Wallstreetjournaleurope 20170613 The Wall Street Journal Europe
Wallstreetjournaleurope 20170613 The Wall Street Journal Europe
Wallstreetjournaleurope 20170613 The Wall Street Journal Europe
U.K.s May
report on the ride-hailing
firms workplace culture. B1 Hundreds Detained in Protests Across Russia
French and Italian bonds
rose in value and the British
pound fell, reflecting inves-
tors views of politics affect-
Vows to
ing the three countries. B1
Trump was set to urge Fix Mess
From Vote
limits on the U.S. consumer-
finance regulator and a re-
assessment of banking rules
in a Treasury report. B7
BY JENNY GROSS
Cybersecurity experts AND JASON DOUGLAS
said they found the malware
that knocked out electricity LONDONPrime Minister
in Ukraine and warned U.S. Theresa May addressed Con-
companies of the risk. B4 servative lawmakers for the
first time since last weeks
Facebook is building a
election and sought to con-
feature to let users sub-
vince them that she would
scribe to publishers directly
take the party out of the
from the mobile app. B4
mess she created, after a
ALEXANDER ZEMLIANICHENKO/ASSOCIATED PRESS
WORLD NEWS
What the U.K. Election Means in America to exit from the European from just 12 months ago, voters. Democrats, in turn, in stark contrast to the find- Party establishment, and
Union, even the downsides of when young voters failure to will be heartenedthough ings among voters aged 50 to some actually would prefer
the prime ministers attach- show up in such numbers the story also carries cau- 64, where Trump approval breaking out on their own.
ment to the American presi- was a significant factor in tionary notes for them. essentially matched disap- The divide was on full dis-
dentall were factors. the vote in favor of Brexit, The election of Republican proval, and with voters aged play over the weekend, when
But the decisive one may the departure from the EU. President Donald Trump 65 and above, where approval Mr. Sanders told a boisterous
have been a surge of support For many of Corbyns sup- brought about in part be- slightly topped disapproval. rally in Chicago: The cur-
for the opposition Labour porters, this was the anti- cause young voters under- Moreover, there are signs rent model and the current
CAPITAL JOURNAL Party among young voters. A Brexit election, writes Rich- performed in key areas for that this Trump disapproval strategy of the Democratic
By Gerald F. Seib postelection analysis by the ard V. Reeves of the Brookings is spilling over into the Re- Party is an absolute failure.
Financial Times found that Institution in his postelection publican Party more broadly.
Support for Labour
B
young voters backed Labour analysis. Older voters voted The Pew Research Center ut therein also lies a
A
s Britains Conserva- over the Conservatives by 51 overwhelmingly to leave the tracked the party affiliation of warning for Demo-
tives sift through the points more than the na- EU, while many pro-European hints at promise, but voters from December 2015 crats. The surge in ac-
rubble of their elec-
toral disaster last week, a
tional average. By contrast,
voters over the age of 65
youngsters stayed home. This
time, they turned out. Seats
also risks, for through March of this year,
and found that 23% of voters
tivism by young voters is
fueled not merely by anti-
question with compelling backed the Conservatives by with high numbers of young American Democrats. aged 18 through 29 who origi- Trump sentiment but by a
relevance in Washington 32 points more than the na- voters, including many college nally identified as Republi- drive to push the party to
now arises: tional average. towns, swung strongly to- cans or leaned Republican had the left. That almost cer-
Young voters upended the That is a stunning genera- wards Labour. defected to the Democrats. tainly isnt a formula for
status quo in Britain. Could tion gapand a far wider Indeed, an exit poll by Democrat Hillary Clinton Anecdotal evidence shows picking off some swing con-
they do it in the U.S.? one than seen just a few NME, a music-news organi- has prompted a surge of this move toward the Demo- gressional districts within
Multiple years ago. Over the course zation, indicated that turn- anti-Trump sentiment crats is accompanied by their grasp, such as the one
forces were at of seven years, the partisan out among those aged 18 among young voters, as well stronger activism among to be filled in a special elec-
work, of age gap has rocked from 14 through 24 rose 12 percent- as a rise in activism. young voters. State and local tion for an open House seat
course, in the points to 83, the Financial age points over the last gen- meetings of both the Demo- in Georgia on June 20.
I
stunning out- Times wrote. eral election two years ago. n the most recent Wall cratic Party and Our Revolu- In such districts, the key
come of the Those young voters pro- Two-thirds of those young Street Journal/NBC News tion, the organization for Democrats is winning
British elec- pelled Labour leader Jeremy voters went for Labour. poll, just 26% of those formed to absorb last years over centrists who may lean
tion, which cost Prime Minis- Corbyn, the trans-Atlantic Such findings are cause aged 18 through 34 said they Sanders supporters, are Republican but are turned
ter Theresa May and her Con- version of Sen. Bernie Sand- for concern for Americas approved of the job Mr. filled with boisterous young off by Mr. Trump. As that
servative Party their majority ers, to his unexpectedly own conservative party, the Trump is doing, while 64% activists of the left. suggests, young-voter fervor
in Parliament. An uninspiring strong challenge to Mrs. Republicans, who face signs said they disapproved. That Significant parts of that is a good thing for Demo-
campaign, terrorism, second May. This all represented a they could be confronting a 38-point gap between ap- youth movement have little crats overallbut not neces-
thoughts about the decision considerable turnaround similar wave among young proval and disapproval stands to no use for the Democratic sarily everywhere.
buying and selling portfolios of for GE Capital in 1997 in Latin GE directors made their fi- Advertising through Dow Jones Advertising
CORRECTIONS
undervalued assets. The Whar- America and moved to Asia in nal decision about Mr. Flan- Sales: Hong Kong: 852-2831 2504; Singapore:
65-6415 4300; Tokyo: 81-3 6269-2701;
ton M.B.A. made his mark lead- John Flannery in September 2005. He took a risk in 2009 by nery during a regularly sched- Frankfurt: 49 69 29725390; London: 44 207
ing the $17 billion acquisition of
Alstom SAs power business, One of four internal contend-
moving to India where he ran the
companys first separate profit-
uled board meeting Friday at
its Boston headquarters, ac-
AMPLIFICATIONS 842 9600; Paris: 33 1 40 17 17 01;
New York: 1-212-659-2176
Printers: France: POP La Courneuve; Germany:
the biggest industrial acquisi- ers to succeed Jeff Immelt for and-loss statement for a country. cording to another person fa- Dogan Media Group/Hrriyet A.S. Branch; Italy:
tion in the companys history. the top job, Mr. Flannery became After leaving India, he joined miliar with the matter. Trian Qualiprinters s.r.l.; United Kingdom: Newsprinters
(Broxbourne) Limited, Great Cambridge Road,
Despite his financial back- the boards final pick based on GEs corporate headquarters had zero impact on the pro- In the June/July WSJ. Waltham Cross, EN8 8DY
ground and long tenure at GE, his broad GE experience and in- team in 2013 where he ran cess, this person said. Magazine article about Gibbs Registered as a newspaper at the Post Office.
Mr. Flannery has shown a will- clusive leadership style, said an- mergers and acquisitions. On The three runners-up Farm, one of the farms Brah- Trademarks appearing herein are used under
license from Dow Jones & Co.
ingness to break ranks. other person familiar with the Mr. Flannerys watch as head of didnt know they didnt get it man cattle is pictured next 2017 Dow Jones & Company. All rights reserved.
Editeur responsable: Thorold Barker M-17936-
At GEs annual management matter. Directors took their final GEs mergers and acquisitions until after Fridays board meet- to Bernar Venets 88.5 ARC 2003. Registered address: Avenue de Cortenbergh
retreat in Boca Raton, Fla., vote at a regular board meeting team, he led the spinoff of its ing ended, this person added. x 8 sculpture. The photo 60/4F, 1040 Brussels, Belgium
where the top leaders of the held Friday at GEs headquarters, consumer credit business, Syn- We feel good about how caption incorrectly said it NEED ASSISTANCE WITH
company meet and discuss the this person said. chrony Financial. we prepared for this transi- was a yak. YOUR SUBSCRIPTION?
business, Mr. Flannery stunned Mr. Flannery was born in Al- Joann S. Lublin tion, Mr. Immelt said on a By web: http://services.wsje.com
Readers can alert The Wall Street By email: subs.wsje@dowjones.com
the crowd by abandoning the exandria, Va., and lived there and Kate Linebaugh conference call Monday, add- Journal to any errors in news articles By phone: +44(0)20 3426 1313
ing the company didnt plan to by emailing wsjcontact@wsj.com.
THE WALL STREET JOURNAL. Tuesday, June 13, 2017 | A3
WORLD NEWS
Police Detain Hundreds in Russia Protest
Kremlin critic and rally which uses the internet to
appeal to young voters, said
organizer Alexei electricity at their office was
Navalny is held near cut and their streaming video
stopped, before they moved
entrance to his home to a backup that worked.
Authorities had warned
BY JAMES MARSON that people carrying placards
or who appeared to be pro-
MOSCOWPolice on Mon- testing would be arrested.
day detained hundreds of an- But thousands, many of them
ticorruption protesters across in their late teens and twen-
Russia, including opposition ties, still came to Tverskaya
leader Alexei Navalny, who is Street in Moscow, where they
hoping to harness a surprise swarmed around metal detec-
surge in rallies against the tors that police had set up for
Kremlin to challenge Presi- Russia Day celebrations.
dent Vladimir Putin in elec- People re-enacting events
tions next year. from Russias history, includ-
The protests in cities ing men in metal helmets and
across Russiafrom Vladi- chain mail wielding wooden
vostok in the east to Norilsk shields, mixed with crowds
in the Arcticwere the first shouting, Were in charge!
since the largest anti-Kremlin and Putins a thief! Police
demonstrations in five years tried to hold protesters back
in March. at certain points, beating
Riot police in Moscow some with batons and drag-
dragged protesters out of a ging others from the crowd
crowd carrying Russian flags to waiting police vans.
and shouting Russia without The geographical spread of
Putin! in chaotic scenes on the protests, including cities
one of the capitals main in Russias far east, Siberia
streets, as the unsanctioned and Arctic north, represents
protest mixed with official rare progress for the opposi-
MAXIM SHEMETOV/REUTERS
celebrations of Russia Day. tion movement in tapping
More than 100 people were discontent outside Moscow
detained in both Moscow and and St. Petersburg.
St. Petersburg, according to Numbers varied from city
monitor group OVD-Info. to city from dozens to hun-
Mr. Navalny, a 41-year-old dreds to thousands. Russian
anticorruption blogger, has state television largely ig-
energized Russias weak and Riot police detain a man during an anticorruption protest organized by opposition leader Alexei Navalny in central Moscow. nored the demonstrations, in-
divided opposition with videos stead covering official events
and blog posts that expose which he calls politically mo- said in a message on his panies into not providing will face misdemeanor including sports competitions,
what he calls egregious exam- tivated, may prevent him Twitter. equipment for a stage at the charges for calling for the musical performances and the
ples of corruption at the top from running, and opinion Mr. Navalny had received agreed venue. protest and disobeying a po- unfurling of a huge Russian
levels of the Russian state. polls show overwhelming permission to stage a rally in The General Prosecutors lice officers order, police told flag by service members from
He has spread his cam- support for 17-year Kremlin Moscow, but he said Sunday Office said that a protest in Interfax news agency, which the Ministry of Emergency
paign for the presidency to incumbent Mr. Putin. he was switching the venue the new location would be il- could land him a fine and 15 Situations and children in red
cities across Russia in recent Police detained Mr. Na- to the capitals main drag legal, and warned that police days in jail. berets from a government-
months, even though a con- valny on Monday near the en- near the Kremlin, blaming au- would take measures to pre- Members of Mr. Navalnys backed youth military group
viction for embezzlement, trance to his home, his wife thorities for pressuring com- vent disorder. Mr. Navalny Anti-Corruption Foundation, called Yunarmiya.
shortage of vaccine. fectious virus that primarily form of the vaccine is in because the WHO will declare
Rotary International, the affects young children and short supply, forcing health eradication only three years
Bill & Melinda Gates Founda- can cause paralysis. There is officials to prioritize who after the last case. If we
tion and the Canadian govern- reason to hope the latest goal gets it. And future funding dont get some big increase
ment are among several do- can be met, because there from the U.S. government, a in instability in those coun-
nors who are pledging $790 have been only five cases of major contributor, is uncer- tries, we have a very good
million Monday to vaccinate polio in Pakistan and Afghan- tain as Congress must now chance that this would be the
millions of children, conduct istan this year, two countries weigh sharp cuts to foreign last year of cases, Bill Gates,
surveillance for the virus and where transmission of polio aid proposed by the Trump the billionaire philanthropist
other needs until 2020the has never been stopped. Vac- administration. and Gates Foundation co-
year in which health leaders cination campaigns have im- 2020 is feasible, but its chair, said in an interview.
hope to declare that polio has proved, reaching children in probably a best-case sce- Still, he said, were still
been eradicated. The pledges communities hard to access nario, John Hewko, general very worried about Nigeria and
were to be made at a Rotary before. secretary of Rotary Interna- very worried about Syria. A child is given the polio vaccine in Karachi, Pakistan, in May.
International convention in But some areas controlled tional, said in an interview. The most sensitive test for
Atlanta. by insurgent groups are still Rotary, which works through whether polio is circulating ing a lot of positive sewage well this year in order to stay
The Global Polio Eradica- hard to reach. Polio resur- its members in countries on isnt illnesses, but presence samples in various parts of on track, Mr. Gates said. if
tion Initiative, which includes faced in Nigeria last year, af- programs to vaccinate chil- of the virus in sewage sam- Pakistan, he said. we have cases in 2018, then
Rotary, the Gates Foundation ter the World Health Organi- dren and conduct surveillance ples, he said. Were still see- Weve got to execute very we miss 2020.
WORLD NEWS
TOBY MELVILLE/REUTERS
move to a consensus within steinall joined the EUs sin-
the country aboutwhat we gle market. Switzerland didnt,
seek to achieve as we leave. though it has some benefits
Yet for Mrs. May, there are and obligations of the single
no easy alternatives. Whether market through bilateral deals
she seeks to maintain closer with the EU.
economic ties with the EU or British Prime Minister Theresa May leaving 10 Downing Street on Friday to ask the Queens permission to form a government. Mrs. May could also drop a
simply drops her threat that stance she repeated before the
no deal is better than a bad poses zero tariffs on trade freedom of movement of EU based consultancy. Nor- landwhich is a specific election, that No deal is bet-
deal, there are risks involved. among EU members and a citizens into the U.K. and con- waypays into the EU budget pledge of the Northern Irish ter than a bad deal, which
For now at least, Mrs. May common set of tariffs on im- tinuing large budget payments amounts that would basically Democratic Unionist Party would signal a commitment to
is suggesting her pre-election ports from nonmembersal- to the EU. be the same were it a full EU that looks set to enter an some kind of agreement dur-
Brexit plans are unchanged. though she has said she is It would also continue to member. agreement to prop up a minor- ing the two-year Brexit talks.
She says her government is open to a future U.K.-EU cus- give EU courts a key role in Another alternative would ity Conservative government. There is also one other op-
ready to start negotiations toms-union arrangement. She shaping British rules. In other be to leave the single market If Britain is in the customs tion Britain could push: nego-
with the EU team next week as also wants an end to the juris- words, Britain would have to but seek customs-union mem- union, major customs checks tiating a long transitional
planned, although no date was diction of EU courts over Brit- accept some of the least at- bership. That would ensure on the border with the Repub- agreement with the EU which
agreed during discussions in ish laws and regulations. tractive parts of EU member- Britain retained the benefits of lic of Ireland wont be needed. allowed one of these alterna-
Brussels on Monday. In the short-term, the least ship while surrendering any the EUs 38 regional and bilat- But staying in the customs tive models to stand for a
Her plan is for Britain to economically disruptive alter- influence over the blocs direc- eral trade deals and nullify union would thwart perhaps number of years before Britain
leave the EUs single market of native would be to remain in tion. one of the biggest risks from the strongest economic argu- fully exited.
goods and services, a zone of the single market either inside Make no mistake, the Nor- Brexitthe imposition of EU ment used by Brexiteers: It That looks difficult. EU offi-
common regulation that al- the customs union or, like Nor- way option is not going to be tariffs and onerous customs would prevent Britain from cials and lawmakers have said
lows a British company to op- way, outside it. an easy sell to euroskeptics, checks on U.K. imports and ex- being able to negotiate and any transitional deal should be
erate and sell its products The Norway model has de- and has never been seen by ports to the EU. sign its own trade deals. The short-lived, no more than
across the bloc. livered strong economic bene- Brussels as a credible model It would also help resolve U.K. would have to continue to three years, according to the
Mrs. May has also pledged fits, yet it would require Brit- for the U.K., said Mujtaba one of the thorniest issues apply the common external European Parliament.
to take the U.K. out of the EUs ain doing two things Mrs. May Rahman, Europe director with sparked by Brexit: how to tariff and rely on Brussels to Jason Douglas in London
customs unionwhich im- has ruled out: maintaining Eurasia Group, a London- avoid a hard border in Ire- negotiate new trade deals. EU contributed to this article.
geon said supporters of a clear market membership would be party and an entrenched men-
break with the EU have been interpreted as not respecting ace to the Europe Union.
left dead in the water in the the result of that referen- President Emmanuel Ma-
wake of the election result. dum, referring to last years crons fledgling party, La R-
Ruth Davidson, the leader of Brexit vote. publique en Marche, trounced
the Scottish Conservative Their stance aligns with the mainstream parties across the
party, said she wanted to put partys election platform, political spectrum but forced
economic advancement at the which said a Labour govern- the once-buoyant antiestab-
heart of any Brexit deal. ment would seek to preserve lishment National Front in
Mrs. Mays team continued the benefits of single-market particular into a reckoning.
to seek an agreement with a membership and the EUs cus- Ms. Le Pen on Monday faced a
small Northern Irish party, the toms union, while ending free final election result that
Democratic Unionist Party, movement of people. It showed the momentum that
which it is hoping it can rely pledged to build a close coop- had carried her in to last
on to pass legislation through erative future relationship months second-round presi- National Front leader Marine Le Pen voting in Henin-Beaumont, the district she seeks to represent.
Parliament. with the EU, not as members dential vote had perished.
The DUP is likely to demand but as partners. National Front candidates trast to the National Fronts congress after the parliamen- in the National Assembly,
concessions in exchange for its Yet some in the party have garnered only 13.2% of Sun- high expectations going into tary elections to discuss the winning 34.65% of the first-
support, including guarantees left the door open to a less days vote, compared with the 2017 races. In recent National Fronts anti-euro round vote in a southern
that Brexit wont disrupt trade clear break. Barry Gardiner, 13.6% in the last parliamen- years, the party had drawn stance, which many of the French district.
between Northern Ireland and trade spokesman and one of a tary election five years ago. nearly a third of the vote in rank-and-file blamed for her The National Front candi-
Ireland, an EU member. three-person team driving La- Pollster Ipsos Sopra-Steria local, regional and European presidential loss. date now running for her
Kathrin Muehlbronner, se- bours Brexit policy, said on projected the party would end Parliament elections. All voters have is disap- seat, Herv de Lpinau, won
nior vice president of Moodys, Monday that some kind of up with between one and five This clearly marks a pause pointment from the presiden- 31.81% of the vote on Sunday
said in a research note that reformed membership of seats in the 577-seat National in a very, very strong pro- tial election, and all they hear behind the La Rpublique en
the Conservative Partys re- the single market and cus- Assembly, compared with be- gression, Ms. Le Pen said about is internal difficulties, Marche candidate.
duced share of parliamentary toms union was another pos- tween 415 and 455 for Mr. Monday while campaigning said Jrme Fourquet, a poll- The partys best shot for
seats may mean there is a sibility, though it isnt clear if Macrons party and its cen- for a seat in the north of ster with IFOP. landing a parliamentary seat
higher likelihood that Brexit such an offer would even be trist ally. France. Mr. Fourquet and other an- is in Pas de Calais, an area
will involve compromises that on the table. What caused the collapse, Supporters who expected alysts say Ms. Le Pen is likely hard-hit by migrant flows and
Mrs. May wouldnt have ear- Uncertainty over the direc- pollsters and party officials Ms. Le Pen to win the first to retain leadership of the Na- industrial decline, where Ms.
lier considered. tion of Brexit weighed on busi- say, is that the National round of the presidential race tional Front, because the Le Pen herself is running.
This could potentially in- ness leaders. The U.K.s Insti- Fronts primarily young, work- were disappointed when she partys identity is built around Ms. Le Pen scored 46.02%
clude a request to remain in- tute of Directors said it ing-class base decided to sit finished behind Mr. Macron. her family. They say the only on Sunday, nearly 30 points
side the EU single market or quizzed 700 executives and out the parliamentary races. Her 33.9% score in the runoff figure who might have chal- ahead of her La Rpublique en
the customs union, Mrs. Mue- found a sharp deterioration in Around 57% of people who also fell far short of the 40% lenged her for leadership was Marche rival, Anne Roquet.
hlbronner said. confidence about the U.K. voted for Marine Le Pen in the she was hitting in the polls. her niece, Marion Marchal Le But she and other National
She also said she expected economys prospects following presidential election stayed What followed was soul- Pen, who quit the party Front candidates face the same
the election outcome to delay the election result. The insti- home for the parliamentary searching. Ms. Le Pen floated shortly after the presidential hurdle she tripped over in the
the start of negotiations or tute said 57% of respondents ballot, Ipsos Sopra-Steria said. the possibility of renaming loss, saying she wanted to presidential race: Those who
lead to a period where no sub- were pessimistic about the The abstention rate among and restructuring her party spend time with family. voted for other candidates in
stantive issues are discussed. economy, compared with 37% Macron voters was 38%. before deserting the idea. She In 2012, Ms. Marchal Le the first round are expected to
Like the Conservative Party, before the vote. The numbers stand in con- also promised to hold a party Pen won the partys only seat coalesce behind her rival.
WORLD WATCH
AFGHANISTAN fire after coming under attack PAKISTAN Muhammad and his wives.
but said it hadnt officially heard The verdict comes amid a
U.S. Soldiers Said of civilian casualties. Man on Death Row crackdown on blasphemous
To Kill Three Civilians The violence follows a diffi- To Fight Insult Charge comments on social media.
cult past few days for the U.S. Authorities launched the
U.S. soldiers allegedly killed and Afghan partnership. In the A man sentenced to death by campaign earlier this year, citing
three Afghan civilians after com- south of the country, a U.S. air- a Pakistani court on charges of public anger. Blasphemy is a
ing under fire in eastern Nangar- strike accidentally killed several committing blasphemy on Face- highly sensitive issue in Muslim-
har province, local officials said, Afghan policemen on Friday. A book plans to appeal the convic- majority Pakistan, where even
in the latest violence threatening day later, an Afghan commando tion, his lawyer said, the first an allegation of an insult to Is-
PETER NICHOLLS/REUTERS
to fuel anger with the govern- killed three U.S. soldiers during such punishment in Pakistan for lam can lead to violence.
ment and its foreign allies. an elite operation in the east. blasphemy on social media. Mr. Razas lawyer, Fida Hus-
The civilians were shot dead So-called insider attacks are A court in the central city of sain Rana, said his client, a Shi-
in Ghani Khel district on Sunday, frequent in Afghanistan, but Bahawalpur on Saturday sen- ite Muslim, was targeted after
according to the provincial gov- very rare among special opera- tenced Taimoor Raza, 30 years he had an argument about a
ernors spokesman, Attaullah tion troops. old, to death, after finding him sectarian matter with two Sunni
Khogyany. The U.S. military con- Jessica Donati guilty of insulting figures revered Muslims on Facebook.
A pro-Brexit backer celebrated the invoking of Article 50 in March. firmed its forces had returned and Ehsanullah Amiri in Islam, including the Prophet Qasim Nauman
THE WALL STREET JOURNAL. Tuesday, June 13, 2017 | A5
WORLD NEWS
Indian Businesses
Face Taxing Changes
BY CORINNE ABRAMS
AND DEBIPRASAD NAYAK Digging Deeper
Crackdown aim at the countrys internet regulating internet content, If sustained, the crackdown
ALY SONG/REUTERS
censors for not pushing a and had been in the works for on entertainment news would
party-line agenda, saying they months. Analysts say the Cy- mark a dramatic reorientation
Protests against Chinese were irresolute in imple- berspace Administration was of Chinas censorship machin-
property controls have grown menting the policies of Presi- likely aware of its findings be- ery, which has previously ig-
in intensity in recent weeks, dent Xi Jinping and not try- fore taking action last week to nored entertainment while
underscoring the challenge for Newer apartment buildings towered over an older structure in ing hard enough to ensure shut down at least 90 social- grinding away at independent
the government in preventing Shanghais Guangfuli neighborhood in April 2016. political security. media accounts run by celeb- news reporting and expres-
public eruptions of anger as it The rebuke, published on rity news and gossip sites. sions of political dissent.
cracks down on housing spec- Snapshots of the Shanghai 580,000 yuan (about $85,000) Sunday by the Central Com- Among the closed sites was Weibo, which hosted sev-
ulation. protest quickly whirled for her apartment and took mission for Discipline Inspec- the Weibo social-media ac- eral of the closed accounts, is
through mobile-messaging app out a mortgage for the rest. tion, may shed light on cen- count of Chinas self-pro- a vivid example. The platform
By Dominique Fong in WeChat, showing scenes of Now, she feels trapped, she sors surprise shuttering last claimed No. 1 Paparazzo, was left for dead by many ana-
Beijing and James T. protesters clashing with police said: Im really angry. week of dozens of Chinese ce- Zhou Wei, who had amassed lysts after a crackdown in
Areddy in Shanghai and some being dragged away. Shanghais government had lebrity news and gossip sites more than 7 million followers 2013 silenced influential users
So far, no Shanghai leader no official response to Satur- an area previously considered by publishing salacious stories seen as critical of the govern-
In response to skyrocketing has come out to speak to us, days protest. In a statement safe from government scrutiny. about Chinese celebrities. ment, but it revived itself with
home prices, governments in said Li Pinger, a 40-year-old IT released late Monday, a lo- The commissions new re- In meetings last week, au- a focus on entertainment and
Chinas big cities have set lim- contractor at a university who cal housing bureau sug- port, taken together with last thorities told the countrys top is now bigger than Twitter
its on the buying of multiple took part in Saturdays protest. gested a softening of policies weeks action, is also another web portals, video-streaming with 340 million active users.
homes and higher down-pay- Ms. Li said she has been un- applied to developers and buy- sign that the Communist Party sites and social-media plat- Weibo didnt immediately
ment ratios, which has left able to move into an apartment ers, though it stopped short of under Mr. Xi is moving to re- forms that the accounts were respond to a request for com-
many unable to sell their she bought last year at a hotel explicitly saying commercially claim ideological authority it being shut down to comply ment.
homes and others worried project in Shanghais Qingpu zoned units could be permit- surrendered after Mao Ze- with privacy protections in the Squeezing celebrity gossip
they wont be able to buy in District after the Shanghai gov- ted for use as residences. dongs death, analysts said. countrys new cybersecurity and entertainment news
before prices rise further. ernment in May banned the Beijings housing authority The old Communist ideol- law, the Cyberspace Adminis- threatens to deprive the gov-
Protests over the new rules sale of apartments built on said in late May that it would ogy is coming back, said Qiao trations Beijing and Guang- ernment of a useful diversion
started in early May. In the land for commercial or office allow apartments that were Mu, a Beijing-based media zhou branches said. at a time of slowing economic
latest and largest breakout, use and directed developers to bought before March 26 to be scholar and prominent critic of The regulators also encour- growth and increasing social
hundreds of people marched convert thousands of units listed and sold, an apparent government censorship. Com- aged the platforms to do more anxiety, media scholars said.
down a busy Shanghai shop- back to fit those purposes. loosening of the previous blan- munism doesnt like entertain- to promote the spread of core Wayne Ma and Lilian Lin
ping street this weekend. Ms. Li put up half of the ket ban on the sale of them. ment and gossip; it wants poli- socialist values online. contributed to this article.
A6 | Tuesday, June 13, 2017 THE WALL STREET JOURNAL.
U.S. NEWS
Travel Ban Suffers Another Legal Setback
Appeals court rules week the Republican presi-
dent called for a travel ban
Trump exceeded his that is broader than the cur-
powers; White House rent executive order he
signed. The order, signed
says order is lawful March 6, temporarily bars
U.S. entry for people from
BY BRENT KENDALL Iran, Libya, Somalia, Sudan,
Syria and Yemen. It is a
A second federal appeals scaled-back version of a more
court blocked President Don- ambitious effort that Mr.
ald Trump on Monday from Trump pursued in January
enforcing an executive order and dropped after courts is-
that temporarily banned U.S. sued rulings halting its imple-
travel for people from six mentation.
Muslim-majority countries, The revised restrictions
dealing another legal blow to have also fared poorly in
the White House. court, as judges have agreed
The Ninth U.S. Circuit with challengers that Mr.
Court of Appeals in San Fran- Trumps past statements
cisco ruled that Mr. Trump about Muslims and his sup-
before House and Senate ap- since Mr. Trump first raised the there were tapes. of a presidents time in office.
propriations committees and possibility in a tweet about for- And at the White House The National Archives and
said he wanted to go before mer Federal Bureau of Investi- daily briefing on Monday, Mr. Records Administration said in
the intelligence panel instead gation Director James Comey. Spicer said: The president response to a request from the
to address allegations Mr. In recent days, the two men made clear in the Rose Garden Journal that presidential records
Comey raised in remarks to have offered differing accounts last week that he would have arent subject to the Freedom
the committee last week. of whether Mr. Trump asked an announcement shortly. of Information Act while the
The intelligence committee Mr. Comey in private conversa- The Secret Service on Mon- president is in office.
often holds closed hearings, tions to ease off the FBIs day sent its reply to a May 15 Louise Radnofsky
and until the panels an- Jeff Sessions will testify before a Senate panel on Tuesday.
nouncement Monday, there
was uncertainty about Comey, his subordinate. Mr. bassador to the U.S. during the mittee, has had a significant lic. Lawmakers are expected to decision to fire Mr. Comey.
whether the public would have Comey also hinted that there campaign but didnt disclose impact on the Justice Depart- press the attorney general on Mr. Trump fired Mr. Comey
access to the attorney gen- were reasons Mr. Sessions had those meetings in his confir- ment, changing policies on ev- Mr. Comeys account of their last month, suggesting later in
erals testimony. to recuse himself from the Jus- mation hearings. erything from how to charge a interactions, as well as the a television interview that the
The announcement sets up tice Departments investigation A Justice Department case to how to deal with al- reasons for Mr. Sessions re- decision was driven in part by
the second high-drama ses- into Russian interference in spokesman last week rejected leged abuses by local police cusal and his meetings with Mr. Comeys handling of the
sion before the committee the 2016 election beyond what parts of Mr. Comeys descrip- departments. But he also has Russian Ambassador Sergei investigation into alleged Rus-
within a few days, following was publicly known. tions of his interactions with faced repeated questions re- Kislyak during the campaign. sian election meddling.
Mr. Comeys appearance on In March, Mr. Sessions said the attorney general, and a lated to his contacts with Rus- Deputy Attorney General Last week, Mr. Comey de-
Thursday. he would recuse himself from spokeswoman on Monday said sia and his role as a top Rod Rosenstein will take Mr. scribed an Oval Office meeting
In his three hours of testi- any inquiry related to the 2016 Mr. Sessions believes it is im- Trump campaign adviser. Sessions place at the hearings at which he said the president
mony on that day, Mr. Comey campaign because he had portant for the American peo- Tuesdays hearing offers before the appropriations com- asked the attorney general to
portrayed Mr. Sessions as an played such a high-profile role ple to hear the truth directly Mr. Sessions an opportunity to mittees. His announced subject exit from the room, ultimately
attorney general who didnt in the Trump campaign. That from him. tackle some of those issues, will be the Justice Depart- leaving Mr. Comey alone with
manage the relationship be- announcement came after rev- Mr. Sessions, a former fed- and it will be the first time he ments budget, but he is likely Mr. Trump.
tween President Donald elations that Mr. Sessions had eral prosecutor and chairman is expected to personally ad- to face questions on matters Louise Radnofsky
Trump, his boss, and Mr. met twice with Russias am- of the Senate Judiciary Com- dress several of them in pub- like his role in the presidents contributed to this article.
filed in New York by a govern- son Rockefeller who had hold- lawyers, has pledged to donate the Republic, including George
ment watchdog group in Janu- ings in major oil companies to the U.S. Treasury all prof- Washington, had also violated
ary, pivots on Mr. Trumps de- and other corporations that its from foreign-government the Constitution.
cision to place his business conducted business globally. payments made to his hotels. Maryland and District of
assets into a trust, rather than White House press secre- The policy will apply only to Columbia officials must show
divest upon taking office. Mr. tary Sean Spicer on Monday payments from guests who they have been injured to have
Trump tapped his two adult suggested the lawsuit was po- identify themselves as a repre- standing to sue. The complaint
sons to run the Trump Organ- litically motivated and the sentative of a foreign govern- says they own businesses that
ization in his absence. business transactions in ques- ment, the Trump Organization compete with Mr. Trumps and
Payments from domestic tion were commonplace for D.C.s Karl Racine, right, and Marylands Brian Frosh lead the suit. told Congress in May. could lose economic and com-
and foreign governments to government officials. On Friday, lawyers for the mercial activity to the Trump
Mr. Trumps hotels and other Its not hard to conclude sions of the Constitution. dollars in payments from for- U.S. Department of Justice Organization.
businesses violate constitu- that partisan politics may be Some legal experts say the eign governments that lease moved for dismissal of the They also argue that they
tional provisions that prohibit one of the motivations, Mr. Foreign Emoluments clause space in Trump properties, pa- New York lawsuit, which was are harmed by perceived and/
U.S. officials from accepting Spicer said, noting the similar- was intended to prevent U.S. tronize the presidents hotels filed by Citizens for Responsi- or actual pressure to grant
any present, Emolument, Of- ities between Mondays law- officials from entering the em- or otherwise conduct business bility and Ethics in Washing- special treatment to Trump
fice, or Title from foreign suit and one filed in New York. ploy of foreign governments, with the Trump Organization. ton and makes nearly the businesses, which could put
states, and that bar the presi- He added the suit challenges making it inapplicable to Mr. Mr. Trumps receives benefits same case as the complaint them at a disadvantage to
dent from receiving compen- the sort of business transac- Trumps situation. from the U.S. government as filed by Maryland and the Dis- other states that have given or
sation from the federal or tion that government officials D.C. Attorney General Karl well, through his lease of fed- trict of Columbia. will give his companies favor-
state governments, other than have long engaged in. Racine and Maryland Attorney eral property for the Trump Department lawyers said in able consideration.
his salary, according to the Few courts have consid- General Brian Frosh cite in International Hotel in Wash- their brief that the nations Rebecca Ballhaus
lawsuit, filed in federal district ered the emoluments provi- their complaint millions of ington, D.C., the lawsuit says. founders didnt intend for the contributed to this article.
THE WALL STREET JOURNAL. Tuesday, June 13, 2017 | A7
U.S. NEWS
Iowa Seeks
To Rework
Health Law
Other states nationwide are keeping an eye on
the states plan to revamp the Affordable Care Act
BY ANNA WILDE MATHEWS administration is open to
likely candidates have already from the most frequently used found no statistically signifi-
heard promising reports about anti-PTSD drugsselective se- cant difference between ef-
the treatment from comrades, rotonin reuptake inhibitors Dr. Sean Mulvaney administers a stellate ganglion block. fects from one stellate gan-
said co-principal investigator but only 20% to 30% see com- glion block and the placebo.
Kristine Rae Olmsted of RTI In- plete remission from the drugs, patients. Among most military the VA pays benefits to those The drug is marketed under Patients showed improvement
ternational, a nonprofit research according to 2014 research led doctors, he said, its not get- suffering from combat-induced the brand name Naropin by after a second injection.
organization hired by the Army by Dr. Difede. ting traction. PTSD. The elite commandos Germanys Fresenius Kabi AG The most obvious explana-
to conduct the study. Physicians such as Dr. Lynch The Department of Veterans who have already become fans and, according to RTI, costs less tion would be that the previ-
Of the 240 patients that re- who advocate use of the stel- Affairs said it has no specific of the injections have the oppo- than $2 a dose. Most patients ously reported benefits for
searchers hope to enroll, 80 late ganglion block say it im- policy regarding use of stellate site incentiveactive-duty require just one injection, al- PTSD were attributable to pla-
would receive a harmless saline proves the effectiveness of tra- ganglion blocks to treat PTSD SEALs and Green Berets usually though some return for a sec- cebo effect, psychiatrist Robert
injection to distinguish the real ditional treatments. among those who have left the want to show improvement so ond shot, doctors said. McLay, then the research direc-
shots medical impact from any The conundrum surrounding military. Doctors use the injec- they can stay with their teams, One of the patients is Dr. tor at Naval Medical Center San
placebo effect. PTSD sufferers the new Army study highlights tions for PTSD on a limited ba- doctors said. Lynchs commander, Brig. Gen. Diego, said at the time. He said
know they can get the genuine both the injections promise sis at their discretion, a VA In the stellate ganglion pro- Donald Bolduc, a Green Beret this year he believes the treat-
injection free from military hos- and the frustration its advo- spokesman said. The depart- cedure, doctors inject the anes- who has served more than five ment is worthy of further study.
pitals without signing up for the cates feel trying to win it wider ment is conducting a small re- thetic ropivacaine in the right years in Afghanistan. He was in- The Army study is intended
study and risking getting a pla- acceptance beyond the special- search project on the injections side of the neck, using ultra- jured by an errant 2,000-lb. to settle the debate.
A8 | Tuesday, June 13, 2017 THE WALL STREET JOURNAL.
IN DEPTH
46%
bets the VIX would fall. Asset ones that followed. nancial crisis, implying
managers including Alliance- I think of it as the great de- that anticipated gyrations
Bernstein incorporate volatility mocratization of volatility, said
will average more than
into retirement-date savings Bill Speth, vice president of re-
4% a day during the next
funds, adjusting stock exposure How much the VIX spiked following reports Mr. Trump had pressured search and product develop-
30 days.
based on the severity of market James Comey to drop a probe into former NSA adviser Michael Flynn. ment at CBOE. Investors who
swings. And insurance giant AIG never would have opened a fu-
sells annuities with fees that tures account or traded an op-
rise along with the VIX. tion could and did trade these VIX INSURANCE
Lately, the VIX has been sig- ents portfolios from downturns. Lamenting the lost opportu- exchange-traded products.
naling a near-complete absence He said the Feds policies have nity, Mr. Shah met up with Amid the panic, investors Because stocks tend to But there was no way to
of fear, and the preternatural kept volatility artificially low for Sandy Rattray, a Goldman col- were willing to pay to insure fall much more sharply trade it until 2004 when
calm is making some people so long that the speed of any re- league and erstwhile indexing their portfolios. The costs would than they rise, the VIX CBOE Holdings Inc.
The VIX
nervous. Opinion is divided on versal will be more severe. buff with a knack for packaging be a drag in bull markets, but typically spikes when launched standardized,
Stocks
whether it is a bullish signal for When this goes, youre going investment products. What if, looked like a small price to pay stocks plummet, publicly traded VIX
stocks or a worrying sign of to see the mushroom cloud from the pair speculated, they could in the immediate wake of the making it an attractive futures. VIX options
complacency. After all, the VIX Saturn, he said. tap the VIX brand and reformu- crisis. followed two years later.
form of insurance.
also approached a record low in The VIX was conceived after late the index based on their es- It was the Wild West, said
early 2007, just before the sub- the Black Monday crash in oteric swaps? Bill Luby, who quit a 20-year
prime crisis began unspooling. 1987, when the market fell 26% The world wanted to drink consulting career in 2005 to be-
In recent days the VIX nudged in a single day. The measure Coca-Cola, said Mr. Shah, who come a full-time trader. If you FEAR GOES MAINSTREAM
higher, rising more than 10%, as used stock-market bets, known retired from Goldman as a part- knew the landscape, there was a
technology stocks fell. as options, to gauge expecta- ner in 2011. They didnt want lot of money to be made. VIX insurance comes 100%
Cumulative percentage change,
Some analysts see low vola- tions for the speed and sever- the white label. Trading the VIX, however, is at a cost. Exchange- shown monthly, in the price of the
80
tility as a sign of increased effi- ity of market moves, or what These were the heady days a lot different from watching it traded products iPath S&P500 VIX Short-Term
ciency, where shocks are more traders call volatility. Options after financial deregulation, and on TV, and its idiosyncrasies that track VIX 60 Futures ETN from its inception in
quickly absorbed by the mar- prices rise and fall based on Wall Street was busily securitiz- left some investors feeling futures typically January 2009
ing everything from weather re- burned. No trading strategy lose money in the 40
ports to bundles of sliced-and- can exactly replicate the VIX long term because
20
Trading on Volatility diced mortgages. Turning the index, and traders rely on of the idiosyncrasies
The CBOE Volatility Index, Wall Streets fear gauge, soared during VIX into something tradable was proxies like futures and op- of futures pricing. 0
the nancial crisis, which kicked off a surge in trading of VIX nothing more than a math prob- tions, which can veer widely
2009 10 11 12 13 14 15 16
derivatives that has continued to this day. lem, Mr. Rattray said. from the VIX itself.
*As of June 9
The pair rewrote the VIX for- VIX exchange-traded prod- Sources: FactSet (data); Macro Risk Advisors, Deutsche Bank,
VIX index mula, expanding it to a larger ucts are especially susceptible to CBOE Holdings, WSJ analysis (explanation) THE WALL STREET JOURNAL.
80 Oct. 24, 2008 VIX hits record universe of stock-market bets this divergence because of the
high as stocks plummet.
and making it possible to create peculiar structure of VIX fu- When the VIX dipped in Sep- past year as market shocks
a tradable futures contract. tures. Uncertainty increases tember, Larry Tabb, president proved fleeting. The ProShares
60
Their equation synthesizes with time, and the further away and founder of the Tabb Group, Short VIX Short-Term Futures
thousands of trades and distills an anticipated downturn is, the a consulting firm, said he ETF that, like Mr. Miller, shorts
40 them all into a single number more expensive it is to insure thought volatility would rise and the VIX, is up 70% this year.
meant to represent the collec- against. That means VIX futures bought an exchange-traded Pravit Chintawongvanich, head
tive expectations for the market. for this month are typically less product that aims to double the of derivatives strategy for
20
When the VIX is at its current expensive than next months daily gain of VIX futures. And Macro Risk Advisors, estimated
level of around 10, it implies contracts, which are less expen- even though the VIX rose 28% in that traders and investors now
0 that traders believe the S&P 500 sive than the month after that, October, the VelocityShares have a near-record $512 million
2006 08 10 12 14 16 will move by an average of less and so on. Daily 2x VIX Short-Term ETN at stake for every single-point
than 1% a day during the next 30 Some of the most popular ex- lost money. move in VIX futures.
Average daily volume of VIX futures and options*
days. change-traded products invest It just kept going down and In a twist, the very funds that
The more stocks move, the in a combination of this months down and down, said Mr. Tabb, are meant to protect against
1.2 million contracts higher the VIX goes. Since the VIX futures and next months. who blames himself for not volatility may make any correc-
market typically falls much To maintain their exposure, they reading up on its mechanics be- tion worse, said Rocky Fishman,
1.0 more sharply than it rises, the sell the contracts that are near- fore buying. I got completely an equity-derivative strategist
VIX tends to surge when the ing expiration and buy contracts screwed. with Deutsche Bank. So-called
Jan. 30, 2009
market crasheshence its po- for the following month. Put Janus Henderson Group PLC, volatility control funds aim to
Barclays launches
0.8 rst exchange- tential as insurance. simply, they buy high and sell owner of VelocityShares, de- provide investors with a
traded VIX product. Messrs. Shah and Rattray low almost every day, steadily clined to comment. smoother ride by sidestepping
handed their invention to CBOE bleeding money. A share of the The flip side of the punishing the worst dips. A rising VIX sig-
0.6
Holdings Inc., the owner of the original Barclays product, decay favors short sellers, allow- nals the funds to shed stocks in
VIX trademark. bought at its January 2009 de- ing them to profit when volatil- favor of safer assets, accelerat-
0.4 I didnt realize how big it but, would be nearly worthless ity is flat and sometimes even ing the selloff and spooking
would be, said Mr. Rattray, who today. when it rises. Instead of buying other investors into joining the
is now the chief investment offi- This decay is difficult to com- insurance, selling it became the exodus.
0.2 cer for Man Group PLC, an $89 prehend, even for sophisticated new hot trade. Traders like Mr. Rising volatility triggered
billion hedge fund. investors, and leveraged funds Miller see spikes in volatility $50 billion in stock selling dur-
The formula allowed the can compound those losses. such as those ahead of the U.S. ing the market gyrations of Au-
0
CBOE to cash in its marquee in- Market experts have said the presidential electionas oppor- gust 2015, and $25 billion in the
2006 08 10 12 14 16 dex. The exchange launched VIX products are designed for short- tunities to bet that the VIX will wake of the U.K.s surprise vote
*Through May 17 futures in 2004, and VIX options term tactical trading, not long- quickly collapse again. to exit from the European Union
Sources: FactSet (index); CBOE Holdings (volume) THE WALL STREET JOURNAL. two years later. The firm billed term passive investment. Such bets have paid off in the last year, Mr. Fishman said.
LIFE&ARTS
ILLUSTRATION BY TAYLOR CALLERY; APPLE (BELOW)
HOME is still a favorite and deeply personal. gins to sing the songs narrative, hes backed
Listening to the song today, Im left with by a sorrowful cello and strings. The ar-
a grateful sense of melancholy. The songs rangement is haunting.
lyric is beautifully constructed and illus- Meanwhile, John sings the parents per-
trates both sides of the chasm between car- spective as a Greek chorusWe gave her The Beatles in their Sgt. Pepper days, photographed in 1967.
ing parents and a newly independent child. most of our lives. In the song, the daughter
Looking back, I wish I had made it easier leaves a note that she hoped would say called an incident with one of my daughters Later, she called to apologize. I said, I
on my parents when I was trying to break more, while her parents wonder, How could many years ago, when she was still in col- didnt mind. I thought you were just being
free. Im sure I hurt them many times by she do this to me? Two inner voices, each so lege. After she failed to win an audition, I colorful. But it was more than that. Now I
saying what I felt or thought without soft- far from understanding the other. wasnt as sympathetic as I could have been. realize that her outburst was probably the
ening the blow. Recently, I listened to the song and re- She told me off in blunt terms. very moment she emotionally left home.
A10 | Tuesday, June 13, 2017 THE WALL STREET JOURNAL.
OPINION
REVIEW & OUTLOOK
A French Charter
Americas Steel-Trapped Minds Of Integration
D
onald Trump has ordered a national April U.S. Steel slashed its annual profit fore-
security review of steel imports with cast to invest in retrofitting decades-old mills. Frances President Em- think-tank, Institut Montaigne, last year
manuel Macron, know- came up with some interesting results
a goal of justifying a broad-based tariff. Improvements in technology and workflow are
ing only success in his on the 5.6% of Frances population that
If his advisers look honestly at the main reasons the U.S. first month in office, it counts as Muslim.
the evidence, they cant possi- A new Trump steel steel workforce has shrunk has yet to act on one of The study found that 28% of those
bly find enough to justify such tariff would crush his and survived an onslaught of his most quietly an- Muslims have adopted value systems
a job-killing, economically competition. nounced goals: dealing clearly opposed to the values of the Re-
harmful policy. forgotten workers. Yet U.S. foundries are still EYE ON
with Islam in France. public. Hold that up alongside an esti-
EUROPE
Start with the fact that U.S. running at only 71% capacity By John
Hes pledged affirma- mate a year ago from former Prime
steel prices are already higher while imports make up a tive-action measures, Minister Manuel Valls that only 1% of
Vinocur
than in the rest of the world, and the gap has quarter of the U.S. market. One reason is that zero tolerance on secu- French Muslims are Salafists support-
significantly widened over the past five years most advances in high-strength steel have oc- rity and a determined ing jihadism.
amid increased import duties. In 2012 the aver- curred overseas. Many downstream consumers policy of reconquest of the Republic in Boualem Sansal, an Algerian novelist,
the countrys no-go, Islamist-controlled recently told a French reporter that when
age price of cold-rolled coil produced in the say domestic steel doesnt meet industry qual-
enclaves. it came to Islamism or political Islam,
U.S. was 11.5% and 12.1% higher than the Chi- ity or safety standards. Mini-mills produce Tall order. Taller still, even in Mr. Ma- Mr. Macron didnt grasp Frances No. 1
nese and Southern European equivalent. This lower-grade metal thats suitable for roads and crons current state of grace, considering problem. The Islamists in France think
year U.S.-made steel is 34% and 27% more ex- buildings, but not as much for automotive historys great Reconquista took more in terms of conquering neighborhoods,
pensive, respectively. sheet or appliances. than 700 years. not states, Mr. Sansal said.
American steel makers cry dumping, but This excess capacity should moot natural se- In the context of Frances battle with
is every foreign company in every country curity concerns. Defense consumes less than 3% homegrown Islamist terrorism (Mr.
dumping? The U.S. Commerce Department has of domestic steel, and U.S. foundries would have Macrons verbal escalation over former Defining the relationship
already imposed 152 antidumping or counter- plenty of spare capacity to ramp up production President Franois Hollandes obscu-
rantism) and its hundreds of French between Muslims and the
vailing-duty orders on imports from 32 coun- in wartime. Canada, Mexico and South Korea
tries, and many more cases are pending. Com- accounted for 40% of imports last year, while dead, the details of the new presidents state and setting an example
approach to restraining Islamism are
merce charged South Korea and Turkey with China and Russia together provided 7%. few. So far, they have nothing to do with for the rest of Europe.
dumping welded line pipe in 2015 and last year The greatest harm from broad-based steel a unifying charter of national civiliza-
slapped duties on imported cut-to-length steel tariffs would be to the thousands of American tion that would represent a binding so-
plate from Brazil, China and Turkey. Antidump- businesses and workers that use steel. These lution for an Islamic presence that has Perhaps Mr. Macron should talk to
ing duties contributed to a 25% decline in for- would include the higher cost of American steel been described by the intellectual Alain Grald Darmanin. Hes the presidents
eign imports between 2015 and 2016. for construction (42% of steel shipments), auto- Minc as a subterranean territory within budget minister with a part-Algerian her-
Domestic steel makers have exploited these motive (27%) and machinery (9%). Public works French society. itage who, as mayor of Tourcoing, the
protectionist measures to raise prices and boost and homes would cost more to build. Instead, the presidents announced northern French town with a large Mus-
their bottom lines. Last year Nucor posted an Many U.S. companies that compete globally priorities are the moralization of lim population, had refused to approve a
11.9% profit before taxes, depreciation and would risk losing business to overseas competi- French politics (dont hold your breath) building permit for a minaret.
and, in order to restore international Mr. Darmanin said last year that Is-
amortization. AK Steels margins have doubled tors. Some would turn to substitute materials
confidence in Frances economic stabil- lam has to adapt to the Republic and not
in two years to 8.5% while Steel Dynamicss has such as plastic or aluminum, tweak their supply ity, the difficult reform of the rigid vice versa. To establish this relation-
increased by half to about 15%. chains or move production overseas. Auto mak- French labor code. ship officially, making clear that French
Commerce Secretary Wilbur Ross nonethe- ers would likely utilize more high-strength alu- When it comes to drawing Muslims law and values have precedence over
less says that antidumping duties are not able minum and shift more production to Canada closer to France, Candidate Macron any interpretation of the Quran, he
to resolve the broader structural economic and Mexico. American steel workers could even spoke of reducing class sizes in schools urged that there has to be a compact or
harm to the U.S. steel industry caused by mas- be harmed if demand for steel drops as users in difficult neighborhoods and giving state agreement.
sive global overcapacity and unfair foreign adapt to higher prices. employers 15,000 ($16,800) over three A covenant of this kind would create
competition. His beef is that China, which ac- There are 16 times more workers employed years for each new open-term hire from an Islamic consistory in France with le-
counted for nearly half of the worlds output today in U.S. steel-consuming industries than those neighborhoods. gal status equal to that of similar Roman
last year, has driven down global prices and in- the 150,000 or so American steelworkers. A That, for now, is it on affirmative ac- Catholic, Protestant or Jewish bodies. As
tion (discrimination positive, in French) was the case with the Jews more than
creased pressure on U.S. steel companies. study by economists Joseph Francois and
which Mr. Macron said in March hell 200 years ago, Muslims could be asked
The reality is that foreign competition forced Laura Baughman found that more American take on totally. His predecessor, Mr. to pledge to defend France ahead of all
the U.S. steel industry to become more effi- workers lost jobs (200,000) after George W. Hollande, had experimented with a simi- other considerations.
cientor at least it did before the tariff walls Bush imposed steel tariffs in 2002 than were lar but no-name employment inducement With Muslims representing an esti-
began going up. Over the past four decades, employed in the entire steel industry at the for two years before dropping it. mated 5% to 6% of the French voting
production has shifted from unionized inte- time (187,500). The result was $4 billion in And the reconquest of the Republic population, Mr. Macrons subordinate fo-
grated mills that use blast furnaces and iron ore lost wages. remarks? cus on their role buys him momentary
to lower-cost mini-mills that employ electric The case against steel tariffs is so over- They received virtually no media at- calm to solidify power through another
arc furnaces, scrap metal and nonunionized la- whelming that its hard to believe even Mr. Ross tention. In spite of last months election remarkable performance in the second
bor. Steel from integrated mills makes up a can find a way to justify it. The motivation defeat of Marine Le Pen, and a consis- round of legislative elections Sunday.
tent majority view in France that the But dealing with the issue of Islam
third of domestic production, down from about could only be to assist the politically clamorous
failure to integrate Muslims is a Muslim- head-on, comprehensively and soonof-
three-quarters in 1980. owners of a handful of steel companies that made problem, broad political discus- fering job and educational opportunity
Domestic manufacturers that were slow to would exploit government favoritism to raise sion of Islam remains couched in euphe- while achieving real accommodation of
adapt, such as Bethlehem Steel, have gone out prices. The losers would be millions of the so- mism. The talk is instead of migrants, French valueswould be a profound
of business while leaner steel makers that have called forgotten men and women the President the suburbs (a verbal stand-in for Mus- statement of Mr. Macrons authority. He
embraced new technologies are prospering. In vowed to help during his campaign. lim-majority enclaves), or communau- cannot fail to try.
tarisme (referring to the total rejection As far as a reconquest of lost terri-
of French law and values in many Mus- tory goes, thats a lot of verbal reso-
Hezbollah in New York lim-majority housing projects).
Who these Muslims are, or their num-
nance bound in with a much smaller
practical reality. Still, a charter of inte-
F
ederal prosecutors have charged two in Panama that included the American and Is- ber, is left vague by the state, which con- gration, setting an example for Muslim
siders precise information on the subject relationships with the rest of Europe,
U.S. citizens with providing material raeli embassies as well as the Panama Canal.
potentially discriminatory. But a liberal could be considered progress.
support to Hezbollah and helping the Attorneys for the two men didnt respond to
Iranian-backed Lebanese ter- media inquiries.
ror group prepare potential The feds say the Iran- Mr. Debeks alleged Pana-
attacks in America and Pan- backed militia recruited manian operations are consis-
ama. The charges, announced tent with Hezbollahs pres-
The Robot-Human Alliance
Thursday after the men were agents in the U.S. ence across Latin America By Ken Goldberg ests, was developed by Leo Breiman and
H
arrested June 1, show that that goes back to the bomb- Adele Cutler at the University of Califor-
Irans terror proxies roam far ings of the Israeli embassy umans have been beaten by a nia, Berkeley. They proved that in com-
beyond the Middle East. and a Jewish community center in Buenos Ai- machine again. Last month the plex problems with noisy data, a group of
The FBI and New York Police Department res, in 1992 and 1994 respectively, killing more worlds top-ranked player of Go, decision trees will always outperform a
an abstract strategy board game, lost to single treeso long as the trees are suffi-
carried out the investigation, which resulted in than 100 people.
Googles AlphaGo program. This ciently diverse.
a raft of terror-related charges for naturalized In 2011 U.S. investigators foiled a plot to kill marked a major achievement for ma- By the same token, the benefits and
citizens Ali Kourani of the Bronx and Samer el the Saudi ambassador at a Washington restau- chine learning. challenges of human diversity have been
Debek of Dearborn, Mich. Prosecutors say Hez- rant, leading to a guilty plea by the would-be What might be more important, recognized for centuries in political sci-
bollah recruited the men as operatives, pro- assassin. Hezbollah was also behind a 2012 bus though, went less noticed: Around the ence, economics and sociology. Experi-
vided them with military-style training, then bombing in Bulgaria that killed five Israeli tour- same time, some of the worlds top Go ments on group problem-solving show
gave them a variety of ominous tasks. ists and their local bus driver. players began competing alongside the that the diversity of the people involved
Prosecutors in the Southern District of New Iran bankrolls Hezbollah to the tune of $200 AlphaGo program in human-machine is more important than their total IQ.
York say the 32-year-old Mr. Kourani con- million annually and provides most of the teams. The players learned new strate- Perhaps the most exciting area of ma-
ducted pre-operational surveillance of mili- 80,000 missiles the group points at Israel. The gies by studying AlphaGos previous chine learning is deep learning, in which
games and said working with the pro- millions of parameters are tuned based
tary and law-enforcement sites around New latest allegations are a reminder that the Teh-
gram gave them new confidence. on diverse training examples of speech or
York as well as Kennedy Airport. The feds al- ran regime still deserves its reputation as the Most computer scientists agree that images that have been labeled by people.
lege that Mr. Debek, age 37, staked out targets worlds leading state sponsor of terror. predictions about robots stealing jobs In robotics, too, the exciting progress,
are greatly exaggerated. Rather than especially in autonomous driving, can be
worrying about an impending Singular- characterized in terms of Multiplicity.
Macrons French Sweep ity, consider instead what we might call Data from a varied group of human driv-
E
Multiplicity: diverse groups of people ers is combined to demonstrate appro-
mmanuel Macron is looking like more right rival, the National Fronts Marine Le Pen. and machines working together to priate responses to varying conditions,
than a one-election wonder. On Sunday The legislative races suggest voters prefer Mr. solve problems. and to train multiple statistical machine-
the new French Presidents upstart po- Macrons reform vision over what the tradi- Multiplicity isnt science fiction. A learning algorithms that run on distrib-
litical party, La Rpublique tional parties are offering. So combination of machine learning, the uted hardware.
Voters bolster wisdom of crowds and cloud computing The systems must be continuously up-
en Marche, swept the first when labor unions hit the
already underlies tasks Americans per- dated and fine-tuned based on changes in
round of elections for the Na- the new Presidents barricades and set tires form every day. Consider Googles search road, weather and traffic conditions, and
tional Assembly, the lower alight to protest his reforms, engine. It runs on a set of algorithms as human expectations evolve. All this re-
house of Parliament. If the reform mandate. Mr. Macron can point out with input from a large number of human quires a continuing feedback cycle with
results continue through the that they represent an un- users who share valuable feedback every people at the core.
second round Sunday, Mr. popular special interest. time they click on or skip over a link. Collective intelligence with artificial
Macron will have a sturdy mandate to repair A big majority in the National Assembly Multiplicity allows Amazon to recom- intelligence enables many of the most so-
Frances broken economy. will also permit Mr. Macron to enact his re- mend books, Netflix to suggest movies phisticated and effective systems in use
Turnout was a historic low 49%, but En form agenda via legislation rather than rely- and Facebook to organize newsfeed today. If people stopped providing input,
Marche and its smaller centrist ally, Modem, ing on brittle Presidential decrees. With posts. Millions of people show their pref- these systems would quickly become out-
qualified for the second round in nearly every more than two-thirds of the Assembly in his erences by clicking, and that data is used dated and would deteriorate.
to build and maintain statistical models Despite years of experience in human
constituency where they fielded candidates. camp, he could be more ambitious in tackling
that predict what users want. factors and human-machine interfaces,
Mr. Macrons party came first with 32% of the Frances job- and growth-killing taxes and The key is clustering people and more research is needed on the best
vote overall, thumping the center-right Re- regulations. products, which allows the algorithm to ways to combine diverse groups of peo-
publicans (22%), the hard-right National Start with the 35-hour workweek. Mr. Ma- make recommendations under the as- ple with diverse groups of machines.
Front (13%) and the center-left Socialists cron during the campaign vowed to keep the sumption that similar people have simi- The important question isnt when ma-
(10%). Smaller far-left parties divided the law intact while giving firms more room to ne- lar tastes. A continuing stream of human chines will surpass human intelligence,
rest of the ballots. gotiate overtime. But abolition is the real cure interaction ensures that the system but how humans can work together with
These results could translate into some for a measure that discourages job creation, evolves as new items are introduced and them in new ways.
400 En Marche seats out of 577 once the sec- and the former investment banker should as tastes change. Multiplicity is collaborative instead
ond round is complete. This is an astonishing make the case for it. While scientists still dont under- of combative. Rather than discourage
feat for a party that didnt exist a year ago stand Multiplicity very well, they are the human workers of the world, this
Mr. Macrons meteoric rise in politics is im-
discovering clear benefits to machine new frontier has the potential to em-
as well as a rebuke to the countrys tradi- pressive, but the real test will be whether he diversity. Researchers have developed a power them.
tional political class. can put Frances 10% unemployment rate on family of techniques known as ensem-
The legislative election is inoculating Mr. a downward trajectory and accelerate a GDP ble learning, in which a set of special- Mr. Goldberg, a professor of engi-
Macron against the antireform lefts accusa- growth rate stuck at zero to 1%. With a bigger ized algorithms work together to pro- neering at the University of California,
tion that he is in the lyse Palace only be- majority should come bigger reform goals to duce a single result. Berkeley, is director of the People and
cause the French wanted to keep out his far- restore the vitality of France. One variant, known as random for- Robots Initiative.
THE WALL STREET JOURNAL. Tuesday, June 13, 2017 | A11
OPINION
N
the 2016 election.
ow we know, thanks to
former FBI Director
Similarly, Mr. Mueller probably will
scold Mr. Trump for his actions, which
Shortchanges
James Comeys testimony certainly violated normal Washington
last week, that President
Trump wasnt a target of
protocol, but say ultimately that pros-
ecution isnt warranted.
The Military
the investigation into Russian med- There isnt even much for Mr.
dling in the 2016 election. Mueller to investigate. Only two peo- By Mac Thornberry
A
Thats by far the most important ple are involved, Messrs. Trump and
thing Mr. Comey said. For a year, the Comey, and the latters testimony is sk anyone who served in the
FBI has been looking into possible the only evidence Mr. Mueller needs. U.S. military in the late
collusion between the Trump cam- He could make the decision 1970s, and he will tell you it
paign and Russia, and apparently promptly, allowing the president and was a miserable time. Morale was
there wasnt enough evidence to Congress to turn to the important low. Training was deficient. Weap-
make Mr. Trump a target. That news domestic and foreign issues America ons and equipment didnt work.
should put to restas the president faces. Mr. Comeys failure before last Good people left the armed ser-
had hopedan allegation that, if week to acknowledge publicly that vices in droves.
GETTY IMAGES
true, would undoubtedly have caused Mr. Trump wasnt a target of the At the same time the world was
even Republicans in Congress to con- Russia probe shows the damage un- growing more dangerous, with the
sider impeachment. necessary delay can do. Soviet invasion of Afghanistan, the
But Mr. Comeys testimony has put What might have foreclosed this Iranian revolution and hostage cri-
another question on the table: President Trump and then-FBI Director Comey at the White House on Jan. 22 favorable outcome, however, is the sis, and multiple nations falling to
whether the president attempted to presidents unnecessary challenge communism.
obstruct justice. According to Mr. was couched as a wish: I hope you Under this conventional analysis Friday to Mr. Comeys account. Never A decade later the situation had
Comey, he met with Mr. Trump pri- can see your way clear . . . of the executive branch, the president one to leave well enough alone, Mr. turned around. How did America go
vately in the Oval Office while the FBI Similarly, the presidents desire is authorized to direct or counter- Trump accused Mr. Comey of lying from the hollow military of the
was investigating former national se- for loyalty is not unusual. All presi- mand investigations or prosecutions and offered to give his own testi- 1970s to the strength that helped
curity adviser Mike Flynn. I hope dents expect loyalty from those in by the Justice Department, which mony. That sets up a conflict that the drive the Soviet Union out of exis-
their administrations. The executive acts on his authority alone. Thus, the media will treat as a test of Mr. tence? Are there lessons we could
branch cannot function if subordi- president cannot be guilty of obstruc- Trumps honesty. apply today?
The presidents insistence nates arent loyal to the president. tion of justice unless he attempts to Unless there are tapeswhich
Leaks are evidence of this. obstruct an investigation of himself, would raise even more questions
on disputing the former In addition, Mr. Comey reported as in Watergate. this is a challenge the president will After the stagnant 70s,
directors testimony was a Mr. Trump said several things that We dont know how many times lose. His exculpatory recollections un-
Presidents Carter and
are inconsistent with an intent to dis- past presidents have instructed the der oath, whatever they are, will not
needless complication. rupt the investigation generally. Justice Department to prosecute, or be more credible than Mr. Comeys Reagan boosted spending
The most serious part of the in- not, a criminal case. When the contemporaneous memorandums.
quiry relates to the Trump cam- House voted in 2012 to hold Presi- If that is Mr. Muellers finding, by double digits annually.
you can see your way clear to letting paigns possible collusion with the dent Obamas attorney general, Eric the president will have given his en-
this thing go, Mr. Comey says the Russiansclearly an impeachable of- Holder, in contempt for failing to emies the priceless opportunity to
president told him. The former FBI fense if it occurred with Mr. Trumps turn over documents, who directed claim he lied under oath, an im- A few months ago the vice chiefs
chief testified that the president also knowledge or direction. Mr. Comey that he not be prosecuted? It isnt peachable offenseat least in Re- from each branch of the U.S. mili-
asked him for loyalty. Mr. Trump reports Mr. Trump as saying if there publicly known how often this hap- publican eyes when President Clin- tary appeared before the House
later fired Mr. Comey, possibly be- were some satellite associates of his pens, but Mr. Mueller and the rest ton was in the dock. Armed Services Committee, which I
cause he hadnt shown it. who did something wrong, it would of the professionals in the Justice But the situation isnt irretriev- lead. Their testimony certainly got
As this national obsession contin- be good to find that out. That clearly Department certainly know. That able. Mr. Mueller could still say the my attention. Only three of the
ues, there will be heated discussions indicates Mr. Trump wasnt trying to adds further ambiguity to Mr. Muel- presidents testimony would change Armys 58 Brigade Combat Teams
about whether Mr. Trumps state- keep the FBI from investigating the lers decision. nothing and neednt be taken, since are ready to fight tonight. More
ments and actions, and the sur- Russia collusion issue. The idea that on this limited evi- Mr. Comeys statements and memo- than half the Navys airplanes can-
rounding circumstances, were an ef- These factual ambiguities alone dence Mr. Mueller would find the randums simply dont make out a not fly because they are awaiting
fort to obstruct justice. The answer: make the case for obstruction of jus- president obstructed justice, and thus case of obstruction. Mr. Mueller maintenance and spare parts. The
Given what we know, there is very tice far less than clear-cut. Legal and set in motion proceedings that could would face merciless media and Dem- Air Force is short 1,500 pilots and
little chance Special Counsel Robert political considerations militate in unseat the winner of a presidential ocratic criticism for cutting this cir- 3,000 mechanics, and its fleet is
Mueller will bring an obstruction the same direction. election, is a dream of the resis- cus short. older and smaller than ever.
charge. There is a strong argument that, as tance, but it isnt credible. But if he is the man of integrity ev- All that is alarming enough, but
For one thing, the facts are ambig- a matter of law, the president cannot The smartest thing ever said about eryone has averred, he will follow this what surprised me most was testi-
uous. Yes, Mr. Trump asked Mr. be criminally guilty of obstructing jus- Mr. Comeys approach to the Hillary course for the good of the country. mony that pilots today get fewer
Comey to abandon the investigation tice if he simply orders the FBI direc- Clinton email issueshaming her in training hours in the cockpit than
of Mr. Flynn, but he didnt order it tor not to investigate someone. All ap- public but refusing to recommend Mr. Wallison is a senior fellow at during the dire days of the 1970s.
something that, as president, he had pointed officials are the presidents prosecution of what was clearly a se- the American Enterprise Institute. He How did this happen? Since 2010
the authority to do. As Mr. Comey re- subordinates, and he is responsible for, rious crimewas that the FBI direc- was White House counsel in the Rea- the defense budget has been cut by
membered the presidents request, it and has authority over, their actions. tor didnt want to make a decision gan administration. more than 20%, but the world
hasnt become 20% safer.
To get planes, ships and equip-
In Iran, Radio Liberty Doesnt Live Up to Its Name ment ready to deploy to the Middle
East or elsewhere, the military has
had to take parts off other planes,
By Sohrab Ahmari The story went on to claim that Still another article, published in McCain in a 2012 article. But he said ships and units. This cannibalization
P
Ahmad Dawabsheh, a 6-year-old Pal- February 2017, concerned Israels de- the other instances arose from has diminished American readiness.
resident Trump is hiring a chief estinian boy who eight months ear- cision to deny a visa to a researcher quotes, or came from opinion pieces, The military isnt prepared to carry
executive for the Broadcasting lier survived an arson attack by with Human Rights Watch. The story or were otherwise in line with the out all the missions it may be asked
Board of Governors, the federal hard-line Israeli settlers, had been failed to note that the researcher had kind of political observation fre- to do in a time of war.
agency that oversees Voice of Amer- transferred to Spain for treatment participated in the movement to boy- quently found in news analysis. What is the answer? Rebuilding
ica and other media outlets charged of wounds sustained in the flames, cott the Jewish statecontext Irani- Yet RFE/RL couldnt point to any the military after the 1970s took se-
with beaming light and liberty into and Israel still hasnt arrested any- ans deserved to know. instances in which Democrats or sup- rious and sustained effort. When
closed societies world-wide. Politico one on suspicion of carrying out the porters of the deal were labeled ex- the Soviets invaded Afghanistan, the
reports the leading contender is Mi- attack. tremistsor with other pejoratives Carter administration raised de-
chael Pack, a conservative filmmaker Again, incorrect. Israel had two The Persian-language like peaceniks or hippies. As a fense spending by 12% in 1979 and
and president of the Claremont Insti- months earlier indicted two Jews, taxpayer-funded broadcaster, RFE/RL 15% in 1980.
tute. Whoever gets the job faces an charging one with murder over the service too often parrots has a particular duty to refrain from Ronald Reagan added even more:
uphill battle to reform an agency that attack, which killed Ahmads parents state media and doesnt partisanship when reporting on 17% in 1981 and 18% in 1982. After
has lost its sense of mission. and 18-month-old brother. Iranians American politics. that the rate of growth slowed a
To get a feel for the dysfunction, relying on Farda to understand these give Israel a fair shake. Perhaps most dismaying are the bit, but in all there were five
consider Radio Farda, the Persian- events were given the false impres- stories that seem to be borrowed straight years of double-digit in-
language component of Radio Free sion that Israel is a place where Jews wholesale from state-run Iranian creases followed by three more of
Europe/Radio Liberty. With an an- kill Arabs with impunity. Nenad Pejic, Mr. Pejic countered that a three- media. nearly 10%. At that point the de-
nual budget of $117 million, RFE/RL a former Balkan correspondent who paragraph squib didnt allow room An April 2016 Farda headline fense budget was about 6% of
is supposed to serve as a surrogate now serves as RFE/RLs Prague-based for elaboration. Yet Farda published quoted President Hassan Rouhani to Americas gross domestic product.
press in 23 countries across Europe editor-in-chief, conceded in an email a second, much longer story on this the effect that If It Werent for Irans Today its only 3.1%.
and Asia that restrict media free- that the stabbing story that also dis- incident that still didnt divulge the Assistance, ISIS would Have Captured Repairing the damage done to
dom. Farda is one of its most impor- cussed the Dawabsheh case had been researchers anti-Israel views. Baghdad and Damascus. Another, the military in our time will require
tant broadcasters, intended to give inaccurate. Then there is Fardas coverage of from November 2016, read: Irans a similar sort of response. Its
Iranians a rigorous, fair and morally Heres a Farda headline, from a President Obamas nuclear diplo- Deputy President Visits Shiite Festi- wrong to send brave men and
credible alternative to propaganda March 10, 2016, news brief: Three Pal- macy. At least five stories, published val in Iraq. women out on missions for which
from Tehran. estinians and One American Killed in between 2012 and 2017, described Like any item that might appear in they arent fully prepared or with-
But Farda too often fails to deliver. Clashes in Israel. The implication of critics of Mr. Obamas engagement Islamic Republic of Iran Broadcast- out the best equipment the nation
Nowhere is this more apparent than saying that Palestinians were killed in with Tehran as extremists and ing, these U.S.-funded stories defer- can produce.
in its treatment of Israel. Heres how impersonal clashes is that unmen- their views of Iranian realities as entially quoted one Iranian official President Trump has committed
it recounted a Palestinian attack that tioned Israelis hover in the back- amateurish. after another without offering con- to rebuilding Americas military, but
took place March 19, 2016, amid last ground as potential culprits. It is only The extremists in question in- text or any alternative view. Mr. Pejic his first budget proposal doesnt
years stabbing intifada: Israeli me- in the second paragraph that the story cluded Sen. John McCain, congressio- agreed that these stories were in- follow through on that promise. Ad-
dia, quoting security officials, identifies the attacker as a Palestinian nal opponents of the deal generally, complete. mittedly, very few of his Pentagon
claimed that Abdullah Ajlouni, a 20- man. Omitted altogether is that the GOP aides on Capitol Hill, the Ameri- If any federal agency could use a appointees were in place to help
year-old youth, had, as Israeli media clashes started after he began stab- can Israel Public Affairs Committee Trumpian shake-up, the Broadcasting write the budget. Still, the proposal
put it, approached several Israeli sol- bing mainly Jewish civilians. and the Foundation for Defense of Board of Governors is it. he sent to Congress for next year
diers in a suspicious manner, and Such obfuscation of assailants Democracies. adds to defense spending a mere 3%
had tried to attack them. and victims identities reinforces the Mr. Pejic said the label extremist Mr. Ahmari is a Journal editorial above President Obamas last bud-
In fact, Israeli forces didnt open frame, familiar to Iranians from was misused with respect to Mr. writer in London. get. Although it may stop the bleed-
fire on Ajlouni merely because he had their own media, in which Israelis ing, it wont do much to help the
acted suspicious. Ajlouni had pulled a are always aggressors. Mr. Pejic ac- military get well.
knife and stabbed one of the soldiers knowledged that this story was in- At the same time, the Pentagon
before they opened fire. complete. Notable & Quotable: Hillary needs to get better value for the
money its spends. Outdated acqui-
From Can Hillary Clinton Please driver to stagger back to the wheel sition systems result in wasted dol-
Go Quietly Into the Night? by T.A. and call out Onward together! On- lars and delays in getting our
PUBLISHED SINCE 1889 BY DOW JONES & COMPANY Frank, VanityFair.com, June 9: ward, fine. Together, maybe not. troops the weapons and equipment
Rupert Murdoch Robert Thomson All of this would be easier to take they need. That is why defense re-
Executive Chairman, News Corp Chief Executive Officer, News Corp Theres a fine lineor maybe not if Hillary were on a crusade for a form has been, and will continue to
Gerard Baker William Lewis even so fine a linebetween boost- distinctive cause, in the manner of be, such a high priority for the
Editor in Chief Chief Executive Officer and Publisher ing morale and monopolizing the Bernie Sanders or Pat Buchanan or House and Senate Armed Services
Matthew J. Murray DOW JONES MANAGEMENT: spotlight. One reason Bill Clinton Jesse Jackson or Ross Perot. But Committees.
Deputy Editor in Chief Mark Musgrave, Chief People Officer; was able to make a name for him- when she offers her take on the But fixing the militarys planes
Edward Roussel, Innovation & Communications;
DEPUTY MANAGING EDITORS:
Anna Sedgley, Chief Operating Officer & CFO;
self decades ago was that previous world, she speaks in clichs and and ships cannot wait until the bud-
Michael W. Miller, Senior Deputy;
Thorold Barker, Europe; Paul Beckett, Katie Vanneck-Smith, President candidates had the grace to get out vague generalities like progress get is balanced. Americas military
Washington; Andrew Dowell, Asia; OPERATING EXECUTIVES: of the way. Jimmy Carter and Wal- versus turning back the clock. personnel need those tools now.
Christine Glancey, Operations; Ramin Beheshti, Product & Technology; ter Mondale and Michael Dukakis Such teleological smugness (to Few remember how fierce the oppo-
Jennifer J. Hicks, Digital; Jason P. Conti, General Counsel;
Neal Lipschutz, Standards; Alex Martin, News; Frank Filippo, Print Products & Services; werent trying to place themselves which Barack Obama was likewise sition was to the defense buildup of
Shazna Nessa, Visuals; Ann Podd, Initiatives; Steve Grycuk, Customer Service; at center stage during the cam- prone) doesnt just attract the ire of the 1980s. But looking back, Presi-
Matthew Rose, Enterprise; Kristin Heitmann, Transformation; paign of 1992. The Clintons, by con- conservatives; liberals can get dent Reagans policy was obviously
Stephen Wisnefski, Professional News Nancy McNeill, Advertising & Corporate Sales;
Jonathan Wright, International trast, kept sticking around. . . . As a miffed, too. Is progress on the side the right onefor those who served
Paul A. Gigot, Editor of the Editorial Page;
Daniel Henninger, Deputy Editor, Editorial Page
DJ Media Group: friend of mine recently wrote to me of expanding NATO or the opposite? and for the good of mankind.
Almar Latour, Publisher; in an e-mail, They both had to be Is it on the side of greater National I hope that 30 years from now
WALL STREET JOURNAL MANAGEMENT: Kenneth Breen, Commercial
Suzi Watford, Marketing and Circulation; Professional Information Business: president? Security Agency surveillance or of they can say we did the right thing
Joseph B. Vincent, Operations; Christopher Lloyd, Head; Even the name of [Mrs.] Clintons less? Is it in favor of immigration as well.
Larry L. Hoffman, Production Ingrid Verschuren, Deputy Head PAC has a presumptuous ring to it. amnesty or high-tech border secu-
EDITORIAL AND CORPORATE HEADQUARTERS: When someone has driven a bus off rity? We all want to move forward, Mr. Thornberry, a Texas Republi-
1211 Avenue of the Americas, New York, N.Y., 10036 the road and hurled passengers out but maybe were not all facing Hil- can, is chairman of the House
Telephone 1-800-DOWJONES
of their seats, its a bad time for the larys way. Armed Services Committee.
A12 | Tuesday, June 13, 2017 THE WALL STREET JOURNAL.
ALEX SCOTT FOR THE WALL STREET JOURNAL (4); 6 SHORE ROAD
Shoppers turn into walking billboards for brands as bags
become visible status symbols
2017 Dow Jones & Co., Inc. All rights reserved. 6DJ5150
TECHNOLOGY: CYBER EXPERTS IDENTIFY MALWARE THAT COULD DISRUPT U.S. POWER GRID B4
Euro vs. Dollar 1.1203 0.05% FTSE 100 7511.87 g 0.21% Gold 1266.10 g 0.19% WTI crude 46.08 0.55% German Bund yield 0.250% 10-Year Treasury yield 2.215%
STREETWISE |
rising oil prices. U.S. crude fu- Several market watchers
Ranks
By James Mackintosh
Roiled
Hot Sector, Again
Crowded BY GREG BENSINGER
A
Adam Opel .................. B3
Aetna...........................A7
General Motors...........B3
Goldman Sachs Group
............................... B1,B7
Great Eastern ............. B7
Peugeot-Citroen..........B3
Qatar Airways.............B3
R-S
STREET What Goes Up Must Come Down a Bit
Shares in leading technology stocks have dropped sharply but
remain strongly ahead for 2017.
panies. History has shown
time and again that execu-
tives without effective
checks and balances waste
Alibaba Group Holding Rotary International .. A3
.....................................B4 Gymboree....................B4 Schulte Roth & Zabel.B5
Continued from the prior page company cash on poorly
Alphabet ................ B1,B4 H-K Yet, tech stocks arent re- 35% thought out or overly ex-
Sharp...........................B4
Alstom ........................ A2 Hisense Electric..........B4 Sony.............................B4 peating the dot-com bubble pensive vanity projects, and
Amazon.com..........A5,B1 Hon Hai Precision Starboard Value..........B5 Amazon.com
American International
of 2000. Its true that be- 30 Stock and index founders of several of the
Industry.....................B4 Starwood Capital Group
Group.........................B5 .....................................B5 fore its drop on Friday, the performance Facebook biggest tech businesses
JANA Partners............B5
Apple ................ A9,B1,B4 J.P. Morgan Chase......B5 T-V S&P tech sector came have kept control of their
Arconic ........................ B5 Jupiter Impex ............. A5 within 0.1% of breaking its 25 companies through special
Astro Malaysia Holdings Tata Motors................B4 Apple
Kohl's...........................B5 Toshiba........................B4 dot-com high for the first share classes.
.....................................B7
L-N Trian Fund Management time. But unlike 2000, many Alphabet Mark Zuckerberg still
B-C ............................... A1,B8 20 (Google)
Lotte Chemical Titan..B7 of todays tech stocks are controls 60% of Facebook
Baker Hughes ............. B8 Lotte Group.................B7 Trump International
Citigroup......................B7 Lyft..............................B4 Hotel.........................A6 well established and run votes, co-founders Larry
CSX..............................B5 Maybank Asset Uber Technologies.B1,B4 highly profitable oligopo- 15 Page and Sergey Brin con-
D-E Management.............B7 Valeant Pharmaceuticals lies. trol 51% of Alphabet votes,
Microsoft.....................B1 International.............B5
Darden Restaurants ... B5 In the long term, the Microsoft and Snap Inc.s IPO this
Dragos.........................B4 Mitsubishi Motors......B4 W-X 10
Morgan Stanley..........B7
danger is that hubris in the year gave buyers of its
ESET............................B4 Wal-Mart Stores.........B4 S&P 500
Nestle..........................B1 boardrooms of tech compa- shares zero votes.
F-G Warner Chilcott..........B5
Neuberger Berman Wellmark Blue Cross nies will lead them to frit- 5 There are other risks.
Facebook................B1,B4 Group.........................B5
Ford Motor..................B5
and Blue Shield........A7 ter away shareholder cash New tech eventually dis-
Nokia...........................B2 Whole Foods Market..B5
Forest City Realty Trust Nvidia..........................B1
as they set out on a rupts old tech; could a new
XBiotech......................B8 0 As of noon EDT
.....................................B5 landgrab of new technolo- approach to social media
FujiFilm Holdings........B4 P-Q Y-Z Jan. Feb. March April May June
GE Capital...................A2 Permodalan Nasional . B7 Yancoal Australia........B4
gies away from their core send Facebook the way of
General Electric Pershing Square Capital Yanzhou Coal Mining..B4 expertise. Source: Thomson Reuters THE WALL STREET JOURNAL. Myspace, or a new phone
..........................A1,A2,B8 Management.............B5 Zoetis..........................B5 Apple has put the hub style leave Apple looking
in hubris with its flashy ing shares. Are they high- stocks implies the former, like Nokia Corp.? Hard to
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BUSINESS NEWS
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Finance chief gets
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Higher Taxes prepares to complete place a 10-year plan that in-
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BY TREFOR MOSS its deal for car maker ment from GM for investment
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YOU CAN
But, as for many British in- for producing wine, from the to 7% to our capital invest-
dustries, the reality isnt vines themselves, to ferment- ment bill over the next year,
straightforward. Plus, last ing tanks, glass bottles and Mr. Driver said.
weeks U.K. election adds to corks, can only be bought This could mean a bill
uncertainty over what Brexit abroad and usually come from roughly 200,000 to 280,000
will look like, winegrowers France or elsewhere in the eu- higher than before the Brexit
say. rozone. vote.
English winemakers must Winegrowers now have to However, Mr. Driver be-
buy their gear and vines from buy at the new exchange rate, lieves the weaker pound will
DO IT.
countries where winemaking said Mr. Lindo. It depends be positive for sales as over-
is better established. English what stage of the cycle youre seas buyers find it cheaper to
wine is a niche product, atif youre just starting out, buy English wine.
mostly sold domestically; un- then youve had a 7 or 8% in- Others in an industry that
like Scottish whiskey, the crease in costs. mostly favored staying in the
global market is small. And Mr. Lindo, whose Camel EU echoed his concerns.
domestic drinkers arent read- Valley vineyard is based It is affecting margins. It
ily willing to give up their be- in Cornwalla southwest re- does have an impact, said Ta-
loved Champagne, even if Eng- gion that voted to leave the mara Roberts, chief executive
lish wine comes with a European Union in last years of Ridgeview Estate. Her com- Walt Disney
cheaper price tag. referendumadded that he pany, which makes spar-
kling wine in Sussex, south of
London, is the official supplier
to receptions at the U.K. prime
ministers Downing Street res-
idence.
Ms. Roberts said domestic Our mission is to uncover, nurture and guide the most promising
and foreign sales had been
buoyant in the first half of entrepreneurial talent in technology across Europe. With the support
2017, but it was hard to know of corporates, our not-for-prot community welcomes talented
how much of this was due to
the pounds fall. individuals who are not currently founders, but
She said she saw little exhibit signals that they will be.
ANDREW MATTHEWS/PA WIRE/ZUMA PRESS
TECHNOLOGY WSJ.com/Tech
Cyber Experts
Identify Malware
That Hit Grid
BY ROBERT MCMILLAN than merely reconnaissance as
in some other examples of
Computer-security re- such software. That makes it
searchers said Sunday they the most powerful industrial-
have discovered the malicious attack code uncovered since
software that knocked out Stuxnet, the software jointly
electricity in Ukraines capital developed by the U.S. and Is-
last year, and warned U.S. rael a decade ago to disrupt
companies that the code could Irans Natanz nuclear enrich-
be repurposed to disrupt sys- ment facility, he said.
tems in the U.S. Crashoverride is a selec-
The discovery sheds light tion of tools that are targeted,
on an incident that security well planned and tested, said
experts have been watching another industrial-control
CHESNOT/GETTY IMAGES
closely, hoping to understand system expert briefed on the
the risk to the U.S. electrical malicious software. Weve
grid. It follows a 2014 cyber- never seen this level of capa-
campaign against the U.S. in bilities before.
which networks at 17 energy The software runs on the
companies, including four Microsoft Windows operating
electric utilities, were com- system. Once installed on a A conference last year in Paris. A Facebook news feature would be a boon to publishers as they emphasize digital subscriptions.
BUSINESS WATCH
UBER that is extraordinary for a
company of Ubers size. The
company, which investors
value at $68 billion, has expe-
Inc.s international division.
She also sits on the board of
China internet company Ali-
baba Group Holding Ltd.
of Harvard Business School
management professor Fran-
ces Frei and Apple Inc. music
executive Bozoma Saint John. GYMBOREE companies not seen as conven-
Continued from page B1 rienced a parade of executive Ms. Martello couldnt be Ms. Frei was hired as senior tional competitors in the car
Mr. Michaels exit, though, departures since early this reached for comment. Uber vice president of leadership Clothing Retailer business on autonomous-vehicle
could complicate a proposal year, including its heads of fi- declined to comment on her and strategy to assist the hu- Files For Bankruptcy technology and testing.
that Mr. Kalanick step aside nance, communications, prod- appointment. man-resources team, while Ms. Jaguar Land Rover, owned by
for a period. uct and ride-sharing. Uber The ride-hailing firms Saint John will be chief brand Childrens clothing seller Gym- Indias Tata Motors Ltd., follows
The board took no action fired the head of its autono- board is made up of investors officer. boree filed for bankruptcy, hop- General Motors Co. as a Lyft in-
on the idea and left it to Mr. mous vehicle development and and insiders, including Mr. Ka- For the first time in its ing to cement a deal to pare vestor. GM invested $500 million
Kalanick to decide, a person a senior vice president of en- lanick; Mr. Camp, the co- eight-year history, Uber re- more than $900 million in debt in the Uber Technologies Inc. ri-
familiar with the matter said. gineering. founder and chairman; Mr. leased diversity numbers in off its books and survive the val in early 2016. Lyft has struck
It isnt clear whether Mr. Ka- Uber is set to soon an- Graves, who at one time was March, showing it is about in- shakeout in the retail sector. deals with Alphabet Inc.s
lanick ultimately will take the nounce Ms. Martello, Nestls Ubers chief executive; private- line with other technology The San Francisco-based Waymo unit and NuTonomy Inc.
time off. executive vice president for equity billionaire David Bond- companies. companys survival would be to work on technology.
Uber confirmed Mr. Michael Asia, Oceania and sub-Saharan erman; media mogul Arianna As of the reports release, costly to unsecured creditors, as- John D. Stoll
is no longer with the company Africa, as its eighth voting di- Huffington; Yasir Al Ru- women comprised 36% of suming Gymboree succeeds in
and declined to comment fur- rector, according to people fa- mayyan, an official from a Ubers employees, thanks to a implementing a fast-track re- FUJIFILM
ther. Messrs. Kalanick and Mi- miliar with the matter. Saudi Arabian government in- prevalence of women in cus- structuring.
chael havent responded to re- Ms. Martello previously vestment fund; and venture tomer support and other non- Suppliers deemed critical to Scandal Losses Bigger
quests for comment. served as chief financial offi- capitalist Bill Gurley. technical jobs. On the techni- Gymborees continued business Than First Thought
Mr. Michaels departure ac- cer for the Kit Kat maker and The addition of Ms. Mar- cal team, 15% of employees will be paid in full, but general
centuates leadership turmoil was CFO for Wal-Mart Stores tello follows last weeks hiring were women. unsecured creditors are being of- Fujifilm Holdings Corp. said
fered nothing, according to a de- losses from accounting irregular-
scription of the restructuring ities in New Zealand were larger
Sharp Sues to Regain Use of Name in U.S. strategy buried in court papers.
More than 375 stores, and
perhaps as many as 450, would
be closed in the restructuring to
than first thought and extended
to the companys Australian of-
fice-equipment unit, a develop-
ment that raises further doubts
BY TAKASHI MOCHIZUKI Sharp said its testing found allow Gymboree to free up capi- about Japanese firms control
the Sharp-brand televisions tal to boost its online selling ef- over their overseas operations.
TOKYOSharp Corp. has made by Hisense violated U.S. fort, court papers say. The Japanese camera and
sued Chinas Hisense Electric Federal Communications Com- Gymboree has set a target copier maker said six board
Co., which licensed the Sharp mission standards. date of Sept. 24 to get confir- members at its subsidiary Fuji
brand for televisions sold in It said Hisense gave con- mation of a chapter 11 plan. Xerox would resign to take re-
DAVID CHANG/EUROPEAN PRESSPHOTO AGENCY
the U.S., accusing Hisense of sumers deceptive information Peg Brickley sponsibility for losses that bal-
putting the Sharp name on about the size and brightness and Imani Moise looned to 37.5 billion ($340
poor-quality TVs and decep- of the TVs, violating other fed- million) between fiscal 2010 and
tively advertising them. eral standards. Hisense said it LYFT 2015, from 22 billion. It also
The court action is the lat- did nothing wrong. docked pay from all the board
est effort by Osaka-based Hisense categorically de- Jaguar Invests members at Fuji Xerox and two
Sharp to retrieve the right to nies Sharps claims in the liti- in Ride-Sharing Firm senior group executives. Only
use its own name when selling gation and looks forward to one of the resigning board mem-
TVs in one of the worlds larg- presenting its case in the ap- Lyft drivers are getting an bers will stay with the company.
est markets. Sharp is trying to propriate forum, a company upgrade. Fujifilm said the scandal-re-
recover its position as a global representative told The Wall The U.K.s luxury-vehicle lated losses shouldnt widen fur-
maker of consumer electron- Street Journal. Hisense is in maker Jaguar Land Rover has in- ther because it had reviewed all
ics. Hisense rejected the alle- Sharp found its TVs made by Hisense violated U.S. standards. full compliance with the trade- vested $25 million in Lyft Inc., existing contracts at the two
gations and said it was selling mark license agreement and the latest auto company to units and didnt see the same
high-quality televisions under financial distress and selling Francisco, Sharp lawyers said Sharps attempt to terminate strike a deal with the Silicon problems in any of its other
the Sharp name. assets to raise cash. the Japanese companys brand the agreement is of no effect. Valley ride-hailing company. markets, including Japan.
The dispute illustrates the In 2016, Taiwans Foxconn and trademark are at risk of Hisense will continue to Under the agreement, the The latest example of Japa-
risks when the owner of a Technology Group, formally being destroyed by the time manufacture and sell quality companies will collaborate on nese accounting irregularities is
well-known brand name gives known as Hon Hai Precision the five-year term of the televisions under the Sharp li- mobility services, including self- likely to add to investors con-
up control over products sold Industry Co., took a control- Hisense agreement expires. censed brands. driving cars, and certain Lyft cerns over corporate governance
under that name. ling stake in Sharp for 388.8 It said that under Hisenses Waseda Business School drivers will be supplied with Jag- at Japans companies, after a
In 2015, Sharp signed a deal billion ($3.52 billion), and Fox- management, the televisions professor Atsushi Osanai, who uar or Land Rover vehicles, likely long-running accounting scandal
with Hisense giving the Chi- conn has sought to put the are shoddily manufactured used to work at Sony Corp.s for testing purposes. The part- at Toshiba Corp. and last years
nese company the right to use Japanese company back on a and in many cases, perceived TV unit, said the case was im- nership follows a wave of con- admission by Mitsubishi Motors
the Sharp name on TVs sold in growth track. by consumers as cheap. It portant to Sharps efforts to ventional auto companies pairing Corp. that it falsified fuel-effi-
the U.S. through 2020. In a complaint filed to a said it wanted Hisense to stop restore itself as a global with a growing patchwork of ciency data for some of its cars.
At the time, Sharp was in California state court in San using the Sharp name. brand. tech companies, startups or Megumi Fujikawa
THE WALL STREET JOURNAL. Tuesday, June 13, 2017 | B5
FORD LAND
good neighbors, said Michael 2009.
Powers, senior vice president We looked at 10 different
of leasing at Starwood. Then redevelopment plans, said
we found out they were in the Ford Motor moved its entire engineering and purchasing staff into this Dearborn, Mich., mall, above, which is now 91% leased. Guy Worley, chief executive
market for office space. It was and president of Columbus
somewhat serendipitous. gether and turning them into Dubensky, chairman and chief of the roughly 1,100 malls in other conveniencesand much Downtown Development Corp.,
As retailers close bricks- entertainment or industrial executive of Ford Land, the the U.S. will close in coming less retail. a nonprofit development firm.
and-mortar stores at an accel- parks. companys real estate arm. years. In Arlington, Va., landlord It was built to be a mall and
erating pace, shopping-center Fords 10-year lease at Fair- A construction binge in the Many mall owners are try- Forest City Realty Trust is nothing else.
landlords like Starwood Capi- lane Town Center brought 1980s and 1990s left the U.S. ing to liven up the experience, redeveloping Ballston Com- So, the city demolished the
tal are facing a vexing ques- 1,800 to 2,000 employed peo- oversaturated with malls. bringing more dining and en- mon Mall by knocking down property over a two-year pe-
tion: What to do with all this ple to our property, people Growth in online sales and de- tertainment tenants, and es- the main entrance to create a riod and retained the under-
empty space? with a paycheck, said Mr. clining demand for full-price chewing the traditional mix of plaza, removing two-thirds of ground parking structure,
Their solutions are varied Powers. The mall, which is still goods are causing retailers to middling food courts, fashion the roof and installing more which was still used by work-
but all have a common ele- anchored by Macys, J.C. Pen- shrink the number of stores retailers and department windows to create wider vis- ers downtown. In 2011, Colum-
ment: reducing, or even elimi- ney and Sears, is 91% leased, and divert resources to e-com- stores. tas of open spaces. The Cleve- bus Downtown opened a park
nating, retail from the equa- he said, and its food operators merce platforms. The appetite for experi- land-based real-estate invest- in its place called Columbus
tion. are doing better in the day- In all, retailers have an- mentation is there, said Mat- ment trust is also building 406 Commons, which has a perfor-
Some landlords plug empty time than they did before, as nounced 2,880 store closings thew Billerbeck, a Seattle- apartments linked to the mall. mance space, two cafes, a car-
spaces with churches, for- Ford workers pile in for lunch. from January to April 6 of this based senior vice president of Were turning the mall in- ousel and bocce courts.
profit schools and random en- Ford liked the malls prox- year, more than twice as many design and architecture at Cal- side out, said Will Voegele, The park has spurred devel-
terprises while they figure out imity to its main facility in as in the same period a year lisonRTKL. senior vice president at Forest opment around its perimeter,
a long-term plan. Others see a Dearborn, which is being re- earlier, according to Credit One strategy is to convert City Realty Trust. We dont mostly office and residential,
future in mixed-use real es- built over the next 10 years, Suisse Group AG. enclosed malls into open-air want a building with its back and hosts more than 200
tate, converting malls into and its wide open spaces. For the full year, the invest- properties that landlords call turned to the street. events annually. The flagship
streetscapes with restaurants, We didnt move walls, ment bank anticipates more lifestyle centers, with apart- The firm is converting what Lazarus department store,
offices and housing. And some didnt change anything in a than 8,600 stores to close. An- ments, theaters, grocery was once Macys furniture which had been linked to the
are razing properties alto- significant way, said Dave alysts predict that 400 or so stores, medical offices and store on the third level of the mall, is now an office building.
directors. Its hard to argue that they not right, said Valeant
After losing more than 40% hired someone with the skill Pharmaceuticals Interna-
since late 2013, shares rose sets described in our letter, tional Inc. finance chief Paul
2.2%. Mr. Kantor said. Herendeen.
CFO Charles Kantor A Whole Foods spokes- His experience dealing with
JOURNAL was less im- woman didnt respond to pressure from activists dates
pressed with a emails and phone calls seeking back to the middle part of the
different change. comment. last decade while CFO at War-
The portfolio manager at Neu- The kinds of opportunities ner Chilcott PLC, he said. Mr.
Goldman Sachs CEO Lloyd Blankfein, above, and Citis Michael Corbat were fooled by fake emails. berger Berman Group LLC activists exploit are changing, Herendeen was two months
was concerned that the finance and some practitioners are re- into a new CFO role at Zoetis
at the two banks. abled by a false email asking sneak in and somebody will be and aerospace-parts maker Ar-
The hoaxer, who last month to reset a password. tempted to click on a wrong conic Inc.
snared Barclays PLC chief Jes Mr. Blankfein received an link or respond to someone But pressure is mounting on
Staley and Bank of England email that appeared to be they shouldnt. CFOs, too, as they are more of-
Gov. Mark Carney, on Sunday from a top lieutenant, Harvey Many bankers, including ten given the job of cutting
published screenshots of the Schwartz. The prankster ap- those at Citigroup, access waste, increasing efficiency
exchanges on Twitter. Gold- peared to be looking for con- their email through third- and boosting margins.
man and Citigroup confirmed firmation that a pair of recent party security applications Mr. Kantors concerns about
the email exchanges. tweets from Mr. Blankfein such as those developed by Whole Foods speak to the vital
None of the executives dis- were a swipe at President Good Technology, now part of function that CFOs have as-
closed sensitive information in Donald Trumps infrastruc- BlackBerry Ltd. Those apps sumed. Mr. Manbeck previ- Whole Foods is facing calls to get a CFO with different experience.
responding to the prankster, ture agenda. screen links when they are
but the repeated episodes flag Tweet won some online clicked and block many of
concerns about whether banks
have done enough to guard
award for humorous tweet
Trump will be so pissed ;), it
them. Mr. Corbat, in his re-
sponse to the prankster, noted
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B6 | Tuesday, June 13, 2017 THE WALL STREET JOURNAL.
MARKETS DIGEST
Nikkei 225 Index STOXX 600 Index S&P 500 Index Data as of 4 p.m. New York time
Last Year ago
19908.58 t 104.68, or 0.52% Year-to-date s 4.16% 386.62 t 3.77, or 0.97% Year-to-date s 6.97% 2429.39 t 2.38, or 0.10% Trailing P/E ratio 24.15 24.29
High, low, open and close for each 52-wk high/low 20177.28 14952.02 High, low, open and close for each 52-wk high/low 396.45 308.75 High, low, open and close for each P/E estimate * 18.97 17.92
trading day of the past three months. All-time high 38915.87 12/29/89 trading day of the past three months. All-time high 414.06 4/15/15 trading day of the past three months. Dividend yield 1.95 2.16
All-time high: 2439.07, 06/02/17
Weekly P/E data based on as-reported earnings from Birinyi Associates Inc.
Close Open
t
International Stock Indexes Data as of 4 p.m. New York time Global government bonds
Latest 52-Week Range YTD Latest, month-ago and year-ago yields and spreads over or under U.S. Treasurys on benchmark two-year
Region/Country Index Close NetChg % chg Low Close High % chg and 10-year government bonds around the world. Data as of 3 p.m. ET
World The Global Dow 2772.96 8.43 0.30 2193.75 2791.48 9.7 Country/ Spread Over Treasurys, in basis points Yield
MSCI EAFE 1885.70 7.27 0.38 1471.88 1956.39 9.9 Coupon Maturity, in years Yield Latest Previous Month Ago Year ago Previous Month ago Year ago
MSCI EM USD 1007.71 10.48 1.03 691.21 1044.05 26.9 5.250 Australia 2 1.612 26.1 28.0 38.7 90.5 1.619 1.682 1.635
4.750 10 2.402 19.1 21.0 31.4 47.0 2.411 2.642 2.112
Americas DJ Americas 583.25 0.54 0.09 480.90 585.50 7.9
3.000 Belgium 2 -194.5 -193.2 -183.1 -122.8 -0.593 -0.537 -0.497
-0.594
Brazil Sao Paulo Bovespa 61657.42 553.14 0.89 48066.67 69487.58 2.4
0.800 10 0.587 -162.4 -159.7 -153.5 -135.8 0.605 0.793 0.284
Canada S&P/TSX Comp 15382.88 90.33 0.58 13609.58 15943.09 0.6
0.000 France 2 -0.515 -186.6 -185.8 -174.6 -115.8 -0.519 -0.451 -0.427
Mexico IPC All-Share 49129.33 47.60 0.10 43902.25 50154.33 7.6
1.000 10 0.607 -160.4 -155.5 -148.5 -125.3 0.646 0.843 0.389
Chile Santiago IPSA 3681.57 2.30 0.06 2998.64 3786.05 14.2
0.000 Germany 2 -0.756 -210.7 -208.7 -196.7 -127.0 -0.748 -0.672 -0.540
U.S. DJIA 21235.67 36.30 0.17 17063.08 21305.35 7.5
0.250 10 0.250 -196.1 -193.7 -193.3 -162.0 0.265 0.394 0.023
Nasdaq Composite 6175.46 32.45 0.52 4574.25 6341.70 14.7
0.300 Italy 2 -0.266 -161.7 -160.5 -147.6 -74.8 -0.266 -0.181 -0.017
S&P 500 2429.39 2.38 0.10 1991.68 2446.20 8.5
2.200 10 2.017 -19.5 -11.5 -7.6 -33.3 2.087 2.251 1.309
CBOE Volatility 11.47 0.77 7.20 9.37 26.72 18.3
0.100 Japan 2 -0.111 -146.2 -144.6 -147.1 -100.1 -0.107 -0.176 -0.271
EMEA Stoxx Europe 600 386.62 3.77 0.97 308.75 396.45 7.0 0.100 10 0.059 -215.2 -214.7 -228.3 -179.4 0.055 0.044 -0.152
Stoxx Europe 50 3181.93 28.14 0.88 2626.52 3279.71 5.7 4.000 Netherlands 2 -0.700 -205.1 -204.9 -189.7 -126.5 -0.710 -0.603 -0.534
Austria ATX 3168.56 40.71 1.27 1981.93 3212.50 21.0 0.750 10 0.469 -174.2 -172.2 -172.5 -151.5 0.479 0.603 0.127
Belgium Bel-20 3899.49 46.93 1.19 3127.94 4055.96 8.1 4.750 Portugal 2 0.082 -126.9 -122.1 -99.0 -48.2 0.118 0.305 0.248
France CAC 40 5240.59 59.12 1.12 3955.98 5442.10 7.8 4.125 10 2.965 75.4 79.5 103.2 145.1 2.997 3.360 3.094
Germany DAX 12690.44 125.28 0.98 9214.10 12878.59 10.5 2.750 Spain 2 -0.301 -165.2 -164.8 -155.6 -79.6 -0.310 -0.262 -0.066
Greece ATG 784.60 2.50 0.32 517.10 800.08 21.9 1.500 10 1.433 -77.8 -76.5 -71.2 -20.1 1.437 1.615 1.441
Hungary BUX 35334.48 76.53 0.22 25126.36 35423.40 10.4 4.250 Sweden 2 -0.740 -209.1 -206.2 -194.8 -128.1 -0.724 -0.654 -0.550
Israel Tel Aviv 1420.63 6.70 0.47 1372.23 1490.23 3.4 1.000 10 0.386 -182.5 -179.1 -173.0 -115.9 0.410 0.597 0.484
Italy FTSE MIB 20910.23 212.19 1.00 15017.42 21828.77 8.7 1.750 U.K. 2 0.073 -127.8 -124.7 -118.4 -33.1 0.092 0.110 0.400
Netherlands AEX 521.89 5.41 1.03 409.23 537.84 8.0 4.250 10 0.966 -124.5 -119.4 -123.8 -40.7 1.007 1.089 1.235
Poland WIG 60354.56 827.01 1.35 42812.99 62666.49 16.6 1.250 U.S. 2 1.351 ... ... ... ... 1.339 1.295 0.731
Russia RTS Index 1041.49 Closed 884.83 1196.99 9.6 2.375 10 2.211 ... ... ... ... 2.201 2.328 1.642
Spain IBEX 35 10842.40 135.90 1.24 7579.80 11184.40 15.9
Sweden SX All Share 588.60 6.43 1.08 443.66 595.45 10.1 Commodities Prices of futures contracts with the most open interest 3:30 p.m. New York time
Switzerland Swiss Market 8807.85 38.00 0.43 7475.54 9136.95 7.2 EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; ICE-US: ICE Futures U.S.; MDEX: Bursa Malaysia
South Africa Johannesburg All Share 51564.00 652.93 1.25 48935.90 54716.53 1.8 Derivatives Berhad; TCE: Tokyo Commodity Exchange; COMEX: Commodity Exchange; LME: London Metal Exchange;
NYMEX: New York Mercantile Exchange; ICE-EU: ICE Futures Europe. *Data as of 6/09/2017
Turkey BIST 100 99442.11 499.24 0.50 70426.16 99707.33 27.3
One-Day Change Year Year
U.K. FTSE 100 7511.87 15.46 0.21 5788.74 7598.99 5.2 Commodity Exchange Last price Net Percentage high low
376.75 -11.00 -2.84% 393.75 360.75
Asia-Pacific DJ Asia-Pacific TSM 1624.47 3.68 0.23 1308.52 1637.17 14.2 Corn (cents/bu.) CBOT
Soybeans (cents/bu.) 932.00 -9.50 -1.01 1,092.50 909.50
Australia S&P/ASX 200 5677.80 Closed 5103.30 5956.50 0.2
Wheat (cents/bu.)
CBOT
CBOT 434.00 -11.75 -2.64 488.75 416.00
China Shanghai Composite 3139.88 18.52 0.59 2833.07 3288.97 1.2
Live cattle (cents/lb.) CME 121.875 -1.975 -1.59 127.650 99.400
Hong Kong Hang Seng 25708.04 322.25 1.24 20038.42 26063.06 16.9
Cocoa ($/ton) ICE-US 2,092 54 2.65% 2,281 1,767
India S&P BSE Sensex 31095.70 166.36 0.53 25765.14 31309.49 16.8
Coffee (cents/lb.) ICE-US 129.60 0.75 0.58 163.75 127.65
Japan Nikkei Stock Avg 19908.58 104.68 0.52 14952.02 20177.28 4.2
Sugar (cents/lb.) ICE-US 14.23 -0.24 -1.66 20.50 13.93
Singapore Straits Times 3248.34 5.85 0.18 2729.85 3271.11 12.8
Cotton (cents/lb.) ICE-US 72.39 -0.10 -0.14 75.72 69.81
South Korea Kospi 2357.87 23.82 1.00 1925.24 2381.69 16.4 Robusta coffee ($/ton) ICE-EU 2029.00 27.00 1.35 2,283.00 1,871.00
Taiwan Weighted 10109.96 89.69 0.88 8458.87 10226.84 9.3
Copper ($/lb.) COMEX 2.6170 -0.0325 -1.23 2.8400 2.4725
Source: SIX Financial Information;WSJ Market Data Group Gold ($/troy oz.) COMEX 1269.00 -2.40 -0.19 1,300.30 1,155.00
Silver ($/troy oz.) COMEX 16.965 -0.258 -1.50 18.725 16.060
Currencies London close on June 12 Aluminum ($/mt)* LME 1,902.50 -1.00 -0.05 1,972.00 1,688.50
Tin ($/mt)* LME 18,975.00 -200.00 -1.04 21,225.00 18,760.00
Yen, euro vs. dollar; dollar vs. major U.S. trading partners US$vs,
Mon YTDchg Copper ($/mt)* LME 5,764.00 88.50 1.56 6,156.00 5,491.00
Country/currency in US$ per US$ (%) Lead ($/mt)* LME 2,115.00 28.00 1.34 2,445.00 2,022.00
20%
Europe Zinc ($/mt)* LME 2,496.00 16.00 0.65 2,958.50 2,450.50
Bulgaria lev 0.5736 1.7435 6.2 Nickel ($/mt)* LME 8,865.00 10.00 0.11 11,095.00 8,780.00
10 Yen
0.1512 6.615 7.8
s
Croatia kuna Rubber (Y.01/ton) TCE 186.90 -0.10 -0.05 n.a. n.a.
sWSJ Dollar index Euro zone euro 1.1203 0.8927 6.1
0 Palm oil (MYR/mt) MDEX 2,420.00 unch. unch. 2,966.00 2,390.00
Czech Rep. koruna-b 0.0427 23.396 8.9
s Denmark krone 0.1506 6.6384 6.1 Crude oil ($/bbl.) NYMEX 46.32 0.25 0.54 58.30 44.45
10 Euro 0.003642 274.61 6.7
Hungary forint NY Harbor ULSD ($/gal.) NYMEX 1.4274 -0.0038 -0.27 1.7901 1.3846
Iceland krona 0.010028 99.72 11.7 RBOB gasoline ($/gal.) NYMEX 1.4872 -0.0145 -0.97 1.8859 1.4543
20 Norway krone 0.1180 8.4713 2.0
0.2669 3.7469 10.5
Natural gas ($/mmBtu) NYMEX 3.013 -0.026 -0.86 3.5770 2.8880
2016 2017 Poland zloty
Russia ruble-d 0.01753 57.030 6.9 Brent crude ($/bbl.) ICE-EU 48.34 0.19 0.39 60.21 46.98
US$vs, US$vs,
YTDchg YTDchg Sweden krona 0.1144 8.7450 4.0 Gas oil ($/ton) ICE-EU 425.25 -2.00 -0.47 529.00 415.75
Mon Mon
Country/currency in US$ per US$ (%) Country/currency in US$ per US$ (%) Switzerland franc 1.0319 0.9691 4.9
Turkey lira 0.2837 3.5249 0.04 Sources: SIX Financial Information; WSJ Market Data Group
Americas Hong Kong dollar 0.1282 7.8003 0.6
Ukraine hryvnia 0.0384 26.0715 3.7
Argentina peso-a 0.0627 15.9478 0.5
India rupee
Indonesia rupiah
0.0155
0.0000753
64.4817 5.1
13285 1.8
U.K. pound 1.2652 0.7904 2.4 Cross rates London close on Jun 12
Brazil real 0.3019 3.3122 1.8 Middle East/Africa
Japan yen 0.009116 109.69 6.2
Canada dollar 0.7432 1.3456 0.1 USD GBP CHF JPY HKD EUR CDN AUD
Kazakhstan tenge 0.003161 316.40 5.2 Bahrain dinar 2.6508 0.3773 0.02
Chile peso 0.001511 661.70 1.2 Australia 1.3271 1.6787 1.3691 0.0121 0.1701 1.4865 0.9863 ...
Macau pataca 0.1246 8.0267 1.4 Egypt pound-a 0.0552 18.1015 0.2
Colombia peso 0.0003419 2925.00 2.6 Canada 1.3456 1.7020 1.3883 0.0123 0.1725 1.5071 ... 1.0138
Malaysia ringgit-c 0.2344 4.2655 4.9 Israel shekel 0.2823 3.5422 8.0
Ecuador US dollar-f 1 1 unch
New Zealand dollar 0.7202 1.3885 3.8 Kuwait dinar 3.2949 0.3035 0.7 Euro 0.8927 1.1293 0.9211 0.0081 0.1145 ... 0.6635 0.6728
Mexico peso-a 0.0550 18.1775 12.3
Pakistan rupee 0.0095 104.750 0.4 Oman sul rial 2.5972 0.3850 0.02 Hong Kong 7.8003 9.8672 8.0489 0.0711 ... 8.7373 5.7971 5.8782
Peru sol 0.3053 3.2758 2.3
Philippines peso 0.0202 49.595 0.02 Qatar rial 0.2725 3.670 0.8 Japan 109.6940 138.7700 113.1900 ... 14.0630 122.8900 81.5300 82.6600
Uruguay peso-e 0.0351 28.490 2.9
Singapore dollar 0.7223 1.3844 4.3 Saudi Arabia riyal 0.2666 3.7504 0.01 0.9691 1.2261 ... 0.0088 0.1242 1.0857 0.7203 0.7303
Venezuela bolivar 0.100050 10.00 unch Switzerland
South Korea won 0.0008835 1131.82 6.3 South Africa rand 0.0778 12.8459 6.2
U.K. 0.7904 ... 0.8156 0.0072 0.1013 0.8856 0.5875 0.5957
Asia-Pacific Sri Lanka rupee 0.0065664 152.29 2.6 Close Net Chg % Chg YTD % Chg
0.7535 1.3271 4.4 Taiwan dollar 0.03309 30.225 6.9 U.S. ... 1.2652 1.0319 0.0091 0.1282 1.1203 0.7432 0.7535
Australia dollar WSJ Dollar Index 88.47 0.04 0.05 4.81
China yuan 0.1471 6.7982 2.1 Thailand baht 0.02935 34.070 4.9 Sources: Tullett Prebon, WSJ Market Data Group Source: Tullett Prebon
WASHINGTONThe Trump
administration was ready to
own, once Mr. Trumps team
completes the process of ap-
pointing new regulators.
Goldman
recommend limits on the U.S. Regulators are already re- BY LIZ HOFFMAN
consumer-finance regulator viewing the Volcker rule, for
and a reassessment of a broad instance, and people familiar A wind farm in Scranton,
range of banking rules in a re- with the matter said the re- Pa., sitting over ancient coal
port to be released as early as port examines how the current seams, will soon power Gold-
Monday, according to people enforcement environment for man Sachs Group Inc.s data
Lotte Decides on Price Range for Chemical IPO nue last quarter.
Goldman wont just be in
the renewables market for its
own needs. The firms com-
BY YANTOULTRA NGUI lion ringgit ($1.39 billion), and asset managers Maybank produces plastics including zlement in October. Lotte modities arm has been build-
making the IPO Malaysias Asset Management and East- polyethylene used in shopping apologized for causing con- ing a business to connect cor-
KUALA LUMPUR, Malay- largest since the pay-television spring Investments. Corner- bags and toys, plans to use cern and said it would coop- porate buyers of electricity
siaSouth Koreas Lotte operator Astro Malaysia stone investors are generally most of the IPO proceeds to erate with the investigation with developers.
Group plans to offer shares in Holdings Bhd. raised $1.5 bil- allocated substantial blocks of build a naphtha plant in Indo- process. In January, the chair- That group, reporting to
its petrochemical unit in Ma- lion in 2012. IPO shares in exchange for a nesia, according to a draft mans sister was sentenced to commodities chief Greg Agran,
laysia at between 7.80 ringgit Four so-called cornerstone commitment to hold the stock prospectus filed with the Se- three years in prison. will manage the 15-year elec-
and 8 ringgit ($1.83 and $1.88) investors have agreed to take for a set period, but there is curities Commission. Lotte is South Koreas fifth- tricity contract, protecting
each, according to two people up to 20% of the IPO, The Wall no lockup period for this IPO, An IPO of Lotte Chemical largest conglomerate. Besides Goldman from price swings,
with direct knowledge of the Street Journal reported they added. Titan had been planned for petrochemicals, it has inter- grid congestion and other
initial public offering. Wednesday. The people famil- A Lotte Group spokes- last year, but the offering was ests in duty-free stores, luxury risks.
If the stock sells at the high iar with the IPO identified woman said the company delayed after South Korean hotels and insurance. It boasts It hopes to market that
end of the price range, the them as Malaysian state- could not comment on de- prosecutors charged the par- annual sales of about $74 bil- same service to a group of
740.4 million shares in Lotte owned fund manager Per- tailed information about the ent companys chairman and lion, and has been controlled companies that are striking
Chemical Titan being sold modalan Nasional Bhd., the process. four of his family members by the Shin family since it was their own power agreements,
would be worth about 5.92 bil- insurance firm Great Eastern Lotte Chemical Titan, which with tax evasion and embez- established in 1948. Mr. Agran said in an interview.
Experience Win a pair of VIP tickets to the worlds biggest cycling race.
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2017 Dow Jones & Co., Inc. All rights reserved. 6DJ5495
B8 | Tuesday, June 13, 2017 THE WALL STREET JOURNAL.
MARKETS
THE DAILY SHOT By Lev Borodovsky
December
2000 20
10
December 10
2007
Recessions Start of U.S. 0 Recessions
0
recession 2001 05 10 15
2001 05 10 15
2 The number of workers quitting is
Openings at restaurants and hotels rising relative to those being hired.
have surged during the recovery.
Ratio of resignations to hires
800 thousand 0.6
Unemployment rising,
600 job openings falling
during recession June 2009 0.4
400 End of
recession 0.2
200 1
4 5 6 7 8 9 10 11 12%
0 Recessions Recessions
0
2001 05 10 15 Unemployed plus marginally attached workers (U-5) 2001 05 10 15
*The U-6 measure is total unemployed plus all marginally attached workers plus total employed part-time for economic reasons. The U-4 measure is total unemployed plus discouraged workers.
Sources: Bureau of Labor Statistics via Federal Reserve Bank of St. Louis (unemployment, openings); U.S. Employment and Training Administration (claims); National Federation of Independent Business (small businesses) THE WALL STREET JOURNAL.
Email: heard@wsj.com
HEARD ON THE STREET FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard
U.K. Drifts Away From Europe Recovery Microsofts Game Plan for Xbox One X
The U.K. wants to separate ritory for more than eight Microsoft is putting a for the same games as their Xbox One is estimated to
from Europe. Judging by eco- Breakdown months now. U.K. data have high price on its new lower-priced siblings, but have sold around half the
nomic and political out- Citigroup economic-surprise disappointed. Xboxbut the companys with more robust graphics. 60 million units that Play-
comes, it looks like it is get- indexes The clearest reversal is in real game lies elsewhere. Sony says its Pro has ac- Station 4 has since both
ting its wish. Eurozone U.K. foreign-exchange markets: Microsoft first teased counted for about 20% of consoles hit the market in
The U.K. election has left 100 The euro has reached its the development of a more total PlayStation 4 unit late 2013.
the incumbent Conservative 50 highest against sterling, powerful version of its sales since the launch, The Xbox One X wont
party under Prime Minister above 0.88, since the U.S. Xbox One videogame con- which suggests at least 2.5 change the console game
0
Theresa May in a much election in November, the sole a year ago. It lifted million PlayStation users for Microsoft. But a high-
weaker position. Uncertainty 50 event that put markets on the wraps on that machine have chosen to pay for end machine that appeals
over the economy and Brexit J F M A M J notice that politics mattered. on Sunday, ahead of the sharper resolution. to a small number of enthu-
has only risen. But other markets reflect the game industrys annual E3 That isnt a huge number, siasts may be helpful for
Note: Readings below zero indicate data is
That has overshadowed weaker than expected. shifting risks too. The 10- conference. although Microsoft will find the companys wider gam-
events in Europe. The first Source: FactSet year Italian bond yield has The new console, called it a challenge to match: The ing business. Microsoft gen-
round of parliamentary elec- THE WALL STREET JOURNAL. fallen to just above 2%, its the Xbox One X, is designed Xbox One X is priced $100 erates much higher returns
tions in France suggest there lowest since late January; to render games in super- higher than the PlayStation through software and ser-
will be a strong majority for diverged too. The U.K. U.K. stocks are underper- high-resolution, 4K graph- 4 Pro. It is also double the vices such as the popular
President Emmanuel Macron slipped in the first quarter to forming their European ics. It goes on sale in No- recently reduced price of Xbox Live, which hosts 52
to push ahead with reforms. the bottom of the European peers so far this year. vember with a starting the mainstream Xbox One million active users paying
In Italy, local elections pro- league table with growth of The eurozones many mov- price tag of $499. S. That means Microsoft is a monthly fee.
duced a subdued perfor- just 0.2% from a quarter ear- ing parts mean jitters about This represents Micro- charging a much higher That is up 13% from a
mance for the antiestablish- lier; the eurozone grew by continental politics will re- softs attempt at a mid-gen- premium than Sony, which year ago, despite a decline
ment 5 Star Movement. The 0.6%. Pleasant surprises in turn, particularly in Italy. But eration console update. has priced its Pro console in Xbox hardware sales
populist tide some saw eurozone data have contin- the U.K.s troubles are front Sony took a crack at it in at only 33% above the regu- over that time. It is a much
sweeping Europe has failed ued, with the Citigroup eco- and center. Eurozone assets, November with the launch lar PlayStation 4. better game for Microsoft
to advance. nomic-surprise index for the particularly the euro, look of the PlayStation 4 Pro. Microsoft also is working to be playing to win.
Economic outcomes have currency bloc in positive ter- more stable.Richard Barley Both consoles are designed from a smaller base. The Dan Gallagher