TUESDAY, JULY 24, 2018 ~ VOL. CCLXXII NO. 19 WSJ.com HHHH $4.00

DJIA 25044.29 g 13.83 0.1% NASDAQ 7841.87 À 0.3% STOXX 600 384.88 g 0.2% 10-YR. TREAS. g 19/32 , yield 2.963% OIL $67.89 g $0.37 GOLD $1,224.00 g $5.50 EURO $1.1694 YEN 111.34 Housing Developments Google What’s Rising mortgage rates have ...while home values have ...due to low inventory. contributed to the drop in sales... continued to increase... 5 million units 30-year fixed-rate Median sales price of existing Available homes for sale, Blasts News mortgage rates homes, change from a year prior by months supply

4 Business&Finance 6% 10% 12 Through

3 oogle parent Alphabet Sales of previously Hurdles Gposted sales and profit 4 8 surpassing analysts’ esti- owned homes declined Parent Alphabet posts mates, a sign the company’s 2 in June for the third 0 strength in online ads will straight month. strong quarter despite help offset the impact of Existing-home sales, 2 4 $5 billion EU fine; new EU regulations. A1 1 seasonally adjusted shares keep rising Home sales slumped in annual rate the second quarter despite BY DOUGLAS MACMILLAN what was likely the strongest 0 0 –10 0 period for U.S. growth in years, 2010 2010 2010 2010 Google’s advertising ma- the latest sign that the ex- chine keeps racing ahead even pansion faces headwinds. A1 Sources: National Association of Realtors via Haver Analytics (sales); National Association of Realtors via Moody’s Analytics (prices, inventory); Freddie Mac (mortgage rates) THE WALL STREET JOURNAL. as regulators try to construct Fannie Mae’s CEO is slated new guardrails to curtail the to leave the mortgage-finance internet giant’s global domi- giant by year’s end, a move nance. that comes at a time of un- Alphabet Inc., Google’s par- certainty about its future. A2 Home Sales Extend Slump ent, reported sales and profit surpassing analysts’ estimates Government-bond on Monday, a sign the com- prices fell world-wide, pany’s strength in online ads roiled by reports that cen- will help offset the impact of tral banks could be about Despite Economic Strength sweeping new European regu- to take another step back lations for online privacy and from easy-money policies. B11 perceived abuses of its posi- The S&P 500 rose 5.15 BY LAURA KUSISTO Home sales have now de- rate profit growth continues said Zillow Senior Economist tion in the market. points to 2806.98, led by fi- AND SHARON NUNN clined on an annual basis in to looks strong. Aaron Terrazas. The results highlight how nancial stocks. The Dow shed five of the first six months But weakness in the hous- Mortgage-application vol- even while Silicon Valley’s 13.83 points to 25044.29. B11 Home sales slumped in the this year, a worrying trend ing market could muddy the ume decreased 2.5% in the leading tech firms are en- Nike is raising salaries second quarter despite what since housing is considered a picture. Housing contributes week ending July 13, com- snared in a range of contro- for more than 7,000 em- was likely the strongest period crucial indicator of overall about 15% to 18% of gross do- pared with a week earlier, in- versies, the underlying busi- ployees and changing how forU.S.growthinyears,the economic health, economists mestic product. Existing-home cluding a 5% decline in pur- nesses are mightier than ever. it awards bonuses to its latest sign that the economic say. sales help drive other sectors chase applications, according Shares of Google rose to global staff as part of a broad expansion faces headwinds. By a number of measures, of the economy. Consumer to an index put out by the $1,285.84 in after-hours trad- compensation overhaul. B1 Existing-home sales slipped the economy looks to be accel- confidence and home-improve- Mortgage Bankers Association ing, reaching an all-time high. 0.6% in June from the previ- erating after a long stretch of ment spending, construction last week. Advertisers have shrugged Fiat Chrysler said its Eu- ous month to a seasonally ad- subpar growth. Economists and mortgage lending tend to New home construction, off negative headlines sur- ropean operations chief re- justed annual rate of 5.38 mil- are forecasting U.S. growth to suffer when home sales slump. which is the major driver of rounding Google and tech rival signed, adding to the turmoil lion, the National Association exceed 4% for the second “The housing market led housing-related employment, PleaseturntopageA6 at the firm after Marchio- of Realtors said Monday. Com- quarter when numbers are re- the general economy out of has also struggled lately. nne’s sudden departure. B1 pared with a year earlier, sales leased on Friday. Jobless the recovery and now it’s lead- Housing starts declined 12.3% Heard on the Street: Results Cooperman told clients in June declined 2.2%. claims are falling, and corpo- ing” it toward a slowdown, PleaseturntopageA2 soothe cost worries...... B12 of his Omega hedge fund that he would be returning their capital and turning his Boat in Missouri Tragedy Is Brought to Surface firm into a family office. B10 Highflying Medical Whirlpool cut its profit outlook as it booked a charge on its European operations Firm Falls to Earth, and said it wouldn’t be able to offset the effect of steel tariffs with higher prices. B3 Its Sales Questioned World-Wide Practices at MiMedx, a skin graft maker,

The Trump administra- included channel stuffing, ex-workers say tion exchanged threats with Iran, turning to a Just last year, MiMedx running the company. longstanding security con- Group Inc. was a health-care A Wall Street Journal re- cern and a top foreign-pol- star. The maker of surgical view of company emails, icy focus of the president’s and tissue-graft products had court documents and inter- key supporters. A1 dazzled investors with five nal complaints, plus inter- Trump is considering straight years of over 50% views with current and for- revoking the security sales growth, boosting its mer employees, paint a clearances of six former market value to near $2 bil- picture of a company seeking senior national security lion. That its products helped to grow at almost any cost. officials, including former veterans heal combat wounds Several former employees made the story even better. alleged that MiMedx some- CIA Director Brennan. A4 times shipped more skin Hackers working for By Gretchen grafts than had been ordered

Russia claimed hundreds Morgenson, and booked them as sales, a NATHAN PAPES/THE SPRINGFIELD NEWS-LEADER/ASSOCIATED PRESS of victims last year in a Joseph Walker practice known as channel SALVAGE MISSION: The U.S. Coast Guard on Monday supervised the successful raising of the duck-style campaign that put them and Charley Grant stuffing. tour boat that sank last week in near-hurricane-force winds on a Missouri lake, killing 17 people. A3 inside the control rooms One ex-employee said for of U.S. electric utilities, Fortune magazine in Sep- some tissue implants, a federal officials said. A3 tember named MiMedx the MiMedx sales rep in Califor- The administration is fifth-fastest-growing public nia recorded inaccurate advancing a plan to freeze company in America, calling dates and surgeons’ names Trump and Iran Leader Swap fuel-economy standards its wound-care products and improperly listed recipi- for new cars and trucks, “modern medical alchemy.” ents as John or Jane Doe. and to escalate its fight Parker “Pete” Petit, the com- In February the Journal pany’s 78-year-old chief ex- reported that MiMedx hadn’t Taunts as Sanctions Loom against California. A2 ecutive, told employees in a reported payments made to Trump’s legal team has memo: “Frankly, this is a doctors who use or promote submitted a counteroffer to lifetime achievement.” its products, despite a fed- BY JESSICA DONATI OR YOU WILL SUFFER CONSE- Rouhani said earlier. The com- Mueller on a possible inter- Now MiMedx is nursing eral law requiring most drug AND NANCY A. YOUSSEF QUENCES THE LIKES OF ments were tougher than view with the president. A4 its own wounds. In June, the and medical-device makers WHICH FEW THROUGHOUT usual for the Iranian presi- WASHINGTON—The Trump The EU is cautiously company said an internal in- to disclose payments or gifts HISTORY HAVE EVER SUF- dent, who is seen in the Ira- administration exchanged betting on its top official, vestigation had shown that to doctors. The company FERED BEFORE.” nian context as a moderate. threats with Iran, turning to a Juncker, to dissuade its reported financial results said its products were ex- The tweet late Sunday night Iranian officials on Monday longstanding security concern Trump from escalating the going back to 2012 were no empt from the rule. appeared to refer to comments warned they would retaliate longer reliable and would MiMedx provided employ- and a top foreign-policy focus by President Hassan Rouhani against any U.S. military ac- trans-Atlantic trade fight. A5 have to be restated. ees with a way to report is- of President Donald Trump’s warning the Trump adminis- tion. North Korea has begun Mr. Petit has since re- sues that troubled them. Eight key supporters. tration against continuing Mr. Trump’s threat wasn’t dismantling its main satel- signed. The stock has ex-employees said they were In a Twitter message ad- hard-line policies against Iran. accompanied by any U.S. mili- lite launch facility, an appar- plunged. Authorities are in- fired after they spoke up. dressed “To Iranian President “America should know that PleaseturntopageA5 ent confidence-building vestigating. An interim CEO In response to a list of Rouhani,” Mr. Trump wrote: peace with Iran is the mother measure by Pyongyang. A6 who specializes in restruc- questions about company “NEVER, EVER THREATEN of all peace, and war with Iran Gerald F. Seib: Partisan divisions are growing...... A4 Authorities identified turing troubled businesses is PleaseturntopageA8 THE UNITED STATES AGAIN is the mother of all wars,” Mr. the gunman who opened fire on a busy Toronto street Sunday, killing two people INSIDE Economists Struggle With Word Economy and injuring 13 others. A5 iii The Senate voted over- BASEBALL whelmingly to confirm CONSIDERS Tired of paper inflation, academics demand brevity Wilkie as the new secretary of Veterans Affairs. A2 UNIVERSAL DH BY BEN LEUBSDORF professor David Autor com- talk less. The AEA announced CONTENTS Markets...... B11-12 pared a 94-page working pa- last year it would launch a Business News.. B3,5 Opinion...... A13-15 SPORTS, A12 Capital Journal...... A4 Sports...... A12 A backlash is building per about the minimum wage journal dedicated to publish- Crossword...... A11 Technology...... B4 against inflation—the kind to “being bludgeoned to death ing only concise papers, at Equities...... B7 U.S. News...... A2-4 showing up in economics jour- with a Nerf bat” and started a least by economists’ stan- Heard on Street. B12 Weather...... A11 nals. Twitter hashtag, #ThePaperIs- dards—nothing longer than Life & Arts...... A9-11 World News. A5-6,16 The average length of a TooDamnedLong. 6,000 words, or about 15 dou- RISKS IN BEING published economics paper “It was a very good paper,” ble-spaced pages. (For compari- > has more than tripled over the Mr. Autor said in a later inter- son, this article is a svelte 958 TOO MUCH OF past four decades, and some view, but it set him off be- words). A TEAM PLAYER academics are sick of wading cause it represented the “log- “Certainly not all papers through them. At this year’s orrhea of our current state of should be short,” said MIT econ- American Economics Associa- scholarship.” omist Amy Finkelstein, founding s 2018 Dow Jones & Company, Inc. All Rights Reserved LIFE & ARTS, A9 tion conference, Massachu- Let’s get to the point: Econ- editor of what’s being called setts Institute of Technology omists want economists to PleaseturntopageA8 A2 | Tuesday, July 24, 2018 ***** THE WALL STREET JOURNAL. U.S. NEWS U.S. Presses Bid to Ease Emissions Rules

BY TIMOTHY PUKO standards for vehicle model the federal government and California is intent on fight- years 2022-2025 that would since then has effectively set ing to maintain the ability to President Donald Trump’s have aimed to bring the figure regulatory standards for the set standards for cars sold in administration is advancing a to roughly 36 miles per gallon broader market. its jurisdiction, and is likely to plan to freeze fuel-economy in real-world driving by 2025, Many Trump advisers have challenge in court each step standards for new cars and based on complex government criticized the state’s auton- the administration takes to ad- trucks, and to escalate its fight calculations averaged out over omy, claiming California has vance its plan. The retirement against California’s power to all vehicles sold. overstepped its legal authority of Supreme Court Justice An- set regulatory standards for One obstacle to that plan is in order to push an environ- thony Kennedy—and the nomi- the entire U.S. auto market, California, which holds exemp- mental agenda. The White nation of conservative Judge according to people familiar tions allowing it to impose House is now approving a plan Brett Kavanaugh to replace with the matter. emissions standards more to end California’s ability to him—has emboldened some in The new rules, which could stringent than those applied set its own rules, a plan that the administration to push a be released as early as this by the federal government. California has already sued the more confrontational chal- week, would halt plans to keep California has already sued to administration to stop. lenge against California, ac- raising requirements for effi- stop the Trump administra- The auto industry, worried cording to a person familiar ciency. The increases had been tion, and the auto industry has about prolonged uncertainty with the administration’s

set up by a collaboration be- lobbied both sides to strike a JANE TYSKA/TNS/ZUMAor PRESS potentially facing two duel- thinking. tween California and former deal that would avoid a rift The plan sets up a fight over California’s stricter standards. ing sets of rules that raise Mr. Trump, in his May President Barack Obama’s reg- that leaves the country with manufacturing costs, has meeting with auto executives, ulators as a way to address two sets of rules. Instead of tries to eliminate or override climate concerns brought the asked the White House to had directed his cabinet offi- climate change. pursuing a deal, the plan California’s authority. Obama administration and compromise with California. cials to pursue a deal with Cal- The Trump administration’s spearheaded by the Transpor- Other states also follow California into deeper align- The administration’s latest ifornia. But a series of meet- plan would eliminate gradual tation Department and the En- California’s lead and its regu- ment. Sacramento received a step effectively ends any ings since then were limited increases in fuel-efficiency vironmental Protection Agency latory influence has grown as further waiver in 2012 from chance of a deal. largely to introductions. U. S. WATCH Building Set for Demolition Collapses in Miami Beach, Injuring One Person

MUELLER INVESTIGATION Manafort Trial Is Pushed to Next Week Paul Manafort is set to face a jury next week in the first trial from special counsel Robert Muel- ler’s investigation, after a federal judge agreed to push the trial back so the defense team could finish going through evidence. “There are equities and good reasons on both sides of this mo- tion,” U.S. District Judge T.S. Ellis said in moving the trial of Presi- dent Donald Trump’s former cam- paign chairman to July 31 from its scheduled Wednesday start. Mr. Manafort’s team said it only received access to thousands of pages of records from Mr. Manafort’s bookkeeper earlier this month, calling the documents “the heart of the case” and saying they required more time to review. Mr. Mueller’s inquiry has re- sulted in charges against 32 people, including 25 Russians. The special counsel’s team is in- vestigating allegations of Rus- sian efforts to interfere in the 2016 election, but prosecutors in next week’s trial will focus heav- ily on Mr. Manafort’s finances. Mr. Manafort faces charges of tax fraud, bank fraud and failing to file reports on foreign bank ac-

GIORGIO VIERA/EFE/ZUMA PRESS counts. Mr. Manafort has pleaded DEBRIS PILE: Emergency responders converged on the scene Monday. The high-rise building was being torn down so a new condominium tower could be constructed. not guilty and denies all charges. —Aruna Viswanatha

VETERANS AFFAIRS “I don’t know if people are growth, the lack of inventory getting scared,” she said. “I has meant that prices have Senate Clears Wilkie Fannie CEO to Leave, Home Sales was just very surprised that continued growing much To Lead Department we didn’t sell right away.” faster than wages and infla- Weakness in the housing tion, compounding affordabil- The Senate voted overwhelm- Adding to Uncertainty Weakness market is the latest sign that a ity concerns. The median sale ingly Monday to confirm Robert BY LAURA KUSISTO old, helmed Fannie as the com- nine-year-old economic expan- price for an existing home in Wilkie as the new secretary of the AND NICK TIMIRAOS pany stabilized from the worst sion faces challenges, such as June hit a new all-time high of Department of Veterans Affairs. losses of the housing down- Continues the new tariffs that have in- $276,900, up 5.2% from a year Mr. Wilkie, a longtime De- Fannie Mae’s chief execu- turn and has repositioned the ContinuedfromPageOne creased the prospect of a earlier, according to NAR. fense Department official, was tive is slated to leave the company to remain central to in June from the prior month, trade war between the U.S. The slowdown in sales was confirmed in an 86-9 vote. mortgage-finance giant by the functioning of U.S. mort- according to the Commerce and China or Europe. concentrated at the bottom end As the VA chief, Mr. Wilkie year’s end, creating a question gage markets. Department. That was the Thepaceofgrowthand of the market, indicating that will run a department with more mark about who will lead an But it remains in limbo be- largest monthly percentage fears that trade tension could affordability concerns are a than 350,000 employees and a important part of the housing cause neither Congress nor the drop in about a year and a bring inflation have also raised major contributor to the slow nearly $200 billion budget. market at a time of uncer- Trump administration has ad- half, driven by construction expectations that the Federal spring selling season. Sales of The VA referred request for tainty about its future. vanced a legislative or admin- declines in all regions of the Reserve will be more aggres- homes priced at $100,000 to comment to the White House. Timothy J. Mayopoulos, a istrative overhaul of Fannie U.S. for almost all types of sive in raising interest rates. $250,000 fell 7.1% in June, President Donald Trump said in financial-services lawyer who and its smaller sibling, Freddie housing. Traders in the federal-funds fu- compared with a year earlier, a statement that he applauds as CEO helped lead the turn- Mac. Both companies, which Realtors say some buyers tures market now believe there while sales of homes between the confirmation. In a tweet late around of Fannie from the together guarantee nearly half have grown weary of the run- is a near certainty that the Fed $750,000 and $1 million grew Monday he added, “Robert will depths of the financial crisis, of U.S. mortgages, have been up in prices, especially after will raise short-term rates at 6%, according to NAR. do a great job for our Vets.” will remain chief executive un- under government conserva- mortgage rates increased. least once more this year, and Strong price growth also —Ben Kesling til the end of the year and torship since the crisis. Brook Hogan, a real-estate a better than 60% chance of indicates that there is still ro- yield the president title to Da- Mr. Mayopoulos joined Fan- agent in Portland, Ore., said two or more rate increases, ac- bust demand for homes, and NEW MEXICO vid Benson, Fannie’s chief fi- nie Mae when its future was she has seen signs that con- cording to CME Group. that if inventory continues to nancial officer. even more in question and sumers are growing more cau- increase, the market could re- State Fails At-Risk Fannie said Monday it is helped lead it to relative politi- tious, especially at the higher gain momentum in the latter Students, Court Says searching for a new CEO and cal and financial stability. He end of the market. “It’s defi- Some buyers have half of the year. that Mr. Mayopoulos hasn’t started as the company’s gen- nitely slowing. Buyer confi- Still, some 40% of home The state of New Mexico announced what he will do eral counsel in April 2009 and dence is a big deal,” she said. tired of the run-up in sales each year take place in failed to provide at-risk students next. later added the position of Jessica Aebersold, a 30- prices, especially the critical spring selling pe- a proficient public education and The new CEO will be taking chief administrative officer. He year-old who works at a com- riod of March through June. has until next year to address over an organization “without became CEO in June 2012 and pany that rents photo booths, since rates increased. Even if sales pick up later in shortcomings, a state district a clear political future,” said took a hefty pay cut as a result said she and her husband took the year, they are unlikely to court ruled in a yearslong case David Stevens, president and of administrative restrictions three weeks to sell their Seat- fully make up the lost ground. filed by civil rights groups. chief executive of the Mort- related to the government’s tle-area home—in a town “I don’t think the housing- Plaintiffs alleged the state gage Bankers Association. “It’s backstop of the company. where multiple offers in a sin- Any interest-rate increases market sky is falling,” said didn’t adequately fund public going to be a challenging time —Maria Armental gle weekend had been more could further depress home Ralph McLaughlin, chief econ- schools nor provide programs going forward.” and Andrew Ackerman the norm. sales. “One of, if not the most, omist at Veritas Urbis Econom- and services needed to ensure Mr. Mayopoulos, 59 years contributed to this article. Ms. Aebersold said she, too, rate-sensitive sectors in the ics. “The fact that the price students are “college, career and expected the home to sell in the economy is housing,” said Tor- growth remains strong leads civic ready,” particularly students first weekend, but the day the sten Slok, chief international me to believe this isn’t a cycli- who are low-income, Native THE WALL STREET JOURNAL house was listed, four others economist at Deutsche Bank cal issue, at least just yet.” American, English-language learn- (USPS 664-880) (Eastern Edition ISSN 0099-9660) (Central Edition ISSN 1092-0935) (Western Edition ISSN 0193-2241) went up in the neighborhood. It Securities. After a long stretch where ers and those with disabilities. took three weekends before The average interest rate on economists have blamed a lack Attorneys for plaintiffs in the Editorial and publication headquarters: 1211 Avenue of the Americas, New York, N.Y. 10036 they received a cash offer a 30-year fixed-rate mortgage of inventory for this year’s consolidated case filed by the Published daily except Sundays and general legal holidays. Periodicals postage paid at New York, N.Y., and other mailing offices. $30,000 below the asking price. already has risen to 4.57% in lackluster housing-market per- Mexican American Legal Defense Postmaster: Send address changes to The Wall Street Journal, June from 4.03% in January, ac- formance, there are recent in- and Educational Fund and the 200 Burnett Rd., Chicopee, MA 01020. cording to Freddie Mac. dications that the trend is be- New Mexico Center on Law and All Advertising published in The Wall Street Journal is subject to the applicable rate card, copies of CORRECTIONS By increasing the monthly ginning to reverse. But that Poverty also contended that stu- which are available from the Advertising Services Department, Dow Jones & Co. Inc., 1211 Avenue of cost of owning a home, higher suggests demand may be wan- dents lacked access to social and the Americas, New York, N.Y. 10036. The Journal reserves the right not to accept an advertiser’s order. AMPLIFICATIONS Only publication of an advertisement shall constitute final acceptance of the advertiser’s order. mortgage rates force some ing as buyers take longer to health services, including tutors. Letters to the Editor: Fax: 212-416-2891; email: [email protected] buyers to seek out less expen- purchase, leaving properties The state plans to appeal the sive properties. They can push on the market longer. ruling. New Mexico Education NEED ASSISTANCE WITH YOUR SUBSCRIPTION? Paterson, N.J., was mis- those at the bottom out of the There were 1.95 million ex- Secretary Christopher Ruszkowski By web: customercenter.wsj.com; By email: [email protected] spelledasPattersoninaRe- market altogether. isting homes available for sale said in a statement that “unfortu- By phone: 1-800-JOURNAL (1-800-568-7625); Or by live chat at wsj.com/livechat view article Saturday about More notably, they may act last month, up 4.3% from the nately, the judge missed the boat bucket lists. as a disincentive for current prior month and 0.5% from a with this ruling.” He added that REPRINTS & LICENSING owners, who enjoy historically year ago. That is the first “education spending in New Mex- By email: By phone: low mortgage rates, to sell and yearly inventory increase ico is now at an all-time high” [email protected]; 1-800-843-0008 Readers can alert The Wall Street Journal to any errors in news articles lose that rate. since the middle of 2015, ac- and the state is “seeing signifi- by emailing [email protected] or While rising mortgage rates cording to Lawrence Yun, the cant student achievement gains.” GOT A TIP FOR US? SUBMIT IT AT WSJ.COM/TIPS by calling 888-410-2667. typically help slow price trade group’s chief economist. —Tawnell D. Hobbs THE WALL STREET JOURNAL. ** Tuesday, July 24, 2018 | A3 U.S. NEWS Russia Hacks Its Way Into U.S. Utilities

DHS says networks of U.S. in the spring of 2016 and continued throughout 2017, ex- trusted vendors were ploited relationships that utili- penetrated, leading to ties have with vendors who have special access to update plants’ control rooms software, run diagnostics on equipment and perform other BY REBECCA SMITH services that are needed to keep millions of pieces of gear Hackers working for Russia in working order. claimed hundreds of victims The attackers began by us- last year in a giant and long- ing conventional tools—spear- running campaign that put phishing emails and watering-

them inside the control rooms hole attacks, which trick EUGENE GARCIA/EPA/SHUTTERSTOCK of U.S. electric utilities where victims into entering their Jason McMillan, who was paralyzed in the Oct. 1 shooting attack in Las Vegas, speaks out Monday at a news conference in California. they could have caused black- passwords on spoofed web- outs, federal officials said. sites—to compromise the cor- They said the campaign likely porate networks of suppliers, Las Vegas Victims Take On MGM is continuing. many of whom were smaller The Russian hackers, who companies without big bud- worked for a shadowy state- gets for cybersecurity. BY ZUSHA ELINSON tory, as well as relatives of the described being shot—and un- one person is responsible for sponsored group previously Once inside the vendor net- deceased, in an effort to pro- able to move—at the country this horrendous act of violence identified as Dragonfly or En- works, they pivoted to their Survivors of the Las Vegas tect itself from potentially sig- music concert on Oct. 1. and he took his own life rather ergetic Bear, broke into sup- real focus: the utilities. It was massacre on Monday sounded nificant legal claims. The com- “I rarely ask for help and I than face justice.” posedly secure, “air-gapped” a relatively easy process, in off on the lawsuits filed against pany’s legal maneuver seeks to love helping other people,” Mr. Ms. DeShong said that “get- or isolated networks owned by many cases, for them to steal them by MGM Resorts Inter- put the battle over liability for McMillan said at a news con- ting everyone in the same utilities with relative ease by credentials from vendors and national that seek to shield the the massacre in federal court. ference in Newport Beach, Ca- court, is the best and fastest first penetrating the networks gain direct access to utility company from liability in the “It’s not only insulting, it lif., on Monday with other sur- way to resolve these cases.” of key vendors who had networks. attack. enrages me to think that this vivors. “I couldn’t help Numerous lawsuits have trusted relationships with the Then they began stealing The company owns the company can just try to skip anybody.” been filed against MGM for al- power companies, said offi- confidential information. For Mandalay Bay Resort & Casino out on their responsibility and Mr. McMillan said that leged lapses, including failing cials at the Department of example, the hackers vacuumed where gunman Stephen Pad- liability for what happened,” MGM’s suit brought up bad to notice the shooter was Homeland Security. up information showing how dock fired onto a crowd of con- said Jason McMillan, who was memories. stockpiling weapons in his “They got to the point utility networks were config- certgoers from a room on the paralyzed from the waist down Debra DeShong, a spokes- suite. Ms. DeShong said the where they could have thrown ured, what equipment was in hotel’s 32nd floor, killing 58 in the attack and has been sued woman for MGM, said it was company filed actions against switches” and disrupted power use and how it was controlled. and injuring hundreds last Oc- by MGM. “heartbreaking to hear these people who have retained at- flows, said Jonathan Homer, They also familiarized them- tober. Seated in a wheelchair, Mr. personal accounts of an un- torneys and either have sued chief of industrial-control-sys- selves with how the facilities MGM earlier this month McMillan, a sheriff’s deputy speakable tragedy. No one wins or threatened to sue. Plaintiff tem analysis for DHS. were supposed to work, be- sued survivors of the deadliest from Riverside County, Calif., from endless litigation and it attorneys have filed suits in DHS has been warning util- cause attackers “have to learn shooting in modern U.S. his- held his face in his hand as he will not change the fact that both state and federal court how to take the normal and that could take years to re- make it abnormal” to cause dis- solve, she said. Blackouts could have ruptions, said Mr. Homer. The company argues in its Their goal, he said: to dis- case that a federal law—the been caused, guise themselves as “the peo- Support Anti-Terrorism by Fos- Homeland Security ple who touch these systems tering Effective Technologies on a daily basis.” Act, or SAFETY Act—protects officials said. DHS is conducting the brief- it from liability stemming from ings—four are planned—hop- the massacre. ing for more industry coopera- Passed in 2002, the law says tion. One thing the agency is that “sellers” of antiterrorism ity executives with security trying to learn is whether technology, such as security clearances about the Russian there are new infections, and companies like the one hired to group’s threat to critical infra- whether the Russians have fig- handle the Las Vegas concert, structure since 2014. But the ured out ways to defeat secu- may be held responsible for briefing on Monday was the rity enhancements. mass attacks, but that buyers first time that DHS has given In addition, DHS is looking of such services, like the enter- out information in an unclassi- for evidence that the Russians tainment company, are fied setting with as much de- are automating their attacks, shielded from liability claims, tail. It continues to withhold which investigators worry could according to MGM’s lawsuits. the names of victims but now presage a large increase in hack- Mr. McMillan, the sheriff’s says there were hundreds of ing efforts. “To scale, they’re deputy, hasn’t filed a lawsuit victims, not a few dozen as eventually going to have to au- against MGM but is exploring had been said previously. tomate,” Mr. Homer said. his legal options, said Mark

It also said some companies “You’re seeing an uptick in DAVID BECKER/GETTY IMAGES Robinson, a lawyer represent- still may not know they have the way government is sharing Police stand guard along the street outside the music festival on the night of the massacre. ing him. been compromised, because threats and vulnerabilities,” the attacks used credentials of said Scott Aaronson, a cyber- actual employees to get inside security expert for Edison utility networks, potentially Electric Institute, the utility Duck Boat Raised From Missouri Lake making the intrusions more industry trade group. He said difficult to detect. information sharing and pene- Experts have been warning tration detection have gotten BY JOE BARRETT cover over the hull and win- amphibious vehicle, was wear- derstorm warning for the about the Russian threat for much better since the Dragon- dows on the sides, has been ing a life preserver, according area. some time. fly attacks began. The U.S. Coast Guard on criticized by safety experts for to an incident report filed Sat- “The real objective is going “They’ve been intruding It isn’t yet clear whether Monday supervised the suc- making it difficult for passen- urday by the Missouri State to be what kind of information into our networks and are po- the hackers used their access cessful raising of the duck- gers to exit in an accident. It Highway Patrol. was on hand when they went sitioning themselves for a lim- to prepare the battlefield for style tour boat that sank was unclear whether the The NTSB is investigating out” and how the decision was ited or widespread attack,” some future, devastating blow, Thursday evening in near hur- boat’s cover had come apart how the tour operator, Ride made to proceed with the tour, said Michael Carpenter, for- investigators said. For exam- ricane-force winds on a Mis- in the accident or might have the Ducks Branson, which is said National Transportation mer deputy assistant secretary ple, many experts fear that a souri lake, killing 17 people. been ripped open by rescue owned by Ripley Entertain- Safety Board Member Earl of defense, who now is a se- skilled technician could use The boat appeared largely workers. ment, used weather informa- Weener in a news conference nior director at the Penn Bi- unfettered access to change intact with holes in its canvas Coast Guard officials de- tion provided by a private ser- Saturday night. “This was a den Center at the University of some equipment’s settings. top and some side windows clined to comment on the vice to determine to proceed squall that came up rather sud- Pennsylvania. “They are wag- That could make them unreli- still in place, according to state of the boat, pending fur- with the cruise. The first 911 denly.” ing a covert war on the West.” able in unexpected ways, caus- footage of the raising Monday ther investigation by the Na- calls about the sinking came In addition to the NTSB Russia has denied targeting ing utility engineers to do morning. Orange life vests tional Transportation Safety in at 7:09 p.m. Thursday, offi- probe, the Missouri State High- critical infrastructure. things that would result in ex- hung intact from the top of Board. cials said, about half an hour way Patrol has launched a sep- Mr. Homer said the cyber- tensive damage and poten- the boat. None of the 31 people after the National Weather arate criminal investigation attack, which surfaced in the tially lengthy blackouts. The boat’s design, with a aboard the boat, a 1944 GMC Service issued a severe thun- into the accident, officials said. Full Docket for Judge Overseeing Migrant Family Reunifications

BY JACOB GERSHMAN all the separated children liv- Judge Sabraw joined the from the defendant of decep- ing in federally run shelters Dana Makoto Sabraw federal court in California’s tive trial tactics on the part of It’s a busy time for U.S. Dis- and release them to their Southern District in 2003 as the prosecutor. trict Judge Dana Makoto Sa- mothers and fathers after an appointee of President At the time of his 2003 braw. checking criminal records and • 60 years old. George W. Bush after stints as Senate confirmation, Judge On Friday in San Diego, he verifying parentage. • Serves on the U.S. District a municipal and state judge in Sabraw was among about a presided over jury delibera- As the clock has ticked to- Court for the Southern San Diego County. half-dozen Asian-Americans tions in a criminal case ward the July 26 due date, the District of California It isn’t the first time he has on the federal bench; now they against a man trying to prove 60-year-old Republican has as- in San Diego. refereed controversial litiga- number around 40. He is the he isn’t an illegal alien from sumed an unusual role for a • Appointed by President tion. In 2016, he upheld a Cali- son of a Japanese mother and Mexico but a California-born judge, simultaneously playing George W. Bush in 2003. fornia law prohibiting school French Canadian father who American citizen. And on watchdog, enforcer and moti- • Ordered the Trump parents from opting out of immigrated to the U.S. as a Monday, Judge Sabraw over- vational coach in making sure administration to stop vaccination requirements. child and served in the Army saw jury selection in an Apple his demands are met. separating children from “He clearly knew the ins during the Korean War. His Inc. patent dispute. Two or three times a week, undocumented parents and outs of every case before parents met in Japan, where Those matters come on top he has summoned Justice De- seeking asylum. him,” said Dorit Rubinstein his father was stationed. of what is by far the biggest partment immigration lawyers • Set a deadline of July 26 for Reiss, a professor at the Uni- The couple settled in the case of his career: the legal ef- for status updates. Transcripts thousands of migrant children versity of California, Hastings Sacramento Valley in the 1950s fort to reunite thousands of of the hearings reflect his rep- to be reunited with their College of Law who wrote after landlords refused to rent migrant parents and their chil- utation as a judge who main- UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA families. about that case and spent a to them in San Francisco. dren. tains calm and order. day in his courtroom. She said From his father and neigh- Last month, Judge Sabraw When a Health and Human he posed “thought-provoking bors, Judge Sabraw acquired made national headlines when Services official involved with court’s deadline,” he said, add- reunifications could be done questions” with a “matter-of- what may be his greatest pas- he granted an injunction com- the reunification stated in a ing that the short window was safely and swiftly, he praised fact delivery” that helped ease sion: bird hunting. manding the Trump adminis- filing that the agency couldn’t no excuse for not doing DNA the lawyers. “I think we have tensions in the room. He has pursued grouse, quail tration to put an end to its meet his time frame without testing and background checks accomplished a great deal to- Judge Sabraw’s biggest set- and pheasant through grass- practice of splitting up undoc- putting children at risk, his re- prior to releasing the children. day,” he said. “So much of the back on the bench came in lands and plains across the umented, asylum-seeking fam- action was less fury than dis- “It is not appreciated, and the court’s involvement can be 2014, when a federal appeals country, accompanied by two ilies streaming into the U.S. appointment. government can do a lot bet- rendered unnecessary just court overturned a drug con- English setters, a black Labra- from Mexico and Central “The document reads as if ter.” through communication and viction, finding he had dor and his two best friends, a America. He gave immigration the children were simply re- But after being reassured working through these “abused [his] discretion” when court administrator and an in- authorities 30 days to identify united in order to meet the on Monday of last week that things.” he brushed off a complaint tellectual-property lawyer. A4 | Tuesday, July 24, 2018 PWLC101112HTGKBFAM123456789OIXX **** THE WALL STREET JOURNAL. U.S. NEWS Partisan Divisions Over Trump Are Growing seems disinclined to give they have a positive view of buys Mr. Trump support and ground to his detractors in Stark Divide the Russian leader. forbearance. Politically, hopes of winning them over. The gap between how much the president's party and the opposing At the same time, though, steady job growth can paper Rather, he often seems to do party approve of the president is greater now than in recent memory. the strength of those pro- over many other doubts, the reverse—show that he is Trump feelings is more than though that also means eco- Presidential approval by party affiliation prepared to antagonize them Difference between matched by the intensity of nomic deterioration would as of July of the second year the president’s and further. anti-Trump sentiments. be especially dangerous for President’s party Opposing party Independents opposing parties CAPITAL JOURNAL Some 52% of voters overall the president. fter an eruption of 0% 20 40 60 80 100 disapprove of the job he is By Gerald F. Seib criticism over his un- Trump 79 ppts. doing, and a stunning 44% he core Trump sup- A willingness to publicly Obama 70 say they strongly disapprove. port group always has criticize Russian President And the gap between Re- combined those drawn 48 T From the moment he rode Vladimir Putin at their Hel- G.W. Bush publican and Democratic to him for economic reasons down the escalator at his sinki summit meeting this Clinton 58 views has never been (a belief the global economy eponymous Fifth Avenue month, for example, Mr. wider; indeed, it is the wid- and its rules are stacked skyscraper to announce his Trump backtracked Source: WSJ/NBC News telephone polls most recently of 900 registered est partisan gap ever found against them), as well as candidacy three years ago, slightly—but then promptly voters conducted July 15–18; margin of error: +/- 3.27 pct. pts. in the Journal/NBC News those who are drawn to him President Donald Trump has slammed into forward gear THE WALL STREET JOURNAL. survey. A mere 9% of Demo- for cultural reasons (a feel- divided Amer- again by inviting Mr. Putin crats say they approve of the ing that Mr. Trump shares icans. to another summit in the their firms. In the survey ing, the highest share within job he is doing. Eight in 10 their view that society’s But the U.S. this fall. If that left his completed late last week, a president’s own party at Democrats say they strongly elites, immigrants and liber- Trump Divide critics sputtering, well, that voters overall gave Mr. this stage of a presidency disapprove. als are combining to hijack is growing seems to be the way Mr. Trump a 45% job-approval since President George W. Who is left in the middle, their traditional lifestyle). wider and Trump likes them. rating, a notch higher than Bush’s standing after the uncertain what they think of It is sometimes hard to deeper. Trump supporters seem the previous month, and the 9/11 terrorist attacks. a President Trump? Precious tell whether Trump backers As Mr. more willing to give him highest of his presidency. few. Asked their feelings are with him more for eco- Trump moves from contro- wide berth, even on policy And that was at the end of a he share of Americans about Mr. Trump personally, nomic or cultural factors— versy to controversy, views moves—on immigration, two-week period of excep- who say they strongly a mere 9% of all voters said though Stephen Bannon, his of the president, pro and Russia or trade—on which tional turmoil, even by T approve of Mr. they are neutral. presidential campaign chair- con, are hardening, with sup- they harbor doubts. “The Trump standards. Trump’s job performance Here’s the most intriguing man and populist political porters embracing him more more Mr. Trump gets criti- The president’s job ap- rose to 29%, the highest question about this picture: guru, says the distinction enthusiastically and detrac- cized by the media, the more proval remains low by his- mark so far. How is Mr. Trump able to isn’t important: “To the pop- tors growing more feverish his base seems to rally be- torical standards at this Mr. Trump clearly is sup- hold on to support among ulist/nationalist movement, in their opposition. The mid- hind him,” says Democratic stage of his term. Still, what ported by Republicans who his base in a climate that the economic is cultural,” he dle ground, never very popu- pollster Fred Yang. is striking is the solid sup- actually question some of his even many of them acknowl- says. lous, now looks as sparse as All of these trends can be port Mr. Trump is now win- most controversial policies. edge is chaotic and discon- In any case, the line sepa- a flower bed in February. seen in a new Wall Street ning inside his own camp. A Even as Mr. Trump is work- certing? rating Trump lovers from At this point, it is hard to Journal/NBC News poll, con- remarkable 88% of self-iden- ing overtime to build a warm For starters, it is impossi- Trump haters, never hard to see what would reverse this ducted by Mr. Yang and Re- tified Republicans say they relationship with Mr. Putin, ble to discount the extent to find, seems to be growing trend. Certainly Mr. Trump publican Bill McInturff and approve of the job he is do- only 8% of GOP voters say which a strong economy brighter. Piece of Space Program Enters Washington’s Orbit President Weighs Pulling Clearances From Ex-Officials

BY VIVIAN SALAMA officials retain clearance after leaving government is long- WASHINGTON—President standing, national security of- Donald Trump is considering ficials and analysts said. revoking the security clearances Having a security clearance of six former senior national se- doesn’t automatically afford a curity officials, the White House former official access to infor- said Monday, moving to punish mation. Rather the former of- them for comments purportedly ficial must have a need to politicizing the investigations know information on which he into Russian interference in the or she is briefed, analysts said. 2016 election. “There really isn’t that much “Making baseless accusa- precedent of removing clear- tions of improper contact with ance of former national secu- Russia or being influenced by rity officials unless they are in- Russia against the president is dicted or convicted of some extremely inappropriate,” said criminal offense,” said Evan White House spokeswoman Lesser, president of Clearance- Sarah Sanders, without speci- Jobs, a career website. fying. A spokeswoman for Mr. Mc- The threat, which national Cabe, who was fired from the FBI security analysts described as two days shy of his retirement in

PABLO MARTINEZ MONSIVAIS/ASSOCIATED PRESS unprecedented, prompted con- connection with information he LANDED: An Orion crew module, part of NASA’s Space Launch System, was on display on the South Lawn of the White House Monday. cerns it was an effort by the provided to a Wall Street Journal president to silence critics. reporter ahead of the 2016 elec- “An enemies list is ugly, un- tion, said his “security clearance democratic, and un-American,” said Rep. Adam Schiff (D., Ca- More Voters Oppose Overturning Roe lif.), ranking member of the Having a security House Intelligence Committee. Ms. Sanders told reporters clearance doesn’t BY MICHAEL C. BENDER She was confirmed by the Sen- tional right, including 59% that the administration is look- automatically afford Gap Widens ate on a vote of 68-31, with who said they felt strongly on ing at the clearances of former access to information. WASHINGTON—As the Sen- By 3-to-1, those polled don’t nine Senate Republicans back- the matter, the poll found. Central Intelligence Agency Di- ate nears debate on a new Su- think the 1973 landmark abortion ing her. Meanwhile, 23% said that rector John Brennan, former preme Court nominee who case giving women a Mr. Kavanaugh’s nomina- overturning the ruling would Federal Bureau of Investigation could give the panel a conser- constitutional right to an tion has animated Democratic be a good idea. That gap be- Director James Comey, former vative edge, a majority of vot- abortion should be overturned. politicians mentioned as po- tween opponents and support- Director of National Intelligence was deactivated when he was ers say they are increasingly tential presidential candidates ers of reversing the Roe deci- James Clapper, former director terminated, according to what Should Roe v. Wade opposed to undermining a in 2020 much more than Dem- sion has been widening since of the National Security Agency we were told was FBI policy.” be overturned? woman’s right to have an ocratic senators facing com- 1991, according to poll results. and the CIA Michael Hayden, Benjamin Wittes, a Brook- 80% July abortion and are becoming petitive re-election battles this Mr. Kavanaugh’s nomina- former national security ad- ings Institution scholar and 71% more likely to say they sup- 70 No, don’t overturn year. tion comes as 50% of voters, a viser and U.N. Ambassador Su- sometime spokesman for Mr. port abortion-rights candi- The night of his nomina- record high in the WSJ/NBC san Rice and former FBI Deputy Comey, said he no longer had dates, a new poll shows. 60 tion, Sen. Kirsten Gillibrand poll, said they approve of the Director Andrew McCabe. a security clearance. Mr. According to a Wall Street 50 (D., N.Y.) was the first speaker job the Supreme Court is do- The episode appeared to Comey was fired by Mr. Journal/NBC News poll, Mr. at a rally opposing his nomi- ing. That is due largely to a have been touched off by a re- Trump in 2017 and has been Trump’s latest pick for the 40 Yes, overturn nation. Sen. Elizabeth Warren surge of positive feelings from mark on Twitter Monday highly critical of the president, High Court, Brett Kavanaugh, of Massachusetts sent a fund- conservatives and others in morning from Sen. Rand Paul in a book and in other venues. 30 enters confirmation proceed- 23% raising email within minutes the core of the Republican (R., Ky.) urging Mr. Trump to Mr. Hayden, who maintains ings with support from 32% of 20 after the pick was announced Party, according the poll. revoke Mr. Brennan’s clearance. a security clearance, told The voters, compared with 26% op- 1990 2000 ’10 telling supporters she would The poll also found a rise in The individuals left govern- Wall Street Journal that he is posed. Another 41% said they vote against his nomination. the number of voters who said ment service months or years occasionally called on to pro- Source: WSJ/NBC News telephone polls most don’t have enough information recently of 900 registered voters conducted “Brett Kavanaugh was cho- they prefer pro-choice candi- ago under varied circum- vide his view on national secu- yet. July 15–18; margin of error: +/- 3.27 pct. pts. sen because conservatives are dates, 44%, compared with stances, and some said Mon- rity matters but he doesn’t at- Mr. Kavanaugh appears to THE WALL STREET JOURNAL. confident that he would over- 26% who said they preferred day they either no longer had a tend classified briefings. be the most politically divisive turn Roe v. Wade,” Ms. Warren abortion-rights opponents. security clearance or no longer Mr. Clapper, on CNN, said, Supreme Court nominee since said they are opposed to the wrote in the email. That gap of 18 percentage received classified briefings. “This is kind of a petty way of President Barack Obama se- Republican president’s pick. A record 71% of voters said points has grown from a 15- Millions of Americans hold retribution for speaking out lected then-Judge Sonia Soto- That compares with 61% of Re- they were opposed to over- point spread in 2015, and just security clearances, needed for against the president.” mayor in 2009. publicans who said the same turning Roe v. Wade, the 1973 a 3-point gap in 2005, accord- many government and private- —Nancy A. Youssef In the poll, more than half when Mr. Obama selected Jus- ruling that recognized abor- ing to the Wall Street Journal/ sector jobs. The practice of and Dustin Volz of Democratic voters, 52%, tice Sotomayor nine years ago. tion as a woman’s constitu- NBC News poll. having senior national security contributed to this article. New Offer for Interview Is Made to Mueller

BY REBECCA BALLHAUS Monday that an interview be- tive authority to appoint and election interference. tween the special counsel and dismiss members of his ad- The special counsel this WASHINGTON—President the president was “still on the ministration. year outlined for the presi- Donald Trump’s legal team has table.” Mr. Mueller is investigating dent’s legal team more than submitted a counteroffer to The president’s legal team whether Trump associates col- 40 questions he planned to special counsel Robert Mueller is open to him answering luded with Russia’s efforts to ask in a possible interview on a possible interview with questions about possible collu- interfere in the 2016 election, with Mr. Trump. the president that could allow sion with Moscow, Mr. Giuliani and whether Mr. Trump A spokesman for the special for questions about collusion said, but is less willing to have sought to obstruct justice in counsel declined to comment. with Russia but curtail inqui- Mr. Trump discuss questions the firing of Federal Bureau of Mr. Giuliani said the coun- ries related to obstruction of about obstruction of justice. Investigation Director James teroffer the legal team submit- justice. “We think the obstruction of it Comey in May 2017, while the ted to Mr. Mueller doesn’t ad- As negotiations for such a is handled by Article 2 of the FBI’s Russia probe was under dress the time, date or place

sit-down are set to enter their Constitution,” Mr. Giuliani way. Mr. Trump has repeatedly for an interview but added: EVAN VUCCI/ASSOCIATED PRESS eighth month, Rudy Giuliani, a said, referring to the provision denied collusion and obstruc- “That will be the easiest thing Rudy Giuliani, a lawyer for President Donald Trump, said an lawyer for Mr. Trump, said that gives the president execu- tion, and Moscow has denied to figure out.” interview with the president was ‘still on the table.’ THE WALL STREET JOURNAL. **** Tuesday, July 24, 2018 | A5 WORLD NEWS Top EU Official Aims to Calm Trade Fight Bloc hopes Juncker, in trated his pro-American out- EU imposed in response to the On the Table look with the story of his fa- metals tariffs. U.S. visit, can dissuade The U.S. and European Union have a lot at stake as leaders meet this week to discuss trade. Both are ther being liberated from a “Juncker is not naive,” one Trump from imposing heavily reliant on each other for exports. Top destinations for merchandise exports, by share, 2017: prison camp by American sol- EU official said. “He knows diers at the end of World War that what Trump announces additional tariffs To EU Canada Mexico China Others II, after being forced into the on Twitter happens.” German army, the official said. Mr. Trump first met Mr. From BY VALENTINA POP U.S. 18% 18 16 8 4 35 Mr. Juncker’s task could be Juncker in May 2017, at a small Japan complicated by recent criti- gathering in Brussels. Soon af- BRUSSELS—The European To U.S. China Switzerland Turkey cism and even calls for his res- ter, a comment by Mr. Trump, Union is cautiously betting on ignation after video aired of that “the Germans are bad, From its top official, Jean-Claude 20% 11 8 5 4 52 him having trouble walking at very bad” to the U.S. because of Juncker, to persuade President EU a gala dinner at the recent their trade surplus in cars, Donald Trump not to escalate Russia Others North Atlantic Treaty Organi- leaked to the German press. Mr. the trans-Atlantic trade fight. Sources: U.S. Census Bureau; European Commission THE WALL STREET JOURNAL. zation summit in Brussels. The Juncker at a press conference Appeals from European footage sparked speculation he days later in Italy played down leaders have failed to dissuade Iran, after he assailed the ada, Mr. Juncker avoided has closely coordinated on was drunk, which he denied. Mr. Trump’s remark, acknowl- Mr. Trump from imposing tar- country in an all-caps tweet other leaders’ attempt to sway strategy and tactics with Ger- Mr. Juncker has said he suf- edging the leak was accurate. iffs on imports of steel and alu- early Monday. The EU sup- Mr. Trump, considering it fu- man Chancellor Angela fers from sciatica, a nerve con- Mr. Trump later pulled Mr. minum and threatening new ports the 2015 Iran nuclear tile, his aides said. Mr. Trump Merkel, French President Em- dition that affects his legs. Juncker aside to chastise him ones on cars, but officials say deal, from which Mr. Trump invited Mr. Juncker to the manuel Macron and Dutch In an attempt to keep dis- for discussing a confidential they believe Mr. Juncker’s blunt withdrew the U.S. in May. White House at the meeting. Prime Minister Mark Rutte, cussions in Washington fo- conversation, EU officials said. speech and disdain for protocol When Mr. Trump an- Mr. Juncker’s toughness has the European leader to visit cused on economics, Mr. Mr. Juncker retorted that the has won some begrudging re- nounced tariffs in March, Mr. fostered a personal rapport, the White House most re- Juncker plans to warn of harm remarks had been confirmed spect from the U.S. leader. Juncker promised EU retalia- EU officials said. White House cently, the EU official said. to the U.S. from an escalating by Mr. Trump’s then-economic During a White House visit tion by declaring “we can also officials didn’t respond to re- EU officials say there could trade fight, officials said. Last adviser, Gary Cohn, on the slated for Wednesday, the Eu- do stupid.” At a meeting of the quests for comment on Mr. be a personal appeal, as in Can- week, he promised EU coun- sidelines of the same event. ropean Commission president Group of Seven large econo- Trump’s view. ada, where the 63-year old poli- termeasures if Mr. Trump pro- Mr. Juncker’s willingness to will focus on arguing the EU is mies in June, Mr. Trump re- “I am going there upbeat and tician from Luxembourg—a ceeds with car tariffs. rebut Mr. Trump “left a cer- Washington’s friend, not foe, peatedly called Mr. Juncker a relaxed,” Mr. Juncker said last small country sandwiched be- The EU’s ambassador to tain impression” that he would as Mr. Trump has labeled the “brutal killer,” several people week. He acknowledged limited tween Germany, France and Bel- Washington, David O’Sullivan, stand up for the EU, a senior bloc, he said. in the room said, because of success in swaying Mr. Trump, gium—opened his speech with a said countermeasures could EU official said. Officials are braced for the what Mr. Trump considers un- but pledged to hammer away at “passionate plea for trans-At- target almost one-fifth of total —Laurence Norman in unexpected—including the fair EU trade policies and fines data. “It’s not about fake news, lantic cooperation,” a senior EU U.S. exports to the EU, valued Brussels and Rebecca possibility that Mr. Trump will on U.S. tech companies. it’s about objective facts.” official in the room said. at nearly $300 billion, or 100 Ballhaus in Washington raise unrelated issues, such as At the G-7 summit in Can- Since the G-7, Mr. Juncker There, Mr. Juncker illus- times the countermeasures the contributed to this article. Ethnic Turkish Star Quits Germany’s Soccer Squad

BY BOJAN PANCEVSKI and politicians of racism after which, he said, withdrew its facing months of criticism for support. Daimler said it was BERLIN—A fierce debate meeting Turkish President Re- looking into the allegations. about identity and integration cep Tayyip Erdogan, a contro- But his harshest criticism is escalating in Germany fol- versial figure in Germany be- was reserved for Reinhard Grin- lowing the resignation of an cause of his crackdown on del, the president of the Ger- ethnic Turkish soccer star political opponents. man soccer association, or DFB. from the national team over Mr. Ozil and fellow player “In the eyes of Grindel and what he deemed “racism and Ilkay Gundogan met Mr. Erdo- his supporters, I am German disrespect.” gan in May at a hotel in Lon- when we win, but I am an immi- Mesut Ozil, born in Germany don for a photo session in grant when we lose,” he wrote. to Turkish immigrant parents, which they gave their jerseys DFB said it regretted the was one of the most prominent to the Turkish leader. Mr. Gun- resignation, but rejected the players on a celebrated na- dogan, also a German citizen, claims of racism. tional squad that won the 2014 wrote on his jersey “for my Political reaction to Mr. World Cup. His decision to president, with great respect.” Ozil’s decision was divided. A quit, laid out on Twitter on The meeting took place during spokeswoman for Ms. Merkel Sunday evening, is dominating the campaign for June general said the chancellor “appreci- national news, reflecting the elections in Turkey. ates him very much.” tension gripping the country It ignited a heated discus- But others were more criti- since the 2015 migration crisis sion about the loyalty of na- cal. “With all respect for the brought one million asylum tional-team players with immi- family roots, national players seekers to Germany and fueled grant roots, spilling over into must be ready to accept criti- a surge in far-right politics. a broader debate in the coun- cism when they allow them- Germany’s soul-searching co- try of 82 million—including selves to be used for election

incides with a wider discussion more than three million KAYHAN OZER/PRESIDENTIAL PALACE/REUTERS campaigning,” said the govern- sparked on the soccer field Turks—about the role of Islam Mesut Ozil gave his national team jersey to Turkish President Recep Tayyip Erdogan in May. ment’s integration commis- about what it means to be Euro- and whether immigrants can sioner Annette Widmann-Mauz. pean, notably in France, where be truly German. Top politi- ject of a similar, if less heated, politics or elections. It was would have such a picture taken Germany and Turkey have a team of players of mostly im- cians have embraced migrant controversy when he refused about me respecting the high- again. “Whether it had been the been locked in a diplomatic migrant origin sailed to victory communities in recent years, to sing the German national est office of my family’s coun- Turkish or the German presi- dispute since Berlin rejected in this year’s World Cup. but Chancellor Angela Merkel’s anthem on the soccer field. try,” Mr. Ozil wrote. dent, my actions would’ve been Mr. Erdogan’s bid to hold elec- The 29-year-old soccer star, decision to open the doors to “I have two hearts, one Ger- He said politicians and com- no different,” Mr. Ozil wrote. tion rallies in the country. The who also plays for England’s thousands of asylum seekers man and one Turkish.…For me, mentators were expressing The soccer star also aimed majority of Turks in Germany Arsenal team, accused soccer has ratcheted up tensions. having a picture with Presi- their “previously hidden racist vitriol at one of his sponsors, who voted in recent polls sup- authorities and some media Mr. Ozil had been the sub- dent Erdogan wasn’t about tendencies” and added that he the car maker Daimler AG, ported Mr. Erdogan.

WORLDWATCH behavior to join our pressure campaign,” Mr. Pompeo said. Trump He has drawn parallels to CANADA Union as the fires on either side the administration’s “maxi- of Athens left lines of cars mum pressure” policy on Police Identify Man torched, charred farms and for- Escalates North Korea, which has been In Toronto Shooting ests, and sent hundreds of peo- subjected to sanctions in- ple racing to beaches to be evac- tended to force it to give up Authorities identified the gun- uated by navy vessels, yachts Iran Taunts its nuclear arsenal and ballis- man who opened fire on a busy and fishing boats. ContinuedfromPageOne tic missiles. In Iran’s case, U.S. Toronto street Sunday as a 29- Winds reached 50 mph as tary preparations. The U.S. measures would include pres- year-old man named Faisal Hus- authorities deployed the coun- military has been gradually sure on countries to reduce sain. He killed two people and in- try’s entire fleet of water-drop- easing its posture in the Mid- their purchases of Iranian oil jured 13 others, police said. ping planes and helicopters to dle East region in recent to zero, with very few case-by- Police declined to speculate give vacationers time to escape. months, reflecting what Penta- case exemptions. about the shooter’s motives. His Military drones remained in the gon officials said was a drop- Mr. Trump’s Sunday tweet family issued a statement saying air in the high winds to help of- off in unsafe or provocative was similar to a threat he

their son was struggling with se- ficials direct more than 600 fire- Iranian acts toward ships trav- IRANIAN PRESIDENCY OFFICE/ASSOCIATEDmade PRESS to North Korea in front vere mental-health challenges, in- fighters below. eling through the Strait of Iranian President Hassan Rouhani spoke in Tehran on Sunday, of reporters last August—of cluding psychosis and depression. —Associated Press Hormuz since late last year. As “fire and fury like the world All told, the gunman shot 15 of Monday, the Pentagon Angeles on Sunday, castigated Navy has no immediate plans has never seen.” people, killing an 18-year-old SYRIA hadn’t begun to move any U.S. Iran’s clerical leaders and to replace it, defense officials A month later, North Ko- woman and a 10-year old girl, and forces or shift military posture called on other countries to said. rean leader Kim Jong Un re- injuring 13 others, police said. The Damascus Condemns near Iran. join the U.S. campaign of pres- Mr. Trump withdrew the sponded, “I will surely and gunman was killed in a shootout Rescuers’ Evacuation White House spokeswoman sure and sanctions against the U.S. from the 2015 Iran nu- definitely tame the mentally with police officers. Sarah Sanders dismissed sug- Islamic Republic. clear accord in May, and the deranged U.S. dotard with The victims ranged in age from The government condemned a gestions from some Democrats Iranian Defense Minister administration later issued 12 fire.” 10 to 59 years old, said Detective multilateral operation to evacuate that the president was trying Amir Hatami said the U.S. and demands for a new deal. Mr. The escalating rhetoric Sgt. Terry Browne, who is leading hundreds of rescue workers from to distract from his political its allies “don’t understand Pompeo warned at the time could push Iran to seek to gain the investigation. Some are suffer- the country as a “criminal process” troubles at home, including any other language than that the U.S. would impose the more leverage over the U.S. ing from “life-changing injuries,” he intended to destabilize Syria. negative reaction to his rap- force,” as he announced a new “strongest sanctions in his- before entering into any kind said, but declined to elaborate. Authorities have described port during his meeting with tory” unless Iran agreed. Teh- of talks, said Trita Parsi, presi- Mr. Hussain’s family issued an the civil defense search-and-res- Russian President Vladimir ran swiftly rejected the terms, dent of the National Iranian email statement offering their cue group, popularly known as Putin last week in Helsinki Iran officials said which include one requiring a American Council, a Washing- “deepest condolences to the fami- the White Helmets, as a terror “The president is respond- wholesale change in its mili- ton-based advocacy group. It lies who are now suffering on ac- organization. ing to Iran and he’s not going Monday they would tary posture in the Middle would be a mistake, Mr. Parsi count of our son’s horrific actions..” The group rose to promi- to allow them to continue to retaliate against any East, where it is backing continued, to compare the Toronto shootings have surged nence as it filmed its operations make threats against Amer- groups of fighters in Iraq and problems of Iran and North in recent years. Police recorded to rescue civilians from Syrian ica,” she told reporters Mon- U.S. use of force. Syria. Korea because U.S. allies in 228 shootings this year as of July government airstrikes in the day. “If anyone’s inciting any- The U.S. is at odds with the Middle East were unlikely 22, an 11% rise from last year. country’s war. The government thing, look no further than to European allies over its deci- to act as brokers. —Jacquie McNish alleges the group stages videos. Iran...The president has the sion to leave the Iran nuclear and Vipal Monga Russia has accused the group of ability, unlike a lot of those in production line of air-to-air agreement, but allied govern- staging chemical weapons at- the media, to focus on more missiles in Tehran. ments will have difficulty GREECE tacks on civilians and blaming than one issue at a time.” And Mohsen Rezaei, a for- protecting their businesses Crafted in gold & platinum them on the government. John Bolton, the national mer commander of the Iranian from the return of U.S. sanc- At Least 20 Killed Rush! On Saturday, more than 400 security adviser, reiterated the Revolutionary Guard Corps, tions. For example, the U.S. Service As Wildfires Rage rescuers and family members president’s warning on Mon- warned Mr. Trump on Twitter wants countries to cut back Available were evacuated through Israel to day. that 50,000 U.S. troops are in their consumption of Iranian Gale-fanned wildfires raged Jordan. Syria called it a “smug- “President Trump told me range of Iranian weapons. oil by November, and have through holiday resorts near gling operation” that was evi- that if Iran does anything at The U.S. previously main- warned of so-called second- Greece’s capital, killing at least dence of a Western conspiracy all to the negative, they will tained an aircraft-carrier ary sanctions against busi- 20 people by early Tuesday and to overthrow the government. pay a price like few countries strike group in the Middle nesses and governments that injuring more than 104, including The White Helmets have finan- have ever paid before,” he East but doesn’t have one don’t comply. 11 in serious condition. cial backing from the U.S., the said. there now. The USS Harry S. “We are asking all nations Immortalize Your Anniversary Greece sought international U.K. and other nations. Secretary of State Mike Truman aircraft carrier left who are sick and tired of the in Roman Numerals! help through the European —Associated Press Pompeo, in an address in Los the region last week and the Islamic Republic’s destructive JOHN-CHRISTIAN.COM 888.646.6466 A6 | Tuesday, July 24, 2018 ****** THE WALL STREET JOURNAL. WORLD NEWS Firms Gear Up To Cash In on North Korea Hopes rise for access slows in the South. The Samsung task force is to a market of 25 following global developments million people, though related to North Korea, attend- ing forums and seminars on large obstacles remain economic cooperation between the Koreas and looking at po- BY JONATHAN CHENG tential areas for opportunities, a spokesman said. SEOUL—Some of South Ko- It is still early days: The rea’s biggest companies, along most stringent sanctions with law firms and a cottage placed on North Korea remain industry of business consul- in effect, and progress toward tants, are eyeing potential op- the country’s nuclear disarma- portunities in North Korea, ment remains fragile. U.S. Sec- one of the world’s most diffi- retary of State Mike Pompeo cult business environments. was optimistic after meeting After months of rapproche- with North Korean counter- ment—including summit meet- parts this month—despite

ings between North Korean North Korean accusations of DITA ALANGKARA/ASSOCIATED PRESS leader Kim Jong Un and South “gangster-like tactics”—but he North Korea has vast mineral reserves and cheap labor. A conveyor belt moves beer at the Taedonggang Brewery in Pyongyang, Korean President Moon Jae-in, warned last week against any and one between Mr. Kim and slackening in sanctions en- and making presentations to presidential office sent an 11- companied retired basketball Complex, a joint business park President Donald Trump— forcement. companies such as the Hyun- member team to the North Ko- star Dennis Rodman to Pyong- that combined South Korean hopes are rising for more open South Korea’s President dai conglomerate, says Cho rea-Russia border to look into yang to meet with Mr. Kim. capital and North Korean labor access to North Korea, a coun- Moon has said any economic Yong-joon, a partner at Shin & the stalled project and other Mr. Spavor, whose nonprofit just north of the inter-Korean try of 25 million people with incentives and inducements Kim. opportunities for economic Paektu Cultural Exchange is or- border, 124 South Korean busi- vast mineral reserves and lots can come only after North Ko- Shin & Kim had represented collaboration. ganizing a trip to a North Ko- nesses were left with losses of cheap labor. rea has followed through on its three major South Korean A crop of business consul- rea trade fair in August, lists and some of their assets Samsung C&T Corp., the de promise of denuclearization. companies—steelmaker Posco, tants, many of them boasting seafood trading, manufactur- stranded after the Seoul gov- facto holding company of Shin & Kim, a Seoul law state-owned Korea Railroad longtime relationships in ing, textiles, infrastructure, ernment shut down the com- South Korea’s biggest and firm that worked on one of the Corp. and family-controlled North Korea, have stepped up tourism and real estate as ar- plex in 2016 amid increased best-known conglomerate, cre- most ambitious inter-Korean shipping company Hyundai to offer their services to eas of interest for prospective tensions. ated a North Korea task force economic projects before it Merchant Marine Co.—in the would-be investors in the businesspeople. Tony Michell, a British busi- in May, staffed by an executive was scuttled two years ago, Rajin-Khasan rail-and-port in- North. Sanctions aside, many of ness consultant who until and three managers. has seen an uptick in interest frastructure venture on the “Everybody I’ve spoken to is the concerns that bedevil in- 2009 operated a full-time of- Samsung’s construction in North Korea investment this North Korea-Russia border, aware that it’s too soon for in- vestments in frontier markets fice in Pyongyang that helped arm, which has built some of year as diplomacy has picked which was intended to bring vestment, but knowing that, if loom over North Korea, includ- companies find business pros- the world’s tallest skyscrapers up steam. Russian coal to South Korea, things change in the next year, ing restrictions on repatriation pects there, said inquiries and and is building subway lines in In recent days, the firm has until the South Korean govern- they want to be the first ones of profits, potential seizure of referrals have been on the rise. Singapore and Riyadh, Saudi been talking to South Korea’s ment canceled the project two to get in,” says Mike Spavor, a assets and uneven enforcement “We envision doing it again, Arabia, sees opportunity in the unification, trade, and land- years ago. Canadian who has lived in of laws. when legally possible,” Mr. Mi- North as economic growth and-infrastructure ministries, This month, South Korea’s both Koreas and who has ac- At the Kaesong Industrial chell said. For Tokyo Games, Heat is a Worry Pyongyang Begins BY ALASTAIR GALE To Raze Rocket Site TOKYO—A city near the North Korea has begun dis- The moves to dismantle facil- capital reported Japan’s mantling its main satellite ities at Sohae, on the northwest highest-ever recorded tem- launch facility, an apparent con- coast, in contrast, “represent a perature of 106 degrees, as a fidence-building measure by significant confidence-building heat wave that is scorching Pyongyang amid concerns about measure on the part of North the nation raises concerns the nation’s slow progress on Korea,” said Joseph Bermudez, about the health of athletes shutting down its nuclear weap- an analyst for 38 North. and spectators at the Sum- ons programs. Mr. Bermudez, relying on mer Olympics in 2020. commercial satellite imagery Authorities have reported By Jonathan Cheng in from July 20 and 22, said that at least 23 deaths related to Seoul and Michael R. given the progress of the activ- the high temperatures, in- Gordon in Washington ity, the dismantling had likely cluding one woman who was begun in the past two weeks. found collapsed in a field New satellite images pub- “These facilities are believed north of Tokyo on Monday. lished Monday by North Korea- to have played an important Nine high-school students focused website 38 North role in the development of tech- were sent to a hospital with showed Pyongyang was razing nologies for the North’s inter- heat-related symptoms after its rocket-engine test stand and continental ballistic missile pro- attending a baseball game in a related building at the Sohae gram,” Mr. Bermudez said of the southern Japan that was part Satellite Launching Station, the rocket-engine test stand and a of the annual national sum- country’s primary launch site related building.

mer tournament. NATSUKI SAKAI/AFLO/ZUMA PRESS for rockets since 2012. Some experts played down While it is rare for tem- Tokyo pedestrians try to keep cool. A record temperature was recorded northwest of the capital. The move, which hasn’t been the value of dismantling activity peratures to top 100 degrees announced by North Korea’s at Sohae by the regime. in Japan, they often exceed ing of the next Summer urban heat island effect. shade. state media, is an apparent fol- In addition to the long lag 90 degrees during the sum- Olympics, due to run from This month, the head of an “We certainly need to low-through on a promise that between the summit and the mer months, which are also July 24 to Aug. 9, 2020. IOC inspection team said the make sure there is medical President Donald Trump said activity at Sohae, it isn’t clear very humid. The Japan Mete- When Tokyo last hosted the organizers would consider all attention available. And it’s was made to him during his that Pyongyang’s dismantling orological Agency said the Games, in 1964, they were options to limit the impact of spectators as well as athletes June 12 summit meeting in of the engine test stand is irre- record temperature was re- held in October to avoid the Tokyo’s summer heat on the that we have to take care of,” Singapore with North Korean versible, said Vipin Narang, a corded in the city of Kum- heat. But International Olym- Games. John Coates, chair of the IOC leader Kim Jong Un. nuclear expert and associate agaya, about an hour north- pic Committee rules now re- Since then, start times for Coordination Commission for In the six weeks since that professor of political science at west of Tokyo by train, at quire host cities to stage the some events have been Tokyo 2020 said at a press meeting, concerns have grown the Massachusetts Institute of midafternoon on Monday. Games in July and August. moved earlier in the day—in- conference this month. about North Korea’s sincerity Technology. The previous record, which Since 1964, average July- cluding the marathon—which The next soccer World in fulfilling its pledges as part The overall importance of was marginally lower, was to-August temperatures in will begin at 7 a.m. instead Cup, in Qatar in 2022, was of the detente—particularly the Sohae missile site has also set in 2013 in southern Tokyo have risen several de- of 7:30 a.m. moved to the end of the year following delays by North Ko- likely diminished for Pyong- Japan. grees, as heat radiating off Local authorities are look- because of concerns about rea in returning the remains of yang, Mr. Narang added, since The burst of extreme heat, asphalt and buildings as well ing into other measures, such the summer heat. Stadiums U.S. soldiers killed in the Ko- North Korea, apparently satis- which has been going on for as coming out of car exhausts as paving sidewalks that re- there are also set to get rean War, the most immediate fied with its missile design, more than a week, has rekin- and air conditioners stays flect less heat and planting state-of-the-art air condi- of the four points agreed to in had shifted to mass produc- dled questions about the tim- trapped at night, a so-called larger trees to provide more tioning. the Singapore statement. tion last year.

which said Google has abused their data and target ads to Alphabet the dominance of its Android Adding Up them. mobile operating system. An- Google maintained its leadership position in the ad market as its parent company, Alphabet, surpassed The privacy law may have droid is used by more than analysts’ second-quarter estimates. even benefited Google by mak- 80% of the world’s smart- ing its offerings more appealing Has Strong phones. Google said it is ap- Ad revenue continues to soar...... propelling Alphabet’s stock price to a new all-time high. than those of smaller players in pealing the charges. Alphabet’s segment revenue Stock performance the market. Excluding a charge for the Other “It was a safe choice to buy Quarter $30billion $1,300 After-hours trading high: fine, the company reported bets [advertising] using Google’s ContinuedfromPageOne per-share earnings of $11.75, $0.15B $1,285.84 tools and inventory,” Mr. Wi- 25 Facebook Inc., which for compared with a year-earlier 1,200 eser said. months has grappled with crit- figure of $8.90 and the con- 20 It’s too early to tell whether icism about its data privacy sensus analyst estimate of the EU’s findings against practices. Facebook is ex- $9.66, according to analysts 15 Other 1,100 Google’s use of Android will pected to report a sharp in- polled by FactSet. Google force the company to change its revenue* crease in revenue when it re- Revenue, excluding traffic 10 business deals. The regulator ports second-quarter results costs paid to partners, rose $4.4B 1,000 ordered Google to stop forcing 5 Wednesday as companies con- 25% from a year earlier to Google ad Android handset makers to revenue tinue to buy ads on the social- $26.24 billion. Analysts were 0 900 bundle Google’s Search and media site and its Instagram expecting $20.9 billion, ac- $28.1B Chrome apps on devices that unit. cording to FactSet. 2016 ’17 ’18 JFMAMJJ also include the Google Play “Between Google and Face- “Google continues to be an *Other Google revenue includes hardware, cloud and app-store sales store for third-party apps, a book, the two of them keep online ad business that’s a fan- Sources: the company (revenue); FactSet (daily closes); WSJ Market Data Group (after hours) THE WALL STREET JOURNAL. ruling which could give handset taking share of an industry tastic business,” said Sean makers leverage to extract pay- that doesn’t grow as much as Stannard-Stockton, a portfolio phone partners, such as Apple Google’s capital expenditures employees, an increase of 4,000 ments from Google to pre-in- they are,” said Pivotal Re- manager at Ensemble Capital, Inc., to be the default search nearly doubled to $5.5 billion from the first quarter. stall those apps. search analyst Brian Wieser. which owns shares in Google. engine on smartphones. Pay- from a year earlier, as the com- As Google faces more pres- Asked about whether Google Google is expected to con- “It is unbelievably steady for a ments to those distribution pany spends on workers and in- sure from regulators, investors sees any changes to its Android trol 31% of the global ad mar- business of this size.” partners rose 49% in the sec- frastructure to maintain its are worried that new laws and business, Chief Executive Sun- ket this year, down slightly One closely watched mea- ond quarter, and now account lead in emerging technologies. restrictions will impede its dar Pichai said he is working from 31.7% in 2017, according sure in the company’s earnings for 13% of the revenue gener- The biggest increase in growth. In addition to the fine “to find a solution above all to estimates from eMarketer. reports is how much Google is ated by the company’s website spending was on research and related to Android, European that preserves the tremendous The company on Monday paying to maintain its leader- traffic. That is down slightly development and on boosting regulators this year began en- benefits of Android to users.” said its second-quarter profit ship position in the ad market, from 13.2% in the first quarter, the ranks of technical workers, forcing a new privacy regula- Android, which is free to fell 9% to $3.2 billion because especially as more users shift marking the first sequential Chief Financial Officer Ruth Po- tion forcing Google and other handset makers, “creates more of a $5 billion fine levied last to mobile phones. decline for this important rat said Monday on a call with internet companies to get con- choice for everyone, not less,” week by the European Union, Google pays fees to smart- measure in three years. analysts. Alphabet has 89,000 sent from web users to collect Mr. Pichai said. A8 | Tuesday, July 24, 2018 ** THE WALL STREET JOURNAL. IN DEPTH

lished in five top-ranked eco- well, a Ph.D. to understand. defensively, including redundant your research in the deep exist- a chance to get published,” said nomics journals swelled from 16 “It’s bad for everybody,” said material even in early versions ing literature on the subject, it University of Chicago econo- Economists pages to 50 pages, according to Katharine Anderson, an econo- of papers to head off possible “quickly adds up to a long pa- mist Anil Kashyap. an analysis by University of Cali- mist at Carnegie Mellon Univer- quibbles that might come up per,” said University of Massa- Ms. Case said they felt their fornia, Berkeley economists Ste- sity. “It’s bad for the authors during the review process, said chusetts-Amherst economist findings on mortality “would Demand fano DellaVigna and David Card. because it takes years to put to- Samuel Bazzi, an economics Arindrajit Dube, one of the pa- find a more natural home” and Longer papers can include gether a paper that anybody professor at Boston University. per’s co-authors. Mr. Dube said reach a broader audience in the more-robust statistical analysis, would consider publishing. It’s From an early stage of an ac- that paper is now in the pro- science-focused journal. Brevity engage in multifaceted argu- bad for referees because you ademic career, “it becomes cess of being revised ahead of At the time, Mr. Kashyap ContinuedfromPageOne ments or address complex top- have to read a pretty clear publication—including acting was serving on an AEA commit- American Economic Review: In- ics. Some economists speculate 40 to 60 page that you need on a request to make it shorter. tee tasked with evaluating the sights. “But on the other hand, paper inflation is also the prod- paper that might to check off a The trend toward longer pa- group’s stable of academic jour- not all papers should be long.” uct of the laborious peer-review be total crap.” pretty long list pers makes some in the field nals, which includes the influ- She noted that seminal process, in which other econo- As for the ac- of items to re- worry they lack an outlet for im- ential American Economic Re- 1950s papers by Paul Samuel- mists act as referees and read tual audience, ally convince portant research findings that view. He said the idea of a new son and John Nash took only a drafts, then demand any number she said, “read- people that the don’t run 40 or more pages. destination for shorter papers few pages to convey findings on of additions before publication. ing a paper is a way you’re in- In 2015, Princeton University quickly gained traction, leading public goods and game theory; “That would all be fine if it real commitment terpreting your economists Anne Case and An- to the new journal. both men later won the Nobel was costless to write papers at that point.” results is in- gus Deaton published research Economists can’t turn back Prize in economics. Some jour- and costless to read papers,” One issue, she Please use often deed the right on rising death rates for mid- the clock to a less-loquacious nals today seem wary of pub- Mr. Autor said. “But neither of said, is that the way to do it,” dle-aged white men. Their six era, he said. “But I do hope, if lishing such quick reads. those are true.” norm in economics is for each Mr. Bazzi said. pages in the Proceedings of the this journal does work, it will “If you want to publish a pa- It isn’t unusual for econo- paper to make a number of dif- That is more or less what National Academy of Sciences put some pressure on the other per in a top journal, even if you mists to include similar points ferent points, all of which need happened with the 94-page set off a national debate over journals to not be so nitpicking.” think you have one key insight made with several different to be supported and verified, working paper that Mr. Autor possible links between mortal- The first issue is set to come that can be conveyed succinctly, data sets, lengthy reviews of while other academic fields critiqued at the AEA conference ity and economic distress, and out next summer, but authors the referees are not going to past research, multiple appendi- have a higher tolerance for pa- in January. When you’re trying “there was a lot of discussion are already excited. Ms. Finkel- take it,” Ms. Finkelstein said. ces with technical details and pers making one or two key ob- to anticipate possible criticisms about whether a paper like stein said the new journal is on Between 1970 and 2017, the page after page of Greek letter- servations. on a controversial topic like the that, sent to a standard eco- track to have more than 600 average length of papers pub- laden formulas that require, Economists also tend to write minimum wage, and situate nomics journal, would have had submissions for its first year.

identifying the improprieties to her superiors. Ms. Scott, Highflying who is known as Robyn, re- cently sued MiMedx alleging accounting irregularities un- Medical der the Sarbanes-Oxley law, seeking damages for lost wages and earning capacity. Firm Falls The company declined to com- ContinuedfromPageOne ment on the suit, filed in fed- practices and employees’ criti- eral court in Dallas, and didn’t cisms, MiMedx said its board’s answer a question from the audit committee is conducting Journal about the labeling. an independent investigation MiMedx says it encourages into “certain sales and distri- employees to speak up if they bution practices and other see problems at the company. matters.” It said it is cooper- “Management MiMedx Style,” ating fully with regulatory posted on the company web- agencies. MiMedx said it “is site, said Mr. Petit personally not going to comment on alle- oversaw what was called a gations raised by former em- “Dear Pete” program for lodg- ployees, which are being ing complaints, and “no em- looked into” by the audit com- ployee will be reprimanded or mittee. harassed in any way for using The Journal sent the same this system.” questions to Mr. Petit. He ad- Some former employees de- dressed a few but not most. scribed a different “Dear Pete” Referring generally to em- experience. In a detailed letter ployee statements, Mr. Petit to Mr. Petit and the board in said, “I have previously re- January, Tom Tierney, a for- futed such statements.” mer regional sales director for surgical products, cited what he called “a mind-boggling Short sellers level of sales and accounting The company responded to irregularities,” which he called some criticisms in the past, part of a “win at all cost” confronting short sellers who company culture. have mounted an attack on its Just over a week later, he stock. In a rebuttal it once had was fired, Mr. Tierney said. He on its website, MiMedx said said he was accused of giving the channel-stuffing allegation company information to out- came from people who misun- siders, which he denied. derstood its operations or During about 18 months at from fired and disgruntled the company, Mr. Tierney former employees. The rebut- said, he warned top manage- tal now is gone from the site. ment that some sales reps MiMedx said it no longer in- were falsifying inventory rec-

tends to post responses be- CLOCKWISE FROM LEFT:onciliations—recording LAURA BUCKMAN FOR THE WALL STREET JOURNAL; ILANA PANICH-LINSMAN FOR THE WALL STREET JOURNAL; CNBC tissue cause of its investigation. Mary Armstrong, above left, and Tom Tierney, above right, told of being fired not long after they complained about certain practices grafts as being at one hospital Besides that inquiry, at MiMedx, a tissue-graft maker led until this month by Parker “Pete” Petit, below. The company is doing an internal investigation. when they actually had been MiMedx said earlier this year redistributed. He said he also the Securities and Exchange Products made from human side the company. told executives some sales Commission and the Justice tissue didn’t need Food and VA hospitals and clinics reps were improperly advising Department were reviewing Drug Administration approval were crucial to the company’s doctors how to maximize re- some of its practices. The De- for marketing so long as the revenue growth, said former imbursement on MiMedx partment of Veterans Affairs tissue wasn’t significantly al- employees. The U.S. govern- products. has said it is, too. tered in processing and per- ment accounted for more than Mr. Petit said he responded No one has suggested formed the same basic func- a fifth of MiMedx’s revenue, “quite thoroughly” to an ear- MiMedx’s products are faulty. tion it had in the donor. Last by one analyst’s estimate. A lier letter from Mr. Tierney “The company is operating its November, however, the FDA spokesman for the VA’s Office that raised questions about business as usual as it contin- said some products of the of the Inspector General de- company accounting, seeking ues to grow, invest in its type MiMedx sells do require clined to comment on more details. Mr. Petit said product pipeline, and focus on agency approval. MiMedx has MiMedx, citing an investiga- that when Mr. Tierney didn’t serving healthcare providers three years to meet the new tion by the IG. respond—including to calls and their patients,” MiMedx guidelines and will have the Many VA hospitals do busi- from company auditors—he said, adding it has no debt. expense of clinical trials. ness with MiMedx on a con- concluded the employee had Mr. Petit, a well-known Meantime, sales reps faced signment basis, meaning the no specific information. health-care entrepreneur, is a pressure from managers for for the grafts, which were ities continued, she said. She company sends them products Mr. Tierney disputed that large presence in his home higher volume, said former billed at about $270,000 and said she soon was fired for and is paid only when the VA account, saying he provided state of Georgia who has do- employees. “What else can u shipped to a FedEx Corp. of- what the company called per- uses some of them. Storing specific examples on several nated generously to his alma ship by end of month?” said fice for pickup, the former of- formance reasons. voluminous merchandise on occasions. maters. At Georgia Tech, he one message to a former em- fice employee said. A Journal question about VA shelves became a chal- funded a professorial chair for ployee. “Need all u can put in A FedEx receipt reviewed Ms. Armstrong was among lenge, former MiMedx em- engineering in medicine, en- today up to $100k if possible,” by the Journal said the ship- those Mr. Petit addressed. He ployees said. “We would find Whistleblower dowed the Petit Institute for it said. ment was picked up the next said Ms. Armstrong “never ways to hide it,” said one. Mr. Tierney said he has Bioengineering and Bioscience “I still have PTSD from the day by someone representing told me anything that I re- An August 2017 email re- filed a whistleblower com- and helped fund a biotechnol- amount of calls I’d get asking the surgeon. The former sur- call.” ceived by regional sales direc- plaint with the SEC and spo- ogy building that bears his what my numbers were going geon’s-office employee said no MiMedx said in its written tors said consignment inven- ken with the agency. The SEC name. Last August he donated to be for the month,” said one from the office collected statement it “has taken a tory outstanding just in the declined to comment. If the $10 million to the athletics the goods. number of actions to promote Southwest region was worth SEC were to bring an action program at Georgia State, The former employee said accountability and strengthen some $34 million. For per- against MiMedx that resulted which named its football sta- MiMedx indicated in that, when shown a security oversight, including manage- spective, that was equal to in monetary sanctions, Mr. dium for him. video from the location, he ment’s development and im- more than 10% of reported Tierney might stand to collect Mr. Petit served as finance June its results going recognized the person who plementation of measures to sales companywide in the pre- a financial award under the chairman of Donald Trump’s back to 2012 will had signed for the pickup as a improve MiMedx’s accounting, vious year. agency’s whistleblower pro- presidential campaign in representative for a company corporate compliance and in- Several former employees gram. Georgia in 2016 and is a long- have to be restated. that did business with ternal control practices.” Last said that at times, near the On June 7, when MiMedx time friend of Tom Price, MiMedx. The former employee week it named a new chief end of a quarter, the company convened an investor call and President Trump’s first Health said the surgeon chose not to compliance officer from out- would book as sales some of disclosed it would need an ex- and Human Services secretary. pursue the matter with police. the goods sent to hospitals on tensive restatement of finan- MiMedx, based in Marietta, Mary Armstrong, a former MiMedx’s top executives consignment but not yet used. cial results, Mr. Petit said the Ga., took off in 2011 after it MiMedx account executive in were asked by the doctor’s of- Deep Cut The FDA requires that de- business performance “re- acquired a seller of placenta- Texas. She said superiors fice about this sequence of Shares of MiMedx, a maker of tails of medical use of human mains strong.” based treatments meant to would tell her “I need you to events and couldn’t satisfacto- tissue grafts for surgery and tissue—the donor and the re- He was out as CEO and heal wounds more quickly. hit this number.” rily explain it, the former sur- wound care, have plunged since cipient—be recorded. MiMedx chairman within a month, in The raw materials come In one instance, MiMedx geon’s-office employee said. questions were raised about its documents reviewed by the early July. The company de- from placentas donated by sales records show the com- The allegation was among sales practices. Journal show that in one hos- scribed the departure of Mr. women who have given birth pany recorded a shipment of those MiMedx told the Jour- $18 pital, tissue recipients were Petit, who remains on the by caesarean section. The 135 oversized skin grafts to a nal it wouldn’t address be- repeatedly recorded by a sales board, in part as a result of 16 company takes the amniotic Las Vegas plastic surgeon’s of- cause of its internal investiga- rep as Jane Doe or John Doe. audit-committee findings that membrane—the thin, moist fice, which former employees tion. 14 Also, MiMedx records didn’t haven’t been made public. tissue that protects the fe- said is way beyond the 10 or Ms. Armstrong, the former 12 match the hospital’s own re- The day after Mr. Petit’s de- tus—and processes it into so smaller pieces in a typical MiMedx account executive, 10 cords in various ways, such as parture, a Georgia Tech alum- wound patches or grinds it physician order. The shipment said in 2016 she complained 8 listing a different doctor and nus emailed the university’s into a powder that can be ap- was recorded at 8 p.m. on to executives, including Mr. 6 incorrect implant date. president, Bud Peterson, ask- plied topically or by injection. Sept. 29, 2016, just before the Petit, about what she consid- Jennifer R. Scott, a former ing him to remove Mr. Petit’s 4 MiMedx’s amniotic-membrane end of a quarter. ered improprieties, such as MiMedx regional sales direc- name from the biotech build- products are generally consid- No one in the surgeon’s of- third-party distributors ap- 2 tor, said she saw mislabeling ing. Mr. Peterson declined, ac- ered to be safe and of good fice had ordered the goods, pearing to overcharge hospi- 0 of surgical implants as wound- cording to an email reviewed quality, said Robert Kirsner, according to a former em- tals for MiMedx products. 2011 ’13 ’15 ’17 care uses, which are more by the Journal. director of the University of ployee of the office. Mr. Petit told her he would Source: FactSet highly reimbursed. Such an action “would be Miami Hospital Wound Center. The surgeon refused to pay fix the problem, but the activ- THE WALL STREET JOURNAL. She said she was fired after premature at best!” he wrote. THE WALL STREET JOURNAL. **** NY Tuesday, July 24, 2018 | A8A GREATER NEW YORK NYPD Number-Crunchers Fight Crime Civilian analysts help to link crime sprees covering such as an economics degree focus on hiring more uni- several neighborhoods be- from Cornell University and formed officers, he said. link crime sprees that cause they are focused on Ph.D.s in various subjects. “When departments are straddle several their own precincts, use the Before the analysts were forced to cut back, the first findings to target their re- hired, Ms. Pollock said patrol people to be cut are civilians,” neighborhoods sources, police say. officers were working as ana- Mr. Wexler said. “Attracting “Even as recently as a year lysts. Most of them spent their highly talented civilians and BY ZOLAN KANNO-YOUNGS ago, there was a lot of count- days entering data. Now, those paying them competitive sala- ing by hand and there was a lot officers are back on the street. ries can be daunting for some They’re New York City Po- of siloed databases,” said Chief “Criminals don’t think cities.” lice Department crime fighters of Crime Control Strategies within precinct boundaries or The analysts also are who don’t carry a gun or a Lori Pollock. “I’m seeing pat- borough boundaries, city counted on to raise awareness badge. When they clock in, terns more readily recognized. boundaries or even state of new crime trends. they log on to a computer and It’s a couple educated clicks boundaries. So we can’t think Benjamin Goldy, an analyst pore over spreadsheets with a and they’re coming up with like that,” Ms. Pollock said. based in the NYPD’s headquar- key statistic in mind: One of things we wouldn’t have had.” “This has enabled people to ters in lower Manhattan, has

every seven crimes in the city In June, one of the NYPD’s SANGSUK SYLVIA KANG FOR THE WALL STREET JOURNAL have an idea. You wouldn’t been looking at tens of thou- is part of a pattern. analysts, 40-year-old Kendall Crime analyst Benjamin Goldy works at NYPD headquarters. want an idea before because it sands of crimes during the For the past year, 100 civil- Perez, noticed five larceny in- might be arduous and you past five years in which the ian crime analysts have been vestigations involving vehicles within days. The NYPD is slowly embed- might not be able to do it.” perpetrators drove cars with connecting the dots on crimes, in Queens. He reviewed the This spring, when a captain ding analysts into specialty Chuck Wexler, executive di- out-of-state license plates. from violent robberies to sto- crimes on his computer and no- on the Upper West Side no- squads, as well. Chief of Detec- rector of the Police Executive “Not something you can do len cellphones. The analysts, ticed that each one occurred ticed a surge in shoplifting in tives Dermot Shea, who is con- Research Forum, a group that by hand,” said Mr. Goldy, who who were hired by the NYPD between 10 p.m. and midnight, his jurisdiction, he directed his ducting a “top-to-bottom” re- aims to improve policing, said also is in a Ph.D. program at last year as part of a push to and the victim was a taxi driver. crime analysts to categorize view of the Special Victims the NYPD stood out in the law- the University of Huddersfield better scrutinize crime data at A deeper look showed the the petty-theft data to “larceny Division after reports of un- enforcement community by in the U.K. The project could the neighborhood level, work perps were targeting cell- per capita,” or per store. The derstaffing in the adult sex hiring the civilian analysts. give a hint at where out-of- behind the scene in each of phones in the vehicles. Mr. captain found that the thefts crimes unit, recently said an While the Chicago Police state criminals are most often the city’s 77 precincts, comb- Perez informed his supervisor, were concentrated in Duane analyst was added to the divi- Department last year teamed coming from, he said. ing police reports for details who deployed more officers to Reade locations. He told the sion. up with the University of Chi- “We’re solving crimes by that might tie multiple crimes patrol at that time and be on commander of the Upper East The analysts are paid be- cago Crime Lab to gain 25 an- sitting at our desks,” Ms. Pol- to the same criminals. the lookout specifically for Side, who deployed more per- tween $51,000 and $90,000 alysts, most police depart- lock said. “The information is Commanders, often unable taxis. They made an arrest sonnel to stores there. and come with credentials ments around the country there.” MTA Blames Uber for Declines BY PAUL BERGER the approximately 70,000 app- based, licensed for-hire vehi- It is a question that has cles in New York City, dwarf- vexed transit officials for some ing the roughly 13,600 time: Why, even as New York licensed yellow cabs. City’s population increases, is “The best way to boost sub- subway and bus ridership de- way ridership is to improve clining? service,” said a spokesman for Now, the Metropolitan Uber Technologies Inc., adding Transportation Authority that could be best achieved thinks it has the answer: Uber. through congestion pricing, In a presentation to MTA which would charge drivers to board members in lower Man- enter the busiest parts of hattan on Monday, New York Manhattan. City Transit Executive Vice New York City added al- President Tim Mulligan most 500,000 residents be- showed how dips in weekday tween 2010 and 2017, accord- subway ridership between ing to U.S. census data. Yet 2016 and 2017 coincided with annual subway ridership pla- increases in taxi and for-hire teaued in 2015 before falling vehicle ridership. by 0.3% in 2016 and by 1.7% in Though Mr. Mulligan didn’t 2017. So far this year, it is mention Uber by name, the down 2.1%. app-based ride-hail company Mr. Mulligan said the tran- dominates the for-hire vehicle sit ridership decline is compa- market in New York City. rable to trends in other cities

STEVE REMICH FOR THE WALL STREET JOURNAL The data is the best evi- nationally and internationally Members of the Transport Workers Union showed up at Cynthia Nixon’s news conference to express support for Gov. Andrew Cuomo. dence the authority has found where the rise of app-based to date showing, not just a ride-hailing mirrors a decline correlation, “but actually cau- in mass-transit usage. sation” between subway rider- Mr. Mulligan noted that the ship declines and the rise of neighborhoods farthest from Nixon Denounces State of Subway for-hire vehicle and taxi trips, lower Manhattan were the Mr. Mulligan said. same areas that have seen the BY LARA KORTE the Brooklyn-Battery and tem’s on-time weekday perfor- 2017. Still, according to the Between 2016 and 2017, to- largest increase in for-hire ve- AND PAUL BERGER Queens-Midtown car tunnels. mance hasn’t improved since data, the 12-month rolling av- tal for-hire vehicle and taxi hicle trips. Between May 2017 The article said the money last year, when Mr. Cuomo de- erage for weekday on-time ridership grew 13.1%, Mr. Mul- and May 2018, subway rider- Shouting over the roar of could have been spent to im- clared a state of emergency af- performance through June ligan said. That growth was ship within the Bronx and subway cars in a Manhattan prove the subway system ter a string of major service 2018 was 64%, unchanged “strikingly similar” to the re- Queens fell by 8.2% and 6.6%, station, gubernatorial candi- rather than on the tiles, which disruptions and a derailment from last June. duction in subway and bus rid- respectively. date Cynthia Nixon on Mon- are the official color scheme that injured dozens of riders. A spokeswoman for Mr. ership during the same period, That concerned MTA board day criticized fellow Democrat of New York. The MTA launched an $800 Cuomo called Ms. Nixon’s he added. member Peter Ward, a union Gov. Andrew Cuomo, saying Earlier Monday, MTA Chair- million short-term turnaround statements “fiction” and said Uber accounts for most of official representing hotel he failed to improve the city’s man Joseph Lhota issued a plan last summer to reduce the governor had taken many workers. He said it appeared transit system and wasted delays and disruptions. It in- measures to improve the tran- those who could least afford it millions of dollars on beautifi- cluded measures such as hir- sit system. were paying for ride-hailing cation projects for car tun- Gov. Cuomo’s rival ing as many as 2,700 new “Gov. Cuomo single-hand- because the transit system nels. workers and expediting signal edly revived congestion pric- isn’t good enough. “We’ve learned again, one accused him of repairs and track maintenance. ing and passed the first phase The MTA attributes some of more time, just how screwed wasting funds on At a regularly scheduled of Fix NYC, which includes a the decline in ridership to its up the governor’s priorities are MTA board meeting Monday, dedicated revenue stream to own service outages. As the when it comes to New York beautification projects. subway officials pointed to fix the subways and full fund- agency works to reverse de- City subways,” Ms. Nixon said data showing the plan, which ing for the Subway Action clining subway performance in the Broadway-Lafayette is still being rolled out, is Plan,” she said. and modernize the 472-station Street station. “Gov. Cuomo has working. Subway cars are About a dozen members of system, it has increased over- been focused on making super- statement refuting the article, breaking down less often and the Transport Workers Union night and weekend closures. ficial, cosmetic changes rather calling it “factually inaccu- customer wait times on plat- Local100showedupatMs. Mr. Mulligan said that be- than investing in the not-so- rate.” Mr. Lhota said the Fed- forms and on trains are gradu- Nixon’s news conference on cause peak-hour ridership re- visible, but ultimately far more eral Emergency Management ally improving, they said. Monday to demonstrate their mains high, the authority must important infrastructure.” Agency allocated the funds The authority’s subway support for Mr. Cuomo. still provide the capacity to Ms. Nixon was referring to specifically for tunnel repair chief, Andy Byford, highlighted “There’s an unprecedented service periods of high strain a Monday article in the New after superstorm Sandy, and weekday on-time performance amount of maintenance and re- on the system. Meanwhile, York Post that said Mr. Cuomo the money couldn’t be used for June, in which 68% of pair work taking place, thanks overall ridership declines are directed the state-controlled for other improvements. trains reached their final des- in large part to the additional leading to a fall in revenue. As Metropolitan Transportation Ms. Nixon also criticized tination within five minutes of funding Gov. Cuomo has se- of May, New York City Tran- Authority to spend $30 million the governor for recent data their scheduled arrival time, cured,” Tony Utano, the union’s sit’s farebox revenue was $9.4 to add blue and gold tiles to showing that the subway sys- up from 62% of trains in June president, said in a statement. million, or 2.4%, below budget. A8B | Tuesday, July 24, 2018 NY **** THE WALL STREET JOURNAL. GREATER NEW YORK

GREATERNEW YORKWATCH Daily News Will Cut 50% of Its Editorial Staff BY LUKAS I. ALPERT the assumption of debt and at making the news operation hardest-hit departments were Both New York City Mayor MANHATTAN pension liabilities. At the time, more digitally focused with a the sports and photo desks and Bill de Blasio and New York The New York Daily News the deal gave the company a greater emphasis on breaking the paper’s research library. Gov. Andrew Cuomo expressed Many Buildings Still announced that it would cut presence in the three largest news. “The decisions being an- Numerous metro reporters and concern about the impact of Closed After Blast its editorial staff by half as media markets in the country. nounced today reflect the real- editors also were let go. such sweeping cuts on the part of a major restructuring Since then, Tronc has un- ities of our business and the The Daily News has strug- civic good in the city. More than half of the 49 to address “significant finan- dergone broad changes, in- need to adapt an ever-chang- gled financially for years as “This will undoubtedly dev- Manhattan buildings shuttered cial challenges” the Big Apple cluding the sale of its former ing media environment,” the readers and advertisers have astate many households and since a steam-pipe explosion tabloid has faced for years. flagship publication, the Los memo read. moved away from print to on- hurt an important New York rained asbestos on them last The steep cuts come less Angeles Times, and the at- Before the cuts, the paper line. In 2016, the Daily News institution,” the governor said week remain closed Monday as than a year after the nearly tempted exit of its leading had an editorial staff of about reported a loss of $23.7 mil- in a statement. The mayor workers continue to clean and century-old city institution shareholder, Michael Ferro. 100, meaning roughly 50 peo- lion, according to a regulatory urged Tronc to consider sell- check each one for debris and was acquired by Chicago- In a staff memo, the paper ple lost their jobs, a Tronc filing Tronc made when clos- ing the publication rather than damage, New York City officials based Tronc Inc. for $1 and said the cutbacks were aimed spokeswoman said. Among the ing the deal last November. make the cuts. said. Thursday’s blast forced the closure and evacuation of 49 buildings near Fifth Avenue and Group Sues Over 21st Street. While city workers have cleaned the exterior of most of the shuttered buildings, only 17 have fully reopened, ac- Yeshiva Exemption cording to officials. At least 10 buildings were contaminated by asbestos and BY MAYA SWEEDLER that of public schools, and would have to be cleaned before charge school districts with they would reopen. An advocacy group filed a enforcing the standard. The The city said the explosion lawsuit Monday alleging that a Felder Amendment, named for displaced at least 500 residents. recently amended New York state Sen. Simcha Felder, ex- It’s not clear how many of them state law that relaxes educa- empts certain schools—non- have returned to their homes. tional standards for ultra-Or- profit institutions that offer “It’s a painstaking process, thodox Jewish schools is un- bilingual programs and long and we know it takes time,” said constitutional. school days—and puts the Joseph Esposito, the commis- In the lawsuit, Young Advo- commissioner of the New York sioner of the city’s Emergency cates for Fair Education, a State Education Department in Management office, at a meet- nonprofit organization that charge of evaluations. ing Monday for affected busi- seeks to bring secular educa- Mr. Felder has said the ness owners. Mr. Esposito said tion standards to ultra-Ortho-

he hoped the number of re- JOAN MARCUS dox schools, known as yeshi- opened buildings would double A scene from the Broadway jukebox musical ‘Head Over Heels,’ which opens on Thursday. vas, argues that the measure The suit says Hasidic by Tuesday to at least 34. violates the Constitution’s —Katie Honan First Amendment by granting pupils deserve an Go-Go’s Box Office Blues special treatment to yeshivas. education on par with IMMIGRATION The suit, filed in U.S. District Court in Brooklyn, names as that of other students. Cuomo Pardons Seven BY CHARLES PASSY show on Broadway that had a than-style romp based upon defendants New York Gov. An- Facing Deportation full week’s run. “The Arcadia,” a prose work drew Cuomo, Education Com- “Head Over Heels,” the The weak sales are some- from the 16th century. missioner MaryEllen Elia and Seven people who faced de- Broadway jukebox musical fea- thing of a surprise, given the As a result, the show may be Regents Chancellor Betty Rosa. amendment was intended to portation because of crimes turing songs by the all-female popularity of the Go-Go’s, having trouble appealing to The legislature passed the help parents choose the edu- committed years ago were par- rock band the Go-Go’s, is look- whose hits include “We Got the those who are simply Go-Go’s measure as part of the state cation their children receive. doned Monday by New York Gov. ing more like a no-go at the Beat,” “Our Lips Are Sealed” fans, said Chris McKittrick, a budget in April. Mr. Cuomo The amendment’s parame- Andrew Cuomo, a Democrat. box office. and “Vacation.” On top of that, writer with Daily Actor, a web- signed it into law on April 12. ters for exemption from exist- The seven individuals include a The show, which has been the show garnered positive no- site that covers the performing “Hasidic students deserve ing state guidelines are so spe- mother of three, a grandfather and running in previews for the past tices in its run in San Francisco arts. “It’s going through some- the education that is constitu- cific that the new standards a man battling cancer. All seven month and opens on Thursday, earlier this year. And it boasts thing of an identity crisis,” he tionally guaranteed to them by can only be applied to ultra- had minor, nonviolent convictions has grossed $1.3 million to date, star power behind the scenes: said. the state of New York,” Naftuli Orthodox schools, according to that in some cases date back de- or just 36% of its potential take, Gwyneth Paltrow is one of the Producers declined to com- Moster, the advocacy group’s Eric Huang, legal counsel to cades, but their criminal records according to figures supplied by show’s lead producers. ment about the show’s grosses founder, said at a Monday news the advocacy group. made them targets for deporta- the Broadway League, the trade Still, theater-industry ex- to date, though a spokeswoman conference. He alleges that Emily DeSantis, a state Edu- tion, Mr. Cuomo said. The pardons, group that tracks the industry. perts say “Head Over Heels” for the musical noted that the some yeshivas don’t prepare cation Department spokes- he said, would make it harder for For the seven-day period ended may be hampered by its story past week’s sales were lower students for the broader world. woman, said it doesn’t comment federal immigration officials to this past Sunday, it posted and structure. While its music because of several complimen- State guidelines require pri- on litigation. A representative continue deportation proceedings. grosses of $284,400, a figure may be of relatively recent vin- tary tickets made available to vate schools offer a “substan- for Mr. Felder didn’t respond to —Associated Press that put it behind every other tage, the show is an Elizabe- the press. tially equivalent” education to a request for comment. THE WALL STREET JOURNAL. Tuesday, July 24, 2018 | A9 LIFE&ARTS

WORK & FAMILY | By Sue Shellenbarger You Could Be Too Much of a Team Player

Offices demand collaboration like never before, but you can hurt your organization by not saying no enough to requests for help

AMID A SWEEPING workplace trend pushing collaboration, some people are finding they play a lit- tle too well with others, causing stress and overwork. When you hear the phrase “bad team player,” you might think of someone who refuses to collabo- rate. But you can also hurt your or- ganization if you burn out trying to accommodate every co-worker’s re- quest or attending more meetings than you can keep up with. This can stem from a basic inability to draw boundaries or an ego-driven desire to look like an office MVP. Many white-collar employees who in the past would have worked side-by-side with a few colleagues now spend 85% of their time collaborating with multiple teams of co-workers via meetings, email, conference calls or instant messaging, often across several time zones, research shows. The volume and diversity of col- laborative demands on employees have risen 50% in the past decade, says Robert Cross, lead author of an eight-year, 28-employer study on the topic. Researchers used sur- veys, email analysis and interviews to identify the most efficient col- laborators, or high performers who wasted the least time—their own or others’. “It shocked me to see how over- whelmed people are today,” says Dr. Cross, who has been doing

workplace research for 20 years, FROM TOP: JAMES STEINBERG; RACHAEL WEAVER formerly at the University of Vir- ginia and now at Babson College in good feeling she got Employees need to be wary of formation becomes available. Babson Park, Mass., where he is a from helping col- indulging FOMO, or the fear of The good news: Changing just a professor of global leadership. leagues, making her missing out on something interest- few behaviors can regain 18% to The research shows that the the go-to person for ing that might be happening else- 24% of the time you spend collabo- trend toward collaboration has anyone struggling to where. FOMO motivates people to rating, Dr. Cross says. turned some personal qualities that solve a problem. That say yes to attending meetings they That requires staying focused might be strengths in other settings left her so exhausted could easily skip. on your most pressing job goals. into weaknesses at work. A desire that her health suf- Others say yes to tasks that en- At Ford, one executive has started to help others, a need to feel in con- fered and she eventu- able them to showcase their exper- blocking out a few minutes each trol on the job or even a wish to be ally resigned. After tise, thinking, “I want to be seen as morning for mindfulness medita- seen by colleagues as an expert on learning to set bound- the go-to person, the expert,” says tion, to help him focus on his in- a particular topic can cause people aries on her next job David Sylvester, director of global tended priorities that day, says Ju- to say yes to nonessential work, and refuse tasks that learning and development at Booz lie Lodge-Jarrett, Ford’s chief says Dr. Cross, whose research has would extend her Allen and a longtime participant in talent officer. been used in training programs at workday into eve- Dr. Cross’s research. As that reputa- Ford Motor Co., Booz Allen Hamil- nings or weekends, tion spreads, the time demands can ton Holding Corp., General Electric she began to thrive become overwhelming. Co. and other employers. again. Overload is also caused by em- He calls these habitual re- Juggling competing ployers who pile on too much sponses “identity drivers,” because priorities can frus- work, of course. But the splinter- 85% they often strengthen one’s self-re- trate employees who ing of demands that marks a col- Office workers spend 85% of their work gard or status among co-workers. need to feel in control laborative workplace also requires time collaborating with colleagues. They also prevent employees from of their work. Some employees to develop some nu- putting on the brakes when their respond by doubling anced skills—such as the ability to workloads mount. down and trying even set aside important tasks for more Employees can learn to notice harder to manage all important ones. Give yourself permission not to situations that trigger a knee-jerk the details, thinking, Even a desire for closure, which answer every email. Set up plan- response, such as a request for “I’m the only one who Kieran Tie burned out on a job trying to collaborate can be an asset when it drives you ning tools that help you ward off help from a colleague. It’s fine to can do it right,” Dr. with too many colleagues on too many projects. toward worthwhile goals, can be a nonessential demands. help co-workers with important Cross says. drawback. Complex collaborative Drawing on Dr. Cross’s research, problems when you know you’re Kieran Tie of Denver likes feel- should be able to keep all his proj- projects often require employees Microsoft recently added features the best person to do so. But if ing in control of his work. On a ects on-time and under-budget, to tolerate ambiguity as they to its Outlook email that nudge us- you never say no, Dr. Cross says, former job, he enjoyed creating and blamed himself when he creep through stage after stage of ers whose calendars are filling up “you become the path of least re- software and seeing how it helped couldn’t. And when he applied the development. with meetings to block out time sistance for anybody who needs customers. But when he moved on only solution he knew—working “You can’t be too worried about for focused work. To figure out help.” to a new job as a product manager harder—he became so exhausted getting the right decision, as there which meetings to skip, Dr. Cross One of the 200 employees inter- overseeing several engineering that he had to quit. He’s now self- are always big unknowns,” one ex- says, look back four months on viewed for the study was a hard- teams, he felt overwhelmed. employed as a content-marketing ecutive told researchers. “The key is your calendar to see which of the charging manager for a tech com- “I was pulled in many different consultant and is writing a book to make a roughly right decision, meetings you attended were actu- pany. Her Achilles’ heel was the directions,” Mr. Tie says. He felt he about his experience with burnout. move ahead” and adapt as more in- ally essential.

ART & AUCTIONS CHRISTIE’S SALES SOAR IN STRONG ART MARKET

BY KELLY CROW form that works with more than 5,000 smaller houses and galleries, said its $194 million in live-auction BOLSTERED BY a robust U.S. sales for the first half represented economy and newly wealthy over- a 29% bump from last year, with seas buyers, Christie’s Interna- sales climbing for everything from tional sold $4 billion of art during antique furniture to wine. the first half of 2018, up 35% from “I’m amazed at the depth of this the year-earlier period and repre- global market right now,” said senting a new six-month high mark Guillaume Cerutti, Christie’s chief for the London-based company. executive. Eighty-four percent of Christie’s said on Monday that it Christie’s offerings found buyers auctioned $3.6 billion in art, up this spring, he said, exceeding its 28% from the first half of last year. 81% sell-through rate in 2017. The The house additionally sold $390.3 steady buildup suggests collectors million of art in privately brokered feel increasingly confident to vie deals, more than double its year- for lower-priced pieces, not just ago results. Its online-only art name-brand trophies. sales rose 50% to $37.7 million. Christie’s said a fifth of its sales Rival Sotheby’s said it auctioned came from the $835 million estate $2.8 billion in art over the same sale of David Rockefeller and his period, up 12% from a year ago. wife, Peggy. More than 85,000 peo- Both houses said their six-month ple attended touring exhibitions of totals represented sales through the estate, and every single piece June 30. Sotheby’s will release its sold—a rare feat in the industry. consolidated sales, which include Of the 55 artworks Christie’s private art sales, on Aug. 6. sold this spring for more than $10 The art market is on a hot million, 15 came from the Rockefel- streak, and collectors also buoyed ler sales in May. They included a sales elsewhere in the industry. $115 million Picasso, an $84.7 mil- Phillips said it auctioned $517 mil- lion Monet, and an $80.8 million lion during the first half of the Matisse.

CHRISTIE’S IMAGES LTD. year, up 61% from a year earlier. The Rockefeller estate was a Matisse’s ‘Reclining Nude With Magnolias’ went for over $80 million, boosting Christie’s sales in the first half of 2018. Invaluable, an online-auction plat- PleaseturntopageA10 A10 | Tuesday, July 24, 2018 THE WALL STREET JOURNAL. LIFE & ARTS

FASHION | By Ray A. Smith A ‘Drop’ to Make You Shop FROM LEFT: DAVID PRUTTING/BFA (2); GETTY IMAGES; BURBERRY

TO GET CONSUMERS into Clockwise from far their stores more often, left: People wait for mainstream fashion brands Public School’s latest including Alexander Wang, collection, shown Burberry and Public School above, which will be are putting out new items part of monthly more frequently, with ‘drops.’ At Burberry, “drops” of merchandise as Riccardo Tisci (right) oftenas12timesayear,in- plans a collaboration stead of the usual two to with Vivienne four. Westwood. The tactic—a hot concept Alexander Wang will in fashion today—involves soon start delivering more than just releasing new merchandise 10 new clothing more often. times a year. Designers typically promote a “drop” with lots of mar- from that collection will be more frequently is a big keting hype on social media quently. Alexander Wang month wait to available in a series of “in- part of the strategy. A new and limit the offerings so will put out part of a new get runway stant drops”—where the de- batch of merchandise “defi- that items sell out. collection in October, and looks in stores. signer may keep the exact nitely” will come out The strategy follows a parcel out additional drops Some labels, in- release date a surprise to monthly, if not sooner some- playbook perfected by influ- in November, December, cluding Burberry, try to generate more excite- times, said co-founder Max- ential streetwear brands like February and March. In Tom Ford and ment—in stores and online. well Osborne. Previously, Supreme, Palace Skate- May, it will put out part of Ralph Lauren tried Later releases could be as Public School released new boards and Nike. These another new collection, fol- “see now, buy now” often as once a month. items four times a year. brands, popular with millen- lowed by more in June, July, collections that A collaboration with Brit- nials, have created buzz, August and September. made merchandise ish designer Vivienne West- Entireworld long lines and a sense of ur- The move reflects shop- available right after runway wood will also be released Designer Scott Sternberg, gency around releases of pers’ changing habits. “Peo- debuts, with mixed results. ence to her. with a drop strategy. Mr. who rose to fashion industry limited-edition products for ple used to go in the begin- Some fashion executives “It would Tisci, who joined Burberry darling status in the aughts short windows of time. Tra- ning of a season and buy warn that drops, while very much as its chief creative officer with his preppy-meets-hip- ditional designer brands and their wardrobe for their sea- buzzy, aren’t a panacea for depend on in March, is familiar with ster label Band of Outsiders, retailers are trying to whip son,” Ms. Gersh said. “Now the industry’s ills. Louis whether or streetwear and its merchan- describes his latest venture, up this kind of excitement at it’s more common for a cus- Vuitton’s menswear line did not ‘new’ dise-delivery tactics, having launched online in April, as a time when, outside of tomer to say, ‘I’m going out a collaboration with Su- items really incorporated street influ- nonbasic basics. For now he streetwear, many consumers this weekend, I need a preme that sparked a sales looked dis- ences in his previous job as sells on Entireworld’s web- are choosing to spend on dress’ on a Thursday.” frenzy last year. But Vuitton tinctively dif- Givenchy’s creative director. site and Gwyneth Paltrow’s electronics or travel instead The fashion industry has CEO Michael Burke says that ferent from Goop, but plans to eventu- of fashion. faced pressure to speed up “‘Supreme’-like drops, for whatever had Public School ally sell in physical stores. The goal: “Someone com- its metabolism for years. Tra- us, is not a fundamental been avail- In December, Public School, a Entireworld plans a deliv- ing into the store knows ditionally, designers released business model.” able previ- New York-based label whose ery schedule that includes there’s going to be something two big collections a year. In Mr. Burke believes that ously,” she says. mix of streetwear, tailoring, five drops during its first there they didn’t see a month the mid-aughts, designers be- simply changing the timing Here’s how sports influences and avant- year that operate on a “cy- ago, and they’re going to gan adding one or two more of merchandise won’t fix a three brands are garde silhouettes has earned cle meant to trigger desire come back,” says Lisa Gersh, drops of merchandise. But troubled brand. “If you’re rethinking their it lots of industry buzz, an- at different points of the chief executive of Alexander the clothing still stayed on having a problem with traffic approach: nounced it was converting its year,” Mr. Sternberg says. Wang, which will soon start racks for months. in your stores or fundamen- business to a direct-to-con- The first delivery, in April, delivering new merchandise Meanwhile, fast-fashion tal problems, a drop is not Burberry sumer model. In a few weeks, was of core pieces including to stores 10 times a year in- retailers like Zara were going to solve it,” he says. Burberry plans to move to a it will launch an e-commerce socks, underwear, T-shirts, stead of four. quickly turning out reinter- Heather Gates, a graduate system of frequent deliver- site, followed by the opening and camisoles, followed by Designers generally aren’t pretations of runway looks. student from Brooklyn, N.Y., ies beginning in September, of a “Public School space” “thematic” releases like planning to increase the And the rise of social media who likes brands such as after designer Riccardo where consumers can buy “May Gray/June Gloom,” overall amount of merchan- beamed images of runway Marni and Everlane, said Tisci’s debut collection for clothing or “be immersed in consisting of three men’s dise they make each year, designs instantly around the more frequent deliveries of the British fashion house is Public School’s world,” said items and three women’s but are releasing it in world, immediately dating merchandise wouldn’t nec- revealed at its fashion show co-founder Dao-Yi Chow. items made out of gray re- smaller quantities more fre- the industry’s usual six- essarily might make a differ- in London Sept. 17. Pieces Releasing new clothing cycled cotton. EXTRA Christie’s What the heck is Sales Rise COMFORT Zero-Gravity? ContinuedfrompageA9 marketing bonanza that Christie’s won’t likely repli- And what’s it cate every year, but Mr. Ce- rutti said some Rockefeller IN EVERY doing in this chair? bidders appeared to migrate to the company’s other auc- The feeling of being weightless is the key to reducing tions, lifting its May sales to pressureonyourback,legs,andjoints.Thisis $961 million, up 14%. STEP For its part, Sotheby’s exactlywhattheSvagoreclinerisengineeredtodo. It accomplishes this with a design that distributes sold the most expensive art- work of the season, Amedeo your weight evenly across the entire chair so daily Modigliani’s $157.2 million achesandpainsmeltaway.Reducediscomfort “Reclining Nude.” starting today with Svago. Among the individual cat- egories, Christie’s sold $900 million in contemporary art. It also sold $1.8 billion of impressionist and modern art, American art, modern

British art and Latin Ameri- CHRISTIE’S IMAGES LTD. can art. Christie’s sold Picasso’s ‘Young After a couple years of Girl With a Flower Basket’ for declining sales in old master $115 million this year. paintings, Russian art and 19th-century art, Christie’s Christie’s said 27% of its may have reached a plateau. buyers were new to the Sales in that category house, most of them hailing The Un-Sneaker™ goes to work. inched up to $82.4 million. from the U.S. or Europe. Mr. Youdeserveinsanecomfort24/7.Sowhy One of the few categories Cerutti said Christie’s plans that struggled this season to develop stronger ties not treat your feet to the Hubbard 24 Seven? was Asian art, with Chris- with new collectors, regard- tie’s sales down 49% to less of geography, adding $368.4 million. Mr. Cerutti that “future growth of the Svagorelief.com 844-MY-SVAGO said Asian collectors’ shift- market” will likely center on ing tastes account for the Asia. Free Shipping & decrease, with at least 60% The art market tends to of the money spent by quiet down in late July and Free shipping and returns. Order online or call 844.482.4800. 30 Day Risk-Free In-Home Trial Christie’s Asian clients this August but will get tested spring going toward art in anew at fall sales in London, other categories. Hong Kong and New York. THE WALL STREET JOURNAL. Tuesday, July 24, 2018 | A11 LIFE & ARTS

An installation shot of ‘Donald Judd: Specific Furniture,’ left; the Architecture Studio at the Judd Foundation in Marfa, Texas, with pieces by other designers, above; Judd’s ‘Armchair’ (1984), below; Judd in 1990, below left

ART REVIEW Designs With Purpose

Donald Judd was a striking designer who reinvented forms by getting close to their essence

BY ERIC GIBSON ald Judd: Specific Furniture” con- scale. No such concerns informed As a result, there sists of about 40 pieces of his the making of his sculptures. is little “design” here, furniture—tables, chairs, a daybed, Before moving into making art, not much in the way of San Francisco a desk, a bookcase—and some two- Judd had been a philosophy and decorative flourishes, well-built, efficient work surface: THE AMERICAN SCULPTOR Don- dozen drawings. Included also is art-history student at Columbia which makes the contrast its top, which seems to float; the ald Judd (1928-1994) is well known furniture by modernist architects University, and this work has a with the work Judd collected illu- design of the bookcases that form for the industrially fabricated, col- and designers whose work he philosophical air about it. He minating. One of the exhibits is its end supports; the distance sep- ored steel boxes that helped launch collected, such as Alvar seems to be asking, Rietveld’s “Zig-Zag Chair” (1934). arating them. And surely the deco- the Minimalist movement in the Aalto, Ludwig Mies van “What is a chair? It’s as simple as a Judd: just four rative pattern of dark knots in the 1960s. Simple volumes placed indi- der Rohe and Gerrit What is a table?” planes forming the whole. One of pine of “Single Daybed 32” (1978) vidually and directly on the gallery Rietveld. and so on. The an- them is a diagonal, functioning si- is one reason Judd chose that ma- floor or in floor-to-ceiling stacks Judd began de- swers have the multaneously as the principal terial. up a wall, they represented an ex- signing furniture clarity and trans- structural support and as one ele- Can furniture so unforgivingly treme reaction to the emotional in the early 1970s, parency of a ment in the dynamic linear silhou- austere actually be usable? Fortu- expansiveness of Abstract Expres- after he moved to mathematical ette that gives the chair its title. nately, visitors have a chance to sionism and the formal complexity Marfa, Texas, and equation: horizon- Judd’s “Backward Slant Chair 84” find out, the museum having of the work of such sculptors as couldn’t find any- tals for rest, verti- (1983) has a diagonal plane, too, placed a few pieces at the entrance David Smith (1906-1965). It says a thing that satisfied cals for support running from the forward edge of to the exhibition—“19.75-inch lot about Judd’s no-frills aesthetic him locally. He isn’t and, throughout, an the underside of the seat to the Frame Armchair 69” (1989) is one that he described his creations not the only modern artist expression of structure, bottom of the back plane. It serves of them. You probably won’t want as “works of art” or “sculptures” to have ventured into this a revelation of the object no expressive purpose; its role is to linger; according to Mr. Becker, but as “specific objects.” field; Isamu Noguchi (1904-1988) as something made. Thus in purely structural. Next to Judd’s, the curator, Judd didn’t either, Less well known is that Judd did so as well. But there’s a world “Chair 2” (1984) there is no at- Rietveld’s chair looks like Bernini’s moving instead from one to an- also designed furniture. The San of difference between Noguchi’s ta- tempt to disguise the silver rivets Cathedra Petri. other in his home after short Francisco Museum of Modern Art bles and lamps and his Brancusi- that attach the blue planes—in Still, Judd’s outlook wasn’t all stints. Still, a Judd chair is no has now organized a small, excep- inspired stone carvings. Not so fact, the visibility seems deliber- about renunciation. Accompanying more uncomfortable than your av- tionally interesting survey of this with Judd. The formal vocabulary ate, to show how the separate that rigorous intellect was the sen- erage park bench or bentwood work. You come away convinced of his furniture and sculpture is parts attach. “19.75-inch Frame sibility of an aesthete. Many pieces chair. And it engages eye and mind that Judd’s contribution to modern the same: planes, rectangles and, Armchair 69” (1989) was assem- are brightly colored, and there’s a in a way that they, and many other design was only slightly less than mostly, right angles. So it’s possi- bled without mitering. The slender keen sense of harmonious propor- such objects, don’t. his impact on contemporary sculp- ble to look at a chair and imagine elements forming legs, arms and tion, not to mention the relation- ture. He reinvented forms by get- its elements reconfigured into a ca- back meet as butt-joints—the most ship between form and space—all Donald Judd: Specific Furniture ting closer to their essence than al- nonical Judd box. But there is a rudimentary connection in carpen- characteristics of his sculpture. Ev- San Francisco Museum of Modern most any other designer. difference, one that Judd insisted try—with the noticeably darker erything about “Desk 33” (1978), Art, through Nov. 4 Organized by Joseph Becker, a on. The designs of his furniture end-grain of the four verticals ex- for example, seems as dedicated to curator in the museum’s architec- were determined by the need for posed as if to declare, “This is a exploring the interplay between Mr. Gibson is the Journal’s Arts in

ture and design department, “Don- functionality and appropriate corner.” solid and void as to providing a Review editor. SFMOMA (2); © JUDD FOUNDATION/MATTHEW MILLMAN (PHOTO); FBM STUDIO/FRANZISKA & BRUNO MANCIA (JUDD)

Weather TheWSJDailyCrossword| Edited by Mike Shenk Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day. 60s 70s Edmontond 50s < 1234 5678 910111213 72 Count-off word 35 Cpl., e.g. 60s 70s VancouverVanco 73 Scads 36 Restrict 80s CalgaryC 14 15 16 80s 1 Down severely 70s Seattle Winnipegp 17 18 19 80s 2 1 Letter before 38 Exclamation with PPortlandd 20 21 22 23 a handshake 100s Helenal Montreal 3 Bravo Bismarckk 70s Ottawa Eugene Billingsngs 90s 90s AAugustag t 4 24 25 26 2 Toy train sound 39 Simple quiz Boise 70s 90s 70s Mpls./StMpls./St.. 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New York City 82 74 sh 79 72 t Dublin 68 51 c 71 54 pc Warsaw 8462pc8366t s ARNO IMEAN RAVE Oklahoma City 91 69 s 94 72 pc Edinburgh 67 50 pc 69 52 pc Zurich 86 61 pc 84 61 p Solve this puzzle online and discuss it at WSJ.com/Puzzles. LEOS GINSU STYX A12 | Tuesday, July 24, 2018 THE WALL STREET JOURNAL. SPORTS

BASEBALL MLB Considers Universal DH

The designated hitter is now ubiquitous in nearly every level of baseball—except the National League

BY JARED DIAMOND

Washington AFTER STRIKING out on three pitches in his first major-league at-bat late last month, New York Yankees reliever Dellin Betances

ANDREW CHIN/ZUMA PRESS made a startling admission: Until Ryan Lochte’s ban is until July 2019. that night, he hadn’t picked up a bat since graduating high school, SWIMMING which meant he stood only a slightly better chance facing ma- jor-league pitching than any ran- LOCHTE dom person off the street. The image of Betances flailing away at home plate inspired HIT WITH plenty of laughs in the Yankees’ dugout. But it also brought base- ball’s fiercest debate back to the BAN forefront, reigniting a conversation that could reshape the game’s fu- ture: Should pitchers hit at all? BY RACHEL BACHMAN Important people across the sport envision a reality before too long where they don’t. U.S. Olympic swimming star “The game improves when you Ryan Lochte, still dealing with le- have professional hitters facing gal fallout from an incident during professional pitchers,” Houston the 2016 Rio Olympics, has ac- Astros right-hander Charlie Mor- cepted a 14-month sanction from ton said. “That’s what people want the U.S. Anti-Doping Agency for to see.” getting an intravenous injection in There appears to be more will- May. He was caught by a photo he ingness than ever to consider add-

posted on his own Instagram ac- ing the designated hitter—argu- HARRY HOW/GETTY IMAGES count. ably the most controversial rule in Rangers pitcher Bartolo Colon loses his helmet. Pitchers have a combined batting average of .113 this season. Lochte isn’t accused of doping history—to the National League, a —the I.V. contained “vitamins you decision that would send purists tween the owners and union. ace Max Scherzer said, “is why I They say that because of the can buy at CVS or Walgreens,” his into convulsions. Either way, this much seems have a high-school swing.” pitcher’s spot in the lineup and agent, Jeff Ostrow, said. But using The players certainly would clear: Pitchers can’t hit. At all. In fairness, Scherzer, sells him- frequent pinch hitting, they warm an I.V. outside of a medical emer- support it and have for decades, They entered Monday with a com- self short. Since joining the Na- up, sit down and warm up again gency or without permission vio- no doubt in part because it would bined batting average of .113, the tionals in 2015, he owns the sec- considerably more than their AL lates U.S. anti-doping rules. create 15 additional jobs and ex- lowest on record and down from ond-highest batting average counterparts. Nationals righty The sanction means Lochte will tend the careers for defensively .139 a decade ago. They strike out among qualified pitchers, trailing Brandon Kintzler said that in the miss the next swimming world challenged veterans. Union chief in nearly 42% of their plate ap- only Arizona’s Zack Greinke—a NL, relievers warm up without ac- championships and could compli- Tony Clark said Tuesday that the pearances, the most ever, and walk whopping .201. tually entering the game as often cate his attempt to compete in an- universal DH is “gaining momen- just 3% of the time, compared to But generally, organizations as three times a week, which taxes other Olympics in 2020. tum” among players, adding that about 4% in 2008. Therefore, a don’t want pitchers concerning their arms. He claimed that NL re- “Obviously it’s a step back,” said they “are talking about it more vast majority of the time, pitchers themselves with hitting, fearing lievers get hurt more often. Ostrow, noting that Lochte would than they have in the past.” don’t just create an out, they pro- injury to some of their most valu- The numbers back up their as- miss the USA Swimming national Commissioner Rob Manfred’s duce what Washington Nationals able financial investments. Follow- sertion. Since 2010, NL relievers championships that start this week recent public comments have re- hitting coach Kevin Long described ing Betances’ at-bat, Yankees man- have spent 17% more days than AL in Irving, Calif. “He said it does flected the sensitivity of the issue. as a “noncompetitive at-bat.” ager Aaron Boone said his heart relievers on the disabled list, ac- throw a wrench in things.” In June, he called the universal DH “There’s a reason they’re in the “skipped a beat” watching him cording to Stats LLC. On May 24 an image of Lochte, “a continuing source of conversa- big leagues, and it’s not because of swing, adding, “I’m in favor of this For sure, the DH debate will the second-most decorated Olym- tion” and said that “the dialogue their hitting,” Long said. “They’re DH thing.” continue to rage, whether or not pic swimmer of all time behind Mi- actually probably moved a little not going to put the time and ef- “I don’t want their pitching and the NL adopts it. chael Phelps, receiving the I.V. bit” at the quarterly owners meet- fort into their hitting.” their talent to be affected by hav- Scherzer, one of the most cre- treatment was posted on his Insta- ings. After Clark expressed sup- Like Betances, most pitchers en- ing to do something they’re really ative and thoughtful players in gram page. The image has since port for standardizing the DH, ter the major leagues with little not comfortable doing,” Astros All- baseball, thinks he has a solution. been deleted. Manfred walked those comments hitting experience, with the DH Star righty Gerrit Cole said. “I would love to see if we could A subsequent investigation by back somewhat, saying “The most now ubiquitous in nearly every The universal DH has found a come up with some type of crazy USADA, with which Lochte cooper- likely outcome remains the status level of baseball around the world. staunch ally from an unlikely proposal where there’s a DH and ated, found that he received an in- quo,” citing a hesitation to elimi- Only Japan’s Central League and source: relief pitchers, who insist the pitcher hits,” he said. “My travenous infusion of permitted nate the NL game forever. Any MLB’s National League still force that NL baseball doesn’t fit with crazy idea is you hit 10, and the substances at an infusion clinic in change would likely happen as pitchers to bat among prominent modern bullpen usage and even pitcher doesn’t count as an out.” a volume greater than 100 ml in a part of collective bargaining be- baseball leagues. “That,” Nationals puts them at risk. Well, consider it a start. 12-hour period without a therapeu- tic use exemption, also known as a TUE. Ostrow explained that Lochte’s wife and child were ill at the time and that Lochte, run TOUR DE FRANCE | By Jason Gay down from swimming training, un- derwent the I.V. treatment in an ef- fort to boost his immune system. An Awkward Battle at the Top The World Anti-Doping Agency prohibits the infusions because they can be used to mask perfor- mance-enhancing drugs and be- It’s awkward. Sky to the crowds at this Tour— cause they could encourage ath- No matter what they both Thomas and Froome have letes to shed dangerous amounts of say, how they handle been booed during stages, and water weight. it, how diplomatically there was an incident on Alpe Lochte’s 14-month period of in- they offer happy talk d’Huez where a fan put a menacing eligibility began on May 24 and of camaraderie and hand on Froome. Some of this is will end in July 2019. That means strategic “cards to play,” it’s awk- standard dominance fatigue (like he’ll miss next year’s world cham- ward. There is a week left in the the way people hate the NFL Patri- pionships, which run July 12-28 in Tour de France, and the top two ots), some is hangover from Gwangju, South Korea. The U.S. cyclists—the two men with the Froome’s asthma drug saga, some Olympic trials are scheduled for best chance to win—are on the of it is Sky’s wealth and occasion- June 2020, and Ostrow said Lochte same dang team. ally imperious attitude—on Mon- will continue to train and is “100% (Look, I know a lot of you think day, Sky boss Dave Brailsford won- going to be in Tokyo 2020,” site of I write too much about cycling, but dered why fans in Spain and Italy the next Summer Games. hang with me here. This is a zesty were nice to his team, but France Lochte, who turns 34 on Aug. 3, situation worth following. Would isn’t. “It just seems to be a French has won 12 Olympic medals, sec- you prefer me to write about NBA thing,” Brailsford said. “A French ond in the world to Phelps’s 28. free agency? Another Trump vs. cultural thing, really, that’s it.” During the 2016 Rio Olympics, NFL showdown? I’d rather get hit An embarrassment-of-riches sit- Lochte claimed that he and three in the head with a grapefruit.) uation is not unheard of in the other U.S. swimmers were robbed OK, back to the Tour. In first YUZURU SUNADA/BELGA/ZUMA PRESS Tour—Sky went through it with at gunpoint while spending a night place at the moment is Geraint Team Sky’s Chris Froome, left, with teammate and race leader Geraint Thomas Froome and Wiggins; Astana had a on the town. A contradictory story Thomas, a veteran Welsh rider leadership kerfuffle in 2009 with soon emerged that at least one of who’s never won an event as big command: there’s a leader, and Thomas. Probably. The 33-year- Lance Armstrong and Alberto Con- the swimmers damaged property as the Tour, but currently holds then a string of support riders old Froome might not be terribly tador; Greg LeMond feuded with in a gas-station restroom before the yellow jersey as race leader. In whose job it is to protect him (lit- popular in France, but he’s assem- his teammate Bernard Hinault. being confronted by armed secu- second place—just a minute and a erally, as in shielding him from the bling one of the great résumés in Froome winning would be historic, rity guards. half behind—is Thomas’s Team Sky wind) and drive the pace and make sports history. He could stand but Thomas probably would be the Lochte apologized, but Brazil- colleague, the four-time Tour de it difficult for the competition. down and become Thomas’s surro- better play—a fresh winner. ians and Americans expressed out- France winner, Chris Froome. With its handsome budget, Sky can gate, but he’s been Sky’s undis- Dutchman Tom Dumoulin can rage at his initial accusation. The I can’t lie: this kind of scenario afford the best support riders puted leader for more than a half save everybody the trouble. The U.S. Olympic Committee and USA irritates a lot of cycling fans. Team around, none bigger than Thomas, decade. Taking a back seat would Sky intersquad is so zesty, it’s easy Swimming suspended him for 10 Sky, the sport’s richest and most who would be the top dog almost be really, really weird—and to ignore that there are non-Sky months, forcing him to miss the fearsome outfit—imagine the anywhere else. Froome surely assumed those days cyclists with a legitimate chance of 2017 world championships. Golden State Warriors crossed But there was a ripple this year. were over after he rode in support wearing the winner’s yellow in A battle in Brazilian courts is with the Death Star—is once again Froome chose to ride another big of Sky’s Bradley Wiggins at the Paris next Sunday. The biggest ongoing. Lochte has been charged dominating the biggest race on the race, the Giro d’Italia, in May, 2012 Tour, a race observers think threat is the current third-place with false communication of a calendar. (If they take this one, which threatened to wear him out Froome was strong enough to win rider, Dumoulin of Team Sunweb. crime. The crime is punishable Sky will have won six of the last before the Tour. He was also facing himself. Dumoulin’s won a Grand Tour (the with one to six months in jail, or a seven Tours.) One team having a possible suspension due to a test The super-awkward part is that, 2017 Giro), he’s a world champion fine. Ostrow, also Lochte’s lawyer, such a grip isn’t good for business. for an elevated level of an asthma in order to win, Froome has to in the individual time trial (impor- said he’s not guilty because the po- (Sky sponsor 21st Century Fox and drug (he was cleared in early hope Thomas falters in the Pyre- tant, with a huge time trial in the lice approached Lochte. “If he went The Wall Street Journal share July). So Thomas prepped like the nees (not out of the realm of pos- penultimate stage), and he’s just 11 to them, it would be a different common ownership. They’ve never potential Sky leader—to be ready sibility, since Thomas is in un- seconds behind Froome. story,” Ostrow said. asked me to join the team.) to roll, in case Froome wasn’t. charted territory), or worse, he’s Here’s the good news: with a But last month, a high court in At the same time, Thomas vs. Now, Thomas is riding the best got to attack Thomas in one of the week left, we don’t know who’s go- Brazil allowed the case against Froome is a delicious interoffice race of his life, with a chance of a final mountain stages, and try and ing to win the race. That’s not to Lochte to continue, saying that battle as the race climbs into the career-making victory, and he’s gain back some of that minute and say the 2018 Tour has been a thrill when officials questioned him at decisive Pyrenees. Why is it so de- supposed to morph back into a a half he’s behind. You might think ride—Sky’s ability to control the his hotel he confirmed media re- licious? A couple of things: support rider? That’s a cruel ask— that’s akin to sabotage. I think it pace has sucked a lot of life out of ports about the incident. That, the Thomas traditionally rides for and it isn’t going to happen, as could be fascinating. the event—but the overall situa- court said, “led to an [undue] in- Froome. He won’t now. Tour long as the yellow jersey is his. What’s best for Team Sky? tion is still vague and messy. And vestigation.” teams usually have a clear chain of Froome won’t ride for Rampant success has not endeared messy can be fun. THE WALL STREET JOURNAL. Tuesday, July 24, 2018 | A13 OPINION

Abolish the FISA Court BOOKSHELF | By Jonathan Karl Speaking On the gentle Mr. Nunes has been proved with our history, under which like the Trump Campaign for summer eve- right. only the president, as com- President was illegally being ning that was True, the application in- mander in chief, was under- spied upon,” the common re- last Saturday cludes a convoluted reference stoodtohavethepowerto joinder was four judges had For Himself night, the Jus- to the FBI’s “speculation” that surveil American citizens with- signed off on it. tice Depart- “Source #1” (Christopher out warrants to gather foreign Now ask yourself: Would MAIN ment finally Steele) was hired to dig up in- intelligence to protect the na- Deputy Attorney General Rod STREET made public formation to “discredit Candi- tion. The new idea aimed to Rosenstein (who signed one of the October date #1’s campaign” (Mr. temper that power by intro- the renewal applications) and The Briefing By William 2016 applica- Trump’s). Surely a more hon- ducing another branch, the ju- others be so quick to put their By Sean Spicer McGurn tion for a war- est way of presenting the facts diciary, into this process. names on something like this if (Regnery, 278 pages, $28.99) rant to spy on would be as follows: The cam- they didn’t have a FISA judge Carter Page, a former Trump paign and party of Candidate to give them cover? arly on a Saturday morning in January 2017, the day campaign official. The applica- #2 (Hillary Clinton) paid The introduction of The argument is not new. E after the inauguration, Sean Spicer got his first phone tion’s release kicked off a furi- Source #1 to produce a dossier judges shields the Just before FISA became law, a call from the White House operator—the president was ous effort by Democrats and to discredit her rival, Candi- Yale law professor wrote a pro- on the line. “Sean, have you seen the news?” The president their allies in the press to gas- date #1. executive branch from phetic article in these pages had seen a panel discussion on television comparing the size light the American people into Lost in the competing nar- accountability. about the abuses to come. His of the crowd at his inauguration with the size at Barack disbelieving what they could ratives, meanwhile, is the name was Robert Bork, and Obama’s. Mr. Spicer was getting his kids out of bed and read with their own eyes. Yet larger FISA scandal. The Page among his worries were that hadn’t planned on giving his first briefing until Monday, but notwithstanding all the sound warrant confirms that a FISA judges would show undue def- he answered the call of duty. And there began Mr. Spicer’s and fury, its 412 pages—even court effectively insulates As even the redacted ver- erence to intelligence agencies, tenure as one of the most widely scorned press secretaries in redacted form—largely vin- those who deploy the most sion of the document released that congressional committees in history: a briefing on Saturday afternoon during which he dicate the principal object of formidable powers of the fed- this weekend ought to make wouldn’t be able to summon scolded the press corps, spat out false statements and left Democratic attack, California’s eral government from the con- clear, a FISA court is no guar- judges to explain their warrant the podium without taking questions. GOP Rep. Devin Nunes. sequences of what should be antee against surveillance approvals, and, above all, that With more than a year to Back in February, Republi- an extraordinary decision: spy- abuse. To the contrary, it can giving courts the last say reflect on that moment, Mr. cans on the House Intelligence ing on a fellow American. invite questionable assertions would have “the effect of im- Spicer, in his memoir “The Committee, led by Mr. Nunes, Like so many other bad of this extraordinary power munizing everyone, and sooner Briefing: Politics, the Press, issued a report stating that the ideas, the Foreign Intelligence because no one is ever really or later that fact will be taken and the President,” comes to a Steele dossier, compiled by a Surveillance Act comes out of on the hook. In this case, in- advantage of.” novel conclusion about what former British spy, was “an es- the 1970s. Senate hearings led stead of vetting Mr. Steele’s In the short term, Mr. happened that day. “I had sential part” of the application by Idaho Democrat Frank specific allegations, the FBI Trump would serve himself wrongly assumed I knew what for a warrant on Mr. Page un- Church exposed controversial got away with deeming him better by forgoing tweets Donald Trump wanted,” Mr. der the Foreign Intelligence domestic spying on Americans. “reliable” because they’d found about witch hunts and instead Spicer writes. “Instead of Surveillance Act. In this Mr. Along with the general antipa- him credible in other cases. ordering the declassification of bringing the White House press Nunes was supported by for- thy toward all things Nixon, it Perhaps the redacted mate- documents that would show corps to heel, he had wanted a mer FBI Deputy Director An- led Congress to enact FISA in rial includes some verification the American people just what polished, nuanced argument drew McCabe, who testified to 1978 and Jimmy Carter to sign of Mr. Steele’s claims. But so the Justice Department and defending his position”—that is, Congress that without the it into law. far there’s no hard evidence, the FBI did in 2016. In the lon- that Mr. Obama’s crowd was not Steele dossier there would In the decades since, the na- and Mr. Page hasn’t been ger term, Congress should con- bigger than his. “Every time the have been no warrant. tion has become accustomed charged with anything. Is this sider getting rid of FISA courts president had checked in with me, I had The Nunes report further to having oversight and ac- really the way an intelligence altogether. Because without said like a good soldier, ‘We’re on it, Mr. claimed the FISA application countability that should be im- agency should declare an judges to hide behind, execu- President.’ Instead, I should have talked with him didn’t inform the judge that posed by the people’s elected American citizen “an agent of tive officials who order spying more and understood exactly what he wanted me to do.” the Steele dossier was paid for representatives fobbed off on a foreign power”? on their fellow citizens will Actually, there was another option: He could have told the by the Democratic National special counsels, inspectors When President Trump have to own those decisions president it is a mistake to spend his first day on the job Committee and the Hillary general and the like. We forget tweeted Monday morning that themselves. obsessing over something as trivial as crowd size and, Clinton campaign. Here too what a break FISA marked it was “looking more & more Write to [email protected]. further, that there is no way to make a “polished, nuanced argument” defending a position that is demonstrably untrue. Mr. Spicer’s book is much like his tenure as press secretary: short, littered with inaccuracies and offering up one Putin Is Weak. Europe Doesn’t Have to Be consistent theme: Mr. Trump can do no wrong. Mr. Spicer has not been well served by the book’s fact We hear too while driving a wedge between connection, and only 52% have Europe’s weakness has pro- checkers and copy editors. He refers to the author of the much about Europe’s indebted South and a computer. vided Mr. Putin with opportu- infamous Trump dossier as “Michael Steele,” who is in Vladimir Pu- creditor North. The Continent’s Romania and Bulgaria— nities to promote Russian truth the former chairman of the Republican National tin these days so-called migration policy is a where living standards are power by supporting populist Committee, not the British ex-spy Christopher Steele. He and not nearly humanitarian and a political lower than in Turkey—are ex- parties across the EU and recounts a reporter asking Mr. Obama a question at a enough about disaster. Berlin’s feckless ap- ceptionally poor. Conditions deepening his relationship with White House press conference in 1999, a decade before Mr. GLOBAL the actual proach to security has left Eu- are better elsewhere, but the leaders like Hungary’s Viktor Obama was elected. There are also some omissions: He VIEW forces reshap- rope’s most important power a gap between prosperous Euro- Orbán. Yet even in the age of writes about working for Rep. Mark Foley (R., Fla.), who he ing the world. geopolitical midget, lecturing pean countries like Germany Trump, Moscow is too weak, says “knew how to manage the news cycle. And on top of By Walter Yes, the Rus- sanctimoniously while others and postcommunist states like too poor, too regressive and all that, he was good to staff and fun to be around.” He Russell Mead sian president shape the world. Meanwhile Poland remains immense. Poles too remote to shape European never gets around to mentioning that Mr. Foley later has proved a the EU’s Byzantine government on average earn only a third as politics. The days when Rus- resigned in disgrace for sending sexually explicit messages brilliant tactician. And, Presi- machinery grinds at an ever much as Germans. The rural, sian rulers like Catherine the to teenage boys working as congressional pages. dent Trump’s fantasies aside, slower pace, creating openings eastern parts of Poland are Great and Alexander I could di- In praising the president, Mr. Spicer deploys an army of he is a ruthless enemy of for Mr. Putin and Turkish Pres- rect events across the Conti- metaphors. At various points, he describes Mr. Trump as a American power and European ident Recep Tayyip Erdogan. nent are gone for good. The rock star, an inflatable ball in a swimming pool (he pops up coherence. Yet Russia remains Europe’s weakness invites au- Moscow is a sideshow. collapse of the Soviet Union whenever someone tries to take him down), the Energizer a byword for backwardness thoritarian assertion in the The real dangers and the unification of Germany Bunny and, finally, a unicorn on a high wire. Seriously. “His and corruption. Its gross do- borderlands. mean the most important rela- high-wire act is one that few could ever follow,” Mr. Spicer mestic product is less than Another failure of equal come from within tionship in the trans-Atlantic writes. “He is a unicorn, riding a unicorn over a rainbow.” 10% that of the U.S. or the Eu- consequence still is not widely the Continent. world is between Washington ropean Union. With a declin- understood: the failure to inte- and Berlin. ing population and a funda- grate the countries of Central President Trump is right Donald Trump’s first White House spokesman mentally adverse geopolitical and Eastern Europe into West- that much of the trans-Atlantic compares the president to a rock star, the situation, the Russian Federa- ern prosperity and institutional poorer still. Conditions in ex- relationship needs to be re- tion remains a shadow of its life. The world’s 10 fastest- Soviet countries like Armenia, thought. He is right that Ger- Energizer Bunny and a unicorn. Soviet predecessor. shrinking countries are all in Belarus, Georgia and Ukraine many asks too much and offers Add up the consequences of Eastern Europe: Bulgaria, Croa- are even worse. Corruption is too little for the current rela- Mr. Putin’s troops, nukes, disin- tia, Hungary, Latvia, Lithuania, rampant, with weak institu- tionship to be sustainable. He Mr. Spicer’s book is light on insider detail of what was formation campaigns, financial Moldova, Poland, Romania, tions unable to stop it. is right that the European going on in the White House during his tumultuous time as aid to populist parties—and Serbia and Ukraine. All expect The hubris that led so many Union has worked itself into a press secretary. In fact, he spends the first third of the book throw in the power of his au- to see their populations shrink in the West to believe that Eu- political crisis, and that the recounting his rise through Washington politics, when he thoritarian example. Russia still at least 15% by 2050. rope had entered a post- Continent’s errors and illu- truly was an amiable and well-liked spokesman for a long does not have the ability to roll For the enterprising and historical paradise is fading. A sions strengthen Mr. Putin’s list of Republicans. It is not a résumé of a Trump true back the post-1990 democratic mobile, there is good news; be- clearer if darker picture has hand. believer. He did a stint as a spokesman for the U.S. trade revolution, overpower the tween three million and five emerged. Swaths of Central But if the president thinks representative, where his job was to champion the very North Atlantic Treaty Organi- million Romanians live and and Eastern Europe will not Mr. Putin’s Russia can serve as trade deals that Mr. Trump vilifies, and later for the RNC, at zation, or dissolve the EU. work in other EU countries, en- smoothly and painlessly assim- the linchpin of a new American a time when party officials were quietly trying to prevent The West is in crisis be- joying opportunities they could ilate into the West. If voters in security strategy, he is overes- Mr. Trump from winning the Republican nomination. cause of European weakness, not find at home. But for those these countries lose faith that timating Russia’s capacity, Another theme of “The Briefing” is the malevolence of not Russian strength. Some of who cannot or do not wish to Western ideas and institutions misreading Mr. Putin’s goals, “the media,” which he describes as a “herd” that “closes the Continent’s difficulties are move on, life can be hard. Al- can improve their lives, the and underestimating the im- ranks.” He lashes out at Politico, which did a lot of reporting well known. France foolishly most 30 full years after the fall political gap between East and portance of the trans-Atlantic on the paranoia and infighting within Mr. Spicer’s White imagined the euro would con- of communism, more than one- West will widen. When the EU alliance. Moscow is a side- House communications team. “Politico, in my opinion, was tain the rise of a newly united fourth of Romanians live on is more preoccupied with in- show. To protect American the anchor that dragged down media standards.” Germany after the Cold War. In less than $5.50 a day. Across ternal divisions, it is less able prosperity and security, Mr. There is much that can be fairly criticized about the news fact it has propelled Germany’s Romania, less than half of to respond effectively to Rus- Trump most needs to strike a media in the Age of Trump, but Mr. Spicer’s effort here falls unprecedented economic rise households have an internet sian moves. deal with Berlin. flat. He annihilates straw men, writing: “In the minds of many in the press, the First Amendment is solely about them and their rights. In reality, it’s about all of us and our ability to express ourselves.” Who, exactly, believes that the First An Online Mob’s Faulty Transmission Amendment applies only to the press—or that the White House press secretary doesn’t have First Amendment rights? By Andy Ngo face smeared with feces. he kept answering, hoping it incident illustrates that the On the president’s decision to boycott the White House I went Wednesday to Total would be a customer. right can do it too. The explicit Correspondents’ Dinner in 2017, Mr. Spicer writes: “True to Portland, Ore. Performance and met Mark Ab- Facebook and Twitter users beheading artwork displayed form, some in the media started to buy into the notion that by ou might have seen the olofia, the 66-year-old landlord, eventually began circulating at the One Grand Gallery is a not going to a dinner, we were somehow assaulting the First Y image last week of Presi- mechanic and U.S. Air Force the correct phone number and stunt meant to provoke. The Amendment.” As a member of the White House press corps, I dent Trump being be- veteran. He told of receiving a address. The owner, Jordan image is unoriginal, borrowing never heard anybody say that skipping the dinner was an headed, ISIS-style, displayed barrage of phone calls when he Chan-Mendez, responded to heavily from comedian Kathy assault on the First Amendment. Calling the press the enemy on a Portland window. “This is arrived Tuesday morning, his threats by quickly remov- Griffin’s 2017 photo-stunt in of the people, threatening to change libel laws, branding a Company called Total Perfor- shortly after the tweets went ing the offending artwork and which she posed holding a legitimate stories as fake, maybe. But skipping the dinner? No. mance Torque Converters,” viral. He’d seen the art the clearing the gallery. By Tues- bloody decapitated head re- While Mr. Spicer never second-guesses his former boss, someone tweeted, along with day evening, almost all traces sembling Mr. Trump. She ini- he does go after the president’s favorite social-media tool. the photo and the transmission of the installation and its cura- tially apologized but later used “Twitter is not glue,” he writes. “It is a solvent. It is breaking shop’s address and phone Total Performance tor were gone. similar imagery to promote us down.” Without taking issue with a single Trump tweet, number. It went viral. Torque Converters This incident highlights the her current tour. he adds: “We can’t settle for just keeping up with the lowest What happened next was danger of social-media mob- Conservatives can’t expect common dominator [sic] on Twitter.” predictable. Hundreds of peo- didn’t depict Trump bing to innocent people like to be taken seriously when they Mr. Spicer takes issue with the question I put to him at ple swarmed the shop’s phone being beheaded. Mr. Abolofia. In March, mock social-justice warriors for his first official White House briefing: “Is it your intention to lines, Facebook, Yelp and Kachka, a Jewish-owned Rus- taking the bait from provoca- always tell the truth from that podium, and will you pledge Google pages with vitriol and sian restaurant in Portland, teurs like Milo Yiannopoulos if never to knowingly say something that is not factual?” The threats. But the MAGA mob was smeared as being sympa- they are going to engage in the question, a version of which I also asked Obama press targeted the wrong establish- night before. Mr. Abolofia, who thetic to Nazis when it refused same behavior when someone secretary Josh Earnest, was prompted by Mr. Spicer’s error- ment. The source of the of- is Jewish, found the Hitler to kick out a patron wearing a like Mr. Chan-Mendez pulls a filled statement on the inauguration crowd size two days fending image was One Grand comparisons especially taste- Luftwaffe shirt. Deavon Snoke, stunt like this. before. Mr. Spicer felt that, by asking the question, I was Gallery, a tenant of Total Per- less. Some of his relatives sur- the offended patron, shared a And lost in all this tit-for- branding him a liar. formance. It’s part of a show vived the Holocaust. photo of the man on Facebook tat social-media mobbing is “Rarely do reporters have their integrity questioned the titled “F— You Mr. President,” Mr. Abolofia doesn’t have a along with her account of the any consideration for business way Jonathan questioned mine,” he writes. That—coming featuring vulgar anti-Trump storefront; he’s a wholesaler, story. It went viral, siccing dig- owners and other innocent from the former spokesman for a president who routinely artwork from more than three and the phone is vital to his ital mobs of so-called antifas- bystanders. accuses reporters of making things up and betraying their dozen artists. One image business. Blissfully unaware of cists on the business. country—is quite a statement. showed Mr. Trump with a Hit- social media’s ability to supply Social-media mobs are of- Mr. Ngo is an editor at ler mustache, another with his an unending source of rage, ten on the left, but last week’s Quillette. Mr. Karl is chief White House correspondent for ABC News. A14 | Tuesday, July 24, 2018 THE WALL STREET JOURNAL. OPINION

REVIEW & OUTLOOK LETTERS TO THE EDITOR

The FBI’s FISA Faults Politics Have Already Entered the Boardroom

he FBI over the weekend finally re- Several convoluted footnotes refer to Phil Gramm and Mike Solon’s “Keep stewardship and long-term value in a leased its Foreign Intelligence Surveil- “Source #1” (Mr. Steele) and a “U.S.-based law Politics Out of the Boardroom” (op-ed, rapidly changing world is more im- T July 19) criticizing the role of large portant than ever for ensuring healthy lance Act applications for warrants firm” (Clinton firm Perkins Coie), as well as an index managers misrepresents State public markets, resilient economic against former Trump aide “identified U.S. person” (Mr. The documents show the Street Global Advisors’ core invest- growth and shared prosperity. This is Carter Page, and now we know Simpson) who was “likely” in- ment mission. We engage with compa- the future of long-term investing. why the bureau resisted dis- bureau relied heavily terested in discrediting Mr. nies not to force arbitrary political or CYRUS TARAPOREVALA closure. Even in heavily re- Trump. These obscure refer- social “values” on them, but rather to President and CEO dacted form, the applications on the Steele dossier. ences are quickly followed by promote long-term value for millions State Street Global Advisors confirm that the FBI relied on another footnote in which the of investors saving for the future in a Boston dubious partisan evidence to FBI says that, despite that mo- world that has become increasingly justify its warrant and withheld relevant infor- tivation, it is confident that “Source #1” is obsessed with the short term. Unlike Vanguard has developed something mation from the court. “credible.” So the FBI was vouching for this par- our active strategies, where we can called an Investment Stewardship pro- The applications also vindicate the criticism tisan source. sell a company when we disagree with gram. The program brochure goes to of the FBI’s surveillance requests that were laid It’s true that the first application doesn’t management, in our index-based strat- great lengths to highlight Vanguard’s egies we represent quasi-permanent advocacy for trendy issues such as out in February by House Intelligence Chairman mention any names. But it does refer to “Candi- capital. Our fiduciary obligation is to board gender targets, board diversity Devin Nunes. The committee’s findings were date #1” (who is clearly Donald Trump), “Candi- maximize the probability of attractive targets, sustainability reporting and based on a review of the FISA applications, date #2” (Hillary Clinton) and “Political Party long-term returns for those who in- climate risks. Traditional concerns, which were still classified at the time. The main #1” (Republicans). The FBI had an obligation to vest with us. such as executive pay, board experi- Nunes claim was that the FBI made the Steele tell the court that the dossier and its “credible” We have created a strategic en- ence, conflicts of interest and unequal dossier—which was commissioned by the Clin- source had been retained and paid for by “Candi- gagement program that raises mate- voting-share classes, are included but ton campaign and Democratic National Commit- date #2” and “Political Party #2” (Democrats), rial issues with boards, including ESG not highlighted. tee—“an essential” part of its initial application. but it didn’t. By the way, Mr. Comey signed three concerns that might impact compa- Vanguard seems to be seeking to The FISA documents confirm this. of these applications, yet he claimed on his re- nies’ ability to generate sustainable immunize itself against curious regu- More than half of the first FISA application’s cent book tour that he “still” didn’t know who returns. We carefully select the issues, lators and others looking at legal is- 66 pages are devoted to technical matters and paid for the dossier. based on rigorous research identifying sues surrounding its proxy voting by their materiality for investment per- signing up with nonprofit and non- a history of Russian electoral interference. Of the The FISA documents also confirm that the formance. We seek maximum trans- governmental organizations to allow roughly 25 pages that focus on Mr. Page, much FBI cited a Sept. 23, 2016 story in Yahoo News parency around our views, the re- it to prominently display their logos. of it reports his dealings with Russians, his re- to buttress its Steele dossier information with search underpinning them and our All the Vanguard material reminds sponse to the news that he was under investiga- the court—even though Mr. Steele was also the voting intentions through our thought me of an article in Foreign Policy tion, and a largely redacted conclusion. source for the Yahoo News story. leadership and conversations with from Feb. 21 of last year: “Saving the The guts of the application is titled “Page’s Democrats insist that the FBI used the Yahoo both boards and our clients, who are World, One Meaningless Buzzword at Coordination With Russian Government Offi- story only to describe Mr. Page’s response to the demanding greater clarity around a Time,” about how the corporate cials on 2016 U.S. Presidential Election Influence investigation, not for corroboration. The applica- these issues. world has turned human rights into a Activities.” This is the FBI’s evidence section, tions show otherwise. The FBI cites the Yahoo While we will use the analytics pro- theater of meaningless programs, con- and, though heavily redacted, it looks to be al- News story after its dossier-evidence section, not- vided by proxy advisers, we never ventions, meetings and training outsource our proxy voting decisions. courses. ing that the story said that “intelligence reports” most entirely dossier-related. Far from injecting politics into board- STEPHEN WEEKS Its opening paragraph says that the “FBI has and a “well-placed Western intelligence source” rooms, we believe our focus on active Houston learned that Page met with at least two Russian had also made claims like those in the dossier. But officials” on a trip to Russia in 2016 and that it the “reports” were the dossier, and the “Western got this information from an “FBI confidential intelligence source” was Mr. Steele. human source (Source #1),” who is dossier au- iii Cell-Grown Meat Is Better for All of Nature thor Christopher Steele. Most of what is unre- Our media friends are dismissing all this as dacted that follows details the dossier’s claims no big deal because they say Mr. Page’s history Growing crops to feed animals so farming of animals and the cost to about these Russian meetings, with further ref- of personal Russian dealings justified his sur- we can eat meat is an extraordinarily our personal and national health erence to “Source #1.” veillance in any case. Yet so far no one has pro- inefficient production method, so it is that we are elated to learn of the This is important given that FBI assistant di- duced evidence that Mr. Page was anything but encouraging to see that another con- worthy advancements of U.S. and ventional meat company has invested European scientific efforts in creat- rector Bill Priestap told Congressional investiga- an innocent abroad who liked to boast about his in clean meat (“Cell-Grown Meat Gets ing edible, cost-friendly alternatives. tors in October 2017 that the FBI’s efforts to cor- contacts. He certainly was a minor figure in the New Funding,” Business & Finance, I have tried each and every variety I roborate the dossier were still in their “infancy” Trump campaign. July 17). The technology involves have discovered in shops and restau- at the time of the first application. Months later And that still doesn’t justify the FBI’s use of growing real meat directly from cells. rants—and have found them deli- former FBI Director Jim Comey referred to the uncorroborated partisan smears as part of its Of course, with greater efficiency cious. I compliment any endeavor dossier as “salacious and unverified.” To date no application. At best the FBI appears to have comes greater profit. I’m sure major that seeks to end the slaughter of investigator has offered public proof of the dos- played fast and loose with the facts to stretch the U.S. meat processors and their coun- animals on the current unsustain- sier’s most damaging claims. Yet on the basis of ethical boundaries of the FISA statute. At worst terparts in Israel, Switzerland and able scale, and look forward to more an uncorroborated document commissioned by the FBI dissembled to target a man because they Germany don’t mind that clean meat advancements of this nature with a rival presidential campaign, the FBI accused wanted to unleash a counterintelligence cam- will be better for the environment great hope for a kinder and gentler and won’t require the routine use of world. a U.S. citizen of being an “agent of a foreign paign against a presidential campaign. Either antibiotics, but their investment deci- ELAINE LIVESEY-FASSEL power” who should be wiretapped. one tarnishes the FBI’s reputation. sions are guided by profitability. If Los Angeles Mr. Nunes also reported that the FBI did not Democrats and their media allies won’t admit there could be a stronger endorse- inform the FISA court that the dossier and any of this because they are invested in the narra- ment of clean meat, I don’t know trusted “source” (Christopher Steele) were paid tive that Russian meddling elected Donald Trump. what it would be. Another Appreciation of the by the Clinton campaign. And sure enough, no- But two years of investigation later we’re still BRUCE FRIEDRICH where do the FISA applications mention the waiting to see evidence of that. What the FISA ap- Co-founder and executive director Long, Endless Life of Unrwa words Clinton, Democratic National Committee, plications show is that the FBI did abuse its sur- The Good Food Institute Regarding former Unrwa Commis- Fusion GPS (the Clinton-financed oppo research veillance powers. There’s still more to learn, and Washington sioner Karen Koning AbuZayd’s letter firm that hired Mr. Steele), or Fusion co-founder Mr. Trump should declassify and release every- of July 19: Every refugee in the world Glenn Simpson. thing that can be safely disclosed. So aware are we now of the abu- receives U.N. help from the U.N. High sive nature of factory and industrial Commissioner for Refugees (UNHCR), except a select group of people called Palestinians, living in Syria, Jordan, Dumb Idea of the Week Hemingway’s Ambulance Lebanon, Gaza and the so-called occu- pied territories including what was ometimes we wonder what kind of dis- ernment, though perhaps revocation might af- Service in Better Perspective called East Jerusalem, who receive S cussions take place inside the Trump fect a consulting contract. But the idea, which Regarding Robert R. Garnett’s “A help from the United Nations Relief White House. On Monday press secretary was raised by Senator Rand Paul on the week- Lost Love Gave Us Hemingway’s Spare and Works Agency for Palestine Refu- Sarah Sanders disclosed that end regarding Mr. Brennan, Prose,” op-ed, July 7: According to Ar- gees in the Near East (Unrwa). President Trump may revoke Revoking clearances won’t stop their criticism. It’s len J. Hansen’s well-researched “Gen- The UNHCR provides services to all the security clearances of six is petty. Here’s merely an act of political retri- tlemen Volunteers: The Story of other Palestinian refugees including former officials who have crit- bution. American Ambulance Drivers in the those of the Gulf states, Egypt, Iraq, a better idea. Great War, August 1914—September Yemen or anywhere else in the world. icized him. When someone If Mr. Trump wants to do 1918,” Ernest Hemingway saw active Why this duplication? Why not let UN- came up with that idea, did ev- something more consequen- duty from June 4 to July 8, 1918, half HCR handle all the refugees? Who eryone on the staff shake their tial, and in the public interest, of which time was spent in the ambu- needs Unrwa? heads and say, “yeah, that’ll show ’em?” he’ll ask his Administration to find the person lance corps. His section near Vin- UNHCR deals with all its refugees Someone should have said, “That’s a dumb who leaked in early 2017 that former National cenza, Italy, was relatively inactive by (1) voluntary repatriation, (2) in- idea. It will make us look petty, and it won’t ac- Security Adviser Michael Flynn had been wire- and it is likely that he drove an am- tegration in their countries of asy- complish anything.” tapped by U.S. spooks as he talked with the Rus- bulance only once or twice, at the lum and (3) resettlement in third Ms. Sanders said the Administration is look- sian ambassador to the U.S. most. countries. Unrwa will have none of ing at the clearances of former CIA Directors That was a truly nasty leak given that Mr. He earned his war medals as a that. Its role is to help refugees until John Brennan and Michael Hayden, former FBI Flynn was probably “unmasked,” in spy par- canteen runner, riding a bicycle to there is a “comprehensive solution” the front line with cigarettes and Director James Comey, former Director of Na- lance, by Obama officials. Americans whose to the Israeli-Arab conflict. This chocolate. It was in this role that he seems to mean a return of Unrwa’s tional Intelligence James Clapper, former Na- conversations show up incidentally in U.S. wire- was wounded. In fairness to other clients to Israel. tional Security Adviser Susan Rice and former taps of foreigners are supposed to have their volunteer ambulance drivers, it is im- JORDAN ROSENBERG FBI Deputy Director Andrew McCabe. names redacted. That leak was a real injustice portant not to overstate Hemingway’s San Francisco These officials don’t still work for the gov- to hold someone responsible for. role. SUSAN STEIN The reason the Palestinian refugee Omaha, Neb. problem has never been solved is that Pompeo’s Iran Truth-Telling the surrounding Arab states don’t want it to be solved. They prefer to onald Trump’s all caps Twitter warning “Iran is run by something that resembles the When the Point of War Was keep them poor and stateless to justify Sunday night to Iranian President Has- mafia more than a government,” he said. Achieving a Swift Victory their continued conflict with Israel. D MARTIN WASSERMAN san Rouhani not to “THREATEN” the Mr. Pompeo also offered support to Iran’s After reading Dorothy Rabinowitz’s Palo Alto, Calif. United States or suffer severe The President’s protesters, declaring “The “War, Vividly Rendered” about the consequences gathered all the United States hears you; the Smithsonian Channel’s “The Pacific media attention on Monday. tweet distracts from United States supports you; War in Color: The Enemy Under- Pepper ... Which is too bad, because Sec- the United States is with you.” ground” (Life & Arts, July 13), I came And Salt retary of State Mike Pompeo a better speech. His words will reach ordinary up with a another title, “What a Dif- delivered a speech Sunday Iranians, given that millions ference a War Makes.” Our current THE WALL STREET JOURNAL that deserved more notice for use technology to evade cen- and recent (going back to Vietnam) speaking the truth about Iran. sors to hear news from foreign sources. Mr. military efforts contrast sharply with Mr. Pompeo explained at the Reagan Presi- Pompeo also announced that the U.S. Broad- the invasion of Saipan (and all of dential Library how the Iranian regime’s zeal casting Board of Governors will soon launch a World War II). There were no restric- tive rules of engagement, no confer- to spread Islamic revolution has led its leaders “24/7 Farsi-language TV channel” for Iranian ring with attorneys and far less con- to direct funds to “terrorists, dictators and viewers. Good idea. cern with collateral damage. The war proxy militias” rather than to the welfare of or- The Secretary also called on other nations was fought to emphatically defeat the dinary Iranians, and he called out Tehran’s cor- to join the U.S. “pressure campaign” against enemy. Nowadays, victory isn’t even ruption by name and example. Tehran. Mr. Pompeo’s message is aimed espe- on the agenda; containment perhaps, Consider Interior Minister Sadeq Mahsouli’s cially at Middle Eastern and European allies but not victory. “lucrative construction and oil trading con- that would rather profit from business with SAMUEL FRAZER tracts” with Iranian Revolutionary Guard Iran. The French in particular might mull Mr. Fort Myers, Fla. Corps-linked (IRGC) companies. Or Grand Aya- Pompeo’s message after an Iran-backed bomb tollah Makarem Shirazi, the “Sultan of Sugar,” plot on a pro-democracy rally near Paris was Letters intended for publication should whose business has generated more than $100 recently foiled. be addressed to: The Editor, 1211 Avenue of the Americas, New York, NY 10036, million. Or Supreme Leader Ayatollah Ali Mr. Pompeo and U.N. Ambassador Nikki Ha- or emailed to [email protected]. Please Khamenei’s “own personal, off-the-books ley are laying out a comprehensive and nuanced include your city and state. All letters hedge fund called the Setad, worth $95 bil- case for Mr. Trump’s campaign against Tehran’s are subject to editing, and unpublished lion,” which is untaxed and serves as a “slush misrule that will get Iranian attention far more letters can be neither acknowledged nor “How can I be here? returned. fund for the IRGC.” than blustery tweets. I didn’t believe in any of this stuff.” THE WALL STREET JOURNAL. Tuesday, July 24, 2018 | A15 OPINION Zero Tariffs? To Beat Trump, Get a Grip There’s a By Ted Van Dyk anti-immigrant and a tool of big fi- nance. That theme worked so well emocrats are determined that Democrats repeated it in con- Precedent to remove President gressional races two years later. Now Trump from office in the beat goes on, only stronger, D 2020—or before, if that against Mr. Trump. By Bill Lane becomes possible. If prec- There are some basic misappre- edent holds, he can be unseated in hensions here. Most voters see abor- f President Trump is serious 2020 by a candidate perceived as his tion and gay rights as accepted issues I about using current tensions to opposite: experienced, serious, knowl- and wonder why Democrats present usher in an era of free, fair and edgeable about policy. If Democrats them as threatened. They do not see reciprocal trade, there is an approach attempt to rush the process, amid racism as on the rise or the country that has worked. It won’t excite the current charges that Mr. Trump is a as moving back toward Jim Crow. On president’s political base or dominate “traitor” and Russian agent and that the contrary, they see several decades the news cycle, but the strategy has his Supreme Court nominee is an ex- in which the barriers to equal oppor- the potential to calm markets, en- tremist, they will further energize tunity, legal or otherwise, have been courage economic growth and create their take-it-to-the-streets wing but steadily dismantled. They do worry a lasting legacy. alienate all but partisan Northeast about the problems of big-city neigh- On April 7, 1988, Caterpillar CEO and Pacific Coast voters. borhoods: violence, drug use, broken George Schaefer made a simple, The present political and media families, unemployment, daunting straightforward proposal in a letter

rage over Mr. Trump’s alleged sell- CHAD CROWE dropout and incarceration rates. But to U.S. Trade Representative Clayton out to Vladimir Putin is an over- they see little evidence that “white Yeutter. He set the stage by pointing reach. Any damage done at their re- Mr. Trump would be strengthened love Mr. Trump; they rejected the privilege” is the cause. They like im- out that “tariffs on Caterpillar-type cent summit pales compared with rather than harmed. other guys. migrants and refugees but generally products are generally 2 to 2.5 per- the effects, for instance, of the ear- Democrats should take a fresh look So where does that leave Demo- believe everyone should take a legal centintheUnitedStates...4to10 lier Yalta Summit at which Stalin got at why and how Mr. Trump won the crats? A writer at the Washington path to citizenship. percent in other developed countries 2016 election. The party’s national Post recently put together a list of National security and the econ- . . . and, over 15 percent in most de- leadership claims it was because of the top Democratic presidential con- omy are the two principal issues in veloping countries.” Democrats won’t win support from white supremacists, reli- tenders for 2020. Ranked first, not any presidential campaign. The Schaefer’s remedy was to the in 2020 by calling him a gious nuts, nativists, misogynists and surprisingly, was Mr. Sanders, given Trump record in both those realms point, with no caveats: “To correct Latino-haters. This is a failure to rec- his strong 2016 showing. Also near should be critiqued by Democrats. these inequities, we would propose ‘traitor’ and doubling ognize what actually happened. Presi- the top was former Vice President They should, in turn, offer credible that tariffs on earthmoving, con- down on identity politics. dent Trump was the consequence— Joe Biden, who relates well to mid- alternative policies. If they do, and struction, and material handling ma- not the cause—of a nationwide loss of dle-American voters. But most of the their presidential candidate seems chinery, and engines be completely confidence in all of the American es- rest of the contenders take an angry, reasonable, Democrats can reclaim eliminated—worldwide.” tablishment: political, media, cultural, accusatory line toward Mr. Trump. the White House in 2020 not through a dying President Franklin D. Roose- business, financial. Sen. Bernie Sand- Leading the pack were Sens. Eliza- a constitutional crisis but through a velt to cede him Eastern Europe, or ers played on similar sentiments on beth Warren and Kamala Harris, free election and with a popular If Trump is serious about the Khrushchev-Kennedy Vienna the Democratic side and, had he from Massachusetts and California, mandate. free and fair trade, he Summit, which led to the Cuban known his potential sooner, could have respectively, where bashing the pres- My own guess: By 2020, Mr. Missile Crisis, Berlin Crisis and a won his party’s nomination. ident earns cheers from the party Trump will have fatigued the public. should follow the example huge buildup of U.S. ICBM forces and Most voters knew before the elec- faithful. Voters will be turned off by him, just of Caterpillar in 1988. budget. Mr. Trump stumbled in Hel- tion that Mr. Trump was a crude, Shrill attacks and identity politics as they were in turn by the Johnson, sinki, but stumbles do not amount to freewheeling, womanizing egotist, a got a strong start during Bill Clin- Nixon and Carter presidencies. They treason. man who very well might finance ton’s two presidential terms. Under will want to see another face on their Democrats and some media are his ventures with money from fire on multiple fronts, the Clinton TV sets. The danger is that Demo- To make clear that this proposal now calling for Mr. Trump’s impeach- sketchy sources. They discounted all White House took an aggressive pos- crats by then may have fatigued the was no ruse, he added: “You should ment, presuming that a post-Novem- those negative factors because he ture toward critics, asserting that it public even more. know that in some markets—and ber Democratic House majority was so obviously different from the was just “fighting back.” Democrats with some products—tariffs actually would bring such a vote. But it is a establishment candidates in whom repeated that pattern in President Mr. Van Dyk was active in Demo- provide immediate benefit to Cater- risky strategy that would polarize they had lost trust. Think about it: Obama’s 2012 campaign. They labeled cratic national policy and politics for pillar. But, in the long run, we’re con- Americans deeply. The case against In one campaign, Mr. Trump pol- Mitt Romney, a temperate former 40 years. He is author of “Heroes, fident that our employees, custom- him would have to be airtight and ished off the Bushes, the Clintons, governor of Massachusetts, as anti- Hacks and Fools” (University of ers, and investors are best served based on indisputable fact. Otherwise and even Ted Cruz. Voters did not woman, antigay, antiblack, anti-Latino, Washington Press, 2007). when we’re allowed to compete in a totally open market.” That was it. No threats, no theat- rics, no hidden intentions of gaming Is Brett Kavanaugh Bad for the Jews? the system. Mr. Yeutter embraced Caterpillar’s Zero Tariff proposal. By Liel Leibovitz supremacists in this country feel designed to identify the most men- as they do from the right. When Others joined the bandwagon. more emboldened than they ever acing anti-Semites in America. It anti-Israeli activists slip fake evic- John Deere proposed that agriculture hen the Anti-Defamation have before because of the public profiled 36 people—all of them on tion notices under the dorm-room machinery be added to the list. Inter- W League was established in discourse and divisive rhetoric.” the right. doors of Jewish students at New national Paper insisted that paper be 1913, its mission was clear: That’s true enough, but the It’s obvious why the list in- York University, and a popular pro- added. A Zero Tariff Coalition was “To stop, by appeals to reason and threats turned out to be the work of cludes Andrew Anglin, proprietor gressive running for California’s organized and championed by Cater- conscience and, if necessary, by ap- a mentally unwell Israeli teenager. of the neo-Nazi website the Daily Assembly hails Louis Farrakhan, it pillar and International Paper’s leg- peals to law, the defamation of the Stormer. It’s less obvious why it is crucial that any watchdog rise endary Washington representative, Jewish people.” The ADL’s credo has wouldn’t also include bigots like to address bigotry no matter its Lyn Withey. By the time the General changed a bit since—it now aspires The Anti-Defamation Joy Karega, the Oberlin professor partisan origins. Agreement on Tariffs and Trade Uru- to an “ever-more just society”—but League loses sight of its who blamed Jews for 9/11, or Linda By focusing increasingly on the guay Round was concluded in 1994, it still presents itself as the nation’s Sarsour, the Women’s March orga- battles of the Democratic Party, and the zero-for-zero list also included primary watchdog against anti-Sem- mission and turns toward nizer who has celebrated Rasmea by weighing in on matters far re- pharmaceuticals, steel, toys, beer, itism. With nearly 2,000 hate Democratic partisanship. Odeh, a Palestinian terrorist con- moved from its traditional mandate, distilled spirits, furniture, as well as crimes against Jews last year, the victed of murdering two Israelis, the ADL is leaving American Jews medical and mining equipment. most in more than two decades, the or the organizers of Chicago’s Dyke behind. The dangers we face these The country coverage was broad. group could—sadly—still have its March, who last year expelled Jew- days are real, as the ADL itself is Caterpillar machines destined for Eu- hands full with the challenges of its Far from chastened, Mr. Greenblatt ish marchers holding up rainbow quick to report. We need a principled rope, Japan, Canada, South Korea original mission. doubled down on partisanship. “The flags emblazoned with the Star of organization committed to meeting and several other countries were no Which is why it was so dismay- impact is still the same,” he said. David. I posed this question to the threats wherever they arise and longer subject to tariffs. U.S. custom- ing to see the ADL release a state- “The emergence of the ‘alt right’ ADL at the time and received no practically positioned to do so, not ers benefited from lower prices and ment denouncing Judge Brett Ka- and the rising levels of abuse they answer. another feeble voice in the hallelujah better quality. vanaugh minutes after President perpetrated during the campaign You hardly have to be a na- chorus of progressive dogma. During 2011, before the World Trump announced his nomination to against Jews and other minorities is tional organization dedicated to Trade Organization Doha Round col- the Supreme Court. The ADL com- despicable.” fighting anti-Semitism to realize Mr. Leibovitz is a senior writer lapsed, a Schaefer successor, Doug plained of Judge Kavanaugh’s “dem- Four months later, the ADL pub- that the threats to Jews these for Tablet Magazine and a co-host Oberhelman, tried a Hail Mary pass onstrated hostility to reproductive lished “Naming the Hate,” a guide days come as fiercely from the left of its podcast, “Unorthodox.” to expand Zero Tariff coverage to freedom” and worried that his “ju- China, India, Brazil and others. Un- dicial record does not reflect the fortunately, though the European demonstrated independence and Union was on board and China hinted commitment to fair treatment for Iranian Terror on European Soil at interest in an expanded Zero Tariff all that is necessary to merit a seat proposal, others, including the U.S., on our nation’s highest court.” By Hossein Abedini them, carrying only a small briefcase. plot in Europe was thwarted with a had grown tired of the WTO process, Why would a group dedicated to One man fired nine bullets, the other’s few hours to spare. and the effort came up short. fighting anti-Semitism engage in this ossein, have you heard the gun jammed. They fled. I struggled to Separately, German police arrested In a perverse way, Mr. Trump may sort of partisan warfare? The answer ‘H news about the plot to survive for four months, including Assadollah Assadi, an Iranian diplo- have set the table to accomplish lies with the group’s CEO, Jonathan bomb the gathering?” My more than 40 days in a coma at Istan- mat based in Vienna. According to what proved impossible seven years Greenblatt, who succeeded Abe Fox- colleague asked me as I walked into bul’s International Hospital. German federal prosecutors, Mr. As- ago. The level of anxiety about trade man in 2015. A former junior aide in the office on Monday, July 2. He was sadi, the station chief of the Iranian is at an 89-year high. But what’s sur- the Clinton White House and special talking about the grand meeting of Ministry of Intelligence and Security, prising is the response to the pleth- assistant to President Obama, Mr. the Iranian opposition, hosted near I was attacked in Istanbul was the mastermind of the bombing ora of new U.S. tariffs. While the tit- Greenblatt has frequently steered the Paris the previous Saturday by the in 1990. An attack in Paris plot. He had ordered the Belgians to for-tat retaliation was expected, few ADL into the murky waters of party National Council of Resistance of attack the rally, and had handed them predicted the rush to lower tariffs on politics. Iran. A shiver went down my spine was foiled this month. the explosives at a June meeting in non-U.S. imports. The Trans-Pacific In March 2017, when hundreds of as I flashed back to 28 years ago in Luxembourg. He was arrested on a Partnership with its zero tariffs went Jewish communal institutions re- Istanbul. European warrant as he was rushing ahead without U.S. participation. ceived bomb threats, the ADL found In midafternoon on March 14, A few days after the attack, state back to Austria, where he enjoyed Japan and Europe agreed to elimi- a culprit in the Trump administra- 1990, I was being driven to the Is- TV in Tehran announced—falsely— diplomatic immunity. nate tariffs on each other’s products. tion’s supposed embrace of the far tanbul airport. Suddenly, a car that Mohammad Mohaddessin, chair- On July 10, a senior U.S. State De- Canada, Mexico and Australia seem right. “We’re in unprecedented blocked our path. Another car man of NCRI’s Foreign Affairs Com- partment official underscored that to have an endless appetite for new times,” Oren Segal, director of the pinned us in from behind, and two mittee, had been killed in Istanbul. It the plot to bomb the Paris opposition free trade agreements. Even China is league’s Center on Extremism, said strange men jumped from the front became evident that the attackers rally was only the most recent exam- slashing tariffs on imports, except at a press conference convened to car with guns. had meant to target him, not me. ple of Iran using diplomatic cover to those made in America. discuss the bomb threats. “White I opened the car door and rushed at Nevertheless, Tehran tried several plot terrorism in the heart of Europe. Before the U.S. becomes even times to finish me off while I was in So why are European governments more of a tariff fortress by imposing the hospital. On one occasion, agents remaining silent in the aftermath? a 20% levy on European and Japa- disguised themselves as Turkish po- One wonders how far they are willing nese cars and apparently all Chinese PUBLISHED SINCE 1889 BY DOW JONES & COMPANY lice; on another, they pretended to be to go to appease the theocracy ruling products, it may be time to harness Rupert Murdoch Robert Thomson friends coming to visit. Iran. this newfound global appetite for Executive Chairman, News Corp Chief Executive Officer, News Corp Those plots were foiled, but many Europe should realize that it can’t zero tariffs. Matt Murray William Lewis Editor in Chief Chief Executive Officer and Publisher other victims were not as lucky. The conduct business as usual with a Instead of escalating what is be- human-rights activist Kazem Rajavi state that has institutionalized ter- coming a U.S. vs. world trade war, Karen Miller Pensiero, Managing Editor DOW JONES MANAGEMENT: Mark Musgrave, Chief People Officer; was fatally shot in Geneva that same rorism as statecraft. The embassies the administration could use the cur- Jason Anders, Chief News Editor; Thorold Barker, Edward Roussel, Chief Innovation Officer; Europe; Elena Cherney, Coverage Planning; year, and several Kurdish activists and agencies of the ayatollahs’ re- rent international anxiety to achieve Anna Sedgley, Chief Operating Officer Andrew Dowell, Asia; Neal Lipschutz, Standards; were killed in the two years thereaf- gime are centers of terrorism and es- an effective global zero-tariff accord. Meg Marco, Digital Content Strategy; OPERATING EXECUTIVES: ter. A German court four years later pionage. European countries should Even more impressive—given Mr. Alex Martin, Writing; Michael W. Miller, Features Ramin Beheshti, Product & Technology; & Weekend; Shazna Nessa, Visuals; Kenneth Breen, Commercial; implicated the most senior officials in expel the regime’s diplomats and in- Trump’s skill set—I believe he could Rajiv Pant, Product & Technology; Ann Podd, News Jason P. Conti, General Counsel; Tehran. telligence agents and disclose all de- accomplish it in a year, though less Production; Matthew Rose, Enterprise; Tracy Corrigan, Chief Strategy Officer; Little has changed. Last month Bel- tails of the foiled terror case to the ambitious agreements took nearly a Michael Siconolfi, Investigations; Frank Filippo, Print Products & Services; Nikki Waller, Live Journalism; Steve Grycuk, Customer Service; gian authorities arrested two Belgian public. Only by these means can the decade or failed completely. Stephen Wisnefski, Professional News; Kristin Heitmann, Chief Commercial Officer; nationals of Iranian descent on their world cripple the Iranian regime’s After all, raising U.S. tariffs is rela- Carla Zanoni, Audience & Analytics Nancy McNeill, Advertising & Corporate Sales; way to that Paris gathering, which was terror machine—which would be tively easy, as one needs only to con- Christina Van Tassell, Chief Financial Officer; Gerard Baker, Editor at Large Suzi Watford, Chief Marketing Officer; attended by tens of thousands of peo- good for the world, the region and vince Americans to pay more. Getting Paul A. Gigot, Editor of the Editorial Page; Jonathan Wright, International ple and hundreds of dignitaries from Iran itself. other countries to eliminate their tar- Daniel Henninger, Deputy Editor, Editorial Page DJ Media Group: Almar Latour, Publisher the U.S., Europe and the Middle East. iffs is much harder. But history has WALL STREET JOURNAL MANAGEMENT: Professional Information Business: Joseph B. Vincent, Operations; Christopher Lloyd, Head; The Iranian-Belgians had more than a Mr. Abedini is a member of Parlia- demonstrated it is possible. Larry L. Hoffman, Production Ingrid Verschuren, Deputy Head pound of the powerful explosive TATP ment in exile of the Iranian resistance

EDITORIAL AND CORPORATE HEADQUARTERS: and a detonator. As a result of close and belongs to the Foreign Affairs Mr. Lane was Caterpillar’s global 1211 Avenue of the Americas, New York, N.Y., 10036 cooperation of Belgian, French and Committee of the National Council of governmental affairs director and co- Telephone 1-800-DOWJONES German authorities, a major terror Resistance of Iran. chairman of the Zero Tariff Coalition. A16 | Tuesday, July 24, 2018 ** THE WALL STREET JOURNAL. WORLD NEWS Church Becomes a Target in Nicaragua Priests seek refuge as violence spreads to institution that sought to broker peace

BY JOSÉ DE CÓRDOBA

MONIMBÓ, Nicaragua—The Rev. César Augusto Gutiérrez delivered an impassioned plea to a Madrid radio station last week as hundreds of elite police and paramilitary forces stormed his parish in a hail of bullets. “They are defiling the churches,” Father Gutierrez said before breaking down in tears as he pleaded for international support. “The government is killing us.” He described how neighbor- hood youths in Monimbó, the heart of what has become a na- tional movement of resistance to President Daniel Ortega, con- fronted the onslaught with stones and homemade rockets from behind street barricades. “They can’t keep governing over a pile of the dead,” he said. For more than three months, Mr. Ortega has set loose his forces on Nicaraguans who have rebelled against his government, after what started as local pro- tests against a tax increase turned into a national move- ment. More than 300 people have been killed, most of them opponents of Mr. Ortega, hu- man-rights groups say. The Catholic Church, the old- est and most prestigious institu- tion in Nicaragua, has been on the front lines. Clergy have been assaulted and at least 10 churches have been attacked, shot at, looted or defiled during the past three months, mostly by government-allied paramili- tary groups, clerics said. After protests broke out in April, the church—at Mr. Or- tega’s request—agreed to medi- ate a national dialogue to try to resolve the crisis. On Thursday, the president shifted course, railing against the church before tens of thou- sands of supporters in a speech marking the 39th anniversary of

the triumph of his Sandinista JUAN CARLOS FOR THE WALL STREET JOURNAL (3) revolution over dictator Anasta- Azucena López, top, weeps for her son Erick Jiménez, killed when pro-Ortega groups attacked protesters in Monimbó. Bottom left, paramilitaries in Monimbó after sio Somoza. government forces moved on protesters last week. Bottom right, Father Raúl Enríquez celebrates Mass in Managua after police attacked his church. Jabbing his hands into the air, Mr. Ortega said the bishops church-brokered deal to help wagged his finger at a priest in killed in a response that un- Mercy in Managua. There were evangelical churches, it has re- were allied with opponents rescue some 200 youths who the Sandinista government at leashed a national backlash. For more than 100 protesters inside, mained a respected institution seeking a violent coup. had escaped Mr. Ortega’s police Managua airport in 1983. a time, protesters took over en- many of them university stu- in Nicaragua because it has been “Many churches were used as and paramilitary forces. The In 2014, the Nicaraguan tire cities and blocked the na- dents who had sought refuge. close to the country’s poor and, barracks to store ammunition students had fled into the coun- Bishop’s Conference called for tion’s main roads. Two people were killed and 10 under Mr. Ortega, outspoken in and bombs and to use as bases tryside after the government re- democratization as Mr. Ortega, In recent days, Mr. Ortega wounded in the 15-hour siege. the defense of justice. to attack and assassinate,” he took Monimbó. who has been president since has retaken much of the terri- “We were all on the floor, the On Friday, the Church of Di- said, as the crowd chanted sup- “He doesn’t like our position 2007 and previously held the of- tory he lost in the first weeks of lights were out, we were all ter- vine Mercy, which withstood at- port. “The opposition is in of defending victims and de- fice from 1985 to 1990, took protests. He has passed a law rified,” said the Rev. Erick Alva- tack by paramilitaries, was over- league with Satan, and the bish- nouncing violent acts and assas- control of congress, courts and allowing terrorism charges rado. Two days later, Bishop flowing with worshipers, most ops should exorcise them.” sinations,” said Bishop Carlos electoral authorities. The presi- against protesters and those Abelardo Mata of the diocese of middle-class Nicaraguans. A Clerics saw the speech as a Herrera of Jinotega, in northern dent has abolished term limits who financially support them. Estelí was attacked by a mob as priest read from the exorcism signal from Mr. Ortega that he Nicaragua. and used state institutions to The government violence has police looked on at a road prayer of St. Michael the Arch- was broadening his crackdown. Mr. Ortega and the Sandi- destroy any serious opposition. been widely condemned, and checkpoint. The mob shot explo- angel, who in Catholic teaching All of Nicaragua’s bishops have nista movement have been at The recent protests, which the U.S. has sanctioned officials sives at his car, breaking the led legions of angels to do battle been threatened since the odds with the Catholic Church took the nation by surprise, be- close to the president. But Mr. windshield and puncturing its against Lucifer and his hosts, speech, said Bishop Rolando Ál- for much of their long, inter- gan in April after Mr. Ortega Ortega has been defiant, assert- tires. Msgr. Mata managed to vanquishing them into the abyss. varez of Matagalpa, in the north twined history. Although a few raised taxes to rescue an insol- ing the government would take refuge in a house, and was In the overflow crowd out- of the country. priests influenced by leftist “lib- vent social security system. Col- strengthen its “self-defense later taken to safety after an in- side the church, Félix Benavides, “We have many priests who eration theology” played key lege students leading demon- mechanisms.” tervention by diplomats. a driver, said he was there to have taken refuge,” he said. “I roles in his first years in office, strations against the increase in Attacks on the Church in- “They were shooting to kill,” show his solidarity with the dare say that all priests, or prac- Mr. Ortega clashed with the Ni- the capital, Managua, were con- creased in ferocity this month. said a witness. church and the bishops. “We are tically all, fear for their lives.” caraguan hierarchy and with fronted by Mr. Ortega’s police On July 13, paramilitaries wear- Although the Catholic Church here to back the bishops,” he The day after the speech, the Pope John Paul II. The late forces and their allies. ing ski masks shot up the parish in Nicaragua, as in all Latin said. “We think worse days are government abandoned a pope, in a famous incident, Dozens of protesters were house and Church of Divine America, has lost faithful to coming to Nicaragua.” Philippine Region Nears Autonomy Gunmen in North Iraq

BY JAKE MAXWELL WATTS Attack Official Building

The Philippines moved BY ISABEL COLES consulate in Erbil with a car closer to passing a law meant AND ALI NABHAN bomb. That was also carried to end decades of conflict in out by local Kurds. the country’s south, though a BAGHDAD—One person was The U.S. launched its first bout of political infighting in- killed after three gunmen airstrikes against Islamic State terrupted the ratification pro- broke into a local government in the summer of 2014 to pre- cess. building in Iraq’s northern city vent the militants from over- The law establishing a self- of Erbil, in a rare attack inside running Erbil, where many governing region in a Muslim- the semiautonomous Kurdish foreign companies have a majority swath of the coun- region that officials blamed on presence. It then backed the try’s south would uphold the “terrorists.” Kurdish Peshmerga forces in government’s end of a peace No group claimed responsi- the war against Islamic State, agreement with one of Asia’s bility for the attack early Mon- helping them capture a swath most durable separatist move- day, which ended after Kurdish of territory in northern Iraq. ments and pave the way for security forces stormed the Some Kurds, however, thousands of fighters to put building, killing the lightly joined Islamic State, and other down their weapons. armed assailants after several Sunni militant groups have

But after winning approval CARLO GABUCO/BLOOMBERG NEWS hours of clashes. The militants previously found support in early Monday by the Senate, Canteen workers in Quezon City watch President Rodrigo Duterte deliver the State of the Nation address. took two hostages, one of the region. the bill hit a last-minute snag whom was rescued by Kurdish As the war against Islamic in the House of Representa- many Muslims had hoped, the be whether the region can this point in time, all indica- security forces. The other, a State came to a close last year, tives, which adjourned without proposed law would create an hold a free and fair election tions are pointing towards one person whose job it was to the Kurds made a bid for inde- a vote amid reports of a chal- elected parliament and admin- that puts in place a govern- thing, and that is probably ac- make tea for government pendence from Iraq by holding lenge to House leadership— istration in Muslim-majority ment capable of addressing ceptance of the deal.” workers there, was killed. a referendum, which the U.S. shortly before President Ro- areas of the southern island of deep divisions within the re- The group’s leaders have All three attackers were opposed. Iraqi forces re- drigo Duterte’s annual State of Mindanao and nearby islands, gion. repeatedly warned that delays from Erbil, a local official said, sponded by driving the Kurds the Nation Address. providing a region of about Although a peace agreement to the new law raised the risk highlighting the threat of out of nearly all the territory The House is still widely ex- four million people control with the largest group, the that younger, more-radical ele- homegrown militancy in a re- they had captured during the pected to pass the Bangsam- over many government func- Moro Islamic Liberation Front, ments could abandon the gion the U.S. counts among its war, including oil fields ac- oro Organic Law if and when it tions, including education, was signed in 2012, lingering peace process to join with vio- closest allies in Iraq and the counting for around half of the has an opportunity to vote. courts and taxes, although not frustrations have made the re- lent extremist groups that are Middle East. The Kurdish re- region’s revenue. Mr. Duterte said during his security. gion a hotbed for extremism still fighting government gion, which has its own secu- That has deepened eco- speech that “this administra- It will go to a vote in the and armed separatists. troops in the mountainous, rity forces, has largely insu- nomic hardship in the region tion will never deny our Mus- designated regions this year Mohagher Iqbal, a Front tropical jungles of the south. lated itself from the violent and increased anger against lim brothers and sisters the before elections are held and a leader and spokesman, said The new region would su- conflict that has plagued the the region’s secular ruling par- basic legal tools to chart their new government is formed. that while the group hasn’t persede an earlier autonomous rest of Iraq since 2003. ties, which have led the region own destiny.” He promised to Governance experts and made a formal decision on region, which provided a The latest major attack for decades and are accused sign the law within 48 hours. former advisers to the peace whether to accept the law and lesser degree of self-gover- there was in 2015, when Is- by many Kurds of corruption While less robust than process said the next test will join the political process, “at nance in a similar area. lamic State targeted the U.S. and nepotism. TECHNOLOGY: WEBMD GAINS A BILLION PATIENTS WITH TENCENT DEAL B4 BUSINESS&FINANCE

© 2018 Dow Jones & Company. All Rights Reserved. ***** THE WALL STREET JOURNAL. Tuesday, July 24, 2018 | B1

S&P 2806.98 À 0.18% S&P FIN À 1.32% S&P IT À 0.52% DJ TRANS À 0.67% WSJ $ IDX À 0.12% LIBOR 3M 2.335 NIKKEI (Midday) 22534.03 À 0.61% See more at WSJMarkets.com Fiat Loses Nike Rethinks Pay, Bonus Practices European About 10% of staff Monday in an internal memo, cording to the company. Nike also will change how it targets, such as 10% or 20% of are the latest example of ef- The company said the determines annual bonuses for their annual compensation, will get salary boost forts by Nike management to changes seek to ensure “more staff that are eligible, the but the level that gets paid Chief Amid in effort to address address concerns about pay competitive pay” and to “sup- memo stated. Instead of re- will be uniform. Going for- equity and reshape the com- port a culture in which em- ceiving a bonus based on a ward, the memo states, the pay-equity concerns pany’s culture, which was ployees feel included and em- mix of factors, including indi- bonus pool “will measure suc- Turmoil jolted this spring by com- powered.” vidual and team performance, cess based primarily on com- BY SARA GERMANO plaints of inappropriate work- Those expected to receive employees will be measured panywide performance.” BY CHESTER DAWSON place behavior and an execu- salary adjustments include against a companywide earn- Experts say a large-scale AND MAX BERNHARD Nike Inc. is raising salaries tive purge. both men and women and em- ings target starting this fiscal overhaul of a global company’s for more than 7,000 employees Nike counts more than ployees across “all levels, ge- year. compensation structure is un- DETROIT—Fiat Chrysler after an internal pay review 74,000 employees around the ographies, functions, and Bonuses awarded under the usual. Automobiles NV on Mon- and changing how it awards world. Of those, 10% will re- brands,” a Nike spokeswoman new bonus plan will be tied to “Typically rather than a day said its European opera- annual bonuses to its global ceive competitive-pay adjust- said. The adjustments will be- Nike’s budgeted earnings be- huge overhaul, [companies] do tions chief resigned, adding to staff, part of a broad overhaul ments in the coming weeks to gin in August and will be an- fore interest and taxes for the things little by little, make a the turmoil at the car maker of compensation at the sports- ensure equity of compensation nualized over the balance of year, the spokeswoman said. change here and see how it after the sudden departure of wear giant. between the same job func- the fiscal year, which began Eligible employees will con- goes,” said Lydia Frank, vice longtime Chief Executive Ser- The changes, announced tions around the world, ac- June 1. tinue to have individual bonus PleaseturntopageB2 gio Marchionne. The company said Alfredo Altavilla, who oversaw its oper- ations in Europe, Africa and the Highflying Small Caps Vulnerable to Tariffs Middle East, is leaving to pur- sue other professional inter- ests. His departure follows that BY DANIELLE CHEMTOB of Mr. Marchionne, who was re- Monthly fund flows, 2018 U.S. equity Small-cap 1.8 2.2 placed as CEO over the weekend Investors have pushed U.S. because of deteriorating health. January February March April May June small-cap stocks to record The moves come as top ex- highs while seeking a haven -1.1 -0.1 ecutives met Monday in Turin from tariff-related tensions, for a regularly scheduled but the popular trade is begin- -1.9 -2.1 meeting, according to people ning to appear vulnerable. -2.7 familiar with the matter. More than $4 billion poured -3.7 One issue immediately con- into mutual funds and ex- fronting the company is a change-traded funds that track trade rift between the U.S. and small caps in May and June its main trading partners, alone, while U.S. stock-focused While investors are pulling money out of which has led the Trump ad- funds as a whole have suffered ministration to impose tariffs billions of dollars of outflows U.S. stock funds overall, trade conflicts have -7.5 on aluminum and steel. The every month this year, accord- renewed enthusiasm for small-cap funds. White House also has threat- ing to data from Morningstar ened tariffs on imported vehi- LLC. The Russell 2000 has Companies in the Russell cles and parts, a proposal op- That influx of cash has outperformed the S&P 500 as 2000 are trading at a higher posed by most auto makers helped propel the Russell investors flock to small-caps forward price/earnings ratio and dealers, who say it would 2000, an index that tracks -11.2 amid increased trade tensions. than the S&P 500. threaten jobs and raise costs. shares of smaller companies, Fiat Chrysler has said little Index performance P/E ratio next 12 months up 11% this year, compared on the issue, and new CEO Mike with the S&P 500’s 5% gain. 10% Russell 2000 S&P 500 Manley’s grasp of supply-chain The index is still trading near management and public policy Russell 2000 record levels, but some ana- 20 is unknown. Mr. Marchionne, lysts warn that strong corpo- -$15.6 who met with President Donald rate earnings and economic billion 5 Trump at the White House as data are masking the tariffs’ 15 recently as May, will be missed potential negative impact on on this type of “diplomatic small businesses. 10 front” for his skills as a negoti- At least half a dozen small, 0 ator, Barclays said in a research domestically focused compa- note published Monday. nies, including motor-home S&P 500 5 Another major test for his manufacturer Winnebago In- successor will be retaining or dustries Inc., lighting firm –5 0 finding replacements for key Acuity Brands Inc. and agri- -21.0 executives on the company’s cultural machinery maker JFMAMJJ J FMAMJJ senior management team. Art’s Way Manufacturing Co., Sources: Morningstar (fund flows); WSJ Market Mr. Altavilla had been a can- have said the recent tariffs im- Data Group (index performance); FactSet (P/E ratio) Graphic by Kiersten Schmidt/THE WALL STREET JOURNAL. didate to succeed Mr. Marchio- posed on steel and aluminum nne, according to industry ana- and a host of other Chinese ternational Economics. “Lon- when investors pile into as- Small-cap stocks have be- company that’s considered lysts and company insiders. goods threaten to disrupt their ger out, this is going to affect sets—like small caps and tech- come relatively expensive as a safe,” said Jeff Holzmann, Instead, the top job went to Mr. businesses. consumer spending and more nology stocks—that already result of the rally. The Russell managing director at Iintoo, an Manley. He was one of Mr. Mar- “Right now, all this is muted importantly it’s going to affect have made big gains. That type 2000 was trading at a forward international real-estate in- chionne’s top lieutenants since because the U.S. economy hap- investment in the U.S.” of investor demand can quickly price/earnings ratio of 22.4 as PleaseturntopageB11 2009 and most recently ran the pens to be growing very Much of the stock market’s evaporate, leaving the market of Friday, compared with the auto maker’s Jeep SUV and Ram strongly,” said Mary Lovely of recent rally has been driven by vulnerable to a selloff, analysts S&P 500’s 16.6. Government bond yields truck brands—two of the com- the Peterson Institute for In- momentum-based trading say. “You’re overpaying for a surge world-wide...... B11 PleaseturntopageB2 HEARD ON THE STREET | By Spencer Jakab Private Pension Wipes Out Investors

Boom Times Coming BY JEAN EAGLESHAM Scott Kohn, a 64-year-old For Oil-Field Services felon, ran a company from a Nevada strip-mall mailbox that You can trough, the sector should be investors claim took them for never be too thriving. Yet while there was more than $100 million in rich or too impressive sales growth and losses. thin, but is it plenty of upbeat commentary Mr. Kohn’s company, Future possible for from executives, investors in Income Payments, appears business to be Halliburton, Schlumberger shut, according to court fil- too good? and Baker Hughes, a GE ings. His investors are likely to That appears to be the Company still await the pay- be wiped out, according to case, at least temporarily, for off. lawyers representing them, the world’s three leading oil- Since the beginning of who plan to sue scores of field-services firms. Halli- 2017, the world’s leading oil firms that sold Future Income burton rounded out the exporters have succeeded in products as soon as this week. trio’s reports on second- slashing inventories and At least 25 states have taken quarter results Monday boosting oil prices while pro- enforcement actions or are in- morning, and its stock duction forecasts for the vestigating the company, it promptly sold off by 8% in booming U.S. shale patch said in April. early trading. have repeatedly been revised The blow-up shines a light About 2½ years after oil higher. The global natural- on the boom in opaque private prices hit their cyclical PleaseturntopageB2 markets, to which investors have flocked in the hope of doing better than they can in

traditional stock and bond JENNIFER WHITNEY FOR THE WALL STREET JOURNAL INSIDE markets. Private-market prod- Mary and JC Barb of Hemet, Calif., say $78,000 they invested for retirement last year is gone. ucts, including the ones of- fered by Future Income, are But Future Income’s appar- year-old retired postal worker. vised to cash in their pensions frequently sold by financial ent collapse has left investors Her husband, a 63-year-old re- and refinance their homes to advisers. Sales targets are of- stranded. The company is no tired teacher, said the money buy these things.” ten retirees looking to beat longer collecting the pension “was to be a big help to us in In a letter sent to investors the anemic returns on bonds money that funds its own pay- our retirement and now it’s in April, Mr. Kohn said his and other savings products. ments to investors, according not there, it’s gone.” Mr. Krae- company was suffering from Future Income essentially to court documents. Mr. Kohn mer declined to comment. “intense regulatory pressure sold investors other people’s couldn’t be reached for com- Unlike publicly traded in- and legal expense,” and inves- pensions. Mr. Kohn’s firm ment. It isn’t clear if he has a vestments, there are few rules tors had been told there were would find workers entitled to lawyer. on how pension advances can “no guarantees [they] would pension payments and tempo- JC and Mary Barb of be sold or by whom. “They il- receive all payments.” Future rarily buy the rights to those Hemet, Calif., say their finan- lustrate the problems with the Income didn’t respond to HASBRO THE THRILL payments—effectively lending cial adviser Kevin Kraemer financial services industry emails, and its phones appear the beneficiaries money persuaded them to invest selling opaque, high-commis- to be down. Christopher IS PROFITABLE IS GONE against their future pension some $78,000 with Future In- sion private investments,” Jones, a lawyer representing PLAY AT GIBSON income in what is called a come last year. “He came to us says Joe Peiffer, a New Or- the company over a civil in- “pension advance.” Then, Fu- and said, ‘Hey we can make leans-based plaintiffs’ lawyer vestigation by the Consumer ture Income would sell the some more money on your representing some purchasers Financial Protection Bureau, TOYS, B3 FINANCE, B10 rights to investors for a lump money,’ [and] sold us this new of Future Income’s products. didn’t respond to requests for sum. deal,” said Mrs. Barb, a 66- “We have clients who were ad- PleaseturntopageB2 B2 | Tuesday, July 24, 2018 **** THE WALL STREET JOURNAL. INDEX TO BUSINESSES BUSINESS & FINANCE

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

A G N Acuity Brands...... B1 General Motors...... B2 Nike...... B1 Alphabet...... A1,B12 Georgia Tech...... A8 Nordam Group...... B6 Ferrari Is Without Its Driving Force Amazon.com...... B12 Gibson Brands...... B10 Northern Trust...... B11 AngloGold Ashanti.....B4 Goldman Sachs Group NXP Semiconductors..B3 BY ERIC SYLVERS Apple...... A6 ...... B10 O Art's Way GraniteShares Gold Omega Advisors...... B10 MILAN—Sergio Marchio- Trust...... B12 Manufacturing...... B1 Omega Overseas nne’s exit as the leader of Fer- H B Partners...... B10 rari NV is likely to upend an Halliburton...... B1 Baker Hughes...... B1 P Italian sports-car legend Bank of America...... B11 Hasbro...... B3 PAG Asia Capital...... B10 Barnes & Noble...... B4 Helen of Troy...... B11 Posco...... A6 whose strategy he revolution- Barrick Gold...... B4 Herman Miller...... B11 Pratt & Whitney Canada ized in recent years. Blackstone Group.....B10 Hewlett Packard ...... B6 Mr. Marchionne was sud- Enterprise...... B3 Boeing...... B11 Q denly replaced at the helm of Broadcom...... B3 Hyundai Merchant Qualcomm...... B3 both Fiat Chrysler Automo- C Marine...... A6 I-J S biles NV and Ferrari over the Caterpillar...... B11 Saban Properties...... B3 CBRE Group...... B10 Ikea...... B5 weekend due to health issues. Samsung C&T...... A6 Changsheng JPMorgan Chase He had been slated to exit FCA ...... B6,B10,B11 Schlumberger...... B1 Biotechnology...... B4 Shenzhen Kangtai next year and had put in place China Tower...... B10 K-L Biological Products...B4 a succession plan for the Ital- Chongqing Zhifei KKR...... B4,B10 Sonos...... B4 ian-American car maker. Biological Products...B4 Koninklijke Philips....B10 T-U Cushman & Wakefield Live Abundant...... B2 “There is a list [of possible Tencent Holdings...... B4 ...... B10 M successors] in an envelope E-F Tesla...... B12 with the board and they know Mattel...... B3 UBS Group...... B10 eBay...... B3 Merck...... B4 W who my preference is,” Mr. Facebook...... A6,B12 MGM Resorts Marchionne said last year. WebMD...... B4 Fannie Mae...... A2 International...... A3 But he had planned to re- FedEx...... A8 Microsoft...... B12 Wells Fargo...... B11 Whirlpool...... B3 Ferrari...... B2 MiMedx Group...... A1 main at Ferrari, where he was Winnebago Industries B1 Fiat Chrysler Morgan Stanley...... B10 also chairman, until at least Z Automobiles...... B1,B2 MSC Industrial Direct 2021. Mr. Marchionne, who MIGUEL MEDINA/AGENCE FRANCE-PRESSE/GETTY IMAGES Ford Motor...... B2 ...... B11 ZTE...... B3 personally owns several Fer- Sergio Marchionne, who resigned as Ferrari CEO, set ambitious targets for the sports-car maker. raris, never commented on succession. tention to detail that allows it and Mr. Marchionne for many INDEX TO PEOPLE Ferrari’s shares fell 2.5% in to command about $250,000 Off to the Races years. New York on Monday. on base models and well over After prior management had Philip Morris has most Louis Camilleri, a Ferrari a $1 million for special-edition years been the car company’s A-B H-J P capped Ferrari’s annual output at board member and chairman cars. 7,000, it rose in the past three largest Formula One sponsor. Altavilla, Alfredo...... B1 Haberkorn, Bob...... B12 Parneros, Demos...... B4 of the company’s racing spon- Mr. Marchionne, who saw years under Sergio Marchionne. Mr. Marchionne occasionally Barb, Mary...... B1 Happe, Michael...... B11 Peiffer, Joe...... B1 sor Philip Morris International higher production and a stock has shown Mr. Camilleri new Benson, David...... A2 Holzmann, Jeff...... B1 Petit, Parker “Pete”...A1 8,000 vehicles Jones, Christopher...... B1 Inc., has assumed the CEO role listing as ways for FCA to raise Ferraris before they had been Berryman, David...... B10 Pichai, Sundar...... A6 until shareholders can confirm money to fund its ambitious unveiled to the public or to Brennock, Stephen...B11 Juszkiewicz, Henry...B10 Porat, Ruth...... A6,B12 him permanently. investments, ousted Mr. Mon- 6,000 other board members. Briggs, John...... B11 K R-S Ferrari is in the midst of a tezemolo. Mr. Marchionne also A Ferrari executive said the C Kibsgaard, Paal...... B2 Rhind, Will...... B12 4,000 Kohn, Scott...... B1 sharp change in strategy led became CEO of Ferrari in May appointment of Mr. Camilleri, Camilleri, Louis...... B2 Ristuben, Erik...... B11 Kraemer, Kevin...... B1 by Mr. Marchionne, which in- 2016. who he has no experience Cooperman, Leon...... B10 Schneider, Eric...... B10 2,000 L cluded a ramp-up in produc- “We had in the recent past heading a car company, is D Schottenfeld, Richard.B4 tion, a 2015 stock-market list- some recent serious disagree- meant to show that Mr. Mar- Leung, Steven...... B10 Stevens, David...... A2 0 Dervin, Jenny...... B6 Lovely, Mary...... B1 ing and the planned launch of ments, but I never called into chionne’s vision for the storied DeShong, Debra...... A3 T ’142013’15 ’16 ’17 M a sport-utility vehicle. question Sergio’s courage, abil- car maker will carry on. DiDonato, John C...... B6 Thornton, John...... B4 Mr. Marchionne became ity and vision that made the Source: the company But that may prove difficult. Madigan, Lisa...... B2 Dushnisky, Kelvin...... B4 W THE WALL STREET JOURNAL. Maeztu, Juvencio...... B5 chairman of Ferrari in late saving and re-launch [of Fiat] “Camilleri…has an easy job op- E-G Manley, Mike...... B1 Washburn, Loren...... B2 2014 after a public spat with possible,” Mr. Montezemolo erationally. But he inherits an Einhorn, Steve...... B10 Marchionne, Sergio Whinston, Noah...... B3 Luca Cordero di Montezemolo, said in a statement Monday. platform which it hasn’t won absurd valuation, a product Goepfert, Jason...... B12 ...... B1,B2 Whitman, Meg...... B3 the car maker’s longtime In the wake of the initial in a decade. plan that’s far from settled in- Goldner, Brian...... B3 Martini, Sam...... B10 Wissink, Stephanie....B3 chairman. At the time, Fiat public offering, Mr. Marchio- Ferrari’s stock price has ternally and 2021 financial tar- Chrysler owned 90% of Ferrari, nne decided to expand produc- more than doubled since the gets that Sergio scribbled on a and the two men were at log- tion of Ferraris, pushing it IPO. The company is now napkin and that may be diffi- Such market tightness is gerheads. above the longtime annual worth almost as much as FCA, cult to deliver,” wrote Sanford Oil-Field normally wonderful for oil- Mr. Montezemolo feared ceiling of 7,000 cars. The com- which sells almost 5 million C. Bernstein analyst Max War- field services companies, but that the production increase pany sold 8,400 cars last year. vehicles a year. burton. a lot of the rewards are flow- envisioned by Mr. Marchionne Ferrari is also set to intro- Mr. Camilleri, a U.K. na- The financial targets in- Services ing to others such as truck would threaten the company’s duce its first SUV—although tional who has been on Fer- clude ambitious increases in drivers scoring raises and luxury premium while the tra- no launch date has been set— rari’s board since the com- Ferrari’s hefty profit margin of big signing bonuses. Mean- vails of a stock-market listing and is also trying to fight its pany’s public offering, has had 25%, which already far out- Look Solid while, the big, sophisticated, would eventually chip away at way back into contention in a close personal and profes- strips other listed auto mak- largely international projects Ferrari’s uncompromising at- Formula One, a key marketing sional relationship with Ferrari ers’ single-digits margins. ContinuedfrompageB1 in which all three companies gas market has stabilized, specialize suffered sharp cut- too, after being hit by wor- backs after the oil bust. about management stabil- public statements since being emissions standards. “That ries about oversupply. Now that is finally chang- Fiat Loses ity, brokerage Jefferies said in a named CEO but is slated to host kind of wavering with the The three companies have ing, making all three compa- research note published Sun- an earnings call Wednesday for White House is not helpful,” he put in a total performance nies more interesting. day ahead of Mr. Altavilla’s deci- financial analysts. His public ap- told reporters at an event out- since the beginning of 2017 Schlumberger chief Paal Kib- Executive sion. “We remain concerned that pearances in recent months have side Milan to unveil a new five- of negative 22%, or some 50 sgaard, for example, said it disappointed contenders for the for the most part been limited to year strategic plan. percentage points below the has “been quite a while since Group CEO position could seek investor and auto-show events. The industry is awaiting S&P 500. By contrast, during we were able to kind of talk In Europe opportunities outside,” it said. The new CEO’s positions on word of a dispute between the the year and a half leading as optimistically about the Fiat said Monday that Mr. key issues like trade policy and Trump administration and the up to July 2014, the end of international market as we ContinuedfrompageB1 Manley would take on the role fuel-economy standards aren’t state of California over these the most recent oil boom, can now.” pany’s most profitable units. of interim chief operating offi- well known, as Mr. Marchionne fuel-economy regulations. The they rallied 89% on average. Meanwhile, hot North Mr. Marchionne had planned cer for Europe, Africa and the did most of the speaking for industry has been a critic of Expectations were too high American areas like the to step down early next year, Middle East alongside his role the company on broader topics. tough standards sought by the at the start of the current Permian Basin, while they and company officials have said as CEO, and that Mr. Altavilla The former CEO was outspoken Obama administration, which upturn. Analysts’ consensus will keep growing, are enter- privately they expected one or would work with him until the compared with his peers. California plans to keep. But forecast for combined 2018 ing a period of slower more rivals who were passed end of August during a transi- Mr. Trump called Mr. Mar- auto makers also are concerned earnings per share for the growth as pipeline capacity over for the top job to leave the tion period. chionne “my favorite person in a split at the federal and state group has dropped 39% since rushes to catch up with the company. The current transi- The company also said re- the room” in a White House levels would raise costs by forc- February 2017, according to increase in output. tion has been less disruptive so sponsibility for global business meeting in May on fuel-econ- ing them to comply with two FactSet. The sweet spot for the in- far than several major shake- development would shift to omy standards with the heads separate standards in the U.S. Part of the problem is that dustry was delayed, but it is ups amid ownership changes at Chief Financial Officer Richard of General Motors Co., Ford market. The company’s shares the world’s hottest oil patch, nearly here. Investors should the company a decade ago, ac- Palmer. Mr. Palmer also had Motor Co. and Fiat Chrysler. were off 1.8% at $18.98 Monday U.S. shale, faces shortages of take advantage of the sec- cording to other employees. been considered a possible Mr. Marchionne expressed irri- in New York. truck drivers, railcars and tor’s temporary weakness be- Senior-level departures could successor to Mr. Marchionne. tation last month with his De- —Adrienne Roberts fracking materials. fore it gets priced in. raise concern among investors Mr. Manley hasn’t made any troit rivals’ nuanced stance on contributed to this article.

of internal complaints about NikeTweaks perceived disparities. Last year, a group of women em- ployees at Nike circulated an Pay,Bonus informal survey to take stock of what they considered to be inappropriate workplace be- Practices havior, pay inequity, and gen- MASSAGE. der imbalance at the highest ContinuedfrompageB1 ranks, The Wall Street Journal president of content strategy has reported. [ [ at PayScale, a compensation- After the survey reached REDEFINED. software company. the attention of Chief Execu- A survey by PayScale of tive Mark Parker this spring, several thousand HR and busi- the company began a formal Unparalleled Japanese craftsmanship, ness leaders that awarded NATALIE BEHRING/GETTYinternal IMAGES review. At least 11 ex- variable pay last year found Nike counts more than 74,000 employees around the world. ecutives departed, including personalized choreography, and an unmatched one-third didn’t include indi- the CEO heir apparent Trevor commitment to quality. Let DreamWave melt vidual incentive bonuses. tor of research for Worldat- sight at employee level doesn’t Edwards. away stress and transport you to a place of The most important compo- Work, a nonprofit human-re- exist, you’re not going to get Nike said at the time it profound relaxation and rejuvenation. nent in any bonus program is sources association. the result you’re after,” she said. didn’t receive any complaints making sure that staff mem- “No matter what you’re try- Nike has been reviewing its of inappropriate behavior on bers have a clear vision of how ing to achieve, whether it’s or- human-resources department the part of Mr. Edwards. Mr. their work contributes to the ganization-wide or something and pay practices in recent Edwards hasn’t responded to dreamwave.com/redefined goal, said Alison Avalos, direc- more team-specific, if the line of months, following the receipt requests for comment. 888-727-2150

come in 2011, company records the process of agreeing to, or LLC, another private-market Private show. In 2016, he set up a sepa- had agreed to, settlements investment that collapsed, ac- rate company, FIP LLC, con- with the states that limited cording to lawyers represent- trolled via a Philippines-based the amounts it could collect. ing investors who said they in- Made in Markets corporation of which he is the “Future Income Payments’ tend to sue Live Abundant. Japan sole owner, according to a com- illegal loans were outrageously Loren Washburn, an attor- plaint filed last year by Minne- expensive,” said Lisa Madigan, ney for Live Abundant, said Prove Risky sota regulators. He pleaded the Illinois attorney general, the firm plans to review what guilty to trafficking in counter- who filed a suit against the it “could have done better” in ContinuedfrompageB1 feit goods in 2006 and served firm on the same grounds this vetting the deals. “This out- comment. The CFPB declined 15 months in federal prison. year. come where we’re having to to comment. State regulators took action The string of regulatory ac- explore options to collect [the Future Income’s mailing ad- against Future Income as early tions didn’t stop advisory money due to investors] is ob- dress is a mailbox at a United as 2014 over the terms on firms and others selling the viously not optimal.” Parcel Service Inc. store in a which it was buying pension commission-rich products, Investors are scrambling to strip mall outside Las Vegas. benefits, saying the firm was many as part of a retirement- try to recover money. Mr. The same address has been lending illegally. Some states savings strategy. The sellers Peiffer said he is “highly confi- used by Mr. Kohn for dozens said the company was breach- included Live Abundant,a dent that the losses suffered of other companies, most of ing state laws limiting the in- firm based in Salt Lake City. It by investors are well over them now defunct, state re- terest that can be charged on has sold products from both $100 million.” cords show. loans. Mr. Kohn in his April Future Income Payments and —Lisa Schwarz 0% financing options available to qualified buyers. Mr. Kohn formed Future In- letter said the company was in Woodbridge Group of Cos. contributed to this article. THE WALL STREET JOURNAL. ** Tuesday, July 24, 2018 | B3 BUSINESS NEWS Whirlpool Hasbro Investors Breathe Easier Cuts Its Share price jumps 13% as toy maker’s results Earnings help ease fears over Outlook closure of Toys ‘R’ Us BY AUSTEN HUFFORD BY KIMBERLY CHIN

Whirlpool Corp. on Monday Hasbro Inc. shares rose trimmed its full-year profit 13% Monday after the toy outlook as it booked a large maker reported better-than- charge on its European opera- expected quarterly results, tions and said it wouldn’t be easing concerns about any able to offset the effect of steel impact from the recent clo- tariffs with higher prices for sure of retailer Toys “R” Us. consumers. While the company’s sales The Benton Harbor, Mich., and earnings fell year-over- appliance maker swung to a year, strong performances by second-quarter loss after fantasy games Dungeons and booking $747 million in Dragons and Magic: The charges on its European busi- Gathering helped to ease the ness and paying $114 million lost business from the Toys for an antitrust settlement in “R” Us liquidation. France, wiping out the benefits “Dungeons and Dragons of higher prices pushed continues to deliver revenue through to counter the effect growth as fans re-engage of tariffs on imports of steel, with this brand, and it at-

one of its largest costs. tracts new players,” Chief Ex- CHRISTY RADECIC/INVISION/ASSOCIATED PRESS Whirlpool said it has strug- ecutive Brian Goldner said on The company’s array of brands may have helped mitigate some of the expected revenue declines from the Toys ‘R’ Us liquidation. gled to integrate its 2014 pur- the company’s earnings con- chase of Italy’s Indesit Co. and ference call. 700 U.S. stores were officially of surging in a movie year on Thomson Reuters. faced economic and opera- Hasbro, based in Paw- closed in late June. and shrinking in a nonmovie Revenue fell 7% from a Toy Story tional issues, as the company tucket, R.I., is betting that Shares of Hasbro closed year are probably behind us. year earlier to $904.5 million Hasbro reported its first worked to gain more exposure retailers will seize on the ap- Monday at $106.04 and now Instead, it just becomes a re- but came in above the $838.1 profitable quarter since the to Europe’s appliance market. parent hole left behind by the have risen 17% this year. ally strong contributor.” million expected, on average, period ended in September. The total consideration paid toy-store chain. Mr. Goldner told analysts In June, Hasbro added to by analysts. was $1.4 billion in aggregate, The company plans to that several games made its portfolio by acquiring the Jefferies analyst Stephanie Net earnings/loss net of cash. The asset impair- launch new online exclusive their debuts this year, includ- Power Rangers, My Pet Mon- Wissink said that following $300 ment represents about half of products with retailers such ing those where the company ster and other entertainment the results, there are fewer 200 the original purchase price. as Walmart Inc., Target took a “fast-to-market” ap- brands from Saban Proper- reasons for investors to be The surprise charge follows Corp., Alibaba Group Holding proach in development. ties LLC in a cash-and-stock cautious. 100 a series of upbeat earnings re- Ltd., JD.com Inc. and Ama- The company also plans deal valued at roughly $500 In particular, she men- 0 ports by other U.S. manufac- zon.com Inc., Mr. Goldner several products tied to million. tioned the company’s digital turing companies. Whirlpool said. movie franchises such as For the second quarter, games business, which could –100 shares fell more than 8% in af- “We don’t expect to recap- “Transformers,” Marvel’s Hasbro’s earnings fell to account for more than 10% of –200 ter-hours trade. ture all of the lost revenue in “Avengers” universe and $60.3 million from $67.7 mil- sales in the next two to three Total sales fell 3.9% to $5.14 2018, but by 2019, we should “Star Wars.” lion. On a per-share basis, the years. 1Q 2Q 3Q 4Q 1Q 2Q 2017 ’18 billion. They were down 4.5% have moved beyond Toys “R” “ ‘Star Wars’ will probably company’s profit of 48 cents Rival Mattel Inc. will re- from a year earlier after ex- Us,” Mr. Goldner said. look similar to a year ago,” easily surpassed the average port second-quarter earnings Source: the company cluding currency changes. The retailer’s more than Mr. Goldner said. “The days analyst estimate of 29 cents on Wednesday. THE WALL STREET JOURNAL. Qualcomm Awaits Beijing’s Verdict Meg Whitman Invests BY TRIPP MICKLE In Esports Startup Qualcomm Inc. is set to find BY MAUREEN FARRELL Technology and entertain- out this week if its $44 billion ment companies have been deal to buy chip maker NXP Meg Whitman, the former paying close attention. Semiconductors NV will be- chief executive of eBay Inc. Activision built its own es- come one of the biggest casu- and Hewlett Packard Enter- ports league based on its pop- alties in the escalating U.S.- prise Co., is jumping into es- ular “Overwatch” game. Ana- China trade battle. ports, the burgeoning business lysts and investors pointed to Wednesday is the expiration of professional videogame its investment in esports to date for its merger agreement playing. help explain the run-up in its with NXP, a deal struck in Oc- Ms. Whitman has invested stock ahead of the January tober 2016 that Qualcomm in Los Angeles-based Immor- launch of the league. touted as transformational, tals LLC, a global esports com- In 2014, Amazon.com Inc. saying it would diversify a pany founded in 2015, and will spent nearly $1 billion to buy largely smartphone-driven join its board, she said in an Twitch Interactive Inc., a pop- business into the fast-growing interview Monday. Immortals ular internet channel for automotive chip market. owns and operates an esports watching people play video- China is the last of nine franchise, the Los Angeles Val- games. markets where Qualcomm and iant, in a league run by video- Ahead of Ms. Whitman’s in- NXP need approval from com- game publisher Activision Bliz- vestment, Immortals had al- petition authorities, but that zard Inc. that was launched in ready landed backing from decision has been snarled in January. high-profile investors includ- the wider trade feud for It isn’t clear how much she ing Michael Milken’s family of- months. put in but Ms. Whitman’s in- fice, Lions Gate Entertainment Beijing’s State Administra- vestment values the company Corp. and AEG, the sports and tion for Market Regulation at more than $100 million, a live-entertainment company could still sign off on the deal, person familiar with the mat- founded by billionaire Philip but trade specialists said Presi- ter said. Anschutz. dent Donald Trump’s threat The global audience for es- Immortals’ 23-year-old CEO Friday to put tariffs on $500 ports has ballooned to 400 and founder, Noah Whinston,

billion in Chinese imports QILAI SHEN/BLOOMBERG NEWS million viewers, according to said that the investment from makes that highly unlikely by The chip maker’s NXP deal is lacking only China’s regulatory approval. A Qualcomm display in Shanghai. Ms. Whitman. The industry’s Ms. Whitman didn’t come as Wednesday. And Qualcomm, annual revenue—from corpo- part of a larger round but was which extended its deadline in over by rival Broadcom Ltd., nese maker of smartphones which counts Qualcomm rate sponsorships, media completed outside of the com- April, has said it doesn’t plan blocking the deal in the inter- and telecom equipment over among its largest holdings. rights, ticket sales and other pany’s fundraising timetable to to do so again. est of national-security con- sanctions violations—only to “Any one of the many events in sources—has more than dou- add someone with her exper- Qualcomm’s fortunes al- cerns focused on China. have Mr. Trump later make a the past year would drive a bled since 2014 to over $800 tise to the board. “I’ve always ready have been whipsawed by Then, Qualcomm nearly lost deal with Beijing to save ZTE. CEO crazy.” million and is expected to con- been very interested in what White House priorities and a significant customer, ZTE “It’s been wild,” said Jeffrey Qualcomm and NXP de- tinue at a fast clip, she said. she did at eBay, which was to U.S.-China jousting. In March, Corp., when Washington Helfrich, portfolio manager at clined to comment. Chinese “I’ve seen very few things cap- take a much more niche com- Mr. Trump saved the San Diego banned U.S. companies from Dallas-based investment ad- regulators didn’t respond to a ture people’s imagination like munity-oriented site and turn company from a hostile take- selling components to the Chi- viser Penn Davis McFarland, request for comment. this,” she said. it into something mainstream.” INVEST IN KNIGHTSCOPE

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Knightscope and www.knightscope.com are operated by Knightscope, Inc. Investment opportunities are “private placements”, are subject to long hold periods, are illiquid investments and investors must be able to afford the loss of their entire principal. Offers to buy or sell any security can only be made through official offering and subscription documents that contain important information about risks, fees and expenses. You should conduct your own due diligence including consultation with a financial advisor, attorney, accountant, or other professional that can help you to understand the risks associated with the investment opportunity. Security transactions are administered by WealthForge Securities, LLC, a registered broker/dealer and member FINRA/SIPC. Knightscope and WealthForge Securities, LLC are not affiliated. B4 | Tuesday, July 24, 2018 THE WALL STREET JOURNAL. BUSINESS & TECHNOLOGY WebMD Reaches Into Asia Health-care content of health-care information portant that we take into ac- director of research firm Mar- available to Chinese consum- count these differences during bridge Consulting. will be provided to ers. The content, slated to be the localization process.” In recent years, China has Chinese consumers rolled out by year’s end, will Health care is a big—and expanded insurance coverage, also be available on Tencent’s growing—business in China, encouraged the growth of pri- via Tencent’s WeChat QQ messaging app. which is forecast to spend $1 vate hospitals and pushed for “There are tens of millions trillion on health care by digitizing medical records. To BY SHAN LI of people on WeChat today 2020, according to a report further improve care, China that are forming groups for from McKinsey & Co. Its aging last year tapped Tencent to be HONG KONG—Tencent specific disease information, population is increasingly a “national champion” to de- Holdings Ltd. of China has whether it’s cancer or diabe- dealing with chronic condi- velop uses of artificial intelli- struck a deal to provide tes,” said Jeremy Schneider, tions such as diabetes, but the gence technology in medicine.

GUILLERMO GUTIERREZ/BLOOMBERG NEWS WebMD’s health-care content senior vice president of corpo- health-care system doesn’t Tencent has backed dozens Kelvin Dushnisky has been with Barrick since 2002. to the more than one billion rate development and global have enough general family of health-care companies, both users on its WeChat social strategy for WebMD. “There is doctors who can direct pa- in China and around the network, according to the a lot of talking amongst them- tients to the right treatments world. Mr. Natkin said his firm AngloGold Poaches companies. selves, but there is not a lot of and specialists, said Philip Le- has tracked at least 30 health- The content-licensing deal credible information.” ung, head of the Greater China care-related investments since includes WebMD articles, vid- Tencent will translate and Healthcare practice for con- April 2012. Tencent declined Barrick’s President eos and slide shows covering adapt the content for Chinese sulting firm Bain & Co. to comment. medical and health topics, audiences, Meng Zhang, gen- That leaves many people The new WebMD services BY JACQUIE MCNISH The company has no chief such as the side effects of che- eral manager of Tencent turning up at the hospital for will compete against a grow- executive officer. Barrick’s ex- motherapy or the symptoms of Healthcare Information Center, care. Wait times can be so ex- ing number of companies pro- TORONTO—Barrick Gold ecutive chairman, John Thorn- appendicitis. Financial terms wrote in an email. treme that ticket scalpers viding not only medical infor- Corp. said its president, Kelvin ton, has led the company since weren’t disclosed. “There are quite some dif- book hospital appointments mation, but also online tools Dushnisky, is leaving the com- 2014, when he was appointed WebMD, which is owned by ferences between Chinese and and then try to sell them for a that help Chinese consumers pany to join AngloGold to oversee a turnaround of the private-equity firm KKR &Co. Western demographics, medi- big markup, a practice Beijing navigate the system. Ashanti Ltd. as its chief execu- company as it struggled with and based in New York, said cal practices and cultures,” Mr. has started cracking down on, —Fanfan Wang in Beijing tive officer. heavy acquisition debts. the deal will raise the quality Zhang wrote. “It is very im- said Mark Natkin, managing contributed to this article. Barrick hasn’t named a new Mr. Thornton is credited president. Mr. Dushnisky with nearly halving the com- wasn’t available for comment. pany’s debts to $6.4 billion at Mr. Dushnisky joined the the end of last year by selling Toronto-based gold-mining assets, rapidly shrinking costs company in 2002 and has been and head count and attracting president since 2015. Barrick is new investors. The moves have the world’s largest gold pro- reduced Barrick’s mining foot- ducer, and Mr. Dushnisky’s de- print, and analysts have raised parture comes as the company concerns about falling ore re- is under pressure to reverse serves and rising costs at its falling gold production and re- mines. Barrick’s annual gold serves. The company said it production has fallen more will replace Mr. Dushnisky “in than 30% since 2013 to 5.32 due course.” million ounces last year. Fund Reveals It Owns 5.7% of Barnes & Noble BY JEFFREY A. TRACHTENBERG A spokeswoman for Barnes & Noble declined to comment. An investment fund led by Barnes & Noble shares rose Richard Schottenfeld has ac- 2.7% Monday. quired 5.7% of bookseller Mr. Schottenfeld invested in Barnes & Noble Inc. and has Barnes & Noble in 2013, when met with the bookseller’s se- he agitated against the re- nior management to discuss tailer’s investment in its strug- how to improve the company’s gling Nook digital business. He performance, according to a also was in favor of separating securities filing. the retailer’s college unit. Af- In an interview, Mr. Schot- ter that business was spun off

tenfeld said he began purchas- as Barnes & Noble Education AGENCE FRANCE-PRESSE/GETTY IMAGES ing his stake in May. He be- Inc. in August 2015, Mr. Schot- A series of scandals involving drug ingredients, milk and infant formula have angered the public. An official checks vaccines at a hospital. lieves Barnes & Noble can tenfeld sold his Barnes & No- better manage its expenses ble shares. while improving its in-store Earlier this month, Barnes shopping experience. He also & Noble fired Chief Executive China Probes Vaccine Production said consumers are frustrated Demos Parneros, citing com- by the retailer’s online-shop- pany-policy violations. The re- BY PREETIKA RANA pending the results of an in- Ltd.’s WeChat and Twitter-like Mr. Li sought to soothe ping efforts. tailer said the dismissal wasn’t vestigation. It said none of the microblogging site Weibo worries about safety as anger “It’s our preference to work related to improper financial HONG KONG—Chinese Pre- batches in question were Corp. was largely directed at intensified over the weekend. with the companies in which reporting or potential fraud, mier Li Keqiang called for a shipped. Beijing’s inability to restore “We will resolutely crack down we invest,” said Mr. Schotten- but didn’t provide more infor- government investigation into Then a week ago, Changsh- public faith in domestic goods. on all illegal and criminal acts feld. “A fresh investor can mation. The bookseller is be- “the entire process chain of all eng said a separate investiga- That deals a blow to President that endanger the safety of bring new ideas.” Mr. Schot- ing overseen by a management vaccine production and sales,” tion conducted by Jilin’s food Xi Jinping’s government, people’s lives, and resolutely tenfeld’s holdings put him group that includes Leonard after a drug company allegedly and drug authority showed which is seeking to transform punish those who violate the among the book retailer’s larg- Riggio, its executive chairman sold more than 250,000 doses that 253,338 doses of another the drug industry into a pro- law,” his office said Sunday. It est shareholders. and largest shareholder. that failed to meet safety stan- vaccine—administered to pro- ducer of complex products. added that Beijing was com- dards. tect against diphtheria, per- mitted to ensuring “a safe, se- Shares of major local vac- tussis and tetanus—failed to cure and trustworthy living ADVERTISEMENT cine makers, including a meet safety standards. Most of A company allegedly environment” for its citizens. Merck & Co. partner, tumbled the doses, the company said, Trading in Chongqing Monday after Mr. Li’s state- were sold to the government sold over 250,000 Zhifei Biological Products The Marketplace ment was released a day ear- of Shandong province. Author- doses that didn’t Co., which sells Merck’s Garda- To advertise: 800-366-3975 or WSJ.com/classifieds lier. He didn’t elaborate on ities in Jilin province fined it sil vaccine in China, and Shen- what more his government $380,610 and seized $126,683 meet safety standards. zhen Kangtai Biological Prod- would do to investigate. worth of assets from sales of ucts Co. Ltd., which produces FRANCHISE Mr. Li’s investigation was the vaccine, the company said. vaccines for hepatitis B among sparked by public outrage Authorities in Beijing have others, were temporarily sus- against Changsheng Biotech- recently tried to clean up the There were eight times pended after both companies’ nology Co., a large vaccine world’s second-largest drug more searches and mentions shares fell by the maximum maker based in Jilin, a prov- market by sales after a series of the term vaccine on Sunday 10% daily limit on Monday. ince in northeast China. Ear- of safety scandals—involving compared with a day earlier, Shenzhen-listed Changsh- lier this month, the national drug ingredients, milk and in- according to WeChat Index, an eng was halted from trading drug regulator said Changsh- fant formula—led to deaths app for big data analysis. after falling by more than 40% eng fabricated production re- and angered the public. The Searches and mentions involv- since last Monday. cords of a rabies vaccine. The latest incident touched a ing the company, Changsheng, —Fanfan Wang company said it suspended nerve. were 50 times higher over the and Stella Yifan Xie production of the vaccine Anger on Tencent Holdings same period. contributed to this article. Speaker Maker Sonos Sets IPO Range BUSINESS OPPORTUNITIES BUSINESS OPPORTUNITIES BY KIMBERLY CHIN SUCCESSFUL COSMETIC BOTTLE ASSET SALE High-end speaker company MAJOR PROFITS/50 MILLION UNITS SOLD www.earn11.com Sonos Inc. laid out the terms $475,000 ALL TOOLING READY WEBSITE: WWW.CHLOEE.COM EARNup to11% for its initial public offering in CONTACT DR. GREEN INVESTING IN 1st MORTGAGES a regulatory filing Monday, Short Term, High Yield, Low LTV. (310) 600-5052 OR [email protected] Secure & Great Monthly Income. saying it expects its shares to price between $17 to $19 each.  Call 800-359-1111 Sonos plans to offer    roughly 13.9 million shares in    its IPO, raising about $250          Co. w/Patented ENGINE DIAPER product-          million at the midpoint. The line. World’s only proprietary devices for        company will sell about 5.6   !   " oil-leakingvehicles.TheseEnvironmentalde- million shares, netting $90.5    vices prevent water pollution by absorbing million at the midpoint. About engine oil leaks. $3/$5 milion sales 1st yr. 8.3 million shares in the offer- Oil Field Supply Store For Sale $50 mil yr in 4/5 yrs. www.oildiaper.com Email: [email protected] ing are being sold by existing OKLAHOMA AREA shareholders. 24 YEARS IN BUSINESS 12-13M ANNUAL SALES After the offering, Sonos OIL FIELD EQUIP would have a market value of OVER 150 CUSTOMERS TRAVEL about $2.14 billion on a fully Larry Aspegren, Aspen Comm’l Realty 405 213 6473 [email protected] diluted basis, according to a MARK LENNIHAN/ASSOCIATED PRESS person with knowledge of the Sonos expects its shares to price between $17 to $19 each. Above, a Sonos store in New York. Investment Opportunity Save Up To 60% deal. Shares are expected to be- the ticker SONO. $555.4 million in revenue and Sonos, founded in 2002, has For Accredited Investors First & Business gin trading later this month or Earlier this month, Sonos $15.2 million in profit. raised about $110 million in $10.9 Million 5% Conv Preferred INTERNATIONAL in early August, The Wall reported $655.7 million in rev- The company has reported primary funding from inves- Established Co. – Potential IPO Major Airlines, Corporate Travel Never Fly Coach Again! Street Journal reported, citing enue for the six months ended annual losses for the past tors, including Index Ventures 14 Patents - 93% Gross Profit www.cooktravel.net people familiar with the pro- March 31 and $13.1 million in three fiscal years, though it and KKR & Co. Call for Details: (561) 331-1012 (800) 435-8776 cess. The company will trade profit. In the year-earlier pe- was profitable for at least two —Maureen Farrell on the Nasdaq exchange under riod, the company generated years before that. contributed to this article. THE WALL STREET JOURNAL. Tuesday, July 24, 2018 | B5 BUSINESS NEWS IKEA Builds Changes Into Sales Model Furniture chain offers Indian outlet will cost less than $3. It also will offer a an assembly service in sewing service so customers India, where shoppers can buy fabric to have curtains made in the store. often shun such work IKEA spent weeks training its in-house team, which in- BY SAABIRA CHAUDHURI cludes 75 women, to assemble AND CORINNE ABRAMS its furniture. In addition to its full-time employees, the com- IKEA built a global empire pany has separately trained selling affordable furniture carpenters available on Urban- that people assembled them- Clap, a Bangalore-based online selves. For its first store in In- marketplace for freelance la- dia, the Swedish retailer is up- bor, to assemble its furniture. ending its business model. Low labor costs mean many The India store, set to open Indians are used to hiring car- next month in the southern penters to make furniture or city of Hyderabad, will feature even just hang pictures. IKEA’s first in-house furniture- Elsewhere, too, IKEA has assembly team, with 150 full- been working to be more con- time employees. IKEA created venient. Last year it acquired the optional service after re- Silicon Valley startup Task- search indicated many Indians Rabbit—the online market- would be unlikely to buy book- place that connects people shelves and tables they had to with freelancers willing to run screw together. errands and do odd jobs—say- The store also will have ing it would use it to for furni- items tailored for Indian pref- ture assembly.

erences, such as lunchbox sets HARSHA VADLAMANI FOR THE WALL STREET JOURNAL One of its biggest adapta- to carry multiple-course The Swedish retailer made more than 1,000 home visits to learn about Indians. The company’s new store in Hyderabad, India. tions in India is a plan for meals, pans to cook Indian smaller, city-center stores. In- flatbread and mattresses con- the past six years to $34.45 watched how invited families dian cities are traffic-filled, taining coconut fibers, which billion as of March, according Getting Organized interacted with its products. making it unappealing to many Indians find cooling. The to Indian retail consultancy India's home-furnishings market is largely served by informal Its employees have been on travel long distances. And con- outlet’s 1,000-seat restaurant Technopak. mom-and-pop outfits—so-called unorganized retailers—but bigger over 1,000 home visits to fig- sumers are used to shopping will be IKEA’s biggest to date, Among the retailer’s poten- companies are increasingly gaining share. ure out how Indians eat, sleep, in much smaller stores than serving samosas and biryani tial customers is Nitin Pai of relax and entertain. In prepa- the sprawling big-box chains as well as Swedish meatballs Bangalore. Mr. Pai liked the Global sales, change from Sales of home furnishings ration for its Hyderabad open- of the West. made with chicken or vegeta- IKEA bookcases he bought in a year earlier in India ing, IKEA flew 75 Indian em- “India is an opportunity to bles because most Indians Singapore so much that he 8% $40 billion ployees to Sheffield last year leapfrog,” Mr. Maeztu said. don’t eat beef or pork. looked for a local carpenter to Unorganized to help open a store in the “We cannot penetrate Mumbai “This is the moment of copy the design. Until IKEA Organized English city. It also opened a or Bangalore only with a blue truth,” said Juvencio Maeztu, makes its debut in Bangalore, 6 30 pop-up shop in Hyderabad to box in the outskirts.” the company’s deputy chief ex- the 44-year-old hopes the start introducing its products IKEA’s main domestic com- ecutive, who spent the past six company’s arrival in India will to potential customers. petition will be the thousands 4 20 years preparing for the India create better options. “Higher Many things in the of tiny furniture shops and launch. “India is an opportu- expectations will cause domes- 400,000-square-foot Hydera- roadside carpenters who build nity to make the next 75 years tic competitors and those elu- 2 10 bad store will be the result of to order. There are only a few of IKEA.” sive carpenters to raise their that research. Dining-room national furniture brands and IKEA, like many big West- game,” he said. furniture will have a promi- websites. ern retailers, is betting that Getting India—the world’s 0 0 nent role after home visits A few miles from the IKEA India’s mushrooming middle second-most-populous coun- FY2013 ’14 ’15 ’16 ’17 FY2012 ’13 ’14 ’15 ’16 ’17 ’18 showed the dining table is in Hyderabad is Ashish Singh’s class and young population try—right has never been Note: IKEA’S fiscal year ends Aug. 31; India's fiscal year ends March 31. “not only a place to eat but to Furniture Point store. He will spur demand for the com- more important for IKEA. Its Sources: the company (global sales); discuss,” Mr. Maeztu said. knows IKEA is coming, but pany’s products. Roughly half global sales growth has Technopak (home furnishings) THE WALL STREET JOURNAL. The new IKEA will have said he isn’t worried. Although of India’s 1.3 billion people are slowed sharply in recent years, hundreds of items the average both venues will compete on under the age of 25. While while its profit has been raft of regulations limiting for- said IKEA still has more work Indian can afford, including a price, Mr. Singh maintained only a small minority can af- squeezed by heavy invest- eign investment in the coun- to do on the store. $2.16 jewelry box, shoehorns that IKEA can’t match the ford an IKEA bed or table set ments in e-commerce. try’s retail sector. The Swedish retailer spent for 70 cents each and door- quality of materials or cus- today, incomes and aspirations IKEA has considered doing In the past month, the an- years studying India to under- mats that say “welcome” in tomization his store allows. are rising. The country’s business in India for years, nounced date of the company’s stand what makes its residents different Indian languages for “We deal with Indian teak; home-furnishings market ex- having first established a pres- India opening has been de- tick. It set up a makeshift about $5. Roughly 800 of the they deal with plywood,” he panded more than 90% over ence in 2007 only to run into a layed twice. A spokeswoman IKEA store near New Delhi and 7,500 products on sale in the said.

ELSON M N A Wade Spann T R R Q ALBERT NELSON MARQUIS E U B I L S A L LIFETIME ACHIEVEMENT AWARD

L A I T F E N T E IM EM E ACHIEV 2017-2018 RECIPIENTS Award

Marquis Who’s Who is proud to honor its most distinguished listees based on their career longevity, philanthropic endeavors and lasting contributions to society. Out of 1.5 million biographees, only a small percentage are selected for the Albert Nelson Marquis Lifetime Achievement Award. Among that prestigious group, a handful are chosen to represent Marquis in The Wall Street Journal. It is our great pleasure to present them here. Congratulations to our prestigious listees!

ByronH.Arison,PhD Jeffrey S. Borer, MD Michael D. Brown Chemist, Researcher Prof. of Medicine, Cell Biology, Founding Partner and Public Health; SUNY Downstate Ohrenstein & Brown LLP

Richard G. Linowes, DBA Allan Mohl, PhD, LCSW, BCD Calvin Reynolds Educator: Global Management, Licensed Clinical Social Worker Global Human Resources Consultant Strategy and Entrepreneurship Private Practice Calvin Reynolds and Associates

“My victory was admitting I had a traumatic brain injury and getting help.” While on patrol in Iraq, Wade’s Humvee struck an IED. With DAV, he’s found the support he needs to overcome his injuries. DAV helps veterans get the benefits they’ve earned— helping more than a million veterans each year in life-changing ways. Support more victories for veterans. Go to DAV.org.

Susan Porter Rose Joseph A. Rybczyk Allie Maitland Smith, PhD Effecter: White House & Education Physicist, Researcher, Writer Engineering Educator (Ret.) www.mrelativity.net University of Mississippi

est. 1898 2017-2018 The Original. “Often imitated ... Never duplicated.” B6 | Tuesday, July 24, 2018 THE WALL STREET JOURNAL. BUSINESS & FINANCE For Sale: Ad Space in Packages Aircraft-Parts Maker BY KHADEEJA SAFDAR Nordam Files for

In the sliver of spare room between a new pair of shoes Chapter 11 Protection and the books you ordered on- line, retailers have found a dif- BY PEG BRICKLEY lons that attach the engine to ferent way to monetize the the aircraft. empty space in your packages. Aerospace manufacturer Existing lenders led by JP- Saks Fifth Avenue, Zulily the Nordam Group Inc. has Morgan Chase & Co. are of- and Barnes & Noble College filed for chapter 11 bankruptcy fering up to $45 million in are among several businesses protection after a high-stakes bankruptcy financing, money that have joined a new mar- contract dispute over an im- to support the business while ketplace that allows advertis- portant part for business jets restructuring talks continue. ers to buy and insert paper with Pratt & Whitney Canada Pratt & Whitney and Nor- ads in customers’ boxes. More Corp. dam worked out some of their than 25 retailers have listed Nordam spent $200 million differences in arbitration ear- slots for sale in their packages to develop the nacelle sys- lier this year, but efforts to en- in the weeks since the website, tem—a housing system that list lender support didn’t pan called UnDigital, went live. works with the engine as an out, Mr. DiDonato said. The rise of online shopping onboard power plant—for In June, $266 million in has taken a toll on retailers as Gulfstream G500 and G600 bank loans matured, catching shipping costs and invest- jets, court papers say. Nordam in a liquidity crunch ments in e-commerce capabili- The system is approved by caused by years of spending ties have cut into profits. Re- regulators and is performing tail margins on average fell to well in test flights, said Chief 8% last year from 10.2% in Executive Meredith Madden in The cost of the 2012, according to consulting a statement Monday. firm AlixPartners. Over that However, the cost of the na- nacelle program has period, e-commerce sales ex- celle program has strained strained Nordam’s panded to 17.6% of total sales Nordam’s finances, and the from 10.5%. company turned to bankruptcy finances.

Retailers hope they have a UNDIGITAL for breathing room to reorga- remedy: Wring more money Touch of Modern is working on an agreement to include inserts in Cabela’s Inc. packages. nize, court papers say. out of the space inside the “If at all reasonably possi- box. into segments, smaller brands company. ble,” Nordam hopes to negoti- on the nacelle, and declining For years, companies have Boxed In and niche advertisers are able Saks declined to comment. ate a consensual resolution earnings. Earnings before in- been adding product samples E-commerce sales rose to 17.6% to buy inserts, said Ryan Mill- Touch of Modern, an e- with lenders and Pratt & Whit- terest, taxes, depreciation and or targeted coupons in their of total sales last year, but retail man, co-founder and CEO of commerce site that curates ney, according to John C. Di- amortization fell to about $50 packages shipped to custom- margins continue to fall. UnDigital. “If you want to try products for men, said it is Donato, a restructuring pro- million in fiscal year 2017 ers in hopes of encouraging 100,000 units instead of five working on an agreement to fessional leading the from roughly $88 million in 18% shoppers to place another or- Online purchases as million, it might cost a few include inserts in the packages turnaround effort. The com- fiscal year 2008, according to der at their stores. Some re- ashare of total sales cents more, but it allows an of Cabela’s Inc., which sells pany wasn’t able to do it out- papers filed Sunday. tailers brokered occasional 16 advertiser to test with a very hunting and outdoor gear. side of bankruptcy, he said in Nordam is owned largely by deals with existing vendors or large company.” Though the cost of an insert a declaration filed with the the family of Ray Siegfried Sr., advertisers. With UnDigital, 14 Online retailer Zulily said it ad is much higher than a digi- U.S. Bankruptcy Court in Wil- who acquired the struggling retailers are offering their has included inserts in pack- tal ad, an insert can be a more mington, Del. business in 1969, and led its packages to a broader range of 12 ages in the past but mainly efficient way to reach a shop- Pratt & Whitney spokes- growth into an international potential advertisers. from its existing vendors. The per, said Ian Yung, senior di- woman Jenny Dervin said the manufacturing and repair op- Retail margins On the UnDigital platform, 10 retailer joined UnDigital in rector of business develop- company worked “diligently eration. retailers post monthly listings hopes of finding new advertis- ment at Touch of Modern. “It’s for many months with our Besides the bank debt, Nor- with a number of packages 8 ers and generating more reve- rare that someone will order supplier Nordam and its lend- dam owes Siegfried family- and the maximum number of nue to reinvest in the busi- something online and not ers,” offering “financial and controlled lending entities $19 inserts per package. Advertis- 6 ness, said Chris Johns, open the package.” other support that, in our million, court papers say. ers can specify the number of manager of integrated market- Some shoppers say they view, could have kept Nordam Only U.S. units of the Tulsa, ’132012’14 ’15 ’16 ’17 packages in which they want ing and partnerships for Zu- open packages but don’t out of bankruptcy.” Nordam Okla., company filed for chap- inserts at a price set by the re- Source: AlixPartners lily. “A penny saved is a penny bother looking at the inserts. rebuffed what she called ter 11 bankruptcy protection, tailer. The average price per THE WALL STREET JOURNAL. passed along to the customer,” “My main objective is to get “business continuity options,” according to court documents. insert is between 10 and 12 he said. my item as fast as I can—I and chose bankruptcy, accord- An employer of more than cents, and the average number the retailer’s shipping facility Barnes & Noble College is don’t look at anything else,” ing to Pratt & Whitney. 2,000 people, Nordam is being of inserts per box is two to for them to be inserted. Ad- looking for advertisers that said Corey Gorman, a 27-year- “We will hold them ac- represented in bankruptcy by three. vertisers can add unique links sell products specifically for old accountant in Scranton, countable for their actions,” Weil Gotshal & Manges LLP Once an advertiser buys the on their inserts to track con- college students, such as those Pa. “The only way I would look Ms. Dervin said. Pratt & Whit- and Richards, Layton and Fin- inserts, UnDigital manages version rates. related to technology or enter- at the ads is if they were ney makes the engines; sub- ger as legal counsel and printing and payment logis- Because retailers can break tainment, said Lisa Malat, shoved in my face like You- contractor Nordam makes the Guggenheim Securities LLC as tics. It also sends the ads to up the volume of packages chief marketing officer at the Tube ads.” engine covering and the py- investment banker.

October23,2018|SanFrancisco,CA

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© 2017 Dow Jones & Co., Inc. All rights reserved. 6DJ6410 B10 | Tuesday, July 24, 2018 THE WALL STREET JOURNAL. MONEY & INVESTING China Tower SeeksBiggest IPOSince’14 Telecom monopoly’s September 2014. The listing, which is aimed offer would be largest for Aug. 8, comes as global in- since Alibaba and vestors have turned more cau- tious on Chinese stocks as the raise up to $10 billion trade conflict with the U.S. es- calates. Hong Kong’s bench- BY JOANNE CHIU mark Hang Seng Index is down 15% this year from a January The monopoly behind peak. China’s vast network of cell- However, Steven Leung, an phone towers started market- executive director at UOB Kay ing what could be the world’s Hian, said China Tower could largest initial public offering be a good way to bet on rapid in four years. growth in China’s mobile mar- China Tower Corp. wants ket. “Some investors might

to raise up to $8.7 billion by consider switching into China EPA/SHUTTERSTOCK selling a quarter of its shares Tower, which is expected to The company was created in 2014 by China’s three big telecommunications operators to cut costs and duplicated investments. in Hong Kong, according to a provide higher yields than the term sheet released Monday. Big Three wireless operators,” Analysts at Goldman Sachs, China Tower is offering Including an option to sell 15% he said. one of the banks running the about 43.1 billion shares at an Towering Presence more stock if demand is The company was created deal, estimate China Tower’s indicative price of 1.26 Hong Five largest global initial public offerings in 2018, by fundraising size strong, the deal could raise as in 2014 by China’s three big earnings before interest, taxes, Kong dollars to HK$1.58 (16 much as $10 billion. telecommunications opera- depreciation and amortization U.S. cents to 20 U.S. cents) a DEAL VENUE FUNDRAISING SIZE, BILLIONS The company says it is the tors—China Mobile Communi- will increase 11% a year share. That implies a maxi- China Tower* Hong Kong $10 world’s largest telecommuni- cation Co., China United Net- through 2022, according to a mum market capitalization of cations tower provider by rev- work Communications Corp. report seen by The Wall Street $34.7 billion, before any op- enue and locations, with and China Telecom Corp— Journal. tion to sell extra stock. In Meituan Dianping* Hong Kong $6 nearly 1.9 million sites across which pooled their towers to Hong Kong recently comparison, New York-listed mainland China and a national cut costs and duplicated in- changed its rules to attract American Tower Corp., which Xiaomi Hong Kong $5 market share of 97% by sales. vestments. The three own more listings from technology has operations from Peru to It is raising funds to upgrade most of its shares. and biotech startups, securing Nigeria, has a market value of and expand its network and China Tower management the $4.7 billion debut of about $62 billion. Siemens Healthineers Frankfurt $5 repay debt. told investors it plans to pay smartphone-maker Xiaomi Ten large investors agreed A $10 billion deal would be out at least half of its earnings Corp. China Tower showcases to buy US$1.4 billion of stock Foxconn Industrial Internet Shanghai $4 the world’s largest IPO since as dividends. The company a more traditional strength of in the IPO, no matter where in Chinese e-commerce giant Ali- last year reported net profit of the city: serving as a venue the range it prices. Corner- *Estimated values for uncompleted deals baba Group Holding Ltd.’s $25 1.94 billion yuan ($286.5 mil- where state-backed Chinese stone investors are a fixture of Note: Already listed IPOs include over-allotments. billion New York listing in lion). companies can raise capital. the Hong Kong IPO market. Sources: Dealogic; China Tower’s term sheet THE WALL STREET JOURNAL. Hedge-Fund Star Cooperman Shuts Omega Cushman

BY RACHAEL LEVY the last financial crisis and will be launching a new fund. some even posted outsize Mr. Cooperman said his family Expects Renowned hedge-fund man- gains by anticipating the col- office will invest in both. ager Leon Cooperman on Mon- lapse. Since 2008, the funds Mr. Cooperman’s decision day told clients that he would have struggled to do better to shut Omega to outside in- To Price at be returning capital and turn- than low-cost, passive invest- vestors comes just over a year ing his firm into a family of- ment products that track in- after he and U.S. securities fice, a dramatic shift for one dexes such as the S&P 500. regulators ended a lengthy Up to $18 of the country’s best-known Mr. Cooperman said he ex- showdown over allegations of BY NISHANT MOHAN stock pickers. pected tough financial markets insider trading. Mr. Cooperman said his in coming years. He acknowl- That settlement didn’t bar Real-estate-services firm New York hedge fund, Omega edged that he didn’t want to the well-known investor from Cushman & Wakefield said Advisors Inc., which was be caught in the fray. the industry. Monday in a regulatory filing founded in 1991, will now man- In the letter to clients, Mr. The agreement with the Se- that it expects shares in its age only his personal wealth. Cooperman wrote: “I turned curities and Exchange Com- initial public offering to sell Mr. Cooperman, who regularly 75 last April. It is my under- mission called for Omega to for $16 to $18 each. appears on financial televi- standing that if you make it accept a compliance monitor The company anticipates

sion, said the decision was CHRISTOPHER GOODNEY/BLOOMBERG NEWS past 65 and cancer doesn’t get for five years who can ques- net proceeds of $719.3 million driven “solely by how I want Leon Cooperman said he is closing his fund to outside investors you, you can expect to live on tion any trade that Mr. Coop- from the 45-million-share of- to spend my remaining years.” ‘because of my age and because I want to reduce my stress level.’ average to 85. Hopefully, I can erman or his traders make. It fering, based on the midpoint In an interview, Mr. Cooper- improve on that average, but also called for monthly certifi- of the range. man, 75 years old, said his de- for the S&P 500, including div- in the first two quarters, in any event I don’t want to cations that insider informa- The company gave its un- cision wasn’t based on perfor- idends. which was lower than the spend the rest of my life chas- tion didn’t figure into any derwriters Morgan Stanley, mance. “I’m closing because of Omega, like all hedge funds, 2.65% return on the S&P 500, ing the S&P 500 and focused trades. JPMorgan Chase &Co.,Gold- my age and because I want to is under pressure. Stock pick- including dividends, over the on generating returns on in- Neither Mr. Cooperman nor man Sachs Group and UBS reduce my stress level,” he ers have faced headwinds, and same period. vestor capital.” the firm Omega Advisors ad- Group the option to purchase said. clients have clamored for Investors also redeemed an Omega managed $3.6 billion mitted to wrongdoing as part up to 6.75 million shares. If One of Omega’s funds, lower fees as hedge funds have estimated $3 billion from as of June 30, according to the of the pact. fully exercised, the IPO’s total Omega Overseas Partners struggled to make money. hedge funds during the second firm’s website. Mr. Cooperman, the son of proceeds could reach $931.5 Ltd., has posted 12.6% annual- Well-established funds, such quarter, according to HFR, Omega’s vice chairman, an immigrant plumber, grew million. ized net returns for certain cli- as Eton Park Capital Manage- which was the highest outflow Steve Einhorn, and Mr. Coop- up in a one-bedroom apart- ents since January 1992, ac- ment LP, have shut. since the first quarter of 2017. erman will advise each other ment in the Bronx. He joined cording to a fund document A widely followed hedge- The industry manages a total on their respective family of- Goldman Sachs Group Inc. the reviewed by The Wall Street fund index maintained by of $3.23 trillion. fices, Mr. Cooperman said in day after he graduated from Journal. That was better than data-research company HFR Hedge funds typically bet the letter. Omega employees Columbia Business School and the 9.6% rise in the S&P 500 dropped 0.45% in June, ac- on or against stocks, bonds or Sam Martini and Eric Schnei- spent more than two decades $719M during the same period. This cording to a report released other securities, often using der, who run the firm’s credit there. He rose to general part- Net proceeds if the shares sell at year, that same fund has last week. That pulled down borrowed money and charging fund, will continue the fund ner and chairman of its asset- the midpoint of the price range gained 4.5% after fees through the industry’s gains for the hefty fees. Many dropped less under a new name, and portfo- management business before Friday, lower than a 5.9% gain first half. The index rose 0.79% than the overall market during lio manager Rebecca Pacholder leaving to establish Omega.

The company is currently owned by an investment group led by private-equity firm TPG Blackstone Plays the Blues on Gibson, Favors Sale Capital, which purchased Cushman in 2015. It combined BY BECKY YERAK Gibson blamed much of its that firm with DTZ and recent financial struggle on its Cassidy Turley to create the Blackstone Group LP’s Hong Kong-based Gibson Inno- global real-estate giant. The lending arm said bankrupt vations Ltd. division, which group paid about $3.5 billion Gibson Brands Inc. has failed sells Philips-branded consumer to acquire the three firms. The to properly market its assets, electronics such as head- investor group, which also in- thereby favoring its proposed phones and speakers. Gibson cludes PAG Asia Capital and sale to senior secured bond- said its musical-instruments Ontario Teachers’ Pension holders. business “has performed well.” Plan Board, are expected to The investment firm added GSO said KKR is being en- control 70% of the shares out- that it is willing to provide ad- abled in the “scheme” to take standing in the company once ditional financing to give the control of Gibson by “promis- it goes public. guitar maker more time to ing existing shareholders” The backers are taking the consider alternative offers. some of the company’s value. company public at a time Blackstone’s GSO Capital Gibson’s majority owners, when the firm’s peers, includ- Partners LP is owed $77 mil- Henry Juszkiewicz and David ing CBRE Group Inc. and JLL, lion on a secured term loan the Berryman, bought Gibson in have been trading near re- musical-instruments company 1986. Mr. Juszkiewicz serves cords. had on its books as it headed as chief executive officer, while Cushman has $3 billion in into bankruptcy. The firm on Mr. Berryman serves as presi- debt, and the company plans Friday echoed earlier calls by dent. They are also board to use most of the proceeds to unsecured creditors, including members. payitdown. electronics company Koninkli- The proposed restructuring For instance, it said in the jke Philips NV, for Gibson to includes employment and con- filing it would pay off the make a bigger push to find po- sulting agreements with both $470 million balance of a sec-

tential new buyers. FRANK LENNON/TORONTO STAR/GETTYmen. IMAGES Mr. Berryman would re- ond-lien loan with an 8.87% GSO said it “would even be B.B. King with his Gibson. The company said its musical-instruments business ‘has performed well.’ ceive a salary and bonus total- interest rate. willing to help fund that pro- ing nearly $3.4 million and Cushman reported a net cess by providing” financing in May with a reorganization be willing to buy Gibson at a hearted” and there has been a warrants exercisable for up to loss of $221 million in 2017 for Gibson during the bank- plan that would allow senior price greater than the recent “failure to properly market” 2.2% of the equity in the reor- and a loss of $92 million in ruptcy, as well as when it secured bondholders led by valuation of the Nashville, the company, GSO said. ganized company, plus health the first quarter of 2018, ac- wraps up chapter 11 proceed- KKR & Co. to convert their Tenn.-based owner of such Gibson had no immediate benefits. Mr. Juszkiewicz cording to regulatory filings. ings, “to further stimulate bid- debt into equity in the busi- guitar brands as Les Paul and comment Monday. would receive, among other Expenses for the quarter in- ding in an open-sale process,” ness, which was founded in Flying V. Some potential bid- The reorganized Gibson is things, $2.1 million in consult- cluded $65.7 million for inte- according to a filing Friday in 1894. ders haven’t been contacted by expected to be valued between ing fees and warrants exercis- gration and acquisition costs. U.S. Bankruptcy Court in Wil- GSO said there are other in- Gibson about buying its assets, $360 million and $430 million, able for up to 2.2% of the eq- The company will trade un- mington, Del. terested bidders, both strate- GSO said. Earlier efforts to according to an analysis by in- uity in the reorganized Gibson, der the ticker CWK on the Gibson filed for bankruptcy gic and financial, who might find buyers have been “half- vestment bank Jefferies Group. plus health benefits. New York Stock Exchange. THE WALL STREET JOURNAL. **** Tuesday, July 24, 2018 | B11 MARKETS Bond Yields Surge World-Wide Small-Cap Investors flee from Play Looks government debt on Investors sold 2.98% government bonds 2.963% Vulnerable reports Bank of Japan Monday, sending Yield on the 10-year Treasury note on Monday 2.96 is near policy change yields higher, as they ContinuedfrompageB1 grappled anew with vestment platform. BY DANIEL KRUGE The Peterson Institute said AND MEGUMI FUJIKAWA the prospect stimulus 2.94 its analysis of the most re- will be withdrawn at a cently enacted tariffs found Government-bond prices faster rate. Many the vast majority apply to in- world-wide tumbled Monday, worry the end of 2.92 termediate or capital goods, roiled by reports that central such as machinery and electri- banks could be on the verge of easy-money stimulus cal equipment. will remove a crucial taking another step back from 2.90 That means U.S. firms that the easy-money policies that support for markets. Friday: 2.895% import those goods will pay have characterized the postcri- higher prices, even if they are sis period. manufacturing their products News reports that the Bank 2.88 domestically. of Japan might consider “You have firms that don’t changing its in- look like they’re exporting di- CREDIT terest-rate tar- 2.86 rectly,” Ms. Lovely said. “Right MARKETS gets helped push 6 a.m. 7 8 9 10 11 noon 1 p.m. 2 now the damage is containable the yield on the in some sense because the dol- 10-year Japanese lar values aren’t huge, but Japanese 10-year yield German 10-year yield U.K. 10-year yield government bond as high as they’re starting to get bigger.” 0.09% in Monday trading in 0.10% 0.41% 1.30% Winnebago, which has a Tokyo from 0.03% late Friday. market value of about $1.3 bil- 0.08 0.40 1.28 While that rate and other lion, said on its earnings call government-bond yields are 0.06 0.39 1.26 last month that the inflation- still generally low, it was the ary pressures caused by the 0.04 0.38 1.24 largest one-day move higher tariffs are the “biggest un- for the Japanese bonds in 0.02 0.37 1.22 known for many companies to- nearly two years. day.” Many investors worry that 0 0.36 1.20 The Forest City, Iowa, com- the end of ultralow interest 7 p.m.midnight 4 a.m. 6 8 10 4 a.m. 6 8 10 pany said it is particularly con- rates and other monetary stim- Sunday Monday Monday Monday cerned that demand for its ulus will remove a critical sup- Note: All times Eastern. recreational vehicles could port that has lifted markets Source: FactSet THE WALL STREET JOURNAL. wane as consumers pay for the since the financial crisis. impact of tariffs. The Wall Street Journal “It will force them to make later reported that Japan’s risk,” said John Briggs, head of speculative investors, such as cials are studying tweaks such The policy moves aren’t choices on where to spend central bank would likely stick interest-rate strategy at hedge funds, placed a record as increasing flexibility in its without risk and could lead to their discretionary savings and close to current policy at their Natwest Markets. number of bets that the 10- yield target of zero for the 10- a stronger yen or a weakening dollars,” Chief Executive Mi- next meeting, citing people fa- The jump comes after the year Treasury yield would rise year government bond, the of the Japanese stock market, chael Happe said. “We also miliar with the matter. Still, U.S. 10-year yield defied inves- amid signs of tightening from Journal reported Monday. The analysts said. Policy makers in take very seriously the price the market reaction shows how tors’ expectations for a numerous central banks. central bank enforces a tight Japan have taken a number of increases that we ask of the even small shifts can spur sig- growth-powered surge, re- The calm was broken Mon- cap on the yield, which has re- ill-timed steps to adjust fiscal market because we’re fully nificant market reactions after treating from 3% after mount- day. The BOJ regular policy mained within a range of less and monetary policy, which aware that they could have an years of little change. ing concerns about the impact meeting set for next Monday than 0.11 percentage point dur- some observers say has made impact in the future in terms The yield on the 10-year U.S. of trade frictions and a series and Tuesday comes at a time ing the past year. it more difficult for the na- of slowing demand.” Treasury note, a global bench- of benign readings on inflation. of steady economic signals. Such a decision could have tion’s economy to produce Even though Winnebago mark that influences borrow- Inflation threatens the value of Growth is recovering and cor- ramifications beyond Japan, growth and inflation at a speed purchases most of its steel and ing costs for corporations and bonds’ fixed payments. porate profits are strong, econ- where government-bond yields sufficient to allow the BOJ to aluminum in the U.S., the com- individuals, followed other The recent period was par- omists said, but inflation re- have remained persistently low reduce its support for the pany warned it expects cost global sovereign debt yields ticularly stable, with the yield mains far below the BOJ’s 2% for decades. economy. pressures to continue in the higher, rising to 2.963%, its moving within a range of less target and profits for some Allowing the yield to move The concentration of gov- current quarter. Those com- highest level since June 13. than 0.1 percentage point dur- banks are declining—hurt by freely could increase the 10- ernment-bond holdings within ments, though, were overshad- Yields, which rise as bond ing the 21 trading sessions be- low long-term interest rates year JGB yield by as much as Japan’s central bank may limit owed by the company’s stron- prices fall, also climbed in Ger- fore Monday. The last time that leave little opportunity to 0.3 percentage point and could the impact of giving yields on ger-than-expected earnings in many and the U.K. yields traded in such a narrow profit from lending. “create direct upward pressure the debt the chance to rise. the latest quarter, spurring a “It felt like we were in a range was 1978, according to While Japan’s central bank on other global sovereign mar- Relative to the size of its econ- 15% surge in shares on June 20. holding pattern—now all of a the WSJ Market Data Group. is likely to adhere to the con- ket bond yields,” Mr. Briggs omy, Japan’s debt ranks as the Meanwhile, Acuity Brands sudden you’ve got a potential That calm persisted even as tours of its current policy, offi- said. largest in the developed world. and Art’s Way Manufacturing also said earlier this month that their input costs have risen with steel prices. Acuity Oil Prices End Lower as U.S., Iran Face Off said it hopes to mitigate the impact by increasing prices and reducing costs. Art’s Way, BY CHRISTOPHER ALESSI supply from the Organization which supplies several multi- AND AMRITH RAMKUMAR of the Petroleum Exporting national agricultural-equip- Countries—led by Saudi Ara- ment companies, said it has al- Oil prices swung between bia—and producing allies like ready been forced to raise its gains and losses before closing Russia following a decision in prices as a result. lower Monday after height- late June to begin ramping up Other companies, including ened rhetoric between the U.S. output after more than a year industrial-equipment supplier and Iran added to uncertainty of holding back production. MSC Industrial Direct Co., about crude exports from the That and other “neutraliz- furniture maker Herman Islamic Republic. ing factors,” including the “es- Miller Inc. and consumer- Light, sweet crude for Sep- calation of the global trade products company Helen of tember delivery settled 37 conflict and possible negative Troy Ltd., also cited the tariffs cents, or effects on oil demand,” have as a concern on recent earn- COMMODITIES 0.5%, lower limited the market’s reaction ings calls. at $67.89 a to the latest threats by Mr. Multinationals like Boeing barrel on Trump against Iran, Commerz- Co. and Caterpillar Inc. would the New York Mercantile Ex- bank analysts said in a note to face the brunt of the impact change, after falling in three clients. from a trade war. Companies consecutive weeks. Brent A stronger dollar has also in the S&P 500, on average, get crude, the global benchmark, hurt oil and other commodities about a third of revenue from fell 1 cent, or less than 0.1%, to by making them more expen- overseas. $73.06 a barrel. Prices have re- sive for overseas buyers. On cently fallen from multiyear Monday, the WSJ Dollar Index, highs hit earlier this year with ALI MOHAMMADI/BLOOMBERG NEWS which tracks the dollar against AUCTION RESULTS investors worried that the sup- An oil tanker at Kharq Island, Iran. Analysts say the Persian Gulf nation holds key to oil supply. a basket of 16 other currencies, Here are the results of Monday's Treasury auctions. ply disruptions that have added 0.1%. All bids are awarded at a single price at the market- clearing yield. Rates are determined by the difference fueled much of the rally might line U.S. policies against Iran. day of crude exports could be could spur further market vol- Market participants were between that price and the face value. be easing. Mr. Trump in May withdrew at risk. atility. looking ahead to weekly U.S. 13-WEEK AND 26-WEEK BILLS President Donald Trump the U.S. from a 2015 interna- The U.S. has threatened to “Iran holds the key for the inventory data scheduled to be 13-Week 26-Week late Sunday tweeted a message tional agreement intended to slap sanctions on countries oil balance in the coming released Wednesday for the Applications $148,938,404,700 $130,722,409,300 Accepted bids $51,000,564,700 $45,000,169,300 to his Iranian counterpart, curb Iran’s nuclear program, that don’t cut oil imports from months,” said Stephen Bren- latest update on domestic " noncomp $917,202,700 $793,540,100 Hassan Rouhani, warning that setting the stage for the reim- Iran to “zero” by Nov. 4. While nock, an analyst at brokerage stockpiles. " foreign noncomp $991,000,000 $1,000,000,000 Auction price (rate) 99.502028 98.918111 threats against the U.S. will be position of economic sanctions supply uncertainty surround- PVM Oil Associates Ltd. “Its Among refined products, (1.970%) (2.140%) met with consequences few in that are expected to hinder ing other countries including exports are clouded by uncer- gasoline futures added 2.24 Coupon equivalent 2.007% 2.193% Bids at clearing yield accepted 90.08% 29.02% history have suffered. The Iran’s oil industry. Analysts Libya and Venezuela has tainty following the reintro- cents, or 1.1%, to $2.0914 a gal- Cusip number 912796QE2 912796QU6 tweet appeared to refer to have estimated up to one mil- boosted oil, some investors say duction of U.S. oil sanctions.” lon. Diesel futures closed up Both issues are dated July 26, 2018. The 13-week bills comments Mr. Rouhani had lion barrels a day out of Iran’s the wide range of outcomes re- At the same time, oil prices 1.36 cents, or 0.6%, at $2.1180 mature on Oct. 25, 2018; the 26-week bills mature on Jan. 24, 2019. made warning against hard- more than 2.5 million barrels a garding Iranian oil exports have been tempered by rising a gallon. Led by Financials, S&P Benefits From Treasury Selloff

BY GUNJAN BANERJI other barometers of the U.S. under pressure Monday amid terest margins, which measure economy are unveiled this concerns that international ap- lending profitability. Top Gainers The S&P 500 rose Monday, week. petite for U.S. debt could Erik Ristuben, chief invest- Financial stocks lifted the S&P 500 on Monday as Treasury yields rose, driven by shares of financial Earnings have come in wane, after White House com- ment strategist at Russell In- pushing bond prices down. companies as investors above expectations, with 87% ments on monetary policy sent vestments, expects the market dumped government bonds, of companies posting stron- the dollar and government to continue its “grind higher” 3.5% pushing Treasury yields ger-than-expected profits and bond prices sliding last week. for the rest of the year. “The Performance, minute by minute higher. more than two-thirds beating Yields on 10-year U.S. Trea- market is trying to balance in- 3.0 MONDAY’S Stock inves- revenue expectations, accord- surys jumped to 2.963% from credible earnings with high MARKETS tors have been ing to FactSet. Profits are up 2.895% Friday afternoon, valuations,” he said. “The pat- 2.5 cautiously op- 21% from a year earlier, which marking the biggest one-day tern we’ve seen is two steps timistic in re- would mark the second-high- yield gain in more than a forward, one step back” for 2.0 cent days amid strong earn- est growth rate since the third month. Bond yields rise when the U.S. stock market. ings results and economic quarter of 2010, according to prices fall. The Stoxx Europe 600 1.5 data. More than one-third of the data provider’s research. That gave ammunition to slipped 0.2% Monday. Asian Northern Trust the companies in the S&P 500 The S&P 500 added 5.15 the financials sector in the markets were mixed Monday. 1.0 are scheduled to report results points, or 0.2%, to 2806.98, led S&P 500, which was the big- Japan’s Nikkei fell 1.3%, as a Wells Fargo JPMorgan Chase this week, and investors will by shares of financial and gest gainer, advancing 1.3%. jump in the yen helped push 0.5 be watching for signs that tar- technology companies. The Shares of Wells Fargo, JP- currency-sensitive shares iffs are affecting corporate de- Nasdaq Composite climbed Morgan Chase, Northern lower. Early Tuesday, the Nik- 0 cision making. 21.67 points, or 0.3%, to Trust and Bank of America kei was up 0.2%. The Shanghai 7841.87. The Dow Jones Indus- led the way. Bank stocks tend Composite rose 1.1% Monday Analysts will also scrutinize –0.5 economic data releases, as the trial Average shed 13.83 points, to benefit when Treasury and was up 1.3% early Tuesday. gross domestic product report or less than 0.1%, to 25044.29. yields rise because higher in- —Ben St. Clair 9:30 10 11 noon 1 2 3 4 for the second quarter and Treasury prices remained terest rates lift banks’ net in- contributed to this article. Source: FactSet THE WALL STREET JOURNAL. B12 | Tuesday, July 24, 2018 ** THE WALL STREET JOURNAL. MARKETS Investors Continue to Bet Against Gold Demand for safety is Prices have fallen this year, hitting The recent declines are associated ers began pulling money from a 52-week low on Thursday. with moves in other assets such as gold-backed exchange-traded crimped by a strong funds. Investors took more economy, rising the dollar. than $2 billion out of gold- Price WSJ Dollar Index backed ETFs in June, the larg- real rates and dollar est monthly outflow since July $1,375 a troy ounce Jan. 25 March 21 June 13 90 Recent high Fed raises rates Fed raises rates 2017, World Gold Council esti- BY AMRITH RAMKUMAR 88 mates show. Demand for AND BEN EISEN 86 American Eagle gold coins, a 1,350 84 proxy for physical demand, Investors are placing a re- has also been weak. cord number of bets that a 82 Adding to worries, analysts protracted slump in gold 1,325 80 say open interest in gold fu- prices will continue as the 2018 tures has been rising quickly metal is punished by a as prices have fallen. “This strengthening dollar and ris- suggests that short sellers are ing interest rates. 1,300 pressing their bets,” Sundial Hedge funds and other Gold also falls when inflation-adjusted Capital Research’s Jason Goep- speculative investors over the rates rise because interest-bearing fert wrote in a note to clients past five weeks have increased 1,275 March 1 assets look more attractive. last week. Typically, the oppo- their wagers that gold prices President Donald Trump site happens when gold prices will fall, pushing them to their proposes tariffs Yield on U.S. Treasury inflation-protected are bottoming out. highest level recorded during securities, a measure of real rates Not everyone is bearish on the week ended July 17, ac- 1,250 1.0% gold. GraniteShares Gold cording to Commodity Futures Trust, a low-cost gold ETF, Trading Commission data go- has taken in more than $250 ing back to 2006. 1,225 0.5 million this year. Futures on the precious “Longer-term holders of metal have fallen 10% from gold are not perturbed by these their January highs and are short-term things,” said Will 1,200 0 down 2.2% this month alone. Rhind, chief executive of Gran- Gold closed at its lowest level Jan. Feb. March April May June July 2018 iteShares. “If anything, they are in more than a year Thursday using it as an opportunity to at $1,222.40 a troy ounce and reset their positions in gold.” is still trading near that level. Speculative investors have pushed 150 thousand contracts With investors turning cautious, Some investors think gold Gold is often associated bearish bets to record levels as the money flowed out of gold-backed will rebound if the recent dollar with fearful investors whose rally reverses or real rates fall. distrust for the financial sys- price declines have accelerated. exchange-traded funds last month. Prices climbed Friday on the tem leads them to store value Bearish contracts, weekly 100 Flows into and out of gold-backed ETFs dollar’s worst day in nearly four in physical assets like the $3 billion months, after President Donald metal. Analysts say steady eco- 2 Trump said he wasn’t happy nomic performance in the U.S. 1 about the Fed’s recent interest- 50 has crimped that haven de- 0 rate increases. He lashed out at mand, despite simmering trade China, the European Union and –1 tensions, with some expecting others, saying they manipulate –2 second-quarter growth to come their currencies. in at its highest in nearly four 0 –3 Some gold bugs also think a years when the Commerce De- Jan. Feb. March April May June July 2017 2018 trade war or other unforeseen partment releases data Friday. Sources: WSJ Market Data Group (gold price, dollar index); Commodity Futures Trading Commission (contracts); Thomson Reuters event could drive a selloff in Gold’s price has largely de- (inflation-adjusted rates); World Gold Council (fund flows) THE WALL STREET JOURNAL. risky markets, prompting de- pended on other markets in mand for the safety of gold. the U.S., where economic asset, which is priced in the rates are up, interest-bearing economy from overheating. so far the climb in inflation has But for the moment, traders growth is picking up faster U.S. currency. The WSJ Dollar assets look more attractive “The main question I get is, been outmatched by rising nom- say the outlook for gold prices than growth in other regions. Index, which tracks the green- than gold, which doesn’t offer ‘Why is gold not going higher inal rates, a factor pushing real is looking a bit tarnished. A rise in the dollar has been back against a basket of 16 any income. on trade threats?’ The big rea- yields higher. Gold has fallen “It looks like it wants to go a catalyst for gold’s slump. others, has climbed to its high- The negative backdrop has son is because of the Fed,” said even after U.S. data earlier even further lower—I wouldn’t Like many commodities, gold est level in more than a year. analysts wondering how much Bob Haberkorn, senior market this month showed consumer be surprised if it did,” Mr. tends to get hit when the Additionally, gold tends to further gold prices will fall, strategist at RJO Futures. prices at their highest annual Haberkorn of RJO Futures greenback is up because it be- fall when inflation-adjusted with the Federal Reserve ex- Some analysts had expected rate in more than six years. said. “You could say it’s over- comes more expensive for rates are rising, as they gener- pected to continue gradually increased inflation to spook in- As speculative investors sold, but things can remain overseas investors to buy the ally have this year. When real boosting rates to keep the vestors and support gold, but turned bearish, money manag- oversold for quite some time.” HEARD ON THE STREET Email: [email protected] FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard Tesla Asks for Its Money Back Strong Google Results Elon Musk is asking for investors that the company Soothe Cost Worries donations to save Tesla Inc. Bumpy Ride hasn’t simply raised fresh The Wall Street Journal Tesla’s share price capital to patch its funding A company of Google’s the revenue generated by the reported Sunday that Tesla gaps. While Mr. Musk has re- size and scale rarely gets the company’s website traffic. $325 asked some suppliers to re- peatedly said Tesla doesn’t benefit of a low bar. That is down slightly from fund a portion of what Tesla need to raise capital, Yet, given the rather 13.2% in the previous quarter 320 paid them. One supply man- Moody’s Investors Service downbeat news flow around and is the first sequential ager quoted the auto maker warned that it needed to the internet giant lately, decline for this important 315 as saying the refunds are raise $2 billion in the “near strong second-quarter re- measure in three years. “essential to Tesla’s contin- 310 term” back in March when it sults reported Monday after- Looking ahead, CFO Ruth Po- ued operation.” The person downgraded Tesla’s credit noon by parent company Al- rat says these costs will con- said Tesla asked for a mean- 305 rating. Issuing fresh debt phabet Inc. were met with tinue to grow at a “more ingful amount of the money seems unlikely, since the sighs of relief. Total revenue moderate pace.” it has received from Tesla 300 bonds Tesla issued last Au- grew 25% year over year to That may seem a small since 2016, the year Tesla un- gust are quoted at about 90 $32.7 billion while advertis- improvement, but worries veiled its Model 3 sedan. 295 In five-minute intervals cents on the dollar. ing revenue rose 24% to $28 about those costs and politi- Tesla shareholders, usu- Meanwhile, the stock still billion, both beating Wall cal crackdowns have ally not the type to worry, Tuesday Wednesday Thursday Friday Monday trades near $300 a share, Street’s projections. weighed down Alphabet’s sent the stock down more Source: SIX THE WALL STREET JOURNAL. above where Tesla last is- Per-share earnings, ex- stock price this year. than 3% Monday. sued stock in the winter of cluding the $5 billion fine The shares had been up That selloff understates would be modest and more $2.6 billion at the end of the 2017. That Tesla hasn’t taken levied by the European by just 15% for the year the concern that investors of a goodwill gesture than first quarter, compared with advantage of its high stock Union last week, jumped 32% ahead of the report. That should have. Even if suppli- something that would mean- $2 billion a year earlier. Net price, even with such glaring year over year to $11.75, well was well below the 23% gain ers agreed to pay back Tesla, ingfully help the car maker. working capital, a handy way cash needs, looks more curi- ahead of the $9.66 per share notched by the Nasdaq Inter- a dubious assumption, most Suppliers, who once were to measure liquidity, fell to ous with each passing day. expected by analysts. The re- net Index and lagged behind don’t have any extra cash sit- eager to work for Tesla, may minus-$2.27 billion in March; And with the stock trading sults were enough to give peers such as Amazon.com, ting around. The automotive not be in a mood to help. a year ago, that figure was at about 130 times FactSet’s the stock an after-hours lift Microsoft and even Face- supply chain is a ferociously Tesla has been slowing its $780 million. Tesla could be projection of 2019 earnings, of nearly 4%. book, whose shareholders competitive, low-margin in- payments to these companies asking for refunds of sums it there isn’t much breathing Another encouraging de- have been quick to forgive dustry. Suppliers have ven- over the past two years in an owes but hasn’t paid yet. room if Tesla’s suppliers velopment came in the dis- that company’s more serious dors of their own, and any apparent effort to save cash. Tesla’s maneuver should don’t grant Mr. Musk his tribution traffic acquisition consumer-privacy lapses. cash they give back to Tesla Accounts payable totaled raise further concern among wish. —Charley Grant costs, or TAC, that Google Google’s regulatory chal- pays to partners in order to lenges are far from over, but drive traffic to its own sites. the company has shown that The outlay for distribution it can keep its business click- China’s Debt Market Deserves Caution TAC totaled $3 billion for the ing. second quarter, or 12.9% of —Dan Gallagher

Chinese domestic bonds Beijing is trying to normalize the interest. may arguably once have been Deep Bond the market by allowing more As long as foreign buying OVERHEARD the world’s biggest market Foreign holdings of Chinese to occur, it risks a destabiliz- remains focused on govern- that no one paid attention to. government bonds ing panic. The rise in corpo- ment bonds, or those of No longer. Mounting defaults rate-bond yields suggests quasi-sovereigns like big Chi- Cuttingbackontheavo- age 36. 1.0 trillion yuan and steepening yields have there is more pain to come. nese policy banks, there cado toast might not be According to a retirement raised doubts about the $12 0.8 As of the end of March, Chi- should be few alarms. More enough. calculator by NerdWallet, that trillion market’s health, just 0.6 nese companies needed to care is needed when it comes A survey of 1,519 millennials will require millennials to save as China’s economy shows 0.4 refinance nearly $300 billion to corporate bonds, or the between the ages of 21 and 37 some 47% of their income an- signs of faltering. Foreign in- 0.2 of bonds this year, 70% of safe-sounding but often pre- conducted by retail brokerage nually at an assumed annual vestors have been piling in all which have low ratings, ac- carious bonds issued by local firm TD Ameritrade shows that return of 7%. 0 the same this year. Are they cording to Moody’s. government financing vehi- more than half expect to be a If they do that, then they headed for a rude awakening? 2016 ’17 ’18 The current rise in foreign cles. International ratings millionaire at some point. The can kill two birds with one Stress is rising, for sure: Note: 1 billion yuan=$147.7 million interest might, then, seem firms still can’t operate inde- median age at which respon- stone, though barely, by check- Chinese companies have de- Source: Wind Info surprising. Overseas inves- pendently in China, while lo- dents expect to retire is 56. ing being a millionaire off their faulted on $2.9 billion of tors poured a net $45 billion cal ratings remain untrust- That not only is rather am- list, too. bonds this year, almost as Even so, the slew of nega- into Chinese government worthy, with 90% of issuers bitious but doesn’t jibe with But they will have to blow much as in all of 2017, ac- tive headlines illustrates the bonds in the first half, ac- rated at AA or above. other responses or data. away the older generation. cording to Wind Info data. tricky situation Chinese reg- cording to Wind Info. These Entering relatively un- For example, the median The actual median retirement That translates into a default ulators face. The govern- bonds’ inclusion in the charted territory in global age at which millennials expect savings of Americans aged rate under 1%, still comfort- ment’s past penchant for Bloomberg Barclays Global markets is exciting. In the to pay off their student loans 56 to 61 is about $17,000, ably below the roughly 2% propping up indebted compa- Aggregate Index, one of the case of Chinese bonds, it will is 31, while they expect to be- and they retire on average at annual rate typical in devel- nies meant bond defaults world’s three major bond in- pay for investors to do their gin saving for retirement at age 63. oped economies. used to be rare. Now that dexes, is a key reason fueling homework. —Andrew Peaple