Moonves out As CBS Settles Suit

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Last week: DJIA 25916.54 g 48.28 0.2% NASDAQ 7902.54 g 2.6% STOXX 600 373.77 g 2.2% 10-YR. TREASURY g 25/32 , yield 2.944% OIL $67.75 g $2.05 EURO $1.1553 YEN 111.03 What’s Moonves Out as CBS Settles Suit

CEO exits amid new saulted numerous women over gate his alleged misconduct lion to “organizations that cle detailing new allegations News sexual misconduct his career, CBS said, a stun- complete their work, the com- support the #MeToo move- from six more women, includ- ning downfall for one of the pany said. ment and equality for women ing that Mr. Moonves forced claims; deal brokered entertainment industry’s most If Mr. Moonves is cleared in the workplace,” the com- some to perform oral sex, en- Business&Finance over company control powerful figures. of wrongdoing, he could walk pany said in a statement. gaged in other violent and in- CBS also announced a set- away with more than $100 That amount would be de- timidating behavior and retali- tlement of outstanding legal million, according to a person ducted from any severance ated against them when BS CEO Moonves is BY KEACH HAGEY disputes with its controlling familiar with the matter. But that Mr. Moonves would get. rebuffed. Cleaving the company AND JOE FLINT shareholder, National Amuse- if he is found to have engaged The law firms tapped by In response to the latest amid sexual-harassment ac- ments Inc., which will replace in serious misconduct, he CBS are investigating assault claims, Mr. Moonves acknowl- cusations, and CBS said it CBS Corp. Chairman and six members of CBS’s board. would walk away with noth- and harassment accusations edged to the New Yorker three settled legal disputes with its Chief Executive Leslie The size of Mr. Moonves’s ing, several people familiar against Mr. Moonves that sur- of the six alleged encounters controlling shareholder. A1 Moonves is leaving the com- exit package will be decided with the matter said. Mr. faced in a New Yorker article but said they were consensual. pany amid accusations that he only after the law firms that Moonves and CBS agreed to in July. The New Yorker pub- Previously, he has said he re- Alibaba’s Jack Ma said sexually harassed and as- CBS’s board hired to investi- immediately donate $20 mil- lished on Sunday another arti- PleaseturntopageA4 he will step down as executive chairman in a year and hand over the reins to CEO Daniel Zhang. A1 North Korea Marches in a Parade Without Long-Range Missiles Google will appeal an or- Assad Is der to extend the EU’s “right to be forgotten” to its search engines world-wide. B1 Planning An oil-price drop has prompted many investors to reassess whether global Chlorine growth will continue stoking demand for fuel. B1 Attack, President Trump called on Apple to shift production to the U.S. and out of China, after the company said U.S. tar- U.S. Says iffs on goods made in China would affect its products. A4 BY DION NISSENBAUM A new kind of drugmaker WASHINGTON—President is emerging to meet demand Bashar al-Assad of Syria has ap- for lower-priced medicines proved the use of chlorine gas by custom-making drugs, in an offensive against the coun- much like pharmacies that try’s last major rebel strong- mix their own medicines. B3 hold, U.S. officials said, raising Apple plans to unveil the prospects for another retal- two new models with its iatory U.S. military strike as largest iPhone screens yet, thousands try to escape what as well as an updated ver- could be a decisive battle in the sion of its iPhone X. B4 seven-year-old war. In a recent discussion about World-Wide Syria, people familiar with the ALEXANDER DEMIANCHUK/TASS/ZUMA PRESS exchange said, President Trump IN STEP: North Korea celebrated its 70th anniversary with a military parade marked by the absence of any intercontinental ballistic threatened to conduct a massive missiles. The parade in the past has been used to display long-range missiles as a message to Washington. A7 attack against Mr. Assad if he Syrian President Assad carries out a massacre in Idlib, has approved the use of the northwestern province that chlorine gas in an offen- has become the last refuge for sive against the last major more than three million people rebel stronghold, U.S. offi- and as many as 70,000 opposi- cials said, raising the pros- tion fighters that the regime pects for another retalia- Alibaba Picks Jack Ma’s Successor considers to be terrorists. tory American strike. A1 BY LIZA LIN working in education. Before He said he would continue Alibaba was never about Jack International efforts to avert Sweden became the lat- founding Alibaba in 1999, Mr. as the founding partner in the Ma, but Jack Ma will forever an offensive have failed to dis- est European country to Chinese e-commerce tycoon Ma was a teacher—and is Alibaba Partnership, a group belong to Alibaba.” suade Syria, Russia and Iran as shift to the right as a Jack Ma said Monday he will known within the company as of senior executives who have Mr. Zhang, 46, will assume they try to deliver a crippling party with roots in neo- step down as executive chair- “Teacher Ma.” the right to nominate most of leadership of China’s biggest blow to rebels who appear to be Nazism garnered an esti- man of Alibaba Group Holding In a letter addressed to cus- the company’s board despite technology company with on the verge of defeat after try- mated 17.6% of votes in Ltd. one year from today, turn- tomers, shareholders and em- not holding a majority of the businesses spanning e-coming for seven years to force Mr. Sunday’s election. A6 ing over the helm to Daniel ployees—referred to as “Ali- company’s shares. merce, cloud computing and Assad from power. Russia and Zhang, the company’s chief ex- ren”—Mr. Ma said he would “The world is big, and I am entertainment. It controls a Syria have stepped up their air- Negotiators in Congress ecutive officer. complete his current term as a still young, so I want to try massive mobile payment net- strikes, while thousands of civil- are expected to secure a Mr. Ma made the an- member of Alibaba Group’s new things—because what if work, and it is driving hard ians have been evacuated to deal on a package of three nouncement on his 54th birth- board of directors until its an- new dreams can be realized?” into new ventures built on government-controlled parts of spending bills, part of day, saying he has “lots of nual general meeting of share- Mr. Ma. wrote. “The one thing quantum computing and artifi- Syria. Mr. Assad has rebuffed plans to avoid a partial dreams to pursue” including holders in 2020. I can promise everyone is this: PleaseturntopageA2 appeals from the United Na- government shutdown. A4 tions, Turkey, the U.S. and oth- Hurricane Florence ers who have warned that an at- headed toward the Djokovic Takes 14th Grand Slam tack could trigger a new Southeastern U.S., and U.S. and China humanitarian crisis. areas from South Caro- “Syria is once again at the lina up through Virginia edge of an abyss,” Francois were warned to prepare Delattre, the French ambassador for the storm. A2 Battle for 5G to the United Nations, said last week during a U.N. Security North Korea’s 70th-an- Council meeting on Idlib. niversary military parade The Pentagon is crafting mili- was marked by the ab- Dominance tary options, but Mr. Trump sence of any intercontinen- hasn’t decided what exactly tal ballistic missiles. A7 would trigger a military re- A lawsuit in New York sponse or whether the U.S. could test the degree to would target Russian or Iranian which employers can Companies rush to test next generation of military forces aiding Mr. Assad snoop through their work- mobile networks in fight for wireless future in Syria, U.S. officials said. ers’ electronic devices. A3 The U.S. could also use things

MATTHEW STOCKMAN/GETTY IMAGES like targeted economic sanc- JOURNAL REPORT The early waves of mobile China making the bigger BIG WIN: Novak Djokovic celebrates his U.S. Open victory over Juan PleaseturntopageA8 communications were largely push. Martín del Potro. Plus, Jason Gay on the women’s final. A14 Financial-Advice driven by American and Eu- The new networks are ex- U.S. shifts policy as major ropean companies. As the pected to enable the steering battle is in the making...... A8 Rules in Flux next era of 5G approaches, of driverless cars and doc- promising to again transform tors to perform complex sur- Investing in Funds & ETFs, geries remotely. They could Treasure Hunter Searches Rhine River—for a Train R1-10 By Josh Chin, Sarah power connected appliances Krouse and Dan in the so-called Internet of iii Strumpf Things, and virtual and aug- CONTENTS Markets Digest..... B6 mented reality. Towers Business & Finance B2-3 Opinion...... A15-17 After 30 years, quest for 19th-century steam engine looks promising Crossword...... A14 Sports...... A14 the way people use the inter- would beam high-speed in- Heard on Street... B10 Technology...... B4 net,abattleisontodeter- ternet to devices, reducing Journal Report R1-10 U.S. News...... A2-4 mine whether the U.S. or reliance on cables and Wi-Fi. BY NINA ADAM books and photographed Now, at 68 years old, he’s Life & Arts...... A11-13 Weather...... A14 China will dominate. At the Shenzhen head- trains since he was 12, and as close as he’s ever come to Markets...... B9-10 World News...... A6-9 Equipment makers and quarters of Huawei Technol- COCHEM, Germany—Horst eventually became a driver success. After decades of telecom operators in both ogies Co., executives and re- Müller likes trains. It makes himself. combing through historical > countries are rushing to test searchers gathered in July to sense. As a child he lived with For the past 30 years he documents, dozens of field and roll out the next genera- celebrate one of its technolo- his family on the top floor of has moved beyond “like” to trips on- and offshore with tion of wireless networks, gies being named a critical Cochem station. He once cele- obsession. His fixation: Find a elaborate sensing equipment which will be as much as 100 part of 5G. The man who in- brated Christmas dinner in the 19th-century cast-iron steam chasing up dead ends, and get- times faster than the current vented it, Turkish scientist cab of a steam engine with his engine lost in the Rhine river ting wet feet and tick bites, he s 2018 Dow Jones & Company, Inc. All Rights Reserved 4G standard. Governments Erdal Arikan, was greeted father, a driver. He’s collected before it even took its first finally scored a ping on a large are involved as well—with PleaseturntopageA10 model trains, devoured train journey. PleaseturntopageA10 A2 | Monday, September 10, 2018 ***** THE WALL STREET JOURNAL. U.S. NEWS

THE OUTLOOK | Kate Davidson and Nick Timiraos ECONOMIC Fed Ponders New Toolto Avert Crises CALENDAR WEDNESDAY: The Federal Reserve releases the latest ver- decade after a finan- they really need it. rule is that it only applies to sion of the Beige Book, a collec- A cial crisis that para- Buffed Up Officials in other places big banks. Those with assets tion of company anecdotes lyzed the global econ- Capital, as a percentage of assets, has risen substantially since the like the U.K., Ireland, France of less than $50 billion have across Fed districts. Wednes- omy, Federal Reserve last recession, particularly for the largest banks. and Hong Kong have raised seen their capital shrink to day’s Beige Book could provide officials are debating how to their capital buffers, while 14.2% of assets in the first more insights into company hir- apply one of the central les- Banks with $50 billion or more in assets the Fed’s is set at zero. quarter from 15.7% in 2012. ing and pricing plans in the sons they drew from that Banks with less than $50 billion in assets “This would be a good wake of recently imposed and dark episode. 16% Recession time to be raising that capi- oreover, some Fed proposed tariffs. It involves preventing the tal buffer,” said Cleveland M officials have said next crisis from happening Fed President Loretta Mester annual stress tests THURSDAY: The Labor De- on their watch. in a July interview. “In good have already accomplished partment releases August con- The Fed has two tools for 12 times, you raise it.” Not us- the goal of raising capital sumer-price index data. In July, stamping out financial bub- ing it now “puts you more levels for big banks during consumer prices rose 2.9% from bles. It can use either regula- into the camp of” using in- good times. a year earlier, a rate last ex- tion or interest-rate interest rates to guard against “We’ve just gone through ceeded in late 2011. Economists creases to prevent banks and 8 financial instability, she a lot of changes in terms of surveyed by The Wall Street other financial institutions added. how financial institutions are Journal estimate consumer from getting carried away It was a subject of discus- going to be regulated,” At- prices grew 2.8% on the year in during an economic boom. sion at a Boston Fed confer- lanta Fed President Raphael August. Many Fed officials con- 4 ence Friday and Saturday. Bostic said in an interview cluded after the last crisis Ms. Mester is among five re- last month. He said it made FRIDAY: The Commerce De- that it’s best to use regula- gional Fed bank presidents sense to see how banks man- partment releases figures for tion. They can apply that pushing for a move, but the age the new rules before August retail sales. Americans tool surgically, while aggres- authority isn’t in their hands. placing a new demand on boosted their spending in July, a 0 sive interest-rate increases— Instead, Fed governors in them. robust start to the third quarter like taking a sledgehammer 1990 2000 2010 Washington, overseen by Under one possible com- for the economy’s main engine. to a nail—might damage the Source: Federal Reserve Bank of Boston THE WALL STREET JOURNAL. board Chairman Jerome promise, the Fed might stop Economists surveyed by The broader economy in the Powell, vote at least once a ramping up the difficulty of Wall Street Journal estimate re- name of financial stability. One reason for the con- hook to pay back right away, year on its level. the stress tests, while acti- tail sales climbed 0.4% last Some Fed officials want to cern is that asset prices are like a bank deposit, when a One Fed governor, Lael vating the new capital buffer. month. use one of the regulatory booming. U.S. household net loan portfolio goes sour. That Brainard, has publicly backed The stress tests dictate how The Federal Reserve pub- tools the central bank devel- worth—a function of rising creates an important cushion increasing the buffer. Mr. much banks can pay in divi- lishes August industrial produc- oped after the crisis, called a stock and real-estate val- in a shock, when depositors Powell hasn’t weighed in dends and deploy toward tion numbers. In July, this mea- countercyclical capital buffer. ues—was nearly seven times and others demand money publicly, except to say in share buybacks. sure of output at factories, It can require the largest household after-tax incomes back quickly from their June he didn’t think finan- The banking industry has mines and utilities was held banks to sock away addi- in the first quarter, according banks. cial-stability risks were bristled at a regulatory tool down by weakness in the mining tional capital during good to the Fed. That’s higher meaningfully above normal. simply because the economy and utilities sectors. Economists times so they have more to than during the tech-stock orcing banks to hold Banks and some Fed offi- is strong. Officials also say surveyed by The Wall Street fall back on when loans go boom of the late 1990s or F additional capital cials argue against it. One the Fed couldn’t now meet Journal expect production grew bad, like socking oil away in real-estate boom of the might take some pres- reason is that big banks have the criteria it laid out two 0.3% in August. the nation’s strategic petro- 2000s, both of which ended sure off the Fed to raise in- already built up substantial years ago for activating the The University of Michigan is- leum reserve. badly. terest rates very aggressively levels of capital: Among buffer. In 2016, the Fed said sues September consumer-senti- But other officials, and the Capital is long-term to cool the economy if it banks with assets greater it should be activated “when ment data. The university’s con- banking industry, have ques- money a bank draws on to overheats. Some officials than $50 billion, so-called systemic vulnerabilities are sumer-sentiment index was 96.2 tioned why the tool is needed make loans, coming largely also like the tool because the Tier 1 capital was 12.7% of meaningfully above normal.” in August, the lowest level since now, when bank capital levels from shareholders and re- buffer can be reduced when assets in the first quarter, Fed staff have characterized January. Economists surveyed by are high and financial-stabil- tained profits. It represents an actual downturn hits, pro- compared with 8.5% in 2008. such vulnerabilities for now The Wall Street Journal predict ity risks appear in check. funds the bank isn’t on the viding relief to banks when Another limitation of the as moderate. an index reading of 96.0. U.S. WATCH Honoring 9/11 Victims in Shanksville, Pa.

WEATHER POLITICS Florence Strengthens, Trump Rescinds Pact Heads Toward Coast With Ex-Porn Star A tropical storm that has been President Trump on Saturday churning in the Atlantic for a joined his former lawyer, Michael week regained hurricane strength Cohen, in agreeing to rescind the Sunday and was headed toward nondisclosure agreement that le- the Southeastern U.S., the Na- gally requires former adult-film tional Hurricane Center said. star Stephanie Clifford to keep While it was too soon to silent about an alleged sexual project Hurricane Florence’s encounter with Mr. Trump. precise trajectory and timing, Charles Harder, a lawyer for forecasters said areas from Mr. Trump, said in a letter to South Carolina up through Vir- Ms. Clifford’s lawyer that “Mr. ginia should prepare for the Trump hereby stipulates that he storm, which could approach does not, and will not, contest the coast on Thursday. With Ms. Clifford’s assertion that the winds approaching nearly 85 Settlement Agreement was miles an hour, Florence was ex- never formed, or in the alterna- pected to turn into a dangerous tive, should be rescinded.” Category 4 hurricane. Coastal Mr. Trump’s move came a day areas could face storm surges after a filing by Mr. Cohen in a law- and flooding, while communi- suit that Ms. Clifford, known pro- ties farther inland will be at fessionally as Stormy Daniels, filed risk of prolonged rainfall. in March. Ms. Clifford sued the “Florence is forecast to rap- shell company that Mr. Cohen, who idly strengthen to a major hurri- at the time was Mr. Trump’s law- cane by Monday and is expected yer, had used to pay her $130,000 to remain an extremely danger- for signing the agreement in Octo- ous major hurricane through ber 2016. Thursday,” the National Hurri- She also sued Mr. Trump. SETTING A TONE: Ropes are pulled to ring chimes at the dedication of the 93-foot-tall Tower of Voices on Sunday at the Flight 93 cane Center said. — Joe Palazzolo and National Memorial in Pennsylvania. The tower contains 40 wind chimes representing the 40 victims who perished on Flight 93. —Dan Frosch Michael Rothfeld KEITH SRAKOCIC/PRESS POOL

on Mr. Zhang and Mr. Tsai. The Alibaba Partnership Asia. Alibaba Both have been with Alibaba currently comprises 36 part- Mr. Ma established the for more than a decade and ners who are also members of Partnership about 10 years have overseen the company in senior management of Alibaba ago. New members undergo Lays Out its time of transition and Group or its affiliates. Pursu- a thorough vetting process, change. ant to the articles of associa- including evaluations by Mr. Tsai, a 54-year-old Tai- tion of Alibaba Group, the Ali- those already in the exclu- Succession wanese educated at Yale Uni- baba Partnership has the right sive club. versity, is known for being the to nominate a majority of the In his letter, Mr. Ma said brains behind many of Ali- directors to the board of the the time is right for the suc- ContinuedfromPageOne baba’s investments. Mr. Tsai company. cession plan to be announced. cial intelligence. was behind recent investments Members of the Partner- “This transition demon- Mr. Zhang joined Alibaba by Alibaba into its Southeast ship, including Mr. Zhang and strates that Alibaba has in 2007, and was responsible Asian unit Lazada Group and Mr. Tsai, share a common stepped up to the next level of for grooming its Tmall busi- the company’s buyout of on- chat group on Alibaba’s net- corporate governance from a

ness-to-consumer platform KIM KYUNG-HOON/REUTERS line delivery platform Ele.me. work and meet quarterly. company that relies on indi- from an obscure e-commerce Alibaba Chairman Jack Ma, left, and his successor, Daniel Zhang. He recently purchased a 49% Other members include Simon viduals, to one built on sys- website to the online retail stake in the NBA’s Brooklyn Hu, the head of its cloud tems of organizational excel- behemoth highly sought after his team have won the trust as his predecessor, Mr. Zhu Nets. computing division, and Lucy lence and a culture of talent by brands looking to sell in and support of customers, em- said. Mr. Ma will continue his in- Peng, who chairs its Lazada development,” Mr. Ma wrote China. ployees and shareholders,” Mr. Mr. Ma, who stepped down volvement in the company e-commerce unit in Southeast in the letter. The former accountant is Ma wrote. as chief executive in 2013, has through the Alibaba Partner- credited with establishing Analysts who follow the not been present during quar- ship, as a lifetime member. THE WALL STREET JOURNAL Singles Day, the one-day in- company say they have long terly earnings calls with inves- (USPS 664-880) (Eastern Edition ISSN 0099-9660) ternet shopping festival that expected Mr. Ma to further tors, leaving Mr. Zhang, execu- (Central Edition ISSN 1092-0935) (Western Edition ISSN 0193-2241) has become an annual phe- distance himself from Ali- tive vice chairman Joe Tsai CORRECTIONS Editorial and publication headquarters: 1211 Avenue of the Americas, New York, N.Y. 10036 nomenon in the nation. He baba’s day-to-day operations, and Chief Financial Officer AMPLIFICATIONS Published daily except Sundays and general legal holidays. was also a key architect be- noting his public comments Maggie Wu to helm the call Periodicals postage paid at New York, N.Y., and other mailing offices. hind Alibaba’s new retail ini- expressing the desire to pur- and field questions about the Postmaster: Send address changes to The Wall Street Journal, tiative, which sought to blend sue philanthropy and other company. 200 Burnett Rd., Chicopee, MA 01020. online shopping with brick- causes. In his role as executive Gerber Kawasaki Wealth & All Advertising published in The Wall Street Journal is subject to the applicable rate card, copies of and-mortar stores. Mr. Zhang’s appointment is chairman, Mr. Ma has spent Investment Management owns which are available from the Advertising Services Department, Dow Jones & Co. Inc., 1211 Avenue of the Americas, New York, N.Y. 10036. The Journal reserves the right not to accept an advertiser’s order. “Alibaba has seen consistent a safe choice, said Steven Zhu, most of his time representing about 38,000 shares of Tesla Only publication of an advertisement shall constitute final acceptance of the advertiser’s order. and sustainable growth for 13 an analyst at industry consul- Alibaba’s interests with Chi- Inc. valued at roughly $10 mil- Letters to the Editor: Fax: 212-416-2891; email: [email protected] consecutive quarters” under tancy Pacific Epoch in Shang- nese regulators and senior lion at Friday’s closing price of Mr. Zhang, the letter from Mr. hai, as over the past 11 years, Chinese leadership, according $263.24. A Page One article on NEED ASSISTANCE WITH YOUR SUBSCRIPTION? Ma said. “His analytical mind Alibaba has operated very well to a person familiar with the Saturday about Tesla CEO By web: customercenter.wsj.com; By email: [email protected] is unparalleled, he holds dear under him, and he has proved situation. Mr. Ma personally Elon Musk incorrectly said the By phone: 1-800-JOURNAL (1-800-568-7625); Or by live chat at wsj.com/livechat our mission and vision, he em- that he can convert Mr. Ma’s instructs monthly classes to value of the stake was roughly braces responsibility with pas- vision into reality. groom up-and-coming manag- $1 million. REPRINTS & LICENSING sion, and he has the guts to in- The challenge for the com- ers in the company, according By email: [email protected]; By phone: 1-800-843-0008 novate and test creative pany will materialize in the to the person. Readers can alert The Wall Street Journal to any errors in news articles business models. longer term, as Mr. Zhang has Speculation on Mr. Ma’s by emailing [email protected] or GOT A TIP FOR US? SUBMIT IT AT WSJ.COM/TIPS “For these reasons, he and yet to prove he is as visionary successor had largely focused by calling 888-410-2667. THE WALL STREET JOURNAL. ** Monday, September 10, 2018 | A3 U.S. NEWS States Ramp Up Legal Scrutiny of Tech

BY JOHN D. MCKINNON ploring an antitrust investiga- the firms. “Maybe it’s a cen- AND DOUGLAS MACMILLAN tion and hope to enlist Wash- tury ago with the trust bust- ington. ers, where abuses were taken State attorneys general are “I think the companies are by the railroads and the bar- piecing together a coordinated too big, and they need to be ons of industry,” Rhode Island legal strategy to confront broken up,” Republican Loui- Attorney General Peter Kilmar- Facebook Inc., Twitter Inc. and siana Attorney General Jeff tin said in June. “Maybe we’re Alphabet Inc.’s Google over al- Landry said Thursday in a ra- waiting for a Teddy Roosevelt leged antitrust violations and dio interview. to come in.” concerns over data-privacy Twenty years ago, Microsoft The tech companies ada- abuses, as well as growing Corp. faced lengthy antitrust mantly deny they have sought complaints from some Repub- litigation brought by about 20 to suppress conservative con- licans that conservative speech state attorneys general, along tent. And even some big tech is being suppressed. with the Justice Department. critics say they hope legal con-

Tensions have been simmer- So far, the current generation RAMIN TALAIE/GETTY IMAGES ANDREW HARNIK/ASSOCIATED PRESS cerns about the social-media ing for months, but they sur- of internet giants have largely TOMFrom WILLIAMS/CQ ROLL CALL/NEWSCOM/ZUMA PRESS left, CEOs Jack Dorsey of Twitter, Sundar Pichai of Google and Mark Zuckerberg of Facebook. platforms aren’t being weap- faced publicly last week when avoided antitrust enforcement onized for political gain. the Justice Department said action in the U.S., even as the Washington held the latest in a week to consider competition bubbled up in conservative “We obviously think there U.S. Attorney General Jeff Ses- European Union has imposed series of hearings this year concerns in the internet econ- media and was amplified by are competition problems,” sions would meet with several multibillion-dollar fines on into a range of tech issues, in- omy, among other issues. Mr. Trump late last month. said Matt Stoller, a fellow at state attorneys general this Google for alleged abuses including alleged Russian hack- A spokesman for Twitter Democrats have said that is the Open Markets Institute, a month to discuss a growing volving its search function and ing, privacy and user data and declined to comment, while the issue—more than antitrust think tank that has criticized concern that the companies Android mobile-phone system. criminal activity. A persistent Google didn’t respond to re- policy—behind the coming the internet platforms. But the are hurting competition and And yet, the U.S. regulatory theme was the question of reg- quests to comment. A spokes- Justice Department meeting, current focus on the treatment stifling the free exchange of environment is growing con- ulating big tech. man for Facebook pointed to with Republicans hoping to of conservative viewpoints ideas on their platforms. siderably less friendly to tech. The Justice Department de- comments by CEO Mark Zuck- stir their conservative base could suggest “an attempt to The announcement—made Several Trump administration clined to comment beyond last erberg, who said he is open to ahead of November elections. use legitimate concerns to or- amid congressional hearings agencies, including the Federal week’s announcement. It isn’t regulation that protects the All the attorneys general ex- ganize legal power for one into the practices of Facebook Trade Commission, are exam- clear how seriously the DOJ is privacy of users. He didn’t pected to attend this month’s party and point of view, and and Twitter—shed little light ining the industry, and Mr. taking the states’ calls for ac- comment on the prospect of an meeting in Washington are Re- that’s dangerous,” he added. on which remedies might be Trump himself recently railed tion or whether its antitrust- antitrust action or anything publicans, with Democrats say- —Brent Kendall under consideration. But re- against the internet giants and enforcement division had any specific to the state officials. ing they have yet to be invited. contributed to this article. cent comments by several of has attacked behemoths like role in planning Mr. Sessions’ Republicans’ allegations Some Democratic attorneys the state attorneys general Amazon.com Inc. and Google. meeting. that the tech companies sup- general, for their part, have Google to appeal EU order on suggest they are actively ex- Last week, lawmakers in The FTC plans hearings this press conservative voices has raised antitrust worries about ‘right to be forgotten’ ...... B1 Lawsuit Tests Limits Of Bosses’ Snooping BY NICOLE HONG he was owed as part of his departure from Brevet in late A new lawsuit in New York 2016. is highlighting the thorny legal Brevet’s employee handbook issues concerning the degree said the company reserves the to which employers can snoop right to read, access or moni- through their employees’ elec- tor all electronic documents tronic devices. stored or processed on Brevet’s Paul Iacovacci, an ex-manag- computers, including “docu- ing director at Brevet Capital ments and messages which Management LLC, sued his for- don’t directly relate to Brevet’s mer employer last week, accus- business.” Mr. Iacovacci ac- ing the New York investment knowledged his receipt of the firm of accessing his home handbook every year, the com- computer to read his personal pany said. emails and steal data stored on Securities and Exchange personal hard drives. Mr. Iaco- Commission regulations re- vacci alleges the activity vio- quire investment advisers like lated federal antihacking laws. Brevet to maintain the ability A spokeswoman for Brevet to remotely monitor employ- denied the company hacked ees’ communications, accord- into Mr. Iacovacci’s computer, ing to the company.

saying the computer was Bre- At the heart of the lawsuit CAITLIN OCHS FOR THE WALL STREET JOURNAL vet’s property because the is a desktop computer that was Paul Iacovacci at New York’s Grand Central Terminal. Mr. Iacovacci accused Brevet of hacking his home computer and stealing data. company purchased it. provided by Brevet in February The lawsuit, filed Tuesday 2015 to install at Mr. Iacova- cci on Oct. 14, 2016. Three days cci in November 2016, he said. computer after it suspected ically not allowed to penetrate in Manhattan federal court, cci’s home in Connecticut. Mr. later, he sued the company in The company alleged he was Mr. Iacovacci was stealing pro- an employee’s personal email raises novel questions about Iacovacci used it as a family state court for wrongful termi- stealing confidential materials prietary documents, a person account on a work device, what constitutes a work de- computer and as a way to work nation, claiming he was owed to start a competing business. familiar with the matter said. there are ways for employers vice, a gray area that is ex- from home. tens of millions of dollars in Mr. Iacovacci said the infor- Brevet has previously said it to see that data without engag- pected to spawn more legal Mr. Iacovacci said he pur- compensation. mation contained in the coun- was authorized to access Mr. ing in hacking, said Richard battles as employees increas- chased software for the com- The night that lawsuit was tersuit could only have been Iacovacci’s LogMeIn account Lutkus, a partner at Seyfarth ingly use personal devices for puter called “LogMeIn,” which filed, Brevet allegedly used his uncovered through a breach of because he had shared his old Shaw. work purposes. allowed him to remotely access LogMeIn account to access two his personal email account and passwords with the firm when Employees often don’t real- The case could also test the the computer while away from personal hard drives he had personal hard drives. His law- he needed IT help. ize the extent of the digital boundaries of how much au- home. purchased that were attached yers deny Mr. Iacovacci was The company alleges Mr. Ia- trail that is left behind on work thorization employers have to In January 2016, Mr. Iacova- to his computer. Mr. Iacovacci trying to start a competing covacci filed the lawsuit to computers when they read view the contents of personal cci told the company he in- said the company secretly in- company. avoid complying with a court their personal emails at work, devices while they are plugged tended to retire. He was a stalled software that allowed The company has acknowl- order to turn over the contents and employers can legally ac- into work devices. managing director of the fi- data to be copied and trans- edged in state court documents of the computer. Mr. Iacova- cess data like personal text Mr. Iacovacci discovered the nance firm, where he worked ferred out of the personal hard that it accessed Mr. Iacovacci’s cci’s lawyers called the com- messages if employees plug company had accessed his for about a decade. drives. computer that night. But Bre- pany’s demand for the com- their personal phones into computer during a dispute After months of negotia- Brevet then used the mate- vet said it was authorized to puter a “fishing expedition.” work computers and back them over the compensation he said tions, Brevet fired Mr. Iacova- rials it found to sue Mr. Iacova- do so and only accessed the Although employers are typ- up through iTunes, he said. Marijuana-Research Applications Unanswered BY SADIE GURMAN porter of research. Changing Times The DEA under President Two years after the Drug An increasing number of states are legalizing the use of marijuana, Obama began seeking applica- Enforcement Administration but it is still illegal under federal law. tions for new marijuana re- began accepting requests to searchers in August 2016, say- grow marijuana for federally Recreational use legal Medical use legal Marijuana decriminalized ing it “fully supports approved research, none have expanding research into the been answered, leaving more Wash. N.H. potential medical utility of than two dozen applicants in Mont. N.D. Minn. Vt. marijuana and its chemical limbo, people familiar with the Ore. Mich. Maine constituents.” Idaho S.D. Wis. N.Y. process said. Wyo. At least 26 applications The future of the initiative Iowa Pa. have been submitted since Nev. Neb. Ohio ultimately rests with the DEA’s Utah Ill. Ind. Mass. then. None has been approved Colo. W.Va. parent agency, the Justice De- Calif. Kan. Mo. Ky. Va. R.I. or rejected, and applicants say Conn. partment, and officials under Tenn. N.C. they have seen little sign of Ariz. Okla. N.J. Attorney General Jeff Ses- N.M. Ark. S.C. any movement. sions, a longtime critic of mar- Ala. Ga. Del. DEA officials believed their Miss. Md. ijuana use, aren’t eager to ad- Texas La. push to expand research com- vance the applications, these D.C. plied with federal law. But the Fla. people said. Mr. Sessions has Alaska Trump administration threw stated publicly he is open to the effort into doubt by asking research on the drug but has Hawaii the Justice Department’s Office offered no timeline for proof Legal Counsel to review the cessing the applications. Source: NORML THE WALL STREET JOURNAL. policy’s legality, the people fa- The applicants include a va- miliar with the matter said. Of- riety of entrepreneurs, as well clined to comment. applications. A bipartisan ficials concluded it violated a as a university professor and a More states have legalized group of House lawmakers 1961 United Nations treaty that former Navy SEAL who wants marijuana in recent years for also queried Mr. Sessions re- aims to curb drug trafficking. to study how marijuana might medical or recreational pur- cently but received no re- Last spring, Justice Depart- help veterans suffering from poses, generating support for sponse. ment lawyers privately floated chronic pain and post-trau- the issue from both parties. “It is imperative that our a new policy to expand re- matic stress. But pot remains prohibited nation’s brightest scientists search that included signifi- Republican and Democratic under federal law, creating a have access to diverse types of cant additional restrictions. lawmakers have voiced frus- legalgrayarea. federally-approved, research- But DEA officials found it con- tration at the delays, saying The evolving political land- grade marijuana to research voluted, saying it would strain Mr. Sessions has repeatedly scape has turned some law- both its adverse and therapeu- the agency’s resources and be avoided questions about the and-order Republicans into ad- tic effects,” Sens. Harris and almost impossible to imple- status of the applications. The vocates for their states’ rights Hatch wrote. ment, one person familiar with inaction, they say, is stalling to develop a marijuana indus- California this year started the discussion said. The effort much-needed research into the try. It has made unlikely allies what could become the world’s has since been on hold. potential health benefits of of lawmakers such as Sens. largest legal recreational mari- Individual applications are marijuana as society takes a Kamala Harris (D., Calif.), and juana market. Utah still for- weighed by the head of the more tolerant view of its use. Orrin Hatch (R., Utah), who bids the drug, but a ballot DEA, acting administrator Ut- A DEA spokeswoman re- last month wrote Mr. Sessions measure would legalize it for tam Dhillon, but lawmakers ferred questions to the Jus- for at least the third time urg- medical purposes, and Mr. say it is Mr. Sessions’ view tice Department, which de- ing him to take action on the Hatch has been a vocal sup- that matters. A4 | Monday, September 10, 2018 PWLC101112HTGKBFAM123456789OIXX ***** THE WALL STREET JOURNAL. U.S. NEWS Congress Aims to Avoid Shutdown Trump

Anticipated deal on Appropriations Committee while GOP leaders have spending bills this month to Mr. Trump said. Tells Apple spending bills is likely said they expected the House worked to persuade him to fund most of the government. GOP leaders developed a to vote this week on the trio hold off until after November’s While most GOP lawmakers plan to pass government to preclude partial of bills, known as a “minibus,” midterm elections. and aides believe Mr. Trump funding in tranches in part To Shift government stoppage that would include funding for “Show me the last time will be willing to avoid a because Mr. Trump balked the departments of Energy there’s been a government showdown right before the this spring when asked to and Veterans Affairs and the shutdown that Republicans ha- midterm elections, the presi- sign a sweeping $1.3 trillion Jobs Back BY KRISTINA PETERSON legislative branch of govern- ven’t been blamed for. I have dent has kept them guessing. spending bill. Beyond the first ment. never seen it work,” said Rep. He has at times agreed to de- package of spending bills, BY TRIPP MICKLE WASHINGTON—Congressio- The Senate may also vote Mike Simpson (R., Idaho), an fer the fight, while as recently House and Senate negotiators nal negotiators are expected to on the bill this week, though appropriations-committee as Friday indicating that he are trying to hammer out a President Trump called on secure a deal Monday on a that would require an agree- member. “I have never seen it sees political advantages in a deal on two other clusters of Apple Inc. to shift production to package of three spending ment among lawmakers to give you an advantage.” shutdown. bills. They have to find a the U.S. and out of China, reviv- bills for the coming fiscal year, speed up the chamber’s time- Mr. Trump believes differ- “I would do it because I compromise between biparti- ing a longstanding criticism and setting in motion GOP leaders’ consuming procedures. ently, telling GOP leaders in a think it’s a great political is- san Senate bills and the pressuring the iPhone maker to plans to avoid a partial gov- Much of the government meeting at the White House sue,” Mr. Trump said on Air House spending bills, which help fulfill the administration’s ernment shutdown at month’s has yet to be funded, and Con- last week that a shutdown Force One, but also nodded to were written by Republicans economic goal of restoring end. gress has dwindling days and would motivate his supporters the concerns of lawmakers and contain more conserva- American manufacturing. The efforts to keep the gov- an unpredictable president to to vote in November. However, worried the fight could help tive policy provisions. In a Saturday morning tweet, ernment funded come amid contend with before current Senate Majority Leader Mitch Democrats win the net 23 Democrats said they want Mr. Trump said that if Apple uncertainty over whether funding expires at 12:01 a.m. McConnell (R., Ky.) and House seats they need to take back to see House Republicans wants to avoid tariffs on its President Trump is willing to Oct 1. Mr. Trump has raised Speaker Paul Ryan (R., Wis.) theHouse.“Therearealotof make some concessions in the products, it should make those defer a fight with Democrats the prospect of shutting the both said after the meeting politicians that I like and re- spending bills in order to win devices in the U.S. rather than over border-wall funding until government if he can’t secure they were confident that Mr. spect and are with me all the their support. China. He wrote: “Start building after the midterm elections. more funding for the wall Trump was on board with way that would rather not do —Natalie Andrews new plants now. Exciting!” Lawmakers on the House along the border with Mexico, their plan to pass packages of it because they have races,” contributed to this article. The tweet came a day after Apple said in a filing with the U.S. Trade Representative that proposed U.S. tariffs on $200 billion of Chinese goods Nonbelievers Seek Increased Political Power would affect its watch, wireless headphones and other BY IAN LOVETT products, the first time the AND ERIN AILWORTH company has detailed specific damage from the trade battle. HOUSTON—As November’s An Apple spokesman declined midterm election approaches, to comment. nonbelievers in the U.S. are Apple assembles most of its trying to build something that products, including the iPhone, has long eluded them: political in China. The company directly power. employs at least 80,000 people The portion of U.S. adults in the U.S. and claims responsi- who don’t identify with any re- bility for two million jobs ligious group rose to 24% of across the country, including its the population in 2016 from own employees and those of 14% in 2000, according to the suppliers, app developers and Public Religion Research Insti- entrepreneurs who offer prod- tute. But their political influ- ucts across its devices. It spent ence has lagged behind: Just $50 billion last year with more 15% of voters in 2016 identified than 9,000 U.S. suppliers main- as not belonging to a religious taining manufacturing opera- group, according to exit polls. tions across 38 states. Apple A coalition of secular organi- said in July that it employs zations is now determined to about 10,000 directly in China close that gap. This summer, and indirectly accounts for they kicked off a nationwide three million jobs there through voter registration drive, which its supply chain. will culminate with a get-out- the-secular-vote campaign in the fall. Their goal is also to politically galvanize nonbelievers U.S. to Oust around issues like separation of church and state, and access to abortion. PLO From There’s just one catch: How to unite a group of people Washington whose common denominator is BY MICHAEL R. GORDON what they don’t believe? And ERIN AILWORTH/THE WALL STREET JOURNAL even on that point, they are A voter-registration table staffed by Secular Coalition for America representatives at the University of Houston-Downtown last month. heterogeneous: 16% of reli- WASHINGTON—The Trump giously unaffiliated Americans “We want the political estab- Suzanne Stavinoha, 59, a liever. Mr. Huffman this year administration is expected to still describe themselves as a lishment to see us as a group freelance writer who was regis- co-founded the Congressional Rising Presence announce Monday that it will “religious person,” according to they need to make pit stops tering students, tried to ex- Freethought Caucus, along with The share of the U.S. population close the Palestine Liberation PRRI. for,” said Sarah Levin, director plain: “We advocate for the three other Democrats, because with no religious affiliation has Organization’s office in Wash- “We don’t meet every week. of grass roots and community separation of church and state he said he had grown frustrated grown rapidly. ington, administration officials That’s an issue,” said Ron Mil- programs at the Secular Coali- in Washington. It’s just making by the way some politicians on said Sunday night, widening a lar, PAC coordinator for the tion for America. sure that everybody, no matter the right were using the Bible Share of population by religious U.S. campaign of pressure Center for Freethought Equal- To reach that goal, groups what religion, or no religion, is to justify their agenda. affiliation amid stalled Middle East peace ity, a nonprofit group dedicated involved in the Secular America represented.” “The fact that there’s an aw- 30% efforts. to boosting secularists’ political Votes campaign are searching Ms. Stavinoha rarely uttered ful lot of overlap between those Evangelical “The United States will al- power. for nonbelievers in areas where the words atheist, agnostic or who are not religiously affili- Protestant ways stand with our friend and An affiliated PAC has put they may be likely to gather. skeptic, part of a deliberate ated and the political left 20 Unaffiliated ally, Israel,” national security about $20,000 toward support- The Secular Coalition for shift in messaging secular makes them ripe for mobiliza- Catholic adviser John Bolton planned to ing secular candidates this year, America late last month held groups have made to focus on tion,” said David Campbell, a Mainline say in prepared remarks he is Mr. Millar said. By contrast, one of the first voter registra- their political values. political-science professor at 10 Protestant scheduled to deliver Monday, Concerned Women for America, tion drives of the campaign at One factor holding back according a draft reviewed by the University of Notre Dame. Non-Christian one of many conservative the University of Houston- “Nones” from building a politi- Unlike many religious The Wall Street Journal. 0 faiths Christian groups, has spent Downtown. A few students cal identity is the reluctance of groups, however, many nonbe- “The Trump administration $80,000 this election cycle, ac- were eager to get involved. candidates and elected officials lievers have an aversion to 2007 2014 will not keep the office open cording to federal filings. “What they’re doing is the an- to openly call themselves non- proselytizing, which makes it when the Palestinians refuse to Nonbelievers’ party preference Candidates from both par- swer to many of our prob- believers. harder for them to bring new start direct and meaningful ne- ties have long turned houses of lems—being inclusive to every- Since 2016, the number of members into the fold. Eliza- Republican 23% gotiations with Israel,” he worship into hubs of political body,” said Jeff Cayax, a 19- non-theists in public office at beth Rose, a member of the In- No lean 22 planned to add. activism, with Republicans typ- year-old biology student. the state or federal level has land Northwest Freethought Mr. Bolton also planned to Democratic 54 ically visiting white evangelical But others were left con- grown to 26 from 5, according Society, was part of an Idaho threaten to impose sanctions churches and Democrats rally- fused about what the group to the Center for Freethought voter registration drive in June. against the International Crim- Source: Pew Research telephone polls, most ing the faithful at predomi- stood for, illustrating a problem Equality. She had materials about her recent of 35,071 adults conducted June inal Court if it moves ahead nantly African-American secular groups often confront. Last year, Rep. Jared Huff- group on hand, but didn’t hand 4-Sept. 30, 2014; margin of error: +/-0.6 with investigations of the U.S. churches. “I forgot,” Ashley Amaya, 18, man, a California Democrat, be- them out unless someone percentage points (share); Pew Research and Israel. telephone poll of 7,556 adults conducted in “Nones,” as nonbelievers are said just moments after regis- came just the second member asked. 2014; margin of error: +/-1.5 percentage PLO mission officials sometimes called, are looking tering. “It’s like everyone gets a of Congress in modern times to “We’re not recruiting,” she points (preference) couldn’t be reached for com- for the same type of respect. voice?” publicly call himself a nonbe- said. “We’ve never done that.” THE WALL STREET JOURNAL. ment late Sunday.

berg, both close friends of 95- ment brings men to account from issues surrounding Mr. Moonves year-old Sumner Redstone, the for misbehavior across corpo- Moonves’s personal conduct, ailing National Amusements rate America. His case has centered on CBS’s resistance to chairman; former Sony Music played out differently than Ms. Redstone’s effort to merge To Exit as Entertainment chief Doug some other prominent ones, the company with Viacom Inc., Morris; and Joseph Califano where allegations or revela- the media conglomerate that Jr., the founder of the National tions led to an executive’s the Redstones also control. CBS Chief Center on Addiction and Sub- swift departure; in the case Ms. Redstone will emerge stance Abuse. of Mr. Moonves, in the weeks from a settlement having Mr. Andelman’s departure since the New Yorker’s initial maintained control of her me- ContinuedfromPageOne reduces the number of direc- report the company’s stance dia empire while ensuring the gretted behavior that made tors associated with National had been that it would con- CBS board will get fresh blood, women uncomfortable but de- Amusements from three to duct its probe and wait. as she sought. She also man- nied retaliating against those two, including Shari Redstone Under terms of Mr. aged to avoid a trial likely to who pushed him away. and Rob Klieger, a lawyer who Moonves’s contract, he would raise uncomfortable questions “Untrue allegations from has represented the Redstone be entitled to severance of more about the mental capacity of decades ago are now being family. than $180 million in salary and her father, Sumner Redstone,

made against me that are not CHRIS PIZZELLO/INVISION/ASSOCIATED PRESS Mr. Moonves’s ouster bonus awards if he were termi- and her legitimacy at the helm consistent with who I am,” Mr. The New Yorker detailed new allegations against Leslie Moonves. brings an abrupt end to a sto- nated either “without cause” or of the empire. Mr. Redstone Moonves said in a statement ried Hollywood career. The 68- with “good reason.” has 80% of the voting shares Sunday, adding that he was Dick Parsons, have been elected, maker Take-Two Interactive year-old rose through the Several of the women who of National Amusements; Ms. “saddened” to be leaving the the companies said. Other new Software and former chief ex- ranks of the TV production came forward in the latest re- Redstone has the rest. company after 24 years. board members include Can- ecutive of BMG Music Enter- business before coming to CBS port were outraged by recent As part of the legal detente, Earlier, the company said in dace Beinecke, a corporate-gov- tainment. in 1995 and eventually taking news reports that Mr. CBS ended its efforts to dilute a statement: “CBS takes these ernance expert and senior part- Beyond Mr. Moonves, six the CEO job in 2006. He led a Moonves might walk away National Amusements’ voting allegations very seriously. Our ner of Hughes Hubbard & Reed; members of CBS’s board will turnaround of CBS’s prime- with a big severance payout, control of the company to Board of Directors is conduct- Barbara Byrne, former vice depart, including David Andel- time schedule with series such according to the New Yorker. around 20%. ing a thorough investigation of chairman of Barclays Invest- man, a longtime lawyer of Na- as “Everybody Loves Ray- Chief Operating Officer Joe As part of the settlement, these matters, which is ongo- ment Bank; Brian Goldner, the tional Amusements’ control- mond, “The Big Bang Theory” Ianniello was named interim National Amusements has ing.” chief executive of Hasbro Inc.; ling Redstone family; Charles and the “CSI” franchise. chief executive of CBS while a agreed to undo that amend- The settlement with National Susan Schuman, the chief exec- Gifford, who clashed with Na- The CBS chief also be- search is conducted inside and ment. National Amusements Amusements also comes with a utive of SYPartners, a business- tional Amusements President comes the most prominent outside the company for a suc- also agreed it wouldn’t pursue significant shake-up of the CBS transformation consultancy; Shari Redstone in the past; and powerful entertainment cessor. a merger between CBS and Vi- board: Six new members, in- and Strauss Zelnick, chief ex- longtime CBS directors Arnold executive to be forced from The corporate fight over acom for about two years, the cluding veteran media executive ecutive of “Grand Theft Auto” Kopelson and Leonard Gold- his job as the #MeToo move- control, which was separate companies said. A6 | Monday, September 10, 2018 **** THE WALL STREET JOURNAL. WORLD NEWS Right-Wing Party Gains in Sweden Vote The anti-immigration Sweden Democrats had their best result yet in an election

BY BOJAN PANCEVSKI

Sweden became the latest European country to shift to the right on Sunday as immigration continues to reshape the continent’s political landscape. A right-wing party with roots in neo-Nazism garnered an estimated 17.6% of ballots cast in the election, according to a count of the vast majority of constituencies. It was the best-ever showing for the Sweden Democrats, and it leaves the composition of Sweden’s next government un- certain. The vote means that Swe- den, a longstanding model of

stability and one of the INTS KALNINS/REUTERS world’s wealthiest nations, is Members of the Sweden Democrats reacted to exit polls after the election on Sunday in Stockholm. The electoral campaign was centered on immigration and crime. now facing a fractured parliament and unpredictable coali- of the countries most affected Democrats, which will again be become more mainstream as tion negotiations. by the surge in immigration to Rightward Tilt the third largest party in par- other parties have sought to The party’s performance Europe since 2015. Sweden Democrats, an anti-immigration party, gained ground against liament, but with a significantly respond to the mounting pop- followed an uncharacteristi- The outcome suggests that mainstream parties and won an estimated 17.6% of the vote in higher percentage of the vote ular sentiment against immi- cally strident electoral cam- the popular backlash that has elections Sunday. than it won four years ago. grants. The party has long dis- paign centered on immigration swept Europe since the refugee 40% In public comments after avowed its far-right roots. and crime, subjects previously crisis of three years ago isn’t the vote, Sweden Democrats By effectively performing a considered taboo in a country letting up, and that no country leader Jimmie Akesson asked U-turn on immigration policy, known for the civility of its can consider itself immune. the leader of the Alliance, Ulf the mainstream parties man- political debate. “What we are seeing in 30 Kristersson: “The moment of aged to stop the bleeding of Social Democrats Sweden joins a growing list most Western democracies is (Mainstream party) truth is here: Will you choose votes to the Sweden Demo- of European countries where the emergence of a movement Stefan Löfven or Jimmie Akes- crats, said Patrik Ohberg, a po- Moderates right-wing, nationalist, anties- that will be with us for some 20 son?”—a reference to two political scientist at Gothenburg tablishment and anti-immigra- time come. This is not a flash tential coalition options, one Sweden Democrats University. tion parties have made signifi- in the pan or a passing mo- (Nationalist) uniting the red-green coalition Charlie Weimers, 35, a for- cant headway over the past ment in the history of liberal and the Alliance and one in- mer official of the moderate 10 year or so. democracy: national populism Center volving the Alliance and Swe- conservative Christian Demo- Parties long considered on will be a permanent feature of Left den Democrats. Mr. Kristers- crats, left his party Thursday the political fringe have joined our political system,” Matthew son didn’t respond directly. to join the Sweden Democrats, the government in Austria, Goodwin, a professor of poli- 0 Mr. Löfven said Sunday, in what was perhaps the most toppled the old establishment tics at the University of Kent in “We must respect the result, high-profile defection ahead of in Italy, and become the largest Britain, said before the vote. 1998 2002 ’06 ’10 ’14 ’18 and when we have the final re- the election. opposition force in Germany. A count of the majority con- Note: With an estimated 5,999 of 6,004 constituencies reporting sult, all decent parties will col- On Sunday night, he was ju- But the vote in Sweden had stituencies released after poll- Sources: SVT (current); Statistics Sweden (past) THE WALL STREET JOURNAL. laborate.” Final results are ex- bilant. “This is a big blow to been especially anticipated ing stations had closed showed pected on Wednesday. the current government,” he both because the country of 10 Sweden’s ruling red-green co- support of the Left Party, erates, Center Party, Christian The Sweden Democrats’ said of the results. “Swedish million has historically been a alition won a total of 32.7% of which won an estimated 7.9%, Democrats and Liberals, was proposals—a moratorium on society is no longer able to in- bastion of Scandinavian pro- the vote, with outgoing Prime meaning their collective share credited with a total of 40.3%. new asylum seekers, faster de- tegrate the amount of people gressivism—with its generous Minister Stefan Löfven’s Social of the vote would be 40.6%. Before the vote, mainstream portations of illegal immi- who have come already.” welfare and immigration poli- Democrats taking 28.4%. They The right-leaning opposition parties rejected the possibility grants, tighter rules on grant- —Dominic Chopping cies—and because it was one have so far governed with the Alliance, consisting of the Mod- of cooperating with the Sweden ing Swedish citizenship—have contributed to this article.

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BY JAKE MAXWELL WATTS tor’s allegations of corruption by Mr. Duterte and his family, MANILA—Philippine Presi- of amnesty granted by a for- dent Rodrigo Duterte is facing mer president. Mr. Trillanes the biggest test to his author- was a naval officer who joined ity since taking office as his 300 mutineers in occupying a attempt to force the arrest of downtown hotel in 2003 and a leading critic has run into again in 2007 in protest unexpected resistance from in- against alleged government stitutions that had previously corruption at the time. done his bidding. The amnesty revocation The opponent, Sen. Antonio was unprecedented, and the Trillanes, has been holed up at accompanying order to arrest his office in the Senate for Mr. Trillanes without a war- nearly a week for fear of being rant triggered pushback in the arrested if he steps outside. A Senate, which had previously series of judicial rulings in allowed Mr. Duterte to silence coming days could determine critical voices. whether there is a quick ar- Defense officials initially rest, triggering potential said a detention cell had been street unrest, or Mr. Duterte’s prepared for Mr. Trillanes, but audacious gambit ends tangled later said the military said it

in legal thicket, diminishing would wait for a Supreme ED JONES/AGENCE FRANCE-PRESSE/GETTY IMAGES his aura of being able to ram Court ruling before deciding North Korean vehicles at a parade in Pyongyang. The display was watched closely for any sign of intercontinental ballistic missiles. through opposition at will. whether to take him into cus- Mr. Duterte, 73 years old, tody. The police also slowed has employed an authoritarian down, filing separate applica- style of leadership since as- tions for arrest warrants with Pyongyang Parade Is ICBM-Free suming the presidency two lower courts. years ago. He launched a Mr. Trillanes said this BY JONATHAN CHENG The low-key military parade bloody campaign to destroy weekend that serving officers is likely to sustain that eco- drug crime and moved away up to the rank of general have North Korea celebrated its nomic focus, while buoying a from traditional ally Washing- expressed sympathy and 70th anniversary with a mili- diplomatic process that has ap- ton, warming relations with passed him intelligence. tary parade marked by the ab- peared fragile. China. Opponents ended up Mr. Duterte said he was sence of any intercontinental Since President Trump shook imprisoned, removed or hob- standing by his orders but ballistic missiles, noteworthy as hands with Mr. Kim at a summit bled by state agencies, often would await the Supreme the event comes amid a meeting in Singapore in June, after being lambasted with ex- Court to determine whether monthslong detente between there have been signs both of pletives from Mr. Duterte. his proclamation was valid. Pyongyang and Washington warmth and of worry between But his long-high popularity that has appeared precarious at the two leaders. Mr. Trump in ratings are falling. A survey times in recent weeks. August abruptly canceled a trip published Friday by pollster At a similar military parade to Pyongyang by Secretary of

Social Weather Stations in April 2017, North Korea ED JONES/AGENCE FRANCE-PRESSE/GETTYState IMAGES Mike Pompeo and the showed his trust rating falling rolled out at least one ICBM live North Korean leader Kim Jong Un, at right, watches the parade. newly appointed special envoy to a net 57% in June, a new on state television, and then on North Korea, Steve Biegun, low. launched it for the first time a lets, including the Associated Since declaring his nuclear citing a lack of satisfactory The arrest order against few weeks later, provocatively Press and Reuters. program complete in April, Mr. progress on denuclearization by Mr. Trillanes is a test of the on July 4. Leader Kim Jong Un The North didn’t display any Kim has blown up the entrance North Korea. limits of Mr. Duterte’s power. called it a “package of gifts” on long-range missiles capable of to North Korea’s underground Last week, a delegation of “What we are witnessing is a the U.S.’s Independence Day. striking the U.S., the reporters nuclear-test site and begun dis- senior South Korean security peak Duterte,” said political In February, the North again said, though rocket launchers, mantling a satellite-launch site. officials met with Mr. Kim in analyst Richard Heydarian. He rolled out the long-range mis- long-range artillery and goose- He has declared that he was Pyongyang, where Mr. Kim said is “a weakened center of grav- siles at another military parade, stepping soldiers appeared. turning his attention entirely he was committed to denuclear- ity in an increasingly polycen- though in that case the North They were joined in Kim Il toward the economy. ization and talked about Mr. tric and fragmented political refrained from broadcasting the Sung Square by Russia and Throughout the summer, Mr. Trump in a flattering light, landscape.” parade live. China’s third-ranked officials, Kim has embarked on what South Korea’s national security Last Tuesday, during a trip On Sunday, the ICBMs were special envoys and government North Korean state media has adviser said. to Israel and Jordan, Mr. Du- absent altogether, replaced by delegations from Cuba, Venezu- dubbed a “long journey of pa- On Sunday, Mr. Trump in a

terte issued an order to strip BULLIT MARQUEZ/ASSOCIATED PRESS an apparent emphasis on eco- ela, Iran, Syria and the Palestin- triotic devotion,” visiting facto- tweet called the absence of Mr. Trillanes, a focus of irrita- Sen. Antonio Trillanes is holed nomic development, according ian Authority, and the president ries and economic sites in re- ICBMs “a big and very positive tion in part due to the sena- up in his Senate office. to reporters from Western out- of Mauritania. mote parts of the country. statement from North Korea.”

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BY MICHAEL R. GORDON “enduring defeat” will extend the deployment of U.S. troops In the spring, President at least into next year, U.S. of- Trump had an easy answer on ficials said. how to deal with the carnage The legal mandate for keep- in Syria. The president vowed ing U.S. troops in Syria is still to quickly wrap up the fight linked to support for Kurdish against Islamic State and bring and Arab fighters trying to the troops out “very soon.” finish off Islamic State. But The message, which he de- the move has implications for livered at an Ohio rally, was the diplomatic wrangling over popular for a political base Syria’s future as extending the that has embraced Mr. Trump’s U.S. mission against Islamic “America First” message. State will also prolong the

AAREF WATAD/AGENCE FRANCE-PRESSE/GETTY IMAGES Now, with a climactic battle presence of U.S. forces and Syrians fleeing attacks approached a camp in Kafr Lusin near the Turkish border in the northern part of rebel-held Idlib province on Sunday. looming for Syria’s plan with their Syrian allies in oil-rich Russia and Iran to retake areas that the Assad regime is strikes against the Assad re- Russian counterparts to ensure position-held parts of Syria. rebel-held Idlib province, Mr. eager to control. Syria Said gime. “I will not comment on that no chemical weapons were Russia and Iran, which pro- Trump is making a course cor- While the White House U.S. military plans, but Assad’s used in Idlib, U.S. officials said. vide Mr. Assad with the military rection—in tune hasn’t said precisely how long use of chemical weapons, sarin On Sunday, there appeared to firepower he has used to recap- ANALYSIS with national-se- U.S. forces will stay or how To Plan and chlorine, and disregard for be few signs that the U.S. ture most rebel-held parts of curity officials many troops may be needed, de- civilian lives is well documented threats were having a major im- Syria, rejected an appeal last determined to livering a lasting defeat to ex- and contrary to regional stabil- pact. Russian and Syrian air- week by Turkey, which has push back against adversaries. tremists will require more than Gas Attack ity,” Pentagon spokeswoman strikes in parts of Idlib and forces operating in the Syrian The administration is keep- taking back all of Islamic State- Dana White said. Hama provinces killed nearly province along its border, to ing 2,000 U.S. troops in Syria, controlled territory, U.S. officials Mr. Trump launched air- two dozen civilians. Regime he- avert an attack. imposing sanctions on business- said. It also requires ensuring ContinuedfromPageOne strikes against Mr. Assad twice licopters dropped at least 55 Russia has also suggested men close to President Bashar the group can’t make a come- tions against Syrian officials in- in the past two years after ac- barrel bombs—oil drums filled that opposition fighters in Syria al-Assad’s regime and plunging back, as al Qaeda in Iraq, Is- stead of military strikes. cusing the Syrian leader of us- with explosives—while Russian might use chemical weapons on more deeply into diplomacy. lamic State’s forerunner, did less “We haven’t said that the ing sarin gas in attacks that warplanes carried out other air- civilians in an effort to trigger a The main goals are to roll than two years after the Obama U.S. would use the military in killed scores of civilians, includ- U.S. military response. U.S. offi- back Iran’s role in Syria and en- administration withdrew troops response to an offensive,” one ing women and children. cials said there is no evidence sure Islamic State doesn’t make from that country in 2011. senior administration official This time, the Trump admin- that Syrian rebels have the abil- a comeback, U.S. officials say. On the diplomatic front, the said. “We have political tools at istration initially set a new red Fears of a looming ity to carry out such attacks. Ousting Mr. Assad, who has administration has sought to our disposal, we have economic line by warning Mr. Assad that massacre in Idlib Mr. Trump’s first military succeeded in strengthening his reassure allies the U.S. intends tools at our disposal. There are the U.S. would respond if he strike on the Assad regime hold on power over two U.S. to be active in the delibera- a number of different ways we used chemical weapons. But the have been fueled by came in April 2017, when the administrations, is no longer a tions over Syria’s future, isn’t could respond if Assad were to administration stance has hard- new U.S. intelligence. U.S. military fired nearly 60 U.S. priority, senior officials rushing to disengage and is take that reckless, dangerous ened in recent days, as Mr. cruise missiles at a Syrian air- acknowledge. But U.S. officials prepared to impose costs if step.” Trump has publicly warned Mr. field in Idlib Province used as are still trying to foster a more the Assad regime and its Rus- Fears of a massacre have Assad that he risks another U.S. the launchpad for a sarin attack inclusive political arrangement sian and Iranian allies proceed been fueled by new U.S. intelli- military strike if he tries to re- strikes, according to the Syrian that killed at least 83 people. inside Syria while breathing with the Idlib offensive. gence indicating Mr. Assad has take Idlib. Observatory for Human Rights, Mr. Trump approved a one- new life into the nearly mori- Finally, Mr. Trump’s forays cleared the way for the military “By my putting out that mes- prompting thousands in Hama time strike on the Syrian air- bund international negotia- into public diplomacy have to use chlorine gas in any offen- sage I think maybe it’s going to and southern Idlib province to field, which failed to deter Mr. tions over the country’s future. changed, at least for now. In- sive, U.S. officials said. It wasn’t send a signal,” Mr. Trump said flee their homes. Assad from using chemical “They clearly have a new stead of trumpeting the depar- clear from the latest intelligence last week in an interview with Since Friday, regime and weapons again. The second energy focused on Syria,” said ture of U.S. troops this month, if Mr. Assad also had given the The Daily Caller, the conserva- Russian attacks have struck Western response came five Nicholas Heras, a fellow at the he urged Mr. Assad not to military permission to use sarin tive news website. “I mean three hospitals, two first-re- months ago, when the U.S., nonpartisan Center for a New “recklessly attack” Idlib. gas, the deadly nerve agent used we’re going to see, but it’s a ter- sponder centers and one ambu- France and the U.K. fired more American Security. For now, Mr. Trump appears several times in previous regime rible thing.” lance system, leaving thousands than 100 missiles at three Syr- The Trump administration’s to agree that withdrawing from attacks on rebel-held areas. It is U.S. officials have been trying with no access to medical care, ian targets in an effort to crip- evolving strategy has three Syria quickly could play into his banned under international law. for weeks to stave off the offen- according to the Union of Medi- ple Mr. Assad’s ability to use main components. adversaries’ hands. Maintaining U.S. officials wouldn’t say on sive. National security adviser cal Care and Relief Organiza- chemical weapons. On the military front, the the president’s backing for his Sunday whether use of chlorine John Bolton and Secretary of tions, a France-based charity —Raja Abdulrahim in Beirut administration’s new emphasis new strategy may be its propo- gas would trigger new U.S. air- State Mike Pompeo asked their that supports health care in op- contributed to this article. on delivering Islamic State an nents’ biggest test.

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Iraq Violence, Protests Mirror Rivalry Between U.S. and Iran The firing of rockets toward to Iran from dictating government American diplomatic missions in formation after the parliamentary Iraq after protesters torched the election in May. U.S. envoy Brett Iranian consulate in Basra raised McGurk had leaned heavily on tensions as the U.S. and Iran vie Kurdish and Sunni parties to back to shape the next government. the coalition of which Prime Min- On Sunday, a calm held after ister Haider al-Abadi was a part. more troops were sent to the “This is a dangerous escala- southern city and a curfew im- tion in a critical time period in posed to restore order following an unstable region,” said Sunni a week of protests in Basra. lawmaker Salah al-Jubbouri. Demonstrations flared in The U.S. and Iran support ri- Basra this month after thou- val Iraqi political groupings in a sands fell ill because the water high-stakes battle to form a supply was contaminated, and government after the May elec- intensified last week after sev- tion threw up no clear winner. eral protesters were killed. Pro- The Trump administration wants testers burned the offices of a friendly government in Bagh- most political parties in Basra, dad following three years of war including powerful Iran-backed against Islamic State, and as it paramilitary groups, as well as seeks to isolate Tehran politically the office of the Basra Gover- and economically after pulling norate on Sunday (in photo). out of the Iran nuclear deal. It isn’t clear who fired the rock- The two countries support ri- ets toward the U.S. diplomatic val groups in countries such as missions and no damage was Syria, Lebanon and Yemen as caused. But some politicians and they try and strengthen their analysts saw the attacks as a clout in the Middle East. warning to Washington as it —Isabel Coles

sought to prevent factions close and Ali Nabhan ESSAM AL-SUDANI/REUTERS Iran Uses $5 Billion Investment Fund to Fight Sanctions BY BENOIT FAUCON build good will and counter the don its military role in the arm is one of several ways The fund’s hodgepodge of records show. The French-Ira- nation’s isolation. And, it Middle East and scale back its Tehran is trying to work investments generally aren’t nian scientist, Raymond Abol- PLANCY-L’ABBAYE, France— hopes, make money. missile program. around U.S. sanctions. Iran is conducted in U.S. dollars. They hassan, owns the rest. With much fanfare, a French- In this case, the fund Iran’s currency has plum- also exploring a barter system include stakes in an Afghan Mr. Abolhassan was greeted Iranian scientist recently an- bought the French medical fac- meted to record lows, foreign with oil buyers taking goods as trading house, a Brazilian in Plancy-L’Abbaye as a savior. nounced a $3 million plan to tory and its weed-strewn investors have fled, and infla- payment and finding Asian auto-parts plant, a German The factory had become a invest in a bankrupt medical grounds in June to ensure Iran companies to replace the busi- pipeline company and even an symbol of hard times for factory that had become a can obtain medicine for tuber- ness of departing European Omani lease-finance firm France after its owner shut the symbol of France’s troubled culosis, bladder cancer and companies. shared with Iran’s regional ri- plant and moved its work to economy and revive it. other afflictions—drugs that The Iran Foreign Invest- val, Saudi Arabia. The fund China eight years ago. The The majority owner wasn’t could become difficult to ob- 22 ments Co.’s managers didn’t used its stake in a Dubai com- plant closure drew headlines disclosed: Iran’s government. tain because of U.S. sanctions, respond to requests to company to buy power-generation when staff took a manager It was the latest example of said people familiar with the Countries the Iran Foreign ment. A U.S. Treasury spokes- equipment, said a fund adviser. hostage in protest. how Tehran is quietly leverag- project. Investments Co. operates in. man declined to comment. Some investments have paid French officials say the facing its Iran Foreign Invest- “Their aim is to make Iran In a January interview with off financially too. tory restart will create at least ments Co. to loosen the Trump independent” from sanctions, the Oil and Gas Year, a trade But in some, the U.S. has 40 jobs, positions that will be administration’s tightening said a fund adviser. publication, the fund’s Chief limited Iran Foreign Invest- partly funded by French gov- economic noose. The fund, Iran’s already weak econ- tion has risen to its highest Executive Farhad Zargari said ments Co.’s ability to operate ernment subsidies valued at with dozens of investments omy has worsened since Presi- levels since the previous round foreign investments will create and profit. €440,000 ($508,000). and cash accounts in 22 coun- dent Trump withdrew in May of U.S. sanctions ended in “a bridge that allows technol- Facing scrutiny, the fund “They want to lock up in- tries valued at $5 billion, pri- from a U.S.-led international 2015. Another round of U.S. ogy and know-how to flow operates discreetly. vestments, so that the rela- oritizes assets that give it ac- accord that curbed Tehran’s sanctions to begin Nov. 5 will into” Iran, citing pharmaceuti- In France, it bought the tionship cannot be easily un- cess to services, goods and nuclear-weapons program in ban companies from working cals as an example. He said the medicine factory in the wine- done,” said a French official technologies that it is at risk exchange for sanctions relief, with both Iran and the U.S. fi- fund was targeting financial making region of Champagne familiar with the project. of losing under U.S. sanctions, and restored some financial nancial system at the same services to make it easier for through a Paris company, Vac- —Robert Wall in London and the fund’s advisers say. Iran’s penalties. The U.S. administra- time. Iranian entities to trade glob- cinopole SAS, in which it owns Summer Said in Dubai government also hopes to tion is pressing Iran to aban- Iran’s foreign-investment ally. a 60% stake, French corporate contributed to this article. WORLDWATCH

In 2008, the U.S. Government used Palantir to:

Combat terrorism.

In 2018, GRIGORY DUKOR/REUTERS Police detain a protester during a Moscow rally against plans to raise the official retirement age. our global partners EGYPT RUSSIA CHINA Court Sentences 75 Regional Elections August Trade Surplus use Palantir to: To Death in Mass Trial Held Amid Protests With U.S. Set Record A court sentenced 75 people Russia held regional elections China’s trade surplus with the to death for their involvement in amid protests in several cities U.S. hit another monthly record pro-Muslim Brotherhood protests against an unpopular pension-rein August as the world’s second- five years ago, in a mass trial of form plan that has put President largest economy faced the Fight opioid abuse. more than 700 defendants that Vladimir Putin in an unaccus- threat of more tariffs from the rights groups criticized as unjust. tomed defensive position. Trump administration. Most of the accused were ar- The demonstrations, which lo- The surplus with the U.S. Prosecute corruption. rested during the security forces’ cal media reported were planned widened to $31.05 billion from assault on a sit-in at the Rabaa for more than 80 towns and cit- $28.09 billion in July, while its al-Adawiya square in Cairo that ies including Moscow, were total trade surplus narrowed, Shape economic policy. killed hundreds of people. The called by anticorruption activist data from the General Adminis- protests were in support of for- Alexei Navalny, Mr. Putin’s most tration of Customs showed. mer President Mohammed Morsi prominent public critic. Mr. Na- Factors including a weaker Uncover tax fraud. after the army ousted the Isla- valny is serving a 30-day jail yuan and exporters’ front-load- mist movement’s leader. sentence for an unapproved rally ing of shipments in anticipa- Charges against those sen- he tried to organize in January tion of more tariffs contributed Power manufacturing. tenced to death on Saturday in- over the government’s plan to to the worsening trade imbal- cluded the murder of citizens and raise the retirement age. The is- ance, said Liu Xuezhi, an econ- policemen, terrorizing people and sue has galvanized citizens de- omist with Bank of Communi- Combat terrorism. possessing weapons. Others were spite efforts by Mr. Putin to cations. given prison terms, including life calm the discontent by diluting The data came after President sentences, by the Cairo Criminal the proposal. Trump on Friday said the admin- Court. The court sentenced Mr. Analysts said the federal gov- istration is ready to announce Morsi’s son Osama to 10 years. ernment was worried that oppo- tariffs on another $267 billion in Abdel Fattah Al Sisi, the then- sition candidates could use the Chinese goods, on top of levies defense minister and now presi- pension-reform issue to rally sup- it has been preparing on $200 dent, had led the crackdown. port in Sunday’s races to elect billion of Chinese products. “The fact that not a single the heads of 22 regions, including Tariffs on $50 billion of im- police officer has been brought the Russian capital. ports from China have already to account for the killing of at Most of the gubernatorial taken effect, which Beijing has least 900 people in the…protests candidates are Kremlin loyalists. matched dollar for dollar. shows what a mockery of jus- The handful of special elections A third round of tariffs would tice this trial was,” said Najia for seats in the State Duma, bring the total amount of levies Quietly powering the institutions Bounaim, North Africa Cam- Russia’s lower house of parlia- on products the U.S. imported we depend on most. paigns Director at Amnesty In- ment, are expected to have pro- from China in 2017 to more than ternational. Kremlin conclusions. $505 billion. —Jared Malsin —Ann M. Simmons —Liyan Qi A10 | Monday, September 10, 2018 **** THE WALL STREET JOURNAL. FROM PAGE ONE

ery to its new owner in Düs- sus to life.” head of the Darmstadt railway sensors. it!” he said he remembered Train Buff seldorf. The clipper that was A big problem immediately museum, pledged to help re- “It was the absolute low thinking. transporting it down the became evident. Extensive en- store Der Rhein if they could point in my life,” said Mr. Mül- His faith would be tested Rhine tipped to the side, slid- gineering work to tame the find it. Mr. Müller wrote to ler. He took a break from his for the next seven years, when Seeks ing the engine into the wa- Rhine in the 19th century had Bernhard Forkmann, a geo- passion. “His first love has al- 14 expeditions to the spot re- ter—the engine that itself was caused the river to change physicist from Saxony who was ways been the steam locomo- vealed nothing. Finally, in named Der Rhein, after the course. It was unclear whether also an old treasure-hunting tive,” said Edina Müller, his 2016, on expedition 15, the Locomotive mighty river. the site of the original acci- hand. The university professor wife. metal detector sprang to life. Several hundred men and a dent was still part of the river, was hooked. “I’ve been to Alex- In 2008, Mr. Müller set up It showed “a perfect magnetic weighty iron chain tried to re- or now on dry land. andria to hunt for the tomb of in the regional government ar- footprint,” Mr. Forkmann said. ContinuedfromPageOne cover the engine. Special divers By 1989, after triangulating Alexander the Great,” he said. chives in Speyer and waded The real test lies ahead. Mr. mass of underwater iron near were called in from London, the location between historic through 150 meters of shelv- Müller, now retired from the the town of Germersheim, but they couldn’t breast the sources and more recent ing space holding files about railway, is working on plans to close to the French border. strong current. Years later, in maps, “I was pretty sure I’d civil engineering work back to excavate the hulk in October. Next month, when he tries 1925, another planned salvage pinned it down,” Mr. Müller 1800. Some skeptics have argued to excavate and raise the ob- attempt was abandoned due to said, and launched his first ex- Fordays,hewasthefirstto the mass might turn out to be ject, he’ll find out for sure if high costs. After that, the ma- pedition in the field. enter every morning and an unexploded bomb, a tank or he’s found his treasure, or if chine faded from memory. He boarded a rubber dinghy would skip leaving for meal another war relic. “It’s quite his hopes have been dashed In 1986, Mr. Müller was re- to scan the river bed with a Missing the train breaks. “I felt dizzy at times, possible that they’ll pull out a again. minded of the naval accident technician using a Foerster but suddenly I was holding heap of scrap metal,” said When his sensors found in a trade magazine. He imme- probe, a sensitive metal detec- “But his case is truly unique.” two original documents from Björn Bohländer, head of what he believes is the steam diately felt “turbocharged,” he tor used by German bomb dis- Mr. Müller started to be- 1852,” he said. “It was like Frankfurt’s Historic Railway engine, “it was Christmas and said. posal squads. After about lieve the engine was now on winning the lottery.” Association. Easter, all in one,” Mr. Müller “When you board a steam eight hours, he conceded de- dry land. But more failures fol- The documents led Mr. Mül- The team is confident. “If said. “Its special aroma, its locomotive, it’s warm, it feat. There was no 6-meter, lowed. One large metal object ler back to the idea that the it’s not the locomotive,” said looks, you can’t find it in to- smells of oil and there is a 20-ton steam engine there. was ruled out as the locomo- locomotive was underwater, Mr. Forkmann, “it can only be day’s models.” hissing noise,” said Volker He added members to his tive because of its shallow lo- and near a particular gravel the Nibelung hoard”—the fab- On a stormy winter day in Jenderny, an ex-Army captain team. Mr. Jenderny, who was cation. Passageways drilled to- bank. According to river maps ulous “Rhine gold” of Ger- 1852, the coal-fired engine, who has joined Mr. Müller on infected with the same railway ward a second candidate from the 1850s, “there was manic folklore. fresh from its Karlsruhe fac- the search. “With water and bug, helped handle red tape underground were too inun- only one gravel bank in the For Mr. Müller, that would tory, was on its way to deliv- fire you can bring this colos- and permits. Uwe Breitmeier, dated with sand to receive the entire region. This had to be be a great disappointment.

country’s advantage. In March, future generations of wireless ChinaVies the Trump administration networks. blocked Singapore-based “The United States is very Broadcom’s acquisition of U.S. much behind in this space” rel- WithU.S. chip giant and 5G leader Qual- ative to Europe, South Korea, comm Inc., citing concerns that Japan and China, said a 2015 Broadcom would cut the com- internal NSF report on 5G net- OnWireless pany’s research and develop- work development. ment funds and allow Chinese Thyaga Nandagopal—a for- companies to pull ahead in 5G. mer researcher at Bell Labs ContinuedfromPageOne In July, China squelched who is a director at the founda- with thunderous applause. The Qualcomm’s planned acquisition—is leading the test bed win meant a stream of future tion of Dutch chip maker NXP project, in which companies, royalties and leverage for the Semiconductors NV, a deal that academics and government company—and it marked a would have helped Qualcomm agencies will be able to test 5G milestone in China’s quest to profit from 5G investments in and other wireless network ap- dominate the technology. new markets such as connected plications in tandem. Nearly 30 At a Verizon Communica- cars. U.S., European and Asian com- tions Inc. lab in Bedminster, Much of the U.S. unease panies have committed $50 N.J., recently, computer screens stems from the rising clout of million of capital and equip- showed engineers how glare-re- Huawei, which was labeled a ment over the next seven years, sistant window coatings can in- national-security threat, along while the U.S. government has terfere with delivering 5G’s su- with ZTE Corp., by a Congres- pledged to invest another $50 perfast internet into homes. A sional panel in 2012 that said million. model of a head known as Mrs. those firms’ equipment could Head tested the audio quality be used for spying on Ameri- of new wireless devices. Veri- cans. Investment effort zon began experimenting with HuaweiandZTEhavecon- Mr. Nandagopal said that 5G in 11 markets last year. sistently denied providing gov- China’s coordinated invest- Nearby, in Murray Hill, N.J., ernment agencies with back- ments have put it in a “pretty Nokia Corp. engineers are test- door access to their products. good pole position” but that ing a 5G-compatible sleeve that Beijing has likewise pushed to the NSF’s efforts are focused on factory workers could wear like replace or sideline U.S. high- wireless developments after an arm brace during their shifts tech firms within China’s net- 2020, rather than the early to steer drones or monitor works on fears of espionage. At a Verizon lab in New Jersey, above, engineers use a model called Mrs. Head in their tests. An years of 5G deployment. their vital signs. The company China has made 5G a prior- engineer, below, checked broadband in February at a trial 5G base station in Wuhan, China. “We can invest our money began its 5G-related research in ity after failing to keep pace strategically and still get better 2007. with Western countries in de- results than anyone else,” he While the economics of 5G veloping previous generations said. are still being worked out, of mobile networks. The U.S. Some American telecom boosters say the potential pay- dominated 4G, built in the late companies are staking claims to offs are immense. Companies 2000s, much in the same way rooftops and light poles where that own patents stand to make Europeans controlled 3G stan- they can position small cells billions of dollars in royalties. dards. The American lead in 4G that enable the faster networks, Countries with the largest and has been a boon to companies and pressing equipment and most reliable networks will such as Apple Inc. and Qual- device makers to create 5G- have a head start in developing comm, and helped give rise to a compatible products. the technologies enabled by host of consumer smartphone For all the investment, in- faster speeds. The dominant applications from the U.S. dustry experts note the stan- equipment suppliers could give Since 2015, China has built dards for 5G aren’t fully written national intelligence agencies about 350,000 cell sites, com- and wireless carriers are still and militaries an advantage in pared with fewer than 30,000 figuring out how they can best spying on or disrupting rival in the U.S., according to an Au- profit from the service. countries’ networks. gust study by consulting firm At a 5G forum in Santa “As we face the future, we Deloitte. It also noted China has Clara, Calif., in July, Henning know deep down that the birth 14.1 sites for every 10,000 peo- Schulzrinne, a former chief of 5G standards represents a ple, compared with 4.7 in the technology officer at the FCC, new beginning,” Huawei’s U.S. That matters for 5G, be- said operators would also have chairman, Eric Xu, told the au- cause the new networks will re- to find a way to drastically re- dience at the company event. quire much larger numbers of duce the cost of data to make Hans Vestberg, Verizon’s cell sites than 4G. applications such as augmented chief executive officer, speaks The physical manifestation or virtual reality affordable

of the technology in equally of China’s push is a govern- FROM TOP: VERIZONenough COMMUNICATIONS INC.; XIONG QI/XINHUA/ZUMA PRESS to sell to consumers dramatic terms. “We are strong ment-run 5G lab near the Great over 5G. Some of those applica- believers that 5G [will have] a Wall north of Beijing. The responsiveness needed for ad- making progress. lasted past midnight with pro- tions could work using 4G or very transformative effect on sprawling facility is festooned vances such as driverless cars, In 2009, as Huawei’s 5G ponents of a rival technology Wi-Fi instead. many things in our society,” he with base stations and proto- which must instantaneously push began, it recruited Tong favored by most Western firms, “Who’s going to stream AR said. “Consumer, media, enter- type mobile devices, with in- communicate with traffic sig- Wen, a former senior re- according to one standards ex- or VR if it’s going to cost them tainment…whole industries.” door and outdoor facilities for nals, other cars and their sur- searcher at now-defunct equip- pert who was there. $10 per minute?” he said. each of the major Chinese car- roundings. ment maker Nortel Networks “The Chinese decided this John Donovan, chief execu- riers and equipment makers, China’s bid to steer the 5G Corp., to set up a research lab was important,” the expert tive of AT&T’s communications Chinese lead according to engineers and ex- future depends heavily on set- in Ottawa. While flipping said. “This was one of the big- business, said the company’s By some measures, China is ecutives who have visited the ting technical standards the through an academic journal, gest political battles we’ve ever researchers have been among ahead. Since 2013, a govern- site. rest of the world will have to Mr. Tong had stumbled on “po- seen.” the most prolific writers of 5G ment-led committee has Trials are coordinated by a follow—and pay royalties and lar coding,” a novel method for The meeting ended with a standards, but it is being cau- worked with China’s mobile consortium of tech firms, uni- licensing fees to use. It has correcting errors in data trans- compromise: Polar codes will tious as it puts the technology carriers and gear-makers on versities and research institutes played an aggressive role in the mission invented by Mr. Arikan, be adopted for part of the stan- in the field. testing and development. The that operate under China’s Min- international telecom industry the Turkish scientist. dard, giving Huawei ownership “To deploy technology in ad- state-led approach, combined istry of Industry and Informa- collective that sets global stan- Huawei poured resources of a critical patent. The com- vance of need, before the use with an enormous domestic tion Technology. The group dards. into developing it, and the gov- pany has spent more than $1 cases are there—you’re wasting market, ensures that Chinese aims to wrap up tests by the Experts inside and outside ernment leaned on Chinese billion on 5G research and de- money,” he said. companies such as Huawei will end of the year. China expect Qualcomm and companies to vote for it en velopment so far. Executives at Huawei have sell large quantities of 5G After those trials conclude, other Western firms to end up masse at a key standard-setting The U.S. government has also sought to temper 5G ex- equipment and gain valuable state-run carrier China Mobile, with a majority of the essential meeting at the Peppermill Re- stopped short of mandating ef- pectations. Before an audience experience in the process. the world’s largest mobile oper- patents once the standards are sort in Reno, Nev., in 2016. The forts by the private sector. In of analysts at an annual meet- In the U.S., where the gov- ator by subscribers, will follow fully determined, but China is result was a tense fight that January, a senior National Se- ing at the Shenzhen headquar- ernment typically avoids man- up with its own tests in 17 cit- curity Council official floated ters in April, Mr. Xu, Huawei’s dating and coordinating efforts ies, according to Chih-Lin I, a the idea of rivaling Beijing with chairman, said that “the entire by the private sector, much of former Bell Labs researcher More Mobile a government-led effort to industry and also governments the experimentation has been and the company’s chief scien- Mobile internet usage continues to grow in China and the U.S. build a nationalized wireless around the world have re- led by companies such as AT&T tist of mobile technologies. network, but regulators and of- garded 5G too high, to the ex- Inc., Verizon, Samsung Elec- China’s 5G service is expected 3G and 4G subscribers in China U.S. wireless connections* ficials said it was too expensive tent that it’s going to be the tronics Co. and Nokia. Last to be ready for commercial use and unrealistic. digital infrastructure for every- 1.2 billion 400 million week, tech companies including by 2020. Earlier this month, the Fed- thing.” Intel Corp. and Cisco Systems The faster generation of net- eral Communications Commis- Huawei and China Mobile Inc. argued in comments filed works relies on sophisticated 1.0 sion announced a plan to speed will push ahead with 5G on a to the U.S. Trade Representa- technology that allows wireless 300 up the build-out of 5G networks large scale regardless, accord- tive that proposed tariffs would airwaves to be used more effi- 0.8 by overriding some local rules ing to executives from both raise the cost of routers, ciently. Plans call for it to run and fees governing the deploy- companies. switches and other goods, on high-frequency millimeter 0.6 200 ment of small cellular transmit- “5G is such an important slowing development of 5G. waves, which can handle more ters, an important component strategic project for China— Three of the major carriers data but can’t travel as far as 0.4 of the infrastructure. The plan kitchen sink, all the resources,” plan to roll out 5G service in lower-frequency waves used by 100 is expected to win approval in said Edison Lee, a telecom ana- select cities later this year, older networks. That means 5G 0.2 late September. lyst at investment bank Jeffer- though most mobile devices will rely on clusters of anten- The government has funded ies in Hong Kong. “Because if compatible with the new net- nae as well as decentralized 0 0 some academic research that they get their foot in the door work won’t be ready until early data centers close to consum- has paved the way for commer- for 5G, they get their foot in 2012 ’13 ’14 ’15 ’16 ’17 2012 ’13 ’14 ’15 ’16 ’17 2019. ers and businesses—requiring cial technologies. One agency, the door of 6G, 7G, 8G.” The race to 5G has come big investments in infrastruc- *Including smartphones, tablets, laptops and other devices the National Science Founda- —Drew FitzGerald and Yang with tit-for-tat regulatory ture. The networks are ex- Sources: China's Ministry of Industry and Information Technology (China subscribers); tion, is coordinating an effort Jie contributed to this moves aimed at securing each pected to have the speed and CTIA (U.S. connections) THE WALL STREET JOURNAL. to build test beds for 5G and article. THE WALL STREET JOURNAL. **** NY Monday, September 10, 2018 | A10A GREATER NEW YORK Voters’ Choice: Outsider or Incumbent Actress and activist Speculation on White House ambitions looks to join the mounts as Cuomo runs for a third term ranks of recent BY JOSEPH DE AVILA Mr. Cuomo’s statement at underdog winners the debate, however, seemed The whispers that Andrew to rule that out for 2020, Mr. BY KATIE HONAN Cuomo harbored presidential Arzt said. “It’s very difficult ambitions have followed the when you lie to God,” he said. Cynthia Nixon is down in the governor since his first term. With no clear Democratic polls and trails New York Gov. For the past eight years, Mr. front-runner in 2020, Mr. Andrew Cuomo in fundraising Cuomo has sought to play down Cuomo is one of many public by tens of millions of dollars. that speculation. Now in the officials from the tri-state re- But she and her supporters still midst of his third campaign for gion who have been mentioned see an upset coming in Thurs- governor, Mr. Cuomo tried shut- as possible presidential candi- day’s Democratic primary. ting down that chatter for good. dates. They include: New York “I need you He declared at a recent de- Sen. Kirsten Gillibrand, New u to do every- bate with his Democratic pri- Jersey Sen. Cory Booker and ELECTION thing you can mary opponent, Cynthia Connecticut Sen. Chris Murphy. 2018 in the next Nixon, that he planned to If he were to run, Mr. Cuomo seven days,” serve his entire term if voters would be able to campaign on u she told a few re-elect him this November. his record as a centrist pro- dozen fired-up “The only caveat is if God gressive who championed volunteers and donors last strikes me dead,” said Mr. same-sex marriage, stronger week at a campaign party at Lot Cuomo, 60 years old, with a bit gun laws and a $15 minimum 45, a bar in Bushwick, Brooklyn. of dramatic flair. “Otherwise, I wage, said Doug Muzzio, pro- Ms. Nixon, an actress, told will serve four years as gover- fessor of political science at the crowd that her high hopes nor of the state of New York.” Baruch College. He would also for Thursday were inspired by Some Democratic consul- face scrutiny for his “Machia- recent underdog wins in Demo- tants who know the governor vellian reputation” and his

cratic primaries across the FROM LEFT: PETER FOLEY FOR THE WALL STREET JOURNAL; CLAUDIO PAPAPIETRO FOR THE WALL STREET JOURNAL said Mr. Cuomo’s forceful hardball political style, he said. country. There was Alexandria Cynthia Nixon is challenging Gov. Andrew Cuomo in Thursday’s New York Democratic primary. statement left no wiggle room Opponents would also likely Ocasio-Cortez, a first-time po- for him to reverse course and zero in on the corruption litical candidate who defeated governor in March, positioning Sen. Jose Peralta in Queens, said ence at John Jay College, said effectively took an issue off scandals in Albany during Mr. longtime Bronx and Queens herself a far-left progressive campaigning with Ms. Nixon has Ms. Nixon’s celebrity may have the table that Ms. Nixon and Cuomo’s tenure. Mr. Cuomo’s politician Rep. Joe Crowley in candidate and an alternative helped in her district. helped her to connect with Marc Molinaro, the Republican former aide, Joseph Percoco, June; Ayanna Pressley, a Boston to Mr. Cuomo. “So many New Yorkers un- voters. Yet she has mixed that candidate for governor, would was found guilty in March of city councilor who last week Her focus has been on edu- derstand the level of corrup- connectivity with knowledge try to exploit. Others aren’t corruption-related charges beat a 10-term congressman in cation, wealth inequalities tion that is happening in Al- on issues that are important to convinced he has given up on stemming from his time in the Massachusetts; and Andrew Gil- throughout the state and in- bany,” Ms. Ramos said. “I think voters, according to Ms. Majic. a 2020 presidential bid. Cuomo administration. Mr. lum, the mayor of Tallahassee frastructure failings, including now more than ever people are “She’s breaking that fourth “There is no way he’s not Cuomo wasn’t accused of who beat the establishment fa- the crumbling subway in New paying attention to what’s wall and she is actually out running,” said a person who wrongdoing. vorite in Florida. York City. At the bar last wrong with our government.” there really engaging on the worked for the governor’s fa- Mr. Cuomo began 2017 pro- Before their victories, polls week, many backers wore Mr. Cuomo has gone after ground with various constitu- ther, Mario Cuomo. “His whole moting his tuition-free college showed those Cinderella can- black stickers that said “Tax Ms. Nixon’s lack of experience, encies,” she said. “Most of her life has been a competition program and bragging about didates were all behind in the Rich, Fix the Subways.” taking jabs at her career as an campaign is about not appeal- with his father.” the state’s infrastructure in- their races. And polling from Ms. Nixon has also em- actress best known for her ing to her celebrity friends.” A presidential campaign vestments in John F. Kennedy July showed that Ms. Nixon braced other insurgent candi- role as Miranda Hobbes on New York City Councilman would further set Mr. Cuomo International Airport and the trailed Mr. Cuomo by more dates in this Thursday’s pri- “Sex and the City.” Brad Lander, who represents apart from his father, this per- replacement of the Tappan than 30 points. mary, supporting challengers Ms. Nixon has not shied neighborhoods in Brooklyn son said. Zee Bridge—officially named “The pundits and the poll- to incumbent New York state away from her famous TV role, and endorsed Ms. Nixon in Au- The elder Mr. Cuomo, who the Gov. Mario M. Cuomo sters have not caught up with senators who were members of releasing a campaign video gust, said he considered her served three terms as New Bridge after his late father— this progressive moment that the former Independent Demo- last week called “Cynthia lack of experience before sup- York’s governor, weighed run- sparking more talk of a White we’re in, and people are de- cratic Caucus, as well as back- Nixon is Not Miranda,” which porting her. He said he deter- ning for president in 1988 and House run. The governor has manding more of the Demo- ing New York City Councilman mixed in her ideas about ten- mined it wasn’t an issue. 1992 and passed both times. also taken on a more confron- cratic Party and demanding Jumaane Williams, who is run- ant protections and mass in- “She is a good and sincere “I think in his heart of tational approach with Presi- more of their candidates,” she ning for lieutenant governor. carceration with questions listener, and you can tell she hearts he would like to sur- dent Trump in 2018, attacking said in an interview. Jessica Ramos, a former about the popular HBO show. has real empathy for the chal- pass his father and run for the the president repeatedly over Ms. Nixon, 52 years old, an- staffer for Mayor Bill de Blasio Samantha Majic, an associ- lenges New Yorkers are fac- presidency,” said George Arzt, his administration’s new tax nounced her campaign for who is now running against state ate professor of political sci- ing,” he said. a Democratic consultant. law and immigration policies. Safety Concerns Delay Opening of Bridge’s Second Span BY PAUL BERGER Cynthia Nixon. Ms. Nixon called Saturday for New York Gov. Andrew an investigation into the timing Cuomo’s celebration of the full of the opening. “There are real, opening of the replacement reasonable questions about for the Tappan Zee Bridge was whether this bridge span open- marred by an unexpected ing was accelerated to aid the safety issue and criticisms governor’s campaign,” she said. from political opponents that Marc Molinaro, a Republican he rushed the launch. running for governor, said Sun- Engineers spent the week- day he has identified two end assessing structural con- “whistleblowers” who say Mr. cerns surrounding a loud pop- Cuomo pressured contractors to ping noise on the Tappan Zee open the bridge on Friday for Bridge, which sits next to the political reasons, “threatening newly completed eastbound and putting at risk the safety of span of its $3.9 billion re- countless New Yorkers.” placement, the Gov. Mario M. Mr. Molinaro called on state Cuomo Bridge, named after and federal bodies, including Mr. Cuomo’s late father. the National Transportation The current governor held a Safety Board, to launch inves- ceremony Friday marking the tigations and to subpoena the completion of the new bridge’s whistleblowers so they could second and final span. Hillary speak without fear of reprisals. Clinton spoke at the event, The NTSB said Sunday that it where hulking pieces of the only investigates accidents. old Tappan Zee Bridge, which Mr. Cuomo dismissed the is being dismantled slowly, allegations. During a news loomed in the background. conference at his Midtown Vehicles were supposed to Manhattan office on Sunday,

begin crossing the new east- MARK LENNIHAN/ASSOCIATED PRESS he said that the opening date bound span Saturday. But af- Member of the Nyack High School band performed Friday at a ceremony marking the completion of the Gov. Mario M. Cuomo Bridge. for the new span was chosen ter hearing the popping sound by the bridge contractor, a from the old bridge at around Mr. Cuomo later said work- directions between Rockland sortium overseeing construction ties that the new span open to consortium led by Fluor Corp. 5 p.m. on Friday, engineers ers weren’t allowed on the and Westchester counties on of the new bridge said in a state- traffic on Tuesday evening. Terry Towle, president of discovered two damaged joints bridge over the weekend due Interstate 287 remained on ment that although a part of the Friday’s opening ceremony the consortium, confirmed that they feared could cause to fears over its instability. Be- the new bridge’s span in- old bridge is at risk of falling, it was held less than a week be- over the weekend that it chose part of the Tappan Zee Bridge cause of those concerns, the tended for westbound traffic, won’t hit river traffic or the new fore the Sept. 13 Democratic the opening date. Mr. Cuomo to fall into the Hudson River new roadway remained closed which opened last summer. span. The consortium said it has gubernatorial primary election called the timing of the safety or into the new span. Sunday. Traffic crossing both On Sunday evening, the con- recommended to state authori- in which Mr. Cuomo faces issue “a bizarre coincidence.” Catwalk Turns Into a Racetrack at New York Fashion Week Cortlandt Street Station Reopens for Business BY PAUL BERGER ing tunnels and severing subway communications equipment. Commuters on Monday will The MTA got the subway up once again ride the No. 1 train and running through the area to the Cortlandt Street subway the following year. But 1 trains station in lower Manhattan, bypassed the station while the almost 17 years after it was Port Authority of New York and badly damaged in the terrorist New Jersey built the World attacks of Sept. 11, 2001. Trade Center Transportation Metropolitan Transportation Hub, which abuts the station. Authority officials opened the The Port Authority re- renovated station on Saturday, mained in charge of the sub- unveiling a new name, WTC way station renovations until Cortlandt. MTA Chairman Joe 2015, when the MTA took over Lhota said the station opening the construction project. was “symbolic of New Yorkers’ The original station was resolve in restoring and sub- built a century ago. The reno- stantially improving the entire vated station has white marble World Trade Center site.” walls decorated with text from The Cortlandt Street station the Declaration of Indepen-

ANGELA WEISS/AGENCE FRANCE-PRESSE/GETTY IMAGES was damaged when the World dence and the 1948 United Na- AND THEY’RE OFF: Models strutted on a grass runway Sunday as Escada, the fashion house named for a racehorse, showcased its Trade Center towers crashed tions Universal Declaration of spring/summer 2019 collection, featuring bold colors, power suits and jockey motifs. It was Escada’s first show at New York Fashion Week. through the pavement, collaps- Human Rights. A10B | Monday, September 10, 2018 NY ** THE WALL STREET JOURNAL. GREATER NEW YORK

GREATERNEW Appetite Grows for Bulk Deliveries YORKWATCH

BY MENGQI SUN CONNECTICUT

During lunchtime last Fri- Body Found in Car day, a black SUV made its way That Crashed in River through heavy traffic to a block of Madison Avenue in Police say a car crashed into Midtown Manhattan. The the Mill River in New Haven and driver parked, popped open one person is dead. the trunk and started handing The car with a body inside of out takeout bags as customers it was found in the water early shouted number orders at him. Sunday near Grand Avenue Evelyn Shi, 34 years old, Bridge, police say. who works at a nearby non- They say it appears the car profit, picked up an order of went through a fence and into Yunnan Rice Noodle Soup. The the water. Officials say the body food wasn’t from a restaurant will be taken to the medical ex- near her office. It came from aminer’s office for an autopsy to The Rice Noodle, a restaurant determine the cause of death. in Greenwich Village that, be- —Associated Press cause of the distance, doesn’t generally deliver to Midtown. NEW JERSEY Like the other customers picking up food, Ms. Shi had Man Charged in Girl’s grown frustrated with the lack Stabbing Death of food options near her job and discovered a novel way to A man has been charged bring the faraway Chinese res- with murder in the stabbing taurants she craves to her— death of a 16-year-old girl in through bulk-order deliveries. New Jersey. “I’m getting a bit tired of The Monmouth County prose- the few restaurants in Mid- CAITLIN OCHS FOR THE WALL STREET JOURNAL (2) cutor’s office announced Sunday town,” she said. Customers lined up to collect their orders from Yun Ban Bao, known as YBB. Users can get food from restaurants far outside their that 20-year-old Bryan Cordero- She got her meal through neighborhoods delivered to pickup points in New York City and parts of New Jersey. Below, crabmeat pork-soup dumplings packed to go. Castro of Long Branch is Yun Ban Bao, an online bulk- charged with first-degree mur- order delivery business. The which could come from a res- food deserts” in the greater der, weapon possession and at- name means “the bulletin taurant in the West Village or New York area. The startup tempted escape. board in the cloud” in Chinese. as far as Flushing, Queens. has attracted a core following Prosecutors said Long Branch She is one of 50,000 active us- Mr. Lang started his busi- among Chinese working pro- police responded to a report of a ers who access YBB, as it is ness in 2015 after he grew fessionals in New York. stabbing shortly after 10:30 p.m. known, through its website or tired of the only two Chinese Restaurants love the plat- Saturday. They said the victim the social-media and messag- restaurants in his neighbor- form as well. Kung Fun Steamer, and suspect were known to ing app WeChat. hood in central New Jersey. a restaurant with Brooklyn and each other. They use it to organize the After living there for eight New Jersey locations that A listed number for Mr. Cord- delivery of thousands of lunch years, Mr. Lang, who grew up serves a specialty dish of rice ero-Castro couldn’t be found and dinner orders every day to in China, wanted more variety steamed with lotus leaves, said Sunday and it wasn’t known more than 20 locations in New and more-authentic cuisine. it gets 80 to 100 orders from whether he has an attorney. York City and parts of New But restaurants in Manhattan’s YBB every time it offers deliv- —Associated Press Jersey. YBB works with 80 res- Chinatown or Flushing, which ery. That number is comparable taurants and is particularly also has a large Chinese immi- to the lunch crowd Kung Fun popular for lunch orders in grant population, were more Steamer gets at its restaurants, CORRECTIONS Midtown and the Financial Dis- than an hour away. co-owner Taylor Zhang said. trict, according to Paul Lang, He decided to ask other Chi- “We can serve customers AMPLIFICATIONS who co-founded the business. nese friends in his group chats that are beyond our reach,” YBB operates somewhat like on WeChat to order Chinese Mr. Zhang said, noting that other food delivery websites food together from Chinatown the YBB orders let his busi- “Waiting for Godot” runs such as Seamless and Grubhub. or Flushing and get it delivered ness utilize the down time in vestment bank UBS estimates pitality at Boston University. Nov. 3-13 as part of Lincoln Cen- A user chooses from several to New Jersey, thinking that the the kitchen. that online food ordering Mr. Lang said YBB is looking ter’s White Light Festival. An ar- restaurants that are scheduled large amount of orders would YBB stands out in the hy- could grow to $365 billion to expand into the mainstream ticle Friday about this fall’s new to deliver that day and places make it worthwhile for restau- percompetitive but also highly globally by 2030. by building an app that would theater productions incorrectly the order, usually 12 hours in rants to drive the long distance. lucrative market of food deliv- “The idea of using WeChat make it easier for non-Chinese said it would end Nov. 10. advance. Instead of getting the It worked. Mr. Lang, 37, ery: not only in how it is ac- is genius, that is a market that customers to place orders. food delivered to their door, who had a job in finance at cessed, but because of its is not being served by any “People want to have nice Readers can alert The Wall Street customers go to planned other services,” said Christo- Journal to any errors in news articles the time, thought it might also niche customer base and the things that are not there lo- by emailing [email protected] or pickup points to get their food, work for some other “Chinese restaurants it works with. In- pher Muller, a professor of hos- cally,” he said. by calling 888-410-2667.

Jacob Sanchez Diagnosed with autism

Lack of speech is a sign of autism. Learn the others at autismspeaks.org/signs. THE WALL STREET JOURNAL. Monday, September 10, 2018 | A11 LIFE&ARTS

HEALTH

Hospitals Step Up Dr. Louise Dembry, below right, helped conduct a study in the VA Connecticut Healthcare System that showed participants, including the War on Dr. Daniel Federman, below left, the importance of SUPERBUGS cleaning their stethoscopes.

BY LUCETTE LAGNADO

DURING 32 YEARS as a physician, Daniel Federman has used his stethoscope to listen to patients’ hearts and lungs. diseases, sees But a recent study at the West many potential Haven, Conn., veterans’ hospital nooks for germs to where Dr. Federman works left gather: “There are him aghast. After seeing an image telephones, there are of the bacteria accumulated on his call buttons, there are stethoscope, he admits, “I was ap- IV poles, there are palled…The basic fact is that I stethoscopes.” don’t recall cleaning my stetho- One of his big wor- scope”—ever. ries? Computer key- Nor apparently did many of his boards. Now, Stamford colleagues. hospital has a com- Health-care-acquired infec- some believe reduces bacteria. while hand hygiene remains the stethoscope study. puter in every patient tions—maladies associated with Many researchers say there isn’t priority in fighting infection, he Dr. Federman, the room for staff to access antibiotic-resistant bacteria—kill definitive proof that germy stetho- instituted a stethoscope-cleaning system’s associate records. That way, Dr. tens of thousands of patients a scopes can make patients sick. But requirement at his institution, the chief of medicine, was Parrysays,“youaren’ttaking year in American hospitals. On any dirty stethoscopes carry as many University of Geneva Hospitals. among the 50 or so attending the computer from room to room” given day, approximately one in 25 germs as unwashed hands, some in- NYU Langone Hospital—Brooklyn physicians, residents and medical and spreading germs. patients develops at least one infection-control specialists say. recently conducted a clinical trial students who took part, turning Sentara Healthcare in Norfolk, fection contracted during hospital These experts say that just as doc- examining stethoscopes for bacte- over their stethoscopes to be exam- Va., embraced a novel weapon to care, says the Centers for Disease tors have been taught to wash or ria. Marwa Moussa, an attending ined. Dr. Dembry says while “It can fight superbugs—copper. Con- Control and Prevention, “demon- clean their hands between patients, physician, decided that medical res- be very hard to show” that using a vinced that copper has germ-fight- strating the need for improved in- they also must learn to clean their idents should learn early on to germ-ridden stethoscope on a pa- ing qualities, the hospital system fection control in U.S. health-care stethoscopes. One easy method: ap- clean their stethoscopes. tient “directly poses a risk, in medi- invested in copper surfaces for facilities.” plying sanitizing foam to the “You wash your hands but you cine, it isn’t black and white....in in- countertops and bed rails, bed ta- To curb infections, hospitals are stethoscope’s diaphragm—the part never clean your stethoscope,” Dr. fection prevention our role is to bles and other furniture. Sentara setting more rigorous hygiene stan- that touches a patient’s skin—after Moussa says. Her analysis found minimize risk,” so it makes sense to also started using copper-infused dards, focusing on commonplace using it on their own hands. that some of the stethoscopes’ dia- put controls in place. “Education linens, including patient gowns, equipment such as stethoscopes A 2014 study at a Swiss hospital phragms were rife with bacteria, alone does not work,” she said. bed sheets, towels and washcloths. and blood-pressure cuffs, which can published in the Mayo Clinic Pro- including the superbug MRSA, “This is about human behavior and In a study comparing a new hos- collect bacteria and potentially ceedings found that “the contami- Methicillin-resistant Staphylococ- creating a new habit.” pital building outfitted with copper transmit disease. Medical centers nation level of the stethoscope is cus aureus, which can lead to fatal Study participants gathered be- and an unchanged older facility have stepped up efforts to get doc- substantial after a single physical antibiotic-resistant infections. fore a big screen and were shown next door, there were dramatic re- tors to clean their hands thor- examination and comparable to Louise Dembry, a professor of in- pictures of the bacteria on their ductions in superbugs in the new oughly. Some institutions are trying the contamination of parts of the fectious diseases and epidemiology stethoscopes. When the bugs ap- building, said Howard Kern, Sen- ultraviolet cleaning systems while physician’s dominant hand.” Its at Yale, helped conduct the VA Con- peared, “there was an audible re- tara’s president and CEO. He plans others have turned to copper, which lead author, Didier Pittet, says that necticut Healthcare System’s action” including “yucks,” Dr. Fed- to retrofit other Sentara hospitals erman recalls. The images “were with copper. really disgusting. Everyone seemed Dr. Pittet, of the University of Ge- shocked at the results.” Dr. Feder- neva Hospitals, isn’t sold on cop- Where the Bugs Are man, a professor of medicine at per’s germ-fighting properties. “The Hospital ﬁxtures especially vulnerable to contamination: Yale, says seasoned doctors may scientific evidence that [copper re- be more prone to ignore the po- duces] health-care-associated infec- tential for contamination than tions is quite weak,” he says. younger colleagues who trained in At UCLA Health, Mark Sklansky, the era of superbugs. a pediatric cardiologist, was so “We have the knowledge to pre- concerned about germs that could vent infections. What has been be spread by doctors, he tried to lacking is the will,” says Betsy convert two neonatal intensive McCaughey, a patient advocate care units into “handshake-free Stethoscopes Blood pressure cuffs IV poles and pumps Wheelchairs Bed railings and founder of Reduce Infection zones” in 2015. The campaign, A stethoscope can Velcro on the sleeves These essentials of Seats and backs are prone These ‘high touch’ Deaths, a nonprofit that flags dan- which was part of a formal study, collect germs makes them hard to the hospital room are to contamination from ﬁxtures come in contact gers that leave hospitals vulnera- never really caught on, even almost as much as clean and prone to handled by a stream patients in open-backed with patients, doctors, ble to superbugs. though the NICUs still have signs a doctor’s hands, collecting bacteria. of nurses, doctors, gowns that let their skin nurses and visitors. Stamford Health, in Stamford, that depict a crossed-out hand- researchers say. and patients. touch the surface. Conn., says it has made “environ- shake. “Hospitals,” Dr. Sklansky la- mental hygiene” a priority. Mi- ments, “aren’t ready to recom- Mike Sudal/THE WALL STREET JOURNAL. Source: Michael Parry, M.D., Stamford Health; Betsy McCaughey, RID (Reduce Infection Deaths) chael Parry, director of infectious mend handshake-free zones.” CHRISTOPHER BEAUCHAMP FOR THE WALL STREET JOURNAL

INFLUENCERS A FILMMAKER KEEPS FANS GUESSING Paul Feig What He Does: Director, writer, producer How He Got There: Moving to BY CARYN JAMES comes from touches like Stepha- screenplay by Oscar winner Emma Italian and French pop. That is the Los Angeles from the Midwest nie’s chipper video blog that starts, Thompson. most fun song. I remember think- after his first year of college, per- “Hi, Moms!” and Emily’s ennui. Mr. Feig spoke with the Journal ing I’ve got to get that in some- “A SIMPLE FAVOR” forming as a stand-up and get- comes with “You are so nice,” she tells Stepha- about why his movies play with thing, before I even saw the script ting small roles in TV comedies, the tagline “From the Darker Side nie. “I have no idea how you’ve genre and why laughter to him for “A Simple Favor.” When we including a stint on “Sabrina the of Director Paul Feig.” It turns out survived so long.” seems like hard-core realism. Here were putting the movie together, I Teenage Witch.” that even the filmmaker’s dark Mr. Feig’s last four films—in dif- are edited excerpts: wanted to be serious on the side has a comic streak. ferent genres but all starring thriller aspect but also let the au- His Big Break: Creating the 1999 The genre-bending movie open- women—have made more than Why did you decide to mix comedy dience know upfront that it’s OK TV series “Freaks and Geeks,” ing on Friday has all the twists $100 million apiece. The raunchy and suspense in “A Simple Favor”? to laugh. about high-school misfits. The and deceptions of a psychological wedding comedy “Bridesmaids” was I love genres because there are show, which lasted less than a thriller. Anna Kendrick plays followed by “The Heat,” a buddy- all these established tropes you can You’ve done spies, detectives, even season, is now considered among Stephanie, a suburban widow cop movie with Melissa McCarthy subvert and reorder, so you can a comic sci-fi series, “Other Space.” the best comedies of its time. “I whose sophisticated friend Emily and Sandra Bullock, then “Spy” bring the audience something unex- Are you deliberately trying to run wrote ‘Freaks and Geeks’ just as (Blake Lively) suddenly vanishes. with Ms. McCarthy as an un- pected. I’ve been dying to do a through every genre out there? a spec because I’m always writ- But Mr. Feig has infused the likely international espio- thriller because those are my favor- Pretty much. I’m dying to do a ing something. Without it I would suspense with humor that nage agent, and the re- ite movies, but I’m not drawn to do musical. I’m dying to do a big sci- probably be out there trying to booted “Ghostbusters.” a straight thriller because I just fi epic, a western, a gangster get acting jobs or be the sixth As a boy growing up can’t make a movie without putting movie, it goes on and on. I’m a lead on a sitcom.” in Michigan, Mr. Feig’s something funny in it. commercial filmmaker. My movies His Obsession: Travel and food. interest in writing, di- are for studios because I want to His mother’s cooking was bland, ‘I just recting and performing How did you balance the comedy make sure they get distributed, he says. As a boy, “I was walking can’tmakea was sparked when he saw and the darkness? and I want people to see my mov- around going, ‘I don’t like food, movie without Woody Allen’s “Take the It’s a thriller first and foremost, ies and have fun. Genres provide that’s such a weird thing.’” He putting Money and Run.” “I found out and anything comedic has to be in that because they’re inherently en- credits a Mexican restaurant in something that the guy who’s funny in it service of that. You have to treat it tertaining, sort of comfort food. I suburban Michigan for waking up funny in actually wrote it and directed it, dead serious. Occasionally people come to all my genre films basi- his taste buds, and his wife for it,’ Paul too,” Mr. Feig says. “I didn’t know will refer to one of my movies as a cally going, “I love this genre, but leading him out of his safety Feig that was possible.” spoof, and I’m hugely insulted be- what are the things in it I don’t zone to travel. says. He is about to work in yet cause I try to make real movies like?” I love thrillers, but some- another genre. His next film, that happen to be funny. “Spy” is times they’re too mean-spirited for AMANDA FRIEDMAN FOR THE WALL STREET JOURNAL “Last Christmas,” is a not a spoof, it’s a real spy movie my taste. holiday movie he that has funny, quirky characters, performers and behind the cam- calls “a romantic and the same with this. Early in your career you directed “I era, is this desperation to be taken comedy that’s Am David,” about a 12-year-old boy seriously, then they eliminate the also a big love The soundtrack for “A Simple Fa- in Bulgaria who escapes a labor thing that makes audiences love letter to Lon- vor” has a lot of 1960s French pop, camp. Do you ever want to do a them. When comedic actors take don,” with a including a bouncy, obscure song, straightforward drama again? on dramatic roles, I feel them “Ca S’est Arrangé,” under the open- I almost consider my movies to fighting so hard to not be funny, ing credits. be funny dramas. The mistake I but funny people—it’s in their My wife and I are giant fans of see in a lot of comedy people, both DNA, they can’t help it. A12 | Monday, September 10, 2018 THE WALL STREET JOURNAL. LIFE & ARTS

WHAT’S YOUR WORKOUT? | By Jen Murphy How USC’s Blind Player Muscled Up After discovering he could be a long snapper even without sight, Jake Olson added 50 pounds to get into games

JAKE OLSON’S last wish before he lost his vision was to watch his favorite football team, the Univer- sity of Southern California Tro- jans. At age 12, when he attended a USC practice, he thought his wildest football fantasies had come true. Mr. Olson never imagined he’d suit up in cardinal and gold for the Trojans years later. Mr. Olson, 21, was born with a rare form of eye cancer. He lost his left eye as a baby, but that didn’t stop him from embracing sports as a boy. “I absolutely loved sports— soccer, baseball, basketball, football—but I was only good at seeing the bodies,” he says. “I definitely took a few balls off the face.” Doctors removed his right eye, too, after years of treatments. “As a kid, it was pretty devastating,” he says. “I realized I could sit around and sulk about the one thing I lost, or continue to do the things I love and be grateful that I have an athletic body and mind.” The idea of playing football sounded absurd, but he thought he football helmet after graduation might be able to be a long snapper. this spring to pursue another He just had to master the crucial sport: golf. Mr. Olson, who shoots backward toss to the holder during in the 70s and 80s, wants to com- an extra-point or field-goal attempt. pete in blind golf tournaments.

Heading into his junior year at DAVID WALTER BANKS FOR THE WALL STREET JOURNAL Orange Lutheran High School in The Workout California’s Orange County, Mr. Ol- A bodybuilding-based strength and legs,” he says. “I’m pretty with fish and a vegetable. Straw- son spent every day in July master- routine and smarter nutrition much a quarterback, just throwing berry or coconut cream pie are his Blind Athletes Get ing the art of the snap. “I remem- helped Mr. Olson obtain his phy- the ball through my legs. My splurges. Into the Game ber my first snap hit the ground sique. Nick Donnelly, a former shoulder and back muscles pull and bounced off my coach’s foot,” strength and conditioning intern the ball through.” As for accuracy, The Gear lind and visually impaired ath- he recalls. He kept practicing and at USC, took Mr. Olson under his whether it’s a football or a golf Mr. Olson is a fan of Titleist and Bletes can benefit both men- earned a spot on the varsity team. wing freshman year. “I remember ball, Mr. Olson says repetition is TaylorMade golf clubs and FootJoy tally and physically from sports, A teammate would guide Mr. Olson initially guiding Jake around the key to mastering the feel of a per- golf shoes. Pre- or post-workout says Courtney Patterson, a onto the field and square his hips, weight room, watching him hit his fect snap or putt. he uses a foam roller, baseball or spokeswoman for the United and the kicker clapped to let Mr. head or shin and feeling like a ter- softball to release tight muscles. States Association of Blind Ath- Olson know how far back to snap rible coach,” says Mr. Don- The Diet letes in Colorado Springs, Colo. the ball. nelly, who serves as the Mr. Olson starts The Playlist Running is the most popular head strength coach at his day with three He used to listen to rap when sport among the visually impaired, St. Joseph’s Colle- eggs over easy, training with Mr. Donnelly, but he she says. “It’s cost-effective and giate Institute in potatoes or prefers hard rock or metal bands some people have enough vision The long snapper has Buffalo, N.Y. “He had toast, fruit like I Prevail. to run along a line on a track,” she appeared in games in to constantly re- says. When it comes to winding mind me that he roads or trails, she says there are each of the past two wasn’t made of many organizations, like Achilles seasons. glass.” Jake Olson lost both eyes International, that pair visually im- His first two years, to cancer as a boy. paired runners with guides. Mr. Olson followed a He does warm-up There are also adaptive ver- high-volume strength drills alongside sions of popular team sports. In After getting into USC, he program, doing five sets of the Trojans’ beep ball, a variation on baseball, walked on to the football program 12 to 20 reps of heavy special players aim to hit a ball larger in 2015, a scrawny freshman at 6- weights. While Mr. Olson had teams on than a softball that beeps. Bases foot-4, 185 pounds. The coaches ex- lifted in high school, Mr. Don- campus. buzz when the ball is hit so play- pected him to get stronger if he nelly says he had to teach him the ers known which way to run. The wanted to see game time. He dedi- feel of a muscle being activated. “It Paralympic sport of goalball is the cated himself to the gym and put was very hands-on,” Mr. Donnelly most popular team sport for the on 50 pounds by his junior year. says. “I would grab the muscle he blind and visually impaired, Ms. The hard work paid off. Last Sep- was supposed to be working dur- Patterson says. tember, Mr. Olson got his first taste ing an incline bench or lat The sport, a cross between of game action, successfully snap- pulldown and tell him to soccer and dodgeball, was devel- ping an extra point in the Trojans’ isolate it so he could oped in 1946 as a way to keep season opener against Western learn that feeling. blinded World War II veterans Michigan. “It was one of my favor- Now he’s built like a physically active. Two teams ite moments in life,” he says. brick wall, with his of three players each try Mr. Olson isn’t cleared for con- arms popping out of to roll a basketball-size tact during games, but Trojans his jersey.” ball with bells inside head coach Clay Helton has an In the off-season. Mr. over the oppo- agreement with opponents that if Olson called Mr. Donnelly three nent’s goal line. Mr. Olson snaps, the defense won’t times a week to discuss tweaks to The opponents rush the USC line. He has ap- his routine. He was in the weight listen for the peared late in games where USC room for 60 to 90 minutes, five oncoming ball. has a strong lead, including this days a week. He did chest Mondays, month’s season opener, a 43-21 legs Tuesdays, arms Wednesdays, and some type of meat, like win over UNLV. He snapped on the shoulders and back Thursdays and sausage. “I try to stay away Trojans’ final extra-point attempt. “anything I miss” Fridays. Now that from bacon, but it’s a los- This off-season Mr. Olson made he’s put on mass, he’s switched to a ing battle,” he says. He headlines with feats that included program that concentrates on lower prefers a glass of whole driving a car for the first time at a weights and higher repetitions. He or 2% milk to coffee. Nascar track and jumping off a prefers high-intensity training to Lunch might be a high-dive platform. He even posted cardio, but will ride the stationary turkey sandwich. a video on Twitter showing off his bike for a few miles to get his heart Dinner is his fa- quarterback skills. rate up. vorite meal. He A business major, Mr. Olson has Mr. Olson says mobility is key eats pasta two years of eligibility left with to snapping. “I do a ton of nearly every the team but plans to hang up his stretches for my shoulders, hips night, usually

Art Basel Branches Out to Argentina

ART BASEL, whose annual fairs in Switzerland, Mi- ami and Hong Kong are among the biggest in the art world, is expanding to Argentina—without launching a coinciding fair. On Thursday, Art Basel Cities: Buenos Aires opened “Hopscotch (Rayuela),” a new event intended to appeal to art lovers who want to explore the city’s cul- tural novelties without spending hours in a conven- tion center. In Buenos Aires, organizers found a locale prized for its artists but lacking the critical mass of galleries that turned Rio de Janeiro and São Paulo into art hubs. Art Basel’s curator Cecilia Alemani teamed up with artists to develop installations and exhibits around the city. Italian conceptual artist Maurizio Cattelan created a pop-up cemetery, “Eternity,” where visitors can write epitaphs for the living, and U.S. artist Barbara Kruger painted words like “power,” “property” and “women” across a 223-foot-wide set of silos. These are joined by artists from the region, and the goal is to spotlight a nascent art scene that isn’t getting as much commercial support as other big cities, Ms. Alemani said. For globe-trotting art patrons, it is a good time to visit South America. On Friday, the São Paulo Biennial opened in Brazil, and it also handed the reins to artists like Mamma Andersson and Antonio Ballester Moreno,

ART BASEL who have organized their own shows within the bien- Barbara Kruger’s work is among those on display at ‘Hopscotch (Rayuela),’ a weeklong, citywide Art Basel event in Buenos Aires. nial. —Kelly Crow THE WALL STREET JOURNAL. Monday, September 10, 2018 | A13 LIFE & ARTS

highly expressive: The two in the center almost appear to be chatting about their predicament. Behind them, a tranquil landscape radiates indifference. Several works demonstrate Géricault’s facility as a draftsman. His sketches of a severed head are especially fine, and convey a quiet pathos. Along with other studies on view, they figured in the prep- aration for “The Raft of the Me- dusa.” Géricault based his painting on the scandalous case of a French ship that foundered off the coast of Africa in 1816. Only a few of the Medusa’s passengers survived after being cut adrift on a makeshift raft. Depicted on the verge of rescue, Géricault’s heroic survivors were seen as a rebuke to the ship’s captain and the restored government of the Bour- bons. In 1820, Géricault followed the completed painting to England, where it went on display. Struck by the vastness of London’s slums, he documented several scenes with lithographs. In one, a child holds a toy horse under her arm, as if the artist thought to provide his favorite comfort. Not surprisingly, he was also attracted to England’s actual horses, and to the work of English artists, such as George Stubbs, who preceded Géricault in giving horses center stage. While he continued to depict the urban poor, Géricault also produced a series of horse lithographs, presenting the animals (for once) at ease, in a variety of settings. His sympathy for the downtrod- den extended to the emancipation movement. That feeling is represented here by “Man on a Rearing Horse” (c. 1825), a lithograph after a Géricault by Frederick Tay- ler. In it, a dark-skinned rider with ART REVIEW exaggerated features manages to stay aboard as his mount charges into battle. Taken together, Géricault’s cre- ations reveal a man seemingly pos- Gericault’s Equine sessed by injustice. Yet if he was repelled by its cruelty, he was also fascinated. In the dispiriting after- math of the French Revolution, horses, still so necessary to human Passions and Anxieties enterprise, were the long-suffering objects of all that humanity had to dish out. Somehow, they were all the lovelier for it. BY M.J. ANDERSEN draws from the museums’ substan- Russia” (1818), one of the more der Michelangelo’s spell. The mus- tial collection of Géricault’s works, powerful images in the exhibit, cular results turn up in his animals Mutiny: Works by Géricault particularly his lithographs. Géri- captures two officers retreating as well as his people. Géricault Harvard Art Museums, through Jan. Cambridge, Mass. cault was one of the first French through the snow after Napoleon’s moved restlessly between the urge 6, 2019 NO ONE WILL EVER satisfactorily artists to make extensive use of disastrous Russian campaign. One, to imitate his masters’ classical explain the human fascination with the medium, in part because of li- badly injured, rides an exhausted forms and an impulse to document Ms. Andersen is a former member horses. Yet when it takes hold of a thography’s capacity to generate horse that competes for our pity. what he saw. of the Providence Journal’s gifted artist—Théodore Géricault, multiple images. Distributing litho- What lithographs gain in literal In the vividly painted “Cattle editorial board and the author of in this case—it becomes something graphs, he hoped, might encourage detail they sometimes sacrifice in Market” (1818-19), a welter of hoofs, “Portable Prairie: Confessions of more than a simple component of sales of his paintings. Together emotional force. “The Coal Wag- horns and flared nostrils crowd the an Unsettled Midwesterner” human nature. In Gericault’s work, with several drawings and prints, gon” (1821) ably depicts draft foreground. The animals’ faces are (Thomas Dunne/St. Martin’s). horses filter the passions and anxi- the three oil paintings in the ex- horses pulling a loaded etiesofanage. hibit point to Géricault’s more daz- cart. Yet they appear fro- They are shown on the battle- zling achievements, including his zen in the moment, as if field, at the race course, hauling masterpiece “The Raft of the Me- asked to pause for a pho- coal, assisting street sweepers, de- dusa,” which hangs in the Louvre. tograph. A similar image livering mail, attacked by lions— Géricault was born in Rouen in in watercolor is more even dead. Though Géricault had 1791. He came of age during the Na- compelling. In “Coal little more than a decade in which poleonic wars, primed to glorify Wagon Hauled by Seven to work (like a proper Romantic soldiers. “Portrait of Olivier Bro” (c. Horses” (1821-22), a pow- hero, he died in his early 30s), he 1818) captures the young son of a erful team convincingly amassed a record of equine exis- cavalry officer who was knighted by negotiates a corner. tence that serves history and Napoleon. Painted in somber tones, Early in his career, horse lovers equally. the boy sits astride a snarling dog Géricault learned by “Mutiny: Works by Géricault,” and appears ready for action. copying such artists as on display at the Harvard Art Mu- Géricault had the heart of a dra- Titian, Rubens and Cara- seums, offers a chance to redis- matist, and was as schooled in the vaggio, whose works he cover this influential figure of the costs of war as in its splendors. could study in Paris. Romantic period. The exhibit The early lithograph “Return From Later, in Italy, he fell un-

Théodore Géricault’s ‘Family Group From “The Mutiny on the Raft of the Medusa”’ (1818), above; ‘Cattle Market’ (1818-19), below; ‘Return From Russia’ (1818), left; and ‘English Cavalryman (1820-21), top. The works in this exhibition reveal that Géricault used horses to capture his tumultuous world on paper and canvas. PRESIDENT AND FELLOWS OF HARVARD COLLEGE (4) A14 | Monday, September 10, 2018 **** THE WALL STREET JOURNAL. SPORTS

U.S. OPEN | By Jason Gay Naomi Osaka Gets the Last Word

Flushing, N.Y. whole Haitian community celebrat- A word here about ing her success as well. Naomi Osaka, who won Osaka’s triumph here should be a major tennis tourna- a thunderclap for a sport in need ment this weekend in of fresh stars. She didn’t come to New York City. gawk, like young players some- Since Osaka’s victory at the U.S. times do—she came to win. She Open women’s singles final Satur- got Williams on the ropes early, day, almost all of discussion has pushing her around the baseline centered on the player she beat: and rolling to take the first set, Serena Williams, the tennis legend 6-2. Williams recovered to grab a and 23-time major winner who 3-1 lead in the second set, but verbally tangled with a chair um- Osaka held firm, even as Williams pire and wound up getting penal- and Ramos began their back-and- ized in a manner which acceler- forth, and the pro-Serena crowd in ated her defeat. Arthur Ashe Stadium began to boo Second-guessing has been ram- Ramos like a wrestling heel. pant. Did Williams go too far? Or It got loud. A lesser newcomer was it the umpire, Carlos Ramos, might have caved amid all that who crossed a line? Game officials drama—a ticked-off American make good and bad calls—it’s part crowd pulling hard for a ticked-off of any sport. On the other hand, American superstar at America’s should Ramos have taken note of biggest tournament. the stakes and the moment and Osaka, a bystander caught in done more to warn Williams? Wil- the middle, did not cave. “Hon- liams is far from the first tennis estly, there’s a lot I can learn from player to have a confrontation her,” Williams said afterward. with an umpire, and this was the Osaka did unravel a little at the U.S. Open final. end, after she won. As the lights

There have also been a whole AFP7/ZUMA PRESS came up for the trophy presenta- array of adjacent conversations Naomi Osaka’s triumph at the U.S. Open should be a thunderclap for a sport in need of fresh stars. tion, the boos rained down once about sportsmanship, emotion, more, and Osaka began to cry. sexism and double standards. Wil- pulling herself back, only to have It was also a huge deal because roes, none greater than Williams, Here Williams interceded, urging liams believes she was penalized it crumble apart. Serena Williams is Serena Wil- who, like Osaka, had been coached the crowd to stop the booing and in a manner that a similarly-acting First, Williams picked up a liams. A groundbreaking cham- by a father daring enough to be- give Osaka her due. When Osaka male player would not have. warning for receiving mid-match pion, Williams entered this final lieve that this was possible. got her chance to speak, she apol- There’s also Williams’s fraught his- coaching (a no-no in tournaments on the verge of a historic, record- Osaka would model her game ogized to the crowd for winning. tory with the Open itself which in- like the Open, but an infraction tying 24th major tournament sin- after Williams’s. Today, it is easy It was more than a little heart- cludes run-ins with officials at that’s very loosely patrolled). In- gles title. She was doing so barely to see—Osaka possesses a serve breaking. Osaka had zero to apolo- matches in 2004, 2009 and 2011. credulous at the suggestion she a year after the birth of her first that tops 110 mph, as well as a gize for. Still, she explained her Meanwhile, I just want to point was “cheating,” she resumed play- child, and a series of surgeries af- range of suffocating strokes. She’s feeling later: “When I step on the out that Naomi Osaka is your 2018 ing, only to later get a code viola- ter life-threatening complications. taken on Williams’s former hitting court, I feel like a different person. U.S. Open women’s singles cham- tion and a point deduction for At 36, Williams means a great partner, Sascha Bajin, as a coach, I’m not a Serena fan. I’m just a pion. smashing a racket. Frustrated, Wil- deal to a great number of people. with the undisguised intent of bor- tennis player playing another ten- I’m not trying to downplay what liams kept at Ramos—calling him a One of them is Naomi Osaka. rowing from her Obi-Wan. When nis player.” was a surreal, consequential “thief” for the point deduction, ad- This match had been the 20- Osaka wins an important point, “But when I hugged her at the scene—one that tennis fans may monishing him to apologize—until year-old Osaka’s fantasy: a show- she even mimics Serena’s famous net…” Osaka welled up. “I felt like debate for years. Ramos decided he’d had enough, down versus her idol on the big- self-encouraging “Come on!” a little kid again.” I just want Naomi Osaka, who and docked Williams a game. (Wil- gest American stage in tennis. though it comes out softly, like a On a tough night for tennis, she won her first major tournament, to liams was fined $17,000 for the Years before, Osaka—born in “Come on Jr.” won her idol’s respect. She got the get her due. three code violations.) Japan to a Japanese mother and a Like Williams, Osaka also stands trophy. She got the check for $3.8 But let’s talk about how this It was a huge deal, because it Haitian father, but raised most of for more than tennis—she’s now million. Naomi Osaka is the winner match went sideways. After losing pushed Osaka’s second-set advan- her life in the United States—sat the first Japanese player to win a of the 2018 U.S. Open. the first set, Williams looked to be tage from 4-3 to 5-3. in this stadium watching her he- major tournament, and there’s a That’s a good last word.

TENNIS DJOKOVIC WINS 14TH SLAM

BY TOM PERROTTA The match looked even early, lead in the third set, but del Potro, until Djokovic broke del Potro’s seemingly spent, broke back. It serve after being down 40-love. didn’t last long. Djokovic broke After months of struggle and For a while after that, Djokovic serve for a 5-3 lead and then doubt, Novak Djokovic’s comeback was unstoppable. He controlled closed out the match, which lasted has reached its peak. rallies. He attacked del Potro’s 3 hours and 16 minutes. Djokovic, 31 years old, over- serve. He passed del Potro when No one would have predicted whelmed Juan Martín del Potro, he charged the net. At one point, this for Djokovic early in the year. 29, in an entertaining—and some- del Potro chased the ball and hit a He lost in the fourth round at the

times intense—U.S. Open final, 6-3, lob between his legs, only to have Australian Open—his first tourna- JASON DECROW/ASSOCIATED PRESS 7-6(4), 6-3. Djokovic, who won Djokovic hit an overhead winner. ment in six months—then had mi- Novak Djokovic claimed his third career U.S. Open title on Sunday. Wimbledon in July, now has three In the end, there was nothing nor surgery on his right elbow, U.S. Open titles and 14 Grand Slam del Potro could do to break down which had been hurting him for ovicisnow34-4. confident as ever. “I really trusted titles in his career, tying him with Djokovic, the most impenetrable years. He had six wins and six Before the U.S. Open began, life, I trusted that it was going to American Pete Sampras for third man in tennis. The second set took losses to start the season, but in Djokovic told the Journal that he get me to where I am at the mo- place all time. 95 minutes. Djokovic took an early his last seven tournaments, Djok- had many doubts, but now felt as ment,” Djokovic said.

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Worth DallasDll JacksonJ k Birminghamh Raiders 44 Wicked Cold T-storms Mobileb 80s JJacksonvillekill 56 57 11 Christmas, in 45 “Peter Pan” dog 40s 80s AustinAti 90s Houston Stationary Snow carols 48 Pronto, in 50s Neweww Orleans Orlandoldd 58 59 60 Tampap memos 90s Sanan AntonioAtA i 12 Memo heading 60s 90s Showers Flurries 61 62 63 AnchorageA h g Honolulull 80s Miami 13 Something to 49 “How sweet ___!” 70s pass 50 Some wines Ice TEAMS’ SCHEMES | By Gabriel Stone 18 Divisible by two 51 Humorist U.S. Forecasts Today Tomorrow Today Tomorrow Across 31 College football’s 19 Refer to Bombeck City Hi Lo W Hi Lo W City Hi Lo W Hi Lo W 48 Scuba s...sunny; pc... partly cloudy; c...cloudy; sh...showers; Black Knights mouthpiece 24 Gang ___ 52 “Cimarron” Omaha 79 62 s 83 63 s Frankfurt 82 53 pc 81 56 pc 1 Accepted t...t’storms; r...rain; sf...snow flurries; sn...snow; i...ice attachment writer Ferber Orlando 89 75 t 89 74 t Geneva 82 56 s 83 57 s standard 32 Bellow (New York Jets Today Tomorrow Philadelphia 80 71 t 82 70 c Havana 85 75 t 86 73 t nickname) 53 Clarinet part City Hi Lo W Hi Lo W 5 Basis for fantasy 33 In need of 52 1983 film Phoenix 106 83 s 107 81 s Hong Kong 87 79 pc 90 79 pc football points sharpening about two 25 Chinese-born 54 Cardinal’s perch Anchorage 63 48 s 64 49 s Pittsburgh 71 58 t 73 60 pc Istanbul 80 66 t 77 67 t Guatemalans’ architect Atlanta 87 71 t 88 72 t Portland, Maine 66 62 r 76 62 r Jakarta 94 76 pc 94 75 pc 10 “Put a lid ___!” 35 Focus of some 55 “NFL Insiders” trek to the U.S. Austin 82 69 t 84 69 t Portland, Ore. 73 55 c 67 54 sh Jerusalem 80 63 s 83 66 s 14 Operatic song rallies 26 Pretenses network Baltimore 83 67 c 79 66 c Sacramento 90 56 s 86 54 s Johannesburg 66 41 s 71 45 s 15 Synagogue 36 French friend 56 Participants in 27 Unconscious 57 Ready to Boise 85 51 s 77 49 pc St. Louis 76 59 pc 80 59 s London 70 59 pc 75 59 pc card games with Boston 68 65 r 84 69 c Salt Lake City 91 63 s 89 65 s Madrid 82 62 pc 80 64 s scroll 37 Reason for states proceed Pennsylvania Burlington 63 59 r 77 61 r San Francisco 70 54 pc 68 54 pc Manila 89 79 t 88 79 t 16 Top-notch overtime Charlotte 89 71 c 89 71 t SantaFe 8554pc8655s Melbourne 68 52 pc 74 45 pc players? Previous Puzzle’s Solution 17 Detectives 38 Football kickers’ HOBO ACT TA I L Chicago 73 56 pc 78 60 s Seattle 67 56 c 65 54 sh Mexico City 74 57 t 74 58 t 58 Egyptian-themed Cleveland 70 59 sh 72 59 pc Sioux Falls 78 62 s 82 65 pc Milan 86 63 pc 87 65 s tasked with aids I NANE UR I BURRO Dallas 82 68 pc 82 68 pc Wash., D.C. 84 70 c 80 70 c Moscow 69 51 pc 73 56 c Verdi opera CODEX NOM UNCAP tailing Wisconsin 40 Public perception WE S TWOR L D Denver 8959pc9260s Mumbai 87 78 pc 87 78 r players? 59 Replies from the RUPAULSDRAGRACE Detroit 67 56 r 75 57 pc International Paris 78 53 s 84 57 s 42 Block and tackle congregation ELAYNE WEAPON Honolulu 90 73 pc 89 78 pc Rio de Janeiro 76 67 c 76 67 pc 20 Parka parts HTS TWOFOLD ROD Today Tomorrow part Houston 82 70 t 83 72 t Riyadh 109 76 pc 107 75 s 60 Julia ARTS SK I PS D I KE City Hi Lo W Hi Lo W 21 Cook’s pan 43 People who get BAYOU AXE A I LED Indianapolis 72 55 c 76 58 pc Rome 82 64 pc 84 65 s Louis-Dreyfus FREY CABS 22 Little contracts with Kansas City 77 59 s 80 61 s Amsterdam 67 58 pc 71 60 pc San Juan 87 76 s 89 76 s HBO series LOTSA LEEKS Las Vegas 103 75 s 102 75 s Athens 89 70 s 87 70 s Seoul 83 61 pc 81 63 c 23 Pilot’s guess, California NEWHART ATLANTA Little Rock 77 63 pc 77 64 pc Baghdad 107 77 s 108 79 s Shanghai 81 74 pc 81 76 pc players? 61 Subtle ANNE LONGO SAR I Singapore 84 77 t 83 77 c for short IDEA SUITS EVEN Los Angeles 84 65 pc 81 64 pc Bangkok 91 78 t 94 78 pc attention-getter LARD RMS SEPT Miami 89 75 pc 88 74 sh Beijing 86 64 s 84 64 c Sydney 68 51 s 74 58 s 24 People using 46 “___ Got the Milwaukee 70 56 s 75 60 s Berlin 77 58 pc 75 60 pc Taipei City 82 75 r 91 76 r World on a 62 Brits’ The contest answer is ON AIR. Five answers in the the services of grid match the networks that air each of the five Minneapolis 75 63 s 80 67 pc Brussels 70 56 pc 75 58 pc Tokyo 88 70 r 78 69 r New York String” “goodbyes” Nashville 77 62 c 80 67 pc Buenos Aires 64 53 pc 67 54 s Toronto 64 57 r 72 56 pc theme entry TV series with an extra letter added: New Orleans 87 75 t 85 75 t Dubai 107 85 s 102 88 s Vancouver 64 54 sh 64 51 sh players? 47 Car pedal 63 Genesis garden in order of the shows, HBO/HOBO, LOGO/LONG O,

s CBS/CABS, FX/FIX and USA/URSA. The added New York City 72 70 r 81 72 c Dublin 61 51 c 59 46 r Warsaw 74 52 s 74 58 pc WSJ.com/Puzzles. Oklahoma City 78 60 s 81 61 s Edinburgh 59 50 c 60 47 sh Zurich 79 52 s 80 53 s Solve this puzzle online and discuss it at letters, in order, spell the contest answer. THE WALL STREET JOURNAL. Monday, September 10, 2018 | A15 OPINION

Lehman: Political and Personal BOOKSHELF | By Laura Vanderkam Lehman perceived Wall Street fat cats power to stem a liquidity cri- tors.” Ten years later in Eu- Fragile, Fearful, Brothers filed had become very unpopular. sis before the Lehman fall, by rope, PwC is “still rolling for bankruptcy Why was Mr. Paulson chan- virtue of the post-Lehman ac- along,” presumably still col- on Sept. 15, neling Ralph Kramden? The tions.” But it was implicit, un- lecting fees. This lesson of li- 2008—left to Treasury secretary, Mr. Marsal stated. Now, it’s explicit. Read quidity is rarely discussed, Feeling Aggrieved twist in the thought, “should have taken a Section 214 of Dodd-Frank: but it may have been the most INSIDE wind by Trea- back seat and let the pros Prohibition on Taxpayer Fund- important postbankruptcy VIEW sury Secretary from the Federal Reserve drive ing. In a crisis, the Fed and menace. The Coddling of the American Mind By Andy Hank Paulson. the bus.” Plus, as a former Treasury could ask Congress Has anything changed? Af- By Greg Lukianoff and Jonathan Haidt Kessler Tenyearsaf- Goldman Sachs CEO, “Paulson for powers and probably get ter dealing with Lehman’s un- ter, is Wall simply didn’t like Dick Fuld, them, but that brings them winding, Mr. Marsal had hoped (Penguin Press, 338 pages, $28) Street safe and he had run out of pa- back to the political and perfor a cohesive regulatory from another financial melt- tience.” It didn’t help that in sonal again. framework from Washington. or most of the past few decades, college students down? Banks, pulling in record 1998, when Long-Term Capital Instead the bureaucracy won. F have been proponents of free speech, despite profits, appear to be in pretty Management needed bailing Still active and influential are occasional bouts of protest and indignation. But good shape. But something out, Wall Street got together The man who led the the Federal Reserve, the Fed- something changed about five years ago. Students began seems wrong, as if the lessons and everyone kicked in, except eral Deposit Insurance Corp., demanding “trigger warnings” for certain material in their of the financial crisis already Mr. Fuld’s Lehman. firm after it collapsed the Office of the Comptroller classes. Some demanded that anything “triggering” be have faded. On Sept. 9, Mr. Paulson told says politics still of the Currency, the Commod- removed entirely from the curriculum so that no one might That’s only an intuition, so a group of CEOs about Leh- ity Futures Trading Commis- feel traumatized. They lobbied for “safe spaces” where I called someone who would man, “There’s no government reigns over policy. sion—plus the Treasury, which they could avoid being exposed to uncomfortable ideas. know—the former CEO of money here.” Shortly thereaf- should stay out of bailouts, and Members of what psychologist Jean Twenge calls “iGen” Lehman Brothers. No, not ter, taxpayer money went into a growing bureaucracy created (born after 1995) moved from challenging controversial Dick Fuld, one of the public Goldman Sachs, Morgan Stan- Many of Lehman’s creditors by the Dodd-Frank Act. No en- speakers to hounding even very liberal members of their faces of Wall Street’s col- ley, Citigroup and others. It couldn’t get paid back for tity is in charge, so everyone is own communities who wrote or said something that was lapse. Instead, I talked last seems Fed Chairman Ben Ber- years because much of the in charge. Politics still reigns deemed offensive. month with Bryan Marsal, of nanke grabbed control of the company’s capital was domi- over sound policy. “What is new today is the Alvarez & Marsal, who led bus from Mr. Paulson after the ciled in Europe. Unable to get There is more concentra- premise that students are Lehman for the three years almost instant contagion and their Lehman money, funds tion in banks today than pre- fragile,” write Greg Lukianoff after its bankruptcy. carnage from the Lehman and individual investors sold Lehman. They’re better capi- and Jonathan Haidt in “The I asked Mr. Marsal why bankruptcy. Withholding a anything liquid to have work- talized with better reserves, Coddling of the American Lehman was allowed to fail bailout was a mistake. A subsi- ing capital and pay off debt. but it’s still fractional reserve Mind.” “Even those who are and what lessons were dized merger or an orderly That’s why the stock market banking. And the shadow not fragile themselves often learned. He responded with bankruptcy would have made sold off so hard in early 2009. banking business that got believe that others are in two words: political and per- more sense. Mr. Marsal explained, “In the drenched in derivatives may danger and therefore need sonal. What made business or Why is this so important? U.S., a liquidation has its pri- be larger today than it was be- protection.” The debate economic sense wasn’t consid- Today there is nothing stop- mary objective of recovery fore the crisis. Leveraged loans narrows as everyone censors ered. Mr. Marsal explained ping the political and the per- maximization to the credi- are rampant. That doesn’t others as well as themselves. that Mr. Paulson “had no sonal from trumping rational tors.” Lehman would prepay as point to stability. Mr. Lukianoff (president of standing in the Lehman bail- economic decision-making in much as 90% of claims and In downturns, equity hurts the Foundation for Individual out decision but seemed to the next crisis. Sure, there’s finish returning all assets in but debt kills. Like an elec- Rights in Education) and Mr. dominate the entire process.” Dodd-Frank, which passed in 3½ years. trode-implanted rat that can’t Haidt (a professor at NYU’s Stern The Bush administration al- 2010 after congressional blath- In the U.K., on the other stop pushing a pleasure lever, School of Business) argue that this new ready had bailed out Bear ering about arresting bankers. hand, the “primary objective banks will lend until they im- vulnerability is a result of the ways in which the first Stearns five months earlier, But Mr. Marsal suggested the is the minimization of liability plode. A decade ago, the Fed social-media generation has been raised. Well-meaning and Fannie Mae and Freddie law makes Wall Street less to its receiver, encouraging failed as the lender of last re- parents and educators have inculcated in young people Mac the week before. Using safe: “The Federal Reserve decisions at glacier speed in- sort. It’s still failing at pre- three bad ideas, what the authors call “the Great taxpayer money to bail out demonstrated that it had the creasing the cost to the credi- venting the next crisis. Untruths”: that what doesn’t kill you makes you weaker; that you should always trust your feelings; and that life is a battle between good and evil people. Students can’t see nuance, and they don’t feel tough enough to handle debate. Argentina Needs to Dollarize Tales of political correctness run amok—indeed, many of the incidents recounted in “The Coddling of the American Another cur- tional capital markets to fi- The Argentine treasury was beyond its means while taxes Mind”—are nothing new to anyone who has been paying rency crisis is nance the shortfall. That put instead supposed to issue new and regulations, particularly even fitful attention to college trends. Messrs. Lukianoff roiling Argen- pressure on the central bank debt. It did so, but not to the on labor, make many busi- and Haidt differ from many other critics of campus excess tina, and a to print money so as not to extent necessary in the midst nesses uncompetitive. The net in that they do not think of themselves as conservative or year ahead of starve the economy of low- of a crisis. Plus, markets un- effect is always the same: bal- even right of center. “Neither of us has ever voted for a an election priced credit ahead of mid- derstand that putting more looning debt and a lethargic Republican for Congress or the presidency,” they write. AMERICAS President term elections in 2017. It was pesos into government coffers economy followed by devalua- Despite the “coddling” angle of the title, Messrs. By Mary Mauricio a risky strategy since it was is not the same as extinguish- tion or default or both. Lukianoff and Haidt try not to fall into the trap of Anastasia Macri is strug- obvious that the sun would ining them. Mr. Macri has sought to claiming that modern young people are uniquely lazy or O’Grady gling to right evitably set on the U.S. Fed- The bank raised reserve re- heal the country from the po- whiny. In any case, they write, “by the standards of our the ship. The eral Reserve’s easy money quirements and interest rates, larization that flourished dur- great-grandparents, nearly all of us are coddled.” What is peso has lost policy. but the panic was on. The de- ing the left-wing populism of more, members of iGen have been better at avoiding half its value against the U.S. A sharp selloff of the peso mand to hold pesos has col- his predecessor, Cristina arrest or pregnancy during their teenage years, and better dollar since January. Inflation in May was followed by a new lapsed. Kirchner. In the early years of at graduating from high school, than recent generations expectations are soaring. $50 billion standby loan from Mr. Macri’s presidency, he em- born before 1995. They are, in short, not without inner The central bank has the International Monetary phasized reconciliation and resources. boosted its overnight lending Fund in June. With a mone- Another crisis for the shied away from telling the rate to an annual 60% to try tary base that is up over 30% nation how big a mess he’d in- to stop capital flight. But Ar- since last year, in a nation peso, as the central herited. He also wanted to Thanks to well-meaning, if misguided, parents gentines are bracing for spi- that knows something about bank proves it is avoid a clash with the orga- and educators, students can’t see nuance, and raling prices and recession. IMF intervention, that was nized special interests that According to Alberto Ramos, like waving a red cape in front not to be trusted. have a history of going to the they don’t feel tough enough to handle debate. head of Latin American eco- of a bull. streets and using violence to nomics at Goldman Sachs, The peso was thus vulnera- protect their privileges. markets now expect the econ- ble when currency speculators Mr. Macri rattled markets Mr. Macri has managed to Still, there is a problem. The authors write with concern omy to contract more than launched an attack on the in late August when he said cut back on electricity, water, about the rise of anxiety and depression among young 2% this year and inflation to Turkish lira last month and he would ask the IMF for the gas and transportation subsi- people, whose teenage foibles can be broadcast widely in top 40%. the flight to the dollar spilled next disbursement of the dies, but the fiscal deficit—in- the era of social media and who have not—at least among The question that seems to over into other emerging mar- standby loan early. The peso cluding provinces and munici- the privileged sorts who show up at elite colleges— be on everyone’s lips: Why is kets, including Argentina. Af- swooned again. palities—will still be around experienced the unsupervised, risk-taking play that teaches this happening again, under a ter decades of repeated cur- Argentine Finance Minister 5.5% this year and 3.5% in emotional regulation and social problem solving. Messrs. president who is supposed to rency crises, Argentines can Nicolás Dujovne spent two 2019, according to Aldo Lukianoff and Haidt understand why young people want to embody change? The answer: smell monetary mischief. A days at the fund in Washing- Abram, a director at the Bue- feel mentally safe on college campuses. “If members of Because Argentina still has a peso rout ensued. ton last week, and on Wednes- nos Aires think tank Libertad iGen have been risk-deprived and are therefore more risk central bank. To fix the prob- There were strings at- day he expressed optimism y Progreso. More reforms are averse,” they write, “then it is likely that they have a lower lem once and for all, it should tached to the standby loan. about his boss’s request. The needed, and the risk of a po- bar for what they see as daunting or threatening.” dollarize. The fund told the central deal to release the funds litical and social upheaval is That said, the authors also think it’s a terrible idea for It is worth pointing out bank to reduce the stock of early, Mr. Dujovne said, could real. the adults who run colleges to cater to this need. They that the troubles have been its short-term, high-yield do- be voted on this month. The fastest way to restore believe that such coddling especially hurts young people brewing for some time. On a mestic debt—known as Leb- The peso rallied a bit on confidence would be to put an already prone to anxiety. They note that one of the most trip to Buenos Aires in Febru- acs—because it is expensive thenews.YetasanyArgen- end to the misery caused by effective treatments for anxiety is cognitive behavioral ary, I got an earful from wor- to service. Not rolling over tine understands, an IMF the peso and to adopt the dol- therapy, which teaches people to overrule their immediate ried economists who said Mr. that debt meant unleashing package can’t cure what ails lar. Argentines could then get emotions and see themselves as tough enough to survive Macri was moving too slowly more pesos into circulation, the peso. on with the business of saving life’s slings and arrows. They also believe that coddling to reconcile fiscal accounts. which would be inflationary. This is a long-term political and investing in their beauti- hurts the cause of social justice that is so dear to students In 2016 and 2017 the gov- But the IMF limited Argen- problem that has manifested ful country. Mr. Macri has themselves. Few arguments are sharpened through ernment continued spending tina’s capacity to use the itself in repeated economic tried gradualism. Now is the groupthink; most are improved by facing skepticism or beyond its means and borrow- dollars from the loan to sop crises since the mid-20th cen- time to be bold. different points of view. “A community in which members ing dollars in the interna- up those reserves. tury. The government lives Write to O’[email protected]. hold one another accountable for using evidence to substantiate their assertions is a community that can, collectively, pursue truth in the age of outrage.” Given such a clear diagnosis, it is unfortunate that Kids Don’t Learn the Ropes These Days many of the proposed solutions in “The Coddling of the American Mind” are less than satisfying. The authors By Mike Kerrigan mentary-school nightmares. than elementary school. Joy whips—for what? The right pinpoint, as one cause of hollow debate, the changing If you’re over 40, you likely hardly abounded. to reach the rafters, look ratio of conservative to liberal faculty over the decades attended a recent back- remember the scene. In a cor- My gym teachers—there down and think: I’m too (from 1-in-3 or so in the mid-20th century to much lower I to-school event in the ner of the gym, three menac- were always two—quickly con- young to die. in some fields now). But colleges are unlikely to start a gymnasium of my son’s ing ropes dangled from the firmed rope-climbing was a Sure, there was a mat laid conservative-hiring program, even if they add “viewpoint elementary school. Other par- rafters, descending 25 feet or sanctioned activity. They rel- out below, one blue rectangle diversity” to the normal diversity statements, as the ents I know and like were so to the unforgiving floor. ished telling me, knowing I tucked tidily under each rope. authors suggest. Nor will anyone champion a campaign to there. Conspicuously absent When I first laid eyes on was more inclined to derring- But it looked thick enough to “discourage the creep of the word ‘unsafe’ to encompass was something I once knew them in the fourth grade, I don’t than -do. While shinny- extend life for a day or two in ‘uncomfortable.’ ” Students paying upwards of $50,000 per but never liked. I speak of the couldn’t say whether these ing up to the rafters surely de- the event of a free fall. I can year for college probably feel entitled to seek comfort dreaded climbing rope. ceiling serpents were activity lighted future Navy SEALs in see clearly now: The mats even if it isn’t especially good for them. The admonition to How this activity, a cruel or punishment. my midst, it terrified me. were there mostly to quicken parents of future college students to “encourage your mainstay of physical-educa- In theory, a spotter at the the proverbial cleanup in children to walk or ride bicycles to and from school” (to tion curricula throughout my rope’s base helped ease the aisle two. gain a sense of independence) is nice but probably grade-school years, got past My son won’t have to climber’s ascent. In practice, This is why I was so re- insufficient on its own. No doubt there are walkers and the school board is beyond endure my gym-class however, the spotter swung lieved at back-to-school night. bike riders among irate students demanding trigger me. Maybe it was hidden the rope wildly, like a CrossFit- The teachers could have said warnings. from the lawyers. Perhaps a climbing terror. ter jacked on Mountain Dew. anything in that gym about The authors’ most compelling idea is that elite colleges well-meaning educational the- The rule seemed to be the bet- the year ahead and it show a preference for students who are mature enough to orist actually believed swash- ter the friend doing the spot- wouldn’t have mattered. I saw engage with the world as it is rather than demanding a buckling was an important My fear was entirely rea- ting, the worse the gyrations, what I came to see: No climb- world of safe spaces. Nothing would encourage teens to life skill. sonable in the grim context of making an already dangerous ing ropes, or anyone resem- work or do full-time community service for a few years—or I don’t know. All I know is gyms those days. Along the clamber more so. bling Lars. serve in the military—like Harvard declaring a desire to fill when my dreams carry me wall girls were made to per- Even in ideal conditions, It was a safe space—if not its freshman classes with people who have done such back to my coming-of-age form something called a you still had to wrangle with in modern parlance, at least things. years, I’m oversleeping the flexed-arm hang, at the end of someone like Lars. This was in the way that mattered to Until then, unfortunately, the emphasis on safety will SAT, leaving the locker room which they rattled like Apollo the mean kid one rope over me. My son should have a continue, and people on all sides will be poorer for missing in a shirt but no shorts and 13 on re-entry. Saturnine boys who, 15 feet above the banner year. the great debates that make higher education worthwhile. contending with the climbing meanwhile hoisted themselves ground, leg-wrestled anyone rope: respectively my recur- up a wall-mounted pegboard he could engage. All this—the Mr. Kerrigan is an attorney Ms. Vanderkam is the author, most recently, of “Off the ring high-, middle- and ele- better suited for Parris Island pirouetting rope, Lars’s leg- in Charlotte, N.C. Clock: Feel Less Busy While Getting More Done.” A16 | Monday, September 10, 2018 THE WALL STREET JOURNAL. OPINION

REVIEW & OUTLOOK LETTERS TO THE EDITOR 100% Certifiable California Noyce and the Integrated Circuit’s Invention alifornia Democrats pose as green low sun-worshipper Australia provides a cau- When Andy Kessler named Jack Noyce’s monolithic integrated cir- saints, though their climate and social- tionary example. Kilby of Texas Instruments the inven- cuit process used precision photoli- C tor of the integrated circuit, a collec- thography to simultaneously create justice values often conflict. The latest In South Australia, wind and solar account for tive groan boomed out of Intel head- transistors, capacitors and resistors example is the legislature’s nearly 40% of power, which has quarters in Santa Clara, rolled across side by side in a single silicon wafer. plan to banish fossil fuels Democrats now want to caused rates to soar. South Aus- the Stanford campus and echoed off They were also connected with wires, from the state electrical grid, ban all fossil fuels from tralians pay more than three the glass walls of the low-rise ven- but with tiny on-chip integrated which progressives aim to ex- timesasmuchforpowerthan ture-capital headquarters on Sand wires made on the same wafer that port nationwide. the electrical grid. the average American. After Hill Road (“The Chip That Changed were 20 times smaller than Kilby’s Most states are enjoying flat storms felled transmission the World,” Inside bonding wires. or declining electricity rates lines and caused power out- View, Aug. 27). Shortly after thanks to shale fracking, which has sent natural ages, the South Australian government tapped Kilby’s integrated Noyce and Gordon gas prices plummeting. But not California, where Tesla to build a battery the size of a football field circuits were made Moore co-founded rates have jumped 25% since 2013. Electricity capable of powering 30,000 homes for an hour to using crude human- Intel in 1968, Mr. prices in the Golden State are by far the highest provide backup power in emergencies. hair-size “bonding Moore projected wires” to wire to- that transistors and in the continental western U.S. and twice as high Tesla and the South Australian government gether separate their integrated as in Washington state. have declined to disclose the battery cost. But transistors, capaci- wires could be The reason: California requires that 50% of the Electrek news site reported in January that tors and resistors shrunk photographi-

power be generated from renewables such as Australia’s battery owners were paid 79 cents into a circuit. These CATALIN LUNGU/EYEEM cally by a factor of solar and wind by 2030. Democrats recently per kilowatt-hour—about 10 times the wholesale contraptions are two in area every passed legislation establishing a 100% require- cost of power in the U.S.—to absorb surplus en- still made. Called “hybrid” integrated two years, doubling the number of ment for 2045. Even Governor Jerry Brown ergy from the grid. That power can later be sold circuits, they have never taken any bits of memory on a chip, with the ought to realize this energy experiment will at a premium during shortages. Customers get significant share of the market, with shrunken bits running faster and on punish Californians who can’t afford to live in charged twice—once for storing the excess the exception of the 1970s Cray-1 su- less power than the old ones. The in- Marin or Malibu. power and then for discharging it. percomputer, a behemoth that cost tegrated circuit that launched the Renewable prices have dropped thanks to California’s low-income residents will suffer $9 million, burned kilowatts of power electronics revolution and “Moore’s and was less powerful than today’s Law” was invented by Robert Noyce technological improvements and cheap Chinese the most since they spend more of their income personal computers and smartphones in Silicon Valley. solar panel imports. The wholesale price of solar on energy and live in hotter inland areas where which are products made from the T.J. RODGERS energy with the 30% federal tax credit is now more electricity is required for cooling. Workers very different “monolithic” integrated Founding CEO nearly comparable to fossil fuels. But renewables in energy-intensive industries like manufactur- circuits, Robert Noyce’s invention at Cypress Semiconductor Corporation impose other costs. ing would be especially hard hit. Manufacturing Fairchild Semiconductor. Woodside, Calif. Start with backup power, which is needed employment has grown half as fast in California when the sun isn’t shining. A 100% mandate as nationwide since 2010. would require natural gas plants that currently iii provide backup power—many recently con- All of this explains why a dozen Democrats in Kentucky Strikes a Blow for Organized Labor structed—to be retired and replaced with enor- the state Assembly, most from low-income and In your Aug. 9 editorial “The must guard against being fooled by mous batteries. Customers will pay for the minority areas, rebelled against the 100% renew- Right-to-Work Rout” you claim that: false slogans, such as ‘right-to-work.’ stranded plants and the batteries, which will able bill. “This is yet another in a laundry list of “Given the choice, after right-to- It provides no ‘rights’ and no ‘work.’ have to be replaced periodically. bills that are discriminatory to the people I rep- work passed, some 16,000 Kentucky Its purpose is to destroy labor Even batteries probably won’t capture all of resent,” said Adam Gray of Merced. workers decided union representa- unions and the freedom of collective the surplus solar energy pouring onto the grid California’s power generation accounts for tion wasn’t worth the cost, opting bargaining....Wedemand this on sunny days. So the state will have to find an- less than 0.2% of global CO2 emissions, so the out of membership.” fraud be stopped.” other outlet to avoid overloading the grid. In re- mandate won’t matter to the climate. But green This claim is simply is misleading. Instead of attacking and curtailing cent years California has paid Arizona to absorb groups are hoping California’s fossil-fuel purge Historically, decreases in union workers’ rights, Americans must its excess energy. will coax politicians elsewhere to follow. Demo- membership have been attributed to come together to rebuild the founda- Then there are the state subsidies for renew- crats running for Governor in Colorado, Florida, a variety of factors, including plant tion of American prosperity, a strong able energy. Home and business owners that in- Illinois and Maryland have endorsed a 100% re- closures and layoffs at private-sector middle class. Workers collectively or- unionized employers, decreases in ganizing through unions has been stall solar panels can receive rebates and are newable mandate. Presidential aspirants Cory public-sector unionized employment and will continue to be an essential paid the retail power rate for the excess energy Booker and Bernie Sanders have introduced leg- and spending in the construction element for growing the American they transmit to the grid, which increases the islation in the Senate setting a nationwide 100% sector. middle class. costs for everybody else. Most large-scale solar renewable target. Unions and management partner Despite these attacks on the and wind farms are located in rural regions Governor Brown would be wise to veto the across many industries to produce rights of workers, the future is while natural gas plants are close to population bill. As an alternative, he’s promoting a plan to some of the most successful prod- ours. Kentucky’s union members re- centers along the coast. The cost to build and integrate California’s grid with other western ucts for the global marketplace and flect the timeless wisdom of our run power transmission lines from renewable states to minimize the costs of its renewable valued services for our citizens. state motto: “United we stand, di- plants is higher. binge. But the liberals who dominate state poli- Martin Luther King Jr. referred to vided we fall.” BILL LONDRIGAN Managing the grid and balancing power tics would apparently rather make poor people so-called right-to-work laws as an ef- President, Kentucky State AFL-CIO sources will also become far more complicated pay more for energy so they can pretend they’re fort to destroy workers’ rights: “In our glorious fight for civil rights, we Frankfort, Ky. and costly as renewable generation grows. Fel- saving the planet. Nailed by Steel Tariffs By Definition, Freshmen Have a Lot to Learn I read David Gelernter’s “Ten line of work” aren’t those who are hen President Trump promised to employees to 370,” he wrote. Things They Didn’t Tell You at Fresh- open and honest about their personal make America great again, the em- Mid Continent is seeking a tariff exemption man Orientation” (op-ed, Sept. 4) with views when it is appropriate, but W delight. I disagree, however, with his rather those who—whether naively or ployees at Mid Continent Nail in from the Commerce Department on grounds that Missouri probably didn’t exit can’t find enough of the steel fifth point: “Remember that a profes- deceitfully—present their personal pect he would put them out of Trump protectionism is wire it needs in the U.S. Nucor sor has no business mentioning his views as if they were indisputable fact. personal politics in class, ever.” Al- JONATHAN BUTTACI work. But the steel tariffs im- Corporation, a U.S. steelmaker driving a Missouri though he recognizes that professors The Catholic University of America posed in June have the com- that is reaping profits from the are human and sometimes “our biases Washington pany hanging by a thread. company to the brink. tariffs, objected to Mid Conti- slip out,” he seems to believe that pro- Mid Continent is the largest nent’s request and said it could fessors, at their best, teach without Mr. Gelernter’s counsel for incom- nail manufacturer in the U.S. supply the steel wire. Mid- bias. This is simply not possible; our ing Yalies of 2018 would have been and has been in Missouri for more than 25 years. South Wire Company said the same. But last biases form and structure our courses equally applicable my freshman year It had 500 employees at its Popular Bluff plant week CNN Money reported that Mr. “Pratt said in ways that we ourselves may not at Yale (1986). During my first semes- and was the second largest employer in the small that neither company on its own could supply fully appreciate. ter I was a member of the only all-fe- town before the Trump tariffs hit. enough raw material.” I tell my students that professors male student group to ever be refused The trouble for Mid Continent is that for- Time is running out. “I can tell you that if we who promise to keep their personal meeting space at the Yale Women’s eign producers making nails abroad use low- don’t get immediate relief, we could be shut views entirely out of class are at worst Center. The rationale? Our being dangerously manipulative, and at best women didn’t mitigate the inherent price steel and export their production to the down in the next 20 to 30 days,” Mr. Pratt told dangerously naive. I submit to Mr. “antiwoman” bias of our Christian, U.S. They can offer better prices than their U.S. CNN. While a recent meeting with a “very sym- Gelernter that the professors who pro-life stance. Plus ça change. rival because, as Chris Pratt, operations gen- pathetic” Commerce Secretary Wilbur Ross of- “abuse their positions of authority” SHANNON VOWELL eral manager for the plant, explained in a fers hope, some 20,000 companies have filed and therefore “should be in a different Frisco, Texas Journal op-ed last month, the tariffs pushed exemption requests. Which is another way of costs up “overnight” and made the company saying that for every steel job that Mr. Trump uncompetitive. “Orders dropped 70% in two claims he has “saved” with his tariffs, many California Gender Mandate Will Hurt Boards weeks, and our workforce shrank from 500 more are being eliminated. As a veteran member of more than neon lights, is that even California- 20 corporate boards, including Volvo headquartered companies incorpo- Car AB and Wynn Resorts Ltd., I hope rated in Delaware would be subject to Sweden’s Political Warning that the bill that requires major com- the new gender-diversity regulation. panies based in California to put fe- Corporations carefully review and se- wedes went to the polls on Sunday and Many commentators—and more than a few male directors on their boards lect where they will incorporate S although it will take some time for a Swedish and European Union politicians—will (“State Pushes for Women on based on the protections and regula- ruling coalition to emerge, the biggest mourn growing support for the “far right” by Boards,” U.S. News, Aug. 30) isn’t tory framework a particular state of- immediate winner appears to Sweden’s historically tolerant signed into law. fers. Delaware has long been the be the party that won’t form The Sweden Democrats voters. That misses much of The marketplace is already work- most business-friendly corporate a government. The Sweden finish third on an anti- the story. ing and we are seeing significant framework and is widely embraced. Democrats, born as a far- The Sweden Democrats shifts in the addition of women join- Diversity also needs to reflect eth- right political movement and immigration platform. have gained support in par- ing public boards. For example, major nic, global, digital and technology di- now an anti-immigration ticular since Sweden’s deci- index funds are now mandating that versity, not just gender. Corporate companies must have a minimum of boards are strongest when there is a party, garnered a little under sion to accept the highest two women directors or else they will range of perspectives, experiences 18% of the vote. That third-place finish is their number of Middle Eastern migrants relative withhold their votes. and viewpoints. best electoral result. to population of any European country in the We have experienced the pain of BETSY ATKINS The governing party is still likely to be ei- 2015 crisis. And in this campaign the main- unintended consequences with the Chief Executive, Baja Corp. ther the first-place center-left Social Demo- stream parties matched the Sweden Demo- Sarbanes-Oxley Act of 2002, which Coral Gables, Fla. crats or the second-place center-right Moder- crats with get-tough immigration pledges of resulted in a precipitous decline in ate Party, the anchors of Swedish politics for their own. The Sweden Democrats, meanwhile, initial public offerings because of the decades. But they will govern with reduced hew to conventional views on the need to expense and burden the law puts on Pepper ... vote tallies, and no coalition is likely to enjoy spend more on Sweden’s welfare state. companies. The biggest risk in the And Salt a majority in parliament. What’s really on display is weakening public California bill, which I see in blinking As in so many recent European elections, trust in mainstream politicians and parties. Vot- THE WALL STREET JOURNAL the authority of mainstream parties is erod- ers increasingly doubt that the Social Demo- CORRECTION ing. The Moderates were the biggest losers crats or Moderates will deliver on promises to Sunday compared to 2014, down 3.5 points to stem immigration or reduce waiting times for Sen. Marco Rubio’s family-leave 20%. The ruling Social Democrats have been doctors. Maybe the Sweden Democrats would legislation does not provide for an in- hemorrhaging voters for years. Their better- fail if they take power, but they haven’t been come limit on eligibility. This was than-expected result Sunday is that they fin- promising and failing for years. misstated in the Sept. 5 op-ed “Ru- ished at 28%, three percentage points down The Sweden Democrats trace their origins bio’s Family-Leave Benefit Will Go the from the last election but well shy of the 40% to a neo-Nazi group, and while the party’s cur- Way of All Entitlements.” tally they used to achieve. rent leaders claim to have purged those ele- The Sweden Democrats have won over ments, they bear watching for the uglier forms Letters intended for publication should many disaffected working-class voters, as of nationalist sentiment. The other parties be addressed to: The Editor, 1211 Avenue of the Americas, New York, NY 10036, the party’s share of the vote has risen from have pledged to lock the Sweden Democrats or emailed to [email protected]. Please under 6% in 2010. Others have shifted to the out of any governing coalition. But if those include your city and state. All letters Left coalition, a far-left faction whose vote parties don’t start delivering on campaign are subject to editing, and unpublished total also rose more than two percentage promises, more and bigger electoral upsets are letters can be neither acknowledged nor “Wow! Changing them must returned. points Sunday. inevitable. have cost a fortune.” THE WALL STREET JOURNAL. Monday, September 10, 2018 | A17 OPINION Peer Pressure and ‘Transgender’ Teens

By Jillian Kay Melchior 256 parents, whom she found on- and invalidate the perspectives of line, collecting information about members of the transgender commu- f your teenage daughter sud- the teens’ mental health, friend- nity.” The university updated its denly declares herself trans- group dynamics and social-media statement Thursday, emphasizing gender, should you assume use. Dr. Littman’s findings suggested that "this is not about academic I she’s mature enough to make these young people may have been freedom as some news outlets have decisions that will perma- driven in part by “social and peer made it out to be” and “this is about nently affect her health, fertility contagion.” academic standards.” and future? Or could she be influ- Nearly 70% of the teenagers be- Cass Cliatt, Brown’s vice president enced by societal and peer pres- longed to a peer group in which at for communications, tells me Brown sure? Physician and researcher Lisa least one friend had also come out as was merely “reacting to PLOS ONE.” Littman doesn’t have the answer, transgender. In some groups, the ma- It doesn’t censor controversial re- but transgender ideologues are try- jority had done so. Nearly 65% of search, Ms. Cliatt says, but in this ing to silence her for even asking teens had spent an increased amount case, “it’s a question about the sci- the question. of time online and on social media, ence. We believe strongly in academic Dr. Littman’s study about trans- and parents reported that pro-trans- freedom, but we have to be a respon- gender-identifying teens was pub- gender YouTube videos and blogs sible academic institution.” lished in the open-source, multidis- might have been influential. The reaction to Dr. Littman’s ciplinary scientific journal PLOS Declaring oneself transgender study is especially overwrought

ONE last month. Her interest had carried social benefits, the parents TAMI CHAPPELL/REUTERS given the modesty of her conclu- been piqued in 2016, when she no- reported. Among parents who knew sions. She argues for more research ticed an uptick in parental reports their children’s social status, nearly conclusive but notes that for little- tance and affirmation.” The motto of and counsels caution in the mean- 60% said the announcement brought researched topics like rapid-onset Ms. Jones’s website: “The personal time. Parents and physicians aren’t a popularity boost. “Being trans is a gender dysphoria, “it’s not uncom- is empirical.” infallible, she writes, but neither are Ideologues try to suppress gold star in the eyes of other teens,” mon” to begin with targeted recruit- The effort at suppression had an teens, “particularly in the almost uni- one parent wrote. ing of study participants. The par- effect. PLOS ONE’s editor-in-chief, versally tumultuous period of adoles- a study on the increasing Not all social pressure was posi- ent she surveyed are generally Joerg Heber, announced the journal cence.” Consequently, “it is incum- prevalence of ‘rapid onset tive. Many respondents said their liberal in attitude. More than 85% would subject the study to “further bent upon all professionals to fully children’s friends frequently mocked said they support gay marriage, and expert assessment on the study’s respect the young person’s insider gender dysphoria.’ or derided people who were not gay only 3% disagreed with the proposi- methodology and analyses.” Spokes- perspective but also, in the interests or transgender. “To be heterosexual, tion that transgender people de- man David Knutson told me: “Any of safe diagnosis and avoidance of comfortable with the gender you serve the same rights and protec- time there’s a lot of reader concern clinical harm, to have the awareness that teens had suddenly insisted were assigned at birth, and non-mi- tions as others. or a lot of people talking about it, it and humility themselves to engage their gender identity didn’t match nority places you in the ‘most evil’ Dr. Littman’s detractors also ac- warrants a second look, and that’s with parental perspectives and trian- their sex, although they’d shown of categories within this group of cuse her of bigotry. Her work “ne- what we’re doing right now,” adding gulate evidence in the interest of va- none of the common prepubescent friends,” one parent observed. Par- gates the experience of many trans- that this is “basically how science lidity and reliability.” signs of the condition, known as ents often said that children who gender youth,” according to Diane works.” Mr. Knutson would not elab- When teens sought treatment for gender dysphoria. She spoke to a cli- had second thoughts about being Ehrensaft, of the Child and Adoles- orate about what specific concerns gender dysphoria, the parents re- nician who’d observed the same transgender feared social repercus- cent Gender Center Clinic at the Uni- prompted the review or what it ported, clinicians often took the trend. “When the characteristics of sions. “[My child] couldn’t face the versity of California San Francisco’s would entail. complaint at face value and failed to a population seeking care for a con- stigma of going back to school and Benioff Children’s Hospital. Brown University, where Dr. Litt- consider whether anything else dition substantially changes, the re- being branded as fake or phony... Transgender activist Brynn Tan- man is an untenured professor, has might be going on. As for Dr. sponsible thing to do is to start ask- or worse, a traitor or some kind of nehill calls Dr. Littman’s research “a also backed away from her paper. It Littman’s critics, they equate cau- ing questions about what might be betrayer,” one reported. naked attempt to legitimize anti- took down a news release and attention with bias, even hatred, and en- contributing to these changes,” Dr. Dr. Littman’s critics claim that transgender animus with a veneer of dant social-media posts about the courage teens to go through hor- Littman says. because she found survey partici- academic responsibility.” And Zinnia study and posted a statement from mone therapy or surgery—drastic Since little is known about such pants primarily from three websites Jones, founder of the website Gen- Bess Marcus, dean of the School of interventions whose effects are “rapid-onset gender dysphoria,” the where parents discussed their con- der Analysis, called rapid-onset gen- Public Health, acknowledging “con- irreversible. first step for researchers is to de- cerns, the study is biased and scien- der dysphoria a “hoax diagnosis” cerns that the conclusions of the scribe it and introduce topics for fu- tifically unsound. Dr. Littman ac- perpetuated by those who would study could be used to discredit ef- Ms. Melchior is an editorial page ture inquiry. Dr. Littman surveyed knowledges the study is far from deny transgender children “accep- forts to support transgender youth writer at the Journal. On Syria, the U.S. Can Drive a Hard Bargain With Russia

By Dennis Ross tarian mistake to take part in this po- question is whether the Trump ad- brokering limited agreements, and coordinated posture toward the Rus- tential human tragedy.” The Russians ministration is willing to apply the only for a price. sians. Mr. Trump recently appointed yrian President Bashar Assad answered by striking Idlib. requisite leverage. In theory, the U.S. should be able James Jeffrey as the U.S. special rep- S has launched his opening salvo Meanwhile, the Iranians continue The Russians seem to alternate be- to cut a favorable deal. With Turkey resentative for Syria engagement. Mr. to take back Idlib, the last ma- to embed their own Qods Forces and tween saying it is unrealistic to ex- and Israel as partners, the U.S. posi- Jeffrey is a former ambassador to Tur- jor stronghold of organized rebel Shiite militias in areas the regime re- pect the Iranians and their allied mili- tion is more powerful than Russia’s. key whom Mr. Erdogan respects. forces. The northwestern province is takes, changing the sectarian balance tias to leave, and probing to see what Israeli officials recently acknowl- The U.S., Turkey and Israel share teeming with internally displaced on the ground. If left unchecked, the they can get for brokering such an edged hitting 200 Iranian targets in an interest in containing Iran and its Syrian civilians who have fled other Iran-Russia-Syria axis will continue Syria. Turkey has a military presence Shiite militias in Syria. Russia has the parts of the country—Aleppo in De- to consolidate power across the rein and around Idlib, and the U.S. has capacity to deliver that, but it would cember, Eastern Ghouta in April, and gion. Claims of friction among the Putin gives nothing away forces in northeast Syria. Together, want the U.S. out of Syria in return. Daraa in June—under the weight of three powers should be viewed with the U.S. and its partners control The Trump administration could con- indiscriminate bombing by Russia skepticism. While their interests may without a price. To protect about 40% of Syrian territory. dition an American withdrawal on and the Syrian regimes. U.N. officials diverge, the Russians show little sign America’s interests, Unfortunately, U.S. relations with the following limits for Iranian and say 800,000 people may be forced of walking away from either the Ira- Turkey are in crisis. President Recep allied militia activity: No military out of the city and the province in the nians or Mr. Assad, who they con- neither should Trump. Tayyip Erdogan has ratcheted up his bases in Syria; no more surface-to- assault. Refugees are running out of tinue to deny has ever used chemical rhetoric in response to Mr. Trump’s surface missiles; no fabrication of places to go. weapons. sanctions over Turkey’s detention of missiles or advanced guidance sys- In the face of this impending hu- The unmistakable reality is that agreement. Last month Nikolai Patru- Pastor Andrew Brunson. Mr. Erdogan tems in Syria or Lebanon; no qualita- manitarian disaster, the international the Russians, because of U.S. inac- shev, secretary of Russia’s Security is in talks with the Russians to see if tively new air defense radars or mis- community will do very little. The tion, have become the key arbiter in Council, proposed a trade-off to Mr. a cease-fire can be restored in Idlib. siles; and buffer zones with no Trump administration warns it “will Syria. If the U.S. wants to prevent Trump’s national security adviser, But Russian airstrikes the day after Iranian or proxy presence near Tur- respond to any chemical weapons at- Iran from consolidating a land corri- John Bolton: In return for Russia’s es- Mr. Erdogan’s Tehran summit with key, Israel or Jordan. tack perpetrated by the Syrian re- dor through Syria to Lebanon and the tablishing a buffer zone in Syria free Mr. Putin and Iranian President Has- Mr. Putin gives nothing away with- gime.” But with the Russians position- Mediterranean, it has to work of Iranian and Shiite militias opposite san Rouhani may create an opening out a price. Neither should the Trump ing forces to carry out naval and air through the Russians. If the U.S. Israel, the U.S. would drop sanctions for the U.S. to bring the Turkish pres- administration if it wants to protect bombardments, Mr. Assad is unlikely wants to blunt the Israel-Iran colli- against Iran. Mr. Bolton rejected the ident back into the fold. American interests in the Middle East. to resort to gas. President Trump sion course—with Iran hoping to idea. He nonetheless announced after The two countries share a strategic tweeted that Mr. Assad should not menace Israel from Syria as it does his meeting with Mr. Patrushev that interest in preventing Iran and Russia Mr. Ross has held senior national “recklessly attack Idlib Province” and through Hezbollah in Lebanon—it he believed the Russians would like from expanding their presence in security positions in several presiden- warned that the “Russians and Irani- needs Russian cooperation. But Iran to leave Syria. But it looks like Syria. Washington should probe tial administrations and is counselor ans would be making a grave humani- Vladimir Putin does nothing free. The the Russians are more interested in whether Ankara is willing to forge a at the Washington Institute. The Volcker Rule Needs Transparency More Than ‘Simplification’

By Sheila C. Bair Tampering with the Volcker rule is activity to report certain metrics to trove of information. Instead, they are ciding whether certain trades fall And Gaurav Vasisht a dangerous business that should only five regulatory authorities—the Fed- proceeding based on the banking in- within exemptions for hedging and be done with transparency and care. eral Reserve, the Office of the Comp- dustry’s assertions about the impact market-making. For instance, man- group of federal regulatory So it’s alarming that regulators are troller of the Currency, the Federal of the Volcker rule. Their proposal, agement wouldn’t even have to dem- A agencies have proposed a aiming to change the rule without Deposit Insurance Corporation, the presented in May, would change the onstrate that a “hedge” correlates nearly 400-page “simplifica- making public an analysis of the Securities and Exchange Commission, with the risk it’s meant to reduce. In tion” to the Volcker rule, the reform reams of data they have collected and the Commodity Futures Trading the precrisis days, excessive defer- passed after the 2008 crash to curb from banks since the implementation Commission. The metrics include in- Five different agencies ence to bank managers had disas- risky financial activities. Part of the of the rule, nor releasing the data formation on each trading desk’s risk trous consequences. Dodd-Frank Act, the Volcker rule pro- publicly. This lack of transparency exposures, sensitivities to different collect data in various At the very least, these policies hibits commercial banks, which are makes meaningful public input in the market conditions, profits and losses, forms. Regulators should shouldn’t be implemented before the ultimately backed by taxpayers, from rule-making process more difficult. and various inventory and trade ra- data are carefully assessed. Withhold- engaging in certain speculative trad- Self-interested industry advocates tios. Although primarily intended to standardize them. ing the data deprives the public of the ing activity. It also restricts their who do have access to the data have a ensure bank compliance, these met- most basic information on the rule’s ability to invest in hedge funds or steep informational advantage. The rics are also useful for policy makers impact. The banking industry is al- private-equity funds. The rule helps opaque process bolsters the view that to gauge the rule’s effectiveness and scope of the proprietary trading pro- ready the dominant voice in the equa- reduce moral hazard, decrease con- the simplification effort may be a ruse monitor potential risks in the trading hibition, relieve certain trading desks tion; the government’s obfuscation flicts of interest between banks and to weaken the regulation. operations of the largest banks. of the obligation to demonstrate gives the banks even more power. their customers, and foster stability Since 2014 the Volcker rule has re- But the regulators haven’t pre- compliance, and essentially defer to Regulators have been considering the in the financial system. quired banks with significant trading sented an analysis of this treasure bank management’s discretion in de- release of these data, including ways to anonymize and aggregate them appropriately, for well over a year. It’s time they finally did so. PUBLISHED SINCE 1889 BY DOW JONES & COMPANY Notable & Quotable: Witnesses In the interests of true simplifica- Rupert Murdoch Robert Thomson tion, regulators should also seize the Executive Chairman, News Corp Chief Executive Officer, News Corp Paula Bolyard writing for PJ Me- “Second Amendment extremist opportunity to standardize the data Matt Murray William Lewis Editor in Chief Chief Executive Officer and Publisher dia, Sept. 7: groups” and “other domestic ter- currently being collected in various rorists.”... formats by five different agencies. Karen Miller Pensiero, Managing Editor DOW JONES MANAGEMENT: Ramin Beheshti, Chief Technology Officer; If you want proof that our system Eastmond was followed by two Volcker rule metrics remain an un- Jason Anders, Chief News Editor; Mark Musgrave, Chief People Officer; Thorold Barker, Europe; Elena Cherney, Coverage is broken, you need only look at to- children with chronic health prob- derused tool for monitoring systemic Edward Roussel, Chief Innovation Officer; Planning; Andrew Dowell, Asia; Neal Lipschutz, day’s hearing on the nomination of lems, both of whom have apparently risk. By coordinating efforts to ana- Anna Sedgley, Chief Operating Officer; Standards; Alex Martin, Writing; Christina Van Tassell, Chief Financial Officer Brett Kavanaugh to the Supreme been led to believe that if Kavanaugh lyze them, regulatory authorities Michael W. Miller, Features & Weekend; Shazna Nessa, Visuals; Rajiv Pant, Product & OPERATING EXECUTIVES: Court, where children who aren’t old is confirmed, they will be banned could better spot problematic trends Technology; Ann Podd, News Production; Kenneth Breen, Commercial; enough to vote testified against the from seeking treatment for their in a timely fashion. This would go a Matthew Rose, Enterprise; Michael Siconolfi, Jason P. Conti, General Counsel; nominee. The great sages of the conditions and forced to breathe long way toward assuring the public Investigations; Louise Story, Strategy; Tracy Corrigan, Chief Strategy Officer; Nikki Waller, Live Journalism; Frank Filippo, Print Products & Services; Democratic Party are kids who know dirty air.... that this important reform is being Stephen Wisnefski, Professional News; Steve Grycuk, Customer Service; little-to-nothing about the role of Sen. Cory Booker (D-N.J.) fol- used faithfully and rigorously to pre- Carla Zanoni, Audience & Analytics Kristin Heitmann, Chief Commercial Officer; the Supreme Court, as their testimo- lowed up by asking Eastmond what vent the kind of reckless behavior Nancy McNeill, Corporate Sales; Gerard Baker, Editor at Large Josh Stinchcomb, Advertising Sales; nies demonstrated today. policies she would like to see en- that brought the economy to the Paul A. Gigot, Editor of the Editorial Page; Suzi Watford, Chief Marketing Officer; First up was Parkland shooting acted—again, highlighting how far brink a decade ago. Daniel Henninger, Deputy Editor, Editorial Page Jonathan Wright, International survivor Aalayah Eastmond. “I am off-track these hearings have gone. WALL STREET JOURNAL MANAGEMENT: DJ Media Group: Almar Latour, Publisher Joseph B. Vincent, Operations; Professional Information Business: Christopher very concerned since learning Brett Rather than focusing on Kavanaugh’s Ms. Bair was chairman of the Fed- Larry L. Hoffman, Production Lloyd, Head; Ingrid Verschuren, Deputy Head Kavanaugh’s views on guns, and how judicial philosophy and his legal eral Deposit Insurance Corporation

EDITORIAL AND CORPORATE HEADQUARTERS: he would strike down any assault opinions, Democrats on the Senate from 2006-11. Mr. Vasisht is the Senior 1211 Avenue of the Americas, New York, N.Y., 10036 weapons ban,” she explained.... Judiciary Committee have chosen to Vice President and Director of Finan- Telephone 1-800-DOWJONES She also took the time to call out focus on legislative issues. cial Regulation at the Volcker Alliance.

wsj_20180910_a017_p2jw253000_0_a01700_1______xa2018.crop.pdf 1 10-Sep-18 06:06:41 TECHNOLOGY: APPLE SUPERSIZES IPHONE SCREENS B4 BUSINESS&FINANCE

Last Week: S&P 2871.68 g 1.03% S&P FIN g 0.15% S&P IT g 2.93% DJ TRANS À 0.39% WSJ $ IDX À 0.39% LIBOR 3M 2.331 NIKKEI 22307.06 g 2.44% See more at WSJMarkets.com Google, EU in Online Border War D.E. Shaw Faces a Google on Tuesday will ap- tors in Europe, the U.S. and is appealing a 2015 order from sorship laws of dictators and proliferate, tech firms risk peal an order to extend the Eu- Canada have started asserting France’s privacy regulator, tyrants to dictate what people ending up in a legal bind no ropean Union’s “right to be legal authority over the inter- CNIL, to extend the EU’s “right around the world can see on- matter which course of action Fight Over forgotten” to its search en- net across country lines. to be forgotten” to all of its line. they take, lawyers say. gines across the globe, arguing That is thrusting global websites, no matter where “It will set governments’ ex- Over Google’s objections, technology companies such as they are accessed. CNIL fined pectations about how they can Canada’s highest court last Google, Facebook Inc. and Mi- Google €100,000 ($115,527) use their leverage over inter- year ordered the internet giant Statement By Sam Schechner crosoft Corp. into a potentially when it didn’t comply. net platforms to effectively en- to globally block search results in Paris and Jacob Gershman costly legal morass, and set- France argues that the force their own laws globally,” linking to commercial websites ting the stage for conflict over right—which allows individu- said Daphne Keller, who stud- associated with a company ac- On Firing in New York who will—or should—regulate als to request removal of re- ies platforms’ legal responsi- cused in Canada of stealing everything from free speech sults that include personal in- bilities at the Stanford Center trade secrets. A U.S. federal before the EU’s top court that and privacy to cybercrime and formation from searches for for Internet and Society and judge later declared that the BY RACHAEL LEVY the order encourages countries taxes. their own names—is empty if previously was Google’s asso- Canadian world-wide injunc- to assert sovereignty beyond The Google dispute before users can still access those re- ciate general counsel. tion wasn’t enforceable in the A former partner at D.E. their borders. the EU’s Court of Justice in sults by spoofing their loca- At issue in these disputes, U.S. Google ultimately agreed Shaw Group, one of the world’s National laws used to stop Luxembourg is the highest- tion, for instance by connect- experts say, is a fundamental to comply with the injunction, largest hedge funds, filed a at the border. In cyberspace, profile case yet to test where ing to a VPN. Google, a unit of mismatch between how both which remains in place. complaint against the firm, ac- they increasingly stretch jurisdiction begins and ends Alphabet Inc., says France’s laws and the borderless inter- Conflict also can arise when cusing it of defaming him in around the world, as regula- when it comes to data. Google demand risks allowing the cen- net operate. As regulations PleaseturntopageB4 communicating his firing. The complaint highlights a new challenge for employers, who in the age of #MeToo Profits Soar in Japan, but Shares Don’t must decide what to say, if anything, upon terminating an employee alleged to have en- BY MIKE BIRD Japanese companies have become much more profitable in recent years... gaged in misconduct. Last week, Daniel Michalow Something strange is going Corporate profits as a share of sales filed the complaint with the on with corporate Japan: Profits 6% Financial Industry Regulatory have soared at Sony Corp., Su- Authority, said his lawyer, zuki Motor Corp. and many John Singer. Mr. Michalow is others. Yet foreign investors, by seeking hundreds of millions and large, aren’t that interested. of dollars in restitution and a Overall, Japanese compa- 4 “corrective statement” from nies have rarely been better at the firm, Mr. Singer said. The making money. After decades filing isn’t public. of stagnation, profitability has In March, the company gave soared under Prime Minister Mr. Michalow the option to re- Shinzo Abe’s economic revival 2 tire, which he chose to do, peo- program, dubbed Abenomics. ple close to Mr. Michalow and a Profit margins at nonfinancial person close to D.E. Shaw said. firms hit a record 7.7% in the D.E. Shaw later said Mr. Micha- second quarter. This ratio, low was fired after an internal which compares earnings be- 0 investigation. Finra arbitrates fore interest payments and 1954 ’60 ’70 ’80 ’90 2000 ’10 complaints about the business taxes with sales, rarely topped activities of brokerage firms. 4% until a few years ago. ...and the gap is narrowing between listed ...but the Japanese stock market “To the extent you’re going The trend has been sparked Japanese companies and their global peers... still trails behind U.S. stocks. to say something that is dispar- by both strengthening eco- aging, there’s not much you can nomic growth and changes to Net margins of FactSet indexes Total returns, weekly say that will protect you from the way publicly traded busi- 12% 60% being sued,” said Michael Wil- nesses are run in Japan. As lemin, an attorney at Wigdor part of Mr. Abe’s changes, 9 40 LLP, which has represented em- companies have been encour- Japan S&P 500 ployees filing discrimination aged to focus more on mea- Europe cases but isn’t a party to the 6 20 sures of efficiency, such as re- U.S. Nikkei 225 D.E. Shaw dispute. “To the ex- turn on equity, and on being Stoxx tent that you are going to say more responsive to sharehold- 3 0 Europe 600 anything, the less explicit it is, ers, with better qualified and the less disparaging it is, the more independent boards. 0 –20 less it is an accusation of mis- Complex corporate structures conduct or wrongdoing, the less Jan. 1, 2013 Sept. 7, 2018 2015 ’16 ’17 ’18 are being unwound. A steward- likely it is to give rise to any le- PleaseturntopageB2 Sources: Japan Ministry of Finance (profits); FactSet (returns, margins) THE WALL STREET JOURNAL. PleaseturntopageB9 INSIDE Conflicting Signals Stir Up Oil Market

BY DAN MOLINSKI last week 1% lower at $76.83, Emerging markets are the summer driving season ends after nearing an almost four- main source of growth in oil and refineries shut for mainte- The oil market is at a cross- year high. demand, said Ole Hansen, head nance. roads after its worst week in The rapid rise and fall in oil of commodity strategy at Saxo U.S. oil prices have drifted almost two months prompted prices is a sign investors are Bank. He expects crude prices between $64 and $74 since many investors to reassess weighing conflicting signals in to be rangebound but also that April, while $71 and $79 have whether global growth will the market. On one hand, ro- spikes may push U.S. gasoline been the bookends for Brent. continue stoking demand for bust developed-market econo- prices higher, which could lead Data show demand for oil fuel. mies have sustained demand to lower oil consumption. De- and fuel staying strong domes- West Texas Intermediate for crude, while U.S. sanctions mand growth for crude would tically. U.S. gasoline prices, slid 2.9%, the biggest weekly against Iran have led to shrink- then be hit by a “perfect storm which average $2.86 a gallon, FROZEN MEALS CHEAP CUSTOM decline since July, to $67.75 a ing oil exports from the coun- of rising oil prices and weaker are about 20 cents higher than barrel. That is after the U.S. try, draining global supplies. currencies,” he said. they were last year at this ARE SELLING DRUGS SPUR crude benchmark had capped At the same time, emerging Adding to pressures, the oil time. LIKE HOT CAKES A REACTION August with one of its sharp- markets recently tipped into a market is entering a season But U.S. motor gasoline sup- est rallies of the year, jumping bear market, spurring inves- when demand typically weak- plied to the market—a figure more than 7% from the middle tors to monitor whether ens. Autumn is considered a used by economists as a proxy MARKETING, B2 PHARMACEUTICALS, B3 of the month. Brent, the global deeper declines will spill over “quiet period” for oil, with for demand—has averaged 9.4 barometer for crude, ended into other assets. prices often declining as the PleaseturntopageB2

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Source: Morningstar as of 6/30/18. Based on funds in the Morningstar Mid-Cap Blend Category (oldest share class). Rankings are based on returns after taxes that are net of all fees, maximum federal tax rate (39.6%) and applicable sales loads. Rankings reflecting lower tax rates may have resulted in less favorable results for exchange traded funds due to their tax efficiency. Universe: 114 funds for 10 years, 136 funds for 5 years, and 152 funds for 3 years. MDY’s 1 year peer group percentile is 25% (44 of 182 funds). Past performance is no guarantee of future results. ETFs trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETF’s net asset value. ETF shares may not readily trade in all market conditions. Brokerage commissions and ETF expenses will reduce returns. Investments in mid-sized companies may involve greater risks than those in larger, better known companies, but may be less volatile than investments in smaller companies. ©2018 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. SPDR® S&P MidCap 400® ETF Trust, a unit investment trust, is listed on NYSE Arca, Inc. SPDR®,S&P and S&P MidCap 400 are registered trademarks of Standard & Poor’s Financial Services LLC, a division of S&P Global (“S&P”) and have been licensed for use by State Street Corporation. No financial product offered by State Street or its affiliates is sponsored, endorsed, sold or promoted by S&P. ALPS Distributors, Inc. (fund distributor); State Street Global Advisors Funds Distributors, LLC (marketing agent). State Street Global Advisors and its affiliates have not taken into consideration the circumstances of any particular investor in producing this material and are not making an investment recommendation or acting in fiduciary capacity in connection with the provision of the information contained herein. Before investing, consider the funds’ investment objectives, risks, charges and expenses. To obtain a prospectus or summary prospectus, which contains this and other information, call 1.866.787.2257 or visit www.spdrs.com. Read it carefully.

2170636.1.1.NA.RTL Not FDIC Insured • No Bank Guarantee • May Lose Value B2 | Monday, September 10, 2018 ***** THE WALL STREET JOURNAL. INDEX TO BUSINESSES BUSINESS & FINANCE

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

A-B Famous Footwear.....B10 N-P Fidelity International.B9 TV Dinners Back With Pizza-azz Alibaba Group...... A1 Nestle...... B2 Alphabet...... B1,B4 H-I Nike...... B10 Alternative Investment Nokia...... A10 Huawei Technologies.A1 BY ANNIE GASPARRO peppers, red potatoes, farro, Market...... B10 iShares Core MSCI Nomura Holdings...... B4 AND SAABIRA CHAUDHURI Amazon.com...... R6 Emerging Mkts ETF.B9 PayPal Holdings...... R10 Pickup in the Freezer Aisle aji amarillo purée and al- American Homes 4 Rent iShares India 50 ETF..B9 Plank Industries...... B10 Frozen-food sales are growing, delivering proﬁts to struggling monds—are packaged in semi- ...... R6 iShares MSCI Emerging Q-R-S Sales of frozen microwav- packaged-food companies. transparent plastic jars in- Apple...... A4,A10,B4 Markets ETF...... B9 Qualcomm...... A10 Athenex...... B3 iShares MSCI able meals are rising at the spired by ice-cream containers. Reebok...... B10 AT&T...... A10 Philippines ETF...... B9 fastest pace in a decade, draw- Fastest-growing food categories Frozen-entree sales, in billions “Historically it’s been about BlackRock...... B9 iShares MSCI South Samsung...... A10 ing attention from food-com- comfort food; now it’s about Boeing...... R2 Schwab U.S. REIT ETF Change from previous year for the 12 For the 52 weeks ended in mid-July Africa ETF...... B9 pany executives otherwise weeks ended March 10 of each year modern American cuisine,” Boston Properties...... R6 iShares MSCI Taiwan ...... R6 Broadcom...... A10,B10 Sony...... B1 struggling with falling sales said Jeff Hamilton, head of ETF...... B9 Fresh fruit C-D iShares MSCI Turkey SPDR Dow Jones Global for well-known but outdated $19 Nestlé’s U.S. foods division, CBS...... A1 ETF...... R10 Real Estate ETF...... R6 brands. $17.6 $17.8 $18 which sells a dozen frozen- Suzuki Motor...... B1 6% Cisco Systems...... A10 iShares U.S. Aerospace “We believe this is not a meal brands including & Defense ETF...... R2 T-U-V Conagra Brands...... B2 blip,” said Sean Connolly, chief Stouffer’s, Hot Pockets and Di- D.E. Shaw Group...... B1 K-L-M Tesla...... A2 Frozen vegetables executive of Conagra Brands Giorno. Dick's Sporting...... B10 KKR...... B2 Under Armour...... B10 DSW...... B10 Kohl's...... B10 United Technologies...R2 Inc., maker of Healthy Choice, 6 Conagra put its new Healthy E-F Kraft Heinz...... B2 Vanguard FTSE Banquet and Marie Callender’s Choice Power Bowls in plant- eBay...... R10 Lakes Distillery...... B10 Emerging Mkts ETF.B9 frozen meals. “For the first Frozen pizza based, compostable packaging Elliott Management...B2 Lockheed Martin...... R2 Vanguard Real Estate time in a generation, this to appeal to consumers who Equinix...... R6 lululemon athletica..B10 ETF...... R6 Express Scripts...... B3 Microsoft...... B1 Verizon...... A10 space is starting to be modern- 5 said they didn’t like microwav- Facebook...... B1,R10 Mondelez...... B10 Viacom...... A4 ized again.” ing plastic. Healthy Choice Sales of frozen entrees rose Frozen meals sales rose about 20% in the fis- 5.7% over the year ended July 2015 ’16 ’17 ’18 cal fourth quarter ended in INDEX TO PEOPLE 15, according to market-re- 4 May, bringing the brand to search firm Spins, after annual $400 million in retail sales for Salty snacks Average operating-proﬁt margins A-B H-I Morris, Doug...... A4 growth of 0.6% and 1.5% the the fiscal year. previous two years. Frozen food Mr. Connolly said that suc- Agati, Amanda...... R6 Hoffman, Reid...... R10 N-P 4 Andelman, David...... A4 Houlihan, Patti...... R2 Nadig, Dave...... R10 The latest bump outpaces 16.3% cess encouraged Conagra to Ball, Ray...... R4 Iachini, Michael...... R6 the 2% rise in overall pack- buy Pinnacle Foods Inc. this Nagrath, Dhruv...... R2 Total food and beverage Bartolini, Matthew.....R6 Ianniello, Joe...... A4 Peng, Lucy...... A2 aged-food sales and marks a Fresh food year for about $8.2 billion, Baum, Mark L...... B3 J-K Plank, Kevin...... B10 change from several years of adding Birds Eye, Evol Foods Beinecke, Candace...... A4 Powers, Rich...... R6 2 5.2% Bengen, William...... R2 Jefferson, Brett...... R8 diminishing sales in frozen and other frozen brands to its Jeske, Karsten...... R2 Prince, Daniel...... R6 Blanchett, David...... R2 Put, Dirk Van de...... B10 meals earlier this decade. product line. The deal is ex- Bohjalian, Tom...... R6 Johnson, Ben...... R6 Sources: Spins (sales); RBC Capital R-S-T Markets (growth and margins) THE WALL STREET JOURNAL. Brakebill, Michael...... B9 Jones, Alex...... B4 Conagra, Nestlé SA and pected to close by year-end. Brown, Steven...... R6 Kantrowitz, Mark...... R8 Redstone, Shari...... A4 Kraft Heinz Co. are spending “It’s a rare feat that you see Byrne, Barbara...... A4 Keller, Daphne...... B1 Roper, Barbara...... R2 millions of dollars to freshen one in your freezer in case of according to Spins. a legacy business that’s been Kilduff, John...... B2 C-D Schuman, Susan...... A4 an emergency,” she said. The pickup in sales of fro- Kirkpatrick, Darrow....R2 Shaw, David...... B9 up frozen brands, introduce around since the ’80s that was Califano Jr., Joseph....A4 Klieger, Rob...... A4 Singer, John...... B1 new ones and expand manu- Efforts to cut salt, sugar zen meals comes as compa- really quite sluggish come Chan, Jennifer...... B4 Kolluri, Prashant...... R8 Snyder, Ed...... B10 facturing capacity. and other less healthful ingre- nies have shaken up both the back to life,” Mr. Connolly said Cohen, Steve...... R8 Kopelson, Arnold...... A4 Stack, Ed...... B10 Karrin Childs, a 37-year-old dients from ready-made meals ingredients and the packag- of Healthy Choice. Collison, Patrick...... R10 Krogh, Peter...... B4 Sundheim, Daniel...... R8 Cook, Tim...... A4 L-M Tan, Hock...... B10 accountant in Akron, Ohio, got appear to be resonating with ing used. Similarly, Nestlé has recast Coxe, Don...... R7 past her aversion to bland customers who like their con- Last year, Nestlé introduced Lean Cuisine as a more gener- Lambropoulos, Thiel, Peter...... R10 DiUlio, James...... R8 Tohme, Carl...... R8 Dohm, Julie...... B3 Panayiotis...... R8 frozen meals after trying venience. Wildscape, a brand of frozen ally healthful brand rather Lee, Hyung...... R8 Trillanes, Antonio...... A7 Nestlé’s new Lean Cuisine Sales of other frozen foods foods made with ingredients than one focused on low-calo- F Tsai, Joe...... A2 Lev, Baruch...... R4 dishes, such as butternut such as vegetables and pizza like honey-bourbon brisket and rie meals. Feig, Paul...... A11 Lundy, Travis...... B2 V-W-Z Fuhr, Deborah...... R10 squash ravioli, in distinctive have also improved recently. cauliflower in gochujang sauce. “It took us a while to under- Macker, Neil...... R6 Vail, John...... B2 G Ma, Jack...... A1 Weiqi Zhu...... B9 black packaging. Overall frozen-food sales rose Wildscape meals—like chimi- stand and adapt,” Mr. Hamil- Gelband, Michael...... R8 McClung, Michael...... R2 Willemin, Michael...... B1 “It’s always good to have 3% in the year ended July 15, churri chicken with roasted ton said. Goldberg, Leonard...... A4 McGillian, Gene...... B2 Wu, Maggie...... A2 Goldner, Brian...... A4 Michalow, Daniel...... B1 Zelnick, Strauss...... A4 Graham, Paul...... R10 Mishra, Neena...... R2 Zhang, Daniel...... A1 Gross, Marina...... B9 Mitchell, Olivia...... B9 Zhu, Steven...... A2 out of a 2015 international term elections. Iran. Market participants will Gu, Feng...... R4 Moonves, Leslie...... A1 Zuckerberg, Mark.....R10 Oil Prices agreement to curb Iran’s nu- Most analysts don’t expect monitor a meeting between clear program, setting the oiltospiketo$85.Manyare OPEC and non-OPEC producers stage for the reimposition of confident simmering trade this month in Algeria. Cast Doubt economic sanctions on the tensions between the U.S. and Gene McGillian, vice presi- ‘The Nun’ Conjures Up country’s oil sector. China will keep a lid on prices, dent of research at Tradition “I do believe the lost Ira- as the dispute could weigh on Energy, said the most impor- Another Warner Bros. Win On Growth nian barrels will hit the market economies world-wide and oil tant factor for where oil prices and consumers hard,” Mr. demand. are headed is how many Ira- Associated Press Opening-weekend audiences Kilduff said. Analysts also said a ramp- nian barrels are taken off the were heavily Hispanic (35%), Continuedfromthepriorpage Sharply higher oil prices up in oil production from Or- market. While U.S. allies in Eu- LOS ANGELES—The horror according to exit polls, and million barrels a day so far could also stir inflation pres- ganization of the Petroleum rope and elsewhere have movie “The Nun” topped the significantly higher than other this year, 1.3% higher than the sures, by some measures al- Exporting Countries members moved to end their oil pur- domestic box office in its first films in the series. figure at this point last year, ready above where the U.S. such as Saudi Arabia, as well chases from the country, other weekend, scoring a best for This marks the fifth consec- according to the Energy Infor- central bank expects them to as nonmembers like Russia, nations such as China haven’t the “Conjuring” franchise and utive weekend that a Warner mation Administration. be in the longer term. That could offset falling output from been as clear about plans. another win for Warner Bros. Bros. movie has held first “Demand is quite strong de- would provide more reasons Studio estimates on Sunday place domestically, following spite the change in season and for the Federal Reserve to con- said the film brought in $53.5 in the successful footsteps of the worries over the emerging tinue raising interest rates, a million from 3,876 North “Crazy Rich Asians” and “The markets,” said John Kilduff, move that could cool both eco- American theaters. Interna- Meg.” It is also the fourth that managing partner at Again tionally, it banked $77.5 mil- the studio has held the first- Capital, a New York-based al- lion for a $131 million global and second-place spots. ternative-investment-manage- debut. The movie, a spinoff of “The Nun” effectively ment firm specializing in com- Dwindling shipments “The Conjuring 2,” cost $22 scared “Crazy Rich Asians” modities. He forecasts WTI from Iran and Interactive million to produce. Before into second place for the first will climb to $85 by the end of “The Nun,” the largest opening time in its four-week run. The the year, which would be the Venezuela could in the “Conjuring” universe rom-com added $13.6 million, highest price since late 2014. cause shortages. was “The Conjuring’s” $41.8 bringing its North America to- But if oil prices push a few Brokers million launch. tal to $136.2 million. dollars above their recent range, analysts worry they could have a harmful effect on nomic growth and financial the economy. Prices are about markets. 1.41 Estimated Box-Office Figures, Through Sunday pays % 40% higher now than this time “What goes on in energy SALES, IN MILLIONS last year, and U.S. consumer markets has a critical impact FILM DISTRIBUTOR WEEKEND* CUMULATIVE % CHANGE wallets are already stretched on monetary policy,” Federal paying for gasoline at the Reserve Bank of Dallas Presi- 1. The Nun Warner Bros. $53.5 $53.5 -- on idle cash pump that is at a four-year dent Robert Kaplan said at an 2. Crazy Rich Warner Bros. $13.6 $136.2 -38 high. energy conference Friday. Asians Dwindling crude shipments “We’ve obviously had a drift- 3. Peppermint STX $13.3 $13.3 -- from Iran, combined with po- ing up in prices already. But if in your Entertainment tential further declines in out- you have a spike up, that obvi- put from crisis-racked Venezu- ously has a big impact on the 4. The Meg Warner Bros. $6 $131.6 -43 ela, could also cause global U.S. consumer.” 5. Searching Sony $4.5 $14.3 -26 supply shortages, pushing All this is occurring as U.S. brokerage *Friday, Saturday and Sunday Source: comScore prices even higher. President voters go to the polls in No- Trump in May pulled the U.S. vember for congressional mid- account1 Investors Still Shun Japan

Continuedfromthepriorpage ship code has prodded investors to be more demanding. “You go back to the 1990s, small companies in Japan talked about growth as growth in revenue,” said Travis Lundy, an independent analyst pub- lishing at Smartkarma. “There’s been an effort to get companies to think of them- To learn more visit: selves as profit engines, not just employment engines or AKOS STILLER/BLOOMBERG NEWS ibkr.com/141 revenue engines.” A Suzuki plant. Mainstream equity investors have sold down their Japanese holdings this year. Suzuki Motor, the $32 billion car and motorbike manu- breaking down, creating op- index. Japanese companies. Since the facturer, exemplifies the trend portunities for private-equity Meanwhile, Japanese stocks beginning of 2013, net marin Japan. Its net margin hit firms like KKR & Co. and have languished. The Nikkei gins, or net income as a share 8.7% in the latest quarter. A hedge funds like Elliott Man- 225 is down almost 2% in 2018 of revenue, have more than decade ago, this figure rarely agement Corp. versus a nearly 8% gain year to doubled to an average of 6%, topped 3%. Earlier this year But the Japanese stock mar- date for the S&P 500. according to a FactSet index Interactive Brokers Rated #1 Sony, the entertainment and ket still isn’t finding traction “Japan is the only major covering over 2,500 listed Jap- Best Online Broker 2018 electronics giant, reported the with mainstream equity inves- country that is going through anese companies. by Barron’s* largest annual operating profit tors from abroad, who have ac- a structural improvement in The country still lags be- Member NYSE, FINRA, SIPC. Supporting documentation for any in its 72-year history. tually sold down Japanese corporate governance, and hind the U.S. and Europe, sug- claims and statistical information will be provided upon request. Some sophisticated Western holdings this year. This is de- thus deserves special attention gesting Tokyo is a long way *Interactive Brokers rated #1, Best Online Broker according to investors, encouraged by the spite Japan appearing to be a by global investors,” said John from the point that it must Barron’s Online Broker Survey 2018: All Together Now, March 26, 2018. For more information see, ibkr.com/ info - Barron’s is a reg- shift, have jumped in. Corpo- relative bargain: The MSCI Vail, chief global strategist at worry about whether increas- istered trademark of Dow Jones & Co. Inc. [1] Credit interest rate rate relationships in which a Japan index trades at just 12.7 Nikko Asset Management, in a ing profits are sustainable. as of 7/3/2018. USD credit interest is paid on balances over USD publicly traded parent com- times expected earnings, ac- recent note to clients. Still, the recent improvement 10,000 in security accounts with Net Asset Value exceeding USD pany owns controlling stakes cording to Datastream, a 16% The changes are feeding has been sharper than in the 100,000. For more information, see ibkr.com/interest 7-IB18-1189 in other listed companies are discount to the MSCI AC World through to the bottom lines of U.S. and Europe. THE WALL STREET JOURNAL. ** Monday, September 10, 2018 | B3 BUSINESS NEWS Cheap Custom-Made Drugs Spur Backlash

Compounders face proposed taking some ingredi- theU.S.rights. ents off a list of those approved Vyera Pharmaceuticals, for- tighter rules, lawsuits for bulk-compounded drugs, merly Turing, didn’t respond from traditional which are often sold to hospi- to a request for comment. tals and doctors. The agency Meanwhile, an Allergan PLC pharmaceutical makers sees no clinical need for com- lawsuit threatens Imprimis’s pounders to use those ingredi- compounding of an alternative BY MELANIE EVANS ents, FDA Commissioner Scott to Allergan’s Restasis dry-eye Gottlieb said in a statement an- treatment. Allergan alleges A new kind of drugmaker is nouncing the proposal. Imprimis is using false and emerging to meet demand for Meanwhile, pharmaceutical misleading advertising to mar- lower-price medicines by cus- companies have filed suits that ket its compounded drug. tom-making drugs, sparking seek to stop rivals from com- An Allergan spokeswoman pushback from federal health pounding drugs at large volumes. said when a company mass- regulators and legal challenges The conflicts underscore a produces and markets “stan- from traditional pharmaceuti- central challenge as policy mak- dardized drugs that are not cal companies. ers, industry and the FDA itself tailored to an individual pa- These companies are mar- seek to ease regulation and bol- tient’s medical needs under keting cheaper versions of ster competition to lower drug the guise of compounding, brand-name drugs but they dif- prices—balancing access to less- they may be putting thousands fer from traditional generic- expensive drugs against safety of patients at risk.” drug makers because they op- concerns and legal protections “The facts will demonstrate erate much like pharmacies for innovative medicines. that Allergan was not out-mar-

that mix their own medicines, “If people start taking com- JOEL MORILLO/PASSAGEketed PRODUCTIONS/ASSOCIATED PRESS by us and physicians though often in larger quanti- pounded drugs because of cost, Imprimis reached a deal with Express Scripts to make a $1 alternative to an antiparasite drug. were not misled by us,” said ties. That allows them to skip instead of a generic or new Imprimis CEO Mark L. Baum. the regulatory approval process drug, that would undermine the He declined to comment fur- through which traditional drug- premarket approval system,” Price Pressure ther on the lawsuit. makers must prove safety and Julie Dohm, the FDA senior sci- High-priced drugs face growing competition from drugmakers known as compounders. Below, a selection Regulators should consider efficacy of their medicines. ence adviser for compounding, of branded drugs that face competition from compounded alternatives. drug costs when designating Companies selling custom- said. “Those studies and that shortages that would enable made versions of costly testing are so critical to know- Price range during year outsourcing compounders to drugs—a practice known as ing that the drug will be safe Tracleer Syprine Albenza Revatio step in, Mr. Baum said. If you “compounding”—say they are and effective.” 125mg oral (60 tablets) 250mg oral (100 capsules) 200mg oral (two tablets) 20mg oral (90 tablets) cannot afford a drug it is “ef- meeting demand for alterna- Drug compounding is a Actelion Pharmaceuticals Bausch Health, formerly Amneal Pharmaceuticals, Pﬁzer fectively in short supply.” tivestohigh-pricedrugs. longtime practice, typically Valeant Pharmaceuticals which merged with Impax A new venture, Osh’s Afford- International Laboratories Athenex Inc. in Buffalo, done by individual pharmacies $20 thousand $5 thousand able Pharmaceuticals, of Little- N.Y., last month began market- to satisfy the specific needs of ton, Colo., is marketing com- $4 thousand ing a compounded alternative a patient. 15 $21,266.80 $4,292.57 pounded drugs for three to blood-pressure medication Over the years, some com- $10,881.00 3 diseases. Osh’s doesn’t bulk- Vasostrict, which the company pounders grew to produce large 10 produce the drugs but says it said it sells for up to 35% less quantities of certain drugs to 2 has agreements with pharma- than the branded version. A sell to hospitals and clinics. cies in 30 states to make the 5 $441.62 typical dose of Vasostrict can Federal scrutiny intensified af- 1 low-cost versions. list for as much as $836, ac- ter pain drugs mixed by New Osh’s markets a com- cording to wholesale-acquisi- England Compounding Center 0 0 pounded version of Syprine, a tion cost data from Elsevier’s in Framingham, Mass., led to 2005 ’10 ’15 ’05 ’10 ’15 ’05 ’10 ’15 ’05 ’10 ’15 Wilson disease treatment from Gold Standard Drug Database. an outbreak of fungal meningi- Bausch Health Cos. Syprine First listing price after Valeant acquires The Food and Drug Admin- tis in 2012 that killed at least Note: Start dates according to IBM Watson Health lists for as much as $21,000 a Syprine from Aton Pharma Sept. 1, 2010. istration is taking steps that 64 people. In response, Con- Source: IBM Watson Health THE WALL STREET JOURNAL. month for certain patients, ac- could stymie compounders’ gress required large-volume out- cording to wholesale-acquisi- push. Laws don’t allow com- sourcing compounders, known ing vasopressin from the list proposal is open for public for a $1 alternative to antipar- tion cost data from IBM Wat- pounders to merely copy med- as “outsourcing facilities,” to of substances that can be used comment for 60 days. asite drug Daraprim after the son Health, and a generic icines. Drugs may only be follow certain manufacturing, in bulk compounding, after “We strongly believe vaso- list price for a tablet soared to version made by Teva Pharma- compounded under limited cir- quality and labeling standards, Endo International PLC, which pressin is appropriately in- $750 from $13.50 in 2015. ceutical Industries Ltd. costs cumstances: to address a drug though the rules stopped short sells a version under the brand cluded on the bulk substances The deal gives “members about $18,000. Osh’s version shortage or meet medical of requiring FDA approval of name Vasostrict, revived a list and we look forward to our who need an affordable alter- will cost about $120 for the need, by modifying the cus- compounded drugs. lawsuit over the agency’s com- active participation with the native to an egregiously priced same prescription, said tom-made version—such as About 70 facilities are regis- pounding policy. FDA during the comment pe- medication” another choice, founder Alex Oshmyansky. adjusting ingredients to ad- tered with the FDA to compound Endo Chief Legal Officer riod,” Athenex said. said Jennifer Luddy, an Ex- Dr. Oshmyansky said Osh’s dress an allergy. In January drugs in bulk, though it couldn’t Matthew Maletta said the com- Pharmacy-benefit manager press Scripts spokeswoman. will satisfy the FDA by ensuring the agency said high prices be determined how many mar- pany was “extremely pleased” Express Scripts Holding Co. Daraprim’s price rose after Tu- patients have prescriptions for aren’t a valid reason. ket lower-cost medicines. with the proposal and optimis- signed a deal with compounder ring Pharmaceuticals AG, then a custom-made drug. Bausch Then last month, the FDA The FDA proposed exclud- tic FDA would finalize it. The Imprimis Pharmaceuticals Inc. led by Martin Shkreli, bought and Teva declined to comment.

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TECHNOLOGY WSJ.com/Tech

PERSONAL TECHNOLOGY | By David Pierce Look to Cloud to Safeguard Your Digital Life

When it the everything-everywhere and Apple’s iCloud. Using iCloud shows little love Excel and the rest. though—Google would comes to method: You download an any of them is better than for non-Apple devices, too. OneDrive is designed pri- rather you just search. keeping your app, which adds a folder to using none, but they have The iCloud web app stinks, marily for people who use Dropbox (2GB free, 1TB digital files your computer that connects important differences. Not and iCloud for Windows is Microsoft and Windows for $10/month): Dropbox is safe, you to your cloud storage. Any- all will be for you. far more complicated to use products daily. Still, it’s the only one of these ser- should follow thing you add to or change i Cloud (5GB free, 2TB than other services. friendlier to other platforms vices not owned by a tech gi- the 3-2-1 Rule. in that folder automatically for $10/month): If you have OneDrive (5GB free, 1TB than iCloud is. ant, and that neutrality of- Coined by photographer uploads, then can be down- an iPhone and/or Mac, you’re for $7/month): OneDrive Google Drive (15GB free, fers some advantages. It has Peter Krogh and now so loaded to your other devices. likely already using iCloud to checks all the cloud-storage 2TB for $10/month): Drive’s a huge number of integra- widely respected that the (Some apps let you choose sync contacts, calendars, boxes—works on lots of de- best features are Google’s tions that allow you to edit government recommends it, which folders or files down- notes and messages across vices, easy enough to use, best features. You can search Microsoft Office and Auto- the rule goes like this: Have load to a given device.) your Apple devices. stores all your files—but for the text of handwritten CAD files, send huge attach- at least three copies of ev- The other approach is to If you upgrade, starting at doesn’t offer much in the notes or find a picture just ments in Gmail or quickly erything, on at least two dif- upload everything once, then $1 a month for 50GB of way of uniquely great fea- by describing it. The new share things in Slack. ferent types of media, at manage it all through web space, iCloud becomes a full- tures. I like On Demand, Quick Access bar guesses, Dropbox is good at man- least one of which should be and mobile apps instead of on backup and sync tool for which can show you synced surprisingly accurately, what aging multiple devices by somewhere else. Two of keeping it synced to your lo- every file on every Apple de- files as if they’re local but you might be looking for ev- only downloading the files those are pretty easy. Buy a cal machine. I mostly use the vice you own, which you can won’t download them until ery time you open the app. you need on each one. Drop- big hard drive and back your second method, because I access in Finder on your Mac you open them. On the other There’s also no better box’s version history even stuff up, and keep your lap- don’t want the same photo or the Files app on iOS. hand, I dread using its slow place to put your random keeps past iterations of your top out of the bathtub. Your potentially taking up space Problem is, you have to web interface. You can’t beat files if you already work in files, too, to save you from a third place should be a on five devices. download files every time the price: $7 a month gets Google Docs and store your bad edit or accidental delete. cloud-storage service. I like four of the biggest you want to access them, you a terabyte of storage pictures in Google Photos. It I don’t care for Dropbox’s su- In general, cloud storage services: Dropbox, Google which will fill your hard plus a full Microsoft Office doesn’t have tags or labels per-sparse interface, but it’s works in two ways. One is Drive, Microsoft’s OneDrive drive quickly. 365 subscription with Word, for organizing your stuff, an impressively robust tool.

Through the Years Infowars Pulled Apple to Broaden Apple plans to announce two new iPhone 6 inches From App Store models with larger screens and an updated New 6.5-inch screen version of iPhone X with a faster processor. New 6.1-inch screen Its iPhone Screens 5 inches iPhone generations’ screen sizes 5 Apple Inc. removed Alex iPhone X Jones’s Infowars website from BY TRIPP MICKLE three new phones and 28% iPhone 6 to 8 plus its App Store late Friday, elim- bigger than the two models 5.5-inch screen inating one of the few remain- Apple Inc. is preparing to unveiled in 2016. 4 4 ing digital platforms available supersize its iPhone lineup, At a time when people are iPhone 6 to 8 to the right-wing provocateur. aiming to drive profit in its buying fewer new phones, big- 4.7-inch screen The company took down biggest business despite stag- ger size brings two advan- iPhone 5 to SE five apps affiliated with In- nant unit sales while also fuel- tages. It helps Apple buoy 3 4.0-inch screen 3 fowars for violating its app- ing growth for apps and ser- prices and profit margins be- Early iPhones developer guidelines, an Apple vices that are more appealing cause it can sell larger phones spokeswoman said. Those to users with bigger screens. at a greater markup than it 5.8-inch guidelines preclude apps that The technology giant on pays suppliers for the larger 2 screen 2 deliver content that is “offen- Wednesday plans to announce screens. And it encourages sive, insensitive, upsetting…or two new models with its larg- people to use their phones in exceptionally poor taste.” est iPhone screens ever: a more, helping momentum of That includes “mean-spirited lower-priced device with a 6.1- Apple’s services business, 1 3.5-inch 1 references or commentary” inch LCD display and a pricier which includes app-store sales screen about religion, race, sexual ori- one with a 6.5-inch display us- and subscriptions to video ser- entation and gender. ing more advanced OLED tech- vices like Netflix and HBO. Infowars won’t be allowed nology, according to people fa- Users with smartphone 0 0 to return to the App Store, miliar with the plans. The screens 6 inches or larger, like 0231 0231 the spokeswoman said. She company also will unveil an ones Apple plans to launch Note: Screen size is measured diagonally. Screens on iPhone X and newer have facial-recognition systems that cut into the display. declined to say what In- updated version of its iPhone this year, typically use twice Source: WSJ analysis of the phones Stephanie Stamm/THE WALL STREET JOURNAL. fowars content violated Ap- X, which has a 5.8-inch OLED as many apps as those with ple’s policies. screen, that will boast a faster 5.5-inch screens, such as those money from them,” said Jenni- ten further as people hold on The new iPhones are likely The removal came a day processor for improved per- on the largest versions of the fer Chan, analyst with Kantar to their smartphones longer to start at $800 for the LCD after Twitter Inc. permanently formance, they said. Apple de- iPhone 6 or 7, said Kantar Worldpanel. She added that and it gets harder to keep model, $900 for the iPhone X banned Infowars and Mr. clined to comment. Worldpanel, a market research the larger phones typically raising prices. update and $1,000 for 6.5-inch Jones, its founder. That fol- The trio of phones will firm. Users of the larger de- carry faster processors, more Apple’s iPhone revenue in- OLED model, up from last lowed previous content re- boast other features, such as vices also are 62% more likely memory and better graphics creased 15% to $129.51 billion year’s starting prices of $699, movals from Facebook Inc. facial-recognition technology, to play games and twice as than smaller devices. over Apple’s first three fiscal $799 and $999, according to and Alphabet Inc.’s YouTube. but their display size stands likely to watch video daily as Though the iPhone remains quarters through June, even as Nomura Group’s global equity Mr. Jones has argued that out—their average screen people with smaller screens. Apple’s most important prod- shipments rose 0.4% to 170.8 research unit. It predicts aver- Silicon Valley is suppressing area, without accounting for a “The bigger the device, the uct, accounting for about two- million units over the period. age iPhone selling prices will his First Amendment rights facial-recognition system that more people are getting out of thirds of revenue, unit sales The services business jumped rise by $20. and trying to stifle conserva- juts into the top of the display, it, and the more opportunity growth has waned in recent 26% over the same period to —Yoko Kubota and Yang Jie tive viewpoints. is 23% larger than last year’s there is for Apple to generate years and is expected to flat- $27.2 billion. contributed to this article.

U.S., and American law at the implement the ruling on all the much as 4% of a company’s an- Missing Links Google, EU time forbid Microsoft from European versions of its nual world-wide revenue. Results from individual name searches Google has removed and turning it over to foreign law search engine, setting up a re- Google declined to comment declined to remove under Europe's ‘right to be forgotten’ enforcement, putting the com- quest and vetting process that on what it will do if it loses In a Battle pany in a legal bind, the com- has so far removed some one the case. A ruling will likely 300,000 Links removed Not removed pany said. million search results in Eu- take at least several months. The Google case being rope. In one instance, Google Before the court rules, one of On Borders heard Tuesday stems from the removed links to a 1998 Wall its advocate generals will issue 250,000 EU Court of Justice’s landmark Street Journal article about a nonbinding opinion. ruling in 2014 that created a tantric sex from the search re- Google says it will argue 200,000 ContinuedfrompageB1 right to be forgotten from sults of a man who the article that its application of the right one country’s police demand search engines. The court said said had attended a tantra to be forgotten is already ef- 150,000 data from a tech company, but that search engines must workshop. fective in France for well over another country’s law forbids honor individuals’ requests to If Google complies with the 99% of searches. More broadly, giving such data to foreign po- remove results, including their French ruling ordering global the company plans to assert 100,000 lice. In early 2015, for instance, personal information, from application, the firm risks run- that the EU has an obligation Brazilian law-enforcement offi- searches for their own name. ning up against U.S. free- to minimize legal conflict with 50,000 cials detained a Microsoft ex- But the court also said Google speech protections. Content other jurisdictions. It also will ecutive in São Paulo after the must balance those requests providers could seek U.S. court argue that the right to be for- 0 company refused to produce against the public interest in injunctions to stop removals, gotten is far from settled law Skype data of a Brazilian cus- keeping those results linked to but then Google would face EU in many places, such as the 2014 ’15 ’16 ’17 ’18 tomer, Microsoft said in a blog that person—for instance, in privacy fines if it complies. U.S., where freedom of speech Note: Removals began May 29, 2014; Data for 2018 are through Sept. 2. post later that year. The rea- the case of public figures. Under the EU’s new privacy usually prevails over privacy Source: Google Transparency Report THE WALL STREET JOURNAL. son: The data was kept in the Google moved quickly to law, such fines can rise to as concerns. THE WALL STREET JOURNAL. Monday, September 10, 2018 | B9 MARKETS Overseas Rout Rattles State Early Losses in China

BY ASJYLYN LODER For BlackRock, Fidelity AND JULIE WERNAU Different Paths BY STELLA YIFAN XIE mance of their private funds. Tennessee's public pension system built its own emerging-market portfolio using single-country ETFs. A BlackRock spokeswoman The troubles hammering de- The system excludes China and Russia, countries that are part of traditional emerging-market indexes. Some of the world’s largest said the firm is committed to veloping economies are rever- asset managers have gotten a building its business in the ETF performance berating as far as Tennessee, Percentage of assets, by selected countries rough welcome in China. country and has “strong con- where the state’s retirement 10% No sooner did fund manag- viction in the equity strategy system is the biggest share- South Korea ers such as BlackRock Inc. and launched in China.” holder of a dozen exchange- Fidelity International roll out Both firms have been in- 5 Taiwan traded funds that buy stocks in Tennessee Consolidated their inaugural Chinese stock vesting in Chinese stocks and Retirement System those markets. India funds for wealthy domestic in- bonds for many years, mostly The rout has exposed the 0 emerging-markets ETFs vestors than the country’s mar- on behalf of investors outside Vanguard FTSE Emerging difficulties facing U.S. public Brazil kets started sliding—the the country. Their onshore Markets ETF pensions, many of which have –5 Shanghai Composite Index has Chinese stock funds each have embraced riskier assets in re- South Africa iShares Core MSCI fallen 18% this year. The de- less than $50 million in assets cent years hoping to boost re- Emerging Markets ETF clines have coincided with es- under management, according turns. –10 China calating trade tensions between to people familiar with the The Tennessee Consoli- China and the U.S., China’s funds. They are small in part Russia dated Retirement System, –15 weakening currency and a because regulations prevent slowdown in economic growth. private funds from accepting which manages $50 billion in 0% 5 10 15 20 25 pension assets for the state’s ’18 Although the new BlackRock money from more than 200 in- Note: Data for TCRS reﬂect the percentage of country exposure by emerging-market ETF public employees, has almost holdings. Vanguard and iShares ETF data reﬂect country exposure of the fund portfolios. and Fidelity stock funds have dividuals or institutions. $2 billion invested in ETFs de- Source: FactSet THE WALL STREET JOURNAL. outperformed the broader Chi- But those sophisticated in- voted to some of the hardest- nese market, they—and most of vestors and wealthy individu- hit markets such as South Af- single-country ETFs that buy their global peers’ new China als in mainland China may be rica, Indonesia and Turkey. emerging-market stocks. It is funds—remain in the red. That less forgiving of the macro en- Those investments have lost the top shareholder of 12 of marks an inauspicious start for vironment. Many investors in $243 million since the start of those and among the 10 largest global asset managers trying to private funds—which often the year, according to FactSet. investors in the other five. establish a performance record pay managers performance Emerging-market countries When the pension plan de- within China and build brand fees of 10% or 20% for invest- have suffered in recent months cided to add emerging-markets recognition there. ment profits—want to see pos- as a rising dollar and higher exposure several years ago, its Expanding in China is vital itive absolute returns even in U.S. interest rates have made managers had concerns about for the firms’ long-term falling markets, said Weiqi their debt burdens more ex- corruption and undemocratic growth plans, especially as Zhu, managing director of pensive. Those pressures governments, said Michael more investors in developed money manager Gao Zheng pushed the MSCI Emerging Brakebill, chief investment offi- markets put their money in Asset Management. Markets Index into bear-mar- cer for the Tennessee retire- passive investment funds. In The prospects for growth ket territory Thursday, defined ment system. So, Tennessee April, BlackRock Chief Execu- have global asset managers as a decline of more than 20% scored countries based on tive Laurence Fink said build- looking past recent declines. from a recent peak. Transparency International’s ing a presence in high-growth In a mid-August call with in- Public pension funds had Corruption Perceptions Index markets such as China was vestors, BlackRock representa-

hesitated to embrace emerging MARK HUMPHREY/ASSOCIATED PRESS and The Economist Intelligence one of the firm’s top priorities. tives said the country’s econ- markets because of human- Tennessee hoped to raise returns by including riskier assets. Unit’s Democracy Index. China’s asset-management omy is much healthier than rights abuses and government Investors have to be mindful industry is expected to surge Turkey and other developing instability but have tiptoed in of turbulence in emerging mar- to nearly $12 trillion over the markets and that they expect recently, looking for an alterna- Portfolio Excludes 3% of the iShares ETF and kets, said Marina Gross, execu- next five years, from $7.5 tril- the yuan to stabilize against tive to the high valuations and 3.4% of the Vanguard fund. tive vice president of portfolio lion now, according to data the dollar soon, according to a slow growth in much of the de- China and Russia Michael Brakebill, chief in- research and consulting at from Z-Ben Advisors, an in- memo circulated among cli- veloped world. vestment officer for the Ten- Natixis. She found wealth man- dustry consultant. ents by Citic Securities Co., a “Globally, pension funds nessee retirement system, agers put just 3.5% of their For now, though, the asset Chinese brokerage that helped have been investing less and Notably, Tennessee’s portfo- said missing out on China’s jug- moderate-risk portfolios into managers are licking early market BlackRock’s onshore less in equities and bonds and lio excludes China, the biggest gernaut has sometimes been emerging-market stocks, but wounds. BlackRock’s inaugural stock fund. investing more in so-called slice of most traditional emerg- painful, but he has concerns even that small allocation Chinese stock fund for domes- other alternatives: private eq- ing-market indexes. about its financial stability. drives 12% of their risk. “Any tic investors, launched in July, uity, infrastructure, emerging China makes up 22% of the That decision has helped more than 5% really starts to was down close to 8% by mid- Losing Steam markets,” said Olivia Mitchell, $48 billion iShares Core this year: The benchmark swamp the portfolio from a August, according to people Two major indexes of Chinese- the International Foundation of Emerging Markets ETF and Shanghai Composite has risk perspective,” she said. familiar with the matter. The listed stocks have lost nearly a Employee Benefit Plans Profes- 28% of the $58 billion Van- slumped more than 18% in So far this year, Tennessee’s fund, which holds China-listed ﬁfth of their value this year. sor at the Wharton School of guard FTSE Emerging Mar- 2018. emerging-markets portfolio has construction, energy and other the University of Pennsylvania. kets ETF, according to FactSet. “I don’t have huge regrets declined 11.3%, in line with the stocks, recovered some ground 4500 “That’s really a search for Tennessee doesn’t invest in that we don’t have money performance of the broader and was showing a 3.75% loss CSI 300 Index higher returns, and that also Russia either, which comprises there right now,” he said. emerging-markets ETFs, ac- since inception at the end of comes with higher risk.” cording to FactSet. August, one of the people said. 4000 The exposure of U.S. public Mr. Brakebill said it makes Fidelity launched its first pension funds to emerging- iShares MSCI Taiwan ETF,ac- single-country ETF holdings. It sense to invest in emerging Chinese stock fund for inves- market equities now averages cording to FactSet. Pension owns nearly 40% of the $338.6 markets because they account tors on the mainland in De- 3500 4.5%, up from 2.9% a decade plans in Finland, Quebec and million in the iShares MSCI for about 50% of the world’s cember 2017. The fund, which ago, according to eVestment, Alabama are among the top South Africa ETF, almost 24% gross domestic product. It has invests primarily in China’s A- an investment data provider. holders of the $30.1 billion of the $803.8 million iShares “basically done and delivered share market, was down 3000 Tennessee’s is 4%. iShares MSCI Emerging Mar- India 50 ETF and more than what we thought it might,” he roughly 15% at the end of Au- The New Jersey Division of kets ETF. 21% of the $169.2 million said. gust, according to a person fa- Investment is the third-largest What is unusual is the iShares MSCI Philippines —Ira Iosebashvili miliar with the matter. Shanghai Composite Index 2500 investor in the $4 billion breadth and size of Tennessee’s ETF. In all, Tennessee owns 17 contributed to this article. Fidelity and BlackRock representatives said Chinese reg- ’182017 ulations forbid them from Source: Wind Information Co. Business Insider about an im- cision to part ways with him shirts in a hallway and told a publicly disclosing the perfor- THE WALL STREET JOURNAL. Ex-Partner pending article, Mr. Michalow and will defend ourselves in the colleague he needed a hug after asked D.E. Shaw to issue a appropriate forum.” a bad day, the people close to statement clarifying that he Mr. Singer, Mr. Michalow’s Mr. Michalow said. D.E. Shaw Currencies Takes On wasn’t found to have committed lawyer, is a well-known attor- disputes that account. sexual misconduct or harass- ney who represents several Following his departure, Mr. U.S.-dollar foreign-exchange rates in late New York trading US$ vs, US$ vs, ment, according to the people men who lost their positions Michalow rejected more than Fri YTD chg Fri YTD chg D.E. Shaw close to him. in light of #MeToo. Tom Clare $10 million from D.E. Shaw. The Country/currency in US$ per US$ (%) Country/currency in US$ per US$ (%) In response, D.E. Shaw is- of Clare Locke also represents money would have required Mr. Americas Europe sued a statement that Mr. Mich- Mr. Michalow. Michalow to forgo his right to Argentina peso .0270 37.0933 99.4 Czech Rep. koruna .04498 22.233 4.5 ContinuedfrompageB1 alow was fired for “gross viola- D.E. Shaw’s investigation into legal action. Brazil real .2463 4.0593 22.6 Denmark krone .1549 6.4550 4.0 .7596 1.3165 4.7 gal liability.” tions of our standards and “Under his longstanding em- Canada dollar Euro area euro 1.1553 .8656 3.9 .001447 690.90 12.3 Mr. Michalow, 36 years old, values.” It described his conduct ployment agreement, Mr. Mich- Chile peso Hungary forint .003555 281.27 8.6 Ecuador US dollar 11unch joined D.E. Shaw after graduat- as “abusive and offensive.” The alow would have been entitled Iceland krona .008924 112.06 8.2 Mexico peso .0518 19.3220 –1.8 The fund cited ‘gross Norway krone .1183 8.4514 3.0 ing from Harvard University in firm wasn’t willing to say the to receive previously earned Uruguay peso .03042 32.8700 14.1 .2678 3.7344 7.3 2004 and rose quickly at the complaints raised no concerns violations of our compensation had he signed a Venezuela b. fuerte .000004248409.0001 2401878.4 Poland zloty Russia ruble .01430 69.914 21.2 firm. At 25, he was running the of harassment or discrimina- standard separation and release Asia-Pacific standards’ in the Sweden krona .1104 9.0594 10.7 firm’s structured-credit unit, tion, the person close to D.E. agreement,” D.E. Shaw’s spokes- Australian dollar .7105 1.4075 9.9 Switzerland franc 1.0318 .9692 –0.5 which made around $500 mil- Shaw said. partner’s firing. man said. “He failed to do so China yuan .1461 6.8448 5.3 Turkey lira .1561 6.4071 68.8 lion over the next few years, the “All I asked of the Executive and forfeited any right to that Hong Kong dollar .1274 7.8500 0.5 Ukraine hryvnia .0354 28.2800 0.5 people close to Mr. Michalow Committee, and even David compensation.” India rupee .01387 72.105 12.9 .0000675 14820 9.9 UK pound 1.2901 .7751 4.7 said. He made partner at 29 at Shaw, was to be ethical and tell Mr.Clare, one of Mr. Micha- Indonesia rupiah Japan yen .009007 111.03 –1.5 Middle East/Africa the end of 2011 and was paid the truth. Instead, they mali- Mr. Michalow began early this low’s lawyers, disputes D.E. .002660 375.89 13.0 Kazakhstan tenge Bahrain dinar 2.6525 .3770 –0.03 nearly $40 million the next ciously followed through on year after Mr. Michalow told a Shaw’s account. Macau pataca .1236 8.0937 0.6 Egypt pound .0559 17.8925 0.7 year, the people close to him their threats to defame me and colleague that he wanted to hire Mr. Michalow contends other Malaysia ringgit .2409 4.1518 2.2 Israel shekel .2786 3.5890 3.1 confirmed. destroy my reputation,” Mr. Mi- an assistant he could “call sugar staffers exhibited behavior New Zealand dollar .6532 1.5309 8.6 Kuwait dinar 3.2988 .3031 0.6 Most recently, Mr. Michalow chalow said in a statement to tits,” the people close to D.E. worse than his own. In May, he Pakistan rupee .00812 123.215 11.4 .0186 53.735 7.5 Oman sul rial 2.5974 .3850 0.01 co-ran D.E. Shaw’s $6 billion The Wall Street Journal. Mr. Shaw and Mr. Michalow said. published on social media a let- Philippines peso Singapore dollar .7253 1.3788 3.1 Qatar rial .2745 3.644 –0.1 discretionary macro strategy, Shaw is the billionaire founder After another employee com- ter detailing his claims to Mr. South Korea won .0008861 1128.57 5.8 Saudi Arabia riyal .2666 3.7508 0.01 which looks for market ineffi- of the firm. plained, the firm started an in- Shaw, where he said some exec- Sri Lanka rupee .0061713 162.04 5.6 South Africa rand .0656 15.2372 23.3 ciencies across asset classes. “Mr. Michalow’s account is vestigation into Mr. Michalow. utives dated junior reports and Taiwan dollar .03245 30.818 3.9 D.E. Shaw initially said Mr. inaccurate and his claims have That investigation found four visited strip clubs. D.E. Shaw Thailand baht .03045 32.840 0.8 Close Net Chg % Chg YTD % Chg .00004287 23327 2.7 89.96 0.31 0.35 4.63 Michalow retired in March. In no merit,” D.E. Shaw’s spokes- other questionable incidents, in- declined to comment on those Vietnam dong WSJ Dollar Index May, after being contacted by man said. “We stand by our de- cluding a time he had changed allegations. Sources: Tullett Prebon, Dow Jones Market Data

THE TICKER | Market events coming this week

Monday EIA status report Consumer-price index Capacity utilization Previous change in stocks in All items, July up 0.2% July, previous 78.1% Consumer credit millions of barrels Aug., expected up 0.3% Aug., expected 78.3% June, prev. up $10.21 bil. Crude oil down 4.3 Core, July up 0.2% July, exp. up $13.8 bil. Gasoline up 1.8 Import-price index Aug., expected up 0.2% Distillates up 3.1 July, previous 0.00% Tuesday Aug., expected up 0.1% Producer-price index Treasury budget Industrial production Wholesale inventories All items, July 0.0% Aug., ‘17 June, previous up 0.1% Aug., expected up 0.2% $108.0 bil. deficit July, previous up 0.1% July, expected up 0.6% Core, July up 0.1% Aug., ‘18, exp. n.a. Aug., expected up 0.3% Aug., expected up 0.2% Retail sales Earnings expected* July, previous up 0.5% Wednesday Estimate/Year Ago($) Thursday Aug., expected up 0.4% Short-selling reports Adobe 1.69/1.10 Ratio, days of trading volume of Initial jobless claims Kroger 0.37/0.39 Retail sales, ex. autos current position, at Aug. 15 Previous 203,000 July, previous up 0.6% NYSE 4.9 Expected 210,000 Aug., expected up 0.5% Nasdaq 4.1 Friday Michigan Consumer EIA report: natural gas Business inventories Mort. bankers indexes Sentiment Index Previous change in stocks in June, previous up 0.1% Purch., previous up 1% billions of cubic feet July, expected up 0.5% Aug., final 96.2 Refinan., prev. down 1% up 63 Sept., prelim. 96.0

* FACTSET ESTIMATES EARNINGS-PER-SHARE ESTIMATES DON’T INCLUDE EXTRAORDINARY ITEMS (LOSSES IN PARENTHESES) ERIK S. LESSER/EPA/SHUTTERSTOCK ADJUSTED FOR STOCK SPLIT NOTE: FORECASTS ARE FROM DOW JONES WEEKLY SURVEY OF ECONOMISTS Analysts expect grocer Kroger Co. to report quarterly earnings of 37 cents a share on Thursday. B10 | Monday, September 10, 2018 **** THE WALL STREET JOURNAL. MARKETS

Investors will get a fresh look at inﬂation prospects this week Rising Wages Have when the Labor Department releases the consumer-price index. The index reached a six-year high earlier in 2018, propelled by rising prices for energy, transportation services and shelter. Inﬂation Perking Up 3.0% 2.5

Inflation will be front and center for investors this week. Labor Department data out last Friday showed strong gains in U.S. workers’ wages, 2.0 sparking selling in government bonds. The declines sent the yield on the benchmark 10-year Treasury note, which rises as bond prices fall, to its highest level since Aug. 8, widening the gap between the 10-year and two-year yields. Since the beginning of the year, investors have been 1.5 searching for signs of inflation, which poses a threat to the value of a bond’s fixed interest and principal. Should wages accelerate, some analysts expect the gains to power more consumer spending, leading to a cycle of price increases throughout the economy. 1.0

3.0% 0.5

0 2.5 10-year U.S. Treasury yield 2016 ’17 ’18

2.0 Economists will watch for continued strength in consumer spending, an engine of the economy, when the Commerce Department releases August retail-sales data this Friday. Growth 2-year U.S. Treasury yield in retail sales in July was driven by stronger spending at grocery 1.5 stores, restaurants, department stores and clothing stores. 2.0%

1.0 1.5

1.0

0.5 0.5

0 0 –0.5 2016 ’17 ’18 –1.0 A larger-than-expected gain in average hourly wages reported Investors, however, aren’t betting on a large acceleration in price 2016 ’17 ’18 Friday raised new concerns about an acceleration in inflation. increases. A measure of bets on average annual inflation over the Wage gains are typically considered a precursor to inflation. next 10 years rose modestly Friday to 2.11 percentage points. The slow pace of pay increases earlier this year had been matched Bondholders have been reluctant to bet on a faster pace of by rising prices for gasoline. That had diminished some of the consumer-price increases. Continued tension between the U.S. Shares of retailers have been among the best performers in the increase to purchasing power that was expected to come from and its major trading partners has damped economic activity S&P 500 this year, an unexpected turnaround fueled by strong the 2017 tax cuts. and threatens to further restrain the pace of growth. earnings, buoyant consumer confidence and a nationwide shopping spree. Department stores, discounters and auto-parts U.S. hourly wages, change from a year earlier 10-year breakeven rate retailers are some of the biggest gainers. 2.9% 2.2% 80%

Advance 2.8 60 2.0 Auto Parts 2.7 Kohl’s 40 TJX 2.6 1.8 Macy’s 20 Nordstrom 2.5 1.6 0 2.4

2.3 1.4 –20 2016 ’17 ’18 2016 ’17 ’18 JFMAMJJAS

Sources: Ryan ALM (yields); Thomson Reuters (breakeven); SIX (stocks); FactSet (sales); Bureau of Labor Statistics (price index, earnings) THE WALL STREET JOURNAL. HEARD ON THE STREET Email: [email protected] FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard Mondelez’s Muddled Growth Path OVERHEARD Broadcom

Mondelez International, Right now, however, this Companies, like whisky, Explains CA the global purveyor of Oreo Hoping for a Rebound exposure isn’t helping Mon- improve with age—and none cookies and Cadbury choco- Mondelez International organic net sales growth delez. Emerging markets more so than companies that Deal at Last late, laid out a new strategic have been struggling with make whisky. 3.9% Broadcom vision on Friday. It left many 3.7% slowing growth, inflationary An English whisky startup, It took a little observers on Wall Street pressures and weakening the Lakes Distillery, is think- while to plug its latest deal, hungry for more details. currencies. These factors, ing of going public. English as but late is better than never. Following a strategic re- Company along with planned increases opposed to Scotch whisky is The chip maker used its view, new Chief Executive 2.4% forecast in spending, contributed to a rare breed, but the craft-li- fiscal third-quarter report Dirk Van de Put said the 2.0% the company’s surprisingly quor boom has prompted a Thursday to better explain company is turning its focus low guidance of 3% to 5% ad- handful of launches. its rationale for buying CA to accelerating sales growth, 1.3% justed earnings-per-share Anyone can make a new Technologies. The acquisi- having been focused on cost growth in 2019. That is down vodka or gin, but whisky tion—announced two months cuts and margin expansion 0.9% from 13% to 14% growth ex- needs time to age. This is ago—signaled Broadcom tak- since it spun off Kraft Foods pected in 2018 and analysts’ one reason Chief Executive ing a strategic turn deep into in 2012. estimates of around 7% Nigel Mills is considering the enterprise-software mar- The packaged-food indus- growth for 2019. The com- raising up to £15 million ($19 ket. The company made little 2013 2014 2015 2016 2017 2018 try as a whole is trying to pany didn’t clarify how much million) on London’s Alterna- effort at the time to explain make this same transition as Source: the company THE WALL STREET JOURNAL. each of the various factors tive Investment Market:It the move to investors. Broad- shareholders are eager to would contribute to the needs cash to tide it over uncom’s stock slid 19% and has see pathways to growth. But should be enough, they ar- necessary to bring more slowdown when repeatedly til it is ready to sell stock in remained down ever since. investors seemed uncon- gued, to accelerate organic wholesome brands on board, asked on the conference call. greater volumes. The other So the company’s belated vinced by Mr. Van de Put’s salesgrowthto3%ayear executives hinted Friday. Mondelez is trading reason is marketing. He explanation was a step in the plan to get there, sending compared with 0.9% growth Mondelez is helped by its around 17 times forward wants investors to become right direction. Broadcom shares down 2.2% on Friday. in 2017 and a growth rate exposure to emerging mar- earnings. While below its av- “brand ambassadors.” Chief Executive Hock Tan Mondelez executives said expected near 2% this year. kets, where health concerns erage multiple of 20 times A taste for whisky rather said CA’s customer base gives they plan to spend more on But the company acknowl- are less of an issue. In the over the past five years, that than rapid returns is certainly Broadcom a new opportunity sales and marketing and also edged a gaping hole in its first half of the year, the still isn’t particularly cheap. an investment requirement. A to sell its chip products. distribution and logistics ca- portfolio where healthy company got 38% of revenue Vague pledges that the com- fully mature Lakes Distillery Investors seemed recep- pabilities over the next few snack options should be. Mr. from these markets and it pany will engineer a new product won’t be ready until tive, sending Broadcom’s years. They also said they Van de Put said consumers expects them to grow at a growth phase won’t be 10 years after distilling began shares up Friday. Ed Snyder plan to invest more in the are snacking more often, a mid-single-digit rate going enough to bring that valua- in late 2014. For better or of Charter Equity—one of company’s broad portfolio of positive trend for Mondelez. forward compared with low- tion back. The burden is on worse, whisky may be the ul- several analysts who down- local brands in emerging But they also are avoiding single-digit growth for de- Mondelez to deliver. timate long-term investment. graded the stock following markets. These efforts sugar. Acquisitions may be veloped markets. —Aaron Back the CA announcement—said the strategy Mr. Tan described will require either Broadcom or its software customers to partner with an Under Armour Deserves a Discount to Its Competitors equipment maker. “Neither A glance at its stock this In July, the company re- Armour is becoming more small base. To boost over- of those two approaches will year suggests Under Ar- Under Performer ported a net loss that wid- like Reebok than Nike. seas growth enough to offset be quick or easy, but it isn’t mour has returned to the Under Armour's North America ened to $95.5 million from The company’s sales- its slowdown at home, Under likely to matter near-term growth trajectory that sales change per quarter $12.3 million a year previ- growth guidance for the year Armour will have to beat given the savings and dives- marked its rise as an ath- 15% ously. Revenue rose 8% to has fallen to an anemic other, healthier companies, titures that can be squeezed letic-wear giant. Shares are $1.17 billion, but that was rangeof3%to4%.Mean- like Nike and Lululemon. out of CA in the next 18 up 40% after finishing 2017 10 mostly due to an increase in while, the company has been Mr. Plank has claimed that months,” Mr. Snyder wrote in as one of the worst perform- 5 off-price sales. As the com- cash-flow negative for years. he is focused on turning a report Friday. ers in the S&P 500. 0 pany’s sales to Dick’s Sport- Another problem is inven- around the company, not on Broadcom’s shares, meaning Goods The reality is the rebound –5 have declined, it tory levels, a legacy of the his other pursuits with Plank while, remained just under 11 has been driven more by the has entered Kohl’s and other –10 company’s years of unabated Industries. But analysts are times forward earnings even strong economy than a turn- discount retailers, like DSW growth. Inventory was ex- less than convinced. While with Friday’s gains. That is a around at Under Armour, 2016 ’17 ’18 and Famous Footwear. pected to rise by 20% in the the company talks a good discount of nearly 23% to the which still hasn’t addressed Source: the company When Dick’s reported a second quarter but was only game on earnings calls about PHLX Semiconductor Index. its underlying problems. THE WALL STREET JOURNAL. drop in sales, CEO Ed Stack up 11% year over year in part elevating the brand, it isn’t A risky, counterintuitive deal Those include persistent dis- partly blamed Under Ar- because of increasing off- actually taking the steps to may rightly keep the stock counting, slowing revenue tries, in 2017. Analysts worry mour’s decision to sell more price sales. That cycle of dis- do so. from fetching a premium for growth, churn in its execu- that he is more interested in to discount stores. In the counting likely will continue. As Nike sells through at a while. But at this level, giv- tive offices and a leader who liquor distilling and race- long term, that move hurts The company is touting its full price, Under Armour has ing Broadcom’s gambit the seems distracted. CEO Kevin horse breeding than in fixing Under Armour’s ability to rapid growth in international consigned itself to the sale benefit of the doubt isn’t ter- Plank opened a private in- Under Armour’s flagging op- sell at full price. Analysts markets, up 28% in the past aisle of Kohl’s. ribly risky. vestment firm, Plank Indus- eration. have suggested that Under quarter, but that is from a —Elizabeth Winkler —Dan Gallagher JOURNAL REPORT | A MONTHLY ANALYSIS

© 2018 Dow Jones & Company. All Rights Reserved. Follow THE WALL STREET JOURNAL. Monday, September 10, 2018 | R1 The Experts Online at INSIDE wsj.com/experts SAVING FOR RETIREMENT Ask Encore: The 4% Rule Is Just a Starting Point Columnist Glenn Ruffenach discusses whether that is still the ‘safe’ number to withdraw annually from your savings in retirement R2 THE FIDUCIARY FUNDAMENTALS OF INVESTING ‘Value’ Stocks Aren’t What They Used to Be RULE IS DEAD. Some believe that price-to-book value ratio—the usual way for investors to evaluate such stocks—has lost its relevance What’s an Investor R4 REAL-ESTATE INVESTING As REITs Rebound, Some Sectors Stand Out To Do Now? Office REITs are showing promise, as demand for top-quality space is strong in some cities R6 REITs as ETFs The pluses and minuses of real-estate investing via ETFs R6

FIXED-INCOME INVESTING The Best Moves to Make In an Inverted Yield Curve A George Mason professor on what market history says about how investors should proceed if an inversion actually happens R7

ALTERNATIVE INVESTMENTS Hedge Funds Are on the Way To a Bad 10-Year Streak They continue to lag behind the stock market, despite a record level of assets. But a few managers are delivering. R8

SAVING FOR COLLEGE How to Get the Most Financial Aid Our question-and-answer column addresses the latest tips, including why you shouldn’t buy life insurance as a way to shelter assets R8

BEST BET/WORST BET Reid Hoffman on the Investment He Missed The co-founder of LinkedIn discusses his best and worst investment decisions, including BY LISA BEILFUSS The decision was a final blow NAMES CAN BE CRUCIAL the PayPal touchdown—but his to a rule that the financial-ser- regret at punting on Stripe vices industry fought, saying it R10 With IT IS A TRICKY TIME to be work- would make advice more costly, Financial pros can go by a ing with an investment profes- and that the Trump administra- number of titles: There is wealth NEWS CHALLENGE regulations sional. tion had put under review for re- manager, financial planner, broker, All About Fafsa in flux, it’s a Regulation is in flux, and dif- vision or repeal. financial adviser—as well as “ad- Take our quiz to test your ferent types of professionals are The Securities and Exchange visor” with an “o”—and more. The smarts on college financial aid, confusing time held to different standards when Commission, meanwhile, has difference is sometimes semantics, namely that data-filled form it comes to giving advice and been working on its own inves- but it is often much more. WSJ.com/FundsETFs to work with recommending products. So, it tor-protection measure. The For one, financial advisers, reg- investment can be hard to know exactly what agency’s version may wind up ulated by the SEC, have for de- you’re paying for. replacing the fiduciary rule, cades been held to a fiduciary professionals Muddying the waters, a U.S. though it is shaping up to be standard, meaning they have to SCOREBOARD Circuit Court in June threw out less restrictive for brokers, and put clients’ interests before their the Labor Department’s fiduciary consumer advocates say that it own. The requirement traces back August 2018 fund performance, total rule, an Obama-era regulation would do little to raise the stan- to the stock-market crash of 1929 return by fund type. More on R2. that sought to curb conflicts of dard of care that is currently and subsequent Depression, which interest in financial advice that required. Congress in part blamed on U.S. Intl. Bonds stocks* stocks* (intmd.) the Obama administration said Here are a few things inves- abuses in the securities industry. cost American families $17 billion tors should know as they navi- Brokers are regulated by the a year and a percentage point in gate their financial relation- Financial Industry Regulatory annual returns. ships. Pleaseturntothenextpage 3.1% –1.8% 0.5% *Diversiﬁed funds only, excluding sector and regional/country funds Source: Lipper OLIVER MUNDAY

1 Reflections on the 9/2 -Year-Long Bull Market

BY JOHN A. PRESTBO deep dive in 2007-09 was s-l-o-w. tion activity and extravagant share- This frustrated Wall Street, but it The Longest Run buyback campaigns by many compa- 500 % prevented the Dow from racing too Bull markets in the Dow 1921–29 nies, the numbers of both listed ALL HAIL THE tenacious bull market. far ahead of the economy. Many peo- Jones Industrial Average, stocks and shares outstanding have Today marks 9½ years of generally ple were scared of the stock market, 1900 to the present; length shrunk over the past decade. As a re- rising stock prices—up 296% so far in and they toe-dipped back in only af- measured in months sult, the money that investors poured the Dow Jones Industrial Average, or ter the market rebounded convinc- into the market had a greater upward 406% including dividends. This pro- ingly. 400 influence on prices than it otherwise longed upturn signified the end of The Dow’s recovery to its previous would have. 1932–1937 the 2007-09 recession in which the high of 14087.55, set in 2007, required The stock market, of course, didn’t Dow plunged 54% and some other 52 months, or more than four times go straight up. It never does. It mean- broad-market indexes fell even fur- as long as the average full restora- ders above and below each previous ther. tions of the previous four bear mar- 2009–18 day’s close as some investors put This bull run is far and away the kets. However, this wasn’t surprising 1990–98 300 money in and others take it out. It Dow’s longest, at 107 months through in the wake of a market collapse that was to make longer-term trends more January’s record close of 26616.71— was 191% worse than the average of 1982–87 visible that Charles H. Dow devised and sitting at 115 months counting those previous four bear markets. stock indexes in the first place, back the trading since then. If the bull run in the 1880s and 1890s. The easy Fed 1949–56 extends to a full 10 years by March 9, 200 Occasionally the market will dip or it may surpass the stupendous per- Meanwhile, money was cheap and spurt over several days or weeks as it centage gains posted in the 1920s (up easy. To fight the recession, the Fed- “corrects” or “rallies.” By my count, 495.2% over 96 months) and eral Reserve dropped interest rates to 1903–06 there were seven corrections of 10% mid-1930s (up 371.6% in 56 months). almost zero and flooded the mone- 1942–46 or more over the past 9½ years, in- As the now-retired markets editor tary system with cash. Bonds were 1914–16 cluding one in 2011 of 19.4%. There 2002–07 100 of The Wall Street Journal, I have offering dismal yields, so investors 1907–09 1962–66 Median also were four smaller pullbacks in 1917–19 seen many bull (and bear) markets were forced to take greater risks to 1987–90 the6%to8%range. come and go. To be honest, back in get the returns they needed. For the 1938–38 1974–76 1957–61 1970–73 Age difference 2009 I didn’t suspect the initially most part, this meant buying stocks. 1900–01 1998–00 1978–81 timid recovery would persist so long But when they did, they found A minority of party-poopers argue 1911–12 1966–68 as to become epic. But a few key— fewer stocks to chase and fewer 0 that the market’s double-dip correc- and coincident—factors combined to shares of those stocks available on tions in 2015-16 broke the upward stimulate longevity. the market. Because cheap money 0 12 24 36 48 60 72 84 96 108 120 thrust of the bull that began in 2009. First, stocks’ rebound from the fostered robust merger-and-acquisi- Source: Leuthold Group THE WALL STREET JOURNAL. Pleaseturntothenextpage R2 | Monday, September 10, 2018 THE WALL STREET JOURNAL. JOURNAL REPORT | INVESTING IN FUNDS & ETFS

ASK ENCORE | GLENN RUFFENACH Investors Move On From Fiduciary Rule

The 4% Rule Is Continuedfromthepriorpage Just a Starting Point Authority, or Finra, the secu- Unclear Rulebook Cost Confusion rities industry’s self-regula- Which of the following is true of How do you compensate your financial adviser? (Some 43% of Also: What to do when a financial adviser tory body. They must provide your financial adviser? investors in the latest survey believe their service is free or aren't sure wants to ‘move things around’ what the agency describes as how they compensate their advisers.) “suitable” investment ad- Adviser must act in vice—short of the fiduciary my best interest 100% care required of their adviser 73% Commission-only Is 4% still the going number for the amount considered counterparts. “safe” to withdraw from savings in retirement? And is there a Where things get tricky is 80 Adviser's or firm's interests “magic” number that should make me feel comfortable about that some financial profes- may come first retiring? I’m 64½. sionals are dually registered, Fee-only and some have professional 11% 60 This question gives me a chance to highlight several re- designations that carry resources about tapping a nest egg, one of the most important quirements trumping the stan- Adviser sometimes must serve Mix of fees 40 and difficult tasks that retirees face. dards required by regulators. my best interest, but not always and commissions Based on pioneering research in the early 1990s by William For example, a broker who’s 6% Bengen, then a financial planner in California, the so-called 4% also a certified financial plan- Free rule states that retirees can pull about 4% annually from their ner has to serve as a fiduciary, 20 nest egg (a figure Mr. Bengen eventually set at 4.5%), with a when doing financial planning, Idonotknowwhatisrequired of my adviser high probability that their savings will last 30 years. to maintain the designation. Unsure 0 But Mr. Bengen, now retired, never has claimed that his The best way to know 10% findings are right for every retiree. He started with a specific whether your adviser is a reg- 2011 ’12 ’13 ’14 ’15 ’16 ’17 set of assumptions: a retirement lasting (again) 30 years, with istered investment adviser, Source: Cerulli Associates, survey of 8,000 investors THE WALL STREET JOURNAL. savings in a tax-deferred account, and nothing left for heirs. broker or both is to search Change just one of those parameters, and your “safe” with- BrokerCheck, a database main- brokers don’t have to disclose keep your fees from being financial pictures might pay drawal rate may differ. tained by Finra. An individual’s conflicts the way they did un- way higher than they should more to get more service, but So, to answer your first question, the 4% rule (“guideline” profile will denote his or her ti- der the rule. Observers say po- be,” says Barbara Roper, di- even they should be wary of would be a much better word) is still a good starting point when tle and regulatory overseer. tential rules from the SEC re- rector of investor protection paying much more than 1%, thinking about tapping your savings. But that’s all it should But industry professionals quiring that brokers serve at the Consumer Federation Ms. Roper says. be—a starting point. There are many techniques to help you pull and consumer advocates say clients’ best interest may em- of America. “That’s a hole you have to funds from a nest egg, most of them tied to the idea that with- investors should confirm any phasize disclosing conflicts “The fee-based accounts at dig out of,” she says, refer- drawal rates should be “dynamic,” or change each year in re- information with their adviser. over mitigating them. brokerage firms still incorpo- ring to the long-term effect sponse to changes in the markets. (More on this in a moment.) Even better, the experts say: For now, the best way to rate the conflicts of the bro- of fees on investment returns. As for a “magic” number, it varies by person. Depending on Investors should ask a finan- understand conflicts and con- ker-dealer model,” Ms. Roper By the same logic, paying your circumstances (the size of your savings, investment fees, cial professional to put in straints is to ask your broker, says, such as revenue derived commissions doesn’t neces- other sources of income, your life expectancy, spending pat- writing whether he or she is a and to have him or her explain from fund companies, propri- sarily mean you don’t have a terns, etc.), you might be comfortable with a withdrawal rate fiduciary in their particular re- product selections. etary products and incentives fiduciary. In the spirit of the of, say, 4.5%—or something closer to 3%. Of course, the lower lationship. “Never own something you meant to encourage broker obligation, investment pro- your withdrawal rate, the safer. William Bernstein, the author of don’t understand,” says Patti behavior. fessionals are expected to several books about investing, puts it this way: “Two percent is Houlihan, who heads the advo- Ms. Roper encourages in- evaluate on an individual ba- bulletproof, 3% is probably safe, 4% is pushing it, and at 5%, LOCATION MATTERS cacy group Committee for the vestors to ask their financial sis what type of model is you’re eating Alpo in your old age.” Fiduciary Standard. “If you professionals for detailed fee best. Now, some resources: When it comes to which can’t understand [a product] breakdowns. For example, is a Options and mechanics. If you plan to tap your savings standard of care is required after reading a few pages on 1% advisory fee all-inclusive, Ms. Beilfuss is a Wall Street on your own, two resources, in particular, can be a big help. of an investment profes- it, you shouldn’t be buying it,” or is that separate from un- Journal reporter in Karsten Jeske, a chartered financial analyst and author of the sional, where he or she works she says, suggesting investors derlying product fees? Inves- New York. Email her at Early Retirement Now blog (earlyretirementnow.com) has writ- matters. Advisers who are walk away from anything that tors with more complicated [email protected]. ten a 28-part (and counting) series about safe withdrawal held to a fiduciary standard is confusing or sounds too rates. In short, Mr. Jeske is no fan of the 4% rule; rather, his must choose products that good to be true. articles look closely at, and make a compelling argument for, are in the best interest of the withdrawal strategies that are tied to “changing economic and client. But what products an financial conditions.” adviser can pick varies from FEES DON’T MONTHLY MONITOR | WILLIAM POWER Similarly, check out “Liv- firm to firm. NECESSARILY MEAN Withdrawal Rates ing Off Your Money” by Mi- For example, at stand-alone ‘BEST INTEREST’ chael H. McClung. This valu- Asked how much of their savings investment advisories—-those U.S.-Stock Funds Rose able book, although they can withdraw safely each that aren’t connected to a somewhat technical, focuses year in retirement, surveyed bank or brokerage—advisers Many investment advisers, 3.1% in August, Adding on “systemic withdrawals”— preretirees* said: typically have access to the already required to act as fi- how to generate sustainable universe of investment prod- duciaries, charge investors a To Their Global Lead Pct. of preretirees income in retirement. To that ucts, including the cheapest percentage of their assets un- who said they can ...this percentage end, Mr. McClung patiently index funds. Some brokers at der management. Doing so safely withdraw... of their savings examines a number of strat- firms connected to banks do eliminates commissions, which egies for investing your sav- In the stock-market olympics, Americans won the medals this 23% 4% or less too, but not always. Some can cause conflicts of interest ings, pinpointing a with- firms have house funds and lu- by pushing an adviser to rec- time. 28 5% to 9% drawal rate, and pulling crative partnerships with fund ommend one product over U.S.-focused stocks, and the mutual funds and exchange- funds from your nest egg. traded funds that invest in them, pulled away from the rest of the 15 10% to 14% companies, and their brokers another to the detriment of His website (livingoffyour- have more limited menus of the client. world in August. At a time when trade disputes were rattling 9 15% to 24% money.com) includes a com- investment options from After the fiduciary rule many global investors, leading to a retreat in stock markets out- panion spreadsheet. side the U.S., the continued strength in U.S. corporate earnings 4 25% to 49% which to choose. was unveiled—and then went Guaranteed income. If To understand any con- into temporary effect—many and upbeat economic data benefited U.S. markets. 3 50% or more you have a high level of straints and incentives an in- brokerages accelerated mov- The result was that the average U.S.-stock fund registered a guaranteed income in retire- total return of 3.1% for August, according to Thomson Reuters 18 Don't know vestment adviser might have ing clients toward fee-paying ment—Social Security, a pen- in recommending products, accounts from commission Lipper data. These U.S.-focused funds are now up 9.3% for the sion, an annuity—you proba- year to date after having risen 18.3% for all of 2017. *Age 40 and older with a household income consumer advocates suggest accounts. They said it made of at least $100,000 bly can pull more from your checking firms’ securities dis- compliance with the new reg- It was a different story across the oceans. International-stock Source: New York Life savings each year than peo- closures. Advisory firms regulation easier, because charg- funds were down 1.8% for August and are now off 2.5% so far THE WALL STREET JOURNAL. ple with smaller amounts of ulated by the SEC have to ing commissions under the fi- this year. such income. That’s the spell out conflicts of interests duciary rule would require In the U.S., tech stocks in particular were strong. As a result, point made by David Blanchett at researcher Morningstar Inc. in those. disclosures and contracts that several Lipper fund categories had a robust month: Science and and Mike Piper, who writes the Oblivious Investor blog. See Mr. With the Labor Depart- executives said were too technology funds were up 5.4% (and now nearly 16% so far this Blanchett’s thoughts about this in the Journal of Financial ment’s fiduciary rule dead, onerous and costly. year), and health/biotechnology was up 5.5% (and 18% for the Planning (go to onefpa.org and search for: Impact of Guaran- Fee accounts are regulated year). teed Income) and Mr. Piper’s take on safe withdrawal rates at FUND RESULTS by the SEC, meaning once Funds that focus on small-capitalization stocks—which are less obliviousinvestor.com. (Search for: safe withdrawal rates.) you’re in one, the adviser exposed to global turmoil, including trade disputes—continue to Numbers vs. lifestyle. For the moment, let’s put aside Lipper’s A-to-Z needs to act as a fiduciary. But drub other U.S. categories. Small-cap growth funds rallied 8.2% in numbers and consider how your lifestyle might affect your monthly fund that doesn’t mean being put the month and are now up nearly 23% for the year. Small-cap withdrawal rate. WSJ listings are free into one was actually in your fund managers have been dominating the list of top-performing Darrow Kirkpatrick, who writes the Can I Retire Yet? blog .COM at WSJ.com/ best interest. stock pickers. (caniretireyet.com), has come up with a Retirement Flexibility FundsAnalysis. A fee account “doesn’t Bond funds gained on average in August, as some investors Scale that uses non-numeric factors to help would-be retirees sought safety. Funds focusing on intermediate-maturity, invest- determine whether their particular withdrawal rate should be ment-grade debt (the most common type of bond fund) were up closer to 3% or 5%. Some examples: Could you return to work 0.5%, shaving their year-to-date decline to just over 1%. in your original career in the first four years of retirement, if necessary? Do you have the skills to start a business? Could you 1 Mr. Power is a Wall Street Journal news editor in downsize to reduce housing expenses? There are 12 questions in The Bull at 9 / South Brunswick, N.J. Email him at [email protected]. all. (At his website, search for: Retirement Flexibility Scale.) 2 Back to Bengen. Finally, William Bengen, the aforemen- Continuedfromthepriorpage In 2000-02, for example, in- tioned father of the 4% rule, spoke earlier this year with the They insist that the current vestors soured on the manic American Association of Individual Investors. In a lengthy inter- bull market isn’t in its 10th buying of dot-com stocks that SPOTLIGHT | ISHARES U.S. AEROSPACE view, he explained how his withdrawal method works and why year but rather began on Feb. occurred in the late 1990s. he still has a great deal of faith in his research. The biggest 12, 2016, and thus is only 2½ Some of those companies had threat to his recommendations? A sustained period of high in- years old. no real operations to support flation, he says. (And not a lengthy period of low returns, as Of course, the conventional them. Investors decided that MILITARY SPENDING some critics of Mr. Bengen’s work have suggested.) Go to definitions of a correction be- the mania had lifted most aaii.com/journal and search for: Bengen. ing a drop of 10% to 20% and a stocks to overly expensive lev- BOOSTS AN ETF Of course, all of the above raises the question: Should you bear market requiring a retreat els and that prices weren’t sus- choose a withdrawal rate, and how to pull the necessary funds of 20% or more are just rules tainable. They bailed out, tak- The largest aero- investors have from savings, on your own? Again, this is one of the most im- of thumb, not scientifically ex- ing the market down 38% with space-and-defense viewed as a tailwind portant financial steps you will take in retirement—and if you err plained calibrations. Some ana- them. exchange-traded for the sector, says early in the process, the consequences could be ruinous. This is lysts have complicated matters fund has surged over Mr. Nagrath. a moment when a good financial adviser can be invaluable. by concocting “rules” about No promises the past year, However, Mr. Na- though analysts say grath points to fears iii how much the Dow must rise This bull market will end, over how many days following too, though nobody knows why global trade disputes about what growing I get calls from my financial adviser when the market fluctu- a decline to determine if a bull or when. There are plenty of are tempering optimism for trade conflicts might mean for ates, and he proposes moving things around (at no fee). Your market is dead or still running. possible reasons, including the sector. the civil aerospace industry, thoughts? How much “moving” is good, or bad, for me? This is what’s behind the global trade war, regular war, The $5.73 billion iShares with companies like Boeing party-pooper argument. the midterm elections, rising U.S. Aerospace & Defense increasingly reliant on the in- Good questions. First, your adviser shouldn’t necessarily be Bull markets have no interest rates, a weakening ETF (ITA) follows a market- ternational market. Boeing, “moving things around” when markets “fluctuate.” Markets al- “meaning” beyond the obvious: housing market, high-price cap-weighted index of U.S. for example, has estimated ways are moving higher and lower, and a good financial plan Stock prices are rising. Since stocks (again) and so forth. aerospace and defense com- that Asia-Pacific will soak up anticipates this. Indeed, the whole point of having a plan that those prices roughly reflect an These and other concerns al- panies, including giants Boe- 40% of airplane deliveries allows you to sleep comfortably at night is not to tinker with it upward trend in corporate ready are influencing some ining Co., Lockheed Martin from 2018 to 2037. simply because markets happen to be fluctuating. earnings, which in turn depend vestors, but as yet not enough Corp. and United Technolo- Global spending on both In short, a good financial adviser is going to be trading in upon economic conditions, bull to hobble the bull. gies Corp. It has returned aerospace and defense is con- your account as seldom as possible—ideally, once or twice a markets confirm what we’re So, if you’re of a mind to more than 10% year-to-date tinuing to rise, which could year, at most, notes Jason Zweig, who writes The Wall Street experiencing—that financial celebrate the historic bull mar- through August, and almost underpin ITA in the coming Journal’s The Intelligent Investor column. well being has come to pass. ket, do so in appreciation of 23% over the past 12 months. years, says Neena Mishra, di- Second, I strongly suspect that there is a fee, of some sort, However, the stock market what it already has bestowed The earnings of many rector of ETF research at when your adviser “moves things around.” The worst example is about what will happen upon you. It makes no prom- companies in the index have Zacks Investment Research. of this is “churning,” the constant selling and buying of invest- next, which raises the ques- ises for tomorrow. been strong recently, driven However, “there are concerns ments to generate commissions. Again, your adviser might be tion: Does this spectacularly by robust global demand in that a widening fiscal deficit telling you that there are “no fees” when he or she sells and long bull market say anything Mr. Prestbo a former Wall both the civil aerospace and could impact military spend- buys. But I would take that with a grain of salt and look closely about what’s coming? There is Street Journal and Dow Jones military domains, says Dhruv ing [in the U.S.] in the early at how fees work with your holdings. an adage on Wall Street that Indexes editor, is an adviser Nagrath, U.S. iShares invest- 2020s,” she says, while trade bull markets don’t die of old to MarketGrader Capital, ment strategist. disputes or oil-price increases Mr. Ruffenach is a former reporter and editor for The Wall Street age. Rather, something hap- which chooses components In the U.S., the Trump ad- could affect the commercial Journal. His column looks at financial issues for those thinking pens to change investors’ ex- of the Barron’s 400 Index. ministration has made mili- side. about, planning and living their retirement. Send questions and pectations for the not-too-dis- He can be reached at tary spending a priority, which —Gerrard Cowan comments to [email protected]. tant future. [email protected]. R4 | Monday, September 10, 2018 THE WALL STREET JOURNAL. JOURNAL REPORT | INVESTING IN FUNDS & ETFS ‘Value’ Stocks Aren’t What They Used to Be Some believe the usual way to evaluate such stocks—the price-to-book-value ratio—should be sent to the graveyard

BY MARK HULBERT which value (the 50% of stocks requires that the investment with the lowest price-to-book be treated as an expense ratios) beat growth by 4.6 an- rather than as an asset. But if IS “VALUE” DEAD? Or have we nualized percentage points. the company buys an intangi- just been measuring it in the There also can be little ble asset instead of generating wrong way? doubt that intangibles have it internally, then GAAP calls It’s an urgent question, be- grown in importance. Accord- for it to be listed as an asset cause value stocks—when de- ing to Ocean Tomo, an intel- on its balance sheet. fined according to the tradi- lectual-property consulting “Every aspect of the finan- tional criterion, low price-to- firm, 84% of the S&P 500’s cial report is adversely af- book-value ratios—have lagged market capitalization now fected by this dated, indus- behind growth stocks for at comes from intangible assets, trial-age treatment of

least a decade now. And up from just 17% in 1975. intangible capital,” Prof. Lev OLIVER MUNDAY though value stocks in the argued in his 2016 book, “The past have come roaring back Losing relevance End of Accounting and the to-book ratio may still be rele- the source of the deterioration has lost much of its relevance. after going through similarly Baruch Lev, a professor of Path Forward for Investors vant comes when using it to is that book value has come to The other major component long periods of lagging, some accounting and finance at New and Managers,” co-written forecast the S&P 500’s return be dominated by one of its of book value is retained earn- researchers are questioning York University, is one of with Feng Gu, a professor of over the subsequent 10 years. two main components. ings, and Prof. Ball says that a whether they will do so again. those arguing most forcefully accounting and law at the Uni- Its record since 1975 has been This offending category is ratio of price to retained earn- That’s because a growing that the increasing signifi- versity at Buffalo. better than it was over the “contributed capital,” or the ings per share remains as ef- percentage of companies’ mar- cance of intangible assets is To be sure, not everyone is prior five decades. sum of all of a company’s past fective an indicator as ever in ket value now comes from in- the leading cause of book ready to write the price-to- equity issuances, less share re- predicting stock returns. His tangible assets—things like book ratio’s obituary. In an in- Book value’s problems purchases. Though a ratio of recommendation to investors patents, trademarks and re- terview, Kent Daniel, a finance If the price-to-book ratio is price to contributed capital who have been relying on the search-and-development ex- Little ‘Book Value’ professor at Columbia Univer- still somewhat effective, then per share has never had much price-to-book ratio is to focus penditures—that are either ig- Percentage of S&P 500 market sity and a former co-chief in- why has value lagged behind predictive value, this didn’t af- instead on this modified ratio nored in the book-value value represented by intangible vestment officer at Goldman growth in recent years? fect the effectiveness of the based on retained earnings. calculation or reflected incon- assets Sachs, acknowledges that One answer comes from a price-to-book ratio so long as sistently. Therefore, the re- GAAP’s treatment of intangible study set to appear in the contributed capital repre- Mr. Hulbert is the founder of searchers say, the price-to- 90% assets leaves much to be de- Journal of Financial Econom- sented a small share of book the Hulbert Financial Digest book ratio has lost its 80 sired. But he says the price- ics. Ray Ball, an accounting value, Prof. Ball says. But as it and a senior columnist for relevance. 70 to-book ratio has always been professor at the University of has grown to be a larger MarketWatch. He can be If they are right, we can’t an imperfect and noisy mea- Chicago and a co-author, says share, the price-to-book ratio reached at [email protected]. 60 expect stocks with the lowest sure of a firm’s value. For ex- such ratios to reassert their 50 ample, book value has never How the Largest Funds Fared Data provided by historical dominance over 40 “captured the value of a firm’s Performance numbers are total returns (changes in net asset values with reinvested distributions) as of stocks with the highest ratios. growth prospects at all.” So its 30 Aug. 31; assets are as of July 31. All data are final. And it may call for using a failure to fully and accurately new measure that more accu- 20 reflect the value of intangible Stock Mutual Funds and ETFs rately measures value, once 10 assets doesn’t necessarily Total Return (%) again allowing investors to 0 mean that it isn’t able to do a Assets Annualized feel comfortable about follow- decent job differentiating be- Fund Ticker ($ billions) August 1-year 3-year 5-year 10-year ing a value strategy. 1975’85 ’95 2005 ’15 tween underpriced and over- Vanguard TSM Idx;Adm VTSAX 725.83 3.5 20.3 15.9 14.2 11.0 What is clear is that value Source: OceanTomo priced stocks. Vanguard 500 Index;Adm VFIAX 433.72 3.3 19.6 16.1 14.5 10.9 as a stock-picking style has THE WALL STREET JOURNAL. In fact, Prof. Daniel says Vanguard Tot I Stk;Inv VGTSX 356.43 –2.2 3.1 8.3 5.8 3.6 been a laggard in recent years. some researchers have found SPDR S&P 500 ETF SPY 271.67 3.2 19.5 16.0 14.4 10.8 Over the past decade, growth value’s loss of relevance. He that the book-to-value ratio Vanguard Instl Indx;Inst VINIX 231.56 3.3 19.6 16.1 14.5 10.9 stocks (as presented by the says that the accounting actually does a better job dif- American Funds Gro;A AGTHX 193.98 2.3 23.5 17.3 15.6 10.9 50% of stocks with the highest treatment of intangible as- ferentiating among companies American Funds EuPc;R6 RERGX 167.61 –2.4 3.6 8.8 7.8 N.A. price-to-book ratios) beat sets—under GAAP, or generally that have spent the most on Fidelity 500 Idx;Pr FUSVX 159.13 3.3 19.6 16.1 14.5 10.8 accepted accounting princi- value by 1.9 annualized per- R&D than with firms that iShares:Core S&P 500 IVV 152.64 3.3 19.6 16.1 14.5 10.8 centage points, according to ples—is both outdated and in- spend the least. Investment in American Funds Bal;A ABALX 132.13 0.8 9.9 10.7 9.9 8.7 data from Dartmouth College consistent: When a company R&D, of course, is one of the Prof. Kenneth French. That’s a invests in developing patents, most significant categories of Fidelity Contrafund FCNTX 130.95 4.5 25.6 18.4 16.7 12.2 huge reversal from the previ- its brand or efficient business intangible assets. Vanguard Dev Mkt;ETF VEA 110.89 –1.9 4.5 8.0 6.2 4.1 ous eight decades, during processes, for example, GAAP Another clue that the price- American Funds Inc;A AMECX 109.85 0.1 7.0 9.3 8.2 7.7 American Funds Wash;A AWSHX 107.30 1.6 16.6 15.1 12.8 10.0 American Funds CIB;A CAIBX 106.31 –1.1 1.8 6.4 6.1 5.4 Tracking Exchange-Traded Portfolios Vanguard Wellington;Adm VWENX 104.97 1.1 10.3 10.6 9.6 8.6 Performance figures are total returns for periods ended Aug. 31; for largest exchange-traded funds and Vanguard Md-Cp Idx;Adm VIMAX 100.69 2.5 16.5 12.6 12.8 10.9 other portfolios, ranked by asset size. American Funds FInv;A Assets Volume Expense Launch Performance (%) ANCFX 100.64 0.7 15.5 15.7 13.8 9.9 Fund Symbol ($ billions) (000s) ratio date August YTD 1-year American Funds CWGI;A CWGIX 100.40 –1.3 8.9 10.4 9.2 6.8 SPDR S&P 500 ETF SPY 274.95 64,563.9 0.09 01/22/93 3.2 9.8 19.5 American Funds ICA;A AIVSX 97.07 0.4 15.3 13.9 12.7 9.6 iShares Core S&P 500 ETF IVV 164.45 4,979.4 0.04 05/15/00 3.3 9.9 19.6 Vanguard Sm-Cp Idx;Adm VSMAX 92.97 4.5 23.8 15.2 13.1 11.4 Vanguard Tot Stk Mkt Idx ETF VTI 105.75 2,534.8 0.04 05/24/01 3.5 10.4 20.3 Vanguard EM St Idx;ETF VWO 84.52 –3.5 –2.6 9.4 4.7 3.0 Vanguard 500 Index ETF VOO 99.86 643.2 0.04 09/07/10 3.3 9.9 19.6 American Funds NPer;A ANWPX 84.38 1.4 14.8 13.9 12.3 9.4 Invesco QQQ QQQ 73.96 28,249.8 0.20 03/10/99 6.0 20.3 28.8 Vanguard Gro Idx;ETF VUG 82.48 4.7 23.4 17.3 16.2 12.0 iShares MSCI EAFE ETF EFA 71.23 30,485.4 0.32 08/14/01 –2.0 –2.3 4.3 Franklin Cust:Inc;A FKINX 78.16 –0.4 4.4 7.7 5.6 6.5 Vanguard Developed Markets Idx ETF VEA 70.19 10,313.7 0.07 07/20/07 –1.9 –2.4 4.5 Dodge & Cox Stock DODGX 73.64 1.7 18.1 15.6 13.6 10.2 iShares:MSCI EAFE ETF Vanguard Emg Mkts Stk Idx ETF VWO 59.62 17,517.2 0.14 03/04/05 –3.5 –7.6 –2.6 EFA 72.94 –2.0 4.3 7.0 5.6 3.6 Vanguard Value Idx;ETF iShares Core MSCI EAFE IEFA 58.38 7,584.2 0.09 10/18/12 –1.8 –2.0 5.1 VTV 71.97 2.0 16.3 14.7 12.8 9.8 Vanguard Ext Mk Id;Adm iShares Core US Aggregate Bond ETF AGG 56.28 3,308.7 0.04 09/22/03 0.6 –1.0 –1.1 VEXAX 68.05 4.5 23.2 14.9 13.1 11.3 Vanguard PRIMECAP;Adm VPMAX 67.46 3.1 27.0 20.4 18.3 12.9 iShares Core S&P Mid-Cap ETF IJH 50.63 1,223.3 0.07 05/22/00 3.2 8.6 19.9 American Funds AMCP;A iShares Core MSCI Emerging Markets IEMG 49.08 21,521.4 0.14 10/18/12 –2.7 –7.2 –0.5 AMCPX 66.49 2.5 23.6 15.0 14.2 11.8 Invesco QQQ Trust 1 QQQ 65.98 6.0 28.8 22.6 21.2 16.1 iShares Russell 2000 ETF IWM 48.75 11,696.3 0.20 05/22/00 4.3 14.3 25.4 Dodge & Cox Intl Stock DODFX 61.73 –4.1 –2.3 5.8 5.3 4.3 iShares Core S&P Small-Cap ETF IJR 48.03 3,313.7 0.07 05/22/00 4.9 18.3 32.5 Vanguard RE Idx;ETF VNQ 60.79 2.5 4.6 9.0 10.0 7.8 iShares Russell 1000 Growth ETF IWF 45.07 820.0 0.20 05/22/00 5.4 16.3 27.0 iShares:Core MSCI EAFE *Expense charge is a maximum of 8 cents a share †Assets are estimated N.A.= Not applicable, fund is too new. IEFA 58.77 –1.8 5.1 7.9 6.5 N.A. Note: Total returns are based on the change in the net asset values, not changes in market prices. Net asset values can vary from market prices, which First Eagle:Global;I SGIIX 55.67 –0.6 4.5 8.5 6.9 7.5 therefore can reflect a premium or discount to the net asset values. Source: Thomson Reuters T Rowe Price BC Gro TRBCX 55.51 3.9 28.1 20.1 19.0 13.8 Fidelity Tot Mk;Pr FSTVX 55.43 3.5 20.3 15.8 14.2 10.9 Mutual-Fund Yardsticks: How Fund Categories Stack Up T Rowe Price Gro Stk PRGFX 54.68 3.4 22.7 17.9 17.7 13.1 Vanguard Wellesley;Adm VWIAX 53.54 0.6 4.5 7.2 6.7 7.6 Includes mutual funds and ETFs for periods ended Aug. 31. All data are final. Data provided by American Funds Mut;A AMRMX 51.16 1.7 14.2 13.4 11.7 9.7 Perfomance (%) Performance (%) Investment objective August YTD 1-yr 5-yr* Investment objective August YTD 1-yr 5-yr* Vanguard Windsor II;Adm VWNAX 49.07 1.7 15.3 12.4 11.1 9.3 iShares:Core MSCI EmMkts Diversified stock & stock/bond funds World stock funds IEMG 48.89 –2.7 –0.5 11.2 5.0 N.A. MFS Value;I MEIIX 48.79 0.3 9.7 12.0 11.4 9.1 Large-Cap Core 2.6 8.3 17.5 12.7 Global 0.6 3.7 10.8 9.2 iShares:Core S&P Md-Cp IJH 48.36 3.2 19.9 14.8 13.2 11.2 Large-Cap Growth 4.6 16.6 25.2 15.9 International (ex-U.S.) –1.8 –2.5 3.6 5.7 Vanguard Health Care;Adm VGHAX 47.91 4.9 14.3 8.0 15.4 13.6 Large-Cap Value 1.4 4.3 13.9 10.7 European Region –2.3 –1.9 3.2 5.6 iShares:Russ 2000 ETF Midcap Core 2.4 6.5 15.8 10.7 Emerging Markets –3.5 –8.7 –3.0 4.0 IWM 46.43 4.3 25.4 16.2 13.0 10.5 Oakmark Internatl;Inv Midcap Growth 5.5 15.7 25.9 13.4 Latin American –8.7 –13.9 –12.1 –2.6 OAKIX 45.81 –4.9 –3.4 7.6 5.2 7.9 iShares:Core S&P Sm-Cp Midcap Value 1.1 3.6 12.7 10.2 Pacific Region –2.3 –5.7 3.0 8.1 IJR 45.18 4.9 32.5 19.3 15.4 12.4 Fidelity Gro Company Small-Cap Core 3.5 10.4 21.2 11.5 Gold Oriented –11.8 –21.1 –25.4 –6.7 FDGRX 45.14 7.5 31.7 22.7 19.9 15.0 Small-Cap Growth 8.2 22.6 35.0 13.6 Global Equity Income –0.4 0.3 6.2 6.6 Small-Cap Value 2.2 7.7 19.2 10.0 International Equity Income –2.6 –4.5 0.2 3.7 Bond Mutual Funds and ETFs Multicap Core 2.6 7.7 17.0 11.9 Taxable-bond funds Total Return (%) Multicap Growth 5.0 15.7 24.9 14.4 Assets Annualized Short-Term 0.3 0.6 0.6 1.2 Fund Ticker ($ Billions) August 1-year 3-year 5-year 10-year Multicap Value 1.3 3.7 13.3 10.3 Long-Term –1.8 0.4 –1.1 3.5 Vanguard Tot Bd;Adm VBTLX 198.40 0.5 –1.2 1.7 2.4 3.6 Equity Income 1.6 4.7 13.8 10.3 Intermediate Bond –1.1 0.5 –1.1 2.3 Vanguard Tot Bd II;Inv VTBIX 160.39 0.5 –1.3 1.6 2.3 N.A. S&P 500 Funds 3.2 9.6 19.1 13.9 Intermediate U.S. -0.03 0.5 0.4 1.2 PIMCO:Income;Inst PIMIX 113.67 –0.2 1.3 5.5 6.0 9.4 Specialty Divers. Equity 1.5 1.8 5.6 –3.4 Short-Term U.S. –1.1 0.5 –1.1 2.3 Vanguard Tot Itl BI;Adm VTABX 109.97 0.1 2.0 3.2 3.9 N.A. Balanced 1.1 3.0 7.9 7.2 Long-Term U.S. –1.5 0.8 –2.2 2.0 Met West:Total Return;I MWTIX 73.80 0.6 –0.8 1.7 2.6 5.6 Stock/Bond Blend 0.8 2.2 6.7 6.4 General U.S. Taxable –0.6 0.4 –0.1 3.4 PIMCO:Tot Rtn;Inst PTTRX 69.99 0.4 –1.2 2.2 2.8 4.8 Avg. U.S. Stock Fund† 3.1 9.3 18.7 11.3 High-Yield Taxable 1.3 0.6 2.6 4.4 Vanguard Sh-Tm Inv;Adm VFSUX 60.33 0.5 0.2 1.8 1.9 2.9 Mortgage –0.4 Sector stock funds 0.5 –0.6 2.0 Vanguard Int-Tm TxEx;Adm VWIUX 58.63 0.2 0.01 2.3 3.5 3.9 Science & Technology 15.8 World Bond –3.5 5.4 24.0 17.3 –1.7 –2.9 1.6 Dodge & Cox Income DODIX 56.85 0.2 0.03 3.1 3.2 4.9 Telecommunication 1.8 Avg. Taxable-Bond Fund** –0.2 3.2 3.0 7.7 0.2 0.3 2.4 iShares:Core US Agg Bd AGG 55.89 0.6 –1.1 1.7 2.5 3.6 Health/Biotechnology 5.5 18.2 20.8 16.0 Municipal-bond funds Vanguard Sh-Tm Bd;ETF BSV 50.95 0.4 –0.5 0.9 1.1 2.1 Utility 1.0 4.1 2.4 9.0 Short-Term Muni 0.25 0.29 –0.1 0.6 DoubleLine:Tot Rtn;I DBLTX 49.06 0.6 0.2 2.2 3.2 N.A. Natural Resources –2.4 2.4 20.7 –2.6 Intermediate Muni 0.1 0.1 –0.1 2.9 Lord Abbett Sh Dur;F LDLFX 39.96 0.3 1.0 2.2 2.2 4.0 Sector 2.1 3.5 7.7 8.3 General & Insured Muni 0.2 0.2 0.8 4.3 Fidelity US B Id;IP FXNAX 38.89 0.5 –1.2 1.7 2.5 N.A. Real Estate 2.5 3.3 5.3 9.6 High-Yield Muni 2.1 0.4 3.2 6.4 Fidelity Str Adv Cre Inc FPCIX 37.89 0.4 –1.0 2.5 2.9 4.8 American Funds Bond;A ABNDX 37.87 0.5 –1.6 1.6 2.3 3.2 Stock & Bond Benchmark Indexes All total return unless noted Templeton Gl Bond;Adv TGBAX 36.84 –3.7 –2.0 2.5 2.1 5.4 PGIM Tot Rtn Bond;Z Perfomance (%) Performance (%) PDBZX 35.11 0.4 –0.6 3.1 3.8 5.8 Investment objective August YTD 1-yr 5-yr* Investment objective August YTD 1-yr 5-yr* iShares:iBoxx $IG Corp LQD 34.30 0.3 –1.7 3.5 3.9 5.6 Large-cap stocks Stock indexes Vanguard Int-Tm Bd;ETF BIV 32.02 0.8 –2.2 1.8 2.9 4.7 DJIA 2.6 6.7 21.0 14.6 DJ U.S. TSM Growth 5.2 16.1 26.1 16.5 Fidelity Total Bond FTBFX 31.95 0.4 –0.6 2.8 3.2 4.8 S&P 500 3.3 9.9 19.7 14.5 DJ U.S. TSM Value 1.6 4.7 14.4 11.9 Vanguard Int-Tm Inv;Adm VFIDX 28.99 0.7 –1.4 2.6 3.3 5.1 Midcap stocks Taxable bonds JPMorgan:Core Bond;R6 JCBUX 28.74 0.7 –0.8 1.9 2.6 4.2 Vanguard Infl-Prot;Adm S&P MidCap 400 3.2 8.7 20.0 13.3 Barclays Agg. Bond 0.64 –1.0 –1.0 2.5 VAIPX 28.37 0.6 0.5 2.1 1.8 2.9 T Rowe Price New Inc PRCIX 28.32 0.5 –1.1 1.8 2.5 3.9 Small-cap stocks Municipal bonds Fidelity Srs Inv Gd Bd FSIGX 27.21 0.6 –0.5 2.6 3.0 N.A. Russell 2000 4.3 14.3 25.4 13.0 Barclays Muni. Bond 0.3 0.25 0.5 4.1 Vanguard ST Corp Bd;ETF VCSH 26.37 0.5 0.01 1.8 2.0 N.A. Broad stock market International stocks Vanguard ST InPS Idx;Ins VTSPX 26.13 0.5 1.1 1.4 0.7 N.A. DJ U.S. Total Stock Market 3.5 10.4 20.3 14.2 MSCI EAFE†† (price return) –2.2 –4.3 1.6 2.9 Vanguard Ltd-Tm TxEx;Adm VMLUX 25.99 0.1 0.1 1.2 1.5 2.0 Russell 3000 3.5 10.4 20.2 14.3 Dow Jones World (ex. U.S.) –1.9 –3.4 3.6 6.0 iShares:TIPS Bd ETF TIP 24.25 0.7 0.7 2.1 1.8 2.9 *Annualized †Diversified funds only **Excludes money-market funds ††Europe, Australia, Far East Note: For funds with multiple share classes, only the largest is shown. N.A.: Not applicable; fund is too new or data not available R6 | Monday, September 10, 2018 THE WALL STREET JOURNAL. JOURNAL REPORT | INVESTING IN FUNDS & ETFS

ing plays a big role as well for data centers. REITs as an ETF: One data-center REIT experts recommend is Equinix Inc. (EQIX), the world’s largest Pluses and Minuses retail data-center provider by revenue, according to Morn- BY GERRARD COWAN the average ETF in the finan- ingstar. “The company has cial firm’s real-estate cate- caught the tide of cloud com- gory, compared with 1.38% for puting at the right time since EXCHANGE-TRADED funds the average large-blend ETF. birth,” Morningstar analyst that invest in real estate can When REIT ETFs are used Neil Macker writes in a report. be a low-cost way to play the to diversify a portfolio, inves- “Key to its success is the busi- property sector. However, tors should be comfortable ness ecosystem joined by both there are reasons for caution. with returns that vary from magnetic cloud platforms, Real-estate ETFs can con- the broad market, depending such as Amazon and Google, sist of real-estate-investment on how much they invest in which attract other tenants to trusts, or REITs, or a mixture the area, says Rich Powers, Equinix, as well as telecommu- of REITs and stocks of com- head of ETF product manage- nication carriers that offer panies in the property sector. ment at Vanguard, which connectivity services on site.” Some focus on the U.S. mar- runs Vanguard Real Estate ket, while others provide in- ETF (VNQ), the largest U.S. The housing play ternational exposure. They real-estate ETF, with assets

CAITLIN OCHS/BLOOMBERG NEWS As for housing REITs, Mr. generally feature low fees, a of about $33 billion. More An ad, behind the pedestrian, for Boston Properties’ renovated 159 E. 53rd St. in New York. Bohjalian says the number of big advantage over actively than 96% of the fund is in- families in need of homes is ex- managed real-estate funds, vested in REITs, he says. pected to grow in the next says Ben Johnson, director of “These funds have histori- As REITsReturn to Life, three to five years, and de- global ETF and passive strat- cally provided investors with mand will ultimately exceed egies at Morningstar. non-market-correlated re- supply. That bodes well, he Schwab U.S. turns and di- says, for REITs that specialize REIT ETF REITs in the versified in- Some Sectors Stand Out in apartments, manufactured (SCHH), for come housing and single-family rent- one, a $4.84 form of ETFs opportuni- als. Experts also agree that the billion fund don’t react ties,” he adds. Experts think have faded. “Now the concern San Francisco. Demand for rising price of purchasing a with a 5.44% Daniel is about an economic slow- top-quality office space re- single-family home will keep return this like either Prince, head of these flavors look down in the second half,” mains strong in those cities, people in apartments longer, year through stocks or bonds. iShares U.S. especially good which suggests a more benign Mr. Brown says. While there is giving owners the ability to August, Wealth Advi- interest-rate environment, concern about weakness in fi- raise rents. charges ex- sory Product says Steven Brown, senior nancial jobs in those markets, Mr. Brown recommends penses of Consulting, BY DAN WEIL portfolio manager at American he says, “media, telecom and American Homes 4 Rent 0.07%, he says, compared which runs U.S.-focused and Century Investments. technology have good job (AMH). This REIT’s shares cur- with a median of 1.10% for global real-estate ETFs, says rently trade at roughly a 10% the Morningstar real-estate investors have started return- REAL-ESTATE investment Better fundamentals discount to net asset value, he category, excluding ETFs. ing to real-estate ETFs after a trusts are rebounding after “Today we feel good about Rebound says, and the value of its port- Nevertheless, this has been rocky first half. In the first several years of sluggishness. real-estate fundamentals,” Percentage change in the S&P folio is rising. “They can raise a bumpy year for the funds. five months of 2018, he says, The S&P U.S. REIT Index re- says Tom Bohjalian, a portfo- U.S. REIT index for 2018 rents higher than inflation,” he Mr. Johnson says funds in there were about $2.25 billion turned 8.3% for the three lio manager at Cohen & Steers. says, thanks to rising demand Morningstar’s real-estate cat- of outflows from U.S.-listed months ended Aug. 31, outper- Indeed, while expectations for 5% from residents who can’t afford egory (including ETFs) saw real-estate ETFs, and out- forming the S&P 500, which higher interest rates have 0 to buy a home. an average return of 3.63% flows of $116 million in those returned 7.8% over the same eased, he says, the economy through the end of August, listed in other countries. period, notes Amanda Agati, remains strong enough to con- –5 Going to the mall compared with 10.5% for the However, June and July saw co-chief investment strategist tinue fueling demand in hous- –10 Mr. Brown even likes some MSCI USA Index. These “rela- inflows of just under $1.68 at PNC Financial Services ing and a number of other REITs in the retail sector. Store tively lackluster” returns are billion in the U.S. and almost –15 Group. real-estate sectors. closings are now running 50% partly attributable to rising $2.6 billion internationally. The start of 2018 didn’t “While supply is higher than JFMAMJJA S to 60% below 2017 levels, he interest rates, Mr. Johnson It is important to diversify look so promising for REIT in- usual for this stage of the real- Source: FactSet says. “That’s having a positive says, “which can serve as a internationally, says Matthew vestors. In the first two estate cycle, we think it will di- THE WALL STREET JOURNAL. impact on the leasing environ- short-term headwind for this Bartolini, head of SPDR months, REITs were driven minish in late 2018 and 2019,” ment.” And many retailers rate-sensitive sector.” Americas Research at State lower by fears of rapid inter- he says. “So REITs will have growth and tenant demand.” have begun to respond more Michael Iachini, head of Street Global Advisors, which est-rate increases. Rising rates pricing power to raise rents on Other sectors in commercial effectively to Amazon.com Inc. manager research for Charles runs a number of real-estate hurt REITs because the trusts high levels of occupancy.” real estate that industry insid- and other e-commerce compa- Schwab Investment Advisory, ETFs, including SPDR Dow compete with bonds partly on Some experts see opportu- ers particularly like include nies by beefing up their own e- says REIT ETFs “do not move Jones Global Real Estate the basis of yields, and be- nities in office REITs. Mr. data centers and cellphone commerce efforts and the in lockstep with either stocks ETF (RWO), a $2.4 billion cause higher rates raise bor- Brown, for one, likes Boston towers. Data-center and cell- portfolios of their bricks-and- or bonds.” But they do offer fund that has seen returns of rowing costs for REITs, which Properties Inc. (BXP), whose phone-tower REITs are bene- mortar stores, he says. the potential for diversifica- 2.05% through August. often take on substantial debt shares, he says, are trading at fiting from the explosion in tion and income. Through the to buy their properties. a discount despite a portfolio data usage, including e-com- Mr. Weil is a writer in West end of August, he says, Morn- Mr. Cowan is a writer in More recently, however, concentrated in Washington, merce and video on demand. Palm Beach, Fla. He can be ingstar data show a trailing Northern Ireland. He can be worries about rising rates D.C., New York, Boston and The growth of cloud comput- reached at [email protected]. 12-month yield of 4.05% for reached at [email protected].

Category Kings in 10 Realms Data provided by Leaders and Laggards Data provided by Top-performing funds in each category, ranked by year-to-date total returns (changes in net asset values Performance numbers are total returns (changes in net asset values with reinvested distributions) as of Aug. with reinvested distributions) as of Aug. 31; assets are as of July 31. All data are final. 31; assets are as of July 31. All data are final. Large-Cap Core Small-Cap Core Best-Performing Stock Funds Total Return (%) Assets Total return (%) Assets Total return (%) Assets Annualized ($ millions) Aug YTD 1-yr 5-yr* ($ millions) Aug YTD 1-yr 5-yr* Fund Ticker ($ millions) August YTD 1-year 3-year 5-year Amer Cent:Foc DG;Inv 84.6 5.9 26.9 36.6 17.4 Perkins Discovery 21.2 7.1 52.5 57.5 12.8 iPath ETN Glbl Carbon A GRN 8.8 22.5 178.1 298.5 40.6 36.8 EntrepreneurSh:ERS Etp30 74.1 6.4 23.1 N.A. N.A. AMG Mg Emerg Opps;N 190.7 9.0 23.6 39.1 14.8 Direxion:Gold M Id Br 3X DUST 142.6 44.0 67.7 87.5 –68.6 –50.8 Principal Sust Mom Idx 5.7 6.4 16.7 N.A. N.A. RBB:Altair Small Comp 323.4 7.5 21.7 34.6 N.A. ProShares:UltP QQQ TQQQ 3,465.7 18.1 56.5 87.8 65.9 61.8 RBB:SGI US Lw Vol Eq;I 414.5 4.3 15.0 25.0 13.8 Champlain Small Co;Inst 1,814.1 5.4 21.2 29.6 N.A. USCF:US 3x Oil USOU 6.6 6.6 55.8 191.5 N.A. N.A. CIBC Atlas Disc Eq;Inst 1,009.0 3.5 14.0 24.7 14.7 AdvisorShs Cornerstne SC 5.3 6.0 21.0 32.1 N.A. VelShs 3x Long Crude ETN UWTI 103.4 6.6 53.6 187.8 –36.9 –60.9 Vanguard PRIMECAP;Adm 67,455.0 3.1 14.0 27.0 18.3 Paradigm:Oppty Fund 12.3 7.6 20.8 35.0 12.9 VelShs 3x Long Crude UWT 198.2 6.6 53.4 187.4 N.A. N.A. Fidelity Momentum Factor RHJ Micro Cap;Inst 95.7 5.2 13.8 25.2 N.A. 54.6 6.6 20.6 28.4 13.3 Direxion:Jr Mnr Bear 3X JDST 65.4 42.9 53.2 66.1 –78.2 N.A. Category Average: 1,143.4 3.7 5.5 14.7 11.5 Category Average: 557.3 1.7 6.6 15.0 10.0 VelShs 3x Invrs Silver DSLV 14.8 22.0 52.6 57.3 –20.3 –1.9 Perkins Discovery PDFDX 21.2 7.1 52.5 57.5 19.6 12.8 Fund Count 810 805 783 749 592 Fund Count 1025 1024 1013 995 697 Nysa Srs Tr:Nysa Fund NYSAX 2.5 14.5 51.8 57.3 16.0 –1.1 Large-Cap Value Small-Cap Value Direxion:Tech Bull 3X TECL 667.1 20.3 51.0 92.6 76.8 61.8 ProFunds:Internet;Inv INPIX 294.6 11.3 49.3 69.2 41.9 34.4 Assets Total return (%) Assets Total return (%) ($ millions) Aug YTD 1-yr 5-yr* ($ millions) Aug YTD 1-yr 5-yr* UBS PS Daily 3x Lng Crd WTIU 13.4 6.4 49.0 175.8 N.A. N.A. Barclays ETN+ShillerCAPE 104.8 4.4 12.7 19.4 17.2 Paradigm:Micro-Cap 58.6 5.8 19.0 26.3 13.3 Best-Performing Bond Funds DoubleLine:Sh Enh CAPE;I 5,607.6 4.1 12.0 18.4 N.A. Pacific Adv:Sm Cap Val;A 22.3 5.6 18.1 46.7 2.4 Total Return (%) Eaton Vance Foc Vl Opp;I 77.3 2.4 9.7 23.6 12.4 Royce Fd:SmCp Val;Svc 242.4 3.6 13.8 29.4 8.4 Assets Annualized Fund Ticker ($ millions) August YTD 1-year 3-year 5-year Cognios LC Value;Inst 25.8 3.0 9.0 18.9 N.A. LM Sm-Cap Quality Value 4.5 2.5 13.8 28.3 N.A. iPath ETN Trs 10Y Bear A DTYS 69.1 –5.7 20.0 48.1 3.4 –7.7 Aptus Fortified Value 74.5 2.8 8.7 N.A. N.A. Bridgeway:Ultra-Sm Co 99.8 3.0 13.6 20.6 5.7 iPath ETN Trs Lng Bear A DLBS 19.8 –5.4 19.2 26.5 –3.8 –11.2 Ivy:Value Fund;I 1,240.5 3.0 8.3 17.0 10.5 Bridgeway:U-Sm Co Mkt 379.2 3.5 13.6 26.7 11.9 Barclays Inv US TC ETN Amer Cent:Inc&Gro;Inv 2,289.2 2.6 8.2 19.3 12.4 Bridgeway:Sm Cp Val 70.6 2.0 13.4 24.6 10.3 TAPR 18.2 –5.6 18.9 27.4 –7.7 N.A. ProShs II:UltSht AUD CROC 7.5 6.7 16.4 19.8 –5.5 2.0 Category Average: 1,039.8 0.1 –1.3 8.2 9.8 Category Average: 475.7 1.6 5.4 13.9 8.7 Franklin Inv:Cv Sec;Adv FCSZX 3,602.5 4.6 15.1 18.9 13.9 11.1 Fund Count 483 483 473 465 353 Fund Count 306 305 294 286 222 Oppenheimer Ro NJ M;A ONJAX 257.0 2.2 14.5 6.8 4.4 5.4 AllianzGI:Conv;Inst ANNPX 509.9 4.7 13.9 18.4 10.8 10.0 Large-Cap Growth Small-Cap Growth iPath ETN Trs 5Yr Bear DFVS 4.5 –3.0 13.8 32.9 4.9 –3.7 iPath ETN Trs 2Y Bear A Assets Total return (%) Assets Total return (%) DTUS 7.6 –1.6 13.2 30.8 7.9 –0.4 ($ millions) Aug YTD 1-yr 5-yr* ($ millions) Aug YTD 1-yr 5-yr* Rochester Sh Dur HYM;A OPITX 1,073.9 2.3 12.5 6.7 3.7 2.9 Berkshire:Focus 159.5 13.8 36.8 48.2 20.5 Nysa Srs Tr:Nysa Fund 2.5 14.5 51.8 57.3 –1.1 Oppenheimer Ro PA M;A OPATX 634.7 2.1 11.4 5.3 5.4 6.8 Dunham:Focused LC Gro;N 84.7 8.6 31.7 36.4 15.7 Alger:Sm Cap Foc;Z 1,556.5 16.3 46.0 57.8 19.1 FX Strategy;I FXFIX 23.9 4.0 11.4 10.6 –6.2 0.8 Touchstone Inst:Snd Gr 1,968.2 5.6 28.8 32.7 15.7 Driehaus:Micro Cap Gro 405.9 14.8 39.0 54.7 N.A. TETON WW:Convert Sec;I WESIX 22.8 3.2 10.8 16.9 11.6 8.9 Transam:Cap Growth;I 1,350.3 8.7 28.8 36.7 21.2 Pac Fds:Dev Gro;P 9.1 13.1 38.9 56.9 12.5 Touchstone:Sel Gro;Y 2,263.9 5.6 28.4 32.2 15.5 Lord Abbett Dev Gro;I 1,983.2 13.0 38.8 56.7 14.2 Worst-Performing Stock Funds Total Return (%) Biondo Growth;Inv 34.9 7.3 24.3 31.5 11.7 Osterweis Emerg Oppt 95.2 15.1 38.6 48.0 N.A. Assets Annualized Baron Fifth Ave Gro;Inst 278.4 5.6 23.1 31.2 18.7 Wasatch:Ultra Gro;Inv 208.4 12.5 37.9 51.8 19.3 Fund Ticker ($ millions) August YTD 1-year 3-year 5-year Rex VolMAXX Sh VIX FS VMIN 10.8 1.2 –90.3 –85.6 N.A. N.A. Category Average: 1,566.3 2.4 11.6 21.6 14.6 Category Average: 336.7 1.0 13.3 24.5 11.7 ProShs II:ShVIX STF ETF SVXY 480.5 3.0 –88.8 –82.3 –16.6 –9.2 Fund Count Fund Count 713 714 705 690 549 591 589 577 559 439 Direxion:Gold M Id Bl 3X NUGT 1,424.5 –36.9 –58.1 –66.7 –20.7 –53.5 Direxion:MSCI Bra Bull3X BRZU 297.3 –30.4 –57.3 –57.7 –9.5 –37.1 Midcap Core Multicap Core Direxion:Jr Mnr Bull 3X JNUG 873.0 –36.6 –56.1 –65.5 –23.7 N.A. Assets Total return (%) Assets Total return (%) USCF:US 3x Short Oil USOD 0.8 –9.9 –55.7 –79.4 N.A. N.A. ($ millions) Aug YTD 1-yr 5-yr* ($ millions) Aug YTD 1-yr 5-yr* VelShs 3x Inv Crude DWT 203.6 –9.7 –54.7 –78.9 N.A. N.A. CB Select;I Miller Opportunity;C 140.4 7.7 32.4 47.1 19.0 1,702.6 9.2 25.3 36.6 15.5 VelShs 3x Inv Crude ETN DWTI 5.5 –9.7 –54.6 –78.9 –48.2 –13.6 IronBridge:SMID Cap Federated MDT LCG;A 196.2 4.6 17.1 26.6 11.7 96.5 6.8 21.3 34.3 15.1 ProShs II:UltPro 3x SCO OILD 20.1 –9.5 –53.5 –78.1 N.A. N.A. Champlain Mid Cap;Inst 2,476.8 5.7 16.8 26.9 15.8 AMG FQ TaxMg US Eq;I 76.0 5.5 15.3 25.5 14.3 UBS PS Daily 3x Inv Crd WTID 3.1 –9.5 –53.2 –77.9 N.A. N.A. Private Cap Mgmt Value;I 66.1 3.0 15.7 23.7 11.1 MF&Var:Rtnl Dy Brnd;Inst 27.2 4.4 14.9 28.7 8.2 Direxion:S&P Btech Br 3X LABD 60.9 –15.3 –53.1 –57.4 –61.9 N.A. Destinations SMC Eq;I 787.2 4.9 14.6 24.8 N.A. Jns Hndsn:Contrarian;D 2,686.1 2.4 14.7 20.1 9.5 iShares:MSCI Turkey TUR 298.5 –28.7 –52.5 –55.0 –17.1 –14.3 Invesco RJ SB-1 Eq 192.1 4.4 13.5 25.2 11.8 Meridian Contrarian;Leg 688.0 4.9 14.6 30.4 14.4 Direxion:S&P OG EP Br 3X DRIP 75.1 2.0 –49.8 –76.5 –58.3 N.A. JOHCM US Sm-MC Eq;Inst 7.7 4.6 13.4 26.9 N.A. Nuveen LC Core;I 781.9 5.1 14.4 25.3 15.6 Category Average: 952.4 2.4 3.9 11.8 9.6 Category Average: 1,586.6 3.1 4.9 13.7 10.8 Worst-Performing Bond Funds Total Return (%) Fund Count 474 473 464 456 328 Fund Count 825 827 798 780 566 Assets Annualized Fund Ticker ($ millions) August YTD 1-year 3-year 5-year Midcap Value Midcap Growth WisdomTree:Brz Real Str BZF 11.6 -8.4 -16.9 -19.7 4.5 -2.0 BlackRock:EM LC Bd;K BELKX 22.3 -8.5 -15.5 -15.1 N.A. N.A. Assets Total return (%) Assets Total return (%) ($ millions) Aug YTD 1-yr 5-yr* ($ millions) Aug YTD 1-yr 5-yr* Goldman:Loc EM Dbt;R6 GIMSX 315.8 -8.3 -14.4 N.A. N.A. N.A. Stone Harbor Loc Mk;Inst Huber Cap MC Val;Inst 2.1 2.0 10.2 24.1 N.A. Morg Stan I:MCG;A 599.1 13.8 36.0 43.7 12.1 SHLMX 1,061.1 -8.3 -13.5 -13.8 1.5 -3.1 Direxion:20+Y Trs Bl 3X Rnhrt Mid Cap PMV;Adv 236.3 0.4 9.2 18.6 11.0 Spyglass Growth;Inst 26.3 12.2 31.4 N.A. N.A. TMF 92.2 3.4 -13.5 -14.4 0.7 10.0 iPath ETN GEMS Str Idx A Hotchkis:Mid Cap Val;I 1,886.6 2.3 9.1 21.1 9.1 Virtus:KAR Mid-Cap Gr;A 165.5 7.0 29.7 41.2 15.8 JEM 0.3 -6.7 -12.6 -12.0 0.2 -3.0 PGIM EM Dbt Loc Curr;Z Invesco Amer Value;A 1,408.8 1.3 9.0 20.7 9.2 Invesco Russ MdCp PG 250.0 11.9 29.5 45.2 16.9 EMDZX 65.3 -7.3 -12.6 -12.9 1.9 -1.4 iShares:JPM EM LC Bd Meeder:Quantex;Inst 84.3 2.5 7.8 19.8 N.A. Dreyfus BC S/MC Gro;I 1,710.3 10.4 27.6 38.6 15.4 LEMB 434.9 -7.0 -12.5 -12.8 1.1 -1.7 Ivy:Pictet EM LC Db;I Nuveen Mid Cp Value;I 156.5 1.8 7.3 18.2 12.9 Tocqueville:Opportunity 91.7 11.7 27.0 34.0 15.7 IECIX 122.9 -6.4 -12.5 -12.1 0.4 N.A. WisdomTree:US MdCp Div 3,366.2 2.1 7.1 17.9 13.7 Taylor Frigon Core Gr 11.6 12.6 27.0 36.1 N.A. WisdomTree:EM Local Debt ELD 185.1 -6.5 -12.2 -11.7 1.9 -2.1 Putnam Emerg Mk I;A PEMWX 17.3 -5.1 -12.1 -12.4 2.0 1.9 Category Average: 731.1 2.5 2.6 9.5 9.3 Category Average: 657.2 1.9 9.7 19.9 11.9 TCW:Em Mk Loc Cur Inc;I TGWIX 325.6 -6.3 -11.6 -10.8 3.3 -1.0 Fund Count Fund Count 185 185 179 171 115 392 392 386 379 315 VnEck Vctrs:JPM EM LC Bd EMLC 4320.90 -6.3 -11.5 -11.4 2.1 -2.0

N.A.: Not applicable; fund is too new * Annualized Note: For funds with multiple share classes, only the largest is shown. Note: For funds with multiple share classes, only the largest is shown. N.A.: Not applicable; fund is too new or data not available THE WALL STREET JOURNAL. NY Monday, September 10, 2018 | R7 JOURNAL REPORT | INVESTING IN FUNDS & ETFS

FIXED-INCOME INVESTING The Best Moves to Make in an Inverted Yield Curve A George Mason professor on what market history says about how investors should proceed

BY DEREK HORSTMEYER percentage point. Should it an inversion. ther reduces the attractiveness sions occurred and only twice continue on thistrajectory and Not only do stocks appear to of all of these investments. In didaninverted yield curve Yield Curve actually invert, history shows deliver the lowest returns fol- fact, once the inflation rate is manifest within a year before a A comparison of the yields of MUCH HAS BEEN said inre- that investors shouldn’t hold lowing yield-curve inversions, factored in, the only asset class given recession. Treasury bills, notes and bonds, cent months about the possi- out much hope for monumental they deliver the greatest vola- that historically has even a All told, the data suggest from shortest-term to longest bility of an “inverted yield returns across any asset class tilityin these time periods, as positive real rate of return fol- that prices (especially equities) curve.” If any inversion actu- in the years that follow. well. For instance, large-cap lowing an inverted curve are respond much more to an in- 3.5% ally occurs, how might it affect Is there anything investors stocks lost more than 50% of bonds, with an average portfo- version than to the actual re- 3.0 investors’ portfolios, and is can do toinsulate themselves? their value in a two-year pe- lio of short- and long-term is- cession, which comes on aver- there anything individuals can If historical returns offer any riod following the 1929 yield- sues registering a paltry 1.3% age 12 months later. In 75% of 2.5 do to protect themselves? direction, traditionally safe as- curve inversion (leading into annual real rate of return. cases over the past 90 years, The yield curve—the differ- sets may prevail as the best the Great Depression).Onthe the two-year returns to large- 2.0 ence between the interest rates strategy should the dreaded in- positive side, large-caps deliv- A better record cap stocks are significantly available on shorter-term and version occur. ered gains of more than 20% in in recent decades worse following an inversion 1.5 longer-term Treasury bonds, the two years after the 1981 in- Interestingly, the yield curve than they are following an offi- 1.0 shown as one curved line—gen- Looking back to the version. has become a much better pre- cial recession. 10 inversions erally slopes gently upward in While the historical evi- dictor ofrecessions in recent 0.5 normal times, as investors de- An investigation of the 10 dence seems to suggest that decades. An inverted yield Dr. Horstmeyer is an mand more return on invest- yield-curve inversions (when safer assets perform better on curve has accurately predicted assistant professor of 0 ments that tie up their money the rate on the two-year Trea- average following an inversion, every recession going back to finance at George Mason Uni- 136 1 2 3 5 7 10 30 for a longer period. sury exceeded that of the 10- it is important to note that in- the mid-1960s, with only one versity’s Business School in month(s) years Recently, however, the yield year Treasury) that have oc- flation has averaged 4.5% fol- false positive, in 1966. Yet, Fairfax, Va. He can be Source: Ryan ALM curve has fallen to its flattest curred since the buildup in the lowing these events. That fur- from 1926 to 1966, eight reces- reached at [email protected]. THE WALL STREET JOURNAL. level since the onset of the 1920s to the Great Depression 2007-09recession. When rates found that large-cap stocks de- of different maturity Treasurys livered an average annual rate get so similar, bond-market in- of return of just 1.5% in the vestors take notice and start two years following the inver- bracing for a possible inversion sion. Worse, small-capitaliza- of the curve, which is when tion stocks averaged minus short-term yields surpass long- 3.1%over the same time frame. term ones. A flattening of the Counter to this, traditionally yield curve suggests that inves- safe assets like long- and tors are getting worried about short-term bonds have fared a near-term growth and leaves bit better following yield-curve some pundits eager to predict inversions. Following the 10 in- the economy is headed for a versions, long-term bond port- downturn. folios averaged an annual rate Anadditionaltwo billion people This past week, the spread of return of 6.2% and short- between the 10-year and two- term bond portfolios averaged year Treasury was just 0.24 5.5% in the two years following will need housing by 2030.

Prediction Scoreboard Over that same time period, the global middle class will increase to nearly five Did an inverted yield predict a coming recession? billion people. Add to that the fact that interest rates are always in motion and it’s Correct False Positive Missed It no wonder businesses and individuals turn to CME Group to help manage their A yield-curve An inversion The yield curve risks and navigate fluctuating borrowing costs. That, in turn, enables lenders and inversion but no didn't invert property developers to keep pace with population growth. This is how the housing preceded a recession prior to the Date recession followed recession industry can find solutions that make shelter more accessible around the world. October 1926 4 This is how the world advances. Learn more at cmegroup.com/finance. August 1929 4 May 1937 4 February 1945 4 November 1949 4 July 1953 4 August 1957 4 April 1960 4 September 1966 4 December 1969 4 November 1973 4 January 1980 4 July 1981 4 July 1990 4 March 2001 4 December 2007 4

Note: Inverted yield curve based on 10-year T-bond yield compared with two-year note

Inversion Blues Performance of various investments following a yield-curve inversion. Average annualized returns. One year Two years following inversion following inversion Gold 5.6 4.1 Long-Term Bonds 5.4 6.2 Short-Term Bonds 5.9 5.5 International Equity –9.2 –1.2 Small-Cap Equity –10.8 –3.1 Large-Cap Equity (Dow) –6.1 1.5

Source: Derek Horstmeyer, George Mason University THE WALL STREET JOURNAL.

IN TRANSLATION MARKET BREADTH

Some stock-mar- dex that are reach- ket strategists are ing record levels is increasingly con- falling. And that is cernedabout some- happening even thing called “market though the index it- breadth,” or rather self keeps going thecurrent lack of it. higher. But what does it mean, and The upshot is that “fewer why should you care? stocks are carrying the load of Marketbreadth is a mea- the market,” the report says, sure of how many stocks are “a bad signal for further price moving the major indexes. It gains.” can serve as one indicator of Generally, rallies that have how much staying power a many stocks pushing up an rally is likely to have. indexhave more resilience Right now, the indications than those that rely on a few aren’t good for stock inves- stocks, says Don Coxe, chair- tors. For instance, a recent re- man of Chicago-based Coxe port from Goldman Sachs Advisors LLC. notesthatamere 10 stocks Mr. Coxe notesaclassic in the S&P 500 indexwere example of lack of breadth responsible for generating signaling a market decline more than half the gains in was in 2000 and 2001, when the index this year through technology stocks kept push- late July. ing the broad index higher, Similarly, a recent report without much help from other CME Group is a trademark of CME Group Inc. The Globe logo is a trademark of Chicago Mercantile Exchange Inc. All other trademarks are the property of their respective owners. from Morgan Stanley notes shares, until the rally col- Copyright © 2018 CME Group. All rights reserved. that the number of stocks in lapsed and turned into a rout. the tech-stock-led Nasdaq in- —Simon Constable R8 | Monday, September 10, 2018 THE WALL STREET JOURNAL. JOURNAL REPORT | INVESTING IN FUNDS & ETFS

ALTERNATIVE INVESTMENTS Hedge Funds Nearing A Bad 10-Year Streak The funds continue to lag behind the stock market, despite a record level of assets. But a few managers are delivering.

BY ERIC UHLFELDER half performers. They were led stood out for its first-half per- by emerging markets, com- formance was AlphaQuest modity trading advisers, or Original of Quest Partners LLC, HEDGE FUNDS were finally CTAs, and global macro, which which climbed nearly 21%. The hoping the return of volatility were down 4.7%, 2.2%, and fund uses quantitative models in 2018 was going to revive 1.1%, respectively (see table). to target periods of rising vola- their fortunes. “Emerging markets are be- tility and short-term trade ex- But no such luck. Hedge ing hurt by an appreciating posure. Quest President funds are well on their way to U.S. dollar, the rising specters Prashant Kolluri says the their 10th straight year of un- of trade wars and protection- fund’s returns in the first half derperforming U.S. stocks. ism, political discord and mac- were boosted by quickly mov- To assess what happened in roeconomic turmoil, especially ing in and out of the U.S. stock the first half of 2018, global in Turkey, Argentina and Bra- rally that followed the tax-

industry data tracker Barclay- zil,” says Carl Tohme, manager overhaul passage, and by being QUEST PARTNERS Hedge ran a broad screen of of Jabre Capital EMEA fund, short Italian bonds and long One first-half winner is the global macro fund from Quest Partners in New York, up nearly 21%. several thousand hedge funds which outperformed the Bar- safe-haven bonds, such as Ger- The firm’s management team, from left, Robert Toth, head of trading; Prashant Kolluri, president; for The Wall Street Journal. clayHedge EM index by 5.5 man bunds. Bets on rising Paul Czkwianianc, head of research; and Nigol Koulajian, founder and chief investment officer. BarclayHedge found the aver- percentage points. crude-oil futures also helped. age hedge fund return to be a Global Macro funds and $13 billion Point72, former A lead performer in funds pack is the $234 million Odey paltry half percent while the CTAs—which both target Still popular Millennium Management exec- specializing in CDOs continues European Equity, a fund from S&P 500 rose more than 2.5%. broad asset-class exposure Despite dull industry per- utives Michael Gelband’s and to be Hildene Opportunities London-based Odey Asset Incomplete returns through such as interest rates, curren- formance, investors still ha- Hyung Soo Lee’s $8 billion Ex- Master. The $1.8 billion fund, Management that uses long July so far show a significant cies, stocks, bonds and com- ven’t lost their taste for hedge odusPoint, and former Viking launched a decade ago, has and short strategies. Its Ster- widening of the year-to-date modities—took two major hits: funds. According to Hedge Global CIO Daniel Sundheim’s generated gains of nearly 23% ling class was up 24% for the performance gap, with the the February reversal in the Fund Research, assets grew to $4 billion D1 Capital. a year with volatility of 8.4%. first six months, helped by market up nearly 6.5% while U.S. stock rally, and the return a record $3.236 trillion as of While most strategies con- Hildene is keeping pace with two bets: shorting the pound hedge funds gained 1.10%. of volatility in European debt June, up from $3.211 trillion at tinue to struggle, the several its historic returns, with gains and U.K. government bonds on The Wall Street Journal after the Italian election re- the end of 2017, supported by that did outperform the market of over 10% through June. the premise that Britain’s exit sorted the funds by strategy, sults in May. some massive fund launches. in the first half were led by dis- A key driver of performance, from the European Union will identifying the weakest first- A global macro fund that These include Steve Cohen’s tressed securities. Funds in this says Hildene co-CIO Brett Jef- harm the U.K. economy, and a category, which generally focus long position in British tele- on companies suffering from The top leading com and media company Sky Hard to Beat the Market poor mergers, loss of industry PLC, which is the target of a First-half 2018 performance of various hedge-fund strategies, in percentage returns leadership, shifting demand or hedge-fund three-way bidding war. restructuring, were up an aver- strategy so far in But Odey’s surge reflects 3-Year 5-Year age 6.26%. While the category the challenges of assessing Jan-June 2018 1-Year Annualized Annualized is up more than 10% over the 2018 is distressed funds by what they’ve done Net Returns Net Returns Net Returns Net Returns past year, this follows several securities. lately. Over the past three cal- years of lackluster returns. endar years, the fund has lost Distressed Securities 6.26 10.26 4.51 4.39 One leading hedge-fund more than 20% annually. 6.24 12.34 8.00 11.07 Collateralized Debt Obligations manager in this category is “Broad market dynamics Asset-Backed Loans 3.96 9.11 7.78 9.39 $281 million Man GLG Euro- ferson, has been targeting ex- have broken down,” says Asset-Backed Securities 3.44 7.62 8.26 7.90 pean Distressed. Its U.S. Dollar posure to specific, undervalued, Panayiotis Lambropoulos, Class A fund was up 11% for trust-preferred CDOs of re- portfolio manager of hedge- European Equities (hedged) 2.51 4.60 2.65 4.70 the first half, and nearly 15.5% gional banks that are benefiting fund investments at the $28 2.49 5.16 4.66 6.17 Mortgage-Backed Securities over the past 12 months. from improving credit condi- billion Employees Retirement Equity Long/Short 1.63 6.47 3.61 4.94 Though it has an annualized tions and ratings, and antici- System of Texas. He notes Event Driven 1.55 4.97 4.98 5.01 rate of return of more than pated eligibility for auction. there has been an explosion of 11% since its launch a decade debt issuance and soaring eq- Convertible Arbitrage 1.08 1.56 2.24 2.72 ago, with volatility under 9.5%, European plays uity valuations along with 1.04 9.26 4.94 6.68 Equity Long Bias the fund is also recovering The third leading strategy, plenty of events to move Fixed-Income Arbitrage 0.59 1.19 3.37 4.66 from sluggish performance only marginally trailing the prices, but a surprising lack of Credit Long/Short 0.47 2.46 3.14 3.80 over the past several years. A broader market, is European dispersion among assets. representative for the fund hedged equities, or funds that “There seems to be a new Equity Market Neutral 0.28 2.46 2.25 3.58 says it declines to comment. are both long and short Euro- rulebook out there,” Mr. Lam- 0.18 4.86 Merger Arbitrage 1.59 4.55 While fixed-income funds pean shares. These managers bropoulos says, “but its con- Multistrategy –0.27 2.90 2.98 4.52 as a whole didn’t do much registered gains of 2.51%, an tent, typically informed by es- Global Macro –1.06 2.48 1.87 2.69 during the first half, several improvement over the past tablished financial theories specialty fixed-income strate- five years. These managers and experience, has turned in- Commodity Trading Advisers –2.19 0.15 –1.25 0.54 gies managed decent returns, have so far been outpacing the creasingly indecipherable.” –4.65 4.26 Emerging Market 4.62 4.55 led by collateralized debt obli- BarclayHedge Equity Long/ Barclay Hedge Fund Index 0.48 6.26 4.43 5.28 gations, up 6.24%, asset- Short Index, which has a Mr. Uhlfelder writes about S&P 500 Total Return Index 2.66 14.38 11.93 13.42 backed loans, which tacked on strong bias toward U.S. stocks, international capital markets nearly 4%, and asset-backed and which returned 1.63%. from New York. He can be Source: BarclayHedge THE WALL STREET JOURNAL. securities, up 3.44%. Leading the continental reached at [email protected].

SAVING FOR COLLEGE | CHANA R. SCHOENBERGER How to Get the Most Financial Aid for College Why you shouldn’t buy life insurance as a way to shelter assets, and other tips

Readers continue to write in with queries tax-free and can be taken out without taxes or for more aid. iii about the best way to pay for college. We penalties when used for eligible educational “The financial-aid officers at any college are asked experts to help us answer readers’ expenses. excellent resources for families; just don’t My granddaughter, who plans to go to college questions on college savings and tax-advan- When a 529 account is owned by a parent, waste your conversation time with them recall- next year, is living with her aunt. She ran taged “529” accounts. with the student as the beneficiary, the ac- ing what your older child or a relative received away from home, where her mother was mis- count gets counted at 5.64% of its value. If four years ago,” Mr. DiUlio says. iii treating her, and neither parent is likely to co- the student is the owner, money held in the Another common problem, he says, is that operate with filling out financial-aid forms. How can I maximize college aid for my child? account is counted at 20%; once the student families often don’t look seriously at several Whose income will count on the Fafsa? And What are the best strategies for where to put starts withdrawing money, that is counted at colleges, public and private, that may offer what can I do with the 529 that I have estab- our family’s money so that we can get as up to 50%. An account owned by a grandpar- choices of grants, loans and work-study. Just lished for her, since I don’t wish to give her much financial aid as possible? ent or anyone else doesn’t count at all until because your child declares that she’s found parents control of it? distributions start flowing to the student to her “dream school,” don’t stop looking for bar- Financial aid can be a game with high pay for college, and then it is considered un- gains if aid is an issue. In this situation, “she should appeal to the stakes, especially if aid is the difference be- taxed income to the student and counted at “Don’t be the family that takes more time college financial-aid administrator for a depen- tween a college education and a lack of one, or 50%. shopping for a lawn mower than choosing a dency override,” Mr. Kantrowitz says, submit- between a heavy load of student loans and Before you start moving assets around spe- college and the financing that will be a good ting copies of documents that prove her cir- none. cifically to increase your financial aid, first go fit for you,” he says. cumstances, like letters from social workers, If you’re anticipating making changes to online and use a financial-aid calculator to see Rather than go through complicated machi- clergy, police, or court orders. Unless she has your family income before you apply for aid, how these strategies will affect your aid. It nations, it makes more sense just to save for adopted the girl legally, her aunt isn’t consid- you’ll have to do that before Jan. 1 of the stu- might all be for naught. “If a family has suffi- college if you have the means. ered a parent for Fafsa purposes, but any cash dent’s sophomore year in high school. For cient assets to affect eligibility for need-based “Any dollars in hand are more valuable support her aunt is giving her has to be re- changes to your family’s assets, those can oc- financial aid, usually they have sufficient in- when compared to having to pay back loans ported on the financial-aid form, Mr. Kantrow- cur as late as the filing date for Fafsa (the Free come to wipe out aid eligibility even if they with interest over time,” Mr. DiUlio says. itz says. Application for Federal Student Aid), as long had no assets,” Mr. Kantrowitz says. You don’t have to give her parents control iii as you can document the change, say, with a He cautions specifically against buying life of the money in your grandparent-owned 529 bank-website printout. insurance as a way to shelter assets for this We have a grandparent 529 account for our account. “It is important to note that the answers to purpose, because the contracts are often 20-year-old granddaughter, who has dropped “If you don’t want to affect her eligibility for questions about income and taxes are based opaque and difficult to understand, and may out of college. The financial statements indi- need-based financial aid, you could wait until on the prior-prior year’s federal income-tax re- come with high fees or charges that end up cate the account needs a custodian until she after Jan. 1 of her sophomore year in college turn,” or 2017 for the 2019-20 Fafsa, “while costing the family more than they would gain is age 21. What happens when she reaches to start taking distributions, when it will no the answers to asset and demographic ques- in aid. 21? Can the account be extended if she de- longer affect her aid eligibility, assuming she tions are as of the date the Fafsa is filed,” What’s more, “trust funds almost always cides to resume college? If the account must graduates in four years,” he says. says Mark Kantrowitz, publisher of the col- backfire, so forget about trying to set up a be terminated, are the remaining funds hers iii lege-finance information site savingforcol- trust fund to shelter the money,” Mr. Kantrow- or do they still belong to the grandparents? lege.com. itz says. Would there be a tax on the earnings plus a My 14-year-old daughters are about to start “Parent assets, including checking and sav- The only trust funds that don’t affect aid penalty, and who is responsible for those working part time, and I plan on contribut- ings accounts, count as less than 6% when eligibility are court-ordered ones (to pay for an payments? ing an amount equal to their total salary to determining the family contribution,” says accident victim’s medical expenses, for in- a Roth IRA, up to the maximum allowed, ev- James DiUlio, chairman of the College Savings stance) or those that are being legally con- With this type of account, your grand- ery year going forward. How will this affect Plans Network, an association of state 529 tested at the time of the Fafsa filing, such as a daughter will gain control at age 21; the money their ability to receive financial aid for col- plans. Schools know that families have ex- trust set up by a will that is the subject of a no longer belongs to the grandparents who lege? penses other than college, including retirement court fight. contributed it, Mr. DiUlio says. She can keep and the care of elderly parents or other chil- If you have another child going to college, the account open while deciding on future ed- An IRA (or other retirement account) isn’t dren. or your family’s living arrangements or finan- ucational plans, or she can withdraw the reported as an asset on the Fafsa. Among the most useful ways to save for cial situation change, you can always call the money as she wishes. “However, distributions from a Roth IRA, college are 529s because the money grows college’s financial-aid office to plead your case If your granddaughter doesn’t use the with- such as a tax-free return of contributions, will drawals for eligible educational expenses, she count as untaxed income on a subsequent will be liable for income taxes on the gains year’s Fafsa,” Mr. Kantrowitz says. Those dis- Have a college-finance question in general? We’ll be answering some of them in future Investing in Funds & ETFs reports. Write to [email protected]. portion of any money withdrawn, as well as a tributions will reduce aid eligibility by as much 10% penalty. as half of the distribution amount.

wsj_20180910_r008_p2jw253000_0_r00800_1______xa2018.crop.pdf 1 10-Sep-18 06:07:33 R10 | Monday, September 10, 2018 THE WALL STREET JOURNAL. JOURNAL REPORT | INVESTING IN FUNDS & ETFS

BEST BET/WORST BET BEST BET the idea. “When you make that judg- Joining the board of Confinity ment on talent, that’s a reason to say: ‘Wow, it’s encryption on mobile INVESTMENT phones? No problem. I’m in.’ ” Time, energy and advice WORST BET GAINS Passing on Stripe A billion-dollar career as a tech entrepreneur and investor INVESTMENT SPOTLIGHT | TURKEY Zero In 1998, Mr. Hoffman was trying to get traction for his startup, So- LOSSES ETF OPTIMISM cialNet—a site for dating and con- Tens of millions of dollars by necting people with mutual inter- current valuation Some investors are seeing the re- ests—when his friend Peter Thiel cent instability in Turkey as a buy- asked him if he would join the board It’s missed opportunities, not ing opportunity, with many piling of Confinity, his budding payments losses, that Mr. Hoffman regrets. into the $386 million iShares company that used cryptography Not investing in a company that MSCI Turkey ETF (TUR). technology. goes into orbit costs him a lot more Turmoil in Turkey has pushed Mr. Hoffman hesitated for two than an investment going to zero, he down the Turkish lira and unsettled reasons. First, he felt that he needed says. “Losing those is the thing that the emerging markets. A political to give his startup all of the atten- is the disaster,” he says. “It’s the, tussle between the U.S. and Tur- tion he could. Second, he thought ‘Oh, my God! This thing is going to key in mid-August dealt another encryption on mobile phones was a the moon and I’m not in it!’ ” blow to the Turkish economy. bad idea. But he thought Mr. Thiel To date, he says his biggest re- Dave Nadig, managing director and his team were extremely tal- gret is passing on digital-payments of ETF.com, says: “There’s only ented. “I figured I would learn from company Stripe. one Turkey ETF in the U.S., the

NOAH BERGER/BLOOMBERG NEWS them as well,” he says. “Even Mr. Hoffman says Paul Graham, iShares TUR, and it is essentially Reid Hoffman took a board seat and landed a career. though I told them I was absolutely co-founder of the startup accelera- where all the flows and trading convinced the idea they were pitch- tor Y Combinator, encouraged him volume have been”—$182 million ing me on was a terrible idea.” to meet with founders John and Pat- in flows since Aug. 1. Reid Hoffman on The next year, Confinity launched rick Collison, saying: “These guys Why the huge flows? Mr. Na- a product called PayPal, which revo- are some of the best that have ever dig explains: “Well, certainly some lutionized online payments. Mr. come through here. They’re going to folks are ‘buying the dip,’ but the What He Missed Hoffman went on to join the com- reinvent the banking industry.” volume has been so huge there is pany full time as chief operating of- Mr. Hoffman met the brothers, little question that some of this is ficer. The company, renamed PayPal liked them, and acknowledged that ‘create to lend’ activity: essen- BECAUSE HE MADE a pile of money from co-founding Inc., went public in 2002, was they had a “really good” idea. But he tially big firms making new LinkedIn, has invested in companies like Airbnb and is gen- bought by eBay the same year for passed, because he thought they were shares so they can loan them out erally considered one of Silicon Valley’s most-high-profile $1.5 billion, and was spun out as a valuing Stripe too high, and because to short sellers.” angel investors, Reid Hoffman gets hit up for money—a lot. separate company, now PayPal he knew just how hard it is to make a The create-to-lend process is His inbox, he says, is flooded with between 100 and 200 Holdings,in2015. go of it as a payments company. when market intermediaries cre- cold pitches every week. And he looks seriously at six to Mr. Hoffman said taking the Stripe is now valued at more than ate ETF units to allow other trad- eight ideas a week that he fields from all corners of his life. board seat made his career. “It’s $9 billion, according to news reports ers to cover short positions. In- In good pitches, he says, entrepre- what led to me being able to do an- on funding rounds. By passing on vestment strategies involve BY CHRIS neurs don’t just boast of their creden- gel investing and what led me to es- the opportunity, Mr. Hoffman shorting ETFs, which is a surpris- KORNELIS tials and competitive edge; they clearly sentially finance the first money in missed out on millions. ingly popular trading tactic in the articulate the risks and challenges and LinkedIn,” he says. ETF marketplace and a large part how they will overcome them. But part THE TAKEAWAY: “Sometimes as of ETF trading volume. of his job is seeing good ideas in bad pitches. THE TAKEAWAY: Investors often investors in what are possibly real The ETF targets the MSCI Tur- For example, in one meeting an otherwise impressive judge a company on a combination breakout areas, you exercise too key Investable Market Index, hold- founder told him, “I’m not sure I’m going to keep doing of three things: market position, much price discipline,” he says. ing 62 stocks, with the largest al- this. After the summer, I may go back to school.” And he team and momentum, Mr. Hoffman Stripe faced an uphill battle—it location being financial services. closed by saying, “Well, if you don’t like this idea, I have says.Theyblendtheiropinionsof would have to become a revolution, In terms of performance the ETF another idea…,” which was basically simply a version of all three to reach a decision. He a platform and “enable a bunch of has been tumbling, year to date, Napster. But the company’s momentum was such that Mr. thinks a little differently. He thinks stuff” to succeed. But, the potential with a total return of minus 54%. Hoffman invested anyway. one of the three has to be far above upside of a company that processes Deborah Fuhr, managing part- That founder, he says, was Mark Zuckerberg. The com- the bar for him to get involved. payments online is incredibly high, ner at ETFGI, a research and con- pany was Facebook. And his $37,500 investment turned His Confinity/PayPal success rein- Mr. Hoffman says. sultancy firm, reports that in June into $400 million. forced that when you choose an in- Huge, potentially disruptive ideas and July, net new assets in ETFs Here, Mr. Hoffman, now a partner at Greylock Partners vestment based on talent, that tal- belong in a portfolio, even if success exposed to Turkey were high due and author of “Blitzscaling: The Lightning-Fast Path to ent has to be so strong that you is a long shot, he says. He now thinks to the inflows to the London- Building Massively Valuable Companies,” recalls two other want to be working with them for a he should have said to himself: “If listed iShares MSCI Turkey Ucits bets: one he made, and one he should have made. decade, that you’d be willing to be anyone is going to pull something ETF (ITKY) and the TUR ETF. “in a foxhole with them,” he says, out in payments, these two probably They drew $162.5 million and Mr. Kornelis is a writer in Seattle. He can be reached at even if you’re not completely sold will do it. So I should go along for $56.8 million respectively. [email protected]. on other parts of the package—like the ride as part of a portfolio bet.” —Tanzeel Akhtar

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