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Business&Finance Jolts Fiat Chrysler iat Chrysler tapped FMike Manley as CEO to BY CHESTER DAWSON succeed Marchionne, whose worsening health after DETROIT—The deteriorat- surgery forced the company ing health of Sergio Marchio- to appoint a successor ear- nne forced Fiat Chrysler Auto- lier than expected. A1 mobiles NV to replace him as CEO this weekend, a sudden Many bonds globally change at a company dealing are becoming harder to with a rapidly evolving indus- trade, prompting some inves- try and a global trade dispute. tors to shift to other markets “It is with great sadness that and raising concerns about a I have to tell you that our CEO broad decline in liquidity. A1 Sergio Marchionne, who re- Tesla asked some sup- cently underwent surgery, un- pliers to refund cash the fortunately experienced compli- auto maker had already cations that have worsened in spent to sustain opera- recent hours and will prevent tions at a critical time. B1 his return to FCA,” Fiat Chair- man John Elkann told employ- Pimco’s risk-controls ees in a letter Saturday. chief De Leon quit after alle- Fiat Chrysler hadn’t specified gations he acted inappropri- the nature of Mr. Marchionne’s ately toward a colleague. B8

RICHARD SELLERS/PA WIRE/ZUMA PRESS illness but said earlier this Atos agreed to pay $3.4 IL VINCITORE: Francesco Molinari captured the 147th British Open Championship on Sunday. At one point six golfers were tied for month that he had an operation billion for Syntel, in a deal the lead, including Tiger Woods, Rory McIlroy and Jordan Spieth. Mr. Molinari is the first Italian winner. A14 on his right shoulder. that would give the French Company officials have said firm access to U.S. finan- privately that he has been ab- cial-services heavyweights. B3 sent from his day-to-day role at the company for weeks. It Meat is piling up in U.S. wasn’t clear how serious the cold-storage warehouses, Bond Market Is Less Liquid surgery was and when Mr. fueled by a surge in sup- Marchionne’s condition began plies and trade disputes to grow worse. “We were very that are eroding demand. A1 Debt securities are broad decline in liquidity. ingly unruly and expensive. treme market stress in Italy careful to be transparent,” a The two biggest U.S. The median gap between Liquidity, a measure of the and emerging markets have company spokesman said. public pension funds earned harder to trade, the price at which traders of- capacity to trade securities highlighted just how quickly Fiat Chrysler named Mike more than 8% for the sec- causing investors to fer to buy and sell, a proxy for without significantly affecting trading conditions can deteri- Manley to succeed Mr. Marchio- ond straight fiscal year, but the ability to move in and out the price, has been a growing orate, exacerbating concerns nne as chief executive. The 54- cut future expectations. B1 shift assets elsewhere of markets quickly, has wid- concern since the financial cri- that markets are becoming year-old was one of Mr. Mar- ened this year across Euro- sis. Traders say it has gener- more vulnerable to a shock as chionne’s top lieutenants since Papa John’s board voted BY RIVA GOLD pean corporate debt and ally weakened across markets, central banks slow the stimu- 2009 and most recently ran the for a “poison pill” to prevent AND CHRISTOPHER WHITTALL emerging-market government including stocks, bonds and lus they have supplied for a auto maker’s Jeep SUV and Ram the company’s founder from and corporate bonds, accord- commodities, as the large decade. truck brands—two of the com- gaining a controlling interest Many bonds around the ing to data from trading plat- banks that once kept these “The global tide of liquidity pany’s most profitable units. in the pizza chain. B3 globe are becoming harder to form MarketAxess. Trading in markets running have pulled that quantitative easing The British-born executive trade, prompting some inves- some derivatives has picked up back in response to limits on spurred is now slowly, slowly inherits a company that in re- World-Wide tors to shift to other markets as traders pull back from bond their risk-taking. moving in reverse,” said Na- cent years has made progress and raising concerns about a markets they view as increas- But recent episodes of ex- PleaseturntopageA6 PleaseturntopageA8

As the administration prepares for another Trump-Putin summit, there is division in U.S. ranks over China’s Global U.S. Meat Stockpiles Surge Moscow’s intentions and whether the two sides will be able to cooperate. A4 Building Spree Hits As Tariffs Eat Into Exports The president’s job ap- proval rating rose to 45% BY JACOB BUNGE ficials said. in a new Wall Street Journal/ Trouble in Pakistan The meat industry’s grow- NBC News poll, the highest of On Ice Billions of pounds of meat ing production already is fill- his tenure, and up 1 percent- Red meat and poultry in U.S. are piling up in U.S. cold-stor- ing the specialized ware- age point from June. A4 storage facilities are approach- To fund a 70-nation infrastructure initiative, age warehouses, fueled by a ing the highest level ever. houses built to store meat Trump tweeted a surge in supplies and trade and other goods. “We are threat to Iran in capital Beijing has extended loans in opaque deals disputes that are eroding de- Chicken Pork packed full,” said Joe Rumsey, letters warning of major mand. Beef Turkey president of Arkansas-based consequences if it contin- BY JEREMY PAGE British imperial rule, would Federal data, coming as Zero Mountain Inc. The com- 2.5 billion pounds ued to threaten the U.S. AND SAEED SHAH help make Pakistan a show- early as Monday, are expected pany’s five storage facilities See wsj.com case for its global infrastruc- to show a record level of beef, 2.0 serve as way stations for tur- LAHORE, Pakistan—Paki- ture-building spree. pork, poultry and turkey be- keys and chicken strips be- The FBI released are- stan’s first metro, the Or- Instead, it has become ing stockpiled in U.S. facili- 1.5 tween processors and retail- dacted version of a sur- ange Line, was meant to be emblematic of the troubles ties, rising above 2.5 billion ers, holding around 250 veillance warrant applica- 1.0 an early triumph in China’s that are throwing China’s pounds, agricultural analysts million pounds of products on tion on Page, reigniting quest to supplant U.S. influ- modern-day Silk Road initia- said. any given day. partisan skirmishes. A4 0.5 ence here and redraw the tive off course. U.S. consumers’ appetite Growing meat stockpiles Israel’s military said it world’s geopolitical map. Three years into China’s for meat is growing, but not 0 may bring down prices for fired toward Palestinians Financed and built by Chi- program here, Pakistan is fast enough to keep up with 2009 ’11 ’13 ’15 ’17 meat-hungry U.S. consumers, in Gaza who were launching nese state-run companies, heading for a debt crisis, record production of hogs and Source: USDA data via Steiner along with restaurants and re- flaming balloons into Israeli the soon-to-be-finished over- caused in part by a surge in chickens. That leaves the U.S. Consulting Group tailers. But slowing overseas territory, posing a challenge head railway through Lahore Chinese loans and imports meat industry increasingly re- THE WALL STREET JOURNAL. sales and rising domestic to a fragile cease-fire. A9 is among the first projects in for projects like the Orange liant on exports, but Mexico stockpiles threaten profit for China’s $62 billion plan for Line, which Pakistani offi- and China—among the largest and other goods. U.S. hams, meat processors and prices Officials probing the Pakistan. Beijing hoped the cials say will require public foreign buyers of U.S. meat— chops and livers have become for livestock and poultry pro- sinking of a tour boat in $2 billion air-conditioned subsidies to operate. have both set tariffs on U.S. sharply more expensive in ducers. Since the end of May, Missouri are focusing on metro, sweeping past crum- China’s global plan, called pork products in response to those markets, which is start- prices of lean hog futures at the operator’s use of bling relics of Mughal and PleaseturntopageA10 U.S. tariffs on steel, aluminum ing to slow sales, industry of- PleaseturntopageA2 weather data before em- barking on the cruise. A3 A gunman opened fire on America’s Children Make a Stand for Lemonade a busy Toronto street injur- INSIDE ing nine people in what po- iii lice described as a mass ca- sualty situtation. A9 Little vendors run afoul of local laws; grown-ups give ‘legal-ade’ BY CORINNE RAMEY bursting into tears. Ben hid. “I CONTENTS Opinion...... A15-17 put my hat over my face,” Ben, Banking & Finance B8 Outlook...... A2 Business News...... B3 Sports...... A14 Two months ago, the Guffey now 7, said. “I didn’t want to Crossword...... A14 Technology...... B4 family set up a lemonade see anyone.” Heard on Street.... B9 U.S. News...... A2-6 stand in a Denver park. Six- The incident spurred their Life & Arts...... A11-13 Weather...... A14 year-old Ben manned the cash mother, Jennifer Knowles, into CBS/GETTY IMAGES Markets...... B9-10 World News...... A7-9 register. Four-year-old William action. She has since founded recruited customers. Two- advocacy group Lemonade A MUSEUM SAUDIS SEEK > year-old Jonathan sampled the Stand Mama, started a peti- product. tion to change local laws and TAKES JOKES GLOBAL Then the police showed up, been interviewed on national SERIOUSLY INVESTORS telling the boys they needed TV. She hopes to publish a three separate permits for book. “I want to make it safe s 2018 Dow Jones & Company, Inc. All Rights Reserved their stand. William offered for our kids to have lemonade LIFE & ARTS, A11 WORLD NEWS, A7 them some lemonade before Constitutional guarantee? PleaseturntopageA10 每日免费获取报告 1、每日微信群内分享5+最新重磅报告； 2、每日分享当日华尔街日报、金融时报； 3、每周分享经济学人 4、每月汇总500+份当月重磅报告 （增值服务）

扫一扫二维码 关注公号 回复：研究报告 加入“起点财经”微信群。 A2 | Monday, July 23, 2018 **** THE WALL STREET JOURNAL. U.S. NEWS

THE OUTLOOK | By Jason Douglas ECONOMIC CALENDAR

Smaller Players Caught in Trade Fight MONDAY: The National Asso- ciation of Realtors releases its In a global macroeconomic forecasting also on the list, is down 2.1%. June report on existing-home trade conflict, at the National Institute for Open Danger Hungarian Prime Minister sales in the U.S. Home sales the big play- Economic and Social Re- Small, open economies could be vulnerable in a global trade conflict. Viktor Orban was Europe’s have been weak in recent ers might not search, a nonpartisan London first head of government to months, largely because of an Share of exports linked to global supply chains be the biggest think tank. endorse Mr. Trump and his inventory shortage that is driv- losers. Instead Most exposed Least exposed America-first foreign policy. ing up prices. Economists sur- it might be smaller, open he U.S. has imposed Taiwan 67.6% Turkey 41.0% His country could be among veyed by The Wall Street Jour- countries caught in the mid- T tariffs on imported Hungary 65.1 U.S. 39.8 the biggest casualties if trade nal expect sales to rise 0.4% in dle, such as Hungary, the steel, aluminum, solar Czech Rep. 64.7 Colombia 37.9 tensions escalate. Hungary June from the prior month. Czech Republic, Taiwan, Sing- panels and washing ma- draws in components from TUESDAY: Turkey’s central South Korea 62.1 Brazil 35.2 apore and South Korea. chines, in addition to $34 bil- Germany, Russia and the U.S. bank releases a policy statement Singapore 61.6 Croatia 34.0 What these places have in lion in Chinese imports, and to make computer equipment after investors dumped the New Zealand 33.3 common is they are heavily has said it could widen China Malaysia 60.4 and automobiles that it sells Turkish lira. The currency integrated into global supply tariffs to hit $500 billion in Ireland 59.2 Argentina 30.5 back to Germany as well as plunged 3.5% after President Re- chains—importing raw mate- imports while also slapping Source: World Trade Organization THE WALL STREET JOURNAL. Italy and the U.K. cep Tayyip Erdogan appointed rials and components from new charges on imported The auto industry accounts his son-in-law as finance minis- other parts of the world be- cars. In all, threatened tariffs followed by Singapore and Gavin Transport Ltd., handles for 29% of Hungary’s annual ter and put in place measures fore combining them in their reach nearly $900 billion Korea. WTO data shows that imports and exports between manufacturing output, ac- that could curb the indepen- own factories into new prod- worth of goods imported into between 60% and 70% of Ireland, other parts of Europe cording to the Hungarian In- dence of Turkey’s central bank. ucts they then sell abroad. the U.S. China and others these countries’ exports are and the U.S. vestment Promotion Agency, THURSDAY: The European Nestled within the web of have retaliated and say they used in global supply chains, Mr. Gavin said his business making it especially vulnera- Central Bank releases a policy economic links joining coun- will respond in kind to any where different stages of pro- and the wider Irish economy ble to Mr. Trump’s proposed statement. In June, the euro- try to country, such econo- U.S. escalation. duction are located in differ- is heavily reliant on foreign tariffs on EU auto imports. zone’s annual rate of inflation mies face an outsize hit from An analysis by Pictet Asset ent parts of the world, expos- investment and trade, espe- The International Mone- rose above the ECB’s target for the higher import costs and Management of World Trade ing them to disruptions in cially with the U.S. He said he tary Fund estimates growth the first time since early 2017. weaker demand for exports Organization data estimated global trade. has five shipping containers in developing European econ- And in early June, the bank said that would likely flow from small countries’ vulnerability Their economies were hit of aluminum and steel parts omies will slow to 3.6% in it expected to end its loose an escalation in protection- to trade conflicts based on hard after the financial crisis languishing in warehouses af- 2019, from 4.3% in 2018 and monetary policy in December, ism. their participation in globe- in 2007 and 2008, which ter President Donald Trump 5.9% in 2017. citing its increased confidence Though big economies spanning industrial supply sank global trade. Hungary’s imposed tariffs on the metals Luca Paolini, chief strate- that inflation would settle at its such as the U.S. would also chains. Among those least economic output contracted in May. gist at Pictet, which manages target of close to but just below face turbulence, they produce vulnerable are economies fo- 6.6% in 2009, while the Czech $193 billion of assets, said in- 2% over the medium term. a lot of parts and raw materi- cused less on adding value to Republic’s output contracted ome of these countries vestors seeking shelter FRIDAY: The U.S. Commerce als at home and are fueled by exports through manufactur- 4.8%, according to the Inter- S are already big losers in should consider not just the Department releases economic- domestic consumption, offer- ing or services and more on national Monetary Fund. Tai- the eyes of investors. level of a country’s exposure growth figures for the second ing a partial shield to a producing raw materials, wan suffered its worst reces- South Korea’s Kospi stock in- but also its political and fi- quarter. Gross domestic product downturn in global trade. such as Saudi Arabia, Argen- sion in decades. dex is down 7.5% so far this nancial stability, its debt rat- grew at a weak 2.0% annual rate “If you are a small, open tina and New Zealand. In Ireland, another small year, while Singapore’s ing and its level of foreign re- at the beginning of this year. economy that depends on Taiwan, Hungary and the economy that is high on the Straits Times index is down serves. Economists surveyed by the trade, you are more vulnera- Czech Republic topped the list, Eoin Gavin, managing di- 3.7% and Hungary’s BUX in- —Drew Hinshaw WSJ expect growth to hit a ble,” said Amit Kara, head of list of vulnerable countries, rector of logistics firm Eoin dex is down 10.8%. Malaysia, contributed to this article. 4.2% rate. U.S. WATCH

CALIFORNIA Accused Trader Joe’s Gunman Is Booked A gunman who took dozens of people hostage at a Trader Joe’s store in Los Angeles was booked Sunday on suspicion of murder, after an employee was killed during the man’s shootout with police. Gene Evin Atkins, 28 years old, remained behind bars on Sunday in lieu of $2 million bail, according to Officer Drake Madi- son, a Los Angeles police spokesman. A 27-year-old Trader Joe’s employee, Melyda Corado, was killed as Mr. Atkins ran into the supermarket in the city’s Silver Lake neighborhood on Saturday. Police didn’t provide any addi- tional details on Sunday and it remained unclear whether she died from police gunfire or was killed by the gunman. —Associated Press

MARYLAND Woman Impaled By Beach Umbrella A woman on the beach was impaled in the chest by an um- brella Sunday in Ocean City, a spokeswoman for the Maryland beach town said.

DANIEL ACKER/BLOOMBERG NEWS The victim, a 54-year-old U.S. consumers’ appetite for meat is growing, but not fast enough to keep up with record production of hogs and chickens. Above, a Smithfield pork facility in Missouri woman, was conscious when the accident happened, but her con- Meanwhile, some analysts meat and poultry in U.S. cold- the USDA has reported zero Netherlands-based New- dition wasn’t known, according Storehouses said, pork processors recently storage facilities as of the end weekly export sales of pork to Cold, which specializes in au- to the spokeswoman, Jessica have reduced some hours at of May, running 8% above the the country. tomating the handling of fro- Waters. plants, and some plants even prior-year period—and just Mexico, the top export zen and refrigerated foods, Last week, a London woman Of Meat have turned away hogs, Ms. slightly below the record. market for U.S. pork, in June opened a facility in Tacoma, was impaled by a beach um- McCracken said. Representa- Meat is often kept frozen implemented a 10% tariff that Wash., this year. brella at the New Jersey shore. tives for Smithfield Foods and in cold-storage facilities for climbed to 20% this month. “There is a general lack of Authorities said part of the um- Rise in U.S. JBS SA, the two largest U.S. months, though if it becomes While overall exports to Mex- cold-storage capacity,” said brella pierced her ankle. pork processors, had no com- unprofitable for meat compa- ico have been running slightly Jonas Swarttouw, NewCold’s —Associated Press ContinuedfromPageOne ment. A spokesman for Tyson ahead of last year’s total, new U.S. manager. The company is the Chicago Mercantile Ex- Foods Inc. said the company’s weekly export sales reported building another facility for THE WALL STREET JOURNAL change have dropped 14%. pork production has matched for the week of July 5 came in Idaho and is talking to vari- Slowing overseas sales (USPS 664-880) The combination of trade available pig supplies and at their lowest level this year, ous meat producers about (Eastern Edition ISSN 0099-9660) risk and expanding meat sup- that Tyson continues to ex- and rising stockpiles the USDA said. adding more room. (Central Edition ISSN 1092-0935) plies could result in “one of port pork despite the tariffs. The Trump administration Zero Mountain Inc.’s Fort (Western Edition ISSN 0193-2241) the biggest corrections we’ve The meat wave had been threaten profit for recognizes the financial hard- Smith, Ark., warehouse is Editorial and publication headquarters: seen in the industry in several building before the trade dis- ship livestock producers could filled to the brink this sum- 1211 Avenue of the Americas, meat processors. New York, N.Y. 10036 years,” said Christine Mc- putes. A string of bumper face as a result of retaliatory mer, with pallets of frozen Published daily except Sundays and general Cracken, protein analyst at harvests in the U.S. and else- tariffs, and farm country will meat rising near the 40-foot- legal holidays. Periodicals postage paid at Rabobank, one of the world’s where slashed the price of be better off under new trade high ceilings on towering New York, N.Y., and other mailing offices. largest agricultural lenders. grain, the largest cost in rais- nies to store, products can be deals the administration is metal shelves. It is building a Postmaster: Send address changes to The Wall Street Some hog farmers and pork ing livestock and poultry. sent to rendering plants to pursuing, USDA Secretary new facility in Waco, Texas, Journal, 200 Burnett Rd., Chicopee, MA 01020. processors are beginning to The strengthening U.S. produce fats and pet-food in- Sonny Perdue has said. and has raised wages for fork- All Advertising published in The Wall Street scale back. Maschhoffs LLC, a economy has boosted domes- gredients. The USDA has examined lift drivers with a gift for Journal is subject to the applicable rate card, privately held hog-farming tic consumers’ appetite for Exports, industry officials drawing upon Depression-era stacking and moving tons of copies of which are available from the Advertising Services Department, Dow Jones company based in Carlyle, Ill., meat, and rising incomes in said, are critical to balancing programs that permit borrow- frozen meat. & Co. Inc., 1211 Avenue of the Americas, New has put on hold $30 million in Asia and Latin America fueled out the growing supply. ing of as much as $30 billion “This summer’s going to be York, N.Y. 10036. The Journal reserves the right investments planned to ex- increasing meat demand “The more you store, from the Treasury as a way to increased volumes, and if we not to accept an advertiser’s order. Only publication of an advertisement shall constitute pand its breeding operations abroad. chances are you’re going to compensate farmers for tariff- want to capitalize on those, final acceptance of the advertiser’s order. and upgrade truck washes and Farmers, ranchers and have to export more of it,” driven price declines, and Mr. we have to do everything in Letters to the Editor: other biosecurity measures. meatpackers rushed to fill said Altin Kalo, a commodity Perdue has said he aims to our power to maximize our Fax: 212-416-2891; email: [email protected] “We’ve got too much ca- that demand, building new analyst with Steiner Consult- have a plan ready by this fall. cubic footprint,” Mr. Rumsey pacity built in this industry if barns for poultry and live- ing Group. “Even with the tar- For cold-storage warehouse said. NEED ASSISTANCE WITH we’re not going to be export- stock to supply new chicken iffs, there’s only a certain operators, the growing meat —Benjamin Parkin YOUR SUBSCRIPTION? ing more product,” said Ken and pork plants across the amount of product you can stockpile creates opportuni- contributed to this article. By web: customercenter.wsj.com; Maschhoff, the company’s U.S. South and Midwest. shift into the domestic chan- ties. In Sioux City, Iowa, Clo- By email: [email protected] By phone: 1-800-JOURNAL (1-800-568-7625); chairman. He is instead con- The U.S. Department of Ag- nels.” verleaf Cold Storage Co. has Or by live chat at wsj.com/livechat sidering expansion into East- riculture projects the industry However, pork exports to been upgrading its technology CORRECTIONS ern Europe or South Amer- will produce a record 102.7 China, which first imple- to help track the location of REPRINTS & LICENSING ica—places where the billion pounds of meat this mented a 25% tariff on U.S. individual pallets in its 18 AMPLIFICATIONS By email: [email protected] company’s hogs perhaps can’t year. pork in April and this month warehouses, which co-owner By phone: 1-800-843-0008 Readers can alert The Wall Street be raised as cheaply as in the Cold-storage warehouses boosted the duty to 62%, de- Adam Feiges said has helped Journal to any errors in news U.S. but where he said trade are filling up as a result. The clined by 18% over the first the company run its ware- articles by emailing GOT A TIP FOR US? policy isn’t so “geopolitically USDA in June estimated a to- five months of the year. Sev- houses at 90% capacity, com- [email protected] or by calling 888-410-2667. SUBMIT IT AT WSJ.COM/TIPS charged.” tal 2.5 billion pounds of red eral times in recent weeks, pared with 85% in the past. THE WALL STREET JOURNAL. **** Monday, July 23, 2018 | A3 U.S. NEWS FBI Agent OfficialsProbeDuckBoatTragedy

Faces Trial Following 17 deaths in Missouri incident, In Oregon federal officials focus Shooting on weather information BY JIM CARLTON BY JOE BARRETT

Federal prosecutors who Federal officials investigat- have squared off against a ing the sinking of an amphibi- group of antigovernment ous tour boat in Missouri are ranchers in the Northwest are focusing on the operator’s use set to return to court this of a private weather service month, this time to go after before proceeding with an eve- one of their own—a member ning cruise last week that en- of an elite tactical FBI team. countered near-hurricane-force On Tuesday, W. Joseph As- winds. tarita, 41 years old, will stand The boat sank Thursday trial in U.S. District Court in evening in Table Rock Lake Portland, Ore., on charges of near Branson, Mo., in the making false statements and Ozark Mountains, killing 17 of obstruction of justice related 31 people aboard. to the 2016 fatal shooting of “The real objective is going Robert LaVoy Finicum. to be what kind of information Mr. Finicum had served as a was on hand when they went spokesman for Ammon Bundy, out” and how the decision was the leader of an armed occu- made to proceed with the tour, pation in 2016 of a national said National Transportation wildlife refuge in Oregon. Mr. Safety Board Member Earl Finicum was shot and killed Weener in a news conference after attempting to evade po- Saturday night. “This was a lice and federal agents trying squall that came up rather

to arrest him and others for suddenly.” JOHN SLEEZER/THE KANSAS CITY STAR/ASSOCIATED PRESS occupying the Malheur Na- In addition to the NTSB People embraced on Sunday after a memorial service for victims on the campus of the College of the Ozarks near Branson, Mo. tional Wildlife Refuge. probe, the Missouri State Federal prosecutors said Highway Patrol has launched a that while Mr. Finicum died separate criminal investigation Victims in Accident napolis youth football league, va- from shots fired by Oregon into the accident, officials said. cationing with three generations state troopers, Mr. Astarita’s Tia Coleman, a survivor of Are Remembered of his family, according to a post alleged failure to disclose he the sinking boat who lost nine by Anthony King. He described had fired two other shots dur- members of her family, said the 70-year-old Mr. Coleman as ing the showdown hindered the crew was aware of the Many of the victims were a community legend and a lov- the police investigation into coming storm and had been on vacation with their families. ing father and grandfather. He the incident. told to change the order of the Steve and Lance Smith, a fa- said his heart was heavy that Mr. Astarita was part of the land-and-water-tour to get off ther and son from Osceola, Ark., he had died, along with so many FBI’s Hostage Rescue Team de- the water as soon as possible. were active members of the Os- of his family members. ployed out of Quantico, Va., to “There’s a storm coming, so ceola Church of Christ, according Leslie Dennison was on a assist other state and federal go to the water first so you to a Facebook post by pastor day trip with her granddaughter. can avoid it,” she said, recall- Will Hester. Mr. Hester said Ms. Dennison died after suc- ing the instructions given to Steve Smith was a deacon at cessfully pushing her grand- the crew. It wasn’t clear who the church and Lance had been daughter to safety, said Brian Prosecutors accuse gave the instructions. baptized just late last year. “My Dennison, one of Ms. Dennison’s the FBI agent of The water was calm on heart breaks, but I know where sons, in a Facebook post. She Thursday evening as the Ride they are, and I know that I will was a hero, he said, adding that lying on three the Ducks Branson boat en- see them again!” he wrote. she loved her granddaughter separate occasions tered the water. But as the Horace “Butch” Coleman was “more than anything.”

boat turned back toward CHARLIE RIEDEL/ASSOCIATED PRESS a longtime coach for an India- —Valerie Bauerlein shore, it encountered head- Tia Coleman lost nine relatives Thursday in the boat accident. winds and waves. law-enforcement officers dur- Mr. Weener said wind terviewing passengers and the vessel died, according to ment. cials said they would try to de- ing the standoff. He has speeds were recorded at 73 crew members of the paddle- officials. In a statement Friday, the termine whether the crew pleaded not guilty to the miles per hour, two mph less wheel-style riverboat Branson Jim Pattison Jr., president company said the Ride the acted properly regarding life charges and remains free on than hurricane force, and Belle, which was docked and and chief executive of Ripley Ducks attraction would be preservers and windows of the his personal recognizance. His waves were 4 to 6 feet high. preparing to embark nearby. A Entertainment, owner of the closed indefinitely and that the vessel, which appear to have attorney, Rob Cary, declined to Video of the incident shows number of its crew and a boat, told CNN on Friday that company was doing all it could been closed, making it more comment. If convicted, he the duck boat struggling Stone County deputy jumped the trouble came up quickly. to support the families of the difficult for passengers to es- faces up to 30 years in prison. against the wind and waves into the water to rescue survi- “My understanding is that survivors. cape once the vessel went un- A judge earlier this month and eventually taking water vors, officials have said. The when the boat went into the NTSB officials said investi- der. dismissed two of the five over the bow. The first 911 call duck boat went down in about water, it was calm” but that gators had found the duck Ripley provided investiga- charges against Mr. Astarita. came in at 7:09 p.m., about 30 40 feet of water but eventually conditions worsened signifi- boat’s onboard video camera tors with a similar duck boat The trial will bring to a minutes after a severe thun- settled in 80 feet of water. cantly as the boat began re- and sent it to a lab in Wash- for inspection, officials said. head the tensions between derstorm warning was issued, The captain of the boat sur- turning to shore, he said. ington, D.C., where it will be —James Oberman, Alejandro Western ranchers and the gov- officials have said. vived, officials said, but hasn’t The company hasn’t re- dried out and analyzed. Lazo and Valerie Bauerlein ernment that had been at the NTSB officials have been in- been identified. The pilot of sponded to requests for com- NTSB and Coast Guard offi- contributed to this article. heart of the 2016 standoffs. Mr. Bundy’s armed occupation was fueled by the federal pros- ecution of Oregon rancher Zinke Weighs San Francisco Reservoir Fate Dwight Hammond and his son, Steven, for arson. The duo, who were sentenced to five BY JIM CARLTON During a visit Sunday to official. The official said Mr. Hetchy Valley by San Fran- cause the quality of San Fran- years in prison, received a Yosemite, Mr. Zinke met with Zinke wants to learn how re- cisco a century ago—burying a cisco’s supply—piped directly presidential pardon earlier SAN FRANCISCO—Interior a group called Restore Hetch moving the dam at Hetch Het- valley comparable in splendor from the Sierra Nevada moun- this month. Secretary Ryan Zinke is inter- Hetchy, formed about two de- chy would “contribute to the to the famed Yosemite Val- tains—is considered one of Mr. Bundy was acquitted ested in restoring the Hetch cades ago to pursue a goal of reliable operation” of an exist- ley—has long been regarded the highest among Western for his role in the occupation, Hetchy Reservoir in Yosemite draining the reservoir. ing federal water project that as one of the West’s great en- cities. along with six followers. National Park to its natural “This is still just a fact- supplies water to California vironmental catastrophes. Dismantling would “cause The death of Mr. Finicum state after more than 100 years finding meeting, but the sec- farmers, “in addition to the Restore Hetch Hetchy’s enormous environmental dam- has spurred outrage among of providing water to the peo- retary is very interested in re- conservation benefits removal plan is to drain the 360,000- age and put at grave risk the friends and family. They have ple of San Francisco and some storing the valley to its would provide.” acre-foot reservoir and make reliable water and clean en- long accused the government suburbs. natural state,” said an Interior The damming of the Hetch San Francisco store its moun- ergy supply for more than 2.5 of carrying out a deadly ven- tain water somewhere else, detta. While federal investi- perhaps even underground. An gators determined the acre foot is about the amount rancher was reaching in his of water a family of five uses Scoring a meeting coat for a gun when he was in one year. with the Interior is a shot, supporters said he was The group also had tried to surrendering. get support from Washington, victory for Restore “Someone needs to be asking every Interior secre- Hetch Hetchy. charged with murder,” said tary since 2000 to meet on Angie Bundy, wife of Mr. the issue, said Spreck Bundy’s brother, Ryan. Rosekrans, executive director. Justice Department officials “San Francisco has monopo- million residents and busi- declined to comment on the lized this spectacular valley nesses,” the Bay Area Council case. FBI officials also de- for 100 years, and it’s time to business group warned in a clined to comment on the case return it to the American peo- statement after the Hetch Het- and didn’t respond to ques- ple,” Mr. Rosekrans said. chy suit was first filed in 2015. tions about Mr. Astarita’s job The Reagan administration Getting a meeting with Mr. status. had broached the idea in 1987. Zinke, whose office said he Prosecutors accuse the The administration of Presi- first received a request last agent of lying on three sepa- dent George W. Bush was con- year, is a victory for the rate occasions when asked if templating a feasibility study group. he had discharged his rifle for it, but powerful San Fran- “He is interested to learn during the confrontation with cisco interests including Dem- how removing the dam would Mr. Finicum. ocratic Sen. Dianne Feinstein contribute to the reliable op- A police review of the have helped blocked any ac- eration” of the federal Central shooting determined the tion. Valley Project water system, rancher was killed by bullets The group hasn’t had suc- the Interior official said, as fired from the guns of two Or- cess in the courts either. Re- well as the conservation bene-

egon state troopers after he JOHNstore HOLLAND/MODESTO BEE/ZUMA PRESS Hetch Hetchy lost a law- fits. evaded one roadblock and The damming of the Hetch Hetchy Valley by San Francisco a century ago buried the valley, below. suit first filed in 2015 to have Mr. Rosekrans said it would tried to drive through the sec- Restore Hetch Hetchy wants to drain the reservoir and make the city store its water elsewhere. the dam declared an unlawful take about two years to drain ond. diversion, and the case is now the granite-walled valley and The review also found five being appealed to the Califor- five years for enough grass other shots had been fired by nia Supreme Court. and wildlife to return to at- officers—three from one of the While San Francisco offi- tract visitors. San Francisco’s troopers that hit Mr. Finicum’s cials weren’t immediately water, he added, could be vehicle before it finally available for comment, they stored elsewhere downstream stopped, and two more from have steadfastly opposed the of the Tuolumne River such as what investigators determined proposal in the past. City resi- by enlarging other reservoirs was the position of Mr. Astar- dents in 2012 voted down a or banking underground. He ita and another FBI agent. measure to study the idea, said he hopes Mr. Zinke uses Mr. Astarita was indicted with 77% voting against it. his influence to push the on the charges in June 2017 Draining is also widely op- draining idea forward. after investigators concluded posed in the surrounding Bay “I think anybody should be he had fired the shots. Area, in part because recent inspired by restoring Hetch The trial is expected to last droughts have raised concern Hetchy to the American peo-

up to five weeks. LIBRARY OFover CONGRESS water supplies and be- ple,” he said. A4 | Monday, July 23, 2018 PWLC101112HTGKBFAM123456789OIXX **** THE WALL STREET JOURNAL. U.S. NEWS Trump, Aides Diverge Further on Russia

The president’s split summit, Syria was seen as a potential area of cooperation with advisers on between the two countries, es- Russian relations now pecially since the U.S. is no lon- ger providing covert support to extends to Syria Syrian rebels opposed to Mr. Assad. Mr. Trump has said he BY DION NISSENBAUM would like to eventually remove AND MICHAEL R. GORDON the approximately 2,000 U.S. troops in the country. As the administration pre- The White House’s para- pares for another summit mount concern in Syria has meeting between President been finding a way to evict Donald Trump and Russian Iranian forces. National Secu- President Vladimir Putin, there rity Adviser John Bolton is division within the U.S. ranks voiced hopes earlier this over Moscow’s intentions and month that Mr. Trump and Mr. whether the two countries will Putin might work together to be able to cooperate on issues scale back Iran’s role. including the conflict in Syria. But no agreement to reduce Mr. Trump has expressed Iran’s role was announced in hopes of working more closely Helsinki. Director of National with Russia in Syria, where Intelligence Dan Coats ex- Moscow has played a central pressed skepticism at the pol- role in cementing President icy symposium that Russia Bashar al-Assad’s power. The would help. administration raised the issue “We have assessed that it’s with Mr. Putin’s government unlikely Russia has the will or during and after their meeting the capability to fully imple-

in Helsinki last week. BRENDAN SMIALOWSKI/AGENCE FRANCE-PRESSE/GETTYment IMAGES and counter Iranian de- But the U.S. general over- Closer cooperation in Syria was a topic at the Helsinki meeting between President Trump and Russian President Vladimir Putin. cision and influence,” Mr. seeing the fight against Is- Coats said at the Aspen Secu- lamic State expressed doubt tions in the Middle East, includ- about Russian interference in regional issues, terrorism and week and charged with failing rity Forum. Mr. Trump has about deepening cooperation ing Syria, where Russia has U.S. elections. Mr. Trump and arms control. to register as a foreign agent. said little about the Helsinki with the Russian military. “I’ve been carrying out air strikes to others in the White House say Seeking to capitalize on the Mr. Lavrov called the accusa- summit, including Syria. Rus- watched some of the things help Mr. Assad’s forces reclaim they have raised concerns Helsinki meeting, Russian For- tions against her “fabricated.” sian officials said they are pre- that Russia has done, it does territory from Syrian rebels. about interference, and are fo- eign Minister Sergei Lavrov A statement from the U.S. paring to set up a working give me some pause,” Gen. Jo- A parade of top officials cusing on other issues. spoke to Secretary of State State Department on Sunday group with the U.S. to focus on seph Votel said in an interview from the Federal Bureau of In- The skepticism has frus- Mike Pompeo on Saturday said the men discussed Syria, getting Syrian refugees back en route to Afghanistan. vestigation, Justice Depart- trated Russian officials who about potential cooperation in counterterrorism and busi- home. Gen. Votel heads the U.S. ment and intelligence agencies, had hoped for an opening be- Syria and demanded the re- ness-to-business ties but made —Thomas Grove in Moscow Central Command, which also as well as U.S. lawmakers, have tween Mr. Trump and Mr. Pu- lease of Russian citizen Maria no mention of Ms. Butina. and Ian Talley in Washington oversees U.S. military opera- issued warnings in recent days tin to see eye-to-eye on thorny Butina, who was arrested last Before last week’s Helsinki contributed to this article.

Steady Support President’s Rating Inches Higher President Trump's job approval rating has edged up amid strong support from Republicans. Voters say he has handled the economy BY MICHAEL C. BENDER should control the next Con- say the action tipped the race to day before Mr. Trump’s news better than other prominent issues. gress, down from a 10-point ad- Mr. Trump—some 30%, com- conference in Helsinki, pollsters WASHINGTON—President vantage in June and 7 points in pared with 24% in June last said the results may not capture President Trump’s job approval Donald Trump’s approval rating April. Some 49% of voters in the year. the full reaction to events that 60% edged higher during a week in new survey said Democrats Mr. Trump’s management of unfolded throughout the week. July which he faced withering criti- should lead the next Congress, immigration issues remained Still, pollsters said results in the Disapprove cism following a summit with while 43% favored the GOP. another potential cause for con- two days following Mr. Trump’s 50 Russian President Vladimir Pu- Mr. Trump’s overall approval cern. A majority of U.S. voters, remarks—deemed by Newt 52% tin, signaling that he is posi- rating continued to rank among 51%, disapprove of Mr. Trump’s Gingrich, a Trump adviser and Approve 40 tioned to weather the latest the lowest of any modern presi- handling of border security, and former U.S. House speaker, to 45% controversy sparked by his un- dent at this point in his first 58% don’t like how his adminis- be “the most serious mistake of usual brand of politics. term, and the poll turned up tration has treated parents and his presidency”—differed little 30 Mr. Trump’s job approval warning signals for him. children who have been sepa- from the preceding two days. rating rose to 45% in a new rated after entering the country Mr. Trump responded to crit- 2017 2018 Wall Street Journal/NBC News illegally. icism a day after the press con- Presidential approval within President Trump’s poll, the highest mark of his Underpinning Mr. Half of registered voters ap- ference, saying he misspoke own party handling of issues presidency and up 1 percentage prove of Mr. Trump’s handling when he said he didn’t know of as of July of the second year Disapprove Approve point from June. The survey Trump’s job approval of the economy, the poll found, any reason why Russia would was taken over a four-day pe- was support from 88% his highest mark on that ques- intrude on U.S. elections. On G.W. Bush 96% The economy 34% 50% riod that started July 15, a day tion in Journal/NBC News sur- Friday, he said he had been nice Trump 88 North Korea 36 44 before Mr. Trump’s news con- of Republican voters. veys. At the same time, a plural- to Mr. Putin because he wanted Nixon 84 Border ference with Mr. Putin in which ity disapproves of how he has to be diplomatic. security, 51 41 he questioned the conclusion of handled trade issues; 53% said The survey results suggested G.H.W. Bush 83 immigration U.S. intelligence agencies that recently imposed tariffs would that the president, who has en- Obama 81 45 38 Russia meddled in the 2016 A majority of registered vot- hurt the average American. dured repeated prognostica- Trade Reagan 79 election. ers—some 51%—don’t approve When it comes to polling, tions of his political demise, U.S., Russia 51 26 Underpinning Mr. Trump’s of the relationship between Mr. Trump has proved to be was positioned to again absorb Ford 77 relations job approval was support from Washington and Moscow, and paradoxical. a barrage of bipartisan criti- Clinton 67 Immigrant 88% of Republican voters. Of an increasing percentage say “Welcome to the latest and cism. families at 58 31 Carter 52 the four previous White House Mr. Trump has been too most daring of Donald Trump’s To help gauge reactions, the the border occupants, only George W. Bush, friendly with Mr. Putin. The 65% high-wire acts, in which the poll included an open-ended Sources: WSJ/NBC News telephone polls most recently of 900 registered voters in the aftermath of the Sept. 11, of voters who believe Russia in- president increases his degree question that asked voters for conducted July 15–18; margin of error: +/– 3.27 pct. pts.; Gallup (previous presidents) 2001, terrorist attacks, had a terfered in the 2016 election of difficulty and manages yet their reaction to Mr. Trump’s THE WALL STREET JOURNAL. higher approval rating within was up 8 percentage points again to stay on his feet,” said foreign trip, which included the his own party at the same from June 2017. Fred Yang, a Democratic poll- summit with Mr. Putin. Mr. meeting with Mr. Putin. Mr. McInturff said. point. Among those who agree ster who helped conduct the Trump’s supporters in the sur- “During what is a terrible Moscow has denied meddling The survey found Democrats with U.S. intelligence agencies survey with Republican Bill vey approved of his actions and week in terms of media cover- in the U.S. election, and Mr. leading by 6 percentage points that Russia intervened in the McInturff. accused the media of taking an age and focus on the president, Trump has denied his campaign on the question of which party election, an increasing number Because the survey started a unduly negative view of his these numbers don’t budge,” colluded with Russia. Carter Page Records Revive Partisan Spat

BY DEL QUENTIN WILBER Home Security. AND BYRON TAU Butina, Fed’s Fischer Russia’s central bank. “It was standard for mem- WASHINGTON—The release In Meeting Together bers of the Federal Reserve Done Right. of top-secret surveillance war- Board to meet and talk with rants has reignited partisan counterparts from other central skirmishes over whether the Maria Butina, the 29-year- banks,” Mr. Fischer said in an Introducing the all new SimpliSafe. Justice Department was justi- old Russian accused of being an email. His meeting with the two fied in monitoring a former unregistered foreign agent, used Russians was reported earlier It’s smaller. Faster. Stronger than ever. Trump campaign adviser. her connections to a Russian by Reuters. Engineered with a single focus: to protect. President Donald Trump central bank executive to attend Ms. Butina was arrested last said on Twitter on Sunday that meetings with U.S. government week and accused of trying to More than easy to use: the warrant applications make officials, including one with the set up back-channel relation- It’s downright delightful. it look “more & more likely” his vice chairman of the Federal ships with Republican politicians campaign was “illegally being Reserve in 2015. through the National Rifle Asso- All at prices that are fair and honest. spied upon.” Former Fed Vice Chairman ciation. A judge has ordered her Democrats countered that Stanley Fischer confirmed her held without bond, saying she the heavily redacted records presence at a meeting in April posed a flight risk. Ms. Butina’s actually show the Justice De- of that year. Ms. Butina was attorney, Robert Driscoll, has partment had acted properly in there as an interpreter for her described the charges against

investigating and documenting J. SCOTT APPLEWHITE/ASSOCIATED PRESS patron, Alexander Torshin, who her as “overblown.” the need to spy on Carter Page, The surveillance of Mr. Page, was then deputy governor of —Bob Davis the former Trump adviser. above, started in October 2016. “Those applications set out in some detail, a lot of which investigation a “witch hunt.” he said Sunday on CNN. “I have sian government.” unfortunately is redacted, just Legal experts say it is the never been an agent of the for- House Republicans, in par- why the FBI was so concerned first time they can recall such eign power.” ticular, have alleged that oppo- that Carter Page might be act- an application being made pub- Mr. Page, however, acknowl- sition research on Mr. Trump ing as an agent of a foreign lic in the four decades since edged he was an “informal” ad- that was partly funded by the power,” Rep. Adam Schiff, the Congress passed the Foreign viser to the Kremlin in the Democratic Party was the driv- ranking Democrat on the House Intelligence Surveillance Act, or sense that he had “some con- ing force in the government’s Intelligence Committee, told FISA. versations with people.” surveillance applications. ABC News on Sunday. The FISA documents, re- The once-secret application Democrats have fired back, The surveillance of Mr. Page, leased by the Justice Depart- makes plain that Mr. Page was saying the surveillance was jus- which started in October 2016 ment in response to public in- in the FBI’s crosshairs and that tified and that Republicans’ at- and continued through at least formation requests and the Justice Department tacks on the FBI were designed June of the next year, is at the lawsuits filed by the news me- strongly suspected he may to undercut special counsel heart of a partisan battle over dia, shed little new light on the have been working with the Robert Mueller’s probe. Mr. whether the Federal Bureau of debate as most of the unre- Russians to help Mr. Trump’s Mueller is tasked with investi- Right now get free shipping t Investigation had gone too far dacted information has been campaign. gating Russian interference in in investigating potential ties made public by members of “This application targets the 2016 campaign and any po- SimpliSfe.com/WS between Mr. Trump’s campaign Congress. Carter Page,” the application tential links between Moscow and Russia. Moscow has denied Mr. Page has denied being states. “The F.B.I. believes Page and the Trump campaign. it interfered in the election, an agent of the Russian govern- has been the subject of tar- —Bob Davis and Mr. Trump has called the ment. “This is so ridiculous,” geted recruitment by the Rus- contributed to this article. A6 | Monday, July 23, 2018 THE WALL STREET JOURNAL. U.S. NEWS Hatch Presses Trump to Rethink Trade Policies BY SIOBHAN HUGHES Mr. Trump. But Mr. Hatch’s impatience WASHINGTON—Senate Fi- with the tariffs has been grow- nance Committee Chairman ing in recent weeks. Orrin Hatch is ratcheting up He has expressed concern pressure on President Donald about the Trump administra- Trump to reconsider his tariff tion’s market-rattling tariff policies, warning in a letter threats in hallway interviews that GOP senators may be and committee hearings. Last ready to risk a legislative con- week, he turned to a floor frontation with the president speech and a tweet, aiming to

EITAN ABRAMOVICH/AGENCE FRANCE-PRESSE/GETTY IMAGES unless he reverses course on amplify the message. In is let- U.S. Treasury Secretary Steven Mnuchin, center, and French Economy Minister Bruno Le Maire, top left, among others at the G-20 Saturday. trade. ter, Mr. Hatch said he was “As you are aware, mem- “deeply concerned about the bers of the Senate are increas- administration’s recent actions ingly considering legislation to with regard to global tariff Tariffs Stymie G-20 Talks reduce trade authorities that policy.” Congress has delegated to the The White House didn’t re- President,” the Utah Republi- spond to a request for com- BY JEFFREY T. LEWIS He upped the ante by add- including at the World Trade measures and “in the worst can wrote in a letter obtained ment. ing that “it’s definitely a real- Organization, but only if re- case scenario.” by The Wall Street Journal. “I In the hierarchy of messages BUENOS AIRES—The fi- istic possibility” Mr. Trump forms are intended to The U.S. would be harder am sympathetic to those ef- from Capitol Hill to the White nance ministers and central will follow through on a threat strengthen the system and not hit than other countries by the forts. If the administration House, a letter like the one Mr. bankers of the G-20 group of to impose tariffs on all $500 weaken it, Mr. Le Maire ex- tit-for-tat tariffs because a continues forward with its Hatch sent the president could countries ended their meeting billion worth of goods the U.S. plained. larger share of its exports will overreliance on tariffs, I will be seen as the most potent, here with little progress on re- imports from China each year. The meeting in the Argen- be subject to the punitive lev- work to advance legislation to possibly a prelude to the legis- solving global trade tensions The U.S. has already set levies tine capital was scheduled to ies, according to the IMF’s cal- curtail Presidential trade au- sparked by President Donald on $34 billion of machinery concentrate on issues includ- culations. thority.” Trump’s tariffs, with the U.S. and components from the ing infrastructure for develop- Mr. Mnuchin said the U.S. The letter, sent to the and EU both insisting their Asian country, with tariffs on ment and the future of work, government is monitoring the White House last week, is no- GOP leader warns of conditions for trade talks must another $16 billion of imports but the conflict over Mr. impact of the tariffs very table because Mr. Hatch has potential Senate bill be met. scheduled. The Trump admin- Trump’s tariffs on steel, alu- closely, but that on a macro- been one of Mr. Trump’s most U.S. Treasury Secretary Ste- istration also is looking at tar- minum and Chinese electron- economic basis “we don’t see steadfast allies. He ushered to curtail president’s ven Mnuchin got the ball roll- geting an additional $200 bil- ics and other goods, and the yet any impact on the econ- through the Senate Mr. trade authority. ing Saturday morning when he lion of Chinese products. retaliatory tariffs imposed by omy.” Trump’s signature legislative told reporters that the U.S. is French Finance Minister the EU, China and other coun- He added that the produc- achievement—a $1.5 trillion, ready to start talks on trade Bruno Le Maire returned fire tries were a constant under- ers of some goods, such as 10-year tax cut—and as a for- agreements with China, the EU later Saturday, saying the EU current. lobsters in Maine and bourbon mer Judiciary Committee lation it threatens. and the Japanese, but that wouldn’t hold any talks while One concern of many par- whiskey in Kentucky, are feel- chairman is now working to And a number of lawmak- those trading partners must the U.S. tariffs are in effect be- ticipants in the meetings ing the effects. When asked if boost support for Supreme ers, especially on Mr. Hatch’s first level the playing field by cause “we refuse to negotiate brought up was the effect of he expected an impact at the Court nominee Brett Ka- committee, are wondering if removing tariffs, nontariff with a gun to the head.” And if the tariffs on economic macro level in the future, he vanaugh. that is their next move—a bill trade barriers and subsidies. the U.S. follows through with a growth. International Mone- replied “I don’t.” In contrast, two of the pri- that would ensure that Con- Mr. Mnuchin specifically proposed 25% tariff on im- tary Fund Managing Director At a press conference, Mr. mary sponsors of legislation gress has its say over tariffs mentioned that U.S. companies ported cars, Europe would Christine Lagarde told dele- Mnuchin played down any di- to curtail Mr. Trump’s trade that could rebound in the form shouldn’t be forced into joint have no choice but to retaliate, gates on Saturday that her or- visions among G-20 members powers—Sens. Bob Corker (R., of retaliatory tariffs on farmers ventures with Chinese compa- he said. ganization estimated the con- regarding trade, saying the Tenn.) and Jeff Flake (R., or manufacturers in their dis- nies to do business in China The EU is ready to hold flict would cost the world meeting was very productive Ariz.)—have built reputations tricts. nor be forced to transfer tech- talks on changes to the exist- around 0.5% in gross domestic and that “I didn’t feel isolated as GOP lawmakers who aren’t —Greg Ip nology. ing multilateral trade system, product, based on current at all.” shy about publicly challenging contributed to this article. Private Prisons Are Sued Over Work Programs for Migrants

BY ZUSHA ELINSON work, they can’t do the same meet our contractual obliga- 10th Circuit decision to the to people who haven’t been. tions.” Supreme Court. Geo’s attor- Two private prison compa- “The key distinction is be- Geo spokesman Pablo Paez neys have argued that the nies are facing legal pressure cause immigration detention is pointed out that the voluntary company is simply following over work programs at deten- civil in nature,” said Mr. Free. work program and wage rates ICE’s own policies on volun- tion centers that pay migrants “The people in these places were set by the government. tary work. $1 a day to perform tasks such cannot be made to work “As a service provider to the The Trump administration as cleaning or working in the against their will.” federal government, Geo is re- wants to detain more migrants centers’ kitchens. The companies—the na- quired to abide by these feder- who have crossed the south- Recent lawsuits have ac- tion’s two largest private ally mandated standards and ern border as it tries to crack cused Geo Group Inc. and Co- prison operators—say the congressionally established down on immigration. The reCivic Inc. of violating federal longstanding work programs guidelines,” he said. number of migrants in deten- laws prohibiting forced labor, for migrants are voluntary and The legal challenges gained tion while awaiting immigra- state minimum-wage laws or are sanctioned by U.S. Immi- traction earlier this year when tion hearings or deportation unjust-enrichment laws. The gration and Customs Enforce- the U.S. Court of Appeals for has risen to a daily average of companies run detention cen- ment. the 10th Circuit agreed with a 40,000 this year from 34,000

ters for migrants caught cross- The $1-a-day rate for immi- ROBYN BECK/AGENCE FRANCE-PRESSE/GETTYlower-court IMAGES ruling to allow two years ago. ing the southern border, de- grant detainees was estab- nine immigrant detainees held A group of 18 Republican tained asking for asylum at an lished by Congress decades Geo Group and CoreCivic pay detainees $1 a day at centers they at Geo Group’s 1,500-bed de- congressman sent a letter to official entry place or accused ago. ICE’s detention standards run, which plaintiffs say violates labor and minimum-wage laws. tention center in Aurora, ICE earlier this year recom- of living in the U.S. illegally. say detainees may volunteer Colo., to represent a class of mending that the agency step Andrew Free, who repre- for such work to “earn money pact of confinement.” consistent with similar pro- about 60,000 others who have in to defend the private prison sents several plaintiffs, said while confined” and that the CoreCivic spokesman Steve grams at other ICE facilities— been held there in recent companies and offer new guid- that while prisons can force resulting “decreased idleness” Owen said the company’s vol- operated by both public and years. ance on the work program to people convicted of crimes to could ease the “negative im- untary work programs “are private entities—and that Geo Group is appealing the prevent such lawsuits.

the world—the spread on in- fairly calm. To his surprise, ease of buying and selling Ital- Trading vestment-grade credit is hold- “we were confronted with a ian futures meant that market ing steady, but it has edged market which was already de- became the main channel for higher in high-yield credit. teriorating quite significantly” taking—or trimming—risk. Bonds Gets For years, central banks in terms of liquidity, he said. Similarly, volumes in helped paper over the decline Many investors like emerging-market government in market liquidity that oc- Mr. Pradère are switching to debt are down 32%, according Harder curred when postcrisis regula- derivatives contracts for as- to MarketAxess. At the same tion made it harder for banks sets they need to trade more time, credit-derivatives vol- ContinuedfromPageOne to trade bonds. The current regularly, where they say li- umes rose substantially in the thaniel Rosenbaum, credit challenge coincides with cen- quidity is better than in the first half of 2018 compared strategist at Wells Fargo Secu- tral banks withdrawing their underlying bond market. with previous years, according rities. “You’re starting to see longtime support for fixed-in- Trading in Italian govern- to strategists at JPMorgan. small hot spots emerge in come markets. The Federal Re- ment-bond futures rocketed in Mohammed Kazmi, a portfo- parts of the market that don’t serve is shrinking its $4.5 tril- May, more than doubling the lio manager at Union Bancaire have a natural support,” he lion bond portfolio and the previous year’s monthly vol- Privée, has been slowly switch- said, such as pockets of Eu- European Central Bank is trim- ume, according to Eurex. By ing bond positions into more rope and Latin America. ming its bond-buying program. contrast, Italian government- liquid credit derivatives, as he In May, Italian two-year This past March, Gilles bond trading volumes fell 18% expects episodes of turbulence. government-bond yields Pradère, a senior portfolio over the first half of 2018 During real high-risk events notched their biggest one-day manager at RAM Active In- from the previous year, ac- across bond markets, “no one jump since at least 1989. The vestments in Switzerland, cording to MarketAxess, de- is able to trade,” he said. surge was triggered by Italian sought to reduce some of his spite the pickup in volatility, Trading derivatives has its politics, but a lack of liquidity exposure to investment-grade which usually boosts activ- own drawbacks, since they can appeared to amplify the moves credit while this market was ity. Traders say the greater be less precise instruments. as the gap between the price at Meanwhile, parts of global which traders were willing to bond markets have always had buy and where they were will- A Big Ask patches of illiquid trading, ing to sell surged to above half The median gap between the price at which traders offer particularly during bouts of fi- a percentage point, according to buy and sell, a proxy for the ability to move in and out nancial-market turbulence. to Thomson Reuters data. But investors say that it is of markets quickly, has widened this year. High-yield Alberto Gallo, of Algebris In- €0.25 getting worse, particularly in vestments’ Macro Credit strat- Median bid-ask spread for developed emerging markets. egy, said it took “around 10 European corporate debt For dollar-denominated times longer” to unwind a bet government debt in emerging on Italian bonds than normal €0.20 Europe, the Middle East and and that it was hard to get bids Africa, the median bid-ask or offers on trades of more than 0.15 spread has risen roughly 75% $10 million in size. Liquidity this year to around 22 cents, “was bad, and it’s remained rel- according to MarketAxess. atively bad” since May, he said. 0.10 Turnover ratios in local-cur- The median bid-ask spread Investment-grade rency emerging-market bonds— for developed European high- €0.11 which measure trading activity yield credit is up 24% this 0.05 relative to bonds outstanding— Note: €1=$1.17 year, according to Market- have fallen sharply in recent Axess, while the spread for in- 0 years, according to the Institute vestment-grade credit has also January February March April May June July of International Finance. widened. In the U.S.—home of —Laurence Fletcher the deepest capital markets in Source: MarketAxess THE WALL STREET JOURNAL. contributed to this article. THE WALL STREET JOURNAL. Monday, July 23, 2018 | A7 WORLD NEWS Saudis Spend Heavily to Draw Investors

Riyadh to put $18 billion Foreign Flight into new investment Investment into Saudi Arabia funds as it kick-starts collapsed last year as the government pursued major non-oil economy reforms and an anti-corruption drive that has deterred RIYADH—Saudi Arabia is international investors. ramping up efforts to lure in- ternational companies and re- Foreign direct investment vive Crown Prince Mohammed inflows into Saudi Arabia bin Salman’s plans for an eco- $10 billion nomic makeover, after foreign investment fell to a 14-year- 8 low in 2017. 6 By Rory Jones, Margherita Stancati 4 and Summer Said 2 The moves include plans to create two investment funds 0 totaling over $18 billion for the 2013 ’14 ’15 ’16 ’17 government to enter into ven- Source: United Nations Conference tures with foreign companies, on Trade and Development said people familiar with the THE WALL STREET JOURNAL. matter. The kingdom is also pouring billions into entertain- Karen Young, a political econo- ment-industry partnerships and mist at the Washington-based working with SoftBank Group’s Arab Gulf States Institute. Vision Fund to bring technol- Reversing the fall in foreign

ogy firms to Saudi Arabia. SEAN GALLUP/GETTY IMAGES investment is a priority, said The first modern Saudi Saudi Arabia is shifting the economy away from oil toward industries that create jobs for its people. A family visits a new cinema in Riyadh. Basem al-Sallom, a deputy bankruptcy law is due to soon governor at Saudi Arabian come into effect. The govern- with the Trump administration in what the kingdom said was General Investment Authority. ment has also drawn up a law and shifted the kingdom into a Some Reforms Give companies hire more Saudi an anticorruption crackdown. “We are interested to work on public-private partnerships, more firm posture against workers have given foreign The charges weren’t aired pub- with companies that have the the first step toward the sale Iran. But some of his economic Investors Pause businesses pause. licly and some businessmen technology, the know-how, the of billions of dollars in state- plans have so far stalled. “What is going to induce remain jailed; the government experience to achieve our vi- owned assets that the govern- The Saudi economy con- A number of investment global companies to invest in has moved to collect over $100 sion. We cannot do it alone,” ment hopes will attract for- tracted last year, largely as a banks are expanding opera- Saudi Arabia? Cheap labor, low billion in their assets. he said. “And now is the right eign investment in big result of lower oil prices, and tions in Saudi Arabia as the taxes and subsidized utilities— Saudi officials have said the time. There are a lot of oppor- infrastructure projects. only emerged from recession government plans to list state- all that is going away,” said crackdown should assure inves- tunities here.” The accelerating moves in the first quarter of this year. owned assets and establish Christopher Johnson, the chair- tors that the kingdom is serious The government is in the fi- highlight worries in the king- The prospect of years of low public-private financed infra- man of the American Business about securing a stable rule of nal stages of creating a 50 bil- dom about a chill spreading oil prices helped spark Prince structure projects. Group of Riyadh, which pro- law. The crown prince sought lion Saudi riyal ($13.3 billion) through business activities just Mohammed’s calls for eco- But some reforms, though motes U.S. business interests to win more American business fund for developing partner- as the 32-year-old crown nomic reform, though prices they may be good for the in the kingdom. on a nearly three-week visit to ships with foreign companies, prince is attempting a historic have rallied in recent months. economy in the long term, To address one of these the U.S. this spring. said people familiar with the economic and cultural opening. Direct foreign investment have made investment in concerns, the government cir- The cornerstone of the matter. Known as the Interna- Prince Mohammed is trying into the country fell to $1.4 bil- Saudi Arabia less attractive. culated a draft law covering prince’s economic reform tional Partnership Fund, it will to shift the economy away lion last year from $7.4 billion Cuts to energy subsidies, a public-private partnerships that plan—the initial public offer- be run by the Saudi Industrial from oil and toward industries in 2016, according to United new value-added tax on most offered investors exemptions ing of the state-owned oil gi- Development Fund, which in- that provide growth and jobs Nations figures released last goods and a requirement that from certain labor laws. ant Saudi Arabian Oil Co., vests in the industrial sector. for Saudis. First steps toward month. That compared with an known as Aramco—has stalled, The Saudi Arabian General economic reform included cut- average $18.2 billion annually and may never happen. Investment Authority is plan- ting subsidies and adding taxes in the years leading up to the didn’t dispute the numbers. sive about spending before “If they can’t create an en- ning to expand its mandate by to narrow the budget deficit. global financial crisis in Saudi Arabia hasn’t landed they see the results of Prince vironment that is welcoming creating a separate investment He has introduced social re- 2007-2008 and last year fell in investment commitments from Mohammed’s reforms. to foreign investment and sup- fund to enter partnerships forms such as allowing women part because of fewer invest- U.S. corporate giants. In the Also worrying some inves- ports it through a rules-based with foreign companies, ac- to drive and opening cinemas. ments from multinationals, fragile economic environment, tors was the detention of economy, they cannot succeed cording to people familiar He has also forged an alliance said the U.N. Saudi officials investors have been apprehen- Saudi business leaders last fall in any kind of change,” said with the matter. Despite Its Oil Wealth, Iraq Can’t Keep the Lights On BY ISABEL COLES AND ALI NABHAN Power Outage Iraq doesn’t produce enough of its own electricity. BAGHDAD—Temperatures across southern Iraq are so Imported Total electricity Number of Iraqi state high in the summer months electricity produced Our pearl necklace is that birds drop dead from the and investment by Iraqi plants electricity plants operating sky due to heat exhaustion. 100 million megawatt hours 80 plants layered with elegance And tap water runs piping hot. So when Iraq’s power sup- 80 We’ve suspended three sizable cultured ply faltered this month as a 60 heat wave ramped up air-con- 60 pearls from three polished sterling chains ditioning demand, it ignited an angry question: Why can’t one 40 to bring you this clean, minimalist design. of the world’s top oil produc- 40 ers keep the power on? A fresh and modern way to add the 20 Protests have rippled 20 elegance of pearls. through Iraq’s oil-rich south for over a week as demonstra- 0 0 tors railed against the govern- ment’s failure to provide basic 2010 ’11 ’12 ’13 ’14 ’15 ’16 2010 ’11 ’12 ’13 ’14 ’15 ’16 services like electricity, health Source: Iraq's Ministry of Electricity Production THE WALL STREET JOURNAL. care and clean water. They have posed a serious enough as exports, which accounts for nearby nations have been sty- risk that authorities have shut the vast majority of its gov- mied or inconclusive. down the internet and sent in ernment revenue. Iraq had been purchasing troops to quell the unrest. But even if Iraq were to di- electricity from Iran for sev- Iraq’s electricity sector is a vert some of its oil exports for eral years, but Iran cut the microcosm of the ills plaguing domestic power generation, power, citing unpaid debt and the country since the U.S.-led the country can’t generate the electricity shortages of its invasion in 2003. Some house- electricity it needs. own. Ministry of Electricity holds receive no more than a Iraqi electricity demand has spokesman Mosaab al-Mo- few hours of state-provided grown to 23,000 megawatts at dares said Iraq has the money power a day during peak de- peak summer hours, but the to pay, but can no longer mand. People who can afford it country can only produce transfer the funds without vio- buy their own generators, or 15,900 megawatts, according lating U.S. sanctions on Iran. to Iraq’s Ministry of Electric- The biggest problem, how- ity. Demand will continue to ever, isn’t electricity genera- grow by around 7% a year, an- tion, but distribution. As much Iraq’s peak demand alysts say. as 65% of the power supply is is 23,000 megawatts On top of everything else, consumed by people who ille- the nation still is picking up gally tap into the grid or don’t and growing; it can the pieces after the militant have electricity meters, ac- only produce 15,900. group Islamic State destroyed cording to the Ministry of a swath of Iraq’s electrical and Electricity. Fee collection is oil-refining capacity. That de- also weak. In 2015, its best $ graded a national power sys- year to date, the ministry said buy from neighborhood genera- tem that was falling short be- it collected just 12% of fees. 69 tors, when the power goes out. fore the group began its three- The government tried in Plus Free Shipping Among other cities, pro- year occupation of the north 2015 to collect more fees and tests flared again on Friday in in 2014. Islamic State inflicted stop illegal power consump- Cultured Pearl Three-Layer Necklace the province of Basra, where $7 billion of damage on the tion, but a popular backlash most of Iraq’s oil is produced. country’s power system, with stalled it. Among the biggest 18" length. Three 9-9.5mm cultured freshwater pearls. “Basra is like a camel eight out of 17 power plants in opponents, Mr. Modares said, Sterling silver box chain with springring clasp. loaded with gold and fed occupied areas completely de- were private generator owners, thorns: it produces 90% of stroyed, according to a World who he says collectively make Shown slightly larger for detail. Iraq’s wealth but does not get Bank assessment. around $10 billion in annual enough electricity,” said Iraq has initiated many profits from the government’s Hamid Hafidh, a protest orga- projects to increase generation failure to provide electricity. nizer in the province. capacity, including multibil- “The situation is completely Ross-Simons Item #870331 Iraq produces much of the lion-dollar contracts signed unsustainable,” said Robert To receive this special offer, use offer code: LUSTER197 natural gas, gas oil, heavy oil with Siemens AG and General Tollast, an Iraq-focused politi- and crude that it burns to cre- Electric Co., but they have yet cal-risk analyst. 1.800.556.7376 or visit www.ross-simons.com/LUSTER ate electricity, but most of its to be completed. Attempts to —Ghassan Adnan oil production is sent abroad purchase more electricity from contributed to this article. A8 | Monday, July 23, 2018 ** THE WALL STREET JOURNAL. WORLD NEWS Mexico CEO Shift Offers U.S. Jolts Fiat ‘New’ Path Chrysler

ContinuedfromPageOne For Ties paying down its debt and im- proving its balance sheet, due BY JUAN MONTES in large part to the success of its highly profitable trucks and MEXICO CITY—In a concil- sport-utility vehicles in the U.S. iatory letter to President Don- Fiat Chrysler has doubled ald Trump, Mexico’s president- down on a continued shift in elect, Andrés Manuel López demand toward larger vehicles Obrador, said he was ready to by retooling its factories and start a new stage in U.S.-Mex- largely exiting the sedan busi- ico relations and seek a “com- ness. mon path” on trade, migra- Still, Mr. Manley faces sev- tion, economic development eral challenges. and security. Fiat Chrysler is spending “Everything is ready to heavily to catch up on new start a new stage in our soci- technologies, such as electric eties’ relationship based on and self-driving vehicles. It cooperation and prosperity,” needs to restore a reputation Mr. López Obrador said in the tarnished by regulatory crises letter to the U.S. president. involving safety lapses, sus-

The letter was handed to a pected emissions cheating and CARLOS OSORIO/ASSOCIATED PRESS delegation of cabinet-level U.S. bribery allegations. Represen- Mike Manley, above, was one of Sergio Marchionne’s top lieutenants and most recently ran the company’s Jeep and Ram truck brands. officials who visited Mexico tatives for Fiat Chrysler have City on July 13 and met with denied any intentional wrong- appearance was on June 26, Mr. Marchionne, a fan of ends a succession race that in- a much lower profile than his Mr. López Obrador. doing. when he presented a Jeep poker, was fond of taking big cluded European head Alfredo outspoken ex-boss, say dealers The communication was Fiat also has to deal with Wrangler SUV to military po- risks as CEO—such as killing off Altavilla and financial chief and Fiat Chrysler officials. made public Sunday just days the fallout on the company’s lice in Rome. the company’s sedans years Richard Palmer, according to “He is a workaholic and de- before the U.S., Mexico and supply chain and pricing from A workaholic known for ahead of rivals—and publicly be- industry analysts and company tail-oriented guy,” said Wes Canada are set to restart talks tariffs on aluminum and steel, making blunt comments and rating the industry for excessive insiders. A spokesman for the Lutz, a Jackson, Mich.-based to renegotiate the North which the White House says it wearing black sweaters instead production capacity and low company said no decision has Chrysler dealer, who serves as American Free Trade Agree- may widen to include vehicles of formal business attire, Mr. profitability. He raised eyebrows been made yet on who will fill chairman of the National Auto- ment. A representative of Mr. and auto parts. Marchionne has been an out- in 2015 by writing a missive Mr. Manley’s role as head of mobile Dealers Association. López Obrador will join the “That storm is right on the size presence in the auto in- called “Confessions of a Capital Jeep and Ram. Mr. Manley has worked Mexican delegation in Wash- horizon. He’s going to have to dustry. Junkie,” arguing the industry Mr. Marchionne had closely with dealers and over- ington on Thursday. have a voice in that [trade de- After taking over Italy’s Fiat planned to exit Fiat Chrysler saw the roll out of new mod- Mr. López Obrador told Mr. bate],” said Mike Jackson, CEO SpA in 2004, Mr. Marchionne next year but stay on as the els, such as the redesigned Trump “it is worth making an of AutoNation Inc., the largest then took control of Chrysler CEO and chairman of Ferrari Jeep Wrangler and Ram 1500 effort to conclude the renego- U.S. car dealer chain. Group LLC following the auto Fiat has confounded NV, which was spun out in pickup truck. During his time tiation” of Nafta. Prolonging The accelerated succession maker’s federally sponsored critics by meeting 2016. But on Saturday the lux- as head of the Jeep brand, he uncertainty could slow down also may rekindle speculation bankruptcy in 2009. At the ury sports car maker said Mr. grew global sales to nearly 2 investment in the medium and that the auto maker could seek time, few thought Chrysler most debt-reduction Elkann would take over as million this year—double the long term and hinder Mr. Ló- to sell off all or part of itself. would survive, but as the U.S. and profit targets. chairman and that the CEO number sold as recently as pez Obrador’s plan to spur Mr. Marchionne once sought market rebounded following role would go to Louis Camill- 2014 and up from 338,000 in economic growth thorough such a deal but had abandoned the recession, it ended up gen- eri, the chairman of Ferrari 2009, in part by rolling out more infrastructure projects. the idea. erating the bulk of the profit racing division sponsor Philip new higher-end models in the The letter, which includes a Finally, Mr. Manley has to for the two car makers, which makes too many low profit mar- Morris International Inc. U.S. detailed description of the in- earn the confidence of the were formally combined in gin vehicles, and by pursuing an Mr. Elkann is a member of The new CEO has less experi- coming Mexican administra- 236,000-large global work- 2014. unsolicited merger with GM, Fiat’s founding Agnelli family, ence with finance and manufac- tion’s platform, also proposes force, including those who got Under his watch, Fiat which the larger rival spurned. which through a holding com- turing, core areas that Mr. Mar- creating a development plan overlooked for the CEO post, Chrysler confounded critics on On June 1, Mr. Marchio- pany owns nearly 43% of Fiat chionne obsessed over during for Central American countries and possibly deal with ques- Wall Street and elsewhere by nne—who had planned to re- Chrysler’s voting rights and his tenure, say analysts and to stem the flow of migrants tions about how Mr. Marchio- meeting most debt-reduction tire in early 2019—outlined a about 33% of Ferrari’s voting dealers, but he has the benefit of heading north. Mr. López Ob- nne’s illness was disclosed. and profit targets. The com- five-year plan that included in- rights, giving it controlling Mr. Marchionne’s recently an- rador proposed that 75% of Mr. Marchionne appeared pany’s stock price has nearly creasing sales of the com- stakes over both companies. nounced strategic plan. available economic resources last week in a video at the Au- quadrupled since 2014 and its pany’s Jeep and Ram truck Mr. Manley, who first joined Mr. Manley hasn’t made any for the plan be used to create tomotive Hall of Fame cere- 6% profit margin is higher brands and investing in future the company in 2000 when it public statements since being jobs in Mexico and Central mony, but a company spokes- than Ford Motor Co.’s 5.2% technologies such as electric- was still DaimlerChrysler, is as named CEO but will host an America, and 25% to man couldn’t say exactly when margin and is approaching powered and self-driving cars. hardworking as the multitask- earnings call Wednesday for fi- strengthen border security. it was filmed. His last public General Motors Co.’s 7.2%. Mr. Manley’s appointment ing Mr. Marchionne but keeps nancial analysts.

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On September 27, The Wall Street Journal will bring together leaders in agribusiness, food production, consumer products, economics and government to focus on how changing consumer tastes, new technology, global competition and other forces are transforming this critical sector of the economy. Join our Global Food Forum audience and leaders from the top companies in the sector. The organizations below are just a sampling of our 2016 and 2017 participants.

915 Labs | Accenture | AeroFarms | AgFirst Farm Credit Bank | AgriCapital | Agrivida | AgroFresh | AgTech Accelerator | Ahold Delhaize | Alantra | Algenol Biotech | Alico | American Farm Bureau Federation | AMERRA Capital Management | Analog Devices | Anterra Capital | Apio | Applied Invention | Aqua Spark | Archer Daniels Midland | Arrell Food Institute | Arrowhead Beef | ASPIRE Beverage Company | Australia and New Zealand Banking Group | Australis Aquaculture | Bank of America | Barclays | Beaver Creek Ranch | Bellisio Foods | Berjé | Beyond Meat | Bimbo Bakeries USA | Biotechnology Innovation Organization | BiOWiSH Technologies | Blackland Capital Partners | BMO Harris Bank | Bojangles’ Restaurants | Bunge | Calysta | Campbell Soup | Cargill | The Center for Food Integrity | Chobani | CHS | Clara Foods | Clear Creek Farm | Clear Labs | The Climate Corporation | Closed Loop Capital | CoBank | Conagra Brands | Corn Reiners Association | Country Partners Cooperative | Cultivating New Frontiers in Agriculture | Dairy Farmers of America | DBL Partners | Devault Foods | Dietz and Watson | Diversigen | DLA Piper | DowDuPont | DuPont | Edlong Dairy Technologies | eMeals | Environmental Defense Fund | The Equity | EY | fairlife | FamilyFarms Group | Farmers Pride | Farmland Partners | Farmstead | Federal Agricultural Mortgage Corporation | Federal Farm Credit Banks Funding Corporation | Feeding America | Finke Farms | Food Future | Food Marketing Institute | Foster Farms | Foundation for Food and Agriculture Research | Freshly | FultonFishMarket.com | Gelson’s Markets | General Mills | GEOSYS Intl | Givaudan Flavors | Glanbia | Golden State Foods | The Good Food Institute | Grain Craft | Grifith Foods | Grocery Manufacturers Association | Guckenheimer | The Hain Celestial Group | Hancock Agricultural Investment Group | HarvestPlus | HEB Grocery | Hershey | Highland Family Farms | Hormel Foods | The Humane Society of the U.S. | Illinois Farm Bureau | Ingredion | Innovation Center for U.S. Dairy | International Farming | International Food Information Council | J.S. Ferraro | KEEN Growth Capital | Kroger | Kuli Kuli | Lamb Weston | Land O’Frost | Land O’Lakes | Larsen & Toubro | LG Corporation | Local Roots Farms | Lopez Foods | Louis Dreyfus | LT Foods Americas | Mars | The Maschhoffs | McDonald’s | McKinsey | Memphis Meats | Merck | Michigan Department of Agriculture | Mission Foods U.S. | Mitsui | Modern Meadow | Mosa Meat | Munchery | Mutima Capital | National Aquarium | National Pork Board | Nestlé | Newman’s Own | NGEN Partners | Nima | Nomura Securities | Noosa Yoghurt | North American Meat Institute | North Castle Partners | NSF International | Olam International | Orange County Produce | Oregon Farm Bureau | Paine Schwartz Partners | Panera Bread | PAR Technology | Peapod | Pennsylvania Department of Agriculture | PepsiCo | Perdue Farms | Peri & Sons Farm | Pete and Gerry’s Organics | Phibro Animal Health | Pinnacle Foods | Piper Jaffray | Quirch Foods Company | Rabobank | RBC Capital Markets | Ready Pac Foods | Reily Foods | Reiter Afiliated | Retail Ready Foods | S2G Ventures | Sample6 | Sapient Global Markets | Sargento Foods | Schwan’s | Scoular | Sensient Technologies | Shanghai Farms | Siggi’s Dairy | Simple Mills | Smithield Foods | Soft Robotics | South Carolina Department of Agriculture | Southeastern Grain | Spoon University | Starbucks | Strassburger Steaks | Sun Capital Partners | Sustainable Insight Capital | Swander Pace Capital | Teays River Investments | Tecumseh Poultry | Thomas Foods Intl | Tilia Holdings | Trace Genomics | Trader Joe’s | Tyson Foods | U.S. Bank | U.S. Department of Agriculture | U.S. Farmers & Ranchers Alliance | U.S. Food and Drug Administration | U.S. Trade Representative | Unilever | Valent BioSciences | Virox Technologies | Walmart | Waycrosse | Weber Shandwick | West Liberty Foods | White Oak Pastures | Wish Farms | World Economic Forum | The Yield Lab | Zoetis | Zume Pizza

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©2018 Dow Jones & Co., Inc. All rights reserved. 6DJ6300 THE WALL STREET JOURNAL. ***** Monday, July 23, 2018 | A9 WORLD NEWS Israel Helps ‘White Helmets’ Flee Cease-Fire

Syrian rescue workers British statement. In Gaza In the process, they have put fear arrest and worse themselves at risk as well. Doz- at the hands of the ens of White Helmet members Faces New have been killed and many Assad regime more have been injured and maimed—often in the regime’s Challenge BY RAJA ABDULRAHIM attacks that target those who BY FELICIA SCHWARTZ come to rescue the victims of BEIRUT—Hundreds of Syrian an initial attack. TEL AVIV—Israel’s military emergency rescuers and their White Helmets in southwest said late Sunday it fired to- families were evacuated from Syria fear arrest and worse at ward a group of Palestinians the country’s southwest with the hands of the Syrian regime, in Gaza launching flaming bal- Israel’s help, passing through which has accused the group of loons into Israeli territory, an territory it controls to Jordan being terrorists and allied with incident that posed a chal- as the regime of President al Qaeda. lenge to a fragile cease-fire be- Bashar al-Assad takes control The rescuers and their fami- tween Israel and Gaza ruler of one of the last remaining op- lies will stay in Jordan for a Hamas over the weekend. position strongholds. maximum of three months, ac- The truce came after an Is- The Israel Defense Forces cording to Jordan’s state news rael soldier was killed and Is- said Sunday that rescuers and agency. They will then await re- rael responded on Friday with their families were recently settlement through the UNHCR, a wide-scale attack on militant evacuated “from the war zone the United Nations refugee targets inside the Gaza Strip,

in southern Syria due to an im- MOHAMMED BADRA/EPA/SHUTTERSTOCK agency, in either Britain, Can- in which three members of the mediate threat to their lives” at Volunteer rescuers, known for their white helmets, searched for survivors after a blast in Idlib in April. ada or Germany because of the militant group were killed. A the request of the U.S. and Eu- risks they face if they were to fourth Palestinian was killed ropean countries. The civilians In a video message Sunday, aided by Russian airstrikes, regime. remain in Syria. Other Euro- the same day by Israeli secu- were subsequently transferred Israeli Prime Minister Benjamin some rebel groups reached Western nations, including pean countries including rity forces during one of the to a neighboring country, it said. Netanyahu said he approved piecemeal agreements to sur- the U.S., have supported the France, Sweden and the Neth- weekly demonstrations at the The Jordanian government the evacuation of the White render and withdraw from White Helmets, which are the erlands have also offered to Israeli-Gaza border. said Saturday night that it had Helmets through Israel to dif- towns and cities, and in recent only organized and semiprofes- take them. It wasn’t clear whether agreed to allow passage for 800 ferent countries but added that days other factions ceded all sional rescue organization that Jordan and Israel have re- Sunday’s episode was a minor Syrian rescuers—known as the Israel is “not ceasing to act in remaining opposition control in operates in rebel-held parts of fused to allow Syrians dis- flare-up or one that could un- White Helmets—and their fami- Syria against Iran’s attempt to the southwest. The details of Syria. They have become fa- placed by the government of- dermine the cease-fire, which lies in an evacuation and reset- entrench militarily there.” the agreements aren’t clear, but mous and featured in an Oscar- fensive to capture the had eased immediate concerns tlement operation being over- A White Helmets spokesman, already hundreds of rebel fight- winning documentary for sav- southwest region of Daraa and of an escalation of the conflict. seen by the United Nations, Raed Al Saleh, said on Twitter ers and civilians have boarded ing the lives of thousands of Qunietra provinces to enter Israeli Defense Minister Av- according to the government that the rescuers were evacu- buses to the northwest prov- civilians who have come under their countries. igdor Lieberman said earlier news agency Petra. ated for “humanitarian condi- ince of Idlib, one of the remain- attack in the Assad regime’s Jordan said it was over- Sunday that if Hamas contin- The trip was eventually tions” after they were sur- ing opposition-held pockets. A campaign to retake the entire whelmed by about 1.3 million ued to refrain from launching made by 422 Syrians, Jordan’s rounded in a dangerous area. group affiliated with Islamic country. They have saved more Syrian refugees living there. flaming kites and balloons, Is- foreign minister, Ayman Safadi, During the early weeks of a State still controls a small area than 115,000 lives during their —Dov Lieber in Tel Aviv rael would on Tuesday lift the said on Twitter. Syrian government offensive now under attack by the Syrian years of work, according to a contributed to this article. severe restrictions it imposed earlier this month on Gaza’s only commercial crossing. “Residents of Gaza must understand that as long as Turkey’s Regional Rise there are incendiary balloons and fires on our side, life on their side will not return to its normal routine,” Mr. Lieber- Opens a Door for Greece man said while visiting the crossing, Kerem Shalom. BY YAROSLAV TROFIMOV Before Israel’s longstanding government in the Greek-in- Israel also has demanded an friendship with Turkey rup- habited south and the Turkish- end to rocket and mortar fire ATHENS—It’s hard to find a tured in 2010, Israeli jet fighter populated areas occupied by from the Palestinian territory better example of how geopo- pilots honed their skills in Turkey’s military since 1974— and weekly violent protests at litical realities trump ideology Turkish skies and Israel sold provides an additional bridge, the border. It restricted access than the blossoming friendship Turkey military hardware. Is- especially as Ankara ramps up through the crossing, allowing

between Israel and Greece. raeli tourists flocked to Turkey. its opposition to developing YIANNIS KOURTOGLOU/AFP/GETTY IMAGES only food, medicines and some As the leader of Greece’s Turkish President Recep Cypriot offshore gas fields. Israeli Prime Minister Benjamin Netanyahu and Greek Prime fuel to pass through it, as part leftist Syriza party before gain- Tayyip Erdogan’s increasingly “We have to work in such a Minister Alexis Tsipras meeting in Cyprus in May. of an effort to pressure Hamas ing office in 2015, Prime Minis- hard-line foreign policy, which way as to safeguard strong to change course. ter Alexis Tsipras called to ex- seeks to project Turkey’s geostrategic ties with our and Mr. Netanyahu found 2012-2015 continued Mr. Pa- The Israeli soldier Hamas pel Israel’s ambassador and neighbors, keeping in mind themselves visiting Moscow at pandreou’s more Israeli- killed Friday was the first to close Greek ports to U.S. arms that to our east we are not the same time. At a private friendly policy. But when die in combat near the Gaza shipments heading to Israel. neighboring Switzerland or dinner in the Russian capital’s Syriza gained power, Israeli of- border since the 2014 war. Is- Syriza’s leftist allies in Eu- Ruling party ditches Liechtenstein, but a very ner- Pushkin restaurant, the two ficials started to panic because rael killed three Hamas mem- rope still demonize Israeli anti-Israel stance vous and in some cases a very men realized how much they of the party’s record of oppos- bers in a massive response Prime Minister Benjamin Ne- aggressive neighbor,” said Yi- could achieve by cooperating, ing Israel. that included airstrikes and tanyahu and his right-wing and cooperates with annis Bournous, Syriza’s head said Arye Mekel, a former Is- Greek officials say their tank fire. Gaza’s ministry of government. Many of them Netanyahu. of international relations and raeli ambassador to Greece. partnership with Israel isn’t at health said other people were back the boycott, sanctions and Mr. Tsipras’s strategic planning The following year, Greece the Palestinians’ expense. Ath- injured without giving details. disinvestment campaign chief. provided Israel with a big favor ens still champions the cre- Early Saturday, Hamas an- against Israel. Another senior Greek offi- by blocking in Greek ports an ation of a Palestinian state nounced it had agreed with Is- Not Mr. Tsipras—who inten- power across the region, cial put it more bluntly: “There international flotilla of boats with east Jerusalem as its capi- rael, via Egypt and the United sified cooperation with Israel threatened both Israel and are two countries that want to that aimed to break Israel’s tal, and consistently votes for Nations, to restore calm. Is- instead. The leaders of Israel, Greece, uniting them like never be the cops of this region— Gaza blockade. the Palestinian cause at the rael’s military hasn’t com- Greece and Cyprus are holding before. Greece is concerned by Turkey and Israel. We have to The Israeli Navy stormed a United Nations, they point out. mented directly on the truce. regular trilateral summits—the Turkish incursions in the dis- be friends with at least one.” similar pro-Palestinian flotilla “It is not a volte face. We are Prime Minister Benjamin fourth was in May—and the Is- puted areas of the Aegean Sea. In the 1980s and 1990s, organized by a Turkish charity not abandoning the Palestin- Netanyahu said Israel could raeli air force uses Greek air- Israel and Turkey are at odds Greece was among Israel’s in 2010, an incident in which ians,” said George Katrougalos, resume targeting Hamas again space for training. The three over the blockade of the Gaza harshest European critics and a nine Turkish activists were Greece’s alternate minister of if it deemed it necessary. “At countries, plus Egypt, are jointly Strip and over Ankara’s sup- vocal supporter of the Palestin- killed. This was the turning foreign affairs. But “we must the end of the week we hit developing the eastern Mediter- port for the Palestinian Isla- ian cause. point that ruptured the Israeli- also take into account our na- Hamas very hard and if it’s ranean’s natural-gas reserves. mist movement Hamas. The breakthrough came in Turkish relationship. tional interests,” he added, needed, we’ll hit them seven- The key reason for all this: Cyprus—divided between 2010, when then-Greek Prime The center-right govern- which are “to balance the rising fold,” he said in a video state- Turkey. the internationally recognized Minister George Papandreou ment that ruled Greece in influence of Turkey in the area.” ment released Sunday. WORLDWATCH

CANADA Nine People Injured In Toronto Shooting FIRST CLASS A gunman opened fire on a busy Toronto street late Sunday TRAVELFOR night injuring nine people, local media reported. Canadian Broadcasting Corp quoted a police official describ- YOUR FEET ing the shooting as a “mass ca- sualty incident.” The condition of the injured, which includes a child, is not known. Multiple media reported that the shooter is dead. The circum- stances of his death have not been verified. CBC broadcast televised video

footage of a man opening fire at RAHMAT GUL/ASSOCIATED PRESS about 10 p.m. EST outside a res- A wounded security officer is helped after an attack near Kabul Airport that killed 14 people. taurant in a busy retail area of the city’s east end, known as cluded civilians, said the spokes- SOUTH AFRICA ISRAEL The Danforth. The man’s face man for the Afghan ministry of was obscured by a dark hat. interior, Najib Danish. The vice Gunmen Ambush Strike Over Gay Men’s —Jacquie McNish president had left the airport in Taxi Drivers; 11 Killed Surrogacy Exclusion a motorcade only minutes be- AFGHANISTAN fore the explosion. South African police said gun- Tens of thousands of Israeli Gen. Dostum had been forced men opened fire on a minibus LGBT advocates and their sup- Vice President Unhurt to leave Afghanistan after politi- carrying members of a taxi driv- porters went on strike across In Deadly Attack cal rival Ahmad Ishchi alleged in ers’ association, killing 11 people the country, protesting the ex- 2016 he was held hostage, and critically wounding four. clusion of gay men from a re- Afghanistan’s vice president beaten and sodomized with a ri- Police Brig. Jay Naicker said cently passed surrogacy law. escaped unhurt from a suicide fle by the vice president at a the victims of the Saturday at- The protests came when Travel tip: comfortable feet make everything bombing Sunday at a police game of Buzkashi, Afghanistan’s tack had attended a colleague’s Prime Minister Benjamin Netan- more fun. The Un-Sneaker combines the comfort checkpoint near the Kabul airport. national sport. In January 2017, funeral and were returning yahu pledged to pass legislation Gen. Abdul Rashid Dostum, a Afghanistan’s attorney general home when the ambush oc- supporting surrogacy for gay fa- ofasneakerwiththestyleofashoe.Travelwell! former warlord accused of hu- ordered the arrest of nine of Gen. curred. thers, but then voted against it, man-rights violations, was re- Dostum’s bodyguards on charges Police are investigating possi- apparently under pressure from turning home after more than a related to the alleged abduction ble motives. his ultra-Orthodox Jewish coali- year of exile in Turkey. and assault accusations. Tensions between groups of tion partners. Protesters The explosion killed 14 people Mr. Dostum denies the allega- taxi drivers vying for the same marched in Tel Aviv and other and left 60 others wounded, tions and accuses Mr. Ishchi of routes sometimes spill into cities, waving rainbow flags and Free shipping and returns. Order online or call 844.482.4800. said Gen. Mohib Zeer, an Afghan links with the insurgents. deadly violence in South Africa. blocking a highway. health official. The casualties in- —Habib Khan Totakhil —Associated Press —Associated Press. A10 | Monday, July 23, 2018 **** THE WALL STREET JOURNAL. IN DEPTH

In June, Kraft Heinz Co., the stand set up by the Guffey to take a $114, five-day class. Children owner of the powdered lemon- children, who had set up next Last year, Lemonade Day ade brand Country Time, to an arts festival. “Officers organized stands at a plaza in pledged to pay the permitting received several complaints downtown Brooklyn. Security Stand for fees and fines of kids busted from permitted vendors about guards from the area’s Metro- for selling lemonade. a stand which lacked a per- Tech Business Improvement A video promoting the mit,” the Denver Police De- District shut down the opera- Lemonade pledge features a group of partment said in a statement. tion. A MetroTech spokesman suited lawyers who have the The department said it doesn’t said the group was on private ContinuedfromPageOne serious expressions and go out of its way to enforce property and hadn’t provided stands without breaking the crossed-arm poses often seen such matters, but “when offi- proper notice or documenta- law,” she said. in commercials for slip-and- cers receive a complaint, we tion. Reports of kids’ lemonade fall law firms. It calls the force have an obligation to act.” “They said, ‘Give it away, stands being shut down for “Legal-Ade.” To stay out of trouble, 14- and don’t let us see you ex- breaking local health or per- In the video, one suited year-old Taylor Thomas of change money,’ ” said local mitting laws have long left lawyer downs a lemonade and Brooklyn, N.Y., took a New Lemonade Day director Bryan grown-ups feeling sour. Now, a crumples the plastic cup. York City test two years ago to Guadagno. He felt bad for the growing movement of adults is “Tastes like justice,” he says. get a food-protection certifi- children but acknowledged

fighting back. KNOWLES FAMILY The lawyers are actors and cate for her stand, where she benefits in protecting local A libertarian nonprofit in Jonathan, William and Ben Guffey before local authorities shut the company hasn’t had to bail sells lemonade, ice tea and vendors. “Having kids out Missouri has mapped reports down their lemonade stand. any kids out of jail so far. It cookies. there will cannibalize their of shut-down stands to raise has reimbursed five fees and “I got 19 out of 20” on the business,” he said. awareness; its litigation direc- preneurship before they feel dozen reports from around the fines—averaging $200 each, test, she said. “It’s like com- Some are ready to take the tor says lemonade stands are the crushing weight of the country over the past decade with one running to $500—in mon sense. You use gloves. fight further. Dave Roland, liti- protected by the U.S. Constitu- government come upon them,” of what it calls “the govern- the program’s first six weeks, You wear a smock. Different gation director at the Freedom tion. said Connor Boyack, president ment war on kid-run conces- said Adam Butler, Kraft’s head stuffcangetinthefood.” Center of Missouri, believes A Texas-based youth-entre- of Libertas Institute, a Utah- sion stands.” Most involve of beverages and nuts. Lemonade Day, the non- the stands are protected under preneurship nonprofit, Lemon- based libertarian think tank. lemonade stands. Local health officials say profit, organizes children to the Fifth and 14th Amend- ade Day, is lobbying local The institute advocated for The enemy, activists say, is they are looking out for con- sell lemonade on specific days ments, which ban the govern- health departments to change a Utah law, passed last year, a hodgepodge of local rules sumers’ safety and protecting and locations, typically obtain- ment from unreasonable re- regulations. A drink maker has that prohibits local authorities and regulations. Among those customers from unsavory ing waivers and other permits. strictions on private property offered to reimburse up to from requiring minors’ busi- encountered by Steven Gor- food-preparation techniques. For its dozen stands going and guarantee due process. $60,000 in lemonade-stand nesses to have permits or li- don, president of Lemonade In some cases, police depart- up at a Brooklyn park later “I think the Constitution permits and fines. censes. Day: You need three sinks on ments say they are responding this month, local organizers covers [lemonade stands] as “We should give children a A map created by the liber- site. Minors can’t accept to community concerns. got a $200 certificate of insur- written,” said Mr. Roland. “But few years to experience a free tarian Freedom Center of Mis- money. Stands must have Complaints from competing ance as well as a food certifi- if there’s any doubt about market and the joys of entre- souri includes more than two three walls. vendors put the squeeze on cate, which required an adult that, let’s get it fixed.”

to be their model, albeit in a other as a counterweight to China Hits more muscular manner, de- Infrastructure Initiative India. manding other nations become Beijing is building and financing a global network of trade and energy links to fill gaps in existing More recently, China has tribute states, kowtowing to infrastructure spanning Asia, Europe and Africa. Here are some of the main projects in its been anxious to prevent Is- Trouble in Beijing,” U.S. Defense Secre- ‘Belt and Road Initiative’: lamic extremism spreading tary Jim Mattis said in June. from Pakistan into China. Still, Chinese President Xi Jin- China’s goals depend on politi- Pakistan ping rejects such criticism, Moscow cal stability in Pakistan, which telling a conference in April requires strong economic London ContinuedfromPageOne his infrastructure program growth to create jobs. the “Belt and Road Initiative,” was neither a Chinese conspir- One problem is that Paki- involves some 70 countries acy nor a would-be Marshall stan has yet to establish any and has been likened to the Plan, but an attempt to build a of the planned “special eco- U.S. Marshall Plan that helped “community of shared future.” Beijing nomic zones.” With local busi- rebuild Europe after World China’s foreign ministry CHINA ness wary of Chinese competi- War II. By building a network said in a written statement to Pakistan Shanghai tion, provincial governments of ports, railways, roads and The Wall Street Journal that rail project won’t agree to generous incen- pipelines, China aims to open its Pakistan program remained tives China wants for its pri- new East-West trade routes, a model for Belt and Road Karachi vate companies to invest in generate business for Chinese countries. “Naturally, it will them. companies and expand its have to adapt to changing con- strategic influence. ditions, and necessary adjust- While the Americans mainly ments will be carried out,” it Lagos Political frustrations used grants in Postwar Eu- said, adding that China was in Many Pakistani and Chinese rope, China has mostly ex- close contact with Pakistan on business leaders are skeptical tended loans in opaque deals its financial situation. Proposed Existing about Pakistan’s potential as a often contingent on using Chi- In Malaysia, the second-big- Railroads trade route, especially if rail- nese contractors. Pakistan is gest recipient of Belt and Road Oil/gas pipeline way upgrades are canceled. now one of several countries loans after Pakistan, a new The only land route across the grappling with the financial government suspended work Port border into western China is a and political fallout of taking this month on a $20 billion two-lane road over the 16,000- on so much Chinese debt. Chinese railway project and is Source: Mercator Institute for China Studies THE WALL STREET JOURNAL. foot Khunjerab Pass. With a general election in reviewing other Chinese proj- At the other end of the pro- Pakistan scheduled for July 25, ects. posed route, Gwadar has failed an ascendant opposition is Chinese projects in Pakistan to attract significant cargo pledging to publish secret de- now vulnerable to chopping traffic. tails about the financing of include an $8 billion railway Chinese officials have Chinese projects, including the upgrade central to Beijing’s vi- grown accustomed to the se- Orange Line, and Pakistani in- sion of a new overland trade curity challenges in Pakistan. dustry is agitating for less- route, which would link It is the politics that frustrates generous perks for Chinese China’s northwest to Paki- them more. companies. stan’s Arabian Sea coast, Paki- They single out the Orange Pakistani authorities have stani officials say. The upgrade Line, which wasn’t in the orig- fallen behind on payments for aimed to double the average inal CPEC plan. It was added electricity from new Chinese speed on 1,170 miles of track at the insistence of former power projects—the bulk of between the port of Karachi Prime Minister Nawaz Sharif. the infrastructure program— and the northern city of Pe- China agreed, with Premier Li because of longstanding prob- shawar. Keqiang describing it as a lems getting Pakistanis to pay “I can’t see how the money “gift,” Pakistani officials say. their bills, according to a se- would be repaid” for the up- The Export-Import Bank of nior Pakistani official. grade, says one senior Paki- China provided a $1.6 billion stani official involved in dis- loan—on the condition the cussions with China. contract went to two state-run Bailout fears Chinese companies. They were The problems are expected exempted from income tax, come to a head by early fall, Opaque deals sales tax and import duties on

when Pakistan’s new govern- The IMF also would likely JAMIL AHMED/XINHUA/ZUMA PRESS construction materials. ment is likely to seek a bailout require Pakistan’s new govern- The Orange Line metro through Lahore, Pakistan was financed and built by Chinese companies. Sibtain Halim, Pakistan’s of- from the International Mone- ment to be more transparent ficial in charge of the Orange tary Fund, the nation’s first about existing CPEC projects. zones” to lure foreign inves- out from China. Chinese banks turns for Chinese banks than Line, says no other countries since 2013, according to Paki- Critics of the outgoing govern- tors. have already provided $3 bil- they can obtain at home, and expressed interest in bidding. stani officials. Such a bailout ment accused it of channeling Beijing and Islamabad say lion in emergency funds, at to drum up overseas business Opposition parties com- would likely include restric- funds to wasteful political that of 43 CPEC projects due commercial rates, to stabilize to use China’s surplus indus- plained that CPEC dispropor- tions on borrowing and spend- projects, often in opaque to be finished by 2030, around Pakistani foreign-exchange re- trial capacity. tionately benefited Punjab. To ing, the officials say, which deals, without competitive half—worth $19 billion—are serves, Pakistani officials say. Some Chinese bankers and appease them, China agreed in would force the country to bidding. completed or under way, in- Nadeem Javaid, chief econ- officials, though, are growing late 2016 to build metros for curtail its Belt and Road pro- “Deals like the Orange Line cluding a dozen power plants. omist of Pakistan’s planning more concerned about the fi- three more cities—Peshawar, gram with China, known as cannot be secret,” says Much of the infrastructure is ministry, suggests China nancial risk of Belt and Road Quetta and Karachi—each con- the China-Pakistan Economic Chaudhry Fawad Hussain, badly needed, especially the should rescue Pakistan with an projects, according to people trolled by opposition parties Corridor, or CPEC. spokesman for the main oppo- energy projects, which will interest-free loan. “It would be familiar with those discus- and often racked by violence. That would be a big embar- sition Pakistan Tehreek-e-Insaf help ease Pakistan’s chronic a kind of favor,” he says. If sions. Beijing had hoped the Or- rassment for China, which has (PTI) party. He says his party electricity shortages. not, “for what do we have this In its latest guidance to ange Line and other early portrayed its plan as a game- backed CPEC but wanted all Even so, some ministers in friendship?” Chinese companies investing projects would be finished in changer for this chronically agreements put before the the outgoing government said in Pakistan, China’s tax admin- time to help secure victory for unstable nation of 200 mil- parliament for review. in interviews they should have istration warned that Paki- Pakistan’s ruling party in July, lion—and a chance to prove Pakistan’s outgoing govern- negotiated better terms with stan’s capacity to repay debts according to people involved. the benefits of its develop- ment blames its debt crisis on China, and been more open Beijing envisions a “is extremely low.” Last year, however, Nawaz ment model to other nations. an overvalued rupee, and it about details. new route linking A Chinese bailout could Sharif was dismissed as prime “You’re then effectively questions Western motives in feed worries that Beijing is us- minister and this month was having the West bail out this criticizing Chinese loans. “Be- China to Pakistan’s ing Belt and Road to extract sentenced to 10 years in jail country,” says Andrew Small, fore China came along, they Pakistan promises Arabian Sea coast. onerous concessions, including for corruption. an expert on China-Pakistan weren’t worried about Third Official figures reviewed by equity in strategically impor- “The real reason for build- relations at the German Mar- World debt,” says Miftah Is- the Journal show that Chi- tant assets. ing these loss-making mega- shall Fund, a Washington think mail, the departing finance nese-backed power plants Sri Lanka’s government, un- projects has always been mas- tank. “If this is where Pakistan minister. were promised annual returns Another senior Pakistani of- able to repay a Chinese loan sive kickbacks,” Imran Khan, ends up financially, I think The U.S. helped build Paki- on investment of up to 34%, ficial says an IMF bailout for a port in Hambantota city, the main opposition leader, that’s going to be a big kind of stan’s infrastructure in the guaranteed by Pakistan’s gov- would need to be $8 billion to last year granted a Chinese said on Twitter in March. black mark against the entire 1950s and 60s, when it saw ernment, in dollars, for 30 $10 billion. The outgoing gov- state company a 99-year lease The Sharifs, and Pakistani Belt and Road.” the country as a Cold War ally. years. ernment, he says, “made lots on the facility. U.S. and Indian and Chinese officials, deny It also would give the U.S., More recently, Washington fo- There is skepticism about of attempts” to negotiate a officials have long thought that, and Mr. Khan has pro- the largest contributor to the cused on other economic aid government forecasts that Chinese bailout instead, but China wants a naval outpost duced no proof. IMF, a strong influence over and security assistance to CPEC will boost economic the Chinese disengaged in re- there, which China denies. At an Orange Line test run China’s plans in Pakistan. fight groups such as the Tali- growth from 5.8% this year to cent weeks because they They now suspect China in May, Shehbaz Sharif— Washington has been pushing ban. 7% by 2023, allowing Pakistan wanted to deal with the new could do the same at Gwadar, Nawaz’s brother and his back against what U.S. officials With the U.S. freezing all to service its debt. A March government after the election. a port on Pakistan’s Arabian party’s new candidate for pre- have called Beijing’s “debt- security aid and winding down IMF report blamed Pakistan’s A Chinese bailout could Sea coast that is part of CPEC mier—repeated a promise to trap diplomacy.” economic support this year, rising current-account deficit keep Beijing’s plans intact but and that Chinese and Pakistani build metros for Karachi and European Union and Indian Pakistani officials now say its and external debt obligations would set a worrying prece- officials say is purely commer- Peshawar, despite Pakistan’s officials also have stepped up financial future lies in emulat- partly on CPEC. dent. Chinese banks have pro- cial. debt crisis. criticism of Belt and Road, ing China’s emergence as a “The new government will vided at least $200 billion of Some diplomats believe “My crime is that I made saying it lacks transparency low-cost manufacturing hub. have to do some adjustment, loans to Belt and Road proj- Beijing will keep throwing this Orange Line for the peo- and sustainability and is de- CPEC, they say, will ease en- with us or without us,” says ects since 2013, Chinese offi- money at Pakistan, regardless ple,” Shehbaz told supporters, signed to expand China’s stra- ergy and transport bottle- Teresa Daban, the IMF repre- cials say. of the returns. China and Paki- standing in front of a banner tegic influence. necks, paving the way for Chi- sentative in Pakistan. The rationale has been stan have had close ties since decorated with his portrait “The Ming Dynasty appears nese-style “special economic Pakistan could seek a bail- partly to generate better re- the 1950s, when each saw the alongside President Xi’s. THE WALL STREET JOURNAL. ** NY Monday, July 23, 2018 | A10A GREATER NEW YORK Residents Stumble Over Dockless Bikes

As pilot program rolls director of Community Board recently introduced dockless where it shouldn’t be, Mr. 14, which includes Rockaway, bike shares, have also faced Contee said users can contact into the Rockaways, said the riders could be more the misuse of the bikes. the company via the app, two-wheelers are considerate, but also argued Dave Reed, Pace’s New York phone call or text and a Lime that some people just like to market manager, said the com- team member will arrive dumped in odd places complain. pany has only received positive within an hour to move it. “The city of New York could feedback from the community. The dockless bikes are pop- BY LARA KORTE be handing out 50-dollar bills “We actually haven’t been ular among tourists coming AND KATIE HONAN on the street and 20% of the seeing much of any issue at all from Manhattan and Brooklyn, population would complain in the first week. People are who flock to the beach during Some have been spotted on they’re not hundreds,” Mr. embracing the technology and warm months. a sidewalk piled on top of one Gaska said. ease of use,” Mr. Reed said. Kerielle Sollecito, 24 years another. A few have been dis- Each company’s bikes can In response to concerns old, was riding a Lime bike to carded in the backyards of be unlocked and rented with a about vandalism, he said Pace the Rockaway beach on Tues- homes. Another was left hang- smartphone app at $1 per 30- has experienced less than 4% day after taking the ferry in ingonafence. minute ride. Lime’s pedal-as- of improperly parked bikes in from Manhattan. They are ride-sharing bikes sist bikes, which will join the the other cities where the com- “I love it,” Ms. Sollecito said.

that are part of a New York ENID B.peninsula ALVAREZ FOR THE WALL STREET JOURNAL starting Saturday, pany operates, which include “I lived at the Jersey Shore City pilot program that rolled Kerielle Sollecito signed into an app before starting her ride. will cost $1 to unlock and 15 Rochester, N.Y.; Albuquerque, originally, and I think they into the Rockaways, Queens, cents a minute of riding. After N.M.; and Knoxville, Tenn. need to put these there as well. only a week ago. The bicycles, Atwood, 31 years old, said last leaving the bikes strewn across reaching their destination, rid- Caen Contee, vice president You can ride it wherever you unlike their Citi Bike counter- week. “It’s sort of like what sidewalks and public beaches. ers can leave the bike any- of marketing at Lime, said the want, you have the freedom.” parts, don’t require a docking happens to shopping carts, Members of a Facebook where they please, but prefer- company saw 1,000 rides on Mr. Gaska from Community station. Riders can rent them, how people just kind of mess group called Friends of Rock- ably out of harm’s way. Pace the Rockaway bikes within the Board 14 said he isn’t ready to ride them and then leave them around with them.” away Beach have been sharing bikes require users to lock first week. Any misuse of the condemn the bikes yet, but wherever they choose. And Over the past week, bike- photos of the bikes left them to something, like a bike bikes, he said, is likely to come said the program might need that is the problem, according share companies Lime and knocked over on sidewalks and stand or fence, whereas Lime from people who don’t under- some adjusting. to some residents in the Pace have introduced 300 of parked in inconvenient places. bikes have a mechanism that stand how the system works. “I think this is kind of like beachfront community. these dockless bikes to the Rockaway is the first of four locks the back wheels in place. “There are always people the shakeout cruise,” he said. “I’ve seen people throw Rockaway Peninsula. Although locations, including Staten Is- Rockaway isn’t the first trying to understand the pro- “By the end of the summer, them over the fence. I’ve seen interviews indicate the reac- land, the Bronx and Brooklyn, town to see the downside of gram better or haven’t really we’ll have to revisit to see if them get left in some pretty tion has been widely positive, to get the dockless bikes. dockless bikes. Cities like Aus- been educated,” he said. this is something we actually inconvenient places,” Marshall some residents say riders are Jonathan Gaska, managing tin, Texas, and Boston, which If a bike ends up some- want.” Public-Housing Program Boosts Food Entrepreneurs

BY CHARLES PASSY the process” of starting a busi- ness from scratch. In a lower Manhattan class- “It eliminated a lot of extra room on a summer weeknight, steps,” she said. John Childress, a veteran culi- The program provides nary and business profes- courses covering everything sional, challenged a group of from government regulations about 30 budding food entre- to budget management, and it preneurs seeking his advice. also helps attendees incorpo- He pushed them to bring in rate their business and pays extra help to avoid suffering the necessary fees involved. from burnout. He told them to And while it doesn’t actually consider creative pricing strat- fund their businesses, it con- egies to boost revenue. And he nects them with many lenders, encouraged them to explore particularly those who support new markets. “You can’t be small businesses. afraid to go outside your Which isn’t to say all 200- neighborhood if that’s your plus graduates of the program best customer,” he said. to date have been successful in The entrepreneurs weren’t establishing a food business. well-funded individuals start- About 30% don’t end up incor- ing up trendy restaurants or porating. And even those who craft breweries in fashionable do face challenges. locales. Rather, they were peo- Sandra Mathis, a graduate ple living in public housing from last year who runs Grace hoping to better their situation Kelli Cupcakes, said the pro-

through the business of food. SANGSUK SYLVIA KANGgram FOR THE WALL STREET JOURNAL has given her confidence The class was part of the Sandra Mathis, who runs Grace Kelli Cupcakes, says Food Business Pathways has given her confidence that she can eventually succeed. she can eventually succeed. Food Business Pathways pro- Still, operating the baked- gram, a 10-week-plus program agency. the Fund for Public Housing, a vices, with additional support $215,000 in public funding. goods company named after that is open to the 400,000 Some of the program’s nonprofit organization. from nonprofit partners. The For Raquel Whittaker, a her daughter is a challenge— residents of the New York City graduates will be featured at Launched in 2015, the pro- largest donor is Citi Commu- Food Business Pathways gradu- revenue can range from $100 Housing Authority’s 325 devel- City Flavors, an event Monday, gram brings together key city nity Development, a Citigroup, ate who now runs Sweet Milk & to $3,000 a month. opments, along with 200,000 at Chelsea’s High Line park, agencies, including NYCHA Inc. unit, which has provided Sugar Desserts, a baked-goods “I’m struggling, but I’m still New Yorkers living in Section which is being organized by and the New York City Depart- approximately $500,000. The company, the main benefit is out there pushing,” Ms. Mathis 8 housing administered by the the Food Working Group of ment of Small Business Ser- City of New York has provided how the program “streamlined said. This Puppy Love Migrant Mother and Son Are Reunited Came With Strings BY IAN LOVETT Delsy Guadalupe “Lupe” Serrano Torres counted the BY NANCY COLEMAN An employee at The Pet days since she had seen her Zone, Ms. Walrath said, told her only child, Danny. On Satur- It didn’t take Chelsea Wal- Remi’s list price was about day, it was one day short of rath long to fall in love with $1,900, but according to the two months. Remi, a Chihuahua puppy who contract, the puppy would have The two were separated in fell asleep in her arms last cost more than twice as much— May, after illegally crossing year at an upstate New York $4,370—after two years of her the U.S.-Mexico border near El pet store. paying about $180 a month. Paso, Texas, following a long But it took her about a And after the leasing period, journey from their native Hon- month after bringing him home if Ms. Walrath wanted to le- duras. to realize that the contract she gally own Remi, she would Ms. Serrano Torres, 28 signed at The Pet Zone in Wa- have to pay an additional $300 years old, was held at a deten- tertown, N.Y., wasn’t to finance purchasing fee. She opted in- tion center in Texas for more the purchase of the dog—it stead to pay off the lease early than a month. For part of that was to lease him. and purchased Remi after three time, she said of her 9-year- Remi was legally owned by months for $1,900, in addition old son, “I didn’t know where a company called Wags Lend- to the monthly payments she he was.” ing, a Nevada-based firm spe- already had made. The mother and son had cializing in pet leasing. “I felt like they lied to me been caught up in a new policy “I talked to the lease com- and this wasn’t right. I kind of of the Trump administration’s pany one day, and they were felt trapped, too, because I felt crackdown on immigration RYAN CHRISTOPHER JONES FOR THE WALL STREET JOURNAL like, ‘No, that’s not what’s go- like there was nothing I could along the southern border that Delsy Guadalupe ‘Lupe’ Serrano Torres hugged her son, Danny, at Cayuga Centers in East Harlem. ing on, you’re renting this do,” she said in an interview resulted in the separation of dog,’ ” said Ms Walrath, who with The Wall Street Journal. more than 2,500 children from family in Maryland. They had all been too anxious Danny said his foster fam- is 29 years old and lives in “They took advantage of me.” their family members. She was able to talk to to sleep much the previous ily, where he was one of five Gouverneur, N.Y. Ms. Walrath’s story—docu- A federal judge in San Di- Danny for only 20 minutes, night. foster children, had treated mented in records from a ego last month ordered that once a week. He seemed dif- The family arrived early, him well, but he missed his fraud case brought by the New the government reunite the ferent on those calls. around 8:30 a.m. They went mother. He was doing well York attorney general’s office families, setting a deadline of “He didn’t talk much,” Ms. up to the third floor, where now, he said. “I’m with my in May against the pet-store July 26. The government says Serrano Torres said. “When the Cayuga Centers officers mom.” He got lice during the chain, and recounted to the it has reunited more than 400 we’re together, he always were located. While they were separation, his aunt said. Journal—isn’t unusual. At children with their families talks.” When they had been standing in the hall, a man After picking up Danny, the least six other customers gave and has cleared 1,600 more to separated, she said, “He was came around the corner with family headed back to Mary- similar accounts about The Pet be reunited. afraid. He was crying…same as Danny. land. Ms. Serrano Torres Zone, which has four outlets in While Ms. Serrano Torres I was. I couldn’t do anything Mr. Serrano saw him first, hopes they can stay, and has New York, in depositions for was being held in Texas, her about it.” and gave him a hug. applied for asylum in the U.S. the same continuing lawsuit. sister-in-law in Maryland, Nila On Friday, the family got a Then Ms. Serrano Torres She is scheduled to appear in Ted Bell, owner of The Pet Serrano, discovered Danny had call: They could come pick up screamed, “Danny!” She picked court in November. Zone and a defendant in the been sent to a foster family in Danny at 9 a.m. on Saturday at him up off the ground, hug- When asked what they lawsuit, told the Journal his Manhattan and made contact an East Harlem social-services ging him close. They stayed planned to do, as they pre- lawyers advised him not to with social workers handling agency, the nonprofit Cayuga like that, the mother crying pared to head back to Mary- comment at this phase. But he his case. Centers. and holding her son in the air, land, Ms. Serrano Torres be- said he is “confident that this Ms. Serrano Torres, who Before 5 a.m. on Saturday, for more than a minute. gan to cry. “We’ll be together,” case will resolve in our favor.” was a nurse in Honduras, was the family—Ms. Serrano Tor- After Ms. Serrano Torres she said. “I never thought I’d The Federal Trade Commis- released from detention in late res, plus her brother, Elmer signed some paperwork, they be away from him, not for a sion recently posted a caution- June, and went first to see a Serrano; his wife, Ms. Serrano; walked outside together into a moment.”

CHELSEA WALRATH ary blog post about pet leas- brother in Virginia, and then and their son—began the long bright, almost cloudless New —Ryan Jones Remi the Chihuahua PleaseturntopageA10B to her sister-in-law and her drive north from Maryland. York morning. contributed to this article. A10B | Monday, July 23, 2018 NY ** THE WALL STREET JOURNAL. GREATER NEW YORK

GREATERNEW YORKWATCH Company Tries New Mix to Revive a Mall BY KEIKO MORRIS for a mixed-use development NEW YORK CITY that includes showrooms, as Owners of struggling malls many as 1,200 apartments, and Many Still Displaced have added medical clinics, of- retail, office and hotel space, After Pipe Explosion fices, even amusement-park according to public documents. rides in an effort to resusci- “That’s what has been done Most of the estimated 500 tate a fading retail model. in China,” said Michael Mai, people evacuated from their Now, China Lesso Group Lesso’s New York general man- homes in Manhattan’s Flatiron Holdings Ltd., a maker of ager. “In the same space, you District when a century-old pipes, building materials and can have both, and you can steam pipe exploded last week home-furnishing products, find a way to serve both sets haven’t been able to return, ac- thinks it has of customers.” cording to officials. PROPERTY hit on a win- Mixing wholesale and retail Crews from the fire depart- ning formula: is hardly a common turnaround ment and Con Edison have coor- Mixing manu- strategy. Retail real-estate con- dinated a cleanup of the area af- facturers’ showrooms that sell sultants and brokers said they ter asbestos was found on the lighting fixtures, floor tiles and can’t recall anyone else trying pipe that ruptured Thursday at kitchen cabinets with tradi- this approach in the U.S. Fifth Avenue near 21st Street. tional mall chains such as the But the concept isn’t all An estimated 500 residents Gap and Cheesecake Factory. that surprising. The growth in from 249 units were displaced. The Hong Kong-based com- e-commerce has forced tradi- Although some of the buildings pany is in the midst of a $25 tional brick-and-mortar retail have been deemed safe, a million renovation of what chains to close stores as they spokesman for Mayor Bill de was the Mall at the Source in expand their online operations. Blasio said Sunday that a “sig- Westbury, N.Y. The firm aims Mall owners have been dress- nificant majority” still weren’t to recast the long-ailing retail ing up properties with food

back home. Con Edison has set center as a home-furnishings and entertainment venues and LESSO HOME up a relief site at a nearby marketplace for design profes- experiences that aren’t so eas- Lesso, which is renovating a Long Island mall, plans to create a lawn where people can hang out. school for residents and offered sionals, contractors and retail ily replicated online. financial assistance to residents buyers—with a big food and While some malls in well- many retail properties didn’t flagship store. The company’s Lesso Home starting at $500. It isn’t clear entertainment component for located, dense, affluent areas drive the timing of Lesso’s The Westbury mall had concept intends to provide a when the area will fully reopen. local shoppers. have maintained strong occu- plans to launch its home-fur- been in decline for the past physical market where Chinese The cause of the rupture is Redubbed Lesso Home New pancy rates, lower-quality nishings showroom concept in decade, despite its location in and international manufactur- still under investigation. York Market, the mall with its malls have suffered from store the U.S., but it certainly a dense, affluent retail hub on ers, including Lesso, can dis- —Katie Honan collection of showrooms would closings. The vacancy rate for helped, Mr. Mai said. The Long Long Island. Some retail con- play their interior-decor prod- be the first of several that malls in the U.S. reached 8.6% Island property, which has sultants said it had design ucts and building materials. REAL ESTATE Lesso hopes to roll out across in the second quarter of this more than 700,000 square feet flaws that stymied foot traffic. Lesso also plans to create a the U.S., and eventually in other year,upfrom8.4%inthefirst of retail space, consists of the Lesso purchased both prop- more welcoming environment, Developer Gets Loan countries. Lesso has a site in quarter, and the highest level former Mall at the Source and erties for $92 million last year. adding an open lawn for peo- For Brooklyn Project Frisco, Texas, almost twice the since 2012, according to real- the adjacent, connected build- The mall is largely vacant now, ple to hang out on that would size of the Westbury property estate research firm Reis Inc. ing that once housed a Fortun- and Lesso expects to complete feature food trucks and The developer behind a that is in the approval process The tough environment for off jewelry and houseware its makeover early in 2019. events. Brooklyn downtown office proj- ect has landed a $235 million construction loan from a large An employee at The Pet include extra balloon payments explain the lease needs to be Canadian real-estate lender. Pet-Store Zone’s Watertown location said Chelsea at the end of the lease, such as “clear and conspicuous,” and JEMB Realty Corp. secured the store stopped offering fi- Walrath says a fee to purchase the pet. understandable for consumers, the loan from Otéra Capital, one nancing plans through Wags she thought The bigger issue often is she said. of Canada’s largest real-estate Pup Was Lending “well over a year” ago. she signed a whether customers understand “Businesses can’t put the debt providers, marking a mile- It is unclear whether Wags deal to buy they are leasing the animal in onus on consumers to ‘go stone for One Willoughby Lending is still operating after the dog, but it the first place. The problem is fetch,’ if you will, to figure it

Square, a 500,000-square-foot A Rental its parent company, Bristlecone CHELSEA WALRATH was a lease. two-sided: Many consumers out yourself,” Ms. Fair said. office tower, according to JEMB. Holdings, filed for bankruptcy might not be familiar with what “That’s not what the law says.” The building, bordered by Wil- ContinuedfrompageA10A last year. Wags didn’t respond they are signing, and busi- Businesses also specifically loughby, Duffield and Gold ing, its second one in the past to requests for comment. But unlike leases for inani- nesses might not be explaining need to disclose how much streets, is about a third leased, year about what it says is a The general elements of a mate objects, some of the the offer clearly enough. consumers will have paid at the with architecture firm FXCollabo- “relatively new industry.” pet lease aren’t too different terms included with pet leases There are certain compli- end of the leasing term and de- rative Architects LLP taking The practice also is on its from those in more common can have troubling conse- ance requirements under the tails about monthly payments. about 40,000 square feet and a way to becoming illegal in New leases for cars or furniture. quences. The leasing company Consumer Leasing Act that Some responsibility falls on 300-seat public school slated to York. Both chambers of the Consumers make monthly pay- can repossess the animal if a come into play when stores the consumer, as well. If there fill 87,000 square feet on the state legislature passed a bill ments for a set leasing period— payment is missed, and con- advertise a leasing option, is anything in the paperwork first six floors. The tower is ex- last month banning pet leas- typically one to three years, the sumers might still be obli- said Lesley Fair, a senior at- that shoppers don’t under- pected to be completed by the ing, and the measure is await- FTC says. The consumer usu- gated to pay the company if torney in the FTC’s Division of stand, Ms. Fair said, they first quarter of 2021. ing Gov. Andrew Cuomo’s sig- ally ends up spending much their pet runs away or dies. Consumer and Business Edu- should ask about it before —Keiko Morris nature. more than the original cost. These agreements also can cation. The language used to signing documents. CHEWON THIS

HEALTH CARE STARTS DONATE, VOLUNTEER, WITH HEALTHY FOOD. OR JUST LEARN MORE AT GLWD.ORG Since 1985, we’ve been cooking and home-delivering nutritious, individually tailored meals to people living with serious illness. Being sick and hungry is a crisis. You can help. THE WALL STREET JOURNAL. Monday, July 23, 2018 | A11 LIFE&ARTS LIBBY MARCH FOR THE WALL STREET JOURNAL (3) Lucille Ball, Steve Carell, Kristen Schaal and other famous funny faces mug for the camera in the National Comedy Center’s ‘Ham It Up’ display.

BY DON STEINBERG COMEDY thing wouldn’t be just touching an electronic screen,” says Stephen Platenberg, creative director of Jamestown, N.Y. Cortina Productions, which devel- CURATORS AND workmen are This Museum Takes oped many of the exhibits. putting the finishing touches on A display about late-night TV the National Comedy Center, has a floor-standing television cam- which opens here Aug. 1. They are era that visitors can swivel to look stocking the museum’s two bars, around the sets of talk shows fine-tuning the virtual Jim Gaffi- Jokes Seriously through the ages, from Jack Paar to gan in the Hologram Theater and Jimmy Fallon. (For those two making sure that George Carlin’s shows, it’s the same 30 Rock stage.) seven dirty words you can’t say on At an exhibit about comedy television are spelled correctly in props, guests can grab plastic anvils, very big letters. The National Comedy Center opening next month in Lucille Ball’s whoopee cushions and other items Mr. Carlin’s words are plastered hometown looks at what makes us laugh, from vaudeville to podcasts and place them on interactive video across an area down in the cellar tables to watch movie and TV clips called the Blue Room. In this part that use those props in slapstick. of the Center, recommended for Ms. Ball’s estate and creation more Comedy isn’t all fun and games, grown-ups only, the museum ex- “came to us and said, than individual per- of course. One stand-up video clip plores taboo topics, foul language ‘Hey, this was sup- formers. (In a “Sein- shows a scathing 2015 routine and the question of whether posed to be about all feld” clip, Jerry tries Judd Apatow did about Bill Cosby. jokes—for example, ones about comedy,’” Ms. Gunder- out some comedy ma- How is the Comedy Center han- tragedies—can be “too soon.” son says. The $50 mil- terial on his friend dling the Cosby question—and “We didn’t want to sanitize or lion National Comedy Elaine: “Tell me if you other performers it doesn’t feel censor the very thing we’re cele- Center, a few blocks think this is funny: right to celebrate? brating,” says Journey Gunderson, from the Lucille Ball Men definitely hit the “We’ve taken the approach that executive director of the Center. Desi Arnaz Museum, remote more than when it’s necessary for storytell- Upstairs on the main floor, the was built with private women...men don’t ing, to do justice to the history of laughs stay mostly family-friendly. donations as well as care what’s on TV, comedy, we are including the work Artifacts and high-tech exhibits, about $14 million from men only care what of controversial figures,” Ms. Gun- spread throughout two buildings New York state and $2 else is on TV.”) derson says. “We’re not going to including the 1932 Jamestown million in federal funds. An advo- Visitors can see some of the mu- pretend that ‘The Cosby Show’ train station, explore comedy from cate for much of the government seum’s 25,000-piece George Carlin wasn’t revolutionary for sitcoms.” vaudeville and Buster Keaton to funding was Sen. Chuck Schumer. archive as well as Rodney Danger- There’s political humor through- podcasts and online memes. “Sat- His cousin Amy Schumer will head- field’s duffel bag of jokes, Lenny out the museum, most of it not too urday Night Live,” Jerry Seinfeld, line this year’s comedy festival, co- Bruce’s black trench coat, a frilly partisan. Ms. Gunderson says the Carol Burnett, Kevin Hart, the inciding with the National Comedy Phyllis Diller dress and Johnny planners talked about how people Three Stooges, “SpongeBob Center’s grand opening. Carson’s monologues with scrib- might react to all the comedy—not SquarePants,” Sarah Silverman, The western New York location bled revisions. But the rooms are just politics but jokes about race, “Caddyshack” and hundreds of puts the National Comedy Center in relatively light on artifacts and religion and gender. “It very quickly other favorites are in the mix. a sort of Hall of Fame alley. It’s heavy on audience participation. became less about politics and The concept of a comedy mu- closer to Cleveland (Rock & Roll Hall Visitors are given wristbands con- more about all the ways we might seum gestated for decades in of Fame) and Canton, Ohio (pro foot- taining radio-frequency ID chips, offend people,” she says. A state- Jamestown, which TV-history nerds ball) than to Cooperstown (baseball) then use touchscreens to build per- ment in the lobby will warn visitors may recognize as Lucille Ball’s or Canastota, N.Y. (boxing). There sonal sense-of-humor profiles. that the comedy doesn’t necessarily birthplace. In the 1980s, James- were early ideas of making this a Guests refine their profiles by tap- represent the views of the museum. town’s arts council asked Ms. Ball Comedy Hall of Fame, too. But co- ping on hotspots throughout the ex- But comedy also brings people about a museum devoted to her life medians, apparently tired of being hibits. There’s a 60-foot-wide touch- together. In the comedy karaoke and work. She said she would pre- judged and ready to be seen as art- screen wall showing hundreds of cafe, visitors can perform short fer a place that celebrated comedy ists, advised against it. Comedian connections among comedians. In sets of material by established co- widely. In 1991, two years after Ms. Lewis Black told Ms. Gunderson, the Hologram Theater, a 3-D projec- medians in front of complete Ball’s death, Jamestown launched “You don’t see the Met going, ‘You tion of present-day Jim Gaffigan in- strangers—and feel the experience an annual Lucille Ball comedy festi- know, van Gogh did some good stuff. troduces younger versions of himself, of getting a laugh or bombing. The val. Five years later, the city Let’s induct van Gogh this year.’” Items on display at the National saying, “Please welcome ’90s me!” cafe has a bar, Ms. Gunderson says, opened the Lucille Ball Desi Arnaz The exhibits are organized Comedy Center include the trench “One of the things the team because “sometimes comedy is best Museum, shelving the broader plan. around comedy genres, formats coat made famous by Lenny Bruce. worked hard on was that every- with a two-drink minimum.”

ARTS & ENTERTAINMENT AT COMIC-CON, ‘AQUAMAN,’ OTHERS SCORE WITH FANS

BY ERICH SCHWARTZEL translate to overall success at the box office. More than 130,000 people—many dressed as characters—descended on the convention San Diego center for the annual celebration of fandom, DIRECTOR M. NIGHT SHYAMALAN said encompassing several days of panels, mer- that when he was making his 2000 superhero chandise sales and studio presentations of movie “Unbreakable,” studio executives coming films and television shows. warned him against advertising it as a comic- When it was founded in the 1970s, Comic- book story. Con drew a niche crowd. But since movies like That was “too fringe,” he says they told “Iron Man” and “Spider-Man” have turned him. “It’s [for] ‘those people’ who go to comic books in the profit drivers at most ma- those conventions.” jor studios, it’s not the stars and directors who This time, Mr. Shyamalan was not only at are the most powerful people in the conven- the convention, but begging for attendees’ tion center. It’s the fans they come to court. approval. The director told the story Friday at Comic-Con International, where he Hits and Misses brought footage of his latest feature, “Glass,” The slightest misstep in a crowd ready to

EDUARDO CONTRERAS/SAN DIEGO UNION-TRIBUNE/ZUMA PRESS a January follow-up to “Unbreakable” that tweet or post about their reactions to early At Comic-Con International in San Diego, visitors passed the DC Comics booth with Supergirl and Universal Pictures was hoping would gener- footage can set a tone that lasts until the White Canary on display. The brand’s next feature ‘Aquaman’ drew a big response at the event. ate buzz among hard-core fans that can PleaseturntopageA12 A12 | Monday, July 23, 2018 ** THE WALL STREET JOURNAL. LIFE & ARTS

Getting Set Up to WHAT’S YOUR WORKOUT? | By Jen Murphy Stand Up No Ocean Is No Problem For This Stand-Up Paddleboarder

Vermonter Bob Arnot, 70 years old, uses Lake Champlain to train for ocean SUP races

Stand-up paddleboarding is the fastest-growing outdoor rec- reational activity in the U.S., ac- cording to a 2017 report by the Outdoor Foundation. Jenny Kalm- bach, a Kona, Hawaii-based for- mer winner of the Molokai 2 Oahu race, says the sport is ac- cessible for everyone from chil- dren to octogenarians. “Anyone can paddle; getting good is all about technique,” she says. Falling is one of the biggest fears, she says, so let it happen. “If you get off-balance, the worst thing you can do is try to stop yourself. That’s when people tend to get hurt.” She suggests begin- ners start on a large, stable VERMONT IS BETTER known for Bob Arnot trains on Lake Champlain, board in calm water. Begin on snow than surf. But that hasn’t de- above, with coach Tommy Buday. your knees. When you do stand, terred Bob Arnot from pursuing his He competes in about 20 stand-up keep your eyes to the nose of fantasies of ocean adventure. Most paddleboard races a year. the board or on the horizon. summer days, the 70-year-old “People’s instinct is to look at Stowe, Vt., resident hits his local but he has a hard time taking time their feet and that throws you “surf club” on Lake Champlain, off. “I am a master of overtrain- off balance,” she says. paddling to the Beach Boys and the ing,” he says. “I always push so Another common mistake is Surfaris as he trains for long-dis- hard that something hurts.” He overpaddling. “When your paddle tance stand-up paddleboard races. once trained so hard the day be- passes your feet, you’re actually Dr. Arnot had aspirations of be- fore a race that he got a blister on slowing yourself down,” she says. ing a surfer, but says he was never his hand from paddling that re- “When your elbow comes to your good at paddling prone and pop- quired medical attention. hip, pull the blade up out of the ping up to ride a wave. Seven He says Nordic ski racing keeps water.” Rather than pull the pad- years ago, he was in Nantucket him conditioned in the winter. dle back with a bent bottom arm, and tried stand-up paddleboard- “The double poling motion and she says you want to keep your ing, or SUP. “An instructor told me crouched stance simulate what I arm straight and use your lat I had terrible form,” he recalls. do in SUP racing,” he says. muscles and core more than your “He then told me people race SUPs arm strength. Keep your knees and right then I was determined to The Diet soft, she says. If your feet start pick it up as a serious racer.” Dr. Arnot starts the day with five to cramp, try wiggling your toes. He dove headfirst into the his age group, and holding his own paddle for 15 miles at a slow and cups of coffee—he owns his own A flotation device and a board sport, entering the 2011 Battle of in the open-age division. “Races steady pace one day and then do coffee company—and a bowl of leash are safety essentials, she the Paddle, an elite, 10-mile SUP are like my cocktail parties,” he intervals the next. His goal with oatmeal topped with fruit and says.

race from Dana Point, Calif., to San says. “I get to chat before and af- intervals is to stress his “VO2” brown sugar. Lunch is usually a COREY HENDRICKSON FOR THE WALL STREET JOURNAL (3) Clemente, Calif. “I borrowed a ter with new and old friends.” max, the rate at which you can smoothie made from Greek yogurt, board and probably swam half the He spends one month a year on take oxygen from the air and de- kale, blueberries and strawberries. month for the subscription-based course,” he says. “But I loved the Nantucket and visits Maui twice a liver it through the lungs into the He grills Alaskan salmon or tuna coaching site, Paddle Monster. demographics of the community. It year to train on the ocean. He is bloodstream for use by your mus- for dinner in the summer and An annual membership at the was a sport for all ages.” preparing for the Molokai 2 Oahu cles. “Pushing myself is the only pairs it with whole-grain pasta or Burlington Surf Club costs $250. An author and chief medical offi- Paddleboard World Championships, way to build speed,” he says. An wild rice and asparagus or snap His annual family membership at cer for a humanitarian nonprofit which takes place in Hawaii on interval workout might consist of peas. He has Cream of Wheat or the Swimming Hole, his gym in that does work in Iraq, and former July 29. The approximately 32-mile 10 sets each of one-minute, 30-sec- pancakes and three cups of coffee Stowe, costs $1,250. medical and foreign correspondent course crosses the Molokai Chan- ond, and 15-second SUP intervals. before a long race. He tries to He paid around $500 for his for NBC and CBS, Dr. Arnot has al- nel, considered one of the toughest On Wednesday nights he partic- drink Gatorade every 25 minutes Garmin Forerunner 935 watch. He ways been interested in health and ocean channels in the world due to ipates in time-trial races, which during a race. wears a VestPac WilsonPac 2018 fitness. Paddling appealed to his ob- its strong winds and currents and usually span 6.2 miles, at the Burl- (retail $85) filled with Gatorade session with endurance sports and large swells. This will be his sixth ington Surf Club. Most Saturdays The Gear & Cost during races. His Salomon Speed- biomechanics. “The part I love most time competing in the race. he finds a race, such as the 9-mile Dr. Arnot owns about a dozen surf cross sneakers cost $130. about sports is learning new tech- Brattle Paddle, which took place and SUP boards, which range in niques,” he says. “I was instantly The Workout on the Connecticut and West Riv- price from $1,300 to $5,475. His The Playlist captivated by the SUP stroke.” When home in Vermont, Dr. Arnot ers in June in Brattleboro, Vt. paddle cost around $500. He will Dr. Arnot wears waterproof ear- Dr. Arnot hired various coaches, spends about two hours, five days a Dr. Arnot had both hips re- use a 17-foot custom Bayonet tour- phones and has an eight-hour play- including former Olympic canoe- week training on the water. Lake placed in 2007. That hasn’t slowed ing board from SIC Maui in the list on his iPod mini. “I listen to the ists Tommy Buday and Larry Cain, Champlain isn’t the Pacific, but he him down. On “rest” days he hits Molokai 2 Oahu race. He works whole spectrum, from the Police to help improve his form and says winds can reach up to 25 knots, the gym and puts in 90 minutes on with eight different coaches—two and the Rolling Stones to Mozart speed. He says his pace has im- simulating some of the rough condi- an Arc Trainer, followed by a of them regularly—who specialize and Hymns Triumphant on the proved from 4½ to 6½ miles an tions he’ll face in ocean races. strength circuit that might include in everything from nutrition to calmer parts of races,” he says. hour. He competes in about 20 His coaches have created a half- a bench press, row, lat pull-downs, downwind paddling, and pays each “And of course, I have all of the races a year, from April through dozen workouts that he rotates triceps dips and squats. He admits anywhere from $50 a month to surfer music, like ‘Pipeline’ and November, often finishing first in through. For example, he might that his coaches press him to rest, $200 a session. He also pays $57 a ‘Surfin’ Safari.’” DAVID MAUNG/EPA/SHUTTERSTOCK CHRIS DELMAS/AGENCE FRANCE-PRESSE/GETTY IMAGES ERICH SCHWARTZEL/THE WALL STREET JOURNAL From left: Comic-Con this weekend attracted fans of all ages; Jamie Lee Curtis attended to publicize a ‘Halloween’ reboot; two fans came as Indiana Jones and the boulder from ‘Raiders of the Lost Ark.’

news for Warner Bros., which has Scream Queen in the movie,” he said. year history. Marjorie Liu won the Comic-Con tried in recent years to rejuvenate Jamie Lee Curtis is reprising “Are you serious?” Ms. Curtis award for “Monstress,” about a teen- its DC brand after critical flops like her “Halloween” role in a reboot asked. When it became clear he age girl in early 20th-century Asia “Justice League” and “Suicide to John Carpenter’s horror classic was, she walked off stage to em- who discovers a mysterious link with Spotlights Squad” turned fans into skeptics. coming to theaters this October, brace him in a flurry of a smart- a monster. The series written by Ms. The studio’s other offerings, the and the extended trailer shown phone camera flashes. Lui and drawn by Sana Takeda for comic-book comedy “Shazam!” and Friday was a hit with the crowd. Image Comics won five awards. New Releases Harry Potter spinoff “Fantastic Her character, Laurie Strode, I Love the ’80s Beasts: The Crimes of Grindel- began as a teenager who experi- You can tell a new generation of More Than Comics wald,” also scored high—though enced unimaginable trauma at a directors is calling the shots by Pilar Montes, a retired com- ContinuedfrompageA11 the latter may have been in part time when few would know how to when the movies are set. After puter scientist from Santa Barbara, movie’s release. It was hard to get due to a surprise appearance by treat it, Ms. Curtis said. In this se- “Stranger Things” popularized the could have dressed as a “Star momentum for Warner Bros.’ Johnny Depp in character. (Warner quel, she finally has a chance at 1980s, some of the biggest features Trek” Borg, as she has in the past. “King Arthur: Legend of the Bros. also made the savvy call to revenge. “This is a woman who at Comic-Con this year also em- Instead, she opted for a more topi- Sword” after its footage was met release the Comic-Con footage im- haswaited40years...totake braced the decade. “Wonder Woman cal choice: Supreme Court Justice with shrugs at the convention in mediately, allowing people every- back [her] narrative,” she said. 1984” and the new “Transformers” Ruth Bader Ginsburg. 2016. (The movie opened the next where to weigh in.) Then, the kind of surreal moment installment “Bumblebee” both take “She’s the real hero, don’t you year and grossed a disastrous $39 Sony’s “Venom,” an R-rated that Comic-Con can bring happened. place in the ’80s, with “Wonder think?” said Ms. Montes, wearing million.) On the other hand, block- comic adaptation about a journal- In the question-and-answer session, Woman” showing off a scene set in a a judicial robe and a lace kerchief. busters like “Deadpool” built early ist who becomes the host of a a middle-aged man told Ms. Curtis mall food court and “Bumblebee” Trenten Eldred, a 22-year-old buzz there and rode it to box-of- sharp-toothed alien, was also well- that her performance in “Halloween” featuring a Sony Walkman alongside from San Diego, came as Indiana fice success. received among the crowd, some had saved his life. Years ago, he dis- the giant robots. Jones, a conventional pick. But his This year, the next DC Comics of whom yelled, “We are Venom!” covered a knife-wielding home in- friend Helena Christensen came feature, “Aquaman,” starring Jason On the television side, fans were vader in his own house. Rather than A First for ‘Monstress’ dressed as the boulder that chases Mamoa as the amphibious super- chattiest about “Doctor Who” and panic, he asked himself, “What Actual comics and graphic novels him in “Raiders of the Lost Ark.” hero, drew the highest level of re- “The Walking Dead,” which used would Jamie Lee Curtis do?” He get their due at Comic-Con. On Fri- “He said, ‘You could be Mary sponse on social-media platforms, its convention appearance to con- grabbed knitting needles. day night, the Will Eisner Comic In- Jane.’ I said, ‘Why don’t I be the according to an analysis by the Lis- firm that star Andrew Lincoln was “I ran down to the neighbor’s, dustry Awards gave its best-writer boulder?’ ” Neither could walk far tenFirst analytics firm. That’s good leaving the show. and started screaming like you did prize to the first woman in its 30- without getting stopped for photos. THE WALL STREET JOURNAL. Monday, July 23, 2018 | A13 LIFE & ARTS

ART REVIEW Depictions Free From Bias

An exhibition shows how African-Americans used studio photography to present and express themselves on their own terms

BY ALLIE SPENSLEY explicit. Sailors and sol- diers show off crisp uni- forms, mothers beam New York with pride at their chil- IN JUNE 1963, James dren, couples squeeze Baldwin took to the po- into the same chair, and dium at Castlemont friends (or are they sis- High School in Oakland, ters?) grin side by side. Calif., to address its Most sitters pose in predominantly black front of intricately student body. “Every painted backdrops, from Negro boy and every trellises wreathed with Negro girl born in this flowers to lavishly deco- country,” he said at one rated drawing rooms. point, “undergoes the One vitrine near the agony of trying to gallery’s entrance pres- find...some image of ents an example of the himself or herself which kind of camera common is not demeaning.” to midcentury portrai- Baldwin would surely ture: the PDQ (Model have been pleased by G). A clunky, columnar the images in a new black box, it efficiently show at the Metropoli- chewed up long rolls of tan Museum of Art: the “direct-positive” “African American Por- paper central to a new, traits: Photographs inexpensive chemical From the 1940s and A collection of studio portraits from the process that circum- 1950s,” organized by 1940s-50s by unknown photographers vented the time-con- Met photography cura- suming development of tor Jeff L. Rosenheim. Far to cities in the North, and film negatives. For an extra from demeaning, the 150- photography—with its magi- fee, portraitists would hand- plus studio portraits on dis- cal, instantaneous ability to tint details in the otherwise play demonstrate how Afri- distill a transient moment achromatic results—a slash can-Americans made use of into a permanent keepsake— of red lipstick, sky-blue ear- the popular yet intimate art gained widespread appeal. rings—or even paint entire form to depict themselves Within this broad histori- images, as in one on display free from caricature or bias. cal context, more detailed in- that depicts a young The exhibition is the re- formation is hard to extract woman’s mint-green skirt sult of a collecting initiative from the visibly worn im- and canary-yellow blouse in that began in 2015, sending ages; many are presented full, vibrant color. photographs from California alongside charmingly vague A wall label explains that flea markets to the walls and labels such as “Five Friends wartime transitions endowed slender glass cases of the and/or Family Members.” portraits with a social pur- Met’s Howard Gilman Gal- Small details now become pose: They were designed as lery. Here, the unassuming, clues to subjects’ personali- mementos for loved ones postcard-sized portraits ties: a casual slouch or confi- parting ways, to be carried form a collective time cap- dent tilt of the head, a hand under gunfire on Italian sule, a glimpse into an era on the hip, a smile. Clothing beaches or tucked into an ur- when the twin threads of choices, too, seem signifi- ban worker’s wallet. But the war and economic prosperity cant: From flashy double- experience of sitting for a were reknitting American so- breasted suits to chic hand- portrait was also an intensely ciety into unrecognizable bags and elegant winter furs, personal one. Inherently ob- patterns. As battleships fer- sitting for a portrait often jective, the camera afforded ried soldiers abroad, factory called for one’s Sunday best. its subjects a simple, individ- wagesdrewworkersfrom In other shots, identities ual dignity by allowing them

farms in the Jim Crow South and relationships are more to present and express them- TWENTIETH-CENTURY PHOTOGRAPHY FUND (4) selves on their own terms. This connection between self-representation and self- empowerment is the central (and compelling) argument that the photographs are meant to support. The exhi-

These images reshaped a shared identity in a time of cultural turmoil

bition was inspired in part by Frederick Douglass’s 1861 lecture “Pictures and Prog- ress.” As the wall text ex- plains, Douglass—believed to have been the most pho- tographed American in the 19th century (one ornately framed daguerreotype is shown here)—urged his lis- teners to “make ourselves objective to ourselves,” be- cause without honest self- representation there could be no freedom. Primed by Douglass’s words, we can see how these images push against the airless weight of stereotype, confronting viewers with the individual- ity of their black subjects and reshaping a shared identity in a time of cul- tural turmoil. The photographs make for enjoyable viewing; their nostalgic, timeworn quality evokes the pleasurable sur- prise of stumbling upon a family photo album aban- doned in an attic. (In fact, the Met hopes that visitors All Aboard will help the museum iden- tify portrait subjects if they Prisoner of War Ship recognize a relative’s face on its walls.) Those expect- Exceptional artistry. Intricate detail. Historic importance. ing to see examples of re- A unique and extremely rare artifact, this monumental fined technique or aesthetic model of a ship was crafted by a French prisoner of war perfection will come away during the Napoleonic Wars. Meticulously handcrafted disappointed, but that’s not from mutton bone, the complex model is among the the point: The emotional punch of these portraits largest and most complete examples ever found. comes from their context as Circa 1798. 25”h x 41”w x 15”d. #30-6083 much as their content. In the current era of social me- dia and its desensitizing barrage of images, they’re stirring reminders of pho- tography’s power. —Ms. Spensley is a Robert L. Bartley Fellow at the Journal. 630 Royal Street, New Orleans, Louisiana • 877-677-2801 • [email protected] • rauantiques.com

African American Portraits: Since 1912, M.S. Rau Antiques has specialized in the world’s finest art, antiques and jewelry. Photographs From the Backed by our unprecedented 125% Guarantee, we stand behind each and every piece. 1940s and 1950s The Met Fifth Avenue Through Oct. 8 A14 | Monday, July 23, 2018 THE WALL STREET JOURNAL. SPORTS

GOLF Molinari Takes the British Open

The Italian emerged from a star-studded leaderboard including Tiger Woods, Jordan Spieth and Rory McIlroy

BY BRIAN COSTA

Carnoustie, Scotland By the time Tiger Woods ar- rived at each hole Sunday, many of the fans pressed against the ropes had been waiting in their spots for well over an hour. They were there to secure a glimpse of the man who would win the British Open, a man whose triumph they scarcely could have imagined mere months ago. And they did. It was Woods’s playing partner. Francesco Molinari, a 35-year- old Italian who might as well have been called Not Tiger Woods dur- ing his round, emerged from a star-studded leaderboard to win the Claret Jug at Carnoustie. He shot a 69 to finish at 8 under par, capping a wild afternoon in which Woods, Jordan Spieth, Rory McIl- roy and a handful of others each grabbed at least a share of the lead. Woods was alone in first place by one stroke after nine holes, eyeing his first major champion- ship in more than 10 years. But he stumbled on the back nine and fin- ished three shots back. McIlroy couldn’t overcome a pair of early bogeys. Spieth was doomed by a pair of late bogeys. But on a course best remembered for an infamous collapse—by Jean van de Velde at the 1999 Open— nobody handed Molinari the title. He took it, among other ways, with

a wedge shot that he hit to around HARRY HOW/GETTY IMAGES (2) 5 feet from the pin on the 18th Francesco Molinari, above, celebrates after a birdie on 18. Below, Tiger Woods finished tied for sixth, his best finish at a major in five years. hole, setting up an easy birdie to end his round. kind of a sandwich is it?” one fan of the green. “Fore!” some fans Molinari, who only earlier this said to another. (The composition yelled to warn the others. The ball month won his first PGA Tour of the sandwich remains uncon- struck one fan in the shoulder, event, is golf’s first major cham- firmed.) then ricocheted off the phone of pion from Italy. “I’m just in disbe- For Woods’s playing partners, it another before settling in some lief, to be honest,” he said. creates an odd competitive envi- thick grass just off the green. Playing in his first Open since ronment, one that is often elec- Woods autographed a glove and 2015, Woods finished tied for tric—but rarely in response to any handed it to the second fan, 34- sixth, his best finish at a major in of their shots. A nearby spectator year-old Colin Hauck from Annap- five years. He remains stuck on 14 coughed loudly during one of Moli- olis, Md., who said he was holding major titles for his career, but he nari’s backswings in a way that ap- his phone up to get a picture of has also never been so content peared intended to distract him. the shot. It was unlucky bounce. merely to compete for another. “Playing with Tiger was another Instead of hitting from what likely Woods has talked often during challenge because of the crowds would have been a reasonably his comeback from four back sur- and everything,” Molinari said. playable lie, Woods failed to get geries about his desire to have his “Clearly, in my group, the atten- on the green with his next shot children see him at something re- tion wasn’t really on me, let’s put and three-putted for a double bo- sembling his best. His 11-year-old it that way. If someone was ex- gey. He went on to bogey the 12th daughter, Sam, and 9-year-old son, pecting a charge, probably they hole and never led again. Charlie, have only seen it on old weren’t expecting it from me.” In his heyday, Woods might video highlights. Woods said both On a windy day, much of the have simmered over such a missed children hugged him tightly near challenge was just keeping bogeys opportunity, but this time he re- the 18th green afterward. to a minimum. Three shots off the peatedly used the word perspec- “I told them I tried, and I said, 14th hole to send the crowd into a of other players as mere support- lead to start the round, Molinari tive. He cited a conversation he ‘Hopefully you’re proud of your frenzy. At one point late in the ing characters. An overhead cam- didn’t make a single bogey. He was had with Serena Williams about pops for trying as hard as I did,’” day, six players were tied for the era on a cable slid directly over an island of stability amid chaos losing in the Wimbledon final Woods said. “For them to under- lead, a group that included some Webb Simpson as he warmed up around him, making par after par months after enduring a difficult stand what I was doing early in lesser-known players such as Xan- togetabetterviewofWoods. as other contenders surged and childbirth. my career—the only thing they’ve der Schauffele and Kevin Chappell. “That’s so loud,” Simpson said as dropped. His birdie on No. 18 was “Just keep it in perspective, and seen is my struggles and the pain I But the possibility of Woods win- the camera hummed over his head. his second of the day. the same thing with me,” Woods was going through.” ning loomed over the day unlike There were more eyeballs on For Woods, the round was more said. “I know that it’s going to Woods was hardly alone in com- anything else. Woods as he ate a quick pre-round dramatic. From the rough right of sting for a little bit here. But given ing up just short. McIlroy drained The scene with Woods on the sandwich than on the other con- the 11th fairway, he yanked his ap- where I was to where I’m at now, a long, lead-tying eagle putt on the driving range reinforced the image tenders hitting balls nearby. “What proach shot toward the gallery left I’m blessed.” Weather TheWSJDailyCrossword| Edited by Mike Shenk Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day. 60s 70s Edmontondt 60s <0 1234 56789 10111213 3 Small, medium 31 Like parents or large of straight-A VancouverVanc 0s 14 15 16 80s 70s students CalgaryC garyy 70s 10s 4 Sand traps and Winnipeg 17 18 19 Seattlettl streams, on golf 32 “Get a move 20s courses on!” PorPPortlandd Montreal 30s 20 21 22 Helenal 60s Ottawa 5 AWOL chasers 33 Goal of some 90s Billings AugustaA g t 40s 23 24 25 26 Eugene Bismarckk 80s 6 The whole talks 80s 100s 90s Mpls./St.pls./St.p s/ Pau PPaul TorontoT AAlbanybanyb ny Boston 50s Boise Pierre 27 28 29 30 31 32 33 34 shebang 34 Turkey 70s Buffaloff Hartfordrtford 60s 80s 70s Milwaukeek Detroitt 7 Waikiki welcome neighbor Siouxoux FFallsll ClevelandCleve d 70s New YorkY k 70s 35 36 37 Reno 70s Deses Moinesi ChicagoChicCh g gifts 39 Zellweger of 100s CCheyenneh y PhPhiladelphiahil d lp hi Sacramento PiPittsburghbh 80s 38 39 40 41 “Chicago” Saltalt Lake City Omahah Springfieldpg Indianapolisdi p 8 Diplomat’s forte Sann Francisco Denver Washingtonshingtonh D.C.D C 90s 40 Those guys 80s Topeka 42 43 44 45 9 Drill sergeant’s 80s 80s CharlestonCh Richmondh d 70s LLas ColoradColoradod Kansas LouLLouisville 100+ 43 Triangular 100s Springsp g St.. 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Previous Puzzle’s Solution Burlington 87 74 t 87 73 t San Francisco 73 58 pc 73 58 pc Manila 85 79 t 86 78 t of verse Charlotte 86 69 t 85 69 t SantaFe 9161pc8862t Melbourne 55 48 sh 59 47 sh 15 Kilt crease 63 River through COLON ABAB SK IM Chicago 82 67 s 86 68 s Seattle 89 61 s 89 62 s Mexico City 80 54 pc 80 54 pc 16 Run ___ (get 38 Web-crawling Florence OHARE COLA TARO Cleveland 82 68 t 83 69 t Sioux Falls 82 58 c 81 62 pc Milan 89 69 s 90 70 pc software BIDET CHAR URIS out of control) 64 “Just to clarify...” SOY TORO EMBOSS Dallas 103 79 pc 99 78 pc Wash., D.C. 83 74 t 82 74 t Moscow 72 60 c 74 66 c 39 Lasagna cheese STOPA FSU OHO Denver 78 59 t 91 63 pc Mumbai 85 78 sh 85 80 sh 17 Golfer’s favorite 65 Gushing review SPURNS DIALS Detroit 80 66 pc 86 68 pc International Paris 87 65 pc 90 68 pc lunch? 41 Road crew’s gunk 66 Late July babies OASIS HARLEQUIN Honolulu 88 78 sh 89 76 pc Rio de Janeiro 81 68 pc 81 69 s SWA P HAME L U R DU Today Tomorrow ANNOTATED HAB I T Houston 100 80 pc 98 79 pc Riyadh 109 84 s 108 82 s 19 Quail flock 42 Dodge artfully 67 Knife brand in City Hi Lo W Hi Lo W DR I ES FARADS Indianapolis 77 65 c 85 66 pc Rome 84 70 t 89 69 s 20 In need of a full 44 “Keep quiet!” infomercials FAB OLD SEVEN Kansas City 85 68 pc 89 64 s Amsterdam 80 62 pc 84 65 pc San Juan 88 77 pc 87 77 s AGENDA I TBE I PA Las Vegas 108 89 s 111 90 s Athens 97 77 pc 89 73 t Seoul 93 79 pc 95 80 pc recharge 45 Metric prefix 68 River crossed by DOSE COPY FATES for “tenth” Charon EROS AWOL UTER I Little Rock 90 67 pc 91 69 s Baghdad 110 83 s 112 86 s Shanghai 91 83 pc 92 83 t 21 Endurance SASS BEDE NESTS Los Angeles 92 71 s 96 71 pc Bangkok 91 79 sh 92 80 t Singapore 88 78 pc 89 80 t 46 Golfer’s favorite Down Miami 91 80 t 92 79 t Beijing 90 77 pc 82 77 t Sydney 67 52 s 73 49 s 23 Civil rights hero The contest answer is ZORRO. Seven letters in the Milwaukee 79 66 s 84 68 s Berlin 83 63 pc 85 66 pc Taipei City 90 79 t 96 79 t Parks drink garnish? 1 Ballpark souvenir grid can be changed to Z’s to form new words in both directions (BIZET/LAZY SUSAN, CZAR/ Minneapolis 83 62 pc 84 65 pc Brussels 82 64 pc 86 66 pc Tokyo 9682pc9381pc 26 Tennis match 48 Region 2 Like hardcore Nashville 82 65 t 86 69 pc Buenos Aires 51 31 s 53 40 pc Toronto 8272pc8269t BOZO, UZIS/KAZOO, HAZEL/DAZES, DOZE/ New Orleans 93 79 t 93 78 s Dubai 105 91 s 103 91 s Vancouver 78 58 s 78 61 s divisions 49 Popular cookie fans BEZOS, COZY/IZOD and FAZES/URBANIZES).

New York City 80 74 t 84 74 t Dublin 74 54 sh 68 50 c Warsaw 83 62 t 83 64 pc s Connect those Z’s in the shape of a Z and you’ve Oklahoma City 91 70 pc 91 68 s Edinburgh 72 54 sh 71 49 sh Zurich 79 58 t 85 62 pc Solve this puzzle online and discuss it at WSJ.com/Puzzles. made the mark of ZORRO. THE WALL STREET JOURNAL. Monday, July 23, 2018 | A15 OPINION

The Other Russian Meddling BOOKSHELF | By Arthur Herman Americans are came to power, Cuba, with tors: Havana and Moscow. ert Vickers examined Nicara- A Bold Plan rightly upset strong backing from the Krem- Cuba has been instrumental in gua’s Cold War history and its over President lin, still underwrites tyranny in suffocating dissent in Venezu- current relationship with Rus- Trump’s obse- Central and South America. ela by infiltrating the military, sia. Mr. Vickers reminded read- quiousness to- Venezuela is Exhibit A. And academic institutions and me- ers of an airfield 60 kilometers To Make Waves ward Vladimir now there is blood-soaked Ni- dia. Now Castro’s regime, to- north of Managua called Punta AMERICAS Putin in Hel- caragua, where Cuban Foreign gether with Caracas, is aiding Huete. “It was constructed in sinki. The for- Minister Bruno Rodríguez ar- Mr. Ortega. Students arrested the early 1980s—soon after the By Mary Oceans Ventured mer KGB agent rived on Thursday to celebrate and tortured in Nicaragua have leftist Sandinista regime took Anastasia heads a gang- the 39th anniversary of the reported hearing Venezuelan power—with Soviet funds and By John Lehman O’Grady ster govern- Sandinista rebel victory over Cuban technical assistance,” (Norton, 330 pages, $27.95) ment, and Mr. dictator Anastasio Somoza. Mr. Vickers wrote. Its exceed- Trump should have stood up to Daniel Ortega, legendary Democrats howl ingly long runway was de- wo major shifts in military strategy allowed the him. leader of the Marxist Sandinis- about Putin’s signed to accommodate heavy T United States to win the Cold War with the Soviet On the other hand, Demo- tas—longtime heroes of Demo- bombers. Union. One was the Strategic Defense Initiative crats’ moralizing Helsinki hys- cratic politicians such as for- offenses, but not The airfield wasn’t finished launched by President Ronald Reagan in 1983. It convinced teria is phony. They’re upset mer Secretary of State John during the Cold War, and the Soviet leader Mikhail Gorbachev that the U.S.S.R. couldn’t with Mr. Putin’s meddling in Kerry, Vermont Sen. Bernie in Latin America. project sat idle after the Soviet compete in a high-tech weapons race without major the 2016 presidential election Sanders and New York Mayor collapse and during the eclipse economic and political changes—changes that ultimately because Hillary Clinton lost. Bill de Blasio, to name a few— of Mr. Ortega in the 1990s. But backfired and led to the Soviet Union’s collapse. When it comes to Russian ex- is at war with his own people. and Cuban accents in clandes- when he returned to power in The other shift, less heralded, was Sea Plan 2000, a bold pansionism in the Western Since April, when university tine jails. 2007, the Moscow-Managua new idea for reviving American sea power in the face of a Hemisphere and the Kremlin’s students began peacefully pro- Outside help for intelli- axis was restored. Punta Huete Soviet bid for naval supremacy. Reagan would be the abysmal human-rights record, testing Mr. Ortega’s decade- gence-gathering, paramilitary was completed in 2010 with, president to put the plan in motion, and his secretary of the American left mostly looks plus consolidation of power, training and weaponry also according to Mr. Vickers, “Rus- the Navy, John Lehman, would be the man to implement it. the other way. national police and pro-gov- comes from beyond Latin sian financial assistance.” Rus- As Mr. Lehman tells us in “Oceans Ventured,” the strategy Democratic ballyhooing ernment militias have cut America. Clearly, some of it sia recently donated two An- was first conceived in Newport, R.I., roughly three years over Mr. Putin’s habit of jailing down some 350 Nicaraguans. comes directly or indirectly tonov military transport before Reagan’s election—at a June 1977 dinner with Mr. and sometimes killing his po- Many have been murdered by from Moscow. Around 2005, planes to Nicaragua. It sold Mr. Lehman, Graham Claytor (the Navy secretary), James litical and media opponents is sniper fire. Others have been Mr. Putin began rekindling Ortega 50 T-72 tanks in 2016. Woolsey (counsel to the especially rich. Russia’s long- shot at close range. Russia’s warm economic and To what end? One wonders. Senate Armed Services standing ally Cuba has an even This state terrorism is cop- military relations with Cuba. Geopolitical and defense an- Committee) and the military- worse civil-liberties record. ied from Venezuela’s military He also has re-engaged with alyst W. Alejandro Sánchez affairs author Bing West. Mr. Yet when President Obama un- dictatorship, which has flat- Nicaragua. discussed the Nicaragua-Rus- West served as amanuensis, conditionally reshaped U.S. tened its student-led opposi- As I noted in a July 8 col- sia relationship in the Sept. 25, recording the gist of the plan policy to please Cuban dictator tion. In both cases a youth umn, the Interior Ministry of 2017, issue of National Inter- on a napkin. Over time, it grew Raúl Castro, his party cheered. movement believed that its Russia recently completed a est, observing that today “Rus- into a full-blown proposal and Mr. Obama even trotted off to commitment to truth and free- multistory “Police Training” sia’s most stable and closest led, not long after, to the a baseball game in Havana dom gave it the undisputed center in Managua. Mr. Ortega friend in the region is arguably rebirth of the U.S. Navy’s global with the Cuban mob boss. moral high ground. In both says it is for counternarcotics Nicaragua.” dominance, often summed up as Democrats cheered some cases the dictatorship un- work. That’s laughable given Mr. Trump should call Mr. “the 600-ship Navy.” more. leashed paramilitary forces to Russia’s closeness with narco- Putin on all this. Meanwhile, if In fact, as Navy secretary Mr. Advocates of the Obama crush them. In both cases stu- states such as Venezuela. A Democrats want their outrage Lehman never quite made it to Cuba policy argue that Havana dents met with jackboots, more likely purpose is repress- over Russian meddling to be 600 ships—594 was as far as he poses no threat to U.S. inter- nighttime raids on their ing dissidents so Mr. Ortega credible, a little concern about got. The ships that the Navy did ests. But if regional security, homes, torture and prison. can retain power. the mounting body count in build, however, included a new generation stability and economic growth Both authoritarian regimes In a June 2016 essay for a Nicaragua is a good place to of warships like Aegis cruisers and destroyers matter, that is demonstrably are born of the same ideology, Central Intelligence Agency start. with advanced antimissile systems, and Ohio-class nuclear false. Sixty years after Castro and have the same progeni- peer-reviewed quarterly, Rob- Write to O’[email protected]. submarines of the sort that the novelist Tom Clancy would make famous in “The Hunt for Red October” (1984). There was as well an increase in the number of Nimitz-class aircraft carriers. Breaking Up Big Tech Is Hard to Do Even more important than the ships was a change in how the Navy planned to use them. Mr. Lehman’s “Com- By William Rinehart These multipurpose teams would set the industry back Economics professors from mand of the Seas” (1988) detailed the arduous process of drive their firms’ productiv- two decades. Stanford and MIT have expanding the Navy despite congressional opposition and a would like Google to ity; breaking them apart Tech platforms struggled shown that getting produc- cumbersome Pentagon acquisition system. “Oceans ‘I be broken up into eight would risk killing the golden to raise revenue until they tive ideas to the market has Ventured” describes the men and events that enabled the or 10 different monop- goose. By encouraging coor- developed large, national ad- become more expensive. So Navy to snatch the strategic initiative from a Soviet navy olies,” declared tech investor dination among their internal vertising networks. “We re- rather than limiting innova- determined to challenge the U.S. around the globe. Roger McNamee earlier this departments, the tech titans ally couldn’t figure out the tion as their critics allege, The Carter administration’s response to the Soviet year. Machine-learning pio- have developed complex and business model,” remembers large tech companies have challenge was to go into a defensive crouch and deploy the neer Yoshua Bengio called Big constantly shifting organiza- early Google investor Michael picked up the slack, using Navy’s dwindling assets, after years of budget cuts, to Tech’s size and power “dan- tional webs. This structure Moritz in a 2005 book on the their size and profitability to protect the Mediterranean and Atlantic approaches. Sea Plan gerous for democracy.” Jona- would frustrate any Standard company’s beginnings. Google underwrite projects that 2000, from its conception, proposed instead an aggressive than Taplin, former director Oil-style trustbusting effort turned its first profit only af- might fail on their own. Anti- strategy. It was based, as Mr. Lehman relates, on recent of USC’s Annenberg Innova- because there are so few nat- ter it cultivated a dominant trust action would require naval war games in which “the Red Team [Soviets] had no tion Lab, has called for gov- ural breaks within the com- advertising position. Tearing government bureaucrats to credible counter to a Blue offensive”—even in places where ernment antitrust action. panies. Splitting up these apart its advertising base decide if these services the Blue Team was outnumbered or outclassed. These are not dissident firms would require govern- would destroy its value. should continue to exist, and voices, but members of a ment officials to go cubicle then stay abreast of nearly growing chorus. by cubicle—a difficult and every decision the new com- A new strategy revived American sea power They are united in the be- draconian move. Innovation depends panies make. in the face of a Soviet bid for supremacy—and lief that the large market Trustbusting would also The breakup of AT&T in shares of a few tech require breaking up the com- on large companies’ 1982 provides an ominous ex- offers lessons for confronting global rivals today. companies stifle competi- panies’ technologies. Face- teams and shared ample. The split yielded a tion, harming consumers and book has developed its own two-part system: AT&T was the country. What they fail suite of software to address technologies. limited strictly to long-dis- When Reagan’s election gave Sea Plan 2000 a chance to to articulate is how the unique problems dealing with tance service, while seven re- become reality, Mr. Lehman found that he had valuable breakups would actually vast troves of data: BigPipe gional “Baby Bells” covered helpers inside the Navy. One was Adm. Thomas Hayward, work, and how antitrust ac- to load pages faster, Haystack Breaking up these compa- local calls. The regional com- chief of Naval Operations from 1978 to 1982 and the former tion would affect the compa- to store photos efficiently, nies would also stymie inno- panies later expanded into commander of the Seventh Fleet in the Pacific. Adm. Hay- nies and the broader tech and Unicorn to search its so- vation. The new firms formed the nascent cellular market, ward had decided early on that the Navy’s biggest problem marketplace. cial data, among others. from the titans’ components but because they couldn’t op- was a lack of strategic thought. In his mind, numerical infe- Here’s the problem: Break- Google’s back end is also would be barred from stray- erate freely between markets, riority had made it all the more imperative not to cede the ing up tech companies means tightly integrated. The ing into each other’s services, cell service remained a initiative to the Soviets or to focus on the Atlantic at the that the government would Google File System stores but many would likely be un- largely local affair for years. expense of the Pacific and Indian oceans. Through a have to split up their teams massive data sets; Spanner profitable on their own. Only after many restrictions changed U.S. approach, he theorized, the Soviets could be and their underlying technol- distributes stored data across YouTube, for example, is were waived with the 1996 made to grasp that, in the event of war, their most valuable ogy. It would also require a multiple servers; and Dremel widely believed to be unprof- Telecommunications Act did naval asset, their burgeoning fleet of ballistic-missile sub- legal and regulatory system to enables effective queries. itable, but it is currently sup- cell service take off. marines, would be vulnerable to attack. Only then would keep each targeted company Where do you cut these ported by Google’s other op- Breaking up Big Tech they rethink their entire naval strategy. separate from the others’ shared technologies when erations. In addition to the would not create more com- Adm. Hayward and his team got a chance to advance markets. These restrictions splitting up the companies? streaming-video service, petition or better options for their theory with Ocean Venture, a massive naval exercise in would pose challenges for any Who gets what? Google sustains many other consumers. Instead, it would 1981 involving more than 250 ships and 1,000 aircraft from company. But for highly inte- Ev Ehrlich, a former un- unprofitable services, such as destroy value for the compa- 14 countries. The goal was to demonstrate to Soviet grated tech firms, they’d be a dersecretary of commerce for a broadband network, self- nies and their customers. watchers that the U.S. and its allies could secure their own death sentence. economic affairs, has pro- driving cars, and artificial-in- sea lines of communication amid the Soviet submarine Google and Facebook rely posed breaking up big tech telligence research. Facebook Mr. Rinehart is director of threat and also bring the war home to the Soviet Union. on flexible teams that cross companies by spinning off also uses its profits to fund technology and innovation Ocean Venture’s commanding officer, Adm. James “Ace” the normal divisional bound- their ad networks into a new more-advanced technologies, policy at the American Action Lyons, was, Mr. Lehman says, as focused on achieving the aries to solve problems. company. But this move such as virtual reality. Forum. operation’s “effect on the global balance of power between the West and the Soviet bloc” as he was on “testing his men and their equipment.” Around the same time, Mr. Lehman notes, the U.S. fleet World Socialism’s Anti-Israel Turn participated “in a sophisticated program of coordinated, calculated, forward aggressive exercises—all around the By Elliot Kaufman War—which, as scholar issuing a joint statement criti- ist Party, India’s National Con- world.” The Soviets would thereby see that, with any Joshua Muravchik observes, cizing Israel. Mr. Kreisky often gress, Mexico’s PRI, and Is- aggressive move they made, “the might of the U.S. Navy an this marriage be struck a blow against pan-Ar- castigated his fellow Jews rael’s far-left Meretz party. would be off their coasts in a heartbeat.” C saved? Israel’s Labor abism and “cleared the field” with anti-Semitic terms and (Britain’s Labour Party has In his effort to rebuild the Navy, Mr. Lehman had two Party suspended its for particular Arab national- Nazi analogies, while praising observer status.) inadvertent allies. One was the actor Tom Cruise, whose membership this month in So- isms, including the Palestinian Arafat, Moammar Gadhafi and Another member is the Pal- 1986 movie “Top Gun” gave naval aviation a new glamour. cialist International, a global form. For the left, that re- Hafez Assad. In his memoir, estinian Fatah party, which The other was Tom Clancy, whose novel about a “lost” organization of leftist political framed Zionism from a story he admitted a “critical atti- brought a large delegation to Soviet submarine raised the public’s awareness of the Cold parties. One might ask what of Jews fighting for a home tude towards the existence of last month’s meeting. The In- War at sea. By the end of the decade it was the Soviet took so long. Socialist Interna- into another Western effort to the state of Israel.” ternational’s “Ethical Charter” navy—confronted by a new strategy, new ships and new tional has been anti-Israel for oppress a Third World people. Now, in addition to urging pledges “to refrain from all advanced weaponry—that found itself in a defensive decades, but last month it ac- a boycott, the International forms of political alliance or crouch. The collapse of the U.S.S.R. in 1991 merely finished cused Israel of “apartheid” and condemns Israel’s Law of Re- co-operation, at any level, the job that Mr. Lehman and his colleagues had started, endorsed the Boycott, Divest- Shimon Peres could turn for diaspora Jews as with any political party incit- making the U.S. the world’s naval superpower once again. ment, and Sanctions move- once be the honorary “racist” and demands “the im- ing or trying to inflame preju- If the Soviet Union was challenging American naval ment, known as BDS, that tar- mediate release of all the Pal- dices, ethnic or racial hatred.” dominance back then, Mr. Lehman observes, China is doing gets the Jewish state. president. No more. estinian prisoners,” which Fatah’s leader Mahmoud Ab- so today. Could we build a 600-ship Navy now? With far International socialism was would include terrorists. bas has said, “We welcome ev- fewer active shipyards than in 1980, and a Pentagon not always hostile to Zionism. Why should anyone care? ery drop of blood spilled in acquisition process even more convoluted than before, The labor group Poalei Zion In the 1970s Austrian Chan- Because this is no fringe Jerusalem,” and he attributed getting to the 355 ships that President Donald Trump has joined the Labour and Social- cellor Bruno Kreisky, then the group. Some 35 of the Inter- the Holocaust to Jewish “so- made a priority would seem a miracle. “Oceans Ventured,” ist International in 1923. Sta- International’s vice president, national’s member parties are cial behavior.” in its engrossing and illuminating narrative, reminds us lin’s Soviet Union was the first worked openly to cement an in government, including Not much has changed at that numbers are less important than strategy. Let’s hope a country to recognize Israel anti-Israel leftist consensus. Spain’s Socialist Workers’ the Socialist International new generation of thinkers will soon gather to determine formally. And as recently as In the wake of the oil crisis, Party, Portugal’s Socialist since the days of Bruno Krei- how best to respond to China’s rising challenge. Who 2003, Israeli statesman Shi- he chaired the International’s Party, South Africa’s African sky: There is one standard for knows? Maybe they’ve gathered already, and their plan is mon Peres could still serve as fact-finding mission that National Congress and Nicara- Jews, and one very different recorded on someone’s napkin. the Socialist International’s blamed Israel for the lack of gua’s Sandinistas. The group, standard for their enemies. honorary president. Middle East peace, and in led by former Greek Prime Mr. Herman is a senior fellow at the Hudson Institute But the left turned against 1979 he was the first Western Minister George Papandreou, Mr. Kaufman is a Robert L. and the author, most recently, of “1917: Lenin, Wilson, and Israel after the 1967 Six Day leader to host Yasser Arafat, also includes France’s Social- Bartley Fellow at the Journal. the Birth of the New World Disorder.” A16 | Monday, July 23, 2018 THE WALL STREET JOURNAL. OPINION

REVIEW & OUTLOOK LETTERS TO THE EDITOR Trump and Money Time to Index Taxes for Inflation, but Fairly

onald Trump has begun to challenge tainty to investment decisions and lead to As one who has repeatedly paid ity to cut taxes by indexing capital the Federal Reserve for raising inter- slower growth. If countries turn to currency de- taxes on illusory nominal capital gains gains for inflation. A qualification and D created by inflation, I applaud Kim- an addition would be useful. est rates, while also bashing China and valuation as another protectionist tool, they will berley Strassel’s take on indexing Capital-gains rates have been kept Europe for their falling cur- further distort trade and in- taxes for inflation (“Trump Alone Can lower than gains on “earned income” rencies. This could become Monetary reform would vestment flows. That’s what Cut Taxes,” Potomac Watch, July 13), in part because of the complexity of stage two of Mr. Trump’s dan- help to avoid ‘beggar happened in the 1930s as although I wish she had expanded her computing capital gains for each asset gerous trade war, or he could countries indulged what be- views to the logical conclusion of in- sold. This implies that the rate on use it as an opportunity to thy neighbor’ currency came known as “beggar thy dexing all taxable events. The 25-year- gains above inflation should be signif- lead the world toward a more neighbor” currency devalua- old unchanged thresholds for taxing icantly higher than the current rate stable monetary order. The devaluations. tions for short-term competi- Social Security benefits immediately on capital gains. Of course, you have a latter is a long shot, but given tive advantage. comes to mind. choice on when to take a capital gain the ominous trend of events “As with exchange depreci- Notwithstanding the fact that Fed and can defer the tax until you do. we might as well suggest it. ation to raise domestic prices, the gain for one officials seek a minimum 2% (core) in- Indexing should apply to bond and The only surprise is that Mr. Trump waited country was a loss for all,” wrote economic his- flation because they think that rate is other types of interest as well, so as consistent with a healthy economy, it not to tax the return attributable to as long as he did to criticize the Fed. As a real-es- torian Charles Kindleberger in his history of seems odd that those same officials inflation. Here, too, the president tate man, the President likes low rates. We also the Great Depression. “With tariff retaliation are hesitant to set an upper limit of would determine the cost basis for know from our reporting at the time that he and competitive depreciation, mutual losses inflation which they think would indi- taxation. chose Jerome Powell to run the Fed largely be- were certain.” cate an unhealthy economy. If someone earns interest at 4% cause Treasury Secretary Steven Mnuchin said iii There is perhaps no more persua- when inflation is 3% and they are in a Mr. Powell was more malleable than Kevin Which brings us to Mr. Trump’s monetary op- sive economic axiom than that which 30% tax bracket, their after-tax rate of Warsh or John Taylor. portunity, if he and his advisers have the wit to holds that the nominal return on capi- return is 2.8%, less than the rate of in- Now Mr. Trump wants to cash that check, seize it. The global monetary system has oper- tal must exceed taxes and inflation if flation. If inflation is subtracted from but he doesn’t understand that his public in- ated with fiat currencies since the collapse of new capital is to be created, otherwise taxable interest, the after-tax return tervention probably will have the opposite ef- Bretton Woods in 1971 when Richard Nixon closed the sole beneficiaries of inflation are on the 1% gain above inflation would the entities which can tax the nominal be 0.67% rather than negative. fect. The Powell Fed is undertaking the diffi- the U.S. gold window. The world’s major central gains: government at all levels. If the president has the power to cult task of trying to negotiate a return to banks have gone their own way, often leading to MIKE SMITH index capital gains, why not do even normalcy after a decade of unprecedented sharp and destructive currency movements that Sugar Land, Texas moretomovetowardarationaltax monetary manipulations. in the worst case have contributed to market system? Despite their celebration in the press, previ- crashes (1987) or recessions (2008). Ms. Strassel makes an important IRV LEVESON ous Fed chairs Ben Bernanke and Janet Yellen With the world trading regime under stress, point that the president has the abil- Jackson, N.J. left Mr. Powell a distended balance sheet of $4.5 Mr. Trump could ask his Treasury to lead the de- trillion in securities plus a legacy of distorted as- veloped world’s finance ministers and central set prices and a government-directed bond mar- bankers toward a more stable system. Mr. Francis Gary Powers Was a Hero, Not a Rat ket. No one knows how this transition will turn Mnuchin doesn’t have much experience in this out because no one has ever done it. area, but his Under Secretary for International Edward Kosner wrote a good re- tell the Soviets everything they view of Monte Reel’s “Brotherhood of wanted to know because they could Mr. Trump’s criticism means that Mr. Powell Affairs David Malpass does. (For the record, Mr. Spies” (Books, July 14) except it is in- get the information from his aircraft will have the added burden of operating under Malpass has not suggested this to us.) accurate in regard to my father Fran- anyway. Nevertheless, Powers tried to suspicion of political influence. He may have to They could put together a task force of Ameri- cis Gary Powers’s conduct while in conceal as much classified information maintain a steady pace of interest rates to show can and foreign experts to debate and recom- captivity. Mr. Kosner writes, “Ulti- as possible while giving the appear- markets that he and the Fed are independent. mend how to navigate the transition from post- mately, the frost thawed. In 1962, ance of cooperating with his captors.” But if he decides slower increases are warranted, crisis policy and promote more currency stability. Powers was swapped for Soviet spy During interrogations, my father markets will wonder if his calculations are politi- Experts who have written for us over the years Rudolf Abel (who, unlike Powers, would tell the full truth when he knew cal. By lobbying for fewer rate increases, Mr. include Messrs. Warsh and Taylor, economists never blabbed to his captors).” the KGB could find out the information. Trump may get more and higher. Steve Hanke, Glenn Hubbard and Judy Shelton, In regard to capture, the CIA’s in- He lied to the KGB when he knew that On the merits, it isn’t clear that the Fed has former Fed Chair Paul Volcker, investor and phi- structions were: “If capture appears im- they couldn’t, and he told partial truth moved too fast. Some of our friends are fretting lanthropist Sean Fieler and historian and inves- minent, pilots should surrender without when he was walking a fine line in or- resistance and adopt a cooperative atti- der not to divulge any secrets. that the yield curve is getting close to invert- tor Lewis Lehrman, among others. tude toward their captors.” Regarding Unfortunately, despite the Senate ing—short-term yields exceeding long rates— Mr. Lehrman in particular has argued that the what to tell his captors, the CIA instruc- Select Committee’s exoneration of my but it’s hard to know what this means given the root cause of the large U.S. trade deficit is the tions were, “Pilots are perfectly free to father in March 1962 and that he was Fed’s continuing dominant role in the long-bond dollar’s role as the world’s reserve currency. tell the full truth about their mission awarded the highest honor the CIA market. That has been an “exorbitant privilege,” as with the exception of certain specifica- can give, and posthumously the Dis- Consumer prices in the past year have Frenchman Valéry Giscard d’Estaing once put it, tions about the aircraft.” tinguished Flying Cross and Silver climbed 2.3% through June without including but a new monetary arrangement could reduce According to the declassified his- Star, my father is the spy who is still food and energy, which is higher than the Fed’s the burden on the U.S. to be the world’s sole ab- tory of the U-2 Program: 1954-1974, out in the cold because of persistent target of 2%, while the economy is growing sorber of surplus goods. Powers’s “instructions from the CIA misinformation. FRANCIS GARY POWERS JR. faster than it has since 2004 and maybe 1999. The French have long been interested in mon- on what to do if captured was meager, Negative real interest rates amid rapid growth etary reform, and the Chinese might be as well and he was told that he might as well Midlothian, Va. have rarely ended well. Recall how Mr. Bernanke if Mr. Trump called a tariff truce in return for and Alan Greenspan kept rates too low for too their participation. long in the mid-2000s. iii There Are Reasons for Full Startup Disclosure iii Monetary reform may seem an impossible As for the strong dollar, the cause is less the task given Mr. Trump’s lack of knowledge and Rep. Jeb Hensarling writes “To Re- In earlier times, many states had Fed than Mr. Trump’s pro-growth policies. The desire for disruption. But then he’s also the store U.S. Competitiveness, Pass the separate securities laws requiring a re- U.S. economy is growing faster after corporate President who knows little about constitutional JOBS Act 3.0” (op-ed, July 16) on the view and permission for sale in the tax reform and deregulation. This has invited a law but has made two excellent nominations for need to remove what he contends are state. These laws were called blue sky flood of capital to the U.S., which has put pres- the Supreme Court and many more to the appel- overly restrictive and burdensome fed- laws. This phrase was coined to remind sure on foreign currencies. But Mr. Trump late courts. eral regulations for capital formation. investors they could be purchasing a In my many decades as a securi- patch of the blue sky. That is in stark should see this as a success. The 1980s and 1990s The world’s economy is growing faster ties-law practitioner, there have been contrast to the perspective of Republi- were fast-growing, strong-dollar eras of capital again, but protectionism and devaluations are no shortage of enthusiastic sponsors can legislators to repudiate investor flowstotheU.S. increasingly threats to sustained prosperity. and promoters seeking early stage fi- protections by passing what they call Mr. Trump’s trade policies are also becoming Mr. Trump has shown he can shake up global nancing for a variety of purportedly the JOBs Act, which are initials for a currency problem. Faced with the threat of U.S. institutions but so far he has failed to create transformative investments. Potential Jump Our Business Startups Act. It has tariffs on some $500 billion of its exports, China anything better. investors are invited to rise from nothing to do with jobs, except to facil- seems to be letting its currency depreciate to Historian Kindleberger sums up what hap- hardworking stiffs to those traveling itate the separation of those with jobs compensate. The yuan traded at 6.27 to the U.S. pened in the 1930s when competitive devalua- first class to their vacation homes. from their savings. dollar on April 18 but fell to 6.77 on Friday. That tions compounded trade disputes: “When every For every offering of exploratory and Tapping the naive, nonprofessional should help the competitiveness of Chinese ex- country turned to protect its national private in- early development companies, hun- investors for risk financing should ports in the short term, albeit at the risk of more terest, the world public interest went down the dreds if not thousands of fledgling start by advising them that they are companies lose 100% of investor investors of last resort and that capital flight. drain, and with it the private interests of all.” money. This is so whether the invest- skilled professional investors passed None of this helps the world or U.S. econo- Without a change of direction, this is where Mr. ments are registered for immediate on the deal. mies. Exchange-rate fluctuations add uncer- Trump is headed. public resale or are expected to be- SHELDON I. SAITLIN come publicly traded. Chicago Federal securities laws shouldn’t be Standing Rock Redux intended to flush the pipeline of deals with no earnings and meager hopes of International Treaty Bans xtreme environmentalists haven’t been would use union construction workers, and En- any. They historically are intended to Military Use of Outer Space able to stop consumers from using oil, bridge says it would support some 8,600 jobs. provide necessary information to in- E vestors to counter the pie-in-the-sky In his otherwise excellent sum- so they’re now trying to disrupt the sup- The pipeline is expected to generate $20 million projections of those pitching deals. mary of our nation’s potential mili- ply chain. That’s the strategy in property taxes in its first tary approaches to space (“Space behind green opposition to Green activists oppose year. Force! Space Force!,” op-ed, June pipelines, and the latest target a pipeline that would Trucks and trains are the How Did the 2% People Lay 25), Taylor Dinerman, although not- is Enbridge Energy’s Line 3 in alternatives to pipelines, but The Ground for 3% Growth? ing that international law provides Minnesota. reduce oil spills. they’re more dangerous and for peaceful uses of that realm, fails The proposed Line 3 would carbon-intensive. Between Andy Puzder reminds me that the to mention that international law replace a deteriorating pipe- 16.5 million and 23.1 million previous administration, its advisers (via Article IV of the 1967 outer line built in the 1960s that moves Alberta crude gallons of Bakken crude pass through Minnesota and acolytes who are now laying space treaty) additionally forbids oil through a sliver of North Dakota and across by rail each day. The state’s Department of claim to the current spurt in eco- the use of the moon and other ce- Minnesota to Wisconsin. Enbridge estimates Transportation has warned that this heavy train nomic growth because policies they lestial bodies for any military uses the old pipeline would require some 900 repairs traffic routinely delays emergency-response ve- instituted set the fundamentals for it whatsoever. are also the ones who promulgated ARTHUR H. WESTING, PH.D. by 2025 and 6,000 over the next 15 years, and hicles and “poses a threat of catastrophic fire the idea of a new normal of intracta- Shelburne, Vt. it’s operating at about half capacity due to in the event of a derailment and rupture of some ble “secular stagnation” wherein Mr. Westing is former director of safety concerns. of the tank cars.” A recent derailment 15 miles growth in GDP would be stuck at 2%, the U.N. Environment Programme on The new Line 3 would benefit from more south of the Minnesota border spilled 230,000 as it was under their tenure, no mat- Peace, Security, & the Environment. than 50 years of pipeline innovation. The old gallons of oil, contaminating two rivers. ter what policy levers were pulled pipeline was forged using flash welding, which Yet none of this matters to opponents for (“People Are Worrying the Labor introduces impurities into steel that can cause whom any oil production is a crime against the Market Is Too Good,” op-ed, July 17). Pepper ... cracks and corrosion. Earth. They’re gearing up for a repeat of the Well, one can argue persuasively that And Salt Today’s double-submerged arc welding 2016 Standing Rock protests against the Dakota their theory was just wrong (as is of- keeps pipeline steel clean and strong. To pre- Access Pipeline, which also can be good busi- ten the case with macroeconomic THE WALL STREET JOURNAL vent rust, the new Line 3 would be coated in fu- ness for the greens. theory), but they are the ones who have to say that and why it is so, not sion-bonded epoxy. That’s a big improvement The Native American environmental group put out a political, revisionist history over the polyethelyne tape twisted around the Honor the Earth brought in more than $3 mil- without confronting their misreading old pipeline like hockey-stick wrap. The new lion last year after helping lead the opposition of macroeconomics or the political pipeline would also feature automated valves, to Dakota Access, and it had never previously reasons for their somewhat bizarre sophisticated leak-detection systems and 24/7 exceeded $1 million, according to public disclo- theory. Larry Summers? President monitoring. sures. Honor the Earth co-founder Winona Obama? Anyone else? Thanks to such technological advances, pipe- LaDuke is one of the most prominent activists JAMES GOTTSCHALK lines now deliver oil safely 99.999% of the time, opposing Line 3. Tequesta, Fla. according to a 2017 report by the Association Enbridge won an initial victory in late June of Oil Pipelines and the American Petroleum In- when North Dakota’s Public Utilities Commis- Letters intended for publication should stitute. Last year 72% of spills occurred in con- sion voted to approve Line 3. But expect a polit- be addressed to: The Editor, 1211 Avenue of the Americas, New York, NY 10036, tained units on the operators’ property. And ical brawl over the two dozen remaining per- or emailed to [email protected]. Please 70% of pipeline spills are less than a cubic mits the company needs before it can break include your city and state. All letters meter, says Canada’s Fraser Institute. ground in Minnesota. As ever, environmental- are subject to editing, and unpublished The $2.9 billion proposed pipeline also car- ists’ demands for energy perfection are the en- letters can be neither acknowledged nor “It helps me focus returned. ries major economic benefits. The project emy of the greater green good. on what’s important.” THE WALL STREET JOURNAL. Monday, July 23, 2018 | A17 OPINION The Fed’s Job Isn’ttoMake Trump Is Right on Nord Stream 2 By David B. Rivkin Jr. Gazprom’s cat’s-paw in Europe, is And Miomir Zuzul supporting local environmentalists Trump Happy opposed to construction of a new resident Trump was right LNG terminal on Croatia’s Krk Island. to criticize Chancellor An- Gasfin has even purchased land on By Peter Conti-Brown gela Merkel’s plan for a the island so that it can hobble the P new pipeline carrying Rus- project via legal challenges—while at he president probably wasn’t sian natural gas to Ger- the same time suggesting that Gaz- T pleased when the Fed raised many. This project threatens Euro- prom might support the Krk project interest rates. But when the pean independence and the North if it receives only Russian gas. During press asked Dwight Eisenhower to Atlantic Treaty Organization, and it Croatian President Kolinda Grabar- comment in 1956, he said: “The Fed- was opposed by the Obama adminis- Kitarovic’s visit to Russia last Octo- eral Reserve Board is set up as a tration and many Senate Democrats, ber, Mr. Putin publicly offered a part- separate agency of government. . . . although not much was done to stop nership to gasify Croatia. It would be a mistake to make it def- the pipeline’s construction. Numer- Mr. Trump’s leadership on this is- initely and directly responsible to ous European countries have also sue has had tangible results. Poland the political head of state.” been sharply critical of Mrs. has committed to buying LNG from In the 1990s, President Clinton’s Merkel’s energy plans. Mr. Trump the U.S. and has already completed a economic advisers, led by Bob Rubin, has correctly sought to diminish new LNG terminal. It will not renew

initiated a rule that the White House Moscow’s European energy foot- STEFAN SAUER/DPA/ASSOCIATED PRESS a contract with Gazprom set to expire would make no comment on Fed pol- print, belying claims he is a stooge Pipes for the pipeline in Sassnitz, Germany, May 8, 2017. in 2022, ending a 74-year exclusive icy, even anonymously. That rule of Vladimir Putin. partnership. U.S. LNG imports to Eu- held until last week, when President In 2015 the European Commission ing Mr. Schröder’s chancellorship in abling Moscow to cut off gas supplies rope rose 22% last year, and will Trump stated in an interview that he cited Russia’s politically motivated 2005. In 2017 the Russian govern- to Eastern Europe without subjecting likely keep growing. was “not happy” with Fed policy. On disruptions of energy exports as one ment nominated Mr. Schröder to the Western Europe to the same treat- Yet the fate of 3SI is uncertain. Friday he followed up with a pair of of the main causes of Europe’s energy board of Rosneft, the Russian oil gi- ment. Not surprisingly, Eastern Euro- The Trump administration should tweets. The Rubin Rule is dead. insecurity. Moscow is the largest en- ant. German media report that Mr. pean states have taken the lead in ramp up its energy strategy in two ergy exporter to Europe; Gazprom Schröder was paid some €250,000 trying to develop alternatives. In ways. First, promote U.S. investment alone supplied almost 40% of Eu- annually at Gazprom, and is expected 2016 Croatia and Poland led the for- in all facets of 3SI projects. Second, The president crossed a rope’s natural gas in 2017. According to be paid €300,000 to €425,000 at mation of the Three Seas Initiative, nudge European countries to accept to World Bank data, Gazprom’s Euro- Rosneft. But Germans have largely or 3SI, which united 12 states from a long-term package of sanctions on line in commenting on pean gas prices last year were more shrugged at the spectacle of a former the Baltics to the Balkans. Russian energy, patterned after interest rates. The central than double the U.S. domestic price. chancellor on Russia’s payroll. At a 3SI summit in Warsaw in Carter- and Reagan-era sanctions, in- Russia has also repeatedly used its June 2017, Mr. Trump pledged that cluding restrictions on technology bank needs to redraw it. gas to blackmail Europe, cutting off the U.S. would bolster exports of liq- transfers and financing of Russian the supply in 2006, 2009 and 2014, An all-out effort to block uefied natural gas to Europe so the gas production and exports. If the Eu- and causing severe shortages in East- Continent “can never be held hostage ropeans balk, the U.S. should impose Some may celebrate its demise. ern Europe. the pipeline offers an to a single supplier.” That statement such sanctions unilaterally. The Fed isn’t supposed to be unac- Germany has sought for years to opportunity to restore was anchored in the administration’s An all-out U.S. effort to stop Nord countable: Politicians name key Fed maintain a special energy relation- broader strategy of transforming the Stream 2 would help restore credibil- personnel; Congress is active in its ship with Moscow as a means of se- credibility after Helsinki. U.S. into a pre-eminent low-cost ity in the aftermath of the Helsinki oversight; journalists and other out- curing its own energy-supply pre- global energy supplier. summit. Over time, this strategy siders engage and critique every as- dominance in Europe. Once the Nord Russia’s gas stranglehold is a would reduce Moscow’s European gas pect of Fed policy. That attention can Steam expansion is completed, it will Many other European countries, source of vulnerability as well as exports dramatically, freeing Europe make the job of central banking un- account for 80% of Russian gas im- however, have been critical of Ger- power. Europe accounts for more from Moscow’s blackmail. American pleasant, but it is vital to the Fed’s ported to Europe, making Germany many’s Russian-energy romance. Thir- than 80% of Gazprom’s exports. En- energy exports to Europe would be legitimacy. the Continent’s major gas-distribu- teen EU states vehemently oppose the ergy accounts for almost half of Rus- reliable and fairly priced. More What Mr. Trump did was differ- tion hub. Nord Stream expansion. They are con- sia’s exports and 40% of its national Americans would have jobs, trans-At- ent. The process of pushing interest The Nord Stream 2 project has re- cerned about the loss of transit-fee budget. The implementation of a 3SI lantic ties would be stronger, and it rates back to historical norms has ceived particularly strong support revenue from existing pipelines that energy plan would drain Russia’s would be a major blow to the Putin been and will be among the most un- from the center-left Social Demo- run mostly through Ukraine and the pocketbook and frustrate its geopo- regime. certain policy programs undertaken cratic Party, a key member of Mrs. security risk of Russia’s growing dom- litical ambitions. in Fed history. Mr. Trump made that Merkel’s shaky governing coalition. inance over Europe’s gas market. Moscow has recognized the chal- Mr. Rivkin, a constitutional litiga- fraught process more complicated in Gerhard Schröder, a former SPD They have demanded the European lenge and done its best to block ef- tor, served in the Reagan and George two ways. First, he showed himself chancellor, has served as chairman of Commission transfer negotiating forts to diversify European energy H.W. Bush administrations at the ready to wage war over the Fed’s de- Nord Stream 2 AG, a Gazprom-owned power over the pipeline from Ger- supplies. Russian proxies have moved White House Counsel’s Office and the cisions even without a market cor- consortium. many to the EU. to delay or stop the 3SI project. Ac- Energy and Justice departments. Mr. rection or recession—the usual times Berlin signed the original Nord The new pipeline would enhance cording to the Croatian media, Gas- Zuzul is a former Croatian foreign when politicians start looking for Stream pipeline deal with Russia dur- Russia’s blackmail capability by en- fin, a Luxembourg company acting as minister and ambassador to the U.S. monetary scapegoats. Second, the perception of the Fed’s decision-making will change immediately. To be sure, the sub- Capitalism Will Solve the Climate Problem stance of those decisions won’t be so easily swayed. The Fed won’t fold By Fred Krupp tending online shopping isn’t disrupt- may be useful for politicians looking can be an engine to generate cost-ef- after one tart presidential comment; ing retail. to whip up voters, but misinforma- fective solutions. Clean-energy tech- Chairman Jay Powell and his col- ogether, science and capitalism Unfortunately, skeptics have fos- tion doesn’t help us plan to protect nologies such as wind and solar leagues are made of sterner stuff T built the modern world. But tered doubt about climate change by future economic growth. Citigroup power already have developed im- than that. More plausibly, the Fed across the political spectrum, misrepresenting the research. Some estimates the cost of unchecked cli- mensely in the past two decades. could overreact and seek to assert both are under attack. If we are to have claimed that Mr. Hansen’s mod- mate change will be in the tens of Public policy that puts a price on car- its independence by raising rates solve our greatest challenges, includ- els failed to predict temperatures ac- trillions. The president of the Rein- bon emissions would speed the adop- more quickly than is warranted. ing climate change, we have to deploy curately, but these evaluations use tion of clean energy by exposing the That would be a mistake, and it’s the power of these twin engines of measurements based on major cali- market to the costs this pollution still unlikely. civilization. bration errors. Researchers critical of Skeptics try to deny the puts on society. This will accelerate In central banking, though, ap- The best available research con- mainstream climate science also have adoption of and private investment in pearance matters as much as sub- firms the existence of human-driven expressed doubt about the growing evidence of global warming, clean-energy technologies. stance. How will the Fed’s decisions climate change, including the rapid intensity of extreme-weather events, but businesses already are Though climate change presents be perceived by markets and in po- pace of global warming. Leading sci- which in fact are more intense than American industries a daunting chal- litical campaigns, in boardrooms and entists’ predictions of temperature they were 30 years ago, due to betting on clean energy. lenge, market-based policies can un- in newsrooms? If the Fed slows rate rise have been largely accurate. In the warmer oceans and other climate-re- leash innovation from investors, in- increases on the merits, the public three decades since NASA climate sci- lated factors. And many have sug- ventors and entrepreneurs, who will now is likely to declare a Trumpian entist James Hansen first warned gested that the rise of global temper- surance Association of America says work to build a more prosperous and victory. If it speeds those increases, Congress that global warming had be- ature has paused or plateaued global warming could bankrupt his safer future. Working with accurate it may invite a Trumpian war. Either gun, the U.S. and other nations have recently, though reliable records industry. Even fossil-fuel companies scientific facts and the right incen- result would be devastating. poured billions of tons of carbon diox- show this isn’t the case. Onetime cli- like Exxon Mobil and Shell have ex- tives, the market will find winning The Fed’s instincts will be to hide ide and methane into the atmosphere, mate skeptic Jerry Taylor, a former pressed the urgent need to manage solutions. from this fight. Instead it should and the planet has continued to warm. vice president of the Cato Institute, the risks of climate change. So let’s follow the data and get confront it. Central bankers should Most climate models predicted changed his views when he reread This brings us back to capitalism. this done. not give marble-mouthed non- warming above the mid-20th-century Mr. Hansen’s testimony and realized Climate change is a byproduct of the responses to the inevitable ques- average of about 1 degree Celsius by its predictions were “spot on.” prosperity created by the market Mr. Krupp is president of the Envi- tions about the Trump administra- 2016. They were right. Atmospheric Arguments about climate science economy, but the market similarly ronmental Defense Fund. tion. They should instead be clear scientists predicted increased fre- with the usual assurances that the quency of extreme-heat events, and Fed hasn’t altered its course based they were right, too. Scientists also on political pressures. And they predicted warming would be most A Soldier Never Forgets North Platte should expand on the virtues and apparent in East Asia and the Arctic, fragility of Fed independence and ex- and it is. By Bob Greene made 10-minute stops in North The soldiers entered the events plain that these traditions are These results aren’t surprising, Platte to take on water. center to the aroma of steaks grilling mostly for politicians, not central given that they are based on many in- e were overwhelmed,” The townspeople made those 10 and the sound of recorded music: bankers, to honor. dependent data sets. Measurements ‘W said Lt. Col. Nick Jaskol- minutes count. Starting in December current songs by Luke Bryan, Justin Fed accountability, legitimacy and are collected by towers, buoys, air- ski. “I don’t really have 1941, they met every train: up to 23 Timberlake, Florida Georgia Line; independence are fragile but valu- craft, satellites and more, and are as- words to describe how surprised and a day, beginning at 5 a.m. and end- World War II songs by Glenn Miller, able ideals that reinforce each other. sessed by thousands of scientists moved we all were. I had never even ing after midnight. Those volunteers the Andrews Sisters, Jimmy Dorsey. The president crossed a line last world-wide. heard of the town before.” greeted between 3,000 and 5,000 They were served steak sandwiches, week; the Fed should not be shy in It’s a sign of the reliability of this Col. Jaskolski, a veteran of the soldiers a day. They presented them ham sandwiches, turkey sandwiches, attempting to redraw it. research that the insurance industry, Iraq war, is commander of the 142nd with sandwiches and gifts, played deviled eggs, salads and fruit; local with trillions in liability at stake, uses Field Artillery Brigade of the Arkan- music for them, danced with them, church groups baked pies, brownies Mr. Conti-Brown, an assistant it to determine financial models. Most sas Army National Guard. For three baked birthday cakes for them. Ev- and cookies. professor at the University of Penn- businesses can’t afford to have “polit- weeks earlier this summer, the ery day of the year, every day of the Mayor Dwight Livingston stood sylvania’s Wharton School of Busi- ical” opinions about climate change. 142nd had been conducting an emer- war, they were there at the depot. at the door for two days and shook ness, is author of “The Power and In- For companies facing potential im- gency deployment readiness exercise They never missed a train, never every soldier’s hand. Mr. Living- dependence of the Federal Reserve” pacts from climate trends, to deny in Wyoming, training and sleeping missed a soldier. They fed six mil- ston served in the Air Force in (Princeton University Press, 2016). warming would be like Macy’s pre- outdoors, subsisting on field rations. lion soldiers by the end of the war. Vietnam and came home to no Now it was time for the 700 soldiers Not 1 cent of government money words of thanks. Now, he said, as to return to their base. was asked for or spent, save for a $5 he shook the hands and welcomed A charter bus company had been bill sent by President Franklin D. the soldiers, “I don’t know whether PUBLISHED SINCE 1889 BY DOW JONES & COMPANY hired for the 18-hour drive back to Roosevelt. those moments were more impor- Rupert Murdoch Robert Thomson Arkansas. The Army had budgeted The soldiers never forgot the tant for them, or for me. I knew I Executive Chairman, News Corp Chief Executive Officer, News Corp for a stop to get snacks. The bus kindness. Most of them, and most of had to be there.” Matt Murray William Lewis Editor in Chief Chief Executive Officer and Publisher company determined that the sol- the townspeople who greeted them, “It was one soldier’s 21st birth- diers would reach North Platte, in are dead. And now, in 2018, those 21 day,” Lisa Burke said. “When I gave Karen Miller Pensiero, Managing Editor DOW JONES MANAGEMENT: Mark Musgrave, Chief People Officer; western Nebraska, around the time busloads from the 142nd Field Artil- him his cake, he told me it was the Jason Anders, Chief News Editor; Thorold Barker, Edward Roussel, Chief Innovation Officer; Europe; Elena Cherney, Coverage Planning; they would likely be hungry. The lery were on their way, expecting to first birthday cake he’d ever had in Anna Sedgley, Chief Operating Officer Andrew Dowell, Asia; Neal Lipschutz, Standards; company placed a call to the visitors’ stop at some fast-food joint. his life.” Not wanting to pry, she Meg Marco, Digital Content Strategy; OPERATING EXECUTIVES: bureau: Was there anywhere in town “We couldn’t believe what we saw didn’t ask him how that could possi- Alex Martin, Writing; Michael W. Miller, Features Ramin Beheshti, Product & Technology; & Weekend; Shazna Nessa, Visuals; Kenneth Breen, Commercial; that could handle a succession of 21 when we pulled up,” Col. Jaskolski bly be. “I was able to hold my emo- Rajiv Pant, Product & Technology; Ann Podd, News Jason P. Conti, General Counsel; buses, and get 700 soldiers in and said. As each bus arrived over a two- tions together,” she said. “Until Production; Matthew Rose, Enterprise; Tracy Corrigan, Chief Strategy Officer; out for a quick snack? day period, the soldiers stepped out later.” Michael Siconolfi, Investigations; Frank Filippo, Print Products & Services; Nikki Waller, Live Journalism; Steve Grycuk, Customer Service; North Platte said yes. North Platte to be greeted by lines of cheering When it became time to settle Stephen Wisnefski, Professional News; Kristin Heitmann, Chief Commercial Officer; has always said yes. people holding signs of thanks. They up—the Army, after all, had that Carla Zanoni, Audience & Analytics Nancy McNeill, Advertising & Corporate Sales; During World War II, North Platte weren’t at a fast-food restaurant: money budgeted for snacks—the Christina Van Tassell, Chief Financial Officer; Gerard Baker, Editor at Large Suzi Watford, Chief Marketing Officer; was a geographically isolated town They were at North Platte’s events 142nd Field Artillery was told: Nope. Paul A. Gigot, Editor of the Editorial Page; Jonathan Wright, International of 12,000. Soldiers, sailors and avia- center, which had been opened and You’re not spending a penny here. Daniel Henninger, Deputy Editor, Editorial Page DJ Media Group: Almar Latour, Publisher tors on their way to fight the war decorated especially for them. This is on us. WALL STREET JOURNAL MANAGEMENT: Professional Information Business: Joseph B. Vincent, Operations; Christopher Lloyd, Head; rode troop trains across the nation, “People just started calling our of- This is on North Platte. Larry L. Hoffman, Production Ingrid Verschuren, Deputy Head bound for Europe via the East Coast fice when they heard the soldiers were

EDITORIAL AND CORPORATE HEADQUARTERS: or the Pacific via the West Coast. on their way,” said Lisa Burke, the di- Mr. Greene’s books include “Once 1211 Avenue of the Americas, New York, N.Y., 10036 The Union Pacific Railroad trains rector of the visitors’ bureau. “Hun- Upon a Town: The Miracle of the Telephone 1-800-DOWJONES that transported the soldiers always dreds of people, who wanted to help.” North Platte Canteen.” TECHNOLOGY: AEROSPACE ON VERGE OF BIGGEST LEAP SINCE THE FIFTIES B4 BUSINESS&FINANCE

© 2018 Dow Jones & Company. All Rights Reserved. **** THE WALL STREET JOURNAL. Monday, July 23, 2018 | B1

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Lower Expectations Tesla Asks Suppliers for Cash Back The rates of return that states assume they will earn on their pension investments have fallen Request suggests The Silicon Valley electric- as an investment in the car reductions from suppliers for months of delays, Tesla last over the past five years. car company said it is asking company to continue the long- projects, some of which date quarter reached its longstand- auto maker’s urgency its suppliers for cash back to term growth between both back to 2016, and some of ing goal of making 5,000 8.2% during a crucial help it become profitable, ac- players. which haven’t been completed. Model 3s in a single week, cording to a memo reviewed While Tesla said in the The company called such re- which, if sustained, will help it 8.0 production period by The Wall Street Journal memo that all suppliers were quests a standard part of pro- generate cash. that was sent to a supplier last being asked to help it become curement negotiations to im- Auto makers and suppliers 7.8 BY TIM HIGGINS week. Tesla requested the sup- profitable, it is unclear how prove its competitive have complicated relation- plier return what it calls a many were asked for a dis- advantage, especially as it ships, each fighting for the 7.6 Tesla Inc. has asked some meaningful amount of money count on contracted spending ramps up Model 3 production. best deal under immense pric- suppliers to refund a portion of its payments since 2016, ac- amounts retroactively. Some The surprising requests ing pressure. Supply-chain 7.4 of what the electric-car com- cording to the memo. suppliers contacted about the raise further questions about consultants say sometimes pany has spent previously, an The auto maker’s memo, request said they were un- Tesla’s cash position, which auto makers will demand a re- 7.2 appeal that reflects the auto sent by a global supply man- aware of such a demand. has dwindled after it struggled duction in price for a current 7.0 maker’s urgency to sustain op- ager, described the request as Tesla declined to comment to boost production of its first contract going forward or use erations during a critical pro- essential to Tesla’s continued on the specific memo. But it car designed for mainstream leverage of awarding a new 2007 ’09 ’11 ’13 ’15 ’17 duction period. operation and characterized it confirmed it is seeking price buyers, the Model 3. After PleaseturntopageB2 Source: Wilshire Associates THE WALL STREET JOURNAL. Amid Revival, Manufacturers Face High Costs Pensions BY BOB TITA AND DOUG CAMERON Output Gap Dial Back The tight labor market is making Manufacturers are booking it tougher for some companies to Targeted more orders and delivering boost output, while shares in higher profits in a strong U.S. industrial companies have economy. underperformed the S&P 500. But investors are worried Returns that the good times won’t last: Unemployment rate, BY HEATHER GILLERS Costs are rising at some of the 12-month moving average biggest industrial companies as 12% Total The nation’s two biggest Manufacturing a result of tariffs and a super- 10 public pension funds are doing tight labor market. better in 2018. The problem is 8 Coming earnings will indi- they don’t think it will last. cate how much of a dent those 6 The California State pressures are making on the 4 Teachers’ Retirement System bottom line. This week, 3M Co., 2 and California Public Employ- Harley-Davidson Inc. and 0 ees’ Retirement System both Whirlpool Corp. are scheduled earned more than 8% for the ’09 ’11 ’13 ’15 ’17 to report. second fiscal year in a row, Industrial stocks are down Percentage change, thanks to a robust perfor- around 2% this year versus a year to date mance by stocks and private 4.8% rise in the S&P 500. Some equity. Together they manage 7.5% S&P 500 of the biggest manufacturers S&P 500 Industrials $575 billion for 2.8 million are leading the decline. Shares 5.0 public workers and retirees. in Caterpillar Inc. have 2.5 But the systems, known as dropped 13% this year, while 0 Calstrs and Calpers, respec- 3M is down 14%. –2.5 tively, aren’t counting on that Shares in small and medium- type of performance over the size companies have fared bet- –5.0 long term. Both rolled back ter than those of manufactur- –7.5 their investment targets this ing heavyweights, but that has Jan. ’18 March May July year in an effort to be more re- done little to reassure money Sources: FactSet (S&P); alistic about what they can managers. Assets in industrial JOSIE NORRIS/THELabor SAN ANTONIO EXPRESS-NEWS/ASSOCIATED PRESS Department (unemployment) earn in the future. Calstrs exchange-traded funds have de- Firms are under pressure from tariffs and a tight labor market. Caterpillar stock is off 13% this year. THE WALL STREET JOURNAL. dropped its future goal to 7%. clined 8% in the past month as Calpers initiated a multistep investors moved money into slightly over the past week as Honeywell International cupation with the effects of the driving up costs of the metal it drop this year that will end at consumer staples and utilities. initial earnings reports beat an- Inc. on Friday reported higher Trump administration’s import imports to the U.S. from its 7% in 2021. “We’re tracking towards the alysts’ expectations. Fastenal sales and profit margins at all tariffs on manufacturers. smelters in Canada. Many other public pensions worst relative year for industri- Co. and W.W. Grainger Inc., four of its divisions and said Shares in aluminum producer Investors’ dissatisfaction around the country are turning als in 20 years,” said Scott Da- which supply factories with ev- the trend is continuing in the Alcoa Corp. have fallen nearly stands in contrast to bulging more cautious about future re- vis, chief executive at Melius erything from bolts to cleaning third quarter. 16% since Wednesday, when the order books and rising indus- sults following a nine-year bull Research LLC. supplies, both signaled strong But that good news has done Pittsburgh-based company said trial output, buoyed by a re- market for U.S. stocks, which Shares have recovered demand. little to offset investors’ preoc- the 10% tariff on aluminum was PleaseturntopageB2 PleaseturntopageB2

INSIDE PERSONAL TECHNOLOGY | By David Pierce Apple’s MacBook Pro Keyboard Strikes Better Chord A fast com- board? A good keyboard Anyone who uses a Mac- times—or just really want to significant upgrades will puter with a somehow disappears, as if Book in a meeting can tell play “Fortnite” at work. likely come to other devices. crummy key- you carried out a mind meld you that’s good...and neces- They’re for those who don’t The performance boost board is like a with your PC. sary. But my testing shows blanch at the idea of paying thanks to Intel’s latest chips, Les Paul with That’s why the keyboard Apple likely fixed a bigger between $2,400 and $6,700 the TrueTone display that broken is what matters most to me problem than noise. for a laptop. Which is to say, looks good in any lighting, strings, or a Ferrari with a about the new MacBook Pro. In case you’re curious, not most people. (For nor- the special secondary chip HOMER’S ROLE busted gearshift. They aren’t The five rows of keys look here’s the skinny on the rest mal humans, Apple offers a that enables Siri to be al- anygoodifyoucan’tuse virtually identical to last of the expensive new Mac- choice of trade-offs: the iPad ways listening—I expect IN THE DISNEY them right. year’s model, but Apple is Book Pro, which comes in 13- Pro with a keyboard case, them to percolate to more FIRMAMENT Think about it: Have you calling this its third-genera- and 15-inch models. They the ultrathin but underpow- affordable MacBooks. ever had to essentially re- tion “butterfly” keyboard. aren’t for everyday users. ered 12-inch MacBook and In the past three years, learn to type because of a Apple says the big difference Pros are for people who care the ancient MacBook Air.) one MacBook feature in par- MEDIA, B3 clunky or unfamiliar key- is that it’s quieter. about graphics’ rendering Luckily, the Pro’s most PleaseturntopageB4

Midcap companies are old enough to know what they’re doing. And young enough to do it.

MDY invests in growth-hungry, midcap powerhouses that offer immediate potential but are grown-up enough not to be a flash in the pan. And it’s beaten 82% of the Morningstar U.S. THE Mid-Cap Blend Category over the last 3, 5 and 10 years. spdrs.com/MDY MDY MIGHTY MDY is one of the many first-to-market ETFs from State Street Global Advisors. MIDCAP

Source: Morningstar as of 3/31/18. Based on funds in the Morningstar Mid-Cap Blend Category (oldest share class). Rankings are based on returns after taxes that are net of all fees, maximum federal tax rate (39.6%) and applicable sales loads. Rankings reflecting lower tax rates may have resulted in less favorable results for exchange traded funds due to their tax efficiency. Universe: 111 funds for 10 years, 131 funds for 5 years, and 145 funds for 3 years. MDY’s 1 year peer group percentile is 32% (54 of 177 funds). Past performance is no guarantee of future results. ETFs trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETF’s net asset value. ETF shares may not readily trade in all market conditions. Brokerage commissions and ETF expenses will reduce returns. Investments in mid-sized companies may involve greater risks than those in larger, better known companies, but may be less volatile than investments in smaller companies. ©2018 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. SPDR® S&P MidCap 400® ETF Trust, a unit investment trust, is listed on NYSE Arca, Inc. SPDR®,S&P and S&P MidCap 400 are registered trademarks of Standard & Poor’s Financial Services LLC, a division of S&P Global (“S&P”) and have been licensed for use by State Street Corporation. No financial product offered by State Street or its affiliates is sponsored, endorsed, sold or promoted by S&P. ALPS Distributors, Inc. (fund distributor); State Street Global Advisors Funds Distributors, LLC (marketing agent). State Street Global Advisors and its affiliates have not taken into consideration the circumstances of any particular investor in producing this material and are not making an investment recommendation or acting in fiduciary capacity in connection with the provision of the information contained herein. Before investing, consider the funds’ investment objectives, risks, charges and expenses. To obtain a prospectus or summary prospectus, which contains this and other information, call 1.866.787.2257 or visit www.spdrs.com. Read it carefully.

2052632.1.1.NA.RTL Not FDIC Insured • No Bank Guarantee • May Lose Value B2 | Monday, July 23, 2018 **** THE WALL STREET JOURNAL. INDEX TO BUSINESSES BUSINESS & FINANCE

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

A E O Aerion...... B4 Elliott Management...B8 Old Dominion Freight Airbus...... B4 Ernst & Young...... B8 Line...... B2 Alcoa...... B1 Euronext...... B9 P Trucking Firms Barrel On Alibaba Group Holding Export-Import Bank of ...... B8 China...... A10 Pacific Investment BY JENNIFER SMITH Alphabet...... B10 F Management...... B8 Amazon.com...... B10 Papa John's Facebook...... B10 Apple...... B1,B4 International...... B3 Trucking companies are Fastenal...... B1 Archer Daniels Midland Pfizer...... B8 hoping to turn the most ro- Fiat Chrysler...... A1 PricewaterhouseCoopers ...... B9 bust freight market in a gen- Atos...... B3 G ...... B8 Aurelius Capital General Electric...... B4 R eration into stronger long- Management...... B8 GEO Group...... A6 Remy Cointreau...... B9 term financial footing. B H S Carriers are raising rates BlueMountain Capital Harley-Davidson...... B1 Sega Sammy Holdings and investing in new equip- Management...... B8 Honeywell International ...... B9 ment as a monthslong rally Boeing...... B4 ...... B1 Smithfield Foods...... A2 BOE Technology Group in transportation J Stephens...... B2 ...... B4 THE demand gives Build-A-Bear...... B9 J.B. Hunt Transport Syntel...... B3 WEEK Services...... B2 them the upper Bunge...... B9 T JBS...... A2 AHEAD hand in setting C J.P. Morgan Asset Tesla...... B1 Textron...... B4 prices with ship- California Public Management...... B8 pers. Analysts ex- Employees' Retirement K Theranos...... B3 System...... B1 3M...... B1,B8 pect strong results across the Knight-Swift California State 21st Century Fox...... B3 sector over the next two Transportation Teachers' Retirement Tyson Foods...... A2 Holdings...... B2 weeks as fleets report earn- System...... B1 U-W-Z Konami Holdings...... B9 Caterpillar...... B1 ings. KPMG...... B8 Uniti Group...... B8 C.H. Robinson Capacity remains tight L Walgreens Boots Worldwide...... B2 Alliance...... B3 this summer, normally a CME Group...... B9 Las Vegas Sands...... B9 Walmart...... B8 slack time for freight, and Comcast...... B3 Lockheed Martin...... B4 Walt Disney...... B3 some trucking companies are D M-N Werner Enterprises....B2 turning down loads for lack Dalian Commodity Maschhoffs...... A2 Whirlpool...... B1 Exchange...... B9 MGM Resorts Windstream Holdings B8 of available trucks. Deloitte Touche International...... B9 W.W. Grainger...... B1 “We should still see good Tohmatsu...... B8 NewCold...... A2 Zero Mountain...... A2 margin performance from truckers,” said Brad Delco, a transportation analyst with INDEX TO PEOPLE Stephens Inc. “Supply-de-

mand dynamics remain tight, SCOTT OLSON/GETTY IMAGES and as a result pricing has Some companies are turning down loads this summer for lack of available trucks. A H O been strong, partially offset Andriesen, Tim...... B9 Holmes, Elizabeth...... B3 O'Gnimh, Art...... B4 by the need to raise driver Yet trucking stocks ha- second-quarter results, set Strong demand also is ex- B Hsieh, David...... B4 P wages.” ven’t risen as much as the stage last week with a pected to buoy freight bro- Balwani, Sunny...... B3 I Page, Page...... A4 June marked the 16th freight demand in recent 55% gain in earnings and a kers such as C.H. Robinson Breton, Thierry...... B3 Ivascyn, Dan...... B8 Pelz, Bobby...... B9 straight month in which months, reflecting investor 24% increase in revenue com- Worldwide Inc., set to report C K Pradère, Gilles...... A6 prices increased on an annual caution that the current cy- pared with the same period results July 31, and less- R Colman, Robert...... B3 Kazmi, Mohammed....A6 basis on trucking’s spot mar- cle might have peaked. Some in 2017. than-truckload carriers, D Kennedy, Nicholas...... B9 Rosenbaum, Nathaniel ket, where shippers book last- analysts are concerned about Knight-Swift Transporta- which combine multiple ship- ...... A1 Khanna, Rakesh...... B3 minute transportation. That is carriers’ ability to recruit ad- tion Holdings Inc., the larg- ments on each truck. Old Do- Davis, Scott...... B1 S Delco, Brad...... B2 M the longest sustained period ditional drivers in a tight la- est U.S. truckload carrier, minion Freight Line Inc., Schiff, Adam...... A4 De Leon, Bill...... B8 Manley, Mike...... A1 of pricing power for truckers bor market. and Werner Enterprises one of the largest such com- Dostum, Abdul...... A9 Schnatter, John...... B3 since the industry was dereg- J.B. Hunt Transport Ser- Inc., a large trucking com- panies, reported a 15% rise in Marchionne, Sergio....A1 Shanahan, Robin...... B8 G ulated in 1980, according to vices Inc., one of the nation’s pany based in Omaha, Neb., daily tonnage in May from Mariappa, Sudi...... B8 V Gallo, Alberto...... A6 Melamed, Leo...... B9 online freight marketplace largest transportation pro- are set to report results this the same month a year ear- Gensler, Gary...... B8 Mnuchin, Steven...... A6 Virag, Dennis...... B2 DAT Solutions LLC. viders and the first to release week. lier. Gibney, Alex...... B3 Murray, Kirk...... B2 W Gillis, Paul...... B8 Musk, Elon...... B2 Wang, Dan...... B4 analysts expect Tesla eventu- sustainably profitable. That is to help preserve its cash po- Tesla Asks ally will need to raise more a valid and fair criticism of sition. Other companies are money. Tesla’s history to date.” In August, Mr. Musk told Factories scrounging for everything Tesla has been burning As a younger company, analysts Tesla was able to ne- from low-skilled line workers Suppliers cash at a rate of about $1 bil- Tesla indicated it had trouble gotiate longer payment terms to software engineers who can lion a quarter, and finished getting the attention of some to about 60 days for Model 3 Face High operate robots. The worker the first quarter with $2.7 bil- of the most important suppli- parts, in what he described as shortage threatens an upturn For Cash lion in cash on hand. Tesla ers. Mr. Musk has complained “the nirvana” that would allow that is in its sixth month, mea- pledged to pare back planned in the past that he wasn’t get- the auto maker to make the Expenses sured by industrial output. capital expenditures this year ting parts makers’ best teams, car and get paid for it before Previous cycles have typically ContinuedfrompageB1 to less than $3 billion from but he has said that changed the bill is due to suppliers. ContinuedfrompageB1 lasted about four years. deal to get upfront savings on $3.4 billion last year. Its loss with the Model 3. “Obviously, that’s like the bound in oil prices that has Manufacturing unemploy- a contract. But they say it is attributable to common share- Tesla has made changes promised land right there,” he spurred more domestic drilling. ment is at its lowest level in 15 unusual for an auto maker to holders in the first quarter with its suppliers in the past said. U.S. aerospace and auto manu- years, according to the Labor ask for a refund for past work. was $710 million, the fifth facturers have also reported Department. Companies sur- Dennis Virag, a manufactur- consecutive quarter of record strong orders. veyed for the closely watched ing consultant who has losses. But near-record-low unem- Chicago Business Barometer worked in the automotive in- Tesla will need to pay down ployment of about 4% is driv- said production fell in June dustry for 40 years, said a so- a $230 million convertible ing up wage bills and leaving from a year earlier, the fourth licitation like Tesla’s could put bond this November if its some companies short of monthly drop since December. suppliers in financial peril and stock doesn’t reach a conver- workers, holding back produc- More than one-third of compa- jeopardize its future supply of sion price of $560.64, and a tion. nies said they had boosted sal- car parts. $920 million convertible note Interactive The labor market is particu- aries. “It’s simply ludicrous and it next March if the stock larly tight for experienced The heavy-truck market just shows that Tesla is des- doesn’t reach $359.87. Shares workers in cities such as Char- highlights the gap between perate right now,” he said. closed Friday at $313.58, and lotte, N.C., and Houston, where strong growth signals and in- “They’re worried about their are down about 4.5% over the Brokers steel mills are expanding pro- vestor anxiety. North American profitability but they don’t past 12 months. duction of pipe and tubing orders are at a nearly 20-year care about their suppliers’ As part of Tesla’s bid to be- used in oil and natural-gas high, but production hasn’t profitability.” come profitable, Mr. Musk cut wells. kept pace, in part because of Tesla has sought to balance Tesla’s workforce by 9% in pays 1.41% Tariffs on imported pipe are labor shortages, supply-chain its desire for rapid growth June and promised to slow helping to boost drilling com- disruptions and some concern with paying for the expensive other spending as well. He’s panies’ demand for those that orders could be canceled. launch of new vehicles and become focused intently on products made in the U.S. Shares in Paccar Inc., the building out infrastructure to becoming cash-flow positive, a on idle cash “To make those products, maker of Kenworth and Peter- compete against much larger person familiar with his think- they have to hire more peo- bilt trucks, are down nearly auto makers. ing said. ple,” said Kirk Murray, vice 12% this year. Chief Executive Elon Musk Last month, he told employ- president of SeAH Steel Amer- Orders for heavy-duty has said he wants to avoid ees in an email: “What drives in your ica Inc. “From experience, I trucks have surged since last raising additional cash, prom- us is our mission to accelerate can say it’s not easy.” SeAH is fall to an annualized rate of ising the company can be- the world’s transition to sus- expanding a tubing mill in about 430,000 vehicles. But come cash-flow positive with tainable, clean energy, but we Houston that had been dor- manufacturers have been the continued Model 3 build will never achieve that mis- brokerage mant before the South Korean building trucks at a much rate and turn a profit in the sion unless we eventually steelmaker bought it in 2016. slower rate. second half of the year. Many demonstrate that we can be account1 next 20 years once the sys- Pensions tem’s assumed rate of return drops to 7%. Pension-fund officials in Dial Back other parts of the country are making the same decision to drop their future targets even Targets as they report strong results for fiscal 2018. The Maine Pub- ContinuedfrompageB1 lic Employees Retirement Sys- remain the single largest hold- tem earned 10.3% for the year ing for most retirement sys- ended June 30 but this year tems. The funds rely on a com- dropped its long-term goal to bination of investment income 6.75%. It has now reduced its and contributions from em- rate-of-return assumption four ployees, states and cities to times since 2009. fund their mounting obliga- The moves mean the system

tions to retirees. MAX WHITTAKER/REUTERS now has more work to do if it For many decades these Calpers expects to earn 7% in 2021, off from 8% most recently. hopes to fund all future bene- funds clung to a belief that fits. Had the fund maintained stocks, bonds and other hold- criticized for using unrealistic ing move; it has real-life con- its precrisis 7.75% goal, it could To learn more visit: ings could earn at least 8% and investment assumptions, sequences for systems that use today report having enough that those gains would fund which proved costly during the those predictions to calculate assets to cover 91% of its lia- ibkr.com/141 hundreds of billions in liabili- last financial crisis. Many the present value of obliga- bilities according to executive ties. But many are trimming funds recorded big losses in tions owed to retirees. Even director Sandy Matheson. In- those assumptions to 7% and 2008 and 2009, pulling their slight cutbacks in return tar- stead it has 81%, she said. lower. The median assumed long-term returns well below gets often mean budget- The Illinois State Board of rate of return held by 130 pub- the 8% barrier. As of June strained governments or work- Investment for years relied lic pension funds tracked by 2017 the 10-year annualized ers are asked to pay on an 8.5% assumed return Wilshire Consulting dropped in median return for all public significantly more to account rate for its state-employee re- 2017 to 7.25%. That rate was pensions tracked by Wilshire for liabilities that are expected tirement plan. In 2016 Interactive Brokers Rated #1 still 8% as recently as 2012. Trust Universal Comparison to rise as life spans increase it dropped to 7%, one of many Best Online Broker 2018 “We probably want to tem- Service was 5.57%. and more Americans retire. reasons it now has just 35% of by Barron’s* per our enthusiasm when we “Over 10 years, we strug- In California, some local- what it needs to pay for future Member NYSE, FINRA, SIPC. Supporting documentation for any have a year or two years of gled,” Calstrs Chief Investment government officials are con- benefits. “If we were still 8.5% claims and statistical information will be provided upon request. strong returns because one Officer Christopher Ailman cerned their costs will rise ag- it might be 50% or 60%—it *Interactive Brokers rated #1, Best Online Broker according to thing we know for certain is said at a public meeting on gressively as Calpers lowers its would appear to be a lot bet- Barron’s Online Broker Survey 2018: All Together Now, March 26, 2018. For more information see, ibkr.com/ info - Barron’s is a reg- that there will be challenging Friday. Calstrs has returned an expected return rate. Calpers ter,” said Illinois State Board istered trademark of Dow Jones & Co. Inc. [1] Credit interest rate years,” said Wilshire Consult- average annualized 6.3% over has said the state and school of Investment Chair Marc as of 7/3/2018. USD credit interest is paid on balances over USD ing Chief Investment Officer 10 years as of June 30. districts participating in its Levine. But it would be total 10,000 in security accounts with Net Asset Value exceeding USD Steve Foresti. But moving expectations system would have to pay at nonsense because you still owe 100,000. For more information, see ibkr.com/interest 7-IB18-1189 Pensions have long been below 8% isn’t just an account- least $15 billion more over the the same amount of money.” THE WALL STREET JOURNAL. **** Monday, July 23, 2018 | B3 BUSINESS NEWS Papa John’s French IT Firm Expands in U.S.

Adopts Atos to acquire Syntel ships with financial-services added flexibility to pursue firms, as well as companies in shorter-term projects, rather for $3.4 billion, gaining the health-care and retail sec- than the five- to seven-year Defense a link to providers tors. American Express, State projects it has traditionally Street Bank and FedEx Corp. coveted, Mr. Breton said. of financial services were Syntel’s three largest Syntel Chief Executive To Thwart customers in 2017, accounting Rakesh Khanna, who is based BY BEN DUMMETT for about 45% of the com- in India, would stay with the AND NICK KOSTOV pany’s annual revenue. company and join Atos’s exec- Founder Atos has been seeking sig- utive committee. BY JULIE JARGON Atos SE of France has nificant acquisitions. Last The transaction, which is struck a $3.4 billion deal to year, the IT and payments- expected to close by year-end, Papa John’s Interna- buy Syntel Inc., a U.S.-based technology company lost out would be accretive to Atos tional Inc.’s board members information-technology com- to French rival Thales SA in an shareholders, with earnings voted to adopt a “poison pany, in a move that would effort to acquire smart-card per share expected to grow by pill” on Sunday to prevent give it access to some of the maker and digital security a double-digit percentage from its controversial founder biggest U.S. financial-services company Gemalto NV for €4.8 2019, Mr. Breton said. It is from gaining a controlling companies. billion ($5.6 billion). subject to the customary regu- interest in the pizza chain, The French company said Atos is about five times the latory approvals. according to people familiar late Sunday it plans to pay $41 size of Syntel, with a market Syntel swung to a profit of

with the matter. a share in cash for Michigan- ERIC FEFERBERG/AGENCE FRANCE-PRESSE/GETTYvalue IMAGES of roughly €13 billion. $166.3 million in 2017 from a The board, which is ex- based Syntel. Shares in Syntel Atos CEO Thierry Breton said the firm sought digital know-how. The companies serve some of loss of $57.4 million in the pected to announce the poi- closed at $39.13 Friday, having the same industries, including prior year, though revenue fell son pill Monday morning, has more than doubled over the Thierry Breton said Sunday for companies’ IT operations. life sciences, financial ser- 4.4% to $923.8 million. Atos been trying to sever ties with past 12 months. Including as- that an incentive for a deal The acquisition would boost vices, manufacturing, retail generated revenue of €12.7 bil- John Schnatter, who founded sumed net debt, the deal val- was Syntel’s strong know-how Atos’s presence in North and telecommunications, and lion in 2017, up 2.3% from the Papa John’s 34 years ago, fol- ues Syntel at $3.57 billion. The in digital fields, including America, where the company’s both target markets in North prior year, excluding the im- lowing revelations that he Wall Street Journal reported cloud services, social media, revenue fell in the first three America and Europe. pact of acquisitions and cur- used a racial slur during a re- the deal earlier Sunday. mobile, analytics and automa- months of the year. In particu- Adding Syntel’s 23,000 en- rency swings. Net profit rose cent conference call. Atos Chief Executive tion. All are important areas lar, Syntel has strong relation- gineers would give Atos the 11% to €601 million. Mr. Schnatter owns 29% of Papa John’s shares and has indicated that he won’t cede control of the company with- out a fight. Fox Assets Would Bolster Disney’s Franchises Boards can adopt share- holder-rights plans, com- BY ERICH SCHWARTZEL monly known as poison pills, AND JOE FLINT to block an investor from ac- cumulating a majority stake Once Walt Disney Co. com- in a company—a defensive pletes its $71 billion deal to move intended to thwart a buy most of 21st Century Fox, hostile takeover. They are where do Homer and Marge usually employed to block ac- Simpson fit in with Mickey tivist shareholders from gain- Mouse and Luke Skywalker? ing more control. Disney has become the Mr. Schnatter used the N- most powerful content creator word in May during a confer- of the modern era, thanks to ence call with his marketing its control of some of the agency that was intended to world’s most popular fran- prepare him for his return as chises, including Frozen, company spokesman. Avengers, Star Wars and Toy He publicly apologized for Story. They typically start on his use of the word and film and are made into con- agreed to step down as sumer products, theme-park board chairman earlier this rides—and now a soon-to- month but said he has since launch streaming service. second-guessed his decision. Fox, in comparison, has fewer top franchises, but it does have several key proper- ties and brands that Disney Boards adopt ‘poison can milk, assuming both com- pills’ to block an panies’ shareholders approve the deal on Friday and foreign investor from gaining regulators give their blessing. a majority stake. Here is a look at Fox’s mar-

quee properties and what Dis- 20TH CENTURY FOX/EVERETT COLLECTION (2) ney might do with them. Among Fox’s marquee properties are the 2009 movie ‘Avatar’ and the TV series ‘The Simpsons,’ which enters its 30th season this September.

He explained in a letter to ‘The Simpsons’ locked up for several years but lion Avatar-themed land Academy Awards for “12 Years presence in adult-targeted the board last week that he The longest-running scripted will eventually come up for re- helped to boost attendance a Slave,” “Birdman” and “The programming and likely be an- wasn’t a racist and didn’t series ever on prime-time tele- newal. The show also could 15%, according to the Themed Shape of Water”—the most other supplier for Hulu. use the word as a racial epi- vision enters its 30th season move to Disney-owned ABC or Entertainment Association. impressive record in Holly- thet. this September and has gener- the Disney Channel. wood in recent history. Disney Fox Library Papa John’s board last ated billions of dollars in reve- ‘X-Men’ stopped making such mature In its 83-year history, Fox Sunday voted to terminate nue from reruns and consumer ‘Avatar’ While Disney owns the bulk movies for adults when it sold has produced some of Holly- some of its ties with Mr. products for Fox. It has even James Cameron’s 2009 3-D of Marvel Comics characters, its Miramax unit in 2010. wood’s most memorable mov- Schnatter, including one that become a theme-park ride at environmental parable re- Fox has the big-screen rights Disney CEO Robert Iger has ies, from “The Sound of Music” allows him use of an office at Comcast Corp.’s Universal mains the top-grossing movie to a few, including the X-Men repeatedly talked up Search- to “There’s Something About the company’s headquarters theme parks and the unlikely of all time, with $2.8 billion and Fantastic Four teams. The light, which will become a sup- Mary,” and television shows in Louisville, Ky. Mr. Schnat- inspiration for golf wear in world-wide. Fox and Mr. Cam- studio has had moderate suc- plier to the Hulu streaming ser- including “Prison Break” and ter’s attorneys are challeng- China, where Simpsons-themed eron are betting on a contin- cess making movies of those vice that Disney plans to steer “The X-Files.” Disney will in- ing the termination of those clothing stores have popped up. ued public appetite more than characters, most notably when more toward adults after the herit this library of thousands agreements. Disney is acquiring the Fox a decade later with four it has opted for R-rated, adult- acquisition, said people close to of titles, an automatic boon to The company also has sug- television studio, which makes planned sequels between 2020 only treatments in “Logan” or the company. Some Searchlight its streaming efforts. gested Mr. Schnatter resign “The Simpsons,” but not the and 2025, at an estimated to- “Deadpool” that contrast with films will likely still be released Fox has already turned these from the board, according to Fox network, where it airs. tal cost of more than $1 bil- Disney’s PG-13 approach. in theaters, if only to qualify older titles into unusual revenue people familiar with the mat- (21st Century Fox and News lion. “Avatar” is the kind of Disney has turned its $4 for awards like the Oscars. opportunities. Fox’s consumer- ter. Corp, parent company of The big-budget spectacle that Dis- billion acquisition of Marvel products division took a sen- Avis Budget Group Inc. last Wall Street Journal, share ney excels at releasing, but the Entertainment into a hitmaker FX tence from the 1993 baseball year adopted a poison pill to common ownership.) studio will have to gauge how with “Black Panther” and Fox’s FX cable channel has movie “The Sandlot”—“You’re block its largest shareholder, In 2013, Fox’s FXX cable much moviegoers want of the “Avengers: Infinity War.” The launched many critical and com- killin’ me, Smalls!”—and pasted a hedge fund, from poten- channel, which Disney also is property, which largely disap- company will likely look to mercial successes. It is home to it on mugs, T-shirts and posters tially increasing its influence buying, acquired exclusive ca- peared from public view be- unite all its Marvel characters “American Horror Story” and sold in stores today. Disney will over the company. Other ble and online rights to reruns tween its release and the in cinemas, though it remains “Atlanta,” neither of which fit have seemingly limitless oppor- companies that have adopted in a deal valued around $400 theme-park opening. to be seen if Disney will con- Disney’s family-friendly pro- tunities to do the same with poison pills in recent years million. “Avatar” is already part of tinue Fox’s edgier approach. gramming, as well as the long- Fox’s library, and, at a time include J.C. Penney Co., Trib- Disney can sit back and Disney’s theme-park business running comedy “It’s Always when “Full House” and “Murphy une Publishing Co. and Pier 1 count the money the show still from a global licensing deal Fox Searchlight Sunny in Philadelphia,” which Brown” are being brought back Imports Inc. generates or further integrate with Fox. The first use came at In five years, the company’s has been immensely popular to life, it is conceivable that —Annie Gasparro it. The theme-park deal with Orlando’s Animal Kingdom Fox Searchlight art-house divi- and profitable for Fox. The net- shows such as “Glee” or “In Liv- contributed to this article. Universal, for instance, is theme park, where a $500 mil- sion won three best-picture work will give Disney its first ing Color” could get rebooted. Theranos Settles Investor Suit

As Firm Runs Low on Funds Saving is an ambition. BY CHRISTOPHER WEAVER Last month, federal prosecu- make good on a payment re- Aim higher. tors filed criminal charges lated to its earlier settlement. Theranos Inc., running on against founder and CEO Eliza- A Walgreens spokesman financial fumes, settled a suit beth Holmes and former Presi- didn’t respond to a request for SYNCHRONY BANK 12-MONTH CD filed by investors who had al- dent Sunny Balwani, alleging comment. leged they were defrauded by that they defrauded investors, Theranos had claimed it had the blood-testing firm. doctors and patients. Ms. developed technology that The pact ends a civil case Holmes—who stepped down as could deliver dozens of lab re- % brought by Robert Colman, a CEO ahead of the charges—and sults using just a few drops of former Silicon Valley invest- Mr. Balwani pleaded not guilty. blood. A series of Wall Street 2.40 * ment banker, and other plain- In the wake of these legal Journal articles beginning in APY tiffs who made indirect invest- costs, Theranos has been sub- October 2015 revealed that the $2,000 minimum opening deposit ments in Theranos, court sisting on a loan backed by its company’s technology fell far records filed Friday show. patent portfolio since late last short of its claims. Synchrony Bank has consistently earned the They alleged that Theranos year. The terms of Fri- Mr. Colman’s lawsuit, in BankrateSafe&Sound®5-StarRating!* made false and misleading day’s settlement weren’t dis- federal court in northern Cali- statements about its technol- closed in the court filings. fornia, could continue to have ogy. Reed Kathrein, an attorney implications for the Theranos Compare us to your bank and start saving at The company previously representing Mr. Colman and saga. Documentary filmmaker synchronybank.com or call 1-800-753-6870. reached costly settlements the other plaintiffs, declined to Alex Gibney asked the judge in with a major investor and its comment. David Taylor, Thera- the case to make public video *Annual Percentage Yield (APY) is accurate as of 7/10/18 and subject to change at any time without notice. A former retail partner Wal- nos’s new CEO, declined to depositions from two court minimum of $2,000 is required to open a CD and must be deposited in a single transaction. A penalty may be greens Co., and settled civil comment. cases, including of Theranos imposed for early withdrawals. Fees may reduce earnings. After maturity, if you choose to roll over your CD, you fraud allegations by the Secu- Meantime, the Walgreens insiders. will earn the base rate of interest in effect at that time. Visit synchronybank.com for current rates, terms rities and Exchange Commis- Boots Alliance Inc. unit filed a Mr. Gibney said in court fil- and account requirements. Offer applies to personal accounts only. AWARDS: Bankrate Safe & Sound 5-Star Rating earned for Q1 2014 through Q2 2017. sion in March without admit- second suit this month, alleg- ings that he is making an HBO © 2018 Synchrony Bank ting or denying wrongdoing. ing Theranos had failed to documentary about Theranos. B4 | Monday, July 23, 2018 THE WALL STREET JOURNAL.

TECHNOLOGY WSJ.com/Tech China Focuses on Apple Ambitions A Laptop Keyboard Push to supply advanced screens for Gets Fixes iPhones part of ContinuedfrompageB1 technology campaign ticular created controversy. Apple showed off a new typ- BY YOKO KUBOTA ing mechanism in 2015 when it introduced the waif 12- CHENGDU, China—China’s inch MacBook with the but- campaign to become a global terfly keyboard, named for power in advanced manufac- the two small wings on ei- turing is playing out at a high- ther side of a key that flap tech factory in Sichuan prov- up and down as it moves. ince, where engineers are The butterfly keys allowed aiming to supply display Apple to put incredibly thin screens for Apple Inc.’s top- keyboards into incredibly tier iPhones. thin laptops. BOE Technology Group Co. plants already make display o make the whole part screens for Apple’s iPads and T thinner requires re- MacBook computers, and the ducing “travel,” the company is also the world’s distance a key moves up and top producer of large liquid down when you press it. De- crystal screens. Now it is seek- signers also have to balance ing to supply Apple with ad- featuressuchaspeakforce vanced organic light-emitting (doyouhavetoslamitdown

diode, or OLED, smartphone QILAI SHEN/BLOOMBERG NEWS to get anything done?), the screens, according to people BOE Technology Group is seeking to supply advanced OLED screens for Apple’s high-end iPhones. A BOE factory in Chongqing. size of the keys and the dis- familiar with the plans. tance between them. If it succeeds, BOE wouldn’t play company that supplies and whose biggest sharehold- vestment, company filings “It’s a mixture of art and only prove its manufacturing Apple, which is notoriously ers are state-linked companies, showed. Helping Hand science,” said Art O’Gnimh, prowess with a technically finicky in its demands for top- could help Apple stay in IHS’s Mr. Hsieh said govern- BOE Technology has relied head of core keyboards and challenging product but also quality components. China’s good graces—as long ment backing helps, but BOE heavily on government backing mice at Logitech. score a big win for China in its But LCD screens are easier as BOE can meet Apple’s high also has talented engineers, to build display plants I’ve never cared for the race to catch up to South Ko- to mass-produce than flexible bar for quality. with a type of commitment he butterfly keyboard. It feels rea and Japan in advanced dis- OLED displays, which involve “It would be seen favorably said he has found increasingly Initial investment for display plants, too shallow, too close to tap- play-screen manufacturing. applying tiny organic materi- by Chinese policy makers if difficult to find in the more in billions of yuan ping on glass rather than “Many years ago, people als. Even Samsung Electronics Apple puts a stamp of good mature industries of South Ko- pressing a key. But some us- were saying that no, the China Co., an OLED pioneer and Ap- quality for China’s own tech- rea, Taiwan and Japan. Local government BOE ers had bigger issues. guys can’t do it. But I think BOE ple’s primary display provider, nology of suppliers,” said Dan A case in point is BOE’s ap- 0102030Since each key moves so makes a good example,” said has struggled with a high rate Wang, a technology analyst at proach to Apple. BOE first Hefei little to begin with, anything David Hsieh, senior director of of castoffs. Gavekal Dragonomics. knocked on Apple’s doors in in its way—even a speck of display research at IHS Markit, For Apple, landing BOE as Apple declined to comment. about 2011 with hopes of sup- Mianyang dust—could render its use- a data-analytics company. an OLED display supplier pro- BOE’s rapid rise partly re- plying the tech giant with Wuhan less. Apple says very few BOE has advanced quickly vides it with an alternative to flects government financial screens, a person familiar with people have had problems Chongqing in the display industry. It be- Samsung, which Apple com- support for favored industries. the matter said. It has provided but still offers free repairs. came the No. 1 supplier of petes with in smartphones but At four out of five factories Apple with MacBook displays Chengdu (Note: If you get your older large LCD screens last year, up relies on for the OLED screens. that BOE has recently built or since 2015 and iPad displays keyboard serviced, Apple from No. 5 in 2014, according Buying display screens from is currently building in China, since 2016, the person said. Note: As of July 19; 10 billion yuan=$1.48 billon won’t replace it with the to IHS Markit. BOE, which is controlled by local governments contributed —Yang Jie Source: the company new version.) Three com- It is the only Chinese dis- the Beijing city government most of the initial phase of in- contributed to this article. THE WALL STREET JOURNAL. plaints seeking class-action status in California allege Apple knew the keyboard was faulty and continued to Futuristic Travel Ideas Find Platform at Air Show sell it anyway. This brings us back to the new MacBook Pro keyboard. BY ANDY PASZTOR widely dismissed as science engines. airports, at least in a testing of these unconventional proj- Apple’s most substantive AND ROBERT WALL fiction barely a few years ago. But a look at what gener- capacity, he said. “I don’t think ects. Since 2003, closely held change is a thin silicone Such next-generation proj- ated the most excitement in we’re talking decades.” Aerion Corp. has been market- FARNBOROUGH, England— ects are a contrast with the in- Farnborough indicates another Mitch Snyder, president of ing its concept of the fastest Traditional plane deals dustry’s recent fixation on de- future for the industry is com- Textron Inc.’s Bell helicopter business jet ever. This year, grabbed headlines at the Farn- signing and building more ing into view. unit, told reporters he ex- General Electric Co. and A membrane acts as borough International Airshow fuel-efficient planes, such as At a Boeing briefing on the pected several of the com- Lockheed Martin are part of a bellows, blowing this past week. But a handful Boeing Co.’s 787 Dreamliner future of next-generation air pany’s fully autonomous mod- the project. of futuristic air-travel concepts and Airbus SE’s A350 long- transportation, Chief Technol- els would serve military and Executives at Boeing and dust out every time signaled a new excitement range jet. Fast-selling single- ogy Officer Greg Hyslop pre- commercial customers within Airbus have watched entrepre- you press a key. coursing through the industry. aisle jets, variants of the Boe- dicted urban flying vehicles a few years. neur Elon Musk upend the car Global aerospace companies ing 737 and Airbus’s A320 and would be able to transport Skeptics emphasize that business and, much closer to are grappling with new tech- the industry’s workhorses, passengers and goods rela- some of these high-profile con- home, the traditional rocket nology from self-flying planes have been the stars of recent tively soon. Although it isn’t cepts have been touted before, business with the success of membrane attached under- to electrically powered aerial shows. clear whether they would be only to fail. More than a de- his Space Exploration Technol- neath the keys. It does taxis, perhaps the industry’s Those new planes were fully autonomous, or how reg- cade ago, various companies ogies Corp., or SpaceX. dampen sound, at least a lit- biggest tech surge since the dreamed up when the indus- ulators would manage air traf- promised fleets of small pas- SpaceX’s example resonates tle. I’ve found the new Pro’s dawn of the jet age in the late try’s future seemed focused in fic, Mr. Hyslop boldly called it senger planes to serve as air for startups such as Boom keyboard to be quieter, with- 1950s. kerosene-burning, tube-and- a “new era of transportation taxis buzzing between cities. Technology Inc., which is de- out some of the high-end Much of the attention at the wing shaped aircraft; the re- and mobility.” That still hasn’t happened. veloping an entirely business- thwacking of the old model. biennial aerospace jamboree cent technological wizardry of Such craft “are going to Now, though, the biggest, class supersonic airliner. It seems likely, though, that was on still-developing forms such planes is in their fuel start flying around in the next most-respected names in the —Andrew Tangel the purpose of the mem- of air transport that were conservation, range and quiet few years” without requiring industry are piling into some contributed to this article. brane isn’t about decibels. It’s about dust.

ADVERTISEMENT 2016 Apple patent fil- A ing describes a key- board mechanism sim- The Marketplace ilar to the one implemented To advertise: 800-366-3975 or WSJ.com/classifieds on the Pro, describing it as a way to “prevent and/or alle- FRANCHISE viate contaminant ingress.” The new silicone membrane appears to do just that. “It’s pretty obvious that it’s a cover, a raincoat,” says Sa- mantha Lionheart, a techni- cal writer at iFixit, a website dedicated to helping people repair their own tech. It acts as a shield for the tiny but- terfly wings and as a bellows blowing dust out every time you press a key.

GLEN WILSON/COLUMBIA PICTURES/EVERETT COLLECTION If Apple were to acknowl- Denzel Washington’s action movie narrowly beat the ABBA jukebox musical at the weekend box office. edge the membrane’s dust benefits, that would require admitting there was a dust ‘Equalizer’ Edges Out ‘Mamma Mia’ problem with a keyboard it BUSINESS OPPORTUNITIES BUSINESS OPPORTUNITIES continues to sell on less Associated Press costly MacBooks. SUCCESSFUL COSMETIC BOTTLE Investment Opportunity Estimated Box-Office Figures, Through Sunday The new design does For Accredited Investors ASSET SALE In the battle of two very make a difference, though. In MAJOR PROFITS/50 MILLION UNITS SOLD SALES, IN MILLIONS $10.9 Million 5% Conv Preferred different sequels at the box of- my testing, which largely in- $475,000 ALL TOOLING READY fice over the weekend, Denzel FILM DISTRIBUTOR WEEKEND* CUMULATIVE % CHANGE volved pouring Cheetos dust Established Co. – Potential IPO WEBSITE: WWW.CHLOEE.COM Washington’s action movie all over my keyboard (by ac- 14 Patents - 93% Gross Profit CONTACT DR. GREEN 1. The Equalizer 2 Sony $35.8 $35.8 -- Call for Details: (561) 331-1012 (310) 600-5052 OR [email protected] “The Equalizer 2” narrowly cident, of course), the new won out over the ABBA juke- 2. Mamma Mia! Universal $34.4 $34.4 -- Prodidaprettygoodjobof  box musical “Mamma Mia! HereWeGoAgain keeping crud out. Some rem- www.earn11.com    Here We Go Again.” 3. Hotel Transylvania 3 Sony $23.2 $91.1 -47 nants still made it under the    Studios on Sunday esti- keys, but nothing stopped 4. Ant-Manandthe Wasp Disney $16.1 $164.6 -45 EARNup to11%          mated that the R-rated Denzel my keys from working. Ms. INVESTING IN 1st MORTGAGES          Washington film grossed $35.8 5. Incredibles 2 Disney $11.5 $557.3 -29 Lionheart came to the same Short Term, High Yield, Low LTV.        Secure & Great Monthly Income.   !   " million from North American *Friday, Saturday and Sunday Source: comScore conclusion in her tests, Call 800-359-1111    theaters for the weekend. It which were decidedly more was the biggest opening of di- scientific. Co. w/Patented ENGINE DIAPER product- Oil Field Supply Store For Sale rector Antoine Fuqua’s career. Cher, Andy Garcia and Lily third with $23.2 million in its It’s an improvement. But line. World’s only proprietary devices for OKLAHOMA AREA The first “Equalizer,” from James to the mix. Critics over- second weekend, “Ant-Man and it’s still far from my favorite 24 YEARS IN BUSINESS oil-leakingvehicles.TheseEnvironmentalde- 12-13M ANNUAL SALES 2014, opened similarly and all gave the sequel better marks the Wasp” took fourth place laptop keyboard. I much pre- vices prevent water pollution by absorbing OIL FIELD EQUIP went on to earn over $190 mil- than the first, which still went with $16.1 million in its third fer typing on Microsoft’s engine oil leaks. $3/$5 milion sales 1st yr. OVER 150 CUSTOMERS lion world-wide. on to gross over $600 million weekend, “Incredibles 2” Surface Laptop or the Google $50 mil yr in 4/5 yrs. www.oildiaper.com Larry Aspegren, Aspen Comm’l Realty Second place went to Uni- world-wide 10 years ago. landed in fifth with $11.5 mil- Pixelbook. If you do buy a Email: [email protected] 405 213 6473 [email protected] versal Pictures’ “Mamma Mia It is also a rare showdown lion, and “Jurassic World: MacBook Pro, I recommend 2,” which took in $34.4 million, of two star-driven films that Fallen Kingdom” came in sixth looking at Logitech’s $200 12-25% Return a sum that was driven by an succeeded in targeting two with $11 million. Craft keyboard, which is a THE MARKETPLACE Secured Short Term, High Yield , audience that was 83% female very different audiences. The other big opener, “Un- joy to type on. It can simul- ADVERTISE TODAY Monthly Income and 64% over the age of 25. Sequels powered the top six friended: Dark Web,” also a se- taneously control other de- LEARN HOW TO: Invest in 1st Mortgages (800) 366-3975 And Double Your Money Every 3-5 years. The film brought back much of spots at the domestic box office quel, scared up $3.5 million for vices, so you can use type on 100% FREE 24HR INFORMATION the original cast, including and eight out of the top 10 ninth. The only two originals in your phone, iPad and laptop © 2018 Dow Jones & Company, Inc. Meryl Streep, Amanda Seyfried overall. “Hotel Transylvania 3: the top 10 were “Skyscraper” without moving your hands All Rights Reserved. Call 866-278-3231 and Pierce Brosnan, and added Summer Vacation” came in and “Sorry to Bother You.” off the keyboard. B8 | Monday, July 23, 2018 ** THE WALL STREET JOURNAL. MONEY & INVESTING Pimco Official Quits Following Inquiry

An internal review manager, stepped down fol- Mr. De Leon held a critical A wave of allegations of mis- reer at Pimco, overseeing wrote in the same memo that lowing a weeklong internal in- position at Pimco, overseeing conduct by high-powered exec- teams that manage about $80 Mr. De Leon was resigning “to into allegations of vestigation into his alleged risk controls at a firm with utives and politicians has billion in assets. spend more time with his inappropriate behavior behavior at a May 2017 char- more than $1.7 trillion in as- pushed companies large and He also logged stints at family.” ity event in New York, the sets. small to act more decisively to Salomon Brothers, Long-Term Mr. De Leon joined Pimco spurs resignation people said. While the gather- The team he led has a win- root out instances where their Capital Management and GLG in 2007, serving as a portfolio ing wasn’t a Pimco event, it dow into nearly every invest- own are accused of misbehavior. Partners, where he over- manager focusing on deriva- BY JUSTIN BAER was attended by several em- ment the firm makes. They Reached on Sunday, Mr. De lapped with Pimco’s current tives and absolute-return in- ployees of the firm. monitor portfolio managers’ Leon said: “I resigned from chief executive, Emmanuel vestments before heading up A senior Pacific Invest- At the event, Mr. De Leon trades, ensuring they stayed the firm to spend more time Roman. risk management. ment Management Co. execu- allegedly touched inappropri- within the risk parameters set with my family.” He declined “Sudi has served in a wide Pimco’s human-resources tive resigned on Friday after ately a lower-ranking Pimco by each fund and safeguard- to comment on the details of range of risks seats globally department, led by co-Chief facing allegations he acted in- employee, one person said. In- ing investors’ money from po- the allegations. and managed teams and pro- Operating Officer Robin Sha- appropriately toward a col- vestigators didn’t present Mr. tential losses. Pimco moved quickly to re- cesses during some of the fi- nahan, opened the investiga- league, people familiar with De Leon on Friday with any Mr. De Leon had served in place Mr. De Leon, appointing nancial industry’s most-chal- tion into Mr. De Leon’s behav- the matter said. other allegations of improper that senior role since 2009, portfolio manager Sudi Mari- lenging periods,” Mr. Roman ior about a week ago after Bill De Leon, head of port- behavior, the person said. outlasting many of the execu- appa as the firm’s top risk and investment chief Dan Messrs. Roman and Ivascyn folio risk management and a It is unclear if he denied tives to whom he once re- manager on Friday. Ivascyn wrote Friday in a learned of the allegations, ac- managing director at the the allegations to the firm on ported, including former in- Mr. Mariappa has spent memorandum to employees. cording to the people familiar Newport Beach, Calif., bond Friday. vestment chief Bill Gross. nearly half of his 31-year ca- Messrs. Roman and Ivascyn with the matter. The Blind Spot in Financial Reports

BY MICHAEL RAPOPORT Group Effort There is a blind spot in Walmart’s primary auditor is the U.S. regulators’ oversight of U.S. firm of Ernst & Young, but audit firms—and it could many other EY country affiliates, mean investors in companies including China’s, helped with the such as Walmart Inc., Pfizer audit work. Inc. and 3M Co. are vulnera- ble. Percentage range of audit work Big Four accounting firms performed by each firm use their Chinese and Hong Kong affiliates to do signifi- EY China 10% 20% cant work on the yearly au- dits of dozens of U.S. compa- EY Brazil 10% 20% nies doing business in China, including Walmart, Pfizer EY Mexico 5% 10%

MISHA FRIEDMAN/BLOOMBERG NEWS and 3M, according to regula- tory disclosures the auditors EY U.K. 5% 10% recently made for the first time. Other* 5% 10% That is a potential prob- lem because the Chinese gov- *Total work on the audit done by ernment has for years 15 other unnamed audit firms. Paul Singer’s Elliott Management has bought Windstream bonds, betting that the company will win its case in court. blocked U.S. regulators from Source: Ernst & Young filing with Public inspecting the Chinese and Company Accounting Oversight Board Hong Kong firms, which are THE WALL STREET JOURNAL. Funds Face Off on Windstream Debt separate entities from their U.S. counterparts—even said Paul Gillis, a professor though the regulators rou- at Peking University’s Guan- BY SOMA BISWAS tinely inspect U.S. audit firms ghua School of Management and making money on dis- ber-optic cable network into Windstream bonds, according and others involved in audit- in Beijing. Two heavyweights of dis- tressed debt, is joined by other a separate company called to public documents. ing U.S.-traded companies. KPMG said it remains tressed-debt investing will Windstream bondholders, in- Uniti Group Inc. in 2015. Au- Windstream, based in Little The arrangement could hopeful discussions between face off this week over Wind- cluding BlueMountain Capital relius claims that, as a result, Rock, Ark., has been losing leave investors in some of U.S. and Chinese regulators stream Holdings Inc. Hedge and J.P. Morgan Asset Man- it is owed full repayment on residential and business cus- the world’s largest multina- will result in an agreement to fund Aurelius Capital Man- agement, according to people its bonds plus interest—a tomers to cable and wireless tionals feeling like they can’t allow inspections of Chinese agement is looking to profit familiar with the matter. sum of $371 million. Wind- companies for years and has have full confidence that the firms. EY, PwC and the fourth from the internet provider’s Elliott and Aurelius share a stream has said such an ad- slowly been replacing its cop- auditors who scrutinize the Big Four firm, Deloitte precarious financial position, history. The firms joined verse ruling will push it into per network with faster fiber- companies’ finances have Touche Tohmatsu, declined while Elliott Management forces to win a 15-year battle bankruptcy. optic cables. themselves been fully vetted to comment. Corp. is betting it will stay Windstream’s lawyers claim Aurelius says Windstream’s by U.S. regulators. And the The U.S. Public Company afloat. that Aurelius has a position in spinoff is really a sale-lease- regulators have no way of Accounting Oversight Board Aurelius Capital Manage- Windstream bond insurance back agreement that is prohib- knowing whether those com- regularly inspects firms that ment, founded by former A default on one bond and is pushing for a default ited by the company’s bond panies’ tens of billions of audit U.S.-traded companies bankruptcy lawyer Mark Brod- could potentially just so it can collect on instru- covenants. Uniti’s cable net- dollars of Chinese business to assess their performance. sky, is known for winning big ments known as credit-default work remains essential to has been subjected to outside The Big Four audit networks bets on distressed corporate trigger defaults swaps, according to court doc- Windstream’s business, and, scrutiny to help prevent er- are comprised of separate bonds and sovereign debt. on $6 billion of debt. uments. under a 15-year lease, Wind- rors or fraud. member firms in each coun- This time, Aurelius is betting In its own filings, Aurelius stream pays $650 million a Walmart, which has over try, which the PCAOB sepa- against Windstream, people hasn’t said whether it has a year to Uniti. 400 stores in China, is pri- rately inspects. familiar with the matter said. position in Windstream bond Windstream’s lawyers, in marily audited by the U.S. But China won’t allow in- Aurelius in September sent to get Argentina to pay them insurance and has stuck to its defense of the deal, rely on the arm of Ernst & Young, but spections of firms there be- Windstream a letter accusing back in full on defaulted arguments about the com- fine print of the bond cove- EY’s Chinese affiliate did 10% cause of what U.S. regulators the company of defaulting on bonds. But Aurelius’s push for pany’s spinoff violating bond nants. The company says to 20% of the work on the say are China’s sovereignty a bond when it spun off its fi- a Windstream default means covenants. Windstream Services, the sub- company’s latest audit, ac- concerns and a view that au- ber-optic cable business. The Mr. Brodsky is now on the op- Elliott and BlueMountain sidiary that issued the bonds, cording to an EY filing with dit firms hold sensitive fi- move violated a provision in posite side from Elliott, the have made various bets that isn’t party to the lease with regulators. Pfizer, which got nancial information about the company’s bond docu- firm where he got his start. Windstream will win its case. Uniti. It is the parent com- 7% of 2017 revenue from Chinese business akin to ments, Aurelius said. The legal fight will come to The funds have bought Wind- pany, Windstream Holdings, China, is primarily audited by state secrets. A default on one bond could a head Monday, when a trial stream bonds as well as debt that signed the lease and pays KPMG’s U.S. firm, but KPMG A spokeswoman for the potentially trigger defaults on kicks off before Judge Jesse and equity stakes in Uniti, say the rent to Uniti. Nothing in China did 5% to 10% of the PCAOB, which has tried un- $6 billion of debt. M. Furman in U.S. District people familiar with the mat- the Windstream Services bond work. Walmart declined to successfully to get China to On the other side is Paul Court in New York. Wind- ter. Keeping Windstream out documents forbids Wind- comment; a Pfizer spokes- allow inspections, said it is Singer’s Elliott Management, stream is asking the court to of bankruptcy is key to pro- stream Holdings, the parent, woman wasn’t available to “considering how best to en- which has bought up Wind- void Aurelius’s declaration of tecting those investments. from entering into a sale- comment. sure that the audits of U.S.- stream debt. Elliott, equally default. J.P. Morgan Asset Manage- leaseback deal with Uniti, the The issue could grow more traded companies are subject adroit at navigating the courts Windstream spun off its fi- ment is also a large holder of company says. topical now that investors to a consistent level of over- are homing in on companies’ sight.” efforts in China due to the Regulators want to moni- escalation of trade tensions. tor Chinese audit firms Ex-CFTC Chief Sizes Up New Risks Concerns about the lack of partly because of concerns China audit inspections have several years ago about the previously arisen regarding accounting and transparency BY GABRIEL T. RUBIN Eventually we addressed that U.S.-traded Chinese compa- of U.S.-listed Chinese compa- as a nation and brought it into nies that employ Chinese and nies they audit. The SEC A decade after the financial the public-policy envelope.” Hong Kong firms, including barred more than 180 compa- crisis, The Wall Street Journal Mr. Gensler, 60 years old, affiliates of the Big Four, as nies from U.S. trading and has checked in on dozens of the says he has no plans to get in- primary auditors. The audits filed dozens of enforcement bankers, government officials, volved in the 2020 presiden- of those companies, including cases against the companies, chief executives, hedge-fund tial campaign or the 2018 mid- Alibaba Group Holding Ltd., their auditors and other managers and others who left a terms, other than serving as aren’t subject to U.S. inspec- gatekeepers. mark on that period to find out an informal adviser to Demo- tion, either; Alibaba’s pri- The Chinese Big Four were what they are doing now. We crats who want to pick his mary auditor is Pricewater- long believed to be helping spotlight the former chairman brain on various issues. houseCoopers’ Hong Kong U.S. firms in auditing U.S. mul- of the Commodity Futures Trad- He has also made himself affiliate. Alibaba declined to tinationals. But that wasn’t ing Commission, Gary Gensler. available to policy makers of comment. confirmed until a new PCAOB In the past few years, Gary both parties as they grapple “It does clearly create a rule last year required audi- Gensler went from cleaning up with how to regulate crypto- blind spot which is signifi- tors to disclose other contrib- the fallout from the financial currencies. cant to the capital markets,” utors to an audit. crisis to grappling with the Earlier this month he testi- challenge of cryptocurrencies. fied before a House committee

Mr. Gensler, a former Gold- CHIP SOMODEVILLA/GETTY IMAGES full of members who worked man Sachs Group Inc. partner, Gary Gensler helped craft a new oversight regime for swaps. with him during the financial became chairman of the Com- Today, he has shifted attention to blockchain technology. crisis, but also others who, modity Futures Trading Com- seemingly unaware of his mission in 2009, one of the the time he left the CFTC in In general, Mr. Gensler is work in Washington, called most difficult moments for the 2014, the rule set was largely bullish on blockchain, which he him “professor.” U.S. economy in decades. At complete, years before other says mimics the distributed na- Regardless of whether he the CFTC, he helped craft a regulators wrapped up their ture of society. But he says he re-enters the policy or politi- new oversight regime for the postcrisis work. can’t look at a fast-growing fi- cal arenas again, it will be swaps market, which was Now, Mr. Gensler has shifted nancial technology phenome- hard to top the thrill and re- largely unregulated before to thinking about new frontiers non without a sober assess- sponsibility of running a major playing a central role in the cri- of potential systemic risk and ment of its risks. regulator during the first half sis. financial innovation by lectur- “In the late ’90s, I was part of the Obama administration. The Baltimorean developed ing about blockchain technol- of the broad consensus saying “I don’t think I’ll ever get to a reputation among his col- ogy and cryptocurrencies at certain things, like derivatives do something as meaningful as

leagues for bare-knuckle tactics the Massachusetts Institute of markets, wouldn’t undermine coming in after a crisis and PHILIP TOSCANO/PA WIRE/ZUMA PRESS as he drove to create a regula- Technology’s Sloan School of financial stability,” Mr. Gensler helping to clean it up,” Mr. An Ernst & Young filing says its Chinese affiliate did 10% to 20% tory framework for swaps. By Management. said. “But guess what, it did. Gensler said. of work on Walmart’s latest audit. THE WALL STREET JOURNAL. Monday, July 23, 2018 | B9 HEARD ON THE STREET Email: [email protected] FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard Fed Shouldn’t Ignore Yield Curve OVERHEARD Casinos in

The Federal Reserve isn’t down term premia, just as Build-a-Bear Workshop’s Japan Are a worried about the yield Terming Out they see the glut of central chief executive officer proba- curve, and it has reason why. Term premium on the 10-year Treasury bank holdings driving down bly felt like hibernating after Winning Bet The problem: It is pretty term premia now. As a re- the company’s disastrous 4 percentage points much the same reason it sult, they weren’t all that “Pay Your Age” promotion. Japanese lawmakers last wasn’t worried about the worried about the inverted Customers created dangerous week tightened the country’s yield curve before the finan- 3 yield curve. By the end of crowds in shopping malls na- rules on smoking in restau- cial crisis. 2007, the economy had en- tionwide and were forced to rants. On Friday they re- The yield curve—the dif- 2 tered a recession and they leave mostly empty-handed. moved the final hurdle to- ference between shorter- and were frantically cutting rates. Instead, she is trying again— ward legalizing casino longer-term Treasury yields In the Fed’s defense, it sort of. gambling in the country, —is important for the signals 1 probably was right in 2006 The company tweaked the opening up a potentially it sends about the future of about the cause of low long- program, limiting it to “Bonus massive market. Investors the economy. The curve has 0 term rates. What it missed Club” members during their still have to wait to show gotten awfully flat lately, not was that those low rates child’s birthday month, thus their hand, though. a good sign. –1 droveinvestorstotakeon spreading bargain-hunting vis- Global casino operators The 10-year Treasury more risk—in many cases its throughout the year. Peo- are excited about the pros- 2000 ’05 ’10 ’15 yield, at 2.89%, is just 0.3 risks they didn’t under- ple left bearless in the initial pect of three new casino re- percentage point higher than Source: Federal Reserve Bank of New York THE WALL STREET JOURNAL. stand—to boost yields. July 12 rush were given $15 sorts in Japan. The region the yield on the two-year Today, evidence abounds coupons. hasn’t seen an opening up Treasury. With the Fed on ally fall. Fed policy makers serve Bank of New York esti- —from supertight spreads to The fiasco hasn’t dented this big since Macau in course to keep raising short- don’t seem to think that is mates, if the average term negative yields to high stock the company’s share price, 2002. The Japanese market term rates, it is easy to imag- the risk now. premia that prevailed over valuations to the popularity perhaps because the huge could generate $15 billion in ine the two-year yield rising Rather, they think longer- the past 25 years were in ef- of structured products—that crowds show that the chain annual revenue by 2025, above the 10-year yield. That term yields are lower than fect today, the 10-year Trea- investors are willing to take has plenty of young fans. It Morgan Stanley estimates, is a worrisome, since such they should be because of all sury yield would be about 1.4 risks to capture yield. Since also could be because the more than twice the Las Ve- yield-curve inversions have the bonds purchased by the percentage points higher the financial crisis, the Fed stock isn’t what it once was. gas Strip’s 2017 earnings. been a reliable indicator of Fed and other central banks than the two-year yield. has paid more attention to A few years ago, parents Unlike regional locations coming recession. to prop up their economies. In 2006, the Fed’s view of such dangers. But it appears could have paid their age for catering mainly to Chinese An inverted curve is a sig- They believe that has driven the inverted yield curve was to have a blind spot when it a share of the company’s high rollers, Japanese casi- nal investors believe that the term premia—the extra yield that a global savings glut had comes to the cause of the stock. After a three-year bear nos have a big domestic Fed’s current rate-raising ef- investors demand for the risk pushed down long-term in- flattening yield curve. Ignor- market, you now only have to base. Pachinko outlets gener- forts are going beyond what of lending over a long pe- terest rates. Meeting tran- ing the market’s message be old enough to tie your ated revenue of around $30 the economy can handle and riod—negative. scripts show policy makers seems reckless. own shoelaces. billion last year, similar to overnight rates will eventu- According to Federal Re- believed this had driven —Justin Lahart Macau’s total gambling reve- nue. Goldman Sachs reckons locals will generate half of revenue. But Japan’s first casino Luxury Stocks Look Pricey Even Without a Trade Fight likely won’t open for another “I cannot produce cognac prices, damping demand in market also is looking shaky. five years. Who will run in Texas,” Luca Marotta, Sinking Feeling what has been an extremely For now, sales of cognac them and where are unde- chief financial officer of Currency performance strong market. Cognac is by and expensive handbags re- cided. Operators with experi- Rémy Cointreau, told inves- definition produced near the main very buoyant, in large ence running casino-resorts 6% tors on a Friday call to dis- town of Cognac in southwest part thanks to China. Rémy both in the U.S. and Macau, cuss the latest quarter’s 4 Chinese yuan/euro France, so shifting produc- reported “strong double- like Las Vegas Sands and sales. 2 tion isn’t an option. digit” growth in the country. MGM Resorts, may hope for President Donald Trump’s 0 Still, tariffs seem an out- Handbag maker Hermès an edge. Firms like Sega trade threats are on the side bet. A more concrete said Friday that first-half Sammy and Konami, which minds of every exporter, but –2 risk for Rémy Cointreau and sales in Asia excluding Japan make pachinko and slot ma- the more worrisome trend –4 other high-end European were up 15% at constant ex- chines, are local favorites. for French luxury groups is –6 Chinese yuan/U.S. dollar brands is the depreciating change rates. Such uncertainties make it the falling Chinese currency. yuan. The Chinese currency Rémy Cointreau stock hard for investors to back a FMAMJ J

For the maker of Rémy BALINT PORNECZI/BLOOMBERG NEWS devaluation in 2015 had a trades hands for 35 times winner now. In time, though, Martin cognac, the tariff Source: Tullett Prebon Rémy Martin cognac major impact on luxury sales. prospective earnings and Japan could prove a more question has arisen because The yuan is down almost Hermès stock for 42 times. If reliable earnings machine the European Union last vidson motorcycles and products like cognac get 8% against the dollar since China wobbles, investors than Macau, whose fortunes month retaliated against Mr. bourbon. caught up in the fray? There the end of March, as trade may struggle to justify these have been subject to Bei- Trump’s tariffs on steel and Mr. Trump has threatened is nothing to suggest this concerns have mounted, and kinds of heady valuations— jing’s political whims. That aluminum with taxes on im- tariffs on BMW and Mer- yet. If tariffs are imposed, over the past month it has even without Mr. Trump’s ought to cheer even the un- ports of iconic American cedes cars in response. But however, Rémy would have also plunged against the trade fight. luckiest of gamblers. products: jeans, Harley-Da- could other iconic European no choice but to raise U.S. euro. The Chinese property —Stephen Wilmot —Jacky Wong MARKETS Chicago’s CME Strains to Reflect Shifts in Global Grains BY BENJAMIN PARKIN CME contracts tied to Ameri- wheat have grown to about Still, CME’s agricultural can beans a less useful global Black Sea Bound 20,000 contracts, compared contracts are the world’s most CHICAGO—The world’s gauge, analysts say. Euronext's EU wheat futures emerged as an alternative with almost half a million in popular by far. Open interest largest exchange company is And Russia has surpassed contract closer to Russia and Ukraine. CME’s main Chicago contract. at CME, a measure of partici- struggling to keep up with tar- the U.S. as the world’s top Another introduced last year pation, rose to a record of iffs and a surge in global crop wheat exporter, which can Open interest in wheat contracts* for Australian wheat has at- over 10 million contracts in production that is reshaping make CME contracts for Mid- 2 million contracts tracted some trading. June. Trading volumes also are agricultural trading. western wheat harder to use. CME Chairman Emeritus Leo up, including outside the U.S. CME Group Inc., whose an- CME needs to keep up with Melamed traveled to Ukraine The contracts remain “the tecedents helped invent futures agricultural trade patterns to Chicago Board of Trade around 2010 to attempt to global benchmarks for price contracts in the 19th century, retain customers such as Bunge Euronext Derivatives Market launch wheat contracts there. discovery and risk manage- ties its main agricultural prod- Ltd. and other commodities Others That didn’t work, but he said ment,” said Tim Andriesen, ucts to the value of American merchants, whose businesses 1 CME has to keep trying. CME’s managing director of crops. And while CME’s futures increasingly span the globe. Exchanges in other parts of agricultural products. “While have grown, some say the ex- “You’ve got to go where the the world have gained ground. import and export patterns change risks missing out on grain flows are,” said Bobby In China, the world’s top soy- may shift, the need for manag- the boom in countries, includ- Pelz, a partner at McDonald bean buyer, soybean-oil fu- ing price risk has never been ing Russia and Brazil, which Pelz Global Commodities LLC. tures at the Dalian Commod- more important.” CME derived now export more of some agri- Using crops grown near 0 ity Exchange regularly trade just 11% of first-quarter reve- cultural goods than the U.S. Chicago to set prices for those at higher volumes than CME’s, nue from agricultural com- “It’s a growing problem for grown near the Black Sea in 2000 ’05 ’10 ’15 ’18 though the contract size is modities but still counts crops the CME,” said Dan Basse, Russia and Ukraine, for in- *Three-month moving average smaller. Euronext NV’s futures as an important business line. president of AgResource Co., a stance, can expose traders to Source: Futures Industry Association THE WALL STREET JOURNAL. for EU wheat have also be- CME’s other businesses research firm. discrepancies in weather and come an alternative to CME. have thrived lately. Interest Trade fights are hastening crop quality. Grain trader Ar- dress these shifts, but few did one for South American “There is a clear shift,” said rates and market volatility the shift. China, one of the cher Daniels Midland Co. said have caught on. The exchange soybeans introduced by the Nicholas Kennedy, head of have perked up, which boosts world’s largest crop buyers, it lost more than $20 million company this month delisted Chicago Board of Trade in commodities at Euronext, traders’ need for CME’s finan- has switched much of its soy- trying to hedge Black Sea contracts for wheat from the 2005. The CBT and Chicago which has considered introduc- cial products. Shares of CME bean purchases from the U.S. grain using North American European Union that have Mercantile Exchange merged ing its own Black Sea contracts. are up 16% this year, while the to Brazil. As a result, soybean prices in 2017’s third quarter. failed to attract participants. to form CME Group in 2007. “The Black Sea, Ukraine and S&P 500 is up about 5%. prices have surged in Brazil CME has introduced new A contract for Black Sea wheat Futures introduced by CME Russia are playing a greater —Alexander Osipovich and fallen in the U.S., making agricultural contracts to ad- from 2012 also petered out, as in December for Black Sea role on the trading floors.” contributed to this article.

THE TICKER | Market events coming this week Currencies U.S.-dollar foreign-exchange rates in late New York trading Monday AT&T 0.87/0.79 Mastercard 1.53/1.10 US$ vs, US$ vs, Fri YTD chg Fri YTD chg Existing-home sales Eli Lilly 1.30/1.11 McDonald’s 1.93/1.70 Country/currency in US$ per US$ (%) Country/currency in US$ per US$ (%) Lockheed Martin May, previous 5.43 mil. Americas Europe 3.92/3.23 Friday June, expected 5.45 mil. Argentina peso .0362 27.5996 48.4 Czech Rep. koruna .04531 22.072 3.7 United Technologies GDP Deflator Brazil real .2652 3.7710 13.8 Denmark krone .1573 6.3572 2.5 1.86/1.85 Earnings expected* Canada dollar .7607 1.3146 4.6 Euro area euro 1.1722 .8531 2.4 1.14 1st qtr., final up 2.2% Estimate/Year Ago($) Verizon /0.96 Chile peso .001514 660.70 7.3 Hungary forint .003601 277.68 7.2 2nd qtr. adv. est. up 2.0% US dollar 11 Alphabet 9.66/5.01 Ecuador unch Iceland krona .009410 106.27 2.6 peso .0526 19.0232 Cadence Design Systems Wednesday Gross domestic product: Mexico –3.3 Norway krone .1223 8.1756 –0.4 peso .03210 31.1500 8.2 0.40/0.34 Percentage change, annual rate Uruguay Poland zloty .2714 3.6848 5.9 Mort. bankers indexes Venezuela b. fuerte .000008119850.0001 1158783.6 Halliburton 0.58/0.23 MARK LENNIHAN/ASSOCIATED1st PRESS qtr., final up 2.0% Russia ruble .01582 63.205 9.6 Purch., previous down 5% Asia-Pacific Hasbro 0.29/0.53 Hasbro’s Infinity Gauntlet. Firm reports results Monday. 2nd qtr. adv. est. up 4.2% Sweden krona .1130 8.8510 8.1 dollar Refinan., prev. up 2% Australian .7415 1.3486 5.3 Switzerland franc 1.0076 .9925 1.9 Illinois Tool Works Previous change in stocks in billions yuan .1477 6.7709 Coca-Cola 0.60/0.59 U.Mich. consumer index China 4.1 Turkey lira .2087 4.7927 26.3 1.97/1.69 EIA status report of cubic feet Hong Kong dollar .1274 7.8500 0.5 hryvnia .0380 26.3060 0.79 Previous change in stocks in millions Facebook 1.71/1.32 July, prelim. 97.1 Ukraine –6.5 TD Ameritrade /0.44 up 46 India rupee .01455 68.743 7.6 of barrels Gilead Sciences UK pound 1.3132 .7615 2.9 July, final 97.1 Indonesia rupiah .0000691 14480 7.4 1.56/2.56 Tuesday Crude oil up 5.8 Durable-goods orders Japan yen .008974 111.44 –1.1 Middle East/Africa 0.56 Earnings expected* Gasoline down 3.2 PayPal /0.46 May, previous down 0.4% Kazakhstan tenge .002888 346.30 4.1 Bahrain dinar 2.6459 .3780 0.2 Short-selling reports Estimate/Year Ago($) Distillates down 0.4 Visa 1.09/0.86 Macau pataca .1238 8.0786 0.4 Egypt pound .0559 17.8985 0.7 Ratio, days of trading volume of June, expected up 3.1% AbbVie 1.97/1.42 ringgit .2462 4.0625 0.03 Israel shekel .2756 3.6284 4.3 current position, at June 29 Malaysia New-home sales Thursday Earnings expected* Chevron 2.10/0.91 New Zealand dollar .6808 1.4689 4.2 Kuwait dinar 3.3028 .3028 0.4 NYSE 4.4 rupee sul rial 2.5980 .3849 May, previous 689,000 Estimate/Year Ago($) Colgate-Palmolive Pakistan .00778 128.500 16.1 Oman –0.01 Nasdaq 3.7 Initial jobless claims peso .0187 53.357 6.8 rial .2746 3.641 –0.2 June, expected 670,000 Amazon.com 2.47/0.40 0.77/0.72 Philippines Qatar Previous 207,000 Singapore dollar .7339 1.3626 1.9 Saudi Arabia riyal .2666 3.7503 ... Earnings expected* Amgen 3.55/3.27 Exxon Mobil 1.27/0.78 Earnings expected* Expected 215,000 South Korea won .0008866 1127.90 5.7 South Africa rand .0746 13.4051 8.4 0.60 Merck & Co. 1.03/1.01 Estimate/Year Ago($) Comcast /0.52 Sri Lanka rupee .0062520 159.95 4.2 Estimate/Year Ago($) Phillips 66 2.19/1.09 Close Net Chg % Chg YTD % Chg 3M 2.58/2.58 EIA report: natural gas Intel 0.97/0.72 Taiwan dollar .03271 30.576 3.1 Boeing 3.31/2.55 88.24 –0.63–0.71 Thailand baht .03000 33.330 2.3 WSJ Dollar Index 2.63 dong Sources: Tullett Prebon, WSJ Market Data Group * FACTSET ESTIMATES EARNINGS-PER-SHARE ESTIMATES DON’T INCLUDE EXTRAORDINARY ITEMS (LOSSES IN PARENTHESES) ADJUSTED FOR STOCK SPLITNOTE: FORECASTS ARE FROM DOW Vietnam .00004338 23053 1.5 JONES WEEKLY SURVEY OF ECONOMISTS B10 | Monday, July 23, 2018 THE WALL STREET JOURNAL. MARKETS The Next Test for Stocks: TechEarnings With about 35% of the Market value Facebook’s President Trump criticizes Facebook Amazon’s Alphabet says Facebook’s companies in the S&P 500 set of Facebook, user-data Amazon over the taxes it recovers market value it will invest market value to report quarterly results this controversy pays and its relationship losses from tops $800 $550 million in tops $600 week, investors will get a fresh Alphabet and comes to light. with the U.S. Postal Service. data-privacy billion for the Chinese online billion for the look at whether companies Amazon.com scandal. first time. shopping site first time. JD.com. ranging from automobile Facebook CEO Mark makers to technology giants Zuckerberg testifies have remained on strong S&P 500 closes before Congress about footing. Google parent at all-time high. data privacy. Alphabet Inc., Facebook Inc. FACEBOOK and Amazon.com Inc. are $2 trillion among the most high-profile $608B names on tap. s19% YTD Investors will be watching to see whether those companies can maintain their surging pace of earnings and revenue growth. All three are projected to post double-digit ALPHABET increases for both metrics. The companies, though, $827B have drawn attention from s13% regulators for their growing 1 dominance in their respective industries. Alphabet and Facebook are facing scrutiny over their vast reach and access to personal data, while AMAZON President Donald Trump has $880B lashed out at Amazon’s business practices and s56% economic impact. But those concerns have yet to dent the companies’ share prices. All three stocks have 0 hit a series of all-time highs in January February March April May June July recent weeks, closing at new highs most recently on Tuesday. The S&P 500, Facebook is projected to log another slight uptick in Google’s advertising revenue, which accounts for nearly Amazon’s profit is seen topping $1 billion for the third meanwhile, is 2.5% below its monthly active users when it reports results Wednesday. all of Alphabet's top line, is expected to climb again when straight quarter when it posts results Thursday. The all-time high, and a blowout After facing a number of crises since the 2016 election, the company reports results Monday. Google has online retail giant, which has a reputation for plowing quarter from the tech including widespread data-privacy concerns, the social- maintained its lead in the global market for online ads nearly every dollar it earns into investments, has giants—which have been media company has sought to repair its image among users despite its massive size and growing competition from credited its strong results to its cloud-services and some of the best performers in and advertisers as well as stave off further regulation. rapidly expanding challengers. advertising businesses. the S&P 500 this year—could help propel the index to its Facebook’s monthly active users world-wide Google advertising revenue, quarterly Amazon profit, quarterly first record since January. In billions Projection In billions of dollars In billions of dollars Of the companies in the S&P Projection that have already reported 2.2 2.2 2.0 2.1 2.1 27.2 26.6 27.8 1.9 results, 87% have posted 1.9 24.1 1.6 stronger-than-expected 21.4 22.7 Projection earnings and 77% have beat 1.2 revenue expectations. Earnings are up 21% from the year-earlier period, which 0.7 would mark the second-highest growth rate 2017 2018 2017 2018 2017 0.2 0.3 2018 since the third quarter of 1Q 1Q 2Q 1Q 1Q 2Q 1Q 1Q 2Q 2010, according to FactSet. Sources: FactSet (market value, projected users, projected profit); Google (ad revenue); MKM Partners (projected ad revenue); Facebook (users); Amazon.com (profit) Lauren Pollock and Peter Santilli/THE WALL STREET JOURNAL.

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