****** WEDNESDAY, SEPTEMBER 5, 2018 ~ VOL. CCLXXII NO. 55 WSJ.com HHHH $4.00

DJIA 25952.48 g 12.34 0.05% NASDAQ 8091.25 g 0.2% STOXX 600 379.83 g 0.7% 10-YR. TREAS. g 14/32 , yield 2.902% OIL $69.87 À $0.07 GOLD $1,192.70 g $7.60 EURO $1.1583 YEN 111.45 What’s Kavanaugh Hearing Has Testy Start Democrats seek to News halt session until they see nominee’s papers Business&Finance from White House days

mazon became the BY JESS BRAVIN AND BYRON TAU Asecond U.S. company to reach $1 trillion in mar- WASHINGTON—Supreme ket value as its shares rose Court nominee Brett Ka- in intraday trading, re- vanaugh’s weeklong confirma- flecting the online retailer’s tion hearings began raucously transformation into a disrup- Tuesday, as Democrats sought tive force of commerce. B1 to bring the proceedings to a halt and protesters shouting Nike’s shares fell after from the rear were removed by the firm ventured into police, leading to 70 arrests. charged political territory Republicans, holding a one- by putting NFL quarter- vote majority on the Senate Ju- back-turned activist Kaep- diciary Committee, brushed ernick at the center of its aside complaints about access latest ad campaign. A1 to Judge Kavanaugh’s records as Theranos will formally an aide to former President dissolve, according to an George W. Bush and insinua- email to shareholders, and tions that his appointment will pay unsecured credi- could abet President Trump’s tors its remaining cash in grip on power. coming months. B1 Judge Kavanaugh, who spoke at day’s end, made no reference U.S. stocks fell ahead of to the seven hours of partisan a busy week of trade talks and debate. He touted his judicial economic data. The Dow shed impartiality at a session in 12.34 points to 25952.48. The which Democrats painted him S&P 500 declined 0.17%. B13 as a servant of social conserva- Carney signaled he was PleaseturntopageA4 willing to stay on as BOE

chief beyond his planned 2019 TASOS KATOPODIS/EPA/SHUTTERSTOCK Nominee sought minority departure date, offering some Brett Kavanaugh sat throughhours of contentious debate by the Senate Judiciary Committee before he spoke about his nomination Tuesday. judges...... A4 stability ahead of Brexit. A8 Most major auto mak- ers reported increases in U.S. sales in August, though Anthem Backlash Strikes Sheryl Sandberg vehicle demand was expected to cool for the rest of 2018. B2 Banking group ING has agreed to pay a record Eu- Nike, Hurting Share Price On the Hot Seat ropean fine of $899.8 million to settle a probe into money- BY ANDREW BEATON tests in 2016 when he began with criticism coming from laundering failings. B12 AND KHADEEJA SAFDAR kneeling on the field during President Trump and fans who For FacebookRisks the national anthem to call at- have labeled them unpatriotic. Citigroup Chief Finan- Nike Inc. ventured into tention to racial injustice and Now Nike faces questions on cial Officer Gerspach will re- charged political territory when social inequality. The player two fronts: whether its reinvig- tire next year, ending a nearly Executive must fix mistakes on data it put National Football League protests Mr. Kaepernick orated partnership with one of 10-year run in the job. B12 quarterback-turned activist Co- helped kick-start have been a the most controversial figures privacy and election interference Transocean has agreed lin Kaepernick at the center of contentious issue for the NFL, in sports will prove fruitful; to buy fellow offshore- its latest advertising campaign, and how this move will affect drilling contractor Ocean risking backlash to align itself its relationship with the NFL. Facebook Inc. Chief Oper- some of Facebook’s chal- Rig UDW in a transaction val- with a cause that has resonated ThrownforaLoss While Nike is one of the NFL’s ating Officer Sheryl Sandberg lenges of late, units under ued at about $2.7 billion. B5 with young consumers. Nike shares slipped Tuesday biggest partners with a re- was the architect of a busi- Ms. Sandberg’s control failed The Oregon-based shoe gi- after the company unveiled an ad ported billion-dollar deal that ness strategy that built the to respond to mounting signs World-Wide ant saw opposition to its deci- campaign featuring unsigned NFL was extended in the spring, the social network from a fast- of trouble, including evidence sion in the aftermath of the quarterback Colin Kaepernick. league is engaged in a high- growing but wobbly startup that Russia interfered in the announcement when many profile legal battle with Mr. into a global advertising jug- 2016 presidential election % The Justice Department shoppers began calling for 0 Kaepernick, who has filed a gernaut with a market value and the growing use of fake has launched a criminal boycotts of its products. Im- –0.5 grievance alleging that he has of more than half a trillion news to stir violence and probe into the FBI’s handling ages of people torching Nike Dow Jones been effectively blackballed dollars. harm overseas, according to of sexual-abuse allegations shoes and cutting swooshes –1.0 Industrial from signing with a team be- a number of current and for- against former U.S. gymnas- out of gear surfaced on Twit- Average cause of his political views. By Betsy Morris, mer employees. tics team doctor Nassar. A1 ter and other social-media –1.5 “Although the company’s Deepa Seetharaman Now Ms. Sandberg must sites, countered by expres- stand may go down well on its Robert McMillan fix the mistakes. Urged by his A hearing on Ka- –2.0 and sions of support for Nike and native West Coast, it will be board to be more proactive, vanaugh’s nomination to Mr. Kaepernick. Shares of the far less welcome in many But during five nightmar- Mr. Zuckerberg quietly asked the Supreme Court opened –2.5 company fell more than 3% other locations,” Neil Saun- ish days in March, she and her to lead the company’s ef- with Democrats seeking to Tuesday, though they are still –3.0 ders, managing director of her communications team forts to identify and prevent bring proceedings to a halt up about 27% for the year. GlobalData Retail, wrote in a couldn’t figure out how to future blowups on the plat- and police removing several –3.5 Nike The reaction laid bare the research note, adding that the address the public’s mount- form. The new job, insiders protesters from the room. A1 perils of Nike’s decision to fea- 10 a.m. noon 2 p.m. 4 brand “cannot afford to make ing outrage over allegations say, is at least as challenging The U.S. and Canada ture Mr. Kaepernick, who Source: SIX bad decisions” in a highly that political firm Cambridge as the company’s transition will resume efforts on emerged as the face of pro- THE WALL STREET JOURNAL. PleaseturntopageA8 Analytica had improperly ac- to mobile several years ago, Wednesday to resolve is- cessed data on tens of mil- which was late and rocky. sues holding up a renego- lions of Facebook users. Ms. Sandberg’s role is likely tiation of Nafta. A2 While anger grew, she and PleaseturntopageA10 Chief Executive Mark Zucker- American factory ac- U.S. Investigates FBI Response berg remained silent. tivity in August expanded Ms. Sandberg has told at the strongest pace in people the delayed response Theranos more than 14 years. A2 To Gymnasts’ Sex-Abuse Claims was one of the company’s Federal disaster re- biggest mistakes ever. But To Shut Down sponders were over- BY REBECCA DAVIS O’BRIEN review opened earlier this sentence in federal prison. He not the only one. While the Blood-testing firm accused whelmed in 2017 by hurri- year into the bureau’s han- hasn’t faced charges on the technology platform designed of defrauding investors will canes in close succession The Justice Department is dling of the Nassar allega- gymnasts’ allegations. and overseen by Mr. Zucker- formally dissolve...... B1 and wildfires in California, a investigating how the FBI tions. The gymnasts’ com- The Justice Department in- berg is also to blame for government report said. A3 handled sexual-abuse allega- plaints languished for at least vestigation, which hasn’t been tions against former U.S. nine months before an FBI of- previously reported, comes as Chicago Mayor Rahm gymnastics national team fice opened a formal investi- USA Gymnastics continues to Emanuel, a Democrat, said he doctor Larry Nassar, amid gation. reel from the Nassar scandal wouldn’t seek a third term. A3 claims agents failed to re- Nassar pleaded guilty last and from what critics have Salesforce. Arizona Gov. Ducey spond to complaints from year to federal child-pornog- called its sluggish response to chose former Sen. Jon Kyl gymnasts in 2015, people fa- raphy charges and state sex- sexual-abuse allegations. The to fill the Senate seat miliar with the matter said. ual-abuse charges in Michi- embattled organization said opened by McCain’s death. A4 The move by the depart- gan, none of which stemmed on Tuesday its chief execu- #1 CRM. ment’s Inspector General’s of- from national-team gymnasts’ tive, Kerry Perry, resigned af- Russian warplanes fice follows an internal Fed- 2015 allegations. In January, ter just nine months on the struck Syria’s Idlib prov- eral Bureau of Investigation he was sentenced to a 60-year PleaseturntopageA2 Ranked #1 for CRM Applications based on ince ahead of an expected IDC 2017 Market Share Revenue Worldwide. regime offensive that the U.S. has said could trigger 19.6% a humanitarian disaster. A6 Your Dinner Is Served—in a Glass Shoe Trump and Moon iii agreed to meet in New York over their goal of de- Chefs plate food on anything but plates; breakfast in a shovel nuclearizing North Korea. A7 7.1% Japan’s Kansai airport BY MARC VARTABEDIAN hand. “It’s challenging the no- was closed indefinitely by tion of what a dinner should 6.5% typhoon damage. A7 When Amanda Kennedy be,” says Anna Gaidaenko, the 4.0% spent a night out in July at the hotel’s marketing manager and CONTENTS Opinion...... A15-17 Sugar Club restaurant in Auck- spokeswoman for the restau- Banking & Finance.... B12 Property Report B6-7 3.2% Business News B3,5,8 Sports...... A14 land, New Zealand, the waiter rants. Crossword...... A14 Technology...... B4 brought out a delicate oyster The Tickethall restaurant on Heard on Street. B14 U.S. News...... A2-4 and fish-egg amuse-bouche. England’s Isle of Man serves its 2013 2014 2015 2016 2017 Life & Arts...... A11-13 Weather...... A14 Served on a bed of rocks in “fireman’s breakfast” in a Markets...... B13-14 World News...... A6-9 Source: IDC, Worldwide Semiannual abowl. Soup’s on! shovel. Chefs elsewhere have of- Software Tracker, April 2018. “It looked like landscaping,” fered food on ashtrays, stumps > says Ms. Kennedy, a comedian things that aren’t plates. and tea pots. The outlandish in the city. When she asked Fried croquettes come in a presentations make for social- why it wasn’t on a plate, the glass shoe at Bazaar in the media-friendly postings. waiter said “I dunno.” Simple Luxurious Stays Hotel Restaurants see non-plate salesforce.com/number1CRM Some other diners are like- in Beverly Hills, Calif. Another plating as a way to attract CRM Applications market includes the following IDC-defined functional markets: Sales, Customer Service, Contact s 2018 Dow Jones & Company, Inc. Center, and Marketing Applications. © 2018 salesforce.com, inc. All rights reserved. Salesforce.com is a registered All Rights Reserved wise befuddled as a fringe of restaurant in the hotel serves customers with a creative din- trademark of salesforce.com, inc., as are other names and marks. restaurateurs plate food on caviar on wood shaped like a PleaseturntopageA10 A2 | Wednesday, September 5, 2018 ****** THE WALL STREET JOURNAL. U.S. NEWS U.S., Canada Set to Resume Nafta Talks BY PAUL VIEIRA President Trump, who has for Canadians, and that’s what is when, according to U.S. law, which allows for duty-free states to challenge trade penal- AND WILLIAM MAULDIN long derided Nafta as a “disas- we are going to stay with.” the Trump administration trade that fuels the North ties imposed by the others. Mr. ter,” reiterated over the Labor The White House has for- would need to make public fi- American auto industry and Lighthizer has proposed elimi- The U.S. and Canada will re- Day Weekend that if the U.S. mally notified Congress of an nal text for a trade pact that other sectors. Mexico has also nating the system, contained sume efforts on Wednesday to and Canada fail to reach an intent to sign a new version of he could sign by Nov. 30, when expressed a preference for in Nafta’s Chapter 19, and Mex- resolve issues holding up a re- agreement, his administration Nafta this autumn with Mex- Mexico’s leader leaves office. Canada to remain but has sig- ico has agreed to that. But negotiation of the North Amer- could move forward on a deal ico—saying Canada was free to “We agreed to something naled willingness to move for- Canada remains unwilling to ican Free Trade Agreement. that excludes Canada. He also join, “if willing.” The U.S. ad- we think the Canadians should ward without it. scrap the mechanism. Canadian Foreign Minister warned Congress not to inter- ministration is widely expected sign up with, and so we’re very The stakes are high, as the “We need a dispute-resolu- Chrystia Freeland is set to fere. to start the process of with- very confident that the talks Trump administration has tion mechanism like Chapter meet U.S. Trade Representative Canadian Prime Minister drawing from the old treaty are going to go well this week sought to bring maximum 19, and we will hold firm on Robert Lighthizer in Washing- Justin Trudeau said Monday while preparing for congressio- and that we’re going to have pressure to bear on its closest that,” Mr. Trudeau said. ton after the U.S. and Mexico his negotiating team is ready nal ratification of the new one. Canada on board relatively neighbors, even imposing steel Trump administration offi- last week agreed to terms on to work on a deal that benefits It is unclear what the new soon,” said Kevin Hassett, and aluminum tariffs on Can- cials have complained the dis- their portion of the trilateral all parties. “There are a num- timetable is for reaching an chairman of the White House ada and Mexico on national- pute process erodes U.S. sover- accord. The focus this week ber of things that we abso- accord allowing Canada to Council of Economic Advisers, security grounds. eignty, saying the independent will be on Ottawa and Wash- lutely must see in a renegoti- join. After the two sides failed on Fox Business Network. As talks with Canada re- panels charged with adjudicat- ington bridging differences to ated Nafta,” he said at a media to reach an agreement last Many U.S. lawmakers, busi- sume, the biggest sticking ing the cases have primarily keep all three countries signa- event in a suburb of Vancouver, week, people familiar with the ness groups and labor leaders point is Canada’s insistence on been used to overturn tariffs tories to an update of the British Columbia. “No Nafta is process said the new deadline have insisted that Canada re- retaining a dispute-resolution imposed by the U.S. on Cana- quarter-century-old treaty. better than a bad Nafta deal could extend to Sept. 30. That main part of a three-way deal, system that allows member dian and Mexican products. Tropical Storm Gordon Makes Landfall on Gulf Coast Factories Roared Ahead in August

BY SHARON NUNN 2018, some analysts said there were signs of overheating in WASHINGTON—American the manufacturing industry. factory activity in August ex- “The last time we have seen panded at the strongest pace something akin to the current in more than 14 years, despite run late in an expansion oc- rising tensions with some of curred in” the late 1980s, the U.S.’s largest trade part- when the Federal Reserve had ners. to raise the fed-funds target The Institute for Supply rate to almost 10% to tamp Management said Tuesday down inflation, according to that its manufacturing index Stephen Stanley, chief econo- rose to 61.3 in August, the mist at Amherst Pierpont Se- highest level since May 2004, curities. “If you want to con- from 58.1 in July. Sales of fac- clude from this quick history tory-made products, or new lesson that the Fed is cur- orders, output and employ- rently too easy and in the pro- ment all grew at a faster pace in August. Tuesday’s data surprised analysts who had expected a ISM’s manufacturing slowdown in the industry in index climbed to the light of rising trade tensions and a typically weaker month highest level since for factory activity. Econo- May 2004.

AMANDA MCCOY/THE SUN HERALD/ASSOCIATED PRESS mists surveyed by The Wall READY: A family in Long Beach, Miss., filled sandbags hours before Gordon came ashore late Tuesday near the border with Alabama. Street Journal had expected a 57.5 reading for August. “Despite concerns over U.S. cess of making a policy mis- U.S. WATCH protectionist policies, manu- take, I would not object.” facturing sentiment remains Many private economists on a solid footing, supported expect the Fed will raise inter- FCC local delays and high fees under seeking to block Mr. Pearce’s re- maneuvering to crack down on in large part by firm domestic est rates two more times this current rules. turn. anticipated protests over the demand,” said Pooja Sriram, year, once in September and Regulators Seek to —John D. McKinnon “It’s no secret that Pearce Keystone XL oil pipeline. U.S. economist at Barclays. again in December. Speed 5G Networks was bad for American busi- Attorneys for the American The U.S. and Europe, China Despite the headline growth NLRB nesses and their employees,” Civil Liberties Union and its and other countries are in the in factory activity, an underly- Federal regulators will vote in Matthew Haller, senior vice pres- Montana affiliate filed the law- midst of trade battles stem- ing gauge of new export or- three weeks on a plan to accel- Business Groups Seek ident for government relations suit in U.S. District Court in Mis- ming from steel and aluminum ders for primary metals, trans- erate next-generation 5G wire- To Block Trump Pick for the International Franchise soula against the Defense, tariffs the Trump administra- portation equipment and less networks around the U.S. by Association, said Tuesday. Homeland Security, Interior and tion enacted this year. machinery declined in August, overriding some local siting rules Business groups are seeking Mr. Haller said he expects Justice departments. Mohamed A. El-Erian, chief with machinery last declining that could hold up deployment, to torpedo President Trump’s many Senate Republicans to op- The attorneys asked the economic adviser at Allianz, at the beginning of 2017. Federal Communications Com- latest nomination to the Na- pose the nomination. court to order the release of all tweeted, “In addition to high- “We’re a significant ex- mission head Brendan Carr said. tional Labor Relations Board, the —Eric Morath documents about cooperation lighting the strength of the porter of railcars, airplanes, The plan is expected to win body that referees union-man- between federal, state and local U.S. #economy, this also points automobiles….Machinery is approval from the FCC at a agement disputes. MONTANA law enforcement and private se- to the more general theme of our number 6 industry sector,” meeting in late September. Mr. Trump renominated Mark curity firms over the disputed divergence in advanced coun- said Tim Fiore, who oversees The plan is aimed at boosting Gaston Pearce, a Democrat with ACLU Sues U.S. Over pipeline. They cited confronta- tries’ economic performance the ISM survey of factory pur- deployment of small cellular close ties to labor unions, to the Oil Pipeline Protests tions between law enforcement and policies.” chasing and supply managers. transmitters, backpack-sized de- board last week, a day after the and protesters that turned vio- Though many economists “If export markets are closed vices that will be a key feature ex-chairman first tapped by Pres- Civil liberties advocates sued lent during construction of the hailed Tuesday’s report as a off to us, orders will go down, of 5G infrastructure. Siting of ident Obama saw his term expire. the U.S. government, alleging law Dakota Access Pipeline. sign of robust growth continu- [then] exports and produc- such devices can be subjected to Some business lobbyists are enforcement agencies have been —Associated Press ing into the second half of tion.”

CORRECTIONS January, couldn’t be reached for comment on Tuesday. Ear- AMPLIFICATIONS U.S. Looks lier this year, he told the New York Times that the Nassar case was complicated because Hong Kong’s Hang Seng In- At Gymnast of the inherent sensitivity of dex fell 2.4% in August. A Mar- child sexual-abuse allegations kets News article Saturday and because “there was a vig- about Friday’s market activity Allegations orous debate about whether” ended midsentence, omitting Nassar’s techniques consti- the Hang Seng’s monthly move. ContinuedfromPageOne tuted “a legitimate medical job. procedure,” as Nassar himself The chocolate brand Ghi- The FBI’s role in the Nas- had claimed. rardelli was misspelled as Ghi- sar scandal is also under The Wall Street Journal in radelli in a Page One article scrutiny by Congress, includ- February 2017 first reported Tuesday about taffy. ing the Senate Judiciary and the FBI’s delay in investigat- Senate Commerce commit- ing the case and earlier this Readers can alert The Wall Street tees, which in July wrote a year reported that the FBI’s Journal to any errors in news articles letter to the FBI’s director, by emailing [email protected] or internal inspection division by calling 888-410-2667. Christopher Wray, seeking in- was looking into its handling formation and materials re- of the matter. THE WALL STREET JOURNAL lated to the FBI’s handling of At the time, federal law- (USPS 664-880) (Eastern Edition ISSN 0099- the matter. enforcement officials declined 9660) (Central Edition ISSN 1092-0935) In July, Sen. Chuck Grass- to provide an official explana- (Western Edition ISSN 0193-2241) Editorial and publication headquarters: ley (R., Iowa) said in a hear- FROM TOP: DAVIDtion J. PHILLIP/ASSOCIATED PRESS; ALEX WONG/GETTY IMAGES for the bureau’s apparent 1211 Avenue of the Americas, New York, N.Y. 10036 ing on sexual abuse in Olym- A gym at Karolyi Ranch in Texas, which was used for USA Gymnastics training. USA Gymnastics said inaction, telling the Journal Published daily except Sundays and general legal pic sports that his office had Tuesday that its chief executive, Kerry Perry, below, resigned after nine months on the job. that neither office ever ob- holidays. Periodicals postage paid at New York, N.Y., and other mailing offices. been advised by the FBI that tained enough information to Postmaster: the investigation had been re- scrutinizing how multiple FBI Penny and officials at FBI prove a federal crime. Send address changes to The Wall Street Journal, ferred to the Inspector Gen- field offices acted on—or field offices in Indianapolis But behind the scenes, sev- 200 Burnett Rd., Chicopee, MA 01020. All Advertising published in The Wall Street Journal eral’s office. failed to act on—gymnasts’ and Los Angeles, the people eral of the officials said at the is subject to the applicable rate card, copies of In their probe of the bu- claims against Nassar, start- familiar with the matter said. time and since, the FBI was which are available from the Advertising Services Department, Dow Jones & Co. Inc., 1211 Avenue of reau’s handling of the matter, ing in late July 2015, when In particular, they have trying to determine why its the Americas, New York, N.Y. 10036. The Journal Justice Department investiga- USA Gymnastics leadership scrutinized Mr. Penny’s com- own agents didn't investigate reserves the right not to accept an advertiser’s order. Only publication of an advertisement shall tors have conducted inter- reported the athletes’ con- munications with the former the allegations for so long. constitute final acceptance of the advertiser’s order. views with several people, in- cerns to the FBI’s Indianapo- special agent in charge of the In June 2015, the coach of Letters to the Editor: Fax: 212-416-2891; email: [email protected] cluding athletes and lis field office. Indianapolis office, W. Jay national-team gymnast Mag- gymnastics officials, two of The FBI didn’t open a for- Abbott, the people said. gie Nichols told USA Gymnas- NEED ASSISTANCE WITH the people said. The investi- mal investigation into Nassar By the fall of 2015, the In- tics’ leadership that the gym- YOUR SUBSCRIPTION? gation could lead to disciplin- until the spring of 2016, in dianapolis office had referred nast had concerns about By web: customercenter.wsj.com; ary action and criminal Los Angeles. the matter to the FBI office in Nassar’s medical care. By email: [email protected] By phone: 1-800-JOURNAL (1-800-568-7625); charges. In particular, investigators the phone—rather than in Detroit, where Nassar lived, Five weeks later, after a Or by live chat at wsj.com/livechat A spokesman for the In- are interested in the India- person—to discuss her allega- but neither field office hired investigator uncovered spector General’s office de- napolis FBI office’s 2015 deal- tions of abuse by Nassar. That opened a formal investigation what she called likely crimi- REPRINTS & LICENSING clined to comment. The FBI ings with the gymnasts, a conversation didn’t lead to an into Nassar, and no further nal sexual abuse, Mr. Penny By email: [email protected] has previously said it was person familiar with the mat- investigation. investigative steps were reported the matter to the By phone: 1-800-843-0008 “reviewing our role in the in- ter said. Around September Investigators are also look- taken. At least eight months FBI in Indianapolis, where GOT A TIP FOR US? vestigation” of Nassar and de- 2015, an agent in the field of- ing into correspondence be- later, FBI agents in Los Ange- USA Gymnastics is based. SUBMIT IT AT WSJ.COM/TIPS clined to comment further. fice spoke with former Olym- tween former USA Gymnas- les opened an investigation. —Rachel Bachman The Justice Department is pian McKayla Maroney over tics Chief Executive Steve Mr. Abbott, who retired in contributed to this article. THE WALL STREET JOURNAL. ****** Wednesday, September 5, 2018 | A3 U.S. NEWS Emanuel Won’t Seek Re-Election

BY DOUGLAS BELKIN AND SHAYNDI RAICE Crime Story Murders in Chicago have CHICAGO—Rahm Emanuel dropped after peaking in 2016 said he won’t seek re-election as mayor of Chicago after two Total Through Aug. 31 terms marked by downtown 800 development but also a wave of gun violence that returned the city’s murder rate to 600 1990s levels. The announcement was an abrupt reversal for Mr. Eman- 400 uel, who raised a substantial campaign war chest and for months had been laying the 200 groundwork to run for a third term. But slipping popularity left him facing headwinds for 0 re-election early next year, with a crowded field of opponents. 2011 ’15 ’18

“This has been the job of a Source: Chicago Police Department STACEY WESCOTT/CHICAGO TRIBUNE/ASSOCIATED PRESS lifetime, but it is not a job for THE WALL STREET JOURNAL. Chicago Mayor Rahm Emanuel, appearing with his wife, Amy Rule, announced on Tuesday that he won’t run for a third term. a lifetime,” Mr. Emanuel, 58 years old, said in a statement raise the money to rebuild the group. “I think by most objec- “The story of population Mr. Emanuel seemed poised cago’s number of murders sur- Tuesday. city’s riverfront and two of its tive standards, the city is bet- change [in Chicago] is a story to weather those divisions un- passed 700 for the first time Mr. Emanuel, a former White train lines. ter off than when he took of black change, which tells til 2015, when the city was since the crack cocaine wars in House chief of staff and Demo- Between 2011 and 2016, the over.” you a lot about Chicago,” said forced by a court to release the 1990s, even as most other cratic congressman, took over city added 300,000 jobs and But the building boom isn’t Rob Paral, a demographer at video of a Chicago police offi- big U.S. cities enjoy two-de- in 2011 from a predecessor of dozens of corporate headquar- evenly spread. Rather, it is the Chicago Council on Global cer fatally shooting a black cade lows in violent crime. The more than two decades, Demo- ters including Conagra Brands, concentrated in the city’s Affairs. “We have this healthy teenager 16 times. The video murder rate has subsided in crat Richard M. Daley, who had McDonald’s and Archer Daniels downtown area known as the and wealthy central city, and sparked outrage and allega- 2017 and 2018. papered over the city’s finan- Midland. Today, dozens of Loop and in its prosperous— then especially African-Ameri- tions of a police coverup, Despite more than $10 mil- cial problems and left four of cranes dot the skyline as de- and mostly white—North Side. can neighborhoods have not which led to a federal civil- lion raised by Mr. Emanuel’s the main pensions underfunded velopers race to add more That disparity has fueled polit- joined in the party, have not rights investigation of the po- campaign this year, the num- by nearly $30 billion. Mr. downtown office space and ical tensions as well as an out- joined in the prosperity.” lice department. ber of his opponents for next Emanuel addressed those prob- high-rise housing. migration from the largely In 2013, in an effort to bal- Mr. Emanuel fired his police year’s election grew to 12. One lems by raising property taxes “He promoted an aura of black South and West Sides. ance a schools budget, Mr. chief, Garry McCarthy, and in- of the first to throw his hat and extricating the city from a economic growth that was re- The population of African- Emanuel closed 50 under-en- stituted the use of body cam- into the ring was Mr. McCar- series of derivative deals linked ally significant,” said Laurence American residents in Chicago rolled schools, enraging neigh- eras on officers while also thy, the ex-police chief. to the city’s bond debt. With Msall, director of the Civic decreased by nearly 80,000 be- borhoods whose residents equipping them with Tasers. —Heather Gillers some deft political and fiscal Federation, a business-spon- tween 2010 and 2016, accord- joined teachers unions in pro- In 2016, fueled by a surge in and Joe Barrett footwork he was also able to sored government watchdog ing to Census Bureau data. testing the closures. gang-related gun violence, Chi- contributed to this article. Colleges Offer Price Matches on Tuition Activist BY MELISSA KORN thorpe’s net-price figure so if enrollment from those states Defeats Escalating the battle for continues to dominate, the students, some private col- school’s budget could take a leges are offering to match hit. If more new students Incumbent public in-state tuition. come from New Hampshire, Oglethorpe University near where flagship tuition and Atlanta will match the tuition fees run $18,499, it could be a Democrat of any state flagship univer- boon. BY REID J. EPSTEIN sity for high-achieving stu- Enrollment gains that fol- dents. Robert Morris Univer- low big announcements In the latest upset among sity near Pittsburgh said last aren’t always sustained, said Democrats, Ayanna Pressley, a week it would charge Pennsyl- Nathan Mueller, a principal at Boston city councilor who ran vania residents the same EAB, a consulting firm that as a progressive activist, beat price as local public universi- helps schools assess enroll- 10-term Democratic Rep. Mi- ties, and give them a $3,000 ment strategy. “The interest chael Capuano on Tuesday in a scholarship to boot. seems to cool” once schools Massachusetts House primary. The discounts aren’t lim- see analyses about the pro- Ms. Pressley becomes the ited to private schools. Public grams’ potential success, he second Democrat to defeat an universities in Michigan, said. incumbent House member in a South Dakota and Nebraska The University of Nebraska 2018 primary. She rode energy now let students from other at Kearney started offering from the party’s resistance to

states pay as if they were lo- DUSTIN CHAMBERS FOR THE WALL STREET JOURNAL in-state tuition to students President Trump to topple Mr. cals. Public schools regularly Oglethorpe University is matching the tuition of any state flagship university for high achievers. from Colorado and Kansas Capuano, who Federal Election charge out-of-state students this year, trying to offset a Commission records show two or three times as much as in-state tuition at flagship steady 1% to 2% annual un- raised about twice as much locals, or even more. public universities in the Deal or No Deal dergraduate enrollment de- money as she did. Some colleges, facing dwin- home states of students with Private colleges’ list prices have soared, but net costs for tuition, fees, cline since 2012. Ms. Pressley’s victory in- dling populations of local a GPA of at least 3.5 and mini- As a high-school senior in stantly thrusts her into the room and board aren’t much higher than list prices for public schools. high-school graduates, are mum 1250 SAT or 26 ACT Denver, Brandon Williams fig- ranks of the new Democratic motivated to attract students score. $ 50,000 List prices, private, nonprofit ured he would stay in state from across the country. Oth- President Lawrence Schall unless he got a scholarship. ers are battling the percep- said the aim was to dispel Net costs, private, nonprofit But when he heard about the Ayanna tion they aren’t affordable or myths about the affordability 40,000 List prices, public, in-state Nebraska school’s price- Pressley beat looking to boost their aca- of a private-school education Net costs, public, in-state match program, he jumped at Rep. Michael demic profiles. Schools are and appeal to more high- the opportunity. Capuano of getting the word out via bill- achieving students. Ogle- 30,000 The 18-year-old, familiar Massachusetts boards and social-media cam- thorpe’s published tuition and with the school through its in a primary paigns. fees are $39,830 this year, but basketball team, recently ar- on Tuesday. The price-match guarantee, scholarship programs mean 20,000 rived in Kearney to start his a sales tactic borrowed from students generally pay far freshman year. retailers, illustrates how less. The average net price for “Being able to broaden my stars of 2018, alongside New 10,000 fiercely competitive higher tuition and fees is $13,700. horizon without staying in- York’s Alexandria Ocasio-Cor- education has become. It also “It is about growing the state caught my eye,” he said. tez, the only other Democrat adds to the confusion over top of the class,” Dr. Schall 0 Last year, Southern Illinois to defeat an incumbent mem- how much college really costs, said. The school now enrolls University Edwardsville, near ber of Congress this year, and especially at private schools. about 25% of all students it 1990 ’95 2000 ’05 ’10 ’15 St. Louis, extended in-state Andrew Gillum, who last week Although the pricing cam- admits, but its yield hovers Note: Years marked represent beginning of academic year tuition to all domestic under- won an upset victory to be- paigns suggest major savings, between 10% and 15% for Source: College Board THE WALL STREET JOURNAL. graduates. Since offering the come the Democratic nominee already generous financial-aid those in the top academic rate to Missouri students in for governor of Florida. packages mean the net price ranks. across the board. Most of its Listed in-state tuition and 2014, enrollment from that Like Ms. Ocasio-Cortez and for many students won’t Oglethorpe, whose overall students come from Georgia, fees at the University of state nearly doubled, to 1,464 Mr. Gillum, Ms. Pressley is a change by much. tuition revenue already has Tennessee and Florida; the Georgia and University of last fall; in the same period, minority candidate who was Beginning in the fall of been rising, is also trying to current first-year class hails Florida—$11,830 and $6,380, enrollment by Illinois resi- lifted by the progressive en- 2019, Oglethorpe will match increase enrollment faster, from 17 states. respectively—are below Ogle- dents fell by 868. ergy powering the Democratic Party in the Trump era. With no Republican or mi- nor-party candidates on the district’s general election bal- Hurricanes, Wildfires Taxed FEMA Response in 2017 lot, she will enter Congress in January as the first African- BY ERIN AILWORTH staffed when Harvey hit,” said was the island’s lack of experi- logistical complications in the issues such as the handling of American House member from Chris Currie, director of emer- ence with storms as powerful support of, and response to, disaster debris and the restora- Massachusetts. The devastation of hurri- gency-management issues at as Maria, the strongest hurri- the island territories.” tion of power in Puerto Rico. Ms. Pressley, 44 years old, canes Harvey, Irma and Maria, the Government Accountability cane to make landfall there In a letter appended to the Harvey inundated parts of said the congressional district, followed by catastrophic wild- Office, which wrote Tuesday’s since a Category 5 recorded in GAO report, the Department of the greater Houston area with where racial minorities make fires in California, over- report. “By the time Maria hit 1928, the GAO report said. The Homeland Security acknowl- as much as 51 inches of rain, up 58% of residents, deserved whelmed federal disaster re- Puerto Rico, they were down to island’s distance from the U.S. edged the challenges of re- causing record-setting floods a candidate who better re- sponders in 2017, according to the bottom of the barrel.” mainland also didn’t help. sponding to so many disasters in August 2017. Irma swept flected the population of the a government report released Workers were most chal- Those factors created logis- in quick succession. “These through the Caribbean and district. Tuesday. lenged in Puerto Rico. The U.S. tical issues for aid workers. As events came at a time when Florida next, followed by Ma- Mr. Capuano, 66 years old, The unprecedented sequence territory’s stock of emergency of April, FEMA had marked FEMA was already supporting ria, which hit Puerto Rico on was an early target for pro- of storms and fires forced Fed- supplies had already been de- $12 billion in disaster aid re- 692 federally declared disasters Sept. 20. gressive activists looking to eral Emergency Management pleted in responding to Irma lated to Maria. The report, a and tested the nation’s ability The GAO report follows an defeat incumbent Democrats Agency staff to jump from one there and in the U.S. Virgin Is- FEMA representative said, to respond and recover from academic study commissioned from safe congressional seats. disaster to another and in some lands when Maria hit, taking “captures the complexity of multiple concurrent disasters,” by Puerto Rico’s governor and He hadn’t faced a serious cases use uncertified workers out cellphone towers and de- the disasters” while also not- an official wrote. released last week that put the Democratic or Republican to fill key roles. stroying the power grid. ing “concerns about work- Mr. Currie said the GAO has death toll on the island from challenger since he first won “They were 30% under- Compounding the difficulty force, housing programs and audits pending that will analyze Maria at nearly 3,000. election in 1998. A4 | Wednesday, September 5, 2018 PWLC101112HTGKBFAM123456789OIXX **** THE WALL STREET JOURNAL. U.S. NEWS CAMPAIGNWIRE Former Senator to Fill McCain Seat MISSOURI BY SIOBHAN HUGHES end of this congressional ses- lican whip, the No. 2 spot in will be an extraordinary Sena- ditionally Republican. Both Poll Shows Senate sion is because when I left the the chamber’s GOP leader- tor representing an extraordi- wings had pushed Mr. Ducey Race a Dead Heat Arizona Gov. Doug Ducey Senate almost six years ago I ship. Currently working at nary state,” Mr. Trump said on to select a successor who chose former Sen. Jon Kyl to had no intention of returning,” law firm Covington & Burling Twitter. Mr. McConnell called would reflect their own per- Sen. Claire McCaskill (D., Mo.) fill the Senate seat that Mr. Kyl said. “I needed to be LLP, he had earlier served in Mr. Kyl an “excellent choice.” spective. is locked in a dead heat with her opened up with the death of with my family,” he said, add- the U.S. House. In the Senate, A big order of business for “This is a very high-quality, GOP challenger in one of the Sen. John McCain, though it ing that “in that spirit I am Senate Republicans for the re- consensus pick as Gov. Ducey marquee Senate races of 2018, wasn’t clear how long the Re- willing to serve certainly mainder of the year is con- tries to appease the Trump according to a new NBC News/ publican would remain in the through the end of this ses- How long firming Supreme Court pick and McCain factions of the Ar- Marist poll. Ms. McCaskill and position. sion at least in order to make former Sen. Brett Kavanaugh, whose nomi- izona GOP,” said Dan Eberhart, Josh Hawley, the Missouri attor- “I am picking him because sure that the business that Jon Kyl will nation Mr. Kyl is helping steer a Republican donor and chief ney general, each poll with 47% he is the best possible person,” is…ongoing is taken care of.” remain in the through the chamber. When executive of oil-services com- support, though she has a 4-per- Mr. Ducey said, adding that The current session ends post is Mr. Kyl is sworn in, Republi- pany Canary LLC. centage-point lead when the “no one in the state of Arizona when the Senate adjourns for unknown. cans will have a narrow 51-49 Mr. Kyl built a record that field is expanded to include Lib- has the stature of Jon Kyl.” the year, meaning the seat majority. The party also wants many in the state said served ertarian and Green Party candi- But in selecting Mr. Kyl, the could be open again in a few to ensure the government is Arizona’s priorities. He also dates. Ms. McCaskill is one of 10 GOP governor also chose a months. Mr. Ducey, who faces funded beyond September, played a role in immigration Senate Democrats running in man who has agreed to as- his own tough general-election Mr. Kyl was seen as an impor- when current funding expires. debates, including pushing a states President Trump won in sume only a caretaker role. fight in November, said he tant voice on defense and for- The pick of Mr. Kyl, who is proposal to offer visas to 2016. How those candidates fare Mr. Kyl declined to commit to hopes he can persuade Mr. Kyl eign policy, and he traveled widely respected within the young immigrants who ar- will determine if Republicans can serving into 2020, when a spe- to stay longer. The appoint- on overseas trips with Mr. GOP, could help minimize ten- rived in the country illegally hold on to or expand their ma- cial election is to be held to ment technically runs until the McCain. sions within Arizona’s Repub- but who served in the mili- jority in the Senate. fill the remaining two years of 2020 special election. President Trump cheered lican Party, which has splin- tary or pursued a college or —Andrew Duehren Mr. McCain’s term. Mr. Kyl, 76 years old, the selection of Mr. Kyl, as did tered into two factions: one technical degree. “The reason that I did not served in the U.S. Senate from Senate Majority Leader Mitch more strongly aligned with —Natalie Andrews CONGRESS want to commit beyond the 1995 to 2013, rising to Repub- McConnell (R., Ky.). “Jon Kyl Mr. Trump and one more tra- contributed to this article. Pelosi Spells Out Her Party’s Priorities Democrats House Minority Leader Nancy Pelosi (D., Calif.) sent a letter to all House Democratic lawmakers Push Back Tuesday outlining three legisla- tive priorities for Democrats to focus on if they win control in At Hearing the midterms: lowering health- care costs and prescription-drug prices; increasing wages and ContinuedfromPageOne building infrastructure; and tives and business interests. “cleaning up corruption”—which “I don’t decide cases based on aides say means more oversight personal or policy preferences. I of the Trump administration. am not a pro-plaintiff or pro-de- The No. 2 House Democrat, fendant judge. I am not a pro- Steny Hoyer (D., Md.) said he was prosecution or pro-defense “confident” the Democrats will judge. I am a pro-law judge,” he take the majority in November. said. “If confirmed to the court, Asked who would lead the caucus I would be part of a team of nine, in that agenda, he deflected. committed to deciding cases ac- —Natalie Andrews cording to the Constitution and laws of the United States.” FLORIDA Mr. Kavanaugh, speaking publicly for the first time since Democrat Leads in his nomination on July 9, also Bid for Governor: Poll offered gestures in all direc- tions. He thanked Mr. Trump, a A Quinnipiac University poll Republican, for his “thorough out Tuesday shows Democrat consideration of potential nomi- Andrew Gillum leading Republi- nees.” And he praised a col- can Rep. Ron DeSantis (R., Fla.) league on his current court, the 50% to 47% in the Florida guber- U.S. Court of Appeals for the

natorial race. Mr. Gillum, the 39- District of Columbia Circuit, JIM WATSON/AGENCE FRANCE-PRESSE/GETTY IMAGES year-old mayor of Tallahassee, “our superb chief judge, Merrick Activists wearing costumes inspired by ‘The Handmaid’s Tale’ protest at Brett Kavanaugh’s Supreme Court nomination hearing. won the Democratic primary last Garland”—the 2016 Obama Su- week on a progressive platform, preme Court nominee whom Re- results in a select number of [le- Rather than allowing Mr. At least one Republican and would be a model justice. defeating better funded candi- publicans declined to consider. gal] cases,” Sen. Mike Lee (R., Grassley to begin with an open- echoed Democratic concerns Supreme Court confirmation dates favored by the state’s With midterm congressional Utah) told the nominee. ing statement, Democrats about Mr. Trump. Sen. Jeff battles have become hard-hit- Democratic establishment. Mr. elections approaching, the hear- To Democrats, Judge Ka- chimed in. “This is not a normal Flake of Arizona raised the ting affairs, but even in that DeSantis, also 39, shot to vic- ing offered a nationally tele- vanaugh’s nomination comes an- confirmation hearing,” Sen. president’s Monday tweet at- context Tuesday’s session was tory in the Republican primary vised forum for Republicans and chored to a presidency that Amy Klobuchar (D., Minn.) said tacking Attorney General Jeff unusual. “This is something I’ve on the back of an endorsement Democrats to present their many on their side consider ille- later. “Foundational elements of Sessions for permitting federal never gone through before in 15 from President Trump. starkly different visions of the gitimate, and they attacked Re- our government, including the prosecutors to file corruption Supreme Court nominations,” —Andrew Duehren Kavanaugh nomination. publicans for moving toward rule of law, have been chal- charges against two GOP con- Mr. Grassley said as he strug- Republicans, stressing the confirmation without the re- lenged and undermined,” nearly gressmen. “That is why a lot of gled to maintain order. 2020 RACE nominee’s elite credentials and lease of millions of pages of all of which lead directly to people are concerned about this Democrats, recalling that professional attainments, ac- emails and other records related President Trump, she said. administration and why they Senate Republicans held open a Kerry Unlikely to Run cused Democrats of politicizing to the nominee’s time in the Republicans said the Demo- want to ensure that our institu- Supreme Court seat for a year what they contended should be Bush White House. crats’ behavior, including inter- tions hold,” he said. rather than consider Judge Gar- John Kerry “doubts very a routine confirmation hearing. Their choreographed objec- ruptions and demands for ad- Judge Kavanaugh’s nomina- land, said they were entitled to much” that he will run for They barely mentioned Mr. tions began when Sen. Kamala journment, were inappropriate tion to succeed retired Justice more time to review Judge Ka- elected office again, he said Trump, who selected Judge Ka- Harris (D., Calif.) interrupted whatever their views of the Anthony Kennedy is expected to vanaugh’s records. “What is the Tuesday on CBS. Mr. Kerry—a vanaugh from a list of potential the committee chairman, Sen. nominee. “If this were a court of tilt the ideological balance of rush?” asked Sen. Cory Booker former senator, secretary of nominees recommended by con- Chuck Grassley (R., Iowa). She law, every member on that side the court to the right. Demo- (D., N.J.). state and 2004 presidential nom- servative legal activists. moved to postpone the hearing of the dais would be held in crats warned that he would pro- Sen. Lindsey Graham (R., inee—is one of more than a “This process should be because there hadn’t been time contempt of court,” said Sen. vide a key vote to expand execu- S.C.), said judicial nominations dozen Democrats who are the about your qualifications, your to review 42,000 pages of Ka- John Cornyn (R., Texas). “This tive power and curtail abortion were the spoils of Mr. Trump’s subject of speculation about a character and your approach to vanaugh materials released whole process is supposed to be rights, while Republicans said victory. “You can’t lose the elec- 2020 Democratic presidential bid. judging. It should not be about Monday evening. a civil one.” he was exceptionally qualified tion and pick judges,” he said. Kavanaugh Sought Minority Judges BY JESS BRAVIN cases, it is unclear how those views would add up if he is con- FIRST CLASS WASHINGTON—Assigned in firmed to the Supreme Court. early 2001 to help remake the But it may not take long to federal bench with fresh conser- find out. New challenges to affir- TRAVELFOR vative faces, Brett Kavanaugh, mative action—including a suit then an associate counsel to against Harvard College’s admis- President George W. Bush, sion policy, backed by the Trump sought out minority candidates administration—are in the pipe- YOUR FEET to produce a slate the White line. Race-conscious college ad- House could tout for racial and missions survived its last test gender diversity. two years ago—by one vote, cast The result: Of 11 judicial nomi- by Justice Anthony Kennedy, nees the president introduced in whose seat Judge Kavanaugh

May 2001, six were minorities or CNP/DPA/ZUMA PRESS would take. women. Judicial nominees Brett Kavanaugh helped select in 2001 The Senate Judiciary Com- Two years later, Judge Ka- mittee’s top Democrat, Sen. Di- vanaugh had a different task, one documents provided by Mr. clared tough enforcement provi- anne Feinstein of California, the future Supreme Court nomi- Bush’s attorney to the Senate Ju- sions in the Voting Rights Act of shares those concerns. “While nee pursued with equal zeal: to diciary Committee. 1965 no longer were justifiable, a only a small portion of docu- coordinate the administration’s Throughout Judge Ka- year earlier Judge Kavanaugh ments related to Brett Ka- opposition to affirmative action vanaugh’s career, people close to had used an elections case to vanaugh’s beliefs about race and in cases challenging admissions him say he has lamented the sys- make a different point. diversity have been provided, policies at the University of temic disabilities racism has in- “Racial insensitivity, racial even those few documents indi- Michigan. flicted upon African-Americans, bias, and indeed outright racism cate he believes the Constitution By a 5-4 ruling the high court yet has been dubious that the are still problems throughout the does not allow efforts to remedy ultimately rejected the adminis- Constitution permits aggressive United States,” he wrote. “The the effects of racial discrimina- tration’s position, upholding the government intervention. He has long march for equality for Afri- tion,” she said. Michigan law school’s use of race criticized “special legislation” can-Americans is not finished.” Judge Kavanaugh, currently as a “plus” factor within a holis- for minorities. That came from a unanimous serving on the U.S. Court of Ap- tic process to promote classroom But as a student at Yale Law decision temporarily blocking a peals for the District of Columbia diversity. School, Judge Kavanaugh wrote South Carolina voter identifica- Circuit, made race-consciousness Judge Kavanaugh said he a law review article recommend- tion law. In a concurring opinion, part of his narrative when Presi- Travel tip: comfortable feet make everything didn’t find the two assignments ing procedures to counter the the two other judges said the dent Trump announced the nom- “conscious or unconscious rac- case “demonstrates the continu- ination in July. more fun. The Un-Sneaker combines the comfort inconsistent. “I continue to see no contra- ism” of prosecutors and judges ing utility of Section 5 of the His mother, Martha Ka- ofasneakerwiththestyleofashoe.Travelwell! diction,” he wrote in March 2003 during jury selection. As a judge, Voting Rights Act”—the provi- vanaugh, retired as a state judge to a journalist questioning how he has built relationships with sion Chief Justice Roberts’s in Rockville, Md. But “in the the White House could boast black student groups at the Yale opinion would mothball a year 1960s and ’70s, she taught his- about minority judicial nominees and Harvard law schools and later—in countering discrimina- tory at two largely African- while fighting affirmative action. taken pride in recruiting their tory election laws. Judge Ka- American public high schools in “Diversity is a permissible goal members for clerkships. vanaugh declined to join that Washington, D.C….Her example but a state must use race-neutral Where Chief Justice John concurrence. taught me the importance of Free shipping and returns. Order online or call 844.482.4800. criteria when available,” he Roberts saw so much progress in As an appellate judge who equality for all Americans,” added. The email is among the race relations that in 2013 he de- heard relatively few civil-rights Judge Kavanaugh said. A6 | Wednesday, September 5, 2018 ** THE WALL STREET JOURNAL. WORLD NEWS Russian Airstrikes Hit Syria Rebel Haven Trump administration warns of consequences of looming regime effort to retake Idlib

Russian warplanes struck rebels in Syria’s last major op- position stronghold on Tuesday, forcing the Trump administra- tion to confront a looming re- gime offensive that is expected

By Sune Engel Rasmussen in Beirut and Dion Nissenbaum in Washington to deliver a fatal blow in the seven-year conflict and hand Moscow a diplomatic victory. The Trump administration issued a coordinated call for

Russia, Iran and Syria to avoid OMAR HAJ KADOUR/AGENCE FRANCE-PRESSE/GETTY IMAGES a military assault on Idlib. Pres- Smoke rose from buildings hit by Russian airstrikes, above, in rebel-held Muhambal, southwest of Idlib, on Tuesday, while firefighters battled blazes in nearby Jadraya. ident Trump, Secretary of State Mike Pompeo, United Nations dreds of thousands of people.” Idlib is home to nearly Ambassador Nikki Haley, and Mr. Trump warned that the three million people, accord- Gen. Joseph Dunford, chairman U.S. would “respond swiftly ing to some estimates, about of the Joint Chiefs of Staff, all and appropriately” if Syrian half of whom have already warned of a potential catastro- President Bashar al-Assad been displaced from other phe if the battle goes forward. used chemical weapons. parts of Syria. There is no ex- Moscow has dismissed U.S. U.S. officials said they have act information on rebels, but concerns that Syria again will picked up indications that Syria Western officials estimate the use chemical weapons during is preparing to use such weap- number to be at least 20,000. the offensive, a move that has ons, as it did in Idlib province The drumbeat for what will twice led Mr. Trump to order two years ago and last year in a likely be the final major battle limited airstrikes targeting the Damascus suburb. In both cases, of Syria’s conflict has been Syrian regime. The Kremlin’s the U.S. launched limited air- growing for weeks. response has fueled wide- strikes on Syrian regime targets. A commander for the Ahrar spread skepticism in Washing- The Assad regime is tighten- al-Sham militant group said last ton about Moscow’s intentions, ing its grip on the entire coun- week that rebels in Idlib were and raised fears that Russia try, retaking in recent months making preparations to defend will give Syria a free hand to the Damascus suburb of Eastern the province against an attack. use chemical weapons on civil- Ghouta and most of the south- “The battle for the north will be ians as Syrian forces prepare ern provinces. It left the north hell for the Russians, and not for a battle that could deliver for last as the battle there is like other areas,” the com- a crippling blow to rebels who complicated by diverging inter- mander, Jaber Ali Bashar, said. have been fighting the regime. ests of several foreign powers Tuesday’s strikes—about 30

“We will find out and learn OMAR HAJand KADOUR/AGENCE FRANCE-PRESSE/GETTY IMAGES the largest presence of an- targeting an area 25 miles the extent to which the U.S. tigovernment fighters. west of Idlib city—were the has power short of deploying chemical weapons. fight the extremist group. ers to agree [on] a diplomatic Leaders of Russia and Iran, first large-scale raids in three military force,” said Nicholas “If they want to continue to The U.N. and other interna- solution that could avoid an Mr. Assad’s main backers, weeks, according to the White Heras, a Syria expert at the go the route of taking over tional bodies have warned that assault that would put thou- along with Turkey’s president Helmets civil-defense group. Center for a New American Se- Syria, they can do that, but an all-out assault could lead to sands of innocent lives at are set to meet in Tehran on The Russian Ministry of De- curity. “The Trump adminis- they cannot do it with chemical a humanitarian disaster akin risk,” said Lorraine Bramwell, Friday for talks on what is ex- fense wasn’t available for com- tration has one more chance weapons,” Ms. Haley told re- to the fall of Aleppo. In con- the International Rescue Com- pected to be the last chapter in ment. On Tuesday, Kremlin to carve a line in the sand.” porters at the United Nations. trast with Aleppo, Idlib’s dis- mittee’s Syria country director. the war. Northwestern Syria is spokesman Dmitry Peskov U.S. officials have outlined Chief U.S. concerns in Syria placed will have few places to As the airstrikes intensified, under a trilateral cease-fire warned that Syrian armed no plans to intervene militar- are the presence of Islamic run, as Turkey has denied en- Mr. Trump warned on Tuesday deal brokered last year among forces were readying to act in ily in an assault, but the State fighters and Iranian- try to Syrian refugees and the that an attack on Idlib “would the three countries, but that Idlib, where he said militants Trump administration has backed military units. The U.S. regime has gained ground. be a reckless escalation of an hasn’t prevented the regime had congregated. The Syrian warned that it could again hit has around 2,000 troops in “Civilians had been anx- already tragic conflict that and Russia from regularly government didn’t respond to a the Syrian regime if it uses northeastern Syria to help iously hoping for world pow- would risk the lives of hun- launching strikes in the area. request for comment. Uganda Generation Gap Echoes Across Africa President BY NICHOLAS BARIYO lanyi. He was charged with ment spokesman said torture treason for allegedly encour- claims are being investigated. To Host KAMPALA, Uganda—In his aging supporters to stone the The standoff between the songs, Bobi Wine, a Ugandan motorcade of Mr. Museveni, pop star and the president is pop star turned parliamentar- who has ruled the East African the latest episode in a genera- U.N. Talks ian, frequently taunts longtime nation since 1986. tional battle playing out in sev- President Yoweri Museveni, In a Facebook post on Mon- eral African nations. The calling the 73-year-old an ag- day, the singer, who denies the world’s youngest continent, On Iran ing despot who has forgotten charges and is now in the U.S. whose citizens have a median BY FARNAZ FASSIHI his country’s youth. for medical treatment after be- age of 19½ years, has the Now, Mr. Museveni is slap- ing released on bail, gave de- world’s oldest leaders, accord- UNITED NATIONS—Presi- ping back. In August, Ugandan tails of torture he said he was ing to the United Nation’s de- dent Trump will chair a United security forces arrested the subjected to by soldiers during velopment agency. Lacking jobs Nations Security Council de- 36-year-old, whose legal name his arrest, including beatings and opportunities, many young bate about Iran during the is Robert Ssentamu Kyagu- with a metal rod. A govern- people are feeling little alle- world body’s annual gathering giance to governments led by of international leaders this

former liberation movements. AGENCE FRANCE-PRESSE/GETTY IMAGES month, U.S. Ambassador Nikki “Assertive and rebellious Bobi Wine was released on bail in Gulu, Uganda, on Aug. 27. Haley said. youths have put Museveni and Mr. Trump’s Security Coun- his club of the region’s other cil appearance is scheduled for old presidents on notice,” said Deep Divide Sept. 26 when he will be in Nicholas Ssengoba, a Kampala- A number of Africa’s longtime rulers lead countries where the New York attending the U.N. based independent analyst. median age is a quarter of their own. General Assembly and meeting “It’s a shock challenge, which with world leaders. old leaders have to contend Population’s median age, 2015 Leader’s age Mr. Trump isn’t seeking a with in the foreseeable future.” 020406080Council resolution or state- With a median age of 16 Cameroon ment, but rather an opportu- years, Uganda has Africa’s sec- Age gap nity to openly discuss what ond-youngest population after Uganda the U.S. calls Iran’s “violations Niger, but it is ruled by one of of international law” and its Zimbabwe the continent’s oldest and lon- regional policies, from Leba- gest-serving presidents. Mr. Republic of Congo non to Syria and Yemen, Ms. Museveni has maintained a Haley said. bigger public profile than some Equatorial Guinea By choosing Iran as his of his fellow longtime rulers. Rwanda marquee topic at the General Last year, Mr. Museveni re- Assembly over other interna- moved term limits from the U.S. tional issues, Mr. Trump is constitution and in July im- Democratic seeking to focus attention on posed a tax on social-media Republic of Congo and gain support for one of his use, which he blames for key foreign policies: pressur- Sources: U.N. Department of Economic and Social Affairs (median ages); U.N. reports, spreading “fake news.” He has government statistics, Encyclopedia Britannica (leader ages) ing and isolating Iran econom- closed critical media and pro- THE WALL STREET JOURNAL. ically and politically. democracy groups and arrested The U.S. has tried repeat- dozens of journalists. country whose politics have bill to extend Mr. Museveni’s edly—and failed—to bring Iran Government data, mean- been dominated by former rule. Days later, a grenade was to the center of the Security while, show that 3.4 million guerrilla fighters. The coun- hurled at his home. Council’s monthly debates Ugandans slipped into poverty try’s opposition is fractured. But Mr. Wine’s fans haven’t about the Middle East, as during the past five years, “Bobi Wine has not been been deterred. In the wake of other Council members, in- youth unemployment stands tested as a leader. He does not his arrest, Mr. Wine’s recording cluding European allies, have above 60%, and public hospitals even have a political party,” studio in the slum of Kam- given priority to other con- routinely lack basic medicine. said David Karungi, an aca- wokya, outside the capital flicts and to the Israeli-Pales- In this context, Mr. Wine’s demic at Uganda’s Kyambogo Kampala, has become a meet- tinian peace process. music, which he calls “edutain- University, who supports Mr. ing point for jobless young By hosting a debate on Iran, ment,” resonates. “We know Museveni’s National Resis- men. Police have repeatedly Mr. Trump will elevate a side- you fought a bush war,” he tance Movement. fired tear gas to disperse them, lined Council issue to a major sings about Mr. Museveni in The president has called Mr. but many keep returning. event. his 2017 single “Freedom.” Wine and other critical law- “Bobi Wine understands Council members have lined “But imagine a child who makers “unprincipled politi- our problems better than any- up against Mr. Trump’s deci- wasn’t born when you came cians who mislead our youth one else,” said Daniela Lufafa, sion earlier this year to exit [into power] has now become into rioting,” and intensified a a 29-year-old unemployed from the Iran nuclear deal, but a parent.” crackdown on the singer and butcher, who was outside the most countries agree with the Critics point to Mr. Wine’s his supporters. In December, studio Thursday evening. U.S. position that Iran is a de- lack of experience—he was Mr. Wine was one of several “Those in power are scared of stabilizing force in the region. elected as an independent lawmakers beaten by soldiers him because he speaks for the They also share U.S. concerns member of Parliament only last on the floor of Parliament ordinary people like us. We about Iran’s ballistic-missile year—as an impediment in a when they tried to filibuster a love him.” program. THE WALL STREET JOURNAL. **** Wednesday, September 5, 2018 | A7 WORLD NEWS Trump, Moon to Meet in New York

BY MICHAEL C. BENDER

WASHINGTON—President Trump and South Korean Presi- dent Moon Jae-in agreed to meet this month in New York during the United Nations Gen- eral Assembly as they seek to break an impasse over their YANG ZHENG/IMAGINECHINA shared goal of denuclearizing CHINA MINZU DAILY North Korea. A museum for China’s Zhou Baozhong in Yunnan, left; Zhou and Kim Il Sung, right, in 1948 with their wives and children—Zhou Wei and future dictator Kim Jong Il. The two leaders spoke by phone about negotiations with Pyongyang and agreed to con- tinue the conversation during Chinese Family Aids Kim Dynasty U.N. meetings, the White House said on Tuesday. Mr. Moon also briefed Mr. From a 1930s wartime partnership, Kim dynasty’s tie to the Zhous of China stretches ‘like the Yalu River’ Trump on meetings scheduled for Wednesday between a team from South Korea and Kim BY JAMES T. AREDDY Kim Jong Un, attended a ventures, including a Weimin Jong Un, the North Korean Pyongyang reception he ar- Lifeline mine, formed during a burst leader, in Pyongyang. Mr. DANDONG, China—Eight ranged, prospected for gold Exports to China, particularly coal, were an important revenue source of deal making in North Ko- Moon is scheduled to meet decades ago, a Chinese com- in North Korea and, in April, for North Korea before sanctions got in the way in 2017. rea earlier this century; the with Mr. Kim this month in mander named Zhou Bao- paid a weeklong visit, ac- ventures drew at least $2.32 North Korea. zhong fought Japanese forces cording to people familiar Annual value of North Korean exports billion in investment and Chi- Mr. Trump expressed frus- alongside the future founder with the matter and official Coal to China Other goods to China nese enterprises were part- tration with the deadlocked of the North Korean dictator- reports. Exports to rest of world ners in 75% of them. peace process in a series of ship, Kim Il Sung. All three North Korean dic- $3billion The North Korean econ- Twitter posts last week in The battlefield alliance be- tators have welcomed visits omy, hobbled by sanctions, which he lashed out at China came a relationship that has by the Chinese commander’s shrank by 3.5% last year, its and raised the prospect of re- lasted three generations, a now 76-year-old daughter, worst downturn since 1997, suming joint U.S. military exer- family story rich in propa- Zhou Wei, celebrating her as according to South Korea’s 2 cises with South Korea and ganda value for the neighbor- a lasting reminder of the na- central bank. Japan that would be “far bigger ing communist countries. tions’ shared “anti-Japanese If the U.N. relaxes North than ever before.” It was also the foundation revolutionary struggle.” Korea sanctions, Chinese en- Pyongyang has said the U.S. for commerce, part of a Chi- North Korean media docu- trepreneurs would pounce. 1 needs to reciprocate North Ko- nese trade and investment ment Ms. Zhou’s visits to “It’s like they could turn a rea’s gestures—among them, lifeline that long nourished Pyongyang, where she has switch overnight,” said Nich- the dismantling of its under- North Korea and could do so set a wreath inscribed with olas Eberstadt of the Ameri- ground nuclear test site and again if international sanc- “Zhou Wei Family Tribute, can Enterprise Institute in 0 the return of U.S. war re- tions are eased. Everlasting Glory” at the Washington. mains—with a statement de- Businesses connected to Kim Il Sung Mausoleum and ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 When Mr. Kim visited Bei- claring an official end to the the Zhou family helped en- confirmed the citizenry had Source: Harvard University's Center for jing in March, Chinese Presi- Korean War. rich North Korea as Pyong- “rallied close around Mar- International Development THE WALL STREET JOURNAL. dent Xi Jinping recalled how Meanwhile, Chinese Presi- yang plowed much of its na- shal Kim Jong Un.” their forefathers shaped a dent Xi Jinping is sending a tional income into weapons With family friendship has North Korea!” Weiran, Ms. Zhou’s husband. “deep revolutionary friend- lieutenant to North Korea’s development, according to an come commercial access. The Few specifics about the “We do not do business,” ship.” None connects the re- 70th anniversary celebrations, investigation by The Wall Journal found official regis- North Korea operations and Mr. Mao said when asked gimes more than the Chinese instead of going himself, a deci- Street Journal. Business re- tration documents for three financial performance of the about North Korea, referring commander’s legendary ca- sion some experts said reflects cords, official media reports companies in China, includ- companies could be learned. questions to China’s PLA be- maraderie with Mr. Kim’s China’s balancing act between and interviews connect the ing Ms. Zhou’s flagship Dan- People answering Weimin’s cause both are retired offi- grandfather. Pyongyang and Washington. Chinese commander’s family dong Weimin International phones wouldn’t answer cers. The military didn’t re- Last summer, Zhou Wei’s Li Zhanshu, a member of with North Korean industries Trade Co., that name Ms. questions from the Journal; spond. The family didn’t photo came in handy for Chi- China’s seven-person Commu- including mining, trade and Zhou, her husband and two its registered address in respond to written questions. nese mining engineer Fan nist Party leadership, will consumer goods. daughters as shareholders or Dandong, near China’s bridge Before China joined the Zhongli. Mr. Fan said Weimin travel to Pyongyang as Mr. Xi’s Sanctions have curtailed directors. North Korean and across the Yalu River to U.S. and other United Na- sent him to North Korea to envoy at weekend events com- Chinese trade with North Ko- Chinese official media name North Korea, is a single-car tions members last year in evaluate two gold deposits. memorating North Korea’s rea in the past year, and a those businesses and affili- garage. banning most trade and in- Gasoline was almost impossi- founding, the Chinese and member of the family told ates in reports about mining, Ms. Zhou is a retired Peo- vestment with North Korea ble to find, he told the Jour- North Korean official news ser- the Journal that the Zhous trading and other commerce ple’s Liberation Army doctor to protest its nuclear pur- nal, but his handlers secured vices reported Tuesday. don’t do business in North in North Korea. and lives in a Beijing com- suits, Chinese companies had a tankful at a military depot The announcement quashes Korea. In China, a Weimin busi- pound for cadres near Ti- spent over a decade modern- by explaining “the chair of speculation that Mr. Xi would But the relationship be- ness a few years ago adver- ananmen Square, according izing the mines and factories our company has a really use the occasion to visit Pyong- tween the two families en- tised advisory services by to records at the military that made its weapons pro- good relationship with your yang, after Mr. Kim’s three dures. In the past two years, boasting that with 20 years hospital where she served. gram possible. great leaders.” trips to China this year. family representatives have of experience it “can help When a Journal reporter A declassified U.S. Central —Chunying Zhang in Shanghai —Chun Han Wong endorsed the military pur- solve any problem that knocked on her green door in Intelligence Agency compen- and Yun-hwan Chae in Seoul contributed to this article. suits of North Korean leader arises when investing in March, it was opened by Mao dium lists 351 foreign joint contributed to this article. WORLDWATCH

CHINA PHILIPPINES Xi, African Leaders Duterte Orders Affirm Project Goals Arrest of a Rival Chinese President Xi Jinping Philippine President Rodrigo and African leaders reaffirmed Duterte ordered the arrest of joint development goals at the his most vocal and prominent conclusion of a Beijing summit critic on Tuesday, revoking an shadowed by a debt crisis among amnesty granted to a senator some African nations and ques- by his predecessor as he inten- tions about China’s role in it. sifies a crackdown on his politi- Following two days of meet- cal opponents. ings with top officials from more The move against Sen. Anto- than 50 African nations, Mr. Xi nio Trillanes IV is the second said their interests align on time a serving senator and strengthening developing nations presidential critic has been tar- and that Beijing is a defender of geted by law enforcement under the continent’s success. Mr. Duterte, who also supported Mr. Xi’s drive to put a stamp the ouster of a Supreme Court on globalization has met with in- chief justice this year. creasing challenge from foreign- A presidential proclamation aid experts, who say China’s proj- said Mr. Trillanes failed to com- ects can leave nations drowning ply with requirements for an in debt, and from the Trump ad- amnesty, granted eight years ministration, which says Chinese ago, to cover his role as a export strategies eliminate jobs leader of a failed military coup in its trade partners’ economies. in 2003. —James T. Areddy —Jake Maxwell Watts

SOUTH AFRICA GERMANY Economy Slips Leftists Unveil New Into Recession Mode Political Movement

The South African economy German leftists launched a KENTARO IKUSHIMA/MAINICHI NEWSPAPER/ASSOCIATED PRESS fell into a recession in the second cross-party political movement The bridge to Kansai International Airport was damaged by a tanker in thetyphoon. At least seven people were killed in the storm. quarter, the statistics office said, aimed at wooing back voters dealing a blow to President Cyril lost to right-wing populists, put- Ramaphosa less than a year be- ting the political landscape under fore national elections. threat of further fragmentation. Storm Damage Cuts Off Major Japan Airport The gross domestic product of The group—called Aufstehen, Africa’s most developed economy or Stand Up—is backed by prom- BY MEGUMI FUJIKAWA nal’s basement was flooded, airport started evacuating for days for Typhoon Jebi, shrank by an annualized 0.7% be- inent members of the Social an airport spokesman said. passengers by ship to a port at which carried peak winds of tween April and June—following a Democrats, now a junior partner TOKYO—One of Japan’s larg- The airport, near Osaka, Kobe Airport, which is about around 130 miles an hour and 2.6% contraction in the first quar- in the government, as well as est airports, Kansai Interna- serves as one of the nation’s 1.5 hours away from Kansai In- brought heavy rains to much ter—on the back of bad perfor- the opposition Greens and the tional, was closed indefinitely by main gateways for Asian tour- ternational, the spokeswoman of central Japan. mances in agriculture, transport radical Left Party. damage from the nation’s most ists. Japan Airlines said 150 said. So far, three ships have No trains or cars were on and trade, among other sectors. It has said it aims to target powerful typhoon in 25 years. passengers and 600 staff were evacuated about 300 people the bridge when it was struck, After the GDP data were re- voters on the right with a mix- The bridge that links the is- still at the airport as of Tues- and ships will pick up custom- and NHK said all 11 crew mem- leased, the rand weakened 2.5% ture of socialist prescriptions land airport with the mainland day night. All Nippon Airways ers every 15 minutes, she said. bers aboard the ship were to 15.25 to the dollar, deepening and cautious criticism of immi- was hit by a storm-driven said 65 customers and 290 A terminal for low-cost car- evacuated without injury. Na- a monthslong selloff and piling gration. tanker ship Tuesday, shearing employees were at the airport. riers escaped major damage, tionwide, NHK said, at least pressure on Mr. Ramaphosa and The movement is attempting off one chunk and dislodging a An airport spokeswoman said but its runway was closed. The seven people were killed and his African National Congress to address a yearslong weaken- section of roadway from the a total of 3,000 customers and spokeswoman said it was still more than 300 injured. party ahead of elections due by ing among left-leaning parties, a rest of the bridge. At the air- airport staff were stranded too soon to say when the air- Japan Airlines and All Nip- August 2019. trend seen across Europe. port itself, one runway was there Tuesday. port might reopen. pon Airways both canceled —Thandi Ntobela —Bojan Pancevski under water and one termi- On Wednesday morning, the Japan had been preparing hundreds of flights. A8 | Wednesday, September 5, 2018 THE WALL STREET JOURNAL. WORLD NEWS

Report Card BOE Chief Willing to Stay A look at Mark Carney’s tenure at the Bank of England Unemployment in the U.K. has almost halved...... and the economy has grown...... but inflation has been volatile. Longer for Brexit Stability Unemployment rate* GDP† Consumer-price inflation† 8% 4.0% 4.0% BY JASON DOUGLAS amid patchy progress in talks derly British exit from the EU After AND PAUL HANNON between London and Brussels have taken a hit as negotia- 7 3.5 3.5 Brexit vote and infighting in Parliament. tions have dragged on with- 6 3.0 3.0 LONDON—Bank of England “I am willing to do what- out agreement. Prime Minis- Gov. Mark Carney signaled ever else I can in order to ter Theresa May’s efforts to 5 2.5 2.5 that he is willing to stay on promote both a smooth Brexit unite her ruling Conservative 4 2.0 2.0 as head of the U.K. central and an effective transition at Party and lawmakers more bank beyond his planned de- the Bank of England,” Mr. broadly behind her Brexit vi- 3 1.5 1.5 parture date next year, offer- Carney said in testimony to sion are unraveling. 2 1.0 1.0 ing a measure of stability in Parliament’s Treasury Com- London and Brussels have British policy making as the mittee. stepped up preparations for 1 0.5 0.5 country prepares to leave the Mr. Carney’s term had the possibility of talks ending 0 0 0 European Union. been due to end in June 2019, in March without an agree- In testimony to lawmakers six years after he took up the ment on terms of Britain’s ’13 ’14 ’15 ’16 ’17 ’18 ’13 ’14 ’15 ’16 ’17 ’18 ’13 ’14 ’15 ’16 ’17 ’18 Tuesday, Mr. Carney said he post. He initially planned to withdrawal—an outcome that *Quarterly data; †Annualized quarterly change had discussed the possibility serve only five years but policy makers, executives and Sources: U.K. Office for National Statistics (Unemployment, CPI); Eurostat (GDP) THE WALL STREET JOURNAL. of extending his tenure with agreed in late 2016 to stay on economists warn would cause Treasury chief Philip Ham- an extra 12 months to steer widespread disruption to vestors and investors here in servative lawmaker Nicky Treasury, which handles the mond and a decision on his the economy past its ex- two-way trade. the U.K. is that we have got Morgan, head of the Treasury appointment of BOE officials, future should be made public pected March 2019 exit from Mr. Carney’s willingness to continuity. In the event of no Committee, said the govern- said it would make an an- soon. the EU. stay on provides a measure of deal, there will be a grown-up ment needs to provide fur- nouncement “in due course.” The central-bank chief said Since then, uncertainty reassurance, said David Owen, controlling monetary policy,” ther clarity swiftly. “Stability Agreeing to an extension “a measure of continuity” about what will happen in chief European economist at he said. is vital during this important to Mr. Carney’s term would might help the Brexit process, March has intensified. Expec- Jefferies in London. “The per- Mr. Carney didn’t say how period,” she said. also give the Treasury extra which is mired in uncertainty tations for a smooth and or- ception of international in- long he might stay on. Con- A spokeswoman for the time to find a successor. FROM PAGE ONE

cance of Mr. Kaepernick’s in- Mr. Kaepernick’s discussions the protests to be not appro- Kaepernick’s involvement in volvement in its marketing, say- on a new deal with Nike have priate, versus 43% who did. the campaign was released, Nike Faces ing he is one of many athletes taken place since around the But those numbers sharply according to data from Brand- featured as part of the brand’s start of this year, the person diverge by demographic. Peo- watch, a social-media monitor- 30th anniversary of the “Just said, which was also in the ple between ages 18 and 34, a ing company. Not including Kaepernick Do It” campaign. A spokes- months before Nike and the key target audience for any neutral references, more than woman pointed to ads featuring NFL completed their new ap- apparel brand, view the dem- 90% of Nike-related mentions tennis star Serena Williams and parel deal. Around March, Mr. onstrations more favor- were positive in the days lead- Backlash NFL player Shaquem Griffin, Kaepernick also received inter- ably—56% said they found the ing up to the news, the data ContinuedfromPageOne who became the first one- est from other apparel compa- protests appropriate. Older show. Positive sentiment competitive sports market. handed player to be drafted in nies including Puma SE and fans overwhelmingly deemed dropped to about 50% on Mr. Kaepernick revealed his the Super Bowl era. “All of Adidas AG. The person said Mr. them to be not appropriate, as Monday and 40% on Tuesday. role in the campaign with a those athletes embody the ‘Just Kaepernick’s previous deal with did Republicans—only 10% Doug Hamburger, 62, who Monday tweet that said: “Be- Do It’ spirit,” she said. Nike went through mid-2019, said they were appropriate. lives in Knoxville, Tenn., said lieve in something, even if it The company declined to all leading to the new pact. Some on social media, in- he and his wife are Gold Star means sacrificing everything. comment on whether it had Representatives of Adidas cluding prominent athletes and parents and take issue with

#JustDoIt.” The tweet, which expected any backlash from TED S. WARREN/ASSOCIATEDand PRESS Puma didn’t respond to other celebrities, have praised Nike describing Mr. Kaeper- was shared by Nike on its offi- featuring Mr. Kaepernick. Former San Francisco 49ers requests to comment. Mr. Kaepernick, saying he has nick’s actions as “sacrificing cial account, included a black- In a statement, NFL spokes- player Colin Kaepernick During a question-and-an- drawn attention to issues such everything.” “We said forget and-white picture of Mr. Kaep- woman Jocelyn Moore said the swer session at a sports-indus- as police brutality and criminal- it, we can walk away from ernick’s face. league embraces its responsi- new deal was struck that will try conference in April, Adidas justice reform. Basketball star Nike,” the retired district man- An NFL executive said the bility to promote change. “The pay him a “top of the line,” executive Mark King said the LeBron James, who is spon- ager said. league had received a “modest social justice issues that Colin multiyear deal for football company would “definitely sored by Nike, shared the im- Miranda Lang, 23, who lives heads-up” that Mr. Kaepernick and other professional athletes players that will include a want to sign” Mr. Kaepernick age of the new ad campaign on in Washington and works at a was going to be used again by have raised deserve our atten- shoe and apparel line. Mr. if he signed with a team. his Instagram page. Actress Ja- nonprofit, said she intends to Nike, but the exact messaging tion and action,” she said. Kaepernick hadn’t been fea- RecentdatafromaWall mie Lee Curtis tweeted: “The buy more Nike products as a attached to him and the extent Mr. Kaepernick has been tured in Nike campaigns re- Street Journal/NBC News shed swish got it right!” result of the campaign. “In the of the revitalized commercial signed with Nike since his cently and has gone unsigned light on the divisiveness of the Sentiment expressed about last year or so, I have made a relationship with the player days as an emerging star with by teams since March 2017, player protests during the na- Nike on social media, blogs conscious effort to spend on wasn’t made clear. the 49ers. A person familiar leading to his collusion griev- tional anthem. In total, 54% of and other websites turned brands that support the things Nike played down the signifi- with the negotiations said a ance against the league. respondents said they found negative after news of Mr. I support,” she said. THE WALL STREET JOURNAL. **** Wednesday, September 5, 2018 | A9 WORLD NEWS Pope’s Accuser Sparks Church Divisions Doubts, support follow Vatican ex-diplomat’s Cardinal Consults claim that Francis Priests on Next Step covered up sex abuse Cardinal Donald Wuerl, BY FRANCIS X. ROCCA the beleaguered archbishop of Washington, D.C., faced a ROME—The Vatican hasn’t mixture of calls to resign and issued a response more than a to stay in his post from week after a former Vatican priests in his diocese at a diplomat accused Pope Francis meeting Monday, according to of covering up sexual miscon- people who were present. duct, but former officials are At an annual Labor Day disputing some his claims— gathering, Cardinal Wuerl told while other churchmen have more than 100 clergy that he vouched for his integrity. had met in Rome the previ- On Sunday, two former pa- ous week with Pope Francis, pal spokesmen challenged the who instructed him to confer account of Archbishop Carlo with his priests over what Maria Viganò, former Vatican step to take next. The cardi- ambassador to the U.S., about nal has faced growing pres- a 2015 meeting he had with sure to resign in recent Pope Francis. weeks, following criticism Archbishop Viganò’s claim that he mishandled allega- that the pope rehabilitated a tions of sexual abuse. favorite U.S. cardinal who the Following an opening archbishop said had been pun- prayer and brief remarks by ished for sexual activity with Cardinal Wuerl, more than a seminarians has shocked the dozen priests spoke for more Catholic Church, deepening di- than an hour in total, the visions between the pope’s people present said. Though progressive supporters and the tone was cordial, some conservative critics such as suggested that it might be the archbishop. time for the cardinal to step The archbishop’s indict- aside; others encouraged him ment, published Aug. 25, to stay and be part of the landed amid an escalating cri- church’s healing process. sis over the church’s handling The cardinal said little in

of sexual abuse of minors by VATICAN MEDIA/AGENCE FRANCE-PRESSE/GETTY IMAGES response to the comments. He priests in the U.S., Australia Pope Francis celebrating Mass on Tuesday at Santa Marta, the boarding house where he resides at the Vatican. received two standing ova- and Latin America. tions during the event at a The accusations threaten troversy and his response. McCarrick a powerful adviser tions remain open about the Cardinal McCarrick secret. Maryland church and grew vis- to damage Pope Francis’s “With persons lacking good on Vatican foreign pol- extent of sanctions imposed But doing so is common prac- ibly emotional at the end, the moral authority, and under- will, with persons who seek icy and the appointment of on then-Cardinal McCarrick. tice in the case of bishops, people who were present said. mine his agenda of increasing only scandal, who seek only U.S. bishops, the archbishop Witnesses confirm he moved present and past Vatican offi- Ed McFadden, a spokesman the church’s focus on social- division,” the proper response says. He has called for the out of his apartment at a cials say. for the Archdiocese of Wash- justice issues such as immi- is “silence and prayer,” he pope to resign. Washington seminary in early Others have questioned ington, said the reception from gration, poverty and the envi- said. Now-Archbishop McCarrick 2009. why Archbishop Viganò priests was mostly positive. ronment. According to Archbishop became the first man to resign But the cardinal continued warmly praised Cardinal Mc- A report released last The pope has stayed silent Viganò, Pope Benedict or- as a cardinal in nearly a cen- to celebrate Mass in public, Carrick as an ambassador month by the attorney gen- on the archbishop’s main accu- dered the American cardinal tury, after a church investiga- even at the Vatican, and ap- “very much loved from us all” eral of Pennsylvania detailed sation against him: that he to move out of the seminary tion found credible a charge peared at events with Pope at a gala dinner in 2012 if he decades of sexual abuse by disregarded sanctions that his where he had been living and that he had sexually abused a Benedict—suggesting that, if viewed the cardinal as a pa- more than 300 priests in the predecessor, Pope Benedict banned him from publicly cel- teenager in the early 1970s. He the former pope had restricted riah. The archbishop has sug- state. Cardinal Wuerl, who XVI, had placed on then-Cardi- ebrating Mass, among other has said he can’t recall the in- him to a life of private “prayer gested he was just being dip- served as the archbishop of nal Theodore McCarrick, a for- restrictions. cident with the teenager. His and penance,” it wasn’t en- lomatic. Pittsburgh from 1988 to mer archbishop of Washing- Pope Francis learned about lawyer has said he deserves forced. Retired Pope Benedict Several U.S. bishops have 2006, has been criticized for ton. the cardinal’s behavior and due process with regard to hasn’t commented on the af- released statements praising not doing enough to keep “The truth is meek, the his punishment from Arch- Archbishop Viganò’s allega- fair. Archbishop Viganò as a man of priests accused of abuse truth is silent,” Pope Francis bishop Viganò, but didn’t en- tions. Some observers have ques- honesty, while others have ac- from returning to ministry. said in a homily on Monday, in force the sanctions and in- In the absence of any re- tioned why Pope Benedict cused him of ill will toward —Ian Lovett a possible allusion to the con- stead made Cardinal sponse by the Vatican, ques- would have kept sanctions on the pope.

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laugh and gets people on the he says, he was “utterly flab- painter’s palette and a potato- were considered important ele- any plating violations issued. edge of their seats,” says owner bergasted” when soup arrived and-goat-cheese gnocchi on top ments. “There’s a fine line,” he California code states whatever Chefs Serve Phillip Foss. “I’ll take the lumps in a glass nestled in a stiletto. of a tea pot. “This is not only says. “I can’t imagine walking restaurants use as plates must from all the naysayers.” Food in footwear featured in food, this is art,” he says. “Real up to a table with a shovel.” have “a smooth, easily clean- Naysayers of odd plating in- international diplomacy when art is never 100% for everyone.” An ashtray didn’t cross the able surface” that doesn’t allow On Rocks, clude Ross McGinnes, a digital- Israeli Prime Minister Benjamin Some unconventional plating line for diner Mimi Dendias. the “migration of deleterious content consultant living in Netanyahu had Japanese Prime may stem from the tradition of One appeared under her des- substances or impart colors, Hebden Bridge, England, who Minister Shinzo Abe over for chefs gathering outside work to sert featuring chocolate and ba- odors, or tastes to food.” In Stilettos started wewantplates.com, a dinner in May. The chef served experiment, says Russell Jack- con flakes during a dinner-and- “A shoe wouldn’t fit that,” site curating user-submitted chocolate pralines in mock son, a veteran New York City performance show in May at Mr.Dragansays. ContinuedfromPageOne photos of plate substitutes metal shoes, posting an Insta- chef and once a contestant on the Vaults, a London venue. “I The Birmingham Magis- ing experience. At the Sugar they’ve found at restaurants: gram photo that sparked online the “Iron Chef America” show. think it’s really interesting and trates’ Court in England fined a Club, executive chef Josh Bar- axes, clipboards, tennis rackets, criticism calling the shoe-ta- He says he first got wind of different,” says Ms. Dendias, a steakhouse this year for a plat- low says the rock plating offers hubcaps, flower pots. bling “tone deaf.” such experimentation around photographer in the city. “Gen- ing-related offense, says a Bir- guests a surprise and gets them Among detractors in the cu- The Israeli Ministry of For- 2010. Others date it earlier: Mr. erally, definitely in favor.” mingham city-council media excited. “The first thing you linary world are Jacques Pepin, eign Affairs confirmed the din- McGinnes, who runs the odd- Not too successful were the manager. It had served on wood have to do is tell them not to a dean at the International Cu- ner but didn’t comment on the plating website, says he was baby bottles filled with foie boards with cracks, after inspec- eat the rocks,” says Mr. Bar- linary Center in New York City shoes. The Japanese Embassy served cake on a ping-pong gras steeped truffle milk that tors had warned that the boards low. He also serves deep-fried and former chef to French in Israel says then-Ambassador paddle around 2008 in Barce- Mr. Foss, the Chicago chef, once couldn’t be properly cleaned. pig head on tree bark. heads of state, who calls the Koji Tomita visited the chef’s lona, and “it still gives me served. He took them off the Mr. Jackson, the New York El Ideas, a Michelin-star- trend “ridiculous,” saying “it restaurant several weeks later sleepless nights.” menu because “it was creepy,” chef, thinks the next experi- rated Chicago restaurant, hides the lack of technique.” and ordered the same dessert In the trend’s early days, Mr. he says. “Grown men and mentation will forgo plating al- serves a coconut-and-lime pow- Joseph Fattorini, a London in a shoe. Jackson says, chefs put careful women were sucking on baby together, with food consumed der on a mirror with razor- wine merchant, says “the smart The chef, Moshe Segev, says thought into “syncing the cre- bottles together.” directly off the table. blades for a 1980s “Miami Vice” dining world in London sees it he also serves sweet-cream ative arc,” between food and James Dragan, who manages “At that point, we have feel. Diners suck up the powder as gimmicky.” On a ski trip in mushroom linguine on a wood what it was on. Plating mate- Los Angeles County food in- nothing better to say, cre- with straws. “It makes people Switzerland several years ago, stump, cheesecakes on a rial, construction and color spectors, says he hasn’t seen atively.”

golf,” says Mr. Grant. “Her work is Facebook. Her book Sandberg was squeezed in as a hobby.” By then, an important issue had bubbled up in a business Monitors under Ms. Sandberg that wasn’t initially elevated to Mr. Zuckerberg’s attention. Risk Issues ‘Yes,wefacereal Mr. Stamos, the security chief, began raising alarms in ContinuedfromPageOne challenges and we have the summer of 2016 about to be complex, expensive and Russian interference, accord- thankless, people close to the a lot of work to do to ing to a person familiar with company say, with any failures the situation. very public. address them. But I His team had identified Ms. Sandberg will face her Russian state-sponsored activ- first extended questioning can’t imagine doing ity on Facebook’s platform, al- about many of the issues sur- though it had yet to link it to rounding Facebook on anything else.’ fake-news accounts that were Wednesday, when she is sched- already active on Facebook. uled to testify on Capitol Hill In a statement, Sheryl Sandberg Internally, however, Face- about matters regarding for- said she is committed to Facebook book staffers were aware of eign interference. fake news operations run out Many former and current of Macedonia looking to make executives believe Ms. Sand- money from advertising. But berg’s internal standing was the issue got bogged down be- hurt by the company’s lack of tween the policy team, which preparedness for its cascading had no rules for fighting and crises over the past two years, disabling fake news accounts, including the proliferation of and Facebook lawyers who misinformation and hate Book of Business were reluctant to do anything speech on the platform and a Facebook's platform has that smacked of trying to in- number of flubs around data remained popular with fluence the election, the per- privacy. So does David Kirk- advertisers, despite recent son said. patrick, founder of New York- controversies. After the 2016 election, based Techonomy Media and when Mr. Zuckerberg re- author of a 2010 book, “The Annual revenue marked that it was “pretty Facebook Effect,” who says Q1 and Q2 crazy” to think that the out- $40 billion that by all appearances Ms. come might have been influ- Sandberg’s role has weakened enced by fake news, the secu- in the past several years. rity team realized its warnings 30 hadn’t gotten to the engineer- ing side of the company and AnewNo.2? that the CEO hadn’t been “Mark has found himself 20 briefed. It couldn’t be learned forced to step up to deal with if Ms. Sandberg herself had things he wouldn’t otherwise been notified of the concerns. want to pay attention to,” Mr. 10 In December 2016, Mr. Sta- Kirkpatrick said. He called the mos circumvented the bureau- firm’s public-relations efforts cracy by sending a report to a “a rolling multiyear disaster.” 0 wider group of Facebook execu- When Ms. Sandberg went tives, including Mr. Zuckerberg. unmentioned in a major re- 2012 ’14 ’16 ’18 The team began getting the Source: FactSet shuffling of Mr. Zuckerberg’s FROM TOP: JASONresources ALDEN/BLOOMBERG NEWS; SAUL LOEB/AFP/GETTY IMAGES it needed to solve top product executives in May, THE WALL STREET JOURNAL. Facebook Chief Executive Mark Zuckerberg has drawn protests over privacy and data protection. the problem, the person famil- the moves caused former em- iar with the situation said, and ployees and executives to Ms. Sandberg started at power to solve the problems Over 20 years of working executives say that as Face- Mr. Zuckerberg later said he speculate that she had been Facebook when Mr. Zuckerberg that were surfacing at the together, “she has gone book’s reach and influence ex- regretted his initial remarks displaced as the second-most- was 23 years old and famously company, she adds. through I don’t know how panded, her deliberate man- about fake news. powerful figure by Chris Cox, a green as a corporate executive. “Even though it is a great many thousands of these little agement style made it difficult close friend of Mr. Zuckerberg, A former Google executive, she partnership, I will say there’s a notebooks that fit nicely in the to resolve issues and bring who had been elevated to a became the company’s busi- material difference between palm of your hand,” says David them to a close and at times Security team new role in charge of all the ness strategist and resident being CEO and being COO,” Fischer, Facebook’s vice presi- obscured the big picture. In early 2018, almost all of company’s apps, including grown-up, with direct respon- says Dr. Desmond-Hellmann, dent for business and market- “Bad actors, pornography, the 127-member security team Facebook, WhatsApp and In- sibility for advertising sales, former president of the bio- ing partnerships. “She has lists racist content, sexist content were shifted over to Mr. Zuck- stagram. legal and policy issues. This al- tech firm Genentech Inc. for each person as well as her- and concerns about new ad erberg’s side of the house, a A spokesperson for Face- lowed Mr. Zuckerberg to focus “While they both discuss pri- products and privacy. None of move that reflected Facebook’s book said Mr. Cox strongly dis- on engineering challenges. orities, ultimately Mark makes this stuff is new,” recalls one maturing approach to security, agrees with this perception The business grew up that the calls on personnel alloca- former employee who was in Mr. Stamos said. “The product and noted the two have worked way—in two parallel parts. tion—not just how much to One critic called the the meetings. organization is taking respon- closely together for years. While senior leaders worked spend but what percent of the firm’s P.R. efforts ‘a Some current and former sibility for the negative conse- Meanwhile, at a company collaboratively, Mr. Zuckerberg engineering staff works on employees have asked whether quences of the product deci- where departures are uncom- and Ms. Sandberg effectively things as well.” rolling multiyear Ms. Sandberg’s outside activi- sions they make,” he said. mon, five senior executives on ran two separate businesses Ms. Sandberg became a disaster.’ ties proved a distraction when The Russia findings sparked Ms. Sandberg’s leadership that share the same campus, feminist icon by encouraging Facebook’s challenges hit. Her congressional hearings and team have said in recent according to a number of cur- women to “lean in” and not first best-seller “Lean In,” user backlash—and forced months they are leaving. rent and former employees. shy away from daunting work- which in 2013 Oprah Winfrey Facebook to start investing Those include general counsel “The Sheryl world and Mark’s place challenges. As she self so when I go in and have called “a manifesto for women more heavily in securing its Colin Stretch, policy chief El- world of all the technical stuff steered Facebook’s torrid my one-on-one with her later in the workplace,” spawned a platform. The uproar over liot Schrage and security head are operated very differently growth—its 2017 net income today, she will flip to my name foundation and a thriving Cambridge Analytica in March Alex Stamos. and at very different paces,” was more than $15 billion—she and there will be a set of is- speaking career. kicked that process into high People close to Facebook say says one person who has raised two children, wrote two sues. It’s effective.” After the sudden death of her gear, according to people close the perception that her influ- worked closely with them. best-selling books, gave com- During the Cambridge Ana- husband in 2015, SurveyMonkey to the company. ence has lessened isn’t true. mencement speeches and TED lytica crisis, Ms. Sandberg CEO Dave Goldberg, she turned Now, Ms. Sandberg’s man- “Sheryl is key to building Face- Talks, and was a regular at Da- worked through the weekends her journals about the death date is to spend a majority of book,” Mr. Zuckerberg said in a Engineering buddies vos and Allen & Co.’s Sun Val- and school functions. During into “Option B,” which was pub- her time on safety and security statement. “We’re making Mr. Zuckerberg’s organiza- ley Conference. the depths of the crisis, her lished in April 2017. vulnerabilities. She formed a steady progress preventing tion is the technology engine A compulsive organizer, Ms. daughter starred in a school The book got a big publicity SWAT team to do what she abuse on our platform, includ- of the company, filled with en- Sandberg manages her packed musical, according to people push through much of 2017, and other Facebookers had ing during elections—but we al- gineering buddies who have schedule of Facebook, family familiar with her schedule. Ms. adding trips to places like struggled with when faced ways have more work to do. his ear and, for better or and book-writing in part by Sandberg was seen pacing the Houston, Cleveland, and Dur- with a crisis: bridge the gap This is a priority for both of us.” worse, are empowered to making “to-do-lists of to-do- courtyard during intermission ham, N.C. She recorded inter- between the technical and Ms. Sandberg’s new role, move quickly and messily. Ms. lists of to-do-lists,” says psy- on conference calls as the views with Oprah, Stephen Col- business sides of the company which she takes on in addition Sandberg is by nature more chologist Adam Grant, who co- company struggled to contain bert and Ellen DeGeneres. Mr. to act decisively. The shift to her other duties, makes her methodical and cautious, host- wrote a book, called “Option the growing controversy. Zuckerberg was away a lot too “from reactive to proactive de- of critical importance to Mr. ing numerous meetings as her B,” with her. Some current and former that year, fulfilling the personal tection is a big change,” Mr. Zuckerberg, these people say. team calibrates the impact of goal he’d set to visit 30 U.S. Zuckerberg said in August. Few others at Facebook are potential policy changes and states he’d never seen before. Many of the changes that positioned to figure out how to business decisions. Friend Zone This was a time when Face- are being put in place to clean get on top of its problems, let The company as a whole, in- Facebook's user growth slowed in the second quarter, book’s problems were intensi- up the Facebook platform will alone pre-empt them. cluding Mr. Zuckerberg’s team, after years of steady gains. fying. Among other things, be expensive and could have When asked about her plans was for years focused primar- Facebook’s security team was an impact on growth, putting a Monthly active users Daily active users at Facebook, Ms. Sandberg ily on growth and developing 2.5 billion uncovering more evidence of brake on the ad-revenue ma- said in a statement she is com- new products, rather than additional Russian interference chine that Ms. Sandberg built. 2.0 mitted to the company. “Ten safety and security. Last year, on the platform; legislators In July, when Facebook re- years ago I joined Facebook Mr. Zuckerberg said that was 1.5 were increasingly frustrated ported that a surprise slow- because I believed in Mark’s his responsibility and that he with the social media giant down in revenue growth for vision for the good that can is moving to fix the imbalance. 1.0 and hate speech was fueling the second quarter was likely come from connecting people, Sue Desmond-Hellmann, a more violence overseas. to continue along with an un- and I still feel that way,” she Facebook board member and 0.5 People close to Ms. Sand- expected increase in costs for said. “Yes, we face real chal- CEO of the Bill & Melinda berg strongly dispute the sug- security and privacy, investors lenges and we have a lot of Gates Foundation, says Ms. 0 gestion that she was distracted shaved almost $120 billion in work to do to address them. Sandberg is an “exceptional 2013 ’14 ’15 ’16 ’17 ’18* and say she scheduled her value from the company’s valu- But I can’t imagine doing any- business executive.” Yet she *Q2 2018 book tour around her work ob- ation—the biggest one-day loss thing else.” wouldn’t have had all of the Source: FactSet THE WALL STREET JOURNAL. ligations. “A lot of CEOs play ever for a U.S.-listed company. THE WALL STREET JOURNAL. **** NY Wednesday, September 5, 2018 | A10A GREATER NEW YORK City Making Progress on Housing Repairs Mayor de Blasio says Southern District…these are pendent monitor to improve some “crossed wires” in com- all things that are works in NYCHA. A judge would have to munications between the city there were some progress,” the mayor said at approve such a move. and the federal government but ‘crossed wires,’ but an unrelated news conference. “Absent oversight from a that conversations about the “Everything’s moving, we’re monitor charged with policing settlement were productive. rehab is moving along taking it all very seriously.” NYCHA and directing it to “I would say during discus- New York City agreed to the achieve compliance, NYCHA sions around the settlement, BY KATIE HONAN consent decree after federal will continue to violate the law which were very, very exten- prosecutors found health and and put residents at risk,” sive, everyone ultimately got Mayor Bill de Blasio de- safety hazards at NYCHA de- prosecutors wrote in the court to a cooperative place and a fended the New York City velopments following a two- document. productive place,” he said. Housing Authority on Tuesday year investigation into the au- NYCHA had a “dysfunc- “Where this is leading is after Manhattan federal prose- thority. Under the decree, the tional approach” to serious something more formal, which cutors accused the city of fail- city will spend $1 billion dur- health issues and didn’t move is when there’s a monitor in ing to comply with orders to ing the first four years of the to address the hazards until place.” fix the agency’s deteriorating federal monitoring, and then federal prosecutors pressured A spokeswoman for NYCHA, public-housing developments. $200 million each year during the authority, according to the Jasmine Blake, said the au- Prosecutors in the U.S. At- the next decade to make re- filing. thority has new management

torney’s Office for the South- JAMES KEIVOM/PRESS POOL pairs. The rehabilitation costs The court document also that is changing its culture ern District of New York said NYCHA has been working to fix dilapidated apartments. have continued to rise, and the said that NYCHA officials ig- and training more than 1,400 in a court filing on Friday that authority acknowledged in nored requests by federal staffers to make repairs. NYCHA has been violating fed- here to federal requirements On Tuesday, Mr. de Blasio, a July that it would need $31.8 prosecutors to meet and dis- “Large-scale transformation eral safety protocol by con- for NYCHA. The Friday court Democrat, said NYCHA—the billion to make necessary re- cuss immediate compliance, will not happen overnight— tinuing to expose its residents filing said NYCHA officials ad- largest public housing author- pairs, which was an increase and waited more than three and the consent decree re- to toxic lead dust during mitted in correspondences ity in the country with 176,000 of nearly $7 billion from previ- weeks before saying they flects that,” she said in a building renovations. with prosecutors on Aug. 3 apartments across New York ous estimates. found a way to become com- statement. “We’re taking ag- Under a consent decree that they weren’t in compli- City—is continuing to repair In the Friday filing, prose- pliant sooner. gressive steps to implement reached with prosecutors in ance—and wouldn’t be until and renovate its buildings. cutors said the violations Mr. de Blasio said on Tues- reforms and are making steady June, the city agreed to ad- early 2019. “The issues raised by the showed the need for an inde- day that there may have been progress for our residents.” Soaking Up a Win at the U.S. Open Moody’s: Tax Cap Hurts Tri-State

BY JOSEPH DE AVILA passed legislation this year al- lowing taxpayers to make pay- The Treasury Department’s ments to charitable organiza- recent proposal barring New tions controlled by local York, New Jersey and Connecti- governments in exchange for cut from letting taxpayers avoid credits against their state or a new cap on state and local tax local taxes. The workaround deductions is a “credit nega- aimed to allow taxpayers to tive” for the states, according deduct these payments as to Moody’s Investors Service. charitable contributions for Blocking workarounds to the federal income-tax purposes, new $10,000 cap on state and while using the same payments local tax deductions would in- to satisfy local tax liabilities. crease the burden on people in The $10,000 annual cap on high-tax jurisdictions, the state and local tax deductions credit-ratings firm said in a re- has big implications for the port released Tuesday. The cap tri-state region. In New Jersey is part of President Trump’s new and Connecticut, four out of tax law enacted in late 2017. 10 tax filers claimed more A “credit negative” means than $10,000 in state and local Moody’s believes the Treasury tax deductions in 2015, accord- proposal, if finalized, would ing to the Moody’s report. In hurt the credit of the three New York, it was more than states. But that is only one of one-third of tax filers. many credit factors the firm Most tri-state residents, takes into consideration, and however, will pay less in taxes it doesn’t mean Moody’s is overall this year, according to weighing a rating or outlook the Tax Policy Center, a re- change for any of the states. search group run by a former “Voters in some municipali- Obama administration official. ties will be more likely to re- About 8.3% of New York ject tax increases because they households will pay more in will not be partially offset by a 2018 than they would have un-

JUSTIN LANE/EPA/SHUTTERSTOCK federal tax benefit,” the report der the old law, compared SWEET SUCCESS: Anastasija Sevastova of Latvia reveled in her win Tuesday after defeating defending U.S. Open tennis champion said. with 6.3% nationally. In New Sloane Stephens of the U.S. 6-2, 6-3 in the quarterfinals at the USTA Billie Jean King National Tennis Center in Queens. New York, New Jersey, Con- Jersey it is 10.2%, and in Con- necticut and California all necticut, 8.4%. New Jersey Governor Calls on Trump to Fund Key Rail Link BY PAUL BERGER times a year, causing delays to to be built during the next two ripple along the busiest passen- decades between Newark and New Jersey Gov. Phil Mur- ger rail line in the country. New York City. They include new phy rallied with federal elected Last October, Mr. Murphy’s rail bridges, new tracks and a officials Tuesday to highlight a Republican predecessor, Gov. tunnel under the Hudson River. stalled effort to modernize and Chris Christie, stood on the The program would vastly double rail links between New same spot with the bridge in improve rail service along Am- Jersey and New York. the background to celebrate trak’s Northeast Corridor line. Standing on the shore of the the start of $20 million worth It also would improve service Hackensack River near New- of early construction work, in- for about 100,000 daily com- ark, Mr. Murphy, a Democrat, cluding relocating utilities and muters who travel between said he had heeded the Trump building a new pier to support New Jersey and New York. Its administration’s demand that work on the replacement total cost is estimated at New Jersey and New York find bridge, which will rise more about $30 billion. alternative sources of funding than 50 feet over the river and The Trump administration to qualify for federal support won’t need to open. has held up the bridge project, for the sprawling program But the real work can only citing technical reasons in- known as Gateway. begin once the federal share of cluding the fact that New York He called on the adminis- funding for the roughly $1.7 and New Jersey intended to tration to start moving on the billion bridge is in place. “This fund part of their share of project. That would require re- ought to be a no-brainer for construction costs using a fed- leasing about $800 million in him,” Mr. Murphy said of Re- eral loan, which the govern-

federal grant funding to allow publican President Trump. EDWIN J. TORRES/NJment GOVERNOR’S OFFICE said counted as federal, construction of the first part A spokeswoman for the U.S. Standing by the Hackensack River, Gov. Phil Murphy highlighted the need to replace the Portal Bridge. not local, funding. of Gateway, a new rail bridge Transportation Department In June, Mr. Murphy replaced over the river. said the bridge project re- ocrat, who accused Mr. Trump way’s most prominent boosters. portation Secretary Elaine Chao that loan as he announced $600 The current century-old span, mains under review, pending of holding up Gateway because The Trump administration told a House committee earlier million of funds from New Jer- known as the Portal Bridge, further information regarding of a “political vendetta.” has rejected claims by New this year that the states would sey. Gateway’s leaders, made up stands less than 25 feet above its financing. The department Sen. Chuck Schumer of New York and New Jersey officials need to put more “skin in the of a coalition of state officials as the water and must swing open didn’t respond to statements York, the Senate’s Democratic that it must honor an Obama game” to pay for the program. well as representatives from to accommodate boats. It fails to made Tuesday by U.S. Sen. Bob leader and a frequent critic of administration pledge to pay for Gateway is a series of massive Amtrak, are still awaiting a re- close properly at least several Menendez, a New Jersey Dem- the president’s, is one of Gate- half of Gateway’s costs. Trans- infrastructure projects expected sponse from the administration. A10B | Wednesday, September 5, 2018 NY ** THE WALL STREET JOURNAL. GREATER NEW YORK

GREATERNEW METRO MONEY | By Anne Kadet YORKWATCH Wanted: Workers With Autism MILITARY

Korean War Soldier’s Alexis Pren- Remains Identified dergast, a 25- year-old The remains of a missing Brooklyn New York soldier who died dur- woman who ing the Korean War more than has autism 60 years ago have been identi- spectrum dis- fied, U.S. military officials say. order, is the first to admit The Pentagon’s Defense there are skills she hasn’t POW/MIA Accounting Agency mastered. “Mostly it’s social announced Tuesday that First Lt. stuff. I miss some cues,” she Herman L. Falk’s remains were says. Her wiring also lends un- identified last month using DNA usual strengths, like an ability analysis, dental records and ma- to focus for long stretches on terial evidence. tasks requiring great attention The 22-year-old from Man- to detail. Happily, she found hattan was serving in the an employer looking for some- Army’s Second Infantry Division one just like her. when he and other members of Daivergent, a Manhattan his platoon were reported miss- tech startup, provides autis- ing during fighting in South Ko- tic contractors to clients rea in February 1951, DPAA says. seeking high accuracy and After the war returning speed on tasks including data American POWs reported Lt. entry and online research. Falk had died that spring at a Most people find these jobs POW camp in North Korea, offi- tedious and tiring; they get cials say. sloppy after an hour, says co- Lt. Falk’s remains were founder and chief executive among those of at least 400 officer Byran Dai. But Daiver- U.S. servicemen handed over by gent’s autistic workers “can the North Koreans from do it for the day, can do it 1990-94. for the week, can do it —Associated Press month after month,” he says. Mr. Dai, who launched his

NEW JERSEY company in February with BESS ADLER FOR THE WALL STREET JOURNAL $50,000 in savings and Worker Leon Campbell, left, with Daivergent CEO Byran Dai, says he appreciates the structure that the company provides. Man Hit and Killed $100,000 in funding from the By Commuter Train Entrepreneurs Roundtable Dai says. Employees and cial aspects of work. An from Hunter College, say to people on the spectrum. Accelerator, manages a team contractors can choose their estimated 50% to 75% of peo- they appreciate this struc- Some small outfits already A man was struck and killed of four autistic employees at own schedules, and most ple on the autism spectrum ture. “I was afraid my first employ workers on the spec- by a train in northern New Jer- his headquarters and a pool work between five and 30 experience long-term periods job would be overwhelming trum for remote work, says sey on Tuesday, NJ Transit said. of some 200 contractors hours a week. Daivergent of- of unemployment. “I want him and give me more stress Dave Kearon, director of A Main Line train hit the man around the country who fers no benefits but plans to to have a meaningful life,” Mr. than even school did,” he adult services for advocacy at about 12:30 p.m. just west of work from home. do so in the future. Dai says of his brother. says. “But this is simpler.” organization Autism Speaks, the train station in Ramsey, the In a project Mr. Dai de- For Mr. Dai, who is 28 and Autistic workers can face Mr. Dai consulted with but Daivergent stands out for agency said. His name hasn’t scribes as typical, workers grew up in New York City be- other challenges in the work- employment-services experts the training it provides. “He’s been released, and it wasn’t im- digitally labeled items such as fore studying data science and force once employed. Many at the Arc New York, an ad- offering not just technical mediately clear why he was on doors and windows in blue- epidemiology at Harvard Uni- people with autism think vocacy group, while develop- skills but social and commu- the tracks. prints for a company making versity and Johns Hopkins very literally and may strug- ing the work platform. To re- nication skills-training.” It didn’t appear that any of construction cost-estimate Bloomberg School of Public gle with ambiguity. So Mr. fine it further, Daivergent is The Points Guy, a website the 10 passengers aboard the software. The tagged images Health, the motivation to start Dai developed his own digi- also consulting with a li- for consumers aiming to train were injured. are used to train an artificial- Daivergent was personal. His tal work platform to accom- censed clinical social worker maximize their travel re- The train had departed from intelligence system to recog- 19-year-old brother, Brandon, modate Daivergent’s work- specializing in young adults wards, retained Daivergent to Hoboken earlier Tuesday and was nize such objects on its own. is on the autism spectrum. ers. It breaks projects into on the autism spectrum. help build the database be- bound for Suffern, N.Y. The acci- Daivergent’s remote work- Four years ago, before their small chunks so workers can Because the spectrum in- hind its new app. “It’s super dent caused rail service between ers are paid by the project. mother died of cancer-related easily track their own prog- cludes such a range of condi- complicated, and it’s tedious Suffern and Waldwick, N.J., to be They might earn a set complications, she asked Mr. ress, and the system relies tions, Mr. Dai says he doesn’t work,” says director of product suspended for about 90 minutes, amount for tagging a certain Dai to look after him. heavily on video instruction. require any specific diagno- management Alon Hartuv. and residual delays were re- number of images, for exam- People on the spectrum of- Employees such as Leon sis to hire. He typically re- “But they provided the goods.” ported after the service resumed. ple. Pay typically works out ten struggle with job inter- Campbell, a Bronx 23-year- cruits from organizations —Associated Press to $12 to $20 an hour, Mr. views and navigating the so- old who recently graduated that provide support services [email protected]

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MUSIC Behind Hip-Hop’s Bidding Wars

BY NEIL SHAH

PLASTERED WITH FACE and neck tattoos, 21-year-old Lil Xan has been in the music business only a year—but he’s already a breakout star. The Redlands, Calif., rapper, whose real name is Diego Leanos, sparked a bidding war last fall af- ter his anti-Xanax song “Betrayed” went viral. He signed with Colum- bia Records in November for a three-album deal worth north of $1 million, according to a person familiar with the matter. In April, his debut album hit the Top Ten on the Billboard charts and last month he walked the red carpet at the MTV Video Music Awards. “It’s f—ing phenomenal,” says Lil Xan’s booking agent, Joshua Ritten- house. “He’s still in his infant stages of even rapping.” It’s the era of the million-dollar hip-hop deal. Over the past 12 to 18 months, competitive pressure has pushed the cost of signing a new rapper up threefold, music-industry insiders say. The biggest contracts for debut artists, once capped at $1 million, can hit the double-digit millions. “In 2017, some of the first guys getting signed were [receiving] less than a $200,000 advance” for their first album, says Tariq Cherif, co-founder of Rolling Loud, one of hip-hop’s biggest festivals.

“Now you’ve got guys that no- PHOTO ILLUSTRATION BY IAN KELTIE; GETTY IMAGES (7); ABC body’s ever heard of—they’ve got one music video that goes viral— and they’re getting deals for multi- resembling the Strokes (early to his manager, Trevor Patterson. has signed hitmakers Cardi B and bels may be justified in ramping up ple millions of dollars.” 2000s), they’re now grabbing rap- The same month, in one of the Lil Uzi Vert and emerging acts Lil their investments, some executives Hip-hop dethroned rock as pers with social-media fame and a industry’s most touted deals, 19- Skies, Shoreline Mafia and Rico say. Global distribution of music to- America’s most popular genre last lo-fi, melodic sound associated year-old Chicago rapper Juice Nasty, according to people familiar day is cheap compared with the year, putting pressure on labels to with the streaming service Sound- WRLD signed a multimillion-dollar with the matter. Independent dis- days of physical CDs and records, expand their rap rosters to build Cloud. If you’re in a music video partnership with labels Interscope tributor and label Empire has making profit margins better. Rap market share. Feeling flush from with a famously morose rapper, it Records and Grade A Productions, made waves by offering acts art- doesn’t require large studio bud- an industry rebound fueled by mu- could land you a deal. according to a person familiar ist-friendly deals. gets, and radio promotion—a signif- sic-streaming, executives are Acts like rap collective Brock- with the situation. “Lucid Dreams,” Some labels are proceeding cau- icant label expense—is no longer scrambling to sign buzzy rappers hampton and the recently mur- tiously. Executives at Mass Appeal essential. In some cases, deals can before competitors do. dered Florida rapper XXXTenta- Records, co-founded by veteran pay off quickly. Artists increasingly have lever- cion command huge money rapper Nas, are launching a new With the record industry’s re- age in negotiations, music-industry because they’re seen as safe bets. Music executives are imprint, Street Dreams, in partner- bound driven almost entirely by insiders say, thanks to streaming But there’s “a lot of froth,” says scrambling to sign new, ship with Nas’s younger brother, the rise of streaming services, la- successes and powerful attorneys Peter Edge, chief executive of RCA Jabari “Jungle” Jones, to sign a bels need to invest in the rela- and managers. They’re demanding Records, which signed Brockhamp- buzzy rappers before broader array of acts. “We’re not tively new music popular on Spo- heftier advances, shorter contracts ton and Childish Gambino. “The their competitors do. going to put out a bunch of guys tify and other platforms, some and lucrative profit splits. Often, music business has always been that look the same,” Jungle says. executives say. Hip-hop represents they’re rejecting traditional deals known to get a little overexcited.” It’s still tough to get a record 38% of U.S. on-demand audio where labels own the recordings The swiftness of star-making in deal. And some artists, like 21 Sav- streams, Nielsen Music says, more and receive the lion’s share of roy- the social-media age and wide- Juice WRLD’s biggest single, has age, who has a joint venture with than rock (20%) or pop (16%). alties and instead seeking tempo- spread reliance among labels on been a smash hit, reaching No. 3 Epic Records, have rejected offers But critics have begun complain- rary licensing agreements where data from YouTube, SoundCloud on the Billboard singles chart. in favor of partnerships, says his ing that the rap frenzy is creating a they retain ownership. and Spotify mean executives Other rappers that have fueled manager, Kei Henderson. glut of gimmicky, relatively inter- The hip-hop bidding wars are a quickly swarm over the same acts bidding wars include California’s Industry executives are already changeable artists. “A lot of it new chapter in the until-recently and overpay to win bidding wars, Yung Pinch and Florida’s Dominic speculating about how long the sounds the same,” says Empire A&R moribund U.S. record industry, insiders say. Fike, music-industry executives say. bidding frenzy can last. “At some executive Tina Davis. even if overall revenues remain In March, Young Nudy, a cousin One of the most aggressive la- point, is this a bubble?” says John Labels “sign five of the same 40% lower than their 1999 peak. of Atlanta rap star 21 Savage, bels to sign new acts has been At- Ingram, a music-industry lawyer. thing, to see which of them will Just as music executives once signed with labels RCA Records lantic Records, part of Warner Mu- “And if so, when will it burst?” work,” she says. “They’re grabbing chased “hair-metal” bands (’80s), and SamePlate for a four-album, sic Group, the record industry’s The industry has changed consid- them and throwing them at the wall grunge groups (’90s) and anything multimillion-dollar deal, according third-biggest company. Atlantic erably over the past decade and la- like spaghetti.”

PARENTING THE NEW WAVE OF SUPERCHARGED SWIM CLASSES

BY HILARY POTKEWITZ der 5, and the sec- tions in New York City. Its co- ond-leading cause of founders swam for the national death for those un- teams of their home countries, Ger- SUMMER MAY BE ENDING, but der 15, according to many and Canada. They draw their Anastasia Smirnova will still be the Centers for Dis- staff from the ranks of internation- swimming every week with her 6- ease Control and ally competitive swimmers. month-old daughter, Maya. The Prevention. “When you have a competitive pair started taking baby swim les- The YMCA isn’t swimmer who loves the sport and sons at the British Swim School in competing with pri- has dedicated so much of their life Secaucus, N.J., about two months vate swim schools to swimming, it shows up in the ago and Maya can now float on her for students, Ms. quality of their teaching and les- back independently—without the Mondick says— sons,” says Imagine COO Kate help of a flotation device. they’re competing Pelatti, a former collegiate swimmer. “I wanted my baby to learn to for instructors: “Our Four years ago, when New love the water and not be scared of biggest challenge is Yorker Lauren Higgins started it,” says the 26-year-old Ms. recruiting and re- looking for swim lessons for her Smirnova, an avid swimmer. “She’s taining talented then-6-month-old daughter Lucy, a water baby now. When she’s cry- staff.” she was primarily concerned with ing, if you put her in the water, she One competitor is water safety. Her in-laws had a stops.” Goldfish Swim backyard pool. The Florida-based British Swim School, which origi- She first checked her neighbor-

School, with 200 franchise loca- AQUA-TOTS SWIM SCHOOLS nated in Michigan. It hood YMCA in Long Island City, tions,ispartofawaveofprivate A class for children 3 and up at an Aqua-Tots Swim School in Ahwatukee, Ariz. has over 70 franchise but found baby swim classes to be swim school chains across the locations, with an ad- oversubscribed. country aiming to transform how and a whistle. Parents want their indication, it’s a premium that ditional 25 scheduled to open in the That drove her to Imagine Swim- children learn to swim. kids to have a great experience plenty of parents are willing to pay. next year. ming. Every Saturday morning for Demand for dedicated children’s that’s also developmental.” Traditionally the YMCA was the Founders Chris and Jenny McCui- the past four years, the family has swim schools offering parents a Nearly all the private swim first place parents turned when ston created a curriculum based on been getting up at 7 a.m. to drive to more personalized experience than schools promise a maximum class looking for swim lessons. With the idea of guided play, like games Manhattan for swim class for Lucy, what’s on offer at the YMCA has size of four children per instructor about 2,000 pools offering aquatics that teach safety skills, that all fran- now 5, and Claire, 2. “If we take a created a marked shift over the and pools heated to 88 or 90 de- programs for 1.3 million children, it chisees must follow. few weeks off, they start asking past decade. Schools with a just grees. (Lap pools typically range remains the country’s largest net- Pricing varies by location, rang- when can they go back,” Ms. Higgins handful of locations years ago are from 78 to 82 degrees.) work of swim instruction. ing from about $85 a month for says. now expanding rapidly. Because swimming is their only The YMCA’s goal is to teach as weekly lessons in parts of the Mid- Imagine’s rate of $47 a class is at “Parents are a lot more active focus, they tend to offer more many children as it can to swim, re- west to $120 a month in the North- the high end. (It and some other with their kids now. When I learned classes at more times and more lo- gardless of background, says Lind- east. Mr. McCuiston encourages his schools offer scholarships for low- how to swim, my father just cations. They may require instruc- say Mondick, senior manager of owners to charge slightly above the income children.) But both girls chucked me in a lake,” says Paul tors to have anywhere from 40 to aquatics for YMCA-USA. “Our mis- local market rate—even by just a could swim unassisted before age 3. Preston, co-founder of Arizona- 50 hours of training in their sion is to support communities.” few dollars. “When we go on vacation, peo- based Aqua-Tots Swim School, school’s proprietary swim-teaching The organization revamped its “We want to be the premium ple see a kid in swim-diapers div- which has more than 90 franchise techniques in addition to a life- swimming curriculum in 2016 with learn-to-swim product out there, ing for rings in the pool, and total locations and favors instructors with guard certification. All charge a a primary focus on water safety. and we’ll charge a bit of a premium strangers will approach us and say, backgrounds in childhood education. premium over their local YMCA. Drowning is the leading cause of for that,” he says. ‘Holy mackerel, how can your kids “This is not a coach with a clipboard And if the chains’ expansion is any death among healthy children un- Imagine Swimming has 14 loca- swim like that?’” Ms. Higgins says. A12 | Wednesday, September 5, 2018 THE WALL STREET JOURNAL. LIFE & ARTS

Stanley Morrical’s 1967 Chevrolet Camaro, in front of San Francisco’s Golden Gate Bridge. ANGELA DECENZO FOR THE WALL STREET JOURNAL

MY RIDE | A.J. Baime Living the High-School Dream With a ’67 Camaro

Stanley Morrical, 58, an em- car for a long-haired kid in the late forgot about it. The model year ployee-benefits broker in San Fran- ’70s, but my father was not enthu- 1967 was the very first year of the cisco, on his 1967 Chevrolet Ca- siastic about me driving it. He Camaro, which Chevrolet launched maro, as told to A.J. Baime. thought I would get in trouble. He to battle Ford’s Mustang. This My dad bought the Camaro you was probably right. I went off to specific Camaro came with see here in 1977. I had just gotten college and, in 1982, my father died the Super Sport pack- my driver’s license, and I would of a heart attack. He was only 45. age—high performance. stand in our garage in Fort Wayne, For 13 years, the Camaro sat in In the mid-1990s, Ind., drooling. This was a dream my mother’s garage, but I never my business in San Francisco was doing Mr. Morrical believes his father spent less than $1,000 on the well, and I finally had car in 1977. ‘I spent more than that on one wheel,’ he says. some money. Through my work I met a guy then realize that we replaced it with a new 350 that named Jack Nilson there are all these puts out more horsepower [385], [who has since died]. He other things you plus disc brakes to handle that ex- was a drag racer and he have to do. For exam- tra power. owned a garage near the Sears ple, when we reuphol- My father probably spent less Point racetrack in Sonoma [now stered the back seats, we realized than $1,000 on this car. I spent known as Sonoma Raceway]. we needed new carpeting and a more than that on one wheel. If he Heconvincedmetotakemy new headliner [the fabric on the knew how much I spent on it, he dad’s old Camaro to his shop. Over underside of the roof]. would die of a heart attack a sec- 10 years, together, we built out the Purists will roll their eyes at ond time. But for me, this Camaro Camaro as I would have done if I some of the stuff we did, but I is more than a vehicle; it’s my had had money back when I was a wanted to build the car I wanted. dream car and a tribute to my teenager. We put in more comfortable front memory of him. The process was like redoing an seats and air-conditioning. The —Contact A.J. Baime at old house. You do one thing and original engine was a 350 V-8, and Facebook.com/ajbaime.

ADVERTISEMENT Showroom WORK & FAMILY MAILBOX | By Sue Shellenbarger To advertise: 800-366-3975 or WSJ.com/classifieds A FINE LINE ON PORSCHE PROMOTIONS

Regarding your Aug. and make 22 story on more em- new friends. Q ployers handing out Teens who promotions without a have had to pay raise, what impact does move often that have on the likelihood with their that employees will quit to families take another job?—S.W. tend to have more behav- A: It depends on ioral and whether the employee inter- emotional prets the offer as an appre- problems. ciative gesture by a respect- Com- ful boss whose hands are muter par- tied on compensation, or as ents with a disrespectful ploy by a children of- manipulative boss trying to ten adapt get more work done for their rou- nothing. tines to A boss whose motives support

are suspect is likely to hit ROB WILSON them, trav- two hot buttons that drive eling home employees to quit—dissatis- Regarding your Aug. more often than others. faction with one’s boss, and 14 column on long- Many FaceTime with tod- a lack of pay raises, accord- Q distance marriages, dlers and use cellphones ing to a 2012 study of 560 most of the couples and texting to stay in touch employees by Deloitte. This you mentioned have grown- with teenagers. Also, digi- is especially true of employ- up children, or no children tal tools enable parents to ees who have been with the at home. What happens monitor their children’s company for only one to when little children are in- grades, coordinate sched- three years, a stage when volved?—N.K. ules and pay for extracur- LEASE LEASE workers are most liable to ricular activities from afar. jump ship. In general, em- A: There’s little research Some commuter wives say ployees are far more likely on the impact of commuter delegating responsibility to 2014 Mercedes-Benz G63 to bail if they see their em- marriages on children, but teenage children helps them Designo Edition   ployer’s pay practices as po- the challenges can be com- learn new skills, according Black/Black, loaded litical or arbitrary, accord- plicated. The spouse living to a 2007 study led by > 5  7 . > @   34k miles. $86,900 > ?  7    5/ > #  2 ing to another Deloitte full-time with the children Karla Mason Bergen, an as- survey from 2018. often feels like a single par- sociate professor of commu-   :; "%0 <; % . 7; -+ Nationwide delivery. We offer all current  = ##:     : makes & models - for less. Call 7 days. If the employee sees the ent, and may have to cut nication at the College of Trades accepted. offer as recognition of hard back his or her own time at Saint Mary in Omaha, Neb. 877.989.1500 work and an opportunity to work to meet increased fam- Parents’ attitudes can grow, it’s likely to have the ily-care demands. Children shape children’s response.   www.LEASEFAX.com opposite effect. Promotions may feel shortchanged, too. Children whose parents    -) /0   , ) - , are among the top five rea- Such risks make corporate communicate well with      12 -  0   ) -, ,  CLASSICS sons employees stay with human-resource managers them and embrace com-    12 3   ) - ! their current employers, the reluctant to pressure em- muter setups as a route to a       *  . 2  , ) - &"%' (( ) *+ 1982 Alfa Romeo Spider Veloce     !"  -4,% , ) 8   "% 2012 Deloitte study says. ployees into transfers that better, more prosperous life  #  !   !%% """ +  )    Beautiful condition, 49,600 actual And employers who deliber- split their families. for the family tend to get  $% &"%' (( ) *+  4!% * 6 *  "%! miles. Red exterior with Tan interior. ately create growth opportu- However, commuter set- better grades and have  #   ,     , * 6 *  2  ! Dallas, TX. Everything works. $16,500 nities and stretch assign- ups can be better for chil- fewer behavior problems in -) .    5 6  57  9 07 6    Call (214) 808 -9358 ments for employees have dren than relocating the school, according to a 2015 for further details. far better retention rates whole family, which forces study of 217 commuter fami- than those who don’t. children to change schools lies with teenagers. THE WALL STREET JOURNAL. Wednesday, September 5, 2018 | A13 LIFE & ARTS

ART REVIEW ‘This Land’: Picturing America An exhibition with over 400 photographs tries to take stock of the mood in the U.S. over the past decade

BY RICHARD B. WOODWARD

San Francisco

SINCE OPENING in 2010 on the ICHARD MISRACH San Francisco waterfront, Pier 24 Photography has provided what may be the most agreeable condi- tions in the world for looking at photographs. The cavernous former ware- house is divided into both soaring and intimate spaces. Admission is free but by appointment only (via phone or email) so overcrowding is never a problem. Exhibitions are installed for six months or longer, usually without wall labels: An il- lustrated catalog serves as a por- table guide for names, dates, titles, and as a paper record. “This Land” is its latest the- matic show, a valiant attempt to gauge the mood of the U.S. over the past decade. Within the 18 gal- leries are two sculptures, a video, a small installation, and more than 400 photographs by 18 art- ists, both well-established (Alec GALLERY, NY/CASEMORE KIRKEBY, SAN FRANCISCO; © ALEC SOTH; © GUILLERMO GALINDO/R Soth, Alessandra Sanguinetti, An- My Lê, Katy Grannan) and lesser- known (Bryan Schutmaat, Corine Vermeulen, Donovan Wylie, Daniel Postaer). National art surveys are risky, and maybe foolhardy. If curators try to represent every constitu- ency, the exhibition may lack a strong point of view. Conversely, favoring one style or group can unfairly exclude nonconformists from the historical picture. “This Land” only partially suc- ceeds at resolving this dilemma, especially in a place as big and di- verse—ethnically, romantically, ec- onomically, regionally—as contem- porary America. (For those who

measure art shows by numbers: CLOCKWISE FROM TOP: © BRYAN SCHUTMAAT; © JIM GOLDBERG/PACE/MACGILL Fewer than one-third of the artists are women; only one is African- American; another is Hispanic.) Nonetheless, if you can accept its stylistic prejudice for the sharp-focused, documentary-style still image, “This Land” offers no- table rewards. These are highly personal reports from around the country by photographers you won’t see together elsewhere.

Highly personal reports from around the country by artists you won’t see together elsewhere

Jim Goldberg often encourages his subjects to write on his por- traits of them, a technique that in- troduces unpredictable feedback into what is typically a rigid one- way process. The words on “Fifty- Six Polaroids” (2011-16), hanging near the entrance, range from the prosaic (“My dream is to retire”) to the confessional (“I like to wear women’s underwear”) to the guile- lessly boastful (“I am Jack and I can spell the word ninja”)—hand- drawn messages as distinctive as voices on a video. Mr. Schutmaat’s series (2010-12) on mountain mining communities in the West is another of the show’s highlights. He wants it known that the business of ripping Alec Soth’s ‘The Key Hotel. metals out of the ground leaves Kissimmee, Florida’ (2012), left; Jim harrowing scars on people and the Goldberg’s ‘Meghan’ (2015), above; land. At the same time, as he Guillermo Galindo’s ‘Zapatello’ (2014), writes in the catalog, “every struc- above left; Bryan Schutmaat’s ture built and later abandoned is a ‘Abandoned Homestead’ (2011), top relic of hope,” even a makeshift cemetery. Work about the U.S.-Mexico Harlem (2015-16), and Ms. Vermeu- border by Guillermo Galindo and len’s in Detroit (2007-17), where Richard Misrach fills one of the she lives. Both places suffered largest rooms. Standing in the steep economic declines over middle of the floor are two of Mr. many decades and are now on an Galindo’s improvised sculptures/ upswing, realities that each pho- musical instruments. Fashioned in tographer has documented with 2014-15 from artifacts picked up neighborly care. in the desert (a shoe, chair seat, “This Land” allows artists to bicycle wheel, juice can), they’re present unique aspects of America. tributes to those who have Ms. Sanguinetti set herself up as passed briefly across these deso- the town photographer in Black late lands. River Falls, Wis., center of the Na- Mr. Misrach has photographed tive American Ho-Chunk Nation; in the deserts of the American Ms. Lê takes us to parishes in New West since the 1970s. The exam- Orleans that tourists don’t fre- ples here are from visits (2013-15) quent; Mr. Wylie explores the ar- to Southern California, Arizona chitecture of the interstate high- and Texas, where the border fence way system in New Haven, Conn., has taken various forms: towering and how lives are shaped by it. steel pilings driven into the sand While the social tensions in the on a beach in San Diego; a vehicle country can’t be ignored in these barrier of x-shaped bars in Oco- rooms, the photographers aren’t il- tillo, Calif. lustrating headlines. Independent One wall of prints shows dis- of the news cycle, the show reas- carded bottles and pieces of cloth- sures us that certain landscapes ing on the barren ground. Like Mr. and rituals will endure, no matter Galindo’s objects, they’re a memo- who’s in office. rial to the area’s transients. But in pared with the forlornness of the ian photojournalist Paolo Pel- watch as friends and family mem- what may be the most militarized sun-blasted terrain. legrin. Taken during 2012-14, bers are handcuffed and pinned to This Land landscape in the country, Mr. Mis- On the opposite extreme are mainly at night, the images are the ground. Pier 24 Photography, through March rach views the continuing contest the action-packed scenes of police suffused with the dreamlike vio- Less lurid, and perhaps more 31, 2019 between immigrants and law en- raids in high-crime districts lence of film noir, mitigated by representative of daily life in many forcement as a draw. Both are mi- around Rochester and East Roch- Mr. Pellegrin’s obvious sympa- cities, are Dawoud Bey’s affection- Mr. Woodward is an arts critic in nuscule in his photographs com- ester, N.Y., and Miami by the Ital- thies for the bystanders, who ate studies of streets and people in New York. A14 | Wednesday, September 5, 2018 THE WALL STREET JOURNAL. SPORTS

NCAA Athletes Challenge Limits on Compensation

The plaintiffs say rules tirely—when it comes to compen- sating athletes for their services.” violate U.S. antitrust The current case will be decided laws by artificially by Judge Claudia Wilken, who four years ago ruled for NCAA athletes depressing pay in a similar but more limited anti- trust case. That case, headlined by former UCLA basketball star Ed BY RACHEL BACHMAN O’Bannon, was sparked by an NCAA-licensed videogame that fea- tured animated likenesses that COLLEGE ATHLETES mounted mimicked actual college athletes their latest and strongest charge without compensating the players. against the idea that they are ama- Wilken’s ruling in O’Bannon re- teurs as they began a court chal- sulted in schools being allowed to lenge on Tuesday of the NCAA’s award the full cost of college at- power to limit their compensation tendance to athletes. Some schools in a multibillion-dollar industry. began giving athletes stipends to Former athletes in Division I pay expenses that scholarships men’s and women’s basketball and didn’t cover, such as laundry or top-division football are seeking to transportation. end the NCAA’s cap on what they The O’Bannon case set a prece- may receive for participating in dent favorable to future plaintiffs in college sports: gener- that it ruled that the NCAA violated ally, little more than tu- antitrust laws. Yet the decision also ition, room and board. largely preserved the current col- The plaintiffs in “In lege-sports model so the NCAA also Re: National Collegiate claims it as a kind of victory. Athletic Association “As was demonstrated in the Athletic Grant-in-Aid O’Bannon case, the NCAA will Cap Antitrust Litiga- show that our rules are essential tion” say the NCAA’s to providing educational opportu-

rules violate U.S. anti- KEN INNESS/ZUMA PRESS; STEPHENnities DUNN/GETTY IMAGES (INSET) to hundreds of thousands of trust laws by artifi- Above, Shawne Alston, who played at West Virginia, is one of the plaintiffs in student-athletes across the coun- cially depressing ath- a lawsuit challenging the NCAA. Left, former UCLA star Ed O’Bannon. try,” Donald Remy, chief legal offi- letes’ compensation. ceroftheNCAA,saidinastate- Previous litigation by who compete just as part of their mostly from the men’s basketball ment last week. “Allowing paid athletes sought to stop student experience and a way to tournament. Its associated athletic professionals to replace student- the NCAA from profit- maintain it, would readily degener- conferences together earned bil- athletes on college campuses ing from their name, ate into an uninteresting and po- lions more, largely through broad- would change the face of college image or likeness without sharing degree—in many cases worth a tentially dangerous mismatch.” cast-rights fees for football games. sports as we know it.” the proceeds, but in this case few hundred thousand dollars—are The class-action case will be de- In their prepared opening re- Skeptics—or realists—point out they’re seeking to change the basic ample compensation for what they cided in a bench trial in U.S. Dis- marks, plaintiffs’ lawyers wrote that a shadow market already ex- relationship between college say is an amateur pursuit. trict Court for the Northern Dis- that “the schools compete against ists for college athletes’ services. A sports leaders and participants. “What sets college sports apart trict of California in Oakland, and one another without limitation to criminal case working its way The NCAA says compensation is that the competitors are stu- is expected to last several weeks. attract top coaches and trainers through U.S. federal court alleges limits are necessary to maintain dents and not paid professionals,” A ruling is expected weeks or and administrators, to construct that shoe-company representatives the distinction between college NCAA lawyers wrote in their pre- months later. the largest stadia and the most lav- and others connected to college and professional sports, and that pared opening remarks, released College sports’ annual revenues ish suites, and to secure the most sports arranged kickbacks and letting schools pay athletes unlim- ahead of Tuesday’s trial start. have skyrocketed in recent de- lucrative broadcast and sponsor- bribes to induce high school re- ited sums would erode college They warn that a “competition be- cades, boosted by escalating fees ship and licensing agreements. In cruits to sign with certain schools. sports’ appeal to the public. NCAA tween athletes recruited and paid paid by TV networks to broadcast the multibillion-dollar business of A win by the plaintiffs in this officials say athletic scholarships based on the value of their perfor- games. The NCAA earned more D-I basketball and FBS football, case could bring bidding for play- and the chance to earn a college mance, on one hand, and athletes than $1 billion in revenue last year, competition is stifled only—and en- ers into the light.

THE COUNT a league-high 11 players. Tom Brady Who Dat? and company ended up winning 13 Players drafted in National Fantasy regular-season games en route to the Football Championship leagues. (Top 192, THE SAINTS ARE AFC title. But critics who say that ties broken by avg. draft position.) fantasy football isn’t an accurate rep- TEAM (PLAYERS) TEAM( PLAYERS) resentation of real football, can point 1. Saints (9)* 17. 49ers (6) to last season’s Super Bowl champi- FANTASY FAVORITE 2. Patriots (8) 18. Broncos (6)* ons. The Eagles were one of the least popular teams in fantasy, with only 3. Packers (8) 19. Raiders (6) three players selected, and went on 4. Buccaneers (8) 20. Redskins (6) With the NFL season set to tasy Football Championship. to hoist the Lombardi Trophy. 5. Vikings (7)* 21. Jaguars (6)* kick off, the New England Patriots With fantasy football placing an em- They can also look at the Tampa 6. Rams (7)* 22. Bears (5) and Philadelphia Eagles are the phasis on skill-position players on of- Bay Buccaneers, tied with the Patri- 7. Eagles (7)* 23. Giants (5) early favorites to make it back to fense, New Orleans is the go-to-team ots and Green Bay Packers for the 8. Lions (7) 24. Seahawks (5) the Super Bowl. this season, with a roster that includes second-highest total this year with 9. Chargers (7)* 25. Bengals (5) But fantasy football players ap- running back Alvin Kamara, who has an ites in real-life football, after they were eight players each. The Buccaneers, pear to favor another team: the New average draft position, or ADP, of No. 5 seconds away from advancing to the with quarterback Jameis Winston 10. Falcons (7) 26. Titans (5) Orleans Saints. overall, pictured with quarterback Drew NFC Championship game last season, suspended for the first three games 11. Colts (7) 27. Ravens (5)* With an average total of nine Brees (85), receiver Michael Thomas before then-Vikings quarterback Case of the season, are projected to be one 12. Chiefs (6) 28. Dolphins (4) players drafted by owners in high- (16), running back Mark Ingram (52) and Keenum connected with Stefon Diggs on of the league’s worst teams. 13. Browns (6) 29. Cowboys (4) stakes leagues, the Saints are the receiver Cameron Meredith (134). the “Minneapolis Miracle” to send New Coincidentally, Tampa Bay visits 14. Panthers (6) 30. Cardinals (3) team with the most players repre- In addition, their defense/special Orleans home. New Orleans on Sunday. Oddsmak- 15. Steelers (6) 31. Jets (3) sented in drafts conducted in the teams is taken on average 185th. Applying the same standard last year ers have made the Saints a 9.5- 16. Texans (6)* 32. Bills (3) past few weeks for the National Fan- The Saints are also one of the favor- would have highlighted the Patriots, with point favorite. —Michael Salfino Source: NFFC *Defense/special teams drafted JAYNE KAMIN-ONCEA/GETTY IMAGES

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Phoenix 102 80 s 105 82 s Hong Kong 91 81 pc 88 78 t 52 Egg: Prefix 13 Take one’s leave 54 Not busy Anchorage 64 50 pc 62 50 s Pittsburgh 90 71 s 84 68 t Istanbul 86 71 s 80 71 t perhaps 33 Just between 55 Touched gently 18 Dress for a 56 Emerald City Atlanta 89 74 pc 89 72 pc Portland, Maine 81 68 pc 86 55 t Jakarta 92 75 pc 91 76 pc 11 Consist of us? Bengali bride Austin 92 73 t 91 72 t Portland, Ore. 89 59 s 85 57 pc Jerusalem 87 67 s 83 65 s 59 High roller’s roll visitor Baltimore 92 74 s 94 73 s Sacramento 88 56 s 90 58 s Johannesburg 81 55 s 82 51 pc 14 Eliciting an 34 Pastel color 60 Junk in 22 Fifth of twelve 57 Micro or macro Boise 95 64 s 94 63 s St. Louis 92 72 t 86 71 t London 70 49 c 68 46 pc “eww!” 35 Semi front signs Boston 8672pc9265t Salt Lake City 87 61 pc 87 63 pc Madrid 85 60 s 84 61 s crosswords? class Burlington 90 72 pc 78 56 pc San Francisco 70 56 pc 70 55 pc Manila 87 76 t 88 79 t 15 Act like a startled 37 Story told over 24 Harshly bright 58 YSL competitor Charlotte 90 69 t 92 72 s Santa Fe 77 52 t 74 50 t Melbourne 66 54 pc 64 43 t steed multiple episodes 62 Phoenix body Chicago 86 63 t 71 62 c Seattle 81 56 s 81 56 pc Mexico City 73 57 t 71 56 pc spray brand 26 Back in the day 60 Wander Cleveland 92 73 t 79 68 t Sioux Falls 71 50 pc 73 54 pc Milan 84 62 s 84 65 t 16 Put an end to 38 Issue forth 63 2009 Hilary 27 Spot for some (about) Dallas 90 74 t 92 72 pc Wash., D.C. 92 77 s 94 76 s Moscow 77 56 pc 77 54 s 17 Buck’s comedy Denver 7355pc7756t Mumbai 86 79 sh 86 77 sh 40 Choler Swank biopic salesmen 61 Hitchcock title Detroit 92 69 s 77 62 c International Paris 76 60 c 71 51 r routine? 41 Utterance Honolulu 88 75 pc 88 77 pc Rio de Janeiro 72 66 sh 73 64 pc 64 James Bond Previous Puzzle’s Solution Today Tomorrow 19 “Eww, stop!” accompanying a Houston 90 75 t 89 75 t Riyadh 111 81 s 110 80 s attended it City Hi Lo W Hi Lo W head slap SH I LL I VAN DRAT Indianapolis 91 72 s 85 67 t Rome 81 63 s 81 65 s 20 Old Testament 65 “___ Autumn” AUD I O L I SA R I TA Kansas City 77 68 t 75 64 t Amsterdam 73 59 sh 66 52 sh San Juan 89 78 s 88 77 pc prophet 42 Preseason airing FREEWEIGHT EPPS Las Vegas 98 79 s 100 79 s Athens 92 73 s 88 72 s Seoul 82 66 s 83 70 pc (1941 jazz ETA CRAG KARAT Little Rock 87 72 t 80 71 r Baghdad 109 76 s 110 77 s Shanghai 91 76 pc 90 75 pc 21 PTA meeting 43 “Elf” co-star standard) RANDOMMEMORY MORA L E Y E N T A Los Angeles 81 68 pc 82 68 pc Bangkok 89 77 t 91 77 pc Singapore 85 75 pc 85 77 t place 66 Go overboard, OPEN RATTY RAE Miami 88 76 pc 87 73 t Beijing 91 66 s 86 63 s Sydney 6651pc6856pc 44 Mushiness over JUDICIALHEARING Milwaukee 80 60 t 69 59 pc Berlin 75 57 pc 77 60 pc Taipei City 94 79 t 93 78 t 22 Organizational not being perhaps OSS OMI TS I NTO Minneapolis 73 54 pc 73 56 s Brussels 73 60 sh 65 51 c Tokyo 87 75 r 87 78 pc aid married? NOVAS I NAGES 67 Jumbotron STATECAP I TAL Nashville 89 73 pc 89 72 t Buenos Aires 72 53 c 75 50 s Toronto 87 67 s 75 56 pc 23 “Pagliacci” piece 48 Irrelevant HOPON ADAM END New Orleans 86 78 r 86 78 t Dubai 107 89 s 105 92 s Vancouver 72 53 pc 72 56 s inventor EXPO LOSSLEADER

New York City 87 76 s 92 71 t Dublin 64 51 c 59 44 sh Warsaw 74 56 t 74 55 pc s BIEL PITA IXNAY Oklahoma City 81 69 t 79 67 t Edinburgh 64 43 c 57 45 sh Zurich 77 54 t 76 56 t Solve this puzzle online and discuss it at WSJ.com/Puzzles. ACRE SLAY TEARS THE WALL STREET JOURNAL. Wednesday, September 5, 2018 | A15 OPINION

Detroit vs. Protectionism? BOOKSHELF | By Adam J. White “Cars are the (say South Korea, Germany or Unfortunately her claim was in any resistance to a Trump Judging big one,” China) to the U.S. and Mexico. preamble to a typically vague, impulse to turn the global car President Yet the effect would be small. noncommittal GM answer to an market upside-down. Trump told Only 27% of cars currently admirably precise question. Certainly you wouldn’t take FoxNewsin made in Mexico would be af- The question, by J.P. Mor- to the bank anything that no- The Judges July, explain- fected, and auto makers say ad- gan analyst Ryan Brinkman, is toriously obfuscatory Detroit BUSINESS ing his evolv- justing won’t be hard. Whether worth repeating: “Has there auto executives say about the WORLD ing theory of this means more U.S. jobs is been any scenario planning matter right now. The Most Dangerous Branch By Holman W. easy-to-win uncertain. Car makers might within GM that suggests that Among the blunt truths By David A. Kaplan Jenkins, Jr. trade wars. prefer just to swallow the exist- potential other changes to they are trained not to men- Whether ing 2.5% tariff that applies to trade could actually shake out tion is that they embraced (Crown, 446 pages, $30) he meant non-Nafta imports. positively for you? I know GM Naftainthefirstplacetouse cars are his leverage point to This is where those inclined Mexico to level the playing hen a Supreme Court justice’s retirement turns remake the world trade system to see method in Mr. Trump’s field with foreign transplants W American politics on its ear—as Anthony Kennedy’s according to some coherent vi- trade madness point to a pend- Don’t rule out U.S. that built their factories in the retirement did this summer—we ought to consider sion, or simply the means to ing Section 232 study by the south to avoid the United Au- whether the federal judiciary plays too large a role in our create a big show, with lots of Commerce Department, meant auto makers going tomobile Workers. Home- political life. Then again, Americans have been debating the fake drama and suspense, is an ludicrously to find that U.S. squishy for Donald grown U.S. auto makers re- Supreme Court’s power from the start. open question. national security is threatened main bound to the UAW while In 1788, a critic of the proposed Constitution, writing as But perhaps not that open: by auto-related imports, Trump’s tariffs. foreign-born ones in the U.S. “Brutus,” warned that the court would dominate Congress If one thing became clear thereby allowing Mr. Trump to enjoy a free labor market. This and the States by imposing the justices’ own “sense” of the through 14 campaign debates impose 25% duties on cars is a bigger trade distortion Constitution. “There is no power above them, to controul and two years of the Trump from Europe and Asia and pos- management stands for free than any Mr. Trump is offer- any of their decisions,” Brutus wrote. Judges would be presidency, Mr. Trump does sibly even Canada. trade, but it seems to us that ing. It’s also the cause of many “independent of the people, of the legislature, and of every not do policy details. It’s all Doing so would thoroughly certain scenarios, such as other distortions. power under heaven.” Men who are placed in this situation, just symbolism to him. disrupt global auto markets, Nafta remaining but Section For instance, the Big Three’s he added, “will generally soon feel themselves independent A victory will be declared at driving up prices for U.S. con- 232 tariffs applying to im- also-ran status in sedans is a of heaven itself.” the end of the day, of that you sumers, and only eventually ported vehicles from outside legacy of John Dingell’s “anti- Brutus’s argument canbesure. perhaps bring more auto in- the Nafta bloc, that could actu- backsliding rule” that for de- inspired a response: His underlings, however, are vestment to the U.S. A Mer- ally end up being quite posi- cades required them to build Federalist 78, the seminal obliged to give text to his im- cedes or BMW from Germany tive for you from a pricing or money-losing small cars in defense of judicial power pulses, and onlookers are might jump $10,000 in price; a share perspective?” high-cost UAW factories. The composed by Alexander obliged to try to make sense of Chevy Equinox, Dodge Caravan Exactly. Protectionism can Big Three’s continuing depen- Hamilton under the name the result. Let’s start with the or Toyota RAV4 from Canada be quite profitable for compa- dence on excess pickup profits “Publius.” The judiciary, Mexico deal. It requires that might jump $5,000. nies that benefit from it, at is a legacy of the 25% tariff on Hamilton assured, “may truly 40% to 45% of a vehicle eligible Right now, such an outcome least until they become fat and imported pickups that has be said to have neither force for no-tariff treatment under is unthinkable. Congress would lazy and fall behind their over- evolved since the 1960s into nor will, but merely judgment.” the North American Free Trade hear from dealers and car buy- seas competitors in quality Washington’s main gift to prop The court will always be, he Agreement be produced by ers and throw itself athwart Mr. and technology. up Detroit despite the many po- stated, “the least dangerous to workers making $16 or more Trump’s plan. Even the unions Mr. Trump, in Trumpian litical burdens it must bear. the political rights of the an hour. It also requires that are ambivalent. In their public fashion, has lots of balls in the So keep this history in Constitution.” 75% (up from 62.5%) of a car’s utterances, the Big Three— air, and is proceeding chaoti- mind. I wouldn’t be 100% con- Have two centuries proved content be produced within the Ford, GM and Chrysler—are cally as he did at times in his fident of Detroit turning up its Hamilton wrong? Brutus’s warnings of a U.S. or Mexico. also opposed and presumably business. He may yet decide to nose at a big offer of Trump powerful and unchecked Supreme Court may The first rule would shift mean it, presumably. go for broke. And Detroit, de- protectionism to solve all the seem apt today, as critics make similar charges in similar production of Nafta-eligible Widely quoted was GM chief spite its investment in rising headaches that continue to terms. They include David A. Kaplan, whose book bears a cars from Mexico to the U.S. Mary Barra’s apparently blan- markets like China and its at- arise from Washington’s 80- title directed squarely at Hamilton’s assurances. The second would shift pro- ket statement on a conference tachment to its global supply plus years of meddling in the In “The Most Dangerous Branch,” Mr. Kaplan has two aims: duction from third countries call that “we are free traders.” chains, could be the weak link car business. to break news with original reporting on the Supreme Court’s internal politics and to make an argument about its excessive power. “Today,” he writes, “liberals and conservatives alike blithely rely on the Court’s members to settle society’s Trump Swims Against the Tide on Trade toughest issues—at the expense of the two branches of government that are designed to be democratic.” The result, When it comes and 31 points for Republicans. antipathy to Mexico, his sup- the wisdom of conceding so he says, is “an arrogant Court and an enfeebled Congress.” to trade, it is Not surprisingly, 61% of Amer- porters may be experiencing much discretion on trade to a Mr. Kaplan, a former Newsweek legal-affairs editor, not America’s icans now believe that the U.S. whiplash when they are told president of either party. attacks recent conservative courtroom victories—e.g., allegedly clue- should join the successor to that the real bad actor is The president will face in- protecting gun rights and limiting the Justice Depart- less elites who the Trans-Pacific Partnership, America’s neighbor to the tensifying pressure to show ment’s power over redistricting—as well as Roe v. Wade, are out of the free-trade agreement from north. that his threat-based negotiat- the court’s 1972 decision creating a broad right to POLITICS touch with the which Mr. Trump withdrew Actually, China is the prob- ing style can produce more abortion. Liberal court watchers, in response to the & IDEAS American peo- early in his administration. lem. But as the Trump admin- than an escalation of protec- nomination of Brett Kavanaugh to replace Justice Kennedy, By William ple—it’s Presi- Public opinion on the North istration prepares to expand tionism on all sides. Climbing argue that Roe is a super-precedent that must be A. Galston dent Trump. American Free Trade Agree- tariffs on Chinese imports, it is down from his ill-advised deci- preserved at all cost. Mr. Kaplan, by contrast, sees Roe as The evi- ment, the current focus of dis- in danger again of outrunning sion to abandon the TPP would an “inflection point,” when justices “needlessly placed dence is clear. putes between the U.S. and its its political supply lines. Sev- relieve some of this pressure, themselves in the middle of a matter best left to the According to a Chicago Council trading partners, is more com- enty-one percent of Ameri- and he could argue that join- democratically accountable branches.” This decision, he on Global Affairs survey re- plex. During the past decade cans, including 56% of Republi- ing forces with 11 countries on says, inaugurated “the modern triumphalism of the leased last week, 82% of Amer- overall support for Nafta has cans, are concerned that a both sides of the Pacific would Court—making it the most dangerous branch and, in so icans believe trade is good for soared from 42% to 63%. The strengthen his hand in dealing doing, undermining its legitimacy.” Mr. Kaplan’s analysis the economy, 85% think it’s surge has been especially with China. calls to mind that of John Hart Ely, the liberal legal good for consumers, and 67% strong among Democrats, More Americans than Democrats now represent a scholar who noted in 1973 that Roe “is not constitutional think it’s good for creating jobs whose support increased from strongly pro-trade coalition. law and gives almost no sense of an obligation to try to in the U.S. 41% to 79%, while support ever say free exchange Their challenge is to nominate be.” Mr. Kaplan’s critique of judicial power will resonate Mr. Trump has presided among independents rose from boosts the economy a presidential candidate who with the court’s critics on both right and left, though they over, and may inadvertently 40% to 62%. For Republicans, can speak for the national ma- will disagree about which precedents should be abandoned. have sparked, the most signifi- however, the story has been and job creation. jority on this issue while offer- cant shift toward pro-trade different: 43% in 2008, 43% to- ing bold new policies to help sentiment in modern American day. As the rest of the country trade’s losers. Public policy Has the Supreme Court become too powerful, history. As recently as 2016, has abandoned its reservations trade war with China will hurt must help the victims of off- usurping the role of the government’s the Chicago Council finds, only about open trade with Mexico their local economy. Though shored jobs and depressed 59% of Americans thought and Canada, Republicans have the public cares far more wages rebuild their working democratically accountable branches? trade was good for the econ- retained theirs. about job creation than more lives and enjoy a dignified re- omy. In two years this figure Here too, the most recent choices and lower costs, 80% tirement. While Mr. Trump has risen by 23 points. Percep- trends are unmistakable—and of Americans believe expand- speaks for the past, Democrats As a work of journalism, “The Most Dangerous Branch” tions about the effect of trade startling. In just the past ing exports is best for jobs, should focus on the future. relies on an astonishing number of sources—beginning with on employment have changed year, as Mr. Trump has compared with only 17% who This orientation doesn’t the Supreme Court justices themselves. Mr. Kaplan says even more dramatically. Two ramped up his attack, overall think that restricting imports preclude—indeed, it must in- that he conducted “interviews with a majority of the years ago, 40% of Americans public support for Nafta has is the way to go. clude—firm opposition to current justices; past justices; 65 law clerks who worked at thought trade was good for job risen by a broadly based 10 Republicans are split on China’s policies on forced tech- the Supreme Court” and myriad others. Unfortunately, he creation. Today, this figure is points—8 points among Dem- trade. Although Mr. Trump’s nology transfer. Democrats notes, “virtually all” of his interviews were given “on an astounding 27 points ocrats, 9 for Republicans, 11 working-class base supports should emphasize the incom- background,” meaning that he can give no specific evidence higher. for independents. his tough approach, the rest of patibility between state-subsi- for a host of eyebrow-raising allegations, including his The president and his ad- Mr. Trump should think the party doesn’t. After the dized Chinese enterprises and claim that Chief Justice John Roberts directed his clerks to visers might be interested to again, moreover, about focus- November election, Republican the assumptions built into the draft two different opinions in the 2012 constitutional learn that this shift of opinion ing his ire on Canada. Accord- officeholders will face a deci- World Trade Organization, and challenge to ObamaCare before choosing, eventually, to has been broad-based. While ing to the Pew Research Cen- sion: Stand up to Mr. Trump or they should form the widest affirm the statute’s “individual mandate” as a tax. He also positive sentiment about the ter, 67% of Americans harbor concede and allow themselves possible coalition with U.S. al- reports (without sourcing) that Justice Ruth Bader effects of trade on the econ- warm feelings toward Canada, to be branded the antitrade lies in Europe, Asia and the Ginsburg, whose election-year denunciations of candidate omy rose 16 points among including 59% of his own party. Pro-trade Republicans Americas to challenge China’s Donald Trump drew criticism even from her supporters, Democrats, it increased 25 party. After he spent more should join forces with Demo- abuses. Going it alone on trade consoled her clerks after the election by assuring them that points among independents than three years whipping up crats, who have come to doubt won’t work. “we’ll try again in four years.” But here Mr. Kaplan’s bipartisan approach ends abruptly. He is routinely negative about the court’s conservatives— especially Neil Gorsuch, who replaced Antonin Scalia in ABetterWaytoPrepareforWarinKorea 2017. The author paints him as so “insufferable” during oral argument that the other justices, except Clarence Thomas, By Michael O’Hanlon There is an alternative. exercises at the Joint Readi- and to help commanders grap- “couldn’t stand him most of the time.” Meanwhile, Justices Through the U.S.-South Korean ness Training Center in Louisi- ple with the sheer scale of an Alito and Thomas “seethed to their law clerks” about efense Secretary Jim Combined Forces Command, ana or the National Training actual war. Justice Roberts’s shift in his approach to ObamaCare. D Mattis has suggested headed by Gen. Vincent Brooks Center in California. Navy bat- But big exercises have to be By contrast, the liberal justices generally shine in Mr. that the major annual in Seoul, the allies could de- tle groups typically exercise choreographed carefully to keep Kaplan’s account. His clear favorite is Stephen Breyer, U.S.-South Korea military exer- velop a new plan for smaller with several surface ships or to schedule. Because so many whose “earnest pragmatism” predisposes him “to seek cises—suspended this year to but more numerous exercises, submarines, each with crew of people are involved, major dis- consensus.” Similarly, Democratic presidents, in Mr. facilitate negotiations with unrelated to the nuclear nego- 100 to 300, plus shore-based ruptions to plans cannot be al- Kaplan’s reckoning, see the act of choosing a court nominee North Korea—may resume. tiations. They should be de- personnel— still no more than lowed. That means huge exer- as a “nuanced” responsibility not dominated by politics— The biggest are “Foal Eagle,” a signed to practice the same thousands, even if an aircraft cises cannot really be used to supposedly unlike their Republican counterparts. And, Mr. springtime exercise with more combat capabilities as the ear- carrier and air wing are in- test commanders’ capacity for Kaplan adds, Senate Democrats, unlike Republicans, have no than 10,000 U.S. troops plus lier large exercises. volved. Marines often train, handling big surprises. Smaller “stomach for [nomination] death matches.” over 300,000 South Koreans, and deploy, as Marine Expedi- exercises, by contrast, can allow The political lens through which Mr. Kaplan surveys the and “Ulchi Freedom Guardian,” tionary Units with some 2,000 enough leeway to require real scene not only undermines his account of the court; it which typically includes some Scrap the big annual uniformed personnel in all. problem solving. undermines his treatment of court opinions, too. Criticizing 20,000 Americans and 50,000 exercises and conduct The Air Force (and air units of Smaller exercises already Shelby County v. Holder, for example—in which the court South Koreans. other services) typically will occur today. We don’t talk declared unconstitutional Congress’s latest iteration of the The Pentagon and President frequent smaller ones. conduct big exercises at the about them much, so North Voting Rights Act—he complains that the opinion lacked “a Trump have both subsequently squadron or wing level, with Korea is unperturbed. By ex- constitutional anchor. It certainly wasn’t in the Fifteenth played down the idea of re- up to a few dozen aircraft— panding small exercises rather Amendment.” But the 15th Amendment, which empowers suming exercises. But Mr. Mat- A series of smaller but more meaning dozens or hundreds than resuming big ones, the Congress to protect the right to vote through “appropriate tis’s concerns are valid. Allies frequent exercises could actu- of people in the air and hun- U.S. and South Korea can do legislation,” was precisely what the court’s opinion rested need to practice together to be ally be better for combat pre- dreds or thousands in support better at simulating the fog of on. Such tendentiousness is unfortunate, since it may ready for war and thereby en- paredness. Consider how U.S. on the ground. war while also staying under weaken the force of Mr. Kaplan’s critique of judicial sure deterrence. forces train at home. They begin Why then the big exercises the metaphorical radar when supremacy, much needed in an era when judges’ role in our On the other hand, Mr. small and work up to exercises in Korea? One reason is sym- doing so. For military as well politics and culture is so heavily felt. Like today’s Supreme Trump has called the large ex- involving hundreds or thou- bolic—to demonstrate the alli- as diplomatic reasons, that is Court, “The Most Dangerous Branch” too often shows a lack ercises “provocative,” echoing sands of troops—but almost ance’s solidarity and capability. probably the way to go. of self-restraint that undermines its credibility. Pyongyang’s rhetoric. A re- never tens of thousands. Another is to simulate the large sumption could heighten ten- Army forces culminate their personnel movements of a mas- Mr. O’Hanlon is a senior fel- Mr. White is a research fellow at the Hoover Institution and sions on the peninsula. training cycles in brigade-level sive reinforcement operation, low at the Brookings Institution. an assistant professor of law at George Mason University. A16 | Wednesday, September 5, 2018 THE WALL STREET JOURNAL. OPINION

REVIEW & OUTLOOK LETTERS TO THE EDITOR The Kavanaugh Histrionics Light and Darkness and Young Adult Books xpectations were low for Brett Ka- were relevant to her legal views. Regarding Steve Salerno’s “The Un- only better. Children won’t be told vanaugh’s confirmation hearing, and Jeff Sessions, a GOP Senator at the time, bearable Darkness of Young Adult Lit- what not to read; ask my generation E erature” (op-ed, Aug. 29): As a mid- who passed around stolen copies of Senate Democrats on Tuesday wasted no asked Ms. Kagan during her 2010 hearing about dle-school librarian, I don’t under- their parents’ “The Shining.” time meeting them. We can’t the need for such privilege. stand Mr. Salerno’s criticism of the CHRISTIAN DURSO tell if they’re going through Senate Democrats turn She agreed that such docu- darker offerings in recent young adult Los Angeles the histrionic motions or if the hearing into a ments “ought not to be pro- (YA) literature. A certain subset of they might actually try to duced” since it would under- young adults has always been at- YA literature doesn’t showcase all block a confirmation vote. presidential campaign. mine the “confidentiality” tracted to books about social diffi- things dark and dreadful. While these Judiciary Chairman Chuck necessary for “effective deci- culty, just as adults enjoy reading books take on tough topics like mental Grassley couldn’t finish his sion-making.” about characters struggling through illness, racial bias and police brutality, first sentence before California Democrat Ka- Once they got past this procedural tantrum, trauma and adversity. cultural expectations and burgeoning mala Harris interrupted to demand a hearing de- Democrats used their opening statements to Certainly these books aren’t to sexuality, they show teens that being lay. Democrats continued to speak over the take shots at Judge Kavanaugh’s integrity. Ms. blame for the uptick in depressed and who they are means being part of a Chairman even after they were ruled out of or- Harris (#KamalaIn2020) derided him as a parti- suicidal teens. Rather it is our alienat- culture that is highly politicized, ing society, the increased sense of iso- highly divided, and charged with find- der to the jeers of protestors who had to be re- san who would not be loyal “to the people of the lation and cyberbullying due to smart- ing commonalities, connections and moved from the hearing room. Democrats inter- United States.” Is he a traitor? Several Senators phones and social media, and our places to come together and make rupted 44 times in the first hour, part of what claimed Donald Trump chose Judge Kavanaugh culture’s ever-widening income dis- change. NBC reported as a “plotted, coordinated strat- to protect the President from indictment or im- parity that place more children at risk. These books don’t showcase egy” organized by Minority Leader Chuck peachment or something. Never mind that Judge As a school librarian, I offer stu- “anomalies and unorthodoxies.” They Schumer over the weekend. Kavanaugh has written opinions that are skepti- dents the books they want to read, showcase the world as it is. Teachers The main charge is that Mr. Grassley is “deny- cal of unchecked presidential power. and as long as certain students are in- who are brave enough to teach these ing” crucial documents to “hide” Judge Ka- Democrats portray Mr. Kavanaugh as some terested in these books and find them books are doing today’s students the vanaugh’s record. The Senators are ignoring the Trumpian legal gargoyle, but he’s the epitome cathartic, our school library will con- utmost in service. 307 opinions he has written, and the 17,000 of a mainstream legal conservative that any GOP tinue to offer them along with the Teens know the world they live in. pages of material he provided in response to the President would have had on his short list. Some “Harry Potter,” “Twilight” and “The They also know how it could be if Hunger Games” series, and any other their differences and wide, rich range committee’s questionnaire—the most extensive 97% of the opinions and orders that Judge Ka- trend. Our vocation is to develop life- of experiences were acknowledged ever demanded of a nominee. The Senators have vanaugh took part in over 12 years on the federal long readers. Adults who identify as and celebrated. They want to escape already received more than half a million pages bench were unanimous. He was in the majority readers vote at higher rates and are into books that allow them to be the about his time as a lawyer and judge—more doc- 98% of the time. more involved in their communities. people who spark change. These uments than were provided for the past five Su- Of his 62 dissents, the Supreme Court has ad- SARA STEVENSON books offer them hope and power by preme Court nominees combined. opted his legal reasoning in at least nine cases— Austin, Texas simply telling them their aches, pains Democrats haven’t found a killer issue in all an extraordinary number for an appellate judge. and injustices are real, but that they of this, so they are demanding documents from He’s a center-right version of his colleague on Having been a crisis counselor to can stand up and make things better. Judge Kavanaugh’s time as a staff secretary in the federal bench, Merrick Garland, whom Dem- hundreds of teens, I can assure Mr. Sa- YA literature isn’t the darkness. It’s the Bush White House. The documents would re- ocrats continue to laud as an ideal Justice. lerno that no one calls in with a con- the light. cern over what book they just read. KELLY JENSEN veal little about Judge Kavanaugh’s legal think- The political question is whether this is all for The darkness and depravity he finds Woodstock, Ill. ing, since as staff secretary his job was to vet and show, or are Democrats willful enough to use questionable in the novels presented monitor what President Bush saw each day. Senate rules to block the nomination from pro- at June’s YA lit summit are better Political correctness claims penulti- Most of these documents are privileged, and ceeding to a vote? They could do so for a while viewed as educational escapes, rather mate authority as the champion of for good reason. They represent high-level delib- if they stage a walkout, and Tuesday’s melo- than instruction manuals. The act of victims of injustice. Isn’t it ironic that erations that require honest advice. When Dem- drama suggests they might be up for such a self- reading increases the muscle of empa- it makes victims of those who are ocrat Pat Leahy ran the Judiciary Committee, he defeating gesture. About half of the Democrats thy—the real tool young adults need shaped by its precepts? didn’t even ask the Obama White House to pro- on Judiciary are running for President, but have to navigate the world. That these SHANNON VOWELL vide documents from Elena Kagan’s tenure at the they consulted their Senate colleagues running books are socially relevant makes it Frisco, Texas Solicitor General’s office, though they surely for re-election this year? Burma’s Ethnic Cleansers Lack of an Opposition Helped Sink Venezuela Regarding Daniel Pipes’s “Venezu- cluded left-wing parties such as the Burmese court on Monday sentenced neighboring Bangladesh. The U.N. investigators ela’s Tyranny of Bad Ideas” (op-ed, Communist Party of Venezuela and A Reuters reporters Wa Lone and Kyaw Soe accused the military’s top generals of directing Aug. 27): The problem with Venezuela extreme right-wing parties like the Oo to seven years in prison. The two were the ethnic cleansing, including the use of mass hasn’t been the left-wing views held Cruzada Cívica Nacionalista, for the victims last December of a far- rape. They recommended by the government per se, but stems purpose of getting rid of President cical set-up by the police, who Two brave reporters go charging six officers with from a lack of accountability that has Chávez. The Mesa de la Unidad handed them supposedly se- to prison for exposing genocide at the International allowed the government to pursue Democrática (MUD) didn’t offer a cret documents and arrested Criminal Court or a special policies that have led to economic di- clear, acceptable alternative to the saster. The 1998 presidential election chavista electorate, which is made up them. Police Captain Moe Yan murder and rape. tribunal. was won by Hugo Chávez in a fair and mainly by the poor and dispossessed Naing admitted during the trial China has signaled that it democratic way. However, the main of the country, who depend critically that his superior ordered him will shield Burma’s generals political problem with the chavista on government handouts such as free to entrap the journalists; he was sentenced to a from prosecution. “Unilateral accusation or administration is that it has never food baskets and a free health service. year in prison for breaking police discipline. pressure will not help to solve the problem,” faced a strong political opposition Without a clear, attractive alternative Burma’s military-dominated government rail- Chinese Foreign Ministry spokeswoman Hua that countered its left-wing rhetoric the chavistas were unwilling to cut roaded the Reuters journalists because they ex- Chunying said last week. with sensible free-market economic the hand that fed them. posed the army’s persecution of ethnic Rohingya But the international nature of Burma’s per- policies and beneficial to all the popu- The Venezuelan case illustrates Muslims. They tracked down a mass grave with secution of the Rohingya demands an interna- lation of the country. perfectly that the democratic process the bodies of 10 civilians in the village of Inn Din, tional response. The generals refuse to allow The traditional parties that had suffers without the proper checks and and Reuters published photos of the victims in the Rohingya to return home and guarantee governed the country since the fall of balances of a strong opposition, to the military dictator Gen. Marcos the detriment of the well-being of a army custody with their hands bound shortly be- their safety, so they continue to suffer appalling Pérez Jiménez in 1958 were a busted country. fore they were killed. The authorities grudgingly conditions in camps in Bangladesh. Aung San flush at the time of the 1998 election. BRIAN MCBETH, D.PHIL. acknowledged the killing and sentenced seven Suu Kyi, the pro-democracy icon whose party It took some considerable time for a Oxford University soldiers to prison with hard labor, but they insist won 86% of the seats in parliament in the 2015 rainbow coalition to emerge that in- Oxford, U.K. the victims were terrorists. election, has defended the military and denied Burma’s government clearly wants to deter access to international investigators and pro- other journalists from similar reporting. Satel- viders of humanitarian aid. This Millennial Scapegoat Still Has Hope lite photos show the military burned hundreds The U.S., the U.N. and other governments are of Rohingya villages. According to a report last calling for the release of Wa Lone and Kyaw Soe Regarding Nicole Ault’s “Don’t and we had to struggle through a week by a United Nations fact-finding mission, Oo. Burma’s use of a transparently unjust trial Trust Anyone Over 21” (op-ed, Aug. painstakingly slow recovery. We are troops and local authorities killed about 10,000 shows that the generals fear the media’s power 23): As a millennial I feel compelled in debt because it was pounded into to defend my generation. Despite us to go to college and get a degree Rohingya and drove more than 700,000 into to expose their ethnic-cleansing campaign. the fact that millennials acquired (any degree) and to not be failures. the nasty reputation of being “self- Heaven forbid we go to trade school. ish sloths,” it should be known that It’s true a lot of us stayed home Trump’s Syria Moment we are a product of our environ- with parents longer than might be ment and didn’t come out of the expected, but thanks to the present hat happens in Syria rarely stays One problem is that it lets Iran turn Syria womb the way we are now. economy we are getting better jobs, there, as Barack Obama learned the into another forward operating base on Israel’s We lived through the Great Reces- managing our debt and getting on W sion while we were in school (with track with our careers. There is still hard way and Donald Trump is now border. National Security Adviser John Bolton discovering. Bashar Assad’s has been demanding that Iran all due respect, Generation Z has the time to regroup and make a differ- forces and his Iranian and The looming massacre leave Syria, and seeking Rus- fortune of graduating during the ence. The oldest of us is only 37. Trump economy), and when we came NICHOLAS MATARANGAS Russian allies are preparing sia’s help in the effort. But in Idlib shows the out, there were no jobs to be found Philadelphia an assault on Idlib province, Iran and Russia respond to the last major opposition re- lack of U.S. leverage. power, not pleading, and doubt, and the attack is put- they’ve heard Mr. Trump an- In Praise of the Formerly Richard Trumka Now Has ting Mr. Trump’s lack of a nounce many times that he Syria strategy in sharp relief. wants out of Syria. Popular Larger Family Jobs Challenge in Missouri The White House issued a statement Tues- Meanwhile, Turkey, Russia and Iran are Congratulations on Mark Oppen- Regarding Richard Trumka’s day warning against “a reckless escalation of meeting later this week in Tehran to decide heimer’s wonderful “Yes, We Really “Unions Triumph at the Ballot Box” an already tragic conflict.” The press secretary on their next steps in Syria. The Turks want Do Want to Have a Fifth Child” (Re- (op-ed, Aug. 9) and the letters of Aug. also warned against another use of chemical a buffer zone in the north from refugees, as view, Aug. 25). Have as many as you 22 in reply: Now that union power weapons, while the Chairman of the Joint well as some assurance that Kurdish separat- can care for and love. has defeated the right-to-work law in With so much propaganda in the Missouri, how many jobs will Mr. Chiefs, Marine Gen. Joseph Dunford, worried ists won’t be allowed to operate from Syria. past 40 years against having children Trumka bring there? about a “humanitarian catastrophe” in Idlib. Russia wants to be seen as having assured the (such as they befoul the environment, JOHN WITMER “We don’t see any way that significant military victory of its client, Mr. Assad, while retaining interfere with our self-pleasure and Purcellville, Va. operations are going to be beneficial to the peo- air and naval bases. Iran wants to be Mr. are a blight on the planet), it is re- ple of Syria,” Gen. Dunford said. Assad’s puppet-master. freshing to read of a father who This is all well meaning, but it’s the kind of Mr. Obama left Mr. Trump with a mess in wants a large family, for all the right Pepper ... diplomatic pleading that John Kerry and Mr. Syria, but in 20 months the President has done reasons he cites. And Salt Obama were famous for in Syria, and we know little to alter the balance of forces. Mr. Trump If those who are capable of caring how that worked. Amid these U.S. entreaties, seems content to issue tweets about Idlib, but for children and are married in stable THE WALL STREET JOURNAL Russia began air strikes around Idlib on Tues- Mr. Assad and his allies won’t stop there. Their families don’t replace themselves, our day and a Kremlin spokesman promised to fin- next target will be the Kurds and Syrian Demo- country will be the weaker. And ku- dos to Mr. Oppenheimer for wishing ish the job “unconditionally.” cratic Forces (SDF), America’s main ground to help replace his fellow Jews, mil- Mr. Trump has dined out politically on his partners, who are working with U.S. special lions of whom were destroyed during two air strikes responding to Mr. Assad’s use forces in Syria east of the Euphrates River. his parents’ lifetime. of chemical weapons, but those pinprick attacks The danger is that the Kurds and SDF will be- It was a welcome relief to read an didn’t change the underlying reality in the con- gin to negotiate a cease-fire to save themselves essay by a person whose values are flict: Mr. Assad, Russia and Iran are on their from becoming the next Idlib. Then U.S. forces intact and whose family is growing. way to controlling Syria in the post-civil war, would be isolated in Syria and a withdrawal EILEEN POLLOCK post-Islamic State era. This axis of opportunism would be inevitable. Iran will own the place, de- Baltimore allowed the U.S. and Kurds to roll up ISIS in spite Mr. Trump’s speeches about containing its Syria’s northeast while the axis focused on wip- regional aggression. Letters intended for publication should ing out opposition strongholds. The U.S. needs to reassure the Kurds and SDF be addressed to: The Editor, 1211 Avenue of the Americas, New York, NY 10036, Mr. Trump’s impulse has been to withdraw that it will protect them if they’re attacked or emailed to [email protected]. Please U.S. troops from Syria once its stronghold in while working out a longer-term strategy that include your city and state. All letters Raqqa was liberated, but he is slowly figuring raises the price for Iranian intervention. An are subject to editing, and unpublished “Sure, we could just print out out that this has damaging strategic conse- Obama-style retreat from Syria will not end letters can be neither acknowledged nor the specials, but the chef doesn’t returned. quences for U.S. interests. well for U.S. interests. want to leave a paper trail.” THE WALL STREET JOURNAL. Wednesday, September 5, 2018 | A17 OPINION Media Guilt by Russian Association

By Charles G. Boyd is an odd candidate for media on- Russians are “typically, almost geneti- And Dimitri K. Simes slaught: We’re a nonpartisan foreign- cally driven to co-opt, penetrate, gain policy research institute with a bipar- favor.” This newspaper’s Kimberley very time President Trump tisan board of directors, including Strassel has reported an attempt by a writes off the mainstream former national-security officials from Democratic Senate staffer to question media as “fake news,” both parties and retired senior mili- a witness about contacts with any E members of the press are tary officers. No member of the cen- people the witness had “reason to be- befuddled by how many ter’s board or management endorsed lieve are of Russian nationality or de- Americans seem to agree. Yet we at Mr. Trump’s candidacy, and some scent”—making Russian ancestry a the Center for the National Interest publicly opposed it, contributing mil- basis for investigation. have been unable to ignore the me- lions to anti-Trump political-action Similarly, journalists have re- dia’s widespread bias since April committees. The month after Mr. peatedly characterized one of us, 2016, when our magazine, the Na- Trump’s speech we presented an Dimitri Simes, as “Russian-born,” tional Interest, hosted Mr. Trump’s award to Sen. Tim Kaine, who later even though he came to the U.S. 45 first foreign-policy speech. Since became Hillary Clinton’s running years ago as a political refugee and then we have faced relentless biased mate. A broad range of officials have has been an American citizen for attacks from supposedly objective praised our work publicly, including nearly four decades. It is an act of media outlets. Defense Secretary Jim Mattis and stunning hypocrisy that some jour- President Obama’s national security nalists denounce Mr. Trump’s anti- adviser Susan Rice. The center hosted immigrant rhetoric but display On the hunt for ‘collusion,’ Mr. Trump’s speech as a public ser- their own offensive bias toward

vice, not a political statement. © AL DRAGO/CONGRESSIONAL QUARTERLY/NEWSCOMmillions VIA ZUMA PRESS of Americans of Russian journalists attack our Unlike some other think tanks, the Candidate Donald Trump at the Center for the National Interest, April 27, 2016. origin, including Jewish refugees think tank and others center doesn’t employ Russian citi- from communism. zens, take money from Russia, or with the U.S. would suffer if Moscow have been targets of similarly base- In their coverage of Mr. Trump for engaging in dialogue. maintain an office there. Nor do we didn’t address its election interfer- less attacks on their Russia-related and Russia, far too many in the me- issue joint statements with Russian ence. Confident that these meetings programming, as have some promi- dia have developed a sense of mis- institutions or experts. Rather, we are justified and highly important, nent philanthropic foundations that sion that goes well beyond pursuit of Mr. Trump is wrong to call the work to advance the commitment of we refuse to change course. support such work. But because the facts, lacking any sense of re- mainstream media “the enemy of the our founder, Richard Nixon, to dia- Media outlets like Bloomberg, the none of these institutions have also sponsibility for the wider conse- people.” Yet it’s true that many in logue among major powers—includ- Daily Beast and Newsweek continue hosted Mr. Trump, and some are led quences of their zealous search for the media have cavalierly abandoned ing with U.S. adversaries like Russia. to portray the center’s dialogue with by Democrats or perceived as lib- collusion. This approach to journal- traditional journalistic standards We do this not because we believe Russia as strange and even sinister. eral-leaning, they receive much less ism diminishes the American values when covering him and anything re- Russia is likely to become America’s Notwithstanding the small scope of attention. of tolerance and the presumption of lated to him. For example, Bloomberg friend, but because, like Nixon and our interaction with the Trump cam- The McCarthyism of today’s politi- innocence. reporters implied that the center’s Ronald Reagan—in whose adminis- paign, the Trump-Russia nexus cal climate is further evidenced by Such journalists likewise ignore invitation of Russian diplomat Sergey tration many on our board and staff seems irresistible to reporters and the way Republican senators who the danger of stoking hatred for Kislyak to attend the Trump held senior positions—we believe di- tempts them to imagine conspiracies. visited Moscow in July were derided America’s adversaries. George Wash- speech—among two dozen other for- plomacy is an essential complement Thus journalists have smeared our by a Democratic candidate for office ington warned against this propheti- eign ambassadors—was unusual or to strength in achieving U.S. foreign- board members whose companies in- as having traveled “to meet with cally when he wrote that “the nation, inappropriate. Other journalists have policy objectives. vest in Russia—something that is their most important constituents.” prompted by ill-will and resentment, attacked the center over reports that In the center’s case, this dialogue neither rare nor inappropriate—and Foreign-policy experts have been ac- sometimes impels to war the govern- a former Reagan-administration offi- includes meeting with Russian offi- insinuated that our honorary chair- cused of repeating Kremlin propa- ment, contrary to the best calcula- cial on the center’s board contributed cials, opposition figures and experts, man, Henry Kissinger, is a “confi- ganda merely for suggesting that the tions of policy.” It’s something we to Mr. Trump’s speech—another rou- as well as appearing in Western and dant” of Vladimir Putin simply be- U.S. should consider Russia’s nuclear can’t afford to forget in dealing with tine function for Washington think Russian media outlets to discuss pol- cause the two men have met a arsenal in formulating policy toward America’s greatest nuclear rival. tanks. Whether this bias results from icy issues. When we meet Russian of- number times across the decades Mr. Moscow. carelessness or hostility, the conse- ficials, or anyone else in Russia, we Putin has been in power. Suspicion toward people of Russian Mr. Boyd is a retired U.S. Air quences are the same: The trend is a explain the facts as we see them. In The Carnegie Endowment for In- origin is also widespread. Former Di- Force general and chairman of the threat to America’s democracy and conversations in Moscow last fall, we ternational Peace and the Woodrow rector of National Intelligence James board of the Center for the National national security. told senior officials including Foreign Wilson International Center for Schol- Clapper, one of Mr. Trump’s principal Interest. Mr. Simes is the center’s The Center for the National Interest Minister Sergei Lavrov that relations ars and its respected Kennan Institute critics, stated on national TV that president and CEO. Rubio’s Family-Leave Benefit Will Go the Way of All Entitlements By John F. Cogan acquiesces and additional “worthy” extend aid to large segments of the For more than 200 years, no enti- this expenditure later with reduc- claimants are allowed to join the ben- population who are not on cash wel- tlement program has been immune tions in future federal spending (on en. Marco Rubio has introduced efit rolls. fare and in some cases above the from the expansionary pressures Social Security benefits). Through S legislation to establish a mod- The broadening of eligibility rules poverty line. Medicaid assists 25% of that inexorably drive entitlement lib- the years there have been countless est federally funded family- brings yet another group of claim- the nonelderly population. Food eralizations, and there is no earthly proposals promising future entitle- leave program. Mr. Rubio proposes to ants closer to the boundaries of eli- stamps pay a major part of the gro- reason to think Mr. Rubio’s plan will ment benefit reductions while failing finance the benefit by requiring re- gibility, and the pressure to relax cery bills for 14% of the nonelderly prove the exception. to deliver them. “Spend now, pay cipients to forgo their first three to qualifying rules begins all over population. Once family leave benefits are en- later” is a well-traveled congressio- six months’ Social Security checks. again. The process of liberalization acted into law, pressure will mount nal path that has brought the coun- Mr. Rubio’s well-intentioned plan be- repeats itself until the entitlement on Congress to increase the amount try massive federal budget deficits gins by promising a small, carefully program reaches a point where its From Civil War pensions of assistance and add other equally and a staggering national debt. Mr. targeted benefit and assuring us that original noble goals are no longer worthy activities—job search during Rubio’s plan will be no different. it won’t add to the long-run public recognizable. to Medicare and Medicaid, a spell of unemployment, caring for a Congress will find some reason to debt. But history demonstrates that The two major 19th-century enti- they always start modest, sick family member, helping one’s restore benefits, as it has so often in is how costly entitlement programs tlement programs—Revolutionary children attend college, putting a the past with entitlements. begin. War and Civil War disability pen- then bust the budget. down payment on a house. Pressure Instead of creating a new entitle- The pattern of expansion is re- sions—followed this pattern. Eligibil- will also mount to raise the $70,000 ment program for a benefit the fed- markably common. New programs ity in both programs was initially annual family income eligibility limit eral government has no business initially target benefits to a group of limited to soldiers and sailors who Even Social Security followed this in his current proposal. Advocates for providing, Congress should let fam- individuals deemed particularly wor- were injured during wartime service. expansionary path. The promise of expansion will argue first that it’s un- ily-leave benefits be the concern of thy at the time. Eventually the ex- Both programs eventually grew into the 1935 program was simply to fair to exclude families making private employers, who are perfectly cluded come forth to assert that universal service entitlements that provide a measure of economic se- $70,500—then $71,500 and $80,000 capable of providing them. Mr. Ru- they are no less worthy of aid and provided benefits to virtually all vet- curity against poverty in old age. As and so on. Congress will acquiesce to bio surely doesn’t intend it, but his pressure lawmakers to relax eligibil- erans of those wars at extraordinary Congress increased monthly bene- these pressures, and Mr. Rubio’s well- plan would move the federal govern- ity rules. cost to the nation. fits over the years and added Medi- meaning proposal will become a large ment further down the path to na- This ever-present pressure has In modern times, the Medicaid care, the two programs together and costly entitlement program. As tional insolvency. been magnified during periods of bud- and food-stamp programs followed a came to provide middle-income re- these expansions occur and the cost get surpluses, during periods of eco- similar path. These programs were tirees with a generous benefit. The grows, so will the national debt. Mr. Cogan is a fellow at Stanford nomic distress since the Depression, originally limited to providing health typical married couple that retires Stripped to its barest essentials, University’s Hoover Institution and and by the imperative of lawmakers and nutrition assistance, respec- this year will receive benefits that Mr. Rubio’s plan proposes to spend author of “The High Cost of Good In- and presidents to be elected and re- tively, mainly to supplement welfare annually cost taxpayers more than federal funds now (on family leave tentions: A History of Federal Enti- elected. Eventually, the government cash assistance. Both programs now $50,000. benefits) while promising to pay for tlement Programs.” Guatemala’s President Defends Democracy Against the U.N. By Mary Anastasia O’Grady On Monday CICIG’s top prosecu- transgressions against innocent Gua- that to complain about the illegal can conduct a full investigation into tor, Colombian Iván Velásquez, flew temalans. He also seems to have methods of CICIG is to risk public what looks like collusion between uatemalan President Jimmy to Washington, though he didn’t re- State Department sympathizers. condemnation as a friend of the Russia and CICIG. G Morales announced Friday that veal why and has no public events Mr. Morales’s detractors charge corrupt—or even investigation and Another egregious CICIG case is the agreement his country has scheduled. His spokesman said the that he fired Mr. Velásquez to protect preventive detention. Shady busi- the jailing of Max Quirin, a well-re- with the United Nations Commission trip had been planned for a while. himself. CICIG has been investigating nessmen, politicians, notorious spected Guatemalan businessman Against Impunity in Guatemala won’t It wouldn’t be the first time the the president and alleges that he was thugs and especially judges seem to who has been denied the presump- be renewed. The commission—known prosecutor went north on a secret the beneficiary of illegal campaign fi- be given a pass so long as they em- tion of innocence and has been in by its Spanish acronym, CICIG—has mission. nancing. He denies wrongdoing and brace Mr. Velásquez’s agenda or captivity since May 2015. At his trial, one year to tie up its work and, by The U.S. Congress pays a substan- enjoys immunity as long as he holds stay out of his way. In other words, CICIG was unable to present evi- Sept. 3, 2019, leave the country. tial part of CICIG’s budget, but Mr. office. Mr. Velásquez has been work- CICIG’s administration of justice dence of any crime yet Mr. Quirin has Mr. Morales sent a letter to the Velásquez has refused to answer ing to lift that immunity. has been selective. repeatedly has been denied bail or U.N. secretary-general advising him questions at congressional hearings Mr. Velásquez might successfully even house arrest. of the decision. In a press conference or in any public forum. Instead he defend his commission if the stand- The international left has cheered Mr. Morales said that CICIG should meets behind closed doors on Capitol off with the president were the only He booted the Commission the murky influence and capricious- immediately begin transferring its Hill, where he can control the narra- disputed issue. But under his leader- ness of CICIG because it strong-arms responsibilities to “corresponding tive in front of an audience—both ship there is strong evidence that Against Impunity, which and silences ideological opponents of [Guatemalan] entities,” mainly the left and right—that is unfamiliar CICIG routinely flouts the rule of law has jailed innocents while socialism. In CICIG, socialists inside attorney general. with or doesn’t care about CICIG’s and tramples civil liberties in viola- and outside the U.N. believed they tion of the Guatemalan constitution. promoting socialism. had found a model they could plop His methods can’t be supported by a down all over the developing world republic that pledges allegiance to to weaken advocates of center-right PUBLISHED SINCE 1889 BY DOW JONES & COMPANY transparency and human rights. Guatemalans have been afraid to ideas and empower collectivism, all Rupert Murdoch Robert Thomson CICIG was born in 2006 and began speak out. But that changed when under the pretense of fighting cor- Executive Chairman, News Corp Chief Executive Officer, News Corp its work in 2007. It was supposed to William Browder, a victim of Vladi- ruption. Rumors abound that the Matt Murray William Lewis Editor in Chief Chief Executive Officer and Publisher investigate criminal networks oper- mir Putin’s global vengeance, de- Constitutional Court, an ally of Mr. ating inside state institutions under fended the Bitkov family. The Bitkovs Karen Miller Pensiero, Managing Editor DOW JONES MANAGEMENT: Velásquez, is getting ready to declare Ramin Beheshti, Chief Technology Officer; a temporary mandate. U.S. and Euro- had fled Russia to escape Mr. Putin’s the president’s decision illegal. That Jason Anders, Chief News Editor; Mark Musgrave, Chief People Officer; Thorold Barker, Europe; Elena Cherney, Coverage pean Union support gave it enor- clutches but fell into the snare of hu- would explain why, on Tuesday, Mr. Edward Roussel, Chief Innovation Officer; Planning; Andrew Dowell, Asia; Neal Lipschutz, mous clout, and Guatemalans wel- man traffickers in Guatemala. Putin Anna Sedgley, Chief Operating Officer; Morales announced that Mr. Ve- Standards; Alex Martin, Writing; Christina Van Tassell, Chief Financial Officer comed the idea of outside help to henchmen followed the family to lásquez will not be allowed back in Michael W. Miller, Features & Weekend; Shazna Nessa, Visuals; Rajiv Pant, Product & OPERATING EXECUTIVES: defeat corruption. Central America and enlisted the the country. Technology; Ann Podd, News Production; Kenneth Breen, Commercial; But over the years CICIG expanded help of CICIG to jail them. Mr. Morales’s decision to order Matthew Rose, Enterprise; Jason P. Conti, General Counsel; its authority to advance the politics In April congressional hearings, army jeeps to the street in front of Michael Siconolfi, Investigations; Tracy Corrigan, Chief Strategy Officer; Nikki Waller, Live Journalism; Frank Filippo, Print Products & Services; of the extreme left, which seeks to Americans learned for the first time CICIG offices on Friday morning was Stephen Wisnefski, Professional News; Steve Grycuk, Customer Service; consolidate power by gaining control about Mr. Velásquez’s extralegal unnecessary and counterproductive. Carla Zanoni, Audience & Analytics Kristin Heitmann, Chief Commercial Officer; of institutions. It’s the same strategy prosecution of the Bitkovs. CICIG His critics immediately accused him Nancy McNeill, Corporate Sales; Gerard Baker, Editor at Large Josh Stinchcomb, Advertising Sales; employed by the late Venezuelan dic- had even thrown 3-year-old Vladi- of intimidation and of militarizing the Paul A. Gigot, Editor of the Editorial Page; Suzi Watford, Chief Marketing Officer; tator Hugo Chávez. mir Bitkov into a state orphanage, government. But the decision to expel Daniel Henninger, Deputy Editor, Editorial Page Jonathan Wright, International Mr. Velásquez isn’t an elected of- denying him his right to a legal the commission is his right as the WALL STREET JOURNAL MANAGEMENT: DJ Media Group: Almar Latour, Publisher Joseph B. Vincent, Operations; Professional Information Business: Christopher ficial. He’s more of a modern-day guardian when his parents were elected leader of a sovereign nation, Larry L. Hoffman, Production Lloyd, Head; Ingrid Verschuren, Deputy Head viceroy, suppressing with force op- carted off to prison. CICIG declined and he has ample justification.

EDITORIAL AND CORPORATE HEADQUARTERS: position in the “colony” from those to send someone appear at the hear- 1211 Avenue of the Americas, New York, N.Y., 10036 who challenge his authority. Guate- ing and defend its actions. Perhaps Ms. O’Grady is the Journal’s Telephone 1-800-DOWJONES malans have come to understand now Guatemala’s attorney general Americas columnist. TECHNOLOGY: PHONE BATTLE HEATS UP IN INDIA, B4 BUSINESS&FINANCE

© 2018 Dow Jones & Company. All Rights Reserved. ****** THE WALL STREET JOURNAL. Wednesday, September 5, 2018 | B1

S&P 2896.72 g 0.17% S&P FIN À 0.53% S&P IT g 0.30% DJ TRANS À 0.14% WSJ $ IDX À 0.37% LIBOR 3M 2.323 NIKKEI (Midday) 22631.17 g 0.29% See more at WSJMarkets.com Amazon Follows Apple, $1.1 trillion Embattled Theranos To Shut Itself Down 1.0 Hits $1 Trillion Mark BY JOHN CARREYROU criminal trial. The dissolution process Theranos Inc., the blood- was precipitated by the fact BY LAURA STEVENS and treats its warehouse work- as an online bookstore in Mr. testing company accused of that Theranos breached a AND AMRITH RAMKUMAR ers, something Amazon has Bezos’s garage in 1994. The in- perpetrating Silicon Valley’s covenant governing a $65 said is an inaccurate portrayal. ternet then was just becoming 0.9 biggest fraud, will soon cease million loan it received from Amazon.com Inc. became Investors also worry about a viable platform, and the most to exist. Fortress Investment Group the second U.S. company to the tech companies’ outsize valuable companies at the time June 2018 In the wake of a high-profile last year, according to the reach $1 trillion in market impact on the stock market. included industrial conglomer- PillPack acquisition scandal, the company will for- email. Under the loan terms, value, reflecting the online re- Amazon, Apple and Microsoft ate General Electric Co., oil gi- announced mally dissolve, according to an Fortress was entitled to fore- tailer’s striking transformation have accounted for more than ant Exxon Inc. and telecommu- email to shareholders. Thera- close upon the company’s as- from a profitless bookseller 35% of the S&P 500’s total re- nications power AT&T Inc. 0.8 nos will seek to pay unsecured sets if its cash fell beneath a into a disruptive force of com- turn this year, according to creditors its remaining cash in certain threshold. merce. S&P Dow Jones Indices data coming months, the email said. In the email sent Tuesday, Amazon shares climbed 1.9% through Aug. 28. The move comes after fed- Theranos General Counsel and in midday trading Tuesday, One of the biggest benefi- eral prosecutors filed criminal Chief Executive Officer David briefly topping the $2,050.27 ciaries of Amazon’s growth is charges against Theranos Taylor said the company is needed to push the company’s its 54-year-old leader, Jeff Be- Feb. 2018 0.7 founder Elizabeth Holmes and trying to negotiate a settle- value above $1 trillion. The zos, who has surpassed Bill Quarterly profit tops the blood-testing company’s ment with Fortress that stock, which ended the day up Gates to become the richest $1 billion for first time former No. 2 executive, alleg- would give the New York pri- 1.3%, has surged nearly 75% in man in the world, according to ing that they defrauded inves- vate-equity firm ownership of 2018 and added roughly $430 multiple indexes that track the tors out of hundreds of mil- the company’s patents but billion to the company’s mar- world’s wealthiest people. Mr. lions of dollars and defrauded leave its remaining cash—es- ket capitalization—about the Bezos owned roughly 16% of 0.6 doctors and patients. timated at about $5 million— size of Walmart Inc., Costco Amazon, as of an August regu- The executives have denied for distribution to other unse- Wholesale Corp. and Target latory filing, and is worth the charges and face a coming PleaseturntopageB12 Corp. combined. about $166 billion, according Investors have rewarded the to the Bloomberg Billionaires Seattle-based company as it Index. demonstrated better financial Amazon has expanded rap- 0.5 discipline in recent quarters, idly since its humble founding Chinese Billionaire reporting record profits be- cause of lucrative businesses such as cloud computing de- Market value Apple Amazon In U.S. Rape Probe spite aggressively spending on industries from health care to BY AUSTEN HUFFORD Liu spent last week at a resi- grocery delivery. 0.4 AND LIZA LIN dency for a Ph.D. program in “They’ve proven they can business administration of- make it work,” said Michael Chinese billionaire Liu fered by the University of Lippert, who manages the Qiangdong was arrested last Minnesota’s Carlson School of Baron Capital Opportunity week on suspicion of rape, Management, authorities con- Fund that counts Amazon as Minneapolis police said on tinued to investigate what its largest holding. “They’re 0.3 Tuesday as they continue to people familiar with the situa- spending a lot on all these investigate the entrepreneur’s tion said is a complaint things to build and enforce Nov. 2011 July 2014 June 2017 actions during a residency at against Mr. Liu by a female their competitive advantages.” Kindle Fire tablet Fire Phone Whole Foods the University of Minnesota. student from China. Amazon and Apple Inc., begins selling released acquisition Mr. Liu was released Satur- Earl Gray, an attorney for which hit the trillion-dollar announced day and returned shortly Mr. Liu, on Tuesday said he milestone on Aug. 2, symbolize 0.2 thereafter to China. He ap- doesn’t expect Mr. Liu to face the growing influence of tech peared at an event in Beijing charges. “There is no believ- companies on markets and the on Tuesday for the e-com- able or credible evidence that economy. The industry is merce site he founded, JD.com he has done anything wrong amassing wealth and power, Inc., underscoring what busi- and he denies any wrongdo- creating a new order in busi- ness observers describe as his ing,” Mr. Gray said. ness where the most valuable 0.1 extraordinary confidence A Minneapolis police resource is no longer oil, but In Minneapolis, where Mr. PleaseturntopageB2 data. Not far behind in market value are Google owner Alpha- bet Inc. and Microsoft Corp., Nov. 2010 Nov. 2014 both approaching $900 billion, Amazon Studios launched Echo introduced INSIDE while Facebook Inc.—which 0 crossed $500 billion in July 2017, a day after Amazon—has 2008 ’10 ’15 ’18 stalled at those levels amid a data-privacy scandal and $300 billion 135 Trading days to milestone growth concerns. 208 The companies’ increasing 231 clout have prompted lawmak- $400 billion 267 ers to scrutinize the tech sec- 202 tor. Amazon, which captures $500 billion 24 nearly half of all dollars spent 114 online, is simultaneously draw- $600 billion 119 ing the ire of President Trump over its effect on traditional 16 $700 billion 622 LEGO BUILDS A NORDIC retail and its use of the U.S. SLOW-GROWTH NATIONS BREAK Postal Service. Sen. Bernie $800 billion 85 Sanders has also criticized the 565 STRATEGY ICE ON ENERGY company for the way it pays 36 $900 billion 128

Heard: Apple won’t be 28 Sources: FactSet (value); Dow Jones Market Data (milestones) BUSINESS NEWS, B3 PROPERTY REPORT, B6 biggest for long...... B14 $1 trillion 183 THE WALL STREET JOURNAL.

HEARD ON THE STREET | By Stephen Wilmot Tough Job for WPP’s New CEO #1 worldwide in cloud communications1

Theadin- ties, paving the way for a line ads. They have turned Cloud is winning. dustry is sale of Kantar Group. The for help to the more secure changing fast. data provider has weighed ad ecosystems of Google and RingCentral is winning WPP’s new on WPP’s results for years. Facebook on the one hand, chief execu- Mr. Read also is relocating and consultancies like Accen- in the cloud. tive has the some 30% of staff into group ture and Deloitte on the unenviable task of convincing offices out of individual other. investors that the world’s agency offices. Faced with these chal- 40% largest agency group is still Crucially for investors, the lenges, Mr. Read struck a 36%2 attractive despite tougher company may end up less more humble tone than his 30% competition. profitable. Brands’ trust in predecessor, Martin Sorrell, Cloud (UCaaS) WPP on Monday formally agencies has been strained who left the company under 20% announced Mark Read’s ap- by years of problems with in- a cloud in April. But the new 22%1 pointment to the top job af- effective and fraudulent on- boss has kept a long-term 10% ter making him one of two goal of expanding WPP’s op- co-chief operating officers in erating margin. This could On-Premises (UC) 0% April. He had his first oppor- Ad and Subtract prove unrealistic. In the first 1 tunity to reset investors’ ex- half, the margin slipped half -12% 2017 YoY Growth WPP revenues less pass-through -10% pectations Tuesday, when costs, second-quarter like-for- a percentage point to 13.3%, WPP unveiled second-quarter like change and the company warned results. He dropped hints of that the full-year margin Western Europe 3.9% his approach but deferred excluding U.K. would also be lower than in the moment of reckoning un- 2017. Reversing this trend til a strategy update later Other* 2.9% while trying to mount a sales this year. turnaround will be tough. Learn more at ringcentral.com/oneleader WPP will likely end up a U.K. 1.4% WPP ADRs fell Tuesday, smaller, more tightly knit bringing the decline since company under Mr. Read. It Group† 0.7% the start of 2017 to one- already has sold some minor- third. It looks cheap at 10 5-year IPO anniversary. ity stakes, raising £676 mil- times prospective earnings, lion ($868 million) of cash to North America –3.3% but this multiple isn’t mean- Ringing the bell today! pay down debt, and is ex- ingful if margins fall. Inves- pected to sell more. Mr. Read *Asia Pacific, Latin America, Africa, Middle tors should hold fire. East, Central and Eastern Europe 1 2 told analysts Tuesday it †Entire company, including all regions Synergy Research UCaaS Revenue Tracker, 2017. RingCentral Office ARR Growth, 2017. doesn’t matter whether the Source: the company Weak North American sales ©2018 RingCentral, Inc. All rights reserved. RingCentral and the RingCentral logo are trademarks of RingCentral, Inc. company owns data capabili- THE WALL STREET JOURNAL. hit WPP results...... B3 B2 | Wednesday, September 5, 2018 ***** THE WALL STREET JOURNAL. INDEX TO BUSINESSES BUSINESS & FINANCE These indexes cite notable references to most parent companies and businesspeople in today’s edition. Articles on regional page inserts aren’t cited in these indexes.

...... B2 ...... B5 A E Lidl...... B6 Slowdown in Car Demand Expected M Accenture...... B1 Elliott Associates...... B5 BY ADRIENNE ROBERTS Alibaba Group Holding Entra...... B6 Microsoft...... B1 Exxon...... B1 N ...... B2 Most major auto makers re- Alphabet...... B1 F News Corp...... B8 ported increases in U.S. sales Amazon.com.B1,B13,B14 Fabege...... B7 Nike...... A1,B13 in August, though analysts ex- Apple...... B1,B4,B14 Facebook...... A1 O pect vehicle demand to cool APS Management...... B2 for the remainder of 2018 Ford Motor...... B2 Ocean Rig...... B5 Arconic...... B13 amid higher interest rates and Freeport-McMoRan...B13 Oppo Technologies...... B4 Aspelin Ramm Eiendom rising vehicle prices. G P ...... B6 Overall U.S. auto sales were Atlas Sand...... B5 Geely Automobile Pfizer...... B13 expected to rise slightly in Au- Holdings...... B2 AT&T...... B1 S gust, but General Motors Co.’s General Electric...... B1 worse-than-expected month Avenue Capital Samsung Electronics..B4 General Motors...... B2 dragged down the industry’s Management...... B5 Skanska...... B6 Great Wall Motors.....B2 tally, resulting in flat sales. B Stockholm Exergi...... B6 Green Street Advisors Customers took advantage of Baoshan Iron & Steel Storebrand...... B6 Labor Day discounts against a ...... B7 ...... B14 T backdrop of a healthy U.S. Guangzhou Automobile Barings Real Estate...B6 Group...... B2 Theranos...... B1 economy, analysts said. Con- Baron Capital Enterprise Tobin Properties...... B6 sumers continued to flock to H sport-utility vehicles and ...... B1 Toyota Motor...... B2 Huawei Technologies..B4 pickup trucks, helping push BlueMountain Capital Transocean...... B5 Management...... B5 I the average selling price to 21st Century Fox...... B8 $31,836 in August, market re- C ING Groep...... B12 U search firm J.D. Power said. LAURA MCDERMOTT/BLOOMBERG NEWS Calpers...... B7 J Unilever...... B13 The year-over-year compar- Fiat Chrysler Automobiles said August sales were propelled by its Jeep and Ram pickup brand. CBS...... B8 Jagged Peak Energy...B5 V ison benefited from weak sales Citigroup...... B5,B12 JD.com...... B1 in August 2017, when Hurri- Covia Holdings...... B5 Vedanta Resources...B14 cane Harvey forced the closure shares drop between 4% and There is one consolation: JPMorgan Chase...... B13 Vivo Electronics...... B4 Debt Curbs Crimp D of hundreds of dealerships in 7% in the past two days of Unlike U.S. and European peers, K W southeast Texas, denting the China Purchases trading. Chinese car makers aren’t being Danske Bank...... B12 Klovern...... B6 national total. Combined, the three have battered by fears of heightened Deere...... B13 Walt Disney...... B8 L WPP...... B1,B3 Sales are expected to cool in lost nearly 194 billion Hong restrictions on global trade. Didi Chuxing Technology coming months because of ris- Chinese auto makers are Kong dollars (US$24.8 billion) Many produce cars designed by X ...... B4 Lego...... B3 ing interest rates, higher vehi- grappling with falling sales as a in market capitalization this foreign companies for domestic Dongfeng Motor Group Liberty Oilfield Services Xiaomi...... B4 cle prices and the threat of broad clampdown on debt lim- year, Datastream shows, while drivers—Brilliance China Auto- tariffs on imports prompting its credit to prospective vehicle a Thomson Reuters index of motive Holdings Ltd., for exam- customers to consider buying buyers. Hong Kong-listed auto and ple, makes BMWs—insulating INDEX TO PEOPLE a used car or delaying a vehi- A plan by Great Wall Mo- truck manufacturers is down the companies from trade-re- cle purchase altogether. tor Co. to offer discounts of be- 39%. lated volatility. “All the positive economic tween 11% and 27% on its cars Vehicle purchases are de- An official at the National A H N news can’t overtake the wors- has helped trigger stock selling clining. In July, new-car sales Development and Reform Com- Agarwal, Anil...... B14 Hahn, Peter...... B12 Natkin, Mark...... B2 ening buying conditions for this week, according to analysts were 5.5% lower than in the mission, China’s top economic- Armitage, Eric...... B12 Holmes, Elizabeth...... B1 P consumers,” Charlie Ches- at Deutsche Bank. same month last year. Sales of planning agency, said the gov- B Hong, H.C...... B4 brough, senior economist for Dongfeng Motor Group Co., insurance policies are also fall- ernment plans to restrain Pandit, Vikram...... B12 Cox Automotive, said. He said Geely Automobile Holdings ing. Peer-to-peer lending for car overinvestment and strengthen Bahrke, Witold...... B13 K Pathak, Tarun...... B4 he believes the U.S. auto mar- Ltd. and Guangzhou Automo- purchases had become increas- regulation, in comments re- Bezos, Jeff...... B1 Kaepernick, Colin...... A1 R ket, which peaked in 2016 with bile Group Co.—among the ingly popular, but after a series ported by Reuters over the Blackwood, Amanda...B7 Kaminski, Kathryn....B12 a record 17.6 million vehicles largest Chinese auto makers of lending scandals the govern- weekend. Read, Mark...... B1,B3 Brigham, Ben...... B5 Kirchner, Cristina...... B14 sold, is tracking about two listed in Hong Kong—have seen ment has cracked down. —Mike Bird S years ahead of the broader C Kok, Wong Hoi...... B2 Sandberg, Sheryl...... A1 economy. Chesbrough, Charlie....B2 L Still, the car business re- August, the highest-ever level positive are positive,” includ- Jeep Compass increased 76%. Christiansen, Niels B. Sand, Peter...... B5 LaNeve, Mark...... B2 mains historically strong, on for the month, said J.D. Power. ing a low unemployment rate GM sales declined 13% for the ...... B3 Saunders, Neil...... A1 Larsson, Claes...... B6 pace to reach U.S. sales of Consumers were expected to and a strong stock market. month, according to a person fa- Corbat, Michael...... B12 Sorrell, Martin...... B1 spend $41.1 billion on new ve- Ford, Honda Motor Co. and miliar with the matter, missing Laszewski, Chuck...... B1 about 17 million vehicles this D Steinberg, Darrell...... B7 year. hicles in August, $1.5 billion Nissan Motor Co. reported per- analysts’ expectations of about Lindow, Rosen...... B6 V The shift toward higher- more than last year’s level, the centage sales increases in the an 8% drop. GM officially reports Deckard, Jenniffer D..B5 Lippert, Michael...... B1 price SUVs and pickup trucks company said. single digits, gains driven by sales quarterly. Varga, Tamas...... B13 F Liu, Qiangdong...... B1 continues, which should help “There are lots of reasons their SUV lineups. Fiat Chrysler Toyota Motor Corp. reported Y Flynn, Phil...... B13 M bolster auto makers’ bottom to be optimistic,” Mark La- Automobiles NV said sales in- a slight decrease, with sales of G Yang, Will...... B4 lines. Neve, Ford Motor Co.’s U.S. creased 10% in August, propelled the auto maker’s flagship Camry Malec, Jeff...... B12 sales chief, told reporters on a by its Jeep and Ram pickup sedan dropping 19%. Z SUVs, pickup trucks and Gerspach, John...... B12 Malek, Christyan...... B13 vans accounted for about 68% conference call. “The underly- brand. Sales of the Jeep Chero- —Mike Colias Gusek, Ron...... B5 Mason, Mark...... B12 Zhang, Zetian...... B2 of new-vehicle retail sales in ing factors that we want to be kee rose 85%, and sales of the contributed to this article. Billionaire Arrested in Rape Probe Interactive

Continuedfromthepriorpage Brokers spokesman said the investiga- tion is continuing. Mr. Liu hasn’t been charged with any crimes. Minneapolis police pays 1.41% said the alleged rape occurred Friday at 1 a.m. Mr. Liu was apprehended Friday evening. Chuck Laszewski, a spokes- on idle cash man for the Hennepin County Attorney’s Office, said prose- cutors were still waiting for the case file from police inves- in your tigators before they would be able to make a determination about any potential charges. The 45-year-old tycoon was brokerage born in a farming village in eastern China’s Jiangsu prov- 1 ince, where his parents ran a small business ferrying goods account and people along canals. His ambition earned him a berth at Beijing’s prestigious Renmin University, where he started his first business in his JD.com Chief Executive Liu Qiangdong was taken into custody on Friday at the University of Minnesota. third year, and propelled him to found JD.com, which be- tary receipts fell 6% to $29.43 the outbreak of severe acute came an e-commerce giant on Tuesday in New York. respiratory syndrome in 2002 with 362.3 billion yuan ($53 Mr. Liu’s enrollment in the and 2003, which left many billion) in annual sales. Minnesota program isn’t a people fearful of going out in With JD.com, Mr. Liu—who surprise. Despite his wealth, public. also uses the name Richard he had long advocated self-im- Since JD’s listing in 2014, Liu—took on more established provement and in 2013 stud- Mr. Liu has become one of players such as Alibaba Group ied for one semester at Co- China’s richest men, with a The News Holding Ltd. and focused his lumbia University in New net worth of about $7.9 billion, You Need. company on selling quality York. according to Forbes. He also merchandise when online re- It was while at Columbia began to make proclamations Straight to tailing was dominated by the that Mr. Liu began dating about the growth of his busi- You r Inbox. sale of cheap and often coun- Zhang Zetian, then a 19-year- ness, a move that led to critics terfeit goods. old exchange student at Bar- saying his confidence is more “Richard bucked that trend, nard College in New York. Ms. like cockiness. Stay informed with To learn more visit: bucked that idea. He under- Zhang shot to fame in high “He brags a lot, makes false email alerts and stood early on that there was school after a photo of her representations and makes newsletters. ibkr.com/141 a sufficient core of users who holding a cup of milk tea went empty promises,” said Wong Sign Up Now did care about quality and viral on Chinese social media, Kok Hoi, founder and chief in- wsj.com/newsletters were willing to pay more for earning her the sobriquet vestment officer of investment it,” said Mark Natkin, manag- “Sister Milk Tea.” The couple firm APS Management, which ing director of research firm married in 2015. has taken a short position on Marbridge Consulting. “I think Mr. Liu’s wealth and fame JD’s Nasdaq-listed shares. it speaks to his confidence in stands in contrast to his child- Among other things, Mr. his own vision and his faith in hood. His family was so poor, Wong said, Mr. Liu had prom- Interactive Brokers Rated #1 China to develop” in that di- Mr. Liu has said, that they ised investors in recent years Best Online Broker 2018 rection. were able to afford meat only that JD would be larger than by Barron’s* There are asterisks to the once or twice a year. Alibaba in the next few years. Member NYSE, FINRA, SIPC. Supporting documentation for any rags-to-riches story. JD.com After graduation in 1998, That promise isn’t credible, he claims and statistical information will be provided upon request. has reported only one profit- Mr. Liu started his own com- said, given that Alibaba’s *Interactive Brokers rated #1, Best Online Broker according to able quarter since going public pany selling computer acces- profit last year was $10 bil- Barron’s Online Broker Survey 2018: All Together Now, March 26, 2018. For more information see, ibkr.com/ info - Barron’s is a reg- in May 2014, and it most re- sories in Beijing’s technology- lion, while JD has posted 14 istered trademark of Dow Jones & Co. Inc. [1] Credit interest rate cently reported a quarterly hub district. straight years of losses. as of 7/3/2018. USD credit interest is paid on balances over USD loss of $334 million. Its share Mr. Liu credits a senior —Chunying Zhang, Xiao Xiao 10,000 in security accounts with Net Asset Value exceeding USD ©2018DowJones&Co.Inc. 100,000. For more information, see ibkr.com/interest 7-IB18-1189 price has fallen 25% this year. manager with giving him the and Shan Li All rights reserved. 1DJ6120 JD.com’s American deposi- idea to sell online following contributed to this article. THE WALL STREET JOURNAL. Wednesday, September 5, 2018 | B3 BUSINESS NEWS WPP Reports Weak North America Sales, Pulling Shares Lower BY NICK KOSTOV tightening their belts on tradi- tional ad campaigns and de- Shares in WPP PLC dropped manding a wider suite of ser- 8% in New York Tuesday as the vices, such as website creation ad industry’s upheaval took a and data science. toll on the world’s largest ad- Facebook Inc. and Alphabet vertising company, underscor- Inc.’s Google, meanwhile, have ing the challenges facing new grabbed the lion’s share of the Chief Executive Mark Read. digital-advertising market and The advertising giant’s sec- consulting firms such as Ac- ond-quarter results showed a centure are encroaching on weak performance in North Madison Avenue’s turf. America, as the company’s sta- The changes have plunged ble of creative agencies—in- creative agencies, traditionally cluding J. Walter Thompson, staffed with copywriters and Ogilvy & Mather and Young & artists,intoaracetoattract Rubicam—struggled. Like-for- engineers and other tech talent. like net sales—a figure closely These agencies also have watched by analysts to mea- been cutting costs and allowing sure the company’s underlying clients to work with staff that performance—dropped 3.3% in had been previously siloed. North America over a three- On Tuesday, WPP lowered month period ended June 30. the guidance for its operating

“I’m not happy with the margin for this year, saying it PETER NICHOLLS/REUTERS state of our creative agencies planned to invest more in re- A depiction of Windsor Castle, made with Lego’s toy bricks. The company’s first-half profit declined 10%, while its sales sank 4.6%. in North America,” said Mr. structuring the business and Read. “I think they could be incentivizing staff in its faster- stronger both reputationally growing units. and in the quality of the work.” In an interview after his ap- Lego Tempers Growth Ambitions The advertising world is pointment as CEO Monday, Mr. wrestling with a seismic shift Read said he has no plans to BY SAABIRA CHAUDHURI up decision making as part of sets and a high-price Bugatti has no plans to cut prices or to digital ads from print and sell off or merge flagship cre- a broad overhaul, and said set. Lego said existing brick shift its product mix toward television. Advertisers are ative agencies, many of which Lego AS reported weaker that it would shed 8% of its sets including “Ninjago,” Lego more-affordable toys. are based in the U.S. sales and sharply lower profit global workforce. City and “Star Wars” per- “We believe that overall the The North American market for the first half, but the Dan- Lego said Tuesday it formed well, according to the price level we have actually Not Adding Up was weaker in the second ish toy-brick maker said it was doesn’t expect to return to the company. reflects very well the value of Shares of WPP tumbled Tuesday quarter, Mr. Read said, in part making progress in a yearlong double-digit growth it enjoyed Facing headwinds in the Lego brands,” he said. after second-quarter results because U.S. companies have turnaround that includes a re- for years in developed markets U.S. and Europe, Lego is ex- Lego, like Mattel and Has- showed a weak performance been slower to cut costs than structuring. such as the U.S. and Western panding in the Middle East, bro, has tried to adapt to the in North America. European peers strained by Net profit fell 10% to three Europe. Like Mattel Inc. and Africa and China, where it will collapse of retailer Toys “R” years of anemic economic billion Danish kroner ($468 Hasbro Inc., which it has over- open two new flagship stores Us Inc. in markets such as the Stock performance growth. million), while sales declined taken as the world’s biggest in the next year. It recently U.S., the U.K. and Australia. £13.0 a share North American clients also 4.6% to 14.3 billion kroner. The toy maker by sales, Lego struck a partnership with Chi- The company has increased its have been slower than those in company attributed much of is increasingly competing with nese tech and videogame giant online offerings and said it is the U.K. and some other parts that weakness to currency videogames, YouTube and Tencent Holdings Ltd. to make working to make sure its full 12.5 of the world to move their moves. The U.S. dollar weak- other digital distractions. Lego-branded games. product range is available at budgets to less traditional me- ened significantly against the This year “is about stabiliz- Lego isn’t publicly listed, so other retailers across the U.S., dia, Mr. Read said. In the U.S., kroner during the period, re- ing the business and building it doesn’t disclose full finan- Mr. Christiansen said. digital ads accounted for 44% ducing Lego’s overseas sales a platform for longer-term cial results. It said Tuesday Toy makers are also grap- 12.0 of total ad spending last year, after being converted into its sustainable growth,” said that stripping out currency pling with how to incorporate according to eMarketer. That home currency. Chief Executive Niels B. Chris- moves, revenue in China rose new technology into their percentage was 61% in the U.K. Excluding foreign-exchange tiansen, who took the reins in by a double-digit percentage products. Among other moves, Tuesday 11.5 and 60% in China. moves, revenue was flat for October. “There will be no in the first half. Revenue in Lego has created Lego Boost, a £11.97 “Many clients have been the first six months of the magic bullet or very quick Western Europe increased by robot-building kit. “The brick t6.3% questioning the budgets year, compared with a 6% cur- path back to growth.” low single digits, it said, while is at the heart of what we do 11.0 they’re spending on traditional rency-adjusted fall a year ear- Lego said sales were in North America it declined but we are, to an increasing June’18 July Aug. [ads] over the last 24 months,” lier. That drop was Lego’s first buoyed by new launches, in- slightly. The company didn’t amount, using digital to en- Source: SIX Mr. Read said. “It hasn’t hap- sales decline in 13 years. Lego cluding a line of roller-coaster provide further details. hance it,” said Mr. Chris- THE WALL STREET JOURNAL. pened in one quarter.” at the time promised to speed sets, “Jurassic World”-themed Mr. Christiansen said Lego tiansen.

BOUYGUES FIRST-HALF 2018 RESULTS NET PROFIT UP 18% a OUTLOOK CONFIRMED

• BOUYGUES TELECOM: GOOD COMMERCIAL CONSOLIDATED PERFORMANCE AND ROBUST GROWTH IN KEY FIGURES RESULTS • CONSTRUCTION BUSINESSES: BACKLOG SALES AT RECORD LEVEL AND IMPROVEMENT IN €m SECOND-QUARTER CURRENT OPERATING PROFIT YEAR-ON-YEAR 15,743 +4%1 First-half 2018 highlights: continued good commercial performance at • CURRENT Bouygues Telecom and sharp improvement in its financial results; OPERATING PROFIT €m • backlog in the construction businesses stood at a record level of €33.7 billion at end-June 2018, up 9% year-on- year and up 13% at constant exchange rates. A number of -€44m major contracts were signed during the second quarter. 303 The Group reported current operating profit of €303 million in first-half 2018 versus €347 million in first-half 2017. This reflects a rise in profitability at OPERATING PROFIT Bouygues Telecom and current operating profit in the €m construction businesses, which was still impacted by poor weather conditions in the first quarter. 2 The Group’s operating profit was €383 million versus 383 +€4m €379 million in first-half 2017 (including non-current income of €80 million in first-half 2018 versus €32 million in first-half 2017). NET PROFIT OUTLOOK: BOUYGUES EXPECTS TO CONTINUE TO ATTRIBUTABLE IMPROVE ITS PROFITABILITY IN TO THE GROUP The outlook for 2018 announced with the first-quarter €m results release is confirmed. • Benefiting from an upbeat environment in France and international markets, the construction businesses will 260 +€40m continue to be selective and focus on profitability rather than volumes. The current operating profitb and current operating marginb of the construction businesses are NET DEBT expected to improve versus 2017. €m • TF1 confirmed its targets to improve profitability.

• Bouygues Telecom is experiencing profitable growth 3 momentum with a free cash flow target of €300 million (5,042) -€777m for 2019. Sales from services are expected to grow by more than 3% in 2018 versus 2017, with an (1) Up 5% like-for-like and at constant EBITDA/sales from services margin higher than in 2017 exchange rates and gross capex of around €1.2 billion. (2) Including non-current charges of €11m at TF1 and non-current income of €91m at Bouygues Telecom (a) Versus first-half 2017 (3) The difference from end-June 2017 mainly (b) Excluding a capital gain of €28 million in 2017 on the sale of 50% of Nextdoor reflects the acquisition of the Miller McAsphalt and remeasurement of the residual interest group by Colas and of aufeminin by TF1

Consult the full press release and results presentation on bouygues.com Investor Relations: [email protected] World-Leading Cyber AI @GroupeBouygues

Photo credits: Hanging gardens of the New Futura twin towers in Singapore. Photographer: Arnaud Février. Architects: ADDP – SOM. Landscaper: Belt Collins International. B4 | Wednesday, September 5, 2018 NY ** THE WALL STREET JOURNAL.

TECHNOLOGY WSJ.com/Tech Phone Battle Heats Up in India Didi Is New Samsung factory Boosting is intended to supply huge potential market Safety for cheaper handsets Measures Samsung Electronics Co. is BY YOKO KUBOTA building the world’s largest phone factory in India in an ef- BEIJING—Ride-hailing giant fort to tap the industry’s Didi Chuxing Technology Co., greatest opportunity for under fire after the recent kill- growth: cheap smartphones. ings of two female passengers, After waging a decadelong said it would expand safety measures and upgrade cus- By Timothy W. Martin tomer service by adding 3,000 in Seoul and Eric employees. Bellman in New Delhi The company said it was up- grading an emergency function battle with Apple Inc. for the button on its mobile app to al- world’s most affluent consum- low passengers to report inci- ers, the South Korean electron- dents directly to police and ics giant is now looking to would soon start testing audio fend off Chinese companies recording of rides. trying to dominate the market “Didi will do its best to for inexpensive phones. That strictly hold the bottom line of market is twice the size of the safety and to effectively cooper- high-end market but offers ate with the regulatory require- lower profitability. ments raised by the authori-

India is a critical battle- YONHAP/EPA/SHUTTERSTOCK ties,” it said in a statement. ground because it is still rap- South Korean President Moon Jae-in and Indian Prime Minister Narendra Modi on a July trip to a Samsung Electronics factory. Didi also said it was building idly growing and the country’s a new customer-service system demographics mirror other nese alternatives made by the one name, is one of Oppo’s leader, Lee Jae-yong, flew into and increasing its in-house cus- countries primed for growth. likes of Xiaomi Corp., Oppo Low-End Emergence newest customers. She got her India this summer to cut the tomer-service staff by 3,000 Just over half of the global Technologies Ltd. and Huawei Inexpensive smartphones are first smartphone two months ribbon, flanked by Indian people to 8,000 people by the population has a smartphone, Technologies Co. climbing in the world market. ago and said the Oppo is a big Prime Minister Narendra Modi end of the year. The company and that figure will rise to 77% Chinese brands accounted upgrade from the Samsung and South Korean President currently has 5,000 in-house by 2025, an addition of for the majority of the global Share of global shipments, feature phone she had been us- Moon Jae-in. customer-service staff and roughly two billion new smart- smartphone market for the by phone cost ing for years. She can look up Samsung’s Mr. Hong said its 10,000 customer-service sub- phone users, according to first time last year, according Below $200 $200-$499 $500+ recipes on YouTube and video phones are fully India-made, contractors, it said. GSMA Intelligence, a mobile- to TrendForce, which tracks 100% chat with family. The selfies unlike those of rivals which To implement the new mea- industry researcher. device sales. That compares and food photos she took on import some parts. For that sures smoothly, the company “This is the right place to with 32% in 2013. The Chinese 75 her old phone all seem blurry reason, Mr. Modi has chosen to said it would halt all of its ride- have the manufacturing hub phone makers have undercut now that she has become used use a Galaxy handset. hailing services in China be- for the world,” said H.C. Hong, the South Korean tech giant on 50 to a better screen and camera. India is one example of tween 11 p.m. and 5 a.m. for one chief executive of Samsung price, while offering compara- “In every way, my new growing competition in week starting Sept. 8. Electronics in India, about the ble or better features on their phone is more beautiful than cheaper smartphones. Accord- Over the past week, Didi has 25 company’s new facility in a smartphones. my last one,” she said. ing to Canalys, twice as many faced government criticism and New Delhi suburb, which will India is on pace to surpass None of her friends or fam- inexpensive phones, which are public outrage after a female double Samsung’s capacity to the U.S. next year as the 0 ily owns an iPhone or even priced at $200 and below, were passenger using the company’s make smartphones in India world’s second-largest smart- 2013 ’14 ’15 ’16 ’17 ’18 considered it because starting shipped in the first half of this carpool service was killed, the when finished in 2020. The phone market after China. To- Note: 2018 figures for the first half of the year prices are so high. The $170 year as expensive ones, priced second such incident in three plant has a projected annual day, just 22% of Indians own a Source: Canalys Oppo was already stretching at $500 and above. In 2013, months. capacity of 120 million hand- smartphone. THE WALL STREET JOURNAL. her budget and an iPhone usu- both markets were about even. Didi has indefinitely halted sets, or roughly one of every Xiaomi is manufacturing in ally costs more than twice that “The global smartphone its carpool service, which both 13 phones in the world. Around four spots across India, with lion phones a year in its fac- price. The iPhone had just 1% market has peaked, but emerg- victims had been using, and 30% of those will be exported. around 10,000 employees. It is tory near New Delhi. market share in India in the ing markets are growing,” said fired two executives in the wake Samsung mobile executives trying to persuade its parts “We see India as a vibrant quarter ended June 30, accord- Tarun Pathak, analyst at re- of last month’s fatality. believe the Indian market will suppliers to set up in India. smartphone market, which is ing to research firm Counter- search firm Counterpoint. “The In the latest killing, police be key to success—or failure— China’s Vivo Electronics Corp. gaining constant traction,” point Technology. battle for the next billion con- said Didi’s customer service in other emerging markets. It spent more than $300 million said Will Yang, brand director Samsung is spending sumers is more important than didn’t respond for hours to re- needs to make a stand in India to sponsor India’s main cricket of Oppo India. around $700 million on its the premium market.” quests for help made by the vic- to show its hardware can ward sports league through 2022. Sarita, a 36-year-old family smartphone factory near New —Vibhuti Agarwal tim’s friend until police inter- off more budget-friendly Chi- Oppo makes around 15 mil- cook in New Delhi who goes by Delhi. The company’s de facto contributed to this article. vened.

B6 | Wednesday, September 5, 2018 THE WALL STREET JOURNAL. INTERNATIONAL PROPERTY REPORT Scandinavia Nordic Nations Lead Green Trend Norway Developers find silver vestors, or even financing,” Mr. Oil Fund Bøyum says. “Construction lining in frigid winters: costs a little bit more, but you environmentally always get that back.” Explores Foreign businesses that friendly technology have established beachheads in the Nordics are playing a More Deals BY ISOBEL LEE leading role in exporting the BY ISOBEL LEE green technology to other Houston-based Hines made parts of the world. When Norway’s trillion-dol- its first foray into the Finnish German grocer Lidl won a lar oil fund decided to start market last year by acquiring global award last year for the buying commercial property in Kasarmikatu 21 in Helsinki, a most sustainable retail build- 2010, its managers figured modestly sized seven-story of- ing in the world with one of that it would focus primarily fice building by the standards its Swedish stores, featuring on about a dozen of the of one of the world’s largest solar cells and free charging world’s top cities. developers. stations for electric cars and Eight years later, the fund’s But Hines likely will export bikes. The Europe-wide re- property arm, Norges Bank the lessons learned from the tailer, which expanded into the Real Estate Management, is project in terms of its green U.S. last summer, says the nearing that goal. Last year, it design and materials to devel- progress it made in the small paid $823 million for a major- opments in other cities. That is town of Växjö will help create ity stake in a set of five retail because Finland and other Nor- the supermarkets of the future and office properties in Tokyo, dic countries are on the cutting across its global footprint. adding that city to a list that edge when it comes to energy Meanwhile, domestic players now includes nine principal efficiency and environmentally in the Nordics are coming up cities in the U.S., U.K., France, friendly design, materials and with new ideas. Data-center de- Germany and Switzerland. real-estate technology. velopers, for example, are Norges is now exploring “The Nordic countries seem watching efforts by Swedish possible deals in Singapore, to have prioritized sustainabil- venture Stockholm Data Parks but hasn’t identified “many ity perhaps a little bit sooner to capture excess heat pro- more important cities”, ac- than other markets in our duced by the centers and chan- cording to Karsten Kallevig, portfolio,” said Daniel Chang, a nel it to heat city homes. The chief executive of Norges Bank Hines managing direc- system, which has run a suc- Real Estate Management. tor. “These elements can con- cessful pilot project, hopes to “We’ve come to a conclu- tinue to help us cross-pollinate warm 10% of all city homes by sion that in order to invest best practices across the firm.” 2035. “We’ve found a way to this amount of capital in a sig- The Nordic countries are use the electricity twice,” says nificant way, there are really emerging as trend setters in Erik Rylander, head of data- only a handful of cities glob-

so-called sustainable or NORDICGREEN center cooling and heat recov- ally where we can achieve that “green” technology, according Hines likely will export lessons on green design and materials from its Kasarmikatu 21 building. ery at local energy company scale,” Mr. Kallevig said in an to brokers, developers and ar- Stockholm Exergi, one of the chitects. On a city-planning ing and cooling. Oslo’s new nesses trying to attract youn- initially gave developers little consortium’s founding partners. level, the region is becoming state-of-the-art airport, which ger workers say they increas- choice but to focus on energy Entra ASA, one of Norway’s known for walkable down- opened last year, stores winter ingly are recognizing the efficiency. “But now it’s an ab- biggest property investors, is The fund has been towns, high levels of recycling snow under sawdust year- importance of green office solute part of the culture, at a hoping to develop buildings involved in some of and such features as special el- round for air conditioning. space as a recruiting tool. social and political level,” says that produce more energy evated roadways and ferry ser- Real-estate developers and Investors are willing to pay Staffan Unge, head of Sweden than they consume over their the most high-profile vices for bicycles alone. In the investors in other parts of the more for these properties. In- for Barings Real Estate, part lives, including construction deals in recent years. Finnish capital, they are even world are following closely be- deed, some of the big pension of global investment manager and demolition, according to pioneering driverless public hind because of the clear link funds and other major institu- Barings LLC. CEO Arve Regland. The firm’s transport to battle car use. that is forming in the Nordics tions in the Nordic region Developer Aspelin Ramm next project, the €390 million In real-estate development, as well as other cities between won’t buy property that falls Eiendom AS started building (about $450 million) Power- interview. major cities such as Helsinki, green buildings and value. Op- beneath top sustainability green a decade ago “to gain an house Brattørkaia in Trond- Norges’s real-estate strategy Copenhagen, Stockholm and erating costs are lower be- standards, according to bro- edge over the competition,” ac- heim, which will use seawater is of interest to investors, sell- Oslo have been pioneers in re- cause less needs to be spent to kers and analysts. “In these cording to Chief Executive Gun- for cooling, will be the first ers, brokers and other real-es- ducing energy consump- heat buildings in the winter, markets, green building has nar Bøyum. Now the firm views new energy-positive building tate industry officials through- tion, using high percentages of cool them in the summer and gone from a ‘nice to have’ to a it as essential as it redevelops in the country, he said. “If we out the world. The fund, which recycled materials and green- keep them lighted year-round. ‘must have,’ ” said Erik Høvik one of downtown Oslo’s most can already create energy-pos- two years ago decided to in- house-gas-friendly com- Just as important, tenants of Nordic advisory Pangea prominent office buildings in itive real estate with the cur- crease its allocation to prop- pounds, as well as harnessing are willing to pay higher rents Property Partners. partnership with local insurer rent technology, just think erty to a maximum of 7% from natural resources such as the to work and live in buildings The Nordic region’s infa- Storebrand. “Without it, you what we’ll be capable of in the 5%, has been involved in some sun, seawater and ice for heat- with fresher air. Many busi- mously long and cold winters don’t get the right tenants, in- future,” Mr. Regland said. of the world’s most high-profile deals in recent years. There is no sign of its appe- tite ebbing, even with the cur- rent bull market in commercial Swedish Home Prices Begin to Stabilize property in its ninth year. Some investors who are very sensi- BY PETER GRANT tive to market timing have moved to the sidelines, worried The closely watched Swed- that the good times may come ish residential market, which to an end soon. hit a slump in late 2017 after Norges is among a number years of sharp growth, may be of huge sovereign funds that in for a soft landing. are becoming more active in The escalating rise in val- commercial property invest- ues came to an end last year ment throughout the world. when prices of apartments and Japan’s $1.5 trillion govern- single-family homes in large ment pension fund has been Swedish cities fell 9% between selecting managers for real es- August and December, accord- tate, as well as private-equity ing to an index compiled by and infrastructure invest- data firm Valueguard. The de- ments. The Qatar Investment cline comes amid government Authority and Australian Fu- measures designed to cool ture Fund also have been more down the white-hot market active. and a glut of new supply pro- The Norges fund’s invest- duced by developers eager to ment approach to property in- cash in on price increases of vesting has evolved over the more than 50% in less than last eight years, said Mr. Kal- four years. levig, a former head of Japan But prices have stabilized for Grove International Part- this year. The Valueguard in- ners who joined Norges Bank dex in July was up about 2.9% in 2010 and became CEO of from the low it hit in Decem- real estate in January 2016. ber. The fund debuted in London To be sure, the market still real estate, taking a 25% share

has thousands of for-sale HOSSEIN SALMANZADEH/TT/ASSOCIATED PRESS in the Crown Estate’s Regent homes to digest. But the The end of the housing surge in Sweden last year sent tremors through the market and hammered shares of listed home-building firms. Street portfolio. Its other high- Swedish economy is growing, profile deals have included the unemployment is down, con- rates rising, it’s not clear shares to Klövern AB.The billion-euro acquisition of an of- sumer confidence is up and in- whether the cooling will lead Soft Landing? move made Klövern the larg- fice building in Paris at 9 Place terest rates are at historically to market stability, a nosedive Housing prices have stabilized in Sweden after a dive beginning last year. est shareholder of Tobin. Vendôme in 2016, plus a 44% low levels, analysts point out. or a return to the races. Still, some developers say minority stake in a portfolio of HOX Index* “We see the current down- In Canada, the government that they see benefits from the 11 office properties in New York 240 turn as a price adjustment policy changes have helped market cooling. Skanska AB, a City for $1.56 billion in 2015. rather than a crash,” said Kep- slow the pace of household global developer and builder While asset classes were ler Cheuvreux in a recent re- borrowing and damped the 220 based in Stockholm, discour- initially only offices and retail, port on the Swedish residen- country’s housing market, par- ages buying by speculators, that is changing too. “We’ve tial market. ticularly during the first quar- 200 said Claes Larsson, an execu- invested in logistics assets, but The ups and downs of Swed- terofthisyear. tive vice president with the are unlikely to go down the al- ish housing have gained global The story of the Swedish firm. ternatives route,” Mr. Kallevig attention because the market housing market until last year 180 When speculators buy mul- said, referring to niche asset there resembles those in other was one of steadily rising tiple units, they wind up com- classes like student housing or countries where bubblelike prices for over two decades. 160 peting with Skanska as it tries assisted living. conditions have prompted ac- The surge was especially pro- to sell other units in the proj- The fund has shunned the tions by government and finan- nounced between 2013 and ect, Mr. Larsson explained. Nordics region to date. It cial institutions. 2017, with the market being 140 “We try to actually prevent doesn’t invest in Norway in In Australia, for example, fueled by Sweden’s strong 2012 ’13 ’14 ’15 ’16 ’17 ’18 that from happening,” he said. line with the management regulators and banks have im- economy, liberal immigration *A price index of apartments and single family houses in Sweden Many developers shelved mandate laid down by the posed restrictions on such policies and low interest rates. Source: Valueguard THE WALL STREET JOURNAL. new projects when the down- Ministry of Finance, the formal things as foreigners buying As housing prices swelled turn hit. With the market owner of the fund. The govern- homes and banks making in- to rival some of the highest in in 2016 restricting lenders’ ment at that time. showing mixed signals, some ment stipulates that the fund’s terest-only loans. Meanwhile, Europe, developers stepped up ability to make interest-only The end of the housing of these companies have capital is to be invested Canada’s federal and regional construction. By late 2016, home loans. A new rule re- surge last year sent tremors started to dust off their plans. abroad, to avoid overheating governments have taken mul- well over 10,000 new dwell- quired a portion of most loans through the market and ham- “Based on our view of the the Norwegian economy and to tiple steps in recent years to ings were being completed per to be amortized. mered shares of listed compa- market and the maturity of shield it from the effects of oil- cool runaway housing markets quarter, compared with fewer “Lower indebtedness in- nies in the Swedish home- our pipeline we are planning price fluctuations. including taxes targeting for- than 5,000 in 2011, according creases the resilience of house- building business, such as JM new housing projects first in Norges’s real estate return eign buyers. to Kepler Cheuvreux. holds to shocks and reduces the AB and Oscar Properties Hold- 2019,” said Rosen Lindow, a for 2017 was 7.5%. Mr. Kallevig Now many of these govern- Such froth prompted the risk of the Swedish economy ing AB. To shore up its bal- Tobin spokeswoman in an said it helps that there is not ment actions seem to be hav- Swedish national securities being negatively affected as a ance sheet, Tobin Properties email. much competition when it ing their intended market im- regulator, Finansinspek- result of unforeseen events,” had to take several steps in- —Kim Mackrael comes to the large deals that pact. However, with interest tionen, to start taking action the agency said in a news state- cluding issuing 7.5 million new contributed to this article. the fund seeks. THE WALL STREET JOURNAL. ***** Wednesday, September 5, 2018 | B7 INTERNATIONAL PROPERTY REPORT | SCANDINAVIA Investors Ride Stockholm’s Office Boom Unlike the residential [the debt crisis] was settled, the market really started mov- market, demand is ing upwards,” he said. steady in the Swedish Office vacancy in Stockholm overall is 6.6% and only 2% in capital’s business area the central business district, BY PETER GRANT JLL said. The technology sec- tor is particularly strong. For Late last year, when Swed- example, co-working giant We- ish home prices were plum- Work is planning to open its meting, some short sellers tar- first Stockholm operation in geted Fabege AB, a large early 2019. Stockholm office landlord, on Prime office rent in Stock- the belief that the weakness in holm’s central business dis- residential would spread to trict was over 7,000 kronor a commercial property. square meter a year at the end It was a bad bet. Lately of the first half, compared Fabege’s shares have been with less than 5,000 in 2015, trading above 120 Swedish JLL said. kronor a share ($13.19), up On the supply side, the resi- from under 90 Swedish kronor dential boom, which ended late last year. last year, has helped the office “Everyone who has been market. While it lasted, devel- cautious on the Swedish com- opers converted numerous mercial real-estate names has older office buildings to apart- been wrong,” said Peter Pa- ments. padakos, an analyst with Historically, developers in Green Street Advisors. “Ev- Stockholm have added new of- eryone who has been seeing fice stock at an annual rate of the low [office] vacancy and about 1% to 1.5% of total sup- assumed that rental growth ply. But in the last five years will continue has continued to that number has been “close be right.” to zero or even negative” be- The Swedish real-estate in- cause of conversions, Green dustry is demonstrating that Street’s Mr. Papadakos said. residential and commercial “Whenever possible [in property markets march to Sweden] when you have an ob-

different drummers. While ANDREAS SANDSTRÖM/BILDBYRAN/ZUMAsolete PRESS office building, it would home prices have fallen and The Arenastaden development includes Fabege’s office buildings, the Mall of Scandinavia and a new soccer stadium. make much more economic investor sentiment in that sense to convert it to residen- market has done an about-face Fabege’s sale earlier this year ket faces challenges. “Even Scandinavia and a new soccer travel to the business districts tial,” he said. Similar conver- afteryearsofgrowth,office- of Uarda 6, an 18,000- square- though we witness a contin- stadium. of the north. “Today the aver- sion booms in other cities, building owners are being meter building the company ued rental growth, we also get In August, Fabege an- age employee in Stockholm is such as Sydney, Australia, buoyed by expanding tenant completed in 2017, to an open- signals from tenants that the nounced plans to try to repeat spending more time getting to have helped those office mar- demand in a high-growth ended real-estate fund man- willingness to pay has reached its success at Arenastaden by work than they have holidays,” kets also stay strong. economy. aged by Frankfurt-based Union the limit,” said Cecilia Gun- developing a sprawling new said Mr. Hermelin. “And in Market bulls worry about Investors buying office Investment. The deal valued narsson, JLL’s head of re- business district in the Flem- Stockholm, we have many new space being added. Over property in Stockholm’s cen- the property at 1.2 billion kro- search in Sweden. ingsberg area south of Stock- more holidays than you do in 160,000 square meters of tral business district are pay- nor, Fabege said. Also, the availability of holm over the next 10 to 15 the U.S.” space currently is in the devel- ing top prices. In the second Also, Skanska AB last year sites for new development is years. When finished, it will The Stockholm office mar- opment pipeline, up from half of this year, buyers were sold its Sthlm Seaside project limited by Stockholm’s water- have enough office space for ket held up better than that of 100,000 square meters last getting yields in the low 3.5% to Vasakronan, a Swedish inundated geography and 50,000 workers, 50,000 resi- many other European cities af- year, JLL said. range, according to JLL, a property company, for about strict government restrictions dents and 50,000 daily visi- ter the 2008 global financial But many expect tenants to commercial-property-ser- 900 million kronor. That on height and mass in histori- tors, according to Christian crisis. It also has experienced absorb this space steadily. vices firm. That is down from 12,500-square-meter building’s cal areas. Developers have Hermelin, Fabege’s chief exec- impressive growth in occu- “We’re more likely to see a 5% in 2011 and over 4% in tenants include gaming com- been increasingly focusing on utive. pancy and rents since the debt slowdown to other European 2014, the firm said. Yields fall panies Arrowhead Game Stu- suburban and industrial sites, The project also will help crisis in Southern Europe levels in terms of rent growth in commercial property as val- dios and Yggdrasil Gaming. like the Arenastaden develop- address the traffic jams in the ended, according to Peter as opposed to an absolute cor- ues rise. Still, amid these positive ment, which includes Fabege’s area when workers who live in Wiman, head of Sweden re- rection in rents, let alone a big Recent deals include signs, the Swedish office mar- office buildings, the Mall of the southern part of the city search for Savills. “As soon as fall,” Mr. Papadakos said. BUSINESS NEWS ADVERTISEMENT Business Real Estate & Services Calpers Board Splits Over To advertise: 800-366-3975 or WSJ.com/classifieds Building Sacramento Tower

BY HEATHER GILLERS AND DAWN LIM   Sacramento officials are cheering a decision by the Cal- ifornia Public Employees’ Re- tirement System to build what would be the tallest tower in its hometown. But some inside Calpers’s boardroom are con-    cerned the 550-foot project represents too much risk. During a private meeting        earlier this summer, three Calpers directors voted against       a new $550 million commit- ment to the proposed office-

condominium-retail complex, MAX WHITTAKER/PRIME FOR THE WALL STREET JOURNAL according to people familiar The vacant lot where Calpers wants to construct its Tower with the situation. Calpers abandoned a previous develop- sisted calls from activists and The investment in 301 Capi- ment plan for the same site in state officials to divest itself of tol Mall remained a part of its 2007. politically controversial invest- portfolio over the past decade The dissent came after ments. Cities in California have even as the site’s value fell. board members reviewed a complained about how much it The assessed value of the memo from an outside consul- costs them to participate in the downtown Sacramento prop- tant that raised some concerns Calpers system. When the fund erty has dropped 24% since about the project’s return fore- elected to lower its investment- 2007, according to the Sacra- casts, these people said. The return assumptions in 2016, it mento County Assessor’s Of- specific votes and memo ha- chose to phase in the change fice. Investment returns for ven’t been previously reported. gradually to soften the impact 301 Capitol Mall LP have been A majority of other members of higher yearly pension costs negative in six of the past of the 13-person board agreed on local governments. seven years, according to Calp- to support the project as long But in the state’s capital of ers’s records. as it yielded a 5.8% return and Sacramento, Calpers’s support The plan that went before 40% of the office space was for a new tower is winning Calpers’s board earlier this pre-leased. praise. The site, 301 Capitol summer featured offices, con- “Should this project go for- Mall, is located along the road dos, retail stores and an ele- ward with development, we that runs between the Califor- vated public park, according to believe it will be a successful nia State Capitol building and a person familiar with the situ- investment for the fund and an the city’s Tower Bridge. ation. A real-estate advisory iconic building,” Calpers said “The development of 301 firm, RCLCO, prepared a memo in a written statement. Capitol Mall would be trans- for board members saying that Competing pressures of lo- formative for our capital re- the 5.8% return target was an cal politics and investment of- gion,” said Amanda Black- aggressive projection for the ten collide at the nation’s larg- wood, chief executive of the local market, according to peo- est public retirement systems, Sacramento Metropolitan ple familiar with the matter. which are responsible for ben- Chamber of Commerce. The memo stated that those efit obligations to firefighters, This isn’t the first time returns were nonetheless too police officers, teachers and Calpers has considered a fix low to make up for the risk in- other public workers. for the empty, block-long par- volved in the project, but non- These funds are under pres- cel. During the previous real- financial factors could justify sure to hit aggressive return estate boom, Calpers planned the investment, these people targets as a way of closing to build twin 53-story condo- said. widening funding gaps. They minium towers in partnership The directors opposed to are also heavily dependent on with a local developer, pledg- the idea had varying concerns, local political support, relying ing $100 million for the proj- said people familiar with the          on government contributions ect. That plan fell apart in matter, including worries that to supplement investment in- 2007, and Calpers then asked moving ahead after receiving      come. Their boards are typi- the real-estate firm CIM Group mixed guidance from an out- cally staffed by political ap- to manage the project. side consultant would open the        pointees, union officials and The next year the market board to scrutiny and that     local business leaders. cratered and the fund’s real- starting a big development In California, Calpers hasn’t estate holdings plummeted, project at this point in the eco- always made decisions that costing the pension fund bil- nomic cycle would expose were popular locally. It has re- lions in losses. Calpers to market volatility. B12 | Wednesday, September 5, 2018 ****** THE WALL STREET JOURNAL. BANKING & FINANCE ING Fined in Laundering Probe Citigroup Banks world-wide are imposed around $23.52 billion ment, Danske said it wasn't CFO Plans in fines, according to consul- Penalized able to verify the number. The under pressure to tants Fenergo, hitting lenders European banks have racked up some of the largest-ever bank expects to publish the To Retire clamp down on illegal whose ineffective systems offi- fines and settlements over money-laundering and sanctions. findings of an internal investi- cials say have let clients laun- gation into the matter later funds in the system der money out of countries this month. such as Mexico, Russia and BNP Paribas “The main concern for in- March 1 Fined 2014 $8.90 billion BY MARGOT PATRICK Venezuela. vestors remains whether the Citigroup Inc. Chief Finan- AND MAX COLCHESTER In contrast, European regu- U.S. regulator becomes in- cial Officer John Gerspach lators and prosecutors ex- HSBC volved,” Citigroup analysts will retire next year, ending a 1.90 Banking group ING Groep tracted $1.7 billion over such 2012 said. So far Danish and Esto- nearly 10-year run as the NV has agreed to pay a record breaches in the same period, nian authorities are leading bank’s top finance executive, European fine of €775 million including Tuesday’s ING fine, Commerzbank investigations, but U.S. in- the firm announced Tuesday. ($899.8 million) to settle an according to the consultants. 2015 1.50 volvement could see any even- investigation by Dutch prose- The EU’s anti-money-laun- tual fines increase substan- By Christina cutors into money laundering dering laws are policed by a tially, analysts said. Rexrode and Micah ING failings, as watchdogs try to patchwork of local regulators, 0.90 U.S. authorities have al- Maidenberg staunch flows of illicit money which critics say leaves it 2018 ready heavily punished Euro- after a spate of high-profile open to criminal abuse. pean banks for failings in Mr. Gerspach, 65 years old, scandals . More recently, local regula- Crédit Agricole money laundering compliance. will end his tenure as the 0.79 Also Tuesday, Danish lender tors have toughened their 2015 In 2014, French lender BNP bank’s CFO on March 1, 2019, Danske Bank saw its shares stance after embarrassing data Paribas SA pleaded guilty and according to an email Chief tumble more than 6% follow- leaks from whistleblowers on Source: company filings and regulators THE WALL STREET JOURNAL. paid $8.97 billion to U.S. au- Executive Michael Corbat sent ing a report that local prose- company money laundering thorities to settle charges it to employees that was viewed cutors had uncovered a higher and tax avoidance and criti- daughter of Uzbekistan’s for- ent launder money through disguised transactions with by The Wall Street Journal. than expected tally of alleg- cism that the authorities have mer president and didn’t re- electronic payment terminals. clients in sanctioned coun- Mr. Gerspach has served as edly illegal Russian money been too meek in pursuing port the suspicious transac- Danish authorities have tries. Britain’s HSBC Holdings Citigroup’s CFO since July moving through its Estonian such transactions. tions to regulators for several been investigating Danske PLC in 2012 paid $1.9 billion to 2009, making him the lon- branch. ING shares fell 2.6% Tues- years, the prosecutors said. In Bank since a whistleblower settle U.S. charges that in- gest-serving finance chief cur- Banks around the world are day following the announce- 2016, Amsterdam-based Vi- flagged issues at its Estonian cluded allowing Mexican drug rently at any major U.S. bank. under increasing pressure to ment as Dutch prosecutors mpelCom, now called VEON branch in 2013. The Financial cartels to launder money He will be succeeded by clamp down on the trillions of said it had been “seriously de- Ltd., paid $795 million to the Times reported Tuesday that through the bank. Mark Mason, 47, the finance dollars’ worth of illegal money ficient” as a gatekeeper of the U.S. and Netherlands to settle consultants had found that up The Danske debacle high- chief of Citigroup’s Institu- flowing through the financial financial system. The bank, for the matter. to $30 billion of Russian lighted concerns about Rus- tional Clients Group, the side system. The U.S. has led the instance, handled bribes paid Other infractions ranged money flowed through the sian customers using Nordic of the bank that includes in- way in policing banks in the by telecommunications com- from poor client record-keep- Baltic branch, far higher than and Eastern European banks vestment banking and trad- past decade. Since 2008, it has pany VimpelCom Ltd. to the ing to helping a Suriname cli- previously thought. In a state- to shuffle funds. ing. Mr. Gerspach became CFO when Citigroup was a poster child for the financial crisis. Its high-profile problems pro- Automated Trades Seen Worsening Swings liferated over the following years, with the bank marred BY STEPHANIE YANG by two failed stress tests, problems in its Mexico sub- On Feb. 5, the Dow Jones sidiary and a big mortgage- Industrial Average suffered its securities settlement with the worst one-day point-decline in Justice Department. But in re- history amid a tumultuous cent years, the bank has im- week for global markets. Al- proved its relationships with though the blue-chip index has regulators and dramatically since erased that loss, some slimmed down its once- investors are still trying to bloated operations. puzzle out what caused such a Mr. Gerspach has been the drop. bank’s face to investors and One possible culprit: a cas- analysts, often speaking at cade of automated stop-loss conferences and sharing the sell orders by trend-following mic with Mr. Corbat during investment funds that started earnings calls. He is known in London and then fed into for a dry sense of humor, the steep rout in U.S. stocks. sprinkling his speech with In the following days, the “gee whiz” and “gosh darn it.” downward lurch prompted selling to spread to other as- sets such as oil futures. This was the conclusion of an analysis of that fraught Theranos week by Bridgeton Research Group LLC, which runs com- puter models predicting trad- To Dissolve ing patterns of algorithmic strategies. Stop-loss orders, or sell Operations stops, are standing directives to sell a position—say, a stock ContinuedfrompageB1 or exchange-traded fund— cured creditors.

once prices fall below a cer- MONICA JORGE FOR THE WALL STREET JOURNAL Under a liquidation process tain level. They have long been ‘So many of these algorithms are doing the same thing. Their behavior becomes like human groupthink,’ Bridgeton’s Peter Hahn says. known as “an assignment for a tool for investors to auto- the benefit of creditors,” get- matically shut down a losing Algorithms that chase trends S&P 500 futures ting that remaining cash to the bet. unsecured creditors could take get signals to sell if they are 2900 Indexes hit sell stops nearly in sync But the growing influence long and the market six to 12 months, Mr. Taylor on markets of algorithmic falls—orders known as Bridgeton Research Group analysis said in the email. Most of traders and trend-following stop-losses or sell stops. estimates algorithms likely sold here Theranos’s two-dozen remain- funds, which use such auto- These orders are meant to 2800 and exacerbated the market rout. ing employees worked their matic directives, potentially limit losses, but could be last day on Friday, Aug. 31. makes markets more vulnera- compounding them as funds Only Mr. Taylor and a handful ble to sharp swings if every- pile on. Human investors also 2700 of support staff remain on the one starts to sell at once. Such can fuel declines, either by payroll for a few more days. strategies tend to have sell triggering stop-losses or The action followed a failed stops around the same levels tracking trend followers. 2600 bid to sell the company. Over across stock, bond and com- four months, investment bank modities futures. Stock futures hit last sell Jefferies Group LLC reached “So many of these algo- stop near market lows. out on Theranos’s behalf to rithms are doing the same 2500 more than 80 potential buyers thing. Their behavior becomes Jan. 30 31 Feb. 1 256789 and executed nondisclosure like human groupthink,” said agreements with 17 of those Peter Hahn, co-founder of parties, the email said, adding: Bridgeton. FTSE 100 futures DAX futures Nikkei 225 futures WTI crude-oil futures “We assisted those parties Whether humans or ma- with diligence and had numer- 7600 13500 24000 $67 a barrel chines tend to be the origina- ous follow-on conversations.” tors in major market declines The big-name investors who is a longstanding debate on poured money into Theranos Wall Street. Analysis will get nothing. All told, in- Many analysts believe fun- shows sell vestors in Theranos have lost damental data, such as an eco- stops hit Pressure in nearly $1 billion. nomic release or news report, starting as stock markets Theranos’s founder and is what causes investors to early as leaks into chairman, Ms. Holmes, and her run for the exits, while stop- January. commodities ex-boyfriend, Ramesh “Sunny” losses add momentum and in the days Balwani were indicted on nine volatility to the move. Others following. counts of wire fraud and two believe a wave of automated 6800 11500 20000 58 counts of conspiracy to com- selling can just as easily be Jan. 30 Feb. 9 Jan. 30 Feb. 9 Jan. 30 Feb. 9 Jan. 30 Feb. 9 mit wire fraud in June. Mr. what prompts investors to Balwani was Theranos’s presi- sell, absent any fundamental Note: Market data are in 30-minute intervals, which omit some intraday levels. Some annotations have been adjusted to more clearly denote where stops were hit. dent and chief operating offi- reason to bail. Sources: Bridgeton Research Group LLC (sell levels); Thomson Reuters (prices) James Benedict/THE WALL STREET JOURNAL. cer until he retired from the Traders have pointed to company in May 2016. If con- stop-loss orders in previous which large quantitative firms trade. tures market, thanks to in- lated, but there’s better data victed, they each face a maxi- market plunges, such as in Au- buy and sell is difficult to ver- Also, rather than exiting creasing automation. now,” said Kathryn Kaminski, mumsentenceof20yearsin gust 2015, when a surprise de- ify, and those levels frequently from a position completely Trend-following funds are chief research strategist and prison and a fine of $250,000, valuation of the Chinese yuan change based on the market when a stop is hit, many algo- often synonymous with so- portfolio manager at Al- plus restitution to those found sent markets into free fall. The and exact strategy each fund rithms are programmed to re- called commodity-trading ad- phaSimplex Group LLC. to have been defrauded, on Securities and Exchange Com- is running. duce their holdings gradually. visers, or CTAs, though they That, in turn, can amplify each count. mission listed stop-loss orders The use of stop losses by Because of this, some trend- can use a variety of strategies. market moves as a wider The indictments followed as a potential aggravator of algorithmic traders has following funds dispute the In the past decade, the range of institutional investors months of reporting by The market losses in the “flash evolved as well to be more idea that their actions are amount of money managed by are trying to position for what Wall Street Journal that raised crash” of May 2010. fluid and difficult to pinpoint. making market selloffs worse. CTAs has risen by 47% to the trend-following funds questions about the company’s There is no definitive an- Instead of setting an explicit “They all don’t want to be roughly $367 billion, accord- might do. Eric Armitage, chief technology and practices. swer in the debate. The esti- sell order, programs take data trying to get out of the posi- ing to first-quarter data from executive of London-based Before the charges were mate of the effect of stop- points from moving markets, tion at the same time,“ said BarclayHedge Ltd. Algorithmic East Alpha, started building filed, Theranos announced losses by Bridgeton—which such as volatility and momen- Jeff Malec, managing partner strategies account for 88% of models for BP PLC in 2001 to that Ms. Holmes had stepped provides research on different tum trends, to determine at RCM Alternatives. “They’re those assets. help the company understand down as chief executive and algorithmic strategies, such as when to reduce positions. going to use technology to Attempts by traditional in- what algorithmic strategies that Mr. Taylor, the company’s daily positioning and buy and For example, short-term mitigate that.” vestors to decipher trend-fol- were doing. general counsel, has been ap- sell levels—was based on the and long-term funds will One thing is clear: Funds lowing funds’ methodologies “Having worked for some pointed to also serve as CEO. firm’s in-house models built to weigh market signals differ- that chase trends and use al- and figure out which levels very large fundamental shops, Mr. Taylor will remain at the trade like major trend-follow- ently, traders say. That leads gorithmic strategies have they will trade at have also in- they are all very cognizant of company for several weeks, ing funds. them to behave differently in grown and can more easily creased. this activity,” Mr. Armitage according to a person familiar However, the exact prices at terms of when and what to program sell stops in the fu- “People have always specu- said. with the matter. THE WALL STREET JOURNAL. **** Wednesday, September 5, 2018 | B13 MARKETS

Material Weakness Treasurys Shares of materials companies in the S&P 500, which have slumped this year on worries about trade, were among Tuesday's biggest decliners. Decline on 0% S&P 500 Odds for

–0.5 Rate Hikes BY DANIEL KRUGER S&P 500 materials U.S. government bond –1.0 prices fell Tuesday as inves- tors awaited a heavy supply of corporate bonds this month, and manufacturing data showed factory activity accel- –1.5 erated in August. 9:30 10 11 noon 1 2 3 KC MCGINNIS/REUTERS The yield on the benchmark Shares of farming- and heavy-equipment maker Deere & Co. declined $2.10, or 1.5%, to $141.70. Source: FactSet THE WALL STREET JOURNAL. 10-year Treasury note rose to 2.902%, the highest since Aug. 9, from 2.853% on Friday. Yields rise as bond prices fall. On Tuesday, some investors Stocks Fall Ahead of Nafta Talks sold government bonds to raise cash to buy into higher- Retreat is led by Average dropped 12.34 points, and more concentrated [on Co. fell 2.10, or 1.5%, to 141.70. when it rose for seven consec- yielding company bond offer- or less than 0.1%, to 25952.48, China], or whether there is Meanwhile, declines in Nike utive sessions. ings, which could include debt companies affected by notching its third consecutive still a global element,” said weighed on the Dow industri- The dollar has strengthened sales by Pfizer Inc. and Uni- trade as investors fret loss. The index earlier fell as Witold Bahrke, a senior macro als. The sportswear giant’s in recent months, putting lever, analysts much as 159 points. The S&P strategist at Nordea Asset shares shed 2.60, or 3.2%, to pressure on emerging markets, CREDIT said. about U.S. policy 500 shed 4.80 points, or 0.2%, Management, adding that if 79.60 after the company said amid signs of a strong U.S. MARKETS September to 2896.72 and the Nasdaq those tensions are limited to it would feature Colin Kaeper- economy. American factory ac- tends to be a BY RIVA GOLD Composite lost 18.29 points, or the U.S. and China, the impact nick, the National Football tivity accelerated at a faster month when AND AKANE OTANI 0.2%, to 8091.25. on global growth will likely be League quarterback who led pace than economists expected companies try to raise money Activity was relatively smaller. player protests during the na- in August, data from the Insti- in the bond market, as most U.S. stocks began Septem- muted as trading resumed fol- Shares of materials and in- tional anthem, in a new adver- tute for Supply Management participants in the financial ber with declines as investors lowing the Labor Day holiday. dustrials companies, which tising campaign. showed Tuesday. markets have returned from looked ahead to a busy week Analysts said they expect have struggled for ground this Amazon.com jumped 26.80, Investors will be closely summer holidays. of trade negotiations and eco- trade to remain in focus this year amid investors’ uncer- or 1.3%, to 2,039.51, briefly watching other data releases Yields extended their rise nomic data. week, with talks over the tainty over trade policies, topping the level needed to this week, including Friday’s after the Institute for Supply TUESDAY’S Stocks North American Free Trade were hit by fresh selling Tues- push its market value above $1 monthly jobs report. Management said Tuesday MARKETS drifted lower Agreement slated to resume day. trillion. The stock ended off its Elsewhere, the Stoxx Eu- that its manufacturing index shortly after Wednesday. President Trump’s Mining company Freeport- highs for the day but remains rope 600 fell 0.7%, notching its rose to 61.3 in August from the opening weekend threats to leave Can- McMoRan lost 57 cents, or up 74% for the year. third decline in four sessions 58.1 in July. Numbers above 50 bell, then pared declines in the ada out of a new Nafta kept 4.1%, to $13.48 following met- In currency markets, the and finishing at its lowest indicate activity is expanding final hours of trading, with the stocks in Europe and Asia sub- als prices lower, while alumi- WSJ Dollar Index—which mea- level since mid-August. Early across the manufacturing sec- Dow Jones Industrial Average dued on Monday. num-products maker Arconic sures the dollar against a bas- Wednesday, Japan’s Nikkei tor. Economists surveyed by erasing nearly all of its losses The outcome of Nafta talks declined 29 cents, or 1.3%, to ket of 16 currencies—added Stock Average was down 0.3% The Wall Street Journal had for the day. “will give us a hint of whether 22.09, and farm- and construc- 0.4%, notching its longest win- and Hong Kong’s Hang Seng expected a 57.5 reading for Au- The Dow Jones Industrial these trade conflicts are more tion-machinery maker Deere & ning streak since December, Index was down 1%. gust. The unexpectedly strong reading led to a surge in in- vestor expectations that the Federal Reserve will be able to Swine-Fever Outbreak Cuts China’s Pork Supply raise interest rates at least two more times this year. Pol- BY LUCY CRAYMER icy makers have raised rates twice this year and have pen- Pork prices are rising in ciled in two more increases. China as Beijing struggles to Fed funds futures, which in- contain the spread of African vestors use to bet on the di- swine fever, while a trade battle rection of central bank policy, with the U.S. indicate the probability the COMMODITIES will make it Fed will raise interest rates at harder to re- least two more times this year place do- were 75% late Tuesday com- mestic supply with imports. pared with 67% a month ago. Since Thursday, three out- The strength of the econ- breaks of African swine fever omy, combined with a robust have been identified in Anhui labor market, makes it likely province west of Shanghai— that the Fed continues to take where around 15 million pigs an aggressive approach to live—bringing the total to raising interest rates, said seven. Thomas di Galoma, head of The first outbreak was dis- Treasury trading and manag- covered in Liaoning province ing director at Seaport Global near the North Korean border Holdings. at the beginning of August. In “There’s a very good chance the most recent outbreak, 83 we’re going to start seeing an pigs have died from the dis- upward movement in yields,” ease, but more are being Mr. di Galoma said. “I don’t culled. Beijing has tightened think rates can stay where rules on moving live pigs to they are.” prevent the disease from spreading further. AUCTION RESULTS In the past, when pig popu- Here are the results of Tuesday's Treasury auctions. lations were hit by disease or All bids are awarded at a single price at the market- clearing yield. Rates are determined by the difference shortages, China increased between that price and the face value. pork imports. That won’t be as 13-WEEK AND 26-WEEK BILLS

cheap or easy this time since DOMINIQUE PATTON/REUTERS 13-Week 26-Week Beijing has levied significant Prices have risen in southern China as supplies tighten due to restrictions on moving pigs around the country. Applications $138,390,914,300 $127,459,123,400 Accepted bids $48,000,170,300 $42,000,123,400 tariffs on U.S. products amid " noncomp $927,630,800 $718,185,400 trade tensions between the have risen as supplies tight- the disease has been found. In Ministry of Agriculture and fect elevated prices can have " foreign noncomp $105,000,000 $300,000,000 Auction price (rate) 99.470431 98.867556 world’s two largest economies. ened due to restrictions on addition, infected farms are Rural Affairs said in an inter- on official inflation figures. (2.095%) (2.240%) Pork prices have risen on moving pigs around the coun- quarantined. view published on the govern- The disease may have Coupon equivalent 2.135% 2.297% Bids at clearing yield accepted 25.14% 40.90% average around 8% in China try, while in the north an in- African swine fever isn’t ment’s website. spread farther than is known. Cusip number 912796PE3 912796QZ5 since the beginning of August, crease in the number of pigs harmful to humans but is usu- Feng Yonghui, chief analyst Wantanee Kalpravidh, a spe- Both issues are dated Sept. 6, 2018. The 13-week bills according to data from the going to slaughter and a short- ally fatal for pigs. It is highly at Chinese swine-industry re- cialist in animal-disease con- mature on Dec. 6, 2018; the 26-week bills mature on March 7, 2019. Ministry of Agriculture and age of processing capacity contagious, putting at risk search company Soozhu, said trol at the Food and Agricul- FOUR-WEEK BILLS Rural Affairs. Global prices of have hurt prices, said Chenjun China’s more than 400 million the disease would hurt de- ture Organization of the Applications $147,584,519,600 soybeans, an ingredient in pig Pan, a senior industry analyst pigs. China isn’t only the mand as people avoided eating United Nations who is working Accepted bids $55,000,477,600 " noncompetitively $941,563,200 feed, fell last week in part be- at Rabobank. world’s largest pork producer, pork, though the impact could with China to try to contain " foreign noncompetitively $303,000,000 cause of the potential impact The ministry said it had but also the biggest consumer. be limited because the virus the spread, said it can take Auction price (rate) 99.846778 of swine fever on Chinese de- culled more than 37,000 pigs While stopping the spread doesn’t affect humans. He two to three weeks before it (1.970%) Coupon equivalent 2.000% mand, according to Capital and that the animals are of the disease will be arduous, added that pork prices are a starts killing affected animals. Bids at clearing yield accepted 61.33% Economics. banned from leaving or tran- the epidemic remains control- continuing source of concern —Zhou Wei Cusip number 912796QB8 Prices in southern China siting through provinces where lable, a representative for the for Beijing because of the ef- contributed to this article. The bills, dated Sept. 6, 2018, mature on Oct. 4, 2018. U.S. Dollar Gains After Storm in Gulf of Mexico Lifts Oil Prices

BY DAN MOLINSKI nonetheless dump up to 8 The Gulf area accounts for million in June, said people fa- Strong Economic Data AND CHRISTOPHER ALESSI inches of rain in some areas about one-sixth of U.S. oil pro- miliar with the matter. BY DANIEL KRUGER ket currencies. The rout has and might cause flash flooding. duction and 45% of its refining President Trump’s decision been fueled by worries that U.S. oil prices rose Tuesday Phil Flynn, an oil analyst at capacity, said analysts at in May to pull the U.S. out of a The dollar rose Tuesday many of these countries have as tropical storm Gordon bar- Price Futures in Chicago, said Brown Brothers Harriman in a 2015 international agreement with the U.S. economy continu- accumulated too much dollar- reled through the eastern Gulf investors’ focus on the storm research note. “This is helping to curb Iran’s nuclear program ing to exhibit strength amid denominated debt, and may not of Mexico, forcing offshore oil has set aside for now other- oil prices extend last week’s set the stage for the reimpos- rising concerns about the have enough currency reserves producers to cut production wise bearish indicators for oil 5.4% rally,” it said. ing of economic sanctions on stresses enveloping some to protect them from investor and sparking concerns refinery prices, including dollar While the storm was the the Islamic Republic, with emerging markets. runs, analysts said. activity may also be affected. strength, simmering fears of a key factor that drove prices measures directly targeting The WSJ These concerns are being ex- Light, sweet crude for Octo- U.S.-China trade war and ris- higher Tuesday, Tamas Varga, the country’s oil industry set CURRENCIES Dollar Index, acerbated by expectations for ber delivery settled 0.1% ing production from major oil an analyst at brokerage PVM to take effect in November. which mea- the Federal Reserve to continue higher at $69.87 a barrel on producers from the Organiza- Oil Associates, noted that in At the same time, rising sures the U.S. raising rates and by tensions the New York Mercantile Ex- tion of the Petroleum Export- Libya “a week of violence be- production from OPEC and its currency against a basket of 16 between the U.S. and its major change. Brent crude, the global ing Countries. tween rival militias in the cap- allies, including Russia, has others, rose 0.4%, climbing for trading partners, which benchmark, ended virtually The storm halted about 9% ital of Tripoli is also making been helping to keep a “cap on a sixth consecutive trading ses- threaten to slow global com- unchanged at $78.17 a barrel. of offshore oil production in oil bears cautious,” while signs prices,” said Christyan Malek, sion to 90.03. The dollar rose merce. Rising rates typically at- The National Hurricane Cen- the Gulf of Mexico as workers that Iran oil exports are al- an oil analyst at JPMorgan 0.3% against the euro to its tract investors to a currency. ter said tropical storm Gordon on platforms were forced to ready declining due to U.S. Chase. OPEC and Russia highest level against the 19-na- The dollar maintained its is forecast to be upgraded to a evacuate for safety reasons, sanctions also provided bullish agreed in late June to begin tion currency since Aug. 23. gains after the Institute for hurricane by the time the eye said the government’s Bureau support. ramping up crude production Investors continued to buy Supply Management said its of the storm reaches landfall of Safety and Environmental Officials at the state-run after more than a year of hold- dollars Tuesday as measures by manufacturing index rose to near the Louisiana-Mississippi Enforcement. It said at least National Iranian Oil Co. provi- ing back output. policy makers in Argentina, 61.3 in August from 58.1 in July. border Tuesday evening. It 54 offshore oil and gas produc- sionally expect crude ship- Among refined products, which has raised its interest Readings above 50 indicate ac- said the storm could weaken tion platforms, or 8% of all the ments to drop to around 1.5 gasoline futures for October rates to 60%, failed to assuage tivity is expanding across the significantly once it moves in- platforms in the Gulf, were million barrels a day in Sep- delivery fell 0.1% to $1.9942 a concerns about emerging-mar- manufacturing sector. land but said Gordon could evacuated. tember, down from around 2.3 gallon. B14 | Wednesday, September 5, 2018 **** THE WALL STREET JOURNAL. MARKETS Argentina Hit by Emerging-Market Rout BY JULIE WERNAU AND RYAN DUBE December January February March April May June July August 15 As rising U.S. interest rates How many pesos one U.S. dollar buys and the dollar’s resurgence Scale inverted to show the weakening peso ripple through emerging mar- kets, Argentina has been Dec. 28, 2018 April 25 May 8 June 4 Aug. 30 among the countries most- Argentine government raises inflation target. Central bank sells $1.47 billion on Argentina seeks credit Country replaces central-bank Central bank lifts the spot market to support peso. line from IMF. president, halts sale of dollars to policy rate to 60%. punished by investors. The support the peso. rout, sparked by concerns that those relying heavily on dollar 20 borrowing will feel the most pressure, has left investors President Macri's popularity is tumbling as inflation saying the country must pass a sustainable budget and com- has surged and a recession is expected. municate a coherent economic Inflation rate, change from a Mr. Macri’s approval strategy that goes beyond call- year earlier ing on the International Mone- 32% 70% tary Fund for support. On Monday, Finance Minis- 60 Disapprove 25 30 ter Nicolas Dujovne announced measures aimed at regaining 50 investor confidence by reduc- 28 Argentina’s currency ing the primary fiscal deficit to 40 has lost more than 50% of 26 0% of gross domestic product 30 in 2019 from a projected 2.6% its value against the dollar Approve this year. That will involve im- 24 20 so far in 2018. plementing a tax on exports, 2018 2018 cutting the number of minis- 30 tries and reducing spending on public-works projects and the As pressure on the peso rose earlier this year, the central The country's stocks have plunged as foreign government’s payroll, moves bank sold reserves to support the currency. investors depart. that will be politically risky as Foreign-currency debt Foreign-exchange reserves Year-to-date returns, daily Argentina heads into an elec- tion next year. $300 billion $60 billion 20% Argentina’s currency is reel- S&P 500 ing, and its interest rates have 0 35 been raised to 60%, pummel- 200 40 ing investors who piled into MSCI the country in recent years af- –20 Emerging ter it cured a debt default. Markets 100 20 Confidence in Argentina be- –40 gan to wane after the govern- ment increased its inflation target in December, raising 0 0 –60 MSCI Argentina questions among investors 2016 ’17 ’18 2016 ’17 ’18 2018 about the independence of the 40 Sources: Tullett Prebon Information (peso); National Institute of Statistics and Censuses (inflation, debt, reserves); Management & Fit survey, most central bank. That uncertainty recent of 1,600 people conducted July 11-26; margin of error: +/- 2.5 pct. pts. (approval rating); FactSet (indexes) Ana Rivas/THE WALL STREET JOURNAL. was compounded when the central bank cut its interest of eight days the central bank was succeeded by Luis Caputo. bailout package to cover next capital into a beleaguered econ- less reliant on outside capital. rate in January, despite infla- unexpectedly raised its inter- While the move was initially year’s debt payments, causing omy to finance a gradual ap- Mr. Macri’s popularity is tion being well above the new est rate, pushing it to 40% in supported by investors, Argen- the peso to plummet even fur- proach to unraveling the free- sinking amid soaring inflation target range. With pressure in- early May. tina’s peso continued to depre- ther and the central bank to spending policies of Mr. Macri’s and an expected recession. His creasing on the peso, the cen- To stem the currency crisis, ciate amid a rout in emerging- raise its interest rate to 60%. predecessor, Cristina Kirchner. government’s austerity mea- tral bank began to dip into its President Mauricio Macri market currencies, making This week, Mr. Dujovne plans That approach was intended to sures are politically risky reserves to support the cur- sought financial support from payments on the country’s for- to meet in Washington with avoid social unrest as a result ahead of next year’s election rency, selling $1.47 billion on the IMF. In June, the govern- eign debt more expensive. the IMF to request the funds of steep spending cuts. as Argentines are already up- April 25, the biggest interven- ment and IMF agreed to a $50 Catching investors by surprise, after announcing spending But investors say the gov- set about higher utility prices tion in the spot market in billion credit line, while the Mr. Macri last week went on cuts and new taxes. ernment delayed unpopular and opposed to new taxes, years. That had little impact, central-bank president, Feder- TV to request that the IMF Beginning in 2016, Argentina fiscal tightening measures that while powerful unions will op- however, and over the course ico Sturzenegger, resigned and speed up disbursements of the rapidly took on debt to reinfuse would have made Argentina pose cuts to government jobs. HEARD ON THE STREET Email: [email protected] FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard Apple Won’t Be Biggest for Long OVERHEARD Fed Doesn’t Apple Inc. may have got- six months of this year to- Vedanta Resources has Have Reason ten there first, but Ama- Catch Up taled $4.9 billion—triple that come full-circle. The miner zon.com’s rapid ascent to a Revenue per calendar year of the year-earlier period. was the first Indian company To Step Back $1 trillion market value Wall Street also expects Am- to list on the London Stock should put the iPhone maker $300 billion azon to pass Apple in annual Exchange 15 years ago. Next Welcome back from sum- on notice that its days as the sales for calendar year 2019, month it will delist following mer vacation! As far as the world’s most valuable com- Apple according to analyst consen- Chairman Anil Agarwal’s Federal Reserve is con- pany are numbered. 200 Amazon sus figures compiled by Fact- move to take the company cerned, not much happened On Tuesday, Amazon be- Set. private in a deal valuing it at while you were gone. That came the second U.S. com- This is one of those times around $3 billion. leaves them on track to keep pany to reach a market value when investors count all the It is the end of an era. Ve- tightening. of $1 trillion. That happened 100 money they could have made danta was one of several Oh sure, there was news. barely a month after Apple if only they had bought or mining companies from Trade tensions simmered. crossed that threshold. not sold, but Amazon was no emerging markets that listed Turkey and Argentina ran Amazon’s price didn’t hold sure thing during its ascent in London during the com- into the shoals. British politi- that level for long during a 0 and is still no low-risk bet. A modities boom, aiming to tap cians allowed that next rather rough day overall for 2007 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18* ’19* market value of $1 trillion into the city’s deep capital year’s Brexit will be very se- stocks, but it is still notable *Consensus projections puts the stock a little over wells. When things were rious. Controversies swirled how quickly the e-commerce Sources: the companies (historical); FactSet (projections) THE WALL STREET JOURNAL. 100 times forward earnings good for such companies, around President Trump and giant has covered ground. At compared with 17 times for they were very good: Vedanta were stirred by him. the start of the year, Amazon effectively than even its Big advertising. The most nota- Apple. Apple’s current multi- hired Lionel Richie to sing But the types of big wor- was valued at about $566 Tech peers. Apple’s impres- ble of those ventures has ple is the highest the stock when it celebrated a decade ries that have rattled mar- billion while the iPhone sive growth over the past been its cloud service, which has fetched since 2010, of being listed. Yet corporate- kets in summers past weren’t maker was worth about decade has come primarily now accounts for more than though, while Amazon’s has governance concerns were there and the existing, $860 billion. That is a 77% from the iPhone. None of the 11% of total revenue and fallen by nearly 40% since never far away for some, mostly benign trends were. jump for Amazon compared other products the company most of its operating profit. the start of the year thanks while the end of the com- The economy keeps powering with Apple’s 16% rise. Put has launched since have had As a result, Amazon’s rev- to the company’s rising bot- modities boom earlier this de- along and corporate profits, another way, the gap in mar- anywhere near the same im- enue growth since 2007 has tom line. cade was another blow. with the extra sweetener of ket value between the two pact. averaged 28% a year com- Amazon’s investors have Was it all worth it? Per- this year’s tax cut, continue largest tech giants has nar- Amazon, meanwhile, has pared with 22% for Apple never been terribly sensitive haps early on, but its cumula- to swell. Inflation is trending rowed from 34% to about 9% managed to both signifi- and 20% for Google. Amazon about valuation anyway. The tive total return since the IPO right at the Fed’s 2% target, in eight months. cantly boost its already huge also has managed to fatten company’s proven ability to amounts to 268% compared and the unemployment rate Amazon’s meteoric rise retail business while also up its notoriously thin bot- keep delivering the goods with 1,919% for the FTSE All- keeps drifting lower. comes from the fact that it building sizable new ven- tom line in the process. Op- has been well worth the Share Index. Anybody who on Memorial has harnessed its scale more tures in devices, media and erating income in the first price. —Dan Gallagher Day thought the Fed might find a reason to hit the pause button on rate increases needs to update his or her thinking. Investors have done Chinese Companies Chug Ahead Despite Risks to Growth that to some extent. Fed What Chinese growth companies in the past 18 shadow finance has given an best performance since 2014. funds futures imply the slowdown? Some of China’s Trading Places months—largely at the ex- additional boost for the big Meanwhile, the private sec- chances of two more Fed rate biggest companies, particu- Profits as multiple of interest pense of non-state-owned state-owned banks—and an- tor’s financing problems increases this year are about larly its banks, have been payments for Chinese industrial companies, often unlisted, other slap in the face for have worsened: Private in- 70%. That compares with posting their best earnings companies which account for about small private firms, which dustrial firms’ profits were about 50% after the June growth in years, despite all two-thirds of economic out- often have trouble securing equivalent to nine times in- meeting when the Fed last 10 times of the gloom around a trade Private put. bank loans at reasonable terest payments in late 2017, raised rates. fight with the U.S. and rising Forced factory closures in rates through official chan- but had shrunk to just seven Investors may need to bond defaults. 5 heavy industry, aimed at cut- nels. times by mid-2018. raise those estimates as they The buoyant results don’t ting overcapacity, have hit As shadow-bank lending Chinese stock markets return to work refreshed. mean all is well for the 0 State-owned small, private businesses evaporated early this year, now look cheap on the fun- While there are some uncer- world’s second-largest econ- 2007 2010 ’15 hard. But they have helped weighted average lending damentals, but better fi- tainties hanging over the omy. Chinese listed compa- Note: All figures year to date. boost profits at listed state- rates for traditional bank nances for state-owned com- economy, the chances of it nies’ average earnings per Source: CEIC owned competitors like loans hit nearly 6%, their panies have come at a steep materially slowing down this share have slowed from peak Baoshan Iron & Steel Co., highest since mid-2015. With cost for the economy as a year seem slim. double-digit growth rates in by market capitalization—fi- which have gained both mar- deposit rates still low and whole—by crimping the Next year, when the tax- late 2016, but were still 8% nance, industrials and mate- ket share and pricing power. wholesale funding costs more vibrant private sector. cut stimulus starts to fade, higher in the first half, ac- rials—are heavily backed by Healthier balance sheets for drifting down, bank profits That bill is still likely to tariff effects become more cording to Wind Info. That, Beijing. the likes of Baoshan have in have roared back: Their aver- come due in the form of sig- pronounced and Brexit is however, mostly reflects the The government has given turn helped the state-owned age earnings per share rose nificantly slower growth in scheduled to occur, could be health of state-owned firms: two huge shots in the arm to banks that hold their debt. over 4% on the year in early the quarters ahead. a different matter. But that is the top three Chinese sectors the country’s biggest public Beijing’s crackdown on 2018, according to Wind, the —Nathaniel Taplin next year. —Justin Lahart