36 THE WALL STREET JOURNAL. Monday, July 12, 2010 DJIA 10198.03 À 0.58% Nasdaq 2196.45 À 0.97% Stoxx Eur 600 250.09 À 0.60% FTSE 100 5132.94 À 0.54% DAX 6065.24 À 0.49% CAC 40 3554.48 À 0.46% Euro 1.2635 g 0.35% Pound 1.5110 g 0.33% Acid test: New rules could bring Mass leak of clients’ data pollution cap and trade to a halt confounds Swiss bankers HEARD ON THE STREET THE JOURNAL REPORT 16-19 THE BIG READ 14-15

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Arbitragers take VOL. XXVIII NO. 112 Monday, July 12, 2010 Gazprom: A buy, for now EUROPE europe.WSJ.com Gazprom isn’t feeling the love: At Curiously, Gazprom shares could just 3.6 times 2010 earnings, its From Russia, unloved still gain near term. Futures show haircut on spreads stock is rated even lower than that One-year forward price/earnings the spread between European con- Still haunted by the massacre of disaster-stricken BP. That cheap, multiple, weekly tract prices and spot prices could the Russian gas giant looks attrac- close almost entirely next winter, For some investors, “buying op- is a key problem. Shaky bond mar- tive. Just don’t make it a long-term Gazprom with both at around $8.50 per thou- portunity” is the last thing that kets mean some deals that looked romance. 12 sand cubic feet, says J.P. Morgan. comes to mind after the market’s re- possible early this year can’t be done About 40% of Gazprom’s gas is This should reduce customers’ incen- cent jitters. now. BP is upbeat exported, mostly to Europe, its most 9 tive to shop around, boosting Gaz- Stocks have tumbled since late So when large deals have closed, BP profitable market. But European 6 prom’s market share. Meanwhile, the April, creating some potential to buy such as Exxon Mobil’s $25 billion ac- Union gas consumption fell 6% in recession left Gazprom with spare on the cheap. But merger arbitragers, quisition of XTO Energy, investors 2009. A 13% month-on-month decline 3 output capacity of about 3.1 trillion who trade the stocks of acquisition have had few places to channel the in Gazprom’s gas production in June cubic feet last year, says Barclays targets, have found things getting suggests demand there remains 0 Capital. That is equivalent to almost ever more expensive. weak, says Citigroup. a fifth of EU consumption, so Gaz- Take EV3, whose shares closed at ’05 '06 '07 '08 '09 '10 on cap plans Meanwhile, Europe has been cut- prom can take advantage if demand $22.49 Friday. Assuming a cash offer Financing is a key problem. ting its dependence on Russia by ex- Source: FactSet Research Systems rebounds faster than expected. by Covidien closes at the end of July, panding other supply options, nota- Make no mistake, without a ma- the implied annualized return is just Shaky bond markets mean bly liquefied natural gas. LNG was jor overhaul, Gazprom still looks like 4%. Arbitragers say the yield on such some deals that looked 14% of EU gas consumption in 2009, bic feet, around Gazprom’s price. a bad long-term investment. It rou- a deal would have been at least 50% based on BP data, compared with un- This dynamic affects Gazprom at tinely outspends its cash flow. Its higher, around 6%, back in March. possible early this year can’t der 8% in 2004. Russia’s market home, where prices are set much cash cow, Europe, is weak and is di- The trouble is arbitragers have be done now.

£1.50 as oil gushes share, meanwhile, fell to under a lower by the government. Last year, versifying suppliers. Domestic mar- fewer appealing acquisition targets quarter from 28%. Rising LNG capac- domestic customers paid about one- ket liberalization is slow. to choose from. In the first half, stra- ity and America’s glut of shale gas quarter of European prices. In the near term, however, those tegic buyers made bids worth $260 BY MARK LONG nior Vice President Kent Wells dispersants at the site of the has left cargoes seeking markets. Gazprom has long pressed for investors holding stock in rival Rus- billion for companies worth over cash. said early Sunday that he was leak to break up the escaping Gazprom’s export gas price is this gap to be closed. Despite prog- sian gas producer Novatek especially $500 million each, according to Dea- The risk is that arbitragers will BP PLC’s effort to contain “pleased with its progress.” oil will also continue. mostly linked to oil prices, typically ress, however, Moscow keeps delay- should consider switching into Gaz- logic. These figures exclude private- make huge bets on the few deals the oil flowing from the leak Meantime, BP is in talks The effort comes more with a lag of two or three quarters. ing energy-price liberalization, wor- prom. Novatek trades at nearly 15 equity deals, which are considered around to keep their capital at work. in the Gulf of Mexico entered with Apache Corp. on a deal than 12 weeks after Trans- Customers have recently shied away ried about inflation. And, with the times earnings and is almost entirely more risky. That is even less than the With many funds piled into the same a new stage Saturday, with worth as much as $10 billion ocean Ltd.’s Deepwater Hori- from Gazprom’s relatively pricey gas outlook for European prices now exposed to the domestic market. $309 million of such deals in the targets, pushing down expected re- undersea robots starting work that could include stakes in zon burned and sank, unleash- in favor of cheaper gas in the open lower, the eventual boost to Gaz- Its bigger brother, for all its same period of 2009, when confi- turns, it would only take a single to install a new, tight-fitting BP’s vast Alaska operation, ac- ing the spill that has fouled market. Last summer, for instance, prom from domestic liberalization faults, looks more compelling. dence was dismal. blowup to cause widespread injury. containment cap on the bro- cording to people familiar the coasts of at least four spot gas was $4.25 per thousand cu- looks smaller. —Liam Denning Why the deal dry-spell? Financing —John Jannarone Oman ORBahrain 2 BD 1.50 -Jordan Egypt $1.75 JD2-KuwaitKD1- (C/V) Qatar QR14 - Saudi Arabia SR 14 ken, mile-deep well. with the matter. states and killed untold num- Before the new cap can be Mr. Wells said Saturday bers of creatures. put into place, engineers had that the cap installation For the past several weeks, to remove the more loosely would take four to seven days. the more loosely fitting cap fitting cap that had funneled “If everything went just per- and the Q4000 system have The improbable strength as much as 15,000 barrels a fectly, we’d be there in four managed to keep up to about day to a ship on the surface, days.” BP simultaneously is 25,000 barrels of oil a day out which has now moved off lo- working to bring online a of the Gulf. The new sealing of U.K. government debt cation. BP spokesman Mark third containment vessel. Mr. cap system, plus other mea- Proegler confirmed that un- Wells said oil collection sures, are expected to allow dersea robots successfully re- should start increasing later the recovery of 60,000 to (better than Bunds) moved the cap at about Sunday, with full capacity 80,000 barrels a day in two to 1:30 p.m. EDT Saturday. reached in about three days. three weeks, Mr. Wells said. This means oil is now tem- Mr. Wells said a fleet of Scientists have estimated that Gilts are on a tear. And despite porarily flowing unimpeded oil-skimming vessels had been 35,000 to 60,000 barrels of oil high U.K. inflation, monetary policy Tracking from the well head, though moved into place near the have flowed into the Gulf that appears unresponsive and huge some crude continues to be well site while the well head from the well each day. fiscal challenges, that looks unlikely Government 10-year bond yields siphoned via a separate sys- was uncapped. “We feel we’re to change. tem and flared off from a in a good position to collect Potential deal with Apache While 10-year gilt yields at 3.3% U.K. ship, the Q4000, on the sur- the oil very close to the could help pay claims...... 6 European Pressphoto Agency offer little outright value, they re- 4% face. Of the four-stage process source,” Mr. Wells said Satur- New Orleans lake, viewed as flect a world where regulatory pol- Bosnian women mourn during the funeral of 775 Muslims in Srebrenica. Article on page 5 to install the new cap, BP Se- day. The injection of chemical safe from spill, is hit...... 6 icy, euro-zone troubles and economic German uncertainty are driving cash into 3 gilts. This is a far cry from the start of The Quirk the year, when yields hit nearly 4.3%. 2 Japan voters thrash DPJ The rally has given gilt investors a gain of 6.08% year-to-date, outpacing 2010 even German bonds. BY YUKA HAYASHI government’s postal system Mr. Kan is just the latest The demand-supply picture is Source: WSJ Market Data Group into the nation’s financial- world leader to suffer a set- good. Foreign investors bought £42.1 TOKYO—Japan’s voters services sector, a move that back at the polls, as voters billion ($63.81 billion) of gilts in the handed a stunning rebuke to has been opposed by Japa- world-wide show frustration More energy, three months to April, perhaps di- Inflation, consistently underesti- the ruling Democratic Party nese and U.S. financial firms with their governments amid versifying away from troubled south- mated by the Bank of England, may of Japan, just 10 months after worried about tougher com- continuing economic and fi- fewer emissions. yet cloud the picture. There are Czechmates: New breed of giving the party the keys to petition from the publicly nancial turmoil. British voters signs of inflation expectations drift- women politicians bare government in a historic subsidized behemoth. tossed out the long-ruling La- With technology Today’s 10-year yield of ing upwards. almost all for new, racy transfer of power. The bigger-than-expected bour Party in May, Australia’s But to avoid harming a nascent calendar. Page 33 Sunday’s vote seems likely defeat will hurt Mr. Kan’s unpopular prime minister was 3.3%isafarcryfromthe recovery, rates seem unlikely to rise to usher in a new period of standing within his ruling forced out in June in a power we can do both. start of the year, when soon. political instability in Tokyo, party, just five weeks after he struggle in his ruling party The balance between expansion- World Watch making it difficult for Prime took office, and could fuel and polls suggest U.S. Presi- To meet growing demand, the world yields hit nearly 4.3%. ary monetary policy and contrac- Minister Naoto Kan to move challenges to his leadership dent Barack Obama’s Demo- will need all economically viable tionary fiscal policy may keep gilt A comprehensive rundown of forward on key policy mat- in coming weeks. Mr. Kan fol- cratic Party could get energy sources—while also mitigating yields low until it is clear which side news from around the world. ters, such as curbing the gov- lows four prime ministers roughed up this November. emissions. ExxonMobil is developing ern Europe. U.K. banks also have is winning. Pages 34-35 ernment’s massive outstand- who failed to hold on to the But the DPJ’s troubles also been buying to build liquidity buffers One option is to bet on further ing debt to prevent a office for longer than a year. are of its own making, as two technologies to help address this ahead of new regulatory require- curve flattening. If rate-rise pres- Greece-style meltdown, or At a post-midnight news con- party leaders faced financial challenge today and for the future. ments, soaking up £34 billion in the sures build, two-year yields should implementing an unpopular ference, Mr. Kan was asked scandals, and Mr. Kan’s pre- Editorial Learn more at exxonmobil.com first quarter, says Monument Securi- rise more sharply than 10-year rates. agreement with the U.S. on directly if he would step decessor stepped down after ties. If the economy suffers from auster- & Opinion siting a marine base on the down, a notion he rejected, his indecisive handling of the Meanwhile, prospective supply ity instead, two-year rates will re- southern island of Okinawa. saying: “I will humbly accept Okinawa issue. has fallen to £165 billion and £62 bil- main anchored while 10-year yields South Africa, after the The new weakness also is the latest result... And I will Japan’s major television lion has been sold in just over three could fall further. vuvuzelas go quiet. Page 12 likely to stall a controversial start anew from a new start- networks all forecast that the months. —Richard Barley push to expand the role of the ing line.” Please turn to page 9 2 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 35 PAGE TWO BUSINESS WATCH

iii iii and Jeep Wrangler models over agency prepares to unveil the re- the “quality and competence of Autos potential defective brake tubes, sults of an inquiry into banks’ ac- the board” and will urge changes Pharmaceuticals Poland’s determination for reform What’s according to the National Highway counting for borrowing deals in its make-up. The person de- n Fiat is going ahead with a €700 Traffic Safety Administration. The known as repurchase agreements. scribed directors’ response to the n FDA staff scientists continued million ($885 million) plan to shift tubes could lead to the loss of spill as “disastrous.” to question the safety of Glaxo- News some car production to Italy from brake fluid. Ford is recalling n U.S. state and federal regula- SmithKline’s diabetes drug Avan- n Slovakia balked at plans Poland, even though its demands 33,728 of its 2010 Transit Connect tors closed four banks in Mary- n The heads of Anadarko Petro- dia, agency documents show. The may be a model for the rest of Europe for a $952 billion bailout for new working conditions at the vans to replace pushpins holding land, New York and Oklahoma, leum and Mitsui’s oil-exploration documents were prepared for an package for troubled euro- plant were rejected by many the overhead material in the head- bringing the total of U.S. bank unit will testify before a U.S. Sen- FDA advisory panel meeting this [ Agenda ] rate in about a decade, which saw zone members, delaying the workers. Fiat announced its deci- liners. failures this year to 90. ate subcommittee July 22 on their week that will discuss Avandia’s growth at around 5% annually start of the rescue plan. sion after its chief executive, Ser- iii liability in the Gulf of Mexico oil safety and vote on whether it according to CIA reports. Prime Minister Radicova gio Marchionne, met with union n Citigroup said it has received spill. The testimony will be the thinks Avandia should remain on BY IRWIN STELZER Most investors expect that soft plans to fly to Brussels on leaders who had accepted the de- Aviation approval from the Indonesian first time executives of BP’s part- the U.S. market. patch to be nothing more than Monday to outline her coun- mands. Marchionne urged the only stock exchange to broker equities ners in the Macondo well will give iii America was a that. Magdalena Polan, senior try’s objections. 4 major union to reject the agree- n Boeing submitted its attempt to in the country. The seat will en- lawmakers their view on their re- big loser in the European economist at Goldman ment—Fiom-Cgil—to reconsider win a contract to provide the U.S. able Citigroup to offer local and sponsibility for the recovery from Sports recent Polish Sachs, notes that “easy financial n The number of U.K. com- its position, saying the plan would Air Force with new aerial refuel- international clients direct access the spill that resulted from the presidential conditions, strong domestic and panies collapsing has fallen help Fiat stay competitive at a ing tankers. Boeing’s move comes to the Indonesian stock market. burning and sinking of Trans- n A.S. Roma’s owners will put the election. The Law external demand strengthened by to pre-credit-crisis levels as global level. after rival EADS submitted its Citi, which started operating in ocean’s Deepwater Horizon rig. Italian football club back up for and Justice Party’s the increased competitiveness firms and lenders work to own proposal to the Air Force. Indonesia in 1968, already has iii sale after reaching a deal with pro-American Jaroslaw Kaczynski that followed [the zloty’s] manage liabilities, according n Peugeot-Citroën and China’s The winner of the contract stands sales and trading in foreign ex- their biggest creditor, UniCredit, lost his presidential bid to more depreciation and a recovery in the to a new Deloitte survey. 4 Chang’an Automobile Group cre- to gain tanker orders worth a po- change, fixed income, credit and Financial services to pay back €325 million ($411 Europe-oriented Bronislaw rest of Europe have been growth- ated a joint venture to make and tential $35 billion. This marks the commodities in the country. million) of debt. After a final n n Komorowski’s Civic Platform. supportive.” She is expecting the Stocks in the S&P 500 are market passenger cars and light third time the U.S. has sought iii Rory Tobin, the chief executive round of talks, the Sensi family Mr. Komorowski knows that Polish economy to grow 3.5% this moving more often in the commercial vehicles. The move is bids for the tanker, making it one of BlackRock’s iShares unit, has agreed to put its stake in the club

Barack Obama sacrificed the Associated Press year — in line with the same direction and at the designed to allow the French com- of the longest-running and most Energy resigned, according to a source into a new company for which missile defense system he had Bronislaw Komorowski is committed to economic reform. Organization for Economic same time than at any time pany to cash in on the booming controversial Pentagon acquisition with knowledge of the situation. UniCredit will look for a buyer. promised Poland in pursuit his Cooperation and Development’s since the 1987 crash, which is Chinese automobile market and projects in recent memory. Tobin said he was leaving iShares, iii goal of a “reset” to U.S. relations both within Poland and in the EU, system; advance the retirement forecast for the country — and making it harder for stock make it a major player. It is also n BP is in talks with U.S. indepen- the largest seller of exchange- with Russia. And that Mr. Obama the presidency of which Poland age; reform health care; proceed 4.6% in 2011. The latter figure, pickers to shine. 21 part of Peugeot-Citroën’s strategy n U.S. air-safety regulators or- dent oil and gas producer Apache traded funds globally, as he had Technology failed to visit NATO-ally Poland on will occupy next July. with privatizations; reduce farm however, might prove to be a to reduce its dependence on the dered stepped-up inspections or on a deal worth as much as $10 completed the integration of his trips to Europe. But he does face two hard supports. bump due to scheduled EU-funded n Greece will auction its mature European market for the replacement of certain cockpit billion that could include stakes in iShares into BlackRock, which n Google said China’s government Which explains the desire of facts: parliamentary elections are We will have to wait until the infrastructure spending, says Mr. first Treasury bills Tuesday bulk of its sales and profits. windows that since the 1980s have BP’s vast Alaska operations, ac- bought iShares last June as part renewed a license the company Poland’s new president to improve coming up next year, and Mr. parliamentary elections are Belka. since accepting a bailout. 21 caused at least 11 fires or smoke cording to people familiar with of its acquisition of Barclays Glo- needed to continue using its Chi- his nation’s ties to Europe rather Kaczynski made a surprisingly completed in October to find out The Center for Social and n Toyota President Akio Toyoda incidents on widely-used Boeing the mater. A deal, which would go bal Investors from Barclays. Tobin nese Web address, despite months than maintain the rigidly strong showing, garnering 47% of whether Mr. Komorowski has the Economic Research is also n The leaders of Turkey, said his company will look for jet models. The directive, made a long way to helping BP cope will be replaced by Mike Latham, of tensions over censorship re- Atlanticist policy of his votes to push through his reforms optimistic. Its economists are Serbia and other Balkan na- more partners in alternative fuel public by the Federal Aviation Ad- with the financial stress of paying the current head of the iShares quirements. The decision pre- predecessor, and to improve and, if so, whether he is willing to predicting that unemployment will tions gathered to commemo- technology, after buying a minor- ministration, affects more than for the clean-up of the Gulf oil business in North America. serves the search giant’s toehold relations with his Russian It has been Poland’s fate spend a not insignificant amount fall from about 12% to the 10% rate the 15th anniversary of ity stake in Tesla Motors last 1,200 jets manufactured by Boeing spill, could be reached in the com- iii in the country with the most In- neighbor. Despite the made-in- of political capital to do so. range by the end of next year, and the Srebrenica massacre. 5 month. Toyota and Tesla are and flown by U.S. airlines. ing weeks, although there is no ternet users. But it won’t end the Greece upset to the euro, Mr. through the centuries to In any event, he cannot ignore real wages will rise at annual rate working on a prototype of an elec- guarantee it will succeed, one of uncertainty around Google’s fu- iii Health Komorowski holds to his plan to matter more than a tiny the nation’s constitution, which of 2.5% this year and even faster tric car, and Toyota is investigat- these people said. ture there, because Beijing may trade in Poland’s zloty for the requires spending cuts if debt hits in 2011. If promising shale-gas ing Tesla’s use of small low-cost Banking n BC Partners and Silver Lake revoke the license at any time or euro, although not immediately. country should 60% of GDP. It is now 55% and projects prove out, growth might Inside batteries, which differ from the n Calpers, the biggest U.S. public Partners have agreed to purchase block access to Google’s services. America’s president has invited rising. Or the warning of Marek be even more rapid. Japanese auto maker’s larger- n Bank of America admitted to pension fund, will be conferring health-care business MultiPlan in his new Polish counterpart to visit Belka, governor of Poland’s central It has been Poland’s fate scale batteries, Toyoda said. making six transactions that in- with BP officials next Wednesday a transaction that values the com- n Microsoft and Fujitsu have de- him at the White House, to the vote. The loser campaigned on bank. Mr. Belka told Bloomberg through the centuries to matter correctly hid from view billions of amid criticism from some institu- pany at $3.1 billion. Carlyle Group cided to team up in cloud comput- discuss Mr. Komorowski’s plan to a platform of raising benefits for Businessweek that failure to more than a tiny country should. n Ford and Chrysler are volun- dollars of debt, following a bid to tional investors that the BP and Welsh, Carson, Anderson & ing, and will likely announce the withdraw Poland’s troops, the the elderly and increasing the attack the deficit might make it It still matters, even though its tarily recalling more than a com- cut the size of a unit’s balance board’s response to the spill has Stowe are selling MultiPlan, mak- tie-up this week, a person familiar seventh-largest contingent, from minimum wage and took 59% of difficult for Poland to roll over over-$500-billion GDP is only a bit bined 55,800 vehicles in the U.S. sheet and meet internal financial been too passive. A person famil- ing the deal the year’s largest so- with the matter said. The alliance Afghanistan. the rural vote. No deficit hawk, some $62 billion in debt coming more than one-third that of due to safety concerns. Chrysler is targets. The disclosure, made in a iar with the situation said the Cal- called secondary buyout, in which between the U.S. software giant Both men will welcome the he. due in 2011 and 2012, and lead the California’s. recalling 22,118 of its 2010 Dodge letter to the Securities and Ex- ifornia Public Employees’ Retire- a company is passed from one pri- and the Japanese technology ser- traditional photo-op such visits Many of the reforms Mr. markets to see it as “a bad Now, it might matter in a more Nitro, Dodge Ram, Jeep liberty change Commission, comes as the ment System is concerned about vate-equity group to another. vice firm comes as IT industry produce. Especially Mr. Obama. Komorowski has in mind have performer.” pleasant way than in the past. A players world-wide are pinning After all, congressional elections earlier been passed by the At the moment, “The economy successfully reformed Polish their hopes on the expected diffu- are looming, and a significant legislature, only to be vetoed by is going through a soft patch,” economy might serve as an Cleveland prepares itself for post-LeBron era following basketball superstar’s departure sion of next-generation computing number of Polish voters are Mr. Kaczynski’s twin brother, observes the Center for Social and encouraging model for other EU services that are accessed online. concentrated in several key Lech, president until his death in Economic Research in Warsaw. countries, especially since the Now Facebook is congressional districts, not least an airplane crash on April 10. This after Poland, with some reformers will have overcome touting friendship n NTP, a company founded by among them several in Mr. The reform list is basically no backing from the International important entrenched reactionary Thomas Campana—who NTP Obama’s home town of Chicago, different from the one being Monetary Fund and a generous forces, not least among them the for selling. 31 claims was the inventor of wire- which has the largest Polish drawn up across Europe: curtail influx of European Union cohesion nation’s farmers and its less email—filed a lawsuit against population outside of Warsaw. the fiscal deficit (in Poland’s case, funds since 2004, avoided the pensioners. Apple, Google, HTC, LG Electron- Mr. Komorowski, like Polish running at around 7% of GDP); recession that racked most of —Irwin Stelzer is a director of ics, Microsoft and Motorola over Prime Minister Donald Tusk, is reform labor markets; fill the Europe last year. It grew at an economic-policy studies at the eight patents related to the wire- committed to economic reform black hole in the state pension annual rate of 1.7%, the lowest Hudson Institute. less delivery of email to cell- phones. NTP, which holds a num- ber of patents but doesn’t manufacture any products, in ONLINE TODAY 2006 got a $612.5 million settle- ment from Research In Motion to Most read in Europe The Source Continuing coverage Question of the day prevent a potential injunction of blogs.wsj.com/source its BlackBerry smartphones. Vote and discuss: Should ‘Most stock market governments use data The greatest of n Apple opened its second store football’s World Cup in China, the beginning of a major technical analysis that may have been retail expansion for the company stolen to pursue tax greats. 32 in a huge market where it has so far had a relatively meager pres- sits on the same shelf evaders? ence. Hundreds of people lined up to be among the first to enter the Vote online today at wsj.com/polls THE WALL STREET JOURNAL EUROPE as astrology...’ (ISSN 0921-99) 1,500-square-meter underground 1. The Submarine Deals That Commodity Quay, East Smithfield, store in Shanghai, China’s wealthi- Helped Sink Greece London, E1W 1AZ est city. 2. Limbaugh Gets Millions on Sale Alen Mattich on how the market’s rally SUBSCRIPTIONS, inquiries and address changes to: Previous results Telephone: +44 (0) 20 3426 1234. Calling time from iii 3. Opinion: Google With Chinese is likely to prove short-lived. 8 a.m. to 5 p.m. GMT. E-mail: [email protected]. Characteristics Q: Who do you think will Website: www.services.wsje.com ADVERTISING SALES worldwide through Dow Jones Telecommunications 4. U.S. Lags in Job Growth win the World Cup? Spain International. Frankfurt: 49 69 9714280; 5. 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Once registered, redeem future reaction after last night’s Registered as a newspaper at the Post Office. daily codes at: Spain Trademarks appearing herein are used under license from Associated Press WSJ.com wsj.com/accessrenew World Cup final at Dow Jones & Co. ©2010 Dow Jones & Company. All 53% rights reserved. Editeur responsable: Patience Wheatcroft Workers dismantle the 10-story-tall billboard of LeBron James, a Nike ad that has become a fixture in downtown Cleveland, days after the leader of the Cavaliers To read more about these items, Today’s code is: DJCOMPMO-aaabt0go wsj.com/worldcup M-17936-2003. basketball team announced in a one-hour TV special that he was leaving town for the Miami Heat, where he will join fellow superstars Dwyane Wade and Chris Registered address: Boulevard Brand Whitlock, 87, 1200 and for all the latest breaking Brussels, Belgium Bosh. Local perceptions of James, 25, who grew up in nearby Akron, Ohio, and has spent in entire life in the area, have turned him from a hometown hero to villain news,gotoWSJ.com/Business because of his decision to leave Cleveland before bringing a championship title to the city—a goal that James reiterated as recently as March. 34 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 3 WORLD WATCH NEWS In Nagoya, sumo tournament opens under cloud of controversy U.S. steps up cycling probe

BY REED ALBERGOTTI cerning the U.S. Postal Service team, AND VANESSA O’CONNELL but the probes may include other riders and teams in the U.S. and A federal probe into doping in other countries, according to people professional cycling is proceeding familiar with the situation. quickly, and investigators are cur- In Mr. Landis’s emails, which rently in discussions with several were first published in The Wall riders and their attorneys to secure Street Journal, he admitted doping their cooperation after the Tour de himself and described the methods France ends later this month. he said he had seen while riding for The U.S. criminal investigation, the U.S. Postal Service cycling team which is being led by the Food and and with the Phonak team. Drug Administration, isn’t aimed at In later interviews with the Jour- prosecuting rank-and-file riders who nal, Mr. Landis said he had seen Mr. used performance-enhancing drugs Armstrong and several other riders during their careers, according to take prohibited blood transfusions people familiar with the investiga- and receive them himself during the tion. Rather, it is designed to poten- 2004 Tour de France. tially bring charges against any team Transfusions, which enhance per- leaders and team directors who may formance by boosting a rider’s red- have facilitated or encouraged dop- blood cell count, are considered ing by their riders. cheating by the International Cy- FDA special agent Jeff Novitzky, cling Union, the sport’s governing the lead investigator, didn’t return body. Mr. Landis was stripped of his calls seeking comment. 2006 Tour de France title after fail- It’s unclear how many riders ing a drug test. He denied doping have spoken to investigators or back then, but recently changed his agreed to be interviewed at a future story. date. Two people familiar with the Mr. Armstrong has broadly dis- matter say Mr. Novitzky already has missed Mr. Landis’s allegations and talked to several riders. has questioned his credibility. Mr. Cyclist George Hincapie of the Landis’s claims, he said in a state- Associated Press/Kyodo News BMC professional cycling team, now ment last week, are like “a carton of Hiroyoshi Murayama, the acting chairman of the Japan Sumo Association (in kimono), and top sumo wrestlers bow to spectators in apology on the opening day of a sumo tournament in Nagoya, central competing in the Tour de France, sour milk: once you take the first

Japan. Murayama, a former senior prosecutor, succeeded former wrestler Musashigawa, who was suspended earlier this month over an illegal-gambling scandal that has ensnared 65 wrestlers. has been called by Mr. Novitzky but sip, you don’t have to drink the rest Associated Press (top left); Getty Images (3); Agence France-Presse/Getty Images (2, top center and bottom right) hasn’t talked directly to him. One to know it has all gone bad.” From top left: Austrian Bernard Kohl admitted to doping; former German cycling champion Jan Ullrich has been accused iii person familiar with the matter said The statement also said the Wall of doping; Tyler Hamilton of the U.S. has twice been suspended for drugs. Bottom left: Lance Armstrong strongly denies makers to ignore warnings of a placed on top of the leak in early jecting a proposal to increase central banks seeking to preempt that Mr. Hincapie’s lawyer has been Street Journal article was “full of doping; American Floyd Landis admitted drug use and accused George Hincapie. Europe double-dip recession. “I disagree June to collect the oil and send it taxes and handicapping a fledgling inflation as the region leads the talking to investigators and that Mr. false accusations and more of the with the view that reducing public to surface ships. BP aims to have government struggling to keep the global economic recovery. But the Hincapie is likely to agree to talk to same old news from Floyd Landis, a n In Bosnia, tens of thousands expenditures will hinder economic the new, tighter cap in place as world’s second-largest economy BOK stressed it is just nudging Mr. Novitzky when he returns to the person with zero credibility and an turned out to commemorate the growth,” Trichet said. Instead, early as Monday. from financial meltdown. rates up from emergency levels af- U.S. Mr. Hincapie is a former team- established pattern of recanting to- 1995 Srebrenica massacre, burying stable public finances infuse confi- n Prime Minister Naoto Kan’s ter slashing them during the glo- mate of seven-time Tour de France morrow what he swears to today.” hundreds more bodies as the grim dence into households, businesses n The U.S. Department of Jus- tenure has been possibly short- bal financial crisis. Economists winner Lance Armstrong on the U.S. It is unclear what kinds of process of identifying remains and investors. tice’s civil-rights division will in- ened by the election. Even if he now expect the BOK to stand pat Postal Service cycling team. charges federal investigators might continues fifteen years later. vestigate a white transit officer al- survives the immediate fallout for at least a month. Mr. Hincapie’s Los Angeles attor- bring. People familiar with the mat- Around 100,000 people died in the n The number of U.K. companies ready convicted of killing of an from the results, he could face ney, Zia F. Modabber, confirmed that ter say they are exploring several 1992-1995 Bosnian war, which was collapsing has fallen to pre-credit unarmed black man—a verdict pressure from within the Demo- n In Pakistan, a suspected Tali- he had talked to Mr. Novitzky on Mr. avenues, including whether teams triggered when the ex-Yugoslav crisis levels as firms and lenders that touched off angry protests cratic Party of Japan to step aside ban suicide bomber killed at least Hincapie’s behalf but declined to dis- defrauded sponsors by failing to republic’s Muslim majority de- work to manage liabilities and the and more than 80 arrests in Oak- before the party leadership vote 55 people in the country’s Mohm- cuss the specifics of his conversa- race cleanly or whether Mr. Arm- clared Bosnia an independent benefits of the economic recovery land, Calif. scheduled for September. Having and tribal region, in a strike tion. “My desire is to let George do strong’s U.S. Postal Service team state, and ethnic Serbs responded show signs of trickling through to taken office in early June, that aimed at disrupting efforts by au- his job with as few distractions as misused federal funds. by trying to carve out territory businesses, a new survey from fi- n The White House is contem- would make him Japan’s fifth con- thorities to bring normalcy to the possible,” he said. In the wake of Mr. Landis’s dis- for a greater Serbia. nancial-services firm Deloitte said. plating a broad review of govern- secutive premier unable to hold war-torn area. American cyclist Tyler Hamilton, closures, some riders and team offi- The firm’s analysis showed 510 ment regulations that business the title for more than a year. who rode with Mr. Armstrong’s U.S. cials are stepping forward with simi- n Russia deported three former companies went into administra- leaders have identified as obsta- n In northern Afghanistan, in- Postal Service team from 1995 to lar stories. In an interview in Vienna KGB officers and a nuclear scien- tion in the second quarter of 2010, cles to job-creating private invest- n China’s trade surplus re- surgents killed 11 Afghan police 2001, has been asked to speak with this week with Dow Jones News- tist accused of betrayal, exchang- 18% fewer than in the first quarter ment. The Obama Administration bounded in June to $20.02 bil- and assassinated a district chief investigators but has not yet agreed. wires, former pro cyclist Bernhard ing them in Vienna for 10 agents of the year. is looking for new ways to spur lion—its highest level in half a over the weekend, in a seasonal In an email, Mr. Hamilton, whose Kohl, who quit professional cycling arrested in the U.S. and complet- job growth now that it appears year—despite the debt problems reprise of violence in the once- career was derailed by two positive after a positive drug test in 2008, ing a whirlwind spy swap that n Most Britons expect the U.K. less likely Congress will agree to of China’s largest trading partner, peaceful region, officials said. tests for banned substances, said: “I said Mr. Landis’s descriptions of was one of the largest since the economy to weaken before it spend significant new sums on the European Union. Nine U.S. troops meanwhile died am aware that there is an investiga- doping rang true. Cold War. starts to recover, and intend to government stimulus programs. in south and east Afghanistan, tion of other people in progress, and “That was exactly the way I also make cuts in spending that could n Chinese authorities have found where U.S. officials have warned if I am subpoenaed to provide infor- did it,” said Mr. Kohl, referring to n Slovakia, the euro zone’s new- push it back into recession, ac- n White House adviser David dairy products in at least three that higher casualties were likely mation, I will provide my full coop- Mr. Landis’s allegation that he and est and poorest country, has cording to a survey conducted by Axelrod defended the recess ap- provinces tainted with an indus- because of stepped-up operations. eration.” other U.S. Postal riders received balked at plans for a €750 billion GfK NOP in the days following the pointment of Donald Berwick to trial chemical that killed six ba- iii In addition to the FDA, anti-dop- blood transfusions during the tour ($948 billion) bailout package for government’s emergency budget. head the Centers for Medicare and bies and sickened hundreds of ing officials in the U.S. and in a in a hotel room. “The details of the troubled members, delaying the Medicaid Services, and sought to thousands more in 2008, state Middle East handful of other countries have blood bags and the checking for start of the rescue plan. Slovakia’s n Alan Budd, the departing head dispel concerns among some Re- media said. The discovery sug- joined the investigation. Interpol, cameras and microphones, the cut- newly appointed prime minister, of the U.K. government’s new fis- publicans that Berwick favored a gests toxic milk remains a linger- n A Yemeni appeals court has up- the international police organiza- ting up of the bags and flushing Iveta Radicova, said she will fly to cal council, is to appear at the nationalized health-care system. ing danger in China despite a held death sentences against four tion, has helped bring other law en- them in the toilet, it all took place in Brussels on Monday to meet Euro- House of Commons’ Treasury “He is not coming to implement crackdown two years ago that saw al Qaeda militants in deadly at- forcement agencies into the probe. exactly that way,” he added. pean Commission President José Committee Tuesday, a person at the British system,” Axelrod said. dozens arrested and two people, a tacks that included the assault on “The investigation has reached The Belgian cycling union said Manuel Barroso and outline her the committee said. The hearing iii farmer and a salesmen, executed. the U.S. Embassy and the killing out pretty widely,” said David How- this week that Johan Bruyneel, for- country’s objections. comes after Budd announced he of two Belgian tourists in 2008. man, director general of the World mer director of the U.S. Postal Ser- will step down as head of the Of- Americas n Taiwan’s president urged his Anti-Doping Agency, who says his vice team, had been questioned by n Pope Benedict XVI appointed a fice for Budget Responsibility af- Chinese counterpart to work to- n Israel’s foreign minister said a agency has been updated on the in- the union’s attorney in charge of in- special delegate to take over the ter just three months in the post. n In Brazil, an Air France passen- ward improving historically testy peace deal with the Palestinians vestigation. “There has been signifi- vestigating doping claims. Mr. Legion of Christ, the powerful iii ger jet headed from Rio to Paris ties following the signing of a should include handing areas cant progress.” Bruyneel “formally denied” Mr. Lan- Catholic order that has been made an emergency landing in the landmark trade deal. Ma Ying- where Israel’s Arabs live over to The U.S. government’s interest in dis’s allegations, the union said in a tainted by a sexual-abuse scandal U.S. country’s northeast due to a bomb jeou—who has sought to build Palestinian control. Avigdor Lie- cycling stems from allegations made statement. surrounding its founder, the late threat. All 405 passengers and 18 better relations with the mainland berman said a peace accord this spring by former cyclist Floyd The union said that investigating Rev. Marcial Maciel Degollado. n Oil was spewing largely un- crew members were safely evacu- since taking office in May should be based on “population Landis. attorney Jaak Fransen “will now Italian Archbishop Velasio De Pa- checked into the Gulf of Mexico as ated, and no explosive was found. 2008—said this was an opportu- exchanges, not land for peace.” In April, Mr. Landis sent a series complete the file and will take ac- olis will take the reins of the Le- BP crews claimed progress in the iii nity for the two sides to end de- of emails to cycling officials claim- tions that are deemed necessary,” but gion at one of the most delicate first stages of replacing a leaky cades of mistrust and search for WSJ.com ing there had been widespread dop- would make no further comment. points in its history. cap with a new containment sys- Asia common ground. ing in the sport and accusing several Mr. Bruyneel didn’t reply to an tem they hope will finally catch all To read more about these items, other riders of doping, including Mr. email seeking comment. n Jean-Claude Trichet, president the crude from the busted well. n Japanese voters handed a n The Bank of Korea unexpect- and for all the latest breaking Armstrong, his former teammate. —Flemming Emil Hansen of the European Central Bank, ap- Robotic submarines on Saturday stinging electoral defeat to the edly raised interest rates from re- news,gotoWSJ.com/World Investigators are focused prima- and John W. Miller pealed to investors and policy removed the cap that had been ruling party, exit polls showed, re- cord lows, joining a swell of Asian rily on Mr. Landis’s allegations con- contributed to this article. 4 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 33 EUROPE NEWS THE QUIRK Britons expect slower growth and plan to cut their spending

BY PAUL HANNON

LONDON—Most Britons expect the U.K. economy to weaken before it starts to recover, and they intend to make cuts in spending that could push it back into recession, accord- ing to a survey conducted by GfK NOP in the days following the gov- Marketa Reedova, far left, graces the ernment’s emergency budget. calendar’s October page. Karolina The new coalition government Peake poses in parliament, above, and June 22 announced additional in the calendar, left. spending cuts and tax increases that (Left to right) Public Affairs party (2); Milan Jaros for The Wall Street Journal are aimed at eliminating the public sector’s huge structural budget defi- cit by the end of the current parlia- ment in 2015. But those announcements appear Czechmates: These political figures to have persuaded many Britons that economic growth will slow, rather than pick up in the months to come. Of the 1,000 adults surveyed by GfK between June 24 and 28, 58% ex- pected the economy to weaken, are starring in their own racy calendar while 24% believe it is on the way to recovery. It was the first time GfK European Pressphoto Agency had asked that question, so it is dif- BY GORDON FAIRCLOUGH vative Civic Democratic Party is a ical science. A photo of her reclin- a doorway and wearing only a able in shops. “Now women have Iveta Radicova, Slovakia’s first female prime minister, was sworn in Thursday in Bratislava. On Monday, she will head to Brussels for meetings. ficult to determine how big a shift AND SEAN CARNEY woman—the first to hold the post. ing on a couch in dark stockings short suit jacket, which exposes more freedom to be themselves, there has been since the period be- Prague So are two of her three deputies. and a clingy knit top appears on almost the entire length of her to be women,” says Jitka Rich- fore the budget. Last month, as the new legisla- the September page of the Public legs. trova, a fashion consultant and However, other evidence in the OMEN won more seats in tors were being sworn in, one of Affairs calendar. “There are differ- Mrs. Peake and others think columnist for Hospodarske GfK survey does suggest Britons are the Czech parliament Mrs. Nemcova’s fellow female ent kinds of feminism,” she says. Czech women’s strand of femi- Noviny, the Czech Republic’s lead- Slovakia’s new government stalls becoming more gloomy about the W than ever before during Civic Democrats noticed the con- Mrs. Peake, the anti-corruption nism was shaped in large part by ing daily financial newspaper. economy. In June, 16% of those sur- national elections in late May. To spicuous number of her flaxen- campaigner, is a 34-year-old the country’s experience of Com- “They don’t need to be so tough” veyed agreed the recession is com- tout its new stars, one upstart haired colleagues and dubbed mother of two who got into poli- munist rule. Women were ordered and act like they are “men in ing to an end, down from 24% in party decided to give them special them the “Blond Coalition”—a tics fighting Prague City Hall for to work, and to work in the same skirts,” she says. January and 25% in September billing—as pin-up girls. nickname that has stuck in the na- better municipal services. She kinds of jobs as men—a big step Still, female politicians here euro-zone’s plans for bailouts 2009. The Public Affairs party is sell- tional media. says she was surprised herself in establishing equality. have a ways to go. The new Czech In response to their concerns ing a 2011 calendar featuring pho- Czech politicians’ sense of when she turned up at the photo But at the same time, women cabinet announced last week—the BY LEOS ROUSEK signing by all member states of the crises. Slovakia’s €700 million con- kets and, thanks to euro-zone gov- about the economic outlook, Britons tos of some of its leading female style is a stark contrast to those shoot for the calendar, proceeds have reacted against the unglam- result of lengthy power-sharing euro area is necessary for the facil- tribution to the Greek bailout was ernment guarantees, seeks to get a appear likely to cut back on spend- members, including four newly in the Hillary Clinton pantsuit of which are being donated to a orous trappings and enforced uni- negotiations among the Civic PRAGUE—Slovakia, the euro ity to become operational,” he said. approved by the country’s previous triple-A rating and the lowest possi- ing. Some 46% of those surveyed sworn-in lawmakers, clad school in the U.S., or even children’s hospital. sex treatment imposed by social- Democrats, Public Affairs and a zone’s newest and poorest country, Analysts said the absence of left-leaning government. ble borrowing costs. said they will spend less on new fur- in revealing outfits and many of their former-So- “I thought I would be wearing ism. Even during the Communist third party, TOP 09—includes no balked at plans for a €750 billion unanimous support by the entire Euro-zone leaders, in an early Slovakia, which emerged from the niture, while 45% intend to spend posed provocatively. viet Bloc comrades in a suit,” she says. But once the era, women smuggled fashion women. Prime Minister Petr Ne- ($952 billion) bailout package for euro zone could send a bad signal to May meeting dominated by Nicolas peaceful dissolution of Czechoslova- less on large electrical items. Some A black-and-white por- countries such as Poland, photographer took over, “I real- magazines from the West that in- cas, a Civic Democrat, said this troubled members, delaying the financial markets, calling into ques- Sarkozy of France Angela Merkel of kia in 1993, joined the euro zone Jan. 42% intend to spend less on drinking trait of Katerina Klasnova, where traditional atti- ized I would only be wearing part cluded patterns for stylish was an “unfortunate outcome.” start of the rescue plan. tion the group’s commitment to mu- Germany, agreed to the facility and 1, 2009, as its 16th member. alcohol outside the home, while 39% a new vice speaker of par- tudes and the influence of of it.” The calendar’s February clothes, in large part because —Leos Rousek contributed to this Slovakia’s newly appointed prime tual support. pledged support. The Slovak prime Unlike Greece and some other plan to spend less on eating out. liament’s Chamber of Dep- the Catholic Church have page shows Mrs. Peake, leaning in there was nothing like that avail- article. minister, Iveta Radicova, said she Bratislava is supposed to con- minister at the time gave his assent southern euro-zone members, Slova- There is already evidence that uties, graces the page for made for more conserva- will fly to Brussels on Monday to tribute €4.4 billion to the facility, but said final approval would be up kia has worked to keep its finances the big cutbacks in spending an- January. She has tousled tive fashions. meet European Commission Presi- backed by euro-zone member states. to the next government. under control despite facing a severe nounced in the budget have hit busi- blond hair and is wearing On the opening day of dent José Manuel Barroso and out- The fund is meant to be available to Ms. Radicova leads a coalition of economic downturn last year. The ness confidence. A survey of pur- nothing but a black bra parliament, Ms. Klasnova, line her country’s objections. countries in the euro block with center-right parties that won parlia- economy contracted 4.7% last year as chasing managers in the dominant and short skirt. the vice speaker, and fel- Amadeu Altafaj Tardio, the Euro- debt troubles. mentary elections in June, cam- demand for exports, centered on cars services sector published July 5 Ms. December is the low Public Affairs MP pean Commission spokesman for Last week, Ms. Radicova said she paigning on pledges to cut spending and electronics, sputtered. found that following the budget, party’s chief negotiator, Katerina Karolina Peake, an anti- THE FUTURE LEADERSHIP INSTITUTE economic and monetary affairs, said didn’t want to block the start of the and oppose big-ticket, euro-zone The new cabinet has pledged to sentiment plummeted by the largest Kristyna Koci, pictured Klasnova corruption campaigner Powered by EXECUTIVE LEARNING PARTNERSHIP the commission is hopeful “Slovakia facility but said Slovakia wants bailout projects. cut spending to bring the budget amount in a single month since re- peering over her glasses, and lawyer who repre- Bringing Universities and Businesses Together will honor its commitment and con- more talks on its participation in The stabilization facility com- deficit to less than 3% of gross do- cords began in January 1997. dark knee-high stockings contrast- sents a Prague constituency, tribute.” He said the European Fi- the fund, as well as its overall size prises €440 billion in loan guaran- mestic product within three years. The government and the Bank of ing with her bare thighs and the strode up to the main entrance in Networking with The Wall nancial Stability Facility, which was and other details. tees from euro-zone member states, The deficit is forecast to be 7% of England would like to see a rebal- strap of her negligée sliding down form-fitting skirts, black tops, Street Journal Europe? supposed to become active July 1, The facility was created after the €60 billion from the European GDP this year. ancing of the U.K. economy so that one shoulder. soaring heels and sunglasses. The Journal Europe Win 1 out of 2 seats has been on hold, awaiting Slova- €110 billion bailout package for Union, and up to €250 billion from growth is driven more by exports The party’s racy calendar, Not everyone agrees with the Future Leadership The Journal Europe at our WSJE kia’s approval. Greece stoked fears that other Euro- the International Monetary Fund. It One Czech party promotes new and business investment than con- which was first released during Public Affairs approach. And the “Networking Table” “It is our understanding that pean countries could face similar is to raise money on financial mar- female MPs as pin-up girls...... 33 sumer and public-sector spending, the campaign, is a sign of the calendar has sparked a debate Institute supports Future Leadership which were the main contributors to times here. A new generation of about whether the politicians’ Institute supports at growth in the decade leading up to Czech women is coming of age poses are more likely to break AIESEC’s Global Youth to the financial crisis in 2007. that is embracing femininity and down walls or reinforce stereo- “The Best of Cannes” But an abrupt slowdown in con- sex-appeal while at the same time types. The Public Affairs women Business Forum 2010 Cass Alumni World A Vepec Conference Fewer U.K. companies are collapsing sumer spending before exports pick fighting for, and winning, more “should be presenting themselves Forum up could plunge the U.K. economy equal treatment in the realms of by showing what they want to 26 August, 2010 5 October, 2010 back into a recession from which it business and government. achieve, not by showing off their India School of Business, BY AINSLEY THOMSON for the benefit of creditors. last full year before the financial tions is showing across all sectors: emerged only in the final three “Women’s political influence is looks,” says Zuzana Graczova, a 16 July, 2010 Antwerp, Belgium In the first six months of 2010, a downturn began. 81 retailers fell into administration months of last year, following six growing. Why not show we are human-resources manager at Hyderabad, India London, UK LONDON—The number of U.K. total of 1,065 companies have en- Lee Manning, reorganization-ser- in the first half of 2010, down 57% straight quarters of contraction. women who aren’t afraid of being Czech consulting company Brain To win a seat email us your full companies collapsing has fallen to vices partner at Deloitte, said com- from a year earlier. “It is ironic that a reduction in sexy?” says Marketa Reedova, a Logistics. Ms. Graczova says she contact details with “Cannes” in http://www.aiesec.org/cms/ www.cass.city.ac.uk/awf pre-credit-crisis levels as firms and panies and lenders’ proactive man- Meanwhile, 229 property and consumer spending—driven by eco- 42-year-old Prague city council- doesn’t expect much change in aiesec/AI/Y2B/index.html the subject field. Reply by noon lenders work to manage liabilities The number of British firms agement of financial problems has construction companies failed in the nomic uncertainty—could in fact woman now running for mayor government policy despite the CET, 1 September, ‘10 to the and the economic recovery shows been one of the drivers behind the first half of 2010, down 43%. In ad- bring about the thing people are who also appears in the calendar. greater female representation in address below. Winners will be signs of trickling through to busi- going into administration is drop in administrations. dition, 167 manufacturing compa- most concerned about: a dip back “Czechs are open-minded.” parliament. informed by email. nesses, according to a new survey dropping, according to a “By acting sooner, companies nies were placed in administration, into recession,” said Ivan Browne, May’s elections, 20 years after Lenka Andrysova, 26, another from financial-services firm Deloitte have been able to remedy problems 46% fewer than a year earlier. consumer products and retail expert the collapse of Communism, new Public Affairs member of par- Contact: [email protected] published Monday. new survey, and the positive more effectively,” he said. “We are seeing a steady decline at GfK NOP. swept away a large number of the liament, says she got into politics The Wall Street Journal Europe is The firm’s analysis, which exam- “Equally, lenders have been sup- in administrations and this is cer- The opposition Labour Party and country’s predominantly male, en- in part because she admired the read every day by 40,500 students at 180 top trend is showing across business schools and university campuses across ined all U.K. administration figures, portive, preferring to make debt- tainly a positive sign that the cli- some economists have warned that trenched career politicians. In many accomplishments of former Europe, a program supported by showed that 510 companies went various business sectors. for-equity swaps or even advance mate is stabilizing,” Mr. Manning hasty action to cut the deficit could their place have come a crop of U.S. Secretary of State Madeleine into administration in the second suitably priced risk capital, rather said. “I would be very surprised if lead to a double-dip recession, while new faces, including more women Albright and current Secretary of quarter of 2010, 18% fewer than in than crystallize their debt through administration levels increased dra- the government has argued that only and twenty-somethings. There are State Clinton. Still, she says, she the first quarter of the year. tered administration—43% lower an insolvency process,” Mr. Manning matically this year; rather I would by taking early action can it hold on now 44 female members of the wouldn’t look to them for style Administration is a procedure than the comparable period last added. expect the second half to mirror the to its triple-A credit rating, thus 200-person lower house of the tips. Ms. Andrysova, who repre- under U.K. insolvency law to man- year and actually 25% fewer than in Deloitte’s analysis shows the levels of activity we’ve seen in the keeping long-term interest rates low Czech parliament. The speaker, sents a district in rural Moravia, Executive Learning Partnership - ELP: Strategy & Learning Architects: www.elpnetwork.com age companies in financial trouble the first half of 2006, which was the pronounced decrease in administra- first half,” he added. and supporting the recovery. Miroslava Nemcova, of the conser- is completing a doctorate in polit- 32 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 5 SPORT EUROPE NEWS

DEFENDERS Pitch perfect: Obdulio Varela was captain of the Uru- guay team that won the 1950 World Cup Turkey fills void in former Yugoslavia in Brazil, beating the host nation in the fi- nal in one of this tournament’s biggest upsets. “He was the player of the game, Ankara,participatinginanniversaryofSrebrenicamassacre,bringstogetherregion’sleadersafterU.S.andEUstumble but more than that, when Brazil went World Cup’s ahead, he picked up the ball and BY MARC CHAMPION walked so incredibly slowly to the center circle that he quieted the ISTANBUL—The leaders of Tur- crowd,” said Mr. Goldblatt. “It was key, Serbia and other Balkan nations an act of extraordinary front, to gathered this weekend to commemo- all-time best take on the crowd like that, espe- rate the 15th anniversary of the Sre- cially in front of 200,000 people.” brenica massacre in Bosnia-Herze-

Picking top players from a galaxy of stars Franz Beckenbauer, the archi- Press Association govina, in an event seen by Turkish tect of Germany’s 1974 triumph, and officials as a crowning moment in its is a tricky goal, but we give it our best shot Bobby Moore, who captained England to Warwickshire’sJonathan Trott campaign of regional diplomacy. its sole victory in 1966, are arguably the Tens of thousands of people BY JONATHAN CLEGG perts including a soccer historian, a finest defenders to have played this Tip of the day turned out Sunday to remember the former World Cup winner and a re- sport—in fact, Mr. Beckenbauer was prob- execution of some 8,000 Muslim The race between Spain’s David nowned sportswriter, we’ve come up ably one of the finest midfielders too, as men and boys by the Bosnian Serb Villa and Wesley Sneijder of the with a regulation squad of 23 play- he would no doubt remind us himself. Bangladesh secured its first military, in what an international Netherlands to finish as leading ers we believe to have been the pre- They make up two of our defensive selec- ever victory over England in court has since ruled to have been scorer of the 2010 World Cup looked mier performers during those few tions, alongside Uruguay’s Mr. Varela and any form of cricket in Satur- an act of genocide. Families buried like being the decisive factor in Sun- weeks every four years that follow- Franco Baresi, the colossus who inspired day’s second one-day interna- an additional 775 of the dead, as the day’s final. ers of The Beautiful Game hold so Italy’s 1994 final appearance. tional and can clinch a sensa- grim task of collecting and identify- It could also establish which of dear. The group is rounded out by a pair of tional series victory if it can ing skeletons of those buried and re- these players, each with five goals Make no mistake—this isn’t a versatile defenders: France’s Lilian repeat its heroics at Edgbaston buried in mass graves continues. apiece, comes to define this tourna- laundry list of all the greatest play- Thuram, a winner in 1998, and Philipp on Monday. Turkish Prime Minister Recep ment and joins the ranks of the ers ever to kick a ball, as many of Lahm, captain of Germany’s 2010 team The Tigers’ bowling attack Tayyip Erdogan’s presence at the fu- World Cup’s greatest players. this game’s biggest names played and perhaps the best right-back in South was largely to thank for the neral highlighted how Ankara has It would be difficult to dispute sparingly at the World Cup, if at all. Africa this past month. win at Bristol, but the 1/7 avail- stepped into a void in Bosnia left by that either player deserves such rec- Also making our task difficult is able with Totesport for England the failure of a yearslong U.S.–Euro- ognition, but in whose exalted com- picking people to play in defense or GOALKEEPERS to win the final one-day inter- pean Union effort to secure a new pany would they stand? midfield because of soccer’s relative national suggests the hosts will constitutional settlement aimed at It’s a question that is essentially paucity of statistics. Signature plays can elevate ath- be much too strong. Although ensuring stability in a fractious na- unanswerable because there is no Scoring is limited to a handful of letes into the all-star ranks, and Andy Flower’s team won by six tion made up of Bosnian Muslims, World Cup hall of fame, no soccer goals in each game, and unlike base- such is the case with England’s Gor- wickets at Nottingham it is dif- Serbs and Croats, diplomats say. version of Cooperstown or Canton. ball, say, there’s no box score to don Banks, whose gravity-defying ficult to justify backing England “We put everything the U.S. and

With that in mind, The Wall summarize individual contributions save of a Pelé shot in the 1970 at such a short price. Instead, the European Union could get to- Associated Press Street Journal set out to resolve a or illuminate the impact of players World Cup is a moment that re- selling the side’s spread-betting gether, and yet we could not suc- Bosnians pray near coffins of victims of the 1995 Srebrenica massacre, during a mass funeral in Potocari, northeast of Sarajevo, on Sunday. debate that will be enacted in bars who win the ball from opponents or mains etched on our memory. “He supremacy at 42 with Sporting ceed,” said a senior Western diplo- and pubs across the world on any set up successful strikes with essen- was an artist of his kind, the guy Index appeals. Ten points are mat in Sarajevo, speaking of the been indicted by the International Middle East, where Turkey’s vote route to membership when it hadn’t 49% stake in Air Bosnia in 2008. given night, and which has kept Di- tial but far-from-glamorous passes. who pulled off what was thought to awarded per wicket won by or so-called Butmir process to change Criminal Tribunal for former Yugo- against U.S.-led U.N. sanctions on fulfilled all conditions. Around 70% of students at the ego Maradona and Pelé at each The absence of meaningful num- be the finest-ever save against one point per run, and with the constitution, named after the slavia in The Hague, but remains at Iran and its increasingly hostile rela- Within Serbia, Turkey’s foreign new Turkish-built International Uni- other’s throats for the best part of bers has traditionally made genera- Pelé,” said Simon Barnes, a colum- Bangladesh’s new-found confi- North Atlantic Treaty Organization large. Mr. Tadic pledged to “do ev- tionship with Israel have triggered minister last year successfully medi- versity of Sarajevo are Turkish na- two decades: Who are the greatest tional comparisons all but impossi- nist for The Times of London. dence the final match of the military base where it was launched. erything” to apprehend alleged war worries in Washington over the di- ated a dispute that had led to vio- tionals, many of them young women players in the history of the World ble, too. Paraguay’s José Luis Chilavert series could be closer than ex- The reason: Without Russia criminals in Serbia. rection of a core regional ally. lence between two factions in the escaping the head-scarf ban on Cup? Instead, David Goldblatt, the au- —a three-time world goalkeeper pected. working to persuade leaders of Bos- In March, Belgrade, for the first Turkish diplomats cite their ef- Orthodox Christian nation’s majority Turkish campuses. For a number of reasons, select- thor of “The Ball is Round: a Global of the year—led his nation to the Jonathan Trott put in a nia’s Serbian entity and Turkey time, made a formal condemnation forts at mediation among the coun- Muslim Sandzak region, according to Not everybody accepts the grow- ing a definitive team of World Cup History of Football,” says that any round of 16 in both 1998 and 2002. gutsy performance on Saturday pressing Bosnian Muslim leaders, a of the Srebrenica killings, a move tries of former Yugoslavia as an ex- Western diplomats familiar with the ing Turkish role in a region that was all-stars is all but impossible. all-star list should take into account He was also a goal-scoring threat but his 94 was unfortunately deal was “out of our reach,” the dip- Western diplomats say was medi- ample of how Turkey’s activist matter. Two prominent Sandzak pol- under Ottoman rule for five centu- For one thing, unless you hap- the wider narrative in which a himself (he famously took direct not quite enough. With Ian Bell lomat said. ated by Turkey and aimed at foreign policy makes it a more valu- iticians supported rival Muslim cler- ries. Milorad Dodik, leader of Bos- pened to be there, it’s a bit difficult player’s on-field performance takes free-kicks and penalty kicks for Par- missing the finale through in- As the process ground to a halt smoothing Serbia’s path to the EU. able ally to the West. ics who in turn answered to rival nia’s Serbian entity, Republika Srp- to pass judgment on the first World place. In other words, we should go aguay). jury, the capable Mr. Trott will last year, Ankara stepped in with a Serbia has arrested and handed over Over the past 18 months, Turkey muftis in Sarajevo and Belgrade. ska, has said Ankara arrives with too Cup in 1930. The world’s most popu- for the guys with the best stories Gianluigi Buffon conceded just relish taking center stage and parallel effort aimed at getting the numerous alleged war criminals, in- has built a strong relationship with Turkey offered highway con- much historical baggage and is lar sporting event wasn’t televised behind their play. two goals (one an own-goal and one at 5/1 is good value to be Eng- leaders of Serbia, Bosnia and Croatia cluding former Serbain President Serbia’s pro-Western government struction, an airport conversion and pushing exclusively for the interests internationally until 1958, and the “We remember those players from the penalty spot) during Italy’s land’s top scoring batsman. talking, said Süha Umar, Turkey’s Slobodan Milosevic, who died while under Mr. Tadic and organized a se- industrial projects in Sandzak. On of Bosnia’s Muslims, a charge Turk- only footage that survives of that in- with the best stories as well as the triumphant run to the 2006 trophy. Bangladesh’s bowlers all ambassador to Belgrade. “We had to on trial, and former Bosnian Serb ries of three-way meetings with ex- Sunday, Mr. Erdogan was scheduled ish diplomats deny. A spokesman for augural tournament in Uruguay runs best play,” he said. “The narratives Four years later, he was per- played their part on Saturday intervene,” he said. leader Radovan Karadzic, currently Yugoslav neighbors. to open a Turkish cultural center Mr. Dodik wasn’t available for com- 13 minutes. Total. we weave around these players haps the only Italian to emerge with five taking two wickets Serbian President Boris Tadic on trial in The Hague. The govern- Ankara also played a key role in there. ment Friday. But by studying advanced statis- should become a part of how the untainted from a dismal first- each, but Abdur Razzak particu- Sunday’s ceremony, drawing some ment of Republika Srpska, Bosnia’s securing NATO’s April decision to Turkey was Bosnia’s fourth-larg- Some Serbian newspapers have tics and interviewing a panel of ex- canon is selected.” round exit: Mr. Buffon was in- larly impressed by taking the applause and some calls of “Where ethnic Serb entity, sent a low-level grant Bosnia a formal road map to- est investor in 2009, according to attacked Mr. Tadic for going along jured in the first half of the key wickets of Paul Collingwood is Mladic?” the Associated Press re- delegation Saturday. ward joining the alliance, despite the country’s Foreign Investment with Turkish mediation, saying he is opening game and missed the and Eoin Morgan for 10 and ported. Gen. Ratko Mladic was the Western capitals have largely deep reservations in Germany, the Promotion Agency. Turkish Airlines abandoning Bosnia’s ethnic Serbs. MIDFIELDERS rest of the tournament. one respectively. He has a solid Bosnian Serb commander in charge welcomed Turkey’s growing involve- Netherlands and the U.S. about the says it is in talks to buy Serbia’s Spokesmen for Mr. Tadic didn’t re- average of one wicket for every of the Srebrenica operation. He has ment in the Balkans—unlike in the moral hazard of offering Bosnia a main airline, JAT, having bought a spond to requests to comment. Analysts from Castrol, an official FORWARDS 27 runs in his six ODIs against World Cup sponsor, have tracked ev- England and should be backed ery touch of the ball in every game The World Cup has made im- at 4/1 with Betdaq to be the since the opening match in 1966 mortals out of some pedestrian Tigers’ top bowler. in an attempt to reach scien- players, not least Paolo Rossi, Suspected spies fall from view tific conclusions about who featured little during It- the beautiful game. aly’s run to the 1978 semifinal, Their results rein- but four years later scored six BY RICHARD BOUDREAUX had phoned her sister from Mos- In an interview with CBS’s “Face the force our impressions goals and earned a European cow’s Domodedovo airport after Nation” that aired Sunday, he de- about some of the player-of-the-year award. MOSCOW—The 14 alleged spies landing Friday and reported, “Ev- fended the swap as “an opportunity greatest players—despite appear- “That’s what can happen 1.36 deported from Russia and the U.S. erything is OK. We have landed.” to get back...four people in whom ing in only one World Cup, Johan Cruyff when half the planet is remained out of public view over Russia’s state-controlled national we have a great deal of interest.” is the most creative player in the history watching a single the weekend amid uncertainty over television channels reported the He also said all the children of of the tournament, conjuring a chance from match,” said Tony where they had been taken and how swap tersely, likely reflecting the the agents had been allowed to re- open play every 22 minutes on aver- Cottee, a former they would restart their lives. Kremlin’s desire to bury a story in turn to Russia. It remained unclear, age—while also illuminating the contribu- England player. Relatives said they heard brief which the U.S. Federal Bureau of In- however, whether all the agents and tions of some who are overlooked. Brazil has three for- reports from two participants in Fri- vestigation, after years of surveil- their families would choose to settle One is Poland’s Grzegorz Lato, the wards in our listy: Romário, whose day’s spy swap, Russian media said. lance, busted a network of “sleeper” in Russia. top-scorer in the 1974 World Cup with a five goals helped win the 1994 tour- Nuclear scientist Igor Sutyagin agents who had failed to gain access Mr. Sutyagin told his brother Sat- goals-to-shots rate of 28%—better than nament; Ronaldo, a champion in phoned his family from an unidenti- to state secrets. urday that he was weighing a deci- any other Golden Shoe winner. Martin 2002 and leading scorer in World fied hotel near London, where he is The 10 were exchanged in Vienna sion whether to return to Russia or

Peters, a winner with England in 1966, Cup history with 15 goals; and Ed- apparently confined by British au- for three former KGB officers and stay abroad. Unlike the 10 deported Reuters also earns a nod: The West Ham United son Arantes do Nascimento—known thorities until a decision is made Mr. Sutyagin, all serving prison sen- from the U.S., who were barred from U.S. Attorney General Eric Holder has defended the deal made with Russia. midfielder scored a goal in the final, to you and me as Pelé. about whether he will remain in the tences in Russia for passing sensi- returning without permission from created 12 chances from open play in We’re also including Cameroon’s U.K., his mother said. tive information to the West. Two of the attorney general, Mr. Sutyagin the situation.” would have strained an improving England’s triumphant run, while also Roger Milla, whose four goals in The whereabouts of the others, the KGB officers had been convicted and the three KGB veterans are free Another agent deported by Mos- relationship that the two countries’ contributing 23 tackles. 1990 helped the Indomitable including the 10 Russian agents ex- in their country of compromising to go back to Russia, Russian offi- cow, Sergei Skripal, was in Britain presidents are eager to maintain. Alongside Messrs. Cruyff, Lato Lions become the first Afri- pelled from the U.S. to Moscow, dozens of Soviet-era and Russian cials said. President Dmitry Medve- as well; the other two KGB men “It’s the best example of Presi- and Peters in our midfield we’ve can country to reach the were unknown. Russian media spec- agents in the West. dev pardoned the men. were flown to Washington. dent Obama’s policy to reset rela-

chosen Diego Maradona and Getty Images quarterfinals, and Germany’s ulated that they were being de- U.S. Attorney General Eric Dmitry Sutyagin told Russia’s In- By agreeing to the swap just 12 tions,” said Nikolai Zlobin, a Russia Zinedine Zidane, who need Gerd Müller, who averaged Source: Associated Press briefed at Russian intelligence head- Holder said the 10 agents deported terfax news agency that his brother days after the U.S. busted the Rus- specialist at the World Security In- no introduction, as well as the better than a goal per game in two quarters in Moscow. from the U.S. had received hundreds “doesn’t want to talk about his fu- sian agents, both sides avoided a se- stitute in Washington, an indepen- Brazilian pair Jairzinho, and Garrincha World Cup tournaments One of the 10, Anna Chapman, of thousands of dollars from Russia. ture yet and wants first to analyze ries of drawn-out U.S. spy trials that dent think tank. “Reset works.” 6 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 31 U.S. NEWS C-SUITE: TECHNOLOGY BP, Apache in talks on Alaska deal Facebook touts friendship for selling

BY GUY CHAZAN BP has already suspended its complete the relief well in August, also in “material” discussions with a As its output has fallen, BP has BY EMILY STEEL As part of its push to capture a to build up fan bases and commu- AND DANA CIMILLUCA dividend and trimmed capital but some signs have suggested it single company—Apache—on a also been beset by operational prob- AND GEOFFREY A. FOWLER bigger slice of the online-ad busi- nicate with users. “It fundamen- spending. could happen sooner. package deal worth $10 billion. If BP lems in Alaska. In 2006, a pipeline ness, where it lags behind sites tally comes down to why people BP PLC is in talks with U.S. inde- The company has also said it Rising optimism about BP’s for- can pull off that transaction, that leak led to a 200,000-barrel oil spill Facebook Inc. is trying to rev like Google Inc. and Yahoo Inc., are there on social networks. They pendent oil and gas producer plans to sell $10 billion in noncore tunes has helped push the com- could ease pressure on the company on the North Slope—the worst oil up its advertising business with a Facebook opened four interna- are not there to read our ads. Apache Corp. on a deal worth as assets over the next 12 months, al- pany’s share price up about 20% in to sell other assets. The Apache spill on the slope in Alaska’s history. little help from your friends. tional sales offices last year and They are there to talk to each much as $10 billion that could in- though it has not specified which the last two weeks. Having hit a 14- talks were reported Sunday by the Under a criminal settlement the fol- The social-networking site is another one this year in Hamburg, other,” says Scott Monty, head of clude stakes in BP’s vast Alaska op- ones. Those steps came after the year low of 302.9 pence ($4.56) on Times of London. lowing year, BP pled guilty to a vio- aggressively pitching to big adver- Germany. It has more than dou- social media at Ford. erations, according to people famil- company, ceding to pressure from June 29, BP closed Friday in London BP opened its first office in lation of the federal Clean Water tisers like Ford Motor Co. and bled its ad-sales staff since the be- Like many major marketers, iar with the matter. the White House, agreed to set aside at 364.8 pence. Alaska in 1959 and has a 26% stake Act and paid $20 million in fines PepsiCo Inc. the latest in a series ginning of 2009. In March, Face- Ford long held back on putting big A deal, which would go a long $20 billion in a special fund to cover Over the weekend, BP began an in the Prudhoe Bay oil field—which and restitution. The company has of ad formats that tell users which book hired Google ad executive ad dollars behind campaigns on way to helping BP cope with the fi- claims arising from the spill. operation to remove a containment after 33 years of production remains suffered a number of other spills of their Facebook friends have ex- David Fischer to be its vice presi- Facebook. Instead, Ford used the nancial stress of paying for the The asset sales represent one el- device located over the gushing well the largest in North America. It op- and pipeline ruptures in Alaska pressed interest in the brand or dent of advertising. site’s free options, such as creat- clean-up of the Gulf oil spill, could ement in a broad capital-raising ef- and replace it with a much tighter erates 14 other oil fields on the since then. product featured in the ad. The latest ads mark another at- ing fan pages, to build up groups be reached in the coming weeks, fort. BP has also secured new credit cap that should collect all the oil North Slope, and has minority inter- BP has a history of big deals Facebook says it hired Nielsen tempt by Facebook, which is near- of fans who would share pictures though there is no guarantee it will lines, and could also sell bonds, ac- and gas leaking from Macondo. The ests in six others. It also operates with Apache. In 2003 it sold the U.S. Co. to conduct a study and found ing 500 million users, to make and stories about their cars over succeed, one of these people said. cording to people familiar with the operation, which began Saturday, four pipelines there and has a big independent its Forties field in the that including information about money from personal data it col- the site. Now Ford is in talks to BP and Apache declined to com- situation. will take between four and seven stake in the Trans Alaska Pipeline North Sea and a package of shallow- individuals a person knows in an lects about them. Facebook, which buy social ads to promote the ment. These people say BP could an- days, BP says. But removing the cur- System, which brings oil from Prud- water assets in the Gulf of Mexico ad boosts recall of the ad by 68% has been hammered by privacy launch of the new 2011 Ford Ex- The Apache deal is believed to nounce the deal with Apache, or rent cap means oil and gas will flow hoe Bay in the north to the port of for $1.3 billion. and doubles awareness of a advocates and regulators over its plorer, which will be unveiled on

include stakes in Alaskan oil fields, other asset sales, on July 27, the freely from the well for some time, Valdez. Apache has a reputation for brand’s message. privacy policies, hasn’t heard con- Ford Motor Company Facebook later this month, Mr. where BP is the largest operator. same day it unveils its second quar- increasing the level of pollution. But its Alaskan assets are ma- snapping up the majors’ mature as- The so-called social-context cerns from users about social ads, A proposed Facebook page for Ford’s launch of the 2011 Ford Explorer. Monty says. “They made a very It is one of a number of options ter earnings. Investors are also ex- People familiar with the matter ture, and production there has been sets and applying cutting-edge tech- ads, which Facebook started roll- Ms. Sandberg says. attractive case,” he adds. the U.K. oil major is exploring to pecting good news on the relief well say that with its asset sales, BP is gradually declining. Last year, BP nology to squeeze more oil out of ing out over a year ago, are based Facebook says the people friend, along with his or her ads to U.S. users than any other “The social ads are interesting, raise cash as it struggles to cope it is drilling to intercept its runaway moving along two tracks: It is in produced 181,000 barrels a day of them—a strategy it has successfully on data it collects on the likes and whose names it picks to feature in name. But Facebook has since dis- site in the first quarter—leaping because you feel that you are con- with a spill that has fouled huge Macondo well and plug the leak. talks with a number of companies oil and gas in Alaska, down from applied in the North Sea and the friends of its users. The ads ap- the ads have voluntarily indicated continued those practices. ahead of Yahoo for the first time. necting to a brand through an en- sections of the Gulf coast. BP has consistently said it will on a wide spectrum of assets and is 197,000 barrels a day in 2008. Gulf of Mexico. pear on the right side of a user’s they like a brand, and it shares Facebook says it is starting to Yet Facebook is expected to bring dorsement from someone. The ads homepage, with an image and their names only with those they see results with major marketers, in more than $1 billion this year perform better.” says Shiv Singh, headline from the advertiser. With have identified as friends. Still, such as a recent deal with Nike in revenues, according to people director of digital engagement and the ads are the names of any of some users may not realize that Inc. to buy ads on users’ home- briefed on the matter. Yahoo social media at snack and bever- the user’s friends who have clicking a button to indicate they pages across 20 countries during earned $6.5 billion in revenue in age giant PepsiCo. White House plans clicked on a button indicating like a brand gives Facebook per- a day ahead of the start of the 2009, mostly from advertising. But marketing experts say that Lake near Gulf is breached they like the brand or ad. The mission to use their names when World Cup. Such homepage ads The average price of display ads Facebook faces challenges in user is also offered a chance to in- the site shows an ad from that come with a price tag of as much on social-networking sites is building out its business with the BY KRIS HUDSON dicate he likes the ad. brand to their friends. as $100,000. Ads that appear on about one-sixth the price on the social-ad product alone. Many review of regulation “Marketers have always known Facebook gives users the op- other portions of the site that ad- rest of the Internet, according to marketers still believe it is more NEW ORLEANS—Idled commer- that the best way to sell portunity to opt out of having vertisers buy via a self-service comScore. efficient to buy Facebook ads on cial fishermen Vincent Caronna and something is to get your their likes included in ads by us- tool can sell for less than a dollar For many years, marketers the cheap using the company’s Shirley Roach stewed with col- BY ELIZABETH WILLIAMSON ness community’s perspectives on friends to sell it,” says ing the application settings on the a click, ad executives say. have questioned whether consum- self-service tool that offers de- leagues on their docks in the Salt examining regulations, but a lot of Sheryl Sandberg, Face- site. It declines to say how many Hundreds of millions of people ers pay attention to ad messages tailed targeting options. In addi- Bayou, lamenting that oil from the WASHINGTON—The White important equities need to be book's chief operating of- users have done so. regularly visit social-networking on social-networking sites, and tion, media buyers have strong BP PLC spill had begun seeping into House is talking with business weighed against each other, such as ficer. “That is what people In earlier efforts at social con- sites, but they haven’t been big were concerned about having ties to traditional Web portals, Lake Pontchartrain, a body of water groups about a broad review of gov- the health and safety of the Ameri- do all day on Facebook. text ads, Facebook placed the moneymakers. Facebook attracted their ads appear next to user-gen- and in the relationship-driven ad- Louisianans had hoped was safe. ernment regulations that corporate can people—and no one interest We enable effective word- messages directly inside the news 130.3 million unique U.S. visitors erated content that could range vertising business, they say, Face- “It will be a long time before leaders have identified as obstacles outweighs another,” said White of-mouth advertising at feed portion of the site, and also in May, according to comScore from banal to risqué. Many pre- book is going to need to forge they clean [the lake] up,” Mr. Caro- to job-creating private investment. House chief of staff Rahm Emanuel. scale for the first time.” included a small photo of a user’s Inc., and delivered more banner ferred to use the site’s free tools those connections. nna said, worried that storms could Administration officials have An array of business interests push more oil over man-made barri- been meeting with business leaders and legislators, including several al- cades and into the 1,630-square-ki- to identify specific rules that could lied with the president, will attend a troduced a standard-footprint ma- built-in DVD drive. an Eco button, which switches the lometer brackish lake. “It will have be streamlined. In recent weeks jobs summit Wednesday at the U.S. chine that is thin and light—and It has a much better selection machine into a low-power mode to be completely restocked,” Ms. some of the president’s corporate Chamber of Commerce. The group New Toshiba uses the latest Intel processors, of ports than the Apple, including to get more battery life. Roach said. allies have joined its critics in an in- will demand action on a list of con- with generous memory and stor- three USB ports instead of one. It In my tests, the new Toshiba The fishermen, their livelihoods tensifying confrontation with the cerns topped by “the unbelievable age, and strong battery life. Yet it also has three ports missing en- speedily handled common soft- devastated by the damage oil has White House over its regulatory and amount of new regulation that is in costs much less than the MacBook tirely on the Apple: a built-in Eth- ware, such as Microsoft Office, wrought in the Gulf of Mexico, offer Associated Press tax policies. the pipeline,” said Stan Anderson, laptop is light Air and X300, with the tradeoff ernet port; an HDMI port for di- Adobe Reader, Apple’s iTunes, and some of the most pessimistic views. Searching for tar balls from the Gulf oil spill in Lake Pontchartrain this month. The Business Roundtable, an as- executive director of the Chamber’s being a bit more bulk. I’ve been rect, high-definition connection to the Firefox and Chrome Web The oil’s encroachment into Lake sociation of chief executives of Campaign for Free Enterprise. testing this model, which is called a TV; and a memory-card reader. browsers. Pontchartrain has been relatively nearly $4.5 million for fishermen, Mr. Davis and other officials say many of the largest U.S. corpora- A week ago White House officials the Portege R705. Toshiba said the (The ThinkPad has three USB The Toshiba has some other minor, with tar balls and sheen be- according to the state Department that, absent a big storm, defenses tions, recently delivered to the met with leaders of the Business laptop will be released in the U.K. ports and an Ethernet jack, but no benefits. It uses the latest Intel ing found. of Wildlife and Fisheries. It often for keeping the oil out of the lake White House a detailed list of con- Roundtable, a gathering of top cor- and speedy and the rest of Europe over the memory reader or HDMI.) Core processor—albeit the lowest- So it is as much a psychological provides safe fishing when the Gulf should be effective. Local officials cerns about the administration’s porate leaders who have advised the course of the summer under the The new Toshiba sports a big end version—and incorporates an assault as a physical one. is too rough. say areas of commerce other than regulatory agenda, highlighting pro- administration on the economy, to BY WALTER S. MOSSBERG name Portege R700. 500 gigabyte hard disk and 4 gi- Intel technology called Wi-Di But the shallow lake, its southern Tar balls and oil sheen have been fishing aren’t expected to suffer. posals to give unions more tools to identify priorities from among 54 Despite a few drawbacks, I like gabytes of memory to power its which wirelessly beams whatever edge ringed by New Orleans and its reported on the lake’s eastern edge “Because tar balls have gotten into organize workers, new environmen- pages of rules that Roundtable For all the excitement about the R705 and can recommend it to 64-bit version of Windows 7 is on its screen to a TV, via an suburbs, is a crucial part of the and in the Rigolets, a waterway that the basin of the lake isn’t going to tal rules proposed by the Environ- members identified as impediments tablet computers, the traditional consumers willing to pay higher- Home Premium. The Apple and adapter. It also has a couple of area’s environmental, economic and connects the lake to the Gulf eight affect tourism in New Orleans at mental Protection Agency, proposals to economic growth and job recov- clamshell laptop still rules. In fact, than-netbook prices for a speedy, Lenovo have just 2 gigabytes of nice Toshiba software utilities, in- cultural fabric. Massive efforts in to nine nautical miles away. Some all,” said Kelly Schulz, a vice presi- by the Federal Communications ery. The group compiled the rules at the computer industry is working standard-size, but easy-to-tote memory and a maximum storage cluding a handy Bulletin Board the 1980s and ’90s cleaned the lake officials say oil escaped an extensive dent at the New Orleans Convention Commission to impose new controls the request of the White House bud- hard to make it smaller, lighter laptop with good battery life. capacity of 128 gigabytes, though program for organizing files and of decades of contamination from network of protective piping called and Visitors Bureau. on broadband internet providers. get office. and sleeker. This new Toshiba has a dark- both offer solid-state drives ver- another called ReelTime, which shell dredging and dairy farms. boom and skimmer boats only with Still, the lake’s ecosystem is a The Obama Administration is un- Roundtable president John Cas- There have been two broad ap- blue cover and a solid construc- sus the standard mechanical hard lets you quickly find recently used Since then, it has served as a recre- the aid of recent storms and wind concern. Lake Pontchartrain serves der pressure to spur job growth in tellani and Verizon Communica- proaches to this task. One, exem- tion, despite feeling very light in disk on the Toshiba. files by date. ational hub, a fishing grounds and a that pushed it into and through the as a massive estuary with ideal con- an election year, amid signs that tions chief executive Ivan Seiden- plified by netbooks, has been to the hand. The bright, vivid screen The R705 also has better bat- So what about the drawbacks? haven for sea life. Rigolets. ditions for young aquatic life. Be- Congress will not agree to spend berg, chairman of the group, met a shrink the footprint of the ma- is sturdy, and the roomy, well- tery life than the MacBook Air or Well, for one, it has a relatively Last year, the lake yielded more The state has closed 5% of the cause it is shallow—rarely more significant new sums on govern- week ago at the White House with chine, so it’s lighter and cheaper. spaced keyboard is firm, with a ThinkPad X300 series. In my low-end integrated graphics chip. than 2.2 million kilograms of blue lake’s area to fishing because of the than three and a half meters ment stimulus programs. But how National Economic Council Director But this has meant cramped key- large space bar, delete key, tab, tough battery test, where I disable It stuttered repeatedly while crab, shrimp and fin fish valued at oil, and fishermen fret that the re- deep—sunlight can reach its floor to far the administration will go to al- Larry Summers, business liaison boards and screens, and generally backspace, shift and arrow keys. all power-saving features, crank streaming high-definition video strictions will be expanded. foster plants and grasses. That veg- ter its regulatory and tax policies Valerie Jarrett, and two other eco- wimpier processors and battery The touchpad and buttons also are the screen to full brightness, leave from the Web, even on a very fast Kevin Davis, president of St. etation attracts shrimp larvae, crab isn’t clear. Several executives say nomic-council officials to discuss life. generously sized. on the Wi-Fi and play a continu- Internet connection. I found Tammany Parish, which includes larvae and other hatchlings from the they’ll remain skeptical until the “specific examples of regulations The other, pioneered by the The R705 is thicker than the ous loop of music, the R705 got scrolling on the touchpad to be a much of the lake’s northern shore Gulf. president moves to push trade that were burdensome,” a White MacBook Air and the Lenovo MacBook Air, at just over an inch four hours and 29 minutes of bat- bit jerky. And its start-up and re- and many commercial docks and Also in the lake are Rangia clam agreements with Korea, Colombia House official said. ThinkPad X300 series, has been to thick versus about three-quarters tery life. The MacBook Air racked start times were relatively slow, Executive Travel Program marinas, said his parish had at its and other stationary creatures, fin and Panama through Congress, “The administration responded preserve a standard 13-inch of an inch for the Apple. It’s also up three hours and 24 minutes in approaching two minutes. Also, disposal 45,720 meters of boom, 25 fish such as flounder, and manatees bucking Democrats and union sup- very quickly,” Mr. Castellani said. So screen, a roomy keyboard, and thicker than the ThinkPad in some my test, and the X300 just three the R705 lacks Bluetooth connec- skimmer boats and 100 small boats that raise their calves and dine on porters who have held them up for far, he said, “they get an A-plus for Toshiba’s Portege standard processors for decent places and thinner in others. At hours and five minutes. tivity. Finally, it includes an ob- Guests and clients of 320 using nets to catch tar balls. Still, the lake’s vegetation in the summer. years. Mr. Obama has recently called reaching out, and an incomplete for R705, which is just performance, but to pare thick- three pounds, it’s about the same I estimate that in more-normal noxious, prominent “craplet” pro- leading hotels receive given all his constituents have gone “The long-term concern is that if for action on the free-trade deals. policy.” over an inch thick, has ness and weight. But this has weight as the Apple, though it’s use, the R705 could last 5½ hours gram from Best Buy that’s The Wall Street Journal Europe through in the past five years, in- we did get heavier concentration of New financial-markets rules in- “They’re taking a serious look,” a roomy keyboard with meant much higher prices. slightly lighter than the ThinkPad. on a single charge—an impressive basically an ad. daily, courtesy of cluding Hurricane Katrina in 2005 oil, what would it do to the food cluded in an overhaul now moving said Dan DiMicco, chief executive of generously sized keys. Now Toshiba, long known for Unlike the Apple and like the figure, though short of the com- Still, overall, this is a very nice and rebuilding in its wake, some are web in particular, starting from through Congress would not be on steelmaker Nucor Corp., who con- making thin, light, laptops, has in- ThinkPad, the new Toshiba has a pany’s eight-hour claim. There is laptop whose light, thin body panicked about the lake’s fate. [stationary] organisms up the food the table, an administration official tributed to the Roundtable report hides a pretty powerful computer.

“Some are even in tears because web?” said Anne Rheams, executive said. President Barack Obama has and has met separately with eco- Toshiba they were hoping this would be one director of the Lake Pontchartrain made the financial overhaul a prior- nomic officials to discuss regulation Watch Walt Mossberg’s review of of the areas that wouldn’t get hit Basin Foundation, a group chartered ity, and it remains popular despite and job growth. “There’s this com- Toshiba’s Portege R705 at because we’re so far inland, and by the state in 1989 to help lead the criticism in banking circles. mon concern ... that we’re not doing WSJ.com/Tech. Find his columns www.thinkmediaoutdoor.be that it might be one of the last fish- lake cleanup. “That could impact the “The president has said that he the right things yet, and it’s show- and videos at the All Things Digi- ing areas left,” he said. whole ecology of the lake.” is interested and open to the busi- ing up in the jobs numbers.” tal Web site, walt.allthingsd.com. 30 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 7 GLOBAL MARKETS LINEUP U.S. NEWS Commodities Prices of futures contracts with the most open interest Currencies London close on July 9 Global divide EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; ICE-US: ICE Futures U.S.MDEX: Bursa Malaysia Per In Per In | Cumulative change in jobs around the world since the recession began Derivatives Berhad; LIFFE: London International Financial Futures Exchange; COMEX: Commodity Exchange; LME: London Metals Exchange; AMERICAS Per euro In euros U.S. dollar U.S. dollars EUROPE Per euro In euros U.S. dollar U.S. dollars NYMEX: New York Mercantile Exchange;ICE-EU: ICE Futures Europe Argentina peso-a 4.9733 0.2011 3.9360 0.2541 Euro zone euro 1 1 0.7914 1.2636 ONE-DAY CHANGE Contract Contract ChileChile U.K. Commodity Exchange Last price Net Percentage high low Brazil real 2.2248 0.4495 1.7608 0.5679 1-mo. forward 1.0000 1.0000 0.7914 1.2636 A major exporter of such THRIVING STRUGGLING Employment keeps sliding Canada dollar 1.3033 0.7673 1.0315 0.9695 3-mos. forward 0.9999 1.0001 0.7914 1.2636 Chile Corn (cents/bu.) CBOT 395.25 -1.00 -0.25% 705.00 343.25 commodities as copper, Chile in the U.K. as businesses 1-mo. forward 1.3037 0.7671 1.0317 0.9692 6-mos. forward 1.0001 0.9999 0.7915 1.2635 6% Soybeans (cents/bu.) CBOT 953.25 7.25 0.77% 1,555.00 809.75 shed jobs as global and the government grapple 3-mos. forward 1.3046 0.7665 1.0325 0.9685 Czech Rep. koruna-b 25.341 0.0395 20.056 0.0499 BrazilBra Wheat (cents/bu.) CBOT 538.00 -10.50 -1.91 762.75 442.50 6-mos. forward 1.3065 0.7654 1.0340 0.9671 Denmark krone 7.4548 0.1341 5.8999 0.1695 commodity prices slumped with a consumer-debt Live cattle (cents/lb.) CME 91.400 -0.725 -0.79 96.900 86.700 Chile peso 679.22 0.001472 537.55 0.001860 Hungary forint 279.63 0.003576 221.31 0.004519 during the recession. But its 4 hangover and a budget Cocoa ($/ton) ICE-US 2,996 27 0.91 3,522 2,237 Colombia peso 2372.13 0.0004216 1877.35 0.0005327 Norway krone 8.0445 0.1243 6.3666 0.1571 relative financial health has deficit even worse than Coffee (cents/lb.) ICE-US 163.85 1.75 180.95 121.75 Hungary 1.08 Ecuador US dollar-f 1.2635 0.7914 1 1 Poland zloty 4.0691 0.2458 3.2204 0.3105 helped it bounce back quickly. those in the U.S. Sugar (cents/lb.) ICE-US 16.61 -0.48 -2.81 22.78 11.79 Mexico peso-a 16.1604 0.0619 12.7897 0.0782 Russia ruble-d 39.037 0.02562 30.895 0.03237 2 Cotton (cents/lb.) ICE-US 74.99 1.00 1.35 100.50 53.87 Peru sol 3.5683 0.2802 2.8240 0.3541 Sweden krona 9.4677 0.1056 7.4929 0.1335 Germany Crude palm oil (ringgit/ton) MDEX 2,300.00 11 0.48 2,725 1,665 Uruguay peso-e 26.661 0.0375 21.100 0.0474 Switzerland franc 1.3365 0.7482 1.0577 0.9454 Brazil Australia Japan Cocoa (pounds/ton) LIFFE 2,385 5 0.21 2,461 1,579 U.S. dollar 1.2635 0.7914 1 1 1-mo. forward 1.3359 0.7485 1.0573 0.9458 Employment took a hit when 0 Deflation and massive Robusta coffee ($/ton) LIFFE 1,709 13 0.77 1,795 1,282 Venezuela bolivar 5.43 0.184281 4.29 0.232848 3-mos. forward 1.3345 0.7493 1.0562 0.9468 the global recession cut government debt are Copper (cents/lb.) COMEX 305.35 3.80 1.26 366.70 166.00 ASIA-PACIFIC 6-mos. forward 1.3322 0.7506 1.0544 0.9484 demand for exports such as SouthSouth Ko KoreaKorerea weighing heavily on regional jet planes, but has Japanese companies' Gold ($/troy oz.) COMEX 1209.80 13.70 1.15 1,266.50 800.00 Australia dollar 1.4441 0.6925 1.1429 0.8750 Turkey lira 1.9621 0.5097 1.5529 0.6440 –2 Canada Japan Silver (cents/troy oz.) COMEX 1807.30 20.10 1.12 1,986.50 1,338.00 China yuan 8.5578 0.1169 6.7729 0.1476 U.K. pound 0.8362 1.1959 0.6618 1.5111 come back strongly, in large confidence and hindering part because Brazil avoided job creation. Aluminum ($/ton) LME 1,992.00 -0.50 -0.03 2,481.50 1,564.50 Hong Kong dollar 9.8242 0.1018 7.7751 0.1286 1-mo. forward 0.8363 1.1958 0.6619 1.5109 part because Brazil avoided Taiwan 3-mos. forward 0.8364 1.1956 0.6620 1.5107 the financial excesses of the Tin ($/ton) LME 17,695.00 45.00 0.25 19,175.00 12,320.00 India rupee 58.9636 0.0170 46.6650 0.0214 the financial excesses of the –4 U.K. Indonesia rupiah 11429 0.0000875 9045 0.0001106 6-mos. forward 0.8367 1.1952 0.6622 1.5102 boom years. Copper ($/ton) LME 6,709.00 39.00 0.58 7,970.00 4,825.00 U.S. Japan yen 111.79 0.008946 88.47 0.011303 MIDDLE EAST/AFRICA U.S. Lead ($/ton) LME 1,830.00 5.00 0.27 2,615.00 1,580.00 1-mo. forward 111.75 0.008949 88.44 0.011307 Bahrain dinar 0.4764 2.0992 0.3770 2.6525 Heavy debts are making it Zinc ($/ton) LME 1,867.00 16.00 0.86 2,659.00 1,490.00 –6 3-mos. forward 111.66 0.008956 88.37 0.011316 Egypt pound-a 7.1991 0.1389 5.6975 0.1755 Australia difficult to restore jobs. Nickel ($/ton) LME 19,185 -115 -0.60 27,590 14,405 6-mos. forward 111.47 0.008971 88.22 0.011335 Israel shekel 4.8874 0.2046 3.8680 0.2585 Strong trade ties with 2008 '09 '10 2008 '09 '10 With government and Crude oil ($/bbl.) NYMEX 76.09 0.65 0.86 132.70 54.69 Malaysia ringgit-c 4.0377 0.2477 3.1955 0.3129 Jordan dinar 0.8949 1.1174 0.7083 1.4119 booming Asian economies consumers facing a long Heating oil ($/gal.) NYMEX 2.0257 0.0204 1.02 3.3990 1.4525 New Zealand dollar 1.7861 0.5599 1.4135 0.7075 Kuwait dinar 0.3677 2.7197 0.2910 3.4364 and a relatively healthy road to financial health and RBOB gasoline ($/gal.) NYMEX 2.0700 0.0189 0.92 2.4410 1.6910 Pakistan rupee 108.413 0.0092 85.800 0.0117 Lebanon pound 1897.22 0.0005271 1501.50 0.0006660 banking system allowed SouthS Korea, Taiwan Canada Germany Hungary banks still cutting back on Natural gas ($/mmBtu) NYMEX 4.418 -0.002 -0.05 10.810 4.140 Philippines peso 58.417 0.0171 46.233 0.0216 Saudi Arabia riyal 4.7386 0.2110 3.7503 0.2666 Australia to get through the TheseT two trade-dominated Banks weathered the crisis Companies avoided mass layoffs Heavily dependent on foreign lending, companies are Brent crude ($/bbl.) ICE-EU 75.65 0.63 0.84 108.50 59.80 Singapore dollar 1.7469 0.5725 1.3825 0.7233 South Africa rand 9.5872 0.1043 7.5875 0.1318 global recession largely economiese suffered a shock when well, but the country’s by sharply cutting the number of investment, including loans reluctant to hire. Gas oil ($/ton) ICE-EU 647.25 4.75 0.74 755.00 499.00 South Korea won 1513.73 0.0006606 1198.00 0.0008347 United Arab dirham 4.6408 0.2155 3.6728 0.2723 unscathed. globalg trade volumes plummeted economy—and its hours their employees worked. denominated in euros, Hungary Taiwan dollar 40.503 0.02469 32.055 0.03120 inin late 2008. But with much workers—suffered due to That has masked the damage the suffered when investors pulled Source: Organization for Economic Cooperation and Development Source: Thomson Reuters; WSJ Market Data Group SDR -f 0.8446 1.1840 0.6684 1.4960 ofo Asia still going strong, they proximity to the U.S. global recession did to Germany’s out and its currency dropped WSJ.com Thailand baht 40.882 0.02446 32.355 0.03091 (Australia, Canada, Chile, Japan, South recovered quickly. export-driven economy. sharply in late 2008. Korea, U.K., U.S); International Labor a-floating rate b-commercial rate c-government rate c-commercial rate d-Russian Central Bank rate f-Special Drawing Rights Organization (all others) Follow the markets throughout the day with updated stock quotes, news and commentary at WSJ.com. from the International Monetary Fund ; based on exchange rates for U.S., British and Japanese currencies. Also, receive email alerts that summarize the day’s trading in Europe and Asia. To sign up, go to WSJ.com/email Note: Based on trading among banks in amounts of $1 million and more, as quoted by Thomson Reuters.

Major stock market indexes Stock indexes from around the world, grouped by region. Shown in local-currency terms. U.S. trails in employment growth Price-to- PREVIOUS SESSION PERFORMANCE Price-to- PREVIOUS SESSION PERFORMANCE earnings ratio* Region/Country Index Close Net change Percentage change Yr.-to-date 52-wk. earnings ratio* Region/Country Index Close Net change Percentage change Yr.-to-date 52-wk. BY MARK WHITEHOUSE ployment in the two Latin American ers—a key driver of the U.S. econ- than in December 2007. exceeding 200% of the country’s an- 23 EUROPE Stoxx Europe 600 250.09 1.49 0.60% -1.2% 26.8% 13 Portugal PSI 20 7317.93 -124.71 -1.68 -13.5 5.4 countries was up 4.5% and 6.8% omy—to pare down their large debt In Asia, the sharp drop in global nual economic output, many compa- 14 Stoxx Europe 50 2430.15 12.51 0.52 -5.8 20.5 ... Russia RTSI 1359.45 3.36 0.25% -4.7 62.8 One year into the global recov- from December 2007, respectively. loads. trade accompanying the recession nies regard higher taxes and auster- 27 Euro Zone Euro Stoxx 255.51 1.27 0.50 -7.0 20.3 10 Spain IBEX 35 10127.3 46.8 0.46 -15.2 8.4 ery, the U.S. is lagging far behind Proximity to the booming econo- As of March, U.S. household debt took a toll on Korea and Taiwan, but ity measures as inevitable, only other major economies in restoring mies of Asia has helped job creation stood at 122% of disposable income, both bounced back quickly as trade adding to their worries. 14 Euro Stoxx 50 2681.20 14.78 0.55 -9.6 17.5 15 Sweden OMX Stockholm 320.17 4.03 1.27 6.9 34.7 jobs lost in the recession. in some cases. Australia has man- down from a peak of 131% in early returned. The two countries, whose As of May, employment in Japan 15 Austria ATX 2333.46 1.91 -6.5 19.0 15 Switzerland SMI 6210.49 54.77 0.89 -5.1 18.6 0.08 A Wall Street Journal analysis of aged to boost total employment by 2008 but still well above the 100% banking systems also survived the was 3.3% down from December 2007. ... Turkey ISE National 100 57150.90 -194.69 8.2 55.4 8 Belgium Bel-20 2462.75 6.76 0.28 -1.9 25.4 -0.34% employment trends in 11 countries 3.7% through May, thanks in part to economists tend to see as sustain- financial crisis well, have already “The risk here for a lot of coun- 11 Czech Republic PX 1147.8 7.0 0.61 2.7 29.2 11 U.K. FTSE 100 5132.94 27.49 0.54 -5.2 24.4 suggests that manageable debt bur- trade in commodities such as iron able. managed to push total employment tries is not a double dip but a pro- 21 Denmark OMX Copenhagen 379.05 -0.41 -0.11% 20.1 44.2 21 ASIA-PACIFIC DJ Asia-Pacific 119.92 1.04 0.87 -2.5 15.3 dens and healthy banking sys- ore with Asian countries that never The picture isn’t much better in back above pre-recession levels. tracted period of stagnation, which 15 Finland OMX Helsinki 6399.45 40.72 0.64 -0.9 19.6 17 Australia SPX/ASX 200 4396.31 39.46 0.91 -9.7 15.9 tems—areas in which the U.S. went into recession. the U.K., where consumers are even Japan offers a troubling example is bad news for creating jobs,” said 14 France CAC-40 3554.48 16.23 0.46 -9.7 19.2 19 China CBN 600 22133.25 599.72 2.79 -23.8 -18.0 doesn’t excel—are proving to be cru- Australia’s banks also emerged more indebted than in the U.S., and for economies such as the U.S. and Nariman Behravesh, the chief econo- 12 Germany DAX 6065.24 29.58 0.49 1.8 32.5 14 Hong Kong Hang Seng 20378.66 328.10 1.64 -6.8 15.1 cial factors in creating jobs. from the financial crisis largely un- where the hard-hit financial sector U.K., which are struggling to gain mist at the IHS Global Insight con- Brazil and Chile, neither of which scathed. accounted for a much larger share of momentum even as governments sultancy. ... Hungary BUX 22593.71 -60.50 -0.27 6.4 57.7 17 India Sensex 17833.54 181.81 1.03 2.1 32.1 suffered banking crises, have seen By contrast, total employment in total employment. build up vast debts. After many The 11 countries in the analysis ... Japan Nikkei Stock Average 9585.32 49.58 -9.1 3.2 19 Ireland ISEQ 2884.23 -10.76 -0.37 -3.0 12.1 0.52 the strongest job growth since the the U.S. in June was down 4.8% from As the country’s new coalition years of falling prices and false re- were chosen because they report 14 Italy FTSE MIB 20478.98 235.25 1.16 -11.9 14.8 ... Singapore Straits Times 2917.17 20.02 0.69 0.7 26.4 beginning of the recession, accord- December 2007. Businesses have government implements harsh eco- coveries, Japanese companies lack jobs data in a relatively timely man- 18 Netherlands AEX 324.42 1.80 0.56 -3.3 33.4 11 South Korea Kospi 1723.01 24.37 1.43 2.4 20.6 ing to data from the Organization been reluctant to hire amid difficul- nomic austerity measures in order the confidence to hire—a problem ner. As a result, many developing 11 Norway All-Shares 398.53 3.79 0.96 -5.1 28.7 17 AMERICAS DJ Americas 288.06 2.52 0.88 -2.8 25.9 for Economic Cooperation and De- ties getting loans from financially to get its budget closer to balance, evident in the country’s persistent countries such as China and India, 17 Poland WIG 40392.05 18.07 0.04 1.0 36.4 15 Brazil Bovespa 63476.32 Closed -7.5 29.0 velopment and the International La- wounded banks and uncertainty hiring remains tepid. In March, total decline in employment. which report infrequently and with 16 Mexico IPC 32004.31 43.67 0.14 -0.4 35.3 bor Organization. In April, total em- about how long it will take consum- employment was still 2.0% lower And with total government debt a large lag, were excluded. Thomson Reuters is the primary data provider for several statistical tables in The Wall Street Journal, including foreign stock quotations, futures and futures options prices, and foreign exchange tables. Reuters real-time data feeds are used *P/E ratios use trailing 12-months, as-reported earnings to calculate various Dow Jones Indexes. Note: Americas index data are as of 5:00 p.m. ET. Sources: Thomson Reuters; WSJ Market Data Group Dow Jones Indexes MSCI indexes Price-to- Price-to- In U.S., value-added tax would be a hard sell Developed and emerging-market regional and country indexes Dividendearnings PERFORMANCE (euros) PERFORMANCE (U.S.dollars) Dividendearnings PERFORMANCE (euros) PERFORMANCE (U.S.dollars) yield* ratio* Dows Jones Index Last Daily 52-wk. Last Daily 52-wk. yield* ratio* Dows Jones Index Last Daily 52-wk. Last Daily 52-wk. from MSCI Barra as of July 09, 2010 examined in the context of...the Two months ago, after pro-VAT director of the nonpartisan Tax largely because value-added taxes 2.35% 16 Global TSM 2197.34 0.71% 21.3% 2.06% 9 Turkey Titans 20 -c 608.40 -0.25% 73.8% 685.20 -0.56% 57.4% Price-to- LOCAL-CURRENCY [ THE OUTLOOK ] overall structure of our tax comments by some high-profile Policy Center think tank. By are imposed on imports at the 2.41 16 Global Dow 1337.40 1.26% 26.8% 1794.46 0.89 14.9 5.68 15 Global Select Div -d 171.80 0.91 42.9 185.77 0.54 29.5 Dividend earnings PERFORMANCE yield ratio Morgan Stanley Index Last Daily YTD 52-wk. system,” John Castellani, figures, the U.S. Senate voted contrast, a VAT “doesn’t interfere border, and refunded to domestic 2.92 13 Global Titans 50 163.60 0.71 23.9 154.38 0.34 12.2 5.96 10 Asia/Pacific Select Div -d 254.09 0.84 22.1 2.60% 15 ALL COUNTRY (AC) WORLD*278.86 -1.20% -6.9% 13.9% BY JOHN D. MCKINNON president of the Business 85-13 to condemn the VAT as “a with where goods are businesses on their exports, 2.84 16 Europe TSM 2330.72 0.22 15.4 4.43 14 U.S. Select Dividend -d 318.83 0.73 30.4 2.70 16 World (Developed Markets) 1,084.87 -1.21 -7.2 12.5 Roundtable, which includes chief massive tax increase.” produced...and doesn’t interfere making a VAT an effective subsidy 2.40 19 Developed Markets TSM 2123.69 0.70 19.8 2.09 18 Islamic Market 1848.58 0.71 19.6 2.50 16 World ex-EMU 129.73 -1.17 -5.1 14.3 At least 139 countries, executives of U.S. multinationals, But the VAT talk has continued with savings, investment and for U.S. producers, according to 2.26 10 Emerging Markets TSM 3988.90 0.85 35.5 2.62 13 Islamic Market 100 1769.60 0.87 23.6 1913.26 0.50 12.0 2.50 16 World ex-UK 1,085.83 -1.18 -6.6 12.8 including most major economies testified at the hearing. in Washington, as political leaders capital formation.” the advocates. (Some experts 3.25 24 Africa 50 841.40 0.33 24.3 674.69 -0.04 12.7 3.48 12 Islamic Turkey -c 1541.20 0.43 47.0 2980.01 0.11 33.2 3.20 16 EAFE 1,410.40 -1.49 -10.8 7.9 except the U.S., levy a value-added The VAT is a tax on sales. It’s confront the challenge of bringing A White House spokeswoman disagree.) 2.61 13 BRIC 50 468.30 1.50 46.4 563.99 1.13 32.6 2.85 15 Sustainability 856.90 0.84 30.3 913.98 0.47 18.1 2.20 14 Emerging Markets (EM) 940.75 -1.12 -4.9 23.6 tax on goods and services. similar to a retail sales tax, but the nation’s soaring deficits under said President Barack Obama “has Still, there are many reasons 3.68 17 GCC 40 532.20 0.44 11.8 426.75 0.07 1.3 4.51 19 Brookfield Infrastructure1652.60 0.59 38.9 1990.48 0.22 25.9 3.60 14 EUROPE 86.15 1.03 -2.4 20.0 But as the U.S. faces deficits, typically collected all along the control. The talk will likely get not proposed this idea nor is it why the VAT remains a heavy lift: 2.03 19 U.S. TSM 11115.64 0.81 24.6 1.39 22 Luxury 996.40 1.36 52.3 1067.20 0.99 38.0 3.80 14 EMU 147.42 -1.48 -18.3 2.8 talk of adopting one has become production process, and louder for at least three reasons: under consideration.” As a consumption tax, the VAT 6.08 22 Kuwait Titans 30 -c 182.19 -12.1 3.15 10 UAE Select Index 218.17 0.00 0.4 3.50 15 Europe ex-UK 93.25 0.98 -3.5 19.2 more commonplace and is likely businesses get a credit for VAT First, the VAT raises a lot of Second, many U.S. hits lower-income earners 1.71 RusIndex Titans 10 -c 3239.30 0.56 71.3 5239.78 0.31 46.6 DJ-UBS Commodity 138.40 0.84 22.9 126.94 0.47 11.4 4.90 11 Europe Value 92.52 1.22 -7.0 15.7 to intensify. The latest rumblings they pay to others. A car maker, money, and Congress and the multinationals suspect they might disproportionately. Fixing that *Fundamentals are based on data in U.S. dollar. Footnotes: a-in US dollar. b-dividends reinvested. c-in local currency. Note:All data as of 2 p.m.ET. Source: DowJones Indexes 2.40 17 Europe Growth 77.73 0.86 2.1 24.2 came earlier this month, at a for instance, would collect the tax White House need a lot to avoid have little choice but to accept a problem probably requires 2.40 19 Europe Small Cap 165.38 1.10 5.2 31.7 meeting of a White House from customers on all the cars it politically difficult spending cuts. VAT if they hope to avoid further offsetting the VAT with some kind Cross rates U.S.-dollar and euro foreign-exchange rates in global trading 2.30 8 EM Europe 290.95 0.22 4.4 43.2 commission looking for ways to sells, but get a credit for the VAT According to one recent estimate, increases in U.S. corporate income of credit for the poor. 3.80 12 UK 1,512.73 1.81 -5.9 19.7 dig the U.S. out of its fiscal hole. it paid on parts it bought to make a VAT of 5% would raise $161 taxes, or even win cuts in current Even with such an offset, Asked by a commission the vehicles. billion a year in 2012. rates. They regard current retailers dislike the idea, because USD GBP CHF SEK RUB NOK JPY ILS EUR DKK CDN AUD 2.90 18 Nordic Countries 148.22 0.06 8.8 31.9 member whether corporate Advocates say a VAT creates And according to some corporate taxes as too high, they think a VAT creates a drag on Australia 1.1429 1.7270 1.0806 0.1525 0.0370 0.1795 0.0129 0.2955 1.4441 0.1937 1.1081 ... 2.00 8 Russia 692.25 -0.62 -7.3 26.5 Canada 1.0315 1.5586 0.9752 0.1377 0.0334 0.1620 0.0117 0.2667 1.3033 0.1748 ... 0.9025 2.40 20 South Africa 706.03 0.40 -0.2 17.7 leaders could live with what is less incentive for avoidance economists, a VAT can produce all particularly given global trends overall spending. Denmark 5.8999 8.9150 5.5780 0.7874 0.1910 0.9267 0.0667 1.5253 7.4548 ... 5.7200 5.1621 2.70 16 AC ASIA PACIFIC EX-JAPAN 388.98 -2.07 -6.6 20.1 known as a VAT, Business compared to a sales tax, while that revenue without discouraging toward reducing them. Some Also, many critics believe the Euro 0.7914 1.1959 0.7482 0.1056 0.0256 0.1243 0.0089 0.2046 ... 0.1341 0.7673 0.6925 1.90 26 Japan 533.90 2.41 -6.1 -6.8 Roundtable officials said they limiting economic damage investment as higher income taxes companies are hoping a VAT VAT could start low—but then be Israel 3.8680 5.8447 3.6570 0.5162 0.1252 0.6075 0.0437 ... 4.8874 0.6556 3.7501 3.3843 2.30 16 China 59.81 0.90 -7.7 8.5 would consider the idea, but only compared to income taxes. But would. would encourage Congress to steadily ratcheted up. Japan 88.4700 133.6826 83.6438 11.8072 2.8636 13.8960 ... 22.8723 111.7863 14.9953 85.7725 77.4068 1.00 19 India 713.81 1.00 0.9 25.5 if Congress agreed to streamline conservative critics worry it’s just “If you’re looking for more streamline and lower the Perhaps the most important Norway 6.3666 9.6203 6.0193 0.8497 0.2061 ... 0.0720 1.6460 8.0445 1.0791 6.1725 5.5705 1.30 11 Korea 479.13 1.54 -0.3 25.3 and lower the U.S. corporate another faucet for government to revenue, I think raising rates corporate tax. objection is purely political. Folk Russia 30.8950 46.6839 29.2096 4.1232 ... 4.8527 0.3492 7.9873 39.0374 5.2366 29.9530 27.0316 income tax. tap. And many business owners under the current income tax Third, even a few domestic wisdom in Washington holds that 2.80 23 Taiwan 269.24 1.18 -9.0 14.8 Sweden 7.4929 11.3221 7.0841 ... 0.2425 1.1769 0.0847 1.9372 9.4677 1.2700 7.2644 6.5559 “We certainly think, like regard it with apprehension, in probably is not a good idea and businesses are beginning to eye every government that has ever 2.00 17 US BROAD MARKET 1,194.64 -0.99 -3.4 17.9 Switzerland 1.0577 1.5982 ... 0.1412 0.0342 0.1661 0.0120 0.2734 1.3365 0.1793 1.0254 0.9254 everything, [a VAT] is something part because of its administrative could do significant economic the VAT as a possibility, despite created a VAT has been voted out 1.40 160 US Small Cap 1,674.83 -1.30 0.2 26.3 U.K. 0.6618 ... 0.6257 0.0883 0.0214 0.1039 0.0075 0.1711 0.8362 0.1122 0.6416 0.5790 that should be examined, but complexity. harm,” says Eric Toder, a co- the administrative burden. That’s at the next election. 2.60 14 EM LATIN AMERICA 3,850.00 -0.68 -6.5 29.4 U.S. ... 1.5110 0.9454 0.1335 0.0324 0.1571 0.0113 0.2585 1.2635 0.1695 0.9695 0.8750 Source: Thomson Reuters via WSJ Market Data Group *Twenty-three developed and 26 emerging markets Source: MSCI Barra 8 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 29 WORLD NEWS BLUE CHIPS BONDS

Below, a look at the Dow Jones Stoxx 50, the biggest and best known companies in Dow Jones Industrial Average P/E: 15 Major players benchmarks Europe, including the U.K. LAST: 10198.03 s 59.04, or 0.58% Somalia has to rummage for cash Stoxx Europe 50: Friday's best and worst... YEAR TO DATE: t 230.02, or 2.2% OVER 52 WEEKS s 2,051.51, or 25.2%

Government, lacking funds to fight militants, hires U.S. lawyers to recover money stashed abroad by past regimes Previous close, in STOCK PERFORMANCE High Company Country Industry Volume local currency Previous session YTD 52-week 11500 BY SARAH CHILDRESS Rio Tinto U.K. General Mining 6,786,826 3,173 3.22% -6.4% 66.8% Close Stretched thin UniCredit Italy Banks 394,276,771 2.05 3.17 -8.3 30.7 Low The cash-strapped Somali gov- ArcelorMittal France Iron & Steel 6,886,138 23.66 2.40 -26.5 12.9 50–day 11000 ernment is searching to recover Somalia government moving average BHP Billiton U.K. General Mining 6,088,876 1,853 1.84 -7.1 42.8 funds locked in bank accounts finances, 2010 t BASF SE Germany Commodity Chemicals 2,627,438 45.75 1.63 5.3 65.4 around the world, in an attempt to 10500 stave off bankruptcy and fund a bat- $125 million tle that has accelerated in recent Societe Generale France Banks 5,118,523 38.40 -0.98% -21.6 7.4 days against an al Qaeda-backed in- $110 million Nokia Finland Telecommunications Equipment 16,436,141 6.68 -0.89 -25.1 -33.7 10000 surgency. Amount Siemens Germany Diversified Industrials 2,617,014 73.22 -0.64 14.0 57.7 Somali and African Union troops government needs BP PLC U.K. Integrated Oil & Gas 50,038,000 364.80 -0.60 -39.2 -21.0 last week launched a counterattack 9500 to operate, France Telecom France Fixed Line Telecommunications 8,205,129 14.95 -0.53 -14.3 -3.9 against Islamic militants in the capi- 100 maintain security tal, Mogadishu, in an effort to carve and pay its out space to govern. At least 48 9000 employees ...And the rest of Europe's blue chips people have been killed, according 9 16 23 30 7 14 21 28 4 11 18 25 2 9 Latest, Latest, May June July to medical personnel. in local STOCK PERFORMANCE in local STOCK PERFORMANCE The government of President Company/Country (Industry) Volume currency Latest YTD 52-week Company/Country (Industry) Volume currency Latest YTD 52-week Note: Price-to-earnings ratios are for trailing 12 months Sheikh Sharif Sheikh Ahmed con- 75 Intesa Sanpaolo 91,033,789 2.43 1.36% -23.0% 11.8% Deutsche Bank 3,916,823 49.25 0.48% -0.3% 12.8% trols only a small area of the city, Italy (Banks) Germany (Banks) DJIA component stocks Astrazeneca 3,586,308 3,222 1.19 10.7 21.4 Anglo American 4,252,824 2,422 0.41 -10.7 46.4 with much of the largely lawless U.K. (Pharmaceuticals) U.K. (General Mining) Volume, CHANGE country under the sway of clans, pi- 2010 Shortfall Royal Dutch Shell A 6,108,657 21.06 1.18 -0.2 25.8 GDF Suez 3,595,335 24.97 0.40 -17.6 4.9 Stock Symbol in millions Latest Points Percentage rates or militants from the al Qaeda- U.K. (Integrated Oil & Gas) France (Multiutilities) AT&T T 19.6 $24.83 0.26 1.06% ENI 14,226,721 15.61 1.17 -12.3 -1.6 Tesco 26,501,285 395.05 0.28 -7.7 10.5 Alcoa AA 21.0 10.94 0.22 2.05 backed group, al Shabaab. Italy (Integrated Oil & Gas) U.K. (Food Retailers & Wholesalers) Mr. Ahmed has reached out to 50 AmExpress AXP 8.3 42.58 0.46 1.09 SAP AG 2,959,519 37.22 1.14 12.8 30.3 Diageo 2,559,492 1,088 0.28 0.4 25.3 BankAm BAC 86.3 15.11 0.25 1.68 neighbors to support the fight. A Germany (Software) U.K. (Distillers & Vintners) Boeing BA 3.1 64.66 –0.07 –0.11 special summit of East African lead- $22 million BNP Paribas 4,540,300 50.09 1.05 -10.4 13.7 Telefonica 20,578,365 16.21 0.25 -17.0 3.9 Expected revenue France (Banks) Spain (Fixed Line Telecommunications) Caterpillar CAT 6.5 64.72 1.55 2.45 ers this week ordered the deploy- Chevron CVX 11.4 71.84 1.43 2.03 through customs Banco Bilbao Vizcaya Argentaria 29,823,578 9.65 1.05 -24.2 11.8 Banco Santander 60,238,153 9.97 0.19 -13.7 22.0 ment of 2,000 additional troops to Spain (Banks) Spain (Banks) CiscoSys CSCO 41.5 22.70 0.15 0.67 Somalia to strengthen the 6,000- duties ABB Ltd. 7,027,292 19.73 0.97 -1.1 24.9 Vodafone Group 67,071,091 143.50 0.14 -0.1 27.8 CocaCola KO 6.5 52.40 –0.02 –0.04 Switzerland (Industrial Machinery) U.K. (Mobile Telecommunications) troop African Union peacekeeping 25 Disney DIS 8.5 33.75 0.41 1.23 Roche Holding 2,298,084 150.30 0.94 -14.5 3.4 Daimler AG 3,677,766 41.64 0.13 11.8 71.8 mission. Switzerland (Pharmaceuticals) Germany (Automobiles) DuPont DD 6.0 36.90 0.61 1.68

To keep itself running, Mr. Reuters $0.52 million Sanofi-Aventis 3,581,510 47.54 0.93 -13.7 15.2 ING Groep 21,638,919 6.83 0.12 -1.0 39.3 ExxonMobil XOM 26.0 58.78 –0.03 –0.05 France (Pharmaceuticals) Netherlands (Life Insurance) Ahmed’s government is trying to re- A fighter from al Shabaab, the Islamist insurgency trying to unseat the government of Somalia, runs from a burned Donor money GenElec GE 46.0 14.95 0.12 0.81 plenish its coffers a few million dol- African Union tank in the capital, Mogadishu, on July 2. Assicurazioni Generali 5,251,408 15.24 0.93 -19.0 11.2 Nestle S.A. 4,689,489 51.95 0.10 3.5 27.0 HewlettPk HPQ 12.7 45.25 –0.23 –0.51 remaining from Italy (Full Line Insurance) Switzerland (Food Products) HomeDpt HD 13.5 28.26 0.11 0.39 lars at a time. Previous Somali re- Allianz SE 1,669,716 83.91 0.89 -3.7 34.9 Deutsche Telekom 14,117,903 9.97 0.02 -3.1 25.1 2009 Intel INTC 52.8 20.24 0.14 0.70 gimes have left at least $100 million when Mr. Barre’s regime collapsed ties that was seen by The Wall That can be complicated in some 0 Germany (Full Line Insurance) Germany (Mobile Telecommunications) in overseas accounts—nearly in 1991. Street Journal. countries that lack full diplomatic Credit Suisse Group 4,535,067 44.52 0.88 -13.0 -6.6 GlaxoSmithKline 14,679,296 1,142 ... -13.5 5.2 IBM IBM 3.9 127.96 –0.01 –0.01 Sources: Somali government budget; Switzerland (Banks) U.K. (Pharmaceuticals) enough to keep the government run- For the past two decades, Mr. A representative of Shulman ties with Somalia, including the U.S., JPMorgChas JPM 30.4 38.85 0.69 1.81 government accounting figures Novartis 3,751,361 52.25 0.87 -7.5 22.8 L.M. Ericsson Telephone Series B 6,065,350 82.35 -0.06 25.0 11.9 JohnsJohns JNJ 12.1 60.54 –0.84 –1.37 ning for a year—according to people Amalow has worked with banks to Rogers confirmed that the firm was where some of the bank accounts Switzerland (Pharmaceuticals) Sweden (Communications Technology) KftFoods KFT 6.0 28.99 –0.04 –0.14 familiar with the matter. ensure that the accounts couldn’t be working to recover assets on behalf are located. Though the U.S. sup- UBS 7,594,694 15.13 0.87 -5.7 19.8 British American Tobacco 2,755,348 2,209 -0.11 9.5 30.3 McDonalds MCD 4.5 69.22 0.20 0.29 “It was something very impor- accessed by anyone until an estab- of the Somali government. The firm ports the Somali government, it has country’s first published budget in Switzerland (Banks) U.K. (Tobacco) Bayer AG 1,887,275 46.40 0.86 -17.1 30.1 RWE AG 1,325,238 54.92 -0.29 -19.2 4.0 Merck MRK 12.0 36.30 0.44 1.23 tant, to return the Somali republic’s lished central government could has experience in tracing and recov- yet to establish formal diplomatic two decades—is themed “Keeping Germany (Specialty Chemicals) Germany (Multiutilities) Microsoft MSFT 53.8 24.27 –0.14 –0.57 frozen assets,” said a Somali official claim them, according to a person ering assets, often for companies or ties with the administration. Our Heads Above the Water.” The Total S.A. 5,159,553 38.30 0.67 -14.9 6.4 AXA 6,147,421 13.29 -0.37 -19.6 15.7 Pfizer PFE 32.6 14.77 –0.05 –0.34 who is familiar with the effort. “It familiar with the matter. wealthy individuals. A U.S. State Department spokes- government estimates it needs France (Integrated Oil & Gas) France (Full Line Insurance) ProctGamb PG 9.6 61.75 –0.20 –0.32 Unilever 3,985,985 22.73 0.66 -0.1 32.7 E.ON AG 5,640,961 22.74 -0.46 -22.2 -0.6 3M MMM 2.8 82.16 0.94 1.16 could help restore the country’s lost Mr. Amalow declined to com- Work on recovering the money man didn’t respond to requests for about $110 million per year to boost Netherlands (Food Products) Germany (Multiutilities) TravelersCos TRV 3.1 51.15 1.06 2.12 life.” ment. Somali officials familiar with began in earnest in February. At comment on the collection effort. its security sector and pay govern- Iberdrola 20,990,013 5.16 0.64 -22.7 -4.0 BG Group 5,390,354 1,082 -0.46 -3.6 10.4 The missing funds were stashed the matter said the president had least $1.5 million has been recov- U.S. officials have said the cur- ment employees—which is far short Spain (Conventional Electricity) U.K. (Integrated Oil & Gas) UnitedTech UTX 2.9 67.51 0.28 0.42 away in U.S. and European bank ac- instructed them not to discuss the ered from European banks so far, rent government represents Soma- of the $22 million it expects to earn HSBC Holdings 25,029,499 627.10 0.63 -11.5 26.7 Barclays 48,347,883 300.45 -0.51 8.9 4.3 Verizon VZ 18.3 26.65 –0.13 –0.49 U.K. (Banks) U.K. (Banks) counts under the last strong federal matter publicly until it was con- according to a Somali government lia’s best hope for stability after in customs duties this year. Somalia WalMart WMT 11.6 49.43 0.25 0.51 government—led by Mohamed Siad cluded, but some shared details on official familiar with the process. He nearly two decades of conflict. The relies instead on donor support to Sources: Thomson Reuters Source: WSJ Market Data Group Barre nearly 20 years ago—and the condition of anonymity. declined to offer further details. U.S. has given the government pay civil servants and government last government, of President Ab- Last year, President Ahmed ap- The Somali government needed weapons, assisted with efforts to troops, who are liable to defect dullahi Yusuf Ahmed, who resigned pointed Mr. Amalow to lead the ef- help collecting the funds because train its troops and invested in the without a regular monthly salary. in 2008. fort to recover the funds. The gov- many of the accounts have become African Union peacekeeping mission Yet donors have given little Credit derivatives Credit-default swaps: European companies Ali Amalow, the head of the cen- ernment contracted Maryland-based dormant. And banks, as part of their that protects the weak Mogadishu money to the Somali government di- Tracking Spreads on credit derivatives are one way the market rates Atitsmostbasic,thepricingofcredit-defaultswapsmeasureshowmuchabuyerhastopaytopurchase-and tral bank under Mr. Barre, kept a law firm Shulman, Rogers, Gandal, normal compliance process, are typ- regime. rectly, in part due to concerns about creditworthiness. Regions that are treading in rough waters can see detailed roster of the funds, and Pordy & Ecker, P.A., to help recover ically required to ensure those at- Yet the Somali government isn’t accountability. By December, the how much a seller demands to sell-protection from default on an issuer's debt. The snapshot below gives a spreads swing toward the maximum—and vice versa. Indexes below sense which way the market was moving yesterday. brushed off attempts by various the assets, according to a copy of tempting to access the account merely weak, it is nearly broke. Its government had a little less than $3 credit are for five-year swaps. warlords to retrieve the money the agreement between the two par- should be authorized to do so. 2010 budget—believed to be the million from donors in its coffers. Markit iTraxx Indexes SPREAD RANGE, in pct. pts. Mid-spread, since most recent roll Showing the biggest improvement... And the most deterioration markets Index: series/version in pct. pts. Mid-price Coupon Maximum Minimum Average CHANGE, in basis points CHANGE, in basis points Europe: 13/1 1.18 99.18% 0.01% 1.42 0.75 1.07 Yesterday YesterdayFive-day 28-day Yesterday YesterdayFive-day 28-day Eur. High Volatility:13/1 1.75 96.61 0.01 2.16 1.11 1.56 Caja de Ahorros del Pilkington Group 66 ...... –4 Mediterraneo 642 –75 –87 –40 dealmakers Europe Crossover:13/2 5.33 98.69 0.05 5.88 5.28 5.60 Eneco Hldg 54 ...... BP 387 –49 –146 –70 Six months on, push for Haiti aid falters Asia ex-Japan IG:13/1 1.32 98.52 0.01 1.72 0.87 1.20 Lanxess 128 ... 4–8 Brit Awys PLC 534 –36 –66 –133 Japan: 13/1 1.30 98.56 0.01 1.76 0.85 1.23 Schneider Elec 65 ... –3 –6 TUI AG 788 –34 –133 –130 BY JOSÉ DE CÓRDOBA with the United Nations, says one head of the U.N.’s humanitarian re- estimates the value of the assets to Almeida, the IADB’s Haiti head of Note: Data as of July 8 Linde 62 ... 14 Kabel Deutschland GmbH 507 –27 –50 –83 big achievement is the formation of lief program, says the effort re- which no one can claim title at mission. In percentage points BASF Specialty Chems Hldg 26 1 ...... Spreads Alcatel Lucent 727 –27 –40 –78 PORT-AU-PRINCE, Haiti—Traffic an interim commission with both quires a massive influx of heavy about $5.2 billion, roughly the same In an effort to address the land- Index roll Debenhams Fin Hldg 176 1 –1 1 Asia ex-Japan IG 2.00 FIAT 447 –26 –45 –75 inches past mountains of rubble. Haitian members and representa- equipment, and he is searching for amount that has been pledged for use and ownership problem, Cheryl Spreads on five- Tesco PLC 87 1 –4 –1 t Wind Acquisition Fin 681 –26 –42 –48 Tropical rains pound refugee camps tives of major donors to oversee $120 million to remove the worst of the first two years of Haiti’s recon- Mills, counselor to Secretary of year swaps for 1.50 Six Continents 57 1 ... –2 Virgin Media Fin 517 –26 –41 –80 where hundreds of thousands of major countrywide reconstruction the rubble from Port-au-Prince. struction. The loss of documents in State Hillary Clinton, pressed the corporate debt; Alliander 57 1 11 1.00 Codere Fin Luxembourg 785 –25 –82 –66 people huddle amid the stench of projects during the next 18 months. Little is available for such proj- the earthquake makes that situation Haitian government to assign offi- based on Markit Source: Markit Group

excrement. Six months after Janu- The commission, which was created ects, as most money from donor na- worse. Most Haitians seeking to cials to streamline solving land dis- iTraxx indexes. t 0.50 ary’s earthquake devastated Haiti, and received congressional approval tions and charities are earmarked start over can’t access bank credit putes and award title when neces- Australia 0 the process of reconstruction ap- in just two months, was seen as nec- for emergency relief—food, shelter because they have no collateral to sary. But land is a tricky political Jan. Feb. Mar. April May June July Europe: Bank revenues from equity capital markets pears to have come to a halt. essary before international donors and medicine. One reason the gov- offer up. The failure to demonstrate issue in Haiti, which was the world’s 2010 Billions of dollars in pledged aid would release rebuilding funds. ernment has had a difficult time clear title acts as a brake to devel- first black republic when it was Source: Markit Group Behind every IPO, n Equity capital markets n Debt capital markets (both in billions, left axis) have yet to arrive. Decisions on how Progress on setting up commissions, dealing with basic issues such as re- opment, affecting small investors founded in 1804 after a slave revolt follow-on or to spend the money have not begun however, offers little consolation for settlement: It is often impossible to and multinational lenders alike. against France. Founder Jean- convertible equity 12 60% to be made. An estimated one mil- many Haitians. determine who owns homes and Days after the temblor, officials Jacques Dessalines prohibited offering is one or ECM as a percentage of total lion Haitians remain displaced. And The rubble is the most visible land. A decade ago, 97% of rural res- from the Haitian government and whites from owning property. more investment (right axis) everywhere, there is rubble. sign of the lack of progress. The 7.0- idents in Haiti and 68% of city resi- the Inter-American Development Haitian officials say privately t banks. At right, 8 40 “After six months, we have not magnitude temblor left 20 million dents lacked clear title to their Bank believed they had found a that President René Préval has investment banks moved an inch,” says Jean-Guy Noél, cubic meters, or 700 million cubic housing, according to a study by Pe- large piece of land the bank could balked on giving the commission historical and year- a businessman who runs a money- feet, of debris, the U.N. estimates. ruvian economist Hernando de Soto. acquire to build a tent city to house broader powers over land rights. A WSJ.com to-date revenues 4 20 transfer service. Adds Gérard Brun, Cleanup efforts so far have made a “Eighty-two percent of real es- 10,000 displaced Haitians. top Haitian official said Mr. Préval from global equity- Follow the markets throughout the day, with updated stock a member of a government commis- minor dent. For the most part, orga- tate and 68% of businesses in Haiti Two months later, the bank believes it isn’t politically advisable capital-market sion charged with planning the fu- nized rubble removal is in the hands are in the extralegal economy,” says pulled the plug on the $3 million for a commission, half of whose quotes, news and commentary at WSJ.com. (ECM) deals 0 0 ture of the capital, Port-au-Prince: of thousands of Haitians who work Mr. de Soto, who has offered the in- project after it found “the person members are foreigners, to be final Also, receive emails that summarize the day’s trading in Eu- “Everything is stalling.” with picks, shovels and wheelbar- formation to a U.N. commission on who claimed control of the land judge of land issues “in the land of rope and Asia. To sign up, go to WSJ.com/Email. 2004 2005 2006 2007 2008 2009 2010 Leslie Voltaire, Haiti’s liaison rows for $5 a day. Nigel Fisher, the legal empowerment of the poor. He wasn’t the owner,” says Eduardo Dessalines.” Source: Dealogic 28 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 9 Advertisement [ INTERNATIONAL INVESTMENT FUNDS www.wsj.com/funddata ] Advertisement WORLD NEWS

NAV —%RETURN— NAV —%RETURN— NAV —%RETURN— NAV —%RETURN— FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR

Pictet-Conv. Bonds-P EUR EU BD LUX 07/08 EUR 99.37 NS NS NS Asset Sele C H-CHF OT OT LUX 07/09 CHF 93.89 -2.5 0.1 NS Asset Sele Original D GBP EU BA LUX 07/09 GBP 99.96 -2.0 0.8 NS Pictet-Digital Comm-P USD OT EQ LUX 07/08 USD 116.57 -0.9 24.9 3.1 Asset Sele C H-GBP OT OT LUX 07/09 GBP 95.43 -2.2 1.0 NS Asset Sele Original ID GBP EU BA LUX 07/09 GBP 99.59 -2.0 0.5 NS Pictet-Eastern Europe-P EUREU EQ LUX 07/08 EUR 343.31 8.9 67.2 -6.7 Asset Sele C H-JPY OT OT LUX 07/09 JPY 9465.43 -2.1 0.6 NS Pictet-Emerging Markets-P USDGL EQ LUX 07/09 USD 498.52 -7.6 24.4 -9.6 Asset Sele C H-NOK OT OT LUX 07/09 NOK 109.44 -1.7 1.3 NS Who could be Japan’s Pictet-Eu Equities Sel-P EUREU EQ LUX 07/08 EUR 408.65 -0.7 24.0 -6.4 Asset Sele C H-SEK OT OT LUX 07/09 SEK 135.75 -2.5 0.2 7.2 Pictet-EUR Bonds-P EU BD LUX 07/08 EUR 397.43 3.4 6.0 5.7 Asset Sele C H-USD OT OT LUX 07/09 USD 95.19 -2.3 0.7 NS n BANC INTERNACIONAL D'ANDORRA. BANCA MORA. Pictet-EUR Bonds-Pdy EU BD LUX 07/08 EUR 291.44 3.4 6.0 5.7 Asset Sele CG-EUR OT OT LUX 07/09 GBP 96.92 -2.1 NS NS Avgd. Meritxell 96, Andorra la Vella. Andorra. Ph. +376.884884 www.bibm.ad Pictet-EUR Corporate Bonds-PEU BD LUX 07/08 EUR 151.33 2.3 10.3 8.3 Asset Sele D H-SEK OT OT LUX 07/09 SEK 125.21 -2.5 0.3 NS n SG ASSET MANAGEMENT HTTP://WWW.SGAM.COM Andfs. Anglaterra UK EQ AND 07/08 GBP 7.65 -7.1 20.2 -2.3 Pictet-EUR Corporate Bonds-PdyEU BD LUX 07/08 EUR 102.59 2.3 10.3 8.3 Choice Global Value -C- GL EQ LUX 07/09 SEK 72.76 -5.8 15.0 -9.9 Andfs. Borsa Global GL EQ AND 07/08 EUR 5.99 -7.8 14.4 -13.2 Pictet-EUR High Yield-P EU BD LUX 07/08 EUR 152.22 3.5 28.2 7.2 Choice Global Value -D- GL EQ LUX 07/09 SEK 67.87 -5.7 15.1 -9.8 A company of Amundi Group Andfs. Emergents GL EQ AND 07/08 USD 15.73 -9.4 25.1 -6.7 Pictet-EUR High Yield-Pdy EU BD LUX 07/08 EUR 83.44 3.5 28.1 7.2 Choice Global Value -I- GL EQ LUX 07/09 EUR 6.84 1.1 33.4 -9.8 Bonds ConvEurope A EU BD LUX 07/08 EUR 31.35 5.7 12.3 2.1 next prime minister? Andfs. Espanya EU EQ AND 07/08 EUR 11.68 -16.0 8.0 -8.4 Pictet-EUR Liquidity-P EU MM LUX 07/08 EUR 136.08 0.1 0.3 1.3 Choice Japan Fd -C- JP EQ LUX 07/09 JPY 44.83 -4.3 -3.9 -18.9 Bonds Eur Corp A EU BD LUX 07/07 EUR 23.28 0.8 5.6 4.1 Andfs. Estats Units US EQ AND 07/08 USD 13.69 -8.8 14.2 -10.7 Pictet-EUR Liquidity-Pdy EU MM LUX 07/08 EUR 96.75 0.1 0.3 1.3 Choice Japan Fd -D- JP EQ LUX 07/09 JPY 40.15 -4.3 -3.8 -18.9 Bonds Eur Hi Yld A EU BD LUX 07/07 EUR 21.21 3.0 22.7 5.6 Andfs. Europa EU EQ AND 07/08 EUR 7.05 -10.1 14.0 -9.9 Pictet-EUR Sovereign Liq-P EU MM LUX 07/08 EUR 102.41 0.0 0.1 1.1 Choice Jpn Chance/Risk -C- JP EQ LUX 07/09 JPY 45.83 -10.1 -4.5 -22.2 Bonds EURO A EU BD LUX 07/07 EUR 42.11 2.6 4.7 7.0 BY MIHO INADA the DPJ did well in upper house Kazuhiro Haraguchi Andfs. Franca EU EQ AND 07/08 EUR 8.70 -10.6 13.8 -10.3 Pictet-EUR Sovereign Liq-PdyEU MM LUX 07/08 EUR 99.92 0.0 0.0 1.1 Choice NthAmChance/Risk -C-US EQ LUX 07/09 USD 3.73 -5.7 19.6 -11.7 Bonds Europe A EU BD LUX 07/08 EUR 40.45 3.4 5.2 6.9 elections under his leadership in Mr. Haraguchi, internal affairs Andfs. Japo JP EQ AND 07/08 JPY 473.61 -7.3 2.5 -14.7 Pictet-Europe Index-P EUR EU EQ LUX 07/08 EUR 100.98 -1.0 25.6 -4.1 Ethical Europe Fd -C- EU EQ LUX 07/09 EUR 1.92 -1.9 25.2 -8.5 Bonds US MtgBkSec A US BD LUX 04/29 USD 24.41 -4.7 11.9 0.0 Prime Minister Naoto Kan has 2004, but was ousted from the posi- minister, would be a long shot, but Andfs. Plus Dollars US BA AND 07/08 USD 9.21 -2.5 8.9 -4.5 Pictet-European Sust Eq-P EUREU EQ LUX 07/08 EUR 134.75 0.4 27.7 -3.4 Europe Fund -C- EU EQ LUX 07/09 EUR 2.82 -0.3 28.0 -7.0 Bonds World A GL BD LUX 07/07 USD 42.26 0.6 4.9 4.3 Andfs. RF Dolars US BD AND 07/08 USD 11.64 1.8 8.5 1.4 Pictet-Glo Emerging Debt-P USDGL BD LUX 07/08 USD 254.49 4.4 16.6 12.9 Europe Fund -D- EU EQ LUX 07/09 EUR 1.51 -0.3 28.0 NS Eq. AsiaPac Dual Strategies AAS EQ LUX 07/08 USD 9.46 -9.3 20.4 -3.8 been weakened by Sunday’s elec- tion a year later when the party is seen as a close ally of Mr. Andfs. RF Euros EU BD AND 07/08 EUR 10.90 0.7 8.7 1.6 Pictet-Glo Emerging Debt-PdyGL USD BD LUX 07/08 USD 165.28 4.4 16.6 12.9 Europe Index Fund EU EQ LUX 07/09 EUR 4.03 -2.0 24.7 -8.5 Eq. China A AS EQ LUX 07/08 USD 21.07 -12.7 8.2 -0.2 tion, and his tenure possibly short- took a beating in the lower house Ozawa—and perhaps the candidate Andorfons EU BD AND 07/08 EUR 14.56 0.4 9.7 1.2 Pictet-Greater China-P USD AS EQ LUX 07/09 USD 324.49 -9.1 12.8 -0.4 Global Chance/Risk Fd -C- GL EQ LUX 07/09 EUR 0.64 4.7 30.9 -1.9 Eq. Concentrated Euroland A EU EQ LUX 07/08 EUR 83.47 -10.2 9.0 -12.3 Andorfons Alternative PremiumGL EQ AND 05/31 EUR 101.35 2.4 7.4 -6.1 Pictet-Indian Equities-P USDEA EQ LUX 07/09 USD 367.39 0.3 35.7 9.4 Global Fd -C- GL EQ LUX 07/09 USD 1.97 -7.7 17.1 -12.5 Eq. ConcentratedEuropeA EU EQ LUX 07/08 EUR 26.59 -1.5 22.3 -7.1 ened. Even if he survives the imme- elections. Mr. Okada expressed whom Mr. Ozawa would put forth if Andorfons Mix 30 EU BA AND 07/08 EUR 9.37 -2.0 12.6 -5.7 Pictet-Japan Index-P JPY JP EQ LUX 07/09 JPY 8405.52 -5.4 -0.9 -17.6 Global Fd -D- GL EQ LUX 07/09 USD 1.22 -7.6 17.1 NS Eq. Emerging Europe A EU EQ LUX 07/07 EUR 25.39 7.8 57.7 -15.3 diate fallout from the results in stronger support to raise the unpop- he were seeking to bring Mr. Kan Andorfons Mix 60 EU BA AND 07/08 EUR 8.79 -5.2 13.0 -11.6 Pictet-Japanese Eq 130/30-PJP JPY EQ LUX 07/09 JPY 4267.81 -3.6 1.4 -16.1 Nordic Fd -C- NO EQ LUX 07/09 EUR 6.12 NS NS NS Eq. Equities Global Energy OT EQ LUX 07/08 USD 15.34 -15.4 9.2 -24.5 coming days, he could face pressure ular 5% consumption tax during his down. Mr. Haraguchi, 51, studied at Pictet-Japanese Eq Sel-I JPY JP EQ LUX 07/09 JPY 7347.18 -5.1 -1.2 -20.4 Eq. Euroland A EU EQ LUX 07/08 EUR 10.02 -7.5 15.6 -11.7 n n SEB Fund 2 CHARTERED ASSET MANAGEMENT PTE LTD - TEL NO: 65-6835-8866 Pictet-Japanese Eq Sel-P JPYJP EQ LUX 07/09 JPY 7102.62 -5.4 -1.8 -20.9 Eq. Euroland MidCapA EU EQ LUX 04/30 EUR 14.61 1.4 -45.7 -33.8 from within the Democratic Party of run against Yukio Hatoyama for the Matsushita Institute of Govern- Choice Asia ex. Japan -C- AS EQ LUX 07/09 USD 7.19 -4.1 20.6 1.2 Fax No: 65-6835 8865, Website: www.cam.com.sg, Email: [email protected] Pictet-MENA-P USD OT OT LUX 07/07 USD 44.99 0.3 NS NS Eq. Euroland Small Cap A EU EQ LUX 07/07 EUR 140.17 -0.7 24.4 -5.5 Choice Asia ex. Japan -D- AS EQ LUX 07/09 USD 1.26 -4.1 20.6 NS Japan to step aside before the party party leader last year, but has since ment and Management, a school CAM-GTF Limited AS EQ MUS 07/02 USD 318770.21 16.1 64.0 16.6 Pictet-Pac (ExJpn) Idx-P USDAS EQ LUX 07/09 USD 252.44 -8.6 29.7 -3.2 Currency Alpha EUR -IC- OT OT LUX 07/09 EUR 10.27 -0.3 -2.9 -1.5 Eq. EurolandCyclclsA OT EQ LUX 07/07 EUR 17.64 -0.9 22.5 -7.0 Pictet-Piclife-P CHF CH BA LUX 07/08 CHF 775.54 -2.3 8.2 0.3 leadership vote scheduled for Sep- scaled back the language. Mr. Okada embracing free-market policies that n Currency Alpha EUR -RC- OT OT LUX 07/09 EUR 10.16 -0.5 -3.3 -1.9 Eq. EurolandFinancialA OT EQ LUX 07/08 EUR 9.87 -12.8 13.4 -13.6 DJE INVESTMENT S.A. Pictet-Premium Brands-P EUROT EQ LUX 07/08 EUR 74.78 13.4 52.2 12.8 tember—or risk facing a challenge is known for his clean image as well was funded by the late founder of Currency Alpha SEK -ID- OT OT LUX 07/09 SEK 91.72 -0.3 -3.1 -3.6 Eq. Glbl Emg Cty A GL EQ LUX 07/07 USD 8.26 -14.6 5.5 -14.3 internet: www.dje.lu email: [email protected] phone:+00 352 269 2522 0 fax:+00 352 269 25252Pictet-Russian Equities-P USDEE EQ LUX 07/08 USD 61.79 -4.2 59.8 -18.6 Currency Alpha SEK -RC- OT OT LUX 07/09 SEK 96.24 -0.5 -3.3 -1.9 Eq. Global A GL EQ LUX 07/08 USD 25.92 -6.9 19.6 -8.8 then. Having taken office in early as his strong interest in environ- Panasonic Corp. to nurture Japan’s DJE Real Estate P OT EQ LUX 07/09 EUR 8.90 0.5 -0.1 -3.3 Pictet-Security-P USD GL EQ LUX 07/08 USD 100.30 0.0 24.4 3.6 Generation Fd 80 -C- OT OT LUX 07/09 SEK 7.96 -0.5 14.1 0.0 Eq. Global Resources A GL EQ LUX 07/08 USD 103.55 -5.2 32.9 -14.4 DJE-Absolut P GL EQ LUX 07/09 EUR 204.80 0.0 16.5 -4.4 Pictet-Small Cap Europe-P EUREU EQ LUX 07/08 EUR 478.10 4.5 29.4 -3.3 June, that would make him Japan’s mental policies. leaders. Mr. Haraguchi is known for Nordic Focus SH A NO EQ LUX 07/09 EUR 84.25 3.3 41.5 0.6 Eq. Gold Mines A OT EQ LUX 07/08 USD 31.85 5.1 40.8 5.2 DJE-Alpha Glbl P EU BA LUX 07/09 EUR 171.12 -4.0 10.0 -4.7 Pictet-Timber-P USD GL EQ LUX 07/08 USD 100.78 -6.3 35.9 NS Nordic Focus SH B NO EQ LUX 07/09 SEK 85.64 3.3 41.5 0.6 Eq. India A EA EQ LUX 07/08 USD 130.93 0.1 32.4 10.2 fifth consecutive premier unable to Seiji Maehara his calls to shift power from the DJE-Div& Substanz P EU EQ LUX 07/09 EUR 216.68 0.7 20.8 -0.1 Pictet-USA Index-P USD US EQ LUX 07/08 USD 87.45 -4.4 21.6 -6.7 Nordic Focus SH C NO EQ LUX 07/09 NOK 84.57 3.3 41.5 0.6 Eq. Japan CoreAlpha A JP EQ LUX 07/08 JPY 7270.07 0.2 -1.6 -8.6 hold the title for more than a year. Mr. Maehara, Japan’s young and central government to regions and DJE-Gold&Resourc P OT EQ LUX 07/09 EUR 187.37 10.0 42.9 1.5 Pictet-USD Government Bonds-PUS BD LUX 07/08 USD 535.44 5.6 5.7 5.7 Russia Fd -C- EE EQ LUX 07/09 EUR 9.46 7.5 75.0 -6.7 Eq. Japan Sm Cap A JP EQ LUX 07/08 JPY 1026.35 -4.0 -2.9 -10.9 Pictet-USD Government Bonds-PdyUS BD LUX 07/08 USD 382.86 5.6 5.7 5.7 DJE-Renten Glbl P EU BD LUX 07/09 EUR 135.53 3.8 8.5 6.2 Eq. Japan Target A JP EQ LUX 07/08 JPY 1641.21 0.2 -7.2 -7.1 One factor keeping Mr. Kan ambitious transport minister, is an- has spoken out against raising the Pictet-USD Liquidity-P US MM LUX 07/08 USD 131.03 0.0 0.1 0.8 LuxPro-Dragon I AS EQ LUX 07/09 EUR 145.84 -7.7 14.1 7.9 n SEB Fund 3 Eq. Latin America A GL EQ LUX 07/07 USD 107.80 -7.3 37.6 -10.5 afloat, at least for now: the lack of other candidate for the top post and consumption tax before economic Pictet-USD Liquidity-Pdy US MM LUX 07/08 USD 84.85 0.0 0.1 0.8 LuxPro-Dragon P AS EQ LUX 07/09 EUR 141.55 -8.0 13.5 7.4 Ethical Glbl Index Fd -D- GL EQ LUX 07/09 USD 0.73 -11.9 14.7 -10.8 Eq. US ConcenCore A US EQ LUX 07/07 USD 20.99 -7.1 19.0 -4.6 Pictet-USD Sovereign Liq-P US MM LUX 07/08 USD 101.57 0.0 0.0 0.7 an obvious successor. Here’s a look has made no secret of his ambitions recovery has taken root. LuxTopic-Aktien Europa EU EQ LUX 07/09 EUR 16.79 -5.2 12.1 2.4 Ethical Glbl lndex Fd -C- GL EQ LUX 07/09 USD 0.76 NS NS NS Eq. US Focused A US EQ LUX 07/07 USD 14.71 -7.3 15.1 -18.1 Pictet-USD Sovereign Liq-PdyUS MM LUX 07/08 USD 100.07 0.0 0.0 0.7 LuxTopic-Pacific AS EQ LUX 07/09 EUR 17.86 9.0 37.1 2.5 Ethical Sweden Fd -D- NO EQ LUX 07/09 SEK 44.30 6.5 32.4 13.1 Eq. US Lg Cap Gr A US EQ LUX 07/07 USD 13.94 -8.6 15.2 -13.9 at those considered most likely to to one day rule the country. Mr. Yoshito Sengoku Pictet-Water-P EUR GL EQ LUX 07/08 EUR 134.49 7.7 26.8 2.2 Index Linked Bd Fd SEK -D- OT BD LUX 07/09 SEK 13.13 2.2 4.8 4.1 Eq. US Mid Cap A US EQ LUX 07/07 USD 30.01 0.4 35.1 -5.5 follow him at the helm should he Maehara, 48, openly criticized Prime The 64-year-old chief cabinet n HSBC ALTERNATIVE INVESTMENTS LIMITED Pictet-World Gvt Bonds-P USDEU BD LUX 07/08 USD 165.95 1.0 3.6 4.1 Medical Fd -D- OT EQ LUX 07/09 USD 3.07 -7.7 11.7 -5.5 Eq. US Multi Strg A US EQ LUX 07/07 USD 20.02 -5.9 19.5 -11.6 T +44 20 7860 3074 F + 44 20 7860 3174 www.hail.hsbc.com Pictet-World Gvt Bonds-Pdy USDEU BD LUX 07/08 USD 134.58 1.0 3.6 4.1 Short Medium Bd Fd SEK -D-NO MM LUX 07/09 SEK 8.56 -0.1 0.0 1.1 step aside. Minister Hatoyama for a lack of secretary is loyal to Mr. Kan and is Eq. US Rel Val A US EQ LUX 07/08 USD 19.30 -6.3 20.9 -10.8 n Technology Fd -C- OT EQ LUX 07/09 USD 0.20 -5.9 23.0 NS HSBC Portfolio Selection Fund n POLAR CAPITAL PARTNERS LIMITED Eq. US Sm Cap Val A US EQ LUX 07/08 USD 15.14 -5.1 22.4 -14.8 Katsuya Okada leadership, and also Ichiro Ozawa, viewed as a fiscal hawk, calling for Sel Emerg Mkt Debt GL BD GGY 12/31 USD 350.10 42.6 54.7 6.4 Technology Fd -D- OT EQ LUX 07/09 USD 2.38 -5.9 23.0 -0.8 International Fund Managers (Ireland) Limited PH - 353 1 670 660 Fax - 353 1 670 1185 Money Market EURO A EU MM LUX 07/07 EUR 27.44 0.2 0.4 1.6 Mr. Okada, the foreign minister, the powerful former DPJ secretary- debate to raise the consumption tax. Sel Emerg Mkt Equity GL EQ GGY 12/31 USD 207.66 63.0 73.6 -11.3 U.S. Index Fd -C- US EQ LUX 07/09 USD 1.75 -5.4 21.4 -7.8 Global Technology OT EQ IRL 07/08 USD 13.55 0.7 29.2 5.7 Money Market USD A US MM LUX 07/07 USD 15.85 0.1 0.2 0.9 Sel Euro Equity EUR OT OT GGY 12/31 EUR 96.29 32.6 27.0 -17.7 U.S. Index Fd -D- US EQ LUX 07/09 USD 1.73 -6.3 20.3 -8.2 has taken the lead in negotiations general, for alleged mishandling of While the lawyer-turned-politician Japan Fund USD JP EQ IRL 07/09 USD 16.36 3.0 5.0 3.5 Sel European Equity EU EQ GGY 12/31 USD 181.94 42.7 49.9 -16.8 World Fd -C- NO BA LUX 07/09 USD 27.86 -2.7 23.0 NS with the U.S. over the military base political funds. An only child, Mr. used to be a member of the Socialist Polar Healthcare Class I USD OT EQ IRL 07/08 USD 11.95 -7.6 12.4 NS World Fd -D- NO BA LUX 07/09 USD 2.08 -4.4 20.9 -6.4 Sel Glob Equity GL EQ GGY 12/31 USD 189.25 35.2 42.1 -15.7 Polar Healthcare Class R USDOT EQ IRL 07/08 USD 11.89 -7.9 11.7 NS in Okinawa, steering the new gov- Maehara attended high school and Party, he now embraces free-market Sel Glob Fxd Inc GL BD GGY 12/31 USD 143.46 11.4 15.8 -1.4 n SEB Fund 4 (Clockwise from top left): Retuers (3), Bloomberg News ernment to reverse course and ac- the prestigious Kyoto University on policies and has been critical of Sel Pacific Equity AS EQ GGY 12/31 USD 143.75 68.5 80.5 -7.1 n Hemisphere Management (Ireland) Limited Short Bond Fd EUR -C- EU MM LUX 07/09 EUR 1.27 -0.1 -0.2 0.1 Sel US Equity US EQ GGY 12/31 USD 123.56 24.0 30.0 -14.2 Discovery USD A OT OT CYM 05/31 USD 109.20 10.8 12.5 12.2 Short Bond Fd EUR -D- EU MM LUX 07/09 EUR 0.49 -1.3 -1.4 NS Clockwise from top left: Japan’s Foreign Minister Katsuya Okada, Transport cept the American position. Mr. scholarships. At 43, he briefly be- moves to expand the role of the Sel US Sm Cap Eq US EQ GGY 12/31 USD 168.82 30.1 42.6 -14.8 Elbrus USD A GL EQ CYM 06/25 USD 10.42 35.9 -24.7 -17.9 Short Bond Fd SEK -C- NO MM LUX 07/09 SEK 21.96 0.0 0.3 1.3 n THE NATIONAL INVESTOR Minister Seiji Maehara, Chief Cabinet Secretary Yoshito Sengoku and Internal Okada, who turns 57 Wednesday, came the youngest-ever person to government-run postal service in Europn Conviction USD B EU EQ CYM 05/31 USD 135.06 -1.7 0.6 6.4 Short Bond Fd SEK HNWC NO MM LUX 07/09 SEK 11.11 0.2 NS NS PO Box 47435, Abu Dhabi, UAE Web:www.tni.ae n HSBC Trinkaus Investment Managers SA Affairs Minister Kazuhiro Haraguchi. came to the party’s forefront when head the DPJ. the financial-services sector. Europn Forager USD B EU EQ CYM 05/31 USD 226.81 1.3 15.9 4.7 Short Bond Fd SEK HNWD NO MM LUX 07/09 SEK 9.95 -1.9 NS NS MENA Real Estate Fund OT OT ARE 07/01 USD 843.35 -12.3 -12.9 -31.6 E-Mail: [email protected] Latin America USD A GL EQ CYM 04/30 USD 14.21 2.2 -4.7 14.7 Short Bond Fd USD -C- US MM LUX 07/09 USD 2.48 -0.3 -0.6 0.0 MENA Special Sits Fund OT OT BMU 05/31 USD 1100.19 1.9 6.7 NS Telephone: 352 - 47 18471 Paragon Limited USD A EU EQ CYM 11/28 USD 324.09 12.7 12.7 14.2 UAE Blue Chip Fund OT OT ARE 07/01 AED 4.58 -14.0 -14.5 -38.5 Prosperity Return Fund A JP BD LUX 07/05 JPY 10029.71 1.1 NS NS UK Fund USD A OT OT CYM 04/30 USD 187.82 2.1 6.9 5.4 n SEB Fund 5 Prosperity Return Fund B EU BD LUX 07/05 JPY 8867.26 -10.3 NS NS Bond Fd SEK -C- NO BD LUX 07/09 SEK 43.93 2.6 4.1 7.9 n PT CIPTADANA ASSET MANAGEMENT Prosperity Return Fund C EU BD LUX 07/05 USD 90.69 -6.0 NS NS Bond Fd SEK -D- NO BD LUX 07/09 SEK 12.30 -1.1 0.4 6.0 Prosperity Return Fund D EU BD LUX 07/05 EUR 107.88 10.5 NS NS Tel: +6221 25574 883 Fax: +6221 25574 893 Website: www.ciptadana-asset.com Bond Fd SEK HNWD NO BD LUX 07/08 SEK 8.93 2.7 NS NS Renaissance Hgh Grade Bd A JP BD LUX 07/05 JPY 10037.82 1.4 NS NS Indonesian Grth Fund GL EQ BMU 07/07 USD 147.21 15.6 59.0 8.1 Corp. Bond Fd EUR -C- EU BD LUX 07/09 EUR 1.31 3.0 11.9 5.9 Corp. Bond Fd EUR -D- EU BD LUX 07/09 EUR 0.97 3.1 12.4 5.9 Renaissance Hgh Grade Bd B EU BD LUX 07/05 JPY 8814.06 -10.6 NS NS n RUSSELL INVESTMENT GROUP Start-up party holds one key to a coalition Corp. Bond Fd SEK -C- NO BD LUX 07/09 SEK 13.13 4.3 13.9 4.5 Renaissance Hgh Grade Bd C EU BD LUX 07/05 USD 89.54 -6.3 NS NS Multi-Style, Multi-Manager Funds www.russell.com Corp. Bond Fd SEK -D- NO BD LUX 07/09 SEK 9.55 4.3 13.9 4.5 n YUKI INTERNATIONAL LIMITED Renaissance Hgh Grade Bd D EU BD LUX 07/05 EUR 104.45 7.3 NS NS ACTION FRANCE A EU EQ IRL 07/08 EUR 658.57 -6.9 21.4 -7.3 Danish Mortgage Bond Fd EURNO -ID- BD LUX 07/09 EUR 106.46 6.7 9.3 7.3 Tel +44-207-269-0203 www.yukifunds.com BY YOREE KOH in the DPJ’s side—particularly given DPJ. “We are not teaming up with of the 438 candidates gunning for a and social security persuaded him CORE EUROZONE EQ B EU EQ IRL 07/08 EUR 789.65 -5.1 23.0 -5.8 Danish Mortgage Bond Fd EURNO -RC- BD LUX 07/09 EUR 115.77 6.5 8.8 9.4 n YMR-N Series the DPJ’s hefty defeat on Sunday the fake reform power,” said Your spot in the upper house this elec- to vote for the start-up on Sunday EURO FIXED INCOME A EU BD IRL 07/08 EUR 1315.47 5.7 12.9 4.6 Flexible Bond Fd -C- NO BD LUX 07/09 SEK 21.32 -0.1 0.1 3.3 YMR-N Growth Fund JP EQ IRL 07/09 JPY 8610.00 -9.0 2.2 -19.1 EURO FIXED INCOME B EU BD IRL 07/08 EUR 1409.00 6.0 13.6 5.2 Flexible Bond Fd -D- NO BD LUX 07/09 SEK 11.32 -0.1 0.1 3.3 YMR-N Small Cap Fund JP EQ IRL 07/09 JPY 6429.00 -8.3 -3.8 -16.1 TOKYO—As the ruling Demo- evening. Party leader Yoshimi Watanabe to tion. The bulk of its members are rather than support the DPJ as he EUROPEAN SMALL CAP A EU EQ IRL 07/08 EUR 1255.35 4.5 35.3 -4.0 cratic Party of Japan wraps up its Prime Minister Naoto Kan is reporters in Tokyo on Saturday, ac- relative newcomers to politics, and did last summer. “It was meaningful EUROPEAN SMALL CAP B EU EQ IRL 07/08 EUR 1348.87 4.9 36.1 -3.4 n SEB Sicav 1 n Yuki 77 Series EUROZONE AGG A EUR EU EQ IRL 07/08 EUR 655.43 -0.1 30.3 -4.2 Choice Emerging Mkts Fd -C- GL EQ LUX 07/09 USD 2.52 -7.3 25.0 -4.5 Yuki 77 General JP EQ IRL 07/09 JPY 5385.00 -12.5 -8.7 -23.7 freshman year, its bumbling start likely to woo Your Party into becom- cording to local Japanese media re- many previously served as financial- for us to have a change” in the gov- n MP ASSET MANAGEMENT INC. EUROZONE AGG B EUR EU EQ IRL 07/08 EUR 944.85 0.2 31.0 -3.6 Eastern Europe exRussia Fd -C-EE EQ LUX 07/09 EUR 2.64 NS NS NS has given rise to a new beacon of ing a coalition partner for the DPJ. ports, a sentiment he repeated on services executives, medical doctors ernment, said Mr. Sugimoto, who Tel: + 386 1 587 47 77 GLB REAL EST SEC A OT EQ IRL 07/08 USD 872.12 -2.7 32.6 -11.1 n Yuki Chugoku Series n SEB Sicav 2 change: Your Party, a powerful MP-BALKAN.SI OT OT SVN 07/08 EUR 20.99 -13.7 -10.4 -35.7 GLB REAL EST SEC B OT EQ IRL 07/08 USD 901.92 -2.4 33.4 -10.6 Yuki Chugoku Jpn Gen JP EQ IRL 07/09 JPY 6166.00 -9.7 -1.9 -19.5 Although Your Party was largely ig- Sunday night. and entrepreneurs. works for a pharmaceutical firm. Choice Asia SmCap exJpn -C- AS EQ LUX 07/09 SEK 31.66 -2.9 19.8 14.0 MP-TURKEY.SI OT OT SVN 07/08 EUR 41.20 18.7 59.4 15.4 GLB REAL EST SEC EH A OT EQ IRL 07/08 EUR 787.70 -2.1 29.9 -11.1 Yuki Chugoku JpnLowP JP EQ IRL 07/09 JPY 7484.00 -0.8 -5.6 -17.3 start-up party whose solid gains on nored by the ruling party since its “Your Party can set some pretty The party advocates a smaller But the DPJ’s embrace of big gov- Eastern Europe SmCap Fd -C-EU EQ LUX 07/09 EUR 2.95 NS NS NS GLB REAL EST SEC SH B OT EQ IRL 07/08 GBP 74.45 -1.7 31.2 -11.2 n Europe Chance/Risk Fd -C- EU EQ LUX 07/09 EUR 1042.65 0.3 28.5 -8.9 n Sunday will likely force the ruling inception, the DPJ has recently stiff demands on DPJ to adopt its government and its vociferous ernment has made him question if it PAREX ASSET MANAGEMENT IPAS GLB STRAT YIELD A EU BD IRL 07/08 EUR 1688.40 5.1 25.0 7.8 Yuki Hokuyo Japan Series Listed Private Equity -C- OT OT LUX 07/09 EUR 139.21 6.8 51.0 NS Republikas square 2a, Riga, LV-1522, Latvia GLB STRAT YIELD B EU BD IRL 07/08 EUR 1812.28 5.4 25.8 8.5 Yuki Hokuyo Jpn Gen JP EQ IRL 07/09 JPY 4123.00 -11.8 -4.6 -25.0 party to woo it aggressively as a co- changed its tune. Mr. Kan began to policies,” said Gerald Curtis, a pro- stance against a sales-tax increase can guide the country to future Listed Private Equity -IC- OT OT LUX 07/09 EUR 84.81 10.1 62.8 NS www.parexgroup.com Tel: +371 67010810 GLOBAL BOND A EU BD IRL 07/08 EUR 1285.12 16.3 22.8 16.1 Yuki Hokuyo Jpn Inc JP EQ IRL 07/09 JPY 4908.00 -6.5 -3.2 -19.8 Listed Private Equity -ID- OT OT LUX 07/09 EUR 81.07 9.9 62.1 NS alition partner. cite the party name during stump fessor at Columbia University and promoted by the major parties has prosperity. “To keep saying, ‘we will Parex Eastern Europ Bal OT OT LVA 07/08 EUR 14.39 7.6 24.5 1.9 GLOBAL BOND B EU BD IRL 07/08 EUR 1372.91 16.7 23.6 16.9 Yuki Hokuyo Jpn Sm Cap JP EQ IRL 07/09 JPY 4668.00 -8.6 -5.2 -15.9 Nordic Small Cap -C- NO EQ LUX 07/09 EUR 136.70 0.6 43.7 NS Your Party, which opposes tax in- speeches in the final week of the expert in Japanese politics. “But if resonated with a growing number of protect you,’ doesn’t do any good,” Parex Eastern Europ Bd EU BD LVA 07/08 USD 16.26 11.1 30.5 7.3 GLOBAL BOND EH A GL BD IRL 07/08 EUR 1471.30 7.0 14.5 7.7 Nordic Small Cap -IC- NO EQ LUX 07/09 EUR 137.48 0.8 44.5 NS n Yuki Mizuho Series Parex Russian Eq EE EQ LVA 07/08 USD 19.97 2.3 42.6 -18.3 GLOBAL BOND EH B GL BD IRL 07/08 EUR 1566.52 7.3 15.2 8.4 creases and favors small govern- campaign, a sign that Your Party’s they join up it undermines what voters. he said. “When I think of my child, Yuki Mizuho Gen Jpn III JP EQ IRL 07/09 JPY 3900.00 -11.8 -4.0 -26.6 JAPAN EQUITY A JP EQ IRL 07/08 JPY 10962.79 -5.8 -3.4 -17.0 n SEB Sicav 3 Yuki Mizuho Jpn Dyn Gro JP EQ IRL 07/09 JPY 4186.00 -10.3 -3.8 -26.4 ment, has at least nine seats in the surge in support appears to be a they stand for.” With his one-month-old daughter I can’t let the country move in the JAPAN EQUITY B JP EQ IRL 07/08 JPY 11721.08 -5.5 -2.8 -16.5 Asset Sele Defensive EUR -C-OT OT LUX 07/09 EUR 97.66 -2.2 -1.2 NS Yuki Mizuho Jpn Exc 100 JP EQ IRL 07/09 JPY 6108.00 -12.4 -1.1 -21.9 upper house following Sunday’s worry for DPJ lawmakers. Created last August by former in his arms, 35-year-old Hiroshi socialistic direction, which I believe PAC BASIN (X JPN) A AS EQ IRL 07/08 USD 2155.98 -5.7 28.5 2.1 Asset Sele Defensive GBP -D-OT OT LUX 07/09 GBP 96.92 -2.1 NS NS Yuki Mizuho Jpn Gen JP EQ IRL 07/09 JPY 7916.00 -8.1 -0.5 -19.2 PAC BASIN (X JPN) B AS EQ IRL 07/08 USD 2308.08 -5.4 29.2 2.8 Asset Sele Defensive SEK -A-OT OT LUX 07/09 SEK 76.60 -2.1 -1.0 -14.2 elections, making it a formidable Your Party has said it isn’t inter- members of the two biggest parties Sugimoto said reading Your Party’s would make the country go bank- Yuki Mizuho Jpn Gro JP EQ IRL 07/09 JPY 5794.00 -8.9 -5.3 -21.2 PAN EUROPEAN EQUITY A EU EQ IRL 07/08 EUR 964.57 0.2 30.7 -4.1 Asset Sele Defensive SEK -C-OT OT LUX 07/09 SEK 97.61 -2.2 -1.4 NS Yuki Mizuho Jpn Inc JP EQ IRL 07/09 JPY 7282.00 -4.6 -0.5 -21.0 minority force that could be a thorn ested in forming a coalition with the in Japan, Your Party has backed 44 positions on the consumption tax rupt.” PAN EUROPEAN EQUITY B EU EQ IRL 07/08 EUR 1031.31 0.5 31.5 -3.6 Asset Sele Defensive SEK -D-OT OT LUX 07/09 SEK 68.52 -2.1 -1.0 -14.2 Yuki Mizuho Jpn Lg Cap JP EQ IRL 07/09 JPY 4643.00 -10.5 -2.5 -21.5 n PICTET & CIE, ROUTE DES ACACIAS 60, CH-1211 GENEVA 73 US EQUITY A US EQ IRL 07/08 USD 833.27 -4.5 22.5 -8.8 Asset Sele Defensive USD -C-OT OT LUX 07/09 USD 98.96 -2.0 -1.2 NS Yuki Mizuho Jpn LowP JP EQ IRL 07/09 JPY 11001.00 -4.8 -3.8 -14.4 Tel: + 41 (58) 323 3000 Web: www.pictetfunds.com US EQUITY B US EQ IRL 07/08 USD 894.90 -4.2 23.3 -8.3 Asset Sele Opp C EUR OT OT LUX 07/09 EUR 94.65 -4.6 NS NS US SMALL CAP EQUITY A US EQ IRL 07/08 USD 1287.26 -0.1 29.8 -6.9 Yuki Mizuho Jpn PGth JP EQ IRL 07/09 JPY 6988.00 -12.2 -7.3 -24.1 Pictet-Agriculture-P EUR GL EQ LUX 07/08 EUR 124.70 1.5 35.4 NS Asset Sele Opp C H NOK OT OT LUX 07/09 NOK 98.29 -4.0 0.9 NS US SMALL CAP EQUITY B US EQ IRL 07/08 USD 1383.35 0.2 30.6 -6.3 Yuki Mizuho Jpn SmCp JP EQ IRL 07/09 JPY 6721.00 -5.8 -0.8 -14.2 Pictet-Asian Eq ExJpn-I USD AS EQ LUX 07/09 USD 165.69 -7.2 19.0 -4.7 Asset Sele Opp C H SEK OT OT LUX 07/09 SEK 96.22 -4.8 -0.4 NS Yuki Mizuho Jpn Val Sel AS EQ IRL 07/09 JPY 5272.00 -6.7 -3.1 -18.1 Pictet-Asian Eq ExJpn-P USDAS EQ LUX 07/09 USD 157.00 -7.6 18.0 -5.5 Asset Sele Opp D GBP OT OT LUX 07/09 GBP 92.20 -4.2 NS NS n SEB ASSET MANAGEMENT S.A. Yuki Mizuho Jpn YoungCo AS EQ IRL 07/09 JPY 2455.00 -9.9 -11.4 -22.7 Pictet-Biotech-P USD OT EQ LUX 07/08 USD 244.03 -15.3 -8.1 -15.5 Asset Sele Opp IC EUR OT OT LUX 07/09 EUR 97.35 -4.6 0.1 NS www.seb.se Asset Sele Opp ID H GBP OT OT LUX 07/09 GBP 97.63 -4.2 0.7 NS Pictet-CHF Liquidity-P CH MM LUX 07/08 CHF 124.12 -0.1 0.0 0.3 n Japan voters thrash ruling DPJ Yuki Shizuoka Japan Series n SEB Fund 1 Asset Sele Opp ID H SEK OT OT LUX 07/09 SEK 96.84 -4.8 -0.4 NS Pictet-CHF Liquidity-P dy CH MM LUX 07/08 CHF 93.33 -0.1 0.0 0.3 Yuki Shizuoka General Japan JP EQ IRL 07/09 JPY 4989.00 -8.0 -0.7 -20.2 Asset Sele C EUR OT OT LUX 07/09 EUR 13.55 -2.4 0.5 6.9 Asset Sele Original C EUR EU BA LUX 07/09 EUR 99.23 -2.2 0.1 NS Continued from first page DPJ actually took power, nothing pre-election pledge to boost the DPJ failed to meet its goals of win- had really changed. The results were consumption tax to rein in the coun- Advertisement [ ALTERNATIVE INVESTMENT FUNDS www.wsj.com/funddata ] Advertisement ning a majority in the upper house actually worse than I expected.” try’s outsize borrowing, thinking of parliament—and even Mr. Kan’s The DPJ’s handling of the Oki- that Japan’s voters would under- more modest goal of maintaining nawa base issue was particularly stand the severity of its fiscal condi- 12-month and 2-year returns may be calculated over 11- and 23-month periods NAV —%RETURN— NAV —%RETURN— pending receipt and publication of the last month end price. FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR existing strength. As of 2 a.m. in Ja- “embarrassing,” he added. tions and appreciate his honesty. To NAV —%RETURN— Special Opp Inst EUR OT OT CYM 06/18 EUR 86.51 -0.3 15.7 NS Real AdvantEdge EUR OT OT JEY 06/18 EUR 104.66 -3.3 1.2 NS INDICES pan, networks projected the party Since the DPJ has a huge major- persuade the public, Mr. Kan alluded FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR Special Opp Inst USD OT OT CYM 06/18 USD 98.40 -0.2 16.3 NS Real AdvantEdge USD OT OT JEY 06/18 USD 105.16 -2.9 1.7 NS won as few as 44 seats of the 121 ity in the more-powerful lower to Greece’s example, saying inaction n ALEXANDRA INVESTMENT MANAGEMENT Special Opp USD OT OT CYM 06/18 USD 96.06 -0.5 15.5 NS Trading Adv JPY OT OT GGY 06/18 JPY 9508.09 3.1 -0.7 NS NAV —————— %RETURN —————— seats contested—or less than 40% of house, it will remain the ruling would lead Japan to a similar fate. GGY FUND NAME GF DATE CR NAV 1-WK 1-MO 1-Q 1-YR 2-YR Alexandra Convertible Bond FundOT I, OT Ltd. VGB (Class 02/26 A) USD 1828.22 20.3 67.1 NS n Trading AdvantEdge OT OT 05/28 USD 144.18 2.4 -1.2 NS HSBC Portfolio Selection Fund Trading AdvantEdge EUR OT OT GGY 06/18 EUR 130.08 2.1 -1.6 NS the total—down from 54. In last party despite Sunday’s setback. But The prime minister admitted af- n GH Fund AP OT OT GGY 04/30 EUR 120.82 3.5 -13.4 -3.8 n D'AURIOL FUNDS WWW.DAURIOL.BIZ Trading AdvantEdge GBP OT OT GGY 06/18 GBP 138.03 2.5 -1.0 NS ARIX ABSOLUTE RETURN INVESTABLE INDEX 2 FUNDS OF FUNDS OF HEDGE FUNDS GH Fund CHF Hdg OT OT GGY 05/28 CHF 110.84 0.1 8.5 -5.3 Feri Institutional Advisors, www.feri.de year’s election, the DPJ took 64% of it will become harder for the party ter Sunday’s election that the strat- D'Auriol Alt Non-Lev A EU OT CYM 05/31 EUR 99.63 -1.4 0.7 -11.7 GH Fund EUR Hdg (Non-V) OT OT GGY 04/30 EUR 109.43 2.9 -15.9 -5.9 ARIX Composite Gross USD OT OT GBR 06/30.00 USD1408.74 7.4 -12.7 -6.5 the seats at stake. to govern, as most legislation needs egy didn’t work. “My discussion on D'Auriol Opp F3 EUR EU MM CYM 02/26 EUR 968.47 -1.9 -1.8 -13.3 GH Fund GBP Hdg OT OT GGY 06/18 GBP 132.30 0.2 7.2 NS Sunday’s election was, in many the approval of the upper house. the consumption tax was received GH Fund Inst USD OT OT GGY 06/18 USD 112.21 0.4 7.8 NS n HERMITAGE CAPITAL MANAGEMENT LTD. NAV —%RETURN— GH FUND S EUR OT OT CYM 06/18 EUR 128.87 0.7 8.2 NS FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR ways, a statement of disenchant- Investors, in particular, are wor- by the voters as rather abrupt,” a Tel: +7501 258 3160 www.hermitagefund.com GH FUND S GBP OT OT GGY 06/18 GBP 133.73 0.8 8.4 NS ment by Japan’s voters, who had ried about Mr. Kan’s ability to meet sober-faced Mr. Kan said at his news The Hermitage Fund GL EQ JEY 03/12 USD 963.12 4.5 105.6 -23.2 GH Fund S USD OT OT CYM 06/18 USD 151.22 0.7 8.4 NS Key Hedge EUR -IC- OT OT LUX 05/31 EUR 103.23 1.1 7.1 NS n MERIDEN GROUP Key Hedge EUR-RC- OT OT LUX 05/31 EUR 102.23 0.9 6.6 NS embraced the DPJ with such high his pledge to limit borrowing. In conference. “I, myself, feel that a big n HORSEMAN CAPITAL MANAGEMENT LTD. GH Fund USD OT OT GGY 05/28 USD 274.56 0.3 9.3 -3.7 JEY Tel: + 376 741 175 Fax: + 376 741 183 Email: [email protected] T: +44(0)20 7838 7580, F: +44(0) 20 7838 7590, www.horsemancapital.com Hedge Investments OT OT 06/18 USD 140.42 NS 7.7 NS n SEB KEY Market Independent II hopes last summer, only to find the light of the election results, the reason [for the defeat] was I didn’t Leverage GH USD OT OT GGY 05/28 USD 120.11 -0.2 16.7 -11.4 Antanta Combined Fund EE EQ AND 06/25 USD 373.77 1.4 37.4 -29.5 Horseman EmMkt Opp EUR GL EQ USA 01/31 EUR 187.60 -23.2 -21.7 -7.7 AND Key Market Independent II EUROT -RC- OT LUX 05/31 EUR 97.35 0.9 7.1 -0.4 MultiAdv Arb CHF Hdg OT OT JEY 05/28 CHF 96.27 1.8 10.4 -7.2 Antanta MidCap Fund EE EQ 07/02 USD 680.84 -4.1 66.5 -37.4 party was in many ways like the promise “is meaningless,” said Ma- explain it well enough.” Horseman EmMkt Opp USD GL EQ USA 01/31 USD 194.78 -24.5 -22.7 -9.1 AND Key Market Independent II SEKOT -I- OT LUX 05/31 SEK 94.44 0.8 6.8 -0.6 MultiAdv Arb EUR Hdg OT OT JEY 05/28 EUR 105.18 2.1 11.6 -6.4 Meriden Opps Fund GL OT 07/07 EUR 46.95 -21.7 -39.0 -33.2 Horseman EurSelLtd EUR EU EQ GBR 06/30 EUR 185.44 -5.0 5.0 -7.3 long-ruling Liberal Democratic Party koto Yamashita, chief Japan inter- If Mr. Kan loses his job—still a MultiAdv Arb GBP Hdg OT OT JEY 05/28 GBP 113.47 2.2 11.4 -6.7 Meriden Protective Div GL EQ AND 09/01 EUR 79.14 NS NS NS n Horseman EurSelLtd USD EU EQ GBR 06/30 USD 193.17 -4.3 5.3 -7.4 SEB KEY Recovery it had displaced—indecisive and est-rate strategist at Deutsche Bank. remote possibility at this point—he CYM Horseman Glbl Ltd EUR GL EQ CYM 06/30 USD 335.32 -9.6 -18.6 -11.2 MultiAdv Arb S EUR OT OT 06/18 EUR 112.96 2.6 10.8 NS Key Recovery -IC- OT OT LUX 05/31 EUR 92.51 2.5 12.0 NS CYM hampered by scandals—and had the “There is a high possibility that would be the fifth consecutive Horseman Glbl Ltd USD GL EQ CYM 06/30 USD 335.32 -9.6 -18.6 -11.2 MultiAdv Arb S GBP OT OT 05/28 GBP 118.35 2.7 12.9 -5.5 Key Recovery -RC- OT OT LUX 05/31 EUR 91.51 2.3 11.4 NS MultiAdv Arb S USD OT OT CYM 06/18 USD 128.99 2.4 10.9 NS n OTHER FUNDS n WINTON CAPITAL MANAGEMENT LTD added disadvantage of inexperience. the... pledge will be broken.” prime minister to step down a year n HSBC ALTERNATIVE INVESTMENTS LIMITED MultiAdv Arb USD OT OT JEY 05/28 USD 197.96 2.0 11.7 -5.0 For information about these funds, please contact us on Tel: +44 (0) 207 842 9694/9633 T +44 20 7860 3074 F + 44 20 7860 3174 www.hail.hsbc.com Tel: +44 (0)20 7610 5350 Fax: +44 (0)20 7610 5301 “When the LDP ended its long Japan’s political leadership will or less into the job. The musical n Medinvest Plc Dublin OT OT IRL 06/30 USD 1481.20 NS 1.3 -4.4 HSBC Absolute Companies HSBC Uni-folio Winton Evolution EUR Cls H GL OT CYM 05/31 EUR 987.58 6.4 8.4 NS rule, there were certain expectations now be consumed with horse trad- chairs of leaders has been cited of- Asian AdbantEdge EUR OT OT JEY 06/18 EUR 96.61 -2.7 1.0 NS CYM Global Absolute OT OT GGY 03/31 GBP 1.11 2.9 16.5 0.6 n SEB ALTERNATIVE INVESTMENT Winton Evolution GBP Cls G GL OT 05/31 GBP 995.29 6.7 9.0 NS JEY CYM and a sense of excitement,” said ing, as Mr. Kan struggles to find ten as a reason why Japan has been Global Absolute EUR OT OT GGY 05/13 EUR 1.56 2.8 14.2 NS Asian AdvantEdge OT OT 06/18 USD 177.97 -2.6 1.7 NS SEB KEY Europe Equity Long Short Winton Evolution USD Cls F GL OT 05/31 USD 1252.64 6.4 8.7 0.1 JEY VGB Global Absolute USD OT OT GGY 03/31 USD 2.05 2.8 15.2 0.3 Emerg AdvantEdge OT OT 06/18 USD 162.20 -3.1 4.5 NS Key Europe Long/Short EUR -IC-OT OT LUX 05/31 EUR 92.38 0.0 5.8 NS Winton Futures EUR Cls C GL OT 05/31 EUR 207.14 6.7 9.1 2.3 Tatsuo Shigefuji, a 41-year-old in- friendly opposition parties to work slow in making important decisions. Emerg AdvantEdge EUR OT OT JEY 06/18 EUR 90.02 -3.4 4.1 NS Key Europe Long/Short EUR -RC-OT OT LUX 05/31 EUR 91.37 -0.3 5.2 NS Winton Futures GBP Cls D GL OT VGB 05/31 GBP 224.13 6.7 9.5 2.8 n HSBC ALTERNATIVE STRATEGY FUND Europ AdvantEdge EUR OT OT JEY 06/18 EUR 131.64 -0.8 7.7 NS Winton Futures JPY Cls E GL OT VGB 05/31 JPY 14650.41 8.2 10.3 1.3 surance-company employee who with in parliament while fending off —Yoree Koh, Kana Inagaki, Special Opp EUR OT OT CYM 06/18 EUR 91.27 -0.6 14.9 NS Europ AdvantEdge USD OT OT JEY 06/18 USD 140.01 -0.7 8.1 NS n SEB KEY Hedge Winton Futures USD Cls B GL OT VGB 05/31 USD 736.23 6.8 9.5 2.1 backed the DPJ last year, but cast a critics in his own party. Miho Inada, Kosaku Narioka

vote in Tokyo this time for one of Mr. Kan made his party’s pros- and Andrew Monahan Associated Press For information about listing your funds, please contact: Justin Jones tel: +44 207 842 9674; email: [email protected] many smaller parties. “But when the pects tougher with an unpopular contributed to this article. Mr. Kan walks past a poster of himself at DPJ election headquarters on Sunday. 10 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 27 INTERVIEW MARKETS FUND SCORECARD Euro should sustain rally US Large-Cap Blend Equity Funds that are fairly representative of the U.S. large-cap equity market. At least 75% of total assets are Being a hero matters less invested in equities. Ranked on % total return (dividends reinvested) in U.S. dollars for one year ending July 09, 2010 as stress tests awaited Leading 10 Performers FUND FUND LEGAL % Return in $US ** BY BRADLEY DAVIS gent budget cuts and market-sooth- tend to be more volatile, with small RATING *NAME FUND MGM'T CO. CURR. BASE YTD 1-YR 2-YR 5-YR ing stress tests, investors are com- trades having an exaggerated effect. NS Amundi ETF Amundi Investment EURFRA 15.29 78.40 NS NS With concerns about European ing around to the viewpoint that Late Friday, the euro was at Leveraged MSCI USASolutions Daily A sovereign debt receding, the euro “the euro should look a little bit $1.2640, from $1.2692 late Thurs- 4 Lyxor ETF Lyxor EURFRA 11.93 49.44 6.46 NS than avoiding big mistakes has put in a strong showing. This more like the Deutsche mark,” with day. FTSE RAFI US 1000International A Asset Management week, it’s set to seek to hold on to its solid fiscal backing, Mr. Pazza- The dollar has suffered from the 3 Allianz Allianz Global EURFRA 9.32 45.84 4.67 -2.47 those gains. nese said. shift in focus from the euro zone to Amériques StocksPLUSInvestors A/I France Unigestion’s chairman made a prescient call on the risk of liquidity drying up; now he’s looking eastward Successful government bond auc- Still, it will take awhile to repair the possibility of slowing U.S. 2 CapitalAtWork Capital at Work EURLUX 12.09 43.60 10.73 -2.90 tions in Portugal and Spain com- the damage done. Despite this past growth. Among U.S. data on tap this bined with details week’s recovery, the euro is down week, Thursday’s industrial-produc- Amer Eq at Work D [ Bernard Sabrier ] CURRENCY released on stress around 11.5% against the dollar tion figures should go a long way in 4 Aktia Aktia Rahastoyhtiö EURFIN 11.69 40.43 2.60 -1.00 MARKETS tests of European since the beginning of the year, with determining the pace of the U.S. re- America A Oy BY WILLIAM LYONS banks and contin- investors keeping a cautious stance covery, Mr. Lambregts said. 2 OP-Amerikka OP-Rahastoyhtiö Oy EURFIN 9.04 39.74 0.19 -4.61 ued belt-tightening plans across the on the lingering issues of sovereign Uncertainty surrounding Japan’s Indeksi A In 2007, Bernard Sabrier, chairman of euro zone all have taken pressure debt. current ruling party could lead the 5 Lyxor ETF Lyxor EURFRA 10.36 39.66 7.64 0.14 Geneva-based asset-management firm Uni- off the common currency. On Friday, Ahead of the July 23 results of yen to weaken, analysts said. Dow Jones Indl AverageInternational A Asset Management gestion Holding, talked with his chief exec- the euro briefly touched a two- the European Union’s bank stress The ruling Democratic Party of 4 LINGOHR AM Landesbank Berlin EURDEU 5.46 38.52 0.19 -1.72 utive, Patrick Fenal, about the time bomb month high against the dollar—ris- tests, the euro should hold on to Japan and its junior coalition part- SYSTEMATIC LBBInvestment INVEST GmbH they believed was ticking under hedge ing all the way to $1.2723, a 7% gain most of its recent gains, trading this ner, the People’s New Party, on Sun- 2 UBS (Lux) UBS (Lux) Key EURLUX 5.16 38.42 2.28 -4.14 funds. They agreed there was a major po- in the span of about a month—from week between $1.2480 and $1.2725, day lost their combined majority in KSS US Eqs (EUR)Selection P Acc Sicav tential liquidity risk and mismatch between its four-year low at $1.1876. said Jan Lambregts, global head of the Upper House. The resulting po- certain funds of hedge funds that exposed “A lot of it has to do with senti- financial-markets research at Ra- litical uncertainty could hurt the NS Handelsinvest Handelsinvest DKKDNK 11.03 37.81 NS NS investors to enormous risks. ment,” said Geoffrey Pazzanese, co- bobank International in London. yen against the dollar. The dollar Nordamerika In short, they argued that there were manager of Federated Investors’ NOTE: Changes in currency rates will affect performance and rankings. Source: Morningstar, Ltd Mr. Lambregts pinpointed one should trade between 88 and 92 KEY: ** 2YR and 5YR performance is annualized 1 Oliver’s Yard, 55-71 City Road certain funds of funds in which investors $736 million Intercontinental Fund. key risk to the euro’s recent yen, analysts said, with the green- NA-not available due to incomplete data; London EC1Y 1HQ United Kingdom NS-fund not in existence for entire period www.morningstar.co.uk; Email: [email protected] could redeem their investments faster than With German and French leaders rally—leaks of bad news from the back Friday afternoon at 88.63 yen Phone: +44 (0)203 107 0038; Fax: +44 (0)203 107 0001 the fund could liquidate its own. Were “winning the arguments” for strin- stress tests. Thin summer markets from 88.39 yen late Thursday. there to be a sustained run of redemptions on such funds, the fund could exhaust its li- quidity, and the last group of clients to re- deem wouldn’t receive their money back on Pictet’s Dunand: Play the due date. Instead, they would find Stockpickers’lament:herdinstinct themselves locked into an investment for longer than they expected, to their possible commodity currencies disadvantage. Continued from page 21 dex’s April 23 peak—about the same blue-chip to which many investors Their findings, which helped guide their to 45%, the lowest allowed under decline as stocks that don’t pay divi- normally would turn. BY TARA LOADER WILKINSON investment philosophy, were eventually Harris’s guidelines, and bonds have dends, according to research done Since April, Microsoft has fallen published in a paper authored by Mr. Fenal. risen to 55%. for The Wall Street Journal by Bir- harder than the overall market. Its Chloé Koos Dunand, economist “Everyone, including some of our own “The easiest thing for us to do is inyi Associates. None of the S&P stock price, as a multiple of its earn- at Swiss bank Pictet & Cie, talks to colleagues, thought we were crazy,” says lower our risk” rather than try to 500’s 10 sectors, even the most de- ings, has been below that of the The Wall Street Journal about Mr. Sabrier. “Our staff kept asking why are pick and choose among stocks, Mr. fensive, shows a gain since the April broad market, something that has how to profit from commodity you putting us at a deliberate disadvantage. Ablin explains. “I think we are going peak. rarely been the case in Microsoft’s currencies. Everyone is saying liquidity is not a prob- to stay with a higher bond alloca- Among the few investments history. Microsoft, of course, has The fast pace of industrialization lem and you are the only one who has con- tion than usual for a while. We just showing gains since April 23 are suffered recently from adverse com- in China, which strained us on liquidity.” think that the market warrants a Treasury bonds, investment-grade parisons with Apple, and its status WEALTH stimulated interest A year later, liquidity became a problem higher degree of vigilance.” corporate bonds and gold. as a blue-chip hasn’t offset that. MANAGER in commodity cur- at many firms. Investors wanting to redeem The tendency of stocks to rise “Stocks aren’t moving because of Another problem for dividend Q&A rencies, augers well their money from such funds of funds were and fall together may help explain the sector they are in, but because payers is that the group includes for both commodi- delayed, and those that remained invested why some conservative, dividend- the overall market is down” since some of the market’s most volatile ties and the countries that produce

longer than they wanted to and suffered paying stocks have been turning in late April, Mr. Rubin says. stocks, such as financial and indus- them. The critical factor is not to Pictet significant losses. disappointing results lately, while Exchange-traded funds, high-tech trial shares. Dividend payers in treat all commodity currencies the Pictet’s Chloé Koos Dunand Not that the 57-year-old Mr. Sabrier took some riskier stocks, such as com- trading strategies and quick shifts more stable groups, including tele- same. The Canadian dollar is much

much pride in his prescience. “There was Unigestion puter-chip makers, are holding up to cash permit investors to react communications and utility stocks, less a commodity currency, for ex- from 20% to 30% gross domestic no triumphalism,” he says. “It’s not about Bernard Sabrier: “We have lived through a period of excess in the financial world.” But, he adds, “The answer doesn’t always have to be regulation.” better than expected. quickly to market moves without have held up better, but those ample, than the Indonesian rupiah. product since 2000. being right or wrong; it’s about avoiding “One of the strategies we run is analyzing individual stocks, but they groups still are down. Australia exports a diversified Asia is the destination of about major mistakes.” the truth is not there.” Most of his funds, he says, are domiciled but they are learning fast.” very defensive and it has not done also mean that professional inves- Some analysts believe stock array of goods to China and has a 25% of New Zealand and Chile’s ex- In fact, Unigestion, didn’t remain im- These are tricky times for hedge-fund in Guernsey, one of the U.K.’s Channel Is- Early in his career, Mr. Sabrier was em- well in May and June of this year,” tors have less need to use tradi- prices could remain sluggish for sensible monetary policy and fiscal ports. The New Zealand dollar bene- mune to the 2008 financial storm, but it managers. Many European finance minis- land offshore financial havens, but, pending ployed at Renault Finance in Lausanne, says Janna Sampson, co-chief in- tional defensive stocks as havens. some time. In that case, they say, in- policy mix. Among emerging-market fits from association with the Aus- fared better than most. Assets under man- ters have accused the industry for using bil- the shape of the regulations, he says that Switzerland, where he worked in group cur- vestment officer at OakBrook In- Ms. Sampson of OakBrook has vestors should buy dividend-paying currencies, the Indonesian rupiah tralian dollar, and Chile is agement declined from €7.8 billion at the lions of euros in borrowed money to desta- he may look to move some to Luxembourg rency hedging and fixed-income instru- vestments, which oversees $2.1 bil- been especially surprised at the stocks in hopes that dividends will looks an outstanding prospect since pre-eminent in the copper market. end of 2007 to €7.5 billion at the end of last bilize the financial markets during the 2008 if necessary. The real beneficiaries of the ments. With the capital he made at Renault, lion in Lisle, Ill. weak performance of stocks like Mi- enhance weak price performance. So Indonesia also exports heavily, par- Canada’s exports to Asia are not month, a fall of only 3.8%. crisis. They have also been rebuked for fu- EU regulations will be places such as Sin- he bought Unigestion and began a series of Dividend payers in the S&P 500 crosoft, which hasn’t been behaving far, however, investors don’t seem ticularly oil and petroleum products. yet significant but are rising, mak- “Alternative asset management”—such elling a speculative attack on Greece’s sov- gapore, Hong Kong, Shanghai and Beijing, private-equity-backed acquisitions, includ- are down about 11% since that in- as the big, solid, dividend-paying to be heeding that advice much. Domestic investment has risen fast, ing the Canadian dollar attractive. as hedge funds, which can use leverage to ereign debt. which will create markets and take busi- ing the purchase of Banca della Svizzera multiply the effect of their positions in This summer, EU finance ministers will ness, he says. Italiana. Four years later he sold it to Swiss stocks and bonds—“is not an easy game,” vote on proposals drawn up by the Euro- “My worry is that the French and Ger- Bank Corp. , a deal that at the time was one Advertisement [ INTERNATIONAL INVESTMENT FUNDS www.wsj.com/funddata ] Advertisement says Mr. Sabrier, who has run Unigestion pean Parliament’s Economic and Monetary man politicians thought: first we have to of the largest in the Swiss financial sector since buying it from his father in 1976. “But Affairs Committee. A swathe of new regula- kill London; if we put the London financial and made him a multimillionaire by the NAV —%RETURN— NAV —%RETURN— NAV —%RETURN— the results are pretty powerful, which tions will be introduced as part of the Al- sector on its knees, the financial capital of time he was in his early thirties. FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR sometimes leads many people to believe ternative Investment Fund Managers direc- Europe will be Paris and Frankfurt. They In the early days, Unigestion was in- Emg Mkts Debt A GL BD LUX 07/08 USD 15.93 5.7 23.2 11.8 Gl Bond A US BD LUX 07/08 USD 9.52 5.1 12.1 7.5 India Growth B EA EQ LUX 07/08 USD 136.98 3.0 41.4 NS this business is about being a hero. We are tive. Proposals range from requiring funds are making a mistake because, if they do volved mainly in private banking, focusing Emg Mkts Debt A2 GL BD LUX 07/08 USD 21.28 5.8 23.3 11.9 Gl Bond A2 US BD LUX 07/08 USD 16.84 5.2 12.1 7.5 India Growth BX EA EQ LUX 07/08 USD 97.85 3.2 41.8 14.9 not here to have an ego, nor to be heroes. that routinely borrow money to boost re- succeed in putting London on its knees, on traditional investment vehicles. But after Emg Mkts Debt B GL BD LUX 07/08 USD 15.93 5.2 22.1 10.8 Gl Bond B US BD LUX 07/08 USD 9.52 4.6 11.0 6.5 India Growth I EA EQ LUX 07/08 USD 119.55 4.0 43.9 16.5 Emg Mkts Debt B2 GL BD LUX 07/08 USD 20.40 5.4 22.1 10.8 Gl Bond B2 US BD LUX 07/08 USD 14.67 4.6 11.0 6.5 Data as shown is for information purposes only. No offer is being made by Int'l Health Care A OT EQ LUX 07/08 USD 128.27 -6.7 11.1 -6.0 We are here to work very hard, around turns to disclose information about their they will only succeed in accelerating the experimenting with hedge-fund investments Emg Mkts Debt I GL BD LUX 07/08 USD 15.93 6.0 23.8 12.4 Gl Bond I US BD LUX 07/08 USD 9.52 5.4 12.7 8.1 Morningstar, Ltd. or this publication. Funds shown aren’t registered with the Int'l Health Care B OT EQ LUX 07/08 USD 107.63 -7.2 10.0 -7.0 strong values, to have a very thorough pro- borrowings to EU and national authorities, shift of capital from West to East as Paris using his own money, Mr. Sabrier became U.S. Securities and Exchange Commission and aren’t available for sale to United Emg Mkts Growth A GL EQ LUX 07/08 USD 32.68 -5.7 30.7 -8.7 Gl Conservative A US BA LUX 07/08 USD 14.61 -0.6 11.1 -1.3 Gl Conservative A2 US BA LUX 07/08 USD 16.83 -0.6 11.1 -1.3 Int'l Health Care I OT EQ LUX 07/08 USD 140.73 -6.3 12.0 -5.3 cess, know what we are doing and have a to requiring non-European funds to apply or Frankfurt don’t have the flexibility or the convinced these were the investment vehi- States citizens and/or residents except as noted. Prices are in local currencies. Emg Mkts Growth B GL EQ LUX 07/08 USD 27.56 -6.2 29.4 -9.6 All performance figures are calculated using the most recent prices available. Emg Mkts Growth I GL EQ LUX 07/08 USD 36.39 -5.3 31.8 -7.9 Gl Conservative B US BA LUX 07/08 USD 14.60 -1.1 10.0 -2.3 Int'l Technology A OT EQ LUX 07/08 USD 105.59 -4.3 29.4 -6.0 long-term plan.” for a “passport” to be able to market to in- pool of talents in the financial sector.” cles to focus on. NAV —%RETURN— Eur Growth A EU EQ LUX 07/08 EUR 7.22 2.7 23.6 -7.4 Gl Conservative B2 US BA LUX 07/08 USD 15.91 -1.1 10.0 -2.3 Int'l Technology B OT EQ LUX 07/08 USD 91.02 -4.8 28.1 -7.0 Mr. Sabrier, who has weathered the vestors in Europe. Mr. Sabrier has opened an office in Sin- That’s a view he still holds. Despite all FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR Eur Growth B EU EQ LUX 07/08 EUR 6.45 2.1 22.2 -8.4 Gl Conservative I US BA LUX 07/08 USD 14.69 -0.2 12.0 -0.5 Int'l Technology I OT EQ LUX 07/08 USD 118.88 -3.9 30.5 -5.3 Eur Growth I EU EQ LUX 07/08 EUR 7.90 3.0 24.6 -6.7 Gl Eq Blend A GL EQ LUX 07/08 USD 10.42 -10.6 15.4 -18.0 Japan Blend A JP EQ LUX 07/08 JPY 5576.00 -7.4 1.1 -20.1 Gl Eq Blend B GL EQ LUX 07/08 USD 9.73 -11.1 14.3 -18.8 downturns of 1990, 1994 and 2000, is philo- Given that funds may be prevented from gapore, where he spends much of the year. the fears that rules on bonuses will prompt Eur Income A EU BD LUX 07/08 EUR 6.74 5.1 22.6 9.2 Japan Growth A JP EQ LUX 07/08 JPY 5298.00 -9.8 -2.3 -21.5 Gl Eq Blend I GL EQ LUX 07/08 USD 11.04 -10.2 16.5 -17.4 sophical about the way hedge funds have complying with the latter measure by finan- He said he feels the real opportunity is in an exodus of London’s hedge funds, Mr. Sa- Eur Income A2 EU BD LUX 07/08 EUR 13.56 5.4 22.7 9.3 Japan Growth I JP EQ LUX 07/08 JPY 5474.00 -9.4 -1.5 -20.9 Gl Growth A GL EQ LUX 07/08 USD 38.00 -9.3 16.2 -18.0 Eur Income B EU BD LUX 07/08 EUR 6.74 4.7 21.9 8.4 become the whipping boy of choice for the cial regulations in their home countries, an- the Far East—and only by living and work- brier still believes that in whatever form Gl Growth B GL EQ LUX 07/08 USD 31.56 -9.8 15.0 -18.8 Japan Strat Value A JP EQ LUX 07/08 JPY 5859.00 -4.3 5.9 -18.8 Eur Income B2 EU BD LUX 07/08 EUR 12.56 4.9 21.8 8.4 Gl Growth I GL EQ LUX 07/08 USD 42.37 -8.9 17.1 -17.3 Japan Strat Value I JP EQ LUX 07/08 JPY 6039.00 -3.9 6.8 -18.1 global economic crisis. alysts say it would not only limit the pres- ing there can one truly show a commitment they take, “in the future they are probably Eur Income I EU BD LUX 07/08 EUR 6.74 5.4 23.2 9.7 n Gl High Yield A US BD LUX 07/08 USD 4.39 5.5 31.3 9.4 Real Estate Sec. A OT EQ LUX 07/08 USD 13.90 -3.1 32.1 -10.0 “The politicians want to find someone to ence of U.S.-based hedge funds in Europe and understanding of its culture. the only way people will manage money.” ALLIANCE BERNSTEIN Eur Strat Value A EU EQ LUX 07/08 EUR 8.09 -5.2 19.0 -12.7 www.alliancebernstein.com/investments Tel. +800 2263 8637 Gl High Yield A2 US BD LUX 07/08 USD 9.78 5.6 31.5 9.3 Real Estate Sec. B OT EQ LUX 07/08 USD 12.64 -3.7 30.8 -10.9 Eur Strat Value I EU EQ LUX 07/08 EUR 8.31 -4.9 19.9 -12.0 Gl High Yield B US BD LUX 07/08 USD 4.39 4.9 29.9 8.1 blame, and it is easy to blame hedge funds. but may also affect European-based funds “In hedge funds, the shift to the East is “We have lived through a period of ex- Am Blend Portfolio A US EQ LUX 07/08 USD 9.63 -7.1 19.5 -10.9 Real Estate Sec. I OT EQ LUX 07/08 USD 15.00 -2.7 33.2 -9.3 Eur Value A EU EQ LUX 07/08 EUR 8.71 -5.3 19.6 -9.3 Gl High Yield B2 US BD LUX 07/08 USD 15.65 5.2 30.2 8.2 Am Blend Portfolio I US EQ LUX 07/08 USD 11.38 -6.9 20.4 -10.2 Short Mat Dollar A US BD LUX 07/08 USD 7.31 2.1 11.1 -0.3 They are high-profile and easier to blame registered in tax havens such as the Cay- not obvious yet. We see some of the best cess in the financial world.” he said. “The Eur Value B EU EQ LUX 07/08 EUR 7.97 -5.8 18.4 -10.2 Gl High Yield I US BD LUX 07/08 USD 4.39 5.8 32.1 10.1 Am Growth A US EQ LUX 07/08 USD 28.13 -10.0 18.5 -5.0 Short Mat Dollar A2 US BD LUX 07/08 USD 10.00 2.1 11.1 -0.4 than banks,” he says as he sips coffee in his man Islands and Bermuda. managers on Asian equities based on the success of the asset-management business Eur Value I EU EQ LUX 07/08 EUR 10.10 -4.9 20.7 -8.6 Gl Thematic Res A GL EQ LUX 07/08 USD 13.72 -6.9 18.2 -1.5 Am Growth B US EQ LUX 07/08 USD 23.53 -10.4 17.3 -5.9 London office. “But in reality, hedge funds Mr. Sabrier says he doesn’t believe the west coast of the U.S. or in Europe because was geared on greed. Clients were greedy, Gl Balanced (Euro) A EU BA LUX 07/08 USD 14.44 NS NS NS Gl Thematic Res B GL EQ LUX 07/08 USD 11.94 -7.4 16.9 -2.5 Short Mat Dollar B US BD LUX 07/08 USD 7.31 1.8 10.6 -0.8 Am Growth I US EQ LUX 07/08 USD 31.31 -9.6 19.5 -4.2 Gl Balanced (Euro) B EU BA LUX 07/08 USD 13.99 NS NS NS Gl Thematic Res I GL EQ LUX 07/08 USD 15.37 -6.5 19.1 -0.7 Short Mat Dollar B2 US BD LUX 07/08 USD 9.93 2.0 10.6 -0.8 only manage a tiny percentage of the tighter regulation of funds proposed by the they still do not want to live in Hong Kong. employees were greedy and shareholders Am Income A US BD LUX 07/08 USD 8.64 5.5 17.0 8.9 Gl Balanced (Euro) C EU BA LUX 07/08 USD 14.30 NS NS NS Gl Value A GL EQ LUX 07/08 USD 9.84 -11.7 15.4 -18.0 Short Mat Dollar I US BD LUX 07/08 USD 7.31 2.3 11.7 0.2 Am Income A2 US BD LUX 07/08 USD 20.10 5.6 16.9 8.9 world’s wealth. I can’t believe that with European Union will prompt an exodus to But there are new funds every month, the were greedy. ... The answer doesn’t always Gl Balanced (Euro) I EU BA LUX 07/08 USD 14.75 NS NS NS Gl Value B GL EQ LUX 07/08 USD 9.00 -12.1 14.2 -18.7 US Thematic Research A US EQ LUX 07/08 USD 8.11 -4.9 13.7 -7.8 Am Income B US BD LUX 07/08 USD 8.64 5.1 16.1 8.1 Gl Balanced A US BA LUX 07/08 USD 15.75 -4.4 14.6 -7.6 Gl Value I GL EQ LUX 07/08 USD 10.51 -11.3 16.3 -17.3 US Thematic Research B US EQ LUX 07/08 USD 7.42 -5.5 12.6 -8.8 only 1% or 2% of the world’s wealth you can Geneva. “After all,” he chuckles, “we can’t Asians are traders in their soul. At the mo- have to be regulation. The best regulation Am Income B2 US BD LUX 07/08 USD 17.26 5.2 16.1 8.1 Gl Balanced B US BA LUX 07/08 USD 14.90 -4.9 13.5 -8.5 India Growth A EA EQ LUX 07/08 USD 131.44 3.6 42.9 NS US Thematic Research I US EQ LUX 07/08 USD 8.76 -4.6 14.7 -7.1 stir the markets, cause the collapse of all move to Switzerland as there will be ment they are less disciplined than the U.S. is still common sense. But the problem in Am Income I US BD LUX 07/08 USD 8.64 5.8 17.6 9.6 Gl Balanced I US BA LUX 07/08 USD 16.39 -4.1 15.4 -7.0 India Growth AX EA EQ LUX 07/08 USD 115.06 3.7 43.2 16.0 Greece or the default of Lehman Brothers. some major infrastructure problems if we or the British who have been managing the past is that everyone lost their common Maybe the general public can believe it, but do.” money with leverage for a very long time, sense.” For information about listing your funds, please contact: Justin Jones tel: +44 207 842 9674; email: [email protected] 26 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 11 BUSINESS FINANCE OPINION: REVIEW OUTLOOK Standard Chartered IPO: Google With Chinese Characteristics Japan or India redux? t first the tussle between China it also wanted to keep doing business in Chinese government’s “great firewall” gine and the company’s other services re- and Google over the free flow of China and so had to find a way to avoid software. The user gets an error message main important tools for many Chinese. [ Think Again ] A information seemed like a contest breaking Chinese law. In March, the com- and sometimes has the Internet connec- Although Google caused some loss of face of brute strength. But it’s becoming clear pany began to redirect users from the tion cut off for a short period. to the government by taking a stand, this is more like a Chinese exercise google.cn page to its Hong Kong site, The main differences now are that blocking Google entirely would only high- ASECOND LOOK known as “pushing hands.” The object is google.com.hk, which was uncensored. Google is no longer complicit in the cen- light the country’s political backward- AT SECTORS AND STOCKS to make an opponent fall over, but often Beijing objected to that sorship, and the user is ness. Google, meanwhile, wants to keep a Standard Chartered PLC is the best way to do that is to let him lose automatic referral, so more aware that the toehold in this huge and rapidly growing planning a listing in an Asian his balance by trying to topple you. on June 28 Google The company keeps its search request is being market, and for now it seems to have manufacturing titan. StanChart’s Last week brought the news that Bei- made a minor conces- censored. When Google done so. rationale? Marketing its brand jing has renewed Google’s license to op- sion by stopping the au- license, while Beijing was doing the censor- This is good news for everyone, not there (the bank doesn’t especially erate in China. That shows that Beijing tomatic redirect and in- ing, the only indication least Google’s investors, who saw the Tuan Le (3) does the censoring. need the capital). In a recent knows that throwing Google out entirely stead provided a link to that search results were company’s shares climb 2.4% on Friday. Ryan Carlson demonstrates traders’ hand signals on his website. Left to right: the old Shearson Lehman (cutting interview, Jaspal Singh Bindra, its would only expose its censorship regime google.com.hk that us- incomplete was a small The calm may not last long, as China’s ‘shears’), the old Refco (‘reefer’) and Goldman Sachs (touching a wedding ring). Asia chief executive, says the bank to greater pressure—from its own people ers could click on. Google’s renewal ap- message at the bottom of the screen. censorship is even now facing new chal- views a Shanghai listing as more of a marketing push rather than finding ways around it as well as interna- plication deadline was June 30. Beijing is no doubt hoping that many lenges from social networking sites and to one to locally fund its working- tional condemnation. To be clear, Chinese users still aren’t Chinese netizens will find the blocked Twitter. But give Google credit for stand- capital needs. Recall that in January Google an- getting uncensored search results. If they pages too annoying and abandon Google, ing up for its principles while operating in Chicago trader has hand StanChart’s recent experience nounced it would stop self-censoring use google.com.hk to search for forbid- using the main domestic competitor, a country with a government that is still in India broadly supports its search results on its China site. However, den topics, the data are stopped by the Baidu, instead. But the Google search en- hostile to the free flow of information.

rationale. The bank was the first Bloomberg News foreign company to offer Indian Standard Chartered’s Hong Kong HQ Depositary Receipts, and the 24.9 in history of trading pits billion rupees ($532.1 million) open platform like Android and raised in May was a mere trifle Google Chrome, with hardware BY MARY PILON changes or academics, making Mr. were trading and in what quantities for a bank with a capitalization of partners Sony, Logitech and Carlson the accidental historian of and prices. Some traders who re- £34.70 billion ($52.60 billion). Intel, no doubt with the aim of An Obama Home Run CHICAGO—Ryan Carlson left the hand signals and all things trading. main in the pits still use hand sig- True, initial investor reaction repeating the trick on the trading pits here in 2005 to trade “I think I’m the only person in nals but also may use computers to to the offering was lukewarm due television screen. electronically. But he didn’t leave the world who collects this stuff,” execute orders. to local investment restrictions The new platform would allow f all Barack Obama had to do as U.S. All three of these senior officers have trol of Fallujah in Iraq’s Anbar province. vilians. Remind us again what Lincoln said the past behind. says Mr. Carlson, poring through Mr. Carlson, a native of Topeka, and tax implications. But it’s nice Google to build up an even more President is pick generals, his ap- something important in common: They General Mattis’s experience in these the- about Grant. Mr. Carlson set off to record for photos of trading pits, trading jack- Kan., started at trading pits in Kan- to be paid half a billion bucks to detailed picture of user proval rating probably would be flying hate to lose. That is, they fight to win. In aters made him one of the earliest pro- Which brings us back to President posterity the dying language of ets and century-old badges and sas City, Mo., at 18, skipped college boost your own customer preferences and make it a better I high. Last week defense Secretary Robert particular, Jim Mattis knows the impor- ponents of the counterinsurgency strat- Obama. He leads a fretful Democratic hand signals that traders for de- handbooks in his condo here. and moved to the Chicago pits 1 1/2 awareness. Google Insights data place for advertisers. But perhaps Gates announced that Marine General tance of winning against the U.S.’s cur- egy later deployed with success in Iraq Party. Its Senate Armed Services Chair- cades used to buy and sell every- Even before the financial crisis, years later in 1999. He has been shows a clear spike in StanChart the key is that Google TV would James Mattis would succeed David Petra- rent, unrelenting enemy—Islamic terror- by General Petraeus. man, Carl Levin, spent most of his confir- thing from pork bellies to wheat. open-outcry trading was fading out trading only electronically since news searches out of India in the be the wrapper around a TV show, His pursuit put Mr. Carlson—30 as electronic trading rose. Elec- 2005. runup to and in the week of its which could, in time, enable eus as head of U.S. Central Command, ists. He served as a lieutenant colonel in Every news story on the Mattis ap- mation hearing for General Petraeus de- years old and among the last gener- tronic trading has made markets “He’s preserving part of our fi- IDR offering, which should have intelligent advertising to be which includes Afghanistan, Iran and Iraq. both Operation Desert Shield and Opera- pointment is going to highlight his 2005 manding assurance that the U.S. will get ation to learn trading via open out- more efficient, Mr. Carlson says, and nancial history,” says Richard Sylla, done its bit to raise the lender’s inserted around the television Notwithstanding the Rolling Stone tion Desert Storm. He commanded a Ma- remark that “it’s a hell of a lot of fun to out of Afghanistan by next July. cry—in the middle of a split be- he enjoys the flexibility and ease of chairman of the Museum of Ameri- corporate profile among India’s program. However, this could crackup, Mr. Obama’s choice of Stanley rine brigade in Afghanistan after the at- shoot them.” The suggestion is that this Any U.S. President needs better than tween old and new ways of trading. trading remotely, which he does can Finance and professor at New burgeoning middle classes. If that bring Google into conflict with McChrystal last year to lead his fight in tacks of September 11, 2001. Two years might cause problems at confirmation. that in his foxhole, and it is to Mr. In 2008, he launched trading- now for his own account. York University’s Stern School of can be replicated in China, then satellite and cable operators, Afghanistan was the right one. As was later, he led a Marine division into Iraq. Seriously? He was talking about enemies Obama’s credit that he has chosen to draw pithistory.com, now featuring 244 In the trading pits, traders used Business. an IPO clearly has substantial which now own the wrapper, and the decision to replace him with General Most famously, he helped to lead the who beat up women for not wearing veils, a line from Iran to Afghanistan with the trading hand signals, and an accom- hand signals to communicate or- CME Group Inc., the world’s marketing benefits. For companies with initiatives such as Canvas, a David Petraeus. U.S. Marine effort in 2004 to regain con- who behead and mutilate captives and ci- one-two punch of Petraeus and Mattis. panying blog, tradingpitblog.com. ders, allowing orders to be relayed largest derivatives-exchange opera- thinking “me too,” it’s worth U.K.-based live streaming of They are rare caches of financial above the roar. The hand signals tor, offers some guidance on hand- noting the advantage possessed video-to-television initiative. lore often undocumented by the ex- also let traders see what others signaling basics in its visitors gal- by StanChart and peer HSBC It’s generally accepted that for lery in Chicago, but Mr. Carlson sees Holdings, also considering a Google TV to make decent inroads that as the Webster’s Dictionary to Shanghai listing, with their strong in the market for those who watch his UrbanDictionary.com, the popu- historical ties to India and China TV in their living rooms it would lar slang website. And, like all marketing exercises, need to have sports, the obvious America’s Pro-Business President Bull horns, his site says, mean following through with tangible hit shows, on-demand movies and “Merrill Lynch.” A bear claw signi- efforts to build out local business high-definition capability. The fact LEGALNOTICES fies “Bear Stearns.” Holding one’s is critical and is the hardest part. that average gap from the time a he big political news out of Wash- cently for trade promotion, and its un- Street and the financial industry have to nurturing a fragile economic recovery index finger and thumb to the The lessons from Japan, show is recorded to the time it is ington is that the White House leashing of new regulations across any in- stopped writing as many checks to Demo- into a durable expansion. U.S. companies mouth, as if smoking, signals the however, are salutary, and a viewed is around 30 minutes wants you to know that President dustry you want to name. cratic House and Senate candidates after have an estimated $2 trillion in cash that now-defunct financial-services firm misstep in China is still possible, shows viewers want to watch T PUBLIC NOTICES “Refco” because “it sounded like unlikely as that may appear. their favorite show then and Obama is not antibusiness. That reassur- For a summary of the Administration’s two years of White House banker bashing. they could deploy to create new jobs or ‘reefer’ to the traders,” Mr. Carlson Many foreign companies listed there. Access to the programs that ing word comes in a dispatch from Polit- antibusiness agenda, consult the Business Big Labor can’t pay for every TV ad, and buy equipment, but they aren’t about to says. on the Tokyo Stock Exchange in customers want varies. In Europe, ico.com quoting senior White House aides Roundtable’s recent 54-page compen- nothing concentrates the political mind so do so until they know what their costs The signal on his site for the late 1980s and early 1990s as consumers in U.K. and Germany that they have launched “a coordinated dium. But don’t read it before you go to much as the lack of campaign cash. will be. We warned the White House
   

      
 Deutsche Bank AG is a reference to part of a publicity blitz to get in have the greatest amount of free- campaign to push back against the per- bed because you’ll wake up with night- However, our favorite line from the Po- about this early on when we wrote about   
           Adolf Hitler’s mustache. He says he on the Japanese market and a to-view services, so Google TV ception” that their agenda is hostile to mares if you’re an employer. litico.com story is this one: “And it is the dangers of a “capital strike.”
   


    

 received a request to pull it down, sense that Tokyo would be the wouldn’t need to buy up much (or business. Our guess is that the timing of this more than just politics: Obama’s aides be- The problem for Mr. Obama at this 
    but didn’t. “It’s slang,” says Mr. new economic center of the world. any) additional programming. In How in the world did anyone get that White House campaign has a lot to do with lieve confidence in the general direction stage is that business will need more than       

 
     
 
Carlson. “Like it or not, that’s how When the Topix set a record of the U.S., however, the free-to-view 

 
      
   

 idea? Perhaps the feeling set in sometime the Roundtable’s broadside, which has of White House policy has an effect on the words to conclude there’s been a real po-  
   some of these people communicated 2884.80 in December 1989, 119 offering is weak, so Google needs between the President’s public trashing of shaken even some of the President’s media willingness of corporations to hire, invest litical change. He’ll have to make some  
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       &$4 :("!#% $! "1& ,%$1 #+"  ''(#&#% $ )&$ #+" +"& %$1 fan of the site in London emailed Chartered, which in December equivalent of Doubleclick, which $ #+" )%2&#% $ !+ (), 3" ,% "2#", # #+"  ''(#&#% $ )&$ ,5%!  that some yellow Barings Bank trad- 1986 took the plunge. In 1995, it Google acquired in 2008, that Janet Daley writing in Britain’s Telegraph man as head of the American public health- procedures out of reach of patients whose $, "*  #+!"%, ($00 "
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(%#"  for 15 years were up for sale. How- companies that delisted that year. world include FreeWheel in the other word will do) for some of the most dis- formed by them. Dr. Berwick thinks that our &)& 4$*4, "$$!4)5&$%& ;. < ==>/;> < =// 70&2!%'%)"8 ever, they had to be picked up in —Jamie Miyazaki U.S. and Videoplaza in Europe. [Health Secretary] Andrew Lansley will credited features of our NHS. Dr. Donald Ber- own dear National Institute for Clinical Ex- &$, "* #+!"%,? ($ 00 "! )5"2 ' person. Mr. Carlson’s wife, Shauna, —Paul Sharma apparently propose sweeping away the com- wick is to head the Centers for Medicare and cellence (Nice)—which is scarcely ever out #  @! 2 ($!") made the trek. mand-and-control structure in which clini- Medicaid Services, which effectively means of the headlines for denying some poor suf-  "))4
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# >#+ 0) "*  C "*  C - don International Financial Futures Android to move from being a from Dow Jones Investment administrators, rather than by general prac- describes in ecstatic terms that will have a [W]e have—and America is apparently  5%,"$2"  -;->> < --.>/A< --;./= < ./- < --/./=; and Options Exchange (now part of strange word in the land of tech Banker. For more information, titioners.... tragicomic ring to most British ears) of just about to embrace—an approach to health < ./--> 70&2!%'%)"8 < --;./=- 70&2!%'%)"8 NYSE Liffe, owned by NYSE Euron- to a commonplace one on a visit www.dowjones.com/ The U.S. government, meanwhile, is gal- those evils of a national health system with funding which is inherently self-limiting. Ra- C!+" %,&$? 202 ' +!"%0"?2+&,3 ( $"2 'A,' !?2+&,3 ( $"2 ' ext), which closed its pits a decade billboard. In May, Google banker loping doggedly in the opposite direction, bi- which we are exasperated: The calculated tioning is what happens when you do not have ago. “I haven’t even scratched the announced Google TV, built on a zarrely determined to occupy precisely the rationing of treatment, and the ruthless en- enough of something to go around. And health surface,” Mr. Carlson says. “The ideological ground which Britain is abandon- forcement of uniform cost limits, which of- care that is paid for entirely by taxation cre- deeper I go, the more I get.” ing. Barack Obama has, indeed, appointed a ten puts the most advanced medication and ates shortages where they need not exist. “Read ‘em and weep.” 12 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 25 OPINION BUSINESS FINANCE South Africa: After the Vuvuzelas Go Quiet How cellphones generate mixed signals

BY MATTHEW KAMINSKI 2008. Nationalize the mines and nation. Clint Eastwood’s “Invic- example,” Simon Saunders, capital will flee. tus” depicted (and slightly exag- [ The Numbers Guy ] A tiny jolt director of technology for Real Johannesburg Helen Zille, the leader of the gerated) the importance of the Wireless Limited, a consultancy in Cellphone calls require so little Rejoice, the Beloved Country, opposition Democratic Alliance 1995 Rugby World Cup in South BY CARL BIALIK Pulborough, U.K., says of Apple’s toot your own vuvuzela. and premier of the Western Cape, Africa, won by the host. The old additional power to connect to a misleading signal bars. He says he Their beloved Bafana Bafana offers this nightmare scenario: “A ruling Afrikaners saw the nation More bars in more places? As wireless network that it would take understands why a cellphone didn’t make it past the first closed crony society for comrades embrace their favorite pastime, Apple Inc.’s blunder with its at least 10 billion such connections maker would show the maximum round, but South Africans con- only,” as in so many other African helping make them feel part of iPhone signal-strength display to power a 100-watt light bulb. number of bars for all but the sider themselves the winners of states. this new construct. In this World revealed, the number of bars on a Power, in watts weakest signals. “For the majority the 2010 World Cup. “We wanted But scratch a little, and Ms. Cup, black, white and in-be- phone has more to do with of that range, everything sounds Cellphone, 10 billionth to show Africa could do it,” Presi- Zille, the daughter of German im- tween—including in diehard Afri- handset manufacturers’ whims the same to you,” Dr. Saunders strong signal ofawatt dent Jacob Zuma told a lunch migrants and a former anti-apart- kaner areas—proudly flew the na- than it does with hard says. The problem with that crowd of investors Tuesday, “to heid activist, gives reasons to tional flag and cheered their calculations about network Toaster oven 1,225 approach is that the consumer challenge all the stereotypes.” think the World Cup glow may team. This was new. “It’s a good coverage. wouldn’t know that a call is at Laptop 120 They did it. South Africa put linger. The media, church and feeling that we’re all rooting for There is no standard industry risk of being dropped, something on an impeccably organized, ra- NGOs—bedrocks of a healthy civic the same side,” says Ms. Zille. definition of what the number of Flat-screen TV 120 that is more likely with weaker cially harmonious and—all the society—are vibrant; the constitu- From Mr. Zuma on down signal bars shown on a cellphone Clock radio 50 reception. horror stories about its murder tion and courts remain strong; comes the message that South Af- should represent. Consumers who Even the raw signal-strength and rape epidemics notwithstand- and throughout the transition, an rica must not squander the warm switch from one model or brand Note: Cellphone power is the connection to the number doesn’t tell wireless users network, not the power of the device’s battery. ing—safe party. The world got a Associated Press autonomous private business sec- vibes and new confidence. Greece to another might find that the everything they need to know long look at Africa’s only modern A lot is riding on whether the country can capitalize on its World Cup success. tor has played the critical behind- felt good after the 2004 Olympics; maximum number of bars has Sources: Energy Department; WSJ research about reception. Other economy, the glinting airports and the-scenes role in guiding the for- look what happened later. Here changed from four to five, and Photo: Getty Images factors—such as interference with stadiums and a sophisticated and or distracted by soccer. Pessimists sis and uncertainty. The ANC is merly Marxist ANC toward poli- the stakes go beyond recouping that seeing a maximum signal other cell towers, the type of dynamic society. On the new ex- assume the police will disappear riven by factionalism. Mr. Zuma cies that stimulate growth and at- the 40 billion rand ($5.2 billion) it means something totally different strength. A strong signal obtained, new formula it plans to adopt four only when signal strength is wireless network and how many press “Gautrain” from Johannes- with the last Cup tourist. tries to keep everyone happy, tract investment. cost to put on this show. Will on the new handset. Many say, when a caller is standing near based on the recommendations of above 200 quadrillionths of a others are using the burg airport to the Sandton busi- Over the townships and squat- from the ANC’s hard-left to the Ms. Zille’s own experience South Africa build up a free mar- wireless companies and phone a cell tower, could be about 10 its U.S. network provider AT&T watt. That is roughly 2.5 to 16 network—also are important. “The ness district the other day, a ter camps hangs the fear of an- pro-business clans, but he avoids shows that political pluralism is ket democracy, or will cronyism, manufacturers won’t reveal the billionths of a watt, according to Mobility, the wireless unit of times stronger than the threshold reasons calls get dropped are conductor’s voice came on, “We’re other wave of violence against the hard decisions and effectively also putting down firmer roots. In corruption and poor governance math they use to convert signal wireless engineers. (Thus it would AT&T. for iPhone to show four bars out much more varied than simple now moving at 160 kilometers an makwerekwere—slang for outsid- controls nothing. A succession 2006, she was the first opposition take it down the road to a failed strength to bars, calling the take 10 billion such connections to (An AT&T spokesman referred of five. signal strength,” says Spencer hour.” Think about that next time ers, immigrants from neighboring struggle is under way behind the politician to win a major mayor’s state? information proprietary. And last power a 100-watt light bulb.) At questions to Apple, and an Apple Comparing the iPhone’s Webb, president of AntennaSys you’re in a cab on the congested African countries. Rumors and scenes ahead of the 2012 ANC seat, in Cape Town. During her Though in many ways a case week, after some consumers the other end of the spectrum, a spokeswoman didn’t respond to a formula with other devices is Inc., an antenna-design company and potholed Van Wyck Express- leaflets warn of pogroms come congress to choose the next party tenure, crime fell 90% in the city apart from the rest of Africa, suc- noticed that holding the iPhone a signal of 10 quadrillionths, or request for comment.) difficult because most in Pelham, N.H. “We have done way from JFK into Manhattan. July 12. Rioting armed gangs at- leader. Mr. Zuma may not last center. Voters saw an alternative cess or failure here will aid or im- certain way made the number of 0.00000000000001, of a watt Several tech enthusiasts, manufacturers don’t share their nothing to make this whole thing But in the post-apartheid era, tacked migrants in 2008. The xe- longer than a single term. to ANC rule in practice, and last pede the continent’s awakening. signal bars decline, Apple could be enough to complete a though, have tested their iPhones calculations either. The Android’s more quantitative.” Alan Paton’s “beloved country” is nophobia speaks to the frustra- The head of the ANC’s Youth year she became the first non- Its financial, physical and intellec- disclosed that the formula it has call. So a phone still could work and reported that the company software is available on the Representatives for the Federal also the bipolar country. Now it’s tions among South Africa’s black League, Julius Malema, works ANC premier of one of South Af- tual infrastructure make South Af- been using was “totally wrong,” when it shows one bar, even was showing four bars out of a Internet, but representatives for Communications Commission and on a World Cup high. “We all love poor—as well as to the state’s hard to stir up racial nationalism, rica’s nine provinces since the rica the natural gateway to this causing the display to overstate though it has one-millionth—and maximum of five even with Motorola Inc., Samsung CTIA, the wireless-industry trade each other!” laughs writer and failure to provide security and scaring whites and the multiracial first multiracial elections in 1994. frontier market of 900 million cell signal strength. not one-fifth—the signal strength relatively weak signals. For Electronics Co., Research In group, say they have no rules or television personality, Justice press neighbors, Zimbabwe’s Rob- capitalist class. He wants the “I don’t think anymore that the people. “It’s just a rough graphical of that same phone when it shows instance, tech Web site Motion Inc. and Nokia Corp. all standards for signal bars. Matt Malala. But the party ended Sun- ert Mugabe above all, to clean up state to confiscate mines and national government believes “Nation-building is a process,” presentation,” Branimir Vojcic, five bars. AnandTech reported that signal declined to disclose the formula Larson, marketing manager for day, and today the hangover their acts so their people don’t banks. Twenty-nine and bombas- we’re hostile to South Africa,” she says Ms. Zille, “it is not an event.” professor of engineering and That one bar of signal strength strength as low as 80 their handsets use or didn’t wpsantennas.com, which sells looms. Looking beyond, the mood need to flee to find a better life. tic, Mr. Malema is an African says, referring to the Democratic After this World Cup, “we might applied science at George might suffice, but it could lead to quadrillionths of a watt respond to requests for the antennas to boost cellphone darkens. Where political stability was Hugo Chávez in the making. He’s Alliance. Count that as progress: swing back a little but not all the Washington University, says of dropped calls, poor data transfers corresponded to four bars. information. Representatives for signals, says he would like to see Crime tops day-to-day con- the selling point of the virtual already an accomplished king- The ANC had tried, by hook or by way back.” signal bars. and other headaches. Cellphone IPhoneRoot.com, an independent the four major U.S. that change. “What if your battery cerns. The thugs were scared one-party state led by the ruling maker, helping lead the hard-left crook, to stop her from taking In theory, the bars represent users’ ability to interpret the website for all things iPhone, ran carriers—AT&T, Verizon Wireless, indicator said it was full and all of away by the additional 40,000 po- African National Congress, the revolt inside the ANC that power as mayor. Mr. Kaminski is a member of the power of a phone’s connection signal bars has been hampered by separate tests and concluded that Sprint Nextel Corp. and Deutsche a sudden it dropped to zero?” Mr. licemen deployed in town centers country now has political paraly- brought Mr. Zuma to power in Sports helps unify a scarred the Journal’s editorial board. to its wireless network. Only a companies’ varying definitions four bars could correspond to Telekom AG’s T-Mobile USA—also Larson asks. tiny amount of power is needed to and a lack of full transparency signal strength as low as 13 declined to share formulas, with complete a call or download data, about what the bars mean. quadrillionths of a watt. some saying it was left up to the Learn more about this topic at yet most phones will get reception Apple hasn’t disclosed details The Google Android, by handset makers. WSJ.com/NumbersGuy. Email Britain Needs Structural Reform over a wide range of signal of the calculations it used or the contrast, shows three bars out of “This was an extreme [email protected].

BY JOHN LLEWELLYN sures would not be simple or The U.K. measures up well in 65. This has been the official age ondary and post-secondary but Apple expands in China with opening of Shanghai store painless, but the payoff could be some areas of structural policy: of retirement since the 1950s. Had non-tertiary education. Perhaps Many governments in Europe, great. competition policy (it has the that age been indexed to (healthy) as a result of this, social mobility Continued from page 21 consumers here. Its products are (Hong Kong) Ltd., has said it is in and particularly the United King- U.K. policymakers could, as I least restrictive product-market life expectancy, it would now be is low in the U.K. 6.4% of PC shipments, IDC said. seen by many in first-tier cities as talks to sell the new model. dom, see no alternative to cutting explain in my report published regulations amongst OECD econo- 80. Given that people who remain There are other areas too “Apple is definitely a laggard status symbols. Analysts say a delayed release, government expenditure. They’re this week by the Center for Policy mies); investment policy (the U.K. in work tend live to longer, a where the U.K. ranks poorly: In- when it comes to focusing on At the Shanghai store opening, among other factors, slowed autho- right. But to stop there would be Studies, reasonably expect to has fewer barriers to foreign di- structural policy that obliges peo- frastructure investment, and par- China,” said Shaun Rein, managing one Apple fan, holding a homemade rized sales of the existing iPhone to do only half the job. raise the rate of growth in poten- rect investment than any OECD ple to retire simply on grounds of ticularly transport infrastructure, director of Shanghai-based consult- poster of Chief Executive Steve models in China, as users go to the Britain’s fundamental problem tial output by at least half a per- economy); and labor-market flexi- age both places a greater burden has been specifically identified by ing firm China Market Research Jobs, said he flew to Shanghai from “gray market” to buy unauthorized is that it has been spending be- centage point per year on average bility (the U.K. has the lowest on those who are still working, the OECD as an area that needs Group. “Apple needs to make China Jilin province, more than 1,000 kilo- imports of Apple products. yond its means for too long. over the coming decade. The level of employment-protection and shortens the lives of those improvement in the UK. a priority market” or risk seeing an meters to the north, to attend the IDC estimates 760,000 Unicom There are two ways to bring ex- gains could translate to as much legislation of all OECD economies who retire. None of this is to say that re- impact on its sales growth, he said. opening, and lined up for five days. iPhones were sold in the first two penditure into line with re- as three quarters of a percentage other than Canada and the U.S.). Moreover, a large proportion forming structural policies is Apple has said it is accelerating By Friday night, the crowd at the quarters of its official release in sources: One is to reduce expendi- point. This would be worth (in to- of people retire even before the easy. Structural policies are com- its push overseas. Just 62 of Apple’s Shanghai store had grown to about China, accounting for 2% of China’s ture; the other is to increase day’s prices) a cumulative £82 bil- official retirement age—often the plex and difficult; individually 283 retail stores at the end of De- 150 people, some wearing iPhone 4 smartphone market as of the first resources. And the way to achieve lion ($135 billion) to £124 billion- No matter how much unintended consequence of final- each structural reform typically cember were international outlets, quarter, and less than 1% of China’s the latter is to embark on a set of odd by 2020 in additional GDP. salary pension schemes. Whereas has only a small effect—they op- but the company has said that more overall handset market. Apple sold structural-policy reforms that This is not an area that partic- the government cuts, in the 1960s, 90% of British men erate slowly, and they interact than half of the 40 to 50 new stores 8.4 million iPhones world-wide in raise the growth of the economy’s ularly interests most academic its economy can’t between the ages of 60 and 64 with one another. To produce a it plans to open in the current fiscal Apple has been slower than the first quarter alone, according to productive potential. These mea- economists. It involves little eco- were in work, today that figure is worthwhile effect, therefore, a year, ending in September, will be research firm Gartner. nomic theory and certainly no ad- afford not to grow. only 60%. In New Zealand, a cul- range of structural policies is outside the U.S. its rivals to expand overseas, Consulting firm BDA China Ltd. vanced theory. It involves no eru- turally similar country, 75% of needed, as is a degree of met- Apple’s plan to open more stores even as the U.S. technology estimates about 2 million to 3 mil- dite mathematics. And on the men in that age group are work- tle—the politics of structural re- in China shows it recognizes “the company has grown rapidly lion iPhones have been purchased in EUROPE other hand it requires much de- In other areas though, the U.K. ing. form are not easy. importance of these markets outside China via the gray market. But even tailed information about the fares less well, and some of these Simply addressing these two There is clearly a lot to play of the Western world,” said Bryan that is a relatively small share of Andrew Langhoff, Publisher at home. structure, and particularly the in- are amongst the most important. demographic and labor-market is- for. The cross-country evidence Ma, analyst for IDC in Singapore. the total. China has more than 780 Patience Wheatcroft, Editor in Chief, Europe Iain Martin, Deputy Editor in Chief centive structure, of a wide range In respect of active labor-market sues could increase the U.K.’s po- painstakingly compiled by the He added that the company’s million mobile accounts. Tim Hanrahan, Managing Editor, News of individual policies. In short, policies, for example, which ac- tential rate of growth by around OECD could usefully be the start- plan to start international sales of Mr. Ma of IDC said Apple’s mar- Brian M. Carney, Editorial Page Editor this is the stuff not of faculties of tively seek to retrain and other- half a percentage point per year. ing point for the new British gov- the iPhone 4, the latest version of T-shirts. Several people there said ket share is growing, and he doesn’t economics, but of departments of wise equip unemployed people for Another area where the U.K. ernment in constructing a set of its popular smartphone, more they hoped to be able to buy the think it’s too late for Apple. IDC ex- Tracey Lehane, Advertising state and international organiza- the world of work rather than ranks poorly is education. British interlocking, reinforcing, struc- quickly than with previous models is iPhone 4 or iPad, which also hasn’t pects the Chinese PC market will Jonathan Church, Circulation tions—most notably the OECD. passively handing them welfare, 15-year-olds rank well below top tural policies for the U.K. No mat- also a sign of greater focus outside started selling yet in China. But grow more than 20% annually over Mike Elsas, Operations Structural policies operate in the U.K. scores low in interna- performers in reading, science, ter how much spending the gov- its home market. neither of those products was in the next five years, and smartphone Michele Lally, Marketing four basic ways. Some increase tional comparison: Only the US, and mathematics. The gap be- ernment cuts, its economy can’t Apple has said it will release the showrooms, though the earlier ver- penetration is seen increasing as Kate Dobbin, Communications the quantity of available inputs; Korea, and Japan score lower. tween the highest and lowest per- afford not to grow. device in dozens of countries by sion of the iPhone was in stock. well, which will create more oppor- Published since 1889 by Dow Jones and Company some increase the quality of those The U.K. has also not yet ad- formers in science is larger in the September, although it hasn’t spe- Apple declined to say when the tunities for Apple. inputs; some increase the ability dressed its demographic issues. U.K. than in all other countries Mr. Llewellyn was head of OECD cifically set the timetable for China. iPhone 4 and the iPad will be avail- “I wouldn’t say the game is over © 2010 Dow Jones & Company. All Rights Reserved of the economy to adapt to The baby-boom generation is, in except the U.S. The U.K. also has international economic forecast- Despite its relatively small pres- able in China, though Apple’s cur- yet,” Mr. Ma said.

change; and some increase the the U.K. as in many other OECD a lower-than-average proportion ing and policy analysis, and is a ence in China, Apple enjoys high rent Chinese partner for the iPhone, —Juliet Ye in Shanghai Sipa Press jk economy’s resilience to shocks. countries, about to start turning of its population with upper-sec- partner in Llewellyn Consulting. brand awareness among wealthier state-owned carrier China Unicom contributed to this article. Apple has said it plans to open 25 stores in China by the end of next year, 24 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 13 BUSINESS FINANCE OPINION Anshu Jain now leads the FN100 Iraqi Electrical Access Can’t Wait

BY HAMISH H. MCNINCH But progress in the last 18 ment, in perhaps its last substan- In another year of flux, Financial News’s list of top players sees plenty of exits and entrants months has not been sustained, tial gift to the Iraqi electricity Two senior resignations will and many Iraqis still get less than ministry, has commissioned an Financial News named Deutsche have caught the keen attention of six hours of electricity per day. electricity master plan. Bank AG’s Anshu Jain to the top of From 11 to 40 Gen. David Petraeus last month. Mr. Waheed’s resignation came Appointing “best of class” its annual FN 100 list of the most 11. Stuart Gulliver, CEO of global Clearly the case of Gen. Stanley only a short time before he would consulting engineers to oversee influential people in European fi- banking and markets, HSBC McChrystal has had a bigger and likely have been replaced anyway, the construction projects is a pri- nancial markets. Holdings PLC more immediate impact on Gen. amidst the current efforts to ority. This, and a willingness to Over three months, Financial Petraeus’s life. But he will also form a new Iraqi government. Yet take heed of the expert advice 12. Michael Dobson, CEO, News drew up lists from 10 catego- have noted with concern the res- Iraq’s leadership still does not that is still available to them, Schroders PLC ries: chief executives, regulators, in- ignation of Karim Waheed from seem to have grasped the gravity would allow an Iraqi government vestment banking, mergers and ac- 13. Nout Wellink, chairman, Basel his post as minister of electricity of the electricity situation. Fol- to make a dramatic improvement quisitions, capital markets, fund Committee on Banking Supervision in Iraq. lowing Mr. Waheed’s resignation, in the country’s electricity supply management, hedge funds, private In successfully dealing with Prime Minister Nouri al Maliki by the summer of 2012, and could 14. Miles Millard, global head of equity, pensions and market infra- the Iraq insurgency, it was knowl- gave a press conference where he conceivably make Iraq a net ex- debt capital markets, Deutsche structure. All nominees had to be edge and understanding of mat- attempted to explain the size of porter of electricity by 2020. Any Bank based in Europe, the Middle East or ters other than the purely mili- the problem the country faces, Associated Press government that committed itself Africa, and FN excluded central 15. Michael Platt, co-founder, CEO tary that frequently allowed Gen. and reportedly declared that Baghdad has wasted too much time in untangling supply problems. to such a program and then bankers and those in government and head of trading, BlueCrest Petraeus to surprise visitors. He things wouldn’t improve for two achieved it (and it is entirely (except in a regulatory capacity). Capital Management correctly identified the para- years while “the power stations power plants with fuel; and with very contractors he had to rely achievable) should be guaranteed Candidates were then assessed for mount importance of electricity being constructed by GE and Sie- a general unwillingness to main- on. Despite being a highly quali- a landslide at the next election. 16. Hector Sants, CEO, Financial influence over their area, leadership for the well-being of Iraqis and mens were completed.” tain or improve the plants Iraq fied engineer in his own right The stimulus that such a plan Services Authority within their sector, performance how an increased supply would The even more grim truth is already has, there is little pros- and having a genuine desire to would give the economy should over the past year, and their capac- 17. Carsten Kengeter/Alex Wilmot- reduce support for the insurgency that neither GE nor Siemens are pect of progress. improve conditions for the Iraqi be enough to pay for all the ity to shape their business and/or Sitwell, co-CEOs, UBS Investment while stimulating the economy at building power stations in Iraq. Meanwhile the people of Iraq people, he possessed neither the work. industry over the year to come. The Bank the same time. Both companies have significant have just struggled through the organizational, managerial nor Mr. Waheed was repeatedly list was then whittled down to 100. orders for generators from the hottest June for many years. And, leadership skills to succeed. told this but did not, or could 18. Martin Halusa, CEO, Apax Only two-fifths of last year’s government. But the cost of the in a country where only about Nevertheless there is still po- not, act on it. And Mr. Maliki’s Partners FN100 kept their places on this, the Adequate power generators takes up only about 7,000 megawatts of electricity are tential for a turnaround if a new government failed to listen to sixth annual list. A year earlier, only 19. Bjarne Graven Larsen, chief 50% of the total cost of a power generated daily against a demand minister is willing to make the those who told them that Mr. Wa- 25 people managed to return to the investment officer, ATP for civilians will be key to station, and the generators are at least double that, the equiva- right choices. Generators (and a heed was not going to succeed if list. Financial News, like The Wall the quickest part to procure. The lent of 4,000 megawatts of gas huge number of them) are on or- he maintained his posture. 20. Michael Sherwood, co-CEO of maintaining stability Street Journal, is published by News construction and commissioning continued to burn in flares in the der. The Ministry of Oil’s an- Securing adequate electricity Goldman Sachs International Corp.’s Dow Jones unit. once U.S. troops leave. of the full power plants is the southern oilfields, while politi- nouncement to build modern re- access for civilians may be the

The biggest name to have Agence France-Presse/Getty Images 21. Michel Barnier, member of the real challenge. That’s a job for cians argued about whether to fineries in Iraq, its proposed single most important factor to dropped off the list is last year’s Anshu Jain controls the profit engine of Deutsche Bank and is considered the frontrunner to succeed Josef Ackermann. European Commission, Internal consulting engineers and con- ratify a two-year-old deal with increase in oil production, and keep peace and stability in Iraq No.1, Bill Winters, former co-chief Market and Services Gen. Petraeus and U.S. Ambas- struction companies, none of Shell to capture it. the recent announcement that the once U.S. troops start to draw executive of investment banking at prove the derivatives markets and cellor of the Exchequer, George Os- cording to Financial News and Dow sador Ryan Crocker constantly whom have yet been selected, let Mr. Waheed prevaricated and Shell gas-capture project will fi- down. In this vital mission, the 22. Peter Clarke, CEO, Man Group J.P. Morgan, who left in September. cut the risk of moral hazard in sys- borne, who has expanded the gover- Jones data comparing CEO pay with and forcefully reminded the Iraqi alone contracted, to start the postured, but failed to make the nally proceed, should eventually Iraqi government has lost too Although Mr. Winters remains po- temically important financial firms nor’s role. Under the coalition bank profits. Having weathered the 23. Johannes Huth, head of leadership of the importance of work. decisions and commitments nec- deliver copious quantities of much time already; they can’t tentially influential as a member of as part of its broader effort to pro- government’s plans, the Bank of financial crisis without state aid and Europe, Kohlberg Kravis Roberts electricity and the need to ex- Were all such contracts signed essary to transform Iraq’s elec- gas—the fuel of choice for elec- lose any more. the British government’s Banking mote financial stability. England will have power over reaping the benefits of buying Leh- pand its availability. Their advice tomorrow and work was to pro- tricity situation, despite the ad- tricity generation in Iraq. In the 24. Luigi de Vecchi, co-head of Commission, he is succeeded in the macroprudential, or system-wide, man Brothers’ North American oper- was backed up with resources, ceed at all possible speed, it vice and support he had from Kurdish region, two large power Mr. McNinch is a former British global investment banking, Credit No. 1 spot by h Mr. Jain, who se- 3. Brady Dougan regulation, while the new prudential ations, all eyes are on Mr. Varley’s technical advice, and unique pow- would remain a tall order to get Western experts. He was indeci- stations of the sort that are en- Army engineer, and served as Suisse cured that slot for the first time af- Chief executive, Credit Suisse regulator, headed by Hector Sants, next move. Could another big U.S. ers of influence. As a result the the additional power on the grid sive and mercurial, apparently in- visaged for the rest of country principle energy advisor to Coali- Group will be folded into the Bank of Eng- acquisition be in the cards? 25. Edouard Carmignac, founder system was stabilized, a growth within two years. With the Minis- capable of strategic thought, were built and brought on line tion military commanders in Iraq Under Mr. Dougan, Credit Suisse land. Mr. King also is a likely candi- and CEO, Carmignac Asset plan developed and, as generation try of Electricity’s siting plan still mired in detail, unwilling to dele- within 20 months using private in 2008 and 2009. He remains The FN100 continues to chart a steady course. date for the position of deputy gov- 9. Alan Howard Management output steadily increased, there subject to revision; with no deci- gate, and seemingly terrified of contractors, showing what can be engaged in helping Iraq to de- The bank was relatively untarnished ernor of the soon-to-be-created Co-founder, Brevan Howard Asset was great optimism. sions yet on how to provide the being taken advantage of by the achieved. And the U.S. govern- velop its energy infrastructure. 26. Franck Petitgas, global co-head The full list of the FN100, its by the financial crisis. With one of European Systemic Risk Council. Management LLP of investment banking, Morgan methodology and more-detailed the highest Tier 1 ratios around, the Mr. Howard, the low-profile Stanley profiles of its members can be bank is better placed than many ri- 6. Josef Ackermann trader at the helm of Europe’s larg- found at vals to handle the tougher capital Chief executive, Deutsche Bank est hedge fund by assets, is notori- 27. Rajeev Misra, joint global head www.efinancialnews.com/fn100 requirements likely to become the Deutsche Bank remains the Euro- ously risk averse. of fixed income, currencies and norm in the years ahead. However, pean benchmark in equity and debt He won’t ski during the peak commodities, UBS Mr. Dougan, who became CEO in capital markets, and it continues to season, and his traders operate Lessons From the Swedish Welfare State 28. Yngve Slyngstad, CEO, Norges ter five years of circling the top of May 2007, won’t be able to rest on impress rivals in mergers and acqui- within tight risk limits. Brevan Bank Investment Management the list. his laurels: Credit Suisse’s great ri- sitions. Mr. Ackermann, who has run Howard, whose flagship fund was up val UBS AG appears to have over- the bank since 2002, has maintained 19% last year and is now closed to 29. Viswas Raghavan, head of BY ANDREAS BERGH demonstrates We also investigated the claim icans pay others to do for them. 1. Anshu Jain come the worst of its problems and a steady hand on the tiller. Under new investors, is under pressure to international capital markets, J.P. AND MAGNUS HENREKSON that when gov- that Sweden is proof that big gov- Americans eat out more and hire Head of corporate and investment looks ready to steam ahead. his watch, the bank has yet to suffer prove that he can maintain its per- Morgan ernment ernment does not harm the econ- people to clean their homes, take banking, Deutsche Bank a compensation backlash. Succes- formance despite its size. The firm Americans are debating spending in- omy. While Sweden has done very care of their children, or mow 30. Simon Dingemans, managing Mr. Jain, Deutsche Bank’s heir 4. Keith Skeoch sion continues to be an issue: Mr. now manages over $30 billion, hav- whether to substantially expand creases by 10 well compared to other developed their lawns. Swedes, who have director in European M&A, apparent, has good reason to smile. Chief executive, Standard Life In- Ackermann agreed last year to stay ing benefited from inflows to blue- the size of their government. As percentage countries in the last 15 years, it less money to spend after taxes, Goldman Sachs Not only has his closest rival for the vestments Ltd. on until 2013 but has admitted to chip managers. Swedish economists who live in points of GDP, has also implemented sweeping will do such work themselves. top job, Michael Cohrs, dropped out As chairman of the Institutional being in “intensive talks” about Mr. Howard is the only non- 31. Edward Bonham Carter, chief the developed world’s largest wel- the annual pro-market reforms. Examples in- Raising government spending and of the running, he controls Shareholders’ Committee, an um- what happens then. He also will American to sit on the Investor Ad- executive, Jupiter Fund fare state, we urge our friends in growth rate clude a national system of free taxes would cause Americans to Deutsche’s profit engine and his pay brella body for insurers, pension have to manage the changed dy- visory Committee of the New York Management the New World to look carefully drops by 0.5 to school choice based on vouchers behave more like Swedes, hurting is roughly on a par with that of plans and asset managers, Mr. Ske- namic at the investment bank, for Federal Reserve, and last month before they leap. 1 percentage up through senior year of high the entire U.S. service sector and 32. Richard Boath, co-head of Chief Executive Josef Ackermann, och lit a fire under the institutional which Mr. Jain is taking sole re- moved from London to Geneva to Fifty years ago, Sweden and point. This school, a financially stable public throwing many—mainly working global finance, Emea, Barclays who is due to retire in 2013. This financial-services industry by calling sponsibility. avoid an increase in U.K. taxes. America spent about the same on may not sound pension system that can adjust class Americans—out of a job. Capital month, Mr. Jain became sole head of for an investigation into investment- their government, a bit under 30% like much, but payouts if contributions to the Many Americans argue that the corporate and investment banking banking fees. His demand helped 7. Oswald Grübel 10. Xavier Rolet 33. Eddy Wymeersch, chairman, of GDP. This is no longer true. In over 30 years system fall for some reason, and U.S. could safely increase its following the retirement of Mr. push the U.K. Office of Fair Trading Chief executive, UBS AG Chief executive, London Stock Ex- Committee of European Securities the years leading up to Sweden’s this would re- comprehensive tax reform that spending share from roughly 32% Cohrs. into a formal probe of fees paid by Whisper it discreetly, but it looks change Group PLC Regulators financial crisis in the early 1990s, sult in the loss has lowered marginal tax rates of GDP to 37%–38% of GDP. The companies seeking equity financing like UBS may have put the worst be- Mr. Rolet is embracing the government spending went as of trillions of enormously. evidence suggests otherwise. The 34. Baudouin Prot, chief executive, on the stock market. hind it and once again be about to daunting task of turning the London high as 60% of GDP. In America it dollars each Even if Sweden’s government U.S. needs to acknowledge the BNP Paribas 2. Mario Draghi Mr. Skeoch, who continues to ca- mount a significant challenge in Eu- Stock Exchange into a modern, tech- barely budged, increasing only to year in an still spends some 20% of GDP trade-off between government Governor of the Bank of Italy, jole his asset-management peers rope. When Mr. Grübel took over in nology-led business by cutting costs, 35. Dominique Cerutti, president about 33%. economy as more than the U.S. on average, the size and economic growth. A chairman of the Financial Stability into engaging as owners of compa- February last year, the bank was at reorganizing management and over- and deputy CEO, NYSE Euronext While America was maintaining large as Amer- Swedish economy is now much larger government sector may de- Board nies, earning praise in February a low ebb, hit by huge write-downs hauling technology. The LSE has the its standing as one of the world’s ica’s. more market oriented and govern- crease some economic inequality, 36. Jonathan Moulds, president of Mr. Draghi, a former Goldman from Lord Myners, then financial and departures of some of its most largest trading volumes in Europe wealthiest nations, Sweden’s To put it in ment spending is down by almost but will ultimately leave Ameri- Europe, Middle East and Africa, Sachs managing director, identified services secretary to the Treasury, senior executives. After a round of and the U.K., but new multilateral standing fell. In 1970, Sweden was personal 10% of GDP since the early 1990s. cans sharing smaller pieces of a Bank of America Merrill Lynch 2010 as a critical year for the FSB, also is extending Standard Life’s job cuts, the investment-banking di- trading facilities are attracting li- the fourth richest country in the terms, the av- Sweden’s recent growth is thus smaller pie. which was forged last year by the global reach, with strong new asset vision is gaining ground, and there quidity with faster systems and 37. Wim Borgdorff, managing world on a per-capita basis. By erage Ameri- the result of opting for free-mar-

Group of 20 industrialized and de- flows this year. are signs that client outflows at the lower fees. In response, Mr. Rolet partner, AlpInvest Partners 1993, it had fallen to 17th. Corbis can’s per cap- ket solutions instead of growing Mr. Bergh is an associate with veloping nations to replace the Fi- wealth-management unit have bot- bought Sri Lankan technology group This led us to ask whether ita income in government. By comparison, the the Research Institute of Indus- 38. Emilio Saracho, chief executive nancial Stability Forum and which 5. Mervyn King tomed out. Analysts still stress that MillenniumIT to replace the LSE’s Sweden’s dramatic increase in the most recent research, by Diego 2009 was $46,405. A dip of 1% in U.S. already has a relatively free trial Economics, Lund University of investment banking, Emea, JP coordinates at the international Governor, Bank of England there is a mountain to climb before trading platform. H size of government contributed to Romero-Avila in the European the economic growth rate (to 2% economy, and therefore does not and the Ratio Institute in Stock- Morgan level the work of national financial If the answer is 23, what is the the bank regains normality. e acquired Turquoise to help its sluggish growth. Our research Journal of Political Economy from 3% for example) would mean have as much potential for further holm. Mr. Henrekson is the CEO authorities and international stan- question? That was the riddle Bank provide a multi-asset, pan-European 39. Pierre-Henri Flamand, founder, shows that it did. (2008) and by Andreas Bergh and an individual income loss of $464 market-based reform in order to of the Research Institute of Indus- dard-setting bodies. It is pressing of England Governor Mervyn King 8. John Varley trading platform, using aggressive Edoma Capital We surveyed the existing liter- Martin Karlsson in Public Choice in the first year. Over 30 years, a offset the negative growth effects trial Economics in Stockholm. ahead with ambitious regulatory ef- posed at the annual Bankers’ Dinner Group chief executive, Barclays fees to attract high-frequency trad- ature looking at the trade-offs be- (2010) find a negative correlation one percentage point difference in of a larger government. They are the authors of “Govern- 40. Giuseppe Monarchi, head of forts to bolster bank capital and li- at Mansion House. The answer, he PLC ers, and is challenging Eurex and tween government size and eco- between government size and eco- the growth rate translates to Also, in Sweden, high personal ment Size and Implications for the mergers and acquisitions quidity standards, improve incentive later revealed, is the difference in John Varley was the best-value NYSE Liffe’s dominance in European nomic growth throughout the nomic growth in rich countries. roughly $354,000 in lost income tax rates encourage people to do Economic Growth” (AEI Press, group, Emea, Credit Suisse structures and transparency, im- age between Mr. King and the Chan- banking chief executive last year, ac- exchange-traded derivatives. world. While results vary, the The weight of the evidence per person. work around the house that Amer- 2010). 14 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 23 THE BIG READ BUSINESS FINANCE Market view: Only a slow recovery

Mass leak of large client data BY DAISY MAXEY sets, also expressed skepticism future we’re going to be in a subpar 38% expect European stock markets they saw currencies as riskier, while about commercial real estate. environment,” said Marc Harris, co- to rise, and 40% indicated they ex- 51% indicated corporate debt was Money managers world-wide are The data on asset managers’ head of global research at RBC Capi- pect European stock markets to de- seen as riskier. optimistic about prospects for the views was compiled as part of a tal Markets. That translates into cline in the period. Yet 38% of respondents indicated U.S. and Asian stock markets over larger survey of 440 senior corpo- what is being seen in the stock mar- But Mr. Harris said it is impor- currencies was the asset class they the next 12 months, but they never- rate and finance executives world- ket, he said. “At the first sign of tant to note that the asset managers would most likely increase over the theless project a slow recovery in wide conducted April 28 to May 25. economic numbers being a little dis- chose those markets over others, next year in light of the sovereign- rattles Swiss banking world global economic growth, according Global economic growth over the appointing, it’s really taken the mar- and aren’t wildly optimistic. “People debt crisis, while 37% chose stocks to a new survey. next two years will resume, but at a ket down by a significant degree.” are not jumping and trampling over and 35% chose commodities. Just The impact of inflation is a fear, pace lower than that of the 2003 to U.S. markets will improve in the each other to get their hands on U.S. 17% indicated they plan to increase BY DAVID GAUTHIER-VILLARS indicated the 102 global mutual- 2007 period, nearly half of the year ahead, 66% of respondents in- assets; it’s more that people have to their allocation to U.S. Treasurys, Two employees of HSBC AND DEBORAH BALL Data dive fund, hedge-fund and private-equity money managers surveyed indi- dicated. Just 19% indicated they ex- be invested and where do they feel and 21% said they plan to increase Nice, France managers who responded to the cated. Just 11% indicated they ex- pect U.S. markets will move lower. less exposed, where do they feel non-U.S. sovereign debt allocations Countries that have acknowledged requesting or receiving a trove of leaked HSBC data from are at center of controversy survey, commissioned by RBC Capi- pect a prolonged period of economic Still, 57% indicated they believe that safe to be,” he said. in the coming year. French authorities. HE anonymous emails carried a tanta- tal Markets, the corporate and in- weakness and 5% that they expect the risks associated with stocks in Asked to evaluate how their per- Inflation poses a greater threat over use of data to bring lizing subject line: “Tax evasion: cli- U.K. vestment banking arm of Royal growth at the same or higher levels general is higher this year than last. ception of risk has changed over the to portfolio performance than defla- T ent list available.” The messages, sent 1,500 March 2010: U.K. tax authorities ask the French to forward details of British Bank of Canada, and released Mon- than from 2003 to 2007. Asian stock markets will rise past year, 57% of respondents indi- tion, 45% of respondents indicated. tax evaders to justice two years ago to tax authorities across Eu- taxpayers with HSBC offshore accounts in Switzerland. day. The respondents, who manage “The majority of people certainly over the next 12 months, 69% of cated they consider stocks to be ust 34% indicated they expect defla- rope, made an audacious claim: The sender Records French about $4.1 trillion in combined as- understand that for the foreseeable those surveyed believe, but only riskier this year than last, 56% said tion to be the greater threat. authorities say could provide a large client list of a Swiss- they have based private bank, plus access to its com- puter systems. The emails were sent to Ger- Italy many’s secret police, the French police and May 2010: Italian tax police say they have received details of Italian the U.K.’s tax authorities and foreign minis- • • account holders at HSBC with a total of nearly $7 billion. Italian authorities Futures Commodities Options try. New Detroit takes shape begin sifting through the lists in search of tax dodgers. The emails came from the computers of 7,000* Stocks • Forex • Bonds • Funds Hervé Falciani and Georgina Mikhael, two employees of HSBC Holdings PLC, people Spain Over 80 market centers familiar with the matter say. The caper has landed the two at the center of a contro- June 2010: Spain says it is investigating accounts held by Spaniards at in South India’s Chennai in 19 countries versy over whether governments should use 3,000* HSBC in Switzerland for possible tax fraud. Tax authorities say they have data obtained by dubious means to bring contacted the account holders and asked them to clarify whether the BY ERIC BELLMAN tax evaders to justice. money is tax-compliant. In high gear from one account HSBC officials allege that Mr. Falciani CHENNAI, India—This Indian India’s city of Chennai is booming thanks to the auto business copied thousands of files of wealthy clients *HSBC contests the figure, saying that the number of any accounts coming from any single country is no more than about 2,000. port city, built around a former Brit- Source: WSJ research Investments Employees Annual Capacity* of its Swiss private-banking arm. Swiss au- ish fort, in many ways resembles Hyundai $2billion thorities are investigating whether Mr. Fal- Detroit circa 1910. 10,000 650,000 Vehicles ciani, 38 years old, stole bank records and The metropolis of about five mil- Ford $950 million 200,000 Vehicles violated banking secrecy laws. authorities of breaching banking secrecy paid €4.2 million ($5.3 million) to a bank lion people is booming as scores of Mr. Falciani, a Franco-Italian computer and stealing banking records. Ms. Mikhael employee to buy stolen data from a Liecht- international car makers and suppli- 4,000 Nissan/Renault engineer, and Ms. Mikhael, 35, went on a is being investigated on similar preliminary enstein bank to chase tax evaders. ers have set up shop. Ford Motor $950 million 400,000 Vehicles border-hopping odyssey to offer the data to allegations, Swiss prosecutors say, which Mr. Falciani was 28 when he joined the Co., Hyundai Motor Co, Nissan Mo- 3,000 governments and other banks in Europe and she denies. French authorities aren’t inves- private banking arm of HSBC in his native tor Co., Renault SA, Daimler AG Mercedes/Daimler $950 million 72,000 Trucks the Middle East, according to people famil- tigating the two. Monaco in 2000. He held a degree in com- and BMW AG all have converged 600 iar with the investigation. To do that, they Switzerland strenuously objects to for- puter programming and wrote security soft- here. Michelin $850 million Tires Production has not started yet allege, he and Ms. Mikhael set up a virtual eign authorities using the HSBC data to ware for the bank. He was promoted several They are spending billions of 1,500 company, with Mr. Falciani using an alias. pursue tax dodgers and has warned it won’t times and, in 2006, he was transferred to dollars to make Chennai one of the Saint-Gobain $330 million 2 million Window Sets US Stocks Mr. Falciani admits being in possession world’s biggest hubs of small cars cooperate with any investigation stemming HSBC’s private banking headquarters in 300 of the data and confirms contacting govern- from what it regards as stolen data. An Geneva to improve database systems and for export as well as for increasingly Source: companies; *Includes planned capacity expansion USD 0.005 or less per share (all-in) ments about it. But he and Ms. Mikhael HSBC spokesman said the bank had no com- security. affluent Indians. Soon, the city will both deny breaking any laws. The emails ment on the use of the data by foreign tax Around that time, according to HSBC turn out close to 1.5 million autos a US Stock Options1 sent regarding the data didn’t ask for authorities. and people familiar with the Swiss probe, year, more than any single U.S. state close to $1 billion, deploying pro- rean families grilling beef at their money. He says his goal wasn’t to profit France has said it would use the data to Mr. Falciani copied thousands of files onto made last year. duction-line technology it doesn’t tables. $0.15 - $0.70 per contract from the data, but rather to expose secrecy pursue tax cheats. “We obtained those data personal storage devices and began consid- Car-parts suppliers also are plac- even use in the U.S., including car- The student population at the (plus exchange & regulatory fees) in banking practices. in a legal manner,” then-budget minister ering ways to monetize the information. ing big bets on the city, formerly painting robots and a deep-water Chennai American School has qua- “I am not a Robin Hood, I’m not a mer- Eric Woerth said in February. “France isn’t Mr. Falciani said that in Monaco and known as Madras. Tire company Mi- testing pool to ensure cars won’t drupled to close to 800 as new pu- European Stocks (Xetra/Euronext) cenary,” Mr. Falciani said in an interview. “I on the line for fraud, tax evaders are.” Geneva, he copied data onto personal com- chelin SA and window maker Saint- leak during monsoon floods. pils have arrived from the U.S., Ja- acted like a citizen.” In a twist, it is the French government puters and remote servers as part of his Gobain SA, both of France, are set- Michael Boneham, the Chennai- pan, Europe and Korea. A sprawling Min. EUR 1.25 Whatever the case, his plan rocked the that is now making the data available, routine work, essentially for backup pur- ting up some of their biggest facto- based managing director of Ford’s amusement park across the street (plus exchange and regulatory fees) banking world. promising to hand it over to other govern- poses. He denies that he considered selling ries globally in Chennai. Germany’s India operations, said educated la- from the Hyundai factory, a French Copies of the HSBC data did wind up in ments in pursuit of tax cheats. or tried to sell data. HSBC says bank policy Daimler, meantime, is building a bor, a consistent industrial policy, bakery, evangelical Korean churches Futures SMI2 the hands of French tax authorities, who In June, Spain’s tax authorities said they forbids employees from storing client data multimillion-dollar test track. access to a port and government fi- and Japanese grocery stores have are now using it to chase alleged tax dodg- had received some of the HSBC data from on personal computers. The investment has generated nancial incentives played a role in popped up in recent years. Min. CHF 0.35 ers with money stashed in Switzerland. The France and had started examining it. In In early 2007, Mr. Falciani began consult- jobs for more than 200,000 people luring the U.S. car maker to the city. “The city has really changed,” (plus exchange fees) French say they didn’t pay for the trove, May, Italian tax officials said they received ing experts on how to set up a company to and accounts for 12% of the eco- “India is now on the radar as one said R. Sethuraman, the Chennai- which includes the names and account de- from the French details on some 7,000 Ital- sell customer bank data, according to peo- nomic output of Tamil Nadu state. of the two most important markets based senior vice president of fi- Forex tails of thousands of customers from 180 ian account holders, involving nearly $7 bil- ple approached by him. During these meet- The kind of manufacturing being for Ford strategically world-wide,” nance and corporate affairs at countries. lion in assets, and are sifting through the ings, Mr. Falciani claimed the data came done in Chennai is what India needs the other being China, he said. Hyundai’s India unit. “We used to As low as ½ pip wide spreads The French acquired it when police records. from his expert mining of open, public to bridge the gap between its agri- Ford, among the first foreign only have South Indian food.” (plus a transparent low commission3) raided Mr. Falciani’s home in southern The size and scope of the HSBC case is sources, these people said. cultural work force, which makes up firms here, recently announced its New malls and apartments are France 18 months ago at the behest of acutely alarming to Switzerland’s $2 trillion “Yet, he said he needed a helping hand 60% of its population, and high-end best-ever quarter in India. Sales being built to serve the growing Swiss authorities, who had launched an in- offshore banking industry. Swiss bank-se- to understand whether his data were legal,” services industries, such as out- more than tripled in the second middle class of auto workers. Successful traders and investors understand vestigation into allegations of violations of crecy laws date to 1934, when the country said Guillaume Brachet, a Monaco-based fis- sourcing, that employ relatively few. quarter from a year earlier to The state’s technical institutes, bank secrecy. France sent copies of the data made disclosing bank data a crime. “If gov- cal consultant who dealt with Mr. Falciani’s Unlike China, India hasn’t been 22,858 vehicles thanks to its re- known for producing computer pro- that superior technology and low trading costs to Switzerland, but kept the original files ernments are in the market of buying illegal request. “Each time I asked how he got able to attract as many foreign in- cently expanded Chennai facilities. grammers and engineers, are hold the key to greater returns. for itself, to pursue possible tax cheats. data, that changes the world,” UBS Chief them, he grew nervous, and I couldn’t catch vestors to set up factories because Tamil Nadu has been better than switching focus to skills useful at Mr. Falciani, who remains in France, de- Executive Oswald Grubel said recently. his explanations.” of bureaucratic barriers and volatile most Indian jurisdictions at provid- car makers. nies preliminary allegations by the Swiss In another case two years ago, Germany Mr. Falciani says he and Mr. Brachet politics. ing the land, roads and electricity The growth of the car industry But Chennai’s boom is a sign that that the car industry needs. It also hasn’t been without problems. To learn more, visit us online India can create a productive envi- set up a single office for companies Hyundai unions have staged several Cracks in Swiss bank secrecy ronment when economic circum- to obtain the dozens of government strikes to demand better treatment www.interactivebrokers.com stances are right and demand is approvals and licenses required to of workers, traffic has become more June 2008- April 2009 September 2009- April 2010 January 2010 March 2010 there. India’s economy is expected start or expand a business. congested and rents in some of the August 2009 The OECD puts Switzerland on a Italy launches a tax amnesty A confidential informant offers to HSBC alleges a ‘serious to grow 9% this year and Tamil Big projects in India too often best neighborhoods are now out of Nadu has worked to minimize barri- run into problems when local gov- reach of the average Indian. so-called gray list of aimed at luring tax dodgers to sell to Germany stolen Swiss data theft’ by former U.S. authorities accuse UBS of ers to investment. ernments change parties. But when But Chennai’s production capac- Interactive Brokers having helped thousands of uncooperative tax havens, raising come clean by paying a very low account data containing details employee Hervé Falciani of Hyundai has invested $2 billion the state government was taken ity is set to rise even further. Ja- American taxpayers evade taxes the specter of sanctions against penalty on offshore accounts. The on alleged German tax cheats. account details of 24,000 here, and recently expanded to be over by the DMK from the AIADMK pan’s Nissan just started making The Professional’s Gateway to the World’s Markets by hiding money in secret Swiss the Alpine country. The Swiss move spurs Italians to declare The price tag: €2.5 million. current and former clients of able to produce 650,000 cars a year. in 2006, auto executives said they cars here in May after investing accounts. After a bruising battle, government subsequently agrees nearly €100 billion, with its Swiss private bank. Mr. The South Korean company was at- noticed no change in how they were close to $1 billion, and it plans to Interactive Brokers (U.K.) Limited is authorised and regulated by the Financial Services Authority. FSA UBS agrees to hand over the to relax bank secrecy laws. two-thirds of that from Falciani denies having stolen tracted not only to inexpensive fac- treated. ramp up to more than 400,000 cars register entry number 208159. [1] $1.00 minimum on all orders, no extra ticket charge. No technology tory-floor labor, but also to an abun- The influx of foreigners and for- a year. Its Indian-made subcompact, surcharges. [2] Non-member regulatory fees are applied, unless a customer is pre-qualified by IB. Contact names of 4,450 U.S. taxpayers to Switzerland alone. the data. your sales person for more information. [3] Commission is 0.1 to 0.2 basis points * trade value. USD 2.50 dance of low-wage engineers to eign money is altering this historic the Micra, will hit roads around the minimum commission on forex. Options and Futures are not suitable for all investors. The amount you the IRS by August 2010. program the robots that help churn city. In the largely vegetarian region world in October. may lose may be greater than your initial investment. Before trading options read the “Characteristics and Risks of Standardized Options”. Before trading futures, please read the CFTC Risk Disclosure. For a Source: WSJ research out vehicles. there is little meat for sale. But the —Arlene Chang contributed copy of either disclosure, call 2156 7907. 07IB10-324 Across town, Ford has invested Seoul Restaurant is packed with Ko- to this article. 22 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 15 BUSINESS FINANCE THE BIG READ

Hervé Falciani, a former employee of HSBC, is at the center of a dispute between France and Tech firms push shake-up in online ads Switzerland over bank data. must have had “a misunderstanding,” be- BY JESSICA E. VASCELLARO in exchange for advertising, and cause “my plan wasn’t to set up a com- marketing units, which are con- pany.” Mr. Falciani said his goal was to ex- SUN VALLEY, Idaho—As media cerned about experimenting with pose security gaps at the bank, which he companies voice doubts about new formats that may not work. thought could harm clients and govern- whether they can build their digital Both sets of concerns threaten to ments. businesses on advertising alone, cap the growth of online advertis- Mr. Falciani says he alerted his bosses at technology companies are trying ing. While growing faster than most HSBC in 2006 about flaws in data storage hard to persuade them to think forms of advertising, online-ad that could affect client confidentiality, but more creatively. growth was slowing even before the no one listened. HSBC officials said they In a range of interviews here last recession. found no such warnings by Mr. Falciani. week on the sidelines of Allen & In 2009, U.S. spending on Inter- Around that time, Ms. Mikhael, an HSBC Co.’s annual net ads, totaled $22.7 billion, or colleague, entered the picture. A Franco- ADVERTISING gathering of me- about 17% of the combined market Lebanese computer programmer, she joined dia moguls, com- for TV, magazines, newspaper, radio HSBC in Geneva on a temporary contract in panies ranging from upstarts to In- and Internet ads, according to Price- 2006, but had no access to sensitive data, ternet giant Google Inc. touted the waterhouseCoopers. the company says. Soon after arriving at promise of new ad formats they said The Interactive Advertising Bu- the bank, Ms. Mikhael and the married Mr. would outperform banner and reau reported that U.S. online-ad Falciani began a romantic relationship, search ads, the digital-ad industry’s revenues were up 7.5% from a year which has since ended, according to their current staples. earlier in the first quarter of 2010, respective lawyers. Google Chief Executive Eric more than in recent quarters but The pair set up Palorva, a virtual com- Schmidt championed “interactive down from years of double-digit pany that had a website with the motto: video ads,” which he said are on the gains. “Business is the art of extracting money way. Such ads, which could appear Media executives say they are in- from another man’s pocket without resort- anywhere on a Web page, not just trigued by new ad offerings, but ing to violence.” inside a video, would be like mini- they appear reluctant to put all The duo also had business cards present- Web pages. That means they could their faith in online advertising. ing Ms. Mikhael as a public-relations man- allow Web users to watch a video, Last week Mr. Schmidt answered ager and Mr. Falciani as a sales manager, leave a comment and see real-time a question from a reporter about but under the alias of “Ruben Al-Chidiack.”

updates within the ads that are Reuters whether Google’s YouTube unit The website claimed it could help banks re- more customized to their interests. Google co-founder Sergey Brin, left, talks to reporters, as co-founder Larry Page, center, and CEO Eric Schmidt listen. would launch a product that would cruit new wealthy customers by combing Mr. Schmidt said in an interview allow content owners to sell their through public data bases. Thursday that he has pushed about reinventing local advertising. tendees Saturday in a plum spot re- But Quantcast is among several content to consumers once and have In February 2008, Mr. Falciani and Ms. Google’s ad teams to think about the Groupon’s strategy is to let busi- served for the relatively small num- companies trying to persuade mar- it accessible across a range of de- Mikhael flew to Lebanon, where according potential for such ads, which he nesses design an offer, such as half- ber of entrepreneurs invited to the keters they can get a better return vices, such as computers and mobile to their lawyers they met Beirut representa- suggested would eventually become price theater tickets, and email it to conference. by buying online, mobile and even, phones, Mr. Schmidt said the com- tives of five banks: BNP Paribas, Société prevalent, but he didn’t comment on consumers together with commen- Others ventures are focusing on eventually, TV ads targeted at spe- pany had looked at that model care- Générale de Banque au Liban, Blom Bank, any specific plans for them. tary, such as a review of the play. persuading media companies to cific types of consumers, such as fully. Audi Bank and Byblos Bank. Helping small businesses reach Mr. Mason said he believes of- change how they buy and sell online people who have bought certain But, he said that rather than According to officials at the banks famil- new customers is one of the key fering customers a daily deal, and ads, hoping to expand the market by products or visited certain websites. paying for content directly, Google iar with the meetings, Mr. Falciani, who was markets being chased by big Inter- packaging it with related commen- brokering ads across a broader “Everyone sees the promise,” Mr. prefers to help media companies still employed by HSBC, introduced himself net companies like Google, Yahoo tary from Groupon’s staff of 70 full- range of websites, or even media. Feldman said. “They realize that the earn money through ads. as Ruben Al-Chidiack and made a short Inc. and AOL Inc., as well as start- time writers, is a more compelling Konrad Feldman, CEO ad-tech- traditional ways don’t scale.” “There is a revenue valley from marketing pitch. He evaded questions about ups like Groupon Inc. approach than traditional banner nology company Quantcast Corp., The tech companies are trying to the old model to the new model,” he how he obtained the data he offered to sell, Andrew Mason, CEO and founder ads, which he said are forgettable said in an interview Friday that the win over two different groups said, describing how content owners these people said. of Groupon, whose email newslet- and don’t help a businesses win loy- media bosses attending the Sun Val- within media companies. They in- would risk losing revenue through Mr. Falciani, in the interview, said the

ters offer subscribers a heavily dis- alty. ley conference are accustomed to clude business-development special- such a system. “We could bridge idea of marketing data was just a cover. He Agence France-Presse/Getty Images counted, or even free, deal of the “We look at Groupon as the evo- buying ads through a broadcast ists skeptical that they can make that model by writing very large said he was acting on a request by a foreign day on goods or services, said Grou- lution of the ad” format, said Mr. model, purchasing blocks of TV significant money by turning over checks, but we have chosen not to intelligence service—which he declines to cales, or DNEF, France’s top financial-inves- he would come back after the Christmas pon is talking to media companies Mason, who spoke to conference at- shows or websites. their content to Web services solely do that.” name. He says his assignment was to iden- tigation body. break, but hasn’t returned to Switzerland Mr. Falciani admits tify potential enemies of HSBC clients, DNEF investigators understood that Mr. since. within or outside the bank. Falciani could lead them to a mother lode of In January 2009, acting on a request being in possession of “When we went to Lebanon, I was on a financial records that France could use to from the Swiss prosecutor, Nice prosecutor mission,” he said. prosecute tax dodgers, the French officials Thierry de Montgolfier searched Mr. Fal- China renews Google’s license to use Web address Through her lawyer, Thierry Montger- say. But DNEF faced a legal obstacle: how to ciani’s parents’ house on the French Riviera, the data and confirms mont, Ms. Mikhael said she didn’t know use HSBC’s data without infuriating Swit- where he was staying. There, the police how Mr. Falciani had gotten hold of the zerland? seized a smart phone, a notepad, a laptop contacting BY LORETTA CHAO The decision preserves the Google’s Chinese site, google.cn, Drummond, said on a company blog. including its Gmail email service re- data he displayed in Beirut. Ms. Mikhael A door would open eventually for the and a personal computer, the prosecutor AND AMIR EFRATI search giant’s toehold in the country now requires visitors to click to be “What’s interesting is that the main popular, analysts said. simply designed and registered the Palorva French. One of the Beirut bank branches said. with the most Internet users. But it redirected to the Hong Kong site for Chinese government would make And while Google doesn’t censor website, her lawyer said. Ms. Mikhael that Mr. Falciani and Ms. Mikhael visited “Before deciding whether to hand all this governments about it. Chinese authorities said they re- won’t end the uncertainty around Web searches. Recently, the com- this decision after a private com- its Hong Kong site, the government thought she was working on an indepen- posted an alert of suspicious activities on a to the Swiss, we had to look inside,” Mr. de newed a license needed by Google Google in China because Beijing can pany has made several services ac- pany challenged its censorship pol- takes measures to limit access to dent project during the trip to Lebanon, the website managed by the Swiss Bankers As- Montgolfier said. But he and Ms. Inc. to continue using its Chinese revoke the license at any time or icy before the eyes of the Chinese certain content on the Internet. lawyer said. sociation. The notice said someone had With Mr. Falciani’s help, French authori- Web address, despite months of ten- block access to Google’s services. people,” said Xiao Qiang, a journal- Other Google services, such as video After a week in Lebanon, Mr. Falciani and been trying to sell “data on clients of vari- ties found thousands of accounts and bank- Mikhael both deny sions over censorship requirements. “Our operations in China are The move won’t end ism professor at the University of site YouTube, have long been Ms. Mikhael returned to Geneva. In March ous Swiss banks.” transfer details. Stripping out names that The Ministry of Industry and In- completely at the discretion of the California-Berkeley. “This is the be- blocked by China. 2008, they appeared to shift direction, Swiss Federal Police, who monitor the appeared twice or couldn’t be read, the files formation Technology approved the Chinese government. I don’t want uncertainty around Google ginning” of what will be a protracted Separately, Australia’s privacy sending anonymous emails to European site, opened a probe and soon homed in on contain data on about 79,000 clients and breaking any laws. The renewal application by the operator anyone to be confused about that,” in China since the license struggle between Google and China,” regulator Friday said Google had vi- governments, according to people familiar Ms. Mikhael, who had traveled to Lebanon 20,000 companies, according to the Nice of Google’s China website, Beijing Google Chief Executive Eric Schmidt said Mr. Xiao, who previously ran a olated a national privacy law but with the Swiss probe. using her real identity. prosecutor. The list includes more than emails sent regarding Guxiang Information Technology said at a news conference Thursday. can be revoked at any time. human-rights group. the government couldn’t impose a A message sent to Germany’s secret ser- On the morning of Dec. 22, 2008, soon 8,000 French, about 1,500 Americans and as Co., after the company pledged to Google in March began redirect- It is unclear whether Google, sanction. Law-enforcement bodies vice, Bundesnachrichtendienst, was signed after she told HSBC she planned to end her many British residents, according to Mr. de “abide by Chinese law,” and “ensure ing queries from mainland China to which handled 31% of searches in across the world have been investi- by Ruben Al-Chidiack and claimed access to contract with the bank and return to Leba- Montgolfier. He promptly shared the trove the data didn’t ask for the company provides no law-break- a version of its search engine it cessible from google.cn itself, in- China in the first quarter according gating Google’s disclosure that its a list of 127,311 customers, with “all the cli- non, Swiss police took her into custody for with France’s tax authority. ing content,” according to a report doesn’t censor hosted in Hong Kong. cluding its music-search and to Analysys International, will lose Street View vehicles had inadvert- ents’ details of the HSBC Private Bank SA.” questioning. Ms. Mikhael instantly un- François Baroin, who became France’s money. He says his goal by China’s state-run Xinhua news But Google stopped the automatic translation services. Web traffic or advertisers. ently collected personal data from Mr. Falciani said he approached “several” masked Mr. Falciani as the mysterious Mr. budget minister in March, said recently that agency on Sunday. The report said redirect two weeks ago after the “We look forward to continuing Google has lost some search unprotected wireless networks. foreign services as part of his attempt to Al-Chidiack, her lawyer said. inquiries launched on the basis of HSBC wasn’t to profit from Guxiang also “accepted that all con- Chinese government indicated it to provide Web search and local share in China to rivals such as —Kersten Zhang expose security weaknesses in bank com- Later that day, Swiss police handcuffed data had allowed his ministry to recoup €1 tent it provides is subject to supervi- wouldn’t renew its license if the products to our users in China,” Baidu.com Inc. during its standoff and Jessica E. Vascellaro puter systems. He said he also instructed Mr. Falciani at his HSBC office, seized his billion in unpaid taxes and penalties. sion of government regulators.” company continued the practice. Google’s chief legal officer, David with Beijing, though other services contributed to this article. Ms. Mikhael to contact Germany and the work computer and searched his Geneva HSBC disputes the number of clients the data, but rather to U.K. home. outed by the French. It says the data are for Through her lawyer, Ms. Mikhael denies In a bedside cupboard, they found pieces 24,000 past and current clients. HSBC cur- expose secrecy in sending messages to foreign governments, of paper with the addresses of police con- rently counts about 100,000 private-banking INDEX TO BUSINESSES claiming Mr. Falciani often used her com- tacts in France and Germany, according to clients world-wide. puter. U.K. authorities said they found no people familiar with the Swiss probe. Mr. de Montgolfier, who keeps Mr. Fal- banking practices. Businesses Alstom...... 18 Birinyi Associates...... 21 CME Group...... 26 Ford Motor...... 23,31 Michelin...... 23 Sony...... 26 record of having received emails about After being interrogated for hours, Mr. ciani’s computers in a safe, said he wasn’t This index of businesses mentioned in American Electric Power Blom Bank...... 15 Covidien...... 36 Gazprom...... 36 Microsoft...... 27 Standard Chartered...... 26 HSBC data. German authorities declined to Falciani was released on the condition that interested in tracing the origin of the data. today’s issue of The Wall Street Journal ...... 18 BMW...... 23 Credit Suisse Group...... 24 Google...... 22,31 Morgan Stanley...... 18 Standard Life Investments comment. he return the next day for further question- “What matters to me is whether the data is intended to include all significant AOL...... 22 BNP Paribas...... 15 Daimler...... 23 Google.org...... 18 Nike...... 31 24 But France engaged Mr. Falciani. In 2008, ing. Instead, he rented a car and drove to are genuine and reliable,” he said. “So far, I BP...... 1,6,36 Groupon...... 22 Statoil...... 18 reference to companies. First reference Apache...... 1,6 Darden Restaurants...... 17 Nissan Motor...... 23 Mr. Falciani says he met several times with France, according to Mr. Falciani and people have no doubt that they are both.” Brevan Howard Asset Hewlett-Packard...... 21 UBS...... 14,24 to the companies appears in bold face Apple...... 21,25 Deloitte...... 4 Novatek...... 36 French officials, including with a psycholo- familiar with the Swiss probe. Management...... 24 HSBC Holdings...... 14,26 Unigestion Holding...... 10 type in all articles except those Deutsche Bank...... 24 NYSE Euronext...... 26 Audi Bank...... 15 BrightSource Energy...... 18 Hyundai Motor...... 23 VantagePoint Venture gist who probed his personality. He says he Once in southern France, he said, he im- WSJ.com on page one and the editorial pages. Baidu.com...... 22 Byblos Bank...... 15 Digital Power Capital...... 18 Intel...... 26 PepsiCo...... 31 Partners...... 18 provided documents to help establish that mediately began downloading the HSBC Barclays...... 24 Chevron Technology EV3...... 36 International Battery...... 18 Quantcast...... 22 Wexford Capital...... 18 he was a “credible source.” data he had stored on remote servers and ONLINE TODAY: Watch an interview with Beijing Guxiang Ventures...... 18 Exxon Mobil...... 36 Logitech...... 26 REM Engineering...... 19 XTO Energy...... 36 After checking Mr. Falciani’s background, saved them on a computer. Nice prosecutor Thierry de Montgolfier at Information Technology China Unicom (Hong Kong) Facebook...... 31 London Stock Exchange Renault...... 23 Yahoo...... 22,31 French officials say the police referred him “I needed to prepare my defense,” he WSJ.com/World Co...... 22 25 Fibrowatt...... 19 ...... 24 Saint-Gobain...... 23 Yum Brands...... 17 to the Direction Nationale d’Enquêtes Fis- said. He says he told Swiss authorities that Pound/Euro 0.8362 g 0.02% Yen/$ ¥88.47 g 0.12% Global Dow 1794.46 À 0.89% Gold 1209.60 À 1.15% Oil 76.09 À 0.86% 3-month Libor 0.52681 10-year Treasury g 10/32 yield 3.056% Environment Anshu Jain ranks first among Gazprom looks good Europe’s most influential bankers for a short-term romance the journal report BUSINESS & FINANCE 24 HEARD ON THE STREET 36 EUROPE BUSINESS& FINANCE. Cap and No More Trade Monday, July 12, 2010 THE WALL STREET JOURNAL. europe.WSJ.com Market-based environmental programs can work well. Greek test: But as the U.S. acid-rain market shows, they need clear rules set by the government. Single sale Herd instinct takes over BY MARK PETERS proach. So, the industry for the most part threw its support behind BY E.S. BROWNING stocks must move in the same direc- fter more than a decade the rule changes. of T-bills Stocks in sync S&P 500 members’ correlation with the market tion as the index. Some stocks al- of slashing air pollution Promising Start Stocks are trading in lock-step most always move in a different di- from power plants, the more than at any time since the Stocks in the S&P 500 80% rection than the index. The the original U.S. cap-and- Prices of sulfur-dioxide allow- 1987 crash, and the trend has some have been tracking the average of their moves, usually trade market has ground ances more than doubled soon after is Tuesday analysts concerned. index to the highest 70 weighted for each stock’s total mar- toA a halt. The final blow likely was the changes were announced, hitting In recent weeks, stocks in the degree since the 1987 ket value, equals the index’s return. delivered by new federal pollution $1,600 a ton in late 2005. State pro- BY EMESE BARTHA Standard & Poor’s 500-stock index crash, according to a 60 Earlier this year, when stocks rules announced last week. grams to control pollution and other have shown an increasing tendency measure of correlation were on the mend and investors The acid-rain market has been in factors such as growing electricity Greece will auction its first Trea- to move in the same direction at the that calculates the 50 were less anxious, the correlation percentage of stocks a state of disarray for the past two demand also helped to drive emis- sury bills Tuesday since accepting a same time. Last week, those stocks’ 50-day moving average between the S&P 500 and its stocks years as utilities, states and inves- sion-allowance prices up. At the bailout in May, marking a test of tendency to move in the same direc- moving in the same 40 fell below 50%, suggesting that in- tors waited for the Environmental same time, the utilities increased in- whether international investors are tion as the index hit direction as the index. 2008 '09 '10 vestors were looking for individual Protection Agency to issue new vestment in pollution controls to willing to buy its debt. ABREAST OF an extreme not seen stocks to own rather than just buy- Since the S&P 500’s April 23 peak, all the index’s sectors have been down, rules. prepare for the start of the new But in a sign that the govern- THE MARKET since October 1987, ing large indexes. as have both dividend-paying and non-dividend-paying stocks. Treasury Now those rules are out, and they rules in 2009 and 2010. ment isn’t willing to pay any price according to re- But by mid-June, the correlation bonds have been up. set strict new limits on emissions. But in 2008, in response to law- for funds, it is auctioning only 26- search by investment group Birinyi had jumped back above 70%, as in- But they also reduce utilities’ ability suits filed by a handful of utilities week bills, rather than both 26- and Associates in Westport, Conn. 10-year to 20-year Treasury bonds 7.8% vestors stopped looking for winners to trade allowances to meet those and North Carolina, the U.S. Court 52-week bills. The market’s flock-like behavior –11.0% S&P 500 and just sold broadly. Last week it tighter standards. As a result, the of Appeals for the District of Colum- Greece doesn’t need the cash to is one more reflection of the grow- surpassed its 2008 high of 79% and –11.3 S&P 500 dividend paying value of the allowances already on bia Circuit ruled that the EPA had pay its bills, given the €110 billion ing influence of investors using hit 81%, the highest level since the the market are expected to fall to overstepped its authority in expand- ($139 billion) support package it is broad-based strategies to buy and –11.5 S&P 500 non-dividend paying 1987 crash, when it touched 83% for zero, causing a complete collapse of ing the markets and that parts of receiving from the International sell large blocks of stocks. Instead of one day. That means that on most Telecommunications trading. the new rules were in conflict with Monetary Fund and European picking individual stocks to hold –1.3 days recently, the great majority of Hopes are few that the market existing Clean Air Act regulations. Union. But the government has said over a period of time, they trade in –1.6 Utilties stocks in the S&P 500 were moving will recover. And that holds a warn- The court allowed the expansion of it wants to maintain a presence in and out of the market using broad –4.5 Consumer staples in the same direction, up or down. ing for policy makers hoping to es- the market to take place, but it or- the market and to establish a bench- indexes. Often, these investors use –6.9 Health care Correlation typically goes up tablish a similar market-based ap- dered the EPA to rewrite its rules to mark for instruments. exchange-traded funds, which trade during volatile periods, reflecting –12.4 Technology proach to curb emissions of carbon, comply with existing law. Prices of The auction comes at a time as easily as a single stock but con- investors’ tendency to dump stocks which scientists have linked to glo- allowances fell in response, and when other Greek short-term bills tain many different stocks that may –12.5 Materials wholesale rather than try to pick –13.4 Financials bal warming. Though they’ve Getty Images trading dwindled. yield as much as 7.3% and foreign belong to the S&P 500, the Nasdaq out stocks that once were viewed as worked well for years, market-based Effects of acid rain in Great Smoky Mountains National Park With the release of those revi- investors are avoiding the market. 100 or another index. –13.7 Industrials refuges, such as those that pay divi- approaches to reducing air pollution sions last week, curbing trading and The country’s Public Debt Man- Heavy trading in exchange- –14.4 Energy dends. are extremely vulnerable to govern- enacting strict new state caps, the agement Agency said Friday that it traded funds means that more Many money managers have –14.7 Consumer discretionary ment actions. And just like in mar- Cap and Fade acid-rain market isn’t likely to re- will auction €1.25 billion ($1.59 bil- stocks are likely to move in the been moving to entirely different kets in general, investors—and utili- cover. Requiring utilities to take lion) of 26-week T-bills. same direction on any given day. Note: Data shows total return for all groups except dividend-paying stocks, for which only price return was asset classes, such as bonds or cash, The once-robust market in sulfur-dioxide allowances, a key part of the effort to curtail acid rain, has taken a tumble. available. Adding in dividends might have narrowed that group's decline by about 0.5%. ties in this case—hate uncertainty. Spot prices over the past five years: new steps to cut sulfur-dioxide The amount could reach €2 bil- Analysts call that correlation, a says Jack Ablin, chief investment of- The cap-and-trade approach was emissions will cause an already lion because it can raise the amount mathematical term meaning similar- Source: Birinyi Associates ficer at Harris Private Bank, which first used to curb pollutants causing $1,800 large surplus of allowances to bal- by 30% of noncompetitive bids both ity of behavior. Correlation is on the oversees $57 billion in Chicago. acid rain. European carbon markets loon further. Using those allowances on the auction day and again two rise, to the frustration of investors mutual-fund managers to distin- degree to which one stock tracks the Early last month, his firm shifted followed, modeled in part on the 1,600 from the acid-rain market to meet days later. who are trying to analyze stocks guish themselves by doing individ- movement of the index. A correla- hundreds of millions of dollars out acid-rain market’s early success. But 1,400 the limits won’t be allowed under The debt agency didn’t proceed based on their underlying strengths ual stock picks. They might get the tion of 50% means that half the in- of stocks and other risky assets, a federal court in 2008 rejected a the new rules. with plans to auction 52-week T- and weaknesses. product right and the earnings dex’s component stocks are moving such as commodities, and into Trea- complex 2005 plan by the EPA to 1,200 “It really feels like prices are go- bills, as it normally does, because of “It is an indexing market and not right, but the market goes down and in the same direction as the index. A sury bonds and high-grade corpo- expand U.S. environmental markets. ing to zero quickly,” says Peter Za- the high costs of funding a one-year a market for stocks. On good days the stock is going to go down as perfect correlation would be 100%, rate bonds. In response, prices for the pollution 1,000 borowsky, a managing director of issue. One-year Greek T-bills cur- everything goes up and on bad days well.” with all stocks tracking the index. In a typical customer account allowances that drive emission re- Evolution Markets Inc., a White rently carry a yield of between 6.0% everything goes down. Everyone Every day, Birinyi measures the The average correlation since 1980 that might normally have 55% of its ductions plunged. Utilities held off 800 Plains, N.Y.-based provider of envi- and 6.5% in the market, well above talks about baskets or sectors,” says 50-day average correlation between has been 44%. This particular meth- money in risky assets such as stocks on projects to clean up their plants. ronmental brokerage services for what it would pay the EU and IMF. Jeffrey Yale Rubin, research director the direction of the S&P 500 and odology doesn’t allow for a negative and 45% in bonds, Mr. Ablin has 600 Limiting Trading utilities and investors. Under those terms, Greece can at Birinyi Associates. “It is harder that of its member stocks. In this correlation or a correlation of zero, flipped the ratio. Stocks have gone 400 U.S. Sen. Thomas Carper, a Demo- borrow at a floating rate that is cur- for individual investors and even for case, correlation is a measure of the since at least some component Please turn to page 27 Now, the rules just issued will re- crat from Delaware, has proposed rently around 4% for 12 months, strict trading by utilities further. 200 new legislation that would use the said a person familiar with the deal. The changes aren’t a signal that the existing markets to achieve similar “Why should we pay up?” the EPA has soured on market-based 0 reductions, but the bill faces a Con- person said. “There is no point in programs to combat pollution, ac- 2005 '06 '07 '08 '09 '10 gress focused on broader energy paying out 12-month market rates if Apple opens its second store in China cording to an agency official. But Source: Evolution Markets Inc. legislation. we have already secured that dura- because of the court ruling, the new Keeping Faith tion.” regulations will require utilities in The government is betting that it BY LORETTA CHAO China is the world’s largest upwind states to cut their pollution decades. “It is something that technology, they could capture new tem in more than two dozen, mostly Utilities and environmental will pay substantially less for six- handset market and second largest outright in order to ensure that worked so well.” revenue by selling any leftover al- Eastern, states. groups generally haven’t lost faith month funds than for 12-month BEIJING—Hundreds of people personal-computer market after the downwind states meet federal air- The U.S. acid-rain trading pro- lowances or avoiding the cost of The new EPA orders, known as in a market-based approach to the funds. Buyers are likely to be prima- lined up Saturday to be among the U.S. But while other PC makers such quality standards. Limited trading gram is often cited as the first, buying new ones. That’s the trade in the Clean Air Interstate Rule, sought problem of air pollution. rily Greek banks, and strong de- first to enter Apple Inc.’s newest as Hewlett-Packard Co. have will be allowed by utilities to com- large-scale effort by a country to cap and trade. to achieve bigger cuts in part by John Walke, clean air director at mand, as at recent sales, could push store in China. rushed to expand retail channels in ply as well, but the new rules are far combine environmental goals with a slashing the future value of allow- the Natural Resources Defense down yields. The 1,500-square-meter under- China in recent years, Apple has more restrictive than they were in market system. Starting in 1995, the Drop in Emissions ances handed out to utilities. Under Council, says that the 2008 appeals At the previous auction in April, ground space in Shanghai, China’s moved ploddingly. the Bush administration plan. U.S. government put a limit on sul- An EPA study shows sulfur-diox- the new rules, starting in 2010 utili- court decision remained silent on 26-week T-bills were sold to yield wealthiest city, marks the start of a It opened the Beijing store two Under the new rules, only a slice fur-dioxide emissions—essentially ide emissions in 2008 were 52% be- ties would have to use two allow- the larger question of the effective- 4.55%, well below the peak of 10% major retail expansion in a country years ago and otherwise relies on a of required emission reductions can the cap in cap and trade. That limit low 1990 levels. Similar reductions ances instead of one to emit a ton of ness of environmental markets, and yield in the market at the peak of where the company so far has had a network of authorized resellers for come from buying allowances, with affects mostly coal-fired power came from a regional program the pollutants. that the new EPA rules shouldn’t be Greece’s financial woes around the relatively meager presence. distribution. the rest coming from changes at the plants. agency later started to cut emis- This was basically an attempt by viewed as an abandonment of cap- same time. Friday, yields on those Apple—which has one other Chi- Apple has been slower than ri- plants themselves. And millions of Then officials created a market sions of nitrogen oxide, a major con- the Bush administration to tighten and-trade. “The acid-rain market bills diverged widely depending on nese store, in Beijing—has said it vals to expand overseas, even as it allowances that utilities now hold by handing out a set number of tributor to smog. the cap on pollutants—by cutting continues to be relevant to the de- whether they were trading in Ath- plans to open 25 stores in China by has grown rapidly at home and is can’t be used under the new pro- emission allowances to utilities. But in 2005 the EPA, with the the supply of allowances—without bate over CO2 because it is a suc- ens or elsewhere in Europe. the end of next year, including a now the world’s biggest technology gram, which will issue its own al- Plants surrendered one allowance backing of many utilities and envi- having to write new legislation. cessful model,” he says. Those bills traded to yield be- second store in Shanghai. company by market value. lowances. for each ton of sulfur dioxide they ronmental groups, announced Democrats in Congress were push- tween 3.90% and 4.30% in Athens, Apple’s flagship stores, which Research firm IDC said Apple “It is tragic,” says Gary Hart, an emitted into the atmosphere. If util- changes that sought major new re- ing for much tighter caps. The utili- Mr. Peters is a reporter for compared to between 3.60% and like the Shanghai outlet often sport PCs made up less than 1% of total analyst at ICAP Energy LLC based in ities cut emissions by switching to ductions in smog-forming and soot- ties knew they were going have to Dow Jones Newswires in New York. 7.80% elsewhere in Europe. eye-catching architecture, are a key PCs shipped in China as of the first

Birmingham, Ala., who has worked low-sulfur coals, increasing effi- producing emissions, and expanded accept something, and they ap- He can be reached at —Alkman Granitsas part of the Cupertino, Calif., com- quarter. In the U.S., Apple claimed Associated Press/Xinhua on environmental markets for two ciency or adding emission-control the reach of the cap-and-trade sys- proved of the market-based ap- [email protected]. contributed to this article. pany’s branding strategy. Please turn to page 25 Hundreds of shoppers waited to enter Apple’s store in Shanghai on Saturday. 20 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. * 17 MARKETS LINEUP THE JOURNAL REPORT: ENVIRONMENT Moving the European indexes… markets FTSE 100 DAX CAC-40 FTSE MIB Man vs. Fish At right, Europe’s benchmark stock indexes U.K. 5132.94 Germany 6065.24 France 3554.48 Italy 20478.98 and stocks Friday. Below each index are its most actively traded stocks. The charts show s 0.54% or 27.49 s 0.49% or 29.58 s 0.46% or 16.23 s 1.16% or 235.25 the percentage change in each index’s or As the appetite for seafood soars, stock’s value, rather than the point change, for The index surged 6.1% for the week, its best Lufthansa jumped 1.2% after well-received This market surged 6.2% for the week, aided Banks drove the gain on Friday as the index purposes of comparison. The index level or weekly showing in a year. Even so, the passenger data for June. Infineon increased by relief over Europe’s pending bank stress continued to benefit from rising confidence restaurant companies are pressed to stock price is indicated on each axis. All benchmark is down 5.2% for 2010. Antofa- 1.5% after reports said it is close to selling tests and stronger-than-expected domestic ahead of the results of stress tests on EU gasta led blue-chip gainers on Friday. its mobile-phone chip unit to Intel. industrial output for May, reported Friday. banks. UniCredit jumped 3.2%. indexes and stocks are shown in local currency promote sustainable solutions terms. 7500 8250 6000 36000 BY PAUL ZIOBRO Fish sandwich until the late 1980s. 6250 6875 5000 30000 Newfoundland cod fishing grounds he world’s rising appetite became so overfished that the fish- 5000 5500 4000 24000 for seafood is on a colli- ery shut down in the early 1990s. sion course with its Fish suppliers and harvesters “de- shrinking wild fisheries, stroyed the whole fishing area,” 3750 4125 3000 18000 leaving restaurant com- says Gary Johnson, senior director paniesT and other big buyers caught of McDonald’s global supply chain. in the middle. McDonald’s now uses five different 2500 2750 2000 12000 Amid reports suggesting that the whitefish species in the sandwich. J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J world’s oceans are being emptied of McDonald’s, which buys 50,000 WSJ.com 2009 2010 2009 2010 2009 2010 2009 2010 fish, companies such as McDonald’s metric tons of whitefish a year, now Corp., Long John Silver’s owner judges fisheries on three factors: Follow the markets throughout the day, Volume Close Change Volume Close Change Volume Close Change Volume Close Change Yum Brands Inc. and Red Lobster how closely they are monitored to Stock in millions In pence Net % Stock in millions In euro Net % Stock in millions In euro Net % Stock in millions In euro Net % with updated stock quotes, news and parent Darden Restaurants Inc. ensure that, for example, fishing Lloyds Banking 151.88 61.71 1.01 1.66 InfineonTch 14.17 5.08 0.08 1.52 Alcatel Lucent 12.69 2.140 –0.012 –0.56 UniCredit 394.28 2.05 0.06 3.17 commentary at WSJ.com. have embraced a growing movement boats don’t cheat on their quotas; RoyalBnkofScot 72.46 44.25 –0.11 –0.25 DeutscheTel 14.12 9.97 0.00 0.02 CreditAgricole 8.45 9.264 –0.106 –1.13 IntesaSanpaolo 91.03 2.43 0.03 1.38 Also, receive emails that summarize toward more eco-friendly seafood- whether enough fish are left to al- VodafoneGp 67.07 143.50 0.20 0.14 Commerzbank 7.83 6.29 0.00 0.06 FrTelecom 8.21 14.945 –0.080 –0.53 TelecomItalia 46.56 0.95 0.01 1.06 the day’s trading in Europe and Asia. buying practices. They are working low the stock to rebound each sea- BP 50.04 364.80 –2.20 –0.60 E.ON 5.64 22.74 -0.11 –0.46 ArcelorMittal 6.89 23.660 0.555 2.40 Pirelli&C 33.65 0.48 0.00 0.63 To sign up, go to WSJ.com/Email. with scientists and groups like the son; and the toll taken on the envi- Barclays 48.35 300.45 –1.55 –0.51 DeutscheBk 3.92 49.25 0.24 0.48 AXA 6.15 13.290 –0.050 –0.37 Enel 31.42 3.66 0.02 0.55 independent, nonprofit Marine ronment from the fishing methods Stewardship Council to ensure the being used. McDonald’s says the fish they buy is “sustainable,” mean- vast majority of its fish now comes

ing it is caught in a way that doesn’t from sources that meet sustainabil- Getty Images European stocks in the news damage the ability of the species to ity guidelines, such as those given A haddock caught in the North Atlantic reproduce. by the Marine Stewardship Council. “We know if we go raping and In 2007, McDonald’s stopped us- buyers have become more mindful peace’s ocean-campaigns director. “The state of global fisheries is Bureau Veritas UniCredit Straumann Hldg Antofagasta Transocean Ltd. pillaging it today, there’s nothing ing Eastern Baltic cod because it of the environmental impacts of He encourages the large chains to such,” Mr. Hocevar says, that the big left for tomorrow,” says Ken Conrad, was skeptical that the number of their purchases, some are still look- invest in new methods of aquacul- chains “don’t have a sustainable France €47.40 Italy €2.05 Switzerland CHF231.10 United Kingdom 886.00 pence Switzerland CHF54.70 the second-generation owner of the fish being caught were being re- ing too narrowly at sustainability. ture that don’t upset the environ- source. They’ve just found a less s 3.0% or €1.40 s 3.2% or €0.06 s 3.7% or CHF8.30 s 4.1% or 34.50 pence s 5.3% or CHF2.75 corded correctly. This year, after For instance, large-scale harvest- ment. bad source.” suppliers improved their reporting ing of the Alaskan pollock, one of McDonald’s say it buys only Alas- Credit Suisse raised the stock to 'neutral' from Shares surged 14% in four sessions as The firm’s CFO, Wolf-Ruediger Daetz, Citigroup talked up the copper miner’s stock. A U.S. court again rejected a ban on deep- On the Menu standards, McDonald’s once again the fish McDonald’s uses, affects the kan pollock that comes from sources Mr. Ziobro is a reporter with Dow Jones 'underperform.' Europe's pending stress tests reassured announced that he would depart in the fall. water drilling. Average annual world seafood began buying Eastern Baltic cod, un- food supply of Steller sea lions and certified by third parties as sustain- Newswires in New York. He can be investors. consumption per capita derscoring how large buyers can fur seals, says John Hocevar, Green- able. reached at [email protected]. force change. 40 pounds 37.6 36.1 Not all of the large chains can In euro 70 In euro 3.00 In franc 450 In pence 1500 In franc 150 35 31.7 easily force change. Darden, which 56 2.40 360 1200 120 30 27.5 buys 100 million pounds (45.4 mil- 25.3 42 1.80 270 900 90 25 lion kilos) of seafood annually, de- 20 cided shortly after it bought the Capital Grille chain in 2007 to take 15 28 1.20 180 600 60 Chilean sea bass off its new chain’s 10 menu because it couldn’t find a suit- 5 ably sustainable source from which 0 to buy it. 14 0.60 90 300 30 ’70s ’80s ’90s ’05 ’08* “We swallowed hard about taking J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J A M J it off, but we’re such a small player *Preliminary figure 2009 2010 2009 2010 2009 2010 2009 2010 2010 that we would not be able to have Source: United Nations Food and Agriculture Organization an influence,” says Bill Herzig, se- Price-to-earnings ratio 20 Price-to-earnings ratio 21 Price-to-earnings ratio 25 Price-to-earnings ratio 21 Price-to-earnings ratio 6 nior vice president of purchasing Earnings per share, past four quarters 2.34 Earnings per share, past four quarters 0.10 Earnings per share, past four quarters 9.38 Earnings per share, past four quarters 41.91 Earnings per share, past four quarters 9.50 and supply-chain innovation. Dividend yield 1.77% Dividend yield 1.46% Dividend yield 1.62% Dividend yield 0.71% Dividend yield None chain of 10 Libby Hill seafood res- Farming the Oceans PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE taurants in North Carolina and Vir- Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wks ginia and chairman of the National Some species, such as haddock Indus Gds & Svcs 0.2% 5.4% 38.8% Banks 0.3% 9.6% 9.4% Health Care 0.3% 2.8% 13.3% Basic Resources 1.2% 6.5% 37.9% Oil & Gas ... 6.5% -1.9% Fisheries Institute, a seafood-indus- and Atlantic sea scallops, have re- Bureau Veritas 3.0% 7.0% 45.2% UniCredit 3.2% 12.5% 30.7% Straumann Hldg 3.7% 3.0% 24.4% Antofagasta 4.1% 14.0% 50.7% Transocean Ltd. 5.3% 6.0% 81.4% try trade group. covered from previous declines, af- Experts say their efforts are com- ter the U.S. government began en- A.P. Moller-Maersk B Sulzer British Land Banco Espirito Santo Gemalto ing none too soon. forcing certain aspects of the A recent United Nations study federal fisheries conservation act in Denmark DKK52,040.00 Switzerland CHF106.40 United Kingdom 447.50 pence Portugal €3.55 France €29.81 predicts that unless something the mid-1990s, says Ray Hilborn, a t 1.8% or DKK960.00 t 1.9% or CHF2.10 t 2.0% or 9.10 pence t 3.5% or €0.13 t 5.7% or €1.79 changes, nearly all commercial fish- professor of aquatic and fishery sci- eries will collapse by mid-century, ences at the University of Washing- A seven-day winning streak came to an end. Even with the loss,the equipment firm is still Friday’s drop snapped five days of gains. Shaers pulled back after a three-day, 13% The security firm’s stock closed at its lowest meaning they will be producing less ton. up 5.55% on the week. jump. level since May 28. than 10% of their onetime potential. Still, wild fisheries clearly won’t Already, almost 30% of fish stocks be able to meet the world’s seafood fall into that category. demands, so aquaculture—or raising In euro 40 In krone 75000 In franc 150 In pence 1000 In euro 10 Disappearing Cod seafood in enclosed, controlled envi- 32 ronments—is being counted on to 60000 120 800 8 Production by wild fisheries has make up the shortfall. 24 45000 90 600 6 remained fairly steady over the past But aquaculture poses its own set decade, totaling about 90 million of challenges. Farm-raised seafood 16 metric tons annually, says the is exposed to more pesticides and 30000 60 400 4 United Nations’ Food and Agricul- antibiotics in captivity, and some ture Organization. But annual sea- fish, like salmon, are given dye addi- food demand is expected to rise to tives to give their flesh an orange at least 150 million metric tons by hue. Most farm-raised fish are also 8 15000 30 200 2 2030, creating a shortfall that will given feed that comes from the sea, J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J 2009 2010 need to be filled. depleting the wild supply. 2009 2010 2009 2010 2009 2010 2009 2010 Population growth and the pub- Darden works with the nonprofit lic’s heartier appetite for seafood Global Aquaculture Alliance on glo- Price-to-earnings ratio None Price-to-earnings ratio 13 Price-to-earnings ratio 3 Price-to-earnings ratio 7 Price-to-earnings ratio 21 are only part of the problem. Mis- bal standards on sustainable aqua- Earnings per share, past four quarters -1677.00 Earnings per share, past four quarters 7.99 Earnings per share, past four quarters 132.00 Earnings per share, past four quarters 0.52 Earnings per share, past four quarters 1.39 management, a lack of government culture. Darden also is pioneering Dividend yield 0.62% Dividend yield 2.63% Dividend yield 5.81% Dividend yield 3.94% Dividend yield 0.84% enforcement of fishing quotas, and new practices, including incorporat- PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE illegal fishing also have hurt some ing more grains into the diets of Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wks wild fisheries. captive fish to reduce the reliance Indus Gds & Svcs 0.2% 5.4% 38.8% Indus Gds & Svcs 0.2% 5.4% 38.8% Financial Services 0.03% 5.0% 9.4% Banks 0.3% 9.6% 9.4% Indus Gds & Svcs 0.2% 5.4% 38.8% One glaring need for reform came on seafood-based feed. A.P. Moller-Maersk B -1.8% 7.1% 80.1% Sulzer -1.9% 5.5% 70.8% British Land -2.0% 2.6% 23.1% Banco Espirito Santo -3.5% 8.2% -11.4% Gemalto -5.7% -2.7% 24.2% from North Atlantic cod, the only Greenpeace says that while res- fish McDonald’s used in its Filet-o- taurants and other large seafood 18 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 19 THE JOURNAL REPORT: ENVIRONMENT THE JOURNAL REPORT: ENVIRONMENT Where Does the Water Go? POWER PLAYS Sun and Battery Power Looking to Litter In most American cities, it runs off into nearby lakes, rivers Energy company sees a future in chicken manure and streams. And that’s a problem. News on alternative-energy deals from Dow Jones VentureWire BY ANN CARRNS oultry farms in the U.S. Abundant Resource New Sources for BrightSource generate roughly 17 mil- Chicken and manure production in the 10 leading BrightSource Energy Inc. raised $150 million in a Series lion tons of chicken ma- chicken-farming states in 2009 Litter nure annually, creating a (in millions D round of capital as it prepares to start construction of a huge disposal problem. Chickens (in millions) of tons) large-scale solar plant in California later this year. SomeP energy researchers believe The company, based in Oakland, Calif., is working to- they have a solution: use that ma- Georgia 1,322 2.6 ward receiving $1.37 billion in loan guarantees from the nure to create electricity. Many farmers use chicken lit- Arkansas 1,051 2.1 U.S. government. The Department of Energy made a con- ter—a mixture of manure and bed- ditional commitment to ding—as a fertilizer, either spread- Alabama 1,002 2.0 provide the money to sup- ing it on their own croplands or port the construction of selling it to other growers. But the Mississippi 793 1.6 litter increasingly is being blamed BrightSource’s 400-mega- for phosphorus-laden runoff that North Carolina 760 1.5 watt solar project in Cali- chokes waterways in heavy poultry- fornia. producing areas, and environmental- Texas 669 1.3 To qualify for the federal ists are pushing the federal govern- ment to set limits on its use. Kentucky 307 0.6 money, BrightSource has to Fibrowatt LLC, a unit of pri- secure additional funds vately held Homeland Renewable Maryland 292 0.6 from its investors. The Energy, based in Langhorne, Pa., company won’t disclose says it has an answer. The company Virginia 241 0.5

Carl Wiens wants to erect litter-fueled power how much equity it needs plants in big poultry-producing South Carolina 238 0.5

Bureau of Environmental Services, Portland, Oregon to receive the Department of Energy loan guarantees, states such as Georgia, Arkansas Rainwater flows into a sidewalk planter from a street in Portland, Ore. which can be used to finance up to 70% of the project. and North Carolina. Note: Chicken figures are for production of broiler, or meat, chickens. Litter figures are Fibrowatt is an offshoot of the estimates based on an average of 4 pounds of litter per bird annually. Litter comprises bird BrightSource’s technology involves concentrating sun- manure plus feathers and bedding such as rice hulls or sawdust swept out with it. company that developed the first light via mirrors on a tower where liquid is heated and Sources: Economic Research Service and Natural Resources Conservation Service, U.S. BY WILLA PLANK bined pipe makes up about 65% of on-site as possible, the city has pro- such plants in the U.K. in the 1990s. Department of Agriculture New York’s sewer system, and al- moted green-street structures such turns into steam. The steam then powers a turbine to pro- It built the U.S.’s first poultry- merican cities are com- though the city has spent billions of as landscaped curb extensions and duce electricity. The company has a number of contracts waste-to-energy plant in 2007 in ing up with new ways to dollars on traditional storm-water vegetated roof systems. to sell power to utilities in California. Minnesota, the nation’s largest tur- deal with an old prob- controls such as temporary storage Portland requires any new devel- key-producing state. The $200 mil- Poultry litter at Fibrowatt’s plant inin Minnesota Minnesota is is burned burned to to generate generate electricity electricity lem: storm-water runoff. tanks, it still has impaired waters opment or redevelopment over 500 The Series D round included new investors Alstom SA, lion Minnesota plant burns 500,000

In the past, the solu- from runoff. square feet (46.4 square meters) to which provided $55 million, and the California State Teach- tons of turkey litter each year. The Fibrowatt tionA was pretty straightforward. Cit- Uneven enforcement of the fed- have a system in place for managing ers’ Retirement System, as well as returning investors process creates steam to turn tur- ies would build and maintain drain- eral Clean Water Act—which aims to storm water on-site, so Todd Liebow VantagePoint Venture Partners, Morgan Stanley and bines in a 55-megawatt power plant, latest analysis of average electricity- age systems that could quickly make the nation’s waters swimma- placed a green roof on his new providing electricity for about generation costs for new plants. collect storm water and transport it ble, drinkable and fishable—hasn’t 5,000-square-foot retail building in Draper Fisher Jurvetson. Previous investors Black River 40,000 homes, according to Fibro- Helping Fibrowatt’s case in North away from developed areas and into helped the situation. The Environ- the Sellwood neighborhood. Asset Management (an investment arm of Cargill Inc.), BP watt. Carolina is the fact that the state nearby rivers, lakes and streams. mental Protection Agency this sum- Mr. Liebow didn’t want to use up Alternative Energy, Chevron Technology Ventures, DBL The company says progress on its has ordered utilities to begin using But with urban runoff increasingly mer plans to send questionnaires to land space with other methods like Investors, Google.org and Statoil ASA also returned for proposed projects in other states electricity produced specifically SOURCES OF ENERGY. being blamed for dirtying American owners and developers of newly de- a drywell, or a perforated pipe that has been slow because it has to ne- from alternative sources such as waters, the search is on for solu- veloped and redeveloped sites, ask- collects and infiltrates water to the this latest round. gotiate power-purchase agreements poultry litter beginning in 2012. tions that involve filtering or soak- ing them what they are doing to ground. And the state did not allow The company has now raised more than $300 million in with utilities, work out contracts Fibrowatt isn’t the only organiza- ing up rainwater where it falls. combat runoff as it moves to for a holding tank underneath the equity. with farmers for litter and obtain tion working on technology for Thomas Ballestero, a civil-engi- strengthen storm-water regulations building. —Yuliya Chernova state permits before starting con- turning chicken manure into energy. neering professor at the University by November 2012. Mr. Liebow’s green roof includes struction. REM Engineering Inc. of Roswell, of New Hampshire, is the lead scien- In the meantime, cities like New a waterproof membrane, soil and Fibrowatt also has run into oppo- Ga., has patented gasification tech- tist at UNH Stormwater Center, York—faced with aging infrastruc- low-maintenance sedum plants. “It’s Battery Charged sition from critics, who worry that nology for burning chicken litter in which is exploring new methods for ture and pressure from environmen- a pretty spectacular garden,” Mr. International Battery Inc., which designs and builds lith- power plants fueled by poultry litter industrial settings. Last year at a dealing with urban runoff. He says talists—are taking steps to reduce Liebow says, adding that birds and ium-ion batteries for hybrid vehicles and large energy-stor- will emit high levels of pollutants chicken-feed mill in Fairmount, Ga., many developers and regulators the amount of storm water that bees frequent the roof, which was such as nitrogen oxide, carbon mon- a test system burned some 15 tons aren’t familiar with new technolo- needs to be drained. completed in January. Portland pro- age systems, raised $35 million in Series C funding as it oxide and particulates, even with of raw litter a day, creating gas that gies aimed at soaking up rainwater. New York, for example, is trans- vides incentives for green roofs—$5 ramps up production for state-of-the-art pollution-control de- heated a boiler to produce steam “People may not be up to speed,” forming certain paved areas of the per square foot—so the cost of Mr. potential customers like vices. used in making feed pellets. A full- Mr. Ballestero says. “There is folk- city into vegetative street spaces Liebow’s roof was cut almost in half, the U.S. military and power “It’s a dirty form of fuel,” says size unit would burn at least 75 tons lore that [these technologies] are ei- filled with trees, shrubs and ground to about $26,000. Louis Zeller, science director of the daily. The ash residue, says engineer ther too expensive or they are im- cover that can absorb water. The San Francisco, meanwhile, re- companies. Blue Ridge Environmental Defense Doug Latulippe, can be used to possible challenges.” goal of the Greenstreets program, a cently passed its own rainwater- The round was led by League, which in May helped scuttle make fertilizer that contains phos- Among the innovations his group joint effort of the city’s parks-and- runoff regulations. On April previous investor Digital a Fibrowatt project proposed for phorus that isn’t water soluble, is investigating is permeable pave- recreation and transportation de- 22—Earth Day—the mayor signed Power Capital, an affiliate Surry County, in western North Car- which helps prevent runoff. ment, which is made from material partments that began in 1996, is to an ordinance that requires 50% of olina. North Carolina State University is that allows water to flow through it have almost 2,800 of these projects front yards in new projects to be of Wexford Capital, and Fibrowatt’s vice president for slowly toasting chicken manure in a and into the ground below. completed by 2017. permeable. joined by all previous in- public and environmental affairs, special oven, a process known as Runoff occurs when land is cov- The parks department also is This can be accomplished by add- vestors, says Mark Mills, Terry Walmsley, says sound com- torrefaction. The process creates ered with buildings, streets and constructing “green roofs” on 10 ing vegetation, or by using perme- co-founder of Digital bustion practices and pollution-con- gases that can be recycled and used parking lots. Rainwater runs off recreation centers, and testing able pavement such as porous con- trol systems keep carbon-monoxide to power the oven, as well as “bio- these hard surfaces, picking up green-roof systems on its adminis- crete, porous asphalt or permeable Carl Wiens Power Capital and chair- and sulfur-dioxide emissions at safe char,” a charcoal-like substance that chemicals, sediment and other pol- tration building on Randall’s Island. pavers, which allow water to pass man of International Bat- levels. captures carbon, slowing its release lutants and sending them into local Green roofs are covered with soil through the voids between inter- tery, which is based in Allentown, Pa. But in December, Minnesota’s en- into the atmosphere. Biochar can waterways. The rush of water from and low vegetation that slow the locked stones. The ordinance, which The U.S. Army is testing the company’s batteries for a vironmental agency, citing “numer- then be used to improve soil quality. drainage pipes can cause erosion, rate of runoff. took effect May 24, also expanded ous” permit violations, fined Fibro- And a team under Virginia Poly- and warmer runoff in the summer Meanwhile, the city is finalizing the tree-planting requirement. range of armored vehicles, Mr. Mills says. The company watt $65,000 and ordered it to technic Institute engineering profes- can change water temperature, hurt- plans to test porous concrete and Chicago has taken permeability also plans to ship batteries to utility company American upgrade the sulfur-dioxide monitor sor Foster Agblevor is using a tech- ing fish, plants and animals. bioswales at a public-housing prop- to its streets with its Green Alley Electric Power Co., which aims to test the batteries for at its Minnesota plant. Mr. Walms- nology known as pyrolysis on a In cities such as New York and erty in the Bronx consisting of program, begun in 2006. The pro- their capacity to store energy. ley says the plant’s recent report to farm in Dayton, Va., to rapidly heat Chicago that have systems that about 1,200 housing units. The con- gram aims to retrofit some of the state regulators showed pollutants poultry litter to a high temperature, carry sewage and storm water in crete allows filtration of water city’s 1,900 miles (3,058 kilometers) The new capital will help International Battery increase in 2009 were well below allowable creating biochar, as well as vapors Germany’s largest electricity provider, RWE, the use of energy from renewable sources such the same pipe to be treated, too through soil and bioswales, which of public alleyways with permeable production to meet any increase in demand that follows limits. that are condensed into “bio-oil,” a created a subsidiary for the development and as wind, water, the sun, biomass and geothermal much rain can flood the system, are gently sloped drainage paths pavement in an effort to reduce run- pilot tests by customers. Fibrowatt says its poultry-litter liquid being tested for use as a po- expansion of power and energy generation from energy.ItisnocoincidencethatNorthRhine- renewable resources. RWE Innogy is dedicated to Westphalia is the leading European energy region. causing an overflow of sewage into filled with vegetation. off. Chicago’s alleys are prone to —Timothy Hay plants can produce power at a cost tential fuel oil. water sources. Portland, Ore., a leader in low- flooding because they typically of about nine to 13 cents per kilo- Early findings, however, suggest In New York City, more than 27 impact development, has had regu- aren’t connected to the city’s com- Power Plays provides a look at alternative-energy deal news from reporters watt-hour, including federal subsi- the oil needs significant refinement billion gallons of raw sewage and For further information about North Rhine-Westphalia as a lations, initiatives and incentives in bined sewer system. for Dow Jones VentureWire, a daily newsletter covering venture-capital dies. Conventional coal, by compari- to work as well as petroleum prod- polluted storm water a year are dis- business location, please visit www.welovethenew.com place since the early 1990s to keep investing and start-up firms. Ms. Chernova can be reached at yuliya.cher- son, costs about 10 cents a ucts. charged into the New York harbor Ms. Plank is a staff reporter for The runoff at bay. In addition to building [email protected]. Mr. Hay can be reached at [email protected]. kilowatt-hour to produce without estuary and its tributaries from rain gardens and bioswales at Wall Street Journal in New York. She subsidies, according to the federal Ms. Carrns is a writer in Arkansas. She combined sewer overflows. Com- schools to absorb as much rainwater can be reached at [email protected]. Energy Information Administration’s can be reached at [email protected]. 18 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 19 THE JOURNAL REPORT: ENVIRONMENT THE JOURNAL REPORT: ENVIRONMENT Where Does the Water Go? POWER PLAYS Sun and Battery Power Looking to Litter In most American cities, it runs off into nearby lakes, rivers Energy company sees a future in chicken manure and streams. And that’s a problem. News on alternative-energy deals from Dow Jones VentureWire BY ANN CARRNS oultry farms in the U.S. Abundant Resource New Sources for BrightSource generate roughly 17 mil- Chicken and manure production in the 10 leading BrightSource Energy Inc. raised $150 million in a Series lion tons of chicken ma- chicken-farming states in 2009 Litter nure annually, creating a (in millions D round of capital as it prepares to start construction of a huge disposal problem. Chickens (in millions) of tons) large-scale solar plant in California later this year. SomeP energy researchers believe The company, based in Oakland, Calif., is working to- they have a solution: use that ma- Georgia 1,322 2.6 ward receiving $1.37 billion in loan guarantees from the nure to create electricity. Many farmers use chicken lit- Arkansas 1,051 2.1 U.S. government. The Department of Energy made a con- ter—a mixture of manure and bed- ditional commitment to ding—as a fertilizer, either spread- Alabama 1,002 2.0 provide the money to sup- ing it on their own croplands or port the construction of selling it to other growers. But the Mississippi 793 1.6 litter increasingly is being blamed BrightSource’s 400-mega- for phosphorus-laden runoff that North Carolina 760 1.5 watt solar project in Cali- chokes waterways in heavy poultry- fornia. producing areas, and environmental- Texas 669 1.3 To qualify for the federal ists are pushing the federal govern- ment to set limits on its use. Kentucky 307 0.6 money, BrightSource has to Fibrowatt LLC, a unit of pri- secure additional funds vately held Homeland Renewable Maryland 292 0.6 from its investors. The Energy, based in Langhorne, Pa., company won’t disclose says it has an answer. The company Virginia 241 0.5

Carl Wiens wants to erect litter-fueled power how much equity it needs plants in big poultry-producing South Carolina 238 0.5

Bureau of Environmental Services, Portland, Oregon to receive the Department of Energy loan guarantees, states such as Georgia, Arkansas Rainwater flows into a sidewalk planter from a street in Portland, Ore. which can be used to finance up to 70% of the project. and North Carolina. Note: Chicken figures are for production of broiler, or meat, chickens. Litter figures are Fibrowatt is an offshoot of the estimates based on an average of 4 pounds of litter per bird annually. Litter comprises bird BrightSource’s technology involves concentrating sun- manure plus feathers and bedding such as rice hulls or sawdust swept out with it. company that developed the first light via mirrors on a tower where liquid is heated and Sources: Economic Research Service and Natural Resources Conservation Service, U.S. BY WILLA PLANK bined pipe makes up about 65% of on-site as possible, the city has pro- such plants in the U.K. in the 1990s. Department of Agriculture New York’s sewer system, and al- moted green-street structures such turns into steam. The steam then powers a turbine to pro- It built the U.S.’s first poultry- merican cities are com- though the city has spent billions of as landscaped curb extensions and duce electricity. The company has a number of contracts waste-to-energy plant in 2007 in ing up with new ways to dollars on traditional storm-water vegetated roof systems. to sell power to utilities in California. Minnesota, the nation’s largest tur- deal with an old prob- controls such as temporary storage Portland requires any new devel- key-producing state. The $200 mil- Poultry litter at Fibrowatt’s plant inin Minnesota Minnesota is is burned burned to to generate generate electricity electricity lem: storm-water runoff. tanks, it still has impaired waters opment or redevelopment over 500 The Series D round included new investors Alstom SA, lion Minnesota plant burns 500,000

In the past, the solu- from runoff. square feet (46.4 square meters) to which provided $55 million, and the California State Teach- tons of turkey litter each year. The Fibrowatt tionA was pretty straightforward. Cit- Uneven enforcement of the fed- have a system in place for managing ers’ Retirement System, as well as returning investors process creates steam to turn tur- ies would build and maintain drain- eral Clean Water Act—which aims to storm water on-site, so Todd Liebow VantagePoint Venture Partners, Morgan Stanley and bines in a 55-megawatt power plant, latest analysis of average electricity- age systems that could quickly make the nation’s waters swimma- placed a green roof on his new providing electricity for about generation costs for new plants. collect storm water and transport it ble, drinkable and fishable—hasn’t 5,000-square-foot retail building in Draper Fisher Jurvetson. Previous investors Black River 40,000 homes, according to Fibro- Helping Fibrowatt’s case in North away from developed areas and into helped the situation. The Environ- the Sellwood neighborhood. Asset Management (an investment arm of Cargill Inc.), BP watt. Carolina is the fact that the state nearby rivers, lakes and streams. mental Protection Agency this sum- Mr. Liebow didn’t want to use up Alternative Energy, Chevron Technology Ventures, DBL The company says progress on its has ordered utilities to begin using But with urban runoff increasingly mer plans to send questionnaires to land space with other methods like Investors, Google.org and Statoil ASA also returned for proposed projects in other states electricity produced specifically SOURCES OF ENERGY. being blamed for dirtying American owners and developers of newly de- a drywell, or a perforated pipe that has been slow because it has to ne- from alternative sources such as waters, the search is on for solu- veloped and redeveloped sites, ask- collects and infiltrates water to the this latest round. gotiate power-purchase agreements poultry litter beginning in 2012. tions that involve filtering or soak- ing them what they are doing to ground. And the state did not allow The company has now raised more than $300 million in with utilities, work out contracts Fibrowatt isn’t the only organiza- ing up rainwater where it falls. combat runoff as it moves to for a holding tank underneath the equity. with farmers for litter and obtain tion working on technology for Thomas Ballestero, a civil-engi- strengthen storm-water regulations building. —Yuliya Chernova state permits before starting con- turning chicken manure into energy. neering professor at the University by November 2012. Mr. Liebow’s green roof includes struction. REM Engineering Inc. of Roswell, of New Hampshire, is the lead scien- In the meantime, cities like New a waterproof membrane, soil and Fibrowatt also has run into oppo- Ga., has patented gasification tech- tist at UNH Stormwater Center, York—faced with aging infrastruc- low-maintenance sedum plants. “It’s Battery Charged sition from critics, who worry that nology for burning chicken litter in which is exploring new methods for ture and pressure from environmen- a pretty spectacular garden,” Mr. International Battery Inc., which designs and builds lith- power plants fueled by poultry litter industrial settings. Last year at a dealing with urban runoff. He says talists—are taking steps to reduce Liebow says, adding that birds and ium-ion batteries for hybrid vehicles and large energy-stor- will emit high levels of pollutants chicken-feed mill in Fairmount, Ga., many developers and regulators the amount of storm water that bees frequent the roof, which was such as nitrogen oxide, carbon mon- a test system burned some 15 tons aren’t familiar with new technolo- needs to be drained. completed in January. Portland pro- age systems, raised $35 million in Series C funding as it oxide and particulates, even with of raw litter a day, creating gas that gies aimed at soaking up rainwater. New York, for example, is trans- vides incentives for green roofs—$5 ramps up production for state-of-the-art pollution-control de- heated a boiler to produce steam “People may not be up to speed,” forming certain paved areas of the per square foot—so the cost of Mr. potential customers like vices. used in making feed pellets. A full- Mr. Ballestero says. “There is folk- city into vegetative street spaces Liebow’s roof was cut almost in half, the U.S. military and power “It’s a dirty form of fuel,” says size unit would burn at least 75 tons lore that [these technologies] are ei- filled with trees, shrubs and ground to about $26,000. Louis Zeller, science director of the daily. The ash residue, says engineer ther too expensive or they are im- cover that can absorb water. The San Francisco, meanwhile, re- companies. Blue Ridge Environmental Defense Doug Latulippe, can be used to possible challenges.” goal of the Greenstreets program, a cently passed its own rainwater- The round was led by League, which in May helped scuttle make fertilizer that contains phos- Among the innovations his group joint effort of the city’s parks-and- runoff regulations. On April previous investor Digital a Fibrowatt project proposed for phorus that isn’t water soluble, is investigating is permeable pave- recreation and transportation de- 22—Earth Day—the mayor signed Power Capital, an affiliate Surry County, in western North Car- which helps prevent runoff. ment, which is made from material partments that began in 1996, is to an ordinance that requires 50% of olina. North Carolina State University is that allows water to flow through it have almost 2,800 of these projects front yards in new projects to be of Wexford Capital, and Fibrowatt’s vice president for slowly toasting chicken manure in a and into the ground below. completed by 2017. permeable. joined by all previous in- public and environmental affairs, special oven, a process known as Runoff occurs when land is cov- The parks department also is This can be accomplished by add- vestors, says Mark Mills, Terry Walmsley, says sound com- torrefaction. The process creates ered with buildings, streets and constructing “green roofs” on 10 ing vegetation, or by using perme- co-founder of Digital bustion practices and pollution-con- gases that can be recycled and used parking lots. Rainwater runs off recreation centers, and testing able pavement such as porous con- trol systems keep carbon-monoxide to power the oven, as well as “bio- these hard surfaces, picking up green-roof systems on its adminis- crete, porous asphalt or permeable Carl Wiens Power Capital and chair- and sulfur-dioxide emissions at safe char,” a charcoal-like substance that chemicals, sediment and other pol- tration building on Randall’s Island. pavers, which allow water to pass man of International Bat- levels. captures carbon, slowing its release lutants and sending them into local Green roofs are covered with soil through the voids between inter- tery, which is based in Allentown, Pa. But in December, Minnesota’s en- into the atmosphere. Biochar can waterways. The rush of water from and low vegetation that slow the locked stones. The ordinance, which The U.S. Army is testing the company’s batteries for a vironmental agency, citing “numer- then be used to improve soil quality. drainage pipes can cause erosion, rate of runoff. took effect May 24, also expanded ous” permit violations, fined Fibro- And a team under Virginia Poly- and warmer runoff in the summer Meanwhile, the city is finalizing the tree-planting requirement. range of armored vehicles, Mr. Mills says. The company watt $65,000 and ordered it to technic Institute engineering profes- can change water temperature, hurt- plans to test porous concrete and Chicago has taken permeability also plans to ship batteries to utility company American upgrade the sulfur-dioxide monitor sor Foster Agblevor is using a tech- ing fish, plants and animals. bioswales at a public-housing prop- to its streets with its Green Alley Electric Power Co., which aims to test the batteries for at its Minnesota plant. Mr. Walms- nology known as pyrolysis on a In cities such as New York and erty in the Bronx consisting of program, begun in 2006. The pro- their capacity to store energy. ley says the plant’s recent report to farm in Dayton, Va., to rapidly heat Chicago that have systems that about 1,200 housing units. The con- gram aims to retrofit some of the state regulators showed pollutants poultry litter to a high temperature, carry sewage and storm water in crete allows filtration of water city’s 1,900 miles (3,058 kilometers) The new capital will help International Battery increase in 2009 were well below allowable creating biochar, as well as vapors Germany’s largest electricity provider, RWE, the use of energy from renewable sources such the same pipe to be treated, too through soil and bioswales, which of public alleyways with permeable production to meet any increase in demand that follows limits. that are condensed into “bio-oil,” a created a subsidiary for the development and as wind, water, the sun, biomass and geothermal much rain can flood the system, are gently sloped drainage paths pavement in an effort to reduce run- pilot tests by customers. Fibrowatt says its poultry-litter liquid being tested for use as a po- expansion of power and energy generation from energy.ItisnocoincidencethatNorthRhine- renewable resources. RWE Innogy is dedicated to Westphalia is the leading European energy region. causing an overflow of sewage into filled with vegetation. off. Chicago’s alleys are prone to —Timothy Hay plants can produce power at a cost tential fuel oil. water sources. Portland, Ore., a leader in low- flooding because they typically of about nine to 13 cents per kilo- Early findings, however, suggest In New York City, more than 27 impact development, has had regu- aren’t connected to the city’s com- Power Plays provides a look at alternative-energy deal news from reporters watt-hour, including federal subsi- the oil needs significant refinement billion gallons of raw sewage and For further information about North Rhine-Westphalia as a lations, initiatives and incentives in bined sewer system. for Dow Jones VentureWire, a daily newsletter covering venture-capital dies. Conventional coal, by compari- to work as well as petroleum prod- polluted storm water a year are dis- business location, please visit www.welovethenew.com place since the early 1990s to keep investing and start-up firms. Ms. Chernova can be reached at yuliya.cher- son, costs about 10 cents a ucts. charged into the New York harbor Ms. Plank is a staff reporter for The runoff at bay. In addition to building [email protected]. Mr. Hay can be reached at [email protected]. kilowatt-hour to produce without estuary and its tributaries from rain gardens and bioswales at Wall Street Journal in New York. She subsidies, according to the federal Ms. Carrns is a writer in Arkansas. She combined sewer overflows. Com- schools to absorb as much rainwater can be reached at [email protected]. Energy Information Administration’s can be reached at [email protected]. 20 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. * 17 MARKETS LINEUP THE JOURNAL REPORT: ENVIRONMENT Moving the European indexes… markets FTSE 100 DAX CAC-40 FTSE MIB Man vs. Fish At right, Europe’s benchmark stock indexes U.K. 5132.94 Germany 6065.24 France 3554.48 Italy 20478.98 and stocks Friday. Below each index are its most actively traded stocks. The charts show s 0.54% or 27.49 s 0.49% or 29.58 s 0.46% or 16.23 s 1.16% or 235.25 the percentage change in each index’s or As the appetite for seafood soars, stock’s value, rather than the point change, for The index surged 6.1% for the week, its best Lufthansa jumped 1.2% after well-received This market surged 6.2% for the week, aided Banks drove the gain on Friday as the index purposes of comparison. The index level or weekly showing in a year. Even so, the passenger data for June. Infineon increased by relief over Europe’s pending bank stress continued to benefit from rising confidence restaurant companies are pressed to stock price is indicated on each axis. All benchmark is down 5.2% for 2010. Antofa- 1.5% after reports said it is close to selling tests and stronger-than-expected domestic ahead of the results of stress tests on EU gasta led blue-chip gainers on Friday. its mobile-phone chip unit to Intel. industrial output for May, reported Friday. banks. UniCredit jumped 3.2%. indexes and stocks are shown in local currency promote sustainable solutions terms. 7500 8250 6000 36000 BY PAUL ZIOBRO Fish sandwich until the late 1980s. 6250 6875 5000 30000 Newfoundland cod fishing grounds he world’s rising appetite became so overfished that the fish- 5000 5500 4000 24000 for seafood is on a colli- ery shut down in the early 1990s. sion course with its Fish suppliers and harvesters “de- shrinking wild fisheries, stroyed the whole fishing area,” 3750 4125 3000 18000 leaving restaurant com- says Gary Johnson, senior director paniesT and other big buyers caught of McDonald’s global supply chain. in the middle. McDonald’s now uses five different 2500 2750 2000 12000 Amid reports suggesting that the whitefish species in the sandwich. J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J world’s oceans are being emptied of McDonald’s, which buys 50,000 WSJ.com 2009 2010 2009 2010 2009 2010 2009 2010 fish, companies such as McDonald’s metric tons of whitefish a year, now Corp., Long John Silver’s owner judges fisheries on three factors: Follow the markets throughout the day, Volume Close Change Volume Close Change Volume Close Change Volume Close Change Yum Brands Inc. and Red Lobster how closely they are monitored to Stock in millions In pence Net % Stock in millions In euro Net % Stock in millions In euro Net % Stock in millions In euro Net % with updated stock quotes, news and parent Darden Restaurants Inc. ensure that, for example, fishing Lloyds Banking 151.88 61.71 1.01 1.66 InfineonTch 14.17 5.08 0.08 1.52 Alcatel Lucent 12.69 2.140 –0.012 –0.56 UniCredit 394.28 2.05 0.06 3.17 commentary at WSJ.com. have embraced a growing movement boats don’t cheat on their quotas; RoyalBnkofScot 72.46 44.25 –0.11 –0.25 DeutscheTel 14.12 9.97 0.00 0.02 CreditAgricole 8.45 9.264 –0.106 –1.13 IntesaSanpaolo 91.03 2.43 0.03 1.38 Also, receive emails that summarize toward more eco-friendly seafood- whether enough fish are left to al- VodafoneGp 67.07 143.50 0.20 0.14 Commerzbank 7.83 6.29 0.00 0.06 FrTelecom 8.21 14.945 –0.080 –0.53 TelecomItalia 46.56 0.95 0.01 1.06 the day’s trading in Europe and Asia. buying practices. They are working low the stock to rebound each sea- BP 50.04 364.80 –2.20 –0.60 E.ON 5.64 22.74 -0.11 –0.46 ArcelorMittal 6.89 23.660 0.555 2.40 Pirelli&C 33.65 0.48 0.00 0.63 To sign up, go to WSJ.com/Email. with scientists and groups like the son; and the toll taken on the envi- Barclays 48.35 300.45 –1.55 –0.51 DeutscheBk 3.92 49.25 0.24 0.48 AXA 6.15 13.290 –0.050 –0.37 Enel 31.42 3.66 0.02 0.55 independent, nonprofit Marine ronment from the fishing methods Stewardship Council to ensure the being used. McDonald’s says the fish they buy is “sustainable,” mean- vast majority of its fish now comes

ing it is caught in a way that doesn’t from sources that meet sustainabil- Getty Images European stocks in the news damage the ability of the species to ity guidelines, such as those given A haddock caught in the North Atlantic reproduce. by the Marine Stewardship Council. “We know if we go raping and In 2007, McDonald’s stopped us- buyers have become more mindful peace’s ocean-campaigns director. “The state of global fisheries is Bureau Veritas UniCredit Straumann Hldg Antofagasta Transocean Ltd. pillaging it today, there’s nothing ing Eastern Baltic cod because it of the environmental impacts of He encourages the large chains to such,” Mr. Hocevar says, that the big left for tomorrow,” says Ken Conrad, was skeptical that the number of their purchases, some are still look- invest in new methods of aquacul- chains “don’t have a sustainable France €47.40 Italy €2.05 Switzerland CHF231.10 United Kingdom 886.00 pence Switzerland CHF54.70 the second-generation owner of the fish being caught were being re- ing too narrowly at sustainability. ture that don’t upset the environ- source. They’ve just found a less s 3.0% or €1.40 s 3.2% or €0.06 s 3.7% or CHF8.30 s 4.1% or 34.50 pence s 5.3% or CHF2.75 corded correctly. This year, after For instance, large-scale harvest- ment. bad source.” suppliers improved their reporting ing of the Alaskan pollock, one of McDonald’s say it buys only Alas- Credit Suisse raised the stock to 'neutral' from Shares surged 14% in four sessions as The firm’s CFO, Wolf-Ruediger Daetz, Citigroup talked up the copper miner’s stock. A U.S. court again rejected a ban on deep- On the Menu standards, McDonald’s once again the fish McDonald’s uses, affects the kan pollock that comes from sources Mr. Ziobro is a reporter with Dow Jones 'underperform.' Europe's pending stress tests reassured announced that he would depart in the fall. water drilling. Average annual world seafood began buying Eastern Baltic cod, un- food supply of Steller sea lions and certified by third parties as sustain- Newswires in New York. He can be investors. consumption per capita derscoring how large buyers can fur seals, says John Hocevar, Green- able. reached at [email protected]. force change. 40 pounds 37.6 36.1 Not all of the large chains can In euro 70 In euro 3.00 In franc 450 In pence 1500 In franc 150 35 31.7 easily force change. Darden, which 56 2.40 360 1200 120 30 27.5 buys 100 million pounds (45.4 mil- 25.3 42 1.80 270 900 90 25 lion kilos) of seafood annually, de- 20 cided shortly after it bought the Capital Grille chain in 2007 to take 15 28 1.20 180 600 60 Chilean sea bass off its new chain’s 10 menu because it couldn’t find a suit- 5 ably sustainable source from which 0 to buy it. 14 0.60 90 300 30 ’70s ’80s ’90s ’05 ’08* “We swallowed hard about taking J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J A M J it off, but we’re such a small player *Preliminary figure 2009 2010 2009 2010 2009 2010 2009 2010 2010 that we would not be able to have Source: United Nations Food and Agriculture Organization an influence,” says Bill Herzig, se- Price-to-earnings ratio 20 Price-to-earnings ratio 21 Price-to-earnings ratio 25 Price-to-earnings ratio 21 Price-to-earnings ratio 6 nior vice president of purchasing Earnings per share, past four quarters 2.34 Earnings per share, past four quarters 0.10 Earnings per share, past four quarters 9.38 Earnings per share, past four quarters 41.91 Earnings per share, past four quarters 9.50 and supply-chain innovation. Dividend yield 1.77% Dividend yield 1.46% Dividend yield 1.62% Dividend yield 0.71% Dividend yield None chain of 10 Libby Hill seafood res- Farming the Oceans PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE taurants in North Carolina and Vir- Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wks ginia and chairman of the National Some species, such as haddock Indus Gds & Svcs 0.2% 5.4% 38.8% Banks 0.3% 9.6% 9.4% Health Care 0.3% 2.8% 13.3% Basic Resources 1.2% 6.5% 37.9% Oil & Gas ... 6.5% -1.9% Fisheries Institute, a seafood-indus- and Atlantic sea scallops, have re- Bureau Veritas 3.0% 7.0% 45.2% UniCredit 3.2% 12.5% 30.7% Straumann Hldg 3.7% 3.0% 24.4% Antofagasta 4.1% 14.0% 50.7% Transocean Ltd. 5.3% 6.0% 81.4% try trade group. covered from previous declines, af- Experts say their efforts are com- ter the U.S. government began en- A.P. Moller-Maersk B Sulzer British Land Banco Espirito Santo Gemalto ing none too soon. forcing certain aspects of the A recent United Nations study federal fisheries conservation act in Denmark DKK52,040.00 Switzerland CHF106.40 United Kingdom 447.50 pence Portugal €3.55 France €29.81 predicts that unless something the mid-1990s, says Ray Hilborn, a t 1.8% or DKK960.00 t 1.9% or CHF2.10 t 2.0% or 9.10 pence t 3.5% or €0.13 t 5.7% or €1.79 changes, nearly all commercial fish- professor of aquatic and fishery sci- eries will collapse by mid-century, ences at the University of Washing- A seven-day winning streak came to an end. Even with the loss,the equipment firm is still Friday’s drop snapped five days of gains. Shaers pulled back after a three-day, 13% The security firm’s stock closed at its lowest meaning they will be producing less ton. up 5.55% on the week. jump. level since May 28. than 10% of their onetime potential. Still, wild fisheries clearly won’t Already, almost 30% of fish stocks be able to meet the world’s seafood fall into that category. demands, so aquaculture—or raising In euro 40 In krone 75000 In franc 150 In pence 1000 In euro 10 Disappearing Cod seafood in enclosed, controlled envi- 32 ronments—is being counted on to 60000 120 800 8 Production by wild fisheries has make up the shortfall. 24 45000 90 600 6 remained fairly steady over the past But aquaculture poses its own set decade, totaling about 90 million of challenges. Farm-raised seafood 16 metric tons annually, says the is exposed to more pesticides and 30000 60 400 4 United Nations’ Food and Agricul- antibiotics in captivity, and some ture Organization. But annual sea- fish, like salmon, are given dye addi- food demand is expected to rise to tives to give their flesh an orange at least 150 million metric tons by hue. Most farm-raised fish are also 8 15000 30 200 2 2030, creating a shortfall that will given feed that comes from the sea, J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J 2009 2010 need to be filled. depleting the wild supply. 2009 2010 2009 2010 2009 2010 2009 2010 Population growth and the pub- Darden works with the nonprofit lic’s heartier appetite for seafood Global Aquaculture Alliance on glo- Price-to-earnings ratio None Price-to-earnings ratio 13 Price-to-earnings ratio 3 Price-to-earnings ratio 7 Price-to-earnings ratio 21 are only part of the problem. Mis- bal standards on sustainable aqua- Earnings per share, past four quarters -1677.00 Earnings per share, past four quarters 7.99 Earnings per share, past four quarters 132.00 Earnings per share, past four quarters 0.52 Earnings per share, past four quarters 1.39 management, a lack of government culture. Darden also is pioneering Dividend yield 0.62% Dividend yield 2.63% Dividend yield 5.81% Dividend yield 3.94% Dividend yield 0.84% enforcement of fishing quotas, and new practices, including incorporat- PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE illegal fishing also have hurt some ing more grains into the diets of Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wks wild fisheries. captive fish to reduce the reliance Indus Gds & Svcs 0.2% 5.4% 38.8% Indus Gds & Svcs 0.2% 5.4% 38.8% Financial Services 0.03% 5.0% 9.4% Banks 0.3% 9.6% 9.4% Indus Gds & Svcs 0.2% 5.4% 38.8% One glaring need for reform came on seafood-based feed. A.P. Moller-Maersk B -1.8% 7.1% 80.1% Sulzer -1.9% 5.5% 70.8% British Land -2.0% 2.6% 23.1% Banco Espirito Santo -3.5% 8.2% -11.4% Gemalto -5.7% -2.7% 24.2% from North Atlantic cod, the only Greenpeace says that while res- fish McDonald’s used in its Filet-o- taurants and other large seafood Pound/Euro 0.8362 g 0.02% Yen/$ ¥88.47 g 0.12% Global Dow 1794.46 À 0.89% Gold 1209.60 À 1.15% Oil 76.09 À 0.86% 3-month Libor 0.52681 10-year Treasury g 10/32 yield 3.056% Environment Anshu Jain ranks first among Gazprom looks good Europe’s most influential bankers for a short-term romance the journal report BUSINESS & FINANCE 24 HEARD ON THE STREET 36 EUROPE BUSINESS& FINANCE. Cap and No More Trade Monday, July 12, 2010 THE WALL STREET JOURNAL. europe.WSJ.com Market-based environmental programs can work well. Greek test: But as the U.S. acid-rain market shows, they need clear rules set by the government. Single sale Herd instinct takes over BY MARK PETERS proach. So, the industry for the most part threw its support behind BY E.S. BROWNING stocks must move in the same direc- fter more than a decade the rule changes. of T-bills Stocks in sync S&P 500 members’ correlation with the market tion as the index. Some stocks al- of slashing air pollution Promising Start Stocks are trading in lock-step most always move in a different di- from power plants, the more than at any time since the Stocks in the S&P 500 80% rection than the index. The the original U.S. cap-and- Prices of sulfur-dioxide allow- 1987 crash, and the trend has some have been tracking the average of their moves, usually trade market has ground ances more than doubled soon after is Tuesday analysts concerned. index to the highest 70 weighted for each stock’s total mar- toA a halt. The final blow likely was the changes were announced, hitting In recent weeks, stocks in the degree since the 1987 ket value, equals the index’s return. delivered by new federal pollution $1,600 a ton in late 2005. State pro- BY EMESE BARTHA Standard & Poor’s 500-stock index crash, according to a 60 Earlier this year, when stocks rules announced last week. grams to control pollution and other have shown an increasing tendency measure of correlation were on the mend and investors The acid-rain market has been in factors such as growing electricity Greece will auction its first Trea- to move in the same direction at the that calculates the 50 were less anxious, the correlation percentage of stocks a state of disarray for the past two demand also helped to drive emis- sury bills Tuesday since accepting a same time. Last week, those stocks’ 50-day moving average between the S&P 500 and its stocks years as utilities, states and inves- sion-allowance prices up. At the bailout in May, marking a test of tendency to move in the same direc- moving in the same 40 fell below 50%, suggesting that in- tors waited for the Environmental same time, the utilities increased in- whether international investors are tion as the index hit direction as the index. 2008 '09 '10 vestors were looking for individual Protection Agency to issue new vestment in pollution controls to willing to buy its debt. ABREAST OF an extreme not seen stocks to own rather than just buy- Since the S&P 500’s April 23 peak, all the index’s sectors have been down, rules. prepare for the start of the new But in a sign that the govern- THE MARKET since October 1987, ing large indexes. as have both dividend-paying and non-dividend-paying stocks. Treasury Now those rules are out, and they rules in 2009 and 2010. ment isn’t willing to pay any price according to re- But by mid-June, the correlation bonds have been up. set strict new limits on emissions. But in 2008, in response to law- for funds, it is auctioning only 26- search by investment group Birinyi had jumped back above 70%, as in- But they also reduce utilities’ ability suits filed by a handful of utilities week bills, rather than both 26- and Associates in Westport, Conn. 10-year to 20-year Treasury bonds 7.8% vestors stopped looking for winners to trade allowances to meet those and North Carolina, the U.S. Court 52-week bills. The market’s flock-like behavior –11.0% S&P 500 and just sold broadly. Last week it tighter standards. As a result, the of Appeals for the District of Colum- Greece doesn’t need the cash to is one more reflection of the grow- surpassed its 2008 high of 79% and –11.3 S&P 500 dividend paying value of the allowances already on bia Circuit ruled that the EPA had pay its bills, given the €110 billion ing influence of investors using hit 81%, the highest level since the the market are expected to fall to overstepped its authority in expand- ($139 billion) support package it is broad-based strategies to buy and –11.5 S&P 500 non-dividend paying 1987 crash, when it touched 83% for zero, causing a complete collapse of ing the markets and that parts of receiving from the International sell large blocks of stocks. Instead of one day. That means that on most Telecommunications trading. the new rules were in conflict with Monetary Fund and European picking individual stocks to hold –1.3 days recently, the great majority of Hopes are few that the market existing Clean Air Act regulations. Union. But the government has said over a period of time, they trade in –1.6 Utilties stocks in the S&P 500 were moving will recover. And that holds a warn- The court allowed the expansion of it wants to maintain a presence in and out of the market using broad –4.5 Consumer staples in the same direction, up or down. ing for policy makers hoping to es- the market to take place, but it or- the market and to establish a bench- indexes. Often, these investors use –6.9 Health care Correlation typically goes up tablish a similar market-based ap- dered the EPA to rewrite its rules to mark for instruments. exchange-traded funds, which trade during volatile periods, reflecting –12.4 Technology proach to curb emissions of carbon, comply with existing law. Prices of The auction comes at a time as easily as a single stock but con- investors’ tendency to dump stocks which scientists have linked to glo- allowances fell in response, and when other Greek short-term bills tain many different stocks that may –12.5 Materials wholesale rather than try to pick –13.4 Financials bal warming. Though they’ve Getty Images trading dwindled. yield as much as 7.3% and foreign belong to the S&P 500, the Nasdaq out stocks that once were viewed as worked well for years, market-based Effects of acid rain in Great Smoky Mountains National Park With the release of those revi- investors are avoiding the market. 100 or another index. –13.7 Industrials refuges, such as those that pay divi- approaches to reducing air pollution sions last week, curbing trading and The country’s Public Debt Man- Heavy trading in exchange- –14.4 Energy dends. are extremely vulnerable to govern- enacting strict new state caps, the agement Agency said Friday that it traded funds means that more Many money managers have –14.7 Consumer discretionary ment actions. And just like in mar- Cap and Fade acid-rain market isn’t likely to re- will auction €1.25 billion ($1.59 bil- stocks are likely to move in the been moving to entirely different kets in general, investors—and utili- cover. Requiring utilities to take lion) of 26-week T-bills. same direction on any given day. Note: Data shows total return for all groups except dividend-paying stocks, for which only price return was asset classes, such as bonds or cash, The once-robust market in sulfur-dioxide allowances, a key part of the effort to curtail acid rain, has taken a tumble. available. Adding in dividends might have narrowed that group's decline by about 0.5%. ties in this case—hate uncertainty. Spot prices over the past five years: new steps to cut sulfur-dioxide The amount could reach €2 bil- Analysts call that correlation, a says Jack Ablin, chief investment of- The cap-and-trade approach was emissions will cause an already lion because it can raise the amount mathematical term meaning similar- Source: Birinyi Associates ficer at Harris Private Bank, which first used to curb pollutants causing $1,800 large surplus of allowances to bal- by 30% of noncompetitive bids both ity of behavior. Correlation is on the oversees $57 billion in Chicago. acid rain. European carbon markets loon further. Using those allowances on the auction day and again two rise, to the frustration of investors mutual-fund managers to distin- degree to which one stock tracks the Early last month, his firm shifted followed, modeled in part on the 1,600 from the acid-rain market to meet days later. who are trying to analyze stocks guish themselves by doing individ- movement of the index. A correla- hundreds of millions of dollars out acid-rain market’s early success. But 1,400 the limits won’t be allowed under The debt agency didn’t proceed based on their underlying strengths ual stock picks. They might get the tion of 50% means that half the in- of stocks and other risky assets, a federal court in 2008 rejected a the new rules. with plans to auction 52-week T- and weaknesses. product right and the earnings dex’s component stocks are moving such as commodities, and into Trea- complex 2005 plan by the EPA to 1,200 “It really feels like prices are go- bills, as it normally does, because of “It is an indexing market and not right, but the market goes down and in the same direction as the index. A sury bonds and high-grade corpo- expand U.S. environmental markets. ing to zero quickly,” says Peter Za- the high costs of funding a one-year a market for stocks. On good days the stock is going to go down as perfect correlation would be 100%, rate bonds. In response, prices for the pollution 1,000 borowsky, a managing director of issue. One-year Greek T-bills cur- everything goes up and on bad days well.” with all stocks tracking the index. In a typical customer account allowances that drive emission re- Evolution Markets Inc., a White rently carry a yield of between 6.0% everything goes down. Everyone Every day, Birinyi measures the The average correlation since 1980 that might normally have 55% of its ductions plunged. Utilities held off 800 Plains, N.Y.-based provider of envi- and 6.5% in the market, well above talks about baskets or sectors,” says 50-day average correlation between has been 44%. This particular meth- money in risky assets such as stocks on projects to clean up their plants. ronmental brokerage services for what it would pay the EU and IMF. Jeffrey Yale Rubin, research director the direction of the S&P 500 and odology doesn’t allow for a negative and 45% in bonds, Mr. Ablin has 600 Limiting Trading utilities and investors. Under those terms, Greece can at Birinyi Associates. “It is harder that of its member stocks. In this correlation or a correlation of zero, flipped the ratio. Stocks have gone 400 U.S. Sen. Thomas Carper, a Demo- borrow at a floating rate that is cur- for individual investors and even for case, correlation is a measure of the since at least some component Please turn to page 27 Now, the rules just issued will re- crat from Delaware, has proposed rently around 4% for 12 months, strict trading by utilities further. 200 new legislation that would use the said a person familiar with the deal. The changes aren’t a signal that the existing markets to achieve similar “Why should we pay up?” the EPA has soured on market-based 0 reductions, but the bill faces a Con- person said. “There is no point in programs to combat pollution, ac- 2005 '06 '07 '08 '09 '10 gress focused on broader energy paying out 12-month market rates if Apple opens its second store in China cording to an agency official. But Source: Evolution Markets Inc. legislation. we have already secured that dura- because of the court ruling, the new Keeping Faith tion.” regulations will require utilities in The government is betting that it BY LORETTA CHAO China is the world’s largest upwind states to cut their pollution decades. “It is something that technology, they could capture new tem in more than two dozen, mostly Utilities and environmental will pay substantially less for six- handset market and second largest outright in order to ensure that worked so well.” revenue by selling any leftover al- Eastern, states. groups generally haven’t lost faith month funds than for 12-month BEIJING—Hundreds of people personal-computer market after the downwind states meet federal air- The U.S. acid-rain trading pro- lowances or avoiding the cost of The new EPA orders, known as in a market-based approach to the funds. Buyers are likely to be prima- lined up Saturday to be among the U.S. But while other PC makers such quality standards. Limited trading gram is often cited as the first, buying new ones. That’s the trade in the Clean Air Interstate Rule, sought problem of air pollution. rily Greek banks, and strong de- first to enter Apple Inc.’s newest as Hewlett-Packard Co. have will be allowed by utilities to com- large-scale effort by a country to cap and trade. to achieve bigger cuts in part by John Walke, clean air director at mand, as at recent sales, could push store in China. rushed to expand retail channels in ply as well, but the new rules are far combine environmental goals with a slashing the future value of allow- the Natural Resources Defense down yields. The 1,500-square-meter under- China in recent years, Apple has more restrictive than they were in market system. Starting in 1995, the Drop in Emissions ances handed out to utilities. Under Council, says that the 2008 appeals At the previous auction in April, ground space in Shanghai, China’s moved ploddingly. the Bush administration plan. U.S. government put a limit on sul- An EPA study shows sulfur-diox- the new rules, starting in 2010 utili- court decision remained silent on 26-week T-bills were sold to yield wealthiest city, marks the start of a It opened the Beijing store two Under the new rules, only a slice fur-dioxide emissions—essentially ide emissions in 2008 were 52% be- ties would have to use two allow- the larger question of the effective- 4.55%, well below the peak of 10% major retail expansion in a country years ago and otherwise relies on a of required emission reductions can the cap in cap and trade. That limit low 1990 levels. Similar reductions ances instead of one to emit a ton of ness of environmental markets, and yield in the market at the peak of where the company so far has had a network of authorized resellers for come from buying allowances, with affects mostly coal-fired power came from a regional program the pollutants. that the new EPA rules shouldn’t be Greece’s financial woes around the relatively meager presence. distribution. the rest coming from changes at the plants. agency later started to cut emis- This was basically an attempt by viewed as an abandonment of cap- same time. Friday, yields on those Apple—which has one other Chi- Apple has been slower than ri- plants themselves. And millions of Then officials created a market sions of nitrogen oxide, a major con- the Bush administration to tighten and-trade. “The acid-rain market bills diverged widely depending on nese store, in Beijing—has said it vals to expand overseas, even as it allowances that utilities now hold by handing out a set number of tributor to smog. the cap on pollutants—by cutting continues to be relevant to the de- whether they were trading in Ath- plans to open 25 stores in China by has grown rapidly at home and is can’t be used under the new pro- emission allowances to utilities. But in 2005 the EPA, with the the supply of allowances—without bate over CO2 because it is a suc- ens or elsewhere in Europe. the end of next year, including a now the world’s biggest technology gram, which will issue its own al- Plants surrendered one allowance backing of many utilities and envi- having to write new legislation. cessful model,” he says. Those bills traded to yield be- second store in Shanghai. company by market value. lowances. for each ton of sulfur dioxide they ronmental groups, announced Democrats in Congress were push- tween 3.90% and 4.30% in Athens, Apple’s flagship stores, which Research firm IDC said Apple “It is tragic,” says Gary Hart, an emitted into the atmosphere. If util- changes that sought major new re- ing for much tighter caps. The utili- Mr. Peters is a reporter for compared to between 3.60% and like the Shanghai outlet often sport PCs made up less than 1% of total analyst at ICAP Energy LLC based in ities cut emissions by switching to ductions in smog-forming and soot- ties knew they were going have to Dow Jones Newswires in New York. 7.80% elsewhere in Europe. eye-catching architecture, are a key PCs shipped in China as of the first

Birmingham, Ala., who has worked low-sulfur coals, increasing effi- producing emissions, and expanded accept something, and they ap- He can be reached at —Alkman Granitsas part of the Cupertino, Calif., com- quarter. In the U.S., Apple claimed Associated Press/Xinhua on environmental markets for two ciency or adding emission-control the reach of the cap-and-trade sys- proved of the market-based ap- [email protected]. contributed to this article. pany’s branding strategy. Please turn to page 25 Hundreds of shoppers waited to enter Apple’s store in Shanghai on Saturday. 22 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 15 BUSINESS FINANCE THE BIG READ

Hervé Falciani, a former employee of HSBC, is at the center of a dispute between France and Tech firms push shake-up in online ads Switzerland over bank data. must have had “a misunderstanding,” be- BY JESSICA E. VASCELLARO in exchange for advertising, and cause “my plan wasn’t to set up a com- marketing units, which are con- pany.” Mr. Falciani said his goal was to ex- SUN VALLEY, Idaho—As media cerned about experimenting with pose security gaps at the bank, which he companies voice doubts about new formats that may not work. thought could harm clients and govern- whether they can build their digital Both sets of concerns threaten to ments. businesses on advertising alone, cap the growth of online advertis- Mr. Falciani says he alerted his bosses at technology companies are trying ing. While growing faster than most HSBC in 2006 about flaws in data storage hard to persuade them to think forms of advertising, online-ad that could affect client confidentiality, but more creatively. growth was slowing even before the no one listened. HSBC officials said they In a range of interviews here last recession. found no such warnings by Mr. Falciani. week on the sidelines of Allen & In 2009, U.S. spending on Inter- Around that time, Ms. Mikhael, an HSBC Co.’s annual net ads, totaled $22.7 billion, or colleague, entered the picture. A Franco- ADVERTISING gathering of me- about 17% of the combined market Lebanese computer programmer, she joined dia moguls, com- for TV, magazines, newspaper, radio HSBC in Geneva on a temporary contract in panies ranging from upstarts to In- and Internet ads, according to Price- 2006, but had no access to sensitive data, ternet giant Google Inc. touted the waterhouseCoopers. the company says. Soon after arriving at promise of new ad formats they said The Interactive Advertising Bu- the bank, Ms. Mikhael and the married Mr. would outperform banner and reau reported that U.S. online-ad Falciani began a romantic relationship, search ads, the digital-ad industry’s revenues were up 7.5% from a year which has since ended, according to their current staples. earlier in the first quarter of 2010, respective lawyers. Google Chief Executive Eric more than in recent quarters but The pair set up Palorva, a virtual com- Schmidt championed “interactive down from years of double-digit pany that had a website with the motto: video ads,” which he said are on the gains. “Business is the art of extracting money way. Such ads, which could appear Media executives say they are in- from another man’s pocket without resort- anywhere on a Web page, not just trigued by new ad offerings, but ing to violence.” inside a video, would be like mini- they appear reluctant to put all The duo also had business cards present- Web pages. That means they could their faith in online advertising. ing Ms. Mikhael as a public-relations man- allow Web users to watch a video, Last week Mr. Schmidt answered ager and Mr. Falciani as a sales manager, leave a comment and see real-time a question from a reporter about but under the alias of “Ruben Al-Chidiack.”

updates within the ads that are Reuters whether Google’s YouTube unit The website claimed it could help banks re- more customized to their interests. Google co-founder Sergey Brin, left, talks to reporters, as co-founder Larry Page, center, and CEO Eric Schmidt listen. would launch a product that would cruit new wealthy customers by combing Mr. Schmidt said in an interview allow content owners to sell their through public data bases. Thursday that he has pushed about reinventing local advertising. tendees Saturday in a plum spot re- But Quantcast is among several content to consumers once and have In February 2008, Mr. Falciani and Ms. Google’s ad teams to think about the Groupon’s strategy is to let busi- served for the relatively small num- companies trying to persuade mar- it accessible across a range of de- Mikhael flew to Lebanon, where according potential for such ads, which he nesses design an offer, such as half- ber of entrepreneurs invited to the keters they can get a better return vices, such as computers and mobile to their lawyers they met Beirut representa- suggested would eventually become price theater tickets, and email it to conference. by buying online, mobile and even, phones, Mr. Schmidt said the com- tives of five banks: BNP Paribas, Société prevalent, but he didn’t comment on consumers together with commen- Others ventures are focusing on eventually, TV ads targeted at spe- pany had looked at that model care- Générale de Banque au Liban, Blom Bank, any specific plans for them. tary, such as a review of the play. persuading media companies to cific types of consumers, such as fully. Audi Bank and Byblos Bank. Helping small businesses reach Mr. Mason said he believes of- change how they buy and sell online people who have bought certain But, he said that rather than According to officials at the banks famil- new customers is one of the key fering customers a daily deal, and ads, hoping to expand the market by products or visited certain websites. paying for content directly, Google iar with the meetings, Mr. Falciani, who was markets being chased by big Inter- packaging it with related commen- brokering ads across a broader “Everyone sees the promise,” Mr. prefers to help media companies still employed by HSBC, introduced himself net companies like Google, Yahoo tary from Groupon’s staff of 70 full- range of websites, or even media. Feldman said. “They realize that the earn money through ads. as Ruben Al-Chidiack and made a short Inc. and AOL Inc., as well as start- time writers, is a more compelling Konrad Feldman, CEO ad-tech- traditional ways don’t scale.” “There is a revenue valley from marketing pitch. He evaded questions about ups like Groupon Inc. approach than traditional banner nology company Quantcast Corp., The tech companies are trying to the old model to the new model,” he how he obtained the data he offered to sell, Andrew Mason, CEO and founder ads, which he said are forgettable said in an interview Friday that the win over two different groups said, describing how content owners these people said. of Groupon, whose email newslet- and don’t help a businesses win loy- media bosses attending the Sun Val- within media companies. They in- would risk losing revenue through Mr. Falciani, in the interview, said the

ters offer subscribers a heavily dis- alty. ley conference are accustomed to clude business-development special- such a system. “We could bridge idea of marketing data was just a cover. He Agence France-Presse/Getty Images counted, or even free, deal of the “We look at Groupon as the evo- buying ads through a broadcast ists skeptical that they can make that model by writing very large said he was acting on a request by a foreign day on goods or services, said Grou- lution of the ad” format, said Mr. model, purchasing blocks of TV significant money by turning over checks, but we have chosen not to intelligence service—which he declines to cales, or DNEF, France’s top financial-inves- he would come back after the Christmas pon is talking to media companies Mason, who spoke to conference at- shows or websites. their content to Web services solely do that.” name. He says his assignment was to iden- tigation body. break, but hasn’t returned to Switzerland Mr. Falciani admits tify potential enemies of HSBC clients, DNEF investigators understood that Mr. since. within or outside the bank. Falciani could lead them to a mother lode of In January 2009, acting on a request being in possession of “When we went to Lebanon, I was on a financial records that France could use to from the Swiss prosecutor, Nice prosecutor mission,” he said. prosecute tax dodgers, the French officials Thierry de Montgolfier searched Mr. Fal- China renews Google’s license to use Web address Through her lawyer, Thierry Montger- say. But DNEF faced a legal obstacle: how to ciani’s parents’ house on the French Riviera, the data and confirms mont, Ms. Mikhael said she didn’t know use HSBC’s data without infuriating Swit- where he was staying. There, the police how Mr. Falciani had gotten hold of the zerland? seized a smart phone, a notepad, a laptop contacting BY LORETTA CHAO The decision preserves the Google’s Chinese site, google.cn, Drummond, said on a company blog. including its Gmail email service re- data he displayed in Beirut. Ms. Mikhael A door would open eventually for the and a personal computer, the prosecutor AND AMIR EFRATI search giant’s toehold in the country now requires visitors to click to be “What’s interesting is that the main popular, analysts said. simply designed and registered the Palorva French. One of the Beirut bank branches said. with the most Internet users. But it redirected to the Hong Kong site for Chinese government would make And while Google doesn’t censor website, her lawyer said. Ms. Mikhael that Mr. Falciani and Ms. Mikhael visited “Before deciding whether to hand all this governments about it. Chinese authorities said they re- won’t end the uncertainty around Web searches. Recently, the com- this decision after a private com- its Hong Kong site, the government thought she was working on an indepen- posted an alert of suspicious activities on a to the Swiss, we had to look inside,” Mr. de newed a license needed by Google Google in China because Beijing can pany has made several services ac- pany challenged its censorship pol- takes measures to limit access to dent project during the trip to Lebanon, the website managed by the Swiss Bankers As- Montgolfier said. But he and Ms. Inc. to continue using its Chinese revoke the license at any time or icy before the eyes of the Chinese certain content on the Internet. lawyer said. sociation. The notice said someone had With Mr. Falciani’s help, French authori- Web address, despite months of ten- block access to Google’s services. people,” said Xiao Qiang, a journal- Other Google services, such as video After a week in Lebanon, Mr. Falciani and been trying to sell “data on clients of vari- ties found thousands of accounts and bank- Mikhael both deny sions over censorship requirements. “Our operations in China are The move won’t end ism professor at the University of site YouTube, have long been Ms. Mikhael returned to Geneva. In March ous Swiss banks.” transfer details. Stripping out names that The Ministry of Industry and In- completely at the discretion of the California-Berkeley. “This is the be- blocked by China. 2008, they appeared to shift direction, Swiss Federal Police, who monitor the appeared twice or couldn’t be read, the files formation Technology approved the Chinese government. I don’t want uncertainty around Google ginning” of what will be a protracted Separately, Australia’s privacy sending anonymous emails to European site, opened a probe and soon homed in on contain data on about 79,000 clients and breaking any laws. The renewal application by the operator anyone to be confused about that,” in China since the license struggle between Google and China,” regulator Friday said Google had vi- governments, according to people familiar Ms. Mikhael, who had traveled to Lebanon 20,000 companies, according to the Nice of Google’s China website, Beijing Google Chief Executive Eric Schmidt said Mr. Xiao, who previously ran a olated a national privacy law but with the Swiss probe. using her real identity. prosecutor. The list includes more than emails sent regarding Guxiang Information Technology said at a news conference Thursday. can be revoked at any time. human-rights group. the government couldn’t impose a A message sent to Germany’s secret ser- On the morning of Dec. 22, 2008, soon 8,000 French, about 1,500 Americans and as Co., after the company pledged to Google in March began redirect- It is unclear whether Google, sanction. Law-enforcement bodies vice, Bundesnachrichtendienst, was signed after she told HSBC she planned to end her many British residents, according to Mr. de “abide by Chinese law,” and “ensure ing queries from mainland China to which handled 31% of searches in across the world have been investi- by Ruben Al-Chidiack and claimed access to contract with the bank and return to Leba- Montgolfier. He promptly shared the trove the data didn’t ask for the company provides no law-break- a version of its search engine it cessible from google.cn itself, in- China in the first quarter according gating Google’s disclosure that its a list of 127,311 customers, with “all the cli- non, Swiss police took her into custody for with France’s tax authority. ing content,” according to a report doesn’t censor hosted in Hong Kong. cluding its music-search and to Analysys International, will lose Street View vehicles had inadvert- ents’ details of the HSBC Private Bank SA.” questioning. Ms. Mikhael instantly un- François Baroin, who became France’s money. He says his goal by China’s state-run Xinhua news But Google stopped the automatic translation services. Web traffic or advertisers. ently collected personal data from Mr. Falciani said he approached “several” masked Mr. Falciani as the mysterious Mr. budget minister in March, said recently that agency on Sunday. The report said redirect two weeks ago after the “We look forward to continuing Google has lost some search unprotected wireless networks. foreign services as part of his attempt to Al-Chidiack, her lawyer said. inquiries launched on the basis of HSBC wasn’t to profit from Guxiang also “accepted that all con- Chinese government indicated it to provide Web search and local share in China to rivals such as —Kersten Zhang expose security weaknesses in bank com- Later that day, Swiss police handcuffed data had allowed his ministry to recoup €1 tent it provides is subject to supervi- wouldn’t renew its license if the products to our users in China,” Baidu.com Inc. during its standoff and Jessica E. Vascellaro puter systems. He said he also instructed Mr. Falciani at his HSBC office, seized his billion in unpaid taxes and penalties. sion of government regulators.” company continued the practice. Google’s chief legal officer, David with Beijing, though other services contributed to this article. Ms. Mikhael to contact Germany and the work computer and searched his Geneva HSBC disputes the number of clients the data, but rather to U.K. home. outed by the French. It says the data are for Through her lawyer, Ms. Mikhael denies In a bedside cupboard, they found pieces 24,000 past and current clients. HSBC cur- expose secrecy in sending messages to foreign governments, of paper with the addresses of police con- rently counts about 100,000 private-banking INDEX TO BUSINESSES claiming Mr. Falciani often used her com- tacts in France and Germany, according to clients world-wide. puter. U.K. authorities said they found no people familiar with the Swiss probe. Mr. de Montgolfier, who keeps Mr. Fal- banking practices. Businesses Alstom...... 18 Birinyi Associates...... 21 CME Group...... 26 Ford Motor...... 23,31 Michelin...... 23 Sony...... 26 record of having received emails about After being interrogated for hours, Mr. ciani’s computers in a safe, said he wasn’t This index of businesses mentioned in American Electric Power Blom Bank...... 15 Covidien...... 36 Gazprom...... 36 Microsoft...... 27 Standard Chartered...... 26 HSBC data. German authorities declined to Falciani was released on the condition that interested in tracing the origin of the data. today’s issue of The Wall Street Journal ...... 18 BMW...... 23 Credit Suisse Group...... 24 Google...... 22,31 Morgan Stanley...... 18 Standard Life Investments comment. he return the next day for further question- “What matters to me is whether the data is intended to include all significant AOL...... 22 BNP Paribas...... 15 Daimler...... 23 Google.org...... 18 Nike...... 31 24 But France engaged Mr. Falciani. In 2008, ing. Instead, he rented a car and drove to are genuine and reliable,” he said. “So far, I BP...... 1,6,36 Groupon...... 22 Statoil...... 18 reference to companies. First reference Apache...... 1,6 Darden Restaurants...... 17 Nissan Motor...... 23 Mr. Falciani says he met several times with France, according to Mr. Falciani and people have no doubt that they are both.” Brevan Howard Asset Hewlett-Packard...... 21 UBS...... 14,24 to the companies appears in bold face Apple...... 21,25 Deloitte...... 4 Novatek...... 36 French officials, including with a psycholo- familiar with the Swiss probe. Management...... 24 HSBC Holdings...... 14,26 Unigestion Holding...... 10 type in all articles except those Deutsche Bank...... 24 NYSE Euronext...... 26 Audi Bank...... 15 BrightSource Energy...... 18 Hyundai Motor...... 23 VantagePoint Venture gist who probed his personality. He says he Once in southern France, he said, he im- WSJ.com on page one and the editorial pages. Baidu.com...... 22 Byblos Bank...... 15 Digital Power Capital...... 18 Intel...... 26 PepsiCo...... 31 Partners...... 18 provided documents to help establish that mediately began downloading the HSBC Barclays...... 24 Chevron Technology EV3...... 36 International Battery...... 18 Quantcast...... 22 Wexford Capital...... 18 he was a “credible source.” data he had stored on remote servers and ONLINE TODAY: Watch an interview with Beijing Guxiang Ventures...... 18 Exxon Mobil...... 36 Logitech...... 26 REM Engineering...... 19 XTO Energy...... 36 After checking Mr. Falciani’s background, saved them on a computer. Nice prosecutor Thierry de Montgolfier at Information Technology China Unicom (Hong Kong) Facebook...... 31 London Stock Exchange Renault...... 23 Yahoo...... 22,31 French officials say the police referred him “I needed to prepare my defense,” he WSJ.com/World Co...... 22 25 Fibrowatt...... 19 ...... 24 Saint-Gobain...... 23 Yum Brands...... 17 to the Direction Nationale d’Enquêtes Fis- said. He says he told Swiss authorities that 14 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 23 THE BIG READ BUSINESS FINANCE Market view: Only a slow recovery

Mass leak of large client data BY DAISY MAXEY sets, also expressed skepticism future we’re going to be in a subpar 38% expect European stock markets they saw currencies as riskier, while about commercial real estate. environment,” said Marc Harris, co- to rise, and 40% indicated they ex- 51% indicated corporate debt was Money managers world-wide are The data on asset managers’ head of global research at RBC Capi- pect European stock markets to de- seen as riskier. optimistic about prospects for the views was compiled as part of a tal Markets. That translates into cline in the period. Yet 38% of respondents indicated U.S. and Asian stock markets over larger survey of 440 senior corpo- what is being seen in the stock mar- But Mr. Harris said it is impor- currencies was the asset class they the next 12 months, but they never- rate and finance executives world- ket, he said. “At the first sign of tant to note that the asset managers would most likely increase over the theless project a slow recovery in wide conducted April 28 to May 25. economic numbers being a little dis- chose those markets over others, next year in light of the sovereign- rattles Swiss banking world global economic growth, according Global economic growth over the appointing, it’s really taken the mar- and aren’t wildly optimistic. “People debt crisis, while 37% chose stocks to a new survey. next two years will resume, but at a ket down by a significant degree.” are not jumping and trampling over and 35% chose commodities. Just The impact of inflation is a fear, pace lower than that of the 2003 to U.S. markets will improve in the each other to get their hands on U.S. 17% indicated they plan to increase BY DAVID GAUTHIER-VILLARS indicated the 102 global mutual- 2007 period, nearly half of the year ahead, 66% of respondents in- assets; it’s more that people have to their allocation to U.S. Treasurys, Two employees of HSBC AND DEBORAH BALL Data dive fund, hedge-fund and private-equity money managers surveyed indi- dicated. Just 19% indicated they ex- be invested and where do they feel and 21% said they plan to increase Nice, France managers who responded to the cated. Just 11% indicated they ex- pect U.S. markets will move lower. less exposed, where do they feel non-U.S. sovereign debt allocations Countries that have acknowledged requesting or receiving a trove of leaked HSBC data from are at center of controversy survey, commissioned by RBC Capi- pect a prolonged period of economic Still, 57% indicated they believe that safe to be,” he said. in the coming year. French authorities. HE anonymous emails carried a tanta- tal Markets, the corporate and in- weakness and 5% that they expect the risks associated with stocks in Asked to evaluate how their per- Inflation poses a greater threat over use of data to bring lizing subject line: “Tax evasion: cli- U.K. vestment banking arm of Royal growth at the same or higher levels general is higher this year than last. ception of risk has changed over the to portfolio performance than defla- T ent list available.” The messages, sent 1,500 March 2010: U.K. tax authorities ask the French to forward details of British Bank of Canada, and released Mon- than from 2003 to 2007. Asian stock markets will rise past year, 57% of respondents indi- tion, 45% of respondents indicated. tax evaders to justice two years ago to tax authorities across Eu- taxpayers with HSBC offshore accounts in Switzerland. day. The respondents, who manage “The majority of people certainly over the next 12 months, 69% of cated they consider stocks to be ust 34% indicated they expect defla- rope, made an audacious claim: The sender Records French about $4.1 trillion in combined as- understand that for the foreseeable those surveyed believe, but only riskier this year than last, 56% said tion to be the greater threat. authorities say could provide a large client list of a Swiss- they have based private bank, plus access to its com- puter systems. The emails were sent to Ger- Italy many’s secret police, the French police and May 2010: Italian tax police say they have received details of Italian the U.K.’s tax authorities and foreign minis- • • account holders at HSBC with a total of nearly $7 billion. Italian authorities Futures Commodities Options try. New Detroit takes shape begin sifting through the lists in search of tax dodgers. The emails came from the computers of 7,000* Stocks • Forex • Bonds • Funds Hervé Falciani and Georgina Mikhael, two employees of HSBC Holdings PLC, people Spain Over 80 market centers familiar with the matter say. The caper has landed the two at the center of a contro- June 2010: Spain says it is investigating accounts held by Spaniards at in South India’s Chennai in 19 countries versy over whether governments should use 3,000* HSBC in Switzerland for possible tax fraud. Tax authorities say they have data obtained by dubious means to bring contacted the account holders and asked them to clarify whether the BY ERIC BELLMAN tax evaders to justice. money is tax-compliant. In high gear from one account HSBC officials allege that Mr. Falciani CHENNAI, India—This Indian India’s city of Chennai is booming thanks to the auto business copied thousands of files of wealthy clients *HSBC contests the figure, saying that the number of any accounts coming from any single country is no more than about 2,000. port city, built around a former Brit- Source: WSJ research Investments Employees Annual Capacity* of its Swiss private-banking arm. Swiss au- ish fort, in many ways resembles Hyundai $2billion thorities are investigating whether Mr. Fal- Detroit circa 1910. 10,000 650,000 Vehicles ciani, 38 years old, stole bank records and The metropolis of about five mil- Ford $950 million 200,000 Vehicles violated banking secrecy laws. authorities of breaching banking secrecy paid €4.2 million ($5.3 million) to a bank lion people is booming as scores of Mr. Falciani, a Franco-Italian computer and stealing banking records. Ms. Mikhael employee to buy stolen data from a Liecht- international car makers and suppli- 4,000 Nissan/Renault engineer, and Ms. Mikhael, 35, went on a is being investigated on similar preliminary enstein bank to chase tax evaders. ers have set up shop. Ford Motor $950 million 400,000 Vehicles border-hopping odyssey to offer the data to allegations, Swiss prosecutors say, which Mr. Falciani was 28 when he joined the Co., Hyundai Motor Co, Nissan Mo- 3,000 governments and other banks in Europe and she denies. French authorities aren’t inves- private banking arm of HSBC in his native tor Co., Renault SA, Daimler AG Mercedes/Daimler $950 million 72,000 Trucks the Middle East, according to people famil- tigating the two. Monaco in 2000. He held a degree in com- and BMW AG all have converged 600 iar with the investigation. To do that, they Switzerland strenuously objects to for- puter programming and wrote security soft- here. Michelin $850 million Tires Production has not started yet allege, he and Ms. Mikhael set up a virtual eign authorities using the HSBC data to ware for the bank. He was promoted several They are spending billions of 1,500 company, with Mr. Falciani using an alias. pursue tax dodgers and has warned it won’t times and, in 2006, he was transferred to dollars to make Chennai one of the Saint-Gobain $330 million 2 million Window Sets US Stocks Mr. Falciani admits being in possession world’s biggest hubs of small cars cooperate with any investigation stemming HSBC’s private banking headquarters in 300 of the data and confirms contacting govern- from what it regards as stolen data. An Geneva to improve database systems and for export as well as for increasingly Source: companies; *Includes planned capacity expansion USD 0.005 or less per share (all-in) ments about it. But he and Ms. Mikhael HSBC spokesman said the bank had no com- security. affluent Indians. Soon, the city will both deny breaking any laws. The emails ment on the use of the data by foreign tax Around that time, according to HSBC turn out close to 1.5 million autos a US Stock Options1 sent regarding the data didn’t ask for authorities. and people familiar with the Swiss probe, year, more than any single U.S. state close to $1 billion, deploying pro- rean families grilling beef at their money. He says his goal wasn’t to profit France has said it would use the data to Mr. Falciani copied thousands of files onto made last year. duction-line technology it doesn’t tables. $0.15 - $0.70 per contract from the data, but rather to expose secrecy pursue tax cheats. “We obtained those data personal storage devices and began consid- Car-parts suppliers also are plac- even use in the U.S., including car- The student population at the (plus exchange & regulatory fees) in banking practices. in a legal manner,” then-budget minister ering ways to monetize the information. ing big bets on the city, formerly painting robots and a deep-water Chennai American School has qua- “I am not a Robin Hood, I’m not a mer- Eric Woerth said in February. “France isn’t Mr. Falciani said that in Monaco and known as Madras. Tire company Mi- testing pool to ensure cars won’t drupled to close to 800 as new pu- European Stocks (Xetra/Euronext) cenary,” Mr. Falciani said in an interview. “I on the line for fraud, tax evaders are.” Geneva, he copied data onto personal com- chelin SA and window maker Saint- leak during monsoon floods. pils have arrived from the U.S., Ja- acted like a citizen.” In a twist, it is the French government puters and remote servers as part of his Gobain SA, both of France, are set- Michael Boneham, the Chennai- pan, Europe and Korea. A sprawling Min. EUR 1.25 Whatever the case, his plan rocked the that is now making the data available, routine work, essentially for backup pur- ting up some of their biggest facto- based managing director of Ford’s amusement park across the street (plus exchange and regulatory fees) banking world. promising to hand it over to other govern- poses. He denies that he considered selling ries globally in Chennai. Germany’s India operations, said educated la- from the Hyundai factory, a French Copies of the HSBC data did wind up in ments in pursuit of tax cheats. or tried to sell data. HSBC says bank policy Daimler, meantime, is building a bor, a consistent industrial policy, bakery, evangelical Korean churches Futures SMI2 the hands of French tax authorities, who In June, Spain’s tax authorities said they forbids employees from storing client data multimillion-dollar test track. access to a port and government fi- and Japanese grocery stores have are now using it to chase alleged tax dodg- had received some of the HSBC data from on personal computers. The investment has generated nancial incentives played a role in popped up in recent years. Min. CHF 0.35 ers with money stashed in Switzerland. The France and had started examining it. In In early 2007, Mr. Falciani began consult- jobs for more than 200,000 people luring the U.S. car maker to the city. “The city has really changed,” (plus exchange fees) French say they didn’t pay for the trove, May, Italian tax officials said they received ing experts on how to set up a company to and accounts for 12% of the eco- “India is now on the radar as one said R. Sethuraman, the Chennai- which includes the names and account de- from the French details on some 7,000 Ital- sell customer bank data, according to peo- nomic output of Tamil Nadu state. of the two most important markets based senior vice president of fi- Forex tails of thousands of customers from 180 ian account holders, involving nearly $7 bil- ple approached by him. During these meet- The kind of manufacturing being for Ford strategically world-wide,” nance and corporate affairs at countries. lion in assets, and are sifting through the ings, Mr. Falciani claimed the data came done in Chennai is what India needs the other being China, he said. Hyundai’s India unit. “We used to As low as ½ pip wide spreads The French acquired it when police records. from his expert mining of open, public to bridge the gap between its agri- Ford, among the first foreign only have South Indian food.” (plus a transparent low commission3) raided Mr. Falciani’s home in southern The size and scope of the HSBC case is sources, these people said. cultural work force, which makes up firms here, recently announced its New malls and apartments are France 18 months ago at the behest of acutely alarming to Switzerland’s $2 trillion “Yet, he said he needed a helping hand 60% of its population, and high-end best-ever quarter in India. Sales being built to serve the growing Swiss authorities, who had launched an in- offshore banking industry. Swiss bank-se- to understand whether his data were legal,” services industries, such as out- more than tripled in the second middle class of auto workers. Successful traders and investors understand vestigation into allegations of violations of crecy laws date to 1934, when the country said Guillaume Brachet, a Monaco-based fis- sourcing, that employ relatively few. quarter from a year earlier to The state’s technical institutes, bank secrecy. France sent copies of the data made disclosing bank data a crime. “If gov- cal consultant who dealt with Mr. Falciani’s Unlike China, India hasn’t been 22,858 vehicles thanks to its re- known for producing computer pro- that superior technology and low trading costs to Switzerland, but kept the original files ernments are in the market of buying illegal request. “Each time I asked how he got able to attract as many foreign in- cently expanded Chennai facilities. grammers and engineers, are hold the key to greater returns. for itself, to pursue possible tax cheats. data, that changes the world,” UBS Chief them, he grew nervous, and I couldn’t catch vestors to set up factories because Tamil Nadu has been better than switching focus to skills useful at Mr. Falciani, who remains in France, de- Executive Oswald Grubel said recently. his explanations.” of bureaucratic barriers and volatile most Indian jurisdictions at provid- car makers. nies preliminary allegations by the Swiss In another case two years ago, Germany Mr. Falciani says he and Mr. Brachet politics. ing the land, roads and electricity The growth of the car industry But Chennai’s boom is a sign that that the car industry needs. It also hasn’t been without problems. To learn more, visit us online India can create a productive envi- set up a single office for companies Hyundai unions have staged several Cracks in Swiss bank secrecy ronment when economic circum- to obtain the dozens of government strikes to demand better treatment www.interactivebrokers.com stances are right and demand is approvals and licenses required to of workers, traffic has become more June 2008- April 2009 September 2009- April 2010 January 2010 March 2010 there. India’s economy is expected start or expand a business. congested and rents in some of the August 2009 The OECD puts Switzerland on a Italy launches a tax amnesty A confidential informant offers to HSBC alleges a ‘serious to grow 9% this year and Tamil Big projects in India too often best neighborhoods are now out of Nadu has worked to minimize barri- run into problems when local gov- reach of the average Indian. so-called gray list of aimed at luring tax dodgers to sell to Germany stolen Swiss data theft’ by former U.S. authorities accuse UBS of ers to investment. ernments change parties. But when But Chennai’s production capac- Interactive Brokers having helped thousands of uncooperative tax havens, raising come clean by paying a very low account data containing details employee Hervé Falciani of Hyundai has invested $2 billion the state government was taken ity is set to rise even further. Ja- American taxpayers evade taxes the specter of sanctions against penalty on offshore accounts. The on alleged German tax cheats. account details of 24,000 here, and recently expanded to be over by the DMK from the AIADMK pan’s Nissan just started making The Professional’s Gateway to the World’s Markets by hiding money in secret Swiss the Alpine country. The Swiss move spurs Italians to declare The price tag: €2.5 million. current and former clients of able to produce 650,000 cars a year. in 2006, auto executives said they cars here in May after investing accounts. After a bruising battle, government subsequently agrees nearly €100 billion, with its Swiss private bank. Mr. The South Korean company was at- noticed no change in how they were close to $1 billion, and it plans to Interactive Brokers (U.K.) Limited is authorised and regulated by the Financial Services Authority. FSA UBS agrees to hand over the to relax bank secrecy laws. two-thirds of that from Falciani denies having stolen tracted not only to inexpensive fac- treated. ramp up to more than 400,000 cars register entry number 208159. [1] $1.00 minimum on all orders, no extra ticket charge. No technology tory-floor labor, but also to an abun- The influx of foreigners and for- a year. Its Indian-made subcompact, surcharges. [2] Non-member regulatory fees are applied, unless a customer is pre-qualified by IB. Contact names of 4,450 U.S. taxpayers to Switzerland alone. the data. your sales person for more information. [3] Commission is 0.1 to 0.2 basis points * trade value. USD 2.50 dance of low-wage engineers to eign money is altering this historic the Micra, will hit roads around the minimum commission on forex. Options and Futures are not suitable for all investors. The amount you the IRS by August 2010. program the robots that help churn city. In the largely vegetarian region world in October. may lose may be greater than your initial investment. Before trading options read the “Characteristics and Risks of Standardized Options”. Before trading futures, please read the CFTC Risk Disclosure. For a Source: WSJ research out vehicles. there is little meat for sale. But the —Arlene Chang contributed copy of either disclosure, call 2156 7907. 07IB10-324 Across town, Ford has invested Seoul Restaurant is packed with Ko- to this article. 24 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 13 BUSINESS FINANCE OPINION Anshu Jain now leads the FN100 Iraqi Electrical Access Can’t Wait

BY HAMISH H. MCNINCH But progress in the last 18 ment, in perhaps its last substan- In another year of flux, Financial News’s list of top players sees plenty of exits and entrants months has not been sustained, tial gift to the Iraqi electricity Two senior resignations will and many Iraqis still get less than ministry, has commissioned an Financial News named Deutsche have caught the keen attention of six hours of electricity per day. electricity master plan. Bank AG’s Anshu Jain to the top of From 11 to 40 Gen. David Petraeus last month. Mr. Waheed’s resignation came Appointing “best of class” its annual FN 100 list of the most 11. Stuart Gulliver, CEO of global Clearly the case of Gen. Stanley only a short time before he would consulting engineers to oversee influential people in European fi- banking and markets, HSBC McChrystal has had a bigger and likely have been replaced anyway, the construction projects is a pri- nancial markets. Holdings PLC more immediate impact on Gen. amidst the current efforts to ority. This, and a willingness to Over three months, Financial Petraeus’s life. But he will also form a new Iraqi government. Yet take heed of the expert advice 12. Michael Dobson, CEO, News drew up lists from 10 catego- have noted with concern the res- Iraq’s leadership still does not that is still available to them, Schroders PLC ries: chief executives, regulators, in- ignation of Karim Waheed from seem to have grasped the gravity would allow an Iraqi government vestment banking, mergers and ac- 13. Nout Wellink, chairman, Basel his post as minister of electricity of the electricity situation. Fol- to make a dramatic improvement quisitions, capital markets, fund Committee on Banking Supervision in Iraq. lowing Mr. Waheed’s resignation, in the country’s electricity supply management, hedge funds, private In successfully dealing with Prime Minister Nouri al Maliki by the summer of 2012, and could 14. Miles Millard, global head of equity, pensions and market infra- the Iraq insurgency, it was knowl- gave a press conference where he conceivably make Iraq a net ex- debt capital markets, Deutsche structure. All nominees had to be edge and understanding of mat- attempted to explain the size of porter of electricity by 2020. Any Bank based in Europe, the Middle East or ters other than the purely mili- the problem the country faces, Associated Press government that committed itself Africa, and FN excluded central 15. Michael Platt, co-founder, CEO tary that frequently allowed Gen. and reportedly declared that Baghdad has wasted too much time in untangling supply problems. to such a program and then bankers and those in government and head of trading, BlueCrest Petraeus to surprise visitors. He things wouldn’t improve for two achieved it (and it is entirely (except in a regulatory capacity). Capital Management correctly identified the para- years while “the power stations power plants with fuel; and with very contractors he had to rely achievable) should be guaranteed Candidates were then assessed for mount importance of electricity being constructed by GE and Sie- a general unwillingness to main- on. Despite being a highly quali- a landslide at the next election. 16. Hector Sants, CEO, Financial influence over their area, leadership for the well-being of Iraqis and mens were completed.” tain or improve the plants Iraq fied engineer in his own right The stimulus that such a plan Services Authority within their sector, performance how an increased supply would The even more grim truth is already has, there is little pros- and having a genuine desire to would give the economy should over the past year, and their capac- 17. Carsten Kengeter/Alex Wilmot- reduce support for the insurgency that neither GE nor Siemens are pect of progress. improve conditions for the Iraqi be enough to pay for all the ity to shape their business and/or Sitwell, co-CEOs, UBS Investment while stimulating the economy at building power stations in Iraq. Meanwhile the people of Iraq people, he possessed neither the work. industry over the year to come. The Bank the same time. Both companies have significant have just struggled through the organizational, managerial nor Mr. Waheed was repeatedly list was then whittled down to 100. orders for generators from the hottest June for many years. And, leadership skills to succeed. told this but did not, or could 18. Martin Halusa, CEO, Apax Only two-fifths of last year’s government. But the cost of the in a country where only about Nevertheless there is still po- not, act on it. And Mr. Maliki’s Partners FN100 kept their places on this, the Adequate power generators takes up only about 7,000 megawatts of electricity are tential for a turnaround if a new government failed to listen to sixth annual list. A year earlier, only 19. Bjarne Graven Larsen, chief 50% of the total cost of a power generated daily against a demand minister is willing to make the those who told them that Mr. Wa- 25 people managed to return to the investment officer, ATP for civilians will be key to station, and the generators are at least double that, the equiva- right choices. Generators (and a heed was not going to succeed if list. Financial News, like The Wall the quickest part to procure. The lent of 4,000 megawatts of gas huge number of them) are on or- he maintained his posture. 20. Michael Sherwood, co-CEO of maintaining stability Street Journal, is published by News construction and commissioning continued to burn in flares in the der. The Ministry of Oil’s an- Securing adequate electricity Goldman Sachs International Corp.’s Dow Jones unit. once U.S. troops leave. of the full power plants is the southern oilfields, while politi- nouncement to build modern re- access for civilians may be the

The biggest name to have Agence France-Presse/Getty Images 21. Michel Barnier, member of the real challenge. That’s a job for cians argued about whether to fineries in Iraq, its proposed single most important factor to dropped off the list is last year’s Anshu Jain controls the profit engine of Deutsche Bank and is considered the frontrunner to succeed Josef Ackermann. European Commission, Internal consulting engineers and con- ratify a two-year-old deal with increase in oil production, and keep peace and stability in Iraq No.1, Bill Winters, former co-chief Market and Services Gen. Petraeus and U.S. Ambas- struction companies, none of Shell to capture it. the recent announcement that the once U.S. troops start to draw executive of investment banking at prove the derivatives markets and cellor of the Exchequer, George Os- cording to Financial News and Dow sador Ryan Crocker constantly whom have yet been selected, let Mr. Waheed prevaricated and Shell gas-capture project will fi- down. In this vital mission, the 22. Peter Clarke, CEO, Man Group J.P. Morgan, who left in September. cut the risk of moral hazard in sys- borne, who has expanded the gover- Jones data comparing CEO pay with and forcefully reminded the Iraqi alone contracted, to start the postured, but failed to make the nally proceed, should eventually Iraqi government has lost too Although Mr. Winters remains po- temically important financial firms nor’s role. Under the coalition bank profits. Having weathered the 23. Johannes Huth, head of leadership of the importance of work. decisions and commitments nec- deliver copious quantities of much time already; they can’t tentially influential as a member of as part of its broader effort to pro- government’s plans, the Bank of financial crisis without state aid and Europe, Kohlberg Kravis Roberts electricity and the need to ex- Were all such contracts signed essary to transform Iraq’s elec- gas—the fuel of choice for elec- lose any more. the British government’s Banking mote financial stability. England will have power over reaping the benefits of buying Leh- pand its availability. Their advice tomorrow and work was to pro- tricity situation, despite the ad- tricity generation in Iraq. In the 24. Luigi de Vecchi, co-head of Commission, he is succeeded in the macroprudential, or system-wide, man Brothers’ North American oper- was backed up with resources, ceed at all possible speed, it vice and support he had from Kurdish region, two large power Mr. McNinch is a former British global investment banking, Credit No. 1 spot by h Mr. Jain, who se- 3. Brady Dougan regulation, while the new prudential ations, all eyes are on Mr. Varley’s technical advice, and unique pow- would remain a tall order to get Western experts. He was indeci- stations of the sort that are en- Army engineer, and served as Suisse cured that slot for the first time af- Chief executive, Credit Suisse regulator, headed by Hector Sants, next move. Could another big U.S. ers of influence. As a result the the additional power on the grid sive and mercurial, apparently in- visaged for the rest of country principle energy advisor to Coali- Group will be folded into the Bank of Eng- acquisition be in the cards? 25. Edouard Carmignac, founder system was stabilized, a growth within two years. With the Minis- capable of strategic thought, were built and brought on line tion military commanders in Iraq Under Mr. Dougan, Credit Suisse land. Mr. King also is a likely candi- and CEO, Carmignac Asset plan developed and, as generation try of Electricity’s siting plan still mired in detail, unwilling to dele- within 20 months using private in 2008 and 2009. He remains The FN100 continues to chart a steady course. date for the position of deputy gov- 9. Alan Howard Management output steadily increased, there subject to revision; with no deci- gate, and seemingly terrified of contractors, showing what can be engaged in helping Iraq to de- The bank was relatively untarnished ernor of the soon-to-be-created Co-founder, Brevan Howard Asset was great optimism. sions yet on how to provide the being taken advantage of by the achieved. And the U.S. govern- velop its energy infrastructure. 26. Franck Petitgas, global co-head The full list of the FN100, its by the financial crisis. With one of European Systemic Risk Council. Management LLP of investment banking, Morgan methodology and more-detailed the highest Tier 1 ratios around, the Mr. Howard, the low-profile Stanley profiles of its members can be bank is better placed than many ri- 6. Josef Ackermann trader at the helm of Europe’s larg- found at vals to handle the tougher capital Chief executive, Deutsche Bank est hedge fund by assets, is notori- 27. Rajeev Misra, joint global head www.efinancialnews.com/fn100 requirements likely to become the Deutsche Bank remains the Euro- ously risk averse. of fixed income, currencies and norm in the years ahead. However, pean benchmark in equity and debt He won’t ski during the peak commodities, UBS Mr. Dougan, who became CEO in capital markets, and it continues to season, and his traders operate Lessons From the Swedish Welfare State 28. Yngve Slyngstad, CEO, Norges ter five years of circling the top of May 2007, won’t be able to rest on impress rivals in mergers and acqui- within tight risk limits. Brevan Bank Investment Management the list. his laurels: Credit Suisse’s great ri- sitions. Mr. Ackermann, who has run Howard, whose flagship fund was up val UBS AG appears to have over- the bank since 2002, has maintained 19% last year and is now closed to 29. Viswas Raghavan, head of BY ANDREAS BERGH demonstrates We also investigated the claim icans pay others to do for them. 1. Anshu Jain come the worst of its problems and a steady hand on the tiller. Under new investors, is under pressure to international capital markets, J.P. AND MAGNUS HENREKSON that when gov- that Sweden is proof that big gov- Americans eat out more and hire Head of corporate and investment looks ready to steam ahead. his watch, the bank has yet to suffer prove that he can maintain its per- Morgan ernment ernment does not harm the econ- people to clean their homes, take banking, Deutsche Bank a compensation backlash. Succes- formance despite its size. The firm Americans are debating spending in- omy. While Sweden has done very care of their children, or mow 30. Simon Dingemans, managing Mr. Jain, Deutsche Bank’s heir 4. Keith Skeoch sion continues to be an issue: Mr. now manages over $30 billion, hav- whether to substantially expand creases by 10 well compared to other developed their lawns. Swedes, who have director in European M&A, apparent, has good reason to smile. Chief executive, Standard Life In- Ackermann agreed last year to stay ing benefited from inflows to blue- the size of their government. As percentage countries in the last 15 years, it less money to spend after taxes, Goldman Sachs Not only has his closest rival for the vestments Ltd. on until 2013 but has admitted to chip managers. Swedish economists who live in points of GDP, has also implemented sweeping will do such work themselves. top job, Michael Cohrs, dropped out As chairman of the Institutional being in “intensive talks” about Mr. Howard is the only non- 31. Edward Bonham Carter, chief the developed world’s largest wel- the annual pro-market reforms. Examples in- Raising government spending and of the running, he controls Shareholders’ Committee, an um- what happens then. He also will American to sit on the Investor Ad- executive, Jupiter Fund fare state, we urge our friends in growth rate clude a national system of free taxes would cause Americans to Deutsche’s profit engine and his pay brella body for insurers, pension have to manage the changed dy- visory Committee of the New York Management the New World to look carefully drops by 0.5 to school choice based on vouchers behave more like Swedes, hurting is roughly on a par with that of plans and asset managers, Mr. Ske- namic at the investment bank, for Federal Reserve, and last month before they leap. 1 percentage up through senior year of high the entire U.S. service sector and 32. Richard Boath, co-head of Chief Executive Josef Ackermann, och lit a fire under the institutional which Mr. Jain is taking sole re- moved from London to Geneva to Fifty years ago, Sweden and point. This school, a financially stable public throwing many—mainly working global finance, Emea, Barclays who is due to retire in 2013. This financial-services industry by calling sponsibility. avoid an increase in U.K. taxes. America spent about the same on may not sound pension system that can adjust class Americans—out of a job. Capital month, Mr. Jain became sole head of for an investigation into investment- their government, a bit under 30% like much, but payouts if contributions to the Many Americans argue that the corporate and investment banking banking fees. His demand helped 7. Oswald Grübel 10. Xavier Rolet 33. Eddy Wymeersch, chairman, of GDP. This is no longer true. In over 30 years system fall for some reason, and U.S. could safely increase its following the retirement of Mr. push the U.K. Office of Fair Trading Chief executive, UBS AG Chief executive, London Stock Ex- Committee of European Securities the years leading up to Sweden’s this would re- comprehensive tax reform that spending share from roughly 32% Cohrs. into a formal probe of fees paid by Whisper it discreetly, but it looks change Group PLC Regulators financial crisis in the early 1990s, sult in the loss has lowered marginal tax rates of GDP to 37%–38% of GDP. The companies seeking equity financing like UBS may have put the worst be- Mr. Rolet is embracing the government spending went as of trillions of enormously. evidence suggests otherwise. The 34. Baudouin Prot, chief executive, on the stock market. hind it and once again be about to daunting task of turning the London high as 60% of GDP. In America it dollars each Even if Sweden’s government U.S. needs to acknowledge the BNP Paribas 2. Mario Draghi Mr. Skeoch, who continues to ca- mount a significant challenge in Eu- Stock Exchange into a modern, tech- barely budged, increasing only to year in an still spends some 20% of GDP trade-off between government Governor of the Bank of Italy, jole his asset-management peers rope. When Mr. Grübel took over in nology-led business by cutting costs, 35. Dominique Cerutti, president about 33%. economy as more than the U.S. on average, the size and economic growth. A chairman of the Financial Stability into engaging as owners of compa- February last year, the bank was at reorganizing management and over- and deputy CEO, NYSE Euronext While America was maintaining large as Amer- Swedish economy is now much larger government sector may de- Board nies, earning praise in February a low ebb, hit by huge write-downs hauling technology. The LSE has the its standing as one of the world’s ica’s. more market oriented and govern- crease some economic inequality, 36. Jonathan Moulds, president of Mr. Draghi, a former Goldman from Lord Myners, then financial and departures of some of its most largest trading volumes in Europe wealthiest nations, Sweden’s To put it in ment spending is down by almost but will ultimately leave Ameri- Europe, Middle East and Africa, Sachs managing director, identified services secretary to the Treasury, senior executives. After a round of and the U.K., but new multilateral standing fell. In 1970, Sweden was personal 10% of GDP since the early 1990s. cans sharing smaller pieces of a Bank of America Merrill Lynch 2010 as a critical year for the FSB, also is extending Standard Life’s job cuts, the investment-banking di- trading facilities are attracting li- the fourth richest country in the terms, the av- Sweden’s recent growth is thus smaller pie. which was forged last year by the global reach, with strong new asset vision is gaining ground, and there quidity with faster systems and 37. Wim Borgdorff, managing world on a per-capita basis. By erage Ameri- the result of opting for free-mar-

Group of 20 industrialized and de- flows this year. are signs that client outflows at the lower fees. In response, Mr. Rolet partner, AlpInvest Partners 1993, it had fallen to 17th. Corbis can’s per cap- ket solutions instead of growing Mr. Bergh is an associate with veloping nations to replace the Fi- wealth-management unit have bot- bought Sri Lankan technology group This led us to ask whether ita income in government. By comparison, the the Research Institute of Indus- 38. Emilio Saracho, chief executive nancial Stability Forum and which 5. Mervyn King tomed out. Analysts still stress that MillenniumIT to replace the LSE’s Sweden’s dramatic increase in the most recent research, by Diego 2009 was $46,405. A dip of 1% in U.S. already has a relatively free trial Economics, Lund University of investment banking, Emea, JP coordinates at the international Governor, Bank of England there is a mountain to climb before trading platform. H size of government contributed to Romero-Avila in the European the economic growth rate (to 2% economy, and therefore does not and the Ratio Institute in Stock- Morgan level the work of national financial If the answer is 23, what is the the bank regains normality. e acquired Turquoise to help its sluggish growth. Our research Journal of Political Economy from 3% for example) would mean have as much potential for further holm. Mr. Henrekson is the CEO authorities and international stan- question? That was the riddle Bank provide a multi-asset, pan-European 39. Pierre-Henri Flamand, founder, shows that it did. (2008) and by Andreas Bergh and an individual income loss of $464 market-based reform in order to of the Research Institute of Indus- dard-setting bodies. It is pressing of England Governor Mervyn King 8. John Varley trading platform, using aggressive Edoma Capital We surveyed the existing liter- Martin Karlsson in Public Choice in the first year. Over 30 years, a offset the negative growth effects trial Economics in Stockholm. ahead with ambitious regulatory ef- posed at the annual Bankers’ Dinner Group chief executive, Barclays fees to attract high-frequency trad- ature looking at the trade-offs be- (2010) find a negative correlation one percentage point difference in of a larger government. They are the authors of “Govern- 40. Giuseppe Monarchi, head of forts to bolster bank capital and li- at Mansion House. The answer, he PLC ers, and is challenging Eurex and tween government size and eco- between government size and eco- the growth rate translates to Also, in Sweden, high personal ment Size and Implications for the mergers and acquisitions quidity standards, improve incentive later revealed, is the difference in John Varley was the best-value NYSE Liffe’s dominance in European nomic growth throughout the nomic growth in rich countries. roughly $354,000 in lost income tax rates encourage people to do Economic Growth” (AEI Press, group, Emea, Credit Suisse structures and transparency, im- age between Mr. King and the Chan- banking chief executive last year, ac- exchange-traded derivatives. world. While results vary, the The weight of the evidence per person. work around the house that Amer- 2010). 12 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 25 OPINION BUSINESS FINANCE South Africa: After the Vuvuzelas Go Quiet How cellphones generate mixed signals

BY MATTHEW KAMINSKI 2008. Nationalize the mines and nation. Clint Eastwood’s “Invic- example,” Simon Saunders, capital will flee. tus” depicted (and slightly exag- [ The Numbers Guy ] A tiny jolt director of technology for Real Johannesburg Helen Zille, the leader of the gerated) the importance of the Wireless Limited, a consultancy in Cellphone calls require so little Rejoice, the Beloved Country, opposition Democratic Alliance 1995 Rugby World Cup in South BY CARL BIALIK Pulborough, U.K., says of Apple’s toot your own vuvuzela. and premier of the Western Cape, Africa, won by the host. The old additional power to connect to a misleading signal bars. He says he Their beloved Bafana Bafana offers this nightmare scenario: “A ruling Afrikaners saw the nation More bars in more places? As wireless network that it would take understands why a cellphone didn’t make it past the first closed crony society for comrades embrace their favorite pastime, Apple Inc.’s blunder with its at least 10 billion such connections maker would show the maximum round, but South Africans con- only,” as in so many other African helping make them feel part of iPhone signal-strength display to power a 100-watt light bulb. number of bars for all but the sider themselves the winners of states. this new construct. In this World revealed, the number of bars on a Power, in watts weakest signals. “For the majority the 2010 World Cup. “We wanted But scratch a little, and Ms. Cup, black, white and in-be- phone has more to do with of that range, everything sounds Cellphone, 10 billionth to show Africa could do it,” Presi- Zille, the daughter of German im- tween—including in diehard Afri- handset manufacturers’ whims the same to you,” Dr. Saunders strong signal ofawatt dent Jacob Zuma told a lunch migrants and a former anti-apart- kaner areas—proudly flew the na- than it does with hard says. The problem with that crowd of investors Tuesday, “to heid activist, gives reasons to tional flag and cheered their calculations about network Toaster oven 1,225 approach is that the consumer challenge all the stereotypes.” think the World Cup glow may team. This was new. “It’s a good coverage. wouldn’t know that a call is at Laptop 120 They did it. South Africa put linger. The media, church and feeling that we’re all rooting for There is no standard industry risk of being dropped, something on an impeccably organized, ra- NGOs—bedrocks of a healthy civic the same side,” says Ms. Zille. definition of what the number of Flat-screen TV 120 that is more likely with weaker cially harmonious and—all the society—are vibrant; the constitu- From Mr. Zuma on down signal bars shown on a cellphone Clock radio 50 reception. horror stories about its murder tion and courts remain strong; comes the message that South Af- should represent. Consumers who Even the raw signal-strength and rape epidemics notwithstand- and throughout the transition, an rica must not squander the warm switch from one model or brand Note: Cellphone power is the connection to the number doesn’t tell wireless users network, not the power of the device’s battery. ing—safe party. The world got a Associated Press autonomous private business sec- vibes and new confidence. Greece to another might find that the everything they need to know long look at Africa’s only modern A lot is riding on whether the country can capitalize on its World Cup success. tor has played the critical behind- felt good after the 2004 Olympics; maximum number of bars has Sources: Energy Department; WSJ research about reception. Other economy, the glinting airports and the-scenes role in guiding the for- look what happened later. Here changed from four to five, and Photo: Getty Images factors—such as interference with stadiums and a sophisticated and or distracted by soccer. Pessimists sis and uncertainty. The ANC is merly Marxist ANC toward poli- the stakes go beyond recouping that seeing a maximum signal other cell towers, the type of dynamic society. On the new ex- assume the police will disappear riven by factionalism. Mr. Zuma cies that stimulate growth and at- the 40 billion rand ($5.2 billion) it means something totally different strength. A strong signal obtained, new formula it plans to adopt four only when signal strength is wireless network and how many press “Gautrain” from Johannes- with the last Cup tourist. tries to keep everyone happy, tract investment. cost to put on this show. Will on the new handset. Many say, when a caller is standing near based on the recommendations of above 200 quadrillionths of a others are using the burg airport to the Sandton busi- Over the townships and squat- from the ANC’s hard-left to the Ms. Zille’s own experience South Africa build up a free mar- wireless companies and phone a cell tower, could be about 10 its U.S. network provider AT&T watt. That is roughly 2.5 to 16 network—also are important. “The ness district the other day, a ter camps hangs the fear of an- pro-business clans, but he avoids shows that political pluralism is ket democracy, or will cronyism, manufacturers won’t reveal the billionths of a watt, according to Mobility, the wireless unit of times stronger than the threshold reasons calls get dropped are conductor’s voice came on, “We’re other wave of violence against the hard decisions and effectively also putting down firmer roots. In corruption and poor governance math they use to convert signal wireless engineers. (Thus it would AT&T. for iPhone to show four bars out much more varied than simple now moving at 160 kilometers an makwerekwere—slang for outsid- controls nothing. A succession 2006, she was the first opposition take it down the road to a failed strength to bars, calling the take 10 billion such connections to (An AT&T spokesman referred of five. signal strength,” says Spencer hour.” Think about that next time ers, immigrants from neighboring struggle is under way behind the politician to win a major mayor’s state? information proprietary. And last power a 100-watt light bulb.) At questions to Apple, and an Apple Comparing the iPhone’s Webb, president of AntennaSys you’re in a cab on the congested African countries. Rumors and scenes ahead of the 2012 ANC seat, in Cape Town. During her Though in many ways a case week, after some consumers the other end of the spectrum, a spokeswoman didn’t respond to a formula with other devices is Inc., an antenna-design company and potholed Van Wyck Express- leaflets warn of pogroms come congress to choose the next party tenure, crime fell 90% in the city apart from the rest of Africa, suc- noticed that holding the iPhone a signal of 10 quadrillionths, or request for comment.) difficult because most in Pelham, N.H. “We have done way from JFK into Manhattan. July 12. Rioting armed gangs at- leader. Mr. Zuma may not last center. Voters saw an alternative cess or failure here will aid or im- certain way made the number of 0.00000000000001, of a watt Several tech enthusiasts, manufacturers don’t share their nothing to make this whole thing But in the post-apartheid era, tacked migrants in 2008. The xe- longer than a single term. to ANC rule in practice, and last pede the continent’s awakening. signal bars decline, Apple could be enough to complete a though, have tested their iPhones calculations either. The Android’s more quantitative.” Alan Paton’s “beloved country” is nophobia speaks to the frustra- The head of the ANC’s Youth year she became the first non- Its financial, physical and intellec- disclosed that the formula it has call. So a phone still could work and reported that the company software is available on the Representatives for the Federal also the bipolar country. Now it’s tions among South Africa’s black League, Julius Malema, works ANC premier of one of South Af- tual infrastructure make South Af- been using was “totally wrong,” when it shows one bar, even was showing four bars out of a Internet, but representatives for Communications Commission and on a World Cup high. “We all love poor—as well as to the state’s hard to stir up racial nationalism, rica’s nine provinces since the rica the natural gateway to this causing the display to overstate though it has one-millionth—and maximum of five even with Motorola Inc., Samsung CTIA, the wireless-industry trade each other!” laughs writer and failure to provide security and scaring whites and the multiracial first multiracial elections in 1994. frontier market of 900 million cell signal strength. not one-fifth—the signal strength relatively weak signals. For Electronics Co., Research In group, say they have no rules or television personality, Justice press neighbors, Zimbabwe’s Rob- capitalist class. He wants the “I don’t think anymore that the people. “It’s just a rough graphical of that same phone when it shows instance, tech Web site Motion Inc. and Nokia Corp. all standards for signal bars. Matt Malala. But the party ended Sun- ert Mugabe above all, to clean up state to confiscate mines and national government believes “Nation-building is a process,” presentation,” Branimir Vojcic, five bars. AnandTech reported that signal declined to disclose the formula Larson, marketing manager for day, and today the hangover their acts so their people don’t banks. Twenty-nine and bombas- we’re hostile to South Africa,” she says Ms. Zille, “it is not an event.” professor of engineering and That one bar of signal strength strength as low as 80 their handsets use or didn’t wpsantennas.com, which sells looms. Looking beyond, the mood need to flee to find a better life. tic, Mr. Malema is an African says, referring to the Democratic After this World Cup, “we might applied science at George might suffice, but it could lead to quadrillionths of a watt respond to requests for the antennas to boost cellphone darkens. Where political stability was Hugo Chávez in the making. He’s Alliance. Count that as progress: swing back a little but not all the Washington University, says of dropped calls, poor data transfers corresponded to four bars. information. Representatives for signals, says he would like to see Crime tops day-to-day con- the selling point of the virtual already an accomplished king- The ANC had tried, by hook or by way back.” signal bars. and other headaches. Cellphone IPhoneRoot.com, an independent the four major U.S. that change. “What if your battery cerns. The thugs were scared one-party state led by the ruling maker, helping lead the hard-left crook, to stop her from taking In theory, the bars represent users’ ability to interpret the website for all things iPhone, ran carriers—AT&T, Verizon Wireless, indicator said it was full and all of away by the additional 40,000 po- African National Congress, the revolt inside the ANC that power as mayor. Mr. Kaminski is a member of the power of a phone’s connection signal bars has been hampered by separate tests and concluded that Sprint Nextel Corp. and Deutsche a sudden it dropped to zero?” Mr. licemen deployed in town centers country now has political paraly- brought Mr. Zuma to power in Sports helps unify a scarred the Journal’s editorial board. to its wireless network. Only a companies’ varying definitions four bars could correspond to Telekom AG’s T-Mobile USA—also Larson asks. tiny amount of power is needed to and a lack of full transparency signal strength as low as 13 declined to share formulas, with complete a call or download data, about what the bars mean. quadrillionths of a watt. some saying it was left up to the Learn more about this topic at yet most phones will get reception Apple hasn’t disclosed details The Google Android, by handset makers. WSJ.com/NumbersGuy. Email Britain Needs Structural Reform over a wide range of signal of the calculations it used or the contrast, shows three bars out of “This was an extreme [email protected].

BY JOHN LLEWELLYN sures would not be simple or The U.K. measures up well in 65. This has been the official age ondary and post-secondary but Apple expands in China with opening of Shanghai store painless, but the payoff could be some areas of structural policy: of retirement since the 1950s. Had non-tertiary education. Perhaps Many governments in Europe, great. competition policy (it has the that age been indexed to (healthy) as a result of this, social mobility Continued from page 21 consumers here. Its products are (Hong Kong) Ltd., has said it is in and particularly the United King- U.K. policymakers could, as I least restrictive product-market life expectancy, it would now be is low in the U.K. 6.4% of PC shipments, IDC said. seen by many in first-tier cities as talks to sell the new model. dom, see no alternative to cutting explain in my report published regulations amongst OECD econo- 80. Given that people who remain There are other areas too “Apple is definitely a laggard status symbols. Analysts say a delayed release, government expenditure. They’re this week by the Center for Policy mies); investment policy (the U.K. in work tend live to longer, a where the U.K. ranks poorly: In- when it comes to focusing on At the Shanghai store opening, among other factors, slowed autho- right. But to stop there would be Studies, reasonably expect to has fewer barriers to foreign di- structural policy that obliges peo- frastructure investment, and par- China,” said Shaun Rein, managing one Apple fan, holding a homemade rized sales of the existing iPhone to do only half the job. raise the rate of growth in poten- rect investment than any OECD ple to retire simply on grounds of ticularly transport infrastructure, director of Shanghai-based consult- poster of Chief Executive Steve models in China, as users go to the Britain’s fundamental problem tial output by at least half a per- economy); and labor-market flexi- age both places a greater burden has been specifically identified by ing firm China Market Research Jobs, said he flew to Shanghai from “gray market” to buy unauthorized is that it has been spending be- centage point per year on average bility (the U.K. has the lowest on those who are still working, the OECD as an area that needs Group. “Apple needs to make China Jilin province, more than 1,000 kilo- imports of Apple products. yond its means for too long. over the coming decade. The level of employment-protection and shortens the lives of those improvement in the UK. a priority market” or risk seeing an meters to the north, to attend the IDC estimates 760,000 Unicom There are two ways to bring ex- gains could translate to as much legislation of all OECD economies who retire. None of this is to say that re- impact on its sales growth, he said. opening, and lined up for five days. iPhones were sold in the first two penditure into line with re- as three quarters of a percentage other than Canada and the U.S.). Moreover, a large proportion forming structural policies is Apple has said it is accelerating By Friday night, the crowd at the quarters of its official release in sources: One is to reduce expendi- point. This would be worth (in to- of people retire even before the easy. Structural policies are com- its push overseas. Just 62 of Apple’s Shanghai store had grown to about China, accounting for 2% of China’s ture; the other is to increase day’s prices) a cumulative £82 bil- official retirement age—often the plex and difficult; individually 283 retail stores at the end of De- 150 people, some wearing iPhone 4 smartphone market as of the first resources. And the way to achieve lion ($135 billion) to £124 billion- No matter how much unintended consequence of final- each structural reform typically cember were international outlets, quarter, and less than 1% of China’s the latter is to embark on a set of odd by 2020 in additional GDP. salary pension schemes. Whereas has only a small effect—they op- but the company has said that more overall handset market. Apple sold structural-policy reforms that This is not an area that partic- the government cuts, in the 1960s, 90% of British men erate slowly, and they interact than half of the 40 to 50 new stores 8.4 million iPhones world-wide in raise the growth of the economy’s ularly interests most academic its economy can’t between the ages of 60 and 64 with one another. To produce a it plans to open in the current fiscal Apple has been slower than the first quarter alone, according to productive potential. These mea- economists. It involves little eco- were in work, today that figure is worthwhile effect, therefore, a year, ending in September, will be research firm Gartner. nomic theory and certainly no ad- afford not to grow. only 60%. In New Zealand, a cul- range of structural policies is outside the U.S. its rivals to expand overseas, Consulting firm BDA China Ltd. vanced theory. It involves no eru- turally similar country, 75% of needed, as is a degree of met- Apple’s plan to open more stores even as the U.S. technology estimates about 2 million to 3 mil- dite mathematics. And on the men in that age group are work- tle—the politics of structural re- in China shows it recognizes “the company has grown rapidly lion iPhones have been purchased in EUROPE other hand it requires much de- In other areas though, the U.K. ing. form are not easy. importance of these markets outside China via the gray market. But even tailed information about the fares less well, and some of these Simply addressing these two There is clearly a lot to play of the Western world,” said Bryan that is a relatively small share of Andrew Langhoff, Publisher at home. structure, and particularly the in- are amongst the most important. demographic and labor-market is- for. The cross-country evidence Ma, analyst for IDC in Singapore. the total. China has more than 780 Patience Wheatcroft, Editor in Chief, Europe Iain Martin, Deputy Editor in Chief centive structure, of a wide range In respect of active labor-market sues could increase the U.K.’s po- painstakingly compiled by the He added that the company’s million mobile accounts. Tim Hanrahan, Managing Editor, News of individual policies. In short, policies, for example, which ac- tential rate of growth by around OECD could usefully be the start- plan to start international sales of Mr. Ma of IDC said Apple’s mar- Brian M. Carney, Editorial Page Editor this is the stuff not of faculties of tively seek to retrain and other- half a percentage point per year. ing point for the new British gov- the iPhone 4, the latest version of T-shirts. Several people there said ket share is growing, and he doesn’t economics, but of departments of wise equip unemployed people for Another area where the U.K. ernment in constructing a set of its popular smartphone, more they hoped to be able to buy the think it’s too late for Apple. IDC ex- Tracey Lehane, Advertising state and international organiza- the world of work rather than ranks poorly is education. British interlocking, reinforcing, struc- quickly than with previous models is iPhone 4 or iPad, which also hasn’t pects the Chinese PC market will Jonathan Church, Circulation tions—most notably the OECD. passively handing them welfare, 15-year-olds rank well below top tural policies for the U.K. No mat- also a sign of greater focus outside started selling yet in China. But grow more than 20% annually over Mike Elsas, Operations Structural policies operate in the U.K. scores low in interna- performers in reading, science, ter how much spending the gov- its home market. neither of those products was in the next five years, and smartphone Michele Lally, Marketing four basic ways. Some increase tional comparison: Only the US, and mathematics. The gap be- ernment cuts, its economy can’t Apple has said it will release the showrooms, though the earlier ver- penetration is seen increasing as Kate Dobbin, Communications the quantity of available inputs; Korea, and Japan score lower. tween the highest and lowest per- afford not to grow. device in dozens of countries by sion of the iPhone was in stock. well, which will create more oppor- Published since 1889 by Dow Jones and Company some increase the quality of those The U.K. has also not yet ad- formers in science is larger in the September, although it hasn’t spe- Apple declined to say when the tunities for Apple. inputs; some increase the ability dressed its demographic issues. U.K. than in all other countries Mr. Llewellyn was head of OECD cifically set the timetable for China. iPhone 4 and the iPad will be avail- “I wouldn’t say the game is over © 2010 Dow Jones & Company. All Rights Reserved of the economy to adapt to The baby-boom generation is, in except the U.S. The U.K. also has international economic forecast- Despite its relatively small pres- able in China, though Apple’s cur- yet,” Mr. Ma said.

change; and some increase the the U.K. as in many other OECD a lower-than-average proportion ing and policy analysis, and is a ence in China, Apple enjoys high rent Chinese partner for the iPhone, —Juliet Ye in Shanghai Sipa Press jk economy’s resilience to shocks. countries, about to start turning of its population with upper-sec- partner in Llewellyn Consulting. brand awareness among wealthier state-owned carrier China Unicom contributed to this article. Apple has said it plans to open 25 stores in China by the end of next year, 26 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 11 BUSINESS FINANCE OPINION: REVIEW OUTLOOK Standard Chartered IPO: Google With Chinese Characteristics Japan or India redux? t first the tussle between China it also wanted to keep doing business in Chinese government’s “great firewall” gine and the company’s other services re- and Google over the free flow of China and so had to find a way to avoid software. The user gets an error message main important tools for many Chinese. [ Think Again ] A information seemed like a contest breaking Chinese law. In March, the com- and sometimes has the Internet connec- Although Google caused some loss of face of brute strength. But it’s becoming clear pany began to redirect users from the tion cut off for a short period. to the government by taking a stand, this is more like a Chinese exercise google.cn page to its Hong Kong site, The main differences now are that blocking Google entirely would only high- ASECOND LOOK known as “pushing hands.” The object is google.com.hk, which was uncensored. Google is no longer complicit in the cen- light the country’s political backward- AT SECTORS AND STOCKS to make an opponent fall over, but often Beijing objected to that sorship, and the user is ness. Google, meanwhile, wants to keep a Standard Chartered PLC is the best way to do that is to let him lose automatic referral, so more aware that the toehold in this huge and rapidly growing planning a listing in an Asian his balance by trying to topple you. on June 28 Google The company keeps its search request is being market, and for now it seems to have manufacturing titan. StanChart’s Last week brought the news that Bei- made a minor conces- censored. When Google done so. rationale? Marketing its brand jing has renewed Google’s license to op- sion by stopping the au- license, while Beijing was doing the censor- This is good news for everyone, not there (the bank doesn’t especially erate in China. That shows that Beijing tomatic redirect and in- ing, the only indication least Google’s investors, who saw the Tuan Le (3) does the censoring. need the capital). In a recent knows that throwing Google out entirely stead provided a link to that search results were company’s shares climb 2.4% on Friday. Ryan Carlson demonstrates traders’ hand signals on his website. Left to right: the old Shearson Lehman (cutting interview, Jaspal Singh Bindra, its would only expose its censorship regime google.com.hk that us- incomplete was a small The calm may not last long, as China’s ‘shears’), the old Refco (‘reefer’) and Goldman Sachs (touching a wedding ring). Asia chief executive, says the bank to greater pressure—from its own people ers could click on. Google’s renewal ap- message at the bottom of the screen. censorship is even now facing new chal- views a Shanghai listing as more of a marketing push rather than finding ways around it as well as interna- plication deadline was June 30. Beijing is no doubt hoping that many lenges from social networking sites and to one to locally fund its working- tional condemnation. To be clear, Chinese users still aren’t Chinese netizens will find the blocked Twitter. But give Google credit for stand- capital needs. Recall that in January Google an- getting uncensored search results. If they pages too annoying and abandon Google, ing up for its principles while operating in Chicago trader has hand StanChart’s recent experience nounced it would stop self-censoring use google.com.hk to search for forbid- using the main domestic competitor, a country with a government that is still in India broadly supports its search results on its China site. However, den topics, the data are stopped by the Baidu, instead. But the Google search en- hostile to the free flow of information.

rationale. The bank was the first Bloomberg News foreign company to offer Indian Standard Chartered’s Hong Kong HQ Depositary Receipts, and the 24.9 in history of trading pits billion rupees ($532.1 million) open platform like Android and raised in May was a mere trifle Google Chrome, with hardware BY MARY PILON changes or academics, making Mr. were trading and in what quantities for a bank with a capitalization of partners Sony, Logitech and Carlson the accidental historian of and prices. Some traders who re- £34.70 billion ($52.60 billion). Intel, no doubt with the aim of An Obama Home Run CHICAGO—Ryan Carlson left the hand signals and all things trading. main in the pits still use hand sig- True, initial investor reaction repeating the trick on the trading pits here in 2005 to trade “I think I’m the only person in nals but also may use computers to to the offering was lukewarm due television screen. electronically. But he didn’t leave the world who collects this stuff,” execute orders. to local investment restrictions The new platform would allow f all Barack Obama had to do as U.S. All three of these senior officers have trol of Fallujah in Iraq’s Anbar province. vilians. Remind us again what Lincoln said the past behind. says Mr. Carlson, poring through Mr. Carlson, a native of Topeka, and tax implications. But it’s nice Google to build up an even more President is pick generals, his ap- something important in common: They General Mattis’s experience in these the- about Grant. Mr. Carlson set off to record for photos of trading pits, trading jack- Kan., started at trading pits in Kan- to be paid half a billion bucks to detailed picture of user proval rating probably would be flying hate to lose. That is, they fight to win. In aters made him one of the earliest pro- Which brings us back to President posterity the dying language of ets and century-old badges and sas City, Mo., at 18, skipped college boost your own customer preferences and make it a better I high. Last week defense Secretary Robert particular, Jim Mattis knows the impor- ponents of the counterinsurgency strat- Obama. He leads a fretful Democratic hand signals that traders for de- handbooks in his condo here. and moved to the Chicago pits 1 1/2 awareness. Google Insights data place for advertisers. But perhaps Gates announced that Marine General tance of winning against the U.S.’s cur- egy later deployed with success in Iraq Party. Its Senate Armed Services Chair- cades used to buy and sell every- Even before the financial crisis, years later in 1999. He has been shows a clear spike in StanChart the key is that Google TV would James Mattis would succeed David Petra- rent, unrelenting enemy—Islamic terror- by General Petraeus. man, Carl Levin, spent most of his confir- thing from pork bellies to wheat. open-outcry trading was fading out trading only electronically since news searches out of India in the be the wrapper around a TV show, His pursuit put Mr. Carlson—30 as electronic trading rose. Elec- 2005. runup to and in the week of its which could, in time, enable eus as head of U.S. Central Command, ists. He served as a lieutenant colonel in Every news story on the Mattis ap- mation hearing for General Petraeus de- years old and among the last gener- tronic trading has made markets “He’s preserving part of our fi- IDR offering, which should have intelligent advertising to be which includes Afghanistan, Iran and Iraq. both Operation Desert Shield and Opera- pointment is going to highlight his 2005 manding assurance that the U.S. will get ation to learn trading via open out- more efficient, Mr. Carlson says, and nancial history,” says Richard Sylla, done its bit to raise the lender’s inserted around the television Notwithstanding the Rolling Stone tion Desert Storm. He commanded a Ma- remark that “it’s a hell of a lot of fun to out of Afghanistan by next July. cry—in the middle of a split be- he enjoys the flexibility and ease of chairman of the Museum of Ameri- corporate profile among India’s program. However, this could crackup, Mr. Obama’s choice of Stanley rine brigade in Afghanistan after the at- shoot them.” The suggestion is that this Any U.S. President needs better than tween old and new ways of trading. trading remotely, which he does can Finance and professor at New burgeoning middle classes. If that bring Google into conflict with McChrystal last year to lead his fight in tacks of September 11, 2001. Two years might cause problems at confirmation. that in his foxhole, and it is to Mr. In 2008, he launched trading- now for his own account. York University’s Stern School of can be replicated in China, then satellite and cable operators, Afghanistan was the right one. As was later, he led a Marine division into Iraq. Seriously? He was talking about enemies Obama’s credit that he has chosen to draw pithistory.com, now featuring 244 In the trading pits, traders used Business. an IPO clearly has substantial which now own the wrapper, and the decision to replace him with General Most famously, he helped to lead the who beat up women for not wearing veils, a line from Iran to Afghanistan with the trading hand signals, and an accom- hand signals to communicate or- CME Group Inc., the world’s marketing benefits. For companies with initiatives such as Canvas, a David Petraeus. U.S. Marine effort in 2004 to regain con- who behead and mutilate captives and ci- one-two punch of Petraeus and Mattis. panying blog, tradingpitblog.com. ders, allowing orders to be relayed largest derivatives-exchange opera- thinking “me too,” it’s worth U.K.-based live streaming of They are rare caches of financial above the roar. The hand signals tor, offers some guidance on hand- noting the advantage possessed video-to-television initiative. lore often undocumented by the ex- also let traders see what others signaling basics in its visitors gal- by StanChart and peer HSBC It’s generally accepted that for lery in Chicago, but Mr. Carlson sees Holdings, also considering a Google TV to make decent inroads that as the Webster’s Dictionary to Shanghai listing, with their strong in the market for those who watch his UrbanDictionary.com, the popu- historical ties to India and China TV in their living rooms it would lar slang website. And, like all marketing exercises, need to have sports, the obvious America’s Pro-Business President Bull horns, his site says, mean following through with tangible hit shows, on-demand movies and “Merrill Lynch.” A bear claw signi- efforts to build out local business high-definition capability. The fact LEGALNOTICES fies “Bear Stearns.” Holding one’s is critical and is the hardest part. that average gap from the time a he big political news out of Wash- cently for trade promotion, and its un- Street and the financial industry have to nurturing a fragile economic recovery index finger and thumb to the The lessons from Japan, show is recorded to the time it is ington is that the White House leashing of new regulations across any in- stopped writing as many checks to Demo- into a durable expansion. U.S. companies mouth, as if smoking, signals the however, are salutary, and a viewed is around 30 minutes wants you to know that President dustry you want to name. cratic House and Senate candidates after have an estimated $2 trillion in cash that now-defunct financial-services firm misstep in China is still possible, shows viewers want to watch T PUBLIC NOTICES “Refco” because “it sounded like unlikely as that may appear. their favorite show then and Obama is not antibusiness. That reassur- For a summary of the Administration’s two years of White House banker bashing. they could deploy to create new jobs or ‘reefer’ to the traders,” Mr. Carlson Many foreign companies listed there. Access to the programs that ing word comes in a dispatch from Polit- antibusiness agenda, consult the Business Big Labor can’t pay for every TV ad, and buy equipment, but they aren’t about to says. on the Tokyo Stock Exchange in customers want varies. In Europe, ico.com quoting senior White House aides Roundtable’s recent 54-page compen- nothing concentrates the political mind so do so until they know what their costs The signal on his site for the late 1980s and early 1990s as consumers in U.K. and Germany that they have launched “a coordinated dium. But don’t read it before you go to much as the lack of campaign cash. will be. We warned the White House
   

      
 Deutsche Bank AG is a reference to part of a publicity blitz to get in have the greatest amount of free- campaign to push back against the per- bed because you’ll wake up with night- However, our favorite line from the Po- about this early on when we wrote about   
           Adolf Hitler’s mustache. He says he on the Japanese market and a to-view services, so Google TV ception” that their agenda is hostile to mares if you’re an employer. litico.com story is this one: “And it is the dangers of a “capital strike.”
   


    

 received a request to pull it down, sense that Tokyo would be the wouldn’t need to buy up much (or business. Our guess is that the timing of this more than just politics: Obama’s aides be- The problem for Mr. Obama at this 
    but didn’t. “It’s slang,” says Mr. new economic center of the world. any) additional programming. In How in the world did anyone get that White House campaign has a lot to do with lieve confidence in the general direction stage is that business will need more than       

 
     
 
Carlson. “Like it or not, that’s how When the Topix set a record of the U.S., however, the free-to-view 

 
      
   

 idea? Perhaps the feeling set in sometime the Roundtable’s broadside, which has of White House policy has an effect on the words to conclude there’s been a real po-  
   some of these people communicated 2884.80 in December 1989, 119 offering is weak, so Google needs between the President’s public trashing of shaken even some of the President’s media willingness of corporations to hire, invest litical change. He’ll have to make some  
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       &$4 :("!#% $! "1& ,%$1 #+"  ''(#&#% $ )&$ #+" +"& %$1 fan of the site in London emailed Chartered, which in December equivalent of Doubleclick, which $ #+" )%2&#% $ !+ (), 3" ,% "2#", # #+"  ''(#&#% $ )&$ ,5%!  that some yellow Barings Bank trad- 1986 took the plunge. In 1995, it Google acquired in 2008, that Janet Daley writing in Britain’s Telegraph man as head of the American public health- procedures out of reach of patients whose $, "*  #+!"%, ($00 "
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# >#+ 0) "*  C "*  C - don International Financial Futures Android to move from being a from Dow Jones Investment administrators, rather than by general prac- describes in ecstatic terms that will have a [W]e have—and America is apparently  5%,"$2"  -;->> < --.>/A< --;./= < ./- < --/./=; and Options Exchange (now part of strange word in the land of tech Banker. For more information, titioners.... tragicomic ring to most British ears) of just about to embrace—an approach to health < ./--> 70&2!%'%)"8 < --;./=- 70&2!%'%)"8 NYSE Liffe, owned by NYSE Euron- to a commonplace one on a visit www.dowjones.com/ The U.S. government, meanwhile, is gal- those evils of a national health system with funding which is inherently self-limiting. Ra- C!+" %,&$? 202 ' +!"%0"?2+&,3 ( $"2 'A,' !?2+&,3 ( $"2 ' ext), which closed its pits a decade billboard. In May, Google banker loping doggedly in the opposite direction, bi- which we are exasperated: The calculated tioning is what happens when you do not have ago. “I haven’t even scratched the announced Google TV, built on a zarrely determined to occupy precisely the rationing of treatment, and the ruthless en- enough of something to go around. And health surface,” Mr. Carlson says. “The ideological ground which Britain is abandon- forcement of uniform cost limits, which of- care that is paid for entirely by taxation cre- deeper I go, the more I get.” ing. Barack Obama has, indeed, appointed a ten puts the most advanced medication and ates shortages where they need not exist. “Read ‘em and weep.” 10 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 27 INTERVIEW MARKETS FUND SCORECARD Euro should sustain rally US Large-Cap Blend Equity Funds that are fairly representative of the U.S. large-cap equity market. At least 75% of total assets are Being a hero matters less invested in equities. Ranked on % total return (dividends reinvested) in U.S. dollars for one year ending July 09, 2010 as stress tests awaited Leading 10 Performers FUND FUND LEGAL % Return in $US ** BY BRADLEY DAVIS gent budget cuts and market-sooth- tend to be more volatile, with small RATING *NAME FUND MGM'T CO. CURR. BASE YTD 1-YR 2-YR 5-YR ing stress tests, investors are com- trades having an exaggerated effect. NS Amundi ETF Amundi Investment EURFRA 15.29 78.40 NS NS With concerns about European ing around to the viewpoint that Late Friday, the euro was at Leveraged MSCI USASolutions Daily A sovereign debt receding, the euro “the euro should look a little bit $1.2640, from $1.2692 late Thurs- 4 Lyxor ETF Lyxor EURFRA 11.93 49.44 6.46 NS than avoiding big mistakes has put in a strong showing. This more like the Deutsche mark,” with day. FTSE RAFI US 1000International A Asset Management week, it’s set to seek to hold on to its solid fiscal backing, Mr. Pazza- The dollar has suffered from the 3 Allianz Allianz Global EURFRA 9.32 45.84 4.67 -2.47 those gains. nese said. shift in focus from the euro zone to Amériques StocksPLUSInvestors A/I France Unigestion’s chairman made a prescient call on the risk of liquidity drying up; now he’s looking eastward Successful government bond auc- Still, it will take awhile to repair the possibility of slowing U.S. 2 CapitalAtWork Capital at Work EURLUX 12.09 43.60 10.73 -2.90 tions in Portugal and Spain com- the damage done. Despite this past growth. Among U.S. data on tap this bined with details week’s recovery, the euro is down week, Thursday’s industrial-produc- Amer Eq at Work D [ Bernard Sabrier ] CURRENCY released on stress around 11.5% against the dollar tion figures should go a long way in 4 Aktia Aktia Rahastoyhtiö EURFIN 11.69 40.43 2.60 -1.00 MARKETS tests of European since the beginning of the year, with determining the pace of the U.S. re- America A Oy BY WILLIAM LYONS banks and contin- investors keeping a cautious stance covery, Mr. Lambregts said. 2 OP-Amerikka OP-Rahastoyhtiö Oy EURFIN 9.04 39.74 0.19 -4.61 ued belt-tightening plans across the on the lingering issues of sovereign Uncertainty surrounding Japan’s Indeksi A In 2007, Bernard Sabrier, chairman of euro zone all have taken pressure debt. current ruling party could lead the 5 Lyxor ETF Lyxor EURFRA 10.36 39.66 7.64 0.14 Geneva-based asset-management firm Uni- off the common currency. On Friday, Ahead of the July 23 results of yen to weaken, analysts said. Dow Jones Indl AverageInternational A Asset Management gestion Holding, talked with his chief exec- the euro briefly touched a two- the European Union’s bank stress The ruling Democratic Party of 4 LINGOHR AM Landesbank Berlin EURDEU 5.46 38.52 0.19 -1.72 utive, Patrick Fenal, about the time bomb month high against the dollar—ris- tests, the euro should hold on to Japan and its junior coalition part- SYSTEMATIC LBBInvestment INVEST GmbH they believed was ticking under hedge ing all the way to $1.2723, a 7% gain most of its recent gains, trading this ner, the People’s New Party, on Sun- 2 UBS (Lux) UBS (Lux) Key EURLUX 5.16 38.42 2.28 -4.14 funds. They agreed there was a major po- in the span of about a month—from week between $1.2480 and $1.2725, day lost their combined majority in KSS US Eqs (EUR)Selection P Acc Sicav tential liquidity risk and mismatch between its four-year low at $1.1876. said Jan Lambregts, global head of the Upper House. The resulting po- certain funds of hedge funds that exposed “A lot of it has to do with senti- financial-markets research at Ra- litical uncertainty could hurt the NS Handelsinvest Handelsinvest DKKDNK 11.03 37.81 NS NS investors to enormous risks. ment,” said Geoffrey Pazzanese, co- bobank International in London. yen against the dollar. The dollar Nordamerika In short, they argued that there were manager of Federated Investors’ NOTE: Changes in currency rates will affect performance and rankings. Source: Morningstar, Ltd Mr. Lambregts pinpointed one should trade between 88 and 92 KEY: ** 2YR and 5YR performance is annualized 1 Oliver’s Yard, 55-71 City Road certain funds of funds in which investors $736 million Intercontinental Fund. key risk to the euro’s recent yen, analysts said, with the green- NA-not available due to incomplete data; London EC1Y 1HQ United Kingdom NS-fund not in existence for entire period www.morningstar.co.uk; Email: [email protected] could redeem their investments faster than With German and French leaders rally—leaks of bad news from the back Friday afternoon at 88.63 yen Phone: +44 (0)203 107 0038; Fax: +44 (0)203 107 0001 the fund could liquidate its own. Were “winning the arguments” for strin- stress tests. Thin summer markets from 88.39 yen late Thursday. there to be a sustained run of redemptions on such funds, the fund could exhaust its li- quidity, and the last group of clients to re- deem wouldn’t receive their money back on Pictet’s Dunand: Play the due date. Instead, they would find Stockpickers’lament:herdinstinct themselves locked into an investment for longer than they expected, to their possible commodity currencies disadvantage. Continued from page 21 dex’s April 23 peak—about the same blue-chip to which many investors Their findings, which helped guide their to 45%, the lowest allowed under decline as stocks that don’t pay divi- normally would turn. BY TARA LOADER WILKINSON investment philosophy, were eventually Harris’s guidelines, and bonds have dends, according to research done Since April, Microsoft has fallen published in a paper authored by Mr. Fenal. risen to 55%. for The Wall Street Journal by Bir- harder than the overall market. Its Chloé Koos Dunand, economist “Everyone, including some of our own “The easiest thing for us to do is inyi Associates. None of the S&P stock price, as a multiple of its earn- at Swiss bank Pictet & Cie, talks to colleagues, thought we were crazy,” says lower our risk” rather than try to 500’s 10 sectors, even the most de- ings, has been below that of the The Wall Street Journal about Mr. Sabrier. “Our staff kept asking why are pick and choose among stocks, Mr. fensive, shows a gain since the April broad market, something that has how to profit from commodity you putting us at a deliberate disadvantage. Ablin explains. “I think we are going peak. rarely been the case in Microsoft’s currencies. Everyone is saying liquidity is not a prob- to stay with a higher bond alloca- Among the few investments history. Microsoft, of course, has The fast pace of industrialization lem and you are the only one who has con- tion than usual for a while. We just showing gains since April 23 are suffered recently from adverse com- in China, which strained us on liquidity.” think that the market warrants a Treasury bonds, investment-grade parisons with Apple, and its status WEALTH stimulated interest A year later, liquidity became a problem higher degree of vigilance.” corporate bonds and gold. as a blue-chip hasn’t offset that. MANAGER in commodity cur- at many firms. Investors wanting to redeem The tendency of stocks to rise “Stocks aren’t moving because of Another problem for dividend Q&A rencies, augers well their money from such funds of funds were and fall together may help explain the sector they are in, but because payers is that the group includes for both commodi- delayed, and those that remained invested why some conservative, dividend- the overall market is down” since some of the market’s most volatile ties and the countries that produce

longer than they wanted to and suffered paying stocks have been turning in late April, Mr. Rubin says. stocks, such as financial and indus- them. The critical factor is not to Pictet significant losses. disappointing results lately, while Exchange-traded funds, high-tech trial shares. Dividend payers in treat all commodity currencies the Pictet’s Chloé Koos Dunand Not that the 57-year-old Mr. Sabrier took some riskier stocks, such as com- trading strategies and quick shifts more stable groups, including tele- same. The Canadian dollar is much

much pride in his prescience. “There was Unigestion puter-chip makers, are holding up to cash permit investors to react communications and utility stocks, less a commodity currency, for ex- from 20% to 30% gross domestic no triumphalism,” he says. “It’s not about Bernard Sabrier: “We have lived through a period of excess in the financial world.” But, he adds, “The answer doesn’t always have to be regulation.” better than expected. quickly to market moves without have held up better, but those ample, than the Indonesian rupiah. product since 2000. being right or wrong; it’s about avoiding “One of the strategies we run is analyzing individual stocks, but they groups still are down. Australia exports a diversified Asia is the destination of about major mistakes.” the truth is not there.” Most of his funds, he says, are domiciled but they are learning fast.” very defensive and it has not done also mean that professional inves- Some analysts believe stock array of goods to China and has a 25% of New Zealand and Chile’s ex- In fact, Unigestion, didn’t remain im- These are tricky times for hedge-fund in Guernsey, one of the U.K.’s Channel Is- Early in his career, Mr. Sabrier was em- well in May and June of this year,” tors have less need to use tradi- prices could remain sluggish for sensible monetary policy and fiscal ports. The New Zealand dollar bene- mune to the 2008 financial storm, but it managers. Many European finance minis- land offshore financial havens, but, pending ployed at Renault Finance in Lausanne, says Janna Sampson, co-chief in- tional defensive stocks as havens. some time. In that case, they say, in- policy mix. Among emerging-market fits from association with the Aus- fared better than most. Assets under man- ters have accused the industry for using bil- the shape of the regulations, he says that Switzerland, where he worked in group cur- vestment officer at OakBrook In- Ms. Sampson of OakBrook has vestors should buy dividend-paying currencies, the Indonesian rupiah tralian dollar, and Chile is agement declined from €7.8 billion at the lions of euros in borrowed money to desta- he may look to move some to Luxembourg rency hedging and fixed-income instru- vestments, which oversees $2.1 bil- been especially surprised at the stocks in hopes that dividends will looks an outstanding prospect since pre-eminent in the copper market. end of 2007 to €7.5 billion at the end of last bilize the financial markets during the 2008 if necessary. The real beneficiaries of the ments. With the capital he made at Renault, lion in Lisle, Ill. weak performance of stocks like Mi- enhance weak price performance. So Indonesia also exports heavily, par- Canada’s exports to Asia are not month, a fall of only 3.8%. crisis. They have also been rebuked for fu- EU regulations will be places such as Sin- he bought Unigestion and began a series of Dividend payers in the S&P 500 crosoft, which hasn’t been behaving far, however, investors don’t seem ticularly oil and petroleum products. yet significant but are rising, mak- “Alternative asset management”—such elling a speculative attack on Greece’s sov- gapore, Hong Kong, Shanghai and Beijing, private-equity-backed acquisitions, includ- are down about 11% since that in- as the big, solid, dividend-paying to be heeding that advice much. Domestic investment has risen fast, ing the Canadian dollar attractive. as hedge funds, which can use leverage to ereign debt. which will create markets and take busi- ing the purchase of Banca della Svizzera multiply the effect of their positions in This summer, EU finance ministers will ness, he says. Italiana. Four years later he sold it to Swiss stocks and bonds—“is not an easy game,” vote on proposals drawn up by the Euro- “My worry is that the French and Ger- Bank Corp. , a deal that at the time was one Advertisement [ INTERNATIONAL INVESTMENT FUNDS www.wsj.com/funddata ] Advertisement says Mr. Sabrier, who has run Unigestion pean Parliament’s Economic and Monetary man politicians thought: first we have to of the largest in the Swiss financial sector since buying it from his father in 1976. “But Affairs Committee. A swathe of new regula- kill London; if we put the London financial and made him a multimillionaire by the NAV —%RETURN— NAV —%RETURN— NAV —%RETURN— the results are pretty powerful, which tions will be introduced as part of the Al- sector on its knees, the financial capital of time he was in his early thirties. FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR sometimes leads many people to believe ternative Investment Fund Managers direc- Europe will be Paris and Frankfurt. They In the early days, Unigestion was in- Emg Mkts Debt A GL BD LUX 07/08 USD 15.93 5.7 23.2 11.8 Gl Bond A US BD LUX 07/08 USD 9.52 5.1 12.1 7.5 India Growth B EA EQ LUX 07/08 USD 136.98 3.0 41.4 NS this business is about being a hero. We are tive. Proposals range from requiring funds are making a mistake because, if they do volved mainly in private banking, focusing Emg Mkts Debt A2 GL BD LUX 07/08 USD 21.28 5.8 23.3 11.9 Gl Bond A2 US BD LUX 07/08 USD 16.84 5.2 12.1 7.5 India Growth BX EA EQ LUX 07/08 USD 97.85 3.2 41.8 14.9 not here to have an ego, nor to be heroes. that routinely borrow money to boost re- succeed in putting London on its knees, on traditional investment vehicles. But after Emg Mkts Debt B GL BD LUX 07/08 USD 15.93 5.2 22.1 10.8 Gl Bond B US BD LUX 07/08 USD 9.52 4.6 11.0 6.5 India Growth I EA EQ LUX 07/08 USD 119.55 4.0 43.9 16.5 Emg Mkts Debt B2 GL BD LUX 07/08 USD 20.40 5.4 22.1 10.8 Gl Bond B2 US BD LUX 07/08 USD 14.67 4.6 11.0 6.5 Data as shown is for information purposes only. No offer is being made by Int'l Health Care A OT EQ LUX 07/08 USD 128.27 -6.7 11.1 -6.0 We are here to work very hard, around turns to disclose information about their they will only succeed in accelerating the experimenting with hedge-fund investments Emg Mkts Debt I GL BD LUX 07/08 USD 15.93 6.0 23.8 12.4 Gl Bond I US BD LUX 07/08 USD 9.52 5.4 12.7 8.1 Morningstar, Ltd. or this publication. Funds shown aren’t registered with the Int'l Health Care B OT EQ LUX 07/08 USD 107.63 -7.2 10.0 -7.0 strong values, to have a very thorough pro- borrowings to EU and national authorities, shift of capital from West to East as Paris using his own money, Mr. Sabrier became U.S. Securities and Exchange Commission and aren’t available for sale to United Emg Mkts Growth A GL EQ LUX 07/08 USD 32.68 -5.7 30.7 -8.7 Gl Conservative A US BA LUX 07/08 USD 14.61 -0.6 11.1 -1.3 Gl Conservative A2 US BA LUX 07/08 USD 16.83 -0.6 11.1 -1.3 Int'l Health Care I OT EQ LUX 07/08 USD 140.73 -6.3 12.0 -5.3 cess, know what we are doing and have a to requiring non-European funds to apply or Frankfurt don’t have the flexibility or the convinced these were the investment vehi- States citizens and/or residents except as noted. Prices are in local currencies. Emg Mkts Growth B GL EQ LUX 07/08 USD 27.56 -6.2 29.4 -9.6 All performance figures are calculated using the most recent prices available. Emg Mkts Growth I GL EQ LUX 07/08 USD 36.39 -5.3 31.8 -7.9 Gl Conservative B US BA LUX 07/08 USD 14.60 -1.1 10.0 -2.3 Int'l Technology A OT EQ LUX 07/08 USD 105.59 -4.3 29.4 -6.0 long-term plan.” for a “passport” to be able to market to in- pool of talents in the financial sector.” cles to focus on. NAV —%RETURN— Eur Growth A EU EQ LUX 07/08 EUR 7.22 2.7 23.6 -7.4 Gl Conservative B2 US BA LUX 07/08 USD 15.91 -1.1 10.0 -2.3 Int'l Technology B OT EQ LUX 07/08 USD 91.02 -4.8 28.1 -7.0 Mr. Sabrier, who has weathered the vestors in Europe. Mr. Sabrier has opened an office in Sin- That’s a view he still holds. Despite all FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR Eur Growth B EU EQ LUX 07/08 EUR 6.45 2.1 22.2 -8.4 Gl Conservative I US BA LUX 07/08 USD 14.69 -0.2 12.0 -0.5 Int'l Technology I OT EQ LUX 07/08 USD 118.88 -3.9 30.5 -5.3 Eur Growth I EU EQ LUX 07/08 EUR 7.90 3.0 24.6 -6.7 Gl Eq Blend A GL EQ LUX 07/08 USD 10.42 -10.6 15.4 -18.0 Japan Blend A JP EQ LUX 07/08 JPY 5576.00 -7.4 1.1 -20.1 Gl Eq Blend B GL EQ LUX 07/08 USD 9.73 -11.1 14.3 -18.8 downturns of 1990, 1994 and 2000, is philo- Given that funds may be prevented from gapore, where he spends much of the year. the fears that rules on bonuses will prompt Eur Income A EU BD LUX 07/08 EUR 6.74 5.1 22.6 9.2 Japan Growth A JP EQ LUX 07/08 JPY 5298.00 -9.8 -2.3 -21.5 Gl Eq Blend I GL EQ LUX 07/08 USD 11.04 -10.2 16.5 -17.4 sophical about the way hedge funds have complying with the latter measure by finan- He said he feels the real opportunity is in an exodus of London’s hedge funds, Mr. Sa- Eur Income A2 EU BD LUX 07/08 EUR 13.56 5.4 22.7 9.3 Japan Growth I JP EQ LUX 07/08 JPY 5474.00 -9.4 -1.5 -20.9 Gl Growth A GL EQ LUX 07/08 USD 38.00 -9.3 16.2 -18.0 Eur Income B EU BD LUX 07/08 EUR 6.74 4.7 21.9 8.4 become the whipping boy of choice for the cial regulations in their home countries, an- the Far East—and only by living and work- brier still believes that in whatever form Gl Growth B GL EQ LUX 07/08 USD 31.56 -9.8 15.0 -18.8 Japan Strat Value A JP EQ LUX 07/08 JPY 5859.00 -4.3 5.9 -18.8 Eur Income B2 EU BD LUX 07/08 EUR 12.56 4.9 21.8 8.4 Gl Growth I GL EQ LUX 07/08 USD 42.37 -8.9 17.1 -17.3 Japan Strat Value I JP EQ LUX 07/08 JPY 6039.00 -3.9 6.8 -18.1 global economic crisis. alysts say it would not only limit the pres- ing there can one truly show a commitment they take, “in the future they are probably Eur Income I EU BD LUX 07/08 EUR 6.74 5.4 23.2 9.7 n Gl High Yield A US BD LUX 07/08 USD 4.39 5.5 31.3 9.4 Real Estate Sec. A OT EQ LUX 07/08 USD 13.90 -3.1 32.1 -10.0 “The politicians want to find someone to ence of U.S.-based hedge funds in Europe and understanding of its culture. the only way people will manage money.” ALLIANCE BERNSTEIN Eur Strat Value A EU EQ LUX 07/08 EUR 8.09 -5.2 19.0 -12.7 www.alliancebernstein.com/investments Tel. +800 2263 8637 Gl High Yield A2 US BD LUX 07/08 USD 9.78 5.6 31.5 9.3 Real Estate Sec. B OT EQ LUX 07/08 USD 12.64 -3.7 30.8 -10.9 Eur Strat Value I EU EQ LUX 07/08 EUR 8.31 -4.9 19.9 -12.0 Gl High Yield B US BD LUX 07/08 USD 4.39 4.9 29.9 8.1 blame, and it is easy to blame hedge funds. but may also affect European-based funds “In hedge funds, the shift to the East is “We have lived through a period of ex- Am Blend Portfolio A US EQ LUX 07/08 USD 9.63 -7.1 19.5 -10.9 Real Estate Sec. I OT EQ LUX 07/08 USD 15.00 -2.7 33.2 -9.3 Eur Value A EU EQ LUX 07/08 EUR 8.71 -5.3 19.6 -9.3 Gl High Yield B2 US BD LUX 07/08 USD 15.65 5.2 30.2 8.2 Am Blend Portfolio I US EQ LUX 07/08 USD 11.38 -6.9 20.4 -10.2 Short Mat Dollar A US BD LUX 07/08 USD 7.31 2.1 11.1 -0.3 They are high-profile and easier to blame registered in tax havens such as the Cay- not obvious yet. We see some of the best cess in the financial world.” he said. “The Eur Value B EU EQ LUX 07/08 EUR 7.97 -5.8 18.4 -10.2 Gl High Yield I US BD LUX 07/08 USD 4.39 5.8 32.1 10.1 Am Growth A US EQ LUX 07/08 USD 28.13 -10.0 18.5 -5.0 Short Mat Dollar A2 US BD LUX 07/08 USD 10.00 2.1 11.1 -0.4 than banks,” he says as he sips coffee in his man Islands and Bermuda. managers on Asian equities based on the success of the asset-management business Eur Value I EU EQ LUX 07/08 EUR 10.10 -4.9 20.7 -8.6 Gl Thematic Res A GL EQ LUX 07/08 USD 13.72 -6.9 18.2 -1.5 Am Growth B US EQ LUX 07/08 USD 23.53 -10.4 17.3 -5.9 London office. “But in reality, hedge funds Mr. Sabrier says he doesn’t believe the west coast of the U.S. or in Europe because was geared on greed. Clients were greedy, Gl Balanced (Euro) A EU BA LUX 07/08 USD 14.44 NS NS NS Gl Thematic Res B GL EQ LUX 07/08 USD 11.94 -7.4 16.9 -2.5 Short Mat Dollar B US BD LUX 07/08 USD 7.31 1.8 10.6 -0.8 Am Growth I US EQ LUX 07/08 USD 31.31 -9.6 19.5 -4.2 Gl Balanced (Euro) B EU BA LUX 07/08 USD 13.99 NS NS NS Gl Thematic Res I GL EQ LUX 07/08 USD 15.37 -6.5 19.1 -0.7 Short Mat Dollar B2 US BD LUX 07/08 USD 9.93 2.0 10.6 -0.8 only manage a tiny percentage of the tighter regulation of funds proposed by the they still do not want to live in Hong Kong. employees were greedy and shareholders Am Income A US BD LUX 07/08 USD 8.64 5.5 17.0 8.9 Gl Balanced (Euro) C EU BA LUX 07/08 USD 14.30 NS NS NS Gl Value A GL EQ LUX 07/08 USD 9.84 -11.7 15.4 -18.0 Short Mat Dollar I US BD LUX 07/08 USD 7.31 2.3 11.7 0.2 Am Income A2 US BD LUX 07/08 USD 20.10 5.6 16.9 8.9 world’s wealth. I can’t believe that with European Union will prompt an exodus to But there are new funds every month, the were greedy. ... The answer doesn’t always Gl Balanced (Euro) I EU BA LUX 07/08 USD 14.75 NS NS NS Gl Value B GL EQ LUX 07/08 USD 9.00 -12.1 14.2 -18.7 US Thematic Research A US EQ LUX 07/08 USD 8.11 -4.9 13.7 -7.8 Am Income B US BD LUX 07/08 USD 8.64 5.1 16.1 8.1 Gl Balanced A US BA LUX 07/08 USD 15.75 -4.4 14.6 -7.6 Gl Value I GL EQ LUX 07/08 USD 10.51 -11.3 16.3 -17.3 US Thematic Research B US EQ LUX 07/08 USD 7.42 -5.5 12.6 -8.8 only 1% or 2% of the world’s wealth you can Geneva. “After all,” he chuckles, “we can’t Asians are traders in their soul. At the mo- have to be regulation. The best regulation Am Income B2 US BD LUX 07/08 USD 17.26 5.2 16.1 8.1 Gl Balanced B US BA LUX 07/08 USD 14.90 -4.9 13.5 -8.5 India Growth A EA EQ LUX 07/08 USD 131.44 3.6 42.9 NS US Thematic Research I US EQ LUX 07/08 USD 8.76 -4.6 14.7 -7.1 stir the markets, cause the collapse of all move to Switzerland as there will be ment they are less disciplined than the U.S. is still common sense. But the problem in Am Income I US BD LUX 07/08 USD 8.64 5.8 17.6 9.6 Gl Balanced I US BA LUX 07/08 USD 16.39 -4.1 15.4 -7.0 India Growth AX EA EQ LUX 07/08 USD 115.06 3.7 43.2 16.0 Greece or the default of Lehman Brothers. some major infrastructure problems if we or the British who have been managing the past is that everyone lost their common Maybe the general public can believe it, but do.” money with leverage for a very long time, sense.” For information about listing your funds, please contact: Justin Jones tel: +44 207 842 9674; email: [email protected] 28 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 9 Advertisement [ INTERNATIONAL INVESTMENT FUNDS www.wsj.com/funddata ] Advertisement WORLD NEWS

NAV —%RETURN— NAV —%RETURN— NAV —%RETURN— NAV —%RETURN— FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR

Pictet-Conv. Bonds-P EUR EU BD LUX 07/08 EUR 99.37 NS NS NS Asset Sele C H-CHF OT OT LUX 07/09 CHF 93.89 -2.5 0.1 NS Asset Sele Original D GBP EU BA LUX 07/09 GBP 99.96 -2.0 0.8 NS Pictet-Digital Comm-P USD OT EQ LUX 07/08 USD 116.57 -0.9 24.9 3.1 Asset Sele C H-GBP OT OT LUX 07/09 GBP 95.43 -2.2 1.0 NS Asset Sele Original ID GBP EU BA LUX 07/09 GBP 99.59 -2.0 0.5 NS Pictet-Eastern Europe-P EUREU EQ LUX 07/08 EUR 343.31 8.9 67.2 -6.7 Asset Sele C H-JPY OT OT LUX 07/09 JPY 9465.43 -2.1 0.6 NS Pictet-Emerging Markets-P USDGL EQ LUX 07/09 USD 498.52 -7.6 24.4 -9.6 Asset Sele C H-NOK OT OT LUX 07/09 NOK 109.44 -1.7 1.3 NS Who could be Japan’s Pictet-Eu Equities Sel-P EUREU EQ LUX 07/08 EUR 408.65 -0.7 24.0 -6.4 Asset Sele C H-SEK OT OT LUX 07/09 SEK 135.75 -2.5 0.2 7.2 Pictet-EUR Bonds-P EU BD LUX 07/08 EUR 397.43 3.4 6.0 5.7 Asset Sele C H-USD OT OT LUX 07/09 USD 95.19 -2.3 0.7 NS n BANC INTERNACIONAL D'ANDORRA. BANCA MORA. Pictet-EUR Bonds-Pdy EU BD LUX 07/08 EUR 291.44 3.4 6.0 5.7 Asset Sele CG-EUR OT OT LUX 07/09 GBP 96.92 -2.1 NS NS Avgd. Meritxell 96, Andorra la Vella. Andorra. Ph. +376.884884 www.bibm.ad Pictet-EUR Corporate Bonds-PEU BD LUX 07/08 EUR 151.33 2.3 10.3 8.3 Asset Sele D H-SEK OT OT LUX 07/09 SEK 125.21 -2.5 0.3 NS n SG ASSET MANAGEMENT HTTP://WWW.SGAM.COM Andfs. Anglaterra UK EQ AND 07/08 GBP 7.65 -7.1 20.2 -2.3 Pictet-EUR Corporate Bonds-PdyEU BD LUX 07/08 EUR 102.59 2.3 10.3 8.3 Choice Global Value -C- GL EQ LUX 07/09 SEK 72.76 -5.8 15.0 -9.9 Andfs. Borsa Global GL EQ AND 07/08 EUR 5.99 -7.8 14.4 -13.2 Pictet-EUR High Yield-P EU BD LUX 07/08 EUR 152.22 3.5 28.2 7.2 Choice Global Value -D- GL EQ LUX 07/09 SEK 67.87 -5.7 15.1 -9.8 A company of Amundi Group Andfs. Emergents GL EQ AND 07/08 USD 15.73 -9.4 25.1 -6.7 Pictet-EUR High Yield-Pdy EU BD LUX 07/08 EUR 83.44 3.5 28.1 7.2 Choice Global Value -I- GL EQ LUX 07/09 EUR 6.84 1.1 33.4 -9.8 Bonds ConvEurope A EU BD LUX 07/08 EUR 31.35 5.7 12.3 2.1 next prime minister? Andfs. Espanya EU EQ AND 07/08 EUR 11.68 -16.0 8.0 -8.4 Pictet-EUR Liquidity-P EU MM LUX 07/08 EUR 136.08 0.1 0.3 1.3 Choice Japan Fd -C- JP EQ LUX 07/09 JPY 44.83 -4.3 -3.9 -18.9 Bonds Eur Corp A EU BD LUX 07/07 EUR 23.28 0.8 5.6 4.1 Andfs. Estats Units US EQ AND 07/08 USD 13.69 -8.8 14.2 -10.7 Pictet-EUR Liquidity-Pdy EU MM LUX 07/08 EUR 96.75 0.1 0.3 1.3 Choice Japan Fd -D- JP EQ LUX 07/09 JPY 40.15 -4.3 -3.8 -18.9 Bonds Eur Hi Yld A EU BD LUX 07/07 EUR 21.21 3.0 22.7 5.6 Andfs. Europa EU EQ AND 07/08 EUR 7.05 -10.1 14.0 -9.9 Pictet-EUR Sovereign Liq-P EU MM LUX 07/08 EUR 102.41 0.0 0.1 1.1 Choice Jpn Chance/Risk -C- JP EQ LUX 07/09 JPY 45.83 -10.1 -4.5 -22.2 Bonds EURO A EU BD LUX 07/07 EUR 42.11 2.6 4.7 7.0 BY MIHO INADA the DPJ did well in upper house Kazuhiro Haraguchi Andfs. Franca EU EQ AND 07/08 EUR 8.70 -10.6 13.8 -10.3 Pictet-EUR Sovereign Liq-PdyEU MM LUX 07/08 EUR 99.92 0.0 0.0 1.1 Choice NthAmChance/Risk -C-US EQ LUX 07/09 USD 3.73 -5.7 19.6 -11.7 Bonds Europe A EU BD LUX 07/08 EUR 40.45 3.4 5.2 6.9 elections under his leadership in Mr. Haraguchi, internal affairs Andfs. Japo JP EQ AND 07/08 JPY 473.61 -7.3 2.5 -14.7 Pictet-Europe Index-P EUR EU EQ LUX 07/08 EUR 100.98 -1.0 25.6 -4.1 Ethical Europe Fd -C- EU EQ LUX 07/09 EUR 1.92 -1.9 25.2 -8.5 Bonds US MtgBkSec A US BD LUX 04/29 USD 24.41 -4.7 11.9 0.0 Prime Minister Naoto Kan has 2004, but was ousted from the posi- minister, would be a long shot, but Andfs. Plus Dollars US BA AND 07/08 USD 9.21 -2.5 8.9 -4.5 Pictet-European Sust Eq-P EUREU EQ LUX 07/08 EUR 134.75 0.4 27.7 -3.4 Europe Fund -C- EU EQ LUX 07/09 EUR 2.82 -0.3 28.0 -7.0 Bonds World A GL BD LUX 07/07 USD 42.26 0.6 4.9 4.3 Andfs. RF Dolars US BD AND 07/08 USD 11.64 1.8 8.5 1.4 Pictet-Glo Emerging Debt-P USDGL BD LUX 07/08 USD 254.49 4.4 16.6 12.9 Europe Fund -D- EU EQ LUX 07/09 EUR 1.51 -0.3 28.0 NS Eq. AsiaPac Dual Strategies AAS EQ LUX 07/08 USD 9.46 -9.3 20.4 -3.8 been weakened by Sunday’s elec- tion a year later when the party is seen as a close ally of Mr. Andfs. RF Euros EU BD AND 07/08 EUR 10.90 0.7 8.7 1.6 Pictet-Glo Emerging Debt-PdyGL USD BD LUX 07/08 USD 165.28 4.4 16.6 12.9 Europe Index Fund EU EQ LUX 07/09 EUR 4.03 -2.0 24.7 -8.5 Eq. China A AS EQ LUX 07/08 USD 21.07 -12.7 8.2 -0.2 tion, and his tenure possibly short- took a beating in the lower house Ozawa—and perhaps the candidate Andorfons EU BD AND 07/08 EUR 14.56 0.4 9.7 1.2 Pictet-Greater China-P USD AS EQ LUX 07/09 USD 324.49 -9.1 12.8 -0.4 Global Chance/Risk Fd -C- GL EQ LUX 07/09 EUR 0.64 4.7 30.9 -1.9 Eq. Concentrated Euroland A EU EQ LUX 07/08 EUR 83.47 -10.2 9.0 -12.3 Andorfons Alternative PremiumGL EQ AND 05/31 EUR 101.35 2.4 7.4 -6.1 Pictet-Indian Equities-P USDEA EQ LUX 07/09 USD 367.39 0.3 35.7 9.4 Global Fd -C- GL EQ LUX 07/09 USD 1.97 -7.7 17.1 -12.5 Eq. ConcentratedEuropeA EU EQ LUX 07/08 EUR 26.59 -1.5 22.3 -7.1 ened. Even if he survives the imme- elections. Mr. Okada expressed whom Mr. Ozawa would put forth if Andorfons Mix 30 EU BA AND 07/08 EUR 9.37 -2.0 12.6 -5.7 Pictet-Japan Index-P JPY JP EQ LUX 07/09 JPY 8405.52 -5.4 -0.9 -17.6 Global Fd -D- GL EQ LUX 07/09 USD 1.22 -7.6 17.1 NS Eq. Emerging Europe A EU EQ LUX 07/07 EUR 25.39 7.8 57.7 -15.3 diate fallout from the results in stronger support to raise the unpop- he were seeking to bring Mr. Kan Andorfons Mix 60 EU BA AND 07/08 EUR 8.79 -5.2 13.0 -11.6 Pictet-Japanese Eq 130/30-PJP JPY EQ LUX 07/09 JPY 4267.81 -3.6 1.4 -16.1 Nordic Fd -C- NO EQ LUX 07/09 EUR 6.12 NS NS NS Eq. Equities Global Energy OT EQ LUX 07/08 USD 15.34 -15.4 9.2 -24.5 coming days, he could face pressure ular 5% consumption tax during his down. Mr. Haraguchi, 51, studied at Pictet-Japanese Eq Sel-I JPY JP EQ LUX 07/09 JPY 7347.18 -5.1 -1.2 -20.4 Eq. Euroland A EU EQ LUX 07/08 EUR 10.02 -7.5 15.6 -11.7 n n SEB Fund 2 CHARTERED ASSET MANAGEMENT PTE LTD - TEL NO: 65-6835-8866 Pictet-Japanese Eq Sel-P JPYJP EQ LUX 07/09 JPY 7102.62 -5.4 -1.8 -20.9 Eq. Euroland MidCapA EU EQ LUX 04/30 EUR 14.61 1.4 -45.7 -33.8 from within the Democratic Party of run against Yukio Hatoyama for the Matsushita Institute of Govern- Choice Asia ex. Japan -C- AS EQ LUX 07/09 USD 7.19 -4.1 20.6 1.2 Fax No: 65-6835 8865, Website: www.cam.com.sg, Email: [email protected] Pictet-MENA-P USD OT OT LUX 07/07 USD 44.99 0.3 NS NS Eq. Euroland Small Cap A EU EQ LUX 07/07 EUR 140.17 -0.7 24.4 -5.5 Choice Asia ex. Japan -D- AS EQ LUX 07/09 USD 1.26 -4.1 20.6 NS Japan to step aside before the party party leader last year, but has since ment and Management, a school CAM-GTF Limited AS EQ MUS 07/02 USD 318770.21 16.1 64.0 16.6 Pictet-Pac (ExJpn) Idx-P USDAS EQ LUX 07/09 USD 252.44 -8.6 29.7 -3.2 Currency Alpha EUR -IC- OT OT LUX 07/09 EUR 10.27 -0.3 -2.9 -1.5 Eq. EurolandCyclclsA OT EQ LUX 07/07 EUR 17.64 -0.9 22.5 -7.0 Pictet-Piclife-P CHF CH BA LUX 07/08 CHF 775.54 -2.3 8.2 0.3 leadership vote scheduled for Sep- scaled back the language. Mr. Okada embracing free-market policies that n Currency Alpha EUR -RC- OT OT LUX 07/09 EUR 10.16 -0.5 -3.3 -1.9 Eq. EurolandFinancialA OT EQ LUX 07/08 EUR 9.87 -12.8 13.4 -13.6 DJE INVESTMENT S.A. Pictet-Premium Brands-P EUROT EQ LUX 07/08 EUR 74.78 13.4 52.2 12.8 tember—or risk facing a challenge is known for his clean image as well was funded by the late founder of Currency Alpha SEK -ID- OT OT LUX 07/09 SEK 91.72 -0.3 -3.1 -3.6 Eq. Glbl Emg Cty A GL EQ LUX 07/07 USD 8.26 -14.6 5.5 -14.3 internet: www.dje.lu email: [email protected] phone:+00 352 269 2522 0 fax:+00 352 269 25252Pictet-Russian Equities-P USDEE EQ LUX 07/08 USD 61.79 -4.2 59.8 -18.6 Currency Alpha SEK -RC- OT OT LUX 07/09 SEK 96.24 -0.5 -3.3 -1.9 Eq. Global A GL EQ LUX 07/08 USD 25.92 -6.9 19.6 -8.8 then. Having taken office in early as his strong interest in environ- Panasonic Corp. to nurture Japan’s DJE Real Estate P OT EQ LUX 07/09 EUR 8.90 0.5 -0.1 -3.3 Pictet-Security-P USD GL EQ LUX 07/08 USD 100.30 0.0 24.4 3.6 Generation Fd 80 -C- OT OT LUX 07/09 SEK 7.96 -0.5 14.1 0.0 Eq. Global Resources A GL EQ LUX 07/08 USD 103.55 -5.2 32.9 -14.4 DJE-Absolut P GL EQ LUX 07/09 EUR 204.80 0.0 16.5 -4.4 Pictet-Small Cap Europe-P EUREU EQ LUX 07/08 EUR 478.10 4.5 29.4 -3.3 June, that would make him Japan’s mental policies. leaders. Mr. Haraguchi is known for Nordic Focus SH A NO EQ LUX 07/09 EUR 84.25 3.3 41.5 0.6 Eq. Gold Mines A OT EQ LUX 07/08 USD 31.85 5.1 40.8 5.2 DJE-Alpha Glbl P EU BA LUX 07/09 EUR 171.12 -4.0 10.0 -4.7 Pictet-Timber-P USD GL EQ LUX 07/08 USD 100.78 -6.3 35.9 NS Nordic Focus SH B NO EQ LUX 07/09 SEK 85.64 3.3 41.5 0.6 Eq. India A EA EQ LUX 07/08 USD 130.93 0.1 32.4 10.2 fifth consecutive premier unable to Seiji Maehara his calls to shift power from the DJE-Div& Substanz P EU EQ LUX 07/09 EUR 216.68 0.7 20.8 -0.1 Pictet-USA Index-P USD US EQ LUX 07/08 USD 87.45 -4.4 21.6 -6.7 Nordic Focus SH C NO EQ LUX 07/09 NOK 84.57 3.3 41.5 0.6 Eq. Japan CoreAlpha A JP EQ LUX 07/08 JPY 7270.07 0.2 -1.6 -8.6 hold the title for more than a year. Mr. Maehara, Japan’s young and central government to regions and DJE-Gold&Resourc P OT EQ LUX 07/09 EUR 187.37 10.0 42.9 1.5 Pictet-USD Government Bonds-PUS BD LUX 07/08 USD 535.44 5.6 5.7 5.7 Russia Fd -C- EE EQ LUX 07/09 EUR 9.46 7.5 75.0 -6.7 Eq. Japan Sm Cap A JP EQ LUX 07/08 JPY 1026.35 -4.0 -2.9 -10.9 Pictet-USD Government Bonds-PdyUS BD LUX 07/08 USD 382.86 5.6 5.7 5.7 DJE-Renten Glbl P EU BD LUX 07/09 EUR 135.53 3.8 8.5 6.2 Eq. Japan Target A JP EQ LUX 07/08 JPY 1641.21 0.2 -7.2 -7.1 One factor keeping Mr. Kan ambitious transport minister, is an- has spoken out against raising the Pictet-USD Liquidity-P US MM LUX 07/08 USD 131.03 0.0 0.1 0.8 LuxPro-Dragon I AS EQ LUX 07/09 EUR 145.84 -7.7 14.1 7.9 n SEB Fund 3 Eq. Latin America A GL EQ LUX 07/07 USD 107.80 -7.3 37.6 -10.5 afloat, at least for now: the lack of other candidate for the top post and consumption tax before economic Pictet-USD Liquidity-Pdy US MM LUX 07/08 USD 84.85 0.0 0.1 0.8 LuxPro-Dragon P AS EQ LUX 07/09 EUR 141.55 -8.0 13.5 7.4 Ethical Glbl Index Fd -D- GL EQ LUX 07/09 USD 0.73 -11.9 14.7 -10.8 Eq. US ConcenCore A US EQ LUX 07/07 USD 20.99 -7.1 19.0 -4.6 Pictet-USD Sovereign Liq-P US MM LUX 07/08 USD 101.57 0.0 0.0 0.7 an obvious successor. Here’s a look has made no secret of his ambitions recovery has taken root. LuxTopic-Aktien Europa EU EQ LUX 07/09 EUR 16.79 -5.2 12.1 2.4 Ethical Glbl lndex Fd -C- GL EQ LUX 07/09 USD 0.76 NS NS NS Eq. US Focused A US EQ LUX 07/07 USD 14.71 -7.3 15.1 -18.1 Pictet-USD Sovereign Liq-PdyUS MM LUX 07/08 USD 100.07 0.0 0.0 0.7 LuxTopic-Pacific AS EQ LUX 07/09 EUR 17.86 9.0 37.1 2.5 Ethical Sweden Fd -D- NO EQ LUX 07/09 SEK 44.30 6.5 32.4 13.1 Eq. US Lg Cap Gr A US EQ LUX 07/07 USD 13.94 -8.6 15.2 -13.9 at those considered most likely to to one day rule the country. Mr. Yoshito Sengoku Pictet-Water-P EUR GL EQ LUX 07/08 EUR 134.49 7.7 26.8 2.2 Index Linked Bd Fd SEK -D- OT BD LUX 07/09 SEK 13.13 2.2 4.8 4.1 Eq. US Mid Cap A US EQ LUX 07/07 USD 30.01 0.4 35.1 -5.5 follow him at the helm should he Maehara, 48, openly criticized Prime The 64-year-old chief cabinet n HSBC ALTERNATIVE INVESTMENTS LIMITED Pictet-World Gvt Bonds-P USDEU BD LUX 07/08 USD 165.95 1.0 3.6 4.1 Medical Fd -D- OT EQ LUX 07/09 USD 3.07 -7.7 11.7 -5.5 Eq. US Multi Strg A US EQ LUX 07/07 USD 20.02 -5.9 19.5 -11.6 T +44 20 7860 3074 F + 44 20 7860 3174 www.hail.hsbc.com Pictet-World Gvt Bonds-Pdy USDEU BD LUX 07/08 USD 134.58 1.0 3.6 4.1 Short Medium Bd Fd SEK -D-NO MM LUX 07/09 SEK 8.56 -0.1 0.0 1.1 step aside. Minister Hatoyama for a lack of secretary is loyal to Mr. Kan and is Eq. US Rel Val A US EQ LUX 07/08 USD 19.30 -6.3 20.9 -10.8 n Technology Fd -C- OT EQ LUX 07/09 USD 0.20 -5.9 23.0 NS HSBC Portfolio Selection Fund n POLAR CAPITAL PARTNERS LIMITED Eq. US Sm Cap Val A US EQ LUX 07/08 USD 15.14 -5.1 22.4 -14.8 Katsuya Okada leadership, and also Ichiro Ozawa, viewed as a fiscal hawk, calling for Sel Emerg Mkt Debt GL BD GGY 12/31 USD 350.10 42.6 54.7 6.4 Technology Fd -D- OT EQ LUX 07/09 USD 2.38 -5.9 23.0 -0.8 International Fund Managers (Ireland) Limited PH - 353 1 670 660 Fax - 353 1 670 1185 Money Market EURO A EU MM LUX 07/07 EUR 27.44 0.2 0.4 1.6 Mr. Okada, the foreign minister, the powerful former DPJ secretary- debate to raise the consumption tax. Sel Emerg Mkt Equity GL EQ GGY 12/31 USD 207.66 63.0 73.6 -11.3 U.S. Index Fd -C- US EQ LUX 07/09 USD 1.75 -5.4 21.4 -7.8 Global Technology OT EQ IRL 07/08 USD 13.55 0.7 29.2 5.7 Money Market USD A US MM LUX 07/07 USD 15.85 0.1 0.2 0.9 Sel Euro Equity EUR OT OT GGY 12/31 EUR 96.29 32.6 27.0 -17.7 U.S. Index Fd -D- US EQ LUX 07/09 USD 1.73 -6.3 20.3 -8.2 has taken the lead in negotiations general, for alleged mishandling of While the lawyer-turned-politician Japan Fund USD JP EQ IRL 07/09 USD 16.36 3.0 5.0 3.5 Sel European Equity EU EQ GGY 12/31 USD 181.94 42.7 49.9 -16.8 World Fd -C- NO BA LUX 07/09 USD 27.86 -2.7 23.0 NS with the U.S. over the military base political funds. An only child, Mr. used to be a member of the Socialist Polar Healthcare Class I USD OT EQ IRL 07/08 USD 11.95 -7.6 12.4 NS World Fd -D- NO BA LUX 07/09 USD 2.08 -4.4 20.9 -6.4 Sel Glob Equity GL EQ GGY 12/31 USD 189.25 35.2 42.1 -15.7 Polar Healthcare Class R USDOT EQ IRL 07/08 USD 11.89 -7.9 11.7 NS in Okinawa, steering the new gov- Maehara attended high school and Party, he now embraces free-market Sel Glob Fxd Inc GL BD GGY 12/31 USD 143.46 11.4 15.8 -1.4 n SEB Fund 4 (Clockwise from top left): Retuers (3), Bloomberg News ernment to reverse course and ac- the prestigious Kyoto University on policies and has been critical of Sel Pacific Equity AS EQ GGY 12/31 USD 143.75 68.5 80.5 -7.1 n Hemisphere Management (Ireland) Limited Short Bond Fd EUR -C- EU MM LUX 07/09 EUR 1.27 -0.1 -0.2 0.1 Sel US Equity US EQ GGY 12/31 USD 123.56 24.0 30.0 -14.2 Discovery USD A OT OT CYM 05/31 USD 109.20 10.8 12.5 12.2 Short Bond Fd EUR -D- EU MM LUX 07/09 EUR 0.49 -1.3 -1.4 NS Clockwise from top left: Japan’s Foreign Minister Katsuya Okada, Transport cept the American position. Mr. scholarships. At 43, he briefly be- moves to expand the role of the Sel US Sm Cap Eq US EQ GGY 12/31 USD 168.82 30.1 42.6 -14.8 Elbrus USD A GL EQ CYM 06/25 USD 10.42 35.9 -24.7 -17.9 Short Bond Fd SEK -C- NO MM LUX 07/09 SEK 21.96 0.0 0.3 1.3 n THE NATIONAL INVESTOR Minister Seiji Maehara, Chief Cabinet Secretary Yoshito Sengoku and Internal Okada, who turns 57 Wednesday, came the youngest-ever person to government-run postal service in Europn Conviction USD B EU EQ CYM 05/31 USD 135.06 -1.7 0.6 6.4 Short Bond Fd SEK HNWC NO MM LUX 07/09 SEK 11.11 0.2 NS NS PO Box 47435, Abu Dhabi, UAE Web:www.tni.ae n HSBC Trinkaus Investment Managers SA Affairs Minister Kazuhiro Haraguchi. came to the party’s forefront when head the DPJ. the financial-services sector. Europn Forager USD B EU EQ CYM 05/31 USD 226.81 1.3 15.9 4.7 Short Bond Fd SEK HNWD NO MM LUX 07/09 SEK 9.95 -1.9 NS NS MENA Real Estate Fund OT OT ARE 07/01 USD 843.35 -12.3 -12.9 -31.6 E-Mail: [email protected] Latin America USD A GL EQ CYM 04/30 USD 14.21 2.2 -4.7 14.7 Short Bond Fd USD -C- US MM LUX 07/09 USD 2.48 -0.3 -0.6 0.0 MENA Special Sits Fund OT OT BMU 05/31 USD 1100.19 1.9 6.7 NS Telephone: 352 - 47 18471 Paragon Limited USD A EU EQ CYM 11/28 USD 324.09 12.7 12.7 14.2 UAE Blue Chip Fund OT OT ARE 07/01 AED 4.58 -14.0 -14.5 -38.5 Prosperity Return Fund A JP BD LUX 07/05 JPY 10029.71 1.1 NS NS UK Fund USD A OT OT CYM 04/30 USD 187.82 2.1 6.9 5.4 n SEB Fund 5 Prosperity Return Fund B EU BD LUX 07/05 JPY 8867.26 -10.3 NS NS Bond Fd SEK -C- NO BD LUX 07/09 SEK 43.93 2.6 4.1 7.9 n PT CIPTADANA ASSET MANAGEMENT Prosperity Return Fund C EU BD LUX 07/05 USD 90.69 -6.0 NS NS Bond Fd SEK -D- NO BD LUX 07/09 SEK 12.30 -1.1 0.4 6.0 Prosperity Return Fund D EU BD LUX 07/05 EUR 107.88 10.5 NS NS Tel: +6221 25574 883 Fax: +6221 25574 893 Website: www.ciptadana-asset.com Bond Fd SEK HNWD NO BD LUX 07/08 SEK 8.93 2.7 NS NS Renaissance Hgh Grade Bd A JP BD LUX 07/05 JPY 10037.82 1.4 NS NS Indonesian Grth Fund GL EQ BMU 07/07 USD 147.21 15.6 59.0 8.1 Corp. Bond Fd EUR -C- EU BD LUX 07/09 EUR 1.31 3.0 11.9 5.9 Corp. Bond Fd EUR -D- EU BD LUX 07/09 EUR 0.97 3.1 12.4 5.9 Renaissance Hgh Grade Bd B EU BD LUX 07/05 JPY 8814.06 -10.6 NS NS n RUSSELL INVESTMENT GROUP Start-up party holds one key to a coalition Corp. Bond Fd SEK -C- NO BD LUX 07/09 SEK 13.13 4.3 13.9 4.5 Renaissance Hgh Grade Bd C EU BD LUX 07/05 USD 89.54 -6.3 NS NS Multi-Style, Multi-Manager Funds www.russell.com Corp. Bond Fd SEK -D- NO BD LUX 07/09 SEK 9.55 4.3 13.9 4.5 n YUKI INTERNATIONAL LIMITED Renaissance Hgh Grade Bd D EU BD LUX 07/05 EUR 104.45 7.3 NS NS ACTION FRANCE A EU EQ IRL 07/08 EUR 658.57 -6.9 21.4 -7.3 Danish Mortgage Bond Fd EURNO -ID- BD LUX 07/09 EUR 106.46 6.7 9.3 7.3 Tel +44-207-269-0203 www.yukifunds.com BY YOREE KOH in the DPJ’s side—particularly given DPJ. “We are not teaming up with of the 438 candidates gunning for a and social security persuaded him CORE EUROZONE EQ B EU EQ IRL 07/08 EUR 789.65 -5.1 23.0 -5.8 Danish Mortgage Bond Fd EURNO -RC- BD LUX 07/09 EUR 115.77 6.5 8.8 9.4 n YMR-N Series the DPJ’s hefty defeat on Sunday the fake reform power,” said Your spot in the upper house this elec- to vote for the start-up on Sunday EURO FIXED INCOME A EU BD IRL 07/08 EUR 1315.47 5.7 12.9 4.6 Flexible Bond Fd -C- NO BD LUX 07/09 SEK 21.32 -0.1 0.1 3.3 YMR-N Growth Fund JP EQ IRL 07/09 JPY 8610.00 -9.0 2.2 -19.1 EURO FIXED INCOME B EU BD IRL 07/08 EUR 1409.00 6.0 13.6 5.2 Flexible Bond Fd -D- NO BD LUX 07/09 SEK 11.32 -0.1 0.1 3.3 YMR-N Small Cap Fund JP EQ IRL 07/09 JPY 6429.00 -8.3 -3.8 -16.1 TOKYO—As the ruling Demo- evening. Party leader Yoshimi Watanabe to tion. The bulk of its members are rather than support the DPJ as he EUROPEAN SMALL CAP A EU EQ IRL 07/08 EUR 1255.35 4.5 35.3 -4.0 cratic Party of Japan wraps up its Prime Minister Naoto Kan is reporters in Tokyo on Saturday, ac- relative newcomers to politics, and did last summer. “It was meaningful EUROPEAN SMALL CAP B EU EQ IRL 07/08 EUR 1348.87 4.9 36.1 -3.4 n SEB Sicav 1 n Yuki 77 Series EUROZONE AGG A EUR EU EQ IRL 07/08 EUR 655.43 -0.1 30.3 -4.2 Choice Emerging Mkts Fd -C- GL EQ LUX 07/09 USD 2.52 -7.3 25.0 -4.5 Yuki 77 General JP EQ IRL 07/09 JPY 5385.00 -12.5 -8.7 -23.7 freshman year, its bumbling start likely to woo Your Party into becom- cording to local Japanese media re- many previously served as financial- for us to have a change” in the gov- n MP ASSET MANAGEMENT INC. EUROZONE AGG B EUR EU EQ IRL 07/08 EUR 944.85 0.2 31.0 -3.6 Eastern Europe exRussia Fd -C-EE EQ LUX 07/09 EUR 2.64 NS NS NS has given rise to a new beacon of ing a coalition partner for the DPJ. ports, a sentiment he repeated on services executives, medical doctors ernment, said Mr. Sugimoto, who Tel: + 386 1 587 47 77 GLB REAL EST SEC A OT EQ IRL 07/08 USD 872.12 -2.7 32.6 -11.1 n Yuki Chugoku Series n SEB Sicav 2 change: Your Party, a powerful MP-BALKAN.SI OT OT SVN 07/08 EUR 20.99 -13.7 -10.4 -35.7 GLB REAL EST SEC B OT EQ IRL 07/08 USD 901.92 -2.4 33.4 -10.6 Yuki Chugoku Jpn Gen JP EQ IRL 07/09 JPY 6166.00 -9.7 -1.9 -19.5 Although Your Party was largely ig- Sunday night. and entrepreneurs. works for a pharmaceutical firm. Choice Asia SmCap exJpn -C- AS EQ LUX 07/09 SEK 31.66 -2.9 19.8 14.0 MP-TURKEY.SI OT OT SVN 07/08 EUR 41.20 18.7 59.4 15.4 GLB REAL EST SEC EH A OT EQ IRL 07/08 EUR 787.70 -2.1 29.9 -11.1 Yuki Chugoku JpnLowP JP EQ IRL 07/09 JPY 7484.00 -0.8 -5.6 -17.3 start-up party whose solid gains on nored by the ruling party since its “Your Party can set some pretty The party advocates a smaller But the DPJ’s embrace of big gov- Eastern Europe SmCap Fd -C-EU EQ LUX 07/09 EUR 2.95 NS NS NS GLB REAL EST SEC SH B OT EQ IRL 07/08 GBP 74.45 -1.7 31.2 -11.2 n Europe Chance/Risk Fd -C- EU EQ LUX 07/09 EUR 1042.65 0.3 28.5 -8.9 n Sunday will likely force the ruling inception, the DPJ has recently stiff demands on DPJ to adopt its government and its vociferous ernment has made him question if it PAREX ASSET MANAGEMENT IPAS GLB STRAT YIELD A EU BD IRL 07/08 EUR 1688.40 5.1 25.0 7.8 Yuki Hokuyo Japan Series Listed Private Equity -C- OT OT LUX 07/09 EUR 139.21 6.8 51.0 NS Republikas square 2a, Riga, LV-1522, Latvia GLB STRAT YIELD B EU BD IRL 07/08 EUR 1812.28 5.4 25.8 8.5 Yuki Hokuyo Jpn Gen JP EQ IRL 07/09 JPY 4123.00 -11.8 -4.6 -25.0 party to woo it aggressively as a co- changed its tune. Mr. Kan began to policies,” said Gerald Curtis, a pro- stance against a sales-tax increase can guide the country to future Listed Private Equity -IC- OT OT LUX 07/09 EUR 84.81 10.1 62.8 NS www.parexgroup.com Tel: +371 67010810 GLOBAL BOND A EU BD IRL 07/08 EUR 1285.12 16.3 22.8 16.1 Yuki Hokuyo Jpn Inc JP EQ IRL 07/09 JPY 4908.00 -6.5 -3.2 -19.8 Listed Private Equity -ID- OT OT LUX 07/09 EUR 81.07 9.9 62.1 NS alition partner. cite the party name during stump fessor at Columbia University and promoted by the major parties has prosperity. “To keep saying, ‘we will Parex Eastern Europ Bal OT OT LVA 07/08 EUR 14.39 7.6 24.5 1.9 GLOBAL BOND B EU BD IRL 07/08 EUR 1372.91 16.7 23.6 16.9 Yuki Hokuyo Jpn Sm Cap JP EQ IRL 07/09 JPY 4668.00 -8.6 -5.2 -15.9 Nordic Small Cap -C- NO EQ LUX 07/09 EUR 136.70 0.6 43.7 NS Your Party, which opposes tax in- speeches in the final week of the expert in Japanese politics. “But if resonated with a growing number of protect you,’ doesn’t do any good,” Parex Eastern Europ Bd EU BD LVA 07/08 USD 16.26 11.1 30.5 7.3 GLOBAL BOND EH A GL BD IRL 07/08 EUR 1471.30 7.0 14.5 7.7 Nordic Small Cap -IC- NO EQ LUX 07/09 EUR 137.48 0.8 44.5 NS n Yuki Mizuho Series Parex Russian Eq EE EQ LVA 07/08 USD 19.97 2.3 42.6 -18.3 GLOBAL BOND EH B GL BD IRL 07/08 EUR 1566.52 7.3 15.2 8.4 creases and favors small govern- campaign, a sign that Your Party’s they join up it undermines what voters. he said. “When I think of my child, Yuki Mizuho Gen Jpn III JP EQ IRL 07/09 JPY 3900.00 -11.8 -4.0 -26.6 JAPAN EQUITY A JP EQ IRL 07/08 JPY 10962.79 -5.8 -3.4 -17.0 n SEB Sicav 3 Yuki Mizuho Jpn Dyn Gro JP EQ IRL 07/09 JPY 4186.00 -10.3 -3.8 -26.4 ment, has at least nine seats in the surge in support appears to be a they stand for.” With his one-month-old daughter I can’t let the country move in the JAPAN EQUITY B JP EQ IRL 07/08 JPY 11721.08 -5.5 -2.8 -16.5 Asset Sele Defensive EUR -C-OT OT LUX 07/09 EUR 97.66 -2.2 -1.2 NS Yuki Mizuho Jpn Exc 100 JP EQ IRL 07/09 JPY 6108.00 -12.4 -1.1 -21.9 upper house following Sunday’s worry for DPJ lawmakers. Created last August by former in his arms, 35-year-old Hiroshi socialistic direction, which I believe PAC BASIN (X JPN) A AS EQ IRL 07/08 USD 2155.98 -5.7 28.5 2.1 Asset Sele Defensive GBP -D-OT OT LUX 07/09 GBP 96.92 -2.1 NS NS Yuki Mizuho Jpn Gen JP EQ IRL 07/09 JPY 7916.00 -8.1 -0.5 -19.2 PAC BASIN (X JPN) B AS EQ IRL 07/08 USD 2308.08 -5.4 29.2 2.8 Asset Sele Defensive SEK -A-OT OT LUX 07/09 SEK 76.60 -2.1 -1.0 -14.2 elections, making it a formidable Your Party has said it isn’t inter- members of the two biggest parties Sugimoto said reading Your Party’s would make the country go bank- Yuki Mizuho Jpn Gro JP EQ IRL 07/09 JPY 5794.00 -8.9 -5.3 -21.2 PAN EUROPEAN EQUITY A EU EQ IRL 07/08 EUR 964.57 0.2 30.7 -4.1 Asset Sele Defensive SEK -C-OT OT LUX 07/09 SEK 97.61 -2.2 -1.4 NS Yuki Mizuho Jpn Inc JP EQ IRL 07/09 JPY 7282.00 -4.6 -0.5 -21.0 minority force that could be a thorn ested in forming a coalition with the in Japan, Your Party has backed 44 positions on the consumption tax rupt.” PAN EUROPEAN EQUITY B EU EQ IRL 07/08 EUR 1031.31 0.5 31.5 -3.6 Asset Sele Defensive SEK -D-OT OT LUX 07/09 SEK 68.52 -2.1 -1.0 -14.2 Yuki Mizuho Jpn Lg Cap JP EQ IRL 07/09 JPY 4643.00 -10.5 -2.5 -21.5 n PICTET & CIE, ROUTE DES ACACIAS 60, CH-1211 GENEVA 73 US EQUITY A US EQ IRL 07/08 USD 833.27 -4.5 22.5 -8.8 Asset Sele Defensive USD -C-OT OT LUX 07/09 USD 98.96 -2.0 -1.2 NS Yuki Mizuho Jpn LowP JP EQ IRL 07/09 JPY 11001.00 -4.8 -3.8 -14.4 Tel: + 41 (58) 323 3000 Web: www.pictetfunds.com US EQUITY B US EQ IRL 07/08 USD 894.90 -4.2 23.3 -8.3 Asset Sele Opp C EUR OT OT LUX 07/09 EUR 94.65 -4.6 NS NS US SMALL CAP EQUITY A US EQ IRL 07/08 USD 1287.26 -0.1 29.8 -6.9 Yuki Mizuho Jpn PGth JP EQ IRL 07/09 JPY 6988.00 -12.2 -7.3 -24.1 Pictet-Agriculture-P EUR GL EQ LUX 07/08 EUR 124.70 1.5 35.4 NS Asset Sele Opp C H NOK OT OT LUX 07/09 NOK 98.29 -4.0 0.9 NS US SMALL CAP EQUITY B US EQ IRL 07/08 USD 1383.35 0.2 30.6 -6.3 Yuki Mizuho Jpn SmCp JP EQ IRL 07/09 JPY 6721.00 -5.8 -0.8 -14.2 Pictet-Asian Eq ExJpn-I USD AS EQ LUX 07/09 USD 165.69 -7.2 19.0 -4.7 Asset Sele Opp C H SEK OT OT LUX 07/09 SEK 96.22 -4.8 -0.4 NS Yuki Mizuho Jpn Val Sel AS EQ IRL 07/09 JPY 5272.00 -6.7 -3.1 -18.1 Pictet-Asian Eq ExJpn-P USDAS EQ LUX 07/09 USD 157.00 -7.6 18.0 -5.5 Asset Sele Opp D GBP OT OT LUX 07/09 GBP 92.20 -4.2 NS NS n SEB ASSET MANAGEMENT S.A. Yuki Mizuho Jpn YoungCo AS EQ IRL 07/09 JPY 2455.00 -9.9 -11.4 -22.7 Pictet-Biotech-P USD OT EQ LUX 07/08 USD 244.03 -15.3 -8.1 -15.5 Asset Sele Opp IC EUR OT OT LUX 07/09 EUR 97.35 -4.6 0.1 NS www.seb.se Asset Sele Opp ID H GBP OT OT LUX 07/09 GBP 97.63 -4.2 0.7 NS Pictet-CHF Liquidity-P CH MM LUX 07/08 CHF 124.12 -0.1 0.0 0.3 n Japan voters thrash ruling DPJ Yuki Shizuoka Japan Series n SEB Fund 1 Asset Sele Opp ID H SEK OT OT LUX 07/09 SEK 96.84 -4.8 -0.4 NS Pictet-CHF Liquidity-P dy CH MM LUX 07/08 CHF 93.33 -0.1 0.0 0.3 Yuki Shizuoka General Japan JP EQ IRL 07/09 JPY 4989.00 -8.0 -0.7 -20.2 Asset Sele C EUR OT OT LUX 07/09 EUR 13.55 -2.4 0.5 6.9 Asset Sele Original C EUR EU BA LUX 07/09 EUR 99.23 -2.2 0.1 NS Continued from first page DPJ actually took power, nothing pre-election pledge to boost the DPJ failed to meet its goals of win- had really changed. The results were consumption tax to rein in the coun- Advertisement [ ALTERNATIVE INVESTMENT FUNDS www.wsj.com/funddata ] Advertisement ning a majority in the upper house actually worse than I expected.” try’s outsize borrowing, thinking of parliament—and even Mr. Kan’s The DPJ’s handling of the Oki- that Japan’s voters would under- more modest goal of maintaining nawa base issue was particularly stand the severity of its fiscal condi- 12-month and 2-year returns may be calculated over 11- and 23-month periods NAV —%RETURN— NAV —%RETURN— pending receipt and publication of the last month end price. FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR existing strength. As of 2 a.m. in Ja- “embarrassing,” he added. tions and appreciate his honesty. To NAV —%RETURN— Special Opp Inst EUR OT OT CYM 06/18 EUR 86.51 -0.3 15.7 NS Real AdvantEdge EUR OT OT JEY 06/18 EUR 104.66 -3.3 1.2 NS INDICES pan, networks projected the party Since the DPJ has a huge major- persuade the public, Mr. Kan alluded FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR Special Opp Inst USD OT OT CYM 06/18 USD 98.40 -0.2 16.3 NS Real AdvantEdge USD OT OT JEY 06/18 USD 105.16 -2.9 1.7 NS won as few as 44 seats of the 121 ity in the more-powerful lower to Greece’s example, saying inaction n ALEXANDRA INVESTMENT MANAGEMENT Special Opp USD OT OT CYM 06/18 USD 96.06 -0.5 15.5 NS Trading Adv JPY OT OT GGY 06/18 JPY 9508.09 3.1 -0.7 NS NAV —————— %RETURN —————— seats contested—or less than 40% of house, it will remain the ruling would lead Japan to a similar fate. GGY FUND NAME GF DATE CR NAV 1-WK 1-MO 1-Q 1-YR 2-YR Alexandra Convertible Bond FundOT I, OT Ltd. VGB (Class 02/26 A) USD 1828.22 20.3 67.1 NS n Trading AdvantEdge OT OT 05/28 USD 144.18 2.4 -1.2 NS HSBC Portfolio Selection Fund Trading AdvantEdge EUR OT OT GGY 06/18 EUR 130.08 2.1 -1.6 NS the total—down from 54. In last party despite Sunday’s setback. But The prime minister admitted af- n GH Fund AP OT OT GGY 04/30 EUR 120.82 3.5 -13.4 -3.8 n D'AURIOL FUNDS WWW.DAURIOL.BIZ Trading AdvantEdge GBP OT OT GGY 06/18 GBP 138.03 2.5 -1.0 NS ARIX ABSOLUTE RETURN INVESTABLE INDEX 2 FUNDS OF FUNDS OF HEDGE FUNDS GH Fund CHF Hdg OT OT GGY 05/28 CHF 110.84 0.1 8.5 -5.3 Feri Institutional Advisors, www.feri.de year’s election, the DPJ took 64% of it will become harder for the party ter Sunday’s election that the strat- D'Auriol Alt Non-Lev A EU OT CYM 05/31 EUR 99.63 -1.4 0.7 -11.7 GH Fund EUR Hdg (Non-V) OT OT GGY 04/30 EUR 109.43 2.9 -15.9 -5.9 ARIX Composite Gross USD OT OT GBR 06/30.00 USD1408.74 7.4 -12.7 -6.5 the seats at stake. to govern, as most legislation needs egy didn’t work. “My discussion on D'Auriol Opp F3 EUR EU MM CYM 02/26 EUR 968.47 -1.9 -1.8 -13.3 GH Fund GBP Hdg OT OT GGY 06/18 GBP 132.30 0.2 7.2 NS Sunday’s election was, in many the approval of the upper house. the consumption tax was received GH Fund Inst USD OT OT GGY 06/18 USD 112.21 0.4 7.8 NS n HERMITAGE CAPITAL MANAGEMENT LTD. NAV —%RETURN— GH FUND S EUR OT OT CYM 06/18 EUR 128.87 0.7 8.2 NS FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR ways, a statement of disenchant- Investors, in particular, are wor- by the voters as rather abrupt,” a Tel: +7501 258 3160 www.hermitagefund.com GH FUND S GBP OT OT GGY 06/18 GBP 133.73 0.8 8.4 NS ment by Japan’s voters, who had ried about Mr. Kan’s ability to meet sober-faced Mr. Kan said at his news The Hermitage Fund GL EQ JEY 03/12 USD 963.12 4.5 105.6 -23.2 GH Fund S USD OT OT CYM 06/18 USD 151.22 0.7 8.4 NS Key Hedge EUR -IC- OT OT LUX 05/31 EUR 103.23 1.1 7.1 NS n MERIDEN GROUP Key Hedge EUR-RC- OT OT LUX 05/31 EUR 102.23 0.9 6.6 NS embraced the DPJ with such high his pledge to limit borrowing. In conference. “I, myself, feel that a big n HORSEMAN CAPITAL MANAGEMENT LTD. GH Fund USD OT OT GGY 05/28 USD 274.56 0.3 9.3 -3.7 JEY Tel: + 376 741 175 Fax: + 376 741 183 Email: [email protected] T: +44(0)20 7838 7580, F: +44(0) 20 7838 7590, www.horsemancapital.com Hedge Investments OT OT 06/18 USD 140.42 NS 7.7 NS n SEB KEY Market Independent II hopes last summer, only to find the light of the election results, the reason [for the defeat] was I didn’t Leverage GH USD OT OT GGY 05/28 USD 120.11 -0.2 16.7 -11.4 Antanta Combined Fund EE EQ AND 06/25 USD 373.77 1.4 37.4 -29.5 Horseman EmMkt Opp EUR GL EQ USA 01/31 EUR 187.60 -23.2 -21.7 -7.7 AND Key Market Independent II EUROT -RC- OT LUX 05/31 EUR 97.35 0.9 7.1 -0.4 MultiAdv Arb CHF Hdg OT OT JEY 05/28 CHF 96.27 1.8 10.4 -7.2 Antanta MidCap Fund EE EQ 07/02 USD 680.84 -4.1 66.5 -37.4 party was in many ways like the promise “is meaningless,” said Ma- explain it well enough.” Horseman EmMkt Opp USD GL EQ USA 01/31 USD 194.78 -24.5 -22.7 -9.1 AND Key Market Independent II SEKOT -I- OT LUX 05/31 SEK 94.44 0.8 6.8 -0.6 MultiAdv Arb EUR Hdg OT OT JEY 05/28 EUR 105.18 2.1 11.6 -6.4 Meriden Opps Fund GL OT 07/07 EUR 46.95 -21.7 -39.0 -33.2 Horseman EurSelLtd EUR EU EQ GBR 06/30 EUR 185.44 -5.0 5.0 -7.3 long-ruling Liberal Democratic Party koto Yamashita, chief Japan inter- If Mr. Kan loses his job—still a MultiAdv Arb GBP Hdg OT OT JEY 05/28 GBP 113.47 2.2 11.4 -6.7 Meriden Protective Div GL EQ AND 09/01 EUR 79.14 NS NS NS n Horseman EurSelLtd USD EU EQ GBR 06/30 USD 193.17 -4.3 5.3 -7.4 SEB KEY Recovery it had displaced—indecisive and est-rate strategist at Deutsche Bank. remote possibility at this point—he CYM Horseman Glbl Ltd EUR GL EQ CYM 06/30 USD 335.32 -9.6 -18.6 -11.2 MultiAdv Arb S EUR OT OT 06/18 EUR 112.96 2.6 10.8 NS Key Recovery -IC- OT OT LUX 05/31 EUR 92.51 2.5 12.0 NS CYM hampered by scandals—and had the “There is a high possibility that would be the fifth consecutive Horseman Glbl Ltd USD GL EQ CYM 06/30 USD 335.32 -9.6 -18.6 -11.2 MultiAdv Arb S GBP OT OT 05/28 GBP 118.35 2.7 12.9 -5.5 Key Recovery -RC- OT OT LUX 05/31 EUR 91.51 2.3 11.4 NS MultiAdv Arb S USD OT OT CYM 06/18 USD 128.99 2.4 10.9 NS n OTHER FUNDS n WINTON CAPITAL MANAGEMENT LTD added disadvantage of inexperience. the... pledge will be broken.” prime minister to step down a year n HSBC ALTERNATIVE INVESTMENTS LIMITED MultiAdv Arb USD OT OT JEY 05/28 USD 197.96 2.0 11.7 -5.0 For information about these funds, please contact us on Tel: +44 (0) 207 842 9694/9633 T +44 20 7860 3074 F + 44 20 7860 3174 www.hail.hsbc.com Tel: +44 (0)20 7610 5350 Fax: +44 (0)20 7610 5301 “When the LDP ended its long Japan’s political leadership will or less into the job. The musical n Medinvest Plc Dublin OT OT IRL 06/30 USD 1481.20 NS 1.3 -4.4 HSBC Absolute Companies HSBC Uni-folio Winton Evolution EUR Cls H GL OT CYM 05/31 EUR 987.58 6.4 8.4 NS rule, there were certain expectations now be consumed with horse trad- chairs of leaders has been cited of- Asian AdbantEdge EUR OT OT JEY 06/18 EUR 96.61 -2.7 1.0 NS CYM Global Absolute OT OT GGY 03/31 GBP 1.11 2.9 16.5 0.6 n SEB ALTERNATIVE INVESTMENT Winton Evolution GBP Cls G GL OT 05/31 GBP 995.29 6.7 9.0 NS JEY CYM and a sense of excitement,” said ing, as Mr. Kan struggles to find ten as a reason why Japan has been Global Absolute EUR OT OT GGY 05/13 EUR 1.56 2.8 14.2 NS Asian AdvantEdge OT OT 06/18 USD 177.97 -2.6 1.7 NS SEB KEY Europe Equity Long Short Winton Evolution USD Cls F GL OT 05/31 USD 1252.64 6.4 8.7 0.1 JEY VGB Global Absolute USD OT OT GGY 03/31 USD 2.05 2.8 15.2 0.3 Emerg AdvantEdge OT OT 06/18 USD 162.20 -3.1 4.5 NS Key Europe Long/Short EUR -IC-OT OT LUX 05/31 EUR 92.38 0.0 5.8 NS Winton Futures EUR Cls C GL OT 05/31 EUR 207.14 6.7 9.1 2.3 Tatsuo Shigefuji, a 41-year-old in- friendly opposition parties to work slow in making important decisions. Emerg AdvantEdge EUR OT OT JEY 06/18 EUR 90.02 -3.4 4.1 NS Key Europe Long/Short EUR -RC-OT OT LUX 05/31 EUR 91.37 -0.3 5.2 NS Winton Futures GBP Cls D GL OT VGB 05/31 GBP 224.13 6.7 9.5 2.8 n HSBC ALTERNATIVE STRATEGY FUND Europ AdvantEdge EUR OT OT JEY 06/18 EUR 131.64 -0.8 7.7 NS Winton Futures JPY Cls E GL OT VGB 05/31 JPY 14650.41 8.2 10.3 1.3 surance-company employee who with in parliament while fending off —Yoree Koh, Kana Inagaki, Special Opp EUR OT OT CYM 06/18 EUR 91.27 -0.6 14.9 NS Europ AdvantEdge USD OT OT JEY 06/18 USD 140.01 -0.7 8.1 NS n SEB KEY Hedge Winton Futures USD Cls B GL OT VGB 05/31 USD 736.23 6.8 9.5 2.1 backed the DPJ last year, but cast a critics in his own party. Miho Inada, Kosaku Narioka

vote in Tokyo this time for one of Mr. Kan made his party’s pros- and Andrew Monahan Associated Press For information about listing your funds, please contact: Justin Jones tel: +44 207 842 9674; email: [email protected] many smaller parties. “But when the pects tougher with an unpopular contributed to this article. Mr. Kan walks past a poster of himself at DPJ election headquarters on Sunday. 8 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 29 WORLD NEWS BLUE CHIPS BONDS

Below, a look at the Dow Jones Stoxx 50, the biggest and best known companies in Dow Jones Industrial Average P/E: 15 Major players benchmarks Europe, including the U.K. LAST: 10198.03 s 59.04, or 0.58% Somalia has to rummage for cash Stoxx Europe 50: Friday's best and worst... YEAR TO DATE: t 230.02, or 2.2% OVER 52 WEEKS s 2,051.51, or 25.2%

Government, lacking funds to fight militants, hires U.S. lawyers to recover money stashed abroad by past regimes Previous close, in STOCK PERFORMANCE High Company Country Industry Volume local currency Previous session YTD 52-week 11500 BY SARAH CHILDRESS Rio Tinto U.K. General Mining 6,786,826 3,173 3.22% -6.4% 66.8% Close Stretched thin UniCredit Italy Banks 394,276,771 2.05 3.17 -8.3 30.7 Low The cash-strapped Somali gov- ArcelorMittal France Iron & Steel 6,886,138 23.66 2.40 -26.5 12.9 50–day 11000 ernment is searching to recover Somalia government moving average BHP Billiton U.K. General Mining 6,088,876 1,853 1.84 -7.1 42.8 funds locked in bank accounts finances, 2010 t BASF SE Germany Commodity Chemicals 2,627,438 45.75 1.63 5.3 65.4 around the world, in an attempt to 10500 stave off bankruptcy and fund a bat- $125 million tle that has accelerated in recent Societe Generale France Banks 5,118,523 38.40 -0.98% -21.6 7.4 days against an al Qaeda-backed in- $110 million Nokia Finland Telecommunications Equipment 16,436,141 6.68 -0.89 -25.1 -33.7 10000 surgency. Amount Siemens Germany Diversified Industrials 2,617,014 73.22 -0.64 14.0 57.7 Somali and African Union troops government needs BP PLC U.K. Integrated Oil & Gas 50,038,000 364.80 -0.60 -39.2 -21.0 last week launched a counterattack 9500 to operate, France Telecom France Fixed Line Telecommunications 8,205,129 14.95 -0.53 -14.3 -3.9 against Islamic militants in the capi- 100 maintain security tal, Mogadishu, in an effort to carve and pay its out space to govern. At least 48 9000 employees ...And the rest of Europe's blue chips people have been killed, according 9 16 23 30 7 14 21 28 4 11 18 25 2 9 Latest, Latest, May June July to medical personnel. in local STOCK PERFORMANCE in local STOCK PERFORMANCE The government of President Company/Country (Industry) Volume currency Latest YTD 52-week Company/Country (Industry) Volume currency Latest YTD 52-week Note: Price-to-earnings ratios are for trailing 12 months Sheikh Sharif Sheikh Ahmed con- 75 Intesa Sanpaolo 91,033,789 2.43 1.36% -23.0% 11.8% Deutsche Bank 3,916,823 49.25 0.48% -0.3% 12.8% trols only a small area of the city, Italy (Banks) Germany (Banks) DJIA component stocks Astrazeneca 3,586,308 3,222 1.19 10.7 21.4 Anglo American 4,252,824 2,422 0.41 -10.7 46.4 with much of the largely lawless U.K. (Pharmaceuticals) U.K. (General Mining) Volume, CHANGE country under the sway of clans, pi- 2010 Shortfall Royal Dutch Shell A 6,108,657 21.06 1.18 -0.2 25.8 GDF Suez 3,595,335 24.97 0.40 -17.6 4.9 Stock Symbol in millions Latest Points Percentage rates or militants from the al Qaeda- U.K. (Integrated Oil & Gas) France (Multiutilities) AT&T T 19.6 $24.83 0.26 1.06% ENI 14,226,721 15.61 1.17 -12.3 -1.6 Tesco 26,501,285 395.05 0.28 -7.7 10.5 Alcoa AA 21.0 10.94 0.22 2.05 backed group, al Shabaab. Italy (Integrated Oil & Gas) U.K. (Food Retailers & Wholesalers) Mr. Ahmed has reached out to 50 AmExpress AXP 8.3 42.58 0.46 1.09 SAP AG 2,959,519 37.22 1.14 12.8 30.3 Diageo 2,559,492 1,088 0.28 0.4 25.3 BankAm BAC 86.3 15.11 0.25 1.68 neighbors to support the fight. A Germany (Software) U.K. (Distillers & Vintners) Boeing BA 3.1 64.66 –0.07 –0.11 special summit of East African lead- $22 million BNP Paribas 4,540,300 50.09 1.05 -10.4 13.7 Telefonica 20,578,365 16.21 0.25 -17.0 3.9 Expected revenue France (Banks) Spain (Fixed Line Telecommunications) Caterpillar CAT 6.5 64.72 1.55 2.45 ers this week ordered the deploy- Chevron CVX 11.4 71.84 1.43 2.03 through customs Banco Bilbao Vizcaya Argentaria 29,823,578 9.65 1.05 -24.2 11.8 Banco Santander 60,238,153 9.97 0.19 -13.7 22.0 ment of 2,000 additional troops to Spain (Banks) Spain (Banks) CiscoSys CSCO 41.5 22.70 0.15 0.67 Somalia to strengthen the 6,000- duties ABB Ltd. 7,027,292 19.73 0.97 -1.1 24.9 Vodafone Group 67,071,091 143.50 0.14 -0.1 27.8 CocaCola KO 6.5 52.40 –0.02 –0.04 Switzerland (Industrial Machinery) U.K. (Mobile Telecommunications) troop African Union peacekeeping 25 Disney DIS 8.5 33.75 0.41 1.23 Roche Holding 2,298,084 150.30 0.94 -14.5 3.4 Daimler AG 3,677,766 41.64 0.13 11.8 71.8 mission. Switzerland (Pharmaceuticals) Germany (Automobiles) DuPont DD 6.0 36.90 0.61 1.68

To keep itself running, Mr. Reuters $0.52 million Sanofi-Aventis 3,581,510 47.54 0.93 -13.7 15.2 ING Groep 21,638,919 6.83 0.12 -1.0 39.3 ExxonMobil XOM 26.0 58.78 –0.03 –0.05 France (Pharmaceuticals) Netherlands (Life Insurance) Ahmed’s government is trying to re- A fighter from al Shabaab, the Islamist insurgency trying to unseat the government of Somalia, runs from a burned Donor money GenElec GE 46.0 14.95 0.12 0.81 plenish its coffers a few million dol- African Union tank in the capital, Mogadishu, on July 2. Assicurazioni Generali 5,251,408 15.24 0.93 -19.0 11.2 Nestle S.A. 4,689,489 51.95 0.10 3.5 27.0 HewlettPk HPQ 12.7 45.25 –0.23 –0.51 remaining from Italy (Full Line Insurance) Switzerland (Food Products) HomeDpt HD 13.5 28.26 0.11 0.39 lars at a time. Previous Somali re- Allianz SE 1,669,716 83.91 0.89 -3.7 34.9 Deutsche Telekom 14,117,903 9.97 0.02 -3.1 25.1 2009 Intel INTC 52.8 20.24 0.14 0.70 gimes have left at least $100 million when Mr. Barre’s regime collapsed ties that was seen by The Wall That can be complicated in some 0 Germany (Full Line Insurance) Germany (Mobile Telecommunications) in overseas accounts—nearly in 1991. Street Journal. countries that lack full diplomatic Credit Suisse Group 4,535,067 44.52 0.88 -13.0 -6.6 GlaxoSmithKline 14,679,296 1,142 ... -13.5 5.2 IBM IBM 3.9 127.96 –0.01 –0.01 Sources: Somali government budget; Switzerland (Banks) U.K. (Pharmaceuticals) enough to keep the government run- For the past two decades, Mr. A representative of Shulman ties with Somalia, including the U.S., JPMorgChas JPM 30.4 38.85 0.69 1.81 government accounting figures Novartis 3,751,361 52.25 0.87 -7.5 22.8 L.M. Ericsson Telephone Series B 6,065,350 82.35 -0.06 25.0 11.9 JohnsJohns JNJ 12.1 60.54 –0.84 –1.37 ning for a year—according to people Amalow has worked with banks to Rogers confirmed that the firm was where some of the bank accounts Switzerland (Pharmaceuticals) Sweden (Communications Technology) KftFoods KFT 6.0 28.99 –0.04 –0.14 familiar with the matter. ensure that the accounts couldn’t be working to recover assets on behalf are located. Though the U.S. sup- UBS 7,594,694 15.13 0.87 -5.7 19.8 British American Tobacco 2,755,348 2,209 -0.11 9.5 30.3 McDonalds MCD 4.5 69.22 0.20 0.29 “It was something very impor- accessed by anyone until an estab- of the Somali government. The firm ports the Somali government, it has country’s first published budget in Switzerland (Banks) U.K. (Tobacco) Bayer AG 1,887,275 46.40 0.86 -17.1 30.1 RWE AG 1,325,238 54.92 -0.29 -19.2 4.0 Merck MRK 12.0 36.30 0.44 1.23 tant, to return the Somali republic’s lished central government could has experience in tracing and recov- yet to establish formal diplomatic two decades—is themed “Keeping Germany (Specialty Chemicals) Germany (Multiutilities) Microsoft MSFT 53.8 24.27 –0.14 –0.57 frozen assets,” said a Somali official claim them, according to a person ering assets, often for companies or ties with the administration. Our Heads Above the Water.” The Total S.A. 5,159,553 38.30 0.67 -14.9 6.4 AXA 6,147,421 13.29 -0.37 -19.6 15.7 Pfizer PFE 32.6 14.77 –0.05 –0.34 who is familiar with the effort. “It familiar with the matter. wealthy individuals. A U.S. State Department spokes- government estimates it needs France (Integrated Oil & Gas) France (Full Line Insurance) ProctGamb PG 9.6 61.75 –0.20 –0.32 Unilever 3,985,985 22.73 0.66 -0.1 32.7 E.ON AG 5,640,961 22.74 -0.46 -22.2 -0.6 3M MMM 2.8 82.16 0.94 1.16 could help restore the country’s lost Mr. Amalow declined to com- Work on recovering the money man didn’t respond to requests for about $110 million per year to boost Netherlands (Food Products) Germany (Multiutilities) TravelersCos TRV 3.1 51.15 1.06 2.12 life.” ment. Somali officials familiar with began in earnest in February. At comment on the collection effort. its security sector and pay govern- Iberdrola 20,990,013 5.16 0.64 -22.7 -4.0 BG Group 5,390,354 1,082 -0.46 -3.6 10.4 The missing funds were stashed the matter said the president had least $1.5 million has been recov- U.S. officials have said the cur- ment employees—which is far short Spain (Conventional Electricity) U.K. (Integrated Oil & Gas) UnitedTech UTX 2.9 67.51 0.28 0.42 away in U.S. and European bank ac- instructed them not to discuss the ered from European banks so far, rent government represents Soma- of the $22 million it expects to earn HSBC Holdings 25,029,499 627.10 0.63 -11.5 26.7 Barclays 48,347,883 300.45 -0.51 8.9 4.3 Verizon VZ 18.3 26.65 –0.13 –0.49 U.K. (Banks) U.K. (Banks) counts under the last strong federal matter publicly until it was con- according to a Somali government lia’s best hope for stability after in customs duties this year. Somalia WalMart WMT 11.6 49.43 0.25 0.51 government—led by Mohamed Siad cluded, but some shared details on official familiar with the process. He nearly two decades of conflict. The relies instead on donor support to Sources: Thomson Reuters Source: WSJ Market Data Group Barre nearly 20 years ago—and the condition of anonymity. declined to offer further details. U.S. has given the government pay civil servants and government last government, of President Ab- Last year, President Ahmed ap- The Somali government needed weapons, assisted with efforts to troops, who are liable to defect dullahi Yusuf Ahmed, who resigned pointed Mr. Amalow to lead the ef- help collecting the funds because train its troops and invested in the without a regular monthly salary. in 2008. fort to recover the funds. The gov- many of the accounts have become African Union peacekeeping mission Yet donors have given little Credit derivatives Credit-default swaps: European companies Ali Amalow, the head of the cen- ernment contracted Maryland-based dormant. And banks, as part of their that protects the weak Mogadishu money to the Somali government di- Tracking Spreads on credit derivatives are one way the market rates Atitsmostbasic,thepricingofcredit-defaultswapsmeasureshowmuchabuyerhastopaytopurchase-and tral bank under Mr. Barre, kept a law firm Shulman, Rogers, Gandal, normal compliance process, are typ- regime. rectly, in part due to concerns about creditworthiness. Regions that are treading in rough waters can see detailed roster of the funds, and Pordy & Ecker, P.A., to help recover ically required to ensure those at- Yet the Somali government isn’t accountability. By December, the how much a seller demands to sell-protection from default on an issuer's debt. The snapshot below gives a spreads swing toward the maximum—and vice versa. Indexes below sense which way the market was moving yesterday. brushed off attempts by various the assets, according to a copy of tempting to access the account merely weak, it is nearly broke. Its government had a little less than $3 credit are for five-year swaps. warlords to retrieve the money the agreement between the two par- should be authorized to do so. 2010 budget—believed to be the million from donors in its coffers. Markit iTraxx Indexes SPREAD RANGE, in pct. pts. Mid-spread, since most recent roll Showing the biggest improvement... And the most deterioration markets Index: series/version in pct. pts. Mid-price Coupon Maximum Minimum Average CHANGE, in basis points CHANGE, in basis points Europe: 13/1 1.18 99.18% 0.01% 1.42 0.75 1.07 Yesterday YesterdayFive-day 28-day Yesterday YesterdayFive-day 28-day Eur. High Volatility:13/1 1.75 96.61 0.01 2.16 1.11 1.56 Caja de Ahorros del Pilkington Group 66 ...... –4 Mediterraneo 642 –75 –87 –40 dealmakers Europe Crossover:13/2 5.33 98.69 0.05 5.88 5.28 5.60 Eneco Hldg 54 ...... BP 387 –49 –146 –70 Six months on, push for Haiti aid falters Asia ex-Japan IG:13/1 1.32 98.52 0.01 1.72 0.87 1.20 Lanxess 128 ... 4–8 Brit Awys PLC 534 –36 –66 –133 Japan: 13/1 1.30 98.56 0.01 1.76 0.85 1.23 Schneider Elec 65 ... –3 –6 TUI AG 788 –34 –133 –130 BY JOSÉ DE CÓRDOBA with the United Nations, says one head of the U.N.’s humanitarian re- estimates the value of the assets to Almeida, the IADB’s Haiti head of Note: Data as of July 8 Linde 62 ... 14 Kabel Deutschland GmbH 507 –27 –50 –83 big achievement is the formation of lief program, says the effort re- which no one can claim title at mission. In percentage points BASF Specialty Chems Hldg 26 1 ...... Spreads Alcatel Lucent 727 –27 –40 –78 PORT-AU-PRINCE, Haiti—Traffic an interim commission with both quires a massive influx of heavy about $5.2 billion, roughly the same In an effort to address the land- Index roll Debenhams Fin Hldg 176 1 –1 1 Asia ex-Japan IG 2.00 FIAT 447 –26 –45 –75 inches past mountains of rubble. Haitian members and representa- equipment, and he is searching for amount that has been pledged for use and ownership problem, Cheryl Spreads on five- Tesco PLC 87 1 –4 –1 t Wind Acquisition Fin 681 –26 –42 –48 Tropical rains pound refugee camps tives of major donors to oversee $120 million to remove the worst of the first two years of Haiti’s recon- Mills, counselor to Secretary of year swaps for 1.50 Six Continents 57 1 ... –2 Virgin Media Fin 517 –26 –41 –80 where hundreds of thousands of major countrywide reconstruction the rubble from Port-au-Prince. struction. The loss of documents in State Hillary Clinton, pressed the corporate debt; Alliander 57 1 11 1.00 Codere Fin Luxembourg 785 –25 –82 –66 people huddle amid the stench of projects during the next 18 months. Little is available for such proj- the earthquake makes that situation Haitian government to assign offi- based on Markit Source: Markit Group

excrement. Six months after Janu- The commission, which was created ects, as most money from donor na- worse. Most Haitians seeking to cials to streamline solving land dis- iTraxx indexes. t 0.50 ary’s earthquake devastated Haiti, and received congressional approval tions and charities are earmarked start over can’t access bank credit putes and award title when neces- Australia 0 the process of reconstruction ap- in just two months, was seen as nec- for emergency relief—food, shelter because they have no collateral to sary. But land is a tricky political Jan. Feb. Mar. April May June July Europe: Bank revenues from equity capital markets pears to have come to a halt. essary before international donors and medicine. One reason the gov- offer up. The failure to demonstrate issue in Haiti, which was the world’s 2010 Billions of dollars in pledged aid would release rebuilding funds. ernment has had a difficult time clear title acts as a brake to devel- first black republic when it was Source: Markit Group Behind every IPO, n Equity capital markets n Debt capital markets (both in billions, left axis) have yet to arrive. Decisions on how Progress on setting up commissions, dealing with basic issues such as re- opment, affecting small investors founded in 1804 after a slave revolt follow-on or to spend the money have not begun however, offers little consolation for settlement: It is often impossible to and multinational lenders alike. against France. Founder Jean- convertible equity 12 60% to be made. An estimated one mil- many Haitians. determine who owns homes and Days after the temblor, officials Jacques Dessalines prohibited offering is one or ECM as a percentage of total lion Haitians remain displaced. And The rubble is the most visible land. A decade ago, 97% of rural res- from the Haitian government and whites from owning property. more investment (right axis) everywhere, there is rubble. sign of the lack of progress. The 7.0- idents in Haiti and 68% of city resi- the Inter-American Development Haitian officials say privately t banks. At right, 8 40 “After six months, we have not magnitude temblor left 20 million dents lacked clear title to their Bank believed they had found a that President René Préval has investment banks moved an inch,” says Jean-Guy Noél, cubic meters, or 700 million cubic housing, according to a study by Pe- large piece of land the bank could balked on giving the commission historical and year- a businessman who runs a money- feet, of debris, the U.N. estimates. ruvian economist Hernando de Soto. acquire to build a tent city to house broader powers over land rights. A WSJ.com to-date revenues 4 20 transfer service. Adds Gérard Brun, Cleanup efforts so far have made a “Eighty-two percent of real es- 10,000 displaced Haitians. top Haitian official said Mr. Préval from global equity- Follow the markets throughout the day, with updated stock a member of a government commis- minor dent. For the most part, orga- tate and 68% of businesses in Haiti Two months later, the bank believes it isn’t politically advisable capital-market sion charged with planning the fu- nized rubble removal is in the hands are in the extralegal economy,” says pulled the plug on the $3 million for a commission, half of whose quotes, news and commentary at WSJ.com. (ECM) deals 0 0 ture of the capital, Port-au-Prince: of thousands of Haitians who work Mr. de Soto, who has offered the in- project after it found “the person members are foreigners, to be final Also, receive emails that summarize the day’s trading in Eu- “Everything is stalling.” with picks, shovels and wheelbar- formation to a U.N. commission on who claimed control of the land judge of land issues “in the land of rope and Asia. To sign up, go to WSJ.com/Email. 2004 2005 2006 2007 2008 2009 2010 Leslie Voltaire, Haiti’s liaison rows for $5 a day. Nigel Fisher, the legal empowerment of the poor. He wasn’t the owner,” says Eduardo Dessalines.” Source: Dealogic 30 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 7 GLOBAL MARKETS LINEUP U.S. NEWS Commodities Prices of futures contracts with the most open interest Currencies London close on July 9 Global divide EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; ICE-US: ICE Futures U.S.MDEX: Bursa Malaysia Per In Per In | Cumulative change in jobs around the world since the recession began Derivatives Berhad; LIFFE: London International Financial Futures Exchange; COMEX: Commodity Exchange; LME: London Metals Exchange; AMERICAS Per euro In euros U.S. dollar U.S. dollars EUROPE Per euro In euros U.S. dollar U.S. dollars NYMEX: New York Mercantile Exchange;ICE-EU: ICE Futures Europe Argentina peso-a 4.9733 0.2011 3.9360 0.2541 Euro zone euro 1 1 0.7914 1.2636 ONE-DAY CHANGE Contract Contract ChileChile U.K. Commodity Exchange Last price Net Percentage high low Brazil real 2.2248 0.4495 1.7608 0.5679 1-mo. forward 1.0000 1.0000 0.7914 1.2636 A major exporter of such THRIVING STRUGGLING Employment keeps sliding Canada dollar 1.3033 0.7673 1.0315 0.9695 3-mos. forward 0.9999 1.0001 0.7914 1.2636 Chile Corn (cents/bu.) CBOT 395.25 -1.00 -0.25% 705.00 343.25 commodities as copper, Chile in the U.K. as businesses 1-mo. forward 1.3037 0.7671 1.0317 0.9692 6-mos. forward 1.0001 0.9999 0.7915 1.2635 6% Soybeans (cents/bu.) CBOT 953.25 7.25 0.77% 1,555.00 809.75 shed jobs as global and the government grapple 3-mos. forward 1.3046 0.7665 1.0325 0.9685 Czech Rep. koruna-b 25.341 0.0395 20.056 0.0499 BrazilBra Wheat (cents/bu.) CBOT 538.00 -10.50 -1.91 762.75 442.50 6-mos. forward 1.3065 0.7654 1.0340 0.9671 Denmark krone 7.4548 0.1341 5.8999 0.1695 commodity prices slumped with a consumer-debt Live cattle (cents/lb.) CME 91.400 -0.725 -0.79 96.900 86.700 Chile peso 679.22 0.001472 537.55 0.001860 Hungary forint 279.63 0.003576 221.31 0.004519 during the recession. But its 4 hangover and a budget Cocoa ($/ton) ICE-US 2,996 27 0.91 3,522 2,237 Colombia peso 2372.13 0.0004216 1877.35 0.0005327 Norway krone 8.0445 0.1243 6.3666 0.1571 relative financial health has deficit even worse than Coffee (cents/lb.) ICE-US 163.85 1.75 180.95 121.75 Hungary 1.08 Ecuador US dollar-f 1.2635 0.7914 1 1 Poland zloty 4.0691 0.2458 3.2204 0.3105 helped it bounce back quickly. those in the U.S. Sugar (cents/lb.) ICE-US 16.61 -0.48 -2.81 22.78 11.79 Mexico peso-a 16.1604 0.0619 12.7897 0.0782 Russia ruble-d 39.037 0.02562 30.895 0.03237 2 Cotton (cents/lb.) ICE-US 74.99 1.00 1.35 100.50 53.87 Peru sol 3.5683 0.2802 2.8240 0.3541 Sweden krona 9.4677 0.1056 7.4929 0.1335 Germany Crude palm oil (ringgit/ton) MDEX 2,300.00 11 0.48 2,725 1,665 Uruguay peso-e 26.661 0.0375 21.100 0.0474 Switzerland franc 1.3365 0.7482 1.0577 0.9454 Brazil Australia Japan Cocoa (pounds/ton) LIFFE 2,385 5 0.21 2,461 1,579 U.S. dollar 1.2635 0.7914 1 1 1-mo. forward 1.3359 0.7485 1.0573 0.9458 Employment took a hit when 0 Deflation and massive Robusta coffee ($/ton) LIFFE 1,709 13 0.77 1,795 1,282 Venezuela bolivar 5.43 0.184281 4.29 0.232848 3-mos. forward 1.3345 0.7493 1.0562 0.9468 the global recession cut government debt are Copper (cents/lb.) COMEX 305.35 3.80 1.26 366.70 166.00 ASIA-PACIFIC 6-mos. forward 1.3322 0.7506 1.0544 0.9484 demand for exports such as SouthSouth Ko KoreaKorerea weighing heavily on regional jet planes, but has Japanese companies' Gold ($/troy oz.) COMEX 1209.80 13.70 1.15 1,266.50 800.00 Australia dollar 1.4441 0.6925 1.1429 0.8750 Turkey lira 1.9621 0.5097 1.5529 0.6440 –2 Canada Japan Silver (cents/troy oz.) COMEX 1807.30 20.10 1.12 1,986.50 1,338.00 China yuan 8.5578 0.1169 6.7729 0.1476 U.K. pound 0.8362 1.1959 0.6618 1.5111 come back strongly, in large confidence and hindering part because Brazil avoided job creation. Aluminum ($/ton) LME 1,992.00 -0.50 -0.03 2,481.50 1,564.50 Hong Kong dollar 9.8242 0.1018 7.7751 0.1286 1-mo. forward 0.8363 1.1958 0.6619 1.5109 part because Brazil avoided Taiwan 3-mos. forward 0.8364 1.1956 0.6620 1.5107 the financial excesses of the Tin ($/ton) LME 17,695.00 45.00 0.25 19,175.00 12,320.00 India rupee 58.9636 0.0170 46.6650 0.0214 the financial excesses of the –4 U.K. Indonesia rupiah 11429 0.0000875 9045 0.0001106 6-mos. forward 0.8367 1.1952 0.6622 1.5102 boom years. Copper ($/ton) LME 6,709.00 39.00 0.58 7,970.00 4,825.00 U.S. Japan yen 111.79 0.008946 88.47 0.011303 MIDDLE EAST/AFRICA U.S. Lead ($/ton) LME 1,830.00 5.00 0.27 2,615.00 1,580.00 1-mo. forward 111.75 0.008949 88.44 0.011307 Bahrain dinar 0.4764 2.0992 0.3770 2.6525 Heavy debts are making it Zinc ($/ton) LME 1,867.00 16.00 0.86 2,659.00 1,490.00 –6 3-mos. forward 111.66 0.008956 88.37 0.011316 Egypt pound-a 7.1991 0.1389 5.6975 0.1755 Australia difficult to restore jobs. Nickel ($/ton) LME 19,185 -115 -0.60 27,590 14,405 6-mos. forward 111.47 0.008971 88.22 0.011335 Israel shekel 4.8874 0.2046 3.8680 0.2585 Strong trade ties with 2008 '09 '10 2008 '09 '10 With government and Crude oil ($/bbl.) NYMEX 76.09 0.65 0.86 132.70 54.69 Malaysia ringgit-c 4.0377 0.2477 3.1955 0.3129 Jordan dinar 0.8949 1.1174 0.7083 1.4119 booming Asian economies consumers facing a long Heating oil ($/gal.) NYMEX 2.0257 0.0204 1.02 3.3990 1.4525 New Zealand dollar 1.7861 0.5599 1.4135 0.7075 Kuwait dinar 0.3677 2.7197 0.2910 3.4364 and a relatively healthy road to financial health and RBOB gasoline ($/gal.) NYMEX 2.0700 0.0189 0.92 2.4410 1.6910 Pakistan rupee 108.413 0.0092 85.800 0.0117 Lebanon pound 1897.22 0.0005271 1501.50 0.0006660 banking system allowed SouthS Korea, Taiwan Canada Germany Hungary banks still cutting back on Natural gas ($/mmBtu) NYMEX 4.418 -0.002 -0.05 10.810 4.140 Philippines peso 58.417 0.0171 46.233 0.0216 Saudi Arabia riyal 4.7386 0.2110 3.7503 0.2666 Australia to get through the TheseT two trade-dominated Banks weathered the crisis Companies avoided mass layoffs Heavily dependent on foreign lending, companies are Brent crude ($/bbl.) ICE-EU 75.65 0.63 0.84 108.50 59.80 Singapore dollar 1.7469 0.5725 1.3825 0.7233 South Africa rand 9.5872 0.1043 7.5875 0.1318 global recession largely economiese suffered a shock when well, but the country’s by sharply cutting the number of investment, including loans reluctant to hire. Gas oil ($/ton) ICE-EU 647.25 4.75 0.74 755.00 499.00 South Korea won 1513.73 0.0006606 1198.00 0.0008347 United Arab dirham 4.6408 0.2155 3.6728 0.2723 unscathed. globalg trade volumes plummeted economy—and its hours their employees worked. denominated in euros, Hungary Taiwan dollar 40.503 0.02469 32.055 0.03120 inin late 2008. But with much workers—suffered due to That has masked the damage the suffered when investors pulled Source: Organization for Economic Cooperation and Development Source: Thomson Reuters; WSJ Market Data Group SDR -f 0.8446 1.1840 0.6684 1.4960 ofo Asia still going strong, they proximity to the U.S. global recession did to Germany’s out and its currency dropped WSJ.com Thailand baht 40.882 0.02446 32.355 0.03091 (Australia, Canada, Chile, Japan, South recovered quickly. export-driven economy. sharply in late 2008. Korea, U.K., U.S); International Labor a-floating rate b-commercial rate c-government rate c-commercial rate d-Russian Central Bank rate f-Special Drawing Rights Organization (all others) Follow the markets throughout the day with updated stock quotes, news and commentary at WSJ.com. from the International Monetary Fund ; based on exchange rates for U.S., British and Japanese currencies. Also, receive email alerts that summarize the day’s trading in Europe and Asia. To sign up, go to WSJ.com/email Note: Based on trading among banks in amounts of $1 million and more, as quoted by Thomson Reuters.

Major stock market indexes Stock indexes from around the world, grouped by region. Shown in local-currency terms. U.S. trails in employment growth Price-to- PREVIOUS SESSION PERFORMANCE Price-to- PREVIOUS SESSION PERFORMANCE earnings ratio* Region/Country Index Close Net change Percentage change Yr.-to-date 52-wk. earnings ratio* Region/Country Index Close Net change Percentage change Yr.-to-date 52-wk. BY MARK WHITEHOUSE ployment in the two Latin American ers—a key driver of the U.S. econ- than in December 2007. exceeding 200% of the country’s an- 23 EUROPE Stoxx Europe 600 250.09 1.49 0.60% -1.2% 26.8% 13 Portugal PSI 20 7317.93 -124.71 -1.68 -13.5 5.4 countries was up 4.5% and 6.8% omy—to pare down their large debt In Asia, the sharp drop in global nual economic output, many compa- 14 Stoxx Europe 50 2430.15 12.51 0.52 -5.8 20.5 ... Russia RTSI 1359.45 3.36 0.25% -4.7 62.8 One year into the global recov- from December 2007, respectively. loads. trade accompanying the recession nies regard higher taxes and auster- 27 Euro Zone Euro Stoxx 255.51 1.27 0.50 -7.0 20.3 10 Spain IBEX 35 10127.3 46.8 0.46 -15.2 8.4 ery, the U.S. is lagging far behind Proximity to the booming econo- As of March, U.S. household debt took a toll on Korea and Taiwan, but ity measures as inevitable, only other major economies in restoring mies of Asia has helped job creation stood at 122% of disposable income, both bounced back quickly as trade adding to their worries. 14 Euro Stoxx 50 2681.20 14.78 0.55 -9.6 17.5 15 Sweden OMX Stockholm 320.17 4.03 1.27 6.9 34.7 jobs lost in the recession. in some cases. Australia has man- down from a peak of 131% in early returned. The two countries, whose As of May, employment in Japan 15 Austria ATX 2333.46 1.91 -6.5 19.0 15 Switzerland SMI 6210.49 54.77 0.89 -5.1 18.6 0.08 A Wall Street Journal analysis of aged to boost total employment by 2008 but still well above the 100% banking systems also survived the was 3.3% down from December 2007. ... Turkey ISE National 100 57150.90 -194.69 8.2 55.4 8 Belgium Bel-20 2462.75 6.76 0.28 -1.9 25.4 -0.34% employment trends in 11 countries 3.7% through May, thanks in part to economists tend to see as sustain- financial crisis well, have already “The risk here for a lot of coun- 11 Czech Republic PX 1147.8 7.0 0.61 2.7 29.2 11 U.K. FTSE 100 5132.94 27.49 0.54 -5.2 24.4 suggests that manageable debt bur- trade in commodities such as iron able. managed to push total employment tries is not a double dip but a pro- 21 Denmark OMX Copenhagen 379.05 -0.41 -0.11% 20.1 44.2 21 ASIA-PACIFIC DJ Asia-Pacific 119.92 1.04 0.87 -2.5 15.3 dens and healthy banking sys- ore with Asian countries that never The picture isn’t much better in back above pre-recession levels. tracted period of stagnation, which 15 Finland OMX Helsinki 6399.45 40.72 0.64 -0.9 19.6 17 Australia SPX/ASX 200 4396.31 39.46 0.91 -9.7 15.9 tems—areas in which the U.S. went into recession. the U.K., where consumers are even Japan offers a troubling example is bad news for creating jobs,” said 14 France CAC-40 3554.48 16.23 0.46 -9.7 19.2 19 China CBN 600 22133.25 599.72 2.79 -23.8 -18.0 doesn’t excel—are proving to be cru- Australia’s banks also emerged more indebted than in the U.S., and for economies such as the U.S. and Nariman Behravesh, the chief econo- 12 Germany DAX 6065.24 29.58 0.49 1.8 32.5 14 Hong Kong Hang Seng 20378.66 328.10 1.64 -6.8 15.1 cial factors in creating jobs. from the financial crisis largely un- where the hard-hit financial sector U.K., which are struggling to gain mist at the IHS Global Insight con- Brazil and Chile, neither of which scathed. accounted for a much larger share of momentum even as governments sultancy. ... Hungary BUX 22593.71 -60.50 -0.27 6.4 57.7 17 India Sensex 17833.54 181.81 1.03 2.1 32.1 suffered banking crises, have seen By contrast, total employment in total employment. build up vast debts. After many The 11 countries in the analysis ... Japan Nikkei Stock Average 9585.32 49.58 -9.1 3.2 19 Ireland ISEQ 2884.23 -10.76 -0.37 -3.0 12.1 0.52 the strongest job growth since the the U.S. in June was down 4.8% from As the country’s new coalition years of falling prices and false re- were chosen because they report 14 Italy FTSE MIB 20478.98 235.25 1.16 -11.9 14.8 ... Singapore Straits Times 2917.17 20.02 0.69 0.7 26.4 beginning of the recession, accord- December 2007. Businesses have government implements harsh eco- coveries, Japanese companies lack jobs data in a relatively timely man- 18 Netherlands AEX 324.42 1.80 0.56 -3.3 33.4 11 South Korea Kospi 1723.01 24.37 1.43 2.4 20.6 ing to data from the Organization been reluctant to hire amid difficul- nomic austerity measures in order the confidence to hire—a problem ner. As a result, many developing 11 Norway All-Shares 398.53 3.79 0.96 -5.1 28.7 17 AMERICAS DJ Americas 288.06 2.52 0.88 -2.8 25.9 for Economic Cooperation and De- ties getting loans from financially to get its budget closer to balance, evident in the country’s persistent countries such as China and India, 17 Poland WIG 40392.05 18.07 0.04 1.0 36.4 15 Brazil Bovespa 63476.32 Closed -7.5 29.0 velopment and the International La- wounded banks and uncertainty hiring remains tepid. In March, total decline in employment. which report infrequently and with 16 Mexico IPC 32004.31 43.67 0.14 -0.4 35.3 bor Organization. In April, total em- about how long it will take consum- employment was still 2.0% lower And with total government debt a large lag, were excluded. Thomson Reuters is the primary data provider for several statistical tables in The Wall Street Journal, including foreign stock quotations, futures and futures options prices, and foreign exchange tables. Reuters real-time data feeds are used *P/E ratios use trailing 12-months, as-reported earnings to calculate various Dow Jones Indexes. Note: Americas index data are as of 5:00 p.m. ET. Sources: Thomson Reuters; WSJ Market Data Group Dow Jones Indexes MSCI indexes Price-to- Price-to- In U.S., value-added tax would be a hard sell Developed and emerging-market regional and country indexes Dividendearnings PERFORMANCE (euros) PERFORMANCE (U.S.dollars) Dividendearnings PERFORMANCE (euros) PERFORMANCE (U.S.dollars) yield* ratio* Dows Jones Index Last Daily 52-wk. Last Daily 52-wk. yield* ratio* Dows Jones Index Last Daily 52-wk. Last Daily 52-wk. from MSCI Barra as of July 09, 2010 examined in the context of...the Two months ago, after pro-VAT director of the nonpartisan Tax largely because value-added taxes 2.35% 16 Global TSM 2197.34 0.71% 21.3% 2.06% 9 Turkey Titans 20 -c 608.40 -0.25% 73.8% 685.20 -0.56% 57.4% Price-to- LOCAL-CURRENCY [ THE OUTLOOK ] overall structure of our tax comments by some high-profile Policy Center think tank. By are imposed on imports at the 2.41 16 Global Dow 1337.40 1.26% 26.8% 1794.46 0.89 14.9 5.68 15 Global Select Div -d 171.80 0.91 42.9 185.77 0.54 29.5 Dividend earnings PERFORMANCE yield ratio Morgan Stanley Index Last Daily YTD 52-wk. system,” John Castellani, figures, the U.S. Senate voted contrast, a VAT “doesn’t interfere border, and refunded to domestic 2.92 13 Global Titans 50 163.60 0.71 23.9 154.38 0.34 12.2 5.96 10 Asia/Pacific Select Div -d 254.09 0.84 22.1 2.60% 15 ALL COUNTRY (AC) WORLD*278.86 -1.20% -6.9% 13.9% BY JOHN D. MCKINNON president of the Business 85-13 to condemn the VAT as “a with where goods are businesses on their exports, 2.84 16 Europe TSM 2330.72 0.22 15.4 4.43 14 U.S. Select Dividend -d 318.83 0.73 30.4 2.70 16 World (Developed Markets) 1,084.87 -1.21 -7.2 12.5 Roundtable, which includes chief massive tax increase.” produced...and doesn’t interfere making a VAT an effective subsidy 2.40 19 Developed Markets TSM 2123.69 0.70 19.8 2.09 18 Islamic Market 1848.58 0.71 19.6 2.50 16 World ex-EMU 129.73 -1.17 -5.1 14.3 At least 139 countries, executives of U.S. multinationals, But the VAT talk has continued with savings, investment and for U.S. producers, according to 2.26 10 Emerging Markets TSM 3988.90 0.85 35.5 2.62 13 Islamic Market 100 1769.60 0.87 23.6 1913.26 0.50 12.0 2.50 16 World ex-UK 1,085.83 -1.18 -6.6 12.8 including most major economies testified at the hearing. in Washington, as political leaders capital formation.” the advocates. (Some experts 3.25 24 Africa 50 841.40 0.33 24.3 674.69 -0.04 12.7 3.48 12 Islamic Turkey -c 1541.20 0.43 47.0 2980.01 0.11 33.2 3.20 16 EAFE 1,410.40 -1.49 -10.8 7.9 except the U.S., levy a value-added The VAT is a tax on sales. It’s confront the challenge of bringing A White House spokeswoman disagree.) 2.61 13 BRIC 50 468.30 1.50 46.4 563.99 1.13 32.6 2.85 15 Sustainability 856.90 0.84 30.3 913.98 0.47 18.1 2.20 14 Emerging Markets (EM) 940.75 -1.12 -4.9 23.6 tax on goods and services. similar to a retail sales tax, but the nation’s soaring deficits under said President Barack Obama “has Still, there are many reasons 3.68 17 GCC 40 532.20 0.44 11.8 426.75 0.07 1.3 4.51 19 Brookfield Infrastructure1652.60 0.59 38.9 1990.48 0.22 25.9 3.60 14 EUROPE 86.15 1.03 -2.4 20.0 But as the U.S. faces deficits, typically collected all along the control. The talk will likely get not proposed this idea nor is it why the VAT remains a heavy lift: 2.03 19 U.S. TSM 11115.64 0.81 24.6 1.39 22 Luxury 996.40 1.36 52.3 1067.20 0.99 38.0 3.80 14 EMU 147.42 -1.48 -18.3 2.8 talk of adopting one has become production process, and louder for at least three reasons: under consideration.” As a consumption tax, the VAT 6.08 22 Kuwait Titans 30 -c 182.19 -12.1 3.15 10 UAE Select Index 218.17 0.00 0.4 3.50 15 Europe ex-UK 93.25 0.98 -3.5 19.2 more commonplace and is likely businesses get a credit for VAT First, the VAT raises a lot of Second, many U.S. hits lower-income earners 1.71 RusIndex Titans 10 -c 3239.30 0.56 71.3 5239.78 0.31 46.6 DJ-UBS Commodity 138.40 0.84 22.9 126.94 0.47 11.4 4.90 11 Europe Value 92.52 1.22 -7.0 15.7 to intensify. The latest rumblings they pay to others. A car maker, money, and Congress and the multinationals suspect they might disproportionately. Fixing that *Fundamentals are based on data in U.S. dollar. Footnotes: a-in US dollar. b-dividends reinvested. c-in local currency. Note:All data as of 2 p.m.ET. Source: DowJones Indexes 2.40 17 Europe Growth 77.73 0.86 2.1 24.2 came earlier this month, at a for instance, would collect the tax White House need a lot to avoid have little choice but to accept a problem probably requires 2.40 19 Europe Small Cap 165.38 1.10 5.2 31.7 meeting of a White House from customers on all the cars it politically difficult spending cuts. VAT if they hope to avoid further offsetting the VAT with some kind Cross rates U.S.-dollar and euro foreign-exchange rates in global trading 2.30 8 EM Europe 290.95 0.22 4.4 43.2 commission looking for ways to sells, but get a credit for the VAT According to one recent estimate, increases in U.S. corporate income of credit for the poor. 3.80 12 UK 1,512.73 1.81 -5.9 19.7 dig the U.S. out of its fiscal hole. it paid on parts it bought to make a VAT of 5% would raise $161 taxes, or even win cuts in current Even with such an offset, Asked by a commission the vehicles. billion a year in 2012. rates. They regard current retailers dislike the idea, because USD GBP CHF SEK RUB NOK JPY ILS EUR DKK CDN AUD 2.90 18 Nordic Countries 148.22 0.06 8.8 31.9 member whether corporate Advocates say a VAT creates And according to some corporate taxes as too high, they think a VAT creates a drag on Australia 1.1429 1.7270 1.0806 0.1525 0.0370 0.1795 0.0129 0.2955 1.4441 0.1937 1.1081 ... 2.00 8 Russia 692.25 -0.62 -7.3 26.5 Canada 1.0315 1.5586 0.9752 0.1377 0.0334 0.1620 0.0117 0.2667 1.3033 0.1748 ... 0.9025 2.40 20 South Africa 706.03 0.40 -0.2 17.7 leaders could live with what is less incentive for avoidance economists, a VAT can produce all particularly given global trends overall spending. Denmark 5.8999 8.9150 5.5780 0.7874 0.1910 0.9267 0.0667 1.5253 7.4548 ... 5.7200 5.1621 2.70 16 AC ASIA PACIFIC EX-JAPAN 388.98 -2.07 -6.6 20.1 known as a VAT, Business compared to a sales tax, while that revenue without discouraging toward reducing them. Some Also, many critics believe the Euro 0.7914 1.1959 0.7482 0.1056 0.0256 0.1243 0.0089 0.2046 ... 0.1341 0.7673 0.6925 1.90 26 Japan 533.90 2.41 -6.1 -6.8 Roundtable officials said they limiting economic damage investment as higher income taxes companies are hoping a VAT VAT could start low—but then be Israel 3.8680 5.8447 3.6570 0.5162 0.1252 0.6075 0.0437 ... 4.8874 0.6556 3.7501 3.3843 2.30 16 China 59.81 0.90 -7.7 8.5 would consider the idea, but only compared to income taxes. But would. would encourage Congress to steadily ratcheted up. Japan 88.4700 133.6826 83.6438 11.8072 2.8636 13.8960 ... 22.8723 111.7863 14.9953 85.7725 77.4068 1.00 19 India 713.81 1.00 0.9 25.5 if Congress agreed to streamline conservative critics worry it’s just “If you’re looking for more streamline and lower the Perhaps the most important Norway 6.3666 9.6203 6.0193 0.8497 0.2061 ... 0.0720 1.6460 8.0445 1.0791 6.1725 5.5705 1.30 11 Korea 479.13 1.54 -0.3 25.3 and lower the U.S. corporate another faucet for government to revenue, I think raising rates corporate tax. objection is purely political. Folk Russia 30.8950 46.6839 29.2096 4.1232 ... 4.8527 0.3492 7.9873 39.0374 5.2366 29.9530 27.0316 income tax. tap. And many business owners under the current income tax Third, even a few domestic wisdom in Washington holds that 2.80 23 Taiwan 269.24 1.18 -9.0 14.8 Sweden 7.4929 11.3221 7.0841 ... 0.2425 1.1769 0.0847 1.9372 9.4677 1.2700 7.2644 6.5559 “We certainly think, like regard it with apprehension, in probably is not a good idea and businesses are beginning to eye every government that has ever 2.00 17 US BROAD MARKET 1,194.64 -0.99 -3.4 17.9 Switzerland 1.0577 1.5982 ... 0.1412 0.0342 0.1661 0.0120 0.2734 1.3365 0.1793 1.0254 0.9254 everything, [a VAT] is something part because of its administrative could do significant economic the VAT as a possibility, despite created a VAT has been voted out 1.40 160 US Small Cap 1,674.83 -1.30 0.2 26.3 U.K. 0.6618 ... 0.6257 0.0883 0.0214 0.1039 0.0075 0.1711 0.8362 0.1122 0.6416 0.5790 that should be examined, but complexity. harm,” says Eric Toder, a co- the administrative burden. That’s at the next election. 2.60 14 EM LATIN AMERICA 3,850.00 -0.68 -6.5 29.4 U.S. ... 1.5110 0.9454 0.1335 0.0324 0.1571 0.0113 0.2585 1.2635 0.1695 0.9695 0.8750 Source: Thomson Reuters via WSJ Market Data Group *Twenty-three developed and 26 emerging markets Source: MSCI Barra 6 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 31 U.S. NEWS C-SUITE: TECHNOLOGY BP, Apache in talks on Alaska deal Facebook touts friendship for selling

BY GUY CHAZAN BP has already suspended its complete the relief well in August, also in “material” discussions with a As its output has fallen, BP has BY EMILY STEEL As part of its push to capture a to build up fan bases and commu- AND DANA CIMILLUCA dividend and trimmed capital but some signs have suggested it single company—Apache—on a also been beset by operational prob- AND GEOFFREY A. FOWLER bigger slice of the online-ad busi- nicate with users. “It fundamen- spending. could happen sooner. package deal worth $10 billion. If BP lems in Alaska. In 2006, a pipeline ness, where it lags behind sites tally comes down to why people BP PLC is in talks with U.S. inde- The company has also said it Rising optimism about BP’s for- can pull off that transaction, that leak led to a 200,000-barrel oil spill Facebook Inc. is trying to rev like Google Inc. and Yahoo Inc., are there on social networks. They pendent oil and gas producer plans to sell $10 billion in noncore tunes has helped push the com- could ease pressure on the company on the North Slope—the worst oil up its advertising business with a Facebook opened four interna- are not there to read our ads. Apache Corp. on a deal worth as assets over the next 12 months, al- pany’s share price up about 20% in to sell other assets. The Apache spill on the slope in Alaska’s history. little help from your friends. tional sales offices last year and They are there to talk to each much as $10 billion that could in- though it has not specified which the last two weeks. Having hit a 14- talks were reported Sunday by the Under a criminal settlement the fol- The social-networking site is another one this year in Hamburg, other,” says Scott Monty, head of clude stakes in BP’s vast Alaska op- ones. Those steps came after the year low of 302.9 pence ($4.56) on Times of London. lowing year, BP pled guilty to a vio- aggressively pitching to big adver- Germany. It has more than dou- social media at Ford. erations, according to people famil- company, ceding to pressure from June 29, BP closed Friday in London BP opened its first office in lation of the federal Clean Water tisers like Ford Motor Co. and bled its ad-sales staff since the be- Like many major marketers, iar with the matter. the White House, agreed to set aside at 364.8 pence. Alaska in 1959 and has a 26% stake Act and paid $20 million in fines PepsiCo Inc. the latest in a series ginning of 2009. In March, Face- Ford long held back on putting big A deal, which would go a long $20 billion in a special fund to cover Over the weekend, BP began an in the Prudhoe Bay oil field—which and restitution. The company has of ad formats that tell users which book hired Google ad executive ad dollars behind campaigns on way to helping BP cope with the fi- claims arising from the spill. operation to remove a containment after 33 years of production remains suffered a number of other spills of their Facebook friends have ex- David Fischer to be its vice presi- Facebook. Instead, Ford used the nancial stress of paying for the The asset sales represent one el- device located over the gushing well the largest in North America. It op- and pipeline ruptures in Alaska pressed interest in the brand or dent of advertising. site’s free options, such as creat- clean-up of the Gulf oil spill, could ement in a broad capital-raising ef- and replace it with a much tighter erates 14 other oil fields on the since then. product featured in the ad. The latest ads mark another at- ing fan pages, to build up groups be reached in the coming weeks, fort. BP has also secured new credit cap that should collect all the oil North Slope, and has minority inter- BP has a history of big deals Facebook says it hired Nielsen tempt by Facebook, which is near- of fans who would share pictures though there is no guarantee it will lines, and could also sell bonds, ac- and gas leaking from Macondo. The ests in six others. It also operates with Apache. In 2003 it sold the U.S. Co. to conduct a study and found ing 500 million users, to make and stories about their cars over succeed, one of these people said. cording to people familiar with the operation, which began Saturday, four pipelines there and has a big independent its Forties field in the that including information about money from personal data it col- the site. Now Ford is in talks to BP and Apache declined to com- situation. will take between four and seven stake in the Trans Alaska Pipeline North Sea and a package of shallow- individuals a person knows in an lects about them. Facebook, which buy social ads to promote the ment. These people say BP could an- days, BP says. But removing the cur- System, which brings oil from Prud- water assets in the Gulf of Mexico ad boosts recall of the ad by 68% has been hammered by privacy launch of the new 2011 Ford Ex- The Apache deal is believed to nounce the deal with Apache, or rent cap means oil and gas will flow hoe Bay in the north to the port of for $1.3 billion. and doubles awareness of a advocates and regulators over its plorer, which will be unveiled on

include stakes in Alaskan oil fields, other asset sales, on July 27, the freely from the well for some time, Valdez. Apache has a reputation for brand’s message. privacy policies, hasn’t heard con- Ford Motor Company Facebook later this month, Mr. where BP is the largest operator. same day it unveils its second quar- increasing the level of pollution. But its Alaskan assets are ma- snapping up the majors’ mature as- The so-called social-context cerns from users about social ads, A proposed Facebook page for Ford’s launch of the 2011 Ford Explorer. Monty says. “They made a very It is one of a number of options ter earnings. Investors are also ex- People familiar with the matter ture, and production there has been sets and applying cutting-edge tech- ads, which Facebook started roll- Ms. Sandberg says. attractive case,” he adds. the U.K. oil major is exploring to pecting good news on the relief well say that with its asset sales, BP is gradually declining. Last year, BP nology to squeeze more oil out of ing out over a year ago, are based Facebook says the people friend, along with his or her ads to U.S. users than any other “The social ads are interesting, raise cash as it struggles to cope it is drilling to intercept its runaway moving along two tracks: It is in produced 181,000 barrels a day of them—a strategy it has successfully on data it collects on the likes and whose names it picks to feature in name. But Facebook has since dis- site in the first quarter—leaping because you feel that you are con- with a spill that has fouled huge Macondo well and plug the leak. talks with a number of companies oil and gas in Alaska, down from applied in the North Sea and the friends of its users. The ads ap- the ads have voluntarily indicated continued those practices. ahead of Yahoo for the first time. necting to a brand through an en- sections of the Gulf coast. BP has consistently said it will on a wide spectrum of assets and is 197,000 barrels a day in 2008. Gulf of Mexico. pear on the right side of a user’s they like a brand, and it shares Facebook says it is starting to Yet Facebook is expected to bring dorsement from someone. The ads homepage, with an image and their names only with those they see results with major marketers, in more than $1 billion this year perform better.” says Shiv Singh, headline from the advertiser. With have identified as friends. Still, such as a recent deal with Nike in revenues, according to people director of digital engagement and the ads are the names of any of some users may not realize that Inc. to buy ads on users’ home- briefed on the matter. Yahoo social media at snack and bever- the user’s friends who have clicking a button to indicate they pages across 20 countries during earned $6.5 billion in revenue in age giant PepsiCo. White House plans clicked on a button indicating like a brand gives Facebook per- a day ahead of the start of the 2009, mostly from advertising. But marketing experts say that Lake near Gulf is breached they like the brand or ad. The mission to use their names when World Cup. Such homepage ads The average price of display ads Facebook faces challenges in user is also offered a chance to in- the site shows an ad from that come with a price tag of as much on social-networking sites is building out its business with the BY KRIS HUDSON dicate he likes the ad. brand to their friends. as $100,000. Ads that appear on about one-sixth the price on the social-ad product alone. Many review of regulation “Marketers have always known Facebook gives users the op- other portions of the site that ad- rest of the Internet, according to marketers still believe it is more NEW ORLEANS—Idled commer- that the best way to sell portunity to opt out of having vertisers buy via a self-service comScore. efficient to buy Facebook ads on cial fishermen Vincent Caronna and something is to get your their likes included in ads by us- tool can sell for less than a dollar For many years, marketers the cheap using the company’s Shirley Roach stewed with col- BY ELIZABETH WILLIAMSON ness community’s perspectives on friends to sell it,” says ing the application settings on the a click, ad executives say. have questioned whether consum- self-service tool that offers de- leagues on their docks in the Salt examining regulations, but a lot of Sheryl Sandberg, Face- site. It declines to say how many Hundreds of millions of people ers pay attention to ad messages tailed targeting options. In addi- Bayou, lamenting that oil from the WASHINGTON—The White important equities need to be book's chief operating of- users have done so. regularly visit social-networking on social-networking sites, and tion, media buyers have strong BP PLC spill had begun seeping into House is talking with business weighed against each other, such as ficer. “That is what people In earlier efforts at social con- sites, but they haven’t been big were concerned about having ties to traditional Web portals, Lake Pontchartrain, a body of water groups about a broad review of gov- the health and safety of the Ameri- do all day on Facebook. text ads, Facebook placed the moneymakers. Facebook attracted their ads appear next to user-gen- and in the relationship-driven ad- Louisianans had hoped was safe. ernment regulations that corporate can people—and no one interest We enable effective word- messages directly inside the news 130.3 million unique U.S. visitors erated content that could range vertising business, they say, Face- “It will be a long time before leaders have identified as obstacles outweighs another,” said White of-mouth advertising at feed portion of the site, and also in May, according to comScore from banal to risqué. Many pre- book is going to need to forge they clean [the lake] up,” Mr. Caro- to job-creating private investment. House chief of staff Rahm Emanuel. scale for the first time.” included a small photo of a user’s Inc., and delivered more banner ferred to use the site’s free tools those connections. nna said, worried that storms could Administration officials have An array of business interests push more oil over man-made barri- been meeting with business leaders and legislators, including several al- cades and into the 1,630-square-ki- to identify specific rules that could lied with the president, will attend a troduced a standard-footprint ma- built-in DVD drive. an Eco button, which switches the lometer brackish lake. “It will have be streamlined. In recent weeks jobs summit Wednesday at the U.S. chine that is thin and light—and It has a much better selection machine into a low-power mode to be completely restocked,” Ms. some of the president’s corporate Chamber of Commerce. The group New Toshiba uses the latest Intel processors, of ports than the Apple, including to get more battery life. Roach said. allies have joined its critics in an in- will demand action on a list of con- with generous memory and stor- three USB ports instead of one. It In my tests, the new Toshiba The fishermen, their livelihoods tensifying confrontation with the cerns topped by “the unbelievable age, and strong battery life. Yet it also has three ports missing en- speedily handled common soft- devastated by the damage oil has White House over its regulatory and amount of new regulation that is in costs much less than the MacBook tirely on the Apple: a built-in Eth- ware, such as Microsoft Office, wrought in the Gulf of Mexico, offer Associated Press tax policies. the pipeline,” said Stan Anderson, laptop is light Air and X300, with the tradeoff ernet port; an HDMI port for di- Adobe Reader, Apple’s iTunes, and some of the most pessimistic views. Searching for tar balls from the Gulf oil spill in Lake Pontchartrain this month. The Business Roundtable, an as- executive director of the Chamber’s being a bit more bulk. I’ve been rect, high-definition connection to the Firefox and Chrome Web The oil’s encroachment into Lake sociation of chief executives of Campaign for Free Enterprise. testing this model, which is called a TV; and a memory-card reader. browsers. Pontchartrain has been relatively nearly $4.5 million for fishermen, Mr. Davis and other officials say many of the largest U.S. corpora- A week ago White House officials the Portege R705. Toshiba said the (The ThinkPad has three USB The Toshiba has some other minor, with tar balls and sheen be- according to the state Department that, absent a big storm, defenses tions, recently delivered to the met with leaders of the Business laptop will be released in the U.K. ports and an Ethernet jack, but no benefits. It uses the latest Intel ing found. of Wildlife and Fisheries. It often for keeping the oil out of the lake White House a detailed list of con- Roundtable, a gathering of top cor- and speedy and the rest of Europe over the memory reader or HDMI.) Core processor—albeit the lowest- So it is as much a psychological provides safe fishing when the Gulf should be effective. Local officials cerns about the administration’s porate leaders who have advised the course of the summer under the The new Toshiba sports a big end version—and incorporates an assault as a physical one. is too rough. say areas of commerce other than regulatory agenda, highlighting pro- administration on the economy, to BY WALTER S. MOSSBERG name Portege R700. 500 gigabyte hard disk and 4 gi- Intel technology called Wi-Di But the shallow lake, its southern Tar balls and oil sheen have been fishing aren’t expected to suffer. posals to give unions more tools to identify priorities from among 54 Despite a few drawbacks, I like gabytes of memory to power its which wirelessly beams whatever edge ringed by New Orleans and its reported on the lake’s eastern edge “Because tar balls have gotten into organize workers, new environmen- pages of rules that Roundtable For all the excitement about the R705 and can recommend it to 64-bit version of Windows 7 is on its screen to a TV, via an suburbs, is a crucial part of the and in the Rigolets, a waterway that the basin of the lake isn’t going to tal rules proposed by the Environ- members identified as impediments tablet computers, the traditional consumers willing to pay higher- Home Premium. The Apple and adapter. It also has a couple of area’s environmental, economic and connects the lake to the Gulf eight affect tourism in New Orleans at mental Protection Agency, proposals to economic growth and job recov- clamshell laptop still rules. In fact, than-netbook prices for a speedy, Lenovo have just 2 gigabytes of nice Toshiba software utilities, in- cultural fabric. Massive efforts in to nine nautical miles away. Some all,” said Kelly Schulz, a vice presi- by the Federal Communications ery. The group compiled the rules at the computer industry is working standard-size, but easy-to-tote memory and a maximum storage cluding a handy Bulletin Board the 1980s and ’90s cleaned the lake officials say oil escaped an extensive dent at the New Orleans Convention Commission to impose new controls the request of the White House bud- hard to make it smaller, lighter laptop with good battery life. capacity of 128 gigabytes, though program for organizing files and of decades of contamination from network of protective piping called and Visitors Bureau. on broadband internet providers. get office. and sleeker. This new Toshiba has a dark- both offer solid-state drives ver- another called ReelTime, which shell dredging and dairy farms. boom and skimmer boats only with Still, the lake’s ecosystem is a The Obama Administration is un- Roundtable president John Cas- There have been two broad ap- blue cover and a solid construc- sus the standard mechanical hard lets you quickly find recently used Since then, it has served as a recre- the aid of recent storms and wind concern. Lake Pontchartrain serves der pressure to spur job growth in tellani and Verizon Communica- proaches to this task. One, exem- tion, despite feeling very light in disk on the Toshiba. files by date. ational hub, a fishing grounds and a that pushed it into and through the as a massive estuary with ideal con- an election year, amid signs that tions chief executive Ivan Seiden- plified by netbooks, has been to the hand. The bright, vivid screen The R705 also has better bat- So what about the drawbacks? haven for sea life. Rigolets. ditions for young aquatic life. Be- Congress will not agree to spend berg, chairman of the group, met a shrink the footprint of the ma- is sturdy, and the roomy, well- tery life than the MacBook Air or Well, for one, it has a relatively Last year, the lake yielded more The state has closed 5% of the cause it is shallow—rarely more significant new sums on govern- week ago at the White House with chine, so it’s lighter and cheaper. spaced keyboard is firm, with a ThinkPad X300 series. In my low-end integrated graphics chip. than 2.2 million kilograms of blue lake’s area to fishing because of the than three and a half meters ment stimulus programs. But how National Economic Council Director But this has meant cramped key- large space bar, delete key, tab, tough battery test, where I disable It stuttered repeatedly while crab, shrimp and fin fish valued at oil, and fishermen fret that the re- deep—sunlight can reach its floor to far the administration will go to al- Larry Summers, business liaison boards and screens, and generally backspace, shift and arrow keys. all power-saving features, crank streaming high-definition video strictions will be expanded. foster plants and grasses. That veg- ter its regulatory and tax policies Valerie Jarrett, and two other eco- wimpier processors and battery The touchpad and buttons also are the screen to full brightness, leave from the Web, even on a very fast Kevin Davis, president of St. etation attracts shrimp larvae, crab isn’t clear. Several executives say nomic-council officials to discuss life. generously sized. on the Wi-Fi and play a continu- Internet connection. I found Tammany Parish, which includes larvae and other hatchlings from the they’ll remain skeptical until the “specific examples of regulations The other, pioneered by the The R705 is thicker than the ous loop of music, the R705 got scrolling on the touchpad to be a much of the lake’s northern shore Gulf. president moves to push trade that were burdensome,” a White MacBook Air and the Lenovo MacBook Air, at just over an inch four hours and 29 minutes of bat- bit jerky. And its start-up and re- and many commercial docks and Also in the lake are Rangia clam agreements with Korea, Colombia House official said. ThinkPad X300 series, has been to thick versus about three-quarters tery life. The MacBook Air racked start times were relatively slow, Executive Travel Program marinas, said his parish had at its and other stationary creatures, fin and Panama through Congress, “The administration responded preserve a standard 13-inch of an inch for the Apple. It’s also up three hours and 24 minutes in approaching two minutes. Also, disposal 45,720 meters of boom, 25 fish such as flounder, and manatees bucking Democrats and union sup- very quickly,” Mr. Castellani said. So screen, a roomy keyboard, and thicker than the ThinkPad in some my test, and the X300 just three the R705 lacks Bluetooth connec- skimmer boats and 100 small boats that raise their calves and dine on porters who have held them up for far, he said, “they get an A-plus for Toshiba’s Portege standard processors for decent places and thinner in others. At hours and five minutes. tivity. Finally, it includes an ob- Guests and clients of 320 using nets to catch tar balls. Still, the lake’s vegetation in the summer. years. Mr. Obama has recently called reaching out, and an incomplete for R705, which is just performance, but to pare thick- three pounds, it’s about the same I estimate that in more-normal noxious, prominent “craplet” pro- leading hotels receive given all his constituents have gone “The long-term concern is that if for action on the free-trade deals. policy.” over an inch thick, has ness and weight. But this has weight as the Apple, though it’s use, the R705 could last 5½ hours gram from Best Buy that’s The Wall Street Journal Europe through in the past five years, in- we did get heavier concentration of New financial-markets rules in- “They’re taking a serious look,” a roomy keyboard with meant much higher prices. slightly lighter than the ThinkPad. on a single charge—an impressive basically an ad. daily, courtesy of cluding Hurricane Katrina in 2005 oil, what would it do to the food cluded in an overhaul now moving said Dan DiMicco, chief executive of generously sized keys. Now Toshiba, long known for Unlike the Apple and like the figure, though short of the com- Still, overall, this is a very nice and rebuilding in its wake, some are web in particular, starting from through Congress would not be on steelmaker Nucor Corp., who con- making thin, light, laptops, has in- ThinkPad, the new Toshiba has a pany’s eight-hour claim. There is laptop whose light, thin body panicked about the lake’s fate. [stationary] organisms up the food the table, an administration official tributed to the Roundtable report hides a pretty powerful computer.

“Some are even in tears because web?” said Anne Rheams, executive said. President Barack Obama has and has met separately with eco- Toshiba they were hoping this would be one director of the Lake Pontchartrain made the financial overhaul a prior- nomic officials to discuss regulation Watch Walt Mossberg’s review of of the areas that wouldn’t get hit Basin Foundation, a group chartered ity, and it remains popular despite and job growth. “There’s this com- Toshiba’s Portege R705 at because we’re so far inland, and by the state in 1989 to help lead the criticism in banking circles. mon concern ... that we’re not doing WSJ.com/Tech. Find his columns www.thinkmediaoutdoor.be that it might be one of the last fish- lake cleanup. “That could impact the “The president has said that he the right things yet, and it’s show- and videos at the All Things Digi- ing areas left,” he said. whole ecology of the lake.” is interested and open to the busi- ing up in the jobs numbers.” tal Web site, walt.allthingsd.com. 32 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 5 SPORT EUROPE NEWS

DEFENDERS Pitch perfect: Obdulio Varela was captain of the Uru- guay team that won the 1950 World Cup Turkey fills void in former Yugoslavia in Brazil, beating the host nation in the fi- nal in one of this tournament’s biggest upsets. “He was the player of the game, Ankara,participatinginanniversaryofSrebrenicamassacre,bringstogetherregion’sleadersafterU.S.andEUstumble but more than that, when Brazil went World Cup’s ahead, he picked up the ball and BY MARC CHAMPION walked so incredibly slowly to the center circle that he quieted the ISTANBUL—The leaders of Tur- crowd,” said Mr. Goldblatt. “It was key, Serbia and other Balkan nations an act of extraordinary front, to gathered this weekend to commemo- all-time best take on the crowd like that, espe- rate the 15th anniversary of the Sre- cially in front of 200,000 people.” brenica massacre in Bosnia-Herze-

Picking top players from a galaxy of stars Franz Beckenbauer, the archi- Press Association govina, in an event seen by Turkish tect of Germany’s 1974 triumph, and officials as a crowning moment in its is a tricky goal, but we give it our best shot Bobby Moore, who captained England to Warwickshire’sJonathan Trott campaign of regional diplomacy. its sole victory in 1966, are arguably the Tens of thousands of people BY JONATHAN CLEGG perts including a soccer historian, a finest defenders to have played this Tip of the day turned out Sunday to remember the former World Cup winner and a re- sport—in fact, Mr. Beckenbauer was prob- execution of some 8,000 Muslim The race between Spain’s David nowned sportswriter, we’ve come up ably one of the finest midfielders too, as men and boys by the Bosnian Serb Villa and Wesley Sneijder of the with a regulation squad of 23 play- he would no doubt remind us himself. Bangladesh secured its first military, in what an international Netherlands to finish as leading ers we believe to have been the pre- They make up two of our defensive selec- ever victory over England in court has since ruled to have been scorer of the 2010 World Cup looked mier performers during those few tions, alongside Uruguay’s Mr. Varela and any form of cricket in Satur- an act of genocide. Families buried like being the decisive factor in Sun- weeks every four years that follow- Franco Baresi, the colossus who inspired day’s second one-day interna- an additional 775 of the dead, as the day’s final. ers of The Beautiful Game hold so Italy’s 1994 final appearance. tional and can clinch a sensa- grim task of collecting and identify- It could also establish which of dear. The group is rounded out by a pair of tional series victory if it can ing skeletons of those buried and re- these players, each with five goals Make no mistake—this isn’t a versatile defenders: France’s Lilian repeat its heroics at Edgbaston buried in mass graves continues. apiece, comes to define this tourna- laundry list of all the greatest play- Thuram, a winner in 1998, and Philipp on Monday. Turkish Prime Minister Recep ment and joins the ranks of the ers ever to kick a ball, as many of Lahm, captain of Germany’s 2010 team The Tigers’ bowling attack Tayyip Erdogan’s presence at the fu- World Cup’s greatest players. this game’s biggest names played and perhaps the best right-back in South was largely to thank for the neral highlighted how Ankara has It would be difficult to dispute sparingly at the World Cup, if at all. Africa this past month. win at Bristol, but the 1/7 avail- stepped into a void in Bosnia left by that either player deserves such rec- Also making our task difficult is able with Totesport for England the failure of a yearslong U.S.–Euro- ognition, but in whose exalted com- picking people to play in defense or GOALKEEPERS to win the final one-day inter- pean Union effort to secure a new pany would they stand? midfield because of soccer’s relative national suggests the hosts will constitutional settlement aimed at It’s a question that is essentially paucity of statistics. Signature plays can elevate ath- be much too strong. Although ensuring stability in a fractious na- unanswerable because there is no Scoring is limited to a handful of letes into the all-star ranks, and Andy Flower’s team won by six tion made up of Bosnian Muslims, World Cup hall of fame, no soccer goals in each game, and unlike base- such is the case with England’s Gor- wickets at Nottingham it is dif- Serbs and Croats, diplomats say. version of Cooperstown or Canton. ball, say, there’s no box score to don Banks, whose gravity-defying ficult to justify backing England “We put everything the U.S. and

With that in mind, The Wall summarize individual contributions save of a Pelé shot in the 1970 at such a short price. Instead, the European Union could get to- Associated Press Street Journal set out to resolve a or illuminate the impact of players World Cup is a moment that re- selling the side’s spread-betting gether, and yet we could not suc- Bosnians pray near coffins of victims of the 1995 Srebrenica massacre, during a mass funeral in Potocari, northeast of Sarajevo, on Sunday. debate that will be enacted in bars who win the ball from opponents or mains etched on our memory. “He supremacy at 42 with Sporting ceed,” said a senior Western diplo- and pubs across the world on any set up successful strikes with essen- was an artist of his kind, the guy Index appeals. Ten points are mat in Sarajevo, speaking of the been indicted by the International Middle East, where Turkey’s vote route to membership when it hadn’t 49% stake in Air Bosnia in 2008. given night, and which has kept Di- tial but far-from-glamorous passes. who pulled off what was thought to awarded per wicket won by or so-called Butmir process to change Criminal Tribunal for former Yugo- against U.S.-led U.N. sanctions on fulfilled all conditions. Around 70% of students at the ego Maradona and Pelé at each The absence of meaningful num- be the finest-ever save against one point per run, and with the constitution, named after the slavia in The Hague, but remains at Iran and its increasingly hostile rela- Within Serbia, Turkey’s foreign new Turkish-built International Uni- other’s throats for the best part of bers has traditionally made genera- Pelé,” said Simon Barnes, a colum- Bangladesh’s new-found confi- North Atlantic Treaty Organization large. Mr. Tadic pledged to “do ev- tionship with Israel have triggered minister last year successfully medi- versity of Sarajevo are Turkish na- two decades: Who are the greatest tional comparisons all but impossi- nist for The Times of London. dence the final match of the military base where it was launched. erything” to apprehend alleged war worries in Washington over the di- ated a dispute that had led to vio- tionals, many of them young women players in the history of the World ble, too. Paraguay’s José Luis Chilavert series could be closer than ex- The reason: Without Russia criminals in Serbia. rection of a core regional ally. lence between two factions in the escaping the head-scarf ban on Cup? Instead, David Goldblatt, the au- —a three-time world goalkeeper pected. working to persuade leaders of Bos- In March, Belgrade, for the first Turkish diplomats cite their ef- Orthodox Christian nation’s majority Turkish campuses. For a number of reasons, select- thor of “The Ball is Round: a Global of the year—led his nation to the Jonathan Trott put in a nia’s Serbian entity and Turkey time, made a formal condemnation forts at mediation among the coun- Muslim Sandzak region, according to Not everybody accepts the grow- ing a definitive team of World Cup History of Football,” says that any round of 16 in both 1998 and 2002. gutsy performance on Saturday pressing Bosnian Muslim leaders, a of the Srebrenica killings, a move tries of former Yugoslavia as an ex- Western diplomats familiar with the ing Turkish role in a region that was all-stars is all but impossible. all-star list should take into account He was also a goal-scoring threat but his 94 was unfortunately deal was “out of our reach,” the dip- Western diplomats say was medi- ample of how Turkey’s activist matter. Two prominent Sandzak pol- under Ottoman rule for five centu- For one thing, unless you hap- the wider narrative in which a himself (he famously took direct not quite enough. With Ian Bell lomat said. ated by Turkey and aimed at foreign policy makes it a more valu- iticians supported rival Muslim cler- ries. Milorad Dodik, leader of Bos- pened to be there, it’s a bit difficult player’s on-field performance takes free-kicks and penalty kicks for Par- missing the finale through in- As the process ground to a halt smoothing Serbia’s path to the EU. able ally to the West. ics who in turn answered to rival nia’s Serbian entity, Republika Srp- to pass judgment on the first World place. In other words, we should go aguay). jury, the capable Mr. Trott will last year, Ankara stepped in with a Serbia has arrested and handed over Over the past 18 months, Turkey muftis in Sarajevo and Belgrade. ska, has said Ankara arrives with too Cup in 1930. The world’s most popu- for the guys with the best stories Gianluigi Buffon conceded just relish taking center stage and parallel effort aimed at getting the numerous alleged war criminals, in- has built a strong relationship with Turkey offered highway con- much historical baggage and is lar sporting event wasn’t televised behind their play. two goals (one an own-goal and one at 5/1 is good value to be Eng- leaders of Serbia, Bosnia and Croatia cluding former Serbain President Serbia’s pro-Western government struction, an airport conversion and pushing exclusively for the interests internationally until 1958, and the “We remember those players from the penalty spot) during Italy’s land’s top scoring batsman. talking, said Süha Umar, Turkey’s Slobodan Milosevic, who died while under Mr. Tadic and organized a se- industrial projects in Sandzak. On of Bosnia’s Muslims, a charge Turk- only footage that survives of that in- with the best stories as well as the triumphant run to the 2006 trophy. Bangladesh’s bowlers all ambassador to Belgrade. “We had to on trial, and former Bosnian Serb ries of three-way meetings with ex- Sunday, Mr. Erdogan was scheduled ish diplomats deny. A spokesman for augural tournament in Uruguay runs best play,” he said. “The narratives Four years later, he was per- played their part on Saturday intervene,” he said. leader Radovan Karadzic, currently Yugoslav neighbors. to open a Turkish cultural center Mr. Dodik wasn’t available for com- 13 minutes. Total. we weave around these players haps the only Italian to emerge with five taking two wickets Serbian President Boris Tadic on trial in The Hague. The govern- Ankara also played a key role in there. ment Friday. But by studying advanced statis- should become a part of how the untainted from a dismal first- each, but Abdur Razzak particu- Sunday’s ceremony, drawing some ment of Republika Srpska, Bosnia’s securing NATO’s April decision to Turkey was Bosnia’s fourth-larg- Some Serbian newspapers have tics and interviewing a panel of ex- canon is selected.” round exit: Mr. Buffon was in- larly impressed by taking the applause and some calls of “Where ethnic Serb entity, sent a low-level grant Bosnia a formal road map to- est investor in 2009, according to attacked Mr. Tadic for going along jured in the first half of the key wickets of Paul Collingwood is Mladic?” the Associated Press re- delegation Saturday. ward joining the alliance, despite the country’s Foreign Investment with Turkish mediation, saying he is opening game and missed the and Eoin Morgan for 10 and ported. Gen. Ratko Mladic was the Western capitals have largely deep reservations in Germany, the Promotion Agency. Turkish Airlines abandoning Bosnia’s ethnic Serbs. MIDFIELDERS rest of the tournament. one respectively. He has a solid Bosnian Serb commander in charge welcomed Turkey’s growing involve- Netherlands and the U.S. about the says it is in talks to buy Serbia’s Spokesmen for Mr. Tadic didn’t re- average of one wicket for every of the Srebrenica operation. He has ment in the Balkans—unlike in the moral hazard of offering Bosnia a main airline, JAT, having bought a spond to requests to comment. Analysts from Castrol, an official FORWARDS 27 runs in his six ODIs against World Cup sponsor, have tracked ev- England and should be backed ery touch of the ball in every game The World Cup has made im- at 4/1 with Betdaq to be the since the opening match in 1966 mortals out of some pedestrian Tigers’ top bowler. in an attempt to reach scien- players, not least Paolo Rossi, Suspected spies fall from view tific conclusions about who featured little during It- the beautiful game. aly’s run to the 1978 semifinal, Their results rein- but four years later scored six BY RICHARD BOUDREAUX had phoned her sister from Mos- In an interview with CBS’s “Face the force our impressions goals and earned a European cow’s Domodedovo airport after Nation” that aired Sunday, he de- about some of the player-of-the-year award. MOSCOW—The 14 alleged spies landing Friday and reported, “Ev- fended the swap as “an opportunity greatest players—despite appear- “That’s what can happen 1.36 deported from Russia and the U.S. erything is OK. We have landed.” to get back...four people in whom ing in only one World Cup, Johan Cruyff when half the planet is remained out of public view over Russia’s state-controlled national we have a great deal of interest.” is the most creative player in the history watching a single the weekend amid uncertainty over television channels reported the He also said all the children of of the tournament, conjuring a chance from match,” said Tony where they had been taken and how swap tersely, likely reflecting the the agents had been allowed to re- open play every 22 minutes on aver- Cottee, a former they would restart their lives. Kremlin’s desire to bury a story in turn to Russia. It remained unclear, age—while also illuminating the contribu- England player. Relatives said they heard brief which the U.S. Federal Bureau of In- however, whether all the agents and tions of some who are overlooked. Brazil has three for- reports from two participants in Fri- vestigation, after years of surveil- their families would choose to settle One is Poland’s Grzegorz Lato, the wards in our listy: Romário, whose day’s spy swap, Russian media said. lance, busted a network of “sleeper” in Russia. top-scorer in the 1974 World Cup with a five goals helped win the 1994 tour- Nuclear scientist Igor Sutyagin agents who had failed to gain access Mr. Sutyagin told his brother Sat- goals-to-shots rate of 28%—better than nament; Ronaldo, a champion in phoned his family from an unidenti- to state secrets. urday that he was weighing a deci- any other Golden Shoe winner. Martin 2002 and leading scorer in World fied hotel near London, where he is The 10 were exchanged in Vienna sion whether to return to Russia or

Peters, a winner with England in 1966, Cup history with 15 goals; and Ed- apparently confined by British au- for three former KGB officers and stay abroad. Unlike the 10 deported Reuters also earns a nod: The West Ham United son Arantes do Nascimento—known thorities until a decision is made Mr. Sutyagin, all serving prison sen- from the U.S., who were barred from U.S. Attorney General Eric Holder has defended the deal made with Russia. midfielder scored a goal in the final, to you and me as Pelé. about whether he will remain in the tences in Russia for passing sensi- returning without permission from created 12 chances from open play in We’re also including Cameroon’s U.K., his mother said. tive information to the West. Two of the attorney general, Mr. Sutyagin the situation.” would have strained an improving England’s triumphant run, while also Roger Milla, whose four goals in The whereabouts of the others, the KGB officers had been convicted and the three KGB veterans are free Another agent deported by Mos- relationship that the two countries’ contributing 23 tackles. 1990 helped the Indomitable including the 10 Russian agents ex- in their country of compromising to go back to Russia, Russian offi- cow, Sergei Skripal, was in Britain presidents are eager to maintain. Alongside Messrs. Cruyff, Lato Lions become the first Afri- pelled from the U.S. to Moscow, dozens of Soviet-era and Russian cials said. President Dmitry Medve- as well; the other two KGB men “It’s the best example of Presi- and Peters in our midfield we’ve can country to reach the were unknown. Russian media spec- agents in the West. dev pardoned the men. were flown to Washington. dent Obama’s policy to reset rela-

chosen Diego Maradona and Getty Images quarterfinals, and Germany’s ulated that they were being de- U.S. Attorney General Eric Dmitry Sutyagin told Russia’s In- By agreeing to the swap just 12 tions,” said Nikolai Zlobin, a Russia Zinedine Zidane, who need Gerd Müller, who averaged Source: Associated Press briefed at Russian intelligence head- Holder said the 10 agents deported terfax news agency that his brother days after the U.S. busted the Rus- specialist at the World Security In- no introduction, as well as the better than a goal per game in two quarters in Moscow. from the U.S. had received hundreds “doesn’t want to talk about his fu- sian agents, both sides avoided a se- stitute in Washington, an indepen- Brazilian pair Jairzinho, and Garrincha World Cup tournaments One of the 10, Anna Chapman, of thousands of dollars from Russia. ture yet and wants first to analyze ries of drawn-out U.S. spy trials that dent think tank. “Reset works.” 4 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 33 EUROPE NEWS THE QUIRK Britons expect slower growth and plan to cut their spending

BY PAUL HANNON

LONDON—Most Britons expect the U.K. economy to weaken before it starts to recover, and they intend to make cuts in spending that could push it back into recession, accord- ing to a survey conducted by GfK NOP in the days following the gov- Marketa Reedova, far left, graces the ernment’s emergency budget. calendar’s October page. Karolina The new coalition government Peake poses in parliament, above, and June 22 announced additional in the calendar, left. spending cuts and tax increases that (Left to right) Public Affairs party (2); Milan Jaros for The Wall Street Journal are aimed at eliminating the public sector’s huge structural budget defi- cit by the end of the current parlia- ment in 2015. But those announcements appear Czechmates: These political figures to have persuaded many Britons that economic growth will slow, rather than pick up in the months to come. Of the 1,000 adults surveyed by GfK between June 24 and 28, 58% ex- pected the economy to weaken, are starring in their own racy calendar while 24% believe it is on the way to recovery. It was the first time GfK European Pressphoto Agency had asked that question, so it is dif- BY GORDON FAIRCLOUGH vative Civic Democratic Party is a ical science. A photo of her reclin- a doorway and wearing only a able in shops. “Now women have Iveta Radicova, Slovakia’s first female prime minister, was sworn in Thursday in Bratislava. On Monday, she will head to Brussels for meetings. ficult to determine how big a shift AND SEAN CARNEY woman—the first to hold the post. ing on a couch in dark stockings short suit jacket, which exposes more freedom to be themselves, there has been since the period be- Prague So are two of her three deputies. and a clingy knit top appears on almost the entire length of her to be women,” says Jitka Rich- fore the budget. Last month, as the new legisla- the September page of the Public legs. trova, a fashion consultant and However, other evidence in the OMEN won more seats in tors were being sworn in, one of Affairs calendar. “There are differ- Mrs. Peake and others think columnist for Hospodarske GfK survey does suggest Britons are the Czech parliament Mrs. Nemcova’s fellow female ent kinds of feminism,” she says. Czech women’s strand of femi- Noviny, the Czech Republic’s lead- Slovakia’s new government stalls becoming more gloomy about the W than ever before during Civic Democrats noticed the con- Mrs. Peake, the anti-corruption nism was shaped in large part by ing daily financial newspaper. economy. In June, 16% of those sur- national elections in late May. To spicuous number of her flaxen- campaigner, is a 34-year-old the country’s experience of Com- “They don’t need to be so tough” veyed agreed the recession is com- tout its new stars, one upstart haired colleagues and dubbed mother of two who got into poli- munist rule. Women were ordered and act like they are “men in ing to an end, down from 24% in party decided to give them special them the “Blond Coalition”—a tics fighting Prague City Hall for to work, and to work in the same skirts,” she says. January and 25% in September billing—as pin-up girls. nickname that has stuck in the na- better municipal services. She kinds of jobs as men—a big step Still, female politicians here euro-zone’s plans for bailouts 2009. The Public Affairs party is sell- tional media. says she was surprised herself in establishing equality. have a ways to go. The new Czech In response to their concerns ing a 2011 calendar featuring pho- Czech politicians’ sense of when she turned up at the photo But at the same time, women cabinet announced last week—the BY LEOS ROUSEK signing by all member states of the crises. Slovakia’s €700 million con- kets and, thanks to euro-zone gov- about the economic outlook, Britons tos of some of its leading female style is a stark contrast to those shoot for the calendar, proceeds have reacted against the unglam- result of lengthy power-sharing euro area is necessary for the facil- tribution to the Greek bailout was ernment guarantees, seeks to get a appear likely to cut back on spend- members, including four newly in the Hillary Clinton pantsuit of which are being donated to a orous trappings and enforced uni- negotiations among the Civic PRAGUE—Slovakia, the euro ity to become operational,” he said. approved by the country’s previous triple-A rating and the lowest possi- ing. Some 46% of those surveyed sworn-in lawmakers, clad school in the U.S., or even children’s hospital. sex treatment imposed by social- Democrats, Public Affairs and a zone’s newest and poorest country, Analysts said the absence of left-leaning government. ble borrowing costs. said they will spend less on new fur- in revealing outfits and many of their former-So- “I thought I would be wearing ism. Even during the Communist third party, TOP 09—includes no balked at plans for a €750 billion unanimous support by the entire Euro-zone leaders, in an early Slovakia, which emerged from the niture, while 45% intend to spend posed provocatively. viet Bloc comrades in a suit,” she says. But once the era, women smuggled fashion women. Prime Minister Petr Ne- ($952 billion) bailout package for euro zone could send a bad signal to May meeting dominated by Nicolas peaceful dissolution of Czechoslova- less on large electrical items. Some A black-and-white por- countries such as Poland, photographer took over, “I real- magazines from the West that in- cas, a Civic Democrat, said this troubled members, delaying the financial markets, calling into ques- Sarkozy of France Angela Merkel of kia in 1993, joined the euro zone Jan. 42% intend to spend less on drinking trait of Katerina Klasnova, where traditional atti- ized I would only be wearing part cluded patterns for stylish was an “unfortunate outcome.” start of the rescue plan. tion the group’s commitment to mu- Germany, agreed to the facility and 1, 2009, as its 16th member. alcohol outside the home, while 39% a new vice speaker of par- tudes and the influence of of it.” The calendar’s February clothes, in large part because —Leos Rousek contributed to this Slovakia’s newly appointed prime tual support. pledged support. The Slovak prime Unlike Greece and some other plan to spend less on eating out. liament’s Chamber of Dep- the Catholic Church have page shows Mrs. Peake, leaning in there was nothing like that avail- article. minister, Iveta Radicova, said she Bratislava is supposed to con- minister at the time gave his assent southern euro-zone members, Slova- There is already evidence that uties, graces the page for made for more conserva- will fly to Brussels on Monday to tribute €4.4 billion to the facility, but said final approval would be up kia has worked to keep its finances the big cutbacks in spending an- January. She has tousled tive fashions. meet European Commission Presi- backed by euro-zone member states. to the next government. under control despite facing a severe nounced in the budget have hit busi- blond hair and is wearing On the opening day of dent José Manuel Barroso and out- The fund is meant to be available to Ms. Radicova leads a coalition of economic downturn last year. The ness confidence. A survey of pur- nothing but a black bra parliament, Ms. Klasnova, line her country’s objections. countries in the euro block with center-right parties that won parlia- economy contracted 4.7% last year as chasing managers in the dominant and short skirt. the vice speaker, and fel- Amadeu Altafaj Tardio, the Euro- debt troubles. mentary elections in June, cam- demand for exports, centered on cars services sector published July 5 Ms. December is the low Public Affairs MP pean Commission spokesman for Last week, Ms. Radicova said she paigning on pledges to cut spending and electronics, sputtered. found that following the budget, party’s chief negotiator, Katerina Karolina Peake, an anti- THE FUTURE LEADERSHIP INSTITUTE economic and monetary affairs, said didn’t want to block the start of the and oppose big-ticket, euro-zone The new cabinet has pledged to sentiment plummeted by the largest Kristyna Koci, pictured Klasnova corruption campaigner Powered by EXECUTIVE LEARNING PARTNERSHIP the commission is hopeful “Slovakia facility but said Slovakia wants bailout projects. cut spending to bring the budget amount in a single month since re- peering over her glasses, and lawyer who repre- Bringing Universities and Businesses Together will honor its commitment and con- more talks on its participation in The stabilization facility com- deficit to less than 3% of gross do- cords began in January 1997. dark knee-high stockings contrast- sents a Prague constituency, tribute.” He said the European Fi- the fund, as well as its overall size prises €440 billion in loan guaran- mestic product within three years. The government and the Bank of ing with her bare thighs and the strode up to the main entrance in Networking with The Wall nancial Stability Facility, which was and other details. tees from euro-zone member states, The deficit is forecast to be 7% of England would like to see a rebal- strap of her negligée sliding down form-fitting skirts, black tops, Street Journal Europe? supposed to become active July 1, The facility was created after the €60 billion from the European GDP this year. ancing of the U.K. economy so that one shoulder. soaring heels and sunglasses. The Journal Europe Win 1 out of 2 seats has been on hold, awaiting Slova- €110 billion bailout package for Union, and up to €250 billion from growth is driven more by exports The party’s racy calendar, Not everyone agrees with the Future Leadership The Journal Europe at our WSJE kia’s approval. Greece stoked fears that other Euro- the International Monetary Fund. It One Czech party promotes new and business investment than con- which was first released during Public Affairs approach. And the “Networking Table” “It is our understanding that pean countries could face similar is to raise money on financial mar- female MPs as pin-up girls...... 33 sumer and public-sector spending, the campaign, is a sign of the calendar has sparked a debate Institute supports Future Leadership which were the main contributors to times here. A new generation of about whether the politicians’ Institute supports at growth in the decade leading up to Czech women is coming of age poses are more likely to break AIESEC’s Global Youth to the financial crisis in 2007. that is embracing femininity and down walls or reinforce stereo- “The Best of Cannes” But an abrupt slowdown in con- sex-appeal while at the same time types. The Public Affairs women Business Forum 2010 Cass Alumni World A Vepec Conference Fewer U.K. companies are collapsing sumer spending before exports pick fighting for, and winning, more “should be presenting themselves Forum up could plunge the U.K. economy equal treatment in the realms of by showing what they want to 26 August, 2010 5 October, 2010 back into a recession from which it business and government. achieve, not by showing off their India School of Business, BY AINSLEY THOMSON for the benefit of creditors. last full year before the financial tions is showing across all sectors: emerged only in the final three “Women’s political influence is looks,” says Zuzana Graczova, a 16 July, 2010 Antwerp, Belgium In the first six months of 2010, a downturn began. 81 retailers fell into administration months of last year, following six growing. Why not show we are human-resources manager at Hyderabad, India London, UK LONDON—The number of U.K. total of 1,065 companies have en- Lee Manning, reorganization-ser- in the first half of 2010, down 57% straight quarters of contraction. women who aren’t afraid of being Czech consulting company Brain To win a seat email us your full companies collapsing has fallen to vices partner at Deloitte, said com- from a year earlier. “It is ironic that a reduction in sexy?” says Marketa Reedova, a Logistics. Ms. Graczova says she contact details with “Cannes” in http://www.aiesec.org/cms/ www.cass.city.ac.uk/awf pre-credit-crisis levels as firms and panies and lenders’ proactive man- Meanwhile, 229 property and consumer spending—driven by eco- 42-year-old Prague city council- doesn’t expect much change in aiesec/AI/Y2B/index.html the subject field. Reply by noon lenders work to manage liabilities The number of British firms agement of financial problems has construction companies failed in the nomic uncertainty—could in fact woman now running for mayor government policy despite the CET, 1 September, ‘10 to the and the economic recovery shows been one of the drivers behind the first half of 2010, down 43%. In ad- bring about the thing people are who also appears in the calendar. greater female representation in address below. Winners will be signs of trickling through to busi- going into administration is drop in administrations. dition, 167 manufacturing compa- most concerned about: a dip back “Czechs are open-minded.” parliament. informed by email. nesses, according to a new survey dropping, according to a “By acting sooner, companies nies were placed in administration, into recession,” said Ivan Browne, May’s elections, 20 years after Lenka Andrysova, 26, another from financial-services firm Deloitte have been able to remedy problems 46% fewer than a year earlier. consumer products and retail expert the collapse of Communism, new Public Affairs member of par- Contact: [email protected] published Monday. new survey, and the positive more effectively,” he said. “We are seeing a steady decline at GfK NOP. swept away a large number of the liament, says she got into politics The Wall Street Journal Europe is The firm’s analysis, which exam- “Equally, lenders have been sup- in administrations and this is cer- The opposition Labour Party and country’s predominantly male, en- in part because she admired the read every day by 40,500 students at 180 top trend is showing across business schools and university campuses across ined all U.K. administration figures, portive, preferring to make debt- tainly a positive sign that the cli- some economists have warned that trenched career politicians. In many accomplishments of former Europe, a program supported by showed that 510 companies went various business sectors. for-equity swaps or even advance mate is stabilizing,” Mr. Manning hasty action to cut the deficit could their place have come a crop of U.S. Secretary of State Madeleine into administration in the second suitably priced risk capital, rather said. “I would be very surprised if lead to a double-dip recession, while new faces, including more women Albright and current Secretary of quarter of 2010, 18% fewer than in than crystallize their debt through administration levels increased dra- the government has argued that only and twenty-somethings. There are State Clinton. Still, she says, she the first quarter of the year. tered administration—43% lower an insolvency process,” Mr. Manning matically this year; rather I would by taking early action can it hold on now 44 female members of the wouldn’t look to them for style Administration is a procedure than the comparable period last added. expect the second half to mirror the to its triple-A credit rating, thus 200-person lower house of the tips. Ms. Andrysova, who repre- under U.K. insolvency law to man- year and actually 25% fewer than in Deloitte’s analysis shows the levels of activity we’ve seen in the keeping long-term interest rates low Czech parliament. The speaker, sents a district in rural Moravia, Executive Learning Partnership - ELP: Strategy & Learning Architects: www.elpnetwork.com age companies in financial trouble the first half of 2006, which was the pronounced decrease in administra- first half,” he added. and supporting the recovery. Miroslava Nemcova, of the conser- is completing a doctorate in polit- 34 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 3 WORLD WATCH NEWS In Nagoya, sumo tournament opens under cloud of controversy U.S. steps up cycling probe

BY REED ALBERGOTTI cerning the U.S. Postal Service team, AND VANESSA O’CONNELL but the probes may include other riders and teams in the U.S. and A federal probe into doping in other countries, according to people professional cycling is proceeding familiar with the situation. quickly, and investigators are cur- In Mr. Landis’s emails, which rently in discussions with several were first published in The Wall riders and their attorneys to secure Street Journal, he admitted doping their cooperation after the Tour de himself and described the methods France ends later this month. he said he had seen while riding for The U.S. criminal investigation, the U.S. Postal Service cycling team which is being led by the Food and and with the Phonak team. Drug Administration, isn’t aimed at In later interviews with the Jour- prosecuting rank-and-file riders who nal, Mr. Landis said he had seen Mr. used performance-enhancing drugs Armstrong and several other riders during their careers, according to take prohibited blood transfusions people familiar with the investiga- and receive them himself during the tion. Rather, it is designed to poten- 2004 Tour de France. tially bring charges against any team Transfusions, which enhance per- leaders and team directors who may formance by boosting a rider’s red- have facilitated or encouraged dop- blood cell count, are considered ing by their riders. cheating by the International Cy- FDA special agent Jeff Novitzky, cling Union, the sport’s governing the lead investigator, didn’t return body. Mr. Landis was stripped of his calls seeking comment. 2006 Tour de France title after fail- It’s unclear how many riders ing a drug test. He denied doping have spoken to investigators or back then, but recently changed his agreed to be interviewed at a future story. date. Two people familiar with the Mr. Armstrong has broadly dis- matter say Mr. Novitzky already has missed Mr. Landis’s allegations and talked to several riders. has questioned his credibility. Mr. Cyclist George Hincapie of the Landis’s claims, he said in a state- Associated Press/Kyodo News BMC professional cycling team, now ment last week, are like “a carton of Hiroyoshi Murayama, the acting chairman of the Japan Sumo Association (in kimono), and top sumo wrestlers bow to spectators in apology on the opening day of a sumo tournament in Nagoya, central competing in the Tour de France, sour milk: once you take the first

Japan. Murayama, a former senior prosecutor, succeeded former wrestler Musashigawa, who was suspended earlier this month over an illegal-gambling scandal that has ensnared 65 wrestlers. has been called by Mr. Novitzky but sip, you don’t have to drink the rest Associated Press (top left); Getty Images (3); Agence France-Presse/Getty Images (2, top center and bottom right) hasn’t talked directly to him. One to know it has all gone bad.” From top left: Austrian Bernard Kohl admitted to doping; former German cycling champion Jan Ullrich has been accused iii person familiar with the matter said The statement also said the Wall of doping; Tyler Hamilton of the U.S. has twice been suspended for drugs. Bottom left: Lance Armstrong strongly denies makers to ignore warnings of a placed on top of the leak in early jecting a proposal to increase central banks seeking to preempt that Mr. Hincapie’s lawyer has been Street Journal article was “full of doping; American Floyd Landis admitted drug use and accused George Hincapie. Europe double-dip recession. “I disagree June to collect the oil and send it taxes and handicapping a fledgling inflation as the region leads the talking to investigators and that Mr. false accusations and more of the with the view that reducing public to surface ships. BP aims to have government struggling to keep the global economic recovery. But the Hincapie is likely to agree to talk to same old news from Floyd Landis, a n In Bosnia, tens of thousands expenditures will hinder economic the new, tighter cap in place as world’s second-largest economy BOK stressed it is just nudging Mr. Novitzky when he returns to the person with zero credibility and an turned out to commemorate the growth,” Trichet said. Instead, early as Monday. from financial meltdown. rates up from emergency levels af- U.S. Mr. Hincapie is a former team- established pattern of recanting to- 1995 Srebrenica massacre, burying stable public finances infuse confi- n Prime Minister Naoto Kan’s ter slashing them during the glo- mate of seven-time Tour de France morrow what he swears to today.” hundreds more bodies as the grim dence into households, businesses n The U.S. Department of Jus- tenure has been possibly short- bal financial crisis. Economists winner Lance Armstrong on the U.S. It is unclear what kinds of process of identifying remains and investors. tice’s civil-rights division will in- ened by the election. Even if he now expect the BOK to stand pat Postal Service cycling team. charges federal investigators might continues fifteen years later. vestigate a white transit officer al- survives the immediate fallout for at least a month. Mr. Hincapie’s Los Angeles attor- bring. People familiar with the mat- Around 100,000 people died in the n The number of U.K. companies ready convicted of killing of an from the results, he could face ney, Zia F. Modabber, confirmed that ter say they are exploring several 1992-1995 Bosnian war, which was collapsing has fallen to pre-credit unarmed black man—a verdict pressure from within the Demo- n In Pakistan, a suspected Tali- he had talked to Mr. Novitzky on Mr. avenues, including whether teams triggered when the ex-Yugoslav crisis levels as firms and lenders that touched off angry protests cratic Party of Japan to step aside ban suicide bomber killed at least Hincapie’s behalf but declined to dis- defrauded sponsors by failing to republic’s Muslim majority de- work to manage liabilities and the and more than 80 arrests in Oak- before the party leadership vote 55 people in the country’s Mohm- cuss the specifics of his conversa- race cleanly or whether Mr. Arm- clared Bosnia an independent benefits of the economic recovery land, Calif. scheduled for September. Having and tribal region, in a strike tion. “My desire is to let George do strong’s U.S. Postal Service team state, and ethnic Serbs responded show signs of trickling through to taken office in early June, that aimed at disrupting efforts by au- his job with as few distractions as misused federal funds. by trying to carve out territory businesses, a new survey from fi- n The White House is contem- would make him Japan’s fifth con- thorities to bring normalcy to the possible,” he said. In the wake of Mr. Landis’s dis- for a greater Serbia. nancial-services firm Deloitte said. plating a broad review of govern- secutive premier unable to hold war-torn area. American cyclist Tyler Hamilton, closures, some riders and team offi- The firm’s analysis showed 510 ment regulations that business the title for more than a year. who rode with Mr. Armstrong’s U.S. cials are stepping forward with simi- n Russia deported three former companies went into administra- leaders have identified as obsta- n In northern Afghanistan, in- Postal Service team from 1995 to lar stories. In an interview in Vienna KGB officers and a nuclear scien- tion in the second quarter of 2010, cles to job-creating private invest- n China’s trade surplus re- surgents killed 11 Afghan police 2001, has been asked to speak with this week with Dow Jones News- tist accused of betrayal, exchang- 18% fewer than in the first quarter ment. The Obama Administration bounded in June to $20.02 bil- and assassinated a district chief investigators but has not yet agreed. wires, former pro cyclist Bernhard ing them in Vienna for 10 agents of the year. is looking for new ways to spur lion—its highest level in half a over the weekend, in a seasonal In an email, Mr. Hamilton, whose Kohl, who quit professional cycling arrested in the U.S. and complet- job growth now that it appears year—despite the debt problems reprise of violence in the once- career was derailed by two positive after a positive drug test in 2008, ing a whirlwind spy swap that n Most Britons expect the U.K. less likely Congress will agree to of China’s largest trading partner, peaceful region, officials said. tests for banned substances, said: “I said Mr. Landis’s descriptions of was one of the largest since the economy to weaken before it spend significant new sums on the European Union. Nine U.S. troops meanwhile died am aware that there is an investiga- doping rang true. Cold War. starts to recover, and intend to government stimulus programs. in south and east Afghanistan, tion of other people in progress, and “That was exactly the way I also make cuts in spending that could n Chinese authorities have found where U.S. officials have warned if I am subpoenaed to provide infor- did it,” said Mr. Kohl, referring to n Slovakia, the euro zone’s new- push it back into recession, ac- n White House adviser David dairy products in at least three that higher casualties were likely mation, I will provide my full coop- Mr. Landis’s allegation that he and est and poorest country, has cording to a survey conducted by Axelrod defended the recess ap- provinces tainted with an indus- because of stepped-up operations. eration.” other U.S. Postal riders received balked at plans for a €750 billion GfK NOP in the days following the pointment of Donald Berwick to trial chemical that killed six ba- iii In addition to the FDA, anti-dop- blood transfusions during the tour ($948 billion) bailout package for government’s emergency budget. head the Centers for Medicare and bies and sickened hundreds of ing officials in the U.S. and in a in a hotel room. “The details of the troubled members, delaying the Medicaid Services, and sought to thousands more in 2008, state Middle East handful of other countries have blood bags and the checking for start of the rescue plan. Slovakia’s n Alan Budd, the departing head dispel concerns among some Re- media said. The discovery sug- joined the investigation. Interpol, cameras and microphones, the cut- newly appointed prime minister, of the U.K. government’s new fis- publicans that Berwick favored a gests toxic milk remains a linger- n A Yemeni appeals court has up- the international police organiza- ting up of the bags and flushing Iveta Radicova, said she will fly to cal council, is to appear at the nationalized health-care system. ing danger in China despite a held death sentences against four tion, has helped bring other law en- them in the toilet, it all took place in Brussels on Monday to meet Euro- House of Commons’ Treasury “He is not coming to implement crackdown two years ago that saw al Qaeda militants in deadly at- forcement agencies into the probe. exactly that way,” he added. pean Commission President José Committee Tuesday, a person at the British system,” Axelrod said. dozens arrested and two people, a tacks that included the assault on “The investigation has reached The Belgian cycling union said Manuel Barroso and outline her the committee said. The hearing iii farmer and a salesmen, executed. the U.S. Embassy and the killing out pretty widely,” said David How- this week that Johan Bruyneel, for- country’s objections. comes after Budd announced he of two Belgian tourists in 2008. man, director general of the World mer director of the U.S. Postal Ser- will step down as head of the Of- Americas n Taiwan’s president urged his Anti-Doping Agency, who says his vice team, had been questioned by n Pope Benedict XVI appointed a fice for Budget Responsibility af- Chinese counterpart to work to- n Israel’s foreign minister said a agency has been updated on the in- the union’s attorney in charge of in- special delegate to take over the ter just three months in the post. n In Brazil, an Air France passen- ward improving historically testy peace deal with the Palestinians vestigation. “There has been signifi- vestigating doping claims. Mr. Legion of Christ, the powerful iii ger jet headed from Rio to Paris ties following the signing of a should include handing areas cant progress.” Bruyneel “formally denied” Mr. Lan- Catholic order that has been made an emergency landing in the landmark trade deal. Ma Ying- where Israel’s Arabs live over to The U.S. government’s interest in dis’s allegations, the union said in a tainted by a sexual-abuse scandal U.S. country’s northeast due to a bomb jeou—who has sought to build Palestinian control. Avigdor Lie- cycling stems from allegations made statement. surrounding its founder, the late threat. All 405 passengers and 18 better relations with the mainland berman said a peace accord this spring by former cyclist Floyd The union said that investigating Rev. Marcial Maciel Degollado. n Oil was spewing largely un- crew members were safely evacu- since taking office in May should be based on “population Landis. attorney Jaak Fransen “will now Italian Archbishop Velasio De Pa- checked into the Gulf of Mexico as ated, and no explosive was found. 2008—said this was an opportu- exchanges, not land for peace.” In April, Mr. Landis sent a series complete the file and will take ac- olis will take the reins of the Le- BP crews claimed progress in the iii nity for the two sides to end de- of emails to cycling officials claim- tions that are deemed necessary,” but gion at one of the most delicate first stages of replacing a leaky cades of mistrust and search for WSJ.com ing there had been widespread dop- would make no further comment. points in its history. cap with a new containment sys- Asia common ground. ing in the sport and accusing several Mr. Bruyneel didn’t reply to an tem they hope will finally catch all To read more about these items, other riders of doping, including Mr. email seeking comment. n Jean-Claude Trichet, president the crude from the busted well. n Japanese voters handed a n The Bank of Korea unexpect- and for all the latest breaking Armstrong, his former teammate. —Flemming Emil Hansen of the European Central Bank, ap- Robotic submarines on Saturday stinging electoral defeat to the edly raised interest rates from re- news,gotoWSJ.com/World Investigators are focused prima- and John W. Miller pealed to investors and policy removed the cap that had been ruling party, exit polls showed, re- cord lows, joining a swell of Asian rily on Mr. Landis’s allegations con- contributed to this article. 2 THE WALL STREET JOURNAL. Monday, July 12, 2010 Monday, July 12, 2010 THE WALL STREET JOURNAL. 35 PAGE TWO BUSINESS WATCH

iii iii and Jeep Wrangler models over agency prepares to unveil the re- the “quality and competence of Autos potential defective brake tubes, sults of an inquiry into banks’ ac- the board” and will urge changes Pharmaceuticals Poland’s determination for reform What’s according to the National Highway counting for borrowing deals in its make-up. The person de- n Fiat is going ahead with a €700 Traffic Safety Administration. The known as repurchase agreements. scribed directors’ response to the n FDA staff scientists continued million ($885 million) plan to shift tubes could lead to the loss of spill as “disastrous.” to question the safety of Glaxo- News some car production to Italy from brake fluid. Ford is recalling n U.S. state and federal regula- SmithKline’s diabetes drug Avan- n Slovakia balked at plans Poland, even though its demands 33,728 of its 2010 Transit Connect tors closed four banks in Mary- n The heads of Anadarko Petro- dia, agency documents show. The may be a model for the rest of Europe for a $952 billion bailout for new working conditions at the vans to replace pushpins holding land, New York and Oklahoma, leum and Mitsui’s oil-exploration documents were prepared for an package for troubled euro- plant were rejected by many the overhead material in the head- bringing the total of U.S. bank unit will testify before a U.S. Sen- FDA advisory panel meeting this [ Agenda ] rate in about a decade, which saw zone members, delaying the workers. Fiat announced its deci- liners. failures this year to 90. ate subcommittee July 22 on their week that will discuss Avandia’s growth at around 5% annually start of the rescue plan. sion after its chief executive, Ser- iii liability in the Gulf of Mexico oil safety and vote on whether it according to CIA reports. Prime Minister Radicova gio Marchionne, met with union n Citigroup said it has received spill. The testimony will be the thinks Avandia should remain on BY IRWIN STELZER Most investors expect that soft plans to fly to Brussels on leaders who had accepted the de- Aviation approval from the Indonesian first time executives of BP’s part- the U.S. market. patch to be nothing more than Monday to outline her coun- mands. Marchionne urged the only stock exchange to broker equities ners in the Macondo well will give iii America was a that. Magdalena Polan, senior try’s objections. 4 major union to reject the agree- n Boeing submitted its attempt to in the country. The seat will en- lawmakers their view on their re- big loser in the European economist at Goldman ment—Fiom-Cgil—to reconsider win a contract to provide the U.S. able Citigroup to offer local and sponsibility for the recovery from Sports recent Polish Sachs, notes that “easy financial n The number of U.K. com- its position, saying the plan would Air Force with new aerial refuel- international clients direct access the spill that resulted from the presidential conditions, strong domestic and panies collapsing has fallen help Fiat stay competitive at a ing tankers. Boeing’s move comes to the Indonesian stock market. burning and sinking of Trans- n A.S. Roma’s owners will put the election. The Law external demand strengthened by to pre-credit-crisis levels as global level. after rival EADS submitted its Citi, which started operating in ocean’s Deepwater Horizon rig. Italian football club back up for and Justice Party’s the increased competitiveness firms and lenders work to own proposal to the Air Force. Indonesia in 1968, already has iii sale after reaching a deal with pro-American Jaroslaw Kaczynski that followed [the zloty’s] manage liabilities, according n Peugeot-Citroën and China’s The winner of the contract stands sales and trading in foreign ex- their biggest creditor, UniCredit, lost his presidential bid to more depreciation and a recovery in the to a new Deloitte survey. 4 Chang’an Automobile Group cre- to gain tanker orders worth a po- change, fixed income, credit and Financial services to pay back €325 million ($411 Europe-oriented Bronislaw rest of Europe have been growth- ated a joint venture to make and tential $35 billion. This marks the commodities in the country. million) of debt. After a final n n Komorowski’s Civic Platform. supportive.” She is expecting the Stocks in the S&P 500 are market passenger cars and light third time the U.S. has sought iii Rory Tobin, the chief executive round of talks, the Sensi family Mr. Komorowski knows that Polish economy to grow 3.5% this moving more often in the commercial vehicles. The move is bids for the tanker, making it one of BlackRock’s iShares unit, has agreed to put its stake in the club

Barack Obama sacrificed the Associated Press year — in line with the same direction and at the designed to allow the French com- of the longest-running and most Energy resigned, according to a source into a new company for which missile defense system he had Bronislaw Komorowski is committed to economic reform. Organization for Economic same time than at any time pany to cash in on the booming controversial Pentagon acquisition with knowledge of the situation. UniCredit will look for a buyer. promised Poland in pursuit his Cooperation and Development’s since the 1987 crash, which is Chinese automobile market and projects in recent memory. Tobin said he was leaving iShares, iii goal of a “reset” to U.S. relations both within Poland and in the EU, system; advance the retirement forecast for the country — and making it harder for stock make it a major player. It is also n BP is in talks with U.S. indepen- the largest seller of exchange- with Russia. And that Mr. Obama the presidency of which Poland age; reform health care; proceed 4.6% in 2011. The latter figure, pickers to shine. 21 part of Peugeot-Citroën’s strategy n U.S. air-safety regulators or- dent oil and gas producer Apache traded funds globally, as he had Technology failed to visit NATO-ally Poland on will occupy next July. with privatizations; reduce farm however, might prove to be a to reduce its dependence on the dered stepped-up inspections or on a deal worth as much as $10 completed the integration of his trips to Europe. But he does face two hard supports. bump due to scheduled EU-funded n Greece will auction its mature European market for the replacement of certain cockpit billion that could include stakes in iShares into BlackRock, which n Google said China’s government Which explains the desire of facts: parliamentary elections are We will have to wait until the infrastructure spending, says Mr. first Treasury bills Tuesday bulk of its sales and profits. windows that since the 1980s have BP’s vast Alaska operations, ac- bought iShares last June as part renewed a license the company Poland’s new president to improve coming up next year, and Mr. parliamentary elections are Belka. since accepting a bailout. 21 caused at least 11 fires or smoke cording to people familiar with of its acquisition of Barclays Glo- needed to continue using its Chi- his nation’s ties to Europe rather Kaczynski made a surprisingly completed in October to find out The Center for Social and n Toyota President Akio Toyoda incidents on widely-used Boeing the mater. A deal, which would go bal Investors from Barclays. Tobin nese Web address, despite months than maintain the rigidly strong showing, garnering 47% of whether Mr. Komorowski has the Economic Research is also n The leaders of Turkey, said his company will look for jet models. The directive, made a long way to helping BP cope will be replaced by Mike Latham, of tensions over censorship re- Atlanticist policy of his votes to push through his reforms optimistic. Its economists are Serbia and other Balkan na- more partners in alternative fuel public by the Federal Aviation Ad- with the financial stress of paying the current head of the iShares quirements. The decision pre- predecessor, and to improve and, if so, whether he is willing to predicting that unemployment will tions gathered to commemo- technology, after buying a minor- ministration, affects more than for the clean-up of the Gulf oil business in North America. serves the search giant’s toehold relations with his Russian It has been Poland’s fate spend a not insignificant amount fall from about 12% to the 10% rate the 15th anniversary of ity stake in Tesla Motors last 1,200 jets manufactured by Boeing spill, could be reached in the com- iii in the country with the most In- neighbor. Despite the made-in- of political capital to do so. range by the end of next year, and the Srebrenica massacre. 5 month. Toyota and Tesla are and flown by U.S. airlines. ing weeks, although there is no ternet users. But it won’t end the Greece upset to the euro, Mr. through the centuries to In any event, he cannot ignore real wages will rise at annual rate working on a prototype of an elec- guarantee it will succeed, one of uncertainty around Google’s fu- iii Health Komorowski holds to his plan to matter more than a tiny the nation’s constitution, which of 2.5% this year and even faster tric car, and Toyota is investigat- these people said. ture there, because Beijing may trade in Poland’s zloty for the requires spending cuts if debt hits in 2011. If promising shale-gas ing Tesla’s use of small low-cost Banking n BC Partners and Silver Lake revoke the license at any time or euro, although not immediately. country should 60% of GDP. It is now 55% and projects prove out, growth might Inside batteries, which differ from the n Calpers, the biggest U.S. public Partners have agreed to purchase block access to Google’s services. America’s president has invited rising. Or the warning of Marek be even more rapid. Japanese auto maker’s larger- n Bank of America admitted to pension fund, will be conferring health-care business MultiPlan in his new Polish counterpart to visit Belka, governor of Poland’s central It has been Poland’s fate scale batteries, Toyoda said. making six transactions that in- with BP officials next Wednesday a transaction that values the com- n Microsoft and Fujitsu have de- him at the White House, to the vote. The loser campaigned on bank. Mr. Belka told Bloomberg through the centuries to matter correctly hid from view billions of amid criticism from some institu- pany at $3.1 billion. Carlyle Group cided to team up in cloud comput- discuss Mr. Komorowski’s plan to a platform of raising benefits for Businessweek that failure to more than a tiny country should. n Ford and Chrysler are volun- dollars of debt, following a bid to tional investors that the BP and Welsh, Carson, Anderson & ing, and will likely announce the withdraw Poland’s troops, the the elderly and increasing the attack the deficit might make it It still matters, even though its tarily recalling more than a com- cut the size of a unit’s balance board’s response to the spill has Stowe are selling MultiPlan, mak- tie-up this week, a person familiar seventh-largest contingent, from minimum wage and took 59% of difficult for Poland to roll over over-$500-billion GDP is only a bit bined 55,800 vehicles in the U.S. sheet and meet internal financial been too passive. A person famil- ing the deal the year’s largest so- with the matter said. The alliance Afghanistan. the rural vote. No deficit hawk, some $62 billion in debt coming more than one-third that of due to safety concerns. Chrysler is targets. The disclosure, made in a iar with the situation said the Cal- called secondary buyout, in which between the U.S. software giant Both men will welcome the he. due in 2011 and 2012, and lead the California’s. recalling 22,118 of its 2010 Dodge letter to the Securities and Ex- ifornia Public Employees’ Retire- a company is passed from one pri- and the Japanese technology ser- traditional photo-op such visits Many of the reforms Mr. markets to see it as “a bad Now, it might matter in a more Nitro, Dodge Ram, Jeep liberty change Commission, comes as the ment System is concerned about vate-equity group to another. vice firm comes as IT industry produce. Especially Mr. Obama. Komorowski has in mind have performer.” pleasant way than in the past. A players world-wide are pinning After all, congressional elections earlier been passed by the At the moment, “The economy successfully reformed Polish their hopes on the expected diffu- are looming, and a significant legislature, only to be vetoed by is going through a soft patch,” economy might serve as an Cleveland prepares itself for post-LeBron era following basketball superstar’s departure sion of next-generation computing number of Polish voters are Mr. Kaczynski’s twin brother, observes the Center for Social and encouraging model for other EU services that are accessed online. concentrated in several key Lech, president until his death in Economic Research in Warsaw. countries, especially since the Now Facebook is congressional districts, not least an airplane crash on April 10. This after Poland, with some reformers will have overcome touting friendship n NTP, a company founded by among them several in Mr. The reform list is basically no backing from the International important entrenched reactionary Thomas Campana—who NTP Obama’s home town of Chicago, different from the one being Monetary Fund and a generous forces, not least among them the for selling. 31 claims was the inventor of wire- which has the largest Polish drawn up across Europe: curtail influx of European Union cohesion nation’s farmers and its less email—filed a lawsuit against population outside of Warsaw. the fiscal deficit (in Poland’s case, funds since 2004, avoided the pensioners. Apple, Google, HTC, LG Electron- Mr. Komorowski, like Polish running at around 7% of GDP); recession that racked most of —Irwin Stelzer is a director of ics, Microsoft and Motorola over Prime Minister Donald Tusk, is reform labor markets; fill the Europe last year. It grew at an economic-policy studies at the eight patents related to the wire- committed to economic reform black hole in the state pension annual rate of 1.7%, the lowest Hudson Institute. less delivery of email to cell- phones. NTP, which holds a num- ber of patents but doesn’t manufacture any products, in ONLINE TODAY 2006 got a $612.5 million settle- ment from Research In Motion to Most read in Europe The Source Continuing coverage Question of the day prevent a potential injunction of blogs.wsj.com/source its BlackBerry smartphones. Vote and discuss: Should ‘Most stock market governments use data The greatest of n Apple opened its second store football’s World Cup in China, the beginning of a major technical analysis that may have been retail expansion for the company stolen to pursue tax greats. 32 in a huge market where it has so far had a relatively meager pres- sits on the same shelf evaders? ence. Hundreds of people lined up to be among the first to enter the Vote online today at wsj.com/polls THE WALL STREET JOURNAL EUROPE as astrology...’ (ISSN 0921-99) 1,500-square-meter underground 1. The Submarine Deals That Commodity Quay, East Smithfield, store in Shanghai, China’s wealthi- Helped Sink Greece London, E1W 1AZ est city. 2. Limbaugh Gets Millions on Sale Alen Mattich on how the market’s rally SUBSCRIPTIONS, inquiries and address changes to: Previous results Telephone: +44 (0) 20 3426 1234. Calling time from iii 3. Opinion: Google With Chinese is likely to prove short-lived. 8 a.m. to 5 p.m. GMT. E-mail: [email protected]. Characteristics Q: Who do you think will Website: www.services.wsje.com ADVERTISING SALES worldwide through Dow Jones Telecommunications 4. U.S. Lags in Job Growth win the World Cup? Spain International. Frankfurt: 49 69 9714280; 5. 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Once registered, redeem future reaction after last night’s Registered as a newspaper at the Post Office. daily codes at: Spain Trademarks appearing herein are used under license from Associated Press WSJ.com wsj.com/accessrenew World Cup final at Dow Jones & Co. ©2010 Dow Jones & Company. All 53% rights reserved. Editeur responsable: Patience Wheatcroft Workers dismantle the 10-story-tall billboard of LeBron James, a Nike ad that has become a fixture in downtown Cleveland, days after the leader of the Cavaliers To read more about these items, Today’s code is: DJCOMPMO-aaabt0go wsj.com/worldcup M-17936-2003. basketball team announced in a one-hour TV special that he was leaving town for the Miami Heat, where he will join fellow superstars Dwyane Wade and Chris Registered address: Boulevard Brand Whitlock, 87, 1200 and for all the latest breaking Brussels, Belgium Bosh. Local perceptions of James, 25, who grew up in nearby Akron, Ohio, and has spent in entire life in the area, have turned him from a hometown hero to villain news,gotoWSJ.com/Business because of his decision to leave Cleveland before bringing a championship title to the city—a goal that James reiterated as recently as March. 36 THE WALL STREET JOURNAL. Monday, July 12, 2010 DJIA 10198.03 À 0.58% Nasdaq 2196.45 À 0.97% Stoxx Eur 600 250.09 À 0.60% FTSE 100 5132.94 À 0.54% DAX 6065.24 À 0.49% CAC 40 3554.48 À 0.46% Euro 1.2635 g 0.35% Pound 1.5110 g 0.33% Acid test: New rules could bring Mass leak of clients’ data pollution cap and trade to a halt confounds Swiss bankers HEARD ON THE STREET THE JOURNAL REPORT 16-19 THE BIG READ 14-15

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Arbitragers take VOL. XXVIII NO. 112 Monday, July 12, 2010 Gazprom: A buy, for now EUROPE europe.WSJ.com Gazprom isn’t feeling the love: At Curiously, Gazprom shares could just 3.6 times 2010 earnings, its From Russia, unloved still gain near term. Futures show haircut on spreads stock is rated even lower than that One-year forward price/earnings the spread between European con- Still haunted by the massacre of disaster-stricken BP. That cheap, multiple, weekly tract prices and spot prices could the Russian gas giant looks attrac- close almost entirely next winter, For some investors, “buying op- is a key problem. Shaky bond mar- tive. Just don’t make it a long-term Gazprom with both at around $8.50 per thou- portunity” is the last thing that kets mean some deals that looked romance. 12 sand cubic feet, says J.P. Morgan. comes to mind after the market’s re- possible early this year can’t be done About 40% of Gazprom’s gas is This should reduce customers’ incen- cent jitters. now. BP is upbeat exported, mostly to Europe, its most 9 tive to shop around, boosting Gaz- Stocks have tumbled since late So when large deals have closed, BP profitable market. But European 6 prom’s market share. Meanwhile, the April, creating some potential to buy such as Exxon Mobil’s $25 billion ac- Union gas consumption fell 6% in recession left Gazprom with spare on the cheap. But merger arbitragers, quisition of XTO Energy, investors 2009. A 13% month-on-month decline 3 output capacity of about 3.1 trillion who trade the stocks of acquisition have had few places to channel the in Gazprom’s gas production in June cubic feet last year, says Barclays targets, have found things getting suggests demand there remains 0 Capital. That is equivalent to almost ever more expensive. weak, says Citigroup. a fifth of EU consumption, so Gaz- Take EV3, whose shares closed at ’05 '06 '07 '08 '09 '10 on cap plans Meanwhile, Europe has been cut- prom can take advantage if demand $22.49 Friday. Assuming a cash offer Financing is a key problem. ting its dependence on Russia by ex- Source: FactSet Research Systems rebounds faster than expected. by Covidien closes at the end of July, panding other supply options, nota- Make no mistake, without a ma- the implied annualized return is just Shaky bond markets mean bly liquefied natural gas. LNG was jor overhaul, Gazprom still looks like 4%. Arbitragers say the yield on such some deals that looked 14% of EU gas consumption in 2009, bic feet, around Gazprom’s price. a bad long-term investment. It rou- a deal would have been at least 50% based on BP data, compared with un- This dynamic affects Gazprom at tinely outspends its cash flow. Its higher, around 6%, back in March. possible early this year can’t der 8% in 2004. Russia’s market home, where prices are set much cash cow, Europe, is weak and is di- The trouble is arbitragers have be done now.

£1.50 as oil gushes share, meanwhile, fell to under a lower by the government. Last year, versifying suppliers. Domestic mar- fewer appealing acquisition targets quarter from 28%. Rising LNG capac- domestic customers paid about one- ket liberalization is slow. to choose from. In the first half, stra- ity and America’s glut of shale gas quarter of European prices. In the near term, however, those tegic buyers made bids worth $260 BY MARK LONG nior Vice President Kent Wells dispersants at the site of the has left cargoes seeking markets. Gazprom has long pressed for investors holding stock in rival Rus- billion for companies worth over cash. said early Sunday that he was leak to break up the escaping Gazprom’s export gas price is this gap to be closed. Despite prog- sian gas producer Novatek especially $500 million each, according to Dea- The risk is that arbitragers will BP PLC’s effort to contain “pleased with its progress.” oil will also continue. mostly linked to oil prices, typically ress, however, Moscow keeps delay- should consider switching into Gaz- logic. These figures exclude private- make huge bets on the few deals the oil flowing from the leak Meantime, BP is in talks The effort comes more with a lag of two or three quarters. ing energy-price liberalization, wor- prom. Novatek trades at nearly 15 equity deals, which are considered around to keep their capital at work. in the Gulf of Mexico entered with Apache Corp. on a deal than 12 weeks after Trans- Customers have recently shied away ried about inflation. And, with the times earnings and is almost entirely more risky. That is even less than the With many funds piled into the same a new stage Saturday, with worth as much as $10 billion ocean Ltd.’s Deepwater Hori- from Gazprom’s relatively pricey gas outlook for European prices now exposed to the domestic market. $309 million of such deals in the targets, pushing down expected re- undersea robots starting work that could include stakes in zon burned and sank, unleash- in favor of cheaper gas in the open lower, the eventual boost to Gaz- Its bigger brother, for all its same period of 2009, when confi- turns, it would only take a single to install a new, tight-fitting BP’s vast Alaska operation, ac- ing the spill that has fouled market. Last summer, for instance, prom from domestic liberalization faults, looks more compelling. dence was dismal. blowup to cause widespread injury. containment cap on the bro- cording to people familiar the coasts of at least four spot gas was $4.25 per thousand cu- looks smaller. —Liam Denning Why the deal dry-spell? Financing —John Jannarone Oman ORBahrain 2 BD 1.50 -Jordan Egypt $1.75 JD2-KuwaitKD1- (C/V) Qatar QR14 - Saudi Arabia SR 14 ken, mile-deep well. with the matter. states and killed untold num- Before the new cap can be Mr. Wells said Saturday bers of creatures. put into place, engineers had that the cap installation For the past several weeks, to remove the more loosely would take four to seven days. the more loosely fitting cap fitting cap that had funneled “If everything went just per- and the Q4000 system have The improbable strength as much as 15,000 barrels a fectly, we’d be there in four managed to keep up to about day to a ship on the surface, days.” BP simultaneously is 25,000 barrels of oil a day out which has now moved off lo- working to bring online a of the Gulf. The new sealing of U.K. government debt cation. BP spokesman Mark third containment vessel. Mr. cap system, plus other mea- Proegler confirmed that un- Wells said oil collection sures, are expected to allow dersea robots successfully re- should start increasing later the recovery of 60,000 to (better than Bunds) moved the cap at about Sunday, with full capacity 80,000 barrels a day in two to 1:30 p.m. EDT Saturday. reached in about three days. three weeks, Mr. Wells said. This means oil is now tem- Mr. Wells said a fleet of Scientists have estimated that Gilts are on a tear. And despite porarily flowing unimpeded oil-skimming vessels had been 35,000 to 60,000 barrels of oil high U.K. inflation, monetary policy Tracking from the well head, though moved into place near the have flowed into the Gulf that appears unresponsive and huge some crude continues to be well site while the well head from the well each day. fiscal challenges, that looks unlikely Government 10-year bond yields siphoned via a separate sys- was uncapped. “We feel we’re to change. tem and flared off from a in a good position to collect Potential deal with Apache While 10-year gilt yields at 3.3% U.K. ship, the Q4000, on the sur- the oil very close to the could help pay claims...... 6 European Pressphoto Agency offer little outright value, they re- 4% face. Of the four-stage process source,” Mr. Wells said Satur- New Orleans lake, viewed as flect a world where regulatory pol- Bosnian women mourn during the funeral of 775 Muslims in Srebrenica. Article on page 5 to install the new cap, BP Se- day. The injection of chemical safe from spill, is hit...... 6 icy, euro-zone troubles and economic German uncertainty are driving cash into 3 gilts. This is a far cry from the start of The Quirk the year, when yields hit nearly 4.3%. 2 Japan voters thrash DPJ The rally has given gilt investors a gain of 6.08% year-to-date, outpacing 2010 even German bonds. BY YUKA HAYASHI government’s postal system Mr. Kan is just the latest The demand-supply picture is Source: WSJ Market Data Group into the nation’s financial- world leader to suffer a set- good. Foreign investors bought £42.1 TOKYO—Japan’s voters services sector, a move that back at the polls, as voters billion ($63.81 billion) of gilts in the handed a stunning rebuke to has been opposed by Japa- world-wide show frustration More energy, three months to April, perhaps di- Inflation, consistently underesti- the ruling Democratic Party nese and U.S. financial firms with their governments amid versifying away from troubled south- mated by the Bank of England, may of Japan, just 10 months after worried about tougher com- continuing economic and fi- fewer emissions. yet cloud the picture. There are Czechmates: New breed of giving the party the keys to petition from the publicly nancial turmoil. British voters signs of inflation expectations drift- women politicians bare government in a historic subsidized behemoth. tossed out the long-ruling La- With technology Today’s 10-year yield of ing upwards. almost all for new, racy transfer of power. The bigger-than-expected bour Party in May, Australia’s But to avoid harming a nascent calendar. Page 33 Sunday’s vote seems likely defeat will hurt Mr. Kan’s unpopular prime minister was 3.3%isafarcryfromthe recovery, rates seem unlikely to rise to usher in a new period of standing within his ruling forced out in June in a power we can do both. start of the year, when soon. political instability in Tokyo, party, just five weeks after he struggle in his ruling party The balance between expansion- World Watch making it difficult for Prime took office, and could fuel and polls suggest U.S. Presi- To meet growing demand, the world yields hit nearly 4.3%. ary monetary policy and contrac- Minister Naoto Kan to move challenges to his leadership dent Barack Obama’s Demo- will need all economically viable tionary fiscal policy may keep gilt A comprehensive rundown of forward on key policy mat- in coming weeks. Mr. Kan fol- cratic Party could get energy sources—while also mitigating yields low until it is clear which side news from around the world. ters, such as curbing the gov- lows four prime ministers roughed up this November. emissions. ExxonMobil is developing ern Europe. U.K. banks also have is winning. Pages 34-35 ernment’s massive outstand- who failed to hold on to the But the DPJ’s troubles also been buying to build liquidity buffers One option is to bet on further ing debt to prevent a office for longer than a year. are of its own making, as two technologies to help address this ahead of new regulatory require- curve flattening. If rate-rise pres- Greece-style meltdown, or At a post-midnight news con- party leaders faced financial challenge today and for the future. ments, soaking up £34 billion in the sures build, two-year yields should implementing an unpopular ference, Mr. Kan was asked scandals, and Mr. Kan’s pre- Editorial Learn more at exxonmobil.com first quarter, says Monument Securi- rise more sharply than 10-year rates. agreement with the U.S. on directly if he would step decessor stepped down after ties. If the economy suffers from auster- & Opinion siting a marine base on the down, a notion he rejected, his indecisive handling of the Meanwhile, prospective supply ity instead, two-year rates will re- southern island of Okinawa. saying: “I will humbly accept Okinawa issue. has fallen to £165 billion and £62 bil- main anchored while 10-year yields South Africa, after the The new weakness also is the latest result... And I will Japan’s major television lion has been sold in just over three could fall further. vuvuzelas go quiet. Page 12 likely to stall a controversial start anew from a new start- networks all forecast that the months. —Richard Barley push to expand the role of the ing line.” Please turn to page 9