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Security Concerns Reverberate Throughout Europe

Fed Eyes
What’s
Old Rule
News
Business & Finance
To Bolster
Oversight
T he Fed is moving for-
ward with plans to alter
margin rules for securities- BY RYAN TRACY
financing transactions under
a recent global accord. A1 WASHINGTON—The Federal
Reserve is dusting off a legal
U.S. public pension plans
power it has largely ignored for
and mutual funds are hold-
four decades, a move that could
ing more cash than they
significantly expand the Fed’s
have in years amid concern
influence over financial markets.
about volatile markets. C1
Margin requirements—rules
STEPHANIE LECOCQ/EUROPEAN PRESSPHOTO AGENCY
Drugmakers have raised limiting what portion of stocks

U.S. prices for dozens of or bonds can be purchased
branded drugs since late De- through borrowing—are moving
cember, with many increases up the Fed’s to-do list as offi-
between 9% and 10%. B1 cials fret about whether they
have adequate tools to suppress
Proxy access is being em-
dangerous asset bubbles that
braced by more U.S. compa-
could lead to another financial
nies, giving shareholders
crisis. They also allow the Fed to
more power to oust directors
exert influence on all financial
and influence strategy. B1
firms, not just banks.
China shares fell early A little-noticed global agree-
Monday, and losses in other re- ment recently paved the way for
gional markets deepened with ON WATCH: French gendarmes inspected a refugee camp in the northern coastal town of Grande-Synthe near Dunkirk on Sunday. the central bank to move for-
the resumption of trading. C3 ward with plans to alter margin
requirements. Under the accord
Apple mistakenly has been
AssaultsPutHeatonMerkel
announced Nov. 12, regulators
underestimating the number
representing 25 economies
of readers using its News app
agreed to adopt rules similar to
and passing the inaccurate in-
ones the Fed is developing, a
formation on to publishers. B1
united front intended to prevent
Kohl’s is debating whether financial firms from moving
to pursue steps such as tak- German chancellor’s lor Angela Merkel since she Meanwhile, a growing suspected attackers were mi- transactions offshore in re-
ing itself private or break- threw open Germany’s borders number of people, largely grants. sponse to tighter Fed rules.
ing up the company. B3 open-door migrant to refugees last summer. women, have reported being The assaults and fresh evi- Margin works as protection
Citigroup is pushing to policy is questioned at On Sunday, German officials robbed and sexually assaulted dence of other security risks for lenders financing securities
disclosed that the man French on New Year’s Eve by mobs of linked to migrants bring new purchases. If an investor wants
ramp up stock trading amid home and abroad authorities say tried to attack a what many described as difficulties to Ms. Merkel’s ef- to borrow $100 for a day, a
a slump in its traditional en-
Paris police station in an Islamic largely North African or Arab- forts to preserve her open- lender might ask the borrower
gines of trading revenue. C1
BY ANTON TROIANOVSKI State-inspired assault last week looking men. In Cologne, door refugee policy and get to post a bond worth $105, leav-
Alcoa plans to announce had been living at a German ref- where most of the assaults other European Union coun- ing a $5 margin in case the
a $1.5 billion long-term sup- COLOGNE, Germany—The ugee shelter—adding more fuel have been reported, police tries to agree on a common re- value of the bond drops.
ply contract with General aftershocks spreading from al- to a debate that has exploded said 516 complaints had been sponse to the migration crisis. Unlike earlier Fed margin
Electric’s aviation unit B3 legations of New Year’s Eve over the security threats tied to filed by Sunday—40% of them Please see MERKEL page A8 rules, which focused largely on
assaults by migrants in Ger- the arrival of more than 1 mil- for sexual offenses, including Please see FED page A2
World-Wide man cities have provoked the lion asylum seekers in Germany at least two rape allega- Professor’s views on Islam
biggest challenge to Chancel- over the past year. tions—and that many of the divide a U.S. college............... A2 Latest fund fashion: cash.... C1
Merkel’s refugee policy
CAR INSURERS FIND

is facing its biggest chal-
lenge amid aftershocks from
allegations of assaults by mi-
Inside
TRACKING IS TOUGH SELL
grants in German cities. A1
The suspect in an attack
on a Paris police station had
been living at a German refu-
gee shelter, officials said. A8
Clinton and Sanders Companies look for ways to get inside vehicles, but customers are wary
are deadlocked in Iowa
PAUL DRINKWATER/ASSOCIATED PRESS
and New Hampshire, while

BY LESLIE SCISM devices installed in custom- “I know some people say,
the GOP race remains tight
KEVIN WINTER/GETTY IMAGES
ers’ cars, Progressive and ‘What do you have to hide,’

in Iowa, a poll found. A1
MAYFIELD VILLAGE, other auto insurers are track- but I don’t want big business
Trump is stepping up his
Ohio—In a lab at Progressive ing things like how far their or Big Brother being involved
attacks on Cruz, question-
Corp.’s suburban headquar- customers drive and how of- in my personal life,” says
ing the Texas senator’s eli-
ters, managers and techni- ten they slam on the brakes. Shauna Aiken, a San Diego
gibility to be president. A4
cians at the auto-insurance For decades, insurers have driver of a Mazda Miata. “It
U.S. military officials ex- giant watch a colleague drive relied heavily on lumping ap- just creeps me out.”
pressed qualified optimism from his home outside Cleve- plicants into broad actuarial At a time when industries
about the recent successes land to the city zoo. A dot on categories by characteristics such as advertising, media
by Iraqi forces against Is- a computer screen moves such as age, gender and car and technology are being re- MEDIA | B7
lamic State in Ramadi. A8 along a map overlaid with type to supplement informa- shaped by an explosion of
speed limits, turning red tion gathered from driving re- personal data, the effort by
At the Golden Globes
The U.S. flew a B-52
when the driver is speeding. cords. Now, they are collect- auto insurers is turning into a
bomber near North Korea in
The demonstration is part ing reams of personal data in test of the extent to which Films including ‘The Revenant’ and ‘The Martian,’ which earned Leonardo
a bid to pressure Pyongyang
of an effort to figure out how hopes of drawing much more Americans are willing to DiCaprio and Matt Damon awards, were honored Sunday night.
after its nuclear test. A16
location data could someday tailored conclusions. share private details for po-
Congressional Democrats be used to assess drivers, as The catch is the industry tential economic benefit.
are pressuring the White the roughly $185 billion auto- needs its customers’ consent Progressive, Allstate Corp. JOURNAL REPORT | R1
House to hold Iran account- insurance industry undergoes to gather the information, and State Farm Mutual Auto-
able for missile tests. A3 a wholesale change in how and many customers are mobile Insurance Co. are pro-
Investing in Funds & ETFs
companies size up risk. Using wary. Please see CARS page A12
Officials are investigating
After a bad 2015 for emerging markets, investors might be tempted
a claim that a man accused of
to jump in. There are things they need to consider.
These Experts Plot to Keep the Sci in Sci-Fi
ambushing a Philadelphia po-
liceman had radical links. A2
Guzmán’s interview with
actor Sean Penn helped lead
Mexican authorities to the
i i i
Scientists help writers make films ‘plausible-ish’; 844-NEED-SCI

Clinton Faces a Test
drug lord’s hideout. A10
Egypt’s first parliament in
nearly four years was sworn
BY ERICH SCHWARTZEL making that is the aim of the
As Iowa Race Tightens
loft party’s host, a behind-the- BY PATRICK O’CONNOR Sanders edges the former sec-
in. Its makeup reflects Sisi’s
LOS ANGELES—Will Mat- scenes organization that links retary of state among likely
tightening grip on power. A9
thews and Jeffrey Addiss needed scientists with writers who want Democrats Hillary Clinton primary voters in New Hamp-
to end the world. a dose of scientific accuracy in and Bernie Sanders are dead- shire, 50% to 46%. Both leads
CONTENTS Money & Inv.....C1-C6 They found an accomplice at their movies, television shows locked in both Iowa and New are within the polling margins
Business News...B1-7 Opinion................A13-15
Crossword...................B7 Sports............................B8 a loft party here last fall. The and books. Hampshire three weeks before of error.
Election 2016......A4,6 Technology.................B6 two screenwriters approached a Mr. Addiss says Dr. Johnson’s voting begins in the 2016 pres- The survey underscores the
Global Finance.........C3 U.S. News.......A2,3,4,6 theoretical physicist, Clifford black hole is now the script’s idential race, a new Wall challenge Mrs. Clinton faces in
Heard on Street......C6 Weather.......................B7
Journal Report... R1-12 World News... A8-10,16
Johnson, explaining that for a likely scenario. Regarding Earth, Street Journal/NBC News/Mar- the first two nominating
screenplay they wanted ideas “he showed us how we can re- ist poll finds. Please see RACE page A4
for offing Earth in Hollywood ally mess it up.” The Republican primary
> fashion—“in a popcorn way,” A black hole Parties like this spotlight a contest also remains tight in
Mr. Matthews told him. plot twist in Hollywood: As mu- Iowa.
A black hole, the physicist re- plained scientifically, offered Dr. tants, superheroes and interga- Mrs. Clinton holds a slim,
plied, would do nicely. Johnson, a University of South- lactic warfare fill multiplexes in 48%-to-45% lead over the Ver- More coverage of
s Copyright 2016 Dow Jones &
That phenomenon was “much ern California specialist in quan- an age of intense audience scru- mont senator among likely the presidential campaign
Company. All Rights Reserved more interesting” than anything tum fields and gravity. tiny, filmmakers need good sci- Democratic caucusgoers in A4, A6
in most movies and could be ex- It was just the kind of match- Please see SCI-FI page A12 Iowa, the survey found. Mr.
A2 | Monday, January 11, 2016 * *** THE WALL STREET JOURNAL.
U.S. NEWS
Beijing’s Intervention Is Worsening Market Turbulence
T
he convulsions in ter a series of ad hoc mea- resurrected a pledge to man- stimulate demand more
China’s stock and cur- sures taken to halt the stock The Gravitational Pull of Market Forces age the currency against a broadly and ease the transi-
rency markets this past bubble’s collapse last sum- Investors have responded to slowing growth in China by driving basket of currencies rather tion for laid-off workers into
week fanned investors’ worst mer, China’s securities regu- down both its shares and its currency, prompting periodic than just the dollar, which new jobs. People’s Daily On-
fears: The world’s second big- lator proposed circuit break- intervention by the government. appeared to be the justifica- line, a party mouthpiece,
gest economy is in trouble ers that would halt trading tion for engineering another quoted an “insider” as saying
and the authorities are pow- for 15 minutes if the main Chinese devaluation in the past week. that “turbulence cannot be
erless to fix it. stock index rose or fell more yuan vs. the entirely avoided, but it is
Friday
U.S. dollar 6.3 yuan
D
The truth is less frighten- than 5%, and for the day if it 6.5934 eteriorating funda- worthwhile turbulence.”
ing, but still moved more than 7%. mentals, not just spec- Such rhetoric isn’t new. A
THE fraught. China is “It was a sincere attempt ulation, are weighing year after becoming Commu-
6.5
OUTLOOK trying to shift on the part of regulators to on stocks and the currency. nist Party chief in 2012, Xi
GREG IP economic growth have a mechanism to prevent Scale is inverted to show The slowdown has been led Jinping pledged to give mar-
AND BOB to a slower, safer panic,” said David Dollar, a a weakening yuan by heavy industry and real kets a “decisive” role. But re-
6.7
DAVIS path, one less China expert at the Brookings 2015 estate, which are plagued by ality has been different. An
dependent on Institution. excess capacity and unsold overhaul of state-owned en-
capital spending But the collar was far too Shanghai property, in part the conse- terprises unveiled in Septem-
and debt. Chinese techno- narrow, perhaps reflecting an Composite quence of stimulus ordered ber suggested bureaucrats
Index 4,500
crats know that means open- aversion to the market’s in- Friday up by the government that would seek to merge compa-
ing to ever more market herent volatility. Shortly after 3186.41 helped repel the recession. nies suffering from excess ca-
forces, but its ruling elite is the circuit breakers took ef- 3,500 Economists at UBS esti- pacity, rather than let such
still not willing to accept that fect last week, they were mate that if China’s growth companies fail.
loss of control. triggered as downbeat news slumped to 4% this year (ver- This may be less disrup-
China’s economy is now and a falling yuan spurred 2,500 sus their forecast 6.2%), it tive economically and politi-
open enough that the Com- selling. Investors rushed to 2015 would slice half a point off cally in the short run because
munist Party can’t simply sell more. That made it a Source: WSJ Market Data Group THE WALL STREET JOURNAL. U.S. growth, 0.8 point off Eu- it would avoid loan defaults
state its preferred outcome foregone conclusion the cir- rope’s and 2.6 points off and minimize job cuts. But
and expect it to happen. In- cuit breakers would be trig- When the economy began accelerated and the yuan’s Japan’s. This is why global Haibin Zhu of J.P. Morgan
vestors inside and outside gered again. The halts to slow last year and the Peo- value in offshore markets fell stock and commodity prices notes that means debt will
the country have a say, too. sparked anxiety that spilled ple’s Bank of China cut inter- sharply below its more con- have been so sensitive to Chi- keeping mounting, productiv-
The result: As growth slows, over to other countries. est rates, investors naturally trolled onshore value. nese developments. ity and growth will slide fur-
its leaders repeatedly try to A similar tension afflicts sought to take capital out of The PBOC resisted those At their Central Economic ther, and rolling over loans to
tame the accompanying mar- currency policy. China has the country. The PBOC re- pressures, intervening heavily Work Conference in Decem- “zombie companies will
ket turbulence, often making long strictly controlled flows sponded by devaluing the to buy up yuan. It also inter- ber, party leaders recognized crowd out the financing for
matters worse. Whether that of capital across its borders, yuan last August. vened in the offshore yuan some slowdown was inevita- other companies (especially
interventionist instinct ulti- which helped it keep the China’s political leaders, market to beat back selling ble when they prioritized re- from new sectors).”
mately derails the economy’s yuan closely pegged to the to whom the PBOC reports, pressure, while other officials ducing excess capacity. That In the long run, then, it
transformation is very much dollar. But to make the yuan had a more expedient motive: ordered banks to crack down conference also suggested might be better for China,
an open question. a more widely held global re- bolster exports and growth. on currency speculators. that monetary and fiscal pol- and the world, that it suffer
This past week’s plunge serve currency, it has gradu- As investors expected more Then, as the dollar icy would be used not to prop the turbulence of market
exemplifies the challenge. Af- ally relaxed those controls. of the same, capital outflows marched higher, the PBOC up obsolete industries, but to forces now.
Police Told Suspect Had Links to Radicals Professor

BY SCOTT CALVERT Donald King, a neighbor of
Mr. Archer’s mother, said in an
Criticized
A citizen told a Philadel-
phia police officer Saturday
that Edward Archer, accused
interview on Sunday that Mr.
Archer was “always peaceful”
when the two talked on the
For Views
of shooting a police officer
three times in a late-night am-
bush Thursday, “had an affili-
street. Mr. Archer never
brought up Islam, said Mr.
King, who lives across from
On Islam
ation to a group with radical Mr. Archer’s mother in Lansd- BY DOUGLAS BELKIN
beliefs,” a spokesman for the owne, Pa., where he said Mr.
Philadelphia police said. Archer often stayed. CHICAGO—A professor’s ef-
Police and the Federal Bu- Mr. King said Mr. Archer, fort to express solidarity with
reau of Investigation are in- who wore Muslim dress and Muslims by wearing a head
vestigating the claim, the was usually alone, once scarf and saying that Chris-
spokesman said in the state- worked for a group that helps tians and Muslims worship the
ment released Sunday. troubled youth. “I would never same God is dividing a small
Philadelphia police officials expect this type of behavior private Christian school as her
MARK MAKELA/GETTY IMAGES
on Friday said Mr. Archer told from him,” said Mr. King, 32 tenured position hangs in the
detectives he was inspired by years old. balance.
the extremist group Islamic Defense attorney Doug Dolf- Professor Larycia Haw-
State when he opened fire on man, who briefly represented kins, placed on administrative
33-year-old Officer Jesse Hart- Mr. Archer in a 2012 assault leave and awaiting a hearing
nett’s marked cruiser at a case in Philadelphia, said he before nine faculty members at
West Philadelphia intersec- doubted Mr. Archer’s alleged Wheaton College in suburban
tion. Commissioner Richard claim that Islamic State in- Chicago, told reporters last
Ross said police didn’t know if Law enforcement officials outside the home of Edward Archer in Yeadon, Pa., on Friday. Mr. Archer spired last week’s attack. week she “is flummoxed and
Mr. Archer has any connection is accused of opening fire on a Philadelphia police officer on Thursday. “He’s just somebody who flabbergasted” by the school’s
to the group or acted on his was a lone wolf who just response but won’t cower “in
own. what motive he might have tempted murder, aggravated at a Philadelphia jail, Mon- wanted to make a name for fear of the enemy of the
The FBI is continuing to in- had,” FBI Special Agent Eric assault on a police officer, day’s planned sentencing of himself because he knew he month” as defined by “funda-
vestigate whether trips Mr. Ruona said in an interview. gun-related offenses and re- Mr. Archer in an unrelated had a case coming up,” Mr. mentalists of every stripe.”
Archer made to Saudi Arabia “I don’t want to be prema- lated charges. A preliminary case in neighboring Delaware Dolfman said, referring to his Ms. Hawkins, a 43-year-old
and Egypt in recent years ture and say there aren’t any hearing is set for Jan. 25. County, Pa., will be postponed, sentencing date in Delaware associate professor of political
have any connection to Thurs- connections, because it just Court records show Mr. Ar- officials there said. County. science, announced on Face-
day’s attack on Mr. Hartnett, takes time to figure that out,” cher is represented by the De- In November, Mr. Archer Mr. Dolfman recalled Mr. book she was donning the hi-
who is recovering from his in- said Mr. Ruona. He said Mr. fenders Association of Phila- was convicted of forgery and Archer as a “very flamboyant, jab during the pre-Christmas
juries. Archer, 30 years old, spent a delphia, which provides legal other charges stemming from loud, boisterous character, a season of Advent. She said her
“At this stage it’s still too couple of weeks in Saudi Ara- services to indigent criminal a minor hit-and-run incident little bit paranoid.” aim was to show support for
early for us to make any de- bia in October and November defendants. No one from the in 2014. In the 2012 case, Mr. Archer Muslims amid a rise in anti-
termination on whether or not 2011, and several months in association could be reached A conflicting picture of Mr. pleaded guilty to simple as- Islamic sentiment after the
[Mr. Archer] was involved Egypt during 2012. on Sunday. Archer emerged in recent sault and carrying an unli- terrorist attacks in Paris and
with any terrorist groups, or Mr. Archer is accused of at- With Mr. Archer being held days. censed gun. San Bernardino, Calif.
School officials said they
had no problem with the hijab
CORRECTIONS
AMPLIFICATIONS
Readers can alert The Wall Street
FED ing it publicly with greater fre-
quency. Shortly after the mid-
November global agreement,
Daniel Tarullo, the Fed’s regula-
can cause volatile price swings
during stressful periods. Margin
requirements could exacerbate
that problem if they make it
man Alan Greenspan spear-
headed a deregulatory push at
the central bank and other fi-
nancial authorities.
or her support for Muslims,
but took offense at comments
in her Facebook post in which
she said Muslims and Chris-
Journal to any errors in news Continued from Page One tory czar, gave a speech stating even harder for banks to partici- Now, Fed officials and others tians worship the same God.
articles by emailing stock purchases, the new rules the Fed will be developing the pate in the market. say modernized margin require- That conflicts with the school’s
wsjcontact@wsj.com or by calling
888-410-2667. being crafted by the central rules and touting them as “a “These rules may improve ments are one of the few tools statement of faith, which holds
bank would apply to securities- mechanism for limiting the the markets’ security, but they available to curb some of the de- that God consists of the father,
financing transactions, a mul- buildup of leverage in the finan- may well undermine their li- stabilizing excesses exposed the son and the Holy Spirit.
THE WALL STREET JOURNAL titrillion dollar market involving cial system” as memories of the quidity because you have fewer during the 2008 financial col- Muslims don’t believe in the
(USPS 664-880) repurchase agreements, or re- rough times fade. players” in a time of stress, she lapse. Trinity.
(Eastern Edition ISSN 0099-9660) pos, for stocks and bonds, as Unlike most of the central said. Democratic presidential “As they participate in vari-
(Central Edition ISSN 1092-0935) well as lending of securities. bank’s regulatory authority, this The Fed’s return to margin front-runner Hillary Clinton has ous causes, it is essential that
(Western Edition ISSN 0193-2241)
Editorial and publication
Wall Street firms of all rule would reach beyond banks requirements is symbolically said she would seek to impose faculty and staff engage in and
headquarters: stripes use the transactions as a and across the entire financial significant, a kind of throwback margin requirements globally to speak about public issues in
1211 Avenue of the Americas, source of short–term leverage, system, affecting investment to an earlier era of empowering limit borrowing outside the ways that faithfully repre-
New York, N.Y. 10036 borrowing that allows them to funds and other nonbank play- regulators to try to steer mar- banking system. sent the college’s evangelical
Published daily except Sundays and make more bets and boost re- ers, reflecting the Fed’s growing kets. Until 1974, the Fed regu- Fed officials have suggested Statement of Faith,” the school
general legal holidays. Periodicals turns on winning trades. But concern about what has been larly tinkered with the amount the task of crafting new margin said in a statement.
postage paid at New York, N.Y., and such leverage also amplifies called shadow banking. rules has taken on more urgency The debate is roiling the
other mailing offices.
losses on losing bets, and these And unlike most of the Fed’s as other new regulations ad- college as students return
POSTMASTER: Send address changes to
transactions were at the heart of recently expanded powers, this
The new margin opted to force large banks to Monday to the campus in
The Wall Street Journal, 200 Burnett Rd.,
Chicopee, MA 01020. the collapse of Lehman Brothers one doesn’t come from the 2010 requirements let the rely less on short-term funding Wheaton, Ill., 20 miles west of
All Advertising published in The Wall Holdings Inc., igniting the finan- Dodd-Frank financial-overhaul bite with more severity. This in- Chicago, after a holiday break.
Street Journal is subject to the cial crisis. act responding to the financial
Fed exert influence creases the potential for regula- “It’s extremely divisive
applicable rate card, copies of which The U.S. Office of Financial crisis but goes back to the 1934 on all financial firms. tory arbitrage, in which risky fi- right now,” said Kirkland An,
are available from the Advertising Research recently estimated the Securities Exchange Act enacted nancial activity moves outside editor of the student paper.
Services Department, Dow Jones & Co.
Inc., 1155 Avenue of the Americas,
securities-financing transaction after the Great Depression, banks and outside the Fed’s Alicia Artis, a senior,
New York, N.Y. 10036. The Journal market is worth about $4.4 tril- when policy makers blamed a of margin, or collateral, required reach. said she is organizing a stu-
reserves the right not to accept an lion, less than the crisis peak but debt-fueled stock frenzy for ex- by an investor to purchase “Understanding that eventu- dent sit-in at the college presi-
advertiser’s order. Only publication of still substantial. acerbating the 1929 Great Crash. stocks, raising or lowering the ally this is going to drive that dent’s office on Monday to ex-
an advertisement shall constitute final The new rules would exempt Fed officials will also have to figure when officials considered business outside of the regu- press displeasure with what
acceptance of the advertiser’s order. Treasurys and U.S. agency secu- consider how new margin re- American stocks overly, or insuf- lated realm, you want to have a she sees as an excessive reac-
Letters to the Editor:
rities, which concern the Fed quirements interact with other ficiently, pumped up with credit. tool that is less easily arbi- tion to Ms. Hawkins’s per-
Fax: 212-416-2891; email:
wsj.ltrs@wsj.com less because they are less risky rules, such as liquidity require- By the 1980s, policy makers traged,” said Jeremy Stein, a ceived transgression. “Main-
than other forms of collateral. ments that limit banks’ activities considered such powers obso- Harvard professor who worked stream Christianity doesn’t
NEED ASSISTANCE WITH Transactions using U.S. govern- in securities-financing markets lete, as increasingly sophisti- on financial regulation issues as like to say we have anything in
YOUR SUBSCRIPTION? ment securities likely make up by penalizing them for taking on cated investors found ways a Fed governor from 2012 to common with Islam,” she said.
CONTACT CUSTOMER SUPPORT. more than two-thirds of the se- too much short-term credit. around the requirements, and 2014. Luke Nelessen, a sopho-
By web: customercenter.wsj.com curities-financing market, ac- Karen Petrou, managing part- Washington had come to em- “The more stringent regula- more, said he wished Ms.
By email: wsjsupport@wsj.com cording to the OFR. ner of the policy-analysis firm brace a greater deference to tion of the banking sector may Hawkins had expressed sup-
By phone: 1-800-JOURNAL The Fed declined to discuss Federal Financial Analytics Inc., Wall Street. They didn’t alter push short-term financing activ- port for Muslims without say-
(1-800-568-7625) the rule’s timing, but officials said those rules already mean margin requirements in the late ities to less regulated entities,” ing they worshiped the same
Or by live chat at wsj.com/
livechat have signaled it is moving to- fewer buyers and sellers in the 1990s, even as the tech-stock Fed Vice Chairman Stanley Fis- God. “She crossed a line that’s
ward the front burner, discuss- market on a given day, which bubble grew, as then Fed Chair- cher said in a Dec. 3 speech. important,” Mr. Nelessen said.
THE WALL STREET JOURNAL. Monday, January 11, 2016 | A3
U.S. NEWS
Powerball Mandatory Union Fees Face Test

Soars to High court weighs players that support Democrats
historically. Not just with
A Record whether public-sector

workers must pay
money but with boots on the
ground.”
If the unions lose, Ms.
$1.3 Billion dues if they don’t joinBY JESS BRAVIN

Hodges expects their strength
to decline more in some cate-
gories than others. Unions rep-
BY CAMERON MCWHIRTER AND MELANIE TROTTMAN resenting workers with “a
shared culture, a shared pro-
The multistate Powerball WASHINGTON—The Su- fession”—such as teachers, po-
lottery jackpot jumped to preme Court on Monday will lice officers and firefighters—
$1.3 billion, the largest U.S. consider eliminating a pillar of are better poised to survive,
lottery jackpot ever, after no public-sector union strength in she said.
one picked a winning number more than 20 Democratic-lean- Union leaders are already
in Saturday’s drawing. ing states: the ability to require looking to their counterparts in
If there were a single jack- workers, including those who states that don’t allow manda-
pot winner in the next Pow- don’t join the union, to pay for tory fee collection for advice
erball drawing on Wednesday representation. on how to navigate possible
and it was taken as a lump The high court ruled in 1977 changes.
sum instead of annuity pay- that such provisions—known Virginia prohibits collective
ments, the pretax payout as union security, agency fee or bargaining for public employ-
would be worth $806 million, fair-share clauses—were con- ees. In Norfolk, the school
according to Powerball’s stitutional for public employ- board negotiated a de facto
website. ees, as they have been for pri- contract with the Norfolk Fed-
Saturday’s lump-sum pay- vate-sector workers. eration of Teachers, an affiliate
ment would have been The current case, brought of the American Federation of
$558 million, according to by the Christian Educators As- Teachers, in the early 1980s.
Powerball. Saturday’s jackpot sociation International and Although the memorandum of
had been the largest of any nine California teachers, asks understanding isn’t enforceable
lottery in U.S. history. the justices to overrule the in court, it has remained the
At a gas station in At- precedent and effectively end basis of employee relations in
lanta’s Little Five Points the practice. the school system ever since.
neighborhood, Powerball The challengers in the case, “We would call it a best
sales were slow on Sunday Friedrichs v. California Teach- practice,” said the school-board
because “people figure they ers Association, argue they chairman, Rodney Jordan.
GREG SCHNEIDER/CENTER FOR INDIVIDUAL RIGHTS/ASSOCIATED PRESS

have a little time before the shouldn’t have to pay for any “Now, they challenge us, they
next one,” said clerk Moham- union services, on the theory advocate for their members,
mad Mafuzur Rahman. With that even basic functions such but we also work together,” he
more modest lotteries, the as collective bargaining are po- said, citing joint lobbying of
store might sell 700 to 800 litical speech because they in- the city council to increase ed-
tickets a day, but the store volve requesting action from a ucation funding.
sold more than 4,600 tickets government agency. Mr. Jordan said Norfolk’s
on Saturday alone, he said. The ability to collect fees “respectful relationships” with
With an even larger jackpot from dues-paying members the federation and the Educa-
now up for grabs, he ex- and workers who don’t join has tion Association of Norfolk, af-
pected ticket sales could bolstered the strength of pub- filiated with National Educa-
reach 5,000 to 6,000 on the lic-sector unions, which typi- tion Association, helps in other
day of the drawing. cally represent all workers in a ways.
The chances of winning bargaining unit regardless of “As an urban district sur-
the Powerball jackpot prize membership status. Union offi- rounded by suburban districts
remains one in 292,201,338, cials say removing that ability that may have more resources
according to the Powerball would make their work harder, than we do, I think it’s also a
website. Despite the long if not insurmountable. competitive advantage for us”
odds, people lined up at Nearly half of public em- Rebecca Friedrichs, a veteran teacher in Orange County, Calif., is the lead plaintiff in the case. in attracting or retaining
stores across the country un- ployees in states with such teachers, he said.
til the Saturday evening provisions were represented by workers, banning collective The Norfolk federation pres-
deadline to buy tickets for unions, compared with 17% in Mandatory Dues bargaining and prohibiting ident, Thomas Calhoun, said
the lottery game. states that prohibit the fees, Half of U.S. states allow unions to collect fees from public-sector payroll deduction of voluntary that just under half the teach-
The Powerball is operated according to an October report workers even if they don’t join the union. The Supreme Court is dues. Since then, the American ers, and about a third of other
by the Multi-State Lottery from the left-leaning Economic considering whether to end the practice. Federation of State, County district employees, choose to
Association, a group of 34 Policy Institute. Of the latter and Municipal Employees lost join the union, paying about
state lotteries as well as lot- group, between 2000 and 2014 States permitting fees for all government workers two-thirds of its membership, $700 in annual dues.
teries in the District of Co- about 20% were workers who N.H. while the statewide teachers Because nonmembers auto-
lumbia, Puerto Rico and the declined to pay dues, the insti- Wash. Vt. union shrank 50%, said Paul matically get whatever benefits
Mont. Maine
U.S. Virgin Islands. tute said. Minn. Secunda, a labor law professor the union negotiates, “there’s
Though no one won the The plaintiffs, all Republi- Ore. at Marquette University in Mil- nothing you can offer them to
N.Y. Mass.
jackpot prize, ticket holders cans or independents, say they waukee. entice them to come over” un-
in various states won smaller oppose union bargaining goals Pa. What those unions do today less they believe in the cause,
prizes, some as high as that may benefit them, such as Ill. Ohio is “collective begging. It’s not Mr. Calhoun said. That drives
Colo. R.I.
$2 million. Non-jackpot higher pay or seniority protec- W.Va. collective bargaining,” he said. the federation to work con-
Calif. Mo. Conn.
prizes totaled about tions. Not all states that prohibit stantly to prove its worth, he
N.J.
$159 million in Saturday’s “In my district, we have 70% N.M. the fees are so restrictive. But said.
Del.
drawing, according to Power- of our students on free and re- without provisions compelling “We go out there every day,”
Md.
ball. duced lunch. It’s a very low-in- membership, union officials he said. “I try to be involved in
The Powerball isn’t the come area and our community Alaska must continuously attend to the community, and with the
largest lottery in the world. cannot support higher salaries,” Fla. organizing and membership re- League of Women Voters and
Hawaii
For example, El Gordo, “the said plaintiff Harlan Elrich, a tention, reducing resources the NAACP” and other civic or-
fat one,” in Spain, paid out math teacher at Sanger High they can devote to bargaining ganizations, he said.
cash prizes in euros of about School in Fresno County, Calif. Source: Economic Policy Institute THE WALL STREET JOURNAL. and contract enforcement, said Despite Norfolk’s experi-
$2.4 billion in December, Mr. Elrich, who said he has Ann Hodges, a labor law pro- ence, Mr. Calhoun said no
though the grand prizes were been teaching nearly 30 years Among states that forbid represents one extreme. fessor at the University of other Virginia district has fol-
capped at about $4.36 mil- and makes about $75,000 an- the fees, the landscape for Wisconsin Republicans led Richmond in Virginia. lowed its example and volun-
lion per winning ticket. That nually, added that while “se- unions varies considerably. by Gov. Scott Walker left police A blow to unions would re- tarily instituted collective bar-
lottery, started in 1812, is niority is great,” teacher per- Wisconsin, which all but elimi- and fire unions intact. But they verberate into the political gaining.
held every year around formance should also affect job nated organizing rights for placed restrictions on unions arena, she notes: “Unions are “It’s clear that it hasn’t
Christmastime. security. most public employees in 2011, representing other government one of few large institutional caught on,” he said.
Democrats Press Obama Over Iran

BY KRISTINA PETERSON Nations panel ruled in Decem-
ber that the October launch vi-
WASHINGTON—Congressio-
nal Democrats are intensifying
olated a U.N. Security Council
resolution. RESIDUAL BENEFITS
pressure on the Obama admin- Last week, seven House
istration to hold Iran account- Democrats, including Demo- Long-range aircraft with long-term value.
able for its testing of ballistic cratic National Committee
Leverage the strength of Gulfstream
MIKE COPPOLA/WIREIMAGE/GETTY IMAGES
missiles. Chairwoman Debbie Wasser-

Both supporters and oppo- man Schultz of Florida, urged first flight, every flight.
nents of the multinational nu- President Barack Obama in a
clear accord with Iran say that letter to sanction Iran for the www.gulfstream.com
to maintain U.S. credibility in missile testing.
enforcing the deal, the White “Inaction from the United
House must move forward States would send the mis-
with sanctions on Iran after guided message that, in the
two missile tests in the fall. wake of the [nuclear deal], the
The administration in late international community has
December told lawmakers it lost the willingness to hold the
planned to impose new finan- Rep. Jerrold Nadler (D., N.Y.), shown in October in New York City, Iranian regime accountable,”
cial penalties on nearly a favors sanctions after Iran’s testing of ballistic missiles in the fall. the Democrats wrote.
dozen companies and individu- Iranian leaders have warned
als for their alleged role in de- who backed the nuclear deal, The debate over the nuclear they would view any new sanc-
veloping Iran’s ballistic missile said in a recent interview. deal reached with Iran in July tions as a violation of the nu-
program. It then reversed “Iran is very destabilizing, is likely to intensify as it is clear deal.
course, saying it needed more very aggressive and very badly formally implemented and Rep. John Delaney (D., Md.),
time for diplomatic work with behaved and we have to do sanctions against Tehran are who supported the deal, has
the Iranian government, but it what we can to stop that.” lifted. “I’m hopeful that Demo- introduced legislation, backed
hasn’t given a timeline for “We will issue those sanc- crats, even those who voted to by Minority Whip Steny Hoyer
when they would be imposed. tions and those designations support the president’s deal, (D., Md.), aimed at making it
The delay has put some at the appropriate time. will recognize we’re in a bad easier for the president to is-
Democrats, particularly those There’s no question about it,” place” under the agreement, sue sanctions on entities that
who represent large Jewish Denis McDonough, the presi- Rep. Mike Pompeo (R., Kan.) buy or sell ballistic missiles
constituencies and donors, in dent’s chief of staff, said on said. from Iran.
an uncomfortable position. Fox News Sunday. Under terms of the nuclear Some Democrats said they
Many such lawmakers ago- The House is expected to deal, the U.S. committed to would oppose legislation they
nized this summer over vote Wednesday on GOP legis- freeing as much as $100 billion viewed as designed to under-
whether to support the nuclear lation ensuring that as the ad- in Iranian oil money frozen in mine the nuclear deal. “Let’s
deal, which was opposed by Is- ministration eases sanctions overseas accounts as Iran be careful that what we’re do-
rael, saying their backing was on Iran under the nuclear deal, takes steps to roll back key ing is actually useful and help- SCOTT NEAL +1 912 965 6023
contingent on strict oversight it doesn’t lift sanctions against parts of its nuclear program. ful,” said Rep. Jim McGovern scott.neal@gulfstream.com
of Iran’s behavior. individuals involved in the But Iran has test-fired two bal- (D., Mass.). A spokesman for
“They ought to impose country’s ballistic missiles pro- listic missiles since the July Mr. McGovern said he would
sanctions because we have to gram or terrorism. Many Dem- agreement, one in October and vote against the GOP bill.
show we take this seriously,” ocrats said they were review- a second in November, accord- —Nick Timiraos
Rep. Jerrold Nadler (D., N.Y.), ing the legislation. ing to U.S. officials. A United contributed to this article.
A4 | Monday, January 11, 2016 P W L C 10 11 12 H T G K B F A M 1 2 3 4 5 6 7 8 9 O I X X THE WALL STREET JOURNAL.
Trump Steps Up Cruz Citizenship Attacks

Tactic change comes day’s GOP candidate debate in and received legal status there vals who have been targeted by Cruz spokesman Rick Tyler Over the summer, Mr.
South Carolina. as a migrant seeking asylum Mr. Trump, Mr. Cruz is in a po- said that when the campaign Trump and his advisers had
as polls show senator The billionaire businessman after his student visa expired. sition of strength in early states began, polls showed that only discussed the possibility of us-
holds small lead over has raised questions about Mr. He became a Canadian citizen and rising in national polls. 4% of Trump backers saw his ing Mr. Cruz’s citizenship as
Cruz’s eligibility to be presi- in 1974, after Mr. Cruz was John Reed, a retired build- boss as their second choice. an issue but were divided
businessman in Iowa dent, cast doubt on his evan- born in 1970, a campaign ing-materials salesman in The latest Wall Street Jour- about the possible benefits
gelical faith and even called spokesman said. Rafael Cruz Winterset, Iowa, predicted Mr. nal/NBC News poll found that and costs, according to people
BY HEATHER HADDON him a “maniac,” all after Mr. later renounced his Canadian Cruz would emerge from the 66% of Trump voters said they familiar with the matter.
AND JANET HOOK Cruz took the lead in Iowa citizenship and became a nat- battering unscathed. “Ted would consider supporting Mr. Some close to Mr. Trump
GOP polls and gained ground uralized U.S. citizen. Cruz is handling all this inter- Cruz—far more than other ma- have been encouraging him to
Donald Trump is taking aim on Mr. Trump nationally. Many legal scholars agree party bickering better than all jor candidates. go negative, feeding him oppo-
at Republican presidential ri- On NBC Sunday, Mr. Trump with Mr. Cruz that he meets those candidates collected,” Steve Deace, an influential sition research from Mr.
val Sen. Ted Cruz, a tactical questioned again whether Mr. the constitutional standard of Mr. Reed said. “He doesn’t get Iowa talk radio host who is Cruz’s career as a private law-
shift that could be risky on Cruz is constitutionally eligi- being a “natural-born citizen” into the fight. He smiles and supporting Mr. Cruz, said Mr. yer and attacks that surfaced
two fronts: It may have come ble to serve as president. because children of U.S. citi- goes on.” Trump’s attacks were “reality during his Senate primary
too late, and the Texas senator “From Ted’s standpoint and zens are U.S. citizens, regard- For Mr. Cruz, being under TV star antics” that reflect his campaign. But others argued
might actually be benefiting from the party’s standpoint, less of where they are born. attack by other Republicans is anxiety about losing Iowa. the plan risked alienating anti-
from the attacks. he has to solve this problem, The lines of an attack on a badge of honor, another “After leading these media- establishment voters both men
Other candidates have with- because the Democrats will citizenship have been batted backer said. “It’s a quasi-en- driven national polls for six are courting, said people fa-
ered under Mr. Trump’s fire or sue him if he’s the nominee,” around inside the Trump camp dorsement of Cruz to the months, Trump is poised to miliar with the discussions.
felt obliged to respond, but Mr. Trump said. “This matter for months, though advisers grass-roots,” said Saul Anuzis, lose the very first real contest The turning point in the
Mr. Cruz has shrugged it off. has not been determined.” have been torn about how and former Michigan GOP chair- here in Iowa. He knows it, too, Trump camp came about the
His posture could change this Mr. Cruz was born in Can- when they should be em- man. and he’s acting out as a re- time Mr. Cruz started pulling
week if questions Mr. Trump ada to a mother who was a ployed. Thus far, they are hav- Polls show a growing num- sult,” Mr. Deace said. “Cruz ahead in Iowa polls and when he
has raised about his Canadian U.S. citizen. His father, Rafael, ing little impact and that may ber of Trump backers see Mr. should remain the adult in the questioned Mr. Trump’s judg-
birthplace resurface in Thurs- left Cuba to study in the U.S. be because, unlike other GOP ri- Cruz as their second choice. room as he always has.” ment at a private fundraiser.
RACE Close Calls

Hillary Clinton and Bernie Sanders are down to the wire in both New Hampshire and Iowa, while Ted Cruz and
before. Past participation is
typically the best indicator of
who will turn out on caucus
night.
Continued from Page One Donald Trump are vying for the lead in the Hawkeye State. “Trump and Cruz are bat-
states. Losses in Iowa and New tling for the insurgent lane in
Hampshire would level a blow In Iowa In New Hampshire Iowa,” said Mr. Miringoff. “In
to Mrs. Clinton’s presidential New Hampshire, the big ques-
prospects, give Mr. Sanders a Republicans Democrats Republicans Democrats tion is whether anyone will
burst of momentum and imme- among likely caucusgoers among likely caucusgoers among likely primary voters among likely primary voters emerge to unite the GOP estab-
diately inject his campaign Sanders 50% lishment and overtake Trump.”
Cruz 28% Clinton 48% Trump 30%
with more credibility. Yet The New Hampshire contest
Trump 24 Sanders 45 Rubio 14 Clinton 46
back-to-back defeats might not remains fluid, with just 55% of
be debilitating to Mrs. Clinton. Rubio 13 O'Malley 5 Christie 12 O'Malley 1 likely GOP voters saying they
The Democratic front-runner Carson 11 Cruz 10 strongly support their pre-
has maintained a double-digit Paul 5 Bush 9
ferred pick for the nomination.
lead over Mr. Sanders in almost However, Trump backers are
Kasich 9
every national poll of Demo- the most committed, with
Most important issues
cratic primary voters, thanks in roughly two-thirds saying they
All respondents Likely Republican Likely Democratic Most important issues
part to her dominance with mi- caucusgoers caucusgoers
strongly support their candi-
All respondents Likely Republican voters Likely Democratic voters
nority voters. She led Mr. Sand- date, compared with the 42%
ers by a substantial 64% to 29% National security/terrorism National security/terrorism of Rubio supporters who say
among nonwhite voters nation- Job creation / economic growth Job creation /economic growth the same about the Florida
wide who expect to participate Health care Health care senator.
Deficit/government spending Deficit/government spending
in the primaries, a December Religious and moral values Immigration
Five Republicans garner be-
Wall Street Journal/NBC News Immigration Climate change tween 9% and 14% support
poll found. Climate change Religious and moral values among likely GOP primary vot-
Mrs. Clinton’s strength 0% 5 10 15 20 25 30 35 0% 5 10 15 20 25 30 35 ers in New Hampshire. The
among minority voters could Head-to-head among registered voters crowd includes Messrs. Cruz
prove a big boost in the con- Head-to-head among registered voters and Rubio, as well as former
tests that follow Iowa and New Sanders vs. Trump Sanders vs. Cruz Sanders vs. Trump Sanders vs. Cruz Florida Gov. Jeb Bush, Mr.
Hampshire. African-Americans 51% 38% 47 42 56% 37% 55 36 Christie and Ohio Gov. John
comprised 55% of Democratic Kasich.
Clinton vs. Trump Clinton vs. Cruz Clinton vs. Trump Clinton vs. Cruz
primary voters in South Caro- The poll also offers evidence
48 40 43 47 45 44 44 48
lina, according to exit polls of that the candidates competing
the state’s 2008 contest. And Sanders vs. Rubio Clinton vs. Rubio Sanders vs. Rubio Clinton vs. Rubio for the establishment vote are
while detailed demographic 44 44 42 47 50 41 40 52 cannibalizing each other’s sup-
data doesn’t exist for every port. Among potential primary
state, nonwhite voters ac- Sources: WSJ/NBC News/Marist telephone polls from Jan. 2–7. In Iowa, 456 likely Republican and 422 likely Democratic caucusgoers were polled with a margin of error of +/- 4.6 pct. pts. and voters, Christie supporters
+/-4.8 pct. pts., respectively. In New Hampshire, 569 likely Republican and 425 likely Democratic voters polled with a margin of error of +/- 4.1 pct. pts. and +/-4.8 pct. pts., respectively.
counted for more than half of were most likely to name Mr.
the electorate in 2008 in a THE WALL STREET JOURNAL. Rubio as their second choice,
number of states that will vote and vice versa. A strong corre-
on Super Tuesday, March 1, in- still go either way,” said Lee Mrs. Clinton leads Mr. the top pick of 30% of likely party supporters, very conser- lation also exists between
cluding Texas. Miringoff, director of the Mar- Trump 48% to 40% in Iowa, GOP primary voters. Mr. Rubio vative voters and GOP Messrs. Bush and Kasich.
Mr. Sanders has opened up ist College Institute for Public but the two are essentially tied is a distant second in New caucusgoers who actively prac- That dynamic helps explain
big leads in Iowa and New Opinion, which conducted the in New Hampshire. And the Hampshire, with 14% support. tice a religion. Mr. Trump has the increased sniping among
Hampshire among indepen- poll. Democratic front-runner trails The New Hampshire survey big leads among self-described all four Republicans, as each
dents who say they will partici- The poll suggests that, in Messrs. Cruz and Rubio in illustrates the gulf between Mr. moderates and likely caucusgo- tries to assert himself as the
pate in the Democratic con- those two states, Mr. Sanders both Iowa and New Hampshire Trump and rivals with more ers who aren’t that religious. clear alternative to Messrs.
tests, while Mrs. Clinton would be a stronger general- among all registered voters. conventional resumes. For With the Feb. 1 Iowa cau- Trump and Cruz.
notches big edges among Dem- election candidate than Mrs. Meantime, the GOP race is now, Mr. Rubio seems to have cuses approaching, Mr. Cruz The bickering has grown
ocrats. In both states, Mrs. Clinton. Among all registered close in Iowa, where Mr. Cruz a slight edge, but Gov. Chris holds a double-digit lead over particularly fierce between
Clinton has a wide advantage voters, Mr. Sanders shows big leads Mr. Trump, 28% to 24%, Christie of New Jersey and Mr. Trump among another Messrs. Christie and Rubio,
among likely participants age leads over Sen. Ted Cruz, Sen. among likely caucusgoers, a others are right on his heels. critical constituency: likely with the Florida senator ques-
45 and older, while Mr. Sanders Marco Rubio and Donald gap within the poll’s margin of In Iowa, the Republican race caucusgoers who have partici- tioning Mr. Christie’s conser-
enjoys even bigger leads among Trump in New Hampshire and error. Mr. Rubio is third, at looks like a two-way contest pated in previous caucuses. Mr. vatism and the New Jersey
younger voters. leads Messrs. Cruz and Trump 13%. between Messrs. Cruz and Trump, meanwhile, claims a governor criticizing Mr. Ru-
“The Democratic contests in in Iowa. He and Mr. Rubio are Mr. Trump has a much big- Trump. The Texas senator out- similar advantage among Io- bio’s lack of executive experi-
Iowa and New Hampshire could tied in Iowa. ger lead in New Hampshire, as paces Mr. Trump among tea- wans who haven’t caucused ence.
GOP: Private Sector Best to Help Poor Heard on the Stump

Rubio Doesn’t Think Clinton Says Trump
BY BETH REINHARD President Lyndon B. John- Much of Sean Penn Attacks Won’t Work
How Much Hardship son, a Democrat, declared an Marco Rubio said on ABC he Hillary Clinton said Republi-
COLUMBIA, S. C.—Republi- The share of people in each of the states voting on March 1 or “unconditional war on pov- didn’t know that actor Sean cans' focus on her husband’s sex
can presidential candidates, earlier who had incomes below the poverty line in 2014 erty” in 1964. Today, Republi- Penn, whose Rolling Stone inter- scandals is a “dead end” that
blaming a federal government ($23,834 for a family of four). cans say the hundreds of bil- view with Mexican drug lord El hasn’t derailed her in the past
they call bloated and inept for lions of dollars spent on Chapo was the talk of the day, and “won’t work again.”
losing the “war on poverty” Alabama 4th (ranking among 50 states) 19.3% antipoverty programs haven’t is still around. “If one of these Her comments to CBS follow
begun a half-century ago, are Arkansas 6th 18.9% made a significant dent in pov- American actors who have bene- a Donald Trump video suggest-
calling for helping the needy Tennessee 8th 18.3% erty rates. The national pov- fited from the greatness of this ing former President Bill Clin-
through family and faith. Georgia 8th 18.3% erty rate was 15.5% in 2014, ac- country, who have made money ton’s record undermines her sup-
Appearances by six contend- South Carolina 11th 18.0% cording to census data, down from this free-enterprise system, port for women’s rights. On
ers at a forum on poverty Sat- Texas 12th 17.2% from 19% in 1964. want to go fawn all over a crimi- NBC, he said he felt compelled
urday reflected the importance Oklahoma 15th 16.6% President Barack Obama has nal and a drug trafficker in their to bring up Bill Clinton’s past be-
of early-voting South Carolina Nevada 23rd 15.2% said that because his adminis- interviews, they have a constitu- cause Mrs. Clinton had called
as well as the clout of new Vermont 36th 12.2% tration expanded programs like tional right to do it. I find it gro- him sexist.
House Speaker Paul Ryan (R., Iowa 36th 12.2% the Earned Income Tax Credit, tesque,” the GOP senator said. “I’m going to talk about the
Wis.), the party’s 2012 vice- Colorado 38th 12.0% the poverty rate has fallen and —Nick Timiraos differences between us, because I
presidential nominee and a Virginia 39th 11.8% millions were saved from desti- think that’s what Americans care
leading voice for revamping Massachusetts 41st 11.6% tution during the recent reces-
O’Malley Takes On about,” Mrs. Clinton said.
the government safety net. The Minnesota 43rd 11.5% U.S. sion. Guns at Gun Show —Harriet Torry
event was sponsored by the Alaska 46th 11.2% average Speaking at Saturday’s A man driving up to a gun
Jack Kemp Foundation, named New Hampshire 50th 9.2% 15.5% event, former Florida Gov. Jeb show Saturday in Cedar Rapids,
for Mr. Ryan’s mentor, the 1988 Source: U.S. Census Bureau, Bush said people get “stuck” in Iowa, spotted Martin O’Malley’s
presidential candidate known Republican National Committee THE WALL STREET JOURNAL. poverty and if Republicans sug- entourage setting up for a cam-
for his efforts to revitalize poor gest otherwise, “we’ll never paign speech and couldn’t resist
communities and bring minori- Mr. Ryan called an “optimistic, worth its salt if it can’t help win elections.” New Jersey Gov. needling the Democratic presi-
ties into the GOP fold. inspiring, inclusive majority people.” Chris Christie said Republicans dential candidate: “Yay, guns!”
The 2016 candidates called party”—a departure in a cam- His remarks reflect concerns need to spend more time cam- Mr. O’Malley stood shivering
for empowering churches and paign dominated by incendiary among some Republicans that paigning in black churches and in the 18-degree weather and
families to take a more promi- rhetoric about illegal immigra- Mr. Trump’s success signals Hispanic neighborhoods. made clear he had no interest in
nent role, expanding vocational tion and national security. No- the party is headed for another The presence of Mr. Scott winning the driver’s vote. “You
training, increasing tax credits tably absent from the event defeat like in 2012, when Mitt and Nikki Haley, the first are standing at the easiest place
to the working poor, reducing was the Republican front-run- Romney was rejected by mi- woman and Indian-American to in America for a psychopath, a
sentences for nonviolent drug ner, billionaire Donald Trump, norities, women and young serve as the state’s governor, murderer or a terrorist to pur-
offenders and shifting more who has called Mexican immi- people. were signs of the GOP’s efforts chase a combat assault
money for social services to grants rapists and drug dealers “In order to win in Novem- to grow beyond its white, male weapon—and that is a gun
‘Well, I don’t
the states. and proposed barring Muslims ber, I believe we have to have a conservative base. The field show,” the former Maryland gov- want to say it’s a
“I believe the real answer to from entering the U.S. to pre- candidate who can inspire peo- seeking the White House is ernor said.
poverty is not government; it’s vent terrorist attacks. ple…having a conversation also more diverse than ever, in- Inside the show there was lit-
threat. But it is a
the private sector,” said Ben “Where did the party of with everyday voters on every- cluding Mr. Carson, an African- tle doubt where people stood in threat.’
Carson, who overcame inner- Jack Kemp go? Is it still out day issues, like poverty,” said American, and two Cuban- the partisan divide. Waiting to
city poverty to become a neu- there?” asked South Carolina South Carolina Sen. Tim Scott, Americans, Texas Sen. Ted pay the $7 admission, one man
rosurgeon. Sen. Lindsey Graham, who the state’s first black senator, Cruz and Florida Sen. Marco said to a friend: “Obama’s really DONALD TRUMP, on
The discussion also turned dropped out of the presidential who was raised by a poor, sin- Rubio. Mr. Cruz didn’t attend selling some guns, isn’t he?” bringing Bill Clinton’s past
to Mr. Kemp’s vision of what race last month. “A party is not gle mother. Saturday’s event. —Peter Nicholas into the 2016 race.
A6 | Monday, January 11, 2016 * * THE WALL STREET JOURNAL.
For TV Stations,
2016 Ads Are Adds
Typically flush season The growing number of ad-
New Channels vertising platforms saves the
is now even more so As TV stations move regular stations’ salespeople some
as regular customers advertisers to digital channels, headaches, too. Rachel Schmit,
more campaigns are following an account executive at KCRG,
buy spots online the same route. has at times baked her cus-
tomers what she calls “pre-
BY REBECCA BALLHAUS Total spending on political emption cookies” when their
advertising spots have been bumped by
CEDAR RAPIDS, Iowa—For Broadcast TV Cable Digital political ads. Now, “we have a
decades, presidential cam- lot more things to offer digi-
$6 billion $5.83 billion
HILLARY FOR AMERICA
paigns have been windfalls for tally,” she said.

local TV stations in swing TV stations are required to
states. But they also came with give candidates the “lowest
a big headache: keeping local unit rate” in the 45 days before
advertisers happy when their 4 a primary election. The sta-
ads get shunted to the wee tions face no such rules when
hours of the morning, if they it comes to super PACs, which
run at all. are political-action committees
2
In this election, though, sta- that can raise money without
tions are figuring out how to $1.14 contribution limits. Republican
win on both ends, bolstering Sen. Marco Rubio, for example,
already big revenue years by $1.08 paid $250 for a spot to air on a
0
channeling the messages of recent Saturday morning in
their regular customers to dig- 2008 ’12 ’16 Cedar Rapids, according to fil-
projected
ital offerings, including on sta- Source: Borrell Associates ings with the Federal Commu-
tion websites and embedded in THE WALL STREET JOURNAL. nications Commission. His su-
online videos. per PAC paid double for that
Political revenue is expected said he has shifted his adver- time slot a week later.
to jump 150% this year from tising from “100% TV to 100% Kantar Media, which tracks
DONALD J. TRUMP FOR PRESIDENT
last at KCRG in Cedar Rapids, web.” He said he is paying TV advertising, predicts over-
the top-ranked station in the nearly the same amount to the all spending for the 2016 elec-
second-largest media market station, KCCI, as he usually tions will be about $4.4 billion,
in Iowa, according to national does, and he is happy with the up roughly 16% from what can-
sales manager Steve Lake. results. didates and outside groups
Larger Des Moines stations are Nick Pagliai, manager of Pa- spent on cable and broadcast
expecting an overall revenue gliai’s Pizza in Johnston, Iowa, ads in the 2012 cycle.
increase of as much as 25% said he has worked with his lo- Not all TV stations have
from last year after political cal station to divert some of been able to bypass the crowd-
spending is combined with his ad spending to digital. He ing-out effect of political ads.
their local advertisers, many of recalls the station’s ad sales- Ken French, the advertising
whose messages are now run- man telling him of political ad and events manager at a car
ning online. season: “This is coming. This is dealership in Charleston, S.C.,
Beyond the creative use of how I see you surviving.” said he has grown frustrated
the web, prices are going up. By maintaining their regular with his inability to get his ads
KCRG has already booked ads customers, on top of the influx on TV, with rates up 25% in the
for more than 25 campaigns of cash from super PACs back- lead-up to February’s primary.
and political groups. The in- ing more than a dozen candi- “I know [TV stations] want
creased need for the station’s dates in the race, TV stations to take the money from the su-
airtime means advertisers—in- are in for an even bigger wind- per PACs and sell that time,”
cluding those not involved in fall than usual this cycle. In he said. “But come the second
politics—have to pay more for November, the Tribune Televi- week in February, that money
the guarantee that their ad will sion Group, which has 42 sta- is gone for another four years,
run. The election has so far tions in 33 markets, projected and I’m still going to be here.”
driven rates up 25% for nonpo- net revenue for 2015 of about He said he would explore
litical advertisers targeting $2 billion. Its digital ad reve- other advertising options.
high-demand programs, Mr. nue for the first three quarters Some advertisers avoid the
Lake said. of the year was up 26% over political season. Toby Joseph,
Attorney Jeff Wright said he the comparable period in 2014. whose family runs the Josephs
got “hammered” in the 2014 For stations, digital ads Jewelers chain in central Iowa,
election. His Des Moines firm, aren’t a replacement for isn’t planning to air ads until
TED CRUZ FOR PRESIDENT
Carr & Wright, typically runs broadcast ones, as they bring after the Feb. 1 Iowa caucus.
as much as $4,000 in TV ads a in less money and reach a While Mr. Joseph says he is
month, but nearly none of its smaller audience. Still, most tired of fielding four calls a
spots wound up on air in the stations recommend mixing night from various campaigns,
lead-up to the midterm elec- both TV and digital ads even in there is a silver lining: “I love
tion. “All of a sudden, the the nonpolitical season, be- wealthy people in my city,” he
From top, still images taken from campaign ads by presidential candidates Hillary Clinton, Donald phone stops ringing,” he said. cause online ads allow a more said. “I hope everyone at the
Trump and Sen. Ted Cruz. Such ads typically crowd out other advertisers during the election season. This season, Mr. Wright targeted approach. TV station makes a fortune.”
Bush Alumni Pound the Pavement

counts of Donald Trump and
HHHHH Sen. Ted Cruz, while the social
CAMPAIGN
network didn’t come up in the
Democratic group.
BY BETH REINHARD Bush was governor.
In a sign that Mr. Bush may
a long time ago, but for Jeb I’d
do just about anything,” said
the alumni group walked away
with a Bush convert. WIRE Both groups said they use
Google to search for candidates
NORTH CHARLESTON, S.C.— be running low on money, his 64-year-old Ed Moore, president Retiree Rachel Carter was HHHHH and issues, and were wary of in-
Since Jeb Bush signaled a likely campaign recently said it was of the Independent Colleges and walking her longhair chihuahua formation their friends posted
presidential bid one year ago, canceling $3 million of televi- Universities of Florida. near her North Charleston home online on networks such as
his family’s decades-old net- sion time in Iowa and South “Once you are connected to when she ran into Stephanie Ko- IMMIGRATION Facebook because it may not be
work of former ambassadors, Carolina. The campaign also has the Bush family, you are forever pelousos, who worked as Mr. truthful. (Google was one of the
cabinet secretaries and Wall pulled several hundred thou- dedicated, and they maintain Bush’s federal liaison in Wash-
Cruz Slams Trump’s sponsors of the focus group, but
Street financiers has been doing sand dollars in ads in New the relationships,” said Frances ington, D.C., and later as secre- Deportation Stance the participants in the focus
what it does best: raising Hampshire, according to people Fisher, who worked in the first tary of the Florida Department Texas Sen. Ted Cruz said he group weren’t made aware of
money. familiar with the transactions. Bush White House and recently of Transportation. doesn’t support sending forces that.)
But now, with Mr. Bush lag- That means his candidacy’s hosted a fundraiser for Jeb “My reservation is that Bush to round up and deport illegal Mr. Luntz showed the focus
ging behind in the final stretch success increasingly hinges on Bush in her Palm Beach home has got too soft of a personal- immigrants, likening such a pol- groups printed images of the
before Republican votes are the mechanics of targeting po- that was attended by former ity,” said Ms. Carter, who said icy to “a police state.” candidates’ websites. Over-
cast, hundreds of supporters tential supporters and mobiliz- first lady Laura Bush, wife of ex- she was thinking of voting for “I don’t intend to send jack- whelmingly, the 24 people in the
from his Florida governorship ing them to vote. President George W. Bush. Mr. Trump. Of Mr. Bush, she boots to knock on your door and Democratic group picked Sen.
and two family White Houses The campaign calls the Bush Still, canvassing neighbor- added, “I think he needs to be a every door in America; that’s not Bernie Sanders’s website as
are trading their checkbooks for alumni “validators” because, hoods is tiring. More people are little sharper.” how we enforce the law for any their favorite.
comfortable shoes to canvass having known or worked with out and about than indoors. Ms. Kopelousos talked about crime,” Mr. Cruz said on CNN. —Natalie Andrews
neighborhoods in the early-bal- the ex-governor, they can vouch Dogs bark. Homeowners slam Mr. Bush’s handling of eight Donald Trump has called for a
loting states of Iowa, New for him in a way that a volun- the door. hurricanes that hit his state “deportation force” to remove STATE OF THE UNION
Hampshire and South Carolina. teering College Republican One resident in Hanahan, over less than two years. She the roughly 11 million immi-
Their hope is that a strong can’t. Supporters say they see in S.C., seemed taken aback when wrote her cellphone number on grants in the country illegally.
Aide: Speech to Rebut
voter-turnout operation—en- Mr. Bush not the slightly three Cuban-Americans from a campaign flier. And she never The Texas senator spoke up ‘Doom and Gloom’
hanced by front-stoop contact stooped presidential candidate Miami knocked on his door. stopped stroking the Chihuahua. for the employment-verification President Barack Obama
with people who personally ridiculed by Donald Trump as “I’m very sympathetic to eth- Finally, Ms. Carter was con- program E-Verify and the crimi- plans to offer an upbeat look at
know Mr. Bush—will boost him “low-energy” but a two-term nic people because I’m ethnic vinced. “Can you give me some- nal law-enforcement system to America’s potential in his final
to a better-than-expected show- governor who pushed a conser- myself. I’m French Canadian,” thing to put in my yard?” A combat illegal immigration. State of the Union address
ing in the February contests. vative agenda of tax cuts, gun said the man, who declined to campaign placard was retrieved, “Federal immigration law says Tuesday night, Chief of Staff
This past weekend, more rights and charter schools. give his name. while Ms. Kopelousos went to if we apprehend an individual Denis McDonough said Sunday,
than 50 Bush alumni, mostly “I gave up knocking on doors Every so often, a member of go knock on another door. who is here illegally, they are to moving to draw a contrast with
from Florida and Washington, be deported. I will enforce the what he called the “doom and
D.C., paid their own way to law,” Mr. Cruz told CNN. gloom” of Republican presiden-
knock on doors in South Caro- —Harriet Torry tial contenders.
lina, where Mr. Bush is polling Mr. McDonough said Mr.
in fifth place with 8.5%, accord- IOWA CAUCUSES Obama will break from tradition
ing to Real Clear Politics. by eschewing the recitation of
The group included longtime
Voters Say They Go specific, year-ahead policy wish-
Republican operatives who Online for Information lists and instead offering a
worked for Mr. Bush’s father, With just weeks to go before broad and optimistic look at the
former President George H.W. deciding on a candidate, Iowa country’s potential over the com-
Bush, as well as the network of voters are still sorting through ing decades.
Hispanic professionals culti- candidates—and critiquing their ”The president is going to lay
vated by Mr. Bush’s two sons, Web and social-media efforts. out…a picture of the country
George P. and Jeb Bush Jr. Many In two weekend focus groups moving forward, focused on the
BETH REINHARD/THE WALL STREET JOURNAL
are more accustomed to hosting in Des Moines, one for Demo- future—not afraid of it,” Mr. Mc-
receptions and consulting on crats and one for Republicans, Donough said on Fox.
policy than the grind of cam- GOP pollster Frank Luntz found Mr. Obama told his staff late
paign volunteer work. that the Web wins, hands down, last year that he didn’t “want
“For someone who has never when voters look for information this to be your traditional policy
done it before, it’s a little intim- on the races. speech that outlines a series of
idating and uncomfortable to But this being Iowa, a major- proposals,” Mr. McDonough said
knock on the door of a perfect ity of Democrats and Republi- on ABC.
stranger,” said Simone cans raised their hand when The speech will hit on three
Marstiller, an assistant general asked if they had met a candi- broad themes, he said: the econ-
counsel and secretary of the De- date in person. omy, national security and civic
partment of Business and Pro- Stephanie Kopelousos, center, and former U.S. congressman Tom Feeney tried to persuade retiree Iowa Republicans said they participation.
fessional Regulation when Mr. Rachel Carter, left, to vote for Jeb Bush over the weekend in South Carolina. have an eye on the Twitter ac- —Nick Timiraos
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WORLD NEWS
Kurds Hold Out in Battle With Turkey
In urban stronghold, Kurdish-inhabited areas GEORGIA
barricades and booby Sites of Turkey's main military
operations against Kurdish insurgents
traps help rebels stall ARMENIA
AZER.
large military force Ankara
BY DION NISSENBAUM TURKEY Diyarbakir

AND AYLA ALBAYRAK 100 miles Silopi
Cizre IRAN
DIYARBAKIR, Turkey—In- 100 km
side the fortress walls of this
city on the Tigris River, bomb- Tigris R.
ILYAS AKENGIN/AGENCE FRANCE-PRESSE/GETTY IMAGES

making Kurdish militants are
facing down Turkish tanks, the SYRIA IRAQ
bodies of Kurdish fighters lie Med. LEB.
in snow-covered streets, and Sea Damascus Baghdad
thousands of civilians are
trapped by fighting that shows Sources: CIA; Institute for the Study of War THE WALL STREET JOURNAL.
no signs of easing.
Turkey’s military operation lamic history. unacceptable when it turns to
in this Kurdish stronghold is Since Dec. 2, large parts of armed resistance.”
meant to put an end to the as- Diyarbakir’s Sur District have Turkish security forces are
pirations of an emboldened been under 24-hour curfew. using tanks to demolish barri-
new generation of Kurdish Many of the 24,000 people liv- cades erected by Kurdish mili-
militants fighting for self rule ing in the now-closed military tants to mark the neighbor-
in a country that suppressed zone have fled, said Huseyin hoods where they say they
their rights for decades. The living room of Melek Alpaydin, a 42-year-old mother who was killed by fighting in Diyarbakir. Aksoy, the Ankara-appointed won’t accept Turkish govern-
But few people expect the governor of Diyarbakir. About ment rule.
showdown in the heart of Di- growing power of American- Kurdish lawmaker whom Mr. stepping up his calls for self- 4,000 residents are believed to Concerns about Turkey’s
yarbakir—the de facto Kurdish backed Kurdish fighters in Erdogan wants to see stripped rule, a politically charged be trapped in their homes military operation in Diyarba-
capital and site of one of three neighboring Syria—who are of parliamentary immunity. stance that skeptics see as a while Turkish forces try to up- kir were heightened by the
major military operations spearheading the fight against “As Kurds, we don’t want the precursor to Kurdish demands root what the governor esti- death of Melek Alpaydin, a 42-
against Kurdish militants in Islamic State—is propelling mistakes made 100 years ago for outright independence. mates to be no more than 100 year-old mother who was de-
southeastern Turkey—to bring Kurdish activists in Turkey to to be made again.” That is becoming an in- Kurdish militants. capitated by a shell or rocket
an end to the monthslong in- push for their own self rule. Mr. Demirtas leads a politi- creasing concern for Mr. Erdo- Since mid-December, when that crashed into her home
surgency that has claimed The outcome of Turkey’s cal group drawing inspiration gan, who has championed the Turkey sent 10,000 members outside the curfew zone while
hundreds of lives. broader military operation is from the successes of Kurdish expanding crackdown on Kurd- of its security forces into a she was sitting down for an
“Welcome to hell,” said a likely to have a big impact on militants in Syria, where they ish activists and insurgents military operation targeting afternoon meal with family.
member of Turkey’s elite po- the rekindled aspirations of are governing an autonomous across the country. thousands of Kurdish militants Residents in the neighbor-
lice force keeping watch at a millions of ethnic Kurds in region carved out of parts of One of the most important who have declared self-rule in hood said Ms. Alpaydin was
sandbagged checkpoint. Turkey, whose ancestors’ the country they took from Is- battlegrounds is here in Diyar- parts of cities and towns killed by an artillery shell
Turkish police have de- hopes of building a Kurdish lamic State rivals. bakir, where more than 2,000 across southeastern Turkey, fired by the Turkish military
tained scores of Kurdish lead- nation were thwarted by world “The Kurds are a growing Turkish security forces have more than 440 Kurdish fight- on Jan. 3. Gov. Aksoy said in-
ers across the country. Presi- powers after World War I. power in the Middle East,” Mr. spent weeks battling small ers have been killed, according vestigators haven’t figured out
dent Recep Tayyip Erdogan is Kurdish leaders say they Demirtas said. numbers of Kurdish militants. to the military. if she was killed by a Turkish
backing efforts to strip the want to make sure they don’t Emboldened by the gains in The militants have slowed the “It is unacceptable for military shell or by a Kurdish
country’s most prominent let this new opportunity slip Syria and prodded by Mr. Er- operations by planting hidden armed militants to be in the militant’s rocket.
Kurdish politician of immunity away. “The fate of the Middle dogan’s efforts to marginalize explosives throughout a neigh- city center,” said Gov. Aksoy. Turkish officials said they
so he can be charged for be- East is being rewritten,” said his pro-Kurdish Peoples’ Dem- borhood that is home to some “We respect people’s freedom are doing all they can to avoid
traying his country. And the Selahattin Demirtas, the top ocratic Party, Mr. Demirtas is of the oldest mosques in Is- of expression, but it becomes civilian casualties.
U.S.LaudsIraqis
ForRamadiGains
BY GORDON LUBOLD and the capabilities of the
Peshmerga, as those Kurdish
BAGHDAD—U.S. military of- forces put pressure on Islamic
ficials have expressed quali- State from the north, the fight
fied optimism about Iraqi against the militant group has
forces’ accomplishments become multipronged, U.S. of-
against Islamic State in the ficials add.
western city of Ramadi, dem- “What you’re ultimately
onstrating a determination now looking at is Daesh is be-
some American officers said ing hit on many fronts, and is
they haven’t seen in months. not simply capable of dealing
SASCHA SCHUERMANN/GETTY IMAGES
Crucial tests in the war with the level of evolving pro-

against the extremist group in fessionalism and capability
Iraq yet loom—most particu- that you see in the military
larly a difficult campaign to forces of the Iraqis,” said U.S.
retake the northern city of Lt. Col. Joe O’Callaghan, oper-
Mosul, which Islamic State ations officer for Task Force
seized in 2014. But the U.S. Erbil, in northern Iraq, using
military’s top uniformed offi- another name for Islamic
cer said American confidence State.
in Iraq forces has increased. Nonetheless, much work re-
“I believe the Iraqis now mains in the western region of Anti-immigration protesters gathered Saturday in Cologne, where over 500 complaints have been filed of alleged assault on New Year’s Eve.
have the momentum,” Marine Iraq, including in Fallujah and
Gen. Joe Dunford, chairman of
the U.S. Joint Chiefs of Staff,
said over the weekend after
visiting four sites in Iraq.
west to the city of Hit, Gen.
Dunford and other military of-
ficials said. Ramadi itself isn’t
yet a complete victory: Amid
MERKEL Paris Suspect Was in Migrant Home
FRANKFURT—A man shot and Dortmund.
served jail time in the past was
arrested on Saturday, the po-
lice said.
Even supporters of keeping
Gen. Dunford, who previ- the rubble of hundreds of U.S.- Continued from Page One and killed by police after au- “Investigations to date show Germany’s doors open to refu-
ously was commander of U.S. led airstrikes and heavy fight- The chancellor—Western Eu- thorities said he tried to attack there were no indications of gees described the Cologne
and allied forces in Afghani- ing, vestiges of Islamic State rope’s most influential political a Paris police station had re- further potential attacks,” the events as a wake-up call. They
stan, was careful to say he units remain. leader—has warned that with- sided in a refugee home in Ger- state office said. Further de- underlined the importance of a
didn’t want to overstate the The Iraqis’ ultimate test, out a united strategy, the EU’s many, officials said. tails wouldn’t be made avail- stronger police force and the
recent Iraqi successes, heavily still months away, lies in the cherished principle of open in- The crime office of the Ger- able for now, so as not to jeop- need to work harder at convey-
backed by American air power. northern city of Mosul, a city ternal borders will fall. man state of North Rhine- ardize French investigations, it ing Western values to the new
Gen. Dunford also rejected the several times the size of Ra- At home and abroad, politi- Westphalia said the man’s added. The identity of the man, arrivals. “I have no illusions:
idea that the Iraqis had ar- madi and one in which Islamic cians skeptical of Ms. Merkel’s rooms in a migrant home in who officials said tried to at- the debate over refugees and
rived at a turning point in the State is deeply entrenched. migrant policy pointed to the Recklinghausen were searched tack the station on Thursday over integration will not be the
fight against Islamic State, es- The counterterrorism force assaults as a turning point, after officials received a tip brandishing a meat cleaver and same after this New Year’s
pecially considering the mili- that led the Iraqi fight in Ra- casting the events as confirma- from investigators in Paris. wearing a fake explosive de- Eve,” said Christian Joisten, a
tant group held the initiative madi isn’t plagued by the tion of their warnings of a vio- Recklinghausen is located close vice, has yet to be established. city councilman in Cologne for
and the momentum as re- same depth of sectarianism as lent culture clash resulting to the larger cities of Essen —Monica Houston-Waesch the left-of-center Social Demo-
cently as October, when he the regular security forces, from the mass migration. crats.
first visited Iraq as chairman. U.S. officials said. However, Conservative Polish Prime tion to the crisis. the attacks and its apparent Some German lawmakers
But today, he said, he has the smaller, more specialized Minister Beata Szydlo said the Ms. Merkel described the hesitation to acknowledge that and pollsters say the Cologne
begun to see a shift with what force won’t be able to wage incidents “should shake up New Year’s Eve assaults as “re- the attackers may have been attacks won’t necessarily
has been accomplished not the broader fight on its own, public opinion at last.” UK In- pugnant, criminal offenses” asylum applicants. The police change public sentiment.
only in Ramadi but also in re- so it needs the regular forces. dependence Party leader Nigel that required a decisive re- chief, Wolfgang Albers, denied “For months people have
cent victories in Beiji, Sinjar “The big question is: So, the Farage, who advocates much sponse. “When crimes are trying to cover up the back- been saying, ‘The mood is
and other areas of Iraq. Iraqis can clear terrain, but stricter immigration policies committed, and people place grounds of suspected attack- about to swing,’ and it hasn’t
“I feel comfortable saying can they scale that up, and and wants his country to leave themselves outside the law ers. swung. The mood has stayed
the Iraqis have the momentum hold a large city like Ramadi the European Union, warned then there must be conse- The attacks have also pro- stable,” said Manfred Güllner, a
in Iraq,” Gen. Dunford said as or even Mosul for a large pe- the events in Cologne were quences for asylum claims,” voked an emotional debate in prominent German pollster.
he wound up his trip. riod of time?” said Phillip “not far removed from us” in she said. Germany on how to deal with Still, the tensions on display
U.S. officials say Islamic Carter, a senior fellow at the Britain, adding, “Whilst these Whether this response will sexual violence. Cologne Mayor in Cologne showed how deeply
State has lost about 40% of Center for a New American Se- men may not have EU pass- suffice to quell the public’s Henriette Reker drew heavy the reports of mass sexual as-
the terrain it once held across curity, a think tank in Wash- ports, they soon will.” concerns is uncertain. A poll criticism after saying that saults have rattled Germany.
Iraq. Between the resiliency of ington. “Those capabilities will The German chancellor re- published by the Sunday edi- women should keep an arm’s Mesic Ismeta, a 47-year-old
the Iraqi forces in the south take much longer to build than acted to the public outrage tion of the influential tabloid length distance from men in who said she herself came
a 1,000-person counterterror- over the assaults with what Bild showed 49% of Germans situations that could escalate. from Bosnia to Germany as a
ism force.” has become her trademark feared a repeat of the Cologne She later apologized, saying refugee in the 1990s, said that
Gen. Dunford’s assessment strategy after 10 years in events in their hometowns. she didn’t mean to set a code she was having second
echoes that of other U.S. offi- power: She sought to channel Similar New Year’s Eve as- of conduct for women and that thoughts about supporting an
AGENCE FRANCE-PRESSE/GETTY IMAGES
cials who believe the Ramadi the public mood without sub- saults were reported on a the attackers were the ones reopen-door migrant policy.
battle underscores the grow- stantially changing course. smaller scale in the cities of sponsible in cases of sexual vi- “I was always in favor and
ing capabilities of Iraqi forces. She used tough language af- Hamburg and Stuttgart. olence. now I’m wondering whether
The battle plan for Ramadi, ter a meeting of senior party Authorities, who have de- While 19 people had been what I thought was right,” she
which Iraqis showed Gen. Dun- officials on Saturday, pledging scribed the violence in Cologne identified as possible suspects, said, standing on the train sta-
ford when he last visited here to more aggressively deport as unprecedented in the coun- the police continued to analyze tion square where the New
in October before the Iraqis migrants convicted of crimes. try, have also said that most video footage and witness Year’s Eve assaults were al-
attempted to retake the inside But she gave no indication that potential suspects had applied statements to determine leged to have occurred. “I
of the city, was much the way she would back away from her for asylum in Germany or were whether those people could be think every woman is afraid to
the battle actually played out. refusal to cap the number of in the country illegally. Co- tied to specific crimes. In addi- walk around here.”
Gen. Joe Dunford, right, with That reflected a new level of refugees Germany accepts or logne’s police chief was forced tion, a 19-year-old Moroccan —Monica Houston-Waesch
Turkish Premier Ahmet maturity in the Iraqi approach, from her insistence that Eu- out Friday amid criticism over man who was known to au- and Andrea Thomas
Davutoglu, in Ankara last week he said. rope come up with a joint solu- the police’s failure to prevent thorities since 2013 and had contributed to this article.
WORLD NEWS
World
Watch
Egypt Convenes First Parliament in Four Years
BY TAMER EL-GHOBASHY ment has been characterized a document ratified in 2014 of the popular uprising that some newcomers who have de-
by Mr. Sisi as the final step in that gives the House of Repre- overthrew former President scribed the 2011 uprising as a
CAIRO—Egypt’s first parlia- a “road map to democracy” sentatives unprecedented Hosni Mubarak. catastrophe for Egypt and see
ment in nearly four years was that began when—as military powers to remove the presi- Members of the legislature Mr. Sisi as the only person who
sworn in on Sunday, with chief in 2013—he removed dent or prime minister. were elected during polls held can restore security and repair
YEMEN many prominent legislators Egypt’s first freely elected But the Egyptian Parlia- from October through to De- the floundering economy.
saying their priority is amend- president, the Muslim Brother- ment’s makeup reflects Mr. cember that were marked by Following the regional and
Deadly Strike Hits ing the constitution to further hood’s Mohammed Morsi. Sisi’s tightening grip on power lackluster voter turnout. local rise of Islamic State, Mr.
Hospital in North empower President Abdel Fat- A record 596 lawmakers as the Arab world’s most popu- The parliament reflects the Sisi has secured international
A projectile hit a Doctors tah Al Sisi. took individual oaths pledging lous country approaches a po- return of figures from Mr. support for his opposition to
Without Borders hospital in The convening of the parlia- to uphold Egypt’s constitution, tentially testy fifth anniversary Mubarak’s era, along with extremist groups.
northern Yemen on Sunday, kill-
ing at least four people and in-
juring 10, the medical-aid group
said, the latest in a string of
deadly incidents at its facilities
in the country.
Doctors Without Borders said
the hospital in Razeh, a district
in Yemen’s Saada province, was
hit at about 9:20 a.m. local time.
The explosion destroyed several
buildings in the complex, the
group said. It couldn’t confirm
the origin of the attack.
A Saudi-led military coalition
has been conducting airstrikes in
Yemen since March, aiming to
unseat Houthi rebels who are
backed politically by Iran, Saudi
Arabia’s regional rival. Saada
province is a Houthi stronghold.
Tamim al-Shami, a spokes-
man for the Houthi-run health
ministry, blamed a coalition
strike for the destruction of the
hospital. The Saudi-led coalition
couldn’t immediately be reached
for comment. —Asa Fitch
SPAIN
Separatist Elected
Leader of Catalonia
Separatist legislators in
Spain’s wealthy Catalonia region
elected a new president on Sun-
day, overcoming months of in-
fighting and ratcheting up pres-
sure on national leaders to set
aside their differences and form
a government to thwart the se-
cession bid.
The Catalan parliament
elected Carles Puigdemont, a 53-
year-old mayor and head of an
association of separatist munici-
pal leaders, as regional president.
He has said he is committed to
making Catalonia an indepen-
dent nation within 18 months.
His unexpected ascent came
through an 11th-hour deal on
Saturday between the main pro-
independence ticket and a small
far-left separatist party that
stubbornly objected to the re-
election of incumbent Artur Mas.
Had no president been elected
by midnight Sunday, Catalonia
would have been required to
hold new regional elections.
—Matt Moffett
AFGHANISTAN
Delegates to Try to
Revive Peace Talks
Delegates from Afghanistan,
Pakistan, the U.S. and China are
set to meet Monday in an effort
to revive collapsed Afghan peace
talks and bring an end to the
government’s long-running war
with the Taliban.
The U.S. in recent months
has been pushing the Afghan
and Pakistani governments to
renew efforts to restart the
peace process, which broke
down in July amid disagree-
ments on who would assume
the leadership of the Taliban.
At the top of the agenda for
Monday’s talks in Islamabad is a
proposal from the Afghan gov-
ernment in Kabul to identify in-
fluential Taliban representatives
who could be approached for
talks and commit to fighting
others, said Afghan and Pakistan
officials attending the one-day
meeting. Taliban representatives,
who have declined to comment
on the meeting, weren’t ex-
pected to attend.
—Jessica Donati
SAUDI ARABIA
Arab League Offers
Support in Iran Spat
The Arab League backed
Saudi Arabia in its diplomatic
spat with Iran, triggered by the
kingdom’s execution of a dissi-
dent Shiite cleric, condemning
Tehran for failing to protect
Saudi diplomatic sites in the
Persian country.
“The Arab League won’t ac-
cept Iranian intervention in the
Arab region and sowing sectar-
ian strife,” Secretary-General
Nabil al-Araby said in a televised
news conference at the league’s
Cairo headquarters after an
emergency session that Riyadh
requested.
All member states supported
the statement except Lebanon,
which has a large Shiite popula-
tion and strong political ties
with Tehran.
Sunni Saudi Arabia and Shiite
Iran are vying for more influence
across the Mideast, mostly along
sectarian lines.
—Tamer El-Ghobashy
WORLD NEWS
A British Threat That Can’t Be Ignored ‘ElChapo’Felled

ByQuestforFame
BY JOSÉ DE CÓRDOBA him global notoriety.
AND DUDLEY ALTHAUS “He was interested in see-
ing the story of his life told on
MEXICO CITY—Mexican film but would entrust its tell-
EUROPE FILE crime king Joaquín “El Chapo” ing only to Kate,” wrote Mr.
SIMON NIXON Guzmán was behind bars on Penn in an article published in
CHRISTOF STACHE/AGENCE FRANCE-PRESSE/GETTY IMAGES
Sunday in the same maximum- Rolling Stone magazine on

security prison from which he Saturday night. The article de-
A British referendum on escaped six months ago, his tailed Mr. Penn’s visit with the
whether to remain a member dreams of movie glory dashed drug lord in October.
of the European Union is the thanks in part to an interview Mr. Guzmán had been
single biggest “known un- he gave to actor Sean Penn. drawn to Ms. del Castillo since
known” hanging over the Eu- Mexico’s government tried she came to his defense in a
ropean economy. to reassure citizens that this letter distributed through
The vote now seems al- time around, the country’s Twitter in 2012.
most certain to take place most famous inmate wouldn’t “Señor Chapo, wouldn’t it
this year. Prime Minister Da- escape—as he twice did from be cool that you started traf-
vid Cameron hopes to achieve federal prisons here. ficking with love? With cures
a deal at a summit in Febru- Mexico’s National Security for diseases? With food for
ary on the changes to the re- Commission said it had up- homeless children…?” wrote
lationship that he thinks are graded emergency protocols Ms. del Castillo in the letter,
necessary to U.K. leader David Cameron, in Germany on Thursday, hopes Britons will back EU membership. and the technology used to su- which caused a furor on Mexi-
persuade pervise staff and inmate move- can social media. She dis-
Britons to paigned for Brexit are un- Europe could stoke new ten- beyond the U.K. ments. It said the prison meets missed the criticism.
back contin- likely to trust Mr. Cameron sions in the province. Meanwhile, a Brexit would strict international standards. Ms. del Castillo became an
ued member- with the task of negotiating a A third area of concern throw the wider European In a cinematic twist, Mexi- American citizen in September,
ship. EU offi- complex and politically for investors is the future re- project into disarray, absorb- can officials said Mr. Guzmán’s tweeting a photo of herself at
cials say the fraught divorce settlement. lationship between the U.K. ing precious political space hope to have his life story the naturalization ceremony
parameters of the deal are al- and EU. As things stand, needed to focus on steps to turned into a biopic by Mr. with a message for Donald
A
ready hammered out. ny political instability those campaigning for Brexit bind the eurozone closer to- Penn and Kate del Castillo, a Trump, letting the Republican
Bookmakers put the arising from a rupture are unable even to agree gether, including completing Mexican actress famous for presidential candidate know
chance of Britons voting to within the Conserva- among themselves what kind its banking union and devel- playing a drug boss, helped there was one more American
leave the EU at 36%. That is tive party would likely be of future trading arrange- oping new mechanisms to lead security forces to the who doesn’t support him.
roughly the same probability compounded by wider insta- ment the U.K. should de- help the currency bloc re- drug lord. Mexican government offi-
implicitly assumed by institu- bility within the U.K. A Br- mand, let alone what kind of spond to economic shocks. Mexican officials said they cials said the two actors are
tional investors, according to exit vote would raise doubts arrangement the EU might located Mr. Guzman’s hideout under investigation, although
I
a survey by Absolute Strat- about the long-term viability be willing to concede. nevitably, a Brexit would in part by tracking the interac- the officials declined to give
egy Research. There may be of the political union among What is clear is that an raise questions about tions between the actors and more details of the probe. Ana-
powerful reasons to believe England, Scotland, Wales EU-lite arrangement similar whether other non-euro- Mr. Guzman’s lawyers. lysts say it is unlikely Mr. Penn
that Britons will ultimately and Northern Ireland. It to those currently enjoyed zone countries would follow The drug lord was recap- or Ms. del Castillo would be
vote to remain, particularly would be bound to trigger by Norway and Switzerland the U.K., sapping the EU of tured on Friday. The Mexican charged with any crime. Mara
when urged to do so by Mr. demands for a fresh vote on is out of the question, and the cohesion it needs to ad- government on Saturday said Buxbaum, a spokeswoman for
Cameron. But the possibility Scottish independence. Mr. Cameron has already ex- dress other common chal- it had restarted proceedings to Mr. Penn, and Ms. del Castillo’s
of a “Brexit” can hardly be A Brexit vote also risks plicitly ruled them out. Such lenges including the migra- extradite Mr. Guzmán to the spokesman declined comment.
dismissed as a minor risk. In- profoundly destabilizing the an arrangement would re- tion crisis, deepening of the U.S., where he faces charges “The main question to ask
vestors should prepare them- peace process in Northern quire the U.K. to continue to single market, and relations that include drug trafficking, is: Did this person do anything
selves for the consequences. Ireland. The Irish government accept the right of EU citi- with Russia, leaving the con- homicide and money launder- that’s in furtherance of the
Of course, the greatest im- has repeatedly argued that EU zens to live and work in the tinent more vulnerable to ing in multiple federal jurisdic- criminal activity?” said Dan
pact would be on the United membership has played a sig- U.K., the very issue that is economic shocks. tions. That process is likely to Suleiman, an attorney at Cov-
Kingdom itself. This would be nificant role in bringing peace most likely to have swung That could undermine take months. ington & Burling LLP in Wash-
felt via three main channels. to the province, providing a voters against continued corporate confidence just as Mr. Guzmán has long been ington, D.C.
The first is the risk of serious neutral space where the two membership. the eurozone urgently needs the stuff of legend in Mexico, U.S. law states that the ac-
political instability. Although sides could meet as equals. Many economists agree increased business invest- particularly after slipping out tor couldn’t be charged as be-
Mr. Cameron would likely to The prospect of establishing a that the combined impact of ment to help broaden a re- of a maximum-security prison ing an accessory after the fact
try to stay on as prime minis- new external EU border—po- this uncertainty is bound to covery currently overreliant in 2001 by hiding in a laundry unless he assisted Mr. Guzmán
ter even if defeated in the ref- tentially introducing new re- damage confidence and in- on consumer spending. A Br- cart and eluding capture for 13 “in order to hinder or prevent
erendum—he said as much in strictions on the freedom of vestment, damaging growth exit-induced resurgence in years, becoming the world’s his apprehension,” said former
a TV interview Sunday—it is movement of goods and peo- and weakening sterling. But the euro crisis would have most successful narcotics traf- federal prosecutor Jimmy Gu-
unlikely he could cling on for ple—along one of the most the economic consequences global consequences. That ficker along the way. But his rulé, now a law professor at
long. Those who had cam- volatile political fault lines in of a Brexit would be felt well much is a known known. second escape last July earned the University of Notre Dame.
EXPERIENCE
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with meat — taste a curated three-course meal inspired by Bloomfield’s new cookbook
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NEW YORK, NY | JANUARY 28, 2016
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CIONETWORK
ANNUAL MEETING
FEBRUARY 1–2, 2016 | HALF MOON BAY, CA
This year’s meeting will tackle the critical enterprise computing issues affecting business
today. Technology is radically changing the business landscape. How can chief information
officers and other top executives managing data deploy the best technology to address
competition, strategy, analytics and network vulnerability? The Journal is pleased to present
speakers at the forefront of managing change. They will share insights on maximizing new
technologies and the cost of falling behind.
FEATURED SPEAKERS INCLUDE:
BEN GOLUB AARON LEVIE

CEO / Docker CEO, Co-Founder and Chairman / Box
Containment Policy: What does the Organizing the Business: Where is

innovation of container technology the future of enterprise cloud
mean for business? And when should computing headed?
a company make the leap?
HILARY MASON GEN. MICHAEL HAYDEN

CEO and Founder / Fast Forward Labs Principal / The Chertoff Group
Director / CIA (2006-2009)
Bring on the Data: Big data has launched Director / NSA (1999-2005)
a boom industry in data analytics and
science. Where’s this revolution headed Cybersecurity: A report from the
and how can companies turn all this data front lines.
to competitive advantage?
AND ALSO FEATURING:
STEWART BUTTERFIELD ANDY OZMENT

Co-Founder and CEO / Slack Assistant Secretary, Office of Cybersecurity and
Communications / U.S. Department of Homeland Security
ANDY D. BRYANT
Chairman / Intel Corporation TOM REILLY
CEO / Cloudera
DAWN LEPORE
Former CEO / Drugstore.com PETER SONDERGAARD
Former CIO / Charles Schwab SVP, Research / Gartner, Inc
PROUDLY SUPPORTED BY:
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A12 | Monday, January 11, 2016 THE WALL STREET JOURNAL.
FROM PAGE ONE
CARS past, Berkshire CEO Warren

Buffett has said that Geico
doesn’t see evidence that us-
age-based pricing would pro-
Continued from Page One vide an advantage. Through a
moting plug-in devices and/or spokeswoman, he declined fur-
smartphone applications, as ther comment.
well as cutting deals to piggy- State insurance regulators
back on auto makers’ in-car generally have welcomed us-
computers, all in hopes of get- age-based insurance programs
ting sensors into cars. because they are voluntary and
For insurers committed to provide the opportunity for
this new way of sizing up acci- drivers to learn how to improve
dent risk in policyholders, the their driving. Still, location
appeal is that they can better tracking raises bigger concerns,
identify safe drivers, who are and not just for the privacy im-
less likely to file claims, and plications, some consumer ad-
entice them with discounts off vocates caution.
the conventional pricing—po- Some people could get
tential reductions up to about higher pricing “not because of
30% are possible. The goal is to the manner of driving, but be-
keep those less risky customers cause of where and when they
DUSTIN FRANZ FOR THE WALL STREET JOURNAL

long-term, while riskier drivers drive due to long commutes to
facing rate increases could be work or driving through neigh-
motivated to shop around. borhoods disfavored by insur-
Progressive, the fourth larg- ers,” says Birny Birnbaum, a
est U.S. auto insurer, says former Texas insurance regula-
nearly 80% of drivers qualify tor who now heads an Austin-
for discounts. Until recently, it based nonprofit, Center for
and other companies running Economic Justice, which advo-
these programs haven’t sur- cates for low-income consum-
charged those drivers they ers.
learn through monitoring are Progressive’s Mr. Pratt says:
worse than the traditional “It’s too early to tell how loca-
methodology indicated, in the Progressive CEO Glenn Renwick stands in front of a portion of the company’s servers that collect data on customers’ driving habits. tion data may factor into deter-
interest of attracting as many mining rate.”
participants as possible and posed more risk than those meant data could be sent di- Insurers are still on a learn-
building up databases to ana- with speeding tickets. rectly to Progressive’s comput- Behavior Problems ing curve when it comes to us-
lyze, though Progressive in late In the 1990s, its analysts ers. It began rolling out a rede- Top driving behaviors reported for drivers and motorcycle age-based systems. Last year
2014 began levying surcharges helped establish a correlation signed version in 2010, calling operators in fatal crashes, 2013 for instance, Progressive con-
of up to 10% in some states. between credit histories and it “Snapshot.” The name re- cluded Snapshot was overesti-
Progressive has about a claims by testing a hypothesis flected a changed tack: Instead Behavior Share of crashes in which behavior was reported mating the potential for acci-
quarter of its new customers that financially responsible of monitoring drivers all the Driving too fast for conditions dents from midnight to 4 a.m.
or speeding or racing 20%
using its monitoring device. people are more cautious driv- time, it decided to limit its as- driving on week nights, and
Allstate, which got into the ers. They factored that into sessment period to six months. Under the influence of alcohol,
14
now considers late-night driv-
game later but is ahead of Pro- pricing, so some applicants Mr. Renwick, a former engi- drugs or medication ing to be high-risk only on
gressive in rolling out a smart- who on the surface look risky neer at Bell Labs, says the com- Failure to keep in proper lane 8 weekends.
phone-application, says its could end up paying less, and pany concluded most people Insurers and their trade
take-up rate is about one in vice versa. Many rivals fol- have repetitive commuting pat- Failure to yield right of way 7 groups note that usage-based
three. lowed suit. terns and driving behavior, so programs are subject to regula-
Progressive’s managers then managers decided it would be Distracted (phone, talking, tory review by state insurance
7
proposed gathering informa- enough to just take a snapshot, eating, etc.) departments and must be in ac-
Winning trust tion directly from cars in hopes after which the device would Driving in a careless manner 5 cordance with laws that pro-
Chief Executive Glenn Ren- of crafting truly individualized be removed. hibit unfair pricing practices.
wick says Progressive recog- rates. Since 2008, nearly four mil- Overcorrecting/oversteering 5 To attract more users, All-
nized from the beginning that Over the next decade, it lion drivers have participated state in August announced new
it would be an uphill battle. tested a series of devices that in Progressive’s program. The Failure to obey traffic signs, features for users of its usage-
4
signals or officer
Early company surveys of peo- had to be installed or plugged most powerful predictor of ac- based “Drivewise” program.
ple’s interest in usage-based in- into a customer’s car. The de- cidents, the company says, is Swerving or avoiding* 4 They include points for deals
surance revealed that about vices were too cumbersome to hard braking. Progressive de- on merchandise, gift cards and
40% of people had a viewpoint catch on with the broader pub- fines that as a decline of 7 Driving in erratic, reckless, local offers through safe-driv-
or negligent manner 3
that was some variation on “No lic and too expensive for Pro- miles an hour in the space of a ing challenges, such as driving
way in hell.” gressive to put into widespread second. Progressive’s device *Due to wind, slippery surface, other vehicle, object, nonmotorist in roadway, etc. below 80 miles an hour and
“Insurance is not something use. beeps every time it senses a Note: More than one behavior may be present for the same driver/operator. avoiding hard braking for three
where people say, ‘I trust Still, Progressive gleaned hard brake to make drivers Source: National Highway Traffic Safety Administration via Insurance Information Institute straight days.
you,’ ” he says. new information, such as a aware of the risky behavior. THE WALL STREET JOURNAL. Allstate, which launched its
Progressive traces its inter- mile driven at 2 a.m. was in The conventional approach plug-in device in 2010 and the
est in data to its entry into the general four or five times risk- of grouping insurance appli- During her six-month Snap- Progressive’s computers after cellphone version four years
car-insurance business in 1937, ier than one driven at 7 a.m. cants into demographic pools shot test, she recalls a handful the six-month period is over. later, says about 925,000 of its
after other insurers had largely One early device contained reflects findings including that of beeps for hard braking. Progressive hopes to coax 20 million policyholders are
cornered the market for the Global Positioning System tech- the average married male is 3% Ms. Irwin says she recom- more participation out of its enrolled in its program. It is
safest drivers. Left to pick nology, but because location more likely to have an accident mends the program but notes customers when it launches a cutting expenses elsewhere but
through pools of rejects, Pro- tracking turned off so many in a given year than a married her friends don’t always bite. smartphone-app version of its not with Drivewise.
gressive studied accident re- consumers, Progressive female, according to Progres- “They have privacy concerns,” device in 2016. “We’re investing quite heav-
ports to find the relatively bet- stripped it out. sive. But married males with she says. David Pratt, who runs Pro- ily,” Allstate CEO Thomas Wil-
ter risks. It discovered, for In 2008, Progressive came the fewest hard brakes are 41% gressive’s Snapshot program, son said.
instance, that older people who out with a device that used less likely to have an accident says smartphones have made Technological innovation is
failed to yield at intersections wireless technology, which than the typical married female The ‘bunker’ Americans more comfortable rapidly eliminating some of the
as determined by the conven- At Progressive, data on with location tracking, so the hitches in the monitoring pro-
tional methodology, according about a million new trips pour company is once again re- grams. State Farm has a cell-
to Snapshot data. in each day, and are logged in searching GPS use, including in phone-app program in Ohio in
Allstate also tracks hard computer servers housed in a some of its Snapshot devices. which it provides, free, a small,
braking, defining it as a de- building called the “bunker” at With the spread of smart- Bluetooth beacon that a policy-
crease in speed of 8 miles an the company’s headquarters. phones lowering the barrier to holder puts in a glove compart-
hour or more in a second. The The servers hold data on 15 bil- entry, small and midsize insur- ment so that the app tracks
company has found that drivers lion miles of driving. ers are plowing ahead, tapping driving behavior only when the
who slam on brakes more than Progressive’s privacy policy into the large number of con- policyholder is in that particu-
eight times every 500 miles are says that Snapshot data is en- sulting firms, app developers lar car, as opposed to a taxi,
73% more likely to get into an crypted when transmitted to its and device makers available to bus or someone else’s car as a
accident in a given year. servers. According to the pol- help. passenger. Under many other
Customers who have signed icy, Progressive won’t sell per- Companies that don’t offer a cellphone apps, a policyholder
up include Vanessa Irwin of sonally identifiable Snapshot usage-based program could be has to go into the app to strike
Farwell, Mich. Three years ago, data to third parties, and it impacted by “adverse selec- out a given trip if he or she
she was attending community won’t use the data to resolve tion,” according to Carl Smith, wasn’t actually behind the
college, working part time and insurance claims without first a director of product manage- wheel.
couldn’t afford the couple hun- obtaining permission. It also ment in the U.S. car-insurance Paul Saffo, a specialist in
dred dollars a month she was won’t share the data with any operations of Spanish insurer technological change who
quoted to cover a 2003 Chevro- third parties “unless it’s neces- Mapfre SA, meaning they could teaches forecasting classes at
let Impala, thanks to a ticket sary or appropriate to service be stuck with many bad drivers Stanford University, sees usage-
for speeding on a 70 mph your insurance policy, detect or as rivals’ usage-based pro- based pricing as “probably in-
stretch of highway. Then her prevent fraud, perform re- grams attract good ones. Map- evitable long-term.” He says
grandmother saw Progressive’s search, or comply with the fre began rolling out a program U.S. consumers have shown in
Snapshot commercials. law,” such as in response to a in 2012. recent decades a willingness to
“My grandma kinda talked subpoena in a civil lawsuit or Among the few big insurers sacrifice privacy for conve-
VANESSA IRWIN
me into it,” says Ms. Irwin, now by police when investigating that have yet to publicly ac- nience, and he believes they
22 years old. “She said, ‘What the cause of an accident. Pro- knowledge at least experiment- will continue to do so even as
can it hurt if it saves you gressive said it has received ing with usage-based insurance they complain.
money?’ ” Within a month, her subpoenas in “a small number is Berkshire Hathaway’s Geico “Privacy already has shifted
Vanessa Irwin uses Progressive’s Snapshot program. She says rates were cut by 30% to about of instances,” declining to pro- unit, which has bigger market from being a right to a good
she recommends it, but that her friends have ‘privacy concerns.’ $165 a month. vide specifics. The data stays in share than Progressive. In the that is purchased,” he says.
SCI-FI Krypton’s solar system down

to atmospheric density.
“That ripples down through
the costumes, the way the char-
says Jeremy Latcham, senior
vice president of production and
development at Marvel Studios.
“There was a long time when
into her one-woman show,
“Einstein’s Girl.”
The Exchange’s Mr. Loverd
acknowledges getting the minu-
The Exchange organizes
about 25 events yearly, from
loft parties with lectures on
topics like wormholes or hover-
Dr. Cail, the psychopharma-
cologist, says Marvel called
last year for help designing a
plausible serum to give a
Continued from Page One acters talk,” says Mr. Goyer. every movie had an electromag- tiae correct services “that small boards, to intimate salons in “S.H.I.E.L.D.” character super
ence more than ever. Exchange members are netic pulse in it,” he says. “For percentage of the population Hollywood mansions. “Family strength. Her solution: an ana-
There’s a hotline for that: global. When screenwriters for us to be cool now, we have to that can understand this stuff.” Guy” creator Seth MacFarlane bolic androgenic steroid mixed
844-NEED-SCI. a monster movie had questions riff on the real stuff.” But writers face fans who hosted one on evolution. with a liver-enzyme inhibitor.
It connects to the Science and about the Erebus Ice Tongue Exchange scientists aren’t have turned the Web into an ac- Some soirees match screen- Marvel says the screenwriters
Entertainment Exchange, the glacier, the Exchange connected paid. They often sign agree- countability tool. And shows like writers with scientists in added “gorilla testosterone
loft party’s host. Funded by the them with a member in nearby ments not to spill details and “MythBusters” have popularized events the Exchange calls and a drop of peppermint.”
nonprofit National Academy of Antarctica. typically don’t get into the movie-science debunking. “speed-dating,” including one Dr. Cail, who moonlights as
Sciences, it has more than 2,700 The Exchange isn’t trying to credits. There are also academic last month at NeueHouse Hol- a stuntwoman, gets an Ex-
scientists on call. play scientific gotcha with Hol- They have consulted on more critiques. The 2013 space lywood, a Sunset Boulevard change call every few months,
If something is “wrong” with lywood, says Jessica Cail, a Los than 1,300 projects. A quantum drama “Gravity” was a hit, but space where Lucille Ball and and “I go right to the jour-
a script, says Rick Loverd, the Angeles psychopharmacologist field theorist helped screenwrit- astrophysicist Neil deGrasse Ty- Orson Welles once worked. nals.” She also gives tips to
Exchange’s program director, it who has consulted through it on ers explain the quantum realm son publicly raised questions: “Enter the nerds,” said the help actors accurately portray
is often because the screen- projects like “Marvel’s Agents of mechanics that shrank Paul Why did satellite debris orbit Exchange’s Mr. Loverd, survey- the effects of drugs.
writer has underestimated how S.H.I.E.L.D.” Rudd in “Ant-Man.” east to west, and why didn’t ing the lobby. But the Exchange doesn’t
science has evolved. “They’re Her goal isn’t to make Producer Adam Fratto says Sandra Bullock’s hair float in Scientists, including an as- want to be the “correctness
writing something that they scripts worthy of peer review, he asked the Exchange whose zero-G? The movie makers, Dr. tronomer and microgrid spe- police,” says NAS President
think is futuristic, but it’s not.” she says. That would put audi- job it was to respond to alien Tyson says in an email, “needed cialist, shuttled room-to-room Ralph J. Cicerone, who started
David S. Goyer, co-writer of ences to sleep. In finding a contact. It put him in touch that twist of reality to intensify for seven-minute sessions. it in 2008 after conversations
the coming “Batman v Super- middle ground between fan- with the Planetary Protection the story.” Discussing cyberterrorism with “Airplane!” director Jerry
man: Dawn of Justice,” tapped tasy and realism, she says, she Officer at the National Aeronau- Audiences have finite during a panel at evening’s end, Zucker.
the Exchange while developing wants to make the science tics and Space Administration. “buys”—creative allowances— Maynard Holliday, a Pentagon In the end, says “Krypton”
“Krypton,” a TV show about seem “plausible-ish.” Los Angeles actress Gia they will give a movie, says robotics engineer, said a cyber- screenwriter Mr. Goyer, “how
Superman’s home planet. At Science-fiction features of Mora says she once asked an Marvel’s Mr. Latcham. The high- attack may require a “kinetic accurate can you make a
an Exchange event, he met the 1950s could chalk up mutant Exchange physicist how to tech Iron Man suit, he says, response,” with ground troops. movie about a guy who leaps
planetary scientist Kevin superpowers and other anoma- properly incorporate a joke “feels attainable” because it is “Movie title!” shouted some- over tall buildings in a single
Hand, who helped design lies to atomic gobbledygook, about NASA’s Bicep2 telescope based on plausible science. one. bound?”
OPINION
China Disappears Information BOOKSHELF | By Jeffrey Collins
Analysts
trying to
under-
Four bookstore employees
disappeared in October, three
while visiting the mainland and
mouthpiece Xinhua warned
that “malicious” short sellers
must be dealt with in a “firm-
investors are in the dark, and
China’s 90 million individual
shareholders even more so.
The Commercial
stand the
volatile
Chinese
one in Thailand. Last month
co-owner Lee Bo vanished. “I
am not worried,” he had told
handed manner.”
The bellwether was the
arrest of Wang Xiaolu, a
When mainland
blocked Web searches for
censors
“stock market crash,” Chinese

Philosopher
INFORMATION s t o c k the South China Morning Post. financial journalist at Caijing, investors who incurred losses
AGE market
should
“I have avoided going to the
mainland for years.” It turned
an independent Beijing-based
magazine, who reported in July
resorted to black humor on
social media. “Last month, my
Hume: An Intellectual Biography
By L. Gordon
pay a out he wasn’t safe in Hong that the government planned to dog ate what I ate,” one wrote. By James A. Harris
Crovitz
visit to a Kong. British Foreign Secretary “Last week, I ate what my dog (Cambridge, 621 pages, $55)
I
gritty Philip Hammond last week ate. This week, I ate my dog.”
building on Lockhart Road in complained in Beijing about There is a connection In addition to booksellers n the summer of 1776, the celebrated diarist James
Hong Kong. They’ll find a re- the snatching of Mr. Lee, a and journalists, Beijing has ar- Boswell visited the Edinburgh home of David Hume,
minder of the risks of operat- British citizen, calling it an between Beijing’s rested numerous senior finan- where the philosopher lay dying. Hume, atypically thin
ing in an authoritarian country “egregious breach” of China’s repression and last cial executives. Among them and “ghastly” in pallor, was nevertheless “placid.”
where providing information commitment to respect Hong are senior bankers at the Citic Interrogated by Boswell, he affirmed his view that the
is a crime. Kong’s rule of law and freedom week’s market shocks. brokerage as well as the presi- afterlife was an “unreasonable fancy.” With “death before his
On the second floor is of speech. dent of the country’s first eyes,” Boswell reported, Hume blithely predicted his own
Causeway Bay Books, long a There’s a connection be- private bank, China Minsheng. annihilation. “I maintained my faith,” wrote Boswell, but “left
popular destination for main- tween Beijing’s repression and pull back on propping up the Some arrests relate to corrup- him with impressions which disturbed me for some time.”
land visitors looking for infor- last week’s collapse of its stock market. Mr. Wang was tion, but others are for no This scene often serves as a miniature representation of
mation banned at home. It’s stock market. International detained, then forced on reason but to control markets. Hume’s career. Boswell’s watery piety crashes against
closed, at least temporarily, af- investors have long trusted national television to confess In all, executives from 34 Enlightenment reason. Superstition flinches before
ter five owners and employees Hong Kong as a haven for that he had published “private companies have disappeared, knowledge. The sang-froid of Hume’s godlessness amazed
were “disappeared”—appar- information about China. The information” and brought with only some reappearing. contemporaries, and modern atheists have treasured the tale.
ently snatched and detained Communist Party has always “great losses to the nation and Among those was Guo James A. Harris’s “Hume:
by mainland security forces— censored political speech in investors.” Guangchang, chairman of the An Intellectual Biography”
for selling books that offend China, but until recently the Publishing private informa- Fosun Group, who is known as punctures most of this
Beijing. Politburo understood that tion about markets is central China’s Warren Buffett. His in- mythology. Though an atheist,
The case shows Beijing is being part of global markets to financial journalism. Mr. terests include Cirque du Hume was nowhere near as
willing to create international requires an open flow of infor- Wang’s reporting about gov- Soleil, Club Med and the for- dogmatic as his current
incidents to control informa- mation. Beijing’s censorship ernment plans was accurate, mer Chase Manhattan Plaza in admirers. He was certainly not a
tion. Just before the store now suppresses economics as which was no defense. In- downtown Manhattan. Brokers rationalist. His reputation for
closed, its two best sellers well as politics. stead, Beijing used his case to and hedge-fund managers are philosophical intrepidity, fur-
were “2016: Collapse of the Chinese share prices have instruct other journalists it is also among the mysteriously thermore, has been overblown.
Communist Party of China” fallen 40% since summer. Bei- now a crime to report accu- missing. David Hume was born in 1711
and “Shen Bing’s Account: My jing is eager to stop the decline, rate information about mar- Global finance depends on a in Scotland, the third child of a
Story With Zhou Yongkang,” in with the government buying kets. The Chinese propaganda free flow of information. gentrified lawyer. He would spend
which the author, a state-TV shares directly as well as ministry issued a directive: “Do World markets are in un- much of his life at the family’s
anchorwoman, describes her through pensions and pressur- not use emotionally charged charted territory now that the country home, Ninewells. As a
affair with Mr. Zhou, a former ing patriotic brokers. It bans words such as ‘slump,’ ‘spike’ world’s second-largest econ- younger son, Hume required an occupa-
Politburo member now impris- large owners of a stock from or ‘collapse,’ ” it instructed. omy is censoring within and tion. He flirted with law and business and enjoyed some mi-
oned for corruption. There’s selling more than 1% of total “Do not conduct in-depth beyond its borders. The lesson nor government jobbery. But he always wished, Mr. Harris
speculation that the disap- shares at once and requires analysis, and do not speculate from China is that markets writes, “to live the life of a man of letters.” This aspiration
pearances are meant to stop a them to inform exchanges on or assess the direction of can’t function smoothly when was just becoming possible as an expanding commercial
planned book about the love three weeks in advance to sell the market.” accurate information is disap- print market replaced a reliance on aristocratic patronage.
life of President Xi Jinping. shares at all. The official The result is that global peared. Writing would eventually make Hume rich and famous,
but for many years he lived a transitory, modest life. He was
often unhappy. For much of the early 1730s, Hume endured
North Korea’s Cuban Friends an emotional breakdown. During this time, and periodically
thereafter, he lived with his family—unable to establish him-
self in the world and crippled by depression (the “disease of
You’d think story that the State Depart- the State Department’s list of pledged its loyalty to North the learned,” as one of his doctors called it). His gloom
that North Ko- ment became aware in June state-sponsors of terrorism. Korea. In March 2015, accord- emerged from his reading and from the belief that the stric-
rean dictator 2014 that a Hellfire missile The missile is only the lat- ing to Cuba’s state-run news tures of traditional Christian and Stoic morality were an im-
Kim Jong Un had gone missing and that it est example of the no good agency, North Korea’s foreign possible burden to bear.
wouldn’t have was “likely in Cuba.” that Cuba is still up to. In July minister visited Havana and Mr. Harris’s book is, as advertised, an intellectual
a friend in the Let’s face it: That was no 2013 Panama Canal authori- reminded Cubans that the two biography. It will not supplant E.C. Mossner’s standard
AMERICAS world these shipping error, as some have ties discovered 240 metric peoples “share a history of biography of 1954. As a historian of Hume’s ideas, however,
days. His re- speculated. Stealing weapons tons of weapons—including struggle together in the same Mr. Harris far surpasses Mossner. Hume wrote prodigiously:
By Mary
lentless pur- technology is what spies do for jet fighters and missiles—hid- trench against U.S. imperial- on philosophy, economics, politics, religion and English
Anastasia
suit of weap- a living, and getting hold of a den under a sugar shipment ism, which continues exerting history. Mr. Harris extracts no “system” from this variety. He
O’Grady
ons of mass sophisticated piece of U.S. aboard a North Korean ship economic pressure on our proceeds chronologically, fixing each work amid surrounding
destruction equipment is a major coup for that had sailed from Cuba and countries to this day.” The texts and debates. Mr. Harris’s Hume exists not in the flesh
and willingness to starve his Havana. was bound for North Korea. news agency also reported but on the page, engaging fellow philosophers, such as Man-
own people is evil madness. It is not a stretch to think that the minister brought a deville, Montesquieu and Shaftesbury.
Last week even communist that the regime will share, for “message from Jong-Un in or-
China condemned the supreme a price, everything there is to The Castro boys now der to expand and strengthen”
leader’s fourth nuclear test, know about the laser-guided, the excellent relations between The Enlightenment is often miscast as the ‘Age
which the chubby little psy- air-to-surface Hellfire—which have a U.S. Hellfire the two countries. of Reason.’ In truth, it dethroned rational
chopath called “the thrilling can be launched from a heli- missile to share In June 2015 Raúl Castro
sound of our first hydrogen copter or drone as well as from hosted Kang Sok Su, the sec- philosophy in favor of sociology and psychology.
bomb explosion.” a plane—with its good friends with Kim Jong Un. retary of international rela-
But Mr. Kim is not all Iran, Russia and North Korea, tions for the North Korean
alone. He still has the Carib- and even with other terrorist Workers’ Party. In September There are costs to Mr. Harris’s erudite method. Hume’s
bean’s Cosa Nostra—aka the organizations. Havana tried to play down Mr. Kim received Cuban Vice friendship with Adam Smith, his Continental travels, his
Castro family—as a friend and President Obama seems to the incident, calling the weap- President Miguel Díaz-Canel notorious falling out with the paranoid Rousseau: None of
ally. The Cold War may be think that the Castros have ons outmoded. But the U.N.’s in Pyongyang. Cuba’s state- this is narrated in detail. Mr. Harris’s textual explications
long over, but Cuba is sticking abandoned their revolutionary North Korea sanctions com- owned newspaper Granma can have a dry, lofty air. But patient readers are rewarded.
by the North Korean pariah. obsession with harming the mittee said the shipment reported that Mr. Kim sent Hume emerges as a product of the Enlightenment as it really
This bond exposes Ameri- U.S. The theft of the Hellfire demonstrated “intent to evade “an affectionate greeting” to was, not as it exists in complacent legend.
cans to grave risk. Analysts would have disabused even UN sanctions” and that it was the Castro boys during the In his earliest and most substantial writings, Hume
fret that Pyongyang is devel- Chauncey Gardiner of such “consistent with previous visit. It also said that Messrs. adopted Locke’s empirical outlook—the idea that all knowl-
oping missiles and miniatur- naiveté. attempts by” Pyongyang “to Díaz-Canel and Kim discussed edge is derived from the senses—but drove its inherent
ized warheads that will allow But not Mr. Obama. He was transfer arms and related the two countries’ close rela- skepticism further than Locke had dared. Hume denied our
it to lob a bomb into the conti- already engaged in a rap- materiel through similar tac- tions and mutual cooperation. capacity to understand, even imperfectly, material causation,
nental U.S. But having a des- prochement with the regime tics in contravention of Secu- This ought to worry U.S. and he abandoned any notion of “final cause” (or purpose)
perate ideological pal 90 miles when the State Department rity Council prohibitions.” national-security officials. But in the created order. He also denied the temporal stability of
from U.S. shores magnifies the learned that Havana had the Samantha Power, the U.S. Mr. Obama is busy worrying our individual personalities. That a rock would invariably
danger. In the past 21/2 years missile. If he issued an ulti- ambassador to the U.N., called about shaping his legacy. I’m shatter glass, or that I am the same man I was last week,
Cuba has tried to smuggle matum that it be returned, his it a “cynical, outrageous and not sure why: He’s the first were mere imaginative tricks used to order the chaotic wel-
weapons to Pyongyang, en- talks might have collapsed. illegal attempt” by the two U.S. president to bow to a ter of sense. They were not demonstrably true.
gaged in high-level meetings So six months later he countries to evade U.N. sanc- Saudi king, the first to open In Hume’s view, vanity and comfort-seeking were the key
with North Korean officials, went ahead with his plan to tions. the door for Iran to get the components of our “mental anatomy,” and the operations of
and secured U.S. military throw a lifeline to the eco- In the 13 months since Mr. bomb, and the first to prop up sentiment propelled human society. This privileging of
technology. Anybody want to nomically struggling Castros Obama’s announcement that the Castros even while they mental disposition was typical of the era, as was Hume’s
connect the dots? by restoring diplomatic rela- he would reopen a U.S. em- hold a stolen Hellfire missile. fundamental utilitarianism. The Enlightenment is miscast in
On Friday Wall Street Jour- tions and liberalizing Ameri- bassy in Cuba and use execu- His place in history is already most textbooks as the “Age of Reason.” In truth, the
nal reporters Devlin Barrett can travel to the island. In tive decrees to weaken the U.S. secure. Enlightenment dethroned rational philosophy in favor of
and Gordon Lubold broke the May Cuba was removed from embargo, Cuba has repeatedly Write to O’Grady@wsj.com. sociology and psychology. Hume’s “Treatise of Human
Nature” and “Enquiry Concerning Human Understanding”
undermined not just religion but rationalism as well.
In Age of Google, Librarians Get Shelved In mid and later life, Hume wrote essays and narrative
histories of England, reaching a wide audience and achieving
the fame he had long sought. These works flattered and
By Steve Barker librarians no longer hold an closed their library schools ies can easily justify this new charmed, rather than challenged, his readers. They con-
T
MLS degree. Public libraries around the same time. It is position: Techies are paid less tained real insight, as Mr. Harris shows, but they also re-
he next time you visit a have created a new position still possible to get an MLS de- than librarians or library asso- flected the mannered dilettantism of their era.
public library and see an called “library associate”—col- gree, but the remaining gradu- ciates and they offer skills the Hume remains most famous for his irreligion. His essays
older person at the in- lege graduates who do the ate programs are much smaller public increasingly needs. The defending suicide and attacking miracles vexed the
formation desk, someone near same work as librarians but and are usually consolidated in public library of the future orthodox, and they loathed him in turn. In his “Dialogue
retirement age, take a good receive lower salaries than other departments or schools. might be a computer center, Concerning Natural Religion,” he sabotaged the Newtonian
look. You may be seeing the their MLS counterparts. The mood among some staffed by IT professionals and theology of designed creation that was popular in his day.
last of a dying breed, the pro- librarians is pessimistic. A New few books or librarians. What caused the first cause? he asked. Why do we celebrate
fessional librarian. Mexico librarian recently told Those of us who hold MLS divine design amid so much decay and misery? These provo-
Years ago, a librarian was A library-science me: “I spend most of my time degrees and are still working cations, in fact, operated effectively against a fairly narrow
someone who held a master’s making change and showing recognize the inevitability of range of theological argument: a rational religion emerging
degree in library science (MLS) degree can’t compete people how to print from the these trends. But large seg- from Lockean empiricism.
issued by a graduate program with online search, computer or use the copier. I ments of the American public Mr. Harris notes that Hume sought to examine religion
accredited by the American sure don’t get the reference struggle with literacy, or want from a “maximally detached” point of view, in order to
Library Association. Those of us but we still have a role. questions like I used to.” to study for the high-school “weaken the hold” of superstition. The Enlightenment often
who attended library schools A colleague in the Washing- GED, or are learning English congratulated itself for such campaigns of disenchantment,
underwent rigorous prepara- ton, D.C., area expressed simi- and want to know where they but how plausible was such a project for a philosopher who
tion, usually assignments that The erosion of the MLS de- lar views: “If I didn’t spend my can register to vote. We can still privileged sentiment and utility over truth? Mr. Harris
forced us to become familiar gree has been mirrored by the time helping people look for help children with their home- reminds us that Hume’s own disbelief—and not just the
with the reference books and disappearance of library lost keys, wallets, jackets, work and play a role in our religiosity of his opponents—might well be psychologized.
research tools that filled the schools from American univer- sweaters, gloves, backpacks, communities, as we have been Hume preferred philosophy to religion because philosophy
university library. sities. The University of Chi- cellphones and laptops, I’m not doing for over a century. “has little capacity to interrupt for long the course of our
The Internet changed all cago and Columbia University sure I’d even have a job.” The role for librarians and natural propensities.” As one who sought “morality without
that. The library user who used once offered the best librarian One bright spot: Some public public libraries is shrinking. austerity, pleasure without effeminacy, and a love of life
to rely on a librarian for help training programs in the coun- libraries have created jobs for But I imagine that in another without a fear of death,” Hume knew that atheism could
can now Google his question try; both institutions closed “technology assistants,” posi- hundred years, we will still be bring its own relief. Whether it was true was beside the
and find more data in a few sec- their library schools in the tions filled by tech-savvy young here, in one form or another. point.
onds than a librarian was able early 1990s. people with community-college
to locate in hours of research. Vanderbilt and the Univer- degrees and plans for informa- Mr. Barker is a librarian in Mr. Collins is a professor of history at Queen’s University
Many people who work as sity of Southern California also tion-technology careers. Librar- the Washington, D.C., area. in Kingston, Ontario.
OPINION
REVIEW & OUTLOOK LETTERS TO THE EDITOR
A First Amendment Do-Over Crossing the Aisle Hasn’t Advanced the GOP
D
efending free speech has been a nota- cise their free-speech right. The union won’t Ever the Keynesian, Alan Blinder the last 27 years. A continuing budget
ble strength of the current Supreme vanish, or even lose its monopoly bargaining has forgotten, or never learned, that resolution a la Harry Reid would have
the $700 billion stimulus package at least kept the deficit from expand-
Court, and on Monday the Justices power. It will merely have less money to spend early in Barack Obama’s first term ac- ing and let the Democrats suffer a loss
hear a case that gives them a to influence politicians. complished nothing other than bal- of some of their precious entitlements
rare and splendid opportunity The Justices can correct The other union defense looning debt and not holding unem- and solar and wind credits.
to repair damage to the First a 39-year-old error on lows is that California’s law al- ployment under 8% as it was supposed PAUL MAHLER
Amendment done by the teachers to “opt out” of to do. Yet Mr. Blinder says that more Columbus, Ohio
Court itself. unions and free speech. the portion of the fees that stimulus is “welcome” (“A Glimpse of
In Friedrichs v. California goes to politics. But this opt- What Bipartisan Compromise Looks Prof. Blinder’s characterization of a
Teachers Association, 10 pub- out system is onerous, re- Like,” op-ed, Dec. 31). Zero-percent provision in the budget bill delaying
lic school teachers object to a California law quiring a teacher to make the request each rates, also a stimulus, haven’t spurred two ObamaCare taxes as a Republican
that forces them to pay union fees that finance year within a narrow window that is usually strong economic and employment victory misses the mark. The taxes
growth. Further, his definition of com- were included in the Affordable Care
causes they oppose. For 39 years the Court has about six weeks. If the teacher forgets to do
promise is very curious. President Act in support of the fiction that the
allowed such coercion thanks to an anomalous so, he is forced to subsidize union political Obama is the least compromising 10-year cost of ObamaCare would not
1977 ruling in Abood v. Detroit Board of Educa- causes for the year. This isn’t close to being president in memory. And where was exceed $1 trillion. Delaying the taxes
tion. Now is the time to overturn it. the “carefully tailored” process that the the compromise by the Democrats supports the free lunch meme which
As the brief for the teachers says, California Court has typically required when govern- with the stimulus and ObamaCare? will make repealing, replacing or im-
runs the “largest regime of compelled political ment is infringing on such a fundamental DAVID W. OGILVYproving ObamaCare more difficult. It
speech in the Nation.” It does so by coercing right as free speech. Tucson, Ariz.seems unlikely that any of the 166
teachers to pay roughly 2% of their pay in “af- If one or more of the Justices lack the nerve Democrats (90% of the caucus) who
filiate fees” to the union even if they choose to overturn Abood, fearing a progressive media Simple math tells me that Donald voted for the budget bill, or the 22
not to join the union. and political backlash, the least they can do is Trump, Ted Cruz and Marco Rubio who did not, saw delaying the taxes as
The California Teachers Association then require governments to let teachers keep the have approximately 60% of the early a Republican victory. In any event,
Republican primary votes. They all rail Prof. Blinder notes that “postpone-
takes that money and spends it on collective political portion of their dues money unless
against the status quo in Washington, ment isn’t a big deal” for Republicans
bargaining as well as a variety of political they “opt in” to the union scheme. D.C., and promise to confront it ag- or Democrats.
causes. It also sends some of it to the National Unions are so afraid they may lose this gressively. Instead of bashing these Although Republican support for
Education Association to spend nationwide. case that they have even thrown themselves current primary leaders, your journal- delaying the taxes may have helped fa-
California and the union argue that this coer- at the mercy of that great progressive bete ists should read and reread Mr. cilitate “bipartisan compromise,”
cion is justified because all workers benefit noire, Antonin Scalia. The conservative Jus- Blinder’s in-your-face crowing that helping the Democrats to achieve their
from union collective bargaining. tice wrote an opinion in a 1991 case (Lehnert “the deal was a big win for America” goals and not provoking union allies
But as the teachers point out, collective v. Ferris) that tolerated forced dues for union to help you understand the legitimate with their Cadillac plans should not be
bargaining in government is impossible to bargaining, and the union is throwing that and growing conservative anger. This seen as a victory for the GOP.
separate from matters of ideological speech. back at him in unquiet desperation. budget is another example of what ALAN STEVENSON
For public teachers, collective bargaining in- However, Justice Scalia has since voted with “crossing the aisle” has done to us for Reno, Nev.
volves wages and benefits that inevitably im- the majority in cases that recognized the First
plicate fiscal policy and the tax burden. It Amendment problems with union-fee schemes,
also includes such controversial political including Harris and Knox v. SEIU in 2012. Jus- Football and the Goals of Higher Education
matters as teacher evaluations and tenure. tice Scalia has always been alert to threats to President John Fry makes several and football has played a role in that
Individual teachers who object to the union’s free speech, and we find it hard to believe he valid points in his essay explaining rise.
positions on these issues must nonetheless would tolerate California’s coercive design. why football would be out of place at Like President Fry, I cringe when I
subsidize them. Conservative Justices are wary of overturn- Drexel University (“We’re Glad We read about college athletic programs
This violates what the Court said in 2014 ing precedents, and for good reason. Continu- Say No to College Football,” op-ed, that have lost their way. That’s why I
(Harris v. Quinn) is a “bedrock principle” that ity is crucial to the integrity of the law, and the Jan. 4). But I disagree with the core am as proud of our athletes perfor-
“no person in this country may be compelled Court cannot be seen as a body that overturns of his argument. A well-run football mance as students as their achieve-
program can create innumerable ben- ments on the playing field.
to subsidize speech by a third party that he or settled law based on the election returns. But
efits to a national university. The evi- The bottom line is this: Football
she does not wish to support.” the Court has a special obligation to re-exam- dence from our experience at Tem- isn’t right for every school, but
In her dissent in Harris, Justice Elena Kagan ine cases in which a fundamental constitu- ple—records for enrollment, academic strong and vigilant leadership by
justified this state coercion for unions on tional right has been compromised. rankings, alumni giving, research coaches and athletic directors can
grounds that the government has an interest Abood is an outlier in Supreme Court juris- funding—suggests that the student make college football a tremendous
in labor peace. But no great harm to the state prudence, and this is the chance to send it to and alumni engagement created by asset to a great university.
or the public is caused by letting teachers exer- the mistake file. our football program has a positive NEIL D. THEOBALD
impact on our academic programs. President
We use the revenue generated Temple University
Keystone No, Kenya Pipeline Yes from football to subsidize our 16 non-
revenue sports. Temple football also
Philadelphia
T
provides high visibility that benefits I note that Major League Baseball
ransCanada took Uncle Sam to court Kenya and Northeast Africa could certainly use
the entire university, as our recent doesn’t rely solely on scouting talent
last week to reclaim some of the dam- the investment and jobs that would come from success has shown. Our applications from colleges and universities. It has
age done by the Obama Administra- the oil project. Then again, so could the United are up another 12% from last year’s a farm system. Why can’t the NFL set
tion’s multiyear, drawn-out States. What’s with the double record, and I expect another highly up a farm system to develop players
rejection of the Keystone XL The U.S. says it wants standard on pipelines? diverse, academically talented class wherever they can be found, not just
pipeline. It may not come up to help finance an oil Meanwhile, TransCanada to enroll in the fall. Unlike schools from colleges and universities?
in the litigation, but someone said it is bringing an interna- that are struggling to fill seats, inter- DAVID J. LEIDEL
should point out that the same pipeline in Africa. tional arbitration case against est in Temple is at an all-time high Arlington, Texas
Obama Administration that the U.S. for not treating the
rejected Keystone seems to Canadian company the way it
have no problem supporting a new oil pipeline would an American company, as it is obliged to
project in Africa. do under the North American Free Trade Agree- Helping Children With Gender Dysphoria
That was the story last week out of Kenya, ment. The company said it would seek to re- Regarding Debra W. Soh’s “The tion possibly be a product of political
where U.S. Ambassador Robert Godec told cover some $15 billion in costs and damages, Transgender Battle Line: Childhood” correctness?
Kenya’s energy minister that Washington would and don’t be surprised if the case succeeds (op-ed, Jan. 5): There is good reason JOHN F. WINSLOW
help Nairobi raise $18 billion to finance its Pow- given the extraordinary regulatory barriers the why pediatrics is a branch of medicine. Washington
erAfrika project. The pipeline would stretch U.S. imposed on the investment. Though multi- We know that children are not “little
from Kenya’s Rift Valley to Lamu on the coast. ple reviews showed no environmental harm, adults” and the way in which we treat We have seen just how toxic politi-
“Kenya needs $18 billion worth of financing,” President Obama rejected the pipeline on arbi- them is much different than how we cal correctness can be when a subject
Mr. Godec said, according to a dispatch in Oil- trary political grounds. TransCanada also filed treat adults. We have hospitals specifi- is politicized. When it comes to how to
price.com, “so one of the questions we are dis- a suit in U.S. federal court claiming that Mr. cally dedicated to the care of children treat children with gender confusion,
and are aware of their physiological the truth becomes crucial. There
cussing is how we can work together with the Obama’s decision to block Keystone exceeded
differences—specifically the adoles- should be no shaming of those with
private sector and governments to raise that his constitutional authority. cent’s brain and its continual develop- “incorrect” points of view when the
sum, to find ways to make certain that this fi- These cases are worth watching, especially ment. Ask any parent who has raised a facts are far from known. I have only
nancing becomes available.” by those who still want the U.S. to welcome for- child to adulthood about the many one criticism. Ms. Soh states: “Trying
Has Mr. Godec checked with Secretary of eign investment. Meanwhile, U.S. taxpayers will “phases” their child has gone through, to turn a gay person straight is unethi-
State John Kerry, or, perhaps more important, want to keep an eye out to see if their dollars and how the emotions, personality and cal, because sexual orientation is im-
anti-oil Democratic financier Tom Steyer? are used to finance the Kenya project. character of that child have changed mutable.” That is poppycock.
throughout the years. It’s a difficult One of my best friend’s always re-
and complex issue that needs serious bellious daughter was a lesbian for 10
The Other Republican Campaign attention and should not be decided on
the merits of gender-identity politics.
years. That changed when she met, fell
in love with and married a man. These
O
When I was five I insisted on ex- issues are complicated and deserve far
ne of the big, if not often explicit, Re- reform plan he rolled out last week that would
ploring the world on my Big Wheel in more study. That won’t happen be-
publican debates this year is how the replace the hodgepodge of current federal pro- search of more speed. Fortunately my cause of the politics.
party can best reclaim the White House grams with “right to rise grants” that would parents didn’t buy me a sports car. SIMON SOBO, M.D.
and a new conservative politi- be administered by the DAVID MASUCCI Newtown, Conn.
cal majority. Will it be enough Some in the GOP are states. The grants would have Budapest
to ride the obvious wave of looking for a new a work requirement and time I find it ironic that the letters page
voter frustration and anger, or limits. In her attempt to discredit doctors’ has letters regarding the “possible”
does the GOP also need to of- anti-poverty agenda. Several participants efforts to support transgender chil- long-term carcinogenic effect of eat-
fer a more optimistic agenda stressed the benefits of the dren, Debra W. Soh offers a flawed ar- ing genetically modified soybeans and
that broadens its appeal? Earned Income Tax Credit, gument based on flawed research. By the next page has Ms. Soh’s article
The former attitude has dominated the which pays Americans below a certain income relying on “data” produced by Dr. Ken- that discusses treating children with
neth Zucker, a psychologist whose gen- “hormones to suppress puberty and
presidential nomination debating, but the lat- level who work. Chris Christie pointed out that der-identity clinic closed last year af- help the individual develop breasts or
ter was on stage Saturday in South Carolina he had doubled the EITC in New Jersey. We ter an external review found it “out of facial hair.”
at a forum sponsored by the foundation think the EITC has more problems than many step with current operational prac- l’ll take the long-term chance of a
named after the late, great Republican Jack conservatives admit, especially its vulnerabil- tices,” Ms. Soh thoroughly undermines possible carcinogen over a hormone
Kemp. Senator Tim Scott and Speaker Paul ity to fraud and its disincentive to work as it her own nonscientific musings. treatment that will impact a child’s life
Ryan hosted six GOP presidential candidates phases out over higher incomes. The reality is that people who sup- from the first day of treatment.
to discuss conservative policies to fight pov- As economist Casey Mulligan has docu- port transgender children also support PETER NASH
erty and improve economic opportunity for mented, the phase out of welfare benefits and letting girls play with trucks and buzz Omaha, Neb.
everyone. tax credits means that some recipients can their hair. We are fine with boys wear-
“We’ve been fighting a war on poverty for face a marginal tax rate of more than 100% as ing pink and painting their nails. But
over 50 years now, and I don’t think you con- they try to get ahead. Progressives ignore this there’s a difference between kids ex- We Need Gluten-Free Gas
pressing gender diversely and kids be-
clude anything other than this war is a stale- obstacle to success, but the Kemp forum par- ing transgender. One is about expres- I am encouraged by Merrill Mat-
mate,” Mr. Ryan said to open the event. “We’ve ticipants acknowledged it openly and made sion, the other about identity. thews’s “The Corn-Fed Albatross
treated poverty like they’re potholes that need clear any reform had to deal with it. What’s really happening here is that Called Ethanol” (op-ed, Jan. 6). My
to be filled up and then we move on,” adding The two candidates notable by their ab- doctors and parents are finally sup- key platform is to make all gasoline
that “we now have a safety net that is designed sence were Donald Trump and Ted Cruz. Per- porting our lives, even the youngest gluten free.
to catch people falling into poverty when what haps they think that as the front-runners in among us. To do otherwise danger- MIKE EISNER
we really need is a safety net that is designed New Hampshire and Iowa they don’t need to ously denies transgender children New Whig candidate for president
to help get people out of poverty.” worry about such wonky political issues as their very humanity—and their safety New Haven, Conn.
Thus the day reflected the intellectual fer- poverty and welfare reform. They’re riding the and well-being.
ment as conservatives seek alternatives to the frustration wave. JAY BROWN Letters intended for publication should
Human Rights Campaign Foundation be addressed to: The Editor, 1211 Avenue
Democratic agenda of ever-expanding benefits But if one of them does win the nomination,
Washington of the Americas, New York, NY 10036,
and what so often becomes permanent depen- he will need a message and agenda that attract or emailed to wsj.ltrs@wsj.com. Please
dency on government. more than GOP primary voters. The nominee A definition of bisexuality is the ca- include your city and state. All letters
One of the big themes is how to reward might even find he could use the ideas that the pacity to reorient gender desire from are subject to editing, and unpublished
work, which is the only sustainable route out other candidates took the time to discuss in one situation to the next. Could belief letters can be neither acknowledged nor
returned.
of poverty. Jeb Bush promoted the welfare South Carolina. in the immutability of sexual orienta-
OPINION
Trump and Cruz Have Trouble in the Middle

By David W. Brady tention to how each of the candidates half of swing voters unwilling to con-
A
is doing among independents. A long, sider him. Marco Rubio is the most
terrible way to forecast drawn-out primary that forces candi- competitive among independents: 37%
the 2016 contest is to dates to make strong appeals to the said in December that they would con-
gauge whose supporters party’s ideological base can hurt the sider voting for him; only 32% ruled
are the loudest. Presiden- eventual nominee in November. him out. All the other GOP candidates
tial elections are not There are two ways that we can are under water. Forty-seven percent
decided by partisans or ideologues. measure how independents see the of independents said they would
The arithmetic is pretty simple: Republican contenders. On the posi- never vote for Jeb Bush, and 43% said
ETHAN MILLER/GETTY IMAGES

41% of voters in the 2012 presidential tive side, we can ask whether voters the same about Chris Christie.
election described themselves as hold favorable views about a candi- Moderates are a little harder on the
moderates, and 29% as independents. date. Or, on the negative side, we can GOP contenders. Mr. Rubio again
Almost all Republicans (93%) and ask whether they would rule out vot- comes in first: 35% would consider
self-described conservatives (82%) ing for a candidate. Those White voting for him, and 36% wouldn’t.
House hopefuls with high favorability Thirty-five percent of moderates
ratings among swing voters have good would also consider voting for Mr.
Independents will decide prospects for winning a general elec- Bush and Mr. Christie, but their nega-
tion. Those whom independents and Donald Trump and Ted Cruz at the Dec. 15 GOP presidential debate in Las Vegas. tives are much higher: 48% have ruled
the general election, and moderates say they would not even out Mr. Bush, and 44% Mr. Christie.
they’re far from sold on the consider supporting start with a deep, Gov’s three most recent surveys; 28% 58% of moderates and 51% of The candidate with the lowest neg-
probably insurmountable, deficit. to 32% viewed him very unfavorably. independents told YouGov in Decem- atives among swing voters is John
Republican front-runners. The Internet polling organization Among moderates, almost no one (6% ber that they “would never vote for” Kasich: Only 30% of moderates and
YouGov has been tracking, since May to 7%) feels “very favorable” about Mr. Trump. The figures are a little independents say they would never
2015, a sample of 5,000 Americans, Mr. Cruz; many (28% to 35%) feel better for Mr. Cruz, but still about half vote for him. The problem for Mr. Ka-
voted for Mitt Romney, but that who have been asked roughly every “very unfavorable.” of moderates (47%) and almost as sich is that about a fifth of these vot-
wasn’t enough. Even if Mr. Romney six weeks about the presidential race. The problem for Messrs. Trump many independents (41%) say they ers say they have never heard of him.
had won every Republican or conser- Although Donald Trump is leading in and Cruz is not that voters don’t would never pull the lever for him. With a large field, the percentage
vative voter, it still wouldn’t have GOP primary polls, his ratings among know who they are. Mr. Trump How can anyone, under the cir- of people who say they intend to vote
been enough. independents are the worst of any started out with nearly everyone cumstances, expect either of these for a candidate is less relevant than
Because there are roughly 5% more candidate in the field. being able to rate him; only about 5% two to win a general election? For the percentage who say they will not
Democrats than Republicans, the GOP In YouGov’s three most recent sur- said they didn’t know or didn’t have the GOP to regain the White House, it vote for him. By this measure, the
needs a solid majority of indepen- veys, Mr. Trump was viewed “very an opinion. As for Mr. Cruz, in June will have to do much better, particu- current GOP front-runners are doing
dents to win a national election. In unfavorably” by an average of 43% of about a quarter of independents did larly given Hillary Clinton’s better very badly. As the Iowa caucus and
2012 Mitt Romney outpolled Barack independents. How does he fare not know enough about him. But over ratings. In December, 48% of moder- New Hampshire primary approach,
Obama among independents, 50% to among moderate voters? In August, the past six months that figure has ates said they would consider voting Republicans may want to consider
45%. But that didn’t take him across only 17% of moderates had a “very dropped to 4%—and most of those for Mrs. Clinton—a full 16 percentage this if they are serious about one of
the electoral college finish line. favorable” opinion of him; 47% had a voters moved into the “unfavorable” points better than Mr. Trump and 22 their own becoming president.
It is safe to predict that the pro- “very unfavorable” opinion. Those camp. Not a good sign. points better than Mr. Cruz.
portions that held in 2012 will be figures have hardly budged since. Already, large proportions of inde- Many of the other Republicans run- Mr. Brady is a professor of political
about the same this year. About two- Ted Cruz doesn’t do much better. pendents and moderates say that they ning for the 2016 nomination beat economy in the Stanford University
thirds of the voters will not be Repub- Only 13% to 16% of independents had have made up their minds about the Mrs. Clinton’s numbers, and unlike Mr. Graduate School of Business and a
licans. Thus it is vital to pay early at- a very favorable view of him in You- two Republican front-runners. A full Trump, none starts with more than senior fellow at the Hoover Institution.
A New Semester, a New Approach to Campus Turmoil

By Paul McHugh tance will be put between the stu- behaviors that we think are deter- colleges? First, let’s be clear: The needed: A person respected by the
C
dents and the Christakises. The mined by our reasoning and sense of racial protest and social disruption group, preferably from within the
ollege students are returning to school reports that Ms. Christakis, a situation are actually shaped—not like that at Yale was not another group, who recognizes the unhealthy
school after the winter break, lecturer in early-childhood education, always to our benefit—by people Selma March or Birmingham battle direction events have taken and
and administrators must be has chosen not to teach this spring, with whom we’re socially engaged, against Bull Connor and his dogs. intervenes to help the students—even
bracing for another semester like the and her husband is on what Yale even those at some remove from our Rather it was what psychiatrists call if only a few—see the advances in
tumultuous one just passed. That called a “scheduled leave.” immediate circle. an “emotional stampede,” by a group racial matters achieved, both at Yale
trivial circumstances like those at Overlooked was the fact that the Mr. Christakis, working with longi- of sensitive young people living in a and in America. Such a person would
Yale University in November could target of the campus confrontation, tudinal research such as the culture of suspicion who were pro- know from experience that injustices
provoke such unrest indicates how Mr. Christakis, is one of America’s renowned Framingham Heart Study voked into believing that they had can occur, but could also shed light
fraught race relations remain at outstanding physician-scientists— that followed more than 5,000 adults been gravely injured—a belief that on the good intentions and racial
schools striving to promote diversity. and a person ideally suited to making in a Massachusetts town for decades they no doubt still hold. Yet these progress at the university. Putting
Ironically, an incident caught on sense of the events that gripped beginning in 1948, showed that individuals remain students in good the “long view” in front of the stu-
video at Yale—one that for many campuses in recent months. One can obesity, smoking, alcohol consump- standing at Yale, with all the privi- dents is essential, emphasizing the
Americans seemed to epitomize how tion, drug use and even personal leges that entails, having suffered no achievements America has made in
badly American higher education has happiness and altruism spread essen- setbacks other than their shared racial relations in the past decades
gone off the rails—also offers an ex- The work of the Yale tially as a kind of contagion within sense of injury. and from which the Yale students
planation for this spasm of protests professor who was berated the social cluster of relationships in Now, college students in general have profited.
and points toward a more productive which people are embedded. worry about their academic perfor- Changing the viewpoint of a few in-
way of addressing students’ con- by students helps explain He revealed that what one accepts mance and its effect on their future, dividuals in the cluster could have—
cerns. the ‘emotional stampede’ as a “norm” in behaviors and physical but these young people bore the just as did the triggering event—a
The incident involved a Yale pro- appearance depends on those of oth- added concern that the Yale commu- ripple effect on their friends and
fessor named Nicholas Christakis, and how to address it. ers—up to and including the friends nity harbored subtle forms of social friends of friends. If that viewpoint
who was waylaid on campus by angry of friends of one’s friends. Interest- injustice reflective of a racist Ameri- became more their norm, the students
students. They were livid about a let- ingly, Mr. Christakis has also shown can culture. Like any group that thinks would have a better opportunity to
ter written by his wife, Erika, also a presume that eventually, when his that these aspects of our behavior itself beleaguered, these students get what they came to Yale for: a first-
Yale teacher, who had suggested that feelings about this sorry episode will change in a coordinated fashion were sensitive to the feelings of their rate education, a reputation for
the university’s recent admonish- become less intense, Mr. Christakis when those of our friends—and, fellows, saw loyalty to one another as accomplishment, and entrée into a
ments about Halloween costumes, will dissect it. But until that time, let again, those friends of friends we’ve a principle and were responsive to any place of responsibility in America.
cultural appropriation and racial me—someone who has never met the not met—change in the same way. evidence of distress. It would require a certain amount
insensitivity perhaps were unneces- man but admires and teaches his I use these discoveries in teaching With today’s technology, they were of courage to take up this task, given
sary, since young adults are capable work—identify what seem the salient psychiatrists how to manage pa- able to stay in close contact through how emotionally charged American
of deciding for themselves what to matters and how what we’ve learned tients with depression and addic- social media, reinforcing the norms campuses are today. But advances in
wear for Halloween and might even from Mr. Christakis’s work might tion. For example: We can encourage within their group. In essence they race relations always seem to be
learn from being “a little bit obnox- help address the current destructive, alcoholics to attend 90 meetings of constituted a tightly knit, volatile marked by the actions of a brave few
ious.” Mr. Christakis was caught in an distressful climate on many cam- Alcoholics Anonymous in the 90 social cluster drawing away from the leading the way.
ugly scene, with one student in par- puses. days after discharge so as to embed other students at Yale, poorly
ticular roundly cursing him. In his research and in his 2009 them in a community of people com- equipped to judge coolly events Dr. McHugh, former psychiatrist in
Eventually the campus settled book, written with James H. Fowler, mitted to abstinence and help them impinging on their fears. chief at Johns Hopkins Hospital, is
when Yale’s president reassured the “Connected: The Surprising Power of take on sobriety as a norm in the This culture of suspicion at Yale the author of “The Mind Has Moun-
students that he understood their Our Social Networks and How They future. and other universities must be reme- tains: Reflections on Society and Psy-
feelings and would take measures to Shape Our Lives,” Mr. Christakis has How do these insights apply to the died for the academic pursuit of chiatry” (Johns Hopkins University
protect them from insult. Some dis- demonstrated how thoughts and disturbances that have convulsed U.S. social diversity to succeed. What is Press, 2005).
After a Close Shave, the Beardless Status Quo Returns to Politics

By Christopher Oldstone-Moore American life. One can find them on amusement park workers until 2012, combination of male pride and anxi- regardless of party, seemed to disap-
A
blue-collar workers, elite athletes, and McDonald’s still tolerates beards ety. Men, in the vein of Teddy Roose- prove. In 1944, during Dewey’s first
merica’s highest-ranking facial Hollywood stars and Silicon Valley only for religious reasons. velt, sought to prove themselves by presidential run, the conservative
hair has fallen to the razor. In CEOs. Observers may brush this off A shaved face, since the early climbing mountains and hunting journalist Edith Efron wrote about
November Paul Ryan made as a fickle fashion, but there’s more years of the 20th century, has signi- his mustache—and about the mus-
headlines when he quit shaving, to facial hair than meets the eye. fied the right sort of manliness: mod- tache in general: “It perplexes. It
becoming the first House speaker Most Americans are not aware, for ern, orderly, professional. These House Speaker Paul Ryan fascinates. It amuses. And it repels.”
with a beard since the appropriately example, that in 1976 the Supreme norms are enshrined in prejudice, A letter to the editor a month later
named Frederick Gillett in the 1920s. Court upheld the right of employers custom and law. Now, however, this loses the beard, the most agreed: “The man who decides to
But last week, as Congress came back to regulate their workers’ facial hair. definition of manhood is being chal- derided facial hair since sport lip adornment asserts his mas-
into session, Mr. Ryan once again The justices recognized that mus- lenged from both the left and right. culinity and desire to tyrannize over
banished the bristles, saying that he taches and beards carried social sig- We can glean insight into what is Thomas Dewey’s mustache. the home,” wrote Cornelia Von Hes-
would begin the new year with a nificance that might undermine the afoot—or, rather, aface—from the sert, a prominent model. “No matter
fresh start and a fresh shave. esprit de corps in police departments, last time beards achieved cultural how prettily he waxes it, droops it,
Mr. Ryan’s flirtation with whiskers corrode discipline in schools, and dominance: the era stretching from elephants. The beard became a sym- shingles it, at heart he’s the Man’s
is emblematic of a recent resurgence threaten businesses’ bottom line. the 1850s to the 1880s. The shift to bol of masculinity, a solace as women Man and ruler of his own roost.”
of beards in nearly every sector of Walt Disney banned facial hair on beards then was impelled by a claimed new rights and authority. Mr. Ryan received a similar
The unshaven today are likewise tongue-lashing from radio talk-show
compelled by pride and worry. As in host Laura Ingraham, who sarcasti-
Notable Quotable the late 19th century, our era extols
competition and celebrates self-reli-
cally referred to him as “the bearded
wonder” and said, “he’s got to lose
PUBLISHED SINCE 1889 BY DOW JONES & COMPANY
From Navy Secretary Ray ance. Traditional views of gender that beard; it makes him look ridicu-
Rupert Murdoch Robert Thomson
Executive Chairman, News Corp Chief Executive Officer, News Corp Mabus’s Jan. 1 “Memorandum for identity, marriage and family are un- lous.” Chalk one up for conservative
Gerard Baker William Lewis the Commandant of the Marine dergoing profound renovation. Men feminism: Women feel entitled to
Editor in Chief Chief Executive Officer and Publisher Corps” on “gender integration”: are again seeking the tangible assur- criticize the way a man looks, and
Rebecca Blumenstein; Matthew J. Murray, Deputy DOW JONES MANAGEMENT:
ance that a beard or mustache offers. shame him into changing his style.
Editors in Chief; Almar Latour, Executive Editor Anna Sedgley, Chief Financial Officer; Lastly, as we achieve full inte- However, there are powerful forces Which will it be: men regulated or
DEPUTY MANAGING EDITORS: Ashley Huston, Chief Communications Officer; gration of the force, mirroring even acting against this movement. Political unleashed? Mr. Ryan’s return to the
Paul Meller, Chief Technology Officer;
Michael W. Miller, Senior Deputy;
Mark Musgrave, Chief Human Resources Officer;
more closely the Nation we defend, leaders especially are held to an exact- razor indicates that we may soon
Thorold Barker, Europe; Paul Beckett, Asia;
Christine Glancey, News Operations and Talent; Katie Vanneck-Smith, Chief Customer Officer this is an opportunity to update the ing standard, because they must win witness “peak beard.” We live in
Neal Lipschutz, Ethics and Standards; OPERATING EXECUTIVES: position titles and descriptions to the public trust. In a study at Okla- uncertain and restless times, to be
Alex Martin, Enterprise; Ann Podd, Global Edwin A. Finn, Jr., Barron’s; Edward Roussel, demonstrate through this language homa State University last year, sure. But the history of Western civi-
Production; Andrew Regal, Global Head of Video; Innovation; Ingrid Verschuren, Data Strategy;
Jessica Yu, Global Head of Visuals
that women are included in these students were presented with paired lization has conditioned us, rightly or
Suzi Watford, Marketing;
Paul A. Gigot, Editor of the Editorial Page; Professional Information Business, Sales: MOSs [Military Occupational Speci- photos of bearded politicians and their wrongly, to read a well-shaved face
Daniel Henninger, Deputy Editor, Editorial Page Nancy McNeill, Global; William Ashworth, alities]. Please review the position clean-shaven counterparts. Female as the mark of a responsible and reli-
Americas; Florence Lefevre, Europe; Tomasz titles throughout the Marine Corps students perceived the hirsute men as able man.
WALL STREET JOURNAL MANAGEMENT:
Rustowski, Asia
Trevor Fellows, Head of Global Sales; and ensure that they are gender-in- less feminist, and said they were less
Chris Collins, Advertising; Christina Komporlis,
Circulation; Jason P. Conti, Legal;
tegrated as well, removing “man” likely to vote for them. Mr. Oldstone-Moore teaches his-
Joseph B. Vincent, Operations; Larry L. Hoffman, from their titles and provide a re- The Republican presidential nomi- tory at Wright State University. His
Production port to me as soon as practicable nee in 1948, Thomas Dewey, may book “Of Beards and Men: The
EDITORIAL AND CORPORATE HEADQUARTERS: and no later than April 1, 2016, so very well have lost that close election Revealing History of Facial Hair” is
1211 Avenue of the Americas, New York, N.Y., 10036 that it is included in the rest of the because he flouted convention with a just out from the University of Chi-
Telephone 1-800-DOWJONES
integration efforts. tightly cropped mustache. Women, cago Press.
A16 | Monday, January 11, 2016 THE WALL STREET JOURNAL.
WORLD NEWS
U.S. Deploys B-52 After North Korea Nuclear Test

BY ALASTAIR GALE carry nuclear weapons, flew of the ironclad U.S. commit- plosive at its nuclear test self-defensive step for reli- such action evidence of the
over the Osan Air Base about ment to our allies in South site on Wednesday that it ably defending the peace on U.S.’s intention to invade.
SEOUL—The U.S. flew a 45 miles south of the inter- Korea, in Japan, and to the called a hydrogen-based nu- the Korean Peninsula and re- South Korea continued to
B-52 bomber close to North Korean border around mid- defense of the American clear bomb. gional security from the dan- blast anti-Pyongyang regime
Korea on Sunday, as Wash- day local time, the U.S. mili- homeland,” said Adm. Harry North Korean state media ger of nuclear war caused by messages and pop songs
ington and its allies seek tary said. The B-52, based in B. Harris Jr., commander of reported on Sunday that the U.S.-led imperialists,” Mr. across its border on Sunday
ways to pressure Pyongyang Guam, was joined by Ameri- the U.S. Pacific Command. leader Kim Jong Un had vis- Kim said, according to the from 11 banks of high-pow-
after its recent nuclear test can and South Korean fighter The flight was a calibrated ited the Ministry of People’s report. ered speakers, a move to
without escalating military planes before returning move to challenge North Ko- Armed Forces to congratulate North Korea had no imme- challenge North Korea’s ef-
tensions. home. rea’s military ambitions after officials on the test. diate reaction to the B-52 forts to keep an information
The bomber, which can “This was a demonstration it detonated a high-power ex- The detonation was “a flight, but it typically calls blockade on its people.
Myanmar
Clarity at
Leaders
Sign Deals
Before Exit
your fingertips.
BY SHIBANI MAHTANI
YANGON, Myanmar—This
country’s military-linked gov-
ernment, in its final weeks in
power, is passing legislation
that benefits departing law-
makers and awarding large
business contracts, including
one to a Chinese-led group to
build a sea port.
The legislation includes a
pension plan for departing law-
makers, most of whom belong
to the military-linked Union
Solidarity and Development
Party, which was defeated in
the country’s historic election
in November. Another proposal
would protect former presi-
dents from prosecution related
to acts taken in office and pro-
vide them with bodyguards.
The government of Presi-
dent Thein Sein has awarded
multiple contracts, which in
Myanmar don’t need legisla-
tive approval, without consult-
ing the next administration,
which will be led by the Na-
tional League for Democracy
under party leader Aung Saan
Suu Kyi, party officials said.
Mr. Thein Sein’s administra-
tion also transferred five idle
manufacturing plants last
month from the civilian-led
ministry of industry to the
military-controlled ministry of
defense. None of these actions
are prohibited under Myan-
mar’s political system.
Ye Htut, spokesman for Mr.
Thein Sein, said the presiden-
tial bill will “benefit not only
Suu Kyi’s party says

departing lawmakers
aren’t consulting the
next administration.
[Mr.] Thein Sein, but also fu-

ture presidents” and wasn’t
written with the departing
government in mind.
Government officials said
the awarding of contracts is
needed to keep the country
going during its political tran-
sition. The new parliament
will pick the country’s next
president by March.
But the moves have raised
concerns within the NLD,
whose officials said the gov-
ernment is rushing through
projects and leaving the next
administration with strains on
government resources.
“The current government From the instant you’re approved for your Wells Fargo Credit Card, you’re able to know
can agree on whatever con-
tract they want,” said Han everything going on with your account. Here are just a few of the ways you can do that:
Thar Myint, who leads the
NLD’s economic team. “But Real Time Alerts
they should think deeply on
what the impact of the proj- With alerts, we can help you stay connected to your banking. You can monitor daily spending, track
ects are, what the benefits are purchases so you can budget better and get notified when purchases are made outside of the country
for the country and whether
they should delay some of or over a limit you set. Being connected helps you make sure it’s you who is making the purchases.
these projects.”
The moves suggest that the 2-Way Fraud Alerts
military intends to continue to
exert influence over the coun- If we note suspicious activity on your accounts, we’ll send you a text detailing the transaction in
try’s economic assets. Under question. You can respond by text to verify the transaction or open a fraud case. That way, you can
the new government, the mili-
tary will hold a quarter of the protect yourself against fraud. And with just a text, you can not only know what’s happening, but
seats in parliament and condo something about it.
trol key ministries.
The contracts, to develop an
economic zone in Rakhine state Year End Statements
and build a deep sea port there, We give you free access to a personalized and simple to read summary itemizing all of your spending
were awarded in December to a
consortium of companies led for the year, even by category. We also combine it with info from your other Wells Fargo accounts, so
by Citic, a Chinese state-run it’s a great money management tool. It can even help you identify tax-deductible expenses.*
conglomerate. The economic
zone is one of three planned in
Myanmar and will be home to
the country’s first deep sea For more information, visit wellsfargo.com
port on the Bay of Bengal, a * Wells Fargo makes no warranties and is not responsible for your use of this
strategic asset for China, which information or for any errors or inaccuracies resulting from your use. You should
is developing infrastructure consult your own tax advisor regarding your tax needs.
along the Indian Ocean. Several
Credit card subject to credit approval. Mobile carrier text messaging and web access
local nongovernmental organi- charges may apply. Actual time to receive alert is dependent on wireless service and
zations have called for the Citic coverage within area. Alerts service may not be available in all areas. Gasoline alerts
contracts to be suspended, cit- may not include purchase amount. Account activity qualifying for alert service may
ing a lack of transparency vary by merchant network. Additional restrictions apply. © 2015 Wells Fargo Bank,
around the bidding process. N.A. All rights reserved. Member FDIC.
Citic officials didn’t respond to
requests to comment.
—Myo Myo
contributed to this article.
URBAN GARDNER A18 | CITY NEWS A18, A19 | PROPERTY MONDAY A20 | ARTS A21 | SPORTS A22
Leading Ladies Deal Pumps Up

A Luxury Gym
Golden Globe revelry HEARD & SCENE | A21 PROPERTY | A20
WSJ.com/NY * * * * THE WALL STREET JOURNAL. Monday, January 11, 2016 | A17
Port Frets on Penn Revamp

Chairman of authority are expected to pay for nearly dubbed the Empire Station ity agreed to $8.3 million an-
all of it. Government funds are Complex. nual rental payments for
questions how much
ADRIENNE GRUNWALD FOR THE WALL STREET JOURNAL
expected to take care of the re- At issue is a 15-year-old 40,000 square feet.
it should have to pay; maining $325 million, of which agreement under which the Mr. Degnan, a New Jersey
$150 million is to come from Port Authority would pay $10.5 appointee who became Port
revisiting a 2000 pact the Port Authority. million annually over 35 years Authority chairman in July
But John Degnan, the Port to lease 250 square feet inside 2014, has peppered the
BY ANDREW TANGEL Authority chairman, is asking the new train hall for two agency’s staff with questions,
the agency’s staff about the ex- ticket counters and a kiosk. including how to justify the un-
The chairman of the Port pected financing at a time The Port Authority’s ex- executed lease deal “in the face
Authority of New York and when it also needs to come up pected rental payments—its of the dramatic reduction of
New Jersey is questioning his with funding for other big proj- share of the $325 million gov- leased space” yet increased
agency’s potential contribution ects. ernment contribution toward rent, according to a memo sent
of nearly half the public fund- The questions about financ- the Empire Station project— Saturday that was reviewed by
ing expected for a recently pro- ing come in the early stages of were valued at $150 million, The Wall Street Journal.
posed overhaul of New York’s a plan announced last week to according to a Cuomo adminis- Mr. Degnan noted in the
Cooper Union’s 41 Cooper Square building in the East Village. Penn Station. overhaul Penn and revive a tration official. memo that the agency hadn’t
The revamp of the Midtown long-stalled effort to build a The terms of this unexe- factored lease payments into
Leader Search
Manhattan station complex is train hall inside a neighboring cuted lease deal shifted signifi- its capital and operating plans.
estimated to cost more than $3 post-office building—a project cantly during negotiations in He questioned the lease’s cur-
billion, and private developers New York Gov. Andrew Cuomo 2000. Initially the Port Author- Please see TRANSIT page A18
At Cooper Union
Creates Friction
BY MIKE VILENSKY Cooper Union tuition-free
again is the priority, and that
Cooper Union was rattled the president should be fo-
last year by a state investiga- cused on that. Their suggested
tion of its finances, the depar- candidate: U.S. Sen. Bernie
ture of its president and Sanders, the Vermont Demo-
boardroom infighting so crat running for president who
heated that a psychoanalyst has made college costs a focus
had been hired. of his campaign.
Now the Manhattan arts Others involved say they
and engineering school hopes are searching for the right
to find a new leader who can candidate, and his or her com-
right the ship, but the search mitment to free tuition is one
is already reopening old of several important factors.
wounds. A job listing released last
In December, Cooper Union month intensified the board-
resolved a lawsuit and probe, room friction, with critics say-
both related to its decision to ing it doesn’t mention the
begin charging tuition. A state school’s unique circumstances,
ALLEN EINSTEIN/GETTY IMAGES
court approved an agreement instead seeking an “innovative

that the school could continue leader to grow and build high-
charging but must examine quality programs” when the
how to return to a full-scholar- school ought to be scaling
ship model. back.
Jamshed Bharucha resigned “It’s very boilerplate, and
as Cooper Union’s president it’s very disappointing,” said
over the summer amid the Toby Cumberbatch, a Cooper
board’s negotiations to end the Union professor who was one The Brooklyn Nets lost to the Detroit Pistons in Michigan on Saturday, in what was the last Nets game coached by Lionel Hollins.
lawsuit and New York Attorney of the lawsuit plaintiffs and is
General Eric Schneiderman’s
investigation.
Replacing Mr. Bharucha is
now, as part of the court set-
tlement, observing the board.
“You will never come up
Nets Dump Coach, Reassign General Manager
now the board’s most pressing with a candidate profile that BY ALEX RASKIN cision now, it enables our or- a record $197 million in player
business, but trustees and oth- makes every individual happy,” ganization to use the rest of salaries and luxury taxes for
ers involved in the search are Please see COOPER page A18 Frustrated by a 10-27 start the season to diligently evalu- the 2013-2014 season alone.
clashing over what they are to the season and a nine-game ate candidates with proven If anything, King’s demotion
looking for. Former President Barucha losing streak at home, Brooklyn track records. It’s clear from was unexpected because prior
Some of them said making defends tuition decision.... A18 Nets owner Mikhail Prokhorov our current state of affairs that to Sunday, Prokhorov had been
on Sunday fired coach Lionel we need new leadership.” incredibly patient with the for-
35°
Hollins and reassigned general That Hollins would be fired Former Nets coach Lionel mer Duke Blue Devils forward.
Weather N.Y. Sports Lineup manager Billy King to a differ- is hardly a surprise. The Nets Hollins, left, and GM Billy King. It’s also rare to see a general
Real Feel ent role in the organization. have gone from dropping nail manager dismissed in the mid-
TODAY’S 7 p.m. Monday Assistant coach Tony Brown biters to getting clobbered, be- to an impressive body of work dle of a season, although this is
9 a.m. 19°
HIGH Bruins @ Rangers will serve as an interim coach ing outscored by an average of since being hired in 2010. His the second time that it has
5 p.m. 21°
for the remainder of the season. 11.5 points per game during 2013 acquisition of former Bos- happened to King—the Phila-
Record High “After careful consideration, their current four-game losing ton Celtics legends Paul Pierce delphia 76ers fired him in De-
63° (1975) I’ve concluded that it’s time for streak. Putting the team in and Kevin Garnett left the Nets cember of 2007.
SUNNY, Sunrise/Sunset a fresh start and a new vision Brown’s hands for the remain- without control of any of their The timing puts the Nets in
COLDER 7:20 a.m./4:49 p.m. 7:30 p.m. Monday for the direction of the team,” der of the season is a sensible first-round picks until 2019. a precarious situation ahead of
Spurs @ Nets said Prokhorov, who will hold a decision, if not an exciting one. And while the Nets have made the NBA’s Feb. 18 trade dead-
news conference at Barclays King’s demotion was a bit the playoffs for three consecu- line. For the time being, assis-
Tuesday’s High Center on Monday to discuss more surprising. tive seasons, Prokhorov has tant general manager Frank Za-
41° For N.Y. sports coverage, see A22 the moves. “By making this de- It’s not that King can point paid a steep price, shelling out Please see NETS page A22
“First Republic understands how a law firm operates.”

V I N C E N T I & V I N C E N T I , P. C . (855) 886-4824 or visit www.firstrepublic.com
Vito R. Vincenti, Principal and Shareholder (center); Paul J. Vincenti, Principal and Shareholder (left); New York Stock Exchange Symbol: FRC
John V. Vincenti, Principal and Shareholder (right)
Member FDIC and Equal Housing Lender
A18 | Monday, January 11, 2016 * *** THE WALL STREET JOURNAL.
CITY NEWS
TRANSIT ing way for new tracks and

platforms for more trains.
Mr. Cuomo’s separate Em-
pire Station plan aims to bring
Continued from page A17 more natural light and im-
rent market value and its ac- proved passenger flow to re-
counting treatment, and said make Penn, which has long
the Port Authority board would widely bemoaned by travelers,
revisit the deal at its February transportation experts and
meeting. civic groups.
A state official said the His plan would revive the
Cuomo administration is “con- stalled effort to put a train hall
fident that this vital project in the James A. Farley Post Of-
will be funded and completed.” fice building, a project long
In a brief interview, Mr. De- known as Moynihan Station.
gnan said the Port Authority Patrick Foye, a Cuomo ap-
board had a fiduciary respon- pointee who is the Port Au-
sibility to determine whether thority’s executive director,
the agency should still honor said the “new train hall would
the lease and “confirm that it benefit commuters in both
was properly handled.” states and beyond.”
“If those funds for any rea- Solicitations for developers
son are no longer available for who would construct the proj-
Penn Station, then the board ect in exchange for leveraging
SPENCER PLATT/GETTY IMAGES

should consider whether, in the busy transit hub’s real-es-
the context of the capital plan tate value were expected to be
and other competing needs, we released over the weekend.
are able to make a financial The Cuomo administration
contribution to an otherwise official said the Port Author-
worthy project,” Mr. Degnan ity’s contribution was tied to
said. an “air train” hub, including to
La Guardia Airport. Mr. Cuomo
has proposed such a rail link A woman jogged in the morning fog under the Manhattan Bridge last month during an unseasonably warm stretch of weather.
Amtrak is expected to the Queens airport, which
The Dog Days of Winter in the City

to contribute $100 isn’t accessible by train.
Another $75 million is ex-
million, the Cuomo pected from federal transpor-
administration said. tation grants, specifically
those intended to improve air Come the gentle, fragrant made December happen.” While the temptation re- more diabolical desire than to
quality and infrastructure re- days of May and June we’ll Starting with decorating mains, as an adult you’re share their happiness. But I
The Port Authority operates siliency, the Cuomo official look back at January and our tree, playing Santa—or at hardly allowed to complain. find it even easier to resist
major New York City airports, said. February and marvel at our least Santa’s helper—and As I emerged from the hitting the “like” button than
the PATH train between New A federal transportation of- resilience for having suffered throwing a successful New Brooklyn Bridge-City Hall I do under normal circum-
York and New Jersey and ma- ficial said it wasn’t immedi- through a polar vortex. Year’s Eve party. subway station on a recent stances.
jor bridges and tunnels be- ately clear which already- Though the weather thus far But I see January as the afternoon and confronted I can take some comfort,
tween both states. It is largely awarded grants New York this winter has been more lifeless trough gravity drags that windswept collection of though not a lot, that even if
funded by tolls and airport officials could potentially tap characteris- us down into after the adren- courthouses along Centre I were swimming with dol-
fees. for the project. tic of South- aline rush of the holiday sea- Street, I couldn’t think of phins I wouldn’t be posting
Officials there have been The Cuomo administration ern Califor- son. Symbolized by what cur- much to look forward to. about it on Facebook. My
grappling with how to pay for official said Amtrak is ex- nia during a rently passes for foliage: What makes it more dis- consolation is the belief that
an increasing list of major pected to contribute $100 mil- cold spell. dead and denuded Christmas tressing is that I have no im- seasoned globe-trotters don’t
projects, including a replace- lion in capital, but said a final I’ve al- trees piled high in front of mediate, or even distant, require the reinforcement of
ment of its aging Port Author- agreement for that amount URBAN ways apartment buildings awaiting travel plans. Especially to a providing daily updates about
ity Bus Terminal in Midtown hadn’t been reached. GARDNER thought, their appointment with the more hospitable climate. If their vacations in Caneel Bay
Manhattan and an overhaul of An Amtrak spokesman said RALPH without sci- wood chipper. you do, you can focus on your while their peers back home
La Guardia Airport. the passenger railroad is still GARDNER JR. entific evi- The obvious solution is to departure date as if you were are chained to their desks.
The Port Authority is also negotiating the terms for occu- dence, that take your pleasure indoors. steering a sailboat toward a Though a vacation in
planning to play a major role pying the Moynihan train hall. people, my- While nature, and feeling point on the horizon. Caneel Bay sounds pretty
in digging two new Hudson Once developers respond to self included, consider the part of it, has its therapeutic Exacerbating the misery good at the moment.
River rail tunnels, part of Am- a request for proposals, he season when they were born effects, there’s also some- these days is that many of us If there’s any advantage to
trak’s Gateway project. The es- said Amtrak would have “a the most felicitous of the thing to be said for declaring probably have friends who global warming, it’s that even
timated $15 billion to $20 bil- better sense of what—if any— year. But how can you say defeat; for adjusting your fo- are, at this very moment, sit- in the depths of January
lion plan would also expand additional funds may be neces- that if your birthday falls in cus on such creature com- ting on some Caribbean spring can’t be far behind. I
the current Penn Station, mak- sary to complete the project.” January, especially in the forts as sitting by a fire with beach sipping a rum punch, was returning from a run in
Northeast? a good book and a cup of tea, swimming in the aquamarine Central Park a few days ago
Perhaps if you’re a pas- if not something stronger. water of the Bahamas or St. when the sun hit some salt
sionate skier. But snow has But if you’re a New Yorker Bart’s, or bushwhacking on spread on a path just above
been scarce in these parts so chances are you don’t have eco-vacations. the Metropolitan Museum’s
far. Even the man-made kind. access to a working fireplace. I do. Temple of Dendur.
Snow is beauty’s message de- Chances are much better that How do I know this? Be- It made the crystals spar-
livery system this time of you’ll find yourself in a can- cause they’re Insta-gloating kle like diamonds.
year. Without it some of us yon of tall buildings, being and Face-boasting—continu- At that moment, I swear I
are bereft. buffeted by their wind-tunnel ously posting artsy shots on smelled spring in the air.
My wife disagrees with effect. social-media sites of tropical If nothing else, the season
my assessment of winter’s Just the sort of bone-chill- sunsets or rare butterflies tests your psychological resil-
blues. “I don’t mind down ing conditions that would they’ve encountered in Ama- ience, and your imagination.
time,” after the drama of the have caused you to cry in zonian rain forests.
holiday season, she said. “I pain and protest as a child. I’m sure they have no ralph.gardner@wsj.com
OFFICE OF THE GOVERNOR ANDREW CUOMO
Former Cooper Union President Defends Policy

BY MIKE VILENSKY “Had I not raised the alarm Schneiderman’s analysis of the survive a professional review.”
as clearly and bluntly as I did, Cooper board’s finances as “a Matt Mittenthal, a spokes-
For charging tuition at Coo- even though it upset some hatchet job” and “riddled with man for Mr. Schneiderman,
per Union and breaking with people,” he said, “Cooper errors.” said Mr. Bharucha “played a
the school’s long-standing full- Union may have gone insol- That analysis, part of the major role” in the school’s re-
scholarship model, Jamshed vent in 2014.” broader investigation into the cent problems.
Bharucha, its former presi- Since departing the school, school’s financial plight, criti- “Establishing new leader-
A rendering of the Midtown Manhattan station complex. The dent, became Public Enemy Mr. Bharucha has been named ship at Cooper Union was a
project is estimated at over $3 billion, mostly in private money. No. 1 to activists opposed to a visiting scholar at Harvard critical part of giving the in-
the change. University’s Graduate School Jamshed stitution a fresh start, and it
Protesters camped inside of Education, advising stu- Bharucha is not surprising that the for-
his office and mocked him on dents on higher-education resigned in mer president is unhappy
social media. A group of stu- projects. He is starting a com- June amid with the light that was shed
dents petitioned to have him pany that uses data to provide protests and on his mismanagement,” Mr.
removed. Plaintiffs suing the financial and risk analyses to demands for Mittenthal said.
school over the change said colleges and universities, he his ouster. Mr. Bharucha said his fi-
they wouldn’t settle as long as said, and working on a book nancial plan helped increase
he remained in office. exploring similar issues, ideas access for the neediest appli-
But Mr. Bharucha, who re- he said that were inspired by cized the board’s moves, in- cants, pointing to an increase
signed in June amid New York his work at Cooper Union. cluding several made before in federal grants under his
state Attorney General Eric He has also continued to Mr. Bharucha became presi- watch, while keeping the
Schneiderman’s investigation defend the financial model he dent, as well as aspects of his school afloat.
of the school’s board deci- put in place there. leadership. “I believe I left Cooper
sions, said in an interview last In October, Mr. Bharucha Mr. Bharucha reiterated his Union in a far stronger posi-
month that he wouldn’t have published an essay on his per- critiques during the interview, tion than I found it,” he
handled matters differently. sonal website describing Mr. saying the analysis “wouldn’t added.
COOPER Mr. Bharucha said the tu-

ition change was necessary to
keep the school solvent and
that he left it “in a far stron-
Union alumnus who also sued
the trustees, is now a trustee
himself. “There are some en-
couraging signs, such as that
would consider the position, a
spokesman for the presidential
candidate said he “appreciates
the interest and is deeply
Continued from page A17 ger position than I found it.” the board is talking about bud- grateful for it, but Bernie is fo-
said Johnny Taylor Jr., a He declined to comment on get cuts,” he said. cused now on trying to get an-
trustee who is co-chairman of the search for his successor. “However, for Cooper to other job.”
the presidential search com- Board leaders also defend right itself,” he added, the Despite the disputes among
mittee. the price tag, describing it as trustees must “lead a coopera- trustees and others involved in
®
The committee tried to roughly half the actual cost of tive effort involving the entire the search, Mr. Taylor said the
Garmin VIRB X “find areas where literally al- a full year’s tuition, even as community to get back to the board will know when it has
Action Camera with G-Metrix™ most every person said these they work to eliminate it. “To tuition-free model.” found the right person.
are must-haves,” he said. “A give out a 50% tuition cut to The search began after Mr. “Everyone asked the Su-
Captures more action with rich, high candidate who has worked in everyone admitted is a high- Bharucha resigned in June. preme Court to define what
definition footage at 1080p/30fps an environment where you class problem in anyone else’s William Mea, the school’s vice pornography is, and they were
have had various disputes world,” Mr. Taylor said. president for finance and ad- like: ‘You know it when you
and up to 120 fps (at 480p) slow among stakeholders—that is a As part of the settlement, ministration, is serving as in- see it,’ ” he said.
motion and 12MP photos at up to quality we’re looking for.” some of the plaintiffs ended up terim president.
Founded in 1859 by the in- joining or monitoring the The ad for the position en-
10 frames per second $299.99 We Want to Hear
dustrialist and philanthropist board and taking a role in the courages applicants to apply
Peter Cooper, Cooper Union presidential search. by Feb. 15. Executive-recruiting From You
for the Advancement of Sci- The first meeting, held at a firm Korn/Ferry International Have something to say about
ence and Art was long known Manhattan law firm, “didn’t has been hired to help. an article in Greater New
for waiving tuition. In 2014, it seem as crazy as once de- Devora Najjar, a Cooper York? Email us, along with
began charging $20,400 annu- scribed,” said Mike Essl, a Union senior who served until your contact information, at
ally, a move that prompted Cooper Union professor who November as the student rep- gnyltrs@wsj.com. Your letter
www.willoughbys.com
student protests and the law- sued the board and is now resentative to the board, said could be published in our
NYC’s Oldest Photographic Emporium -Established 1898
298 Fifth Avenue, NY, NY 10001
suit to stop it and was a focus tasked with monitoring the trustee-student relations are weekly Feedback column on
OPEN 7 DAYS A WEEK of the attorney general’s inves- search. “It was procedural to improving. Since the lawsuit Friday. Letters will be edited
(corner of 5th Ave. & 31st St.)
212.564.1600 tigation. The cost remains the the point where it almost had ended, she said, “everything for brevity and clarity. Please
NYC Department of Consumer Affairs #0906861 same for the current academic no life.” has been more positive.” include your city and state.
year. Adrian Jovanovic, a Cooper Asked whether Mr. Sanders
THE WALL STREET JOURNAL. * * * * * * Monday, January 11, 2016 | A19
CITY NEWS
Rise in Sexual Assaults Reported by Taxi Passengers

BY THOMAS MACMILLAN by strangers, with an increas- rape, touching and other lewd rie Cumbo proposed legislation for “ongoing 24/7, 365 monitor- said.
AND PERVAIZ SHALLWANI ing number committed in taxis acts, and the statistics don’t to require panic buttons in the ing of our licensees so that we Some women in New York
and other cars-for-hire, ac- specify whether the driver or back seat of cars for hire. are notified whenever a TLC li- said they do feel they need to
Just two hours into the new cording to police. passenger is the perpetrator. In an interview on WNYC’s censee has been arrested.” exercise caution when riding
year, a 25-year-old from New “Women going out to a bar The increase comes amid Brian Lehrer show last week, An Uber representative said alone.
Jersey hailed a yellow cab in or a nightclub in Manhattan, the rise in popularity of ride- Police Commissioner William technology keeps their passen- The back of a cab can feel
Upper Manhattan and fell believing that they’re doing hailing apps and questions Bratton encouraged women to gers safe. Riders see a driver’s like a sanctuary, said Bunny Mi-
asleep in the back seat. the right thing, they don’t about rider security. Mr. Shea, “buddy up” when hailing cabs name, photo, license plate chael, a 33-year-old artist from
She awoke to find the cab- want to drink and drive, they though, stressed that police are late at night. number, car model and overall Brooklyn’s Bushwick section.
driver sitting next to her, kiss- want to get home safe and get seeing the problem in all types Ms. Cumbo bristled at the rating before they get in an But, she added, “we live in New
ing her neck and reaching into in a cab,” NYPD Deputy Com- of cars for hire, including yel- suggestion. “I’m a single black Uber, spokesman Matt Wing York, where you’re vulnerable
her waistband, a law-enforce- missioner of Operations Der- low cabs. woman in the city of New York said, and every trip is GPS- everywhere. If something feels
ment official said. mot Shea said at a news con- and I should be able to walk tracked. This means “there is a wrong, it probably is.”
“How dare you violate me?” ference last week. “And then outside my house without a clear record and riders can Megan Lewis, a 36-year-old
the woman said, according to they’re getting driven and
Police say 14 rapes buddy,” she said. share their trip ETA, allowing actor and nanny, said she never
the official. The taxi driver passing out and waking up in in cabs were Representatives of the for- friends and family to track feels unsafe taking cabs alone.
apologized, returned to the a desolate area and they’re hire car industry stressed the their trip in real time,” he said. “The medallion number and ev-
front seat and took the woman getting sexually attacked.”
reported in 2015, up safeguards in place for passen- Bhairavi Desai, president of erything is right there,” she
to her destination, officials Police said there was a 6% from 10 in 2014. gers. Allan Fromberg, a spokes- the New York Taxi Workers Al- said.
said. Police later arrested the rise in reports of rapes in 2015 man for the Taxi and Limou- liance, advised passengers to In the case of the woman
driver, and he was charged over 2014, an increase from sine Commission, which make sure they are getting into assaulted early on New Year’s
with felony sexual abuse. 1,354 to 1,439. Reports of rapes Concerns about passenger licenses taxi and other for-hire a cab that is marked and li- Day, police said she took a
That incident, and at least by a stranger increased to 166 safety grew last spring when drivers, including Uber drivers, censed, so that it can be photo of the registration and
one other like it since the in 2015 from 117 in 2014, police the driver of a green borough said potential drivers go tracked. “It’s when you’re hail- medallion number displayed
start of 2016, come as New said, with 14 rapes in cabs in taxi was charged with raping a through a fingerprint-based ing a car that’s not a green cab on the car’s partition. Police
York Police Department offi- 2015, up from 10 in 2014. This 33-year-old passenger in criminal background check. or a yellow cab, that’s when used that information to track
cials say there is a rise in rape is in addition to attempted Brooklyn. Councilwoman Lau- This process, he said, allows that ride is off the radar,” she down and arrest the driver.
Four Teenagers in Custody After Brooklyn Rape

BY MARK MORALES against the four boys—one cial said. The gunman in the tives, the official said.
AND PERVAIZ SHALLWANI 14-year-old, two 15-year-olds group brandished the firearm The commanding officer of
and a 17-year-old, police and told the father to leave the 73rd Precinct reached out
New York City police appre- said. the area, police said. to community leaders about
hended four of five people on The victim was with her fa- The father then left and the incident on Friday, the of-
Sunday who were wanted in ther inside Osborn Playground searched for help. Meanwhile, ficial said.
connection with a sexual as- in the Brownsville neighbor- each member of the group The victim was also
sault of an 18-year-old woman hood around 9:10 p.m. when took turns raping the victim, brought to the Special Victims
at gunpoint inside a Brooklyn the attack happened, police police said. Unit, where she was given a
playground last week. said. The 39-year-old father full interview, the official said.
Two teenagers turned Mayor Bill de Blasio said found two NYPD officers and Detectives found surveil-
themselves into authorities at Sunday he was “disgusted and brought them back to the park lance footage from a deli that
a Brooklyn police station, deeply saddened by the hor- where they found the victim showed the suspected assail-
while two other teenagers rific attack.” but none of the attackers, the ants moments after the attack,
SETH WENIG/ASSOCIATED PRESS

were apprehended in connec- The victim and her father official said. police said.
tion with Thursday night’s were drinking beer in the The victim was taken to The NYPD canvassed the
sexual assault, the New York playground when they were Kings County Hospital, where area hoping to find residents
Police Department said. surrounded by the five assail- she was treated for her inju- who could help identify the
Charges were pending ants, a law-enforcement offi- ries and interviewed by detec- attackers, the official said.
A Capital View New York Gov. Andrew Cuomo speaking at a news conference at
the Javits Convention Center in New York City on Thursday.
Cuomo Plans
College Classes
For Prisoners
BY CORINNE RAMEY of reducing the prison popula-
tion, she added.
New York Gov. Andrew The state spends about
Cuomo on Sunday outlined a $68,000 a year for each in-
broad plan of education and mate in the prison system, a
job training in and outside the Cuomo administration spokes-
state’s prison system. The man said. “Short term it’s
goal, he said, is to halt a cycle more expensive,” Mr. Cuomo
of imprisonment and recidi- said of his initiatives. “Long
vism that disproportionately term it’s actually more cost-ef-
affects men of color. fective.”
As of 2014, the state’s Advocates of overhauling
MIKE GROLL/ASSOCIATED PRESS
prison system had 53,565 in- the criminal-justice system

mates, 73.4% of whom were largely applauded Mr. Cuomo’s
African-American or Hispanic, announcement.
according to the state’s correc- The connection between
tions department. unemployment and recidivism
“We have to stop the cycle,” is one that academics have
said Mr. Cuomo, speaking at studied for decades, but has
Mount Neboh Baptist Church become politically popular
SOMEWHERE UNDER THE RAINB0W: The sky over New York state agency buildings in Albany after a thunderstorm on Sunday. in Harlem. only in recent years, said Ini-
The governor, a Democrat, mai Chettiar, director of the
has announced various initia- justice program at New York
tives since early January in University’s Brennan Center
trian struck by a sport-utility advance of his State of the for Justice, a law-and-policy
Greater vehicle in Teaneck.
Bergen County prosecutors
State address this Wednesday.
Mr. Cuomo’s $170 million
institute.
New York said 62-year-old Stalin Kappil,

of Teaneck, turned himself in
plan calls for spending $100
million in a year to turn fail-
The governor has
Watch Saturday on a charge of leaving
the scene of a fatal vehicle ac-
ing and high-needs schools
into so-called community
announced various
initiatives ahead of
cident. He was released after schools, which integrate
posting bond and is scheduled schools with social services. Wednesday’s speech.
to appear in municipal court on Within prisons, Mr. Cuomo
WAYNE PARRY/ASSOCIATED PRESS
Wednesday. said he will expand higher-ed-

BROOKLYN A telephone number in Mr. ucation programming, funded “What’s really interesting in
Kappil’s name rang unanswered by $7.5 million in criminal-for- all of this is it’s clear they are
Two Men Are Killed Sunday morning. His lawyer’s feiture funds obtained by Man- talking about education and
In Weekend Violence name wasn’t immediately avail- hattan District Attorney Cyrus employment as a crime-fight-
Two men were killed and able. Vance Jr., Mr. Cuomo’s office ing strategy,” Ms. Chettiar
three others were wounded in a Authorities say 59-year-old said. said. “I think this gets at the
pair of violent incidents over the Steven Leitgeb was struck by Mr. Cuomo also proposed root of the problem of mass
weekend in Brooklyn, police said an SUV as he was crossing the $55 million for a jobs program incarceration much more so
on Sunday. The Tropicana Casino in Atlantic City, N.J. Lawmakers can’t agree intersection of Cedar Lane and and workforce training, partic- than sentencing reform.”
A 25-year-old man was on a ballot question allowing two new casinos in the state. Garrison Avenue and the driver ularly geared toward at-risk Richard Aborn, president of
found with a gunshot wound in fled the scene. Mr. Leitgeb was youth. After release from Citizens Crime Commission of
his chest near the intersection old man was shot in the leg and lantic City. But it says Mr. taken to a hospital, where he prison, the state will coordi- New York City, a public-safety
of East 93rd Street and Rutland another 29-year-old man was Sweeney’s plan does more than a died a short time later. nate transitional housing, job policy organization, said that
Road in East Flatbush just be- shot in the hip, police said. Both rival Assembly measure to limit —Associated Press programs and mental-health the various initiatives will be
fore midnight on Saturday, po- were also taken to Kings the damage to Atlantic City from and medical services. cost effective not only if they
lice said. Emergency Medical County Hospital, where they new in-state competition. LONG ISLAND In addition, Mr. Cuomo said reduce costs of incarceration,
Service workers rushed the vic- were listed in stable condition, Mr. Sweeney’s plan would the state court administrative but if they reduce costs, both
tim, identified as Tyrone Batts, police said. send half the tax revenue from
Police Arrest Suspect arm would no longer provide financial and otherwise, in-
to Brookdale University Hospital No arrests had been made as the new casinos to help Atlantic In Shooting of Girl employers with records of curred by crime victims.
and Medical Center, where he of Sunday afternoon in either City. It also would require that Long Island police have people who were convicted of While the availability of
died a short time later, police incident, police said. both of them be owned by exist- made an arrest in the killing of nonviolent offenses as 16- or higher education is laudable,
said. —Mark Morales ing Atlantic City casino operators. a 12-year-old girl hit by a stray 17-year-olds and have been access to college classes will
Hours later, a gunman The dueling bills differ on who bullet fired through her home’s conviction-free for 10 years. be limited to those who aren’t
opened fire on revelers at a NEW JERSEY could own the casinos and how window. Heather Mac Donald, a fel- serving life sentences, already
house party on Macon Street in much money they would send to Nassau County police say low at the conservative Man- have a high-school diploma or
Bedford-Stuyvesant just after
Casino Union Backs Atlantic City. 20-year-old Jakwan Keller was hattan Institute, said Mr. GED and are within five years
3:30 a.m. Sunday, police said. In- Sweeney Expansion —Associated Press arrested Sunday in Hempstead Cuomo’s initiatives wouldn’t of release, said Vivian Nixon,
vestigators believe the gunman Atlantic City’s main casino on murder, criminal use of a change crime or incarceration executive director of the Col-
started shooting because he workers union is backing state NEW JERSEY firearm and weapons-posses- rates. “He is perpetuating the lege and Community Fellow-
wasn’t allowed inside, a law-en- Senate President Steve sion charges. Information on myth that people are thrown ship, which helps connect for-
forcement official said. Sweeney’s plan for a referendum
Motorist Is Arrested his lawyer wasn't available. into prison lightly,” she said. merly incarcerated women
Steven Bell, 29 years old, on expanding casinos to northern In Teaneck Death Dejah Joyner, a seventh- So-called proactive policing, with higher education.
was shot in the neck and died a New Jersey. Authorities say an arrest grader, died on Oct. 17, a day such as stop-and-frisk or stop- “Most of them will get re-
short time later at Kings County Local 54 of the Unite-HERE has been made in the Christ- after she was shot. ping people for low-level of- leased and still not have de-
Hospital, police said. A 27-year- union opposes casinos outside At- mas-night death of a pedes- —Associated Press fenses, is a more effective way grees,” she said.
PROPERTY MONDAY
What’s the
Deal Big Lease Play in Flushing
Crown Acquisitions
signs 99-year deal
valued at $1 billion;
MIDTOWN
site of Macy’s store
Luxury Gym Comes
To Park Avenue South BY KEIKO MORRIS
The owner of an early 20th
century office tower in Manhat- Family-owned Crown Acqui-
tan’s Midtown South is renovat- sitions signed a long-term
ing the property and bringing in ground lease valued at about
ALAN SCHINDLER
a luxury gym to occupy the $1 billion for a site in Flush-

lower floors. ing, Queens, occupied by a
PETER J. SMITH FOR THE WALL STREET JOURNAL

Columbia Property Trust Inc. Macy’s department store.
and the fitness company Equinox Crown, a major player in
have signed a 20-year lease for The building at 315 Park Ave. New York City’s retail real es-
44,458 square feet at 315 Park South in Midtown South. tate market, last week signed
Ave. South., which sits a block a 99-year lease with the long-
from Madison Square Park. The president of L&L, which handled term owners of the property,
club will have four exercise stu- the Equinox deal. “Part of our Benider Co., for the approxi-
dios, a spa, retail space, a lounge plan is to reanimate the building.” mately 250,000-square-foot
and views of Park Avenue South, —Keiko Morris retail building on Roosevelt
said officials with the companies. Avenue, said Isaac Chera, a
The club is expected to open UPPER EAST SIDE Crown principal.
in the fourth quarter, taking over The property sits right at a
some of the space from global fi-
Construction Loan train station entrance and the The lease for this Flushing building is changing hands. Macy’s says it doesn’t plan to close its store.
nancial-services company Credit Set for Condo Tower epicenter of the Flushing
Suisse Group. Over the next two The development team of neighborhood, which has been The Crown deal is signifi- the works in Flushing, promis- The shopping center, located
years, about 175,000 square feet DDG and Global Holdings Inc. has a draw for both residential cant for its size but even more ing hundreds of rental apart- on the western end of Flush-
will become available in the closed on a $153 million construc- and commercial development so for its potential to redefine ments and luxury condomini- ing and at the base of a luxury
328,198-square-foot building tion loan for a 32-story condomin- in recent years. the area’s retail market, said ums accompanied by large residential project, has at-
when below market-rate leases ium tower under construction on The Macy’s lease of the Tim King, managing partner at blocks of retail space. tracted big brands such as
with Credit Suisse Group end. the Upper East Side. building expires in the short CPEX Real Estate LLC, a “Flushing has great demo- Target, Nordstrom Rack, Nike
Equinox “brings a lot of life The loan, provided by M&T term, said Mr. Chera, who de- Brooklyn-based commercial- graphics,” said Geoffrey Bailey, and Uniqlo.
and energy, which we think will Bank and Union Bank, completes clined to specify the number real-estate-services company, a broker with SCG Retail, Crown, now in its third gen-
attract the kind of tenants we construction financing for the of years remaining. He who isn’t involved in the which is marketing several eration of family operation,
are going for,” said Nelson Mills, $310 million building at 180 E. stressed that the deal is a Crown deal. Flushing retail projects. “You started as a chain of children’s
Columbia’s chief executive. 88th St., according to Joseph A. “long-term play” for Crown. Mr. Chera said the future of are seeing young Chinese who specialty stores but has grown
The location fills a gap in the McMillan Jr., DDG’s chairman and “We believe at some point the property is still undecided, are very affluent. You see a lot into a real estate business
Manhattan market for Equinox, chief executive. “To date, we’ve in the near future the rents but Mr. King said it wouldn’t of empty-nesters coming to with properties stretching
said Jeffrey Weinhaus, the com- funded construction largely with will be greater than what be a surprise if Crown worked Flushing and condos selling from Fifth Avenue in Manhat-
pany’s chief development officer. cash, and now our full capital Macy’s is paying,” Mr. Chera out an agreement with Macy’s out for $1,200 to $1,300 a tan to heavily trafficked down-
“The goal is to keep on filling structure is complete,” he said. said. The property is located that would allow it to rede- square foot.” town areas in the boroughs,
in the gaps…throughout the city Mr. McMillan said the 521-foot “on the 50-yard line in a velop the property and bring in Mr. Chera said it is rare to including Brooklyn. Brokers
so each neighborhood has conve- building will be the tallest resi- booming Flushing market- new tenants. That could triple find such a large retail site said that the family has been
nient access to an Equinox with- dential tower north of 72nd place,” he added. or quadruple the number of with future development po- able to tap into its expertise
out over saturating the market,” Street on the Upper East Side. A Macy’s spokesman said shoppers visiting the site and tential in such a dense, down- from its past retail business to
Mr. Weinhaus said. “Roughly half of the apartments that the company has no plans the immediate area, he said. town environment. The build- make savvy investments and
Columbia, a publicly traded will come with Central Park views, to close the store. The retailer, “This is the equivalent of ing sits on a 65,000-square- redevelop properties.
real-estate investment trust, pur- which is rare for new develop- however, has been under pres- dropping a pebble in a pond,” foot lot. The Flushing property is
chased the building a year ago ment in the area,” he said. sure. Macy’s, which reported Mr. King said. “The ripple ef- Size and scale in a well- the only one Crown controls in
for about $370 million and has Foundation work is expected disappointing holidays sales, fect of this transaction will populated urban setting also that neighborhood and is one
joined with L&L Holding Co., a to be completed in February and has announced plans to close have an extremely salubrious were motivating factors for a the company has been watch-
privately held real-estate com- construction is expected to wrap 36 stores in early spring and impact on merchants and Blackstone Group LP fund, ing for some time, Mr. Chera
pany, to manage, lease and over- up in 2018, he said. A mix of two- eliminate more than 4,000 landlords up and down Roose- which paid about $410 million said.
see the revamp of the property. bedroom to four-bedroom apart- jobs, with some employees to velt Avenue and Main Street.” last summer for most of the The deal “signifies our de-
“Often when we get involved ments will be priced from $3 mil- be relocated. The Flushing Flushing’s landscape al- 680,000-square-foot shopping sire to invest in best of class
in buildings, they have been off lion to $30 million. store wasn’t among those ready is shifting. A number of center and garage known as locations in strong urban re-
the radar,” said Robert Lapidus, —Emily Nonko listed as closing. mixed-use developments are in the Shops at SkyView Center. tail markets,” Mr. Chera said.
Developer Gets Major Win

GREATER In Court Battle With Family
In a harshly worded opin-
NEW YORK
ion, a New York judge has
given a major victory to de-
veloper Jeffrey Feil in his war
with other family members of
the multi-billion-dollar Feil
real estate empire.
Supreme Court Justice
Shirley Kornreich ruled
against Mr. Feil’s brother-in-
law, Stanley Barry, in what
THEATER TUESDAY she described

DYNASTIES as “financially
PETER senseless liti-
RICHARD LOBELL
GRANT gation” in
which Mr.
Barry “is pursuing a personal
vendetta” against Mr. Feil.
“The acrimony and conse- Family members, from left, Carole Feil, Marilyn Barry, Judith
quent expense associated Jaffe, and Jeffrey Feil, at a 2010 dedication of a research building.
with litigating ordinarily triv-
ial matters has risen to a The closely watched fight because he was asked by Mr.
level not ordinarily seen,” is one of three court battles Feil’s father in 1988 to leave
said the decision filed in late being fought in two states the family business. Mr. Barry
December. over a real estate empire that has said it was his decision to
Last week, Mr. Barry, 79 owns a nationwide portfolio leave.
years old, appealed the deter- that includes 26 million In her opinion, Justice
mination in a case that he square feet of space. Founded Kornreich held that Mr. Barry
launched in March 2012 over by Mr. Feil’s father, Louis Feil, hadn’t proved that the con-
one of the family’s many its holdings include the Fred tractors were overpaid or
holdings, Clermont York Asso- F. French Building on Fifth that there was a “quid pro
ciates, a company that owns Avenue and the General Elec- quo” scheme between Mr. Feil
two Upper East Side residen- tric building on Lexington Av- and the contractors. The “free
tial buildings with more than enue. work performed” on Mr. Feil’s
550 rental apartments. Mr. home “could not, on its own
Feil, 68, manages the build- cause harm to Clermont,” the
ings along with most of the
Mr. Feil said in court decision stated. “The only
family’s other properties. papers that Mr. harm to Clermont would be
Mr. Barry, who has a 12% alleged overcharges or faulty
stake in the company, had
Barry was ‘consumed work—neither of which was
been suing for at least $10 with animosity.’ shown.”
million in damages and for Justice Kornreich also de-
more access to records. He al- nied Mr. Barry’s request for
leged a wide range of abuses The biggest court battle, better access to financial re-
that Mr. Feil has denied. being fought in Louisiana, cords, noting he had been
Justice Kornreich dis- pits Mr. Feil against his sis- provided all that he has re-
Using the “Lion King” as a template, Disney’s live-theater missed Mr. Barry’s charges ters: Carole Feil, Judith Jaffe quested.
group has quietly turned “Aladdin” into one of Broadway’s saying they lacked proof and and Marilyn Barry, Mr. In legal papers filed as
said she agreed with Mr. Feil Barry’s wife. part of his appeal, Mr. Barry
top-grossing shows. Next step? International export. that Mr. Barry “simply does In the lawsuit that Justice listed several reasons for re-
not wish to see the case end, Kornreich ruled on, Mr. Barry versing the ruling. For exam-
regardless of merit.” alleged Mr. Feil abused his ple, Mr. Barry claimed Justice
Noting the expense of liti- control of Clermont, which Kornreich “wrongly held” that
Read more tomorrow in the Greater New York section. gation for more than three owns 444 E. 82nd St. and 445 he couldn’t allege “either a
years in the millions of dol- E. 80th St. Among other al- breach of fiduciary duty…or a
lars, her decision stated “this leged misdeeds, Mr. Barry acclaim for an accounting” be-
action has been a net loss for cused Mr. Feil of overpaying cause he failed to directly
all parties, and future litiga- Clermont York contractors prove a quid pro quo agree-
tion would only continue to who also did free and dis- ment.
drain the company of more counted work on personal Mr. Barry’s papers go on
GREATER NEW YORK

resources than Feil is even al- projects for Mr. Feil and em- to assert that the quid pro
leged to have misappropri- ployees of his management quo standard applies to crimi-
ated.” company. nal conduct but not to civil
© 2015 Dow Jones & Co., Inc. All rights reserved. 3DJ3078 Messrs. Feil and Barry de- Mr. Feil, in court papers, claims concerning an account-
clined to comment through countered that Mr. Barry was ing or breach of fiduciary
representatives. “consumed with animosity” duty.
THE WALL STREET JOURNAL. * * Monday, January 11, 2016 | A21
HEARD & SCENE
An ‘It Girl’ Approach to the Golden Globes

WEST HOLLYWOOD, Ca-
lif.—The conversation that
has dominated the entertain-
ment business this past
year—or at least the press
around the entertainment
business—has been about
women in Hollywood. And
while the two movies that
seem to be getting the bulk
of Oscar talk at the mo-
ment—“The Big Short” and
“Spotlight”—are comprised
almost completely of male
ensembles, the Golden
Globes weekend here has
L-R: IMEH AKPANUDOSEN/GETTY IMAGES; DAVID X PRUTTING/BFA

been pretty much monopo-
lized by talk of “It Girls.”
That’s not to say that
“The Big Short” and “Spot-
light” haven’t
had their place
in the sun
these past few
days.
Paramount
MARSHALL Pictures, its
HEYMAN honcho Brad
Grey and Via-
com CEO Phi-
lippe Dauman celebrated the
former, an unlikely comedy
about the American financial
crisis, with a splashy party Left, Bo Derek, John Corbett,
at the Chateau Marmont on Sharon Stone and Chris Noth
Saturday where the trays of at Bouchon. Alicia Vikander,
miniature crab cakes were above, at W Magazine’s party.
extensive and generous.
On Friday, many of the
same guests attended a party
at Bouchon that was more on
theme for “Spotlight,” a film
about the Boston Globe jour-
nalists who exposed the
years of abuse perpetuated
by leaders in the Catholic
Church in Boston.
Sponsored by Open Road
and Ketel One, the party fea-
tured recreations of Boston
Globe newspapers and lots
of Boston-themed foods, in-
L-R: DAVID X PRUTTING/BFA (2); GETTY IMAGES

cluding New England clam
chowder and mini stadium
hot dogs with baked beans.
On the way out, guests were
given boxed Boston cream
doughnuts. In fact, the only
thing that seemed to be
missing were priests.
Over the past several
years, W Magazine has taken
a real ownership of the
Golden Globes, much in the
way that Vanity Fair owns Cate Blanchett and Saoirse Ronan, left, and Adam McKay and Kristen Wiig, center, at W Magazine’s party. At right, Gina Rodriguez at the Moët & Chandon event.
the Oscars. The magazine
hosted its annual party on Saoirse Ronan (“Brooklyn”). ernan Shipka (“Mad Men”) “It’s about personality. It’s Aspiring filmmakers had planning to be her date to
Thursday evening at the For an L.A. party, there were and Lola Kirke (“Mozart in about being different and been invited to create and the Globes on Sunday. “He
Chateau Marmont with im- a surprising number of the Jungle”) were among the standing out.” submit 30- to 60-second has no attention span, so I
ages from its current great guests wearing black, which guests here, but producers Gina Rodriguez happens to films with the goal of not knew if he got excited by
performances portfolio a few local fashion designers Barbara Broccoli (“Spectre”) be an It Girl of the moment only winning a trip to Sun- something, it was good.”
strewed all over the sixth in attendance, including both and Stacey Sher (“The Hate- at the Golden Globes. She day’s Globes but also a “It’s not necessarily so
floor of the hotel. Andrea Lieberman and Mo- ful Eight”) fawned in partic- won, rather surprisingly, at $25,000 filmmaking grant. easy to make someone inter-
Many of the famous folk nique Lhuillier, suggested ular over British actress Bel last year’s ceremony for her Ms. Rodriguez had been one ested in 60 seconds,” added
in the photos showed up too, had to do with the rainy, Powley (“The Diary of a role on the CW show “Jane of the competition’s judges. Ms. Rodriguez. This, per-
and more. Among the guests chilly weather. Teenage Girl”), who wore a the Virgin.” The tables turned “It was actually a very dif- haps, encapsulated a new
were a bunch of ladies of the The weather was similarly Gucci green printed silk twill Friday evening at Roku on ficult task,” said Ms. Rodri- theory akin to Andy War-
moment, including Cate brisk but the outfits defi- blouse and an ivory tiger Sunset Boulevard, where Ms. guez, who whittled the num- hol’s, one that certainly can
Blanchett (“Carol”), Elizabeth nitely more colorful on Sat- embroidered silk jacquard A- Rodriguez was present at a ber of shorts down to 10, be applied to the current
Banks (“Love & Mercy”), Ali- urday, as W Magazine con- line skirt. cocktail party to celebrate then started asking her close modus operandi of an It Girl
cia Vikander (“The Danish tinued its celebration at the What makes an It Girl in Moët & Chandon’s Moët Mo- friends and family for their in 2016: “You put your best
Girl”), Brie Larson (“Room”), restaurant A.O.C. This was 2016 “is the same thing that ment Film Festival Competi- opinions. Chief among her 60 seconds forward,” she
Kirsten Dunst (the second an on-the-nose, annual It made an It Girl in 1816,” said tion and the brand’s 25-year advisers was her father, a said, “and you hope that
season of FX’s “Fargo”) and Girls lunch. Chanel Iman, Ki- W’s editor Stefano Tonchi. relationship with the Globes. boxing referee who also was someone digs it.”
ARTS & ENTERTAINMENT
Tessa Hadley Discusses Inspiration and ‘The Past’

BY ANNA RUSSELL Wall Street Journal is owned rather short-story-like way
by News Corp. The story fol- and building the novel that
In Tessa Hadley’s new lows four siblings who re- way. I think life does happen
novel “The Past,” two chil- turn to their family home in in short-story-shaped pieces,
dren wander into an aban- the country, to decide what actually.
doned cottage in the English to do with the house.
countryside. Outside, it is Over tea and biscuits at Who else do you love to
bright and green. Inside, her London apartment, Ms. read?
they find a stash of pornog- Hadley spoke about the I love Elizabeth Bowen.
raphy and the rotting corpse work, her literary heroes, the Bowen’s style is so tight and
GARETH PHILLIPS FOR THE WALL STREET JOURNAL
of a beloved family dog. At enduring appeal of fictional formal. I love Colm Tóibín.
teatime, they don’t tell the families and unlikely places He has extraordinary sen-
adults. for inspiration. Edited from tences which never give you
For years, the London- an interview: anything that summarizes or
based Ms. Hadley has won tells you what you’re meant
fans with meticulously Your novels have some- to be thinking.
crafted stories about fami- times been described as [He and I] both love
lies—and the tensions just “quiet.” What do you think [Henry] James. One of
below their surfaces. Since about this label? [James’s] gifts to writing is
her first novel, “Accidents in They don’t seem quiet to to make you think you can
the Home” (2002), she has me. I don’t really know have a tiny story which can
had 22 short stories pub- where it’s come from. In become a huge, huge thing.
lished in the New Yorker, “Clever Girl,” there were two “The Golden Bowl” is actu-
drawing comparisons to Al- violent deaths, a teenage Author Tessa Hadley walking through an abandoned house and gardens in Somerset, England. ally just two couples, slightly
ice Munro and Anne Tyler. pregnancy, an adulterous af- dodgily assembled, and two
“We may have had more fair. What do I have to do? see there is a style, and then in a painful way. What were you doing of them having an affair. It’s
stories by Tessa in the last 13 [Laughs] suddenly you’re surrounded when you had that revela- not “War and Peace,” the
years than by any other au- In this one actually, by it. The story takes an inter- tion? French aren’t invading Rus-
thor,” said Deborah Treisman, there’s sexual passion and esting dip into the past Actually, as does happen sia, and yet it seems vast.
the magazine’s fiction editor. kids stumbling on the big, Where did the initial halfway through. How did to me, I was in the bath. It’s
At 59, Ms. Hadley, who ugly, dark facts of life: death idea for this novel come that structure develop? a very good place because Why are you drawn to
published her first work at and that stash of pornogra- from? I suddenly had a sense you’re just cut off from fid- stories about families com-
age 46, is well known for her phy. There’s a near-accident I do remember very viv- that something was too flat, dling and working and fuss- ing together?
short stories. But with “The at the end and a teenage idly the image that the story that I wasn’t sure I could ing around. The family and the novel
Past,” her sixth work—and love story. started with. It is Harriet in- sustain the tension quite seem to me a very inevitable
the first with a U.S. book advertently eavesdropping right without having a point You’ve become well- match. There’s something
tour—she is poised to reach Are you a big Alice on her brother making love to which I could attach the known for your short sto- about the rambling, slow-
a wider readership abroad. Munro fan? to his new wife. I had it like present more vividly. And ries. Do you feel like “The cookingness of the novel
Released last week in the Huge, huge fan. She was a moment in a film, a then suddenly I thought, Past” is your most novel- form, which is long, which
U.S. by Harper, the novel was really transforming for me slightly dark Bergman-esque “Why am I holding back?” I like novel? unfolds over time and takes
published in the U.K. in Sep- when I first read her. She moment in a film, that sense thought, I’m just going to I do, actually. In my first a configuration at the begin-
tember to high acclaim. has that exquisite style of how it would discomfort give in to the temptation; novel, and certainly in my ning and twists and changes.
Harper is an imprint of Har- which is so relaxed that at her and sort of break her up I’m going to go back 35 second, I was effectively I mean, that sounds like the
perCollins, which like The moments you almost can’t and make her all over again years or whatever it is. structuring each chapter in a shape of a family.
SPORTS
Will Coughlin Fly the
Coop to Coach Eagles?
Tom Coughlin may soon Super Bowl wins and coach-
be back at MetLife Sta- ing against them for the di-
dium—not to be honored by vision rival Dallas Cowboys.
the team he led to two Seifert waited only two
championships but as coach years between leaving the
of a hated rival. San Francisco job and being
hired by then NFC West rival
Take a Number Carolina. (The Panthers later
moved to the NFC South.)
The Philadelphia Eagles Parcells also coached the
have asked for and received Jets the season after leading
permission to interview the New England Patriots to
Coughlin, according to re- Super Bowl XXXI, when they
ports. Seeing a coach you re- lost to the Packers.
placed turn up for a division The Jets faced a similar
rival is unusual even in the situation this season with
topsy-turvy NFL. Since 1990, Rex Ryan, whose father
it’s happened only eight Buddy (Eagles, Cardinals)
times, including twice by for- also makes the list of
SETH WENIG/ASSOCIATED PRESS
mer Giants and Jets coach coaches who crossed the di-
Bill Parcells. And only Par- visional divide. Ryan was
cells (right) and former able to exact revenge
49ers coach George against the Jets by lead-
Seifert coached in a ing his Bills to two wins
division against against the team that
teams they had fired him, including one
previously led to the in the season finale
Billy King, right, was stripped of general-manager duties after leaving the Nets without control of a first-round draft pick until 2019 Super Bowl. that bounced Todd
For Parcells, Bowles and
Nets Hit Reset Button on Franchise

though, 13 seasons company from
expired between his the postseason.
time coaching the —Michael
Giants to a pair of Salfino
Continued from page A17 mer for three years and $60 Portland in exchange for soon- has denied that was the case,
nin is still listed on the team’s million, Lopez’s surgically re- to-be free agent Gerald Wallace but he was subsequently given
directory. Assistant coach Paul paired right foot has remained in 2012. The Trail Blazers permission to negotiate and
Westphal is also listed, al- in tact, and he’s averaged 19.8 ended up taking All-Star point sign with the Milwaukee Bucks, Turn-Coach
though he could yet leave the points, 8.6 rebounds and two guard Damian Lillard with the who gave the Nets a pair of fu- NFL head coaches since 1990 who led teams in the same division
team, according to one person blocks per game this season. sixth-overall pick while Wallace ture second-round picks as PLAYOFF SB FIRST
with knowledge of the situa- Unfortunately for Lopez, went on to sign a four-year, compensation. COACH DIVISION TEAM/ YEARS FIRST STOP STOP
tion. Brown will be his seventh coach $40 million contract with the King and Hollins might ulti- GIants 1983-90;
Bill Parcells NFC East Cowboys Y Y
King fared well with his since he was drafted by the Nets. mately be replaced by the same 2003-06
moves before the 2015 dead- franchise in 2009. And while The 2011 trade to acquire person, and a familiar face to Buddy Ryan NFC East Eagles 1986-96 Y N
line, dealing the ancient Gar- Brown is a former Net (he was point guard Deron Williams Nets fans. Current Kentucky 49ers 1989-96;
nett to Minnesota for power drafted by the team in 1982 and from Utah cost the Nets an- coach John Calipari is a friend George Seifert NFC West Panthers Y Y
199-01
forward Thaddeus Young, who spent the 1986-1987 season with other pair of draft picks, of Nets CEO Brett Yormark, and Marty Chiefs 1989-98;
Schottenheimer AFC West Chargers 2002-06 Y N
signed a four-year, $50 million the franchise), the odds are in though the move was cele- several reports have suggested
contract with the Nets over the favor of Lopez playing under his brated at the time. But Wil- that the 56-year-old Hall of
AFC East Patriots 1993-96;
Bill Parcells Y Y
off-season. This season, Young eighth coach next season. liams’s contract was bought out Famer will get an offer from Jets 1997-99
is averaging 15.6 points and 9.2 Such turmoil will ultimately over the off-season, and he now the team. Jets 1994;
Pete Carroll AFC East Patriots N N
rebounds per game while be King’s legacy with the Nets, plays with the Dallas Mavericks. Calipari coached the New 1997-99
JIM MCISAAC/GETTY IMAGES

shooting 51.7% from the field. as well as his litany of disas- Then there was the fiasco Jersey Nets for two full season Raiders 2004-05
Norv Turner AFC West N N
And even though King tried trous trades. Beyond the afore- that punctuated the 2013-2014 before being fired 20 games Chargers
and failed to trade center Brook mentioned move that sent season, in which then-coach Ja- into the 1998-1999 campaign, Jets 2009-14;
Rex Ryan AFC East Y N
Lopez on several occasions, the three first-round picks to Bos- son Kidd reportedly attempted but his stock has risen dramati- Bills 2015-
former All-Star remains the ton, as well as the right to to have himself promoted cally since his Wildcats won Source: Stats, LLC
cornerstone of the franchise. swap first-round picks in 2017, above King in the Nets’ basket- college basketball’s national
After re-signing over the sum- King sent a first-round pick to ball operations hierarchy. Kidd championship in 2012.
ON BEHALF OF
THE COUGHLIN FAMILY,
THANK YOU GIANTS FANS
FOR YOUR SUPPORT
THROUGHOUT THE YEARS.
YOU ARE WHAT MAKES BEING

THE HEAD COACH OF THE
NEW YORK FOOTBALL GIANTS
SO SPECIAL!!
WWW.TCJAYFUND.ORG
AUTOS B4 | WSJ.D B6 | MEDIA B7 | CROSSWORD B7 | SPORTS B8
Backdoors
BUSINESS & TECH. Kohl’s Weighs ‘The Force’
Invite Break-Ins Sale or Split-Up Is Felt in China
KEYWORDS | B6 RETAIL | B3 MOVIES | B7
© 2016 Dow Jones & Company. All Rights Reserved. * * * * THE WALL STREET JOURNAL. Monday, January 11, 2016 | B1
Investors
Gain More
Drug Firms Ring In Higher Prices
BY PETER LOFTUS cost of already expensive average of 10.6% for more than In recent years, it has been Clinton, Bernie Sanders and
Clout Over Drugmakers didn’t let up on

price increases with the start
drugs, and come on top of re-
peated price hikes in recent
years.
60 branded products with an-
nual U.S. sales of at least $10
million, according to Deutsche
common for drug companies
to push through annual price
increases in at least the high
Marco Rubio have attacked
drug prices, and proposed var-
ious measures to rein them in.
Boards of a new year, demonstrating

the industry’s pricing power in
the face of mounting criti-
Vanda Pharmaceuticals
Inc. on Jan 1 raised the price
of its new drug Hetlioz, which
Bank. Prices for eight of the
products went up at least 20%.
single digits around Jan. 1 for
many brands—and in some
cases additional increases
The new increases despite
this criticism “signals there’s
still pricing power,” Jefferies
9%-10%
BY JOANN S. LUBLIN cisms of prescription costs in treats a sleep disorder in blind throughout the year—analysts analyst David Steinberg said in
the U.S. people, by 10%, to $148,000 a said. But this latest round of an interview. “Unlike other
American businesses in- Pfizer Inc., Amgen Inc., Al- year, a spokeswoman said. price hikes is significant in countries, there’s no mecha-
creasingly are bowing to in- lergan PLC, Horizon Pharma Piper Jaffray analysts say the Amount that some big U.S. light of the political pressure. nism whereby regulatory au-
vestors’ demands for greater PLC and others have raised price of the once-daily capsule companies have raised prices Politicians, health-care pay- thorities can control price.”
boardroom clout, with dozens U.S. prices for dozens of is now 76% higher than when for dozens of branded drugs ers, doctors and patients have Mr. Steinberg said rebates
of companies revising their branded drugs since late De- it was introduced in 2014. since late December criticized drug pricing in re- and discounts are likely to
bylaws in recent weeks ahead cember, with many of the in- The Vanda spokeswoman cent months, saying medicines partly offset some of the latest
of this year’s annual meetings. creases between 9% and 10%, said the cost of Hetlioz is are out of reach for many pa- price increases, but companies
Proxy access, embraced by according to equity analysts. “within the price range of Pfizer also left prices un- tients and straining health- typically don’t make public the
117 U.S. companies during 2015, The increases are on list treatments that address simi- changed for about 10 products. care budgets. U.S. prescrip- magnitude of such conces-
gives shareholders more power prices, before any discounts or lar size populations,” noting A Pfizer spokesman said tion-drug spending rose 12.2% sions.
to oust directors and influence rebates that manufacturers that fewer than 1,000 patients the company offers “consider- in 2014, accelerating from Repeated increases in list
corporate strategy by letting sometimes provide insurers currently take the drug in the able discounts” off the list 2.4% growth in 2013, the Cen- prices eventually can wipe out
them list competing board can- and other payers. U.S. prices, and the company pro- ters for Medicare and Medic- the value of prior discounts,
didates on ballots for annual Some of the increases add Since New Year’s Day, vides medicines for free to pa- aid Services said last month. said Rick Bruzek, vice presi-
meetings. About 21% of S&P 500 thousands of dollars to the Pfizer has raised list prices an tients meeting income criteria. Presidential candidates Hillary Please see DRUG page B2
companies have adopted proxy
access, up from about 1% in
Detroit Remains Foreign Car Makers’ Mecca

2014, according to Institutional
Shareholder Services, a major
proxy-advisory firm.
Big businesses that handed
investors the keys to their India’s Mahindra sets Ford’s chairman is on a
boardrooms last year include
General Electric Co., AT&T up shop in Michigan to quest to reinvent the
Inc., Apple Inc., Citigroup learn from Big Three, company founded by
Inc., Occidental Petroleum
Corp. and McDonald’s Corp. avoid their mistakes his great-grandfather
These companies typically
changed corporate bylaws so BY JOHN D. STOLL BY CHRISTINA ROGERS
owners with at least 3% of
their shares for at least three TROY, Mich.—Decades ago, Years ago, when Tesla Mo-
years can propose a significant Japanese car companies trav- tors Inc. was still a tiny com-
portion of board members. eled to Detroit to learn to be pany, Ford Motor Co. Chair-
“The accelerated accep- like the Big Three. Today, one man Bill Ford Jr. dropped in on
tance of proxy access is un- of India’s top auto makers is the electric-car startup. Sens-
precedented,’’ said Avrohom J. following in their footsteps— ing “the winds of change were
Kess, a partner at Simpson Th- while hoping to learn to avoid coming,” the visit, along with
acher & Bartlett LLP. “We’re in Motown’s past mistakes. others he made to Silicon Val-
a new world.’’ The manage- Mahindra & Mahindra Ltd., ley tech firms, provided inspi-
ment lawyer advises boards a Mumbai-based conglomerate ration to reinvent the company
about governance. with a thriving tractor busi- his great-grandfather founded
“We could approach half of ness and infor- more than a century ago.
the S&P 500 companies within DETROIT mation technol- “It made me even more im-
two years’’ adopting proxy ac- AUTO ogy operation in patient,” Mr. Ford, 58 years old,
cess this year, said New York SHOW the U.S., quietly said in his office late last week,
City Comptroller Scott M. has amassed an characterizing the auto maker
Stringer, who oversees $162 engineering staff as turning over every rock to
billion in pension funds. He is about a dozen miles north of transition from strictly a seller
spearheading a campaign that Detroit. Plucking talent from of automobiles to a company
NICK KING FOR THE WALL STREET JOURNAL
initially challenged 74 more Ford Motor Co., Tesla Motors able to respond to the rapid ur-
companies, including 3M Co., Inc. and Fiat Chrysler Auto- banization he sees coming.
NVR Inc. and Home Depot Inc., mobiles NV, the company aims The to-do list includes look-
to adopt or improve proxy ac- to catch up with industry leading at a range of partnerships,
cess this year. ers by developing a vehicle including alliances and potential
Mr. Stringer’s new drive fol- able to meet American buy- acquisitions, and experimenting
lows his similar 2015 initia- ers’s demands and the nation’s internally with new business
tive, supported by an influen- tough regulatory standards. lines, such as ride-hailing and
tial bloc of public pension The Indian auto maker pay-by-minute car rentals.
funds in various locales. Forty- doesn’t sell many sport-utility For years, Mr. Ford has spo-
three of their 66 shareholder vehicles in developed markets. ken out about the problems cre-
resolutions for proxy access However, at home it is battling Mahindra’s Troy facility is within a 20-mile radius of more product-development resources than ated by increased congestion in
won majority support at an- global auto makers rushing to Munich, the home of BMW, Stuttgart, where Daimler resides, and Wolfsburg, VW’s base, combined. the world’s major cities and the
nual meetings last year. India, including Hyundai Mo- need for mobility alternatives as
TIAA-CREF, a big asset tor Co. and Honda Motor Co., doesn’t pivot, it is in danger of chief Rajiv Mehta calls “a hindra’s ability to meet the people’s attitudes toward car
manager, separately mounted which are gobbling up market running into the same fate Mecca for SUVs,” is a natural most stringent standards, ownership change.
a letter-writing campaign to share using resources and ex- that nearly shut down Detroit. place for the company to learn company officials say. “To me, it’s a way to reinvent
its top 100 U.S. holdings last pertise Mahindra lacks in its Mahindra stumbled in its how to do that. “Two years ago, a customer this company that makes it in-
year and urged those compa- domestic market. first attempt to go global, and Mahindra’s first made-in- [in India] wouldn’t have paid credibly relevant for the next 50
nies to improve the ability of In recent years, the com- several years ago ended an ef- Detroit project in its 70-year for ABS (anti-lock braking) or years,” said Mr. Ford, who has
shareholders to nominate di- pany has bought a Korean auto fort to bring an India-devel- auto making history—a large air bags,” Pawan Goenka, Ma- been chairman since 1999. “If
rectors. Thirty-nine firms maker, an Italian design house, oped pickup truck to the U.S., SUV the size of a BMW X5 hindra’s automotive chief, said we did nothing, we could be
made the move or committed an electric-vehicle maker and a setback that still has it tied dressed in camouflage—is be- in an interview. “Today, 75% of consigned over time to an ever-
to proxy access by early 2016. other assets in an attempt to up in litigation. The company’s ing tested on the streets of the customers want to buy dwindling number of traditional
“We are continuing to have boost its game, but its market senior executives say they are Metro Detroit. Global safety those options.” car and truck buyers.”
conversations” with the rest, share is still slipping, much still intent on becoming a and fuel economy regulations The marriage of an Indian Mr. Ford’s conviction is rep-
said Bess Joffe, head of corpo- like Indian rival Tata Motors global force and Detroit, which are tightening significantly, auto maker and the Motor City licated in the offices of auto
Please see PROXY page B2 Ltd. If the company’s focus Mahindra’s product planning and this SUV is showing Ma- Please see INDIA page B4 Please see FORD page B4
Golden Globes Take the Stage

Apple News Is Off to a Rocky Start
BY JACK MARSHALL “We’re in the process of fix-
AND STEVEN PERLBERG Reading News on the Go ing that now, but our numbers
Time spent on publishers' mobile properties are lower than reality,” he said.
Since it launched last Sep- “We don’t know what the right
tember, Apple Inc.’s News app 1.2 billion hours November number is,” but he added that
has attracted more than 100 910.7 million it was better to undercount
publishing partners world-wide 1.0 than overcount traffic.
hoping to capitalize on the Despite the glitch, Mr. Cue
growing consumption of news said Apple is pleased with the
on mobile devices. 0.8 product so far. He said most
There is one major problem: feedback from publishers has
Neither media companies nor 0.6 been positive. Usage has
Apple know how many people “scaled very fast…but it
are reading. doesn’t mean we don’t all want
The company mistakenly 0.4 more,” he said.
has been underestimating the A host of major publishers
number of readers using the 0.2 have signed up to distribute
News app since its launch, and their content via Apple News,
PAUL DRINKWATER/ASSOCIATED PRESS
passing that inaccurate infor- including Time Inc., Vice Me-

mation on to publishers. 0 dia, The Atlantic, Business In-
Publishers don’t pay to post 2013 ’14 ’15 sider, the New York Times,
their content to the News app, Note: Data covers nearly 2,000 predominantly ad-supported media properties Washington Post and The Wall
but getting an accurate tally of Source: comScore THE WALL STREET JOURNAL. Street Journal.
users is important because it The app is still in its in-
can affect their ability to sell app; they keep 70% of ad reve- company missed the error as it fancy, but the audience-mea-
advertising and to manage nue if Apple sells ads on their focused on other aspects of the surement issue, along with
their resources accordingly. behalf. product. The company didn’t other uncertainties surround-
Apple allows publishers to Eddy Cue, Apple’s senior explain how the problem oc- ing the selling and serving of
Comedian Ricky Gervais returned to host the Golden Globes in Beverly keep 100% of revenue when vice president of Internet Soft- curred or say exactly when it ads, has raised questions
Hills on Sunday. Article on page B7 and more on WSJ.com/speakeasy. they sell their own ads into the ware and Services, said the might be rectified. Please see APPLE page B6
B2 | Monday, January 11, 2016 * **** THE WALL STREET JOURNAL.
INDEX TO BUSINESSES BUSINESS NEWS

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-B
Affymetrix...................B3
Alcoa.......................B3,C1
Allergan.......................B1
General Motors...........B4
Global X FTSE Greece
20 ETF.......................R7
Global X FTSE Portugal
Oculus VR....................C6
Pacific Investment
Management.............C3
Pearson, Simon &
Railroads Face More Tough Track
Allstate.......................A1 20 ETF.......................R7 Warshaw...................C3 BY LAURA STEVENS analyst with Sanford C. Bern-
Alphabet Cl C.B4,R4,R12 Global X Funds............R7 Pennsylvania State stein.
Amazon.com ............... R4 Goldman Sachs Employees' Retirement
American Eagle ActiveBeta Emerging System......................C2 Railroad operators are fac- Union Pacific Corp. and
Outfitters..................B3 Markets Equity ETF.R2 Pfizer...........................B1 ing another rough ride this CSX have responded by lay-
Amgen.........................B1 Goldman Sachs Group Polen Growth year, as global uncertainty, ing off employees, storing lo-
Anbang Insurance Group .......................... C1,R2,R5 Fund;Investor............R4
Heartland Value Fund R9 Pratt & Miller sliding oil and commodity comotives and reducing op-
..................................... C3
Anchorage Capital Group Horizon Pharma..........B1 Engineering...............B4 markets and weakening man- erations. Norfolk Southern
..................................... C3 Hyundai Motor ...... B1,B4 Progressive.................A1 ufacturing rattle their big- Corp. closed down one of its
Apple.................B1,B6,C6 Illumina.......................B2 Prudential Jennison
Select Growth Fund.R4
gest shippers. three headquarters last year,
Arch Venture Partners Institutional
.....................................B2 Shareholder Services Q Beginning Tuesday, when and said it plans to cut back
Bezos Expeditions......B2 .....................................B1 Qualcomm...................B6 CSX Corp. reports fourth- on some operations affected
BlackRock...............C3,R5 Intel.............................B6 Quinn Emanuel Urquhart quarter results after the mar- by coal’s decline.
BlackRock Impact U.S. iShares Currency
Equity Fund...............R5 Hedged MSCI Eurozone
& Sullivan..................C3 ket closes, rail- One silver lining is that
BlueCrest Capital ETF............................R7 R-S-T THE WEEK roads are the reduced rail traffic has
Management.............C3 iShares MSCI EAFE ETF RatPac EntertainmentB7 AHEAD expected to de- enabled the railroads to im-
BlueMountain Capital R7 Regeneron
Pharmaceuticals.......R4
liver dour ex- prove their service. Accord-
Management.............C3 iShares MSCI Emerging
BP ................................ C6 Markets Minimum Rosneft........................C6 pectations for ing to an analyst report by
Bridgewater Associates Volatility ETF............R2 Saba Capital the year ahead. Nomura, the average speeds
..................................... C3 iShares MSCI Eurozone Management.............C3 The end of 2015 was at the four major U.S. rail-
Broadcom .................... B6 ETF............................R7 Samsung Electronics..B6
Saudi Aramco..............C6 hardly smooth, as an unsea- roads were up 15% as the
C-D iShares MSCI Ireland
Capped ETF...............R7 Sears Holdings............B3 sonably warm winter, higher year began, exceeding record
Calvert Investments...R5 SoftBank Group .......... C2
Chevron........................C6 iShares MSCI Italy retail inventories and indus- 2012 service levels.
Capped ETF...............R7 Sprint...........................C1
China Life Insurance...C3 Starbucks....................R4 trial weakness extended the Railroads may also be able
China Minsheng Banking iShares MSCI Spain
Capped ETF...............R7 Sutter Hill Ventures...B2 year’s slide in rail volumes. to command higher rates
..................................... C3 Tesla Motors...............B1
Chi-X Global................C3 J-K-M Intermodal shipments—con- from shippers who are seeing
Tesla Motors...............B4 tainers and trailers also car-
Citigroup.................B1,C1 Janus Capital Group...R9 Texas Instruments ..... B6
less in the way of fuel costs
Columbia Threadneedle Janus Real Return Fund Thermo Fisher Scientific ried by trucks—were an ex- being passed through to
Investments..............C2 .....................................R9
Columbia U.S. Social
.....................................B3 ception, but they grew only them, analysts said. And a
Janus Short-Term Bond Thomson Reuters.......R2
Bond Fund.................R5 Fund .......................... R9 slightly. federal requirement for
Thornburg Developing
CSX..............................B2 Kohl's...........................B3 World Fund;A............R2 Total U.S. rail traffic de- trucks to install new technol-
Daimler........................B4 Macy's.........................B3 Toyota Motor..............B4 clined 2.5% last year to 28 ogy could take as much as
Deutsche Bank............C3 Mahindra & Mahindra B1 TPG Capital.................C4 million carloads and contain- 7.5% of the fleet out of com-
Dewey & LeBoeuf.......B3 Marvel Studios.........A12 21st Century Fox........B7
DoubleLine Core Fixed McDonald's..................B1 ers, according to the Associa- mission in the second half
Income Fund;I...........R8 U-V-W
MediaTek.....................B6 tion of American Railroads. the year, according to Ste-
Dyax.............................C1 Microsemi....................C2 UBS Group...................C1
For this year, Stephens Inc. phens, adding an incentive
E-F Momenta Vanda Pharmaceuticals
Pharmaceuticals.......B3 B1 analysts forecast a 1.6% de- for shippers to use rail.
Exxon Mobil ................ C6
VIKTOR KOEN
Morgan Stanley .......... C1 Van Eck Emerging cline. Hanging over the industry
Facebook...........B6,C6,R4
Markets Fund;A........R2
Fiat Chrysler Mylan...........................B3
Van Eck Global............R2
Adding to concerns, China’s is Canadian Pacific Railway
Automobiles ............. B1 N-O-P Vanguard FTSE stock markets have plunged Ltd.’s $30 billion bid for rival
Fidelity Investments..R8
Ford Motor.............B1,B4
Netflix.........................R4 Emerging Markets ETF this month amid broader wor- Norfolk Southern. The pur-
New Regency Pictures .....................................R2 ries about that nation’s econ- suit has been rebuffed since
G - H -I .....................................B7 Via Technologies.........B6
Geico..........................A12 Nike.............................R4 Walt Disney................B7 omy. U.S. companies have its disclosure in November,
General Electric .......... B3 Occidental Petroleum.B1 Wimmer Financial...... R5 been relying on China for but CP has said its next steps
sales growth, and further tur- may include launching a
INDEX TO PEOPLE moil in that market will likely

affect intermodal traffic as
U.S. industrial production
plants have switched to natu-
ral gas, whose price in 2015
hit its lowest annual average
month, adding that coal in-
ventories were piling up in
both the North and South.
proxy fight to take the offer
directly to shareholders.
Any deal reached would be
Beizer, Julia ................ B6 Greenspan, Alan.........A2 Porat, Ruth ................. R4 feels the crunch. since 1999, according to the Mr. Levin said that some followed by a prolonged reg-
Bellovin, Steven..........B6 Grieves, Hugh.............R7 Pratt, David .............. A12 “Starting the year, obvi- U.S. Energy Information Ad- plants are running out of ulatory review, with the out-
Bernhardt, Keith.........R8 Haas, Rick...................B4 Renwick, Glenn.........A12
Bernstein, William ..... R8 Hansen, Julie..............B6 Rigrodsky, Seth...........C1
ously things don’t look very ministration. room to store coal, prompt- come uncertain. Meanwhile,
Bouchard, Andre ......... C6 Harrer, Laurentius......R7 Robbiati, Tarek............C2 rosy” for railroads, said Mark Coal volumes fell 12% in ing them to delay shipments. analysts say competitors like
Bush, Jeb....................A4 Harris, Britt.................C2 Roseen, Tom ............... R2 Levin, an analyst with BB&T 2015 to 5.1 million carloads, Rail shipments are lower BNSF Railway Co.—which
Cai, Jin-Yong...............C4 Hawken, Brennan........C1 Rubio, Marco...............A4 Capital Markets, citing the according to the AAR. On av- nearly across the board, in- has said it might go hunting
Carson, Ben.................A4 Hile, Pamela................C2 Ryan, Paul...................A4 manufacturing slowdown and erage, coal used to account cluding those of crude oil as for a partner—are standing
Chaum, David..............B6 Hollis, Dave.................B7 Sanders, Joel .............. B3 the increased competitive- for nearly 20% of railroads’ domestic producers have by. “I think there’s a chance
Christie, Chris.............A4 Hughes, Darren...........C2 Saputo, Dennis............C1
Clark, Matt..................C2 Hurley, Joseph............R8 Schachter, Ben............C6
ness of trucks due to low fuel revenue, but Mr. Levin now pulled back. The trends are that we could see something
Cohn, Bob....................B6 Kelly, David.................R7 Scott, Tim...................A4 prices. estimates the contribution is so dramatic that investors materialize, but I still say the
Comey, James.............B6 Liu Yunying ................. C3 Segalas, Spiros...........R4 Coal is the sector’s single closer to 13%. wonder if railroads will be probability is low,” said Jus-
Cruz, Ted.....................A4 Luckey, Palmer............C6 Shkreli, Martin..........R12 largest source of U.S. carloads, “Clearly it’s a challenging able to offset volume de- tin Long, an analyst with Ste-
Cue, Eddy .................... B1 Malhotra, Davinder.....R8 Singh, Kapil.................R8 accounting for about a third— environment for us with low clines with higher prices and phens.
Daigle, David...............R7 McLeod, Robert .......... R8 Smith, Gibson.............R9 and currently is also railroads’ natural-gas prices,” CSX fi- by cutting costs.
Davidowitz, Daniel ..... R4 Mehta, Rajiv ............... B1 Sperandeo, Victor.......R8
Davis, Steven..............B3 Micheletti, Ed..............C6 Srinidhi Kanuri,...........R8
biggest weakness. Coal vol- nance chief Frank Lonegro “I think flat is the new The Week Ahead looks at
Diaz, Chris...................R9 Miller, Samuel ............ B6 Stein, Jeremy ............. A2 umes have slumped as power said at a conference last up,” said David Vernon, an coming corporate events.
Eck, Jan van................R2 Miringoff, Lee.............A4 Stovall, Robert H........R1
Evans, Scott................C2 Moran, Michael A.......C2 Stovall, Sam ............... R1
DRUG
Ficklin, Damon............R4 Musk, Elon..................B4 Tannuzzo, Gene...........C2 Inc. raised the price of its
Flatley, Jay..................B2 Nasgovitz, Bill ............ R9 Tarullo, Daniel ............ A2 drug Ampyra, which is used to Prescribed Pricing
Ford, Bill......................B1 Nasser, Jacques..........B4 Watters, Darrell..........R9
Ford, Nick....................R7 Neithart, Robert.........R7 Wilson, Tom..............A12 help multiple-sclerosis pa- Price increases since late December for selected branded drugs
Gates, Bill ................... B2 Noble, John.................C6 Wimmer, Per...............R5 tients improve walking, by 11%
Glasscock III, Sam ...... C6 Peng, Nicole................B6 Xiaohui, Wu ................ C3 Continued from the prior page on Jan. 1, to an annual cost of Drug (Manufacturer) Condition Increase
Goenka, Pawan...........B1 Peron, Matthew..........C2 Zittrain, Jonathan ...... B6 dent of pharmacy services at more than $23,650 a patient.
Graham, Lindsey.........A4 Petrou, Karen..............A2 Zuckerberg, Mark........C6 HealthPartners, a Blooming- Acorda offers rebates and Lidoderm (Endo) Pain 25%
ton, Minn., insurer and hospi- discounts off the list price that Viagra (Pfizer) Erectile dysfunction 12.9%
tal operator. are likely to cut about 40%
PROXY
Hetlioz (Vanda) Sleep disorder in blind people 10%
vance notice that any share- Amgen raised the price of from the latest price increase,
holder was considering a the anti-inflammatory drug on average, Chief Executive Restasis (Allergan) Dry eyes 9.9%
shareholder proposal on the Enbrel by 8% in late December, Ron Cohen said in an inter- Namenda XR (Allergan) Alzheimer’s disease 9.9%
topic,’’ and directors had con- according to Raymond James, view. The company has raised
Continued from the prior page sidered proxy access for over a following an 8% increase in the price several times since Lyrica (Pfizer) Pain 9.4%
rate governance at TIAA-CREF. year, a 3M spokeswoman said. September and a 10% increase the drug was approved in Actimmune (Horizon) Chronic granulomatous disease 9%
The rapid spread of proxy ac- Fourteen of the other busi- last May. Enbrel costs about 2010.
cess also has been spurred by nesses that received Mr. $704 a week for the typical Dr. Cohen said it took more Trulicity (Eli Lilly) Type 2 diabetes 8%
companies’ expanded outreach Stringer’s proposal for 2016 dosing for treatment of rheu- than a decade to develop Enbrel (Amgen) Rheumatoid arthritis 7.9%
to major investors and direc- also have already endorsed matoid arthritis, according to Ampyra. He said Acorda is de-
Copaxone (Teva) Multiple sclerosis 7.9%
tors’ desire to avoid the ire of proxy access, a Stringer CMS, or more than $36,600 a veloping additional drugs for
proxy advisers that often op- spokesman said. Mr. Stringer year. conditions including Parkin- Note: Price increases don’t reflect any discounts offered by manufacturers
pose their re-election when dropped another two compa- The drug’s new cost is son’s disease. Ampyra gener- Sources: the manufacturers, Jefferies & Co., Deutsche Bank, Raymond James
management ignores a measure nies for technical reasons. about four times its cost at ated $315 million in sales for
garnering majority support. But some, such as NVR, op- launch in the 1990s, said Ray- the first nine months of 2015,
Dozens of companies made pose New York City’s efforts. mond James analyst Christo- or 87% of total company reve- wrinkle-smoother Botox, and vides financial assistance to
the change in recent weeks The home builder wants secu- pher Raymond. The price hikes nue. Namenda XR, a treatment for help patients afford its drugs.
amid looming deadlines for in- rities regulators to block the for Enbrel and other drugs The price hikes are “our Alzheimer’s disease. Botox There were some notable
vestors to submit 2016 annual city’s binding resolution from “seem to have increased in way of insuring that we can went up 3.8%. exceptions to the price in-
meeting proposals. At least 10 coming to a vote this year be- magnitude and frequency,” he survive and develop these pro- An Allergan spokesman creases. Valeant Pharmaceuti-
proxy access bylaws arrived ev- cause the company adopted a said. grams and bring these new in- confirmed the price increases cals International Inc., which
ery week during much of De- limited form of proxy access in An Amgen spokeswoman novative drugs to market,” he but declined further comment. came under fire last year for
cember, said Patrick McGurn, November. NVR requires in- said the price of Enbrel re- said. Horizon Pharma boosted sharply raising prices, hasn’t
special counsel for ISS. vestors to own at least a 5% flects its clinical benefits, Allergan, which has agreed prices for five drugs by 9% to raised prices since September,
3M beat the New York City stake before they can nomi- while helping fund “continued to be acquired by Pfizer for 9.9%, Jefferies said, including according to Deutsche Bank.
pension funds to the punch. nate directors. It declined to scientific innovation.” $160 billion, boosted prices by ActImmune, a treatment for A Valeant spokeswoman
The industrial conglomerate comment, as did Home Depot, Mary Brainerd, chief execu- an average of 9.1% for more hereditary diseases. The com- said changes in the company’s
disclosed its directors’ en- which lacks proxy access. tive of HealthPartners, said than 40 brands so far this pany’s price increases were product lineup have made
dorsement of proxy access, ef- Investors have yet to use drug-industry practices “are year, and left unchanged the subject of a page-one arti- pricing a smaller part of its
fective immediately, in a Nov. their improved entry into board- becoming increasingly intoler- prices for about 20 other cle in The Wall Street Journal expected sales growth. Valeant
10 regulatory filing. The same rooms. But “in the next two or able for consumers, health brands, according to Deutsche last year. canceled nearly all of its
day, the city’s pension funds three years, we might start to plans, doctors and hospitals.” Bank. The increases included A Horizon spokesman said planned price increases for the
sent 3M a similar proxy access see one or two instances,’’ said Drugmakers say they need 9.9% hikes for eye drug Resta- pricing for its products “isn’t fourth quarter, and expects fu-
measure for 2016. Cam Hoang, a partner at Dorsey to raise prices to fund risky sis, the company’s second a key driver” of its business, ture price hikes to be more
“We did not have any ad- & Whitney LLP. research. Acorda Therapeutics highest-selling product after and that the company pro- modest, she said.
Illumina Project Seeks Gene-Based Cancer Blood Test

BY RON WINSLOW highest, said Jay Flatley, Illu- monly used to diagnose can- nomes at exceptionally deep But he acknowledged that it
mina’s chief executive, who is cer. But advances in levels to develop a reliable is crucial to show the test
SAN FRANCISCO—Illumina also chairman of Grail. technology, including the abil- test. “doesn’t have a high false-pos-
Inc., seeking to build on its Illumina is the majority ity to cheaply sequence tumor There are big hurdles. itive rate,” and that it can dis-
strength in DNA sequencing, is owner of the company, which DNA, are just beginning to Broad screening programs for tinguish between potentially
launching a company that will is backed by more than $100 make such tests feasible. prostate and breast cancer, for aggressive cancers and those
develop and market a test to million in its initial financ- Grail’s test will focus on de- instance, often raise suspi- likely to have no health conse-
detect genetic evidence of can- ing. Arch Venture Partners is tecting cancer-associated mu- cions when no cancer is pres- quences. The company plans
cer in the blood. also a lead investor, with addi- tations in DNA fragments to ent—a false-positive result—or to work closely with regula-
The San Diego maker of tional participation from Be- screen people for evidence of find cancer that will never tors and insurers in develop-
SAM HODGSON/REUTERS
gene-sequencing machines zos Expeditions, Bill Gates disease. The company will cause problems yet lead pa- ing the test, said Mr. Flatley,
said Sunday it is forming the and Sutter Hill Ventures, Mr. have a “preferential economic tients to undergo further tests adding that the price will have
company, called Grail, with a Flatley said. The company an- relationship with Illumina” and procedures that come to come in under $1,000 ini-
group of other investors, nounced the launch on the eve and its DNA sequencing ex- with harmful side effects. tially and come down further
marking the latest bet that so- of the annual J.P. Morgan pertise, Mr. Flatley said. Mr. Flatley said a blood test after that.
called liquid biopsies will be- Healthcare Conference here. That will make it possible avoids some such problems He said Grail will spend the
come a major tool for detect- Researchers have long The slide on which an Illumina to perform the especially de- because unlike, for example, next year refining the test be-
ing, diagnosing and managing known that evidence of tu- machine sequences DNA. tailed analyses of DNA frag- suspicious findings from mam- fore testing it in clinical trials
treatment of cancer. mors lurks in the blood, either ments needed to develop and mography, which can have a beginning in 2017. If all goes
The test will be designed to in the form of circulating tu- ably enable doctors and pa- validate the test and to market variety of causes, “we are ac- well, a test to detect evidence
screen people who have no mor cells or in fragments of tients to detect and moni- it at an affordable price. He tually measuring mutations of any cancer—what he
cancer symptoms and detect DNA that are shed from tumor tor the disease without painful estimated the company will from cancer cells.” It is “a di- termed a “pan-cancer screen-
disease at its earliest stages cells. That has raised hopes and sometimes misleading tis- have to sequence between rect measure of the cancer it- ing test”—could be on the
when the chance to cure it is for a blood test that could reli- sue biopsies that are com- 100,000 to 300,000 human ge- self,” he said. market by 2019.
THE WALL STREET JOURNAL. * * * * * Monday, January 11, 2016 | B3
BUSINESS NEWS
Kohl’s Weighs Steps as Woes Mount Starboard

Prodding
With shares down 40%,
the struggling retailer
is considering going
Macy’s on
private or breaking up Real Estate
Department stores have BY DAVID BENOIT
been under siege for decades, AND SUZANNE KAPNER
but lately their fortunes have
hit a new low that could spark Activist investor Starboard
a wave of deal making that Value LP is again urging
could sweep up companies Macy’s Inc. to find ways to
such as Kohl’s Corp. unlock the value of its vast
real-estate holdings, including
By Suzanne Kapner, its famous Herald Square store
Joann S. Lublin and in New York.
Dana Mattioli In a letter and presentation
the investor sent to Macy’s
GABE HERNANDEZ/THE MONITOR/ASSOCIATED PRESS
Shoppers are flocking to management on Sunday, Star-

newer types of stores that sell board said it supports the re-
similar brands at deep dis- tailer’s recently announced
counts and buying more on- plans to cut costs and urged
line, leaving behind cavernous the company to follow through
stores that are difficult to fill with real-estate deals that
productively. Investors, too, could put more cash in its cof-
are abandoning the compa- fers as it struggles with lack-
nies. Shares of major depart- luster sales.
ment-store chains fell nearly In an emailed statement,
37% last year, while the overall Macy’s said it was reviewing
S&P 500 Index fell just 0.7%. Starboard’s letter and materi-
The troubles are prompting als. The company said Star-
some soul searching at these Analysts expect Kohl’s sales to total $19.3 billion in its current fiscal year, which ends this month, roughly the same as in 2012. board’s views are consistent
decades-old businesses. With with actions already under
sales shrinking, Sears Hold- $9 billion, or roughly half its from such firms, people famil- $1.75, leaving an enterprise have clean balance sheets, way at Macy’s. The company
ings Corp. has been selling off expected annual sales for the iar with the situation said. value of $1.2 billion. which makes it easier to advo- said it looks forward to con-
stores to raise cash. Macy’s current fiscal year. Kohl’s declined to comment. Representatives for Bon- cate for share repurchases, ac- tinued dialogue with Star-
Inc. is talking with real-estate Concerned that its de- Some smaller department- Ton and Sycamore didn’t im- quisitions or other alterna- board and other shareholders.
developers to take over space pressed share price could store companies have recently mediately respond to requests tives,” said Rohit Singh, Macy’s last week said it
in its flagship locations and make it a target for activist in- turned to private-equity suit- for comment on Sunday. managing director in UBS’s in- would seek out joint-venture
other stores. vestors, directors are consid- ors. In December, Sycamore Kohl’s problems aren’t as vestment-banking, consumer- partners to take minority
Kohl’s, a national depart- ering whether to hire an in- Partners completed a $3 bil- severe as those plaguing products and retail group. A stakes in some properties af-
ment-store chain with roughly vestment bank to advise it on lion deal to take private Belk Macy’s, and its shares trade at banker at another firm said: ter rejecting Starboard’s ear-
1,200 stores, is debating alternatives that could include Inc., a Southern chain with a premium to the rival chain. “A lot of our retail clients are lier call for a full spinoff of its
whether to pursue more dras- a sale to a private-equity firm, about 300 stores. In recent But Kohl’s directors are trying worried about activists.” real-estate holdings.
tic action, such as taking itself the person familiar with the months, Sycamore has ap- to get ahead of the situation, Founded in 1962, Kohl’s won Starboard’s letter, reviewed
private or breaking up the situation said. proached another re- one of the people said. Activist over shoppers by locating its by The Wall Street Journal, reit-
company, according to a per- The discussions are prelimi- gional chain, Bon-Ton Stores investor Starboard Value LP stores away from malls, stock- erates its view that the com-
son familiar with the situation. nary and directors might opt Inc., about combining with acquired a roughly 1% stake in ing them with affordable pri- pany’s properties are worth $21
Once among the fastest- not to explore such a strategy. Belk, according to people fa- Macy’s last year and is urging vate collections, some by big- billion, all told, and that the sale
growing retailers, the Menom- Kohl’s top executives are open miliar with the matter. the company to form joint name designers, and creating of even a small stake in Macy’s
onee Falls, Wisc.-based re- to the strategic review and the Bon-Ton, which operates ventures for its properties. Ac- racetrack-like aisles that made real estate could help drive the
tailer has stumbled in recent board is expected to discuss 270 stores mostly in the tivists have also propelled re- the stores easy to navigate. company’s shares higher.
years. Despite improvements the company’s multiple op- Northeast and Midwest, has cent deal making at Ann Inc., But that growth has stalled Starboard suggested two
that include recent sales gains tions further this week, the nearly $3 billion in sales but Jos. A Bank Clothiers Inc., Sta- recently. Analysts expect separate joint ventures, one
at existing stores, its shares person continued. A sale to a been unprofitable for the past ples Inc. and PetSmart Inc., Kohl’s sales to total $19.3 bil- for Macy’s landmark proper-
are down 40% from their high private-equity firm is an idea four years. Its share price has among other retail chains. lion in its current fiscal year, ties like Herald Square and a
of $79.07 on April 2. It ended that management has rejected fallen 77% in the past 12 “Activists love this space which ends this month, second for its hundreds of
Friday with a market value of in the past despite interest months and closed Friday at because retailers generally roughly the same as in 2012. mall locations.
Alcoa Gets Miners Sift for Gold in Discarded Ore Waste

$1.5 Billion BY ALEXANDRA WEXLER
AND PATRICK MCGROARTY
pipelines that run as many as
40 miles long, to a processing
Contract JOHANNESBURG—Miners
are sifting through the detritus
plant. There, it passes through
filters and is finely ground be-
fore being treated with cya-
From GE of a century-long gold rush

here, scavenging through 150-
foot-high mounds of discarded
nide, which leaches the gold
particles out of the sludge.
The recovered gold is then
PATRICK MCGROARTY/THE WALL STREET JOURNAL
BY JOHN W. MILLER ore for traces of gold they may forged into rough bars and
still contain. flown to a nearby foundry—by
Alcoa Inc. said it The mounds are the legacy helicopter—to evade South Af-
would announce a $1.5 billion of a mining industry that has rican bandits, who often hijack
long-term supply con- yielded nearly half of the armored cars.
tract Monday with General world’s gold bullion and jew- For each ton of reprocessed
Electric Inc.’s aviation unit, elry since the precious metal ore, an average of just 0.2
underscoring the aluminum was discovered here in the late gram of gold is extracted. DRD-
producer’s efforts to offset dif- 1880s. After digging out raw Gold goes through two million
ficult conditions in its raw- ore from the ground, miners metric tons of ore a month. In
aluminum business. extract what gold they can its 2015 fiscal year that ended
The announcement will from the mix, leaving behind June 30, the company pro-
come the same day as New hills of discarded ore as waste. duced 150,145 troy ounces of
York-based Alcoa reports what Over the years, these A water cannon blasts mining refuse in Johannesburg. Miners are searching for gold in mounds of ore. gold, up 13% from the previous
is expected to be its worst mounds—many now overgrown year.
quarterly results since early with scrub or abutting shanty- While gold prices have fallen company here focused solely fort could go a long way toward The scavenging comes as
2014, including a 17% drop in towns—have been subsumed sharply from their all-time high on reprocessing mine waste. getting rid of the waste, critics conventional mining declines.
revenue from a year earlier by the sprawling city, becom- in late 2011, they are still buoy- Sibanye Gold Ltd., South Af- say the industry hasn’t gone far South African gold miners are
and earnings of two cents a ing part of its geography. But ant enough to make the effort rica’s top gold producer, and enough in addressing the envi- battling rising labor and elec-
share, according to a poll of the mounds still contain trace profitable. Executives also style AngloGold Ashanti Ltd., the ronmental hazards. tricity costs as they dig ever
analysts. Raw-aluminum prices amounts of gold. Until recently, the work as part of a cleanup world’s third-largest gold DRDGold uses water cannons deeper for dwindling reserves.
have fallen over 25% to about going back for those scraps drive, ridding the city of waste miner, are also now working to blast a ton of water every Output has halved in the past
$1,500 per ton in the past wasn’t worth the trouble. that irritates eyes and throats over old dumps. In the first four seconds at the mounds. On decade, pushing South Africa
year. Details of the GE Today, though, companies and contains cyanide, a chemi- half of 2015, about a fifth of one recent morning south of Jo- from first to sixth on the list of
deal were in a news release like DRDGold Ltd. are using cal used in conventional mining, AngloGold’s production came hannesburg, a DRDGold worker global gold producers.
viewed by The Wall Street high-powered water cannons to and uranium that is latent in the from going back through min- in goggles and a waterproof At today’s prices for gold—
Journal. Alcoa will disclose blast many of the towering dug-up earth. ing residue, as well as dis- jumpsuit was using his roaring about $1,100 an ounce—about a
fourth-quarter earnings after dumps open again, pushing “Hopefully one day, 20 years carded ore that was never pro- water cannon to turn a powdery quarter of the waste still lying
the market close on Monday. their contents through miles- from now, all the mine dumps cessed in the first place. gray cliff-face of one partially around the city is profitable to
As usual, it will be first major long pipes to processing plants in Johannesburg will be gone,” It is hard work for thin mar- vanished mound into a torrent reprocess, said Jaco Schoeman,
U.S. company to report, set- that can extract tiny gold rem- said Niël Pretorius, chief execu- gins. And while many inside and of ashy sludge. operations director at DRDGold
ting the tone during a volatile nants. tive of DRDGold, the biggest outside the industry say the ef- The slurry is pushed into subsidiary Ergo Mining Ltd.
time for the stock market.
Alcoa will supply advanced
nickel-based superalloy, tita- cer, Joel Sanders, say their clients
American Eagle May Disappoint THERMO FISHER SCIENTIFIC
nium and aluminum compo-
nents for engines and for en-
Business are prepared to take the financial
fraud case back to court, despite
Affymetrix Is Sold
gine parts made by GE. “We
greatly appreciate GE’s contin- Watch plea deals offered to both that
would have required having a fel-
For $1.3 Billion
Thermo Fisher Scientific Inc.
ued confidence in Alcoa’s ony on their record. They have will buy Affymetrix Inc. in a
aerospace capabilities,” said maintained their innocence. roughly $1.3 billion cash deal
Alcoa Chief Executive Klaus In court Friday, New York that would boost its biogenetic
RICHARD B. LEVINE/NEWSCOM/ZUMA PRESS
Kleinfeld in the release. state court Judge Robert Stolz analysis portfolio, the company
Alcoa will make the parts in DEWEY & LEBOEUF said there was a “déjà vu aspect said Friday.
six U.S. states, as well as to all this.” Judge Stolz declared Under the terms of the deal,
France and Canada. Alcoa said
Dewey Retrial Won’t a mistrial in October once a jury which requires approval by Af-
its aerospace division secured Include Ex-Chairman failed to reach verdicts on major fymetrix shareholders, Thermo
“approximately $9 billion” in A watered-down retrial of counts against Messrs. Davis, Di- Fisher is to pay $14 a share in
contracts during 2015. It has former Dewey & LeBoeuf LLP Carmine and Sanders. cash. Affymetrix’s shares closed
also signed billion-dollar-plus executives is set for September, —Sara Randazzo Friday at $9.21. Thermo Fisher
deals to supply Boeing Co. and but the do-over of the financial said the deal would add 10
Airbus Group SE. fraud case won’t include the PHARMACEUTICALS cents a share to adjusted profit
Alcoa had already signaled firm’s ex-chairman, Steven Davis. in the first full year of owner-
plans to spin off its lucrative Under a deferred prosecution
Mylan, Momenta American Eagle Outfitters Inc. indicated core sales could be below ship and result in about $70 mil-
parts business during the sec- agreement finalized Friday, pros- In Biosimilar Venture Wall Street’s expectation, despite what the retailer called a solid lion in savings by year three.
ond half of 2016. The spinoff ecutors said they will dismiss Mylan NV and Momenta holiday. It said its same-store sales are up 4% so far in the quarter. Santa Clara, Calif.-based Af-
will also supply aluminum the charges against Mr. Davis af- Pharmaceuticals Inc. said Friday Analysts polled by Retail Metrics had forecast growth of 4.7%. fymetrix, which carried an accu-
sheet to auto makers. ter five years if he doesn’t com- they would jointly develop and mulated loss of about $500 mil-
As it trumpets parts-mak- mit any crimes in that period or commercialize six biosimilars. lion as of Sept. 30, has about
ing deals, Alcoa continues to practice law in the state of New Mylan will make an upfront $350 million in annual revenue,
close smelter production in York. Mr. Davis hasn’t admitted cash payment of $45 million to costs and eventual profits. a biosimilar for Orencia, a rheu- while Waltham, Mass.-based
high-cost areas like the U.S., any wrongdoing under the deal. Momenta and could pay up to Mylan will lead world-wide matoid arthritis treatment. The Thermo Fisher has about $17
Europe and Australia. Since Attorneys for Dewey’s former $200 million if milestones are commercialization, and Momenta companies didn’t identify the billion in annual revenue, accord-
2007, it has closed or sold 48% executive director, Stephen DiCar- reached. Each company will has the option to co-commercial- other five biosimilars in the deal. ing to regulatory filings.
of its raw-aluminum capacity. mine, and ex-chief financial offi- equally share the development ize in the U.S. The deal includes —Austen Hufford —Maria Armental
B4 | Monday, January 11, 2016 * *** THE WALL STREET JOURNAL.
AUTOS
In Detroit, Trucks Take Back Seat GM

Ignition
Passenger cars,
electric vehicles are
likely to occupy center
Trial Set
stage at auto show To Begin
BY JEFF BENNETT BY MIKE SPECTOR
AND JOHN D. STOLL
General Motors Co. heads
As auto makers gather to to trial this week in a case in-
kick off Motown’s annual car volving a defective ignition
show, executives appear switch linked to 124 deaths,
poised to talk about every- continuing a legal battle over
thing but the hottest vehicles a safety lapse still dogging the
on the market. auto maker despite a raft of
JEWEL SAMAD/AGENCE FRANCE-PRESSE/GETTY IMAGES
The agenda is full of an- previous settlements.

nouncements regarding cars The trial, which is set to
that drive themselves, cars that start Monday, will begin the
plug into the wall and cars that same day GM takes the stage
aren’t versatile enough to in Detroit at the North Ameri-
be considered light trucks. Pick- can International Auto Show
ups, SUVs and crossovers repre- to highlight a future Chevrolet
sented 60% of December’s U.S. hatchback and electric car.
sales tally amid low gasoline The ignition-switch case,
prices, but those models are tak- part of consolidated litigation
ing a back seat. in a New York federal court,
The overwhelming majority will dredge up for a jury past
of vehicles slated for debut safety lapses the auto maker
Monday and Tuesday at the has worked to put behind it for
North American International Trucks and crossovers will play a bit part, even though they deliver the bulk of industry profits. Exhibitors prepare on the eve of the show. the better part of two years.
Auto Show in Detroit are ex- The trial is a reminder that
pected to be passenger cars or “There is little doubt that in sedan for 2016 and Chevy de- plans to make driverless cars, combined 10 semiautonomous GM still faces potential finan-
electric vehicles, according to North America, taller vehicles signers were drawing up a while a surge in demand for or autonomous vehicles within cial penalties as a result of the
an estimate published by Au- are the sales darlings, while Cruze hatchback, gas prices ride sharing pinches demand five years. Ford’s CEO plans to faulty switch even after reach-
tomotive News. Ford Motor many good sedans are strug- were around $3.50 a gallon for new vehicles. GM, Ford and morph the company into a ing settlements with the Jus-
Co.’s Lincoln brand, Toyota gling to find buyers,” Kelley Blue and sales of passenger cars rivals have all the same tech- transportation services pro- tice Department, shareholders
Motor Co.’s Lexus, Daimler Book analyst Jack Nerad said. were sizzling. nology, but Wall Street has vider. and thousands of consumers
AG’s Mercedes-Benz, Hyundai Trucks and crossovers will “Years ago when plans were given far more credit to Sili- None of those efforts shed totaling more than $2 billion.
Motor Co. and General Mo- play a bit part at Detroit’s made for vehicles that are be- con Valley than Detroit when much light on the profit out- Remaining lawsuits and addi-
tors Co.’s Chevrolet hope to show, even though they deliver ing launched in January 2016, it comes to the battle for the look for 2016, which is strong. tional government probes loom.
make a splash with new luxury the bulk of industry profits. there was little thought that future of a 125-year industry. Automotive bean counters GM’s trial in lower Manhattan
sedans, hatchbacks and econ- GMC plans a significantly up- fuel prices would be as low as As a result, the recent Con- are optimistic following 2015 stems from a May 2014 crash in
omy cars. But those vehicles dated version of the Acadia for they are today,” Mr. Nerad sumer Electronics Show was as transaction prices shot Oklahoma. Robert Scheuer, 49
require increasingly higher the first time since it was in- said. “If manufacturers had an- littered with announcements through the roof last year, ex- years old, alleges he suffered
discounts and rebates, and introduced nearly a decade ago. ticipated that, we might be by auto makers. ceeding $34,000, according to neck and back injuries because a
ventory is piling up. Honda Motor Co. wades back seeing more trucks and big ve- They want to bridge the gap TrueCar Inc. Sales of pricier defective ignition switch on his
Auto makers reported record into the pickup market with a hicles being launched in De- between the perception they trucks and SUVs enrich the in- 2003 Saturn Ion prevented the
2015 sales this past Tuesday. revised version of its midsize troit this week.” aren’t prepared for disruption dustry’s mix; so does the appe- air bag from deploying when his
The next day, the country’s top Ridgeline, previous versions of A bigger reason for the ap- and the reality that they are tite among buyers to load ve- car crashed into a tree, accord-
car salesman, AutoNation Inc. which fell flat. parent mismatch between pouring billions of dollars into hicles with features. ing to court records.
Chief Executive Mike Jackson, The lack of focus on the what auto makers want to talk efforts to avoid getting passed Mr. Scheuer’s Ion car, now
threw cold water on optimism cash cows is partially due to about and what consumers by. MORE ON WSJ.COM destroyed, is among roughly
by saying the biggest U.S. deal- the fact that product cycles want to buy: Google Inc., Tesla GM signed a $500 million 2.6 million older vehicles GM
ership chain is cutting back on are hammered out several Motors Inc., Apple Inc. and partnership with Lyft Inc. and Track the latest recalled in early 2014 for a
orders of passenger-car inven-
tory because consumers don’t
want them. Mr. Jackson wants
years before cars and trucks
are actually introduced. When
Ford engineers were dreaming
Uber Technologies Inc.
Tech giants are invading the
car business with the promise
unveiled a Bolt electric car capa-
ble of traveling 200 miles, or
320 kilometers, on a charge.
WSJ
.COM
news as the auto
show in Detroit
begins, at
faulty switch that can slip out
of the run position, disabling
safety features including air
more trucks. up a new Lincoln Continental of more electric vehicles and Nissan/Renault SA will launch a WSJ.com/Business. bags. The lawsuit also alleges
the switch affected power-
steering and braking when it
FORD is in talks with Alphabet,

Inc.’s Google, to forge deeper
ties with Silicon Valley, where
Ford recently expanded its re-
assembler of other people’s
technologies and that’s not
where we want to be.”
In an interview, Mr. Fields
slipped from the run position.
A GM spokesman said the
company will show jurors the
ignition switch in the Scheuer
Continued from page B1 search lab. said he sees the new mobility case didn’t rotate and that the
executives across the globe. As part of this effort, Ford services as a natural extension vehicle’s air bags weren’t de-
Even as U.S. light-vehicle sales is considering creating a sepa- of Ford’s core auto business, to signed to deploy in the Okla-
sizzle at a record clip and low rate business unit dedicated to which the company will remain homa crash. The spokesman
fuel prices reignite America’s developing autonomous cars committed. But with newcom- added that GM already had re-
passion for profitable trucks and for use in ride-sharing and ers, including Tesla, Google and solved “a large majority of the
SUVs, the industry is pursuing fleets, say people familiar with Apple Inc. entering the auto ignition-switch personal injury
technologies built on the as- the plans. Ford would develop space, Mr. Fields also views the and wrongful death claims
sumption more people will stop software for components, in- industry as ripe for disruption, filed since the recall.”
REBECCA COOK/REUTERS
wanting to drive gasoline-pow- cluding steering or braking, and says Ford is in a good posi- The Scheuer trial is the first
ered vehicles within 30 years. while Google would provide tion to take advantage of new of several “bellwether” cases
At this week’s North Ameri- the autonomous-driving soft- technologies to reach people in this year aimed at setting a
can International Auto Show, ware that governs those func- growing urban centers who pattern for additional settle-
car companies will outline tions, one of these people said. might not own a car. ments among GM and plaintiffs.
plans for autonomous vehicles, Google declined to com- “It used to be years ago peo- A federal judge is oversee-
ride-sharing and electric cars ment. Mr. Fields, when asked Bill Ford has long stressed the need for mobility alternatives. ple were exiting the city and ing so-called multi-district liti-
at a time when 60% of vehicles about whether Ford would going to the suburbs,” Mr. gation that culled together
being sold are light trucks that form a new subsidiary or com- Fields said. “What we’ve seen widespread personal injury,
consume more gasoline.
A primary reason: investors
pany to make strategic invest-
ments in ride-sharing, said,
Ford’s Road Under Bill Ford Jr. over the last decade or so is
the opposite happening, partic-
wrongful death and economic-
loss lawsuits tied to the defec-
have shown little faith in De- “We are open to all possibili- ularly among young people.” tive switch.
troit’s ability to sustain today’s ties.” Ford will roll out alter- 1999—Jacques Nasser becomes CEO, Bill Ford Jr. named chairman Like Mr. Ford, who spent a
profits. Wall Street has driven native-mobility announce- lot of time in Northern Cali-
up valuations of a band of auto-
motive upstarts, including Tesla,
ments in Detroit this week.
These moves could alter the
1999—Ford acquires Sweden’s Volvo Cars for $6.5 billion fornia meeting with tech lead-
ers as an eBay Inc. board Tesla Restricts
while shares of Ford and Gen-
eral Motors Co. have stalled.
direction established when Mr.
Ford took over as CEO in 2001.
2001—Bill Ford Jr. succeeds Jacques Nasser as CEO; keeps
chairman title
member, Mr. Fields is making
monthly trips to Silicon Valley. Its Autopilot
On the surface, investors His company was reeling from a He’s also hired fresh blood. BY MIKE RAMSEY
should be enthusiastic. The tire recall and hemorrhaging 2006—Former Boeing executive Alan Mulally named Ford CEO, Former investment banker and
company is earning record money. Resources were thin af- succeeds Bill Ford Jr. automotive analyst John Casesa, Tesla Motors Inc. imple-
profits in North America, due ter his predecessor, Jacques Nas- and former aerospace executive mented restrictions on where
in part to the success of its new ser, invested in a number of ven- 2008—Ford sells Jaguar and Land Rover to India car maker Tata Ken Washington are heading it will allow its vehicles to use
aluminum-bodied F-150 pickup. tures and luxury brands, so the Motors; sells controlling stake in Mazda Motor Corp. strategy and advanced research autopilot after many owners
Analysts expect 2016 to be an family scion implemented a respectively, for instance. took videos of themselves
even better year for Ford. “back-to-the-basics” approach. 2010—Ford sells Volvo to China’s Zhejiang Geely Holding Group Co. As Mr. Fields expands, how- driving hands-free in danger-
Led by Chief Executive In the years that followed, ever, Ford has learned from its ous situations.
Mark Fields, Ford is now look- Ford dumped a Norwegian 2014—Mark Fields named CEO, replacing Alan Mulally; Ford experience under Mr. Nasser. Tesla, through a software
ing to expand into new trans- electric-vehicle company it introduces new aluminum-bodied F-150 truck Mr. Ford’s engagement, there- update delivered via the Inter-
portation services. Last owned, as well as abandoning Source: the company, staff reports fore, is an important sign that net to its vehicles on Saturday,
month, the executive an- some of Mr. Nasser’s e-com- Mr. Fields’s plan has support. also added a self-parking or
nounced a $4.5 billion electric- merce pursuits and other non- moted to CEO after running “One of the things that Mark “Everybody in management “summon” feature that allows
vehicle plan through 2020, core assets. Mr. Ford hired Ford’s North American opera- and I talked about prior to him understands why we’re doing the owner to park or fetch his
and he has authorized a series Alan Mulally in 2006 to accel- tion for nearly a decade. His becoming CEO was that he this,” Mr. Ford said, referring or her vehicle remotely from a
of experiments that have engi- erate the moves; Mr. Mulally job is to figure out how to di- bought into the notion that to the various new services distance of up to 39 feet.
neers exploring new services, shed a list of luxury brands, versify once again without change is upon us,” Mr. Ford the company is weighing ven- Chief Executive Elon Musk
including car-sharing and test- including Jaguar, Land Rover, straying from Mr. Mulally’s so- said. “If we do this correctly, turing into. “It’s not an add- said during a third-quarter
ing autonomous cars. Aston Martin and Volvo, and called One Ford plan that fo- we can have a very different- on, it’s not something we’re conference call that the com-
Mr. Fields, named CEO in Ford’s controlling stake in cuses on building cars, trucks looking company 10 years from doing on the side.” pany would likely update the
mid-2014, could have an ace Mazda Motor Corp. and SUVs that are safe, smart, now. If we don’t do it correctly, —Alistair Barr software in its autopilot system
up his sleeve. The auto maker Mr. Fields, 54, was pro- green and fun to drive. we will be at best a low-margin contributed to this article. after drivers posted dozens of
videos of themselves doing un-
safe things, such as getting into
INDIA decade. Low gasoline prices,

cheap financing and a healthy
economy has General Motors
Co. and Ford back near the top
asked if he would be inter-
ested in joining Mahindra two
years later, he agreed after
several months of discussions.
“take too long” if something
didn’t change. Executives
started looking for a satellite
location, visiting Turin, Seoul,
pany has to live up to the
competition, or they will not
last.”
Mahindra’s Troy facility is
the rear seat while the car was
operating or reading a book.
Under the new update,
Tesla’s vehicles won’t be able
Continued from page B1 of the global auto industry, Mr. Haas initially was hired Tokyo, London, Stuttgart and within a 20-mile radius of to go into autopilot on resi-
represents how much the auto and Detroit’s sprawling supply to upgrade Mahindra’s product Silicon Valley. “Those who more product-development re- dential streets or roads with-
industry has changed since the chain, including several spe- development chops in Chen- know Detroit, know it is all sources than Munich, the out a center divider. The auto-
financial crisis. Detroit, known cialty companies capable of nai. His superiors knew the things automotive,” Mr. Haas home of BMW AG, Stuttgart, pilot also won’t be able to
for high labor costs and a slow developing a car on their own, company excelled at “frugal said. “It is what they breathe.” where Daimler AG resides, and exceed the posted speed limit
response to market fluctua- is thriving and looking for new engineering,” a mind-set that Starting with “five guys” a Wolfsburg, Volkswagen AG’s by more than 5 miles per hour.
tions, needed tens of billions business. keeps in mind the extremely few years ago, Mr. Haas’ team base, combined, according to Tesla added the autopilot
in bailouts to stay afloat in Rick Haas was among those limited resources of India’s car has ballooned to about 100, Ann Arbor-based Center for feature in October. Tesla’s au-
2008. In the downsizing that who left Detroit during the buyers, most of whom are pur- with many of the new hires in- Automotive Research. topilot allows hands- and feet-
followed, some of the domes- dark days, with no guarantee chasing their first vehicle. spired by the idea of working “Detroit isn’t outsourcing free driving in everything
tic industry’s talent left for of returning. A longtime Ford That needed to change if Ma- for a challenger. anymore,” said Lynn Bishop, from stop-and-go traffic to
greener pastures while others executive and University of hindra was going to sell its Mr. Goenka said the U.S. vice president of Pratt & highway speeds, and enabled a
waited for rebound. Michigan graduate, Mr. Haas SUVs in the lucrative U.S. mar- technical venture is expensive Miller Engineering in New car to parallel park itself.
At this month’s Detroit mo- joined Tesla in 2009 as pro- ket. and can’t continue to grow ex- Haven, Mich., which does pro- Tesla said the autopilot sys-
tor show, auto executives will gram manager for the com- Mr. Haas came to the con- ponentially, but it is necessary totyping work for Mahindra tem has been modified to im-
celebrate the healthiest indus- pany’s first electric sedan, the clusion that globalizing the to winning in India and else- and other companies. “We’re prove steering in common
try conditions in well over a Model S. When recruiters company from India would where. “Any homegrown com- being outsourced to.” highway driving.
THE WALL STREET JOURNAL. Monday, January 11, 2016 | B5
Achieving it together
is the real success.
Here’s to our best year yet.

In 2015, we sold a record 1.58 million Hondas and Acuras in the U.S.,
with 95% manufactured in North America. This was also a record
production year. These are incredible achievements. But for us, the real
success comes from knowing that we did it together with all of you:
our customers, dealers, vendors and associates. This was made
possible through the power of our dreams. Thank you!
Honda and Acura products are made using domestic and globally sourced parts.
B6 | Monday, January 11, 2016 THE WALL STREET JOURNAL.
TECHNOLOGY @wsjd | wsjd.com
Qualcomm The Problem With Backdoors

SeeksRecords I
’m going to say this as
plainly as possible,
since the message
doesn’t seem to be getting
through: if we compromise
InKoreaProbe
the security of our comput-
ing devices in a misbegot-
ten attempt to stem crimi-
nal behavior or terrorism—
as some in law enforcement
BY DON CLARK pending investigation by the and government suggest we
U.S. Federal Trade Commis- do—then,
Qualcomm Inc. asked a sion and a probe in China we deserve
U.S. federal court to compel completed in 2015. what will
some of its biggest customers One recurring focus is Qual- follow.
and competitors—including comm’s practice of charging It is a
Apple Inc. and Samsung Elec- mobile-phone makers a royalty tempting
tronics Co.—to hand over any based on a percentage of the proposition
documents they provided to wholesale price of their de- KEYWORDS to think
South Korean antitrust au- vices, rather than licensing its that if only
thorities investigating the U.S. technology to other parties CHRISTOPHER companies
chip maker. such as chip makers, who sell MIMS such
The maneuver, which some lower-priced products. Basing as Apple
legal experts called unusual, its royalties on lower-priced Inc., Al-
risks setting off court battles products would reduce Qual- phabet Inc.’s Google
with companies that include comm’s royalty payments. and Microsoft Corp. would
two major purchasers of Qual- Qualcomm’s settlement create so-called backdoors
ANDREW BURTON/GETTY IMAGES

comm chips. Samsung and with Chinese authorities didn’t to encrypted data on our
manufacturers producing Ap- challenge that scheme. But the devices and networks that
ple products each accounted company in November said only law-enforcement or the
for more than 10% of Qual- such “per device” royalties government knows about,
comm’s revenue in the fiscal were deemed illegal by the they could take action when
year ended in September. staff of the KFTC, which in needed.
Qualcomm last week filed 2009 fined Qualcomm in a But this data has all
applications in the U.S. Dis- case still under appeal. A kinds of information, from
trict Court in San Jose, Calif., KFTC examiner’s report rec- our instant messages to our FBI Director James Comey speaking in New York last month about terrorist threats facing the U.S.
for subpoenas that would let it ommended that the company banking transactions, and
seek documents or other evi- be fined again and required to history has shown that once of ISIS could use encrypted fluential academics who other tools—such as looking
dence from seven companies. alter some business practices. backdoors are created, they communication technolo- work on cryptography and at the “metadata” on mes-
The other parties named are Qualcomm said at the time can be and are discovered gies to “go dark,” putting security, lawful hacking is sages, including who sent
Intel Corp., Texas Instru- that per-device royalties were by bad actors. their words beyond the an acknowledgment of the what and from where. This
ments Inc., Broadcom Corp., the industry norm, and vowed We already live in a world reach of spy agencies—are fact that our personal and data is often just as valu-
Via Technologies Inc. and the to contest the charges. in which our defenses are illegitimate. The thought mobile computers are in able, or even more valuable,
U.S. arm of MediaTek Inc. “We followed a practice breached regularly. The Chi- that a major terrorist at- fact quite insecure. than actual message con-
Those five companies cur- provided for under U.S. law nese government plausibly tack could be stopped if “Lawful hacking says tents. This kind of data,
rently or previously sold chips that allows us to obtain docu- could compile a dossier on only a messaging app like there are vulnerabilities in says Harvard professor of
used in mobile phones that ments reflecting that input the Web-browsing habits of WhatsApp weren’t en- the system, and it is better Internet law Jonathan
compete with Qualcomm pro- and other relevant information every U.S. citizen. Our net- crypted is an arresting one. to exploit those than to Zittrain, is pretty much al-
cessors or wireless modem to be better able to respond works are often compro- But here’s the problem with build in other weaknesses,” ways available to law en-
chips. Samsung and Apple, be- and defend our position with mised. State actors are out- that logic: you can’t ban says Mr. Bellovin, an author forcement.
sides being Qualcomm cus- the agency,” a Qualcomm gunning besieged corporate math. Which is to say, en- of the paper. My own view on this de-
tomers, make processors used spokeswoman said of its re- IT departments, leading to cryption is a well under- The FBI already has both bate is the same as John
in their own smartphones. quest for subpoenas. “There is an estimated half a trillion stood technology. Sophisti- computer forensics labora- Michael “Mike” McConnell,
Representatives of Apple, nothing adversarial about our dollars in damages annually, cated attackers will always tories and a “National Do- who was director of the Na-
Intel, Samsung and Via had no filings.” according to the Center for move to whatever en- mestic Communications As- tional Security Agency from
comment, while their counter- Samuel Miller, a specialist Strategic and International crypted communications sistance Center” designed 1992 to 1996.
parts at TI, Broadcom and Me- in high-tech antitrust law and Studies. It is ironic in today’s channels are available to specifically to exploit the In a recent op-ed, he
diaTek couldn’t be reached adjunct professor at the Uni- technology-driven world, but them, and there will always vulnerabilities in computers wrote that “If law enforce-
In its latest court docu- versity of California’s Hastings no less true: there is no such be many such channels. and mobile devices to gain ment and intelligence or-
ments, Qualcomm said it is College of the Law, called thing as “good enough” en- Here’s another moving access to their contents. ganizations face a future
seeking information that could Qualcomm’s tactic rare and cryption once a backdoor example, again used by Mr. While local law enforcement without assured access to
help prepare for antitrust aggressive. He added that the has been added. It is truly Comey: what about in cases doesn’t have the sophistica- encrypted communications,
hearings in South Korea that federal judges have latitude to binary. where phones contain evi- tion to bypass security on they will develop technolo-
are likely to begin in the deny subpoenas on grounds Policy makers never ad- dence of a crime—or even devices or the Internet on gies and techniques to meet
spring. It said the seven com- such as a finding that a U.S. dress this straightforward clues that could lead to the its own, it could access or their legitimate mission
panies supplied documents party is trying to circumvent technical fact, says Colum- location of someone who build similar labs at the goals.”
and testimony to Korea Fair foreign disclosure limitations. bia University professor of has been kidnapped or vic- state level or even through That sure sounds like
Trade Commission officials He predicted the companies computer science Steven timized? Fortunately, there multistate consortia, says lawful hacking, interception
that are kept confidential un- Qualcomm named would use Bellovin. That is why com- is a solution to both of Mr. Bellovin. of metadata, and many other
der South Korean procedures. such arguments to avoid pro- panies such as Apple are these issues, and it doesn’t Even when law enforce- techniques we don’t even
Qualcomm, though it is No. viding the documents. “There encrypting data on devices involve compromising the ment cannot decode the know about.
1 in the mobile-chip market, is precedent for this,” he said with no backdoors avail- security of our devices—se- contents of individual mes- And none require com-
gets the majority of its profit of Qualcomm’s move, but able, not even to them- curity, let us not forget, sages, says David Chaum, promising our already sur-
from patent royalties. Its li- added: “I think they are going selves. This isn’t to say that prevents countless one of the pioneers of se- prisingly flimsy online secu-
censing practices have spurred to run into headwinds.” that concerns voiced by FBI other crimes. It is called cure and encrypted commu- rity by weakening the
antitrust investigations on —Daisuke Wakabayashi director James Comey— “lawful hacking.” As out- nications, that hardly pre- encryption on which we all
three continents, including a contributed to this article. who has said that members lined in a paper by four includes them from using depend.
Xiaomi Investors Give APPLE ers, and eventually relaxed re-

strictions on advertising.
In response to requests from
Valuation Closer Look Continued from page B1

among several publishers
publishers, Apple said it now
allows the integration of fea-
tures from measurement spe-
BY EVA DOU pared with a year earlier. about whether Apple’s service cialist comScore into the app.
Mr. Lei used “flash sales” to will live up to its billing as a Apple initially provided up-
BEIJING—A year ago, Xi- sell smartphones with iPhone- significant advancement in dig- dates about the app’s usage by
aomi Corp. founder Lei Jun rivaling hardware at a fraction ital news distribution. emailing spreadsheets that give
announced to his staff in an of the price. He swallowed Even with the undercount- a high-level overview of usage,
open letter that the Chinese thin margins, betting he could ing, many publishing execu- but publishers want a more ro-
smartphone maker was the later sell services to users. tives said they expected to at- bust self-service dashboard to
world’s most valuable technol- Investors swooned. tract more readers from the access that information.
ogy startup. “We will journey In December 2014, Xiaomi app. The publishers declined to Media outlets say they have
into the constellations, to raised a $1.1 billion round disclose the usage data Apple questions about advertising,
places where others haven’t that valued the company at has shared. too.
dreamed of,” he wrote. $46 billion, topping even “The traffic has been mod- If they sell their own ads,
Living up to those high ex- ride-sharing startup Uber est relative to the enormous Apple requires that publishers
pectations has been a chal- Technologies Inc. at the time, install base of iOS devices,” use its iAd advertising technol-
lenge. Xiaomi missed its 2015 although Uber has since re- said Julie Hansen, president of ogy to insert, or “serve,” them.
sales target of 80 million gained the lead. Business Insider, which is now Many publishers would prefer
smartphones, according to But Xiaomi’s smartphones, publishing all of the content it to use ad-serving tools pro-
people familiar with the com- which once sold out in min- produces to Apple News. vided by other companies such
pany, and investors are begin- utes in limited batches via on- Apple News is available in as Google Inc. Requiring pub-
ning to question its $46 billion line flash sales, are now easily the U.S., U.K. and Australia on lishers to devote resources to a
valuation, which was based on available—a shift that analysts devices running iOS9, the lat- tool they only would use for
yet unrealized plans to gener- say signals slowing demand. est version of Apple’s mobile Apple News could make them
ate substantial revenue from Also, a slowdown in China’s operating system. question whether it is worth it.
Internet services. smartphone market has laid Mr. Cue said 40 million peo- Mr. Cue said he was sur-
China’s economic slow- bare Xiaomi’s weaknesses. Xi- ple have used the Apple News prised by the extent to which
down, coupled with turbulence aomi has lost market share app to date. The company publishers call on Apple to
in the country’s stock market, against established competi- hasn’t released data on how handle ad sales. He said Apple
is prompting investors to take tors with more financial and many people use it more regu- has accelerated the develop-
KARL MONDON/TNS/ZUMA PRESS
a second look at China’s high technological firepower such larly and how much traffic ment of its iAd network and
startup valuations. Companies as Huawei Technologies Co., publishers are getting. expects to launch a self-ser-
such as Xiaomi, which raised which overtook Xiaomi as Bob Cohn, chief operating vice ad-buying platform in the
vast sums on China’s mobile- China’s top handset maker in officer at the Atlantic, said the next two months to help in-
Internet boom, now are facing the third quarter 2015, accord- magazine had a good experi- crease ad spending.
growing pressure to live up to ing to Canalys. Huawei, which ence working with Apple, but Despite the setbacks, pub-
expectations. “With China’s sold more than 100 million echoed the concerns about its lishers remain hopeful about
economy slowing, many start- mobile devices last year, is audience and publishers’ abil- the potential of the service and
ups will need to be more cau- beefing up its marketing over- ity to extract advertising reve- Apple’s Eddy Cue said 40 million people have used its News app. say Apple has been responsive
tious in their expansion strate- seas. Huawei’s engineering nues. to their feedback.
gies,” said Nicole Peng, an strength and brand image, “The main thing for us is the traffic we’re seeing so far Publishers have several op- “Provided the product con-
analyst for market-research built up over decades, make it how big of an audience Apple from Apple News, and have tions to distribute their continues to scale, we remain bull-
firm Canalys. difficult for Xiaomi to compete News can generate, and that’s been particularly happy with tent through services such as ish on its potential, and we’re
Xiaomi shot to the top of in China, analysts say. still an open question,” he said. the relationship,” said Julia Facebook’s Instant Articles happy to be part of the early
China’s smartphone market in “The competition in China’s Executives from Apple, in- Beizer, director of product at and Snapchat’s Discover. The wave, even if it means the tool-
2014 with the novel idea of smartphone market has inten- cluding Mr. Cue, met with the Washington Post. draw of these platforms is the set is in the early stages,” Ms.
selling hardware by gathering sified tremendously this year,” publishers late last year to A spokeswoman for The potential to reach a large num- Hansen said.
a large user base, a business said a Xiaomi spokeswoman, discuss the product and ad- Wall Street Journal, which was ber of people on mobile de- “They have been good part-
model usually favored by In- who declined to comment on dress concerns. Mr. Cue said among the publishers that met vices, and media companies ners when we’ve brought is-
ternet companies, not those the company’s valuation or say Apple will continue to spend a with Mr. Cue, declined to com- welcomed Apple’s entry into sues to the table,” Mr. Cohn
selling a physical product. whether it met its 2015 sales lot of time getting feedback ment. The New York Times the mix. said.
Sales that year tripled to 61 target. She said Xiaomi sales from publishers. didn’t return requests for Facebook had its own early —Daisuke Wakabayashi
million smartphones, com- were within expectations. “We have been happy with comment. hiccups working with publish- contributed to this article.
THE WALL STREET JOURNAL. * * * * * * Monday, January 11, 2016 | B7
MEDIA
‘Revenant,’ ‘Martian’
Take Honors at Globes
‘The Force’ Is With China
Disney’s ‘Star Wars’
BY JOHN JURGENSEN by bringing back three-time
host Ricky Gervais. Armed makes healthy debut
The 73rd annual Golden with a glass of beer, he lobbed in the challenging but
Globe Awards brought some verbal bombs, resulting in
focus to an unpredictable many bleeped words and visi- critical movie market
awards season Sunday night as ble cringes in the audience.
films including “The Reve- In the television categories, BY BEN FRITZ
nant” and “The Martian” were wins by Amazon and USA Net- AND LAURIE BURKITT
honored by the Hollywood For- work highlighted the rapid
eign Press Association. changes in that industry in re- The Force awakened in
“The Revenant,” a raw tale cent years. China this weekend, albeit not
of the American frontier, USA emerged from basic ca- with the Death Star-size start
racked up a trio of top awards, ble’s B-list, having rebranded it enjoyed in the West.
including best motion picture its programming with grittier Walt Disney Co.’s “Star
drama, beating out leading serial dramas. The network’s Wars: The Force Awakens”
contenders such as “Spotlight” stylish hacker thriller “Mr. Ro- grossed an estimated $53 mil-
and “Mad Max: Fury Road.” bot” won best TV series lion in the world’s second-larg-
The film also earned a best-ac- drama. And film veteran Chris- est movie market on Saturday
QILAI SHEN/BLOOMBERG NEWS

tor win for Leonardo DiCaprio. tian Slater won best support- and Sunday—the last market
And Alejandro González Iñár- ing actor award for his turn in where it hadn’t already opened.
ritu won best director for a that show as the ringleader of That is a very healthy start, in-
punishing production that re- a group of computer sabo- cluding the biggest Saturday
portedly pushed cast and crew teurs. movie gross to date in China.
to their limits. The category for best TV However, the China results
20th Century Fox’s strategy series, musical or comedy, has aren’t close to the record-
of putting “The Martian” into become a proving ground for smashing results the film has
competition as a comedy paid online shows. Amazon’s “Mo- enjoyed in the U.S., where it Concession-stand workers wore ‘Star Wars’ masks at a Shanghai movie theater on Friday.
off with a best-picture win in zart in the Jungle,” set in the had the biggest-ever opening
that category. Matt Damon, the world of classical music, weekend and is now the high- and Canada, “Star Wars” faced
whose character delivered beat out competitors from est-grossing film of all time. Estimated Box-Office Figures, Through Sunday its first serious challenger
one-liners in a virtual mono- Hulu and Netflix and took the Last April, the action sequel SALES, IN MILLIONS since opening on Dec. 17. “The
logue from outer space, won trophy a year after “Transpar- “Furious 7” grossed $55.8 mil- Revenant,” starring Leonardo
FILM DISTRIBUTOR WEEKEND* CUMULATIVE % CHANGE
best actor in a film comedy. ent” earned Amazon its first lion on its first day alone in DiCaprio in a story of survival
“Joy” star Jennifer Law- Golden Globes. China, a Sunday—or more than 1. ‘Star Wars: The Disney $41.6 $812 -54 and revenge set on the 19th
rence collected her third “Mozart in the Jungle” also “The Force Awakens” totaled Force Awakens’ century American frontier,
Golden Globe—and her third seized the baton in the race for over two days in the country. 2. ‘The Revenant’ 20th Century Fox $38 $39.6 8,385 opened to $38 million, accord-
for a film directed by David O. best actor in a TV comedy, as “Furious 7” went on to become ing to estimates.
Russell—for best actress in a Gael García Bernal beat out the most successful American 3. ‘Daddy’s Home’ Paramount $15 $116.3 -49 That put it close behind
film comedy or musical. fellow nominee (and last year’s movie ever in China, with a to- 4. ‘The Forest’ Focus Features $13.1 $13.1 “The Force Awakens,” which
Brie Larson won the best winner) “Transparent” star tal gross of $373 million. 5. ‘Sisters’ Universal $7.2 $73.9 -44 grossed $41.6 million on its
actress award for role as a Jeffrey Tambor. China was always poised to fourth weekend in theaters.
*Friday, Saturday and Sunday Source: Rentrak
mother held captive with her Broadcast networks weren’t be the most challenging major “The Revenant,” a produc-
young son in the drama entirely left out. Actress Taraji market for “The Force Awak- tion that went over budget,
“Room.” P. Henson won her first Golden ens.” The original three “Star global distribution, said given looked at what was going on cost New Regency Pictures
Sylvester Stallone, who re- Globe for her lead role in the Wars” movies never played in how new “Star Wars” is to many outside China and I longed to and RatPac Entertainment
prised his role as Rocky Balboa Fox hit “Empire.” China, outside of film festivals, Chinese, “we’re very encouraged see this film,” Mr. Liu said. about $135 million to produce,
in the movie “Creed,” earned a The afterglow continued for and three follow-ups generated by this start and what it repre- Some moviegoers attended meaning it needs to continue
standing ovation from the ce- “Mad Men,” which finished its only modest box office as they sents for the long-term future of because of the film’s record- performing well in the weeks
lebrity crowd and a trophy for seven-season run last spring, opened early in the develop- the franchise in China.” setting reputation. “It did so to come to be a financial suc-
best supporting actor, nearly as Jon Hamm won for best ment of the country’s now- On opening day in the coun- well in America, we couldn’t cess. Twentieth Century Fox
40 years after his Golden performance in a TV drama. booming movie market. try Saturday, some fans were not come see it,” said Guo Jia- released the movie. (21st Cen-
Globe nomination for “Rocky.” Other TV winners included But “Star Wars” needs big excited to see the movie. But bao, a 22-year-old from the tury Fox and The Wall Street
Closing his acceptance Lady Gaga for best actress in a box-office results from China crowds didn’t fill every seat. northern Chinese city of Ji Lin. Journal-owner News Corp
speech, Mr. Stallone said, “I limited series of movie (FX’s to challenge the world-wide Fan Liu Xin, a 43-year-old So far, “The Force Awakens” were part of the same com-
want to thank my imaginary “American Horror Story: Ho- record of $2.79 billion set by investment banker from Bei- has grossed a total of $1.73 bil- pany until mid-2013.)
friend, Rocky Balboa, for being tel”) and Maura Tierney for “Avatar,” released in 2009 by jing, brought his 11-year-old lion globally. A record-setting After previously playing in
the best friend I ever had.” best supporting actress in a 21st Century Fox’s Twentieth son with him, hoping he might $812 million comes from the four theaters in two weeks to
The HFPA built advance TV series (Showtime’s “The Century Fox. share his Jedi obsession. U.S. and Canada. build buzz, “The Revenant” has
buzz and courted controversy Affair”). Dave Hollis, Disney’s head of “From the time I was small, I This weekend in the U.S. grossed a total of $39.6 million.
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.
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BANK DEPOSITS | By Janet Bender Special Victims
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Today Tomorrow the 2014 univs.
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Solve this puzzle online and discuss it at WSJ.com/Puzzles.
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B8 | Monday, January 11, 2016 * * THE WALL STREET JOURNAL.
SPORTS
Heard on Derrick Henry, left, and Alabama
are favored against No.1 Clemson
the Field
JAMIE SQUIRE/GETTY IMAGES
Seahawks Advance on
Wild Playoff Weekend
The two-time reigning NFC
champions survived—barely—to set
up a marquee showdown against
the No. 1 seed Carolina Panthers
next weekend as the Seattle Sea-
hawks beat the Minnesota Vikings
10-9 on Sunday.
The Vikings had seemingly
clinched the game with less than
30 seconds to go, setting up a po-
tential game-winning 27-yard field
goal. But Minnesota kicker Blair
Walsh shanked the kick, sending
the Seahawks to Charlotte for the
divisional round of the playoffs. The
Panthers beat the Seahawks 27-23
in Seattle in October.
Seattle’s win was just one of the
GETTY IMAGES
crazier moments of a wacky wild-
card weekend. The Steelers de-
feated the Bengals in a wild 18-16
game on Saturday night that was
Dabo, Saban—Is Game Amazin’?

essentially sealed when two 15-yard
penalties—one for a hit by Bengals
linebacker Vontaze Burfict and one
for a personal foul on cornerback
Adam Jones—turned Pittsburgh’s
winning field-goal attempt into a
chip shot. Jones was involved in an Paradise Valley, Ariz. was a gangbusters smash—great charmer of the two coaches—he the games or what teams are play-
altercation with Steelers assistant Today’s column was NOT sub- teams, semifinals on a lazy Jan. 1, spoke merrily, among other topics, ing.
coach Joey Porter, who walked onto mitted to El Chapo for editorial record TV ratings. But this sea- on his appreciation of acronyms “That would be our goal,” he
the field during the episode. approval. son’s suffered a setback, as orga- (“When I was in school, that was said. “‘I want to watch college
When asked about potential in- Greetings from the end of col- nizers scheduled the semis for just the way I would learn…I love football—I don’t care who’s play-
vestigations, a league spokesman lege football’s road, here in the Ar- New Year’s Eve, hoping America words.”)—whereas Saban, as usual, ing.’ I think we’re headed there
said: “As is the case during the reg- izona desert, where a January chill would abandon its rituals of warm looked a bit impatient, like he’d with the championship game.”
ular season, any play or situation means a mere champagne and not being able to have preferred to be someplace He’s not wrong—they do have
that involves a violation or poten- sweater, and the find a taxi at 12:15 a.m. in favor of else, recruiting in a parlor or even No. 1 and No. 2 here, after all, and
tial violation” will be reviewed. Por- mountain vistas are as watching school football on the repairing a blocking sled. one of them is Alabama the colos-
ter could potentially be fined for sublime as Nick Sa- couch. Still, as a duo, both men were sus, with its titles and Saban’s
his actions. ban’s hair. On Satur- Ratings sank. Who knew New effortlessly smooth, seductive, per- mystic, Jedi-like philosophy known
The Steelers will face the Den- day I saw a mangy Year’s Eve was still a thing? suasive. Within 10 minutes I felt as “The Process.” (Food version of
ver Broncos in a game between coyote run freely on a Monday’s title final should per- like either one of them could have Saban’s Process: when making
two quarterbacks with plenty of JASON golf course. I also saw form better with America, because sold me a van without wheels. pancakes, do not worry about
question marks: Steelers’ quarter- GAY a Clemson/Alabama it’s a final, and because it’s on, you This playoff format is still a burning them. Focus on the details
back Ben Roethlisberger injured his cotton pullover for know, a Monday. There are no hol- sales effort, of course—even after and maintaining a standard and
shoulder Saturday, but is expected $159.99. Honestly, I idays, no traditions to upend, no last year’s spectacular ratings suc- the pancakes will turn out fine.) In
to try to play next weekend, while was more frightened by the price conflicts, no excuses. The only cess, it remains a work in prog- Clemson you have a likeable un-
Denver’s Peyton Manning only re- of the cotton pullover. thing people do on Monday is ress, finding its way, working out derdog—an unbeaten underdog, of
gained his starting job in Week 17 You can’t be a bumpkin about complain about Monday. the kinks, and all the other clichés. all things.
after an injury led to him briefly college football these days—this is What’s more, it’s come down to On Saturday, I spoke to Bill Han- Over the weekend, however, the
backing up Brock Osweiler. an unabashed business, from the college football’s top ranked cock, the executive director of the Associated Press reported that the
The Kansas City Chiefs remain merchandise to the bazillion dollar teams, No. 1 Clemson and No. 2 Al- College Football Playoff, who pa- secondary ticket market for Mon-
the NFL’s the hottest team, winning TV contract to the plush spread of abama. Clemson is undefeated at tiently and good-naturedly an- day’s championship was sinking,
their 11th straight game on Satur- spa-tacular resorts pampering the 14-0; Alabama sits at 13-1. Alabama swered questions about those as some Alabama and Clemson
day with a 30-0 dismantling of the boosters, the pooh-bahs and the is favored, however, because semis and the ratings and how fans were scared off by the extrav-
Houston Texans. They’ll play the media before Monday’s champion- they’re Alabama—the heavies, the committed they are to maintaining agant cost of flights—a hazard of a
New England Patriots next. ship game at 8:30 p.m. ET. At this Crimson Tide, coached by the per- New Year’s Eve as a date for semi- system in which fans can’t make
Patriots coach Bill Belichick said point, to blanch at all the money fectionist Saban, winners of three finals. “The good thing for us is travel commitments until the
Kansas City’s long unbeaten streak in college football is to blanch at of the last six national titles. that we don’t have to make a deci- semifinals are wrapped, and air-
poses a major problem: “it’s not like all the sugar in crème brûlée. Clemson is itself coached by a sion right now, “ Hancock said. lines are, well, airlines.
you can go to a game and say: ‘OK It’s in the recipe, man. Bon ap- Crimson Tide champ—Dabo Swin- “There’s no talk in our group When I checked StubHub late
well here’s how this team defeated pétit. ney, an Alabama native and walk- about making a change. But we do Sunday afternoon, it was possible
them.’” Belichick said. “That just This is the second year of col- on receiver on the 1992 title team. want to look at the numbers and to get yourself into the stadium
doesn’t exist.” lege football’s Big Important Play- Swinney and Saban spoke Sun- see what it all means. And it takes Monday for $199, a mere forty
In Sunday’s final game, the off, in which four teams are picked day morning to the media, sitting a while to make that decision.” bucks more than that cotton pull-
Green Bay Packers beat the Wash- for a micro-tournament and the at a dais centered by a slender, Ideally, said Hancock, these over sweatshirt. This is what the
ington Redskins 35-18, setting up a rest of the schools are forced to golden championship trophy that playoffs will become one of those end of college football’s road looks
meeting with the Arizona Cardinals. make do with the 7,000 remaining looks like C-3PO’s misplaced thigh. sports audience traditions, one like in 2016. They’re sorting this
—Kevin Clark bowl games. Last year’s playoff The honey-voiced Swinney is the that wouldn’t rely on the day of out.
How Much Is Your Favorite Urban

Meyer’s
Value Judgments
College Football Team Worth?
The 50 Most Valuable Teams in College Football (Figures in Millions)
Buckeyes
retained the RANK SCHOOL VALUE RANK SCHOOL VALUE
No. 1 spot in 1 Ohio State $946.6 26 Arizona St. $262.5
On Monday night, Ohio State will could be bought and sold like a pro- the rankings 2 Texas $885.0 27 Texas Tech $258.5
relinquish its reign as college foot- fessional franchise. 3 Michigan $811.3 28 Michigan St. $246.6
ball’s national champion to Alabama Overall, the value of Football Bowl 4 Notre Dame $723.6 29 California $239.4
or Clemson. Subdivision teams has dropped 1.8% 5 Alabama $694.9 30 Clemson $237.5
on average from last year despite 6 Oklahoma $674.3 31 Stanford $222.9
cash flows increasing 18% and reve-
7 Florida $670.9 32 Mississippi $216.2
nues growing 9.6% year over year.
The reasons for the drop were con- 8 Georgia $636,4 33 UCLA $211.3
cerns about concussions and foot- 9 LSU $612.3 34 Kentucky $208
But the Buckeyes have kept hold ball’s safety, declining youth football 10 Penn State $481.4 35 Oregon St. $203.3
of a more lucrative title: college foot- participation, lack of resolution over 11 Nebraska $444.1 36 Minnesota $194.9
ball’s most valuable program. pay-for-play concerns, and the sched- 12 Iowa $439.6 37 Colorado $192.4
Ohio State’s football team leads uling of the College Football Playoff,
13 Tennesse $402 38 Utah $189.1
the country with a value of $946.6 which saw ratings for the semifinals
million, according to an annual study fall by nearly 40% when played on South
14 $398.2 39 Miami (Fla.) $188.6
Carolina
by Ryan Brewer, an assistant profes- New Year’s Eve this year, as opposed
15 Washington $378.2 40 North Carolina $172.8
sor of finance at Indiana University- to New Year’s Day. Ohio State’s value
Purdue University Columbus. This is dipped from more than $1.1 billion 16 Texas A&M $359.1 41 Georgia Tech $170.7
Ohio State’s second consecutive last year while the Buckeyes are also 17 Wisconsin $352.7 42 Iowa State $170.6
year atop the rankings after it over- the lone team now worth more than 18 Oregon $338.6 43 Virginia $151
took Texas, which places second at $900 million, down from four such 19 Auburn $319.3 44 Arizona $151
$885 million and has the nation’s teams a year ago. 20 Arkansas $311.9 45 Northwestern $149.5
largest revenue at $128 million. Alabama had the second highest
21 Florida State $294.4 46 Indiana $143
Michigan places a distant third at revenue ($120 million) among FBS
$811.3 million. teams but ranks fifth on the list with Oklahoma
22 $293.7 47 Purdue $132.4
State
Brewer analyzed each major pro- a value of $694.9 million. Still, that’s
23 Virginia Tech $280.7 48 Syracuse $130.5
gram’s revenues and expenses and nearly three times Clemson’s $237.5
made cash-flow adjustments, risk as- valuation, which was the lowest of 24 USC $277.3 49 Wash. State $129.4
sessments and growth projections to the four teams in this year’s College 25 Kansas State $270.2 50 North Carolina $123.4
calculate what a college team would Football Playoff and places 30th na- Source: Ryan Brewer, Indiana University-Purdue University Columbus
be worth on the open market, if it tionally. —Andrew Beaton
GETTY IMAGES
MOVING THE MARKET C2 | MARKETS DIGEST C4 | CLOSED-END FUNDS C5
Oculus Rift’s
High-Cost Strategy
JOHN LOCHER/ASSOCIATED PRESS

Sharper Vision
HEARD ON
How Anbang funds big deals GLOBAL FINANCE | C3 THE STREET | C6
© 2016 Dow Jones & Company. All Rights Reserved. THE WALL STREET JOURNAL. Monday, January 11, 2016 | C1
Last Week: DJIA 16346.45 g 1078.58 6.19% S&P 1922.03 g 5.96% NASDAQ 4643.63 g 7.26% 10–YR. TREAS. À 1 8/32, yield 2.131% OIL $33.16 g $3.88 EURO $1.0926 YEN 117.26
Latest Fund Fashion: Cash Junked

The price of Sprint's bonds has
fallen sharply.
Stormy markets have cash than they have in years, a that investors spooked by vol- ernment. 110 cents on the dollar
sign of growing stress in fi- atile markets will pull out That money has come from
public pension plans nancial markets. more of their money. stock investors worried about
and mutual funds The ultradefensive stance Large public retirement sys- the end of a long bull run and
100
reflects investors’ skittishness tems and open-end U.S. mutual bond investors nervous about
scurrying for cover about global economic growth funds have yanked nearly $200 rising interest rates and poten-
and uncertain prospects for billion from the market since tially difficult trading condi-
BY TIMOTHY W. MARTIN further gains in assets. Pen- mid-2014, according to a Wall tions exacerbated by bank cap- 90
AND SARAH KROUSE sion funds have the added Street Journal analysis of the ital rules.
need to cut more checks as most recent data available This leaves pension funds
U.S. public pension plans Americans retire in greater from Wilshire Trust Universe with the highest cash levels as a 80
and mutual funds are shelter- numbers, while mutual funds Comparison Service, Morning- percentage of assets since 2004.
ing more of their holdings in want cash to cover the risk star Inc. and the federal gov- Please see CASH page C2
70
2014 ’15 ’16
Judge
CORBIS
Source: FactSet
THE WALL STREET JOURNAL.
Makes Sprint Deals With

Merger
Lawsuits Junk-Bond Trouble
BY RYAN KNUTSON
Disappear AND MIKE CHERNEY
The deep decline shows
how quickly enthusiasm has
WILLIAM BRETZGER/THE NEWS JOURNAL/REUTERS/CORBIS
cooled for debt rated double-

BY LIZ HOFFMAN To understand the severity B-plus or worse. Heavily in-
of the mood swing in junk debted companies such as
The week before Thanksgiv- bonds, take a look at Sprint Sprint could face stingier in-
ing, a lawsuit was filed in a Del- Corp. vestors and much higher costs
aware court accusing drug Two years ago, the wireless when it comes time to refi-
maker Dyax Corp. of short- carrier’s executives were cele- nance. About $120 billion of
changing investors by selling it- brating the sale of $6.5 billion junk-rated debt comes due in
self too cheaply. in junk-rated bonds—a record 2016, a figure that grows to
The next day, the lawyers offering that underscored in- $430 billion in 2020, according
who brought the case abruptly J. Travis Laster in vestors’ demand for riskier to a report from Standard &
dropped it. a Wilmington, Del., debt as the Federal Reserve Poor’s.
The suit was like hundreds courtroom in 2009. kept interest rates low. “Their back is against the
filed before. Only this one was Those bonds sold at wall,” said Dennis Saputo, a
assigned to Vice Chancellor J. par—100 cents on the dollar— senior credit analyst at
Travis Laster, a notoriously Less Suited but are now trading near 75. Moody’s Investors Service who
tough judge who has shown Shareholders are challenging fewer M&A deals after a crackdown in a key Delaware business court. Most of the losses occurred covers Sprint. He estimates
thinning patience for such suits, over the past two months. Please see SPRINT page C2
which are routinely filed after JULY 8 Aug. 20 Oct. 9
corporate mergers and usually
‘The [shareholder] class ‘It just can’t be that this ‘The sue-on-every-deal phenomenon...
settled for little more than law-
yer fees.
These cases used to be an ac-
gets nothing, zip, zero.’
—Vice Chancellor J. Travis Laster
[litigation] is socially useful.’ is a systemic problem.’
—Chancellor Andre Bouchard —Vice Chancellor Laster
Citigroup Is New Kid
cepted price of doing deals, and
most of them landed in the Del-
aware Court of Chancery, which
2015 takeovers of Delaware-incorporated companies*
Deals with no lawsuits
On Stock-Trading Block
hears disputes involving Amer- Deals that were challenged in court BY CHRISTINA REXRODE low interest rates. Meanwhile,
ica’s largest companies. Over Citigroup ranks by some esti-
the first nine months of 2015, After years of cost-cutting, mates a distant ninth place in
78% of Delaware companies that Citigroup Inc. is starting to in- global stock trading, behind ri-
sold themselves faced at least vest—in equities trading, an un- vals like Goldman Sachs Group
one lawsuit there, according to expected choice for a classic Inc. and Morgan Stanley.
a review of filings by The Wall bond shop. Turning the equities business
Street Journal involving deals The New York bank led by around is an important test for
valued at $100 million or more. Chief Executive Michael Corbat Mr. Corbat, a 55-year-old former
But since Oct. 1, just 34% of is pushing to become more com- Salomon Brothers trader who
mergers have been challenged, petitive in dealing stocks and re- spent his formative years deal-
after Judge Laster began ag- lated derivatives, as well as pro- ing bonds.
gressively shooting down settle- viding support services for “Each time they’ve tried to
ments. hedge funds and other clients to ramp it up, it’s ended in frustra-
“The heyday of ‘file a case, JAN. FEB. MARCH APRIL MAY JUNE JULY AUG. SEPT. OCT. NOV. DEC. trade those securities. tion,” said UBS Group AG ana-
make $500,000’ is clearly over,” Citigroup has a lot of ground lyst Brennan Hawken.
said Seth Rigrodsky, a plaintiffs’ to make up, and the stakes are Boosting a Wall Street equi-
lawyer based in Wilmington
who brought the Dyax case. He 81% 76% 77% 34% high. The bank’s traditional en-
gines of trading revenue, bonds
ties business requires a mix of
enhancements involving elec-
said his firm will “continue to *Deals valued at $100 million or more and currencies, are slumping tronic trading systems, analyst
Please see JUDGE page C6 Sources: Delaware Court of Chancery (filings); FactSet (number of deals) THE WALL STREET JOURNAL. due to high regulatory costs and Please see CITI page C3
Alcoa’s Slide Looks Too Steep The world of investing is complex.

BY STEVEN RUSSOLILLO Analysts and fund manag-
Not So Shiny ers have estimated that al-
Breaking up is hard to do. Alcoa’s share price though the legacy operations
Alcoa Inc. is learning that the account for about half of Al-
hard way. $18 coa’s revenue, two-thirds or
The aluminum maker, 16 more of its value is in its
which announced Sept. 28 it downstream business. The ultimate core holding for
would split in 14 Sept. 28: In turn, some estimates of
AHEAD OF two, saw its Alcoa's split the downstream business’s institutional investors for over 20 years.
12 announced
THE TAPE shares quickly value are well above the com-
jump more than 10 bined $11 billion market capi-
20% on the talization.
news. Investors applauded the 8 Today’s tumbling stock
planned separation of Alcoa’s price therefore shows the wis-
6
profitable, faster-growing dom of splitting the company
business units from its strug- 2015 ’16 in two. This will unlock the Visit SPDRs.com/spy
gling raw aluminum opera- Source: FactSet overshadowed and underap-
tions. preciated manufacturing op- Assets for SPY as of 09/30/2015 were $168B. The second largest ETF had assets of $ 64B as of 09/30/2015. Average daily
That rally proved fleeting. though. erations, perhaps leading to a trading volume over the past three months was over 147,924,961 shares as of 09/30/2015. Source: Bloomberg.
A disappointing earnings re- Alcoa has fallen victim as a revaluation. Until that hap- ETFs trade like stocks, fluctuate in market value and may trade at prices above or below the ETFs net asset value.
port two weeks later, contin- commodities play. Anything pens, negative news tied to Brokerage commissions and ETF expenses will reduce returns.
ued turmoil in China and fall- tied to tumbling energy and Alcoa’s legacy businesses may
There can be no assurance that a liquid market will be maintained for ETF Shares.
ing commodities prices have materials prices has been hit continue to weigh on the
now pushed Alcoa shares to- hard amid a broad market stock. The SPDR ® S&P 500 ® ETF Trust is an exchange traded fund designed to generally correspond to the price and yield
performance of the S&P 500 Index.TM
ward five-year lows, some 11% selloff spurred by Chinese Analysts polled by FactSet
below the level when the split growth concerns. But Alcoa’s estimate Alcoa will report SPDR ®, S&P and S&P 500 are registered trademarks of Standard & Poor’s Financial Services LLC (S&P) and have been
was announced. legacy smelting and refining fourth-quarter earnings of 2 licensed for use by State Street Corporation. State Street Corporation’s financial products are not sponsored, endorsed,
sold or promoted by S&P, S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their respective affiliates
With aluminum prices near businesses, which are being cents a share. This forecast
and third party licensors and none of such parties make any representation regarding the advisability of investing in
6½-year lows and China’s separated from downstream was 22 cents in June and 29 such product(s) nor do they have any liability in relation thereto, including for any errors, omissions, or interruptions of
woes slamming market senti- operations that supply com- cents a year ago. any index.
ment globally, Alcoa’s drop ponents to the auto and aero- Alcoa’s split can’t happen
ALPS Distributors, Inc. is distributor for SPDR S&P 500 ETF Trust, a unit investment trust. ALPS Distributors, Inc. is
shouldn’t come as a surprise. space industries, make up a fast enough. not affiliated with State Street Global Markets, LLC.
There is reason to believe the much smaller part of Alcoa’s
Before investing, consider the funds’ investment objectives, risks, charges and expenses. To obtain a
selloff might be overdone, value today. Email: tape@wsj.com
prospectus or summary prospectus, which contains this and other information, call 1.866.787.2257 or visit
www.spdrs.com. Read it carefully.
INDEX Currencies........................................................... C2 Global Finance................................................. C3 Markets Digest................................................C4 New to the Market............................... C5 IBG-16247 Not FDIC Insured • No Bank Guarantee • May Lose Value
Closed-End Funds................................. C5 Financial Flashback..................................... C4 Heard on the Street.................................... C6 Money Rates................................................... C6 Ticker................................................................C2
C2 | Monday, January 11, 2016 THE WALL STREET JOURNAL.
MOVING THE MARKET

THE TICKER | Market events coming this week CASH Large public pension funds’
average cash allocation jumped
to 5.4% through Sept. 30, com-
pared with 3.4% in mid-2014,
for 234,000 members.
Many mutual funds are fac-
ing rising requests for with-
drawals from retiring Ameri-
Continued from the prior page according to Wilshire. The av- cans. About 10,000 baby
For mutual funds, the percent- erage cash level in mutual boomers turn 65 every day.
age of assets held in cash was funds tracked by Morningstar, Some fund managers also
the highest for the end of any a fund-research firm, has risen attribute rising cash levels to
quarter since at least 2007. for seven consecutive quarters fears that market volatility—
The data run through Sept. to an estimated 8.75% at the and changes to the market it-
30, but many money managers end of September. self—will make it more diffi-
since then have said they re- One pension fund, the South cult to sell bonds to meet
main very conservative. Pen- Dakota Retirement System, in- redemption requests. Banks
sion consultants say some fund creased its cash holdings to have retrenched from the bond
managers are considering 20.8% of assets through June markets in the aftermath of
socking even more of their as- 30 of last year from 12.8% in the financial crisis, leaving
sets into cash as they wait for 2014 and 3.7% in 2013. The fewer buyers when mutual
the markets to calm down. plan sold stocks because its of- funds need to turn their hold-
“Some clients are asking us, ficials believed the market was ings into cash.
‘Would we be crazy to put 10% overvalued, though last week’s A year ago, Western Asset
or 15% of our assets into selloff wasn’t bad enough to Management Co. began man-
cash?’” said Michael A. Moran, warrant new buying, said Matt dating that its bond funds hold
a pension strategist at Gold- Clark, investing chief of the higher minimum levels of as-
man Sachs Asset Management. South Dakota fund. sets such as cash or short-
Public pensions and mutual “We’re happy to be more term bonds that are easy to
PATRICK SEMANSKY/ASSOCIATED PRESS
funds collectively manage $16 defensive,” said Mr. Clark, who sell in case it needs to meet
trillion, close to the value of reduced holdings in high-yield heavy redemptions.
U.S. gross domestic product, debt and global equities. Gene Tannuzzo, a senior
so even small shifts in their fixed-income portfolio man-
5.4%
holdings can ripple through ager at Columbia Threadnee-
the trading world. dle Investments, said in the
The movement of longer- past two years he has raised
term money to the sidelines Large public pensions funds’ the level of cash in the $2.4
has left the market increas- average cash allocation billion Columbia Strategic In-
ingly in the hands of investors through Sept. 30 come Fund because it has be-
Railroad operator CSX is expected to report quarterly profit of 46 cents a share Tuesday. such as hedge funds, high- come harder to quickly com-
speed traders and exchange- plete certain trades and he
Monday down 15% in billions of cubic feet index Jan., prelim. 92.1 traded funds that buy and sell Pension funds are wrestling wants to avoid being forced to
Refinan., 2 weeks down 117 All items, Nov. up more frequently, potentially with demographic challenges in sell assets to meet potential
Earnings expected* Business
ago 0.3% leaving it more vulnerable to addition to uncertain markets. investor withdrawals. The cash
Estimate/Year Ago($)
down 37% Import price index Dec., exp. down inventories sharp swings, according to Large retirement systems now levels are now a percentage
Alcoa 0.02/0.33 Nov., prev. down Oct., prev. 0.0%
0.2% some money managers. have fewer active workers than point or two above the fund’s
EIA status report 0.4% Core, Nov. up 0.3% Nov., exp. down The shifts have led to retired or inactive members as 3% to 4% average, he said.
Previous change in stocks Dec., exp. down Dec., exp. up 0.1% 0.1% “bouts of rapid buying and Americans age, according to a Still, not all asset managers
Tuesday in millions of barrels 1.6%
Crude oil down 5.1 selling,” said Matthew Peron, Milliman Inc. report from No- are stashing away cash.
Short-selling Empire Earnings expected* managing director for global vember. That means pension of- One of the nation’s largest
reports Gasoline up 10.6 Earnings expected* Manufacturing Estimate/Year Ago($)
equities at Northern Trust, ficials need more money on retirement systems, the
Ratio, days of trading Distillates up 6.3 Estimate/Year Ago($) Citigroup 1.08/0.06
Dec., prev. down 4.6 which oversees more than hand to pay out benefits. Teacher Retirement System of
volume of current Intel 0.63/0.74 Jan., exp. down 4.0 Fastenal 0.40/0.40
position, at Dec 15 Treasury budget
$370 billion. The Pennsylvania State Texas, has just 0.2% of its as-
J.P. Morgan PNC Fin. 1.80/1.84
NYSE 4.3 Rising cash levels are a strong Employees’ Retirement Sys- sets in cash, lower than its tar-
Dec., ‘14 1.29/1.19 Industrial Regions Fin.
Nasdaq 4.5 $2.0 bil surplus
sign of concern about whether tem increased its cash hold- get of 1%, according to public
production 0.20/0.21 financial markets can continue ings to 4.7% of assets through documents. Chief Investment
Earnings expected*
Dec., ‘15, exp. Friday Nov., prev. down U.S. Banc. their advance amid tremors out June 30 as part of an effort to Officer Britt Harris said in an
n.a. 0.6% 0.79/0.79
Estimate/Year Ago($) Retail sales of China and rate increases by keep up with bigger payouts to email that after a decline in
Dec., exp. down Wells Fargo the Federal Reserve. The cash retirees, spokeswoman Pamela high-yield bonds last month,
CSX 0.46/0.49 Nov., prev. up 0.2%
IHS 1.56/1.68
Thursday Dec., exp. 0.0%
0.3% 1.03/1.02 holdings are a potentially bear- Hile said. That was up from the buying opportunities were
Initial jobless ish indicator, but the full impact 3.1% in 2014 and 1.9% in 2013. “the best we’ve seen over the
Capacity utilization
claims Retail sales, ex. Monday, Jan. on the market isn’t clear yet. The system manages money past several years.”
Nov., prev. 77.0%
Wednesday Previous 277,000 autos
Dec., exp. 76.8% 18 Some investors say the cash
Expected 275,000 Nov., prev. up 0.4% piles could be a source of sup-
Mort. bankers
indexes
Dec., exp. up 0.2% U.Mich. consumer
Martin Luther King port if prices fall further, Currencies
EIA report: natural Jr. Day prompting money managers to
Purchase, 2 weeks index U.S.-dollar foreign-exchange rates in late New York trading
gas Producer-price U.S. financial markets are
step in to take advantage.
ago Dec., final 92.6 closed US$vs, US$vs,
Previous change in stocks Managers of some pension Fri YTDchg Fri YTDchg
* FACTSET ESTIMATES EARNINGS-PER-SHARE ESTIMATES DON’T INCLUDE EXTRAORDINARY ITEMS (LOSSES IN PARENTHESES) ADJUSTED FOR plans and mutual funds said Country/currency in US$ per US$ (%) Country/currency in US$ per US$ (%)
STOCK SPLIT NOTE: FORECASTS ARE FROM DOW JONES WEEKLY SURVEY OF ECONOMISTS they limited their losses last Americas Vietnam dong .00004448 22482 1.5
year by moving more of their Argentina peso .0720 13.8858 7.3 Europe
holdings into cash. Returns on Brazil real .2484 4.0260 1.6 Czech Rep. koruna .04043 24.733 –0.6
cashlike securities were basi- Canada dollar .7055 1.4174 2.4 Denmark krone .1464 6.8288 –0.6
cally zero in 2015, while the Chile peso .001375 727.30 2.6 Euro area euro 1.0926 .9153 –0.6
Colombia peso .0003058 3269.60 3.0 Hungary forint .003451 289.77 –0.2
Dow Jones Industrial Average 1 unch
Ecuador US dollar 1 Iceland krona .007727 129.41 –0.6
fell 2.2% and the S&P 500 de- Mexico peso .0558 17.9337 4.3 Norway krone .1129 8.8613 0.2
clined 0.7%. Peru new sol .2919 3.426 0.3 Poland zloty .2502 3.9966 1.9
New York City’s $162 billion Uruguay peso .03283 30.4600 1.8 Russia ruble .01337 74.805 4.0
retirement system has more Venezuela b. fuerte .158595 6.3054 unch Sweden krona .1177 8.4994 0.6
Get instant access to markets data and business news when you’re on EXCLUSIVELY
than tripled its cash holdings Asia-Pacific Switzerland franc 1.0051 .9949 –0.7
the go. With real-time tickers, graphs and news alerts, it’s your instant FOR Turkey lira .3311 3.0206 3.5
on a percentage basis since Australian dollar .6955 1.4378 4.8
markets briefing delivered straight to your iPhone. If it’s worth knowing, SUBSCRIBERS China yuan .1517 6.5934 1.5
Ukraine hryvnia .0430 23.2420 –3.1
mid-2014 to cut the plan’s in- UK pound 1.4518 .6888 1.5
it’s in the What’s News App. terest-rate exposure. As a re- Hong Kong dollar .1288 7.7628 0.2
India rupee .01495 66.881 1.0 Middle East/Africa
sult, New York City’s alloca- Indonesia rupiah .0000718 13931 0.7 Bahrain dinar 2.6558 .3765 –0.1
tions to stocks and fixed- Japan yen .008528 117.26 –2.5 Egypt pound .1277 7.8325 unch
income securities have fallen. Kazakhstan tenge .002910 343.60 1.4 Israel shekel .2547 3.9257 0.9
“These aren’t normal times Macau pataca .1251 7.9963 –0.1 Kuwait dinar 3.2888 .3041 0.2
in the bond market, and our Malaysia ringgit .2262 4.4200 2.7 Oman sul rial 2.5980 .3849 unch
New Zealand dollar .6543 1.5284 4.4 Qatar rial .2746 3.642 unch
cash holdings reflect that,” said Pakistan rupee .00954 104.810 –0.1 Saudi Arabia riyal .2664 3.7536 unch
Scott Evans, investing chief of Philippines peso .0211 47.285 0.9 South Africa rand .0613 16.3161 5.4
the New York City Pension Singapore dollar .6931 1.4427 1.7
Funds, the nation’s fourth-larg- South Korea won .0008267 1209.70 2.9 Close Net Chg % Chg YTD%Chg
est plan by assets. The New Sri Lanka rupee .0069793 143.28 –0.7 WSJ Dollar Index 90.64 0.19 0.21 0.52
York plan has more than $5 bil- Taiwan dollar .02990 33.446 1.6 Sources: Tullett Prebon, WSJ Market Data Group
Thailand baht .02751 36.350 0.9
lion allocated to cash.
SPRINT market share and continued

red ink have led investors to
dump the company’s bonds.
Not long ago, however, in-
Continued from the prior page vestors were clamoring for
the carrier, which hasn’t Sprint debt. When the com-
logged a profit since 2006, will pany went to the junk-bond
run out of funding in 18 to 24 market one morning in Sep-
BLOOMBERG NEWS
months unless it turns things tember 2013, it was only look-

around. ing to raise about $2 billion.
Tarek Robbiati, who was ap- By midmorning, Sprint real-
pointed Sprint’s chief financial ized it was going to be able to
officer last summer, acknowl- sell a lot more. By day’s end,
edged at an investor conference Sprint CFO Tarek Robbiati bankers were slapping high-
in early December that the junk- fives after sealing the $6.5 bil-
bond market is becoming pro- steam and accelerated at the lion deal, a person familiar
hibitively expensive. end of 2015, when the deepen- with the matter said.
“Would you really want to ing decline in oil prices raised At the time, the sale was
tap into the high-yield market concerns about a spike in de- the largest junk-bond offering
at 10%, 12%?” he said. “No. It faults among energy compa- on record from a single entity,
doesn’t make any sense.” nies. The selling spilled over according to data from Dea-
The 10-year bonds Sprint into other sectors. logic.
sold in September 2013 The market passed a key Mr. Robbiati is working up
yielded 7.875% test Thursday, as Microsemi new ways to keep the company
Mr. Robbiati said Sprint has Corp. sold $450 million worth funded. The new phone-leasing
other options for funding. In No- of debt in the first junk-bond entity will likely buy Sprint
vember, for example, Sprint set offering of 2016. But the bonds, devices roughly once a quarter.
up an independent entity with which mature in 2023 and will Sprint is also looking to cut
the backing of its parent, Japa- help fund an acquisition, were $2.5 billion in operating costs
nese conglomerate SoftBank priced to yield 9.125%—show- by the end of 2016.
REAL-TIME IN NO TIME.
Group Corp., to buy and lease ing how it has become more But those efforts still ha-
back devices like the iPhone that costly for low-rated companies ven’t won over investors. Dar-
Sprint has rented to its custom- to fund themselves. ren Hughes, who helps oversee
ers, raising $1.2 billion. Sprint has been one of the the $1.2 billion Invesco High
Through 2015, junk-rated big losers as the mood has Yield Fund, said Sprint has
companies enjoyed a seven-year shifted. The country’s fourth- taken on too much leverage
boom in which they raised largest wireless company is and that competitors like T-
roughly $1.9 trillion in new carrying $30.9 billion in net Mobile have done a better job
bond sales in the U.S., according debt, $2.3 billion of which of attracting new subscribers.
Download the What’s News App today. to Securities Industry and Fi- comes due this year, according His fund has been trimming
nancial Markets Association to the company’s securities fil- back its exposure, and he said
data. Investors poured into the ings. It burned through more bond buyers will likely be re-
market, hoping to pick up more than $3 billion of cash in the luctant to lend the company
yield as the Federal Reserve first nine months of 2015 and more money.
kept interest rates near zero. was hit with a two-notch “The world’s just had
© 2016 Dow Jones & Co., Inc. All rights reserved. 3DJ2115 The change of heart began a downgrade to B3 by Moody’s enough of Sprint paper,” he
year ago after the rally in oil in September. said. “You can’t really put any
and commodities ran out of The downgrade, losses in more stuffing in the turkey.”
THE WALL STREET JOURNAL. * * * * * Monday, January 11, 2016 | C3
GLOBAL FINANCE
Swaps Suit Payout Is Windfall for Funds
Some hedge funds stand to be among the biggest class action. said, adding that the method- known by funds for weeks. admit or deny fault. The pro-
beneficiaries from the suit’s Some funds are only now ology hasn’t been final- Funds that hope to collect cess that moves forward Mon-
and others are in line recent settlement of nearly starting to realize what might ized and is complex. must file claims, which will day will allocate payouts from
to get sums in tens of $1.9 billion, according to pre- be coming to them. It hasn’t Individual payouts from the have to be audited and quali- that suit.
liminary estimates from peo- been clear who was eligible to suit—the aggregate amount is fied by a claims administrator. There are up to 14,000 po-
millions of dollars ple familiar with the case. be a claimant in the class or one of the largest in a private The final settlement of the tential class members who
Each could receive as much when distributions would be antitrust case of its kind—will case must be approved by a could become eligible claim-
BY KATY BURNE as $150 million or more, those made. be a welcome boost for funds court. ants if they traded with the
people said, cautioning that Hedge funds, asset manag- still reeling from rocky mar- A dozen of Wall Street’s defendant banks in the time
Here’s another way some the figures could deviate in ei- ers, pension funds and other kets in 2015. Many fund firms biggest banks agreed last year period of the class, from Janu-
Wall Street debt traders are ther direction. investors involved in the suit have been burned by invest- to settle accusations that they ary 2008 to September 2015,
making money: suing. Whether various funds will are expected to get an early ments in distressed corporate conspired to prevent competi- and meet other criteria. Some
Several hedge funds and receive money, and how much, glimpse of where they bonds and wagers on energy. tion in the credit-derivatives could opt out, for example, if
other big credit investors are is now becoming the talk of the stand on Monday, according Other firms in line for large markets, according to the potential legal and administra-
in line for payouts of tens of town among investors that have to people familiar with the sums include funds affili- complaint. tive fees dwarf their likely
millions of dollars or more, actively traded in credit-default case. ated with Anchorage Capital The suit alleged that the share.
thanks to a lawsuit challeng- swaps, essentially bets on They are to receive access Group LLC, BlackRock Inc., banks overcharged clients and, The plaintiff law firms,
ing how credit deriva- the likely repayment of a bond to a website showing the pro- Bridgewater Associates LP, together with two other insti- Quinn Emanuel Urquhart &
tives were traded in the years or loan. The money is expected posed methodology for divvy- Pacific Investment Manage- tutions, delayed credit deriva- Sullivan LLP and Pearson, Si-
after the financial crisis. to be paid in the second half of ing up the settlement. That ment Co., and Saba Capital tives from being openly traded mon & Warshaw LLP, plan to
BlueCrest Capital Manage- this year, according to the peo- information will help funds to Management LP, the people on exchanges, where prices file with the court for fees of
ment LLP and BlueMountain ple familiar with the case, get a closer idea of their said. would be more transparent. In up to 14% of the total pot,
Capital Management LLC which is being pursued as a payouts, some of the people The exact payouts won’t be settling, the defendants didn’t some people said.
High-Cost Products Fund Anbang Asian Markets Off

SHANGHAI—Once a sleepy
provincial car insurer, China’s
Anbang Insurance Group has
the company’s balance sheet.
As of the end of September,
Anbang Life Insurance Co., the
Co. in the property developer’s
takeover battle against a
group of rivals. In a statement,
than bank deposits. In the first
three-quarters of 2015, Anbang
Life raised 51.1 billion yuan
To a Rocky Start
leapt onto the global stage company’s life-insurance arm, Vanke said Anbang is “a from selling wealth-manage-
with several high-profile deals, had 826 billion yuan ($127.5 world-renowned Chinese comment products, compared with BY CHAO DENG ecutive of Shanghai-based VS-
including its purchase of the billion) in assets, nearly seven pany, a respected professional 45.4 billion yuan in insurance AND KATE GEENTY tone Asset Management, which
Waldorf Astoria New York ho- times the 120 billion yuan it investor.” Anbang recently in- premiums over the same pe- manages around $2 billion. He
tel for roughly $2 billion. had at the beginning of last creased its stake in Vanke to riod, according to its latest fi- China shares slid early said investors are closely
To fund its expansion, An- year. 7% from 4.5%. nancial statement. By compar- Monday, and losses in other watching for hints in coming
bang has turned to sales of “Given many of its assets Anbang over the past 12 ison, state-owned China Life regional markets deepened, as days from officials on their
high-yielding investment prod- are long-term investments, months paid $1 billion for a Insurance Co., the country’s a rout that knocked trillions of outlook for shares and the
ucts, an unusual source for a such as the Waldorf and its majority stake in a South Ko- largest life insurer by premi- dollars off global stocks last yuan, noting that authorities
Chinese insurer. In recent equity positions in listed com- rean insurer as well as insur- ums, collected 10.4 billion week ricocheted back to Asia. have nudged the yuan stronger
months, funds from sales of fi- panies, there is a risk in ance companies in Belgium yuan from sales of wealth- Near the lunchtime break, starting Friday.
nancial products to investors theory that it might not be and the Netherlands, for un- management products in the the Shanghai Composite Index Earlier Monday, China’s
have outstripped fundraising cash sufficient all the time to disclosed amounts. It has ac- same period and 305 billion was down 2.4% to 3109.95. The central bank fixed the yuan at
from its namesake insurance meet obligations to policy- quired a 20% stake in China yuan in insurance premiums. smaller Shen- 6.5626 against the dollar, guid-
businesses, according to a re- holders,” Ms. Liu said. Minsheng Banking Corp. to The latest data from an- WORLD zhen Composite ing the currency stronger from
view of its documents. Anbang declined to com- become the largest share- other Anbang arm, Anbang STOCKS Index was down its 6.5636 fixing on Friday. It
That has helped fuel a surge ment on its strategy. holder in China’s biggest pri- Property & Casualty Insurance 3.5%. was the second day the bank
in Anbang’s profit, making it The China Insurance Regu- vately owned lender by assets. Co., show that it collected 8.2 Shares in guided the yuan stronger, after
an industry success story and latory Commission didn’t com- It also has agreed to buy Fidel- billion yuan from wealth-man- Hong Kong sank to their low- eight sessions of weaker guid-
encouraging similar moves by ment on Anbang but has ity & Guaranty Life in a $1.57 agement products in 2014, est level in roughly 2½ years. ance. The onshore yuan can
small insurers. But it has also warned that all insurers face billion deal, which will make it compared with 5 billion yuan The Hang Seng Index was off trade up or down 2% from the
sparked warnings from insur- the risk of a mismatch be- one of the largest insurers by in insurance premiums. 2.5% at 19952.63, on track to fix.
ance-industry watchers who tween their investments and market share in fixed indexed Anbang Life’s investment close below 20000 for the first The onshore yuan was last
say it is adding risk to An- promised payouts. annuity products in the U.S. offerings include a universal time since June 2013. A gauge at 6.5822 against the U.S. dol-
bang’s books. Anbang’s status as a major Much of Anbang’s funds life-insurance policy with a of Chinese firms listed in the lar, compared with 6.5938 late
“Anbang is too aggressive,” new player in China’s financial come from sales of what in promised interest rate of at city fell more than 3%. Friday. It reached a five-year
said Liu Yunying, an analyst at markets was underscored last China are called wealth-man- least 3.5% a year. Its website Australia’s benchmark S&P/ low of 6.5956 last Thursday.
Z-Ben Advisors, a Shanghai- month, when it sided with the agement products, invest- shows that it paid investors a ASX 200 was down 1.3%, and The offshore yuan, which
based consulting firm, citing management of China Vanke ments that pay higher returns 5% annualized interest rate in South Korea’s Kospi fell 0.7%. trades freely, was at 6.6721 to
November. By contrast, China’s Japan’s market was closed for the dollar, compared with
benchmark one-year bank de- a national holiday. 6.6820 late Friday. It reached a
posit rate is 1.5%. Worries about weakness in five-year low of 6.7511 on
China’s major insurers allo- the Chinese yuan and how au- Thursday.
cate the lion’s share of their thorities convey their market China’s central bank ap-
investments to stable, low- expectations continue to un- pears to have spent huge
yielding assets such as Chi- nerve investors. amounts of dollars to support
nese treasury bills and bank Poorly telegraphed moves the yuan amid decelerating
deposits, with an annualized last week exacerbated volatil- economic growth and the on-
investment return of 5% or so. ity in China and triggered sell- set of higher U.S. interest
Anbang doesn’t disclose de- ing that spread to the rest of rates.
tails of its investment portfo- the region, the U.S. and Eu- The country’s foreign-ex-
lio. In a speech at Harvard rope. change regulator said over the
University a year ago, Chair- Concerns about China’s weekend that its reserves are
man and Chief Executive Wu stalling economy, with the “relatively sufficient” without
Xiaohui said that when pursu- yuan weakening 1.5% against pledging to step up its efforts
ing deals, Anbang seeks to pay the U.S. dollar last week, has to prevent risks in the foreign-
below book value for compa- sparked selling in commodities exchange market, after re-
nies that generate a return on and currencies of China’s trad- serves dropped by $107.9 bil-
equity of more than 10%, ac- ing partners and sent investors lion in December, the biggest
cording to a transcript on the to assets perceived as safe. monthly drop ever.
SPENCER PLATT/GETTY IMAGES
company’s website. “There’s no reason for Chi- Several Asia Pacific curren-
As a result of its invest- nese stocks to move up for cies, including the Australian
ments, combined profit at An- now,” said Jiwu Chen, chief ex- dollar, fell early Monday.
bang’s insurance businesses
has soared to 24.8 billion yuan
in 2014 from 3.75 billion yuan
in 2013.
—Rose Yu, Dinny McMahon
Anbang Insurance has branched out with purchases including the Waldorf Astoria New York hotel. and Yang Jie
CITI ranking in bond trading, accord-

ing to data compiled by UBS.
A Canadian who spent one
teenage summer working in the
sign of its commitment. The
bank has increased focus on get-
ting business from hedge funds,
where Citigroup traditionally
Citigroup and analysts say
the bank is better positioned
than some peers to grow in eq-
uities because it already can
What a man does for others,
not what they do for him,
Continued from page C1 Arctic for a telephone company, hasn’t been as strong. meet a new 5% capital require-
research, relationships with big the London-based Mr. Bandeen In coming months, Citigroup ment for U.S. banks known as gives him immortality.
investors, risk management of has set a goal of getting the will also roll out a new elec- the supplemental leverage ratio.
hedge-fund lending and fast- New York bank into the top six tronic platform known as Opti- Citigroup’s most recent reading —Daniel Webster
paced buying and selling that in the equities business, while mus 2.0, designed to get clients is 6.9%.
unfolds on dozens of platforms. smoothing some of the recent to trade more frequently with “They have a far better shot
The next reading on Mr. Cor- volatility in the division’s re- the firm. now than before,” said Mac-
bat’s efforts will come Friday, sults. In the third quarter, Citi- Citigroup once thought about quarie Securities analyst David
when Citigroup reports earnings group ranked No. 7. exiting from the equities busi- Konrad. Citigroup is also more In Memory of Our Beloved Friend
for the fourth quarter and full “I’d like to be No. 1,” said Mr. ness because the unit was too focused than before the finan-
year of 2015. Bandeen. “But I don’t think small but decided to keep it and cial crisis, when it pushed into
In recent years, the CEO’s
pruning of various consumer-re-
we’re going there any time
soon.”
make it more profitable, James
Forese, Citigroup’s president
stocks as part of a strategy to
get bigger in everything.
John M. Angelo
lated businesses has left the While Citigroup declined to and a former head of equities, Bond trading remains a fo-
bank more dependent on Wall discuss how much it is spending said at a recent conference. Mr. cus. In the first nine months of
Street activities such as trading, to overhaul equities, Mr. Ban- Forese has told colleagues that 2015, Citigroup’s fixed-income
which accounted for about deen pointed to a string of new he sees similarities between division produced more than
20% of its revenue in the first hires from banks like Deutsche stock trading and the airline three times the revenue of its
An extraordinary leader and true inspiration
nine months of the year. Bank AG, UBS Group and mar- business, where smaller players equities traders. At eight other
Like other U.S. investment ket operator Chi-X Global as a can be more successful. global investment banks, the A man of great character and integrity
banks, Citigroup hopes to take gap between divisions was
ground from European rivals much smaller, with fixed-income Your memory shines bright in our hearts
under pressure from sharehold- divisions generating only about
ers to shrink their riskier busi- 29% more revenue than equities
nesses. overall.
The job falls to Derek Ban- Equities have been growing
deen, a former Morgan Stanley in importance, though. Over the
stock trader and Duke Univer- first three quarters of 2015,
sity fencing-team captain. Mr. stock-trading revenue on Wall
DREW ANGERER/BLOOMBERG NEWS
Bandeen, 52, has run the stock- Street rose 12% from 2014, while
trading division for more than fixed-income desks suffered a
seven years, a period in which 10% decline, UBS analysts said.
Citigroup has failed to pick up This week, banks will start
much market share against reporting results for the fourth
larger rivals. Over the first three quarter that could show fixed-
quarters of 2015, its ninth-place income revenue declining an ad-
ranking among global invest- ditional 1%, compared with a
ment banks in equities revenue gain of about 3% in equities,
compared with a second-place Turning equities around is a key test for Citi CEO Michael Corbat. UBS projects.
MONEY & INVESTING MARKETS DIGEST

Dow Jones Industrial Average S&P 500 Index
Former World Bank 16346.45 t 1078.58, or 6.19% last weekTrailing P/E ratio * 15.50
High, low, open and close for each of P/E estimate * 15.22
Last Year ago
16.65
15.05
1922.03 t 121.91, or 5.96% last week Trailing P/E ratio * 21.63
High, low, open and close for each of P/E estimate * 15.75
Last
19.16
16.75
Year ago
Official to Join TPG the past 52 weeks Dividend yield 2.72 2.45
All-time high 18312.39, 05/19/15
the past 52 weeks Dividend yield 2.26
All-time high:
1.90
2130.82, 05/21/15
BY RICK CAREW thinks it can provide manage- Current divisor 0.14602128057775 65-day moving average
ment expertise, and sees po- 18500 2150
65-day moving average
HONG KONG—Private-eq- tential for high returns. Big
uity giant TPG Capital is hir- multinational lenders like the 18000 2100
ing the former head of the World Bank, Asian Develop-
World Bank’s private-sector ment Bank or the new Beijing-
investment arm to spearhead backed Asian Infrastructure 17500 2050
a new investment push into Investment Bank are often
200-day moving average
developing economies. willing to provide loans for 17000 2000
Jin-Yong Cai, a Chinese deal such projects, but they tend to Week's high
maker and former Goldman shy away from taking owner- 200-day moving average
DOWN UP 16500 1950
Sachs Group Inc. partner who ship stakes or managing the
t
Monday's open Friday's close
most recently headed the In- projects directly.
ternational Finance Corp., will Mr. Cai said that he sees Friday's close Monday's open 16000 1900
t
be in charge of overseeing bil- big investment opportunities
lions of dollars in investments in helping build backbone sys- Week's low
15500 1850
for TPG across Asia and Af- tems like telecommunications
rica, hunting for projects rang- networks or electricity grids Bars measure the point change from Monday's open
ing from warehousing and in Asia and Africa, given the 15000 1800
transport to telecommunica- fast-growing populations in J F M A M J J A S O N D J J F M A M J J A S O N D J
tions and electricity. many countries and the cheap- Primary
The new investment push ness of their currencies, which NYSE weekly volume, in billions of shares market Composite
t
t
reflects the continuing trans- gives more local-currency
Financial Flashback
18
formation of TPG, which like clout for each investment dol- 12 The Wall Street Journal, January 11, 2007
its peers is looking to expand lar. 6 Eastman Kodak Co. agreed to sell its health-imaging
its assets and generate more- “We’re very much trying to 0 group to Onex Corp.’s Onex Healthcare Holdings Inc. for
consistent earnings than its capture the fast-growing mid- J F M A M J J A S O N D J as much as $2.55 billion.
traditional core business of dle class of these economies,” * P/E data based on as-reported earnings from Birinyi Associates Inc.
corporate buyouts typically Mr. Cai said. There hasn’t been
produces. The $70 billion pri- enough investment in “key in- Major U.S. Stock-Market Indexes Nasdaq Composite
vate-equity firm has already frastructure assets for these Latest Week 52-Week Range % chg t 363.78, or -7.26%
been turning itself into a more countries to improve their High Low Close Net chg % chg Low Close (l) High % chg YTD 3-yr. ann. last week
diversified asset manager by productivity.” Dow Jones
making direct loans, investing Nigeria, for instance, has Industrial Average 17405.48 16314.57 16346.45 -1078.58 -6.19 15666.44 l 18312.39 -7.8 -6.2 7.0
in venture-capital deals and invested much less in telecom- Transportation Avg 7491.41 6934.69 6946.36 -562.35 -7.49 6946.36 l 9178.48 -21.6 -7.5 8.1
4900
raising money for hedge funds. munications than China, Mr. Utility Average 582.72 569.12 578.82 1.00 0.17 541.97 l 652.11 -7.2 0.2 8.1
Mr. Cai, 56 years old, will Cai noted, which means mo- Total Stock Market 21026.20 19764.47 19794.61 -1306.33 -6.19 19528.72 l 22287.78 -6.9 -6.2 9.2
be boosting TPG’s efforts in bile data services can still be Barron's 400 508.81 478.06 478.67 -37.79 -7.32 478.67 l 586.75 -10.2 -7.3 8.4 4800
“development capital” invest- very expensive and the coun-
Nasdaq Stock Market
ing, which involves taking try can’t adopt the latest 4700
Nasdaq Composite 4926.73 4637.85 4643.63 -363.78 -7.26 4506.49 l 5218.86 -1.3 -7.3 14.5
stakes in projects where it smartphone technologies.
Nasdaq 100 4522.12 4264.81 4270.78 -322.49 -7.02 4016.32 l 4719.05 1.4 -7.0 16.2
4600
New to the Market Standard & Poor's 1 4 5 6 7 8
500 Index 2038.20 1918.46 1922.03 -121.91 -5.96 1867.61 l 2130.82 -6.0 -6.0 9.7 January
Public Offerings of Stock MidCap 400 1392.87 1307.30 1308.48 -90.10 -6.44 1308.48 l 1549.44 -9.2 -6.4 7.6 DJ US TSM
SmallCap 600 667.81 622.72 623.42 -48.32 -7.19 623.42 l 742.13 -8.4 -7.2 8.4 t 1306.32, or -6.19%
IPOs in the U.S. Market Other Indexes last week
Initial public offerings of stock expected this week; might include some Russell 2000 1134.08 1045.11 1046.20 -89.69 -7.90 1046.20 l 1295.8 -11.8 -7.9 6.1
offerings, U.S. and foreign, open to institutional investors only via the NYSE Composite 10039.96 9513.25 9528.77 -614.65 -6.06 9528.77 l 11239.66 -11.0 -6.1 3.5
Rule 144a market; deal amounts are for the U.S. market only Value Line 445.80 413.07 413.50 -32.30 -7.25 413.50 l 522.42 -16.3 -7.2 3.1 20720
Symbol/ Pricing NYSE Arca Biotech 3751.31 3430.70 3437.10 -376.86 -9.88 3303.47 l 4431.87 -2.9 -9.9 28.5
Expected primary Shares Range($)
pricing date Filed Issuer/business exchange (mil.) Low/High Bookrunner(s) NYSE Arca Pharma 538.49 512.31 513.38 -28.05 -5.18 509.74 l 605.94 -5.9 -5.2 10.5 20380
KBW Bank 72.35 66.28 66.40 -6.69 -9.15 66.40 l 80.41 -5.4 -9.1 7.6
1/14 11/4 Shimmick Construction Co SCCI 6.3 11.00/ FBR Cptl Mrkts
2015 Construction company Nq 13.00 PHLX§ Gold/Silver 48.98 45.54 47.10 1.80 3.98 43.21 l 82.07 -38.2 4.0 -33.6
20040
offering general PHLX§ Oil Service 159.95 141.19 142.20 -15.53 -9.84 142.20 l 224.32 -28.4 -9.8 -14.7
construction, construction
management, and design- PHLX§ Semiconductor 658.75 599.87 600.48 -63.00 -9.50 559.59 l 746.08 -12.4 -9.5 15.3
build services. CBOE Volatility 27.08 19.25 27.01 8.80 48.33 11.95 l 40.74 53.9 48.3 25.6 19700
1 4 5 6 7 8
Philadelphia Stock Exchange Sources: SIX Financial Information; WSJ Market Data Group January
Lockup Expirations
Below, companies whose officers and other insiders will become eligible
to sell shares in their newly public companies for the first time. Such International Stock Indexes Commodities and
sales can move the stock’s price. Latest Week 52-Week Range YTD Currencies
Region/Country Index Close % chg Low Close High % chg Last Week YTD
Lockup Offer Offer amt Through Lockup Close Net chg %Chg % chg
expiration Issue date Issuer Symbol price($) ($ mil.) Friday (%) provision World The Global Dow 2189.48 –6.29 2189.48 • 2639.52 –6.3
Jan. 11 July 15, ’15 Chiasma Inc CHMA 16.00 117.1 –3.4 180 days DJ Global Index 289.19 –6.10 288.56 • 341.62 –6.1 DJ Commodity 443.32 -10.48 -2.31 -2.31
July 15, ’15 Jupai Holdings Ltd JP 10.00 53.0 –11.9 180 days DJ Global ex U.S. 197.37 –6.11 197.37 • 246.68 –6.1 Reuters-Jefferies CRB 168.58 -7.69 -4.36 -4.36
July 15, ’15 Ollie's Bargain Outlet Holdings OLLI 16.00 164.2 13.5 180 days
Global Dow Euro 1890.43 –6.66 1846.63 • 2305.98 –6.7 Crude oil, $ per barrel 33.16 -3.88 -10.48 -10.48
July 15, ’15 ProNAi Therapeutics Inc DNAI 17.00 158.4 –28.9 180 days
DJ TSM Global 2973.46 –6.12 2969.78 • 3510.20 –6.1 Natural gas, $/MMBtu 2.472 0.135 5.78 5.78
Jan. 12 July 16, ’15 MCBC Holdings Inc MCFT 15.00 104.7 –16.5 180 days
Global ex U.S. 1994.33 –6.05 1994.33 • 2482.77 –6.0 Gold, $ per troy oz. 1097.80 37.50 3.54 3.54
–52.2
Developed ex U.S. 1982.88 –5.90 1982.88 • 2403.18 –5.9
U.S. Dollar Index 98.38 -0.32 -0.32 -0.32
July 16, ’15 Ooma Inc OOMA 13.00 65.0 180 days Global Small-Cap 3955.94 –6.15 3955.94 • 4716.91 –6.1
WSJ Dollar Index 90.64 0.45 0.50 0.52
July 16, ’15 Rapid7 Inc RPD 16.00 118.7 –11.0 180 days Global Large-Cap 2830.72 –6.11 2821.87 • 3337.56 –6.1
Euro, per dollar 0.9153 -0.0055 -0.59 -0.59
Jan. 17 July 21, ’15 Blue Buffalo Pet Products BUFF 20.00 778.1 –16.0 180 days Americas DJ Americas 457.28 –6.15 454.62 • 524.44 –6.1
Yen, per dollar 117.26 -3.40 -2.81 -2.52
Sources: Dealogic; WSJ Market Data Group Brazil Sao Paulo Bovespa 40612.21 –6.32 40612.21 • 58051.61 –6.3
U.K. pound, in dollars 1.45 -0.03 -1.75 -1.48
Canada S&P/TSX Comp 12445.45 –4.34 12445.45 • 15450.87 –4.3
IPO Scorecard Mexico IPC All-Share 40265.37 –6.31 40265.37 • 45773.31 –6.3 52-Week Range
Performance of IPOs, most-recent listed first Chile Santiago IPSA 2843.48 –3.41 2826.03 • 3359.04 –3.4
Low Close(l) High % Chg
% Chg From % Chg From Europe Stoxx Europe 600 341.35 –6.69 337.93 • 414.06 –6.7 DJ Commodity 441.41 l 584.70 -20.03
Company SYMBOL
IPO date/Offer price
Friday3s Offer 1st-day
close ($) price close
Company SYMBOL
IPO date/Offer price
Friday3s Offer 1st-day
close ($) price close
Stoxx Europe 50 2887.84 –6.85 2887.84 • 3591.47 –6.9 Reuters-Jefferies CRB 168.54 l 231.77 -25.27
Yirendai 7.38 –26.2 –18.9 Mimecast 8.60 –14.0 –14.9

Eurozone Euro Stoxx 321.62 –6.82 312.20 • 392.35 –6.8 Crude oil, $ per barrel 33.16 l 61.43 -31.43
YRD Dec. 18/$10.00 MIME Nov. 19/$10.00 Euro Stoxx 50 3033.47 –7.16 3019.34 • 3828.78 –7.2 Natural gas, $/MMBtu 1.76 l 3.23 -16.09
Atlassian 27.17 29.4 –2.2 Square 11.31 25.7 –13.5
Belgium Bel-20 3493.98 –5.58 3248.19 • 3905.71 –5.6
Gold, $ per troy oz. 1050.80 l 1300.70 -9.72
TEAM Dec. 10/$21.00 SQ Nov. 19/$9.00 France CAC 40 4333.76 –6.54 4179.07 • 5268.91 –6.5
Axsome Thera 11.86 31.8 35.7 Instructure 21.32 33.3 18.4 Germany DAX 9849.34 –8.32 9427.64 • 12374.73 –8.3 U.S. Dollar Index 91.92 l 100.20 7.03
AXSM Nov. 19/$9.00 INST Nov. 13/$16.00 Israel Tel Aviv 1493.97 –2.27 1446.41 • 1723.56 –2.3
WSJ Dollar Index 83.37 l 90.87 8.22
Duluth Hldgs 13.99 16.6 2.5 Mesoblast 6.04 –24.5 –25.5 Italy FTSE MIB 19869.49 –7.23 18177 • 24031 –7.2
Euro, per dollar 0.84 l 0.95 8.39
DLTH Nov. 19/$12.00
13.3
MESO Nov. 13/$8.00
4.14 –17.2 –17.2
Netherlands AEX 410.82 –7.02 409.86 • 509.24 –7.0
Match Grp
MTCH Nov. 19/$12.00
13.59 –7.8 Xtera Comm
XCOM Nov. 13/$5.00
Spain IBEX 35 8909.20 –6.65 8909.2 • 11866.4 –6.7 Yen, per dollar 116.17 l 125.62 -1.05
Sweden SX All Share 471.97 –6.56 463.91 • 564.90 –6.6 U.K. pound, in dollars 1.45 l 1.59 -4.23
Sources: WSJ Market Data Group; FactSet Research Systems Switzerland Swiss Market 8257.28 –6.36 7899.59 • 9526.79 –6.4
Real-time U.S. stock
U.K. FTSE 100 5912.44 –5.28 5874.06 • 7103.98 –5.3
Other Stock Offerings
Secondaries and follow-ons expected this week in the U.S. market
Asia-Pacific
Australia
DJ Asia-Pacific TSM 1310.89
S&P/ASX 200 4990.80
–5.70
–5.76
1269.58
4909.6
•
•
1619.39 –5.7
5982.7 –5.8
WSJ
.COM
quotes are available on
WSJ.com. Track most-
active stocks, new
None expected this week China Shanghai Composite 3186.41 –9.97 2927.29 • 5166.35 –10.0
highs/lows, mutual
Hong Kong Hang Seng 20453.71 –6.67 20333.34 • 28442.75 –6.7
funds and ETFs.
Off the Shelf India S&P BSE Sensex 24934.33 –4.69 24851.83 • 29681.77 –4.5
“Shelf registrations” allow a company to prepare a stock or bond for

Japan Nikkei Stock Avg 17697.96 –7.02 16795.96 • 20868.03 –7.0 Plus, get deeper money-flows data and
sale, without selling the whole issue at once. Corporations sell as
Singapore Straits Times 2751.23 –4.56 2729.91 • 3539.95 –4.6 email delivery of key stock-market
conditions become favorable. Here are the shelf sales, or takedowns,
South Korea Kospi 1917.62 –2.23 1829.81 • 2173.41 –2.2 data.
over the last week:
Taiwan Weighted 7893.97 –5.33 7410.34 • 9973.12 –5.3 All are available free at
Takedown date/ Deal value Registration Source: SIX Financial Information;WSJ Market Data Group WSJMarkets.com
Issuer/Industry Registration date ($ mil.) (mil.) Bookrunner(s)
Prothena
Healthcare
Jan. 7
April 6,315
$119.3 ... RBC Cptl Mkts,
UBS, Barclays
Consumer Rates and Returns to Investor Benchmark Yields and Rates
Ardelyx Jan. 7 $75.0 $200.0 Citi, Leerink Prtnrs U.S. consumer rates Selected rates Treasury yield curve Forex Race
Healthcare July 13,315
A consumer rate against its New car loan Yield to maturity of current bills, Yen, euro vs. dollar; dollar vs.
Galena Biopharma Jan. 7 $21.8 $100.0 Raymond James benchmark over the past year notes and bonds major U.S. trading partners
Healthcare Dec. 4,315
Bankrate.com avg†: 3.16%
Lake Elmo Bank 1.99% 5.00% 15%
pSivida Jan. 7 $16.0 $75.0 Ladenburg Thalmann, Prime rate 3.50% Lake Elmo, MN 651-777-8365 10 WSJ Dollar index
Healthcare Nov. 19,315 Northland Securities t 4.00 s
PNC Bank 1.99% 5
Acadia Healthcare Jan. 6 $610.0 ... BofA ML, Jefferies 3.00
Atlantic City, NJ 856-464-1394 3.00 0
Healthcare June 9,314
s
t
2.50 Think Mutual Bank 1.99% –5
Acadia Pharmaceuticals Jan. 6 $300.0 ... BofA ML, JPM New car loan 2.00 Yen
Rochester, MN 800-288-3425
Healthcare March 3,314 –10 s
2.00 2.12% Friday 1.00
t
TrustCo Bank Euro

Sage Therapeutics Jan. 6 $150.0 ... JPM, GS One year ago –15
t
Albany, NY 518-436-9043
Healthcare Jan. 5,316 1.50 0.00 –20
F M A M J J A S O N DJ Chase Bank 2.16% 1 3 6 1 2 3 5 710 30
TherapeuticsMD Jan. 6 $143.8 $250.0 GS, Cowen & Co 2015
2015 Baton Rouge, LA 800-CHA-SE24 month(s) years
Healthcare Nov. 5,315
Yield/Rate (%) 52-Week Range (%) 3-yr chg maturity
Epizyme Jan. 6 $120.0 $250.0 Citi, Leerink Prtnrs,
Healthcare May 4,315 RBC Cptl Mkts Interest rate Last (l)Week ago Low 0 2 4 6 8 High (pct pts) Sources: Ryan ALM; Tullett Prebon; WSJ Market Data Group
Federal-funds rate target 0.25-0.5 0.25-0.5 0.00 l 0.50 0.25

Otonomy
Healthcare
Jan. 6
Sept. 3,315
$115.0 $300.0 BofA ML, Cowen & Co,
Piper Jaffray Prime rate* 3.50 3.50 3.25 l 3.50 0.25
Corporate Borrowing Rates and Yields
Libor, 3-month 0.62 0.61 0.25 l 0.62 0.32 Spread +/- Treasurys,
Cempra Jan. 6 $100.0 ... JPM, Jefferies Yield (%) in basis pts, 52-wk Range Total Return
Healthcare May 7,315 Money market, annual yield 0.28 0.27 0.25 l 0.43 -0.23 Bond total return index Last Wk ago Last Low High 52-wk 3-yr
Five-year CD, annual yield 1.40 1.39 1.37 l 1.53 0.04
Adamas Pharmaceuticals Jan. 6 $66.1 $178.4 Cowen & Co, 10-yr Treasury, Ryan ALM 2.131 2.273 0.54 2.06
Healthcare May 19,315 Piper Jaffray 30-year mortgage, fixed† 3.89 4.08 3.71 l 4.22 0.19
DJ Corporate 3.321 3.426 -0.62 2.22
15-year mortgage, fixed† 3.14 3.34 2.94 l 3.42 0.13
Akebia Therapeutics Jan. 6 $65.3 $175.0 MS, UBS Aggregate, Barclays Capital 2.490 2.590 58 42 61 0.52 1.75
Jumbo mortgages, $417,000-plus† 4.41 4.61 4.00 l 4.97 0.30
Healthcare April 2,315 High Yield 100, Merrill Lynch 7.713 7.601 609 374 636 -5.334 1.063
Five-year adj mortgage (ARM)† 3.42 3.80 3.14 l 4.00 0.34
Pioneer Natural Resources Jan. 5 $1,404.0 ... BofA ML, Citi, Fixed-Rate MBS, Barclays 2.670 2.780 27 13 44 1.70 2.25
New-car loan, 48-month 3.16 3.21 2.71 l 3.33 0.10
Oil & Gas May 30,314 Credit Suisse, JPM Muni Master, Merrill 1.625 1.762 4 -10 7 3.069 2.986
HELOC, $30,000 4.62 4.58 4.24 l 4.71 -0.02
Acceleron Pharma Jan. 5 $150.0 $300.0 MS, Leerink Prtnrs, Bankrate.com rates based on survey of over 4,800 online banks. *Base rate posted by 70% of the nation's largest EMBI Global, J.P. Morgan 6.780 6.709 468 359 483 1.491 -0.110
Healthcare Jan. 4,316 UBS banks.† Excludes closing costs.
Sources: SIX Financial Information; WSJ Market Data Group; Bankrate.com Sources: J.P. Morgan; Ryan ALM; S&P Dow Jones Indices; Barclays Capital; Merrill Lynch
THE WALL STREET JOURNAL. Monday, January 11, 2016 | C5
CLOSED-END FUNDS
wsj.com/funds
Listed are the 300 largest closed-end funds as 52 wk Prem12 Mo 52 wk 52 wk Prem12 Mo
measured by assets. Prem Ttl Fund (SYM) NAV Close /Disc Yld Fund (SYM) NAV Close /Disc Yld
Closed-end funds sell a limited number of shares and Prem Ttl Prem Ttl
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 MFS Inc Tr MIN 4.97 4.59 -7.6 10.0 Voya Senior Income:B 12.13 NA NA 5.1
funds, closed-ends generally do not buy their shares GoldmanSachsMLPIncOpp GMZ 7.81 NA -52.8 WstAstClymr InfLnkd Fd WIW 12.22 10.34 -15.4 3.5 Resource RE Div Inc:D 9.70 NA NA NS World Equity Funds Voya Senior Income:C 12.15 NA NA 5.1
back from investors who wish to cash in their holdings.
Instead, fund shares trade on a stock exchange.
Goldman Sachs MLPEnergy GER 5.16 4.93 -4.5 -62.2 WstAssetClymr InflLnk Sec WIA 12.52 10.62 -15.2 3.3 Resource RE Div Inc:I 10.07 NA NA -2.8 BMO LGM Front ME 7.90 NA NA -11.5 Voya Senior Income:I 12.14 NA NA 5.9
a-The NAV and market price are ex dividend. b-The John Hancock Finl Opps Fd BTO 24.42 25.04 +2.5 18.4 Loan Participation Funds Resource RE Div Inc:T 9.54 NA NA NS Voya Senior Income:W 12.18 NA NA 5.9
Prem12 Mo
NAV is fully diluted. c-NAV is as of Thursday’s close. d- KayneAndersonEngyTRFd KYE 8.28 7.66 -7.5 -67.6 Apollo Sr Fltg Rate Fd AFT 16.92 14.97 -11.5 7.7 Resource RE Div Inc:U 9.55 NA NA NS Fund (SYM) NAV Close /Disc Yld High Yield Bond Funds
NAV is as of Wednesday’s close. e-NAV assumes rights
offering is fully subscribed. f-Rights offering in process. Kayne Anderson MLP Invt KYN 15.32 15.00 -2.1 -52.1 BlackRock FR Incm Strat FRA 14.27 12.83 -10.1 6.1 Resource RE Div Inc:W 9.69 NA NA -3.1 WA Middle Mkt Inc WMF NA NA NA 13.1
Kayne Andrsn Midstr Engy KMF 10.92 10.71 -1.9 -61.5 Blkrk FltRt InTr BGT 13.78 12.29 -10.8 6.0 U.S. Mortgage Bond Funds
g-Rights offering announced. h-Lipper data has been SharesPost 100 25.33 NA NA 1.6 Other Domestic Taxable Bond Funds
adjusted for rights offering. j-Rights offering has Macquarie Glbl Infrstrctr MGU 21.24 17.80 -16.2 -22.0 BlackstoneGSO Strat Cred BGB NA 13.52 NA 9.4 Versus Cap MMgr RE Inc:F 26.86 NA NA 6.6 Vertical Capital Income 11.85 NA NA 3.5 Capstone Church Capital 16.96 NA NA 1.7
expired, but Lipper data not yet adjusted. l-NAV as of Loan Participation Funds
previous day. o-Tender offer in process. v-NAV is NeubergerBermanMLPIncm NML 7.20 7.47 +3.8 -54.8 Blackstone GSO Sr Float BSL 15.90 14.74 -7.3 7.2 Versus Cap MMgr RE Inc:I 26.92 NA NA 7.1 GL Beyond Income 4.94 NA NA NE
converted at the commercial Rand rate. w-Convertible Neubrgr Brm Rl Est Sec Fd NRO 5.52 4.88 -11.6 -3.0 Eaton Vance FR Incm Tr EFT 13.97 12.44 -11.0 7.1 Income Preferred Stock Funds 504 Fund 10.00 NA NA 3.0 Palmer Square Opp Income NA NA NA 5.4
Note-NAV (not market) conversion value. y-NAV and
Nuveen Dow 30 Dynamic DIAX 14.90 13.33 -10.5 NA EatonVnc SrFltRate EFR 13.57 12.26 -9.7 7.5 CLA Strategic Alloc XSAFX 2.54 NA NA NS Invesco Sr Loan A 6.04 NA NA 6.1 Resource Credit Inc:A 9.76 NA NA NS
market price are in Canadian dollars. NA signifies that
the information is not available or not applicable. NS NuvDivInco JDD 12.11 10.47 -13.5 -3.3 1st Tr Sr Fltg Rt Fd II FCT 13.51 12.11 -10.4 7.1 MultiStrat Gro & Inc:A 15.38 NA NA -2.8 Invesco Sr Loan B 6.04 NA NA 6.1 Resource Credit Inc:C 9.75 NA NA NS
signifies fund not in existence of entire period. Nuveen Engy MLP Fd JMF 10.91 10.06 -7.8 -43.5 Invesco Credit Opps Fund VTA 12.05 10.53 -12.6 8.5 MultiStrat Gro & Inc:C 15.26 NA NA -3.5 Invesco Sr Loan C 6.05 NA NA 5.3 Resource Credit Inc:D 9.76 NA NA NS
12 month yield is computed by dividing income Invesco Sr Loan IB 6.04 NA NA 6.4
dividends paid (during the previous twelve months for NuvNASDAQ100DynOver QQQX 18.69 NA NA NA Invesco Senior Income Tr VVR 4.48 4.03 -10.0 7.9 MultiStrat Gro & Inc:I 15.42 NA NA -2.5 Resource Credit Inc:I 9.77 NA NA NS
periods ending at month-end or during the previous Nuveen Real Estate Fd JRS 11.48 10.50 -8.5 -3.7 Nuveen Credit Strt Inc Fd JQC 8.91 7.75 -13.0 7.5 MultiStrat Gro & Inc:L 15.30 NA NA -3.3 Invesco Sr Loan IC 6.04 NA NA 6.2 Resource Credit Inc:T 9.75 NA NA NS
fifty-two weeks for periods ending at any time other
NuveenS&P500Buy-Write BXMX 12.76 12.67 -0.7 NA NuvFloatRteInco Fd JFR 10.83 10.04 -7.3 7.0 Convertible Sec's. Funds Invesco Sr Loan Y 6.04 NA NA 6.4 Resource Credit Inc:U 9.77 NA NA NS
than month-end) by the latest month-end market price
adjusted for capital gains distributions. Reaves Utility Fund UTG 25.72 NA -15.3 Nuv Float Rte Opp Fd JRO 10.79 9.70 -10.1 7.7 Calmos Dyn Conv and Inc CCD 19.56 17.59 -10.1 NS Voya Senior Income:A 12.17 NA NA 5.6 Resource Credit Inc:W 9.76 NA NA NS
Source: Lipper Tekla Hlthcr Investors HQH 28.06 27.34 -2.6 -6.1 Nuveen Senior Income Fund NSL 6.45 5.71 -11.5 7.2
Friday, January 8, 2016 Tekla Healthcare Opps Fd THQ 18.19 16.41 -9.8 -10.9 Pioneer Floating Rate Tr PHD 12.03 10.68 -11.2 6.5
52 wk Tekla Life Sciences HQL 21.80 21.44 -1.7 -7.7 Voya Prime Rate Trust PPR 5.48 4.93 -10.0 6.6
Prem Ttl Tekla World Hlthcr Fd THW 17.27 15.02 -13.0 NS High Yield Bond Funds ADVERTISEMENT
Fund (SYM) NAV Close /Disc Ret Tortoise Energy TYG 25.79 25.12 -2.6 -37.2 AllianceBernstein Glbl AWF 12.26 10.99 -10.4 10.2
General Equity Funds
Adams Divers Equity Fd ADX 14.13 12.06 -14.6 -5.3
Boulder Grwth & Inco BIF 7.35 NA -15.3
Tortoise MLP Fund NTG 16.87 15.42 -8.6 -37.3
Voya Gl Equity Div IGD 7.57 6.62 -12.5 -10.4
Income Preferred Stock Funds
Babson Gl Sh Dur Hi Yd BGH 18.33 16.37 -10.7 12.0
BlackRock Corp Hi Yd Fd HYT 10.84 9.82 -9.4 10.1
BlkRk Debt Strat Fd DSU 3.84 3.30 -14.1 8.0
BlackRockDurInco Tr BLW 16.14 14.35 -11.1 8.2
Legal Notices
To advertise: 800-366-3975 or WSJ.com/classifieds
Central Securities CET 22.24 17.89 -19.6 -8.6 Calamos Strat Fd CSQ 10.37 9.12 -12.1 -11.3
CohSteer Opprtnty Fd FOF 11.96 10.63 -11.1 -10.8 Cohen & Steers Dur Pfd LDP 25.29 22.67 -10.4 4.8 Credit Suisse High Yld DHY 2.40 2.23 -7.1 12.6
Cornerstone Strategic CLM 14.29 15.38 +7.6 -5.8 Cohen & Strs Sel Prf Inco PSF 26.83 25.21 -6.0 5.5 DoubleLine Incm Solutions DSL NA 16.52 NA 11.6
EtnVnc TaxAdvDiv EVT 20.23 18.29 -9.6 -3.3 FT Interm Duration Pfd FPF 23.35 21.42 -8.3 5.4 Dreyfus Hi Yld Fd DHF 3.20 3.05 -4.7 11.3 CLASS ACTIONS
Gabelli Dividend & Incm GDV 19.49 17.00 -12.8 -14.3 Flaherty & Crumrine Dyn DFP 24.28 23.25 -4.2 9.3 Fst Tr Hi Inc Lg/Shrt Fd FSD 16.27 13.90 -14.6 8.8
Gabelli Equity GAB 5.30 4.92 -7.2 -14.8 Flaherty & Crumrine Pfd FFC 18.89 19.78 +4.7 5.6 Guggenheim Strat Opps Fd GOF 17.48 16.60 -5.0 12.9
Genl American Investors GAM 35.05 29.37 -16.2 -10.7 John Hancock Pfd Income HPI 21.88 20.31 -7.2 4.4 Ivy High Income Opps Fund IVH 14.14 12.04 -14.9 12.9
HnckJohn TxAdv HTD 22.81 20.04 -12.1 -3.0 John Hancock Pfd II HPF 21.65 20.02 -7.5 2.9 NexPoint Credit Strat Fd NHF 23.28 19.51 -16.2 32.2

Nuveen Gl Hi Incm Fd JGH 15.90 13.67 -14.0 11.4
Liberty All-Star Equity USA 5.76 4.90 -14.9 -9.2
Royce Micro-Cap RMT 7.97 6.86 -13.9 -16.8
John Hancock Pfd Inc III HPS 19.20 18.18 -5.3 6.6
JHancock Pr Div PDT 14.94 13.40 -10.3 4.1 Nuveen High Incm Dec18 JHA 9.59 10.02 +4.5 NS

!
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$%

! & $
'&

(
Royce Value Trust RVT 12.57 10.74 -14.6 -15.6 LMP Cap & Inco Fd SCD 13.85 11.68 -15.7 -24.1 Pioneer High Income Trust PHT 9.38 9.57 +2.0 14.5
Source Capital SOR 71.49 64.09 -10.4 -0.9 Nuveen Preferred & Incm JPI 24.49 23.58 -3.7 12.3 Prud Gl Shrt Dur Hi Yd GHY 16.00 14.22 -11.1 10.0

Tri-Continental TY 22.40 19.07 -14.9 -6.6 Nuveen Preferred Inc Opp JPC 10.22 9.48 -7.2 7.7 Prudentl Sh Dur Hi Yd Fd ISD 16.33 14.96 -8.4 9.6
Wells Fargo Incm Opps Fd EAD 8.22 7.41 -9.9 10.9

Zweig Fund ZF 13.73 12.28 -10.6 -13.1 Nuveen Quality pf JTP 9.02 8.23 -8.8 5.8
Specialized Equity Funds Nuveen Fd2 JPS 9.62 9.03 -6.1 5.9 Wstrn Asset Glbl Hi Inco EHI 10.15 8.64 -14.9 13.2

!
" # $

Adams Natural Rscs Fd PEO 19.24 16.30 -15.3 -26.0 TCW Strategic Income Fund TSI 5.38 NA 2.2 Wstrn Asset High Inco II HIX 6.87 6.39 -7.0 13.1

!
AllnzGI NFJ Div Interest NFJ 13.57 11.64 -14.2 -19.6 Zweig Total Return ZTR 12.95 11.84 -8.6 -7.6 Wstrn Asset Opp Fd HIO 5.15 4.59 -10.9 9.0

!

AlpnGlblPrProp AWP 6.51 5.50 -15.5 -11.8 West Asst HY Def Opp Fd HYI 15.35 13.99 -8.9 9.3
Convertible Sec's. Funds
Other Domestic Taxable Bond Funds

%

!
!

BlkRk Enh Cap Inco CII 14.22 13.37 -6.0 1.7 AdvntClymrFd AVK 15.48 13.21 -14.7 -13.2
BlkRk Engy Res Tr BGR 12.96 11.69 -9.8 -38.1 Ares Dynamic Credit Alloc ARDC NA 13.34 NA 10.5

&

AllianzGI Conv & Incm NCV 6.10 5.48 -10.2 -31.6
BlackRock Enh Eq Div Tr BDJ 8.23 7.23 -12.2 -5.6 AllianzGI Conv & Incm II NCZ 5.42 4.81 -11.3 -35.6 Babson Cap Corp Inv MCI NA 17.19 NA 6.9

!
Blackrock Global Trust BOE 13.39 12.09 -9.7 -0.1 AllianzGI Equity & Conv NIE 19.84 17.13 -13.7 -8.8 BlackRock Multi-Sector IT BIT 18.18 15.79 -13.1 9.4

"
BlkRk Health Sci BME 33.98 38.51 +13.3 8.3 Calamos Conv Hi Inco Fd CHY 11.14 10.07 -9.6 -19.2 BlackRock Taxable Mun Bd BBN 22.64 21.71 -4.1 7.5
BlkRk Intl Grwth&Inco BGY 6.55 5.97 -8.9 -3.4 Calamos CHI 10.51 9.47 -9.9 -17.8 Doubleline Oppor Credit DBL NA 25.43 NA 10.0
BlackRck Rscs Comm Str Tr BCX 7.72 6.52 -15.5 -26.8 World Equity Funds Duff & Phelps Utl & Cp Bd DUC 10.11 9.22 -8.8 6.5 $

+

BlackRock Science & Tech BST 18.40 16.25 -11.7 -4.3 EtnVncLtdFd EVV NA 12.62 NA 9.5

'
#

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Alpine Tot Dyn Div AOD 8.64 7.29 -15.6 -8.1

Franklin Ltd Duration IT FTF NA 10.76 NA 6.9

BlackRock Utility & Infr BUI 18.90 16.63 -12.0 -11.3 Calamos Glbl Dyn Inc CHW 7.86 6.92 -12.0 -12.1 # ("#"& ' '
)*& '() ) &
CBREClarionGlblRlEstIncm IGR 8.64 7.32 -15.3 -14.0 GuggenhBondMnegDurTr GBAB 22.76 21.86 -4.0 8.2
"#

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Cdn Genl Inv CGI 22.82 18.23 -20.1 -0.8 +
"
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Central Fund Of Canada CEF 11.59 10.46 -9.7 -13.6 KKR Income Opps Fund KIO NA 13.72 NA 10.8
4999B;;<5C4"
China Fund CHN 16.13 14.18 -12.1 -17.0
Central GoldTrust GTU 40.09 39.45 -1.6 -5.9 Clough Glbl Eqty Fd GLQ 13.74 11.76 -14.4 -10.7
MFS Charter MCR 8.97 7.83 -12.7 9.2 - +
"& #,& '
ClearBridge Amer Engy CBA 7.77 7.26 -6.6 -50.1 MFS Multimkt MMT 6.46 5.58 -13.6 9.0 #,& ,
. "& /' '
)*
),, 0 $ 1$#-/
Clough Global Opp Fd GLO 11.88 10.04 -15.5 -10.9
ClearBridge Engy MLP Fd CEM 14.36 13.19 -8.1 -45.6 Nuveen Build Am Bd Fd NBB 21.58 20.35 -5.7 6.7 /' '
0# ("#"& 1)-
. "

EtnVncTxAdvGblDiv ETG 15.92 14.67 -7.9 -1.4
PIMCO Corporate & Incm PTY NA 13.27 NA 11.9 +
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Clearbridge Engy MLP Opp EMO 12.36 11.32 -8.4 -44.3 EatonVance TxAdv Opport ETO 21.51 20.32 -5.5 -5.8 1)-
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Clearbridge Engy MLP TR CTR 11.53 10.70 -7.2 -43.7 PIMCO Corporate & Incm PCN NA 13.45 NA 10.2

First Trust Dynamic Eur FDEU 17.76 16.25 -8.5 NS
PIMCO HiInco PHK NA 8.11 NA 16.9 **& 2 '

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Cohen & Steers Infra UTF 21.24 17.77 -16.3 -13.9 Gabelli Glbl Multimedia GGT 7.86 7.10 -9.7 -18.9
C&S MLP Incm & Engy Opp MIE 9.49 9.38 -1.2 -46.3 PIMCO Inco Str Fd PFL NA 9.53 NA 11.0
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GDL Fund GDL 11.78 10.03 -14.9 4.9
Cohen & Steers Qual Inc RQI 13.06 11.64 -10.9 1.6 India Fund IFN 24.63 21.38 -13.2 -13.2
Pimco Inco Strat Fd II PFN NA 8.66 NA 11.7

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CohnStrsPfdInco RNP 21.29 17.89 -16.0 -0.6 Putnam Mas Inco PIM 4.92 4.42 -10.2 6.8
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Putnam Premier Income Tr PPT 5.41 4.83 -10.7 6.3 "#

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Cohen & Steers TR RFI 13.27 12.06 -9.1 -2.6 Mexico Fund MXF 15.42 NA -19.3 /
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MS China a Shr Fd CAF 21.29 16.80 -21.1 -11.8
World Income Funds

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Divers Real Asset Incm Fd DRA 17.56 15.17 -13.6 -4.7 28.02 24.07 -14.1 -10.7
MS India Invest IIF
Abeerden Asia-Pacific FAX 5.41 4.47 -17.4 6.4
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Duff & Phelps DNP 8.01 9.08 +13.4 -3.8 New Germany Fund GF 15.15 13.53 -10.7 5.7
Duff&PhelpsGblUtilIncFd DPG 16.29 13.78 -15.4 -27.9 Etn Vnc Short Dur Fd EVG 14.98 13.19 -11.9 8.0

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Swiss Helvetia Fund SWZ 11.64 10.06 -13.6 -3.3
Eaton Vance Eqty Inco Fd EOI 13.20 12.50 -5.3 -0.4 Templeton Dragon TDF 18.81 NA NA NA
Legg Mason BW Glbl Incm BWG 13.34 11.29 -15.4 16.4

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Eaton Vance Eqty Inco II EOS 13.46 12.85 -4.5 2.0 MS EmMktDomDebt EDD 8.00 6.66 -16.8 12.6 45 0""" 6 4

Voya Infr Indls & Matls IDE 13.47 11.49 -14.7 -17.8 PIMCO Dynamic Credit Incm PCI NA 17.95 NA 11.8
EtnVncRskMngd ETJ 10.72 9.70 -9.5 -1.7 Wells Fargo Gl Div Opp EOD 6.62 5.61 -15.3 -17.7 PIMCODynamicIncomeFund PDI NA 27.69 NA 14.5

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Etn Vnc Tax Mgd Buy-Write ETB 14.67 15.64 +6.6 5.7
Eaton Vance BuyWrite Opp ETV 13.73 14.28 +4.0 8.8
Prem12 Mo PIMCO Income Opportunity PKO NA 20.93 NA 10.5 $ $ ,$ ##./
Eaton Vance Tax-Mng Div ETY 11.21 10.58 -5.6 2.5
Fund (SYM) NAV Close /Disc Yld PIMCO Strat Income Fund RCS NA 8.99 NA 11.1

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U.S. Mortgage Bond Funds Templeton Emerging TEI 11.34 9.76 -13.9 8.0

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Fiduciary/Clymr Opp Fd FMO 13.00 12.06 -7.2 -47.4 Brkfld Mortgage Opp Incm BOI 16.97 14.53 -14.4 10.3 Wstrn Asset Emerg Mkts ESD 16.25 13.62 -16.2 9.5

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Wstrn Asset Gl Def Opp Fd GDO 17.96 15.89 -11.5 8.6

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FstTrEnhEqtIncFd FFA 14.06 12.37 -12.0 -8.6 Nuveen Mtg Oppy Term Fd JLS 25.05 22.76 -9.1 6.6

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Blackrock Invest BKN 16.56 15.59 -5.9 5.9

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Gabelli Hlthcr & Well GRX 11.17 9.74 -12.8 -2.1 Blackrock Core Bond Tr BHK 13.98 12.72 -9.0 7.0

Gabelli Utility Tr GUT 5.03 5.71 +13.5 -13.2 BlkRk Credit Alloc Incm BTZ 13.81 12.38 -10.4 7.8 BlackRock Municipal Trust BFK 15.11 14.93 -1.2 6.1 = ?D ?<4:"
GAMCOGlblGoldNatRscs&Inc GGN 5.30 5.03 -5.1 -20.4 John Hancock Income Secs JHS 14.72 13.46 -8.6 6.5 BlackRockMuni BLE 15.73 15.45 -1.8 6.1 849:;:5<<<<
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BlackRockMuni Tr BYM 15.78 14.78 -6.3 5.7
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BlkRk MuniAssets Fd MUA 14.31 14.40 +0.6 5.2

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BlkRk MuniHldgs Inv MFL 15.64 14.82 -5.2 5.9
BlkRk MuniHldgs Qlty II MUE 14.85 13.73 -7.5 6.0

Public and Private Borrowing BlkRk MuniVest MVF 10.26 10.46 +1.9 6.2
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BlkRk MuniVest II MVT 16.16 16.55 +2.4 6.0 7
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Monday, January 11 Thursday, January 14 BlkRk MuniYld Qlty II MQT 14.38 13.53 -5.9 6.2 7

BlRkMunyldQltyIII MYI 15.17 14.91 -1.7 6.0

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Dreyfus Mun Bd Infr Fd DMB 14.13 12.68 -10.3 6.0 )*- * 2$.- *$.-0/
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Dreyfus Strategic Munis LEO 8.98 8.73 -2.8 6.0 @

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announced on Jan. 7; settles on Jan. 14 Eaton Vance Mun Bd Fd EIM 14.30 13.13 -8.2 5.9 ?A<< "" 0

Eaton Vance Mun Income EVN 13.45 13.91 +3.4 6.4 $

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Tuesday, January 12 $

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EV National Municipal Opp EOT 22.93 21.57 -5.9 4.8
Auction of three-year notes; Invesco Adv Mun Incm II VKI 12.78 12.00 -6.1 6.6

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Invesco Mun Opportunity VMO 14.27 13.42 -6.0 6.3

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Invesco Qlty Mun Inco IQI 14.12 12.89 -8.7 6.0

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Invesco Inv Grade Muni VGM 14.72 13.49 -8.4 6.6 & )

Wednesday, January 13 Invesco Value Mun Incm Tr IIM 16.81 16.57 -1.4 5.2 0

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MainStay DefinedTerm MMD 19.86 18.99 -4.4 6.2

Auction of 10-year notes;
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announced on Jan. 7; settles on Jan. 15 NuvAMTFreeMuniIncm NEA 15.32 13.96 -8.9 5.6 @

NuvDivAdvMuniIncm NVG 16.55 14.79 -10.6 5.1

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Nuveen Div Fnd NAD 15.89 14.58 -8.2 5.9
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Nuveen Div Adv NZF 16.25 14.57 -10.3 5.4 2
&& 334553"6
Deals of $ 150 million or more expected this week Nuveen Enhncd Mun Val Fd NEV 15.77 15.91 +0.9 6.1
Final Total Rating Bookrunner/ Nuveen Intermed Dur Mun NID 13.92 12.99 -6.7 5.3 7 ($
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NuveenMuniAdvantageFd NMA 15.73 14.00 -11.0 5.7
NuveenMuniIncoOpp Fd NMZ 13.81 13.88 +0.5 6.5 PUBLIC NOTICES
Jan. 11 prelim. Tallahassee 150.0 N.R. Baa1 N.R. BoA Merrill/
Nuveen Muni Mkt Opp NMO 15.65 13.99 -10.6 5.6
City-Florida Nabors Giblin Nuveen Mun Opportunity Fd NIO 15.99 14.54 -9.1 6.1
& Nickerson Nuveen Muni Value Fund NUV 10.38 10.25 -1.3 3.9
Nuveen Performance Plus NPP 16.57 15.19 -8.3 5.9
Nuveen Premium Inco Muni NPI 15.81 14.24 -9.9 5.8

LEGAL
Jan. 14 Jan. 1, 2041 Illinois 480.0 BBB+ Baa1 A- Preliminary/Chapman Nuveen Prem Inco Muni 2 NPM 15.86 14.59 -8.0 5.9
and Cutler LLP/ Nuveen Prem Inco Muni 4 NPT 14.71 13.69 -6.9 6.1

Pugh Jones Johnson Nuveen Premier Muni Inc NPF 15.51 13.88 -10.5 6.0
Nuveen Quality Income NQU 16.13 14.45 -10.4 5.8
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Nuveen Quality Muni Fund NQI 15.51 13.83 -10.8 4.9

Jan. 15 prelim. Alaska 158.2 N.R. N.R. N.R. Goldman & Nuveen Select Quality NQS 15.99 14.22 -11.1 5.5

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PIMCO Muni Inc III PMX 11.30 11.91 +5.4 6.4

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Pioneer Mun Hi Inc Adv Tr MAV 12.60 13.49 +7.1 7.6
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Jan. 15 prelim. Connecticut 222.1 AA N.R. N.R. BoA Merrill/— BlackRock CA Municipal Tr BFZ 16.13 15.96 -1.1 5.4
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Invesco Inv Grade NY Muni VTN 15.37 14.78 -3.8 5.6
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Corporate Debt Griffin Inst Access RE:I NA NA NA NS
Resource RE Div Inc:A 9.55 NA NA -2.6

$
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Email: heard@wsj.com
HEARD ON THE STREET FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard
Biotech Is
Bloodied,
Oculus Rift: The Price of a Sharper Vision
Virtual reality could cause perception of virtual reality. sles. Ben Schachter of Mac-
Vision Quest
But Not Out a case of real-world sticker
shock. For those with the
stomach to take a long-term
Projected installed
The importance of that goes
well beyond gaming.
Although seen as a nerd’s
quarie Capital describes this
formula as “utility > distur-
bance.” He thinks the Oculus
base for Oculus Rift
Biotech stocks had a par- view of the business, though, toy for now, VR could even- Rift has achieved enough of
ticularly rough start to 2016. that isn’t a bad thing. 6 million units tually disrupt areas such as that balance to ship about
But the coming week will be As last week’s Consumer communications, retail shop- one million units this year.
a far more informative gauge Electronics Show proved, ping—both online as it now Others have guessed lower.
of the sector’s health. virtual reality is the hot new 4 exists and in bricks-and-mor- But most analysts agree that
The Nasdaq Biotechnology thing in tech. Hundreds of tar stores—and services such the Rift isn’t a mass-market
Index is off 11% to start the attendees waited in long as real estate, to name a few. device at its current price.
John Locher/Associated Press

year, and down nearly 25% lines to try the Rift virtual- 2
Facebook CEO Mark Zuck- Right now, it doesn’t need
from the record high of last reality headset from Oculus erberg calls virtual reality to be. Compelling new tech-
July. Part of the selloff is VR, the startup bought by “the next computing plat- nologies often start at a high
due to global turmoil; while Facebook two years ago for form.” To that end, it is im- price and take time to build
that has little to do with U.S. $2 billion. And that was after 0 portant the headset delivers a sizable user base. Apple’s
biotech companies’ operating the company announced the 2016 ’17 ’18 ’19 ’20 a high-quality experience. first iPod cost $400 and sold
prospects, global-market headset would cost $599—or Source: Barclays And that still isn’t a sure only 381,000 units its first
stress can be problematic for $1,499 for a bundle that in- THE WALL STREET JOURNAL. thing. Virtual reality faces year. It took two more years,
high-risk sectors. cludes it and a PC with the more hurdles than just price. which included a significant
Plus, a number of biotech necessary horsepower. Nota- tems. But the high price able upgrade from the “much The technology requires cus- price decline, Windows com-
secondary equity offerings bly, preorders appeared to doesn’t seem to stem from less advanced” technology tom-made content; simply patibility and the ability to
priced at sharp discounts run through available supply Facebook’s desire to turn a used in the last version of piping a standard movie, TV buy songs for $1 apiece to
last week, raising fears the quickly. This forced an exten- quick profit. In fact, Oculus the company’s developer kit, show or videogame into the make it a huge success.
bull market is ending. Yet sion of the headset’s esti- founder Palmer Luckey says which sold for $350 over glasses isn’t compelling. Vir- Virtual-reality systems, if
the selloff belies the sector’s mated shipping date. the company isn’t making Kickstarter. tual reality also can impose coupled with the right eco-
January performance the Still, the Rift’s price is money on the hardware. That is the right call for physical demands on users systems, could follow a simi-
past four years—an average steep for what is essentially Rather, Oculus decided to both virtual reality and Face- that aren’t always pleasant. lar path. So those looking for
gain of 7%. That is no statis- now a videogame console. turn up the specs on the Rift. book. As the first high-end If virtual reality is to suc- a quick hit will be disap-
tical curiosity. The influen- The headset alone is about In a conversation hosted on headset to hit the market, ceed, it will need to deliver pointed. Those in it for the
tial J.P. Morgan Healthcare 70% above that of full Xbox Reddit, Mr. Luckey said the the Rift will go a long way an experience compelling long haul could have an ex-
Conference, at which biotech One or PlayStation 4 sys- new headset is a consider- toward shaping the public’s enough to outweigh its has- citing ride. —Dan Gallagher
companies present, falls in
January. This year’s starts
Monday. Lately, stocks’ reac-
tion to the conference has
been positive, as companies
Saudi Aramco: Bigger Oil and Bigger Pitfalls for Investors
have announced deals, issued “Big oil” is really a misno- than worrying about today’s through expropriating parts ers to bring their capital and
positive forecasts and pro- mer. It may not be for long. very low energy prices. A lit- of privately owned rival Yu- expertise to bear.
vided research updates. The largest energy com- Black Gold tle historical perspective also kos and absorbing a dispute- In either case, terms could
Granted, signs biotech is pany that investors can eas- Oil reserves, in billions of barrels should make potential for- riven local joint-venture end up seeming very attrac-
overheating have long prolif- ily own is Exxon Mobil. It is eign shareholders of Aramco partly owned by BP. The Rus- tive today. But the question
erated; even after the recent by most standards massive, Petroleos de or any other national oil sian government said last is how durable the agree-
298
Venezuela
selloff the sector is about having rivaled Apple for the company wary. month that it might sell a ments will be once the price
20% higher than in the sum- global market-value crown Saudi Aramco 266 Once upon a time, Aramco 19% stake in Rosneft. of oil recovers.
mer of 2014 when Federal before the latest commodity was the Arabian-American Back in the 1970, today’s Investing in oil-and-gas
Reserve Chairwoman Janet swoon. But its proven re- National Oil Co. owned by the prede- “big oil” controlled about production involves risks
Iranian Oil 158
Yellen warned valuations of serves of 25 billion oil- cessors of Exxon Mobil and four-fifths of global produc- with commodity prices and
small biotech stocks were equivalent barrels pale in Exxon Mobil* 25 Chevron. In the same way, tion. A decade later, it con- politics being the two most
“substantially stretched.” comparison with Saudi Iran’s National Iranian Oil trolled less than one-fifth. prominent ones. Special at-
There will be a time when Aramco, which is more than *Includes gas-equivalent barrels Co. was owned by BP and The fact that the national- tention must be paid to the
biotech stocks fall out of fa- 10 times its size on that mea- Shell and Venezuela’s Petró- izations happened at a time latter in countries that have
vor. That said, any hypothet- sure and pumps over one- put dollar signs in the eyes leos de Venezuela was owned of then-record prices is prob- helped themselves in the
ical indication investors have tenth of the world’s crude. of some bankers and energy by various foreign producers. ably no coincidence. The past to private property.
soured on biotech’s pros- News last week that the investors. All were nationalized at a same goes for Saudi Arabia’s The price of any assets on
pects would come after the Saudi government is consid- While the deal may never time of high prices in the willingness to potentially sell offer can only be attractive if
conference, not before. ering an initial public offer- happen and could well be re- 1970s. a stake in its crown jewel they compensate investors
Biotech is on the ropes. ing for the producer set off stricted to domestic buyers if Another energy giant, with prices so low today, or for the possibility a govern-
But the recent rough ride speculation about the world’s it does, how should investors Russia’s Rosneft, remains for concessions that may be ment will once again rewrite
doesn’t confirm a knockout. first trillion-dollar-plus com- react if it materializes? Any mostly state-owned. It as- offered by other national oil the rules when prices again
—Charley Grant pany by market value and trepidation should go further sumed its current form companies to private produc- rise. —Spencer Jakab
MONEY & INVESTING Borrowing Benchmarks | WSJ.com/bonds

Money Rates January 8, 2016
JUDGE pay the plaintiffs’ lawyers a fee.

In exchange, companies receive
immunity from future lawsuits
related to the deal. Last year,
low “the path to getting paid.”
It wasn’t a first for Judge
Laster, long the court’s fire-
brand. In his six years on the
Key annual interest rates paid to borrow or lend money in U.S. and international markets. Rates below are a
guide to general levels but don’t always represent actual transactions.
Inflation Week —52-WEEK— Week —52-WEEK—
Continued from page C1 just 8% of settlements included bench, he has made weeding out Nov. index Chg From (%) Latest ago High Low Latest ago High Low
pursue cases where we can more money for investors, ac- weak cases something of a pet level Oct. '15 Nov. '14 Switzerland 0.50 0.50 0.50 0.50 Treasury bill auction
make a difference for stockhold- cording to Cornerstone Re- issue. But “this time feels differ- Britain 0.50 0.50 0.50 0.50
U.S. consumer price index 4 weeks 0.200 0.170 0.235 0.000
Australia 2.00 2.00 2.50 2.00
ers.” search. ent,” said Ed Micheletti of Skad- All items 237.336 –0.21 0.5 13 weeks 0.215 0.260 0.280 0.000
Shareholder lawsuits have Delaware judges have be- den, Arps, Slate, Meagher & Core 244.075 0.04 2.0 Overnight repurchase 26 weeks 0.500 0.550 0.585 0.065
proliferated in recent years, typ- come increasingly critical of Flom LLP, in part because Judge U.S. 0.47 0.38 0.48 0.07
International rates Secondary market
ically charging that companies these “disclosure only” pacts, Laster’s colleagues are joining
U.S. government rates Fannie Mae
did a bad job shopping them- which they say do shareholders him. Week 52-Week
Latest High Low Discount 30-year mortgage yields
selves or agreed to prices that little good and can bury in- Vice Chancellor John Noble ago
1.00 1.00 1.00 0.75 30 days 3.467 3.582 3.750 3.024
were too low. stances of actual wrongdoing. in July compared a settlement Prime rates 60 days 3.497 3.618 3.788 3.080
Plaintiffs’ lawyers say they involving Roche Holding AG’s U.S. 3.50 3.50 3.50 3.25 Federal funds
help police a takeover takeover of biotech company In- Canada 2.70 2.70 3.00 2.70 Effective rate 0.3800 0.2400 0.3800 0.0600 Other short-term rates
scene that can be rife with con-
Most merger terMune Inc. to “deal insur- Japan 1.475 1.475 1.475 1.475 High 0.5600 0.5625 0.5900 0.2500
Low 0.2500 0.0800 0.3000 0.0100 Week 52-Week
flicts of interest. In some cases, lawsuits turn up ance.” Vice Chancellor Sam Policy Rates Bid 0.3500 0.0800 0.3500 0.0000
Latest ago high low
their efforts have found wrong- Glasscock III approved a Sep- Euro zone 0.05 0.05 0.05 0.05 0.5000 0.2500 0.5200 0.0500
doing, recovered money for in-
little in the way of tember settlement related to
Offer
Call money
2.25 2.25 2.25 2.00
vestors and helped clean up un- wrongdoing. software company Riverbed
Commercial paper
savory boardroom practices. Technology Inc.’s buyout but A Week in the Life of the DJIA 30 to 270 days n.q. ... ... ...
Lawyers challenging Dole Food hinted it would be his last.
Co.’s 2013 buyout won $148 mil- In July, Judge Laster rejected And when the five-member A look at how the Dow Jones Industrial Average component stocks Commercial paper (AA financial)
lion for investors in August, a settlement over the sale of court’s senior judge, Chancellor did in the past week and how much each moved the index. The DJIA 90 days 0.57 0.54 0.64 0.06
while a case alleging self-deal- Aeroflex Holdings Corp. after Andre Bouchard, was asked to lost 1078.58 points, or 6.19%, on the week. A $1 change in the price of
any DJIA stock = 6.85-point change in the average. To date, a $1,000 Euro commercial paper
ing transactions at mining com- finding the plaintiffs’ lawyers, bless a settlement involving the n.q. n.q. -0.02 -0.12
investment on Dec. 31 in each current DJIA stock component would 30 day
pany Freeport-McMoRan Inc. who were seeking $875,000, had merger of real-estate websites Two month n.q. n.q. -0.01 -0.09
have returned $28,229, or a loss of 5.90%, on the $30,000
last year collected $138 million done “nothing, zip, zero” for in- Trulia Inc. and Zillow Inc. in investment, including reinvested dividends.
Three month n.q. n.q. 0.01 -0.08
for shareholders. Freeport de- vestors. September, he declined, de- Four month n.q. n.q. 0.02 0.00
Five month n.q. n.q. 0.04 0.01
nied the allegations in the case In October, he shot down a manding more proof that the The Week’s Action
Six month n.q. n.q. 0.05 0.02
and settled it only “to avoid the settlement related to Hewlett- new disclosures were worth- Pct Stock price Point chg $1,000 Invested(year-end '15)
chg (%) change in average Company Symbol Close $1,000 Libor
substantial expense and distrac- Packard Co.’s purchase of Aruba while. A final decision in that
3.65 2.24 15.34 Wal-Mart Stores WMT $63.54 $1,037 One month 0.42380 0.42950 0.42950 0.16650
tion of continued litigation,” a Networks Inc. The pact would case is expected by the end of
–2.25 –2.66 –18.22 McDonald’s MCD $115.48 977 Three month 0.62110 0.61270 0.62110 0.25210
spokesman said at the time. have given Aruba shareholders the month. Six month 0.85080 0.84615 0.85130 0.35390
Most suits turn up little in no additional money, despite Litigants are taking notice. In –3.01 –1.39 –9.52 Verizon VZ 44.83 982 One year 1.15510 1.17800 1.17800 0.60990
the way of wrongdoing and pro- the plaintiffs’ original claim that addition to a decline in new –3.29 –1.74 –11.92 Merck MRK 51.08 967
Euro Libor
duce no extra cash for share- the deal was underpriced, while lawsuits, earlier cases are being –3.38 –1.45 –9.93 Coca-Cola KO 41.51 966 One month -0.214 -0.204 -0.001 -0.214
holders. Companies agree in earning their lawyers a abandoned in larger numbers. Three month -0.139 -0.128 0.049 -0.139
–3.97 –1.28 –8.77 Pfizer PFE 31.00 960
predictable settlements to dis- $387,500 fee. In an unusual re- Advent Software Inc. and Six month -0.053 -0.039 0.131 -0.058
–4.18 –3.26 –22.33 Exxon Mobil XOM 74.69 958 One year 0.048 0.059 0.283 0.031
close additional information— buke from the bench, Judge lawyers suing over its sale to
typically obscure financial anal- Laster dismissed the case and SS&C Technologies Holdings –4.33 –3.44 –23.56 Procter & Gamble PG 75.97 957
Euro interbank offered rate (Euribor)
yses or mundane details of said it typified a “pseudo-litiga- Inc. were negotiating a disclo- –4.35 –5.99 –41.02 IBM IBM 131.63 956 One month -0.218 -0.205 0.009 -0.218
negotiation meetings—and to tion” system where lawyers fol- sure-only settlement this fall, –4.44 –4.56 –31.23 Johnson & Johnson JNJ 98.16 956 Three month -0.143 -0.131 0.071 -0.143
according to people familiar Six month -0.051 -0.040 0.168 -0.051
–5.55 –5.83 –39.93 Walt Disney DIS 99.25 945 One year 0.051 0.060 0.318 0.039
with the matter. As word of the
–5.68 –3.15 –21.57 Microsoft MSFT 52.33 943 Value 52-Week
court’s rulings on Aruba and Latest Traded High Low
others made the rounds, “it was –5.81 –3.63 –24.86 Nike NKE 58.87 942
pencils down,” one of the people –5.90 –5.67 –38.83 United Technologies UTX 90.40 941 DTCC GCF Repo Index
said. The plaintiffs later –6.02 –4.67 –31.98 Visa V 72.88 940 Treasury 0.457 75.950 0.639 0.059
MBS 0.476 66.580 0.705 0.075
dropped the case. –6.09 –6.87 –47.05 Travelers TRV 105.99 939 Open Implied
On its face, the shift would
–6.31 –8.35 –57.18 Home Depot HD 123.90 937 Settle Change Interest Rate
seem to be welcome news for
–6.36 –7.48 –51.23 UnitedHealth Group UNH 110.16 936 DTCC GCF Repo Index Futures
companies, which have long
–6.74 –10.15 –69.51 3M MMM 140.49 933 Treasury Jan 99.540 -0.010 8349 0.460
viewed these lawsuits as a Treasury Feb 99.550 unch. 5705 0.450
“merger tax.” But few are cheer- –6.87 –4.67 –31.98 Caterpillar CAT 63.29 931 Treasury Mar 99.480 -0.010 3958 0.520
ing. Settlements represent a –7.89 –8.30 –56.84 Apple AAPL 96.96 921
cheap, predictable way to avoid –8.15 –5.43 –37.19 DuPont DD 61.17 918
Notes on data:
drawn-out court fights. U.S. prime rate is effective December 17, 2015.
–8.51 –5.92 –40.54 American Express AXP 63.63 919 Discount rate is effective December 17, 2015.
Moreover, a tougher stance U.S. prime rate is the base rate on corporate
–8.53 –2.94 –20.13 Intel INTC 31.51 915
in Delaware may drive cases to loans posted by at least 70% of the 10 largest
other jurisdictions that are less –8.67 –2.70 –18.49 General Electric GE 28.45 913 U.S. banks;
Other prime rates aren’t directly comparable;
predictable. –8.70 –7.83 –53.62 Chevron CVX 82.13 913 lending practices vary widely by location;
DTCC GCF Repo Index is Depository Trust &
“Everyone was holding their –8.75 –2.38 –16.26 Cisco Systems CSCO 24.78 920 Clearing Corp.'s weighted average for overnight
BLOOMBERG NEWS
nose [and settling] because all –9.04 –16.29 –111.56 Goldman Sachs GS 163.94 910
trades in applicable CUSIPs. Value traded is in
billions of U.S. dollars.
parties benefited,” said Steven Futures on the DTCC GCF Repo Index are
–10.10 –14.60 –99.99 Boeing BA 129.99 899
Haas, a corporate partner at traded on NYSE Liffe US.
Hunton & Williams LLP. Now, he –10.77 –7.11 –48.69 J.P. Morgan Chase JPM 58.92 898 Sources: Federal Reserve; Bureau of Labor
Statistics; DTCC; SIX Financial Information;
said, “the question is, ‘what to Sources: WSJ Market Data Group; S&P Dow Jones Indices. For more information on the Dow Jones General Electric Capital Corp.; Tullett Prebon
Delaware Chancery Court, where many merger suits land do?’” Industrial Average and the 30 industrials, please visit www.djindexes.com Information, Ltd.
JOURNAL REPORT | A QUARTERLY ANALYSIS
Follo
The E w
xper
A ts
© 2016 Dow Jones & Company. All Rights Reserved. * * THE WALL STREET JOURNAL. Convn Online Monday, January 11, 2016 | R1
e
DETA rsation
I LS , R2 INSIDE
5 Things to Consider Before WINNERS’ CIRCLE

Polen Growth Fund
Takes the Crown
The fund’s 14.6% return for
Investing in Emerging Markets the 12 months made it the

No. 1 performer in our contest
R4
With U.S. stocks struggling, SUSTAINABLE INVESTING
investors might be tempted ‘Do Good’ Strategies
Have Turned a Corner
to look elsewhere With mainstream financial firms
in the game, the once-niche
asset class has emerged
BY MICHAEL A. POLLOCK R5
EXCHANGE-TRADED FUNDS
AFTER A BAD 2015 for emerging-
In Europe’s Beaten
markets stocks, there are potential
Countries, Spread Your Risk
bargains available for investors
How to keep from getting
willing to take on the added risk
burned in the eurozone.
of this volatile sector.
Ireland and Greece diverge.
More investors might be think-
R7
ing about taking that risk now
that the U.S. market has followed
SAVING FOR COLLEGE
an erratic and mostly unrewarding
2015 with a nerve-rattling slide to Is That ‘529’ for Tuition?
start this year. But those who take We answer more readers’
the plunge need to be choosy. That questions on paying the bills
bad start in the U.S., after all, was R8
triggered by a far steeper decline
in China, the biggest emerging FIXED-INCOME INVESTING
market of them all. Should Investors Always
For investors looking to buy an Hold Some Junk? Nope.
emerging-markets fund, China’s The implosion of Third Avenue
troubles are just one thing to keep is evidence that a permanent
in mind when making one of the high-yield allocation isn’t wise
first and most basic choices R8
among funds: Do you buy an ex-
change-traded fund that tracks a NEWS CHALLENGE
market index or an actively man- ROBERT NEUBECKER
Test Your Smarts on...
aged fund? ...the Dow, junk bonds, robo
ETFs in general have become advice. Our monthly news quiz.
increasingly popular in recent R12
years, largely because of lower
fees than actively managed funds
and the fact that many active SCOREBOARD
managers don’t fare well in perfor- some things to consider: For instance, many fund manag- Because of the uncertainty of
mance comparisons with indexes. ers in recent years have held much how markets will move even in the Full-year 2015 fund performance,
But both options have advan- 1. Time tells different smaller allocations of Chinese near term, it is best to examine total return by fund type. More on R2.
tages and disadvantages, and stories for ETFs and funds stocks than the widely followed how active funds have performed U.S. Intl. Bonds
some factors come into play in In comparing the performance MSCI Emerging Markets Index compared with index funds in as stocks* stocks* (intmd.)
emerging markets that don’t enter of an ETF to a similar actively would dictate, Ms. Oey says. Many many different market environ-
into the decision for other funds, managed fund, investors should of those managers beat the index ments as possible. And that uncer-
at least not to the same degree. look at a variety of time frames, when Chinese stocks faltered in tainty is heightened in emerging
So for those who are trying to not just recent returns, says Patri- 2011 and 2012, but lagged behind it markets, which tend to be more –2.1% –1.3% –0.1%
choose between active or passive cia Oey, senior analyst at fund when the Chinese market fared bet- volatile than many other sectors.
emerging-markets funds, here are tracker Morningstar Inc. ter from mid-2013 through 2014. Please turn to the next page *Diversified funds only, excluding sector and
regional/country funds
Source: Lipper THE WALL STREET JOURNAL.
At 90, ‘Super Bowl’ Stock Analyst Wins Again

merger pact—means the market will be up for E.F. Hutton & Co., a nice firm at 61 Broadway,”
BY WILLIAM POWER
the year. A win by a descendant of the AFL he says, “Mr. Hutton was still alive. I would
sends the market down. Teams created since show up early and write a newsletter picking
THE SUPER BOWL HAS done it again. the merger count for their conference, National the major headlines from whatever publica-
As illogical as it sounds, for seven years in or American. (It helps that Pittsburgh, though tions we could get.”
a row the outcome of the game has foretold in the American conference, is an original NFL If that sounds like tweeting before comput-
the stock market’s direction for the year. Over- team, since it has won six times in “up” years.) ers, he also helped to break ground in financial
all, this now has happened after 40 of the 49 It worked again in 2015 as an old AFL team, TV as a regular on “Wall Street Week.” As his
Super Bowls, for an 82% completion rate. the New England Patriots, won and the Dow 90th birthday approaches, nine days after the
Up or down, it is a phenomenon known as Jones Industrial Average fell 2.2% for the year. Super Bowl on Feb. 7, he is still at work for Na-
the Super Bowl Predictor, and some say its The last time the indicator fumbled was 2008 tional Investment Services in Tampa, Fla.
longtime guardian, who is nearly 90 years old (the New York Giants won, but stocks slid). He isn’t rooting for a team, but he hopes
(four decades older than the Super Bowl it- With NFL playoffs in full swing, the teams stocks rise in 2016. A presidential election is “a
self), should be in the Hall of Fame by now, ei- that would signal an “up” 2016 if they win it fairly good background for some bullishness,”
ther of investing or football. all are Carolina, Arizona, Seattle, Green Bay he says. “People are always hopeful that the
Wall Street analyst Robert H. Stovall actu- and Pittsburgh. Bearish teams are those Patri- next one will be better than the one before.”
ally is the first to admit that the Predictor has ots again, plus Denver and Kansas City. He says he doubts that his son Sam Stovall,
no scientific basis. Still, academics have stud- Mr. Stovall credits a New York Times who is S&P Capital IQ’s U.S. equity strategist,
ied it. And Wall Street has a tradition of quirky sportswriter, the late Leonard Koppett, for will be interested in taking over the Predictor.
indicators, perhaps because serious indicators planting the idea for this “statistical Franken- Too coincidental an indicator, after all.
fail so often. stein.” Mr. Stovall once marveled that when he But the younger Mr. Stovall, 60, says he
“There is no intellectual backing for this was giving serious talks to investors in the might surprise his dad and take the handoff.
sort of thing,” Mr. Stovall says of the Predictor, 1990s, “that’s what they want to know about.” True, the Predictor is “correlation without cau-
“except that it works.” For Mr. Stovall, the Predictor has been a sation,” he says, but “I think what Pop did is
JULIE TENINBAUM
Here is what Predictor fans watch for: A win sidelight in a long Wall Street life. The Whar- tremendous. He is the one who popularized it.”
by an original National Football League team— ton graduate began his career in the 1950s
from the days when there was an NFL and an when Elvis Presley was just starting to record. Mr. Power is a Wall Street Journal news
American Football League, before the 1966 “I got a job as a morning newswire editor at editor. Email him at william.power@wsj.com.
The Power of QQQ

• 100 of the world’s top companies listed on the NASDAQ
• A time-tested track record of over 15 years
• A dynamic ETF structure
Learn more at powershares.com/QQQ
Important information Shares are not individually redeemable and owners of the shares may acquire Invesco Distributors, Inc. is the distributor for PowerShares QQQ which is a
There are risks involved with investing in ETFs, including possible loss of those shares from the Fund and tender those shares for redemption to the unit investment trust.
money. Shares are not actively managed and are subject to risks similar funds in Creation Unit aggregations only, typically consisting of 50,000 shares. An investor should consider investment objectives, risks,
to those of stocks, including those regarding short selling and margin PowerShares® is a registered trademark of Invesco PowerShares Capital
maintenance requirements. Ordinary brokerage commissions apply. The charges and expenses carefully before investing. To obtain a
Management LLC, investment adviser. Invesco PowerShares Capital prospectus, which contains this and other information about
Fund’s return may not match the return of the Underlying Index. The Fund Management LLC (Invesco PowerShares) and Invesco Distributors, Inc., ETF
is subject to certain other risks. Please see the current prospectus for more distributor, are indirect, wholly the QQQ, a unit investment trust, please contact your broker,
information regarding the risk associated with an investment in the Fund. owned subsidiaries of Invesco Ltd. call 800 983 0903 or visit invescopowershares.com.
Shares are not FDIC insured, may lose value and have no bank guarantee. Please read the prospectus carefully before investing.
powershares.com | @PowerShares US10709 10/15

R2 | Monday, January 11, 2016 THE WALL STREET JOURNAL.
Special
SpecialAdvertising
Special Advertising Feature
Advertising Section
Section JOURNAL REPORT | INVESTING IN FUNDS & ETFS
5 Things to Know About Emerging Markets

Continued from the prior page markets, notably China, are Emerging Markets fund (GB- 5. Lines are blurring
Funds with strong 10-year their biggest components. And FAX) over 10 years has beaten between active/passive
track records—going back to some popular ETFs, including the MSCI Emerging Markets
SECTOR PLAYBOOK: the years before the global fi- Vanguard FTSE Emerging Index by about 1.8 percentage ETFs that build in elements
Defense
nancial crisis—are probably Markets, are switching the in- points a year, with an average of active management are be-
the best bet. dexes they track to broaden annual return of about 5%, ac- coming more common.
their portfolios by adding cording to S&P Capital IQ. For instance, as volatility has
2. Fees can be a lot more Chinese stocks. Mr. Van Eck says there are risen, investors have flocked to
higher for active funds But many Chinese compa- some compelling arguments iShares MSCI Emerging Mar-
How a sector strategy can help you Active emerging-markets nies with the biggest market for active management in kets Minimum Volatility
funds tracked by Morningstar capitalizations are state-con- emerging-markets funds. For (EEMV). It rebalances its port-
manage risk as markets shift on average charge more than trolled entities, which worries one thing, he says that with folio regularly to maintain a fo-
1.5% of assets a year for man- some advisers. Those compa- each of the countries in the cus on stocks that gyrate less
E
very investor has to face risk, and building a agement and administrative nies’ actions may be influ- category at a different point in than the broad market of
portfolio lets you try to set a level of risk that expenses. That is about 10 enced more by political objec- its development cycle, “you emerging-markets shares. “It
works for you. You may build a portfolio for your times the fees for ETFs such as tives, such as maintaining jobs absolutely don’t want to have provides emerging-markets ex-
situation and goals by trading off the level of stocks, the Vanguard FTSE Emerging growth, than by shareholder exposure to all countries at all posure, which is risky in gen-
Markets ETF (VWO). concerns such as profitability, times.” Moreover, he says, eral, but by using the least
bonds, cash, or other asset classes. But within your U.S. Fees are deducted from what says Don Wilson, chief invest- “there are a lot of junky com- risky stocks within the EM
stocks, you may want to consider your mix of sectors as funds make on investments, so ment officer at Brightworth, a panies included in indexes, space,” says Todd Rosenbluth,
a way to help manage risk. they erode net returns. wealth-management firm even in our indexes.” director of ETF and mutual-
Sectors are different collections of companies Based on performance com- based in Atlanta. “You want someone who fund research at S&P Capital IQ.
parisons, “I am highly dubious Mr. Wilson says active man- can shift the company, [indus- One possible downside, Mr.
grouped by their type of business. The Global Industry that active management really agers will lean toward compa- try] sector and country expo- Rosenbluth says, is that the
Classification Standard (GICS) identifies 10 distinct adds any value, especially in nies that have consistently sure over time,” he adds. “If fund ignores valuation. “If
stock market sectors. Because each sector has unique the emerging markets,” says strong financial performance. you want to have one fund for [low-volatility] emerging-mar-
characteristics and is driven by different economic fac- Chris Cordaro, chief invest- That makes those funds’ port- emerging markets, active is kets stocks get bid up, this ETF
ment officer at RegentAtlantic folios less vulnerable than in- the way to go.” will continue to hold them,
tors, together they make compelling building blocks Capital, a wealth-management dexes to market downdrafts, he Active funds also give man- whereas an active manager
for the equity portion of your portfolio. firm based in Morristown, N.J. says. Emerging markets are “a agers the freedom to include would probably sell,” he says.
There are several ways you can use sectors to build But others say active funds good place to consider active stocks from outside the cate- That could be an issue for in-
a portfolio that targets less volatility or reduces the risk can be worth the higher fees managers,” Mr. Wilson says. gory in their portfolio. The vestors who worry that rising
because their managers can seventh-largest holding of the valuations can make stocks
of a drop in value — drawdown risk — compared to the take steps to lessen some of 4. Active-funds flexibility Thornburg Developing World more vulnerable to a reversal.
market overall. One is to create a long-term strategic the risks of emerging-markets The emerging-markets um- fund (THDAX) recently was Joseph Nelesen, director of
allocation designed to capture much of the gains of the investing, and they point to brella covers a wide variety of Facebook Inc. Instead of just the U.S. iShares product group,
market with less volatility. More active investors may examples of active funds that countries and companies. Man- owning companies in emerg- says the ETF wouldn’t sell a
have outperformed index- agers of active funds can make ing markets, “we like to think stock solely because of valua-
want to consider a strategy that tilts the portfolio to- tracking counterparts. distinctions among that huge about who is selling into the tion—but volatility sometimes
ward sectors that are expected to outperform the mar- range of stocks that an index- most interesting trends there,” increases with a stock’s value, in
ket based on where we are within the business cycle. 3. Political risk tracking fund doesn’t make. says manager Charlie Wilson. which case the fund might re-
Widely used benchmarks Jan van Eck is chief execu- Over five years, the fund has duce or eliminate its position.
Managing volatility such as the MSCI Emerging tive of Van Eck Global, which beaten the returns of the
Markets Index are based on sponsors ETFs as well as an MSCI Emerging Markets Index Mr. Pollock is a writer in
Volatility in this case means the magnitude of fluctu- market capitalization, so the active emerging-markets eq- by an average of nearly 4.5 Ridgewood, N.J. He can be
ations in sector returns over time. While the volatility of countries with the largest uity fund. The Van Eck percentage points a year. reached at reports@wsj.com.
sectors may evolve over time, history shows that some
sectors have been less volatile than others because the
demand for their products and services tends to be less Benchmark Beaters
Actively managed emerging-markets funds that have beaten a popular iShares ETF over 10 years
sensitive to changes in the economy. Think toothpaste
Name Ticker 10-year return Comments from S&P Capital IQ
makers versus mortgage lenders.
Virtus Emerging Markets Opportunities HEMZX 6.5% Significant (30%) India weighting, higher weighting in Brazil
Because of the correlation levels among sectors, a
Driehaus Emerging Markets Growth DREGX 6.0% Underweight to China & Korea/overweight India & Mexico
market-weighted portfolio of sectors has historically
Oppenheimer Developing Markets ODMAX 5.8% High weightings in India/Brazil and little exposure to Taiwan
lowered overall volatility to less than that of most indi-
American Funds New World Fund NEWFX 5.7% 8% in U.K. & 17% rest of developed Europe, plus 15% U.S.
vidual sectors. And risk-averse investors may want to
Wells Fargo Advantage Emerging Mkts EMGAX 5.3% High Mexico/India vs. low exposure to Taiwan
construct a portfolio that tilts toward the historically less
Van Eck Emerging Markets GBFAX 4.6% Minimal exposure to Korea; India and Brazil relatively high
volatile sectors: consumer staples, utilities, health care,
Invesco Developing Markets GTDDX 4.6% India again relatively high as is Indonesia
telecom, and energy. Recent research from Fidelity’s
equity and Asset Allocation Research Team shows that iShares MSCI Emerging Markets EEM 2.8%
such a risk-managed portfolio would have had consist- Sources: S&P Capital IQ’s MarketScope Advisor; Morningstar; fund-company websites THE WALL STREET JOURNAL.
ently lower volatility than the market over time.

Active allocation driven by business cycles
SPOTLIGHT | GOLDMAN ACTIVEBETA
More active, opportunistic investors may want to QUARTERLY MONITOR | WILLIAM POWER
use sectors to tilt a portfolio toward sectors that have
historically delivered outperformance during the ear-
Investors’ Cash Kept NEW ETF DRAWS CASH
ly phases of the business cycle, and minimized draw- With the exchange- the ETF’s exposure,
downs later in the cycle. Flowing Overseas as traded product world rebalanced quarterly.
awash in new offer- Unlike smaller
EARLY CYCLE U.S. Funds Struggled ings—there were new issuers, Gold-
Economic activity typically accelerates in the early cy- 284 launches in man was able to in-
cle. Historically, economically sensitive sectors, such 2015, according to troduce this ETF
Will investors return research firm XTF— with a discounted
as consumer discretionary and industrials, have out- to U.S.-stock funds in FOLLOW THE MONEY the latest funds must have a expense ratio of 0.45% of as-
performed the broader market during the early stages. 2016? significant pedigree to attract sets annually, compared with
2015 flow of investor cash
MID-CYCLE To put it in sports by fund type, in billions* interest. As every “next new” its stated gross expense ratio
terms, the stock market ETF looks to isolate specific of 0.76%.
The mid-cycle features a positive but more moder- didn’t make the play- U.S. Intl. investment factors or hedge Broad market-cap-
ate pace of growth. So it still makes sense to focus offs in 2015. Respond- stocks stocks Bonds currency risk, the keys are weighted emerging-markets
primarily on return potential in this phase by using ing to sluggish eco- having notable brands and in- ETF expense ratios start at
the technology and industrials sectors. nomic growth in most stitutional backing. Meting 0.15% for Vanguard and
of the world, a six-year out investment returns is an- Schwab and 0.16% for iShares,
LATE CYCLE streak of stock gains other story. with single-factor emerging-
ended, as the Dow in-
–$164.8 $97.4 –$26.6 Understanding this, Gold- markets ETFs starting at
Growth is moderating, and inflation is typically
building. In this environment, investors may want dustrials fell 2.2%. *estimated Source: Investment Company Institute man Sachs Group in Sep- 0.25%, according to XTF.
In tandem, the aver- THE WALL STREET JOURNAL. tember launched three stock “The firm has brought sig-
to consider both return and drawdown risk. Sectors age diversified U.S.- ETFs under the ActiveBeta nificant resources and rela-
such as energy and health care historically fared stock mutual fund had a negative 2.1% return, according to brand. The largest is Goldman tionships to support this new
well on both measures in this phase. data from Thomson Reuters Corp.’s Lipper unit, after the Sachs ActiveBeta Emerging business and make it compet-
prior year’s hard-fought 7.6% gain. Among the hard-hit sec- Markets Equity Index (GEM), itive,” says Steve Sachs, head
RECESSION tors: Gold-oriented funds fell 24%. Health/biotech was a which has attracted $551 mil- of capital markets for ETFs
Amid a contraction in economic activity, equi- bright spot, up 8.1%, on optimism about potential growth. lion largely from institutions. for Goldman Sachs Asset
ties suffer their worst performance and highest The ETF cuts the MSCI Management in New York.
potential for losses in the recessionary phase of Negative flow Emerging Markets Equity uni- While the ETF is designed
But overall, it wasn’t pretty for mutual funds focused on verse across four investment to outperform the market-
the business cycle. Investors should focus on the U.S. stocks—and investors voted with their wallets, pulling a factors—value, momentum, cap-weighted index, it has re-
most defensive, stable sectors in this phase, in- net $164.8 billion out of U.S.-stock funds during 2015, ac- quality and low volatility. turned 0.17% since its late-
cluding consumer staples, utilities, telecom, and cording to fund-flow estimates from the Investment Com- Stocks are screened and September launch, compared
pany Institute. Bond funds had an outflow of $26.6 billion. weighted along each factor with 1.05% for the MSCI
health care. Where did the money go? A lot continued to flow to for- and combined into an index Emerging Markets index, ac-
Conclusion eign-stock funds, which attracted $97.4 billion despite hit- so that each factor’s weight- cording to Morningstar Inc.
and-miss performances. International-stock funds were ing accounts for a quarter of —Ari I. Weinberg
Given their different characteristics, sectors can be down 1.3%, after falling 5.0% in 2014. Many investors are
an effective tool for managing volatility and downside waiting for their commitment to global markets to pay off.
risk. A portfolio tilted toward less-volatile equity sec- So while investors were net sellers of stock funds, it “re-
tors, including consumer staples, utilities, health care,
and telecom, historically has demonstrated lower vol-
ally was a tale of two cities” based on the U.S./international
contrast, says Tom Roseen, Lipper head of research services.
Bond-fund performance was mostly down in a year spent
WSJ
.COM
AN ONLINE INTERACTIVE AT
WSJ.COM/WEALTHREPORT
atility and drawdown risk compared with the broader in anticipation of a Federal Reserve interest-rate increase,
which came in December. Funds focused on intermediate-
U.S. equity market. At the same time, leveraging the
maturity, investment-grade debt, the most commonly held 8 QUESTIONS TO ASK BEFORE
business cycle phases can enhance the risk-adjusted type, fell a scant 0.1%, after being up 5.3% the year before. PICKING A COLLEGE
returns of an actively managed portfolio. A junk-bond selloff pushed high-yield taxable bond funds
to a 4.1% drop for the year. This year, investors can expect
LEARN MORE continued uncertainty about when the Fed will raise again.
Find the full version of this research, updates on Mr. Power is a Wall Street Journal news editor in South
the business cycle, and other insights at Brunswick, N.J. Email him at william.power@wsj.com.
Fidelity.com/Viewpoints
JAMES YANG
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Stock markets are volatile and can decline significantly in response to adverse issuer, This Journal Report doesn’t stop here. that loan?
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Because of its narrow focus, sector investing tends to be more volatile than investments that
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Past performance is no guarantee of future results.
who weigh in on issues raised in this and you want?
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Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917 WSJ.com/WealthReport. This week they discuss distrust of Our new interactive guide provides answers to these
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THE WALL STREET JOURNAL. Monday, January 11, 2016 | R3
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JOURNAL REPORT | INVESTING IN FUNDS & ETFS

WINNERS’ CIRCLE Mutual-Fund Yardsticks: How Fund Categories Stack Up
All returns are for periods ended December 31. All data are final. Data provided by
And the No. 1 Fund Was… Investment objective
Diversified stock & stock/bond funds

Perfomance (%)
December 4th-qtr 1-yr 5-yr* Investment objective
World stock funds

Performance (%)
December 4th-qtr 1-yr 5-yr*
Polen Growth gained 14.6%, powered by Google Large-Cap Core

Large-Cap Growth
–1.9
–1.3
6.0
7.5
–0.6
5.3
10.9
12.3
Global
International (ex-U.S.)
–2.0
–1.8
4.4
3.7
–1.4 6.3
–1.3 2.8
Large-Cap Value –2.6 5.0 –4.1 9.8 European Region –2.2 3.0 1.7 4.8
(A separate retail share class, “We tend to own [our port-
BY SUZANNE MCGEE Midcap Core –3.9 2.4 –4.3 9.0 Emerging Markets –2.6 0.5 –14.1 –4.6
POLRX, posted a 14.35% gain folio companies] for a very
Midcap Growth –2.9 3.0 –1.1 9.7 Latin American –4.3 –2.6 –29.6 –15.1
for the year; the portfolios are long period,” Mr. Davidowitz
Midcap Value –4.1 2.5 –5.0 9.6 Pacific Region –0.4 6.3 –1.8 1.7
TO END UP in the Winners’ identical except for fee struc- has said. “We believe com-
Small-Cap Core –5.1 2.5 –5.2 8.3 Gold Oriented 0.1 –1.0 –24.0 –24.4
Circle in the final quarter of tures, which account for the pound earnings growth is
Small-Cap Growth –4.3 2.8 –2.2 9.5 Global Equity Income –1.8 3.4 –3.8 5.6
2015, you needed a healthy set different returns.) what drives returns.”
Small-Cap Value –5.4 2.2 –7.0 7.6 International Equity Income –1.8 2.3 –5.8 1.1
of FANGs. Much of the credit for the Of course, earnings growth
Multicap Core –2.6 4.5 –2.2 10.1 Taxable-bond funds
Or, to be more precise, you fund’s 2015 performance, Mr. and strong stock returns
Multicap Growth –1.9 5.7 2.5 11.1 Short-Term –0.3 –0.3 0.2 1.4
needed to load up your portfo- Ficklin says, goes to the firm’s weren’t only to be found in the
Multicap Value –3.3 3.7 –5.3 9.2 Long-Term –0.9 –0.7 –1.6 4.1
lio with all four FANG stocks FANG stocks during 2015, as
Equity Income –2.0 4.5 –3.7 9.2 Intermediate Bond –0.5 –0.6 –0.1 3.2
that did well, bucking the the performance of the Polen
S&P 500 Funds –1.6 6.8 0.8 11.9 Intermediate U.S. –0.8 –0.6 –1.8 1.8
trend in a year when the Dow fund demonstrates. The sec-
Specialty Divers. Equity –1.6 0.4 –5.7 –3.7 Short-Term U.S. –0.5 –0.6 –0.1 3.2
Jones Industrial Average ond-biggest contributor to the
Balanced –1.6 2.5 –1.5 6.2 Long-Term U.S. –0.3 –1.0 –0.2 3.2
slumped 2.2% and the S&P 500 fund’s returns in 2015 was
Stock/Bond Blend –1.6 2.1 –2.4 5.3 General U.S. Taxable –0.9 –0.8 –1.8 5.0
fell 0.7%. Facebook Inc. (the Starbucks Corp., which soared
Avg. U.S. Stock Fund† –2.8 4.0 –2.1 9.1 High-Yield Taxable –2.3 –1.9 –4.1 4.1
“F”) rose 34%; Amazon.com 46%. Mr. Ficklin sees more
Inc. (“A”) soared 118%; and growth ahead for the com- Sector stock funds Mortgage –0.1 –0.3 1.0 2.9
Netflix Inc. (“N”) gained 134%. pany, which he says created Science & Technology –2.0 8.3 4.0 10.1 World Bond –1.4 –0.1 –5.1 0.6
Google (“G”, renamed Alpha- the market for premium coffee Telecommunication –1.3 5.5 0.8 7.0 Avg. Taxable-Bond Fund** –1.0 –0.8 –1.7 2.6
bet Inc. in the final quarter as drinks and continues to domi- Health/Biotechnology 0.2 8.4 8.1 21.8 Municipal-bond funds
part of the company’s reorga- nate it. In China, he says, the Utility 0.1 0.4 –9.4 7.8 Short-Term Muni -0.2 –0.5 0.2 0.6
nization, but whose stock still company is making headway Natural Resources –10.7 –2.9 –25.8 –6.0 Intermediate Muni 0.5 1.2 2.2 3.9
trades under the old GOOG helping form “new habits” in a Sector –0.1 4.7 -0.02 8.8 General & Insured Muni 0.8 1.8 3.0 5.6
and GOOGL symbols), climbed nation of tea drinkers. Real Estate 1.2 6.4 2.2 11.0 High-Yield Muni 0.9 2.2 4.3 7.0
a relatively modest 44% and Regeneron Pharmaceuti-
MIKE JURUS
47%, depending on which class cals Inc., a biopharmaceutical Stock & Bond Benchmark Indexes All total return unless noted
of stock you owned. company with an array of Perfomance (%) Performance (%)
The fund managers who products in development, is a Investment objective December 4th-qtr 1-yr 5-yr* Investment objective December 4th-qtr 1-yr 5-yr*
fared best in the final Wall Polen’s Damon Ficklin business that the Polen team Large-cap stocks Stock indexes
Street Journal Winners’ Circle finds particularly intriguing
DJIA –1.5 7.7 0.2 11.3 DJ U.S. TSM Growth –2.6 5.6 2.5 13.0
competition of 2015 turned outsize stake in Google, aka and in which it has invested
S&P 500 –1.6 7.0 1.4 12.6 DJ U.S. TSM Value –1.4 7.0 –1.5 11.3
out, unsurprisingly, to own Alphabet, which Mr. Davidow- about 5% of its assets. The
many of these stocks. itz brought to a total of about stock rose 32% for the year. “A Midcap stocks Taxable bonds
The winners also placed rel- 8.5% of the portfolio in late year or more ago, the expecta- S&P MidCap 400 –4.2 2.6 –2.2 10.7 Barclays Agg. Bond –0.3 –0.6 0.5 3.2
atively outsize bets on these 2014, at a time when the stock tion was the growth rate in its Small-cap stocks Municipal bonds
businesses and their manage- was a laggard. Until recently, core franchise for a drug Russell 2000 –5.0 3.6 –4.4 9.2 Barclays Muni. Bond 0.7 1.5 3.3 5.3
ment teams throughout the the company has been more of treating macular degeneration Broad stock market International stocks
year. While the managers of a drag on the portfolio than a would decelerate,” says Mr. DJ U.S. Total Stock Market –2.0 6.3 0.4 12.1 MSCI EAFE†† (price return) –1.4 4.4 –3.3 0.7
many diversified U.S.-stock contributor, but now its poten- Ficklin. Instead, it picked up Russell 3000 –2.1 6.3 0.5 12.2 Dow Jones World (ex. U.S.) –1.6 3.8 –4.4 1.5
funds try to diversify their tial is being reflected in its and the company pushed
*Annualized †Diversified funds only **Excludes money-market funds ††Europe, Australia, Far East
portfolios, scattering their as- market performance. “It was ahead with new products to
sets among 50 to 100 or more our biggest winner by a pretty treat rheumatoid arthritis,
companies to minimize risk wide margin,” says Mr. Ficklin. asthma and other conditions.
and maximize the chance that That is thanks to some big Largest Stock and Balanced Funds Data provided by
they will end up invested in changes within the new Alpha- No. 2 Goes to ‘Sig’
the next winner, all three of bet itself. Regeneron is one of several Total returns are for periods ended Dec. 31 . All data is final. Assets are through Nov. 30.
the top performers in our con- “One of the strikes against holdings that Polen Capital Performance data include both share prices and reinvested dividends.
test for the latest quarter Google was that they weren’t shares with this quarter’s run- Assets Performance (%)
manage concentrated portfo- always terribly forthcoming ner-up, Prudential Jennison Fund Name Symbol ($ millions) Dec. 4th-qtr 1-year 3-year* 5-year*
lios, investing in only a small with important financial infor- Select Growth Fund (SPFAX). Vanguard TSM Idx;Adm VTSAX 404,241.6 –2.0 6.3 0.4 14.7 12.2
number of companies. mation,” says Mr. Ficklin. “You Run by 82-year-old Spiros Vanguard 500 Index;Adm VFIAX 221,251.7 –1.6 7.0 1.4 15.1 12.5
The contest doesn’t dis- could tell how much they were “Sig” Segalas, a founder of Vanguard Instl Indx;Inst VINIX 197,210.1 –1.6 7.1 1.4 15.1 12.5
criminate between large or earmarking for capital spend- Jennison Associates, the $382
Vanguard Tot I Stk;Inv VGTSX 187,729.0 –2.1 2.7 –4.4 1.8 1.2
small funds, nor does it matter ing, but not what parts of million fund wrapped up 2015
SPDR S&P 500 ETF SPY 180,508.6 –1.6 7.0 1.3 15.0 12.5
whether the managers choose their business it was going to- with a return of 12.5%. Al-
to own only a tiny number of though Mr. Segalas is willing American Funds Gro;A AGTHX 147,227.5 –1.5 7.8 5.4 15.5 12.1
positions or prefer to invest to own more stocks than the American Funds EuPc;R-6 RERGX 126,954.6 –2.3 3.0 –0.5 5.5 4.0
billions of dollars in 150 or
The place to be was 20 or so positions in the Polen Fidelity Contrafund FCNTX 111,246.7 –1.3 6.3 6.5 16.1 12.7
more companies at a time. the FANG stocks— fund, it is still a relatively American Funds CIB;A CAIBX 96,041.6 –1.4 2.6 –2.9 6.0 6.5
Every diversified U.S.-stock small number—only 40 or so— American Funds Inc;A AMECX 95,538.2 –1.1 4.7 –1.5 8.1 8.3
fund with at least $50 million
Facebook, Amazon, and he is willing to make big Fidelity Sp 500 Idx;Adv FUSVX 91,885.6 –1.6 7.0 1.4 15.1 12.5
in assets and a track record of Netflix and Google. bets on his favorites.
Vanguard Wellington;A VWENX 88,740.1 –1.4 4.1 0.1 9.6 9.1
more than three years is eligi- Indeed, two FANG stocks
American Funds Bal;A ABALX 85,092.1 –1.1 5.0 1.7 10.5 9.8
ble for consideration, as long dominated the portfolio: Face-
as it is actively managed. In- ward.” With a new chief finan- book, which accounted for American Funds CWGI;A CWGIX 84,336.8 –2.2 4.0 –2.2 8.3 7.0
dex funds and exchange-traded cial officer, Ruth Porat, and a nearly 7% of its assets by De- Franklin Cust:Inc;A FKINX 80,412.1 –2.8 1.4 –7.8 3.1 5.1
funds don’t qualify, for that new corporate structure that cember, and Amazon, at 5.6%, American Funds Wash;A AWSHX 77,660.2 –1.5 7.3 –0.2 13.6 12.0
reason; neither do leveraged separates Google’s core search by the end of the year. American Funds FInv;A ANCFX 74,436.8 –1.8 8.1 3.4 14.0 11.2
funds. Hybrid funds that rely business from those that re- Messrs. Segalas and Ficklin American Funds ICA;A AIVSX 74,309.6 –2.2 5.9 –1.4 13.5 10.7
on combinations of fixed in- quire more capital, which took warn not to conclude, based iShares:Core S&P 500 IVV 70,469.2 –1.6 7.0 1.3 15.1 12.5
come and equity index prod- effect at the end of the third on the FANG stocks, that it’s Vanguard Md-Cp Idx;Adm VIMAX 67,024.9 –2.7 3.4 –1.3 14.9 11.5
ucts also don’t make the cut. quarter, that is changing, he necessary to chase after tech
Dodge & Cox Intl Stock DODFX 61,812.1 –4.9 0.8 –11.4 3.9 2.7
Laurels go to the fund that adds. He says the market also names or the latest idea from
posts the best performance for viewed the first buyback au- Silicon Valley to get above-av- American Funds NPer;A ANWPX 61,112.5 –1.5 6.8 5.3 11.3 9.0
the trailing 12 months, at the thorization, just announced, as erage growth in earnings and iShares:MSCI EAFE ETF EFA 58,439.4 –1.4 4.6 –0.9 4.9 3.5
end of each quarter. being shareholder-friendly. share performance. Both count Dodge & Cox Stock DODGX 56,975.6 –2.7 4.5 –4.5 14.0 11.6
The Polen fund’s invest- Starbucks among their win- Vanguard Sm-Cp Idx;Adm VSMAX 56,000.8 –4.2 3.1 –3.6 12.6 10.4
No. 1 fund’s strong finish ment in Google might be large, ners for the year; both also Vanguard FTSE Dev Mk ETF VEA 53,948.6 –1.8 3.9 –0.2 4.7 3.6
The winner: Polen Growth but it isn’t unusual for Mr. point to Nike Inc., up 30%, as Vanguard Health Care;Adm VGHAX 51,725.5 1.3 8.7 12.7 27.6 21.7
Fund (POLIX), managed by Ficklin and Mr. Davidowitz to an example of how a classic Vanguard REIT Idx;ETF VNQ 51,692.9 1.8 7.0 2.4 11.0 11.8
Daniel Davidowitz and Damon take outsize positions in the company can remain a winner Vanguard FTSE Em Mkt ETF VWO 51,327.1 –2.5 –0.3 –15.4 –6.8 –4.8
Ficklin, which repeated its companies that they like. At for the long haul. “It has cap- BlackRock:Gl Alloc;I MALOX 51,053.9 –1.0 2.9 –0.8 5.1 4.4
third-quarter winning perfor- any given point, they will own tured the imagination of mil-
mance in the final quarter. The only 20 companies, and since lennials,” says Mr. Segalas. Vanguard Gro Idx;ETF VUG 50,921.4 –2.4 6.5 3.3 15.8 13.1
$850 million fund ended the 1989, when they began run- American Funds AMCP;A AMCPX 47,727.9 –2.2 5.5 0.8 15.6 12.4
full year with a 14.6% gain, ning portfolios using their Ms. McGee is a writer in New First Eagle:Global;I SGIIX 47,442.8 –1.8 4.5 –0.7 5.9 6.0
beating its closest rivals by strategy, they have owned a England. She can be reached Vanguard Windsor II;Adm VWNAX 46,752.4 –2.5 4.5 –3.1 12.1 11.1
more than 2 percentage points. total of only 108 companies. at reports@wsj.com. Vanguard PRIMECAP;Adm VPMAX 46,191.0 –0.4 8.8 2.6 19.5 14.1
T Rowe Price Gro Stk PRGFX 46,174.8 –0.4 8.6 10.9 18.9 14.6
Vanguard Ext Mk Id;Inst+ VEMPX 44,332.7 –3.9 3.2 –3.2 13.0 N.A.
The Score at the Quarter Harbor:Internatl;Inst HAINX 44,099.0 –2.3 2.9 –3.8 1.6 2.4
Stock funds rose 4% in the fourth quarter, so still haven't fallen for two quarters since the 2008-09 PowerShares QQQ Trust 1 QQQ 43,058.5 –1.5 10.2 9.5 21.3 16.8
financial crisis. But the funds dropped 2.1% overall for 2015. Average total return (U.S. diversified funds). Fidelity Low-Prcd Stk FLPSX 41,497.4 –2.7 1.6 –0.6 12.9 11.2
20% Vanguard Wellesley;Adm VWIAX 41,238.2 –0.8 2.6 1.4 6.2 7.7
15 Fidelity Gro Company FDGRX 41,128.0 –1.0 9.4 7.8 19.3 15.2
10
Vanguard Ins T StMk;Ins+ VITPX 39,809.1 –2.0 6.3 0.5 14.8 12.3
Vanguard Value Idx;ETF VTV 37,861.1 –1.0 7.0 –0.9 14.3 11.7
5 0.03
American Funds Mut;A AMRMX 35,758.0 –1.9 5.4 –2.8 11.9 10.5
0 0.29 MFS Value;I MEIIX 35,370.3 –2.6 5.6 –0.5 14.3 11.7
–0.32 iShares:Russ 1000 Gr ETF IWF 31,122.6 –1.5 7.3 5.5 16.6 13.3
–5
Fidelity Sp Tot Mk;Adv FSTVX 31,091.3 –2.0 6.3 0.5 14.7 12.1
–10 T Rowe Price BC Gro TRBCX 31,007.3 –0.5 9.9 11.2 19.8 15.6
–15 Vanguard Tgt Ret2025;Inv VTTVX 30,612.6 –1.5 3.1 –0.9 7.9 7.2
–20 Oppenheimer Dev Mkts;Y ODVYX 30,512.7 –2.2 4.7 –13.8 –3.7 –2.3
iShares:Russ 2000 ETF IWM 29,114.2 –5.0 3.7 –4.3 11.7 9.2
–25
Oakmark Internatl;I OAKIX 28,456.5 –2.7 5.2 –3.8 5.6 5.5
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Fidelity Balanced FBALX 28,446.6 –1.5 4.3 0.4 10.1 8.9
Source: Lipper THE WALL STREET JOURNAL. Harbor:Cap Apprec;Inst HACAX 27,786.2 –1.5 8.1 11.0 18.9 14.4
American Funds SMCP;A SMCWX 27,752.6 –1.9 3.2 2.6 10.5 7.1
Tracking Exchange-Traded Portfolios Fidelity Adv New Ins;I FINSX 27,547.7 –1.9 5.5 2.6 14.3 11.5
Performance figures are total returns for periods ended Dec. 31; for largest exchange-traded funds and iShares:Core S&P Md-Cp IJH 27,202.3 –4.2 2.6 –2.2 12.7 10.6
other portfolios, ranked by asset size. iShares:Russ 1000 Vl ETF IWD 27,055.7 –2.2 5.6 –4.0 12.9 11.1
Assets Volume Expense Launch Performance (%)
Fund Symbol ($ billions) (000s) ratio date December 4th-qtr 1-year
Vanguard Tgt Ret2020;Inv VTWNX 26,985.7 –1.4 2.7 –0.7 7.2 6.9
SPDR S&P 500 ETF SPY 182.04 113,998.0 0.09 01/22/93 –1.6 7.0 1.3 Vanguard Bal Index;Adm VBIAX 26,660.9 –1.4 3.4 0.5 9.3 8.7
iShares Core S&P 500 ETF IVV 70.35 6,229.6 0.07 05/15/00 –1.6 7.0 1.3 Vanguard Div Gro;Inv VDIGX 26,216.6 –1.0 6.9 2.7 14.7 12.8
iShares MSCI EAFE ETF EFA 60.15 31,818.9 0.33 08/14/01 –1.4 4.6 –0.9 MFS Intl Value;I MINIX 25,627.5 –0.8 5.5 6.8 11.4 9.6
Vanguard Tot Stk Mkt Idx ETF VTI 57.41 3,652.6 0.05 05/24/01 –2.0 6.3 0.4 Fidelity Puritan FPURX 25,568.7 –1.2 5.2 1.8 10.7 9.2
PowerShares QQQ Nasdaq 100 QQQ 43.05 29,529.5 0.20 03/10/99 –1.5 10.2 9.5 T Rowe Price MC Gr RPMGX 25,360.4 –2.0 5.2 6.6 18.2 13.2
Vanguard 500 Index ETF VOO 40.44 419.3 0.05 09/07/10 –1.6 7.0 1.4
Franklin Mut Gl Disc;A TEDIX 25,297.7 –2.7 3.8 –3.6 8.2 6.9
Vanguard FTSE Emerging Markets ETF VWO 34.45 18,735.4 0.15 03/04/05 –2.5 –0.3 –15.4
T Rowe Price Eq Idx500 PREIX 25,227.3 –1.6 7.0 1.1 14.8 12.3
iShares Russell 1000 Growth ETF IWF 31.59 2,430.6 0.20 05/22/00 –1.5 7.3 5.5
T Rowe Price Ret:2020 TRRBX 25,194.8 –1.3 3.2 –0.3 7.5 7.2
iShares Core US Aggregate Bond ETF AGG 30.57 3,406.1 0.07 09/22/03 –0.3 –0.6 0.5
Fidelity Str Adv Core FCSAX 24,944.8 –1.7 6.5 0.1 14.2 11.1
Vanguard FTSE Developed Markets ETF VEA 29.29 11,420.1 0.09 07/20/07 –1.8 3.9 –0.2
T Rowe Price Cap App PRWCX 24,813.2 –1.3 4.5 5.4 13.2 11.4
iShares Russell 2000 ETF IWM 27.69 39,033.9 0.20 05/22/00 –5.0 3.7 –4.3
Vanguard REIT ETF VNQ 27.51 3,292.4 0.12 09/23/04 1.8 7.0 2.4 T Rowe Price Ret:2030 TRRCX 24,653.5 –1.4 4.2 -0.02 9.3 8.2
iShares Russell 1000 Value ETF IWD 27.36 2,583.7 0.20 05/22/00 –2.2 5.6 –4.0 Vanguard FTSE xUS;ETF VEU 24,129.6 –2.2 2.6 –4.7 1.6 1.3
Vanguard Total Bond Market ETF BND 27.26 2,419.7 0.07 04/03/07 –0.4 –0.6 0.4 T Rowe Price Eq Inc PRFDX 24,089.4 –2.3 5.7 –6.7 9.2 8.7
iShares Core S&P Mid-Cap ETF IJH 26.47 1,390.1 0.13 05/22/00 –4.2 2.6 –2.2 Vanguard Div App Idx;ETF VIG 23,642.4 –0.8 6.1 –2.0 11.7 10.5
*Expense charge is a maximum of 8 cents a share †Assets are estimated N.A.= Not applicable, fund is too new. Vanguard Tgt Ret2035;Inv VTTHX 23,414.5 –1.7 3.9 –1.3 9.2 7.9
Note: Total returns are based on the change in the net asset values, not changes in market prices. Net asset values can vary from market prices, which
therefore can reflect a premium or discount to the net asset values. Source: Thomson Reuters Note: For funds with multiple share classes, only the largest is shown *Annualized N.A.=Not applicable or not available

SUSTAINABLE INVESTING
Renewable Energy
‘Do Good’ Investing Turns Corner Is a ‘Green Bubble,’
Sustainable investing is no longer a niche, but questions remain Says This Financier
based on their values. Advisors, an asset-manage- green bond, an ESG security or sidies within a reasonable
BY ALEX DAVIDSON BY TANZEEL AKHTAR
And thanks to a growing ment firm that helps clients a sustainable mutual fund,” time period—about seven to
body of data, there is evidence create portfolios aligned with says James Dearborn, head of 10 years. I think that gives
THE YEAR 2015 might well that those who want to invest their environmental, social municipal investing at Colum- SUSTAINABLE investing and us a better bang for the buck
have been when sustainable in companies that pollute less, and governance views. bia Threadneedle Investments. clean energy are hot topics, than just spraying it across
investing became sustainable. better manage resources or “When you have some of “Investors don’t know who to but one Danish financier is the whole spectrum.
Long viewed as a niche as- prioritize workers’ rights can the largest players in the fi- trust and how to differentiate warning that people might One of the arguments that
set class catering to wealthy do just as well financially as nancial-services sector taking between sincere sustainable be getting carried away. people say against that is,
individuals and institutions those who don’t. ESG seriously, it sends a pow- strategies and ones that are Per Wimmer, a former “What about innovation?
that wanted to avoid contro- “If you invest sustainably, erful signal to the markets,” more marketing than reality.” Goldman Sachs banker and Shouldn’t we try something
versial industries such as to- you’ve got just as good a says Fiona Reynolds, manag- the founder of Wimmer Fi- new from time to time?” I say
bacco and firearms, sustain- chance of beating the market ing director of the Principles Maze of marketing nancial LLP, a London-based yes, but those research-and-
able investing seemed to turn or not” as anyone, Mr. Streur of Responsible Investment, or To that end, Mr. Dearborn corporate-ad- development dollars are better
JEWEL SAMAD/GETTY IMAGES

a corner last year. Mainstream PRI, a United Nations-sup- worked with sustainability re- visory firm put into universities, as op-
financial firms such as Black- ported initiative whose signa- search firm Sustainalytics to specializing posed to a company that gives
Rock Inc. and Goldman Sachs Competitive Returns tories pledge to incorporate create Columbia U.S. Social in natural reit a go and then goes bust.
Group Inc. jumped into the Performance of 'sustainable' elements of sustainability into Bond (CONAX), a fund sources, fore-
fray, launching investment (or SRI) mutual funds versus their financial decisions. launched in March that aims sees a “green WSJ: In your book “The
products that take into ac- ones that aren't Ms. Reynolds says investors to emphasize the social bene- bubble” that Green Bubble,” you highlight
count environmental, social SRI Funds who have signed on to the ini- fits of municipal bonds. Mr. could have infrastructure problems in-
10%
and governance (ESG) factors. Non-SRI Funds tiative manage about $59 tril- Dearborn says he hopes that similar con- volved in large-scale green-
At the same time, research 8 lion, or about half of all insti- by using municipal bonds, Per Wimmer sequences to energy projects in the U.S.
from Morgan Stanley and oth- 6 tutional assets world-wide, a which have a natural tie-in the dot-com MR. WIMMER: There are a
ers helped dispel concerns 4 jump of about 37% for 2015. with social investing in that and housing bubbles. number of challenges that
that investors have to sacrifice 2 they are often used to fund The Wall Street Journal green energy faces, and one
returns to do good.
0
Questions remain things like hospitals, schools asked the 47-year-old Mr. [involves] infrastructure,
Yet many challenges remain What is a sustainable in- and hydroelectric plants, he Wimmer, who is also a phi- meaning that if you were to
before sustainable investing is –2 vestment? That question re- can cut through the maze of lanthropist and would-be pri- target, say, 20% green en-
truly open to any investor. One –4 mained unanswered in 2015 in marketing around sustainable vate astronaut, about the dis- ergy including wind farms in
of the biggest is that there 1-year 3-year 5-year 10-year the absence of guidance from investments. tortions he sees in the clean- the U.S., you would have to
isn’t yet one agreed-upon defi- return return return return regulators. An October ruling Mr. Dearborn’s fund is still energy market and where he build an awful lot of trans-
nition of what makes an in- Source: © 2015 Morningstar, Inc. by the U.S. Labor Department, small—it has attracted about thinks opportunities are. mission grid. Somebody is
vestment “sustainable.” THE WALL STREET JOURNAL. which cleared the way for $20 million in assets so far— Here are edited excerpts: going to have to pay for it—
managers of pension funds but it was one of the 30 new the taxpayer, perhaps?
‘End of the beginning’ says. “That question has been and 401(k) plans to consider ESG mutual funds and ETFs WSJ: What are the main is-
“I think we’re at the end of put to bed, and that happened ESG factors in their invest- launched through October. sues behind the so-called WSJ: What green-investment
the beginning, if you will,” during 2015.” ment decisions, was a water- “I have been in the industry bubble you see forming in opportunities might be par-
says John Streur, president Some financial giants saw shed moment for sustainable for 18 years, and yet I have green energy? ticularly promising?
and chief executive of Calvert an opportunity and showed investing. But the ruling didn’t seen more interest and uptake MR. WIMMER: Very simply MR. WIMMER: One is effi-
Investments Inc., one of the their hand last year. BlackRock consolidate the different defi- [related to sustainable invest- put, for green energy to be ciency technology such as
original sustainable-investing in October launched Black- nitions that portfolio manag- ments] over the past 18 truly sustainable, it must be LED lighting that could save
firms. “We can look at 2015 Rock Impact U.S. Equity ers have for “sustainable.” months than I saw over the commercially sustainable. you 99% off your consump-
and say this was a transforma- Fund (BIRAX), aimed at inves- There is no audit system to previous 16½ years,” says Jo- The reality today is that tion compared with a normal
tive year for this investment tors who want to make money assess what companies report seph Keefe, president and when it comes to politicians lightbulb. Also, smarthouse
discipline. We’ve really turned and do good. The fund has at- as “sustainable,” and compa- chief executive of Pax World allocating subsidies, it seems grids and big hydro dams,
the corner.” tracted $20 million in assets. nies aren’t required to disclose Funds, a sustainable-investing like they are being allocated which we love because they
Mr. Streur, who took the The launch came eight their ESG behaviors and asso- fund group. “Sustainable in- almost religiously across the operate 24/7, so it is dollars
helm at Calvert in 2015, says months after BlackRock hired ciated risks. Collectively these vesting is a way to invest in board. As long as there is a per megawatts, which is ac-
last year a consensus evolved: Deborah Winshel, previously challenges pose an enormous companies that are part of the green element, then [politi- tually quite competitive.
The use of screens to avoid president and chief operating hurdle to investors and asset solution rather than part of cians believe] it is fine and The last big area is nu-
compromising sectors, such as officer of the Robin Hood managers who want financial the problem, and while it is deserves funding from tax clear, which is controversial,
tobacco, firearms, alcohol and Foundation, an antipoverty products that deliver social re- still early in the game, I be- dollars. I argue that is a lit- but if the world is keen to
gambling, became outdated. group in New York, to run a turns, industry insiders say. lieve it is a winning invest- tle unsophisticated. move to a CO2-free arena, nu-
Now, the amount and avail- new unit at the firm dedicated There “is a growing aware- ment strategy.” We have got to look at clear is part of the solution.
ability of ESG data means in- to socially conscious investing ness that there needs to be re- supporting and subsidizing
vestors can judge companies called BlackRock Impact. liable and established stan- Mr. Davidson is a writer in the technologies that stand a Miss Akhtar is a writer in
individually, rather than hav- Goldman Sachs, meanwhile, dards and/or third-party San Francisco. He can be chance at becoming commer- London. She can be reached
ing to eliminate whole sectors in July bought Imprint Capital arbiters of what is and isn’t a reached at reports@wsj.com. cially independent from sub- at reports@wsj.com.
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Category Kings in 22 Realms Data provided by Science and Technology European Region
Top-performing funds in each category, ranked by one-year total Assets Total return (%) Assets Total return (%)
($ millions) 4th-qtr (%) December 1-yr 5-yr* ($ millions) 4th-qtr (%) December 1-yr 5-yr*
returns (changes in net asset values with reinvested distributions)
as of December 31; assets are as of November 30. All data are final. Frst Tr:DJ Internet Idx 4810.6 12.9 –2.1 21.8 16.9 iShares:MSCI Denmark Cp 71.8 6.7 2.2 21.0 N.A.
PowerShares NASD Intrt 281.4 15.9 –1.8 19.4 18.4 iShares:MSCI Ireland Cp 170.0 7.5 2.0 19.9 17.3
ARK Web x.0 13.2 10.7 –1.5 15.2 N.A. iShares:MSCI Belgium Cap 170.8 10.9 2.4 13.4 10.4
Best and Worst Fidelity Sel IT Svcs 2,093.9 5.2 –3.4 13.1 17.7 Royce Fd:Euro SmCp;Svc 22.5 4.4 0.8 12.8 2.8
Total return for the best- and worst-performing stock, bond and iShares:N Amer Tech-Soft 1,012.8 9.6 –1.7 12.0 12.5 iShares:MSCI Ger Sm-Cap 26.6 5.1 1.8 11.6 N.A.
mixed mutual-fund categories; for period ended December 31; BlackRock:Sci&Tch Op;A 289.4 9.4 –0.4 11.2 10.8 Fidelity Nordic 419.6 9.7 1.9 11.5 8.9
ranked by 4th-quarter returns. USAA Sci & Tech;Fund 1,010.8 10.0 –0.8 11.0 17.2 DFA Cont Small Co;I 282.2 5.9 1.2 11.5 6.0
Jacob Internet Fund;Inv 42.8 10.1 –3.6 11.0 9.8 iShares:MSCI Europe SC 55.0 5.3 0.5 10.9 6.2
Best Performers Columbia:Gl Tech Gr;Z 490.5 9.7 –2.1 10.5 13.9 Deutsche MSCI Eur Hdg Eq 62.8 6.5 –5.3 9.9 N.A.
Fund Fourth-quarter 12-month Fidelity Sel SW & IT Svc 3,277.9 12.6 –1.2 10.5 16.9 iShares:Curr Hgd Euro 1,979.5 5.3 –6.3 8.7 N.A.
Health/Biotechnology 8.4% 8.1% Category Average: 464.7 8.9 –2.2 4.7 10.8 Category Average: 602.6 3.1 –2.2 1.8 4.8
Science & Technology 8.3 4.0
Number of Funds: 165 165 159 143 Number of Funds: 167 171 144 86
Large-Cap Growth 7.5 5.3
S&P 500 6.8 0.8
Real Estate 6.4 2.2
Pacific Region 6.3 –1.8
Large-Cap Core 6.0 –0.6 General and Insured Mortgage
Assets Total return (%) Assets Total return (%)
Multi-Cap Growth 5.7 2.5 ($ millions) 4th-qtr (%) December 1-yr 5-yr* ($ millions) 4th-qtr (%) December 1-yr 5-yr*
Mrkt Vctrs:CEF Muni Inc 56.4 5.9 2.8 7.7 N.A. Voya:Securitized Cr;P 124.9 –0.1 –0.1 4.6 N.A.
Worst Performers
BlackRock BATS:Srs E 97.4 3.8 1.7 6.5 N.A. Brown Adv Mort Sec;Ins 285.2 –0.4 –0.1 2.4 N.A.
Fund Fourth-quarter 12-month
Robinson Tx Adv Inc;Inst 65.3 6.6 2.6 5.6 N.A. Frst Tr IV:LD Mtg Op ETF 10.0 1.0 0.2 2.4 N.A.
Natural Resources –2.9% –25.8% SEI Tx Ex:Tax-Adv Inc;A 1,057.0 3.0 1.0 5.5 6.8 DoubleLine:Tot Rtn;I 51,071.9 –0.5 –0.2 2.3 5.5
Latin American –2.6 –29.6 Oppenheimer Ro AMT-F;A 2,056.1 2.7 0.7 5.2 9.5 JPMorgan:Mtge Secs;R6 2,601.9 –0.7 –0.3 2.2 3.6
High Yield Taxable –1.9 –4.1 Clearwater Inv:Tax-Ex Bd 506.4 2.6 1.3 4.7 7.5 WA Mtge Back Sec;A 820.5 –0.8 –0.3 2.0 4.8
Managed Futures –1.0 –0.4 Nuveen Str Muni Opptys;I 15.4 2.4 1.3 4.7 N.A. PIMCO:Mtg-Backed;Inst 216.8 –0.1 –0.1 1.8 3.4
Long-Term U.S. –1.0 –0.2 Deutsche Muni Inf Rev Bd 24.7 3.0 1.5 4.7 N.A. Victory:INCORE Fd Inc;I 899.4 –0.9 –0.2 1.7 N.A.
Gold Oriented –1.0 –24.0 Pioneer AMT-Free Mun;A 1,015.2 2.2 1.0 4.5 7.2 Federated Mortgage Str 78.3 –0.4 –0.2 1.7 2.8
All Taxable Bond –0.8 –1.7 WellsFargo:CreBldr Srs M 340.3 2.6 1.0 4.4 8.1 Voya:GNMA Income;A 1,069.0 –0.2 –0.1 1.6 3.0
General U.S. Taxable –0.8 –1.8 Category Average: 394.9 1.8 0.8 3.0 5.6 Category Average: 557.1 –0.3 –0.1 1.0 2.9
Source: Lipper Number of Funds: 282 282 259 208 Number of Funds: 192 193 181 143
Large-Cap Core Large-Cap Growth Large-Cap Value

Assets Total return (%) Assets Total return (%) Assets Total return (%)
($ millions) 4th-qtr (%) December 1-yr 5-yr* ($ millions) 4th-qtr (%) December 1-yr 5-yr* ($ millions) 4th-qtr (%) December 1-yr 5-yr*
T Rowe Price US LCC 189.4 7.7 –0.4 8.2 13.5 Polen Growth;Inst 766.6 7.8 –1.1 14.6 14.1 Barclays ETN+ShillerCAPE 29.3 9.4 0.04 4.7 N.A.
Indep Franch Prtnrs USEq 1,010.1 9.0 –0.4 7.3 N.A. Morg Stan I:Advtg;I 40.4 8.4 –0.6 12.6 15.2 DoubleLine:Sh Enh CAPE;I $617.9 8.8 –0.4 4.7 N.A.
Hartfd:Disc Eq HLS;IA 1,514.2 6.6 –0.8 6.8 14.9 Pru Jenn Select Gro;A 381.7 9.8 –1.1 12.5 14.1 Touchstone:Focused;Y 1,257.4 6.2 –2.5 3.3 13.2
Hartfd:Core Equity;A 635.2 6.4 –0.8 6.6 14.4 Janus Forty Fund;I 2,407.4 7.7 –1.6 12.2 13.3 Natixis:VN Select;Y 99.7 6.2 –0.6 2.8 N.A.
Clipper Fund 1,229.0 8.4 –1.8 6.4 12.2 TCW:Select Equities;I 1,940.1 9.6 –0.6 12.2 13.4 Transam:Large Cp Val;I2 1,907.4 8.8 –2.1 2.5 12.0
J Hancock II:Fdm LCC;I 60.7 7.6 –3.3 6.4 N.A. Alger Inst:Cap Apprec;I 3,903.2 14.2 4.4 12.1 14.9 SPDR MFS Sys Value Eqty 2.9 4.9 –2.5 2.3 N.A.
PowerShares Russ T200 PG 132.2 7.4 –0.4 6.2 N.A. Transam:Cap Growth;I2 1,482.3 9.8 –0.3 12.0 N.A. Frost Value Eqty;Inst 344.4 7.4 –1.2 1.8 9.2
J Hancock LgCp Eqty;I 3,922.0 7.7 –3.2 6.1 10.9 Dunham:Focused LC Gro;N 66.5 8.2 –1.2 12.0 N.A. Hennessy:Total Rtn;Inv 68.6 7.1 0.3 1.0 8.4
iShares:MSCI USA Min Vol 6,911.9 6.3 0.5 5.5 N.A. Edgewood Growth;Inst 5,128.2 9.6 –1.1 11.6 16.4 Cullen:High Div Eqty;I 2,023.4 9.1 –0.2 0.4 11.1
AB Core Opptys;A 161.6 7.3 –0.5 5.4 13.9 Morg Stan I:Growth;A 3,668.0 9.3 –0.4 11.5 14.4 Vanguard MC Val;ETF 1,258.5 7.6 –0.6 –0.2 11.7
Category Average: 801.6 6.0 –1.9 –0.6 10.9 Category Average: 1,203.5 7.5 –1.3 5.3 12.3 Category Average: 864.0 4.9 –2.7 –4.2 9.8
Number of Funds: 915 923 875 707 Number of Funds: 716 720 668 545 Number of Funds: 554 558 513 409
Multicap Core Multicap Growth Multicap Value

Sterling:Spec Opp;Inst 1008.0 5.6 –1.8 8.1 12.2 Berkshire:Focus N.A. 8.6 –1.7 13.3 12.3 AQR:Lg Cap Def Style;I 347.9 5.3 –0.6 6.5 N.A.
SPDR MFS Sys Gro Eqty 9.4 7.3 –1.8 8.0 N.A. Brown Adv Sust Gro;Adv 303.3 6.4 –1.6 12.6 N.A. Invesco Dvsfd Div;A 11,977.7 2.6 –1.8 1.8 11.4
Lazard:US Eq Conc;Inst 776.7 6.9 1.1 7.0 13.7 TANAKA:Growth Fund;R 17.9 6.8 –4.0 12.2 11.6 Frst Tr:Val Line Div Idx 1,176.1 5.4 –1.2 1.2 12.5
Deutsche Core Eqty;S 3,333.8 7.3 –1.8 5.1 13.2 Hartfd:Gro Opp HLS;IA 2,788.4 8.5 –0.5 11.7 14.9 RBB:BP All-Cap;Inst 1,172.9 6.5 –2.5 1.0 12.5
Pin Oak Equity 103.4 8.4 –3.4 4.5 13.1 Fidelity OTC 13,453.9 13.3 1.5 10.9 16.0 Perkins Sel Value;I 79.9 4.7 –2.8 0.2 N.A.
Bullfinch Unrestricted N.A. 10.5 –0.8 4.4 10.9 Hartfd:Growth Opps;I 5,255.0 8.1 –0.6 10.8 14.4 Boyar Value Fund 24.6 4.6 –2.0 –0.1 11.9
Glenmede:Lg Cap Gro 2,024.3 6.7 –1.7 4.1 15.4 Deutsche LC Foc Gr;S 228.8 9.3 –0.5 10.0 12.0 Symons Value Inst 79.0 2.0 –0.2 –0.4 7.5
PowerShares S&P500 LowVl 5,123.6 7.8 –0.1 4.1 N.A. JPMorgan:Gro Advtg;R6 6,336.6 7.1 –1.0 9.2 N.A. VictoryII:CEMP US EQI 97.7 4.0 –1.8 –0.5 N.A.
Schwab Cap:Lg-Cap Gro 251.3 6.7 –2.0 3.8 12.3 RBB:Dynamic US Gr;I 86.4 1.0 –2.4 9.1 12.7 Catalyst/EqComp Buybck;C 12.0 7.3 –3.1 –0.7 N.A.
Upright Growth Fund 9.1 4.6 –2.5 3.7 14.3 Virtus:Strat Growth;A 462.4 9.6 –2.0 9.0 11.2 LSV US Mgd Vol;Inst 26.3 3.4 –0.6 –0.8 N.A.
Category Average: 1,109.0 4.5 –2.6 –2.2 10.1 Category Average: 559.5 5.7 –1.9 2.5 11.1 Category Average: 418.8 3.7 –3.3 –5.2 9.2
Midcap Core Midcap Growth Midcap Value

Eaton Vance AC SMID;I 6705.3 7.4 –2.4 9.7 13.6 T Rowe Price I MCEq Gr 5212.8 5.4 –2.1 6.9 13.7 Direxion:All Cp Ins Sent 142.8 7.1 –0.6 3.5 N.A.
PowerShares S&P MidCp LV 115.5 5.6 –2.2 5.5 N.A. T Rowe Price MC Gr 25,360.4 5.2 –2.0 6.6 13.2 Transam:MdCp Val Opps;I2 636.3 3.3 –2.2 2.2 N.A.
Capital Mgmt:Md-Cp;Inst 20.1 5.4 –2.1 2.8 8.9 BlackRock:MC Gro;A 521.6 4.8 –1.9 6.5 12.1 Deutsche MdCp Val;S 326.8 4.2 –4.7 2.1 11.3
CB Mid Cap;A 1,714.4 4.3 –2.8 2.3 11.5 GW:TRP MC Gro;Init 1,022.0 5.1 –2.0 6.5 12.9 Nuance Mid Cap Val;Inst 37.1 5.0 –3.8 1.6 N.A.
Schroder:US Smid Op;Inv 59.8 2.2 –3.8 1.7 10.8 Oppenheimer Disc MCG;A 740.9 4.0 –1.4 6.1 11.8 Diamond Hill S/Md Cp;Y 1,200.9 1.3 –4.9 1.4 N.A.
Dreyfus Actv MidCap;A 541.1 4.8 –3.2 1.7 12.2 MassMutual Sel:MCGII;I 2,821.2 4.7 –2.1 6.0 13.0 Victory:Estab Val;A 2,719.9 1.9 –5.8 0.7 11.2
Hartfd:MidCap HLS;IA 3,682.4 2.5 –4.5 1.6 11.7 Buffalo:Discovery 923.9 5.1 –1.6 5.6 13.7 Hennessy:Crnst MdCp;Inv 1,062.6 –5.2 –4.5 0.02 12.4
Scout Mid Cap 1,446.4 3.6 –2.2 1.4 9.9 WM Blair:Sm-Md Cp Gr;I 1,176.5 2.9 –2.0 4.7 12.7 WisdomTree:MdCp Div 1,539.5 5.0 –2.2 –1.0 12.9
Champlain Mid Cap;Adv 765.8 5.5 –2.7 1.4 11.3 MFS Mid Cap Growth;R5 1,820.1 4.7 –2.6 4.6 N.A. Westcore:MC Val Div;Rtl 54.6 2.4 –3.8 –1.5 10.3
Prospector:Opportunity 87.6 3.7 –3.7 1.3 9.6 PRIMECAP:Odyssey Ag Gr 6,664.3 10.9 1.0 4.6 17.9 Vanguard MC Val Idx;ETF 8,888.3 3.9 –2.8 –1.8 12.3
Category Average: 762.1 2.4 –3.9 –4.3 9.0 Category Average: 457.4 3.0 –2.9 –1.1 9.7 Category Average: 396.1 2.5 –4.1 –5.0 9.5
Small-Cap Core Small-Cap Growth Small-Cap Value

Aberdeen:Sm Cap;I 395.4 7.1 –3.0 8.6 12.3 Nationwide:Geneva SCG;IS 295.5 3.1 –3.4 10.1 12.2 Undsc Mgr:Beh Val;Inst 3312.7 5.4 –5.0 3.4 12.9
Wasatch:Micro Cp Val;Inv 166.5 3.5 –1.4 7.2 10.8 Oberweis:Emerg Growth 59.3 4.2 –0.6 10.0 8.5 Nuveen Sm Cap Value;I 186.0 3.9 –5.3 3.0 11.5
Hancock Hrzn US SC;Inst 11.6 2.8 –5.4 3.3 N.A. Brown Cap Sm Co;Inv 2,796.9 9.2 –3.0 8.8 14.3 PowerShares S&P SmCp LV 139.2 5.4 –3.4 2.8 N.A.
Touchstone:Sm Cp Gr;Y 501.9 3.2 –3.0 2.7 9.5 Brown Adv SC Gro;Inv 287.5 8.7 –2.1 8.1 11.1 Queens Road SC Val 81.7 3.9 –2.9 –0.1 6.8
James Adv:Micro Cap 30.3 5.3 –5.6 2.6 10.5 Conestoga Small Cap;Inv 657.7 8.8 –3.7 8.0 11.5 Victory:Sm Co Opp;I 2,954.9 2.7 –5.7 –0.4 10.2
AlphaOne Mic Cp Eq;I 146.3 2.9 –6.2 2.5 N.A. Delaware Pld:Foc Smid Gr 53.2 6.1 –0.6 7.4 13.0 J Hancock II:SCV;NAV 374.1 5.1 –5.9 –1.0 10.3
Acuitas US Microcap;Inst 41.2 3.9 –4.0 2.5 N.A. Lazard:US SC Eq Gr;Inst 15.4 1.1 –4.7 7.4 N.A. Madison:Small Cap;Y 91.9 5.3 –5.9 –1.3 10.0
Fidelity Sm Cap Stock 2,123.2 4.1 –3.7 2.4 6.3 Delaware Smd Cp G;A 1,342.9 6.0 –0.5 7.1 13.1 Fidelity Sm Cap Val 2,876.8 2.1 –4.9 –1.6 10.7
Golden Sm Cap Core;Inst 123.8 0.6 –6.3 1.7 12.3 Nationwide:Sm Co Gro;IS 185.0 9.4 –3.0 6.9 N.A. Emerald Sm Cap Val;Inst 18.4 1.8 –5.0 –1.8 N.A.
Cardinal SmCap Val;Instl 10.6 5.3 –3.2 1.5 N.A. Oberweis:Micro-Cap 45.1 3.1 –4.4 6.4 10.1 Perritt Ultra MicroCap 57.7 5.2 –0.8 –2.0 7.2
Category Average: 353.4 2.5 –5.1 –5.1 8.3 Category Average: 304.7 2.8 –4.3 –2.2 9.5 Category Average: 339.6 2.2 –5.4 –7.0 7.6
Health and Biotech Intermediate Muni S&P 500 Funds

ALPS Medical Break 170.8 13.7 –1.5 28.1 N.A. PIMCO:FISH Series TE 92.2 3.1 1.3 5.2 N.A. SS Inst Inv:Eq 500 Id II 554.5 8.7 –0.1 2.8 N.A.
PowerShares S&P SC H Cre 252.2 10.5 –0.4 20.3 21.7 Transam:Enhanced Muni;I 435.0 1.7 0.8 4.9 N.A. SEI Inst Inv:S&P500;A 3,132.7 7.0 –1.5 1.4 N.A.
ETFis BioSh Biotech Prod 23.7 11.4 –2.6 17.6 N.A. Eaton Vance TABS5-15MB;I 95.6 2.3 1.1 4.6 8.7 GE Inst:S&P 500 Idx;Inv 29.7 7.0 –1.6 1.4 12.4
Eventide Hlthcare & LS;A 401.1 17.5 –3.3 14.9 N.A. AMG:AMG GW&K Mun Bd;I 792.3 1.6 0.8 3.9 5.5 DFA US Large Co;I 5,827.7 7.0 –1.6 1.4 12.5
Fidelity Sel Bio Tech 15,086.8 12.8 –0.7 13.7 32.6 Oppenheimer Ro Int Trm;A 153.5 2.2 1.1 3.8 4.5 Vanguard Instl Indx;Inst 197,210.1 7.1 –1.6 1.4 12.5
SPDR S&P Biotech 2,295.1 13.0 –2.7 13.6 27.8 Mrkt Vctrs:Intm Muni Idx 1,234.3 2.0 1.0 3.7 5.4 Vanguard 500 Index;Adm 221,251.7 7.0 –1.6 1.4 12.5
T Rowe Price Hlth Sci 14,107.6 7.4 2.1 13.0 27.0 BlackRock:St Muni O;I 3,462.9 2.9 1.2 3.6 5.9 Fidelity Sp 500 Idx;Adv 91,885.6 7.0 –1.6 1.4 12.5
AllianzGI:Hlth Sci;A 206.3 5.6 1.3 11.7 18.4 Hartfd:Muni Opps;A 498.2 1.7 0.8 3.3 5.5 TIAA-CREF:S&P500 Idx;Ins 2,930.7 7.0 –1.6 1.4 12.5
iShares:Nasdaq Biotech 8,426.5 11.8 1.2 11.5 29.6 Eaton Vance TABS IT MB;I 406.7 1.8 0.8 3.3 5.5 SPDR S&P 500 ETF 180,508.6 7.0 –1.6 1.3 12.5
Delaware Healthcare;A 509.0 9.8 0.5 11.4 19.2 Fidelity Muni Inc 2023 32.2 1.8 0.9 3.3 N.A. iShares:Core S&P 500 70,469.2 7.0 –1.6 1.3 12.5
Category Average: 1,182.7 8.4 0.2 8.1 21.8 Category Average: 458.3 0.2 –0.5 –2.0 2.4 Category Average: 6,198.0 6.8 –1.6 0.8 11.9
High-Yield Real Estate Telecommunication

Aquila 3 Peaks HI;Y 176.7 1.2 –0.2 3.8 4.8 iShares:Res Rl Est Cap 319.8 7.8 3.8 11.3 13.8 T Rowe Price Media/Tele 3614.3 10.8 –1.6 12.0 15.0
Mrkt Vctrs:EM Hi Yld Bd 287.0 1.3 –2.6 3.0 N.A. Cole Real Est Inc Str 134.1 1.8 0.7 9.9 N.A. Putnam Gl Telecomm;A 33.4 5.4 –0.7 5.4 11.4
Guggenhm Blt 2016 Hi Yld 705.1 0.7 –0.4 2.8 N.A. Cohen&Steers RE Sec;I 1,388.1 8.0 1.6 7.6 13.3 Wireless Fund 3.9 6.1 –2.7 3.6 7.0
WellsFargo:ST HY B;Inst 1,410.5 0.3 –0.2 2.3 N.A. Eaton Vance Real Est;A 36.6 7.5 1.8 6.4 12.1 Fidelity MSCI Telecom Sv 72.3 7.3 –0.1 3.3 N.A.
PowerShares Gl ST HY Bd 31.5 –0.5 –1.7 2.3 N.A. iShares:C&S REIT ETF 3,589.9 8.3 3.2 6.0 12.1 Vanguard Tele Indx;ETF 888.7 7.3 –0.3 2.7 8.6
CNR:Fxd Inc Opptys;N 1,715.3 –0.3 –1.7 1.8 4.1 Fidelity Real Estate 4,444.9 8.9 2.2 6.0 12.3 SPDR S&P Intl Telecom 33.6 4.9 –1.8 2.5 6.9
Buffalo:High Yield 261.7 0.2 –1.2 1.8 5.3 AMG I:AMG Mg Real Est 350.4 7.5 2.2 5.3 12.4 Fidelity Sel Telecomm 564.9 7.8 0.1 2.3 7.9
iShares:EM Hi Yld Bd 84.0 2.3 –2.3 1.8 N.A. Cohen&Steers Inst RS 2,885.9 7.9 1.7 5.2 11.8 Deutsche Comm;A 114.9 6.5 –1.2 2.0 8.8
Muz Cr Opp;Supra Inst 134.9 0.5 –0.4 1.5 N.A. Cohen&Steers Realty Shs 5,744.9 7.8 1.7 5.0 11.6 iShares:US Telecom ETF 528.4 7.0 –2.7 0.5 7.0
Pru Sht Dur Hi Yld Inc;Z 1,297.5 0.1 –0.7 1.3 N.A. T Rowe Price RE 5,303.7 7.3 1.1 4.8 12.0 iShares:N Amer T-M Net 141.3 2.6 –3.3 –0.1 2.8
Category Average: 319.8 –1.9 –2.3 –4.1 4.1 Category Average: 485.2 6.4 1.3 2.3 11.0 Category Average: 187.8 5.5 –1.3 0.8 7.0
N.A.: Not applicable; fund is too new * Annualized Note: For funds with multiple share classes, only the largest is shown.

EXCHANGE-TRADED FUNDS
In Europe’s Beaten Countries, Spread Your Risk

Ireland looks promising, but not so Greece. How to keep from getting burned in the eurozone.
Mr. Herman says—it’s also the reduce the impact of fluctua-
BY GERRARD COWAN
makeup of the fund’s portfolio. tions in the euro/dollar ex-
The fund’s largest holding is change rate. Investors are also
WILL THE PIIGS FLY in 2016? CRH PLC, a building-materials dipping back into the iShares
Some might, analysts say, but supplier, which could benefit MSCI EAFE ETF (EFA), which
this group of five eurozone from continued low interest includes companies in Europe,
countries isn’t likely to soar in rates in the eurozone, he says, Australia and Asia, Ms. Rich-
unison. as the European Central Bank ardson says.
ISTOCKPHOTOS/GETTY IMAGES; DEAGOSTINI/GETTY IMAGES

Piigs is an acronym for Por- keeps rates down to help stim- Buying single-country funds
tugal, Ireland, Italy, Greece ulate eurozone economies. often is much more of a tacti-
and Spain—countries that And the second-largest hold- cal trade—one designed to
have been the focus of inves- ing is Kerry Group PLC, a food take advantage of short-term
tor concerns during the euro business, which Mr. Herman market movements—than a
crisis of recent years. says is “a safe bet” because longer-term investment strat-
Exchange-traded funds the business isn’t as subject as egy, Ms. Richardson says.
linked to the nations saw a others to the effects of eco- “That’s not to say that it won’t
mixed performance in 2015, nomic cycles. work out, but there’s a lot
largely mirroring the eco- more risk when you just have
nomic stories in the various Greece has fans a single country as opposed to
countries, with Ireland boom- Meanwhile, Greece’s trou- diversified exposure.”
ing, Greece suffering and the bles haven’t scared all inves-
rest in between. tors away from the Global X Mr. Cowan is a writer in
This year looks like another FTSE Greece 20 fund. The ETF London. He can be reached
mixed bag, analysts say, with chalked up $286 million in net Ireland was a good investment last year and Greece wasn’t. Investors could get the same in 2016. at reports@wsj.com.
Ireland still looking especially inflows in 2015 despite its
promising and Greece still sharp decline, according to ECB’s economic-stimulus pol- country. funds include the iShares FUND RESULTS
looking particularly troubled. data from etf.com. icy. However, she recommends Many investors appear to MSCI Eurozone ETF (EZU),
Some investors appear to be The company’s other Piigs that investors in the eurozone agree. IShares has seen far which has exposure to compa- Lipper’s A-to-Z
bargain-hunting in Greece. But
some analysts say the safest
approach for investors is not
ETF, Global X FTSE Portugal
20 (PGAL), took in $4.5 mil-
lion. It was down about 2% for
generally should look to funds
that hedge against currency
risk or to Germany if they
stronger interest in its
broader eurozone ETFs than in
its single-country funds, Ms.
nies across the continent, and
the iShares Currency Hedged
MSCI Eurozone ETF (HEZU),
WSJ
.COM
quarterly funds
listings are free at
WSJ.com/
to bet on any one of the Piigs the year. want to invest in a single Richardson says. The broader which is similar but seeks to FundsAnalysis.
alone. “Portugal’s economy has
been growing at positive rates
Ireland shines over the last two years and
At either end of the perfor- unemployment has fallen,
mance spectrum last year, the leading to a stronger economic
iShares MSCI Ireland Capped position,” says Jay Jacobs, di-
ETF (ticker symbol EIRL) was rector of research at Global X
up more than 20%, while the Funds.
Global X FTSE Greece 20 ETF “Greece, on the other hand,
(GREK) slid more than 40%. expects its economy to con-
There are reasons to believe tract in 2015 and 2016 as the
Ireland and Greece could be country adopts new austerity
the best and worst perform- measures. Many investors,
ers, respectively, among the however, are attracted to the
Piigs again this year. lower valuations in Greece,
“Ireland is doing great, it’s which they believe are com-
the poster child for success in mensurate to the additional
terms of economic austerity, risks.”
government budget cuts, re- Rounding out the perfor-
forms, etc.,” says Paulo Her- mance of prominent Piigs
man, a subject-matter expert funds last year, the iShares
at ETFdb.com, a website that MSCI Italy Capped ETF (EWI)
provides information and anal- was up about 1% and the
ysis of the ETF market. “Based iShares MSCI Spain Capped
on that, for investors, you ETF (EWP) fell more than 18%.
think ‘OK, I want to get expo- Heidi Richardson, head of U.S.
sure because there’s growth investment strategy for
there.’ ” iShares, says the Spanish and
But the attraction of the Italian ETFs are weighted to-
iShares ETF isn’t just Ireland’s ward the financial sector, so
overall economic performance, they could benefit from the
Mixed Bag
ETFs focused on the eurozone's Piigs had varying performances
in 2015, as did the countries themselves.
30% iShares MSCI Ireland
Capped ETF
20 EIRL-USA
10 iShares MSCI Italy

Capped ETF
0 EWI-USA
Global X FTSE
–10 Portugal 20 ETF
PGAL-USA
–20
iShares MSCI Spain
–30 Capped ETF
EWP-USA
–40
Global X FTSE
Greece 20 ETF
–50 GREK-USA
J F M A M J J A S O N D
Source: FactSet THE WALL STREET JOURNAL.
SPOTLIGHT | OUTLOOK DIVERGENT

VIEW FROM LONDON: GROWTH REQUIRES
U.S. ON A TIGHTROPE A SELECTIVE EYE
/kThe markets Global High Income
and the Federal Re- Opportunities fund
serve are walking a
tightrope in 2016,
with Laurentius Har-
rer and Robert 2016 Developed markets are improving,
yet developing markets still weigh on
says a London man-
ager of a U.S.-fo-
Neithart.
According to Mr.
Global Market global growth. It’s just one reason why
cused equity fund. Daigle, these are the Outlook our investment professionals believe
Hugh Grieves, who co- late innings of the U.S. recov- careful selection will be critical for taking
manages the £129 million ery and the profit cycle. “We advantage of opportunities around
($192 million) CF Miton US may still have another couple the globe. Explore our insights, and put
Opportunities Fund with Nick of years to go, but I think
Ford, says that if the Fed we’ve probably seen the lows our experts’ thinking to work for you
raises rates gradually, there in default rates in high-yield and your clients.
could be room for share valu- [junk bonds] for this cycle,” #TRPOutlook
ations to expand further, but says Mr. Daigle, who adds troweprice.com/marketoutlook
at the risk of higher inflation. that he expects default rates
“Alternatively, a more rapid to rise. Some high-yield
pace could trigger a bond- bonds, he says, are trading at
market rout, which would be 10 cents or 20 cents on the
negative for equity valua- dollar.
tions,” he says. David Kelly, chief global
The Miton fund manager strategist at JPM Asset Man-
says economic activity in the agement, says that the econ-
U.S. is likely to remain omy is improving and that an
“muted, mired in end-of-cycle earnings bounceback is good
lethargy” that hinders compa- for stocks and could make for
nies’ ability to expand reve- a more difficult year for fixed Serving Institutions, Advisors, Employers, and Individuals
nues. income.
Other international fund Mr. Kelly says he favors in-
managers are similarly wary. ternational stocks more than
Investors could be entering a U.S. equities for the long run, T. Rowe Price Investment Services, Inc., Distributor. 2015-US-16560
“rocky period ahead,” warns “particularly when the over-
David Daigle, portfolio man- valued dollar finally begins to
ager at Capital Group who fall.”
manages the $696.5 million —Tanzeel Akhtar

FIXED-INCOME INVESTING SAVING FOR COLLEGE | CHANA R. SCHOENBERGER
Junk’s Place in Your Portfolio Was That ‘529’ Really

It isn’t always worth including, says one bond expert Used for Tuition?
BY JOHN COUMARIANOS
More college-financing answers
Readers continue to send in to match 529 withdrawals with
AFTER Third Avenue Focused Credit questions about college savings expenses incurred in the same
fund closed down last month, it be- and how best to fund higher edu- tax year to avoid potential issues
came clear that the fund was some- cation. with the IRS,”
thing of an outlier, invested in ex- For many, he says. You’ll
ceptionally low-rated and illiquid these questions want to ask
bonds. center around your accountant
But, as uniquely risky as that “529” accounts, about this, Mr.
fund’s portfolio was, its abrupt deci- the tax-advan- Bernhardt says.
sion to close raises a question: taged educa-
i i i
Should investors have a permanent tional-savings
allocation to high-yield or “junk” accounts that Can 529
bonds in their portfolio? allow money funds be used
The answer is no, if you ask asset- contributed to to cover travel
allocation specialist William Bern- grow tax-free until it is used for costs to a commuter college?
JIM TSINGANOS
stein, a principal at Efficient Fron- college or graduate school. Some The short answer is no. “In
tier Advisors LLC, an investment- recent questions The Wall Street general, travel expenses are not
advisory firm in Eastford, Conn. But Journal has received, and the ad- included as a qualified higher-ed-
that doesn’t mean investors should vice from experts: ucation expense,” Mr. Bernhardt
never own junk, he says. It means says. Investors can spend 529
i i i
holding high-yield bonds is only ad- mium is the spread. pens during the next wave of de- funds on tuition, books, room and
vantageous at certain times. But here’s the rub: How wide faults. When 529 funds are used to board, and other college-related
spreads need to be to justify buying pay for college tuition, how expenses if they can show that
Watching the spreads high-yield bonds and how narrow Are we there yet? does one prove to the IRS that these purchases are a requisite
Based on data going back to 1983, they need to be to justify selling are One alternative for investors who the money was spent on tuition? part of school. One exception:
Mr. Bernstein says the extra returns judgment calls that are easy to get want some exposure to high-yield When you have a 529 plan, Special-needs beneficiaries might
of high-yield bonds, in comparison wrong. debt without the confusion and risk you’ll get a form 1099-Q detailing be able to show that their travel
with safer investment-grade bonds, In a paper he wrote in 2001, Mr. of timing the market is to buy a fund any withdrawals you make from costs are required for them to at-
aren’t enough to justify owning them Bernstein gave an example of how to that holds investment-grade as well your account, says Keith Bern- tend a qualified educational insti-
continuously, because of junk bonds’ approach that decision. Assuming a as junk bonds, and let the fund man- hardt, vice president of retire- tution. IRS publication 970 lays
volatility and the uncertainty of 7% default rate in a junk-bond port- ager decide on the ideal mix at any ment and college products at out which expenses qualify for
their default rates. folio and a 40% recovery rate—mean- given point. fund manager Fidelity Invest- 529 withdrawals under the rules.
However, Mr. Bernstein says it ing investors could expect to recover A view similar to Mr. Bernstein’s ments. “However, it is up to the
i i i
does make sense for investors to 40% of the face value of bonds in de- is held by the bond-specialist firm account owner to keep track of
own high-yield bonds when their fault—the portfolio would have 4.2 DoubleLine Capital, which runs sev- which withdrawals were for qual- My son has $15k saved from
“spreads”—the difference between percentage points shaved off its an- eral mutual funds. “We prefer to use ified higher education expenses his job. Can he make a gift of
their yields and those of comparable nual return because of defaults, he high-yield bonds in the context of and which withdrawals are not this money to his parents,
U.S. Treasury securities—are wide. said. In that case, if the portfolio’s active sector allocation rather than eligible for favorable tax treat- which we then put into his 529
That happens when the prices of yield were, say, 3 percentage points always maintaining a static weight- ment,” he says. Beware: If you for a tax break?
high-yield bonds have fallen, pushing higher than that of comparable Trea- ing to this area,” says Kapil Singh, a make any withdrawals that don’t The main tax advantage of a
up their yields. On the other hand, sury securities, that extra yield portfolio manager at DoubleLine, meet the IRS guidelines, you will 529 is that the money grows tax-
he says, it makes sense to sell high- wouldn’t be enough to offset the loss Mr. Singh is responsible for the have to report those on your tax free until withdrawn for qualified
yield bonds when their spreads nar- from the defaults. Investors would high-yield allocation in the Double- returns, since there is a penalty. educational expenses. There are
row, as they do when the bonds’ have been better off owning Trea- Line Core Fixed Income fund no federal income-tax breaks for
i i i
prices rise. In other words, buy surys. However, if the spread were, (DBLFX). The fund is designed to re- 529 contributions; however, you
when prices are low and sell high. say, 9 percentage points, investors semble the Barclays U.S. Aggregate Many years ago I set up a might be able to get a state in-
“Most of the time, it’s not worth would do better by owning the junk Bond Index. 529 plan for my son. I funded come-tax deduction, depending
it” to own high-yield debt, Mr. Bern- bonds than they would by owning High-yield bonds made up 8.1% of his education from other on where you live. Check with
stein says. “But occasionally, in bad Treasurys—given the assumed de- Core Fixed Income’s portfolio in May sources and he has now fin- your tax adviser about your own
states of the world, it’s nice to col- fault and recovery rates. but just 2.6% in November. The deci- ished college. Can I repay my- plan and state rules.
lect a double-digit yield premium But default and recovery rates are sion to sell most of the fund’s high- self with a large lump sum
i i i
while you’re waiting for [bond] unpredictable. Historical averages yield position over the summer as without penalties even though
prices to recover.” The yield pre- may not match up with what hap- prices in the sector tumbled helped the expenses occurred over a Our son is now 22 and will be
Core Fixed Income finish in the top period of four years? using the 529 we set up to pay
2% of fund tracker Morningstar Inc.’s This approach could be asking for graduate-level study. Can
Rarely Average intermediate-bond category for the for trouble. As a cash-basis tax- we transfer ownership to him?
Junk-bond spreads (the difference in their yield compared with Treasurys) have a five years through 2015, with a 5.1% payer, “you must take the with- That depends on your 529’s
long-term average of 5.8% but they are almost always above or below that. annualized return. drawals in the same calendar rules. Either way, says Mr. Bern-
So, now that junk-bond prices year the expenses were paid,” hardt, even “if your state’s plan
25% have come down significantly, is it says Joseph Hurley, the founder does not permit transferring
20 time to add to high-yield holdings? of 529-advice site SavingForCol- ownership, you can still withdraw
Mr. Singh says his appetite for high- lege.com. Otherwise, you’ll have funds to pay for qualified educa-
15 yield bonds is still limited, though he to pay tax and a 10% penalty on tion expenses at the graduate-
adds that the bonds of some compa- the earnings portion of your school level.”
10 nies he follows are beginning to be- withdrawals, he says. Such earn- The original account owner
Spread* come attractively priced. ings may be considerable, de- can also roll over a 529 to a plan
5
Average pending on how long it has been that allows ownership changes,
0 Mr. Coumarianos, a former since the years in which the Mr. Hurley says. It is also permit-
’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 Morningstar analyst, is a writer withdrawals should have been ted to change a 529 account to
*Bank of America Merrill Lynch Master II Spread in Laguna Hills, Calif. He can be made. Mr. Bernhardt sees a red benefit any direct relative of the
Source: St. Louis Fed THE WALL STREET JOURNAL. reached at reports@wsj.com. flag as well. “Generally, it is wise original beneficiary.
HAVE A COLLEGE-FINANCE QUESTION IN GENERAL? We’ll answer

them in future Investing in Funds & ETFs reports. Write reports@wsj.com.
ALTERNATIVE INVESTMENTS
IN TRANSLATION
Commodity Funds Fall Short, Study Says REVERSAL VS. CORRECTION
downturn of March 2000 to Septem- traders have a terrible time because
BY SIMON CONSTABLE
ber 2002 and the financial crisis of commodities can only really fall so What is the difference be- the indexes were about to
October 2007 to March 2009, spe- far,” says Victor Sperandeo (also tween a reversal and a cor- embark on a long-sustained
SOBERING NEWS for investors in cialty-commodity funds added value. known as “Trader Vic”) of Dallas rection? downward path, such as
specialty-commodity mutual funds: commodity-trading adviser EAM It could matter a lot if what investors experienced
On average, they fall short on key Big hurdles Partners LP. A bushel of wheat can’t you are trading. starting September 2007
measures, new research has found. The researchers examined four go bankrupt like a company. It will By Wall Street’s rule of through early 2009. That is
“These categories of funds have categories of mutual funds from as still be worth something. The result thumb, a correction is gen- to say, none of the stock-
not been able to consistently create far back as March 1956 through De- is that during a bear market, inves- erally defined as a pullback in a mar- market dips since 2009 amounted to
positive net alphas for their inves- cember 2012. The categories are: tors can only make so much money ket or index of 10% or more. More a reversal.
tors over longer time periods,” the commodity funds that invest in the by selling futures short—that is, sell- colloquially, it means that the under- For the past 12 months the S&P
report states. Alpha is a measure of physical materials or derivatives; ing them in the hopes of buying lying trend, either up or down, re- 500 index of large stocks has
the value fund managers add to the natural-resources funds that invest them back later at a lower price and mains in place. In short, a correction bounced around, neither continuing
investment process when adjusted in materials companies; equity en- pocketing the difference. is a temporary blip. the trend upward nor starting a new
for risk factors ergy funds that invest in energy A reversal is a more-lasting one downward.
such as volatil- stocks; and precious-metals funds Other drawbacks change of direction for the index. That “sideways” movement is
ity. that invest in mining companies and Commodities investors also face (Meanwhile, a 20% move in either making some market strategists
The funds’ precious-metals bullion. liquidity issues that investors in direction is the rule-of-thumb defini- worried that a reversal may occur in
high expenses For three categories of the bonds or big stocks rarely have to tion of a bear or bull market.) which a new downward trend starts.
are often to funds—natural resources, equity en- confront. “Cocoa is very thinly Starting in March 2009 the ma- If such a trend does start, these
blame, accord- ergy, and precious metals—the rea- traded,” says Mr. Sperandeo. That jor stock indexes have trended strategists will want to warn inves-
ing to the re- son they didn’t add value on average means sometimes there isn’t enough higher. Occasionally, there have been tors earlier rather than later.
MISHAL THAPA
port by Srini- was because of expenses. Were it not activity in the market to allow a pullbacks, some of which conform Still, the truth is that no one will
dhi Kanuri at for that burden—the funds’ median trader to buy or sell a position with- to the technical definition of a cor- really know whether something is a
the University net annual costs were 1.56%, 1.56% out substantially affecting the price. rection. correction or a reversal until after the
of Southern and 1.37%, respectively—the funds What’s more, with commodities But none of the declines have fact.
Srinidhi Kanuri Mississippi, would have added value for inves- there also is often plenty of activity been so sustained as to indicate that —Simon Constable
Robert McLeod tors, according to the report. away from the exchanges. As Mr.
at the University of Alabama and Da- The weakest group of funds was Sperandeo says, “it’s hard to tell
vinder Malhotra at Philadelphia Uni- the one focused solely on physical what’s going on off-market.” Largest Taxable-Bond Funds
versity. The study is expected to be materials and derivatives; those So what other options do inves- Data provided by
published in the Journal of Wealth funds didn’t add value even before tors have? David Ranson, director of Total returns are for periods ended Dec. 31 and are final; assets are through Nov. 30,
Management this spring. costs were taken into account, ac- research at HCWE Worldwide Eco- and include all share classes. All data are final.
Many experts recommend a small cording to the report. nomics, says one simple and inex- Assets Performance (%)
Fund Name Symbol ($ millions) Dec. 4th-qtr 1-yr 3-yr* 5-yr*
amount of commodity exposure for Part of the problem is that when pensive way to add commodities to
investors because commodity prices investors buy actual commodities, a portfolio is to purchase equal dol- Vanguard Tot Bd;Adm VBTLX 147,941.6 –0.4 –0.6 0.4 1.3 3.1
tend to be uncorrelated with those they typically have to pay for stor- lar weights of futures contracts in PIMCO:Tot Rtn;Inst PTTRX 91,977.8 –0.2 0.5 0.7 1.1 3.5
of stocks and bonds. That is, if age, which presents an additional crude oil, copper, soybeans and cot- Vanguard Tot Bd II;Inv VTBIX 91,413.8 –0.5 –0.7 0.3 1.3 3.0
stocks rally, commodity prices may obstacle to making money. So even if ton. His research, published in 2014, Met West:Total Return;I MWTIX 69,435.2 –0.3 –0.4 0.3 2.2 4.7
go up, down or simply not move at the price of a commodity remains looked at decades of data and found Templeton Gl Bond;Adv TGBAX 58,792.3 –3.1 2.3 –4.0 0.03 2.6
all. As a result, overall volatility in a stable, an investor will lose money that a simplified approach like this, Vanguard Sh-Tm Inv;Adm VFSUX 53,016.7 –0.4 –0.3 1.1 1.4 2.1
portfolio is reduced. due to storage and capital costs. This including annual rebalancing, didn’t PIMCO:Income;Inst PIMIX 52,388.5 –0.9 0.5 2.6 4.9 8.4
But the new findings may give is true even in the derivatives mar- compromise the goal of adding di- Vanguard Tot Itl BI;Inv VTIBX 51,290.2 –0.3 0.4 1.0 N.A. N.A.
DoubleLine:Tot Rtn;I DBLTX 51,071.9 –0.2 –0.5 2.3 3.0 5.5
some fund investors pause. ket where futures contracts trade at versification. A small investor could
Dodge & Cox Income DODIX 43,898.1 –0.8 0.1 –0.6 1.8 3.6
Unless alpha is positive and sta- different prices based on when they do this by buying exchange-traded
tistically significant, there aren’t expire, Prof. Kanuri explains. funds for each commodity. Vanguard Sh-Tm Bd;ETF BSV 42,037.0 –0.2 –0.6 0.9 0.8 1.5
grounds to say the fund manager is Funds buying futures tend to fare Lord Abbett Sh Dur;A LALDX 34,983.6 –0.6 –0.7 0.4 1.3 2.7
adding value, Prof. Kanuri said in an badly for other reasons, too. For ex- Mr. Constable is a writer in New iShares:Core US Agg Bd AGG 29,915.6 –0.3 –0.6 0.5 1.4 3.1
interview. The study found one example, the money they can make York who once worked in the American Funds Bond;A ABNDX 28,404.4 –0.6 –0.6 0.2 1.2 3.2
ception: During times of financial from negative bets is limited. commodity markets. He can be Fidelity Str Adv Cre Inc FPCIX 28,195.4 –0.7 –0.4 –0.02 1.2 3.5
distress, such as the stock-market “In a down market commodity reached at reports@wsj.com. *Annualized N.A.=not applicable, fund is too new

Q&A
SPOTLIGHT | JANUS CAPITAL
A Small-Cap Value Investor, Out of Style, WHAT NOW AFTER

BOND CHIEF’S EXIT?
Still Thinks That the Sector Is ‘Due’ The departure of Janus spokeswoman
a decade; its average annual- right prices, and avoiding your methodology, hopefully Janus Capital says.
BY CHUCK JAFFE
ized return of 4.6% over the stocks where a high price/ it helps you handle and Group’s head of Darrell Watters,
10 years through 2015 trails earnings, price to book value weather the extremes of fear fixed income this who joined Janus in
BILL NASGOVITZ is con- the average and/or price to cash-flow ra- and greed, so you don’t get year will be a chal- 1993, will become
vinced it’s finally his turn. small-cap tio work against his long- excited at the top when ev- lenge for the Den- head of U.S. domes-
Mr. Nasgovitz, chairman value fund term prospects. erybody else is buying like ver-based asset tic fundamental fixed
and chief investment officer by 1 per- “These times haven’t been crazy and, vice versa, you manager. income in April. The funds he
HEARTLAND ADVISORS
of Heartland Advisors in Mil- centage easy for small-cap value don’t get too depressed and How harmful (or not) Gib- and Mr. Smith currently man-
waukee, has managed the point. managers,” Mr. Nasgovitz sell everything. son Smith‘s exit proves to be age, some with other manag-
$848 million Heartland Despite a says. But he sees a bull mar- depends on the patience of ers, include the $9.2 billion
Value fund (HRTVX) for broad market ahead. Here are edited WSJ: When you look at this investors, how the fixed-in- Janus Flexible Bond, the
more than 30 years. ket that has excerpts from an interview. market, is anything truly dif- come team gels without him $280.7 million Janus Global
Since the fund’s inception worked ferent from the past? and the performance of Janus Bond, the $2 billion Janus
in 1984, it has generated an Bill Nasgovitz against his WSJ: You’ve lived with your MR. NASGOVITZ: The markets funds going forward. High-Yield, the $17.7 million
annualized average return of favored in- methodology for decades, are still driven by two ex- Mr. Smith, who joined Janus Real Return and the
11.75%, about a point ahead vestment style, Mr. Nasgov- through thick and thin. How tremes, fear and greed. Janus in 2001 as a fixed-in- $2.6 billion Janus Short-
of the Russell 2000 Value In- itz hasn’t changed his tune, important is it for investors Right now we have some come analyst, plans to leave Term Bond.
dex. But the fund has strug- staying focused on small to stick to their beliefs? greed going on, but the aver- March 31 to spend more time Chris Diaz, who joined the
gled against peers for about companies purchased at the MR. NASGOVITZ: Whatever age stock has been held back with his family. firm in 2011, will head global
by a fair amount of fear and “A lot of uncertainty is cre- fundamental fixed income.
derisking [selling or avoid- ated” by Mr. Smith’s depar- Mr. Diaz was most recently
Monitoring Money-Market Funds ing stocks perceived as be- ture, says Sumit Desai, an an- head of global rates and lead
Performance figures for these consumer-oriented funds are estimated annualized yields, which include ing volatile]. alyst at researcher portfolio manager of the
earnings from the funds’ investments and the effects of compounding. Funds open only to institutions, Morningstar Inc. He says Mr. Janus global multisector in-
WSJ: When you started your Smith effectively built Janus’s stitutional strategy and re-
special-purpose and tax-exempt funds are excluded from these tables.
fund, there were no Morning- fundamental fixed-income lated portfolios.
Largest Funds Highest 12-Month Yield star ratings or other mea- business while generating Mr. Siegenthaler predicts a
Compound Compound sures of funds. Investors strong long-term returns. muted reaction from clients—
Assets Performance (%) 7-day Assets Performance (%) 7-day bought and held for a long Under Mr. Smith, Janus’s less than 15% redemptions
Fund Name ($millions) 4th–qtr 12-mos yield (%) Fund Name ($millions) 4th–qtr 12-mos yield (%) time. Now, they tend to move assets under management in over 12 months—because of
Fidelity Govt Cash Resvs 116,335.4 0.01 0.01 0.01 Meeder MMF/Retail 54.4 0.08 0.07 N.A. around much more quickly. the fixed-income area ex- Janus’s strong bond track re-
Vanguard Prime MMF/Inv 109,432.3 0.12 0.05 0.26 Davis Govt MMF/Cl A 178.8 0.00 0.06 0.00 MR. NASGOVITZ: Over the panded from less than $1 bil- cord and the fact that Mr.
Schwab Cash Reserves 40,523.6 0.07 0.06 0.07 Schwab Cash Reserves 40,523.6 0.07 0.06 0.07 years, people seem to have lion before the financial crisis Watters co-managed most of
Schwab Govt MF/Sweep 23,095.0 0.00 0.00 0.00 Vanguard Prime MMF/Inv 109,432.3 0.12 0.05 0.26 morphed into short-term to nearly $42 billion today, the key funds with Mr. Gibson.
Fidelity Government MMF 22,092.5 0.01 0.01 0.01 HSBC Prime MMF/Cl A 27.5 0.05 0.04 0.05 speculators rather than long- Craig Siegenthaler, an analyst Todd Rosenbluth, director
Schwab US Treasury MF 20,694.0 0.00 0.00 0.00 Vanguard Federal MMF 4,733.2 0.10 0.04 0.21
term investors, zigging when with Credit Suisse, said in a of ETF and mutual-fund re-
Schwab Adv Cash Res/PSwp 18,211.7 0.01 0.01 0.01 Hewitt MMF/Admin Shares 767.8 0.04 0.03 0.15
they should be zagging. note. search at S&P Capital IQ,
We have a very low Morn- But both analysts note that agrees that Mr. Watters’s
Schwab Money Market Fund 15,142.8 0.01 0.01 0.01 HSBC US Govt MMF/Cl A 1.1 0.03 0.03 0.03
ingstar rating today [two Mr. Smith leaves behind a presence will be reassuring,
Federated Capital Res 14,464.7 0.00 0.00 0.00 PNC Government MMF/Cl A 336.7 0.03 0.03 N.A.
stars]; in the past we have strong team. “There’s a deep but recommends that inves-
Federated Govt Res/Cl P 13,331.3 0.00 0.00 0.00 PNC MMF/Cl A 145.6 0.04 0.03 N.A.
been up there with four or team, and they’re very capable tors keep on eye on whether
five stars and, in fact, had to investors,” says Mr. Desai. the funds’ investment ap-
Highest Seven-Day Yield Lowest 12-Month Yield* close the fund [to new inves- There will be no changes to proach, exposures and perfor-
Compound Compound
Assets Performance (%) 7-day Assets Performance (%) 7-day
tors] because of tremendous the funds’ investment pro- mance remain consistent.
Fund Name ($millions) 4th–qtr 12-mos yield (%) Fund Name ($millions) 4th–qtr 12-mos yield (%) demand twice in its history. cesses or philosophies, a —Daisy Maxey
When we lag, that’s usually
Vanguard Prime MMF/Inv 109,432.3 0.12 0.05 0.26 Schwab Govt MF/Sweep 23,095.0 0.00 0.00 0.00
the time to be taking a look
Vanguard Federal MMF 4,733.2 0.10 0.04 0.21 Schwab US Treasury MF 20,694.0 0.00 0.00 0.00
at a value fund, in my view, years of pain, I think value We should be able to find
BlackRock MMP/Inv A 331.0 0.03 0.01 0.15 Federated Capital Res 14,464.7 0.00 0.00 0.00
because we believe in regres- investors are due for seven companies that can find
Hewitt MMF/Admin Shares 767.8 0.04 0.03 0.15 Federated Govt Res/Cl P 13,331.3 0.00 0.00 0.00 sion to the mean. It has held years of feast. above-GDP growth even in a
Vanguard Treasury MMF 9,124.5 0.05 0.02 0.14 American Funds MMF/Cl A 12,159.5 0.00 0.00 0.00 up over the life of this fund, In this low-interest-rate slowdown—a Chinese slow-
Fidelity Money Market Fd 2,221.5 0.03 0.01 0.13 BIF Money Fund 5,188.3 0.00 0.00 0.00 and we think it will again. environment—we don’t think down and U.S. slow-growth
Gabelli US Treas/Cl AAA 1,518.9 0.02 0.01 0.12 SSgA MMF/Cl N 3,225.4 0.00 0.00 0.01 rates will go up much here— period. That’s the key that is
Schwab Cash Reserves 40,523.6 0.07 0.06 0.07 SSgA US Govt MMF/Cl N 2,864.3 0.00 0.00 0.00 WSJ: While you are optimis- growth is low, debt is high, going to drive money back
Wilmington Prime/Admin 318.2 0.03 0.02 0.07 Ready Assets Prime MF 2,120.3 0.00 0.00 0.00 tic that there will be a small- investors are looking for to this sector.
PIMCO Govt MMF/Cl A 9.4 0.01 0.01 0.06 Franklin US Govt MF/Cl A 1,932.2 0.00 0.00 0.00 cap rally, are you worried top-line growth, they are
Source: Money Fund Report (iMoneyNet.com) Average Yields (all retail taxable funds) 0.01% 0.01% about political or other risks looking for niches. Mr. Jaffe is a MarketWatch
changing things in 2016? To me, that points to the columnist. Email him at
*- Ranked by assets. A full list of 36 funds with 12-month yields of zero may be found at http://wsj.com/FundsAnalysis. MR. NASGOVITZ: After seven small and microcap sectors. cjaffe@marketwatch.com.

Winners and Losers Data provided by
Best– and worst–performing stock funds for the periods ended Dec. 31; assets as of Nov. 30 and include all share classes. Performance data are final and include share prices and reinvested dividends.
Fourth–Quarter Best Performers Fourth–Quarter Worst Performers Five–Year Best Performers Five–Year Worst Performers
Assets Performance (%) Assets Performance (%) Assets Performance (%) Assets Performance (%)
Fund Name ($ millions) Dec. 4th–qtr 1–year Fund Name ($ millions) Dec. 4th–qtr 1–year Fund Name ($ millions) 4th–qtr 1–year 5–year* Fund Name ($ millions) 4th–qtr 1–year 5–year*
VelShs 3x Inv Crude ETN 167.2 46.8 82.3 64.8 Direxion:Nat Gas Bull 3X 47.4 –59.7 –63.4 –97.1 ProShares:Ult Nasdaq Bio 779.7 22.0 13.8 57.0 VelShs Dly 2x VIX ST ETN 299.3 –50.7 –77.7 –84.3
VelShs 3x Inv Nat Gas 57.4 –21.9 57.2 48.6 VelShs 3x Long Crude ETN 1,037.1 –41.3 –61.6 –91.6 Direxion:Retail Bull 3X 67.1 21.5 44.5 54.3 C-Tracks ETN Citi Vol TR N.A. –48.5 –61.3 –77.4
DB Crude Oil Db Sht ETN N.A. 28.8 53.8 94.6 VelShs 3x Long Nat Gas 342.0 –4.5 –60.9 –87.1 ProShares:UltP QQQ 1,402.1 30.4 17.4 44.0 Direxion:Gold M Id Bl 3X 650.6 –16.0 –78.1 –73.5
ProShs II:UlS Blm CrO 123.1 32.0 52.2 70.8 ProShs II:UltVIX STF ETF 527.6 5.4 –50.9 –77.6 ProFunds:Biotech;Inv 636.4 15.5 3.1 42.2 Direxion:Nat Gas Bull 3X 47.4 –63.4 –97.1 –70.7
ProShs II:UlS Blm Nat Gs 11.4 –8.0 43.7 66.3 VelShs Dly 2x VIX ST ETN 299.3 5.5 –50.7 –77.7 ProShares:Ult Hlth Cr 146.3 16.3 8.0 39.1 VelShs Dly 2x VIX MT ETN 1.6 –32.2 –37.7 –56.1
DB Commodity Db Sht ETN N.A. 17.4 38.8 78.4 C-Tracks ETN Citi Vol TR N.A. 1.7 –48.5 –61.3 ProShares:Ult Cons Sv 30.0 10.2 9.2 34.4 ProShares:UlS Nasdaq Bio 100.4 –25.2 –37.5 –51.1
ProFunds:UltraChina;Inv 20.3 –3.2 31.6 –7.0 Direxion:S&P Btech Br 3X 39.9 1.3 –45.4 N.A. Fidelity Sel Bio Tech 15,086.8 12.8 13.7 32.6 Direxion:Semicnd Bear 3X 40.6 –31.5 –25.1 –49.6
ProShares:UP Nasdaq Bio N.A. 1.6 31.0 N.A. ProShs II:Ult Blm CrO 871.0 –28.9 –43.7 –75.2 Fidelity Adv Biotech;A 3,779.3 11.1 11.1 31.7 Direxion:Latin Bull 3X 9.0 –18.1 –74.9 –49.5
ProShares:UltP QQQ 1402.1 –5.5 30.4 17.4 iPath Bloomberg NatGas A 5.4 0.9 –42.1 –63.3 Direxion:M NAS Bl 2x;Inv 154.9 19.4 14.4 31.5 VelShs VIX ShTm ETN 8.8 –23.0 –36.6 –49.4
Direxion:Semicnd Bull 3X 132.0 –6.8 29.6 –20.7 ProShs II:Ult Blm Nat Gs 33.8 –1.7 –42.0 –69.9 ProShares:Ult QQQ 1,039.0 20.2 14.7 31.1 iPath ETN SP500 VIX ST A 806.7 –23.0 –36.6 –49.4
Direxion:S&P Btech Bl 3X 163.8 –10.9 29.5 N.A. ProShares:UPS Nasdaq Bio 10.0 –7.6 –37.2 N.A. Rydex:NASDAQ 2x;H 330.7 19.9 13.7 30.0 ProShares:UltP Sht QQQ 417.4 –28.4 –37.5 –48.2
Direxion:CSI300 ChA Bl2X 66.5 4.4 29.1 N.A. Highland:Energy MLP;Y 39.0 –19.4 –37.1 –54.8 ProFunds:UltraNASDAQ;Inv 267.4 19.9 13.7 30.0 ProShs II:Ult Blm CrO 871.0 –43.7 –75.2 –45.0
KraneShs:CSI China Intrt 153.5 –0.9 28.8 17.8 Direxion:Gold M Id Br 3X 209.7 –12.6 –33.5 –33.5 ProShares:UltPro S&P500 1,085.9 20.0 –5.1 30.0 Direxion:RE Bear 3X 10.7 –22.3 –24.8 –44.2
PowerShares Gldn DrgnChi 183.3 1.3 27.8 18.2 Direxion:S&P OG EP Bl 3X 9.8 –49.4 –33.0 N.A. iShares:Nasdaq Biotech 8,426.5 11.8 11.5 29.6 Direxion:Finl Bear 3X 313.5 –19.9 –19.0 –44.1
United States Short Oil 21.1 15.3 26.7 45.9 VelShs Dly 2x VIX MT ETN 1.6 –1.3 –32.2 –37.7 Direxion:S&P 500 Bull 3X 616.0 19.9 –5.5 28.4 Direxion:Sm Cap Bear 3X 416.4 –15.4 –6.8 –43.1
Deutsche Hvst CSI500 ChA 35.9 1.4 26.5 28.7 US Diesel-Heating Oil 3.1 –19.7 –31.9 –42.0 ProFunds:Health Care;Inv 58.9 12.2 6.4 28.2 ProShares:Ult MSCI Braz N.A. –10.0 –69.6 –43.1
Direxion:Hlthcre Bull 3X 328.7 4.1 26.2 7.6 Direxion:Semicnd Bear 3X 40.6 4.0 –31.5 –25.1 Rydex:Biotechnology;Inv 627.3 10.1 8.8 27.9 ProShares:UltPSh Rus2000 65.2 –15.1 –5.4 –42.4
Direxion:Tech Bull 3X 191.4 –6.7 25.8 4.8 iPath ETN S&P GSCI CTR A 768.8 –19.1 –30.6 –53.4 SPDR S&P Biotech 2,295.1 13.0 13.6 27.8 Direxion:Tech Bear 3X 18.5 –26.2 –31.4 –42.1
DB Crude Oil Short ETN N.A. 14.4 25.7 50.9 Yorkville Hi Inc MLP ETF 124.0 –25.0 –29.3 –57.0 Franklin Str:BD;A 1,682.0 9.9 5.5 27.3 iPath Bloomberg NatGas A 5.4 –42.1 –63.3 –41.5
Guggenhm China Tech ETF 57.9 –1.4 24.9 6.8 ProFunds:UlSh China;Inv 2.6 1.3 –29.1 –23.1 T Rowe Price Hlth Sci 14,107.6 7.4 13.0 27.0 Direxion:S&P 500 Bear 3X 314.7 –21.5 –18.1 –40.1
ProShares:Ult Semicond 26.9 –3.5 24.9 –8.3 DB Commodity Db Lng ETN N.A. –15.9 –28.8 –53.3 ProShares:UltP Dow30 177.9 22.3 –8.4 26.9 ProShares:UltPSh MdCp400 5.2 –10.7 –7.4 –40.0
EMQQ EM Intrt & Ecom ETF 12.1 –1.3 23.8 5.2 ProShares:UltP Sht QQQ 417.4 2.6 –28.4 –37.5 Direxion:Tech Bull 3X 191.4 25.8 4.8 26.8 Direxion:MidCapBear 3X 12.7 –10.9 –8.1 –39.6
Mrkt Vctrs:ChinaAMC SME 58.1 0.5 22.9 45.9 iPath Bloomberg Energy A 1.0 –13.1 –27.4 –45.3 PowerShares Dyn Pharm 1,663.5 9.0 9.3 26.6 ProShares:Ul PrSh S&P500 554.0 –21.2 –16.8 –39.5
ProShs II:UlS Blm Comm 8.1 5.7 22.7 61.7 Direxion:Tech Bear 3X 18.5 3.8 –26.2 –31.4 Pru Jenn Health Sci;A 3,412.9 5.1 5.0 25.6 ProFunds:Prec Metals;Inv 13.9 –0.3 –48.3 –39.0
ProShares:UltP Dow30 177.9 –5.5 22.3 –8.4 United States Brent Oil 83.0 –17.6 –26.2 –45.4 ProShares:Ult Cons Gd 20.8 12.0 8.4 25.2 ProShs II:Ult Silver 214.8 –12.8 –31.3 –38.7
ProShares:Ult Nasdaq Bio 779.7 1.7 22.0 13.8 ProShares:UlS Nasdaq Bio 100.4 –4.5 –25.2 –37.5 VelShs DlyInv VIX MT ETN 108.1 11.5 –0.9 25.1 ProShares:UlS Hlth Cr 4.3 –17.7 –21.3 –36.7
Direxion:Retail Bull 3X 67.1 –2.1 21.5 44.5 United States Nat Gas 513.5 –0.6 –25.1 –40.6 iPath ETN LgEx S&P 2.0 11.4 1.3 25.1 ProShares:UltP Sht Dow30 153.2 –22.5 –13.9 –36.3
iShares:MSCI New Z Cp 68.2 7.6 20.6 –1.3 United States Oil Fund 3,291.8 –14.8 –24.4 –45.3 ProFunds:Pharmaceut;Inv 17.7 12.9 5.8 25.0 Direxion:China Bear 3X 57.3 –12.9 –13.0 –35.9
iPath Bloomberg Sugar A 61.6 2.2 20.3 –5.8 MainStay:Cushing REI;A 102.8 –20.0 –24.0 –56.5 Janus Glbl Life Sci;T 4,735.7 4.8 8.2 24.9 ProFunds:UltraLatin;Inv 12.0 –12.7 –61.8 –35.3
Direxion:Pharma&Med Bl2X 3.6 0.2 20.2 N.A. ProShares:UlS Semicond 3.1 2.3 –23.6 –13.6 iPath ETN LgEx Rus 1000 1.3 10.5 0.4 24.7 ProShares:UlS Cons Sv 2.6 –11.9 –19.0 –34.5
Glbl X China NASDTch ETF 16.3 –0.9 20.2 8.8 ProShs II:VIX ST Fut ETF 102.3 6.4 –23.3 –36.7 ProFunds:Cnsmr Svcs;Inv 54.2 7.6 6.8 24.7 ProFunds:UltSh NAS;Inv 12.4 –19.7 –25.5 –34.3
ProShares:Ult QQQ 1,039.0 –3.4 20.2 14.7 Direxion:Brazil Bull 3X 38.3 –22.8 –23.2 –86.9 DB Crude Oil Db Sht ETN N.A. 53.8 94.6 24.5 ProFunds:UltSh Japan;Inv 1.4 –14.4 –27.5 –34.2
ProShares:UltPro S&P500 1,085.9 –5.7 20.0 –5.1 Direxion:Jr Mnr Bear 3X 53.9 –14.5 –23.1 –52.7 ProShs II:UlS Blm Comm 8.1 22.7 61.7 24.2 Rydex:Inv NAS 2x;H 34.3 –20.0 –25.3 –34.1
ProFunds:UltraNASDAQ;Inv 267.4 –3.6 19.9 13.7 VelShs VIX ShTm ETN 8.8 6.6 –23.0 –36.6 Frst Tr:NYSEArcaBiotech 3,387.9 11.4 11.0 23.7 Direxion:M LA Bl 2x;Inv 4.5 –10.8 –57.8 –34.0
Direxion:S&P 500 Bull 3X 616.0 –5.7 19.9 –5.5 iPath ETN SP500 VIX ST A 806.7 6.6 –23.0 –36.6 Fidelity Sel Health 8,994.6 9.7 6.6 23.7 Glbl X Uranium ETF 130.0 3.5 –36.6 –33.9
Rydex:NASDAQ 2x;H 330.7 –3.5 19.9 13.7 Catalyst MLP&Infr;A 15.1 –18.4 –22.9 –45.7 Hartfd:Healthcare HLS;IA 844.0 11.4 13.2 23.5 Midas Fund 10.6 –6.6 –28.3 –33.8
iShares:MSCI Indonesia 258.9 5.0 19.8 –22.0 Direxion:Pharma&Med Br2X 4.1 –2.4 –22.8 N.A. Fidelity Adv Hlth;A 3,080.6 9.0 6.0 23.0 ProShares:UlS QQQ 346.4 –19.5 –24.7 –33.8
Mrkt Vctrs:Solr Enrgy 16.7 12.0 19.6 –8.1 ProShares:UltP Sht Dow30 153.2 3.0 –22.5 –13.9 Direxion:RE Bull 3X 101.2 19.4 –4.3 22.8 Glbl X Gold Explrs ETF 26.5 1.1 –12.3 –33.4
Rydex:MR NASDAQ-100 2S;H 6.1 –3.2 19.5 22.5 Direxion:RE Bear 3X 10.7 –6.9 –22.3 –24.8 DB Commodity Db Sht ETN N.A. 38.8 78.4 22.7 Frst Tr II:Indxx Gl Agri 4.9 –20.0 –56.0 –33.3
Direxion:M NAS Bl 2x;Inv 154.9 –3.2 19.4 14.4 iPath ETN P Beta Energy 1.4 –13.7 –21.6 –39.4 ProFunds:Internet;Inv 110.4 19.1 30.8 22.6 Mrkt Vctrs:Jr Gld Miners 1,213.4 –1.2 –19.5 –32.9
Direxion:RE Bull 3X 101.2 4.5 19.4 –4.3 Direxion:S&P 500 Bear 3X 314.7 3.1 –21.5 –18.1 Hartfd:Healthcare;A 1,695.8 11.0 12.7 22.4 ProShares:UlS Semicond 3.1 –23.6 –13.6 –31.7
ProFunds:Internet;Inv 110.4 –3.4 19.1 30.8 Dunham:Lg Cap Value;N 57.1 –27.0 –21.4 –27.0 iShares:US Pharma ETF 866.9 10.3 8.8 22.2 Mrkt Vctrs:Coal 47.3 –17.7 –55.1 –31.5
WisdomTree:Jpn Hgd HC 19.2 1.1 18.9 39.0 ProShares:Ul PrSh S&P500 554.0 3.2 –21.2 –16.8 ProShares:UlS MSCI Brz 32.7 –1.8 98.7 22.0 Mrkt Vctrs:Rare E/SM ETF 33.9 –4.2 –43.6 –30.1
ProShares:Ult Bas Mat 53.6 –8.9 18.8 –27.4 UBS E-TRACS CMCI Engy TR 3.2 –12.9 –20.8 –37.5 ProShares:Ultra S&P500 1,901.8 13.5 –1.1 21.9 VelShs VIX MdTm ETN 0.6 –15.4 –15.0 –30.0
Direxion:Japan Bull 3X 14.4 –5.4 18.7 14.4 ProShs II:Ult Blm Comm 7.6 –6.5 –20.7 –45.5 Direxion:M S&P Bl 2x;Inv 68.6 13.1 –1.4 21.9 iPath ETN SP500 VIX MT A 53.1 –15.4 –15.0 –30.0
iPath ETN P Beta Sugar 1.5 3.4 18.7 –12.9 Rydex:Inv NAS 2x;H 34.3 1.7 –20.0 –25.3 Vanguard Health Care;Adm 51,725.5 8.7 12.7 21.7 Direxion:EmgMk Bull 3X 168.8 –4.6 –49.9 –29.9
DB Commodity Short ETN N.A. 8.7 18.5 36.3 Frst Tr II:Indxx Gl Agri 4.9 –12.3 –20.0 –56.0 PowerShares S&P SC H Cre 252.2 10.5 20.3 21.7 ProShares:UlS SC600 4.2 –9.6 –4.9 –29.8
ProFunds:Semiconduct;Inv 19.1 –2.6 18.3 –5.5 ProShares:UlS Bas Mat 17.3 7.2 –19.9 15.8 SPDR S&P Pharm 717.6 16.4 1.6 21.5 United States Nat Gas 513.5 –25.1 –40.6 –29.0
WisdomTree:China x-S-O 10.1 –1.2 18.2 –1.4 Direxion:Finl Bear 3X 313.5 4.2 –19.9 –19.0 ProShs II:UlS Blm CrO 123.1 52.2 70.8 21.2 DB Commodity Db Lng ETN N.A. –28.8 –53.3 –28.8
Eventide Hlthcare & LS;A 401.1 –3.3 17.5 14.9 Frst Tr:ISE Rev Nat Gas 208.4 –22.2 –19.8 –59.1 Direxion:MidCapBull 3X 73.1 5.5 –14.7 21.1 ProShares:UlS Finl 49.7 –12.7 –8.6 –28.8
Guggenhm Solar ETF 237.0 17.6 17.1 –9.4 Nvgtr Sentry Mgd Vol;I 20.2 2.0 –19.8 –27.2 BlackRock:HS Opp;A 6,080.6 8.4 11.0 20.9 ProFunds:UltSh Sm-Cp;Inv 8.7 –9.7 –2.1 –28.8
Mrkt Vctrs:Indonesia Idx 85.5 3.4 17.0 –22.6 iPath ETN P Beta CrdeOil 7.2 –13.1 –19.8 –40.4 Deutsche H&W;S 391.9 7.8 6.9 20.6 ProShares:UlS Tech 6.7 –17.3 –17.5 –28.7
Leland TR VNCP Idx;I 12.6 –0.3 17.0 16.4 ProShares:UlPS Fin Sel 4.3 3.8 –19.8 –16.8 Rydex:S&P 500 2x;H 126.7 13.3 –2.0 20.6 Direxion:DevMk Bear 3X 11.3 –12.4 –14.1 –28.4
KraneShs:CSI New China 3.2 –3.7 16.6 –0.5 ProFunds:UltSh NAS;Inv 12.4 1.8 –19.7 –25.5 Guggenhm S&P500 Eq W HC 550.3 9.4 8.2 20.4 Rydex:Inv Rus 2x;H 36.1 –9.6 –1.6 –28.4
PowerShares WldHill CE 104.2 10.9 16.6 –8.6 PowerShares DB MS Oil 474.3 –13.2 –19.6 –41.5 Vanguard Hlth Cr Idx;ETF 6,548.2 8.8 7.2 20.4 ProFunds:UltraBear;Inv 15.2 –14.5 –10.0 –28.1
ProShares:Ult Tech 147.2 –5.6 16.5 2.9 DB Crude Oil Long ETN N.A. –13.5 –19.6 –41.3 ProShares:UltP MidCap400 39.5 5.6 –14.3 20.3 ProShares:UlS Indust 5.2 –14.8 –5.0 –28.1
SPDR S&P Pharm 717.6 1.3 16.4 1.6 ProShares:UlS QQQ 346.4 2.0 –19.5 –24.7 Direxion:Finl Bull 3X 1,392.7 15.4 –8.5 20.2 ProShares:UlS Rus2000 168.3 –9.6 –1.0 –27.9
ProShares:Ult Hlth Cr 146.3 2.3 16.3 8.0 iPath ETN S&P GSCI TR A 59.4 –10.2 –19.5 –37.4 ProFunds:UltraBull;Inv 64.2 13.2 –2.1 20.2 ProShs II:Ult Blm Comm 7.6 –20.7 –45.5 –27.9
Catalyst Macro Strat;I 149.9 –1.9 16.3 49.8 VelShs 3x Long Silver 105.0 –8.0 –19.3 –47.5 Sel Sector:H Care SPDR 13,696.6 9.1 6.8 20.1 ProFunds:UltSh Md-Cp;Inv 2.0 –7.3 –5.0 –27.7
SPDR S&P Semiconductor 203.2 –3.0 16.0 10.3 ProShares:ULT O&G Ex&Pr N.A. –34.9 –19.0 N.A. ProShares:Ult Tech 147.2 16.5 2.9 20.0 Rydex:Inv S&P 2x;H 48.6 –14.5 –10.1 –27.6
PowerShares NASD Intrt 281.4 –1.8 15.9 19.4 ProShares:UlS Gold Minrs 1.5 –6.9 –18.6 N.A. iShares:US Hlthcr ETF 1,933.4 8.4 6.1 19.9 ProShares:UlS Cons Gd 2.5 –13.1 –17.2 –27.5
ProFunds:Biotech;Inv 636.4 2.2 15.5 3.1 Advisory Rsrch MLP&Eq;I 8.0 –16.6 –18.5 N.A. Fidelity Sel Retailing 1,894.0 7.9 18.4 19.8 US Glbl:Wld Prec Min 77.2 2.5 –15.6 –27.2
T Rowe Price Glbl Tech 2,622.6 –0.6 15.4 21.1 Direxion:Hbldrs&Sup Br3X 3.9 12.8 –18.4 N.A. T Rowe Price Glbl Tech 2,622.6 15.4 21.1 19.8 ProShares:UlS Rl Est 32.2 –14.8 –12.0 –27.1
Direxion:Finl Bull 3X 1,392.7 –7.7 15.4 –8.5 Direxion:Latin Bull 3X 9.0 –17.8 –18.1 –74.9 Fidelity Sel Pharm 2,031.8 6.1 8.2 19.7 ProShares:Ul Sht S&P500 1,517.9 –14.3 –9.6 –26.9
Matthews Asia:Sc&Tc;Inv 166.8 –1.5 15.3 4.5 PowerShares DB MS Engy 108.1 –11.2 –17.8 –34.9 Schwab Cap:Health Care 1,110.9 7.1 8.4 19.6 ProShares:UlS MC400 7.7 –6.8 –3.1 –26.6
One–Year Best Performers One–Year Worst Performers Ten–Year Best Performers Ten–Year Worst Performers
Assets Performance (%) Assets Performance (%) Assets Performance (%) Assets Performance (%)
Fund Name ($ millions) Dec. 4th–qtr 1–year Fund Name ($ millions) Dec. 4th–qtr 1–year Fund Name ($ millions) 4th–qtr 1–year 10–year* Fund Name ($ millions) 4th–qtr 1–year 10–year*
ProShares:UlS MSCI Brz 32.7 12.1 –1.8 98.7 Direxion:Nat Gas Bull 3X 47.4 –59.7 –63.4 –97.1 ProFunds:Biotech;Inv 636.4 15.5 3.1 18.5 Direxion:M SC Br 2x;Inv 7.9 –9.5 –0.3 –34.2
DB Crude Oil Db Sht ETN N.A. 28.8 53.8 94.6 VelShs 3x Long Crude ETN 1,037.1 –41.3 –61.6 –91.6 PowerShares Dyn Pharm 1,663.5 9.0 9.3 17.1 ProFunds:UltSh NAS;Inv 12.4 –19.7 –25.5 –29.7
ProFunds:UltSh Latin;Inv 10.2 12.6 5.3 86.6 VelShs 3x Long Nat Gas 342.0 –4.5 –60.9 –87.1 Fidelity Sel Bio Tech 15,086.8 12.8 13.7 16.9 Rydex:Inv NAS 2x;H 34.3 –20.0 –25.3 –29.2
DB Commodity Db Sht ETN N.A. 17.4 38.8 78.4 Direxion:Brazil Bull 3X 38.3 –22.8 –23.2 –86.9 T Rowe Price Hlth Sci 14,107.6 7.4 13.0 16.8 ProFunds:UltSh Sm-Cp;Inv 8.7 –9.7 –2.1 –29.1
ProShs II:UlS Blm CrO 123.1 32.0 52.2 70.8 Direxion:Gold M Id Bl 3X 650.6 –4.8 –16.0 –78.1 Fidelity Adv Biotech;A 3,779.3 11.1 11.1 16.2 ProFunds:UltSh Md-Cp;Inv 2.0 –7.3 –5.0 –26.5
ProShs II:UlS Blm Nat Gs 11.4 –8.0 43.7 66.3 VelShs Dly 2x VIX ST ETN 299.3 5.5 –50.7 –77.7 iShares:Nasdaq Biotech 8,426.5 11.8 11.5 16.1 ProFunds:UltraBear;Inv 15.2 –14.5 –10.0 –22.2
VelShs 3x Inv Crude ETN 167.2 46.8 82.3 64.8 ProShs II:UltVIX STF ETF 527.6 5.4 –50.9 –77.6 Pru Jenn Health Sci;A 3,412.9 5.1 5.0 15.8 ProFunds:UltSh Dow30;Inv 4.4 –15.5 –8.5 –21.8
ProShs II:UlS Blm Comm 8.1 5.7 22.7 61.7 ProShs II:Ult Blm CrO 871.0 –28.9 –43.7 –75.2 Rydex:Biotechnology;Inv 627.3 10.1 8.8 15.3 Rydex:Inv S&P 2x;H 48.6 –14.5 –10.1 –21.7
DB Base Metals Db Sh ETN N.A. –6.4 12.3 61.1 Direxion:Latin Bull 3X 9.0 –17.8 –18.1 –74.9 Rydex:NASDAQ 2x;H 330.7 19.9 13.7 15.2 Rydex:Inv Dow 2x;H 29.2 –15.6 –8.8 –21.0
DB Crude Oil Short ETN N.A. 14.4 25.7 50.9 Direxion:Jr Mnr Bull 3X 112.6 1.7 –17.1 –74.4 ProFunds:UltraNASDAQ;Inv 267.4 19.9 13.7 15.1 ProFunds:Prec Metals;Inv 13.9 –0.3 –48.3 –19.6
Catalyst Macro Strat;I 149.9 –1.9 16.3 49.8 ProShs II:Ult Blm Nat Gs 33.8 –1.7 –42.0 –69.9 Franklin Str:BD;A 1,682.0 9.9 5.5 15.0 ProFunds:Sh Real Est;Inv 3.5 –7.7 –6.6 –17.6
VelShs 3x Inv Nat Gas 57.4 –21.9 57.2 48.6 ProShares:Ult MSCI Braz N.A. –12.0 –10.0 –69.6 ProFunds:Internet;Inv 110.4 19.1 30.8 14.8 ProFunds:Sh NASDAQ;Inv 5.1 –10.4 –14.5 –14.8
Mrkt Vctrs:ChinaAMC SME 58.1 0.5 22.9 45.9 Direxion:Russia Bear 3x 54.5 25.4 –7.9 –67.0 T Rowe Price Glbl Tech 2,622.6 15.4 21.1 14.3 Rydex:Inv NAS Str;Inv 69.2 –10.2 –11.9 –13.6
United States Short Oil 21.1 15.3 26.7 45.9 iPath Bloomberg NatGas A 5.4 0.9 –42.1 –63.3 Fidelity Sel SW & IT Svc 3,277.9 12.6 10.5 14.1 ProFunds:Mobile Tel;Inv 4.0 –2.2 7.9 –13.1
Direxion:Retail Bull 3X 67.1 –2.1 21.5 44.5 ProFunds:UltraLatin;Inv 12.0 –13.7 –12.7 –61.8 Fidelity Sel Retailing 1,894.0 7.9 18.4 14.0 ProFunds:Sh Sm-Cap;Inv 11.8 –4.8 –0.6 –12.9
Direxion:EnergyBear 3X 60.8 32.1 –10.5 39.6 C-Tracks ETN Citi Vol TR N.A. 1.7 –48.5 –61.3 BlackRock:HS Opp;A 6,080.6 8.4 11.0 14.0 Midas Fund 10.6 –6.6 –28.3 –12.8
WisdomTree:Jpn Hgd HC 19.2 1.1 18.9 39.0 Direxion:EnergyBull 3X 476.8 –30.6 –8.5 –61.2 Fidelity Sel IT Svcs 2,093.9 5.2 13.1 13.8 Rydex:Cmdty Str;H 13.6 –17.4 –34.6 –12.6
DB Commodity Short ETN N.A. 8.7 18.5 36.3 Frst Tr:ISE Rev Nat Gas 208.4 –22.2 –19.8 –59.1 T Rowe Price Media/Tele 3,614.3 10.8 12.0 13.7 Rydex:Inv Rus 2000 Str;H 21.9 –4.8 0.1 –12.2
ProShares:UlS OIl Gas 39.5 21.4 –5.4 34.6 Direxion:M LA Bl 2x;Inv 4.5 –11.8 –10.8 –57.8 Fidelity Sel Health 8,994.6 9.7 6.6 13.6 ProFunds:Banks;Inv 25.0 8.5 –1.8 –11.5
UBS E-TRACS 1xMo SA MLP 5.8 2.0 –0.5 34.5 Yorkville Hi Inc MLP ETF 124.0 –25.0 –29.3 –57.0 Janus Glbl Life Sci;T 4,735.7 4.8 8.2 13.5 Oppenheimer Com S TR;A 270.0 –11.6 –27.7 –11.4
ProFunds:Internet;Inv 110.4 –3.4 19.1 30.8 MainStay:Cushing REI;A 102.8 –20.0 –24.0 –56.5 Fidelity Sel Pharm 2,031.8 6.1 8.2 13.5 ProFunds:Sh Oil&Gas;Inv 5.0 –2.0 18.1 –11.4
iPath ETN ShEn MSCI EM 1.7 3.4 –2.2 29.4 Frst Tr II:Indxx Gl Agri 4.9 –12.3 –20.0 –56.0 Brown Cap Sm Co;Inv 2,796.9 9.2 8.8 13.0 Rydex:Inv Md-Cp Str;H 22.6 –3.4 –1.0 –11.3
Deutsche Hvst CSI500 ChA 35.9 1.4 26.5 28.7 UBS E-TRACS 2x LL Al MLP 220.2 –4.3 –5.4 –55.9 Fidelity Adv Hlth;A 3,080.6 9.0 6.0 12.9 PowerShares WldHill CE 104.2 16.6 –8.6 –10.5
DB Base Metals Short ETN N.A. –3.2 6.2 28.3 Mrkt Vctrs:Coal 47.3 –11.8 –17.7 –55.1 Hartfd:Healthcare HLS;IA 844.0 11.4 13.2 12.7 Comstock Cap Val;A 42.4 –7.5 –4.7 –10.3
ALPS Medical Break 170.8 –1.5 13.7 28.1 Highland:Energy MLP;Y 39.0 –19.4 –37.1 –54.8 PRIMECAP:Odyssey Ag Gr 6,664.3 10.9 4.6 12.7 ProFunds:Rs Rt Opp;Inv 61.8 1.9 –1.5 –10.2
DB Agriculture DS ETN N.A. 0.6 3.6 27.6 iPath ETN S&P GSCI CTR A 768.8 –19.1 –30.6 –53.4 ProFunds:Health Care;Inv 58.9 12.2 6.4 12.6 Leuthold:Grizzly Short 234.4 –7.9 3.8 –10.1
Direxion:EmgMk Bear 3X 116.5 10.0 –6.5 25.3 DB Commodity Db Lng ETN N.A. –15.9 –28.8 –53.3 Vanguard Health Care;Adm 51,725.5 8.7 12.7 12.5 Direxion:M EM Bl 2x;Inv 3.0 –1.8 –34.5 –10.0
Columbia:AbsRtn C&I;I 56.7 1.0 11.5 24.3 Direxion:Jr Mnr Bear 3X 53.9 –14.5 –23.1 –52.7 Alger II:Spectra;A 5,715.1 10.6 9.1 12.4 ProFunds:Bear;Inv 27.3 –7.3 –4.9 –9.9
VelShs 3x Inverse Gold 20.0 –0.1 12.6 22.8 SPDR S&P Metals&Mining 231.7 –6.1 –9.8 –50.5 Oberweis:China Opps 117.7 12.3 –2.2 12.4 Newmark Risk-Mgd Opp 6.2 3.4 –19.2 –9.7
LoCorr:Lng/Sh Comm Str;I 45.6 6.7 11.1 22.6 Direxion:China Bull 3X 153.1 –12.0 0.3 –50.5 ProFunds:Pharmaceut;Inv 17.7 12.9 5.8 12.0 Rydex:Inv S&P500 Str;Inv 122.3 –7.4 –4.4 –9.4
Rydex:MR NASDAQ-100 2S;H 6.1 –3.2 19.5 22.5 Direxion:EmgMk Bull 3X 168.8 –12.2 –4.6 –49.9 Fidelity Sel Chemicals 1,201.4 12.9 –5.1 11.9 Rydex:Precious Metls;Inv 31.3 –0.4 –30.5 –8.2
ProFunds:UltSh EM;Inv 9.2 7.2 –12.3 21.8 iShares:MSCI Brz Sm-Cap 25.5 –3.7 –0.9 –49.4 Hartfd:Healthcare;A 1,695.8 11.0 12.7 11.9 Direxion:M NR Bl 2X;Inv 5.2 –6.7 –47.5 –7.3
Frst Tr:DJ Internet Idx 4,810.6 –2.1 12.9 21.8 Mrkt Vctrs:Brazil Sm Cap 71.5 –5.2 1.7 –48.9 Eaton Vance AC SMID;I 6,705.3 7.4 9.7 11.9 Deutsche Gold&Prec;S 70.3 0.5 –26.7 –7.0
Rydex:Inv EM 2x Str;H 10.5 7.3 –11.9 21.2 ProFunds:Prec Metals;Inv 13.9 –2.7 –0.3 –48.3 Fidelity OTC 13,453.9 13.3 10.9 11.8 ProFunds:UltraJapan;Inv 57.3 11.4 8.4 –6.9
T Rowe Price Glbl Tech 2,622.6 –0.6 15.4 21.1 PowerShares S&P SC Enrgy 38.4 –17.6 –3.7 –47.7 Deutsche H&W;S 391.9 7.8 6.9 11.8 Nysa Srs Tr:Nysa Fund 1.9 2.9 –5.1 –6.7
iShares:MSCI Denmark Cp 71.8 2.2 6.7 21.0 VelShs 3x Long Silver 105.0 –8.0 –19.3 –47.5 Fidelity Sel Med Equip 2,014.6 9.6 7.1 11.6 US Glbl:Wld Prec Min 77.2 2.5 –15.6 –6.7
ProShares:UlS MSCI EM 72.1 6.7 –3.7 20.9 Direxion:M NR Bl 2X;Inv 5.2 –21.9 –6.7 –47.5 Parnassus:Endeavor 1,398.4 6.5 3.3 11.6 Federated Prudent Bear;A 337.2 –5.7 –4.5 –6.7
Matthews Asia:Japan;Inv 1,760.5 –0.4 10.4 20.8 Glbl X Copper Miners ETF 17.5 –4.2 –5.4 –46.7 PowerShares QQQ Trust 1 43,058.5 10.2 9.5 11.6 Crdt Suis Cmdty Rtn;Inst 4,040.3 –10.3 –25.0 –6.5
Burnham Inv:Fnl Svc;A 199.8 –2.3 10.0 20.4 ProFunds:OE S&D US;Inv 6.8 –22.9 –16.7 –46.6 Shelton:Nasdaq-100;Dir 278.9 10.0 9.2 11.6 Vanguard Prc M&M;Inv 1,551.5 –5.6 –29.4 –6.0
PowerShares S&P SC H Cre 252.2 –0.4 10.5 20.3 iPath Bloomberg Nickel A 5.7 –1.3 –17.7 –46.5 PowerShares Dyn Biotch 428.2 11.1 2.0 11.5 Amer Cent:Gl Gold;Inv 241.5 1.2 –22.8 –5.9
iShares:MSCI Ireland Cp 170.0 2.0 7.5 19.9 Frst Tr II:Indxx Gl NR I 12.4 –9.3 –10.8 –45.8 Delaware Pld:Foc Smid Gr 53.2 6.1 7.4 11.5 ProFunds:Financials;Inv 17.9 7.7 –3.2 –5.7
ProShs II:UlS Gold 81.1 –0.4 8.3 19.9 Catalyst MLP&Infr;A 15.1 –18.4 –22.9 –45.7 ProFunds:Cnsmr Svcs;Inv 54.2 7.6 6.8 11.5 FIDELITY Sel Cns Fin 109.7 –0.8 –5.0 –5.7
PowerShares NASD Intrt 281.4 –1.8 15.9 19.4 DB Base Met Db Long ETN N.A. 6.4 –13.7 –45.6 Alger Inst:Cap Apprec;I 3,903.2 14.2 12.1 11.5 ProFunds:Rs Rt Op 10;Inv 21.1 1.0 –3.3 –5.5
ProShares:Sht Oil & Gas 13.3 10.7 –1.8 19.2 ETFis InfraCap MLP 19.5 –11.2 –13.6 –45.6 Janus Triton;T 6,985.9 6.1 1.2 11.5 BlackRock:En & Res;A 267.1 –10.1 –38.4 –5.4
Fidelity Sel Retailing 1,894.0 –1.7 7.9 18.4 ProShs II:Ult Blm Comm 7.6 –6.5 –20.7 –45.5 Berkshire:Focus N.A. 8.6 13.3 11.4 US Glbl:Em Europe 48.5 –3.5 –20.7 –5.3
PowerShares Gldn DrgnChi 183.3 1.3 27.8 18.2 United States Brent Oil 83.0 –17.6 –26.2 –45.4 Clough China;I 72.1 2.3 –9.2 11.4 PIMCO:Comm RR Str;Inst 6,988.1 –10.7 –25.7 –5.0
Morg Stan I:Gl Opp;A 224.6 –1.3 10.5 18.2 United States Oil Fund 3,291.8 –14.8 –24.4 –45.3 Eaton Vance Ww H&S;A 1,707.1 10.1 8.4 11.3 Fidelity Sel Gold 806.0 0.3 –17.9 –4.6
ProFunds:Sh Oil&Gas;Inv 5.0 10.6 –2.0 18.1 iPath Bloomberg Energy A 1.0 –13.1 –27.4 –45.3 Saratoga:Tech&Comm;I 43.0 7.6 5.4 11.3 T Rowe Price Int:Em Euro 160.6 1.5 –10.1 –4.5
Turner Med Sci L/S;Inv 137.5 –2.3 –2.1 18.0 Salient MLP & En Infr;I 1,266.7 –14.9 –17.8 –44.0 Kinetics:Medical;NL 29.1 7.9 6.6 11.3 PIMCO:Stk+ Short;Inst 2,381.4 –5.8 –5.5 –4.2
KraneShs:CSI China Intrt 153.5 –0.9 28.8 17.8 ProShares:Ult Oil & Gas 126.3 –20.9 –3.6 –43.9 Alger:Capital Apprec;A 2,606.1 11.6 9.7 11.2 Rydex:Banking;Inv 29.4 1.9 –4.9 –4.2
WisdomTree:Jpn SC Div 358.2 0.9 8.5 17.7 Mrkt Vctrs:Rare E/SM ETF 33.9 –7.8 –4.2 –43.6 Vanguard Cnsmr Stp;ETF 2,938.3 7.2 6.0 11.2 US Glbl:Global Res 105.9 3.6 –28.4 –4.0
ETFis BioSh Biotech Prod 23.7 –2.6 11.4 17.6 Eagle MLP Strategy;I 778.3 –15.6 –17.5 –43.2 Matthews Asia:India;Inv 1,540.1 –1.3 0.9 11.1 RS Inv:Gl Nat Res;A 1,897.9 –6.1 –38.2 –4.0
AQR:Eqty Mkt Ntrl;I 190.9 1.8 2.3 17.6 iPath ETN P Beta Nickel 0.8 –1.1 –15.6 –43.1 Vanguard Hlth Cr Idx;ETF 6,548.2 8.8 7.2 11.1 Franklin Gld&Pr Mt;A 594.9 –4.5 –22.4 –3.9
ProShares:UlS MSCI MexCI 1.3 10.6 0.8 17.6 Glbl X Brazil Cnsmr ETF 2.9 –2.0 2.5 –42.2 MFS Technology;A 460.8 10.4 10.4 11.1 PowerShares Dyn Oil 52.4 –3.0 –31.2 –3.7
ProShares:UltP QQQ 1,402.1 –5.5 30.4 17.4 Mrkt Vctrs:Indonesia SC 5.8 2.3 7.5 –42.1 WellsFargo:Growth;Inst 9,380.0 6.5 2.9 11.1 Hussman Inv:Strat Gro 635.4 –7.4 –8.4 –3.7
Nuveen Tw Japan;I 16.9 –0.5 6.9 17.4 US Diesel-Heating Oil 3.1 –19.7 –31.9 –42.0 USAA NASDAQ-100 Idx 931.8 10.1 9.1 11.0 Fidelity Sel Nat Gas 340.8 –10.3 –36.8 –3.7
DB Gold Double Short ETN N.A. –0.4 9.0 17.4 Mrkt Vctrs:Steel 50.5 –8.3 –4.8 –41.9 Columbia:Sel C&Info;A 4,160.9 10.8 9.1 11.0 GAMCO Mathers;AAA 14.8 –4.7 –3.0 –3.6
WisdomTree:Jpn Hgd SC Eq 199.4 –1.5 9.0 17.3 Direxion:Zacks MLP HI Sh 73.7 –13.9 –16.6 –41.9 Fidelity Sel Cnsmr Stp 2,748.0 8.2 1.9 11.0 J Hancock II:NatRs;NAV 610.1 –4.0 –28.9 –3.6
AQR:Lng-Sht Eqty;I 432.3 0.5 5.9 17.0 PowerShares DB MS Oil 474.3 –13.2 –19.6 –41.5 Sel Sector:C Stp SPDR 7,825.5 7.7 6.8 10.9 Invesco Gold&Prec;A 185.2 –1.7 –24.8 –3.4
ProFunds:Sh Pr Mtls;Inv 20.1 –1.5 –8.5 16.7 DB Crude Oil Long ETN N.A. –13.5 –19.6 –41.3 Matthews Asia:China;Inv 799.5 10.3 2.4 10.9 Oppenheimer Gld & Sp;A 688.1 1.3 –23.1 –3.2
Leland TR VNCP Idx;I 12.6 –0.3 17.0 16.4 iShares:MSCI Brazil Cap 1,778.3 –5.0 –2.9 –41.3 ProFunds:Cnsmr Goods;Inv 15.3 8.7 5.8 10.8 SunAmerica:Itl Div S;A 102.2 –0.3 –16.8 –3.2
iShares:MSCI Japan Min V 34.0 2.1 9.0 16.4 Glbl X MSCI Colombia ETF 57.2 2.5 –8.4 –41.3 J Hancock III:DVMC;I 11,732.2 5.0 2.1 10.8 USAA Prec Met&Min;Fund 525.6 –2.0 –26.5 –3.1
Royce Fd:Intl Prm;Svc 9.8 1.5 8.5 16.2 iShares:MSCI ColombiaCap 12.8 3.3 –7.9 –40.9 Oppenheimer Intl SMC;A 5,665.4 5.2 14.9 10.8 Rydex:Energy Svcs;Inv 19.4 –1.4 –31.8 –3.1
Rainier:Intl Discv;Instl 111.1 0.4 3.5 15.9 United States Nat Gas 513.5 –0.6 –25.1 –40.6 Reynolds:Blue Chip Gro 116.7 4.4 1.5 10.8 Deutsche Enh Com S;Inst 684.3 –6.1 –16.9 –3.0
ProShares:UlS Bas Mat 17.3 7.2 –19.9 15.8 Guggenhm Cdn Energy ETF 27.8 –11.2 –7.4 –40.5 Firsthand Tech Opptys 113.7 6.2 4.3 10.8 US Glbl:Gold&PM 54.6 2.4 –4.8 –2.9
Note: For funds with multiple share classes, only the largest is shown *Annualized N.A. = not applicable, fund is too new r

THE EXPERTS
Insights on Investment Plans and a New Year

Make a Plan, Make It Clear Most important, realize that our desire for Insist Your Adviser Sign This Document
How did you spend August 2015? This was short-term insight often leads us to make deci- The fiduciary debate took front and center
the month we were all reminded, as markets re- sions that are not in our long-term financial in- stage in 2015. At the heart of the debate is
acted to a devalued yuan and plunging oil terests. So don’t make portfolio decisions soon whether financial professionals who provide
prices, how comfortable we are with risk. after you’ve read or heard a forecast. Wait sev- what investors reasonably believe is investment
For me, the biggest lesson of 2015 was the eral weeks. Give your emotions and the intuitive advice should be legally required to serve their
importance of having a written investment-pol- side of your brain time to cool down, which will clients’ best interest pursuant to an enforceable
icy statement. During August, I noticed that in- help you to make better long-term decisions. and meaningful best-interest standard and to
dividuals who had a clear, concise and docu- —Charles Rotblut, vice president, American mitigate and manage conflicts of interest.
The Experts are an mented investment plan were least likely to Association of Individual Investors One way for investors to protect themselves
online group of industry, have knee-jerk, counterproductive reactions to is to present any financial professional from
i i i
academic and cultural market volatility. whom they expect to receive investment advice
thinkers who blog about Here are the five points that any investment with this fiduciary oath for signature. The fidu-
topical issues in their fields policy statement should address. Seven Financial Tips for 2016 ciary oath is a simple but powerful document
of expertise. Edited experts Your target asset allocations for stocks, Here are seven financial tips that you can that carries legal significance. By signing his or
follow. For more, go to bonds and hard assets. use throughout the year: her name, the financial adviser is legally com-
WSJ.com/Reports. Your trigger points for rebalancing (for ex- 1. File your taxes early to avoid the unpleas- mitting to adhere to duties of care and loyalty,
ample, moves of plus or minus 5% for major as- ant surprise of being notified that you already which are central to protecting and serving an
set classes, and plus or minus 25% for sub- filed. When that happens it is usually because a investor’s interests.
classes). scammer has stolen your Social Security num- The oath states:
Clarity about where cash flows will come ber, filed electronically on your behalf, and I will always put your best interests first.
from to fund daily living expenses, which helps likely already is long gone with a big tax refund I will act with prudence; that is, with the
reduce fear when portfolio values decrease. leaving you to handle a huge mess. You do not skill, care, diligence and good judgment of a
An understanding of your willingness, abil- want tax identity theft to happen to you. professional.
ity and need to take risk so you understand why 2. Make an effort to consolidate your finan- I will not mislead you, and I will provide con-
you are subjecting yourself to this volatility. cial accounts by closing at least two. You are spicuous, full and fair disclosure of all impor-
Specific goals for your portfolio so you can not using them and you may be paying unnec- tant facts.
link the need for discipline with the outcomes essary fees. Focus more on activities that are I will avoid conflicts of interest.
that long-term, successful portfolio management more meaningful to you. I will fully disclose and fairly manage, in
produces. 3. Increase your contributions to your em- your favor, any unavoidable conflicts.
—Manisha Thakor, director of wealth strategies ployer retirement plan by a minimum of 1 per- If the adviser signs it, it suggests he or she is
for women at Buckingham and the BAM centage point. Ideally, you should be maximiz- committed to providing true advice; if the ad-
Alliance, a community of independent registered ing your tax-deferred contributions. At the very viser refuses to sign it, it suggests he or she
investment advisers least, aim to contribute enough to capture all of may be less committed to providing advice and
the matching funds from your employer. more interested in selling products.
i i i
4. Get started on your estate planning by —Micah Hauptman, financial services counsel,
making that call to schedule a meeting with an Consumer Federation of America
Track Trends, Not Forecasts estate-planning attorney. It is not pleasant to
i i i
If you’re reading this, you probably want to talk about your own demise, but you owe it to
know what is going to happen this year. your loved ones to make sure everything is in
Well, I have some bad news: Forecasts are in- order in case something happens to you. What to Do as Rates Rise
herently wrong. 5. Are you enjoying the savings at the gas The Federal Reserve, as long expected, raised
More than two-thirds of companies exceed pump and in your natural-gas utility bills? Vow the benchmark federal-funds rate last month
their consensus earnings estimates on a given to add these savings to your emergency fund or from the level established seven years ago dur-
quarter, because analysts can’t accurately pre- a savings account for a specific short-term goal ing the worst of the financial crisis. So what
dict how much money the companies they before you spend it all and then wonder where should consumers be doing now?
closely follow will earn. Market strategists, in that money went. This initial increase has an almost impercep-
turn, take the earnings projections of individual 6. We all know health care is expensive. In- tible effect on the household budget. The dif-
analysts and use them to forecast where the vest in your lifestyle today by buying that gym ference of a quarter percentage point to some-
S&P 500 will be at the end of the year. membership and actually begin using it. If you one mulling a $25,000 car loan is just $3 a
Bonds are no different. In fact, yield fore- are not as motivated, perhaps hiring a personal month.
casting is even more difficult because it’s de- trainer may be what you need to do to get you What consumers should be mindful of is the
pendent on projecting future economic trends back to working on your health. potential cumulative effect of a series of rate
and sentiment toward credit risk. 7. Take that trip you have been talking about increases over the next couple of years. It
Rather than focus on forecasts, think about for years. We are not getting any younger. Use could take your adjustable-rate mortgage from
what trends are currently known and therefore your frequent-flier miles if you have any lying 3% to 5%; your home-equity line of credit from
likely priced into the financial markets already. around. They only continue to get devalued as 4% to 6%; and your credit-card rate from 15%
Doing so will tell you what outcomes are ex- time goes by. to 17%.
pected and will help you direct your attention —George Papadopoulos is a fee-only wealth —Greg McBride, senior vice president and chief
to what might not be expected. manager in Novi, Mich. financial analyst, Bankrate.com
PRUDENTIAL INVESTMENTS » MUTUAL FUNDS
GET THE STORY BEHIND OUR STAR PERFORMANCE.

OVERALL RATING 3-YEAR 5-YEAR 10-YEAR
PRUDENTIAL SHORT-TERM CORPORATE BOND FUND, INC. PIFZX Morningstar Overall RatingTM for
Short-Term Bond Category 490 490 411 283 Class Z shares as of 11/30/2015.
Morningstar measures risk-adjusted
PRUDENTIAL TOTAL RETURN BOND FUND, INC. PDBZX returns. The overall rating is a weighted
Intermediate-Term Bond Category 949 949 822 595 average based on a fund’s 3-, 5-, and
PRUDENTIAL JENNISON GLOBAL OPPORTUNITIES FUND PRJZX 10-year star rating.
World Stock Category 1,001 1,001 — —
PRUDENTIAL JENNISON UTILITY FUND PRUZX Visit PrudentialMutualFunds.com
Utilities Category 63 63 61 56 to learn how Prudential Investments
builds funds that can help investors
PRUDENTIAL GLOBAL REAL ESTATE FUND PURZX in a variety of market environments.
Global Real Estate Category 191 191 154 48
PRUDENTIAL INCOME BUILDER FUND PDCZX
Tactical Allocation Category 253 253 138 52
Star ratings shown are for Class Z shares, which are available to individual investors through certain retirement and wrap fee
programs, and to institutions at an investment minimum of $5,000,000. Performance by share class may vary. In addition to
the ones shown above, other classes, which contain either a sales load or a contingent deferred sales charge, are also available.
These expenses will generally lower total fund return. Please see the prospectus for additional information about fees, expenses
and investor eligibility requirements.
Consider a fund’s investment objectives, risks, charges, and expenses carefully before investing. The prospectus and summary prospectus contain this and other
information about the fund. Contact your financial professional for a prospectus or summary prospectus. Read them carefully before investing.
Only eligible investors, including various institutional investors and investors in certain mutual fund wrap or asset allocation programs, may purchase Class Z shares.
See the prospectus for eligibility requirements.
Mutual fund investing involves risks. Some funds are riskier than others. The risks associated with investing in these funds include but are not limited to: derivative
securities, which may carry market, credit, and liquidity risks (All funds); short sales, which involve costs and the risk of potentially unlimited losses (PIFZX, PDBZX,
PRUZX); leveraging, which may magnify losses (PDCZX, PIFZX, PDBZX); high yield (“junk”) bonds, which are subject to greater market risks (PDCZX, PIFZX, PDBZX);
small/mid-cap stocks, which may be subject to more erratic market movements than large-cap stocks (PRJZX, PDCZX); foreign securities, which are subject to currency
fluctuation and political uncertainty (PURZX, PDBZX, PRUZX, PRJZX, PDCZX); real estate, which poses certain risks related to overall and specific economic conditions
as well as risks related to individual property, credit, and interest-rate fluctuations (PURZX); and mortgage-backed securities, which are subject to prepayment and
extension risks (PIFZX, PDBZX). Sector funds and specialty funds may not be suitable for all investors. Such funds are non-diversified, so a loss resulting from a particular
security will have greater impact on the fund’s return (PURZX, PRUZX). Fixed income investments are subject to interest rate risk, and their value will decline as interest
rates rise (PIFZX, PDBZX). The risks associated with each fund are explained more fully in each fund’s respective prospectus. There is no guarantee a fund’s objectives
will be achieved.
Some Morningstar Ratings may not be customarily based on adjusted historical returns. If so, an investment’s independent Morningstar Rating metric is compared against the
retail mutual fund universe breakpoints to determine its hypothetical rating for certain time periods. For each fund with a 3-year history, Morningstar calculates a Morningstar
Rating based on a Morningstar risk-adjusted return measure that accounts for variation in a fund’s monthly performance, including the effects of sales charges, placing more
emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35%
receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Funds were rated against U.S.-domiciled funds. Other share classes may have different
performance characteristics. Past performance does not guarantee future results.
© 2015 Morningstar, Inc. All rights reserved. The information contained herein (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and
(3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
Mutual funds are distributed by Prudential Investment Management Services LLC (PIMS), a Prudential Financial company, member SIPC. Prudential Real Estate Investors and
Prudential Fixed Income are units of Prudential Investment Management, Inc. (PIM). All are Prudential Financial companies. © 2015 Prudential Financial, Inc. and its related
entities. Prudential Investments, Prudential, Jennison, the Prudential logo, the Rock symbol and Bring Your Challenges are service marks of Prudential Financial, Inc., and its
related entities, registered in many jurisdictions worldwide.
0246839-00011-00

NEWS CHALLENGE: THE MONTH IN FUNDS AND INVESTING
Test Your Smarts on the Dow, Junk, Robo Advice

ANSWER: A. But Mr. Shkreli also did every-
BY VICTOR REKLAITIS
thing described in B, C and D.
THE STOCK MARKET slumped in Decem-

ber, leaving the Dow Jones industrials with
a 2.2% drop for 2015.
8 China’s Shanghai Composite, which
fell hard in the summer, ended 2015
lower by how much?
Analysts blamed much of the selling on A. Down 8.9%
crude-oil prices continuing to crumble, as B. Down 12.5%
well as on worries around junk bonds and C. Down 32.2%
the much-awaited rise in U.S. interest D. It was actually up 9.4%
rates. Meanwhile, a widely criticized player
in the drug industry found himself in hand- ANSWER: D. The Shanghai stock benchmark
cuffs, and the buzz around robo advisers has risen for two years in a row, gaining
ramped up. 67% over that time. But it started out 2016
How much do you know about last with a dive, losing 6.9% on Jan. 4, the first
month’s news in fund investing and mar- trading day of the year.
kets? Here’s a quiz to test your knowledge.
1 Before 2015, when did the Dow last

suffer an annual drop?
9 As the Federal Reserve last month
raised its benchmark interest rate,
projections showed officials’ expecta-
A. 2011 B. 2010 tions for the next three years. What do
C. 2009 D. 2008 they anticipate for the fed-funds rate?
A. 1.375% by late 2016, 2.375% by late
ANSWER: D. The blue-chip gauge hadn’t en- 2017, 3.25% by late 2018
MICHAEL NAGLE/BLOOMBERG NEWS

dured a yearly fall since 2008, when it B. 1.00% by late 2016, 2.00% by late 2017,
tumbled 34% as the financial crisis hit. 3.00% by late 2018
C. 1.375% by late 2016, 2.25% by late
2 As oil prices slid again in December,

Brent crude—the global benchmark—
hit its lowest level since when?
2017, 2.00% by late 2018
D. They declined to give projections,
saying it is too challenging.
A. 2009 B. 2008
C. 2004 D. 2000 ANSWER: A. A Journal article said the ex-
pectations imply four quarter-percentage-
ANSWER: C. Brent crude settled at $36.11 a This is how 2015 ended on the NYSE. This year hasn’t started any happier. See Question No. 1. point rate rises this year, four next year
barrel on Dec. 22, marking its lowest set- and three or four in 2018, and they depend
tlement since July 2004. It dropped 35% in to an investor who buys up assets from A. Apple and Google parent Alphabet on whether the Fed’s forecasts for the
2015, while the U.S. oil benchmark lost companies in distress. B. Amazon.com and Facebook economy—which have frequently been
30.5%. C. IBM and Oracle wrong in this latest expansion—hold up.
3 Activist investor Carl Icahn won a

bidding war for what company by
5 Fill in the blank: As junk bonds tum-
bled in December, the executive
overseeing Wall Street’s top high-yield
D. Microsoft and PayPal
ANSWER: A. Apple and Alphabet. The Del- 10 Fill in the blank: Covepoint Capital
Advisors LLC’s Melissa Ko said she
agreeing to buy it for $1 billion? bond desk said “you can still _____ in high oitte study also predicted that robo advis- produced a 120%-plus return last year
A. Warby Parker B. DraftKings yield.” ers, meaning automated investing services, partly with bets against the euro. Re-
C. Pep Boys D. Volkswagen A. crush it will attract $5 trillion to $7 trillion in in- garding the euro’s rally against the dol-
B. get crushed vestor money within a decade. lar in late 2015, she said: “I think it’s
ANSWER: C. Japanese tire maker Bridge- C. feel the pain ____”
stone Corp. had also sought to buy the car
parts and repair chain in Philadelphia,
whose full name is Pep Boys—Manny, Moe
D. make good money
ANSWER: D. J.P. Morgan Chase & Co.’s

7 Fill in the blank: After an indictment
for alleged fraud, controversial
pharmaceutical executive Martin Shkreli
A. a sign to end those bets
B. not just a sucker’s rally
C. a head fake
& Jack. global head of debt capital markets, Jim said authorities targeted him because of D. just a little blip
Casey, said the junk-bond market wasn’t in his _____.
4 Fill in the blank: The demise of a

Third Avenue junk-bond fund
spooked investors last month and
a bubble. “We don’t believe the market is
overvalued,” he said in mid-December, add-
ing that “you can still make good money in
A. drug-price increases and over-the-top
public persona
B. $2 million purchase of the rights to a
ANSWER: D. The South Korea-born manager
said she thinks the euro will fall below par-
ity against the dollar in the coming year,
marred the career of Martin Whitman, high yield.” Wu-Tang Clan rap album even as some investors “have become dis-
known as a “legendary ____ investor.” C. decisions to mock Bernie Sanders and appointed and soured on the trade.”
A. value
C. angel
B. vulture
D. socially responsible 6 A study from Deloitte Consulting LLP
suggested tech companies could get
into the robo-adviser space. Which com-
temporarily adopt an accent
D. live Internet video streams showing
himself playing chess and guitar
Mr. Reklaitis is a markets writer for
MarketWatch in London. Email him at
ANSWER: B. Vulture in this context refers panies were mentioned? vrek@marketwatch.com.
WORK HARD. PLAY HARD.

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Visit tdameritrade.com/rollover for details or call 800-213-4583.

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