U.S. Has More Jobs Than Jobless Chinese Companies Buying Stake in the Chinese Opera- More U.S

****** WEDNESDAY, JUNE 6, 2018 ~ VOL. CCLXXI NO. 131 WSJ.com HHHH $4.00

DJIA 24799.98 g 13.71 0.1% NASDAQ 7637.86 À 0.4% STOXX 600 386.89 g 0.3% 10-YR. TREAS. À 6/32 , yield 2.917% OIL $65.52 À $0.77 GOLD $1,297.50 À $4.40 EURO $1.1720 YEN 109.79 What’s It’s a Jungle Out There for California’s Gubernatorial Candidates Beijing News Proposes

Business&Finance ADeal On Trade Job openings in the U.S. exceeded the number of China says it will buy job seekers this spring for the first time since such record- $70 billion in U.S. keeping began in 2000. A1 goods if Trump drops Facebook struck data threat of tariffs partnerships with Chinese companies, including Huawei, China offered to purchase a firm U.S. officials view as a nearly $70 billion of U.S. farm, potential tool for spying. A10 manufacturing and energy U.K. regulators approved products if the Trump admin- Comcast’s bid for Sky and istration abandons threatened gave a tentative green light tariffs, according to people to a rival offer from Fox. B1 briefed on the latest negotiations with American trade of- OPEC and its allies will ficials. consider China’s store of oil in deciding whether to continue By Lingling Wei in supply cuts, officials say. B1 Beijing and Bob Davis The Nasdaq rose 0.4% to in Washington

7637.86, a second consecu- CLOCKWISE FROM TOP LEFT: K.C. ALFRED/THE SAN DIEGO UNION-TRIBUNE/AP; JUSTIN SULLIVAN/GETTY; RICHARD VOGEL/AP tive record. The Dow slipped ON THE BALLOT: Three of California’s more than two dozen gubernatorial candidates—clockwise, from top left, Republican businessman In weekend talks in Beijing, 13.71 points to 24799.98. B13 John Cox, Democrat Lt. Gov. Gavin Newsom and Democrat Antonio Villaraigosa, a former Los Angeles mayor—voted Tuesday. In the state’s Chinese negotiators led by Liu ‘jungle primary,’ the top two vote getters, regardless of party, will advance to a November runoff. Go to WSJ.com for election results. He, President Xi Jin- Connecticut is issuing ping’s economic envoy, pre- new debt that requires the sented a U.S. team headed by state to limit spending and Commerce Secretary Wilbur cap future borrowing. B1 Ross a package that includes SoftBank is selling a 51% U.S. Has More Jobs Than Jobless Chinese companies buying stake in the Chinese opera- more U.S. soybeans, corn, nat- tions of U.K. chip designer ural gas, crude oil, coal and Arm to a China-led group. B5 BY ERIC MORATH in the labor force. That reflects manufactured goods. everything from baby boomers Chinese and U.S. officials Australian regulators Gap Closes The U.S. had more job open- retiring in greater numbers to estimated the value of the charged ANZ, Citigroup and Level of unemployment and job openings in the U.S. ings this spring than unem- students staying in college lon- package at nearly $70 billion Deutsche Bank with cartel con- 15 million ployed Americans, laying the ger to opioid abuse preventing in the first year. duct in a 2015 fundraising. B12 ground for the higher wages people from taking jobs. President Donald Trump The SEC voted to allow needed to draw people from Unemployed The unemployment rate has pressed China to commit electronic posting as the de- the sidelines of a historically 10 ticked down further in May to a to reducing the $375 billion fault method for disseminat- tight labor market. seasonally adjusted 3.8%, the U.S. merchandise trade deficit ing mutual funds’ shareholder For the first time since such lowest since April 2000, the La- with China by $200 billion. reports, starting in 2021. B12 record-keeping began in 2000, bor Department said last week. Chinese officials are arguing 5 the number of available posi- The last time the rate was their offer could go a long way Banks and insurers paid tions exceeded the number of Openings lower was in 1969, when young toward meeting that target. out some of the largest set- job seekers, the Labor Depart- men were being drafted into Throughout the negotia- tlements in the past decade ment said Tuesday, a shift that 0 the Vietnam War. tions, Mr. Liu made clear to in lawsuits over wages, ac- is rippling across the economy 2001 ’05 ’10 ’15 While the labor market has Mr. Ross that the offer would cording to a new report. B3 and affecting the behavior of Note: Seasonally adjusted tightened there still is a be void if Washington proceeds The Wall Street Journal employers and workers. Source: Labor Department THE WALL STREET JOURNAL. greater share of workers than with its plan to impose tariffs named Matt Murray as its U.S. job openings rose to a 18 years ago saying they are on $50 billion of products new editor in chief. He suc- seasonally adjusted 6.7 million Openings had exceeded the the U.S. is facing a historically stuck in part-time jobs and made in China, the people ceeds Gerard Baker, who will at the end of April, a record available labor pool beginning tight labor market. The short- PleaseturntopageA5 PleaseturntopageA8 become editor at large. B2 high—and more than the 6.3 in March, according to revised age of workers is made more million Americans who were figures released Tuesday. intense by the fact that a Heard on the Street: A reason Mexico details tariffs on World-Wide unemployed during the month. The data are the latest sign smaller share of U.S. adults are jobs are tough to fill...... B14 range of U.S. goods...... A8

China offered to buy Designer Kate Spade Dies at 55 nearly $70 billion of U.S. Facebook’s Messy Split farm, manufacturing and energy products if the Trump administration abandons threatened tariffs. A1 With WhatsApp Founders Republicans are ratcheting up their opposition to new tariffs that Trump advanced based on national security. A8 They are walking away from $1.3 billion after pressure to increase revenue Mexico published a list of retaliatory tariffs that it is placing on U.S. goods. A8 BY KIRSTEN GRIND AND DEEPA SEETHARAMAN Acton had persistent disagreements in recent The administration put its years with Mr. Zuckerberg and Chief Operat- How ugly was the breakup between Face- search for the Justice Depart- ing Officer Sheryl Sandberg, who grew impa- book Inc. and the two founders of Whats- ment’s No. 3 official on hold af- tient for a greater return on the company’s App, its biggest acquisition? The creators of ter failing to persuade several 2014 blockbuster $22 billion purchase of the the popular messaging service are walking messaging app, according to the people. candidates to take the job. A1 away leaving about $1.3 billion on the table. Many of the disputes with Facebook in- Eight states held primaries, The expensive exit caps a long-simmering volved how to manage data privacy while a major step in setting the dispute about how to wring more revenue also making money from WhatsApp’s large stage for the battle over con- out of WhatsApp, according to people famil- user base, including through the targeted trol of Congress in the mid- iar with the matter. Facebook has remained ads that WhatsApp’s founders had long op-

term elections. A5, WSJ.com WENDY MAEDA/THE BOSTON GLOBE/GETTY IMAGES committed to its ad-based business model posed. In the past couple of years especially, FASHION FAVORITE: Kate Spade—whose handbags were a rite of Social Security’s costs amid criticism, even as Facebook Chief Exec- Mr. Zuckerberg and Ms. Sandberg pushed passage for a generation of young, urban women—was found will exceed its income this utive Mark Zuckerberg has had to defend the PleaseturntopageA10 dead from an apparent suicide at her Manhattan apartment. A2 year for the first time since company before American and European Facebook struck data deals in China...... A10 1982, forcing the program lawmakers. The WhatsApp duo of Jan Koum and Brian Apple fires shots across Facebook’s bow...... B4 to dip into its trust fund. A3 The EU’s top court ruled that same-sex partners have the right to live in any Clash Over Search Is Put on Hold country in the bloc. A9 Album Notes Salesforce. David Koch is retiring For No. 3 Justice Aide from his family-owned firm and all political organizations Comes Calling #1 CRM. due to deteriorating health. A4 iii BY SADIE GURMAN On Tuesday, Mr. Trump McConnell canceled AND ARUNA VISWANATHA took aim again at his attorney much of the Senate’s August Inside one fan’s general, saying on Twitter that Ranked #1 for CRM Applications based on recess to work on spending The Trump administration someone in the post other IDC 2017 Market Share Revenue Worldwide. bills and confirmations. A4 lonely quest to has put its search for the Jus- than Jeff Sessions could have 19.6% Senators cautioned the alter rock history tice Department’s No. 3 official avoided “so much time and administration about the risk on the back burner after fail- money wasted, so many lives of moving too quickly to ease ing to persuade several candi- ruined” by the Russia probe, BY CAMERON MCWHIRTER dates to take the challenging which is being led by special pressure on North Korea. A8 position, according to people counsel Robert Mueller and USA Gymnastics officials When the British punk band familiar with the matter, in the overseen by Deputy Attorney knew of sex-abuse allegations the Clash’s acclaimed double- latest sign of the difficulties General Rod Rosenstein. 7.1% against Nassar, an ex-employee album “London Calling” came besetting the agency. In the past week, Mr. Trump of the organization said. A3 out in the U.S. in January 1980, The department lacks per- has tweeted about the Russia 6.5% Dave Marin rushed to buy it. manent, politically appointed probe or the Justice Depart- 4.0% The cover featured the famous leaders to oversee at least five ment more than 20 times. Mr. CONTENTS Opinion...... A15-17 image of rocker Paul Simonon high-profile units, including Sessions recused himself from Banking & Finance.... B12 Property Report B6-7 3.2% Business News.. B3,5 Sports...... A14 smashing his bass guitar on the criminal, civil and tax divi- the probe because he was a Crossword...... A13 Technology...... B4 stage. sions. And it has been a fre- member of Mr. Trump’s 2016 Heard on Street. B14 U.S. News...... A2-5 Mr. Marin, then a college quent target of attacks by Pres- campaign, which is being in- 2013 2014 2015 2016 2017 Life & Arts...... A11-13 Weather...... A13 student, had been in that New ident Donald Trump for what vestigated for possible collu- Markets...... B13-14 World News. A6-9,18 Source: IDC, Worldwide Semiannual York audience to witness rock- he claims are its shortcomings, sion with Russia. Mr. Trump Software Tracker, April 2018. star history. including its handling of the has denied any collusion. > But as he read the album’s probe into Russian interference Without any immediate can- liner notes, his heart sank. The in the 2016 election that he has didate ready to sign on to the photo was dated Sept. 21, 1979. repeatedly called a “witch job of associate attorney gen- He knew that was off-key: He hunt” and allegations of mis- eral, the administration is in- salesforce.com/number1CRM witnessed the bashing and his conduct by the Federal Bureau stead focusing on other vacan- CRM Applications market includes the following IDC-defined functional markets: Sales, Customer Service, Contact s 2018 Dow Jones & Company, Inc. Center, and Marketing Applications. © 2018 salesforce.com, inc. All rights reserved. Salesforce.com is a registered All Rights Reserved ticket stub—which he still of Investigation, which is part cies. Department officials say trademark of salesforce.com, inc., as are other names and marks. PleaseturntopageA2 of the Justice Department. PleaseturntopageA4 A2 | Wednesday, June 6, 2018 ****** THE WALL STREET JOURNAL. U.S. NEWS Designer Found Dead in Apparent Suicide BY SUZANNE KAPNER ers that had initially carried bags in bright-colored utilitar- AND ZOLAN KANNO-YOUNGS the line such as Bloom- ian shapes at a New York City ingdale’s have dropped it. trade show and landed just The fashion designer Kate The designer, born Kather- two buyers, leaving Ms. Spade Spade—whose sophisticated ine Noel Brosnahan in Kansas in tears and convinced she handbags with a touch of City, was one of six children. should quit. When she went whimsy were a rite of passage She met her husband as a stu- home and told Mr. Spade who for a generation of young, ur- dent at Arizona State Univer- the buyers were—the retailers ban women—was found dead sity, where she graduated with Barneys New York and Fred from an apparent suicide at a journalism degree. “Andy Segal—he said, “ ‘No, keep it her Manhattan apartment and I met in a little clothing going,’ ” she recalled. Tuesday morning. store” where they worked, Ms. “It became a cultural phe- The 55-year-old sold a con- Spade said in a 2016 interview nomenon,” said William Mc- trolling stake in her namesake with The Wall Street Journal. Comb, Liz Claiborne’s former brand 19 years ago, cut ties The designer said she chief executive, who said the with it in 2007 and took time showed an early flair for fash- brand resonated far beyond its off from the fashion business ion. “I would have my mother size. Kate Spade had less than to focus on raising her daugh- take me to vintage stores and $100 million in annual sales ter. She returned to the indus- wear leopard swing coats and when Liz Claiborne bought it, try in 2016, designing shoes cigarette pants,” she said in he said. Mr. McComb oversaw and handbags under the brand the interview. “In Kansas City the brand’s expansion to in- name Frances Valentine. I looked very odd.” She said clude hundreds of retail stores Officials said the designer she designs the way she shops. and new product lines such as appeared to have hanged her- “If I love it, I buy it.” men’s accessories, stationery self with a scarf in her Park The couple moved to New and housewares. By the time

Avenue apartment at about SPENCER PLATT/GETTY IMAGES York, and Ms. Spade started at Coach bought it last year, it 10:20 a.m. and was found by The designer Kate Spade was found at her Park Avenue apartment by her housekeeper yesterday. Mademoiselle magazine as an had more than $1 billion in an- her housekeeper. At a separate assistant and worked her way nual sales. press briefing Tuesday, NYPD ple’s 13-year-old daughter The Kate Spade brand has corporate name to Kate Spade up to fashion editor, she told Ultimately, though, growth Chief of Detectives Dermot wasn’t home at the time of the changed hands several times & Co. The company was ac- NPR in a 2017 interview. of the Kate Spade brand Shea said there was a suicide incident, an official said. since the founders sold a con- quired last year by rival Coach Ms. Spade said she felt lagged behind that of Coach note at the scene. A spokeswoman for the trolling stake to Neiman Mar- Inc., now called Tapestry Inc. handbags at that time were and Michael Kors Holdings Ms. Spade was married to Kate Spade brand said, “Our cus in 1999. The high-end re- Ms. Spade’s new venture, too complicated, and there Ltd., its rivals in “affordable her business partner, Andy thoughts are with Andy and tail chain agreed to sell the Frances Valentine, hasn’t fared was a dearth of bags with luxury” accessories. Spade, who is the brother of the entire Spade family at this brand in 2006 to Liz Claiborne as well, people familiar with clean, simple shapes. —Sara Germano actor David Spade. The cou- time.” Inc., which later changed its the situation said. Some retail- The couple debuted the contributed to this article. U.S. WATCH Splashdown in Texas to Beat the June Heat

NEW YORK WHITE HOUSE Weinstein Enters Worker Faces Charge Not-Guilty Plea Of Attempted Murder Famed Hollywood producer A White House contract em- Harvey Weinstein pleaded not ployee wanted on an attempted guilty to sex-crime charges dur- murder charge was ar- ing a court proceeding that high- rested Tuesday as he came to lighted the challenges of trying a work at the tightly regulated high-profile case under intense presidential compound, according media attention. to law-enforcement officials. A clerk in state Supreme Martese Edwards, 29 years Court in Manhattan asked Mr. old, was expected to face extra- Weinstein how he would plead dition to Maryland, the officials to the charges, which are first- said. It couldn’t immediately be and third-degree rape and first- determined if he had a lawyer. degree criminal sexual act. “Not Secret Service officers ar- guilty,” Mr. Weinstein replied. rested Mr. Edwards at a check- Justice James Burke set Mr. point outside the White House Weinstein’s next appearance for when he arrived for work. The Sept. 20. Mr. Weinstein is free Secret Service wouldn’t say on $1 million bail. whether he was inside or outside During Tuesday’s arraignment, the gates when he was arrested. Benjamin Brafman, an attorney A photograph shot by the for Mr. Weinstein, accused the Washington Post showed a man “law-enforcement community” of in a suit, identified as Mr. Ed- being “prolific” in leaking infor- wards, being escorted out of the mation. He then mentioned a Eisenhower Executive Office former New York Police Depart- Building, the complex next to

ment official by name. the White House that serves as ERIC GAY/ASSOCIATED PRESS An NYPD spokesman didn’t home for much of the staff TUBULAR TIME: The Guadalupe River offered a cool place to play Tuesday in New Braunfels, Texas, where temperatures neared 100. immediately respond to a re- working for the president, includ- quest for comment. ing the National Security Council. Assistant District Attorney The Secret Service said Mr. Joan Illuzzi said prosecutors Edwards’s name turned versed photo images, missing posting the liner-note material, leases. weren’t the ones “who went out up Monday in a criminal data- Clash Over songs, faulty song order and so he called around to record “It’s my life goal,” he said. to the courtroom steps and were base as being wanted by author- incorrect song length. companies to ask permission: Reached at the London talking about a casting couch.” ities in nearby Prince George’s Frustrated liner-note moni- “No one cared.” bookshop she co-owns, Ms. After Mr. Weinstein’s first County, Md. Album tors find that no matter how To make his case for a date- Smith said Mr. Marin might be court appearance, Mr. Brafman White House officials declined loudly they crow about the change to Sept. 20, Mr. Marin, correct, but “I don’t care what told reporters that Mr. Weinstein to comment on Mr. Edwards’s flubs to record companies and the Clash fan, produced a dateitis.” “did not invent the casting couch job, or to discuss how long he Notes the artists themselves, their photo booklet outlining his evi- Touring with the band was in Hollywood.” had worked there. pleas fall on deaf ears. dence and mailed a copy to “completely madcap,” she said, —Corinne Ramey —Dion Nissenbaum ContinuedfromPageOne Most people in a position to Pennie Smith, the famous rock and she wouldn’t immediately has—is dated Sept. 20. correct don’t care or don’t photographer who took the date every photo contact sheet “I’ve been stewing about want to turn back the dial, es- guitar-smashing picture. she developed. Joe Strummer, this for more than 35 years,” pecially since they won’t be is- He followed up with an 11- the band’s frontman, who died said Mr. Marin, now a 59-year- suing a lot of albums and CDs minute, three-second YouTube in 2002, picked the guitar- old retired salesman living in in the future. video that showed ticket stub smashing photo, she said, for Pleasantville, N.Y. “That was and recordings of the two the cover. my one and only guitar Clash over smash Manhattan shows, one on Sept. “I don’t know when the smash—I had a perfect view.” 20 and one the next day, that wretched thing was taken,” she He regularly monitors Twit- Mr. Marin believes are being said. ter and other social media for confused. Officials at Epic Records mentions of the Sept. 21 date His video showed photo- didn’t respond to requests for and then sends proctoring graphs of Mr. Simonon’s bass comment. Mr. Simonon didn’t messages correcting the re- guitars for each show—which respond to requests for com- cord. Many recipients are glad don’t appear to be the same— ment. Other band members to be enlightened, but some and footage of portions of the couldn't be reached. think Mr. Marin is marching to Sept. 21 show. He analyzed the Mr. Marin often quotes lyrics an odd tune—taken with an ar- band members’ attire. from the song “Crosseyed and tifact of a bygone era, like the So far, the surviving mem- Painless” by the Talking Heads, 8-track cassette. Rene Rodriguez, a financial bers of the Clash, Ms. Smith which he saw perform the same Mr. Marin is a member of an adviser in Los Angeles, and Epic Records, which re- year he saw the Clash. informal coterie on a quest to launched albumlinernotes.com leased “London Calling” in the “Facts are simple and facts amend album liner notes—in- in 2007—“The #1 Archive of U.S. and is today owned by are straight formation printed on covers, Liner Notes in the World!”— Sony Music Entertainment, Facts are lazy and facts are cases and sleeves of records and has at least 750 in his da- have “shown absolutely no in- late and CDs. tabase. As soon as he started, terest,” despite his requests, Facts all come with points Liner notes were pop cul- the liner-note police began Mr. Marin lamented. of view ture mainstays, from a time seeking fixes. He plans to persist until the Facts don’t do what I want when teens and college stu- “They think that I am going date is changed on future re- them to” dents spent hours in their to change it on their word,” he rooms analyzing covers, lyrics said, “but I can’t. I have to stay THE WALL STREET JOURNAL and acknowledgments. The historically accurate.” (USPS 664-880) (Eastern Edition ISSN 0099-9660) digital era muted that pastime; Mr. Rodriguez initially wor- (Central Edition ISSN 1092-0935) (Western Edition ISSN 0193-2241) music is streamed over the in- ried about copyright issues of Editorial and publication headquarters: 1211 Avenue of the Americas, New York, N.Y. 10036 ternet to laptops, phones and Published daily except Sundays and general legal holidays. other devices. Periodicals postage paid at New York, N.Y., and other mailing offices. Liner-note purists refuse to CORRECTIONS Postmaster: Send address changes to The Wall Street Journal, move on. On online message 200 Burnett Rd., Chicopee, MA 01020. boards, they trade intelligence AMPLIFICATIONS All Advertising published in The Wall Street Journal is subject to the applicable rate card, copies of about apparent bloopers in 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. liner notes for albums by Frank Only publication of an advertisement shall constitute final acceptance of the advertiser’s order. Zappa, The Beatles and others. Joanne Anderson,anOre- Letters to the Editor: Fax: 212-416-2891; email: [email protected] Steve Hoffman Music Fo- gon woman who won a lawsuit rums, based in California, and against Johnson & Johnson, is NEED ASSISTANCE WITH YOUR SUBSCRIPTION? Black Cat Bone, a British music 68 years old. A May 29 Busi- By web: customercenter.wsj.com; By email: [email protected] chat board, both have discus- ness News article about meso- By phone: 1-800-JOURNAL (1-800-568-7625); Or by live chat at wsj.com/livechat sion threads on liner-note mis- thelioma lawsuits against J&J takes. Fans vent about typos, incorrectly said she is 66. REPRINTS & LICENSING misspelled musicians’ names, By email: [email protected]; By phone: 1-800-843-0008 producers denied credit, vocals Readers can alert The Wall Street Journal to any errors in news articles attributed to the wrong per- by emailing [email protected] or GOT A TIP FOR US? SUBMIT IT AT WSJ.COM/TIPS son, omitted capitalization, re- by calling 888-410-2667. THE WALL STREET JOURNAL. **** Wednesday, June 6, 2018 | A3 U.S. NEWS MARK MAKELA/GETTY IMAGES Other states, including New Jersey, Mississippi and West Virginia are expected to soon join Delaware in offering sports betting. Sports Betting Expands Delaware is first state the World Series,” Mr. Barton in Delaware included single- horse races. shouted, drawing whoops from game and championship wa- The casino industry could to add gambling on a casino teller wearing a gering on professional base- use a boost. Delaware, like games since May’s striped referee jersey. ball, football, basketball and other East Coast states that Delaware became the first soccer. were early to adopt casino Supreme Court ruling state outside Nevada to allow Despite the hype, casino op- gambling, has been hit hard by bets on individual sports erators say expectations are more recent competition from BY SCOTT CALVERT games, as its three casinos si- modest. William Fasy, presi- other states. Mr. Fasy said Del- AND KATE KING multaneously launched full- dent of Delaware Park, said aware Park’s slots revenue was scale sports gambling. sports betting wasn’t likely to 40% of what it was in 2006. WILMINGTON, Del.— Several other states are ex- be a big moneymaker. Still, he In New Jersey, lawmakers Shortly after 1:30 p.m. Tues- pected to follow, hoping to tap said he was “super excited” are set to hold final votes day, professional sports new gambling revenue in a because of the potential to en- Thursday on legislation to reg- handicapper Tom Barton saturated casino market. The tice more people to the casino ulate sports wagers. slapped down $1,000 at the rush to cash in on sports wa- and horse track. Other states, including Mis- Casino at Delaware Park here, gering comes after the high The World Cup should at- sissippi and West Virginia, making him among the first court ruled last month in favor tract a younger, more ethni- passed sports-betting legisla- people in the state to take of New Jersey, which had chal- cally diverse crowd, he said. tion ahead of the Supreme advantage of a recent U.S. lenged a 1992 federal law that “And college football? It’s go- Court decision, and officials in Supreme Court decision le- had prohibited wagers on indi- ing to be nuts on a Saturday” those states said they are galizing sports betting. vidual sports games in all in the fall, he said, adding that working now to get regula- “One thousand dollars on states except Nevada. he hopes those visitors will tions in place in time for foot- the New York Yankees to win The betting offered Tuesday also play slots and bet on ball season. Social Security to Tap Into Reserves

BY DAVID HARRISON Medicare’s hospital insurance ers for every Social Security re- than projected in last year’s re- fund would be depleted in cipient, down from 3.3 in 2007. port. The Social Security pro- 2026, three years earlier than Treasury Secretary Steven The disability fund is ex- gram’s costs will exceed its in- anticipated in last year’s report. Mnuchin said in a statement pected to run out in 2032, as come this year for the first time Absent changes, the program that the Trump administra- opposed to 2028 as forecast in since 1982, forcing the program then would be able to handle tion’s efforts to cut taxes, re- last year’s report. The pro- to dip into its nearly $3 trillion 91%ofcosts. duce regulatory burdens and gram’s financial health has im- trust fund to cover benefits. The nation’s aging popula- overhaul trade agreements proved in recent years as the This is three years sooner tion is boosting the costs of So- would boost economic growth growth in disability applica- than expected a year ago, partly cial Security and Medicare, and generate new money for tions has fallen, the report said. due to lower economic growth while revenue gains lag due to The tax cuts signed into law projections, according to the slower growth in the economy last year have slightly lowered LUMINOR SUBMERSIBLE 1950 3 DAYS CHRONO FLYBACK AUTOMATIC latest annual report the trust- and the labor force. Medicare and Social Security’s TITANIO - 47MM ees of Social Security and About 61.5 million people re- The retirement projected revenue over the (REF. 615) Medicare released Tuesday. The ceive retirement or disability program’s reserves next few years. Lower income- program’s income comes from benefits from Social Security tax rates reduced projected tax revenue and interest from and 58.4 million receive Medi- are now projected to revenue from the taxation of its trust fund. care. be depleted in 2034. Social Security benefits. That The trust fund will be de- The Social Security program means less money flowing into pleted in 2034 and Social Secu- works by using payroll taxes both programs because that rity will no longer be able to paid by workers and employers revenues is transferred to the pay its full scheduled benefits to pay for retirees’ benefits. the country’s two largest enti- trust funds. unless Congress takes action to What is left over is invested in tlement programs. President Donald Trump’s shore up the program’s fi- the trust fund. Interest earned Social Security consists of decision to end a program of- nances. Without any changes, is reinvested in the fund. two programs, one for retirees fering young undocumented im- 700 FIFTH AVENUE & 55TH STREET. recipients then would receive Over time, the trust fund has and one for people who claim migrants reprieve from depor- NEWYORK.TEL.2123979000 only about three-quarters of grown to nearly $3 trillion. But disability benefits. tation while allowing them to their scheduled benefits from long-running demographic The retirement program’s re- work also reduced anticipated incoming tax revenue. trends threaten its finances. serves are projected to be de- tax revenue into the Social Se- The report also said that Last year, there were 2.8 work- pleted in 2034, a year sooner curity program, the report said. Gymnastics Brass Knew of Abuse Claims

BY LOUISE RADNOFSKY complaints of possible sexual AND REBECCA DAVIS O’BRIEN abuse. It doesn’t appear that SOAK UP THE Nassar actually appeared at the WASHINGTON—A half congress. dozen high-ranking USA Gym- Others at the top were nastics officials were aware of looped in sooner than has been sexual-misconduct allegations previously reported, according against team physician Larry to Ms. Faehn. One email Ms. SALE Nassar during the year in Faehn submitted to the com- which gymnasts’ claims lan- mittee indicates that Mr. Penny guished at the Federal Bureau had told the top officials on the DESIGNER COLLECTIONS of Investigation, a former em- USA Gymnastics board, includ- ployee of the organization told ing then-chairman and 1984 ARE UP TO U.S. senators Tuesday. Olympic hero Peter Vidmar, Rhonda Faehn, who was and several key employees fired in April as the women’s about the complaints against program director for USA Gym- Nassar by July 2015.

nastics, presented a vivid pic- REBECCA COOK/REUTERS Mr. Vidmar announced in * ture of how the organization Larry Nassar is now serving three effective life sentences. December 2015 he was step- 60%FF grappled with claims about ping down as chairman to Nassar after they were brought questions. Robert Bittman, an of a broad restructuring at the serve as a Mormon mission in to Ms. Faehn’s attention by a attorney for Mr. Penny, said af- group; she said at the time that Australia. He hasn’t responded gymnast’s coach in June 2015, ter he left the hearing that his athletes’ welfare had been her to requests for comment. according to her prepared client “has devoted his profes- “absolute top priority.” USA Gymnastics has long statement and exhibits of inter- sional life to promoting the de- “My goal in immediately re- maintained that officials re- nal communication. velopment of athletes at all lev- porting complaints to my supe- ported concerns about Nassar Those claims against Nas- els in a safe and positive rior at USA Gymnastics was to law enforcement in 2015 and sar—who is now serving three environment,” was “repulsed” and always has been to protect were told they shouldn’t say BARNEYS.COM NEW YORK BEVERLY HILLS SAN FRANCISCO effective life sentences after his by Nassar’s crimes and had and care for the athletes I anything to avoid jeopardizing CHICAGO BOSTON LAS VEGAS PHILADELPHIA SEATTLE conviction on sexual-abuse opted not to speak at the hear- served,” Ms. Faehn said, adding investigators’ efforts. FOR INSIDER FASHION ACCESS: THEWINDOW.BARNEYS.COM charges—have brought USA ing “while the matters that at- that she was told regularly that Lou Anna Simon, the former Gymnastics to the brink of col- tempt to wrongly shift blame for the issue was being handled by president of Michigan State lapse, toppling its leadership as Nassar’s crimes remain open.” law enforcement and that it University, which employed well as that of Michigan State In her prepared remarks, was important for the investi- Nassar as an osteopathic physi- University and the U.S. Olympic Ms. Faehn—who was fired from gation not to discuss it. cian, has submitted testimony Committee. USA Gymnastics last month in In one instance, in February and is also expected to appear. Steve Penny, who resigned as the middle of a training 2016, some USA Gymnastics of- Scott Blackmun, the former USA Gymnastics president and camp—laid out USA Gymnas- ficials asked Nassar to be a head of the USOC, and Martha chief executive under pressure tics’ internal grappling in the guest speaker at the USA Gym- Karolyi, who retired as national in March 2017, was at the com- weeks and months after she re- nastics Congress, even though coordinator for the women’s *Up to 60 percent off regular prices on select clothing, shoes, and accessories for women, men, and children, as well as gifts for the home. mittee hearing Tuesday after- ported Nassar to Mr. Penny. the doctor had been dismissed team after the 2016 Rio Games, Specific exclusions apply. See store associate for details. noon, but he declined to answer Ms. Faehn’s firing came as part from the organization amid sent written testimony. A4 | Wednesday, June 6, 2018 PWLC101112HTGKBFAM123456789OIXX ** THE WALL STREET JOURNAL. U.S. NEWS David Koch to Retire From Politics, Firm Billionaire businessman, Industries,” the letter says, ac- els, carpets and other prod- then-President Barack Obama’s cording to a copy reviewed by ucts. first term. influential Republican The Wall Street Journal. The Kochs’ activism and “This is a huge loss for us,” stepping aside amid David Koch, 78 years old, campaign spending have long said Tim Phillips, long-serving has long served as vice presi- made them political lightning president of Americans for deteriorating health dent of Koch Industries and rods. Democrats and their al- Prosperity. been active in Republican poli- lies have pointed to the Koch Koch groups made opposing BY JULIE BYKOWICZ tics, conservative organizations brothers in pushing for limits and then repealing Mr. and philanthropic groups. At on such spending. In his Dem- Obama’s health-care legisla- WASHINGTON—Billionaire the center of the Koch broth- ocratic National Convention tion their signature issue in businessman David Koch, who ers’ political influence is their speech in 2016, Sen. Bernie recent years. along with his brother has network of like-minded, typi- Sanders (I., Vt.) argued that They have quietly opposed used his fortune to help re- cally libertarian or conserva- wealthy donors such as the many of President Donald shape Republican politics, is tive, wealthy GOP donors. Koch brothers “spend hun- Trump’s statements, particu- retiring from his family-owned The pair’s network grew dreds of millions of dollars larly about immigration, and company and all political or- from 12 people at their first buying elections and, in the didn’t directly contribute to ganizations. conference in 2003 to more process, undermine American his 2016 presidential run. On

A letter to Koch Industries than 550 at a retreat this year TRAVIS HEYING/THE WICHITAdemocracy.” EAGLE/ASSOCIATED PRESS Monday, Koch-backed groups Inc. employees from Chairman near Palm Springs, Calif. Each David Koch and his brother Charles helped fuel the tea party. David Koch’s political in- announced a multimillion-dol- and Chief Executive Charles attendee gives at least volvement traces back to his lar campaign to oppose Mr. Koch on Tuesday attributed $100,000 annually to fund uary that such groups planned this country,” said Steve Lom- stint as a vice-presidential Trump’s tariffs on imports. his brother’s decision to dete- scholarships, startup-company to spend as much as $400 mil- bardo, chief communications candidate on the 1980 Liber- David Koch was diagnosed riorating health. The letter investments, institutions and lion in 2017 and 2018 to help officer for Koch Industries. tarian Party ticket. After start- more than two decades ago cites an undisclosed health is- political and policy groups. elect Republicans and promote The company is one of the ing the seminar group in 2003, with prostate cancer and has sue that put him in the hospi- Most policy and political policy issues such as free trade country’s largest private cor- Charles and David Koch be- since “made it his mission to tal in the summer of 2016. operations are conducted and the tax legislation signed porations, employing more came a force in Republican help find a cure for prostate “We are deeply saddened through Americans for Pros- into law late last year. than 120,000 people across 60 politics. Through contribu- cancer in his lifetime,” accord- by this, as we miss David’s in- perity and Freedom Partners. “David has contributed countries, according to its tions to Americans for Pros- ing to his biography. sightful questions and his James Davis, spokesman for greatly to Koch Industries and website. It operates refineries perity, they helped fuel the —Alexandra Bruell many contributions to Koch Freedom Partners, said in Jan- improving people’s lives in and manufactures paper tow- tea-party movement during contributed to this article. McConnell Wants Senators Lacking Leaders The Justice Department is operating without Senate-conﬁrmed leaders over many of its important At Work on Issues in August divisions. Ofﬁcials say that has kept the department from fully implementing its agenda.

Attorney Deputy Attorney Divisions without BY KRISTINA PETERSON nell has criticized Democrats lins (R., Maine). General General Senate-conﬁrmed AND NATALIE ANDREWS for not waiving procedural Senators are now expected leader or permanent Jeff Sessions Rod Rosenstein appointment votes on the nominations, eat- to go to their home states for WASHINGTON—Majority ing up precious floor time. the first week of August be- Leader Mitch McConnell can- “Due to the historic obstruc- fore returning to Washington celed much of the Senate’s Au- tion by Senate Democrats of the for the rest of the month. That gust recess, saying the cham- president’s nominees, and the may pose political problems in ber will remain in session to goal of passing appropriations particular for the group of vul- work on spending bills and bills prior to the end of the fiscal nerable Senate Democrats who confirming nominees. year, the August recess has been are up for re-election in states Tuesday’s move is unusual canceled,” Mr. McConnell said in that Mr. Trump won in 2016 Solicitor Associate Legislative DEA National during a midterm-election a statement. “Senators should and will now have less time to General Attorney Affairs Security year, when lawmakers typi- expect to remain in session in campaign at home. General cally spend more time in their August to pass legislation, in- Democrats said they would Legal Criminal Pardon home states to campaign. cluding appropriations bills, and use the additional time in Wash- Counsel Div. Attorney Mr. McConnell (R., Ky.) to make additional progress on ington to press Republicans to blamed Senate Democrats, say- the president’s nominees.” pass legislation lowering the Antitrust Div. Legal FBI ing they had delayed confirma- Not all senators were look- cost of health-care premiums. Policy tion of President Donald ing forward to staying in Senate Minority Leader Civil Div. Bureau of Trump’s nominees. Senate Washington during August. Chuck Schumer (D., N.Y.) ar- Prisons rules allow nominees to be “It plays into a false narra- gued Democrats would benefit Civil Rights Div. confirmed with a simple major- tive that we haven’t done any- politically from the extra time ity, and Republicans control the thing, so I disagree with the they will devote to health care, Environ. and Alcohol, Tobacco, chamber 51-49. But Mr. McCon- decision,” said Sen. Susan Col- a core issue for many voters. Nat. Res. Div. Firearms and Tax Div. Explosives Div. U.S. Marshals

Photos from Zuma Press Source: Justice Department THE WALL STREET JOURNAL. nies and citizens, as well as in- civil work, including antitrust BEST VALUE dictments and guilty pleas for and civil rights, and isn’t in- Job Search several top Trump campaign volved in criminal or national advisers on charges including security matters. But the post tax and bank fraud and lying is third in line at the depart- PURE COTTON At Justice to law enforcement. ment, so that person would be- Officials have informally ap- come acting attorney general if NON-IRON proached at least three poten- the top two officials were un- Is on Hold tial candidates for the post, in- available. cluding attorneys Helgi Walker Whoever takes on the asso- ContinuedfromPageOne and Kate Todd, who said they ciate’s job would do so at a DRESS SHIRT the delays have strained re- wouldn’t be interested in tak- time of intense political pres- sources and limited the ing on the job right now, ac- sure on the department from agency’s ability to fully enact cording to the people familiar Mr. Trump and his allies. ANYWHERE. and implement new policies. with the matter. Both declined Mr. Trump remains angered The Justice Department de- to comment. by Mr. Sessions’ decision to re- clined to comment. The White Ms. Walker, a partner in cuse himself more than a year House didn’t respond to a re- Washington at the law firm later, and has never been able YOU quest to comment. Gibson, Dunn & Crutcher, is an to put it behind him and forgive The associate attorney gen- appellate lawyer who worked in his attorney general, people SAVE eral position could be particu- the White House Counsel’s Of- close to the White House said, larly important in the context fice under President George W. though they said it was unlikely 70% of the Russia probe. Bush and clerked for Supreme for now that Mr. Trump would If Mr. Rosenstein were to de- Court Justice Clarence Thomas. take any action to remove him. part—he also has been criti- Ms. Todd also served in the The president also expressed cized by the president—the as- White House and clerked for frustration on Tuesday with the sociate would potentially Justice Thomas. pace of a Justice Department oversee Mr. Mueller. If the No. 3 The associate attorney gen- inspector general report on the UNBEATABLE position remains unfilled, that eral post has been filled by an handling of a 2016 probe into task would likely fall to Solici- acting official, Jesse Panuccio, Hillary Clinton’s email use, INTRODUCTORY tor General Noel Francisco, since February, when Rachel which is nearing release. For- whose usual job is arguing be- Brand left to take a top legal mer FBI Director James Comey OFFER fore the Supreme Court. job at Walmart Inc. had overseen that probe. Mr. Some Justice Department Although skilled, acting of- Trump fired Mr. Comey last nominees have been awaiting ficials may be reluctant to set year, a move that led directly to $24.95 Senate confirmation for long-term priorities, and they Mr. Mueller’s appointment. months. The heads of the crimi- “may not be able to bring to “What is taking so long with REG $89.50 nal and civil-rights division bear the same weight and full the Inspector General’s Report were named a year ago but ha- legitimacy to the making of on Crooked Hillary and Slippery ven’t been scheduled for a Sen- difficult decisions as can a James Comey,” Mr. Trump ate vote, an unusual delay when Senate-confirmed official,” tweeted. “Numerous delays. PLUS, the White House and Senate are said Peter Keisler, who served Hope Report is not being FREE MONOGRAMMING controlled by the same party. as acting attorney general un- changed and made weaker! One factor in the slow pace der Mr. Bush. “That’s not ideal There are so many horrible REG $10.95 is lawmakers’ concerns related for either the department as things to tell, the public has the to Mr. Mueller’s investigation, an institution or the country,” right to know. Transparency!” ADD THIS TIE FOR JUST $19.95 with Democrats pressing nomi- Mr. Keisler added. —Rebecca Ballhaus REG $72.50 nees about how they would The associate attorney gen- and Peter Nicholas handle the probe should they eral oversees the department’s contributed to this article. become involved in it and some WHITE 100% COTTON PINPOINT / NEAT WRINKLE-FREE WEAR Republicans making other demands of the department be- Trump, Accuser for depositions in a case EASY NON-IRON CARE / 4 COLLAR STYLES fore committing to a vote. brought by Summer Zervos, a BUTTON OR FRENCH CUFF / REGULAR, BIG & TALL & SLIM FIT The situation at the Justice To Be Deposed former contestant on “The Ap- Department is emblematic of prentice.” the administration’s broader Ms. Zervos has said Mr. struggle to see nominees con- A New York judge on Tues- Trump groped and kissed her firmed. Senate Majority Leader day ordered President Donald without consent about a decade PAULFREDRICK.COM/INTRO Mitch McConnell (R., Ky.) on Trump and a woman claiming ago. After Mr. Trump suggested Tuesday canceled the August he made unwanted sexual ad- on Twitter, at campaign rallies PROMO CODE T8MPWB 800-309-6000 recess, in part to “make addi- vances to be deposed by the and during presidential debates tional progress on the presi- end of January in a defamation that her story was a “hoax” dent’s nominees.” lawsuit that the president’s law- ginned up for attention, Ms. Zer- Anyone nominated as asso- yers say shouldn’t be heard vos sued, claiming he had “de- GUARANTEED PERFECT FIT. ciate attorney general would while he is in office. based and denigrated” her with Free Exchanges. Easy Returns. New customer likely face the same protracted Justice Jennifer Schecter, false statements. The president offer. Limit 4 shirts. Imported. Shipping extra. confirmation process, with a who weeks earlier ruled that has said her lawsuit has no Senate hearing dominated by the case shouldn’t have to be merit and has denied the sex- Expires 7/31/18. questions about the Russia delayed to accommodate a sit- ual-misconduct accusations. probe, which has returned in- ting president, set a schedule —Jacob Gershman dictments of Russian compa- THE WALL STREET JOURNAL. ***** Wednesday, June 6, 2018 | A5 U.S. NEWS

GOP Gets Eight States Hold Primary Elections California's primaries on Tuesday—a system that allows Backing the top two vote getters to advance, no matter their party—could leave Democrats For Votes without a candidate in some House races in November. Other states offer multiple On Border opportunities for Democrats to pick up GOP House seats. BY NATALIE ANDREWS GOP-held seats State rated competitive WASHINGTON — Republi- Pa. 1st 5th 6th 7th 17th cans edged closer to forcing a N.J. 2nd 3rd 7th 11th series of immigration votes, as some Democratic lawmakers Va. 2nd 5th 7th 10th who held out over policy and Fla. 18th 26th 27th political concerns signed on to Ill. 6th 12th 14th the effort. N.Y. 11th 19th 22nd On Tuesday, two Demo- Texas 7th 23rd 32nd cratic holdouts, Texas Reps. Iowa 1st 3rd Filemon Vela and Vicente Gon- zalez, announced they would Kan. 2nd 3rd sign, leaving three signatures Mich. 8th 11th needed to force a vote using a Minn. 2nd 3rd procedural tool called a dis- N.C. 9th 13th charge petition to circumvent Ohio 1st 12th House GOP leaders and compel votes on four immigration Wash. 5th 8th measures on the House floor. Note: Only states with multiple competitive districts shown. Ten other states have one In all, 23 House Republicans competitive district. California has ﬁve

and 192 Democrats—all but EILEEN MESLAR/TELEGRAPH HERALD/ASSOCIATED PRESS Republican seats listed as toss ups before Texas Rep. Henry Cuellar— AT THE POLLS: Voters cast their ballots in Dubuque, Iowa, Tuesday. Iowa and seven other states, including most notably California, held Tuesday's primary. have signed on to the biparti- primaries, a major step in setting the stage for the battle over control of Congress in the midterm elections in November. Source: Cook Political Report san immigration push. The petition would set up votes on four proposals, some of which contain border-security funding. Under the procedural ma- neuver, the plan with the most Incumbent in Alabama Forced Into Runoff votes over 218 would pass. Some Democrats are worry- BY REID J. EPSTEIN ers who each campaigned at- with 65% support. A Tea have to defend his own past Cindy Axne, a small-business ing they may be handing vul- tacking Ms. Roby for being Party-aligned write-in candi- endorsements of President Ba- owner and former state gov- nerable Republicans a win WASHINGTON—Alabama disloyal to the president. date received 11% of the vote. rack Obama and his vote to ernment official, who had sup- ahead of the midterm election. Republicans punished GOP Mr. Bright had represented During this year’s cam- make Nancy Pelosi House port from the abortion-rights “I think that right now they Rep. Martha Roby for her dis- the southeast Alabama district paign, Ms. Roby touted her speaker in 2009 before he group Emily’s List. Ms. Axne are getting all of the benefits avowal of President Donald as a Democrat before losing to “working relationship” with switched parties. defeated both Mr. D’Ales- of acting like they’re doing Trump during the 2016 cam- Ms. Roby in 2010. the Trump administration. The Cook Political Report sandro and Eddie Mauro, an something on immigration re- paign, forcing the four-term In his TV ads, he called rates the district “safe Repub- insurance executive. form and helping DACA with- incumbent into a primary run- himself “a true supporter of lican.” Democrats nominated In New Jersey, Democratic out actually putting a bill for- off to retain her seat. President Trump” and re- Rep. Martha Tabitha Isner, a minister. Sen. Robert Menendez turned ward for a vote,” said Rep. Alabama was one of several played two-year-old footage of Roby during Elsewhere, in a closely back a surprisingly stiff chal- Jimmy Gomez (D., Calif.). states to hold primaries on Ms. Roby calling for Mr. the campaign watched House primary in lenge from Lisa McCormick, a The centrist Republicans Tuesday. While the outcome Trump to drop out of the 2016 touted her Iowa, Pete D’Alessandro, who weekly newspaper publisher pushing for the votes are there showed promise for a presidential campaign af- relationship had the full-throated support whose campaign was so among those who face the GOP insurgent candidate, Iowa ter video emerged of the for- with the of Mr. Sanders, placed a dis- threadbare it didn’t submit most competitive races in No- Democrats chose a main- mer reality-show star bragging administration. tant third. fundraising data to the Federal vember and who hold seats stream standard-bearer to run about groping and kissing Mr. D’Alessandro becomes Election Commission. Democrats have called must- in a congressional district in women without their consent. the latest Sanders-backed In 2015, Mr. Menendez was wins in the effort to win back Des Moines, rejecting a Bernie “Donald Trump’s behavior Both candidates could have Democratic primary candidate indicted on federal corruption control of the House. Leading Sanders acolyte who was run- makes him unacceptable as a steep challenges in the runoff. to lose to candidates favored charges. The case ended in a the cause are Republicans in ning there. candidate for president, and I Ms. Roby will have to per- by the party’s establishment. mistrial due to a deadlocked districts that Democratic pres- The Associated Press de- won’t vote for him,” she said suade a portion of the Republi- Just one of five House candi- jury and prosecutors earlier idential nominee Hillary Clin- clared Ms. Roby will face a then. cans who rejected her in Tues- dates endorsed by Mr. Sanders this year declined to try it ton won in 2016, such as Reps. July runoff with former Rep. Ms. Roby won re-election in day’s primary to change their have prevailed in competitive again. Mr. Menendez insisted Jeff Denham (R., Calif.) and Bobby Bright, who emerged 2016 with just 49% of the vote minds about her candidacy. primaries this year. he was innocent throughout Will Hurd (R., Texas). from four Republican challeng- in a district Mr. Trump carried Meanwhile, Mr. Bright will Mr. D’Alessandro lost to the ordeal.

ers to meet the demand for ator at Williams Metals and Openings their products or services, Welding Alloys in Birmingham, they can’t expand and help Ala. Last month, the company the economy grow. They may asked him to take a full-time Exceed instead opt to close their res- position with health benefits taurant early or not run a and retirement savings. third shift at their factory. “I feel like I broke the cy- Jobless Businesses may need to pay cle,” he said. more to attract workers, as There are, however, still an ContinuedfromPageOne some already are. That raises elevated number of Ameri- others who feel they are work- costs and will cut profit mar- cans who are stuck in part- ing below their skill level. gins if higher prices can’t be time jobs and would prefer The labor market is forcing passed on to customers. If full-time work. And others are employers to rethink their ap- prices are raised, that stokes employed but not in the jobs proach to hiring, said Terri stronger inflation, which al- they want. Greeno, owner of an Express ready has been accelerating in Those include John Matous, Employment Professionals of- recent months. a 38-year-old who works at a fice in Crystal Lake, Ill. She is Federal Reserve policy mak- McDonald’s in Mason City, asking clients if they are being ers are watching closely. Emer- Iowa. He is an Army veteran realistic in their demands for gence of worker shortages and with an associate degree in workers with clean criminal stronger inflation could signal medical administration from a histories and higher levels of the economy is overheating, local community college. He education. would like to work at doctor’s “Is it a health and safety is- office but so far has been sue? If not, you have to ask if turned down. those demands are really re- The labor market is “I just need a chance to lated to the outcome on the forcing employers to prove myself,” he said. job,” Ms. Greeno said. “When Meanwhile, the share of the unemployment rate is this rethink their Americans who are working or low, you’re really competing approach to hiring. seeking work has generally de- for workers who already have clined for almost two decades. jobs.” That gives employers fewer Her staffing firm is taking potential workers to draw extra steps to fill light indus- raising the need to lift interest from, but also suggests there trial and office jobs, reaching rates more aggressively than remain hundreds of thousands out to 45,000 people it has the slow, moderate path they of people who could be drawn placed in positions in the past have signaled. back into the labor force. THE ART OF FUSION 15 years and asking if friends For now, the strong job mar- They may be waiting for or family would be willing to ket is opening up possibilities better wages. Hourly pay for take on work. for those who have struggled in nonsupervisors rose 2.8% in “This is a very tight labor recent years. Geremy Mincey, May from a year earlier, the market,” said Adam Kamins, a 26 years old, had bounced be- best annual gain since senior economist at Moody’s tween temporary jobs since mid-2009. But the last time Analytics. “Most everyone who dropping out of college seven unemployment was this low, wants a job has one.” years ago, working at factories, wages for those workers rose For workers, that is good fast-food restaurants and even 3.9% from a year earlier. BIGBANGUNICO news. On the other hand, a as a shopping mall Easter The largest number of April tighter labor market presents Bunny. He would often go job openings, 1.3 million, were in DEPECHE MODE several challenges to busi- months between paychecks. the broad business-services sec- CERAMIC nesses and the overall econ- Earlier this year, he landed tor, which includes everything omy. If they can’t find work- a temporary job as a saw oper- from accountants and software developers to temporary staffers and clerical workers. There were also ample job openings in some of the lowest-paying fields, such as 844,000 hotel and food-service jobs in April and 735,000 unfilled retail positions. To attract workers, the Saladworks restaurant chain has raised its starting wages about 5%. It also has relaxed standards on tattoos and pierc- ings, allowed employees to wear jeans and bandannas and become more flexible about schedules. “If you tell someone they can’t have Friday off for prom, they’ll quit,” Chief Exec-

SPENCER PLATT/GETTY IMAGES utive Patrick Sugrue said. The U.S. unemployment rate fell in May to a seasonally adjusted “They know they can find an- 3.8%, its lowest level since April 2000. other job on Monday.” A6 | Wednesday, June 6, 2018 **** THE WALL STREET JOURNAL. WORLD NEWS Nicaragua Political Crisis Turns Violent Confrontation with Ortega chills economic activity and clouds prospects for peace

BY JUAN MONTES AND JOSÉ DE CÓRDOBA

MANAGUA, Nicaragua—A surge of violence has snuffed out economic activity and dimmed prospects to peace- fully resolve a political crisis

here that began as a protest OSWALDO RIVAS/REUTERS against tax increases and President Daniel Ortega, left, spoke at a rally on April 30. Above, turned into a revolt against mourners gathered Sunday at the funeral of a 15-year-old who was Nicaragua’s longtime leader allegedly shot by a police officer during an antigovernment protest. Daniel Ortega. Since mid-April, more than Chávez, erected by Mr. Ortega, cities in a historical echo of 100 people have been killed in after protesters tried to knock the Sandinista revolution that confrontations with police it down during recent demon- overthrew the late dictator during mass protests and what strations. Anastasio Somoza. human-rights groups say are Throughout Nicaragua, bar- Mr. Ortega has hunkered paramilitary gangs aligned ricades have sprung up, block- down, perhaps taking a page with Mr. Ortega’s government. ing roads and snarling traffic, from Venezuela’s beleaguered Among them were 15 people and making the key Pan Ameri- President Nicolás Maduro, killed at a peaceful Mother’s can highway that links many of who has survived an economic Day protest march last month in the country’s cities impassable. meltdown, deadly street pro- Managua and 11 people by para- Tourism has been hit hard, ho- tests and world condemnation. military groups and police in tel managers say, with occupan- Few believe Mr. Ortega and the predominantly indigenous cies at major hotels plunging Ms. Murillo will step down or city of Masaya this past week- and some international airlines agree to hold early elections.

end, including a 15-year-old pro- INTI OCON/AGENCE FRANCE-PRESSE/GETTYparing IMAGES back flights. Last month, in a tense con- tester who witnesses say was “Economic activity has frontation with angry students executed by a policewoman. made Monday by Secretary of tative to the OAS, said Monday. usurped democratic institu- plummeted. People fear leav- at the opening of the now-sus- On Tuesday, violence flared State Mike Pompeo, who ac- Mr. Ortega, a former guer- tions and snuffed out political ing their homes,” said Pamela pended peace dialogue, Mr. in the quaint colonial city of cused Nicaraguan police and rilla leader who played a cen- opposition. Government plans Vanega, a waitress at a restau- Ortega recalled Nicaragua’s Granada, home to hundreds of armed pro-government groups tral role in the overthrow of to confiscate large tracts of rant in one of Managua’s larg- history of 20th-century civil American retirees. of killing dozens of protesters. the Somoza family dictatorship land to build a commercial wa- est malls. wars that left 50,000 dead. He “We are going through very “It was a wishy-washy reso- in 1979, was re-elected by a terway to rival the Panama Ca- Analysts say the surge in vi- warned students to put an end dark days,” said Humberto lution, Nicaragua demands landslide in 2016 after 16 years nal have cost the Ortegas rural olence has set back any hope of to the “irrational” and “diabol- Belli, a former education min- more urgent attention from out of power. He ran largely support. a peaceful resolution. A dia- ical violence that has exploded ister. “The people are out in the OAS than it’s gotten,” said unopposed after maneuvering “Managua and the country logue between Mr. Ortega’s in our country.” Mr. Ortega the street demanding that Or- Michael Shifter, president of to ban any real contenders. are no longer calm. Ortega has government and the opposi- said his government held no tega leave, but he has shown the Inter-American Dialogue, a Until the recent spate of vio- to go now,” said Claudia tion, sponsored by the influen- political prisoners and that an unexpected ability to kill. Washington-based think tank. lence, Nicaragua had enjoyed Guillén, a 19-year-old univer- tial Catholic Church, has been there are no protesters unac- We see more blood every Nicaragua’s government de- far lower levels of violent crime sity student. shelved. Nicaragua’s business counted for. day—three, four, five people nies links to paramilitary than its Central American The country’s capital of Ma- class, which until recently “That’s because you killed killed on a daily basis. This groups and says the unrest is neighbors El Salvador and Hon- nagua, a sprawling city of worked closely with Mr. Ortega, them all,” shouted one student. has no end.” the result of an opposition duras. Mr. Ortega also had been modest malls, street vendors is demanding new elections. One large question mark The Organization of Ameri- plot to overthrow it. Police ha- able to deliver high economic and office towers mixed with “My sense is that the situa- hanging over the regime’s sur- can States on Tuesday ap- ven’t addressed the alleged growth and apparent political open pastures, is now largely tion will continue to deterio- vival: can Mr. Ortega depend proved a mildly worded reso- police shooting of the teen. stability. Most Nicaraguans ap- deserted. Shops are closed and rate and the government will on the Nicaraguan army to de- lution calling for an immediate Nicaragua “is committed to peared content or resigned to vandalized. Few people ven- continue its repression,” said fend him if called upon? end of the violence and asking stability amidst this wave of the quid pro quo—until now. ture out at night. Walls are Eric Farnsworth, who heads “The army is key,” said all parties to participate in criminal violence generated by But many Nicaraguans say covered with graffiti calling the Washington office of think Frank Mora, head of Latin peaceful dialogue. The resolu- certain groups of the opposition they are fed up with Mr. Or- Mr. Ortega a murderer. A tank Council of the Americas. American Studies at Florida tion, co-sponsored by the U.S. which conspire from the dark- tega and his wife, the unpopu- group of police officers stand One possibility, Mr. Farns- International University. “It’s and Nicaragua, was much ness…to terrorize families,” Luis lar Vice President Rosario Mu- guard by a monument to the worth said: a civil insurrection not likely to repress if ordered weaker than declarations Alvarado, Nicaragua’s represen- rillo, who they say have late Venezuelan leader Hugo in Masaya and other provincial to do so.”

Jacob Sanchez Diagnosed with autism

Lack of speech is a sign of autism. Learn the others at autismspeaks.org/signs. A8 | Wednesday, June 6, 2018 ***** THE WALL STREET JOURNAL. WORLD NEWS Senators Waryof U.S. Shift on Pyongyang Members question time. said Tuesday that U.S. and in- witnesses—two former U.S. of- that he said showed increased lies heavily on China for criti- “North Korea has not taken ternational sanctions remain ficials—on whether pressure preparations in South Korea cal imports such as oil. Chi- whether North Korea any concrete or verifiable in place and there have been already had eased on the for more trade and aid. nese flag carrier Air China Ltd. is serious about giving steps,” said Sen. Cory Gardner no changes in U.S. policy. North Koreans. “There are things that are said on Tuesday it was resum- (R., Colo.), chairman of the “We remain committed to Joseph Yun, the former top already starting to be put in ing flights to North Korea’s up nuclear weapons Senate Foreign Relations Sub- the complete verifiable, irre- U.S. diplomat for North Korea motion that are being pre- capital, the latest indication of committee on East Asia, the versible, denuclearization of who retired earlier this year, sented as rewards to North improving ties between the BY JESSICA DONATI Pacific and International Cy- the Korean Peninsula,” Ms. said that Pyongyang already Korea for the steps they’ve al- two countries after tensions bersecurity Policy. Nauert said. “If you want to had halted weapons tests and ready taken.” over Pyongyang’s nuclear am- WASHINGTON—U.S. sena- The White House last week call that a hawkish thing or a appeared to have dismantled Senators from both parties bitions. tors cautioned the Trump ad- said that it was holding off a dovish thing, fine, so be it, one facility. also voiced concerns about Sen. Ed Markey (D., Mass.) ministration about the risk of fresh round of sanctions but our policy remains the “I don’t think you can have suspicions that Chinese en- said the U.S. needed to make moving too quickly to ease against North Korea to focus same.” serious engagement as well as forcement of strict U.N. sanc- clear that it was prepared to pressure on North Korea on preserving the summit be- The comments came as the maximum pressure,” Mr. Yun tions targeting North Korea’s counteract any easing by ahead of a planned summit tween the two leaders on June administration makes prepara- told the subcommittee. “When economy already had begun to China. next week between President 12 in Singapore. tions for the approaching your adversary takes a step, it slide, reversing months of “While the Trump adminis- Donald Trump and leader Kim Shortly afterward, Mr. summit. is also up to you to take a tighter pressure by Beijing. tration has said it has imposed Jong Un. Trump also scaled back his On Thursday, Japanese step.” China has said that it has max pressure, the truth is we Both Republicans and Dem- language and expectations, Prime Minister Shinzo Abe Former Bush administration maintained enforcement of haven’t yet reached that ocrats at a Senate hearing promising Friday to drop talk will visit the White House, negotiator Victor Cha told the sanctions against North Korea. level,” he said. “North Korea questioned whether Mr. Kim of “maximum pressure” on where he is expected to urge panel it appeared that Mr. Kim U.S. officials have said that must understand that even if was serious about giving up Pyongyang. continued pressure against had already started to benefit. while China is enforcing sanc- China eases the pressure, we his nuclear weapons, or simply At the State Department, North Korea. “I am concerned,” Mr. Cha tions, it could do more. in Congress are ready to step initiating a process to buy spokeswoman Heather Nauert Mr. Gardner questioned said, citing satellite imagery North Korea’s economy rein to tighten the screws.” Republican Resistance in Congress to Tariffs Grows

BY SIOBHAN HUGHES AND KRISTINA PETERSON Mexico Details WASHINGTON—Republi- Levies on Several cans are ratcheting up their American Products opposition to restrictive new tariffs that President Donald Trump advanced based on na- MEXICO CITY—Mexico tional security, with GOP law- published a list of U.S. goods makers threatening legislation that will face import tariffs in to rein in the White House. retaliation for the U.S. decision Sens. Bob Corker (R., Tenn.) to place duties on Mexican and Pat Toomey (R., Pa.) are steel and aluminum, including pushing to attach to a must- American staples such as cran- pass defense authorization bill berries, apples and bourbon. a measure to limit Mr. Trump’s The Economy Ministry power to use the 1962 Trade said the tariffs will remain in Expansion Act to impose tariffs effect as long as the U.S. based on national security con- continues to charge duties on cerns. Mexican steel and aluminum. The move on tariffs comes It estimates the value of the as the Republican president tariffs at about $3 billion. also faces headwinds from the Mexico slapped a 25% im- GOP-controlled Congress on port tariff on a wide range of the administration’s effort to steel products from the U.S., cut nearly $15 billion from the matching the U.S. steel duty. federal budget through a pack- The retaliatory measures also age of spending rescissions. include 20% on pork products, On trade, Republicans find 20% and 25% duties on themselves at an inflection cheeses, and a 25% duty on point now that the administra- bourbon. Cranberries made tion has gone ahead with tar- the list, as did U.S. apples, iffs of 25% on steel and 10% on with a 20% duty. aluminum from U.S. allies, in- ANDREW HARNIK/ASSOCIATED PRESS —Anthony Harrup cluding Canada, Mexico and President Donald Trump and U.S. Sen. Bob Corker, right, arriving in Tennessee earlier this year. the European Union. The U.S. is also threatening additional tar- are vulnerable.” “When you can just name to Congress any proposal to White House officials didn’t Senate Majority Leader iffs on imported cars and parts. Enacting legislation to tie anything a national security is- adjust such import restrictions respond to a request to com- Mitch McConnell (R., Ky.) de- “I would hate to see this Mr. Trump’s hands isn’t the sue, you undermine the whole as tariffs or quotas in the in- ment on the measure. clined Tuesday to say whether great, booming economy, as a preferred option for Republi- trade-agreement process,” said terest of national security un- Republicans also suggest he would permit a vote on the result of the policies of this ad- cans, who have relied mostly Mr. Corker, adding he didn’t der Section 232 of the law, a that, at a minimum, they need measure as an amendment to ministration, be squandered by on trying to persuade the pres- see how a new tariff on vehicle person familiar with the mat- to conduct oversight of the ad- the defense legislation. The de- a trade war,” said Senate Ma- ident to step back from his and auto-parts imports, for inter said. The proposal would ministration’s use of its na- fense-authorization bill is ex- jority Whip John Cornyn (R., most ambitious plans. But a stance, would qualify as coun- qualify for expedited consider- tional security authorities to pected to land on the Senate Texas). “There’s quite a bit of temporary truce between the tering a national security ation in Congress and the leg- impose import restrictions. floor as early as Wednesday. resistance to the tariffs, based White House and Senate Re- threat. “That has been greatly islation would apply to restric- “We ought to go back and Mr. Corker pitched his pro- not on the merits so much, as publicans ended late last abused and that’s the reason tions imposed within the past analyze the rationale behind posal on Tuesday at a closed- the fact that this is an un- month when the White House I’m offering this legislation.” two years and to all similar ac- national security being a rea- door Senate Republican lunch, guided missile and the retalia- allowed a series of tariff ex- Mr. Corker’s measure would tions going forward, the person for tariffs,” said Sen. Chuck portraying the measure as nar- tion can occur in sectors that emptions to expire. require the president to submit son said. Grassley (R., Iowa). rowly tailored, lawmakers said. China WORLDWATCH EAST AFRICA tions the U.K. economy is re- Offers U.S. bounding from a weak start to Ethiopia Accepts the year. Eritrea Peace Terms The economy slowed sharply Trade Deal in the first quarter, prompting Ethiopia said it fully accepts the Bank of England to forgo a ContinuedfromPageOne terms of a 2000 peace agreement rise in its key interest rate at briefed on the talks said. with neighboring Eritrea in a step the May meeting. That proviso could make toward calming deadly tensions However, officials signaled the deal a non-starter in with its decadeslong rival. that they still expect to tighten Washington, where the White The development came on a policy if that slowdown proves House has said it plans to day of dramatic reforms, including to be short-lived, as they be- move ahead with the tariffs an announcement that the nation lieve it will. shortly after June 15 as a way will open up parts of state-owned A survey of service providers to pressure China to make enterprises in sectors such as en- carried out by data firm IHS more sweeping changes in its ergy, aviation and telecoms to pri- Markit and the Chartered Insti- economy. vate investment and others, such tute of Procurement and Sup- The U.S. wants Beijing to as railways and hotels, to full pri- ply suggests some recovery is stop putting pressure on U.S. vatization. under way. Their measure of companies to transfer technol- Hours earlier, Ethiopia lifted a activity rose to 54.0 in May ogy to their Chinese partners state of emergency in what a ma- from 52.8 in April, its highest and halt what the U.S. consid- THOMAS PETER/REUTERS jor reform initiated by new Prime for three months. A reading ers unfair subsidies and other Commerce Secretary Wilbur Ross in Beijing in November. Mr. Ross led talks in Beijing on Sunday. Minister Abiy Ahmed, who has above 50 indicates an expan- aid to Chinese businesses that promised change after more than sion. compete internationally for boost its imports of those two years of antigovernment pro- A similar survey of manufac- advanced technology. Getting There goods, the people said. tests demanding greater freedoms. turers released Friday also Mr. Ross briefed Mr. Trump Beijing offered to purchase nearly $70 billion in additional U.S. exports, The Chinese team also But it was the prospect of pointed to a May pickup. on the results of his weekend which falls short of U.S. goals of reducing its trade deﬁcit with China by promised to get state- peace with Eritrea that came as —Paul Hannon trade mission on Monday, and $200 billion. owned companies to buy more the biggest surprise. An agree- was discussing details of his U.S. natural gas, though it ment signed in 2000 ended a trip with other U.S. trade offi- Actual 2017 deﬁcit $375 billion could take some time two-year border war that claimed cials, according to people fa- for American suppliers to tens of thousands of lives, but dif- miliar with the negotiations. ramp up production. By po- ferences remained between the U.S. officials are skeptical With China's offer $305 tentially boosting Chinese im- two countries. Ethiopia in particu- of the Chinese offer for sev- ports of U.S. coal, Beijing is lar had refused to accept the eral reasons, said people in- U.S. goal $175 targeting states like Pennsyl- deal’s handing of key locations, involved with the talks. They vania and West Virginia that cluding Badme, to Eritrea and con- argue that Chinese energy Source: U.S. Census Bureau (trade in goods) THE WALL STREET JOURNAL. are a key to the U.S. midterm tinues to control that town. purchases would largely di- elections, the people said. Ethiopia’s ruling party now ac- vert sales the U.S. would have That decision, which came pledge early last month to But the offers didn’t in- cepts that agreement without made to other nations and so less than two weeks after both save China’s ZTE Corp. from clude a signed deal. “Nothing conditions and calls on Eritrea’s would have no overall impact sides declared a truce in their crippling U.S. sanctions, has firmed up yet,” one government to do the same, the on the U.S. trade deficit. They simmering trade dispute, com- the people briefed on the of the people said, referring state-affiliated Fana Broadcasting also aren’t sure that the U.S. plicated the mission of Mr. talks said. That pledge has to the Chinese offers. “It Corporate reported. could ramp up agriculture Ross, who originally scheduled been opposed by some U.S. would require addi- —Associated Press production that quickly. the Beijing trip with the goal lawmakers. tional rounds of discus- The White House said of securing a deal but left Bei- China’s offer would benefit sions between the two sides.” UNITED KINGDOM early last week that it would jing late Sunday without a set- the Farm Belt states that In a tweet Monday, Presi- go ahead with the levies and tlement. helped Mr. Trump win the elec- dent Trump wrote: “Farmers Services Sector GRIEF: The coffins of seven JOHAN ORDONEZ/AGENCE FRANCE-PRESSE/GETTY IMAGES other sanctions to restrict During the discussions, tion in 2016. By promising to have not been doing well for 15 Picked Up in May victims of Guatemala’s Fuego China’s access to U.S. tech- Chinese negotiators also buy more American soybeans, years. Mexico, Canada, China volcano were carried to a nology and punish Beijing for raised the question of corn and other agricul- and others have treated them Activity in the U.K.’s domi- funeral. Officials said 75 bodies what the U.S. says are unfair whether the U.S. was moving tural products, China pledged unfairly. By the time I finish nant services sector picked up were recovered and 192 people trade practices. ahead with Mr. Trump’s to ease certain regulations to trade talks, that will change.” in May, adding to recent indica- are missing after the eruption. THE WALL STREET JOURNAL. Wednesday, June 6, 2018 | A9 WORLD NEWS Gay Couples Win Euro-Leery Italy Loses Faith in EU

BY GIOVANNI LEGORANO In Europe Ruling AND ERIC SYLVERS ROME—Italy’s new govern- BY VALENTINA POP gay marriage, civil partnerships ment is laying the groundwork or both. While the court said to challenge Europe’s financial BRUSSELS—The European EU governments remain free to orthodoxy and immigration Union’s top court issued a decide whether to allow same- rules, setting out a euroskep- landmark ruling that same-sex sex marriage or not, it said res- tic policy agenda in a country partners have the right to live idence decisions shouldn’t be where public frustration with in any country in the bloc, stricter toward gay couples the European Union has sup- even those that don’t recognize than heterosexual couples. planted once-broad support. gay marriage. The judgment is The Romanian government In his inaugural speech to likely to deepen the discord be- didn’t immediately comment Parliament on Tuesday, Prime tween Brussels and socially on the ruling. Minister Giuseppe Conte said conservative governments in The case has turned into a his government would push Central and Eastern Europe. broader battle over the bal- for a change of the rules un- The EU’s law on freedom of ance of powers between the derpinning the eurozone to movement allows EU citizens— EU and its national govern- spur growth and cut the coun- and their spouses—to live ments, putting the court—al- try’s massive debt, which he freely anywhere in the bloc. In ready a lightning rod for euro- said austerity policies helped its highly anticipated decision, skeptic politicians—at the worsen. the court found that the term center of another fight over “A new wind” is blowing in spouse is “gender-neutral and how much power the bloc’s Italy, said Mr. Conte, who may therefore cover the same- members must concede. heads a government supported FABIO FRUSTACI/EIDON PRESS/ZUMA PRESS sex spouse of an EU citizen.” Decisions forcing Central by the maverick 5 Star Move- Premier Giuseppe Conte, center, and other Italian officials debated before Tuesday’s confidence vote. The case was brought by Ro- and Eastern European countries ment and the hard-right manian citizen Adrian Coman, to accept more refugees and al- League, which have come out ing an effort but struggling who married a U.S. national in lowing wealthier nations to cap strongly against the eurozone’s Governing Parties gration, including the introduc- with weak economies. But the Belgium, in 2010. Romania de- welfare benefits for citizens limits on public spending. tion of “compulsory and bloc insists all members do clined to grant Mr. Coman’s hus- from poorer EU nations have “If populism is listening to Slam Europe Over automatic” allocation of migrants their best to follow the rules. band, Claibourn Robert Hamil- added to public resentment the needs of the people, we Migrant Crisis from Italy to the rest of Europe. Mr. Conte said the govern- ton, residence on the grounds against the EU in Hungary, Po- accept” such a label, he said. In recent days, Matteo Sal- ment plans to implement “rev- that the country doesn’t recog- land and their neighbors. The government on Tues- vini, the head of the League, has olutionary measures” that will nize same-sex marriage. At a court hearing in Lux- day won a confidence vote in Both of Italy’s governing thundered against immigration, reboot the Italian economy, in- “We can now look any Ro- embourg last year, the socially the Italian Senate, the first of parties—the maverick 5 Star accusing Tunisia of sending “con- cluding cutting corporate and manian and EU civil servant in conservative governments of two parliamentary votes of Movement and the hard-right victs” to Italy’s shores. He has individual taxes to as low as the eye and have the certainty Hungary, Poland and Latvia ar- confidence that will fully em- League—have been harshly promised to deport hundreds of 15% and enacting huge welfare that our family relationship is gued in favor of Romanian au- power it. The second, in the critical of Europe’s handling of thousands of illegal immigrants. spending to support Italy’s le- as valuable and as relevant ir- thorities that the definition of lower house where the gov- the migrant crisis. “Either Europe gives us a gion of unemployed and poor. respective of the EU country marriage isn’t an EU matter. ernment has a majority, is Prime Minister Giuseppe hand to secure our country, or The large deficits that we live in,” Mr Coman said af- The Romanian national slated for Wednesday. Conte pledged to push for a re- we will choose another way,” he would likely result from such a ter Tuesday’s ruling. “Today, agency responsible for antidis- The speech sent yields on view of European rules on immi- wrote on Twitter on Monday. program could violate EU defi- human dignity prevailed.” crimination laws, the Nether- Italian debt higher and the cit rules. Opposition leaders In the EU, marriage laws are lands and the EU’s executive country’s benchmark stock in- on Tuesday derided the plans enacted at the national level. Of body argued in favor of the dex lower, a week after global for unpopular moves taken to cause any benefits would be as “propaganda” that Italy’s the EU’s 28 countries, 22 allow couple. markets were rocked by inves- shore up the country’s fi- short-lived. But many agree strapped public finances can’t tor concern over politics in Italy. nances and gradually reduce with plans by the new govern- afford. “How do you do it?” In his speech, Mr. Conte its massive debt, including an ment to loosen the rules gov- asked Franco Mirabelli, a cen- stuck to the coalition agree- increase in the retirement age, erning the currency to allow ter-left senator. “With what ment the two parties struck. cuts to the mostly free health- more government spending. resources?” That agreement called for bold care system and a reduction in “The [euro] parameters are Italian 10-year government policy to turn around Italy’s public services. constricting Italy’s growth,” bond yields rose to 2.773% on economy—one of the most “We have to go to Brussels, said Armando De Nigris, Tuesday from 2.537% on Mon- troubled in Europe—and con- slam our fists on the table, whose 130-year-old family- day, snapping a four-session front a migration crisis that claim our rights and renegoti- owned balsamic-vinegar busi- streak of declines, while its has brought 750,000 people to ate the [EU] treaties,” said ness had revenue of about €80 two-year notes yielded 0.982%, its shores since 2011. Giuseppe Dodaro, a 26-year- million ($93 million) last year. up from 0.694%. Yields move The two crises have badly old medical student from the EU treaties require member inversely to prices. eroded support for the EU in a southern Calabria region who countries to keep their budget Italy’s main stock bench- country that was historically voted for 5 Star. deficits below 3% of gross do- mark, the FTSE MIB index, fell one of its biggest boosters. In Most businesses don’t want mestic product or face disci- 1.2%, while the FTSE Italia All- 2010, three out of four Italians Italy to leave the euro because plinary proceedings. EU au- Share Banks index fell 3.4%.

VADIM GHIRDA/ASSOCIATED PRESS had a positive view of Europe. of the chaos and uncertainty thorities have shown flexibility —Riva Gold Claibourn Robert Hamilton, left, with his husband, Adrian Coman. Many Italians blame the EU the move would bring and be- toward countries that are mak- contributed to this article.

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© 2018 Dow Jones & Co., Inc. All rights reserved. 6DJ6283 A10 | Wednesday, June 6, 2018 **** THE WALL STREET JOURNAL. IN DEPTH Facebook Struck Data Deals in China Tech partners include woman said. As of Tuesday, before they were deployed to been misled by Chief Executive Facebook users. The crisis smartphones. more than half of those part- ensure the data wasn’t saved Mark Zuckerberg, who testi- sparked questions about Face- “The news that Facebook Huawei, considered nerships have been wound on company servers, the Face- fied in April that Facebook re- book’s lax oversight of its plat- provided privileged access to a possible tool for down, the spokeswoman book spokeswoman said. stricted data access to outsid- form, an investigation by the Facebook’s API to Chinese de- added. “Huawei is the third-largest ers in 2015. Federal Trade Commission and vice makers like Huawei and spying by U.S. officials The social-media company mobile manufacturer globally “Facebook’s integrations two congressional appear- TCL raises legitimate con- said it plans to wind down its and its devices are used by with Huawei, Lenovo, OPPO ances by Mr. Zuckerberg last cerns, and I look forward to BY DEEPA SEETHARAMAN data-sharing partnership with people all around the world, and TCL were controlled from month. learning more about how Huawei by the end of the including in the United the get go—and we approved Facebook argues that the Facebook ensured that infor- Facebook Inc. said Tuesday week. It isn’t clear when Face- States,” Francisco Varela, vice the Facebook experiences device partnerships are differ- mation about their users was that it struck data partner- book will end partnerships president of mobile partner- these companies built,” Mr. ent from the data extended to not sent to Chinese servers,” ships with at least four Chi- with the three other compa- ships, said in a statement. Varela said. “Given the inter- third parties like academics Sen. Mark Warner said in a nese electronics firms, includ- nies: Lenovo Group Ltd., the “Facebook along with many est from Congress, we wanted and mobile apps. Facebook ne- statement Tuesday, referring ing Huawei Technologies Co., world’s largest personal-com- other U.S. tech companies to make clear that all the in- gotiated each device deal dif- to the website’s application a telecommunications-equip- puter maker; Oppo Electronics have worked with them and formation from these integra- ferently. programming interface, or set ment maker that U.S. officials Corp., a smartphone maker; other Chinese manufacturers tions with Huawei was stored Still, lawmakers have raised of software-building tools. view as a potential tool for and Chinese electronics con- to integrate their services on the device, not on Huawei’s several concerns about Face- It isn’t clear why Facebook state-sponsored spying. glomerate TCL. onto these phones.” servers.” book’s partnership with Hua- continued to maintain a rela- The four partnerships are Facebook officials defended The New York Times earlier The company is dealing wei, the subject of a 2012 re- tionship with Huawei despite among the roughly 60 that the decision to work with Hua- reported on Facebook’s device with the fallout related to port by U.S. congressional the U.S. government’s con- Facebook struck with device wei and said that no data be- partnerships with companies Cambridge Analytica, a re- investigators who said the cerns. When asked, the Face- manufacturers starting in longing to Facebook users was like Apple Inc., Amazon.com search firm that had ties to company could be exploited to book spokeswoman said the 2007 so they could re-create saved on Huawei servers. Inc. and Microsoft Corp. After President Donald Trump’s spy or harm the U.S. telecom- company hasn’t seen nor does the Facebook service on their Facebook had a manager and the Times article, several law- 2016 campaign and improperly munications network. Huawei it suspect any misuse of Face- devices, a Facebook spokes- an engineer review the apps makers said they felt they had obtained the data of 87 million makes telecom equipment and book user data.

models, another person famil- A Messy iar with her thinking said. Ms. Sandberg, 48, and Mr. ‘We wanted to make ‘Advertising supported Zuckerberg, 34, frequently WhatsApp brought up their purchase of something that businesses like Facebook the photo-streaming app Insta- gram as a way to persuade Breakup wasn’t just another equalize access and Messrs. Koum and Acton to allow advertising into WhatsApp. ContinuedfromPageOne ad clearinghouse.’ improve opportunity.’ Facebook in 2012 purchased In- the WhatsApp founders to be stagram, and the app’s found- more flexible on those issues —WhatsApp — Facebook ers initially tried their own ad- and move faster on other vertising platform rather than plans to generate revenue, the Facebook’s. When Instagram people say. fell short of its revenue targets, Once, after Mr. Koum said Facebook pushed the founders he “didn’t have enough people” to adopt its targeted advertis- to implement a project, Mr. ing model, and the transition Zuckerberg dismissed him was relatively seamless, ac- with, “I have all the people you cording to current and former need,” according to one person employees. Today, analysts es- familiar with the conversation. timate that Instagram is a key WhatsApp was an incongru- driver of Facebook’s revenue, ous fit within Facebook. and its founders, Kevin Sys- Messrs. Acton and Koum are trom and Mike Krieger, remain true believers on privacy issues with the company. The men and have shown disdain for the didn’t respond to requests for potential commercial applica- comment. tions of the service. Other high-profile acquisi- Facebook, on the other tions such as developer plat- hand, has built a sprawling, lu- form Parse, ad tech platform crative advertising business LiveRail and virtual-reality that shows ads to users based company Oculus VR have fallen on data gathered about their short of expectations, people activities. Mr. Zuckerberg and familiar with those deals say. Ms. Sandberg have touted how The Facebook executives ap- an advertising-supported prod- peared to grow frustrated by

uct makes it free for consumers PATRICK T. FALLON/BLOOMBERGthe (ACTON, SANDBERG); TOBIAS HASE/EPA (KOUM); MARLENE AWAAD/BLOOMBERG WhatsApp duo’s reasons to and helps bridge the digital di- WhatsApp’s Brian Acton and Jan Koum, and Facebook’s Mark Zuckerberg and Sheryl Sandberg. delay plans that would help vide. monetize the service. Mr. Zuck- When Facebook bought class,” Mr. Marcus said, accord- “around the goal of knowing as erberg wanted WhatsApp exec- WhatsApp, it never publicly ad- ing to people familiar with the Big Bet little about you as possible.” utives to add more “special fea- dressed how the divergent phi- matter. Mr. Acton shrugged it Facebook paid more for WhatsApp, which has more users than its With Mr. Zuckerberg and tures” to the app. losophies would coexist. But off. Mr. Marcus declined to Messenger product, than any other deal. Ms. Sandberg pushing to inte- Mr. Zuckerberg and Ms. Mr. Zuckerberg told stock ana- comment. grate it into the larger com- Sandberg also wanted Messrs. lysts that he and Mr. Koum The posts also prompted an Facebook's ﬁve largest deals* World-wide monthly active users pany, WhatsApp moved its of- Koum and Acton to loosen their agreed that advertising wasn’t angry call from Ms. Sandberg for popular messaging apps fices in January 2017 from stance on encryption to allow the right way to make money to Mr. Koum, who assured her WhatsApp (2014) WhatsApp Mountain View, Calif., to Face- more “business flexibility,” ac- from messaging apps. Mr. that Mr. Acton didn’t mean any $21.94 billion 1.5 billion book’s Menlo Park headquar- cording to one person familiar Zuckerberg also said he prom- harm, according to a person fa- ters. Facebook tried to make it with the matter. One idea was ised the co-founders the auton- miliar with the call. Oculus VR (2014) Facebook Messenger welcoming, decorating the to create a special channel be- omy to build their own prod- When Mr. Acton departed $2.30 billion 1.3 billion Building 10 office in Whats- tween companies and users to ucts. The sale to Facebook Facebook, he forfeited about Instagram (2012) WeChat App’s green color scheme. deal with issues such as cus- made the app founders both $900 million in potential stock $736 million 1.0 billion WhatsApp’s roughly 200 tomer-service requests, people multibillionaires. awards, according to people fa- Microsoft† (2012) Telegram employees at the time re- familiar with the matter said. Over time, each side grew miliar with the matter. Mr. mained mostly segregated from That setup would let compa- $550 million 200 million frustrated with the other, ac- Koum is expected to depart in the rest of Facebook. Some of nies appoint employees or bots cording to people in both mid-August, in which case he Onavo (2013) Line‡ the employees were turned off to field inquiries from users camps. Mr. Koum announced would leave behind more than $120 million 165 million by Facebook’s campus, a bus- and potentially store those April 30 he would leave, and two million unvested shares *price at close of deal †approximately 615 AOL patents and patent applications ‡Across four tling collection of restaurants, messages in a decrypted state Mr. Acton resigned last Sep- worth about $400 million at main markets ice cream shops and services later on. tember. Facebook’s current stock price. Note: iMessage, Google Hangouts and Signal don't disclose number of users. built to mirror Disneyland. Last summer, Facebook ex- The WhatsApp co-founders Both men would have received Sources: Dealogic (deals); the companies (active users) THE WALL STREET JOURNAL. Some Facebook staffers con- ecutives discussed plans to all their remaining shares had sidered the WhatsApp unit a start placing ads in WhatsApp’s they stayed until this Novem- were immediately deleted from that Facebook wouldn’t ulti- mystery and sometimes poked “Status” feature, which allows ber, when their contracts end. its servers once sent. It mately find some way to make fun at it. After WhatsApp em- users to post photo- and video- The exit caps a long “Jan has done an amazing charged some users 99 cents money from the deal, such as ployees put up posters asking montages that last 24 hours. dispute about how to job building WhatsApp. He has annually after one free year with advertising. “Facebook is passersby to “please keep noise Similar features exist across been a tireless advocate for pri- and carried no ads. In a 2012 a business, not a charity,” he to a minimum,” some Facebook Facebook’s services, including wring more revenue vacy and encryption,” Mr. blog post the co-founders said. employees mocked them with on Instagram, but WhatsApp’s out of WhatsApp. Zuckerberg said in May at the wrote, “We wanted to make Facebook’s hands-off stance chants of “Welcome to Whats- version is now the most popu- company’s developer confer- something that wasn’t just an- changed around 2016. Facebook App—Shut up!” according to lar with 450 million users as of ence about Mr. Koum’s depar- other ad clearinghouse.” told investors it would stop in- people familiar with the matter. May. ture. He added he was proud When Facebook bought creasing the number of ads in Some employees even took Mr. Acton—described by one didn’t confront Mr. Zuckerberg that Facebook helped Whats- WhatsApp in 2014, it was Facebook’s news feed, resulting issue with WhatsApp’s desks, former WhatsApp employee as at their departures about their App launch end-to-end encryp- growing rapidly. WhatsApp in slower ad-revenue growth. which were a holdover from the the “moral compass” of the disagreements, but had con- tion. currently has 1.5 billion This put pressure on Face- Mountain View location and team—decided to leave as the cluded they were fighting a los- Facebook from its beginning monthly users. book’s other properties—in- larger than the standard desks discussions to place ads in Sta- ing battle and wanted to pre- in 2004 leveraged access to Some analysts said a clash cluding WhatsApp—to make in the Facebook offices. Whats- tus picked up. Mr. Koum, who serve their relationship with user information to sell tar- was inevitable. Nate Elliott, money. App also negotiated for nicer also sat on Facebook’s board, the Facebook executive, people geted advertising that would be principal of Nineteen Insights, That August, WhatsApp an- bathrooms, with doors that tried to persuade him to stay. familiar with the matter said. displayed as people browsed a firm focused on digital mar- nounced it would start sharing reach the floor. WhatsApp con- Mr. Koum remained another One person described the envi- their news feeds. That business keting and social media, said phone numbers and other user ference rooms were off-limits to eight months, before announc- ronment as “very passive-ag- model has been hugely success- the WhatsApp founders are data with Facebook, straying other Facebook employees. ing in a Facebook post that he gressive.” ful, driving Facebook’s market “pretty naive” for believing from its promise to be built “These little ticky-tacky is “taking some time off to do Small cultural disagree- value past half a trillion dol- things add up in a company things I enjoy outside of tech- ments between the two staffs lars, with advertising account- that prides itself on egalitarian- nology, such as collecting rare also popped up, on issues such ing for 97% of the firm’s reve- ism,” said one Facebook em- air-cooled Porsches, working as noise around the office and nue. ployee. on my cars and playing ulti- the size of WhatsApp’s desks It is also the antithesis of In response to the pressure mate Frisbee.” Mr. Koum is and bathrooms. what WhatsApp professed to from above to make money, worth about $9 billion, accord- The discord broke into pub- stand for. Mr. Koum, a San Jose Messrs. Koum and Acton pro- ing to Forbes. lic view in a March tweet by State University dropout, grew posed several ideas to bring in The next day, Mr. Koum said Mr. Acton. During the height of up in Soviet-era Ukraine, where more revenue. One, known as goodbye to WhatsApp and Face- the Cambridge Analytica con- the government could track “re-engagement messaging,” book employees at an all-hands troversy, in which the research communication, and talked fre- would let advertisers contact meeting in Menlo Park. An em- firm was accused of misusing quently about his commitment only users who had already ployee asked him about Whats- Facebook user data to aid the to privacy. been their customers. Last App’s plans for advertising. Trump campaign, Mr. Acton Mr. Koum, 42, and Mr. Ac- year, WhatsApp said it would Mr. Koum first alluded to his posted that he planned to de- ton, 46, became friends while charge companies for some fu- well-documented antipathy for lete his Facebook account. working as engineers at Yahoo ture features that connect them ads, according to people famil- Within Facebook, some exec- Inc., one of the first big tech with customers over the app. iar with his remarks. But Mr. utives were surprised to see companies to embrace digital None of the proposals were Koum added that if ads were to Mr. Acton publicly bash the advertising. Both men came to as lucrative as Facebook’s ad- happen, placing them in Status company, according to people regard display ads as garish, based model. “Well, that would be the least intrusive familiar with the matter. When ruining the user experience and doesn’t scale,” Ms. Sandberg way to do it, according to the Mr. Acton later visited Face- allowing advertisers to collect told the WhatsApp executives people. book’s headquarters, David data on unsuspecting individu- of their proposals, according to Some people who heard the Marcus, an executive who ran als. a person familiar with the mat- remarks interpreted them as

Facebook’s other chat app, WhatsApp, which launched DAVID PAUL MORRIS/BLOOMBERGter. NEWS Ms. Sandberg wanted Mr. Koum saying he had made Messenger, confronted his for- in 2009, was designed to be David Marcus, vice president of messaging products for WhatsApp to pursue advertis- peace with the idea of advertis- mer colleague. “That was low simple and secure. Messages Facebook, spoke on May 1. ing alongside other revenue ing in WhatsApp. THE WALL STREET JOURNAL. ** NY Wednesday, June 6, 2018 | A10A GREATER NEW YORK Elite Schools Plan Tied to Mayoral Control Cuomo says de Blasio by state lawmakers. larger conversation” next year widely seen as jewels of the posal, saying the admission test New York City Schools Chan- Mr. de Blasio is pushing a bill on education policy, including New York City public-schools is the most objective method cellor Richard Carranza said in proposal to scrap sponsored by Assemblyman fair funding and charter system. for determining merit and elim- a radio interview on WNYC entry test should be Charles Barron, a Brooklyn “The single test does raise inating it would threaten the Tuesday that “we’re not trying Democrat, that aims to better issues, obviously,” Mr. Cuomo schools’ excellence. But many to penalize anybody.” He said part of larger debate integrate the specialized high Gov. Cuomo said. But he added, “It’s not a parents and integration advo- the proposal “should be very schools. It would end the ad- said he doesn’t slam dunk either way.” cates applaud the idea, saying a good news” for poor immi- BY JOSEPH DE AVILA missions test and instead select think a bill to Mr. de Blasio said the ad- single test can’t capture stu- grants and others, because fam- AND LESLIE BRODY top students using a combina- end entry missions bill should be de- dents’ full potential, and it has ilies wouldn’t have to spend tion grades from middle-school tests for elite bated separately from mayoral been an unfair barrier to black thousands of dollars on test Mayor Bill de Blasio’s pro- courses and annual statewide schools will control. and Latino teenagers. preparation. posal to scrap the admission exam results. pass this year. “They’re two issues with The eight specialized high In a separate step, the mayor test for New York City’s eight The governor, a frequent their own merits,” the mayor schools enroll 15,540 students: announced over the weekend specialized high schools will be critic of Mr. de Blasio, said he said Tuesday. On Sunday, he Half are low-income, while 62% that starting in fall 2019, 20% of part of state lawmakers’ de- doubts the bill will pass before schools. said he is optimistic that Demo- are Asian, 24% are white, 6% seats in each specialized high bates on education policy next the legislature’s session ends Mr. Cuomo, a Democrat, crats will regain control of the are Latino, and 4% are black, school will be offered to low-in- year, including whether to re- this month and that lawmak- didn’t tip his hand on his stance state Senate in November elec- according to city data. come students who just miss new mayoral control of city ers will take up the matter on the proposal, which would tions, which he expects will Advocates for Asians have the test-score cutoff. State law schools, Gov. Andrew Cuomo next year. eliminate the test that deter- boost support for the admis- said the mayor’s proposal is dis- allows some students to get in said Tuesday. “It’s a difficult political con- mines entrance to Stuyvesant sions overhaul. criminatory and that it would that way through a program Mayoral control expires in versation,” Mr. Cuomo said. “It High School, Bronx High School Alumni groups, parents and reduce access for hardworking, called “Discovery,” which gives summer 2019 unless extended will become part of a much of Science and six other schools others have attacked the pro- high-achieving Asian students. them extra tutoring.

It’s Taco Time For Danny Meyer

BY CHARLES PASSY the past year, the chain opened locations from Troy, Over the years, New York Mich., to Tokyo. City restaurateur Danny Meyer Mr. Meyer played down any has showcased all manner of similarity between Shake cuisines, from contemporary Shack and Tacocina, which is

American to rustic Italian. But billed by Union Square Hospi- KELLYANN PETRY FOR THE WALL STREET JOURNAL (2) Mr. Meyer, 60 years old, has tality Group officials as a year- Tacocina, a taco stand from Danny Meyer, will open at Domino Park in Williamsburg on Sunday. Above left, its beef and salsa negra taco. yet to fully embrace Mexican round taco stand with outdoor food—and, more specifically, seating for about 110. of the American table. “It is proach for Tacocina focuses on dential and commercial devel- partnering with developers. the taco. “I think there’s one Shake not a trend,” he said. authenticity—his chef, Barbara opment connected to it, said “They make good deals,” said That will change Sunday Shack and it doesn’t come The challenge for Mr. Meyer Garcia, was raised in Mexico— Union Square Hospitality Ms. Spiegel, who hasn’t done when Mr. Meyer’s Union along more than once in a life- is that he may be somewhat rather than on putting global Group has a 10-year lease on consulting work for Mr. Meyer. Square Hospitality Group time,” Mr. Meyer said. late to the taco game in New fusion-style tweaks on the the Tacocina space, but didn’t “If these tacos start to reso- opens Tacocina, at Domino At the same time, Mr. York, where chefs have em- classic dish. specify the financial terms. nate, why wouldn’t he look to Park, a 6-acre waterfront Meyer said his interest in cre- braced the Mexican staple in “We really wanted to begin Tacocina’s opening comes expand?” she said. green space in Brooklyn’s Wil- ating a restaurant at Domino recent years and opened all in Mexico,” he said of the idea, at a busy time for the com- Veteran food writer Allen liamsburg neighborhood that Park stemmed from his love of sorts of taco establishments at though he noted that many in- pany, which is also set to de- Salkin says New York doesn’t is also set to open that day. parks, particularly for their both the high and low end of gredients are being sourced in but a high-end dining spot, need another taco establish- This latest foray brings to role in shaping communities. the dining spectrum. the New York City area. Manhatta, in the Financial Dis- ment at this point. He would mind another of Mr. Meyer’s He added that he consid- The closest Mr. Meyer has Union Square Hospitality trict this summer. rather Mr. Meyer apply his efforts: Shake Shack, the fast- ered doing a seafood shack at come to anything Mexican-re- Group officials declined to dis- Arlene Spiegel, a New York- skills to a different culinary casual burger spot that Mr. Domino Park to play off its lated previously is a conces- cuss any financial details for based restaurant consultant, is challenge. Meyer launched in Madison waterfront location. But he sion that Union Square Hospi- Tacocina, including the startup bullish on Mr. Meyer’s chances “Danny is one of the great Square Park in 2004. Shake opted instead for tacos, recog- tality Group runs as part of its costs. Officials with Two Trees with Tacocina, noting that restaurateurs. I’d like to see Shack has since grown into a nizing that, much like burgers culinary operations at Citi Management, the real-estate Union Square Hospitality him advance the conversation, global chain, with annual reve- and pizza, it is a food that has Field. company behind the $50 mil- Group has a strong record in not be in the rear flank of it,” nue that tops $350 million. In become an indispensable part Mr. Meyer said his ap- lion Domino Park and the resi- developing new concepts and he said. Zephyr Teachout Launches Bid for State Attorney General

BY LARA KORTE White House didn’t respond to ber of candidates running for Congressman Joins York politics,” he said. “This job requests for comment Tuesday. attorney general. Democratic Democrat Zephyr Teachout is about being the cop on the Former Attorney General contenders so far include Lee- officially opened her campaign A Crowded Race beat, and that means going af- Eric Schneiderman, a Demo- cia Eve, a former aide to Hil- for New York state attorney ter crooks in Albany, crooks in crat who resigned last month lary Clinton and Gov. Andrew general on Tuesday, standing the corporate suite and crooks amid allegations of physical Cuomo, and New York City in the shadow of Trump Tower U.S. Rep. Sean Patrick Ma- in the White House.” abuse, took more than 100 le- Public Advocate Letitia James, while emphasizing her mission loney plans to formally declare If elected, Mr. Maloney would gal actions against the Trump who won the state party’s en- to force President Donald his candidacy for New York at- be the first openly gay attorney administration during his ten- dorsement. Trump to divest himself from torney general on Wednesday. general in New York history. ure, including challenges to its Republicans include Manny his businesses. Mr. Maloney, a Democrat Mr. Maloney has served in travel ban, its repeal of the Alicandro, a Wall Street law- “We must litigate more ag- who represents portions of the the U.S. House of Representa- Clean Power Plan and changes yer and supporter of Mr. gressively,” Ms. Teachout said Hudson Valley, said in an inter- tives since 2013. This year he to the Deferred Action for Trump, and Rockland County to a small crowd on the side- view Tuesday evening that his is also up for re-election in his Childhood Arrivals program, Attorney Thomas Humbach. walk near the high-rise. “The government experience would congressional district. or DACA. Attorney General Barbara Un- beating heart of Trump’s cor- allow him to successfully de- Mr. Maloney, who has If elected, Ms. Teachout said derwood, a Democrat who was ruption is here in our state.” fend New York against what he worked as a lawyer, lives with she would sue Mr. Trump for appointed to replace Mr. Schnei- Ms. Teachout, 46 years old, called “hostile federal policies.” his husband and three children violating anticorruption laws. derman, said she wouldn’t run.

was one of the leading attor- ALEXANDER COHN/THE WALL STREET JOURNAL “This job is the most im- in Cold Spring, N.Y. “I’ll be blunt: New York can Ms. Teachout, an associate neys on a 2017 lawsuit, ulti- Zephyr Teachout said suing portant job right now in New —Corinne Ramey do far more to protect our law professor at Fordham Uni- mately dismissed, brought President Trump is a priority. Constitution and our laws,” versity, ran in the Democratic against Mr. Trump by the non- she said, “because Trump will primary for governor in 2014, profit group Citizens for Re- ness holdings and claimed he officials from receiving gifts, Throughout his campaign not be deterred by op-eds and losing to Mr. Cuomo. In 2016, sponsibility and Ethics in was in violation of the Consti- payments, offices or titles and presidency, Mr. Trump has we cannot become complacent she ran for a House seat but Washington. The suit chal- tution’s emoluments clause, from foreign states without maintained he has no conflict- about 2018 or 2020 elections.” ultimately lost to Republican lenged the president’s busi- which prohibits government approval from Congress. ing business interests. The Ms. Teachout joins a num- John Faso.

OYSTER PERPETUAL DATEJUST 41

rolex oyster perpetual and datejust are ® trademarks. A10B | Wednesday, June 6, 2018 NY ** THE WALL STREET JOURNAL. GREATER NEW YORK

Riding Off Into the Sun METRO MONEY | By Anne Kadet Ex-Banker Gives Up Perks To Run School

Lots of ex- around conservatory events, ecutives they reached a compromise: dream of it. A A one-hour limit on Saturday smaller num- evenings at the school. ber talk about Mr. Cooper’s new subterra- it. But in 2016 nean office often doubles as a Chad Cooper did it. He storage space for tubas and a ditched his 16-year invest- stand-up bass. Gone is the ex- ment banking career to head ecutive assistant. “We don’t a nonprofit. The goal: per- have car service here,” he sonal fulfillment, community notes. “We don’t fly business engagement and a low-pres- class.” sure lifestyle with more time But Mr. Cooper can’t com- for his wife and two young plain. Everyone at the school sons. works hard, he says, and no His new gig as executive one makes much money. director of the 121-year-old The perks, meanwhile, are Brooklyn Conservatory of priceless. His commute is an Music certainly satisfied the eight-block walk. And he feels first two goals, Mr. Cooper like part of the community.

JULIE JACOBSON/ASSOCIATED PRESS says. But the vision of “Before I started this job, PRACTICE: A thoroughbred got a workout in the fog Tuesday at Belmont Park on Long Island. On Saturday, the racetrack will host shorter hours and less stress? even though I lived in the the 150th running of the Belmont Stakes, where a colt named Justify will attempt to become the 13th winner of the Triple Crown. “That has kind of been neighborhood for years, I shattered,” he says. didn’t feel any real connec- Last week, Mr. Cooper, tion to Park Slope or Brook- who is 44 years old, gave a lyn,” he says. tour of the creaky, five-story He’s also pleased with the State Senate Urged to Pass Gun Bill mansion where the conserva- conservatory’s progress. Inex- tory is based in the Park pensive upgrades like a paint Slope neighborhood of Brook- job made a big difference in BY JOSEPH DE AVILA trolled state Assembly passed Stoneman Douglas High “It’s time for our leaders in lyn. With its dark wood pan- a version of the bill in March. School in Parkland that killed Washington to follow New eling and stained glass, it’s a New York Gov. Andrew It has stalled in the Republi- 17 students and adults, law- York’s lead,” Ms. Eastmond good deal more charming Cuomo, flanked by school can-controlled Senate. makers around the country said. than his former office at 60 union officials and a student “I want voters to have a have weighed passing similar The New York State Rifle & Wall St., where he served as who survived the mass shoot- choice this election season,” bills. Pistol Association, which rep- a managing director at ing in Parkland, Fla., called out said Mr. Cuomo, a Democrat, People close to the accused resents gun owners, opposes Deutsche Bank. But what a state Senate Republicans on at a news conference. “If the Parkland shooter called au- the legislation and has said headache the beautiful build- Tuesday for blocking a bill Republicans refuse to pass it, thorities several times before such a law would infringe on ing is to maintain. that allows courts to tempo- people have a right to know the attack to voice worries the due-process rights of gun “You don’t have to worry, rarily take guns from people they refused to pass it.” about his erratic behavior and owners. as a banker, whether the ele- deemed dangerous. A spokesman for Senate Re- fixation on guns. Florida Gov. Randi Weingarten, presi- vator is going to break The proposal—known as a publicans didn’t immediately Rick Scott, a Republican, dent of the American Federa- down,” Mr. Cooper says. red-flag law—would allow law- return a request for comment. signed red-flag legislation into tion of Teachers, said these Thepay?Hegaveupa enforcement officials, family Connecticut in 1999 became law in March. types of laws could help teach- handsome banker’s salary, members and school officials the first state to a pass such a Aalayah Eastmond, a stu- ers save lives. “This is the kind plus bonuses, to serve as the to ask a judge to order the re- law, following a shooting at dent at Marjory Stoneman of tool that we need as part of executive director for two moval of an individual’s fire- that state’s lottery headquar- Douglas High School who sur- a multifaceted approach to ad- years without pay. In the fall, arms if the person is consid- ters in which a gunman killed vived the attack, urged Con- dress America’s gun violence he will start getting paid— ered a threat to themselves or four people. Since February’s gress during the news confer- epidemic,” Ms. Weingarten likely high five-figures. The conservatory offers pricey others. The Democratic-con- mass shooting at Marjory ence to take similar action. said at the news conference. And the hours? Longer private lessons and funds than ever. His weekends and programs at some public schools. evenings are packed with GREATERNEW board meetings, parent meet- OUT TODAY YORKWATCH ings, fundraisers and attend- The job has shattered ing performances. “It’s like running a his goals of a low- startup,” he says. “A 121-year- CONNECTICUT old startup.” pressure lifestyle and While the conservatory is more family time. Mother Gets Prison best known for its pricey pri- For Starving Teen vate lessons, it uses the resulting income to help fund a A mother who withheld food larger mission: Music instruc- the school’s feel. A switch alexa from her autistic teenage son tion and music-therapy pro- from a fancy annual gala to a until he died weighing just 84 grams at more than 70 public series of small fundraising pounds was sentenced Tuesday schools and community cen- events boosted revenue and FREE INSIDE THE to 11 years in prison. ters across all of New York broadened its support base Katiria Tirado, 34 years old, of City’s five boroughs. from 285 donors to more Hartford, pleaded guilty in March Mr. Cooper is responsible than 600, according to con- to manslaughter under the Al- for the livelihood of 185 em- servatory documents. The ford doctrine, meaning she ployees and the music educa- Conservatory’s income state- doesn’t agree with all the state’s tion of 6,000 students, who ment swung from a $163,000 evidence but acknowledges range in age from infants to loss on a $3 million annual there is enough for a conviction. people in their 90s. The pres- budget to a $303,000 surplus, Her son, Matthew, 17 years sure keeps him up at night. the records show. old, died in February 2017. He The stakes are tangible and Then there’s the fun stuff: was 5 feet, 9 inches tall, immediate, “versus a handful A new teen bluegrass ensem- weighed 84 pounds, according to of basis points on pricing a ble. A community “Hamilton” authorities. His mother screwed bond,” he says. singalong. An open house fea- cabinets shut and locked the re- Mr. Cooper was serving on turing flash mobs of Suzuki frigerator, police said. An investi- the conservatory’s board of students performing on the gation by the state child advo- directors when, in the sum- stairwell. cate found Matthew had to dig mer of 2016, he took the ex- Russ Soper, who serves on through the trash for food and ecutive director job, hoping the conservatory’s board and drank oils and condiments. to stabilize the struggling works on Wall Street as an IT Ms. Tirado’s attorney said his school’s shaky finances. executive, says that even client is remorseful. His wife, Claire Ellis, who though Mr. Cooper is putting —Associated Press works full time for a gifts in longer hours, he’s clearly manufacturer, was all for it. enjoying the job. “Seeing him NEW JERSEY “He was excited to have a do it has been an inspira- more balanced lifestyle where tion,” he says. Loaded Gun Found he’d be more present for the Asked what someone con- In Child’s Backpack family,” she says. “Now he templating a similar move jokes with me: ‘You got sold a should consider, Mr. Cooper Authorities say a 9-year-old bill of goods!’ ” gives a windy answer about student brought a loaded gun to They do spend more time conducting due diligence and a New Jersey elementary school. together, she says. But it’s of- assessing one’s strengths. Lakewood police said the .22- ten at the conservatory, Then he stops short. caliber handgun was found in the where their sons take lessons “I guess I’d say, just do it,” student’s backpack around 9 a.m. and the entire family attends he blurts. “Do it. And come Tuesday at Oak Street School. performances. talk to me. Here’s my num- Authorities say another student When the couple’s long- ber!” told security about the gun. It standing Saturday evening wasn’t immediately clear how the date night started revolving [email protected] student obtained the gun or why the child brought it to school. JIMMYFALLON —Associated Press CORRECTIONS MAKES FATHERHOOD FUNNY AGAIN AMPLIFICATIONS

The last name of Dan Falt, a project manager for the U.S. Army Corps of Engineers, New York District, was misspelled as Falk in an article Tuesday about closures this summer at New York’s Rockaway Beach.

Readers can alert The Wall Street Journal to any errors in news articles CLAUDIO PAPAPIETRO FOR THE WALL STREET JOURNAL (2) 3NYP101 by emailing [email protected] or Chad Cooper, left, was looking for shorter hours and less stress when by calling 888-410-2667. he ditched Wall Street to head the Brooklyn Conservatory of Music. THE WALL STREET JOURNAL. Wednesday, June 6, 2018 | A11 LIFE&ARTS SHIHO FUKADA FOR THE WALL STREET JOURNAL A weaver, above, turns hand-dyed indigo yarn into denim fabric for Momotaro in Kurashiki, a city in western Japan. The city’s Kojima district. left, was once a hub for manufacturing school uniforms, judo wear and canvas sails.

BY SURYATAPA BHATTACHARYA FASHION something that Instagram has really helped with,” Mr. Devries says. He owns several pairs of Japanese KURASHIKI, Japan denim; the priciest is worth $350. CARTER DEVRIES, a 51-year-old Japan Reinvents the At Momotaro, much of the who works in sales and marketing thought goes into the way the jeans in Louisville, Ky., is a self-de- fade. The company doesn’t pre-fade scribed jeans aficionado who re- jeans but says it fine-tunes the dye- searches brands on Instagram. But ing so that over time, the fade lines it’s not an American label he cov- Bluejean, for $2,000 reflect the lifestyle of the wearer. ets. It’s a high-end, niche Japanese “We basically recommend you wear one touting labor-intensive crafts- it every day,” said Mr. Tabuchi. He manship and individual details— himself has worn the same pair, and a price tag of up to $2,000. “I from a line in development, for the would really like to own a pair of The quintessential American fashion item is reimagined in Japan past six months. Momotaros,” he says, dropping the Fans obsess about creating the name of the cult Japanese line. perfect crease and fade lines, with The quintessential American some waiting months to wash fashion item is getting reimagined What Goes Into Momotaro’s $2,000 Jeans their jeans. Momotaro recom- by a small group of Japanese mends waiting three to six months brands. Made on old Japanese n The dye job: The dyeing process to wash its jeans, depending on looms and using old-fashioned in- is done by hand using natural indigo the type, as washing earlier could digo-dyeing techniques, Japanese dye on the yarn. Momotaro uses a cause the indigo to fade from the denim is rougher than its Ameri- proprietary process that takes up to wash instead of more naturally can counterpart, with sharper fade three days to get the color just through wear and tear. and crease lines. To the uniniti- right. You pick your color. Mike Falkner, an American who ated, jeans from labels such Mo- n The fabric: The denim fabric lives in Japan and owns Japanese motaro, Kapital and Warehouse made from Zimbabwean cotton is denim, says many of his pairs have might look like $25 pairs at Tar- Momotaro Jeans’s Tatsushi Tabuchi handwoven on a wooden loom, pro- never touched water. “Each pair of get, but devotees note details like emphasizes the line’s craftsmanship. ducing a smooth and softer pair jeans is a different painting,” he invisible rivets hand-stitched in- than most selvedge denim. The la- says. He usually puts off washing side the fabric or vintage-looking bor-intensive process yields less his jeans “until my wife starts to uneven yarn. than a yard a day (or eight hours to On the right, a pair of Momotaro complain about it.” In the U.S., Japanese denim has produce one meter). The needlework jeans that retail for $2,000. Another signature of the Mo- achieved cult status among denim is done by hand. From start to fin- motaro jeans: invisible rivets. snobs, with high-priced pairs sell- ish, a pair of these jeans can take You can ask for the inside back of Those are the metal studs that ing at the likes of Barneys New up to three months to make. the jeans to be lined with silk. hold together pieces of fabric and York and Neiman Marcus. But even are easy to see on a traditional Gap notes that it “now consis- n The details: You can customize it n The fit: They are made to mea- pair of Levi’s. Momotaro’s crafts- tently offers Japanese selvedge down to the color of the leather sure, with a tailor and weaver on men hand-stitch them inside the within its denim assortment,” and deerskin patch on the back. You can site to help you decide how you’d fabric so they can’t be seen, a mass-market Japanese brand pick other specifications too, like the like your jeans to form around you method that, by their reckoning, Uniqlo touts its own version of the metal on the rivets—silver or copper. as you wear them over time. makes the pocket more durable. A denim, “created using vintage final flourish is the color of the looms,” for under $100. thread on the seam inside the leg “If someone wants the best own shops in Japan as well as crop is taking a more artisanal vas sails. Denim-makers there have bottom: pink for momo, the Japa- denim, they will be led to Japa- small boutiques in U.S. cities such tack, touting the kind of crafts- used the old looms to make jeans nese word for the fruit peach. nese denim,” said Kiya Babzani, as New York, Chicago, Seattle and manship that might go into a piece with a rougher weave. That thread caught the eye of co-owner of five North American Los Angeles. of Japanese lacquer ware or pot- The marketing has a modern Richard Lin, a 31-year-old from shops called Self Edge that sell Denim has followed a well-trod tery—with a price to match. flair, though: Each label has its Northern Virginia who co-owns Japanese denim. Demand is so hot path in Japan, in which manufac- “American tradition made bet- own fixation ready-made for Insta- the Withered Fig, an online denim that next year the company plans turers initially copy foreign prod- ter? Many people have said that to gram. At Kapital, it’s the tattoo-in- store. He appreciates the attention to open a sixth boutique. ucts—from Neapolitan pizza to us. We’re not thinking about mak- spired embroidery and patchwork to detail in Japanese denim, such A typical pair of hand-stitched preppy Ivy League-style clothing— ing something American,” says look; at Warehouse, it’s using un- as belt loops where extra fabric is jeans from Momotaro costs $300, and then transform them into Tatsushi Tabuchi, general manager even yarn to reproduce a vintage used to raise the loop. “It’s just but the price can go as high as something more uniquely Japa- of Momotaro Jeans. style of denim fabric. Mr. Devries, one example of what most people $2,000 for a pair in which the fab- nese. Early Japanese denim brands Many of these denim makers the Kentuckian, says Instagram will never pay attention or care ric is made on a hand-operated from the 1960s and ’70s, with cluster in the western Japanese city photos fueled his interest. “I was about but that’s what sets Japa- shuttle loom that produces less names like Big John and Betty of Kurashiki, whose Kojima district aware of Japanese denim but get- nese denim apart,” said Mr. Lin. than a yard a day. Momotaro sells Smith, were known for reproduc- was once a hub for manufacturing ting dialed into the specific —Chieko Tsuneoka contributed to its products at a handful of its ing American denim. Now, a newer school uniforms, judo wear and can- brands, the cuts, the fits, that’s this article.

CULTURAL COMMENTARY BEFORE YOU CLAP, DUCK

BY JOANNE KAUFMAN SquarePants: The Broadway Musi- cal,” a Tony nominee for best musical. As if that weren’t enough, cast THE ANNUAL celebration of ex- members fling beach balls into the cellence on Broadway, the Tony audience during the show’s curtain Awards ceremony, will be broad- call. Beach balls also get heaved at cast Sunday night at 8 on CBS. the close of the Jimmy Buffett musi- Trophies and kisses will be handed cal “Escape to Margaritaville.” out in some two-dozen categories, Meanwhile, despite the abun- including outstanding lead and fea- dance of sunshine and the thaw at ture performances, scenic and cos- the end of “Frozen,” snowflakes, um, tume design, choreography and rain down on departing patrons. score, play and musical. And the biographical jukebox show Unfortunately, denizens of the “Summer: The Donna Summer Musi- Great White Way are so busy handi- cal” ends with small gold paper capping the nominees and debating discs wafting down from on high. the merits of this or that actor, this I’m just imagining a preshow an- or that director they’ve utterly nouncement borrowed from an air- failed to take note of a serious omis- line: The 7 o’clock performance will sion in the list of contenders. be delayed for 20 minutes while our They’re focusing on best show maintenance crews finish cleaning when, really, considering the Broad- the front of the orchestra section. way season that just ended, theater The strewing of this litter may geeks ought to be thinking in terms fall under the heading of “value of best throw. added.” It’s a list that includes the Consider the following: Cannons post-show gab sessions known as positioned at the front and the back “talk-backs,” but also such la- of the house at the Palace Theater gniappes as the cucumber sand-

JENNY ANDERSON/GETTY IMAGES blast a confetti payload in the last wiches and small cakes offered to The cast of ‘SpongeBob SquarePants: The Broadway Musical’ on opening night moments of “SpongeBob PleaseturntopageA12 A12 | Wednesday, June 6, 2018 THE WALL STREET JOURNAL. LIFE & ARTS

MY RIDE | By A.J. Baime A Historic Hot Rod Still Ready to Cruise DAVID WALTER BANKS FOR THE WALL STREET JOURNAL

Twanna Rogers, Twanna Rogers stands 75, from Palos Verdes with her 1932 Ford hot Estates, Calif., and rod. Ms. Rogers co- co-owner of the Ther- owns the Thermal Club mal Club, on her 1932 —where these pictures Ford three-window were taken—a racing coupe hot rod, as told club in Thermal, Calif. to A.J. Baime. When I was growing up, I was talking to me. It said, song “Little Deuce Coupe,” remember seeing hot rods in “Twanna, take me home.” the deuce standing for the movies. I loved those cars. I I asked the owner if he two in 1932.] was the oldest of eight kids would sell it and it took My car has a 350-cubic- and my mother did not three days for him to get inch, high-performance Chev- drive. My father needed help back to me. As soon as he rolet V-8 capable of 385 driving, so by 13, I was al- said yes, the money was in horsepower and a five-speed ready driving our Pontiac his bank account. manual transmission. It is not station wagon. What is a hot rod? People the easiest car to drive, as Last year, I was at a party have debated that question there is no power steering. at the house of a man who for years, but basically, it is But it is very comfortable. had a collection of cars. a car built out for speed. The interior is built so it feels motor racing club that I co- per, in it with me. My husband and I have There were Porsches and And it has to be loud. De- like new Mercedes-quality. own with my husband, Tim When I pull up, people many cars. But this one, for Ferraris, and in the corner of cades ago, the 1932 Ford like When you get in, you feel like Rogers, there are all kinds turn their heads. I get me, is extra special. I call it his garage, under a spotlight, mine became a favorite car you’re wearing this car. It is of fast cars. But this one thumbs up everywhere. Peo- Twanna’s Baby. he had this 1932 Ford hot for hot rodders. [The Beach classy, but it does have atti- stands out. It is not a track ple are surprised to see a rod. I must have circled the Boys famously eulogized the tude, the way it rumbles. car. It is for cruising. I often woman driving this car. I can Contact A.J. Baime at car for an hour. I swear it 1932 Ford hot rod with their At the Thermal Club, a have my Labradoodle, Jas- see it in their faces. Facebook.com/ajbaime.

ADVERTISEMENT and find some confetti in your hair or purse Confetti Rains and it’s a reminder of the night you had,” Showroom said Kyle Jarrow, the Tony-nominated libret- To advertise: 800-366-3975 or WSJ.com/classiﬁeds tist of “SpongeBob.” On Broadway That makes sense when you’re talking PORSCHE about a New Year’s Eve party, but a Broadway show? Still, when you come right down to it, ContinuedfrompageA11 the beach balls and bits of colored paper departing audiences by the performers dur- seem to be about one thing and one thing ing the 2010 Broadway run of “Brief En- only: theater for non-theatergoers—the chil- counter,” the musicalized rethinking of the dren (and their parents) who would probably 1945 movie of the same name; the cham- rather be at home watching the animated pagne-style bubbles released into the the- version of “Frozen” for the 100th (or 1,000th) ater during the finale of the flat 2015 re- time than the Broadway adaptation; Parrot- vival of “Gigi”; and, last season, the heads who don’t require a storyline with their ! ! ! " $ ") "!-. pierogies presented to patrons in the high- Jimmy Buffett tunes; fans of the Queen of & ! ! ! " #! $ %$ % $& / 0" ""!-. & price seats during “Natasha, Pierre & the Disco who prefer their hot stuff straight up. $& / # -- ") "!-. 1 2 Great Comet of 1812.” “We’re living in a time 3 "$ % 1 Or perhaps it fills a need when everyone has a library 2 "!-."!-. &2 for those people who want Watch out for of every movie and TV show 4# #3 #5+33+ to be part of a show. If snowflakes, confetti, ever made at home,” Mr. Jar- !%(( "!( +, ( 6 "!-."!-. 2 they’ve yet to experience row said. “To get people out 2 !%(( "!-."!-. 2 their 15 minutes of fame, bubbles and even to the theater you need to get 2 !%(( 70" ! ! ! "!-. ' they can have 15 seconds of them involved and to make 2 !%(( 70" 4! !(% ' ' somehow feeling connected beach balls the show feel like a party.” to the doings on stage even Put that way, the possibil- 8 +/ #54#3#3#4+/# if it means getting beaned ities seem endless. But why 1 !(! ! "!-."!-. 1& ' '#(()*+,* 2 0 %, $ ") "!-. ' with a beach ball. limit the party to musicals? $ ! $ %"!-. & !(! ! $ ! ( $ %"!-. ' ' It may also be a way both for producers The creative teams behind future produc- to justify the high ticket prices and for audi- tions might consider flinging bottles of + 9#5+89 ences to rationalize them. Cannons shooting hand soap at “Macbeth,” sweaty undershirts 1 4 4& !. !("!-. 2 21 confetti! Talk about bang for the buck. at “A Streetcar Named Desire,” and Bibles at 4 -,0 '' 4#9 ". 2 4 4 $ "!-. ! "!-. 2 ' There was a time, not so very long ago, “Inherit the Wind.” '4 -,0:(;$2$ $ ! <(3!! when contented audiences at a musical left The winner for best throw this particular ' 4 -,0:(; 7! (, & 2 the theater humming the songs. Now they Broadway season? Let’s just call it a toss-up. ! ! ! " & = ! '1 9!"! " ;;" - & 1 leave brushing off their sleeves, not—apolo- #!$ %$ % 1 = ! 0! 00! / 00 0! ! 1 gies to Cole Porter—brushing up their Ms. Kaufman writes about culture for the & 1 4 -,0:(; '2 # -- $ % Shakespeare. “You come out on the street Journal. ! " #"$ #%$ &% % $ '( ) * + ' % , -

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www.LEASEFAX.com WALTER MCBRIDE/WIREIMAGE/GETTY IMAGES Theater marquee for Jimmy Buffett’s ‘Escape to Margaritaville’ THE WALL STREET JOURNAL. Wednesday, June 6, 2018 | A13 LIFE & ARTS

FASHION The Catsuit Aims for the Mainstream

Serena Williams, far left, wore a bodysuit at the French Open. Versace showed a luxury bodysuit, center, at its Spring 2018 show. Model Bella Hadid, right, wore this Alexander Wang outfit in 2017. FROM LEFT: REUTERS; GETTY IMAGES (2)

BY PIA CATTON materialize,” says Cassandra pants, she said, to keep “the blood If the bodysuit moment reaches Jones, senior vice president of circulation going.” beyond sports, it can affect con- Macy’s for fashion. “There are sev- Tight leggings are increasingly sumers at every level. Versace, SERENA WILLIAMS stunned the eral options from athletic brands. popular for tennis, says Dana Ma- Dolce & Gabbana and other luxury tennis world with her full-length, Also, we’re seeing jumpsuits be- son, a buyer at Mason’s Tennis brands included skintight jump- black catsuit at the French Open. coming tailored and fitted…an up- Ms. Patel says. “Now it’s a differ- NYC, a Manhattan retail shop, be- suits on the Spring 2018 runways. Are women ready to slip into date to the wide-legged and floaty ent conversation.” cause people say they feel faster. But such looks are often intended something that tight and turn jumpsuit silhouette that domi- She’s moving forward with the But the full-body look? “Usually for limited distribution. heads at the local gym? nated the last several years.” line. While Ms. Williams’s use of a when Serena wears an outfit, we New York couture designer Skintight suits aren’t flooding Bodysuits are already common suit helps, Ms. Patel says a bigger get requests for it right away,” Ms. Zang Toi was surprised by re- country-club courts yet. But Ms. in some fitness circles. factor is that more Air members Mason said. As of Monday eve- quests for silk jersey bodysuits af- Williams chose the suit for reasons Olympic athletes in events like have advanced to faster, more ning, she said she hadn’t gotten a ter showing his Spring 2014 collec- that mere mortals can relate to. As sprinting, bobsledding and speed- complicated classes, making the single Serena-related call. tion. “I really thought it would just she told reporters, it helps prevent skating use bodysuits designed for need more apparent. Designers initially conceived be for the runway,” he says, noting blood clots, a recurring problem aerodynamic efficiency. Amateurs At New York City’s Circus Ware- Ms. Williams’s suit, which took that the one-piece silhouette can especially since she gave birth in who enjoy workouts based on cir- house, co-founder Suzi Winson two years from idea to debut, as a be slimming. September. She also said it makes cus skills, such as aerial fitness or says trapeze pros and hobbyists, postmatch recovery aid, according For Fall 2018, he created a one- her feel like a superhero, adding a trapeze, also use bodysuits fre- including men, use full-length to Nike materials. Speeding up the piece suit in jacquard, a stiff fabric postpartum morale boost that she quently. Inverted poses can send a bodysuits. But on this scene body- recovery process with compression that doesn’t mold to the body. “A shared in an Instagram note salut- shirt away from the body, exposing suits go by their traditional name, garments is common for endur- catsuit is not forgiving,” he says. ing new moms. (A pectoral muscle the skin to possible burns or abra- unitards, because they combine le- ance athletes, says triathlete Gina “It shows every ounce of muscle.” injury forced her to withdraw from sions against ropes, bars or poles. otards and tights in one. Baski, co-founder of TriFit Club & For some consumers, that’s the the tournament on Monday.) At the aerial fitness studio Air, When performers in the vertical Studios in Santa Monica, Calif. point, says Raymond Phillips, store Her example has the athleisure which has 10 locations, a mix of gymnastics act known as the Chi- “Although I am not convinced manager of FootGear NYC, a apparel world wondering if women conditioning, Pilates and ballet nese pole hoist themselves like they help with performance, they do sneaker shop in New York’s Har- are ready to embrace a shape-hug- takes place on silk “hammocks” flags against a tall metal pole, help with recovery,” Ms. Baski says. lem neighborhood. ging, body-conscious approach to hung from the ceiling. Bodysuits shirts can go flying or get twisted, “If they help with recovery, they Adidas makes a bodysuit the everyday clothing. Until recently are popular within retail boutiques exposing the skin to the pole. will help with later performance.” store has had success with, he such clothing was mostly reserved of the Los Angeles and Chicago lo- Ms. Williams had other con- Sales of bodysuits aren’t yet says. If the brand’s signature for the realm of fashion, where cations, says founder and presi- cerns as she returned to tennis. tracked as a category by the stripes don’t fall in a plumb line Bella Hadid might turn heads with dent Shama Patel. After her pregnancy, she suf- Sports & Fitness Industry Associa- along the body, so much the bet- high-couture catsuits. Ms. Patel asked Air franchise fered a pulmonary embolism, a tion, a trade group, a spokes- ter. “The lines may not be straight, “The bodysuit still has a little owners in 2017 what they thought condition in which a blood clot woman says. Dick’s Sporting but they will accentuate those time until it becomes a staple in about introducing Air-branded blocks an artery in the lungs. To Goods, the national retailer, curves,” Mr. Phillips says. “People the average consumer’s wardrobe. bodysuits. The answer was no. help prevent blood clots in the doesn’t sell them, according to a want that notoriety. ‘Yeah, I’ve But its influence has started to “Just a little too fashion-forward,” legs, she started playing tennis in spokeswoman. been working on my body.’”

Weather TheWSJDailyCrossword| Edited by Mike Shenk Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day. 40s 1234 5678 9101112 66 Fillers of pumps 26 Door word 50s 60s Edmontondt 60s 50s <0 VancouverV Calgary 50s 0s 13 14 15 67 Maker of 27 Heavyset 10s Handycam 16 17 18 28 Whirlybird Seattle 80s Winnipegp camcorders 60s 70s 60s 20s 50s 19 20 21 Down 29 Slow rate 80s 70s 80s Montreal 30s PortlandP d Bismarckk Ottawa 30 Icicles’ place 80s Helena AugustaA g t 40s 22 23 24 1 Co-star of Swit Eugeneg Billings 70s and Burghoff Mpls./St.p s//St./ PaPaul 60s TorontoT t AlbanyA bany Bostont 50s 31 Good place to Boisei 60s Pierre 25 26 27 28 29 30 70s Siouxoux FFalls 70s Hartfordrtford 60s 2 Tortilla base dye 70s Milwaukeek Detroitt Buffalol 70s CleveClevelandld Newew YYorkk 70s 31 32 33 34 Reno ChicagoChicCh g 3 Sufferer’s sound 34 Went ahead 70s Dess Moinesi PhiladelphiaPhhilh ddlhi lp h 60s Sacramento 70s 80s Salt LakeL CityCCity CheyenneCheh y Springfieldpgifild PittsburghPittsbh 35 36 37 38 39 36 Horrifically 70s 80s Omahah 4 Iago’s wife Denver Indianapolisd p CharlesChCharleston l t Washingtonhih ggtonon D.C.D.CD C 90s Sann Francisco Topeka 40 41 42 43 44 chaotic setting 90s 70s Kansas St.. 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New York City 72 57 pc 73 62 pc Dublin 65 49 pc 65 51 pc Warsaw 6748pc7454s s PET I L IAD CONDO Oklahoma City 92 70 s 93 69 pc Edinburgh 61 46 pc 61 47 c Zurich 78 59 t 75 57 t Solve this puzzle online and discuss it at WSJ.com/Puzzles. ASS NESTS SWASH A14 | Wednesday, June 6, 2018 THE WALL STREET JOURNAL. SPORTS

NBA FINALS Why LeBron Trusts His Teammates

On his youth team, every player got an MVP trophy. It’s a lesson that the Cavs star hasn’t forgotten.

BY BEN COHEN

Cleveland IN HIS FIRST season ever playing organized basketball, LeBron James went undefeated and won a Novak Djokovic championship. He was even

PASCAL ROSSIGNOL/REUTERS crowned the most valuable player of his team. But so were Willie TENNIS McGee, Frankie Walker Jr. and one young girl named Lavette Wilborn. The Summit Lake Hornets, a GRASS SEASON team for kids between the ages of 8 and 10 years old who belonged IN DOUBT to the same community center, won the Akron Recreation Bureau’s FOR DJOKOVIC youth league back in 1993. Their championship merited a brief arti- BY TOM PERROTTA cle in the local newspaper, which misspelled a certain 9-year-old player’s name as LaBron James, PARIS—For the first week of the and they were feted after the sea- French Open, Novak Djokovic son with a team banquet. looked like he was getting closer But what happened that night is to the kind of player he used to be, something that James has never a man who wins Grand Slam titles forgotten: Every player on the in bunches. But after his defeat in team went home with his (or her)

a French Open quarterfinal on own MVP trophy. T-B: COURTESY JOHN REED; MARCIO JOSE SANCHEZ/ASSOCIATED PRESS Tuesday, Djokovic was dis- It didn’t matter that traught—and unclear about where James was the best Above, the Summit Lake Hornets, with LeBron James, won the Akron and when he would play next. player on the Summit Recreation Bureau’s youth league in 1993. Left, James in action Djokovic lost to Marco Cecchi- Lake Hornets by the end during Game 2 of the NBA Finals on Sunday. nato, a 25-year-old who had never of the season. His won a match in the main draw of a coaches would’ve stuffed “At 9 years old,” Reed points and assisting on five more Grand Slam event before this tour- pizza in his face if he’d said, “he knew how to field goals, even though he’d only nament. Cecchinato was found complained that sharing pass to 7-year-olds with- played two quarters. guilty of match-fixing in 2016 but the honor was unfair. out knocking them down.” But something remarkable hap- his suspension was overturned by “That’s still fair,” said James couldn’t play ev- pened in that sudden-death over- the Italian Olympic Committee. Hornets coach Frank ery minute of every game time. James didn’t take the game- The 72nd-ranked player beat Djok- Walker Sr. “He still got back then. It was against winning shot. Instead the ball ovic in a 3-hour, 26-minute match MVP.” the rules. The Akron Rec- went to Brandon Weems, who is that ended in a tiebreak, 6-3, The decision to reward reation Bureau prohibited now Cleveland’s director of scout- 7-6(4), 1-6, 7-6(11). Djokovic saved the entire team with MVP teams with at least 10 ing. James won his first title be- three match points but could not trophies had a profound players from playing any- cause of his teammate. bring the match to the fifth set. effect on James early in one for more than two James deserved the MVP tro- Asked about the upcoming grass his development as the quarters. The Hornets had phy. But at the team banquet not season and Wimbledon, Djokovic greatest basketball player 11 players, and James had long afterward, Reed and Walker said he might not be a part of it. on earth. He couldn’t to spend a full half on the Sr. decided it was only right to “I don’t know if I’m going to have known at the time bench. give every player an MVP trophy. play on grass,” he said. “I don’t how unusual it was. The other difference The reasoning of his coaches was know what I’m going to do. I just James didn’t have any experience to he is going to keep relying on the between the Hornets and Cavaliers beyond James’s comprehension. came from the court. Sorry, guys, I suggest otherwise. That’s simply the other Cavs. To understand why, it was that one of his teams was able “He felt it wasn’t right,” Walker can’t give you that answer. I can- way he believed that basketball was helps to study the most influential to survive the minutes when Le- Sr. said. “He didn’t understand it not give you any answer.” supposed to be played. team of his career: the Summit Bron couldn’t play. That’s because at the time because he was too Djokovic was back with his for- “Right then I knew that this is a Lake Hornets. one of his teams also had Lavette. young to understand. But I knew mer coach, Marián Vajda, who said team game,” James said last “It’s just been instilled in me “They were 1 and 1A,” said what I was doing.” Djokovic was not at his best at Ro- month. “It’s not about one individ- since I was 9 years old, when I first Walker Jr. The lesson stuck with James for land Garros, but improving. ual and how much one individual started playing, of what it means to “We both was about equal,” she the rest of his life. “He’s maybe 80% of his poten- can do in order to win champion- be in a situation where your team- said. “We both was good at what While it was lost in the mayhem tial, but he’s working constantly, ships. In order to win, you have to mates rely on you,” James said. we did.” that ensued, the series of unfortu- continuously for two months al- have a full team.” The fundamentals of basketball Lavette Wilborn, the only girl in nate events otherwise known as ready,” Vajda said. The Cleveland Cavaliers are were drilled into James as soon as the league, was the LeBron James Game 1 of these NBA Finals only Djokovic said he struggled with technically a full team. They have he joined the Summit Lake Com- of a team with LeBron James. She happened because of a similar de- an injury—at one point he had his uniforms and everything. And yet munity Center’s pee-wee team. He was bigger and so much better cision by James. With five seconds shoulder and neck massaged—but they’re down 2-0 to the Golden learned to play all five positions than the boys that she was left in the fourth quarter, he spot- felt better as the match pro- State Warriors in the NBA Finals many years before he made posi- anointed the most valuable player ted George Hill underneath the gressed. He led Cecchinato 5-2 in because James is right: it isn’t tions meaningless, and his coaches of the league’s regular season. “He basket and passed to him. Before the fourth set, but lost the lead. In about one individual. What he’s wouldn’t allow him to use his right didn’t particularly care too much everything went terribly wrong, the final tiebreak, Djokovic had a doing right now may be the most hand for left-handed layups, espe- for that,” Reed said. James had to do something right. set point three times, but could extraordinary run in the history of cially because he was ambidex- By the end of the season, He chose not to take the last shot not deliver. Cecchinato won on his the NBA playoffs, but not even Le- trous enough that he writes with though, the Hornets were LeBron’s of the game because there was a fourth match point by hitting a Bron James can win a champion- his left hand. But what most im- team. The championship game better shot available. backhand winner down the line as ship by himself. pressed John Reed, the head coach went to sudden-death overtime— It’s what he’s been trained to do Djokovic tried to serve and volley. But if there is one takeaway of the Summit Lake Hornets, was really—and the score was tied at since the moment he started play- “It was the best moment of my from the 25 years that James has his precocious star player’s intui- 30. James had been responsible ing this sport: LeBron James life,” Cecchinato said. been playing basketball, it’s that tive passing ability. for almost every basket, scoring 17 trusted his teammate.

NFL | By Jason Gay leased an anodyne statement thanking their fans and not men- tioning a word about the White House disinvite or Mr. Trump. NEVER MIND THE EAGLES: This could make the President bonkers. TRUMP SHOULD BE ALL CAPS What are the Eagles saying about my No-Eagles-Allowed party? They’re saying nothing, Mr. Pres- Another day, an- Some Eagles players did want to ident. other episode in the go to the White House—but tough What? Hand me my Twitter ma- life of President Donald luck. Everyone was out. The Presi- chine. Trump, Unofficial Com- dent still went forward with a cer- I’ve heard the argument against missioner of the NFL. emony, and Eagles fans were in- these White House ceremonies— But before we dive vited—I hope they didn’t climb up that dust-ups like this one, and the into it, could I have a brief aside the light poles outside 1600 Penn- President’s missed connection with to address the president? sylvania Ave.—but official team the Golden State Warriors, under- Mr. President: Hi. Jason here. personnel were banned. line the absurdity and political Yes, the idiot at the Journal. Not We could go around and around hazards of the tradition. sure you’re getting this advice in on this topic ad nauseam, like But these things weren’t such the Oval Office, but: there is one we’re on a terrible cable news big chores before. Players attended, and only one sports story that show: whether the President was players did not. Michael Jordan

matters right now in Washington, correct to ban the team; whether IME MAGAZINE HANDOUT/REUTERS skipped one. So did Larry Bird. D.C.—and that is the NHL Capitals, the Eagles should have just sucked Donald Trump poses with a bald eagle during a photo shoot in 2015. (“[The President] knows where to who are one win away from taking it up and gone; whether the White find me,” said Bird.) Tom Brady has their first Stanley Cup in franchise House is mistakenly (or very pur- reductivist, passionate and people jump into the Octagon. missed ceremonies with President history. posefully) conflating the Eagles’s on both sides are dug in. If NFL I’m sure the Eagles who wanted to Trump and President Obama. Stan- I know you love to jump on tepid RSVP with player protests ownership thought the President go to the White House are bummed. ley Cup winning goalie Tim Thomas football, it seems like great fun to during the national anthem. would lay off them once they made The players who planned to skip it bailed on a Bruins visit with Obama torment the league, but keep your Because here’s how many Phila- their anthem rule, they were foolish. are likely chagrined to see their because he felt the federal govern- eye on the puck. DO NOT MESS delphia Eagles players knelt during For the White House, this is choice painted as anti-American. ment was “out of control.” Manny WITH THE CAPS MOMENTUM, the national anthem last season, or great fun. Why give it up now? Or maybe they expected it. Ramirez missed a ceremony with MR. PRESIDENT! sat it out in the locker room: Zero. And this is why I’d recommend Again, here’s how many Eagles the Red Sox, prompting George W. OK, back to Trump vs. the NFL, That’s right. Nobody. this move for the Philadelphia knelt for the anthem during last Bush to quip: “I guess his grand- Part 4,000… I’m not sure the facts matter as Eagles: Ignore it. year’s Super Bowl season, or sat it mother died again.” This week’s drama involves the much as the rancor, however. Let it go. Do not make the same out in the locker room: zero. Which is a pretty funny line. Philadelphia Eagles, the Super Knocking the NFL is a very popu- mistake that so many of the Presi- Nobody. The point is, the show goes on. Bowl champs who found them- lar wrestling move for the Presi- dent’s targets make. Don’t engage. “People on the team [have] The President (whoever it is) is selves abruptly disinvited from a dent—he admitted as much last Don’t tweet. Go to the movies. Go plenty of different views,” tweeted supposed make a few bad jokes and White House visit on Tuesday. year in private conversations with get ice cream. Read John Carrey- the Eagles receiver Torrey Smith, hold up a shirt with his name on it. Apparently, President Trump— league ownership about the pro- rou of the WSJ’s Theranos best whose father served more than two It’s harmless photo-op, basically. fresh from victory over the NFL tests during the anthem, according seller, “Bad Blood.” Remove the decades in the Army. “The men and Now it’s become this heavy, hu- last week in getting the league to to the Journal’s Andrew Beaton. oxygen, allow the fiasco to evapo- women that wanted to go should’ve morless political…football. The adopt a stand-for-the-anthem pol- “This is a very winning, strong rate. Take a high road. been able to go. It’s a cowardly act White House is turning a sports icy—wasn’t thrilled to hear a lot of issue for me,” Mr. Trump said in a It’ll drive the unofficial NFL to cancel the celebration because ceremony into a showdown over Eagles weren’t planning to show phone call to Dallas Cowboys commish crazy. the majority of the people don’t patriotism. for Tuesday’s ceremony. owner Jerry Jones, according to a I think by now we all know that want to see you. To make it about It’s silly, unproductive, and best The President must have imag- sworn deposition reviewed by the President Trump lives for the the anthem is foolish.” to ignore. There are bigger issues. ined himself carrying a tray full of Journal. “Tell everybody, you can’t fight. Conflict is his fuel. A battle All fair points! But I still say: ig- Like the biggest sports story in green-frosting Eagles cupcakes— win this one. This one lifts me.” allows him to dictate terms, nore it. Washington, D.C., right now: and only a handful of takers—and I agree. Taking on the NFL has stretch the drama, poke his oppo- So far, the Eagles are flying low. CAPS! CAPS! CAPS! ONE MORE pulled the plug. been a winner for Trump. It’s noisy, nents. He wants his enemies to On Monday night, the team re- TO GO! THE WALL STREET JOURNAL. Wednesday, June 6, 2018 | A15 OPINION

Starbucks Chief Won’t Stay Hot BOOKSHELF |BY David J. Meltzer Trekking Howard to finance his campaign, he against, a complete turn- his knack for identifying the Schultz’s re- would not be mentioned. Cyn- around in less than 10 years. real feelings of a big chunk of tirement as ics might even suspect the Schultz’s stand isn’t nearly as the electorate, and the fact Starbucks boomlet is fluffed by pollsters daring as it would have been a that Democrats nominated The Ice Age chairman and consultants hoping to get few years back.” Hillary Clinton, plus one more could “stoke into his pockets. His other two other quasi- thing: BUSINESS speculation” What else qualifies him political occasions—after New- We’ve wrestled with the WORLD of a presi- when so many CEOs who pri- town, requesting that custom- idea that Mr. Trump has dential run, vately consider themselves ers not openly display guns in changed the norms of U.S. pol- Atlas of a Lost World By Holman W. we’re told by presidential material are not his stores; and a recent racial itics. He clearly has, but how? By Craig Childs Jenkins, Jr. one of the mentioned? The answer is a incident in Philadelphia—were Politicians uttering idiocy, lies (Pantheon, 269 pages, $28.95) stokers in handful of occasions in which forced on him by others using and demagoguery is nothing the New York Times. he inserted himself into a Starbucks as a stage for their new. Mrs. Clinton’s disingenu- ometime during the last Ice Age, the first people came to The man who turned a Se- passing public controversy, own political statements. ousness about why she lost is S America. They trekked across a land bridge then linking attle coffee chain into an in- most notably Washington every bit as dishonest as Mr. Siberia and Alaska and, without realizing it, entered what stitution of global ubiquity state’s 2012 gay-marriage Trump’s disingenuousness was truly a New World. Some ultimately turned back; others has been “frequently men- referendum. Like his coffee, the about his inaugural crowds. lingered in Alaska. Still others headed south and must have tioned” as a Democratic Party He was widely credited for Howard Schultz President Obama’s reliance soon realized, seeing no smoke on the horizon or freshly candidate, adds this frequent telling a shareholder to sell on straw-man arguments to speared animals, that they were alone on a vast landscape that mentioner. his stock if he disagreed with political boomlet is humiliate any who disagree became increasingly unfamiliar the further they went. Treading the path of many the company’s stance, but best consumed fresh. (we begin to learn) was an- Archaeologists and their fellow travelers—principally business people who enjoy that’s not what he said. He noying even to those inside geneticists these days—seek to understand who these first hearing themselves referred said the shareholder should his administration. Americans were, where they originated, when they arrived, to as presidential timber, Mr. sell his stock if the share- Mr. Obama illustrates the and especially how they so successfully traversed the great Schultz’s way ahead is clear: holder could find another in- Since announcing his re- point: So much political physical and ecological range from Alaska to Patagonia, all in spend the next umpteen vestment that returned 38% in tirement, Mr. Schultz mostly speech is about displaying the blink of a geological eye. These scientists fuss over subtle months trying to extend the a year, pretty much as if to just noted that the country is power and dominance, not differences in the manufacture of stone projectile points, de- boomlet that obliging scribes say there was no downside to divided (it always is). He persuasion—showing you bate whether scratches on mammoth bones were made by started this week. the business from the com- seemed to imply that the way have the mettle to prevail. nature or a hunter’s knife, and peer into complex genomic However unlikely his eleva- pany’s politicking. forward is for everyone to The Trump difference has sequences to link ancient and tion to the White House, there Don’t take this as a criti- agree with the progressive been his willingness to go modern peoples across space will be an extra murmur in ev- cism. Politicians strive to get agenda. Then he went on TV places and use language oth- and time. It’s easy to get lost ery crowd as gawkers jostle a reputation for being brave Tuesday and questioned the ers won’t. Our guess also is in the details. and say there goes a potential without being brave. Virtually affordability of single-payer that readherence to the con- “Atlas of a Lost World” by president. Decades from now, all of Seattle’s major busi- health care and entitlements ventional limits (meager as Craig Childs, a nature writer and in his golden years, Mr. Schultz nesses, from Amazon and Mi- generally. By the time you they are) will be strongly re- wilderness adventurer, aims to can revere himself not as a crosoft to Nordstrom and read this, the boomlet may be quired of whoever comes be a guide through that scholarly man who sold overpriced cof- Nike, backed the gay-mar- over. next. thicket. But more than that, it is fee, but one who his contem- riage measure. President The most galumphing ca- Mr. Schultz is clearly not also a tale of his journeys into the poraries said should be leader Obama, single-mindedly fo- nard is that Donald Trump without political talents. Like wild to retrace the steps of the of the nation, dammit. cused on his own re-election, paves the way for all who many business types with po- first Americans, so that it might All this will be an excellent decided it was safe to en- succeed in business suddenly litical stars in their eyes, he give us a glimpse of what their substitute for actually run- dorse gay marriage. to succeed in presidential really dreams of being ele- journey may have been like tens of ning, and a great deal more As Forbes magazine noted politics. vated by acclamation because thousands of years ago. As an ar- satisfying. at the time, “A Washington Mr. Trump did not rise be- of his innate good intentions. chaeologist who works on this time period, In Mr. Schultz’s case, fun- Post poll this week found that cause of his business success To his credit, he perhaps lacks I admire his attempt to convey the lived experi- damental to being mentioned support for gay marriage in any traditional sense, but the stomach to do what’s re- ence of these past people—my kind does too little of that. Yet I is his ability to write himself a among Americans has shot up for a host of reasons related ally necessary to win in presi- also see that his limited archaeological expertise leads him big check. If he needed others to 58% in favor and 36% to his made-for-TV persona, dential politics. into pitfalls about what that experience entailed. But first the adventures: The book opens with Mr. Childs on an island in the Bering Sea, a onetime high point on the land bridge that is now drowned by 160 feet of water, and ends Bibi Is Bent on Taking On Iran Alone with him at the Burning Man festival in Nevada’s Black Rock Desert, the dry floor of an Ice Age lake. In between, we learn Jerusalem summarized by the Jerusalem interpretation” of the law. But The 2015 Iran nuclear deal of archaeological sites and finds from Siberia to South Amer- Frustrated by Post’s Caroline Glick, for control on Dec. 7, 1941, few Americans seemed to have rendered the ica, meet friends and family, and join his travels in bureaucratic over Israel’s response to grow- doubted that Japan’s surprise debate moot, but the Trump remembrances of past times. Mr. Childs hikes onto the resistance to ing Iranian power throughout attack on Pearl Harbor administration’s decision to Harding Icefield, on the Alaskan coast, though I was perplexed his policies, a the Middle East. In 2010 Meir amounted to a declaration of withdraw from the agreement as to why Ice Age hunter-gatherers would have done so— prime minis- Dagan, then director of Mos- war. Similarly, U.S. and Israeli has revived it. In April the there’s no food there; goes sea kayaking down the Pacific POLITICS ter orders the sad, received an order from strategists assume that Teh- Knesset passed an amendment Coast, which may have been the original route in the Ameri- & IDEAS head of his Mr. Netanyahu to prepare an ran would treat an Israeli at- permitting the prime minister cas; and paddles through gator-infested Florida swampland. domestic-se- attack against Iranian nuclear tack as the initiation of a ma- and defense minister to de- These vignettes are for me the pleasure of the book. They By William curity agency installations, as did the Israel jor war and would respond clare war without the authori- convey a love of the land, a yearning for what has been lost, A. Galston to spy on the Defense Forces. Rather than accordingly. zation of the security cabinet and are by turns interesting, funny, warm, insightful and occa- head of his in- obey, Dagan informed Central in certain circumstances. sionally just a little silly, like the re-enactment of a mammoth telligence service and the chief Intelligence Agency Director Faced with vehement opposi- hunt across the dunes of New Mexico’s White Sands National of staff of the armed forces. Leon Panetta of the order, en- Israel’s prime minister tion to this move, however, Monument, in which Mr. Childs has the starring role as the That would be a great opening abling the Obama administra- bucked his cabinet the cabinet voted in May to prey (spoiler alert: the mammoth dies). for a thriller novel—but it’s a tion to pressure Mr. Netanyahu to boost his authority restore the status quo ante. true story, which smacked me to stand down. Dagan also ar- The dispute over what it An adventurer follows in the footsteps of the in the face the moment I got gued that the prime minister to launch a strike. means to declare war was left off a plane in Israel. didn’t have the authority to unresolved. earliest people to come to the Americas—from Asked whether the report order the attack without the There is no reason to believe was accurate, Prime Minister concurrence of Israeli’s secu- Mr. Netanyahu has altered his Alaska to Patagonia to the Florida swampland. Benjamin Netanyahu’s office rity cabinet, which includes Behind the legal dispute is a intentions, which are rooted characterized it as “a distor- several senior ministers. Un- deep substantive disagree- deeply in his conception of tion of institutional efforts that sure of his ability to carry the ment. Israel’s defense and in- himself as a Churchillian figure Mr. Childs knows, of course, that he can delve into an Ice are occasionally made to pro- day and keep the matter confi- telligence establishment does mounting a lonely effort to Age mind only so far. Even so, and though one can scarcely tect classified information of dential, Mr. Netanyahu shelved not share Mr. Netanyahu’s con- warn the world against a resur- prove it, I’ll bet he’s right when he says that the first Alaskans utmost importance to Israel’s his plan. fidence that a strike against gence of fascism. would have watched birds flying south and wondered where security.” This is a classic non- A year later, Mr. Netanyahu Iran would work to Israel’s ad- Sometime soon, President they were going; or that our love for climbing a hill for the pan- denial denial. Yoram Cohen, again ordered Mossad and the vantage. A daylong simulation, Trump will likely face a raft orama comes from ingrained memory, “the earliest form of car- who led Israel’s domestic secu- IDF to prepare a strike against in which I participated years of fateful decisions. Will his tography, a sense of location.” That would certainly explain the rity at the time of the phone Iran. Tamir Pardo, Dagan’s ago, reinforced their doubts. In administration, which has litter of artifacts of all ages that I often see on high spots in re- taps, denied that the prime newly installed successor, in the best-case scenario, a maxi- aligned with Mr. Netanyahu mote regions. Other claims aren’t as illuminating. He so often minister had “specifically” turn mobilized resistance to mal Israeli attack would leave on issue after issue, give Is- repeats his worry that colonizers would have been eaten by the asked him to spy. One unnamed the order. Attorney General Ye- a portion of Iran’s nuclear pro- rael the green light to attack big carnivores that roamed this landscape that one can’t help “senior security officer” told a huda Weinstein supported Mr. gram intact, and Iran’s conven- Iran? If so, how much will it wondering if he’s projecting his own fears or just stoking the TV station recently that he had Pardo’s position that only the tional forces would retain the do to support this attack? If plot for dramatic effect. These are hunter-gatherers who witnessed the prime minister security cabinet could approve capacity to retaliate against Is- Iran’s retaliation targets scarcely paused in their colonization of the Americas. More- request wiretaps on more than such an order. raeli assets, including its nu- America’s assets and allies, over, we have evidence that they could be highly successful 100 military officers and cabi- This is a genuine legal dis- clear facilities near Dimona. In will the U.S. seek to contain predators, and none that they were prey. net ministers five years earlier. pute. No one doubts that un- addition, the Iranians would the conflict or escalate it? Mr. Childs views the record of their colonization through The account prompted Yair der Israeli law only the secu- probably mine the Persian Will U.S. aims expand to in- different lenses. There are the archaeological sites that have Lapid, a former cabinet minis- rity cabinet is empowered to Gulf, throttling much of the clude regime change, which survived the millennia. These can be highly fragmentary, ter and current opposition “declare war.” The question is world’s oil supply. The U.S. Mr. Trump’s national security rendering their meaning subject to dispute, as he recognizes. leader, to say, “If this really did whether a first strike against would get dragged into the adviser supports? Still, he often can’t resist putting his thumb on the scale, happen, this is as serious as Iran is tantamount to a decla- fray, generating a huge debate Mr. Trump’s answers to including endorsing a purported 130,000-year-old site that Watergate.” ration of war. Ms. Glick re- within the American govern- these questions will go a long clocks in at more than 100,000 years older than any other site Behind this episode is a gards an affirmative answer ment about how far to go in way toward defining his place in the Americas and whose legitimacy teeters on battered continuing struggle, usefully to this question as a “radical support of Israel. in history. stones and fractured mastodon bones. Mr. Childs sees those breaks as “hard to mistake for anything but human.” To most archaeologists they look nature-made. And then there’s DNA evidence of the colonizers’ population history, which can be Pardon Me, Said the President to Himself challenging to interpret if you don’t know the rules and can’t spot the foul. When Mr. Childs asks an archaeologist about By Richard A. Epstein system to inflict punishment. rejects the self-pardon by in- exercising the pardon power. genetic evidence that disproves the archaeologist’s pet theory Unlike appointments and trea- voking the principle that “no Placing the president under a that the Americas were originally populated by Europeans resident Trump shocked ties, pardons never require one may be a judge in his own traditionally defined fiduciary and not ancestral Native Americans, the reply comes back, P the nation Monday by Senate consent. case.” duty would purport to con- “Bull—,” followed by a smirk. The genetic evidence is announcing via Twitter: Skeptics sometimes argue These arguments miscon- strain the pardon power in ev- anything but, yet Mr. Childs cannot call the bluff. “I have the absolute right to the pardon power is con- strue the scope and limits of ery case, by demanding that “Atlas of a Lost World” trips over many such matters. PARDON myself.” Many of his strained by Article II, Section executive power. The presi- the president act with reason- Postglacial sea-level rise, even at its most rapid 14,500 years liberal critics deny he holds 3, which instructs that the dent does far more than exe- able care and disinterested ago, was not so fast that the sea would have seemed as if it this power. But their disdain president “shall take care that cute laws. He has the power to motives. were “closing like a noose” or would even been noticed on has led to faulty constitutional the laws be faithfully exe- make appointments and nego- The desire to target Mr. the scale of a human lifetime. Projectile points fashioned by analysis. I share the view that cuted.” The claim is that the tiate treaties; neither involves Trump doesn’t justify outland- Clovis people some 12,800 years ago were not the “nuclear” any decision by Mr. Trump to executing law. Nor does the ish legal interpretations. Nor weaponry of a “stupendous killing force”; some were knives, pardon himself would spur a exercise of the pardon power, does it allow Mr. Trump to be others were used to harvest plants. And the dopamine political disaster of, well, Trumpis right about whether done faithfully or impeached for exercising his receptor D4 is linked to novelty seeking, but its apparent Trumpian proportions. But that what he could do— not. Similarly, the president pardon power, unless his par- occurrence in higher frequencies in populations ever-distant is precisely the point. The pow- is not acting as a judge when don constituted treason, brib- from Alaska is not proof that “people needed that much more erful check public opinion though he shouldn’t. he pardons another person. ery, or other “high Crimes and [D4] umph to reach that far south.” After all, D4 is also linked places on the president reduces How does he suddenly be- Misdemeanors.” In the end, to marital infidelity: Do we conclude that South America was the need to conjure a prohibi- come a judge when pardoning Congress is prosecutor and peopled by cheating spouses fleeing their exes? tion of self-pardons from the “take care” clause prevents a himself? judge of any impeachment. But Such errors inevitably undermine the book’s scientific text of the Constitution. presidential self-pardon be- A requirement that the remember that an abuse of the credibility. But read “Atlas of a Lost World” for what it is, Article II, Section 2 says the cause “it’s inherently in his president must never use his impeachment power would not what it isn’t. It’s a clever, smartly written and altogether president “shall have Power to own self-interest.” A variation vast powers for his own inter- pose a far greater risk to our enthusiastic effort to breathe feeling and life into the human grant Reprieves and Pardons of this argument holds that a ests would make every presi- constitutional order than any processes behind all those ancient sites, artifacts and busted for Offenses against the United self-pardon would violate the dential action legally dubious, misuse of the pardon power. animal bones. The past is a country to which one cannot States, except in cases of im- president’s fiduciary duty to as some form of self-interest return, but “Atlas of a Lost World” at least helps you peachment.” This power is not serve the interests of the peo- is always among every execu- Mr. Epstein is a law profes- imagine what you might be missing. subject to any textual limita- ple over himself. And a third tive’s motives. The same sor at New York University, a tion. Indeed, the pardon power variation, urged by the Justice problem undercuts the absurd senior fellow at the Hoover In- Mr. Meltzer, a professor of archaeology at Southern was created as a unilateral Department in 1974, on the eve notion that the president stitution and a senior lecturer Methodist University, is the author of “First Peoples in a check on the power of the legal of Richard Nixon’s resignation, must act as a fiduciary when at the University of Chicago. New World: Colonizing Ice Age America.” A16 | Wednesday, June 6, 2018 THE WALL STREET JOURNAL. OPINION

REVIEW & OUTLOOK LETTERS TO THE EDITOR

Rick Perry’s Obama Imitation Accommodating the Disabled in Higher Ed

ne Trump Administration achievement According to the Trump memo, Section 202 of As professionals with extensive ex- greater acceptance of disability in has been liberating U.S. energy produc- the 1920 Federal Power Act lets the Energy Sec- perience working with students with higher education. O disabilities, we were dismayed by Meanwhile, students must provide ers of all kinds from federal shackles. retary mandate the delivery or generation of “Colleges Give the Disabled More Lee- documentation of specific diagnoses Companies have responded electricity during an emer- His intrusion to way” (U.S. News, May 25). People to campus officials who are trained with jobs and investment, but gency. It also suggests that the with disabilities face many needless to make determinations about all of a sudden the Adminis- save coal and nuclear President could use his au- barriers to employment because of ill- whether those students require rea- tration wants to do a Barack thority under the 1950 De- informed ideas about their capabili- sonable accommodations. The pro- Obama imitation and play en- plants is as bad as fense Production Act to “con- ties or the nature of accommodations. cess is far more involved and nu- ergy favorites. renewable subsidies. struct or maintain energy Few would suggest that it is unfair to anced than a student’s obtaining a The National Security facilities” to protect national provide a person in a wheelchair with doctor’s note that then binds the Council on Friday reviewed a defense. a ramp while those who are able use school to provide accommodations, 41-page internal memo, leaked None of this is necessary. stairs. While some believe that “fair” as the article suggests. ANGIE BRUNK MLS, M.A. to Bloomberg News, suggesting that President Energy companies are already working with reg- means “same,” fairness better refers Trump invoke emergency authority to require ulators to fortify their cyber firewalls. PJM, to “equitable” opportunity, which may St. Joseph, Mo. well be different for people with vary- ERIC J. MOORE, PH.D. grid operators to buy nuclear and coal power. which manages wholesale power markets across ing needs. Accommodations don’t re- Knoxville, Tenn. But there’s no emergency, and the political in- 13 states in the mid-Atlantic and Midwest, says duce or change learning objectives; tervention will do more harm than good. “there is no immediate threat to system reliabil- they provide supports to students When these disabled students ap- iii ity” and the region currently has a 25% energy who need them, to the degree needed, ply for a job after college or to gradu- The supposed problem is that the U.S. is pro- capacity surplus. The Energy Information Ad- to enable them to achieve rigorous ate or medical school to continue ducing an abundance of cheap natural gas ministration projects that coal-fired electric outcomes alongside their peers. their studies, are there going to be thanks to the shale fracking revolution. As a re- generation will “stay relatively flat” over several According to the National Center different metrics used to rate these sult, national electric wholesale prices for natu- decades despite plant retirements since “utiliza- for Education Statistics (NCES), stu- students among their peers? DON WAGSTAFF ral gas have plunged by half since 2008, even tion of the remaining coal fleet” will increase.” dents with disabilities made up 13% more in shale-rich areas like Ohio and Pennsyl- In other words, the same amount of coal will be of the K-12 school-aged population Oro Valley, Ariz. from 2011-16. Similarly, the most re- vania. Meanwhile, government subsidies such burned from fewer plants. cent estimates available, also from I can appreciate the need for some as the 30% federal investment tax credit have The Trump memo cites a March warning NCES, indicate that higher-education college students to require extra test boosted solar and wind production while driv- from the New England transmission organiza- students with disabilities make up time, especially for reading. However, ing down the wholesale cost. Many nuclear and tion that “retirements of coal-fired, oil-fired and between 11% and 12% of the student how is a request for “low-distraction coal plants unable to compete with renewables nuclear generators” will have a “significant im- body nationwide. environments” going to help them and natural gas may have to shut down over the pact on reliability.” But the New Hampshire Su- The fact that the percentage of when their first job has them working next few years. preme Court last month issued a ruling that will students with disabilities who at- in an open-plan office? How often is Energy Secretary Rick Perry directed the ease the way for a major gas pipeline expansion. tend college is growing more repre- “I need extra time” (relative to my co- Federal Energy Regulatory Commission (FERC) FERC could also overrule New York Gov. Andrew sentative of the population may re- workers) acted on in a positive way in last September to consider if power plants that Cuomo’s legally dubious decision barring the flect effective programs in K-12, a business environment? PAUL HALE store at least 90 days of fuel on site should re- Constitution Pipeline that would transport more greater career opportunities for individuals with disabilities and/or Doylestown, Pa. ceive additional compensation. According to shale gas to New England. DOE, natural gas is prone to supply disruptions Mandating that grid operators buy more ex- and the country needs a stored fuel supply to pensive coal and nuclear power would raise ensure the lights stay on during extreme consumer prices and could reduce natural gas weather or cyber-attacks. production that has been a boon to many states. Pueblo Capture: A Failure of Senior Officers FERC in January unanimously rejected Mr. And note to Mr. Trump: Energy is one of the Regarding Richard Miniter’s “Re- overboard in the shallow sea. Perry’s proposal, noting that it was already im- biggest costs for steel and aluminum manufac- member the Pueblo, Mr. President” The consequences of the capture of proving grid reliability and cybersecurity. The turers. The government rescue for coal and nu- (op-ed, May 23): The USS Pueblo mis- the machines and cryptographic keys commission initiated a rule-making to consider clear is as politically abusive as Mr. Obama’s sion was poorly conceived and man- were very serious. The North Koreans if additional actions are warranted. It also lawless policy to punish fossil fuels. aged at the highest levels of both U.S. passed the haul to their Russian launched an investigation into whether grid op- A better way to make coal and nuclear more Navy and NSA commands. The ship sponsors, whose various military spy was never intended or modified for and cipher organs could read U.S. erators were fairly compensating “fast-start re- competitive is to keep chipping away at renew- use on open, rough seas nor was it strategic and tactical communications sources” that can respond “quickly to unfore- able subsidies and cutting regulation. Mean- equipped to defend against attack by for years afterwards. About one mil- seen system needs.” time, the Trump Administration’s deregulation the enemy. It left Yokosuka, Japan, lion classified messages were de- But coal and nuclear power producers have and an uptick in exports are helping to revive with a huge excess of top-secret cryp- crypted by the USSR. lobbied Mr. Perry to short-circuit the FERC re- the coal industry. Employment in coal mining tographic and signal-interception Although Cmdr. Lloyd Bucher and view. Ohio-based utility FirstEnergy’s power increased by 2.5% last year compared to 1.8% gear, manuals and cryptographic keys his crew had no useful defensive generation business filed for bankruptcy in growth for all private jobs. Metallurgical coal (not “punch cards”). weapons or equipment destruction April, which could result in the closure of sev- exports increased by a third last year thanks in The long and difficult destruction capability, they did the best they eral coal and nuclear plants. The White House part to growing steel production. process of tons of classified machines could while under massive attack. is also worried about layoffs in states like West As Governor of Texas, Mr. Perry often visited (KL-47, KW-7, KWR-37 and KG-14), The real culprits, at the highest Virginia, Pennsylvania and Ohio before the mid- our offices to explain why the U.S. government keys and documents was never con- levels of the Navy and NSA, were sidered by the NSA or Navy since never held responsible. I hope the term election. shouldn’t pick energy winners and losers. He’s previous “ferret” missions were un- lessons of the Pueblo incident are Thus, the rescue plan—er, regulatory bailout. still right even if he has moved to Washington. eventful. During the Pueblo event, the taught to today’s classes in the Navy difficult and long destruction was and at the NSA. chaotic and makeshift. Much material JON PAUL, MSEE, ARCSI Now Hiring—Everywhere wound up intact, still on the ship or Paris

hen does the lack of workers begin to port. Openings have increased over the last year W limit economic growth? No one in nearly every industry tracked by Labor, nota- Evergreen State’s Bias Finally Exacts a Price knows the answer, but it’s a question bly in manufacturing for durable goods and pro- the Trump Administration fessional services. While accurately recounting the jors and they are never required to The tight labor market protest-mob politics that have put follow a specific set of programs. Fac- should consider as evidence The manufacturing open- the college in a tailspin (“Rough So- ulty (myself included) write evalua- grows of a tight labor market. may soon become an ings may increase further as cial Justice at Evergreen State” options that are largely boilerplate re- The latest data arrived Tues- obstacle to growth. businesses expand their capi- ed, May 23), Jillian Kay Melchior treads. Courses (like mine) are never day with the Labor Depart- tal spending as the benefits might also address the deeper issue given any serious review as to con- ment’s monthly job openings from tax reform spread, but at the root of the failed experiment tent or delivery. President George report through the end of eventually CEOs will have to that is the Evergreen State College: a Bridges makes major cuts to pro- April. The survey showed nearly 6.7 million job reconsider investments if they can’t find enough complete lack of accountability at ev- grams that actually impact students, openings, up about 65,000 jobs from March and workers. Some will raise wages, but that is lim- ery level. Students aren’t accountable while creating new high-paying ad- the highest number since the government ited by the ability to raise prices. because there are no grades, no ma- ministrative positions (vice president started tracking this data in late 2000. Another response will be to invest overseas for indigenous arts, vice president for The figure has now exceeded six million for where there are more workers to hire. If Presi- inclusion, etc.), without having to an- Current TV Did Very Well swer to anyone. While this kind of most of the last year, and the number of job dent Trump really wants businesses to stay in nonsense can work for a while, it openings now exceeds the number of Americans America, he’s going to have to reconsider his And Sold for $500 Million eventually starts to wobble and then looking for work in the monthly employment re- hostility to immigration. Regarding Holman Jenkins’s “Net- falls apart. Thus, even with a 98% ad- flix Invests in Obama’s Celebrity” mission rate, a gorgeous taxpayer- (Business World, May 26): As Current provided campus, legal marijuana and The GOP’s Welfare to Work Pitch TV’s former CEO and co-founder (to- free-flowing state and federal aid, gether with Al Gore), we were in fact savvy students have begun to vote he low U.S. labor force participation get and keep a job? Health and Human Services unable to get television carriage for with their feet. JOHN FORTUGNO rate has several causes, but a major will manage a dashboard that grades states. the first few years of our endeavor— T and certainly didn’t obtain it by play- Adjunct Faculty (MPA), one is the disincentive to work created States have flexibility on setting goals and tar- ing in the “political rent-seeking” Evergreen Alumnus (’02) by government programs. gets, which can dilute account- Some good ideas for game. We eventually obtained distri- Olympia, Wash. The Republican Party’s ability but is an improvement bution only by buying another TV growth wing has spent years getting Americans back over the status quo. network, News World International, While enrollment applications at developing ideas for address- Some changes aren’t about for which we paid $70 million to the Evergreen State are down 20% in the ing these incentives not to in the labor force. the folks receiving benefits but French company that previously immediate wake of campus disrup- work and rise up the eco- the people who run the pro- owned it. Only one of Current TV’s tions, the other shoe hasn’t dropped nomic ladder, and the results grams. State benefit offices are carriage agreements had a minimum yet: job placement. What employer are starting to show. too often places to pick up a check and little else. viewership requirement, and Current wouldn’t be cautious about hiring Last month to almost no attention the House The plan would toughen up case-management TV’s audience exceeded that mini- students who are being trained to be Ways and Means Committee moved a bill from practices, which is essential for helping folks, mum the entire time that we owned intolerant, uncooperative, closed- Chairman Kevin Brady that would update the say, making a career transition. the network. minded and aggressively opinion- The Al Jazeera litigation ended ated? This is bound to affect the col- Temporary Assistance for Needy Families pro- The bill also says that states must direct the with 100% of the funds in the disputed lege’s allure to “adults, veterans and gram, known as TANF. This program is the re- funding toward families below 200% of the pov- escrow account being distributed to community-college transfers” who for sult of the Newt Gingrich-Bill Clinton 1996 wel- erty line. Governors and state legislators have Current TV’s former shareholders and the most part are practically minded. fare reform. shuffled money around into other priorities that 0% paid to Al Jazeera. Current TV was MAX HENSLEY The American Enterprise Institute’s Robert aren’t aimed at low-income individuals, and the youngest network ever to win an San Antonio Doar noted recently that TANF on the whole is TANF funding has become a popular pot for Emmy Award, and it won two Emmys a success. The program has declined as a share state lawmakers to raid in a pinch. and the prestigious Peabody Award in of 1996 spending while Medicaid and food Attacks from Democrats will not be nuanced— the years that we owned the network. Pepper ... stamps have exploded. One big reason is be- or accurate. Mr. Brady’s bill maintains current We sold the network for $500 mil- And Salt cause TANF is a block grant to states, unlike the levels of funding. It isn’t “slashing” or “gutting” lion—twice the amount paid for the Medicaid racket that allows states to draw or other descriptions that are sure to appear in Washington Post. THE WALL STREET JOURNAL Our story was one of going around down more federal dollars for every new en- the coming weeks. For now the bill looks like a a closed, oligopolistic industry, inno- rollee. The program even survived attempts at long shot in the Senate thanks to flight risks like vating new consumer-friendly for- sabotage by the Obama Administration like ex- Susan Collins of Maine, but welfare reform is pop- mats, creating value that didn’t exist panding waivers for work requirements. ular. The House is also moving as part of the farm before and realizing that value for all The current system requires states to engage bill on work requirements for food stamps, which stakeholders. That’s usually a story 50% of families in work activities. But that are a much larger share of spending on income the Journal likes to celebrate. means states can write off some of the tougher transfers. JOEL HYATT cases. And gimmicks like a “caseload reduction The timing is right for these reforms amid Atherton, Calif. credit” allow states to buy down the 50% rate to a 3.8% jobless rate and worker shortages across a much lower benchmark or even 0% of families. the country. Paying people to make it easy not Letters intended for publication should Mr. Brady’s bill would require that 100% of recip- to work—and thus languish for a lifetime in pov- be addressed to: The Editor, 1211 Avenue of the Americas, New York, NY 10036, ients engage in work or training as a precondi- erty—is not compassionate. It’s destructive of or emailed to [email protected]. Please tion of receiving benefits. human dignity and leads to more inequality. Re- include your city and state. All letters More broadly, the bill moves from a measure publicans are right that welfare reform will as- are subject to editing, and unpublished of participation in work to new metrics that will sist American upward mobility, and they should letters can be neither acknowledged nor “Sorry I’m late. My Uber driver turned returned. try to tilt at questions such as: Did this recipient take the case to the public. out to be the Google maps guy.” THE WALL STREET JOURNAL. Wednesday, June 6, 2018 | A17 OPINION Is Trump Following a Grand Mideast Strategy?

By Daniel J. Arbess and resolving the Is- be a very good deci- not-incidental bonus of getting the raeli-Palestinian con- sion—provided it’s failed “reset” with Russia back on hat if President flict. The last has be- eventually replaced track. Cold War talk is the rage in Trump’s foreign pol- come a low priority with a real nonpro- Washington these days, and Mr. icy isn’t as impulsive in the Arab world, liferation regime Putin’s thuggish behavior doesn’t W as it may seem? Put but its resolution and an arrangement help. But Russia, the U.S. and Is- aside Korea and trade would liberate Israel that contains Iran rael have critical common interests and consider the Middle East. Mr. to assume a de- and its proxies’ ter- in redressing the spread of Isla- Trump’s disregard of orthodoxy served mantle of re- ror and mischief in mism much closer to Russia than could turn out to be exactly what’s gional leadership. the region. America. So far, Israel is alone in needed to sequence a comprehensive The president was Secretary of State cultivating the Russians, with the strategy for stabilizing the region— still right to start Mike Pompeo’s May U.S. out of the picture as Mr. Putin and to stanch the flow of Islamist with the Palestinian 21 Iran strategy earns credit for constructively roll- terror to Europe and the U.S. file, while consoli- speech articulated ing back Iranian influence on Is- The first step has been to forge a dating the alliance the challenge well, rael’s northern border. working consensus among Israel and working toward but making it happen Russia has little affinity for the and its Arab neighbors, aligned to consensus goals and will require excep- Iranian ayatollahs, especially with contain Iran and frustrate its strategies for the tionally smart diplo- their competing nuclear and energy dreams of a Shiite crescent through other two chal- macy. North Atlantic ambitions—imagine an oil-rich Cuba Iraq, Syria and Lebanon to the Med- lenges. His recogni- Treaty Organization with nukes. Mr. Putin is in bed with iterranean. Mr. Trump visited Saudi tion of Jerusalem as allies need to be Mr. Assad and Iran for lack of a bet- Arabia on his first foreign trip, in Israel’s capital codi- brought on board ter alternative. Recep Tayyip Erdo- May 2017, and has cultivated the fied a truth that lest Iran drive a gan’s Islamist-leaning Turkey can’t new crown prince, Mohammed bin must be accepted wedge between them be trusted to help insulate Russia, Salman, a putative reformer of before Israel and the and the U.S.—which and the U.S. and Europe are under- Wahhabism. Palestinians can could otherwise yield standably hostile to Mr. Putin’s move forward to- even more serious moves in Ukraine and Syria. gether. The Decem- mutually destructive Yet Russia needs American part- His approach to Israel, ber announcement retaliatory trade nership, and it’s clearly in every- Arab allies and Iran makes was brilliantly timed wars than seem one’s interest to collaborate toward

to confirm, validate CHRISTOPHER SERRA likely now with an alternative to Mr. Assad and Iran it look that way. Syria will and stress-test the China, Mexico, Can- for shoring up Syria. The U.S. will pose a major challenge. new regional alliances. is controlled by Hamas, a terrorist ada and Europe. certainly have a better chance of re- All the partners stayed quiet or organization whose charter calls for Then comes the ultimate prize, straining Mr. Putin’s misbehavior at offered pro forma objections, the destruction of Israel. stabilizing Syria by stopping Mr. home and abroad if it seizes the ini- thereby passing the test—except Ordinary Palestinians are desper- Assad’s domestic bloodletting, con- tiative to stabilize the Middle East He has collaborated with the the Palestinians. This was an oppor- ate for the peace that would inte- taining the spread of Sunni extrem- with Russia and Israel. This should United Arab Emirates and Egypt’s tunity for them to express disap- grate them into Israel’s economic ism, and ideally opening the door be high on the agenda for the next Abdel Fattah Al Sisi, another advo- pointment and to resume negotia- miracle, but their illegitimate lead- for Syrian migrants to return home. Trump-Putin meeting. cate for reform of Islam, and re- tions for their own state, with its ership is worsening their people’s The Trump administration is still Successfully dealing with Russia spected the Hashemite Kingdom of capital also in Jerusalem. Instead, misery to curry sympathy from na- behind the curve here. Besides and Middle Eastern and European Jordan, while calling out Qatar for President Mahmoud Abbas cursed ive Westerners. Still, Mr. Trump de- launching airstrikes to punish Mr. allies could produce a long-overdue its support of Hamas in Gaza. While President Trump: “Yekhreb Beitak,”: serves credit for crystallizing the Assad’s grotesque and illegal chemi- realignment of international alli- none of these nations—except Is- “May your house come to ruin.” regional alignment that lays a foun- cal drops on his own people, the ances set in the 20th century’s bipo- rael—exemplify American ideals of Then, as the embassy was moving dation for progress once someone president has talked about pulling lar rivalry of economic systems, to liberty and the rule of law, they last month, Hamas incited border emerges with legitimacy to speak out of Syria “soon,” which would address rogue nations like Iran and share an interest in fighting Isla- riots in Gaza that killed scores of for the Palestinians. widen the vacuum Vladimir Putin’s the decentralized, multipolar threats mist terror and ultimately enlisting Palestinians. Next, the president delivered on Russia is aggressively filling—and of nonstate terrorists afflicting East U.S. support for better governance There’s nobody home right now his promise to withdraw from the for good reason: Syria is the door and West. Given the initial chaos and economic opportunities for to engage in peace negotiations on Iran nuclear deal, the Joint Com- that must be closed to block Isla- around the administration’s other their young populations. behalf of the Palestinians. On the prehensive Plan of Action, a move mist radicalism from reaching Rus- international negotiations, this may The new alliance faces three main West Bank they are led by the affa- that repudiated his predecessor’s sia from the Middle East. be a lot to expect. After decades of challenges: containing Iran’s impe- ble but unreliable Mr. Abbas, who is supposed crowning foreign-policy A serious approach to stopping Middle East failure, though, bold rial ambitions and support for ter- 82 and in the 14th year of his four- achievement, defied Washington’s the spread of Islamist terror, disruption seems exactly what is rorist groups such as Hezbollah; sta- year term, continues to propagate foreign-policy establishment, and which should be the highest prior- necessary. Last century’s “experts” bilizing Syria to finish off Islamic base anti-Semitism. He is routinely frustrated America’s European al- ity in the region for U.S. homeland have had their turn. State and foreclose the next itera- bullied by subordinates—I’ve seen it lies. The JCPOA might have delayed security, necessitates that the U.S. tion of caliphate-seeking terror, privately in person—and is trying to Iran’s nuclear program, but it stay engaged and develop a real Mr. Arbess is CEO of Xerion In- while also ending Bashar Assad’s govern from a hospital bed. He has didn’t even pretend to eliminate it. Syria strategy. This could be a vestments and co-founder of No devastation of Syrian Sunni Arabs; no apparent viable successor. Gaza Withdrawing from the deal could huge accomplishment, with the Labels. The Airport Control Tower Is No Place for Racial Redress

Andrew Brigida is the process for hiring controllers reapply. Mr. Brigida did so but was talking about somebody driving a opted to preserve a policy that in the son of a former and then applied the new policy told that he had failed the BQ and truck. We’re talking about some- practice amounts to thinly disguised New York City po- retroactively. No longer would the was no longer eligible to become an body guiding an aircraft into snow- discrimination in the service of lice officer. When he FAA give hiring preference to appli- air-traffic controller. bound Chicago.” boosting the number of minority was 12, his family cants with degrees from CTI schools “The most shocking thing to me Equally shocking is the revelation air-traffic controllers. moved to a suburb or military experience, as it had in is that nobody in that room when that the Trump administration is The Trump administration didn’t UPWARD of Phoenix, and at the past. In order to foster “diver- this change was decided—not the fighting in court to preserve the respond to my questions about the MOBILITY the urging of a sity” in control towers, the agency secretary of transportation, not the Obama-era policy. Like its predeces- case, but the proper course of ac- neighbor he decided would move away from merit-based sor, this administration is ignoring tion is clear: Settle with Mr. Brigida By Jason L. to become an air- hiring and toward more subjective the fact that thousands of people and the thousands of other emi- Riley traffic controller. In measures. To attract a higher per- The Obama FAA grounded like Mr. Brigida dedicated years of nently qualified plaintiffs. Allow 2013 he graduated centage of candidates from racial qualified candidates in the their lives to getting the proper them to embark on careers as air- with two aviation-related bachelor’s and ethnic minorities, a “biographi- schooling—in some cases incurring traffic controllers. And then reverse degrees from Arizona State Univer- cal questionnaire,” or BQ, was name of justice. Why isn’t significant debt—only to see the the wrongheaded and potentially sity, one of the dozens of schools added to the screening process. Ap- Trump moving to reverse? rules changed in the middle of the dangerous hiring procedures imple- with which the Federal Aviation Ad- plicants were asked about their up- game. Moreover, the changes weren’t mented by an Obama administration ministration has partnerships to vet bringing, family hardship and the to streamline the process or improve obsessed with racial balance. candidates for its air-traffic-control like. Those who didn’t score well safety but rather to achieve what the Mr. Pendley believes that his cli- training program. enough on the BQ were deemed in- head of the FAA—raised his hand government decided (for now) is the ents are victims of blatant racial Graduates of these Collegiate eligible, regardless of how well they and said that we’re talking about “right” racial mix. discrimination and that the FAA’s Training Initiative schools then had performed on tests measuring airline safety here,” said William The Trump administration should current hiring practices won’t with- must pass the Air Traffic Selection cognitive skills. Perry Pendley of the Mountain be returning to a sensible system stand scrutiny by the courts. If you and Training exam, or AT-SAT. This What’s worse, Mr. Brigida and States Legal Foundation, a public- that prioritizes objective measures care more about your plane landing eight-hour test is designed to assess some 2,600 others already on the interest law firm that is represent- of competence. After all, being a safely than about the racial makeup numeric ability, tolerance for high- FAA referral list were notified that ing Mr. Brigida and other plaintiffs controller means making life-or- of folks manning the airport control intensity work, capacity for solving their AT-SAT results would be in a discrimination lawsuit against death decisions on a regular basis. tower, you should hope his lawsuit problems, and so forth. The goal is tossed and that they would need to the federal government. “We’re not Instead, the administration has succeeds. to determine their likelihood of completing the requisite training to become an air-traffic controller. Training a controller is expensive— When RFK Died, John Glenn Faced His Toughest Duty on average it costs more than $400,000—and the CTI system has By Bob Greene were hoping against hope that he proved an accurate predictor of would somehow recover and come who’s got what it takes. hen Robert F. Kennedy, a home to them. Mr. Brigida completed the col- W day after being shot in a Los It was 1:44 a.m. in California lege program, aced the AT-SAT and Angeles hotel kitchen, died when Kennedy was pronounced received a strong recommendation in the early hours of June 6, 1968, his dead. On the East Coast, it was 4:44 from an academic adviser. He was wife, Ethel, was by his side. Most of a.m. The children were asleep. then placed on a list with other their 10 children—she was pregnant Who was going to tell them the prospective controllers, who would with an 11th—were back at the family worst news they could ever hear? be sent to Oklahoma City for the home in McLean, Va., waiting for Their mom couldn’t do it; this mandated 15 weeks of training. their parents to return. wasn’t something to say over a Five years later, Mr. Brigida still is A woman who lived nearby and long-distance telephone line. But if not working as an air-traffic con- who was a friend of the family had they awoke in Virginia and turned troller. What happened is the come to the house to help watch on the television set to watch car-

Obama administration. over them. The children knew their toons, they would be greeted in- RFK, his sons Maxwell and Christopher, and Glenn at Disneyland, June 2, 1968. ROBERT F. KENNEDY FAMILY COLLECTION, JFK LIBRARY In 2013 the Obama FAA changed father had been badly wounded, but stead by coverage of their father’s death. After President Kennedy was assassi- In his memoir, all he wrote was: “It To whom do you turn? Who do nated in 1963, Glenn maintained was one of the hardest things I’ve you ask to take on such a dreadful, friendships with the rest of the fam- ever had to do.” PUBLISHED SINCE 1889 BY DOW JONES & COMPANY heartbreaking duty? Who would ily. He was in California on the night Think of all the excuses you could Rupert Murdoch Robert Thomson have the gentleness and the Robert Kennedy was shot, as were make. Think of all the ways to beg Executive Chairman, News Corp Chief Executive Officer, News Corp strength? many of the children. In the hours af- off such an assignment. But John Gerard Baker William Lewis Editor in Chief Chief Executive Officer and Publisher Ethel Kennedy and Bobby’s terward, some of the older ones went Glenn never begged off anything in brother Ted, who was also at the to their father’s bedside. But Glenn his life. Matthew J. Murray Karen Miller Pensiero DOW JONES MANAGEMENT: Executive Editor Managing Editor Mark Musgrave, Chief People Officer; hospital, knew that there was one and his wife, Annie, had accompanied One recent evening I asked Rob- Edward Roussel, Chief Innovation Officer; Jason Anders, Chief News Editor; Thorold Barker, such person. the younger children back to Virginia ert F. Kennedy Jr. why he thought it Anna Sedgley, Chief Operating Officer Europe; Elena Cherney, Coverage Planning; And so the call from California aboard a plane sent by Vice Presi- was Glenn to whom his family would Andrew Dowell, Asia; Neal Lipschutz, Standards; OPERATING EXECUTIVES: was made, and John Glenn, in the dent Hubert Humphrey, so they turn at that terrible moment 50 Meg Marco, Digital Content Strategy; Ramin Beheshti, Product & Technology; Alex Martin, Writing; Michael W. Miller, Features Kenneth Breen, Commercial; darkness before a June dawn, wouldn’t have to wait for word in the years ago. He said the answer was & Weekend; Shazna Nessa, Visuals; Jason P. Conti, General Counsel; steeled himself to look those chil- Los Angeles hospital. uncomplicated: Rajiv Pant, Technology; Ann Podd, News Frank Filippo, Print Products & Services; dren in the eye and tell them, one at Because of all the well-known “John Glenn had great courage, Production; Matthew Rose, Enterprise; Steve Grycuk, Customer Service; Michael Siconolfi, Investigations; Kristin Heitmann, Chief Commercial Officer; a time, what had to be told. public acts of heroism in Glenn’s both physical and moral. But what Nikki Waller, Live Journalism; Nancy McNeill, Advertising & Corporate Sales; Which is what he did. As the chil- life—his two trips into space, his many people don’t know is what a Stephen Wisnefski, Professional News; Christina Van Tassell, Chief Financial Officer; dren stirred to wakefulness, Glenn valor as a Marine combat pilot in compassionate and tender man he Carla Zanoni, Audience & Analytics Suzi Watford, Chief Marketing Officer; Jonathan Wright, International sat on the edge of their beds and two wars, the 12 times that his was. Paul A. Gigot, Editor of the Editorial Page; DJ Media Group: said there was something he needed fighter planes were hit by enemy “My father had many friends. Daniel Henninger, Deputy Editor, Editorial Page Almar Latour, Publisher to talk with them about. antiaircraft fire—what he did that This was more than that. He consid- WALL STREET JOURNAL MANAGEMENT: Professional Information Business: Joseph B. Vincent, Operations; Christopher Lloyd, Head; They all knew him. When Glenn, Virginia morning didn’t make it into ered John Glenn to be his brother.” Larry L. Hoffman, Production Ingrid Verschuren, Deputy Head as one of the original Mercury astro- most of his obituaries in 2016. And

EDITORIAL AND CORPORATE HEADQUARTERS: nauts, was preparing to become the Glenn himself, not wanting to vio- Mr. Greene’s books include “And 1211 Avenue of the Americas, New York, N.Y., 10036 first American to orbit the Earth, late the privacy of those boys and You Know You Should Be Glad: A Telephone 1-800-DOWJONES he met President John F. Kennedy. girls, chose not to elaborate on it. True Story of Lifelong Friendship.” A18 | Wednesday, June 6, 2018 ** THE WALL STREET JOURNAL. WORLD NEWS U.S., Turkey Reach Deal on Syrian Town

Controls on Manbij are TURKEY aimed at keeping Manbij Kurds in the fight Aleppo Raqqa against Islamic State Deir Ezzour SYRIA

BY MICHAEL R. GORDON LEB. IRAQ Damascus The U.S. and Turkey 100 miles reached a strategically vital accord over a northern Syrian JORDAN 100 km town, U.S. State Department THE WALL STREET JOURNAL. officials said Tuesday, defus- ing a potential military flash- aratists in Turkey. point between the two North U.S. forces will continue to Atlantic Treaty Organization patrol a demarcation line in allies. Manbij, State Department offi- The town, Manbij, has been cials said, who added that the a point of contention between plan calls for the Turkish mili- Turkey and Syrian Kurds, each tary to patrol that line as well. of which has forces with com- Security within the town peting missions in the area. will be maintained by a Manbij For the U.S., the deal eases military council under the fears that Turkish troops will deal. Russian and Syrian gov- enter the town and enables ernment forces are to remain the Syrian Kurdish forces south of the town. Washington has been backing The YPG had long denied to focus on fighting Islamic having a presence in Manbij. State instead of worrying State Department officials said about fresh attacks by Tur- the organization has had a key’s military. limited presence there. For Turkey, the agreement In a statement on Tuesday,

provides assurances that the MARK WILSON/GETTY IMAGES the militia acknowledged it Kurdish forces they oppose U.S. Secretary of State Mike Pompeo, right, and his Turkish counterpart, Mevlut Cavusoglu, agreed on a phased plan for Manbij. had retained a number of so- will withdraw from the town called military advisers at the and move east of the Euphra- ficial, who noted that the un- retary of State Mike Pompeo been at odds over Washing- of a broader umbrella group request of the Manbij Military tes River. The town is adminis- derstanding would be carried and his Turkish counterpart, ton’s decision to arm and train known as the Syrian Demo- Council. tered by local officials who are out in phases. “It will be diffi- Mevlut Cavusoglu, and is in- the Syrian Kurds, known as cratic Forces, are crucial allies The YPG said the reason for acceptable to all sides. cult, but we have a broad tended to address a festering the YPG militia, who have in the fight against Islamic the withdrawal of the advisers “This will be an ongoing framework.” problem that has undermined been battling Islamic State State. But Turkish President was that the Manbij Military process and the implementa- The agreement, which they the U.S. campaign against the militants. Recep Tayyip Erdogan insists Council, after two years of tion will be quite critical,” said called a road map, was Islamic State extremist group. U.S. military officials say the Syrian Kurds are terrorists training, had become self-reli- a senior State Department of- reached Monday between Sec- Turkey and the U.S. have the Syrian Kurds, who are part who are linked to Kurdish sep- ant. U.S. Companies Wind Down Business in Iran Europeans

BY ASA FITCH Note Snags AND IAN TALLEY Doomed Commerce Among listed U.S. firms doing business with Iran through Dozens of major American international subsidiaries, these are some that have drawn in In Saving companies are preparing to the most revenue from the country. pull out of Iran as the Trump administration closes a narrow Iran-linked revenues, 2016 through first quarter 2018 Agreement legal window that has allowed Honeywell $115 million firms to operate there without Senior European officials General Electric* violating U.S. sanctions. 24.8 conceded in a letter to the The companies using the Ecolab 8.4 Trump administration that exemption include big con- Albemarle 6.1 their efforts to save the Ira- glomerates like Honeywell In- nian nuclear accord by main- ternational Inc., Dover Corp. Eaton 4.4 taining major trade and in- and General Electric Co. and *Includes subsidiary Baker Hughes’s $17 million of revenues vestment with Tehran are insurers like Chubb Ltd., many Source: WSJ analysis of SEC filings THE WALL STREET JOURNAL. buckling in the face of planned of which sought to profit from U.S. sanctions. growth in the Iranian energy to wind down their operations valves and spare parts for industry. Some of the compa- or risk penalties—the same Iran’s energy industry, among By William Horobin in nies have already booked mil- ABEDIN TAHERKENAREH/EPA/SHUTTERSTOCK time frame for new bans other contracts, according to Paris and Laurence lions of dollars in revenue Dover sold parts for pumps used in Iran’s energy infrastructure. against other dealings with regulatory filings. Norman in Brussels from their Iranian business, Iran’s economy except for “We are adapting our activ- underscoring the high com- in November. like Israel. Like the other sanc- some specially licensed trade ities in Iran as necessary to European countries have mercial stakes of the Trump President Donald Trump’s tion exemptions the adminis- in medical and food goods. conform with recent changes vowed to keep commerce with administration’s decision to move in May to exit from the tration is revoking, yanking Li- The withdrawal has drawn in U.S. law,” a GE spokes- Iran flowing in order to per- revive economy-crippling nuclear deal spells the end of cense H is designed to isolate a fiery response from Iran, woman told the Journal last suade Tehran to remain in the sanctions against Iran. the Obama administration’s Iran politically, financially and which has vowed to quickly week. accord and restrict its nuclear In all, at least 17 U.S.-listed so-called General License H, economically, U.S. officials say. scale up its nuclear program if Honeywell has booked activity. companies did business with which allowed U.S. companies “These sanctions will fur- European leaders can’t work around $115 million of reve- However, in a letter to Sec- Iran using foreign subsidiaries with foreign subsidiaries to ther cut the Iranian regime off out an agreement to continue nues from Iran through its retary of State Mike Pompeo after the Iran nuclear deal trade, finance, insure and in- the deal without the U.S. non-U. S. subsidiaries since and Treasury Secretary Ste- went into effect in January vest in Iran. The exemption af- Illinois-based Dover, a man- the beginning of 2016, largely ven Mnuchin on Monday, the 2016. Their total Iran-linked forded by the license was part ufacturing conglomerate, said in the past year, according to finance and foreign ministers revenues since then amounted of the carrot-and-stick ap- License H allowed the revocation of License H regulatory filings. Unless Hon- of France, Germany, the U.K. to more than $175 million, ac- proach the administration of U.S. firms with would end its business in Iran. eywell is able to fulfill $100 and European Union said the cording to an analysis of Secu- President Barack Obama used Dover had been selling spare million in current contracts by Trump administration’s plan rities and Exchange Commis- to extract concessions from foreign subsidiaries parts for pumps used in Iran’s early November, it could lose to enforce so-called second- sion filings. Many more Iran, using the promise of eco- to operate in Iran. energy infrastructure and was future potential revenue, given ary sanctions—laws allowing privately held companies may nomic rejuvenation through set to earn more than $16 mil- that the firm indicated in its Washington to penalize for- also have done business in U.S. investment, though only lion in revenue from contracts SEC disclosures that those eign companies for doing Iran through subsidiaries but indirectly through foreign sub- signed there since the begin- contracts aren’t completed. business with third coun- aren’t subject to SEC disclo- sidiaries. from abusing the global finan- ning of 2017, according to reg- U.S.-based Honeywell tries—was undercutting their sure rules. Mr. Trump and his support- cial system,” said Sigal Man- ulatory filings. spokeswoman Victoria Streit- push to preserve Iranian Now some of those compa- ers saw the Iran deal as inade- delker, Treasury’s undersecre- The Wall Street Journal re- feld said the company and its trade. nies are hastening to shut quate because it failed to ad- tary for terrorism and ported last week that GE is non-U.S. subsidiaries “operate The letter amounts to a down their foreign subsidiar- dress Iran’s military presence financial intelligence. pulling back from its foreign within the parameters of all stark admission by European ies’ activity with Iran to avoid in the Middle East and its de- The U.S. Treasury says U.S.- subsidiaries’ work in Iran. The applicable U.S. and interna- officials that there is little the crushing U.S. sanctions ex- velopment of ballistic missiles based firms operating under company had revenue of about tional regulations and will EU can do to ensure busi- pected to begin taking effect capable of reaching U.S. allies that license have until Nov. 5 $24.8 million on sales of continue to do so.” nesses to remain in Iran. Saudi Crown Prince Suppresses Dissent in Bid to Control Change

BY MARGHERITA STANCATI recognizing that right on June concerts. enough.” AND SUMMER SAID 24. Yet the arrest waves attest Saudi government repre- The message behind the to the tension between social sentatives didn’t respond to a Dozens of high-profile Sau- crackdown, which has come freedom and political repres- request to comment Monday dis are locked up in jail, many despite scant evidence of pub- sion in the “new” Saudi Ara- on the recent waves of arrests. of them denounced as traitors. lic dissent, is that the crown bia, which many Saudis see as People familiar with the Hundreds, possibly more, are prince alone intends to dictate a step backward regarding the government’s thinking say the barred from leaving the king- the pace and scope of change limits of what the government country’s leaders wanted to dom. And others have quietly in Saudi Arabia, critics say. tolerates. send the message that no- left their homeland with no “We were hoping for a Of the 17 rights activists body—not even rights activists plans to return, creating the more balanced society, more known to have been rounded broadly aligned with the gov- rudiments of an overseas rights,” says a Saudi rights ac- up last month, nine remain in ernment’s reform agenda—can Saudi dissident community. tivist who has come under jail after having confessed— get away with twisting its arm Saudi Arabia’s de facto government pressure. “Instead according to a statement re- by making their demands pub- ruler, Crown Prince Moham- what has happened is more released Sunday by Saudi Ara- lic. med bin Salman, has gone fur- pression, just with a different bia’s public prosecutor’s office “Mohammed bin Salman is ther than any of his predeces- ideology.” —to crimes that include creating an opposition that he sors to relax the kingdom’s Government supporters see cooperating with and financ- didn’t have—and that he strict social rules. But he is the development differently. ing “hostile elements abroad.” didn’t need,” said Jamal also overseeing one of the “The country is going through Allies of the detainees ex- Khashoggi, a Saudi journalist most ruthless crackdowns on tremendous disruptive change pressed doubt that the prison- and commentator who now perceived dissenters that and it has a wide spectrum of ers would have confessed will- lives in Washington after leav- Saudi Arabia has experienced political opinion—from reli- ingly to what they say are ing the kingdom last summer

in decades. gious conservatives to West- ALBIN LOHR-JONES/PACIFIC PRESS/LIGHTROCKET/GETTYbogus IMAGES charges. amid worries he would be ar- After high-profile autumn ern liberals,” said Ali Shihabi, Mohammed bin Salman is relaxing social rules at his own pace. “The situation in Saudi Ara- rested or banned from travel- roundups of what the govern- who is close to the Saudi gov- bia has never been this bad. ing. “Every time I hear about ment said were dissident cler- ernment and executive direc- need an authoritarian ap- dom’s economy away from oil We were struggling, there an arrest or a friend being ics and corrupt businessmen, tor of the Arabia Foundation, a proach—and that means you and to end the dominance of were risks, but it wasn’t like it travel-banned, I am grateful I the latest wave of arrests, in Washington-based think tank. are going to limit freedoms for religious conservatism. That is now,” said Yahya Assiri, a am here.” May, have focused in part on “If you want to effect a while.” push has entailed making the Saudi opposition activist who Another Saudi writer, first women and men who pushed change, which is long overdue, Since his father, King Sal- country more attractive to for- has been based in London detained by police two years for the right of women to there is no way you can bring man, assumed the throne in eign investors and advocating since 2013. “Now you have to ago, says he still doesn’t know drive, even though the Saudi all those constituencies to- early 2015, Prince Mohammed social reforms such as opening be completely pro-govern- why he is in jail as he hasn’t government is set to begin gether,” he added. “So you has sought to shift the king- cinemas and hosting music ment. Even being silent isn’t seen any charges. TECHNOLOGY: JOANNA STERN ON WHAT SIRI NEEDS B5 BUSINESS&FINANCE

S&P 2748.80 À 0.07% S&P FIN g 0.42% S&P IT À 0.43% DJ TRANS g 0.41% WSJ $ IDX g 0.05% LIBOR 3M 2.319 NIKKEI (Midday) 22591.11 À 0.23% See more at WSJMarkets.com OPEC’s U.K. Weighs In on Bidders for Sky New Worry Government leaves Rupert Murdoch’s Fox, May it was preparing a cash built a 3% stake in Sky—have Comcast wins Sky by sim- way open for Comcast which already owns 39% of bid for the wider collection of bet a bidding war would en- ply outbidding Fox or by win- Sky, launched a $16 billion bid Fox assets that Disney had al- sue if U.K. regulators didn’t ning out over Disney for the Is China’s or Fox to acquire for the remaining shares in ready agreed to buy in its all- get in the way. Sky shares wider collection of Fox assets. British broadcaster 2016, but British regulators stock offer. have been trading well above In the latter scenario, Disney have put it under extensive re- U.K. Culture Secretary Matt both suitors’ bids. On Tuesday, could still end up owning Sky Oil Stores view. Meantime, Mr. Murdoch Hancock said Tuesday the gov- they ended modestly higher at News. BY STU WOO agreed in December to sell ernment had no objections to £13.54, about a pound above Disney ends up with Sky BY BENOIT FAUCON AND BEN DUMMETT major Fox assets, including the Comcast’s bid for Sky. He also Comcast’s bid. and Sky News, if it completes AND SARAH MCFARLANE Sky stake, to Disney for $52 said blocking a Fox-Sky deal ThebattleforSkyisjust its deal with Fox. LONDON—The U.K. govern- billion. was “not my preferred ap- one front in the larger contest If neither Comcast nor Having drained one glut, ment blessed a bid by Com- On the other side is Com- proach” and that he was “opti- between Comcast and Disney Disney consummates a deal OPEC and its allies have found cast Corp. for British broad- cast, which in February mistic” the government could over the wider collection of with Fox, Fox could end up as a new, brimming oil hoard to caster Sky PLC and gave a launched its own bid for Sky, agree to the details of a Fox assets both covet. But it Sky’s 100% owner, though it worry about: China’s crude re- tentative green light to a rival offering $30 billion and rais- spinoff of Sky’s news division, has taken on outsize strategic would have had to shed Sky serves. offer by 21st Century Fox Inc., ing the possibility of a bidding a remedy Fox had proposed to importance, in part because of News along the way. China’s state- and commer- setting up the endgame in a war for the U.K. asset. Com- win approval. all the possible outcomes. Af- It is also possible that cial-owned oil stores will help broader standoff between cast’s offer of £12.50 ($16.64) Investors—including Ameri- ter Tuesday’s decision by the nothing changes in the end, the Organization of the Petro- Comcast and Walt Disney Co. a share compares with Fox’s can hedge fund Elliott Man- U.K. government, here are the and Fox holds on to its current leum Exporting Countries and over Fox assets. £10.75. Comcast then said in agement Corp., which has most likely: PleaseturntopageB2 other major producers determine whether to continue their supply cuts or open the taps wider again, say some of- Apple Moves Onto Facebook’s Turf While Distancing Itself on Privacy ficials from the group. Those cuts sent oil prices surging as inventories fell, and Russia and Saudi Arabia now want to boost production. But some signatories to the 2016 pact to cut supplies say that China’s huge and opaque store of oil needs to be taken into account after being ig- nored for years, according to OPEC officials. Excess Chinese oil could feed into any resurgent glut and push prices down, they worry. The most recent data suggest that U.S. production may be on the rise again. “We used to focus on [in- dustrialized-nations] stocks. But now we are looking at China, too,” said a non-Persian Gulf official at OPEC who declined to be named. OPEC now estimates commercial oil stocks in the Or- ganization for Economic Coop- eration and Development, a group of mainly Western countries, are now 20 million barrels below their five-year average, according to a person familiar with the matter. But Chinese stocks are going in the opposite direction, analysts estimate, as Beijing shores up its reserves as a buffer against oil shocks and domestic refiners scoop up crude to maintain their “use it or lose it” import quotas. China doesn’t release data

JOSH EDELSON/AGENCE FRANCE-PRESSE/GETTY IMAGES on the size of its oil reserves IN YOUR FACE: At its developers conference this week, Apple heralded features for the iPhone that collectively bear the hallmarks of a social-media business. It also in the way that the U.S. and took the occasion to show how it aims to limit the way Facebook and other apps track and collect user data across Apple devices. B4 other countries do. But ana- PleaseturntopageB13

HEARD ON THE STREET | By Aaron Back State Promises Thrift Food Makers Meet With Little Appetite In Selling Its Bonds

BY HEATHER GILLERS tential to lower borrowing costs Food shop- food, consider a classic sta- for Connecticut in the near term pers and in- Bad Taste ple like boxed macaroni and Connecticut is making a new and enforce fiscal discipline fol- vestors look- Share-price and index performance cheese. Kraft Heinz Co. dom- promise to bondholders in ex- lowing a bitter state budget bat- ing at the inated mac and cheese for change for $500 million: self-dis- tle in 2017. The covenants helped 20% packaged food decades. Then came an or- cipline. win enough support to end the aisles of big ganic competitor, Annie’s. The cash-strapped U.S. state stalemate. 10 grocery stores have reached S&P 500 The upstart was in just 20% is preparing to issue new But the restrictions could also the same conclusion: There is of U.S. grocery stores until it debt that requires Connecticut to hamstring the state in the event 0 nothing to buy. was bought by General Mills limit its spending, cap future of a future crisis. The only way The classic consumer food –10 ConAgra Foods Inc. in 2014. Now it is in borrowing and funnel excess rev- to suspend certain covenants is companies—makers of cere- around 80% of stores and enues into a reserve fund. The with a three-fifths vote of the Kellogg als, snacks, soups and condi- –20 sales have doubled, accord- $500 million bond issue priced legislature and a declaration of ments—are no longer the J.M. Smucker ing to General Mills. Tuesday and will be delivered to fiscal emergency from the gover- staples of pantries or portfo- –30 General Mills But both these brands face investors June 20. nor. The current governor, Dan- lios. Shares of some are rising competition from It is a rare step in the world nel Malloy, is scheduled to leave down by one-third or more much-improved store brands, of municipal debt. No other state office in January. –40 Kraft Heinz over the past year as strate- Campbell Soup as well as boutique brands. has attached such fiscal austerity Connecticut’s idea reinforces gies to boost sales fail, and June 2017 ’18 Subscribers to Amazon’s measures to an outstanding the predicament facing many consumers embrace fresh Source: WSJ Market Data Group THE WALL STREET JOURNAL. Prime Pantry service can bond issue, according to analysts U.S. states as they struggle to food and new brands. now order boxes of mac and at S&P Global Ratings. The re- pay for core services like educa- Supermarkets are feeling effectively reach big audi- ability, but it puts added cheese made by Whole strictions will stay in place for tion and infrastructure at a time the same pressure. Last year, ences; rising sales of pre- pressure on the branded Foods’ 365 brand for 99 thenextfiveyears. of soaring costs for debt, retire- unit volume of the packaged pared foods and meal kits packaged-food companies. cents a box, or $1.69 for an The unusual offer has the po- PleaseturntopageB2 products sold in the middle are giving packaged brands Some of these shifts have organic version. That com- aisles fell by 1.7%, according added competition; and a been going on for years, but pares with $1.59 for a plain to research firm Nielsen. The group of aggressive new they have intensified re- box of Kraft or $2.19 for a only places where there was competitors in supermarkets, cently and taken together box of Annie’s on Amazon. INSIDE unit sales growth of grocer- most notably Amazon.com constitute a significant Comparable sales at Kraft ies were in the outer aisles: Inc. but also European dis- threat to food producers and Heinz have shrunk in six of fresh meat, produce, and rupters Aldi and Lidl,are sellers. The next threat is e- the past nine quarters. Gen- bakery, according to Nielsen. pressuring margins across commerce. Sales of dry pack- eral Mills has just attempted That is of little consola- the industry. aged goods are already mov- to repeat its successful An- tion to investors, who can’t ing online. Companies such nie’s deal by spending $8 bil- easily profit from raising o boost margins, re- as Walmart and Amazon are lion for premium pet-food grass-fed beef or growing T tailers including trying to figure out how to brand Blue Buffalo Pet Prod- kale. Comparable sales for 10 Kroger Co. and Wal- deliver fresh groceries profit- ucts. big, publicly traded food mart Inc. are investing more ably. Kroger has teamed up There is hope for pack- companies have been flat or in private-label goods. In the with the leader in online gro- aged-food companies. Deal declined in three of the past year through March, sales of cery delivery, a U.K. company making can work when the four years, according to ana- private-label packaged foods called Ocado. acquired brands fit well into lysts at Credit Suisse. and household items rose In the coming days, Heard the buyer’s capabilities and DIPTENDU DUTTA/AFP/GETTY IMAGES Four broad trends are 4.6%, while sales of branded on the Street will highlight strengths. Even more prom- coming together in the in- goods climbed just 0.6%, ac- strategies that have worked ising, companies like Con- MONTENEGRO TECH DRIVES dustry: Consumers are shift- cording to Nielsen. Analysts and those that have failed agra Brands Inc. have suc- ing toward fresh produce and believe this trend has a long and point out some potential cessfully revitalized some old GAINS CACHET NASDAQ TO meat and away from pack- way to go: In markets like winners and losers. We will brands in frozen foods, which aged foods heavy on carbo- the U.K., private-label pene- expose hidden risks lurking is seeing surprising growth. AS A RESORT ANOTHER HIGH hydrates and sugar; digital tration is more than twice as inside some big companies. Even the pickiest shopper advertising and e-commerce high as in the U.S. This To understand the chal- can find something to like in PROPERTY REPORT, B6 TUESDAY’S MARKETS, B13 are allowing small brands to boosts supermarket profit- lenges and opportunities in the food industry. B2 | Wednesday, June 6, 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 General Electric...... A18 Orbital Insight...... B13 Adyen...... B14 General Mills...... B1 Pacific Investment Journal Names Murray as TopEditor ALDI...... B1 Goldman Sachs GroupB6 Management...... B6 Allergan...... B2 Home Depot...... B14 Panattoni Development Amazon.com Honeywell International ...... B7 BY LUKAS I. ALPERT ...... A10,B1,B7,B13 ...... A18 PayPal Holdings...... B14 Hopu Investment Peugeot...... B7 Appaloosa Management The Wall Street Journal ...... B2 Management...... B5 PotlachDeltic...... B14 Apple...... A10,B4,B13 Huawei Technologies Prologis...... B7 named newsroom veteran Australia & New ...... A10 Q-S Matt Murray as editor in chief, Zealand Banking Group I-J Qatar Airways...... B14 succeeding Gerard Baker, who ...... B12 Iconiq Capital...... B14 Rayonier...... B14 oversaw broad changes to the Azmont Holdings...... B6 Instagram...... B4 Redefine Properties....B6 news organization in his 5½- Bank of America...... B3 Invesco...... B6 Rosneft Oil...... B3 BNP Paribas Securities iZettle...... B14 Royal Dutch Shell...... B3 year tenure as it dealt with a Services...... B6 JetBlue Airways...... B8 Seidler Equity Partners fading print-advertising busi- BP...... B3 JPMorgan Chase ...... B8 ness and the rise of digital Broadridge Financial ...... B3,B6,B12 Senator Investment Solutions...... B12 K-L Group...... B2 journalism. Mr. Baker, 56 years old, will C-D Koch Industries...... A4 Skanska...... B6 CatchMark Timber Trust Kraft Heinz...... B1 Sky...... B1 take on the position of editor ...... B14 Kroger...... B1 SoftBank Group...... B5 at large, which will involve CBRE Group...... B6 Kuehne Nagel Spotify Technology...B14 writing, television presenting Chubb...... A18 International...... B7 Square...... B14 Citigroup...... B6,B12 Lenovo Group...... A10 Sycamore Partners.....B8 and hosting conferences and Coinbase...... B12 Lidl...... B1 T-U events. Mr. Murray, currently Comcast...... B1 M-N Tapestry...... A2 the Journal’s executive editor, Commonwealth Bank of Madison International TCL...... A10 will assume his new role on Australia...... B14 Temasek Holdings....B14 Conagra Brands...... B1 Realty...... B6 Monday. Major League Baseball Tesla...... B8 Credit Suisse Group...B6 Tory Burch...... B14 Mr. Murray, 52, has been at Daimler...... B6 ...... B8 Marsh & McLennan....B6 Total...... B3 the paper for more than two Deloitte...... B6 Twitter...... B13 Deutsche Bank...... B12 Mastercard...... B6 decades, and has previously Meritage Homes...... B14 21st Century Fox...... B1 DHL Worldwide Express served as national editor, dep- MATTHEW RIVA/THE WALL STREET JOURNAL; RALPH ALSWANG/WSJ Uber Technologies....B14 ...... B7 Microsoft...... A10,B13 Umicore...... B6 uty managing editor and dep- Executive editor Matt Murray, left, is succeeding Gerard Baker as the Journal’s editor in chief. DLA Piper...... B6 Monsanto...... B13 Ursa Space Systems B13 uty editor in chief. Dover...... A18 Netflix...... B14 Newell Brands...... B8 E-F V-W “I want to continue to ex- zations and rounds of buyouts recent years. that President Trump’s per- News Corp...... B2 Vantiv...... B14 tend our reach and dominance amid mounting financial pres- Mr. Baker was criticized in- sonal attorney Michael Cohen Elliott Management...B1 Nine West Holdings...B8 Volkswagen...... B7 Etsy...... B14 Novatek...... B3 in the core news areas where sures and changes in how peo- side and outside the news- arranged a $130,000 payment Walmart...... B1,B3 Exxon Mobil...... B3 we have excelled: corporate, ple consume news. Since 2012, room for his oversight of po- to a former adult-film star O-P Walt Disney...... B1 Facebook.A1,A10,B4,B14 Oaktree Capital...... B6 Wells Fargo...... B3 financial and economic news,” the Journal has reduced the litical coverage. Detractors shortly before the 2016 elec- G-H Orascom Development Weyerhaeuser...... B14 Mr. Murray said in an inter- number of editorial staffers said he softened coverage of tion, and the Journal since has General Atlantic...... B14 Holding...... B6 WhatsApp...... A1 view. “We’ve made lots of digi- from about 2,000 to around President Donald Trump, while rigorously reported multiple tal progress in the past 18 1,300, the company said. The others have called the Jour- related stories. months and we have lots more paper has combined several nal’s approach more fair and “There has never been a INDEX TO PEOPLE to do to make the Journal con- print sections to cut costs. impartial than that of its ri- more important time nor a tinue to be the leading news The paper has enjoyed sig- vals. In 2017, leaks of internal greater demand for trusted, outlet in the world.” nificant growth in digital read- communications from Mr. authoritative, objective jour- A-C Kamins, Adam...... A5 Romero, Dan...... B12 Under Mr. Baker’s tenure, ership under Mr. Baker. Since Baker and departures of some nalism,” Mr. Baker, a native of Kilduff, John...... B13 Rostand, Antoine...... B13 Acton, Brian...... A1 the publication’s journalistic he became the top editor, the high-profile journalists added Britain, said. Aresimowicz, Joe...... B2 Kitazawa, Nao...... B12 Ruest, Jean-Jacques.B14 Baker, Akbar Al...... B14 Koch, Charles...... A4 S-T achievements included its first number of digital-only sub- to the controversy. Mr. Murray joined the Jour- Koch, David...... A4 Cook, Tim...... B5 Sandberg, Sheryl...... A1 Pulitzer Prize for news since it scriptions more than doubled Mr. Baker has defended his nal in Pittsburgh in 1994 and Koum, Jan...... A1 Crawford, James...... B13 Saunders, Brent...... B2 was acquired in 2007 by News to 1.49 million as of March coverage approach, saying he quickly rose through the D-H L-M Simons, Doyle...... B14 Corp, for a series about Medi- 2018. Total subscriptions are was directing coverage to be ranks. He is the author of “The Davidson, Erik...... B13 Lombardo, Steve...... A4 Sugrue, Patrick...... A5 care fraud. The publication also 2.41 million. fair and objective during a po- Father and the Son,” detailing Decker, Ted...... B14 Malloy, Dannel...... B1 Sznajder, Mikołaj...... B6 earned a Polk Award for its in- The ad business has litically turbulent period. In his father’s journey to become Dickerman, Ronald...... B6 Maples, Deb...... B14 Tepper, David...... B2 Greeno, Terri...... A5 Murdoch, Rupert...... B1 Thompson, Mike...... B8 vestigation into the blood-test- weighed on the financial posi- February 2017 he held a town- a monk. Hancock, Matt...... B1 Musk, Elon...... B8 V-Z ing company Theranos. tion of news organizations, in- hall meeting with staffers to Mr. Murray holds bachelor’s Hilton, Steven...... B14 P-R Varela, Francisco...... A10 On Mr. Baker’s watch the cluding the Journal, which has address concerns. and master’s degrees in jour- J-K Pouyanné, Patrick...... B3 Zuckerberg, Mark Journal, like many of its rivals, recorded substantial declines The Journal earlier this nalism from Northwestern Jackson, Robert...... B12 Roberts, Brian...... B2 ...... A1,A10,B4 went through several reorgani- in advertising revenue during year was the first to report University.

major U.K. newspapers. News The U.K. Corp also owns The Wall State Street Journal. Fox had said it was willing Weighs In to sell off Sky News, a popular Promises news broadcaster, to gain regulatory approval. The British On Sky government is now essentially Thrift taking Fox up on that offer, Continuedfromthepriorpage before giving the deal a final Continuedfromthepriorpage 39% stake. In that case, Com- green light. ments and health care. cast and Disney would have In April, Disney said it was Pensions, retiree health insur- failed to complete a deal with interested in buying Sky News ance and Medicaid together con- Fox, and Fox would have to add to its portfolio of chan- sume about one out of every five failed to win U.K. regulatory nels, whether or not it pro- tax dollars collected by state and approval to consolidate its Sky ceeds with its acquisition of local governments. Estimates of ownership Fox assets. Disney said in a how much money they still need British regulators have statement Tuesday the com- to pay for all future pension obli- been examining whether pany is “ready to engage in gations vary from $1.6 trillion to Fox’s full ownership of Sky any discussions requested by $4 trillion. In Connecticut, that would give Mr. Murdoch too the [culture minister] with re- shortfall is $34.8 billion, accord- much influence in British spect to our undertakings.” ing to S&P. media. Mr. Murdoch and his The government said it A legislative standoff over

family are major sharehold- would also consider letting how to balance pensions, debt SANGSUK SYLVIA KANG FOR THE WALL STREET JOURNAL ers in both Fox and News Fox sell Sky News to a differ- and other liabilities with day-to- Construction near Stamford, Conn., train station. The state priced $500 million in bonds on Tuesday. Corp, which publishes three ent buyer. In a statement, day operating costs delayed Con- Fox said it welcomed the U.K. necticut’s budget last summer overshot revenue predictions, The limits on borrowing and government’s decision and and froze aid to municipalities. leading to several contentious spending helped win support for Mind the Gap Who Gets Sky? was confident it would reach The mayor of Hartford, the budget fights. But in April, state the budget compromise at the fi- In eight of the past 10 years, Comcast, Disney and 21st an agreement within the state’s capital, warned that he budget officials projected a $1.34 nal hour, said Connecticut House Connecticut spent more Century Fox are all jostling for two-week deadline to win would seek bankruptcy protec- billion income-tax revenue surge Speaker Joe Aresimowicz. than it took in. regulatory approval to buy tion if the city didn’t receive ad- above what was originally ex- Other states are watching U.K. broadcaster Sky. $35 billion the rest of Sky it doesn’t al- ditional aid from the state. pected. About half of the windfall Connecticut to see how its ex- Dec. 9, 2016 ready own. Lawmakers and Mr. Malloy came from one-time payments periment fares and whether bor- 30 Fox makes bid for Fox, Disney and Comcast reached a deal in October that from hedge-fund managers rac- rowing costs drop, analysts and 61% of Sky it 25 doesn't already have each said their move on helped Hartford avoid banking to beat a federal tax deadline government finance officers said. own Sky was based on a desire to ruptcy. It included the new series on some past offshore earnings, Price data late Tuesday showed Offers 20 Owns to buy increase their international of commitments attached to any according to the state budget of- the state paying less to borrow, footprint. bond offering over the next two fice. The numbers also could relative to market rates, than it 15 Operating in seven Euro- years. have been boosted by residents had in March, according to the Expenses pean countries, London- Spending has to be limited to cashing in stock in late 2017 to Connecticut State Treasurer’s Of- Dec. 14, 2017 10 Revenues Walt Disney Co. 39% 61% based Sky is a version of 98% to 100% of revenues de- pay taxes on capital gains to take fice. agrees to buy what some giant U.S. compa- pending on the year and it can’t full advantage of the state and “It’s sort of putting your 5 21st Century Fox nies are trying to become: a grow faster than inflation. The local tax deduction, which the money where your mouth is by 0 assets, including vertically integrated com- state also has to limit new bor- new federal tax law capped. embedding it in the bond docu- 39% Sky stake pany with a telecommunica- rowing to no more than $2 bil- The state used that excess ments,” said Florida bond direc- 2008 ’10 ’12 ’14 ’16 Jan. 23, 2018 tions infrastructure as well lion a year and put excess reve- revenue to fill a $717.5 million tor Ben Watkins, Source: Connecticut comprehensive annual British regulators say as the programming that nues into a reserve fund. budget hole and add $556.4 mil- —Joseph De Avila ﬁnancial statements Fox ownership of all of flows through those wires Connecticut has repeatedly lion to its reserve fund. contributed to this article. THE WALL STREET JOURNAL. Sky isn't in public interest, but leave door and airwaves. open for remedial Sky is a telecom carrier moves that sells TV, internet and phone services, plus a media Funds Press Feb. 27, 2018 Comcast offers company that makes news, to buy all of Sky sports and entertainment For Changes programs. April 3, 2018 Comcast faces a separate Fox says Sky News At Allergan could be carved out from Sky or sold regulatory review from the Eu- to Disney to allay U.K. concerns ropean Union, which is expected to give its decision by BY AISHA AL-MUSLIM June 5, 2018 The U.K. government greenlighted June 15. Comcast's bid for Sky and said it will Comcast Chief Executive Two hedge-fund firms in- wait until it sees the details of Fox's Brian Roberts has said he sees cluding David Tepper’s Appa- plan to divest Sky News before a “clear path” to regulatory loosa LP are calling for Big5banks Synchrony Bank allowing its bid. approval, in part because it changes at Allergan PLC, urg- Source: staff reports currently has a tiny European ing the pharmaceutical com- THE WALL STREET JOURNAL. presence. pany to split its chairman and How do your savings rates stack up? chief executive roles and add Find out at synchronybank.com or call 1-800-753-6870. more focus to its wide-ranging strategic review. Appaloosa and Senator In- SPECIALRATE14-MONTHCD vestment Group LP had previously telegraphed those de- $2,000 sires to Allergan, but are % minimum turning the screws on the opening company by making their de- 2.35 * deposit mands public. APY In a letter Tuesday to Aller- SynchronyBankhasconsistentlyearnedtheBankrateSafe&Sound®5-StarRating!* gan’s board of directors, released publicly, the activists *Annual Percentage Yield (APY) is accurate as of 6/1/18 and subject to change at any time without notice. A minimum call for a split of offices held of $2,000 is required to open a CD and must be deposited in a single transaction. A penalty may be imposed for early by Brent Saunders and the hir- withdrawals. Fees may reduce earnings. After maturity, if you choose to roll over your CD, you will earn the base rate of ing of an outside candidate for interest in effect at that time. Visit synchronybank.com for current rates, terms and account requirements. Offer applies to personal accounts only. one of the roles. They also AWARDS: BankrateSafe&Sound5-StarRatingearnedforQ12014throughQ22017.

JASON ALDEN/BLOOMBERG NEWS want to replace at least two © 2018 Synchrony Bank Some investors have bet a bidding war for Sky is in the cards. additional directors. THE WALL STREET JOURNAL. ** Wednesday, June 6, 2018 | B3 BUSINESS NEWS Wage Suits Win Big Bank Payouts

BY LAUREN WEBER job tasks after they clocked out or failed to pay employees Banks and insurance com- on the occasions they worked panies paid out some of the during rest and meal breaks. largest settlements in the past Workers also file cases alleg- decade in lawsuits alleging in- ing they worked extra hours adequate worker compensa- but were shortchanged over- tion, according to a new re- time pay or were misclassified port Tuesday. as exempt from overtime. Financial-services compa- Walmart Inc. topped the nies occupy half the spots on a list, with $1.12 billion in settle- list of the 12 employers that ments and fines, in part be- paid the most in legal disputes cause of a $352 million settle- over pay for workers since ment in 2008. That payment 2000, said Good Jobs First, an consolidated more than 60 sep- organization that tracks legal arate lawsuits alleging various

violations at large companies. violations, such as failing to KIRILL KUDRYAVTSEV/AGENCE FRANCE-PRESSE/GETTY IMAGES Lawsuits accusing compa- pay for required rest and meal Total Chief Executive Patrick Pouyanné, left, greeted Novatek chief Leonid Mikhelson in St. Petersburg last month at a signing nies of wage discrepancies are breaks. In 2016, the retailer ceremony for a $2.6 billion deal between the energy companies. At rear are France’s Emmanuel Macron and Russia’s Vladimir Putin. often filed by workers who say paid another $242 million to managers expected them to do settle similar claims. Walmart confirmed the settlements to The Wall Street Journal. Oil Giant Total Pursues Risky Bets Settling Up Bank of America spent $73 Large employers accused of million to settle claims in 2013 French energy firm, raise its profile in Iran, agree- Russia. BP owns a 20% stake in from some retail-branch and ing in 2016 to join a $5 billion state-backed PAO Rosneft. Energized shorting their workers' paychecks undaunted by setback have paid billions of dollars in call-center employees who al- project to develop a massive Shell signed a preliminary Total's daily gas output from settlements and fines since 2000. leged that the bank didn’t pay in Iran, doubles down gas field in the country after agreement to explore opportu- Russia has been rising and is Half of the top 12 payers are people for overtime and other on Russia with gas deal the U.S. and five other world nities in Iran and is involved in poised for further growth. financial-services firms. work performed off the powers lifted sanctions in re- building a controversial pipe- clock. JPMorgan Chase &Co. turn for Tehran agreeing to line from Russia to Germany. 7 billion cubic feet per day BY SARAH KENT Settlements and fines, in billions paid $42 million in 2011 to set- curb its nuclear ambitions. But Total, the biggest non- Rest tle an overtime case brought by AND BENOIT FAUCON The risk in Iran became ap- state-owned European oil and 6 Walmart $1.12 of the underwriters and credit ana- parent after the Trump admin- gas producer after Shell and world 5 FedEx 0.50 lysts. Earlier this year, Wells French oil giant Total SA istration reimposed sanctions BP, stands out for aggressively 5.35 Fargo & Co. agreed to has long had an appetite for on the country last month. Mr. chasing politically and legally Bank 4 0.38 pay $27.5 million to thousands politically risky deals. Now, it Pouyanné said his company challenging deals. of America of its California tellers and ser- is tapping resources in Russia would likely have to abandon Total spent $450 million in 3 Wells Fargo 0.21 vice managers who said they and other tricky spots across the Iran deal as a result, but March to acquire assets in weren’t paid for overtime the globe to become one of the that the Russian project would conflict-ridden Libya. JPMorgan 0.16 2 Chase hours and for working during world’s biggest natural-gas help offset the lost opportunity. Last year, the French com- State Farm meal breaks. suppliers. To be sure, Total has also pany started producing from 0.14 1 Insurance In all three cases, the banks Total last month doubled taken steps to balance its risk new projects in the Republic Russia settled the claims without ad- down on Russia by buying a by developing projects in places of Congo and Myanmar, two 1.32 0 AT&T 0.14 mitting wrongdoing. 10% stake in Russian gas pro- such as the North Sea and the other tumultuous spots. 2010 ’17’15 UPS 0.14 Last month, Wells Fargo was ducer PAO Novatek’s $26 bil- U.S. And the company says all Total’s Russia bet comes ordered by a federal judge to lion Arctic liquefied-natural- its dealings are lawful and sanc- with restrictions. The U.S. gov- Source: the company ABM 0.13 pay $97.3 million to mortgage gas project. That company has tions-compliant. ernment has barred Novatek THE WALL STREET JOURNAL. Industries consultants and bankers who ac- been under U.S. sanctions “I am not a politician, I am from taking on long-term U.S. Tenet 0.13 cused the bank of not fully com- since 2014 that were imposed the head of a commercial com- dollar debt under the 2014 liquefied natural gas to grow Healthcare pensating them. That California in response to Russia’s annex- pany,” Mr. Pouyanné said in sanctions, leaving Chinese 5% a year between 2015 and Zurich 0.13 Insurance lawsuit isn’t included in the fig- ation of Crimea. Russia last month. “Our goal is banks to step in to fill the void 2025. By contrast, oil consump- ures from Good Jobs First be- Rising tensions between to build bridges between coun- on another Arctic project Total tion is expected to rise only by Allstate 0.12 cause the bank is appealing both Moscow and several Western tries by developing projects and and Novatek completed last an average 1% annually over the the judgment and the amount of governments didn’t stop Total you know, by the way, we con- year. Total holds a 19% stake next five years, according to the *Zurich Insurance is the parent of State Farm the damages. Wells Fargo’s com- Chief Executive Patrick Pouy- tinue to be bold.” in the Russian company, which International Energy Agency. Note: Data includes only final, nonconfidential settlements and penalties for pensation structure “complies anné from signing the estimated Total isn’t alone in pursuing said it saw no reason for the Since oil prices plummeted companies and their subsidiaries based on with California’s wage and hour $2.6 billion deal in front of Rus- resources in risky countries. restrictions. in 2014, Total has pursued ac- current relationships. laws, including pay for all break sian President Vladimir Putin in Exxon Mobil Corp., Royal Total is now betting espe- quisitions to bolster growth. Sources: Good Jobs First; Walmart periods,” the bank said in a St. Petersburg last month. Dutch Shell PLC and BP PLC cially on gas projects. The com- —Anatoly Kurmanaev THE WALL STREET JOURNAL. statement. Total also made a bold bid to all have significant projects in pany expects global appetite for contributed to this article.

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TECHNOLOGY WSJ.com/Tech Apple Fires Shots Across Facebook’s Bow New iPhone tool aims data across Apple devices. “We’ve all seen these ‘like’ to limit data collection, buttons and ‘share’ buttons,” while other features Apple’s software chief, Craig Federighi, told the audience at are social-media-like its annual developers’ conference in San Jose, Calif., on BY TRIPP MICKLE Monday. “Well it turns out, these can be used to track you, Apple Inc. this week took whether you click on them or more jabs at Facebook Inc. not.Andsothisyear,weare over its privacy practices. But shutting that down.” this time the iPhone maker As Mr. Federighi demon- went one step further, signaling strated the software, a blown- it plans to encroach on the soup image in back of him dis- cial-media company’s turf. played the web-browser As it touted its newest oper- prompt, “Do you want to allow ating software for the mobile ‘facebook.com’ to use cookies devices on Monday, Apple her- and website data while brows- alded features that collectively ing” a website? bear the hallmarks of a social- Apple’s new social features media business. There are reflect how the iPhone maker is forthcoming tools to make it indirectly elbowing into an easier to share photos with arena long dominated by a tech friends, a group video-chat ser- peer. A new tool in Apple’s vice for up to 32 people and Photo app will automatically the capability to play aug- suggest which photos to share mented-reality games among with whom, say, after a dinner

friends. MARCIO JOSE SANCHEZ/ASSOCIATED PRESS with friends. The friends will At the same time, Apple in- Software chief Craig Federighi said Apple will restrict the ‘like’ and ‘share’ buttons that can be used to track users of its devices. then be encouraged to share troduced new privacy tools in the photos back with iPhone its Safari browser that will slows, he said, Apple is clearly stricted the data that outside heat in March when Chief Ex- that aims to distribute adver- users. Mr. Federighi said the limit the personal data that looking to make the device apps can access and has sus- ecutive Tim Cook told MSNBC tising across various apps. Ap- process, which relies on ma- apps like Facebook can collect. more attractive with software pended at least 200 apps it that his company would never ple reaped nearly $1 billion in chine learning, is “private” be- The target was clear: Several features that wed people to it. suspects of having misused be in the same situation as revenue last year by selling cause it uses end-to-end en- images in Apple’s presentation “Facebook should have one eye user data shared on or through Facebook. “We care about the promotional ads for search cryption. or marketing material used open.” Facebook, and it is reviewing user experience, and we’re not terms in its App Store, The “Apple has been nibbling at Facebook or its app Instagram A Facebook spokesman de- thousands more apps. Apple, going to traffic in your per- Wall Street Journal has re- the social angle for a while as examples of what to limit. clined to comment. meanwhile, has seized on the sonal life,” Mr. Cook said. “I ported. and haven’t had a ton of obvi- The combination of social Facebook has been em- privacy scandal by contrasting think it’s an invasion of pri- Apple’s efforts to protect ous progress, but now they media and privacy offerings broiled in a privacy contro- its business, which derives two- vacy.” consumers’ privacy mean its ad have a window because an av- amounted to “shots across the versy for months related to thirds of sales from the iPhone, Facebook Chief Executive business collects far less data enue has been opened around bow” at Facebook, said Daniel how outside developers ob- with Facebook’s ad-based Mark Zuckerberg called those on users than peers, analysts privacy,” said Gene Munster, Ives, head of technology retained and potentially mishan- model that sells marketers de- comments “extremely glib.” say. Now it is seeking to limit managing partner with research for research firm GBH dled user data. In response, tailed profiles of users. Behind Apple’s barbs is an the way Facebook and other search-focused venture-capital Insights. As iPhone growth Facebook has more tightly re- Apple added to the public expanding digital-ad business apps track and collect that firm Loup Ventures.

ADVERTISEMENT Instagram Maps Plans The Marketplace To advertise: 800-366-3975 or WSJ.com/classiﬁeds For Long-Form Videos

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.% $ 0 !.$ $ !" 8 & =* * * % " Under the provisions of the Jobs and Growth Tax Relief Reconciliation Act of Brown Grease Patents Available # %. $ !" . ! B& & $ * 8 & C :??D B& & 2003 (the “Act”), paying agents making payments of interest or principal on $ $ ! 0 $ * 8 & $* & municipal securities may be obligated to withhold a 28% tax from remittance to Brown Grease Processing to 1$ B ! $0 1" &2# $ * & # individuals who have failed to furnish the paying agent with a valid taxpayer Solid Fuel and Soil Additive $ B< ! # %$ $ identification number. Owners of the Bonds who wish to avoid the imposition of the $ 2 #$ # 0 $ USPTO Nos. % # 0 %$ # . tax should submit certified taxpayer identification numbers when presenting the 7,384,562; 7,632,319; 8,241,388 * # ! ! $0 " 4 Bonds for payment. Lv. Message at 704-494-0060 $ # ! " ; The Issuer and Trustee/Agent shall not be responsible for the selection or use of ! #$ * *$ " the CUSIP Numbers selected, nor is any representation made as to their correctness * $ # & ! " ! # indicated in the notice or as printed on any Bond. They are included solely for the . *344& %& #4 " ! $ convenience of the holders. POWERBOAT DEALERSHIP % 4 4 !4 " *&*# * %. " ! North Central FLA. - est 30 yrs ! . FA?A5& & $ Pennsylvania Higher Educational Facilities Authority NETS $250K- ' SBA Pre-approved ! ; By: The Bank of New York Mellon Trust Company, N.A. () $ $140K DOWN INCLUDES as Trustee or Agent Property and Working Capital . # ! ' ' Bondholder Communications: 800-254-2826 RLG Group 352 494-0784 © 2018 Dow Jones & Company, Inc. [email protected] ! "! All Rights Reserved. Dated: May 30, 2018 THE WALL STREET JOURNAL. Wednesday, June 6, 2018 | B5 TECHNOLOGY Siri Still Needs a Great Deal of Assistance

BY JOANNA STERN versations with you and oth- cooking timers or controlling Maps—no options for Google ers), Siri has been stuck say- other music services, Siri Maps or Waze. Siri pro- ing, “Here’s what I found on still can’t do those things. iOS 12’s new Shortcuts cesses 10 bil- the Web for that.” While Apple improved app is an attempt to allow lion requests The problem crystallized voice recognition on the Siri to climb Apple’s fence. a month, Ap- with the HomePod: Apple’s HomePod and Apple Watch, The app lets you create your ple said at its Siri-powered smart speaker Siri still has a harder time own custom “Hey, Siri” software de- just isn’t particularly smart. understanding me than Alexa phrase that will pull specific velopers conference Monday. At Apple’s biggest software or Google do. I don’t repeat information from apps—even The company didn’t reveal event of the year Monday, myself with those others a series of apps. the breakdown, but I’m fairly just four months after Home- nearly as much as I have to confident in my math here: Pod’s release, the speaker with Siri. f course, for that to Five billion requests to was mentioned only once. Now, Siri is responsible O happen, the develop- set an alarm; Apple does have some for even more nonvoice ers of all those apps Three billion requests new ideas about what Siri skills. In iOS 12, when the have to do back-end work to for the same thing, because should do for us when iOS 12 phone suggests turning off make their apps Siri-control- Siri didn’t understand it the is launched for iPhones and certain notifications you lable. And then I’d have to first time; iPads in the fall: We’ll be don’t use, Apple says it’s Siri customize the shortcut in

Two billion not-actual- able to program strings of KENNETH BACHOR/THE WALLmaking STREET JOURNAL that decision. And the app. It’s a lot to ask of requests, triggered by some- tasks. A single custom Coming updates don’t address all the virtual assistant’s problems. it’s allegedly Siri who will users. body saying, “Seriously.” phrase will, say, shut off the suggest calling your col- In a year of significant Sure, the formerly cut- lights, turn down the ther- Google’s and Amazon’s. about speaking to gadgets is league if you’re running late user-privacy violations and ting-edge virtual assistant mostat and launch a podcast. Apple addresses this that with a few words I can for a meeting. Attributing too many reasons to distrust has become the butt of many somewhat in iOS 12 by ex- accomplish things that oth- these features to Siri is many of the tech giants, Ap- a tech joke, but Apple’s Siri ut it feels like a mar- panding Siri’s knowledge erwise take many taps and clever, but it also feels like a ple Chief Executive Tim problem is only getting big- B keting fake-out. The about celebrities, food and, swipes. Siri is good at cer- marketing dodge. Cook’s message at Monday’s ger. As Amazon and Google updates don’t address uh, motor sports. Apple had tain basics, such as setting Using Siri outside Apple’s keynote was meaningful and develop artificial-intelligence the personal assistant’s big- no immediate comment; in an alarm or firing off a quick walled garden has become believable. “The customer is assistants that can do tasks gest shortcomings. the past, it has said it is im- text. But while Alexa and one of the biggest frustra- at the center of everything small (set multiple cooking Siri’s general knowledge proving Siri all the time. Google Assistant don’t break tions. Ask Siri for directions we do,” he said. Too bad Siri timers) and large (hold con- repository often lags behind One of the things I love a sweat setting multiple and it will launch Apple is still way out in left field. SoftBank Lets Chinese Investors in on Chip Designer

BY MAYUMI NEGISHI chip-design technology, which cluding Intel Corp. and Qual- it licenses to semiconductor comm Inc. In response, China TOKYO—SoftBank Group makers, is in nearly all smart- has been accelerating develop- Corp. agreed to sell a majority phones sold globally. ment of its own chip industry. stake in the China operations The China deal, which fol- “China wants to have an in- of U.K. chip designer Arm lows more than a year of ne- digenous and controllable lo- Holdings to a China-led group gotiations, comes amid sim- cal supply base,” Arm Hold- of investors, aligning itself mering tensions between the ings Executive Vice President with Beijing’s goal of reducing U.S. and China over semicon- Rene Haas said in an inter- its dependence on Western ductor technology. Operations view. “Doing a joint venture of technology. at ZTE Corp., whose smart- this nature would best posi- SoftBank said Tuesday it phones incorporate Arm’s tion us to be able to capitalize would cede 51% of the Chinese technology, have been largely on that growth.” business for $775 million, shut down after U.S. govern- China accounted for roughly while retaining the remainder. ment penalties blocked the one-fifth of Arm Holdings’ The buyers are led by Hopu Chinese telecommunications $1.83 billion in revenue for its Investment Management Co., company from buying Ameri- latest fiscal year, with local which is backed by sovereign- can chips and software. sales expected to grow further wealth fund China Investment China was the world’s larg- under China’s “Made in China Corp. and Beijing-owned Silk est semiconductor market last 2025” strategy to develop self- Road Fund. year, worth $132 billion, ac- driving vehicles, smart appli- SoftBank, a leading technol- cording to the World Semicon- ances and other next-genera- ogy investor that controls ductor Trade Statistics, and tion technology. Arm Holdings Sprint Corp. in the U.S., paid the lion’s share of sales went has the right to technology de-

$32 billion in 2016 to acquire to chip makers in South Korea, veloped by the Chinese joint RODRIGO REYES MARIN/AFLO/ZUMA PRESS Arm Holdings. The U.K. firm’s Japan, Taiwan and the U.S., in- venture, Mr. Haas said. SoftBank is led by Masayoshi Son, rear, who engineered the acquisition of Arm Holdings in 2016.

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© 2018 Sprint. All rights reserved. Sprint Business and Sprint logo are trademarks of Sprint. B6 | Wednesday, June 6, 2018 THE WALL STREET JOURNAL. INTERNATIONAL PROPERTY REPORT Central & Eastern Europe PORTO MONTENEGRO An investment group turned a rundown naval site into a development named Porto Montenegro, which includes a marina for superyachts in addition to a luxury village with shops, restaurants and a hotel. Montenegro Policies Stoke Resort Business BY ISOBEL LEE dozens of hotels that have and banking-family scions Na- of Porto Montenegro. peryachts this summer. tor’s listing last year, citing opened since 2006 in Montene- thaniel and Jacob Rothschild. The growth of Montenegro’s Other countries that were damage by real-estate construc- Just 12 years after declaring gro as part of government plans The group turned the devel- resort industry is a case study part of the former Yugoslavia tion, uncontrolled tourism and its independence, Montenegro to increase hotel beds in coastal opment named Porto Monte- in how governments can stoke have tried to cash in on their docking of large cruise ships. is gaining traction in its ambi- areas—where the vast majority negro into a marina for su- foreign investment with busi- natural charms, but budget- Montenegro’s tourism reve- tious goal of becoming one of of tourism takes place—some peryachts and a luxury village, ness-friendly policies. Monte- friendly beach destina- nue was €846.4 million last the dominant players in the 194% to 100,000 by 2020. Sev- complete with shops, restau- negro, a candidate to join the tion Croatia, for example, year, or around 22% of gross Balkans luxury-resort business. eral major resorts are under rants, an international board- European Union, has adopted has lacked Montenegro’s laser domestic product, according The tiny country’s first ce- construction and partly opera- ing school and a five-star hotel the euro as its sole legal ten- focus on elite tourism and the to the World Travel and Tour- lebrity-endorsed golf course— tive, with another half dozen on managed by Taiwanese com- der, facilitating investments yachting community. “That’s ism Council. It is expected to designed by Gary Player—is the drawing board. pany Regent. The entire resort and helping to control inflation where it’s believed Montenegro exceed €900 million this year, scheduled to launch next Foreign investors who was acquired in 2016 by the in recent years. Its foreign- can surpass Croatia in terms of making it one of Europe’s fast- month as part of Luštica Bay, showed up early are cashing Investment Corporation of trade law offers significant tax the quality of its accommoda- est-growing destinations. Montenegro’s biggest resort in. In 2007, for example, an in- Dubai, the principal invest- exemptions to overseas inves- tion and tourism infrastruc- Only 43% of hotel rooms development. That same day, vestment group including Pe- ment arm of the Dubai govern- tors that open local companies. ture, as well as the traveler ex- were occupied on average in Luštica Bay’s developer, Egyp- ter Munk, the Canadian ment, for an undisclosed sum. “The government of Monte- perience,” said Joe Stather, 2017, according to CBRE data, tian firm Orascom Develop- founder of mining company Porto Montenegro’s 290 negro has made developers and associate director at CBRE. although occupancy rates have ment Holding, is planning to Barrick Gold Corp., paid $26 apartments have sold out. investors feel appreciated,” Some critics, including climbed from 29.3% in 2007. open the resort’s first five-star million for a 99-year lease on “Prices have risen from said Ahmet Erentok, chairman United Nations culture and her- Revenue per average room hotel, the Chedi Luštica Bay, a rundown, government- around €4,000 per square of Azmont Holdings, which is itage organization Unesco, have was also unimpressive last with prices for its 111 rooms owned naval site on the Bay of meter to around €7,500 per developing Portonovi, an €830 warned that excessive develop- year at $36.70, after creeping and suites starting at €400 Kotor. Other members of the square meter over the period million resort that started de- ment could spoil the natural up from a low of $24.93 in (around $468) a night. group included Russian metals of the development,” said livering its first apartments beauty drawing tourists. The 2010. High-end resorts com- The projects will join the tycoon Oleg Deripaska John Stephens, sales manager last year and will welcome su- agency threatened to strip Ko- mand triple figures. Foreigners Swoop In For Commercial Deals

BY SHEFALI ANAND price. The healthy deal activity Foreign investors are underscores the region’s allure scooping up commercial prop- to investors. The economy in erty in Central and Eastern Poland, which attracts a lion’s Europe despite the rise of na- share of foreign investment, is tionalist governments in the expected to expand by 4.1% region, highlighting the appeal this year, compared with 2.3% of investing in economies that for Western Europe, according are among the fastest expand- to the International Monetary ing in Europe. Fund. International investors pur- “There’s no question that chased €12 billion ($14 billion) there is some uncertainty and of commercial real estate in the turbulence over the very con- region in 2017, according to servative government that has data firm Real Capital Analyt- been elected and some of the ics Inc. This was the highest propaganda and policies that level of cross-border investment they are talking about,” said into the region in a decade. Ronald Dickerman, founder An additional €3 billion has and president of Madison In- been invested by international ternational. “It was a major investors this year as of May consideration and risk factor 30, Real Capital said. These when we made our invest- figures include countries such ment, but we thought the op- as Poland, Hungary, Czech Re- portunity far outweighed the public and Romania, but ex- risks.” clude Russia. The rise in nationalism in Foreign investors include parts of Central and Eastern

JAAP ARRIENS/NURPHOTO/GETTY IMAGES funds managed by U.S. invest- Europe are rooted partly in Developers have targeted the Wola area to build office space as Warsaw’s central business district has become more congested. ment managers Invesco Ltd. rising anti-immigrant senti- and Oaktree Capital Manage- ment but have broadened into ment LP, and South African other policies. Poland’s Law Warsaw Proves a Lure for Big Firms real-estate investment trust and Justice party, which came Redefine Properties Ltd. to power in 2015, faces inter- Recent big deals include the national criticism that it is BY SHEFALI ANAND ing from international compa- hours by flight” from London, vious five years. purchase of a 28-property re- trying to control the country’s nies for information-technol- he said. Most of the new construc- tail portfolio for more than $1 judiciary and media, among A new business center is ogy, back-office Warsaw also comes up as a tion is centered within a 1- billion by an entity backed by other institutions. blooming in Warsaw’s Wola and other operations for favorable alternative to attract square-mile area around U.S. investment managers Pa- In Hungary. Prime Minister district, an area best known global clients. specialized staff from other Rondo Daszyńskiego, a round- cific Investment Manage- Viktor Orbán, who was re- until now for the site of a Poland has long been a fa- countries. “Companies are about where a new metro line ment Co. and Oaktree Capi- elected for a third term in massacre during the city’s up- vorite for these operations, moving their employees from opened recently, providing tal. In April, a fund managed April, has implemented poli- rising in World War II. thanks to its relatively lower London, Frankfurt, Madrid and more commuter access. More by Madison International Re- cies and taxes that some say Major multinational firms labor costs compared with they are offering them a much residential buildings are also alty LLC, a New York-based target independent media JPMorgan Chase &Co.,Citi- Western Europe, availability of higher quality of life,” Mr. being built in Wola, providing real-estate investment man- companies or industries domi- group Inc., Goldman Sachs skilled talent and membership Rudzki said. an option for office workers to ager with $3.6 billion in as- nated by foreign firms. Group Inc., and Credit Suisse in the European Union. Until Developers have targeted live close by. sets, bought a 50% stake in The region has enjoyed Group AG have leased big recently, most of the large Wola in recent years to build Both domestic and foreign Warsaw Spire, an office tower strong growth most years blocks of office space in the shared services operations modern office space as War- developers are cashing in on in that city, for an undisclosed since it emerged from domina- former manufacturing district were set up mainly in small saw’s central business district the new demand. Skanska has tion by the former Soviet in recent years. Other tenants Polish cities, such as Kraków has become more congested two large projects under con- Union at the end of the 1980s. include professional services and Wrocław, which are even and demand for office space struction in Wola—the Gener- Ramping Up Many of the countries are in firms Deloitte, Marsh & cheaper. has increased. ation Park complex and Spark Foreign investment into Central the European Union, although McLennan Cos., payments “Recently, Warsaw has be- Historically a manufactur- buildings—with more than 1.6 and Eastern European real estate some countries, including Po- firm Mastercard Inc. and come a very strong player in ing hub, Wola in the Warsaw million square feet of office land and Hungary, haven’t ad- France’s BNP Paribas Securi- this,” said Arkadiusz Rudzki, Uprising of 1944 was the site space. €16 billion opted the euro. ties Services. managing director of the Po- of a massacre of more than Last year, one of the build- 14 Economic growth has been In the next three years, land office unit of Skanska 40,000 Poles by German ings in the Generation Park fueled in the region by the 12 about 4.5 million square feet AB, a Sweden-based construc- troops. complex was completed and presence of global businesses of new office space will be de- tion company. After the war, the area Citigroup’s Citi Service Center 10 attracted by its skilled talent livered in this area, roughly One reason for Warsaw’s slowly returned to its manu- Poland moved in to occupy 8 available at lower wages com- half of total new supply com- recent popularity, said Mr. facturing roots. In the late about 200,000 square pared with Western Europe. ing up in Warsaw, according to Rudzki, is that banks and fi- 1990s, some developers feet—54,000 square feet more 6 Last year, Daimler AG CBRE Group Inc., a real-estate nancial companies are looking started buying land in Wola to than Citigroup had planned to 4 started construction of a plant services firm. “The expansion for alternatives to diversify build homes. lease a few months earlier. in southwest Poland that will 2 of the city center might in the their operations away from Later the area was discov- Other Skanska tenants in- make engines for its Mer- future lead to treating [this] London, following the U.K.’s ered by office developers. In clude a unit of Credit Suisse 0 cedes-Benz cars. On Friday, region as the center of War- vote to leave the European the five years ended in 2017, Group and multinational law 2007 ’10 ’15 ’17 Umicore SA, a $14 billion ma- saw,” said Mikołaj Sznajder, a Union. “They’re saying, where about 2.4 million square feet firm DLA Piper. Skanska said terials firm, said it would set director at CBRE in Poland. can we move where the opera- of office space was delivered rentsinitsofficeshavegone Note: Excludes Russia; €12.3 billion=$14.4 billion up a plant in Poland to make The building frenzy reflects tion is still within this time in Wola, more than twice the up by 10% to 15% in the past Source: Real Capital Analytics cathode materials for the Eu- high demand for offices com- zone and within three amount developed in the pre- five years. THE WALL STREET JOURNAL. ropean auto market. THE WALL STREET JOURNAL. Wednesday, June 6, 2018 | B7

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Logistics Booms in Region MISSOURI FLORIDA

BY ISOBEL LEE Central and Eastern Eu- rope’s industrial real-estate ""$%"&' ( market is booming thanks to %)*+' the region’s geography and ##$ %& & '& () * + cheap labor along with the benefits of Europe’s unified currency and lack of trade restrictions. Developers are adding new warehouses and distribution !" facilities at a record pace. The facilities can be built and operated at low cost in countries like Poland or the Czech Re- ! "# public and still serve affluent markets of high-cost countries such as Germany, Switzerland and France. P3 LOGISTICS PARKS Rents for modern industrial Poland has become a popular destination for new warehouses. ! "# ! # !$ %# space in Poznań, Poland, are about €3.50 ($4.09) a tries, which have stayed flat of regional economies and cur- square meter compared with for over a decade. rencies. These arguments have MULTI STATE OFFERINGS COLORADO €5 a square meter in Berlin, “Six to 12 months ago, we takenonnewurgencyascon- 170 miles to the west, accord- were seeing rents below €2 cerns about Italy’s commitment ing to JLL data. per square meter per month in to the euro and the European This disparity has attracted Poland,” said Ben Bannatyne, Community have shaken global some of the world’s largest re- president of Prologis Europe. financial markets. tailers. Amazon.com Inc. op- “In terms of our global portfo- Proponents of the euro erates five high-tech fulfill- lio, that’s the lowest we’ve point out that Slovakia’s adop- ment centers along Poland’s seen anywhere in the world.” tion of the currency in 2009 border with Germany and it Still, the vacancy rate has led to the arrival of European plans further expansion. automotive giants such as Domestic and foreign inves- Volkswagen AG and Peugeot tors also have paid attention SA, as well as several South to the trend. About 3.7 million Facilities can be built Korean car-tech manufacturers. square meters of new space and operated at low “Slovakia now produces was added in Central and more cars per capita than any Eastern Europe in 2017, a 68% cost and still serve other country in the increase from 2016 and 55% affluent markets. world,” said Ian Worboys, CEO FLORIDA FLORIDA more than the previous record of P3 Logistics Parks, a pan- set in 2007, according to bro- European industrial specialist. ker Cushman & Wakefield Inc. The presence of those compa- “This is the right place for stayed low in the region de- nies helped to drive demand

us to be,” said Robert Dobrzy- spite the new construction. for the big industrial spaces. cki, chief executive of Europe Occupancy hit a record of In the current recovery, for Newport, Calif.-based Pana- 95.1% at the end of last year. growth in the industrial sector ! "" !#$!% & " '# ttoni Development Co., which Industrial real-estate values has been fueled by Europe’s ( $% ' $ built about 38% of the new continue to rise, with total love affair with e-commerce, $! ! #$!% )( " & ! ## *' " supply in Central and Eastern deals in the region reaching which has driven the expan- ! " # $$%&'! ( ')* + , *- .. Europe last year. Other players €2.2 billion in 2017. sion of logistics and courier / 01 2* .&&$%$! 0 1 3 ) 4 5 $ 6 4 75$! ) 4 84 )9 8 :%$: 3- ; #< "** $= 0)1 ; #< "** $= *- 3>; NEW JERSEY include Prologis Inc. and P3 The sector now represents operators, such as DHL #< "** %= 3 /; #< "** = 9 8; #< "** = Logistics Parks. 20% of the region’s commer- Worldwide Express and Kue- Not surprisingly, the mush- cial real-estate market, com- hne + Nagel, Mr. Dobrzycki rooming supply has stoked pared with around 4% just a said. “Investors which histori- NOTABLE COMMERCIAL % ! concerns of a glut in the mar- decade ago. cally invested in retail are us- PROPERTIES +( ket. Developers and investors At the same time, analysts ing logistics to hedge against (800) 366-3975 & * [email protected] have expressed frustration are pointing to the industrial the loss of momentum on the For more information: wsj.com/classifieds ! % " ## "$ about rents in most Central market in Central and Eastern retail side,” Mr. Dobrzycki &'( " © 2018 Dow Jones & Company, Inc. and Eastern European coun- Europe as an argument in favor said. All Rights Reserved. !'") ## !##$

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- ,. # $ $ * , !"" () ( %& & ' + )+) ( !!!! (" ()"" %& !! " # $ " /0 1 / & 1 / 23 $ 23 /0 !)! )!!!+ + )!!(++ ! )+++ + (+(( )( !++++ +! )(!"+++

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! " # ! $ % & ! ' $& ( ) % ! ' " % ! * + % & ! * + & % &,, ! ,, ! - .& ! /& 0,,&% ! ! , % , For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

B8 | Wednesday, June 6, 2018 ** THE WALL STREET JOURNAL. BUSINESS WATCH

JETBLUE AIRWAYS changing hands in a $395 million TESLA deal that adds the professional Rules for Animals league as a key investor. Musk Is Optimistic Restricted Further Under the terms of the deal On Model 3 Output announced Tuesday, consumer- JetBlue Airways Corp. is the goods conglomerate Newell Tesla Inc. will “quite likely” latest airline to tighten rules for Brands Inc. is selling the St. meet its goal of making 5,000 passengers flying with emo- Louis sporting-goods maker to Model 3 cars in a single week by tional-support animals. Seidler Equity Partners, a Cali- the end of the month, Chief Ex- Beginning July 1, only dogs, fornia-based private investment ecutive Elon Musk told investors cats and miniature horses will be firm, and MLB. Tuesday. qualified to fly as emotional-sup- “This is a really power-house The Silicon Valley electric-car port animals under JetBlue’s new combination,” said Mike Thomp- maker has demonstrated the rules, and passengers will have son, executive vice president of ability to make 500 Model 3s a to notify the airline of their plans marketing for Rawlings. day, or 3,500 a week, already, he at least 48 hours in advance. The deal gives MLB a chance said. The company is pushing to In addition to a form from a to provide “even more input and meet the critical 5,000-a-week medical professional, JetBlue will direction on the production” of rate after twice delaying the require passengers to certify the the league’s official ball, said deadline. that their animal will behave and Chris Marinak, MLB’s executive “This was, I have to tell you, provide documentation from a vice president for strategy, tech- the most excruciating, hellish veterinarian that the animal is nology and innovation. several months I’ve maybe ever fit to fly. The rules are similar to For Newell, which gained had,” Mr. Musk said at Tesla’s requirements by other carriers Rawlings as part of its acquisi- annual shareholder meeting near and are consistent with guide- tion of Jarden Corp. in 2016, the the company’s Palo Alto, Calif.,

lines from the Transportation move is part of a plan to trim SCOTT EELLS/BLOOMBERGheadquarters. NEWS “But I think we’re Department. its operations after years of A Rawlings display in New York. Owner Newell is selling as part of an effort to trim its operations. getting there.” —Alison Sider bulking them up. Meeting the goal of 5,000 —Maria Armental tions related to a private-equity vate-equity backer, Sycamore ther discuss the investigation. Model 3s a week by the end of NEWELL BRANDS firm’s leveraged buyout of the Partners, court papers show. Sycamore Partners said it June is crucial to generating NINE WEST HOLDINGS company—under the microscope. Nine West sought chapter 11 would cooperate with the credi- enough cash to sustain opera- MLB Makes Play for The committee representing protection in April as it grappled tors’ investigation, but it noted tions without having to raise Ball Maker Rawlings Creditors Seek the retailer’s unsecured creditors with a $1.5 billion debt load, the debt markets’ enthusiasm to more capital. Tesla has faced in- Scrutiny of Debt believes there could be “a number much of which was left over take part in the Nine West lev- creasing financial pressure after Rawlings, a more-than-cen- of potential estate claims” stem- from the 2014 buyout. eraged buyout, which “oversub- struggling to ramp up production tury-old company that produces Nine West Holdings Inc.’s ming from the 2014 leveraged Nine West said in court pa- scribed for a total of $345 mil- of the Model 3 that began as- the official ball and helmet of creditors want to put the shoe buyout and other transactions pers it has plans to meet with lion of term loans.” sembly last July. Major League Baseball, will be retailer’s debt deals—transac- between the company and its pri- the creditors on Tuesday to fur- —Lillian Rizzo —Tim Higgins

Data provided by Net YTD Net YTD Net YTD Net YTD Net YTD Net YTD Net YTD Mutual Funds Fund NAV Chg %Ret Fund NAV Chg %Ret Fund NAV Chg %Ret Fund NAV Chg %Ret Fund NAV Chg %Ret Fund NAV Chg %Ret Fund NAV Chg %Ret ExtMktIdxPrem r 66.45 +0.30 7.2 SrsIntlVal 10.46 -0.03 -2.2 CorePlusBd 8.05 +0.01 -1.6 IncomeFd 12.00 ... -1.0 IntlEqIdxInst 20.14 -0.05 -0.1 TotIntlAdmIdx r 30.34 -0.06 -0.3 WellsI 26.19 ... -2.2 Top 250 mutual-funds listings for Nasdaq-published share classes by net assets. IntlIdxPrem r 43.01 -0.07 -0.3 TotalBond 10.35 +0.01 -1.6 Lazard Instl Price Funds Tweedy Browne Fds TotStAdml 69.30 +0.10 4.3 Welltn 41.64 -0.01 -0.4 14.81 +0.01 3.7 18.69 -0.19 -6.6 29.01 -0.12 1.8 37.90 ... 0.2 -Ex-distribution. -Previous day’s quotation. -Footnotes x and s apply. -Footnotes e SAIUSLgCpIndxFd First Eagle Funds EmgMktEq BlChip 110.14 +0.42 14.4 GblValue TxMIn r 14.34 -0.03 -0.1 WndsrII e f g j 79.36 +0.11 4.3 and s apply. -Recalculated by Lipper, using updated data. -Distribution costs apply, TMktIdxF r GlbA 59.22 -0.01 0.3 Lord Abbett A EqInc 33.05 ... -0.5 VANGUARD ADMIRAL ValAdml 41.14 -0.02 -0.1 VANGUARD INDEX FDS k p 79.36 +0.12 4.3 4.19 ... 0.2 254.70 +0.20 3.7 254.65 +0.19 3.6 12b-1. -Redemption charge may apply. -Stock split or dividend. -Footnotes p and r TMktIdxPrem FPA Funds ShtDurIncmA p EqIndex 74.00 +0.06 3.6 500Adml WdsrllAdml 67.26 ... 0.2 500 r s t 11.23 +0.01 -2.0 35.18 +0.05 1.8 223.58 +1.03 7.2 apply. -Footnotes x and e apply. -Ex-dividend. -Footnote x, e and s apply. -Not USBdIdxInstPrem FPACres 34.78 -0.05 0.3 Lord Abbett F Growth 69.66 +0.24 11.2 BalAdml WellsIAdml 63.44 ... -2.2 ExtndIstPl v x z NA 4.19 +0.01 0.2 11.62 ... -0.2 59.25 +0.24 4.4 available due to incomplete price, performance or cost data. -Not released by Lipper; Fidelity Advisor I FrankTemp/Frank Adv ShtDurIncm HelSci 75.69 +0.18 7.6 CAITAdml WelltnAdml 71.91 -0.02 -0.3 SmValAdml NE 34.07 +0.09 8.7 165.14 +0.13 7.5 10.39 +0.02 -2.0 data under review. -Fund not tracked. -Fund didn’t exist at start of period. NwInsghtI IncomeAdv 2.29 ... -0.3 Metropolitan West InstlCapG 41.98 +0.16 13.7 CapOpAdml r WndsrAdml 79.88 +0.03 1.1 TotBd2 NN NS NA ... NA 37.71 -0.14 -1.0 18.13 -0.05 -0.4 Fidelity Freedom FrankTemp/Franklin A TotRetBd IntlStk 18.72 -0.02 0.3 EMAdmr VANGUARD FDS TotIntl 16.35 +0.02 1.1 NA ... NA 77.29 -0.09 -0.3 69.27 +0.10 4.2 FF2020 CA TF A p 7.30 ... -0.8 TotRetBdI IntlValEq 14.72 -0.08 -2.6 EqIncAdml DivdGro 26.93 -0.06 2.6 TotSt 14.26 +0.01 1.3 NA ... 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! # , & 7 8 8 (0)/ 7 ! ! " # # $% & '() * +! $% , - ./0(1'' * 9 - 3 0 +! (''% , - .(0''''' -'' : 1-''! 2 - 3 / 4 (5 - 3 ( ('-'' 6 ( -'' 6 /-5' : -''! B12 | Wednesday, June 6, 2018 ** THE WALL STREET JOURNAL. BANKING & FINANCE Australia Charges 3 Banks ANZ and underwriters ANZ and each of the indi- tions, and on Tuesday said it outstanding shares in the viduals named are alleged to wouldn’t comment further as placement, amounting to less Deutsche Bank and have been knowingly involved thematterisnowbeforethe than 1% of the total, Citi said. Citigroup acted as a in some or all of the conduct, court. The case is listed to be It noted that ANZ shares are according to the Australian heard by a Sydney court on bought and sold freely by cartel, regulator says Competition and Consumer July 3. thousands of investors every Commission, which has been Investigations by the regu- day, including during the pe- BY ROBB M. STEWART investigating the matter for lator more commonly lead to riod in question. more than two years. civil action rather than crimi- Last week, ANZ said it be- MELBOURNE, Australia— Each of the banks disputes nal charges, which are usually lieves it acted within the law, Australia’s antitrust regulator the allegations and said they harder to prove. and is cooperating with an in- took the unusual step of crimi- plan to defend themselves and Companies regularly put vestigation by the corporate nally charging one of the their employees. together syndicates to under- regulator into whether it country’s biggest banks and In 2015, ANZ surprised in- write large capital raisings, should have said in an August two underwriters of a 2015 vestors with plans to raise 3 and Citi said the practice 2015 statement that the un- fundraising round for the billion Australian dollars hasn’t previously been con- derwriters had bought about bank. It alleges cartel conduct. (US$2.29 billion) to meet reg- sidered by an Australian 0.9% of the shares issued. Charges related to trading ulatory demands. The bulk court or addressed in pub- Reached Tuesday, the bank rein Australia & New Zealand was raised through an institu- lished regulatory guidance. It ferred to that earlier state- Banking Group Ltd. shares by tional share placement under- denied any wrongdoing and ment. the underwriters were filed written by Citi, Deutsche Bank said that if the regulator be- Deutsche Bank said it and Tuesday by Australia’s govern- and the local arm of JPMor- lieves there are matters to the two former executives who ment prosecutions agency gan Chase & Co. The place- address, they “should be clar- were charged acted responsi- against ANZ, Citigroup Inc. ment was completed that Au- ified by law or regulation or bly and in the interests of cli- and Deutsche Bank AG, as gust when about 80.8 million consultation.” ents. well as several current and shares were issued. The regulator alleges the

former senior executives of all The competition commis- underwriters reached an un- Heard: Australian banks face The charges from the country’s antitrust regulator relate to a BRENDON THORNE/BLOOMBERG NEWS three. sion hasn’t detailed its allega- derstanding on the disposal of a reckoning...... B14 2015 fundraising by Australia & New Zealand Banking Group. Fund Reports Get Email Treatment

BY DAVE MICHAELS proach for a few years, and even then, funds must mail a WASHINGTON—You know notice to shareholders that those printed mutual-fund re- tells them a new report is ports you meant to read but available and provides a phone wound up tossing into the re- number to call to request a cycling bin? There won’t be hard copy. too many more of them. The SEC’s two Democratic Regulators on Monday ap- commissioners said they were proved a longstanding request concerned that even minor from the mutual-fund indus- barriers to accessing fund re- try, which has pressed for ports—such as having to re- email, rather than snail mail, quest them online or by to be the default method for phone—could prompt some disseminating shareholder re- shareholders to neglect the ports. important disclosures. The Securities and Ex- “The commission today re- change Commission approved verses the default rule for de- a rule that will allow funds, livery of information to inves- beginning in 2021, to post the tors, a choice contrary to documents on websites and everything we know about tell shareholders how to ac- how individual investors actu- cess them electronically. ally behave,” said Robert Jack- The commission’s action, son Jr., who cast the sole “no” which passed on a 4-1 vote, vote against the rule. was the culmination of a The U.S.’s mutual-fund

BRIAN FLAHERTY FOR THE WALL STREET JOURNAL yearslong battle over the trade group estimates share- The company operates a popular app that people use to store, trade and transfer bitcoin. It is the largest cryptocurrency exchange. semiannual reports, which of- holders are the winners from ten run over 100 pages and in- the change: The move will clude fee and performance save $2 billion in printing and Coinbase to Expand Into Japan charts as well as innumerable mail costs over 10 years, the tables listing all of the securi- Investment Company Institute ties owned by the fund. The said in 2016, costs that are BY STEVEN RUSSOLILLO “As a regulated, compliant tomer funds. Regulators have open a cryptocurrency ex- nation’s paper industry lob- passed on to shareholders and crypto company in the U.S., we since suspended operations at change. bied hard against the rule detract from investment re- Coinbase Inc., the operator will focus on building that some exchanges. Coinbase operates a popu- when it was first proposed in turns. of the largest U.S. cryptocur- same level [of] trust with new Exchange operators have lar app that people use for 2015. In a survey of 400 investors rency exchange, is setting up customers in Japan,” Dan Ro- had mixed success in Japan. In storing, trading and transfer- The American Forest & Pa- conducted for the SEC in 2011, shop in Japan, where much of mero, vice president and gen- April, San Francisco-based ring bitcoin and collects fees per Association and the Enve- about one-third of respon- the world’s bitcoin trading eral manager of Coinbase, cryptocurrency exchange Kra- when customers buy or sell lope Manufacturers Associa- dents said they preferred pa- takes place. wrote on the company’s blog. ken said it was ending its the cryptocurrency. At one tion lobbied to maintain the per copies of their mutual- The San Francisco-based He said the expansion was point in December, Coinbase print-first approach, and they fund reports. An additional company named Nao Ki- part of Coinbase’s efforts “to was the most-downloaded free rallied retirees and consumer 17% of those surveyed said tazawa, a former Morgan accelerate the global adoption Coinbase app in Apple Inc.’s App Store. groups to their side. The SEC they would like a “print sum- Stanley banker turned fintech of cryptocurrency.” named former The company has been trying received hundreds of form let- mary” of the report’s most im- executive, as its new Japan Japan has long been a hot- Morgan to branch out beyond its core ters that said email distribu- portant parts. chief executive. Coinbase said bed for cryptocurrency trad- Stanley banker base of U.S. individual inves- tion would hurt elderly inves- The SEC also said Tuesday it is working with Japanese ing. Rules that took effect in Nao Kitazawa tors and last month unveiled tors as well as people in rural that it would seek public com- regulators to ensure it com- Japan last year established as the Japan plans for new services aimed parts of the country where in- ment on whether to change an plies with local laws. It didn’t bitcoin as a legitimate pay- CEO. at hedge funds and other big ternet access is slow and ex- esoteric fee system that com- offer a time frame for when it ment method and helped the investors, such as brokering pensive. pensates brokers and vendors expects to commence. digital currency flourish in the large-scale cryptocurrency That caused the SEC to de- for sending mutual-fund re- Coinbase, which was country. About two-thirds of trading services for Japanese trades. lay final action on the paper ports to shareholders. founded in 2012 and runs the bitcoin trading is yen-denomi- residents. The price of bitcoin traded proposal in 2016. Now under The system hands brokers largest U.S. digital-currency nated, according to data pro- Also in April, internet bro- at $7,628.88 late Tuesday, ac- new leadership appointed by and vendors such as Broad- exchange by volume, said it vider Coinhills. kerage Monex Group Inc. said cording to research site Coin- the Trump administration, the ridge Financial Solutions Inc. currently operates in 32 coun- Japanese regulators have it was buying Coincheck for Desk. It has lost more than SEC decided to allow mailings more money for sending re- tries including Singapore. Yet tightened their grip on the $34 million and aimed to fully half of its value since peaking to be culled. ports electronically. it has lacked a significant market in recent months, after restore its operations. Messag- near $20,000 in December. To soothe concerns that The companies get an addi- presence in Asia, one of the cryptocurrency exchange Co- ing-app operator Line Corp. is Still, it is significantly higher they are moving too quickly to tional 10-cent fee for each driving forces behind bitcoin’s incheck Inc. in January lost one of several companies wait- from early 2017, when it squelch paper, regulators put shareholder report that is sent surge last year. more than $500 million in cus- ing on regulatory approval to started the year below $1,000. off the electronic-first ap- digitally.

Make this your moment.

DoctorsWithoutBorders.org/Donate THE WALL STREET JOURNAL. **** Wednesday, June 6, 2018 | B13 MARKETS Treasurys Edge Up Technology Stocks Take the Lead BY DAVID HODARI spond to news like the political AND ALLISON PRANG uncertainty in Italy. “We still In Placid are yet to have any sense of Technology stocks contin- euphoria in the markets,” he ued climbing, pushing the Nas- said. “That’s a positive.” daq Composite to a second Mr. Davidson also said now Session consecutive record close. would be a good time for in- The technology sector of vestors to look at their portfo- BY AKANE OTANI the S&P 500 lios, noting they might be too TUESDAY’S also ended the exposed to U.S. stocks or U.S. government-bond MARKETS session at an small-cap companies, given the prices inched higher in a quiet all-time high, Russell 2000’s recent outper- day of trading. rising 0.4%, formance. Investors don’t have The yield on the 10-year and has climbed 6.6% over the enough exposure to markets Treasury note settled at past month. That marks a shift outside the U.S., and “it’s pos- 2.917% Tuesday, compared after investors fled the sector sible that they’re sitting on too with 2.939% the day before. in March amid fears of in- much cash still,” he said. Yields, which creased regulatory scrutiny as The dollar’s recent sharp CREDIT fall as bond Facebook faced questions over rally, which began in mid-April MARKETS prices rise, ini- its sharing of users’ informa- and was spurred by tepid eco- tially pared tion. nomic data and political turbu-

overnight de- Now, tech stocks are looking JAAP ARRIENS/SIPA USA/ASSOCIATEDlence PRESS outside the U.S., has clines after data showed activ- more attractive, investors say, Twitter is slated to replace Monsanto in the S&P 500 before Thursday’s opening bell slowed in recent weeks. Higher ity across U.S. service indus- even as tighter trade policies energy prices helped eurozone tries accelerated more than have dented investors’ confi- to 2.917% from 2.939% Monday. inflation data last month hit the expected in May. dence in the global growth $800 Billion and Climbing Lower yields tend to hurt European Central Bank’s target The Institute for Supply story that drove stocks to re- Amazon.com closed at a record for the seventh straight session and banks’ lending profitability. for the first time in a year. Management said Tuesday cords last year. Many investors 38th time in 2018. Tuesday’s jump comes a day after the e-commerce Shares of utility companies The dollar’s rally “looks that its nonmanufacturing in- believe tech companies can re- retailer’s market value topped $800 billion for the ﬁrst time. and consumer-staples firms in complete to us, hence we rec- dex, which tracks a wide range liably increase earnings, even if the S&P 500 fell 0.7% and 0.5%, ommend selling the [dollar] of U.S. industries such as the global economy slows. Amazon’s gains in share price Number of record closes for respectively. across the board,” Morgan health care, finance and con- The tech-heavy Nasdaq for the past seven sessions Amazon shares in recent years U.S. stocks started the week Stanley foreign-exchange strat- struction, rose to 58.6 in May, Composite—which also closed 2.00% 50 on a positive note Monday, egists said in a note. Since the above the 57.6 that economists at a record Monday—rose 31.40 1.75 boosted by last week’s solid euro is “the anti-dollar,” it may surveyed by The Wall Street points, or 0.4%, to 7637.86. The 40 jobs data, which outweighed regain strength against the Journal had expected. Dow Jones Industrial Average 1.50 continuing trade friction be- greenback, they added. Readings above 50 indicate and the S&P 500 waffled be- 1.25 30 tween the U.S. and some of its Elsewhere, the Euro Stoxx expansion. tween small gains and losses 1.00 neighbors and largest part- 600 fell 0.3%. Early Wednesday, Strong economic data tends for most of the session, before 20 ners. The jobs report played Japan’s Nikkei was up less than to weaken demand for Trea- ending the day little changed. 0.75 into market expectations that 0.1%, Hong Kong’s Hang Seng surys, which investors are “Tech is a stand-alone sector 0.50 the Federal Reserve would Index was up 0.5% and South 10 drawn to when they are feel- where it feels like there’s a 0.25 raise interest rates at its meet- Korea’s Kospi was up 0.3%. ing uncertain about the out- structural growth story, and ing next week. Data from CME 0 0 look for growth. we’ll continue to see earnings Group showed investors bet- AUCTION RESULTS May June 2014 ’15 ’16 ’17 ’18* “Overall a very robust read growth,” said Nick Peters, port- ting on a 93.9% probability of Here are the results of Tuesday's Treasury auction. All bids are awarded at a single price at the market- that has led Treasury yields folio manager at Fidelity Inter- *Through Tuesday a rate increase. clearing yield. Rates are determined by the difference higher,” wrote Aaron Kohli, national. “Valuations do look Source: FactSet THE WALL STREET JOURNAL. Erik Davidson, chief invest- between that price and the face value. rates strategist at BMO Capital pretty full…and tech aside, it’s ment officer at Wells Fargo FOUR-WEEK BILLS Applications $106,520,029,100 Markets, in a note. difficult to see where the mar- climbed $1.92, or 5.1%, to $39.80, to 24799.98, while the S&P 500 Private Bank, said there is a Accepted bids $35,000,079,100 Bond yields then drifted ket will beat expectations.” their highest level since 2015. rose 1.93 points, or less than “gravitational pull” for the " noncompetitively $798,164,500 " foreign noncompetitively $0 lower in afternoon trading, In a fresh sign of the tech sec- Shares of Apple, Ama- 0.1%, to 2748.80. market to rise and that he ex- Auction price (rate) 99.861556 with analysts attributing the tor’s ascendancy, Twitter is zon.com and Microsoft again Financial stocks were one of pects the S&P 500 to increase (1.780%) Coupon equivalent 1.807% lull in action to a dearth of slated to replace Monsanto in closed at all-time highs. the drags on the broader index, 5% or 6% more in 2018. At the Bids at clearing yield accepted 38.65% economic data on the calen- the S&P 500 before Thursday’s The Dow industrials fell sliding 0.4% as the yield on the same time, he indicated that it Cusip number 912796PN3 dar. opening bell. Twitter shares 13.71 points, or less than 0.1%, 10-year Treasury note slipped is good when investors re- The bills, dated June 7, 2018, mature on July 5, 2018. OPEC Frets Beware Over China Overly Rosy Forecasts on Oil Stores Economy ContinuedfrompageB1 lysts use a variety of methods, BY GEORGI KANTCHEV including satellite technology, to try to track how much oil is Good economic forecasts there. may be too much of a good China’s inventories, includ- thing: They could help cause a ing the country’s strategic re- recession. serve and commercial stocks, That’s according to a have risen by 130 million to new International Monetary 930 million barrels in the past Fund working paper, which year, according to oil-data says that overly optimistic eco- company Ursa Space Systems nomic-growth forecasts—in- Inc. of Ithaca, N.Y. cluding the IMF’s own—could That increase would erase help cause recessions and fis- more than one-third of the cal problems. The IMF argues 340 million barrels of surplus that positive forecasts lead oil stock that OPEC cuts took the public and private sectors out of inventories in OECD to “celebrate” by borrowing countries. more, which encourages the China’s stores are only in- sort of debt accumulation that creasing, according to the In- builds frailties in the economic ternational Energy Agency, system, harming growth. which estimates Chinese in- “Over-optimism brings eco- ventories by comparing the nomic damage in later years,” amount of crude processed in the authors write. “An overes- refineries and imports. In its timation of the future rate of latest monthly report, the economic growth could pro-

Paris-based energy watchdog YAO BING/XINHUA/ZUMA PRESS vide a short-run boost to the estimates Chinese crude-oil China’s oil inventories are increasing, according to the International Energy Agency, but solid estimates are hard to come by. economy, but it also increases stocks rose by 13.7 million bar- the subsequent probability of rels in March from the previ- a recession and other eco- ous month and continued in- Crude’s Rise Snaps tries meeting on June 22. OPEC “We’ve fallen a long way in Filling Up nomic difficulties,” they say. creasing in April. 3-Day Losing Streak and other large producers have a short amount of time, so we While inventories have dropped The paper, written by Paul As far back as October, alleviated a global supply glut could be ripe for a snapback in the West on the back of OPEC Beaudry, professor at the Uni- OPEC officials were saying with production curbs that rally if the report is bullish,” cuts, China is storing more oil. versity of British Columbia, that it needed to look more have propped up prices follow- said John Kilduff, founding and IMF economist Tim Wil- Estimate of China’s closely at the increasing size Oil erased its early losses ing a 2016 agreement. partner at Again Capital. lems, uses a sample of fore- crude-oil inventories* of China’s reserves. and closed higher Tuesday, with However, some analysts say Estimates from 11 analysts casts for 189 countries made “This additional crude re- some traders expecting a bull- they think rising demand will and traders surveyed by The 1.00 billion barrels by the biannual IMF World quirement has become a nota- ish U.S. inventory report be enough to offset any possi- Wall Street Journal showed Economic Outlook publication ble addition to world oil crude Wednesday that could halt a ble supply increases and pre- U.S. oil inventories are expected 0.75 between 1990 and 2016. demand,” a report from an Oc- recent price slide. vent prices from sliding. Inves- to have decreased by 1.9 million The authors calculate that, tober gathering at the group’s Light, sweet crude for July tors were looking ahead to the barrels, on average, during the 0.50 on average, forecasts for the Vienna headquarters said. delivery added 77 cents, or 1.2%, U.S. Energy Information Admin- week ended June 1. next year’s growth in gross Oil-storage owners nor- to $65.52 a barrel on the New istration’s weekly inventory re- The American Petroleum In- 0.25 domestic product have been mally shed excess stockpile York Mercantile Exchange, end- port Wednesday for the latest stitute, an industry group, said 0.58 percentage point higher when prices rise to make a ing a three-session losing streak figures on U.S. production and late Tuesday that its own data 0 than the actual number. Re- profit. But in China, inventory after closing at its lowest level consumption. The EIA’s re- for the week showed a 2-mil- 2016 ’17 ’18 search shows that such an up- movements follow government in nearly two months on Mon- ported inventories of “total lion-barrel decrease in crude ward bias is also present *Three-week moving average policies more than markets. day. Brent crude, the global stocks” of crude oil and fuels supplies, according to a market Note: includes commercial and in forecasts made by private- “They will buy even at $100 benchmark added 9 cents, or have risen bearishly for two participant. estimated strategic reserves sector economists such as a barrel because it’s govern- 0.1%, to $75.38 a barrel. straight weeks to their highest Some analysts said Brent Source: Ursa Space Systems banks, the paper says. ment policy,” one OPEC offi- Prices have fallen from re- level since early March as infra- crude lagging behind the U.S. THE WALL STREET JOURNAL. The IMF has also missed cial said. cent multiyear highs about two structure bottlenecks trapping price gain Tuesday—a departure most recessions in its fore- Those reserves are now weeks ago, with Russia and shale oil depressed U.S. prices. from a recent trend—was a company that tracks global oil casts, predicting only 24% of particularly pertinent as OPEC Saudi Arabia hammering out Still, some analysts said a sign that market participants storage, checks the shadows of recessions one year ahead of and its allies consider whether the terms of a deal to jointly more bullish report could at were still focused on the pros- floating roof tanks in China to the event. to produce more oil. At a tech- increase oil production leading least temporarily boost oil, with pect of higher global supply. determine how much they are The IMF’s analysts aren’t nical discussion last month, up to the next Organization of U.S. prices down 9.2% in the —Amrith Ramkumar filled. the only ones to notice that Russia, Saudi Arabia and oth- the Petroleum Exporting Coun- past two weeks. and Neanda Salvaterra Such tanks are storage fa- their own profession can get it ers discussed the inclusion of cilities whose roof floats on wrong. China and other non-OECD the surface of the stored liq- In financial markets, ana- stocks to assess whether the doesn’t sell the oil on the open said. visibility neither of strategic uid. In 2016, it combed the lysts last year wildly underes- market was in surplus or not, market or use it, the stored oil Still, OPEC and outside ana- reserves fill, nor of commer- country’s satellite images for timated gains on the S&P 500. according to an OPEC official. wouldn’t affect global supplies lysts say it is hard to measure cial inventories.” previously unknown storage Gold hasn’t followed the script This new metric would help or prices. Chinese inventories. That uncertainty has cre- facilities. of the almost yearly predic- decide whether the coalition OPEC “must be very cau- “It’s not like in Western ated an industry for data com- “We scanned the whole tions for higher prices. This should stay the course on pro- tious” before rushing into a countries…nobody knows the panies looking to measure Chi- country of China and found year’s oil rally caught forecast- duction cuts when it next production increase, said An- exact number” in Chinese re- nese reserves. Many analyze about 1,500 more tanks than ers by surprise. meets at the end of the month, toine Rostand, president of serves, another official with satellite images to determine were cataloged in industry da- But the IMF paper goes a he said. Paris-based oil-data company the group said. levels. tabases,” said James Craw- step further, arguing that fore- Oil producers must try to Kayrros. Ignoring the Chinese The IEA has also admitted Orbital Insight Inc., a ford, the company’s founder casts could take an actual eco- gauge China’s intent. If China ignores changing realities, he that it does “not have enough Mountain View, Calif., data and chief executive. nomic toll. B14 | Wednesday, June 6, 2018 THE WALL STREET JOURNAL. MARKETS Sky-High Lumber Adds to Housing Costs BY RYAN DEZEMBER $600 per 1,000 board feet ber went up in excess of the duty,” Jean-Jacques Ruest, in- The good news for home Lumber prices have soared to all-time highs—an terim chief executive of Cana- builders and house hunters is increasing burden for U.S. home builders and buyers. dian National Railway Co., told that lumber prices have 500 investors at a conference last dropped since hitting a record week. “So what they did is cre- high in mid-May. The bad ate an inflation, and there was news: Wood prices are still up no impact in the trade because 67% over the past year, adding 400 housing starts are strong.” thousands of dollars to the So far, builders and retail- cost of each new house. ers say they have been able to The historic run-up in lum- pass on higher costs to cus- ber prices—attributable to a 300 tomers, but have expressed trade dispute with Canada, Average price: $295 concern that they won’t be wildfires and limited rail ca- able to do so much longer be- pacity—comes as U.S. home fore sales volumes are af- builders are already struggling fected. Meritage Homes Corp. to meet demand amid short- 200 CEO Steven Hilton told inves- ages in buildable lots and labor. tors recently that higher lum- Lumber futures at the Chi- ber prices have this year cago Mercantile Exchange added about $3,000 on aver- closed at $588.80 per 1,000 100 age to the cost of each house board feet on Tuesday, down it builds. At Home Depot Inc., 7.9% from the record high of wood-product prices are up $639 reached May 17 but still about 30% year over year. sky high in a market in which 0 “We don’t see that abating at all,” said Ted Decker, the re- prices have only occasionally 1998 2000 ’10 eclipsed $400 over the past tailer’s executive vice president three decades. for merchandising. “Certainly Traders and analysts say New privately owned housing units started*Timber company Weyerhaeuser's share price Index of U.S. home prices† don’t want it to go a whole lot cash prices in Alberta, Canada, 1.4 million $40 200 higher, but for right now we’ve are even higher, above $650. been able to pass on and not Meanwhile, plywood prices are see degradation in units.” up 43% over the past year, ac- 1.2 190 Surging prices have pro- cording to price-tracking publi- 30 pelled share prices of loggers cation Random Lengths. 1.0 180 with big U.S. forests. Shares of “We’ve never seen anything CatchMark Timber Trust Inc., like this,” said Deb Maples, Rayonier Inc. and Potlach- 0.8 170 risk-management consultant at Deltic Corp. have each risen 20 futures brokerage INTL FCS- more than 11% over the past tone Financial Inc. “It’s been 0.6 160 year. Shares of Weyerhaeuser unprecedented.” Co., which says it is the larg- For a generation setting off 0.4 150 est private owner of timber- to start families in the suburbs, 10 land in North America with pricier construction materials 12.4 million acres, closed at 0.2 140 are another hurdle to home- $38.22 on Tuesday, the high- ownership, on top of rising bor- est price in the 118-year-old rowing costs and competition 0 0 130 Seattle company’s history. from institutional investors ’102008 ’102008 ’102008 Weyerhaeuser CEO Doyle who are gobbling up homes to Simons said higher-priced Ca- rent out in some of the hottest Note: All data except Weyerhaeuser share price are monthly. *Seasonally adjusted annual rate †S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index nadian wood is lifting demand markets around the country. Sources: FactSet (lumber prices); Federal Reserve Bank of St. Louis (housing units started); WSJ Market Data Group (Weyerhaeuser); S&P Global (index) THE WALL STREET JOURNAL. for the company’s U.S. timber Lately, there have been signs as are rising interest rates that the housing market is declined in April, according to the economy as tariffs are im- harvest about one-third of the U.S. levied tariffs on Canadian that are pushing prospective slowing as prices push beyond the Commerce Department. posed on other raw materials, lumber consumed in the U.S. lumber of around 20%. With- home buyers off the fence. the reach of some buyers. Surging softwood prices such as steel and aluminum. The blazes worsened short- out enough domestic lumber “For every $10 improvement Housing starts, purchases of aren’t entirely responsible, of The U.S. housing recovery ages following wood-boring to meet demand, buyers have in lumber prices, that’s $45 newly built single-family homes course, but they offer a glimpse had already sent lumber prices beetle infestations that wiped mostly had to pay up. million straight to our bottom and residential building per- of how the Trump administra- surging last summer, when out millions of acres of North “Lumber shipments from line on an annual basis,” he mits, a sign of how much con- tion’s protectionist trade forest fires tore through west- American timber. Canada to the U.S. are higher said Tuesday at an investor struction is in the pipeline, each stance might ripple through ern Canada, where loggers Then, later in the year, the than ever, but the price of lum- conference in New York. HEARD ON THE STREET Email: [email protected] FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard

Australian OVERHEARD Banks Face A Reason Jobs Are Tough to Fill Having a job opening to And many workers may still The new chairman of the A Reckoning fill is one thing. Convincing Churn Notice have lingering fears, sown International Air Transport someone to fill it is quite Hires and job separations as a share of nonfarm employment during the recession, about Association, Akbar Al Baker, another. leaving the security of an caused audible gasps at the 9.0% The lucky country’s banks The economy hit a new existing job for a new one. aviation body’s annual meet- may have finally run out of milestone in April, the Labor 8.5 The good news is that ing when he described one good fortune. Australia’s Department reported more people are quitting requirement of his job as nearly three decades of unin- Tuesday. For the first time 8.0 their jobs—the quits rate, or boss of Qatar Airways. terrupted growth have pow- since record-keeping began quitsasashareoftotal “Of course it has to be led ered its top lenders to be- in 2000, there were more job 7.5 employment is at its highest by a man, because it is a very come among the world’s openings than there were 7.0 level since 2001. But fewer challenging position,” he said. most profitable. Recent high- unemployed people to fill people are leaving their jobs Mr. Baker’s views on profile scandals, though, them. It is the result of the 6.5 for other reasons, pushing women in the airline industry have dented their image. The steady job gains that have the churn rate lower. shouldn’t be a surprise. banks could have more than sent the unemployment rate 6.0 For companies, the low Last year he called U.S. just a slew of regulatory down to 3.8% last month. 5.5 churn rate has been both flight attendants “grandmoth- fines to worry about. The big surprise is that good and bad. The good part ers.” The $530 million fine lev- with all of those openings, 2001 ’03 ’06 ’09 ’12 ’15 ’18 is that it makes it easier to Mr. Baker attempted to ied on Commonwealth Bank people aren’t changing jobs Source: Labor Department THE WALL STREET JOURNAL. retain the employees, which tamp down the latest furor of Australia on Monday for as much as you would helps keep labor costs lower. by highlighting the number of historic money-laundering- expect. “churn,” is going on. High the 8% it reached in 2006 That mainly benefits com- women at his company. rule breaches—the biggest Alongside the job-opening levels of churn are consider- when the unemployment rate panies that aren’t aiming to But if Qatar Airways is civil corporate fine ever pro- data it reported Tuesday, the ed a feature of a healthy job was 4.6%. grow. The bad part, which anything like U.S. airlines, posed Down Under—isn’t a Labor Department also re- market. Among the possible mostly affects companies then the only category where good look. Australia’s gov- leased figures on job open- One measure of churn— factors behind the lower looking to expand their women are a majority is ernment has already set up ings and what it calls job the sum of hires and separa- churn rate is that the U.S. workforce, is that it can be flight attendants. an independent review into separations, which include tionsasashareofoverall workforce is aging, and older hard to hire people without In the U.S., just 6.4% of the banking sector, following job quitters, people who got employment—was 7.4% in workers are less likely to job offering them strong incent- commercial pilots are women, allegations including inter- laid off and people who April, around where it has hop. Housing costs are high, ives to do so. And those a number that matches pre- est-rate rigging to giving retired. That data can be been for the past year. That particularly in some of the incentives usually involve cisely the percentage of misleading financial advice. used to gauge how much is far better than the 5.9% it urban areas where job higher pay. women on IATA’s own board. The scrutiny is likely to movement between jobs, or hit in 2009, but still below openings are most plentiful. —Justin Lahart push banks to tighten the lax lending standards that have helped make Australia’s housing market ever more Silicon Valley’s Favorite Payments Firm Adyen Cashes In expensive. Median home prices in Sydney have risen Payments are already a billion. WorldPay of the U.K. volumes anywhere in the well-known Silicon Valley to around 9.1 times annual hot sector. Tie a payments Handling Charge was the subject of a $10 world at a vanishingly small executives, bought a stake in household incomes, up from story in with digital stars Net revenue per dollar of billion takeover by Vantiv of marginal cost. late 2015, according to 6.7 times in 2012, according like Netflix, Spotify and payments handled* the U.S. in the summer of But its growth story may PitchBook data. Since then, to CoreLogic. Uber and there is the 2017, less than two years be overly reliant on some big Adyen’s revenues have more It is a bad time for a lend- promise of new-economy iZettle after it listed. There has been trendy names. Ten clients than doubled. ing pullback, though: Austra- gold. a string of other mergers and account for one-third of Even at the low end of its Square lia’s housing market has This promise underlies the private-equity deals. Adyen’s net revenues, targeted price range, a €6.5 started to slow. Regulators pitch of Adyen, an 11-year- Adyen Adyen has the same core according to its prospectus. billion valuation would are cracking down on popu- old Dutch group that business as WorldPay: Beyond the three mentioned, equate to more than 65 times WorldPay lar interest-only mortgages, launched its initial public handling payments on behalf these include Facebook, Etsy 2017 earnings before which, if they were con- offering Tuesday and hopes 0 0.50 1.00 1.50 $2.00 of retailers and other busin- and Tory Burch. interest, taxes, depreciation verted into ordinary mort- to be valued at up to €7.1 *All data from 2017 except for iZettle, esses, whether online or in The listing won’t raise and amortization. That gages would boost borrow- billion ($8.3 billion). It is which is 2018 forecast. store. Adyen’s advantage is funds for Adyen. Instead, sounds punchy, but Square, ers’ monthly payments by up relatively small, but can that it has been built for a existing shareholders, the U.S.-listed digital to 50%, UBS estimates. thank these fashionable spectacularly. A Danish world where merchants don’t including the management payments firm, trades for A souring property mar- Silicon Valley companies for startup, Nets, was listed in want to have to care how or team and investors such as nearly 180 times last year’s ket would be a major drag rapid growth. 2016 but taken private a year where customers pay them. Temasek, the Singaporean Ebitda. And iZettle is losing on banks’ profitability and What might dull this later after the shares Bigger, traditional pay- sovereign fund, and General money. their lofty valuations. As story’s shine is Adyen’s over- struggled. ments companies have to re- Atlantic, the private capital Payments are hot—maybe Australia’s regulators in- reliance on a handful of Adyen’s IPO will follow a engineer multiple existing firm, are hoping to cash in too hot. But as long as Adyen crease their scrutiny of the customers that could leave it lot of other deal activity. systems to make that work. up to €950 million. can keep its rapidly growing country’s banks, investors relatively easily. European Another European firm, Adyen has a single system Adyen was valued at €2 clients, its shares will likely should reassess their health, markets haven’t valued all iZettle, was bought last that does this more cheaply billion when Iconiq Capital, stay on trend. too. —Jacky Wong payments companies month by PayPal for $2.2 and can add extra payment a firm that runs money for —Paul J. Davies