.45 13.53 -6.4 6.5
MFS Inc Tr MIN 4.96 4.53 -8.7 10.0
WstAstClymr InfLnkd Fd WIW 11.96 10.07 -15.8 3.8
WstAssetClymr InflLnk Sec WIA 12.35 10.44 -15.5 3.6
Loan Participation Funds
Apollo Sr Fltg Rate Fd AFT 16.25 13.87 -14.6 8.1
BlackRock FR Incm Strat FRA 13.92 12.00 -13.8 6.3
Blkrk FltRt InTr BGT 13.44 11.72 -12.8 6.2
BlackstoneGSO Strat Cred BGB 14.22 12.32 -13.4 8.9
Blackstone GSO Sr Float BSL 15.15 13.46 -11.2 7.0
Eaton Vance FR Incm Tr EFT 13.58 11.82 -13.0 7.4
EatonVnc SrFltRate EFR 13.18 11.47 -13.0 7.8
1st Tr Sr Fltg Rt Fd II FCT 13.22 11.87 -10.2 7.4
Invesco Credit Opps Fund VTA 11.38 9.71 -14.7 8.8
Invesco Senior Income Tr VVR 4.25 3.69 -13.2 8.3
Nuveen Credit Strt Inc Fd JQC 8.50 7.20 -15.3 7.9
NuvFloatRteInco Fd JFR 10.32 9.11 -11.7 7.3
Nuv Float Rte Opp Fd JRO 10.25 8.83 -13.9 8.0
Nuveen Senior Income Fund NSL 6.17 5.25 -14.9 7.5
Pioneer Floating Rate Tr PHD 11.83 10.21 -13.7 6.7
Voya Prime Rate Trust PPR 5.34 4.61 -13.7 6.9
High Yield Bond Funds
AllianceBernstein Glbl AWF NA 10.42 NA 10.2
Babson Gl Sh Dur Hi Yd BGH 17.07 14.86 -12.9 12.7
BlackRock Corp Hi Yd Fd HYT 10.13 9.22 -9.0 10.3
BlkRk Debt Strat Fd DSU 3.69 3.16 -14.4 8.2
BlackRockDurInco Tr BLW 15.41 13.33 -13.5 8.5
Credit Suisse High Yld DHY 2.19 1.97 -10.0 13.5
DoubleLine Incm Solutions DSL NA 15.09 NA 12.0
Dreyfus Hi Yld Fd DHF 2.97 2.72 -8.4 12.0
Fst Tr Hi Inc Lg/Shrt Fd FSD 15.60 13.28 -14.9 9.0
Guggenheim Strat Opps Fd GOF 16.34 15.10 -7.6 13.5
Ivy High Income Opps Fund IVH 13.00 10.82 -16.8 13.8
NexPoint Credit Strat Fd NHF 21.12 17.56 -16.9 47.9
Nuveen Gl Hi Incm Fd JGH 14.12 12.12 -14.2 12.4
Nuveen High Incm Dec18 JHA 9.13 9.90 +8.4 NS
Pioneer High Income Trust PHT 8.72 8.64 -0.9 14.7
Prud Gl Shrt Dur Hi Yd GHY 15.67 13.57 -13.4 10.1
Prudentl Sh Dur Hi Yd Fd ISD 16.00 14.45 -9.7 9.6
Wells Fargo Incm Opps Fd EAD 7.69 6.68 -13.1 11.5
Wstrn Asset Glbl Hi Inco EHI 9.42 7.86 -16.6 13.9
Wstrn Asset High Inco II HIX 6.34 5.76 -9.1 13.7
Wstrn Asset Opp Fd HIO 4.86 4.38 -9.9 9.5
West Asst HY Def Opp Fd HYI 14.44 13.13 -9.1 9.8
Cash Prices | WSJ.com/commodities
These prices reflect buying and selling of a variety of actual or “physical”
commodities in the marketplace—separate from the futures price on an
exchange, which reflects what the commodity might be worth in future months.
Monday
Metals
Gold, per troy oz
LBMA Gold Price AM *1239.50
LBMA Gold Price PM *1239.75
Silver, troy oz.
LBMA spot price £10.5540

CLOSED-END FUNDS
Prem12 Mo
Fund (SYM) NAV Close /Disc Yld
Other Domestic Taxable Bond Funds
Ares Dynamic Credit Alloc ARDC NA 12.17 NA 11.0
Babson Cap Corp Inv MCI NA 16.39 NA 7.3
BlackRock Multi-Sector IT BIT 17.17 14.81 -13.7 9.6
BlackRock Taxable Mun Bd BBN 23.12 22.35 -3.3 7.0
Doubleline Oppor Credit DBL NA 25.93 NA 10.0
Duff & Phelps Utl & Cp Bd DUC 10.01 9.28 -7.3 6.4
EtnVncLtdFd EVV NA 11.75 NA 9.9
Franklin Ltd Duration IT FTF NA 10.37 NA 6.9
GuggenhBondMnegDurTr GBAB 22.94 21.71 -5.4 7.7
KKR Income Opps Fund KIO 14.55 12.31 -15.4 11.4
MFS Charter MCR 8.61 7.50 -12.9 9.1
MFS Multimkt MMT 6.21 5.31 -14.5 9.2
Nuveen Build Am Bd Fd NBB 21.69 20.61 -5.0 6.5
PIMCO Corporate & Incm PTY NA 12.17 NA 12.1
PIMCO Corporate & Incm PCN NA 12.88 NA 10.1
PIMCO HiInco PHK NA 7.51 NA 17.4
PIMCO Inco Str Fd PFL NA 8.90 NA 11.6
PIMCO Incm Strategy Fd II PFN NA 8.08 NA 12.2
Putnam Mas Inco PIM 4.58 4.11 -10.3 7.2
Putnam Premier Income Tr PPT 5.03 4.47 -11.1 6.6
Wells Fargo Multi-Sector ERC 12.57 10.85 -13.7 10.5
World Income Funds
Abeerden Asia-Pacific FAX NA 4.50 NA 6.6
Etn Vnc Short Dur Fd EVG NA 12.70 NA 8.2
Legg Mason BW Glbl Incm BWG 13.21 10.93 -17.3 17.3
MS EmMktDomDebt EDD 8.15 6.67 -18.2 12.8
PIMCO Dynamic Credit Incm PCI NA 16.81 NA 12.2
PIMCODynamicIncomeFund PDI NA 25.08 NA 15.1
PIMCO Income Opportunity PKO NA 19.40 NA 10.9
PIMCO Strat Income Fund RCS NA 8.17 NA 11.6
Templeton Emerging TEI 10.92 9.11 -16.6 8.4
Templeton Global GIM 6.82 5.87 -13.9 4.7
Wstrn Asset Emerg Mkts ESD 15.87 13.00 -18.1 9.8
Wstrn Asset Emerg Mkt II EMD 11.39 9.21 -19.1 9.0
Wstrn Asset Gl Def Opp Fd GDO 17.10 15.51 -9.3 8.6
National Muni Bond Funds
AllianceBrnstn NtlMun AFB 15.50 14.05 -9.4 5.6
Blackrock Invest BKN 16.58 15.64 -5.7 5.8
BlackRock Municipal Trust BFK 15.07 14.95 -0.8 6.0
BlackRockMuni BLE 15.70 15.48 -1.4 6.1
BlackRockMuni Tr BYM 15.80 14.98 -5.2 5.8
Blackrock Mun Target Term BTT 24.46 22.26 -9.0 4.3
BlkRk MuniAssets Fd MUA 14.29 14.27 -0.1 5.1
BlkRk Munienhanced MEN 12.48 12.27 -1.7 5.8
BlkRk MuniHldgs Inv MFL 15.67 14.83 -5.4 5.7
BlkRk MuniHldgs Qlty II MUE 14.87 13.76 -7.5 5.9
BlkRk MuniVest MVF 10.24 10.46 +2.1 6.2
BlkRk MuniVest II MVT 16.13 16.69 +3.5 6.0
BlkRk MuniYield MYD 15.50 15.24 -1.7 6.1
BlkRk MuniYld Quality MQY 16.41 16.01 -2.4 5.9
BlkRk MuniYld Qlty II MQT 14.39 13.65 -5.1 6.1
Monday, Feb. 15, 2016
Monday
Tin,NA solder-d 948.430
Zinc,NA-d 84.589
Fibers and Textiles
Cotlook 'A' Index-t *65.70
Tuesday, February 16, 2016 | C5
MONEY & INVESTING
Prem12 Mo 52 wk
Fund (SYM) NAV Close /Disc Yld Prem Ttl
Relational Investors
BlRkMunyldQltyIII MYI 15.16 14.91 -1.6 5.9 Fund (SYM) NAV Close /Disc Ret
Deutsche Mun Income Tr KTF 13.65 13.92 +2.0 6.0 General Equity Funds
Dreyfus Mun Bd Infr Fd DMB 14.17 12.77 -9.9 5.8 Specialized Equity Funds
Dreyfus Strat Muni Bond DSM 8.73 8.36 -4.2 6.0 Corsair Opportunity:A 8.52 NA NA NS
Closes Out Portfolio
Dreyfus Strategic Munis LEO 8.99 8.79 -2.2 5.9 Corsair Opportunity:I 8.52 NA NA -16.3
Griffin Inst Access RE:A 26.20 NA NA 6.0
Eaton Vance Mun Bd Fd EIM 14.37 13.15 -8.5 5.8
Griffin Inst Access RE:C 26.12 NA NA NS
Eaton Vance Mun Income EVN 13.48 14.07 +4.4 6.3
Griffin Inst Access RE:I 26.24 NA NA NS
EV National Municipal Opp EOT 23.04 21.81 -5.3 4.7
Resource RE Div Inc:A 8.96 NA NA -9.5
Invesco Adv Mun Incm II VKI 12.78 12.07 -5.6 6.4 Resource RE Div Inc:C 8.95 NA NA -10.2
Invesco Mun Incm Opps Tr OIA 7.67 7.52 -2.0 5.2
Invesco Mun Opportunity VMO 14.27 13.42 -6.0 6.2
Resource RE Div Inc:D 9.09 NA NA -10.0 BY DAVID BENOIT some executives at the firm
Resource RE Div Inc:I 9.44 NA NA -9.97
Invesco Municipal Trust VKQ 14.20 13.03 -8.2 6.2 Resource RE Div Inc:T 8.93 NA NA -10.4 planned to begin a new fund,
Invesco Qlty Mun Inco IQI 14.17 12.99 -8.3 5.9 Ralph Whitworth’s Rela- potentially under the Rela-
Resource RE Div Inc:U 8.96 NA NA -9.5
Invesco Inv Grade Muni VGM 14.71 13.59 -7.6 6.4 Resource RE Div Inc:W 9.09 NA NA -10.0
Invesco Value Mun Incm Tr IIM 16.87 16.98 +0.7 4.9
tional Investors LLC closed tional name. The executives
SharesPost 100 24.90 NA NA -0.8
MainStay DefinedTerm MMD 19.89 19.14 -3.8 6.1 Versus Cap MMgr RE Inc:F 26.54 NA NA 5.9 out its portfolio in December, had hoped to transfer some
MFS Munl Inco MFM 7.52 7.05 -6.3 5.7 Versus Cap MMgr RE Inc:I 26.59 NA NA 6.2 marking the end of a firm that legacy Relational stakes, in-
NuvAMTFreeMuniIncm NEA 15.31 14.04 -8.3 5.6 Income Preferred Stock Funds was a pioneer in activist in- cluding in what were then H-P
NuvDivAdvMuniIncm NVG 16.53 14.88 -10.0 5.0 CLA Strategic Alloc XSAFX NA NA NA NS
Nuveen Div Fnd NAD 15.96 14.60 -8.5 5.9 Convertible Sec's. Funds vesting and once had $6 billion and industrial company SPX
Nuveen Div Fnd 2 NXZ 16.29 14.59 -10.4 5.5 Calmos Dyn Conv and Inc CCD 17.48 15.26 -12.7 NS in assets. Corp., to the new fund, the
Nuveen Div Adv NZF 16.28 14.63 -10.1 5.4 World Equity Funds
BMO LGM Front ME 7.60 NA NA -15.1
A securities filing late Fri- people said then. But no such
Nuveen Enhncd Mun Val Fd NEV 15.76 15.78 +0.1 6.0
Nuveen Intermed Dur Mun NID 13.96 13.08 -6.3 5.2 Prem12 Mo day disclosed that the firm has
Fund (SYM) NAV Close /Disc Yld no stock positions and stopped
Nuveen Invest Qual Muni NQM 16.43 15.69 -4.5 6.1
NuveenMuniAdvantageFd NMA 15.77 14.16 -10.2 5.6 U.S. Mortgage Bond Funds all trading as of Dec. 18.
The move brings to
Vertical Capital Income 12.16 NA NA 3.4
NuveenMuniIncoOpp Fd NMZ 13.73 13.86 +0.9 6.5
Nuveen Muni Mkt Opp NMO 15.69 14.10 -10.1 5.5 Loan Participation Funds
San Diego-based Relational, an end a firm that
which was founded in 1996
10.24 NA NA 3.0
Nuveen Mun Opportunity Fd NIO 15.98 14.62 -8.5 5.9
Nuveen Muni Value Fund NUV 10.41 10.25 -1.5 3.8
504 Fund
Invesco Sr Loan A 5.76 NA NA 6.3 and sparked change at compa-
was once a pioneer
5.76 NA NA 6.3
Nuveen Performance Plus NPP 16.66 15.33 -8.0 5.8
Nuveen Premium Inco Muni NPI 15.82 14.21 -10.2 5.7
Invesco Sr Loan B
Invesco Sr Loan C 5.77 NA NA 5.5
nies including Hewlett-Pack- in activist investing.
Invesco Sr Loan IB 5.77 NA NA 6.6 ard Co. and Home Depot Inc.,
Nuveen Prem Inco Muni 2 NPM 15.85 14.51 -8.5 5.9
Nuveen Prem Inco Muni 4 NPT 14.73 13.65 -7.3 5.9 Invesco Sr Loan IC 5.77 NA NA 6.4 had been winding down oper-
Invesco Sr Loan Y 5.77 NA NA 6.6
Nuveen Premier Muni Inc NPF 15.54 13.90 -10.6 5.8
Voya Senior Income:A 11.87 NA NA 5.7 ations since 2014. That July, firm has been started, a per-
Nuveen Quality Income NQU 16.22 14.50 -10.6 5.7
Voya Senior Income:B 11.81 NA NA 5.2 the firm said Mr. Whitworth, son familiar with the matter
Nuveen Quality Muni Fund NQI 15.57 13.94 -10.5 4.9 Voya Senior Income:C 11.85 NA NA 5.2
Nuveen Select Quality NQS 16.07 14.40 -10.4 5.5 its co-founder and public said Friday.
Voya Senior Income:I 11.83 NA NA 6.0
Nuveen Sel TF NXQ 14.86 13.86 -6.7 3.8 Voya Senior Income:W 11.87 NA NA 6.0 face, was taking an indefinite Relational had holdings in
PIMCO MuniFd PMF 13.48 15.35 +13.9 6.3 High Yield Bond Funds leave. That came after he about 20 companies in 2014.
Pimco Muni Inc II PML 12.57 13.02 +3.6 6.0 WA Middle Mkt Inc WMF NA NA NA 13.6
PIMCO Muni Inc III PMX 11.34 11.77 +3.8 6.2 learned his throat cancer had Most of the stakes were
Other Domestic Taxable Bond Funds
Pioneer Mun Hi Inc Adv Tr MAV 12.65 13.44 +6.2 7.2 Capstone Church Capital 17.14 NA NA 1.7 recurred, a person familiar worth between $250 million
Pioneer Mun Hi Incm Tr MHI 13.52 13.39 -1.0 6.6 GL Beyond Income 4.92 NA NA NE with the matter said at the and $500 million and in-
Putnam Tr PMM 8.13 7.40 -9.0 5.8 Palmer Square Opp Income NA NA NA 5.8
PutnamMuniOpportunities PMO 13.67 12.51 -8.5 5.7 Resource Credit Inc:A 9.21 NA NA NS
time. cluded shares in Mondelez
Wstrn Asset Mngd Muni MMU 14.60 14.65 +0.3 5.3 Resource Credit Inc:C 9.19 NA NA NS The Wall Street Journal re- International Inc. and Ho-
WesternAssetMunTrFund MTT 22.78 23.66 +3.9 4.3 Resource Credit Inc:D 9.20 NA NA NS ported in October of that year logic Inc.
Single State Muni Bond Resource Credit Inc:I 9.22 NA NA NS that Relational would wind Before the fund started
BlackRock CA Municipal Tr BFZ 16.14 15.89 -1.5 5.4 Resource Credit Inc:T 9.19 NA NA NS
Resource Credit Inc:U 9.21 NA NA NS down. At the time, people fa- winding down, it had about $6
BlkRk MuniHldgs CA Qlty MUC 16.19 15.04 -7.1 5.3
Resource Credit Inc:W 9.20 NA NA NS
Blkrck MunHl NJ Qlty MUJ 16.20 14.75 -9.0 6.1 miliar with the matter said billion in assets.
BlRk MuHldg NY Qlty MHN 15.33 14.97 -2.3 5.5
BlkRk MuniYld CA Fd MYC 16.65 16.18 -2.8 5.4
BlkRk MuniYld CA Quality MCA 16.45 15.87 -3.5 5.5
BlkRk MuniYld MI Qlty MIY 15.98 14.23 -11.0 6.0
BlRk Muyld NY Qlty MYN 14.70 13.68 -6.9 5.5
ADVERTISEMENT
Eaton Vance CA Mun Bd EVM 13.09 12.59 -3.8 5.4
Invesco CA Value Mun Incm VCV 14.05 13.53 -3.7 5.9
Invesco PA Value Mun Incm VPV 14.61 13.03 -10.8 5.9
Invesco Inv Grade NY Muni VTN 15.41 14.95 -3.0 5.5
Legal Notices
To advertise: 800-366-3975 or WSJ.com/classifieds
Nuveen California AMT NKX 16.28 15.61 -4.1 5.5
Nuveen CA Div Fnd NAC 16.18 15.88 -1.9 5.9
NuveenCA 3 NZH 15.01 14.45 -3.7 5.6 CLASS ACTIONS
Nuveen CA Muni Value NCA 10.61 10.76 +1.4 4.3
NuveenMDPremiumIncome NMY 14.98 12.85 -14.2 5.2
Nuveen MI Quality Income NUM 16.05 13.86 -13.6 5.6
Nuveen NJ Div NXJ 16.01 13.82 -13.7 5.8

   






KEY TO CODES: A=ask; B=bid; BP=country elevator
(U.S.$ equivalent) 15.2600 bids to producers; C=corrected; D=Ryan's Notes; NuvAMTFreeMuniIncm NRK 14.75 13.21 -10.4 5.4 



 
 
 

 
 
  
Other metals E=Manfra,Tordella & Brooks; G=ICE; I=Natural Gas Nuveen NY Div Fnd NAN 15.61 14.24 -8.8 5.5
*957.0 Intelligence; L=livericeindex.com; M=midday; Nuveen Ohio Qual Income NUO 17.33 15.52 -10.4 5.3
LBMA Platinum Price PM
Aluminum, LME, $ per metric ton *1499.0
N=nominal; n.a.=not quoted or not available; Nuveen Pa Investment Qual NQP 15.97 14.19 -11.1 5.8
 

 


 

  

 
 
  

     
 



R=SNL Energy; S=The Steel Index; T=Cotlook Limited;
Antimony-d 2.6000 U=USDA; W=weekly, Z=not quoted. NuveenVAPremiumIncome NPV 14.87 14.06 -5.4 5.0   !""##$%$
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Lead,NA solder-d 113.360 *Data as of 2/12 PIMCO California Muni PCQ 14.75 15.78 +7.0 5.8
Stainless steel scrap,US-d 1560 Source: WSJ Market Data Group PIMCO California Mun II PCK 9.06 10.23 +12.9 6.4
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)  & 
 
,    
 ) ) 
 )    
U.S. 3.50 3.50 3.50 3.25 U.S. 3.50 3.50 3.50 3.25
Commercial paper (AA financial) 

 

  
     

, )
,
 
   
     

Canada 2.70 2.70 2.85 2.70 Canada 2.70 2.70 2.85 2.70    C  &       I            

   
 
Japan 1.475 1.475 1.475 1.475 Japan 1.475 1.475 1.475 1.475 90 days 0.52 0.52 0.64 0.06
C
 


  ?     ,  

Policy Rates Policy Rates Euro commercial paper
0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 30 day n.q. n.q. -0.02 -0.12
Euro zone
Switzerland 0.50 0.50 0.50 0.50
Euro zone
Switzerland 0.50 0.50 0.50 0.50 Two month n.q. n.q. -0.01 -0.09
'

 )   *  )  
,
   ,
    
, 
=  ,   (
Britain 0.50 0.50 0.50 0.50 Britain 0.50 0.50 0.50 0.50 Three month n.q. n.q. 0.01 -0.08  
>    )   

 
, ,
 )     
,   *
,  
Australia 2.00 2.00 2.25 2.00 Australia 2.00 2.00 2.25 2.00 Four month n.q. n.q. 0.02 0.00        (   
  
  
   (     ?
,
Five month n.q. n.q. 0.03 0.01
Overnight repurchase Overnight repurchase Six month n.q. n.q. 0.04 0.02  
   
 

U.S. 0.46 0.48 0.51 0.07 U.S. 0.48 0.44 0.51 0.07

Euro commercial paper

Libor    
 *  )   

 
, ,
      ( 
       

U.S. government rates 0.43050 0.42770 0.43060 0.17100

30 day n.q. n.q. -0.02 -0.12
One month
Three month 0.61820 0.62020 0.62430 0.25620
 
    

    )  
 ) 
>   
   ?
Discount
Two month n.q. n.q. -0.01 -0.09 Six month 0.85785 0.86490 0.87060 0.37835     ( (   
  (      
>      

= 
 =

Three month n.q. n.q. 0.01 -0.08 1.00 1.00 1.00 0.75
Four month n.q. n.q. 0.02 0.00
One year 1.11560 1.12850 1.17800 0.66860  
  
 J  
   
 
  ) 
  (   
Five month n.q. n.q. 0.03 0.01
Federal funds
Euro Libor 
Six month n.q. n.q. 0.04 0.02 Effective rate 0.3900 0.3800 0.4000 0.0600
High 0.5625 0.5625 0.5900 0.3100 One month -0.249 -0.237 -0.004 -0.249
Libor Low 0.3000 0.3500 0.3500 0.0100 Three month -0.202 -0.185 0.026 -0.202 K 
      *  )   

 
, ,
  ' (!  ! 
-0.123 -0.109 0.093 -0.123
One month 0.42925 0.42890 0.43060 0.17100 Bid 0.3600 0.3500 0.5500 0.0300 Six month
%  ) # '

 
   (     ) 
   ) 
 ( (   
0.61820 0.61970 0.62430 0.25620 Offer 0.3800 0.3800 0.5600 0.0500 One year -0.017 unch. 0.225 -0.017
Three month
Six month 0.86360 0.86720 0.87060 0.37835

     ( 
  
    

 ,
     D    (
One year 1.12825 1.13550 1.17800 0.66860
Treasury bill auction Euro interbank offered rate (Euribor)   
   )  ,
   
,
>  
4 weeks 0.265 0.270 0.295 0.000 One month -0.240 -0.234 0.002 -0.240
Euro Libor 13 weeks 0.315 0.350 0.350 0.000 -0.183 -0.167 0.048 -0.183
One month -0.249 -0.240 -0.004 -0.249 26 weeks 0.420 0.465 0.585 0.065
Three month
Six month -0.116 -0.104 0.128 -0.116
'         (
,     
 )        ,

Three month -0.201 -0.188 0.026 -0.202 One year -0.009 -0.002 0.259 -0.009      (      ( (  
           , 

Six month -0.118 -0.115 0.092 -0.123 Secondary market )))       " "L##"ML$"OLH  J       
  
Value 52-Week
One year -0.011 0.000 0.225 -0.017 Fannie Mae Latest Traded High Low  P    J     ( ) 
,   
 
  
 

Euro interbank offered rate (Euribor) 30-year mortgage yields
DTCC GCF Repo Index '
 '
     '
  DF QC %#O#  ?
R HM#%
One month -0.241 -0.235 0.001 -0.241 30 days 3.022 3.222 3.750 2.979
Treasury 0.483 94.150 0.639 0.059
-0.183 -0.169 0.048 -0.183 60 days 3.068 3.255 3.788 2.998
Three month
Six month -0.116 -0.107 0.128 -0.116
MBS 0.508 130.990 0.705 0.075     (     ? (   
 # M  ' & +  ,%& %  )-'
One year -0.008 -0.005 0.258 -0.009 Other short-term rates Open Implied
Settle Change Interest Rate
Week 52-Week
INTERNATIONAL NOTICES BANKRUPTCIES
February 12, 2016 Latest ago high low DTCC GCF Repo Index Futures
Treasury Feb 99.505 unch. 6336 0.495
Call money
  
   
 
Treasury Mar 99.480 0.005 5060 0.520
  

  
  
     

Inflation 2.25 2.25 2.25 2.00 99.485 unch. 1827 0.515

     
    
Treasury Apr  D
Dec. index Chg From (%)



  
 
 

     >
    %& +/
level Nov. '15 Dec. '14   
     

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Notes on data:  
      D
U.S. consumer price index U.S. prime rate is effective December 17, 2015.     ! "##!        
$  !#  #  %%&
All items 236.525 –0.34 0.7 Discount rate is effective December 17, 2015. '
 !#  #( # #         
    
Core 243.779 –0.12 2.1 U.S. prime rate is the base rate on corporate loans posted by at least 70% of the 10 largest U.S. banks; )* )++ ,- .%/   0 #(1 

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 #   $% % & '(  )* +,# -.+/
Other prime rates aren’t directly comparable; lending practices vary widely by location; 23    04 0% 123 4  * %$5*  6( %4 ! ) 0%
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$# 5'+ * 069   %* ' *3 0123  %   )
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Coupon (%) Maturity, in years Latest(l) 0 20 40 60 80 100 120 Previous Month ago Year ago Latest Prev Year ago  &*(4 9 '*> 03 **  6 4 & 0(6#

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0.750 U.S. 2 0.710 l 0.710 0.854 0.645 *! " :# 8 ( #! $%6 (*# # *  4 96(# E6
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2.000 10 1.430 s l 1.418 1.666 1.678 -31.8 -33.0 -37.7 All Rights Reserved.

Source: Tullett Prebon

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
C6 | Tuesday, February 16, 2016
Email: heard@wsj.com
OVERHEARD
“Don’t believe everything
you read,” the saying goes.
Evidently, that applies to fi-
nancial statements.
Four business-school pro-
fessors surveyed nearly 400
chief financial officers on
earnings quality. Their find-
ings, published in the current
edition of Financial Analysts
Journal, are stark: On average,
the CFOs believe 20% of pub-
lic companies “intentionally
misrepresent” earnings using
discretion allowed under gen-
erally accepted accounting
principles. Areas highlighted
that provide the opportunity
for earnings management in-
clude acquisition accounting,
pension accounting and the
use of subsidiaries and off-
balance-sheet entities.
Granted, accounting stan-
dards do allow management
discretion in reporting results.
And while common motiva-
tions for those overstating
earnings include juicing the
stock price, companies that
take liberties with accounting
choices aren’t necessarily flat-
tering earnings. The survey
found as much as one-third
of earnings misrepresentation
could be to revise numbers
lower, perhaps to gain lever-
age with stakeholders such
as employees. Still, this
should give investors pause.
The study doesn’t even
contemplate pro forma re-
porting, which doesn’t con-
form to GAAP. The Wall
Street Journal found in De-
cember that roughly one-
quarter of public companies
used pro forma results in se-
curities filings last year. And
the study found the magni-
tude of the misrepresentation
within GAAP could be as high
as 10 cents on the dollar.
That could easily be the dif-
ference between meeting an-
alyst expectations and miss-
ing them—between reporting
growth or decline.
Better, then, to not skip
the footnotes.
SANDERS
Continued from page C1
even bigger, with nearly $730
billion trading on an average day
last year.
The idea of taxing financial
transactions didn’t originate
with Mr. Sanders. It is often
called a “Robin Hood Tax” or a
“TobinTax,” after Nobel laureate
James Tobin, who proposed
a tax on currency trading in the
1970s. Unlike Mr. Sanders’s pro-
posal, Mr. Tobin’s tax wasn’t pri-
marily aimed at raising revenue.
Rather, the point was to discour-
age speculation that Mr. Tobin
said was destabilizing foreign-ex-
change markets.
Similar taxes have been advo-
cated by many prominent econo-
mists over the years, including
John Maynard Keynes, Joseph
Stiglitz and Lawrence Summers.
At least 40 countries currently
or previously have had financial-
transaction taxes of one sort or
another.
The U.S. imposed a been advocated by
small tax on stock transactions
beginning in 1914 to help raise
funds to fight World War I. Ini-
tially, the tax was set at 0.02%
but later ranged between 0.04%
and 0.06% until its repeal in
1966. New York state and New
York City jointly had a tax on
stock trades until 1981. In fact,
New York state still collects a
stock-transfer tax—and then re-
funds the money collected to the
investors that paid it. So inves-
tors are, in effect, giving Albany
an interest-free loan.
The New York tax was the
subject of a study by Bank of
Canada economist Anna Pomera-
nets and Rutgers University eco-
nomics professor Daniel Weaver.
They found that the tax made
stocks more volatile, depressed
stock prices, widened bid-ask
spreads and made capital more
expensive for businesses. For ex-
ample, when the tax was raised
25% in 1966, bid-ask spreads
widened from 1.76% to 2.05%.
The majority of the academic
research into transaction taxes
has reached similar findings:
Taxes either have no effect on
volatility or they increase volatil-
ity.
Why would markets become
more volatile when financial
transactions are taxed? When an
activity is taxed, people tend to
do less of it. So trading volumes
HEARD ON THE STREET
Debt Dance
Dollar-denominated, nonbank emerging-market corporate bonds outstanding
$1.2 trillion
1.0
0.8
0.6
0.4
0.2
0
2005 ’06 ’07 ’08 ’09
Source: Bank for International Settlements
Emerging-Debt Threat
There has been a major
change in the way companies
in emerging markets borrow
money. Now, the new fund-
ing regimen is getting put to
the test, and nobody is sure
whether it will pass.
That uncertainty is con-
tributing to market turmoil,
which has sent stocks tum-
bling and central banks
scrambling to find ways to
prop up their economies.
The default option for
emerging-market companies
looking to borrow used to be
going to the bank. But after
the 2008 financial crisis,
that got harder. Global
banks, hammered by losses
and facing tighter regulation,
became less willing to lend.
Meanwhile, the Federal Re-
serve and other central
banks launched bond-buying
programs aimed at lowering
long-term rates and pushing
investors into riskier, higher-
yielding assets.
So emerging-market com-
panies turned to the bond
market for more of their
funding. By 2014, bonds
were 17% of emerging-mar-
ket corporate debt outstand-
ing, according to the Inter-
national Monetary Fund, up
from 9% a decade earlier.
Many of these bonds were
issued not in companies’ lo-
cal currencies, but in U.S.
decline—sometimes sharply. An
International Monetary Fund
study found that trading volume
invariably fell when transaction
taxes were imposed.
According to the nonparti-
san Tax Policy Center, a
0.01% tax would reduce volume
by 24% in the first year, with vol-
ume falling even further in the
future. Much of that reduction
would likely come from discour-
aging high-frequency trading and
“unproductive” speculation, ac-
cording to the Tax Policy Center.
What would a tax do to stock
and bond prices? It is impossible
to know for sure, of course. But
because investors value liquidity,
anything that makes buying or
selling more costly tends to push
prices down. When Sweden put
in place a 1% tax on equity trades
in 1983, the result was a 5.3% de-
cline on the Stockholm Stock Ex-
change.
According to the IMF study,
Similar taxes have
many prominent
economists.
the impact on prices would de-
pend on the average holding pe-
riod for a particular asset class.
So stocks that trade frequently
would likely decline the most.
Less frequently traded securities,
like corporate bonds, would be
expected to hold up better.
The economy, too, could suf-
fer. When the European Commis-
sion looked at the issue, it found
that a tax of 0.1% would reduce
gross domestic product by 1.76%
in the long run. That is mainly
because the tax raises the cost of
capital, resulting in less invest-
ment and diminished economic
output.
There are also questions
about how much revenue
the tax would raise. For starters,
anything that makes stock prices
drop sharply reduces how much
the government collects in capi-
tal-gains taxes.
When the Joint Committee on
Taxation looked at an earlier
proposal for a financial-transac-
tion tax, it estimated that around
$35 billion a year would be col-
lected. The Tax Policy Center es-
timates the maximum that could
be collected would be $50 billion
a year.
FINANCIAL ANALYSIS & COMMENTARY
’10 ’11 ’12 ’13 ’14
THE WALL STREET JOURNAL.
dollars. As of the third quar-
ter of 2015, the Bank for In-
ternational Settlements esti-
mates there was about $1.1
trillion in dollar-denomi-
nated bonds issued by non-
bank emerging-market com-
panies outstanding, up from
$509 billion at the end of
2008.
Now, weakness in emerg-
ing-market economies,
crushed commodity prices
and the strong dollar have
made it harder for compa-
nies to repay debt. Having
lived through 2008, inves-
tors are worried about the
potential for spillovers, one
reason bank shares have
been hit. Such fears may be
overdone. The bonds are
held by a large pool of global
investors, so the risks are
more thinly spread than for
loans from big global banks.
Moreover, these investors
aren’t nearly as levered as
banks; nor are they borrow-
ing in the short term to fund
long-term lending. The mis-
match contributed to the ef-
fective run on financial insti-
tutions during the crisis. The
bonds also tend to have long
maturities, so companies
aren’t in immediate trouble.
There is the potential for
other problems, though.
First, while many emerging-
market countries have sub-
MONEY & INVESTING
DISNEY
Continued from page C1
given to Euro Disney manage-
ment, which it says present a
potential conflict of interest.
While employees are granted
stock options in Euro Disney,
its management committee was
in 2014 granted almost €3 mil-
lion ($3.4 million) in stock op-
tions and restricted stock units
in Walt Disney—whose shares
are up around 240% over the
past decade—according to Euro
Disney documentation.
Euro Disney raised money
from outside shareholders
when it went public in 1989 and
has remained a separate com-
pany from Walt Disney, part-
owned by and paying royalties
to the U.S. firm.
Lampooned on cartoon se-
ries “The Simpsons” for a lack
of visitors and financial woes,
Euro Disney has been a disaster
for shareholders since flotation
in 1989, falling around 99%.
Shareholders’ other claims
include alleged misuse of Euro
Disney’s assets and false ac-
counting.
The group is also demanding
the repayment of €930 million
to Euro Disney, in repayment of
“exorbitant” and “abusive” roy-
alties and other fees paid to the
U.S. firm.
There has been “a siphoning
off of money and undervalua-
tion of key assets to enable
them to buy off the minorities,”
said Guy Wyser-Pratte, a
French-born New Yorker and
veteran investor who heads U.S.
firm Wyser-Pratte Management
Co. His firm owns shares in
Euro Disney and is helping fund
the litigation.
CIMA filed a complaint with
the French criminal authorities
last year against Walt Disney
and subsidiaries, alleging mis-
use of corporate assets, filing
false accounts and providing
false information. A spokesman
for the financial prosecutor
said a judicial inquiry had been
opened and would be con-
ducted by one or several inves-
tigating judges.
A civil case against
Walt Disney subsidiaries, de-
manding the repayment of
€930 million to Euro Dis-
ney, was filed to the Commer-
cial Court of Meaux in October.
ANTONIO LACERDA/EUROPEAN PRESSPHOTO AGENCY
’15
Carnival in Rio de Janeiro
stantial dollar reserves, most
don’t have mechanisms for
dealing with debt problems
away from banks. So rather
than engaging in loan work-
outs with banks, they must
deal with economic effects.
That can be costly, ineffi-
cient and lead to problems.
Second, when global in-
vestors are forced to sell
emerging-market debt, they
tend to sell more than they
have to. The BIS found that
for every $100 in outflows
that emerging-market bond-
fund managers experience,
they sell $110 in debt. That
can intensify losses, leading
to further redemptions.
Finally, many emerging-
market companies that bor-
rowed in dollars invested in
local-currency assets. That
was great when economies
were roaring and currencies
were appreciating. Now, this
version of the carry trade is
getting unwound. That has
the potential to stir up even
more trouble for emerging-
market economies and send
the dollar even higher.
Absent unforeseen prob-
lems, those things probably
aren’t enough to cause the
levels of stress global banks
have experienced in past cri-
ses. But they create a new
set of worries for investors.
—Justin Lahart
Plaintiffs say Walt Disney Co. took excessive royalties from Euro Disney, owner of Disneyland Paris.
The Autorite des Marches
Financiers, the French financial
regulator, last year approved
Walt Disney’s offer to purchase
Euro Disney shares. CIMA’s ap-
peal was rejected by the Paris
Court of Appeal in September.
CIMA is now appealing to the
French Supreme Court.
Issues for the hedge funds,
which say they control roughly
3.5% of Euro Disney, came to a
head with the highly complex
recapitalization, which con-
cluded in November.
The plan involved a cash in-
jection of around €420 million,
made or guaranteed by Walt
Disney, and the conversion of
€600 million of debt held by
Walt Disney into Euro Disney
shares.
Walt Disney then offered to
buy out other shareholders, be-
fore letting them buy shares.
As a result, Walt Disney’s stake
in Euro Disney almost doubled,
from 40% to 76.7%, announced
in November.
Rather than being a rescue
plan, this was an attempt by
Walt Disney to buy up more
* * THE WALL STREET JOURNAL.
China Banks Need
Any Help Available
Beware: China has cocos
too. A staggering loss of con-
fidence in banks—especially
in Europe—triggered a global
selloff last week in banks’
contingent convertible
bonds, hybrids known as “co-
cos.” A coco index main-
tained by Bank of America
dived to its lowest level since
it was launched, bringing its
losses this year to 10%.
Among the big issuers of
cocos: Chinese banks. They
were hardly immune to the
selloff, with yields on Bank of
China’s cocos running up al-
most a full percentage point.
Yields rise as prices fall.
Over the past two years,
Chinese banks have sold
more than $60 billion of
these equitylike debt instru-
ments, meant to bolster cash
buffers ahead of regulations
that kick in at the end of
2018. The deals were heavily
oversubscribed by investors,
especially private-bank cli-
ents.
Cocos are essentially a
capital backstop. In time of
distress, when a bank’s capi-
tal cushions shrink, interest
on these bonds stops, inves-
tors lose the right to repay-
ment and the bonds them-
selves could convert into
equity or be written down.
Confidence had been high
that, despite China’s bad-
loan troubles, Beijing would
stand behind its state-owned
banking sector. Investors
drove down the interest rate
on Chinese cocos last year.
But it isn’t hard to imag-
ine a scenario in which Bei-
jing does just the opposite
and turns to these cocos to
shore up capital. The quality
of assets held by Chinese
banks is deteriorating, profit
growth has stalled, nonper-
forming loans are rising and
coverage ratios for problem-
atic loans are falling. Non-
shares, says CIMA.
“The intent of the plan was
to recapitalize the Euro Disney
Group—not to increase” Walt
Disney’s stake, said the Euro
Disney executive, adding that
Walt Disney let other share-
holders keep their stakes.
CIMA says that during the
recapitalization, Euro Disney’s
business outlook was too pessi-
mistic. In January of last year,
the firm said in a statement it
expected annual attendance to
fall by around 2.6 million
guests and earnings to tumble
45% by 2023.
But results were better, say
the funds. In November, it re-
ported a 25% increase in earn-
ings on the previous year and
visitor numbers up by 600,000.
The Euro Disney executive
said the business outlook had
been drawn up a year and a
half ago. The results don’t
“change the fact” the recapital-
ization was “critical” to Euro
Disney, he said.
Another key battle is the
value of approximately 5,510
acres of land near Disneyland
WSJ.com/Heard
performing loans are said to
be 1.6% of total loans, but
that is widely viewed as a
vast understatement.
Moody’s Investors Service
suggests 90-day delinquen-
cies as a cleaner measure.
They are rising steadily.
Chinese banks seem well-
capitalized, with Tier 1 capi-
tal ratios stable at around
11.5% for big banks and 10.1%
for midsize banks. In most
cases, the trouble arises if
this ratio falls below 5.125%.
That triggers compulsory
conversion of the cocos into
shares that are valued at far
less than what the debt was
bought for.
Across the banking sys-
tem, core equity Tier 1 capi-
tal at the end of the third
quarter totaled approxi-
mately $1.6 trillion. But
losses would eat into that
quickly. Hayman Capital’s
Kyle Bass lays out a rather
dire scenario in which Chi-
nese banks write down 10%
of assets, wiping out almost
$3.5 trillion of equity. A
write-down of even a frac-
tion of that size, however,
would put pressure on capi-
tal ratios.
Chinese banks currently
recognize 2% of loans as bad
every year, estimates Sanford
Bernstein’s Wei Hou. Any-
thing beyond 3% to 4% could
start eating into capital buf-
fers, especially with provi-
sioning ratios falling.
Beijing could spare coco
investors by injecting capital
directly into the banks. After
all, tapping cocos alone could
further spook investors
across the capital structure,
a theoretical flaw in cocos
generally. But with such a
large banking system, Beijing
may find tapping cocos while
injecting capital to be a help-
ful way to plug the holes.
—Anjani Trivedi
BERTRAND GUAY/AGENCE FRANCE-PRESS/GETTY IMAGES
Paris, around half of which is
yet to be developed.
Ledouble, an expert firm ap-
pointed by Euro Disney’s super-
visory board during the recapi-
talization, said it concluded
Euro Disney’s total assets were
worth less than the €1.25-a-
share offer price.
A report commissioned by
CIMA estimates the capital gain
from the land rights at €1.9 bil-
lion. This, plus other gains,
means Euro Disney had an as-
set value above €3.7 a share, it
says. The shares trade at €1.26.
Euro Disney disputes this.
“Real estate is a small part of
our business,” said the execu-
tive, adding that real-estate ac-
tivities have on average gener-
ated a margin of €10 million a
year.
The Euro Disney executive
said that “Euro Disney execu-
tives are employees of a Disney
subsidiary and like all execu-
tives of Disney subsidiaries
they receive Disney stock op-
tions.”
—Nick Kostov in Paris
contributed to this article.
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HEALTH & WELLNESS

Vacation Checkup Relearning

How to Swim
A doctor’s appointment at a luxury resort D4 SPORTS | D6

© 2016 Dow Jones & Company. All Rights Reserved. THE WALL STREET JOURNAL. Tuesday, February 16, 2016 | D1

Help for Peanut Allergies Drugs for

Osteoporosis
Controversial treatment
has children eat peanuts to
A Path to PB&J
How Matthew Sullivan, age 12,
Get Support,
get over allergic reactions; a
maintenance diet of M&M’s
overcame his peanut allergy with
oral immunotherapy. With Caveats
May 2004: At 13 months old, BY MELINDA BECK
BY SUMATHI REDDY Matthew develops hives on his
Use of osteoporosis drugs, once
West Hartford, Conn. arms and legs after biting into a advertised with celebrity spokes-
Peanut M&M dispensers stand peanut-butter cracker. women, has dropped by more than
in the waiting room of the New 50% in recent years amid reports
June 2004: An allergist confirms
England Food Allergy Treatment of such serious side effects as sud-
Center. Hundreds of drawings Matthew has an allergy to peanuts. den bone fractures.
plaster the walls, almost all done His parents decide to avoid Yet many experts say the bene-
by children with peanut allergies. exposing him to peanuts, fearing a fits of the drugs, known as bispho-
One shows a picture of a boy hold- possible anaphylactic reaction. sphonates, far outweigh the risks
ing hands with Mr. Peanut. “Now for many users.
we’re friends!” reads the caption. November 2010: At age 7, An analysis in the New England
The children coming to the cen- Matthew begins immunotherapy Journal of Medicine last month es-
ter are openly flouting rules at New England Food Allergy timated that for every
drilled into their heads for most of Treatment Center. He increases HEALTH 1,000 women with os-
their lives: Avoid peanuts and po- JOURNAL teoporosis who were
tentially contaminated products at
his intake of peanut protein treated up to five
all costs. Instead, the children here over several months, suffering years, bisphospho-
eat carefully measured doses of occasional headaches and nates prevented 100 fractures and
peanut protein, usually mixed into stomachaches. caused at most one.
yogurt, pudding or apple sauce, in “Used by the right women, in
a treatment known as oral immu- July 2011: Matthew eats three the right way, they have big ad-
notherapy. The idea is to gradually peanut M&M’s at the clinic, vantages,” says the lead author,
increase the doses to desensitize after two weeks of ingesting the Dennis Black, a University of Cali-
their bodies to peanuts so they no equivalent amount of peanut- fornia, San Francisco epidemiolo-
longer suffer allergic reactions. gist who led the clinical trials for
Immunotherapy is a popular treat-
protein powder. two bisphosphonates, Fosamax and
ment for people with environmen- October 2013: Skin tests continue Reclast. He consults for companies
tal allergies, such as hay fever. But to show Matthew is allergic to that make osteoporosis drugs.
JULIE BIDWELL FOR THE WALL STREET JOURNAL (5)

it is less common, and is a contro- “Bisphosphonates are abso-

versial practice, for treating food
peanuts. But he continues to eat lutely effective,” says Timothy
allergies. three or so peanut M&M’s daily. Bhattacharyya, an orthopedic
“We’ve treated about 750 to January 2016: Tests indicate trauma surgeon and head of osteo-
760 patients so far with a 90 to porosis research at the National
92% success rate,” says Jeffrey Matthew is no longer allergic Institutes of Health.
Factor, founder and medical direc- to peanuts. He passes a food Dr. Bhattacharyya, who doesn’t
tor of the center, which opened in challenge, eating the equivalent of receive financial support from os-
2010. Nearly all the patients, most 46 peanuts in one sitting. teoporosis drugmakers, says, “it
of whom are children, come be- makes sense to wait until you have
cause of peanut allergies. The cen- Feb. 4, 2016: Matthew brings a a diagnosis of osteoporosis, and
ter also has treated about 50 pa- peanut butter and strawberry jelly not take the drugs for more than
tients who have milk, egg or tree- sandwich to school for lunch. five years.”
nut allergies. Some critics say the new analy-
Oral immunotherapy, often sis overestimates the benefits and
called OIT, isn’t approved by the
1 2 underestimates the number of sud-
U.S. Food and Drug Administration den thigh-bone fractures, which
or endorsed by any professional can be coded as regular hip frac-
organization of allergists. Some of tures in medical records.
the country’s leading allergists say Osteoporosis occurs when bone
that, despite promising evidence, breaks down faster than it is re-
more research and regulatory ap- plenished, leaving the skeleton po-
proval are needed. Studies have rous and brittle. Women lose bone
shown about 80% to 85% of pa- rapidly at menopause and are
tients who undergo oral immuno- more susceptible than men. An es-
therapy are successfully desensi- timated 50% of women and 25% of
tized to their allergen. Questions men over age 50 will suffer an os-
remain about its long-term effec- 3 4 teoporosis-related fracture in their
tiveness, and there are concerns lifetime.
some patients could have adverse Bisphosphonates slow the
reactions, these allergists say. breakdown and resorption of bone.
The therapy is a frequent topic But who to treat and for how long
of debate at medical conferences has been contentious for years—
and in academic journals. Many particularly as word of the unusual
academic institutions offer oral fractures has spread.
immunotherapy for food allergies, Hip fractures have dropped by
but only as part of ongoing clinical about 30% since 1995 when Fosa-
trials. Some trials are being spon- max, the first bisphosphonate,
sored by Aimmune Therapeutics, a went on sale in the U.S. Yet the de-
biopharmaceutical company near 1 Tools for dispensing peanut-protein powders at the New England Food Allergy Treatment Center. 2 The powders are cline in hip fractures has contin-
San Francisco that is in Phase 3 measured using a precision balance. 3 Peanut protein is blended with pudding, applesauce or yogurt for patients to eat. ued, even with fewer Americans
Please see ALLERGIES page D4 4 A patient holds a two-week supply of peanut-protein mixture to take home. taking the drugs in recent years.
There are many possible expla-
Please see BONES page D2

Why Are Some People More Ticklish Than Others?

BY HEIDI MITCHELL honestly don’t know why humans are
ticklish.”
Wiggly fingers approaching the arm- Dr. Linden says there is no indica-
pits can elicit giggles from some peo- tion being ticklish is inherited. He has
ple. For others, even a feather caress- seen tickling across every culture, and
ing the toes will bring about no says the behavior is often informed by
response. Scientists are perplexed by social norms, taboos and the setting in
the variability and the origin of the which it takes place. “If someone is re-
tickle response. One neuroscientist, Da- ally angry, you can’t tickle them,” he
vid J. Linden, a professor at Johns Hop- says.
kins University School of Medicine, ex- Most people, he adds, aren’t able to
plains whether the childlike response is tickle themselves. “When you go to
learned or innate and why it is almost tickle yourself, your brain is sending a
impossible to tickle oneself. message to the tickling hand, and a
Some scientists have argued that copy is going to the cerebellum, which
being ticklish is a defensive reflex sends inhibitory signals” to dampen the
against attack, but Dr. sensations, he says. We know this be-
BURNING Linden finds that expla- cause people who have damage to
QUESTION nation wanting. While their cerebellum are able to tickle
some ticklish parts of themselves, says Dr. Linden, author of
ISTOCK

the body would be vul- “Touch: The Science of Hand, Heart and
nerable in battle, others, like the toes Mind,” which explores the interaction
and feet, wouldn’t result in a mortal between sense of touch and our emo- Babies laugh when tickled, suggesting the response is innate. But it can also be learned, says Dr. David J. Linden.
wound if struck, he says. He compares tional responses.
being ticklish to having an itch, which Still, he says, that doesn’t explain about 1% of the nerve endings in your says. proach their tummies and they will gig-
most experts believe evolved as a pro- why “if I’m in a big auditorium, there skin,” he says. But losing nerve endings Dr. Linden expects there are contex- gle before you touch them, which sug-
tective measure against infestation by might be two or three people who say still doesn’t entirely account for dimin- tual or social reasons why most people gests that the response is learned.”
insects or worms. “Itching and tickling they can tickle themselves like crazy.” ished ticklishness, says Dr. Linden, who are less ticklish as they get older. And The tickle response is interrelated to
are similar in that they are both sensa- Science hasn’t fully studied that phe- considers himself moderately ticklish he believes being ticklish is both lots of factors and learned then un-
tions that demand an immediate physi- nomenon, he says. for a middle-aged man. And ticklish- learned and innate. Take children: “We learned over time, Dr. Linden says. And
cal response,” Dr. Linden says. “We can Some people have a stronger giggle ness doesn’t have its own neurons. know that you can tickle a newborn just because you may be approaching
take that as a clue—that perhaps the response than others. This might be “Even if we did a biopsy of the ticklish and he will laugh, which suggests that 40, don’t think your tickle response will
tickle response is some sort of reflex because they have more touch recep- parts of the skin, we would find no the response is innate. But we also evaporate as you blow out the candles,
gone awry.” tors, which we all start to lose at particular cluster of neurons specifically know that when kids are small, you as some experts suggest. “There is
Still, the neuroscientist says, “We about age 20. “Every year you lose identified with the tickle response,” he can just make a silly noise and ap- nothing magical about 40,” he 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
D2 | Tuesday, February 16, 2016 THE WALL STREET JOURNAL.

HEALTH & WELLNESS

Why Learning to Be Resilient Is Good for Your Health

BY LAURA LANDRO ience training. assessment that includes questions cultivating gratitude, including
James Avey, an assistant pro- about lifestyle, such as diet and writing down three things she was
Resilience is often defined as fessor of management at Central exercise, and quality-of-life mea- most grateful for, even mundane
the capacity to adjust to change, Washington University whose re- sures, such as how often partici- things such as getting a good
disruption or difficulty and move search includes work with sales pants missed work due to illness; parking spot. She learned to sepa-
on from negative or traumatic ex- professionals experiencing anxiety results are summarized with a rate home from work with rituals
periences in a positive way. and depression as a result of high 1000-point score. The average like removing her ID and putting
Studies find people with the customer rejection rates, says score for certain lifestyle factors her parking permit away. “Life
most resilience tend to be more coaching is most helpful for people improved by 10 points among isn’t going to get less stressful,”
productive, less likely to have high who are initially low in resilience. coaching participants compared she says. Coaching led her to think
health-care costs and less often “Even making this person nor- with no significant improvement about “how can we bend without
absent from work. Now, some em- mal or average on resilience can for a group that didn’t participate; breaking.”
ployers are offering programs to have an extremely high life im- life and job satisfaction scores im- She liked learning deep-breath-
help employees become more resil- pact,” he says. proved as well. ing exercises and taught some
ient. They are HealthPartners, a Minneapolis Traci Kubisiak, a solutions con- strategies to her daughters to use
THE INFORMED providing webi- nonprofit with seven hospitals, 55 sultant in HealthPartners’ health- when they feel stressed about
PATIENT nars and group primary-care clinics, 1,700 doctors, plan business, says she was in- homework. “It’s a chaotic world
coaching to 22,500 employees and a health Traci Kubisiak, with her husband, Jim, trigued by a flier for coaching in and I want them to be equipped
teach skills and plan serving 1.4 million medical says resilience skills help her ‘bend “Bringing Your Best Self to Work.” with the right skills to be success-
habits that help people stay fo- and dental members,offered emo- without breaking’ under stress. In addition to work and mothering ful,” she says.
cused and functioning during tional resilience group coaching to two daughters, ages 7 and 9, Ms. Co-author Abigail Katz, who
stressful times at work or home. 2,200 headquarters employees in Health & Fitness Journal, research- Kubisiak is a caregiver for her ill does research and analytics for
Many programs in use in the 2013 and 2014, including emo- ers at HealthPartners found that in father and says her life often felt HealthPartners, says even employ-
military, police forces and school tional-resilience training for about a group of employees who partici- like “frenzy.” One day, she was in a ees who are thriving can suddenly
systems are related to a movement 2,000 managers. Other programs pated in three one-hour emotional- meeting when her phone flashed find themselves struggling when a
called Positive Psychology, which for some staffers include online resilience sessions, well-being per- that her father’s nurse was calling, stressor such as family illness
focuses on increasing positive virtual coaching on topics such as sisted at least one year later. and she realized, “I needed the strikes. Such events are linked to
emotions, putting negative emo- positive thinking, stress manage- Karen Lloyd, co-author of the whole concept of resilience.” lost productivity and higher health
tions in perspective and learning ment and healthy sleep. study and senior director of be- The coaching included lessons costs. While employers are inter-
to thrive despite challenges. In a study published in the Jan- havioral health and resilience at in building the habit of being fully ested in cost savings, Dr. Katz says
Royal Dutch Shell says the re- uary/February issue of the Ameri- HealthPartners, says results were present in the moment, putting , they also want to promote “the
silience training it started five can College of Sports Medicine’s measured using an online health some play time into each day and concept of well-being, where em-
years ago and has offered to em- ployees are bringing their whole
ployees in over 50 countries self to work.”
“seems capable of enabling a sus-
tained change that extends beyond
Build Up Your Resilience Anand Shah, a family physician
at HealthPartners, says he once
improved resilience into broader Resilience coaching teaches skills Find a sanctuary. To restore a Take a walk with a co-worker. struggled with feelings of burnout
human performance.” The com- to help people adjust positively to sense of calm and positive energy, Research shows those who have a after working as one of just a few
pany points to data indicating the change or difficulty. Some tips, from move to a quiet location for five friend at the workplace are higher doctors in a small town. After he
positive effects persist up to four HealthPartners: minutes, or imagine you are in a performers and are more satisfied joined HealthPartners, the com-
years. pleasant scene. with their jobs. Even if you have pany sponsored his participation
A recent review of studies led Break the negative self-talk just a half-hour in a week, building a in resilience seminars through the
by researchers at the University of habit. Many people create stress, Smile, listen, ask questions. You relationship is a solid investment of nonprofit Center for Courage &
Nebraska and published in the anger or sadness by saying negative can influence reactions of co-work- time and energy. Renewal. They helped him listen
Journal of Occupational and Orga- phrases to themselves up to 60 ers, which will boost your mood and better to patients and establish
nizational Psychology found resil- times a day. Watch out for these productivity. Work on having a Write down three things you are more-personal connections. He ap-
ience training in the workplace can thoughts and replace them with pleasant facial expression, a warm grateful for every day. If you focus preciated the guidance on main-
help improve employees’ mental factual statements. Instead of “I am tone of voice and relaxed posture. on them every morning, you will set taining balance between life and
health and subjective well-being, so stupid,” think “I made a mistake, Ask questions; listen to the answers. a positive tone for the day. work, and suggestions to find a
and offer wider benefits in social but I can correct it.” —Laura Landro brief “sanctuary” or tranquil space
functioning and performance. during the day to take a breather.
While some people have natural Dr. Shah now leads coaching
coping skills, “we know that resil- sessions for care teams at Health-
FROM THE TOP: TRACI L. KUBISIAK; CORBIS

ience can be developed, and you Partners clinics, on staying “fo-

can give people the resources to cused and resilient” amid the
build within them the power to stress of, say, learning new medi-
bounce back from adversity,” says cal records systems. Sessions are
Fred Luthans, management profes- voluntary, he says, and some doc-
sor emeritus at the University of tors have declined, saying they can
Nebraska who is co-author of “Psy- manage alone. But when doctors,
chological Capital and Beyond,” a nurses and other clinicians work
book about applying positive psy- on resilience as a team, he says,
chology science at work, and who “they can help reinforce each
is developing webinars on resil- other.”

BONES
Continued from the prior page
nations: Fewer Americans
are smoking (which hastens
bone loss); more are exercis-
ing (which helps build bone)
and more are obese (which
helps guard against frac-
tures.)
Prescribing patterns have
also changed. Many doctors
now counsel patients to stop
taking bisphosphonates after
three to five years and re-
evaluate the need.
Many doctors prescribe
the drugs mainly to women
who already have osteoporo-
sis rather than the estimated
30 million postmenopausal
women with “osteopenia,” or
only slightly reduced bone
mass, who were targeted in
early ad campaigns.
“We’re trying to move
away from the word ‘os-
teopenia.’ It isn’t a disease.
It merely tells us that bone
density is in the lower part
of normal range,” says Rob-
ert Lindsay, chief of medi-
cine at Helen Hayes Hospital
in West Haverstraw, N.Y. He
has received lecture fees
from two osteoporosis drug-
makers. “There are an awful
lot of people who fall into
that category who may never
get osteoporosis.”
Many of the women who
suffered sudden thigh frac-
tures were relatively young
and had taken bisphospho-
nates for years for osteope-
nia.
Jennifer Schneider, a Tuc-
son, Ariz., physician, was 59
and had taken bisphospho-
nates for seven years when
her thigh bone snapped on
the subway on a visit to New
York City in 2001. X-rays
showed her femur had bro-
ken just below the hip.
Estimates of how com-
mon these fractures are
range from 1 in 100,000 to 1
in 500 among women who
have used bisphosphonates
for five years or more.
Dr. Schneider published a
study of 81 cases of atypical
femur fractures in 2012. It
found after the first fracture,
40% of the women suffered a
similar break in the other leg
within two years, and 35%
had delayed healing.
Dr. Schneider has formed
a support group of fracture
sufferers and testified before
the Food and Drug Adminis-
tration to ask for stronger
drug warnings. Some doctors
continue to prescribe bispho-
sphonates for too long, she
says.
Another side effect, os-
teonecrosis of the jaw, in
which sections of jaw bone
deteriorate and don’t heal
after dental work, is esti-
mated to occur in fewer than
1 per 10,000 patients taking
bisphosphonates for osteo-
porosis.
Makers of bisphospho-
nates say there is no defini-
tive proof that the drugs
cause either atypical femur
fractures or jaw bone deteri-
oration.
Still, consensus is emerg-
ing among researchers and
bone experts on other
points. Women should have a
baseline bone density scan
at least by age 65, and ear-
lier if they have a strong
family history of osteoporo-
sis and other risk factors. A
score of minus 2.5 indicates
osteoporosis, but treatment
shouldn’t be based on that
alone, doctors now say.
An online tool, known as
FRAX, for Fracture Risk As-
sessment Tool, developed by
the World Health Organiza-
tion, takes into account
other factors such as a pa-
tient’s age, gender, weight,
height, smoking, alcohol con-
sumption and parental hip
fractures. The tool computes
the chances of suffering a
major bone fracture in the
next 10 years.
A Counterintuitive Tale
The use of osteoporosis
medications is declining among
women age 50 and older ...
20%
15
10
5
0 0
2001 ’03 ’05 ’07
Data year ending
Sources: Agency for Healthcare Research and Quality
(medication); National Institutes of Health (fractures)
The National Osteoporo-
sis Foundation says if the
risk is more than 3% for a
hip fracture or 20% for other
major fractures, the advan-
tages of treatment outweigh
the risks.
Bisphosphonates are still
the first line of treatment
for osteoporosis. Other drugs
have different trade-offs. All
the bisphosphonates are now
available in generic form, for
as little as $5 a month.
Newer osteoporosis drugs
retailing for hundreds of dol-
lars or more a month include
Forteo (teriparatide) and
Prolia (denosumab).
Several new drugs are in
development. Many experts
say calcium, vitamin D and
exercise can go a long way
toward strengthening bones.
Pat Sullivan, a 62-year-
old retired teacher in Dela-
ware, Ohio, was told she had
osteopenia six years ago. In-
creasing her calcium and vi-
tamin D intake and exercis-
ing more, she was able to
improve her bone-density
score. She began to be less
diligent and a bone scan two
months ago showed full os-
teoporosis in her spine.
Her doctor wants her to
begin treatment—two years
of Forteo to stimulate bone
growth, then twice-yearly in-
jections of Prolia. But Mrs.
Sullivan is worried about
possible side effects and
plans to see if she can build
her bone back naturally. “By
next year, if my score hasn’t
improved, I’ll seriously look
into the medicine,” she says.
... but the rate of hip fractures is
also declining. Incidence per
100,000 women age 55 and above.
600
500
400
10% 300 2012
412
200
100
’09 ’11 2001 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12
THE WALL STREET JOURNAL.
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. Tuesday, February 16, 2016 | D3

HEALTH & WELLNESS

A Driver Trains to Take the Heat at the Daytona 500

BY JEN MURPHY Far left, Kasey Kahne in August 2015.
Mr. Kahne, upper left, does knee
Sitting in a car for three hours tucks in heat-acclimatization training
or more seems like the opposite of and, below, demonstrates cognitive
a workout. Yet Nascar driver Kasey and peripheral-vision training.
Kahne says he loses nearly 8
pounds in a race. “When I first screen in the middle of the board
started, I’d lose 12 pounds,” he re- shows up to five numbers; sur-
calls. “I’ve learned how to rehy- rounding the screen are buttons
drate.” assembled in five concentric cir-
(CLOCKWISE FROM LEFT) JOHN K HARRELSON/NKP; D.L. ANDERSON FOR THE WALL STREET JOURNAL (2)

Mr. Kahne is training to race in cles. To work hand-eye coordina-

Nascar’s biggest event, the 500- tion, Mr. Kahne has to hit a button
mile Daytona when it lights up. “Sometimes the
WHAT’S YOUR 500 at Daytona light can be super small or some-
WORKOUT International times it’s wider, but it pops up in
Speedway in your peripheral vision,” he says.
Daytona Beach, Sometimes numbers pop up on the
Fla., on Sunday, Feb. 21. He broke screen, and he has to do math to
onto the stock-car racing scene in keep him thinking even when he is
2004, winning the Nascar Nextel tired from sprinting or crunches.
Cup Series Rookie of the Year “It’s kind of like a videogame,” he
award while driving for Evernham says. The D2 tracks his reactions
Motorsports. Now in his fifth sea- to the one-hundredth of a second.
son with Hendrick Motorsports, In winter, Mr. Kahne alternates
the 35-year-old’s resume includes D2 with cardio. He runs on the
86 top finishes. treadmill as fast as possible for
For the past eight years, Mr. one to five minutes, then does four
Kahne has worked with a trainer minutes on the D2, In spring and
three to four days a week to im- summer, he uses the D2 when he is
prove his focus and stamina while exhausted after a full workout. Or
at the wheel. In the cockpit of a he does five to 10 sets of a one- to
race car, temperatures can reach four-minute session on the D2 fol-
140 degrees Fahrenheit. “By the lowed by core work. Before every
end of a race I feel like a puddle of race, he stretches, particularly the
sweat,” Mr. Kahne says. “My hel- hip flexors and neck, which tends
met, uniform, the seat of the car... to tense up in the car.
they are soaked.”
To prepare for such extreme “Lap time is everything,” he the hottest part of the day, such as strength session, to get himself The Diet
conditions, Mr. Kahne does heat- says. “You need to perfect the way running high-intensity intervals used to using his muscles while in Mr. Kahne skips breakfast and
acclimatization training, exercising you pass people.” Team work is for 3 to 5 miles. In winter, he runs an electrolyte-depleted state. The has an early lunch, either a
for 60 to 90 minutes at tempera- the other part of the equation. on a treadmill and does hot yoga. exercises are sub-max weight, with chicken wrap or a salami or ham
tures in the high-70s to 90-degree “My crew team and I need to be a Occasionally, his trainer has 20 to 30 reps of each in a circuit; sandwich. For dinner, he cooks
range. Training in a heat-stressed unit. There’s no room for error.” him spin on a stationary bike—an Mr. Kahne has no break during the steak, chicken or fish with vegeta-
state helps him handle the heat on exercise he dislikes. “Even out- session. Strength sessions focus on bles and has either mashed or
race day, he says. The Workout doors I find it boring,” Mr. Kahne core exercises, like sit-ups and fried potatoes. Vanilla milkshakes
Five years ago, Mr. Kahne’s Mr. Kahne does one or two says. “I’d rather run 10 miles than knee-ups on a pull-up bar. are his splurge, as well as the oc-
trainer introduced him to cogni- heat-acclimatization workouts a bike 10 minutes.” Mr. Kahne does cognitive and casional beer or two. He goes
tive-reaction training, to help him week. In warm weather, he does Immediately after cardio, Mr. peripheral-vision training using a through at least five large bottles
stay mentally sharp even when he cardio outdoors with his trainer at Kahne does an endurance and Dynavision D2 device. An LED of water in a race.
is tired. “The longest I’ve raced is
5 hours and 45 minutes,” Mr.
Kahne says. “Believe me, in races
like that you are worn out men-
How to Counteract the Toll of a Long Day of Driving
tally and physically, and that’s Studies have shown the combina- bending motion that brings your Orthopaedic Surgery, observes we When in a car for two hours or
when you start to make mistakes. tion of a long driving commute and a thigh toward your chest—and the spend the first year of life developing more, you should pull into a rest stop
No matter how tired I get, I need desk job increases the risk of cardio- core shuts off, he says. “We go into a out of a seated position. “Commuting, to walk or stretch. Kneeling lunges to
to be aggressive and make smart vascular disease, says Mike Kohn, a passive state and rely on our struc- or sitting at a desk, is like regressing help loosen the hip flexors and psoas
choices to avoid a crash.” Boulder, Colo., physical therapist. tural system to hold us up. Over into a lower-level posture,” he says. muscle, which tends to tighten when
Mr. Kahne works out with a “Movement is so beneficial to our time, the spine compresses,” he says. He suggests people with long you are seated for long periods. He
trainer Tuesday through Thursday. cardiovascular health,” Mr. Kohn says. “I’ve treated a lot of long-haul truck- commutes and a desk job get a recommends having an ergonomics
He drives on the track three days a When we’re sedentary, the heart has ers, and they joke their backs go out standing or treadmill desk, or jury-rig expert assess the seat of your car, as
week on average, improving his to work harder to circulate blood and more than they do on a Friday night.” their own. Or set a timer for every you would with a desk chair, can help
speed and accuracy on turns and oxygen through our systems. When Robert Butler, an adjunct professor 30 minutes and get up and walk your posture during a commute.
working with his crew team. we sit, our hips go into flexion—the in Duke University’s Department of around, he says. —Jen Murphy

ANTIBACTERIAL SOAPS GO UNDER THE MICROSCOPE.

Companies say these big-selling products are safe and effective, but lab and animal
studies suggest they may be dangerous. Now the FDA is preparing to rule.

READ MORE IN THE JOURNAL REPORT SECTION TODAY.

© 2016 Dow Jones & Co., Inc. All rights reserved. 6DJ3267
D4 | Tuesday, February 16, 2016
At Some Luxury Resorts, the Doctor Can See You Now
BY ANDREA PETERSEN
Turnberry Isle Miami resort is
known for its plush rooms and two
golf courses. It wants to be known
for its medical exams, too.
The Florida property is one of a
number of select luxury resorts
partnering with doctors to offer
medical services to hotel guests.
Resorts say travelers are in-
creasingly focused on their health
during their vacations. Wellness
initiatives—from yoga classes in
the fitness center to kale chips in
the minibar—have been sweeping
the hotel industry. It isn’t a big
leap, resorts say, to think guests
will go for a physical between, say,
a dip in the pool and a facial at the
spa. The medical services also
bring in new revenue. They gener-
ally aren’t covered by insurance.
They can drive traffic to other
parts of the resort, too: You may
be more likely to get a massage if
a doctor prescribes it.
The new offerings range from
souped-up spa packages that in-
clude a doctor’s visit to very ex-
tensive so-called executive physi-
cals that include a lengthy session
with a physician and sophisticated
medical testing. In general, ser-
vices at resorts focus on preven-
tive care, diet and exercise as op-
posed to treating disease.
Over the last year, Turnberry
Isle in Aventura, Fla., brought
three doctors onto its property:
two M.D.s and one doctor of osteo-
pathic medicine have offices in its
spa. The resort now offers pack-
ages including eight-day weight
management and five-day “heart
health” programs that, for about
$1,200 a day, include a doctor
visit, medical tests, fitness training
sessions and spa treatments.
Red Mountain Resort in St.
George, Utah, joined with with a
local hospital system in November
2014 to launch the “Rejuvenate
and Live Well Retreat,” a five-day
package that includes visits with a
doctor and a nutritionist, daily
hikes, fitness and cooking classes
and meals and accommodations.
(Price tag: $1,725). The program is
one of the resort’s most popular
packages: More than 100 have
been sold. Red Mountain says it is
working to add an “Executive
ALLERGIES
Continued from page D1
clinical trials for its pharma-
ceutical-grade peanut formu-
lation, the final stage needed
for FDA approval.
“We absolutely don’t do
OIT for treatment,” says
Robert Wood,
YOUR division chief
HEALTH for pediatric al-
lergy and im-
munology at
Johns Hopkins School of
Medicine, in Baltimore,
which is participating in
about a dozen OIT trials for
different foods. “In my mind
doing so is pushing the enve-
lope beyond the appropriate
level of safety,” he says.
Some 15 million people in
the U.S. have a food allergy,
including nearly 8% of chil-
dren, a rate that has jumped
by half in recent decades.
Peanut allergies are the most
common and dangerous,
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THE WALL STREET JOURNAL.
HEALTH & WELLNESS
sess body composition, balance
and strength. Mayo plans to open
Healthy Living programs at addi-
tional resorts.
Mayo opened its first Healthy
Living Program at its Rochester,
Minn., home in 2014. It has physi-
(CLOCKWISE FROM TOP LEFT) INTERMOUNTAIN HEALTHCARE LIVE WELL CENTER; MANDARIN ORIENTAL; TURNBERRY ISLE MIAMI
cians on site. Administrator James
Yolch says they’ve done their best
to make the Rochester facility lux-
urious with “light, music and am-
bience. We have an entire wall of
living plants.” But he understands
that some travelers may prefer
somewhere a little more exotic.
“There’s something about going to
a warmer climate with a different
type of landscape than medical
buildings where people are willing
to commit and focus on their life-
Resorts bolstering health offerings style,” he says.
include Red Mountain Resort in Utah, After years of resisting over-
above left, where guests can get a tures by hotels and resorts to offer
checkup; Mandarin Oriental in its extensive executive physicals at
Bodrum, Turkey, above right; and their properties, Cleveland Clinic
Turnberry Isle Miami, left. is now considering it. The issue
has been staffing: Patients often
alternative treatments—such as see several specialists, such as car-
nutritional supplements and hor- diologists, during their physicals.
mones—that can be controversial. This year, Cleveland Clinic is ex-
“Overtesting and unnecessary perimenting with telemedicine in
care can create harm and puts its executive physicals for visits
people on the path of a therapeu- with some specialists. If the test is
tic misadventure,” says Wanda successful, it will open the possi-
Filer, president of the American bility of partnering with hotels
Academy of Family Physicians. A and resorts, says Michael Roizen,
family physician in York, Pa., Dr. chair of the Wellness Institute at
Filer says a vacation checkup “cer- Cleveland Clinic.
tainly isn’t going to replace that Resorts say a benefit of seeing
longitudinal relationship with your a medical professional on vacation
Physical” with more extensive of electrical activity in the brain primary-care physician.” is that the visits are usually unhur-
medical testing this year. and other metrics to diagnose In January, the Mayo Clinic ried. When Dr. Liponis does a
Resorts say that aligning them- sleep apnea and other sleep disor- joined with with Mandarin Orien- physical at Canyon Ranch, he
selves with M.D.s and offering ders, are done in hospitals and tal to launch its Healthy Living spends two hours with a patient.
screening tests can legitimatize clinics, Canyon Ranch uses a typi- Program at Mandarin’s resort in Mark Tabit says it wasn’t until
their other services. “I wanted our cal guest room. There’s no fluores- Bodrum, Turkey. Several Mayo em- he participated in an Executive
guests to feel that credibility and cent lighting or uncomfortable ployees—a resiliency specialist, an Leadership program at Four Sea-
that confidence and having that tie hospital bed here, but a king-size exercise specialist and a wellness sons Hotel Westlake Village in Cal-
with an M.D. here at the resort,” bed with sheets from Mascioni, an trainer—are now working out of ifornia in 2013 that he changed his
says Tracey Welsh, general man- Italian luxury brand, and, in Lenox, four rooms at the resort’s spa. Due diet—less pasta, more fish—and
ager of Red Mountain. sweeping views of the 10-acre to licensing issues, there are no started going to the gym regularly.
Some spas that have long pro- Great Lawn. “It is one of the nicest Mayo M.D.s there, yet. The resort The program combined sessions on
vided medical services are adding rooms in the place,” says Mark Li- employs its own doctor. And Mayo leadership with nutrition and fit-
more sophisticated programs. Can- ponis, Canyon Ranch chief medical says it is considering adding M.D.s. ness advice from the hotel’s on-
yon Ranch, which operates two officer. Guest use of medical ser- Mandarin offers two Mayo pro- site medical facility and wellness
destination spas as well as day vices is up 20% in the last year at grams, a one-day and a five-day, center.
spas in Las Vegas and on cruise the destination spas, he says. that include meals, fitness classes, “This is what my doctor has
ships, has overnight sleep labs at Some doctors caution that the a stress management session and been trying to tell me for a num-
its Lenox, Mass., and Tucson, Ariz., testing involved in executive physi- spa treatments. The Mayo employ- ber of years,” says Mr. Tabit, a 55-
properties. A new property open- cals can be overkill and lead to ees first do an assessment that in- year-old in Los Angeles who works
ing in Turkey later this year will false positive results and unneces- cludes a finger stick to measure in the financial services industry.
have a sleep lab, too. While most sary treatment. Some medical pro- cholesterol and glucose, blood He has since returned to the resort
sleep studies, which use recordings fessionals that work in resorts use pressure readings and tests to as- twice to meet with a nutritionist.
with reactions ranging from
skin rashes to anaphylactic
shock, which can be fatal.
are sent home with a plastic
bin holding individual con-
tainers of the dose, which
anaphylactic reactions have
occurred in less than 10% of
patients, Dr. Factor says. “So
About 80% of children don’t they take daily. They return it’s not without any risk at
outgrow peanut allergies. to the center every two all,” he says.
There is no approved treat- weeks for ever-larger doses Matthew Sullivan, now 12,
JULIE BIDWELL FOR THE WALL STREET JOURNAL (3)
ment for food allergies ex- until they graduate to whole started oral immunotherapy
cept avoidance. peanuts or peanut M&M’s. for a peanut allergy at the
About 50 allergists in pri- They are considered desensi- New England center in 2010.
vate practice offer OIT for tized when they can tolerate He had his first allergic reac-
food allergies, according to a about 10 peanuts daily and tion to peanuts, including
popular Facebook group of hives on his arms and legs,
parents interested in the at 13 months old.
therapy. The West Hartford
80% of children His mother, Heather Sulli-
center is the only one in won’t outgrow van, drove them to appoint-
New England and patients ments from their Long-
drive from as far as Ohio,
peanut allergies meadow, Mass., home every
Pennsylvania and Maryland without treatment. other week. After nine
for appointments. months Matthew was suc-
Dr. Factor, of the New cessfully desensitized and
England center, says his pa- then must continue a main- has been on a maintenance Anna Benton, 16, of Simsbury, Conn., above, has a dose of peanut
tients typically start with a tenance dose indefinitely. dose of three to four peanut protein in yogurt. Dr. Jeffrey Factor, below left, is medical
0.1-milligram dose of peanut Treatment usually lasts 10 to butter or peanut M&M’s a director of the New England Food Allergy Treatment Center.
protein—just a few flecks of 12 months and is often cov- day. He no longer carries an Patient drawings, below right, line the center’s hallways.
peanut flour that look like ered by private insurance. EpiPen in case of an anaphy-
grains of sand. Over the next While it isn’t uncommon lactic reaction, Ms. Sullivan
five hours or so, the dose is to have some symptoms dur- says. And earlier in February,
gradually increased to about ing treatment, most are mi- Matthew passed a food chal-
6 milligrams. If the peanut nor, such as itchy mouth or lenge at the treatment cen-
protein is tolerated, patients stomachaches. Systemic or ter, in which he ate the
equivalent of 46 peanuts in
one sitting.
“On Tuesday he brought a
Reese’s peanut butter cup to
school and the whole lunch
table applauded,” Ms. Sulli-
van says. For his lunch two
days later, Matthew brought
a peanut butter and jelly
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sandwich. treatment on more than 400 she has a wait list of 4,000
“It was totally worth it,” patients, mostly children, people interested in joining
  !" #!#!# !$ Matthew says. “It worked!” with about 62 dropping out the trials.
Laura Donoghue has been before completion. More So far the researchers

 

  
    bringing her 6-year-old son, than half have peanut aller- have followed patients as
We have well-staffed offices in Iran and offer
representation, marketing, distribution and
  




  
   Michael, to the center for gies; the rest come in mostly long as nine years and found
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 more than a year from their for milk and egg allergies. that as many as 90% of the
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(

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  "
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TRAVEL chael had several anaphylac- tic reaction. years. Nearly a third of those
tic reactions after being A study published last reach the point of “sustained
exposed to food containing year in the journal Lancet unresponsiveness,” meaning

  
 peanut products. The quiet found that 84% of children they appear to be allergy-

  
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12 kindergartner completed his could safely eat the equiva- free, according to skin and


 treatment in December and lent of five peanuts a day af- blood tests.

 

 
 is now eating 10 peanuts a ter six months of OIT com- Mark Weinstein, an aller-


 
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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. Tuesday, February 16, 2016 | D5

ARTS IN REVIEW
ART

Finding Beauty Amid Hidden Meanings

LEFT: EMILY KAM KNGWARRAY/ARTISTS RIGHTS SOCIETY; RIGHT: COURTESY OF JULIE GOUGH AND BETT GALLERY
Everywhen: The
Eternal Present in
Indigenous Art From
Australia
Harvard Art Museums
Through Sept. 18

BY LEE LAWRENCE

N
Cambridge, Mass.
obody knows how many
millennia indigenous
peoples in Australia
have been tracing images on
the ground, etching them on
wood, painting them on their
bodies, rock caves and tree
bark. Nor can we know exactly
what rituals, songs and stories
accompanied each creation.
We do know that, in 1971, Ab-
original painters added flat,
two-dimensional surfaces to Above: Emily Kam Kngwarray’s ‘Anwerlarr Angerr (Big Yam)’ (1996); right: Julie Gough’s ‘Dark
their roster of mediums. Art Valley, Van Diemen’s Land’ (2008).
teacher Geoffrey Bardon had
art supplies, and a group of people. The title itself refers to pattern reprised here, a notion The activity on canvas seems
Pintupi men in the northwest- what is more often called the vaguely echoed there—that we to travel like sound, making
ern community of Papunya had Dreaming, a legacy of stories begin to sense that these her painting more palpable
time on their hands. Soon, the that tell of ancestral beings painters are not so much than visual. The teeming, ir-
men were painting on paper, shaping and ordering the transmitting received knowl- regular patterns of dots and within their communities that One artist, however, stands
Masonite boards, canvases. world and man’s behavior in it. edge as they are giving it life crosses of Gulumbu Yunup- the uninitiated should not ac- out for her disinterest in all
Other indigenous peoples fol- Underpinning them all is a today to shape tomorrow. ingu’s 2004 “Garak IV (The cess sacred knowledge. In turn, history, sacred or profane.
lowed suit and, in time, the shared understanding that As cerebral as the notion of Universe),” for their part, ac- respectful curators like Mr. Gil- Born in 1945, Nyapanyapa Yun-
mediums expanded. past, present and future can quire depth and, as happens christ, himself a member of the upingu seems to have always
“Everywhen: The Eternal co-exist. “One cannot ‘fix’ the when staring into the night Yamatji people of Western been more focused on form
Present in Indigenous Art Dreaming in time,” Australian Indigenous art can be sky, make me feel suspended, Australia, avoid images consid- than meaning; she even titled a
From Australia” at the Harvard anthropologist W.E.H. Stanner difficult to read, but unmoored. ered too sacred and withhold series “Mayilimiriw,” or
Art Museums showcases about (1905-1981) wrote; “it was and “Garak IV,” the label states, information. “Meaningless.” In her digital
60 works, including 10 by Pin- is everywhen.” that shouldn’t hamper is tied to rituals and morality The only place we don’t see animation, “Light painting”
tupi painters from the 1970s. In keeping with this nonlin- our appreciation. tales involving the movement the constant push-pull of reve- (2010-11), 110 drawings of fig-
The works range from a 1971 ear view of time, Stephen Gil- of stars, but, as occurs lation and concealment is in ures, plants and patterns on
pencil sketch by Uta Uta Tjan- christ, a visiting curator from throughout the show, it doesn’t the last section. In her 2008 acetate sheets are superim-
gala (c. 1926-1990), an inspira- the University of Sydney, es- tell us how to tease out the “Dark Valley, Van Diemen’s posed so that we see them
tional figure in the Papunya art chews chronology in favor of everywhen appears, the path- narrative. We are thus asked to Land,” for example, Julie three at a time. As one com-
movement, to a colorful 1996 themes: Seasonality, Transfor- way to it is visceral. An unti- regard paintings as more than Gough strings chunks of coal posite dissolves into the next,
four-panel painting by Emily mation, Performance and Re- tled 2006 painting by Naata abstract forms while denied together then loops the giant a new creation emerges—
Kam Kngwarray (c. 1910-1996), membrance. In the first three Nungurrayi did not attract me the tools to decode their mean- necklace over two antlers. It is ironic that, of all the pieces,
whose work represented Aus- sections, he also includes a few at first—too pink, too busy, too ing. Honoring indigenous per- a reference to long-buried se- this one seems to most con-
tralia at the 1997 Venice Bien- older pieces: carved shells at- messy. Striations outline a tall spectives may inevitably entail crets from Tasmania’s violent cretely express the everywhen
nale, and photographs from a tached to string-hair belts, a rock, the most recognizable this kind of frustration. Ab- colonial history, explained in in which past, present and fu-
2012 series by Christian ceremonial pipe, wooden ves- form amid a tumult of lines, original artists do not share a the label and a video interview ture embrace in an eternal be-
Thompson. sels, baskets. Their relation- dots and circles that seem to single symbolic language we with the artist. Other similarly coming.
The aim of the show is to ship with the surrounding and be in constant motion, sub- can translate. And they some- hard-hitting works explore
ground us in the perspectives predominately abstract paint- merging and enlivening the times deliberately obfuscate in how colonialism has shaped Ms. Lawrence writes about
and experiences of indigenous ings is so elastic—a geometric rock and what might be cliffs. response to strong feelings current identity and attitudes. art for the Journal.

JAZZ MUSIC

Bring Back the Big Band Mystical Minimalism

RAYMOND ROSS ARCHIVES/CTS IMAGES; JOHN ROGERS/ECM RECORDS

BY MARTIN JOHNSON BY STUART ISACOFF tion employed

O T
by singers of
n Monday nights during he charismatic Russian- the region,
the early and mid-’80s, Armenian mystic George which Mr.
Seventh Avenue South, a Gurdjieff (c. 1866-1949), Chiu renders
small stretch of road in New author of “Meetings With Re- with aplomb.
York’s Greenwich Village, was a markable Men”—which The playing is
big-band-lover’s paradise. At spurred a 1979 British film of unfussy, often
the north end of the block, the same name directed by Pe- transparent
downstairs inside the Village ter Brook and starring Terence but colored at
Vanguard, the stage featured Stamp—was something of a times by a
the Mel Lewis Jazz Orchestra, cult figure in the 1960s coun- wash of pedal
an ensemble that Mr. Lewis, a terculture. Using writings, mu- when the har-
drummer, founded with the sic and movement to bring m o n i e s
great trumpeter and arranger people out of the ordinary achieve a
Thad Jones in 1965. The band “waking sleep” of their lives, weighty den-
swung hard with long, passion- Above: Mel Lewis Jazz Orchestra at the Village Vanguard in 1966; Gurdjieff counted among his sity. Behind it
ate solos that sometimes em- below: Michael Formanek, who leads Ensemble Kolossus. spiritual descendants such new all lurks the
braced tenets of the ’60s age luminaries as P.D. Ouspen- dance, which
avant-garde. ments of classic big bands, such Shane Endsley; cornetist Kirk sky and Alan Watts. emerges from
Jones had left his band in as the relaxed swing of Basie’s Knuffke; pianist Kris Davis; gui- Among his followers was a the Dervish’s
1978 and passed away in 1986; ensembles and the regal har- tarist Mary Halvorson; and composer named Thomas de chants and
CHRIS CRAYMER

after Lewis died in 1990, the monies of the Duke Ellington drummer Tomas Fujiwara. His Hartmann with whom he col- dirges like a
band became known as the Orchestra. Jones was a master band is also 18 pieces and con- laborated on a series of piano whirling Sufi.
Vanguard Jazz Orchestra, often arranger and conductor. On the nects with the Jones/Lewis or- pieces. Gurdjieff would hum Frederic Chiu The final
under the leadership of pianist chestra in its ability to expand the tunes, allegedly inspired by track is a real
Jim McNeely. The Vanguard on current trends and suggest his cultural experiences while surprise: Mr.
Jazz Orchestra is celebrating a big-band language for a musi- traveling in the Middle East, It’s interesting that pianists Chiu here offers his own ar-
50 years at its Monday-night cal style that is often heard in and De Hartmann, a graduate with such phenomenal tech- rangement of Bach’s “Erbarme
home with a new release, solos and duos. The ensem- of the St. Petersburg Conserva- niques would be attracted to Dich” from the “St. Matthew
“All My Yesterdays” (Reso- ble has a remarkably inti- tory, would write them down such unvirtuosic music. Mr. Passion.” The intention must
nance, Feb. 19 release), mate and austere sound and add harmonies. Jarrett is more aggressively in- have been to demonstrate a
that captures the early that gracefully increases The result—a minimalist terpretive in shaping the link between the two compos-
sound of the band. A new to dramatic full-ensemble blend drawing on elements pieces, bringing more atten- ers. Despite some outward
big-band recording, “The roars. The core of the re- from Byzantine Chant and the tion to the player than Mr. similarities—the repetitive
Distance” (ECM, Feb. 12 cording is an eight-part Western classical tradition— Chiu, who seems to aim at a bass, the mysteriousness and
release), by bassist Michael suite of Mr. Formanek’s has been published by Schott kind of translucent presence. passion—I am more aware of
Formanek offers a strikingly called “Exoskeleton.” Each in several volumes over the Yet Mr. Chiu clearly enhances the differences. But why com-
contemporary take on some segment features stellar so- past two decades, making it the qualities at the core of plain when there is so much
of the Jones/Lewis band’s cor- los from the band members, more available than ever. Keith each piece. The opening “Say- beauty to enjoy?
nerstones. sometimes with section-based Jarrett’s 1980 release “G.I. Gur- yid Chant” is tender, with an
Messrs. Jones and Lewis harmonies as a sonic backdrop djieff: Sacred Hymns” had been ethereal, almost breathy Mr. Isacoff’s latest book is
met in the mid-’50s when the and at other times full orches- a popular favorite. Now Ameri- sound, conveying a strong “A Natural History of the Pi-
trumpeter was playing with disc, you can hear him shout tral contrasts. The solos by Ms. can pianist Frederic Chiu adds sense of devotion and yearn- ano” (Knopf/Vintage).
Count Basie and the drummer encouragement to soloists and Davis, Ms. Halvorson and Mr. his voice to the Gurdjieff leg- ing.
was with the Stan Kenton Or- cue the other musicians. He Fujiwara highlight a sound that acy with “Hymns & Dervishes” That and other exotic “der-
chestra. They shared an inter- wanted an electric atmosphere effectively alternates between (Centaur). vishes” on this disc employ Pepper ...
est in developing a contempo- and got it. Jones moved to Co- spare and meaty. Mr. Chiu, who has recorded Middle Eastern tunings, and al-
rary large-ensemble sound at a penhagen to work with Euro- My mind boggles at the the piano music of Sergei ternate with more Western-
And Salt
time when jazz was increas- pean musicians in 1978, but by thought of the musical heights Prokofiev, was drawn to this style “hymns” that use a tun- THE WALL STREET JOURNAL
ingly made by smaller combos. then the band’s style was set. Ensemble Kolossus could reach material partly because De ing of standard equal
Their band formed from jam The second disc of the set fea- if it had a weekly engagement, Hartmann was a classmate of temperament, though to my
sessions that took place largely tures the orchestra six weeks but the absence of such oppor- Prokofiev; but he was also en- ears the unusual tunings have
among musicians who worked into what has become a half- tunities reflects the changing ticed by Gurdjieff’s spiritual minimal impact. In fact, it is
in television big bands at the century-long engagement, and nature of the New York music message of discarding easy, au- the sound of modern equal
time. Their first gig at the Van- it sounds completely at home scene. There are fewer clubs in tomatic ways of living in favor temperament that enhances
guard was in February 1966, with driving solos and music general and fewer opportuni- of developing a wholeness of the rich chords and unexpected
and the first disc of “All My that incorporates the harmo- ties for bands of any size. presence in the world. These harmonic turns of the second
Yesterdays” documents that nies and structures of bebop Thus, even if Mr. Formanek compositions—simple, tuneful track, “Hymns of a Great Tem-
performance in the legendary without losing the elegant in- could secure a weekly booking and often static—are not ple #2.” The slight wavering
nightclub. tensity of swing-era big bands. he would probably struggle to meant to entertain but to in- that results from strings whose
From the outset, it’s easy to Bassist Michael Formanek keep a core band together be- still a sense of journeying overtones do not perfectly
hear the appeal of the band. created his Ensemble Kolossus tween touring schedules and within. Many were intended to align adds a mysterious luster,
“Back Bone,” the first track, for a December 2014 recording academic engagements. It’s un- accompany Gurdjieff’s “move- a dark tension to the piece. Mr.
starts with a solo by alto saxo- session, and the lineup features fortunate, as “The Distance” ments”—sacred dances with Chiu’s playing beautifully proj-
phonist Jerry Dodgion that some of the finest individual offers a new blueprint for post- precise postures and gestures, ects a kind of doleful pleading.
builds to an exciting peak that voices on the New York scene: millennial orchestral jazz. meant, wrote his biographer The Gurdjieff-De Hartmann
the ensemble maintains saxophonists Tim Berne, Chris James Moore, to manifest “the music makes use of Middle “Put yourself in my
throughout both discs. The 18- Speed and Oscar Noriega; Mr. Johnson writes about laws that rule the secret move- Eastern scales, drones, and the position—only without
piece outfit captures key ele- trumpeters Ralph Alessi and jazz for the Journal. ments of men and of the stars.” kinds of complex ornamenta- the perks, of course.”
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
D6 | Tuesday, February 16, 2016
A Swimming Hero Relearns How to Swim
Marilyn Bell swam the
English Channel, but
scoliosis later in life kept
her out of the pool
BY KEVIN HELLIKER
New Paltz, N.Y.
In 1954, the renowned American
distance swimmer Florence Chad-
wick received a tantalizing offer:
Swim across Lake Ontario—some-
thing no human had ever done—and
she would receive $10,000, the
equivalent of nearly $90,000 today.
The offer, from an annual event
called the Canadian National Exhibi-
tion, irritated some Canadians who
thought that surely one of their own
compatriots could accomplish that
feat. Years earlier, after all, when
chewing-gum magnate William Wrig-
ley Jr. offered $25,000 to the first
person to swim from Catalina Island
to mainland California, the winner of
that prize had been a Canadian,
George Young.
Young had since retired, however,
and the swimmer recruited to com-
pete against Chadwick was a 16-
year-old Toronto girl named Marilyn
Bell. Chadwick was an international
star from California who had set re-
cords swimming the English Channel
in both directions. Bell, by contrast,
was unknown outside her Toronto
swim club.
On race night, the two swimmers
dove into Lake Ontario from its New
York shores. Chadwick lasted only a
few hours. One moment short of 21
hours, Bell reached the Canadian
shore in Toronto, earning her head-
lines around the world. A year later,
at 17, she became the youngest person
ever to swim the English Channel.
In an era of distance-swimming ce-
lebrities, Bell reigned as one of North
America’s most visible athletes. In
1954, she won Canada’s prestigious
Lou Marsh trophy, awarded to the
country’s top athlete. Photographs
from that time show her standing be-
side Ed Sullivan and Roy Rogers.
Then Marilyn Bell did something
extraordinary: She disappeared.
Almost 60 years later, she moved
into a retirement center called
Woodland Pond at New Paltz. She
went now by Marilyn Di Lascio, the
surname she’d taken at age 19 upon
marrying a New Jersey government
worker named Joe Di Lascio. For de-
cades she raised four children as a
New Jersey housewife, then went
back to school, obtained a graduate
education degree and taught special-
needs children. Neither at school nor
at home was there any talk of her il-
lustrious past.
“I was the youngest of her kids,
and I was 11 or 12 when my siblings
and I collectively had an ah-ha mo-
ment about who our mother was,”
says Jodi Di Lascio, Di Lascio’s
daughter.
Nobody at Woodland Pond knew
about her past either. “After all that
attention, I just wanted to live a nor-
mal life,” says Di Lascio.
She still liked the water. After the
death of her husband of 50 years, she
chose to move to Woodland Pond in
part because it had an indoor pool.
Not that she actually swam. A wors-
ening case of scoliosis had crippled
her in her 70s. To get around she
used a motorized chair. In the pool,
she merely floated on her back, gently
kicking her feet. “It hurt too much to
try to swim,” she says.
The star of the Woodland Pond
pool was Paul Lurie, a retired pioneer
of pediatric cardiology. He didn’t
swim faster or farther than anybody
WilltheGiantsofFranceComeUpShortinEurope?
No team in European soccer is
dominating its domestic league
quite like Paris Saint-Germain right
now.
After 26 games, PSG’s lead
over second place is 24 points and
France’s three-time defending
champion is on course to clinch the
title historically early.
That kind of form should put
Paris among the favorites to win
Europe’s most prestigious competi-
tion, the UEFA Champions League,
which resumes Tuesday. In fact, it’s
more likely to spell disaster.
Crushing opponents at home, it
turns out, is the worst possible way
to prepare for European competition.
Since 1995, 25 teams across the
continent’s top five leagues have
cruised home with an advantage of
10 points or more. Yet, of those 25
teams, only two replicated their do-
mestic form by also lifting the
JEAN CATUFFE/GETTY IMAGES
Top, Marilyn Di Lascio at the
Woodland Pond pool. Middle,
Paul Lurie, left, Di Lascio, center,
with swim instructor Terry Laughlin.
Bottom, Di Lascio, then-named
Bell, after swimming the English
Channel in 1955.
else. In a place where no measure of
athleticism is more prized than defi-
ance of age, Lurie was the big man on
campus. He didn’t start swimming
laps until he was 94. Before that, he’d
run stairs at Children’s Hospital Los
Angeles, where he was chief of pedi-
atric cardiology.
A case of atrial fibrillation in his
early 90s prompted Lurie to ditch the
stairs in favor of a lower-intensity
workout, and it was in part because
of its pool that he chose to move to
Woodland Pond. Eager to teach him-
self proper freestyle technique and
learn a second stroke, Lurie went on-
line to investigate an international
swim-improvement program called
“Total Immersion,” and made an
amazing discovery: The founder of
Total Immersion, Terry Laughlin,
lived in New Paltz.
Lurie got in his car, drove to
Laughlin’s house and knocked on the
door. When Laughlin’s grown daugh-
ter answered, she found on their
doorstep a 94-year-old man saying
he wanted to learn to swim butterfly.
Typically, a two-day Total Immer-
sion seminar costs $495. But Laugh-
lin went to Woodland Pond and pro-
vided free-of-charge lessons to Lurie,
seeing in him the chance to explore
a question: How old is too old to im-
prove as a swimmer?
After a handful of lessons, Laugh-
lin streamlined Lurie’s freestyle so
dramatically that a video of them
swimming side-by-side offers little
evidence which man is the coach and
which the student. Within a year, Lu-
rie cut in half the time it took him to
swim 20 lengths, a workout he per-
forms every weekday morning. For a
second stroke, Laughlin taught the
old man backstroke, having decided
that butterfly was too ambitious.
Neither man paid much attention
to the woman who arrived during
their workouts on a motorized chair,
and who floated on her back, gently
No Place Like Home
How the most dominant title-winning teams in Europe’s top five
leagues since 1995 have fared in the Champions League.
TEAM SEASON
Bayern Munich (Germany) 2012/13
Paris Saint-Germain
2015/16
(France)
Inter Milan (Italy) 2006/07
Bayern Munich (Germany) 2013/14
Manchester United
1999/00
(England)
Juventus (Italy) 2013/14
Juventus (Italy) 2014/15
Lyon (France) 2006/07
Bayern Munich (Germany) 2002/03
Bayern Munich (Germany) 1998/99
*Through 26 games
Champions League trophy.
“We’re boxing in a weight class that
doesn’t exist in France,” manager Lau-
rent Blanc said ahead of PSG’s round-
of-16 match against Chelsea on Tues-
day. “But that’s what makes it exciting.”
Sprinting away with championships
THE WALL STREET JOURNAL.
SPORTS
(T-B) RICHARD BEAVEN FOR THE WALL STREET JOURNAL (2), NORMAN JAMES/TORONTO STAR/GETTY IMAGES
“I wasn’t particularly interested
in doing it,” recalls Di Lascio. “But
Paul so wanted me to try, and Terry
was very eager too.”
At the pool, Laughlin asked her to
swim a couple laps. “It was very
painful,” she says.
What Laughlin saw convinced him
that he could help her. “Marilyn dis-
played class 1950s form,” says Laugh-
lin. “Head high. Hips flat. Legs churn-
ing. Not salutary for the spine.”
Under Laughlin’s guidance, Di
Lascio deconstructed her champion-
ship stroke and learned to keep her
head aligned with her spine, rotate
her torso and calm her kick, allow-
ing her legs to draft behind the up-
per body. In short order, she was
swimming two hours a day without
pain.
At 98, Lurie recently published his
kicking her feet. about her feats as Marilyn Bell. She first book, “A Cardiologist Explains
A local reporter, while writing also explained that scoliosis now Things: Basic Information for the
about Di Lascio’s involvement with a made it too painful for her to swim. Layperson.”
Woodland Pond philanthropic effort, In the audience was Lurie, who came “He’s a hard person to keep up
searched her online and learned forward afterward to suggest that with,” says Di Lascio. But in her own
about her past. When Woodland she consider taking lessons from way, she’s trying. At 78, she has de-
Pond administrators found out, they Laughlin. vised a new goal for when she turns
arranged to show in the community “I thought maybe Terry could 80: She wants to participate in an an-
theater a 2001 made-for-television teach her to swim without pain,” nual 13-mile Hudson River swim. “I
movie called, “Heart: The Marilyn says Lurie. “It seemed such a shame don’t know whether I will be able to
Bell Story.” After the showing, Di that this superstar could only float do it, but it’s an exciting thing to think
Lascio stood to answer questions on her back.” about,” she says.
in 2012-13—it ran away with the
Bundesliga title by 25 points and, fit-
tingly, defeated a German rival (Borus-
sia Dortmund) in the European final.
It may be that the lack of weekly
WINNING CHAMPIONS
MARGIN LEAGUE RESULT tension in their domestic league means
25 pts Winner teams struggle to raise their gane for
high-stakes nights in Europe. Despite
24* ? the hurt that PSG has put on French
22 Round of 16
soccer since 2011, it hasn’t progressed
past the quarterfinals in Europe.
19 Semifinals
It’s no coincidence that the quar-
terfinal round is a common graveyard
18 Quarterfinals
for dominant teams. Not only do
17 Group stage those rounds come with two games
17 Runner-up each against tough opposition, but
17 Round of 16 they take place in March and April,
16 Group stage right around the time that a team
15 Runner-up with a 10-point lead in the league
might start to rest on its laurels.
Source: Opta Sports
On Saturday, PSG prepared for
Chelsea by facing Lille. Star striker
happens all the time for Europe’s su- likeliest Champions League outcome is Zlatan Ibrahimovic was left out of the
perclubs. Bayern Munich accounts for a quarterfinal exit. This was the case squad for the game and PSG ended
seven of the 25 most dominant do- for eight out of those 25 teams. Four up drawing 0-0. Not that it mattered.
mestic seasons of the last two de- more lost in the semifinal round. The next day, second-place Monaco
cades, while Manchester United takes Only two teams have bucked the missed out on a chance to close the
up three spots. trend. The first was Barcelona in gap at the top by drawing at St. Eti-
For most runaway champions, the 2006. The second was Bayern Munich enne. —Joshua Robinson
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

JOURNAL REPORT

F
The Eollow
Onlinxperts
© 2016 Dow Jones & Company. All Rights Reserved. THE WALL STREET JOURNAL. wsj.c e
om/e at Tuesday, February 16, 2016 | R1
x perts

Questions on Clean
The FDA is reviewing the safety and effectiveness of antibacterial prod-
ucts such as soaps and hand sanitizers used by consumers and health-care
workers. Manufacturers say the chemicals used are safe with no studies
directly linking them to effects on human health, but research has raised
concerns about potential health hazards and the chemicals’ contribution to
making bacteria resistant to antibiotic drugs used to treat disease.
Here are some of the chemicals the FDA is reviewing and some of the
issues it is looking at:

Isopropyl alcohol
USED IN Hand sanitizers,
wound cleaning
CONCERNS Safety data
doesn’t assess highest
potential concentration
and exposure that may
occur during an 8- to
12-hour work shift in
a health-care facility
Triclosan and
triclocarban
USED IN Antiseptic soaps,
body washes, cosmetics,
toothpaste, kitchenware
CONCERNS Found in high
levels in human breast
milk and urine and in the
environment; may interfere
with normal development
and function in humans
and animals
Iodine
USED IN Health-care
antiseptics, surgical
hand scrubs
CONCERNS Impact
of frequent topical
use by pregnant and
Benzalkonium chloride breast-feeding health-
USED IN Cosmetics, antiseptic care personnel
washes and hand sanitizers, Chloroxylenol
surgical hand scrub, patient USED IN Antibacterial
preoperative skin preparation soaps, creams, oint-
ments, disinfection,
CONCERNS Studies needed on
wound cleansing and
oral and dermal carcinogenicity,
sanitation in hospitals
potential hormonal effects
and homes
Benzethonium CONCERNS Has been
chloride found in internal tissues
after skin application;
USED IN Hand soaps,
studies needed to define
cosmetics, moist towelettes
level of exposure follow-
CONCERNS Animal studies ing repeated use
needed to assess effect on
fertility, body weight at birth,

PHOTO ILLUSTRATION BY JOHN KUCZALA

growth and development

Source: Food and Drug Administration THE WALL STREET JOURNAL.

Antibacterial Soaps Go
also plans to review hand sanitizers, including
those based on alcohol, and it’s weighing sepa-
rate rules for food-processing workers.
The chemicals used in antibacterial cleaners
safe and more effective than regular soap,
against environmental groups and some scien-
tists who charge they are not only no more ef-
fective than regular soap, but are dangerous to

Under the Microscope

Companies say these BY LAURA LANDRO
big-selling products are Is the quest for clean doing
safe and effective, but more harm than good?
That’s the question at the heart of a debate
lab and animal studies between cleaning-products makers, researchers
and environmental advocates. The outcome
suggest they may be could affect millions of Americans who use an-
tibacterial soaps, body washes and shower gels
dangerous. Now the to fight germs—as well as the companies that
supply the $5.5 billion market for soap, bath
FDA is preparing to rule. and shower products.
In September, the Food and Drug Adminis-
tration will announce a decision on whether
companies that make and market antibacterial
soaps containing certain ingredients have
demonstrated they are safe and more effective
than plain soap and water in preventing illness.
If the FDA decides against them, the companies
must reformulate the products—a step a num-
ber of big manufacturers have already taken,
citing public concerns—and may need to re-
move claims from their labels.
The proposed new rules are part of a more
sweeping review of virtually all antiseptic
products used in the war against germs that
COMMON ELEMENTS are rinsed off or left on, including those used
Antibacterial agents are in many soap, in hospitals to fight the rise in virulent bacteria
bath and shower products. and protect patients from infection. The FDA
have been around for decades and are used in
a wide range of other products There’s a lack
of hard data linking them to human health out-
comes. The FDA first judged some chemicals
were safe and effective in 1994. But the most
commonly used chemical, triclosan, was always
under separate scrutiny, and while the FDA
never took formal action, since then studies
have suggested it can interfere with hormones
and cause changes in thyroid, reproductive-
growth and developmental systems. And some
research indicates that the booming use of an-
tibacterials is contributing to the creation of
superbugs that are resistant to the antibiotics
long used to fight them.
With new evidence that exposure is higher
than previously thought and advances in tech-
nology to detect chemicals in the body, new
data is needed to assess long-term effects, says
Theresa M. Michele, director of the Division of
Nonprescription Drug Products in the FDA’s
Center for Drug Evaluation and Research.
“We now know we can measure small
amounts of ingredients in blood and that
things you put on your skin can potentially be
absorbed into the body,” Dr. Michele says. Her
advice: “At this point, wash your hands with
plain soap and water, because we don’t have
enough data demonstrating these antibacterial
soaps are any better” in fighting disease.
A sweeping review
The FDA review, which includes 22 chemi-
cals, has pitted the $30 billion cleaning-prod-
ucts industry, which maintains the products are
health and should be banned or restricted to
fighting dangerous outbreaks in hospitals.
Both sides in the debate have submitted
reams of evidence to the FDA supporting their
stance, offering up conflicting studies that
make it a challenge for the average consumer
to make informed decisions.
Most of the controversy focuses on triclosan
and a related chemical, triclocarban, first intro-
duced in the 1950s and 1960s, respectively. Tri-
closan is an antibacterial chemical agent
widely used in liquid hand soaps, other per-
sonal-care products such as body and face
washes, cosmetics, school supplies and kitchen-
ware. It works by killing or weakening bacteria,
similar to the way antibiotic drugs prevent or
treat infections. But while antibiotics are pre-
scribed to cure disease, antibacterials are
aimed at preventing the spread of disease-
causing bacteria to people who aren’t infected,
including by handling contaminated food and
objects, or skin-to-skin contact.
Resistant bacteria
In the case of antibiotics, because the drugs
have been used so widely for so long, many
types of bacteria have adapted. The FDA and
some scientists are now concerned that anti-
bacterial chemicals like triclosan, which linger
in the environment and can be absorbed in the
body, are also contributing to antibiotic resis-
tance. A new Minnesota law will prohibit some
cleaning products like hand soap and body
wash containing triclosan after Jan. 1, 2017.
Please turn to the next page

INSIDE

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R2 | Tuesday, February 16, 2016 THE WALL STREET JOURNAL.

JOURNAL REPORT | HEALTH CARE

Hospitals Unite to Defeat a Common Foe: C. Difficile

When it comes to safety, health-care providers are finding collaboration must replace competition
BY BETSY MCKAY
ROCHESTER, N. Y.—A few
years ago, the main hospitals
in this city, like many across
the country, were struggling
with rising rates of illness
caused by a particularly fero-
cious bacterium: Clostridium
difficile.
Patients would lie sick in
hospital rooms for days, fight-
ing off the severe diarrhea
Collaborative Cleanup
Infections from C. difficile bacteria—the leading pathogen in
health-care-related infections—have dropped at four hospitals in the
Rochester, N.Y., area that began a joint campaign in 2011. The rate of
hospital-onset infections by quarter:
Patient days (left scale)
Infections per 10,000 patient days (right scale)
175 thousand 14
150 12

J. ADAM FENSTER/UNIVERSITY IF ROCHESTER

that the pathogen caused. Oth-
ers who had been admitted for
different reasons would be-
come infected, too.
Each hospital had been try-
ing to combat C. difficile on its
own, but they were often out-
witted by the hardy spore,
which is fueled by overuse of
antibiotics, spread on the
hands of health-care workers
and able to survive on bed
rails, call buttons and door-
knobs for as long as five
months if not cleaned off. Plus,
it was traveling: Patients in
one hospital or nursing home
were often discharged and
then admitted to another.
Dealing with the mess was
costing the hospitals an esti-
mated $4 million to $5 million
a year.
So they did something rare
for competing health-care sys-
tems. Four hospitals joined
forces to beat back the debili-
tating bug, forming a C. dif-
ficile prevention collaborative.
Six nursing homes that share
patients with the hospitals
and had a huge C. difficile
problem of their own then
formed a separate alliance.
It paid off: In the 12 months
ended in September 2015,
rates of C. difficile infections
fell 36% from 2011 levels
across the hospitals, which ini-
tially were in three but are
now in two health-care sys-
tems: the University of Roch-
ester Medical Center and
Rochester Regional Health
System.
“It’s not very simple—you
have to have a multidisciplin-
ary approach to prevent this
infection,” says Ghinwa
Dumyati, who leads both the
hospital and nursing-home
collaboratives as an infectious-
disease physician with the
Center for Community Health
at the University of Rochester
125
100
75
50
25
0 0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2011 ’12 ’13
Source: Rochester area hospitals
Medical Center. “We needed to
work together.”
A good cleaning
Hospitals compete intensely
for patients, doctors and in-
surance dollars, but when it
comes to safety, they are in-
creasingly collaborating to
solve common problems, ac-
cording to Arjun Srinivasan,
an expert at the Centers for
Disease Control and Preven-
tion in the prevention of
health-care-associated infec-
tions. The CDC says working
together allows hospitals to
more effectively fight infec-
tions caused by drug-resistant
bacteria and C. difficile be-
cause the bugs are intractable
and the difficulties each facil-
ity faces are similar. Plus, Dr.
Srinivasan says, “hospitals
share those patients.”
New federal requirements
to improve health-care quality,
such as public reporting of
health-care-associated infec-
tions and penalties for read-
missions, also are prodding
hospitals to collaborate more
on safety issues, Dr. Srinivasan
and hospital executives say.
C. difficile is the most com-
mon pathogen causing health-
care-associated infections in
U.S. hospitals, according to the
CDC. It led to approximately
453,000 infections and 29,000
10
8
6
4
2
’14 ’15
THE WALL STREET JOURNAL.
deaths in the U.S. in 2011, ac-
cording to a study last year in
the New England Journal of
Medicine.
Infections occur when
someone ingests C. difficile
and takes antibiotics that wipe
out the good bacteria in their
gut. That leaves the C. difficile
to flourish in the colon, pro-
ducing diarrhea that can last
for weeks or months. The el-
‘Hospitals share
those patients,’
says one expert on
infections.
derly are particularly at risk of
infection because their im-
mune systems may be weak,
and they are frequent users of
hospitals and nursing homes.
Rochester’s C. difficile-pre-
vention collaborative began in
2011, funded by the health-
care systems involved and a
large regional insurer, Excel-
lus BlueCross BlueShield. It
grew out of an earlier initia-
tive that Dr. Dumyati had led
that sharply reduced blood-
stream infections from central
lines, or catheters, inserted in
the body. This time, the col-
laborative—Dr. Dumyati, along
with doctors, infection preven-
Ghinwa Dumyati, right, an infectious-disease specialist at the University of Rochester Medical
Center who leads the hospital collaborative, meets with Strong Memorial Hospital environmen-
tal-services worker Jeanna Hibbert and environmental-services assistant director Harvey Gamble.
tionists and others from the
hospitals—chose to target C.
difficile. “We knew we had a
lot of cases,” she says.
First, the collaborative fo-
cused on cleaning procedures.
The hospitals taught staff to
scrub long and hard with
bleach wipes to get rid of su-
per-resilient C. difficile in hos-
pital rooms. “Just like if you’re
washing a plate, you have to
apply pressure to get food
off,” says Jeanna Hibbert, who
cleans rooms at Strong Memo-
rial Hospital, one of the four
participating hospitals.
They also introduced in-
spections of cleaned rooms,
using a tool that checks for
even small amounts of con-
tamination. “That was new
and extraordinarily helpful,”
says Robert Panzer, chief qual-
ity officer and associate vice
president at Strong Memorial.
Each hospital made changes
in its own way, and borrowed
ideas from the others. Strong
Memorial dedicated a crew to
clean the rooms of discharged
C. difficile patients after de-
termining that it takes an hour
and half—twice as long as nor-
mal—to properly clean them,
adopting a practice from its
sister, Highland Hospital.
After the collaborative laid
out a policy for treating less
severe forms of pneumonia,
Strong Memorial pharmacists
changed an electronic order
form for antibiotics to prevent
physicians treating those in-
fections from prescribing a
class of drugs linked to C. dif-
ficile infection without special
approval, says Dr. Dumyati.
Across town at Rochester
General Hospital, staff pro-
moted the new pneumonia
policy in a newsletter for doc-
tors. Use of the desired antibi-
otic, doxycycline, for pneumo-
nia more than tripled in a
year; use of the one it replaced
fell 48%, the hospital says.
The team at Rochester Gen-
eral also created a poster with
new guidelines for diagnosing
and treating urinary-tract in-
fections after the collaborative
determined that five out of six
of its hospital patients treated
for them don’t actually have
them. Dr. Dumyati adopted it
for use in the nursing homes
she had started to work with,
with a grant from the state.
The new policies have
helped Rochester General
strengthen an antibiotic stew-
ardship program it adopted a
few years ago, in which a team
of experts reviews antibiotic
prescriptions, says Maryrose
Laguio-Vila, the program’s di-
rector. “We gain insight into
whether what we’re doing is
along the right track or can be
tweaked in a certain way.”
The collaborative has
helped all of the hospitals im-
prove their practices and pa-
tient care, says Nayef El-Da-
her, chief of infectious disease
at Unity Hospital. “When we
started the project, every one
of us had [our] own ideas and
protocols,” he says.
The next front
Dr. Dumyati feeds data on
C. difficile infection rates and
other measures every quarter
to each of the hospitals, so
that they can see how they’re
doing. “The data really drive
where we go next,” she says.
Next, she hopes to take the
new policies to doctors’ and
dentists’ offices. About 35% of
all C. difficile infections aren’t
linked to stays in hospitals or
long-term-care facilities, ac-
cording to the NEJM study.
“It’s fairly clear that you
have to work with the nursing
homes and you have to work
across the community to make
progress,” says Mark Shelly,
chief of infectious disease at
Highland Hospital. “Otherwise
we’ll be pointing across the
fence for a long time.”
Ms. McKay is a news editor
for The Wall Street Journal
in Atlanta. Email her at
betsy.mckay@wsj.com.

Antibacterial Soaps Go Under the Microscope

Continued from the prior page
The American Cleaning Institute, which rep-
resents about 140 companies, is moving to sat-
isfy the FDA’s data requirements for the safety
and effectiveness of antibacterial ingredients,
says Richard Sedlak, executive vice president,
technical and international affairs. The insti-
tute and others have asked the FDA to defer
rule making on three other ingredients compa-
nies are using as an alternative to triclosan—
benzalkonium chloride, benzethonium chloride
and chloroxylenol—to allow time to submit
new safety and effectiveness data. The FDA’s
Dr. Michele says it is considering the request.
But the cleaning institute takes the position
that the FDA has “neglected a substantial
amount of existing safety data” showing the
chemicals are effective in reducing the level of
bacteria on the skin and more effective than
soap that’s not antibacterial.
Along with another organization, the Per-
sonal Care Products Council, it has submitted
extensive data to support its view that triclo-
san has been used safely for decades and has
been extensively reviewed and permitted
around the world, with no data directly linking
it to human harm. Makers of antibacterial bath
products also dispute that they are contribut-
ing to the creation of superbugs, noting that
studies have shown that overuse of prescrip-
tion antibiotics in humans and livestock is the
driving force behind antibiotic resistance.
And the organizations warn that banning
antibacterial products would increase the level
of risk and exposure of the general population
to bacteria, leading to increased infection and
disease, including 7.5 million cases of food-
borne illness and $38 billion in health-care
costs annually. An FDA spokeswoman says the
agency has no comment on that estimate.
Changing the rules
The FDA initially proposed a rule that would
have disallowed triclosan in hand soaps in 1978
because there wasn’t enough evidence to show
it was safe and effective. In 1994, the FDA
amended that to say some chemicals were safe
for consumer soaps, but continued to propose
that additional data were needed for other in-
gredients, including triclosan. The nonprofit
Natural Resources Defense Council sued the
FDA in 2010, alleging the agency had unreason-
ably delayed taking action.
The FDA signed a consent decree to settle
the suit, and issued a new proposed rule in
2013, continuing to propose that triclosan not
be available for use in consumer washes unless
additional safety and effectiveness data were
provided to the FDA. The consent decree im-
posed a September 2016 deadline for a final
rule for consumer soaps and set out future
deadlines for the FDA to rule on health-care
antiseptics and consumer hand sanitizers, in-
cluding those that are alcohol-based.
A 2014 review of evidence and regulatory
actions published in the journal Environmental
Science & Technology acknowledged there is a
“paucity of data” on triclosan’s adverse effects
on humans. But the review notes that U.S.
streams have a 60% to 100% likelihood of con-
taining detectable quantities of the chemicals,
and they have been detected in high levels in
Where Trouble Lurks
Common bacteria spread by hand
that can cause illness and infection
CAMPYLOBACTER JEJUNI
COMMON FOOD SOURCES
Raw/undercooked poultry,
contaminated water
DURATION OF ILLNESS 2-10 days
CRYPTOSPORIDIUM
COMMON FOOD SOURCES
Uncooked food or food contami-
nated by an ill food handler after
cooking
DURATION OF ILLNESS May remit
and relapse for weeks or months
E. COLI
COMMON FOOD SOURCES
Undercooked beef, raw fruits
and vegetables,
DURATION OF ILLNESS 5-10 days
*Staph can cause skin infections as well as food poisoning.
Source: Food and Drug Administration
municipal sludge and drinking water, and urine
and breast milk. While consumers may use
soaps for a few seconds and wash them down
the drain, their environmental afterlife is much
longer, measured at time scales of up to several
decades, the review found.
“There is undeniable evidence that these
chemicals have suffused modern life, and we
have to question whether this is a good idea,”
says Rolf Halden, author of the review and di-
rector of Arizona State University’s Biodesign
Center for Environmental Security. “It’s virtu-
ally impossible to link one particular exposure
to these agents, but on a population basis, you
see associations between exposure and effect.”
Antibacterial agents “can play an important
role in hospitals and health-care settings, but
they do not belong in all households, our food
supply and our bodies at all times,” he says.
The American Cleaning Institute’s Mr. Sed-
lak says the vast majority of chemicals are re-
moved during wastewater treatment, but even
if some remain, “there is no expectation that
there should be adverse consequences of min-
ute traces of triclosan in the environment,”
where it continues to break down. He adds that
the institute isn’t aware of any studies demon-
strating high levels in drinking water.
The National Toxicology Program, at the re-
quest of the FDA, is studying the potential for
cancer to occur through skin exposure to tri-
closan. The cleaning institute has told the FDA
LISTERIA SHIGELLA
COMMON FOOD SOURCES Soft COMMON FOOD SOURCES
cheeses made with unpasteurized Raw produce
milk, ready-to-eat deli meats DURATION OF ILLNESS 1-2 days
DURATION OF ILLNESS Variable
s STAPHYLOCOCCUS
s SALMONELLA AUREUS*
COMMON FOOD SOURCES Eggs, COMMON FOOD SOURCES Unrefrig-
poultry, meat, raw fruits and erated or improperly refrigerated
vegetables meats, potato and egg salads
DURATION OF ILLNESS 4-7 days DURATION OF ILLNESS 1-2 days
THE WALL STREET JOURNAL.
in comments that it does not believe the study
is necessary based on earlier studies of oral ex-
posure that found no evidence of a cancer-
causing effect relevant to humans. And Mr.
Sedlak says his organization isn’t aware of any
studies that link the low levels of triclosan ex-
posure from its use in consumer antiseptic
products to a risk of cancer.
Researchers continue to disagree over
whether antibacterial soaps provide any bene-
fit over washing with soap and water. A study
by South Korean researchers, published last
year in the Journal of Antimicrobial Chemo-
therapy, found that under “real life” hand-
washing conditions of about 20 seconds, anti-
bacterial soap containing the maximum
amount of triclosan allowed by law was no
more effective than plain soap at reducing con-
tamination from 20 bacterial strains.
But in a 2014 study partly funded by the
American Cleaning Institute and the Personal
Care Products Council, researchers at Rutgers
University had study participants’ hands inocu-
lated with Shigella bacteria before washing
their hands then handling melon balls. Three
antibacterial cleansers, including one contain-
ing triclosan, were significantly more effective
in reducing the concentration of the bacteria
on their hands and the melon balls relative to
two regular soap products. The study was pub-
lished in the Journal of Food Protection.
Popular alcohol-based hand sanitizers are
considered less of a threat to human health and
the development of antibiotic resistance. Still,
the FDA has asked for additional data about al-
cohol-based sanitizers used in hospitals, where
staffers may clean or sanitize their hands up to
100 times a day.
High-stakes fight
For cleaning-products makers, the stakes are
high. The FDA estimates the costs of the pro-
posed rule could be as high as $369 million.
The agency probably wouldn’t require any
product recalls, but companies wouldn’t be
able to put more on the market that didn’t
meet new standards.
Henkel Corp., the maker of Dial soaps, says
that beginning in December 2014, it removed
triclosan from all retail hand soap and foam-
ing-wash products and replaced it with benze-
thonium chloride, which has equivalent perfor-
mance. Procter & Gamble and Johnson &
Johnson have also phased out triclosan, saying
that while evidence has shown it to be safe, to
respond to consumer concerns they are refor-
mulating products with other ingredients.
Colgate Palmolive is approved to use triclo-
san in its Total toothpaste, where studies have
shown it is effective against gingivitis, but re-
moved it from the Softsoap brand in 2012. Col-
gate settled a class-action suit last year claim-
ing it falsely advertised the soaps could kill
most germs. A spokesman says it did so to
avoid the cost of a trial, and denies the allega-
tions of deceptive labeling and marketing.
Some hospital groups are backing away from
certain antibacterials. Kaiser Permanente has
banned triclosan and identified 13 antimicrobial
chemicals it wants banned from its hospitals be-
cause they don’t have health benefits and may
be toxic, says Kathy Gerwig, Kaiser’s environ-
mental-stewardship officer and vice president of
employee safety, health and wellness. “We want
to use our purchasing power to send a message
that it’s not OK to use ingredients that might be
harmful to our health,” Ms. Gerwig says.
Ms. Landro, an assistant managing editor of
The Wall Street Journal in New York, writes
the Journal’s Informed Patient column. She
can be reached at laura.landro@wsj.com.
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THE WALL STREET JOURNAL. Tuesday, February 16, 2016 | R3

Cognitive oncology is here.

Watson for Oncology uses cognitive technologies to help
doctors analyze medical information shared by patients
against a variety of data, both structured and unstructured.
Combined with clinical expertise and external research,
TM
IBM Watson can help identify potential treatment options
for individuals. When Watson thinks with us,
we can outthink disease.

outthink
cancer

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R4 | Tuesday, February 16, 2016
In Search of a Voice
For those who can’t speak, the only option until recently was to
use technology that made them sound robotic. Now the
goal is for them to be able to sound like...themselves.
HOOP IT UP Max Plansky goes public with his new voice in the Northeastern University men’s basketball locker room.
BY AMY DOCKSER
MARCUS
MAX PLANSKY is 16 years old,
and like any teenager, he is
trying to find his own voice.
But for Max, the effort is
complicated by the fact that
he needs to use a communica-
tion device to talk.
At nine months, Max was
diagnosed with cerebral palsy,
a neurological disorder. His
vocal cords vibrate, and Max
can make sounds. But the area
of his brain affected, which
controls his muscles, also con-
trols his ability to speak.
When Max wants to talk, he
chooses words and sentences
on an electronic device, which
then speaks in a computerized
voice often known as “Perfect
Paul.”
Perfect Paul is a common
option on devices like the one
Max uses. But it doesn’t sound
anything like a 16-year-old
boy. It sounds more like an
adult male robot.
But only recently have ad-
Researchers Take
Aim at Metastatic
Breast Cancer
Activists say the deadliest
form of breast cancer has
gotten short shrift until now
BY AMY WESTERVELT
SCIENTISTS and doctors seek-
ing to unravel some of the
mysteries behind the deadliest
form of breast cancer have put
out a call to patients diag-
nosed with the disease: Please
send us your DNA.
Research Resources
Funding for breast-cancer
research at the National
Institutes of Health. While the
NIH doesn’t break out funding for
metastasized breast cancer, one
estimate puts the amount at 7%
of the total, while about 30% of
women diagnosed with breast
cancer will develop the metasta-
sized form of the disease.
$800 million
700
600
500
400
300
200
100
0
2011 ’12 ’13 ’14 ’15 ’16
Note: Figures are for fiscal years ending Sept.
30. Figures for 2015 and 2016 are estimates.
Source: National Cancer Institute
THE WALL STREET JOURNAL.
JOURNAL REPORT | HEALTH CARE
vances in computers and other
technologies made it possible
to analyze the characteristics
and more ethereal aspects of
human voices and mix them
together to the point where an
artificial voice doesn’t sound
so, well, artificial.
Most of these efforts are
commercial and geared toward
improving the synthetic voices
that give you directions or
speak to you on the phone
when you try to make a flight
reservation. But researchers
also are starting to apply the
technology to help people, like
Max, who due to medical con-
ditions are forced to rely on
electronic communication de-
vices. They want a voice that
not only sounds more natural,
but that manages to capture
who they are.
‘A window’
“Speech is not just a means
of communication—it is a win-
dow into the soul,” says Mat-
thew Aylett, chief scientific of-
ficer of an Edinburgh-based
company, CereProc, that sells
These researchers are creat-
ing a national database of pa-
tients’ blood and tumor sam-
ples, along with their medical
records, to better understand
what triggers metastatic, or
stage IV, breast cancer and
how it might be stopped.
Led by the Broad Institute of
MIT and Harvard, a nonprofit
academic research institution
focused on accelerating the un-
derstanding and treatment of
disease, the ambitious Meta-
static Breast Cancer Project is
part of a broader effort to
shine a spotlight on a type of
cancer that many activists say
has gotten short shrift. While
prevention and early detection
of breast cancer has grown im-
mensely in recent decades,
thanks to 30 years of pink-rib-
bon campaigns, the number of
women dying from metastatic
breast cancer has remained
steady at about 40,000 annu-
ally since the 1970s.
‘Incredible’ data
Once breast cancer metas-
tasizes, or spreads elsewhere
in the body, it is almost always
incurable. Metastasis occurs in
about 30% of women diag-
nosed with breast cancer, and
it comes with an average
three-year survival rate. Medi-
cal researchers still have little
idea why breast cancer ad-
vances to stage IV in some
women, and why others—
many of them young—are di-
technology for personalizing
synthetic voices.
To capture inflection and
tone in a synthetic voice is an
enormous challenge, Dr. Aylett
says. People speak faster,
louder or at a higher pitch
when they are upset, or
slower, softer and deeper
when they are sad. The stron-
ger the emotion, the harder it
is to simulate, he says. “Tell-
ing a joke is also tough.”
Another thing that is hard
to capture, says Dr. Aylett, is
the myriad ways a voice can be
used to convey different mean-
ings of the same word. “When
the waiter asks if you have de-
cided what you want,” he says,
“it means something different
if you say ‘Yes!’ or ‘Yessss.’ ”
Building Max a personal-
ized voice is not only a techni-
cal issue; it also involves ques-
tions about his identity. What
sounds might capture the dif-
ferent aspects of Max’s per-
sonality? Moreover, if Max is
to have a synthesized voice,
should it sound like a 16-year-
old speaking, or should it
IN PROTEST Posters at the Capitol last fall showed women who died of metastatic breast cancer.
agnosed with it right away.
They also don’t know why a
tiny percentage of women
with such cancer survive for
more than a decade.
Many blame the lack of
progress on a combination of
anemic research funding—only
7% of the funding for breast-
cancer research goes toward
metastatic cancer, according
to one estimate—and gaps in
the data collected on breast-
cancer patients, a problem the
Metastatic Breast Cancer Proj-
ect is hoping to rectify.
Nikhil Wagle, an oncologist
at the Dana-Farber Cancer In-
stitute and the project’s lead
researcher, says he initially
was just trying to expand his
research subject pool beyond
Boston. But when his team put
out a call for participants,
nearly 1,000 patients enrolled
in the first two months.
“The majority of those pa-
tients have told us about every
aspect of their disease,” Dr.
Wagle says. “That data is in-
credible. This project already
is giving us the opportunity to
ask questions that would have
been really hard to ask if we
were just looking in Boston,”
such as is there something dif-
THE WALL STREET JOURNAL.
ality of the recipient and the He listens to the three voices
clarity of the donor.
Last fall, she and VocaliD
began work on one of their
first customized voices, for
and makes his preference
known. Just as important,
however, is how others will
hear Max’s voice. Later that
Max. It is a process that can
still be painstaking and slow.
day, he and a select group
head to the Northeastern gym,
VocaliD begins by recording
bits and pieces of vocaliza-
where Max has decided he will
publicly use his new voice for
tions and sounds from Max. It
then draws on contributions
the first time after the basket-
ball team finishes its practice.
to the voice bank, some of Dr. Patel feels nervous, she
which were made through the says. “The voice tells secrets
efforts of a nonprofit, You’re and has biases,” she explains.
With Us!, started by Max’s fa- When people hear a voice, they
ther, Michael Plansky. make judgments about whether
As with many startups, someone is intelligent, extro-
costs are initially high. Max’s verted, introverted or attrac-
voice will be one of the first tive. It isn’t easy to figure out
created by the company. The how to acoustically represent
family agreed to pay $10,000— any of these qualities. “How
which they raised with help can we know this is Max’s
from a generous uncle and voice?” she wonders, as every-
aunt and other donors—in re- one arrives at the gym.
turn for three voices Max
could choose from and en- The unveiling
sured delivery by the end of The locker room fills with
2015. With more experience players, Max’s family and
and infrastructure in place, friends, Dr. Patel and her col-
VocaliD is now charging cus- leagues, among others. The
tomers $1,249 plus an annual players flank Max, towering
fee of $240 to tune and mod- over him. Then the buzz in the
MATTHEW MODOONO/NORTHEASTERN UNIVERSITY
ify the voice over time. room settles for a moment.
Max recognizes that even It is Max’s turn to speak:
with a more natural-sounding “Getting a voice from VocaliD
voice, it is still going to be diffi- is going to be a great opportu-
cult for him to communicate. nity for me,” he says. People
The controls for his new voice start to clap and cheer.
will be the same as for his old— Max has chosen the older-
a switch mounted on the head- sounding voice, the one that
rest of his wheelchair, and speaks to the future.
menus of words and sentence “He sounds compassionate,”
that he must choose from. “I Mr. Plansky says. “You feel his
don’t think it will make commu- soul.”
nication easier,” he says. “But I To Zach Stahl, the Huskies’
do think I will like how my new captain, he sounds “cheerful.”
voice sounds more.” “Max lights up when we see
sound more like who Max A big part of Max’s life these him,” Mr. Stahl says.
might become later? days revolves around sports, At the start of the project,
These are issues that Rupal particularly the Northeastern Max mused that the voice be-
Patel, a speech-technology pro- University Huskies men’s bas- ing made for him might end up
fessor on leave from Northeast- ketball team. At the university sounding like his father’s. But
ern University, has been think- gym, he has his own locker (M. when asked about it now, Max
ing about for years. Dr. Patel is Plansky, No. 25) and an endless says, “I sound like me.”
chief executive of VocaliD, a supply of team T-shirts. He at- Dr. Patel once described the
Belmont, Mass., company that tends practice and cheers from technology she is working on
custom-builds voices for the the bench during games. Last by saying, “A new voice is
speech-impaired. She became year, when the team won a con- born.” Maybe that is why in
interested in personalizing syn- ference championship, Max the locker room, after trying
thetic voices, she says, after at- was presented with his own out his voice, Max does what
tending an assistive-technology ring by the captain and the many people do when they
conference where she heard a point guard. witness a birth. He stops talk-
young girl and an older man Dr. Patel says these things ing and begins to cry.
conversing by means of the are never far from her mind as
same synthetic voice. she and Geoff Meltzner, Vo- Ms. Dockser Marcus is a
“How come this young girl caliD’s director of R&D, prepare Wall Street Journal reporter
has the same voice as this adult the voices for Max to choose in Boston. Email her at
male?” Dr. Patel recalls won- from. Played for a reporter, the amy.marcus@wsj.com.
dering. first voice is clear but still a
little robotic. The second is
The right voice higher and boyish. Dr. Patel
Dr. Patel’s company is fo- says it reminds her of Max as A VOICE IS BORN
cused on finding ways to ex- he is now, with his smooth face
tract an individual’s unique and wide smile. The third is See and hear a
sounds and blend them with
the closest match from donor
voices stored in a voice bank
deeper, as if it belongs to
someone a little older, the per-
son Max might be someday.
WSJ
.COM
video of Max
Plansky and his
old and new
she is building. The idea, she On a December morning at voices, at
says, is to capture the person- his school, Max must choose. WSJ.com/HealthReport.
he says many researchers do
these days: hoping a drug
company might be interested.
Still, Dr. Buxton’s work has
added to a growing volume of
data around how the meta-
static process works. “We’ve
moved all the way from not
knowing anything except how
to take a tumor out to know-
ing there are specific recep-
tors on certain tumors that
can suppress growth and de-
veloping treatments that tar-
get those receptors,” he says.
“Now, let’s find out what are
the molecular targets for the
DR. KELLY SHANAHAN
metastatic process per se, and
let’s slam those.”
That is exactly the sort of
thing the Metastatic Breast
Cancer Project hopes to shed
light on as it mines the patient
data it is collecting.
ferent in the metastatic cancer activists to Washington to meet “We want to get a better
that develops in those who get with senators about its “30 for understanding of why some
it before the age of 40? 30” campaign, the goal of patients develop [metastatic
The project plans to make which is to get 30% of breast- cancer] right from the outset,
the data it collects available to cancer research funding in- whether there is something
all metastatic-breast-cancer vested in metastatic research, different in [metastatic can-
researchers. That’s a big step since that is the approximate cer] for those who get it be-
forward, advocates say, since percentage of breast-cancer pa- fore they’re 40 versus after,
the primary national database tients who will get it. and then study those patients
on breast cancer (the National “We’re asking for a redistri- who have an extraordinary re-
Cancer Institute’s SEER data- bution of research funding for sponse to a particular treat-
base) only captures data on breast cancer that’s revenue- ment so we can understand
women diagnosed with stage neutral,” says Kelly Shanahan, why, and what type or types of
IV disease right from the be- an obstetrician diagnosed with patients should also get that
ginning, which is 6% to 8% of metastatic breast cancer two drug,” Dr. Wagle says.
metastatic patients. years ago, and who met with He has already made one
“That is a huge trigger California Sen. Dianne Fein- breakthrough. “I’ve discovered
point for the metastatic pa- stein last year. “It can make a that there are these pockets of
tient community,” says Cory huge difference.” patients who have extraordi-
Painter, the project’s assistant Iain Buxton, head of the nary responses to a class of
director of operations and sci- pharmacology department at drugs I wasn’t even thinking
entific outreach. “They want the University of Nevada, about,” he says.
to be counted.” Reno, says current funding lev- For many metastatic-cancer
els are “draconian.” His lab patients, Dr. Wagle’s project is
Call for funding discovered what he says could giving them something they
In addition to working with be “a cure for breast cancer” in don’t get a lot of: hope.
SEER to widen the type of mice last year when it pin- “It may not save my life,
data being collected on meta- pointed a protein that seems to but maybe this information in
static patients, activists are be a precursor to metastasis, aggregate with everyone else’s
pushing for more research as well as two drugs that effec- might save someone else’s life
funding into the disease. tively block it from moving. down the road,” Dr. Shanahan
Metavivor, a nonprofit “At this point we’d need to says. “That’s really powerful.”
group that gave $1 million in do some serious drug develop-
grants to a handful of cutting- ment, and there just isn’t Ms. Westervelt is a writer in
edge metastatic research proj- funding for that,” Dr. Buxton Truckee, Calif. Email her at
ects last year, has been sending says. Instead, he’s doing what reports@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
THE WALL STREET JOURNAL. Tuesday, February 16, 2016 | R5

JOURNAL REPORT | HEALTH CARE

For the NIH, an Infusion of Cash A Hunger for

Director Francis Collins says the new money is desperately needed Better Food Labels
The FDA plans an overhaul of
Many of these young people nutrition information on packages
BY THOMAS M. BURTON
asked themselves: Do I really to make it more useful for consumers.
want to sign up for a future like But some groups want to go even further.
THE NATIONAL Institutes of that? A survey of more than
Health can see the light at the 3,700 scientists by the Ameri-
BY PRIYA ANAND
end of a decadelong financial can Society for Biochemistry
tunnel—a $2 billion boost to and Molecular Biology found
its current budget, delivered that nearly one-fifth were con- Health experts believe the way to get people to eat better is to
by Congress in December. sidering leaving the U.S. I heard tell them which foods are healthy and which ones aren’t. Nutrition
Francis Collins, director of many heartbreaking stories of facts panels—the little info-boxes on the back of food packages
the nation’s premier agency stress, anxiety and financial that outline calorie, fat, sugar and vitamin counts—are supposed
for biomedical research, calls pain from young scientists on to do that, but research has found that many people don’t look at
it “the most encouraging bud- the front lines. I spoke to a su- them, and even when they do, they don’t help.
get outcome in 12 years.” For perstar young scientist who The Food and Drug Administration has proposed a revision to
2017, the Obama administra- was offered an independent po- the existing facts panel (below left), which has been standard on
DAVID BANKS/BLOOMBERG NEWS

tion is asking for $33.1 billion sition at one of our nation’s most food products since 1994. The changes (right) include a rede-
in spending power, up from leading universities, but looked sign to make calorie information
$32.3 billion this year. at the environment around him, more prominent, as well as a
The rosier outlook for the and decided to take a lucrative
Bethesda, Md.-based agency position in China instead.
follows more than a decade of I got a note from another
basically flat budgets. In- young person who had been of-
creases in 2009 and 2010, in fered a postdoctoral position in
connection with the federal Francis Collins calls the NIH’s funding rise ‘a beacon of hope.’ a top research lab, only to have
economic-stimulus package, the offer rescinded because the
were the exception. Aside This will include $130 million lab’s principal investigator
from that, the NIH, which dis- for the Precision Medicine Ini- Finding Funding learned their grant wasn’t go- Larger type
burses about 84% of its fund- tiative Cohort, which will en- The annual budget for the ing to get funded because of emphasizes
ing to hospitals and academic roll one million or more indi- National Institutes of Health, the sequester. Just think what importance
centers and does world-class viduals who will agree to which goes almost entirely the loss of even a few future of these two
research at its main campus, share their electronic health toward research Nobel Prize winners and their items
too, has been losing spending records and other data, includ- Stimulus breakthrough discoveries would
power since 2003. ing genomic information and $40 billion mean for our nation, in terms
funding
What has this meant for environmental exposures. 35 of public health and global eco-
cutting-edge medical research A database of this scale— 30
nomic standing.
on cancer and other diseases— with appropriate privacy pro- The renewed commitment Shows how
and for the scientists them- tections—will create the foun- 25 to funding NIH science stands much sugar was
selves? The Wall Street Jour- dation for a wealth of new 20 as a beacon of hope for the change as to what put into the product
nal asked Dr. Collins to share research studies that can lead 15 next generation of U.S. bio- is considered a sin- on top of natural
some insights. Edited excerpts to new prevention strategies, medical researchers. Not only gle serving size to sugars in
follow. novel therapeutics and innova- 10 will it improve the odds of reflect the growth the ingredients
tive medical devices. 5 their grants being funded, it in the portion sizes
Regaining momentum The other $70 million will go 0 signals that our nation has people eat in the
WSJ: To what degree will the for the Precision Medicine On- turned the corner and is now last two decades. The hope is that the changes will reflect the lat-
2005 ’07 ’09 ’11 ’13 ’15
new funding begin to reduce cology project. This effort will prepared to support a vision est nutrition science and help people make smarter choices as the
Note: For fiscal years ending Sept. 30.
the shortfall that your agency include new studies of how the Figures for 2015-16 are estimates. in which America truly values U.S. faces an obesity problem.
has felt in recent years? DNA from an individual tumor Source: National Institutes of Health biomedical research and trea- Some researchers say the proposed labels are an improvement
DR. COLLINS: Between 2003 can be used to predict the right THE WALL STREET JOURNAL. sures its status as the world’s but still don’t make clear to consumers what the net value of a
and 2015, NIH lost more than choice of targeted therapies, biomedical leader. food could be. So they are devising alternative approaches. Here
20% of its purchasing power how resistance to therapy can real time to produce an ex- If our nation is willing to are some other ideas for a better label.
for research due to flat bud- occur, how to apply new nonin- traordinarily complex array of provide creative minds with the
gets, inflation and sequestra- vasive methods to track re- human behaviors. steady upward trajectory of
tion. Many innovative research sponse to therapy, and how to support they need to pursue NUVAL SCORES
ideas have been left on the ta- begin to test new combinations Brain drain exceptional research opportuni-
ble; last year, NIH was able to of targeted cancer drugs. WSJ: You’ve spoken of your ties, I can assure you that the
fund only about 1 in 6 grant fears that top young scientists 21st century will be the time
applications—about half its WSJ: Will current NIH research will leave the U.S., or never when we discover answers to
historical funding rate. get more funding too? come here. Have we already many of the questions that
Thanks to our 6.6% budget DR. COLLINS: More than $1 bil- lost some? Will new money be- have vexed humankind for all of
increase for fiscal year 2016, lion will bolster activities gin to solve the problem? history—revelations that will
NIH will have the capacity to across NIH’s broad and diverse DR. COLLINS: After sequestra- revolutionize medicine. I’m op-
invest strategically in signifi- portfolio of basic, translational tion took effect in 2013, a gen- timistic about our future. Medi-
cantly more of the extraordi- and clinical research. eration of bright young minds cal science has never been
nary scientific opportunities NIH will add $85 million to considering a career in U.S. bio- more exciting than right now.
on the horizon. But it will be the Brain Research through medical research found them- Wherever I go, I’m telling
critical to sustain this momen- Advancing Innovative Neuro- selves in the worst financial en- young people that there’s never
tum in the coming years. technologies (BRAIN) Initia- vironment in 50 years. They been a better time to get in-
tive. This initiative is for de- saw many senior scientists volved in biomedical research. The NuVal Nutritional Scoring System, designed by medical and
WSJ: What new investments velopment of tools to struggling to keep their labs nutrition experts led by David Katz, chairman of the Yale-Griffin
does NIH plan this fiscal year? construct dynamic pictures of afloat, suffering rejection upon Mr. Burton is a reporter in the Prevention Research Center, grades food based on a scale of 1 to
DR. COLLINS: One will be $200 the brain, revealing how mil- rejection of grants that previ- Washington bureau of The 100.
million to support the new lions of brain cells and com- ously would have been sup- Wall Street Journal. Email The score is calculated based on positives, such as protein, cal-
Precision Medicine Initiative. plex neural circuits interact in ported. him at tom.burton@wsj.com. cium and other nutrient content, and negatives like sugar and cho-
lesterol. Consumers who read the current nutritional labels must
determine the overall health value of a food based on disparate
pieces of information about nutrient content. NuVal instead boils
all the information down so consumers can consider just the final

The High Cost of Cancer Care— the patient for financial as-
sistance when there is high
financial toxicity.
score. “What the [FDA] is giving people is a map and a compass,
and some instructions to use them,” Dr. Katz says. “NuVal gives
them GPS.” Nearly 2,000 supermarkets currently place NuVal la-

And the Physical Toll It Takes WSJ: Are you advocating

changing treatment for pa-
bels on their shelves.

tients who have difficulty TRAFFIC LIGHT

can use to assess whether years, we began thinking paying for care?
BY LISA WARD
cancer patients are finan- about how the physical side DR. DE SOUZA: Not necessar-
cially stressed. By using the effects of cancer treatment— ily, but like any other side
DOCTORS who supervise questionnaire, Dr. de Souza vomiting, headaches or hair effect it should be disclosed
cancer treatments have long says, doctors can help pa- loss—affect a patient’s qual- and discussed with the pa-
been concerned about side tients better understand the ity of life. Financial toxicity tients, so there is an oppor-
effects, including fatigue, risks they face and avoid the is another important side ef- tunity to adjust the treat-
hair loss and depression. To potential harm that can come fect that needs to, at the ment if a patient wants, not
that list, some now add the from the financial impact. very least, be disclosed to that they always do.
potentially harmful effects of The Wall Street Journal patients, though it’s often ta- I had this discussion with
costly treatments. spoke with Dr. de Souza boo for physicians to think one patient, who decided to The traffic light rating system, developed by the Food Standards
Researchers call it “finan- about his research into finan- about cost, let alone discuss continue with his treatment Agency in the U.K., assigns a red, amber or green background to
cial toxicity.” The financial cial toxicity. Here are edited it in the context of care. [unchanged] and address the the saturated-fat, sugar and salt categories on food labels. A food
burdens that some patients excerpts of the conversation. Cancer patients who are financial issues later. Now he high in sugar but low in fat would be marked red for sugar and
suffer as a result of the cost feeling the effects of finan- has recovered, [though] his green for the fat category, giving consumers the ability to make
of their treatments can WSJ: What causes financial cial toxicity have said things home is in foreclosure. Still, their decision based on which they care about more, or by compar-
cause damage to their physi- toxicity? like: he says it was totally worth ing the totals to those on other similar foods.
cal and emotional well-being. DR. DE SOUZA: Lost income “I am used to always it because he is cured.
Repercussions can include or high out-of-pocket costs working—paying bills on
delaying or forgoing the for treatment, medication or time. Now the illness took WSJ: That is standard prac- GUIDING STARS
treatment and only partly related care. It varies by the this all away.” tice for physical side effects,
filling or even avoiding tak- type of cancer. “You can’t work, you can right?
ing prescribed medication. get fired. Right now my job DR. DE SOUZA: It is, espe-
To help such patients, Jo- WSJ: Why is it a clinical con- is being held, but long term I cially for extreme cases
nas de Souza, an assistant cern? am worried.” where the side effects are re-
professor of medicine at the DR. DE SOUZA: Historically A physician could consider ally debilitating. If a patient
University of Chicago Medi- physicians have focused on switching to a less expensive is so tired he can barely
cal Center, has developed a survival—prolonging a pa- medication, decreasing the function, it’s not uncommon
questionnaire that physicians tient’s life. Over the past 20 number of tests or referring to offer to change the ther-
apy or the dosage.

Financially Ailing... And Stressed About It WSJ: You are also building a
Bankruptcies per 1,000 person-years were The percentage of surveyed working-age cancer database. Why?
far higher for cancer patients than control survivors who said they: DR. DE SOUZA: Ideally we
groups, western Washington state, hope to see if certain treat-
64% Ever worried about paying large bills related to cancer ments cause more distress
1995-2009, by age
34% Had to borrow money or go into debt* than others, and if there are
12 Cancer similar treatments that are
Control 3.1% Ever filed for bankruptcy* less financially toxic. We are The Guiding
10
40% Had to make any other kinds of financial sacrifices* also interested in seeing how Stars nutrition labels,
8 cancer patients’ toxicity developed in 2006, feature a
Among those who reported going into debt, fares over time. When do pa- blue human figure with one, two or
6 the percentage who said they: tients hit rock bottom? three gold stars floating above its head to indicate the food’s
4 87% Ever worried about paying large bills related to cancer When is the best time to in- health value. The more stars, the more nutritious the food.
tervene? This is likely to be The system assigns stars based on an algorithm that considers
2 9.1% Ever filed for bankruptcy* different for different types vitamins, minerals, fiber, whole grains and other positive factors
68% Had to make any other kinds of financial sacrifices* of cancer. against negatives, such as added sugars, trans and saturated fat
0
and cholesterol listed on the nutrition label. More than 1,500 U.S.
20-34 35-49 50-64 65-79 80-90 *Because of their cancer, its treatment or the lasting effects of that treatment.
Ms. Ward is a writer in supermarkets assign these labels to foods, Guiding Stars says.
Source: Analysis of data from the Livestrong 2012 survey by Matthew P.
Note: People in the control groups were matched to cancer Banegas et al., Health Affairs, January 2016; 4,719 total respondents; 1,583 Mendham, N.J. She can
patients by age, sex and ZIP Code of residence. respondents who reported going into debt be reached at Ms. Anand is a reporter for MarketWatch in New York. She can be
Source: Scott Ramsey et al., Health Affairs, June 2013 THE WALL STREET JOURNAL. reports@wsj.com. reached at panand@marketwatch.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
R6 | Tuesday, February 16, 2016 THE WALL STREET JOURNAL.

JOURNAL REPORT | HEALTH CARE

Here’s a Way to Cut Your Health-Care Bill: Pay Cash

Hospitals and other providers increasingly offer prices far below what they charge though insurance
BY MELINDA BECK
AS CONSUMERS GET savvier about
shopping for health care, some are
finding a curious trend: More hospi-
tals, imaging centers, outpatient sur-
gery centers and pharmacy chains
will give them deep discounts if they
pay cash instead of using insurance.
When Nancy Surdoval, a retired
lawyer, needed a knee X-ray last
year, Boulder Community Hospital in
Colorado said it would cost her
$600, out of pocket, using her high-
deductible insurance, or just $70 if
she paid cash upfront.
When she needed an MRI to in-
vestigate further, she was offered a
similar choice—she could pay $1,100,
out of pocket, using her insurance,
or $600 if she self-paid in cash.
Rather than feel good about the
savings, Ms. Surdoval got angry at
her carrier, Blue Cross Blue Shield of
Arizona. “I’m paying $530 a month
in premiums and I get charged more
than someone who just walks in off
the street?” says Ms. Surdoval, who
divides her time between Boulder
and Tucson. “I thought insurance
companies negotiated good deals for
us. Now things are totally upside
down.”
Deep discounts
Not long ago, hospitals routinely
charged uninsured patients their
highest rates, far more than insured
patients paid for the same services.
Now, in the Alice-in-Wonderland
world of health-care prices, the op-
posite is often true: Patients who
pay up front in cash often get better
deals than their insurance plans
have negotiated for them.
That is partly due to new state and
federal rules aimed at protecting un-
insured patients from price gouging.
(Under the Affordable Care Act, for
example, tax-exempt hospitals can’t
charge financially strapped patients
much more than Medicare pays.)
Many hospitals also offer discounts if
patients pay in cash on the day of
service, because it saves administra-
tive work and collection hassles. Cash
prices are officially aimed at the un-
insured, but people with coverage
aren’t legally required to use it.
Hospitals, meanwhile, have sought
ever-higher rates from commercial
insurers to make up for losses on
other patients. Insurers pass those
negotiated rates on to plan members,
and given the growth in high-deduct-
ible plans, more Americans are pay-
ing those rates in full, out of pocket,
than ever before.
“When you had just a $20 copay,
you didn’t care what rate your in-
The Cash Advantage
Patients who pay cash upfront for medical services can sometimes make out
better than they would by using their insurance, especially if they have high-
deductible plans and pay the insured rate in full. Some examples:
SELF-PAY INSURANCE
PROCEDURE FACILITY | CITY
MRI of the Regional Medical
foot Imaging | Flint, Mich.
Tonsillectomy Banner Desert Medical
Center | Mesa, Ariz.
MRI of the Boulder Community
knee Hospital |
Boulder, Colo.
Note: Insurers’ rates may vary by plan. *Not including physicians’ fees, typically $1,000 to $1,400.
Sources: the providers; insurers’ cost-estimator tools
surer negotiated with your doctor.
But it only takes one $3,000 MRI bill
for people to say, ‘Wait a minute—
where did this come from?’ ” says
Jeanne Pinder, founder of Clear-
healthcosts.com, one of several
startups that publish hard-to-find
health-care prices for consumers.
Shifting relationships
ClearHealthCosts has compiled
self-pay prices for dozens of tests
and procedures in eight cities and
found a vast range. In Houston, an
MRI for the lower back can cost as
little as $750 at an imaging clinic
and as much as $1,961 at an aca-
demic medical center. A colonoscopy
in San Francisco is $600 at one sur-
gical center and $5,500 at another.
Finding the negotiated rates for
those same services is tougher, since
many insurance contracts bar payers
and providers from disclosing them.
But individual plan members can see
that information on their Explana-
tion of Benefit statements, so Clear-
HealthCosts has joined with public
radio stations in New York, California
and Pennsylvania, asking listeners to
anonymously post what their health
provider charged, what their insur-
ance paid and what they paid out of
pocket. Thousands have responded,
showing that in many cases, while in-
surers had negotiated a big discount
off the provider’s original charge, the
negotiated rates were still higher
than the service would have cost in
cash at the same place or nearby.
INSURANCE
RATE RATE COMPANY
$379 $445 Aetna
$2,858* $5,442 Arizona Blue
Cross Blue Shield
$600 $1,100 Arizona Blue
Cross Blue
Shield
THE WALL STREET JOURNAL.
“My favorite was the $5,400 MRI
at an academic medical center in
California,” Ms. Pinder says. “Insur-
ance paid about $2,900 and the pa-
tient paid about 2,500. It looked like
he got a great deal—but he could
have paid $725 cash down the
street.” When people see this data,
she says, “they don’t behave the
same way in the marketplace again.”
Indeed, the growing price trans-
parency is starting to shake up tradi-
tional relationships between payers,
providers and patients.
James Lazarus, a vice president of
Advisory Board Co., who advises
hospitals on self-pay prices, says of-
fering cash rates that are lower than
insurance-negotiated rates could vio-
late contract provisions. “If insurers
find out that plan members are able
to access a cheaper cash rate, they’ll
call up the hospital and say, ‘That’s
our new contracted rate,’ ” he says.
Some providers do keep their
cash rates quiet, in fear of losing ne-
gotiating power with insurers. But
others are eager to have their low
cash prices known—and see them as
a way to compete for business and
assist patients who might otherwise
have to forgo care.
Boulder Community Hospital
hasn’t had complaints from insurers,
says Chief Financial Officer Bill Mun-
son. “Patients have the right under
federal law to request that we not bill
their insurance,” he says, “and when
they do, they have the right to partic-
ipate in our self-pay program.”
Regional Medical Imaging of Flint,
Mich., says some insurers actually
encourage their plan members to
take advantage of its low cash
prices. (An MRI of the knee there
costs cash payers $265, but $510 out
of pocket for an Aetna member with
a high-deductible plan.) “It’s crazy, I
know. But what do the insurance
companies care? They’re collecting
premiums, and they aren’t having to
pay out when patients pay cash in-
stead,” says Amy Davis, the imaging
company’s chief operations officer.
Amy Oldenburg, Aetna’s vice pres-
ident of network and product strat-
egy, says Aetna members who find
they can save money by paying cash
“should make the best choice based
on their needs.” But, she cautions,
they could be paying for unneces-
sary procedures and are missing out
on the opportunity to have Aetna co-
ordinate their care.
Clare Krusing, a spokeswoman for
America’s Health Insurance Plans, an
industry group, says its members ha-
ven’t reported many instances of
cash prices undercutting their in-
sured rates, but when it occurs, “it’s
really a question for providers—why
are they accepting lower rates than
they could get through insurance?”
The American Hospital Associa-
tion says its members fear high-de-
ductible plans will increase their bad
debt and leave even uninsured pa-
tients unable to afford care. Offering
cash discounts helps with both, says
Tom Nickels, an AHA executive.
Meanwhile, hospitals have to
charge insured patients more to
cover losses on Medicare and Medic-
aid patients, he says. “Health plans
have been complaining complained
about this for years. We have com-
plained along with them. The gov-
ernment doesn’t pay its fair share.”
Patients who encounter big price
discrepancies are complaining as
well—generally to their insurers. Ms.
Surdoval says she called her carrier
repeatedly to ask why using her in-
surance cost more than cash. “The
standard response was, ‘We can un-
derstand why you might be upset
about that.’ It was like they were
reading a script.”
Jeff Stelnik, senior vice president
of strategy, sales and marketing at
Blue Cross Blue Shield of Arizona,
says that cases where cash rates are
lower than its contracted rates are
“very infrequent” and that high-de-
ductible plans “are a great opportu-
nity for consumers to make their
own decisions.”
Patient dilemma
Self-pay discounts, however, do
present patients with a dilemma:
Most insurers won’t count cash pay-
ments toward their deductibles. So
savvy health-care shoppers have to
guess whether they are likely to have
a major medical expense during the
year, or stay relatively healthy and
thus save money by paying cash.
Ms. Surdoval bet she would need
knee surgery, so rather than pay
$600 for an MRI in Boulder, she went
to a doctor at New York’s Hospital
for Special Surgery who had treated
her before. The MRI there was
$2,800, but paying it through her in-
surance put her over her $3,500 de-
ductible for the year, so the $30,000
she was charged for knee surgery in
June was covered in full.
With her out-of-pocket maximum
met for the year, Ms. Surdoval says
she spent the rest of 2015 getting all
the medical care she needed before
her deductible rose to $6,000 this
year.
Ms. Beck is a Wall Street Journal
senior editor in New York. Email
her at melinda.beck@wsj.com.
SHOPPING TIPS
Prices can vary greatly
WSJ
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for all kinds of health
services. Read how to
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