For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com

ANYONE CAN BE The Price of Brexit A MOUNTAINBIKER Keeps Piling Up

OFF DUTY | W1 OPINION | A14

FRIDAY - SUNDAY, AUGUST 5 - 7, 2016 ~ VOL. XXXIV NO. 131 WSJ.com EUROPE EDITION

DJIA 18352.05 g 0.02% NASDAQ 5166.25 À 0.13% NIKKEI 16254.89 À 1.07% STOXX 600 337.84 À 0.67% BRENT 44.29 À 2.76% GOLD 1358.80 À 0.20% EURO 1.1137 g 0.12% What’s BOE Shakes Up Pound and Gilts Central bank’s moves try’s vote to leave the Euro- ratesatAvivaInvestors. News pean Union, the central bank Monetary Move After a long period of un- Dropping to cut rates, restart cut its benchmark interest rate Bank of England delivers conventional monetary policy Yield on 10-year gilts bond buying exceed to 0.25% from 0.5% and said it ‘stimulus now’...... A3 in developed economies, inves- Business&Finance expects to reduce it further to- Heard: BOE’s juggling act tors have wondered if central 2.0% market expectations ward zero in coming months. gets riskier...... B1 banks had run out of ammuni- In addition, it said it would Rate cut puts pressure on tion in their ability to move he Bank of England cut BY CHRISTOPHER WHITTALL buy £60 billion ($79.9 billion) U.K. banks...... B7 markets and stimulate econo- 1.5 Trates to a record low as AND GEORGI KANTCHEV of U.K. government bonds in mies. Increased stimulus part of a larger-than-ex- the next six months and up to moves from the European Cen- pected stimulus package, The Bank of England’s £10 billion of U.K. corporate 0.64% before rebounding tral Bank and the Bank of sending the pound and bond 1.0 larger-than-expected package debt over 18 months. It also slightly to 0.643%. The U.K.’s Japan appeared to have little yields sinking. A1, A3, B1 of stimulus measures Thurs- announced a new funding pro- FTSE 100 stock index jumped impact earlier this year as in- The quarter-point rate day sent the pound tumbling gram for banks, offering lend- 1.6% to 6740.16, and the Stoxx vestors talked of diminishing cut ramps up pressure on 0.5 and the yield on the 10-year ers ultracheap four-year loans Europe 600 gained 0.7% to returns from their actions. profits at U.K. banks and U.K. government bond to a re- to finance lending to house- 337.84. The Japanese yen has will spur cost-cutting. B7 Thursday: 0.643% cord low, a demonstration of holds and businesses. “The scale of the [BOE’s] gained around 19% against the British retailers are rais- 0 how some central banks retain Sterling fell 1.6% to $1.3112 response is significant in U.S. dollar this year despite ing prices on imported the ability to jolt markets. in afternoon New York trading, terms of the market reaction fresh rounds of monetary eas- 2016 goods as the pound weak- Aiming to boost Britain’s while the yield on the 10-year that you’ve seen afterwards,” ing from the Bank of Japan, Source: Thomson Reuters ens in the wake of Brexit. B1 economy following the coun- gilt touched a record low of said Charlie Diebel, head of Please see MARKET page A3 THE WALL STREET JOURNAL. London was knocked from its perch as the world’s cost- liest city. It is now No. 3, after New York and Hong Kong. B5 Special Delivery: The Olympics Arrive in Rio Taliban’s Facebook is cracking down on vague or misleading newsfeed headlines aimed at New Chief luring users into clicking. B1 Toyota cut its full-year Aims to earnings outlook as first- half profit and sales slid as the yen strengthened. B2 Close Rifts MetLife will cut $1 billion in costs by the end of 2019 with some job losses in re- BY HABIB KHAN TOTAKHIL sponse to ultralow rates. B5 AND JESSICA DONATI Siemens raised its out- KABUL—The Taliban’s new look for fiscal 2016 following leader is wooing back some strong results at the com- disaffected members as the in- pany’s energy operations. B4 surgency wages a new offen- Nokia swung toa$738.2 sive in strategic Helmand million loss on expenses re- province, say those close to lated to its Alcatel deal. B3 the group, defying U.S. and Af- ghan government efforts to World-Wide undermine it. Maulavi Haibatullah Akhun- dzada, in power for just over The Taliban’s new leader two months, has been reach- is closing some rifts in the ing out to key Taliban figures insurgency as it wages a sidelined by his predecessor, new offensive in Afghani- Mullah Akhtar Mansour, ac- stan’s Helmand province. A1 cording to these people. In one key example, the U.K. police said there new Taliban chief has nomi- was no evidence that a man nated a former military com- who killed a U.S. woman in a

CHARLIE RIEDEL/ASSOCIATED PRESS mander in Helmand, Mullah London stabbing attack was LET THE GAMES BEGIN: Brazilian Rico de Souza took part in the Olympic torch relay Thursday ahead of Friday’s opening ceremony. A6, A7 Abdul Qayum Zakir, to return motivated by terrorism. A3 to an official post just as the Islamic State said it insurgency is intensifying ef- named a new Boko Haram forts to retake the province. leader, a sign of the terror- Other nominations include ist group’s command over COMPANIES STEER ANALYSTS Mullah Nanai as chief justice the Nigerian insurgency. A4 of the Taliban supreme court. News of a cash payment The more inclusive ap- of $400 million by the U.S. to TO EARNINGS SURPRISES proach marks a break from Tehran reignited a furor over Mullah Mansour, who was the Iran nuclear deal. A4 killed in a U.S. drone strike in South Sudanese soldiers May. Mullah Mansour had at- and rebels raped hundreds of Pointing to previous comments helps guide earnings expectations, almost always lower tempted to stamp out opposi- women and girls during July tion to his leadership, after ri- fighting, the U.N. said. A4 val factions battled for control BY THOMAS GRYTA, SERENA NG The surprise wasn’t as surprising as it company. He had implied some custom- of the group. The group splin- A Brazilian Senate panel AND THEO FRANCIS looked. Before AT&T’s announcement, in- ers were waiting longer to upgrade their tered when it emerged last recommended a conviction in vestor-relations employees at the tele- mobile phones, an important revenue year that their supposed suspended President Rouss- In April, AT&T Inc. shares rose after it communications giant encouraged ana- source. leader, Mullah Mohammad eff’s impeachment trial. A6 reported quarterly revenue that nar- lysts to look back at comments made by Please see ANALYST page A8 Omar, had died two years be- U.S. blood banks and reg- rowly topped the average estimate from finance chief John Stephens in early fore and his death had been ulators are stepping up analysts. March, say analysts who spoke with the Beware ‘earnings before bad stuff’...... B5 Please see TALIBAN page A2 screening as concerns rise about the spread of Zika. A9 Israel said it arrested a Mobbed National Parks: U.S. Firms charity employee for alleg- edly siphoning off aid money America’s Mall of the Wild Dominate and giving it to Hamas. A4 iii Instead of tranquility, visitors find Public Cloud Inside crammed buses, epic bathroom lines In Europe MANSION W9 BY JIM CARLTON are a ton of people here.’ ” BY SAM SCHECHNER Those seeking serenity this New YOSEMITE NATIONAL PARK, year at national parks are find- When energy giant Enel Calif.—When Christine ing a major obstacle instead: SpA started looking last year Old-Fashioned Romalewski imagined her first some 300 million others looking for an outside company to trip to this national idyll, the for the same thing. manage its computer systems Towns New Orleans resident This year, as part and files, the Italian firm had pictured remote of the great migra- a red line: All its data had to CONTENTS Finance & Mkts. B5-8 lodges in a majestic tion of tourists, Yo- stay in the European Union. Arts & Ent...... A10 Off Duty...... W1-8 wilderness. Deer and semite is expecting The company that got the Books...... A11-13 Opinion...... A14-15 Business & Fin.. B1-4 Sports...... A7 squirrels would be as many as 400,000 contract? U.S. tech giant Ama- Crossword...... A10 Technology...... B3 the only other crea- more people than zon.com Inc., which won by Heard on Street.... B8 U.S. News...... A9 tures she and her last year’s record- promising that Enel’s data Mansion...... W9-14 Weather...... A10 Markets Digest..... B6 World News...... A2-6 husband, Rob, might breaking crowd of would be housed in a German encounter. 4.2 million. Overall, facility that met Enel’s other €3.20; CHF5.50; £2.00; “We didn’t realize the National Parks requirements: “reliable, flexi- U.S. Military (Eur.) $2.20 we were going to see had a record 307 mil- ble, agile and cheap.” folks in bathing suits, lion visitors in Political and legal pressure tubing, and people Yosemite 2015—up 5% from has for years been mounting walking through the year before. on European companies to meadows and people walking More are expected this year, as store their sensitive informa- along the sides of the highway,” the park service celebrates its tion in Europe—in part to said Mrs. Romalewski, 67 years much-publicized centennial, keep it away from what many s Copyright 2016 Dow Jones & old, surrounded by throngs of amid cheaper gas prices and an suspect are prying American Company. All Rights Reserved picture-taking tourists in late improved economy. eyes. But the push toward so- June. “It was like, ‘Wow, there Please see PARKS page A8 Please see CLOUD page A2 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com A2 | Friday - Sunday, August 5 - 7, 2016 THE WALL STREET JOURNAL. WORLD NEWS Upheaval in Turkey Has Syria Rebels Worried

Syrian Kurds are all in jail on the Syrian border. now, and we now see the Since then, the Turkish crumbling of the Turkish se- pilots involved in that inci- curity establishment,” said dent have been detained for Gonul Tol, director of the their alleged roles in the Center for Turkish Studies at coup attempt, and Turkish the Middle East Institute in officials have portrayed the Washington. “This makes entire episode as part of the MIDDLE EAST CROSSROADS Turkey very vulnerable and Gulenist conspiracy. Mr. Er- YAROSLAV TROFIMOV weak, and will make it less dogan is due to visit Russia confrontational.” for talks with President VladimirPutinonAug.9, Some of the most intense uch a sea change in the theirfirst meeting since the fighting in the five-year Syr- S regional balance of warplane’s downing. ian war erupted after last power appearstohave It isn’t clear whether month’s failed Turkish had the immediate effect of Messrs. Putin and Erdogan coup—and it is probably no emboldening Mr. Assad. could agree on how to move

coincidence. Within days of the coup at- REUTERS forward in Aleppo, and in Turkish President Recep tempt, Mr. Assad’s forces, / Syria in general. Tayyip Erdogan was an early aided by Iran, Hezbollah and “Russia retains a sense of and indispensable backer of Syrian Kurdish militias, caution vis-à-vis Erdogan. the uprising against Presi- pushed to complete the en- Russia didn’t backtrack on its dent Bashar al-Assad’s re- circlement of the rebel-held previous actions in Syria,

gime. Since 2011, Turkey eastern half of Aleppo, ABDALRHMAN ISMAIL and Russia and Turkey still servedasarear base and Syria’s largest city. A Free Syrian Army tank firing in the Ramousah area, southwest of Aleppo, on Tuesday. back cardinally opposing supplier for a The lifeline between east- sides in Syria,” said Yuri variety of ern Aleppo and the rest of group, in a bid to broaden its alyst at the Delma Institute attempt (something that Mr. Barmin, a Middle East expert Syrian rebel rebel-held northern Syria, appeal, announced it was think tank in Abu Dhabi. Gulen has denied) and de- at the Russian International groups, in- Castello Road, had become severing its ties with al It isn’t just that Turkey is manding his extradition. Affairs Council, a think tank cluding those increasingly perilous. But un- Qaeda just before the offen- distracted by the purges of Several Turkish officials affiliated with the Russian on the Isla- til recently, it could still be sive began last week. its security and intelligence have gone even further, al- foreign ministry. mist fringe. used to ferry supplies to For the Syrian rebels, the apparatus. More important, leging that the U.S. colluded Others in the region, how- That support is now under some 300,000 people living Aleppo offensive—which re- Mr. Erdogan appears to be with the putsch. President ever, see a possible deal in threat. Many of the top Turk- in eastern Aleppo. Those sulted in territorial gains but fundamentally shifting the Barack Obama has strongly the cards. ish military and intelligence people now face a humani- has yet to break the siege—is country’s foreign-policy pos- denied any involvement. “Now that Turkey is mov- officials involved in programs tarian disaster. a now or never moment. ture—something that could ing away from NATO and to assist the rebellion, includ- In response, an unusually While these groups still have have direct implications for r. Erdogan’s rela- Washington, Russia has an ing the commander of Tur- broad alliance of Syrian rebel the resources supplied by or the Syrian conflict. M tionship with Rus- enormous interest in bring- key’s 2nd Army responsible factions launched one of the via Turkey, they can’t be sure Turkey’s ties with the sia, the main spon- ing Turkey into its fold,” said for borders with Syria and war’s biggest offensives, at- such assistancewould con- U.S., its North Atlantic sor of the Assad regime, has Lebanese parliament member Iraq, have been detained for tempting to break the siege tinue in the future. Treaty Organization ally, just as dramatically im- Basem Shabb. “If Syria is im- alleged involvement in the of Aleppo at a different “What is happening now have dramatically deterio- proved. Mr. Erdogan laid the portant, Turkey is infinitely July 15 putsch. point, in the city’s southwest. in Turkey is undermining any rated since July 15, with Mr. groundwork before the at- more important, and Russia “The generals who were That allianceincludes the future offensives that the Erdogan accusing Pennsylva- tempted coup by apologizing isn’t going to sacrifice Tur- leading the Turkey-Syria pol- Syria Conquest Front, for- rebels could launch,” said nia-based preacher Fethullah for the November shooting key to please Assad, Hezbol- icy and the Turkish policy on merly the Nusra Front. The Mohamed Hineidi, senior an- Gulen of organizing the coup downofaRussian warplane lah, or Iran.”

to capture Lashkar Gah even TALIBAN for a few hours. Locals in the city are very worried,” said Rohullah Elham, the son of a ContinuedfromPageOne local police commander. kept secret. The military push has coin- The Afghan government cided with new appointments sought to exploit these divi- aimed at repairing fractures. sions by paying off breakaway Those close to the Taliban say commanders to fight the main reconciliation effortshavetar- group. The U.S. military ex- geted several influential fig- pected the May drone strike ures who quit when Mullah that killed Mullah Mansour Mansour seized power. would further disruptthe Taliban spokesman Zabiul- movement, since he kept such lah Mujahidconfirmed ap- tight gripoverfinancial and pointments had been made but military operations. declined to provide details “for Instead, the Taliban’s new security reasons.” leader is winning back factions Sayed Akbar Agha, a former that previously posed a threat. seniorTaliban commander “They don’t have the internal now living in Kabul. saidthe disagreements anymore,” said Taliban “most probably” would Waheed Muzhda, a former Tal- S reappoint Tayyeb Agha, who iban official who maintains was a close aide to the Tali- contacts with the group. “They ban’s founder, as chief of the ZUMA PRES are stronger than before.” / group’s political office inQa- A more unified Taliban is tar. INHUA now close to capturing two X Aperson close to the office more districts in Helmand, a AnAfghan security force member manning a position during a military operation against the Taliban in Helmand province last week. said Mr. Agha’s return was un- traditional stronghold that likely to accelerate chances for produces much of the opium forces that are struggling to At the same time, the Tali- President Barack Obama Helmand this week and over- peace. He added that theU.S. that helps fund the insurgency, hold ground against the group ban have claimed responsibil- agreed in June to reinstate run two districts there includ- decisionto slow the with- and whichborders Pakistan. despite an increase in U.S. mil- ity for several suicide bomb- permission for U.S. troopsto ing Nad Ali, which borders the drawal offorces had renewed Some of the fiercest battles be- itary support. A recent report ings targeting the capital, take offensive action against provincial capital, Lashkar Gah. the group’s determination to tweenthe Taliban and U.S. and by the U.S. government watch- highlighting the shaky security the Taliban, and said last Residents in Nad Ali say it keep fighting. British troops have been dog in Afghanistan showed the nationwide since most foreign monthhewould slow the rate is only a matter of time before “There isno new direction fought for control of the prov- local forces have lost control troops withdrew in 2014. Casu- of troop withdrawals. the Taliban capture the last re- at the political office,” he said. ince. over another 5%of the coun- alties are up sharply this year, Despite heavy U.S. airstrikes maining buildings under gov- —Saeed Shah and A reorganized Taliban try’s territory since the start of both for civilians and among in recent days, Taliban forces ernment control. Ehsanullah Amiri would further strain Afghan the year. the Afghan police and military. have advanced insouthern “Taliban seemdetermined contributed to this article.

Inc.’s Google and International prise. After the Snowden Pressure on U.S. companies is opening a new one in the those inVirginia, the company CLOUD Business Machines Corp.— leaks, industry-supported mounted last year when the Netherlands. said. Still, Enel says ithas nearly tripled their combined think tank InformationTech- EU’s top court struck down a U.S. firms face tough local saved roughly 11% in computa- cloud-infrastructure revenue nology & Innovation Founda- trans-Atlanticprivacy accord competition in a fragmented tion costs and 48% in storage ContinuedfromPageOne in the region to $2 billion by tion estimated that the fallout that allowed companies in Eu- market. European telecom gi- costsoverthe past year. called data localization has the end of the three-year pe- would cost American cloud rope to easily store data on antshavenetworks that en- “It comes down to scale, done little to slow the growth riod, IDC says. Together, West- firms between $21.5 billion U.S. servers. It wasn’t until able them to offer competitive economics, automation of of U.S.-based cloud-computing ern European firms saw their and $35 billion globally over July that the EU and the U.S. cloud infrastructure. these big players,” said Jack businesses operating in Eu- revenue increase 86% during three years. completed a replacement Germany business-software Sepple, senior managing direc- rope. Behind the growth: Big that period. Initially, European firms agreement, which would give giant SAP SE competes inthe tor of cloud for consulting European companies are mov- “On paper, European com- looked poised to take advan- European companies more related market for business firm Accenture, which advised ing more of their computing panies should be poised to tage, and used fear of U.S. confidenceto store data with services that run on top of ba- Enel on the shift to Amazon. work to outside providers. take advantage of this growth. government surveillance as a U.S. firms—through privacy sic cloud infrastructure, where “Local companies have trouble American firms have the scale But they are less nimble,” said marketing tool. Deutsche advocates promise to chal- analysts say much of the keeping up.” to offer low prices, and are Jonathan Atkin, asenior ana- TelekomAGsold “Email made lenge the deal in court. cloud business’s growth is set quick to roll out new services lyst for RBC Capital Markets. in Germany.” Two French con- American techfirms re- tocome. THE WALL STREET JOURNAL. and upgrades, analysts say. American firms “have bigger sortia, including one run by sponded to the threats to their Still, many European com- Europe Edition ISSN 0921-99 Americans also have built checkbooks to make decisions Orange SA, promoted their European growth with more panies use U.S. cloud firms, The News Building, 1 London Bridge Street, London, SE1 9GF at least a dozen new data cen- onthisscale.” own “sovereign cloud” offer- investment. Since 2013, IBM including France’s Schneider ters in Europe in recent years, The expanding share of ings with promises of €150 says it has doubled the num- Electric, BMW AG and Spo- Thorold Barker, Editor, Europe Bruce Orwall, Senior Editor, Europe reducing European competi- American firms in Europe’s million ($167 million) in gov- ber of its data centers inEu- tify AB. CicelyK.Dyson, News Editor, Europe tors’ home-field advantage and cloud-infrastructure business ernment backing to get these rope to 12, with one more go- Enel, for instance, began its Margaret de Streel, International Editions Editor Darren Everson, Deputy International Editor helping convince European comes as something of a sur- ventures off the ground. ing online in the fall. Amazon, process of shifting to the firms that U.S. providers can in late 2014, opened a new set cloudlast year, even though Joseph C. Sternberg, Editorial Page Editor keep their data safe. of data centers in the Frank- using European infrastructure Anna Foot, Advertising Sales The allegations in 2013 by Rising Cloud furt area, on top of another comes at an added cost. The JackyLo, Circulation Sales U.S. tech firms have seen an increase in their share of the Andrew Robinson, Communications former National Security set in Dublin. standard cost of hosting data Stuart Wood, Operations Agency contractor Edward public cloud infrastructure market in Western Europe. Microsoft opened three in Frankfurt is 8% more expen- Jonathan Wright, Commercial Partnerships Snowden of widespread U.S. new data hubs, andlast year sive than Amazon’s least ex- Revenue in exchange-adjusted dollars* Katie Vanneck-Smith, government surveillance and announced a deal to al- pensive U.S. facilities, such as Global Managing Director & Publisher the potential involvement of $5 billion low customers in Germany to Advertising through Dow Jones Advertising technology firms triggered a designate Deutsche Telecom Sales: Hong Kong: 852-2831 2504; Singapore: backlash in Europe and led to as the trustee in control of CORRECTIONS 65-6415 4300; Tokyo: 81-3 6269-2701; 4 Frankfurt: 49 69 29725390; London: 44 207 calls by privacy advocates to their data. 842 9600; Paris: 33 1 40 17 17 01; protect European data. “In a post-Snowden world, AMPLIFICATIONS New York: 1-212-659-2176 Other U.S. firms disputed the people want to know what Printers: France: POP La Courneuve; Germany: 3 Dogan Media Group/Hürriyet A.S. Branch; Italy: scale of their cooperation and governments can get access to Qualiprinters s.r.l.; United Kingdom: Newsprinters said they often challenged sur- their information and when,” In August 1998, amissile (Broxbourne) Limited, Great Cambridge Road, veillance requests. said John Frank, Microsoft’s was fired from the Tonghae Waltham Cross, EN8 8DY 2 IBM Registered as a newspaper at the Post Office. But, since then, the top four vice president of EU govern- Satellite Launching Ground on Trademarks appearing herein are used under providers of cloud infrastruc- Google ment affairs. North Korea’s east coast. A license from Dow Jones & Co. ture in Western Europe are all Microsoft Google has taken a different map with a World News article ©2015 Dow Jones & Company. All rights reserved. 1 Editeur responsable: Thorold Barker M-17936- U.S. firms, and they have ex- tack and doesn’t promise to Thursday about a missile fired 2003. Registered address: Avenue deCortenbergh 60/4F, 1040 Brussels, Belgium panded their market share by Amazon keep Europeans’ data onlyin Wednesday incorrectly gave athird in the region, hitting 0 the EU, noting that such local- the month for the 1998 launch NEED ASSISTANCE WITH 40% in 2015, according to mar- ization can be inefficient. The as April. YOUR SUBSCRIPTION? 2013 2014 2015 ket researcher IDC. company, nevertheless, has ex- By web: http://services.wsje.com Readers can alert The Wall Street By email: [email protected] The four companies—Ama- *Excluding the impact of changing exchange rates panded its data centers in Bel- THE WALL STREET JOURNAL. Journal to any errors in news articles By phone: +44(0)20 3426 1313 zon, Microsoft Corp., Alphabet Source: International Data Corporation gium, Finland and Ireland, and by emailing [email protected]. For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com THE WALL STREET JOURNAL. Friday - Sunday, August 5 - 7, 2016 | A3 WORLD NEWS Bank of England Delivers ‘Stimulus Now’

Central bank cuts key tion among some officials that The breadth of the BOE pro- the trickle of economic data gram caught some investors by rate to new low and since the vote didn’t yet justify Rate Reaction surprise. The pound fell 1.4% offers cheap loans to such a broad response. The few The Bank of 6% against the dollar to $1.3143, bits “may overstate the weak- while the yield on 10-year U.K. England lowers help spur economy ness of the economy,” they said. government bonds, known as rates for the 5 But BOE Gov. Mark Carney gilts, fell to a record low of BY JASON DOUGLAS first time since was adamant that surveys 4 0.644% before recovering AND PAUL HANNON showing steep declines in con- March 2009… slightly. London’s FTSE 100 in- The BOE’s sumer and business confidence 3 dex reversed earlier losses to LONDON—The Bank of Eng- point to a looming slowdown. benchmark close up, with financial shares land cut its benchmark interest And officials said they expect interest rate climbing steadily. 2 rate to the lowest in its 322- uncertainty over the U.K.’s fu- The BOE lowers its The BOE painted a subdued year history and revived a fi- ture economic relationship with key rate to 0.25% picture in a fresh set of quar- 1 nancial crisis-era bond-buying the EU and the rest of the world terly economic forecasts, al- program to cushion the U.K. to stunt investment in Britain though it said the U.K. economy economy from the aftershocks for years to come, squeezing 0 would probably avoid an out- of the vote to leave the Euro- the economy’s capacity to pro- 2008 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 right recession. It cut its growth pean Union. duce goods and services. forecastfor2017to0.8%from Thursday’s unexpectedly “There is a clear case for …and says it expects higher prices sooner, slower growth and higher unemployment. 2.3% in May, and trimmed its large and diverse stimulus pack- stimulus, and stimulus now,” How the BOE August and May projections for inflation, growth and unemployment compare.* 2018 forecast to 1.8% from 2.3%. age—which included a torrent Mr. Carney said at a news con- Officials described multiple of cheap cash for banks—under- ference, in the latest attempt by Consumer-price inflation† GDP growth† Unemployment rate ways they see the Brexit vote officials to reassure Britons that scores the concern at the cen- 2.5% 2.5% 6.0% weighing on growth, despite the tral bank following the June 23 they are acting decisively. stimulus. They were downbeat referendum. The stimulus package con- on consumer spending and the The BOE sharply cut its tained four elements. The BOE 2.0 2.0 5.5 housing market, and said while growth forecast for 2017, mark- cut its benchmark interest rate they expect exports to get a ing the biggest downgrade since to 0.25% from 0.5% and said it short-term boost from the it began publishing such fore- expects to cut it further toward 1.5 1.5 5.0 weaker pound, that would tail casts in 1993, saying the outlook zero in the months ahead. It re- off while the U.K.’s trading sta- had “weakened materially.” vived a program to buy U.K. tus remains unclear. Unemploy- Central banks, including the government bonds that has 1.0 1.0 4.5 ment is expected to increase, to Federal Reserve and the Euro- been on pause since 2012, and around 5.5% or 5.6% by 2018, pean Central Bank, say they are announced it would begin buy- 0.5 0.5 4.0 from 4.9%, the BOE said. watching closely in case the ing corporate bonds, too. The fi- August While the BOE can cushion move toward Brexit sparks an- nal part was a new term-fund- May the economy, it can’t completely other damaging bout of finan- ing program for banks, offering 0 0 3.5 offset the impact of the vote, cial-market contagion and eco- lenders ultracheap four-year 2016 ’17 ’18 ’19 2016 ’17 ’18 ’19 2016 ’17 ’18 ’19 Mr. Carney said, an assessment nomic instability. But the fallout loans to finance lending to shared by many economists. so far appears confined to the households and businesses. *Averages, using market interest-rate expectations; August forecasts take into account measures announced Aug. 4. †Year-over-year changes U.K. treasury chief Philip U.K., with signs that the U.S. All nine committee members Source: Bank of England THE WALL STREET JOURNAL. Hammond said he is “prepared and eurozone economies have supported a rate cut but three to take any necessary steps to shrugged off the surprise result. voted against new bond pur- purchases. All nine backed the pected to follow the Fed in rais- they could raise rates at least support the economy and pro- The package’s aspects didn’t chases, believing them prema- new bank funding. ing interest rates later this year. once this year now that markets mote confidence.” He has said gain unanimous support from ture. One, Kristin Forbes, ad- The package marks a rever- Fed officials expressed grow- have largely settled post-Brexit he intends to “reset” tax-and- the rate-setting Monetary Pol- vanced the same argument in sal for the BOE, which before ing confidence at their last pol- vote and the U.S. economy ap- spending policy before the end icy Committee, reflecting cau- opposition to corporate bond the Brexit vote had been ex- icy meeting in late July that pears to be on a solid footing. of the year.

that U.K. interest rates were in further dramatic moves in assets such as corporate debt Still, U.S., stocks had a Citigroup said investors MARKET positive territory and the markets. Such expectations and stocks. And lower interest quiet day. The Dow Jones In- should expect a “considerably bank’s last bond-buying pro- form part of a broader bet rates put downward pressure dustrial Average fell 2.95 larger” reaction, predicting gram ended in 2012. from investors that global cen- on a country’s currency, which points, or less than 0.1%, to that the spread between the ContinuedfromPageOne While investors may judge tral banks will keep rates helps exporters. 18352.05, while the S&P 500 corporate debt the bank’s which cut a key interest rate that the Bank of Japan’s pow- lower for longer in the face of The pound is down around rose less than 0.1%. The Nas- strategists believe will be eli- into negative territory in Feb- ers are on the wane, the Bank tepid growth and sagging in- 11% since the June 23 referen- daq Composite gained 0.1%. gible for the program and gov- ruary and has boosted its as- of England has shown it hasn’t flation. dum, but is still up from its Perhaps the biggest sur- ernment debt would narrow set-purchase program. Such “exhausted [its] ammunition That has sparked a renewed post-Brexit low of $1.2798. prise was the BOE’s decision by 0.25 to 0.3 percentage measures would usually be ex- at all,” said Alan Wilde, head grab for yields, with investors Gains in U.K. bonds rippled to start buying corporate points from pre-announcement pected to weaken a currency. of fixed income at Baring As- piling into riskier markets across to other major govern- bonds in September. level. The euro remains above recent set Management. Having held such as emerging-market ment securities. The 10-year That pushed yields on cor- The program “may kick- lows hit in late 2015, despite rates steady for seven years, bonds in search of returns as U.S. Treasury yield fell to porate bonds lower. The gap in start the moribund primary the European Central Bank the BOE has managed to get developed-world bond yields 1.503% Thursday from 1.543% yields between the corporate market” for new debt sales, boosting its stimulus mea- “maximum capital for its deci- hit new lows. Wednesday. bonds that are likely contend- and “reinvigorate the sterling sures at two separate meet- sion,” judging by Thursday’s Central-bank bond-buying “Markets weren’t expecting ers for BOE buying and safe corporate bond market more ings since then. market reaction, he added. pushes down yields on safe anything as nearly big as this,” government debt narrowed by generally,” said David Riley, But the Bank of England Many investors expect more government bonds and en- said John Wraith, head of U.K. 0.1 to 0.15 percentage points, head of credit strategy at had more room to act given stimulus from the BOE and courages investors into riskier rates strategy at UBS. according to Citigroup Inc. BlueBay Asset Management. Rethinking Turkey’s Ties to Europe American WomanDies

When Austrian Chancellor from deepening Turkey’s ac- In London Stabbing Christian Kern said this cess to the EU market to an week it was time for the Eu- upgrade in energy ties. BY ALEXIS FLYNN scene, police said. Ms. Horton, ropean Union to reconsider “The accession perspec- was the wife of a professor membership talks with Tur- tive is actually a problem, LONDON—U.K. police said from the university and had key, he set off a diplomatic not only because it’s not re- there was no evidence that a accompanied him to London, firestorm. alistic but because it saps 19-year-old man who killed an where he taught in Florida “Austrian PM calls our ac- energy for what could truly American woman from Florida State’s overseas summer pro- cession negotiations a ‘diplo- be a relationship between and injured five other people gram, the spokeswoman said. matic fiction.’ Actually what equals. This is a strategic in a stabbing attack in central Two other women and is fiction is a partner with whom we have London had been radicalized three men—U.S., Australian, BRUSSELS democracy some beef…but with whom or motivated by terrorism. British and Israeli nationals— BEAT where far-right we also have clear common The man, a Norwegian of were injured. U.S. Ambassador LAURENCE prevails,” Tur- interests—energy, migration, Somali origin, remained in Matthew Barzun called Ms. NORMAN key’s EU Af- economic ties,” said one se- custody Thursday after being Horton’s death “heartbreak- fairs Minister nior Brussels insider. arrested on suspicion of mur- ing” in a social-media post. Omer Celik der in the Russell Square at- Mr. Rowley said police be- said in one of a series of n Europe, though, there tack late Wednesday. Based on lieved the stabbing was spon- outraged tweets Thursday— REUTERS I are fears pulling the plug interviews with him and his taneous and the victims were referring to Austria’s Octo- President Recep Tayyip Erdogan spoke in Ankara on Thursday. on talks would push Mr. family, police said they be- chosen at random. The sus- ber redo of a tight presiden- Erdogan to scrap a deal with lieved mental health was the pect, who wasn’t named, tial race in which the right- cials argue that many EU Yet there are some who the EU that has helped stem main factor in the assault. hasn’t been charged. A spokes- wing Freedom Party’s capitals have long opposed believe that removing acces- the migrant flow from Tur- “So far we have found no man for the Norwegian Minis- candidate now leads. Turkish membership but just sion as the fulcrum for dip- key. An EU decision to scrap evidence of radicalization or try of Foreign Affairs said he “Suggesting to halt Tur- wouldn’t admit it. lomatic relations could bene- the talks could also push anything that would suggest moved to the U.K. in 2002. key’s negotiations is not de- Turkish President Recep fit both sides. While no Turkey, a critical member of the man in our custody was The attack came hours after fending EU values,” he said Tayyip Erdogan has lashed specifics have been formu- the North Atlantic Treaty motivated by terrorism,” Met- more police were deployed in in another. “It only pleases out at the U.S. and Europe, lated, some within the Brus- Organization, further from ropolitan Police Assistant the city under measures far-right in Europe and the accusing them of failing to sels machinery are starting the West as Ankara seeks to Commissioner Mark Rowley meant to protect the country coup-plotter terrorists.” denounce last month’s mili- to think about how such a mend ties with other neigh- said. “While the investigation from extremist violence. Wit- tary coup—although the EU relationship could work. bors, including Russia. is not yet complete, all of the nesses described police et Mr. Kern’s remarks said it stood firmly with The argument is twofold: Mr. Kern wants the talks work that we have done so far swarming the scene in the af- Y echo a growing view Turkey’s democratic institu- It could remove the constant to be discussed at a meeting increasingly points to this termath, and law-enforcement in Europe that after 11 tions and government. But sniping between Brussels of EU leaders in September, tragic incident as having been officials said they arrived six years of tortuously slow Western attention quickly and Ankara over every step yet few believe policy change triggered by mental health is- minutes after the first report. membership talks, the nego- turned to Mr. Erdogan’s the EU believes Turkey takes is imminent. In a German sues.” London has been the target tiations have become a diplo- crackdown. The president’s away from European values. television interview Thurs- The 64-year-old woman, of a number of terrorist at- matic sideshow whose main suggestion that he may rein- It would also allow offi- day, European Commission identified by a Florida State tacks, including the fatal stab- purpose is to avoid a fight troduce the death penalty cials on both sides to put President Jean-Claude University spokeswoman as bing and attempted decapita- over shutting them down. prompted a warning that their full focus on concrete Juncker said ending the ne- Darlene Horton, died at the tion of a soldier in 2013. Nor is the frustration a membership talks could be plans of mutual interest. gotiations would be a “seri- one-way street. Turkish offi- suspended. That could mean anything ous foreign-policy mistake.” EU Slaps Tariffs on China, Russia Steel

BY VALENTINA POP 18.7% to 36.1% for Russian pro- porting steel products to Eu- of cold-rolled steel on seven AND LAURENCE NORMAN ducers, apply to so-called cold- rope at unfairly low prices. countries, including China at rolled steel, a product used in The bloc had provisionally far higher rates. BRUSSELS—The European the packaging, automotive, imposed tariffs in February, Russia could oppose the de- Union imposed antidumping construction sectors. The ex- but the new rates are signifi- cision to impose import duties tariffs on some Chinese and pected move, announced on cantly higher. In a first-time on their steel products, Econ- Russian steel imports for the Thursday, comes days after move by the European Com- omy Minister Alexei Ulyukayev next five years in a fresh ef- the EU imposed tariffs on so- mission, the EU’s executive said. “We think that the proce- fort to protect domestic manu- called rebars, steel products arm, they are also backdated dure of the antidumping inves- facturers struggling with over- used to reinforce concrete. to apply retroactively to De- tigation was carried out in an capacity. European manufacturers in cember, before the provisional inadequate way and with vio- The duties, which range recent years have lodged mul- tariffs were agreed upon. lations of rights of Russian ex-

from 19.7% to 22.1% for Chi- tiple complaints that their The U.S. has also imposed porters,” Russian news agen- JONATHAN BRADY/ZUMA PRESS nese companies and from Chinese competitors are ex- preliminary duties on imports cies quoted him as saying. A police officer places flowers at the scene of the London attack. For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com A4 | Friday - Sunday, August 5 - 7, 2016 HK JP KO ML SI IN UK FR MN PR THE WALL STREET JOURNAL. WORLD NEWS Islamic State Names Boko Haram Leader

BY DREW HINSHAW happened to Abubakar Shekau, who had assigned him, but the AND GBENGA AKINGBULE the former face of Boko Haram, publication’s use of the term who hasn’t been seen in videos suggested that Islamic State it- Islamic State said it ap- since early 2015. It also isn’t self promoted him to lead the pointed a new leader for Boko clear if Mr. Shekau’s followers Nigerian insurgency, which has Haram, in a sign that the Nige- support the change in manage- lost significant ground over rian Islamist insurgency is re- ment. the past 18 months and seen tooling under the command of Boko Haram, whose war several of its leaders arrested the terrorist group. with Nigeria’s government has or killed. Sheik Abu Mossab al Bor- left more than 30,000 people The announcement speaks nawi was recently assigned to dead, declared loyalty to Is- to a new challenge facing Af- take command of the Nigerian lamic State in 2015. Mr. Bor- rica’s largest democracy: that insurgency, Islamic State’s nawi told al Naba that the two Islamic State is increasingly weekly newsletter Al Naba said groups have decided “to fight backing and supervising Nige- Tuesday. and unite under one umbrella.” ria’s homegrown insurgency.

The article didn’t say what Mr. Bornawi didn’t specify “Infidel forces” have ISSOUF SANOGO/AGENCE FRANCE-PRESSE/GETTY IMAGES “stripped the group of some Nigerian security forces patrolled in Bosso, Niger, following deadly Boko Haram attacks in June. territories, which we are work- 200 miles ing on retrieving,” Mr. Bornawi as they’re concerned, they con- a stick hanging out of his eos in recent months have be- Area of Boko Haram activity in Nigeria said in the interview. sider themselves to be ISIS,” mouth, while hurling insults at come slicker, reflecting Islamic 200 km For months, Nigerian offi- another term for Islamic State. Queen Elizabeth II and Marga- State’s influence, if not direct NIGER cials have warned that Boko In his comments, the new ret Thatcher, or threatening to involvement. Some of it may be Lake Haram members are slipping leader seemed to suggest that sell the 276 teenage girls he guided from outside Nigeria: A Chad into the Sahara, joining Islamic Mr. Shekau had killed too many kidnapped from a boarding Boko Haram Twitter account Ndjamena State in Libya, or for meetings Muslims, a significant depar- school in a market, “because was run from Libya and Tuni- BORNO in Sudan. ture from the doctrine shared they are our slaves.” Of those sia, Mr. Zenn said, adding that Intelligence reports and of- by Boko Haram and Islamic girls, 218 remain missing; the a second media outfit hyping CHAD ficials in neighboring countries State, who both believe that rest escaped. the group was run by an al Abuja have supported that view, and only their supporters are true Mr. Shekau, who the Nige- Qaeda defector to Islamic State. Islamic State’s announcements Muslims. rian army has repeatedly re- In Nigeria, investigators said from Libya have referenced “I’m not confident over the ported dead, only to see him they have broken up several Is- NIGERIA several Nigerian fighters. Boko long-term sustainability of reappear in videos, hasn’t lamic State recruitment cells. Lagos Haram has renamed itself Is- this,” said Jacob Zenn, a fellow been seen since in a video One was at a university, they CENTRAL AFRICAN lamic State West African Prov- at the Jamestown Foundation since February 2015. The fol- said. Another was run by a Su- REPUBLIC ince. research group in Washington. lowing month, another video danese man who frequently re- CAMEROON “There is no more Boko “I don’t think he has support emerged, saying there would ceived money transfers via Gulf of Guinea Haram,” a Nigerian counterter- from the Shekau factions.” be no surrender, but Mr. Western Union. rorism official who works with Mr. Shekau once posted reg- Shekau wasn’t in it. —Noam Raydan Source: United Nations THE WALL STREET JOURNAL. detained terrorists said. “As far ularly to YouTube, ranting with Since then, Boko Haram vid- contributed to this article. U.N. Cites Mass Rape Cash Sent to Iran Over DOJ Doubts

In South Sudan Conflict BY DEVLIN BARRETT Justice Department offi- cials didn’t object to the $1.7 BY MATINA STEVIS ported that witnesses and aid WASHINGTON—Senior Jus- billion settlement, which they AND NICHOLAS BARIYO workers saw mass rapes that tice Department officials viewed as a bargain given de- occurred outside the gate of a balked at sending a plane cades of inflation and the cir- South Sudanese soldiers U.N. camp in the capital Juba, loaded with cash to Tehran at cumstances of the original and opposition rebel fighters with peacekeepers unable to the same time Iran released deal, these people said. But raped hundreds of women and help the women and girls as- four imprisoned Americans, their concerns show that even girls during fighting in July, saulted by the soldiers. but their objections were within the Obama administra- the United Nations said on James Dak, a spokesman for overruled by the State Depart- tion there were worries that Thursday, as the world’s youn- Mr. Machar, said many victims ment, according to people fa- the currency airlifted to Teh- gest nation teetered on the had reported to the rebel miliar with the discussions. ran could send the wrong sig- brink of political collapse and forces that they had been After announcing the re- nal to Iran—and potentially to another round of civil war. abused by the army, but he de- lease of the Americans in Jan- others—about U.S. policy The U.N. High Commissioner nied rebel fighters had raped uary, President Barack Obama when it came to hostages. for Human Rights Zeid Ra’ad Al or sexually abused anyone. also said the U.S. would pay The U.S. has a longstanding

Hussein said preliminary inves- “We condemn this in the $1.7 billion to Iran to settle a JIM LO SCALZO/EUROPEANpolicy PRESSPHOTO AGENCY of not paying ransom to tigations into the hostilities be- strongest way possible and failed 1979 arms deal. What Mr. Obama announcing the lifting of Iranian sanctions in January. hostage-takers. The issue has tween the army loyal to Presi- call on the government to in- wasn’t disclosed then was that long been a difficult one for dent Salva Kiir, an ethnic Dinka, vestigate these allegations and the first payment would be John McCain and House and Federal Bureau of Investi- the Justice Department and and rebels loyal to ousted vice bring the perpetrators to jus- $400 million in cash, flown in Speaker Paul Ryan—were gation. The cash settlement the FBI, which was criticized president and opposition leader tice,” Mr. Dak said. at the same time, as The Wall united in blasting the adminis- talks were handled principally last year for providing intelli- Riek Machar, an ethnic Nuer, A spokesman for the South Street Journal has reported. tration. by State Department lawyers. gence assistance to a U.S. fam- showed the targeting of civil- Sudanese government didn’t The timing and manner of Senior U.S. officials denied All the work was overseen, ily as it tried to buy the free- ians based on tribe as well as immediately respond to calls the payment raised alarms at the payment was anything like and ultimately approved, by dom of an American aid the use of rape as an instru- seeking comment. the Justice Department, ac- a ransom. They disputed that the White House. worker in Pakistan. ment of war, predominantly by South Sudan seceded from cording to those familiar with there was a link between the A Justice Department As a result, the Obama ad- the army. Sudan in 2011 and gained in- the discussions. “People knew payment and the prisoner ex- spokesman said the agency ministration issued new guid- “The fighting resulted in dependence and control of what it was going to look like, change, saying there was no “fully supported the ultimate ance on how to handle inter- widespread sexual violence, vast oil reserves in a process and there was concern the Ira- quid pro quo. outcome of the administra- national hostage cases. The including rape and gang rape guided by the U.S. and other nians probably did consider it White House press secre- tion’s resolution of several is- instructions didn’t represent a by soldiers in uniform and Western powers. a ransom payment,’’ said one tary Josh Earnest accused Re- sues with Iran,” including the policy shift, but were largely men in plain clothes,” Mr. Al Messrs. Kiir and Machar of the people. publicans of seizing upon the settlement of the long-running designed to foster better co- Hussein said, adding that “ac- fought together for their coun- The disclosures reignited a Journal report to revive their case at a tribunal in The operation and coordination cording to the information we try’s independence but later furor over the Iran deal in campaign against the land- Hague, “as well as the return among the agencies involved. have gathered so far, those fell out and dragged the coun- Washington that could compli- mark nuclear deal, which took of U.S. citizens detained in The cash transfer and pris- most affected were displaced try into ethnic violence that cate White House efforts to effect the same weekend as Iran.” The spokesman declined oner exchange coincided with Nuer women and girls and pitted their tribes against each fortify it before Mr. Obama’s the prisoner release. to comment further on what the formal implementation those responsible seem to other, culminating in civil war term ends. Three top Republi- The prisoner swap negotia- he termed “internal inter- that same weekend of the have been mostly SPLA [army in late 2013. cans who have been feuding in tions were led by the State De- agency deliberations.’’ landmark nuclear agreement forces].” Attemptsatatrucehave recent weeks—presidential partment, with help from the A State Department spokes- reached between Tehran, the The Associated Press re- been fragile. candidate Donald Trump, Sen. Central Intelligence Agency man declined to comment. U.S. and other global powers. India Nears Approval of Tax Overhaul Israel Says Worker at

BY RAYMOND ZHONG chief executive of Wal-Mart separately. That means an air- manded Wednesday that the Charity Aided Hamas Stores Inc. in India, called the line, for instance, won’t be GST law cap the rate on most NEW DELHI—After more GST “a win-win legislative re- able to get refunded for the products at 18% to prevent BY RORY JONES continue to call for a fair legal than a year of gridlock, the up- form for all”—one that will tax it pays on fuel and may “creeping taxation.” process.” per house of India’s Parliament make supply chains more effi- charge higher fares as a result. The Modi administration TEL AVIV—Israel said it ar- The Christian aid organiza- approved a contentious over- cient for retailers and, over The degree to which the didn’t accept Congress’s calls rested an employee of interna- tion said it would review evi- haul of the convoluted tax sys- time, help bring down prices GST system makes life simpler to enshrine the rate ceiling in tional Christian charity World dence presented by Israeli au- tem, an important step in for consumers. for companies also depends on the constitution—one reason Vision for allegedly siphoning thorities. Prime Minister Narendra Thenewtaxsystem“would details in the law that will im- the amendment had been held off tens of millions of dollars According to an investiga- Modi’s campaign to modernize convert India into one uniform plement it. That legislation, up in Parliament for so long. in aid destined for projects in tion by Israel’s internal secu- Asia’s third-biggest economy. market” and give a boost to currently being drafted, will For businesses, one source the Gaza Strip and giving it to rity service, Hamas dispatched Lawmakers voted Wednes- the economy, Finance Minister need Parliament’s signoff after of potential complexity in In- Islamist movement Hamas. Mr. Halabi in 2005 to infiltrate day to replace India’s jumble Arun Jaitley said. the constitutional change is dia’s GST is that the federal Prosecutors on Thursday World Vision after he had re- of federal, state and interstate The size of that boost may approved by at least half of In- and state governments will charged Mohammed El-Halabi, ceived military training from sales taxes with a nationwide be limited, however, by some dia’s 29 state legislatures. jointly administer it. director of the Gaza branch of the Islamist group. goods-and-services tax, or features of the tax introduced Further partisan deadlock In industries, such as gold World Vision, with funding Israeli officials alleged that GST. Parliament’s lower house, to secure political support. Al- can’t be ruled out. P. Chidam- and precious metals, that have Hamas with up to $7.2 million he later used his position as where Mr. Modi’s Bharatiya Ja- coholic beverages, petroleum baram, a lawmaker in the op- long been taxed primarily by a year over more than five head of World Vision in Gaza to nata Party and its allies have a products, real estate and other position Congress party and a states, an extra layer of scru- years. He was detained June transfer funds from humanitar- large majority, is expected to items will continue to be taxed former finance minister, de- tiny could reduce evasion. 15 at a crossing into the Pales- ian projects to Hamas, which pass the measure, a constitu- It could also burden compa- tinian enclave. the authorities alleged used the tional amendment, without nies with extra paperwork and A lawyer for Mr. Halabi money to buy weapons, help fi- difficulty. audits. They will have to regis- couldn’t be reached to com- nance the construction of at- India is a notoriously cum- ter and file separate tax returns ment. tack tunnels into Israel and bersome place to do business. in each state in which they do World Vision said it was build military bases for its In the World Bank’s latest sur- business. “shocked” to learn of the armed wing. Mr. Halabi con- vey of the ease of paying taxes Additional provisions will charges and, based on avail- fessed to these acts, they said. in 189 economies, it ranked govern sales that cross state able information, had no rea- Hamas spokesman Hazem 157th. Shifting to a GST would lines. In the latest draft of the son to believe the allegations Qasem wouldn’t comment on help ease the burdens of dou- GST law, even interstate trans- were true. the details of Israel’s accusa- ble taxation and other distor- fers of goods or services be- “World Vision programs in tions or whether Mr. Halabi tions caused by the current tween two branches of the Gaza have been subject to reg- had been working for the mili- system. The move, which In- same company are taxable, ac- ular internal and independent tant group, which is desig- dia’s government first pro- cording to Satya Poddar, a tax audits, independent evalua- nated as a terror organization posed a decade ago, would also specialist at EY. tions, and a broad range of in- by Israel, the U.S. and the Eu- lower barriers to interstate Some of these quirks could ternal controls aimed at en- ropean Union. “Israel is trying commerce. Some have com- be ironed out before the GST suring that assets reach their to make fake media wins,” he pared it to the abolition of law is voted on by India’s na- intended beneficiaries and are said. customs duties within the Eu- tional and state legislatures. used in compliance with appli- —Abu Bakr Bashir

ropean Union. CHANDAN KHANNA/AGENCE FRANCE-PRESSE/GETTYOthers IMAGES may arise only after the cable laws and donor require- in Gaza City Krish Iyer, president and A shop in Delhi this week. India is overhauling its tax system. new system goes into effect. ments,” the group said. “We contributed to this article. For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com THE WALL STREET JOURNAL. Friday - Sunday, August 5 - 7, 2016 | A5

RECORDING OLYMPIC DREAMS SINCE 1932

An Olympic medal is the ultimate sporting dream. A lifetime of dedication can be transformed into gold in less than a heartbeat. This summer in Rio, OMEGA’s team of timekeepers will measure the fractions of a second that determine the medal hopes of the world’s best athletes, including Michael Phelps. We will be beside every pitch, pool and track to record their achievements as they aim to fulfill their dreams.

Exclusively at OMEGA Flagship Boutiques and selected retailers worldwide For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com A6 | Friday - Sunday, August 5 - 7, 2016 THE WALL STREET JOURNAL. WORLD NEWS Rio Projects Help Boost Wealthy Enclave

Critics say Olympics leave lasting benefits, critics spending, including a 9.77-bil- complain that politically con- lion-real subway line, a high- region has gained nected developers received fa- way extension and new fast undue benefit from vorable treatment from the lanes for buses, is likely to be a city in the awarding of many boon for the region, where recent development contracts, while urban plan- gridlock is so formidable that ners question the decision to some taxi drivers call it the BY PAUL KIERNAN pour so much money into an “gateway to hell.” area of the city that is already Other Olympic promises in RIO DE JANEIRO—On the wealthy. the area, such as a plan to west side of this city, luxury “You basically have public clean up Barra’s fetid water- condos tower above a maze of subsidies for gentrification ways, haven’t materialized. shopping centers, real-estate projects,” said Christopher Carlos Fernando de Car- offices and car dealerships. Gaffney, a senior research fel- valho, a 92-year-old billionaire Workers dart across 12-lane low at the University of Zurich who heads Carvalho Hosken highways. Once-pristine la- who has been studying the im- and has made his fortune in- goons are colored an unnatu- pact of mega-events on Rio vesting in Barra real estate, rally bright shade of green by since 2003. has boasted that the Games bacteria feeding on human Olympic facilities built with will bring three decades of ad- waste. taxpayer-subsidized loans are vancement to the neighbor- Authorities and private de- set to be transformed after the hood in five years. velopers have poured billions Games into private luxury de- His company is a partner in of dollars into this borough— velopments worth billions to both the Olympic Park and Barra da Tijuca, the nerve cen- their owners. Athletes’ Village, a complex of ter of the 2016 Rio Olympics— Many of the development 31 high-rise condominiums fi-

with new transportation deals are public-private part- LIANNE MILTON FORnanced THE WALL STREET JOURNAL with 2.33 billion reais projects, hotels, a residential nerships that city leaders have A boy sat by a lake in Barra da Tijuca, opposite high-rise condominiums, in Rio de Janeiro, in July. in subsidized loans that will complex for athletes and a vast touted as a way to reduce the become a luxury housing de- Olympic Park where nearly Olympics’ impact on public a lagoon. Two days after the Rio’s preparations for the tractual obligations estab- velopment named Ilha Pura, or half the sports will be played. coffers. city awarded the contract to Games that was reviewed by lished by the city, and declined Pure Island, after the Games. Such improvements join the All told, Barra will get real-estate developer Carvalho The Wall Street Journal. The further comment. Mr. Carvalho offered up the other beacons of consumer around half of the roughly $12 Hosken and its partners, con- report didn’t pass judgment on Carvalho Hosken was a ma- land for the Athletes’ Village culture that have attracted billion that Brazil is spending struction giants Odebrecht SA the revisions. jor contributor to Rio Mayor when Rio was putting together middle-class families weary of to prepare for the Games. and Andrade Gutierrez SA, in In a statement given to local Eduardo Paes’s 2012 re-elec- its bid for the Olympics. the cramped, run-down feel of Critics say a deal to build 2012, the city changed the lay- media earlier this year, the tion, donating 650,000 reais to “I’m convinced that if he the city’s older neighborhoods. the 2.66-billion-real ($820-mil- out of the park, giving more city said the layout changes his campaign. hadn’t done that, Rio wouldn’t But breakneck development lion) Olympic Park—a 118-acre room by the lake for the com- were legal and were aimed at The Olympic Park will be- have won,” Carvalho Hosken’s has brought problems similar tract of formerly public land panies to develop their own saving public money and en- come a mixed-use subdivision marketing director, Henrique to those that residents were containing venues for basket- real-estate projects. hancing Rio’s Olympic legacy. after the Games. Caban, said in a 2014 inter- fleeing, including horrendous ball, gymnastics and other “These revisions…are driven Rio’s city hall didn’t respond Some of the sports venues view. traffic and untreated sewage in sports—typifies their con- by efforts to maximize the to requests to comment for subsequently will be disman- The decision was motivated what was supposed to be a cerns. land values and future devel- this article. tled; others will remain to be by Mr. Carvalho’s belief that new model for urban living. The original tender called opment opportunities,” the In- A spokeswoman for the used for future events and the Olympics would bring And while Olympics-in- for permanent sports facilities ternational Olympic Commit- three-company consortium training. more infrastructure to Barra, spired mobility projects will to be located near the edge of tee said in a 2012 report on said the group met the con- Some of the city’s Olympics he said. Senate Panel Recommends Conviction for Rousseff

BY PAULO TREVISANI hearings and Ms. Rousseff will lower chamber. She was re- system. minister, called her “an honest against the working class,” he have a chance to defend her- placed by her former ally- Ms. Rousseff “will be ousted and worthy woman.” said. BRASÍLIA—A Senate com- self in person. She is accused turned-foe, Vice President because of the very serious “The Brazilian parties are The impeachment process is mittee voted 14-5 on Thursday of using illegal accounting ma- Michel Temer. crimes she committed,” said the real problem,” she said. If continuing even as the country to recommend a conviction in neuvers to mask a widening The case against Ms. Rouss- Sen. Cássio Cunha Lima, from the system doesn’t change, hosts the Summer Olympics, suspended President Dilma budget gap, something she de- eff has broadened the divisions the Brazilian Social Democracy “we will have many more im- which Ms. Rousseff and her Rousseff’s impeachment trial nies. in Brazil’s politics, as a once- Party, a rival to Ms. Rousseff’s peachments.” predecessor and political men- and that she then be perma- Ms. Rousseff was temporar- popular president fell from Workers’ Party. Sen. Lindbergh Farias, a tor, Luiz Inácio Lula da Silva nently ousted. ily removed from office in May grace while the country grap- But Sen. Katia Abreu, from fierce Rousseff supporter and fought hard to bring to Brazil. The case now goes to the when the Senate agreed to pled with a deep recession, a the Brazilian Democratic member of her party, attacked A final decision by the Sen- full Senate, which over the open a trial, after the initial sprawling corruption scandal Movement Party, who served the process against her. “It is a ate is expected in several coming weeks will hold its own phase of the process in the and a dysfunctional political as Ms. Rousseff’s agriculture coup by the Brazilian elite weeks.

thousands of miles off course. Brazil Gives Wary Welcome to Games World Malaysia’s national police chief and transport minister have Watch previously declined to confirm a RIO DE JANEIRO—When for Rio and Brazil. He points July report in New York maga- their country was awarded the to the tourist-friendly make- zine that said pilot Zaharie Ah- 2016 Summer Olympic Games over of Rio’s formerly crime- mad Shah conducted a simulated seven years ago, Brazilians ridden port district as an ex- flight over the southern Indian hugged each other and wept in ample of improvements that Ocean shortly before the plane the streets. wouldn’t have happened if not EGYPT vanished on March 8, 2014. The for the Games. Military Says It Killed report cited findings of a Malay- By Reed Johnson, Still, the massive public sian police investigation, with as- Luciana Magalhaes funds lavished on the 2014 Militant Leader, Aides sistance from the Federal Bureau and Patricia World Cup and Rio Olympics Egypt’s military said it killed of Investigation, into Mr. Zaharie. Kowsmann infrastructure projects have the leader of the country’s Is- —Yantoultra Ngui stoked anger and resentment lamic State affiliate and a num- and Gaurav Raghuvanshi President Luiz Iná- among some Brazilians. They ber of his top aides, in what cio Lula da Silva, whose popu- say the resources would have would be a significant blow to CHINA larity then was cresting on a been better spent on educa- the militancy after a yearslong wave of national prosperity, tion, health care and social war against the government. Court Sentences declared that Brazil would KIRILL KUDRYAVTSEV/AGENCE FRANCE-PRESSE/GETTYprograms. IMAGES While some 85,000 An army spokesman identified Lawyer to 7 Years “show the world we can be a Soldiers standing guard on Copacabana beach on Thursday. federal police and troops have the leader as Abu Doaa al-Ansary A court sentenced a lawyer great country.” been deployed to safeguard and said he was killed in raids on whose firm is known for taking But as the Games open here not notice anything amiss. and he is looking forward to the Olympics venues and visi- the city of al-Arish, located near on politically sensitive cases to Friday night, Brazil’s outlook Colorful banners greet drivers the athletic contests, Mr. da tors, violence continues un- the border with the Gaza Strip. seven years in prison. has shifted radically. The cruising through Botafogo. Silva said the Games are abated in Rio’s favelas. An unspecified number of his The lawyer, Zhou Shifeng, country’s economy is mired in But public opinion polls in- merely papering over crises. Even as many Brazilians aides were among 45 other mili- was part of a government a deep downturn. Its sus- dicate that majorities of Bra- Finances in Rio de Janeiro second-guess their big party, tants killed in the raids, which sweep a year ago in which pended President Dilma Rous- zilians are pessimistic about state are so dire that officials some express wary hopeful- also targeted ammunition depots roughly two dozen lawyers and seff is slogging through an im- both the Games and their recently declared a “state of ness in the next breath. in the city, the spokesman said. activists were arrested and more peachment trial. country’s future. A recent sur- calamity.” Carlos “Cacá” Diegues, one Islamic State didn’t immedi- than 300 others briefly detained Add concerns about the vey by the IBOPE agency “We are selling an illusion of Brazil’s most respected film ately comment. or interrogated. Zika virus and a potential ter- showed that 60% of respon- of prosperity to the tourists makers, wrote in an email that —Dahlia Kholaif Appearing in court on Thurs- rorist attack, and many here dents think the Olympics will who come,” Mr. da Silva said. Brazilians, contrary to their day in the city of Tianjin, Mr. are praying that Brazil makes hurt Brazil more than help it. Not everyone shares this carefree popular image, actu- MALAYSIA Zhou was the first lawyer among it through the next two weeks Other polls reveal dissatis- downbeat view. Some authori- ally are a melancholy people those arrested to face trial. He without some dire incident. faction with the country’s po- ties and businessmen are pro- conditioned by hundreds of Official Questions was sentenced to seven years “Everyone is terrified of the litical and economic direction. moting the bullish outlook years of suffering under Portu- Flight 370 Theory after he pleaded guilty to sub- Olympics,” said Eliane Cantan- Rogerio Luiz Rodrigues da that, after hitting bottom with guese colonial rule and violent The pilot of missing Malaysia verting state power, the official hêde, a newspaper and TV Silva, 34 years old, a Rio taxi 3.8% GDP contraction last internal upheavals. Airlines Flight 370 had plotted a Xinhua News Agency reported. commentator who describes driver, is one of several Brazil- year, Brazil has nowhere to go Still, he believes that the flight path into the Indian Ocean, Prosecutors accused Mr. Zhou the national mood as one of ians who say their country has but up. Olympic Games will be a suc- but it is only one of thousands of offenses that included seek- “fear and affliction.” fallen far during the past Helio Magalhaes, head of cess. of routes on his home simulator ing out sensitive cases for pub- Tourists in popular beach- seven years. Citigroup’s Brazil operations, “Because, after all,” he and doesn’t confirm he crashed licity, using activists to organize front neighborhoods like Co- Even though the Olympics believes the Games will yield wrote, “we like to give parties the plane, Transport Minister protests that attacked the legal pacabana and Ipanema might has helped his own business, substantial long-term benefits and know how to party.” Liow Tiong Lai said. system, and “luring people who The comment marks the first didn’t know better into seeing confirmation by Malaysia that the state as an enemy,” accord- the pilot’s flight simulator in- ing to a court transcript of the China Targets South Korea Pop Stars cluded a course over the south- trial posted online. ern Indian Ocean, where Flight Mr. Zhou or his lawyer 370 is believed to have flown af- couldn’t be reached for comment. Seoul’s decision to deploy a deploy the advanced U.S. mis- So far, the order has circulated ular Korean actor Lee Joon- ter inexplicable turns that took it —Josh Chin U.S. missile-defense system sile-defense system, known as only among government bod- gi is also likely to be con- over Beijing’s objections has Terminal High-Altitude Area ies and branches, these people spicuously absent from the put one of its biggest assets in Defense. said. Chinese premiere of his ro- the crosshairs: the young stars South Korea and the U.S. South Korea’s pop culture, mantic film, “Never Said of K-pop. say the system is aimed at known as K-pop, is among its Goodbye.” In recent days, the Chinese countering the growing mili- highest-profile export, with a The reason, in both cases: government has quietly tary threat from North Korea. large fan base across Asia, es- Chinese regulators, who have blocked some of South Korea’s China and Russia have op- pecially in China. either delayed visa-application up-and-coming actors and posed the deployment, arguing Tickets for concerts by Ko- approvals or pushed organiz- singers from attending promo- that it undermines their secu- rean boy bands, from YG En- ers to scrap their events, ac- tional events in China, where rity. tertainment’s Big Bang to SM cording to people in the enter- their popularity has been Within hours of Seoul’s an- Entertainment’s EXO, quickly tainment industry. growing. nouncement, China warned of sell out in China. TV variety China’s Ministry of Foreign Share prices of South Ko- repercussions against South shows based on the Korean Affairs and its top media regu- rea’s talent agencies have Korea, which relies heavily on format are among the highest lator, the State Administration plummeted. Tears have been trade with China. rated in China. of Press, Publication, Radio, shed by forlorn fans in China. According to people famil- On Saturday, two of South Film and Television, didn’t re- The dustup over celebrities iar with the matter, China’s Korea’s hottest soap-opera spond to requests to comment.

belies the high stakes follow- media regulator is targeting stars, Kim Woo-bin and Bae —Lilian Lin in Beijing HEDAYATULLAH AMID/EUROPEAN PRESSPHOTO AGENCY ing South Korea’s announce- Korean stars and content in Suzy, will miss a fan meeting and Jonathan Cheng TROUBLE IN STORES: Firefighters on Thursday battled a blaze at ment last month that it would retaliation for the deployment. in Beijing. The next day, pop- and Min Sun Lee in Seoul a shopping mall in Kabul, Afghanistan, that left one man dead. For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com THE WALL STREET JOURNAL. Friday - Sunday, August 5 - 7, 2016 | A7 SPORTS Russians Vow to Medal—If Allowed to Compete

As Games arrive, scores of leged a vast state-sponsored doping program run by Russian sports offi- nation’s athletes awaited cials, prompting calls on the Interna- clearance to participate tional Olympic Committee to ban Russia’s entire delegation. The com- BY ANTON TROIANOVSKI mittee resisted a full ban, but laid out stringent criteria for Russian Russia’s pursuit track cycling athletes to be approved—including team landed in Rio de Janeiro on blocking anyone who had ever July 31 unsure whether it would be served a doping suspension in the allowed to compete. On Wednesday, past and requiring international the men were still waiting. sports federations to individually re- “This does, of course, have a psy- view each athlete’s application. chological impact on all the ath- Russian athletes have scrambled to letes,” said Yana Panfilovich, spokes- win approval. While the fencing, gym- woman for the Russian cycling nastics and volleyball teams, among federation, on Wednesday. “It’s an others, got a green light, some others unprecedented were still awaiting a final verdict. situation.” Those who have won approval to Many Russian compete are under a microscope. athletes in various Lebzyak, the boxing coach, says that

sports were still CEM OKSUZ/ANADOLU AGENCY/GETTY IMAGES doping officials have visited his ath- in limbo for much Rhythmic gymnast Yana Kudryavtseva, above in June, is one of the top medal contenders for Russia’s depleted team in Rio. letes at 6 a.m. at least four times in of this week. Alex- Rio in recent days to collect samples. ander Zhukov, to be before being derailed by wide- how tired we are of these endless retribution for what many of them Under a different kind of glare is president of Russia’s Olympic Com- ranging doping probes. doping fights.” characterize as a Western conspiracy long jumper Darya Klishina, who mittee, said Thursday that 271 Rus- But from boxing to volleyball, Shamonaev’s staff predicts Russia to use doping claims to push the trains in the U.S. and is the only Rus- sian athletes were admitted—about some big names have been cleared will grab 11 to 17 gold medals and 35 country out of the Olympics. sian to get an exemption to the blan- 70% of the 387 names Russia entered to compete, setting up one of the to 57 overall, down from the 24 gold “These were foreign officials who ket ban on track and field athletes. for competition. A final ruling on biggest riddles of Rio’s Summer medals and 82 overall that the coun- didn’t want Russia to participate,” “I would be happier if all of us Russian athletes’ eligibility was ex- Games: Can the Russians still win? try won in 2012 in London. Still, if national boxing coach Alexander had been admitted,” Klishina said pected late Thursday. “Every single Russian victory, and the high end of that prediction Lebzyak said. “This is a political sit- last month after drawing criticism But behind the cloud of one of every judging error, will be seen in proves true, Russia could slip only a uation. It’s connected to all the from some Russian fans for lacking sports history’s biggest scandals, the political context,” said Oleg notch or two from the fourth-place things now happening around solidarity by having won an exemp- Russia is in fact fielding an Olympic Shamonaev, an editor for popular showing it had in London. Ukraine and Syria.” tion. “I’m currently under pressure team. It’s about a third smaller, and Russian sports website Sport Ex- Russian athletes and officials in- A report by the World Anti-Dop- and heightened attention that is not less star-studded, than it was meant press. “Everything will depend on sist they will fight hard—in part as ing Agency released last month al- always positive.” The Man Behind The Rise and Fall

BY LAURA MILLS put in one of its worst perfor- mances since the collapse of Moscow the Soviet Union at the Van- At the last edition of the couver Olympics in 2010, Olympics—the Sochi Winter ranking only sixth in the Games in 2014—Russian Presi- medal count and 11th in gold dent Vladimir Putin and medals. Sports Minister Vitaly Mutko But Mutko kept his job, and were pictured smiling at in December that year, Russia events from the skating rink won the right to host soccer’s to the cross-country skiing World Cup in 2018. That vic- trail as Russia blasted to the tory was tainted by accusa- top of the medals table. tions of corruption during the Neither will be at the Rio bidding process: Investigators opening ceremony Friday after from soccer’s world governing an investigation that alleged body, FIFA, said Russia was state-coordinated doping led unable to turn over most of international sports organiza- the documents related to its tions to exclude from the bid because it had returned Olympics Russia’s entire track- the computers it leased for the and-field team apart from one bidding process, which were athlete, as well as over a then destroyed. dozen more in other sports. The FIFA investigation was It is a remarkable fall for inconclusive, and Mutko has the sports powerhouse, which responded by saying there was Mutko led in a revival that “no criminality” involved in mirrored the Kremlin’s narra- Russia’s 2018 bid. tive of resurgence under Putin. His signature achievement He transformed a struggling came at the Sochi Games, soccer club in the country’s where Russia won 13 golds and second city, won the rights to 33 total medals. Mutko was stage soccer’s World Cup in the face of Russian sport at its 2018 and boosted Russia’s zenith: A week after the Olym- Winter Olympics team from pics, Putin praised him in a sixth to first in the medals ta- television interview for mak- ble in Sochi two years ago. ing “a significant contribution The investigation, for the to our athletic achievements.” World Anti-Doping Agency, But the World Anti-Doping questions the foundations of Agency report, released last that success. Russian officials, month, alleges that success in including Putin and Mutko, Sochi was achieved in part due have denied the allegations to widespread doping. The in- and presented the scandal as vestigation found that Mutko’s an attack on Russia. sports ministry played a key “We very much regret that, part in covering up positive in preparing the report, ex- tests, though Mutko hasn’t perts didn’t take the trouble to been named by any investiga- question those they are accus- tors as a perpetrator, Kremlin ing, to check facts that they spokesman Dmitry Peskov consider checked,” Mutko said said, according to Interfax last month. He said that Rus- news agency. Mutko has de- sian sport had worked hard to nied that the ministry was in- combat doping and that pun- volved in doping. ishment should be meted out Top officials and state tele- to individuals found guilty of vision have focused their ire violations, rather than to on what they call a targeted whole groups of athletes. campaign against Russia, Mutko, who has known Pu- rather than calling for heads tin since the early 1990s, has to roll. said he is prepared to leave “The current situation has his post. But there is little sign gone beyond not only beyond that Putin, who rarely purges the law, but beyond common top lieutenants, is ready to sense,” Putin said on July 27. cast aside his ally. “This is a directed campaign, Mutko was heavily criti- the target of which is our ath- cized in the press after Russia letes.” PAVEL GOLOVKIN/ASSOCIATED PRESS Russian Sports Minister Vitaly Mutko in Moscow in July. For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com A8 | Friday - Sunday, August 5 - 7, 2016 THE WALL STREET JOURNAL. FROM PAGE ONE

their estimates for many rea- ANALYST Managing Expectations sons, and do so throughout Number of quarterly reports in which S&P 500 companies missed, met or exceeded earnings estimates. Few companies just missed the quarter.” About half the estimates, while many companies met or barely beat them. changes in the first quarter ContinuedfromPageOne 800 reports were made a week or less be- Analysts at three research fore the April 26 earnings an- firms cut their sales estimates nouncement. by an average of about $1 bil- 600 AT&T says it falls short of lion in the week before AT&T is- analyst estimates about as of- sued first-quarter numbers. Fell short of the average estimate Met or beat the average estimate ten as it meets or beats them William Blair & Co. analysts 400 when looking at five com- cited Mr. Stephens’s comments. monly followed financial mea- The average estimate of all 22 200 surements. In the second quar- firms following AT&T fell $323 ter, AT&T narrowly missed million in three weeks, accord- analysts’ revenue projections. ing to FactSet. 0 According to data from Fact- AT&T wound up reporting –50% –40% –30% –20% –5%–10% 05%10% 20% 30% 40% 50% Set, AT&T met or beat the aver- $40.54 billion in quarterly reve- age earnings target in 10 of the nue, beating the lowered target Percentage by which reported earnings were under or over the average estimate last 13 quarters and missed by a by $76 million. Note: Includes 6,076 earnings reports by current S&P 500 companies from the first quarter of 2013 through the first quarter of 2016. Excludes reports where companies beat or missed penny per share three times. estimates by more than 50%. Quarter after quarter, about CBS has surpassed the aver- Source: FactSet THE WALL STREET JOURNAL. 75% of companies in the S&P age earnings estimate in 19 of 500 index meet or exceed ana- the past 20 quarters. Several lysts’ earnings forecasts, a sta- pany into a positive surprise. analysts who follow CBS say its tistic that has held up in good The Journal examined daily investor-relations staff regularly times and bad. One reason for changes in analysts’ estimates contacts them to discuss their such consistently impressive re- at S&P 500 companies since financial models. A CBS spokes- sults is that some companies the start of 2013, comparing woman wouldn’t comment. quietly nudge analysts’ num- the estimates with what the This spring, many analysts bers, almost always lower. companies ultimately reported were struggling to figure out A federal rule bars compa- for each period. how Goldman would fare amid nies from selectively disclosing Nearly 2,000 times from the first quarter’s market tur- material nonpublic information the start of 2013 through this bulence. From mid-March to but doesn’t prohibit private year’s first quarter, companies mid-April, 16 analysts cut their conversations in which compa- would have missed the aver- earnings estimates by an aver- nies can gently push analysts in age earnings estimate if ana- age of 41%. helpful directions, as AT&T did. lysts hadn’t changed their When Goldman released re- “We understand the rules, numbers in the 40 trading sults April 19, it had $2.68 a and we follow them diligently,” days before the company’s share in earnings, more than says Mike Viola, senior vice quarterly earnings report. 10% higher than the lowered president of investor relations In about one-fourth of the in- target. The stock rose 2.3%. at AT&T, based in Dallas. stances where companies would Around the end of the first Some analysts, investor-rela- have missed the average earn- quarter, the bank’s investor-re- tions officials, securities law- ings estimate, the average pro- lations staff answered calls

yers and executives say the sig- jection fell enough that the RICHARD DREW/ASSOCIATEDfrom PRESS analysts, many of whom nals have become so company wound up meeting or An AT&T store in New York. Before announcing earnings in April, the company’s investor-relations routinely check in with the commonplace that the all-im- beating analysts’ expectations employees encouraged analysts to look at an executive’s comments that suggested revenue may be hurt. firm when updating their fi- portant question of whether a instead, the Journal’s analysis nancial models and targets. company beat estimates is more shows. The 40 trading days ask if I was aware of their guid- earnings announcements and occasionally answer “fact- Some conversations included about theatrics than reality. cover the period from when ance and incorporated it into consensus estimates was cre- based questions” sent by discussions about comments Companies send the signals companies typically have a good my models,” says Jeffrey Harte, ated in the 1970s when federal email, the company says. from rival executives at investor to make themselves look bet- sense of the quarter’s perfor- a banking analyst at Sandler regulators began requiring com- Near the end of the first conferences during the first ter—and boost their stock mance to the day before earn- O’Neill + Partners LP in Chicago. panies to issue quarterly finan- quarter, AT&T steered analysts quarter, some analysts say. prices—even though their fun- ings are announced. Roger Freeman, who left cial reports. In 1976, a unit of back to Mr. Stephens’s com- Michael DuVally, a Goldman damentals haven’t changed at Lowered earnings forecasts the stock-research industry in brokerage firm Lynch, Jones & ments at a Deutsche Bank AG spokesman, says the discus- all. And the signals often go to helped 66 firms, including 2014 and now works at a tech- Ryan began collecting analysts’ conference on March 9, say sions were appropriate, partly just a small number of ana- Citigroup Inc., Coca-Cola Co. nology startup, says: “If some- earnings estimates and tallying five analysts who spoke to the because analysts “are over- lysts, giving them and their in- and Viacom Inc., meet or beat one is trying to get your num- “surprises,” or results that beat telecom company. loaded with data.” He adds: vesting clients a potentially earnings expectations during bers down, they will highlight or missed expectations. AT&T’s finance chief said “Serving as a resource for unfair advantage. at least three of 13 quarters all the negatives and not posi- At least six firms now collect last year’s fourth quarter in- public information is a sensi- Media mogul Barry Diller, examined by the Journal. CBS tives, and you’ll come away and disseminate estimates that cluded “a slowdown in the ble market practice.” chairman of Expedia Inc. and Corp., U.S. Bancorp and seven thinking: ‘Gee, that sounds often include earnings per handset upgrade cycle.” He Some analysts who called IAC/InterActiveCorp, says ana- other companies met or beat pretty bad,’ and sometimes share, sales, profit margins and added that he “wouldn’t be Citigroup’s investor-relations lysts and investor-relations ex- reduced estimates in about take your numbers down.” cash flow. Investors usually fo- surprised to see that continue.” department near the end of the ecutives work together to keep half the quarters. The Securities and Exchange cus much of their attention on Jeffrey Kvaal of Nomura Se- second quarter say they were estimates low. “It is a rigged Viacom says its analyst in- Commission says companies revenue and profit estimates. curities says AT&T’s investor- referred to comments made by race,” he says, adding that the teractions are consistent with may privately comment on ana- Near the end of each quar- relations team “is very dili- Chief Executive Michael Corbat problem exists even at those industry practice. Citigroup lysts’ financial models as long ter, an elaborate dance occurs gent” before earnings releases at a June 2 investor conference. two publicly traded companies. says it provides financial up- as the companies are correcting between analysts and compa- “about making sure that the Mr. Corbat had said the An analysis by The Wall dates at conferences between historical facts in the public do- nies. The companies want to comments from the executives bank’s second-quarter profits Street Journal found that earnings releases. Coca-Cola, main or sharing “seemingly in- avoid missing expectations, are reflected in the commen- were likely to be “roughly flat” earnings estimates often de- CBS and U.S. Bancorp wouldn’t consequential data,” even if an- and analysts are striving to tary from the sell side.” compared with the first quarter, cline steadily after the end of comment. alysts use the information to come up with the most accu- A week before the an- when Citigroup earned $1.10 a a quarter. That can turn what The opposite almost never draw significant conclusions. rate numbers. nouncement, Mr. Kvaal cut his share. In late June, the average might have been an embar- happens. Companies wound up The SEC says companies first-quarter sales estimate by earnings estimate for the sec- rassing “miss” for the com- missing earnings estimates shouldn’t use private discus- Companies have $837 million to $40.54 billion, ond quarter was $1.18 a share. just 1% of the time after being sions to selectively communi- citing lower equipment sales. The number drifted to $1.10 a on track to beat them 40 trad- cate material nonpublic infor- different ways of Two days before the results, share by July 14, the day before Surprise ing days earlier, the Journal’s mation “either expressly or in coaxing analysts to the William Blair analysts cut Citigroup announced results. AT&T beat analysts' revenue analysis shows. code.” A federal rule called Reg- their sales estimate by about After the quarter ended June target after nudging some to The stakes are high. In the ulation Fair Disclosure was ad- shrink estimates. $1 billion. With one day to go, 30, analysts also trimmed their lower estimates. past five years, the share price opted in 2000 to stop compa- Buckingham Research Group revenue estimates for Citigroup of companies in the S&P 500 nies from leaking earnings reduced its sales estimate by by $237 million to $17.52 billion. Average estimate and final that fell short of analysts’ av- forecasts to selected analysts, Some companies refuse to more than $1.1 billion, also Citigroup spokesman Mark earnings report,1Q2016 erage earnings estimate who passed along market-mov- have any contact with ana- noting the slower pace of up- Costiglio says investor-rela- $41.4 billion dropped 2.2% on average in ing information to their clients. lysts. Matthew Stroud, who grades. tions personnel didn’t provide the two days before and after In 2010, Office Depot Inc. used to run investor relations Analyst James Breen of Wil- any updates to Mr. Corbat’s reporting quarterly results, ac- paid $1 million to settle SEC at Darden Restaurants Inc., liam Blair says he talks to inves- comment. Any discussions 41.2 cording to FactSet. allegations that the retailer says he wouldn’t answer calls tor-relations personnel at AT&T with analysts “rely entirely on $40.54B Companies have different had selectively informed ana- from analysts before it re- “all the time.” He adjusted his public disclosures the com- 41.0 Reported ways of coaxing analysts to lysts that it wouldn’t meet ported results. He tells compa- forecast because the previous pany has made as of those April 26 shrink their estimates. Inves- their forecasts by talking down nies he does consulting work estimate hadn’t taken into ac- dates,” Mr. Costiglio adds. tor-relations officials some- analysts’ expectations in one- with now to do the same. count the comments from On July 15, Citigroup re- 40.8 End of 1Q times point out to analysts on-one phone conversations. Analysts “may pry and AT&T’s management at several ported second-quarter profit of March 31 where their estimates are in The company’s shares tum- probe, and there’s the chance investor conferences. Mr. Breen $1.24 a share, nearly 13% higher 40.6 relation to other analysts. bled after it began contacting you could inadvertently give says he also didn’t want to be than the average estimate. The Analysts whose forecasts the analysts, and Office Depot someone a sense of tone an outlier compared with other bank’s revenue of $17.55 billion are far from what companies ended up publicly disclosing a around earnings,” says Mr. analysts who follow AT&T. topped analysts’ latest target 40.4 end up reporting risk losing profit warning in a regulatory $40.46B Stroud, now at Arbor Advisory Mr. Viola, AT&T’s investor- by about $31 million. Average estimate credibility with clients and filing. Group LLC, an investor-rela- relations chief, says “companies Citigroup executives said 40.2 could get less access to com- The SEC said Office Depot tions consulting firm. can and do talk with analysts the bank’s performance was pany management. Those are didn’t regularly make such Johnson & Johnson doesn’t about their latest, publicly better than Mr. Corbat antici- 60 50 40 30 20 10 5 reasons to listen if a company calls to analysts. The company field calls from analysts be- available information. That’s the pated because of improved Days from earnings announcement calls with a suggestion, ac- didn’t admit or deny wrongdo- tween quarter end and its job of investor relations, and it market conditions and a pickup Source: FactSet cording to analysts. ing as part of the settlement. earnings release, though in- benefits the investing public.” in trading activity near the Br- THE WALL STREET JOURNAL. “Companies have called to The modern landscape of vestor-relations personnel will He adds: “Analysts change exit referendum on June 23.

triple-digit heat. “I’m not going Hills, Calif. “But the traffic is added to the summer crowds PARKS to sugarcoat that everyone backed up like the 405 Free- in Yosemite during a June week- standing in line is happy, be- way.” end here with the first family. cause they’re not,” said Doug Some parks are considering a The Obamas’ visit coincided ContinuedfromPageOne Lentz, the park’s chief of com- cap on the number of visitors. with the wedding of Javier and Those who escaped urban mercial services. Meanwhile, they’re trying to Alexis Saucedo at Yosemite Val- centers for America’s wide-open At Utah’s Zion National Park, keep visitors in check with stern ley Chapel. Blockaded roads left spaces now find themselves in where annual visitation has politeness, and rules—many of the bride and groom, and many longer-than-usual traffic jams, jumped by more than a fifth which involve not annoying the of their guests, scrambling to packed shuttle buses and epic over the past five years to 3.6 animals. the altar. The bride said she had bathroom lines. On the busiest million, complaints are going Last year, rangers in Yellow- to hike through a forest to get days, the Grand Canyon alone is up, too. “The park now routinely stone issued 52,000 “warning” there. “It was real fun taking the going through a mile of toilet receives negative comments citations—up nearly 20% from dirt out of my heels,” Ms. paper a day, per stall, in some of about crowding,” a State of the 2014. Some of the offenses: get- Saucedo said, with a laugh. its restrooms. Park report noted earlier this ting too close to the bears, elk “Friends and family took the Overflow campers at Yo- year. and bison. Non-warning cita- grass and burrs out of my semite are pitching tents any- Part of the problem, rangers tions after repeat or more seri- dress.”

where they can, including off a say, is that people coming to the JAKE NICOL/THE WALLous STREET JOURNAL infractions are a misde- Wedding photographer Chris state highway outside the park. parks to get away don’t actually A record-breaking 4.2 million people visited Yosemite National meanor, punishable by a $100 to Geiger managed to snap images At Yellowstone, hundreds stray far off the beaten Park last year, with an additional 400,000 expected in 2016. $5,000 fine. of the happy couple at sce- cram together around Old Faith- path. At 1,169-square-mile Yo- “Practice safe selfie: do not nic vistas in Yosemite Valley. ful waiting for the geyser—or semite, rangers estimate as where you don’t want to be.” 24, of San Diego. approach animals to take pic- “I had to do a little photo- tempers—to erupt. Visitors are many as 95% of visitors stay pri- Overstuffed Yosemite shut- It wasn’t always this way. tures,” park officials warn on shopping,” he said. The couple “trying to see, not being able to marily on a valley floor that tles have become a common oc- Ron and Nikki McDevitt last Yellowstone’s website. looked fine—it was the wander- see, getting upset,” said one measures 7 miles by 1 mile— currence this summer. “That’s visited Yosemite after they Still, a man earlier this year ing tourists behind them that park employee in an internal re- flanked by cliffs that tower when tempers start to flare,” married 20 years ago. Mr. stuffed a bison calf into the back were the problem. Mr. Geiger port on crowding. “It’s like an thousands of feet. said bus driver Dan Dion. McDevitt said the couple then of an SUV, believing the animal deleted them, and restored the explosion of visitors.” “People like to make a big Sitting with her family out- could easily drive their own car was abandoned. Rangers valley’s wild, remote beauty. Officials at the Grand Can- deal out of it being so busy, but side a packed deli in the park, to stop at popular attractions. scolded him and returned the yon, where visits are up from they keep going to the same Mariah Briseno said earlier in On a recent day, they enjoyed calf to its mother, but the ani- ONLINE last year’s record 5.5 million, place,” said Colby Brokvist, gen- the day she squeezed onto a bus the short hike to Yosemite Falls mal had to be euthanized after say so many people are waiting eral manager of Southern Yo- with her family after missing with their teen sons, but this the herd rejected it. Watch a video in lines for shuttle buses—some semite Mountain Guides, which two. She felt panic when more time had to park the car and President Barack Obama— about crowds at as many as 100 deep—that they takes visitors into the park’s people tried to push in. “I said, take a shuttle bus. “It’s still known for causing traffic snarls WSJ Yosemite have stationed “bus loaders” to sparsely populated backcountry. ‘You’re going to crush my great here,” said Mr. McDevitt, during visits to Los Angeles .COM National Park at maintain crowd control in the “If there’s a shuttle stop, that’s grandma,’ ” said Ms. Briseno, 51, a math teacher from Laguna known as an “Obamajam”— wsj.com/ahedvideo. For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com THE WALL STREET JOURNAL. Friday - Sunday, August 5 - 7, 2016 | A9 U.S. NEWS

30 miles

Orlando

Tampa

FLORIDA

Fort Myers

BIG CYPRESS NATIONAL Risk Zones PRESERVE Miami Likelihood of Zika-bearing EVERGLADES mosquitoes to thrive NATIONAL PARK Low High

Source: Kraemer MUG et al., eLife Sciences, University of Oxford ZAK BENNETT FOR THE WALL STREET JOURNAL Nurse practitioner Jessica Ardente, in her first trimester of pregnancy, looks out from her balcony facing Miami’s Wynwood neighborhood. THE WALL STREET JOURNAL. Blood Banks Step Up Screening for Zika

BY MELINDA BECK United States Blood Bank, a involve people who had trav- for the American Red Cross. In we start to see the Zika being blood banks elsewhere may be much smaller blood center, had eled to such regions as South more than 80,000 samples detected further up on the able to simply ask donors who As concerns rise about the to ground its eight mobile col- America, where the virus has tested to date in those areas, Eastern Seaboard or on the have been to affected areas to spread of Zika in the U.S., reg- lection vans in the Miami area been circulating. not a single donation has been West Coast. At this point, we postpone donating for at least ulators and blood banks are as of July 28 and quarantined California’s department of positive for the virus, she said. have no other indications.” four weeks. taking action to protect the about 300 units of blood col- public health said Thursday In Puerto Rico, where Zika Because the screens are still “West Nile is carried by safety of the blood supply. lected the previous week after that two babies were born is far more prevalent, positive investigational, blood banks al- crows, which have a substan- To guard against accidental the FDA order. But the com- with Zika-related microcephaly tests in the blood supply have lowed to use them must sub- tially wider geographic transmission of the virus pany said it expected to re- to women who were infected reached 1.8%, according to the mit data to the FDA, and ob- range. Mosquitoes don’t fly through blood transfusions, ceive FDA approval to start with the virus during their CDC. tain consent from donors to very far,” said Tom West, divi- the Food and Drug Administra- Zika testing and resume collec- pregnancies while in countries Tony Hardiman, a vice pres- use the test on their blood. sion president for diagnostic tion on July 27 ordered blood tions shortly. where it is endemic. ident for blood screening pro- Whether testing donated solutions at Hologic Inc., which banks in Miami-Dade and Bro- “Every blood bank in Flor- Now officials in Florida grams at Roche Holding AG, blood for Zika will become makes the other investiga- ward counties in Florida, ida has been trying to partici- have reported 15 cases of local, which makes the investiga- routine throughout the U.S., as tional test in partnership with where officials were investi- pate [in using the new screen- mosquito-borne transmission tional test being used there, is testing for West Nile, isn’t Grifols SA. “There is a lot we gating cases of local transmis- ing tests] so there’s been of the virus in the Miami area. said that whether blood sup- yet known. Some experts say are still learning.” sion of the virus, to stop col- demand chaos,” said Chief Ex- The FDA has ordered blood plies will be tested more testing is likely to be required —Jennifer Calfas lecting blood until they are ecutive Rick Sotolongo. banks outside of Florida to de- widely “depends on whether in southern states, but that contributed to this article. able to screen each donation fer blood donations from any- for Zika. Some samples are one who has traveled to the Some blood banks were able Miami area for at least four to start checking blood sam- being tested using weeks. Blood banks have been In Miami’s Wynwood, Varying Degrees of Caution ples for Zika immediately, us- investigational deferring donations from peo- MIAMI—In the city’s Wyn- job has spurred her to abandon out. Now she will avoid Wyn- ing one of two as-yet-unap- ple who traveled to Zika-af- wood neighborhood, the center visits to her favorite restau- wood, and she plans to spend proved lab tests on an methods. fected countries since Febru- of the current Zika outbreak, rants in Wynwood. As she more time indoors. Her hus- investigational basis. ary, under FDA orders. business owners opened their leaves work at the University band walks their two dogs. OneBlood, which collects Blood donated in the U.S. is doors to another humid day in of Miami, where she is a nurse Zak Stern, who opened his 3,000 blood donations daily in The Centers for Disease already tested for West Nile vi- the spotlight Wednesday, as lo- practitioner, she stops to reap- bakery in Wynwood two years Florida, Georgia, Alabama and Control and Prevention has rus, HIV, hepatitis and other cal officials declared the area ply mosquito repellent for the ago, said he called his doctor South Carolina, said it has said Zika poses a low risk to infectious diseases. Mr. Soto- “open for business” and preg- trip to the car. on Tuesday to ask about the been screening them all for the blood supply in the conti- longo said adding the test for nant women across the city Ms. Ardente was tested on outbreak risk to his wife, who Zika since late last week. nental U.S., but experts say Zika would add about $8 to worried about their risk. Tuesday for Zika, and expects is seven months pregnant. “Everything we draw, we precautions are needed be- the $200 cost for processing Jessica Ardente, 36 years to have the results in seven to “He was pretty calming,” check for Zika now,” said Rita cause the virus causes few each unit of blood, generally old, walked her dog in Margaret 10 days. She says she is trying said Mr. Stern. Reik, chief medical officer. She symptoms and people may be paid for by hospitals. Pace Park. Ms. Ardente is in to be practical and cautious. “I His doctor said the couple said she couldn’t disclose unaware that they are infected. Blood banks in Texas and her first trimester of pregnancy am changing enough to keep should be cautious and follow whether any sample had tested The virus, which is primar- northern Florida have also and lives in Edgewood at the myself safe,” she said. the Centers for Disease Control positive, but if one did the ily transmitted by mosquitoes, been testing blood samples for edge of the affected zone. She Others are being more cau- and Prevention recommenda- blood bank would notify both can cause devastating birth de- Zika on an experimental basis, donned mosquito repellent, long tious. Tiffany Anderson, 31, is tions. He and his wife will be the donor and the Florida fects if a pregnant woman is “just to make sure that if the pants and long-sleeved shirts expecting her first child in Oc- tested, he said. Health Department. infected. There have been virus is introduced into other to walk her dog, a routine she tober. The attorney lives about “I am trying to understand To date, she said, “The re- 1,658 cases of Zika reported in areas, we can catch these cases hasn’t changed, she said. 4 miles from Wynwood and vis- what is a reasonable response sults have been quite reassur- the U.S., including 433 preg- early,” said Susan Stramer, vice But the emergence of Zika ited there frequently before the right now,” he said. ing.” nant women. Most of the cases president for scientific affairs where she lives and near her outbreak to run errands or eat —Melanie Evans Senate Races Take a Centrist Tone Business Groups Sue

BY KRISTINA PETERSON Reid, backed privatizing Social Over Inversion Rules AND ALEXANDRA BERZON Security and ran anti-immigrant ads that many voters said they BY RICHARD RUBIN against inversions, transactions LAS VEGAS—While the pres- found incendiary. in which companies can get ad- idential race has become bit- Both parties have succeeded The U.S. Chamber of Com- dresses in low-tax countries, of- terly divisive, the hard-fought this year in orchestrating which merce and a Texas business ten by merging with a smaller contest for control of the U.S. candidates win primaries and group sued the federal govern- firm based in a lower-tax juris- Senate is unfolding with candi- make it on to the November bal- ment, alleging that the Trea- diction. dates stressing moderation, bi- lot. The exception occurred for sury Department’s rules limit- Those April 4 rules attacked partisanship and compromise. Republicans in Colorado, where ing tax-motivated inversion “serial inverters,” companies The result is an almost alter- conservative county commis- transactions violate the law. such as Allergan that had nate political reality, serving as sioner Darryl Glenn won a The lawsuit filed Thursday grown to their current size something of a counterweight crowded GOP primary, making charges that the government through other inversions. The to the notion that voters this the ouster of Democratic Sen. rewrote the Internal Revenue rules would disregard three year crave sharp-edge candi- Michael Bennet more of a long Code itself after Congress previous years of those deals dates promising to shake up the shot. wouldn’t go along with Presi- when calculating the size of the system. But other Senate battles have dent Barack Obama’s proposed two companies, and that mat-

The different tone is largely JOHN LOCHER/ASSOCIATED PRESS become duels of centrists. Sen. legislative changes to limit in- ters because the tax rules are because many key Senate races Senate candidate Catherine Cortez Masto, a Democrat of Nevada, Kelly Ayotte of New Hampshire, versions. tied to the relative size of com- are playing out in centrist campaigning in a restaurant in Las Vegas in May. who in 2010 campaigned as a “This is not the way govern- panies that merge and take a states, often with Republican in- “conservative who will cut ment is supposed to work in non-U.S. address. cumbents running in states won with only 10 for the Democrats. making English the official lan- spending,” released an ad last America,” Thomas Donohue, The U.S. Treasury Depart- by President Barack Obama. It’s “There is almost a complete guage of the U.S. October showing her strolling the chamber’s president and ment didn’t immediately re- a departure from 2010, when overlap between the Senate Mr. Heck replied by appeal- through the woods and high- chief executive officer, said. spond to a request for com- many of these GOP senators races that will determine con- ing to moderation. “You have to lighting her support for Mr. The case stems from regula- ment. were first elected as part of a trol of that body and the presi- have a balanced approach,” said Obama’s plan to cut carbon tions the government is- Mark Marmur, a spokesman conservative wave. And the con- dential swing states this year,” Mr. Heck, whose campaign ads emissions from power plants. sued April 4 that led Pfizer Inc. for Allergan, declined to com- trast is heightened by this said Lanae Erickson Hatalsky, a trumpet that he comes from “an “Protecting the environment and Allergan PLC to cancel a ment. year’s unorthodox and unpre- vice president at Third Way, a immigrant family” that got is truly a bipartisan issue,” she planned merger that would A Pfizer spokeswoman re- dictable nature of the presiden- centrist Democratic think tank. through hard times with the says in the ad. have located the combined ferred to April comments by tial race. She added that Senate candi- help of “the union and social She is being challenged by companies in Ireland. Chief Executive Officer Ian “You look at the top of the dates for months have been services.” Democratic Gov. Maggie Hassan That was the government’s Read, in which he criticized the ticket, and it’s going to be an “having this fight about purple, Meanwhile, Ms. Cortez Masto in a race considered a tossup. third administrative action government’s moves. edgy, negative, ideological clash swing voters.” has clashed with the president, Other GOP incumbents are of titans,” said Steven Law, Nowhere is this year’s tone opposing his plan to close the also stressing their work with president of One Nation, a non- more visible than in Nevada’s Guantanamo Bay detention fa- Democrats. Sen. Pat Toomey of conspiracy and other charges, ac- profit aimed at keeping the Sen- dead-even contest to succeed cility. And as the state’s former Pennsylvania has emphasized U.S. cording to court documents un- ate under GOP control. “When retiring Democratic leader attorney general, she has em- his bipartisan efforts to expand sealed Thursday. you look below that, you’ve got, Harry Reid. GOP Rep. Joe Heck phasized her tough-on-crime background checks for gun Watch The indictment documents a at least on the Republican side, and his Democratic opponent, stance, as well as her ability to sales. Ohio Sen. Rob Portman wide-ranging, coordinated criminal candidates talking about solving Catherine Cortez Masto, have work across the aisle. Ms. Cor- has trumpeted his union en- organization that allegedly in- problems and getting results broken with their parties’ or- tez Masto said at a lunch stop dorsements. volved loan-sharking, gambling, and working across party lines.” thodoxy in what is considered at a Mexican restaurant that her Democrats, meanwhile, have credit-card fraud and contraband Democrats need five seats to Republicans’ best shot this year “proudest moment” was watch- recruited challengers with back- cigarettes. Members of the fam- retake the chamber—four if to pick up a Senate seat. ing Republican Gov. Brian San- grounds they hope will appeal NEW YORK ily used coded language and met Mrs. Clinton prevails—and ana- At a recent gathering of con- doval sign a bill she had drafted to centrist voters. In Missouri, at highway rest stops and res- lysts generally give them servative seniors in Las Vegas, against sex trafficking. former Army Capt. Jason Dozens Indicted taurants, prosecutors said. roughly a 50-50 chance of doing one wanted to know why Mr. The tone in Nevada was Kander, a Democrat looking to In Criminal Case Most of those indicted face up so. The map is in their favor: Heck hadn’t backed Mr. Trump’s much different six years ago, oust Sen. Roy Blunt, stresses on Federal prosecutors indicted to 20 years in prison. Lawyers for Republicans are defending 24 plan to build a wall along the when tea party-backed Republi- his website his work for veter- 46 members and associates of the defendants couldn’t immedi- seats, many in centrist or Dem- Southern border. Another asked can Sharron Angle, in her un- ans and his support of small mob families along the East ately be reached for comment. ocratic-leaning states, compared if the lawmaker would support successful bid to unseat Mr. businesses. Coast with racketeering, arson, —Corinne Ramey For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com A10 | Friday - Sunday, August 5 - 7, 2016 THE WALL STREET JOURNAL. ARTS & ENTERTAINMENT

Margot Robbie and Will Smith, center, lead an ensemble cast in the formulaic ‘Suicide Squad.’

‘SUICIDE SQUAD’: Weapon of Mass Depression WARNER BROS.

REVIEW streets, and its debut was met with cool-to- scene-setting during which the supervil- way of summing her up. Harley’s main dis- hostile responses from fans and critics alike. lains brag, preen, threaten, brawl among tinction, apart from her lurid sexuality, is a JOE MORGENSTERN (I called it “underdeveloped, overlong and themselves, endure abuse at the hands of baseball bat with which she beats up on stupendously dispiriting.”) Once you’ve seen their captors and handlers, and experience hapless adversaries. “Suicide Squad,” though, “Batman v Super- recurrent flashbacks that explain who they So far I may seem to be describing just In a word, “Suicide Squad” is trash. In man” seems like the superhero equivalent of are and why they behave so badly. (Diablo, another in a decades-long string of studio two words, it’s ugly trash. Maybe no more “Singin’ in the Rain.” a human flamethrower played by Jay Her- productions that beat up, in their turn, on words should be wasted on a movie that is, The film is formulaic, another variant of nandez, is something of a pacifist. “I’m a moviegoers who know perfectly well what after all, only a movie, not a natural disas- “The Dirty Dozen”—put together a team of man, not a weapon,” he insists.) And they’re buying into and usually enjoy it. But ter or a terrorist attack. Still, movies con- bad guys that can outdo the enemy in ex- there’s no fun to be had after the rudi- “Suicide Squad” differs in intensity and con- tribute to the collective awareness. They travagant badness. On this occasion the ments of a plot finally kick in. Most of the sistency, if not in kind. It’s an expansion of can color the way we feel about the life team is assembled by Amanda Waller, a second hour is devoted to repetitive battles the intractably bleak aesthetic that informed around us. This one deserves further atten- glum U.S. intelligence officer played joy- with the forces of the Enchantress, a vil- “Batman v Superman,” a vision of humanity tion by virtue of its exceptional cynicism lessly by Viola Davis. lainess who, far from being the next Super- dominated by heavy weaponry. and startling ineptitude. “Suicide Squad” Amanda wants to have a plan, she ex- man, turns out to be a generic CGI entity A case can be made for the movie being amounts to an all-out attack on the whole plains, “if the next Superman turns out to with no detectable personality. a good fit with the mood of the moment in idea of entertainment. be a terrorist.” To that end she recruits the When casting for “Suicide Squad” was what passes for real life. If that’s true, we’re And not just a single salvo, but the re- curdled crème de la crème of DC supervil- announced, the big draw for me was the all in deeper trouble than we know, and au- newal of a campaign that began in March lains, including Deadshot (Will Smith); Har- prospect of Margot Robbie in a starring diences may well embrace the incessant when Warner Bros. released “Batman v Su- ley Quinn (Margot Robbie); Killer Croc (Ad- role, and she certainly brought a bent grace mayhem in lieu of entertainment. But a perman,” the first in a projected series of ewale Akinnuoye-Agbaje); and a new note to the trailers as a seductively lascivi- stronger case can be made for “Suicide big-budget features based on characters incarnation of the Joker, played by Jared ous, post-adolescent Lolita with twinkly Squad” as a product of shameless pander- from DC Comics. The rationale for the series Leto, who disappears for long stretches of eyes and cute pigtails. But the writer-direc- ing. “Got me a sewer to crawl back into,” was simple. Disney was minting money from the grindingly violent and sporadically in- tor of this leaden production, David Ayer, says Killer Croc with lizardly satisfaction to- having joined forces with Marvel Entertain- coherent action. (A grim-faced Ben Affleck has no gift for comedy, or comic timing, so ward the end. He’s got nothing on the ment; Warner Bros. would do the same with also shows up for a brief, uncredited turn Ms. Robbie’s Harley, like everyone else on movie, which was in the sewer all along. its DC Comics properties. “Batman v Super- as Batman.) screen, is an essentially humorless brute. man” proved to be exceedingly dark, with If any of that sounds like summer fun, it “This is just a whole lotta pretty and a  Email Joe at [email protected] and relentless battles fought on rain-swept isn’t. Most of the first hour is devoted to whole lotta crazy,” a prison guard says by follow him on Twitter: @JoeMorgenstern. Weather TheWSJDailyCrossword| Edited by Mike Shenk Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day. PUZZLE -15 12345 6789 10111213 58 Flavoring for -10 some chicken CONTEST Riga -5 14 15 16 dishes Glasgoww 0 Moscowosco 17 18 19 61 “Until next time!” CopenhagenC p h 5 62 Use a lot 23 Chihuahua 10 20 21 22 23 24 63 Timeworn friends DDublin bli 15 Berlin 25 26 27 28 truism 26 Tried out AmsterdamA d 20 Warsawarsaw 64 Treat for winter 27 Slang for either 25 29 30 31 32 London one’s wife or Frankfurtkf 30 birds Brussels Kieve mother PraguePraP 35 33 34 35 36 65 Son of Adam and Eve 28 Early crossword Paris Munichih ViennaV 37 38 Warm 66 Talk Like a Pirate clues ended with Geneva Budapest 39 40 Day address them Cold Milan Down 31 Part of GE Bucharesth 41 42 43 44 45 46 47 Stationary 1 Shortening name 34 Disturbingly 48 49 50 51 2 Furniture plant sinister Showers 35 Still upset Rome Istanbultb 3 Calm the nerves 52 53 54 55 37 Hair piece? Madridd id Rain of 38 So mad LisbonL b 56 57 58 59 60 4 Fundraising org. T-storms 39 Pond ponderer 61 62 63 5 Weasel’s cousin AlgiersAl i AthensAth 41 Plot shocks TunisT i Snow 6 Company in the 64 65 66 DJIA 42 They have jibs Flurries Rabatb 7 Reverential 45 Prove more SEQUENCE OF EVENTS | By Matt Gaffney respect gluttonous than Ice 8 Color of irises, 46 Default Global Forecasts Today Tomorrow Today Tomorrow The answer to 20 Sutcliffe of the 40 Singer with the City Hi Lo W Hi Lo W City Hi Lo W Hi Lo W for some 47 Rick of s...sunny; pc... partly cloudy; c...cloudy; sh...showers; this week’s contest early Beatles first million- 9 Crow known for “rickrolling” Geneva 21 13 t 24 13 s Ottawa 32 18 t 28 15 sh crossword is one selling record t...t’storms; r...rain; sf...snow flurries; sn...snow; i...ice Hanoi 33 25 t 34 26 t Paris 24 13 pc 24 13 s 21 Not strict making beautiful 49 Luminous Havana 33 22 pc 34 23 pc Philadelphia 29 23 s 32 21 t of the sports being 22 Slice of history 41 Yahtzee sounds radiations Today Tomorrow Hong Kong 32 29 t 33 29 t Phoenix 40 30 s 41 29 s contested at the category City Hi Lo W Hi Lo W 24 Brother on 10 Like some 51 Cook carrots, Honolulu 31 25 pc 31 25 pc Pittsburgh 31 22 pc 29 16 pc Rio 2016 Games. 43 LBJ or RFK Amsterdam 21 14 pc 21 14 t Houston 35 25 t 37 25 t Port-au-Prince 37 22 pc 36 23 pc TV’s “Empire” airplane maybe Anchorage 18 14 r 18 13 r Istanbul 32 25 s 32 25 s Portland, Ore. 27 13 pc 26 14 pc Across 25 Hurtle 44 TV title explorer bathrooms 54 Crux ansata, or Athens 34 25 s 35 25 s Jakarta 32 22 s 32 24 pc Rio de Janeiro 28 20 s 29 22 s 1 Game with 27 With 48-Across, 48 ...or, if a letter is 11 Extravagant “cross with a Atlanta 32 23 t 33 23 t Johannesburg 19 3 s 22 4 s Riyadh 45 29 s 44 30 s “boxcars” handle” Baghdad 48 29 s 47 29 s Kansas City 27 18 pc 24 18 pc Rome 29 20 s 29 20 t what this puzzle nudged over, a 12 Locally ___ Baltimore 29 22 pc 32 20 t Las Vegas 37 27 s 39 26 s Salt Lake City 33 22 pc 34 22 t 6 Sounds from features... hint to the (like some 57 Joined the jury Bangkok 33 26 t 32 26 t Lima 22 16 pc 22 16 pc San Diego 24 19 pc 24 18 pc the amazed 29 Tipping bills contest answer restaurant 59 Auction items, Beijing 32 25 pc 34 24 pc London 23 13 pc 24 15 pc San Francisco 21 13 pc 20 13 pc 10 Semicircular 50 Problems produce) often Berlin 21 13 r 20 12 t Los Angeles 27 17 pc 27 16 pc San Juan 30 26 pc 30 26 pc 30 Film frame Bogota 20 9 r 20 9 r Madrid 34 19 s 36 19 s Santiago 17 2 s 19 4 s section 32 Serfs’ superiors 52 Extreme anger 13 Path out 60 Kissing on the Boise 35 17 pc 34 16 s Manila 32 26 t 32 27 t Santo Domingo 31 24 t 31 24 pc 14 Believer in Jah 33 Gives a talking-to 53 Person reading 18 Bitterness street, e.g. Boston 29 20 s 30 21 t Melbourne 15 6 pc 13 6 c Sao Paulo 26 16 pc 28 17 pc 15 Air kiss sound this clue Brussels 22 12 pc 21 12 pc Mexico City 22 14 t 20 14 t Seattle 26 13 pc 23 13 pc 36 U. donor, often Previous Puzzle’s Solution 54 Drone or queen Buenos Aires 17 6 pc 16 4 s Miami 33 26 pc 33 26 pc Seoul 34 24 s 34 25 s 16 Green jumper 37 Crude HUMAN S K EWS MAA Cairo 37 26 s 37 25 s Milan 26 14 t 29 16 s Shanghai 34 26 t 34 28 t 17 “You’ll have no measurement 55 Powerful AGILE PIXIE ACH Calgary 25 11 t 21 11 t Minneapolis 27 16 s 27 17 s Singapore 31 26 pc 31 26 pc trouble at all!” palindrome THROWSATANT RUM Caracas 31 25 pc 31 25 pc Monterrey 37 21 s 36 21 pc Stockholm 23 13 t 22 13 t 39 Diggs of “The HEW EMS MEME 19 Go from city to Best Man 56 Mathematical SAFAR I S STA I NED Charlotte 30 22 t 32 22 t Montreal 32 20 t 27 16 pc Sydney 1610sh1710pc ERRS NOW ORSON Chicago 29 18 t 27 17 s Moscow 26 17 pc 29 17 pc Taipei 34 29 t 34 26 t city Holiday” groups ALE CGUINNESS

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‘If you look for perfection, you’ll never be content.’ —Leo Tolstoy

The End of the Perfect 10 By Dvora Meyers LEAPS AND BOUNDS Simon & Schuster, 319 pages, £19.63 Simone Biles at the U.S. Olympic gymnastics BY PATRICK COOKE trials in early July.

ONE OF THE most remarkable mo- ments of the 1976 summer Olympics was the 90 seconds it took for a 14- year-old Romanian gymnast to change her sport. Although the judges at Montreal would see the same com- pulsory uneven-bars routine 86 times, only the 4-foot-11, 80-pound Nadia Comaneci would turn in a maximum score of 10—a “Perfect 10”—breaking a mystical barrier. She was the first but far from the last. Between 1976 and 1992, in a parade of pixies that would include Nellie Kim, Yelena Davydova and Kerri Strug, 10s would be awarded in international competi- tion more than 100 times. The paradox, as journalist and former gymnast Dvora Meyers notes in her delightful and insightful study “The End of the Perfect 10,” is that there is no such thing as a perfect performance. Upon further review, Raising the Bar even Ms. Comaneci’s breathtaking routine reveals imperfections. Still,

the crowd ate it up. From that day GETTY IMAGES forward, the more 10s the judges handed out, the more popular the skill, but it came with unforeseen 10 system pleased the public: “Ev- opment centers, serve as a farm sys- talented girl does make the cut, her sport became. consequences. eryone understood that the closer a tem for Olympic gymnastics. As a career is likely to have, as the author The Perfect 10 was catnip to or- For the sake of difficulty points, gymnast scored to 10, the better he backdrop to the Perfect 10 history, notes, a “fruit-fly lifespan.” Less tal- ganizers and soon emerged as a coaches began cramming more dar- or she performed.” she also introduces us to athletes, ented collegiate gymnasts at least branding tool. By the 1988 summer ing stunts into their gymnasts’ 90- While scoring in elite gymnastics judges and trainers, including the have a shot at a scholarship and, it games in Seoul, however, the bar for second routines—and started seeing events like the Olympics continues to mercurial coach Bela Karolyi, who seems, a lot more fun. Either way, the top score was so low that even more injuries. More risk-taking meant vex outsiders, Ms. Meyers tells us that guided Ms. Comaneci to her Olympic many gymnasts, post-competition, casual observers were beginning to more excitement, but it required at the college level 10 remains the triumph, and his wife, Martha. She is limp into retirement. Others may take notice. As one Sports Illus- more strength, which in turn re- measure of success. Marks are based “sign contracts with Cirque du Soleil trated reporter wrote: “A total of 40 quired more muscle. Soon the sylphs on elements like proficiency, brio and or move to Hollywood and get into ‘Perfect 10s’ were awarded to four- of the Comaneci era were replaced by heart. It doesn’t hurt that a few NCAA As difficulty became part stunt work.” teen gymnasts during the week, a new body type able to perform ex- universities known for the sport are Ms. Meyers spends a good deal of many for performances containing plosive routines in every event. Mens’ enticing spectators to arenas with of scoring, a new body time in gyms across the county flaws that could be spotted from coaches were brought in to tutor a flashing lights and thumping music type replaced the sylphs of observing long hours of practice. She thirty-five rows back in the Olympic new generation of girls in an increas- akin to an NBA game opener. has a prime seat for observing young Gymnastics Hall.” ingly brawny version of the sport Ms. Meyers describes LSU gym- the Nadia Comaneci era. hopefuls like those at a training cen- By then, the judging process had that continues today. Ms. Meyers ob- nast Lloimincia Hall’s 2014 crowd- ter outside Dallas called Texas become outdated. For years gymnasts serves that the current U.S. female pleasing routine set to a medley of Dreams: “In a gym, the chalk tray is had received marks based on artistic superstar Simone Biles can (nearly) funk and gospel music. The perfor- respectful of the talents that the like the office water cooler—a place presentation, but some routines were complete a double somersault from a mance earned a 10 because “it couple has brought to American where everyone gathers at some far more difficult than others. Bold complete standstill—“no run, no hur- wasn’t about scrutinizing every skill gymnastics since their defection point during the workout to chat. . . . competitors who tried to test the dle, no round-off, no momentum.” for flaws but about the overall im- from Romania in 1981, but the reader The rougher your practice seemed to limits of the sport risked losing to Try that in your backyard. pression of the routine...theswag- is left with the impression that her be going, the more time you needed safer, duller opponents. Giving crowds There was yet another conse- ger of her choreography, and the praise for “Coach Dracula,” as he is at the chalk bowl to talk and collect Perfect 10s was no longer enough. quence that came with the new judg- crowd’s excitement.” Elite, Olympics- known, is rather faint. yourself for your next attempt.” The sport needed a method of scoring ing rules: They confused fans. “Now level gymnasts, Ms. Meyers writes, The path to the Olympics can be- For these girls, every move will that accounted for the diversity of the gymnasts were receiving marks aim at “pushing the envelope on in- gin as early as grade school for some eventually be scrutinized by panels routines and leveled the playing field like 13.667 or 14.825,” Ms. Meyers novation and difficulty.” College girls. “Female gymnasts peak younger of fallible arbiters in a system that for all competitors. writes, “and you had no way of gymnasts emphasize “execution and than athletes in other sports do, typi- is, by its nature, flawed. As one gym- In 2006, the governing body of knowing if these were good or bad team performance.” cally before they get to university,” nastics judge tells Ms. Meyers: “You women’s gymnastics adopted a new scores.” A competitor who put in Ms. Meyers is aware that many Ms. Meyers writes. Their sometimes make mistakes because you’re hu- scoring system, devised by a Cana- what appeared to be a sloppy perfor- readers would score a Perfect 0 in lonely world becomes one of exhaust- man....Itseems in that respect, the dian judge named Hardy Fink. It mance, perhaps even falling off an gymnastics knowledge, so she offers ing travel, constant training, home athletes and judges have something would be based on two scores, one apparatus, might win an event be- explanations of arcane aspects of the schooling, ligament injuries and high in common. Neither can be perfect.” for precision and execution, the cause of the attempted level of diffi- sport. The uninitiated would be parental expectations. The odds of other for degree of difficulty. That culty. One coach noted that, despite unlikely to know, for example, that achieving the elite level are infinitesi- Mr. Cooke writes frequently for scheme provided a fairer measure of the scoring inflation it entailed, the nationwide “devo camps,” or devel- mally small, and even if a hyper- Weekend Journal. Five-Ring Circus decades to instill the quadrennial cel- ern” Olympic Games began, just nine a precursor of Greece’s near-bank- Games of 1972 did the committee set The Games ebration with two fundamental te- men (but not a single woman) have ruptcy less than a decade later. The up measures to trap those athletes By David Goldblatt nets: amateurism and international- presided over the IOC. Apart from history of the Games is fraught with using illegal substances. As recent Macmillan, 516 pages, £20 ism. Jim Thorpe, for example, was De Coubertin, who remained an hon- such profligate expenditure. Mr. revelations about tainted urine sam- stripped of the medals he had won at orary president until his death in Goldblatt cites the example of Mon- ples from Beijing (2008) and London BY PETER COWIE the Stockholm Olympics of 1912 be- 1937, the three most autocratic treal’s 1976 Olympic Village, initially (2012) demonstrate, however, doping cause he had been paid to play base- “lords of the rings” (to quote a priced at $22 million and costing in continues to haunt the Games. Many ball on occasion some years earlier. phrase coined by Andrew Jennings, the end some $80 million. And long Russian athletes, accused of doping OFTEN DISPARAGED, even mocked, More than a century after the re- whose book about the seamy side of before the 2000 Games opened, Mr. under what amounted to a state-en- the Olympic Games still lumber for- vival of the Games, it’s clear that the the Olympics was published in 1992) Goldblatt writes, it was “very judi- couraged program, will not be al- ward like a colossus, claiming wider baron succeeded in making them dominated the IOC for the most cru- cious gift giving” that helped Sydney lowed to compete in Rio next month. media attention than any other into a global bonanza; the number of cial period in Olympic history win the right to host. Why, then, do the Olympic Games sporting event in the world. As Da- nations on parade at each successive continue to hold such appeal? An ac- vid Goldblatt underlines in his com- Olympiad seems, like the universe, cumulation of small but significant prehensive survey, “The Games: A to be forever expanding. His ama- details may offer the answer: the Global History of the Olympics,” the teur ideals, however, have long per- torch relay, spanning continents and numbers boggle the mind: more than ished. Today’s spectators and offi- involving countless communities; the 200 participating countries, an cialdom accept that the athletes on “togetherness” of the Olympic Vil- opening ceremony that has cost as display at the Olympics are well and lage; the pomp of the parade of na- much as $100 million (for Beijing in truly “professional.” tions; the solemnity of the medal 2008), and up to 28,000 press and ceremonies; even the commemora- media representatives. tive postage stamps issued by nu- Like Napoleon or World War II, the Not until 1972 did the merous countries. Olympics have spawned a vast array For the sociologist and the econo- of books, and the sports fan wanting Olympic committee set up mist, Mr. Goldblatt’s analysis pro- to read in detail about individual ath- measures to catch athletes vides fascinating reading; perhaps letes or their achievements will turn less so for the sports fan pure and to David Miller’s “The Official History using illegal substances. simple. His book may cover ground of the Olympic Games and the IOC” already well-tilled by previous au- (2012). Mr. Goldblatt does not ignore thors, but this one sets each Olym- such legendary figures as Paavo Mr. Goldblatt traces the develop- piad in a wider international and po- Nurmi, Jesse Owens, Emil Zatopek, ment of the Games in every respect, litical context, with the issues of race

Carl Lewis or Usain Bolt, but his fo- from the launch of a Winter Olympiad GETTY IMAGES and gender frequently to the fore. cus lies elsewhere. The word “offi- in 1924 to the efforts to give women Mr. Goldblatt shows that, despite the cial” would be anathema to him, an equal place in every sport, from (1950-2000): the American plutocrat The advent of television trans- profound upheavals that the Games however, and from his independent the introduction of the Paralympics Avery Brundage; the Irish aristocrat formed the financial infrastructure have experienced over the past cen- standpoint he can offer some pene- (which sold no fewer than 2.5 million Lord Killanin; and the Spanish mar- of the Games. Live satellite broad- tury and more, their quadrennial trating, often waspish, criticisms of tickets in London in 2012) to the rise quis Juan Antonio Samaranch. casting began at the Tokyo Olympiad jamboree continues to thrill and both the International Olympic Com- of the Olympic “Village.” He reminds The author’s detailed research of 1964, and soon U.S. networks were amaze each new generation. Were he mittee and the powerful individuals us that some sports, such as track into the political and financial she- bidding ever-larger sums for the TV alive today, Baron de Coubertin who, in essence, control the Games. and field, gymnastics, boxing, wres- nanigans of the modern Olympics is rights. This year the IOC awarded would be baffled by the corporate The romantic and emotional tone tling and swimming, have remained in impressive. Budgets have ballooned rights from 2021 through 2032 to maneuvering and the doping scan- of the Games stems from their origins vogue from 1896 to the present day, out of control. The final bill for the NBCUniversal for the staggering sum dals, but he would be proud that his as a five-day program of events in an- while others have lingered almost by London Games of 2012 reached just of $7.65 billion. re-creation of a Greek tradition cient Greece beginning in 776 B.C. A default. Soccer, for example, which under £9 billion, almost four times Drug-enhanced performances should have inspired a book as can- millennium and a half after their de- now has its own World Cup, struggles the cost proposed in the bid docu- have marred the Olympics with de- did and richly researched as this mise in A.D. 393, the Baron de Cou- to attract much interest at the Games. ments of 2005. Vladimir Putin’s Rus- pressing regularity, as they have one. bertin, a French aristocrat, brought The modern pentathlon, too, seems sian state squandered $51 billion on other sports, from cycling to soccer, about their reincarnation in 1896. He obsolete when the more popular tri- the 2014 Winter Games in Sochi. The and even golf. The IOC first became Mr. Cowie is a film historian who admired the English “public school athlon is staged alongside it. exorbitant $16 billion devoted to the alarmed by “doping” during the has also published annuals on spirit” of fair play, and he toiled for In the 120 years since the “mod- 2004 Olympiad by Athens seems like 1930s, but not until the Munich cycling and track and field. For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com A12 | Friday - Sunday, August 5 - 7, 2016 THE WALL STREET JOURNAL. BOOKS

‘While other passions in your life may at some point begin to bank their fires, the shared happiness of good homemade food can last as long as we do.’ —Marcella Hazan Playing the Market

Ingredienti By Marcella Hazan & Victor Hazan Scribner, 238 pages, £15.19

BY EUGENIA BONE

THERE ARE A LOT of vegetarians in the United States. According to Gal- lup, about 5% of American adults em- brace the label. That’s around 11 mil- lion people. Yet our vegetable literacy, despite the best efforts of many fine cookbook writers, is probably pretty low. Our most popular vegetable, re- ported the Atlantic, is the potato. In- deed, a pretty good sense of Amer- ica’s preferences may come from a site called Ranker, which lists pota- toes, sweet corn and carrots as Amer- ica’s top three vegetables, none of which, by the way, are green. After reading the late Marcella Hazan’s new and, I assume, final book, “Ingredienti,” I am not sure it’s our fault. The way that shopping and preparing vegetables have evolved in our culture discourages us from a vegetable-first diet, and that’s a shame, because it doesn’t have to be so. Marcella Hazan, who died in 2013 at 89, is credited with changing how Americans cook Italian food. She dis- placed the heavy spaghetti-and- meatballs paradigm with dishes that

are light and sophisticated and, DENNIS STOCK/MAGNUM PHOTOS frankly, more authentic. Brought to THE ROOT A truckload of fresh vegetables headed for market in Palermo, Sicily. publication by her widower, Victor, “Ingredienti” is a simple, modest us couldn’t even write a simple list. Marcella Hazan doesn’t bother carrots with their tops are all tarian is healthier—if you eat vegeta- summary of how to choose, prep and Why not? We certainly want to eat with actual recipes in “Ingredienti.” washed. And nothing, ever, has a bles the way Italians do. The market- store a small selection of Italian veg- more vegetables. But we don’t, and I She just mentions methods for cook- sticker on it. stall model of eating, with its limited etables. It also includes recommen- think that’s because we have to work ing her preferred vegetables: mashed Italian vendors prep vegetables all but very fresh selection, means that dations on various pantry items, like so hard to get them. fava beans with milk-soaked bread day. But this is not like the prepack- you eat a great deal of seasonal veg- beans, tuna fish and olive oil. It’s the Most Americans shop in grocery and olive oil; raw sliced radicchio aged stir-fry available at Whole etables while they are in and at opti- antithesis of encyclopedic books like stores where foods are packaged or leaves mixed with warm cannellini mal nutrition and then move on to Mark Bittman’s 1,000-page “How to feel waxy and have no smell. We beans; fresh peas braised with shred- the next food as it, in turn, becomes Cook Everything Vegetarian.” But it can’t sample what we buy, and so we ded romaine and sliced onion—all In Italy, home cooks don’t cheap and plentiful. Forget the daily got me thinking. have to base our decisions on the cooked with olive oil, lemon juice recommended values of the federal The vegetables described in way the food looks. That’s a problem and salt. She doesn’t have to give a have to know how to chop government: A year of seasonal “Ingredienti” represent foods that for flavor, because sometimes when recipe because there isn’t much to or shred. Vegetables are bingeing engenders a varied diet that Marcella regularly cooked, and her a vegetable or fruit is bred for ap- do: The real skill is in finding pris- maximizes nutritional gain. knowledge was based on the trial pearance or shelf stability, you end tine ingredients. all prepared by the vendor. At the time I’m writing this, I’ve and error of shopping, storing and up losing taste. Take commercial Reading “Ingredienti” reminded been gorging on local sugar snaps home preparation. She tells us that strawberries. They are huge and look me of another challenge that Ameri- and English peas from the farmer’s eggplant is less sweet when cut into awesome, but they’re about as sweet cans face that Italians traditionally Foods. Urban Italians can hit the mar- market (the snap peas julienned and chunks and sautéed but best baked as a turnip. don’t. Not only do we need to be ket stalls on their way home, buy just tossed raw with boiled English peas, whole or sliced and fried; that a Ingredient-based cookery is what discerning at the market, we also what they need for a night or two, olive oil, lemon juice, parmesan radicchio di Chiggia the size of a made Marcella Hazan famous, and need decent prep skills. In Italy, by and prepare dinner without a lot of cheese and a few cranks of black large orange is a sign that some of it’s typical of Italian cooking in gen- contrast, home cooks don’t have to fuss. At the end of the day the Italian pepper). By the time the peas are its leaves have been removed and eral and (I am going to guess) all know how to trim or slice, or chop street markets leave behind piles of done—which should be pretty soon— that it is no longer quite fresh; that ethnic cuisines when looked at in or shred, a particular ingredient. outer leaves, peels and stems and the I will be more than ready to move on grated cheese dries out in the fridge; their indigenous context. Any chef The seasonal vegetables sold in tips and ends of vegetables. I’m not to another vegetable. A full year will and that blistered, peeled red pep- will tell you that selecting and prep- marketplaces are prepared for the talking about unholy mounds of im- go by before I eat fresh peas again. pers are best at room temperature. ping food is half of cooking. Really, kitchen by the vendor. Farm-fresh perfect foods that are otherwise fine But come early July 2017, I’ll be crav- We should all be able to write you only need to be a good cook if artichokes are trimmed, ready to to eat, like those chucked by grocery ing them. such a book, one that reflects our you start out with inferior ingredi- braise or fry; asparagus are peeled; stores and farms. Rather this is the particular kitchens: the foods avail- ents. That’s the philosophy behind cipollini are skinned; cauliflower debris of a hundred dinners. Shopping Ms. Bone is the author of able in our region, the foods we the recipes in Marcella’s books: If a and broccoli are cut into flower- for food in Italy is the opposite of the “Mycophilia” and “The Kitchen know how to cook, the foods we eat food tastes marvelous raw, the cook- ettes; peas are removed from their Costco experience. It’s personal. Ecosystem: Integrating Recipes most often. But I’ll bet that most of ing part is easy. pods; beets with their greens and And nourishing, too. Eating vege- to Create Delicious Meals.”

FICTION CHRONICLE: SAM SACKS Inverting the War Novel ROY SCRANTON’S In writing about al-Zabadi, Mr. ous veteran at the cookout, who vis- of murders, drinks enough vodka to translation is by Lola Rogers): “A cat- “War Porn” (Soho, Scranton imagines the start of the its the evils of the occupation upon fill Lake Baikal and declaims cher- erpillar-tracked truck extinguished in 343 pages, £19.63) fighting as it appears to average his unsuspecting suburban hosts. ished maxims such as “Beat your a pile of snow, a horse wading arrives on the crest Iraqis, who watch the American air- “War Porn” concludes in an act of wife with a hammer and you turn her through a field, its back sagging like of a second wave of strikes both on TV and from their chilling brutality, a distillation of Mr. into gold.” an old sofa, pulling a feed rack behind fiction about the roofs. A strain of casual fatalism runs Scranton’s vision of the American In the vilest of terms, Ivanov first it with two buzzards balanced there wars in Iraq and Afghanistan. The through these people, who have en- misadventure in Iraq and a fitting propositions and then threatens the instead of hay, stiff with cold, their first wave, typified by Kevin Powers’s dured a lifetime of war, sanctions and end to one of the best and most dis- woman. She dumps nail polish into legs tied together.” “The Yellow Birds” (2012) and Phil dictatorial abuse: “There has to be a turbing war novels in years. his vodka glass, hoping to poison What emerges is a twilight-hued Klay’s “Redeployment” (2014), con- sheikh. Sheikh Hussein or Sheikh elegy to the sickly last days of a centrated on the psychic damage suf- Bush, it didn’t matter,” thinks a stu- wicked empire. Toward the end of fered by soldiers hurled into haphaz- dent of al-Zabadi’s. “Power flowed the their journey, Ivanov and the woman ardly planned “forever wars.” But as same no matter who wielded it. And raise their glasses to the country this story line hardened into a cli- if you weren’t on the side of power, they’ve seen so much of. “A toast to ché—what Mr. Scranton, who was de- you got out of the way.” deception,” he says. “May we be de- ployed in Iraq for 14 months, has ceived in a better direction.” called the “trauma hero myth”—nov- Lara Vapnyar’s “Still Here” (Hog- elists looked for more provocative an- arth, 310 pages, £19.63) tells the gles and approaches: Harry Parker’s ‘There has to be a sheikh. story of four Russian friends who “Anatomy of a Soldier,” for instance, Sheikh Hussein or Sheikh have left the motherland for New is told from the point of view of the York City: Vadik is a computer pro- equipment a soldier carries into bat- Bush, it didn’t matter.’ grammer and serial online dater; Re- tle and Whitney Terrell’s “The Good gina lives in a gilded Tribeca cage Lieutenant” moves backwards in time. with her tech-millionaire husband; “War Porn” inverts the traditional Al-Zabadi’s story is the tragedy of and Sergey and Vica endure marital war novel, both structurally and a harmless man who fails to get out unhappiness in a Staten Island house morally. It consists of three nested of the way. The Americans, in con- they can’t afford. The couple have plots, the centerpiece of which con- trast, are destroyed by the terrible banked their future on an app called cerns Iraqi mathematics professor powers they suddenly wield. The frac- Virtual Grave that will allow people

Qasim al-Zabadi. He teaches in Bagh- tured, spastically written chapters GETTY IMAGES to maintain an online presence after dad but his family resides outside about Wilson describe the fear and PALL Baghdad in the first days of the 2003 invasion. death. “You immigrants think of apps the capital, and, as the American in- rage of the soldiers, the humiliations as the new gold rush,” Regina’s hus- vasion looms, he’s torn between they hourly inflict on a conquered In Finnish novelist Rosa Liksom’s him. (He drinks it with no ill effect.) band says. staying where he is or traveling to be people and their disregard for the in- “Compartment No. 6” (Graywolf, But gradually, strangely, the two The apps and nonstop social media with them. Then there’s the question nocents caught under their tread. 181 pages, $16), a man and a woman forge an alliance, sharing meals and updates are new, but otherwise “Still of putting up token resistance or aid- Each day rotates between fast food, are forced to share a sleeping com- tea, and exploring the incomparably Here” is a brisk and amusing reboot of ing the invaders. A second narrative videogames and indiscriminate vio- partment during a weekslong railway desolate cities—Novosibirsk, Irkutsk, the familiar immigrant tale. Culture describes the first year of the war lence: “Burger King, daisy-chain. Cor- journey from Moscow to Mongolia in Khabarovsk—where the train stops clashes, loneliness and mishaps in love through the eyes of an enlisted man don and Search. Stack team. There’s a the mid-1980s. The unnamed young during its interminable layovers. and work fill the foursome’s days. Ms. named Wilson. The third cuts back to glazed shock in everyone’s eyes, the woman, an anthropology student, Ms. Liksom conjures beauty from Vapnyar throws in a bit of existential Utah, where a backyard cookout in simmer of hatred barely contained. wants to see the petroglyphs outside the ugliest of things. As she finds dread for spice. The novel jumps along 2004 is darkened by the appearance We get in fistfights. We listen to ‘Hey Ulan Bator, though she’s also fleeing something wily and comical in the un- episodically toward its implausible of a belligerent veteran. The loosely Ya!’ and count the dead.” a messy love triangle. The man, forgettably horrible Ivanov, so she im- happy ending, a little in the way of a connected stories bring out terrible The final product of their dehu- Vadim Nikolayevich Ivanov, is travel- bues the industrial wastelands with TV series. Think “Friends” with a oppositions. manization is found in the mysteri- ing for construction work. He boasts an inexplicable charm (the elegant heavy Russian accent. For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com THE WALL STREET JOURNAL. Friday - Sunday, August 5 - 7, 2016 | A13 BOOKS

‘To win the people, always cook them some savoury that pleases them.’ —Aristophanes The People’s Republic toons billboards everywhere as one The Dictator’s Dilemma of Mr. Xi’s 12 Core Socialist Values— By Bruce J. Dickson and reports what respondents them- Oxford, 352 pages, £18.99 selves said they believed democracy to mean. He notes that few spoke of BY BENJAMIN L. READ elections or used phrases like “ev- erybody votes” or “majority rules,” while many gave answers like “listen THE CONVENTIONAL VIEW of to the people” and “government pol- China, according to Bruce J. Dickson, icies reflect public opinion”—criteria goes something like this: China’s po- that China meets, up to a point. Hav- litical system is unchanging and in- ing also been told by many ordinary flexible, and “the Chinese people are citizens during my fieldwork that fed up with the Party, impatient for reform, and ready for democracy.” Not so, argues Mr. Dickson, a profes- The Western press insists sor of political science at George Washington University. that the Chinese people In fact, the Chinese people gen- are ready for democracy. erally support their political sys- tem—at least for the time being. So why does the regime Why is this the case? And how has continue to enjoy the country avoided the fate of the Soviet Union? Mr. Dickson ad- popular support? dresses these questions in “The Dic- tator’s Dilemma: The Chinese Com- munist Party’s Strategy for the country today is far more “dem- Survival” by examining the ruling ocratic” than in the past, I appreci- party’s program and by drawing on ated the book’s effort to take us into recent surveys and focus groups to the fog surrounding this nebulous discern how ordinary Chinese from term, even if the survey data don’t cities across the country feel about take us all the way out. their current political system and Many readers may ask if survey its policy outcomes. respondents gave researchers truth-

The party’s strategy, Mr. Dickson GETTY IMAGES ful or merely politically safe an- writes, is “a mix of repression, legiti- BREAD AND CIRCUSES Shopping in Shanghai. swers. Mr. Dickson offers an abbre- mation, and co-optation.” The repres- viated defense of his methods, sion has various flavors, which he mented by Peking University’s well- alty. But policies that garner support that demonstrations, “multiple po- emphasizing that correlations in catalogs in some detail, from arrests respected public-opinion center. In in the short term may undermine litical parties” and even “many the data follow predictable pat- of activists and lawyers to filtering the 2010 version, researchers con- stability in the long term, as Mr. groups with different points of terns, bolstering their validity. En- the internet. All of this has gotten ducted face-to-face interviews with Dickson explains. Greater prosperity view” could dangerously threaten couragingly, respondents do not worse since President Xi Jinping took 3,874 randomly selected people in could breed discontentment and de- social stability. On this topic and always spout party-approved an- the reins in 2012–13. 50 cities around the country; the mands for accountability, openness others, one wonders whether it is swers; only 36% said that govern- But if repression were the pri- 2014 version reached 4,128 respon- and representation. possible to separate, as the book ment officials normally tell the mary experience of the Chinese peo- dents. Both of these surveys found Hints of this can already be seen: tries to, the ruling party’s informa- truth, and around 70% of younger ple, the regime wouldn’t enjoy popu- widespread support for and trust in Younger survey respondents showed tion control from its efforts to build party members were willing to state lar support. Mr. Dickson highlights the regime’s core institutions. less loyalty than older ones, suggest- support. After all, as Mr. Dickson that careerist motivations (and not what the party has done to win the Trust in the central party and gov- ing that generational replacement acknowledges, one reason that sur- merely a passion for serving the hearts and minds of the people: rais- ernment averaged between 7.5 and may erode regime support. Also, vey respondents express great faith people) were among their top three ing incomes (not merely growth 8 on a 0-10 scale, for example. The while few indicated that internet in the regime’s central institutions reasons for joining. One unex- rates) by promoting economic devel- book also reports respondents’ as- censorship offended them, nearly is that critical reporting on top plained limitation: Although the opment; implementing modest polit- sessments of specific areas of pub- 90% stated that web controls should leaders is forbidden. book speaks broadly about the be- ical reforms at the local level; pro- lic policy. The majority of those not “infring[e] on individual free- One point likely to surprise read- liefs of “the Chinese people,” “pub- viding increased access to education, surveyed—75%—said that they doms or the right to free expres- ers is that “most Chinese believe lic opinion in China” and such, the health care and other public goods; were satisfied with their local gov- sion.” Fears that an empowered pop- that their country already has a high surveys covered cities only, omit- appealing to national pride; and ernment’s efforts on education and ulation will eventually demand level of democracy, are satisfied with ting the still-huge rural population. bringing into the party’s ranks many social order. (Only half said the political change can make authori- the quality of current democracy, members of the wealthy and the same about food safety, a topic of tarian regimes reluctant to liberal- and are optimistic about further in- Mr. Read, an associate professor well-educated classes. intense concern.) ize—hence the “dilemma” of the creases in democracy in the near fu- of politics at the University of It seems to have worked. The Mr. Dickson offers one caveat to book’s title. ture.” To make sense of this, Mr. California, Santa Cruz, is the author book’s primary evidence for this his generally optimistic view about Currently, a widespread fear of Dickson reviews the ways in which of “Roots of the State: Neighbor- claim comes from two surveys de- the future of the party. Yes, many of chaos buttresses the party’s rule. leaders and intellectuals use the hood Organization and Social signed by Mr. Dickson and imple- its current policies are winning loy- The majority of respondents felt term “democracy”—a word that fes- Networks in Beijing and Taipei.” On the Front Lines of the Cold War as a transformative figure who ele- forces covered by separate talks. The portant foreign-policy achievement, away from the east in Hamburg, ap- The Global Chancellor vated West Germany to the “top issue became acute after the Soviet it also led to his downfall. He faced parently also had little interest in By Kristina Spohr table” of international politics. Union began to replace its medium- increasing opposition from within German reunification—the whole Oxford, 211 pages, £35 Though the book is based on a vari- range nuclear weapons with new his own dovish and increasingly point of Ostpolitik. ety of sources, including U.S. gov- SS-20 missiles that directly threat- anti-American party, which was de- It was in the context of discus- BY HANS KUNDNANI ernment archives, it is written ened Western Europe and in particu- termined to continue détente—even sions around deterrence strategy largely from Schmidt’s perspective lar Germany. From a West German after the Soviet invasion of Afghani- that the relationship between and, as these quotations illustrate, perspective, the U.S. nuclear deter- stan (which Schmidt himself refused Schmidt and President Jimmy Carter IT IS OFTEN said that Helmut is a little hagiographic. rent no longer looked credible. to call an “invasion”). deteriorated. Ms. Spohr recognizes Schmidt lacked vision—particularly The strength of the book is the that Schmidt lost his cool in his in comparison with his predecessor, way it illuminates Schmidt’s thinking dealings with the president, whom Willy Brandt, West Germany’s ver- on both economic and strategic he regarded with contempt (he had sion of JFK. It was an image that questions and the relationship be- publicly endorsed Gerald Ford in the Schmidt, who died last year at 96, tween them. His first priority was to 1976 election), but puts this down to himself did much to create—above stabilize the global economy: When his frustration at Mr. Carter’s unreli- all, through his quip that “those who ability. Yet Mr. Carter also saw have visions should go see a doctor.” Schmidt as being inconsistent. He In this respect, he resembles Angela What is remarkable in wrote in his memoirs that Schmidt Merkel, who quoted the famous had “mood swings” and that his con- Schmidt line in a eulogy she gave at retrospect is how hawkish stant leaked criticisms of the U.S. his funeral. Schmidt was for a West government were “legitimizing” Schmidt’s prosaic approach to anti-Americanism in Germany. politics was in part a necessity. German chancellor. The bigger question concerns the When he took over as the second So- policy differences between Mr. cial Democrat chancellor of the Fed- Carter and Schmidt. Like Mr. Kissin- eral Republic of Germany in 1974— he became chancellor, inflation was ger, Schmidt saw Mr. Carter’s preoc- after it emerged that one of Brandt’s at 6% in West Germany, 9% in the cupation with human rights in the closest aides was an East German United States and 20% in the United Soviet Union as a dangerous distrac- spy—the world was in crisis after Kingdom. Schmidt, who had been fi- tion. Yet there were real dangers in the collapse of the Bretton Woods nance minister under Brandt, be- détente—particularly during the

system and the oil shock of 1973. lieved that the West needed to take GETTY IMAGES “second phase” of Ostpolitik under West Germany could no longer af- coordinated action to prevent a cata- A PAIR OF CHANCELLORS Willy Brandt and Helmut Schmidt in 1977. Schmidt. What the German historian ford the expansive reform program strophic breakdown of the kind that Heinrich August Winkler has called that Brandt had promised when he had happened in the 1930s. What is remarkable in retrospect Ms. Spohr barely mentions the the “normative deficit” of this ap- became the first Social Democrat It was out of the economic sum- is not just how engaged Schmidt was growing rift between Brandt, who proach—its indifference to democ- chancellor in 1969. Instead, the focus mit that took place at Rambouillet, with the detail of deterrence theory remained party leader, and Schmidt. racy and human rights—was illus- was on stability. France, in 1975, initiated by Schmidt but also how hawkish he was for a She spends more time on the ten- trated when the Solidarity movement Nevertheless, Kristina Spohr ar- and French President Valéry Giscard German chancellor. It was through sions between Schmidt and Egon emerged in Poland, only to be seen gues in “The Global Chancellor,” the D’Estaing, that the Group of Seven Schmidt’s activism—beginning with Bahr—an adviser to Brandt who was by realist German Social Democrats image we have of Schmidt is wrong. evolved. It is striking how similar a lecture he gave in London in the architect of the policy of Ostpoli- as a threat to “stability.” In fact, she suggests, he did have a vi- the points of disagreement between 1977—that NATO, over the next two tik, the West German policy of dé- Ms. Spohr seems to take at face sion. According to her, Schmidt was, the Federal Republic and the United years, came to adapt its strategy to tente toward East Germany—but value Schmidt’s image of himself as like Henry Kissinger, a “sophisticated States in the 1970s were to the ones respond to the new threat. In De- perhaps oversimplifies the difference a “double interpreter” between conceptual thinker” but, unlike Mr. that exist today: Then, as now, Ger- cember 1979, the alliance agreed to between them by endorsing Washington and Moscow after Kissinger, understood economic as many resisted U.S. pressure for eco- deploy Pershing II and cruise mis- Schmidt’s view of himself as a realist 1979. The role implies that he un- well as security issues. He was thus nomic stimulus and feared inflation siles to Western Europe by 1983 un- and Bahr as a “Utopian idealist.” In derstood both sides better than unique among Western leaders in the above all (though those fears were less the Soviets withdrew the SS-20s truth, both were realists but had dif- they understood each other—but 1970s: a “statesman-intellectual with probably more justified then). as part of an arms-control agree- ferent views of the national interest was this really true? In any case, the ideas and experience, the vision From 1977 onward, Schmidt’s fo- ment—the “dual-track” decision. of the Federal Republic. Schmidt unlike an interpreter, Schmidt had and determination, to shape the cus shifted to security issues. His ob- With the Soviet invasion of Afghani- continued Brandt’s Ostpolitik but an agenda of his own: West Ger- course of world events.” session was the “gray area” prob- stan two weeks later, the second was more of an Atlanticist than many’s national interest. Ms. Spohr’s conclusion is that lem—that is, the threat from Soviet track—negotiations on disarma- Bahr—perhaps in part because he Schmidt should be seen not so “theater nuclear forces” that fell be- ment—became irrelevant. feared Soviet aggression more—and Mr. Kundnani, a Senior Trans- much as a “transitional figure” be- tween the strategic nuclear weapons Although the dual-track decision believed that détente was only possi- atlantic Fellow at the German tween Brandt and Helmut Kohl, as covered by the Strategic Arms Limi- was probably, along with the cre- ble on the basis of a balance of Marshall Fund, is the author of Mr. Kissinger once called him, but tations Talks and the conventional ation of the G7, Schmidt’s most im- power. Schmidt, raised a long way “The Paradox of German Power.” For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com A14 | Friday - Sunday, August 5 - 7, 2016 THE WALL STREET JOURNAL. OPINION REVIEW & OUTLOOK I Am Your Voice?

Donald Trump’s state- the ground to turn out voters in im- The Trumpian Purge ment Tuesday that he portant battleground states such as can’t endorse the re- Ohio, where instead Mr. Trump is onald Trump’s campaign operates in a ate and House to the Democrats. To supposedly elections of House alienated from the state’s Republican state of perpetual disorder, and he preserve his reputation, does Mr. Ryan have to Speaker Paul Ryan or leadership. D 2008 Republican pres- But one political rule that won’t be seems to like it that way, though he’s stump for Mrs. Clinton all the way through No- idential candidate overturned is that you have to get outdone himself this week by vember, or would a mere WONDER The assault on Paul LAND John McCain or New more votes than your opponent to opening a proxy war against statement suffice? Hampshire Sen. Kelly win. Breakdowns of voting in the pri- By Daniel Paul Ryan, John McCain and Ryan is part of a broader Mr. Ryan’s differences with Ayotte means that Mr. maries show that both Mr. Trump and Henninger other Republican leaders. Mr. Trump are obvious, not Trump has separated Hillary Clinton were supported by In between assailing Gold conservative divide. least on immigration, trade himself from the party about 14% of eligible voters. Both Star parents and claiming the and national security—but so that nominated him. need to expand the vote beyond that election may be “rigged,” the too are they with Mrs. Clin- He is essentially running for presi- primary base. The Never-Hillary vote candidate paused to elevate Paul Nehlen, an ob- ton. Despite claiming Mr. Trump is an existen- dent the way he ran for the nomina- is ripe for such an expansion. scure antitrade and anti-immigration business- tial threat to American democracy, Democrats tion—as an independent candidate in- Donald Trump has said that he is man who is challenging Mr. Ryan in Wisconsin’s have offered no concessions to the political side the shell of one of the two major redrawing the GOP election map by GOP primary next week. On Twitter Monday center and Mrs. Clinton is running to the left parties (as did Bernie Sanders). The pulling into the party voters who nor- election’s importance for Supreme mally do not vote Republican. They night, Mr. Trump wrote that Mr. Nehlen’s support of Mr. Obama. Court nominations or control of Con- are variously called the new silent was “very much appreciated.” Mr. Ryan sees his obligation as salvaging gress still holds. But every Republican majority or Reagan Democrats. Then on Tuesday Mr. Trump told the Wash- what he can for the cause of conservative re- candidate in a tough race, such as I had an unexpected exchange with ington Post he wasn’t ready to endorse Mr. Ryan, form in this dispiriting year. He can’t control Wisconsin’s Sen. Ron Johnson, is on one of these voters at New York’s La saying “I’m just not quite there yet”—an echo Mr. Trump but he’s focused on what he can in- his own. The party’s nominee has Guardia Airport while checking in to of what Mr. Ryan said after Mr. Trump captured fluence—namely, the House majority and abandoned them. fly to the GOP’s Cleveland convention. the GOP nomination in May. Mr. Trump also did down-ballot races. Despite GOP disunity, the One now must ask: Will Donald drive-bys on New Hampshire’s Kelly Ayotte, Speaker has forged consensus around an ambi- Trump also abandon the voters who That Trump line may stand whom he said has “given me no support, zero tious package of reforms that could be de- have supported him for the past year support,” and Mr. McCain, who is facing a tough ployed in 2017. Maybe Mr. Trump would refuse by failing or even refusing to run a re- for the candidate’s sellout primary in Arizona on Aug. 30. that agenda and indulge his politics of pique in spectable campaign? Will he desert the people who put him in a position to of his faithful supporters. Mr. Trump lashed out because the trio re- the White House. But in that case Mr. Ryan’s compete for the American presidency? fused to abide his criticisms of Khizr Khan de- conservative critics should prefer as large a In his Cleveland acceptance speech, spite a memo to Capitol Hill from the Trump center-right majority as he can preserve to lead Mr. Trump said: “These are the for- The airline worker was a black campaign. Mr. Trump is too self-involved to let the opposition. gotten men and women of our coun- woman, probably in her late 30s. any criticism go unanswered, no matter how The same applies if Mr. Trump loses as badly try. People who work hard but no lon- Confirming that I was going to Cleve- grounded in principle. He’d rather brawl with as the polls say he might, or as badly as his cur- gerhaveavoice.Iamyourvoice.” land for the GOP convention, she his critics than serve his own political interests, rent conduct deserves. The GOP House could be Since Cleveland, Mr. Trump has for- said: “I really don’t know who to vote and he’s increasing the incentives for Republi- the only check against Mrs. Clinton and a Chuck gotten the forgotten men and women for. I’m a Democrat and so was my cans to defect or repudiate him. Schumer-Elizabeth Warren Senate. If pundits who stuck with him. father. My father’s favorite president Defeating the Hillary Clinton machine will be think the economic anxiety on the right that Mr. Trump rose to prominence was Ronald Reagan. He loved Ronald with an appealing message, make Reagan. Trump? Maybe. I don’t know. fueled Mr. Trump’s ascent is high now, check difficult enough, and her polling lead could ex- America great again. What he has I don’t like the way Trump criticizes pand to double digits if Mr. Trump keeps up his back after four more years of 1% growth and the done since becoming a presidential everyone all the time. I don’t think what-next routine. He can’t win if can’t unite damage that unified Democratic control of the nominee has had virtually nothing to that’s right. I don’t know what I’m and mobilize Republicans, and he can’t do that government could do. do with making America great again. going to do.” She never mentioned if he antagonizes their officeholders. Meanwhile, Mr. Trump’s Nehlen dalliance Instead, it has been about him, his Hillary Clinton. The irony is that the Ryan and McCain criti- suggests he and his allies mean to purge the controversies and his critics. Donald Trump isn’t turning out cisms of Mr. Trump still aren’t enough for the Ryan wing of the GOP from the new Trump Think of Mr. Trump’s base of sup- new voters. He’s turning them down. parsons of the political class. Cribbing from most Party. The New Yorker is indifferent to policy, port as a series of concentric circles. Every day, he’s giving voters who pundits, and ever the moral conscience of the na- but his supporters want to elevate what has al- The tightest circle includes the peo- might vote for his candidacy reason tion, President Obama this week emerged to won- ways been a latent nativism and protectionism ple whom Mr. Trump identified when to abandon both him and the 2016 der: “The question I think they have to ask them- on the right into GOP litmus tests. That would he said: “I could stand in the middle election. of Fifth Avenue and shoot somebody, In March at a rally in Arizona selves is, if you are repeatedly having to say in be long-term disaster. and I wouldn’t lose voters.” They will Donald Trump said: “My daughter very strong terms that what he has said is unac- Whatever happens to Mr. Trump, this battle go down with the Trump ship no Ivanka and my wife Melania say, ceptable, why are you still endorsing him?” will last well beyond 2016. Those who hope for matter what. ‘Please, please act a little more presi- Yes, what a mystery. Progressives would love a more constructive, and more optimistic and Extending outward from this core dential,’ and I say, I can’t until I fin- for Mr. Ryan, Ms. Ayotte and other Republicans inclusive, conservative politics should be look- are people who looked to Mr. Trump ish my victory.” He said he’d act to become arms of the Clinton campaign, in- ing for a way to preserve the GOP’s non-Trump for a path out of their economic anxi- more presidential when the time crease Republican divisions and throw the Sen- House and Senate majorities. ety, for leadership and deliverance called for it. Well? from the gagged world of political The past two weeks have revived correctness. These people were not the notion that while Mr. Trump British Brexit Inc. low-information voters. Giving their doesn’t want the humiliation of a vote to Donald Trump in the prima- loss, he doesn’t want to be president ries was a leap of faith, and they either. His assertion that the elec- mid a slate of widely expected monetary as welcome because they run so counter to the knew it. This is a change election, and tion “is going to be rigged” sounds A moves from the Bank of England on spirit of Brexit. The Bank of England will buy in- he was their change agent. like someone who is retreating to a Thursday, the notable surprise is that vestment-grade corporate debt worth £10 billion Donald Trump, the master of the personal island, where he’ll spend a the central bank will start buy- over the next 18 months, tar- deal, is not holding up his end of the lifetime trying to justify what he ing corporate bonds to support A vote for reform geting companies that make a deal. Instead of being their voice, he didn’t do. the economy. This isn’t the lib- becomes an excuse “material contribution” to the is acting like a ventriloquist putting “I am your voice.” Millions believed eralization voters were prom- British economy. The central on his own one-man show. Donald Trump. That line is close to ised when they decided to for politicized credit. bank hopes this will help cut It may be true that this election standing for the biggest sellout of a leave the European Union. borrowing costs to stimulate has disrupted almost everything we candidate’s supporters in the history Governor Mark Carney re- investment despite Brexit- thought we knew about politics, such of America’s presidential politics. as the importance of having boots on Write to [email protected] sponded to widespread calls to cushion the eco- induced uncertainty. nomic blow of Brexit with a raft of measures that This creates a new channel for the politiciza- are conventional by today’s exotic central-bank- tion of credit, on top of home-lending programs ing standards. He cut the target interest rate to concocted by Parliament and the Bank of Eng- TheCostofBrexitPilesUp 0.25%, and he resumed the bank’s asset pur- land’s funding-for-lending program to steer chases to the tune of £60 billion ($79.98 billion) bank credit to businesses. This comes after in government bonds over six months. Prime Minister Theresa May has promised new With Little Benefit in Sight The world’s trendier central banks have gone corporate regulations, such as standards for set- much farther and set negative rates while blow- ting executive pay and mandates to put employ- By Andrew Hammond many looked to Canada, Norway, ing out their quantitative-easing programs. Mr. ees on corporate boards. Switzerland and Turkey as examples Carney was clear in saying that he could cut Mr. Carney no doubt faced considerable politi- s Theresa May celebrates her of life outside the EU. Norway, for first month as Britain’s prime example, which has considerable ac- rates below 0.25% but that he wasn’t inclined to cal pressure to offset the economic shock of A minister, she is realizing one of cess to the single market, is required go below zero. This is good news for British Brexit with what he hopes will be monetary stim- the great ironies of the U.K. referen- to adhere to EU rules without being banks, which won’t have to endure the de facto ulus. The risk is that his actions take Britain fur- dum to leave the European Union. As able to vote on them. It accepts the tax that is negative interest rates. ther away from the economic model it will have it seeks to negotiate the terms of free movement of people, contributes The corporate-bond purchases aren’t nearly to become to succeed outside the EU. exit, her government must now de- to EU programs and budgets, and is vote more resources to the EU than still required to conduct customs previous administrations did before checks on goods crossing into the EU. Obama’s Cash for Iran’s Hostages the vote. Such is the scale of the task that it could be the most complex Leaving the EU will hen is a payment for hostages not a many’s intelligence services. and important peacetime negotiation the U.K. has ever faced. ransom? When the Obama Adminis- The Administration is pretending this money consume more of London’s W Yet the country remains little tration says so. is being used for strictly kosher purposes. “The wiser about the likely path to Brexit. attention than staying in That’s how the U.S. State The payoffs encouraged revenue that’s flowing to Iran Mrs. May has only said that the ever did, and may well yield Department has tried to spin a is being used to support its withdrawal process won’t be trig- $1.7 billion settlement the U.S. the ayatollahs to grab currency, to provide moneys to gered until at least 2017. Beyond a worse economic result. reached with Tehran in Janu- the departments and agencies, that, all she has ventured is to say ary, when the nuclear deal was more Americans. build up its infrastructure,” that “Brexit means Brexit,” meaning finalized and Tehran released CIA Director John Brennan that a second referendum is out of Yet none of these nonmember coun- five American hostages, in- said last week. Has he heard the question. She has said nothing tries enjoy the free movement of ser- cluding Washington Post reporter Jason Reza- the word fungible? about her preferred relationship with vices with the union. Meanwhile, ser- ian. The Administration insists the payment The Iranians are less shy about their hostage the EU. vices account for approximately 80% Once the process begins, one of the of the U.K. economy. Brexiteers have merely settled a separate dispute related to the taking. Iran’s negotiating team for the settle- most important negotiations will be tended to ignore the implications of aborted sale of military equipment to the Shah ment payment “was largely staffed by members over curbs on the free movement of accessing the single market without of Iran in 1979. of its domestic spy service,” the Journal reports. people. This will likely cost the U.K. EU membership. New reporting by the Journal’s Jay Solomon Iranian defense officials told the press the cash some access to the EU single market, Brexit also means the U.K. will no and Carol Lee blows apart this story. On the day was “a ransom payment.” on which many British jobs and in- longer be party to the EU’s 53 free- the U.S. hostages came home from Iran, an un- Oh, and Iran has taken three more Americans vestments depend. Here, Mrs. May will trade agreements. These will have to marked cargo plane landed in Tehran’s Mehra- hostage and insists that the U.S. owes $2 billion run head-on against those in the EU be renegotiated bilaterally in the bad Airport with cash amounting to $400 mil- in assets frozen in 2009 to pay the victims of Ira- who demand that all four freedoms at coming years. And outside of the lion of euros, Swiss francs and other currencies. nian-sponsored terrorism. Supreme Leader Ali the heart of the union—of people, of economic realm, there is no guaran- U.S. law forbids direct dollar transactions with Khamenei this week complained that the U.S. goods, of services and of capital—re- tee the U.K. could fully replicate the Iran, and the $400 million in cash wasn’t dis- isn’t living up to the nuclear bargain and Irani- main sacrosanct. existing cooperation in areas such as It won’t be easy to complete these policing and security. closed to Congress. Justice Department officials ans hadn’t seen anything “tangible.” The Ayatol- negotiations before the next general All of these negotiations will re- objected but were overruled. lah is clearly angling for additional payments for election in May 2020. Mrs. May has quire great resources and attention, One reason the Administration is keen to these new hostages. Iran also knows it can only a slim majority in the House of more than the U.K. has probably ever deny that the cash was ransom is because it had threaten to walk away from the nuclear deal if Commons, and so she may be devoted to the EU before. But the already paid a high price by freeing seven Irani- its new cash demands aren’t met. tempted within the next year to call greatest irony of all is that, despite ans charged or convicted of U.S. crimes and Sen. Tom Cotton wrote to the Administration an early election to secure a new the effort, it’s not clear that Mrs. dropping extradition requests for 14 others. But Wednesday asking if the U.S. would pay to re- five-year term. May will be able to strike a deal that the Iranians weren’t satisfied. lease the current hostages, and also whether No matter the mandate, Mrs. May is better for the U.K. than the one As the Journal reports, “U.S. officials also ac- “you are willing to clearly state that the January will still find it difficult to secure a that continued membership in the EU knowledge that Iranian negotiators on the pris- release of the hostages would have occurred better arrangement than the balance would have offered. oner exchange said they wanted the cash to show even if the Administration had not agreed to pay of influence and advantages the U.K. currently enjoys as an EU member. It Mr. Hammond was a special ad- they had gained something tangible.” Cash is an $1.7 billion to Iran.” The American people aren’t has reaped all the benefits of the sin- viser when the U.K. last held the excellent way to pay terrorists, fund Hezbollah likely to get a truthful answer, but someone gle market while remaining free of the presidency of the EU. He is an associ- in Syria and the Houthis in Yemen, and buy dual- should ask Hillary Clinton if she thinks paying eurozone and contributing a rebated ate at the Centre for International use, nuclear-related hardware—which Iran con- ransom for hostages encourages the world’s amount to the EU budget. Affairs, Diplomacy and Strategy at tinues to do, according to reports from Ger- thugs to take more Americans hostage. Leading up to the referendum, the London School of Economics. For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com THE WALL STREET JOURNAL. Friday - Sunday, August 5 - 7, 2016 | A15 OPINION Why This Recovery Is So Lousy

By Phil Gramm stimulus exceeded all previous U.S. its lessons. Spending surged 18% in And Michael Solon economic stimulus programs com- the first year of the Obama admin- bined. The Treasury borrowed over istration. The publicly held national onald Trump has been $1 trillion a year for four years in a debt more than doubled. Marginal criticized by Democrats row, according to Office of Manage- tax rates on ordinary income rose and Republicans alike ment and Budget data. The Federal by 24% and taxes on capital gains D for saying that “the Reserve injected $3 trillion of new and dividends rose by 59%. Ameri- American dream is reserves into the banking system, can businesses toiled under the dead.” But instead of slaying the generating record-low interest world’s highest corporate-tax rate messenger, critics on both sides of rates. and the world’s most punitive the aisle should be examining why Every government forecaster treatment of foreign earnings. so many Americans agree with Mr. predicted happy days would soon Through law and regulation, gov- Trump and why the Obama “recov- be here again. In August 2010, the ernment control of the economy ery” has been so painful for so Congressional Budget Office pro- grew as red tape that once had en- many. jected 3.3% average real GDP cumbered came to dominate health When President Obama took of- growth for 2010-15. The Federal Re- care, financial services, energy pro- fice during the 2007-09 recession, serve forecast growth as strong as duction and the internet. no president was ever better posi- 3.7%. Mr. Obama’s own Office of Every 10 years between 1870 and tioned to lead a strong recovery. Management and Budget expected 2007, incomes for each man, With an impressive electoral man- peak growth of 4.5%. And these es- woman and child in America rose date, Mr. Obama enjoyed a filibus- timates were conservative as com- on average by 21.6%, according to ter-proof Senate supermajority, a pared with the actual recovery pat- census data and the Madison Proj-

terns that had followed every GETTY IMAGES ect. This extraordinary achieve- major recession except the Depres- George Segal’s ‘The Depression Breadline’ sculpture in Washington. ment is the tangible measure of the Don’t believe the line that sion. extent to which the American slow growth is inevitable In the six decades from 1948 to than traditional policy but similar sion-era policies as “wages, prices dream actually came true. Only 2007, the U.S. economy grew at an to each other—FDR’s Great Depres- and labour conditions grasped in twice did that dream falter—in the after financial crises. Bad average annual rate of 3.5%, includ- sion and Mr. Obama’s Great Reces- muscular hands and nailed to an Great Depression and the Great Re- policies yield bad results. ing all the negative growth years sion. arbitrary framework.” cession. Whether we call it pro- during 10 recessions, according to From 1932 to 1936, federal As government assumed greater gressivism or socialism, bad poli- the Commerce Department’s Bureau spending skyrocketed 77%, the na- control, private investment col- cies produce bad results—not just of Economic Affairs. Yet not once tional debt rose by more than 73%, lapsed, averaging only 40% of the sometimes in some places, but at 79-vote House majority and a na- in the past seven years has annual and top tax rates more than tri- 1929 level for nine consecutive all times in all places, even in tion ready for change. History, too, economic growth ever reached 3%. pled, to 79% from 25%. But the tec- years. League of Nations data show America. seemed to smile on Mr. Obama’s Average real per capita income tonic shift brought about by the that by 1938, in five of the six The dominant lesson of the endeavor. The recession ended just grew five times faster during the New Deal was the federal most-developed countries in the Great Depression and the Great Re- six months into his first term and, Clinton recovery, seven times faster government’s involvement in the world, industrial production was on cession is that when government with the sole exception of the during the Reagan recovery and 10 economy, as a tidal wave of new average 23% above 1929 levels, but overspends, overtaxes and overreg- Great Depression, every severe re- times faster during the Kennedy- laws were enacted and more execu- in the U.S. it was still down by 10%. ulates, economic freedom is sup- cession since 1870—when reliable Johnson recovery than during the tive orders were issued than by all Employment in five of the six ma- pressed and economic growth van- annual data were first collected— Obama recovery. subsequent presidents combined jor developed countries averaged ishes. When growth fades, it takes had been followed by a vigorous In all recoveries following all 30 through President Clinton. 12% above the pre-Depression lev- the American dream with it. Give recovery. economic contractions since 1870, The resulting economic paralysis els while U.S. employment was still America back its economic system In his capacity to implement his only two have failed to have strong was described in 1936 by Al Smith, down by 20%. Before the Great of freedom and opportunity, and program, Mr. Obama stood as a rebounds after deep recessions. former New York governor and Depression, real per capita GDP in the ensuing growth will bring back colossus with the fates on his side, Only two are now labeled “Great” Democratic presidential nominee, the U.S. was about 25% larger than the American dream. the vast power of government at because of the long periods of suf- as a “vast octopus set up by gov- it was in Britain. By 1938, real per his disposal and no one—not Con- fering they caused. And in only two ernment that wound its arms all capita GDP in Britain was slightly Mr. Gramm, a former chairman gress, the Supreme Court or the recoveries did government impose around the business of the country, higher than in the U.S. of the Senate Banking Committee, Federal Reserve—willing or able to economic policies radically differ- paralyzed big business and choked When Mr. Obama replicated is a visiting scholar at the Ameri- deny his will. No resources were ent from the policies pursued in all little business to death.” Winston some of FDR’s “progressive” poli- can Enterprise Institute. Mr. Solon spared. The Obama $836 billion the other recoveries—different Churchill described U.S. Depres- cies, history was there to reteach is a partner of US Policy Metrics. Feeding Greece’s Tax Addiction Is Starving Its Economy

By Yannis Palaiologos well-off Greeks unable to meet employed, irrespective of income. cutting spending. Consider steps the authorities’ lax enforcement of the their obligations. What’s left is net earnings of less government took to complete the law, has now become for many a he relative calm in Greece According to calculations re- than €1,900. first bailout review in June. In addi- matter of economic survival. T this summer compared to last cently released by the Kathimerini If a company that is classified tion to increasing insurance contri- Greece’s VAT gap—the shortfall be- year’s chaos may lead outside newspaper, once the full array of as a general partnership declares butions both for the self-employed tween VAT revenue owed and actu- observers to believe that the coun- new tax and insurance-contribution profits of €5,000 a year, the Kathi- and for most salary-earners, Athens ally collected—was already 34% in try’s financial problems are on their increases come into effect early merini analysis notes, it will get to pushed up rates on the value-added 2013, compared with an EU average way to being resolved. After all, the next year, real-estate owners who tax, on a property tax it had vowed of 15%. The recent increase in the national government, led by the rent out their property may be to scrap, and on taxes on hotels, top rate, to 24%, is bound to make far-left Syriza party, seems commit- forced to pay more than 100% of Landlords face effective fuel, landline telephone and broad- the situation even worse. ted to implementing the bailout the income they earn in personal rates above 100%. band services, cigarettes, alcohol, Like previous crisis govern- program it signed last year. And ne- and property taxes. Self-employed coffee and paid television. ments, the Syriza-led coalition has gotiations are already under way individuals who make as little as Businesses pay 60%, and As the Bank of Greece noted in a turned optimism about the future for a deal on debt relief. €10,000 ($11,195) a year will have to VAT soaks consumers. July report, the structure of taxation into a strategy. It hopes that its But these negotiations will likely pay 60% to 74% of it in taxes and in Greece, as opposed to the rest of conformist approach will allow it take a long time. No one expects a insurance contributions. Private- No wonder the economy the developed world, is character- to reap the benefits of normaliza- meaningful restructuring of capital firms—a new category of remains stuck in reverse. ized by a greater reliance on indirect tion, including access to the global Greece’s debt before the next Ger- company, introduced during the re- taxes than on the direct taxation of bond market and a robust recov- man government is formed at the cent crisis and designed to boost income and capital. The central bank ery in 2017. But despite some posi- end of 2017. Until that happens, entrepreneurship—will have to notes that this imbalance, evident in tive progress in other areas, the Athens will labor under require- hand over 43% to 60% of their prof- keep little more than a quarter of the policies of the current govern- policy of overtaxation has gone ments for budget surpluses that its to the state, even for earnings those proceeds. Insurance contri- ment, entails greater economic in- too far. The economy cannot re- will suffocate the economy. aslowas€5,000ayear. butions will eat up €1,752, income equality as VAT increases don’t dis- turn to health so long as house- This has made a bad situation It is worth examining some cases tax will require €942 and the pro- criminate between the incomes of holds and businesses labor under on the ground even worse. The more closely. Someone who is self- fessions’ levy will take away an- consumers and thus hurt the poor such crushing burdens. combination of overambitious fis- employed and declares earnings of other €1,000. disproportionately. For a govern- cal targets and widespread tax eva- €5,000 a year will have to pay The statist philosophy of Syriza ment of the left, this is a particu- Mr. Palaiologos is a journalist sion has led, throughout the bail- €1,750 in insurance contributions, has led it to plug almost every fiscal larly damning indictment. at the Kathimerini newspaper in out period but especially under €715 in income tax and €650 for gap that the demanding targets of These policies are having a cor- Athens. The second edition of his Syriza, to constantly rising tax and the so-called liberal professions’ the third bailout program have cre- rosive effect on tax compliance. Tax book “The Thirteenth Labour of insurance-contribution rates, which levy. This last is a lump-sum im- ated by increasing tax and insur- and contribution evasion, once the Hercules” was published in July leave even law-abiding, relatively posed on everyone who is self- ance-contribution rates rather than product of antisocial greed and the (Portobello Books). Victory Is Slipping Away for Trump

By Karl Rove Democratic National Committee Trump’s favorable rating moved to could help find Mrs. Clinton’s miss- his postconvention news conference showing that the party establish- 35.3% from 33.6% and his unfavor- ing 30,000 emails. with a bold rallying cry on the is- ast month’s Republican and ment favored Hillary Clinton. They able rating to 57.9% from 60.1%, a Most damaging, Mr. Trump has sues and then spent three days L Democratic national conven- booed the party’s chairwoman out total swing of 3.9 points. for the past week battled with Khizr barnstorming battleground states, tions showed that both par- of office and chanted “no more The general-election campaign and Ghazala Khan, the Gold Star appearing with workers, small- ties are deeply split internally over war” when Democratic leaders has hardly begun, and data from parents of a fallen war hero. He business owners and first respond- ideology and personalities. Not only spoke of fighting Islamic State and Gallup shows that both candidates even mocked the grieving mother. ers. that, but their presidential nomi- al Qaeda. are more widely disliked than any This is unprecedented cruelty. Rather than fighting with the nees remain highly unpopular. Donald Trump and Hillary Clin- presidential hopeful since at least Khans, he could have seized on last The GOP gathering in Cleveland ton polished their flawed images, the 1960s. Even in October 1964, week’s lousy GDP report to explain was poorly produced and featured but the Democrat did a better job. Barry Goldwater’s unfavorability He can still win, but how a Trump White House would the presidential primary’s runner- Between July 17 and Wednesday, rating was 47%, while in October only if he quits being result in more jobs, bigger pay- up, Texas Sen. Ted Cruz, in a prime- Mrs. Clinton’s favorable rating rose 1972 George McGovern’s was 41%. checks and greater prosperity. In- time appearance pointedly refusing to 40.6% from 38.4% in the Real Mrs. Clinton appears to have re- self-destructive and stead of grousing about debate to endorse Donald Trump. Clear Politics average. Her unfavor- ceived the bigger convention chooses discipline. schedules Sunday and attacking fire The Democratic convention in able rating dropped to 53.9% from bounce. The day before the GOP marshals, Mr. Trump could have re- Philadelphia was marred by sup- 56.2%. That’s a total swing of four gathering, she led Mr. Trump 43.8% sponded to Mrs. Clinton’s interview porters of Sen. Bernie Sanders, en- and a half points. to 40.6% in the Real Clear Politics with Chris Wallace on Fox News, raged by hacked emails from the During the same period Mr. average. By July 25, the Republican But that isn’t all. On Sunday Mr. where she continued lying about was in front, 44.3% to 44.1%. On Trump suggested that the election her private email server. Wednesday Mrs. Clinton was back is “rigged” because debates this fall No one on Team Trump—espe- ahead with 46.5% to his 42%. were scheduled months ago on cially not the principal—appears to PUBLISHED SINCE 1889 BY DOW JONES & COMPANY Whether this boost is temporary nights with NFL football games. He have a plan for what messages to or durable won’t be known for a attacked fire marshals in Colorado emphasize and when. No one seems Rupert Murdoch Robert Thomson Executive Chairman, News Corp Chief Executive Officer, News Corp few days. But Mr. Trump’s self- and Ohio for enforcing the fire charged with watching what Mrs. Gerard Baker William Lewis destructive actions in the past few codes that limited how many people Clinton says so the candidate can Editor in Chief Chief Executive Officer and Publisher weeks have given her the advan- could cram into his rallies. quickly volley back. No one re-

Rebecca Blumenstein, Matthew J. Murray DOW JONES MANAGEMENT: tage. On Tuesday he refused to en- strains Mr. Trump before he acti- Deputy Editors in Chief Ashley Huston, Chief Communications Officer; He began the morning after his dorse two prominent Republicans vates his Twitter account. Ad hoc DEPUTY MANAGING EDITORS: Paul Meller, Chief Technology Officer; convention by devoting his news up for re-election, House Speaker may be freewheeling and fun, but it Michael W. Miller, Senior Deputy; Mark Musgrave, Chief People Officer; conference to again trashing Mr. Paul Ryan and Sen. John McCain, in often leads to defeat. Thorold Barker, Europe; Paul Beckett, Asia; Edward Roussel, Chief Innovation Officer; Christine Glancey, Operations; Jennifer J. Hicks, Anna Sedgley, Chief Financial Officer; Cruz, including reviving the crazy their primaries. Then he belittled The White House is not out of Digital; Neal Lipschutz, Standards; Alex Martin, Katie Vanneck-Smith, Chief Customer Officer theory that the Texas senator’s fa- Sen. Kelly Ayotte, a New Hampshire reach for Mr. Trump, who now News; Ann Podd, Initiatives; Andrew Regal, Video; ther was implicated in JFK’s assas- Republican facing a tough race that trails by 4.5% in the Real Clear av- Matthew Rose, Enterprise; Stephen Wisnefski, OPERATING EXECUTIVES: Professional News; Jessica Yu, Visuals Jason P. Conti, General Counsel; sination. Mr. Trump then returned could determine whether the GOP erage. But victory is slipping away. Nancy McNeill, Corporate Sales; to his Manhattan penthouse for the keeps the Senate. If he has more weeks like the dread- Paul A. Gigot, Editor of the Editorial Page; Steve Grycuk, Customer Service; Daniel Henninger, Deputy Editor, Editorial Page Jonathan Wright, International; weekend, going silent until “Meet How does any of this advance ful past two, the gap between him WALL STREET JOURNAL MANAGEMENT: DJ Media Group: the Press” that Sunday, where he Mr. Trump’s agenda or reassure and Mrs. Clinton is likely to widen Trevor Fellows, Head of Global Sales; Almar Latour, Publisher; Kenneth Breen, proposed a 15% to 35% tax on im- Americans that he is worthy of sup- and never close again. Chris Collins, Advertising; Commercial; Edwin A. Finn, Jr., Barron’s; Suzi Watford, Marketing and Circulation; Professional Information Business: ported goods. port? The nominee’s defenders say Joseph B. Vincent, Operations; Christopher Lloyd, Head; Then the next week, amid that he “tells it like it is” and re- Mr. Rove helped organize the po- Larry L. Hoffman, Production Ingrid Verschuren, Deputy Head charges that Russian hackers were fuses to be “politically correct.” litical-action committee American

EDITORIAL AND CORPORATE HEADQUARTERS: behind the Democratic National They are only enabling his worst in- Crossroads and is the author of 1211 Avenue of the Americas, New York, N.Y., 10036 Committee email dump, Mr. Trump stincts. “The Triumph of William McKinley” Telephone 1-800-DOWJONES suggested that maybe the Russians Imagine if Mr. Trump had opened (Simon & Schuster, 2015). For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com A16 | Friday - Sunday, August 5 - 7, 2016 THE WALL STREET JOURNAL. For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com RIDE-HAILINGBUSINESS&FINANCE APP UCAR STEERS FOR HIGH END TECHNOLOGY | B3

Euro vs. Dollar 1.1137t0.12% FTSE 100 6740.16s1.59% Gold 1358.80s0.20% WTI crude 41.93s2.69% German Bund yield -0.094% 10-Year Treasury yield 1.503%

1.16 7000 1350 50 0.40 2.25

1.13 6500 1300 45 0.20 1.50

1.10 6000 1250 40 0.00 0.75

1.07 5500 1200 35 -0.20 0.00 M J J M J J M J J M J J M J J M J J

As of 4 p.m. ET Sources: Tullett Prebon; SIX Financial

© 2016 Dow Jones & Company. All Rights Reserved. THE WALL STREET JOURNAL. Friday - Sunday, August 5 - 7, 2016 | B1

TheLongWayDown Brexit Markup Hits Retail Even after its recent plunge, some analysts expect sterling to weaken much further. How many U.S. dollars £1 buys* Some manufacturers car makers—in a bind: Do they down more than 10% against it sells to U.K. customers. Sally raise prices in Britain to com- the dollar since the June 23 Moore, a spokeswoman for the $1.50 are raising prices on pensate for the falling value of vote. company, said the rate and goods in the U.K. as sterling-denominated sales? Small shops along London’s timing of the increases vary Or do they hold tight, protect- Tottenham Court Road, long a across products, without offer- 1.40 the pound weakens ing market share at the ex- marketplace in the city for ing details. pense of profit? electronics goods, said suppli- Taiwan-based HTC said last Forecasts BY ANAÏS VOSKI In recent days, many of ers, including Dell Inc. and week it would boost the U.K. 1.30 J.P. Morgan them have decided on price in- HTC Corp., have raised prices price of its new Vive virtual- LONDON—The price of Br- creases. Others are warning for many products by about reality headset by about 10%, Morgan Stanley exit is starting to catch up to higher prices are on the way. 5% to 15% in recent days. from £689 ($918) to £759. It 1.20 HSBC consumers here. U.S. and Asian electronics “Prices have definitely in- cited “recent currency valua- The June vote by Britain to makers, whose component creased on all electronics,” tion changes.” An HTC repre- Deutsche Bank leave the European Union costs are typically in curren- said Sohel Amin, a manager at sentative declined to comment 1.10 Goldman Sachs triggered a steep drop in the cies like the dollar and yen, electronics outlet Itbex UK Ltd. more specifically on the pric- 2016 British pound, putting foreign both of which have risen Texas-based Dell said in a ing of other products. *Through 4:30 p.m. in London companies and importers—in- strongly against the pound, recent statement the stronger Camera lenses and other Sources: FactSet (pound); HSBC, Goldman Sachs, cluding electronics manufac- have been among the first to dollar will have a direct im- components from Japan have Morgan Stanley, J.P. Morgan, Deutsche Bank (forecasts) THE WALL STREET JOURNAL. turers, clothing retailers and move. The pound is currently pact on some of the products Please see PRICE page B2 Pound Still Has Drive Is on to Recruit Room To Slump Bison Ranchers BY MIKE BIRD changed his mind and would support stimulus measures. U.S. consumers’ newfound taste for the meat puts The British pound tumbled Since the BOE actually against the U.S. dollar after signed off on a more expan- pressure on industry to find skilled herders the Bank of England surprised sive program, forecasts for market watchers Thursday sterling may now be cut even BY JACOB BUNGE 2015. But bison producers say with its decision to simultane- further. their meat boasts an edge in ously pull several monetary- So why are analysts expect- The U.S. bison industry is the marketplace as consumers policy levers to stimulate the ing such a steep further sell- trying to draw more ranchers seek out more naturally raised economy. off? to where the buffalo roam. protein, and sales have grown But since the U.K.’s June 23 One reason for the down- After collapsing in 2002, by 22% over the past five vote to leave the European beat calls is the U.K’s whop- demand for bison burgers and years. Fans say it tastes like Union, sterling has defied ex- ping current-account deficit. steaks from retailers such as beef, but leaner and slightly pectations. Over the last The U.K. imports more goods Whole Foods Market Inc., sweeter. month, the British currency and services than it exports, Wal-Mart Stores Inc. and Retailers like Whole Foods has climbed from the 31-year and it also sends more invest- Kroger Co. is rising, send- are getting their bison-meat lows reached in response to ment income abroad than it ing processors and mar- orders filled, but Theo Ween- the Brexit referendum, to receives. keters on a recruiting ing, the company’s global meat $1.331 ahead of Thursday’s That money needs to be drive to round up more buyer, said he could sell a lot meeting of the Bank of Eng- matched somehow, in the form producers to raise the more. “I’d love to do a feature land. of overseas investors buying hulking creatures. on ground buffalo or seasoned The decline on Thursday— U.K. assets. One major hurdle buffalo burgers, but if the sup- the currency fell by as much In a July research note, to recruiting ranchers: ply is not there, we can’t fea- as 1.35% to about $1.31 after HSBC analysts contrasted the convincing them to ture it,” he said. the stimulus announcement— U.K.’s situation to emerging handle animals that only weakened the pound to markets like South Africa and cangrowtothesizeof its lowest level in six trading Brazil, where lower foreign in- a Mini Cooper, and 22% days. vestor demand can move the sometimes get ornery. Forecasts for sterling vary, currency sharply. “That’s like stick- Growth in bison-meat sales over but it is difficult to find ana- The U.K. is not an emerging ing bobcats in gun- the past five years lysts who expect the currency market, said the note, “but its nysacks,” said Lee to rise over the course of the deficits are even wider than Graese, a former year. these countries’ deficits. So bodybuilder who Wholesale bison-meat Among major investment they do provide an insight into raises bison with prices, currently around $4.50 banks, J.P. Morgan Chase & Co. how the pound could behave.” his wife, Mary, a a pound, have trod reliably is the most bullish, with an What is more, a note from dietitian, near higher, nearly doubling from expectation that the pound Deutsche Bank in July noted Rice Lake, Wis. January 2009 through June of will be at $1.31 at the end of that the BOE’s stimulus may “If you can this year. That outpaces a 42% the year. That would leave it weaken demand for U.K. gov- runintoitat increase for similar beef effectively unmoved from its ernment bonds. The research, 35 miles grades, a 41% rise in pork and current levels. argued that there would be “a per hour an 18% gain for broiler At the other end of the narrowing spread between with your chicken, according to U.S. De- spectrum, HSBC Holdings PLC long-end U.K. and European pickup partment of Agriculture data. and Deutsche Bank AG’s for- yields due to further Bank of and it’s Dave Carter, executive di- eign-exchange analysts expect England stimulus.” still rector of the Westminster, the pound to drop to $1.15 and Weaker demand for British stand- Colo.-based Bison Association, $1.20, respectively, by the end bonds would mean fewer over- ing, says the industry needs com- of the year. At Goldman Sachs seas investors needing to ac- you’ve mercial-scale ranches like the Group Inc., analysts confirmed quire pounds to purchase the gotapen beef industry has, capable of that they expect another ag- debt. that’ll hold raising thousands more bison gressive selloff—taking ster- Whether such a sharp drop a bison.” to further build the market. ling to $1.20 in just three in the British currency actu- Bison-meat Cattlemen, he said, are natural months—in a note on Tuesday. ally occurs still remains to be sales topped $340 mil- candidates, beleaguered by a Markets had been expecting seen. Analysts and investors lion last year, according to 20% decline in cattle-carcass a reduction in interest rates at are flying blind. There have data from the National Bison prices since early 2015. the very least from the BOE been few Brexit-like events to Association. This is a tiny frac- In the often-punishing ever since Martin Weale, one compare to the U.K’s situation, tion of the more than $100 bil- meat business, where ranchers of the most hawkish members and there is little clarity about lion in sales of cattle, hogs and and meatpackers contend with of the Monetary Policy Com- how political events will un- LUKE SHARRETT/BLOOMBERG NEWS poultry produced in the U.S. in Please see BISON page B2 mittee, indicated that he had fold. BOE’s Juggling Act Gets Riskier Facebook Targets ‘Clickbait’ News BY DEEPA SEETHARAMAN leading headlines designed to in those feeds. No disappointment. Unlike lending and reduce concerns lure users into clicking. The latest tweak to Face- other central banks, the Bank about squeezed margins. And Facebook Inc.’s war on Under the new formula, ef- book’s news feed targets two of England on Thursday it announced plans to buy an “clickbait” rages on. fective Thursday, posts from types of headlines, those that overwhelmed markets by additional £60 billion of The social network is alter- publishers that rely heavily on “withhold information” and pulling every stimulus lever gilts, taking its holdings to ing the formula for its news what Facebook considers click- those that “exaggerate or mis- available to counteract the £435 billion, topped off with feed to penalize publishers bait will be placed in fewer lead” users, Adam Mosseri, shock of Br- £10 billion of investment- that churn out vague or mis- news feeds and appear lower Facebook product manager for exit—and grade corporate-bond pur- news feed, said in an inter- making clear chases. view. they could Markets had priced in eas- He offered an example of yet be pulled ing, but not such a big-bang the first category: “Man jumps harder. This approach. Sterling fell more in pool with alligator—you HEARD ON effort, while than 2 cents against the dol- won’t believe what happens THE STREET prudent for lar, 10-year gilt yields hit a next.” The second type might RICHARD now, is fur- record low, the FTSE 100 tease an outfit worn by singer

BARLEY ther expos- JUSTIN TALLIS/PA WIRE/ZUMArose PRESS and sterling-denomi- Selena Gomez to the Emmys ing the risks BOE Gov. Mark Carney said nated corporate bonds ral- “but you click on it and it says of aggressive positives outweigh dangers. lied. she didn’t go,” he said. monetary policy. There are two trade-offs The changes apply to head- Gov. Mark Carney and his Mr. Carney made clear that the BOE is juggling here. The lines on links to text articles colleagues certainly weren’t negative rates weren’t in the first is a traditional one for but not videos. timid. The BOE cut rates by a cards. It launched a new pro- central banks: growth versus In Facebook surveys, users quarter percentage point to a gram to provide up to £100 inflation. The answer here is complain about posts with en-

record low 0.25%, with a fur- billion ($133 billion) of cheap easy—the BOE is right to fo- SCOTT CARSON/ZUMA PRESS ticing headlines that ulti- ther cut possible, although funding to banks to support Please see HEARD page B2 Facebook is promoting ‘high-quality’ content in its news feed. Please see CLICKS page B3 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com B2 | Friday - Sunday, August 5 - 7, 2016 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 F O Abiomed...... B8 Facebook...... B1,B3 OfferUp...... B3 Toyota Cuts Profit Forecast Accenture...... A2 Fiat Chrysler Orange...... A2 Alcatel-Lucent...... B3 Automobiles...... B2 R Alibaba Group...... B3 Ford Motor...... B2 Rocky Mountain Natural suya Otake, Toyota’s managing Alphabet...... A2 Japanese auto maker Fuji Heavy Industries.B2 Meats...... B2 Amazon.com...... A1 G officer. To catch up in that Royal Dutch Shell...... B8 says the stronger yen segment, the company will in- Ambatana Holdings....B3 S American International General Motors...... B2 and challenges in U.S. crease production of its High- Group...... B8 H SABMiller...... B2 lander and Rav-4 SUVs with Anheuser-Busch InBev Hamas...... A4 SAP...... A2 will curb its outlook the aim of selling 30,000 ad- ...... B2 Honda Motor...... B2 Schneider Electric...... A2 ditional vehicles in the finan- Apple...... B2 HSBC...... B7 SeaWorld BY SEAN MCLAIN cial year ending next March. AT&T...... A1 I Entertainment...... B4 AXA...... B5 Siemens...... B4 Toyota has been expecting a B International Business Statoil...... B8 TOKYO—Toyota Motor sharp drop in earnings from Machines...... A2 T Corp. ratcheted down its earn- the ¥2.31 trillion it reported Barnes & Noble...... B4 K BMW...... A2 Total...... B8 ings outlook after its first- for its previous fiscal year. Books-A-Million...... B4 Kroger...... B1 Toyota Motor...... B2 quarter profit slid as the yen Toyota has maintained a BP...... B8 L 21st Century Fox...... B4 strengthened, becoming the strong manufacturing base at C Letgo...... B3 U latest major auto maker to home, producing roughly three Car...... B3 M Uber Technologies...... B3 raise a caution flag about million vehicles in Japan. slower growth in the U.S. and CBS...... B4 MetLife...... B5 UCAR...... B3 When a weak yen drove re- Chevron...... B4 Microsoft...... A2 V a murky global economy. TORU YAMANAKA/AGENCE FRANCE-PRESSE/GETTYcord IMAGES profits, Toyota’s produc- Continental...... B2 N Viacom...... B4 The world’s No. 1 auto AToyotashowroom in Tokyo. Profit fell 15% in the latest quarter. tion policy seemed like sound D maker in terms of sales, Toy- business judgment. But now Naspers...... B3 W Dell...... B1 ota has posted lower sales in Historic weakness of the ued momentum for U.S. com- Toyota plans to make more ve- National Amusements Wal-Mart Stores...... B1 Deutsche Telecom...... A2 ...... B4 Warburg Pincus...... B3 the American market as con- yen versus the dollar played petitors, but Ford Motor Co.— hicles in the U.S. to soften the E Nike...... B8 Whole Foods Market..B1 sumers flock to sport-utility an influential role in Toyota’s the market’s No. 2 seller, after impact of the strengthening Enel...... A1 Nissan Motor...... B2 William Blair...... A8 vehicles and pickup trucks. run as one of the world’s most GM—said its 2016 outlook is in yen, Mr. Otake said. ENI...... B8 Nokia...... B3 World Vision...... A4 While the Japanese company profitable car companies. danger because of expected Toyota won’t cut produc- has made considerable Other Japanese auto mak- softness in second-half sales. tion in Japan, but will cut changes in recent years to in- ers, including Honda Motor Toyota’s U.S. sales fell 2.5% costs instead, Mr. Otake said. INDEX TO PEOPLE crease the number of light Co., Nissan Motor Co. and Su- in the first half, and its pre- Toyota’s first-quarter profit trucks in its mainstream and baru parent Fuji Heavy Indus- mium-brand sales declined declined 15%, as the adverse B H Pozen, Robert...... B5 high-end Lexus lineups, it is tries Ltd., also have blamed a more than 4%, as buyers ig- exchange rate erased ¥235 bil- R still far more dependent on stronger home currency for re- nored the luxury sedans, SUVs lion from operating income. Breen, James...... A8 Harte, Jeff...... A8 passenger cars for volume, cent earnings weakness. and crossover wagons that the Toyota had predicted an ex- Brito, Carlos...... B2 K Redstone, Sumner...... B4 such as the Camry family se- A stronger yen raises the company has in its portfolio. change rate of 105 yen to the C Kaeser, Joe...... B4 Richter, Christopher...B2 dan and Prius hybrid. cost of products Japanese The Japanese auto maker also dollar for the year, but the yen Carney, Mark...... B1 Kandarian, Steven...... B5 Rudetzki, Françoise....B5 Toyota cut its full-year companies sell abroad, and lacks the significant presence is trading closer to 102. For Cocteau, Channel Jean Kelly, Megyn...... B4 S profit outlook 3% to ¥1.45 tril- erodes those profits when they in the highly profitable pickup the full year, Toyota expects a ...... W8 Kvaal, Jeffrey...... A8 Stephens, John...... A1 lion ($14.3 billion). Its prior are repatriated. segment that has allowed strong yen to reduce its oper- Corbat, Michael...... A8 forecast, given in May, had al- As the U.S. automotive mar- Ford,GMandFiat Chrysler ating income by ¥1.12 trillion. L Stroud, Matthew...... A8 D ready projected a profit de- ket plateaus after six years of Automobiles NV to offset The company reported a Suri, Rajeev...... B3 Levya, Mauricio...... B2 cline of more than one-third strong growth, mass-market weakness in the U.S. market. ¥552.4 billion profit for the Dauman, Philippe...... B4 T Li, Wilson...... B3 compared with the prior finan- manufacturers are painting a “Trucks and SUVs are 61% April-June period, compared Diller, Barry...... A8 Lu, Charles...... B3 Tavares, Carlos...... B2 cial year in response to cur- mixed picture. General Mo- [of the U.S. market]; that is with ¥646.4 billion for the Dineen, Bob...... B2 M Todorovic, Srdjan...... B5 rency headwinds. tors Co. has projected contin- probably a record,” said Tet- same period last year. Dutra, Felipe...... B2 U DuVally, Michael...... A8 Ma, Jack...... B3 F Mosseri, Adam...... B1 Usvyatsky, Olga...... B5 O-P W Frank, John...... A2 BISON Price Range Freeman, Roger...... A8 Otake, Tetsuya...... B2 Wang, Ming...... B7 The value of bison has risen higher and more steadily over the past five years than for other meats.

Continuedfromthepriorpage Percentage whipsawing prices and shifting change in consumer tastes, shaggy bison wholesale Chicken Hogs Cattle Bison have other attractions. price since They are hardy, built to sur- 2009 vive blizzards, happy to munch 125% June 2016 58 cents $2.01 per $4.46 per grass. Their meat is high in 100 97 cents per pound pound* pound protein and produced without per pound s s s 75 41% 42% 92% growth-promoting medications s18% and hormones that have lost 50 favor with some meat eaters. 25 To clear ranchers’ path to 0 buffalo country, the Bison As- –25 sociation, a trade group, suc- cessfully lobbied the USDA for ’09 ’16 ’09 ’16 ’09 ’16 ’09 ’16 programs to help bison ranch- *Prices are for select grade beef carcasses. Source: USDA THE WALL STREET JOURNAL. ers get disaster relief funds and offset the cost of fencing. The May designation of the fence,” though “’Jurassic Park’ now tells people it was his business call the collapse a American bison as the U.S. na- corrals” aren’t needed if a own fault. blessing. Bison meat previ- tional mammal was a recent rancher forges a bond with the The bison industry has had ously had struggled to tempt coup. (The bald eagle remains beasts. “Spend some time its own close calls. Speculative diners because of its high the U.S. national animal.) thinking about what we do investment into bison in the price, but it became a bargain There are signs the rancher with our bison and how it may late 1990s, driven partly by for retailers and restaurants as drive is working. The Bison As- look or feel from their per- troubles in the cattle business, bison flooded processors like

JASPER JUINEN/BLOOMBERG NEWS sociation’s number of active spective,” the manual counsels. pushed the price of animals to Rocky Mountain Natural Anheuser-Busch said its global management team, including producers has climbed by Randy Miller, a former hair- several thousand dollars a Meats, a Henderson, Colo.- CEO Carlos Brito, above, would still be based in New York. nearly a quarter to about 850 salon magnate who left that head. But the bison market based company that ranks as from 2010 to 2016, and about a business to raise about 1,000 struggled to soak up the meat, the largest U.S. processor of fifth of attendees at the bison across two ranches in and a drought scorched graz- bison meat. “Some of those AB InBev Managers Get group’s recent winter confer- Nebraska and Missouri with ing lands and forced ranchers customers are still buying bi- ences are first-timers, Mr. his wife, Jane, erred when he to slaughter more animals. son today at three to four Carter said. lugged a bucket past a female That created a glut that by times the price it was then, be- Top Roles After Deal The group also drafted a bison named “Muddy.” She as- 2002 had plunged prices below cause they figured out it was a 300-page guide to managing sumed it contained feed and $300 a head and drove many good product,” said Bob BY TRIPP MICKLE including Chief Executive Car- the animals and the industry. exuberantly charged. Mr. ranchers from the business. Dineen, chief executive of los Brito and Chief Financial Advice includes “build a good Miller leapt into a hay bin, and Now, many in the bison Rocky Mountain. Anheuser-Busch InBev NV Officer Felipe Dutra, would executives will dominate lead- continue to be based in New ership positions after taking York. It will add zone head- exit vote. But economists have over rival brewer SABMiller quarters in Johannesburg, PRICE raised inflation forecasts more PLC, filling all but one posi- Melbourne and Bogotá. generally, based on the falling tion on an expanded executive The company said it would pound and expectations of management board. keep SABMiller’s offices in Continuedfromthepriorpage sharp imported inflation. Under a new structure an- Woking, U.K., open during a been “especially up compared In its inflation report re- nounced Thursday, AB InBev transitional period. A spokes- to before,” said Yalcian Sezen, leased Thursday, the Bank of said it would expand its execu- woman declined to disclose manager at Sunrise Photo- England projected annual, non- tive management board to 20 the scope of potential layoffs graphic Ltd. energy import price inflation people from 17 by adding geo- but added that U.K. operations On Thursday, Steve Dirn- to reach 6% in the first quarter graphic zones covering Africa, would be “significantly im- berger, a 30-year-old freelance of next year, up from 1.3% in Australia and Colombia. pacted” after the takeover. videographer and travel blog- the year-ago period. It cited SABMiller’s Mauricio Leyva, The announcement comes ger from South Africa, was the falling pound and said in- currently the managing direc- less than a week after SAB- shopping for gear for a wed- flation would feed into higher tor of African subsidiary SAB Miller’s board recommended ding shoot in the U.K. and said consumer prices eventually.

Ltd., will lead AB InBev’s Mid- AB InBev’s $100 billion-plus he was surprised by the prices. GRETEL ENSIGNIA/PA WIRE/ZUMA PRESS Market-research firm Eu- dle Americas business from takeover. In September, both “It came to a lot more than Customers at a Currys PC World store in London last November. romonitor raised its baseline Mexico City and become the AB InBev and SABMiller share- we expected,” he said. inflation forecast for the U.K. only SABMiller member of the holders are expected to vote Apple Inc. iPhones and declined to say by how much. British clothing and home- after the Brexit vote. It has re- combined brewer’s executive on the deal, which is expected iPads aren’t yet going up. The Car makers themselves haven’t products retailer Next PLC vised its forecast for next year management board. to close on Oct. 10. company hasn’t adjusted yet disclosed any price in- warned customers Wednesday up 0.7 percentage point, to The world’s largest brewer Gaining a foothold in the prices to account for currency creases, but executives in re- that a price increase was 2.3%, and up 0.8 percentage said it would continue to be fast-growing African beer moves for any of the devices it cent days have said it is only a likely. Hennes & Mauritz AB point, to 2.7%, in 2018. based in Leuven, Belgium, and market was a major reason AB sells here. matter of time. last month said the uncer- Big food retailers don’t ap- its global management team, InBev pursued its No. 2 rival. Germany’s Continental “Everybody is now waiting tainly surrounding Brexit pear to have raised prices, and AG—the world’s second-larg- for somebody to make the would affect U.K. sales but may not for some time. Many ADVERTISEMENT est automotive supplier by first step in terms of pricing didn’t say whether it would have hedges that insulate revenue—said Wednesday it adjustment,” said Carlos Tava- raise prices. them somewhat from higher had raised prices for its tires res, chairman of Peugeot- There isn’t yet comprehen- import costs. The Mart in the U.K., thanks to the big maker Groupe PSA, during an sive price data across sectors —Saabira Chaudhuri currency move. The company earnings call last week. in the six weeks since the Br- contributed to this article. AVIATION TRAVEL

GULFSTREAM G650 FOR SALE growth and financial stabil- measure is more evidence of stimulus outweighed the Save Up To 60% HEARD ity. Globally, loose monetary the risks that central banks risks to financial stability, Best deal in the pre-owned G650 market First & Business policy has raised many wor- are adding to the financial but the plan to aid banks 2013 MODEL Low hours/cycles INTERNATIONAL Customized for Long Range Travel Continuedfromthepriorpage ries about distorted markets. system. Low rates squeeze makesitclearheisawareof Major Airlines, Corporate Travel cus on growth and overlook Mr. Carney repeated the bank margins and hurt prof- the risks. PHILIP RUSHTON AVIATRADE INC Never Fly Coach Again! 1-908-696-1174 www.cooktravel.net a possible rise in inflation. mantra that bond purchases its, making banks look That judgment may be [email protected] (800) 435-8776 The bank lowered its fore- would push investors to take weaker. Investors have sold right in the short term. But castforgrowthbythelarg- more risk. But this process off bank shares in part be- increasingly, it is not just BUSINESS FOR SALE est amount ever, showing the risks inflating bubbles as the cause of that weakness. And that monetary policy is at Businesses economy crawling through search for yield has already there is some evidence that emergency settings, but the DESTINATION NEW YORK CITY? For Sale. the next 18 months. Despite pushed bond prices sky-high low stock prices can make length of time it is continu- Own this 129 year old, Full Service Manhattan the weakness, the bank does and led investors to embrace banks less likely to lend. The ing to spend there that is Based, Real Estate Firm - inactive since 2008. Advertise in The Mart. forecast a jump in inflation. riskier assets such as emerg- BOE plan is designed to off- raising concerns. Markets All Licenses still Active. Let our Reputation But that is due to the steep ing markets and high-yield set that risk by giving banks have had a sugar rush from of the Past Be an Asset to your Future. Call +44 (0) 203 207 2123 Full info at www.eosbornesmith.com fall in sterling, which will bonds. In the process, it has cheap funding if they main- the BOE’s policy action, but For further info contact only at: push up import prices. made the outlook for future tain or increase lending. doubts about the long-term [email protected] The second is much trick- returns poorer. Mr. Carney insisted that effects of policy makers’ ac- ier: the trade-off between The BOE’s bank funding the positive effects of the tions just got a boost too. For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com THE WALL STREET JOURNAL. Friday - Sunday, August 5 - 7, 2016 | B3

TECHNOLOGY @wsjd | wsjd.com Startups Take On Craigslist China’sUCAR

BY ROLFE WINKLER TargetsHighEnd An arms race is heating up to replace Craigslist, the domi- BY KANE WU “UCARisanupgradetoa nant force in online classifieds taxi, not a replacement of it,” the past two decades. HONG KONG—Meet an up- said CAR Inc. Chief Financial Startup companies OfferUp and-coming challenger in Officer Wilson Li. “We are a and Letgo are surging in pop- China’s ride-hailing market: supplement to public trans- ularity among people looking UCAR Inc. portation.” to buy and sell everything Uber Technologies Inc.’s UCAR remains several from used clothes to used cars sale of its China operations to blocks behind Didi, which had through their smartphones. Didi Chuxing Technology Co. 47 million active users in And deep-pocketed investors has opened up opportunities June. UCAR had about three are paying up for stakes in for smaller ride-hailing apps, million, according to research them even though they don’t and UCAR is quietly stepping firm Analysys International. charge for their services today. up in the luxury end of the That also put UCAR behind OfferUp is set to raise $120 market. UberChina, at 13 million, and million in funding led by pri- The valuation of UCAR, an Yidao, China’s oldest ride-hail- vate-equity firm Warburg Pin- affiliate of China’s largest car- ing app, at a little more than cus, say people familiar with rental business, CAR Inc., rose four million. UCAR covers 55 the matter. The Bellevue, to $6.8 billion from about $5.6 cities in China, compared with Wash., company’s valuation billion in the week after listing 400 for Didi.

would stretch to roughly $1.2 DAVID PAUL MORRIS/BLOOMBERG NEWS on China’s over-the-counter But the market opportunity billion from about $70 million Nick Huzar is chief executive of OfferUp, which is making a name for itself in online classifieds. market late last month. remains substantial. Credit Su- just two years ago. Its heavyweight backers in- isse Group analysts forecast The people familiar with Morgan Wirz, a 19-year-old operating profit margin of OfferUp at $800 million. clude U.S. private-equity firm China’s ride-hailing market the fundraising caution the college student in San Fran- 62%. Letgo, whose corporate Warburg Pincus LLC and a will grow 78%, to $68 billion, deal isn’t final and could still cisco who recently picked up a OfferUp was founded in name is Ambatana Holdings private-equity firm co-founded between now and 2020. fall apart. desk chair on OfferUp, said 2011 by Nick Huzar and Arean BV, has raised over $200 mil- by Alibaba Group Holding Beijing-based UCAR is run Rival Letgo has burst on the texting makes it easy to reach van Veelen, two entrepreneurs lion, according to a spokes- Ltd. founder Jack Ma. by 47-year-old Charles Lu, an scene with $100 million in new sellers and the site is fresher who wanted a place to buy man. That excludes Wallapop, While Didi and Uber have entrepreneur who founded financing and an extensive TV looking. “Craigslist drives me used goods from trusted on- a rival site whose U.S. opera- flooded the market with cheap CAR Inc. in 2007. ad campaign. Letgo’s promi- nuts because it’s ugly,” she line sellers. OfferUp is free for tions were merged into Letgo rides in private cars driven by UCAR has racked up signifi- nent backer, South African said. “It’s like small font, users, though it is testing in May. nonprofessionals—sparking cant losses of its own—includ- media giant Naspers Ltd., Times New Roman, gross.” ways to make money, say peo- Since launching its app last taxi-driver protests—UCAR of- ing $560 million in 2015—as it owns other classifieds sites A Craigslist spokeswoman ple familiar with the matter. summer, Letgo has nearly fers a dedicated fleet of rental spends to expand its business. around the world. declined to comment. Cheap cars are popular on matched OfferUp’s traffic with cars driven by chauffeurs. CICC analysts forecast a profit Facebook Inc., meanwhile, Despite tougher fundraising OfferUp, and investors are ask- 12.1 million U.S. users as of It is a costlier experience, by 2017. While the smaller is testing its own local classi- conditions, OfferUp and Letgo ing whether sellers would be June, estimates comScore. but regulations released last competitors face an uphill bat- fieds service supported by am- are proving that startups can willing to pay to list them, the Letgo’s iPhone app ranked month that limit ride-hailing tle against the newly enlarged ple cash and a social network still persuade investors to pay people say. sixth in downloads in the subsidies are expected to nar- Didi, UCAR sees potential to with 226 million users in the for potential. The prize in on- Craigslist charges $5 to list shopping category on Wednes- rowthepricegap.Thatgives carve out a lucrative niche. U.S. and Canada. line classifieds is the huge cars. EBay Motors charges day, according to research UCAR hope that more riders —Eva Dou in Beijing The companies are gunning profit margin available to the some 10 times that, though firm App Annie, behind could choose its service. contributed to this article. for Craigslist, which upended winning site that solves the the cars listed are typically fourth-ranked OfferUp. newspaper classifieds during chicken-and-egg problem of higher quality. A series of humorous 30- the dot-com boom and now building the biggest network An OfferUp spokeswoman second TV ads has raised Road Race has 70 million U.S. visitors a of buyers and sellers. declined to comment. awareness, showing people in How Didi Chuxing and its ride-hailing challengers in China stack up. month, according to comScore. Listing fees at privately OfferUp’s U.S. traffic nearly dangerous situations clinging But Craigslist appears vulnera- held Craigslist generated sales tripled over the past year to to something they don’t need. Didi ChuxingUCAR Yidao ble in the smartphone era: It of $381 million and profit of 12.6 million users, according “It’s time to let go,” the com- Valuation $36 billion* $6.8 billion $1 billion** has a modest website that has $300 million in 2015, esti- to comScore, despite limited mercials declare. Headquarters Beijing Beijing Beijing changed little since 1995, and mates AIM Group analyst Pe- marketing. OfferUp had $60 The startups are keeping an relies on third-party mobile ter M. Zollman. He argues the million of cash on hand as of eye on Facebook. Many of its CEO Wei Cheng Charles Hang Zhou apps that can make placing company could increase sales May, two-thirds of its previous users post items for sale, so Zhengyao Lu ads clunky. many times over by charging funding, said people close to last year it created a market- Cities covered 400 55 101 (24 outside OfferUp, Letgo and a few higher prices for a wider the company. place to collect the ads in one China) other challengers are tailored range of ads. The haul will increase to place. Daily orders for mobile. Sellers post ads af- In a market one-sixth the over $200 million once the A Facebook spokesman said for chauffeured size of the U.S., French classi- new investment is completed. 300,000250,000 40,000 ter snapping photos with their the company is testing the cars smartphone camera. Buyers fied’s service Leboncoin, a unit Last year investors including feature. If it catches on, the reach sellers quickly via text of Schibsted Media Group, had mutual-fund giant T. Rowe social network could prove a instead of Craigslist’s slower revenue of about €180 million Price and venture-capital firm formidable player in classi- *After acquisition of UberChina **After LeEco bought a controlling stake last October email system. ($200 million) in 2015 and an Andreessen Horowitz valued fieds. Sources: the companies; CICC report (daily orders) THE WALL STREET JOURNAL. Nokia Reports Another Loss

BY MATTHIAS VERBERGT

Nokia Corp. posted a net loss for the second consecu- tive quarter on expenses re- lated to its acquisition of rival telecoms-equipment supplier Alcatel-Lucent SA, vowing to step up cost cuts amid tough trading conditions. The Finnish telecom-equip- ment maker on Thursday re- ported a net loss of €665 mil- lion ($741 million) for the second quarter ended in June, compared with a net profit of AN ARTISTIC ESCAPE €347 million in the year-ear- lier period as a stand-alone company.

Excluding costs related to IRENE STACHON/LEHTIKUVA/REUTERS the Alcatel acquisition in addi- Nokia, with headquarters in Espoo, Finland, plans more cost cuts. tion to a range of other items that weren’t necessarily indic- and revenue at €5.76 billion. nomic growth. ative of Nokia’s underlying The decline in sales was At the same time, Nokia is performance, Nokia said sec- largely due to a weak quarter facing competition from Chi- ond-quarter profit shrank 45% in mobile networks, Nokia nese companies Huawei Tech- to €194 million from €355 mil- said. The Finnish company’s nologies Co. and ZTE Corp., lion a year earlier. sluggish three months mirrors two players that have gained Revenue, while up sharply a sector-wide trend of slowing significant market share in a at €5.68 billion on the Alcatel demand and increased compe- few years’ time by offering in- deal from €2.92 billion re- tition in wireless telecom gear. novative products at competi- ported in the same period last In recent months, the in- tive prices. year, fell 11% when compared dustry has been hit by slower Nokia said it now is target- with the €6.36 billion in com- demand for network upgrades ing €1.2 billion in annual cost bined revenue Nokia and Alca- from telecom carriers in es- savings by 2018, compared tel reported separately in the tablished markets, as many of with €900 million it had an- year-earlier second quarter. them last year completed the nounced before. Analysts, according to a rollout of new-generation It recorded around €600 poll by data provider FactSet, wireless networks, while ser- million of restructuring and had estimated Nokia’s second- vice providers in emerging associated charges in the sec- quarter profit at €207 million markets face faltering eco- ond quarter.

ing an article as more likely to according to Quantcast data. CLICKS be clickbait if many users view “At the start of this year, a post for just a second or two Upworthy pivoted to focus its and then return to Facebook, resources on video, and that ContinuedfrompageB1 or if users “like” a post but decision paid off: just last mately disappoint the reader. then rapidly unlike it. month, Upworthy saw 330 mil- But many of Facebook’s 1.7 bil- The changes reduced traffic lion video views,” an Upworthy lion users can’t help but click from Facebook to some pub- spokesman said. on such headlines. He added that Upworthy’s Over the past 2½ years, unique views measure doesn’t Facebook has attempted to Facebook takes aim include Instant Articles, fast- squash clickbait by pushing it at headlines that loading articles hosted by down the news feed, while also Facebook. Instant Articles, promoting what it describes as either ‘withhold’ launched last year, do not di- “high-quality” content. or ‘mislead’ users. rect users to Upworthy’s site. WITH THE WALL STREET JOURNAL “The idea is to try to create To devise its new formula, NEXT FRIDAY. incentives for publishers to Facebook created guidelines create headlines that people lishers. One example was so- around what constituted click- want to read,” Mr. Mosseri cial-media-centric publisher bait and then asked employees said. Upworthy, which drew 88 mil- to classify tens of thousands of In December 2013, Facebook lion unique visitors in Novem- headlines as clickbait or not. said it would prioritize links to ber 2013. Since the Facebook Facebook used this data to articles about current events changes, traffic to Upworthy’s build software that reads ev- over “the latest meme.” website has plunged. In July, ery headline and gives it a ©2016 Dow Jones & Company, Inc. All rights reserved. 3DJ3629 In 2014, Facebook began its monthly unique visitors score based on how similar it factoring in user behavior, rat- hovered around eight million, is to clickbait. For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com B4 | Friday - Sunday, August 5 - 7, 2016 THE WALL STREET JOURNAL. BUSINESS NEWS BooksellersAwaitAnchor’sMemoir Siemens

Fox News’s Kelly got Delivers advance for her book in range of $6 million; Stronger post-election release

BY JEFFREY A. TRACHTENBERG Outlook AND JOE FLINT

Booksellers have high hopes BY CHRISTOPHER ALESSI for Fox News star Megyn Kelly’s coming memoir, “Settle MUNICH—German indus- for More,” which promises the trial giant Siemens AG man- behind-the-scenes scoop on aged to do in its third quarter her public feud with Republi- what many of its rivals have can presidential candidate struggled to achieve: earn Donald Trump. money in the energy business. While the memoir was ex- Siemens on Thursday raised pected to be of interest be- its guidance for fiscal year cause of the Trump material, 2016 after strong results at the booksellers say any revela- company’s energy operations, tions related to her former Fox in the latest sign that Chief Ex- News boss Roger Ailes would ecutive Joe Kaeser’s promise make it a more sought-after to deliver profitability this read. Mr. Ailes resigned last year is on track. month in the wake of sexual- The company now expects harassment allegations after earnings per share from net 20 years with the network. income for the full year in a “If this book is her memoir, range of €6.50 to €6.70 ($7.25

it will be hard not to have CHRIS CARLSON/ASSOCIATED PRESS to $7.47), up from a previous Roger Ailes in the book,” said Fox News anchor Megyn Kelly moderated the Republican presidential primary debate in Des Moines, Iowa, in January. estimate of €6 to €6.40. Cindy Dach, co-owner and Quarterly net profit re- general manager of Changing Kline, the retailer’s vice presi- The book is embargoed, which women’s rights. She also tion about Mr. Ailes’s exit and mained flat as a result of Hands Bookstore, which has dent of books. Terry Finley, means the publisher isn’t re- hasn’t been afraid to challenge the investigation could spur losses at some of the com- ordered the book for both of chief executive of Books-A- leasing early copies. on-air assertions by col- more publicity and sales, pany’s centrally managed port- its stores in Tempe, Ariz., and Million Inc., which has a “Reviewers tend to ask if leagues, such as the time in which would be good for Har- folio activities, including from Phoenix. heavy concentration of stores thereisarevelationhereor 2012 when she took on com- perCollins. a stake in a heavy-metals joint A person familiar with the in Republican-leaning states not when it comes to a celeb- mentator Karl Rove’s election- On the other hand, such venture. matter said Ms. Kelly was paid where readers devour conser- rity memoir,” said Mark night claim that Barack Obama revelations could prove prob- Net profit totaled €1.33 bil- an advance for the book in the vative titles, calls it a sure LaFramboise, buyer for the hadn’t won Ohio in the contest lematic for Fox News as it lion ($1.48 billion) for the range of $6 million. best-seller in the U.S. Politics & Prose bookstore in against Mitt Romney. tries to move past this dark three months ended June 30, Ms. Kelly’s manuscript was A summary on the website Washington, D.C. “The hope is Over the past few years, chapter. compared with €1.36 billion a due at HarperCollins in late of the book’s publisher, Harp- that there will be.” ratings for her show “The HarperCollins is keeping year earlier, beating analysts’ spring, the person said. That erCollins Publishers promises Ms. Kelly posed tough ques- Kelly File” have risen dramati- mum on whether it has asked forecasts. Analysts had pre- was roughly two months be- “never-before-heard details” tions to Mr. Trump during a cally and she now averages 2.4 Ms. Kelly to provide additional dicted a net profit of €1.2 bil- fore former Fox News anchor of the Republican debate Ms. presidential debate about dis- million viewers, according to material to address the scan- lion, according to a recent poll Gretchen Carlson sued Mr. Kelly moderated that set off a paraging remarks he made Nielsen, trailing only Bill dal. It is also unclear whether conducted by The Wall Street Ailes for sexual harassment, monthslong conflict with Mr. about women. He responded O’Reilly at the network. Ms. Kelly, whose contract with Journal. alleging he didn’t renew her Trump, as well as a discussion by attacking her on Twitter Ms. Kelly’s “Settle for FoxNewsisupnextyear,has Thepowerandgasand contract because she com- of “how she approaches gen- and in interviews, even saying More” has announced a first a nondisclosure agreement wind divisions drove bottom- plained about a hostile work der in the workplace.” she had “blood coming out of printing of two million copies, that prevents her from divulg- line growth. Profit at power environment and rebuffed his When Ms. Carlson filed her her eyes, blood coming out of a large number by today’s ing details. and gas jumped 69% to €480 advances. He has denied the suit, Fox News parent com- her—wherever.” standards and 500,000 more A spokeswoman for Harper- million, while wind profit more accusations. pany 21st Century Fox re- A lawyer by training, Ms. copies than HarperCollins ini- Collins declined to comment than doubled to €143 million. The Kelly memoir is sched- tained the law firm Paul, Kelly can often seem like she tially printed of Sarah Palin’s and said that Ms. Kelly was uled to be released Nov. 15, a Weiss to investigate. is prosecuting a case when in- 2009 best-seller “Going unavailable for an interview. A The German week after the presidential Ms. Kelly has been publicly terviewing guests. Rogue.” spokeswoman for 21st Century election. A veteran publisher silent on Mr. Ailes’s resigna- She doesn’t fit neatly into 21st Century Fox and News Fox also declined to comment. company’s energy at a rival house said that, tion and alleged behavior, but the mold of most Fox News Corp, which owns both Harp- Mr. Ailes’s lawyer, Susan Es- businesses drive based on typical publishing New York Magazine reported prime-time stars. While Ms. erCollins and The Wall Street trich, didn’t respond to a re- timetables, there is still a win- in mid-July that Ms. Kelly told Kelly has taken positions Journal, both count the Mur- quest for comment. bottom-line growth. dow for Ms. Kelly to add new investigators that Mr. Ailes shared by many conserva- doch family as a major share- One bookseller said if the material if she chooses. had made unwanted advances tives—she has questioned the holder. Rupert Murdoch is ex- book is light on revelations, it The hardcover edition will toward her years earlier, validity of the Black Lives ecutive chairman of News won’t necessarily hurt overall Revenue increased 5% to retail for a steep $29.99, which he has denied. Ms. Matter movement and criti- Corp and 21st Century Fox and sales. €19.8 billion. New orders rose though Barnes & Noble Inc.’s Kelly’s lawyer would only say cized Democratic efforts on became acting chief executive “She’ll do a media tour, and 6% to €21.06 billion, boosted website is offering signed, pre- she was interviewed as part of gun control, such as the House of Fox News after Mr. Ailes the publicity campaign will be by growth at the power and order copies at a discount for the investigation. Democrats’ sit-in earlier this stepped down on July 21. enormous,” said Sarah Bagby, gas and wind divisions. $21.50. If the news anchor side- summer—she has at times For the Murdochs’ overall co-owner of Watermark Books Siemens’s better-than-ex- Barnes & Noble predicts it steps the recent events at Fox stood out from colleagues by business interests, “Settle for & Café in Wichita, Kan. “She pected results come as other will be “one of the biggest News in her book, it could being a contrarian voice on More” could prove a tricky doesn’t have to go into the is- industrial companies, includ- books of the year,” said Daisy turn off readers and critics. some social issues including balancing act. New informa- sue of harassment.” ing U.S.-based General Electric Co. and Honeywell Interna- tional Inc., have been weighed down by slow growth and low Viacom Chief Tries to Look Beyond Legal Dispute oil prices. While Siemens has also been hit by overcapacity in the BY JOE FLINT questioned the wisdom of sell- National Amusements said. oil and natural-gas sector, it is AND LISA BEILFUSS ing a chunk of Paramount, a In response, a Viacom capitalizing on large orders in key dispute that set off the re- spokesman said the company power generation and renew- A legal battle for control of cent power struggle. continues to execute on a stra- able energy, while benefiting Viacom Inc. continues to ham- Besides a Paramount deal, tegic plan supported by inde- from a rigorous cost-cutting per the media company’s abil- Mr. Dauman said the fight is pendent directors. and restructuring program. ity to make deals and conduct “creating an overhang for our For the quarter ended in Investors and analysts have business, but Chairman and company.” The uncertainty, he June, Viacom reported a profit been looking at fiscal 2016 to Chief Executive Philippe said, has led to a slowdown in of $432 million, or $1.09 a be the year in which Mr. Dauman said recent court de- talks for a significant subscrip- share, down from $591 million, Kaeser’s extensive restructur- cisions have him feeling opti- tion video licensing deal that or $1.47 a share, a year earlier. ing measures, after years of mistic about a possible resolu- he said would be a boost to the Excluding a tax benefit, per- stagnation, begin to pay off. tion. company’s bottom line. Such a share earnings fell to $1.05 Siemens shares rose 4.5% to Last week, courts in both deal was expected to be com- from $1.47. The company was €101.15 in Frankfurt. Massachusetts and Delaware pleted already but has been hurt by the continued weak Analysts widely applauded said legal efforts to scrutinize delayed. performance at many of its ca- Siemens’s results.

the mental capacity of Viacom LULA CARVALHO/PARAMOUNT PICTURES/EVERETT COLLECTION National Amusements reit- ble networks including MTV, “Very little of this is down controlling shareholder Sumner ‘Teenage Mutant Ninja Turtles’ was a box-office disappointment. erated its call for new leader- higher costs and a poor box-of- to end markets,” according to Redstone can go to trial in Octo- ship atop Viacom on Thursday, fice showing. Revenue edged analysts at Jefferies. The “ex- ber. In Massachusetts, Mr. third-quarter results. matter, has reported that Via- criticizing the “steep erosion” up 1.6% to $3.12 billion. cellent” results are instead the Dauman and another Viacom Before those rulings, Via- com is in talks with China’s in the company’s financial and Analysts polled by Thomson result of Siemens “reducing board member are fighting their com had been engaged in set- Dalian Wanda Group Co. to sell operating performance. In par- Reuters had projected $1.01 in costs, delivering large projects removal from a trust that will tlement talks with Mr. Red- a 49% stake in Paramount in a ticular, National Amusements adjusted earnings per share on on time and on budget and oversee 93-year-old Mr. Red- stone’s holding company, deal that would value the stu- highlighted Viacom’s stock de- $3.01 billion in revenue. Via- winning share from competi- stone’s holdings in Viacom and National Amusements Inc., dio at $8 billion to $10 billion. cline, exodus of creative talent, com had lowered its expecta- tors,” the analysts said. its sister company, CBS Corp., that potentially could have led “The process has slowed declining cable ratings and tions in June. Growth at the power and after he dies or is incapacitated. to Mr. Dauman’s resignation down in recent weeks,” Mr. weakening credit rating out- Viacom’s filmed entertain- gas business—held back in re- In Delaware, Mr. Dauman and and Chief Operating Officer Dauman said of a possible Par- look as reasons why its at- ment revenue, meanwhile, rose cent quarters by low oil four other directors are disput- Tom Dooley being named in- amount deal. The recent court tempted board overhaul 30% from a year earlier, thanks prices—was boosted by large ing their attempted ouster from terim chief executive, people rulings, he expects, will allow should proceed. largely to higher licensing fees. orders, including those related the Viacom board. familiar with the matter said. Viacom management “to prog- “The current board contin- But the underperformance of to the expansion of thermal “We view these favorable The legal tussle has slowed ress with several parties” and ues to allow Viacom to remain “Teenage Mutant Ninja Tur- plants in Bolivia. Revenue court rulings as positive steps Viacom’s efforts to sell a minor- “create a better environment” in a state of prolonged and tles: Out of the Shadows” and growth was also driven by the that move us ahead toward a ity stake in its struggling Para- to present potential sales to costly paralysis, obstructing rising costs pulled the film execution of the company’s resolution,” Mr. Dauman told mount Pictures movie unit. the board. National Amuse- changes that are essential to unit to a loss of $26 million, backlog, including an €8 bil- analysts on a conference call The Wall Street Journal, cit- ments and Mr. Redstone, revitalize the company’s assets down from a year-earlier lion power-generation deal to discuss the company’s fiscal ing people familiar with the through representatives, have and create long-term value,” profit of $48 million. with Egypt.

month, the latest in a series of according to people familiar with ing attack in U.S. history. Business divestments in Asia. The com- the situation. Orlando is SeaWorld’s head- pany is looking to raise up to —Kane Wu and Dan Strumpf quarters and is home to its larg- Watch $10 billion globally from asset est theme park as measured by sales, a big chunk of which will SEAWORLD ENTERTAINMENT attendance and revenue. come from its Asia upstream op- Attendance at the start of its erations, as part of a broader ef- Low Attendance critical summer season fell 7.6% fort to cut costs and adapt to an Hurts Revenue to 5.98 million in the second environment of lower oil prices. SeaWorld Entertainment Inc. quarter. The second and third CHEVRON Among the assets Chevron is posted disappointing results Thurs- quarters typically account for looking to sell is its stake in an day as fewer people visited its nearly two-thirds of annual reve- Oil Company Plans offshore oil-field production ven- Florida parks after a terrorist at- nue. To Scale Back in Asia ture with China’s state-owned oil tack in Orlando and amid economic For the quarter, SeaWorld re- Chevron Corp. is paring its company Cnooc Ltd., which could weakness in Latin America. ported a profit of $17.8 million, Asia operations, selling assets val- fetch as much as $1 billion, ac- SeaWorld said Thursday it or 21 cents a share, up from a ued at up to $5 billion in an effort cording to people familiar with saw “an overall downturn in the year-earlier profit of $5.8 million, to raise cash, according to people the situation. Orlando market in the latter half or 7 cents a share. familiar with the situation. The asset could be attractive of June.” In the early morning of Excluding certain items, the The California-based energy to a range potential bidders in- June 12, Omar S. Mateen killed company’s profit was 21 cents.

giant is set to begin selling its cluding Chinese energy compa- 49 people at the Pulse nightclub Revenue fell 5.2% to $371.2 million. RUARIDH STEWART/ZUMA PRESS offshore China assets this nies and sovereign-wealth funds, in Orlando, the deadliest shoot- —Austen Hufford Attendance fell 7.6% at all SeaWorld parks. Above, San Diego. For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com THE WALL STREET JOURNAL. Friday - Sunday, August 5 - 7, 2016 | B5 FINANCE & MARKETS French Terror Fund Running Low London Isn’t the Government is in talks with AXA and others on a higher tax on Costliest insurance policies City Now BY NICK KOSTOV AND ALEXA LIAUTAUD BY ART PATNAUDE

The surge in terror attacks London has been knocked across France is draining a from its perch as the world’s fund for compensating victims most expensive city to live and faster than the insurance in- work in after Britain’s vote to dustry can replenish it. leave the European Union. President François Hol- The U.K. capital is now third lande’s government has been behind New York and Hong in talks with France’s largest Kong, according to research on insurer, AXA SA, and other global cities from property bro- industry players since Febru- ker Savills. ary about how insurance com- The research examines the panies can shore up funding costs for an employee to live in of a government-run program rented housing and work in an that pays families of terror office for a year. victims and people injured in London had spent the last attacks, AXA France Chief Ex- 2½ years at the top. But it fell ecutive Jacques de Peretti in July because of the drop in told reporters Wednesday. sterling against the dollar and Government officials said cooling U.K. real-estate mar- they aim to announce an kets, both of which accelerated agreement in September. after the EU referendum in “This contribution is quite June. insufficient to face up to the “Brexit has made London

recurring terrorist acts,” Mr. LAURENT CIPRIANI/ASSOCIATED PRESS more competitive, at least in de Peretti said. A French flag and flowers form a memorial for the victims killed during an attack on the famed Boulevard des Anglais in Nice. terms of cost,” said Yolande The potential shortfall is a Barnes, head of world research measure of how the insurance as recently as January. But in- Government officials said didn’t suffer a physical injury. on payouts for people who are at Savills. “Of course, other fac- industry must adapt to what dustry players say that in- the fund easily had the “A lot of people are becom- deemed unable to return to tors might mean it won’t be.” some are calling a “new nor- crease won’t be enough. means to reimburse all the ing a lot more aware of the work, she said. Following years of booming mal” across the Continent, in “We are working with the victims but said a concern ability to claim for these On July 28, the government property values, London com- which people inspired by Is- public authorities to see how would be compensating for losses—maybe this is kind of a announced it had made the mercial real-estate prices have lamic State and other radical wecanfaceuptothisnew future attacks. claim culture, or a compensa- first payments to terror vic- been falling, after gains had groups carry out attacks on need for funding probably via The Nov. 13 Paris attacks tion culture that’s crept in tims in Nice totaling €300,000. slowed before Brexit, while cafes, concert venues and the increase in the tax and that killed 130 people are es- maybe from the [United] People who draw on the house prices in expensive other “soft targets” more probably via other contribu- timated to cost €350 million States,” said Srdjan Todorovic, state-run fund can still claim neighborhoods have been de- frequently. tions that the government in claims in the coming head of terrorism at insurer payouts from private insurance clining for more than a year. The government estab- may make available,” Mr. de years, according to govern- Allianz’s corporate and spe- policies that cover damages re- Meanwhile, in New York lished the Guarantee Fund for Peretti said. ment officials. cialty services business. sulting from terror attacks, ac- real-estate rents have increased Victims of Terrorist and Other Even before the drumbeat The fund has compensated cording to France’s National marginally, Ms. Barnes said. Criminal Acts, or FGTI, in of terror attacks began in Jan- about 2,300 victims of those Insurers Association. Total accommodation costs 1986 to prevent insurance uary 2015 with the assault at attacks so far, said Françoise 2,300 Some insurers have re- in New York for one employee companies from developing a the office of Charlie Hebdo Rudetzki, a member of the sponded by tailoring coverage over a year were $114,010 in cottage industry that might magazine that killed 12 people, FGTI’s board. Victims of Nov. 13 Paris to the shifting security envi- July, up 2% from December last profit from the violence. The the FGTI was running a deficit, The attacks in Nice—in attacks that have been ronment, selling policies that year, the data show. The cost in fund also provides insurers according to the fund’s pub- which a man drove a truck compensated so far cover international events Hong Kong was up 1% to with a financial buffer from licly disclosed accounts. At through a crowd of an esti- ranging from terror attacks to $100,984. London costs fell 11% terror attacks. that time, annual compensa- mated 30,000 people for more violence during protests and to $100,141. The government requires tion for terror victims was in than a mile, killing 84 people Ms. Rudetzki of the FGTI other civil unrest. In December of last year, insurers to fund FGTI through the €10 million range, Mr. de and injuring hundreds more— said family members of victims Four months after the “New York was nipping at the an “attack tax” on the 80 mil- Peretti said. also will be costly and com- who died in the attack in Nice Charlie Hebdo attacks, Allianz heels of London. They were vir- lion policies currently in force Since then, compensation plex to calculate. Under the are likely to receive as much as began offering stand-alone tually on par,” Ms. Barnes said. across France, from auto- to has increased significantly, rules of the fund, anyone €40,000. Those who were in- terrorism insurance, Mr. Todo- Tokyo climbed to fourth on life-insurance policies. Paris erasing some of the €1.3 billion within the official perimeter of jured will be compensated de- rovic said, adding: ”There’s a the list, with accommodation raised the attack tax to €4.30 in reserves the fund had at the the attack is eligible to claim pending on the severity of growing sort of demand for costs rising 22% to $85,334, the ($4.79) per policy from €3.20 end of 2015. compensation, even if they their injuries. There is no limit this sort of business.” report said. MetLife Beware Company ‘Earnings Before Bad Stuff’

To Pare BY MICHAEL RAPOPORT 11% of the non-GAAP group. themselves look healthier. Pushing the Envelope Some of the numbers are A study in June by financial Regulators and investors are small, and the use of non-GAAP data-research firm Calcbench Heavy users of ‘non-GAAP’ earnings metrics are 33 $1 Billion increasingly wary when com- more likely to encounter some accounting problems metrics didn’t specifically and corporate-compliance con- panies overemphasize their than companies that stick to GAAP measures. 30 cause or relate directly to the sultant Radical Compliance own customized earnings met- companies’ accounting showed non-GAAP metrics in- In Costs rics. New research shows they S&P 1500 companies 25% flaws. Audit Analytics cau- flated 2015 earnings by $164.1 may have a point. tioned more research is billion over GAAP at a group of BY LESLIE SCISM Companies that report sig- GAAP-only companies needed. Still, the results sug- 816 public companies. nificantly stronger earnings by Companies using non-GAAP gest companies using non- In May, the Securities and MetLife Inc. will cut $1 bil- using tailored figures like “ad- income metrics GAAP metrics heavily “may be Exchange Commission issued lion, or 11%, in costs by the end justed net income” or “ad- Companies with non-GAAP somewhat less rigorous in new guidelines warning com- of 2019 with some job losses, as justed operating income” are income metrics that improve other accounting areas” than panies against placing too the big insurer reacts to pro- more likely to encounter some GAAP income by 100%+ 11 companies using only GAAP, much emphasis on non-GAAP 8.5 tracted ultralow interest rates kinds of accounting problems 7.5% said Robert Pozen, a senior lec- metrics. that have pressured earnings of than those that stick to stan- 6.5 turer at the MIT Sloan School The commission also has 4.5 life insurers, the company said dard measures, according to 3.8% of Management. been taking issue with compa- Thursday. research by consulting firm Companies are allowed to nies’ non-GAAP disclosures MetLife Chief Executive Ste- Audit Analytics. use nonstandard metrics as more frequently in comment ven Kandarian told analysts The rules allow companies Formal Material weaknesses Revision long as they also provide GAAP letters critiquing the compa- and investors during a confer- to report such tailored figures, restatements in internal controls restatements numbers and show the differ- nies’ SEC filings. ence call following Wednes- and the research, conducted Note: Companies’ use and prominence of non-GAAP metrics are based on fiscal 2015 results. ences between the two. The For each accounting prob- day’s disappointing second- for The Wall Street Journal, Restatements and other accounting problems are for 2011-2015. tailored measures strip out un- lem examined in the Audit An- quarter earnings that the cost doesn’t necessarily mean such Source: Audit Analytics THE WALL STREET JOURNAL usual or noncash items to pres- alytics survey—restatements, cutting “will require us to re- companies are less scrupulous ent what companies say is a control weaknesses and so duce head count.” MetLife in their bookkeeping. But it vyatsky, Audit Analytics’s vice 2015. Among heavy users of clearer picture of performance. on—the trend was the same. shares were off 9% Thursday does suggest that heavy use of president of research. Heavy non-GAAP measures—those Even critics acknowledge The problems occurred at rela- morning in New York. metrics outside of generally ac- use of non-GAAP metrics may whose non-GAAP earnings the tailored metrics can some- tively low levels in the GAAP- The Federal Reserve has cepted accounting principles— indicate a company’s account- were at least twice as high as times be helpful—showing a only group, at higher levels used ultralow interest rates sometimes referred to deri- ing is “more aggressive,” she their GAAP net income—the company’s results in constant among all non-GAAP users and since the 2008 global financial sively as “earnings before bad said. rate was 6.5%. currency is a legitimate adjust- at still-higher levels among crisis to help revive the econ- stuff”—could be a warning The study focused on com- Similarly, 7.5% of the ment, for instance, Mr. Pozen heavy non-GAAP users. omy, and though rates had be- sign. panies in the S&P 1500 index. GAAP-only group had mate- said. Any connection between gun edging up, they were set “I would say an overpromi- It found that just 3.8% of those rial weaknesses in internal But there is also a concern non-GAAP metrics and ac- back by the U.K.’s vote in June nent user of non-GAAP metrics exclusively using standard controls—flaws in their pro- they are being abused, that counting problems doesn’t au- to exit the European Union, would justify more attention GAAP metrics had formal earn- cedures to prevent financial companies are stripping out tomatically signal aggressive creating a flight to safety in and is a red flag,” said Olga Us- ings restatements from 2011 to errors and fraud—versus normal, ongoing costs to make practices. U.S. Treasurys. Insurers invest premium dol- lars from customers until the money is needed for claims, For U.S. Jobs Report, It Is the Moment of Truth and U.S. life insurers typically favor longer-term, high-quality bonds, priced off the 10-year BY STEVEN RUSSOLILLO roughly identical to the six- one reason the jobs report sending the Dow Jones In- Treasury. The life-insurance in- month average of 172,000, has broader implications for Help Wanted dustrial Average up nearly dustry has been among the Will the real jobs report but lower than the monthly the Federal Reserve. Average hourly earnings 200 points that day. There hardest hit by low-interest please stand up? averages of 229,000 last Between disappointing of private-sector workers, was more relief that the rates around the globe. May’s disappointing year and 251,000 in 2014. second-quarter U.S. growth, change from a year earlier jobs market rebounded than Mr. Kandarian said he ex- 11,000 payroll gain was fol- The unemployment rate is the Bank of England’s inter- worries about the Fed rais- 3.0% pects Treasury rates to remain lowed by June’s robust expected to have dropped to est-rate cut and expanded ing rates. “lower for longer,” saying such 287,000 in- 4.8% from 4.9%. stimulus package, and the This time, a very strong a scenario “is not going away AHEAD crease. The Slowing jobs growth is coming U.S. presidential 2.5 or a very weak number anytime soon and life-insurance OF THE July data will consistent with labor-mar- election, investors are bet- might make investors ner- companies will need to adapt.” TAPE be the tie- ket performance in the lat- ting that a U.S. rate increase vous. Even though the Dow In the face of such low rates, breaker. Projec- ter stages of economic ex- later this year looks increas- 2.0 snapped a seven-session “MetLife must do even more to tions suggest pansions. If that is true, the ingly unlikely. losing streak earlier this avoid simply running in place.” the U.S. jobs market is number to watch is average Federal-funds futures 1.5 week, it remains up more The cost cutting will occur somewhere in between the hourly earnings, which rose show only a 12% likelihood than 5% for the year and as the nation’s biggest life in- previous two months’ num- 2.6% in June, matching the of a rate-increase happening 2011 ’12 ’13 ’14 ’15 ’16 within striking distance of surer by assets continues with bers. That would put it in a biggest increase since 2009. at the Fed’s September Source: Labor Department its record high. plans to divest a large part of sweet spot of solid but not That would show that hiring meeting and 30% odds in THE WALL STREET JOURNAL. After two extreme jobs its U.S. retail life-insurance op- overheated growth. is slowing as workers be- December. reports, one that falls in the erations, probably by a spinoff Economists polled by The come scarcer and, therefore, It would take at least de- would shut the door on such middle might be just right or initial public offering, for Wall Street Journal forecast more expensive. cent jobs data to keep the a move in 2016. for investors. strategic and regulatory rea- July nonfarm-payroll gains Higher wages often trans- prospect of a rate increase Investors cheered upbeat sons. of 179,000. That would be late into inflation. That is alive. A bad number likely jobs numbers last month, Email: [email protected] For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com B6 | Friday - Sunday, August 5 - 7, 2016 THE WALL STREET JOURNAL. MARKETS DIGEST

Nikkei 225 Index STOXX 600 Index S&P 500 Index Data as of 4 p.m. New York time Last Year ago 16254.89 s171.78, or 1.07% Year-to-date t 14.60% 337.84 s2.26, or 0.67% Year-to-date t 7.65% 2164.25 s0.46, or 0.02% Trailing P/E ratio * 25.03 21.59 High, low, open and close for each 52-wk high/low20808.69 14952.02 High, low, open and close for each 52-wk high/low 400.70 303.58 High, low, open and close for each P/E estimate * 18.42 17.82 38915.87 12/29/89 414.06 4/15/15 2.11 2.01 trading day of the past three months. All-time high trading day of the past three months. All-time high trading day of the past three months. Dividend yield All-time high: 2175.03, 07/22/16

* P/E data based on as-reported earnings from Birinyi Associates Inc. 17500 360 2170

65-day moving average 17000 65-day moving average 350 2130

16500 340 2090

Session high 16000 330 2050 DOWN UP

Session open tt Close 15500 320 2010 Close Open 65-day moving average

Session low 15000 310 1970

Bars measure the point change from session's open 14500 300 1930 May June July May June July May June July

International Stock Indexes Data as of 4 p.m. New York time Global government bonds

Latest 52-Week Range YTD Latest, month-ago and year-ago yields and spreads over or under U.S. Treasurys on benchmark two-year Region/Country Index Close NetChg % chg Low Close High % chg and 10-year government bonds around the world. Data as of 3 p.m. ET 2394.50 0.42 2033.03 2547.27 2.5 World The Global Dow 10.08 • Country/ Spread Over Treasurys, in basis points Yield MSCI EAFE 1662.62 9.12 0.55 1471.88 • 1956.39 –3.1 Coupon Maturity, in years Yield Latest Previous Month Ago Year ago Previous Month ago Year ago MSCI EM USD 877.46 9.28 1.07 691.21 • 1044.05 10.5 3.250 Australia 2 1.488 83.7 81.5 103.2 118.1 1.486 1.629 1.913 1.953 45.0 52.1 1.939 2.747 Americas DJ Americas 521.89 0.57 0.11 433.38 • 524.80 7.1 4.250 10 39.3 57.4 2.018 1.250 -0.598 -124.9 -90.7 -0.564 -0.175 Brazil Sao Paulo Bovespa 57542.16 465.25 0.82 37046.07 • 58030.38 32.7 Belgium 2 -123.5 -117.6 -0.578 1.000 0.145 -135.7 -125.8 0.206 0.967 Canada S&P/TSX Comp 14526.98 14.93 0.10 11531.22 • 14609.02 11.7 10 -134.0 -138.3 0.061 1.000 -0.544 -119.5 -120.0 -92.0 -0.529 -0.188 Mexico IPC All-Share 46926.87 82.34 0.18 39256.58 • 47785.29 9.2 France 2 -116.1 -0.564 0.500 10 0.129 -137.4 -135.4 -127.9 -127.0 0.192 0.164 0.955 Chile Santiago IPSA 3206.25 12.57 0.39 2730.24 • 3243.62 8.9 0.000 Germany 2 -0.608 -125.9 -126.8 -126.6 -97.6 -0.597 -0.668 -0.243 U.S. DJIA 18352.05 –2.95 –0.02 15370.33 • 18622.01 5.3 0.000 10 -0.094 -159.7 -158.1 -158.1 -162.2 -0.036 -0.137 0.603 Nasdaq Composite 5166.25 6.51 0.13 4209.76 • 5199.13 3.2 0.250 Italy 2 -0.091 -74.2 -72.2 -71.6 -66.7 -0.051 -0.119 0.066 S&P 500 2164.25 0.46 0.02 1810.10 • 2178.29 5.9 1.600 10 1.146 -35.7 -32.4 -28.2 -45.1 1.221 1.162 1.774 CBOE Volatility 12.40 –0.46 –3.58 11.40 • 53.29 –31.9 0.100 Japan 2 -0.176 -82.7 -84.6 -91.9 -72.2 -0.175 -0.321 0.011 337.84 303.58 400.70 –7.6 EMEA Stoxx Europe 600 2.26 0.67 • 0.100 10 -0.076 -157.9 -163.0 -169.2 -183.3 -0.085 -0.248 0.392 Stoxx Europe 50 2840.03 19.98 0.71 2556.96 • 3490.68 –8.4 4.000 Netherlands 2 -0.592 -124.3 -124.4 -119.8 -94.6 -0.574 -0.601 -0.213 Austria ATX 2187.67 21.09 0.97 1929.73 • 2515.09 –8.7 0.500 10 0.005 -149.8 -148.2 -149.8 -140.5 0.064 -0.055 0.820 Belgium Bel-20 3427.34 26.13 0.77 3117.61 • 3853.21 –7.4 4.450 Portugal 2 0.400 -25.1 -23.6 -36.1 -35.2 0.435 0.237 0.380 France CAC 40 4345.63 24.55 0.57 3892.46 • 5217.80 –6.3 2.875 10 2.853 135.0 138.1 152.7 16.1 2.927 2.970 2.387 Germany DAX 10227.86 57.65 0.57 8699.29 • 11669.86 –4.8 0.250 Spain 2 -0.174 -82.5 -83.0 -78.2 -62.4 -0.159 -0.185 0.108 Greece ATG 556.62 5.01 0.91 420.82 • 731.18 –11.8 1.950 10 1.016 -48.7 -45.9 -29.4 -36.1 1.087 1.150 1.864 Hungary BUX 27574.38 550.44 2.04 20452.90 • 28100.59 15.3 4.250 Sweden 2 -0.656 -130.7 -131.2 -123.6 -113.6 -0.641 -0.639 -0.404 Israel Tel Aviv 1456.41 6.18 0.43 1378.80 • 1724.85 –4.7 1.000 10 0.122 -138.1 -140.7 -127.1 -148.9 0.138 0.173 0.736 Italy FTSE MIB 16236.41 106.57 0.66 15017.42 • 23992.48 –24.2 1.250 U.K. 2 0.117 -53.4 -46.7 -45.3 2.0 0.204 0.145 0.752 Netherlands AEX 444.47 4.11 0.93 378.53 • 503.22 0.6 2.000 10 0.647 -85.5 -74.1 -60.1 -32.9 0.805 0.842 1.897 Poland WIG 47407.09 644.85 1.38 41747.01 • 53202.42 2.0 0.750 U.S. 2 0.651 ...... 0.671 0.597 0.732 Russia RTS Index 927.50 16.96 1.86 607.14 • 975.21 22.5 1.625 10 1.503 ...... 1.546 1.443 2.225 Spain IBEX 35 8385.50 122.00 1.48 7579.80 • 11330.00 –12.1 490.15 1.01 432.78 539.07 –3.0 Sweden SX All Share 4.89 • Commodities Prices of futures contracts with the most open interest 3:30 p.m. New York time 8081.14 71.04 0.89 7425.05 9517.99 –8.4 Switzerland Swiss Market • EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; ICE-US: ICE Futures U.S.; MDEX: Bursa Malaysia South Africa Johannesburg All Share 52543.37 10.61 0.02 45975.78 • 54760.91 3.6 Derivatives Berhad; TCE: Tokyo Commodity Exchange; COMEX: Commodity Exchange; LME: London Metal Exchange; Turkey BIST 100 76125.64 1573.49 2.11 68230.47 • 86931.34 6.1 NYMEX: New York Mercantile Exchange; ICE-EU: ICE Futures Europe. *Data as of 8/3/2016 One-Day Change Year Year U.K. FTSE 100 6740.16 105.76 1.59 5499.51 • 6780.05 8.0 Commodity Exchange Last price Net Percentage high low 330.75 -4.25 -1.27% 449.00 329.00 Asia-Pacific DJ Asia-Pacific TSM 1429.69 10.15 0.72 1188.42 • 1481.22 2.9 Corn (cents/bu.) CBOT 955.25 -0.25 -0.03 1,186.25 868.00 Australia S&P/ASX 200 5475.80 10.10 0.18 4765.30 • 5610.10 3.4 Soybeans (cents/bu.) CBOT Wheat (cents/bu.) CBOT 403.50 -6.75 -1.65 533.75 399.25 China Shanghai Composite 2982.43 3.97 0.13 2655.66 • 3993.67 –15.7 Live cattle (cents/lb.) CME 114.550 -0.650 -0.56 125.475 105.250 Hong Kong Hang Seng 21832.23 93.11 0.43 18319.58 • 24552.47 –0.4 Cocoa ($/ton) ICE-US 2,997 4 0.13% 3,241 2,745 India S&P BSE Sensex 27714.37 16.86 0.06 22951.83 • 28298.13 6.1 Coffee (cents/lb.) ICE-US 141.95 1.55 1.10 154.80 117.15 Japan Nikkei Stock Avg 16254.89 171.78 1.07 14952.02 • 20808.69 –14.6 Sugar (cents/lb.) ICE-US 19.79 0.75 3.94 21.22 12.92 Singapore Straits Times 2831.96 4.38 0.15 2532.70 • 3196.66 –1.8 Cotton (cents/lb.) ICE-US 75.82 1.53 2.06 76.19 54.19 2000.03 5.24 0.26 1829.81 2052.77 2.0 South Korea Kospi • Robusta coffee ($/ton) ICE-EU 1818.00 -9.00 -0.49 1,866.00 1,400.00 Taiwan Weighted 9024.71 23.00 0.26 7410.34 • 9080.71 8.2 Copper ($/lb.) COMEX 2.1735 -0.0250 -1.14 2.3295 1.9690 Source: SIX Financial Information;WSJ Market Data Group Gold ($/troy oz.) COMEX 1367.70 3.00 0.22 1,384.40 1,066.00 Silver ($/troy oz.) COMEX 20.420 -0.051 -0.25 21.225 13.930 Currencies London close on Aug. 4 Aluminum ($/mt)* LME 1,630.00 -11.50 -0.70 1,695.50 1,451.50 17,980.00 5.00 0.03 18,250.00 13,225.00 Yen, euro vs. dollar; dollar vs. major U.S. trading partners US$ vs, Tin ($/mt)* LME Thu YTD chg Copper ($/mt)* LME 4,858.00 -40.50 -0.83 5,070.50 4,320.50 Country/currency in US$ per US$ (%) Lead ($/mt)* LME 1,809.00 -20.00 -1.09 1,909.00 1,598.00 20% Europe Zinc ($/mt)* LME 2,268.00 -13.00 -0.57 2,281.00 1,467.00

Yen s Bulgaria lev 0.5694 1.7563 –2.4 Nickel ($/mt)* LME 10,690.00 -170.00 -1.57 10,860.00 7,750.00 Croatia kuna 0.1488 6.718 –4.2 10 Rubber (Y.01/ton) TCE 152.60 1.90 1.26 159.30 150.80

Euro zone euro 1.1137 0.8979 –2.5

Euros MDEX 2441.00 26.00 1.08 2,672.00 2,172.00 WSJ Dollars index Czech Rep. koruna-b 0.0412 24.267 –2.5 Palm oil (MYR/mt) 0 Denmark krone 0.1497 6.6788 –2.8 Crude oil ($/bbl.) NYMEX 41.80 0.97 2.38 52.73 32.85 Hungary forint 0.003579 279.40 –3.8 NY Harbor ULSD ($/gal.) NYMEX 1.3191 0.0316 2.45 1.5985 0.9858 0.008267 120.97 –7.1 Iceland krona RBOB gasoline ($/gal.) NYMEX 1.3655 0.0156 1.16 1.6344 1.1171 –10 Norway krone 0.1186 8.4329 –4.6 Natural gas ($/mmBtu) NYMEX 2.835 -0.004 -0.14 2.9900 2.0090 2015 2016 Poland zloty 0.2594 3.8547 –1.8 Russia ruble-d 0.01521 65.732 –8.6 Brent crude ($/bbl.) ICE-EU 44.17 1.07 2.48 53.56 31.92 US$ vs, US$ vs, 0.1174 8.5209 0.9 ICE-EU 382.50 12.75 3.45 474.50 291.50 YTD chg YTD chg Sweden krona Gas oil ($/ton) Thu Thu 1.0272 0.9735 –2.8 Country/currency in US$ per US$ (%) Country/currency in US$ per US$ (%) Switzerland franc Turkey lira 0.3322 3.0104 3.2 Sources: SIX Financial Information; WSJ Market Data Group Hong Kong dollar 0.1289 7.7567 0.1 Americas Ukraine hryvnia 0.0401 24.9220 3.9 India rupee 0.0150 66.7692 0.8 Argentina peso-a 0.0673 14.8605 14.8 U.K. pound 1.3127 0.7618 12.3 London close on Aug 4 Indonesia rupiah 0.0000764 13094 –5.4 Cross rates Brazil real 0.3121 3.2043 –19.1 Japan yen 0.009894 101.07 –16.0 Middle East/Africa Canada dollar 0.7679 1.3023 –5.9 USD GBP CHF JPY HKD EUR CDN AUD Kazakhstan tenge 0.002812 355.56 5.0 Bahrain dinar 2.6513 0.3772 0.02 Chile peso 0.001520 658.00 –7.1 1.3094 1.7189 1.3450 0.0130 0.1688 1.4581 1.0057 ... Macau pataca 0.1251 7.9907 –0.2 Egypt pound-a 0.1126 8.8800 13.4 Australia Colombia peso 0.0003260 3067.24 –3.4 Malaysia ringgit-c 0.2477 4.0377 –6.2 Israel shekel 0.2612 3.8278 –1.7 Canada 1.3023 1.7094 1.3378 0.0129 0.1679 1.4502 ... 0.9945 Ecuador US dollar-f 11unch New Zealand dollar 0.7192 1.3904 –5.0 Kuwait dinar 3.3144 0.3017 –0.6 Euro 0.8979 1.1788 0.9224 0.0089 0.1158 ... 0.6896 0.6857 Mexico peso-a 0.0531 18.8471 9.6 Pakistan rupee 0.0096 104.450 –0.4 Oman sul rial 2.5976 0.3850 0.01 Hong Kong 7.7567 10.1822 7.9678 0.0767 ... 8.6382 5.9563 5.9230 Peru sol 0.2994 3.3395 –2.2 Philippines peso 0.0213 47.029 0.4 Qatar rial 0.2746 3.642 –0.03 101.0690 132.6800 103.8300 ... 13.0300 112.5600 77.6200 77.1900 Uruguay peso-e 0.0338 29.560 –1.2 Japan Singapore dollar 0.7450 1.3422 –5.4 Saudi Arabia riyal 0.2666 3.7505 –0.1 Venezuela bolivar 0.100100 9.99 58.4 Switzerland 0.9735 1.2778 ... 0.0096 0.1255 1.0842 0.7475 0.7434 South Korea won 0.0008984 1113.15 –5.3 South Africa rand 0.0731 13.6867 –11.6 U.K. 0.7618 ... 0.7826 0.0075 0.0982 0.8484 0.5849 0.5817 Asia-Pacific Sri Lanka rupee 0.0068606 145.76 1.1 Close Net Chg % Chg YTD % Chg U.S. ... 1.3127 1.0272 0.0099 0.1289 1.1137 0.7679 0.7637 Australia dollar 0.7637 1.3094 –4.6 Taiwan dollar 0.03161 31.631 –3.9 WSJ Dollar Index 86.47 0.03 0.03 –4.10 0.02865 34.900 –3.1 China yuan 0.1506 6.6410 2.3 Thailand baht Sources: Tullett Prebon, WSJ Market Data Group Source: Tullett Prebon

Key Rates Top Stock Listings 4 p.m. New York time Latest 52 wks ago % YTD% % YTD% % YTD% Libor Cur Stock Sym Last Chg Chg Cur Stock Sym Last Chg Chg Cur Stock Sym Last Chg Chg Asia Titans 50 One month 0.49840% 0.19150% ¥ TakedaPharm 4502 4734.00 0.25 -21.95 £ RioTinto RIO 2420.50 -0.10 22.28 Last: 136.78 s 1.12, or 0.83% YTD s 0.4% Three month 0.78760 0.31140 Asia Titans HK$ TencentHoldings 0700 182.60 0.61 19.58 CHF RocheHldgctf ROG 245.70 0.70 -11.11 Six month 1.15820 0.50910 HK$ AIAGroup 1299 -0.21 3.22 0.80 -20.16 3.16 24.15 High 140 48.10 ¥ TokioMarineHldg 8766 3762.00 £ RoyDtchShell A RDSA 1894.50 50–day One year 1.47660 0.83510 ¥ AstellasPharma 4503 1699.50 -1.71 -1.85 ¥ ToyotaMtr 7203 5691.00 1.83 -24.00 €SAP SAP 77.20 0.08 5.21 Close 135 -0.12 -9.77 -0.91 -7.44 moving average Euro Libor AU$ AustNZBk ANZ 25.20 AU$ Wesfarmers WES 42.58 0.07 2.33 € Sanofi SAN 72.75 Low t 130 One month -0.36857% -0.09214% AU$ BHP BHP 19.31 1.15 8.12 AU$ WestpacBanking WBC 30.11 0.17 -10.28 € SchneiderElectric SU 58.22 1.08 10.77 Three month -0.31443 -0.01929 HK$ BankofChina 3988 3.22 ... -6.94 AU$ Woolworths WOW 23.57 0.86 -3.80 € Siemens SIE 101.15 4.49 12.54 125 Six month -0.19200 0.05414 HK$ CKHutchison 0001 91.65 0.44 -12.21 € Telefonica TEF 8.63 1.70 -15.70 120 One year -0.06500 0.16214 HK$ CNOOC 0883 9.12 3.05 13.01 Stoxx 50 € Total FP 42.23 1.50 4.38 115 Euribor ¥ Canon 7751 2868.50 1.74 -21.95 CHF ABB ABBN 20.71 1.62 15.31 CHF UBSGroup UBSG 12.82 1.50 -34.32 One month -0.37000% -0.08000% ¥ CentralJapanRwy 9022 17690 -0.48 -18.10 €AXA CS 17.30 1.47 -31.43 € Unilever UNA 40.71 1.12 1.51 6 13 20 27 3 10 17 24 1 8 15 22 29 Three month -0.29800 -0.02400 HK$ ChinaConstructnBk 0939 5.26 -0.19 -0.94 € AirLiquide AI 91.63 -0.48 -11.60 £ Unilever ULVR 3517.00 1.91 20.18 May June July Six month -0.18300 0.04700 HK$ ChinaLifeInsurance 2628 17.34 0.12 -30.92 € Allianz ALV 128.20 0.67 -21.61 £ VodafoneGroup VOD 232.15 0.83 5.05 One year -0.04500 0.16300 HK$ ChinaMobile 0941 95.05 -0.52 8.63 € Anheuser Busch ABI 111.60 0.63 -2.45 CHF ZurichInsurance ZURN 231.70 1.22 -10.33 Yen Libor AU$ CmwlthBkAust CBA 75.66 -0.49 -11.54 £ AstraZeneca AZN 5153.00 2.73 11.62 Stoxx 50 -0.25 -23.00 -0.10 -2.53 DJIA One month -0.04986% 0.06000% ¥ EastJapanRailway 9020 8816.00 € BASF BAS 68.93 Last: 2840.03 s 19.98, or 0.71% YTD t 8.4% Three month -0.01843 0.09643 ¥ Fanuc 6954 16905 1.14 -19.81 € BNP Paribas BNP 42.56 1.25 -18.51 $ AmericanExpress AXP 63.93 0.16 -8.08 0.62 0.58 Six month 0.01157 0.13000 ¥ Hitachi 6501 457.00 3.25 -33.91 £ BT Group BT.A 409.95 0.33 -13.09 $ Apple AAPL 105.87 -0.50 -9.25 3000 One year 0.09386 0.24614 TW$ Hon Hai Precisn 2317 88.00 0.57 8.91 € BancoBilVizAr BBVA 4.96 2.54 -25.69 $ Boeing BA 131.21 $ Caterpillar CAT -0.32 20.32 2900 Offer Bid ¥ HondaMotor 7267 2924.50 2.08 -25.20 € BancoSantander SAN 3.59 2.78 -21.19 81.77 -1.14 -12.42 0.37 -32.00 $ Chevron CVX 100.42 -0.19 11.63 Eurodollars KRW HyundaiMtr 005380 130500 £ Barclays BARC 148.85 2800 $ CiscoSystems CSCO 30.80 0.26 13.42 One month 0.5500% 0.4500% HK$ Ind&Comml 1398 4.41 0.46 -5.77 € Bayer BAYN 93.95 -0.45 -18.87 $ CocaCola KO 43.49 -0.34 1.23 2700 Three month 0.8500 0.7500 ¥ JapanTobacco 2914 3952.00 0.61 -11.61 £BP BP. 416.35 0.33 17.61 $ Disney DIS 95.17 -0.96 -9.43 2600 Six month 1.2000 1.1000 ¥ KDDI 9433 3203.00 -2.29 1.55 £ BritishAmTob BATS 4812.50 2.33 27.62 $ DuPont DD 68.85 -0.09 3.38 One year 1.5000 1.4000 ¥ Mitsubishi 8058 1930.50 4.72 -4.81 CHF FinRichemont CFR 57.00 0.18 -20.94 2500 $ ExxonMobil XOM 87.48 -0.01 12.23 ¥ MitsubishiUFJFin 8306 507.10 3.01 -33.02 CHF CreditSuisse CSGN 10.66 1.04 -50.36 Latest 52 wks ago $ GenElec GE 31.16 0.08 0.02 6 13 20 27 3 10 17 24 1 8 15 22 29 ¥ Mitsui 8031 1259.50 4.61 -12.87 € Daimler DAI 59.34 -0.02 -23.51 Prime rates $ GoldmanSachs GS 158.06 -0.18 -12.30 May June July ¥ Mizuho Fin 8411 162.80 1.56 -33.14 € Deutsche Bank DBK 11.39 1.74 -49.41 U.S. 3.50% 3.25% $ HomeDepot HD 136.07 -0.72 2.89 ¥ NTTDoCoMo 9437 2709.50 -1.87 9.08 € DeutscheTelekom DTE 15.22 0.16 -7.87 Canada 2.70 2.70 $ Intel INTC 34.58 0.96 0.38 AU$ NatAustBnk NAB 25.90 0.23 -14.24 £ Diageo DGE 2.00 16.91 Japan 1.475 1.475 2170.50 $ IBM IBM 161.55 0.55 17.39 ¥ NipponStl&SmtmoMtl 5401 4.13 -21.19 € ENI ENI 0.23 -3.99 Dow Jones Industrial Average P/E: 20 Hong Kong 5.00 5.00 1904.00 13.25 $ JPMorganChase JPM 64.58 -0.12 -2.20 ¥ NipponTeleg 9432 4820.00 -1.65 -0.33 £ GlaxoSmithKline GSK 1699.00 1.58 23.74 Last: t s Policy rates $ JohnsJohns JNJ 123.86 -0.03 20.58 18352.05 2.95, or 0.02% YTD 5.3% ¥ NissanMotor 7201 981.60 1.16 -23.28 £ HSBC Hldgs HSBA 2.56 -3.52 ECB 0.00% 0.05% 517.30 $ McDonalds MCD 118.32 0.68 0.15 ¥ NomuraHldgs 8604 7.18 -35.41 € INGGroep INGA 1.52 1.82 Britain 0.25 0.50 438.60 10.33 $ Merck MRK 57.85 0.35 9.52 18500 ¥ Panasonic 6752 2.69 -22.56 £ ImperialBrands IMB 2.33 12.83 Switzerland 0.50 0.50 960.70 4046.50 $ Microsoft MSFT 57.39 0.74 3.44 HK$ PetroChina 0857 0.38 2.75 € IntesaSanpaolo ISP 0.05 -41.06 18000 Australia 1.50 2.00 5.23 1.82 $ NikeClB NKE 54.81 0.11 -12.30 HK$ PingAnInsofChina 2318 36.15 0.28 -15.73 € LVMHMoetHennessy MC 149.85 ... 3.42 -0.37 8.92 U.S. discount 1.00 0.75 $ Pfizer PFE 35.16 17500 $ RelianceIndsGDR RIGD ... -3.43 £ LloydsBankingGroup LLOY -1.96 -28.90 Fed-funds target 0.25 0.00 29.55 51.95 $ Procter&Gamble PG 86.09 0.14 8.41 AU$ RioTinto RIO -1.62 8.75 € LOreal OR 0.74 9.85 -0.32 18.04 Call money 2.25 2.00 48.62 170.60 $3M MMM 177.81 17000 KRW SamsungElectronics 005930 1517000 ... 20.40 £ NationalGrid NG. 1081.50 1.88 15.36 $ TravelersCos TRV -0.10 4.43 Overnight repurchase rates 117.86 ¥ Seven&I Hldgs 3382 4234.00 0.21 -23.71 CHF Nestle NESN 77.55 1.11 4.02 UTX 0.07 10.71 16500 U.S. 0.55% 0.27% $ UnitedTech 106.36 ¥ SoftBankGroup 9984 5842.00 -1.18 -4.84 CHF Novartis NOVN 80.50 0.62 -7.26 $ UnitedHealthGroup UNH -0.10 21.33 Euro zone n.a. n.a. 142.73 6 13 20 27 3 10 17 24 1 8 15 22 29 ¥ Sumitomo Mitsui 8316 3219.00 2.22 -30.11 DKK NovoNordiskB NOVO-B 367.00 0.11 -8.23 $ VISAClA V 79.46 0.95 2.46 May June July 1.51 14.88 3.13 -11.82 0.04 16.66 Sources: WSJ Market Data Group, SIX HK$ SunHngKaiPrp 0016 107.70 £ Prudential PRU 1350.00 $ Verizon VZ 53.92 Note: Price-to-earnings ratios are for trailing 12 months Financial Information, Tullett TW$ TaiwanSemiMfg 2330 174.50 1.16 22.03 £ ReckittBenckiser RB. 7390.00 0.86 17.66 $ WalMart WMT 73.31 0.51 19.59 Sources: WSJ Market Data Group; Birinyi Associates For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com THE WALL STREET JOURNAL. * Friday - Sunday, August 5 - 7, 2016 | B7 FINANCE & MARKETS Rate Cut Will Pinch Banks China Gets Closer

To ease the pain, the ToCDS Rollout BOE is also offering lenders ultracheap BY SHEN HONG In 2014, there were five such defaults, following one in four-year borrowing SHANGHAI—China is edg- 2013. ing closer to launching its own “If the [plan] is carried out BY MAX COLCHESTER version of a popular hedging well in China, it will certainly AND MARGOT PATRICK tool that protects investors in be a big help to investors,” case of defaults, as the world’s said Wang Ming, a partner at LONDON—The Bank of No. 2 economy struggles to Shanghai Yaozhi Asset Man- England’s decision to slice in- cope with slowing growth and agement Co., a bond fund that terest rates by a quarter of a record numbers of companies manages two billion yuan in percentage point ramps up notpayingbackdebt. assets. pressure on profits at U.K. The National Association of China experimented with a banks and will spur cost-cut- Financial Market Institutional less sophisticated version of a ting drives. Investors, an industry body credit-default swap called a The move to a record-low backed by China’s central bank, credit-risk-mitigation agree- rate of 0.25% on Thursday was has consulted major banks and ment, or CRMA, in 2010, in the widely predicted by the market brokerage firms in recent wake of a credit binge. following Britain’s vote in June weeks about the planned roll- But the CRMA market never to leave the European Union. out of credit-default swaps, or took off, because the state The cut will again pinch the CDS, three people familiar with kept bailing out insolvent difference between what banks the situation said. companies instead of letting make on their assets and how The swaps would pay out if them default, in the interests much they pay out in interest. the issuer of a bond or a loan of financial and social stabil- To ease the pain, the BOE is defaults, said the people, who ity. also putting in place ultra- were briefed by the regulator cheap four-year loans to goad on the matter. banks to pass on the rate cut The regulator, which over- Soaring Defaults to borrowers. U.K. bank shares sees China’s $8.5 trillion inter- Value of defaults in China's ticked up on the news. bank bond market, has drafted domestic bond market In earnings reports last guidelines and standardized 25 billion yuan week, British bank executives contracts for the product, one

warned that, although a rate ANDY RAIN/EUROPEAN PRESSPHOTO AGENCY that has in the past two de- cut was unlikely to have a ma- HSBC said a 0.25-percentage-point rate cut would shave about $100 million off net-interest income. cades become a key tool in 20 terial impact on their bottom global markets to hedge gov- lines, it would cut into already mained coy about whether or For policy makers, the focus In July, it relaxed bank-capital ernment and corporate debt, 15 slim margins. how the lower rate would be has been on ensuring banks rules, a move aimed at getting the people said. HSBC Holdings PLC said passed on to savers. For bor- keep lending. an extra £150 billion of loans The investor association 10 Wednesday that a 0.25-per- rowers, the lower rate is ex- As interest rates drop close into the economy. has hired a group of lawyers centage-point rate cut would pected to quickly flow through to zero, banks and building so- Bank executives said the to help align its swaps rules shave around $100 million off to the wider economy, as a cieties may struggle to cut de- moves were helpful but, in re- with internationally accepted 5 its net-interest income—or the large chunk of U.K. mortgages posit rates further, which ality, the most important fac- practices and is expected to 0 difference between interest are indexed to the base rate. could then stymie any cuts to tor post Brexit was helping ask the People’s Bank of China 0 earned on loans and interest Most of Barclays’s mortgage sustain consumer and investor for formal approval to launch ’132012’14 ’15 ’16 paid on deposits—this year, book is composed of tracker The main fear is confidence. the market soon, one of the 0 1 5 20 39 and an estimated $200 million mortgages, Finance Director “I actually think the sym- people said. Number of defaults next year assuming no further Tushar Mozaria said last that rates will bolism of action and being pre- Officials at the association rate cuts. Lloyds said last week week. Lloyds said there is pared to step in and being able couldn’t be reached for com- Note: 1 billion yuan = $150.5 million continue to drop into Source: Wind Info it would incur a £100 million about £70 billion of variable- to talk in a confident fashion ment. THE WALL STREET JOURNAL. ($133 million) hit to interest rate loans that will reprice fol- negative territory. and about standing behind the The planned rollout of rules income from a rate cut over lowing the rate cut. economy kind of matters for swaps reflects the pres- Now, there are signs that the next 12 months. The prevailing reaction to more,” George Culmer, Lloyds’s sures China faces as it tries to Beijing and the country’s local In its half-year report, Bar- persistently low rates has been interest rates on loans. The finance director said last week. attract more investors, includ- governments are becoming clays PLC modeled an £82 mil- to continue with cost cuts. central bank’s “Term Funding The main fear now is that ing global players, to a swell- more tolerant of debt defaults lion fall in interest income at Lloyds has announced plans Scheme” of ultralow-rate loans interest rates will continue to ing bond market, even as debt as the economy weakens fur- its U.K. division from a rate to shed 3,000 more jobs. HSBC could stimulate £100 billion of drop into negative territory. defaults soar. ther and governments feel in- cut. Royal Bank of Scotland said that the rates were a fac- extra lending, the BOE said. RBS has been the only bank to China’s domestic bond mar- creased fiscal strains. Group PLC, which reports re- tor in freezing its dividend at The central bank, which publicly state that it would ket has had 39 defaults total- “The timing is indeed bet- sults tomorrow, is expected to current levels “for the foresee- predicted the economy would charge small-business owners ing roughly 25 billion yuan ter now for CDS to be intro- feel the biggest impact, ac- able future.” Barclays and slow in the aftermath of Br- to deposit cash in the event of ($3.8 billion) this year, already duced to China. Given that all cording to RBC Capital Mar- Lloyds broadly kept financial exit, has already taken steps to interest rates going negative. exceeding the total of 20 de- kinds of defaults are on the kets analysts. guidance steady last week de- ensure that banks continue to HSBC also said that would be faults totaling 12 billion yuan rise, I think demand will be On Thursday, banks re- spite the looming cuts. pump credit into the economy. the likely outcome. for all of last year. quite robust,” Mr. Wang said.

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How Long What $40 Oil Means for Oil Firms OVERHEARD Can Adidas It all seemed to be going Macondo disaster in the Gulf Analysts are making quar- Keep Pace? so well, but European oil Forward Guidance of Mexico, which has long ters great again. groups have stumbled again. Forecast of dividend been a drag. Meanwhile, With operating earnings As the second quarter was yields one year ahead Shell is on course to realize for companies in the S&P Adidas customers never closing, it looked as though far greater cost savings from 500 tracking a 2.4% decline tire. That is the message the fears over dividend cuts at 12% Royal Dutch Shell its BG Group acquisition than from a year earlier, investors company’s breathless adverts the highest yielding of Eu- BP promised. Both will get bene- may be laboring under the il- Eni seem designed to convey. rope’s big-five energy com- 10 fits to their cash flows from lusion that the second quar- Butitmayworkbetteron panies, BP and Royal Dutch Total these factors. ter wasn’t all that good. Statoil teenage football fans than on Shell, might finally ease. Despite second-quarter But anyone tuning into investors. After all, oil prices had 8 hiccups, analysts still are earnings calls with analysts The company hasn’t ridden a strong, sustained forecasting a big recovery in might have left with a differ- missed a step this year. recovery and investors’ faith 6 cash flows and profits in ent opinion. Thursday’s second-quarter was growing that these com- 2017 and beyond. But these The expression “great numbers showed constant- panies really were tackling depend on a pickup in crude quarter, guys” shows up in 4 currency sales growth of costs and changing their prices: At UBS, for example, the transcripts of 12 earnings 21%, driven by a revitalized business models to suit 2014 ’15 ’16 forecasts are based on oil at calls from July 1 through brand in all major markets. cheaper oil. Sources: FactSet; Bloomberg News (photo) $60 a barrel on average next Wednesday—the most over So why did the shares slip But now the bumps are THE WALL STREET JOURNAL. year, $70 in 2018 and $75 similar reporting periods since on Thursday? The obvious back. Second-quarter results thereafter. 2014. explanation is that these re- were disappointing and the ters, according to Morgan free cash flow can support And companies are work- Showing up even more sults were so much better oil price is down about 20% Stanley analysts. By the end dividends with higher debt ing to lower breakevens, frequently: “Congrats on a than analysts expected that in the past two months. of June, that rolling four- for a while if they think ris- with BP aiming for a busi- great quarter”—analysts doled the company was forced un- The results showed that quarter forecast had leapt to ing commodity prices are go- ness that works at $50 to out that bit of praise to 31 der German law to release even before prices began to $25 billion. ing to bail them out, but not $55 a barrel. Brent crude has companies. key figures last week. But slide, investors and analysts That is far away from how forever. been below that level for But the prize goes to that can’t be the whole story. had got a little ahead of the five companies have been BP and Shell are trading most of the past year; it Abiomed, a medical-device It could be that investors themselves, particularly with performing. Free cash flows with dividend yields above closed at $44.29 Thursday. company that reported re- are starting to find a for- regard to cash flows. actually have been worsen- 7%, while Eni, which cut its Nevertheless, payout sults last week that topped ward earnings multiple of 30 The five big European ing, and recent results took dividend last year, is at 6%, promises will need to be re- estimates, and sent its shares a bit rich. The key justifica- groups, BP, Shell, Total, Eni cumulative flows for the past and Total and Statoil are vised if stuttering global higher. Four of the seven ana- tion is the company’s scope and Statoil, began the year four quarters at the big five closer to 5.5%. growth and oil back in $40s lysts on the call offered their to boost its North American on consensus forecasts of $7 down to minus-$23 billion, There is some good news: is a taste of more disappoint- congratulations on the quar- margin, which significantly billion in total free cash according to Morgan Stanley. BP has reached the end of its ments to come. ter, saying it was “great.” lags behind that of rival flows for the next four quar- Companies with negative big payouts related to the —Paul J. Davies Nike. A change of boss has raised expectations. And sec- ond-quarter numbers were encouraging. The regional How AIG’s Restructuring Plan Shut Down Its Critics operating margin leapt from 2.6% to 9.4%. Six months ago, American Operating expenses in the by 4.2 percentage points in that if rates stay at their cur- Scale has been Adidas’s International Group was de- Turn in Progress second quarter declined by the second quarter, to 62.4%. rent low level, it will reduce key problem in North Amer- fending itself from activist in- American International Group's 11% from a year earlier, after That brings it close to the operating income by $250 ica. Its sales there are still vestors calling for a three- normalized return on equity stripping out currency ef- 60% level that the company million to $350 million in less than a quarter of those way split of the company. 10% fects. hopes to reach by the end of 2017, relative to their expec- 2017 target of 9% ofNike.Itisnowrapidly Now, strong earnings are 8 Since the start of the year, next year. tations at the start of the building scale. That is thanks helping to silence those crit- AIG has returned $7.9 billion As a result of all this, re- year. 6 in part to a shift in manage- ics. to shareholders in the form turn on equity rose to 8.6% Because AIG’s restructur- 4 ment strategy that gave the AIG’s net profit rose 6% of share buybacks and divi- from 6.8% a year earlier. The ing is ahead of schedule, they U.S. boss more autonomy, from a year earlier in the sec- 2 dends, putting it slightly company’s goal is to reach a can afford this hit. If rates for example, to sign up top ond quarter, even as the in- 0 ahead of schedule to meet its normalized ROE, excluding fall further, more adjustments 2015 ’16 athletes in local sports. But surance giant continues to Note: Normalized ROE excludes one-time target of returning $25 billion one-time gains and other will be necessary. the company has also been shrink itself and boost effi- gains and losses, and other items. over two years. items, of around 9% by next But AIG’s strong results helped by a fad for retro ciency. Source: the company And in the property and year. mean it has earned some sneakers. Some investors The earnings beat analysts’ casualty unit, there are signs Of course, AIG still faces breathing room from critics. may be betting this fashion forecasts, sending shares The strategy called for ex- that the initiative to exit from risks. Most notably, stub- Rather than leaping to take will fade, and Adidas’s U.S. sharply higher on Wednesday. pense discipline, returning poorly performing product bornly low interest rates drastic measures like break- recovery with it. To maintain Importantly, AIG’s numbers capital to shareholders, and a lines is bearing fruit. Net pre- threaten the profitability of ing up a company to appease the heady valuation, Chief show it making rapid prog- pruning of the property and miums written fell by a fifth. its life-insurance operations agitated investors, sometimes Executive Kasper Rorsted ress on the restructuring plan casualty business. The accident year loss ratio, a by hitting its investment re- it makes sense to focus first needs to keep the pace. announced by Chief Executive Each plank of the strategy measure of insurer losses turns. on fundamentals. —Stephen Wilmot Peter Hancock in January. is being realized. against premium income, fell The company estimates —Aaron Back FINANCE & MARKETS

outs for insurance claims and Banks Are Downbeat on Oil Again Finance premium growth across the in- dustry remained subdued. Watch The bank and insurance com- BY GEORGI KANTCHEV pany reported a net profit on Looking Ahead at Oil Prices Thursday of 1.04 billion Austra- Banks are getting bearish Where investment banks in July's survey see the price per barrel of U.S. crude-oil futures lian dollars (US$789 million) in on oil again. in the next few quarters the year through June, compared Analysts have cut their with A$1.33 billion a year earlier. outlook for oil prices for the $110 ROTHSCHILD & CO. Storms wreaked havoc on Aus- first time in four months, tralia’s east coast in December concerned about a continued 100 RBC Company Hires and June with torrential rain and oversupply of crude that has J.P. Morgan Two M&A Veterans tornado-like winds that flooded already sunk this year’s mar- 90 Rothschild & Co. has hired homes, removed roofs, over- Bank of America ket rally. two veteran mergers-and-acqui- turned vehicles and resulted in Merrill Lynch A survey of 13 investment 80 sitions bankers as the European several deaths. banks by The Wall Street Citigroup firm seeks to expand in North Suncorp said it had bought 70 Journal predicts that Brent Commerzbank America. additional reinsurance protection crude, the international oil- 60 James Neissa, who had been for the 2017 financial year to re- price benchmark, will average Credit Suisse global co-head of investment duce potential volatility caused $56 a barrel next year, down 50 Société Générale banking at UBS AG, will oversee by future natural hazards. Deliv- by more than a dollar from Rothschild’s North American op- ering his first full year result Deutsche Bank June’s survey. The banks ex- 40 erations, the firm plans to an- since becoming chief executive, pect West Texas Intermedi- BNP Paribas nounce. Lee LeBrun, who was co- Michael Cameron said an organi- ate, the U.S. oil gauge, to av- 30 Barclays head of mergers for the zational restructure—completed erage $55 a barrel next year, Americas at UBS, will become in early July—positioned the down almost a dollar from 20 UBS head of M&A for North America company to achieve targets that the previous survey. at Rothschild. The men will as- include a flat cost base in the Nymex crude oil, price per barrel* ING Bank Oil prices nearly doubled 10 sume their new roles in Septem- 2017 and 2018 financial years. earlier this year amid expec- Morgan Stanley ber and be based in New York. —Rebecca Thurlow tations that falling U.S. pro- 0 Deal advisory has been a duction would help ease the 3Q 4Q 1Q 2Q 3Q 4Q bright spot for banks as M&A WOORI BANK oversupply that has plagued 2014 2015 2016 2017 volume surged to a record last Vietnam Subsidiary the industry for the past two *Through Aug. 3 year and continues to be rela- years. But that rally has pe- Source: WSJ Market Data Group (Nymex crude prices); the companies THE WALL STREET JOURNAL. tively robust. Smaller firms like Set to Be Approved tered out in recent weeks as Rothschild have been drawing The State Bank of Vietnam big oil producers increase in more than five months, the world, according to Citi- growth, a quicker rebound in talent from larger rivals, some of said Thursday it has agreed in their output and gasoline in- data from the Intercontinen- group Inc. supply from Nigeria and which continue to experience principle to allow South Korea’s ventories continue to swell. tal Exchange Inc. showed on Few oil producers, mean- stronger-than-anticipated turmoil nearly a decade after the Woori Bank to open a wholly- “There is still a lot of oil Monday. Last week, specula- while, show signs of cutting output from Saudi Arabia, financial crisis. Including Messrs. owned unit in the country. out there and the sentiment tive investors in U.S. crude output. Russian production is Russia and others,” analysts Neissa and LeBrun, Rothschild South Korea is among the is pretty bearish,” said Mi- added nearly 15 times more running near the post-Soviet at J.P. Morgan said in a re- has hired 11 investment bankers largest sources of foreign invest- chael Wittner, chief oil ana- bets on the crude price fall- high it reached earlier this cent report. at the managing director level or ment in Vietnam, with several lyst at Société Générale SA. ing than on it rising, accord- year. Production from Canada Concerns about the global higher in North America over the large South Korean firms turning “For the time being, the path ing to data from the U.S. and Nigeria, where a spate of economy have also clouded last three years, for a current to- Vietnam into their key produc- of least resistance for oil Commodity Futures Trading outages knocked off more the outlook for crude. Ana- tal of 31. tion bases to take advantage of prices continues to be lower.” Commission. than three million barrels a lysts say that Britain’s sur- —Ben Dummett. cheap labor and the free-trade U.S. crude entered a bear day in the spring, is now prise vote to leave the Euro- pacts Vietnam has signed. market earlier this week, dip- A glut of gasoline coming back online. pean Union in June could SUNCORP The central bank said Woori ping below $40 a barrel for While U.S. crude output have knock-on effects on oil Bank will need to complete pa- the first time since April. On world-wide is continues to decline—last demand in Europe. Still, few Natural Disasters perwork before it receives a li- Thursday, U.S. crude for Sep- dragging down week it fell to 8.5 million bar- analysts expect prices to fall Weigh on Profit cense to open the unit, adding tember delivery rose $1.10, or rels a day, from 9.5 million at to the decade lows of below Suncorp Group Ltd. said its that it has approved a list of 2.7%, to $41.93 a barrel. Brent prices of oil. the same time last year, ac- $30 a barrel that were hit in annual net profit fell 8.4% as proposed executives for the unit. crude futures rose $1.19, or cording to official data—some the first quarter of the year. natural disasters increased pay- —Vu Trong Khanh 2.8%, to $44.29 a barrel. drillers have ramped up ac- The banks in the survey One of the main culprits tivity in recent weeks. see oil prices staying below for the reversal in the oil On Friday, Baker Hughes Advertisement INTERNATIONAL INVESTMENT FUNDS $50 a barrel until the end of price is a growing glut of gas- Inc. reported that the number this year and rising to $60 a oline globally. Refineries have of rigs drilling for crude in barrel by the end of next taken advantage of the fall in the U.S. has risen by three to [ Search by company, category or country at europe.WSJ.com/funds ] year. Last summer, many of oil prices and gone on a buy- 374, the fifth straight week of NAV —%RETURN— the same banks were predict- ing spree in the past two increases. That could slow FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR ing oil prices would rise to years. Consumption hasn’t production declines and even n more than $70 a barrel this been able to keep up as com- cause output to start rising Chartered Asset Management Pte Ltd - Tel No: 65-6835-8866 Fax No: 65-6835 8865, Website: www.cam.com.sg, Email: [email protected] year. panies have refined that oil again, analysts say. CAM-GTF Limited OT OT MUS 07/29 USD 295770.11 5.6 -1.5 -9.1 At the end of July, hedge into products such as gaso- “The timeline for market Data as shown is for information purposes only. No offer is being made by funds and other speculative line, leading to a near-record rebalancing has slipped in re- Morningstar, Ltd. or this publication. Funds shown aren’t registered with the For information about listing your funds, investors had cut their bullish 500 million barrels of the fuel cent weeks, through a combi- U.S. Securities and Exchange Commission and aren’t available for sale to United please contact: Freda Fung tel: +852 2831 States citizens and/or residents except as noted. Prices are in local currencies. bets on Brent to their lowest being put into storage around nation of weaker demand All performance figures are calculated using the most recent prices available. 2504; email: [email protected] For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com

INSIDE: Luxury at Sea for MANSION $55,000 a Week

When your dinner guest Fashion insiders orders a $700 on A-list summer wine: an escapes—and etiquette guide what to pack W4 W6

EATING | DRINKING | STYLE | FASHION | DESIGN | DECORATING | ADVENTURE | TRAVEL | GEAR | GADGETS

© 2016 Dow Jones & Company. All Rights Reserved. THE WALL STREET JOURNAL. Friday - Sunday, August 5 - 7, 2016 | W1

Effortlessly We Roll Along Can someone in so-so shape— who rarely pedals over anything W; GETTY IMAGES bigger than a speed bump—enjoy O EDARR mountain biking? These ingenious O NBYJ two-wheelers make off-roading O

seem like a ride in the park ILLUSTRATI O T O H P TEA AND EFFICIENCY The $8,900 carbon-frame Alchemy Arktos—one of the new-breed trail bikes—offers 6 inches of shock absorption front and rear.

BY BRIGID MANDER about the slog back up? bike frames and careened downhill, side? Shoppingforabike can be a paralyz- Fortunately, quantum leaps inbike mountainbiking isnowmainstream. ing experience, an overwhelming blur of design are making off-road riding more According to the Outdoor Industry Asso- various suspension types, wheel sizes and IKING ON a paved road has its accessible than ever. Highly efficient ciation trade group, an estimated 40 frame designs. charms—but it can’t beat mountainbikestakesome of the sweat million Americans mountainbike each There’s no substitute for hopping on a winding through a piney forest out of climbing hills. So-called “fat-tire” year. The market has evolved to meet bike and testing it out—evaluating how the orapicturesque meadow on bikes can roll over virtually any terrain, the demand. Sales of all-terrain fat-tire suspension responds, how well the tires adirt trail. Off-roaders experi- from sandy beaches to gravelly paths. bikes increased sixfold between 2013 and grip and whether the frame puts you at an Bence the world differently: The scents are And the electric-bike revolution isfind- 2015, according to market-research firm angle that makes you feel secure heading more pleasant, and there’s only the sound ing its way to the trail, too: Off-road NPD Group, and growth in independent- up and down hills. But the guide on the of the wind in the trees and your bike’s models with electric-assist motors can bike-shop sales has largely been driven following page can give you the lay of the knobby tires scrunching over the earth. help you traverse arduous stretches that by mountain and electricbikes. off-roading land. No matter what type of As idyllicasthis all sounds, we know would otherwise leave you panting. For beginners, that means more choice: ride you choose, the key is to get out there what you’re thinking: Yes, coasting Born in the 1970s as a niche pastime Now anyone can find a model to fithisor and discover your inner kid. And what bet- downhill seems fun enough, but what for thrill-seekers who put balloon tires on her body type and skill level. The down- ter place to do that than on a dirt trail? FOR THE EASIEST WAYS TO OFF-ROAD ON TWO WHEELS, TURN TO PAGE D2 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com W2 | Friday - Sunday, August 5 - 7, 2016 THE WALL STREET JOURNAL. OFF DUTY A STATE OF SUSPENSION DISBELIEF

FOR EASY CLIMBS AND LESS-BUMPY DESCENTS Trail Bikes Alchemy Arktos What gives this incredibly Until a few years ago, most mountain responsive and lightweight bikes were good at going uphill or going carbon-frame bike its buttery ride? downhill—not both. That’s because bikes A game-changing suspension that made zooming downhill more fun system that offers 6 inches of (and a lot less jittery) lacked the shock absorption front and rear yet efficient suspension systems and goes uphill without dissipating the energy-efficient frame designs that let you energy you put in. As you ascend, ascend a trail with minimal effort. Likewise, the suspension stays soft when you bikes that made climbing less of a grind gently roll over small bumps (so lacked features like extra-cushy suspensions they don’t throw off your cadence) that eased a rough descent. but stiffens up in response to the No more. “It’s been a collective learning jolts of your pedaling, which helps experience in the bike industry,” said Matt give the bike its stellar uphill Maczuzak, co-owner and engineer at performance. As you descend and Alchemy, a boutique carbon-bike-frame hit rocks and roots with greater maker in Denver. “This latest generation force and speed, the suspension of bikes has worked out the kinks.” goes soft again for a plush, The contrast between the old and fun ride—all without requiring you new bikes—both in terms of your to make any adjustments to the comfort and exertion level—is ex- suspension. $8,900 as shown, treme. And although you’ll find the alchemybicycle.com biggest upgrades at the top-end of the mountain-bike range, less-ex- pensive models sport advanced fea- tures, too. “There’s a trickle-down ef- fect making even the lower-end bikes much better,” said Erik Swanson, owner of Adventure Cycling in Aurora, Colo. “You can get a good bike now starting around $1,700, with parts that were expen- sive, high-end technology a few years ago.” Still, those willing to invest a few thou- sand more will be rewarded with the most Yeti Beti SB5c responsive, efficient and stable options. It’s Like most new bikes, this carbon-frame model features simplified 1x11 gearing to reduce hard to convey how much easier these bikes weight (there’s no front shifter or superfluous front gears) but still pedals efficiently. are to ride than the mountain bikes you may Bonus: The pared-down gearing lets you focus on the trail rather than what gear you’re in have grown up with. “People are surprised —an advantage for riders at any level. Thanks to its effective suspension design, the SB5c at all these bikes can do,” said Mr. Swanson. climbs superbly and deftly handles anything from smooth beginner trails to tough terrain “They say, ‘Oh man, that really does make on the way down. This model is tailored for women—it has shorter pedal cranks and a difference!’ It just makes riding trails all handlebars, and its shocks have been tuned for a lighter-weight rider. Those looking for the more fun, which is the whole point.” a similar unisex model can check out the Yeti SB5c. $6,899, yeticycles.com At right, two of our favorite picks from the forefront of mountain-bike design.

FOR TRAVERSING SAND, DIRT AND SNOW simpler shifting, nimbler handling and ‘Fat’ and ‘Plus’ Bikes lighter frame designs. Some now have cus- tomized suspensions to add to the already generous bounce provided by the wheels. Fat bikes have been mass-produced for Dave Willmott, a bank project coordina- over a decade, but their tank-like appear- tor in Victor, Idaho, happily ditched his ance still catches people off guard. “The traditional mountain bike for a front-sus- number-one shop curiosity is the fat pension fat bike about a year ago. “I only bike,” said Shepard Grinker, owner of need one bike. It’s light, has incredible mountain-bike specialist Tenafly Bicycle traction and is so stable,” said Mr. Willmott. Workshop in Tenafly, N.J. “People want “The wide surface area of the tires glues to know where you would ride one. The you to the ground. It’s almost like training Haibike XDURO FullSeven answer is everywhere.” wheels for the trail.” SRX According to fans, a quick spin on a fat This year, models with narrower 3-inch Specialized Levo FSR With 4 inches of suspension-travel bike around a potholed city block, much tires, called “Plus Bikes” have become popu- Comp 6Fattie front and back, the FullSeven shines less a woodsy trail, will likely win over lar, too. Curious beginners are flocking to At first glance, this mountain bike with on smoother, less-aggressive trails. doubters. Despite the slightly comical ap- both Fat and Plus versions. “People can get a hidden integrated motor looks a lot The smaller shocks make bigger pearance of the 4- to 5-inch-wide tires, fat out on the trails and not struggle,” said Mr. like a standard trail bike. And despite bumps and drops more jolting but bikes have benefited from the same ad- Grinker. “The learning curve goes down tre- a little extra bulk and a hefty 47-pound also allow the bike to switch easily vances as other mountain bikes, including mendously on wider tires.” weight, it also rides and handles from a narrow dirt track to pavement similarly to a normal bike. But hit the (where it’s equally pleasant to pedal). pedals harder to engage the electric- The 350-watt Bosch motor delivers assist system—which puts out a max a maximum pedal-assist speed of 530 watts to boost your leg power— 28 mph, but even with the motor and everything changes. Even if you’re turned off it was unexpectedly easy to a seasoned biker, pedaling with the ride flat terrain. The battery is lockable assist is too much fun to feel like and removable to thwart thieves. cheating. Download the companion A digital display on the handlebar smartphone app to plan trail routes keeps battery life, speed, and other within the battery’s range to ensure data in sight—no smartphone required. the battery doesn’t conk out before you $4,700, haibikeusa.com do. $5,500, specialized.com

Salsa Bucksaw GX1 Riding a fat-tire bike feels akin to float- ing—it seems implausible that you’re rolling so smoothly over such varied Cannondale Beast of the East 3 surfaces—and this bike exemplifies the This front-suspension bike (also known effect. In addition to the natural stabil- as a “hardtail”) is lighter and simpler ity provided by its 4-inch wide tires, the to maintain than a dual-suspension 4-inch front and rear suspensions add model, but its 3-inch “plus” tires allow to the bike’s bump-absorption abilities. it to stay agile and extra stable on Traction is impressive on uneven trails, rocky, rooty trails. Although it has a whether we sped across sand or rougher ride than a full-suspension bike, cruised over snow. The bike comes in this is a wallet-friendly way to build three iterations: If you’re looking for a your off-road skills. And if you’re bud- do-it-all-bike, go with the aluminum- get conscious, take note: While the FOR A LITTLE HELP ALONG THE WAY frame GX1 (shown) or X01. Those plan- price is already entry-level for a perfor- E-Mountain Bikes ning an extended two-wheeled adven- mance bike, by the end of the summer, ture should spring for the Bucksaw Cannondale plans to release another Carbon X01; Salsa managed to shave front-suspension bike line, with models Electric mountain bikes first Trey Chace, a Jackson, ily, so I can take it around a few pounds off it, thanks to a carbon starting at $980. They’ll have similar came on the scene in Eu- Wyo.-based cinematogra- town to get coffee or do frame. $3,999 for the GX1 shown, specs but slightly less expensive com- rope, then took off in the pher, bought several errands instead of jumping salsacycles.com ponents. $1,600, cannondale.com U.S. a few years ago. Ini- e-mountain bikes earlier in my car.” tially, they mostly attracted this year so that his par- While e-bikes are pro- riders unable to power up ents, who are in their 70s, hibited on trails designated trails on their own. But as could join him on dirt roads for nonmotorized vehicles, the bikes got better, their and easy trails together. avastnetworkofU.S.For- appeal broadened. “I don’t think my parents est Service and Bureau of Unlike some e-bikes that have been on bikes since Land Management roads do all the work for you, they were kids. These are so and trails do allow them. electric mountain bikes fun for them,” he said. (Check with local bike don’t offer a completely As an experienced shops or rangers before effort-free ride. Instead, mountain biker, he was heading out if you’re un- these electric-assist models surprised to find himself a sure.) At the end of the only output power to help convert, too. “I’m perfectly day, a little common sense you out when you’re al- able to ride without help, goesalongway:Beconsid- ready pedaling. The effect but this is the most fun erate of other bikers (espe- is like discovering that I’vehadonabikeinalong cially those pedaling up an you’re suddenly a lot time” said Mr. Chace. incline the old-fashioned stronger than you thought. “Plus, it goes 20 mph eas- way as you breeze by). For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com THE WALL STREET JOURNAL. Friday - Sunday, August 5 - 7, 2016 | W3 OFF DUTY

CUT ME SOME TRACK The 1964 U.S. Olympic relay team looking podium- ready in their matching jackets. GETTY IMAGES (TOP); F. MARTIN RAMIN/THE WALL STREET JOURNAL, STYLING BY ANNE CARDENAS

back to simpler, ’80s fashion tally flexible,” said British-born statements. Though Need Supply designer Neil Barrett. Co. stocks jackets from French Mr. Barrett hit that sweet A New Zip Code label Ami, it will soon be selling spot by cutting his navy and choc- more muted styles from Nike and olate-and-black zip-ups from soft Adidas which are designed less rayon and pliable polyester yarns. Stripped of logos and made in elegant muted shades, for superstar sprinters and more The result, as shown in his Janu- for men who do most of their ary runway show in Milan, is this season’s track jackets are ready to race running on their way to catch a comfy jacket that’s smooth to the morning train. the touch and sleek enough to top out of the gym into the street—and even the office What makes these jackets tapered black pants and pristine a top-seed is that, despite their white sneakers. BY JACOB GALLAGHER Mr. Bergl’s own jacket is roots. Chris Green, divisional mer- refinements, they offer the same For himself, the designer a logo-lite, all-black collaboration chandise manager for Richmond, level of comfort that’s made “ath- likes to style the new track jacket between Adidas Originals and Va. boutique Need Supply Co., leisure” clothes such a sought- zipped all the way up and layered LIKE MANY A SPORTS FAN,Sky- Palace, a high-end skate-inspired sees the influence of 1980s-era after (if occasionally ridiculed) under a camel's hair topcoat. lar Bergl will be tethered to his brand. “The hardware isn't super sport culture: the track jacket as commodity for the past couple of Call it “ath-elegance.” It’s a func- TV as the Olympic Games kick off flashy, and there are fewer graph- status symbol. Authentic athletic years. “You want to have a gar- tional but still grown-up combo in Rio this weekend. The 27-year- brands, he noted, are also strip- ment that is cut well and makes he can wear long after that final old senior editor in the Manhattan ping some of their track jackets you look slim, but it has to be to- medal has been awarded in Rio. office of public relations firm Edelman is especially looking for- Mr. Barrett likes to style ward to the soccer competition. his track jacket zipped all Neil Barrett Track-Top, $1,400, Laurel Tape Track Jacket, $130, While Mr. Bergl isn’t blessed with Nordstrom, 323-930-2230 fredperry.com the same athletic prowess as his the way up and beneath a favorite players, he does have one camel's hair topcoat. thing in common with them: a pre- dilection for track jackets—sleek, Call it ‘ath-elegance.’ sporty and literally zippy. As he’s found, even at the Olym- pics, where opening ceremony ics,” said Mr. Bergl, who wears get-ups tend to be star-spangled it with solid-colored wool pants and blindingly bright, you can still and a white button-up. find style cues to borrow from the Such an ensemble, polished athletes. Just take the warm-up and grown-up, can even fly under jackets worn by Gerald Ashworth, the radar at his office. Ditto the Richard Stebbins, Otis Paul refined, toned-down riffs on the Drayton and Bob Hayes in the classic jacket that brands like 1964 Olympics (above). Strip away Burberry, Christopher Shannon the supersize “U.S.A.” letters and and J.W. Anderson have intro- Track Jacket, $595, patriotic ribbing and you have duced for fall. us.burberry.com a neat, nipped top layer that’s Though new on the runway, assured and winning. this look definitely has retro

FRESH PICKS

THE WATCH Time for a Smokey

Over the last 119 years, outdoor-gear brand Filson has been a go-to for fishermen, hunters, hikers— and businessmen with rugged aspirations; its bags have become a ubiquitous sight in the wilds of New York’s subways. One reason for that fealty is rigorous field tests, said Alex Carleton, the Seattle company’s creative director. When he was brought on two years ago, he spent a few months hiking through Yellowstone, fly-fishing on the Skagit and mountaineering in Denali, all the while ruminating on what the Filson faithful might need next. Along the way, Mr. Carleton gained a new ap- preciation for the sibling government agencies, the National Park Service and the U.S. Forest Service—and discovered that Filson had a long- time relationship with the latter, having provided it with uniforms from the 1940s to the ’70s. While touring the Pacific Northwest, Mr. Carle- ton kept seeing iconic Smokey Bear signs (“Only THE SHOES YOU can prevent forest fires”), which sparked a A Sneaker for Saturday and Beyond special collection in partnership with the U.S.F.S. using the wisdom-dispensing bear. Designer Brendon Babenzien won’t tell you reviving his menswear brand, Noah, last year, The nostalgic wares are especially timely with when to wear his shoes. “If you tell some- Mr. Babenzien found himself with the space the centennial of the N.P.S. coming up on August one it’s a weekend shoe, they’ll think they and resources to bring back Aprix. 25. The collection, which launched last week, in- can’t wear it on a Tuesday,” said Mr. He’s starting with two styles, both up- cludes items like a Pendleton blanket emblazoned Babenzian recently. “Don’t listen to us.” grades of the classic white canvas sneaker. with Smokey’s face. The stand out piece (collect- But whenever you choose to wear the sub- One (pictured) features suede accents on the ability alert) is an updated version of Filson’s tly luxe sneakers from Aprix, the brand Mr. toe and heel; the other has just a clean slice Mackinaw Field watch with imagery of Smokey Babenzian is relaunching this week, they’re of color on the heel. The sneakers are avail- atop his slogan. It comes with six “vintage” unequivocally ideal for kicking back. Made able with accents of royal blue, Kelly green, Smokey postcards and a bandanna printed with in Italy, the canvas shoes’ razor-cut rubber navy and gray, a palette Mr. Babenzien de- fire-safety tips, among other things. Only 1,000 soles can navigate a boat deck or skate scribes as “where prep and New Wave con- numbered watches will be released. In truth, only deck, while leather linings both feel good verge.” Going forward, he’ll experiment with 999 are for sale; Mr. Carleton has already claimed and mitigate odor. vibrant shades and a paisley print. His oath: one for himself. Filson Smokey Bear Watch and The brand, which he started over a de- “They’ll never be dull.” Aprix Sneakers, $225, Bandanna, $1,000, filson.com cade ago with race-car driver Michael Power, available exclusively at Noah and noahny.com. — Lauren E.M. Joseph went on hiatus in the mid-2000s, but after —Rachel Seville Tashjian F. MARTIN RAMIN/THE WALL STREET JOURNAL, STYLING BY ANNE CARDENAS For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com W4 | Friday - Sunday, August 5 - 7, 2016 THE WALL STREET JOURNAL. OFF DUTY The Jaunt Committee

Three fashion insiders share notes on their favorite late-summer getaways: where to stay, eat, shop and, of course, what to pack

Beth Bugdaycay Chad Buri Virginie Courtin-Clarins Creative Director & Co-founder, Foundrae Co-founder and COO, Sleepy Jones Global Communications and Brand Development Director, Mugler

Destination: Charleston, S.C. Destination: Del Mar, Calif. Destination: St. Tropez, France

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Reason to go: Thejewelry Where to eat: Sample Reason to go: For those Where to eat: Roberto’s, Reason to go: Heading to mam lateinthe day. She designer loves American his- “high-end Southern” at restau- old-soul California vibes a roadside taco shop for this Riviera resort town (1) is plans to read a biography of tory, and this popular south- rants like Husk(huskrestau- andlazy days spent splash- fish tacos served with a view an annual event for the fash- Louis XIV (her favorite is Max ern city “has so many stories rant.com)—try theShrimp and ing in the Pacific Ocean. (robertos-sd.com). ion executive. Some 30 years Gallo’s “The Sun King”). toexplore,” she said. First up: Edisto Grits (2)—and Hominy “Del Mar (1) isanice spot to Where to shop: Even ago, her grandparents bought Where to eat: Onahidden going withher husband, Mu- Grill (hominygrill.com). OnSulli- slow down and reconnect if you don’t surf,dropinto the family house where she side street in town, sample rat, son Gem, 12, anddaugh- van’s Island, Ms. Budgaycay with family,” said Mr. Buri. thenearly 50-year-old andhusband,Ludovic Cesari, Thai and Vietnamese dishes ter, Ayla, 5, to see the French hits theObstinate Daughter Wheretostay: L’Auberge Mitch’s Surf Shop to check stay. “It’s where I learned to at the popular Le BanH-Hoi Huguenot Church. to pick up lunch for the beach Del Mar (from $334 a night, out thecoolboards, caps swim,” she said. (banh-hoi.com) Where to stay: They bed (theobstinatedaughter.com). laubergedelmar.com) was and tees. Andbesuretogo Wheretostay: Thecharm- Where to shop: Rondini, downatahouse on Sullivan’s Where to shop: She finds once a retreat for Old Holly- inland for the “incredible ing Le Manoir (from $200 theonly-in-St. Tropez bou- Island,taking the Water Taxi inspiration at Curiosity (3) wood stars, like LucilleBall sweet corn and tomatoes” a night; hotel-lemanoirport- tique that sells les tropézi- (charlestonwatertaxi.com) into (curiosityvintage.myshopify.com) and Desi Arnaz. (It was at Chino Farm. cros.com) sits in the middle of ennes sandals (rondini.fr). town. Recommended:the and Croghan’s Jewel Box called Hoteldel Mar then.) What to wear: Packlight the Port-Cros nature and ma- What to pack: “For day, two-bedroom homesatthe (croghansjewelbox.com). The since-renovated resort with the North Face’s back- rine preserve (3).“Wegoby I pack an Eres swimsuit, Lisa Cottages on Charleston What to pack: Inside her sits right in the heart of the pack duffel (4) ($135, the- boat andhave lunch,” she said. Marie Fernandez beachdress Harbor (from $459 a night; Rimowa: a Norma Kamali town’s beachside community. northface.com).Forlong days Order salade Niçoise on the (2) ($775, lisamariefernan- thecottagesoncharlestonhar- swimsuit (4) ($150, normaka- What to do: Stop bythe at the beach, Mr. Buri wears ocean-view terrace, anddon’t dez.com) and my Mugler bor.com). mali.com); a Fontana Milano Del Mar Racetrack (5) tosee Birdwell board shorts (3) be surprised by the wild life: beach tote (4) ($2,520, Berg- What to do: The Magnolia tote (5) ($4,100, barneys.com); theweekendhorse races. ($79, birdwell.com) and, for “There are donkeys!” dorf Goodman, 800-558-1855). Plantation and Gardens (mag- a Casey Casey shirtdress (1) Mr. Buri recommends bring- “shirts and shoes required” What to do: Along with Atnight, I onlywearsexy, noliaplantation.com) may be ($1,030, farfetch.com) andher ing the family early to watch locales, hethrows on Sleepy swimming and snorkeling,Ms. black Mugler dresses with set in a lushlandscape, but the own jewelry (6) ($3,730, and the pre-race workouts while Jones’ cotton tees (2) ($48 Courtin-Clarins plays tennis flat K. Jacques sandals (5) slave cabins are a sobering re- $2,650, foundrae.com). enjoying breakfastatthe sleepyjones.com). every morning and takes a ($265, net-a-porter.com).

minder of what went before. —Donna Bulseco club(dmtc.com). —Lauren Ingram steam in their at-home ham- —D.B. F. MARTIN RAMIN/THE WALL STREET JOURNAL, STYLING BY ANNE CARDENAS (SHIRT, SHORTS, DUFFEL, RINGS, SWIMSUIT); GETTY IMAGES (DEL MAR, ST. TROPEZ, PORQUEROLLES); JENI BECKER (CURIOSITY VINTAGE); PETER FRANK EDWARDS (HUSK); ILLUSTRATIONS BY ULI KN

FÊTE ACCOMPLI: A GOOD LOOKS GUIDE TO RECENT EVENTS

Rachelle Hruska GWYNETH’S Gwyneth Paltrow MacPherson inaDavid Koma inaHouseof MOVABLE FEAST jumpsuit Hollanddress

IN A SPIRIT-WILTING heat wave like the one they faced recently, New Yorkers aren’t keen to go from one hot spot to another. They’re a lit- tle more motivated, however, when the roving party’s hosts are Gwyneth Paltrow, Mario Batali and Lisa Gersh (CEO of Ms. Paltrow’s HOBNOBBING WITH lifestyle website Goop)—and when the final stop isLaSirena, Mr. Batali’s newest NYC BENICIO DEL TORO restaurant in the Maritime Hotel. The night began with drinks at Untitled, a restaurant at the Whitney Museum, where The actor, who just finished filming ‘Star guestsweregiven the option of being driven Wars: Episode VIII,’ on all things festive Erica Cerulo and the approximately sixminutes to La Sirena in Neil and Rachel Claire Mazur a Cadillac XT5 SUV. Luckily, no one got stuck Best partyyou’ve ever one.InL.A.,you have to Blumenthal intraffic, and dinner was on time. Among the been to? There are some drive. I’ve also had good guests: Dannijo designers Danielle and Jodie nights in Cannes that have times in Paris and Madrid. Snyder and Guest of a Guest co-founder Ra- been special. The first time Drink of choice? Beer or Sai De Silva chelle Hruska MacPherson. “I live for the truf- I went in 1998, the after- tequila. I partnered with fle pasta,” Ms. MacPherson said. That wasn’t inanAlexis dress party for “Fear and Loath- Heineken recently. I’ve on the menu, but a tricolore salad with Chianti ing in Las Vegas” was never done a campaign vinaigrette and sweet corn agnolotti were. surreal. The Frenchknow like this before. It had to Ms. Paltrow and Mr. Batali—who,in 2008, how to throw a party. be a good fit. collaborated on the cookbook “Spain...A Culi- How adeptareyou as Wallflower or life of the a host? party? nary Road Trip”—indulged inreminiscences. I admire people Even as a kid, Iwas ) 9 “Mariowasjust teasing me about how I’d bring who can plan a party with shy at my birthday parties. ( every boyfriend to Babbo [another Batali res- lots of people and they Iwasembarrassedabout the taurant] over the years,” Ms. Paltrow joked. all havefun. I find that it birthday cake. There were The chef confessed he’d learned a lotfrom becomeswork forme.It people singing, and I would Goop: “I can’t say I’ve made a turmericlatte must be in the genes: Ei- be thinking, “DoIhavetobe ; HANNAH THOMSON or read how to achieve sexy beach hair, but ther you’re born a host or here?Do Ihave to blowthe ) Zanita Caryn Prime and I love her mindfulness articles.” not. I just start sweating. candles out?” People like my Whittington Anne Kwon Keane Best party city?

So what’s on the Goop founder’s agenda for There’s daughter [4-year-old Delilah], DEL TORO ( fall? “Sound baths,” Ms. Paltrow said, akind of BRAKE TIME The table more spontaneity in New she likes her cake; she surround-sound meditation that’s meant to fo- settingsatthe Goop X Cadillac Yo rk: You can be in one stands there and enjoys it. Bronson cus the mind. “I haven’t done ityet.I’mgoing Road to Ta ble dinner. world and, three steps —Edited from an interview Van Wyck tobe onthe lookout.” —CarsonGriffith away, walk into another by Jacob Gallagher GETTY IMAGES For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com THE WALL STREET JOURNAL. Friday - Sunday, August 5 - 7, 2016 | W5 OFF DUTY All in Good Brine Refrigerator pickles—crisp, refreshing, unbelievably easy—are a clever way to make the most of summer’s fruit harvest

BY KAREN STABINER A PRETTIER PICKLE Left to right: pickled grapes, pickled cantaloupe, pickled watermelon rind. OOKBOOK AUTHOR TED LEE doesn’t like green Thompson seedless grapes. It’s nothing personal, but by the time they make the flight from California to the market where he shops in Brooklyn, they seem to have lost some of their flavor.C So he pickles them, along with red seedless grapes, because to him a jolt of vinegar and garlic and chili flakes and rosemary is just what a jet-lagged grape needs. Pickling is so virtuous: It not only revives fruit but uses up things like watermelon rind that would otherwise go to waste. It also means that you can buy up all the summer produce you want, right now, and what you don’t eat can be brined and refrigerated to see you through the lean months. Refrigerator pickles reward patience—their flavors im- prove after about a week—but they demand no particular expertise. I stumped Jean-Paul Bourgeois, executive chef of New York’s Blue Smoke restaurants, when I asked how long his watermelon-rind pickles last. The refrigerator pro- tects them like canning does, so they’re good for months, maybe a year as long as they’re submerged in liquid—though Mr. Bourgeois always uses them up sooner than that. You don’t have to fuss too much over the knife work, either—just cut the fruit or rind down to pieces that will fit into a Mason jar; grapes can be pickled whole. Even leftover brine has a purpose: Store it in the refrigerator for future vinaigrettes. In terms of ratio of effort to outcome, it doesn’t get much better than cold-brined pickled fruit. Tart fruit pickles like to hang out with cheese, or brighten a salad, or sit, sliced thin, on a sandwich; cheese and bread are very happy to be livened up with slivers of pickled grape. Chef Tory McPhail of Commander’s Palace in New Orleans uses pickled cantaloupe for one of the restaurant’s signature

cocktails, a riff on the gin-based French 75. For the TED CAVANAUGH FOR THE WALL STREET JOURNAL, FOOD STYLING BY JAMIE KIMM, PROP STYLING BY NIDIA CUEVA Saint 75, he soaks melon in a gin mixture and then uses the boozy liquid as the cocktail base, topped off with cava Pickled Grapes (recipe below). Transfer any ring to dissolve. Transfer to TOTAL TIME: 1 week (to let and garnished with basil and cubes of the pickled fruit. ACTIVE TIME: 15 minutes garlic, rosemary and chili flakes an airtight container. Add basil flavors develop) The extra pickled cantaloupe his recipe produces lends a TOTAL TIME: 45 minutes remaining in strainer to con- leaves to container and seal. MAKES: 4 pints kick to prosciutto and melon, or goes into the freezer for MAKES: 1 pint tainer with grapes. Refrigerate 4 hours. Remove more Saint 75s. 3. Cover container tightly, wilted basil. Return to refrigera- 1 small watermelon You can just put a few pickles in a little bowl when you 2 cups seedless red and/or shake to distribute seasonings, tor until ready to use. 32 ounces Champagne want a snack, but I confess this strategy failed me when it green grapes (about 10 uncover and let cool to room 2. Peel and halve cantaloupe, vinegar came to those addictive pickled grapes. Half of them landed ounces) temperature, about 30 minutes. scoop out seeds and cut into 16 ounces hot water 3 in my mouth before they ever reached the bowl. /4 cup distilled white or Cover again, and transfer con- wedges. 3 cups granulated sugar white wine vinegar tainer to refrigerator to chill 3. Make pickling liquid: Com- 4 cups ice 3 1 /4 cup water further, about 15 minutes more. bine elderflower liqueur, gin, 1/2 teaspoon mustard seed 3 Saint 75 Cocktails 1 teaspoon kosher salt, —Adapted from “The Lee Bros. lemon juice and basil syrup. /4 teaspoon celery seed 1 ACTIVE TIME: 5 minutes TOTAL TIME: 1 hour (includes chilling plus more to taste Simple Fresh Southern” by Ted 4. Place melon wedges in an 2/4 teaspoons Aleppo pepper 1 flutes) MAKES: 6 drinks 1 teaspoon sugar and Matt Lee airtight container or Ziploc /2 cinnamon stick 2 small cloves garlic, bag. Pour pickling liquid over 1. Cut watermelon in half, place Pickled cantaloupe (recipe at peeled and crushed Pickled Cantaloupe fruit, filling container, or press- flat side against cutting surface 1 right), cut into /2-inch Leaves from 1 (2-inch) ACTIVE TIME: 30 minutes ing as much air as possible out and slice melon into strips. chunks, plus pickling liquid sprig rosemary TOTAL TIME: 2 days (includes of bag. Refrigerate 24 hours Scoop out red flesh and reserve 1 1 bottle cava /8 teaspoon dried marinating) SERVES: 6 before proceeding with Saint for marinated watermelon salad 6 basil leaves for garnish red chili flakes 75 cocktail recipe at left, add- recipe (below). Trim away green For the basil syrup: ing to a salad or pairing with part of rind and discard. Cut 1. Divide pickling liquid between two 1. Pack grapes into a glass jar 1 cup granulated sugar prosciutto. white rind into wedges that will cocktail shakers filled with ice. Cap or airtight plastic container. 1 cup tightly packed basil —Adapted from Tory McPhail fit in a pint container, about 2 and shake both, then strain liquid Pour vinegar and water into leaves of Commander’s Palace, inches wide. into 6 chilled Champagne flutes. Top a saucepan over medium-high 1 cup warm water New Orleans 2. Combine sugar and hot wa- each glass with 4 chunks melon and heat. Add salt, sugar, garlic, For the pickles: ter and mix to dissolve sugar. cava, and garnish with a basil leaf. rosemary and chili flakes. Bring 1 small ripe cantaloupe Pickled White Add ice to mixture to cool. Add 2. Serve remaining pickled canta- to a simmer and cook 1 minute. 6 ounces St-Germain Watermelon Rind mustard seed, celery seed, loupe with prosciutto. Or freeze in 2. Remove pan from heat and Elderflower Liqueur The white part of the rind isn’t Aleppo and cinnamon stick. an ice cube tray. Once frozen, canta- pour brine over grapes to fill 6 ounces gin as fibrous as the green part, so 4. Place rind wedges in jars loupe can be transferred to an air- container. Strain remaining 6 ounces lemon juice, all it needs is a cold pickling so- and pour brine over to sub- tight container or Ziploc bag for brine into a measuring cup (you fresh squeezed lution, which yields a crunchy, merge fruit. Save extra liquid to future use. should have a little less than 6 ounces basil infused not-too-sweet pickle. If you have use in a vinaigrette, or to make 1 —Adapted from Tory McPhail of /2 cup left over) and reserve for simple syrup the self-control, let the pickles sit more pickles. Commander’s Palace, New Orleans making butter lettuce salad 1. Make basil syrup: In a sauce- in the refrigerator for a week to —Adapted from Jean-Paul with pickled grapes, toasted pan over medium-high heat, soak up all the flavors. Bourgeois of Blue Smoke, pecans and soft goat cheese combine sugar and water, stir- ACTIVE TIME: 30 minutes New York

Butter Lettuce Salad With Pickled Grapes, Toasted Pecans and Soft Goat Cheese Some of the pickled-grape brine in the recipe above becomes the base for a simple lemon vinaigrette, which gives this salad its refreshing tone, to contrast with the toasted pecans and rich cheese. ACTIVE TIME: 10 minutes TOTAL TIME: 30 minutes SERVES: 4-6

1 /2 cup pecan halves 1 cup pickled red and/or green grapes 2 teaspoons Dijon mustard Juice of half a lemon 1 /2 cup pickled-grape brine 1 /2 cup olive oil, plus more to taste Freshly ground black pepper 2 large heads butter, Boston, romaine or mixed lettuces, torn 4 ounces soft goat cheese (optional)

1. Preheat oven to 250 degrees. Marinated Watermelon Salad Spread pecans on a baking With Lime Vinaigrette sheet and toast until fragrant, Crisp pickles, salty cheddar, toasted pecans and peppery cress combine 15-20 minutes. Set aside with watermelon for a summer salad layered with flavor. to cool. 1 ACTIVE TIME: 30 minutes TOTAL TIME: 1/2 hours SERVES: 4-6 2. Add mustard and lemon juice to measuring cup containing brine For the lime vinaigrette: 2 pounds watermelon leftover from making pickled 4 ounces fresh lime juice cut into chunks grapes (recipe above), and whisk 4 ounces extra-virgin (about 5 cups) to combine. Add olive oil, whisk olive oil 5 ounces Cabot or other again to thoroughly emulsify, 1 Zest of /4 lime clothbound cheddar and season to taste with salt 1 teaspoon dark brown cheese, cut into chunks and pepper. 1 sugar /4 cup toasted pecans 3. Strain pickled grapes, reserving Kosher salt and freshly sea salt brine. Halve 1 cup grapes, return ground black pepper 3 bunches watercress remaining brine and grapes to For the salad: or arugula container, and reserve for another use. Divide lettuce among six 1. Whisk together vinaigrette ingredients. Marinate watermelon in vin- bowls or plates, and scatter some aigrette in an airtight container in refrigerator 1 hour or up to one day. halved grapes, pecans cheese 2. Preheat oven to 400 degrees. Spread pecans over a baking sheet over each portion. Whisk and toast 6 minutes. Sprinkle with sea salt and set aside to cool. vinaigrette again and drizzle over 3. Drain marinated watermelon. In a large bowl, combine water- salad. Grind pepper over each melon, cheese and pecans. Toss with greens and dress with salad and serve. lime vinaigrette. —Adapted from Ted and Matt Lee For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com W6 | Friday - Sunday, August 5 - 7, 2016 THE WALL STREET JOURNAL. OFF DUTY

ON WINE: LETTIE TEAGUE Paging Emily Post: Oenophiles Behaving Badly

A HIGH-PRICED restaurant expe- rience, complete with a wine hi- jacking, wasn’t a topic I expected to discuss during a routine dental checkup and cleaning last month. But that’s exactly what my den- tist, David Silverstrom, wanted to talk about when I sat down in his chair. Dr. Silverstrom and a colleague had recently invited a third den- tist to dinner, and it quickly turned into a pretty pricey affair. Their guest, a self-declared wine expert, ordered three bottles of Napa Cabernet for a total of over $1,000—and let them pick up the check. Had I ever heard of such a thing? Dr. Silverstrom wanted to know. I most certainly had. A few weeks earlier, some friends told a similar tale. The couple, who prefer to remain nameless, had been invited to spend the weekend with friends who own a beach house, and on the last night, as a thank you, they took their hosts to dinner. At the restaurant, the hosts’ 20-something son ordered some very expensive wine, turning my friends’ little sojourn into anything but a “free” weekend

at the beach. RAFA ALVAREZ Although most wine drinkers comport themselves with a cer- Wealthy,” admits that he has who wanted to remain anony- before. After my friend agreed, what he’s talking about and can tain degree of decorum, shame- done a bit of speedy wine swal- mous, also enlists the somme- feeling she couldn’t deny the re- afford to indulge his fine palate. less business associates or greedy lowing himself. But he insists lier’s help when dealing with in- quest, the client proceeded to Looking at Marcel’s wine list, “friends” holding their hosts fis- that he only does so when a guest dulgent oenophile clients who drink the entire bottle herself, he noted that it included a 1982 cal hostage by ordering a pricey orders an expensive wine on his want to capitalize on her expense making a double-header of sorts Château Angelus ($3,560) and Burgundy or Bordeaux is nothing tab, as a way of getting a little account. “I’ll call the sommelier in bad wine etiquette. 2006 Château Lynch-Bages ($650) new. I’ve never experienced it something back. ahead of time, choose the wine My friend Andy Nathan, that he found appealing. I told myself—my being a wine journal- for the evening and say, ‘Can you a Scarsdale, N.Y.-based real-estate Mr. Ferry that I thought the ist probably keeps people from have these wines ready to go?’ ” developer, doesn’t get taken ad- wines were “a bit overpriced,” trying to pull such tricks—but she said. vantage of very often. A wine trying to keep the panic out I’ve often been on the receiving Shameless business This friend, who “wines and collector, he is almost always of my voice as I tallied the bill end of other less costly but no associates or greedy dines clients constantly” as part handed the restaurant wine list in my head. less disgraceful examples of bad of her job, said she has been when he takes clients out to din- When the then-sommelier wine etiquette. ‘friends’ can hold their a victim of greedy wine types ner because they know he knows Ramon Narvaez (now the restau- Take, for instance, the person hosts fiscal hostage by about 10 times in her career. “Cli- a lot about wine. rant group beverage director) who brings a particular bottle to ents know agencies pay and that But there was one occasion stopped by our table, I mentioned a party or orders a special wine ordering a pricey wine. agencies want to impress,” she when things got “a little out of that we’d been looking at some at dinner, only to repeatedly fill said. Interestingly, it has never hand,” he recalled. “I was hosting Bordeaux but were open to Bur- up his or her glass without pour- happened to her when she is din- a closing dinner on a big deal gundy if he had a suggestion. ing it for, or offering it to, anyone Paul has an even more effec- ing with someone who actually we had closed, and I told [my cli- Fortunately he did. As my friend else. Witnessing such antics, tive bait-and-switch strategy for knew something about wine, she ents] to order what they like,” Paul noted, a good sommelier can I sometimes find myself having dealing with piggish guests: If said. “I’ve never had a client who Andy said. “They went right to save you from all sorts of wine- to almost wrest the bottle away they pick an absurdly expensive had a sophisticated palate take the $600 and $700 wines.” To be etiquette peril, even self-induced. from the sticky-fingered offender. wine from the restaurant wine advantage of a business dinner.” fair, he added, “it was a celebra- Mr. Narváez proposed the 2005 This sort of behavior is the oppo- list, Paul says something like, That’s probably because those tory dinner where millions of dol- Michel Magnien Morey-Saint- site of a gracious host or true “That’s a fascinating choice, but who are truly savvy know great lars were changing hands.” Denis Les Chaffots ($145). Mr. wine lover, who always serves I don’t know if it will go with wines that are not necessarily Celebrations and other special Ferry happily agreed to the selec- others first. Wine is for sharing, what we’re having” and promptly of the trophy kind. My friend occasions are often a good reason tion. A rock star without preten- not hoarding, after all. summons the sommelier. After searches for these when she to splurge, but even when you’ve sion, he turned out to be a much A slightly more passive version telling the sommelier the name of looks at wine lists online before decided to go big or go home, it more civilized dinner guest of the example above is the act the wine his guests have chosen, meals and often enlists her oeno- is important to set and communi- than a dentist. of maximizing the amount of he points to a more moderately phile husband’s help in picking cate expectations to avoid awk- A few hours later, Mr. Narvaez wine in one’s glass. When the priced selection on the list, mak- out three or four options to pres- ward situations. After all, going did suggest we try a glass of waiter approaches the table to re- ing sure his guests can’t see what ent to clients. Pre-chosen bottles big can mean different things to 2008 Domaine de la Romanée- fill the wine glasses, a certain he’s doing, and asks if there is can help hold a wine-grab from different people. Conti Duvault Blochet (a $700 sort of drinker will immediately “something over here that’s more taking place. A few years ago I took Bryan bottle of wine). But that’s an- down the contents of his glass, interesting.” A good sommelier Of course, even the best-laid Ferry to dinner at Marcel’s res- other story. thereby ensuring that he will get always catches on, said Paul, and plans can fall victim to unex- taurant in Washington, D.C. the largest share of the wine. “suggests” the new wine in his pected twists, like the client who Mr. Ferry is not only a rock star Enjoy savory discussions on food My friend Paul Sullivan, author preferred price point. asked my friend if she could extraordinaire, he’s also a wine and drink with our WSJ Off Duty of “The Thin Green Line: The Another friend, a high-powered order a $200 Burgundy, pleading collector and a big fan of Bor- podcast at WSJ.com/podcasts. Money Secrets of the Super ad executive based in New York that she’d never had the wine deaux, which means he knows Email Lettie at [email protected]

SLOW FOOD FAST: SATISFYING AND SEASONAL FOOD IN ABOUT 30 MINUTES Grilled Porterhouse With Creamed Corn YOU PROBABLY RECOGNIZE Curtis a few weeks ago with a butcher counter Stone from his many television appear- built in. “There wasn’t a great, old-world ances—as a host on Bravo’s “Top Chef butcher shop in L.A.,” said Mr. Stone. “We Masters,” for one. Before that he worked wanted to change that.” The dining room in top kitchens in his native Australia and looks onto an open kitchen with a wood- in England. Yet it was only two and a half burning grill. Meat—all of it butchered years ago that he opened a restaurant of and dry-aged in-house—takes center stage. his own, in Beverly Hills. Named Maude, This grilled Porterhouse steak, served after his paternal grandmother, it features family-style with creamed corn and a set menu focusing on a single seasonal charred scallions, is straight out of the The Chef: ingredient: Spring peas might arrive in the Gwen playbook. For Slow Food Fast, Mr. Curtis Stone form of a light foam in one course and pu- Stone streamlined the recipe with home réed into a soup in the next. cooks in mind, making it a no-brainer for His Restaurants: His second L.A. restaurant, called Gwen, feeding a family or a few guests on a sum- Maude and Gwen for his maternal grandmother, opened mer night. —Kitty Greenwald Butcher Shop & Restaurant, both in TOTAL TIME: 30 minutes SERVES: 4 Los Angeles 1 (2-3 pound) Porterhouse Kernels from 4 large ears end trimmed and outer 1 What He steak, at least 1/2 inches sweet corn layer removed Is Known For: thick 2 tablespoons butter 2 tablespoons olive oil, Making the Kosher salt and freshly 2 tablespoons heavy cream plus extra for drizzling leap from top ground black pepper 10 whole scallions, root 1 lemon, cut into wedges kitchens in Australia and England to 1. Season steak generously with salt and pep- 1-2 minutes. Remove from heat and cover. American TV. per and set aside. Heat grill: If cooking with 3. Once grill is very hot, drizzle steak and scal- Intimate restaurants charcoal, gather coals on one side to create lions with olive oil. Grill steak over high heat that pay tribute a high-heat zone; with a gas grill, set elements until well seared, about 3 minutes per side. to great ingredients. to high but turn one burner down to medium. Transfer steak to medium-high heat zone and 2. Heat 2 tablespoons oil in a medium pan cook until interior is medium-rare, 1-2 minutes over medium-high heat. Once hot, stir in corn more per side. Set steaks aside and let rest kernels. Sauté corn until tender, 3-5 minutes. 10-15 minutes. Using a food processor or blender, purée half 4. While steaks rest, grill scallions over me- the corn until it is creamy but retains some tex- dium-high heat, turning with tongs, until

ture. Return purée to pan with sautéed kernels. charred all over, 1-2 minutes. Serve steaks TED CAVANAUGH FOR THE WALL STREET JOURNAL, FOOD STYLING BY JAMIE KIMM, PROP STYLING BY NIDIA CUEVA; ILLUSTRATION BY MICHAEL HOEWELER Stir in cream, season with salt and cook until family style with creamed corn and scallions, CATCH FIRE Charring the scallions directly on the grill takes the cream is evenly distributed and sauce reduces, plus lemon wedges to season. edge off and draws out sweetness. For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com THE WALL STREET JOURNAL. Friday - Sunday, August 5 - 7, 2016 | W7 OFF DUTY

SIDE TRIPPER When in Rio… For Olympics visitors seeking a game plan between events—or an excuse to ditch that small-bore target shooting final—our Brazil-based correspondents compare and contrast three easy excursions from the city’s tourist zone

Grumari Beach Grumari, the anti-Copacabana. AN ISOLATED, GOLDEN CRESCENT NESTLED IN A NATURE RESERVE Insider 75 MINUTES AWAY BY CAR intel: Take the beach road Av. Lúcio Costa not the inland Av. Best for: Surfers with good back about $25. Other draws: das Américas, unless medical insurance; non-surgi- fresh coconut water, frosty you’ve got a thing for cally reconstructed sun wor- açai and mounds of fried strip malls and shipers; Olympic tourists with snacks. The Mel El Shaday McMansions. caipirinha hangovers. kiosk opens early, serving What it has that Rio doesn’t: strong, sweet Brazilian-style Surging waves free of chemical coffee and stiff drinks if you (and other) waste; spacious need an eye-opener. sands devoid of souvenir hus- Instagram gold: The buff tlers, Copacabana fashion vic- lifeguards on their funky tims and wayward soccer balls. observation deck. Don’t miss: The nearby Casa Getting there: Renting a car do Pontal museum, which of- is your best option. A bus trip fers not only Brazil’s greatest will likely be frustratingly slow, folk-art collection but a kid- and you’ll have to hike up friendly miniature model of the a steep hill to get to the beach. nation’s entire social history Try the rental car agency Mov- (museucasadopontal.com.br). ida Aluguel de Carros in Copac- Don’t bother: Slowing down abana (movida.com.br).Ifyou to gawk at the Olympic Park in set out early in the day—say, Barra de Tijuca en route. Your 7:30 a.m.—the trip should take fellow motorists, and Brazilian just over an hour, but later in security forces, won’t be amused. the day, Rio’s notorious traffic If you have time for only makes travel times unpredict- one meal: Grab some seafood able. Don’t even think about at one of the beachside snack attempting the drive without shacks; fish stew for two and GPS; it looks easy on a map,

a couple of beers will set you but it isn’t. GETTY IMAGES (GRUMARI, NITEROI); ALAMY (PETRÓPOLIS); ILLUSTRATIONS BY HOLLY WALES

Brazil’s Imperial City of Petrópolis. Petrópolis A MIDSIZE CITY IN THE MOUNTAINS THAT SERVED AS THE SUMMER ABODE OF BRAZIL’S LAST EMPEROR 70 MINUTES AWAY BY CAR

Best for: Die-hard monarchists, Dom Pedro and his empress. lager aficionados, flea-market Don’t bother: Going inside the scavengers. Palácio Amarelo, the historic What it has that Rio doesn’t: town hall, whose regal facade Cool mountain climes, compact belies a gloomy interior. Instead, history lessons and uniquely hit the small, but choice, antiques tropical-Bavarian cultural and culi- market right outside. nary experiences thanks to the If you have time for only one Germans immigrants who settled meal: For sturdy Alpine appetites, here in the 19th century. try the fare at the Biergarten at the Claim to fame: The Imperial Pal- Cervejaria Bohemia, washed down ace of Brazil’s emperor Dom Pedro with a locally brewed beer (see II (1825–1891) is now a museum “Don’t miss”). Alternatively, the in- loaded with royal paraphernalia door-outdoor Duetto’s Café e Bistro and 19th-century landscape paint- next to the Imperial Palace offers ings. Dom Pedro’s presence at- good sandwiches, salads and spe- tracted a retinue of VIPs and cialty coffees (museuimperial.gov.br). power-seekers who built their own Insider intel: The Crystal Palace, fancy digs nearby. Also in town: a few blocks from the Imperial the home of aviator-inventor Museum, sometimes hosts Sun- Alberto Santos-Dumont, a Brazilian day afternoon concerts of tradi- national hero known as “the father tional Brazilian music. of flight” (with no apologies to the Instagram gold: A selfie in front Wright brothers). of the ginormous Palácio Quitand- Don’t miss: Tipplers will enjoy the inha, a faux-Bavarian former hotel Cervejaria Bohemia brewery and that’s now a government-owned beer garden (bohemia.com.br/res- cultural space. taurante), but before you stop in, Getting there: Hop a bus from take a peek at the Catedral de São Rio’s Rodoviária Novo Rio bus Pedro de Alcântara, a Gothic Re- terminal. Or rent a car. The drive vival church flanked by palm trees should take just over an hour where lie the mortal remains of without traffic.

Niterói Niterói Contemporary Art Museum. A SEASIDE CITY DIRECTLY ACROSS GUANABARA BAY FROM RIO 45 MINUTES AWAY BY CAR

Best for: Modernist-architecture If you have time for only one mavens, military-history buffs, meal: Located above the ferry intrepid paragliders, view freaks. terminal, Olimpo (designed by What it has that Rio doesn’t: Niemeyer and decorated by A slower pace. Niterói is Rio’s Gilles Jacquard) has pricey food calmer fraternal twin with but superb vistas of Guanabara equally stunning views. It’s also Bay (restauranteolimpo.com.br) home to the massive Fort São If you’re in no rush to get Luiz and Fort do Pico complex, back: Take a dip at tranquil which overlooks a Portuguese- São Francisco beach. style fishing village, Jurujuba. Instagram gold: Posing along- Claim to fame: Several mas- side Niemeyer’s otherworldly terworks by architect Oscar art museum is like posing next Niemeyer, including the 1996 to a UFO (just Photoshop in Niterói Contemporary Art an alien). Museum and the space-age Insider intel: Paragliders hoping Olimpo Restaurant. to take in a bird’s-eye perspec- Don’t miss: The Parque da tive of the bay be advised: Air- Cidade, a hill-climbing nature space travel will be restricted preserve and prime paragliding during the Games, so you’ll need jumpoff point, with killer views to do your condor act after of Rio de Janeiro’s waterfront Aug. 21. Ciro Animau, a former and monumental granite is- pilot and air-traffic controller, lands. Just up the road, for a runs a highly rated paragliding nominal fee, you can drive into outfit and speaks English flu- the fort compound where a ently (ciroanimau.com). Brazilian soldier will walk you Getting there: Rent a car, or around the site. Bonus views: take a ferry across the bay, The stone battlements afford then flag down one of the taxis vistas of the iconic Corcovado hurtling by on the beach road. Mountain and Christ the Re- —Marla Dickerson and deemer statue. Reed Johnson For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com W8 | Friday - Sunday, August 5 - 7, 2016 THE WALL STREET JOURNAL. OFF DUTY

PILGRIMAGE A Cocteau Party to Remember

An avowed maximalist finds affirmation in a visit to the super-eclectic home of Jean Cocteau

BY EMILY EVANS EERDMANS his home to explore the three rooms that remain as they were when Cocteau died, at 74, in 1963. URREALIST writer, artist The first, the salon, is outfitted and filmmaker Jean Coc- mostly in modest 19th-century ma- teau first showed up on hogany furniture; atop every sur- my radar in 2009 while face sit shells, books, sculpture I was researching a book fragments and ceramics. A favorite aboutS eccentric French decorator trick of Castaing’s lends cohesion to and antiquaire Madeleine Castaing. the clutter: All walls are uphol- Her radical eclecticism—think leop- stered in a graphic brown print, and ard-patterned carpeting, aqua walls a large patterned rug answers in and neoclassical antiques—capti- brown and cream. Splashes of red vated the It Crowd in post-WWII keep the room vibrant as do flashes Paris, including Nina Ricci, Pablo of brass and gilding—the sunburst Picasso, Coco Chanel and Cocteau. ornament over the fireplace, for ex- After discovering that Cocteau ample, a gift of Coco Chanel. borrowed pieces from Castaing’s The salon embraces another shop as set props, I watched his Castaing tenet: Every room should SURREAL ESTATE Clockwise from 1946 film, “La Belle et La Bête,” in include something ugly or unex- top left: A cast of Jean Cocteau’s which tears morph into diamonds pected. A carousel horse prances hands in his salon; his cheetah- and disembodied hands lift a cande- alongside the mahogany table. cloaked study, including a high-relief labra. He collaborated with her, too, A gold-metal cast of Cocteau’s painting; the bed, angled for a view on Maison Cocteau, his home in the hands lopped at the wrist subverts of the gardens he designed. a fairly conventional tableau of pa- perbacks, colored pencils and a right corner covers one wall. But bronze lamp on a butler’s tray ta- the big draw here is the view of the Every room should ble. The juxtaposition strikes me as Cocteau-designed grounds. He an- include something ugly contemporary, albeit eerie. gled the canopy bed so the foot- Upstairs, in Cocteau’s small board didn’t obscure his sight line or unexpected. study, I found more pieces with a to the red-draped window. I recall flea-market air—an apothecary cab- that Castaing hung crimson cur- inet, a gothic-revival desk chair— tains in her country house to com- French medieval town of Milly-la- and the poetic detritus of a highly plement and highlight the green Forêt. And since it opened to the creative mind. Here, cheetah-print outdoors. In Cocteau’s home, too, public in 2010, I’ve wondered what cotton covers the ceiling as well as the purposefully framed views func- someone of relatively little means the walls. It is electrifying. You just tion as an element of the room. like Cocteau, a rarity among don’t see people doing this. ard carpeting to unify the office, find it draining to occupy, but Although mixing styles has been Castaing’s decorating clients, had Well, maybe one. New York inte- hall and bathroom of the space. But I think it’s a good example of work- the interior-design ideal for years managed to create with her. So rior designer Harry Heissman, an I’m an art and design adviser, and ing amid things that stimulate you. now, Cocteau’s décor is so personal while in Paris this spring, I made admirer of Cocteau and Castaing, my office must have neutral walls. Lots of them. and bizarre it seems to mix states the hour train ride to see. enveloped his own tiny living room However, the bold, green banana- Next door, his bedroom walls fea- of consciousness, too. Mr. Heissman From the front of the 17th-cen- in leopard-print. “It adds an aura of leaf pattern of Martinique paper, ture dentil molding and a chair rail, said he took another lesson away tury house, which Cocteau and inspiration and fantasy,” he said. “It created for the Beverly Hills Hotel, so no need for the all-surface pat- from the admitted opium addict’s then-lover Jean Marais bought in also masks the lack of a crown covers the walls and ceiling of my tern treatment. A chair made of an- home. “It helped me listen to a cli- 1947, I glimpsed the renaissance molding and enlarges the room.” office bathroom, and a matching imal horn sits unexpectedly amid ent’s collection, to mix an expensive turrets of the Château de la Bonde, I dream of creating such a room. curtain hides my shower. mostly simple furniture. A mural painting with a starfish,” he said. to which Cocteau’s cottage origi- I work in a quirkily laid out studio Many would regard Cocteau’s believed to be painted by Marais “Maison Cocteau has what many

nally belonged. Then I went inside in Greenwich Village. I’ve used leop- study as kitsch, and some would and featuring himself in the bottom interiors today lack—a soul.” FRANCIS HAMMOND FOR THE WALL STREET JOURNAL (INTERIORS); F. MARTIN RAMIN/THE WALL STREET JOURNAL, STYLING BY ANNE CARDENAS (FABRIC, COVERLET)

CHEZ BIZARRE // CHANNEL JEAN COCTEAU’S INSTINCTS BY MIXING HANDSOME CLASSICS WITH CURIOSITIES

Galant Quilted Coverlet, $675 for queen, Riley Lamp, usa.yvesdelorme.com $1,200, Arteriors, Diminutive Queen 800-338-2150 Anne Style Drop-Leaf Table, $3,200, thehighboy.com

Nose Bookends, $350 each (sold ABC Cochina Dark separately), Gray Pitcher, $95, creelandgow.com abchome.com

Cat’s Meow Fabric, Gothic Revival Side $68 per yard, Thibaut, Gloria’s Garden Rug, Chair from Relics 800-223-0704 Antiques, $2,000, 9 feet by 12 feet, 1stdibs.com $1,689, anthropologie.com For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com

‘A community is like a ship; everyone ought to be prepared to MANSION take the helm.’ —Henrik Ibsen

HOMES | MARKETS | PEOPLE | UPKEEP | VALUES | NEIGHBORHOODS | REDOS | SALES | FIXTURES | BROKERS

© 2016 Dow Jones & Company. All Rights Reserved. THE WALL STREET JOURNAL. Friday - Sunday, August 5 - 7, 2016 | W9 DEBORAH WHITLAW LLEWELLYN FOR THE WALL STREET JOURNAL (2) SENOIA, GA. DeeDee Harvey, above, and her husband, Peter, moved here from a nearby planned community. ‘Where we lived before—it was not walkable. You walked to a strip mall,’ she recalled. A Thoroughly Modern Mayberry Luxury developers are constructing quaint communities designed to recreate idyllic small towns of old; spraying surfaces with acid for that old-timey patina.

BY AMY GAMERMAN the entire development as the setting for its Al- exandria “safe zone,” a temporary haven from zombie armageddon. SUSAN AND EVAN STITT’S farmhouse in Se- “We’ve come home after being out at night noia, Ga., is nestled in a neighborhood of classic and there are bodies lying all over the road,” Southern homes with wraparound porches, gas said Ms. Stitt, 54, sipping lemonade on her front lamps and tree-lined sidewalks so picturesque, it porch and surveying the daylilies she has been might be a film set. forbidden to prune by the show’s producers, In fact, it is. The Stitts, who paid $575,000 for who favor post-apocalyptic landscaping. their four-bedroom home in 2013, live in the Gin Senoia’s Gin Property is among a growing Property, a new upscale development an hour number of traditional neighborhood develop- from Atlanta. The community so convincingly ments that are looking to an idealized past to captures the essence of a quaint small town that COLUMBUS, GA. The Old Town development is recreate village life. These freshly minted, old- producers of AMC’s “The Walking Dead” leased modeled after historic mill towns. PleaseturntopageW14

HOUSE LUXURY AT SEA FOR $55,000 PER WEEK OF THE DAY After a $750,000 renovation, the vintage wooden yacht Mariner III looks like home. wsj.com/houseoftheday

BY GABRIELLE PALUCH

AFTER A TOP-TO-BOTTOM renovation, a classic, prewar property in New York City is available for rent at upwards of $55,000 per week. Space

is tight, but it features 360- LUCAS FOX degree water views. Spain Built in 1926, the property A renovated, centuries- is a 122-foot wooden yacht, old Catalan farmhouse Mariner III, that recently un- derwent a $750,000 renova- tion by Mitchell Turnbough, a New York-based interior de- signer, and the boat’s owner and captain, Sean Kennedy. Restoring the yacht to its original grandeur has been a goal of Mr. Kennedy’s since his father spied it from a sea

plane in Palm Beach, Fla., and HALSTEAD CONNECTICUT bought it for over $1 million United States in 1979. Since then, the boat A Connecticut home, has had numerous celebrity fully remodeled encounters, most notably when Harrison Ford and his then-wife, Melissa Mathison, lived aboard the Mariner III off the coast of Belize during the filming of “The Mosquito Coast” in 1986. The recent refitting took four months and involved stripping away the ceiling and carpeting below deck to

expose the teak beams and SAUL GOODWIN planks. Many of the original Australia details, such as the brass DOROTHY HONG FOR THE WALL STREET JOURNAL A serpentine house with PleaseturntopageW11 RELAUNCHED Mariner III on the Hudson River with New York’s Freedom Tower in the background. feng shui principles For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com W10 | Friday - Sunday, August 5 - 7, 2016 THE WALL STREET JOURNAL.

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Mansion Global is independent of The Wall Street Journal and the Journal's Mansion section. For personal non-commercial use only. Do not edit or alter. Reproductions not permitted. To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com THE WALL STREET JOURNAL. Friday - Sunday, August 5 - 7, 2016 | W11 MANSION LUXURY AT SEA FOR $55,000 PER WEEK

ContinuedfrompageW9 portholes and mother-of-pearl light sconces, were polished to their original splendor. In the wheel- house, modern navigational and communications equipment sits near the yacht’s old radio equip- ment, compass, rudder indicator and original helm. Elsewhere, modern conveniences are cleverly concealed. Capt. Ken- nedy built a special writing desk that doubles as a cabinet to hide the air-conditioner, and the engine room doubles as a laundry room. There are no televisions or telephones aboard because “they didn’t have any of those things in the 1920s,” says Capt. Kennedy, though they do have wireless internet access. The boat was designed by naval architect Leslie Geary and built in Winslow, Wash., for Capt. James Griffiths, who named it “SueJa III” and traveled up and down the West Coast for pleasure. During World War II, it was drafted for service, patrolling the Aleutian Islands. With six cabins and three bath- rooms, the yacht is designed to sleep up to 10 people, with sepa- rate quarters for a crew of six or seven. Because of the cozy bed- rooms, there isn’t much storage space, and Capt. Kennedy advises not to bring hard suitcases. But “New Yorkers have told me the gal- ley is larger than their studio apartment,” the captain adds. The Kennedy family has been in the boat-engine business since 1912, when William Patrick Kennedy started what is now Kennedy Engine Co. in Biloxi, Miss. That’s where the current Capt. Kennedy and Mr. Turnbough, the designer, first met as children. Their grandparents worked together in a shipyard. Capt. Kennedy, who is 57 years WATERWORKS Mariner III, above, after a $750,000 renovation. Top left, the salon; top right, Capt. Sean Kennedy and old, first met and later married his his family: wife Francesca, daughter Morgan and son Finn. Above left from top to bottom, a view of the bridge deck, a wife, Francesca, aboard the Mari- walkway on the 122-foot yacht, and a wood-paneled dining room. Below left, the master stateroom, which has an en ner III. Their 17-year-old son, Finn, suite bathroom; below right, a dining area on deck. Bottom, the wheelhouse and a tender on the bridge deck. spends his summers working on the boat, polishing brass and do- ing other chores. Lucy Buffett, little sister of is- land-escapist musician Jimmy Buf- fett, spent time aboard Mariner III as the chef of the Harrison Ford charter. “Living and working aboard that boat was one of the peak experiences of my life,” says Ms. Buffett, 62, a restaurateur in Gulf Shores, Ala. She recalls when she and Ms. Mathison published a weekly newsletter, “The Mighty Mariner.” Total circulation: seven. “Every two weeks or so you had to get off the boat for a bit, but you really learned that you didn’t need much to live,” she says.

There are two 50-kilowatt gen- DOROTHY HONG FOR THE WALL STREET JOURNAL (10) erators on board and a desalina- tion machine. It takes 3½ days for seaboard and as far south as the docks in Sag Harbor, N.Y., as well as the boat to travel from New York Bahamas starts at $55,000. Prices Manhattan’s Chelsea Piers, where it to Palm Beach. can go up depending on fuel costs, sits between modern megayachts. Capt. Kennedy says fixing a price additional crew and other extras. In The wooden boat looks austere by on the vintage watercraft is diffi- addition to chartered trips, the comparison, but Mr. Turnbough cult. In the past, wooden yachts of yacht is available for private par- says this is what makes it so special this caliber have sold for upwards ties of up to 70 people, with prices to live on. “That true simplicity. of $5 million. A week aboard the starting at $10,000. That’s a type of luxury we have for- yacht for trips along the eastern For the summer, Mariner III gotten these days.”

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PRIVATE PROPERTIES | CANDACE TAYLOR ‘MIAMI VICE’ HOME HITS THE MARKET FOR $39 MILLION A $30 Million Bet in Las Vegas A Key Biscayne, Fla., home, sea level. featured in the 2006 movie An outdoor kitchen in a cov- “Miami Vice,” is listing for $39 ered pavilion by the pool comes million. in handy for family barbecues, Owners Aurelio and Berta the couple said. To reach the Fernandez say the movie’s cast front door, visitors cross a and crew, including stars Colin bridge over a 22,000-gallon koi Farrell and Jamie Foxx, spent pond that contains more than about a week filming at their 200 fish. five-bedroom house, which is The Fernandezes bought located on a peninsula jutting the land in 2001 for $3.6 mil- into Biscayne Bay and has lion, according to public re- about 480 feet of waterfront. cords. At the time Mr. Fernan- Since building their tropical- dez was retiring from his job style home on the southern tip as an executive at Broadcom, of tiny Mashta Island off Key the California-based semicon- Biscayne, “we get calls all the ductor company, and they time” from location scouts for wanted to return to South films, TV and commercials, Florida, where they’d both Ms. Fernandez said, although grown up. “most of the time we’ve turned While they originally them down because it’s too planned to renovate the exist- much upheaval.” ing house on the site, they de- For the “Miami Vice,” shoot cided instead to build a new for example, much of their fur- house from scratch, complet-

SHAPIRO & SHER GROUP (2) niture was removed, and the ing the work in 2004. A few family decamped to a hotel for years ago they built a new The late businessman David could finish another big project: story contemporary house is The rooftop garden, which the week. master bedroom on the sec- Jin is known for building Sky- his dream house in Las Vegas, the highest-priced home now measures about 5,000 square Measuring about 12,000 ond floor to take advantage of walk, a horseshoe-shaped now on the market for $30 listed in Las Vegas, according feet, contains a hot tub, an square feet, the house is com- the views, Mr. Fernandez said. bridge jutting into the Grand million. to listing agent Ivan Sher of outdoor kitchen with a custom posed of a series of pavilions They are selling because Canyon. Mr. Jin died before he Known as SkySide, the six- Berkshire Hathaway HomeSer- pizza oven and wok, and a re- connected by copper roofs. An they’re relocating to Vero vices Nevada Properties. tractable screen for al fresco infinity pool overlooks the bay Beach, Fla. The house was completed a movie-watching. and the private dock can ac- Jorge Uribe of One So- ADVERTISEMENT few months ago. Mr. Jin and Inside, the home has a gym, commodate a 100-foot yacht, theby’s International Realty his wife, Yvonne Tang, were in screening room and wine cellar, Mr. Fernandez said. Built to has the listing. A home on the Distinctive Properties the midst of building the house as well as an indoor basketball withstand storms, the house is opposite tip of Mashta Island when he died in 2013. Ms. court, hair salon and karaoke clad in Saturnia marble, and sold for $47 million in Decem- Tang finished construction and room. The 1.25-acre property the living areas and pool are ber, Mr. Uribe said, but that UNITED STATES moved in, but decided to sell also includes an eight-car garage elevated about 17 feet above was a larger piece of land. Distinctive because “it was really their vi- and air-conditioned, indoor-out-    sion as a couple,” Mr. Sher door dog kennels for pets. said. The couple bought the land in Properties. Located in the upscale com- 2006 for $1.95 million, according munity of Summerlin, the con- to public records. They spent temporary home spans about close to $30 million building the 24,000 square feet, with five house, Mr. Sher said. bedrooms and three elevators. Mr. Jin, a tour-bus operator,              Built around an outdoor swim- struck a deal in 2003 with the                     !" #  ming pool with a swim-up bar, Hualapai Indian tribe to build $ #%   &   & #& Select Residential Listings on Friday. the house has multiple water Skywalk. His tourism company '   (% &   $        %   )"   List Your Property Today. features; the driveway crosses brought busloads of visitors to  % (% (  (  (  over a man-made brook. the attraction. A legal battle   *     +  , (%  - .   & # " /& Call +44 (0) 207 572 2124 The master suite has three later ensued between Mr. Jin’s ' % & +  (% %   ,  0   &   1 &    floors—a lounge on the first company and the tribe. Mr. Jin    (% 0(  2 0% . level, the bedroom and bath on died at age 51 after a battle '2 %   $ 3 4%  3  &     !5   the second level, and a glass- with cancer. The lawsuit was      ( ( 6   3 %     78292 3 walled office with views of the settled in 2014 for an undis-

 , :  7!2 2 Las Vegas Strip on the third. closed amount. ONE SOTHEBY’S INTERNATIONAL REALTY     

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ContinuedfrompageW9 style communities feature leafy streets of historic-looking homes with porches and sidewalks, shared green spaces and shops. In a shift away from gated golf- course communities, with their cul de sacs of Tuscan villas and Nor- mandy castles, these developments are designed to create a strong sense of place, with neighbors, a coffee shop and the town dentist all within walking distance. Picture Andy Griffith’s Mayberry with high-speed internet. The concept is proving espe- cially popular south of the Mason- Dixon line. Old Town, a $45 million mixed-use development in Colum- bus, Ga., now completing its first phase of construction, is modeled after historic textile mill towns that once dotted the state—com- plete with a bright red mill build- ing on a pond (it houses a screen- ing room and soda fountain). Old Town’s town hall—designed like a white-clapboard chapel, with

antique longleaf pine floorboards KELLI BOYD FOR THE WALL STREET JOURNAL (4) and a steeple bell on a rope pull— presides over the town green, BEAUFORT, S.C. The coastal community of Habersham, set on a former plantation, was inspired by historic Low Country villages. Cindy and Richard Collins, pic- where residential lots are priced tured with their dog Bailey, spent $525,000 on their 2,820-square-foot board-and-batten home, above, in 2010. between $125,000 and $150,000. The houses, as well as the brick $299,000 to well over $1 million, and clapboard mercantile buildings according to Robert Turner, presi- on Old Town’s Main Street, draw dent of the Habersham Land Com- on architectural styles of 19th and pany, who said 750 of the commu- 20th-century Columbus buildings; nity’s 920 lots have been sold. a 159-page design guide for the Some towns are embracing his- 300-acre development specifies torically inspired development to everything from the shape of the revitalize their downtown areas. cornices to the dimensions of the That was the case with Senioa, an window sills. 1886 cotton town with streets of an- “We’re trying to bring back the tique houses. The town was by- DNA of towns and small cities that passed by major highways and de- has been lost—in some ways, it’s velopers, making it popular with storytelling,” said Andrew Cogar, filmmakers—“Fried Green Toma- president of the Historical Con- toes” and “Driving Miss Daisy” were cepts architectural firm, which de- filmed there. But its downtown was signed Old Town, as well as Se- nearly a ghost town. noia’s Gin Property. “If production companies Eight homeowners have moved needed a Main Street location, or

into Old Town since December, DEBORAH WHITLAW LLEWELLYN FORa THE WALL STREET JOURNALbig, (8) scary house, they would look with 11 new homes under con- to this town,” Scott Tigchelaar, a struction, according to Bruce SENOIA, GA. Susan and Evan Stitt, above, live in the Gin Property development, where AMC’s ‘The Walking Dead’ is developer who also heads Raleigh Jones, president of the Woodruff filmed. Their home is a 19th-century farmhouse that was moved and completely remodeled in 2012. Studios, a film-production studio. Development Company. “Commercially, it was dying. There “I really bought into the early were only five businesses left on vision of what it was going to Main Street.” be—a community where people are In 2007, Mr. Tigchelaar’s Senoia out on their porches interacting Enterprises—founded with his un- with one another,” said Todd King, cle Paul Lombardi, majority owner 43, who runs a software product of Raleigh Studios—bought up 22 management group. parcels on and around Main Street Mr. King and his wife, Julie Al- for about $4 million. The company mond, spent about $600,000 last spent another $25 million to cre- year to build a five-bedroom home ate period-style buildings, de- not far from the town green, signed by Historical Concepts. where their four children play They leveled the town’s tumble- Frisbee. Mr. King gets his hair cut down 1902 cotton gin, just off on Main Street: the hair salon is Main Street, to make way for the the only business there so far, al- Gin Property, a residential neigh- though a pediatrician, an eye doc- borhood with an important clause tor and a clothing boutique have in its covenant: The developers are leased space. Every home has a COLUMBUS, GA. Clockwise allowed to use it as a film location. front porch set close to the side- from above left: The Old Town Today, Main Street bustles with walk, and driveways and garages home of Todd King and Julie Al- boutiques, coffee shops, a locavore are hidden in back alleys. mond, built last year; Mr. King bistro called the Tomato House— “It was like going back to your and Ms. Almond in their kitchen; and occasional camera crews. Tour hometown after being gone for a mill-style building; the home of buses of “Walking Dead” fans— many years,” said Sylvette Walsh, Sylvette Walsh, built last year; called Walker Stalkers—arrive a 68-year-old Columbus native, Ms. Walsh on her front porch; the daily. who paid a little over $390,000 for town mail kiosk. Main Street’s restoration “was her white bungalow with a painted designed not only to make the pine tongue-and-groove porch. town vibrant again, but to do it in Mt Laurel, a woodsy village of a way that was true to its histori- 230 Arts and Crafts-style homes in cal look and feel—so we could con- Birmingham, Ala., was designed to tinue to use it as a back lot for the fit into a landscape of hills and na- studio,” said Mr. Tigchelaar. He tive forest. Grassy front lawns are points out a weathered brick mer- forbidden; residents scatter pine cantile building—completely new, straw for a more natural look. down to the greenish patina on its April Mraz, 43, who founded a pressed-metal awning. “We mobile-accessory company called sprayed acid on it,” he said. Tech Candy, moved from San Fran- Senoia’s Hollywood makeover is cisco to her first Mt Laurel home drawing homebuyers from At- in 2001, then built a three-bed- lanta’s suburbs. “Where we lived room home in 2014 for about before—it was not walkable. You $600,000. Her 9-year-old son bikes walked to a strip mall, and there’s three blocks to school, while Ms. nothing charming about that,” said Mraz commutes by golf cart to her DeeDee Harvey, 57, an interior de- office in the town center. She signer who moved from Peachtree holds morning meetings with her City, a nearby master-planned business partner at Jimbo’s Soda community. In 2012, Ms. Harvey Fountain. and her husband, Peter, an ortho- “They know my special and get pedic surgeon, bought a derelict it ready as we are walking in,” she 1867 house in Senoia’s historic dis- said. trict for $84,000, then spent about Sales prices for homes in Mt $770,000 to remodel it. Laurel over the past decade have Nearby at the Gin Property, averaged between $400,000 and houses sold for between $450,000 $450,000, according to Mt Laurel and $650,000 until 2014, when real-estate agent Della Pender. So “The Walking Dead” moved in. far this year, home sales have av- Now the neighborhood is walled eraged around $550,000, with top off by a 15-foot-high barricade, sales of $900,000 and $1.1 million. manned by 24-hour security Habersham, a 282-acre coastal guards. The series has options on community outside Beaufort, S.C., the Gin Property until 2021. Home- is set on a former plantation owners, who are bound by a non-

shaded by canopies of centuries- JEAN ALLSOPP FOR THEdisclosure WALL STREET JOURNAL (3) agreement, get financial old live oaks; its layout was in- compensation and a front seat to spired by historic Low Country vil- BIRMINGHAM, ALA. April Mraz’s home in Mt Laurel, top left, was built in 2014 for about $600,000; Ms. Mraz, Terry the apocalypse. lages, where irregular roads Evans and sons Martin and Oliver, above right; Jimbo’s Soda Fountain in town, above left. “Last year, there was a big zom- evolved from animal paths, accord- bie invasion,” said Tomato House ing to Tom Low, architect and di- Collins. She and her husband, Ms. Collins, 66, who chairs Hab- the locus for much of Habersham’s owner Tracy Brady, who spent rector of town planning. Richard, spent $525,000 on a ersham’s social committee, orga- social life. “You sit on the porch about $600,000 to build her Gin “Everybody gets lost—none of 2,820-square-foot board-and-bat- nized its recent Midsummer and people go by, and you say Property home in 2014, just before the streets are straight; they’re ten home opposite a park with a Munch and Mingle, which drew 80 ‘Come on up,’” Ms. Collins said. the wall went up. “We’d sit on our built around the trees,” said Cindy trim white gazebo in 2010. people to six different porches— Home prices range from porches and watch it with wine.”