For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
50,000 EARNINGS ESTIMATES.
1 TOOL TO HELP MAKE SENSE OF THEM.
Learn more about the TD Ameritrade Earnings Tool on page R8.
Last week: DJIA 23557.99 À 199.75 0.9%
What’s
News
Business & Finance
T he number of people
visiting U.S. stores on
Thanksgiving and Black
Friday fell 4% from last
year, while online pur-
chases increased 18%. A1
 Meredith has agreed
to pay $18.50 a share in
cash for Time, valuing
the fabled New York pub-
lisher at $1.85 billion, in
a bet on the future of the
magazine industry. B1
 Trump and his pick for
acting director of the
CFPB were sued by an ap-
pointee of the agency’s de-
parting chief, who sought
to block the president. A1
 Loan growth at banks is
slowing, defying expecta-
tions of a banner year for fi-
nancial institutions after last
November’s elections. A1
 Powell is likely to sail
through confirmation as
Fed chairman with less
partisan wrangling than
previous nominees. A2
 SoftBank is expected to
proceed with an offer to
buy billions of dollars
worth of shares from
Uber’s stakeholders. B1
 Ford CEO Hackett wants
to focus on electric and driv-
erless cars, but the auto
maker’s efforts are being
hurt by safety-recall costs. B3
World-Wide
 Trump reiterated his
stance that the election of
Democrat Doug Jones to
the Senate would mark a
serious blow to the Repub-
lican agenda. A4
 Lawmakers are working
to accomplish a dizzying
list of tasks before the year
ends, including a tax over-
haul and a new federal
spending agreement. A4
 Pakistan’s law minister
resigned in a deal with Isla-
mists to end a three-week
demonstration that has
shaken the government. A5
 Rep. Conyers said he
would leave his committee
leadership post while an
ethics panel investigates
allegations of sexual ha-
rassment against him. A4
 Venezuela’s Maduro
named an active general to
lead the state oil company,
further empowering the
country’s military. A9
 The damage from the
Northern California wild-
fires is revealing the state’s
complex housing crisis. A3
 A looming U.S. sanc-
tions trial that could im-
plicate prominent Turkish
officials is inflaming ten-
sions between Washing-
ton and Ankara. A7
Journal Report
An entrepreneur
with autism finds
his own path. Small
Business, R1-8
CONTENTS
Business News...... B3
Crossword.............. A14
Heard on Street.. B11
Journal Report.. R1-8
Keywords................... B1
Life & Arts....... A11-13
s Copyright 2017 Dow Jones &
Company. All Rights Reserved
ADVERTISEMENT
* * * * * * MONDAY, NOVEMBER 27, 2017 ~ VOL. CCLXX NO. 125 WSJ.com HHHH $4.00
NASDAQ 6889.16 À 1.6% STOXX 600 386.63 À 0.7% 10-YR. TREASURY À 3/32 , yield 2.342% OIL $58.95 À $2.24 EURO $1.1932 YEN 111.57
Trump, Congress Face Crowded Agenda, Controversy on Return Trump
Is Sued
In CFPB
Battle
ERIC THAYER/REUTERS
BY YUKA HAYASHI
WASHINGTON—An Obama-
era official at the Consumer Fi-
nancial Protection Bureau sued
the Trump administration Sun-
day night to block the installa-
tion of budget director Mick
Mulvaney from taking control
of the agency.
WILLIAM B. PLOWMAN/NBC/GETTY IMAGES
Leandra English, a career
staffer appointed to lead the
CFPB by its former director
MARK WILSON/GETTY IMAGES
Richard Cordray, filed the law-
ALEX WONG/GETTY IMAGES
suit in federal court the night
before the bureau was set to
reopen with dueling temporary
leaders vying to take it over. In
doing so, she touched off a le-
gal fight that will trigger court
interpretations on how differ-
FAST TRACK: President Donald Trump, departing Florida on Sunday, top, and Congress are dealing with issues ranging from the tax ent statutes regarding succes-
overhaul to charges of sexual harassment on Capitol Hill. House Minority Leader Nancy Pelosi, bottom center, declined to say whether sion apply to the unusual
Rep. John Conyers, left, should resign. Senate Majority Leader Mitch McConnell, right, could bring the tax proposal to a vote this week. A4 struggle over control of a fed-
eral agency.
President Donald Trump as-
serts he has the power to ap-
Black Friday Crowds Thin
point an acting director, while
the departing chief believed
the law says otherwise.
Last-minute maneuvering by
Mr. Cordray means that come
As more holiday sales stores on Thanksgiving and The number of people visit- console, the Super NES Classic, Monday morning, two different
Black Friday while online pur- ing U.S. stores on Thanksgiving which has been in short supply officials have a claim on the
shift online, retailers chases continued to surge. and Black Friday fell 4% from since it was released in Sep- acting top job: Mr. Mulvaney,
use new tactics, play On Thanksgiving evening, last year, according to RetailN- tember. who also serves as head of the
Alex and Yanira Garcia, who say ext Inc., which analyzes in-store Wal-Mart also calibrated the Office of Management and
to their strengths they traditionally buy nearly videos to count shoppers. selection of discounted prod- Budget, and Ms. English.
everything on Amazon, chose Meanwhile, online sales in- ucts it offers online versus in The lawsuit, filed at the U.S.
BY SARAH NASSAUER to stand in line at a busy Wal- creased 18% over that period, stores, U.S. CEO Greg Foran District Court for the District
AND LAURA STEVENS Mart store in Westbury, N.Y., to said software company Adobe said in an interview. of Columbia, escalates the con-
purchase pajamas, toys, a TV Systems Inc., a shift that is Online, the retailer offered frontation between the White
Wal-Mart Stores Inc. and and other gifts that filled two forcing traditional retailers to more electronics and bulky toys House and the Obama-era lead-
Amazon.com Inc. battled to shopping carts. adopt new tactics. that customers want shipped to ership of the CFPB, an inde-
capture spending over the holi- “I heard that lots of stores Best Buy Co. chose to hold homes, then stocked stores pendent agency created after
day weekend, as the shifts that are giving you deals so you back some deals from its web- with additional lower-priced the financial crisis.
have upended the retail indus- come in the store,” said Mr. site. On Saturday morning, the deals like $5 DVDs, pajamas Ms. English, a former chief
try this year were on display: Garcia, a 39-year-old cook at an retailer started selling only in and other items customers pre- of staff, was appointed by Mr.
fewer people visited traditional elementary school. stores a retro Nintendo game Please see STORES page A2 Please see CFPB page A4
OPEC Nears Deal to Extend Cuts
Loan Growth Hits a Rut OPEC and other major oil producers are expected to strike an
agreement this week to extend supply cuts. Some producers and
BY CHRISTINA REXRODE ness lending, an important vestment is rising. analysts caution a deal could cause prices to soar. B2
source of revenues for banks Tepid rates of loan growth
Total oil inventories in OECD countries
Loan growth at banks is in recent years, plumbed its along with continued low long-
slowing, casting a cloud over lowest level since the first term interest rates have taken compared with their five-year averages
what was supposed to have quarter of 2011. some of the sizzle out of bank 400 million barrels
been a banner year for finan- While loan balances are still stocks. Financial shares were
cial institutions following last rising, the slowing rate of among the chief beneficiaries 300 ABOVE
November’s elections. growth has defied the expecta- of last November’s election sur- AVERAGE
The rate of 12-month loan tions of bankers. Many have prise, soaring on hopes of a 200
growth at U.S. banks in the spent the year looking for tax-code overhaul, lighter regu-
third quarter hit its lowest growth-reviving catalysts that lation and stronger economic 100
level since the end of 2013, ac- never came and remain puz- growth. With progress in these
cording to data released last zled by the slowdown. areas uneven during 2017, gains
0
week by the Federal Deposit Even more surprising is are more muted.
Insurance Corp. That marked that falling rates of loan The KBW Nasdaq Bank In-
the sixth consecutive quarter growth are occurring as many dex, a measure of 24 of the –100 BELOW
of decline for this measure of signals point to a more buoy- largest commercial banks, is AVERAGE
loan growth. ant U.S. economy. Unemploy- up about 8% since the start of –200
Growth in each of the four ment continues to decline, the year, about half the rise of 2014 ’15 ’16 ’17
major lending categories mea- gross domestic product the S&P 500. Source: International Energy Agency THE WALL STREET JOURNAL.
sured by the FDIC fell. Nota- growth came in at 3% in the “There was such enthusi-
bly, the growth rate for busi- third quarter and business in- Please see LOANS page A6
U.S. Mint Makes a Mint Selling
Gold Coins at a 25% Markup A Self-Made Star Shows One
i i i
‘Proof condition’ collectibles don’t shine
Way to Crack the Gen Z Code
as investments in retirement accounts
BY MICHAEL ROTHFELD sheathed in plastic and never
Advertisers are flocking to Liza Koshy, a 21-year-old YouTube celebrity
touched by human hands. Last
The U.S. Mint makes a pretty year, sales totaled $112 million. BY JOHN JURGENSEN The intersection of old and new media was
penny selling gold and silver The government currently is a nod to one of the biggest challenges facing
coins. But there are two sides to selling the gold-coin proofs at a A recent video by 21-year-old YouTube star entertainment companies and marketers: The
Markets............. B10-11 the deal, which 25% markup over Liza Koshy had her in mustache and wig to Gen Z audience, which watches video from a
Opinion.............. A15-17
Sports....................... A14 some investors are per-ounce gold play a favorite character, the heavily accented wide variety of online platforms and which of-
Technology............... B4 calling highway rob- prices, a premium Jet Packinski. She deadpanned silly answers ten embraces self-made stars, is tough to cap-
U.S. News............. A2-4 bery. that can run as high to questions like “Favorite type of flower?” ture.
Weather................... A14
World News....... A5-9
After years of as $360 per coin. (“Gluten free”) and “How would you describe The generation—young people born after
making pennies and The silver coins yourself?” (“Using adjectives”). about 1996—favors irreverent, DIY stars seen
nickels that cost carry a more than It was a parody of Vogue magazine’s 73 as “authentic,” who produce bite-size content,
> more to produce 200% premium over Questions video series with celebrities. Ms. sometimes daily, tailored to social-media and
than they are worth, market silver prices. Koshy’s parody has notched 18 million other outlets.
the Treasury De- Gold proof coin That might be views—even more than the 16 million views They were raised on smartphones, and no
partment is making well worth it for racked up by a real Vogue episode with pop single app or social media platform—Snap-
a mint off a line of pricey Amer- coin collectors and hoarders— music superstar Taylor Swift. This month, chat, Instagram, Musical.ly—monopolizes
ican Eagle coins in what is or for stashing in a post-apoca- Vogue released a real 73 Questions with the their time. When it comes to entertainment
known as proof condition— Please see COINS page A10 comedian. Please see STAR page A10
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A2 | Monday, November 27, 2017
THE OUTLOOK | By Nick Timiraos
Fed Plan for 2017 Nears Completion
Federal Re-
serve officials
are preparing
to raise inter-
est rates in De-
cember, allow-
ing them to accomplish
something that eluded them in
each of the past two years:
They will have delivered on
their projections at the start
of the year, which for 2017
showed three rate increases
plus the start of the shrinking
of their large bond portfolio.
Whether officials can pull
off a repeat performance by
sticking to their road map of
gradual rate increases again
next year is clouded by con-
flicting signals on two items
that matter most to the cen-
tral bank: employment and in-
flation.
Steady job gains have
dropped the unemployment
rate to lower-than-expected
levels, at 4.1% in October, a 17-
year low. If the unemployment
rate drops next year as much
as it did this year—a 0.7 per-
centage point slide—it would
plumb lows not seen since the
late 1960s.
Yet inflation has been puz-
zlingly soft. After nosing
above the Fed’s 2% target for
the first time in five years at
the start of 2017, it slowed un-
expectedly and hasn’t yet re-
bounded. Excluding volatile
food and energy categories,
the Fed’s preferred inflation
gauge rose just 1.3% from a
year earlier in September.
At first, officials believed a
few idiosyncratic price de-
clines, such as wireless phone
plans and prescription drugs,
were to blame, though the
Fewer Pitfalls Are Seen for Powell in Confirmation
BY JOSH ZUMBRUN
Jerome Powell is likely to sail
through confirmation as Federal
Reserve Board chairman, even
though the process has grown
increasingly politicized since the
days when Ben Bernanke was
confirmed as Fed chief in 2006
by a voice vote with little oppo-
sition.
Mr. Powell, now a Fed gover-
nor, heads into his confirmation
hearing Tuesday before the Sen-
ate Banking Committee having
garnered support from Republi-
cans and Democrats. It isn’t the
first time he has been a Fed can-
didate who offered the path of
least resistance.
The recent wrangling started
in 2007, when President George
W. Bush nominated two bankers,
Larry Klane and Elizabeth Duke,
to the Fed board of governors.
The Senate Banking Committee,
then led by Connecticut Demo-
THANK YOURSELF
SALE
DESIGNER COLLECTIONS
ARE UP TO
40%FF
B A R N E Y S.C O M NE W YORK
CHICAGO BOSTON L AS VEGAS
F O R I N S I D E R FA S H I O N A C C E S S : T H E W I N D O W. B A R N E Y S . C O M
*Up to 40 percent off regular prices on select clothing, shoes, and
accessories for women, men, and children, as well as gifts for the home.
Specific exclusions apply. See store associate for details.
weakness has proved more
widespread and stubborn.
Many economists, including
Fed Chairwoman Janet Yellen,
have long trusted in the
framework advanced by the
economist A.W. Phillips, who
in 1958 hypothesized employ-
ers would bid up wages when
workers grew scarce and hold
wages steady when workers
were abundant.
T
oday, wages and prices
haven’t moved as the
framework would sug-
gest, raising questions over
whether the labor market
might have more slack or if
something more permanent is
holding inflation back.
“We’re not seeing quite
what we’re expecting to see,”
said New York Fed President
William Dudley this month.
“That creates a bit of uncer-
tainty about the best course
going forward.”
Most Fed officials expect
once the jobless rate falls low
enough, price pressures will
re-emerge. No one is quite
sure what that exact level is,
but each decline in the unem-
ployment rate brings the econ-
omy a little closer to it. Mr.
Dudley said low inflation isn’t
all bad because it means the
economy might be able to sus-
tain a lower jobless rate.
The Fed has held its bench-
mark federal-funds rate in a
range between 1% and 1.25%
since lifting it in June.
The economy is still adding
more than enough jobs to
keep up with the growth of
the working-age population,
and the unemployment rate is
now below levels officials view
crat Chris Dodd, slow-walked
the nominations ahead of the
2008 presidential election,
which Democrats appeared in-
creasingly likely to win as the
economy deteriorated. The new
president could fill any open Fed
board slots.
While the committee allowed
Ms. Duke’s nomination to ad-
vance, it never voted on Mr.
Klane’s. It also declined to ap-
prove another term for Fed gov-
ernor Randall Kroszner, a Bush
nominee.
The Fed’s responses to the fi-
nancial crisis, including its res-
cues of several big financial
firms, attracted political fire
from both parties. When Mr.
Bernanke was appointed for a
second term in 2010, he was op-
posed by 30 senators—18 Re-
publicans, 11 Democrats and an
independent—in the Demo-
cratic-controlled Senate.
The vacancies left from Mr.
* overall holiday sales. Target
B E V E R LY H I L L S SAN FRANCISCO
PHILADELPHIA S E AT T L E
U.S. NEWS
Mixed Signals
Financial conditions have eased this year, despite moves by the Fed
to remove support from the economy, and remain looser than the
historical average given current growth and inflation.
Chicago Fed Adjusted National Financial Conditions Index
–0.2
–0.4
–0.6
–0.8
–1.0
–1.2
2013 ’14
Inflation has slowed in 2017 and continues to underperform the Fed's
projections of reaching the 2% target over the medium term.
Personal Consumption Expenditures price index, annual
2.5%
2.0
Fed target
1.5
1.0
0.5
0.0
2012 ’13 ’14
Source: Chicago Fed (financial conditions);
Commerce Department (inflation)
as sustainable, around 4.6%.
Last December, Fed officials
projected the unemployment
rate would end this year
within a range of 4.4% to 4.7%.
In September, the projection
had edged down to a range of
4.2% to 4.5%. Economists at
Goldman Sachs expect the un-
employment rate to keep fall-
ing, to 3.7% by the end of 2018
and 3.5% by the end of 2019.
For the Fed, the ideal sce-
nario would look something
like this: job growth slows a
Bush’s presidency, combined
with other term expirations,
meant that by 2010, President
Barack Obama had three Fed
openings to fill at once. He nom-
inated San Francisco Fed Presi-
dent Janet Yellen for Fed vice
chairwoman, plus Sarah Bloom
Raskin—a Maryland state bank-
ing regulator—and Massachu-
setts Institute of Technology
economics professor Peter Dia-
mond for governors.
Both women won Senate con-
firmation. As a regional Fed
bank president and former Fed
governor, Ms. Yellen had solid
central-bank experience. Ms.
Bloom Raskin’s background as a
bank regulator was newly rele-
vant after the financial crisis.
Mr. Diamond ended up the
odd person out. Sen. Richard
Shelby (R., Ala.), then the rank-
ing minority member of the
banking committee, led the op-
position, smarting over the ear-
STORES
Continued from Page One
fer buying immediately or are
unprofitable to ship, Mr. Foran
said.
In stores, “is [Black Friday]
the mayhem that it might have
been eight or 10 years ago?”
Mr. Foran said on Thanksgiv-
ing. “I think that world is
gone.”
ShopperTrak, another firm
that measures foot traffic to
traditional stores, found that
visits declined a combined 1.6%
on Thanksgiving and Black Fri-
day from a year earlier. While
most big chains still opened on
Thanksgiving evening, some re-
tailers adjusted their hours af-
ter discovering that the extra
hours didn’t necessarily lift
Corp. closed its stores from
midnight Thanksgiving until re-
opening at 6 a.m. on Black Fri-
day.
Rosa Hilburn, 58, was among
the first people inside a Target
in Houston on Black Friday
morning, but she was in and
out in minutes with only a
small bag of loot—several
shirts and a Garth Brooks al-
bum for her husband.
Ms. Hilburn said she was
“really shocked” there weren’t
more people at the store but
attributed it to the changing
times. “Most people do it on-
line now like the millennials,”
she said. “But I still like to see
and touch things.”
Al Rao, 44, and her sister-in-
law Sunanda Dugar, 43, were
walking through a Los Angeles-
THE WALL STREET JOURNAL.
quickly, leading to an unsus-
tainable rise in prices that
forces the Fed to raise rates at
a fast clip, triggering a reces-
sion. “We don’t want a boom-
bust policy,” Ms. Yellen said in
New York last week.
The second risk is inflation
doesn’t respond as expected
but the Fed keeps raising rates
because unemployment falls
lower. This could push infla-
tion even lower still and hold
Fed rate Balance sheet back the economy. Persistently
hikes normalization low inflation in the end would
force the Fed to cease any rate
’15 ’16 ’17 increase campaign and could
leave it with little room to ma-
neuver should another reces-
sion hit.
The third risk is the econ-
omy avoids an inflation run-up
but rising asset values and low
market volatility fuel financial
Core inflation imbalances. The last two ex-
pansions ended this way, with
the tech-stock bubble of 2000
and the housing-market col-
Overall inflation lapse of 2007.
M
s. Yellen’s nominated
’15 ’16 ’17 successor, Fed gover-
nor Jerome Powell,
THE WALL STREET JOURNAL. might try to use regulatory
tools to fight an asset price
little in order to hold the un- boom. But such tools have had
employment rate steady, at mixed results in other coun-
around 4%, with inflation tries, and Republicans want
slowly returning to its 2% tar- Mr. Powell to lighten the regu-
get. Tight labor markets latory load. He might instead
would continue to boost be pressed toward fighting an
wages while encouraging em- asset price boom with higher
ployers to pull workers out of interest rates.
the shadows of the labor mar- Mr. Powell’s confirmation
ket and to provide more non- hearing on Tuesday before a
wage benefits, such as worker Senate panel could offer early
training. insight into how he will ap-
Three risks loom. proach the coming year of dif-
The first is the unemploy- ficult trade-offs and even
ment rate drops too low, too harder choices.
2011, of nominating a Republi-
can and a Democrat to the Fed
board, hoping the package
could win approval.
The White House initially
wanted to nominate Jeremy
Stein, a Harvard economist and
Democrat, to one seat and Rich-
ard Clarida, a Republican econ-
omist and adviser to Pacific In-
vestment Management Co., or
Pimco, to the second.
ALEX BRANDON/ASSOCIATED PRESS
Mr. Clarida pulled out. About
the same time, Treasury Secre-
tary Timothy Geithner learned
that Mr. Powell, a Republican
who had served in President
George H.W. Bush’s Treasury
Department, had been challeng-
ing members of his own party
not to play games with the U.S.
Jerome Powell debt ceiling.
Thus Mr. Powell was nomi-
lier rejections of Messrs. Klane nated to the Fed alongside Mr.
and Kroszner. Stein in late 2011. But in May
The Obama White House hit 2012, with a presidential elec-
upon the idea, in the summer of tion nearing and Democrats
area mall on Thanksgiving with
just one shopping bag. The duo
have made going to the mall on
Thanksgiving night a tradition,
that tracks its prices, Mr. Hari-
haran said. Amazon often kicks
price-tracking technology off
its site to prioritize customers
even though both do nearly all when traffic surges. An Amazon
of their shopping year-round spokeswoman said the com-
on Amazon and Google Express. pany hadn’t made changes to
“Going to the mall is very its practices regarding price-
rare for us now,” Ms. Rao said. tracking bots.
In-store sales still account Amazon also tried to create
for about 90% of retail pur- some holiday store frenzy. Af-
chases, according to the U.S. ter purchasing grocer Whole
Census Bureau, but the balance Foods earlier this year, Amazon
is shifting fast. Adobe said $7.9 offered a discount on turkeys,
billion worth of merchandise plus an extra markdown for
members of Prime. The online
giant also used more than 100
In-store sales still of its 470 Whole Foods stores
to sell its discounted gadgets.
account for about Amazon has an advantage as
90% of retail online sales rise. More than
50% of online product searches
purchases.
start with the site. It also com-
manded an average of about 42
cents of every dollar spent on-
line through October, compared
was purchased online on Thurs- with nearly 2 cents at Wal-
day and Friday, and expects Cy- Mart, according to Slice Intelli-
ber Monday to be the largest gence, which tracks a panel of
online shopping day in history, more than 5 million U.S. shop-
with sales up nearly 17% to $6.6 pers.
billion. Madison Lennon of Virginia
Wal-Mart has added tens of Beach, Va., headed to her
millions of products to its web- nearby Wal-Mart on Friday af-
site over the past year, so head- ternoon to load up on DVDs
ing into the holiday shopping from the discount bins. But
period around 75% of the most first the 24-year-old, who
frequently purchased toys were works at a movie theater,
on walmart.com, the highest checked Amazon’s prices.
percentage of a traditional re- Most were priced similarly
tailer, said Guru Hariharan, or weren’t available, she said.
chief executive of Boomerang, So she decided to head to Wal-
an e-commerce performance Mart to “see if they have them
firm that studies pricing and for a cheaper deal,” she said.
other metrics. “And if not, I’ll come home and
Meanwhile, Amazon made it buy it on Amazon.”
harder for other retailers to —Miguel Bustillo
match its prices, more fre- and Julie Jargon
quently blocking technology contributed to this article.
ECONOMIC
CALENDAR
TUESDAY: On Capitol Hill, the
Senate Banking Committee holds
a confirmation hearing for Jerome
Powell, the man nominated by
President Donald Trump to serve
as the next chairman of the Fed-
eral Reserve. His nomination isn’t
expected to encounter much resis-
tance in the Senate, but the hear-
ing could offer insight on how he
would run the central bank.
WEDNESDAY: The Joint Eco-
nomic Committee of Congress
hosts Fed Chairwoman Janet
Yellen to discuss the economic
outlook.
The U.S. Commerce Depart-
ment releases its second estimate
for third-quarter economic growth.
Economists surveyed by The Wall
Street Journal expect gross do-
mestic product grew at a 3.3%
annual rate last quarter, following
a 3.1% rate in the second. That
represents the best six-month
stretch of growth in three years.
THURSDAY: The U.S. Com-
merce Department releases infla-
tion data for October. Septem-
ber’s reading showed prices were
up 1.6% from the previous year,
short of the Fed’s 2% target.
Figures from the European
Union’s statistics agency are ex-
pected to show unemployment
nudged down again in October.
Data on consumer prices during
November are expected to show
inflation edged up to 1.5% from
1.4% in October, still below the
target of just under 2%.
FRIDAY: Inflation data from
Japan are likely to reflect further
baby steps toward strengthening
price growth (release time is
Thursday in the U.S.). October fig-
ures are expected to show the
core consumer-price index rising
by 0.8% from a year earlier, com-
pared with September’s 0.7% gain,
though that still leaves Japan far
from its 2% inflation goal.
holding a slight edge in the
Senate, they appeared headed
for defeat.
It took an improbable event
to break the impasse. J.P. Mor-
gan Chase & Co. lost nearly $2
billion when a London trader’s
bet went sour. The loss sparked
an uproar about oversight of
banks. Senate Majority Leader
Harry Reid (D., Nev.) leveraged
the moment to advance Messrs.
Powell and Stein.
In May 2012, Mr. Powell was
approved, 74-21. Twenty-five
Republicans voted for him, but
20 voted no, along with an in-
dependent. Mr. Stein was also
confirmed, on a 70-24 vote.
Less than two years later,
Mr. Powell’s term expired. Mr.
Obama nominated him for a
second term, as part of a pack-
age with two other Fed board
candidates. Mr. Powell was con-
firmed with 67 yeses by a Sen-
ate with a Democratic majority.
CORRECTIONS 
AMPLIFICATIONS
Hewlett Packard Enterprise
Co. named Antonio Neri presi-
dent in June. A Business & Fi-
nance article on Wednesday in-
correctly said the move
occurred in July.
Readers can alert The Wall Street
Journal to any errors in news articles
by emailing wsjcontact@wsj.com or
by calling 888-410-2667.
THE WALL STREET JOURNAL
(USPS 664-880)
(Eastern Edition ISSN 0099-9660)
(Central Edition ISSN 1092-0935)
(Western Edition ISSN 0193-2241)
Editorial and publication headquarters:
1211 Avenue of the Americas,
New York, N.Y. 10036
Published daily except Sundays and general
legal holidays. Periodicals postage paid at
New York, N.Y., and other mailing offices.
Postmaster:
Send address changes to The Wall Street
Journal, 200 Burnett Rd., Chicopee, MA 01020.
All Advertising published in The Wall Street
Journal is subject to the applicable rate card,
copies of which are available from the
Advertising Services Department, Dow Jones
& Co. Inc., 1211 Avenue of the Americas, New
York, N.Y. 10036. The Journal reserves the right
not to accept an advertiser’s order. Only
publication of an advertisement shall constitute
final acceptance of the advertiser’s order.
Letters to the Editor:
Fax: 212-416-2891; email: wsj.ltrs@wsj.com
NEED ASSISTANCE WITH
YOUR SUBSCRIPTION?
By web: customercenter.wsj.com;
By email: wsjsupport@wsj.com
By phone: 1-800-JOURNAL (1-800-568-7625);
Or by live chat at wsj.com/livechat
REPRINTS & LICENSING
By email: customreprints@dowjones.com
By phone: 1-800-843-0008
GOT A TIP FOR US?
SUBMIT IT AT WSJ.COM/TIPS
 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
JUSTIN SULLIVAN/GETTY IMAGES
Chimneys remain standing in the Coffey Park neighborhood of Santa Rosa, Calif., on Nov. 13, a month after wildfires swept through.
Roadblocks to Rebuilding
Wildfires have laid
bare how difficult it is
to erect houses in
Northern California
BY CHRIS KIRKHAM
AND NOUR MALAS
For Damian Clopton, the
initial shock of losing his
home in last month’s Northern
California firestorm is begin-
ning to wear off and a hard re-
ality is setting in: Insurance
won’t be enough to rebuild his
burned-down house, and there
are no clear answers on how
to fill the gap.
“I’m not going to get my
house back,” Mr. Clopton said.
“I’m going to get something
considerably less.”
The aftermath of the North-
ern California wildfires is lay-
ing bare the state’s multilay-
ered housing crisis, as
thousands of people who lost
their homes navigate the com-
plexities of rebuilding in one
of the nation’s most expensive
housing markets. Those who
want to rebuild are left to un-
tangle a web of insurance ad-
justers, contractors and local
permitting agencies.
The result is a prolonged re-
building process that could
leave thousands of families
waiting months to return to
their neighborhoods, a scenario
prompting local officials to act
fast to avoid a population drain.
Mr. Clopton, 33 years old,
lived in the Coffey Park neigh-
borhood of Santa Rosa. As he
fled the flames consuming his
neighborhood, while clutching
his four cats and a laptop, he
left behind what was supposed
to be a fireproof safe, new
granite countertops and ornate
Race Highlights a Changing Atlanta
BY CAMERON MCWHIRTER
ATLANTA—Joe Meadows
has lived in his five-bedroom
home in this city’s Kirkwood
neighborhood since 1966,
when he bought it for $10,000.
In 50 years, the 83-year-old
retired construction foreman
has seen his neighborhood
transform from predominantly
white to largely African-Amer-
ican. Now it is on its way back
to majority-white again.
“I’m not going to be around
much longer,” said Mr. Mead-
ows, who is black, citing the
forces of gentrification that
have pushed up property val-
ues and driven out many of his
black neighbors. “It’s all about
money, money.”
What’s happening in Kirk-
wood is taking place in many
neighborhoods. For the first
time since at least 1970, At-
lanta is on the verge of not be-
ing a black-majority city, in
part because it has become a
magnet for newcomers drawn
to a lower cost of living, de-
cent job prospects and warm
weather.
Gentrification has become a
key issue in the Dec. 5 runoff
election for the next mayor.
The two candidates are long-
standing city council members
who ran as nonpartisans. One
is Keisha Lance Bottoms, an
African-American woman who
says she is a Democrat and is
backed by Democratic Mayor
Kasim Reed. Her rival is Mary
Norwood, a white woman who
U.S. NEWS
Construction Crisis
The number of homes destroyed
in Northern California's wildfires
in October is far greater than the
annual pace of construction in
parts of the area.
4,000
Homes
destroyed
3,000
in October
2017
2,000 Residential
building
permits
1,000 in 2016
0 recent years as a result.
Santa Rosa Sonoma Napa
city County County
Sources: Trulia (permits); state and local
government estimates (homes destroyed)
THE WALL STREET JOURNAL.
landscaping with fruit trees.
They all turned to ash and
charred metal.
Based on insurance claims
so far, more than 4,700 homes
were destroyed in Northern
California and 10,000 more
were partially damaged, lead-
ing to total insured losses of
more than $3 billion statewide.
Local officials in the coun-
ties most affected by the fires
are working with federal
emergency and disaster-relief
agencies to set up temporary
shelters and find new ways to
speed up the rebuilding pro-
cess, which, like elsewhere in
California, involves layers of
permits and approvals.
“We have a sense of ur-
gency,” said David Guhin,
Santa Rosa’s director of plan-
ning and economic develop-
ment. “We have to do every-
thing we can to provide
solutions to people so we can
Joe Meadows at home in Atlanta’s Kirkwood neighborhood.
Gentrification is a key issue in the city’s mayoral runoff election.
narrowly lost to Mr. Reed in
2009 and who calls herself an
independent.
Both have addressed con-
cerns that economic forces are
pushing out poorer residents,
most of whom are black, and
bringing in wealthier ones,
many of whom are white.
“If we have a city that is
not a city for all, then we re-
ally are not fulfilling the
promise that Atlanta has had
for so many generations,” Ms.
Bottoms, 47, said at a debate.
Ms. Norwood, 65, said she
has fought to protect home-
owners but has been critical of
the current administration,
which is in the throes of a fed-
eral corruption investigation.
“What gets in our way is
power and money, and who
has and who doesn’t have it
and who wants it,” she said at
Monday, November 27, 2017 | A3
©T&CO. 2017
THE NEW HOME & ACCESSORIES
COLLECTION
Economies of Scale Rosa, the aim is to get groups
of homeowners to agree to a 800 843 3269 TIFFANY.COM
Key to Comeback limited number of home de-
|
signs so a developer can start
building several houses at once.
Across California’s wine “Economies of scale in re-
country, a basic challenge to building are very important,”
rebuilding in the aftermath of said Hugh Futrell, a Santa
the area’s wildfires is finding Rosa builder who lost his
people to do the work. home and is working with
There are 15% fewer con- banks, contractors and builders M Y L A G O S M Y W AY
struction workers in Napa and to rebuild more quickly. “To
Sonoma counties today than in build 10 houses in a neighbor-
the mid-2000s, according to hood like Coffey Park, scat-
Labor Department data, even tered across 10 different
as the population and housing blocks, is not going to attract a
demand have increased. Con- contractor to do the job.”
struction costs have soared in The way insurance is paid
complicates the process, be-
Ad hoc groups are coming cause each homeowner may
together across damaged be on a different timeline.
neighborhoods to set ground- —Chris Kirkham
rules for rebuilding. In Santa and Nour Malas
retain our community and our ing, including recreational ve-
workforce.” hicles.
Rebuilding thousands of California Insurance Com-
homes at once is a significant missioner Dave Jones said it is
challenge in a part of the state still too early to determine how
where, before the fires, there many homeowners will get suf-
was already a severe shortage ficient payouts for the cost of
of construction labor and a rebuilding. The answer will de-
supply of new homes that fell pend on “what it costs to re-
far short of demand. build the home, but also what
Santa Rosa, which lost kind of coverage the home-
nearly 3,000 homes, built only owner purchased,” he said.
half that number of single- Mr. Clopton hopes to apply
family houses in the past de- for construction or small-busi-
cade, according to permitting ness loans to make up the dif-
data analyzed by real-estate ference from his insurance
tracker Trulia. payout.
Santa Rosa has worked to Jeff Okrepkie, who lost his
streamline the system, aiming home in Coffey Park and is
to process building plans in helping to organize neighbors
less than two weeks, according looking to rebuild, described
to city officials. the daunting task they feel
In the meantime, to help they face: “You’re taking 5,000 C AV I A R C O L L E C T I O N S
house people who lost their homeowners and asking them
homes, Santa Rosa officials to turn into developers, and ex- AVA I L AB LE AT L A G O S . C O M
have changed or waived rules perts in insurance, and experts BLOOM I NGDALE’S 59TH ST
to allow for temporary hous- in city permits in three weeks.”
calls falsely claiming to be
from her supporters were
made to white sections of the
city urging people to vote for
MAURA FRIEDMAN FOR THE WALL STREET JOURNAL
her “to keep Atlanta black.”
Ms. Norwood has said Ms.
Bottoms has tried to portray
her as a supporter of Presi-
dent Donald Trump to frighten
Atlanta’s black voters. She said
she voted for Hillary Clinton
and Barack Obama in recent
presidential elections.
In Kirkwood, the changes
are evident. Its commercial
district now has trendy res-
taurants, a vegan bakery and
new apartments. On residen-
tial streets, older smaller
homes are being demolished
a mayoral forum in October. and replaced with bigger ones.
The median home value in Freddy Luster, 47, who
the city has risen 53% since works in corporate real estate,
2010, faster than the national said he and his family moved
rate of 27%, according to the to Kirkwood as African-Ameri-
real-estate website Zillow. Av- can professionals because they
erage rents in the Atlanta liked its diversity. Mr. Luster’s
metro area rose 33% since wife, Patricia, 43, said she
2010, according to Jay Par- feels Ms. Norwood, who lives
sons, vice president of data in the wealthier, predomi-
analytics at RealPage Inc., a nantly white area of Buckhead,
Richardson, Texas, company. “lives in a bubble.”
Ms. Bottoms has called for In Buckhead, signs backing CLASSIMA Starting at
$1 billion public-private fund Ms. Norwood are more numer- Collection $990
to fight displacement, as well ous. Marion Smith, 72, a re-
as zoning changes. Ms. Nor- tired white lawyer and Nor-
wood has promised a citywide wood backer, said residents in
initiative to protect citizens Buckhead and elsewhere have FELDMAR WATCH CO. / Los Angeles, CA / 310.274.8016
from displacement, including long believed their taxes were RAZNY JEWELERS / Highland Park, IL / 847.432.5300
reducing, freezing or delaying too high for the services they
WEMPE / New York, NY / 212.397.9000
property taxes for longtime receive. Ms. Norwood would
residents in changing areas. be “responsive to the entirety
The two campaigns have of the city,” he said. www.baume-et-mercier.com
traded allegations of race-bait- —Laura Kusisto
ing. Ms. Bottoms said robo- contributed to this article.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A4 | Monday, November 27, 2017
Congress Prepares for Year-End Sprint
Lawmakers rush deals
on taxes and spending
as sexual-harassment
allegations reverberate
BY KRISTINA PETERSON
WASHINGTON—Lawmak-
ers returning to Washington
face a tight calendar and a diz-
zying list of legislative tasks,
from a major tax overhaul to a
new federal spending agree-
ment, with the added complica-
tion of sexual-harassment alle-
gations that are reverberating
in the halls of the Capitol.
For weeks, the political spot-
light has focused on Republi-
cans’ efforts to pass the first
major revision of the tax code
in more than three decades. Af-
ter failing in their push to dis-
mantle the Affordable Care Act
earlier this year, GOP lawmak-
ers are counting on the tax re-
write to mark one major legis-
lative accomplishment they can
tout to voters in next year’s
midterm elections.
The Senate could vote on its
version of the overhaul this
week after the House recently
approved its own bill. GOP lead-
ers say they expect the two
chambers to hash out a deal on
one bill before year’s end.
But the tax bill’s passage
could be affected by the out-
come of other, lower-profile ne-
gotiations, most notably over
where spending levels should
be set for the remainder of fis-
cal 2018, which ends Sept. 30.
Once a budget deal has been
reached, lawmakers will then
need a few weeks to fill in more
detailed spending legislation.
Because the government’s
current funding expires after
Dec. 8, lawmakers and aides ex-
Trump Warns of a Senate Setback
BY SHARON NUNN
President Donald Trump re-
iterated his stance that the
election of Democrat Doug
Jones to an Alabama Senate
seat would mark a serious
blow to the Republican
agenda, while not explicitly
saying he backed GOP nominee
Roy Moore, who faces allega-
tions of sexual misconduct
with teenagers decades ago.
“The last thing we need in
Alabama and the U.S. Senate is
a Schumer/Pelosi puppet,” Mr.
Trump said on Sunday on Twit-
ter, referencing Democratic
leaders Sen. Chuck Schumer of
New York and Rep. Nancy Pelosi
of California. “Jones would be a
disaster!” said Mr. Trump, cit-
ing border security, crime and
CFPB
Continued from Page One
Cordray as deputy director so
she could assume the role of
acting director of the agency
under a provision in the Dodd-
Frank financial law, which cre-
ated the CFPB. Mr. Trump’s ap-
pointment of Mr. Mulvaney, a
harsh critic of the CFPB, is
based on the Federal Vacancies
Reform Act, which sets rules
for vacant government agency
positions and gives the presi-
dent authority to appoint an
acting director.
Calling herself the “rightful
acting director” of the bureau,
Ms. English is seeking a judg-
ment and a temporary re-
straining order to prevent Mr.
Mulvaney from becoming in-
terim CFPB chief.
“Ms. English has a clear le-
gal entitlement to the position
of acting director of the CFPB,”
the lawsuit said. “The presi-
dent’s purported or intended
appointment of defendant Mul-
vaney as acting director of the
CFPB is unlawful.”
Ms. English wants the court
to decide that the Federal Va-
cancies Reform Act doesn’t
control the appointment of a
temporary CFPB director and
block any temporary Trump
appointment.
Deepak Gupta, a former
CFPB lawyer who has sued the
Trump administration previ-
ously, is the lead attorney rep-
resenting Ms. English.
In a written statement,
White House spokeswoman
Sarah Sanders said, “The ad-
ministration is aware of the
suit filed this evening by dep-
uty director English. However
the law is clear: Director Mul-
vaney is the acting director of
the CFPB.” The White House
As the end of the year approaches, congressional Republicans are moving quickly to accomplish a range of complicated tasks.
pect Congress will have to pass
a short-term spending patch
that would stretch for just two
or three weeks until a longer-
term spending bill is completed.
President Donald Trump is
expected to meet with leaders
of both parties in both cham-
bers Tuesday to discuss legisla-
tive priorities, aides said.
Mr. Trump returned to
Washington late Sunday after
celebrating Thanksgiving in
Florida. He tweeted: “Back in
D.C., big week for Tax Cuts and
many other things of great im-
portance to our Country.” He
added: “Senate Republicans will
taxes among other issues.
Mr. Moore has denied any
sexual misconduct and has
vowed to stay in the race. He
has blamed the media and
Democrats for spreading what
he called false allegations.
Mr. Trump’s comments
echoed statements he made
last week, when he said Mr.
Jones, a former U.S. attorney,
was “terrible” on various polit-
ical issues. As in the most re-
cent comments, he didn’t di-
rectly say he supported Mr.
Moore, and when asked about
the accusations against the
candidate, he pointed to Mr.
Moore’s denials.
Sebastian Kitchen, a Jones
spokesman, said: “Doug Jones
is continuing to focus on find-
ing common ground and get-
Mick Mulvaney is the president’s pick to be CFPB acting director.
also released a memo from
CFPB General Counsel Mary
McLeod in which she advised
senior CFPB officials to “act
consistently with the under-
standing that Director Mulva-
ney is the acting director of
the CFPB.” The memo by Ms.
McLeod, who was hired by Mr.
Cordray, was dated Saturday.
In a memo issued on Satur-
day, the Justice Department
argued the Federal Vacancies
Reform Act gives the president
power for “temporarily autho-
rizing an acting official to per-
form the functions and duties”
of the CFPB’s director. The de-
partment acknowledged that
Dodd-Frank permits a properly
appointed deputy to serve as
temporary director, but that it
“doesn’t displace the presi-
dent’s authority under the Va-
cancies Reform Act” to appoint
an acting director.
Alan Kaplinsky, a Ballard
Spahr lawyer critical of the
CFPB, said that “chaos will en-
sue at the CFPB.”
The unfolding drama is the
latest twist for the CFPB,
which has been mired in parti-
san battles since the agency
P W L C 10 11 12
hopefully come through for all
of us. The Tax Cut Bill is getting
better and better. The end re-
sult will be great for ALL!”
GOP leaders have advised
lawmakers they may remain
in Washington until close to
Christmas, or beyond, to fin-
ish the tax bill and other leg-
islation.
At the same time, allega-
tions of sexual misconduct by
Sen. Al Franken (D., Minn.)
and Rep. John Conyers (D.,
Mich.) as well as the release of
a nude photograph of Rep. Joe
Barton (R., Texas)—all of
which happened in a matter of
ting things done for real Ala-
bamians. His record as a
prosecutor speaks for itself.”
He said Mr. Moore’s accusers
“served as witnesses to all Ala-
bamians of his disturbing con-
duct.”
In his Sunday tweets, Mr.
Trump also tried to temper the
appearance of a personal in-
vestment in Mr. Moore, noting
that he supported Sen. Luther
Strange, Mr. Moore’s GOP pri-
mary opponent, in the race.
Mr. Strange was named to the
seat when Jeff Sessions be-
came attorney general. He lost
the primary to Mr. Moore.
The Alabama race has cre-
ated a headache for GOP lead-
ers. Republicans hold a narrow
52-48 advantage in the Senate,
and a loss of the seat would
was created in the wake of the
financial crisis. Democrat Eliz-
abeth Warren, now a leading
critic of Wall Street in the Sen-
ate, was the brain behind the
agency’s birth. Many of the
staff joined the agency as en-
thusiastic supporters of its
mission.
Until the lawsuit was filed,
CFPB officials had remained si-
lent since Mr. Cordray’s an-
nouncement Friday on his res-
The 2010 Dodd-
Frank Act created the
agency in the wake of
the financial crisis.
ignation and Ms. English’s
appointment. Agency spokes-
men didn’t respond to repeated
requests for comment. Neither
Ms. English nor Mr. Cordray
could be reached for comment.
The president has promised
to install a more business-
friendly leadership at the na-
tion’s regulatory agencies.
H T G K B F A M 1 2 3 4 5 6
U.S. NEWS
days—suggest that claims of
sexual misconduct may con-
tinue to jolt Capitol Hill.
The closely watched election
for the Alabama Senate seat va-
cated by Attorney General Jeff
Sessions also takes place Dec.
12, pitting GOP candidate Roy
Moore, who faces accusations
of sexual misconduct toward
teenage girls, against Democrat
Doug Jones. A GOP loss would
narrow the Republicans’ Senate
majority to 51-49. In either out-
come, GOP leaders hope to pass
the tax bill before the next Ala-
bama senator is sworn in.
Most immediately, one
make passing certain partisan
legislation even more difficult.
Senate Majority Leader
Mitch McConnell (R., Ky.) said
this month that he believed
Mr. Moore’s accusers and that
Mr. Moore should step aside
ahead of the Dec. 12 vote.
Republican senators said on
Sunday that the Moore candi-
dacy wasn’t helping the GOP
agenda.
“It is pretty clear to me that
the best thing that Roy Moore
could do for the country is to
move on,” Sen. Tim Scott (R.,
S.C.) said on ABC. “In my opin-
ion, and in the opinion of
many Republicans and conser-
vatives in the Senate, it is time
for us to turn the page, be-
cause it is not about partisan
politics.”
As acting director, Mr. Mul-
vaney would have full author-
ity to implement changes at
the bureau and is expected to
do so aggressively. The former
Republican House member
from South Carolina once
PABLO MARTINEZ MONSIVAIS/ASSOCIATED PRESS
called the CFPB a “sad, sick
joke,” and has called for an
overhaul of the agency, includ-
ing curtailing its budget. Other
possible actions include delay-
ing the enactment of a recently
issued rule on payday lending,
amending a 2013 mortgage
rule that tightened underwrit-
ing standards, and reassessing
pending lawsuits against com-
panies such as student-loan
servicer Navient Corp.
Mr. Mulvaney said in a
statement Friday that “Ameri-
cans deserve a CFPB that seeks
to protect them while ensuring
free and fair markets for all
consumers.”
On Saturday, Mr. Trump
called the Obama-era leader-
ship of the agency a “total di-
saster,” adding that financial
institutions “have been devas-
tated and unable to properly
serve the public.”
The White House says Mr.
Trump will eventually nomi-
nate his own choice for the
next permanent director of the
CFPB, who then needs to be
confirmed by a simple majority
in the Senate.
Financial industry experts
expressed alarm at the uncer-
tainty created by the fight.
“If there has been one con-
sistent criticism of the CFPB,
it’s a lack of predictability, and
we are now left with the great-
est uncertainty since the bu-
reau was established,” said Ben
Olson, a Buckley Sandler law-
yer and a former CFPB official
who advises financial compa-
nies.
—Ian Talley
contributed to this article.
7 8 9 O I X X ***** THE WALL STREET JOURNAL.
pressed over how the tax bill
treats pass-through businesses,
whose owners pay taxes on
their individual returns.
Also, at least three GOP sen-
ators have expressed concerns
over the $1.5 trillion the tax bill
is expected to add to the federal
budget deficit over 10 years, to
pay for the cost of lowering the
corporate tax rate and many in-
dividuals’ income-tax rates. The
negotiations over the spending
limits could add to those con-
cerns and potentially turn them
off the tax bill, since congres-
sional leaders have been dis-
cussing increasing government
spending over the next two
years by around $200 billion.
“We’re $20 trillion in debt
and it’s ‘party like there’s no to-
J. SCOTT APPLEWHITE/ASSOCIATED PRESS
morrow’ time in Washington,”
said Sen. Bob Corker (R., Tenn.)
on Twitter recently in response
to articles about the negotia-
tions. GOP Sens. Jeff Flake of
Arizona, who is retiring next
year, and James Lankford of
Oklahoma also have expressed
concerns about the tax bill’s im-
pact on the federal deficit.
Without a budget deal,
spending levels would revert to
lower levels established in 2011.
pressing challenge for GOP Under current law, regular mili-
Senate leaders is that the Re- tary spending is capped at $549
publicans who control swing billion for fiscal year 2018,
votes on the tax bill have goals while nonmilitary spending is
that could be almost impossi- capped at $516 billion.
ble to reconcile in a spending That has upset Sen. John
bill needed to keep the gov- McCain (R., Ariz.), who has said
ernment funded. With a slim Congress must increase military
52-48 majority in the Senate, spending. Mr. McCain hasn’t di-
Republican leaders can afford rectly connected his vote on the
to lose no more than two GOP tax bill to the level of military
votes on the tax bill, with Vice spending, but several aides say
President Mike Pence prepared they believe angering him over
to cast a tiebreaking vote. military funding could make it
GOP leaders are working to harder to get his support for a
resolve concerns some Republi- tax overhaul.
cans, including Sen. Ron John- —Ian Talley
son of Wisconsin, have ex- contributed to this article.
ALEX WONG/GETTY IMAGES
Rep. John Conyers, shown in 2015, joined Congress in 1965.
Conyers to Leave
Committee Post
BY KRISTINA PETERSON ing him the longest-serving
current House member.
WASHINGTON—Rep. John
Conyers said Sunday he would
step aside from his post as the
top Democrat on the House Ju-
In an interview Sunday on
NBC, House Minority Leader
Nancy Pelosi (D., Calif.) called
Mr. Conyers “an icon” and said
diciary Committee while an he has done “a great deal to
ethics panel investigates alle- protect women.” Asked
gations of sexual harassment whether Mr. Conyers should
against him. resign from the House, Mrs.
“I have come to believe that Pelosi said: “He will do the
my presence as Ranking Mem- right thing in terms of what he
ber on the [Judiciary] Com- knows about his situation.
mittee would not serve these That he’s entitled to due pro-
efforts while the Ethics Com- cess. But women are entitled
mittee investigation is pend- to due process as well.”
ing,” Mr. Conyers, of Michigan, In a separate statement, she
said in a statement. “I cannot said there would be conse-
in good conscience allow these quences for anyone found to
charges to undermine my col- have sexually harassed others.
leagues in the Democratic Cau- Last week, the House Ethics
cus.” Committee said it had begun
Rep. Jerrold Nadler of New investigating and would gather
York will take over as the com- more information about the
mittee’s top Democrat. Conyers allegations. The com-
Mr. Conyers acknowledged mittee said it wouldn’t make
last week that he settled a further public statements
wrongful-dismissal claim in pending its initial review.
2015 involving a former female On congressional commit-
employee, but he denied alle- tees, the ranking member typi-
gations of sexual harassment. cally works closely with a
He again denied the allega- panel’s chairman in crafting
tions on Sunday. any bipartisan legislation, and
Mr. Conyers said he settled during committee hearings can
the complaint to avoid litiga- often make comments or ask
tion. He added he would coop- questions before other law-
erate with any further investi- makers. Mr. Conyers was
gation in the House. chairman of the panel while
“I deny these allegations, Democrats controlled the
many of which were raised by House from 2007 to 2011.
documents reportedly paid for Speaking Sunday on ABC,
by a partisan alt-right blogger. Rep. Jackie Speier (D., Calif.)
I very much look forward to said Mr. Conyers should resign
vindicating myself and my from Congress if an investiga-
family before the House Com- tion reveals the sexual-miscon-
mittee on Ethics,” Mr. Conyers duct allegations to be true.
said in the statement Sunday. “The Ethics Committee
The allegations were first re- needs to move very
ported by BuzzFeed, which swiftly.…Staff up if necessary
said it received the documents to determine whether or not
from Mike Cernovich, a social- those allegations are accurate.
media personality who is a And if they’re accurate, I do
self-described “American na- believe that Congressman Con-
tionalist,” and independently yers should step down,” she
confirmed their authenticity. said.
Mr. Conyers, 88 years old, —Sharon Nunn
joined Congress in 1965, mak- contributed to this article.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
Pakistani Official Quits to End Standoff
Law minister resigns
in an agreement with
Islamist activists who
had clashed with police
BY SAEED SHAH
ISLAMABAD, Pakistan—The
country’s law minister re-
signed on Monday, in an
agreement with religious ac-
tivists to end three weeks of
demonstrations that shook an
already fragile government,
the state broadcaster and the
protesters said.
Around 2,000 protesters
had blocked a major road be-
tween Islamabad and the adja-
cent city of Rawalpindi. The
activists’ main demand was
the resignation of Law Minis-
ter Zahid Hamid, who they
said is responsible for a pro-
posed change in legislation
they said amounted to an in-
sult to the Prophet Muham-
mad.
A government operation on
Saturday by police and para-
military forces had failed to
dislodge the protesters and
was suspended that night af-
ter at least seven demonstra-
tors were killed and 260 in-
jured.
Under the agreement bro-
kered by Pakistan’s powerful
military, previously arrested
protesters would be released,
according to the text of the
deal.
In Egypt’s Sinai, a Call to Cooperate With the Army
Bedouin leaders in the Sinai
Peninsula have issued a rare call
for solidarity with the Egyptian
army to fight against Islamic
By Dahlia Kholaif in
Cairo and Rory Jones
in Tel Aviv
extremism in response to a Fri-
day attack that killed more than
300 Muslims at a local mosque.
* * * * * *
Protesters with Tehreek Labbaik Ya Rasool Allah attending the funeral Sunday of a demonstrator who was killed Saturday in Islamabad.
Saturday’s crackdown in Is-
lamabad had sparked protests
by sympathizers elsewhere in
the country, including Karachi
and Lahore, its two biggest
cities.
The government has had a
tense relationship with the
military since the ouster of
“We call on men and youths
of Sinai tribes to join their
brothers…to coordinate for a
major operation with the
army” to end terrorism, said a
statement posted on Facebook
by the Union of Sinai Tribes.
It isn’t immediately clear
how many tribes the group
represents. The group’s Face-
book page has nearly 220,000
followers, and tribesmen said
WORLD NEWS
Prime Minister Nawaz Sharif
this year. Mr. Sharif, whose
party remains in office, has re-
peatedly said the military es-
tablishment is the force be-
hind his removal, an allegation
it denies.
State-owned PTV news re-
ported Mr. Hamid’s resigna-
they were aware of the group.
The call for cooperation, is-
sued on Friday, comes after
years of tension between the
army and Sinai tribesmen. It
also underscores the despera-
tion to end the Islamist insur-
gency in Sinai, where an affili-
ate of Islamic State known as
Sinai Province has been fight-
ing authorities and staging at-
tacks in recent years.
tion. The agreement with the
protesters was confirmed by
their spokesman, Ejaz Ashrafi.
The protesters are from the
mainstream Barelvi sect of Is-
lam and organized around a
group called Tehreek Labbaik
Ya Rasool Allah, which formed
a political party in recent
The Egyptian army’s
spokesman didn’t respond to
requests for comment.
Sinai Province has recruited
disaffected young Egyptian
Bedouins, causing friction be-
tween tribes and the Egyptian
army, according to political
and military analysts.
Tribal leaders have accused
the Egyptian government of
neglect and heavy-handed po-
Monday, November 27, 2017 | A5
change the oath members of
Parliament take to swear Mu-
hammad was the final
prophet.
The government had called
in the army on Saturday to
help restore order as demon-
strators clashed with police
and paramilitary forces, but on
Sunday, the military called for
a peaceful solution.
With the failed operation,
the government was forced
back into talks with the pro-
testers. Interior Minister Ah-
san Iqbal on Sunday said the
government had acted in re-
sponse to an order from the
Islamabad High Court to clear
AAMIR QURESHI/AGENCE FRANCE-PRESSE/GETTY IMAGES
the road.
“We are trying everything
to put this fire out,” he said
late Sunday.
A better-equipped paramili-
tary force, the Rangers, which
operates under the Interior
Ministry, was deployed on
Sunday near the protest site,
the government said.
A State Department spokes-
person on Sunday said the U.S.
was monitoring the situation
closely.
Prime Minister Shahid
Khaqan Abbasi met on Sunday
weeks. for talks with army chief Gen.
The group aims to maintain Qamar Bajwa. In a written re-
Pakistan’s draconian blas- sponse to the government’s
phemy laws, which carry the requisition of the army, issued
death penalty for anyone in- before that meeting, the mili-
sulting the Prophet Muham- tary criticized the handling of
mad. the operation, saying the po-
The demonstrators said the lice on Saturday had “not been
proposed legislation would optimally utilized.”
licing of the insurgency. Con- 25 armed men used guns and
secutive governments invested explosives against Muslim
little in education and infra- worshipers at the Al Rawda
structure for the territory. mosque in the town of Ber al
“The military has for years Abd, killing 305 people, in-
refused to collaborate with cluding 28 children, according
tribes for different reasons, in- to Egyptian officials.
cluding not to give them Nobody has claimed re-
power,” said Mohannad Sabry, sponsibility for the attack. But
a researcher who has written at least one militant waved an
about the Sinai Peninsula. Islamic State flag, officials
In Friday’s attack, at least said.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A6 | Monday, November 27, 2017
France Vows Crackdown on Harassment
Government launches
antiviolence campaign
amid rising complaints
of sexual intimidation
BY WILLIAM HOROBIN
AND STACY MEICHTRY
PARIS—The recent wave of
sexual-harassment and mis-
conduct allegations is crashing
down on France and the myth
of the French lover.
Victims of sexual abuse
have set social media ablaze
with the French equivalent of
the #MeToo hashtag known as
#balancetonporc, or “expose
your pig.” France’s national
police force reported a 23% in-
crease in complaints of sexual
violence filed in October com-
pared with the same month a
year earlier. The gendarmerie,
which is responsible for polic-
ing in rural areas, reported a
30% rise.
The outpouring is fueling a
reassessment of some male
behavior. Unwanted kissing,
groping and other acts previ-
ously often went unchallenged,
French officials and victims
say, because French society
branded it a form of seduction
in a romantic culture.
“In France we relativize
sexual violence, saying it’s
French culture, love à la fran-
Overcapacity
Greek islands are straining as they host far more people than facilities were designed to hold.
Monthly arrivals in Greece
5,000 Through Nov. 23
2,649
4,000
3,000
2,000
1,000
0 Other
2016 ’17
Sources: UNHCR (arrivals through October); Greek Migration Ministry (November arrivals, people, capacity)
Stuck in Greece, Migrants
Despair of Next Chapter
Processing delays, violence and the approach of winter-
weather hardship dim island newcomers’ hopes for the future
BY NEKTARIA STAMOULI
SAMOS, Greece—Three
months ago, Shehab Kabalan,
a 20-year-old from Syria,
traveled in a small boat from
Turkey to Greece in the hope
of receiving asylum in Eu-
rope and starting a new life.
Instead he is trapped on
the island of Samos, living in
a flimsy tent among dozens
of other migrants and refu-
gees, prevented from travel-
ing to the mainland and now
bracing for a hard winter.
Earlier this month, he
slashed his wrists. A doctor
patched him up and sent him
back to the tent camp. “I felt
desperate,” Mr. Kabalan said.
“We are dying slowly here.”
Greece’s migration crisis
has faded somewhat from
view since a March 2016 pact
between the European Union
and Turkey stanched the
enormous flows of migrants
crossing the Aegean Sea.
But a surge in recent
months has created abysmal
conditions here, sparking ac-
LOANS
Continued from Page One
asm coming out of the elec-
tion,” said Gerard Cuddy, CEO
of Beneficial Bancorp Inc., a
community lender in Phila-
delphia. “I think reality is
setting in.”
The slowdown in lending
growth raises questions about
firms’ prospects for 2018, es-
pecially given that long-term
interest rates haven’t moved
much, even as short-term ones
are climbing. The difference,
or spread, between 10-year
and two-year U.S. Treasury
debt, a rough proxy for bank
profitability, is around 0.6 per-
centage point, its lowest level
in a decade.
If loans balances aren’t
growing briskly and the inter-
est-rate spread is narrow, it is
far tougher for banks to in-
crease net-interest income.
“The plane used to be flying
at 30,000 feet, now it’s at
French President Emmanuel Macron greets Marlène Schiappa, the secretary of state for equality.
çaise, the French lover, sweet
talk or gallantry,” Marlène
Schiappa, France’s secretary of
state for equality, said in an
interview. “French women
have had enough.”
The French government
says one woman is killed every
three days by a partner or for-
mer partner.
On Saturday, French Presi-
dent Emmanuel Macron said
he would lead French society
into a “cultural battle” by
Migrants and refugees currently on the islands
compared with facilities’ capacity
Lesbos
Chios
Samos
Kos
Leros
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000
cusations that EU and Greek
authorities are leaving thou-
sands of migrants exposed to
disease, cold weather and vi-
olence as a deterrent to
other would-be refugees.
Earlier this fall, 200 peo-
ple were crossing to the
Greek islands of Samos,
Chios, Lesbos, Leros and Kos
daily, a fourfold increase
over the spring. Arrivals
have declined in recent
weeks but remain high de-
spite the worsening weather.
“The EU-Turkey deal in-
corporates strong elements
of deterrence,” said Gabriel
Sakellaridis, head of Greek
operations for Amnesty In-
ternational. “No political
considerations should tram-
ple upon human rights like
that.”
The Greek government
and EU officials have said
they are accelerating their
efforts to offer more appro-
priate accommodation for
the migrants.
On Chios, Lesbos and Sa-
mos, the centers house sev-
10,000,” said Christopher Mar-
inac, director of research at
investment-banking boutique
FIG Partners. “There are many
banks that are concerned
about how much they can
grow the loan book in 2018.”
At the biggest U.S. banks,
loan growth in the third quar-
ter was spotty. At J.P. Morgan
Chase & Co. and Bank of
America Corp., total loans
grew 3% from a year earlier.
Citigroup Inc. posted growth
of 2%, while total loans at
Wells Fargo & Co. fell 1%.
Loan growth was anemic
among many smaller banks. At
BB&T Corp., total loans in the
third quarter were roughly flat
compared with a year earlier.
In an earnings call last month,
CEO Kelly King said more cli-
ents were taking advantage of
low rates in the bond markets
and paying off their bank
loans. Hurricanes in the south-
ern U.S. also had an effect.
He added the bank is pur-
posely restructuring its loan
portfolio to focus on more-
WORLD NEWS
making gender equality the
“national cause” of his five-
year term in office with a fo-
cus on combating sexual vio-
lence next year. In 2018,
government spending on
equality will rise to €420 mil-
lion ($501 million), Mr. Ma-
cron said. “Our entire society
is sick with sexism,” he said.
“We need to act before it’s too
late.”
Mr. Macron’s government is
planning legislation that
Capacity
THE WALL STREET JOURNAL.
eral times the intended ca-
pacity and many have been
living in them for nearly two
years.
Local authorities refuse to
allow bigger facilities to be
built, leaving thousands liv-
ing in summer tents that are
mushrooming around the of-
ficial facilities. Aid groups
have struggled to persuade
local hotels and apartment
owners to rent out empty
rooms to house the mi-
grants.
Now, as winter ap-
proaches, Greece risks re-
peating last year’s disaster,
when six people died in the
camps, including four who
inhaled toxic fumes when
burning garbage to keep
warm.
Moreover, two-thirds of
the new arrivals in Septem-
ber were women and chil-
dren, increasing the vulnera-
ble population, according to
the United Nations High
Commissioner for Refugees.
Most of the newcomers are
from Afghanistan, Iraq or
profitable loans. Still, Mr. King
nodded at deeper issues
around the downshift, saying
“the mega issue here is that,
you know, we’ve been on a
nine-year slow economy.”
An area of particular con-
Squeeze Play
Differences in yields of 10-year
and two-year U.S. Treasurys
3.0 percentage points
2.5
2.0
1.5
1.0
0.5
0 –15
–0.5
2007 ’10 ’15
Sources: FactSet (spread); Federal Deposit
Insurance Corp. (growth rate)
* * THE WALL STREET JOURNAL.
cently rocked by a series of al-
legations and the resignation
Nov. 1 of British Defense Sec-
retary Michael Fallon after he
was accused of inappropriate
behavior. He acknowledged
not living up to the high stan-
dards of the military.
In Italy, allegations of sex-
ual assault by a prominent
film director have prompted a
LUDOVIC MARIN/AGENCE FRANCE-PRESSE/GETTY IMAGES
new debate over harassment
of women in the workplace,
which remains largely toler-
ated and rarely reported. Swe-
den, long seen as a champion
of gender equality, has been
stunned in recent days by a
host of allegations of rape and
sexual harassment in media
and entertainment.
France has historically
shown reluctance to confront
allegations of sexual miscon-
duct, particularly at the high-
est levels of society. The coun-
try’s respect for individual
would introduce fines for ver- privacy has often led the me-
bal sexual harassment and au- dia to look the other way
tomatically classify sex with when it comes to the sexual
minors as rape. His govern- behavior of powerful men.
ment is holding 300 work- Many supporters of Domin-
shops around the country to ique Strauss-Kahn, the former
seek advice on how to International Monetary Fund
strengthen the bill. People are chief and onetime Socialist
also invited to weigh in on a presidential contender, ini-
government website. tially rallied behind him after
France isn’t the only Euro- U.S. authorities arrested him
pean country grappling with for allegedly assaulting a
public anger. In the U.K., the housekeeper in a New York
political establishment was re- hotel. Mr. Strauss-Kahn denied
Syrian Shehab Kabalan has been living on Samos, where he says he and others are ‘dying slowly.’
Strains Appear Almost two years after the
understanding was reached,
In EU-Turkey Pact only five Syrian asylum-seekers
have been returned to Turkey.
Under the European Union’s Greek judges recently proposed
agreement with Turkey, mi- some adjustments to the asy-
grants and refugees who apply lum process to accelerate it.
for asylum once they arrive in Meanwhile, migrants on the
Greece are to be returned to islands who are considered vul-
Turkey while their applications nerable or who have family ties
are processed. elsewhere in Europe can ask to
Syria. Aid groups are urging pions and fights: These are
authorities to move people the things I deal with every
to the mainland before win- day,” Mrs. Elmonazed said.
ter sets in. The situation is better on
Samar Elmonazed, a 20- the mainland, but challenges
year-old Syrian woman who remain. Arrivals, including
has been living in a tent for Syrian families, from across
three months, said her 11- the Greek-Turkish land bor-
month-old daughter often der have almost tripled in
wakes in fright from the recent months.
noise of wild animals or the Many refugees who have
fights that break out fre- secured permission to join
quently. “Snakes, rats, scor- family in Germany are none-
cern for all banks is business
lending. In the third quarter,
the 12-month growth rate for
business loans fell to 2.48%
pronounced based on weekly
Federal Reserve data. Com-
mercial and industrial loans,
or business lending, in early
from 2.79% the prior quarter November were up less than
and 7.67% a year earlier. 1% from a year prior, the data
The drop-off is even more show.
From mid-2014 through
mid-2016, growth of such
loans was regularly in the dou-
Twelve-month growth rate for ble digits. This is putting 2017
business lending, quarterly on track to be the worst year
for business-loan growth since
20%
2010, when the economy was
15 still wrestling with the imme-
diate aftermath of the finan-
10 cial crisis.
It remains unclear why.
5 Throughout the year, some
banks have said more subdued
0
business lending was due to a
–5 lack of clarity from Washing-
ton on the fate of initiatives
–10 on taxes and health care.
Such worries should even-
tually fade, though, said Dar-
ren King, finance chief at M&T
–20
Bank Corp., where loans in the
2007 ’10 ’15 third quarter were down 2%
versus a year earlier. “Busi-
THE WALL STREET JOURNAL. ness owners are eventually go-
the charges, which were later
dropped.
That reticence melted after
multiple women leveled accu-
sations at Hollywood producer
Harvey Weinstein, who has
apologized for his past behav-
ior with colleagues but denied
allegations of nonconsensual
sex. One of his accusers was
the prominent French actress
Léa Seydoux. She published an
essay in the Guardian alleging
harassment by Mr. Weinstein
and movie directors she didn’t
name, saying it was “very
common to encounter men like
these.”
The conflagration quickly
spread to the worlds of French
academia, business and poli-
tics, where women have been
speaking out. Most of the ac-
counts surfacing on social me-
dia haven’t identified the al-
leged aggressors.
French newspaper Libéra-
tion in November published
accounts from eight women
describing alleged sexual as-
saults between 2010 and 2014
by the head of the youth
movement of France’s Socialist
Party, Thierry Marchal-Beck.
The movement said in a state-
ment it was “revolted” by the
reported acts and will further
its efforts to prevent and sanc-
tion sexist behavior. Mr. Mar-
chal-Beck couldn’t be reached
for comment.
EIRINI VOURLOUMIS FOR THE WALL STREET JOURNAL
be transferred to the Greek
mainland while their applica-
tions are considered.
But there are long delays in
that process as well. As a re-
sult, thousands are stuck in
short-stay reception centers.
A review of the EU-Turkey
deal is unlikely, particularly
given worsening relations be-
tween Europe and Ankara.
theless stuck in Athens due
to monthslong delays in ap-
proving the paperwork
needed to leave the country.
About 30,000 are stranded
in camps throughout Greece,
according to UNHCR esti-
mates. Another 30,000 have
smuggled themselves out of
the country since the bor-
ders were sealed in March
2016, according to official
estimates.
ing to get to the point where
they say, ‘I can’t wait to find
out what is going to happen in
Washington,’ ” he said.
Even so, “that doesn’t mean
I think we’re going back to
2015 or 2016 levels” of loan
growth, Mr. King added.
Some bankers also have
cited heightened competition.
More business customers are
tapping the bond market in-
stead of bank loans to take ad-
vantage of low interest rates
there, while insurance compa-
nies are offering to fund 30-
year commercial mortgages
and hedge funds are lending to
riskier companies.
Others think the slowdown
in business lending is a hang-
over from above-average
growth in recent years. Many
potential corporate clients are
already loaded up on debt,
said Kevin Barker, an analyst
at Piper Jaffray & Co. That
tamps down demand for loans.
It also makes some banks
wary of lending even more to
these companies, he added.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. NY Monday, November 27, 2017 | A6A

Proud to be the
World’s Best Bank.
Helping you reach your dreams
is our inspiration.
The awards just happen.
Visit us at us.hsbc.com

WORLD’S BEST BANK 2017

Issued by HSBC Bank USA N.A. Member FDIC. HSBC was named The World’s Best Bank in the Euromoney Awards for Excellence 2017.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A6B | Monday, November 27, 2017 NY THE WALL STREET JOURNAL.

We Deliver.
Meals.
Nutrition.
Dignity.
Hope.
Love.

#FoodIsMedicine godslovewedeliver godslovenyc godslovenyc

God’s Love We Deliver is the New York City metropolitan area’s leading provider of nutritious, individually tailored meals to
people who are too sick to shop or cook for themselves. All meals are provided free of charge, without regard to income, and
we have never had a waiting list. To donate or volunteer your time, visit us at godslovewedeliver.org.

If you are in the NYC metropolitan area and would like to become a client, please email clientservices@glwd.org or call 212.294.8102.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
Indonesia Volcano U.S.
Curbs Flight Traffic
BY I MADE SENTANA
JAKARTA, Indonesia—Erup-
tions at a volcano in Bali dis-
rupted thousands of vacation-
ers’ plans after flights to and
from the popular resort island
were canceled.
Authorities on Monday in-
creased the alert level at
Mount Agung to the highest
level of four, as the volcano
continued erupting, spewing
black ash more than 2 miles
into the air.
Bali’s Ngurah Rai Interna-
tional Airport, which handles
as many as 420 flights a day,
was closed on Monday. Arie
Ansanuroohim, spokesman for
Indonesia’s second-largest air-
port, said it would remain
shut through Tuesday.
Officials said 45 flights
were canceled on Sunday by
Cathay Pacific Airways, Jet-
star, AirAsia and Garuda Indo-
nesia, affecting more than
5,500 passengers.
On Saturday, 14 flights were
canceled, affecting some 2,350
passengers.
Garuda said it was also can-
celing flights for the neighbor-
ing island of Lombok, which
was in the path of ash drifting
from the Mount Agung vol-
cano.
Mount Agung, which is lo-
cated in the northeastern part
of the island, spewed volcanic
ash Tuesday and again Satur-
day afternoon and Sunday.
M A L A
SU M ATRA
I N
Jakarta
I n di a n O cea n
Seoul’s Draft Is Challenged
BY EUN-YOUNG JEONG
SEOUL—South Korea’s com-
pulsory military service, long
regarded as sacrosanct in a
nation still technically at war
with North Korea, faces a legal
test over whether citizens can
refuse to serve because of
their beliefs.
An army stint is a rite of pas-
sage for most young men here,
where conscription has existed
since 1949 and military influ-
ence extends well beyond the
barracks. Schools and compa-
nies arrange three-day boot
camps for workers and students
to experience military life.
That culture has left little
room for conscientious objec-
tion. The country imprisons
more young men for refusing the
draft than the rest of the world
combined, according to Amnesty
International, which said in a
February report that about 400
were behind bars last year.
Women are exempt from service.
The draft has made South Ko-
rea a garrison state, said Park
Min-young, a culture critic.
“Military culture seeps into
companies, schools and personal
relationships here,” he said.
In recent months, though, a
judicial rift over the subject
has begun to play out in lower
courts here, setting up a de-
bate over what many see as a
bedrock of Korean society.
Courts first ruled in favor
of objectors in 2004, but the
number of acquittals has
soared this year as judges an-
South Korea's Objectors
South Korea has sent thousands of young men to prison over the
years for refusing military service, but the country's lower courts
have been acquitting some conscientious objectors of late.
Conscientious objection cases*
Acquittals
40
2017: 39
as of Nov. 17
30
20
2004: First
10 ruling in favor
of objectors
0 0
2004 ’10
*Doesn’t include those who objected for nonreligious reasons, which experts say amounts to
four to five cases a year.
Source: Jehovah's Witnesses
* * * *
Government volcanologist
Gede Suantika said a red-yel-
low light visible in ash above
the mountain was the reflec-
tion of lava in the crater and
that Agung could spew ash for
at least a month. But the vol-
canologist said he didn’t ex-
pect a major eruption.
Authorities warned anyone
still in the exclusion zone
around the volcano, which ex-
tends about 4.6 miles from the
crater in places, to leave.
Mount Agung last staged a
series of eruptions in 1963-64,
which killed more than 1,700
people, according to Indone-
sia’s disaster agency.
It started showing in-
creased activity in September,
triggering an exodus of more
than 130,000 residents in the
area. More than 25,000 people
remain evacuated outside the
exclusion zone.
Last month, Indonesia’s
government estimated Bali
sustained some $150 million in
economic losses due to the
volcanic activity, mostly due
to a fall in tourism.
The ash was blowing south-
east Sunday, away from the
airport.
Indonesia sits on the Pacific
Ring of Fire, and has nearly
140 active volcanoes.
In recent years, volcanic
eruptions stranded tens of
thousands passengers in this
fast-expanding air travel mar-
ket.
300 miles
Y S I A
300 km
D O N E S I A who has also pleaded not guilty,
Mount Agung
JAVA
BALI LOMBOK
THE WALL STREET JOURNAL.
YONHAP/NEWSCOM/ZUMA PRESS
Protesters rallied in May in Seoul seeking alternative service.
ticipate a determination by
the Constitutional Court on
whether to recognize consci-
entious objection as a right.
While no acquittal has yet
been upheld by the Supreme
Court, the shift has fueled
hopes—and dread—that the
government may be poised to
scrap prison sentences for ob-
jectors.
Caught in the middle are
people like Kim Hyeon-woo
and Kim Sun-woo, 23-year-old
twins from the port city of
Busan. Like most conscien-
tious objectors in South Korea,
the Kims are Jehovah’s Wit-
nesses, who refused military
service because it conflicted
with their religious beliefs.
Last December, Kim Sun-
woo was found guilty and
jailed for 1.5 years. Four days
after Sun-woo’s imprisonment,
Convictions
1,000 2016: Many cases left
pending in anticipation
of new ruling
750
500
250
’15 2004 ’10
THE WALL STREET JOURNAL.
Monday, November 27, 2017 | A7
WORLD NEWS
Trial Ruffles Turkey
Ankara assails case of
Turkish suspects
charged with helping
Iran evade sanctions
A trial opening in Manhattan
this week that could implicate
prominent Turkish officials is
exacerbating already inflamed
SEBNEM COSKUN/ANADOLU AGENCY/GETTY IMAGES
tensions between the U.S. and
Turkey.
By David Gauthier-
Villars in Istanbul
and Nicole Hong
in New York
The arrest of a Turkish gold
trader in Miami last year on
charges of conspiring with
Turkish banking and govern-
ment officials to help Iran evade
U.S. sanctions upset the authori- Turkish gold trader Reza Zarrab during his brief detention by Istanbul police in 2013.
ties in Ankara. At the time, Pres-
ident Recep Tayyip Erdogan U.S. government has raised con- the Manhattan U.S. attorney’s cussed his efforts with Mr. Er-
suggested U.S. prosecutors may cerns over how Mr. Erdogan re- office said he remains in federal dogan.
have had “ulterior motives” to sponded to a failed coup last custody. A lawyer for Mr. Mr. Zarrab’s troubles began
implicate his government. year by cracking down on oppo- Zarrab, who has pleaded not in January 2013, when fog en-
Now, indications that the 34- sition groups, imprisoning thou- guilty, declined to comment on veloping parts of Istanbul forced
year-old businessman, Reza sands of people and repressing his client’s status. a plane arriving from Ghana to
Zarrab, may be cooperating the media. There have been several re- land at an airport on the Euro-
with U.S. prosecutors are infuri- On Turkey’s side, Mr. Erdo- cent signs that Mr. Zarrab, who pean, rather than the Asian, side
ating Mr. Erdogan. gan has been irked that Wash- had been scheduled to begin of the city. Inspecting the air-
“You are putting my citizen ington hasn’t met his repeated trial with Mr. Atilla, may be co- craft, customs officers found an
on trial and trying to make him demands to extradite a Turkish operating. For one, his lawyers undeclared load of gold.
confess,” Mr. Erdogan said in a Muslim cleric living in Pennsyl- haven’t participated in any Turkish prosecutors traced
recent speech. “Is this democ- vania, whom he accuses of plan- court hearings or filed pretrial the cargo to Mr. Zarrab, accord-
racy? Is this justice?” ning a July 2016 coup attempt. motions since September. For- ing to the 2013 court docu-
The State Department has Fethullah Gulen, the cleric, has mer law-enforcement officials ments. U.S. prosecutors suspect
denied Turkey’s accusations. said he didn’t play a role in last also say Mr. Zarrab’s “released” the shipment was part of a bar-
U.S. prosecutors have year’s events. status on the Bureau of Prisons ter arrangement under which
charged Mr. Zarrab, who has The trans-Atlantic crossfire website could mean he has been Mr. Zarrab violated U.S. sanc-
pleaded not guilty, and eight has alarmed members of the relocated to facilitate coopera- tions by allegedly purchasing
others in the case. Seven of the business community, who fear tion. natural gas from Iran, paying
defendants are at large, leaving that trial evidence implicating If Mr. Zarrab is cooperating, for it in gold.
one defendant who is expected Turkish financiers and govern- he could bolster the U.S. case by In late 2013, he was formally
to appear for trial in Manhattan ment officials could tarnish the helping to authenticate Turkish arrested on corruption charges,
federal court on Monday: Meh- country’s reputation in financial court documents that prosecu- which he denied. Days later, Mr.
met Hakan Atilla, a former man- markets, spook foreign inves- tors have cited in pretrial pro- Erdogan, who was then prime
ager at Halkbank, a large state- tors and inflate Ankara’s bor- ceedings. minister, said the investigation
owned Turkish bank. Mr. Atilla, rowing costs. U.S. prosecutors have argued was a conspiracy against him
The Turkish lira has lost 13% that Turkish government and and called Mr. Zarrab a philan-
has been in U.S. custody since of its value against the U.S. dol- banking officials were “integral thropist. Charges against him
his arrest in March. lar in the past two months, a to the sanctions evasion were dropped.
The trial is adding to a long drop analysts largely blame on scheme.” One of the defendants In March 2016, the gold
list of disagreements straining the heightened bilateral ten- is a former Turkish economy trader landed with his family in
U.S.-Turkey relations. Washing- sions. minister. At Mr. Atilla’s trial, Miami. Asked about the purpose
ton and Ankara, a key member The U.S. government hasn’t prosecutors are expected to of his visit, he said: “Disney
of the North Atlantic Treaty Or- said whether Mr. Zarrab is co- present jurors with 2013 wire- World.”
ganization, have been at odds operating. He is listed as re- tap recordings, including con- —Dion Nissenbaum
over how to combat the Islamic leased on the Bureau of Prisons versations in which Mr. Zarrab in Washington
State terror group in Syria. The website, but a spokesman for allegedly indicated he had dis- contributed to this article.
Your full
his brother Hyeon-woo was
found not guilty by a different
judge in the same court.
retirement picture.
“I thought I’d also go to
prison like my brother,”
Hyeon-woo, a physical thera-
pist, said. “My brother later
In one place.
joked about how I’d left him
behind when I visited him.”
Three bills on alternative
service are pending at the Na-
tional Assembly that would
give young men the option of
working with the disabled or
the elderly in social-welfare When you plan for retirement with Fidelity,
facilities, or conducting disas- you’ll have instant access to all your retirement
ter-relief work, instead of savings details and goals, including:
serving in the military.
“Introduction of alternative
• How much you may need in retirement
military service should be
carefully scrutinized in consid- • How much you’re on track to have
eration of public consensus on
• How retirement fits with all your other
the issue,” said a spokesman
at the presidential Blue House. savings and investing goals
The proportion of South • Steps you can take to help strengthen
Koreans in favor of alternative your plan
service rose to 46.1% last year
from 10.2% in 2005, according It’s your retirement. Know where you stand.
to a survey conducted by the
country’s National Human
Rights Commission.
Many oppose changing the
draft, saying military duty
must come first. “The constitu-
tion stipulates national defense
as a duty. If refusing to serve
in the military is conscientious,
800.FIDELITY | Fidelity.com
is the constitution then uncon-
scientious?” a conservative IMPORTANT: The projections or other information generated by the Planning & Guidance Center’s
lawmaker, Chung Jin-suk, told Retirement Analysis regarding the likelihood of various investment outcomes are hypothetical in
a recent parliamentary audit. nature, do not reflect actual investment results, and are not guarantees of future results. Your results
Shin Taek-soo, 27, who may vary with each use and over time.
completed his military stint in
2011, said alternative service Investing involves risk, including the risk of loss.
would only work if the service Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917
’15 period were longer than that
© 2017 FMR LLC. All rights reserved. 812684.1.0
for military service. “Other-
wise, people will flock to do
alternative service,” he said.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A8 | Monday, November 27, 2017 THE WALL STREET JOURNAL.

Kick Off the Season

With an Ambitious Deal
Cyber Monday exclusive:
a brandbook notebook with every purchase

Treat yourself or get a head start on your shopping list this season.
Ending today—order something from The Journal Collection and enjoy
a complimentary brandbook notebook of your choice. Slim and classic
ruled with a refined linen cover, it’s the perfect inspirational tool for
your next ambitious idea.

Use code freenotebook at checkout.*

Shop now at THEJOURNALCOLLECTION.COM

*Offer valid at thejournalcollection.com on any purchase while supplies last. To redeem online, add a brandbook notebook to your
cart and use code freenotebook when placing your order. May not be redeemed for cash or cash equivalent and is not transferable.
Offer ends Monday, November 27th at midnight. Valid in the U.S. only.

© 2017 Dow Jones & Co., Inc. All rights reserved. 6DJ6177 The Journal Collection is operated independently of The Wall Street Journal news department.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. * * * * * Monday, November 27, 2017 | A9

WORLD NEWS WORLD WATCH

Venezuela Fuels an Oil Shift

NEPAL
Turnout Exceeds 65%
In First Provincial Polls
Maduro names general Residents of mountain vil-
lages and foothill towns voted
with no industry Sunday in Nepal’s first provincial
experience to lead polls, with the hope of bringing
government closer to the Hima-
ministry and state firm layan nation’s remote areas.
Nepal’s chief election commis-
BY ANATOLY KURMANAEV sioner, Ayodhi Prasad Yadav, said
turnout was more than 65%
CARACAS, Venezuela—Pres- among the 3.2 million voters
ident Nicolás Maduro named who were choosing lawmakers
an active general to lead the in seven newly formed federal
state oil industry, the nation’s states and for the national as-
last major economic sector sembly.
that had been outside the mili- The lawmakers who were
tary’s control. elected on Sunday, and those
RICARDO MORAES/REUTERS
was under investigation.
Two people were killed and
two more seriously injured, the
district office announced on its
social-media account. It gave no
details of the deaths.
At least 30 other people were
taken to hospitals, according to
Huanqiu.com.
—Associated Press
ISRAEL
Minister Steps Down
Over Sabbath Work
Health Minister Yaakov Litz-
man, who heads a powerful ul-
tra-Orthodox political party in
Prime Minister Benjamin Netan-
yahu’s government, resigned,

National Guard Maj. Gen. who will be elected on Dec. 7 in saying he opposed continued
Manuel Quevedo will be the the remaining parts of the coun- maintenance work on the coun-
new energy minister and pres- try, will be able to name their try’s railways on the Sabbath,
ident of state-run Petróleos states, draft provincial laws and when all labor is strictly prohib-
de Venezuela SA, known as choose local leaders. ited by Jewish law.
PdVSA, which accounts for al- —Associated Press Ultra-Orthodox parties have
most all the country’s foreign- provided Mr. Netanyahu with
currency income. State oil company PdVSA has been racked by a corruption probe that has led to jailing of executives. CHINA support to stabilize his coalition,
Gen. Quevedo, who has no while the government carves out
oil-sector experience, takes the Quevedo would spearhead the PdVSA’s output fell a record this month saying he wants to Port Blast Kills Two, large budgets for the minority
reins at PdVSA from Nelson continuing anticorruption cam- 6.2% in October from Septem- restructure the national debt. Injures at Least 30 community. They have in the
Martinez, a U.S.-educated com- paign in an effort to turn ber, a 13th consecutive With three of four Venezue- past threatened to topple coali-
pany veteran who was under- around the company’s fortunes. monthly decline, according to lans saying they want Mr. Ma- An explosion in a port city tion governments by robbing
mined by last week’s arrests of “We’re going for a total re- government figures reported duro out of office, the presi- south of Shanghai killed two them of their majority.
his associates at the firm’s U.S. structuring of PdVSA,” Mr. dent has increasingly relied on people and injured at least 30 Mr. Litzman’s resignation
arm, Citgo Petroleum Corp. Maduro said on Sunday. “It is the military to bolster his others as it knocked down build- could pressure the other two ul-
Another U.S.-educated veteran time for a new oil revolution.” ‘It is time for a power. Retired and active offi- ings and left streets littered tra-Orthodox coalition partners
oilman, Eulogio Del Pino, was But some analysts said they new oil cers now make up almost half with damaged cars and debris, to squeeze concessions from Mr.
fired as the oil minister. saw the appointment as a deci- revolution,’ his cabinet and hold most of the government and news re- Netanyahu to prove to their con-
The appointment follows a sive power grab by Venezuela’s President the top portfolios. ports said. stituents that they respect the
four-month purge at PdVSA military and security officers Nicolás “The military have reached The early Sunday morning ex- Sabbath as much as the former
amid a deepening economic that would only worsen the Maduro said the last frontier of power with plosion struck a riverfront neigh- health minister.
crisis and declining output. country’s economic problems. on Sunday. the appointment of General borhood in Ningbo, one of The prime minister said later
More than 50 company offi- “These are negative Quevedo,” said Rocio San Mi- China’s busiest ports, China’s of- at a government meeting that
cials and contractors have been changes,” said Asdrubal Olive- guel, a Caracas-based security ficial Xinhua News Agency and he regretted Mr. Litzman’s deci-
arrested and jailed in Venezu- ros, director at Caracas-based to the Organization of the Pe- analyst. other outlets reported. Xinhua sion, describing him as “an excel-
ela since August on charges of consultancy Ecoanalitica. troleum Exporting Countries. Venezuela’s economy has said it happened at a factory. A lent health minister.”
alleged corruption, including “You’re militarizing the indus- The company is teetering on contracted nearly 30% since police statement said the cause —Associated Press
most top Citgo executives. try and generating more uncer- defaulting on about $30 billion 2016, according to the Interna-
Mr. Maduro said Gen. tainty” for investors, he said. of its bonds, with Mr. Maduro tional Monetary Fund.

Honduran President Claims Election Win

A Wall Street Journal Roundup
Honduran President Juan Or-
lando Hernandez, a center-right
U.S. ally, cited multiple exit polls
on Sunday to declare himself
victorious in a bid for a second
term in the Central American
nation, despite the opposition
Mr. Hernandez 43.93% of the
vote, with Salvador Nasralla,
who leads a broad left-right
coalition called the Opposition
Alliance Against the Dictator-
ship, at 34.7%.
“The count is more than
clear and resounding that we
won this election, that is what
nandez told supporters at a
Tegucigalpa hotel.
The opposition alliance said
early numbers gave it a strong
lead but added it would only ac-
cept physically counted ballots.
“We are winning,” Mr. Nas-
ralla told supporters.
Mr. Hernandez’s popularity is
once among the world’s worst.
But allegations of corruption
and drug trafficking have cast
a shadow over his government,
and his re-election bid fueled
charges that his conservative
National Party has trampled
the country’s institutions in a
bid to entrench itself in power.

REUTERS
saying it was winning. the polls say and that is what based largely on a drop in vio- Turnout appeared to be
A poll released by network the results we are seeing from lence in the impoverished coun- heavy, with relatively minor
Televicentro gave 49-year-old the count are saying,” Mr. Her- try, whose homicide rate was irregularities reported. Rescue workers comb the site of an explosion in Ningbo, China.

In schools to
break barriers.
A parent loses a job. A family loses a home. These are
just some of the hardships Alina was coping with when
she started at her new school. Jamall from Communities
In Schools helped her settle in and map out a path to
graduation. Along with his support, Alina’s “no excuses”
attitude has earned her a scholarship to her dream college.
There are millions of at-risk kids like Alina who need help
breaking barriers to stay in school and succeed in life.

See how we help all kids succeed.

CommunitiesInSchools.org

Outsmart Burglars
The Moment You Plug It In
SimpliSafe is a complete home security arsenal. With
motion sensors, glass break sensors, entry sensors, and
a high-definition security camera, you’ll have everything
you need to keep your family safe—and 24/7 professional
monitoring is only $14.99 a month.

Cyber Monday Sale! Order now and

Get $200 Off at SimpliSafe.com/Wall
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A10 | Monday, November 27, 2017
STAR
Continued from Page One
programming, they spend less
than a third of their screen
time on traditional television,
and the rest on a mix of Netflix,
YouTube and other streaming
services, according to a survey
by the media company Awe-
someness.
To reach them, creators
compete with other profession-
als and also with the everyday
people who fill up social-media
feeds, giving them seconds to
prove a piece of content is
worth a longer look.
Two years after introducing
herself on YouTube with a
squirrel impression, Ms. Koshy
has cracked the code, accumu-
lating 1.6 billion views and the
advertising business that
chases those numbers.
The entrepreneur’s strategy
presents a way forward for en-
tertainment companies and
marketers, who have flocked to
Ms. Koshy’s expanding brand.
The latest placement: a series of
comical advertisements for Ap-
ple Inc.’s Beats earphones that
play on her fast rise and obses-
sive fans. Online, her Beats ads
have four times the rate of
clicks for those starring other
celebrities, including quarter-
back Tom Brady, Apple says.
“To me, she’s like the next
generation of Lucille Ball,” says
Susanne Daniels, global head of
original content for YouTube,
which developed a TV series
with Ms. Koshy for its subscrip-
tion service, YouTube Red.
“She’s not afraid to go for it,
and you feel that lack of fear.”
The Texas native is best
known for antic, observational
videos poking fun at consumer
culture and trends that run on
her two YouTube channels,
which total 17.5 million sub-
scribers.
Her Twitter feed has 1.6 mil-
lion followers, and 14.5 million
track her Instagram. Her videos
on Snapchat average about two
million views each. Last month,
she began appearing as a corre-
spondent on a reboot of MTV’s
music video countdown show
“TRL,” and she stars in a teen-
horror TV series that recently
aired its second season on
Hulu.
Her comedy is heavy on self-
deprecation, slapstick and word-
play, more goofy than snarky.
She has a soft spot for potty
jokes, but overall her work is
PG—an attraction for advertis-
ers, who have been burned by
offensive content on YouTube
and social media. Among her
YouTube peers, she says, “I’m
the only kind of clean one.”
She has worked paid product
placements for Nike Inc. into
her routines on YouTube, and
posed in Calvin Klein under-
Screens of Choice
Gen Z prefers smartphones and tablets and accesses more
entertainment on those devices. Technology ownership by generation:
Generation Z Millennials
100%
75
50
25
0
Smartphone Tablet
Source: Nielsen Total Audience Report, 1Q 2017
COINS
Continued from Page One
lypse bunker along with the
guns and freeze-dried maca-
roni. But some unhappy inves-
tors have deposited them into
retirement accounts, where the
shiny gold and silver coins have
performed like lead sinkers.
Paul Rumage, a 64-year-old
retired software engineer from
Michigan, said he was looking
for a haven from stocks for his
individual retirement account
in 2013. A private dealer per-
suaded him to buy 45 four-coin
sets of American Eagle gold
proofs, and 979 ounces of silver
Eagle proofs, records show.
The 1,135-coin treasure of
gold and silver cost him
$308,000, which included a 6%
commission for the broker. Less
than a month later, his IRA
statement valued the coins at
$212,000.
“I knew something was
wrong,” Mr. Rumage said.
After filing a lawsuit against
the dealer and broker, he sold
YouTube star Liza Koshy at MTV’s ‘TRL,’ which was relaunched last month. Media firms hope to reach her millions of online followers.
A Strategy—and Unique Content—for Each Platform
Online comedian Liza Koshy tailors content to different outlets, saying each app ‘is a different diary of me.’
BEATS BY DR. DRE
wear on Instagram. She also
creates stand-alone ads, such as
the rap video she made for
Procter & Gamble Co.’s Always
pads, and Snapchat clips pro-
moting movie snack deals for
AMC Theatres.
In the Beats ads, she is seen
working on one of her home-
made videos, dressed up as her
Jet character, and getting
chased by fans. When the ad
premiered on MTV, it cut di-
rectly to Ms. Koshy running
onto the set of “TRL.”
One reason her sketches
work for advertisers is the re-
play factor. In the six-minute 73
Questions parody video, Ms.
Koshy squeezed in dozens of
puns and double meanings, in
part to encourage easily dis-
tracted viewers to re-watch.
The higher the view count, the
more money she earns from the
advertisements that play before
Generation X Baby boomers
DVD Video game Subscription
console video on
demand
THE WALL STREET JOURNAL.
the coins back at a loss. He
since has given up on
gold and instead bought land in
Arkansas.
The government’s proof
sales amount to a heads-I-win-
tails-you-lose deal, according to
George Cooper of USAGold, a
Denver investment firm.
He said he won’t sell the proof
coins without reciting an exten-
sive disclaimer.
Marvin E. Johnson, 61, of Ka-
nawha, Iowa, said American
Bullion Inc. sold him 930 Amer-
ican Eagle silver proof coins for
his retirement account. He paid
the equivalent of nearly 2 1/2
times the market price of silver.
Then he sued when he saw his
investment drop like a rock.
“He bought them at a pre-
mium where I don’t think he’d
ever make a profit,” said
Thomas Reavely, Mr. Johnson’s
lawyer and coin collector.
Mr. Johnson and American
Bullion later settled the coin
dispute confidentially. Orkan
Ozkan, American Bullion’s chief
executive, said it wasn’t the
company’s fault. Mr. Johnson,
he said, paid the going rate:
IN DEPTH
YOUTUBE
17.5 million
subscribers
On two channels; weekly
comedy videos that invite
repeat viewing
 ADVERTISEMENTS
For Beats and others;
comical bits playing on her
popular characters and
obsessive fans
her video. The 32,000 com-
ments on the episode included,
“i broke the replay button” and
“i’ve watched this video about
15 times.”
Ms. Koshy’s share of You-
Tube ad revenue ranges from
about $10,000 to $15,000 a
month for each of the new vid-
eos she posts weekly, she says.
That doesn’t include the ad
money accumulated by her
older videos, or the typically
five-figure sums she receives
for creating sponsored clips.
She adapts her style to mul-
tiple platforms. Her YouTube
channel is the flagship for her
weekly “Wednezzzdays With
Lizzza” videos, which take her
three or four days to write,
shoot and edit. She uses a sec-
ond YouTube channel for more
improvisational material, often
featuring fellow creators such
as David Dobrik, Ms. Koshy’s
boyfriend.
Instagram is for polished
portraits of herself—an image
she often punctures with a
scatological joke at her own
expense in the caption. She
uses Snapchat to confess when
she is blowing her Wednesday
video deadline, or to deliver
the occasional serious mes-
sage, like her recent rant
about an Uber driver who sug-
gested that Ms. Koshy find a
rich man to pay her bills.
Each app, she says, “is a dif-
ferent diary of me.”
Twitter is the only feed that
she supplies grudgingly. “I wish
I could tweet the one-liners
that I come up with for You-
Tube, but the bosses will call
you out for recycling content,”
she says, referring to her fans,
who keep track of everything
she does online.
“We buy it high, mark it up and
sell it high.”
Then he pointed a finger at
the government. “Maybe you
should ask that question of the
Mint: Why are you charging so
much for these coins?” he said.
The U.S. Mint does operate a
bit like a coin dealer. Salespeo-
ple answer phones. An online
store, with a pop-up chat win-
dow, adorns the website. Cus-
tomers can sign up to have an-
nual proof sets charged to their
credit cards.
Mint profits on gold Eagle
proofs hit nearly 18% last year.
Net profits on the Silver Eagle
proofs were even better, reach-
ing about 41% last year.
The Mint transfers its profits
to the Treasury’s General Fund.
“We are not in it to make
money,” said Kristie McNally,
the Mint’s chief financial officer.
Mint officials said they
pitch proof coinage as collec-
tor’s items, not investments.
But Congress kept the door
open to putting the coins into
retirement account investments
a few years after banning other
collectible items in 1981.
TWITTER
1.6 million
followers
Jokes about her life and
updates on projects
INSTAGRAM
14.5 million
followers
Polished portraits with
funny captions, ad placements
She got her start as a Hous-
ton high schooler on Vine, the
now-defunct app for looping
six-second videos, where she
found a following for sight gags
that often involved her mug-
ging with rubbery facial expres-
sions.
She switched to YouTube to
create more elaborate—and
monetizable—sketches. With
her parents’ blessing, she
dropped out of college at 19,
moved to Los Angeles and
signed with Creative Artists
Agency, the Hollywood talent
firm.
She competes in an online
ecosystem that has become
more varied in recent years,
with videogamers, musicians,
makeup artists and assorted
“vloggers,” a term for anyone
who trains a camera on them-
selves, typically to document
their lives, do stunts or orches-
trate pranks.
Star vloggers include Mr. Do-
brik, who has 8.8 million sub-
scribers and, in a recent video,
persuaded a friend’s mother to
shock him with a stun gun.
More than a decade after
YouTube helped create a new
category of fame, digital cre-
ators now anchor the entertain-
ment landscape for young audi-
ences. CAA uses a data team to
track emerging online stars and
evaluates their potential for
long-term earning through, for
example, Hollywood roles, book
deals and live events. CAA re-
cently signed Tanner Braun-
gardt, a 17-year-old from Kansas
whose specialty is trampoline
acrobatics. The firm has bro-
kered a clothing deal for him,
along with endorsements and a
tour of indoor trampoline parks.
Most of the creators are
Silver proof coins from the U.S. Mint facility in West Point, N.Y.
Before the ban, said Ken
Swab, former counsel for a
House subcommittee on con-
sumer affairs and coinage, in-
vestors could keep Persian rugs
in their living rooms and IRA
accounts.
“It was perfect,” he said.
“You could walk on your tax de-
duction every day.”
Lawmakers allowed Ameri-
can Eagle proofs as an excep-
THE WALL STREET JOURNAL.
How Gen Z Watches
Teens consume most of their
entertainment on streaming
services.
Traditional YouTube
TV* 27% 34%
Netflix
27%
Other Other streaming
2% services† 10%
Note: Platform teens identified as their
primary means of consumption *includes on
demand and premium TV †includes Hulu,
Amazon Prime and Twitch
Source: 2017 Awesomeness survey of 1,500
teens
THE WALL STREET JOURNAL.
ERICKA BURCHETT/THE WALL STREET JOURNAL
channel.”
Her ethnic impersonations
and gonzo style occasionally
run afoul of her socially sensi-
tive young audience. A backlash
erupted in the comments sec-
tion of her anxiety video as
some viewers said she was
mocking people with the disor-
der and using it as clickbait.
“Gen Z finds things more of-
fensive,” says Ms. Koshy.
“They’re more informed about
chasing Gen Z viewers, whose the world and more opinion-
tastes were shaped by the cri- ated about it, which isn’t a bad
ses of the 2000s. “They’re post- thing. But it makes them a little
recession, post-ISIS, post-‘my more touchy.”
older brother has too many During a recent interview,
school loans.’ They’re kind of while shopping for Post-its,
world weary,” says Nick Shore, notebooks and other props for
chief creative strategist at As-
tronauts Wanted, a youth-fo-
her next video at a Staples near
her Los Angeles home, Ms. Ko-
cused production company shy was waylaid repeatedly by
founded by former MTV Net- fans: A cashier got so flustered
works head Judy McGrath. that he overcharged her. A
Compared to their millennial tween hid her braces with her
elders—who came of age with hand as she asked Ms. Koshy
reality television—Gen Z favors for a selfie. “My bosses are a
DIY “creators” like Ms. Koshy, bunch of 11-year-olds,” she says.
who launch themselves on so- She is petite, about the size
cial media. In contrast to the of the kids who recognize her
obviously manufactured reality in the store, and wears black
programs, Gen Z insists on au- tights, a mini backpack and a
thenticity, or the idea that peo- T-shirt that reads “Clickbait,”
ple stay true to the personality from a merchandise line sold
they present online. by Mr. Dobrik.
Ms. Koshy often uses a self- Ms. Koshy has proven to be
mocking style to unpack the ev- safe territory for established
eryday feelings that make us entertainment companies and
embarrassed or insecure. In a advertisers who have fled from
recent video on YouTube titled edgier online content after get-
“Facing My Anxiety,” she makes ting burned in recent months.
a fake phone call to avoid a ca- Prominent brands including
sual encounter and appears Wal-Mart Stores Inc. and Star-
alongside herself to voice a bucks Corp. pulled some adver-
panicked inner monologue. tising from YouTube in droves
“Time to go home and over- after reports of ads appearing
think this interaction,” she says. alongside offensive videos, in-
cluding clips uploaded by ex-
tremist groups. As “brand
Gen Z—born after safety” became the buzzword
for advertisers, YouTube made
about 1996—favors drastic changes to the auto-
irreverent, DIY stars mated advertising system that
allows YouTubers to monetize
seen as ‘authentic.’ their videos. Ads fell dramati-
cally on videos flagged by You-
Tube for having potentially of-
fensive language or imagery.
She says being perceived as The so-called adpocalypse
“ethnically ambiguous” helps stung the earnings of many
her broaden her Gen Z audi- YouTube creators, but Ms. Ko-
ence, which is more ethnically shy didn’t lose the 15- and 30-
and racially diverse than previ- second ads that play before her
ous generations. Her father, a videos.
petroleum executive, moved to YouTube is banking on her
the U.S. from India as a teen, comedy skills and marketabil-
and her mother, a yoga instruc- ity with an eight-episode sit-
tor, is white. A self-described com called “Liza on Demand”
“little brown girl,” she stands for its YouTube Red subscrip-
out in YouTube’s predominantly tion service, to premiere in
white upper echelon of stars. 2018. In the scripted series,
In a video titled “Mixed Kid Ms. Koshy plays a fictional
Problems,” she recalls bouncing character living with room-
among racial groups and con- mates getting by in the gig
stantly fielding queries about economy, plunging into odd
her ethnic background. jobs and random tasks for pay.
“Now you may not relate if MTV is hoping that by add-
you’re just a white girl watch- ing Ms. Koshy and other social
ing this, or a just a black guy media stars to its “TRL” reboot
watching this,” she says in the it can make an influential TV
video. “But you two should program from the 2000s, and
meet up, make a mixed baby the network itself, relevant to a
and have him subscribe to my new generation of young people.
Mr. Mezei said his account
statement after the purchase
valued the coins at $35,000. “I
just wanted to diversify,” he
said, calling the dealer’s 30%
markup unfair. Gold prices rose,
so he sold the coins last year
for more than he paid, though
he would have made more had
KRIS TRIPPLAAR/SIPA/ASSOCIATED PRESS
he invested in regular gold bul-
lion.
Most buyers are better off
not expecting any profits from
U.S. proof coinage, experts say.
Some collectors say they get joy
simply by possessing the coins.
The American Eagle proof, a
double-struck coin colored with
a special dye, has been de-
scribed as the most beautiful
coin ever made. Plus, “you get a
tion to the rule, making them a certificate” and “a little leather
favorite for coin dealers pitch- box,” said Rick Boss of Ohio, a
ing a “Gold IRA” to retirees. proof-coin collector and retired
Balint Mezei, a self-em- AT&T engineer. “You’re getting
ployed contractor, said he a piece of history.”
bought about $50,000 worth of Nonetheless, Jeffrey Chris-
U.S. proof coins around 2006 tian, a precious-metals invest-
for his retirement account after ment adviser, said he steers his
being convinced by a coin clients away: “It’s sort of like
dealer they would be safer from buying a car and driving it off
the government’s hands than the parking lot. It will have an
regular bullion. immediate depreciation.”
 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
Panthers Beat Jets 35-27
BROOKS VON ARX/ZUMA PRESS
TOUGH LOSS: Kaelin Clay avoided Lac Edwards as he ran back
his punt for a touchdown at MetLife Stadium on Sunday.
N.J. Office Rents
Near Fresh Highs
As Perks Pay Off
BY KEIKO MORRIS
Asking rents for New Jersey
office space are nearing re-
cords as landlords undertake
extensive reno-
PROPERTY vations and fill
older properties
with amenities
from beach volleyball courts
and yoga studios to outdoor
lounges with fire pits.
The steady climb in asking
rents during the past two years
reached $26.86 a square foot in
the third quarter, just shy of
the record $26.90 from the
second quarter of 2001, accord-
ing to real-estate services firm
Transwestern.
“Landlords are investing
capital, adding amenities into
office buildings, many built in
the ’80s and ’90s, which has
given them the ability to in-
crease the office rents,” said
Matthew Dolly, Transwestern’s
On the Rise
Average asking rent for New Jersey
office space, quarterly data
$27.00 per square foot
26.50
26.00
25.50
25.00
24.50
24.00
2000 ’10
Source: Transwestern
THE WALL STREET JOURNAL.
Following Revamp,
Tenants Stay Put
Keystone Property Group in
the past year completed major
renovations at a Morristown,
N.J., office building and a Pis-
cataway, N.J., complex pur-
chased in 2014 as part of a
three-state portfolio, revamping
fitness centers and cafeterias
and adding conference centers.
One result so far has been
retention, eliminating vacant
periods and costs to bring in a
new tenant, said Tom Sklow,
vice president of development
and leasing. The tenant-reten-
tion rate is 99% at the complex
at 30 Knightsbridge Rd. in Pis-
cataway, he said.
Meanwhile, a joint venture
of Time Equities Inc. and Berg-
man Real Estate Group is com-
pleting a $4.5 million overhaul
of a three-building Parsippany
campus. Among the tenant
perks are a massage room, bi-
cycle-share program and an art
studio with local artists provid-
ing classes.
Occupancy has risen from
50% to 60% since the venture
bought the 280,000-square-
foot office park last year, said
Aaron P. Medeiros, Time Equi-
ties director of acquisitions and
policy.
—Keiko Morris
* *
GREATER NEW YORK
New Jersey research director.
In New Jersey, asking rents
rose in eight of the past nine
quarters. In 16 of 21 submar-
kets, third-quarter rents in-
creased from the previous year,
Transwestern said. Submarkets
such as the Hudson waterfront,
Newark and urban Essex
County and the Short Hills and
Millburn areas were among of-
fice districts with the biggest
rent increases.
The state’s vacancy rate,
meanwhile, dropped to 14.8% in
the third quarter from 15.5% in
the same period last year,
Transwestern said.
Since the 2008 financial cri-
sis, the recovery of New Jer-
sey’s office market, particularly
its suburban areas, has lagged
behind New York City’s. Con-
solidations in a number of in-
dustries, including the pharma-
ceutical sector, left behind
sprawling vacant campuses,
which weighed on the state’s
rents. The preference of a
younger generation of workers
for walkable, urban settings
near mass transportation also
put suburban office parks at a
disadvantage.
But real-estate investors
buying and improving older
properties in desirable loca-
tions have found that tenants
have been willing to pay higher
rents for extensively renovated,
modern spaces with upgraded
mechanical and power capacity
to accommodate more dense
office settings.
“There is a combination of
new money, new equity and in-
vestors who had not been in
the market previously entering
the market,” said Curtis Foster,
executive managing director at
Cushman & Wakefield.
Conversions of obsolete of-
fice parks into apartment
buildings or mixed-use projects
have removed low-rent office
properties from the market,
another factor pushing the
state’s average asking rents
higher, said brokers and ana-
lysts.
But landlords spending to
upgrade buildings is a primary
driver, and the bet already has
paid off for some. Depending
on the property, landlords said
they have seen rent increases
ranging between 7% and 15%
after completing renovations.
Mountain Development
Corp. and Square Mile Capital
Management LLC invested
more than $20 million to rede-
velop and market 56 Livingston
Ave. in Roseland, a 400,000-
square-foot property purchased
from Merck & Co. in 2012.
Since then, the joint venture
has signed large leases with
law firms Lowenstein Sandler
LLP and Connell Foley LLP.
Rents for conventional office
buildings were in the low $20s,
but after the overhaul of the
Roseland property, the part-
ners now expect to get above
$30 a square foot, said Michael
Seeve, president of Mountain
Development. The company
has launched a similar strategy
at 5 Garret Mountain Plaza in
Woodland Park, a 102,000-
square-foot building where
plans call for transforming the
rooftop into an outdoor lounge.
NY
R Train Derails in Latest Mishap
BY MARA GAY
Even in a subway system be-
set with delays and other woes,
the derailment of an R train on
Sunday raised some eyebrows.
The train was entering the
86th Street station in the Bay
Ridge section of Brooklyn at
about 5:30 a.m. when a chunk
of wall collapsed onto the track,
lodging itself under the train
and causing it to derail.
No one was hurt and work-
ers restored service by
late Sunday afternoon, accord-
ing to a spokesman for the Met-
ropolitan Transportation Au-
thority. Officials said they didn’t
expect the incident to af-
fect Monday’s commute.
But transit advocates and
others said the episode was a
grim reflection of the state of
New York City’s overstressed
subway system, which is strug-
gling to keep up with record
Comic Karen Bergreen performing at West Side Comedy Club, one of the new spots that have opened in the city in recent years.
New Clubs, Venues Punch Up Comedy Scene
BY CHARLES PASSY
New York City is getting se-
rious about joking around.
The city is enjoying a comedy
boom with the opening of sev-
eral new clubs in the past few
years. West Side Comedy Club,
a 100-seat venue on Manhat-
tan’s Upper West Side, is one of
the latest additions to the scene,
launching in early October.
And other venues are add-
ing comedy to the mix. Fish-
bowl, a bar and lounge at the
Dream Midtown hotel, has
launched a monthly comedy
program, with the next one
slated for Wednesday night.
Established clubs say their
business has been growing as
well. Case in point: Carolines
on Broadway, the 284-seat
Times Square club that has a
roster of such familiar comedi-
ans as Tracy Morgan, Kathy
Griffin and Dave Chappelle.
Owner Caroline Hirsch says
attendance has increased
roughly 50% during the past
25 years to about 150,000 a
year. Comedy is “bigger than
ever right now,” she said.
Several factors are driving
this trend, industry insiders
said. Comedy has become more
accessible, with stand-up acts
showcasing their work through
a range of mediums, including
online videos, podcasts and
satellite radio. Such platforms
serve to boost interest at the
club level by building familiar-
ity with the comedians.
Audiences have “more of an
idea of who they’re coming to
see,” said Jim Norton, a vet-
eran stand-up and a host on
satellite service SiriusXM.
Mr. Norton appeared at the
2017 New York Comedy Festi-
val earlier this month. The 14-
year-old festival, widely con-
sidered the city’s premier
annual comedy showcase, has
experienced growth as well. It
now encompasses 100-plus
shows, more than three times
the number in its early years.
Comedy clubs also have
tweaked their business models
from the traditional free-stand-
ridership after decades of un-
derinvestment.
Riders in New York City have
endured increasing delays in re-
cent years, as well as more
crowded trains. After several
high-profile incidents earlier
this year, including one in
which hundreds of people were
No one was hurt in the
incident. Monday’s
commute isn’t expected
to be affected.
trapped underground in an F
train for more than 40 minutes
in June without air condition-
ing, improving the subway sys-
tem emerged as possibly the
city’s hottest political issue in
the Nov. 7 election.
How Owners
Can Hit It Big
Want to run a successful
comedy club? It’s all about fol-
lowing a few key rules, accord-
ing to Eugene Ashe, owner of
West Side Comedy Club, a new
stand-up venue on the New
York City scene.
u Keep the food and
drink simple: At restau-
rants or bars, patrons ar-
rive at various times. But
at comedy clubs, they
typically come all at once.
That means club owners
must keep the menu short,
with lots of finger foods and
sandwiches, so the staff can
get multiple orders out at the
same time. The same goes for
drinks, with a caveat: Because
service often occurs during
shows, noise has to be kept to
a minimum. In other words,
ing venue. West Side Comedy
Club is located in the basement
of Playa Betty’s, a Mexican res-
taurant, and the two businesses
have the same ownership. That
means there is less pressure for
the club to succeed by itself,
said Eugene Ashe, the principal
owner of both the stand-up
venue and restaurant.
It also means Playa Betty’s
and West Side Comedy Club
can cross-market themselves.
The restaurant encourages cus-
tomers to head downstairs by
providing a sneak peek with a
live feed of shows from the
club. The club tries to get pa-
trons to hang out at the restau-
rant after performances with
the offer of a free mini-cocktail.
West Side Comedy Club
isn’t alone in thinking outside
the box. At Q.E.D., a three-
year-old club in the Astoria
neighborhood of Queens, the
space is used during the day
for classes in everything from
embroidery to origami.
“There are so many creative
people in the neighborhood,
Monday, November 27, 2017 | A10A
“There is a general sense
that the subway system is com-
ing apart before our very eyes,”
said John Raskin, executive di-
rector of the Riders Alliance, a
transit-advocacy group.
Gov. Andrew Cuomo, who
controls the MTA, has said
Mayor Bill de Blasio should pay
half of an $836 million plan to
stabilize the subway system.
Mr. de Blasio has refused, not-
ing that is about the same
amount the governor has di-
verted from the MTA’s operat-
ing fund for other state uses.
“New Yorkers deserve a safe
and reliable transit system. The
first step towards that starts
with a fully funded subway ac-
tion plan, which should be
funded by returning the $456
million the state diverted from
our subways and buses,” Austin
Finan, a de Blasio spokesman,
said in an email. “Instead of
spending our dollars on upstate
“You don’t want to have any
blender drinks,” Mr. Ashe said.
u Create showcases on
slower nights: It’s easy to pack
a club on the weekends with
name talent, but what about
the start of the week? Clubs
often offer open-mic or “talent”
nights. Such events give bud-
ding comics a chance to prove
and we’re not going to have a
stand-up show at 1 p.m. in the
afternoon,” said Chris Gers-
beck, who handles Q.E.D.’s
marketing.
Some newer clubs are dis-
pensing with drink or food
minimums for customers, long
a key part of the economic
equation for stand-up venues.
150,000
Yearly attendance at the comedy
club Carolines on Broadway
“We find that it alienates
our patrons,” said David Kimo-
witz, one of the owners of the
Stand comedy club in Manhat-
tan’s Gramercy Park neighbor-
hood and the Standing Room
in Long Island City, Queens.
Mr. Kimowitz said ditching
minimums puts the onus on
the clubs to deliver more ap-
ski resorts, the state should re-
turn those dollars to city tran-
sit riders,” he said, referring to
a nearly $5 million payment
the MTA made last year to a
state ski authority.
Morris Peters, a Cuomo bud-
get spokesman, said the MTA
owed the state money, but that
the payment was small com-
pared with the amount of state
funding allocated to the transit
agency. He said the $456 mil-
lion was used to pay debt ser-
vice on MTA capital projects.
Cuomo spokeswoman Dani
Lever said the state is commit-
ted to improving the transit
system and has allocated $8.4
billion in capital money and half
of the $836 million in funding
for the subway stabilization
plan. “While we take action to
meet the transit challenge, the
city refuses to do the same at
the expense of the New York-
ers,” she said in an email.
BYRON SMITH FOR THE WALL STREET JOURNAL (2)
themselves—typically, at no
cost to club owners, with per-
formances for an audience
filled with family and friends.
At West Side Comedy Club,
which hosts a Tuesday talent
night, the comics are required
to bring 10 patrons.
u Capitalize on the week-
ends: Club owners often
add a third show on Friday
and Saturday nights to
take advantage of larger
audiences.
u Make sure the comics
are happy: It isn’t enough
just to offer a comedian a
free drink as part of a gig. Mr.
Ashe likes to serve them a
meal, saying it creates good-
will and spreads the word
about the club in the comedy
community. “We have had
comics come in and be like, ‘I
heard about these chicken
wings,’ ” he said.
pealing fare, so there is no
need to force customers to or-
der. “You are going to want
more,” he said.
Minimum or no minimum,
Mr. Kimowitz is enjoying suc-
cess, particularly at the Stand,
where he says the club has to
turn away patrons on Fridays
and Saturdays, its busiest
times. “We do our best to get
those customers back in on a
late show or another night
that week,” he said.
What is happening today
recalls a few decades ago,
when stand-up comedy first
went mainstream and clubs
flourished. That led to an
overexpansion, and the nation-
wide comedy boom went bust
by the mid-1990s.
Now, there is hope that the
boom will stick. As the world
becomes a more unsettling
place, the comedy club becomes
a haven of sorts, insiders say.
“It’s one of the last places
where people tell the truth,”
said Mr. Ashe of West Side
Comedy Club.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A10B | Monday, November 27, 2017 NY * * THE WALL STREET JOURNAL.

GREATER NEW YORK

GREATER NEW
YORK WATCH
NEW YORK STATE

Gun Is Discharged
Into Floor of Mall
A crowded mall in Hudson
Valley was evacuated Sunday af-

CLOCKWISE FROM LEFT: CLAUDIO PAPAPIETRO FOR WSJ; MARK KAUZLARICH FOR WSJ (2)
ter a gun discharged into the
floor, causing minor injuries to
two bystanders, police said.
The gun went off shortly af-
ter 3 p.m. at the Galleria at Crys-
tal Run in Middletown, about 70
miles north of Midtown Manhat-
tan. Video posted on social me-
dia showed armed police in tac-
tical gear running down a
corridor of the mall while shop-
pers ran in the other direction.
Chief Robert Hertman of the
Wallkill Police Department said
officers were still seeking the

Chefs Cause Stir

man whose gun went off. Police
didn’t know if the discharge was
accidental, he said.
The two people who were

As Pasta Comes
hurt were being treated for mi-
nor lacerations. Chief Hertman
said it was unclear how they

were injured.
—Associated Press
NEW JERSEY
Predominantly Black
Churches Vandalized
Acts of vandalism committed
at five predominantly black
churches in northern New Jersey
are being investigated as possi-
ble bias crimes, prosecutors said.
Broken windows and dam-
aged exterior signs were discov-
ered Saturday at the Morristown
Church of Christ in Morris Town-
ship and four churches in nearby
Morristown—Church of God in
Christ for All Saints, Bethel
A.M.E. Church, Calvary Baptist
Church and Union Baptist
Church.
The vandalism apparently oc-
curred late Friday or early Satur-
day, authorities said. It wasn’t
clear if any of the acts are
linked or how many people may
have been involved.
Police have increased the
number of patrols at the
churches. No arrests have been
made.
—Associated Press
To Fast Casual
BY JEANETTE SETTEMBRE
It’s spaghetti and meatballs
like grandma used to make,
served in the culinary equiva-
lent of a New York minute.
Made-to-order pasta dishes
such as fettuccine Alfredo and
rigatoni Bolognese are being
churned out at the speed of
burrito-slinging at Chipotle.
Italian food is having its fast-
casual moment.
After launching upscale red-
sauce restaurant Allora in Mid-
town last year with his father,
Tim Gjonbalaj created a more
casual noodle concept, ePasta,
which is set to open Monday in
Manhattan’s Financial District.
Customers order at a marble
counter in the open kitchen
from a menu that features
dried and fresh pastas including
bowls of bowtie-shaped farfalle
with broccoli rabe and Italian
sausage, or penne in a spicy ar-
rabiata sauce whipped up in
minutes with a pasta cooker.
The gnocchi pesto is $12; the
same dish costs $23 at Allora.
It is no surprise that chefs
with fine-dining backgrounds
are looking to cash in on a
fast-casual future. Sales at
quick-service restaurants were
forecast to reach $234 billion
in 2017, a 5.3% gain over
2016’s $222 billion, according
to the National Restaurant As-
sociation.
In 2015, Panera Bread raked
in more than any other fast-ca-
sual restaurant with $4.8 bil-
lion sales in the U.S.; Chipotle
ranked No. 2 with $4.4 billion,
according to food-service in-
dustry research firm Tech-
nomic Inc.
Shake Shack’s Danny Meyer
recently dabbled in grab-and-go
Italian with his pizzeria Mar-
tina in Manhattan’s East Vil-
lage, which also serves meat-
ball subs, salads and rice balls.
A number of other quick-
service Italian spots are twirl-
ing up pasta, pronto.
Chef Mark Ladner, formerly
of Michelin-starred Del Posto,
set out to open the McDonald’s
of noodles, only healthier, with
Pasta Flyer in Greenwich Vil-
lage. The space, a former Chi-
potle, has been transformed
into a terrestrial-inspired din-
ing room with a hanging UFO
and a black-and-white mural of
Rome.
Mr. Ladner leads the assem-
bly line stirring up sauces for
pasta combos such as fusilli
with pesto; whole-grain riga-
toni in a meat ragout; creamy
fettuccine Alfredo; and gluten-
free penne. Each are is priced
at $7 to $8.
For $9.99, customers can get
a full meal of spaghetti and
miniature-size meatballs in
Chef Mark Ladner, left and above left with his staff at Pasta
Flyer in Greenwich Village. Above, spaghetto alla vodka with
meatballs from ePasta, a new restaurant in the Financial District.
marinara sauce with a side
salad, and a soda or sparkling
water.
Sides such as the lasagna
snack—a deep-fried bar of
cheesy pasta—can be served in
under five minutes.
“We’re not necessarily inter-
ested in the foodie community.
We’re trying to become a nor-
mal place to normal Americans
who think food is just a meal,”
Mr. Ladner said.
On a recent evening, 63-
year-old diner Philip Ashley,
who lives in the neighborhood,
said: “The pasta and meatballs
were right on the money.” He
suggested, however, that pa-
trons “may want slightly bigger
portions.”
Boiling pasta is easy, but
serving it perfectly al dente
quickly and consistently is the
challenge. If the noodles sit out
too long, they get soggy. At
Pasta Flyer, dry pasta is cooked,
frozen and flash-boiled.
“I get pasta a lot and I find
that it’s often overcooked or
mushy, this was super al dente.
It’s excellent,” Gina Zafran, 29,
of the Upper West Side, said of
the fusilli.
Nona’s Italian food is served
in a hip, pink dining room at
the Sosta in the Nolita neigh-
borhood of Manhattan. Insta-
gram-obsessed diners hold
smartphones up to the neon
sign blaring “Mangiamo Baby!”
above the counter, where zuc-
chini noodles can be substi-
tuted for the carb-filled variety.
An early adopter of the grab-
and-go noodle trend was boxed-
pasta brand Barilla. Casa Barilla
restaurant opened in Midtown
in 2013, serving pasta, pizza
and salads in a snap. The chain
recently expanded to Southern
California and to Dubai. Prices
range from $7.95 to $12.95.
“This is about better ingredi-
ents and better foods in the
right portions that happen to
be delicious,” said restaurant
consultant Clark Wolf.

Maximize the Impact of

Your Employee Health Program

Visit www.heart.org/workplacehealth to learn more and enroll today.

The American Heart Association’s new Workplace Health

Achievement Index is a national continuous quality improvement
program called for by its CEO Roundtable. It assesses and
recognizes the health of the workplace and the workforce.
Because good health is good business.
 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
The Mystery Inside 2017’s Hot Toys
Anticipation and surprise for children are themes as companies ride the YouTube unboxing phenomenon
BY ANNE MARIE CHAKER
TOY MAKERS are bringing an el-
ement of surprise to the holiday
season.
Taking a cue from the YouTube
phenomenon known as unboxing—
viral videos in which people theat-
rically unpack hot new products—
companies are churning out tiny
charms, stickers and golf-ball-size
critters, all tucked away inside lay-
ers of plastic. The mystery objects
have become one of the hottest
categories of toys this season.
MGA Entertainment Inc.’s L.O.L.
Surprise! Big Surprise is a glit-
tery, half-sphere container that
includes three tiers of toys, each
bigger than the last. The 19
smaller packages feature “fizz
balls,” plastic charms and L.O.L.
Surprise! dolls and clothing. The
Los Angeles-based company,
which also makes Bratz dolls, says
the $70 toy “takes unboxing to
new extremes.”
Big Surprise is already sold out
in many stores, and is being of-
fered on eBay and elsewhere for
significantly more.
For Charlotte, N.C., sisters
Regan and Piper Haycock, a big
part of what makes the toy so de-
sirable is discovering what’s inside
all that packaging.
“There’s so many layers you can
unwrap!” says Piper, age 7.
She and Regan, 9, watch toy-un-
boxing videos on YouTube almost
every day after school, says their
mother, Stacy Haycock, a financial
analyst for Perdue Farms. After
seeing numerous videos of review-
ers unboxing the Big Surprise, the
girls could talk of little else. When
a Target holiday store circular ar-
rived in the mail, Piper circled a
picture of the toy with black
marker.
So when Ms. Haycock noticed
one Big Surprise left on a shelf at
her local Target in early Novem-
ber, she grabbed it and used a cou-
pon to bring the price down to
about $50. “I don’t usually spend
$50 on toys, but I figured I should
get it because I may never see one
again,” says Ms. Haycock. She is
saving it for under the Christmas
tree.
Unboxing videos, also big with
technology and fashion reviewers,
have become a key way children
learn about new toys, and their
popularity has grown exponen-
tially in recent years. A recent
search for “toy unboxing” on You-
Tube, a unit of Alphabet Inc.’s
Google, brought up more than 12
million results. A Google spokes-
woman declined to provide more
specific numbers on the genre, but
pointed to a 2014 study the com-
pany did that showed a 57%
growth in unboxing videos views
between 2013 and 2014, and a 50%
increase in uploads.
With the weeks between
Thanksgiving and Christmas mak-
ing up one-third of the entire $27
billion toy business, according to
Juli Lennett, senior toy analyst at
market-research firm NPD Group,
THE STORY BEHIND 10CC’S ‘I’M NOT IN LOVE’
GAB ARCHIVE/REDFERNS/GETTY IMAGES
10cc in 1975. From left, Graham Gouldman, Eric Stewart, Kevin Godley and Lol Creme.
LIFE&ARTS
Children don’t know precisely what
will be in the Hatchimals Surprise
egg, top, or the Crate Creatures
Surprise, right. Mystery is part of the
toys’ appeal. Some Pikmi Pops items,
above, can be attached to backpacks.
it’s no surprise that toy makers
are pushing their own versions of
unboxing.
Australia-based Moose Toys,
maker of the popular Shopkins
grocery-store figurines, launched
its Pikmi Pops in September. The
toy, a plastic lollipop-shaped con-
tainer, hides “mystery items’” such
as stickers, lanyards and charms.
“It’s like a ‘Blind Bag’ on ste-
roids,” says co-chief executive Paul
Solomon, referring to the popular
merchandising concept of hiding
small figurines in foil bags. “We
put a lot of focus on packaging
and presentation.”
ANATOMY OF A SONG | By Marc Myers
TOYS
The standard-size Pikmi Pops
Surprise Pack retails for about $11
and is designed for girls ages 5 to
10, who are encouraged to collect
all of the characters.
The toys come with string to
latch the characters, classified as
common, rare or ultrarare, onto
backpacks for displaying at school.
Each of Spin Master Corp.’s
Hatchimals Surprise, released in
October, holds plush twin critters
in a single egg that cracks open af-
ter being cuddled.
When designing the toy, the
company decided to provide con-
sumers with a clue, says James
MITCH O’CONNELL (ILLUSTRATIONS); PHOTOS CLOCKWISE FROM TOP: SPIN MASTER LTD.; MOOSE TOYS; MGA ENTERTAINMENT
Monday, November 27, 2017 | A11
Martin, head of robotics at the To-
ronto-based company. The color of
each speckled egg suggests which
family the creatures inside belong
to, without revealing the identity
of the set of twins that will hatch.
Mr. Martin says consumers
don’t necessarily want a complete
surprise when they’re paying
$69.99 for a toy. “You don’t want
to worry a mom spending $70 and
getting something she doesn’t
want,” he says.
The demand for unbox-
ing toys has been a welcome sur-
prise for companies, whose prod-
ucts must compete with the lure of
RELEASED IN MAY 1975, 10cc’s
“I’m Not in Love” reached #2 on
Billboard’s pop chart and helped
inspire the British synth-pop
movement of the early ‘80s. Re-
cently, co-writer, electric pianist
and lead vocalist Eric Stewart; co-
writer, guitarist and bassist Gra-
ham Gouldman; drummer Kevin
Godley; pianist Lol Creme and for-
mer receptionist Cathy Redfern
talked about the song’s evolution.
Mr. Stewart’s latest album is “An-
thology” (Cherry Red), Mr. Gould-
man’s is “Play Nicely and Share”
(Wienerworld) and Mr. Godley’s is
“Muscle Memory” (PledgeMusic).
Edited from interviews.
Eric Stewart: One morning in the
fall of 1974, my wife, Gloria, and I
were having breakfast at home in
England. At some point, she said,
“Why don’t you say you love me so
much any more?”
We had been married nine years
by then. I said, “Look, if I say that
every day, the words will lose their
meaning, won’t they?” She said,
“No, they won’t.” We left it at that.
smartphones and tablets for chil-
dren’s attention. Total toy sales
rose 5% in 2016, down slightly
from a 7% increase a year earlier,
according to NPD data.
MGA Entertainment Chief Exec-
utive Isaac Larian says the com-
pany underestimated demand for
the L.O.L. Surprise! Big Surprise by
more than half. Since the toy’s
launch on Sept. 29, 1.2 million Big
Surprises have been shipped to
stores. Mr. Larian says current
company estimates indicate de-
mand for more than 3 million total
units.
MGA Entertainment plans to ex-
pedite another 300,000 units to
stores by Dec. 12, but Mr. Larian
says factory capacity limits how
many toys can be delivered by
Christmas.
The company is launching an-
other unboxing product on Dec. 3,
due in part to the success of Big
Surprise. Aimed at boys ages 6 to
10, Crate Creatures Surprise fea-
tures pet monsters such as Blizz
the Yeti and Snorthog the Wart-
hog.
Tung Tu, a 44-year-old program
manager who lives in Gaithers-
burg, Md., says his 7-year-old
daughter, Violet, had been asking
for a Big Surprise every day for a
month. Mr. Tu noticed that most
stores were sold out of the toy. He
eventually found a Wal-Mart store
45 minutes away, in Washington,
D.C., that had it in stock, and or-
dered the toy for next-day pickup.
He ended up buying three. Violet
received her Big Surprise in ex-
change for an excess of Halloween
candy. Mr. Tu intends to give the
other two to his nieces, ages 5 and
2½, for Christmas.
After breakfast, I went off to the
living room, where I had a grand pi-
ano and my acoustic guitar. I began
writing a song about saying “I love
you” without actually saying it.
As I worked on the lyrics, I tried
to balance what Gloria wanted me
to say and how saying it would
trivialize how much I loved her. At
first, I tried a contrast. I sang, “I’m
not in love” followed by things like
“It’s because I adore you.” But on
paper, it seemed clichéd and trite.
Instead, I wrote about the con-
flict between feeling a certain way
and avoiding expressing it.
When I arrived at Strawberry
Studios in Stockport, about 20
minutes from my home, Lol Creme
and Kevin Godley were busy on an-
other song. So Graham Gouldman
and I worked on “I’m Not in Love.”
He came up with masterful chords.
Graham Gouldman: We also needed a
second eight-bar bridge. All at once,
Eric and I came up with, “Oooh,
you’ll wait a long time for me”
along with the music and chords.
Please see ANATOMY page A13
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A12 | Monday, November 27, 2017 NY THE WALL STREET JOURNAL.

LIFE & ARTS

WHAT’S YOUR WORKOUT? | By Jen Murphy

The Football Team Full of Ph.Ds

The Brigham Young University women’s faculty flag football team spends a night each week battling younger opponents
THE WOMEN on Brigham Young
University’s faculty flag football
team are no slouches on the field
or in the classroom. The team in-
cludes lawyers, astrophysicists, po-
litical scientists and psychologists.
“Most of the people on the team
have at least three degrees,” says
team captain Denise Stephens, an
associate professor in the depart-
ment of physics and astronomy.
Since forming in 2011, A Lot has
been the sole women’s intramurals
faculty team, playing opponents an
average of 20 years younger on
fields at the Provo, Utah, campus.
Head coach and associate political
science professor Jessica Preece
jokes that the team doesn’t score
often, but the name is a reminder
that, even if they don’t win, they
still have great parking.
Kif Augustine-Adams, a profes-
sor of law at BYU’s J. Reuben Clark
Law School, has played defensive
tackle since the team’s inception.
At 53, she’s one of the oldest
members. “I’m gray-haired and
starting to wrinkle, but when I ef-
fectively block a 20-year-old on
the defensive line or rush the op-
posing quarterback and almost
pull her flags before she throws, I
feel triumphant,” she says.
The team recruited Dr. Ste-
phens, 43, in 2014 after learning
she played on a recreational soccer
team. At first, she was pegged to
play safety because of her speed.
But when teammates saw that she
could also catch a football, they
moved her to wide receiver. On de-
fense she plays cornerback.
“My legs get a great workout
A Note on
ACL Injuries
Anywhere from 80,000 to
250,000 ACL injuries occur each
year in the U.S., according to the
American College of Sports Medi-
cine. The ligament connects the
femur to the tibia and helps sta-
bilize the knee during cutting and
pivoting activities. The injury is
frequently associated with sports
but can occur in daily life, like if
you suddenly lunge to grab
something, says Margot Putukian,
director of athletic medicine at
Princeton University.
Data suggests that noncon-
tact ACL injuries can be pre-
vented by implementing
strengthening exercises that tar-
says she sees A Lot BYU’s women’s faculty flag football team play women half their age. Meagan Ricks, below, get the core and the muscles
as role models for runs with the ball. Denise Stephens, above, has helped lead the women’s faculty flag football surrounding the hip and lower ex-
students. “It’s good team to its winningest season this year. tremities, Dr. Putukian says.
for the younger gen- “Exercises that work on im-
eration to see that proving the techniques of jump-
your athletic life ing and landing, so that the knee
doesn’t have to end is flexed and the knee remains
after college,” she over the toe, can lessen impact
says. forces,” she says.

CHAD HURST FOR THE WALL STREET JOURNAL

trying to pick off 20-year-old re-
ceivers,” she says. “It feels like do-
ing wind sprints.”
This season, as team captain,
Dr. Stephens has played every po-
sition except running back. “I’m
like a mom, making sacrifices so
everyone is happy and positions
are covered,” she says.
Dr. Stephens had surgery for a
torn right anterior cruciate liga-
ment seven years ago, and last
fall she had her right meniscus re-
moved following a soccer injury.
She has reluctantly decided to
give up soccer. Flag football re-
quires diving and quick moves,
but Dr. Stephens says it’s less ag-
gressive than soccer and allows
her to have a competitive outlet
with less risk of injury. “The most
common injury is breaking a fin-
ger while trying to nab a flag,”
she says.
Completing passes and gaining
yards has brought the women to-
gether as friends and colleagues.
“A lot of academic collaboration
has happened because of A Lot,”
says Dr. Stephens, who is working
with two teammates to write a
grant for the National Science
Foundation to increase the reten-
tion of women majoring in the sci-
ences.
Dr. Stephens, who is married
with seven children ages 3 to 21,
The team finished
the regular season
2-3. “It’s probably
our best season
ever,” Dr. Stephens
says. If A Lot wins
its tournament game
on Nov. 30, the team
will advance to the
divisional champion-
ship on Dec. 2.
The Workout
Flag football has
spring (April-May)
and fall (September-
November) seasons.
A Lot held formal
practices once a
week during its first
season in 2011 to work on plays,
but it became too tough to sched-
ule. Games take place one night a
week and consist of two 20-minute
halves, with seven players on each
side on the field.
On the morning of a game, Dr.
Stephens likes to run. “I think it
loosens up my body,” she says. She
runs for 60 to 70 minutes three
days a week, often at 5 a.m. “I’m
also an astronomer, so getting to
see the constellations while I run
is incentive to wake early,” she
says. Afterward, Dr. Stephens
spends 10 minutes stretching. She
also competes in five races a year,
ranging from 5Ks to half-mara-
thons.
Dr. Stephens alternates running
with strength training at the BYU
gym, which faculty members can
use at no cost. She does four to
five exercises focusing on upper
body one day and on lower an-
other.
Lower-body strength has been
especially crucial since her knee
injuries. “I’ve learned to love the
leg-press machine,” Dr. Stephens
says. She also uses the hamstring-
curl machine and does lunges, calf
raises and squats. She keeps a set
of dumbbells at home for the days
when she can’t make it to the gym.
The Diet
“I’ll be honest, I’m not the best
with diet,” Dr. Stephens says. Pre-
run she makes a SlimFast shake
with almond milk. Post-run, she
has a protein shake or, if she isn’t
teaching, she might have a fried
egg with toast and avocado. A
chicken breast, an apple, cheese
sticks, celery or cucumber slices,
and Greek yogurt go into her lunch
bag. With seven children, she jokes
that dinner is “whatever I can get
my kids to eat.” Fajitas and spa-
ghetti and meatballs are staples.
If someone sustains an ACL
injury and requires surgery, a re-
habilitation program should allow
them to return to sports, Dr. Pu-
tukian says. “An emphasis on
hamstring strength versus quad-
riceps strength is recommended,”
she says, “and one-legged squats
or functional training emphasizing
balance and proprioception are
useful.”
Her indulgence is Baskin-Robbins
peanut butter ’n chocolate ice
cream.
The Gear
Dr. Stephens wears soccer cleats, a
knee brace, a team jersey and yoga
pants for games. “Some ladies
wear sticky football gloves, and I
need to get a pair,” she says. Each
team pays $40 for one season of
flag football, which works out to
about $5 per member. Because Dr.
Stephens often runs in the dark,
she also uses a reflective vest and
headlamp. She pays between $100
and $130 for her Altra running
sneakers.
The Playlist
“I have an ’80s playlist of songs like
‘Girls Just Want To Have Fun,’ by
Cyndi Lauper, and ‘Vogue,’ by Ma-
donna. I also like upbeat country.”

NATURAL HISTORY
Tuesday December 5, 2017 at 10 am

LAPIDARY WORKS OF ART,

GEMSTONES AND MINERALS
Wednesday December 6, 2017 at 10am
Los Angeles

PREVIEW INQUIRIES
December 1-5 +1 323 899 1443
claudia.florian@bonhams.com

Left Below Gift Solutions for Busy Professionals

SPECTACULAR ALASKAN GOLD
TRICERATOPS SKULL NUGGET This holiday season, give well-made gifts of quality
Hell Creek Formation, $45,000-55,000 they’ll use and enjoy all year long, from leather goods
Marmarth, North Dakota and writing instruments to the latest tech innovations.
$125,000 - 150,000
Shop Levenger.com for special offers
and sales on our holiday gift collection
Professional Accessories Bags & Totes
Home & Office Furniture & Lighting Travel Essentials
Folios & Notebooks Writing Instruments
International Auctioneers and Appraisers – bonhams.com/naturalhistory
© 2017 Bonhams & Butterfields Auctioneers Corp.
Levenger.com 800.544.0880
All rights reserved. Bond No. 57BSBGL0808
 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Monday, November 27, 2017 | A13

LIFE & ARTS

sorship for Magrath at Harvard of her approach.
and established the first Depart- These Nutshells are in a mu-
ment of Legal Medicine there, seum because of Lee’s demand
teaching a scientific approach to that they display “the utmost ac-
crime. The replacement of elected curacy and fidelity in dimension
coroners by physician medical ex- and proportion.” She would some-
aminers was times combine
spurred by her known cases, but
advocacy. otherwise detail
In 1943, at 65, was scrupulously
she began to accurate. Though
create finely de- these scenes
HARVARD MEDICAL SCHOOL/THE OFFICE OF THE CHIEF MEDICAL EXAMINER, BALTIMORE, MD (2)

tailed scenes to cannot be

teach criminal touched by visi-
investigation. tors, locks can
She used them be turned with a
during weeklong key, shades can
seminars to be opened and
train police. And closed. Lee knit
when the Har- tiny stockings
vard department for one victim
closed in 1967, and wrote let-
her scenes, ters for another
which she called using the tip of
Nutshells, were a human hair. In
sent to the Of- one Nutshell, the
fice of the Chief wood used for
Medical Exam- the barn authen-
iner in Balti- Frances Glessner Lee’s Nutshells: tically came
more. Together ‘Red Bedroom’ (c. 1944-48), left, and from a hundred-
with one held a detail of ‘Barn,’ also known as year-old shed on
elsewhere, the ‘The Case of the Hanging Farmer’ Lee’s property.
surviving 19 are (c. 1943-44), above Doll houses
temporarily were a great
united here. Victorian preoccupation. Lee took
Each is accompanied by a short that domain of feminine play and,
description of its characters and in a bizarre twist that was surely
EXHIBITION REVIEW situation. Each can be viewed with related to her own restricted home
a magnifying glass. And in each, life, overturned it, creating gro-
the goal is to determine not who- tesque, artful scenes of domestic

Murder, She Built
BY EDWARD ROTHSTEIN
Washington
WE NOW KNOW whodunit. And
with the startling exhibition “Mur-
der Is Her Hobby: Frances Glessner
Lee and the Nutshell Studies of
Unexplained Death” at the Renwick
Gallery of the Smithsonian Ameri-
can Art Museum, we now know a
lot more about how she dunit. The
best forensic minds have scruti-
nized the evidence. A serial perp,
with perhaps 20 murders to her
name, Frances Glessner Lee
(1878-1962) planned crimes down
to the finest detail: the calendars
she hung on the walls, the water
stains she created, a carton la-
beled “Campbell’s soup” half-
stowed.
It is almost unheard of for a
woman born in the Victorian Mid-
west to have been so practiced in
killing: hanging, stabbing, shoot-
ing, burning. She was obsessive. If
she left clues it was deliberate: an
angled pattern in the blood splat-
ter or crumbled love letters on an
attic floor. Money was irrelevant;
she didn’t need any, already pos-
sessing millions. Each killing cost
her as much as $6,000—the price,
in the 1940s, of a home.
The most peculiar thing is that
she executed her plans using a
custom ruler that turned every
foot into an inch. A 30-inch-high
dining-room table became 2.5
inches tall. A revolver was an inch
long. Lee was a miniaturist of
murder. And these crimes? She
staged them inside doll houses.
The dead were bloodied dolls
painted to reflect appropriate
amounts of decay. But what was
her motive?
Lee was a brilliant eccentric,
heiress to an International Har-
vester fortune, who was prevented
from going to college or pursuing
a profession by her father. She
grew up in coddled solitude in a
granite castle-like home in Chi-
cago. It wasn’t until she inherited
her fortune with the death of her
father in 1936—when she was in
her late 50s—that she could culti-
vate her passion, which wasn’t for
committing murders, but solving
them.
As a child, she had followed
Sherlock Holmes and later became
a friend of George Burgess
Magrath, who studied medicine at
Harvard and became Medical Ex-
aminer of Suffolk County in Mas-
sachusetts. Lee endowed a profes-
dunit but whether death is an acci- violence. As the exhibition points
dent, murder or suicide. “Solu-
tions” are not revealed because
the Nutshells are still used for
teaching. But isn’t it strange that
in the massacre of an entire fam-
ily, the rifle is left in the kitchen, a
shell is found in a child’s room,
and toy chairs on a dresser are
overturned? Or that a woman on a
parsonage floor seems a lot more
freshly dead than the maggot-cov-
ered meat she was supposedly car-
rying?
The writer Erle Stanley Gardner
became a fan, attended her semi-
nars, and said she was the only
person who surpassed Perry Ma-
son in criminal insight; he would
have known. She may have been
the inspiration for Angela Lans-
bury’s character in the TV series
“Murder, She Wrote.” She is the
subject of a forthcoming documen-
tary by Susan Marks (part of
which appears in the exhibition).
And she inspired episodes of
“C.S.I.”—a series that evolved out
out, the setting for 17 of the Nut-
shells is the home; victims were
largely women. They are shot in
bed, hanged in an attic, or dead in
a bathtub. Lee put a miniature
painting of her home in one Nut-
shell, and sometimes used her own
wallpaper and furniture for mod-
els. In some ways, she was making
exaggerated self-portraits.
The exhibition, we are con-
vinced, has it right: She had the
means, she had the opportunities
and she also had motives for her
unexplained crimes.
Murder Is Her Hobby: Frances
Glessner Lee and the Nutshell
Studies of Unexplained Death
Renwick Gallery at the Smithsonian
American Art Museum, through Jan.
28, 2018
Mr. Rothstein is the Journal’s
Critic-at-Large.

ANATOMY
Continued from page A11
Mr. Stewart: When Graham and I finished,
Kevin and Lol joined us, and we recorded
our first run-through using a light bossa
nova beat. But during the playback, Kevin
wasn’t happy with the bossa.

Kevin Godley: For me, the bossa thing wasn’t

daring. We needed something bigger and
more atmospheric and evocative. What I
heard in my head was a wash of voices, a
choir that would hover above the music, like
the one I had heard in the movie “2001: A
Space Odyssey.”

Lol Creme: Kevin’s choir idea was great but it

would be costly. Instead, I suggested we re-
cord the voice parts ourselves. I said we
could do it by singing 13 notes in a chro-
matic scale and recording them onto 13 dif-
CATHY REDFERN

ferent tape loops. Then we’d record the

loops individually onto our 16-track tape
machine.

Mr. Stewart: It was ingenious. But first we
had to record the song’s basic rhythm track
and my lead vocal as a guide.
On one track, I played the electric piano
and sang the lead vocal. Graham played
rhythm guitar on the second track. On the
third, Kevin used a mini-Moog set to sound
like a bass drum.
Once we recorded the rhythm track, we
spent weeks recording our voices and trans-
ferring them onto our recorder. Then the four
of us worked the mixing console’s 24 volume
faders with two hands to create a choir be-
hind the rhythm track and my lead vocal.
Mr. Creme: The song still needed texture. I
suggested Graham overdub an eight-bar
bass solo on the first bridge. Next came my
piano intro to the bridge. I also suggested
we have a female voice whisper, “Get it to-
gether.”
Mr. Stewart: At that very moment in our con-
versation, Cathy Redfern, the studio’s recep-
tionist, stuck her head in. She whispered,
“Eric, there’s someone on the phone for
you,” and left. Lol said, “That’s it! Let’s get
Cathy to speak the words.”
Mr. Creme: I went down the hall after Cathy.
When I told her what we wanted, she pro-
tested a bit, saying she had never recorded
anything before.
Cathy Redfern: I was 21 then. I adored the
boys, and they treated me like their sister.
When Lol told me their idea, I thought it
might be a prank. They were always kidding
around. But Lol picked me up and threw me
over his shoulder. In the control room, the
guys were serious.
Mr. Creme: But the more I thought about
that line, the more “Get it together”
Cathy Redfern at Strawberry Studios in 1974.
sounded harsh. So I changed it to “Be quiet,
big boys don’t cry,” which felt softer and
more comforting.
Ms. Redfern: I went into the studio with
Kevin, who was there to steady me and give
me a cue. We both put on headphones so we
could hear the song. Kevin touched my arm
when it was time to say the words.
Mr. Stewart: At first, Cathy’s delivery wasn’t
musical enough. We said, “Go softer, go
softer, Cathy. Whisper. Get closer to the
Perfect Holiday Palette
mic.” Then she got it. Color-Changing Alexandrite
Ms. Redfern: Hearing my voice after was sur-
Color-changing stone. Extraordinary rarity. Natural wonder.
real. I couldn’t believe it was me. I was This highly coveted gem exhibits one of nature’s most
thrilled. fascinating phenomena. The rare 1.94-carat alexandrite
displays a lovely greenish hue in daylight, and transforms
Mr. Creme: I went out and bought a child’s to a rich burgundy hue when exposed to incandescent light.
plastic toy music box. When you pulled the
box’s string, it played the English nursery
Certified by the Gemological Institute of America as a natural
rhyme, “Boys and Girls Come Out to Play.” alexandrite, it has undergone no treatment or enhancements
I swung the little box over my head be- to achieve its unique color change. Set in 18K yellow gold
tween the two mics as it played the tune. with Old European-cut diamonds. #30-6079
We wound up with an eerie sound, shifting
from one speaker to the other.
Mr. Stewart: When we finished the album, I
drove Gloria to the studio. The wives of the
other guys joined us. We turned out the
lights and listened to the whole thing, play-
ing it over and over for what seemed like
hours. Everybody loved it.
On the drive home, Gloria asked what
“I’m Not in Love” was about. I told her, “It’s 630 Royal Street, New Orleans, Louisiana • 888-867-9583 • ws@rauantiques.com • rauantiques.com
my answer to your question about why I
didn’t say ‘I love you’ more often.’” Since 1912, M.S. Rau Antiques has specialized in the world’s finest art, antiques and jewelry.
Gloria said the song was so beautiful. Backed by our unprecedented 125% Guarantee, we stand behind each and every piece.
Then she said, “I’d still love if you’d say ‘I
love you’ more often.” From then on, I’ve
said ‘I love you’ to Gloria every night.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A14 | Monday, November 27, 2017 * * THE WALL STREET JOURNAL.

SPORTS
COLLEGE FOOTBALL NFL | By Jason Gay

AUBURN IS
ON A ROLL
Philly Is Feeling Good...and It’s Weird
Yes: I need to spend
the rest of this week
having a full-blown
panic attack about Sat-
urday’s Wisconsin vs.
Ohio State Big Ten
championship—in my nightmares,
Urban Meyer is sitting in my
kitchen in a Buckeyes windbreaker,
cackling, eating all of my Trader
Joe’s animal crackers.
But before my sweaty Badger
anxiety kicks in, let’s address a
handful of NFL topics. (The NFL is
the pro-style football league that
plays on Sundays, Mondays and, I
believe, most Thursdays.)

1. The Philadelphia Eagles are very

Auburn is in the SEC title game. good. I know: I’m really going out on
a long limb of courage here, after
the Eagles improved to 10-1 follow-
BY ANDREW
ing Sunday’s 31-3 demolition of Chi-
BEATON AND BEN COHEN
cago. I can’t be the only person
who’s been quietly waiting for an
THERE ARE potentially cataclys- Eagles implosion, which has yet to
mic scenarios every season that happen—and may not, because this
would force the College Football Philadelphia outfit is balanced and
Playoff committee into tricky deci- confident. It has an MVP fave in tall
sions. Occasionally, one of them person and second-year quarterback
comes true. This year, pretty much Carson Wentz; It has one of the
all of them did. league’s highest-rated defenses;
No. 1 Alabama (11-1) had its un- There’s a giddy optimism around the
defeated season ruined by rival Au- club that feels, well, un-Philly-like.
burn in the Iron Bowl on Saturday, Philly fans can be tough. A few
and there is a real possibility the years ago, former Journal col-
Crimson Tide won’t make the play- league Mike Sielski left to become
off. Auburn (10-2) gets the chance a (great!) sports columnist at the
to play Georgia (11-1) in the South- Philadelphia Inquirer, and to an av-
eastern Conference title game. ocado toast-eating New York me-
The winner of that game will al- dia sissy like me, his job looks like
most certainly make the four-team a meat suit in a shark tank. But lo,
field. Either way, this year’s playoff here’s a shiny, happy Philadelphia
could be headed toward unprece- sports sensation—the Eagles are
dented territory. A two-loss team off to their best start since the
has never made the playoff before. 2004 club that reached the Super
Now there might be as many as Bowl, the rest of the NFC East is Philadelphia Eagles receiver Nelson Agholor leaps over Chicago Bears cornerback Kyle Fuller for a touchdown.
three. Two teams from the same dusted in the rear view, and local
conference have never made it to- complaints are hard to find. An the Atlanta Falcons—the good like he’s going to help me collect bums me out—football is better
gether. Now the SEC might rewrite Eagles team with a rowdy home kind, not the kind we laugh at. Ha- lobster pots and inspect shellfish- when the Cowboys are rocking,
that rule. Alabama has never not field could be a real handful in the haha, they’ve heard all your 28-3 ing licenses on a snowy morning and I still want to see Jerry and
been in the playoff. Now the Crim- playoffs. Of course, I am sure I just jokes—they’re hilllllarrrious!—but off Cuttyhunk. Related: The Patri- Roger Goodell settle their dispute
son Tide might be on the outside jinxed them, and now I’m going to lately they’ve been playing like ots are now 9-2, with four of their with a Gulfstream race.
looking in. get all of Sielski’s angry mail. they’re sick of them. After Sun- last five games coming from the
Auburn helps explain just how day’s 34-20 win over Tampa Bay, buffet that is the AFC East. 7. MR. KHAKIPANTS NFL RU-
peculiar this season has been. It 2. The Minnesota Vikings could be- the Falcons have won 4 of 5, seem MORS. As soon as the Peripatetic
doesn’t matter that the Tigers have come the first NFL team to, you comfortable in their fancy-pants Jim Harbaugh arrived in Ann Ar-
lost twice. They also might be the know. Vikings fans will haaaate new space station/nuclear reactor, bor, it was inevitable that rumors
best team in the country. Another that I’m even whispering about the and are starting to resemble their like this would happen—even if
win over Georgia would all but possibility that Minnesota could dynamic 2016 selves. Julio Jones
An Eagles team with a there’s not even a hint of smoke
rowdy home-field
FROM LEFT: BRYNN ANDERSON/ASSOCIATED PRESS; BILL STREICHER/REUTERS

clinch their playoff spot. host a Super Bowl on its actual had 253 yards receiving versus the that Mr. Khakipants is interested
Alabama doesn’t have another home field. Thanks a lot, Jinxy Bucs, which is more yards than in wearing his khakis on another
chance to strengthen its resume. McJinxFace! But it’s hard to not be the Browns have had in the last 47
advantage could be a sideline. There’s this, however:
Nick Saban’s team will be stuck enthused about these matte Purple seasons combined. handful in the playoffs. Fox’s Jay Glazer reported that a
rooting for two-loss Ohio State to Vikings, especially if you watched number of NFL clubs are enjoying
beat undefeated Wisconsin in the that Turkey Day handling of the Li- 4. Are the Browns going to go the recent Wolverines skid, hoping
Big Ten Conference championship ons (burp!) Case Keenum: Who 0-16? Mmmm, very possi- it would inspire Harbaugh to con-
and two-loss Texas Christian to up- knew? (Besides Case Keenum.) I’m ble…though they do have a Grinch 6. The Cowboys’ star is fading. sider a return to the pro ranks.
set one-loss Oklahoma in the Big 12 going to shut up now because Min- Special Christmas Eve game The wagon wheels appear off in Personally, I don’t like it when tal-
Conference title game. nesota fans are going to get against the Bears. Bears vs. Dallas, now 5-6 after a Thanksgiv- ented coaches leave unfinished
There is no provision in the grouchy. But listen: don’t Airbnb Browns: The perfect way to tell ing home thrashing by the Los business behind—like that old Mi-
sport’s governing documents that your place yet for the first weekend your family: I hate the holidays. Angeles-ish Chargers. Finger ami Dolphins coach, Nicholas Sa-
stipulates Alabama must be in the of February! How would you feel if pointing has commenced; Cow- ban, who fled the NFL to go back
playoff. (We checked.) But any con- the Vikings were in a hometown 5. Grumpy Lobster Boat Captain boys released running back Dar- to the college game, and was
versation about the four best Super Bowl and you had six wea- Bill Belichick Is Scissoring Off His ren McFadden this weekend; and never heard from, ever again.
teams in college football must in- selly Patriots fans sleeping in your Sleeves Again. I don’t know about Jerry Jones disappointingly ap- Whatever happened to Saban?
clude the Crimson Tide. There are guest bedroom, eating Pop-Tarts you, but I don’t like it when Bill pears to have stood down in his I’ve been so focused on America’s
two-loss teams being considered and asking for the Wi-Fi password? wears some uncomfortable, ironed legal battle to turn the NFL last truly great college football
for the fourth playoff spot while Al- Nike pullover like it’s Date Night league office into a Jerry Jones team, the Wisconsin Badgers. And
abama has only one loss. 3. The Atlanta Falcons look like at Panera. I want Belichick to look Original Texas Steakhouse. This my Ohio State panic attack.

Weather The WSJ Daily Crossword | Edited by Mike Shenk

Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day.
d
Edmonton <0 1 2 3 4 5 6 7 8 9 10 11 12 13 Down 34 Island east of
0s 1 “Breakfast at Java
V
Vancouver Calgary
ary
Calgary 30s 0s 14 15 16
10s
Tiffany’s” author 36 Bad thing to hit
p
Winnipeg 17 18 19
Seattle 10s 20s 2 Perfect place 37 God with a
30s 20s
Portland
Por d 50s t
Montreal 30s 20 21 22 23 3 Put up a fight trident
Helena A
Augusta
ttawa
Ottawa 40s
Billings Bismarckk 30s 24 25 26 27 28 4 Fills completely 39 Lush
g
Eugene 30s 40s
T
Torontot A
Albany y 50s
Mpls./St.
p s /St. Pa
pls
t
Boston Paul 5 Angsty rock 40 “Ewww, enough
40s Boise 30s ff l
Buffalo 60s
29 30 31 32 33
oux FFalls
Pierre Sioux ll Detroit
rtford
Hartford genre already!”
Milwaukee k New Yorkk
ew Y
Chicago
Ch
Chic g 70s 34 35
Reno es Moines
Des Cleveland 6 Piccolo’s cousin 41 Chivalrous offer
Salt
ltt Lake
L City
C
City Cheyenne Omaha h Phhil d lphi
h
Philadelphia 80s
40s 60s Pittsbb
Pittsburghg h 36 37 38 39
42 Lavished
Sacramento Denver p g d Indianapolis
Spring
Springfield di p 7 Bone-dry
50s Washingtonhington
hi gton D.C.
DC 90s
San
an Francisco 50s Topeka Kansas C h l
Charleston 40 41 42 affection (on)
C d
Colorado 70s City h
Richmond d 100+ 8 Big Apple line
L
Las
60s Vegas St.. Lou
LLouis LLouisville
Lou
p g
Springs h
Wichita
igh
Raleigh h 43 44 45 46 47 9 Some are bitter 44 EMT expertise
Nashville
h ill
Angeles
Los A
Ange l 70s Santaa FFe 80s C h l tt
Charlotte 45 Climbs, or what
kl
Oklahoma City Memphis hi 10 Shout to a sailor
70s Ph Alb q q
Albuquerque 60s 48 49 50 51
San Diego 60s
Phoenix C
Columbiab
Warm Rain the starred
Little Rock Atlanta
Atl t
80s Tucson
T c i h
Birmingham 52 53 54 55 56 11 Chewy squid answers all have
90s El Paso 80s Ft. Worth Dallas
D ll 70s appetizer
Cold T-storms
J k
Jackson
Jacksonville 57 58 59 60 46 “Shoot!”
Mobile
bil 12 “Well, here we
0s A ti
Austin 70s Stationary Snow 47 Like the smell of
Houstont go!”
-0s Newew Orleans l d
Orlando 61 62 63
10s Tampa bread dough
70s an Antonio
San A t i
13 ___ Antonio
Anchorage
A h g Honolulu
l l Showers Flurries 64 65 66 51 Extreme
20s Miami
80s 80s
30s 80s 60s 18 Worries
40s Ice 53 Not at all wild
CLIMBS | By Zhouqin Burnikel 23 “Moreover...”
54 Destiny’s Child,
U.S. Forecasts City Hi
Today
Lo W
Tomorrow
Hi Lo W City Hi
Today
Lo W
Tomorrow
Hi Lo W
Across 27 Soccer star 48 Anger 25 Takes advantage
of
for one
s...sunny; pc... partly cloudy; c...cloudy; sh...showers; 1 Say bad words Hamm 49 Paper towel
Omaha 71 40 s 55 25 pc Frankfurt 42 39 pc 42 31 r 55 Societal troubles
t...t’storms; r...rain; sf...snow flurries; sn...snow; i...ice 26 Isn’t frugal
Today Tomorrow
Orlando 76 61 s 78 63 pc Geneva 42 31 pc 44 36 r 6 Fortune’s partner 29 Grab a bite layer
57 Give under
Philadelphia 52 34 s 57 43 s Havana 81 64 sh 84 66 pc 28 Pop the question
City Hi Lo W Hi Lo W Phoenix 83 52 s 78 59 s Hong Kong 75 71 c 78 72 pc 10 Makes a move 30 •State fish of 50 “Great pressure
Anchorage 23 16 c 26 23 c Pittsburgh 49 37 s 58 43 s Istanbul 63 50 r 56 47 r Rhode Island comeback!” 31 “Believe It or
Atlanta 63 40 s 64 46 s Portland, Maine 41 18 pc 39 33 pc Jakarta 88 77 t 87 76 t 14 First-stringers 59 Lifeboat mover
34 In addition 52 Explosive stuff Not!” guy
Austin 77 51 s 78 52 s Portland, Ore. 50 43 pc 49 39 r Jerusalem 60 47 pc 62 46 s 60 Muscles
Baltimore 56 34 s 60 39 s Sacramento 60 41 pc 60 45 pc Johannesburg 70 52 pc 72 55 pc
15 It’s west of 32 Mental flashes
Afghanistan 35 Composer Satie 54 Suit accessory strengthened by
Boise 49 31 c 50 32 pc St. Louis 69 47 s 73 46 s London 51 37 r 43 34 pc
33 Noggin belly-dancing
Boston 46 27 pc 44 40 s Salt Lake City 60 31 r 49 34 pc Madrid 55 29 pc 56 38 c 16 “That’s so funny!” 36 Places to relax in 56 Logan of
Burlington 34 19 sf 45 41 pc San Francisco 62 48 pc 61 50 pc Manila 90 79 s 90 78 pc mud “60 Minutes”
Charlotte 63 33 s 64 35 s Santa Fe 66 32 s 54 25 pc Melbourne 71 55 c 86 64 s 17 •Stamp seller Previous Puzzle’s Solution
Chicago 57 47 pc 60 32 pc Seattle 50 44 c 48 41 r Mexico City 68 42 s 72 43 s 38 Bank counter 57 Pop in a bottle M I S O SWF S E N E C A
Cleveland 50 42 s 59 43 s Sioux Falls 68 40 pc 50 27 pc Milan 46 30 pc 42 35 pc 19 Lena of “The fixture I R A N OWL E MO J I S
Dallas 77 56 s 75 48 s Wash., D.C. 58 39 s 61 43 s Moscow 30 25 c 29 22 sn Reader” 58 •Country R VMA N U F A C T U R E R S
C A T M R T A C R E
Denver 76 29 pc 49 30 pc Mumbai 93 72 pc 92 74 pc 39 “Bear with me” album? G E L I G H T B U L B T I S
20 Aunt Bee’s
Detroit
Honolulu
44 38 s
82 72 sh 82 73 r
60 37 s
International Paris
Rio de Janeiro
48
86
43 c
73 t
47 34 r
79 70 t charge
40 Hammer or 61 Proton’s place
O K E D
R E A
P R E
C A U S
D
E
E A L
R AM B O
Houston 76 51 s 80 53 s Today Tomorrow Riyadh 79 60 pc 76 54 s hatchet G B S H AW S Q Y A R D
City Hi Lo W Hi Lo W 21 Pomegranate’s 62 Knight wear E Y E O N B E E P S D A D
Indianapolis 60 42 s 62 40 s Rome 53 32 pc 55 47 pc 41 Princess T I E U P T O MA C E
Kansas City 68 54 s 57 34 pc Amsterdam 49 41 r 46 35 c San Juan 87 75 s 88 76 s color 63 Packers great O P T T V C H A R A C T E R
Las Vegas 68 46 pc 64 49 s Athens 64 49 r 56 46 sh Seoul 42 27 s 48 28 pc Jasmine’s love P R A Y I K E T U G
22 Chichén Itzá Favre R U P A U L S D R A G R A C E
Little Rock 69 41 s 69 46 s Baghdad 66 45 pc 68 46 s Shanghai 63 54 s 66 53 pc 43 •It may involve A N I M A L R A G A L A N
Los Angeles 70 53 pc 76 54 pc Bangkok 89 76 s 91 78 pc Singapore 84 75 t 83 77 c natives 64 Heredity factor
Miami 80 72 pc 81 72 t Beijing 42 28 s 46 19 s Sydney 78 69 t 80 70 t
learning lento H E R S E Y A Y E WA R D

Milwaukee 51 45 pc 54 33 c Berlin 41 39 r 45 34 sh Taipei 74 70 c 85 72 s 24 Sniffler’s need and largo 65 Son of The contest answer is STUFFED CRUST. Each
Minneapolis 58 38 pc 46 27 s Brussels 47 36 r 44 34 sh Tokyo 57 49 pc 60 51 c Aphrodite starred entry begins with a separate two-letter
26 Greed or 45 Veggie burger term: RV, GE, GB, SQ, TV, and RU. Alphabetically
Nashville 64 41 s 66 42 s Buenos Aires 74 46 s 72 54 s Toronto 39 31 s 56 39 s
New Orleans 68 50 s 75 60 s Dubai 81 69 s 84 73 s Vancouver 49 42 r 48 40 r gluttony protein 66 Pert stuffed between the letters of each are R(STU)V,
New York City 50 35 s 54 46 s Dublin 45 34 r 43 32 s Warsaw 39 31 pc 41 33 pc G(F)E, G(FEDC)B, S(R)Q, T(U)V and R(ST)U,
Solve this puzzle online and discuss it at WSJ.com/Puzzles.
s

Oklahoma City 73 52 s 66 39 pc Edinburgh 44 31 r 41 27 pc Zurich 41 34 pc 43 31 c which spell out the contest answer.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
Who’s Afraid of Index Funds?
By Barbara Novick
C
hallenges to the status
quo—political, economic
or social—always evoke
strong emotions, from enthu-
siastic support to fierce criti-
cism. The loudest critics often
have the most to lose, even if
they acknowledge some bene-
fits of the new regime.
This clash is now unfold-
ing over ascendant invest-
ment vehicles: index and ex-
change-traded funds, or ETFs.
The dramatic growth of such
products has been revolution-
ary. More investors are
choosing indexing over funds
managed by traditional stock
pickers, known in the indus-
try as active managers. Since
2009, U.S. index funds have
seen inflows of some $1.7
trillion, compared with out-
flows of nearly $1 trillion for
actively managed mutual
funds.
Indexing has democratized
investing. Today, all Ameri-
cans can inexpensively and
conveniently invest in mar-
kets, countries and strategies
once open only to institu-
tional investors. Yet a few de-
tractors have compared such
passive investing to Marxism
and declared it an existential
threat to the modern securi-
ties market. What exactly do
they object to?
As more individuals and
institutions invest in index
products rather than individ-
ual stocks, critics claim, the
Puerto Rico Doesn’t Want Reform
It has been 10
weeks since
Hurricane Ma-
ria slammed
into Puerto
Rico. The dev-
AMERICAS astation was
fierce. Yet it
By Mary
cannot ex-
Anastasia
plain why al-
O’Grady
most half the
generating ca-
pacity of the Puerto Rico Elec-
tric Power Authority (Prepa)
is still down.
Credit for that goes to
Congress, which in June 2016
passed the Puerto Rico Over-
sight Management and Eco-
nomic Stability Act, a k a
Promesa. It opened the door
to debt defaults that violate
the Puerto Rican constitution
and U.S. law. As is always the
case when the rule of law
takes a back seat to politics,
it has fueled chaos.
Prepa blames its disas-
trous post-hurricane deci-
sions on a shortage of cash.
Yet in the immediate after-
math of the storm, a group of
Prepa bondholders offered
the company fresh debtor-in-
possession financing that in-
cluded a swap of $1 billion in
existing debt for $850 million
in new bonds and $1 billion
in new cash.
Puerto Rico rejected the
offer. “The bondholders’ pro-
posal is not viable and would
severely hamper and limit
Prepa’s capacity to success-
fully manage its recovery,”
Puerto Rico’s Fiscal Agency
and Financial Advisory Au-
thority said at the time. It
added that the offer had the
“appearance” of “being made
for the purpose of favorably
impacting the trading price
What My Mother Told Me About Bad Men
By Angela Rocco
DeCarlo
W
omen have always had
to deal with misbe-
having men—sidewalk
cat callers, subway gropers,
workplace harassers, and the
occasional complete rotter. Yet
it’s also true that some women
misuse their sexual charms to
advance in life. The whole ar-
rangement is unfair, often
predatory and can be degrad-
ing. But it is the way of the
world.
“Never go to a man’s hotel
room,” my mother once told
me. I had a job profiling ce-
lebrities for Chicago newspa-
pers. I brushed off the ad-
vice—I was a professional
woman, after all—until I
found myself in a hotel room
with a barefoot guy wearing a
white terrycloth bathrobe. I
kept my back against the door
while he patted the loveseat
cushion, bidding me come
hither. I asked my questions
and fled.
price of these securities be-
comes increasingly unteth-
ered from the value of indi-
vidual companies. They argue
that companies included in
these indexes see their stock
prices fly higher and higher
regardless of their perfor-
mance, while non-indexed
stocks get ignored like wall-
flowers at a dance.
If passive investing
creates market
distortions, active
managers can win big.
But the numbers tell a dif-
ferent story. Despite the pop-
ularity of indexing, active
managers still dominate the
buying and selling of stocks.
Indexed assets—including
mutual funds, ETFs and insti-
tutional portfolios—account
for less than 20% of all
global equities, according to
our analysis. That’s about
$12 trillion of a $68 trillion
market. The rest is actively
managed.
Those actively managed
assets trying to beat the mar-
ket trade much more fre-
quently than indexed assets
do. At BlackRock, we estimate
that for every $1 of U.S. stock
trades driven by investors
buying or selling index funds,
there are $22 of trades
driven by active stock pickers.
of existing debt.” Heaven
forbid.
More unthinkable was ru-
ining the “flat broke” image
the commonwealth has been
cultivating so it can write
down debt and skip the
matching requirements nec-
essary to receive Federal
Emergency Management
Agency funds. It’s also more
convenient to tap taxpayers
than to borrow money from
private entities asking for ac-
countability. This is particu-
larly true for a state-owned
monopoly like Prepa, which is
as much a political instru-
ment as it is an electricity
company.
When critics complained
last year that Promesa would
alleviate the pressure on is-
land politicians to reform the
welfare state, their concerns
were pooh-poohed. Congress
said Promesa’s “financial
management and oversight
board” would impose the
discipline necessary for re-
form. Negotiated settlements
with bondholders were to be
given priority and existing
restructuring agreements—
like the one between Prepa
and its creditors—were to be
preserved.
None of this happened. Ac-
cording to a spokesman for
the Ad Hoc Group of Puerto
Rico General Obligation
Bondholders, the group
reached a negotiated settle-
ment with the commonwealth
in the spring. But the
Promesa board nixed it. The
board also vetoed an existing
agreement between creditors
and Prepa, in violation of
Promesa guarantees.
Now the oversight board
and Gov. Ricardo Rosselló are
My mother was born in Italy
in 1903. I doubt she’d ever been
in a hotel room in her life. Yet
somehow she knew what every
woman should know—going to
a man’s hotel room alone is
rarely a smart choice.
Going to a man’s
hotel room alone is
rarely a smart choice.
Two years ago our local pa-
per ran a photograph on the
front page of a teenage girl in
a plunging neckline holding a
sign: “Instead of body sham-
ing girls, teach boys that girls
are not sexual objects.” The
story, following the notion on
the sign, was that girls should
be able to appear in any state
of undress and no one, espe-
cially boys, had any right to
react.
Sorry, young lady. The world
doesn’t work that way. Some-
one should have told you.
OPINION
Combine the effects of
greater size and faster turn-
over, and it’s clear that the
price of stocks is overwhelm-
ingly determined by active
traders.
Critics of indexing some-
times point to the specter of
a 100% indexed market. What
would happen, they ask, if in-
dexing replaced stock-picking
entirely? Naturally, this
would make it impossible to
price individual securities
properly. But this hypotheti-
cal ignores the natural equi-
librium created by supply and
demand.
If indexing began to distort
stock prices, that would cre-
ate an enormous opportunity
for active fund managers to
reap big returns—attracting
more dollars to those active
funds and at least partly re-
versing the flow toward index
management. This process is
why active management re-
mains—and will continue to
remain—essential.
Indexing is only one com-
ponent of a diverse, robust
and constantly innovating
ecosystem. Think of ETFs
and index funds as levers
that sit alongside individual
stocks and bonds, actively
managed funds, futures and
swaps, private equity and
IPOs. Together, they combine
to support the smooth func-
tioning of U.S. capital mar-
kets and Americans’ ability
to confidently buy and sell
securities.
locked in a power struggle,
and the board is losing.
The Prepa fiasco is in-
structive. Earlier this month
Mr. Rosselló’s handpicked
Prepa director, Ricardo Ra-
mos, resigned amid allega-
tions that he grossly mis-
managed the hurricane
recovery. As the Journal’s
Andrew Scurria reported ear-
lier this month, a $300 mil-
lion no-bid contract with
Whitefish Energy Holdings to
restore the island’s power
lacked protections for Prepa
and went against the recom-
mendations of the utility’s
lawyers.
The Promesa law, not
Hurricane Maria, is
the real culprit behind
the island’s troubles.
Before a House subcom-
mittee on Nov. 14 Mr. Ramos
defended his decision to hire
the company, arguing that it
was driven by a cash crunch.
But that’s a difficult narrative
to sustain.
After Mr. Rosselló can-
celed the Whitefish contract
in late October, Mr. Ramos
called on the American Public
Power Association and Edi-
son Electric Institute for
help. Utility experts say that
post-hurricane protocol is to
go first to these industry
groups, which organize “mu-
tual assistance” from other
utility companies. Mr. Ros-
selló has said “Prepa did not
go that route . . . because
they had timing issues and
money issues.”
Don’t misunderstand. The
Hollywood episodes are more
about power than carnal at-
traction, though sex is the ob-
jective for sure. The power im-
balance in the film business is
enormous. It’s mostly men
pulling the strings, deciding
which supplicants get roles,
script assignments and other
high-demand jobs.
Add to that this: Some men
are cracked. They weren’t
raised by actual wolves but
something definitely went hay-
wire somewhere. They see fe-
males as prey, not just pretties.
This is reality and everyone in-
volved should be aware.
When my granddaughter,
Michelle, started high school, I
could see the boys were gaga
over her. To put her on her
guard I explained how things
work.
“Mishie,” I said. “You know
how babies get excited if you
jangle a bunch of keys in front
of their faces? They laugh,
wave their arms and legs, and
act like they want to jump out
What cannot be disputed is
that indexing’s success has up-
ended the status quo. The ef-
fect will grow as regulatory re-
gimes around the world
require the kind of consumer-
friendly price transparency
that benefits index products.
To be sure, there are still
questions to address. For ex-
ample, investors need to bet-
ter understand the difference
between plain-vanilla ETFs
and highly leveraged exchange
traded notes, or ETNs, which
have more volatile prices. But
while debate is healthy, it
needs to be based on facts
rather than fear. There is a big
difference between disrup-
tions to the way traditional
asset managers do business,
which certainly are occurring,
and disruptions to the basic
functioning of capital markets,
which are not.
Far from undermining the
markets, indexing has un-
leashed new competition,
driven innovation and identi-
fied new ways to deliver prof-
its. Even active managers are
using more ETFs, while every-
day investors are saving more.
The rise of indexing has
changed for the better the
way all investors seek returns,
manage risk and build portfo-
lios. That’s a development ev-
eryone should welcome.
Ms. Novick is a co-founder
and vice chairman of Black-
Rock, a global leader in asset
management.
Yet mutual assistance is all
about emergency response
and the company could have
solved its money problems by
accepting the financing offer
from Prepa bondholders.
Then again Mr. Ramos was
a political hire and may have
lacked the necessary utility
experience to handle the cri-
sis. And Mr. Rosselló almost
certainly didn’t want to give
creditors—whom the Promesa
board has already sidelined—
new leverage over an institu-
tion that, according to Puerto
Rican tradition, is part of his
fiefdom.
Now Mr. Rosselló is asking
for $94 billion in aid from
Washington for reconstruc-
tion costs. But he’s refused to
implement furloughs and
pension cuts mandated by the
Promesa board. In August the
board sued him for that. The
matter was dropped after
Maria hit and so was the
broader board-certified fiscal
plan requiring Puerto Rico to
tighten its belt.
He then fought the board
in court to stop it from ap-
pointing retired Air Force
Col. Noel Zamot as “chief
transformation officer” to
run Prepa. Bondholders also
objected to Mr. Zamot, citing
a lack of utility experience.
But Mr. Rosselló’s reasoning
is that Prepa leadership must
be his call. On Nov. 13 a fed-
eral judge ruled in his favor.
Last week he announced the
bankrupt commonwealth
would pay Christmas bonuses
to its employees.
And so it goes. Mr. Rosselló
liked the Promesa board when
it tore up contracts. But now
he wants it to go away.
Write to O’Grady@wsj.com.
of their little seats. Well, boys
are the same way when they
see a beautiful girl. Don’t take
it personally.”
As a teenage model I had an
assignment for a jewelry photo
shoot. The stylist gave me a
length of satin cloth to wrap
around my chest so I could
bare my shoulders. After the
photographer had taken his
shots he wanted a different an-
gle. He tried to reposition the
satin cloth.
“I can’t let you do that,” I
said.
“You aren’t going to make it
as a model with such a silly at-
titude,” he huffed. He was
right. I wasn’t going to make
it, especially if compromising
my values was the price.
Don’t go to the hotel room
alone. If you can’t take your
mother, take videos.
Ms. DeCarlo formerly cov-
ered culture, travel and enter-
tainment for the Chicago Trib-
une and the Las Vegas Review-
Journal.
Monday, November 27, 2017 | A15
BOOKSHELF | By Michael Barone
An Isolationist
Changes His Mind
Arthur Vandenberg
By Hendrik Meijer
(Chicago, 432 pages, $35)
A
ny old timer’s lament about the dearth of foreign-
policy bipartisanship will surely invoke, sooner or later,
the memory of Arthur Vandenberg—and justifiably so.
During World War II and after, the formerly isolationist
Republican senator provided critical support to the interna-
tionalist policies of Franklin Roosevelt and Harry Truman.
Though he left behind diaries and scrapbooks, there has
been no definitive biography of Vandenberg since his death
in 1951. Now there is one, almost serendipitously. Some 25
years ago, the daughter of a deceased academic historian,
who had published an account of Vandenberg’s life that
stopped at 1945, telephoned the Historical Society of
Michigan and asked if anyone wanted her father’s research
files. She was referred to businessman Hendrik Meijer, who
had recently delivered a lecture on his fellow Grand Rapids
native. Mr. Meijer accepted the papers and, amid his work as
chairman of the family-
owned Meijer super-
market and retail chain,
conducted dozens of
interviews and consulted
multiple archives. The result
is “Arthur Vandenberg: The
Man in the Middle of the
American Century,” an engag-
ing and thorough account of
Vandenberg’s life.
The man Mr. Meijer describes
was a natural politician with a
Horatio Alger beginning. He
started working at age 9, when his
father’s harness-making business foundered
in the depression of 1893. He spent a year at the University of
Michigan, lost one job for playing hooky to see vice-presidential
candidate Theodore Roosevelt in 1900, and snagged another at
the Grand Rapids Herald, soon turning in more copy than any
other reporter. In 1906 the paper’s editor died, and the propri-
etor, soon-to-be Sen. William Alden Smith, named Vandenberg
to replace him. He was five days short of turning 22.
Vandenberg’s prose style—featuring “five-dollar words”
and “overstuffed phrasing”—doesn’t match our modern
tastes, Mr. Meijer concedes. But it made him influential in
Michigan. He wrote two books praising his hero, Alexander
Hamilton, and defended the homespun businessman at the
center of “Babbitt,” Sinclair Lewis’s 1922 satirical novel.
“Without him this would be a sodden land,” he editorialized.
Vandenberg was gearing up to run for the Senate in 1928
and, when the incumbent died, was appointed to fill the
vacancy; he won with 72% in November. With the auto
boom, Michigan was the fastest-growing state east of the
Rockies and north of Florida, and Vandenberg kept his eye
on the new masses of auto workers in Detroit and Flint.
After Michigan’s banks were forced to close in February
1933, he was the prime sponsor of federal deposit insurance
and, with the help of Vice President John Nance Garner,
overcame Franklin Roosevelt’s opposition to the measure.
Vandenberg was the only Republican senator from a large
industrial state re-elected in the Democratic year of 1934.
Having opposed Lend-Lease and supported
neutrality, a prominent Republican senator
decided to back FDR and internationalism.
Mr. Meijer does not sidestep Vandenberg’s peccadilloes. In
the late 1930s he sometimes drank too much, and he had an
affair with the wife of a British diplomat. He was an active
member of the Nye Committee that blamed World War I on
munitions makers, a vocal supporter of the 1937 Neutrality
Act, and an opponent of increased defense spending. After a
failed stab at the 1940 Republican presidential nomination,
he was the “generalissimo” of the opposition to Roosevelt’s
Lend-Lease aid to Britain. But as war continued to rage, this
instinctive politician concluded that “prudence lies
somewhere in between” isolationism and interventionism.
He voted for Roosevelt’s huge increases in defense
spending and backed him solidly after Pearl Harbor, although,
as he wrote in his diary, “even in the Senate we can’t find out
what’s going on.” He bristled at Roosevelt’s 1943 plan to
deliver relief aid to liberated areas in Europe without
congressional approval, then supported an authorizing joint
resolution. He persuaded Republican officials, gathered at
their summer 1943 Mackinac Island confab, to back “responsi-
ble participation . . . in [a] postwar cooperative organization
among sovereign nations” and in 1944 started working out
plans for one with Secretary of State Cordell Hull.
In January 1945, in a much-noted Senate speech,
Vandenberg said that, when it came to international
security, no nation “can immunize itself by its own
exclusive action.” The isolationist had become an
internationalist. Roosevelt had seen how Woodrow Wilson’s
failure to include Republicans had resulted in the Versailles
Treaty’s falling short of Senate ratification. So he appointed
Vandenberg, the man in the middle, to the group tasked
with drafting the United Nations charter in San Francisco.
Vandenberg shrewdly held in reserve but never exercised
his prerogative of disagreeing with the administration and
repeatedly used the threat of Senate disapproval to bring
the Soviet delegation into line. The charter passed the
Senate 89-2 in July 1945. He mistrusted the Communists,
warning of an “iron curtain” five months before Churchill
used the phrase. In February 1947, now chairman of the For-
eign Relations Committee, he was summoned to a meeting
with Truman. Britain was pulling out of Greece; Truman
wanted to protect it and Turkey from Soviet takeover. “If
you will say that to the Congress and the country,” Vanden-
berg asserted, “I will support you and I believe most of its
members will do the same.”
He did and they did, but it wasn’t always simple.
Vandenberg maneuvered and added his own touches to the
Truman Doctrine, the Marshall Plan and NATO. As Mr. Meijer
writes: “The line between advice and consent and making
policy grew blurred.” Truman’s 1948 victory brought back
Democratic majorities and “an end to Vandenberg’s aura of
indispensability.” His health deteriorated in October 1950, and
he died six months later. But by then America’s bipartisan Cold
War policy was solidly in place and would last for decades. As
Mr. Meijer’s first-rate chronicle shows, Vandenberg was very
much, in Dean Acheson’s phrase, “present at the creation.”
Mr. Barone is senior political analyst at the Washington
Examiner, resident fellow at the American Enterprise
Institute and author of “Our Country: The Shaping of
America From Roosevelt to Reagan.”
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A16 | Monday, November 27, 2017 THE WALL STREET JOURNAL.

OPINION
REVIEW & OUTLOOK LETTERS TO THE EDITOR

Tax Reform, Growth and the Deficit Not Much Light at End of Afghanistan Tunnel

T
he Senate may vote as soon as this week three to five years and then settle at 2.5%. The Hy Rothstein and John Arquilla It’s the only approach to Afghanistan
on tax reform, and the outcome hangs Tax Foundation predicts the Senate plan will make the point that’s been proven that has not been tried and failed.
time and again about Afghanistan, BOB BRONSON
on a few GOP holdouts. Two worries of produce more than $1 trillion in revenue, in part
that foreign occupiers face a quagmire Aurora, Ill.
the fence-sitters are how thanks to an investment cata- in an almost ungovernable country
much the reform will improve A U.S. growth rate of lyst from immediate capital ex- (“Trump’s Afghan Policy Goes The State Department is responsi-
the economy and whether it 1.9% will never balance pensing in the first year. Wrong,” op-ed, Nov. 17). President ble for America’s policy implementa-
will add to the federal deficit. The left ignores all this and Obama desperately wanted to pull all tion in Afghanistan, and it does a bad
Let’s examine these concerns the federal budget. flogs as unrefutable whatever forces out of Iraq and Afghanistan, job. The reasons are manifest: lack of
against the budget math and emerges from the Joint Com- but he was trapped by his oft-re- focus, lack of engagement, lack of con-
economic evidence. mittee on Taxation. But Joint peated campaign statement that Af- sistency, lack of talent.
i i i Tax assumes the U.S. is a partially “closed” ghanistan was the “smart war.” When I was in Afghanistan helping
Start with the fact that the GOP budget out- economy with little access to global markets. Forced into a corner, Mr. Obama had to train its police, the biggest regional
line allows for a net tax cut of $1.5 trillion over Its models assume that higher deficits will no choice but to agree with the Penta- challenges were lack of central Afghan
gon’s plan for a major surge, but he government control, local chaos cre-
a decade on a statically scored basis thanks to “crowd out” private borrowing and thus drive
gave the generals fewer troops than ated by the Taliban (supported by Pak-
a deal brokered by Senators Pat Toomey and Bob up interest rates and offset the growth impact they asked for and told the world (and istan), Afghan government corruption
Corker. Democrats and their media chorus are of the tax cut. Yet a major goal of the tax re- the enemy) the exact time we would and the State Department’s inability to
using that number to claim that reform will bust form is make the U.S. more competitive as a leave the country. This seemingly implement its policies.
the budget and add to the federal debt. This destination for foreign capital, and interest laughable strategy appeased Mr. Integrating a network of highways,
comes with ill grace from people who cheered rates in a global capital market will be deter- Obama’s hard-left base at home, while railroads, power grids and local gov-
Barack Obama’s doubling of the national debt in mined by far more than a modest increase in appearing to keep his campaign prom- ernments, combined with consistent
eight years, but it’s also overwrought. the U.S. budget deficit. ise on the “smart war.” management of provinces by the cen-
The actual budget hole is smaller than $1.5 Another false charge from the left is that the The authors propose forgetting tral Afghan government, are crucial to
trillion because the GOP budget is scored on a GOP bills are merely a tax cut without any re- about trying to align with the govern- long-term progress if the Defense De-
“current law” baseline. This assumes that tax form. But the bills eliminate trillions of dollars ment in Kabul. This has never been partment, with our allies, can suppress
successful for anyone, as the former insurgency. The State Department has
breaks that are “current policy” will expire and in loopholes, such as the state and local tax de- Soviet Union and presidents of both to lead the support we provide, in
more revenue will flow to Treasury. This is duction. The House bill caps the mortgage-inter- U.S. political parties have discovered. partnership with the DOD. There is no
worth more than $400 billion over 10 years, est deduction at $500,000. Their suggestion to forget Kabul and local solution in Afghanistan.
which means the budget “hole” is closer to $1 Also on the chopping block are business concentrate on creating relationships BOB ROSENKRANZ
trillion out of the $43 trillion the Congressional carve-outs—including cuts in the deductibility with local institutions makes sense. Richmond, Va.
Budget Office projects in revenues over the next of interest—that are used to pay for lower busi-
decade. In other words, this is a modest net tax ness tax rates. We’d like to see every loophole
cut even assuming no additional economic eliminated, but this really is the most far-reach-
growth. ing business-tax reform since 1986. Senate’s Take on Tax: Best to Reduce Gaming
CBO’s estimates are inherently speculative One fair objection is that the true deficit im-
The editorial “Reducing Corporate The Senate’s approach to closing
because no one knows when the next recession pact is partially hidden because the Senate’s in-
Tax Games” (Nov. 20) rightly recog- this loophole is indeed the better
might hit or what some future Congress might dividual tax cuts expire after 2025, though ev- nizes the importance of dealing with one than that approved by the
do. But CBO has typically underestimated the eryone assumes Congress would extend them. base erosion in tax reform. The cur- House, whose weak provisions un-
growth and revenue feedback from tax cuts. A This fudge is driven by the Senate’s mistake in rent tax code is full of loopholes that dermined its own professed goal to
classic example is the 2003 cut in the tax rate on doubling to $2,000 the child tax credit, which allow foreign-based companies oper- stop inversions. The Senate approach
capital gains. Dan Clifton of Strategas Research does nothing for growth and is thus a dead- ating in the U.S. to avoid paying taxes should carry the day. Base erosion is
notes that in January 2004, eight months after weight revenue loss to Treasury. here on their U.S.-generated business. a very real problem, particularly in
the tax cut passed, CBO predicted $215 billion This is a sellout to Senators Marco Rubio and Meanwhile, U.S.-based companies are the insurance industry. Comprehen-
in capital-gains revenue through 2007. The ac- Mike Lee, as well as to the income distribution competing for the same business but sive tax reform is the right place to
tual figure? $377 billion. CBO underestimated tables and the class-war left—not that it is mut- paying full freight. deal with it.
economic growth and how much investors would ing the critics. If the budget hawks want to re- This unequal tax treatment creates WILLIAM R. BERKLEY
winners and losers and gives compa- On behalf of the Coalition for
cash in their gains. duce reform’s deficit impact, the child tax
nies that invert to low or no tax juris- American Insurance
CBO’s roughly $43 trillion revenue estimate credit’s size and income phaseout of $500,000 dictions (tax havens) a very real and Miami
also depends on a projection of average eco- should be their targets. significant competitive advantage in
nomic growth of 1.9% a year. But the U.S. econ- i i i the marketplace. From the perspective
omy has never grown that slowly for so long. The question Senators need to ask them- of U.S.-based insurers, this is a real Coins Are Right Half the
CBO says that every 0.1% increase in GDP adds selves in the end is whether this reform, all problem. Foreign-based insurers are
about $270 billion in revenue over 10 years. That things considered, is a net benefit for the coun- currently allowed to strip profits gen-
Time, Beating Economists
means a mere four years at 3% growth—the U.S. try. We think it is—not least because it is a vote erated in the U.S. to overseas affili- In your editorial “A Nafta Reces-
historical norm—could fill a $1 trillion hole. An of confidence that better policies can restore ates and avoid paying any taxes on sion?” (Nov. 13), you cite a survey
average growth rate of even 2.4% over the de- America’s traditional economic vigor. Democrats that income. That’s a glaring loophole of economists in which “82% said
and their media friends have given up on that that has cost U.S.-taxpayers nearly $9 the economy would grow more
cade would more than fill the hole.
billion over a decade. slowly for the next two years than
Nearby we reprint a letter from some of the score, concluding that we are doomed to “secu- it would otherwise, and 7% pre-
country’s most distinguished economists mak- lar stagnation” and that our politics must de- dicted a recession.” The Organiza-
ing the case that the House and Senate reforms volve into a brawl to divide up the spoils of what- Bob Menendez Trial Defines tion for Economic Cooperation and
will significantly raise U.S. growth potential. The ever meager growth we can muster. Development and Citigroup have
biggest boost comes from the reductions in the That is not the country we have known and Down Constituent Service published data on the inaccuracy of
tax burden on capital, which should increase in- it is an America that would be much diminished Concerning your editorial “The economists’ predictions. Tim Hart-
vestment and thus growth. and harsher. Republicans need to decide if they Menendez Mistrial” (Nov. 18): What ford in the Financial Times reports
One of the signers, Larry Lindsey, predicted still believe America can prosper again, or if it in less brazen times would effectively Prakash Lougani, an economist with
in our pages this fall that economic growth un- is doomed to the slow growth and stagnant be viewed as felony bribery—a sena- the IMF, wrote in 2001: “The record
der the GOP plan would accelerate to 3.2% for wages of the last 11 years. tor “helping” a longtime “friend” in of failure to predict recessions is
return for political donations, opulent virtually unblemished” (throughout
vacations, free trips and other life- 1990s). Mr. Hartford reports that

Patents and Property at the Supremes style goodies—has now been defined
down as constituent service.
Mr. Lougani and a colleague, Hites
Ahir, in 2014 continued to report

C
You can hear the laughter echoing the dismal predictive results of
an government bureaucrats vitiate pri- Panels also use a “preponderance of the evi- throughout Tammany Hall: honest economists internationally. Since
vate property rights without a jury trial dence” to invalidate patents rather than the more graft, now with the imprimatur of the only 7% of economists predict re-
and fair compensation? That’s the ques- rigorous “clear and convincing” standard applied courts. cession this may be the more likely
tion the Supreme Court will by federal courts in civil law- The problem isn’t how constituent event. Once 82% predict a reces-
consider on Monday in what The Justices will decide suits. Patent owners can be service, corruption, bribery and quid sion, it has either already happened
could become a landmark pat- pro quo are defined. The problem is or it won’t.
ent case, Oil States Energy v.
if Congress can let the subject to double or quadruple
jeopardy since inter partes re- the inexorable economic largess of MICHAEL P. CARTER
executive revoke patents. view doesn’t limit the number government. The more regulatory and Savannah, Ga.
Greene’s Energy.
economic control government exerts
At issue is the inter partes of challenges. One panel deci- over its citizens’ lives, the more the
review that Congress estab- sion isn’t binding on another Salomon Melgens and Bob Menen- Saudi Arabia Should Allow
lished with the 2011 America Invents Act to panel. The Federal Circuit Court of Appeals, dezes of the world will engage in self-
curb abusive patent litigation. Owners of low- which hears patent cases, has even ruled that in- interested crony politics.
The Freedom of Religion
quality patents—e.g., abstract ideas or pro- ter partes review panels can invalidate patents Perhaps a less influential govern- Regarding Karen Elliott House’s
cesses with broad applicability—extort busi- upheld by federal courts and juries. ment one-half or one-third its current “The Strategy Behind the Saudi
nesses with infringement lawsuits that are The Patent and Trademark Office director size might do a far better job for the Strife” (op-ed, Nov. 7): I have a rel-
often cheaper to settle than fight. This can de- also wields enormous discretion. When unsatis- people it professes to represent. ative who has worked as a teacher
ter innovation. Inter partes review allows any- fied with results of a review, Obama PTO direc- WILLIAM A. MATTHEWS in Saudi Arabia for over 20 years.
Boston In all of that time, he hasn’t been
one to challenge a patent at any time. The Pat- tor Michelle Lee granted rehearings and added
allowed to practice his faith. The
ent Trial and Appeal Board, composed of judges. In other words, she stacked the adminis- same is true of others whose faith
administrative judges appointed by the Com- trative courts. Kill, Don’t Try to Reform, differs from that of the Sunni ma-
merce Secretary, then decides whether to grant Oil States is before the High Court because jority, including the Shiite minority,
a review and perhaps revoke a patent. the Federal Circuit broke with 200 years of judi- The Unaccountable CFPB though in a less rigorous way.
Oil States lost an inter partes review chal- cial precedent in 2015 by declaring that patents Dennis Shaul makes it abundantly Saudi Arabia will have to become
lenge after suing Greene Energy for infringe- are public rights—that is, executive privileges— clear that the Consumer Financial a more tolerant society if it is ever
ment. The company then claimed that inter and thus not entitled to Article III or Seventh Protection Bureau is primarily an un- to join the community of progres-
partes review violates the Constitution’s Article Amendment protections. Large tech companies accountable, overstaffed, overpaid sive nations. Ms. House cites, among
III and the Seventh Amendment because it al- have supported this radical legal departure to bureaucracy undertaking procedures other changes, the newfound
lows an administrative agency to revoke patents salvage inter partes review. duplicative of other financial regula- (though limited) freedom for women
tors, politically biased and funded in and the presence of restive young
without a jury trial. Article III sets the qualifica- In its landmark McCormick decision (1898),
a way to avoid congressional over- men. Freedom of religion must ac-
tions for the federal judiciary—that is, judges the Supreme Court asserted that “upon the issue sight (“What Went Wrong With the company any other change that the
are appointed by the President with the consent of [a] patent, the patent office . . . los[es] juris- CFPB,” op-ed, Nov. 20). present autocratic and theocratic
of the Senate. They also have lifetime tenure. diction over it.” The Court has consistently reaf- So why is the Trump administra- rulers are planning to allow.
The Seventh Amendment guarantees a jury trial firmed that patents are private property rights, tion going to appoint a new director PETER O’REILLY
in suits involving common law such as private as recently as 2015 when Chief Justice John Rob- to the CFPB, an agency the Republi- Redondo Beach, Calif.
property, contracts and trademarks. erts wrote in Horne v. Dept. of Agriculture that cans never wanted and that was cre-
Congress has increasingly ceded authority to a patent “confers upon the patentee an exclusive ated after the financial crisis when
administrative bodies over disputes involving property in the patented invention which cannot President Obama and the Democrats Pepper ...
public rights—those between the government be appropriated or used by the government it- were in full control?
If the party of low taxes and lim-
And Salt
and individuals that don’t have a basis in common self, without just compensation.”
ited government wants to maintain THE WALL STREET JOURNAL
law. But private rights are strictly the domain of Patents encourage innovation by protecting
that reputation, it seems that closing
the federal judiciary. This distinction is crucial the fruits of entrepreneurs’ labor, and that pro- the CFPB would be a good place to
since Article III judges are intentionally insulated tection is undermined if patents can be revoked start. The voters are still waiting for
from politics and the two political branches. at any time by an administrative agency. While the swamp to be drained. A year after
Imagine if an Administration official could ad- abusive litigation can sap innovation, inter the Republicans took control of the
judicate a fraud case between Jeff Bezos and partes review offers the potential for legal and White House and Congress, it looks
Ivanka Trump. A similar potential for executive government abuses. like the swamp is alive and well.
abuse and political interference exists with the The Supreme Court in May curbed forum ELLEN SANDLES
Patent Trial and Appeal Board, which lacks the shopping in patent infringement cases, and New York
due process and separation-of-powers protec- Congress can create other patent-troll deter-
tions enshrined in Article III. Administrative rents such as requiring more rigorous training Letters intended for publication should
judges are essentially political appointees with for examiners who issue patents. Lawmakers be addressed to: The Editor, 1211 Avenue
of the Americas, New York, NY 10036,
civil service protections. A patent challenger could also establish district patent tribunals or emailed to wsj.ltrs@wsj.com. Please
doesn’t even have to be a party to a case or con- similar to bankruptcy courts within the federal include your city and state. All letters
troversy to present a claim. Hedge-fund investors judiciary. Inter partes review was well-in- are subject to editing, and unpublished
have been known to file petitions to invalidate tended, but any economic benefits aren’t worth letters can be neither acknowledged nor “Any other skills besides
returned.
patents prior to short-selling stocks. the constitutional damage. doing crossword puzzles in ink?”
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
How Tax Reform Will Lift the Economy
Editor’s note: The following is a
Nov. 25 letter to Treasury Secretary
Steven Mnuchin:
D
ear Mr. Secretary:
The present debate
over tax reforms pro-
posed by President
Trump’s administration
and embodied in bills that have
passed the House of Representatives
and the Senate Finance Committee
has raised the basic question of
whether the bills are “pro-growth”:
Would the proposals raise current
and future economic activity and
generate federal tax revenue that
would reduce the “static cost” of the
reforms? This letter explains why we
believe that the answer to these
questions is “yes.”
We believe the Republican
bills could boost GDP
3% to 4% long term by
reducing the cost of capital.
Economists generally think of fun-
damental tax reform as a set of tax
changes that reduces tax distortions
on productive activities (for exam-
ple, business investment and work)
and broadens the tax base to reduce
tax differences among similarly situ-
ated businesses and individuals. Fun-
damental tax reform should also ad-
vance the objectives of fairness and
simplification.
The quest for such fundamental
tax reform has been pursued by pol-
icy makers and economists for de-
cades. Examples include the Tax Re-
form Act of 1986, proposals for
reducing the double taxation of cor-
porate equity by the Treasury De-
partment and the American Law In-
stitute (enacted in part in 2003), the
“Growth and Investment Plan” from
President George W. Bush’s Advisory
Panel on Federal Tax Reform, and ar-
guments from President Obama’s ad-
ministration to lower corporate tax
rates. The proposals emerging from
the House, Senate, and President
Trump’s administration, fall squarely
within this tradition.
Reducing Corporate Tax Rates, as
Proposed, Will Increase Economic
Activity
While the overall House and Sen-
ate tax plans contain numerous
household and business provisions,
we focus on the corporate tax
changes, returning to other provisions
Immigrants Need Better Protection—From Their Lawyers
By Benjamin Edwards
W
alls and travel bans get
most of the attention, but
there is another serious im-
migration problem that few talk
about: incompetent and predatory
immigration lawyers. Such attorneys
do enormous harm to immigrants,
courts and the federal fisc. This com-
plex problem won’t go away over-
night, but the Trump administration
can limit the damage.
As a group, the private immigra-
tion bar now contains the worst law-
yers in all of law. A 2011 survey of
federal judges by Richard Posner and
Albert Yoon found that, of all prac-
tice areas appearing in federal
courts, immigration lawyers pro-
vided the lowest-quality representa-
tion. In another 2011 survey, 31 im-
migration judges in New York
classified nearly half of the attor-
neys appearing before them as ei-
ther inadequate or grossly inade-
quate. A 2015 study found that
immigrants would be better off with-
out an attorney than entrusting their
fate to the bottom 10% of immigra-
tion lawyers.
Not all immigration lawyers are
atrocious. Pro bono lawyers—who
handle less than 10% of cases—win
about 90% of the asylum claims they
file. Law school clinics also deliver ex-
cellent results for their clients. The
private immigration bar contains
many fine lawyers, but there are far
too many scoundrels. Clients struggle
PUBLISHED SINCE 1889 BY DOW JONES & COMPANY
Rupert Murdoch
Executive Chairman, News Corp
Gerard Baker
Editor in Chief
Matthew J. Murray
Deputy Editor in Chief
DEPUTY MANAGING EDITORS:
Michael W. Miller, Senior Deputy;
Thorold Barker, Europe; Paul Beckett,
Washington; Andrew Dowell, Asia;
Christine Glancey, Operations;
Jennifer J. Hicks, Digital;
Neal Lipschutz, Standards; Alex Martin, News;
Shazna Nessa, Visuals; Ann Podd, Initiatives;
Matthew Rose, Enterprise;
Stephen Wisnefski, Professional News
Paul A. Gigot, Editor of the Editorial Page;
Daniel Henninger, Deputy Editor, Editorial Page
WALL STREET JOURNAL MANAGEMENT:
Suzi Watford, Marketing and Circulation;
Joseph B. Vincent, Operations;
Larry L. Hoffman, Production
EDITORIAL AND CORPORATE HEADQUARTERS:
1211 Avenue of the Americas, New York, N.Y., 10036
Telephone 1-800-DOWJONES
before concluding. A key concept in
this context is the “user cost of capi-
tal,” which essentially measures the
expected cost to firms of making ad-
ditional investments in equipment. A
considerable body of economic re-
search concludes that reductions in
the user cost of capital raise output
in the short and long run. Several of
the proposals that have emerged in
the current debate are key to lower-
ing the user cost of capital. For ex-
ample, expensing, which allows
firms to deduct the full cost of in-
vestment at the time it is made, low-
ers the user cost of capital relative
to depreciation over time. A lower
corporate tax rate also lowers the
user cost of capital, which not only
induces U.S. firms to invest more,
but also makes it more attractive for
both U.S. and foreign multinational
corporations to locate investment in
the United States.
There is some uncertainty about
just how much additional investment
is induced by reductions in the cost
of capital, but based on an extensive
body of scholarly research, many
economists believe that a 10% reduc-
tion in the cost of capital would lead
to a 10% increase in the amount of
investment. Simultaneously reducing
the corporate tax rate to 20% and
moving to immediate expensing of
equipment and intangible invest-
ment would reduce the user cost by
an average of 15%, which would in-
crease the demand for capital by
15%. A conventional approach to eco-
nomic modeling suggests that such
an increase in the capital stock
would raise the level of GDP in the
long run by just over 4%. If achieved
over a decade, the associated in-
crease in the annual rate of GDP
growth would be about 0.4% per
year. Because the House and Senate
bills contemplate expensing only for
five years, the increase in capital ac-
cumulation would be less, and the
gain in the long-run level of GDP
would be just over 3%, or 0.3% per
year for a decade.
Is this estimate of the growth ef-
fect realistic? According to one lead-
ing model using an alternative frame-
work, the proposal would increase
the U.S. capital stock by between 12%
and 19%, which would raise the level
of GDP in the long run by between 3%
and 5%. Yet another model, this one
used in the analysis of the “Growth
and Investment Plan” in the 2005
President’s Advisory Panel on Federal
Tax Reform, found that a business
cash-flow tax with expensing and a
corporate tax rate of 30% would yield
to find and afford lawyers who do
honest and decent work.
Bad lawyers generate real costs—
and not only for their clients. A preda-
tory attorney might take an immi-
grant’s money and file baseless
asylum claims. These meritless claims
clog judicial dockets and increase de-
tention times for immigrants with le-
gitimate cases. And the costs quickly
add up: The federal government
spends about $158 a day to detain
someone, according to a 2014 Govern-
ment Accountability Office report.
The blame for America’s inade-
quate immigration bar does not lie
with vulnerable immigrant commu-
nities. No rational immigrant would
knowingly shell out $10,000 for an
asylum claim destined for failure.
Rather, immigrants make the com-
mon mistake of assuming that a
valid law license means that a lawyer
will do a decent job.
The free market has failed to
weed out the worst immigration law-
yers for a variety of reasons. For
one, immigrants often do not under-
stand complex administrative court
processes or the details of immigra-
tion law, forcing them to turn to cor-
rupt counselors. Community reputa-
tion provides only an imperfect
guide. Predatory immigration law-
yers sometimes enjoy good reputa-
tions in the community because the
U.S. deports their victims. When only
winners remain, immigrants never
hear about the lost cases. State bars
also struggle to police this behavior.
Robert Thomson
Chief Executive Officer, News Corp
William Lewis
Chief Executive Officer and Publisher
DOW JONES MANAGEMENT:
Mark Musgrave, Chief People Officer;
Edward Roussel, Innovation & Communications;
Anna Sedgley, Chief Operating Officer & CFO;
Katie Vanneck-Smith, President
OPERATING EXECUTIVES:
Ramin Beheshti, Product & Technology;
Jason P. Conti, General Counsel;
Frank Filippo, Print Products & Services;
Steve Grycuk, Customer Service;
Kristin Heitmann, Transformation;
Nancy McNeill, Advertising & Corporate Sales;
Jonathan Wright, International
DJ Media Group:
Almar Latour, Publisher;
Kenneth Breen, Commercial
Professional Information Business:
Christopher Lloyd, Head;
Ingrid Verschuren, Deputy Head
OPINION
a 20.4% increase in the capital stock
in the long run and a 4.8% increase in
GDP in the long run. More conserva-
tive estimates from the OECD suggest
that corporate tax changes alone
would raise long-run GDP by 2%. In
short, there is a substantial body of
research suggesting that fundamental
tax reform of the type being pro-
posed would have an important effect
on long-run GDP. We view long-run
effects of about 3% assuming five
years of full expensing, and 4% as-
suming permanent full expensing, as
reasonable estimates.
Another advantage of the corpo-
rate rate reduction embodied in the
House and Senate Finance bills is
that it would lead both U.S. and for-
eign firms to invest more in the
United States. In addition, U.S. multi-
national firms would face a reduced
incentive to shift profits abroad,
which would raise federal revenue,
all else equal.
In the foregoing analysis, we as-
sumed a revenue-neutral corporate
tax change. Deficit financing of part
of a reduction in taxes increases fed-
eral debt and interest rates, all else
equal. For the House and Senate Fi-
nance bills, this offset is likely to be
modest, given that the United States
operates in an international capital
market, which means that the impact
of changes in interest rates resulting
from greater investment demand and
government borrowing are likely to
be relatively small.
Lowering Individual Tax Rates
Also Offers Generally Positive Eco-
nomic Effects
The House and Senate bills also
contemplate a number of individual
tax provisions that can affect eco-
nomic activity and incomes. In recog-
nition of the fact that non-corporate
It’s difficult to file a bar complaint
after you’ve been deported.
The best solution—a right to im-
migration counsel similar to the
right to a criminal defense lawyer—
This area of law is prone
to abuse. It’s difficult to
file a bar complaint after
you’ve been deported.
probably can’t garner enough sup-
port on Capitol Hill. Lawyers orga-
nized and funded like public
defenders would be better positioned
to police their own ranks. But this
does not mean that Congress and the
Trump administration should keep
ignoring the problem.
In a forthcoming article in the
Washington and Lee Law Review, I
argue that requiring disclosure of
If GPS Failed, We’d Be More Than Lost
By A.P.D.G. Everett
And Alex Berezow
N
orth Korea and Russia pose
increasingly serious geopolit-
ical threats to the U.S. and
its allies. While these rogue nations
possess nuclear weapons and formi-
dable conventional forces, they
have also used unconventional
methods like hacking to attack gov-
ernment institutions and private
companies. Add another target to
the list of concerns: the Global Po-
sitioning System.
Built primarily for the U.S. mili-
tary, GPS is now used by civilians
across the globe. Smartphones, per-
sonal navigation units, and air-traf-
fic control all rely on it. They’re part
of modern life, constantly perform-
ing trivial and critical functions all
over the country. Fifteen of the “18
Critical Infrastructure and Key Re-
source sectors” in the U.S. are GPS-
reliant, according to the Department
of Homeland Security.
Temporary, local GPS failures
have already proved chaotic. A truck
driver in New Jersey used an illegal
but easily acquired GPS jammer to
prevent his boss from tracking him.
As he drove past Newark Liberty In-
ternational Airport, his jammer
blocked air-traffic control signals.
Monday, November 27, 2017 | A17
ISTOCK/GETTY IMAGES
business income is substantial in
the United States, both bills would
reduce taxation of non-corporate
business income and increase the
amount of capital expensing al-
lowed. While difficult to quantify, as
the bills specify different effective
tax rates, these provisions would in-
crease investment and GDP above
the level associated with the corpo-
rate tax changes discussed above.
Also on the individual side, both the
House and Senate bills reduce mar-
ginal tax rates on labor income for
most taxpayers, increasing the re-
ward for work. Increases in labor
supply, in turn, increase taxable in-
come and tax revenues. One should
note, however, that some taxpayers
would face increases in effective
marginal tax rates because of base-
broadening features of the bills,
such as limits on the federal tax de-
ductibility of state and local income
taxes. On balance, though, we be-
lieve that the individual tax base
broadening embodied in the propos-
als would enhance economic effi-
ciency by confronting most house-
holds with lower marginal tax rates.
In addition, fairness would be
served by reducing differences in
the tax treatment of individuals
with similar incomes, and simplifi-
cation by reducing the number of
individuals who itemize for federal
tax purposes.
Confirming a Pro-Growth Objec-
tive Is Important for the Path For-
ward
You have consistently stressed
that the objective of tax reform
should be to enhance prospects for
increased economic growth and
household incomes. We agree with
this objective, which is consistent
with the traditional norms of public
immigration lawyers’ track records
could improve the market for repre-
sentation. It almost certainly would
drive some of the worst out of busi-
ness. Who wouldn’t shop around af-
ter discovering a lawyer ranked in
the bottom 10% by client outcomes?
Although no lawyer should be ex-
pected to win them all, immigrants
should get nervous if their lawyer al-
ways loses.
When immigrants lack a way to
differentiate between the shoddy
and the skillful, the worst lawyers
keep collecting cases and fees. This
also means that the best immigra-
tion lawyers may struggle to make a
living because their corner-cutting
competitors depress the price of ser-
vices. That’s part of why many tal-
ented practitioners choose to aban-
don immigration law. This has led to
a shortage of representation. One
2015 study found that only 37% of
people in removal proceedings have
lawyers.
No one was injured, but someone
setting out to do deliberate harm
could pose a security risk in the
future.
As troublesome as a minor threat
is, what if GPS as a whole were at-
tacked? The detonation of a nuclear
device high in the atmosphere—and
the creation of an electromagnetic
pulse, or EMP, that would follow—
present the most likely threat to
the satellites that underpin the sys-
tem. In September 1962, a nuclear
test conducted by the U.S. acciden-
tally destroyed a British satellite
and streetlights in Hawaii, demon-
strating the potential devastation of
an EMP.
Anything that requires precise
timing would be affected because
GPS satellites serve as global time-
keepers. The loss of clock synchroni-
zation across the world would cause
the internet to stall and financial
transactions to cease. Our ability to
monitor and forecast the weather
would be hobbled, too.
Even if America’s adversaries are
not capable of pulling off such a
feat, Mother Nature certainly is. In
1859, a ferocious solar storm known
as the Carrington Event shot
charged particles from the sun to-
ward Earth. If it were to happen
again today, experts believe that
finance going back to Adam Smith.
We believe that the reforms embod-
ied in the House and Senate Finance
bills would achieve this objective.
The increased growth, in turn,
would lead to greater taxable in-
come and federal tax revenues,
which would reduce the static cost
of lost federal tax revenue from the
reform.
We hope these analytical points of
support for the growth effects of tax
plans being discussed are useful to
you and to the Congress as you com-
plete the important economic task of
fundamental tax reform. We would
be happy to discuss our conclusions
with you at your convenience.
Robert J. Barro, Paul M. Warburg
Professor of Economics, Harvard
University
Michael J. Boskin, Tully M. Fried-
man Professor of Economics, Stan-
ford University; Chairman of the
Council of Economic Advisers under
President George H.W. Bush
John Cogan, Leonard and Shirley
Ely Senior Fellow, Hoover Institu-
tion, Stanford University; Deputy Di-
rector of the Office of Management
and Budget under President Ronald
Reagan
Douglas Holtz-Eakin, President,
American Action Forum, former di-
rector of the Congressional Budget
Office
Glenn Hubbard, Dean and Russell
L. Carson Professor of Finance and
Economics (Graduate School of Busi-
ness) and Professor of Economics
(Arts and Sciences), Columbia Uni-
versity; Chairman of the Council of
Economic Advisers under President
George W. Bush
Lawrence B. Lindsey, President
and Chief Executive Officer, The
Lindsey Group; Director of the Na-
tional Economic Council under Presi-
dent George W. Bush
Harvey S. Rosen, John L. Wein-
berg Professor of Economics and
Business Policy, Princeton Univer-
sity; Chairman of the Council of Eco-
nomic Advisers under President
George W. Bush
George P. Shultz, Thomas W. and
Susan B. Ford Distinguished Fellow,
Hoover Institution, Stanford Univer-
sity; Secretary of State under Presi-
dent Ronald Reagan; Secretary of the
Treasury under President Richard
Nixon
John. B. Taylor, Mary and Robert
Raymond Professor of Economics,
Stanford University; Undersecretary
of the Treasury for International Af-
fairs under President George W. Bush
The Justice Department already
tracks lawyers practicing in immi-
gration court by number. It should
begin to collect, crunch and disclose
their case outcomes. This would arm
immigrants with the information
they need to select competent coun-
sel. It might also flag the fraudsters
for state bar associations.
Increased disclosure is not a sil-
ver bullet. A world with informed
clients will face different problems
than the current system, and not all
immigrants will be aware of the new
database. Some lawyers would try to
game the system and duck hard
cases to protect their records. It
might make it more difficult for cli-
ents with more challenging claims to
secure representation. But these po-
tential pitfalls aren’t worse than the
status quo so many immigrants al-
ready know.
Mr. Edwards is a law professor at
the University of Nevada, Las Vegas.
satellites all over the world could be
destroyed. NASA warns that they
can’t be protected. The U.S. would
be wise to stockpile communications
satellites to replace the ones the
sun obliterates.
A better option is to build a land-
based navigation system. The good
news is that such a system, known
as Loran, already exists and was
used by the U.S. Coast Guard for
years. But President Obama declared
Loran obsolete in 2009, and Con-
gress pulled funding for it. That was
incredibly shortsighted. Loran is a
great backup system because its sig-
nals would be difficult to jam and it
would be less exposed to celestial
events.
Congress is considering a bill, the
Department of Homeland Security
Authorization Act, that would revive
and enhance Loran into a highly reli-
able, ground-based backup system.
This kind of system will not be com-
pletely impervious to EMPs or solar
storms, but it would be less vulnera-
ble than GPS satellites. In a world
full of threats, it wouldn’t hurt to
have a backup.
Mr. Everett is a systems engineer.
Mr. Berezow is senior fellow at the
American Council on Science and
Health.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A18 | Monday, November 27, 2017 THE WALL STREET JOURNAL.

I CAN OFFER
CUSTOMERS WHAT
THEY WANT
BEFORE THEY
WANT IT.
With Watson, marketers can delight
more customers more often. By using
weather, shared location and
personal data they can predict what
customers want and where they’ll
want it. Find out more at ibm.com/you
This is marketing to the power of IBM.

IBM and its logo, ibm.com and Watson are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. See current list at ibm.com/trademark. Other product and service names might be trademarks of IBM or other companies. ©International Business Machines Corp. 2017.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
BUSINESS & FINANCE
© 2017 Dow Jones & Company. All Rights Reserved.
Last Week: S&P 2602.42 À 0.91%
Meredith in Deal to Buy Time Inc.
Better Homes &
Gardens owner to pay
$1.85 billion for fabled
magazine publisher
BY JEFFREY A. TRACHTENBERG
Meredith Corp., the owner
of Better Homes & Gardens
and Allrecipes, has struck a
deal to buy magazine pub-
lisher Time Inc. for $1.85 bil-
lion in cash, a significant bet
on the future of the magazine
industry as media companies
Dollar
Remains
King Years
After Crisis
BY JON SINDREU AND MIKE BIRD
It is one of the ironies of the
global financial crisis: A decade
later, a panic whose origins
were in the U.S. has left the dol-
lar more important to the rest
of the world than ever before.
Putative contenders for its
throne—the euro, the Chinese
yuan—have failed to gain global
acceptance. It remains the dom-
inant force in world trade. A
slow, yearslong decline in the
proportion of dollars among the
holdings of the world’s central
banks, which were trying to di-
versify, has stopped. And the
commercial banks of Japan,
Germany, France and the U.K.
now have more dollar-denomi-
nated liabilities than those in
their own currencies.
The dollar dominance is test-
ing the world again: Rules de-
signed to make finance safer
have already made dollars
harder to come by. To add to
the pain, the Federal Reserve is
sucking dollars out of the
world’s financial system as it
tries to tighten its monetary
policy.
“‘Our currency, your prob-
lem’—it’s basically like that,”
Please see DOLLAR page B2
Dependence
Global outstanding debt
by currency
$12 trillion
10 Domestic currency*
Offshore dollars
8
Other foreign
6 currencies
4 ciety’s unease
2 siveness of technology.
0 examples taken from the
1967 ’70 ’80 ’90 2000 ’10
*Includes U.S. debt issued in dollars
Source: Bank for International Settlements
THE WALL STREET JOURNAL.
TECHNOLOGY: SPACE TAXI SERVICES STRUGGLE TO MEET NASA SAFETY RULES B4
* * * *
S&P FIN À 0.19% S&P IT À 1.76%
try to find their footing in an
increasingly digital world.
Meredith, based in Des
Moines, Iowa, has agreed to
pay $18.50 a share for Time,
the fabled New York publisher
of Fortune, People and Sports
Illustrated, the companies
said. The boards of both com-
panies have approved the
transaction.
That is a 46% premium to
Time’s closing price on Nov.
15, before reports of Mere-
dith’s renewed interest in a
deal with financial backing
from the billionaire Koch
Members work out at the Life Time Athletic gym in Franklin, Tenn. Health clubs are taking over mall space once held by department stores.
Once Mall Pariahs, Gyms Step Up
BY RACHEL BACHMAN
Todd Mullins and his wife,
Julie, started going to a shop-
ping center 15 minutes from
their Palm Beach Gardens,
Fla., home about a year ago—
after they joined a gym inside
it. They work out at the Or-
angetheory Fitness there three
to four times a week, and at
least half the time they visit a
nearby juice shop, restaurant
or Trader Joe’s, he says.
“There would be no other
KEYWORDS | By Christopher Mims
Laws of Innovation Everyone Should Heed
Three de-
cades ago, a
historian
wrote six laws
to explain so-
with the power and perva-
Though based on historical
Cold War, the laws read as a
cheat sheet for explaining
our era of Facebook, Google,
the iPhone and FOMO, or
THE WALL STREET JOURNAL.
DJ TRANS À 1.45%
brothers. More recently, the
stock closed Friday at $16.90.
Including the assumption of
Time’s debt, the deal is valued
at $2.8 billion.
The deal caps the end of an
era. Time, whose namesake
Time magazine hit the news-
stands in March 1923, emerged
as one of the country’s great
journalistic enterprises, shap-
ing both the political and cul-
tural landscapes. But in recent
years, the magazine publisher
lost ground as a shift among
readers to digital platforms
cut into traditional print reve-
reason to go to that mall,”
says Mr. Mullins, a senior pas-
tor at a local church.
Mall owners long treated
gyms like pool halls, unwanted
tenants that attracted lower-
rent visitors who were un-
likely to shop. Now they’re
giving health clubs some of
their best real estate.
The reason is twofold. Re-
tailers have closed hundreds
of stores across the country
amid increasing competition
from online shopping, leaving
fear of missing out.
You’ve probably never
heard of these principles or
their author, Melvin Kranz-
berg, a professor of the his-
tory of technology at Geor-
gia Institute of Technology
who died in 1995.
What’s a bigger shame is
that most of the innovators
today, who are building the
services and tools that have
upended society, don’t know
them, either.
WSJ $ IDX g 0.78% LIBOR 3M 1.468 NIKKEI 22550.85 À 0.69%
nue and a new generation of
online rivals emerged.
Stephen Lacy, Meredith’s
chairman and chief executive,
said the combined company
will be able to reach almost
200 million consumers across
all platforms, including digital.
“The vision is the absolute
premiere media company in
the country with premium
branded content on every plat-
form,” Mr. Lacy said in an in-
terview. “We’re very excited to
bring these businesses to-
gether.”
Mr. Lacy said the combined
mall owners to grapple with
declining foot traffic and ris-
ing vacancies. At the same
time, fitness centers have
boomed and diversified, and a
proliferation of smaller, bou-
tique gyms that draw higher-
end customers have created
more attractive tenants that
are easier to accommodate.
The result is that health
clubs that were once pariahs
at malls are helping transform
them into hubs of living, work-
ing and playing.
Fortunately, the laws have
been passed down by a small
group of technologists who
say they have profoundly af-
fected their thinking. The
text should serve as a foun-
dation—something like a
Hippocratic oath—for all
people who build things.
1. “Technology is neither
good nor bad; nor is it neu-
tral.”
Prof. Kranzberg’s first law,
Monday, November 27, 2017 | B1
See more at WSJMarkets.com
SoftBank
Readies
company will have more than
10 billion annual video views
and nearly $700 million in dig-
ital advertising revenue. “This
Offer for
is also a digital play for Mere-
dith, one that transforms the
company into a top 10 digital
Uber Stake
media company in the U.S.” BY ELIOT BROWN
Mr. Lacy said he expects AND GREG BENSINGER
the acquisition to close in
about 60 days. As soon as this week, Soft-
Tom Harty, Meredith’s chief Bank Group Corp. is expected
operating officer, said that the to proceed with an offer to
combined properties won’t be buy billions of dollars worth of
entirely dependent on adver- shares from Uber Technolo-
tising thanks to their 60 mil- gies Inc.’s stakeholders.
Please see TIME page B6 First it must settle on an of-
fer price, only days after Uber
disclosed a security breach in-
volving 57 million accounts
that took place a year ago and
prompted regulatory scrutiny
from government agencies
around the world.
Uber’s decision to keep
quiet about last year’s data
breach until early last week
raises the prospect that the in-
cident could affect SoftBank’s
offer price.
SoftBank learned of the
hack about a month ago, which
may have changed its evalua-
tion of Uber’s shares, accord-
JOE BUGLEWICZ FOR THE WALL STREET JOURNAL
ing to people familiar with the
matter.
Some investors and observ-
ers say corporate breaches are
becoming so routine that they
shouldn’t weigh on a com-
pany’s valuation, though Uber’s
string of controversies this
year has given shareholders
reason to question what’s next.
A group of investors led by
SoftBank plans to launch an
effort in the coming days to
buy at least 14% of the ride-
hailing firm from existing
shareholders through the ten-
der offer at a steep discount,
as well as through a direct in-
“Twenty-five years ago, the vestment of at least $1 billion
best real estate was given to at Uber’s prior $68 billion val-
the department stores,” says uation. The investor group in-
Sandeep Mathrani, CEO of Chi- cludes Dragoneer Investment
cago-based property owner Group and General Atlantic.
GGP Inc. “And the department SoftBank has negotiated for
stores sort of prevented you weeks with Uber’s board to
from doing anything but hav- move forward with a deal, while
ing retail shopping. So today, some big investors have pri-
their sort of slow retraction is vately said they would balk if
giving us the opportunity to the valuation is too low. Former
reinvent the wheel.” Chief Executive Travis Kalanick,
Mr. Mathrani says gyms are who holds about 10% of Uber
one element in making regional shares, has indicated he won’t
Please see MALL page B2 Please see UBER page B2
INSIDE
a seemingly mundane obser-
vation, is also his most im-
portant. He realized that the
impact of a technology de-
pends on its geographic and
cultural context, meaning it
is often good and bad at the
same time.
His example was DDT, a
FORD’S
pesticide and probable car- RECALLS PROVE
cinogen that nonetheless
saved the lives of hundreds
A DISTRACTION
of thousands of people in In-
Please see MIMS page B4 AUTOS, B3
LIQUIDITY
SPY RESILIENCY
PERFORMANCE
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B2 | Monday, November 27, 2017 * *** THE WALL STREET JOURNAL.

INDEX TO BUSINESSES BUSINESS & FINANCE

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

A
Alphabet......................B4
Amazon.com...............A1
General Motors...........B3
GGP..............................B1
Green Bridge Growers
P
Panty Drop..................R5
Phillips Edison............B2
OPEC Is Poised to Extend Oil Cuts
Apple...........................B4 .....................................R1 Postmates...................R3 BY GEORGI KANTCHEV tial public offering of the
Asperger Experts........R1 H S
AND SUMMER SAID Rising Price state-owned Saudi Aramco, the
OPEC strategy and geopolitical threats to production in Iran, Iraq and world’s biggest oil-producing
B Highland Capital SafetyTat.....................R2 After years of doing too lit- company. The IPO is the cen-
Management.............B7 Saudi Arabia are driving Brent crude-oil futures prices higher.
Boeing ......................... B4 SmartGlamour ............ R5 tle, OPEC could suddenly be terpiece of a plan to transform
HNA Group..................B7 Societe Generale.........B2 doing too much. Brent crude-oil futures the kingdom’s economy, less-
C
I SoftBank Group..........B1 The Organization of the Pe- $125 a barrel ening its dependence on oil
Cardlytics .................... B2
Intel...........................B10 Space Exploration troleum Exporting Countries’ and developing the world’s
Chewbeads..................R4 Technologies.............B4
Intuit ........................... R3 14 members and other major largest sovereign-wealth fund
Citgo Petroleum ......... A9 100
J
Starbucks....................B2 producers like Russia are to create new industries.
Comme des Garcons...R5 Stuttering King Bakery widely expected But Saudi oil officials say
D Javelin Venture .....................................R1 THE WEEK to strike an they also don’t want to overdo
Partners....................B4 75
Dow Jones...................B7 T AHEAD agreement this it. Saudi Energy Minister Khalid
K week to con- al-Falih told Bloomberg TV this
Dragoneer Investment Takata..........................B3
Group.........................B1 Kickstarter..................R3 tinue withhold- 50 month that the kingdom doesn’t
TaskRabbit .................. R3
E M ing about 2% of global oil sup- want “any spikes in prices that
Time ............................ B1 ply from the market. The shock the market; we don’t
Eight & Sand...............R5 Meredith......................B1 Time Warner...............B6 national energy ministers of 25 want any price movements that
Eloquii ......................... R5 Micron Technology....B10 Trader Joe's ................ B1 about two dozen countries are are not healthy for demand.”
EnerVest....................B10 N U set to meet Thursday at the oil “Our preference is that the
0
EV Energy Partners..B10 cartel’s headquarters in Vienna. market balances gradually,”
Netease.......................B4 Uber Technologies.B1,R3
But OPEC is beset by doubts 2014 ’15 ’16 ’17 Mr. Falih said.
F Niantic.........................B4 UBS Group...................B2
Facebook......................B4 Nvidia........................B10
that renewing its production Source: WSJ Market Data Group THE WALL STREET JOURNAL. Not all OPEC members think
W agreement for another several the extension is a good idea.
Ford Motor..................B3 O Wal-Mart Stores........A1 months will help its members, level since June 2015. The up- delivering.” Most are reeling economically
G Oldphones.com............R7 Walt Disney................B6 say OPEC representatives and ward trend is partly thanks to Overshooting their mark and politically from oil prices
General Atlantic..........B1 Oldphoneworks.com ... R7 Wefunder .................... R2 independent market watchers. OPEC’s production limits but could hurt demand for crude that are still around half of
Some members, along with also to geopolitical threats to around the globe and accelerate their 2014 levels. Higher prices
outside analysts, say that production in Iran, Iraq and a push toward electric vehicles would also lead to members
INDEX TO PEOPLE OPEC could overstimulate the
market and send prices too
Saudi Arabia, and Saudi public
statements suggesting the
and other technologies expected
to cut into oil consumption.
cheating on their production
targets to sell more crude, an-
high next year. That, in turn, kingdom is committed to sup- Higher prices could also in- alysts say.
A H Pilarski, Jan ................ R1 risks depressing demand for porting oil prices. centivize U.S. shale producers Ecuador, for instance, has
Adelstein, Dan............B2 Hackett, Jim ............... B3 Pozsar, Zoltan.............B2 crude. For years, OPEC had fought to ramp up drilling, raising the already all but said it won’t
C Hanke, John................B4 R “There’s actually a chance against a perception that it prospect of a flood of new oil comply with OPEC directives.
Hinrichs, Joe...............B2 Raede, Danny..............R1 the market will overtighten and was no longer relevant to an that could depress the market. OPEC members like Libya and
Chase, Mariah.............R5
prices go close to $70 soon,” oil market shaped by U.S. shale American producers seem al- Nigeria, which aren’t bound to
Chen, Feng .................. B7 J S
said Doug King, chief invest- drillers. The cartel did nothing ready to be taking advantage. production limits because of
Cook, Tim....................B4 Johnson, Brian............B3 Snider, Jeffrey............B2 ment officer of the Merchant when oil prices crashed in After falling for much of the civil strife, have also posed
Crislip, Matt..............B10 T
K Commodity hedge fund, which 2014. Then, when it finally de- past three months, the number problems for the cartel, as
D Tan, Adam...................B7 has $165 million under manage- cided to cut production last of rigs drilling for oil rose by their production rises.
Kalanick, Travis...........B1
Daugherty, Patrick......B7 Terry, Josh .................. B7 ment. “But they are also vulner- year, the desired effect— nine to a total of 747 this past “I’m not sure all of us
L
Dondero, James..........B7 Tidmarsh, Chris .......... R1 able if they don’t extend; that higher prices—took longer week, according to oil-services wanted to be in that deal for
Landon, Stéphane.......B2 will spook the market.” than expected. company Baker Hughes. that long,” said an OPEC dele-
E Tommarello, Nicholas.R2
M U Brent crude, the interna- Today, investors and execu- Saudi Arabia, OPEC’s most gate from a Persian Gulf coun-
Edison, Jeff.................B2
Mathrani, Sandeep.....B1 tional benchmark, is already up tives worry the cartel is over- powerful member, has advo- try where there are lingering
G Upadhyaya, Paresh.....B2
more than one-fifth in the past doing it. cated extending the production doubts about the efficacy of
Mullins, Todd .............. B1 W
Gartner, Steven .......... B2 three months, closing at $63.86 “I’m used to OPEC not do- cuts for an additional nine the production cuts.
Musk, Elon..................B4
Geiger, Angela ............ R1 Wang Jian...................B7 a barrel on Friday. U.S. crude ing enough,” said Rainer Seele, months, through the end of
Greenwald, Lisa..........R4 N-P Welsh, Michele...........R2 oil futures settled 1.6% higher chief executive of oil company 2018. The kingdom needs  Heard on the Street: Russia’s
Griffin, Cary................R1 Neri, Antonio..............A2 Woodbury, Don...........R7 at $58.95, the highest closing OMV AG. “Now they are over- higher prices as it plans an ini- role is pivotal in oil talks... B11

MALL UBER part of those measures, Uber

also set a deadline of 2019 for
an initial public offering.
Uber was obligated to dis-
Continued from the prior page Continued from the prior page close the hack before the ten-
malls as well rounded as down- sell in the tender offer, while der offer was announced be-
town areas were years ago, Benchmark Capital has wa- cause a breach of its size could
with a YMCA and small shops vered on whether it would sell be material to investors, peo-
as well as department stores. some of its 13% stake. Represen- ple familiar with the matter
GGP plans to integrate fitness tatives for both Mr. Kalanick and have said. The disclosure
centers into half of its 115 malls Benchmark had no comment. means all Uber investors and
in the next decade, he says. The Japanese firm hasn’t yet employees are now aware,
Phillips Edison & Company set a price, said a person famil- which could strengthen Soft-
JOE BUGLEWICZ FOR THE WALL STREET JOURNAL

has gyms in 44% of its more iar with the matter, though talks Bank’s hand, observers said.
than 340 grocery-anchored between the SoftBank consor- “This is just going to be
shopping centers, according to tium and Uber investors in re- more leverage for SoftBank,”
CEO Jeff Edison. In the cent weeks centered on a valua- said Anand Sanwal, chief exec-
mid-1990s, the company had tion of around $50 billion. While utive of tech-focused research
just a few centers with gyms a discount is customary in sec- firm CB Insights. If investors
because tenants viewed typical ondary sales, some investors believe there is new potential
gym-goers as teenage weight- have also marked down their for litigation and regulatory
lifters more likely to hang out valuations of the company amid measures, he said, “that is go-
on the curb than to shop, Mr. its executive-suite turmoil in the ing to have an impact on the
Edison says. past year. valuation.”
Westfield Corp. has 33 U.S. SoftBank wants to name the Mitchell Green, founding
malls, many with assets A member lifts weights on the fitness floor at the Life Time Athletic gym in Franklin, Tenn. lowest number possible, while in- partner at Lead Edge Capital,
greater than $1 billion. More vestors and board members are an Uber investor, said breaches
than half of them have some were “on a long list of prohib- dios and bargain chains. thought. More than 40% of pushing for a higher valuation. have become so commonplace
sort of health club, up from ited uses that included mas- Yet overall, fitness has been health-club members reported Too steep of a discount risks re- that consumers are going to
about 10% a decade ago. sage parlors, billiards halls booming. More than 57 million household incomes exceeding pelling would-be sellers and im- keep using the service and the
Many of the new tenants at and pawnshops,” says Steven people belonged to a health $100,000 in 2016, according to periling the tender offer, which core business won’t be affected.
shopping centers are gyms Gartner, managing director of club last year—19.3% of the IHRSA, compared with 26% of lasts 20 business days. SoftBank The breach should have been
and specialty fitness studios retail at CBRE, the commercial U.S. population—and member- the overall population. can try again at a higher price if disclosed, Mr. Green said, but
that in some cases are barely real-estate services and in- ships have jumped 26% since Consumer spending at fit- its initial attempt fails. the executives who oversaw
bigger than a Starbucks store. vestment firm. If gyms were 2009, according to IHRSA. ness centers climbed 3.7% in It is in Uber’s interest to get that decision are now gone, and
But owners of regional malls allowed in malls at all, land- Gyms fit into a broader the third quarter over last year, the deal done. In October, the he said there is wide support
also are welcoming sprawling, lords often relegated them to push by mall owners to rein- according to Atlanta-based board passed a series of corpo- for the new chief executive.
full-service health clubs as an- back corners. vent themselves as centers of spending-data analysis firm rate-structure changes that “That was Uber 1.0,” Mr. Green
chor tenants, sometimes re- The fitness industry brings entertainment at a time when Cardlytics. Spending on ap- only kick in if the SoftBank con- said. Now, “this company is be-
placing the stores that once its own risks. Streaming fitness so much of apparel sales have parel at brick-and-mortar sortium reaches its 14% stake ing run by seasoned manage-
excluded them. services used remotely are on moved online. Landlords are stores rose 0.5%. threshold. The changes include ment,” he said.
GGP is replacing a Macy’s at the rise, and the growth of adding restaurants, ice-skating “We’re like the nice-looking revoking the supervoting rights Uber said no financial infor-
Oklahoma City’s Quail Springs health clubs is outpacing mem- rinks, pools and other recre- girl at the dance. Everybody of early investors, which mation was obtained in the
Mall with a 180,000-square- bership, according to the Inter- ational options to boost sag- wants to dance with us these granted them multiple votes breach and it has found no evi-
foot Life Time health club with national Health, Racquet & ging foot traffic. days,” says Dan Adelstein, vice per share, as well as expanding dence of fraudulent use of per-
indoor and outdoor pools and Sportsclub Association. Many There is also evidence that president of international de- the size of the board by six to sonal information. It said it
tennis courts. midprice gyms have struggled gyms might not be the retail velopment for Orangetheory 17 directors. SoftBank would was assured the stolen data
Years ago, health clubs to compete with boutique stu- repellent that mall owners long Fitness. get two of the new seats. As were destroyed.

DOLLAR Greenback Scarcity

Hits Non-U.S. Banks
time. The lender said it was be-
cause of sharp movements in
Swiss franc and euro interest
are anathema to global inves-
tors. Meanwhile, the share of
official reserves held in dollars
recently stopped its multiyear
To the Policyholders of
Continued from the prior page rates and declined to comment decline, and in the second quar- THE GUARDIAN LIFE INSURANCE
said Credit Suisse analyst and further. ter of 2017, foreign-country dol- COMPANY OF AMERICA
money-market guru Zoltan Poz- The scramble for dollars can Now Société Générale is lar-denominated debt rose to an
sar, of the move by the U.S. hurt non-U.S. banks as the cur- working to put its own counter- all-time high of $8.6 trillion, ac- Notice of Annual Election of Directors
Since the financial crisis, rency’s scarcity makes them measures in place, by diversify- cording to the BIS.
markets have been flashing a more expensive to borrow. ing sources of dollar funding “The dollar’s downward
red light, warning that dollars In December 2016, it drove across markets and types of in- trend of the last 40 years is The Annual Election of Directors of The Guardian Life
are scarce. Spreads on deriva- French lender Société Générale vestors. over,” said Paresh Upadhyaya, Insurance Company of America will be held at its Home
tives contracts called cross-cur- SA to its worst trading day of “This is something that fund manager at Amundi Pio- Office, located at 7 Hanover Square, New York, NY 10004
rency basis swaps, which are the year—and the only one we’re very careful and aware of,” neer, Europe’s largest asset on December 13, 2017. The polls will open at 10:00 AM
used by investors and compa- when the bank’s statistical esti- said Stéphane Landon, head of manager. and remain open until 4:00 PM on that day. Policyholders
nies to source dollars, have mates of probable losses were group treasury at Société Gé- So will there be enough dol- whose policies or contracts are in force on the date of the
jumped. Were greenbacks freely breached—its annual report nérale. “It’s true that we have lars for the world in the future? election and have been in force at least one year prior to
borrowed and lent, the spread showed. limited access to retail dollar Since the 1950s, that respon- the election date are entitled to vote in person or by proxy.
would be zero, economists say. Swiss bank UBS Group AG funding. So we have developed sibility has fallen to the euro- Proxies may be obtained from the Office of the Corporate
Whenever banks need to breached its statistical model more access to wholesale prod- dollar market, an offshore Lon- Secretary, The Guardian Life Insurance Company of
clean up their books around for group revenue at the same ucts overall,” he added. don-based market roughly $5 America, 7 Hanover Square, H-27-A, New York, NY 10004
quarter- and year-ends—closing trillion in size, dwarfing any or through Guardian’s website at www.guardianlife.com/
their dollar taps to borrowers— other offshore lending market. about-guardian/corporate-governance.
the gulf gets bigger. As the end drive American companies to reign that was established after Yet, banks in the eurodollar
of 2017 approaches, the three- repatriate a chunk of their cash World War II, especially after market might not be capable of Harris Oliner
month spread has ballooned to stashed abroad. President Richard Nixon un- satiating the world’s hunger for Senior Vice President
a one-year high. All of this means that dollars pegged the greenback from gold dollars, investors say, because and Corporate Secretary
Since October, the Fed has are flowing out of the rest of in 1971. The creation of the euro postcrisis regulations have
been allowing $10 billion of its the world’s pockets. Research- in 1999 and the breakneck raised the cost of short-term
$4.5 trillion balance sheet—ac- ers at the Switzerland-based growth of the Chinese economy lending.
quired under bond-buying pro- Bank for International Settle- led many analysts to say the “Above all the rest of the
grams after the financial cri- ments have found that, when- dollar would need to share the system, there’s the eurodollar
sis—to roll off every month, ever the dollar becomes scarcer, limelight. system,” said Jeffrey Snider,
while the U.S. Treasury is stash- credit gets harder to come by But the euro became politi- head of global investment at Al-
ing increasing amounts of cash around the world. cally unpopular during the Eu- hambra Investment Partners,
at the central bank, and ana- Many economists have long ropean debt crisis, and Chinese “and if it doesn’t work, the rest
lysts expect U.S. tax overhaul to predicted an end to the dollar capital controls to peg the yuan of the currencies don’t work.”
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Monday, November 27, 2017 | B3

BUSINESS NEWS

Recalls Mar Ford’s Drive for New Vigor

Safety-related costs
Total Recall
climb at same time Ford’s stock price has remained stagnant amid concerns about the
CEO steers a move to company’s future strategic endeavors, a period also punctuated by
unexpected recall expenses.
electric, driverless cars
$14 a share
Oct. 18
BY MIKE SPECTOR $267 million
AND MIKE COLIAS Faulty door latches
13 on late-model
Ford Motor Co. Chief Exec- June 28 pickup trucks
$142 million
utive Jim Hackett wants to
Defective driveshafts
push the 114-year-old auto 12 on vans
maker toward the future as
fast as he can.

LUKE SHARRETT/BLOOMBERG NEWS

Right now, though, he is
contending with mounting
costs from safety recalls.
Ford has disclosed over $1.3
billion in charges for recalling
vehicles since September 2016,
with the latest coming at the
same time Mr. Hackett aims to
divert a portion of profit from
booming truck sales to the de-
velopment of electric cars and
driverless vehicles.
The recall expenses have
caught Wall Street’s attention
as Mr. Hackett, who became
CEO in May, is trying to revive
investor enthusiasm for the
company. He has committed to
significantly cut spending on
conventional car making.
The sizable expenses are
the latest to hit a mainline au-
tomotive manufacturer since
2014, when revelations of
deadly flaws with General
Motors Co. ignition switches
and Takata Corp. air bags led
11 Sept. 8, 2016
$640 million
Faulty door latches
on various models March 29
10 $295 million
Some engines posed a fire risk;
repairs to defective door latches
on older cars
9
2016 ’17
A Ford assembly line in Louisville, Ky. The auto maker’s latest recall is related to faulty door latches. Sources: the company; WSJ Market Data Group (shares) THE WALL STREET JOURNAL.
to criminal charges against other safety problems. Takata, future technologies. charge, which is being booked industry and don’t reflect con-
both companies and record in- facing a multibillion-dollar re- Companies such as Waymo in the fourth quarter, covers sistent quality problems in the
dustrywide recalls of at least call tab, filed for bankruptcy LLC, the driverless-car divi- faulty door latches on 1.3 mil- company’s vehicles.
50 million vehicles annually in protection. sion of Google parent Alpha- lion F-series pickup trucks “Ford’s vehicle quality—
the U.S. for several years. Still, Ford’s recall charges bet Inc., don’t face similar sold during the past three based on trusted third-party
Ford until recently had are a reminder of the chal- manufacturing headaches, pre- model years. “Charges like surveys—is near an all-time
largely managed to avoid suc- lenges traditional car manu- ferring to form partnerships these demonstrate that per- high and we have achieved
cessive, significant recall ex- facturers face in the race to with existing auto makers haps all was not well in the some of the industry’s lowest
penses, and the charges and compete with Silicon Valley while remaining focused on Ford factories over the last warranty costs,” said Joe Hin-
other consequences for the technology companies on driv- their technological expertise. couple of years,” said Barclays richs, Ford’s global operations
company haven’t reached lev- erless vehicles. The complexity Ford’s latest recall charge, PLC analyst Brian Johnson. chief. Warranty expenses re-
els suffered elsewhere. GM of vehicles and the supply at $267 million, is larger than Ford executives contend re- flect auto makers’ costs for
spent $6 billion spanning 2014 chain needed to build them the company’s investment on cent disclosures of recall ex- covering repairs in the initial
and 2015 on recalls and legal can contribute to expensive an annual basis in Argo AI, a penses are part of an effort to years after a car is sold. Recall
settlements stemming from manufacturing problems just driverless-car startup it took be more transparent amid re- charges are one-time expenses
the ignition switches and as auto makers place bets on control of this year. The cent record recalls across the taken to fix defective parts.

FAA Tries to Ease Pilots’ Path From Military to Airlines

BY ANDY PASZTOR
As part of efforts to make it
easier for U.S. military avia-
tors to become commercial
airline pilots, the Federal Avi-
ation Administration has
found a strategy around White
House mandates to eliminate
two existing regulations for
each new rule that is pro-
posed.
Seeking to permit pilots of
military helicopters and tilt-
rotor craft to claim civilian
credit for hours spent behind
the controls while in uniform, lations that are slated be the FAA, is that the initiative The FAA’s move has poten- for-1 regulatory swap, accord-
the agency on Friday formally scrubbed. is “a deregulatory action” be- tially broad implications for ing to people familiar with
proposed revising current reg- The document published in cause the proposed changes future rule-making by federal their thinking.
ulations spelling out experi- the Federal Register—previ- “result in cost savings” rather transportation officials af- On Friday, the U.S. Depart-
ence requirements for new ously reviewed by officials at than additional financial bur- fecting a variety of issues, ment of Transportation said
commercial captains and co- the Transportation Depart- dens. ranging from drones to air- that Secretary Elaine Chao is
pilots. ment and White House Office Anticipated savings include traffic control to autonomous pursuing a common-sense
The goal is to help alleviate of Management and Budget— simplified record-keeping for vehicles. approach and a regulatory
shortages of entry-level pilots, explicitly indicates the pro- the FAA, plus tens of thou- In some aviation areas, FAA agenda—spanning ground
an undersupply that particu- posed rule falls outside the sands of dollars in potential chief Michael Huerta and Dan and air technologies—built
larly is dogging certain re- scope of President Donald savings for individual pilots Elwell, the agency’s deputy ad- on a “carefully crafted bal-
gional carriers. Trump’s executive order de- who would avoid paying for ministrator, similarly hope to ance that accelerates the
But it is also the first major manding a 2-for-1 trade-off be- extra flight hours now re- persuade White House regula- safe integration of technol-
safety rule to come out of the tween existing and future reg- quired before they are eligi- tory officials to sign off on ogy without imposing addi-
FAA this year without simulta- ulations. ble to transfer into civilian new safety initiatives without tional costs or stifling inno-
neously identifying any regu- The reason, according to cockpits. automatically imposing a 2- vation.”

IF THERE ARE
THREE TRADING
THINGS YOU WANT,
THEY’RE THESE
THREE THINGS.
POWER.
VALUE.
SERVICE.

Want more information about Power E*TRADE?

• Advanced trading platform with

a seamless experience between
desktop and tablet
• $4.95 equity trades, $0.50 options
contracts, $1.50 futures contracts1
• Licensed specialists and former
floor traders who speak to you
on your level

Futures and options transactions are intended for sophisticated investors and are complex, carry a high degree of risk, and are not suitable for all investors. For more information, please read the Characteristics and Risks of Standardized Options and the Risk Disclosure Statement for Futures and Options
by visiting etrade.com/optionsdisclosure or calling 1-800-387-2331 prior to applying for an account. 1. Equities are not the only types of securities available. Commissions for equity and options trades are $6.95 plus $0.75 fee per options contract. To qualify for $4.95 commissions for equity and options trades,
and $0.50 fee per options contract, you must execute at least 30 equity or options trades per quarter. Futures trades are $1.50 (per side, per contract, plus exchange and NFA fees). In addition to the $1.50 per contract per side commission, futures customers will be assessed certain fees, including applicable futures
exchange and NFA fees. These fees are not established by E*TRADE Futures LLC and will vary by exchange. Additional fees apply to brokerage assisted trade for execution of futures and options contracts. Securities products and services are offered by E*TRADE Securities LLC, member FINRA/SIPC. Commodity futures
and options on futures products and services offered by E*TRADE Futures LLC, Member NFA. E*TRADE Securities LLC and E*TRADE Futures LLC are separate but affiliated companies. © 2017 E*TRADE Financial Corporation. All rights reserved.
B4 | Monday, November 27, 2017 THE WALL STREET JOURNAL.

TECHNOLOGY WSJ.com/Tech

Space Taxis Seek to Lower Risks Gaming’s

Niantic
Boeing and SpaceX
are struggling to meet
NASA’s requirements
Obtains
for aircraft safety Funding
BY ANDY PASZTOR BY CAT ZAKRZEWSKI

Can NASA send astronauts The maker of the hit aug-

into space as safely as it mented-reality game “Pokémon
promised? Go” has raised about $200 mil-
The space agency is scruti- lion in new financing.
nizing that question as both Niantic Inc.’s Series B comes
Boeing Co. and Elon Musk’s just weeks after the game maker
SpaceX work on new space- said it plans to release a new ti-
craft that NASA would begin tle called “Harry Potter: Wiz-
using as early as next year to ards Unite.” Niantic gained no-
fly astronauts to the interna- toriety in the summer of 2016 as
tional space station. “Pokémon Go” became an over-
These commercial efforts night hit, pushing millions of
face formidable obstacles in players to get outside and chase
meeting safety requirements digital monsters with their
set by the National Aeronau- smartphones.
tics and Space Administra- Spark Capital led the round,
tion, posing policy and public- with participation from Found-
DAVID C. BOWMAN/NASA

relations dilemmas for the ers Fund, Meritech, Javelin

agency’s chiefs. Venture Partners, along with
Experts say NASA likely will branding agency You & Mr.
require inspections in space to Jones and internet company
reduce the threat of cata- NetEase Inc., according to
strophic accidents, a last-ditch Niantic.
safeguard that it had hoped to A NASA test exercise. The agency is preparing to use next-generation spacecraft to send astronauts to the international space station. Niantic Chief Executive John
avoid when approving the plan Hanke said via email that the
three years ago. Still, it is un- station, a 250-mile-high orbit- call for a statistical limit of no funding would enable new stra-
clear whether such on-orbit ing laboratory. NASA’s ulti- more than one possible fatal Debris in Space submitted by each of the con- tegic opportunities for the com-
checks by NASA would do mate sign-off also is likely to accident per 270 flights. By tractors. So far, the agency has pany.
enough to alleviate dangers prompt congressional scrutiny. contrast, scheduled airlines ex- Poses the Biggest committed roughly $4 billion “Pokémon Go” reached $1
from space debris and tiny Boeing recently said com- perience roughly one accident Danger to Capsules overall on the two systems, billion in revenue globally just
meteor fragments, say experts pany engineering models show per one million departures with a total of 16 flights ex- seven months after its release
inside and outside the agency. its CST-100 Starliner “is a safe, globally. Although even the pected through the mid-2020s. last July—faster than any other
For months, these experts robust vehicle” that will meet new standard seems perilous, it The biggest safety chal- A NASA spokeswoman mobile game, including Activi-
have warned that without new all mandatory safety numbers. is a reflection of the mission’s lenge for designers stems from said the agency plans to sion Blizzard Inc.’s “Candy
protections, neither Boeing’s “NASA will review that analy- technical difficulties. The stan- thousands of tiny meteors or “work with the contractors Crush Saga,” according to App
nor SpaceX’s vehicles appear sis” next month, according to a dard is still more than four particles that can damage or [Boeing and SpaceX] through Annie Inc.
likely to comply with safety Boeing spokeswoman, and “we times safer than that of the penetrate space capsules. Trav- their final certification” and In “Pokémon Go,” Niantic
levels. Minutes of NASA’s will not speculate on their space shuttle fleet that was re- eling at approximately 17,000 neither company “has re- combines location-tracking and
Aerospace Safety Advisory findings prior to the meeting.” tired in 2011 under budgetary miles an hour, even a paint quested a formal waiver from augmented reality, technology
Panel, composed of six inde- Space Exploration Technol- strains and safety concerns. chip can spark disaster. Boeing NASA” not to comply with the that overlays digital images on
pendent safety watchdogs, are ogies Corp., the official name The commercial designers Co. partly addressed this by required safety metrics. real-world environments. Play-
rife with concerns of danger. of Mr. Musk’s space-transpor- are seeking to alleviate other changing its design to install Aerospace industry consul- ers can search for beloved mon-
The stakes are high both for tation company, recently said it risks. They are concerned that Kevlar backing. SpaceX is rely- tant Doug Cooke, a former se- sters like Pikachu on a digital
NASA and the companies. Af- and NASA are “working closely extra shielding to better safe- ing on other features. nior NASA official, said he wasn’t map on their phones. When they
ter fatal explosions of two to ensure all safety require- guard equipment and crews The international space sta- surprised by difficulties comply- arrive at the locations on the
space shuttles in 1986 and ments are met” for its new, from collisions with debris could tion also faces risks from such ing with safety standards related map, they see digital images of
2003, NASA said it was com- manned Dragon spacecraft. It make a spacecraft too heavy. orbital debris, but its design to orbital debris. “It’s always the popular characters blended
mitted to making future space- said the company was evaluat- Today, only Russian rockets minimizes hazards and it can been a difficult requirement to into real-world environments.
craft substantially safer. Fall- ing a number of options, in- and spacecraft transport as- maneuver to avoid collisions. meet,” Mr. Cooke said. “NASA San Francisco-based Niantic
ing short of the safety cluding space inspections. Gov- tronauts into orbit. But Mos- A comprehensive review of has to make a judgment on also makes “Ingress,” another
benchmark could further delay ernment and company experts cow’s safety record for un- capsule safety, slated for early where the overall risk stands,” a mobile game that combined
the goal of ending American “have jointly made significant manned missions is worse next month, is expected to decision that is “always done augmented reality and location
reliance on Russian spacecraft progress in defining” orbital than that of the U.S., and provide NASA’s preliminary with a lot of data and a lot of years before “Pokémon Go.” The
to ferry U.S. astronauts to and debris risks, SpaceX said. Washington is eager to take conclusions about assessments hand-wringing,” he said. game never attained widespread
from the international space NASA’s requirements now back that responsibility. popularity.

ADVERTISEMENT

Legal Notices
MIMS
To advertise: 800-366-3975 or WSJ.com/classifieds
Continued from page B1
dia as a cheap and effective
malaria prevention. Today,
CLASS ACTIONS we can see how one technol-
ogy, Facebook groups, can
serve as a lifeline for parents
CASE WESTERN RESERVE UNIVERSITY ARCHIVES

 
 of children with rare dis-
  
            eases while also radicalizing
       
      political extremists.
               There is no absolute good
    !    
       or bad here, just how good
       

      or bad a technology is in a
 
        > 0 8 given context. This points to
 
        8FA -H*, E @B 70 a problem tech companies
  !"  !#  $%& ' F -4 + - -4  are too often reluctant to
( &) *%+% *,-.* * + $.-' 7 7 

*  + ,/ 0 $!1
face: Their enormous power
, $ ' #
23   2 &)3' means they have an obliga-
-!  8 tion to try to anticipate the
   
   ,   / B%%& 8%B 9F&F
     1  - +/ E *99% 990 potential impact of anything Melvin Kranzberg in the 1960s. He became a technology historian.
4   )  &) $ 5 ('  H46/ B -4  they produce.
, /      !  )) 4 +64 *9 G sort of intrinsic power, and the U.S. and the former
 !!/ 1  4  4 , $"' G"  2. “Invention is the it doesn’t,” says historian U.S.S.R.? Or was that conflict
2- +/3 ) 4 )   %4/  - mother of necessity.” Robert C. Post, who was itself driven by previous
  / ( 4    -7%0,FB BF-% E 8F&BF 70 Yes, that’s backward from Prof. Kranzberg’s friend and technological developments
   - +/  4  44 ## 6 - -4  
 4/ 4     )(/
the way you remember it. It colleague. “It has to be moti- that allowed Hitler to
7 7 
 means “every technical inno- vated by political power or threaten both nations?
4!   /  , $ ' "
G
 6 6/ 1 / ) )4 vation seems to require addi- cultural power or something
4  )   1            tional technical advances to else.” 6. “Technology is a very
/ 1  ( 4 (  /  1
      /  $
2 - 43'   /  !
make it fully effective,” Prof. Recently, representatives human activity.”
( ( 
   7))   4 )   Kranzberg wrote. in Congress declared their “Technology is capable of
7)) /    &)  /  -8 &) In our modern world, the intention to force Alphabet doing great things,” Apple
( -8 9 -8  *  -8 0
      *) 14    ) invention of the smartphone Inc.’s Google, Facebook Inc. Inc. Chief Executive Tim
$ 2-8 &)3'  4  
 ) - +/ 1 //   5:   - 0 14 ( 41  has led to the necessity for and others to disclose who Cook said in his 2017 com-
  ;     6    )  - 0 4 14    countless other technologies, pays for political ads on mencement speech at MIT.
4 ) - +/    . - :4 *) 14 (      - from phone cases to 5G wire- their services, bringing them “But it doesn’t want to do
 ! ) ) 4 ( 7)) )4 0 14     6 1    ? 14 less. Apple’s cure for staring in line with television, radio great things—it doesn’t want
/    4 )  1  4  (   1 7))  1 -
0 04
at your phone too much? A and print. These disclosures anything.” The point, Mr.
) - +/ !  <4 1 1/  )
 4  1 (4 !     smartwatch to glance at 100 were absent from internet ad Cook continued, is that de-
*) 14   (   4 1  
)  / / 4  6 !1 )   14 4 4  ( I4 ) :4
times a day. regulation not for any tech- spite its power, how we use
/ / ( 4 )            !   nical reason, but because, in technology is up to us.
( ) 1= ) (  4  )    *) 14 !1 3. “Technology comes in 2006, the Federal Election The trick is, because tech-
   7))= /   :4 14) )   - 0 14 packages, big and small.” Commission took a light nology generally reaches
/        !  :  (   4 1 1  /   To understand any part of touch when regulating the mass adoption via corpora-
4 ) )4 / , 04   4 1   14 1 44 !41 1  14 a technological package re- new medium. tions, those businesses must
5/  4/ (     ) 7))= 1 ! /   14 ( : 4 14
  &)= ) ,    ( (   /      - 4
quires looking at its interac- More broadly, lawmakers think of the consequences of
 1 , / /  -8 &) tion with and dependency on are taking an interest in pri- their actions as well as how
*) 14 1    - 0 14 !
( 4
 /  <     
the rest of it, Prof. Kranz- vacy, data transparency, na- they profit from them.
    , & 74    - 0 04= I4 )  ( berg wrote—including the tional security and antitrust Mr. Cook sets the tone at
- 0   )  !4  ) 1= )  /   : 1 human beings essential to issues in tech—more because Apple, with his penchant for
 $:4/ 1 &)     )(/  4  )    C4 how it functions. While inno- of a shift in our culture than public pronouncements
)  4  )5'  4 < 4  "        !  vation destroys jobs, it also in the technology itself. about how the company pro-
- +/   . - 1 )     - 0 04    
 &) ) >4   4/ 41  
creates countless new ones. tects users’ data. Google has
    !
  4 )   5  )(/ Steel, oil and rail were the 5. “All history is rele- recently adopted antidis-
  &) *%+% *,-.* *? + , 04  4  /  41 # # package of technologies that vant, but the history of crimination measures to
$.-' *? + ,/ 0? -8 9?   (  !    
dominated the 19th and early technology is the most rele- make artificial intelligence
-8  *?  -8 0  I4 )  ( ) 1=)  4
) /   : , / 1  20th centuries, especially in vant.” less racist. Facebook now
  ) 7 - $23' (  4 <4  4 (4 )4  America, just as the internet, The Cold War led to the has teams dedicated to pri-
  - 0   ! " mobile phones and wireless buildup of nuclear weapons vacy, security and safety that
 ,    /   *) 14 ! 14    )  
!  - 0  (   - 0 14  4/    1 )  connectivity are transform- and the missiles to deliver review new services before
      *) 14 !   ( 4 14 / //   ing the 21st century. them anywhere on Earth. they’re rolled out.
!   14 1   1        That led to the development As Prof. Kranzberg pre-
(((47,49/  1 /  *) 14 ! I4 4  / 14 1 4. “Although technology of a war-proof communica- sciently noted at the dawn of
(/   )(/ - 0 09 04  - 0 04 5 ! #  might be a prime element tion system: the internet. the internet age, “Many of
@/1 7 A       $    $     in many public issues, non- Many related innovations our technology-related prob-
7B%,* 9A%B,C +%9*D%. & !   technical factors take pre- subsequently seeped into ev- lems arise because of the un-
E 70A*F- 997
F 01 0 7F +:
"G +C FB&%B F cedence in technology-pol- ery aspect of our lives. foreseen consequences when
7 % "
"G , . - & 04 )  % & ) icy decisions.” But does that mean we apparently benign technolo-
, $' 
 / -4 &! “People think technology owe the modern world to the gies are employed on a mas-
as an abstraction has some existential contest between sive scale.”
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Monday, November 27, 2017 | B5

The best gifts

all in one place.
Buy one of our best smartphones and
get 50% off a featured accessory.
Up to $960 device payment purchase req’d. Eligible devices: Google Pixel 2 & Pixel 2 XL, Samsung Galaxy S8, S8+ & Note8, and Moto Z 2 Force.

Buy a Moto Z2 Force,

get 50% off any moto mod™
Now $39.99 $31.50/mo
JBL SoundBoost 2 moto mod™ Moto Z2 Force
With Moto Z 2 Force purchase. For 24 months; 0% APR.
Retail price: $79.99. Retail price: $756.

Buy Google Pixel 2,

get 50% off Google Home
Now $64.99 $27.08/mo
Google Home Google Pixel 2
With Google Pixel 2 purchase. For 24 months; 0% APR.
Retail price: $129.99. Retail price: $649.99

Buy a Samsung Galaxy S8,

get 50% off Samsung Gear VR
Now $64.99 $31.50/mo
Samsung Gear VR Samsung Galaxy S8
with Controller For 24 months; 0% APR.
With Samsung Galaxy S8 purchase. Retail price: $756.
Retail price: $129.99.

1.800.806.3607 go.vzw.com/bestgifts
All online orders ship free.

Activation/upgrade fee/line: $30. IMPORTANT CONSUMER INFORMATION: Subject to VZW Agmts., Calling Plan & credit approval. Offers & coverage, varying by svc., not available everywhere; see vzw.com. Limited-time offers. While supplies
last. Restocking fee may apply. Accessories not available in all stores. Additional colors available online and in stores. MA & NV: Sales tax based on higher of device price or VZW’s cost; CA: Sales tax based on full price of device. Not all products
available in Alaska and Hawaii. Screen images simulated. © 2017 Samsung Electronics America, Inc. Samsung and Samsung Galaxy S are both trademarks of Samsung Electronics Co., Ltd. Other company product names mentioned may be
trademarks of their respective owners. Ad valid 11/27/17–12/13/17. © 2017 Verizon Wireless.
 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B6 | Monday, November 27, 2017 NY
MEDIA
Disney’s ‘Coco’ Tops Holiday Weekend BY BEN FRITZ
In what’s becoming a holi-
day tradition, Walt Disney Co.
won Thanksgiving weekend at
the box office with a new fam-
ily animated film.
“Coco,” from the company’s
Pixar Animation Studios,
opened to a healthy $71.2 mil-
lion in the U.S. and Canada be-
tween Wednesday and Sunday,
according to studio estimates.
That put it ahead of the su-
perhero team-up “Justice
League,” which grossed $59.6
million over the same period
and family drama “Wonder,”
DISNEY-PIXAR/ASSOCIATED PRESS
which came in No. 3 with a
surprisingly robust $32.3 mil-
lion. Both films opened the
prior weekend.
“Coco,” about a boy on a
journey in the land of the
dead, opened below the 2013
Disney hit “Frozen” and last
The animated film ‘Coco’ came out ahead of ‘Justice League’ at the box office amid positive reviews. year’s “Moana,” which grossed
Developing countries will consume
65% of global energy by 2040.
The world energy landscape is changing dramatically.
For example, two-thirds of energy-supply investment
is now taking place in emerging economies. This
creates opportunities as well as risks. CME Group
gives producers and suppliers the tools they need
to capture these opportunities while managing risks
in volatile oil and natural gas markets. This is how
the energy industry can deliver in the face of ever-
changing consumer demand. This is how the world
advances. Learn more at cmegroup.com/fuel.
CME Group is a trademark of CME Group Inc. The Globe logo is a trademark of Chicago Mercantile Exchange Inc. All other trademarks are the property of their respective owners.
Copyright © 2017 CME Group. All rights reserved.
* *** THE WALL STREET JOURNAL.
$93.6 million and $82.1 million,
respectively, over the Thanks-
giving weekend. But it was
above 2010’s successful “Tan-
gled,” which made its debut to
$68.7 million on the holiday
weekend and Pixar’s 2013 flop
“The Good Dinosaur,” which
started with $55.5 million.
Perhaps most important for
Disney and Pixar, “Coco”
earned overwhelmingly posi-
tive reviews and audiences
gave it an average grade of A+,
according to market research
firm CinemaScore. That means
it is positioned well for a long
box-office run driven by
strong word-of-mouth.
Disney now has 10 of the 11
highest openings ever over the
Thanksgiving holiday, most of
which were family animated
films. The only competitor’s
movie in the mix is the 2008
comedy “Four Christmases” from
Time Warner Inc.’s Warner Bros.
“Coco,” which draws exten-
sively on Mexican cultural tra-
ditions, is already the highest
grossing movie ever in that
country in local currency, with
$53.4 million through Sunday.
Combined with a solid start in
China and so-so-debut in Rus-
sia, “Coco” has grossed $82.2
million overseas. It has yet to
open in many foreign coun-
tries, including all of Western
Europe. In some major mar-
kets, such as Brazil, the U.K.
and South Korea, it won’t de-
Estimated Box-Office Figures, Through Sunday
FILM DISTRIBUTOR
1. Coco Disney
2. Justice League Warner Bros.
3. Wonder Lions Gate
4. Thor: Ragnarok Disney
5. Daddy’s Home 2 Paramount
*Friday, Saturday and Sunday Source: comScore
TIME
Continued from page B1
lion paid subscriptions, which
will account for one-quarter of
revenue.
This is at least the third
time Meredith has attempted
to buy Time. Meredith made a
run earlier this year but
couldn’t secure enough financ-
ing, and Time in late April
ended the sales process. Mere-
dith was also in talks to buy a
number of Time titles in 2013
that ended with Time Warner
Inc. instead spinning off Time
Inc. into a separate publicly
traded company.
This time around, Meredith
approached Time with a fully
financed offer, including $650
million from a private-equity
unit of Koch Industries called
Koch Equity Development.
The backing of the Koch
brothers, together with a
group of bank lenders, imme-
diately gave Meredith’s re-
newed effort greater weight.
Koch Industries is one of the
largest privately owned com-
panies in the U.S., and the two
billionaire brothers who con-
trol it, Charles Koch and David
Koch, are known for support-
ing conservative causes.
Mr. Harty described the
Koch investment as “passive”
and said the firm “won’t have
any influence on Meredith’s
operations, including edito-
rial.” Koch Industries, he
added, has expressed no inter-
est in acquiring any individual
Time Inc. titles.
Mr. Lacy said he has never
met with the Koch brothers.
“They won’t have a seat on the
board of which I chair,” he
added.
A representative for Koch
Industries didn’t immediately
respond to a request for com-
ment.
The magazine industry, like
the broader media landscape,
but until January. That is due
to differing schedules for
school holidays, said Disney
distribution chief Dave Hollis.
Its domestic success comes
as the once-reliable Pixar has
had a mixed track record at
the box office recently, with
this summer’s disappointment
“Cars 3” and “The Good Dino-
saur” bracketing the 2016 hit
“Finding Dory.”
For the holiday weekend,
“Justice League” declined 57%
from its soft $93.8 million
opening. That is less than the
69% and 67% drops for 2016’s
“Batman v Superman” and
“Suicide Squad,” respectively,
but more than the 43% second
weekend box-office drop for
this summer’s “Wonder
Woman.” It is an indication
audience buzz on “Justice
League” is decent compared
with other DC superhero films
from Warner Bros., though not
stellar. The nearly $300 mil-
lion production has grossed a
total of $481.3 million globally.
Ticket sales for “Wonder,”
meanwhile, declined only 19%,
a sign that word-of-mouth is
very strong for the adaptation
of a book about a physically
scarred boy’s first days at
school. The low-budget movie
is becoming a hit for distribu-
tor Lions Gate Entertainment
Corp. and its financing partners
on the movie, Participant Media
and Walden Media.
SALES, IN MILLIONS
WEEKEND* CUMULATIVE % CHANGE
$49 $71.2 —
$40.7 $171.5 -57
$22.3 $69.4 -19
$16.8 $277.5 -23
$13.3 $72.7 -8
is undergoing profound
changes as print advertising
revenues continue to decline
and publishers face off with
tech giants for online ad dol-
lars. Meredith is betting team-
ing up with Time will give it
more scale online to compete
with Alphabet Inc.’s Google
and Facebook Inc., which are
projected to account for more
than 63% of U.S. digital adver-
tising spending this year, ac-
cording to eMarketer.
The impact has been dra-
matic, especially on smaller
publishers, contributing to
consolidation in the magazine
industry. Most recently, Hearst
agreed to acquire family-
owned magazine publisher
Rodale Inc., and Jann Wenner
is seeking to sell his majority
stake in Rolling Stone.
Time Inc. has been invest-
ing in online video and
branded content, yet its print
magazine circulation and ad-
vertising still account for
about two-thirds of total reve-
nue. In the first nine months
of the year, magazine revenue
dropped 17% to $1.3 billion.
Time Inc. claims 30 million
print subscribers. Time ex-
pects to generate about $1 bil-
lion this year in nonmagazine
revenue.
Meredith’s own magazine
revenue has slipped slightly,
but it has somewhat of a buf-
fer thanks to its ownership of
local television stations. For
the fiscal year ended June 30,
revenue at its magazine group
fell 2% to $1.08 billion, while
its TV station group saw reve-
nue rise 15% to $630 million.
Meredith describes itself as
a business whose “cornerstone
is knowledge of the home,
family, food and lifestyle mar-
kets.” Such Time titles as Real
Simple, InStyle and People, as
well as Cooking Light, South-
ern Living, and Well Done, a
social video brand, will all fit
neatly alongside Meredith’s
current portfolio.
GARY HERSHORN/GETTY IMAGES
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Monday, November 27, 2017 | B7

BUSINESS & FINANCE

HNA Deal
Under Fire
Highland Loses Ruling on Ouster
Arbitration panel says public recently in a lawsuit ing in court against another

From Swiss firm falsely accused

BY JULIE STEINBERG
Chinese conglomerate HNA
Group Co. supplied false in-
formation and failed to dis-
close key ownership stakes of
some of its executives while
acquiring a company last
year, a Swiss regulator found.
The regulator, the Swiss
Takeover Board, said Friday
that HNA, which has been
facing increasing scrutiny
from regulators in the U.S.
and China, last year gave in-
correct information about
two of its own stakeholders
in its offer prospectus for its
$1.5 billion deal to acquire
Swiss air-travel logistics com-
pany Gategroup Holding AG.
The board said HNA inac-
curately represented the own-
ership stake held by Beijing
resident Guan Jun as well as
that of Bharat Bhise, chief ex-
ecutive of Hong Kong-based
private-equity and invest-
portfolio manager of
filed by Mr. Terry in Dallas
County District Court to re-
cover the award, as the money
can’t be automatically col-
improper relationship lected with just an arbitration
ruling. The two sides are ex-
BY MATT WIRZ pected to continue their battle
in the district court.
An arbitration panel found A Highland spokeswoman
that fund-management com- said in a statement: “In this
pany Highland Capital Man- ongoing compensation dis-
agement used pretexts and pute, Highland’s remaining
false allegations of a sexual re- claims regarding Josh Terry’s
lationship with a co-worker to misconduct, including over a
fire a portfolio manager with- year of malicious taping of co-
out paying millions of dollars workers and counter-parties,
it owed him. will dwarf the arbitration
The finding is one of sev- award.” The arbitration panel
eral legal reversals over the found that Mr. Terry was enti-
past several years for the Dal- tled to keep all the recordings
las-based firm, which has been he had made of his conversa-
fighting in court with former tions with Highland employ-
investors, former employees ees.
and trading partners since the Highland specializes in
financial crisis. trading distressed debt and
Highland’s founder, James secured loans of companies
Dondero, fired the firm’s most
productive portfolio manager,
Josh Terry, in June 2016 after
Mr. Terry opposed a plan by
The finding is one of
Mr. Dondero to transfer funds several legal reversals
BRENT HUMPHREYS
former fund manager, Patrick
Daugherty. The firm sued Mr.
Daugherty in 2012, alleging he
defamed Highland and publi-
cized confidential information
after leaving in 2011. Mr.
Daugherty countersued, alleg-
ing he had been forced out of
the firm for refusing to ap-
prove asset transfers ordered
by Mr. Dondero. A jury found
in favor of each of the sides on
different issues in 2014 and
both Highland and Mr. Daugh-
erty have since been litigating
to collect the amounts the jury
awarded them.
Highland has subpoenaed
The Wall Street Journal re-
lated to the litigation between
the firm and Mr. Daugherty.
Dow Jones has challenged the
subpoena and the matter is
pending before the Dallas
Court of Appeals. Mr. Daugh-
erty was found in contempt of
court in that case in August
and was sentenced to 38 days
in jail, a ruling he is now ap-
pealing.
Mr. Terry was in good

ment advisory firm Bravia
Capital.
The regulator said their
share holdings were actually
12.01% and 17.15%, respec-
tively, not 12.35% and 17.4%,
as HNA had claimed in the of-
fer prospectus.
HNA also failed to disclose
that the two were holding
stakes on behalf of the com-
pany’s co-founders, including
Chen Feng, Wang Jian and
Adam Tan, who should have
been listed as the beneficial
owners of the shares, the reg-
ulator said.
“We cooperated fully with
the Swiss Takeover Board’s
inquiry, and we respect its
authority in this matter,” a
spokesman for HNA said.
HNA will pay operating
costs of 50,000 Swiss francs
($51,000) and could face
monetary penalties for failing
to provide complete informa-
tion during the takeover. The
size of such a potential pen-
alty, if one is imposed, hasn’t
been made clear.
between Highland investment standing at Highland, manag-
vehicles and to delay repaying
over the past several ing more than $10 billion of
money owed to Highland in- years for the firm. the firm’s assets under man-
vestors, the Dallas arbitration agement, until his abrupt fir-
panel determined in October. ing, according to the ruling.
Mr. Terry believed the plan James Dondero in 2011. He fired Highland’s Josh Terry last year. The conflict started in 2016
was a breach of his fiduciary with junk credit ratings and when Mr. Dondero instructed
duty to Highland clients and him, Highland sued Mr. Terry, The relationship never hap- managed about $39 billion at Mr. Terry to lend $17 million
an external lawyer hired by who had been trying to collect pened and “this allegation was its peak in 2007. The firm took from an investment fund Mr.
the firm sided with him retirement investments from based solely on someone’s fan- heavy losses in the financial Terry managed to another
against Mr. Dondero, accord- his former employer. Highland tasy related to costumes they crisis, leading to the liquida- Highland fund to pay for the
ing to the panel. alleged Mr. Terry had acted wore to an office Halloween tion of several of its hedge acquisition of a Brazilian latex
“Dondero was simply angry against the interests of inves- party,” the panel stated. Two funds and to multiple lawsuits. manufacturer, according to the
and realized Terry was not a tors in a fund he managed and other sexual relationships Its assets under management ruling. Mr. Dondero also
‘yes man’ willing to let Don- that he had sexual relation- Highland alleged Mr. Terry have shrunk to $13.5 billion, planned to postpone a $56
dero have his wrongheaded ships with several subordi- had with co-workers were in- according to a company web- million payment owed in May
way,” the panel found in its nates. The court ordered the significant in one case and un- site. 2016 to investors in other
ruling. “So Dondero fired two parties to arbitration. proven in the other, according Highland also lost an arbi- Highland funds, the panel
Terry on the spot and later Mr. Terry never caused to the arbitrators. tration in 2016 against inves- found.
sought to characterize Terry’s damage or loss to the fund The panel said Mr. Dondero tors in one of its hedge funds Mr. Terry opposed the plan
termination of employment Highland alleged he misman- retrospectively constructed a who alleged they had been to delay repaying money owed
‘for cause’.” aged, according to the arbitra- pretext for the firing to justify cheated out of millions of dol- to clients. In early June 2016,
The panel also found Mr. tion ruling. The arbitration not paying Mr. Terry $5.7 mil- lars. The firm subsequently an internal Highland commit-
Terry “did not prove that the panel, made up of three for- lion he was owed by Highland. reached an agreement with tee approved the Brazilian ac-
sole reason for his termination mer Texas district court Arbitrators awarded Mr. Terry the investors. Separately, a quisition but required the $56
was his refusal to commit an judges, also determined that $7.9 million in damages and New York State Supreme Court million obligation be paid
illegal act.” The panel didn’t Highland’s accusation that Mr. interest. judge in April dismissed a law- without further delay.
rule on whether Mr. Dondero’s Terry had sex with a junior “The arbitration award suit by the firm accusing an That left Mr. Dondero with
plan would constitute a breach lawyer at the firm and in- speaks for itself,” said Rogge investor of libel, a ruling High- less money to fund his plan
of fiduciary duty. volved her in alleged financial Dunn, Mr. Terry’s attorney. land is appealing. and he promptly fired Mr.
Three months after it fired improprieties was “offensive.” The decision was made Highland also is still fight- Terry, the panel determined.

Which is why we offer funds and

ETFs across asset classes to help
your clients weather every market
trend for the long-term.

EVERY MARKET 4 diverse solutions to help build

TREND HAS AN a stronger portfolio:

EXPIRATION
HLIEX GBOSX GAOSX JPIN

DATE jpmorgan.com/funds/4solutions

LET’S SOLVE IT.

Investors should carefully consider the investment objectives and risks as well as charges and expenses of a fund. The prospectus
contains this and other information about the fund and should be read carefully before investing. To obtain a prospectus for Mutual
Funds: Contact JPMorgan Distribution Services, Inc. at 1-800-480-4111 or visit jpmorganfunds.com. Exchange Traded Funds: Call
1-844-4JPM-ETF or visit jpmorgan.com/ETF. International investing has a greater degree of risk and increased volatility due to political
and economic instability of some overseas markets. Changes in currency exchange rates and different accounting and taxation policies
outside the U.S. can affect returns. Investing involves risk, including possible loss of principal. J.P. Morgan ETFs are distributed by
JPMorgan Distribution Services, Inc., which is an affiliate of JPMorgan Chase & Co. Affiliates of JPMorgan Chase & Co. receive fees for
providing various services to the funds.
J.P. Morgan Asset Management is the brand for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. This communication is issued by Distribution Services Inc.
and J.P. Morgan Institutional Investments, Inc., both members of FINRA/SIPC.; and J.P. Morgan Investment Management Inc .© JPMorgan Chase & Co., November 2017
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B8 | Monday, November 27, 2017 THE WALL STREET JOURNAL.

MARKETS DIGEST
Dow Jones Industrial Average S&P 500 Index New to the Market
Last Year ago
23557.99 s 199.75, or 0.86% last week Trailing P/E ratio 20.74 20.89 2602.42 s 23.57, or 0.91% last week Trailing P/E ratio 24.49 24.35
Last Year ago
Public Offerings of Stock
High, low, open and close for each of P/E estimate * 19.35 17.86 High, low, open and close for each of P/E estimate * 19.50 18.45
Dividend yield 2.19 2.48 Dividend yield 1.92 2.12
IPOs in the U.S. Market
the past 52 weeks the past 52 weeks
All-time high 23590.83, 11/21/17 All-time high: 2602.42, 11/24/17 None expected this week

Current divisor 0.14523396877348

Lockup Expirations
23000 2600 Below, companies whose officers and other insiders will become eligible
to sell shares in their newly public companies for the first time. Such
22000 65-day moving average 2500 sales can move the stock’s price.
Lockup Offer Offer amt Through Lockup
expiration Issue date Issuer Symbol price($) ($ mil.) Friday (%) provision
21000 2400
Dec. 3 June 6, ’17 ShotSpotter SSTI 11.00 35.4 30.7 180 days
Sources: Dealogic; WSJ Market Data Group
65-day moving average 20000 2300

Week's high 200-day moving average

IPO Scorecard
DOWN UP 19000 2200 Performance of IPOs, most-recent listed first
% Chg From % Chg From
t

Monday's open Friday's close

Company SYMBOL Friday3s Offer 1st-day Company SYMBOL Friday3s Offer 1st-day
2100 IPO date/Offer price close ($) price close IPO date/Offer price close ($) price close
Friday's close Monday's open 18000
t

Big Rock Ptnrs Acquisition 10.03 0.3 0.2 SailPoint Tech 15.80 31.7 21.5
200-day moving average BRPAU Nov. 20/$10.00 SAIL Nov. 17/$12.00
Week's low 2000
17000 AMERI Hldgs 3.25 –21.1 –6.9 scPharmaceuticals 14.07 0.5 –0.2
AMRH Nov. 17/$4.12 SCPH Nov. 17/$14.00
Bars measure the point change from Monday's open
Bluegreen Vacations 14.25 1.8 9.6 Sterling Bancorp 12.82 6.8 5.4
16000 1900 BXG Nov. 17/$14.00 SBT Nov. 17/$12.00
N D J F M A M J J A S O N N D J F M A M J J A S O N Legacy Acquisition 10.00 ... ... Stitch Fix 18.62 24.1 22.9
LGC.U Nov. 17/$10.00 SFIX Nov. 17/$15.00
Primary
NYSE weekly volume, in billions of shares market Composite Level Brands 5.50 –8.3 –0.9 Arsanis 16.57 65.7 18.1
t
t

Financial Flashback LEVB Nov. 17/$6.00 ASNS Nov. 16/$10.00

30
20 The Wall Street Journal, Nov. 27, 2007 Sources: WSJ Market Data Group; FactSet Research Systems
10 Citigroup shares fell although the bank announced a $7.5
0 billion investment by the Abu Dhabi Investment Other Stock Offerings
N D J F M A M J J A S O N Authority in exchange for a 4.9% stake in the bank. Secondaries and follow-ons expected this week in the U.S. market
Weekly P/E data based on as-reported earnings from Birinyi Associates Inc. None expected this week
Major U.S. Stock-Market Indexes Nasdaq Composite Off the Shelf
Latest Week 52-Week % chg s 106.37, or 1.57% “Shelf registrations” allow a company to prepare a stock or bond for
High Low Close Net chg % chg Low Close (l) High % chg YTD 3-yr. ann. sale, without selling the whole issue at once. Corporations sell as
Dow Jones
last week
conditions become favorable. Here are the shelf sales, or takedowns,
Industrial Average 23617.80 23360.58 23557.99 199.75 0.86 19097.90 l 23590.83 23.0 19.2 9.8 over the last week:
Transportation Avg 9656.31 9456.16 9620.20 137.11 1.45 8783.74 l 10038.13 6.4 6.4 1.6 Takedown date/ Deal value Registration
6900
Utility Average 762.32 754.76 759.07 0.99 0.13 626.66 l 774.47 18.6 15.1 8.7 Issuer/Industry Registration date ($ mil.) (mil.) Bookrunner(s)
Total Stock Market 27003.22 26712.18 26990.54 272.32 1.02 22773.93 l 26990.54 17.1 16.0 7.9 Black Knight Nov. 20 $227.5 ... GS
Barron's 400 699.28 687.76 696.57 9.18 1.33 583.16 l 697.81 17.1 15.8 8.4 6850 Computers & Electronics May 8,317

Nasdaq Stock Market Performance Food Group Nov. 20 $141.3 ... Barclays
6800 Food & Beverage Nov. 16,316
Nasdaq Composite 6890.02 6779.49 6889.16 106.37 1.57 5251.11 l 6889.16 27.6 28.0 13.2
Nasdaq 100 6410.77 6301.88 6409.29 94.78 1.50 4734.10 l 6409.29 31.6 31.8 14.4
Standard & Poor's
6750 Public and Private Borrowing
17 20 21 22 23 24
500 Index 2604.21 2578.24 2602.42 23.57 0.91 2191.08 l 2602.42 17.6 16.2 7.9 November Treasurys
MidCap 400 1863.97 1839.40 1859.19 18.45 1.00 1623.28 l 1859.19 13.3 12.0 8.5 DJ US TSM Monday, November 27 Tuesday, November 28
SmallCap 600 930.89 909.07 927.25 18.34 2.02 808.59 l 927.81 12.4 10.7 10.6 s 272.32, or 1.02% Auction of 13 and 26 week bills; Auction of 4 week bill;
Other Indexes last week announced on November 22; settles on November 30announced on November 27; settles on November 30
Russell 2000 1524.18 1492.93 1519.16 26.34 1.76 1313.80 l 1519.16 12.8 11.9 8.6 Auction of 2 year note; Auction of 7 year note;
0.97 l 12430.52 announced on November 22; settles on November 30announced on November 22; settles on November 30
NYSE Composite 12431.69 12294.96 12421.94 119.05 10808.63 14.2 12.3 4.0
Value Line 550.25 542.63 549.04 6.28 1.16 496.60 l
549.04 8.7 8.5 2.9 26975 Auction of 5 year note;
announced on November 22; settles on November 30
NYSE Arca Biotech 4225.66 4106.03 4217.84 67.83 1.63 3075.02 l
4304.77 25.3 37.2 7.4
NYSE Arca Pharma 538.74 531.24 538.23 3.71 0.69 463.78 l 560.52 13.5 11.8 -0.3 26850
KBW Bank 100.01 98.88 98.92 -0.27 -0.27 85.30 l 102.31 13.8 7.8 10.5 Public and Municipal Finance
PHLX§ Gold/Silver 82.15 79.69 81.11 0.24 0.29 73.03 l 96.72 2.5 2.9 3.7 Deals of $ 150 million or more expected this week
26725
PHLX§ Oil Service 132.74 129.57 131.64 0.33 0.25 117.79 l 192.66 -21.5 -28.4 -19.0 Final Total Rating Bookrunner/
PHLX§ Semiconductor 1342.05 1311.35 1341.69 34.76 2.66 836.79 l 1341.69 50.6 48.0 26.1 Sale maturity Issuer ($mil.) Fitch Moody’s S&P Bond Counsel(s)
CBOE Volatility 12.08 8.56 9.67 -1.76 -15.40 9.14 l 16.04 -21.6 -31.1 -8.5 26600
17 20 21 22 23 24 Nov. 28 Dec. 1, 2042 Illinois 750.0 N.R. N.R. N.R. Preliminary/

Philadelphia Stock Exchange Sources: SIX Financial Information; WSJ Market Data Group November
Chapman and Cutler LLP

International Stock Indexes Commodities and Nov. 29 June 1, 2030 Washington 190.1 N.R. N.R. N.R. Preliminary/

Latest Week 52-Week Range YTD

Currencies Last Week YTD
Suburban McKennon
Region/Country Index Close % chg Low Close High % chg Sanitary Dt Shelton & Henn
Close Net chg %Chg % chg
World The Global Dow 2993.71 1.44 2455.59 • 2993.71 18.3 DJ Commodity 615.71 2.62 0.43 8.54 Nov. 30 prelim. Washington 499.1 N.R. N.R. N.R. Preliminary/
DJ Global Index 389.48 1.38 318.80 • 389.48 19.5
TR/CC CRB Index 192.22 1.83 0.96 -0.15 K&L Gates LLP
DJ Global ex U.S. 263.11 1.78 208.83 • 263.11 23.0
Crude oil, $ per barrel 58.95 2.24 3.95 9.74
Americas DJ Americas 626.51 1.01 529.05 • 626.51 15.9
Natural gas, $/MMBtu 2.813 -0.28 -9.17 -24.46 Dec. 1 prelim. Central Utah 185.4 N.R. N.R. N.R. George K
Brazil Sao Paulo Bovespa 74157.37 0.98 57110.99 • 76989.79 23.1
Gold, $ per troy oz. 1286.70 -9.10 -0.70 11.89 Wtr Baum &
Canada S&P/TSX Comp 16108.09 0.68 14951.88 • 16131.79 5.4
Conservancy Dt Company Inc/—
Mexico S&P/BMV IPC 47941.88 0.18 44555.26 • 51713.38 5.0 U.S. Dollar Index 92.76 -0.91 -0.97 -9.25
Chile Santiago IPSA 3820.81 –6.57 3137.71 • 4255.93 18.5 WSJ Dollar Index 86.41 -0.68 -0.78 -7.02
Dec. 1 prelim. Clark- SD 315.3 N.R. N.R. N.R. J P Morgan
EMEA Stoxx Europe 600 386.63 0.74 339.36 • 396.77 7.0 Euro, per dollar 0.8381 -0.0099 -1.16 -11.83
Securities LLC/—
Stoxx Europe 50 3170.49 1.05 2810.21 • 3276.11 5.3 Yen, per dollar 111.57 -0.54 -0.48 -4.65
Eurozone Euro Stoxx 389.89 0.89 323.64 • 400.44 11.3 U.K. pound, in dollars 1.33 0.0116 0.88 8.00 Dec. 1 prelim. Delaware City- 360.0 N.R. N.R. N.R. Citi/—
Euro Stoxx 50 3581.23 0.95 3015.13 • 3697.40 8.8 52-Week Ohio
Austria ATX 3328.48 0.42 2485.18 • 3445.23 27.1 Low Close(l) High % Chg
Belgium Bel-20 3985.46 0.79 3427.61 • 4118.51 10.5
DJ Commodity 532.01 l 616.58 11.39 Dec. 1 prelim. Denver City 252.5 N.R. N.R. N.R. Raymond
France CAC 40 5390.46 1.34 4510.39 • 5517.97 10.9
and Co- James/—
3.49
Germany DAX 13059.84 0.51 10513.35 • 13478.86 13.8 TR/CC CRB Index 166.50 l 195.14
Colorado
Greece Athex Composite 723.18 1.50 604.06 • 858.08 12.4 Crude oil, $ per barrel 42.53 l 58.95 27.99
Israel Tel Aviv 1432.71 1.93 1363.50 • 1478.96 –2.6 Natural gas, $/MMBtu 2.56 l 3.93 -8.82
Dec. 1 prelim. Florida 600.0 N.R. N.R. N.R. M. Stanley/—
Italy FTSE MIB 22416.31 1.46 16217 • 23046 16.5 Gold, $ per troy oz. 1127.80 l 1346.00 9.21
Netherlands AEX 540.63 0.75 449.60 • 555.22 11.9 Development Fin
Portugal PSI 20 5283.35 0.47 4392.12 • 5475.67 12.9 U.S. Dollar Index 91.35 l 103.25 -8.61
Russia RTS Index 1166.09 2.97 973.33 • 1195.61 1.2 WSJ Dollar Index 84.49 l 93.56 -5.90
Dec. 1 prelim. Houston Co- 610.0 N.R. N.R. N.R. Goldman &
South Africa FTSE/JSE All-Share 60323.95 0.33 48935.90 • 61211.52 19.1 Euro, per dollar 0.83 l 0.96 -11.24
Texas Co/—
Spain IBEX 35 10053.50 0.43 8607.1 • 11135.4 7.5
Yen, per dollar 107.84 l 118.18 -1.46
Sweden SX All Share 577.11 –0.04 514.43 • 600.20 8.0
l 6.85
Dec. 1 prelim. Iowa Finance 346.0 N.R. N.R. N.R. BoA Merrill/—
Switzerland Swiss Market 9325.60 1.55 7779.11 • 9325.60 13.5 U.K. pound, in dollars 1.20 1.36 Authority
U.K. FTSE 100 7409.64 0.39 6730.72 • 7562.28 3.7
Asia-Pacific Real-time U.S. stock Dec. 1 prelim. Long Island 350.0 N.R. N.R. N.R. Citi/—
Australia
China
S&P/ASX 200
Shanghai Composite
5982.60
3353.82 –0.86
0.42 5400.4
3052.79 •
• 6049.4
3447.84
5.6
8.1 WSJ
.COM
quotes are available on
WSJ.com. Track most-
Power
Authority
Hong Kong Hang Seng 29866.32 2.29 21574.76 • 30003.49 35.8 active stocks, new
India S&P BSE Sensex 33679.24 1.01 25807.10 • 33731.19 26.5 highs/lows, mutual Dec. 1 prelim. Maryland 426.0 N.R. N.R. N.R. BoA Merrill/—
Japan Nikkei Stock Avg 22550.85 0.69 18274.99 • 22937.60 18.0 funds and ETFs. Stadium
Malaysia FTSE Bursa Malaysia KLCI 1717.23 –0.26 1617.15 • 1792.35 4.6 Plus, get deeper money-flows data and Authority
Singapore Straits Times 3442.15 1.77 2859.33 • 3442.15 19.5 email delivery of key stock-market
South Korea Kospi 2544.33 0.41 1963.36 • 2557.97 25.6 data. Dec. 1 June 15, 2047 NYS 323.6 N.R. N.R. N.R. RBC Cptl Mkt/
Taiwan Weighted 10854.09 1.42 9078.64 • 10854.57 17.3
All are available free at Environmental Facs SquirePattonBoggsLLP/DSeaton&Associates
Source: SIX Financial Information;WSJ Market Data Group WSJMarkets.com
Dec. 1 prelim. Pennsylvania 400.0 N.R. N.R. N.R. BoA Merrill/—
Hghr Ed
Consumer Rates and Returns to Investor Benchmark Yields and Rates Facs Auth
U.S. consumer rates Selected rates Treasury yield curve Forex Race
Yen, euro vs. dollar; dollar vs. Dec. 1 prelim. PennsylvaniaStateUniversity 200.0 N.R. N.R. N.R. BoA Merrill/—
A consumer rate against its New car loan Yield to maturity of current bills,
benchmark over the past year notes and bonds major U.S. trading partners
Bankrate.com avg†: 3.00% Dec. 1 prelim. San Francisco 316.8 N.R. N.R. N.R. Hilltop
Think Mutual Bank 1.89% 3.75% 10%
City/Co- Securities Inc/—
t
4.00% s
Rochester, MN 800-288-3425 Euro California
Prime rate 3.00 5
UniBank for Savings 2.24%
3.50 Dec. 1 prelim. Texas A&M 158.8 N.R. N.R. N.R. Goldman &
Whitinsville, MA 800-578-4270 2.25 0
s University Co/—
TrustCo Bank 2.37% Friday
t

3.00 Yen
t 1.50 –5 System
Orlando, FL 407-422-7129
New car loan 2.50 De Witt Savings Bank 2.45% 0.75 –10 s Dec. 1 prelim.
One year ago Texas A&M 360.0 N.R. N.R. N.R. Barclays/—
t

Clinton, IL 217-935-6342 WSJ Dollar index

2.00 0.00 –15 University
D J FMAM J J A S O N Lake City Bank 2.49% 1 3 6 1 2 3 5 710 30 2017 System
2017 Warsaw, IN 888-522-2265 month(s) years
Yield/Rate (%) 52-Week Range (%) 3-yr chg maturity Dec. 1 prelim. Univ of 437.7 N.R. N.R. N.R. Wells Fargo &
Interest rate Last (l)Week ago Low 0 2 4 6 8 High (pct pts) Sources: Ryan ALM; Tullett Prebon; WSJ Market Data Group
Colorado Bd of Co/—
Federal-funds rate target 1.00-1.25 1.00-1.25 0.25 l 1.25 1.00 Regents
Prime rate* 4.25 4.25 3.50 l 4.25 1.00
Corporate Borrowing Rates and Yields
Libor, 3-month 1.47 1.44 0.93 l 1.47 1.23 Spread +/- Treasurys, Dec. 1 prelim. Univ of Texas 253.5 N.R. N.R. N.R. Barclays/—
Yield (%) in basis pts, 52-wk Range Total Return
Money market, annual yield 0.33 0.32 0.26 l 0.36 -0.10 Bond total return index Last Wk ago Last Low High 52-wk 3-yr Sys Bd of
Five-year CD, annual yield 1.49 1.48 1.19 l 1.49 -0.07 Regents
10-yr Treasury, Ryan ALM 2.342 2.352 2.32 1.78
30-year mortgage, fixed† 3.89 3.90 3.73 l 4.33 -0.11
DJ Corporate 3.129 3.162 6.09 3.97
15-year mortgage, fixed† 3.29 3.30 2.99 l 3.50 0.09 Dec. 1 prelim. Wisconsin 369.5 N.R. N.R. N.R. RBC Cptl
Aggregate, Barclays Capital 2.650 2.660 37 35 47 3.65 2.38
Jumbo mortgages, $424,100-plus† 4.28 4.26 4.21 l 4.88 -0.02 Mkt/—
High Yield 100, Merrill Lynch 5.520 5.587 345 307 436 8.146 4.051
Five-year adj mortgage (ARM)† 3.70 3.55 3.20 l 4.03 0.20
Fixed-Rate MBS, Barclays 2.870 2.890 24 12 34 2.60 2.00
New-car loan, 48-month 3.00 2.99 2.85 l 3.36 -0.19 Dec. 1 prelim. Wisconsin Hlth 273.2 N.R. N.R. N.R. J P Morgan
Bankrate.com rates based on survey of over 4,800 online banks. *Base rate posted by 70% of the nation's largest Muni Master, Merrill 2.132 2.045 8 -4 18 4.566 2.564
& Ed Fac Auth Securities LLC/—
banks.† Excludes closing costs.
Sources: SIX Financial Information; WSJ Market Data Group; Bankrate.com
EMBI Global, J.P. Morgan 5.559 5.587 319 303 393 10.349 5.661
(WHEFA)
Sources: J.P. Morgan; Ryan ALM; S&P Dow Jones Indices; Barclays Capital; Merrill Lynch
Source:Thomson Reuters/Ipreo
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. * * NY Monday, November 27, 2017 | B9

CLOSED-END FUNDS
wsj.com/funds

Listed are the 300 largest closed-end funds as 52 wk 52 wk 52 wk Prem12 Mo 52 wk

measured by assets. Prem Ttl Prem Ttl Prem Ttl Fund (SYM) NAV Close /Disc Yld Prem Ttl
Closed-end funds sell a limited number of shares and Fund (SYM) NAV Close /Disc Ret Fund (SYM) NAV Close /Disc Ret Fund (SYM) NAV Close /Disc Ret Fund (SYM) NAV Close /Disc Ret
invest the proceeds in securities. Unlike open-end Blkrck MunHl NJ Qlty MUJ 15.57 14.41 -7.5 5.6
funds, closed-ends generally do not buy their shares ASA Gold & Prec Metals ASA 13.07 11.23 -14.1 4.7 John Hancock Finl Opps Fd BTO 35.93 35.65 -0.8 10.8 AllianzGI Equity & Conv NIE 23.22 21.29 -8.3 22.0 BlRk MuHldg NY Qlty MHN 14.72 13.84 -6.0 5.0 Wildermuth Endwmnt Str 12.83 NA NA 11.6
back from investors who wish to cash in their holdings. Wildermuth Endwmnt S:C 12.66 NA NA 10.7
Instead, fund shares trade on a stock exchange. BlkRk Enh Cap Inco CII 16.77 16.00 -4.6 26.3 Macquarie Glbl Infrstrctr MGU 28.06 24.86 -11.4 36.2 Calamos Conv Hi Inco Fd CHY 11.94 11.93 -0.1 27.4 BlkRk MuniYld CA Fd MYC 15.47 15.00 -3.0 5.1
a-The NAV and market price are ex dividend. b-The BlkRk Engy Res Tr BGR 15.00 13.56 -9.6 2.7 NeubergerBermanMLPIncm NML 9.13 8.37 -8.3 -3.2 Calamos CHI 11.33 11.52 +1.7 28.6 BlkRk MuniYld CA Quality MCA 15.61 14.77 -5.4 5.1 Wildermuth Endwmnt S:I 12.89 NA NA NS
NAV is fully diluted. c-NAV is as of Thursday’s close. d- BlackRock Enh Eq Div Tr BDJ 9.73 9.04 -7.1 20.1 Neubrgr Brm Rl Est Sec Fd NRO 5.80 5.44 -6.2 14.3 World Equity Funds BlkRk MuniYld MI Qlty MIY 15.35 14.06 -8.4 5.5 Income Preferred Stock Funds
NAV is as of Wednesday’s close. e-NAV assumes rights
BlackRock Enh Gl Div Tr BOE 14.36 13.50 -6.0 25.2 Nuveen Dow 30 Dynamic DIAX 18.59 17.99 -3.2 29.0 Alpine Tot Dyn Div AOD 10.01 9.09 -9.2 31.0 MultiStrat Gro & Inc:A 15.29 NA NA 4.3
offering is fully subscribed. f-Rights offering in process. BlRk Muyld NY Qlty MYN 14.10 12.93 -8.3 5.0
g-Rights offering announced. h-Lipper data has been BlkRk Intl Grwth&Inco BGY 7.06 6.60 -6.5 30.3 Nuveen Core Eq Alpha JCE 16.40 16.14 -1.6 29.5 Cdn Genl Inv CGI 32.78 23.56 -28.1 32.6 MultiStrat Gro & Inc:C 14.96 NA NA 3.5
Eaton Vance CA Mun Bd EVM 12.25 11.75 -4.1 4.9 MultiStrat Gro & Inc:I 15.48 NA NA 4.5
adjusted for rights offering. j-Rights offering has
BlkRk Health Sci BME 35.39 35.89 +1.4 13.9 Nuveen Diversified Div JDD 13.12 12.16 -7.3 19.8 China Fund CHN 24.42 22.19 -9.1 42.6 Invesco CA Value Mun Incm VCV 13.34 12.62 -5.4 5.0
expired, but Lipper data not yet adjusted. l-NAV as of
Clough Global Opp Fd GLO 12.41 11.26 -9.3 39.9 MultiStrat Gro & Inc:L 15.07 NA NA 3.8
previous day. o-Tender offer in process. v-NAV is BlackRck Rscs Comm Str Tr BCX 10.19 9.03 -11.4 17.8 Nuveen Engy MLP Fd JMF 10.69 10.39 -2.8 -14.7 Invesco PA Value Mun Incm VPV 13.98 12.08 -13.6 5.1
EtnVncTxAdvGblDiv ETG 18.22 17.14 -5.9 31.3 The Relative Value:CIA VFLEX 25.45 NA NA NS
converted at the commercial Rand rate. w-Convertible BlackRock Science & Tech BST 28.87 27.29 -5.5 53.7 NuvNASDAQ100DynOver QQQX 23.21 24.35 +4.9 36.6 Invesco Inv Grade NY Muni VTN 14.50 13.74 -5.2 5.0 Convertible Sec's. Funds
Note-NAV (not market) conversion value. y-NAV and EatonVance TxAdv Opport ETO 24.58 24.59 0.0 33.5
market price are in Canadian dollars. NA signifies that BlackRock Utility & Infr BUI 21.32 21.27 -0.2 22.2 Nuveen Real Est Incm Fd JRS 11.58 11.09 -4.2 17.8 Nuveen CA AMT-Free Qual NKX 15.73 15.35 -2.4 5.0 Calmos Dyn Conv and Inc CCD 21.12 20.87 -1.2 18.4
the information is not available or not applicable. NS CBREClarionGlblRlEstIncm IGR 8.90 7.80 -12.4 15.4 NuvS&P500DynOverwrite SPXX 16.51 NA 24.5 First Trust Dynamic Eur FDEU 18.65 NA 37.0 Nuveen CA Muni Value NCA 10.41 10.51 +1.0 3.9 World Equity Funds
signifies fund not in existence of entire period.
Central Fund of Canada CEF 13.64 13.38 -1.9 14.1 NuveenS&P500Buy-Write BXMX 14.43 14.15 -1.9 16.7 Gabelli Glbl Multimedia GGT 9.42 8.79 -6.7 29.5
12 month yield is computed by dividing income Nuveen CA Quality Muni NAC 15.59 14.40 -7.6 5.5 BMO LGM Front ME 10.42 NA NA 16.1
ClearBridge Amer Engy CBA 7.36 NA -7.7 Reaves Utility Fund UTG 33.16 30.81 -7.1 13.6 GDL Fund GDL 11.62 9.90 -14.8 8.9 CalamosGlbTotRet CGO 13.61 14.19 +4.3 26.5
dividends paid (during the previous twelve months for Nuveen MD Qual Muni NMY 14.50 12.64 -12.8 5.0
periods ending at month-end or during the previous ClearBridge Engy MLP Fd CEM 12.74 NA -9.7 Tekla Hlthcr Investors HQH 24.07 22.72 -5.6 3.8 India Fund IFN 31.27 27.44 -12.2 32.8
Nuveen MI Qual Muni NUM 15.29 13.33 -12.8 4.8 Prem12 Mo
fifty-two weeks for periods ending at any time other
Clearbridge Engy MLP Opp EMO 10.34 NA -12.0 Tekla Healthcare Opps Fd THQ 18.94 17.32 -8.6 13.6 Japan Sml Cap JOF 14.93 13.24 -11.3 38.3
than month-end) by the latest month-end market price Nuveen NJ Qual Muni NXJ 15.77 13.57 -14.0 5.2 Fund (SYM) NAV Close /Disc Yld
adjusted for capital gains distributions. Clearbridge Engy MLP TR CTR 11.02 NA -3.8 Tekla Life Sciences HQL 19.91 19.36 -2.8 13.6 Korea Fund KF 51.02 44.64 -12.5 38.9
Nuveen NY AMT-Free NRK 14.34 12.95 -9.7 4.9 U.S. Mortgage Bond Funds
Source: Lipper
Cohen & Steers Infr Fd UTF 25.83 23.21 -10.1 28.7 Tekla World Hlthcr Fd THW 14.49 13.44 -7.2 10.0 Mexico Fund MXF 16.05 NA 13.1
Morgan-Stanley Asia-Pac APF 21.01 18.30 -12.9 35.0 Nuveen NY Qual Muni NAN 14.97 13.97 -6.7 5.1 Vertical Capital Income 12.69 NA NA 3.2
Friday, November 24, 2017 C&S MLP Incm & Engy Opp MIE 10.00 9.20 -8.0 -3.0 Tortoise Energy TYG 23.39 25.71 +9.9 -9.5
MS China a Shr Fd CAF 28.39 24.20 -14.8 33.3 Nuveen OH Qual Muni NUO 16.53 14.77 -10.6 4.7 Loan Participation Funds
52 wk Cohen & Steers Qual Inc RQI 13.80 12.68 -8.1 19.6 Tortoise MLP Fund NTG 15.65 15.88 +1.5 -6.3
Prem Ttl MS Emerging Fund MSF 20.31 17.74 -12.7 34.2 Nuveen PA Qual Muni NQP 15.13 13.34 -11.8 5.2 504 Fund 9.79 NA NA 3.7
CohnStrsPfdInco RNP 23.07 20.99 -9.0 22.7 Voya Gl Equity Div IGD 8.26 7.88 -4.6 23.7 Nuveen VA Qual Muni NPV 14.40 13.02 -9.6 4.3 FedProj&TrFinanceTender 10.07 NA NA NS
Fund (SYM) NAV Close /Disc Ret
Cohen & Steers TR RFI 13.57 12.71 -6.3 14.3 Income Preferred Stock Funds
MS India Invest IIF 40.15 35.97 -10.4 44.9
New Germany Fund GF 21.89 19.47 -11.1 58.8 PIMCO California Muni PCQ 14.07 17.18 +22.1 5.3 Invesco Sr Loan A 6.65 NA NA 4.2
General Equity Funds CLSeligmn Prem Tech Gr Fd STK 23.13 23.89 +3.3 40.4 Calamos Strat Fd CSQ 12.77 12.19 -4.5 30.8 Invesco Sr Loan B 6.65 NA NA 4.2
Swiss Helvetia Fund SWZ 14.05 12.61 -10.2 27.2 PIMCO California Mun II PCK 8.59 10.11 +17.7 5.6
Adams Divers Equity Fd ADX 17.03 14.77 -13.3 29.1 Duff & Phelps DNP 10.02 11.35 +13.2 19.9 Cohen & Steers Dur Pfd LDP 27.31 26.18 -4.1 18.4 Invesco Sr Loan C 6.66 NA NA 3.5
Boulder Growth & Income BIF 12.36 10.49 -15.1 24.0 Templeton Dragon TDF 24.89 22.01 -11.6 41.0 52 wk
Duff&PhelpsGblUtilIncFd DPG 17.68 15.65 -11.5 12.2 Cohen & Strs Sel Prf Inco PSF 27.96 27.96 0.0 19.8 Prem Ttl Invesco Sr Loan IB 6.65 NA NA 4.4
Central Securities CET 32.40 26.88 -17.0 28.3 Templeton Emerging EMF 19.89 17.72 -10.9 52.1
Eaton Vance Eqty Inco Fd EOI 14.73 14.29 -3.0 25.4 FT Interm Duration Pfd FPF 24.82 NA 24.7 Fund (SYM) NAV Close /Disc Ret Invesco Sr Loan IC 6.65 NA NA 4.3
CohSteer Opprtnty Fd FOF 13.69 12.89 -5.8 18.0 Virtus Total Return Fund ZF 13.48 12.67 -6.0 26.5
Eaton Vance Eqty Inco II EOS 15.62 15.09 -3.4 21.2 Flaherty & Crumrine Dyn DFP 26.47 26.74 +1.0 25.5 Invesco Sr Loan Y 6.65 NA NA 4.4
Cornerstone Strategic CLM 13.42 14.89 +11.0 20.3 Voya Infr Indls & Matls IDE 16.74 16.19 -3.3 25.4 General Equity Funds
EtnVncRskMngd ETJ 9.97 9.20 -7.7 13.3 Flaherty & Crumrine Pfd FFC 20.49 20.86 +1.8 15.2 RiverNorth MP Lending RMPLX 25.16 NA NA 6.6
EtnVnc TaxAdvDiv EVT 22.97 22.53 -1.9 20.5
Wells Fargo Gl Div Opp EOD 6.27 NA 31.3 Specialized Equity Funds
Sierra Total Return:T SRNTX 24.88 NA NA NS
Etn Vnc Tax Mgd Buy-Write ETB 16.26 16.63 +2.3 3.1 John Hancock Pfd Income HPI 21.38 21.39 0.0 15.3 Griffin Inst Access RE:A 27.01 NA NA 6.9
Gabelli Dividend & Incm GDV 24.02 22.50 -6.3 20.2 Eaton Vance BuyWrite Opp ETV 14.90 15.18 +1.9 10.5 John Hancock Pfd II HPF 21.13 21.20 +0.3 14.9 Prem12 Mo Voya Senior Income:A 12.50 NA NA 5.3
Fund (SYM) NAV Close /Disc Yld Griffin Inst Access RE:C 26.57 NA NA 6.1 Voya Senior Income:C 12.48 NA NA 4.8
Gabelli Equity Trust GAB 6.51 6.13 -5.8 19.9 Eaton Vance Tax-Mng Div ETY 12.10 11.86 -2.0 24.5 John Hancock Pfd Inc III HPS 18.87 18.31 -3.0 15.5
U.S. Mortgage Bond Funds Griffin Inst Access RE:I 27.17 NA NA 7.2 Voya Senior Income:I 12.46 NA NA 5.6
Genl American Investors GAM 39.68 33.52 -15.5 18.7 EatonVanceTax-MngdOpp ETW 11.56 11.89 +2.9 23.8 JHancock Pr Div PDT 15.92 16.91 +6.2 30.9 Griffin Inst Access RE:L 26.99 NA NA NS
Guggenheim Enh Fd GPM 8.93 8.77 -1.8 22.9 EtnVncTxMngGlDvEqInc EXG 9.39 9.30 -1.0 25.1 LMP Cap & Inco Fd SCD 13.82 NA 14.0 BlackRock Income Trust BKT 6.64 6.14 -7.5 5.1 Voya Senior Income:W 12.51 NA NA 5.6
Griffin Inst Access RE:M 26.88 NA NA 6.4
HnckJohn TxAdv HTD 26.25 25.76 -1.9 25.9 Fiduciary/Clymr Opp Fd FMO 11.32 10.96 -3.2 -18.2 Nuveen Pfd & Incm Opps Fd JPC 10.76 10.46 -2.8 19.4 Nuveen Mtg Opp Term Fd JLS 26.54 25.55 -3.7 5.2 High Yield Bond Funds
NexPointRlEstStrat;A 20.73 NA NA 7.9 Griffin Inst Access Cd:A NA NA NA NS
Liberty All-Star Equity USA 6.67 6.07 -9.0 30.4 FT Energy Inc & Growth Fd FEN 22.34 22.19 -0.7 -5.7 Nuveen Pfd & Incm Secs Fd JPS 10.37 10.29 -0.8 26.8 Investment Grade Bond Funds
NexPointRlEstStrat;C 20.67 NA NA 7.1 Griffin Inst Access Cd:C NA NA NA NS
Royce Micro-Cap RMT 10.66 9.36 -12.2 22.5 FstTrEnhEqtIncFd FFA 16.53 15.70 -5.0 24.6 Nuveen Preferred & Incm JPI 25.94 25.25 -2.7 17.6 Blackrock Core Bond Tr BHK 14.90 14.10 -5.4 5.5
NexPointRlEstStrat;Z 20.68 NA NA 8.1 Griffin Inst Access Cd:F NA NA NA NS
Royce Value Trust RVT 17.82 16.00 -10.2 28.4 First Tr Engy Infr Fd FIF 18.50 18.00 -2.7 4.1 BlkRk Credit Alloc Incm BTZ 14.83 13.29 -10.4 6.3
TCW Strategic Income Fund TSI 5.61 NA 13.3 Resource RE Div Inc:A 10.16 NA NA 6.6 Griffin Inst Access Cd:I NA NA NA NS
Source Capital SOR 44.31 40.33 -9.0 16.1 First Tr MLP & Engy Incm FEI 13.94 14.13 +1.4 -4.4 Virtus Global Dividend ZTR 12.94 13.45 +3.9 39.4 John Hancock Income Secs JHS 15.56 14.75 -5.2 5.4
Resource RE Div Inc:C 10.15 NA NA 5.8 Griffin Inst Access Cd:L NA NA NA NS
Tri-Continental TY 29.47 26.27 -10.9 25.1 Gabelli Hlthcr & Well GRX 11.34 9.90 -12.7 6.9 Convertible Sec's. Funds
MFS Inc Tr MIN 4.42 4.18 -5.4 9.2 Resource RE Div Inc:D 10.31 NA NA 6.0
WstAstClymr InfLnkd Fd WIW NA 11.34 NA 3.6 PIMCO Flexible Cr I;Inst 10.52 NA NA NS
Specialized Equity Funds Gabelli Utility Tr GUT 5.53 7.08 +28.1 26.4 AdvntClymrFd AVK 17.56 15.94 -9.2 19.9 Resource RE Div Inc:I 10.59 NA NA 6.6 PionrILSInterval 9.58 NA NA 10.5
WstAssetClymr InflLnk Sec WIA NA 11.61 NA 3.3 Resource RE Div Inc:L 10.16 NA NA NS
Adams Natural Rscs Fd PEO 21.83 18.73 -14.2 1.4 GAMCOGlblGoldNatRscs&Inc GGN 5.41 5.38 -0.6 11.4 AllianzGI Conv & Incm NCV 6.63 7.01 +5.7 23.2 WA Middle Mkt Dbt NA NA NA 11.2
Loan Participation Funds Resource RE Div Inc:T 10.13 NA NA 5.8
AllnzGI NFJ Div Interest NFJ 14.70 13.52 -8.0 15.3 GoldmanSachsMLPIncOpp GMZ 8.28 NA -4.1 AllianzGI Conv & Incm II NCZ 5.95 6.21 +4.4 24.9 WA Middle Mkt Inc WMF NA NA NA 11.2
Apollo Sr Fltg Rate Fd AFT 17.98 16.38 -8.9 7.4 Resource RE Div Inc:U 10.17 NA NA 6.6
AlpnGlblPrProp AWP 7.32 6.41 -12.4 36.7 Goldman Sachs MLPEnergy GER 5.65 NA -11.7 AllianzGI Div Incm ACV 22.82 22.20 -2.7 32.2 Other Domestic Taxable Bond Funds
BlkRk Debt Strat Fd DSU 12.69 11.66 -8.1 6.9 Resource RE Div Inc:W 10.32 NA NA 6.5 Capstone Church Capital 11.43 NA NA 1.5
BlackRock FR Incm Strat FRA 14.92 13.77 -7.7 5.6 SharesPost 100;A 26.47 NA NA -1.7 CION Ares Dvsfd Crdt;A NA NA NA NS
Blkrk FltRt InTr BGT 14.41 13.81 -4.2 5.3 26.47 NA NA NS
Borrowing Benchmarks | WSJ.com/bonds
SharesPost 100:I CION Ares Dvsfd Crdt;C NA NA NA NS
BlackstoneGSO Strat Cred BGB NA 15.79 NA 8.4 Tot Inc+ RE:A 29.67 NA NA 7.0 CION Ares Dvsfd Crdt;I NA NA NA NS
Blackstone GSO Sr Float BSL NA 17.26 NA 6.7 Tot Inc+ RE:C 28.89 NA NA 6.2 CNR Select Strategies 7.88 NA NA NS
Money Rates November 24, 2017 Eagle Point Credit ECC NA 19.15 NA 8.3
Eaton Vance FR Incm Tr EFT 15.46 14.18 -8.3 5.7
Tot Inc+ RE:I 30.01 NA NA 7.3 GL Beyond Income 3.69 NA NA NE
Tot Inc+ RE:L 29.63 NA NA NS Palmer Square Opp Income NA NA NA 5.0
Key annual interest rates paid to borrow or lend money in U.S. and international markets. Rates below are a EatonVnc SrFltRate EFR 15.13 14.11 -6.7 6.0 USQ Core Real Estate:I USQIX 25.26 NA NA NS Resource Credit Inc:A 11.19 NA NA 6.4
Eaton Vance Sr Incm Tr EVF 7.14 6.48 -9.2 5.6 USQ Core Real Estate:IS USQSX 25.26 NA NA NS Resource Credit Inc:C 11.30 NA NA 5.7
guide to general levels but don’t always represent actual transactions. First Trust Sr FR Fd II FCT 14.05 12.84 -8.6 6.1 Versus Cap MMgr RE Inc:F 27.64 NA NA 6.4 Resource Credit Inc:I 11.22 NA NA 6.7
FT Sr Floating Rate 2022 FIV 9.72 9.29 -4.4 NS Versus Cap MMgr RE Inc:I 27.71 NA NA 6.7 Resource Credit Inc:L 11.18 NA NA NS
Week —52-WEEK— Week —52-WEEK— Invesco Credit Opps Fund VTA 12.99 11.50 -11.5 7.1 Versus Capital Real Asst VCRRX 25.11 NA NA NS Resource Credit Inc:W 11.19 NA NA 6.3
Inflation Latest ago High Low Latest ago High Low Invesco Senior Income Tr VVR NA 4.37 NA 6.0
Oct. index Chg From (%)
Six month 1.65394 1.63211 1.65394 1.28878 Nuveen Credit Strt Inc Fd JQC 9.06 8.14 -10.2 7.4
level Sept. '17 Oct. '16 Treasury bill auction NuvFloatRteInco Fd JFR 11.50 10.98 -4.5 6.9
One year 1.93606 1.90622 1.93606 1.63900
U.S. consumer price index
4 weeks
13 weeks
1.130 1.045 1.300 0.340
1.285 1.240 1.285 0.480 Euro Libor
Nuv Float Rte Opp Fd JRO 11.42 10.85 -5.0 7.3
Nuveen Senior Income Fund NSL 6.82 6.48 -5.0 6.9
A Week in the Life of the DJIA
All items 246.663 –0.06 2.0 1.415 1.360 1.415 0.590 Pioneer Floating Rate Tr PHD 12.41 11.53 -7.1 6.0
26 weeks One month -0.402 -0.403 -0.376 -0.405 A look at how the Dow Jones Industrial Average component stocks
Core 253.638 0.28 1.8 Voya Prime Rate Trust PPR 5.65 5.08 -10.1 6.0
Three month -0.381 -0.379 -0.325 -0.381 did in the past week and how much each moved the index. The DJIA
Secondary market Six month -0.316 -0.313 -0.219 -0.322 High Yield Bond Funds
International rates AllianceBernstein Glbl AWF 13.90 12.59 -9.4 6.7 gained 199.75 points, or 0.86%, on the week. A $1 change in the price
One year -0.247 -0.239 -0.080 -0.251
Fannie Mae Barings Glbl Short Dur HY BGH 20.92 19.68 -5.9 8.9 of any DJIA stock = 6.89-point change in the average. To date, a
Week 52-Week
Latest ago High Low 30-year mortgage yields Euro interbank offered rate (Euribor) BlackRock Corp Hi Yd Fd HYT 12.22 11.03 -9.7 7.9 $1,000 investment on Dec. 31 in each current DJIA stock component
30 days 3.457 3.471 3.865 3.253 One month -0.372 -0.373 -0.366 -0.375 BlackRockDurInco Tr BLW 17.01 15.83 -6.9 7.8 would have returned $35,984, or a gain of 19.95%, on the $30,000
Prime rates 3.477 3.490 3.899 3.281 Three month -0.329 -0.329 -0.313 -0.332 Brookfield Real Assets RA 25.06 23.70 -5.4 NS
60 days
Credit Suisse High Yld DHY 2.77 2.83 +2.0 9.4
investment, including reinvested dividends.
U.S. 4.25 4.25 4.25 3.50 Six month -0.272 -0.274 -0.216 -0.276
Other short-term rates One year -0.186 -0.192 -0.076 -0.192 DoubleLine Incm Solutions DSL NA 20.25 NA 8.6 The Week’s Action
Canada 3.20 3.20 3.20 2.70 Dreyfus Hi Yd Strat Fd DHF 3.54 3.39 -4.2 8.8
Japan 1.475 1.475 1.475 1.475 Pct Stock price Point chg $1,000 Invested(year-end '16)
Value 52-Week Fst Tr Hi Inc Lg/Shrt Fd FSD 18.04 16.44 -8.9 8.3 chg (%) change in average* Company Symbol Close $1,000
Week 52-Week
Latest Traded High Low Guggenheim Strat Opps Fd GOF 19.71 21.61 +9.6 10.2
Policy Rates Latest ago high low 3.50 1.59 10.95 Verizon VZ $47.01 $924
DTCC GCF Repo Index Ivy High Income Opps Fund IVH 15.92 14.84 -6.8 9.4
Euro zone 0.00 0.00 0.00 0.00 Neuberger Berman HYS NHS 13.23 11.78 -11.0 7.4 2.83 4.82 33.19 Apple AAPL 174.97 1,535
Call money Treasury 1.219 25.200 1.366 0.264
Switzerland 0.50 0.50 0.50 0.50 NexPoint Credit Strat Fd NHF 25.60 23.84 -6.9 10.1 2.74 4.59 31.60 Home Depot HD 172.33 1,308
Britain 0.50 0.50 0.50 0.25 3.00 3.00 3.00 2.25 MBS 1.218 78.440 1.506 0.280 Nuveen Credit Opps 2022 JCO 9.92 9.82 -1.0 NS 1.96 2.15 14.80 Visa V 111.97 1,445
Australia 1.50 1.50 1.50 1.50 Open Implied Nuveen Gl Hi Incm Fd JGH 18.48 16.56 -10.4 8.2
Commercial paper (AA financial) 1.93 2.87 19.76 IBM IBM 151.84 950
Settle Change Interest Rate Nuveen High Incm Dec18 JHA 10.07 9.88 -1.9 5.2
Overnight repurchase 90 days n.a. 1.22 1.36 0.67 Nuveen High Incm Dec19 JHD 10.23 10.02 -2.1 5.8 0.59 4.06 CSCO 36.49
1.64 Cisco Systems 1,251
DTCC GCF Repo Index Futures Nuveen Hi Incm Nov 2021 JHB 10.10 9.89 -2.1 5.9
U.S. 1.19 1.21 1.38 0.24 Libor 1.57 1.80 12.39 Chevron CVX 116.51 1,030
Treasury Nov 98.795 unch. 6910 1.205 Pioneer High Income Trust PHT 10.76 9.79 -9.0 8.2
U.S. government rates One month 1.33756 1.28719 1.33756 0.60561 Treasury Dec 98.655 -0.010 2252 1.345 Prud Gl Shrt Dur Hi Yd GHY 16.36 14.51 -11.3 7.8 1.47 1.18 8.12 Exxon Mobil XOM 81.42 937
Three month 1.46763 1.44067 1.46763 0.93067 Treasury Jan 98.550 unch. 459 1.450 Prudentl Sh Dur Hi Yd Fd ISD 16.54 14.78 -10.6 7.7 1.43 2.39 16.46 McDonald’s MCD 169.11 1,417
Discount Wells Fargo Incm Opps Fd EAD NA 8.45 NA 8.7 1.38 3.62 24.93 Boeing BA 265.88 1,756
1.75 1.75 1.75 1.00 Wstrn Asset Glbl Hi Inco EHI NA 10.02 NA 8.7
Notes on data:
Wstrn Asset High Inco II HIX NA 6.98 NA 8.7 1.24 2.61 17.97 UnitedHealth Group UNH 212.51 1,343
Federal funds U.S. prime rate is the base rate on corporate loans posted by at least 70% of the 10 largest U.S. banks,
and is effective June 15, 2017. Other prime rates aren’t directly comparable; lending practices vary
Wstrn Asset Opp Fd HIO NA 5.00 NA 7.2 1.04 0.86 5.92 Microsoft MSFT 83.26 1,370
Effective rate 1.1700 1.1700 1.2000 0.3500 widely by location; Discount rate is effective June 15, 2017. DTCC GCF Repo Index is Depository West Asst HY Def Opp Fd HYI NA 15.17 NA 7.8
Other Domestic Taxable Bond Funds
0.93 1.26 8.68 Caterpillar CAT 137.39 1,526
High 1.3125 1.3125 1.3125 0.5625 Trust & Clearing Corp.'s weighted average for overnight trades in applicable CUSIPs. Value traded is in
billions of U.S. dollars. Federal-funds rates are Tullett Prebon rates as of 5:30 p.m. ET. Futures on the Apollo Tactical Incm Fd AIF 17.47 15.92 -8.9 8.8 0.88 2.02 13.91 3M MMM 231.38 1,326
Low 1.0000 1.0300 1.1600 0.2500 DTCC GCF Repo Index are traded on NYSE Liffe US. Ares Dynamic Credit Alloc ARDC NA 16.46 NA 6.9 0.59 0.42 2.89 DowDuPont DWDP 71.16 1,277
Bid 1.1600 1.1600 1.1700 0.3000
Sources: Federal Reserve; Bureau of Labor Statistics; DTCC; SIX Financial Information; Tullett Prebon Barings Corp Investors MCI NA 15.58 NA 3.7
Offer 1.1700 1.1700 1.1900 0.3200 Information, Ltd. BlackRock Multi-Sector IT BIT 19.93 18.19 -8.7 9.5 0.37 0.17 1.17 Coca-Cola KO 45.88 1,135
BlackRock Taxable Mun Bd BBN 23.96 23.17 -3.3 6.8 0.34 0.12 0.83 Pfizer PFE 35.49 1,135
Doubleline Oppor Credit DBL NA 22.31 NA 8.7 0.33 0.38 2.62 United Technologies UTX 116.91 1,092
Duff & Phelps Utl & Cp Bd DUC 9.68 8.97 -7.3 6.5
Insider-Trading Spotlight EtnVncLtdFd EVV 15.04 13.59 -9.6 7.1 0.27 0.12 0.83 Intel INTC 44.75 1,268
Trading by ‘insiders’ of a corporation, such as a company’s CEO, vice president or director, potentially conveys Franklin Ltd Duration IT FTF NA 11.78 NA 11.4 0.22 0.13 0.90 Nike NKE 59.32 1,179
GuggenheimTaxableMuni GBAB 23.44 22.36 -4.6 6.8
new information about the prospects of a company. Insiders are required to report large trades to the SEC Invesco High Incm 2023 IHIT 10.06 10.05 -0.1 NS 0.18 0.18 1.24 J.P. Morgan Chase JPM 98.32 1,165
within two business days. Here’s a look at the biggest individual trades by insiders, based on data received by John Hancock Investors JHI 18.69 17.65 -5.6 7.2 0.02 0.02 0.14 Procter & Gamble PG 88.45 1,085
Thomson Financial on November 24, and year-to-date stock performance of the company KKR Income Opps Fund KIO NA 16.32 NA 9.4 0.01 0.01 0.07 Johnson & Johnson JNJ 138.01 1,221
MFS Charter MCR 9.26 8.45 -8.7 8.7
KEY: B: beneficial owner of more than 10% of a security class CB: chairman CEO: chief executive officer CFO: chief financial officer –0.07 –0.09 –0.62 Travelers TRV 129.83 1,079
MFS Multimkt MMT 6.62 6.10 -7.9 8.7
CO: chief operating officer D: director DO: director and beneficial owner GC: general counsel H: officer, director and beneficial owner –0.11 –0.02 –0.14 General Electric GE 18.19 591
Nuveen Build Am Bd Fd NBB 22.53 21.74 -3.5 5.7
I: indirect transaction filed through a trust, insider spouse, minor child or other O: officer OD: officer and director P: president UT:
PIMCO Corporate & Incm PTY 14.97 16.54 +10.5 10.3 –0.22 –0.21 –1.45 American Express AXP 93.48
unknown VP: vice president Excludes pure options transactions 1,282
PIMCO Corporate & Incm PCN 15.21 16.83 +10.7 10.4
PIMCO HiInco PHK NA 7.51 NA 13.1 –0.77 –0.80 –5.51 Walt Disney DIS 102.64 992
Biggest weekly individual trades PIMCO Inco Str Fd PFL NA 11.68 NA 8.9 –0.87 –2.07 –14.25 Goldman Sachs GS 235.95 995
PIMCO Incm Strategy Fd II PFN NA 10.44 NA 8.9 –0.87 –0.85 –5.85 Wal-Mart Stores WMT 96.62 1,426
Based on reports filed with regulators this past week Putnam Mas Inco PIM 5.00 4.76 -4.8 6.5
Putnam Premier Income Tr PPT 5.55 5.22 -5.9 5.8 –1.54 –0.85 –5.85 Merck MRK 54.35 944
No. of shrs in Price range ($) $ Value
Date(s) Company Symbol Insider Title trans (000s) in transaction (000s) Close ($) Ytd (%) Wells Fargo Multi-Sector ERC NA 13.06 NA 9.4
*Based on Composite price. DJIA is calculated on primary-market price.
World Income Funds Source: WSJ Market Data Group; FactSet.
Buyers Abeerden Asia-Pacific FAX 5.42 4.92 -9.2 8.3
Etn Vnc Short Dur Fd EVG NA 13.80 NA 6.9
Nov. 21 General Electric GE J. Tisch DI 3,000 17.82-17.99 53,712 18.19 -42.4 Legg Mason BW Glbl Incm BWG NA 12.93 NA 8.3
Nov. 15 J. Flannery CEO 60 18.27 1,096 MS EmMktDomDebt EDD 8.87 7.73 -12.9 8.4
Nov. 20 F. D Souza D 55 17.94 987 PIMCO Dynamic Credit PCI 23.66 22.49 -4.9 11.4
Nov. 17-20 Pentair PNR E. Garden DI 385 68.33-68.94 26,307 69.16 23.3 PIMCODynamicIncomeFund PDI 29.09 30.25 +4.0 13.5
PIMCO Income Opportunity PKO 25.69 26.09 +1.6 9.9
Nov. 20-22 SandRidge Energy SD C. Icahn BI 1,257 16.11-17.40 20,548 18.90 -19.7
PIMCO Strat Income Fund RCS NA 8.84 NA 9.7
Notice to Warrantholders of
Nov. 20 Prospect Capital PSEC J. Barry CEO 996 6.98 6,948 6.80 -18.6 Templeton Emerging TEI 13.08 11.50 -12.1 4.5
Templeton Global GIM 7.40 6.50 -12.2 6.1
Tri-Continental Corporation
Nov. 16 Valeant Pharmaceuticals International VRX J. Paulson DI 344 14.40 4,956 16.57 14.1
Nov. 21 Drive Shack DS W. Edens D 483 6.00 2,896 5.94 58.0
Wstrn Asset Emerg Mkts EMD NA 15.36 NA 7.5 of Distribution from Net Assets
Wstrn Asset Gl Def Opp Fd GDO NA 18.12 NA 7.5
Nov. 15 W. Edens D 257 4.50 1,157 This notice is to inform Warrantholders of Tri‑Continental Corporation,
National Muni Bond Funds
Nov. 20-21 Entercom Communications ETM J. Field OD 180 11.63-11.79 2,113 12.00 -21.6 AllianceBrnstn NtlMun AFB 14.84 13.70 -7.7 4.6 as required by its Charter, that the Corporation, on November 24,
Nov. 16-17 Green Plains GPRE W. Hoovestol D 103 16.28-16.44 1,681 16.45 -40.9 Blackrock Invest BKN 15.85 14.63 -7.7 5.3 2017, declared a distribution of $0.4044 per share (comprised of
BlackRockMun2030Target BTT 24.10 22.38 -7.1 4.1 $0.3094 from ordinary income and $0.095 from long‑term capital
Nov. 20-21 American Assets Trust AAT E. Rady CEOI 40 39.32-39.38 1,580 39.64 -8.0
BlackRock Municipal Trust BFK 14.41 14.11 -2.1 5.7 gain) payable on December 29, 2017 to the holders of Common
Nov. 20 Everest Re Group RE W. Galtney DI 6 225.29 1,352 217.67 0.6 BlackRockMuni BLE 14.98 14.39 -3.9 6.1 Stock of record at the close of business on December 21, 2017. The
Nov. 16 Aramark ARMK S. Mehra D 20* 40.75 800 41.32 15.7 BlackRockMuni Tr BYM 15.13 14.10 -6.8 5.3 distribution will be paid in additional shares of Common Stock, or, at
BlkRk MuniAssets Fd MUA 14.13 15.11 +6.9 4.6 the option of the Common Stockholder, 75% in shares and 25% in
Nov. 20-22 Biglari Holdings BH S. Biglari DOI 2 331.95-334.97 690 339.44 -28.3 BlkRk Munienhanced MEN 11.85 12.18 +2.8 5.7 cash; 50% in shares and 50% in cash; or 100% in cash.
Nov. 17 Tallgrass Energy Partners TEP D. Dehaemers CEOI 15 43.63 654 43.04 -9.3 BlkRk MuniHldgs Inv MFL 14.62 15.08 +3.1 5.7
Nov. 21 D. Dehaemers CEOI 15 42.97 645 BlkRk MuniHldgs Qlty II MUE 13.99 13.92 -0.5 5.6 The number of shares of Common Stock that each Warrant is entitled
Nov. 16 JBG SMITH Properties JBGS C. Haldeman D 20 32.59 652 33.25 4.5 BlkRk MuniVest MVF 9.62 9.75 +1.3 5.8 to purchase and the price at which the shares are purchasable may
BlkRk MuniVest II MVT 15.20 15.53 +2.2 5.9 be adjusted, pursuant to the Corporation’s Charter, for additional
BlkRk MuniYield MYD 14.81 14.42 -2.6 6.0 shares of Common Stock issued in payment of the distribution.
Sellers BlkRk MuniYld Quality MQY 15.75 15.59 -1.0 5.6 However, there is no adjustment to be made for cash paid out to
Nov. 17-20 Wal-Mart Stores WMT S. Walton DOI 3,903 96.22-99.91 380,203 96.62 39.8 BlkRk MuniYld Qlty II MQT 13.83 13.07 -5.5 5.6 Common Stockholders, and cash payments will tend to reduce the
Nov. 17-20 J. Walton BI 3,903 96.22-99.91 380,203 BlRkMunyldQltyIII MYI 14.36 14.07 -2.0 5.8 net asset value of the Common Stock subsequently purchasable on
Nov. 17-20 A. Walton BI 3,903 96.22-99.91 380,203 Deutsche Mun Income Tr KTF 12.55 11.81 -5.9 6.6 the exercise of Warrants.
Nov. 20 Genpact G D. Humphrey DOI 8,500 30.26 257,216 31.84 30.8 Dreyfus Mun Bd Infr Fd DMB 14.19 13.15 -7.3 4.9
Dreyfus Strat Muni Bond DSM 8.33 8.47 +1.7 5.9 Each Warrant now entitles holders to purchase 24.19 shares of Tri‑
Nov. 16 Facebook FB J. Koum DI 594 179.26-179.63 106,577 182.78 58.9 Dreyfus Strategic Munis LEO 8.54 8.77 +2.7 5.9 Continental Common Stock at a price of $0.93 per share. If holders
Nov. 21 Paylocity Holding PCTY S. Sarowitz DO 1296* 46.14 59,804 48.22 60.7 Eaton Vance Mun Bd Fd EIM 13.59 12.62 -7.1 5.0 wish to exercise their Warrants in order to receive the December
Nov. 20 Appian APPN M. Barrett BI 2,821 19.49 54,972 21.16 41.0 Eaton Vance Mun Income EVN 13.30 12.46 -6.3 5.4 distribution, they should do so on or before December 18, 2017, in
Nov. 20 P. Barris BI 2,821 19.49 54,972 EV National Municipal Opp EOT 21.88 22.40 +2.4 4.7 order to ensure that they become a Common Stockholder of record
Nov. 20 F. Baskett BI 2,821 19.49 54,972 Invesco Adv Mun Incm II VKI 12.09 11.35 -6.1 5.8 by December 21, 2017.
Nov. 20 A. Florence BI 2,821 19.49 54,972 Invesco Mun Incm Opps Tr OIA 7.57 7.92 +4.6 5.2
Invesco Mun Opportunity VMO 13.46 12.42 -7.7 6.1 To exercise Warrants, complete and sign the Form of Election on the
Nov. 20 P. Kerins BI 2,821 19.49 54,972
Nov. 20 D. Mott BI 2,821 19.49 54,972 Invesco Municipal Trust VKQ 13.44 12.44 -7.4 5.9 back of the certificates. Then send the certificates, together with the
Nov. 20 S. Sandell BI 2,821 19.49 54,972 Invesco Qlty Mun Inco IQI 13.56 12.36 -8.8 5.5 necessary payment, to:
Nov. 20 P. Sonsini BI 2,821 19.49 54,972 Invesco Inv Grade Muni VGM 13.93 13.15 -5.6 5.8
Nov. 20 R. Viswanathan BI 2,821 19.49 54,972 Invesco Value Mun Incm Tr IIM 16.19 14.71 -9.1 5.0 Regular Mail Express Mail
Nov. 17 Splunk SPLK G. Sullivan D 592 79.03-81.78 47,886 84.10 64.4 MainStay DefinedTerm MMD 20.03 19.50 -2.6 5.6 Tri‑Continental Corporation Tri‑Continental Corporation
MFS Munl Inco MFM 7.34 6.86 -6.5 5.5 c/o Columbia Management c/o Columbia Management
Nov. 16 Starbucks SBUX H. Schultz OD 784 57.05 44,730 56.80 2.3 Nuveen AMT-Free Quality NEA 15.05 13.65 -9.3 5.4 Investment Services Corp. Investment Services Corp.
Nov. 20-22 Bank of New York Mellon BK E. Garden DI 800 52.52-52.60 42,088 52.23 10.2 Nuveen AMT-Free Mun NVG 16.42 15.43 -6.0 5.7 P.O. Box 8081 30 Dan Road, Suite 8081
Nuveen Mun Credit Incm Fd NZF 16.02 15.24 -4.9 5.9 Boston, MA 02266‑8081 Canton, MA 02021‑2809
* Half the transactions were indirect **Two day transaction
Nuveen Enhncd Mun Val Fd NEV 14.99 14.32 -4.5 5.7
p - Pink Sheets
Nuveen Intermed Dur Mun NID 13.76 13.17 -4.3 4.9 Checks should be drawn to the order of Tri‑Continental Corporation.
NuveenMuniIncoOpp Fd NMZ 13.51 13.71 +1.5 6.0 Any questions regarding Warrants or the distribution should be
Buying and selling by sector Nuveen Muni Value Fund NUV 10.27 10.09 -1.8 3.8 addressed to Tri‑Continental Corporation at the above‑listed
Nuveen Qual Mun Incm Fd NAD 15.40 13.99 -9.2 5.6
Based on actual transaction dates in reports received this past week addresses, or by calling 800.345.6611, Option 3. You can also visit
Nuveen Sel Tax Free NXP 15.37 14.84 -3.4 3.7
Nuveen Sel TF NXQ 14.78 14.25 -3.6 3.6
the Corporation’s website at investor.columbiathreadneedleus.com
Sector Buying Selling Sector Buying Selling PIMCO MuniFd PMF 12.79 13.05 +2.0 5.9
for information relating to the Corporation.
Pimco Muni Inc II PML 12.06 13.31 +10.4 5.9
Basic Industries 299,615 24,036,267 Finance 13,136,892 125,429,128 PIMCO Muni Inc III PMX 11.00 11.75 +6.8 5.9 November 27, 2017 Ryan C. Larrenaga, Secretary
Business services 141,262 49,274,977 Health care 5,142,527 160,678,570 Pioneer Mun Hi Inc Adv Tr MAV 11.82 11.49 -2.8 5.3
Capital goods 0 0 Industrial 2,108,894 95,526,960 Pioneer Mun Hi Incm Tr MHI 12.71 11.90 -6.4 5.1 Tri-Continental Corporation
Putnam Tr PMM 7.94 7.55 -4.9 5.4
Consumer durables 0 25,142,621 Media 2,402,987 1,622,503
PutnamMuniOpportunities PMO 13.26 12.64 -4.7 5.2
225 Franklin Street
Consumer nondurables 2,575,988 25,973,537 Technology 1,037,601 103,037,374 Wstrn Asset Mngd Muni MMU NA 14.18 NA 5.4 Boston, Massachusetts 02110-2804
Consumer services 1,529,516 44,973,859 Transportation 12,048 11,536,584 WesternAssetMunTrFund MTT NA 21.77 NA 4.9 800.345.6611, Option 3
Energy 1,791,373 24,692,518 Utilities 93,400 23,911,777 Single State Muni Bond
BlackRock CA Municipal Tr BFZ 15.17 14.32 -5.6 5.1
Sources: Thomson Financial; WSJ Market Data Group BlkRk MuniHldgs CA Qlty MUC 15.38 14.68 -4.6 5.0
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B10 | Monday, November 27, 2017 THE WALL STREET JOURNAL.

MONEY & INVESTING

FBI Probes Ohio Shale Site’s Sale Copper

Bolstered
At issue are
allegations landowner
made in civil case By Dollar
against EnerVest BY IRA IOSEBASHVILI

BY RYAN DEZEMBER Copper prices rose to their

highest level in nearly a
The Federal Bureau of In- month Friday, buoyed by a
vestigation is looking into an weaker dollar.
eastern Ohio landowner’s Copper for November de-
claims that oil-and-gas invest- livery closed up 1% at $3.1660
ment firm EnerVest Ltd. sold a pound on
valuable shale-drilling rights COMMODITIES the Comex
on his property that should division of
have been his to sell, accord- the New
ing to people familiar with the York Mercantile Exchange, its
matter. highest settlement since Oct.
The probe follows allega- 26.
RYAN DEZEMBER/THE WALL STREET JOURNAL

tions made against EnerVest in The Wall Street Journal

a more than two-year-old civil Dollar Index, which measures
case filed in Ohio’s Guernsey the U.S. currency against a
County, where drilling into the basket of 16 others, fell 0.1%
prolific Utica Shale has made to 86.41, its lowest level since
the state one of the country’s Oct. 13. A falling dollar tends
top energy producers. to boost copper, which is de-
The case involves EnerVest nominated in the U.S. cur-
as well as Ascent Resources rency and becomes more af-
LLC, a company started by the fordable to foreign buyers
late oilman Aubrey McClendon when the dollar declines.
and two big investment firms, A depreciating dollar and a
which has delayed plans to Ohio landowner Matt Crislip is involved in two-year-old litigation regarding a disputed property with Houston-based EnerVest. pickup in global growth have
drill the property because of pushed copper prices up
the dispute. tricked me into thinking my claims. nearly 27% this year. The
Ascent has become one of well was producing, held my Shale Boom “There are genuine issues metal is a key ingredient in
the country’s top natural-gas 342 acres, sold my deep rights Ohio’s oil and natural gas production has surged since drillers of material fact remaining as everything from smartphones
producers by drilling one for millions and I got noth- began tapping the Utica Shale in the eastern part of the state. to the issue of production of to refrigerators, making it
gusher after another in eastern ing,” Mr. Crislip said. the Crislip No. 3 well,” he sensitive to economic trends.
Ohio; it is preparing for an ini- EnerVest has denied the al- Ohio crude-oil production Ohio natural-gas production wrote in that June order. Those gains may be in dan-
tial public stock offering or sale legations in court. An En- 80,000 barrels a day 5 billion cubic feet a day Houston-based EnerVest, ger if signs of weakness per-
that could value the company erVest spokesman said, “We which manages private invest- sist in China’s metal-intensive
at more than $3.5 billion. It ac- deny Mr. Crislip’s baseless al- ment funds and owns a con- infrastructure and property
quired rights to drill some of legations, and a third-party 4 trolling stake in publicly sectors, analysts at Julius
the landowner’s property from expert review has validated 60,000 traded well owner EV Energy Baer said in a note to clients.
EnerVest in 2013 and started our internal assessment. We Partners LP, acquired the China accounts for some 45%
3
the civil case when it sued will defend ourselves vigor- drilling lease for Mr. Crislip’s of global copper demand.
landowner Matt Crislip for ac- ously.” 40,000 property in 2009 as part of a “We believe that the out-
cess to the property in 2015. Ascent, which is controlled 2 push into Ohio in which it look for industrial metals de-
At issue is a tenet of the by Energy & Minerals Group spent more than $1 billion ac- mand in general and copper
oil-and-gas business in which and First Reserve Corp., de- 20,000 quiring rights to more than a demand in particular is soft-
a drilling lease generally re- clined to comment. 1 million acres ahead of the oil ening rather than strengthen-
mains intact only as long as a FBI investigators have dis- industry’s interest in the Utica ing,” the report said.
well is producing from the cussed Mr. Crislip’s allegations Monthly Monthly Shale. Growth in Chinese factory
0 0
property, a concept known as with local landowners and re- Mr. Crislip’s parents signed output, fixed-asset investment
“held by production.” cently questioned others in- 2008 ’11 ’14 ’17 2008 ’11 ’14 ’17 the lease in 1980 with a local and retail sales all slowed a
While his dispute with As- volved in the dispute, accord- Source: Energy Information Administration THE WALL STREET JOURNAL. drilling outfit. The lease gives tad in October, as Beijing im-
cent was litigated, Mr. Crislip ing to people familiar with the its holder rights to drill 342 posed tighter pollution con-
made a counterclaim against matter. a possible victim of a crime of oil and gas. In many places, acres so long as oil or gas is trols and continued restric-
EnerVest, alleging that the 37- So far, the federal probe This case is currently under including eastern Ohio, de- being produced from the prop- tions on home purchases in
year-old natural-gas well on has been limited to the Guern- investigation by the FBI,” the cades-old drilling leases that erty. For many years the the country’s big cities, data
his property in rural eastern sey County case, according to letter said, without being held rights to these now- lease’s various holders have showed earlier this month.
Ohio had been dead for many a person familiar with the more specific. No charges have within-reach reservoirs have relied on the output of the Stockpiles of copper held
years but that EnerVest “took matter. Investigators have been filed. soared in value. small gas well that was drilled at London Metal Exchange
steps to deceive [him] into be- been interested since at least Conflicts between prospec- The case in Guernsey there shortly after the lease warehouses have dropped
lieving the well was still pro- February, according to a letter tors and landowners over con- County’s Court of Common was executed in 1980. 22% this month, a possible
ducing,” including feeding gas the FBI sent to Mr. Crislip en- tract language, royalty and Pleas has been scheduled for a EnerVest in 2013 sold 152 sign of heightened demand.
backward from a pipeline to rolling him in its Victims As- lease payments, and land use jury trial in March after acres covered by the lease, but Stocks held in Shanghai Fu-
the well, so the firm could re- sistance Program that was re- have proliferated over the past Guernsey County Judge Daniel not the well itself, as part of a tures Exchange warehouses,
tain control of the rights to viewed by The Wall Street decade as advances in drilling Padden earlier this year larger package of drilling though, have been recently
drill the Utica Shale below. Journal. technology have unearthed turned down EnerVest’s re- rights to Ascent for nearly growing, Capital Economics
“They back-fed a dead well, “We have identified you as previously unattainable troves quest to dismiss Mr. Crislip’s $285 million. said.

Currencies

49
1998, during the run-up to the which has been dominated by U.S.-dollar foreign-exchange rates in late New York trading
US$vs, US$vs,
dot-com bubble, it took 35 towering tech-stock gains in Fri YTDchg Fri YTDchg
trading sessions for the S&P general and by chip stocks in Country/currency in US$ per US$ (%) Country/currency in US$ per US$ (%)
500 to vault from 1000 over particular. Both Micron and Americas Europe
1100, a 10% advance. Nvidia have more than Argentina peso .0576 17.3482 9.3 Czech Rep. koruna .04689 21.328 –17.0
Under the hood, technology doubled in price to help the Brazil real .3092 3.2341 –0.6 Denmark krone .1603 6.2382 –11.8
The number of trading sessions it took the stocks were the biggest S&P 500’s tech sector rise Canada dollar .7866 1.2713 –5.4 Euro area euro 1.1932 .8381 –11.8
contributors to the rally’s 39%. By market value, the Chile peso .001577 634.10 –5.3 Hungary forint .003822 261.63 –11.1
S&P 500 to rise 100 points to close above Ecuador US dollar 1 1 unch Iceland krona .009724 102.84 –9.0
S&P 500 is now one-quarter
2600, the second-quickest 100-point MONEYBEAT technology stocks, compared
Mexico peso
Uruguay peso
.0539 18.5553 –10.5
.03406 29.3600 0.03
Norway krone
Poland zloty
.1230 8.1280 –6.0
.2835 3.5275 –15.7
milestone on record with 14% for each of the next Venezuela b. fuerte .097334 10.2740 2.8 Russia ruble .01713 58.394 –4.7
latest push. The S&P 500’s two sectors, financial and Asia-Pacific Sweden krona .1208 8.2760 –9.1
tech stocks rose 11% during health-care stocks. That Switzerland franc 1.0206 .9798 –3.8
Australian dollar .7615 1.3132 –5.4
the 49-day run, roughly double means continued strength in Turkey lira .2536 3.9437 11.9
China yuan .1516 6.5983 –5.0
Ukraine hryvnia .0373 26.8284 –0.9
the 5.4% advance for financial- tech stocks could Hong Kong dollar .1281 7.8083 0.7
1.3332 .7501 –7.4

S&P Vaults to 2600

UK pound
sector shares, the next best disproportionately help the India rupee .01549 64.550 –5.0
Indonesia rupiah .0000740 13505 –0.1 Middle East/Africa
market segment. Chip maker S&P 500 in any new hasty
Japan yen .008963 111.57 –4.6 Bahrain dinar 2.6466 .3779 0.2
Micron Technology Inc. surged advance toward 2700. Kazakhstan tenge .003030 330.04 –1.1 Egypt pound .0565 17.6890 –2.4
The eight-year U.S. stock- in 49 trading sessions after it 43% over that stretch and —Chris Dieterich Macau pataca .1243 8.0424 1.6 Israel shekel .2850 3.5082 –8.8
market rally continues to rack closed above 2500 for the first fellow semiconductor Malaysia ringgit .2431 4.1137 –8.3 Kuwait dinar 3.3125 .3019 –1.2
up milestones. And fast. time back on Sept. 15. The 4% companies Intel Corp. and ONLINE New Zealand dollar
Pakistan rupee
.6881 1.4533 0.6
.00951 105.185 0.8
Oman sul rial
Qatar rial
2.5970 .3851 0.02
.2763 3.619 –0.6
The S&P 500 finished last advance marks the second Nvidia Corp. tacked on 21%
Philippines peso .0197 50.634 2.1 Saudi Arabia riyal .2666 3.7505 –0.01
week at 2602, closing above time the index reached a apiece. For more .7433 1.3454 –7.0 .0720 13.8866 1.4

WSJ
Singapore dollar South Africa rand
another round number as it century milestone in fewer In that respect, the latest MoneyBeat blog South Korea won .0009211 1085.64 –10.1
continues its virtually than 50 days. milestone serves as a posts, go to Sri Lanka rupee .0065036 153.76 3.6 Close Net Chg % Chg YTD%Chg
unhindered ascent in 2017. The It was the second-fastest microcosm for the U.S. stock .COM blogs.wsj.com/ Taiwan dollar .03337 29.970 –7.7 WSJ Dollar Index 86.41 –0.11–0.13 –7.02
benchmark eclipsed the hurdle such climb on record. Back in market’s performance all year, MoneyBeat Thailand baht .03062 32.660 –8.8 Sources: Tullett Prebon, WSJ Market Data Group
Vietnam dong .00004400 22725 –0.2

THE TICKER | Market events coming this week

Monday Wednesday PVH 2.91/2.60 Oct., expected up 0.2%

Short-selling reports Synopsis 0.57/0.77
EIA status report
Ratio, days of trading volume of Previous change in stocks in
Tiffany 0.76/0.76 Earnings expected*
current position, at Oct. 31. Workday 0.15/0.03 Estimate/Year Ago($)
millions of barrels
NYSE 4.9 Crude oil down 1.9 Donaldson 0.42/0.38
Nasdaq 4.3 Gasoline 0.0 Kroger 0.40/0.41
Distillates up 0.3
Thursday Ulta Beauty 1.66/1.40
New-home sales Initial jobless claims VMWare 1.28/1.14
Sept., previous 667,000 Previous 239,000
Gross domestic product
Oct., expected 624,000 Percentage change, annual rate Expected 242,000 Friday
3d quarter.advance
RICHARD B. LEVINE/LEVINE ROBERTS/NEWSCOM/ZUMA PRESS

Earnings expected* estimate up 3.0% EIA report: natural gas Total vehicle sales
Estimate/Year Ago($) 3d quarter second Previous change in stocks in domestically produced,
billions of cubic feet
Thor Industries 1.84/1.49 estimate up 3.3% at an annual rate
down 46
Oct., previous 18.09 mil.
GDP Deflator Chicago PMI Nov., expected 17.5 mil.
Tuesday
3rd quarter advance Oct., previous 66.2
Consumer confidence Nov., expected 63 Construction spending
estimate up 2.2%
Oct., previous 125.9 Sept., previous up 0.3%
3rd quarter second
Nov., expected 123.5 Personal income Oct., expected up 0.5%
estimate up 2.2%
Sept., previous up 0.4%
Earnings expected* Oct., expected up 0.3% ISM mfg. index
Earnings expected*
Estimate/Year Ago($) Estimate/Year Ago($) Oct., previous 58.7
Autodesk (0.13)/(0.18) Guidewire Software Personal spending Nov., expected 58.2
Marvell Tech 0.33/0.20 (0.14)/0.02 Sept., previous up 1.0%
* FACTSET ESTIMATES EARNINGS-PER-SHARE ESTIMATES DON’T INCLUDE EXTRAORDINARY ITEMS (LOSSES IN PARENTHESES)  ADJUSTED FOR
STOCK SPLIT NOTE: FORECASTS ARE FROM DOW JONES WEEKLY SURVEY OF ECONOMISTS An Ulta Beauty store in Manhattan. The company is expected to report higher profit on Thursday.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
Market value of the lowest-weighted component in the Dow*
Intel Pfizer General Motors
$300 billion
200
100
INTEL
0
2007 ’08
Dow components’ current weighting ( ) and share of total market value ( )
10%
5
General Cisco
Electric Systems
Pfizer Intel
*Weekly data
Sources: WSJ Market Data Group (lowest-weighted); FactSet (market value, weighting)
Email: heard@wsj.com
Russia
Pivotal in
Oil Talks
Before the formalities begin
this week in Vienna, the only
question oil ministers will have
left is who pays for the Sacher
torte.
That is unusual for normally
fractious meetings of the Or-
ganization of the Petroleum Ex-
porting Countries. Even less
usual is that, of the two crucial
parties at the table, the pivotal
one isn’t even a member—it is
Russia. Saudi Arabia, the
world’s top crude exporter and
traditional OPEC kingpin, is fac-
ing political upheaval at home
as 32 year-old Crown Prince
Mohammed bin Salman purges
political rivals. An export-reve-
nue slump is the last thing he
needs.
For those concerned with
the price of oil rather than geo-
politics, Prince Mohammed and
Russia’s Vladimir Putin being
strange bedfellows isn’t what
matters. The consensus seems
to be that they are headed to-
ward a deal that will see
“OPEC-plus”—a collection of
countries that control over half
the trade in crude—extend cuts
from the first quarter of 2018
through the end of that year.
But the devil may be in the
details. Russia, in particular, is
a tricky partner because it
doesn’t have a single large,
state-owned oil company to
corral. Furthermore, Mr. Putin
is on firmer ground at home
and in a strong negotiating po-
sition. Any agreement may con-
tain wiggle room that hinges on
aspects such as compliance or
prices that could increase how
much crude actually comes
onto the market next year.
With Brent crude up 22% in
the past three months, inves-
tors may not want to push
their luck betting on continued
strength once a “successful”
meeting of exporters concludes
in Vienna. —Spencer Jakab
The Dow’s Lightweight Title
General Electric’s 2017 fall
from grace has earned the
Boston conglomerate a
historic if unsought distinc-
tion as the lowest-weighted
stock in the Dow Jones
Industrial Average. While the
Dow has surged 19% this
year, GE shares have dropped
American International Group
General
Motors
removed
from the
Dow
GM GM ALCOA
’09 ’10
Microsoft is the
second-largest stock
in the Dow, but ranks
No. 20 in weighting.
Coca-Cola Merck DowDuPont
Verizon Nike
Communications
HEARD ON THE STREET
Scot Free?
China nonfinancial corporate debt as percent of GDP
180%
160
140
120
100
80
2006 ’07 ’08
Source: Bank for International Settlements
Be Wary on China Debt
It is well known that
Chinese history is circular—
dynasties rise and dynasties
fall. So is commentary on the
country’s economy.
In 2008, China was
supposedly on the brink of
collapse. In 2009, its
farsighted stimulus program
saved the world economy.
And in 2015, its nearsighted
stimulus and ham-handed
regulation were poised to
tank the world economy.
Now, according to market
consensus, China’s problems
have largely been fixed and it
is poised to dominate the
new century.
If that sounds suspicious,
it should.
China has made progress
on tackling its debt problem
in 2017. Debt as a percentage
of GDP has fallen for the first
time in years, the nation’s
Kafkaesque regulatory
infrastructure has been
strengthened, and forced
factory closures have boosted
margins in struggling
industries. The problem is
that market perceptions on
China have grown
disproportionately to real
progress.
The improvement in steel
and coal finances—the two
most vulnerable indebted
sectors—has been real. Both
industries were close to
insolvent by late 2015, with
MARKETS
42%, erasing more than $100
billion in market value.
Yet as significant as GE’s
challenges are—the firm this
month halved its dividend
and rolled back financial
guidance—its place in the
basement underscores the
quirks of the Dow as Wall
Citigroup Alcoa
GE held the title briefly in 2010.
Bank of America had an extended
run as the Dow’s lowest-weighted
component in the years following
the financial crisis after the bank’s
share price cratered.
ALCOA BANK OF AMERICA
’11 ’12
Microsoft American J.P. Morgan
Express Chase
Exxon Procter & Wal-Mart
Mobil Gamble Stores
FINANCIAL ANALYSIS & COMMENTARY
’09 ’10 ’11 ’12
aggregate operating earnings
just 1.5 times and 1.8 times
interest costs, respectively.
Two years later, the ratio in
both sectors is around five
times.
Unfortunately, only part of
this improvement is due to
capacity cuts. The other
factor is the enormous, old-
school stimulus unleashed in
late 2015, which pumped up
the real-estate market and
commodity demand. The
repayment ability of coal and
steel firms tends to follow
the real-estate investment
cycle closely, suggesting that
has more to do with
improving industrial margins
than relatively modest
capacity cuts.
China’s financial
vulnerability to a real-estate
downturn—now starting to
unfold again—remains
worryingly high. Corporate
debt ticked down by a
measly 1% of GDP in the first
quarter of 2017, according to
the Bank for International
Settlements, after rising by
nearly 50 percentage points
over the past five years.
Close to 40% of the total is
located in the real-estate,
construction, mining and
steel sectors, all intimately
linked to the property
market. Steel firms alone had
4.4 trillion yuan ($665.72
billion) of debt at the end of
Monday, November 27, 2017 | B11
Street's most-famous handful of others, including
price-weighted major the current Dow-weight
average (others are value leader, Boeing. It's not time
weighted). to turn out the lights on the
Yes, GE stock has slumped lone remaining original Dow
into the teens from the low component just yet.
$30s, but it remains more
valuable than 10 other Dow
stocks and is not far behind a
GE’s swoon this
Bank of America Cisco Systems General Electric year has shaved
more than $100
Cisco and GE have traded the title in recent years. billion off its value
Alcoa removed
from the Dow
ALCOA CISCO CISCO GE GE CISCO GE GE
’13 ’14 ’15 ’16 ’17
Apple’s market value
is greater than the
combined value of the four
components that are more
heavily weighted.
Visa United Caterpillar IBM Home UnitedHealth Goldman
Technologies Depot Group Sachs Group
Walt Chevron Travelers Johnson McDonald's Apple 3M Boeing
Disney & Johnson
By Tom DeStefano and Peter Santilli/THE WALL STREET JOURNAL.
WSJ.com/Heard
Investors Add Risk
In Low-Rate Times
Why are stocks so
expensive? In part it may
come down to a behavioral
experiment again and told
people they would get a
payment based on the
quirk that could be putting success of their hypothetical
the market at risk. investment (with a computer
The stock market is rich program determining how
by just about any valuation the risky asset performed).
measure, and by some The results were identical, as
excessively so. Given how was a similar experiment
’13 ’14 ’15 ’16 ’17 low interest rates are, there with Harvard Business
THE WALL STREET JOURNAL. is some sense to that: When School students.
the average on the 10-year Why do people behave
Treasury is just 2.35%, this way? One reason is that
paying a higher price than people who had long earned
usual for a stock seems to 6% returns, were willing to
make sense. take more risk to reach that
2016 (4% of GDP), according But how much more? A number. The more investing
to researchers at the Asean series of experiments experience the people had,
+3 Macroeconomic Research conducted by economics the more likely they were to
Office. graduate students Chen Lian, take on more risk in the low-
Chinese financial markets Yueran Ma and Carmen rate environment. The
have started to catch on. Wang show that when rates researchers avoid such real-
Steel prices are up 20% since are low, investors’ appetite life dilemmas as the need to
June—but steel and coal for risk increases beyond hit a target level of return
firms such as Hangzhou Iron what seems logical. from a portfolio.
& Steel and Yanzhou Coal The researchers created Over the past several
Mining have sold off sharply two investing scenarios. In years, during which central
since the summer, and bond one, the risk-free rate of bankers have driven down
investors continue to demand return from investing for rates, investors steadily took
far shorter durations for coal one year is 5%, and the on more risk—just as the
debt than in other industries. expected rate of return from bankers wanted. This
Banks, which are being asked a risky asset (such as stocks) research suggests it may
by Beijing to convert steel is 10%. In the other, the risk- have been excessive.
debt into equity, are dragging free rate is 1% and the If rates go up and
their feet. expected return on the risky investors go back to less
Fewer steel mills asset is 6%. In both risky portfolios, assets such
competing for business will scenarios, $100 invested in as stocks could be in for a
still be a positive next year— the risky asset has an big drop. —Justin Lahart
and continuing government expected return of $5 over
efforts to buy up empty the risk-free rate. An
apartments mean the investor should be agnostic Different Appetites
property downturn will about how much money gets Respondents’ average allocation
probably be less painful than allocated to risky assets in toward a risky asset in various
in 2015. either case. interest-rate regimes
But no one should delude But when the economists
themselves into thinking asked workers on minus 1%/4%* 78%
China’s debt problem has Amazon.com’s online labor 0%/5% 70
really turned the corner. To service Mechanical Turk how
spring itself from the sturdy they would invest in these 1%/6% 65
debt trap built in the years scenarios, the answer they
3%/8% 58
after the 2008 crash, China got was different. People
needs to keep credit growth invested far more in the 5%/10% 57
in check and keep steel, coal risky asset when rates were
15%/20% 51
and apartment prices low. In another experiment,
reasonably high. they found the results 10%/15% 50
History suggests doing intensified the lower rates *risk-free rate/expected return for risky asset
both won’t be easy. went. Source: Lian, Ma and Wang
—Nathaniel Taplin They ran the first THE WALL STREET JOURNAL.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B12 | Monday, November 27, 2017 THE WALL STREET JOURNAL.

EVERYONE JUST SHOPS

ONLINE NOW.

SHOPPING
FOR
THE TRUTH

FALSE TRUE

THE TRUTH Physical stores generate

90.7% of all retail sales.
ACCORDING TO ICSC RESEARCH, AND THE US CENSUS

LEARN THE TRUTH

ABOUT THE EVOLUTION OF RETAIL REAL ESTATE
AT SHOPPINGFORTHETRUTH.COM
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com

JOURNAL REPORT

F
THE WALL STREET JOURNAL.
The Eollow Monday, November 27, 2017 | R1
Onlinxperts
© 2017 Dow Jones & Company. All Rights Reserved.

wsj.c e
om/e at
x perts

An Entrepreneur
With Autism
Finds His
Own Path
For Chris Tidmarsh, the
key is building a support
network to help execute
his vision

DAVID KASNIC FOR THE WALL STREET JOURNAL (2)

they can’t handle and Speaks, an advocacy nary classes and began working with a pastry
BY CLARE ANSBERRY
delegate those tasks and support organiza- chef. Many people on the spectrum, in fact, are

C
HRIS TIDMARSH CO-OWNS Green
Bridge Growers, a commercial
greenhouse in north central Indiana
that provides herbs, lettuces and
nasturtiums to local restaurants, and
sunflowers and cosmos to florists.
He has degrees in chemistry, environmental
studies and French. He has a passion for agri-
culture. He also fits a very rare profile for an
entrepreneur. He has autism.
The 30-year-old created the company in
2013 with his mother—and co-owner—Jan Pi-
larski, after a promising job as an environmen-
tal researcher ended abruptly because he had
difficulties communicating. That left him with
the choice of either trying to find a more suit-
able job or, with the help of his family, creat-
ing a business that would capitalize on his
skills.
They chose the latter. “My mom does most
of the administration,” says Mr. Tidmarsh, in-
cluding accounting, marketing and sales. He
perfects the spacing between rows of kale and
spinach, and keeps close tabs on water chemis-
try and soil acidity. He spends hours research-
ing natural and effective pesticides to deal
with aphids. The solution: 4,500 ladybugs.
Ms. Pilarski often explains how they created
and run the business to groups of parents
whose children have autism, to show that it is
possible. “There is a deep, deep need for hope
and jobs,” she says.
A network of support
In many ways, Mr. Tidmarsh’s path to entre-
preneurship resembles that of others starting
their own business. He has a wide breadth of
knowledge and a vision of what he wants to
accomplish. He is a mentor to those working
alongside him. The results are promising.
Green Bridge is projecting revenue of $80,000
and profit of $30,000 in fiscal year 2018. In
fiscal 2020, when an expansion is complete, it
expects to reach $220,000 in revenue and
$72,000 in profit.
In other ways, though, his journey is very
different. Other entrepreneurs may know what
to others. But they tion, which has a busi- chefs, along with craftsmen, locksmiths and
know how to execute ness-accelerator pro- candle makers.
their vision. That is gram. Mr. Cottle found his vocation in baking and
difficult for Mr. Tid- By launching their started Stuttering King Bakery, which sup-
marsh. He has a own companies, peo- plies muffins and scones to local coffee shops,
dream but leans on ple on the spectrum corporate events and farmers markets. He is li-
his mother and a net- can create a work en- censed and works out of a large kitchen in the
work of supporters to vironment that fits home he shares with his parents. His mother,
plot and fulfill it. their comfort level Peg, handles orders and marketing.
It is a story shared and doesn’t force “For someone on the spectrum to be able to
by many other entre- them to navigate the make it, they really have to have someone else
preneurs with autism traditional, heavily so- who has a real high investment in their suc-
spectrum disorder, a cial office setting. cess, and usually that is going to be family,”
condition affecting Very often, though, says Ms. Cottle.
about one in 68 chil- their key to success is
dren and 1% to 2% of not to try for indepen- Approaching the puzzle
the overall population dence, but to build up Mr. Tidmarsh, the oldest of four children,
in the U.S. Starting a a network of support- was diagnosed with autism as a preschooler,
successful business is ers who will help when a caregiver noted that he seemed in his
no small task for any- them with the busi- own world and uninterested in family mem-
one, but those on the ness. bers coming and leaving the house. Since he
autism spectrum face “It’s how interde- was their first child, Ms. Pilarski says that she
challenges that others pendent can you get,” and her husband, Jay, likely missed the signifi-
don’t. Many have dif- says Mr. Raede. “Try cance of behavior that might have concerned
ficulties with execu- Top photo: Chris Tidmarsh working with to get as many people more-experienced parents.
tive functioning—the floating hydroponic raft beds. Bottom you can rely on, not For most of his childhood and teen years,
ability to follow mul- photo: Mr. Tidmarsh at a greenhouse con- one. I want to have the couple focused on the most immediate
tiple steps to com- taining lettuce and herbs, and trays of seeds 10,000 people I know next step—elementary school, middle school,
plete a task. They for the company’s larger greenhouses. and can rely on.” high school and college—while also raising
may also have a lim- His online commu- their other three children and working. Jay
ited ability to follow rules of social interac- nity is built on that concept, offering support Tidmarsh teaches law at the University of
tion—like maintaining eye contact or shaking groups and online courses to facilitate learning Notre Dame, and Jan ran a social-justice pro-
hands—or to read facial expressions to let on a mass scale. gram at St. Mary’s College.
them know what someone might be feeling or One of the best ways those supporters can Chris Tidmarsh received his three degrees
thinking. Sometimes they can type what is in help someone on the spectrum become self from Hope College, a small liberal-arts school
their head, but are unable to say it. employed is to identify and build on their in Holland, Mich. After graduating in 2010, he
They know how to work, explains Danny skills instead of trying to change behavior or got a job as an environmental researcher. But
Raede, chief executive of the Asperger Ex- have them do something they can’t, says Cary it didn’t last.
perts online community, who was diagnosed Griffin, co-founder of Griffin-Hammis Associ- “I was doing a lot of office work and behind
with Asperger Syndrome, an autism-spectrum ates, a Florence, Mont., consulting firm that the computer. I’m not the best with that style.
disorder, at age 12. But “their brains won’t let specializes in developing self-employment op- They generally communicate verbally, and I’m
them.” portunities for people with disabilities. If a more of a visual learner,” says Mr. Tidmarsh,
So, jobs are few for people on the spectrum, person can’t manage bookkeeping or market- who struggles at times to find and say the
and adults with the condition have an esti- ing, for instance, others can. right word. He’s better at following directions
mated 80% to 90% unemployment rate. “One of Often, it’s a parent or sibling. When Matt when they are written in emails and texts. It is
the ways people choose to address this is by Cottle, 28, of Phoenix learned that he couldn’t harder when they are spoken.
creating a business that allows them to be self- be a Marine like his father and brother be- After three months, he was let go. “I felt
employed,” says Angela Geiger, CEO of Autism cause he was on the spectrum, he took culi- Please turn to the next page

INSIDE

THE MONEY GAME FRANCHISING An Antique Calling

Dangerous Loopholes? The State of Franchising The business of selling
Rules to protect crowdfunding The industry looks to build vintage phones
investors may not do enough on solid growth numbers R7
R2 R4
How I Beat Math Phobia
MANAGING TECHNOLOGY RUNNING THE SHOW And became a better entrepreneur
Software for Solos Why Immigrants Make R8
The hottest new apps Great Entrepreneurs
to help freelancers Being outsiders prepares them ONLINE AT WSJ.COM/
R3 R4 SMALLBUSINESS
What It Takes
A Damping Effect The Plus-Size Niche To Run a Food Truck
Gig jobs may stop some Startups take aim at a lucrative The overhead is huge. The
from launching startups market that gets less attention hours are insane. So don’t
R3 R5 expect the movie ‘Chef.’
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
R2 | Monday, November 27, 2017 THE WALL STREET JOURNAL.

JOURNAL REPORT | SMALL BUSINESS

THE MONEY GAME
HOW I THOUGHT OF IT

Investors, Beware of Crowdfunding

SAFETYTAT
CHILDREN’S TATTOOS—WITH
A MESSAGE
Taking children to an amusement park can be a stressful
experience. Michele Welsh found a way to ease her fears—
and turned it into a booming business.
On Labor Day weekend in 2008, Ms. Welsh and her hus-
band, Robert, took their three children to Hersheypark in
Pennsylvania. As they walked in the park, her excitement
quickly turned into panic: The place was packed, and she

BRIAN STAUFFER
could barely hold on to her children’s hands. Worried that
they might get lost, and desperately searching for a quick so-
lution in case they did, Ms. Welsh grabbed a ballpoint pen
and wrote her cellphone number on their arms.
Six parents stopped her that day, asking to borrow her

Researchers say that rules designed to protect disclosures. Some outfits ad-
vise startups themselves about
pen and write their cell numbers on their children’s arms. On
the long car ride home to Baltimore, she reflected on how

individuals from scams have too many loopholes
pendent audit reports. The law
BY LOUISE LEE
also says a startup doesn’t re-
ceive actual funds until it at-
LETTING SMALL investors buy tracts enough investors to
shares in startups sounds like reach its fundraising goal. And
a great way for budding com- the law assumes that scrutiny
panies to raise cash. But it by many investors weeds out
could be dangerous for the fraudulent operations.
people putting up the money. But the researchers say that
In a paper published in the because many small investors
journal Business Horizons, Me- simply aren’t sophisticated
lissa S. Baucus, formerly of the enough to evaluate a startup,
University of Otago in New they could be sucked into in-
Zealand, and Cheryl R. Mitte- vesting in a company that’s
ness of Northeastern Univer- fraudulent. Making startups
sity say it’s easy for swindlers provide documentation and
to circumvent safeguards in audit reports may not suffi-
the Jumpstart Our Business ciently shield investors, the re-
Startups Act, the 2012 federal searchers say. The required
law allowing startups to raise level of disclosure is lower
up to $1 million annually from than that for a company plan-
retail investors. “There’s too ning an initial public offering,
much opportunity” for shady the researchers say, and swin-
projects, says Dr. Baucus, now dlers can fabricate documents
at Texas State University. that appear legitimate.
The study didn’t catalog in- Nor are audited financial
stances of fraud. Instead, it ex- statements necessarily reli-
plored rules covering so-called able. Some firms create the ap-
equity-based crowdfunding to pearance of proper auditing by
find potential loopholes that funneling funds into legitimate
criminals could exploit. companies that use reputable
The JOBS Act requires auditors. Some fraudulent
startups to disclose extensive firms produce fake audit re-
financial documents and inde- ports or statements from audi-
tors who aren’t legitimate.
And requiring a startup to
secure enough pledges to
reach its fundraising target
doesn’t protect investors, the
researchers say. That require-
ment is intended to force a
startup to satisfy many inves-
tors to hit a single lofty goal.
But swindlers can get around
the rule by creating multiple
smaller ventures with more-at-
tainable funding targets, list-
ing them on various portals
under different names, and
collecting funds from each.
While the law requires
crowdfunding portals to vet
startup officers, they vary
greatly in the level of due dili-
gence they actually perform,
the researchers say. They ar-
gue that crowdfunding portals
should as an industry agree on
standard processes by which
they research startups and ed-
ucate investors about the risks
of investing in them.
The researchers say inves-
tors can turn to outside re-
sources to find information
about startups; portals can
also get outside help with vet-
ting startups and providing
regulations and disclosures.
Investor education and due
diligence and disclosure are
time consuming and increase
the cost of crowdfunding but
may be worthwhile in the long
term, the researchers say. If
many people lose money
through crowdfunding, overall
funding opportunities for en-
trepreneurs may decline, says
Dr. Mitteness. “People are just
going to assume that every-
thing is a fraud,” she says.
Nicholas Tommarello, CEO
of Wefunder Inc., a public-ben-
efit corporation that runs a
crowdfunding portal, says to
his knowledge “there has not
been one case where fraud has
taken place” since equity
crowdfunding was permitted.
Regulations, he says, are al-
ready extensive and rigorous,
while fraud such as faking fi-
nancial documents carries
penalties far outweighing po-
tential return. Meanwhile, he
says, thinking that investors
can’t make informed decisions
is “paternalistic.” And, in fact,
many investors come from the
founder’s own social network.
Ms. Lee is a writer in
Palo Alto, Calif. Email
reports@wsj.com.
that ballpoint pen made everyone feel better.
That winter, the Welshes went on vacation with her
brother and his family, and all the children wanted temporary
tattoos. A few weeks later, everything clicked. With a back-
ground in marketing and graphic design, Ms. Welsh designed
temporary tattoos for children with a space to display a
phone number.
Ms. Welsh self-financed her startup with an initial invest-
ment of $50,000, and filed a provisional patent and set up a
website, which went live in January 2009. Initially, the web-
site offered an interface that allowed customers to customize
the message or phone number on their tattoos. Once the
company started selling through retailers, it added a Quick
Stick Write-on with which customers customize the product
after it has been delivered.
Ms. Welsh has branched out to use the tattoos to alert
others about a child’s allergies or medical conditions such as
diabetes and autism. Her products are sold in about 200
children’s boutiques in the U.S. and 24 internationally as well
as AAA travel stores and a few amusement parks. SafetyTat
recently reached a milestone: two million tattoos have been
sold.
One of the most satisfying aspects of the business has
been the feedback from customers, Ms. Welsh says. Safe-
tyTat runs a share-your-story contest every year. One winner
was a parent who took her two daughters to the Pacific Sci-
ence Center in Seattle. She had just noticed her younger
daughter was missing and started looking for her when her
phone started to buzz. Her 4-year-old daughter had immedi-
ately alerted the front desk that she was lost, and security
used the number on the tattoo.
Ms. Welsh says, “I know the tattoos are fun for kids and
give parents peace of mind. But what I hadn’t thought about
is how the children don’t panic when they lose sight of their
parents.”
–Barbara Haislip

An Entrepreneur With Autism Finds His Own Path

Continued from the prior page when and how they could, as did Jay Tid-
disappointed, and I guess I felt kind of sad that marsh. While caregiver to his wife during her
it didn’t work out, but I was looking forward 10-month treatment, he and volunteers started
to finding a job that I might enjoy more,” Mr. building two now-complete greenhouses on the
Tidmarsh says. new property. Once the growing facilities are
Back at home, his parents saw him sur- fully operational, the family expects to harvest
rounded by peers with degrees and on the about 45,000 pounds of produce a year.
spectrum, and likewise unemployed. The real- Having both parents involved in the busi-
ity of the obstacles facing their son and his ness, says Chris Tidmarsh, “brought us closer.”
limited options loomed large.
It wasn’t so much the idea of his son earn- The way forward
ing money that concerned Jay Tidmarsh. “I The business has provided a path forward
DAVID KASNIC FOR THE WALL STREET JOURNAL

wasn’t stressed that way,” he says. “It was
hard for us to have this young man with a lot
of ability unable to use it. That was really con-
cerning. I really believe in the importance of
work. It’s a part of who you are.”
Over many meals, Chris Tidmarsh and his
family talked about what he loved doing most.
He interned at an organic farm, became a mas-
ter gardener and took a class designed to help
people become farmers.
“I’ve been really interested in the environ-
ment and Earth for a long time,” Mr. Tidmarsh
says. “I decided I wanted to do something re-
lated to that.”
He and his mother, who grew up on a farm,
began researching options. They visited a soft-
ware business set up by the family of a young
man on the spectrum, and talked at length
about how they made it viable. They also vis-
ited several farms, including one that used an
aquaponics process, where fish’s waste is used
to fertilize plants that grow in water, while the
plants clean the water to cycle it back to the
fish tank.
That process, heavily dependent on chemis-
try and environmentally friendly, captured Mr.
Tidmarsh’s attention. “It requires a bit of
knowledge of chemistry,” he says. “It is very
sustainable. It uses 90% less water than grow-
ing in the soil.”
The plan emerges
From there, mother and son began working
together to figure out how to get the business
off the ground. Ms. Pilarski left her job in 2012
and applied to a program through her alma
mater, Notre Dame, designed to help startup
social enterprises. Part of the class involved
creating a plan that could be entered into a
business-plan competition at Notre Dame’s
Mendoza Business School.
She and Mr. Tidmarsh laid out their strat-
egy with the help of four graduate students.
Among other crucial choices, they decided to
set up the business as a 501(c)(3) nonprofit,
and have a key component of its mission be
training others with autism.
for Mr. Tidmarsh and his family. He says that
he has become more comfortable conducting
tours of the greenhouse. He has also addressed
large audiences, speaking in front of advocacy
groups and gatherings at Notre Dame and St.
Mary’s, including graduate speech-pathology
classes. The goal is to help them understand
the difficulties that those on the autism spec-
trum have communicating.
Until recently, Mr. Tidmarsh lived with his
parents. Now he has moved into a house with
a friend who is also on the spectrum. His par-
ents pay for his housing, but he hopes that will
When the group pre- Chris Tidmarsh and his mother, nonprofit, they raised money change. “My goal is to be self-sufficient,” he
sented the plan to the com- Jan Pilarski, plant kale seeds at through donors and a crowd- says, as well as help to employ others on the
petition judges, Mr. Tid- one of Green Bridge Growers’ funding campaign, which spectrum.
marsh spoke about greenhouses. they added to a $10,000 en- Toward that end, he is mentoring workers
unemployment problems trepreneur-of-the-year award at Green Bridge. Matt Coleman, Mr. Tidmarsh’s
faced by people on the autism spectrum and won by Mr. Tidmarsh. longtime friend and now his roommate, works
described his own experience. Finding land that met zoning regulations alongside him, planting and harvesting, and
They won the social-impact prize, which and offered access to water and electricity, and monitoring water levels. Adam Rousculp, who
provided $15,000 as well as legitimacy. “It re- room for growth, was more difficult than they is also on the spectrum, feeds the fish and
ally took us to a different place and acknowl- envisioned. cleans the tank. Photos and explanations hang
edged the viability of what we were doing,” “It took a tremendous amount of time,” says throughout the pilot greenhouse to explain the
says Ms. Pilarski. Mr. Tidmarsh. process to visitors and help workers, who bet-
The team met with area farm-to-table res- After more than a year, in December 2014, ter absorb information visually.
taurant owners and a local Whole Foods Mar- they found a farm with 5 acres, a house and The changes in Mr. Tidmarsh are striking to
ket to determine market potential and realized barn, and bought it for $70,000. Ms. Pilarski Ms. Pilarski. “I’ve seen him grow in such a
that it was huge: Indiana trucks in 90% of its scouted for other funding sources to cover the lovely way,” she says.
food, they discovered. They researched profit cost, landing grants from a utility and the U.S. On a recent afternoon, Mr. Tidmarsh checks
margins and decided to focus on those prod- Agriculture Department. nutrient levels in tanks that hold koi at the pi-
ucts that have the highest ones, like basil, All was progressing until March 2016— lot greenhouse. Afterward, he creates holes
which sells for $16 a pound retail and $10.50 when Ms. Pilarski was diagnosed with cancer. 1/8th-inch deep and drops seeds into trays of
wholesale. It wasn’t only a personal blow, but also a tre- soil. Later, at the site of Green Bridge’s two
In 2013, the partners built a prototype for mendous setback for the business. She was the new greenhouses, he describes his plan to
their business, located on a site in South Bend, one calling contractors, pricing materials and plant perennial rye in an open field on the
Ind., that housed an agency serving people looking for the best suppliers. property to restore microbes in the soil and
with disabilities. As they produced their first She did as much as she could for as long as prevent erosion.
crops—along with basil, they grew cilantro, she could, but “it was difficult to keep the mo- He’s optimistic about the future of Green
red Russian kale, lettuce, mint and parsley— mentum going,” she says. Bridge. “It does provide hope not just for me,
they learned the ins and outs of the growing Mr. Tidmarsh struggled with the disruption. but others on the autism spectrum to find and
process. He says little but nods in agreement as Ms. Pi- keep jobs,” he says. “I think I can see myself
Mr. Tidmarsh focused on monitoring the de- larski tells her story and concludes, “I’m back doing this for the rest of my life.”
tails of the fish tanks and the level of nutrients and healthy.”
the plants were getting. In the midst of those difficult times, their Ms. Ansberry writes The Wall Street
The next step in their plan was expansion. support network helped keep the business Journal’s Turning Points column.
Guided by the board they had set up for the moving forward. Board members pitched in Email clare.ansberry@wsj.com.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Monday, November 27, 2017 | R3

JOURNAL REPORT | SMALL BUSINESS

MANAGING TECHNOLOGY

Apps for the Freelance Worker

As the gig economy explodes, so have
tools targeted at helping freelancers
BY AMY WESTERVELT
FREELANCERS OF ALL stripes are
becoming a huge part of the work-
ance, which carries a discount over
policies for individuals and covers all
employees. Freelancers don’t have
access to those policies, and must go
to insurance providers and see what
those for a limited- they offer—typically policies with
liability company or higher premiums and no discounts.
other type of small Stride Health raised $13 million in
business. Expenses 2015 to build a platform targeted
are tracked differ- specifically at gig workers who don’t

force. And software companies are
scrambling to help them do their job.
They’re taking tech products once
designed for small companies and re-
working them to serve the needs of
solo operators. In many cases, this
software targets corners of the free-
lance world—like health care and
taxes—that work very differently
than they do for other small busi-
nesses and that freelancers have long
had to figure out on their own.
“The more prevalent this way of
working becomes, the more we’ll see
apps or companies emerging to make
it easier,” says Diane Mulcahy, au-
thor of “The Gig Economy” and a
professor on the topic at Babson Col-
lege. “If you’re in the gig economy,
you’re not just doing your primary
job, you’re also doing back-office
work, invoicing, paying quarterly
taxes, managing social media, doing
marketing, business development,
figuring out your own health-care
and retirement benefits.”
The potential market is huge. De-
pending on which report you read,
people working in the gig economy—
alternatively called freelancers, flex
workers, consultants or independent
workers—will comprise 30% to 50%
of the U.S. labor force by 2020. Al-
though often described as a mono-
lith, gig workers are as diverse as the
traditional workforce.
Some take on lower-paid on-de-
mand tasks for companies like Uber,
TaskRabbit or Postmates. Others are
highly paid, specialized consultants
who use niche skills on complex proj-
ects for large clients with big bud-
gets. Still others work in creative
fields, doing everything from com-
modity jobs such as churning out
content for a website to higher-paid
contracts like designing a new brand.
Here’s a look at some of the new
software on offer and what it can do
for freelancers.
UNTANGLING TAXES: Tax rules for
solo workers are quite different than
ently, for instance,
and different write-offs are permit-
ted. Now established makers of tax
software—as well as new entrants—
are reworking existing products or
devising new ones to handle those
specialized regulations.
One of the biggest names getting
involved is Intuit. The financial-soft-
ware giant beta-tested QuickBooks
Self-Employed in 2014 and formally
launched it in 2015. The program
provides information and forms that
gig workers need to manage their fi-
nances and comply with various tax
requirements. It is also specifically
designed primarily for smartphones
to accommodate gig workers, espe-
cially drivers and delivery people,
who are frequently on the go.
In its August earnings, Intuit said
there are now 390,000 subscribers,
quadrupling over the past year. It ex-
pects that growth to continue.
HANDLING THE BOOKS: As with
taxes, freelancers
face different chal-
lenges handling ac-
counting and billing
than startups do.
Wave, an app
and traditional software offering, has
run marketing campaigns targeted at
industries where freelancers tend to
work, such as photography and web
design. When people sign on to the
service, which also covers smaller
startups, they see information spe-
cific to their industry when they’re
getting set up, and get suggestions
about what various forms should in-
clude. For example, a photographer
might see usage-rights offerings as a
feature to add to their invoice.
TREATING HEALTH CARE: With
health-care cover-
age, small busi-
nesses have an ad-
vantage over solo
workers: They can
get group insur-
get health insurance. The software
sifts through available offerings to
recommend the plan that gives free-
lancers the most bang for the buck,
and then walks them through the
process in much the same way that a
human-resources staffer at an em-
ployer might do for an employee.
For some solo entrepreneurs, the
software delivers some of the bene-
fits of working at a traditional busi-
ness. The company has joined with
some of the largest names in the gig
economy, including Uber, Postmates
and TaskRabbit, to aggregate their
gig workers to get group discounts
from insurance providers.
ORGANIZING PROJECTS: Schedul-
ing can become a
big headache for
solo workers, who
frequently take on
multiple jobs at the
same time and
don’t have the option to spread them
among employees.
Completo, a to-do app originally
aimed at corporate executives, helps
those juggling different projects
maximize productivity and minimize
stress.
For instance, the company lets gig
workers break a large project into
smaller steps to help them organize
many assignments at once, and of-
fers the ability to set progressive re-
minders (such as reminding them
five days before something is due,
and then the day before). The com-
pany has also updated its marketing
to specifically target freelancers,
with language about juggling multi-
ple “side hustles” and working with
a variety of teams on different proj-
ects. The company says downloads
are 10 times higher—from 100 down-
loads a week to more than 1,000 a
week—since making these changes.
Ms. Westervelt is a writer in
Oakland, Calif. Email
reports@wsj.com.
For some, on-demand jobs seem more attractive than creating a startup.
‘Gig’ Work May Keep Some
People From Launching Firms
BY LOUISE LEE
WHEN COMPANIES like Uber move
into an area, some people there are
less likely to start businesses of
their own.
That’s the conclusion of a work-
ing paper for the Ross School of
Business at the University of Michi-
gan, written by Gordon Burtch of
the University of Minnesota, Seth
Carnahan of the University of Mich-
igan, and Brad N. Greenwood of
Temple University.
The researchers examined the ef-
fect of two “gig” companies—
Uber’s core service, UberX, and the
delivery service Postmates—on
startup activity, as measured by
Kickstarter campaigns. The re-
searchers found that a gig firm’s
entry into a given area caused a de-
cline in the number of unfunded
and underfunded Kickstarter cam-
paigns launched locally a year later.
The falloff may reflect a decline
in “necessity-based entrepreneur-
ship” by unemployed or underem-
ployed people, says Dr. Greenwood,
now at the University of Minnesota.
If they have no job opportunities,
“they’re more likely to act on
what’s potentially a lower-quality
startup idea” that doesn’t get much
support on Kickstarter.
But with the arrival of gig firms,
those individuals can find work
more easily instead of feeling as if
they have to pursue a weak project
that languishes unfunded, he says.
In the paper, presented at the
2016 Best Paper Proceedings of the
POSTMATES
Academy of Management, the re-
searchers analyzed the volume and
funding status of Kickstarter cam-
paigns between 2013 and 2015 in
172 areas where Postmates and
UberX launched.
On average, Postmates’s entry
into a market caused an 11% drop in
Kickstarter campaigns, primarily
unfunded and underfunded ones, a
year later. UberX’s entry resulted in
a 14% decline.
The researchers add that accord-
ing to census data from that time
frame, more people in those areas
reported their job as “paid driver
or chauffeur” after the entry of
UberX.
There may also be an effect on
crowdfunding platforms, the re-
searchers say. Driving down the
number of crowdfunding campaigns
may declutter platforms and help
funders quickly locate and evaluate
the most attractive projects.
But the researchers acknowledge
that gig-economy firms could end
up snuffing out a strong idea.
“There might be ideas that would
have been superstars that don’t get
pursued” because someone joined
the gig economy instead of launch-
ing a startup, says Dr. Burtch.
San Francisco-based Uber de-
clined to comment. Postmates, also
based in San Francisco, says it “has
a strong impact on local econo-
mies,” providing income to its cou-
riers and giving local merchants
more ways to distribute products.
Ms. Lee is a writer in Palo Alto,
Calif. Email reports@wsj.com.

You were looking to retire by the water.

Better yet, above it.
Captain of your own floating home.
That would be retiring like a boss.
That would also be tough without a plan.

TOTAL USD
BONDS
IUSB

U.S.
BONDS
WHEN INSPIRATION HITS, AGG
BUILD FOR WHAT’S NEXT.

Build for retirement with iShares Core Bond ETFs.

iShares Core bond ETFs give you broad exposure to bond indexes at 1/10th the cost
of comparable mutual funds.1 So you can keep more of what you earn along the way.

INSPIRED TO BUILD. iShares.com/build

1. Source: BlackRock and Morningstar, as of 4/30/17. Comparison is between the average Prospectus Net Expense Ratio for the iShares Core Series Bond ETFs (0.08%) and the average
Prospectus Net Expense Ratio of active open-end mutual funds in comparable Morningstar categories (0.84%) available in the U.S.on 4/30/17. Visit www.iShares.com to view a prospectus,
which includes investment objectives, risks, fees, expenses and other information that you should read and consider carefully before investing. Investing
involves risk, including possible loss of principal. Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond
values. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments. Buying and selling shares of ETFs will result in brokerage commissions.
The iShares funds are distributed by BlackRock Investments, LLC. © 2017 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock. 285131
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
R4 | Monday, November 27, 2017
FRANCHISING
The State of the Franchise Industry
Optimism is high. Now the question is: Can business follow?
BY ELIZABETH GARONE
THE MOOD OF the franchise
industry is upbeat right now.
But recent performance
hasn’t been quite as strong.
Optimism among franchis-
ers and franchisees is
“through the roof,” says Rob-
ert Cresanti, president and
CEO of the International
Franchise Association, an in-
dustry trade group. Much of
that mood appears to be
coming from the Trump ad-
ministration’s less regula-
tory, more business-friendly
approach than that of the
Obama administration.
But the industry still has a
way to go, Mr. Cresanti says.
Growth isn’t as powerful as
it could be. And there’s un-
certainty in the sector over
joint-employer rules.
For decades, one business
couldn’t be held liable for
employment-related matters
at another unless it had di-
rect control over the employ-
ees in question—which al-
lowed franchise operations
to flourish. But in 2015, the
National Labor Relations
Board said any franchiser
could be held as a joint em-
ployer with local franchisees,
liable to legal action and pro-
tests by employees.
The move sent shock
waves through the industry
and led to lobbying and a
grass-roots movement of lo-
cal business owners. The
Trump administration may
roll back some aspects of the
rule, but the industry is pur-
suing permanent changes.
Here are edited excerpts
from the discussion with Mr.
Cresanti.
The state of the field
WALL STREET JOURNAL: Is
franchising up or down?
MR. CRESANTI: It’s one thumb
up, and it should be two
RUNNING THE SHOW
Why Immigrants Make
Such Good Entrepreneurs
They’ve often overcome a lot of hardships.
A business setback is nothing.
BY ADRIAN FURNHAM
OUTSIDERS FACE a tough
struggle fitting into a new cul-
ture. They must figure out how
to deal with, and overcome,
frustration, loneliness and a
steep learning curve.
And that’s why immigrants
make such great entrepre-
neurs—they’re once again out-
siders facing many of the same
kinds of obstacles. Been there,
done that.
I’ve been studying immi-
The Source of Startups
The percentage of people in the U.S. who became entrepreneurs in a
given month (rate) and the composition of entrepreneurs by birth
Immigrant
Rate
0 0.2 0.4 0.6
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Source: The Kauffman Index of Startup Activity
JOURNAL REPORT | SMALL BUSINESS
Breaking It Down
A look at projections for franchise sections for 2017, in thousands,
and percent change over the previous year
ESTABLISHMENTS EMPLOYMENT
Sections Locations Pct. Chg. Workers Pct. Chg.
Automotive 38 1.3% 195
Business services 106 1.3 640
Commercial/residential services 66 1.1 247
Lodging 28 1.0 619
Personal services 110 2.5 487
Quick-service restaurants
Real estate
191
63
1.8
1.7
3,615
250
Retail food 53 0.8 465
Retail products/services 60 1.5 343
Table/full-service restaurants 31 1.6 1,019
TOTAL 745 1.6% 7,879 3.1%
Source: IHS Markit for the International Franchise Association
Franchise Education and Research Foundation THE WALL STREET JOURNAL.
thumbs up. Franchising is up WSJ: Under the new adminis-
from last year. We’re having tration, are you feeling more
a growth pattern within the confident about what will
normal trajectory you would happen with the issue of joint
expect. But we have huge op- employment?
portunities to break through MR. CRESANTI: The one thing
our averages. According to that casts the largest shadow
our 2017 forecast conducted is the joint-employer issue.
by IHS Markit, there are go- We passed a bill out of the
ing to be approximately House of Representatives
745,000 franchise establish- rolling back the National La-
ments in the U.S. by year- bor Relations Board ruling,
end, up 1.6% from the year and we’re hopeful the Senate
before. That is decent will take that up and pass
growth. Franchise employ- the bill. We’ve had conversa-
ment is on the rise. It’s fore- tions with the White House
cast to outpace growth in that the president is willing
businesses economywide. to sign that bill.
Things are good, but they WSJ: What areas in franchis-
could be a lot better. We’ve ing are hot right now?
been through a cycle of eight MR. CRESANTI: The food sec-
years of regulatory, legisla- tor is continuing to grow.
tive and economic chal- Hotels are growing also, but
lenges, and this is us begin- they are being challenged
ning to get our heads above significantly by things like
the water. Airbnb. Real-estate-related
We have lots of headroom businesses and home-ser-
if we get a little stimulus. A vices businesses are probably
little legislative and tax relief a little bit slower than we
would be nice. would have hoped.
grants for over a decade, try- New American Economy found
ing to figure out what makes that in 2016, 40.2% of Fortune
so many of them go into busi- 500 firms had “at least one
ness for themselves in the founder who either immi-
West—at higher rates than na- grated to the United States or
tives do—and succeed, too. was the child of immigrants.”
The Kauffman Foundation’s an- I’m not surprised. What I’ve
nual Index of Startup Activity found is that immigrants not
shows that immigrants were only have the qualities that
almost twice as likely as na- help any entrepreneurs suc-
tive-born to start new busi- ceed—including aggressive-
nesses in the U.S. in 2016. Al- ness and creative thinking—
most 30% of all new but they get a big boost
entrepreneurs were immi- because many of the skills they
grants, Kauffman says. A re- picked up coping with a new
port from the Partnership for a world are transferable to the
entrepreneurial world.
My research is based largely
on many conversations with
entrepreneurs. In addition, I
teach at a university that at-
tracts vast numbers of over-
Native born seas students. And finally, I
Composition bring my own perspective to
0.8% the research: I am a migrant
who grew up in Africa.
13.7% 86.3% One caveat: These are broad
stereotypes. Obviously, not all
15.2 84.8 immigrants are entrepreneur-
15.9 84.1 ial role models. And clearly,
plenty of natives are. But there
16.0 84.0 are reasons why so many im-
migrants forge an entrepre-
17.9 82.1 neurial path. It is worth identi-
18.7 81.3 fying the likely factors—both
to help understand the immi-
20.6 79.4 grant experience and what
they can bring to their new
17.8 82.2 economies, as well as to better
20.1 79.9 identify what makes anybody
thrive as an entrepreneur.
24.6 75.4
Lands of opportunity
26.2 73.9 The vast majority of mi-
grants (as opposed to refu-
24.3 75.7
gees) move to improve the
29.5 70.5 economic and educational sta-
tus of themselves and their
28.0 72.0 families. When they arrive,
they are aggressive about tak-
27.1 72.9
ing advantage of the stable
25.9 74.1 economic system and respect
for law and order, things they
28.5 71.5 often can’t count on back
home. Natives are more likely
27.5 72.5 to take those for granted and
29.5 70.5 not push to make the most of
opportunities.
THE WALL STREET JOURNAL. I met three immigrant en-
I came from the technol-
ogy industry prior to coming
here, and we used to talk
about disruptive innovation.
I used to think that nothing
could be more linear than
the franchise business model.
The shock to me has been
2.5% how innovative and disrup-
2.1 tive this business really is.
Twenty years ago, you had
1.0 three or four major ham-
1.1 burger brands. Why would
anyone want to pay slightly
4.1 more for a hamburger of dif-
ferent quality or marketing?
3.7
2.3
Yet concepts are succeeding
with gourmet burgers. They
2.0
have different tastes and
methods of preparation. I’m
2.8 always amazed by the vi-
brancy in this business.
3.5
Chowing up
WSJ: Why is food hot now?
MR. CRESANTI: It’s easily ac-
cessible. People are creating
interlinks with technology in
ways they didn’t before, so
you have app ordering, you
have delivery of food in vehi-
cles that bring it in tempera-
tures unachievable before.
You have people putting a lot
of investment and thought
into appealing to the con-
sumer and particularly to
millennials, who are becom-
ing a greater economic force.
One of my CEOs put it cor-
rectly. It doesn’t matter what
franchise business you’re in.
If you’re not a technology
company along with being a
hotel company, a lodging
company, a doggy day-care
company, a food company,
you’re not going to be in
business long. There’s a lot
of innovation coming, and
it’s pushing through to mak-
ing convenience the last mile
in a way that has changed
dramatically over time.
Ms. Garone is a writer in
Alameda, Calif. Email
reports@wsj.com.
Immigrants being interviewed at New York’s Ellis Island, circa 1940.
trepreneurs recently who had
become friends through busi-
ness. They all said the same
thing: They were amazed by
the quality of free education,
by the benefits of the infra-
structure and most of all the
lack of awareness by the na-
tives of how lucky they were.
As one said, “As long as you
are prepared to work hard and
take some risks, it is easy to
succeed in this country.”
Rolling with punches
All entrepreneurs experi-
ence failure and rejection, but
outsiders are often better pre-
pared to not be devastated by
hard times, because they have
already faced harder times
than most people can imagine.
They’ve left behind friends,
family and support networks.
Then they enter an unfamiliar
nation full of complex bureau-
cracy, discrimination and other
hurdles. Having already faced
hardship, immigrants look at
business setbacks as less trau-
matic, leaving them less likely
to buckle and break in the face
of adversity.
I have met a few entrepre-
neurs, for instance, who were
thrown out of Uganda by Idi
Amin. They arrived in cold, in-
different Britain with what
they could carry—and used the
strength they gained from that
disruption to persist in hard
times. Coping with difficulties
made me, says one of those
immigrants, now in charge of a
successful business.
They had no capital, and no
experience of British law and
customs. One, who ran a num-
ber of bakeries in Africa, said
he had to get a menial job in a
local bakery to learn British
THE WALL STREET JOURNAL.
HOW I THOUGHT OF IT
RAQUEL BIANCA
IS IT A NECKLACE OR A
TEETHING RING? YES.
Lisa Greenwald loved her long, beaded necklaces. And
many babies loved them, too.
When she held babies, they would grab and chew on her
costume jewelry. Seeing the effect she had on children,
moms called her a “baby whisperer,” but Ms. Greenwald
would say, “No. It’s the necklace.”
In late 2008, when she was home with her first child,
Benjamin, she saw that the boy was getting just as obsessed
with her jewelry as the other babies had been. And she de-
cided to find a way to make the improvised chew toy as safe
as possible.
Ms. Greenwald, who studied business in college and has
spent nearly 20 years in the fashion industry, came up with
an idea that she thought would resonate with other parents
as well: nontoxic beads made of silicon.
“I knew that if there was a way to make a safe necklace
for teething that babies would love them and moms and
caregivers would love to wear them,” she says.
She found an agent in Hong Kong to make the beads and
launched a company, Chewbeads, in 2009, self-funding the
venture with her husband, Eric.
Since then, she has sold 140,000 necklaces. The prod-
ucts—which now have expanded to include teething rings,
stroller toys and rattles—are sold on the company’s website
and at 1,500 to 2,500 boutiques, as well as Nordstrom and
Buy Buy Baby outlets. They can also be found abroad in
Canada, Mexico, Spain, China and France.
Ms. Greenwald is chief merchandising officer at J. Crew,
and works at her own business part time. Her husband left
his job at a commodities-trading firm to concentrate on the
business and now runs the day-to-day operations at Chew-
beads.
“Competition is keen,” says Ms. Greenwald, who lives in
New York City. But “it keeps us innovating. We are diversify-
ing the product with jewelry for kids, lots of stars and hearts
and bright color combos.”
–Barbara Haislip
GENERAL PHOTOGRAPHIC AGENCY/GETTY IMAGES
tastes and preferences. The lo- many ways more supportive of
cals didn’t like bread and cakes their entrepreneurial succes-
as sweet as he expected, and sors than the networks that
freshness was all important. are available to native entre-
But he was fine with the set- preneurs. The earlier migrants
back. He adapted his recipes, offer financial support—in-
started a small bakery and cluding loans and discounts on
now owns a large chain. products and services—as well
as insights about local prac-
Watching social cues tices and people. Networking
Because outsiders fear mak- with this support group gives
ing a faux pas in a new world, new immigrants a relatively
they become adept at picking safe environment to build in-
up cues that signal mistrust terpersonal skills as well as
and misunderstanding. Simi- learn crucial skills they need.
larly, they become good at It also offers them a way to
reading people, and noticing simply survive difficult times,
the relationships between giving them breathing room to
groups they do business with. become entrepreneurs. Often a
That potentially makes them whole family shares a large,
more shrewd and more per- run down, cold and damp
ceptive in situations such as house with three other large
negotiations or sales pitches. families in the same position.
One entrepreneur told me They share everything and
that he was astonished that learn from one another.
everything in markets and
shops was openly priced. He Seeing with fresh eyes
came from a culture where ev- Because immigrants learn
erything was negotiated—in about their new home culture,
his words, the difference be- and its rules of language and
tween the mall and the bazaar, etiquette, from the outside,
where people must learn to they often have perspectives
haggle, charm and persuade. that natives don’t have. They
People in his home country see possibilities and opportu-
needed to observe customers nities that natives don’t see,
closely to figure out how rich and find new ways to be cre-
they were, whether they were ative. They bring new flavors,
serious, and whether they musical sounds, cultural tastes
knew how to play the game. He to their new land. They also
believed that skill had served bring new ideas about selling,
him well when negotiating managing, customer service,
deals in his adopted country. technology and more. Con-
fronting a problem with a
A different network fresh perspective is a huge ad-
In some sense, immigrants vantage. Immigrants come by
don’t have the array of local that naturally.
networks that natives do. But
they often can substitute that Dr. Furnham is a professor
broad network with a much of psychology at University
deeper network: co-nationals. College London. Email
These earlier migrants are in reports@wsj.com.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
Startups See Lucrative Niche in Plus-Size Clothing
The market gets less attention at big retailers, and entrepreneurs are taking advantage of that
BY AMY WESTERVELT
IT’S A $21 BILLION slice of the
fashion market. It generates
heated arguments about how
clothes are designed and who
they’re made for.
And small companies think
that they can get a major
piece of it.
We’re talking here about
plus-size clothing for women,
which represents 10% of retail
sales, and has been a shining
star in an otherwise sagging
fashion retail market, outpac-
ing total clothing sales for
women for the past three
years. Yet fashion observers
and regular shoppers say that
large brands haven’t been
meeting the needs of plus-size
customers, outside of a few
specialty retailers.
Enter small companies. A
wave of entrepreneurs are bet-
ting that they can grab cus-
tomers by offering garments
that they say are better de-
signed for plus-size figures
and more fashionable than
current offerings. Some com-
panies are even selling be-
spoke outfits that are tailored
to customers’ specific mea-
surements.
These new entrants don’t
have the market heft of estab-
lished specialty retailers like
Lane Bryant. But observers
say that they’re making in-
roads and have a lot of room
to grow.
“We’re seeing small, inde-
pendent brands be much more
successful in this market than
larger brands and retailers,”
says Marshal Cohen, a retail-
industry analyst with NPD
Group. “The small, new, inno-
vative players are generally
beating out the big behemoths
that are sort of stuck in the
old way of doing fashion re-
tail.”
A new take
Sizing is a contentious is-
sue in fashion. A large number
of women are size 14, 16 and
Business-School Professors
And Tech Students May
Not Speak the Same Language
BY ALINA DIZIK
COLLEGES MAY need to re-
think the way they teach tech
students about entrepreneur-
ship.
In a recent study, research-
ers looked at business stu-
dents and science, technology,
engineering and math stu-
dents about to enter entrepre-
neurship courses. Both groups
started off with equal entre-
preneurial knowledge, and
STEM students even had a
slight edge in terms of how
many hours of entrepreneur-
ship education they were able
to take.
Yet after taking those en-
trepreneurship courses, STEM
students had only slightly
higher intentions of launching
startups than before. Business-
school students demonstrated
a greater increase in intention
after taking courses.
No clear connection
Why the lack of change?
Entrepreneurship is often
taught to STEM students by
business-school professors
who don’t know the best way
to reach those students, says
Rainer Harms, associate pro-
fessor for entrepreneurship at
the University of Twente in
JOURNAL REPORT | SMALL BUSINESS
above—35% to 60%, depending
on which report you read—yet
there aren’t a lot of options
out there for them. While
most mainstream retailers do
carry sizes above 14, the
choices are often limited. Usu-
ally, customers have to choose
among garments that were
created for an hourglass,
size-4 body and then have
been simply sized up.
“I don’t see enough brands
that are really breaking
boundaries for plus-size fash-
ion, that are actually design-
ing for plus-size bodies, or for
a diversity of shapes,” says
Kat Eves, a Los Angeles-based
stylist who works exclusively
with plus-size men and
women. “It’s always mirroring
straight size trends. Who’s the
Chanel of plus?”
The industry logic, say ana-
lysts and some in the industry,
has been that plus-size women
don’t buy as many clothes on
average as other women. Brian
Beitler, chief marketing officer
of Lane Bryant, a subsidiary of
Ascena Retail Group, says it is
true that the typical plus-size
customer spends less on
clothes than a thinner person.
But, he says, that’s due largely
to a lack of choice and the so-
cial stigma of being plus size.
All of which means that
large brands are “leaving a lot
of room for smaller, innovative
brands to come in and make
their mark,” Mr. Cohen says.
Probably the biggest new
entrant is Eloquii, which
started out as the plus-size la-
bel of The Limited. After the
brand was cut in 2013, a few
key employees sought out an
investor to buy it from Lim-
ited, which has since gone out
of business. The line re-
launched as a stand-alone in
2014 and has been doubling its
sales every year since, reach-
ing around $80 million for fis-
cal 2017.
Their approach: draping
and unusual cuts or sleeves to
create flattering silhouettes,
as well as styles that hug the
the Netherlands.
Business-school professors
tend to use teaching methods
that work with business stu-
dents on technology students,
he says. “This may not be the
correct approach.”
A need for guidelines
The biggest issue is a lack
of formal structure, Dr. Harms
says.
Entrepreneurship profes-
sors often don’t explore prob-
lems and methods in the thor-
ough, analytical way that
STEM students are used to; in-
stead, he says, the professors
use more of a linear approach
and don’t constantly ask the
students to change their as-
sumptions.
“Science students are used
to more structure, they are
not familiar with the unstruc-
tured way of doing things,”
says Dr. Harms, who con-
ducted the study with three
other researchers, using data
from 4,548 student responses
in a 2011 Global University En-
trepreneurial Spirit Students’
Survey distributed in Austrian
universities.
One idea to improve things,
Dr. Harms says, is to teach
STEM students the lean-
startup approach—a more-for-
malized method that focuses
Eloquii’s designs feature unusual cuts, as well as styles that hug the body in places.
body in places (rather than the
traditional approach, which
has tended toward very baggy,
and lots of high-waisted em-
pire cuts).
Mariah Chase, CEO of Elo-
quii, says that the employees
who stuck with the company
after it was cut loose “really
saw an opportunity for plus-
size fashion rather than just
taking The Limited stuff and
sizing it up.”
Other companies are taking
the same approach and de-
signing plus-size clothes from
the ground up. Noushie Mira-
bedi and Ronda Raymond,
founders of Eight & Sand, an
Oakland, Calif., women’s cloth-
ing line launched in 2015, fo-
cus on wardrobe staples such
as a tailored henley in a vari-
ety of colors.
Eight & Sand brought in
models for numerous styles
and sizes for its first run of
clothing, to ensure that its de-
signs work for a variety of
shapes, including hourglass,
pear, apple and boxy.
They currently have 750
customers, and Ms. Mirabedi
JAMES YANG
on creating a business while
using few resources and ex-
perimenting along the way.
Peer pressure
Understanding how STEM
students relate to their peers
is another key, says Dr. Harms.
Engineers are less motivated
to pursue entrepreneurial ac-
tivities when they are sur-
rounded by entrepreneurs, he
says, because they identify
themselves as STEM special-
ists first and entrepreneurs
second (if at all). Keeping
them surrounded by other
STEM students in entrepre-
neurship classes can help mo-
tivate them to strike out on
their own, he says.
Another easy fix is to con-
sider introducing different
role models into the tech-fo-
cused classroom.
Instead of studying the tra-
ditional chief executives, Dr.
Harms suggests, STEM entre-
preneurship classes should fo-
cus on tech startups led by
chief executives with a STEM
background.
“We should present to them
the hero engineers turned en-
trepreneurs,” Dr. Harms says.
Ms. Dizik is a writer in
Chicago. Email her at
reports@wsj.com.
says revenue is increasing ev-
ery month.
She says the average cus-
tomer came back six or seven
times in 2016, and the return
rate is under 2%, “versus the
35% average return rate for
online fashion retailers.”
Mallorie Dunn, the designer
behind another clothing re-
tailer, SmartGlamour, which
launched in 2015, customizes
each garment it designs and
sells depending on a woman’s
measurements, emphasizing
colorful prints and girlish,
flirty cuts.
“Every brand designs dif-
ferently, and then every body
is different, especially
women’s bodies,” she says.
“You have to be able to tailor
a bit to each individual if you
want a truly great fit. You
can’t really expect something
that’s made for the mass mar-
ket to fit everyone well.”
Two-thirds of Ms. Dunn’s
customers every month are re-
turn visitors. With several
thousand customers, she says
she’s working on about 60 or-
ders at any given time. Sales,
Monday, November 27, 2017 | R5
ELOQUII
she says, have doubled each
year.
Not all of the plus-size
startups are designing clothes.
In some cases, they’re acting
as middlemen for other com-
panies that make plus-size
clothing.
Panty Drop, an underwear
subscription service, began
carrying plus-size lingerie
lines in fall 2016 to comple-
ment its standard sizes. Julie
Arsenault, founder and chief
executive officer of Panty
Drop, says she extended the
company’s plus-size offerings
from 3x up to 6x after inter-
acting with various body-posi-
tive communities on social
media.
“They told us loud and
clear that if we really want to
serve this market, we need to
go higher than 3x,” Ms. Ar-
senault says. She says monthly
revenue is in the thousands,
and sales are growing 20%
month over month.
Down the road
For all these startups’ suc-
cess so far, there are obstacles
on the way that may hurt their
growth.
Perhaps the most daunting:
Big brands have recently
started to devote more re-
sources to the plus-size mar-
ket. Michael Kors and Comme
des Garcons have expanded
their high-fashion lines into
plus size, and H&M and Target
have begun designing specific
collections for plus-size
women. In March, Wal-Mart
announced plans to acquire
ModCloth, a pioneer in size-in-
clusive fashion.
“The big brands are defi-
nitely waking up to this,” Mr.
Cohen says. “But they tend to
change slowly.”
Another issue that small
fashion retailers must face:
Plus-size clothing can cost
more to make, because over-
seas factories are often not set
up to make it. Clothing facto-
ries are typically making
clothes for five to 10 brands at
a time, and manufacturing
larger sizes would require
changes to their cutting tables
and machines that are costly.
That makes it harder for small
businesses to compete with
large-volume businesses.
More niches
Still, some observers say
there are plenty of niches for
the startups. Ms. Eves, the
stylist, says, for instance,
there’s a need for wider foot-
wear, as well as “intimates,
high-end designer wear,
sportswear…. There’s this per-
ception that plus-size women
aren’t active, and that’s com-
pletely untrue.”
Then there’s the whole
other side of the plus-size
business—clothing for men.
Few startups have started to
address that potentially re-
warding market.
“There are way fewer op-
tions than there are for plus-
size women,” Ms. Eves says.
Ms. Westervelt is a writer in
Oakland, Calif. Email
reports@wsj.com.
R6 | Monday, November 27, 2017 THE WALL STREET JOURNAL.

ADVERTISEMENT

Focus on Franchising
To advertise: 800-366-3975 or WSJ.com/classifieds


   

 
  

 
 

 

  
 
  

  !
  
( 
&

 ! 
$



  



  


!   "

      " 

   
@ " (  "
    1    

  
!"   

#$

%  
   !  
 %

  
     

  " #

   @
 " 

&


&
%
 : 
2"   
   !   
! " # " #
% 
!   ! "    ""#

   '%"( )*+,"  ;    
 
    "#  
      
             
           %
  

C 
""   *
)''

     
  ""     
     "  (  6 27  A+'/
    
    "" #  #   >      #B ! !
    ! ""    ;  ""      "       
    " " 
)6/     "#     ?     : 
:9
 #
#  
       
*6/ ! "   
  %     *+,6 < 
    "   " 
*6/       !  % : "
# # 
   $ "% 
*/   
   4   

27  0# <"
# &'' " 
()'   1  "  !  4 !    :  " #   
 " !
 
       "" 

%  2 
 ""   " @      
  *+,-   !  ! !   !   
  3" 9"    27    
 ""  !            4        

    "
    .'/     ""  9  < 
# #   :"" "
   # 
"   #   #%  "      = !    "    

  &'/  "     #            "" 
     
       "!  "  
# !     &-)  A&66  B   "  #%
 
      %  "
09

 #  " 
1 "!
  
  7 "     
#"    
0""
   !  "" 
- #./ 0102'.0    # "    #  D 17""
     8 3
 " )  % ""
  ? ""
 
  
     4
3/0 0/#( 3" 9"      

  "   9" 3 0430 ' !   : #"      "
 
1""
    : 2
9" "7 #0 #0 ' 2"5  :        
02 3 1 
  #  ! 
% **   #  "  1  ! " 

  4 $   3  " #   0"  
"" 3" 9"  "     %
 
05 " #    # ;  " 7    *'   
     # 7 !  *' " !   <  ! "   

   
"  
       ('*) 9" < 
%   "   " 
   
  
"   6/  ('*.
!  "       <   
 "
   

  

    
  
  
 
 
 


   
   

     

  
  
   !" !  # " ! $!" %&
 '&%%"#%% !" "(% )
 *!"&%% !+!,+ "  *- . / 0
1
 !" 2 ""! % " (&! "!+ /+ /!
 
       
  
       
    
    
  
       
         
    
   
  !"#$% & $'()!*& +,-'(./  00 $ !"* $&*&$1&%
0
3




../""" - 


4
1 67

  
5


2 
 78



 
 
  

   

      

 



 

       

!""#!$%&'( )
 $$'*  

+,
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
JOURNAL REPORT | SMALL BUSINESS
They’re Clunky. They’re Outdated. And They Sell.
In a world that raves about iPhones,
Don Woodbury has found customers
with a passion for vintage machines
been able to create a viable business
BY BONNIE MILLER RUBIN
from repurposing and redeploying
obsolete technology that would oth-
WHEN DON WOODBURY opened a erwise end up in the trash,” says the
cellphone store in 2001, he included 59-year-old Mr. Woodbury, who sold
a few old phones as part of the dé- his 50-store cellphone chain in 2013.
cor, reflecting the historic district Many small companies have done
where the business was located. very well by selling niche products
Soon customers were asking to that have long since been put out to
purchase the vintage models. pasture, whether it’s vinyl records,
“They’d just come up to me and say, typewriters or anything else that
‘I want one of those.’ It didn’t take captures people’s fancy.
me long to realize that there was a For some entrepreneurs, vintage
good internet market for this stuff,” sales are a sideline. Jonathan Finder
Mr. Woodbury says. started Oldphones.com 16 years ago
when he was a young physician, and
the second income helped him pay
off student loans.
Now his job as a pediatric lung
specialist keeps him from putting in
the time to acquire new customers.
And a downturn in landline sales has
hurt business.
But he keeps at it, in no small
part because he’s an unabashed fan
of the craftsmanship and history of
his merchandise. “How many elec-
tromechanical objects that are 50 to
70 years old do exactly what they
did when they were first made?” Dr.
Finder says. “The phones of the ’30s
and ’40s outclass anything on the
market today.”
MATT JENNINGS
A new calling
For other entrepreneurs, like Mr.
Woodbury, retro devices are their
sole focus. The market for these
The 1905 Strowger can run $8,000. phones would seem pretty small to
build a business on. Two groups—
Some 16 years later, Oldphone- the Antique Telephone Collectors
works.com, based in Kingston, On- Association and Telephone Collec-
tario, has grown to become one of tors International—have only 1,125
the biggest sellers of antique members total.
phones, whether it’s the “candle- Yet buyers have been eager
stick” style familiar from old films enough not only to keep Mr. Wood-
and TV shows or the clunky desk bury’s operation afloat but allow it
models that were fixtures at to thrive, even enough to support a
grandma’s house. four-person staff. Revenue, he says,
Mr. Woodbury’s base is a small can hit 50,000 Canadian dollars
but loyal group of collectors with a (roughly US$39,000) in a good
taste for nostalgia, along with a month, and though he doesn’t track
handful of people looking to buy old long-term growth, he says that sales
models in bulk, such as movie pro- have shown a consistent year-to-
ducers trying to conjure up the past year increase since the beginning.
and hotel moguls looking to add a When original equipment is un-
touch of uniqueness to rooms. available, the company uses repro-
“It’s kind of amazing that we’ve duction parts—such as cloth-covered
The New WSJ iPhone App
Follow the markets in a whole new way.
From individual companies and industry sectors to asset values and
percentage change, experience the live U.S. stock market in augmented
reality. Available now in the AR/VR section of the WSJ iPhone app.
DOWNLOAD NOW
© 2017 Dow Jones & Co., Inc. All rights reserved. 6DJ6157
Western Electric 302 models date back to the 1930s.
cords—manufactured in its own
workshop. Additionally, Oldphone-
works.com has the capability to re-
pair and refurbish models that aren’t
in its inventory, a service that ac-
counts for about 10% of the com-
pany’s revenue.
Mr. Woodbury’s customers are
both “repeat buyers; people who are
going through their collection and
want to upgrade, so they’ll come to
us to order the one part they need,”
he says, and “a lot of one-offs, where
someone Googles us because they
need parts.”
Typically, Mr. Woodbury gets his
inventory from individuals or estates
looking to liquidate their collections.
His average telephone sale is $250, a
healthy return on his average invest-
ment of $50, not counting the cost
of labor for refurbishing. Prices usu-
ally range from $100 to as much as
$8,000 for a rare model, such as the
1905 Strowger Candlestick, the first
commercially available dial tele-
phone.
(A Kansas City undertaker, Almon
Strowger, believed that the only lo-
cal operator was steering business
calls to his competitor, who also
happened to be her husband. So he
invented dial service, bypassing op-
erator intervention.)
“A phone like that may sit there
for five years, but eventually some-
one will buy it,” Mr. Woodbury says.
“If people really want something,
they’re willing to pay for it. You just
have to be patient.”
Monday, November 27, 2017 | R7
MATT JENNINGS
To build consumer trust, he offers
a one-year, repair-or-replace war-
ranty—which gives him an edge over
garage sales and flea markets, where
the mantra is “Let the buyer be-
ware.” He also says he can offer
items in bulk, which is difficult for
other dealers.
A trunk line
The company doesn’t do much
marketing. Mostly it involves making
sure customers can find 20th-cen-
tury technology using 21st-century
methods. General manager Matt Jen-
nings, 31, makes updating social me-
dia a top priority, trying to land the
company at the top of Google rank-
ings in their category.
When he answered a help-wanted
ad two years ago, he didn’t know a
spit-cup receiver from an F1 handset.
“I thought I’d be repairing cell-
phones. I certainly didn’t think this
would be much of a market,” he
says. “After my first day, I realized I
was wrong.”
Beth Howe, like many buyers,
found her way to Oldphoneworks by
googling. She isn’t a collector, but
lusted after a Western Electric 500—
the phone of her childhood—for her
Topanga, Calif., home.
“I have fond memories of avo-
cado-green kitchen appliances,” Ms.
Howe says. “Maybe it’s just reaching
adulthood that has made me nostal-
gic for the late ’60s, early ’70s de-
sign sensibility.”
An online search brought her to
the site, and she fell hard for a dark
red Western Electric 302 instead.
Last produced in 1954, the phone’s
sleek lines and distinctive chime
made the model a staple of Holly-
wood’s Golden Age.
“I thought, what fun to have a
phone, not from my own childhood
era, but from that classic period,”
says Ms. Howe, a visual-effects pro-
duction supervisor, who worked on
the recently released film “Blade
Runner 2049.”
“I was especially enamored of the
matching textile cord…and the click-
ety, clickety, clack of the dialing
mechanism and the ringer, which is
as good as a time machine to trans-
port me back,” she says.
A starring role
Other regular clients are the TV
and movie industries, which account
for 15% of the firm’s revenue.
“It’s just been building on its
own,” Mr. Woodbury says. Recently,
he says, “we got calls from two dif-
ferent production companies on the
same day asking us to rush phones
that they need on the set.”
Jess Royal, set decorator for the
Netflix series “Stranger Things,”
calls the company her “go-to
source.”
“It’s super hard to find a whole
bunch of phones in working condi-
tion, such as ones that all light up
for a police station scene,” she says.
“They’ve been great for us.”
When a certain style Mr. Wood-
bury has supplied appears on the
screen, his staff will see an immedi-
ate blip in sales.
“We won’t sell any red pay
phones for ages, then, all of a sud-
den, we’ll sell four in a day,” he says.
A big order came in recently from
Ventana Big Sur, a luxury resort on
California’s Central Coast, which
asked for 59 Western Electric
phones dating back to the 1930s. The
property—which opened in October
and is the first in North America for
Asia-based Alila Hotels & Resorts—
needed its rooms to have a distinc-
tive touch, says Kristina Jetton, gen-
eral manager.
“In this day and age,” she says,
“when everyone has a cellphone, this
is something unexpected, retro,
quirky and fun.”
Ms. Rubin is a writer in Chicago.
Email reports@wsj.com.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
R8 | Monday, November 27, 2017 THE WALL STREET JOURNAL.

JOURNAL REPORT | SMALL BUSINESS

How One Entrepreneur Conquered Her Math Fear

As a small-business person, it’s
crucial to be comfortable with
numbers. Here’s how to do it.
BY ALEXANDRA SAMUEL
IT WAS FUNCTIONS and relations
that finally killed me. I was 15 years
old, in a class taught by an old guy
named Mr. Fox—and by “old,” I mean
around 46, the age I am now. Mr. Fox
was the last in a string of math
teachers who presided over my grad-
ual descent into math phobia.
By the time I landed in his class,
math was no longer something to be
learned, but merely to be endured. I
slogged through each lesson, duti-
fully following the template for solv-
ing each problem, without ever un-
derstanding what a “function” or
One great motivator:
Find a question that
your competitors using data to out-
smart you, unless you’re as data-
driven as they are.
Even if you’re fortunate to have
an analytics expert or team, that
doesn’t mean that you can sit out se-
rious data work.
If you’re part of a marketing
team, you need to get comfortable
using customer data, and web and
social-media analytics, to assess the
relative value of different channels
and campaigns. If you’re part of a
sales or customer-support team, you
should know how to make sense of
data that predicts the customer jour-
ney, surfaces key sales patterns or
identifies the major factors in cus-
tomer satisfaction. And if you’re part
of the leadership team in your com-
pany, you need to be comfortable

you’re desperate to
answer with numbers.
“relation” actually was. When I
switched to a new school in the mid-
dle of that year, I convinced my
mother to let me drop math.
More than 30 years later, I find
myself in a career that involves reg-
ular and persistent engagement with
the world of numbers: writing data-
driven articles and reports is now
the lion’s share of my work. That has
required me to finally conquer my
math phobia by using a few different
strategies that can work for others,
too.
While it wasn’t easy, I recognized
that in this era of abundant data,
math phobia is a recipe for missing
out on the professional insights and
opportunities that make the differ-
ence between a business that
scrapes by, and a business that is
wildly successful.
Smart businesses of all sizes now
use data to drive decision-making on
everything from product develop-
ment to marketing. The proliferation
of low-cost (and even free) data sets,
as well as tools and expertise to ana-
lyze that data, means that small and
medium-size businesses are increas-
ingly data-driven. You can count on
working with all of these types of
data—plus financial information—so
that you can make data-driven deci-
sions about the best strategies and
tactics.
All of that is hard to do, however,
if the mere sight of a row of figures
gives you flashbacks to junior high.
That’s where I started from, and it
took plenty of hard work—and some
luck—to turn my math phobia
around. If numbers still give you the
shivers, here’s how you can work
your way toward a more confident
relationship with the quantitative
world.
Learn quantitative thinking with a
passion project. You’re not going to
become a fluent and confident data
analyst until you have a basic level
of comfort with quantitative work.
So look for an area that interests
you. I took an economics course as a
way of satisfying my college’s quan-
titative requirements, and discov-
ered that when I was working with
numbers in a meaningful context—
and not just in abstract math prob-
lems—I actually loved it.
By the time I got to grad school, I
had also fallen in love with comput-
ing; while I’d struggled with the
rigid order of operations in algebra,
I embraced it enthusiastically when
it took the form of programming or
scripting.
The key is to start with a subject
you’re genuinely passionate or curi-
ous about, so that you develop some
quantitative understanding in a con-
text that feels stimulating rather
than defeating.
Find a question you’re desperate
to answer with numbers. There’s
no better motivation for conquering
your math phobia than a question
that you are really motivated about
answering.
Maybe you want to know which of
your service lines generates the
most recurring revenue, or what
kinds of social-media posts get
shared the most within different
market segments. All of those ques-
tions are answerable with data, and
they can drive your recovery from
math phobia.
What ultimately broke through
my wall of math resistance was the
desire to build traffic to my blog—
which got me curious about which
pages and blog posts got the most
views, or kept people on our site the
longest. When I started advising or-
ganizations on how to build online
communities, I had to do the same
thing for their websites, learning to
mine web analytics for insight.
Working with web data became part
of my daily working life, and I was
too fascinated by what that data re-
vealed to let my math anxiety get in
the way.
Recruit a mentor—humbly. Build-
ing your quantitative skills on the
job means taking on projects that
push you past your comfort zone.
Since you don’t want to make a rec-
ommendation, much less a decision,
based on mistaken calculations or
methodology, you’re going to need
someone looking over your shoulder
and double-checking your work.
Think of this person as a “math
mentor,” and make sure that it’s
someone you can approach humbly
(i.e. honestly) so that you aren’t
tempted to overstate your level of
confidence.
The best place to find that mentor
is in a very quantitative business or
department—even if the prospect of
exposing your needs inside the com-
pany is terrifying.
I was lucky to find two of mine
while working at a business-intelli-
gence software company: Since the
company’s product was designed to
help businesses work with survey
data, there were a bunch of people
TIM BOWER
on the team who had significant
quantitative research skills. I took on
projects that required me to have
regular calls with the company’s
chief research officer, so that I’d
have the chance to ask an endless
series of methodological questions. I
also befriended a colleague who (she
confessed) enjoyed a good data
nerd-out.
Get indignant about your math
education. We can’t talk about the
impact of math phobia in business
without acknowledging that girl stu-
dents are subject to this more than
boys—which has an effect later in
life. A survey conducted for Change
the Equation, a coalition that sup-
ports STEM (science, technology, en-
gineering and mathematics) literacy,
found that women are significantly
more likely than men to say that
they’re not good at math. For
women who’ve yet to get comfort-
able with quantitative work, there’s
nothing like pure indignation to fuel
a turnaround.
Ms. Samuel is a technology
researcher and the author of
“Work Smarter with Social
Media.” Email reports@wsj.com.

Answer the call with the Earnings Tool.

The TD Ameritrade Earnings Tool simplifies research on your earnings trades by aggregating thousands of
estimates into a single data point. This earnings season, make your most insightful trades yet.
Get up to $600 when you open and fund an account.

Visit tdameritrade.com/earnings to learn more.

does not represent or warrant the information to be accurate, complete, reliable, or current.

See tdameritrade.com/600offer for offer details and restrictions. This is not an offer or solicitation in any jurisdiction where we are not authorized to do business.
TD Ameritrade, Inc., member FINRA/SIPC. © 2017 TD Ameritrade.