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FRIDAY - SUNDAY, NOVEMBER 4 - 6, 2016 ~ VOL. XXXIV NO. 196 WSJ.com EUROPE EDITION
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What’s Court Hands Brexit to Parliament

News U.K. government can’t
begin pullout without
plans and steer the country to-
ward a “soft” exit that main-
tains more ties to the bloc and
Bank of England
Changes Course
see scenarios under which
their key interest rate could
either rise or fall, he said.
Boosted
How many dollars a pound buys
a vote by lawmakers, a more-open immigration pol- Since the June vote, mar- Minute-by-minute data
Business & Finance icy. The central bank played down kets have remained jittery and
complicating process The government said it the odds of a further rate cut some companies have put
$1.25
would appeal the verdict to amid the economy’s surprising plans on hold, though prevote
he Bank of England
T played down the chances
of a rate cut soon, saying it
BY ALEXIS FLYNN
AND JENNY GROSS
the Supreme Court, which is
now set to hear the case in
post-Brexit-vote strength. A3 forecasts of economic catas-
trophe have so far proved too
early December. If Thursday’s dire.
expects Brexit’s impact to be 1.24
LONDON—A U.K. court put ruling is upheld, lawmakers chose to break away from the The ruling on Thursday
less than first thought. A3
a hurdle in front of the coun- would have a chance to pres- bloc in a June referendum. lifted the pound; the currency
 The pound surged after a
try’s route out of the Euro- sure Mrs. May to soften her Bank of England Gov. Mark later extended its gains after
court ruled that the U.K.
pean Union, ruling that Prime terms in breakup negotiations Carney—who warned of the the Bank of England played
government needs parlia-
Minister Theresa May can’t with the EU. They could also impact of a Brexit before the down the chances of a further
mentary approval to trig- 1.23
start the process without ap- delay the process or even halt vote—called the court’s judg- cut in interest rates, saying it
ger an EU exit. B1, B4 8 a.m. 12 p.m. 4 p.m.
proval from Parliament. it. ment an example of the high expects the U.K. decision to
 Google rejected EU ac- The High Court decision of- Brexit proponents called degree of uncertainty that will leave the EU to weigh less *Through 7:30 GMT
cusations that it abuses its fers a potential opening to the ruling an attempt to over- surround the U.K.’s exit path. heavily on the economy next Source: WSJ Market Data Group
dominant position with its lawmakers to disrupt her turn the will of Britons who Central-bank policy makers Please see BREXIT page A2 THE WALL STREET JOURNAL.
internet shopping and ad-
vertising services. B1
 Hong Kong regulators
are cracking down on Euro-
Iraqi Forces Open Path for Civilian Exodus From Mosul FBI Feud
pean investment banks
over some of their IPOs. B5
 Credit Suisse reported a
surprise third-quarter profit,
Marked
as it curbed expenses and
sold a historic building. B5
 Société Générale’s profit
Probe of
slipped 2% but beat expec-
tations, helped by its invest-
ment-banking business. B7
Clinton
 OPEC expressed confi- BY DEVLIN BARRETT
dence that it would com- AND CHRISTOPHER M. MATTHEWS
plete a deal to curb oil out-
put later this month. B5
Secret recordings of a sus-
 Pharmaceutical firms pect talking about the Clinton
are spending millions to Foundation fueled an internal
fight groups advocating battle between FBI agents who
lower drug costs. B1 wanted to pursue the case and
corruption prosecutors who
 SpaceX may lose a space-
viewed the statements as
craft-launch order from In-
worthless hearsay, people fa-
marsat, a major customer. B3
MARKO DROBNJAKOVIC/ASSOCIATED PRESS

miliar with the matter said.

World-Wide

 Britain’s High Court  Clinton, Trump hunt new

ruled that Prime Minister territory in last stretch... A6
May can’t trigger a pullout  Mogul facing trial crossed
from the EU without Par- paths with nominees...... A7
liament’s approval. A1, A3  Opinion: The costs of
Clinton.................................... A12
 Secret recordings fueled IN POSITION: An Iraqi special-forces soldier holds up a helmet as a decoy as a sniper takes aim against Islamic State positions in Gogjali,
a battle between FBI agents on the eastern edges of Mosul. Thousands of residents left the city as Iraqi forces opened up a major road so people could escape. A4
and corruption prosecutors Agents, using informants
over whether to probe the and recordings from unrelated
Clinton Foundation. A1 corruption investigations,
thought they had found enough
 Both Trump and Clinton
are actively campaigning
in states that were consid-
ered to be safe territory
TURKISH MOVES HIT BUSINESS material to merit aggressively
pursuing the investigation into
the foundation that started in
for their rivals. A6 summer 2015 based on claims
made in a book by a conserva-
 Thousands of residents Postcoup crackdown endangers financial institutions and trust in economic management tive author called “Clinton
left Mosul as Iraqi forces Cash: The Untold Story of How
opened up escape routes so BY YELIZ CANDEMIR ish authorities took over 496 compa- say Mr. Erdogan’s relentless focus on and Why Foreign Governments
people could avoid the bat- nies, some with publicly held units, cit- rooting out perceived internal enemies, and Businesses Helped Make
tle against Islamic State. A4 Istanbul’s tightknit finance commu- ing a hunt for coup plotters. coupled with a consolidation of power Bill and Hillary Rich,” these
 Islamic State’s leader nity first felt the chill of Turkey’s post- The moves mark a sharp reversal for under an emergency decree, imperil people said.
broke his nearly yearlong coup crackdown in late July when a se- a country long seen as a free-market domestic financial institutions and The account of the case and
silence, calling for his fol- nior banker was hit with a criminal beacon among emerging nations, trust in the country’s $720 billion resulting dispute comes from
lowers to defend the complaint and stripped of his license. thanks to President Recep Tayyip Erdo- economy. Turkey’s Parliament, domi- interviews with officials at mul-
group’s strongholds. A4 Fear spread when regulators started gan’s embrace of pro-business policies. nated by Mr. Erdogan’s Justice and De- tiple agencies.
 A clash with the Taliban forcing banks to hand over internal cli- Turkey attracted international inves- velopment Party, or AKP, recently ex- Starting in February and
in Kunduz province left two ent communications, according to sev- tors in part because of the govern- tended emergency powers for three continuing today, investigators
U.S. special-forces troops and eral people familiar with the moves. ment’s lack of meddling. months. from the Federal Bureau of In-
at least 30 Afghans dead. A4 Then, over succeeding weeks, Turk- Now, investors and businesspeople Please see TURKEY page A8 Please see FBI page A6
 Lebanon’s new president
asked ex-Premier Hariri to
form a government, in a com- The Secret to Hostess’s Comeback: Disaster
promise with Hezbollah. A4
 Many Eastern Europeans
Making the Same Old Twinkies On the
have yet to reach Western i i i Tracks
income levels since commu-
nism fell, a study found. A5 Company’s new owners revive the spongy WRECKAGE: A
passenger train
snack by making only ‘strategic’ tweaks slammed into the
back of another

Inside BY ANNIE GASPARRO

AND JULIE JARGON
executive of Hostess Brands
LLC, which was bought out of
train in Karachi, a
southern port city
AKHTAR SOOMRO/REUTERS

liquidation in 2013. in Pakistan, killing

OFF DUTY W1 The revival of the 86-year- There were some strategic at least 20 people.
old company behind the Twinkie adjustments—includ- Left, an official
The Flavor of Twinkie, which briefly disap- ing extending its shelf life and reviewing the
peared four years ago, turned creating a deep-fried version. scene of the
The Moment on one bold decision. Let The turnabout has been suc- accident on
Twinkie be Twinkie. cessful enough to allow Host- Thursday.
CONTENTS Markets Digest..... B6 From the start, ess, which sells
Books..................... A9-11 Off Duty.............. W1-8
Business & Fin.. B1-4 Opinion.............. A12-13
the focus of the more than two bil-
Crossword.............. A14 Sports....................... A14 two investment lion snack cakes a
Finance & Mkts B5-8
Heard on Street.... B8
Mansion............ W9-14
U.S. News............. A6-7
Weather................... A14
World News........ A2-5
firms that bought
Hostess snack
brands was the fa-
year, to return to
the public stock
market, a move
Dreyfus Family Feud Ends Up in Court
€3.20; CHF5.50; £2.00; mous pale-yellow expected in com- A battle between the family their name for 165 years. documents from a trust that
U.S. Military (Eur.) $2.20
Twinkie
calorie tube with ing days. The com- behind Louis Dreyfus, one of the Dissatisfied with the steward- holds her family’s stake.
a cream-like filling. Executives pany is expected to trade un- world’s largest ship of Ms. Louis- That exit has been stalled by
decided they needed to stick to der the ticker symbol TWNK. commodities By Sarah McFarlane, Dreyfus, who a disagreement over the valua-
the indulgent nature of the Hostess products, such as traders, and its Katherine Dunn married into the tion, according to documents
product aimed at their biggest Twinkies and Ding Dongs, have chairman, Mar- and Maarten Van family, a wider filed in a Dutch court related to
group of customers, the men long enjoyed a place in Ameri- garita Louis- Tartwijk group of relatives a hearing held on June 21.
they internally refer to as can culture. Demand was never Dreyfus, has wants to whittle The battle pits a family at
s Copyright 2016 Dow Jones & “Bubba in a truck.” a problem. There was a rush on spilled into court as members of down its shareholding from 20% the heart of Europe’s business
Company. All Rights Reserved
“No one wants to see a diet Twinkies, Ho-Hos and Donettes the secretive clan try to exit to around 3%, according to peo- establishment against Ms.
Twinkie,” said Bill Toler, chief Please see TWINKIE page A8 from a business that has borne ple familiar with the matter and Please see SPAT page A2
P2GW309000-0-A00200-1--------AL
A2 | Friday - Sunday, November 4 - 6, 2016
Mosul Battle Resets Kurdish-Baghdad Ties
MIDDLE EAST CROSSROADS
YAROSLAV TROFIMOV
ERBIL, Iraq—Residents of
the Kurdistan region in north-
ern Iraq have grown accus-
tomed to an unusual sight as
the battle for Mosul unfolded
in recent weeks: columns of
Iraqi armor on their roads.
The sight, to many, was
shocking. Kurdish Peshmerga
fighters, after all, spent de-
cades struggling to win self-
rule from Baghdad. Until the
joint effort to oust Islamic
State from
Mosul trans-
formed Iraqi
politics, the
presence of
Iraq’s federal
forces in
Kurdistan was considered ta-
boo.
“Growing up here, for me,
the Iraqi military always
meant occupation, repression,
the burning villages,” said Bar-
ham Salih, a leading Kurdish
politician who was prime min-
ister of the Kurdistan region
and deputy prime minister of
Iraq before that. “Now for the
first time since the inception
of the Iraqi state, the Kurdish
Peshmerga and the Iraqi army
are fighting alongside each
other. This is hugely symbolic
and important.”
Indeed, this partnership
has surprised many skeptics,
used to endless squabbling be-
tween Baghdad and authori-
ties in the Kurdish regional
capital Erbil. It also spurred
hopes that, if handled right,
BREXIT
Continued from Page One
year than thought.
The U.K’s benchmark FTSE
100 fell 0.23% on Thursday.
The U.K.’s major listed compa-
nies earn most of their reve-
nue outside the country, so a
rise in the pound can be nega-
tive for the index.
Mrs. May has said she plans
to invoke Article 50, which
opens the two-year window
for exit talks, by the end of
March. Mrs. May has sug-
gested that she would put
more emphasis on the right to
curb immigration at the ex-
pense of access to the EU’s
tariff-free single market.
Though Mrs. May has said
she would offer lawmakers
some kind of say in Brexit, she
has insisted on the right to
unilaterally invoke Article
SPAT
Continued from Page One
Louis-Dreyfus, who was raised
as an orphan in Soviet Russia.
Ms. Louis-Dreyfus’s swift rise
in the company following the
death of her husband, Robert,
in 2009 hadn’t been antici-
pated by either him or his
wider family, people familiar
with the matter said.
The feud comes at a key
time for Louis Dreyfus, a com-
pany that ships as much as
10% of the world’s agricultural
products, according to Harvard
Business School. Commodities
have been under pressure
since 2011, and years of family
bouts and executive turnover
have taken a toll on the com-
pany as it steers a course
through the downturn, people
familiar with the matter said.
“I think it’s forcing them to
play with one hand behind
their back,” said Philippe de
Lapérouse, who specializes in
food and agribusiness at con-
sultants HighQuest Partners.
In answers to emailed ques-
tions, the company said its
partners are “fully comfortable
about the interrelationships
among shareholders and our
business is not affected.” Ms.
Louis-Dreyfus declined to com-
ment on relations with the
wider family.
Louis Dreyfus was founded
in 1851 by Léopold Louis-Drey-
fus, a trader who sold French
wheat into Switzerland. Its op-
erations now stretch across
more than 100 countries, from
orange groves to freight ships,
sugar refineries to Brazilian
port terminals.
Iraqi Kurdish leader Massud Barzani, center, with Shiite Muslim leader Ammar al-Hakim, second right.
the liberation of Mosul could
lead to a new age of collabora-
tion between Kurdistan and
the rest of Iraq, something
long desired by the U.S. and
other Western allies.
“We now have the best re-
lationship we have ever seen.
There is coordination and co-
operation on the political level
and on the military level. This
gives us hope that this will be
the beginning of big changes
for the Iraqi people,” said
Iraq’s former oil minister Ibra-
him Bahr al-Ulloum, a promi-
nent lawmaker from the Shiite
bloc that supports Prime Min-
ister Haider al-Abadi.
he smooth interaction is
T visible on the battle-
scarred highway be-
50—a position that was the
subject of the court case. The
High Court ruled that she
can’t trigger Article 50 with-
out the approval of Parlia-
ment.
What kind of parliamentary
approval is required by the
court ruling remains unclear,
said John Curtice, politics pro-
fessor at the University of
Strathclyde.
A single vote on triggering
Article 50 would be less of a
challenge. If the ruling re-
quires Mrs. May to more com-
prehensively consult Parlia-
ment, lawmakers—a majority
of whom voted to stay in the
EU—would be in a position to
extract concessions and pres-
sure Mrs. May to soften her
stance.
“It could mean the govern-
ment struggles to get this leg-
islation through by the end of
March and the invocation of
Article 50 is delayed,” Mr.
In 2006, Robert Louis-Drey-
fus took over as family scion,
majority shareholder and chair-
man. Before he died from com-
plications related to cancer in
2009, he set up a Netherlands-
based trust named Akira BV,
which held his controlling share
of the family holding company
that controls a majority stake in
Louis Dreyfus. Akira in turn was
overseen by a family foundation
with three so-called protectors,
who could decide whether to
distribute income. Mr. Louis-
Dreyfus made his wife one of
those protectors.
In September last year, family
members moved to sell 16.6% of
their stake in the holding com-
pany, according to Akira’s com-
pany filings.
Akira declined to comment
on the court case. The minority
shareholders also declined to
comment on the case.
The June case wasn’t the first
time the family has faced off
with Ms. Louis-Dreyfus in court.
In March 2011, Ms. Louis-
Dreyfus was named chairman
of the supervisory board of the
holding company. Soon after,
family members sued Akira,
saying they were being side-
lined and denied critical infor-
mation, according to docu-
ments filed in October 2011.
The company said board mem-
bers had been given a “robust
amount” of information.
The court criticized Akira
for not taking minority inves-
tors’ interests into account but
said there was no legal ground
to rule in favor of the family’s
lawsuit.
Robert Louis-Dreyfus and his
wider family had never antici-
pated that his wife, who was
selling computer parts when he
WORLD NEWS
tween Erbil and Mosul. Just a
year ago, Kurdish Peshmerga
troops here openly mocked
Iraqi forces as cowards who
would surrender their weap-
ons to Islamic State and flee.
These days, these Iraqi forces
are rapidly advancing on Mo-
sul, their Humvees and
Abrams tanks bedecked with
Shiite banners and Iraqi flags
and roaring through Kurdish
checkpoints from staging
bases in the rear.
“The Peshmerga have pro-
vided everything they could
for us,” said Lt. Col. Atheer
Gasim, the commander of an
Iraqi Special Operations
Forces unit pushing toward
Mosul. “It wasn’t like this
before, when it was mostly
tension.”
Curtice said. “This is a major
spanner in the works for The-
resa May’s strategy.”
With the Supreme Court on
standby to give an expedited
hearing early next month, the
legal timetable allows the gov-
ernment to stick to Mrs. May’s
plan to trigger Article 50 in
March, a government spokes-
woman said.
The Supreme Court is on standby for an
expedited hearing in early December.
Jeremy Corbyn, leader of
the opposition Labour Party,
said his party respects the ref-
erendum results and wouldn’t
stop Brexit, but called for
more openness from the gov-
ernment.
“This ruling underlines the
need for the government to
bring its negotiating terms to
Parliament without delay,” Mr.
Margarita Louis-Dreyfus shown in a photo from last year.
met her, would be able to run
his family business, according to
people familiar with the matter.
After the birth of their three
sons, the couple had been living
increasingly separate lives. By
the late 1990s, Mr. Louis-Dreyfus
had started a relationship with
Nicole Junkermann, a German
sports and media entrepreneur
three decades his junior, people
familiar with the matter said.
The company said that Rob-
ert Louis-Dreyfus had wished his
wife to have “very significant
authority and influence” in the
holding company.
As she took a more active
role in the business, Ms. Louis-
Dreyfus also clashed with execu-
tives, people familiar with the
matter said. The company has
had four CEOs since 2011.
In addition, two new hires as
CEO, Mayo Schmidt and Patrick
De Maeseneire, fell through in
between their appointment and
THE WALL STREET JOURNAL.
ning when they antagonized
each other. But now, both
sides need each other and
that need has led to this rap-
prochement,” said Dlawer
Ala’Aldeen, president of the
Middle East Research Insti-
tute, an Erbil think tank that
recently brought together se-
nior Kurdish and Iraqi politi-
cians.
hat desire to find com-
T mon ground shouldn’t
be mistaken for readi-
ness to dramatically alter
the existing arrangements
SAFIN HAMED/AGENCE FRANCE-PRESSE/GETTY IMAGES
between Erbil and Baghdad,
Mr. Ala’Aldeen added. “The
two sides want to create a
positive atmosphere without
actually fundamentally trans-
forming their relationship,”
he said. “Neither side wants
to change the status quo.”
This being the Middle
East, there are plenty of op-
portunities for this rap-
prochement to collapse in
coming months over issues
such as control over terri-
tory retaken from Islamic
State, and the limits of Kurd-
The need to roll back Is- years. ish autonomy. Rivalry be-
lamic State—whose brand of Mr. Barzani is grappling tween Turkey, an ally of Mr.
Sunni extremism poses a with a political crisis in the Barzani, and Iran, which
threat to both Baghdad and Kurdistan region, where par- backs the central govern-
Erbil—is not the only reason liament has been suspended ment in Baghdad and some
for the new honeymoon be- for more than a year follow- of Mr. Barzani’s Kurdish po-
tween the central govern- ing lawmakers’ demands for litical opponents, adds an ex-
ment and the Kurds. The per- him to leave office. Mr. tra layer of complexity.
sistent slump in oil prices Abadi’s position, meanwhile, Still for now, the mood in
has wreaked havoc on both is challenged by his main both Baghdad and Erbil is
economies, making full inde- Shiite rival, former Prime one of relief and surprise at
pendence less attractive for Minister Nouri al-Maliki. Mr. how well things have gone
many Kurds, at least in the Maliki delights in attacking so far.
short run. the Kurds and, in recent “The iceberg of mistrust
In addition, shared do- days, accused Mr. Barzani of between both sides has al-
mestic political struggles pursuing a U.S.-Israeli ready melted down,” said
have turned Iraqi Prime Min- agenda in the Middle East. A Hemin Hawrami, the head of
ister Abadi and Kurdistan re- success in Mosul would be a foreign relations at Mr. Bar-
gional President Masoud major political boon for Mr. zani’s Kurdistan Democratic
Barzani into de facto allies. Abadi and Mr. Barzani alike. Party. “The level of coordina-
The link was highlighted by “There was a time when tion is beyond the imagina-
Mr. Barzani’s September trip
to Baghdad, his first in four
both sides found it more
popular and more vote-win-
tion of both sides, which is
excellent.”
Corbyn said.
A vote on invoking Article
50 would likely be tight, said
Tim Bale, politics professor at
govern on the monarch’s be-
half.
The court rejected that po-
sition. “The most fundamental
new argument before the Su-
preme Court, said Kenneth
Armstrong, a professor of Eu-
ropean Law at the University
Queen Mary University of Lon- rule of the U.K.’s constitution of Cambridge.
don. Though a majority of is that Parliament is sovereign Crispin Blunt, a Conserva-
members of Parliament voted and can make and unmake any tive member of Parliament,
against Britain’s exit, many law it chooses,” said the chief said the decision was “pro-
would be hesitant to overturn judge, Roger Thomas. foundly unhelpful” and could
the referendum result. The High Court case was mean that Britain’s unelected
“A lot of MPs would regard brought by a group of British upper House of Lords, which is
citizens opposed to Brexit overwhelmingly in favor of
with the help of some of the staying in the EU, could block
U.K.’s top constitutional law- or delay any legislation trig-
yers. gering Article 50. Legislation
Spearheading the legal must past though the lower
challenge are British business- House of Commons and the
it as a risky thing for Parlia- woman Gina Miller and hair- House of Lords before becom-
ment to set itself up against dresser Deir Dos Santos. Gra- ing law.
the people,” he said. hame Pigney, a France-based “The judges have behaved
The case heard by the High expatriate who used crowd- with constitutional reckless-
Court raises thorny constitu- funding from more than 4,000 ness that is on a magnificent
tional questions. The govern- people to pay for lawyers, scale,” Mr. Blunt said. He said
ment said it has the right to joined the suit as a co-party. that resistance from the upper
trigger Brexit because of the The ruling, by three High chamber could delay Britain’s
so-called royal prerogative, in Court judges, was unanimous. exit by up to year.
which executive authority is The U.K. government will —Nicholas Winning
given to ministers so they can likely have to come up with a contributed to this article.
But she is doing so at a time
when Louis Dreyfus’s value has
fallen.
In 2011, a decadelong boom
Meanwhile, the family is
growing impatient for their pay-
out. That has been stalled by a
continuing dispute about valua-
in many agricultural commodity tion, according to documents
prices ended amid oversupply. from the June Amsterdam court
Cotton and sugar, for instance, case and people familiar with
are down 68% and 35%, respec- the matter.
tively, from their 2011 peaks. “Akira is working on a num-
That has hit company profits. ber of financing alternatives and
In March, Louis Dreyfus said is sure that it will be able to fi-
its 2015 net income was $211 nance the put shares, as and
million, 67% lower than the pre- when needed,” Ms. Louis-Drey-
vious year. The company said fus said in an answer to emailed
the decline was due to low mar- questions.
XAVIER LAINE/GETTY IMAGES
ket volatility, which saps trading —P.R. Venkat
revenue, and other reasons. contributed to this article.
Competitors fared better.
U.S.-based Cargill Inc.’s 2015 THE WALL STREET JOURNAL.
profit fell 13%, while Bunge Europe Edition ISSN 0921-99
Ltd.’s rose 57%. The News Building, 1 London Bridge Street,
London, SE1 9GF
In late 2009, Temasek Hold-
ings Private Ltd., the Singapor- Thorold Barker, Editor, Europe
Grainne McCarthy, Senior News Editor, Europe
ean state investment company, Cicely K. Dyson, News Editor, Europe
their first day, people with considered buying a stake in Margaret de Streel, International Editions Editor
Darren Everson, Deputy International Editor
knowledge of the situation said. Louis Dreyfus, which it valued at
Mr. Schmidt and Mr. De Mae- around $8 billion, according to a Joseph C. Sternberg, Editorial Page Editor
seneire didn’t respond to re- person familiar with the matter. Anna Foot, Advertising Sales
quests to comment. Late last year, Temasek consid- Jacky Lo, Circulation Sales
Andrew Robinson, Communications
Louis Dreyfus said that only ered investing again, but its val- Jonathan Wright, Commercial Partnerships
one of the CEOs who worked for uation had fallen to $4.5 billion,
it during this period was re- according to that person. Katie Vanneck-Smith,
Global Managing Director & Publisher
placed and two were appointed Temasek declined to com-
on an interim basis, and that it ment. Louis Dreyfus declined to Advertising through Dow Jones Advertising
Sales: Hong Kong: 852-2831 2504; Singapore:
is normal to change manage- comment on the valuations. 65-6415 4300; Tokyo: 81-3 6269-2701;
ment at the end of a commodi- Frankfurt: 49 69 29725390; London: 44 207
842 9600; Paris: 33 1 40 17 17 01;
ties cycle. New York: 1-212-659-2176
As family members have sold,
Akira has been left with the
CORRECTIONS  Printers: France: POP La Courneuve; Germany:
Dogan Media Group/Hürriyet A.S. Branch; Italy:
bills. In order to keep the com-
pany in family hands, Mr. Louis-
AMPLIFICATIONS Qualiprinters s.r.l.; United Kingdom: Newsprinters
(Broxbourne) Limited, Great Cambridge Road,
Waltham Cross, EN8 8DY
Dreyfus had ensured that the Registered as a newspaper at the Post Office.
Trademarks appearing herein are used under
trust was obliged to buy the Shire PLC’s drug Lialda is license from Dow Jones & Co.
shares of any minority share- an internal medicine treat- ©2015 Dow Jones & Company. All rights reserved.
Editeur responsable: Thorold Barker M-17936-
holder wishing to sell. Akira has ment. A Business Watch item 2003. Registered address: Avenue de Cortenbergh
60/4F, 1040 Brussels, Belgium
almost $600 million in debt, ac- Wednesday about Shire’s earn-
cording to its most recent ac- ings incorrectly said the drug NEED ASSISTANCE WITH
counts. Ms. Louis-Dreyfus is is an immunology treatment. YOUR SUBSCRIPTION?
now looking for an investor to By web: http://services.wsje.com
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P2GW309000-0-A00300-1--------AL
THE WALL STREET JOURNAL.
Bank of England Puts Brake on Rate Cuts
In shift, central bank
says it expects smaller Forecasting
In its latest forecasts, the BOE expects faster growth and stronger
initial Brexit impact inflation in the next year than it did in the aftermath of the Brexit vote.
than earlier forecasts Consumer-price inflation
BY JASON DOUGLAS
AND PAUL HANNON
LONDON—The Bank of Eng-
land, in a surprise change of
course, played down the
chances of a further cut in in-
terest rates soon, saying it ex-
pected the U.K.’s decision to
leave the European Union to
weigh less heavily on the
economy in the next year or so
than previously thought.
Central-bank officials also
warned there were limits to
how far they would tolerate
price growth in excess of their
2% target, signaling that they
might be prepared to raise
borrowing costs if the pound’s
steep decline fuels a more
rapid acceleration in inflation.
The central bank’s change
of stance underscores the un-
certainty facing the U.K. as it
heads toward Brexit, which is
expected to take place in 2019
after two years of negotiations
on terms of Britain’s with-
drawal and future relationship
with the EU.
“We have a neutral bias
around policy going forward,”
said BOE Gov. Mark Carney,
adding that he could envision
scenarios in which the key in-
terest rate could be raised or
lowered.
Like many forecasters, the
BOE appears to have been
wrong-footed by the initial
strength of the economy since
the June referendum. But cen-
tral-bank officials—as well as
many economists—still harbor
The Brexit Process Just Became Even More Complicated
If the pound rallied after
British High Court’s ruling
Thursday because investors
expect Brexit to now be less
likely, they will probably be
disappointed. The odds are
that the court’s decision,
rather than ruling out Brexit,
will just make it messier.
It certainly
complicates
the life of Brit-
ish Prime Min-
ister Theresa
May, and at
BRUSSELS the very least
BEAT could set back
STEPHEN her desired
FIDLER timetable for
exiting the Eu-
ropean Union.
She has said she would start
two years of negotiations
over the divorce settlement,
invoking Article 50 of the
EU’s Lisbon Treaty by the
end of March.
The government has said
it would appeal the ruling to
the Supreme Court, which
will hear arguments in De-
cember and probably rule in
January. If the top court
overturns Thursday’s ruling,
the way is cleared for Mrs.
May’s timetable.
However, that court may
want clarity on an assump-
tion made by the High Court
and by both sides in the
case: that Article 50, once
triggered, is irrevocable.
The High Court said be-
cause Article 50 has no re-
verse gear and would there-
Five Takeaways From British High Court’s Ruling
BY ALEXIS FLYNN
Here is a snapshot of
what the British High Court’s
decision means for the U.K.’s
path to Brexit:
The court ruling doesn’t
mean Brexit won’t happen
The ruling concerns the
legal process by which Brit-
ain plans to exit from the
European Union—not the de-
cision to leave itself. Both
major parties say they re-
spect the outcome of the
June referendum. The deci-
sion could, however, delay
Prime Minister Theresa
May’s self-imposed tight
schedule for negotiating
Britain’s exit. Mrs. May has
said she wants to trigger Ar-
ticle 50, which formally
launches a two-year exit ne-
gotiation period, by the end
of March next year.
Brexit
Actual August projections
3%
2
1
0
–1
2013 2014 2015 2016
GDP, change from a year earlier
4%
3
2
1
0 Bank of England Gov. Mark Carney spoke in London on Thursday.
2013 2014 2015 2016
Unemployment rate, three-month moving average
8%
6
4
2
2013 2014 2015 2016
Sources: U.K. Office of National Statistics (actuals);
Bank of England (projections)
grave concerns over the possi-
ble toll an EU exit may have
on the U.K. economy longer
term.
At its November policy
meeting, officials on the BOE’s
nine-member Monetary Policy
Committee voted unanimously
to keep the BOE’s benchmark
interest rate at 0.25% and to
press ahead with a £70 billion
($86 billion) program of asset
fore mean the U.K.’s
inevitable exit from the EU,
invoking it would take away
some rights from British citi-
zens and people living in the
U.K. For that reason, it ruled,
Parliament would need to
approve it.
The reversibility of Arti-
cle 50 is, however, a matter
of some dispute. European
Council President Donald
Tusk has said the U.K. could
row back on Article 50 if it
didn’t like the outcome of
the negotiations.
I
ronically, if the U.K.’s top
court wants certainty on
this, it would have to re-
fer the matter to the Euro-
pean Court of Justice, the
EU’s highest court, and then
wait months for its adjudica-
tion. Steve Peers, a legal ex-
pert at the University of Es-
sex, says other British courts
could ask for this clarifica-
tion, too.
If the U.K.’s top court up-
holds Thursday’s judgment,
it sets in train a complicated
legislative process.
The government would
need to place before Parlia-
ment a draft bill that would
be debated in the House of
Commons and amended be-
fore going to the (unelected)
House of Lords for debate
and further amendment. The
whole thing would then be
sent back to the Commons
for its final say.
A three-month timetable
Getting parliamentary
approval for the govern-
ment’s Brexit plan could be
complicated
The government said it
would take the ruling to the
Supreme Court, which has
set aside Dec. 5-8 to hear the
case. If the court upholds
Thursday’s ruling, both the
House of Commons and then
the House of Lords may have
to pass a bill triggering Arti-
cle 50. But the latter cham-
ber’s members are over-
whelmingly in favor of the
U.K. remaining an EU mem-
ber. Crispin Blunt, a Conser-
vative lawmaker, told The
Wall Street Journal that re-
sistance from the upper
chamber could delay Brit-
ain’s exit by up to a year.
Why sterling soared on
the news
The pound, which in re-
WORLD NEWS
November projections
2017 2018 2019
2017 2018 2019
2017 2018 2019
THE WALL STREET JOURNAL.
purchases announced in Au-
gust.
The pound rose to a high of
$1.248 after the BOE’s an-
nouncement, although the cur-
rency also gained on the news
that a U.K. court ruled the
government needs Parlia-
ment’s consent to set the
U.K.’s formal exit in motion.
A fresh set of quarterly
forecasts published by the
Gina Miller, lead claimant in the Brexit challenge, reading out a statement in London on Thursday.
for this process would be
ambitious, particularly if
lawmakers demanded
greater scrutiny about the
government’s negotiating
stance. Such a request would
make it much tougher for
Mrs. May to keep to her plan
not to offer “a running com-
mentary” on the Brexit talks.
Parliament could reject
the bill, accept it or try to
tie the government’s hands.
While Parliament couldn’t
insist on the exact shape of
the final deal, since that
cent weeks has sunk to a
more than three-decade low
on fears Mrs. May will pur-
sue an economically damag-
ing “hard” Brexit, strength-
ened on the news of the
court’s verdict. Economists
say a “soft” Brexit would im-
prove the outlook for the
economy in the long term.
The ruling could shape
the U.K.’s future relations
with the EU
If upheld, the ruling
would give Parliament a say
in what the U.K.’s future re-
lations with the EU looks
like, making the prospect of
a “hard” Brexit less likely.
Some political experts sug-
gest that if the plaintiffs
win, lawmakers—most of
whom supported the U.K.’s
continued EU membership—
will have an opportunity to
steer the country toward a
central bank show that offi-
cials expect the economy to
expand more strongly in 2016
and 2017 than they predicted
in the summer, although they
expect growth to tail off
sharply in 2018 and 2019. They
have penciled in growth of
2.2% this year and 1.4% in
2017, compared with earlier
forecasts of 2% and 0.8%, re-
spectively.
They also anticipate higher
inflation, a consequence of a
battered pound. They now ex-
pect annual inflation to reach
2.7% by the end of next year,
well in excess of their 2% tar-
get. Officials noted that ster-
ling’s slide accelerated further
in October, after Prime Minis-
ter Theresa May signaled her
willingness to sacrifice some
economic closeness to the EU
in favor of tighter control of
immigration.
would depend on negotia-
tions with the rest of the EU,
lawmakers might set certain
conditions. These could in-
clude preserving the rights
of EU citizens already in the
U.K. or insisting that the
government seek to mini-
mize economic disruption.
T
he big question,
though, is whether the
large anti-Brexit ma-
jorities in both houses will
defeat the bill and prevent
the government from invok-
“softer” exit, with closer ties
to the bloc and a more-open
immigration policy.
A snap election can’t be
ruled out
Mrs. May’s critics argue
that the ruling Conserva-
tives, who secured a narrow
parliamentary majority in
2015, need to renew their
mandate to govern the coun-
try following the resignation
of David Cameron after the
referendum. They also say
Mrs. May herself needs to
obtain a direct approval for
her policies on exiting the
EU in a general election. The
prime minister has said a
general election would only
increase uncertainty in what
are already uncertain times.
However, as the legal chal-
lenge to Brexit unfolds, she
might want to obtain a re-
newed democratic mandate.
Friday - Sunday, November 4 - 6, 2016 | A3
KIRSTY WIGGLESWORTH/AGENCE FRANCE-PRESSE/GETTY IMAGES
“There are limits to which government couldn’t kick off
above-target inflation can be the process of leaving the Eu-
tolerated,” the committee said, ropean Union without a vote
according to minutes of the from Parliament.
meeting. In a news conference fol-
The BOE dropped guidance lowing the BOE’s decision, Mr.
issued in August that another Carney said the court’s deci-
rate cut was likely this year, sion was “an example of the
saying instead that “monetary uncertainty that will charac-
policy can respond, in either terize this process.” But he
direction, to changes in the added: “We can deal with it.”
economic outlook as they un- The shift also comes after
fold.” Mr. Carney ended fevered
The BOE’s shift comes amid speculation about his future
continued uncertainty over the by saying Monday that he in-
U.K.’s future economic ties to tends to stay in post an extra
the EU. Mrs. May has said she year, to mid-2019, to see the
plans to give Brussels formal U.K. through the anticipated
notice of the U.K.’s withdrawal end of divorce talks. He de-
from the EU before the end of clined to answer questions
March, a move that will start Thursday about his willing-
the clock ticking on at least ness to extend his stay further
two years of exit negotiations. if the Brexit talks hadn’t yet
But that plan suffered a been completed.
blow Thursday, when a U.K. “We’ve had enough of that
court ruled Thursday that the saga,” he said.
[of the] level of public anger
they will provoke.”
I
ndeed, any parliamentary
decision deemed to ig-
nore the referendum—
which was legally speaking
only advisory—would risk
provoking a political crisis.
In the Commons, mem-
bers of Parliament would
have to consider whether
they wanted to ignore the
referendum vote. If Mrs. May
wanted to bring her party
into line, she could make it a
vote of confidence, meaning
a general election would be
called if she lost.
That would pose real chal-
MARK THOMAS/ZUMA PRESS
lenges for many MPs—partic-
ularly Conservatives—who
would have to seek re-elec-
tion in euroskeptic constitu-
encies. Chris Hanretty of the
University of East Anglia has
calculated that majorities in
401 out of the 633 parlia-
mentary constituencies in
ing Article 50 altogether. For England, Scotland and Wales
various reasons, this is un- voted for Brexit.
likely—though tight parlia- But Mrs. May’s working
mentary arithmetic means it majority is thin—only 15.
is impossible to rule out. And the House of Lords,
A taste of the reaction, which doesn’t face elections,
were it to happen, was al- could prove a thorn in her
ready evident Thursday. “I side. The most likely out-
worry that betrayal may be come is still Brexit, if de-
near at hand,” Nigel Farage, layed, and it will be politi-
the former leader of the UK cians rather than lawyers
Independence Party, who decide it. But the in-
tweeted, adding: “I now fear creased uncertainty will keep
every attempt will be made investors on their toes, and
to block or delay triggering the British political system
Article 50. They have no idea under strain.
NIKLAS HALLE’N/AGENCE FRANCE-PRESSE/GETTY IMAGES
A Union flag flies in front of the British Parliament in London
P2GW309000-0-A00400-1--------AL

A4 | Friday - Sunday, November 4 - 6, 2016 HK JP KO ML SI IN UK FR MN PR THE WALL STREET JOURNAL.

WORLD NEWS

Newly Opened Road Fuels Mosul Exodus

Thousands depart on Militant Leader
thoroughfare opened Urges Attacks
by Iraqi forces ahead
of move to retake city On Iraqi Forces,
Foreign Nations
BY BEN KESLING
AND ALI A. NABHAN Islamic State leader Abu Bakr
al-Baghdadi broke his nearly
GOGJALI, Iraq—Thousands yearlong silence early Thursday,
of residents flowed out of Mo- calling for followers to defend
sul, as Iraqi forces opened up the group’s besieged strong-
a major road out of the city so holds such as Mosul against ap-
people could escape fighting proaching government troops,
and head to camps far from militias and foreign allies.
the front lines. “O you who seek martyrdom!
People packed into cars, Start your actions!” Mr. Bagh-
BULENT KILIC/AGENCE FRANCE-PRESSE/GETTY IMAGES

trucks and buses that traveled dadi said in the nearly 32-minute
the main route on the city’s east- recording authenticated by SITE
ern outskirts. The military Intelligence Group, which moni-
pushed into the area on Tuesday tors radical groups online. “Deci-
after two weeks battling Islamic mate their territories, and make
State in villages surrounding the their blood flow like rivers.”
city, the terror group’s last ma- Mr. Baghdadi’s recording
jor stronghold in Iraq. sought to spur Islamic State at-
The front lines were largely tacks—including suicide mis-
quiet on Thursday amid the ci- sions—against Iraqi military
vilian exodus, while Iraq’s spe- units, some of which breached
cial-operations forces prepare outer neighborhoods of Mosul
to push further into the city this on Tuesday. The leader didn’t
week, said Lt. Gen. Abdulghani mention Mosul by name, but
al-Asadi, head of Iraq’s elite Iraqi families boarded a truck before heading to camps housing displaced people on Thursday near Gogjali on the outskirts of Mosul. did refer to Nineveh, the prov-
counterterrorism forces. ince where it is located.
The offensive to retake Mo- advantage of the newly opened People waved makeshift ist group recruited thousands number of militants remaining The recording was also in-
sul from Islamic State kicked off passage to avoid getting caught white flags out their windows, of families as shields in ad- in the city at 5,000 to 6,000, but tended to inspire attacks inter-
Oct. 17 with Iraqi military and up in the fight for the city. a sign of peace, and cheered vance of the army’s approach. said he thought many fighters nationally, a tactic Islamic State
Kurdish Peshmerga units ad- When Ali Hussein’s dilapi- and waved to Iraqi troops as Islamic State has main- may have begun to slip away to has relied on to project
vancing from the south and east dated sedan broke down on they drove out. Farmers herded tained control of Mosul since havens including Islamic State’s strength abroad as it loses ter-
of the city. They have since re- Thursday a few miles after leav- sheep and cows down the dusty mid-2014, when it blitzed strongholds in Syria. ritory at home. In his recording,
taken villages surrounding the ing Gogjali, he tied rope to the road out of the city, unwilling across Iraq and seized one- On Thursday, some fleeing the leader of the Sunni extrem-
city, pushing into its outskirts. bumper of the car in front of him to leave the animals behind. third of its territory. After residents’ trucks stalled and ist group singled out Saudi Ara-
A new effort to squeeze Is- to make sure he would be pulled Islamic State melted away dealing the group a series of had to be pushed by crews of bia and Turkey, demanding that
lamic State militants from the along with the steady stream of from Gogjali as Iraqi troops key battlefield defeats across men. Children laughed and militants attack those countries.
east is scheduled for Friday, vehicles leaving the city. advanced into eastern Mosul, the country, U.S. and Iraqi mil- waved from the backs of cars. Both Sunni-majority nations
Gen. Asadi said, using Gogjali, “There was no food, no work, and lacked the resources to itary officials have speculated A woman wept openly, hug- have joined Western forces in
on Mosul’s eastern fringes, as a no anything” in Gogjali under round up civilians to serve as as to how many of its fighters ging everyone that came by opposing Islamic State.
gateway into the city’s densely Islamic State’s rule, said the 25- human shields, said Muham- remained to guard the city. because she had finally been Mr. Baghdadi hadn’t released
populated neighborhoods. year-old Mr. Hussein, as the mad Hamoudi, a resident who As many as 1.8 million resi- reunited minutes before with an audio recording since De-
Anxious residents fleeing seven other people crammed was fleeing the front lines. A dents could still be in Mosul, her son, a Kurdish Peshmerga cember 2015.
Mosul through a checkpoint in into his tiny car looked on. report from the United Nations Gen. Asadi said. He cited U.S. fighter, after nearly three —Ben Kesling
Gogjali said they were taking “Now there will be life again.” said the Sunni Muslim extrem- estimates that he said put the years apart. and Maria Abi-Habib

Egypt Floats Currency,

Aims to Curb Black Market
BY DAHLIA KHOLAIF Egyptian pounds and sold for and an increase in terrorism
13.50, a big shift from the pre- have hurt Egypt’s main sources KHALED DESOUKI/AGENCE FRANCE-PRESSE/GETTY IMAGES

CAIRO—Egypt’s central vious rate of around 8.88 Egyp- of hard foreign currency—tour-
bank floated its tightly con- tian pounds to the dollar. The ism and foreign direct invest-
trolled currency Thursday, in a Commercial International Bank, ment. With foreign reserves
surprise step that aims to draw the country’s largest publicly falling, the country was forced
foreign capital back to the traded lender, offered a dollar to ration dollars to pay for es-
country but risks pushing the for 14.30 Egyptian pounds and sentials such as wheat and
price of goods out of reach for purchased it for 14.00. medicines. This pushed local
ordinary Egyptians. A more flexible exchange businesses to the black market
The Central Bank of Egypt, rate is one of several require- to fulfill urgent needs for for-
which also raised interest rates ments Egypt must meet to get eign currency.
by 3 percentage points, said the final approval for a $12-billion In recent months, inflation
decision to “liberate exchange loan from the International has reached double digits and
rates” was intended to return Monetary Fund—a would-be stood at 14.1% in September.
foreign-currency trading to the lifeline for the battered North Price rises have hit Egyptian
formal banking sector and away African economy. The three- households hard, bringing dis- An employee counting bank notes at a currency exchange shop in Cairo on Thursday.
from a black market that has year loan, which was approved plays of anger in a country
capitalized on months of acute in principle in August, hinges where the government keeps a pared 8 million containers of cabdriver and father of two. tors to move money in and out
dollar shortages. on Egypt’s ability to secure up tight lid on dissent. basic goods that would be “They keep saying they’re of the country.
The move led to a sharp de- to $6 billion from bilateral fi- When formula-milk supplies available at reduced prices. working on bringing prices “If the government takes the
valuation of the Egyptian nancing, cut subsidies and ran dry, dozens of mothers Egyptians are watching the down, but they’re not.” right steps and acts transpar-
pound. adopt a flexible exchange rate. staged a protest. Talk shows pound’s devaluation with anxi- Timothy Kaldas, a nonresi- ently, these changes can have a
The National Bank of Egypt, Egyptian Prime Minister Sherif have allowed listeners to call in ety. “What matters to me is dent fellow at the Tahrir Insti- clear positive impact on Egypt’s
the country’s biggest lender, Ismail said last month that 60% and complain about high prices how much will this affect my tute for Middle East policy, said economy in the medium term,”
and other state-owned lenders of the bilateral financing has of sugar and medicines. expenses, because it has been the government was walking a he said. “That said, the immedi-
said on their websites that the been secured. In response, Egypt’s armed stretched to the maximum,” tightrope between keeping a lid ate period will be quite difficult
dollar could be bought for 13 Years of political turbulence forces said last week it has pre- said Ahmed Fathi, a 32-year-old on inflation and allowing inves- for the average Egyptian.”

Lebanon’s Ex-Premier Gets an Encore Firefight With Taliban

BY MARGHERITA STANCATI capped weeks of political wran-
gling between rivals aimed at
BEIRUT—Lebanon’s new breaking the country’s long-
president asked former Prime running political stalemate.
Minister Saad Hariri to form Parliament voted for Mr.
the next government, elevat- Aoun for president on Monday,
ing a longtime Saudi ally as filling the office left vacant for
part of a political compromise 2½ years. He secured the
with the Iran-backed militant needed votes after Mr. Hariri,
group Hezbollah. the leader of Lebanon’s main
President Michel Aoun, a Sunni bloc, endorsed him, with
Christian ally of Hezbollah, the understanding Mr. Aoun
tapped Mr. Hariri as prime min- would in turn back him.
ister-designate on Thursday af- Now, the Western-backed
ter the Sunni politician secured Mr. Hariri faces the challenge
the approval of major blocs in of cobbling together a new
Parliament. The appointment cabinet that can secure broad
support in Lebanon’s fractious
political system. That is a pro-
well as an economic crisis, are
testing the country’s fragile
cess that could take months. stability.
After meeting Mr. Aoun in While Hezbollah didn’t en-
the presidential palace, Mr. dorse Mr. Hariri, its leader
Hariri told reporters that he is Hassan Nasrallah said last
seeking to form a national week that the group wouldn’t
unity government that can oppose him. He said this was
overcome political divisions. “a very big sacrifice.”
“This is a new era, and my Longstanding power-sharing
hope is to form a govern- arrangements among Lebanon’s
ment…that will allow us to religious sects stipulate that the
hold our hands together to president must be a Maronite
solve the crises.” Christian, the prime minister a
Refugees and sectarian ten- Sunni Muslim, and the speaker
sions spilling over from the of parliament a Shiite Muslim.
war in neighboring Syria, as Mr. Hariri’s appointment
marks a shift in his political
fortunes. He came on to the
political scene after his father,
former Prime Minister Rafiq
Hariri, was assassinated in a
2005 car bomb in Beirut that
his father’s supporters blamed
on Hezbollah and Syria. The
younger Mr. Hariri then
launched a Western-backed al-
liance that pushed to end
Syria’s nearly three-decade oc-
cupation of Lebanon.
But his influence waned af-
MOHAMMAD ZAATARI/ASSOCIATED PRESS
Leaves Dozens Dead
BY JESSICA DONATI
AND HABIB KHAN TOTAKHIL
KABUL—Two U.S. special-
forces troops and at least 30
Afghans were killed during a
firefight with the Taliban in
Afghanistan’s Kunduz prov-
ince, officials said,
A provincial spokesman
said 30 Afghan civilians were
killed early Thursday in U.S.
airstrikes that were called in
to support troops under fire
by Taliban snipers.
A joint U.S.-Afghan opera-
tion had been targeting Tali-
ban commanders northeast of
the city of Kunduz when the
troops came under heavy gun-
fire around 3 a.m., a coalition
member said.
In addition to the two
American troops, three Afghan
special-forces members were
killed, officials said.
The operation in the village
of Buzi Kandahari came after
the provincial capital was
area, said Mahmood Danish, a
spokesman for the Kunduz
governor. Many of the casual-
ties were women and children,
he said. The U.S. military said
it was too early to comment
on the allegations of civilian
casualties or the details of the
operation.
“The entire event, both the
death of U.S. service members
and the civilian casualty alle-
gations, are now under inves-
tigation,” U.S. Army Brig. Gen.
Charles Cleveland, a Kabul-
based spokesman for the coali-
tion, said in a statement.
A witness said he saw at
least 15 bodies piled into
trucks after families tried to
parade them through the city
to protest against the killings
but were obstructed by police.
Health officials said at
least four more bodies were
at the hospital. At least 30
other patients were being
treated for injuries, 12 of
them children and many in

ter he was ousted as prime
minister in 2011, a turning
point in Hezbollah’s rise in
Lebanese politics.
Lebanon has long been a
battleground in the regional
power struggle between Iran
and Saudi Arabia—patron of
the main Sunni bloc led by the
Hariri family.
—Noam Raydan
Lebanese students wore masks of the face of the incoming prime minister, Saad Hariri, on Thursday. contributed to this article.
briefly overrun by the insur-
gents last month.
The Afghan and U.S. forces
were ambushed and encircled
by militants and snipers with
heavy weaponry and called for
air support after several
troops were killed and injured,
a senior Afghan military offi-
cial said.
The U.S. military then
struck the densely populated
critical condition, they said.
Military and government offi-
cials couldn’t immediately
confirm the death toll.
The Afghan military official
said troops had no option but
to call for airstrikes and would
have been killed otherwise.
The Taliban claimed Thurs-
day its snipers killed a large
number of U.S. troops in fight-
ing on the outskirts of Kunduz.
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THE WALL STREET JOURNAL. Friday - Sunday, November 4 - 6, 2016 | A5

WORLD NEWS

Economic Slowdown Stings China Retirees

Ailing industries find it east, which has experienced net
Shrinking Support population outflow for more
harder to fully fund By 2050, only two Chinese, down than two decades, according to
their pension systems; from nearly eight now, are a government report in October.
expected to pay into the pension Beijing says next year it will
a staggering rust belt system for each person over 65. roll out a plan to raise retire-
ment-age thresholds from the
BY MARK MAGNIER 8 current 60 for men and 55 for
women. But the proposal faces
SHENYANG, China—Here in strong resistance and is ex-
6
the northeast rust belt, ailing pected to take years to imple-
industries are increasingly less ment.
able to pay into plans for retir- 4 The government is also ex-
ing workers, as a slowing econ- pected this year to redirect as
omy hastens a pension crisis. much as $59.2 billion in pension
“It used to be the system 2 funds from low-yielding bonds
took care of you,” said Zhao and bank accounts into stocks.
Zhonghao, a railway engineer in That could yield higher returns
MARK MAGNIER/THE WALL STREET JOURNAL

0
Shenyang who began his career but with greater risk in a mar-
shoveling coal. The 54-year-old 2015 ’20 ’25 ’30 ’35 ’40 ’45 2050 ket sometimes likened to a ca-
is revising his retirement dream Source: United Nations sino.
of painting, traveling and read- THE WALL STREET JOURNAL. Another step under way is
ing the classics, concerned his the expansion of a 401(k)-like
pension will be slashed. “I have cial Sciences, the country’s chief program funded by companies
to be prepared for that,” he think tank, predicts China’s pen- and individuals. In wealthier
said. sion surplus will turn into a def- countries, a big draw for such
China’s hopes of growing icit by 2023. By 2050, it pre- plans is the tax benefit. That
rich before it grows old are dicts, the cumulative deficit will matters less in China, where a
dimming. The burden of sup- be $118 trillion barring signifi- significant percentage of people
porting each person over 65 is Zhao Zhonghao, a railway engineer, worries that pension cuts could change his retirement plans. cant policy changes. don’t pay income tax, said
now shared by more than seven With pension funds adminis- World Bank economist Philip
workers. But that will drop to given companies some leeway ers and retirees in the north- “Pretty much everyone in my tered locally, the pain will come O’Keefe, co-author of a book on
just two people in 35 years, ac- on pensions. When Heilongjiang eastern city of Harbin took to work unit has the same prob- quicker to the northeast. While China’s pension system.
cording to United Nations data, Longmay Mining Group re- the streets over what they said lem,” he said. Officials at the prosperous southern Guang- Finance and welfare officials
or even fewer than that, the ceived a $298 million bailout were missing pension contribu- Shenyang subsidiary of China dong province has more than 50 didn’t respond to questions.
World Bank says. last year to prevent the disloca- tions and wages. Railway referred questions to months’ worth of pension pay- Many in Xiatun as in other
A low retirement age and a tion of its 200,000 workers, Mr. Zhao can’t make sense of the parent company, which out in its fund, northeastern rural areas have no pension at
one-child policy in place for 35 Heilongjiang province let the statements from his employer didn’t respond. Heilongjiang has a single all. “I’m barely surviving on
years contributed to China’s de- company delay its pension obli- that say he paid only 2.8 yuan The Chinese government has month, the academy said in a farming,” said Lin Jialiang, 49,
mographic predicament. Beijing gations, according to Moody’s in monthly premiums for more sought to assuage fears around July report. standing beside a steel mesh
this year began allowing cou- Investors Service. than a decade, waving printouts retirement. “The government Plans to combine provincial hopper holding his entire liveli-
ples to have two children, but Mr. Zhao’s employer, China of wage records to show he paid can promise pensions for its cit- funds into a less-risky national hood: this year’s harvest of
few believe the shift will signifi- Railway Corp., has shed almost twice that. The differ- izens,” Premier Li Keqiang told pool face resistance from corn. “How can I afford to pay
cantly lift a sagging birthrate. 400,000 of its 2.1 million work- ence could reduce his monthly reporters in March, adding that wealthier provinces, economists into a pension?”
Even as Beijing enhances the ers since 2002 and hasn’t pension by 15% or more from China had a $50.3 billion pen- say. —Pei Li in Shenyang
safety net for its aging popula- posted a profit for years. In Jan- the $620 a month he had ex- sion surplus in 2015. It doesn’t help that young and Liyan Qi in Beijing
tion, local governments have uary, more than 1,000 rail work- pected. The Chinese Academy of So- people are leaving the north- contributed to this article.

Official Raises Prospect of South Korea Probe New Study

BY ALASTAIR GALE Finds Gaps
SEOUL—Pressure increased
on South Korea’s president to
address media allegations that
In Europe’s
a close friend meddled in gov-
ernment policy, as her nomi-
nee for prime minister said
Prosperity
the president could become BY PAUL HANNON
the first national leader to
face formal investigation. People in Central and East-
President Park Geun-hye’s ern Europe are finally recover-
choice for her second-in-com- ing from the trauma that ac-
mand, Kim Byong-joon, also companied the fall of
said in a press conference that communism, but many have
he expects to have control of yet to see the benefits of a
economic and social policy, in- painful transition to the mar-
dicating that Ms. Park is step- ket economy that once offered
ping back from domestic is- the promise of Western stan-
sues as a way to manage the dards of prosperity for all.
controversy. That is the finding of a sur-
Ms. Park fired her previous vey of 51,000 households across
prime minister on Sunday 34 countries that was carried
along with other senior offi- out by the European Bank for
cials in an attempt to ease Reconstruction and Develop-
AHN YOUNG-JOON/ASSOCIATED PRESS

public anger over the media ment in late 2015 and early
allegations. Her public-ap- 2016. Published Thursday, it
proval ratings have sunk to re- finds Eastern Europeans no lon-
cord lows, and street demon- ger suffer a “happiness gap”
strations demanding her with their Western counter-
resignation have continued, parts. Previous surveys had
though they were smaller than shown that even when their in-
weekend protests. comes were the same, reported
Analysts say it is still likely levels of satisfaction were lower.
that Ms. Park will remain in That suggests many people
office through the end of her Protesters calling for embattled South Korean President Park Geun-hye to step down marched through downtown Seoul on Thursday. in the region have overcome
term in early 2018, but with the psychological aftershocks
significantly reduced authority. The furor over claims of in- claims on emails and other about other documents. Ms. ment in state affairs. On of what was a political and
Major policy changes are appropriate political influence files on a tablet computer that Choi has no formal position in Thursday, she faced a fourth economic earthquake.
unlikely, since Ms. Park retains have transfixed South Korea it says it found in an office government. day of questioning by prosecu- The EBRD’s research found
control of foreign policy, de- since a television network re- used by Ms. Choi. Ms. Park hasn’t spoken fur- tors, who say they are looking that so great was the disloca-
fense and national-security is- ported in late October that Ms. A day after the first report ther about the case since her into whether she used her tion caused by the sudden
sues, but the scandal could Park’s longtime friend Choi about the files, Ms. Park apolo- apology. A spokesman for her connections to the president switch from one economic sys-
erode confidence in the gov- Soon-sil was given access to gized in a brief televised state- office declined to comment on to force large companies to tem to another in the years af-
ernment’s ability to manage confidential government docu- ment but only acknowledged whether she planned to make donate to organizations she ter 1989, people born at the
the economy, said Scott Sea- ments, including briefings on having Ms. Choi, 60 years old, any further statements. runs for personal gain. time have grown up to be 0.4
man, a senior analyst with policy toward North Korea. help her write speeches and Ms. Choi denied in a news- —Min Sun Lee of an inch shorter than those
Eurasia Group. The network based the didn’t refer to the allegations paper interview any involve- contributed to this article. born earlier or later, an out-
come that is “similar to having
been born in a war zone.”
everything to undermine the The man was taken into cus- OECD zation for Economic Cooperation However, the report finds
World stabilization of the situation in
Aleppo,” he told reporters in the
tody in Berlin late Wednesday,
and his apartment in the city’s
Inflation Picks Up in and Development said.
It said consumer prices across
that only 44% of people have ex-
perienced the promised catch-up
Watch Russian capital. Schöneberg district was Developed Economies its 35 members were 1.2% higher with Western income levels that
On Oct. 18, Russia suspended searched, according to the pros- The annual rate of inflation than in September 2015, a pickup underpinned popular support
airstrikes on rebel-held areas of ecutor. across developed economies from the 0.9% rate of inflation re- for the abandonment of commu-
Aleppo, which has been pum- The nationality of the suspect rose for the third straight month corded in August and equal to nism, while 23% are worse off
meled by attacks for the past remained unclear. in September, hitting its highest the January rate. than they were in 1989.
month and where some —Ruth Bender level since January, the Organi- —Paul Hannon “In many of those coun-
SYRIA 300,000 residents are still tries, economic growth has
trapped. mostly benefited the rich mi-
Russia: Rebels Ruin Gen. Rudskoi said Russia was nority—in some cases, just the
Aleppo ‘Pause’ Plan “not surprised” by the actions of top 10% or 20% of house-
Russia’s military said antigov- the rebels. holds—while the middle class
ernment rebels in the besieged He said Russia had created and the poor have lagged be-
Syrian city of Aleppo were sabo- two corridors for rebels to exit hind in terms of income
taging a planned “humanitarian from the city and six for civil- growth,” said Sergei Guriev,
pause” in fighting. ians, and that leaflets setting the EBRD’s chief economist.
The 10-hour pause to let civil- out the escape routes had been The survey follows a 2013
ians and rebels leave the city was distributed. report in which the EBRD con-
set to begin at 9 a.m. local time Fri- —Laura Mills cluded the political and eco-
DAI KUROKAWA/EUROPEAN PRESSPHOTO AGENCY

day, Russian officials said, and was nomic changes that followed
ordered by President Vladimir Pu- GERMANY the fall of communism had
tin. stalled since the mid-2000s,
It comes ahead of what West-
Asylum Seeker Held largely because popular sup-
ern officials and others believe will In Suspected Plot port for continued change had
be an all-out assault on the city by German police detained an asy- collapsed. Instead, voters had
Syrian and Russian forces. lum seeker suspected of plotting increasingly turned to authori-
But rebels were already under- an attack for Islamic State, the tarian nationalists who prom-
mining the planned halt, Gen. Ser- federal prosecutor’s office said. ise to reverse reforms.
gei Rudskoi said. The 27-year-old man allegedly “Countries where the major-
“Radical groups are mining received approval from an ISIS ity of people perceived reforms
the humanitarian corridors, operative in Syria to carry out to be designed for somebody
shooting peaceful civilians who an attack on Germans in the else’s gain saw the reversal of
are trying to leave the eastern near future, the prosecutor’s of- CLASH IN KENYA: Police in Nairobi fired tear gas Thursday on the media and on protesters who are both political and economic
parts of the city, and are doing fice said. demanding that President Uhuru Kenyatta act on reportedly rampant corruption or resign. transition,” Mr. Guriev said.
P2GW309000-0-A00600-1--------AL
A6 | Friday - Sunday, November 4 - 6, 2016
Vote Tests if Fracking Ban Clinton, Trump Hunt New Territory in Final Stretch Mogul Facing
Can Pass in Oil Country
BY AMY HARDER
SALINAS, Calif.—The move-
ment to ban fracking is win-
ning victories across the U.S.
Yet the campaign has largely
failed to win where it matters
most—in places oil and natural
gas are produced.
A Nov. 8 ballot measure will
test that pattern in Monterey
County, famed for its farms
and scenic coastline.
Two counties bordering
Monterey, San Benito and
Santa Cruz, have banned frack-
ing, although neither has a siz-
able oil industry. Monterey’s
San Ardo oil field has been
churning out crude for nearly
70 years, and the county has
no ban.
Measure Z, an initiative on
Monterey County’s ballot,
seeks to ban fracking and new
wells, and to restrict how oil
firms use water byproducts.
The measure is being
closely watched by national
groups on both sides. Its sup-
porters have received dona-
tions and other help from na-
tional environmental groups.
Monterey County for Energy
Independence, which opposes
it, has outspent backers
roughly 30 to 1, according to
election filings through Oct.
U.S.
Watch
ELECTION POLL
Trump Takes the Lead
In Arizona and Texas
Donald Trump holds leads in
Arizona and Texas, two Republi-
can strongholds where Demo-
crats have hoped to gain an
edge from fast-growing Hispanic
populations, while he and Hillary
Clinton are in a dead heat in
Georgia, new Wall Street Jour-
nal/NBC News/Marist polls find.
Mr. Trump leads Mrs. Clinton
by a single point among likely
voters in Georgia, 45% to 44%,
the poll there found. He leads by
5 points in Arizona, 45% to 40%,
and by 9 points in Texas, 49% to
40%, according to the surveys.
All three polls were con-
ducted on Sunday through Tues-
day, after the FBI announced
Oct. 28 that it had found and
was reviewing additional emails
that could be material to its in-
vestigation of Mrs. Clinton’s pri-
vate email server.
Texas hasn’t backed a Demo-
cratic presidential nominee since
1976, while Georgia last went
for a Democrat in 1992 and Ari-
zona, in 1996. But to varying de-
grees, their racially diverse vot-
22, spending nearly $5.5 mil-
lion; it is funded almost en-
tirely by Chevron Corp. and
Aera Energy LLC, a joint ven-
ture between Exxon Mobil
Corp. and Shell Oil Co.
The fight has reached an in-
tense pitch in Monterey
County, home to activists in
both the environmental move-
ment and oil industry. It di-
vides along what locals call the
“lettuce curtain.”
On one side are inland farm
regions, with fields ranging
from lettuce to wine grapes,
where voters tend to be politi-
cally more conservative and to
oppose Measure Z. On the
other are residents living
nearer the coast, often liberal-
leaning politically, who tend to
favor the ban.
Public opinion is increas-
ingly turning against hydraulic
fracturing, in which water and
sand laced with chemicals are
injected underground to un-
lock oil and natural gas, along
with other extraction tech-
niques. A March Gallup poll
found 51% of Americans op-
posed fracking, up 11 points
from a survey a year earlier.
Of hundreds of anti-fracking
and similar measures across
the country, almost all are
where there is little or no oil
ing pools have at times put
them on the Democratic Party’s
target list of potential pickups in
the Electoral College.
The Journal/NBC News/Mar-
ist surveys were conducted Oct.
30 through Nov. 1 and included
the equivalent of 719 likely vot-
ers in Arizona, 707 in Georgia
and 679 in Texas. The margins
of error were plus or minus 3.7
percentage points in Arizona and
Georgia and 3.8 points in Texas
—Aaron Zitner
SOUTH CAROLINA
Trial Begins in Police
Shooting Death
The white South Carolina po-
lice officer who fatally shot a
black man in the back acted
wrongfully and willfully, a prose-
cutor said in the opening argu-
ments of the officer’s murder
trial in Charleston.
Prosecutor Scarlett Wilson said
former North Charleston Police Offi-
cer Michael Slager wasn’t in danger
when he shot unarmed motorist
Walter Scott after a routine traffic
stop, and that he violated the rules
of his training and the law.
Mr. Slager acted with ex-
treme indifference to human life,
Ms. Wilson said, when he de-
cided to “shoot an unarmed man
in the back five times.”
Mr. Slager’s attorney said the
officer was working in a North
Charleston neighborhood riddled
by crime, and hadn’t had time to
run a background check before
Trial Crossed Paths
or gas production. New York
banned fracking in 2014 but
doesn’t have a sizable oil in-
dustry, though that move did
head off any potential growth
of the sector there. Vermont
banned fracking in 2012 but
has no commercial natural gas
or oil resources.
Where fossil fuels are pro-
duced in significant quantities
by any method, such measures
have generally failed. In Colo-
rado, activists couldn’t gather
enough signatures to get two
anti-fracking measures on the
ballot this year. Voters in Den-
ton, Texas, passed a binding
measure against fracking, but
the state quickly passed a law
banning local bans.
Measure Z would shut down
Monterey’s oil production, in-
dustry officials said, by bar-
ring not just fracking but also
new oil or gas wells, and by re-
quiring companies to stop us-
ing wells and ponds to dispose
of water produced from under-
ground as a drilling byproduct.
“If they win in Monterey, it
sets a precedent,” said Amy
Myers Jaffe, executive director
for energy and sustainability
at the University of California,
Davis. “It would show there’s
real political force behind this
movement.”
Mr. Scott ran from him.
Andy Savage, Mr. Slager’s at-
torney, said the decision to
shoot Mr. Scott may have been
distasteful, but it was lawful.
PENNSYLVANIA
—Valerie Bauerlein
Penn State Fined
Over Sandusky Case
The U.S. Department of Edu-
cation levied a fine of nearly
$2.4 million against Pennsylvania
State University, in connection
with the school’s handling of
sexual-assault allegations
against former assistant football
coach Jerry Sandusky.
The financial penalty is the
largest ever assessed for viola-
tions of the Clery Act, a 1990
law that covers how schools re-
port on-campus crimes and warn
of possible continued threats to
the campus community.
The Education Department
launched an investigation into
Penn State’s Clery Act compli-
ance soon after Mr. Sandusky’s
2011 indictment, looking at the
school’s crime reporting and re-
lated measures from 1998 to
2011. The Department found 11
major violations, including fail-
ures to classify incidents properly
and to disclose crime statistics.
University spokesman Ben
Manning said the school is re-
viewing the government report,
and will comment further upon
completion of that evaluation.
—Melissa Korn
Amid renewed email
probe and tightening
polls, candidates look
beyond battlegrounds
BY BYRON TAU
WARREN, Mich.—The presi-
dential election has for months
been fought at roundtables,
meet-and-greets and rallies in
perennial battleground states like
Ohio, Florida and Pennsylvania.
Now, just days before Tues-
day’s vote, both Donald Trump
and Hillary Clinton are moving
into new territory. Both cam-
paigns are actively campaigning
in states that were considered by
political forecasters and pundits
to be safe territory for their ri-
val—looking to make a late Hail
Mary pass to win in an unex-
pected state and put the other
candidate on defense.
Both campaigns say their
moves are driven by confidence.
Mr. Trump’s campaign believes
that the news of renewed Fed-
eral Bureau of Investigation
scrutiny into Mrs. Clinton puts
new states in reach. The Clinton
campaign points to polls show-
ing a durable national lead for
Mrs. Clinton, as well as some
positive signs in the data re-
leased by states that permit
early voting, as reasons they can
expand their map.
The result of this late push is
that cities such as Detroit; Denver;
Albuquerque, N.M.; and Phoenix
are getting unexpected visits from
FBI
Continued from Page One
vestigation and public-corruption
prosecutors became increasingly
frustrated with each other, as of-
ten happens within and between
departments. At the center of the
tension stood the U.S. attorney
for Brooklyn, Robert Capers, who
some at the FBI came to view as
exacerbating the problems by
telling each side what it wanted
to hear, these people said.
Through a spokeswoman, Mr. Ca-
pers declined to comment.
The roots of the dispute lie in
a disagreement over the strength
of the case, these people said,
which broadly centered on
whether Clinton Foundation con-
tributors received favorable
treatment from the State Depart-
ment under Hillary Clinton.
Senior officials in the Justice
Department and the FBI didn’t
think much of the evidence,
while investigators believed they
had promising leads their bosses
wouldn’t let them pursue, they
said.
These details on the probe
are emerging amid the continu-
ing furor surrounding FBI Direc-
tor James Comey’s disclosure to
Congress that new emails had
emerged that could be relevant
THE WALL STREET JOURNAL.
the campaigns in the final stretch
of the election.
Mr. Trump has made stops in
Colorado, Wisconsin, Michigan
and New Mexico over the past few
days—all states that polls, fore-
casts and models show Mrs. Clin-
ton as likely to win and where the
Clinton campaign hasn’t invested
a great deal of time or resources.
“In eight days, we are going
to win the great state of Michi-
gan and we are going to win
back the White House,” Mr.
Trump said at a stop in Warren
on Monday, a city on the out-
skirts of Detroit.
Mr. Trump is looking to defy
recent history. Michigan hasn’t
been won by a Republican since
1988, while Wisconsin hasn’t
since 1984. New Mexico and Col-
orado have trended Democratic
in recent years as well.
Mrs. Clinton is also looking to
expand her campaign’s footprint
by making a push in Arizona,
once a Republican stronghold.
She made an appearance in
Tempe, a city near Phoenix, on
Wednesday evening, her first
appearance in the state during
the general election.
In Arizona, Mrs. Clinton said:
“This state is in play for the
first time in years. Arizona has
only voted for a Democrat for
president once since 1948, and
that was my husband in 1996—
one of the many reasons Bill and
I love Arizona.”
“So for the first time, we
have a real chance to turn this
state blue again,” she said.
Advisers to Mrs. Clinton say
to a separate, previously closed
FBI investigation of Mrs. Clin-
ton’s email arrangement while
she was secretary of state.
On Wednesday, President Ba-
rack Obama took the unusual
step of criticizing the FBI when
asked about Mr. Comey’s disclo-
sure of the emails.
Amid the internal finger-
pointing on the Clinton Founda-
Robert Capers, U.S. Attorney for Brooklyn, has been at the center of tensions over the probe.
U.S. NEWS
A man jogs past a building distributing tickets for performer Jay Z’s concert Friday in Cleveland in support of Democratic nominee Hillary Clinton.
that the early voting numbers
have the campaign optimistic
that they are within striking dis-
tance. Democrats point to Ari-
zona’s booming Latino popula-
tion as a factor that could put
the state in play—if not this
tion matter, some have blamed
the FBI’s No. 2 official, deputy
director Andrew McCabe, claim-
ing he sought to stop agents
from pursuing the case this
summer. His defenders deny
that, and say it was the Justice
Department that kept pushing
back on the investigation.
At times, people on both
sides of the dispute thought Mr.
THE WALL STREET JOURNAL.
year, then in future cycles. The Harry Truman in 1948.
last time a Democrat won the “Arizona is a tough state, but
state was in 1996, when Mr. we feel good about where we are
Clinton was running for presi- there,” said Jennifer Palmieri,
dent. the Clinton campaign’s communi-
The last Democrat to win Ari- cations director.
zona before Mr. Clinton was While Mrs. Clinton is trying
Capers agreed with them. De- author of that book, Peter
fenders of Mr. Capers said he
was straightforward and always
told people he thought the case
Schweizer—a former speechwrit-
ing consultant for President
George W. Bush—was interviewed
wasn’t strong. multiple times by FBI agents, peo-
Much of the skepticism toward ple familiar with the matter said.
the case came from how it The Clinton campaign has
started—with the publication of a long derided the book as a
book suggesting possible financial poorly researched collection of
misconduct and self-dealing sur- false claims and unsubstantiated
rounding the Clinton charity. The assertions. The Clinton Founda-
tion has denied any wrongdoing,
saying it does immense good
throughout the world.
Mr. Schweizer said in an in-
terview that the book was never
meant to be a legal document,
but set out to describe “patterns
of financial transactions that
circled around decisions Hillary
Clinton was making as secretary
of state.”
As 2015 came to a close, the
FBI and Justice Department had a
general understanding that nei-
ther side would take major action
on Clinton Foundation matters
without meeting and discussing it
first. In February, a meeting was
held in Washington among FBI
SHANNON STAPLETON/REUTERS
officials, public-integrity prosecu-
tors and Leslie Caldwell, the head
of the Justice Department’s crim-
inal division. Prosecutors from
the Eastern District of New
York—Mr. Capers’ office—didn’t
attend, these people said.
The public-integrity prosecu-
tors weren’t impressed with the
“This is a state that has most
of their voting on Election Day.
We wanted to go back to do a
GOTV event very close to Elec-
tion Day to help boost those ef-
forts. This is a state that we feel
good about,” said Ms. Palmieri,
referring to an acronym for get-
out-the-vote operations.
The swing states this year
have been remarkably predict-
able and remain the same as in
recent cycles.
For Mr. Trump, the most
likely path to victory involves
winning Ohio, Pennsylvania,
Iowa, Florida and North Caro-
lina. Florida, Ohio and Pennsyl-
vania are perennial battleground
states, and North Carolina was
once a solidly Republican state.
Mrs. Clinton’s path to victory
involves keeping all of the states
that President Barack Obama won
in 2012, while making a push to
win North Carolina. Mr. Obama
lost North Carolina in 2012. Mrs.
Clinton’s path also involves play-
SHANNON STAPLETON/REUTERS
ing defense in the same states
that Mr. Trump is targeting, in-
cluding Ohio, Pennsylvania and
Florida.
Struggling to turn out black
voters in Ohio and other battle-
grounds, Mrs. Clinton has turned
to such allies as Mr. Obama and
hip-hop artist Jay Z to nudge Afri-
can-Americans to the polls. The
to expand the map, she is play- president vouched for her Tues-
ing some defense, as well. Her day in Columbus, and Mrs. Clinton
campaign is scheduled to visit was to appear with Jay Z at a con-
Michigan on Friday, a visit that cert on the predominantly black
could underscore some of its east side of Cleveland Friday.
concerns about flagging turnout —Reid J. Epstein contributed
by black voters. to this article.
FBI presentation, people familiar jury, because the person who was
with the discussion said. “The
message was, ‘We’re done
here,’ ” a person familiar with
secretly recorded wasn’t inside
the Clinton Foundation.
FBI investigators grew in-
the matter said. creasingly frustrated with resis-
Justice Department officials tance from the corruption prose-
became increasingly frustrated cutors, and some executives at
that the agents seemed to be the bureau itself, to keep pursu-
disregarding or disobeying their ing the case.
instructions. As prosecutors rebuffed their
Following the February meet- requests to proceed more
ing, officials at Justice Depart- overtly, those Justice Depart-
ment headquarters sent a mes- ment officials became more an-
sage to all the offices involved noyed that the investigators
to “stand down,’’ a person famil- didn’t seem to understand or
iar with the matter said. care about the instructions is-
Within the FBI, some felt they sued by their own bosses and
had moved well beyond the alle- prosecutors to act discreetly.
gations made in the anti-Clinton In subsequent conversations
book. At least two confidential with the Justice Department,
informants from other public- Mr. Capers told officials in
corruption investigations had Washington that the FBI agents
provided details about the Clin- on the case “won’t let it go,”
ton Foundation to the FBI, these these people said.
people said. As a result of those com-
The FBI had secretly recorded plaints, these people said, a se-
conversations of a suspect in a nior Justice Department official
public-corruption case talking called the FBI deputy director,
about alleged deals the Clintons Mr. McCabe, on Aug. 12 to say the
made, these people said. The agents in New York seemed to be
agents listening to the recordings disregarding or disobeying their
couldn’t tell from the conversa- instructions, these people said.
tions if what the suspect was de- The conversation was a tense
scribing was accurate, but it was, one, they said, and at one point
they thought, worth checking out. Mr. McCabe asked, “Are you tell-
Prosecutors thought the talk ing me that I need to shut down a
was hearsay and a weak basis to validly predicated investigation?’’
warrant aggressive tactics, like The senior Justice Department
presenting evidence to a grand official replied: ”Of course not.”
Friday - Sunday, November 4 - 6, 2016 | A7
With the Nominees
BY KATE O’KEEFFE
In a strange twist in an al-
ready unorthodox election
year, documents show that a
billionaire Chinese power bro-
ker, now facing trial in the U.S.
for his role in an alleged
United Nations bribery
scheme, earlier crossed paths
with both major-party presi-
dential nominees.
The Chinese business mo-
gul, Ng Lap Seng, joined Don-
ald Trump and other investors
in a 2001 bid for a casino li-
cense in Macau—three years
after congressional reports de-
tailed Mr. Ng’s alleged role in
a campaign-finance scandal
linked to President Bill Clin-
ton’s re-election, documents
and people familiar with the
matter say.
Messrs. Trump and Ng were
part of a consortium of bil-
lionaires who formally bid for
the coveted right to operate
casinos in Macau, the papers
and people indicate. Macau, a
partially autonomous Chinese
enclave, has since become the
world’s most lucrative gam-
bling hub, far outpacing Las
Vegas.
Hope Hicks, a spokeswoman
for Mr. Trump, played down
the unsuccessful bid.
“This was not a deal Mr.
Trump was seriously consider-
ing,” she said in an emailed
statement.
Three years earlier, in 1998,
House and Senate committee
reports said that Mr. Ng was
among those who had illegally
funneled foreign money to the
Democratic National Commit-
tee, though he was never
charged in the matter. Citing
media reports, lawmakers also
identified Mr. Ng as having
ties with criminal gangs in
Macau, a charge he has cate-
gorically denied.
Mr. Ng couldn’t be reached
for comment for this article.
His lawyer declined to com-
ment.
While Mr. Ng’s business ac-
tivities brought him together
with Mr. Trump, his political
activities put him in touch
with the Clintons.
He donated to the Demo-
cratic National Committee in
conjunction with Charlie Trie,
a friend of his and the Clin-
tons, and was invited to exclu-
sive events such as a 1994
presidential gala in Washing-
ton, D.C., the House report
said. There, Mr. Ng had his
photo taken with Mr. Clinton
and then-first lady Hillary
Clinton, according to the re-
port.
“Intriguingly, Ng, who had
no ties to the President except
through Trie, also visited the
White House 10 times between
June 1994 and October 1996,”
the Senate report said.
Mr. Ng told investigators in
the United Nations case that
he had given money to Mr.
Trie, according to a transcript
of an interview he did with the
Federal Bureau of Investiga-
tion last year. But the billion-
aire denied knowing what Mr.
Trie, who ended up pleading
guilty to campaign-finance vi-
olations, had done with his
money.
The Clintons weren’t impli-
cated in the scandal, but ad-
ministration officials faced
criticism from Republican
members of Congress that
they had been too loose with
campaign-finance rules.
ANDREW GOMBERT/EUROPEAN PRESSPHOTO AGENCY
Chinese billionaire Ng Lap Seng
in New York City last year.
Representatives for Mrs.
Clinton’s campaign declined to
comment. A representative for
Mr. Clinton also declined to
comment. The former presi-
dent defended his actions at
the time.
A few years after the cam-
paign-finance controversy,
Messrs. Ng and Trump, along
with other partners, went in
on the 2001 Macau bid to-
gether, according to docu-
ments and people familiar
with the matter. The consor-
tium planned to operate ini-
tially out of Mr. Ng’s existing
Fortuna casino-hotel in down-
town Macau and pledged to in-
vest about $1.4 billion in
Macau projects if awarded a li-
cense, documents show.
Mr. Ng has been back in the
news recently after last year
being charged in Manhattan
federal court with bribing a
now-deceased U.N. diplomat.
He pleaded not guilty and re-
mains under house arrest in
New York, secured by a $50
million bond as he awaits a
trial scheduled for January.
P2GW309000-0-A00800-1--------AL
A8 | Friday - Sunday, November 4 - 6, 2016
TURKEY
Continued from Page One
“The risks are dispropor-
tionately high,” said Michael
Harris, London-based global
head of research at investment
bank Renaissance Capital, who
is recommending clients quit
Turkey. “A lot of foreign inves-
tors are understandably jittery
in this environment and see
these developments with
worry.”
One of Turkey’s top corpo-
rate law firms was shut down
following a police raid that in-
vestigators described as part
of their investigation of the
July 15 attempted coup. Clients
are left trying to secure what
they thought had been confi-
dential corporate information.
Purges at the Capital Mar-
kets Board, meanwhile, para-
lyzed Turkey’s financial regu-
lator and prevented voting on
at least 25 planned debt and
capital issuances for 2½
months until the government
appointed new board mem-
bers.
In such as tense atmo-
sphere, stern words from the
top can be enough to change
business behavior. “There’s a
disagreement between me and
bankers on interest rates,” Mr.
Erdogan said in an August
speech. “If they try to turn
[their] strength into an oppor-
tunity at a time like this,
they’ll find us against them.” A
dozen banks soon announced
they were lowering mortgage
rates.
Turkey’s economy is feeling
the postcoup moves, which in-
clude tens of thousands of ar-
rests. Its tourist industry had
already been battered by a se-
ries of terrorist incidents.
Deputy Prime Minister
Economy Slows,
Lira Hits a Low
Against Dollar
Moody’s Investors Service this
fall cut its rating on Turkish gov-
ernment bonds to below invest-
ment grade, matching S&P’s long-
held view. One reason it cited
was concern about rule of law.
The Turkish lira hit a record
low against the U.S. dollar in re-
cent weeks. Assets managed by
Turkey-focused equity funds
have fallen by two-thirds from
their peak in 2013, from $3.7 bil-
lion to $1.3 billion at the end of
September, according to data
provider EPFR Global.
Economic growth is still
strong by international stan-
dards but slowed to a 3.1% an-
nual rate in the second quarter,
from 4.7% in the first. The gov-
ernment revised its growth pro-
jection for next year to 4.4%
from 5%. The International Mon-
etary Fund pegs it at 3%.
Several Turkish government
ministers said the economy re-
mains healthy, citing growth, de-
clining government debt and a
commitment by the ruling party
to structural changes.
“Cut the rating as much as
you want—this is not the reality
of Turkey,” President Recep
Tayyip Erdogan said after the
move by Moody’s. “Turkey con-
tinues its investments and de-
velopment.” A government bond
issue in October drew strong de-
mand, the treasury said.
—Yeliz Candemir
TWINKIE
Continued from Page One
when the company said it was
going out of business in late
2012. Some Hostess items went
up for auction on eBay.
When retailers learned the
snacks would be returning in
2013 after eight months off the
shelves, they placed orders for
50 million Twinkies, nearly 40
million Hostess CupCakes and
6 million bags of Donettes
within the first two weeks.
For the new owners of Host-
ess to turn a profit, however,
they had to reduce manufactur-
ing and distribution costs. And
to do that they had to make the
baked goods last longer than
two months—or more than
double the normal shelf life.
The new owners also intro-
duced chocolate-covered
Twinkies and green “slime”-
filled Twinkies in conjunction
with the new “Ghostbusters”
movie, as well as Milky Way-
flavored brownies and sea salt
caramel Zingers.
Some people don’t want to
publicly admit their Hostess
habits because of what one
called “mom judgment.” An-
other feared, “I would sound
like a fatty.”
President Recep Tayyip Erdogan, whose purge of Turkey’s corporate and finance sectors since a failed coup earlier this year worries
international investors. Below, a prison complex in Silivri, Turkey. About 32,000 people have been arrested since July.
Nurettin Canikli said the coup
attempt hasn’t hurt the econ-
omy or foreign investment,
and that any negative senti-
ment “is not supported by real
data.” The minister also re-
jected criticism that the Turk-
ish government has interfered
with the free market, saying
instead that timely govern-
ment action since the coup has
helped bolster the economy.
The failed July coup took
more than 270 lives during a
night of terror that included
jet fighters attacking parlia-
ment and crowds of civilians,
while commandos tried to cap-
ture or kill Mr. Erdogan and
Prime Minister Binali Yildirim.
In subsequent purges of the
military, civil service and polit-
ical opposition, more than
36,000 Turks have been ar-
rested, according to state-run
Anadolu news agency, while
investigations of their possible
roles in the failed coup con-
tinue.
In the finance sector, the
purge has claimed 116 employ-
ees from the banking regula-
tor, at least 30 from the Capi-
tal Markets Board and more
than 1,500 from the Finance
Ministry, according to govern-
ment officials. These people,
some fired and some sus-
pended, are suspected of sup-
porting the man the govern-
ment accuses of
masterminding the revolt—
Fethullah Gulen, a U.S.-based
imam who denies any involve-
ment.
Mr. Erdogan and Mr. Gulen
worked in tandem for years to
break the power monopoly
that a secular, pro-military
elite held for decades. Mr. Gu-
len didn’t have a formal role in
politics; his followers worked
in business and the civil ser-
vice, and they supported Mr.
Erdogan’s party, the AKP, once
it came to power in 2002.
The alliance frayed publicly
in 2013. More recently, the
government has dubbed Mr.
Gulen as akin to a cult leader,
manipulating followers to use
their businesses and civil-ser-
vice jobs to undermine a dem-
ocratically elected parliament.
Mr. Gulen has denied any
wrongdoing.
More recently, the govern-
ment opened criminal cases
against Mr. Gulen himself. In
one confidential prosecution
reviewed by The Wall Street
Yet even moms end up put-
ting Twinkies in children’s
lunchboxes. Sales of Twinkies
and other snack-cakes spike
twice a year, in August, when
children go back to school, and
again when school resumes af-
ter the winter holidays, the
company says.
Jessica Howe, a 37-year-old
mom in Center City, Minn.,
stocks up on Hostess mini muf-
fins for her two youngest sons
because they refuse to eat most
healthy things. “It’s the in thing
to be super crunchy and or-
ganic. I will fully admit that I
feed my kids junk food,” she
Batches of Twinkies move along a conveyor belt to the packaging
area at the Hostess plant in Emporia, Kan.
FROM PAGE ONE
Journal, an indictment argues The board rescinded the
that a drawing of Halley’s banker’s license for failing to
comet on Turkish bank notes “fulfill his responsibilities.”
shows the imam’s malign in- Government officials had
fluence over the central bank,
because the comet is allegedly
been infuriated, according to
one person close to the finance
a secret sign to Gulen follow-
ers. The central bank declined
industry, by a client note the
banker sent describing theo-
to comment. ries of how the failed coup
Mr. Gulen, who moved to came about, including a rumor
the U.S. in 1999, isn’t mounting the president knew about it
a defense in these cases, con- and let it happen to grab more
tending the charges are politi- power.
cally motivated. Yuksel Alp The Capital Markets Board
Aslandogan, executive director didn’t respond to a request to
of a Gulen-affiliated nonprofit comment, nor did the fired
in New York called Alliance for banker, Mert Ulker. Ak Invest-
Shared Values, called the ment declined to comment.
comet allegation “ridiculous.” Several brokers and ana-
Mr. Aslandogan has said Mr. lysts in Turkey said the chill
Gulen’s followers are commit- has caused them to censor
ted to political change in Tur- their reports. One European
key via the rule of law. Turkey fund manager said he canceled
has long sought Mr. Gulen’s his subscriptions to Turkish
extradition from the U.S., a re-
quest Washington says it is re-
viewing. Economic Fallout
A Turkish law that predated Political turmoil in Turkey has added to volatility
the Gulen-Erdogan falling-out in its currency and growth rate
bans the dissemination of ma-
licious information aimed at Turkish lira per
influencing markets or inves- U.S. dollar*
tors. The law carries a penalty 1.5
of up to five years in prison,
and one person close to Turk-
ish finance said it long hung 1.9
like a sword of Damocles over July 15
the industry. Attempted
2.3
After the July rebellion, the coup
sword dropped.
The Capital Markets Board 2.7
said on July 27 it was purging
some of its members. A day
earlier, it asked prosecutors to 3.1
May 4
mount a criminal investigation Prime Minister Ahmet
of the head of research at Ak Davutoğlu ousted
3.5
Investment, a unit of Turkey’s
fourth-largest bank by assets, 2011 ’12 ’13 ’14 ’15 ’16
Akbank TAS, for insulting Mr. *Scale inverted Sources: Tullett Prebon (currency); Turkish Statistical Institute (GDP)
Erdogan and state institutions.
said. “If Hostess wants to make didn’t sell well.
them healthier, I’m all for it.”
Tinkering with a beloved
product like the Twinkie is
“They should not mess with
the Twinkie,” said 31-year-old
Kevin McGreevy, of Elmhurst,
risky, something Mr. Toler Ill., opposing the idea of a
learned the hard way. When low-calorie cake. “When you
an avian flu outbreak last year want an indulgence, you want
sent egg prices high, Hostess the real thing.”
switched to an egg-replace- A regular package of two
ment product. That changed Twinkies, sold as a single serv-
the texture of the Twinkie and ing, has 260 calories. A 10-pack
customers complained. Host- usually retails for about $2.99.
ess quickly reverted to its Hostess’s staying power says
original formula. The previous as much about Americans’ rela-
owners in 2008 rolled out tionship with food as it does
bite-sized Twinkies containing about its owners’ strategy. Peo-
just 100 calories in a pack, but ple might try to eat healthy
discontinued them after they most of the time, but they still
want to treat themselves. That
dichotomy not only fueled sales
of kale and quinoa, but also led
to the cupcake and Cronut and
made a taco shell fashioned
from a Doritos chip Taco Bell’s
best-selling product ever.
“There’s always going to be
a place for sweet, salty or
high-fat foods because they
JILL TOYOSHIBA/TNS/ZUMA PRESS
taste good and they’re satisfy-
ing,” said Jim Hertel, senior
vice president at retail con-
sulting firm Willard Bishop, a
unit of Inmar Inc.
One of the first decisions
the new owners of Hostess
made was to complete a task
the previous owners had
started: use technology to ex-
tend the life of the Twinkie.
brokerage research because it
started to read like govern-
ment news releases.
Political influence has be-
come more apparent at insti-
tutions such as the central
bank. Mr. Erdogan has called
for repeated interest-rate cuts
by the bank to underpin
growth, and for seven months
the bank did cut rates. Then in
October, citing a currency
trading near its weakest ever
level, the central bank
stopped. It did so one day af-
ter Mr. Erdogan’s chief eco-
nomic adviser said publicly it
would be all right for the bank
to “skip this month.” The cen-
tral bank declined to comment.
The sweeping expropriation
of Turkish companies has
come in waves. One of the big-
gest came on Sept. 9, when the
Gross Domestic Product
change from a year earlier
15%
12
9
6 Telekom responded to re-
3 raided by police after the
0
2011 ’12 ’13 ’14 ’15
THE WALL STREET JOURNAL.
Despite their reputation as
an indestructible feat of food
science, Twinkies used to go
bad after about 26 days, which
had a crippling effect on meet-
ing demand. A longer shelf life
would enable the company to
switch to a less costly ware-
house method of distribution.
Hostess said it worked with
an ingredient maker to develop
a natural enzyme to add to the
flour that controls the moisture
content of food so mold doesn’t
form. Now all Hostess products
including Ding Dongs, Ho Hos
and Sno Balls—even its line of
Hostess bread and buns sold
since last year—have a shelf
life of 65 days, up from 26.
The new owners invested in
larger ovens and robots that
can pack Twinkies into boxes.
Still remaining to do: Hostess
needs to introduce new prod-
ucts to expand the business,
Mr. Toler says. Its quest: deep-
fried Twinkies.
When executives came up
with the idea two years ago, af-
ter seeing vendors sell their
version at the Texas State Fair,
the company knew it would
have to ensure the new version
maintained the same “mouth-
feel” of soft sponginess sur-
rounding a creamy middle.
They took their time.
Ellen Copaken, vice presi-
THE WALL STREET JOURNAL.
government published a de-
cree seizing the assets of two
family-controlled conglomer-
ates with about $2 billion in
annual revenue apiece. The
families that head them have
long been under investigation
on suspicion of links to Mr.
Gulen, but not tried or con-
victed.
One company, Koza Ipek
Holding, controls Turkey’s
largest gold miner, publicly
traded Koza Altin İsletmeleri
AS. Its chairman, Akin Ipek,
has been fighting in domestic
and international courts since
last fall against an investiga-
YASMIN BULUL/PRESIDENTIAL PRESS SERVICE
tion of alleged links between
his business and the Gulen
movement. In an interview,
Mr. Ipek denied any wrongdo-
ing and called the seizure a
step to destroy his companies.
“They accuse me, my
brother, my sister and my
mother, who is over 70 years
old, of being members of a ter-
rorist organization,” Mr. Ipek
said. The family members
“have not done this, or even
purposely hurt anyone’s feel-
ings, anytime in their lives.”
Mr. Ipek wasn't in Turkey
before the coup attempt took
place and is at large. In late
October, the government of-
fered a reward for information
leading to his arrest.
The government put assets
of the seized companies under
THANASSIS STAVRAKIS/ASSOCIATED PRESS
control of an agency known by
the initials TMSF. Some will be
sold off after a tender process,
the agency’s president has
said, with the rights of com-
pany owners protected if they
are found not guilty.
“There are some companies
that are directly linked to the
Gulen movement, so perhaps
we will sell them first,” said
the official, Sakir Ercan Gul.
Mr. Canikli, the deputy
prime minister, said TMSF
management has helped stem
losses and boost the compa-
nies’ share prices. He didn’t
specify which companies he
was referring to. “We have
protected the rights of inter-
national investors through
these interventions,” he said.
A company owned by a pro-
government businessman re-
cently said it is negotiating
with TMSF to buy the shares
of Koza Ipek.
At the other seized con-
glomerate, Boydak Holding,
which has chemical, steel and
energy subsidiaries, Chief Ex-
ecutive Memduh Boydak and
Chairman Haci Boydak were
arrested in March but haven’t
faced trials. Neither could be
reached to comment. Haci Boy-
dak said in a July statement
that the family and their com-
panies have no link to the Gu-
len network.
State-owned Turkish Air-
lines dismissed 211 staff mem-
bers for reasons including sus-
pected links to the Gulen
movement. Turk Telekomu-
nikasyon AS, the country’s
largest landline operator and
Internet-service provider, said
two senior executives resigned
after being detained as part of
the anti-Gulen probe. Neither
Turkish Airlines nor Turk
quests to comment.
As for the law firm that was
failed coup, called Yuksel Kar-
kin Kucuk, its office telephones
now go unanswered.
’16 —Margaret Coker
and Georgi Kantchev
contributed to this article.
dent of marketing for Hostess,
said the company initially
planned to sell frozen battered
Twinkies to restaurants that
could deep fry them. Then Wal-
Mart Stores Inc.’s frozen-
snacks buyer heard about the
plan and asked if Hostess
would consider making one for
the store to sell. That pushed
Hostess to develop a frozen,
batter-covered Twinkie that
people could bake for a few
minutes in their ovens at
home—like a frozen pizza—
which would come out tasting
like it was deep-fried.
“We went through dozens
of different batters to get that
funnel-cake batter crispy
enough, but not too thick that
it overpowers the sponge cake
and cream filling,” said Ms.
Copaken.
In line with a broader mar-
ket turn toward healthier
foods, Hostess is studying
ways to remove artificial col-
ors from Twinkies, without al-
tering the taste. The company
has also introduced whole-
grain muffins and is working
on a gluten-free brownie.
They can only go so far, Mr.
Toler said: “You have to be
careful that you don’t become
a product where people go,
‘C’mon, that’s not what the
brand is.’ "
P2GW309000-0-A00900-1--------AL
THE WALL STREET JOURNAL.
The Oracle and Iconoclast
The Lyrics 1961-2012
By Bob Dylan
Simon & Schuster, 679 pages, £49.99
BY DAVID LEHMAN
NO SOONER WAS it announced last
month that Bob Dylan had won the
Nobel Prize in Literature than the
fighting began. Enthusiasts cited the
way Mr. Dylan has entered and mod-
ified the culture. How his phrases
linger in the air. The times they are
a-changin’. There are no truths out-
side the Gates of Eden. You don’t
need a weatherman to know which
way the wind blows. He not busy be-
ing born is busy dying.
But the cries of dismay were pre-
dictable if only because the poetry
community is marked by bile and re-
sentment. Any American poet—even
our grand old master Richard Wil-
bur, now 95—would get his share of
Bronx cheers if he were to win the
Nobel. It was said of Mr. Dylan that
he didn’t need the prize, that he is
yet another old white guy, that he is
arrogant, that he composes songs
not poems.
Purists would say that what he
writes are lyrics, which depend on
their musical setting for coherence
and are inextricably bound up with
their performance. I would counter
that the best of Mr. Dylan’s songs
work on the page, not only because
of their originality but equally be-
cause they constitute the auto-
biography of a personality that is re-
bellious, ornery, intense and
remarkably attuned to our rapidly
shifting zeitgeist.
Along comes “Bob Dylan: The Lyr-
ics 1961-2012” to help us to adjudi-
cate. Released today in unquestion-
ably the most fortuitous publication
timing in memory, the book contains
all of Mr. Dylan’s songs, organized
album by album from his eponymous
1962 debut to his most recent ef-
forts, “Together Through Life”
(2009) and “Tempest” (2012). The
transcendent period was the stretch
between 1964 and 1967—the period
of “Like a Rolling Stone,” “Desola-
tion Row,” “Sad-Eyed Lady of the
Lowlands,” “Visions of Johanna,”
“Just Like a Woman” and “All Along
the Watchtower.”
The collected lyrics make the pri-
mary case for Mr. Dylan’s achieve-
ment. But “Chronicles” (2004), the
first volume of Mr. Dylan’s pro-
jected three-volume memoirs, offers
a valuable window into the writer’s
Smuggling Truth Past the Censors
The Explosion Chronicles
By Yan Lianke
Chatto & Windus, 457 pages, £14.99
The Invisibility Cloak
By Ge Fei
New York Review, 126 pages, £11.44
BY SAM SACKS
THERE ARE MANY THINGS you
can’t write about in China. Anything
that challenges the official accounts
of Mao Zedong and other prominent
Communist Party officials is forbid-
den. So, too, are works that touch on
the Great Famine, the Cultural Revo-
lution or the Tiananmen Square mas-
sacre. It’s equally forbidden to criti-
cize the government’s human-rights
record, its occupation of Tibet and its
crackdowns on minorities. Books will
even be pulled off the shelf because
they’re judged to be deleterious to
public morals. And since the Central
Propaganda Department keeps its
rules secret, there are surely count-
less other subjects and incitements
considered off limits.
So how is satire thriving in the
country? What’s left to satirize? The
answer is capitalism. Since China
privatized its markets, and its econ-
omy began growing at breakneck
speed, novelists have been free to
excoriate the greed and corruption
that the change has wrought. The
best known of these satirists is the
2012 Nobel Laureate Mo Yan, who
blends a gonzo magic realism with
crude comedy to take on serious
contemporary issues like industrial
farming (“Pow!”) and the One Child
Policy (“Frog”).
But he is only the tip of the ice-
berg. Zhu Wen (“I Love Dollars”) and
Yu Hua (“Brothers”) have also writ-
ten lewd, chaotic and farcical send-
‘The poet is much more the one who inspires than the one who is inspired.’ —Paul Eluard
CHANGE AGENT Bob Dylan at the Newport Jazz Festival on July 25, 1965, debuting his new electric sound.
brain. “Truth was the last thing on
my mind, and even if there was
such a thing, I didn’t want it in my
house,” he wrote of trying to com-
pose songs. “Oedipus went looking
It was said of Dylan that
he didn’t need a Nobel,
that he is yet another
old white guy, that he
is arrogant and composes
songs, not poems.
for the truth and when he found it,
it ruined him. It was a cruel horror
of a joke. So much for the truth. I
was gonna talk out of both sides of
my mouth and what you heard de-
pended on which side you were
standing. If I ever did stumble on
any truth, I was gonna sit on it and
keep it down.”
Not for nothing did he discard
his birth name (Zimmerman) in fa-
vor of the first name of the wild
Welsh poet Dylan Thomas. A natural
surrealist, Mr. Dylan is a put-on art-
ist, a joker, enigmatic, elusive and
ups of the culture of runaway mate-
rialism and the injustices of the
wealth gap.
No contemporary satirist has had
more experience with China’s cen-
sors than Yan Lianke. His first novel,
“The Sun Goes Down,” was banned
in 1994 due to its depiction of the
People’s Liberation Army, and Mr.
Yan was forced to write self-criti-
cisms for six months. His 2005 work
“Serve the People!,” about a bored
army housewife during the Cultural
Revolution who gets aroused by
tearing up copies of Mao’s Little Red
Book, was denounced by the Central
Yan Lianke’s burlesque of
a nation driven insane by
money is equally a satire
of some of the excesses of
the Chinese Revolution.
Propaganda Department: “This no-
vella slanders Mao Zedong, the
army, and is overflowing with sex.”
The certainty of censorship meant
that his 2011 novel about the Great
Leap Forward, “The Four Books,”
couldn’t even find a publisher in
mainland China, appearing only in
Hong Kong and abroad. But when his
works are published at home, they
are wildly successful.
His latest, “The Explosion Chron-
icles,” was a best seller in China in
2013. Adopting the style of an an-
cient historical record (here in a
lively translation by Carlos Rojas),
it tells of the rise of Explosion from
a tiny mountain village to a city ri-
valing Beijing. Leading the ascent is
Explosion’s mayor Kong Mingliang
and his wife Zhu Ying, children of
rival clans who detest each other
BOOKS
full of belligerence. “Maggie’s Farm”
(1965), for instance, elevates “I
quit” into poetry: He “hands you a
nickel, / He hands you a dime, / He
asks you with a grin / If you’re
havin’ a good time, / Then he fines
you every time you slam the door /
I ain’t gonna work for Maggie’s
brother no more.”
And then there’s the ire hurled at
a false friend in 1965’s “Positively
4th Street”:
I wish that for just one time
You could stand inside my shoes
And just for that one moment
I could be you
Yes, I wish that for just one time
You could stand inside my shoes
You’d know what a drag it is
To see you.
Note the artful simplicity in these,
the song’s final stanzas. The lines
consist almost exclusively of
monosyllables. The meter is iambic
with anapests to keep the flow go-
ing and spondees to bring the
thought to a halt. The repetition of
lines reflects the influence not
only of the blues but also of tradi-
tional song.
but understand the expediency of
intermarriage. Kong made his for-
tune stealing from the cargo trains
that pass through the village. Zhu
is a wealthy brothel owner. With
this background in crime and a
governing approach centered on
bribery and intimidation, they ele-
vate Explosion to the status of
town, then county seat, then world-
bestriding metropolis.
This darkly absurd history trucks
freely with the fantastic—the city’s
airport is built in less than a week—
but many of the more brazen events
are taken straight from the news.
Echoing widely reported military
scandals, Kong buys his incompetent
brother a high-ranking position in
the army. Another chapter concerns
a space-saving edict requiring that
the dead be cremated rather than
buried. It triggers a rash of suicides
among the elderly who want to be
traditionally buried before the law
comes into force.
Mr. Yan’s burlesque of a nation
driven insane by money is equally a
satire of some of the excesses of the
Friday - Sunday, November 4 - 6, 2016 | A9
Usually when I discuss Bob Dylan
as a poet I point to his visionary
songs. “Desolation Row” (1965),
which I selected for inclusion in “The
Oxford Book of American Poetry,” is
terrific in its phantasmagoria:
The Titanic sails at dawn
And everybody’s shouting
‘Which side are you on?’
And Ezra Pound and T.S. Eliot
Fighting in the captain’s tower
While calypso singers laugh at them
And fishermen hold flowers
Between the windows of the sea
Where lovely mermaids flow.
Another fine example is the title
song of “Highway 61 Revisited”
(1965), which begins with God and
Abraham mixing it up in Genesis 22:
“God said to Abraham, ‘Kill me a
son’ / Abe says, ‘Man, you must be
puttin’ me on.’ ”
But you could as easily make the
case on the basis of his powers of
rhetoric. His gift is oracular. Some
of his strongest lines are infused
with the spirit of protest: “How
many roads must a man walk down
/ Before you call him a man?” Oth-
ers verge on heartbreak: “It don’t
even matter to me where you’re
Chinese Revolution. Aspects of Ex-
plosion’s unchecked expansion tac-
itly reflect the transformations of
the Great Leap Forward, from the
mass confiscation of land—here it’s
taken for roads and fancy houses
rather than collectives—to the cult
of personality that arises around
Kong. Late in the book, he ad-
dresses a field of animals, demand-
ing that they go somewhere else so
AFP/GETTY IMAGES
that he can erect another building.
Chinese readers will recognize in
the ridiculous scene a parallel to
Mao’s 1958 campaign against grain-
eating sparrows and insects, which
wrecked the country’s ecological
balance. “I am Mayor Kong. Did you
hear me when I said I wanted to im-
mediately construct a building
here?” he shouts. But as before, the
natural world is unimpressed.
Compared to “The Explosion
Chronicles,” Ge Fei’s “The Invisibil-
ity Cloak” (2012) is a model of re-
serve and understatement. Yet it
too, in the stylish translation by Ca-
naan Morse, is a sly and damning
piece of work. The narrator is Mr.
DAVID GAHR/GETTY IMAGES
wakin’ up tomorrow / But mama,
you’re just on my mind.”
With its rapid-fire patter, “Subter-
ranean Homesick Blues” (1965) pre-
figures the spoken-word and perfor-
mance poetry of so much recent
music: “Johnny’s in the basement /
Mixing up the medicine / I’m on the
pavement / Thinking about the gov-
ernment / The man in the trench
coat / Badge out, laid off / Says he’s
got a bad cough / Wants to get it
paid off.” The rhymes in “Like a Roll-
ing Stone” (1965) or “I Want You”
(1966) show there’s a lot of life left
in that venerable device.
In 1880, Matthew Arnold intro-
duced the concept of “touchstones”
into the study of poetry, for exem-
plary lines that imprint themselves
on the mind. It is a criterion the
author of “Visions of Johanna”
(1966) meets: “The ghost of ’lec-
tricity howls in the bones of her
face.” With or without music, that
line sings. Only a true poet could
have written it.
Mr. Lehman, a poet, is the author
of “Sinatra’s Century: One Hundred
Notes on the Man and His World”
and “A Fine Romance: Jewish
Songwriters, American Songs.”
Cui, a curmudgeonly everyman who
puts together bespoke sound equip-
ment for Beijing’s nouveau riche.
When Mr. Cui accepts a commission
to help a client “acquire the highest
quality sound system in the world,”
he enters the orbit of a shadowy
millionaire named Ding Caichen,
who emanates distinct auras of vio-
lence and desperation.
Is Ding a mafioso or something
even more dangerous? Mr. Cui
doesn’t want to know, but the com-
mission keeps entangling him in the
man’s business, giving him cryptic
and terrifying glimpses of the sav-
agery beneath Beijing’s shiny veneer.
Ge Fei craftily evokes taboo subjects.
He pokes fun at old revolutionary
opera songs like “Overthrow the
American Imperialist Wolves.” When
Mr. Cui demonstrates the sound sys-
tem for his gangster client, he plays
a record of Erik Satie, noting that “a
lot of people secretly like his music”
and that he was the teacher of De-
bussy. For Chinese readers this will
conjure the episode during the Cul-
tural Revolution when musicians
were arrested and abused for de-
fending Debussy’s music.
The book’s title refers to the ru-
mor of a magical garment that al-
lows one to walk around unseen.
Mr. Cui dismisses the tale, but his
own power is his ability to move in-
conspicuously through Beijing’s bru-
tally competitive society, keeping
“one eye closed and one eye open.”
Ge Fei offers a wry example for Chi-
nese novelists hoping to follow a
more cautious path than Yan Lianke
has: Don’t call attention to yourself;
master the tools of allusion, meta-
phor and silence. In these ways the
writer can smuggle vital truths past
the censors.
Mr. Sacks writes the Journal’s
fiction chronicle.
P2GW309000-0-A01000-1--------AL
A10 | Friday - Sunday, November 4 - 6, 2016
‘Fortune, which has a great deal of power in matters but especially in war, can bring about great changes in a situation through very slight forces.’ —Julius Caesar
Highly Volatile Human Explosive
Rogue Heroes
By Ben Macintyre
Viking, 380 pages, £25
BY RODERICK BAILEY
WHAT IS A HERO? The word has
been so overused as to be almost
meaningless. A person “admired for
their courage, outstanding achieve-
ments, or noble qualities” is one dic-
tionary definition. For Ben Macintyre,
the author of “Double Cross,” “Agent
Zigzag” and other best-selling books
on World War II espionage, the
founding members of Britain’s Special
Air Service (SAS) meet conditions like
these handsomely. It is the story of
their exploits in World War II that he
tells in “Rogue Heroes.”
One of the world’s best known
special forces units, the SAS was the
brainchild of David Stirling, a 6-
foot-6-inch Scotsman whose blue-
bloodline stretched back to King
Charles II. In the summer of 1941,
Stirling was a 25-year-old lieutenant
serving with the Scots Guards in
North Africa. British forces were
locked in combat with German and
Italian troops, and he asked senior
officers for permission to raise a
unit for waging irregular warfare far
behind enemy lines. Charm and fam-
ily connections helped win the nec-
essary approval.
Next came the search for volun-
teers. “Courage, fitness and determi-
nation in the highest degree,” read
Stirling’s shopping list of desirable
qualities, “but also, just as important,
discipline, skill, intelligence and train-
ing.” The initial 66 recruits were
drawn from army units in North Af-
rica. Those selected were a distinctive
and diverse lot—they included a hotel
porter, an ice-cream maker, an ama-
teur boxer and a tomato farmer—
united by their ability to think and act
as individuals. “I always hoisted on-
board guys who argued,” Stirling later
recalled. Their training began under
the demanding gaze of his second-in-
command, Jock Lewes. Some were
killed while learning to parachute.
Operations began in November
1941. The first was a mess. Fifty-five
men parachuted into enemy-occupied
Libya with orders to raid local air-
fields. The jump was made in fierce
storms that killed some and injured
more and made it impossible to re-
cover the equipment drop. The air-
fields were left untouched, and only
21 men made it back. Lessons were
learned, however. One was the advan-
tage of four-wheeled desert travel,
“cutting out all the danger and uncer-
tainty involved in jumping out of air-
planes in the dark.” Within weeks,
America’s Army of Mavericks
Twilight Warriors
By James Kitfield
Basic, 405 pages, £22.86
BY MARK MOYAR
IN NOVEMBER 2001, as the militia-
men of the Northern Alliance were
preparing to assault an Afghan city
that remained under Taliban control,
the militia’s commander, Gen. Abdul
Rashid Dostum, phoned an urgent re-
quest to the U.S. general in charge of
the air campaign. Gen. Dostum ex-
plained to his American counterpart,
Maj. Gen. David Deptula, that a Tali-
ban leader in the city had just called
him to boast that he had put his head-
quarters in Gen. Dostum’s own house.
“You should bomb my house
immediately,” Gen. Dostum said. “It’s
the only house within miles with a
swimming pool and tennis court.”
In a few minutes’ time, Gen.
Deptula obtained overhead imagery of
the house and ordered a B-1 bomber
to drop two precision-guided bombs
on it. But then the staff at U.S. Central
Command intervened, putting the
strike on hold until it could verify the
target. Geospatial intelligence person-
nel faxed a satellite photo of the house
to Uzbekistan, from which the photo
was flown by helicopter into Afghani-
stan, where a Special Forces soldier
carried it on horseback to Gen. Dos-
tum. By then, of course, the Taliban
leader had left. “If you want to bomb
my house, go ahead,” Gen. Dostum in-
formed Gen. Deptula. “But there is no
one there anymore.”
This episode is one of many in
James Kitfield’s “Twilight Warriors”
that will be new to observers of
America’s wars against Islamic ex-
IRREGULARS A heavily-armed patrol of ‘L’ Detachment SAS in their jeeps, wearing Arab-style headdress, Jan. 18, 1943.
Stirling and his men were back in ac-
tion and to better results. Soon they
were operating with impunity.
Grit, confidence, daring and initia-
tive were hallmarks of the SAS
throughout the war. One raid in July
1942 saw a massed attack by 18 jeeps,
each wielding four machine guns, that
smashed through the perimeter of a
German airstrip in the Egyptian des-
ert and, at walking pace, destroyed an
estimated 37 airplanes. It is said that
over the course of multiple raids, one
SAS officer, the star rugby player
Paddy Mayne, personally wrecked
more enemy aircraft—with bullets,
bombs and his bare hands—than were
shot down by the RAF’s highest-scor-
ing fighter pilot.
Later, the SAS helped spearhead
the invasions of Sicily and Italy and
the Allied conquest of northwest Eu-
rope, where its roles ranged from cap-
turing ports to fighting—and dying—
side by side with Italian partisans and
the French Resistance. By the end of
the war, Stirling’s tiny band had be-
come a brigade of five regiments (two
British, two French and one Belgian):
a formidable force of 2,500 men.
“Rogue Heroes” is a terrific story
of human enterprise, endurance and
achievement and vividly brings to
life an extraordinary cast of charac-
ters. Mayne, a wild and troubled Ul-
sterman destined to rank among the
tremism. Mr. Kitfield, a veteran na-
tional-security reporter whose earlier
book, “Prodigal Soldiers” (1997),
deftly narrated the U.S. military’s re-
vitalization after Vietnam, here pro-
vides an enlightening tour of 21st-
century counterterrorism—its
successes and failures, its evolving
technologies, and its ever-festering ri-
valries among national-security agen-
cies. Along with voyaging through the
In 2012 officials
concluded that the White
House was suppressing
intelligence on extremist
threats to justify pulling
out of the Middle East.
Greater Middle East, he covers parts
of Africa and Latin America, where
U.S. agencies have combated terror-
ists and drug traffickers.
Unlike many such accounts, “Twi-
light Warriors” does not dwell on
Presidents George W. Bush and Barack
Obama or their cabinet officials.
Rather it focuses on the leaders at the
next level down—those who prose-
cuted the wars in Afghanistan, Iraq
and other distant lands. Some of these
individuals, like Gens. David Petraeus
and Stanley McChrystal, are nearly
household names, owing to their bat-
tlefield accomplishments. Two who
are less familiar—Gen. Martin
Dempsey and Lt. Gen. Michael Flynn—
are presented more fully than before
through Mr. Kitfield’s expansive inter-
views. Both are shown to be leaders
who routinely overcame bureaucratic
parochialism and hidebound thinking.
BOOKS
most decorated British soldiers of
the war, was “240 pounds of highly
volatile human explosive.” “Recruit-
ing Mayne,” Mr. Macintyre writes,
“was like adopting a wolf: exciting,
certain to instill fear, but not neces-
sarily sensible.” The author is partic-
ularly good at showing how irregular
war fits some men better than oth-
ers. David Stirling was a drifter by
nature, almost allergic to rules and a
poor fit for conventional army ser-
vice, but exceptional as a leader of
like-minded adventurers.
We live in an age when special
forces have been shrouded in a haze
of glamour. Mr. Macintyre points out
that studies of the SAS “veer toward
the hagiographic; many are somewhat
overmuscled, tending to emphasize
machismo at the expense of objectiv-
ity.” Aiming for balance, he draws at-
tention to how members of the group
carried out acts that were tantamount
to murder—the execution of prison-
ers, for example—and how men who
were increasingly accustomed to kill-
ing could find lines blurring as the
war wore on. He touches, too, on the
psychological costs for some of those
who fought like that. But he is not de-
tached enough. Contemporary criti-
cisms of the SAS as undisciplined ad-
venturers beyond the control of
senior commanders are dismissed as
carping rather than fully explored.
The figure who is least known to
the public is Brian McCauley, whose
agency—the FBI, where he rose to be-
come deputy assistant director—has
played the least-heralded role in over-
seas counterterrorism operations. Few
Americans, indeed, had ever heard of
Mr. McCauley until two weeks ago,
when news organizations publicized
his assertion that he had rebuffed a
State Department request to reclassify
a Benghazi email so that it was “never
to be seen again.”
Mr. Kitfield traces FBI counterter-
rorism from the late 1990s, a period
when the FBI and CIA strenuously re-
sisted cooperation. “Whenever the
two agencies were forced to work to-
gether . . . ,” Mr. Kitfield says, “CIA
and FBI agents clashed openly and of-
ten, with the former playing to type as
tweedy Georgetown intellectuals, and
the FBI agents coming across as blue-
collar beat cops.” Even after 9/11 the
tensions remained. The FBI sent its
expert interrogators to question ter-
GETTY IMAGES
“Rogue Heroes” also overstates the
newness and significance of what the
SAS achieved. They did not “turn the
tide of war”; the ebb and flow of
World War II was decided on conven-
tional battlegrounds, not by pinprick
raiding. Nor is Mr. Macintyre correct
to claim, pointing to the long-range
targeting of enemy assets with light-
SAS recruits included a
hotel porter, an ice-cream
maker, an amateur boxer
and a tomato farmer.
ning attacks, that the SAS “changed
the face of warfare.” It is true that
some of its tactics and techniques
match those of special forces today; it
is less accurate to say that the SAS pi-
oneered them. Elite units have been a
feature of warfare since Thermopylae,
if not earlier. British precedents range
from the ghillie-suited Lovat Scouts in
the Boer War (raised by David Stir-
ling’s uncle, a fact omitted from Mr.
Macintyre’s book) to Orde Wingate’s
ruthless Special Night Squads in Pal-
estine in the 1930s.
Even the name “Special Air Ser-
vice” had been used before. Mr. Ma-
cintyre claims it was invented in 1941
rorist suspects who had been detained
abroad, but they were elbowed aside
by the CIA, which insisted on “en-
hanced interrogation techniques” that
the FBI judged to be ineffective.
Mr. Kitfield explains how Mr. Mc-
Cauley cultivated personal contacts at
his foreign postings to break down
GETTY IMAGES NEWS
barriers between agencies. He ex-
panded the FBI presence in Afghani-
stan from a handful of agents to more
than 100 to track down insurgent sui-
cide-bomb cells. By demonstrating the
value of the FBI’s technologies and
techniques, he persuaded skeptical
Special Forces soldiers to lend a hand
with security.
While “Twilight Warriors” is filled
with success stories, it also illumi-
nates shortcomings and setbacks. In
one instance, Mr. McCauley looked
into a senior Afghan official after no-
ticing that he was reaching the site of
every terrorist bombing before any-
one else. Mr. McCauley learned that
the man controlled the ramp at Kabul
THE WALL STREET JOURNAL.
in the Mideast for a bogus British unit
whose supposed existence, when
leaked, might make the enemy think
that a new airborne force was being
deployed. But the name was actually
coined a year earlier in England for a
real battalion of flesh-and-blood com-
mandos who were the first British
soldiers to be trained in parachuting.
Some of them, as X Troop of the 11th
Special Air Service, saw action in Italy
in February 1941. Later that battalion
became the Parachute Regiment.
It may seem pedantic to pick holes
like these in a work of popular his-
tory, but, importantly, this is the first
account of the SAS to be “authorized”
by the regiment itself, which remains
one of the British Army’s elite units.
Why the SAS felt the need for such a
book is not explained. Nor is its pref-
erence for Mr. Macintyre’s style of
rip-roaring history over more mea-
sured scholarship. A great deal is
made of his privileged access to the
SAS archives, which are off limits to
other researchers. In the end, though,
beyond some photographs, a few quo-
tations from contemporary docu-
ments, and a couple of forays into
long-open files elsewhere, he has pro-
duced little that adds substantially to
what others have published before.
The greater problem for Mr. Ma-
cintyre is that the story of the SAS in
World War II has been told and retold
by historians and biographers repeat-
edly since the war. SAS veterans
shared their stories freely. Many
penned memoirs. The recollections of
Malcolm Pleydell, a medical officer
with the SAS in the desert, were pub-
lished as early as 1945. The extent to
which Mr. Macintyre depends on
these sources will not be obvious to
most readers since “Rogue Heroes” is
without footnotes.
A study of foreign archives would
have added something new. Mr. Macin-
tyre confines himself to the SAS’s Brit-
ish contingent, so its French and Bel-
gian members barely get a mention
and the opportunity is missed to intro-
duce a fresh perspective. Accuracy, too,
could have been improved by greater
reference to enemy records. His esti-
mates of the damage and carnage of
SAS operations are overly dependent
on the claims of the raiders them-
selves. A rounded picture would weigh
accounts from all sides, but Mr. Macin-
tyre’s Italians and Germans tend to ap-
pear as faceless and craven caricatures.
“Rogue Heroes” is an absorbing
story of derring-do, told with skill and
flair. But it is not the groundbreaking
account that it claims to be.
Mr. Bailey is a historian at the Uni-
versity of Oxford where he special-
izes in the study of irregular war-
fare in World War II.
airport, where opium was exported
and that he was meeting with
Pakistani intelligence figures. But the
FBI never gathered enough informa-
tion to bring charges against him.
Other failures were self-inflicted.
The Obama administration chose to
rely on surgical strikes against en-
emy leaders as its principal counter-
terrorism tool despite opposition
from top experts. “In the wrong cir-
cumstances targeted killings were
like a narcotic,” Mr. Kitfield writes,
summarizing Gen. McChrystal’s
views, “lulling decision makers into
a false sense of accomplishment
where showy gestures were confused
with solving root problems.”
According to Mr. Kitfield, veteran
counterterrorist officials concluded in
2012 that the Obama administration
was seeking to suppress intelligence
on Islamic extremist threats in order
to justify walking away from Iraq,
Syria, Afghanistan and other countries
that had fallen apart on his watch. Sev-
eral senior intelligence officials, he re-
veals, objected vociferously when the
National Intelligence Council drafted
an estimate asserting that al Qaeda no
longer posed a threat to the United
States. The uproar compelled the
council to withdraw the assertion.
Many of these officials have since
moved out of government. From the
sidelines, they have watched the Obama
administration’s retrenchment from in-
ternational affairs with sorrow and dis-
may. “The brotherhood of soldiers,
spies, and special agents,” writes Mr.
Kitfield, has come to realize that “the
administration had confused walking
away from a fight with ending one.”
Mr. Moyar is director of the Center
for Military and Diplomatic History
at the Foreign Policy Initiative.
P2GW309000-0-A01100-1--------AL
THE WALL STREET JOURNAL.
Not Just Jane
By Shelley DeWees
Harper, 320 pages, £9.99
BY ALEXANDRA MULLEN
A FEW YEARS ago, Shelley DeWees
realized that the bookshelf symbol-
izing her love of British literature
had some gaps: “I had virtually no
idea what existed between Pride and
Prejudice and Jane Eyre; or, for that
matter, between Jane Eyre and Mid-
dlemarch; or Middlemarch and Mrs.
Dalloway. . . . There had to have
been other British women writing
and publishing alongside [the au-
thors she knew], and I decided to
find out who they were, what they
wrote about, and why their work
was missing from my bookcase and
from our cultural curricula.”
Ms. DeWees “discovered” hun-
dreds of authoresses (as she calls
them) who “all deserve recogni-
tion.” For “Not Just Jane,” she has
selected seven whom she particu-
larly admires because they were
“courageous” and “plucky” or had “a
tale of woe so amazing, so affect-
ing” that their “journeys toward au-
thorship” required “a broad disre-
gard for convention” and “an
unabashed sense of self-worth.” Ms.
DeWees’s most admired characteris-
tic in each: “coolness, her aptitude
for blowing my mind.”
So who are these “Amazing
Women Writers Who Transformed
British Literature,” as the book’s
subtitle has it?
Charlotte Turner Smith
(1749-1806) raised 12 children with-
out much help from her improvident
husband and as a poet was “instru-
mental in the rise of the Roman-
tics.” Helen Maria Williams (1759-
1827) is “an archetype of those
brazen women who sought to en-
gage with politics as an equal,” who
witnessed the French Revolution as
“a war journalist in a petticoat.”
Mary “Perdita” Robinson (1758-
1800) used “her ample beauty and
cunning” to become mistress to the
future George IV, an “icon of fash-
ion” and finally a “gifted best-sell-
ing writer.” Catherine Crowe (ca.
1800-76), an “enigmatic enchant-
ress,” wrote a book that “employed
a plot strategy that led to an en-
tirely new genre of literature: the
detective novel”; she was also an
“early adopter” of spiritualism. Sara
Coleridge (1802-52), the poet’s
daughter, was “the creator of the
very first fantasy novel in English,
Phantasmion (which displays an un-
precedented and singular attention
to world building),” but, alas, “drug
addiction haunted sweet Sara.” And
while “Dear, dear Dinah Craik”
(1826-87) “made her stand for the
rising number of independent single
women,” Mary Elizabeth Braddon
(1835-1915) wrote “groundbreaking,
utterly shocking novels” that
“punched clean through the ceiling
of her publishers’ best-seller re-
cords, and she became one of the
wealthiest, most successful writers
of the nineteenth century.”
SCIENCE FICTION: TOM SHIPPEY
RICHARD BEARD’S
darkly mysterious
novel is nothing if
not provocative.
What would hap-
pen, it asks, if the
Crucifixion took place now?
“The Apostle Killer” (Melville
House, 331 pages, $25.99) opens
immediately after the Crucifixion,
in Roman-occupied Judaea. But this
is a Judaea with surveillance cam-
eras, laptops and forensic science.
The Roman authorities are not
happy about the disappearance of
Jesus’s body.
Is he really dead? Did the disciples
sneak an anesthetic drug into the
sponge put to Jesus’s lips on the
Cross? Why did the centurion not fol-
low procedures to ensure Jesus was
dead? Is it all an insurgent plot?
Cassius Gallio has been told to
find out, and his career is on the
line, for he failed badly over the
Lazarus incident. His problem is
that the apostles, who are the main
suspects in the case, keep dying,
starting with Judas, found hanged.
A suicide or an execution? Then the
others start to go.
These days few will remember
“the fates of the apostles,” though
‘Men were put into the world to teach women the law of compromise.’ —Jane Austen
We Are All Janeites
It is highly probable that anyone
still reading this piece has never
heard of most, or possibly any, of
these women, but some might have
read (or seen television adaptations
of Braddon’s “Lady Audley’s Secret”
(1862) or Craik’s “John Halifax, Gen-
tleman” (1856). Ms. DeWees is in-
dignant at this state of affairs. To
her, it seems unfair that Austen and
the Brontës, “a sisterhood of reclu-
sive, scribbling parsons’ daughters,”
are still read, when these seven
writers are not “canonized.”
Ms. DeWees regrets that, since
the lot of women in this era was
“almost invariably dreadful” and
talent often went unrecognized,
“the game of lasting fame is an in-
herently unfair one.” Alas, she la-
ments, arbiters of literary posterity
seem to think that “aesthetic stan-
dards and the accompanying judg-
ments are important.”
Ms. DeWees plays fair in admit-
ting that literary merit is not her
primary criterion. What she ad-
mires about these women is that
they wrote “not only for their en-
tertainment value, but for their so-
cial commentary.” Thus, even when
Ms. DeWees grants that a book is
“decidedly melodramatic” and
“written in an outmoded style,”
she’ll praise it as “a triumph” if it
is also “a commentary on the plight
of women in the eighteenth cen-
tury, on the lack of options for
them (especially those who shirked
societal norms).”
“Not Just Jane” is an industrious
work by an adoring reader, who
writes with the passionate parti-
sanship of a fan. Her converting
zeal is apparent on every page,
holding up passages of poems and
novels to tempt us. With verve and
brio, she imagines her modern self
into her subjects’ minds, as when
Charlotte Smith left her “kids” be-
hind to join her husband in debtors’
prison: “It’s heartbreaking to imag-
ine her lying there in the gloom,
feeling the dismal weight of it all
on her heart.” For readers unfamil-
iar with this period, she gives back-
ground on the French Revolution
(good), the Terror (bad) and “big-
name writers like Samuel Johnson
and Edmund Burke.”
Yet Ms. DeWees also writes with
the limitations of a fan: Her zeal at
any particular moment overwhelms
her memory of her zeal a few pages
before, especially in deciding if we
should admire these figures for
their autonomy or victimhood. Thus
Smith and Williams have been ig-
nored, she suspects, because they
were too radical, while Coleridge is
overlooked because she was “too
conventional, too restrained to war-
rant much regard.” Ms. DeWees
praises Smith for moderating her
support of the French Revolution af-
ter the Terror, while at the same
time excusing Williams for excusing
the execution of the King and
Queen, thus “further refusing to do
what was expected of her as a
woman.” These are not the only in-
consistencies in her account. In one
paragraph, Williams, “beset by bad
press,” is described as choosing “to
CSI: Judaea
once every child was taught about
them. Andrew was crucified on an
X-shaped cross, Peter upside-down.
But Bartholomew, skinned alive? Si-
mon, sawn in half?
The detective Cassius
Gallio is charged with
solving a puzzling case:
the resurrection of Jesus.
Gallio encounters all 12. He him-
self is the usual type of detective,
divorced, depressed, anxious
about his job. The plot is also like
a spy novel, with a key figure be-
ing Paul. Increasingly the center of
the Jesus movement, he was a
trained security operative before
he changed sides.
Or did he? Perhaps the Roman
“Complex Casework Unit” has
been running him as a double
agent all along, precisely to take
control of a dangerous threat to
Rome. But double agents can turn
into triple agents.
This is a smart, sly, unpredictable
novel with uncertainty at its heart.
BOOKS
UNIVERSALLY ACKNOWLEDGED Celia Johnson and Hugh Williams in
‘Pride and Prejudice’ at London's St. James’s Theatre in 1936.
live and work in France”; in the next
paragraph, she has suffered “ostra-
cism in her native land.” Ms. DeW-
ees accurately points out that mar-
ried women in Britain were not
legally entitled to their own earn-
ings, but then she says that, “as an
actress, [the married Robinson]
would be her own lady, with her
own money.” Most remarkably,
Smith was “a bookish teenager
turned child bride.”
Current labels betray Ms. DeWees
when she attempts to employ them.
She often uses “liberal” and, more
often, “conservative” in ways that
are not accurate—she praises Flor-
ence Nightingale as an “activist”
against nameless “conservatives,”
but she doesn’t acknowledge that
Nightingale herself held many views
that would now be considered cave-
man conservative, including denying
women the franchise. She praises
Craik’s very fine novel “Olive”
(1850) at the expense of “Jane Eyre”
(1847), perhaps not realizing that it
was written as a “conservative” re-
sponse to Charlotte Brontë’s book:
The crippled heroine Olive exhibits
quiet Christian patience, unlike the
almost “heathen” (as she calls her-
self) Jane.
In her enthusiasm to elevate her
authoresses, Ms. DeWees some-
times overpraises them and dis-
misses or even mocks others. Male
authors come off particularly badly.
The young Wordsworth, for exam-
ple, admired Williams so much that,
according to Ms. DeWees, he com-
mandeered the title of her book for
one of his own, plagiarizing even
Mariotto di Nardo’s ‘Stoning and burial of St. Stephen’ (c. 1408).
Even Mr. Beard’s title is ambiguous.
Does it mean “killer of apostles,” or
“apostle who is a killer”? As for
poor Gallio, the one thing he cannot
accept is a supernatural explanation
for the strange events he encoun-
ters. He may solve the murders, but
he cannot solve the case.
Myth in the modern world is
also the theme of Keith Donohue’s
“The Motion of Puppets” (Pica-
dor, 260 pages, £18.99). You know
those quaint little shops down side
streets, their windows crammed
with strange and magical curiosi-
ties? The ones that seem to be al-
ways closed? If you’re walking
Friday - Sunday, November 4 - 6, 2016 | A11
whose involvement in the Waxhaw
massacre during the American Rev-
olution the author doesn’t mention.
(Tarleton inspired the cruel Green
Dragoon in Mel Gibson’s film “The
Patriot.”) Ms. DeWees is also almost
personally wounded at the gossip
surrounding Catherine Crowe when
she was discovered wandering Edin-
burgh in a state of nakedness, ap-
parently believing herself to be in-
visible. Ms. DeWees particularly
attacks Dickens: He “betrayed”
Crowe when he referred to her as “a
medium, and an Ass.”
Despite all this, Ms. DeWees’s in-
tellectual curiosity is very com-
mendable—and the questions she
has asked are precisely the sorts of
questions that scholars, most of
them women, began asking in the
1970s. Although she says these
women writers “have been languish-
ing in obscurity for more than a
century,” Ms. DeWees’s admirable
bibliography and many footnotes at-
test to her knowledge of her schol-
arly foremothers. All seven of these
women still have works in print
from either commercial or academic
houses. They can also be read with-
POPPERFOTO/GETTY IMAGES
out cost through Project Gutenberg
and the Internet Archive. So if you
feel as if you’ve exhausted the usual
suspects and want new old work to
read, follow Ms. DeWees’s advice:
“Go, reader, rediscover it all over
again.” Or discover it for the first
time, even. As Ms. DeWees optimis-
tically points out, “it takes only a
handful of adoring fans to revive an
her comma: “Poems, in Two Vol- authoress and her work, to invite
umes.” She chides Dickens for re- her to be read once again; to light
moving some “horribly dismal” de- the torch that will move from gener-
tails about madness from one of ation to generation.”
Catherine Crowe’s stories for his In my 30 years of specializing in
journal Household Words, possibly this period, I have in fact read 16
not realizing that Dickens’s “new- works by these women, and I have
fangled magazine” was meant for learned a good deal. But I have also
the whole family. learned something about what makes
Jane Austen and Charlotte Brontë and
George Eliot—well, Jane Austen and
Charlotte Brontë and George Eliot.
But how many of us Ms. DeWees doesn’t consider that
have read the work of precisely what she so admires about
the women whose work she champi-
Crowe, Craik, Smith, ons is what dates them. These women
Coleridge, Robinson, were better than average at describ-
ing political crises, fashionable causes
Williams or Braddon? and the frustrations of women facing
serious social and legal barriers—
consequently, as those particular po-
It’s not always clear that Ms. De- litical crises passed and women had
Wees listens to herself: She is sad- more choices and fashions changed,
dened that Williams was “upbraided their work was superseded. It no lon-
in the press for her radical opin- ger speaks directly to us.
ions” without apparently registering Insofar as Austen and Brontë
that male radicals were upbraided wrote about how to identify the right
in the press too—that kind of comes person to marry, one of the most im-
with being a radical. Our author is portant decisions we still make, their
also tickled that Braddon’s novels novels remain timely. But in fact
were best sellers, upsetting “the ul- they were not writing solely or even
traconservative Victorians,” al- mostly about marriage but rather
though I wonder who she thinks about the interior struggle to forge
was buying them, if not those very an authentic identity in relation to
same Victorians. the world. As long as there are
In general Ms. DeWees relishes women and men involved in that
scandalous details about contempo- quest, the witty, judicious, profound,
raries—George III borrowing the passionate voices of these great,
money to pay off Mary Robinson, great authoresses will speak to us.
for instance—but doesn’t like them
to begrime any of her authoresses. Ms. Mullen writes for the
Another of Mary Robinson’s lovers, Hudson Review and the
for instance, was Banastre Tarleton, Barnes & Noble Review.
he’s a suspect. Older man, young
wife in show business, surrounded
by attractive males—it’s a familiar
scenario. Worse, Theo is working
on a life of the photographer Ead-
weard Muybridge, the man who
PRINT COLLECTOR/GETTY IMAGES
first captured a horse in motion,
who also pursued and shot his
wife’s lover. What other leads do
they have?
The myth being retold is the old
one of Orpheus and Eurydice, the
man trying to redeem his wife from
the underworld. Mr. Donohue’s
novel is reminiscent of Neil
Gaiman’s “Coraline,” about people
home late at night, and you try the with button eyes. It has its own
handle of one, just on a whim, and strangeness as well. All of the pup-
it opens—don’t go in. pets have a history as humans, and
That’s what Mr. Donohue’s hero- the puppet world has deeper and
ine, Kay, does. She’s an acrobat, fas- deeper layers. It’s not the human
cinated by the shop’s array of old puppeteers who are the true pup-
dolls and marionettes. Going inside pet-masters.
makes her into a puppet, trapped in Mr. Donohue shifts between the
the Back Room, coming alive only at two worlds of the mundane and
night. The other puppets, the the magical so readily that the
Clown, the Devil, the Three Sisters, boundary between them begins to
tell her there’s no way out, unless fade. Underneath all the changes,
the puppeteers take her away. To his story has the emotional depth,
appear in a show? Nobody comes the love and grief of the old myth,
back, so they don’t know. only transposed to the sad,
Meanwhile Kay’s husband is leaves-falling “October country”
frantically searching. To the police, of the mind.
P2GW309000-0-A01200-1--------AL

A12 | Friday - Sunday, November 4 - 6, 2016 THE WALL STREET JOURNAL.

OPINION
REVIEW & OUTLOOK
America’s Best Arab Ally
The Costs of Clinton Faces a Crumbling Region
A
mericans go to the polls next week facing nuclear deal with Iran, the withdrawal from Iraq
what millions believe is the worst presi- in 2011, and the abandonment of Libya after Eu- Amman baileh, the terrorism analyst. Both
Abu Bakr al-Baghdadi the remnants of the old Islamic State
dential choice of their lifetimes. As we rope and the U.S. toppled Moammar Gadhafi.
is losing his nerve. Af- and its successor group, he says, will
wrote after Donald Trump won Even if she wants to revive ter a year of silence, have an incentive to stage brutal, so-
the Indiana primary in May, Her policies are further U.S. leadership abroad, how- the self-proclaimed phisticated attacks—the former to
the New Yorker and Hillary left than Obama’s, and ever, there is the question of caliph of Islamic State demonstrate it is still in the game,
Clinton are both deeply means. Her entitlement expan- released an audio re- the latter to prove its jihadist chops.
flawed. But one of them will be you know her ethics. sions and higher taxes will BORDER
LANDS cording Wednesday in Meanwhile a study published this
the next President, so in the squeeze the economic growth By Sohrab
which he urged his week by Mr. Sabaileh and Fares
coming days we’ll try to sum- and budget space needed to fi- fighters to stand firm Braizat, a former in-house pollster to
Ahmari
marize the risks—and the fainter hopes—of each nance more defense spending. This is Western in Mosul as the U.S.- the royal court, concluded that jihad-
candidacy in turn. Europe on the installment plan. backed coalition ist ideology has found fertile soil in
i i i Lurking behind all this, as we’ve seen these closed in. “The value of staying on some elements of Jordanian society.
your land with honor is a thousand To wit, 7% of Jordanian adults, when
Start with Mrs. Clinton because the costs of past two weeks, is the familiar pattern of scandal
times better than the price of retreat- asked if three Islamist terror outfits
her Presidency are easier to see in advance. To fed by her penchant for secrecy and political ing with shame,” he thundered. (including Islamic State) represent
wit, she would continue President Obama’s pro- paranoia. As journalist Carl Bernstein has noted, Next door, Jordanians watch the their worldview, chose one or more of
gressive march to a French-style welfare and she shares Richard Nixon’s “obsession with ene- Mosul operation with enthusiasm and the groups. The people in this trouble-
regulatory state. On nearly every domestic issue, mies.” She surrounds herself with henchmen like unease. As Information Minister Mo- some “7%” tend to be young, male, ed-
she has embraced Mr. Obama’s agenda and Sidney Blumenthal and David Brock, who feed her hammad al-Momani puts it in an inter- ucated urbanites whose families spend
moved left from there. instinct to stonewall and attack. view in Amman this week, “To us the at least $1,100 a month.
She wants higher taxes, more spending on en- The most astonishing revelation of the 2016 Mosul operation is a cornerstone in the “It’s a profile of the Jordanian
titlements that are already unaffordable, more campaign has been that neither she nor her hus- whole fight against terrorism.” Mosul middle class,” says Mr. Braizat.
subsidies and price controls in ObamaCare, more band learned anything from the ethical traumas also raises discomfiting questions “Other factors being the same, these
about what form jihadism will take af- levels of radicalization will not de-
regulations on businesses of all kinds, more limits of the 1990s. You would have thought they’d
ter Islamic State is defeated, and how crease; they will only hold the same
on political speech, more enforcement of liberal want to shed the legacy of the Lippo Group and that might threaten Jordan, America’s or increase.”
cultural values on schools and churches. the Lincoln-Bedroom-for-rent, but instead they most reliable Arab ally.
The greatest cost of this would be more lost built the same pay-to-play structure via the Clin- Roiling Amman now are reports
years of slow economic growth. The U.S. economy ton Foundation. that many Islamic State fighters are It is a paramount American
hasn’t grown by 3% in any year since 2005, and the Mrs. Clinton made the astounding decision to “shaving their beards” to blend in as
explanation from Mrs. Clinton’s economic advis- use a private email server for official business so coalition forces draw near. An esti-
interest for things in Jordan
ers is that America can’t grow faster and inequal- she could duck federal records laws. But when that mated 2,500 Jordanians have joined to remain as they are.
ity is a bigger problem in any case. More income was discovered, rather than admit the mistake Islamic State, and alarms rang last
redistribution is their patent medicine. and release everything, she and her retinue con- week after the jihadist army overran
But as we’ve seen with the rise of nativism tinued to resist and deflect and deceive. By her be- half of Rutba, a city about 70 miles Terrorism is the final destination
from the Jordanian border in western on the road of radicalization; most
and protectionism, the costs of slow growth are havior in the past year, Mrs. Clinton has ratified
Iraq. “These groups are rooted now in people never reach it. Even so, Jorda-
corrosive. Flat incomes lead to more social ten- the worst things her critics say about her. Syria and Iraq, and Jordan will be a nian counterradicalization officials
sion and political enmity. The fight to divide a Some of our friends argue that Mrs. Clinton’s target once the space in Syria and Iraq have their work cut out for them. One
smaller pie would get uglier in a country that corruption is tolerable because it is merely about closes,” says counterterror analyst problem is that many of the young
was once accustomed to rising possibilities. gaining and maintaining political power. That un- Amer al-Sabaileh. people in the 7% aren’t plugged into
Imagine the 2020 election after four more years derstates how much the Clinton blending of pub- This is why border security is fore- mainstream institutions and instead
of 1% growth. lic office with private gain erodes confidence in most among Amman’s priorities. Some get all their information from Islamist
Some Republicans say Mrs. Clinton would be honest government. It feeds the leftist narrative 1.5 million refugees from the wars in social media and websites.
more willing to negotiate with Republicans than that business is merely another arm of the state Syria and Iraq have already flooded “You’re looking for a needle in a
Mr. Obama has been. That’s a low bar, but then and thus reduces support for free markets. Jordan, straining resources and pa- haystack,” says Mr. Momani. “You’re
even running against Mr. Trump she has thrown i i i tience in a small nation that unlike looking at every element of society to
many of its neighbors isn’t blessed make sure no one is susceptible to rad-
no policy olive branch to Republicans. None. Her All of which means that if she does win on
with oil wealth. Jordanians recognize ical ideas. This challenge also exists in
current agenda may reflect her real beliefs going Tuesday, the manner of her victory will damage the magnitude of the risk if even a mi- England, in Europe, in the U.S.” Mr.
back to her activist days before the failure of Hil- her ability to govern. Rather than win a policy nuscule fraction of the newcomers is Amer says he’s seen equally bad radi-
laryCare caused her to adopt some New Demo- mandate, she has chosen to destroy Mr. Trump linked to Islamic State. They aren’t calization patterns in Brussels.
cratic coloration. In 2017 she would also have personally. She will face a Congress that wants to keen to accept more. Here, too, Jordan has important de-
Senators Elizabeth Warren and Bernie Sanders investigate her from the first day and an electorate The upside is that officials here have fensive resources, chief among them
pulling her to the left. that is polarized and doesn’t trust her. Her instinct a good sense of what goes on beyond the figure of King Abdullah II, who, as
More even than Mr. Obama, she would also would be to lean even more on the left for political their frontiers. The Obama administra- a direct descendant of the Prophet,
have the support of the courts allowing the admin- support, making compromise with Republicans in tion has been a relatively decent stew- possesses rare legitimacy and moral
istrative state to govern via regulation—as with Congress even more difficult. ard of the Amman-Washington alliance, gravitas in the Sunni world. His brand
and thanks in part to U.S. assistance, of Islam is moderate and calm. It’s one
the Clean Power Plan and mass immigration legal- We’re as optimistic as anyone about the resil-
the Jordanian security apparatus is reason why, as even his critics here
ization. Mr. Obama has remade most of the federal ience of American democracy, but four more battle-ready for any territorial at- concede, Hashemite institutions have
appellate courts, and the Supreme Court is on the years of aggressive progressive government will tempts. “We’ve been at war with Daesh held together amid regional hurri-
cusp. A Hillary victory means a progressive judi- more deeply entrench the federal Leviathan in our northern and eastern borders canes. The bond between nation and
ciary majority for a generation or more. across ever more of the economy and civic life. for four years,” says Mr. Momani, using state has proved resilient.
Mrs. Clinton’s clearest advantage over Mr. The space for private business and nonpolitical the Arabic acronym for Islamic State. Judging by mass-casualty attacks,
Trump is on foreign policy, where she has shown mediating social institutions will shrink. “So we are in a strong position to de- Jordan’s counterterror record is the
more respect for America’s role in maintaining The case for Mrs. Clinton over Donald Trump fend our borders.” envy of many Western countries. It is
global order. She has sometimes shown more is that she is a familiar member of the elite and Jordan also faces an internal a paramount U.S. national interest to
hawkish instincts than Mr. Obama, but then she thus less of a jump into the unknown, especially threat underscored by two Islamic ensure that things in the Hashemite
also embraced his worst mistakes: the reset with on foreign policy. The case against her is every- State assaults in June against mili- Kingdom stay this way. The next pres-
tary and intelligence targets that ident should make a point of strength-
Russia that badly misjudged Vladimir Putin, the thing we know about her political history.
killed 11 soldiers and officers in total. ening this alliance and listening
In coming years Jordan will likely closely to the Hashemites. As Middle

Courting Brexit in Parliament face an uptick in such attacks, the

product of the “collapse of ISIS and
the rise of ISIS 2.0,” says Mr. Sa-
East order crumbles elsewhere, U.S.
assistance to Amman is a bargain for
American and Western security.

B
ritain’s High Court ruled Thursday that
members of Parliament will get a say after
all on the country’s exit from the European
Union. If it stands on appeal, the ruling sets up a
showdown in the House of Commons over
whether to begin negotiations with Brussels to
leave in line with June’s referendum result.
This has Brexiters worried, and for good rea-
son. A majority of members, including many
Conservatives, belonged to the “Remain” camp
prior to June’s vote, and supporters of “Leave”
fear they will use parliamentary maneuvers to
tie Brexit in knots to remain in the EU. The gov-
ernment of Theresa May, whose refrain as Prime
Minister has been “Brexit means Brexit,” is ap-
pealing the ruling.
But the Court’s ruling is well-founded. Since
Brexit will inevitably mean changes to U.K. domes-
tic law, those changes need to be considered by Par-
liament, not simply dictated from the Prime Minis-
Holland’s Speech Folly
ter’s office as an exercise of the royal prerogative
to conduct foreign policy.
The deeper fear of the Leave camp is that
Brexit isn’t working out as planned. Instead of
the promised Thatcherite paradise of a freer,
more economically competitive Britain, Mrs.
May is steering the country in a more statist
direction. Britain may shed some of the more
destructive regulations of Brussels only to get
the same regulations repackaged and rein-
stated by Westminster.
No wonder markets reacted happily to the
Court’s ruling, with the pound jumping 1% on the
news. Voters might also take notice and perhaps
reconsider the wisdom of June’s vote.
We share Mrs. May’s view that June’s vote
must be respected, but that doesn’t mean that
Parliament should be left out. If the Court’s rul-
ing makes Leave advocates nervous, maybe it
will induce them to get Brexit right.
LETTERS TO THE EDITOR
The Former Republican Party Must Wise Up
Bret Stephens’s “My Former
Grand Old Party” (Global View, Oct.
26) articulately expresses my own
disappointment at what the party
has become. Has America become
“too big to fail” as it crouches inex-
orably into a cautious and dreary
nanny state? If so, the Democrats
will love it, at least until they run
out of credit; they’re already out of
money. After all, the Democrats still
proudly have many laws, taxes and
regulations yet to pass. Is the bold,
incisive, honest, even sacrificial
message that conservatism has al-
ways demanded now beyond the
ability of conservatives to communi-
cate through the mainstream me-
dia’s shallow prism to inspire like-
minded citizens?
Waiting for a political messiah to
seems foolish and futile at this
stage. After all, future generations
are counting on us, and we’re not
getting any younger.
VAN M. BOTTS
Seattle
Mr. Stephens is right. Today’s
Democratic Party is no more the
party of Truman than today’s Re-
publican Party is the party of Lin-
coln. But there are still Republicans
striving to insure Lincoln’s hope
“that government of the people, by
the people, for the people, shall not
perish from the earth.” Similarly,
there are Democrats working dili-
gently to fulfill Harry Truman’s ob-
servation: “You can’t get rich in pol-
itics unless you’re a crook.”

T
he hate-speech trial of Geert Wilders
got under way this week in Amsterdam,
but the populist politician didn’t
bother to show up to court. Instead he reiter-
ated the message that had gotten him into legal
trouble in the first place, tweeting that the
Netherlands has a “huge problem” with Moroc-
can immigrants.
We disagree with Mr. Wilders on any number
of issues, including his call to ban all mosques
as well as the Quran itself as part of a “de-Is-
lamification” process, and it’s a shame defend-
ers of free speech don’t get to choose our cham-
pions. But we can’t blame Mr. Wilders for the
contempt he showed for the judiciary and polit-
ical elite in the Netherlands, who would rather
restrict free debate than address the concerns
millions of Dutch voters have about Muslim im-
migration and assimilation.
Aside from the insult the trial represents to
the principles of a free society, prosecuting Mr.
Wilders for making an argument over which rea-
sonable citizens can disagree won’t produce
greater social cohesion. Mr. Wilders was merely
restating in crude fashion what respectable Dutch
leaders and institutions have already concluded:
The multiculturalist model for integrating Mus-
lim immigrant communities is a failure.
The center-left Labor Party sounded the alarm
over ill-assimilated Muslim immigrants in a 2008
position paper, noting that white voters felt a
sense of “loss and estrangement” over parallel
communities that don’t embrace mainstream val-
ues. For good measure, it warned that the “mistake
we can never repeat is stifling criticism of cultures
and religions for reasons of tolerance.”
A 2013 study by the Amsterdam municipal
government found that of the top 600 young
criminals in the city—those convicted of various
burglary, robbery and assault charges and who
have repeatedly come into contact with the pub-
lic prosecutor—47% were of Moroccan origin
while only 9% were native-born.
A study the following year by the Netherlands
Institute for Social Research found that eco-
nomic integration among Muslim immigrants
didn’t lead to greater attachment to mainstream
values. Successful immigrants tended to “ques-
tion Dutch lifestyle and tradition” and revert to
their own identities, which in turn correlated
with “increasing religious activism and violence,
including jihadism.”
Voters know all this much better than the poli-
ticians and academics do, which is why Mr.
Wilders and his Freedom Party remain popular
in the polls. Prosecuting free speech won’t solve
the underlying problem or erase the resentments
it breeds among native Dutch. If mainstream
Dutch politicians want to prevent Mr. Wilders
from coming to power, they should devote their
time to addressing his voters’ real concerns, not
trying to criminalize their messenger.
descend through the parting clouds
Is It True ‘A Thing of Beauty Is a Joy Forever’?
Regarding Sohrab Ahmari’s “Re-
member When Art Was Supposed to
Be Beautiful?” (op-ed, Oct. 24): I
just returned from a vacation in-
cluding visits to Rome and Florence.
Even in the off-season the venues
for great art were suffocatingly
crowded with people who still ap-
preciate the values Mr. Ahmari fears
are in decline.
It isn’t public taste that demands
identity-art projects. Just as the
flower of Renaissance art was sup-
ported by the church and wealthy
patrons, today (in London at least)
the government, with its identity
obsessions, is directly or indirectly
the patron. The author need not de-
spair. This so-called art can be ig-
nored as one would a badly de-
signed overpass.
MAX HENSLEY
San Antonio
Mr. Ahmari is on target with his
insightful article about contempo-
rary art’s obsession with the politics
of race, gender and sexuality. He
JIM DUNLAP
Newport Beach, Calif.
could also have added the Kar-
dashianization of popular culture,
when celebrity and substance are
seen as equal.
Unfortunately, critics today are
no longer able or willing to say
that the emperor has no clothes in
fear of political correctness or be-
ing sneered at for not understand-
ing the latest trends. So when sev-
eral years ago a cleaner at the Tate
Britain gallery threw out a plastic
bag full of trash not realizing it
was part of an “installation,” it
wasn’t he who was the Philistine
but rather the so-called curators
and art critics.
PETER PRASTHOFER
The Woodlands, Texas
Letters intended for publication should
be addressed to: The Editor, 1211 Avenue
of the Americas, New York, NY 10036,
or emailed to wsj.ltrs@wsj.com. Please
include your city and state. All letters
are subject to editing, and unpublished
letters can be neither acknowledged nor
returned.
P2GW309000-0-A01300-1--------AL
THE WALL STREET JOURNAL.
Saudi Society Dips a Toe Into the 21st Century
By Karen Elliott House
Jeddah, Saudi Arabia
‘W
elcome to the new Saudi
Arabia,” says the youthful
minister of the country’s
newly minted Ministry of Entertain-
ment. We are sitting in darkness
watching the LED-lighted bodies of
New York dancers gyrating on an
arena stage to deafening hip-hop. Be-
hind us, some 1,300 Saudis of all
ages—robed men and abaya-covered
women sitting side by side—are
whooping their approval.
What is going on in this conserva-
tive kingdom? Such mixing of sexes
long has been forbidden. Ditto music.
Until very recently the very word
entertainment was an expletive. Such
frivolity in the eyes of the kingdom’s
Wahhabi religious authorities was
considered a damning distraction
from devotion to Allah.
Under the prince’s
reforms, religious police
can’t arrest women for
not covering their hair.
But these days change is rocking
Saudi society’s very foundations.
Traditions once thought inviolable
are toppling with little warning,
scant explanation and no time for
public adjustment. Nothing seems
sacrosanct in this new world of di-
minished oil revenue.
The monarchy, effectively led by
Deputy Crown Prince Mohammed bin
Salman, an assertive 3l-year-old son
of the king, seems determined to
remold Saudi society, changing the
way Saudis think and act. To do that,
comfortable traditions are being ruth-
Political endorse-
ments are a dime a
dozen. Instead, we
will give Donald J.
Trump the grandest
tribute to his unique
presidential cam-
WONDER
paign—the world
LAND
premiere of “Trump
By Daniel
the Opera.”
Henninger
Cast
Trump: Donald Trump
Crooked Hillary: Hillary Clinton
Lyin’ Ted: Ted Cruz
Little Marco: Marco Rubio
Low Energy Jeb: Jeb Bush
The Director: James Comey
Huma the Maidservant: Huma
Abedin
The Trump Clan: Ivanka, Melania,
Donald Jr., Eric
The Clinton Cronies: John Podesta,
Cheryl Mills, Terry McAuliffe
Spear Carriers: Chris Christie,
Rudy Giuliani, Billy Bush, Corey Le-
wandowski, Miss Universe 1996, Car-
los Danger
The Mainstream Media Chorus
My Husband: Bill Clinton (Mr.
Clinton’s performance is made possi-
ble by a special gift from the Opera
Society of Kazakhstan.)
Act One
Scene 1: A dining room at Trump’s
Mar-a-Lago estate in Florida.
Trump, the scion of an American
real-estate family, is eating dinner,
seated at one end of a 60-foot-long
By Karl Rove
A
s Republican voters came home,
the presidential race was already
tightening. But Friday’s bomb-
shell—that the FBI reopened its inves-
tigation of Hillary Clinton’s email—has
guaranteed a barn-burning end to this
extraordinary campaign. Donald
Trump’s supporters are enthused, Hil-
lary Clinton’s dispirited. So what to
look for on election night?
While votes are still being cast, the
television networks will comment on
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lessly replaced by uncomfortable new
realities. Such changes, the prince be-
lieves, are necessary to achieve his Vi-
sion 2030 goal of a modern economy
where Saudis rely on their own initia-
tive and enterprise, not on govern-
ment handouts.
Gone is the House of Saud tradi-
tion of family consensus that once
meant change occurred glacially—if
at all. While many of Prince Moham-
med’s royal uncles and cousins op-
pose him, they are proving unable to
slow change, let alone derail him.
Gone, too, is the once pre-eminent
authority of the religious establish-
ment, for centuries ruling partners of
the monarchy. Clerics who dare to
criticize change are jailed and the
rest are silent.
With such core pillars as royal
family unity and religious support
shaking, Saudi citizens fear that al-
most anything can happen at any
time. Widespread enthusiasm for the
prince and his Vision 2030 only a few
months ago now has turned to am-
bivalence, anxiety and anger.
The latest shock is the regime’s
decision to cut by 30% to 40% the
compensation of government em-
ployees, who comprise two-thirds of
all working Saudis. Never in previous
decades of oil-price ups and downs
has the government touched its
people’s livelihood. That was un-
thinkable until it happened.
Worse yet, government ministers
sent to television to explain the deci-
sion alarmed the public by warning
that without such cuts the kingdom
faces bankruptcy in three or four
years. Adding insult to injury, the
minister of civil service accused
government employees of working
just one hour a day, implying their
compensation cut is fully justified.
Government workers in Medina are
being fingerprinted five times a day
If Trump Was an Opera
table. At the other end is his wife,
Melania. Along the sides of the table
are the Trump Family—his daughter
Ivanka and two older sons, Donald Jr.
and Eric. Trump puts down his Big
Mac and says, “I am going to be pres-
ident.” Ivanka says: “Of what?”
Trump, reddening, shouts: “What
else? Of the United States!” Melania
faints, falling to the floor.
As Donald Jr. rushes to revive
Melania, a short, wiry man enters
the dining room. Eric says to his fa-
ther: “Who is this guy?” Trump tells
the family his name is Corey
Lewandowski. Trump says he found
Lewandowski in New Hampshire
and that he will run Trump’s presi-
dential campaign. Revived, Melania
implores her husband: “Why have
you done this to me?” Trump re-
plies: “I want to build a wall.”
Trump and Lewandowski sing the
moving construction duet: “A beau-
tiful wall (Un bel muro).”
Scene 2: A Republican primary
debate.
Trump stands behind a podium
on a stage. On either side of him, ex-
tending to the edges of the stage,
are 15 men and a woman who all say
they are running for the Republican
presidential nomination. The debate
begins and Trump announces that
he will not address anyone by their
real name. Instead, he refers to
them as Lyin’ Ted, Little Marco and
Low Energy Jeb.
The men have heard rumors of
Trump’s wrathful followers, the
What to Watch for on Election Night
exit polls, though they won’t reveal
what the surveys show about the
head-to-head matchup. The exits can
be spectacularly wrong—they pre-
dicted a John Kerry victory in 2004—
but they do influence the coverage.
What you see may not be final.
Throughout the evening and afterward
the poll’s internal numbers are ad-
justed to match the actual vote.
Two things to look for in the exits:
First, how is Mr. Trump doing among
white voters? His strategy requires
grabbing a higher percentage of
Robert Thomson
Chief Executive Officer, News Corp
William Lewis
Chief Executive Officer and Publisher
DOW JONES MANAGEMENT:
Ashley Huston, Chief Communications Officer;
Paul Meller, Chief Technology Officer;
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Commercial; Edwin A. Finn, Jr., Barron’s;
Professional Information Business:
Christopher Lloyd, Head;
Ingrid Verschuren, Deputy Head
OPINION
Deputy Crown Prince Mohammed bin Salman.
to assure their presence at work.
Shocked Saudi citizens have taken
to Twitter, the public’s megaphone to
the monarchy. (Saudis are the world’s
leading per-capita users of Twitter.)
Some nostalgically post photos of the
late King Abdullah, who lavished
spending on the kingdom during his
10-year reign. Others tweet angry
comments accusing ministers of work-
ing only 15 minutes a day. A former
minister pointedly tweeted that advis-
ers to the young prince should re-
member that Vision 2030 doesn’t
mean that government can “move
from dependence on oil to dependence
on the people’s income.”
The prince at the center of this
revolution is well aware of the pub-
lic angst. Yet he shows no signs of
abandoning his efforts to balance
the budget and restructure the econ-
omy and society. He has crossed his
Rubicon. Like Caesar marching on
Rome, the only option for redemp-
tion now is success.
Transforming Saudi society won’t
be easy, but restructuring a $750 bil-
Trumpians, and accept Trump’s in-
sults. Lyin’ Ted attempts to placate
Trump, addressing him as “my good
friend, Donald.” Trump hears this as
an insult and replies that Lyin’ Ted’s
father might have had something to
do with the Kennedy assassination.
Crooked Hillary, Lyin’ Ted
and Director Comey in
America’s grandest opera.
Lyin’ Ted pulls a knife from his belt.
Carly Fiorina holds on to Lyin’ Ted’s
wrist and in a terrifying aria warns
Trump to “beware the revenge of
women (la vendetta delle donne).”
Gripping the sides of his lectern,
Trump vows he will never again look
upon the face of Fiorina.
Act Two
Scene: An interrogation room at
the FBI.
It is late Saturday afternoon. Light
from the setting sun illuminates the
faces of Democratic presidential can-
didate Crooked Hillary, the Director
James Comey, and Crooked Hillary’s
lawyer and confidante, Cheryl Mills.
Comey asks Crooked Hillary if it is
true that while she was Secretary of
State, she maintained a personal
email server.
Crooked Hillary replies with one
of the most extended arias in the
history of opera: “I do not recall
whites than Mitt Romney’s 59% and
boosting their share of the turnout
above 2012’s 72%. College-educated
whites traditionally vote Republican,
but Mr. Trump has struggled with
them. Will he match Mr. Romney’s
51% among all college grads?
Second, how is Mrs. Clinton doing
among minorities and millennials?
Her strategy calls for replicating Pres-
ident Obama’s 2012 coalition. That
year African-Americans were 13% of
turnout, and 93% went for Mr. Obama;
Hispanics were 10% of turnout, and
71% voted for him; and millennials
were 19% of turnout, 60% of whom
supported the president.
Actual votes will be reported begin-
ning at 6 p.m., Eastern Standard Time,
when polls in parts of Indiana and
Kentucky close. At 7 p.m. voting wraps
up in Florida (except for the Panhan-
dle), Virginia and western Indiana and
Kentucky. Half an hour later, North
Carolina and Ohio come in.
These early results could provide
important clues about the election’s
direction. Watch for how each party’s
vote has shifted since 2012. Although
Mr. Trump is likely to win Indiana
and Kentucky, comparing his margin
to Mr. Romney’s might indicate
what’s happening nationally.
The second clue will be changes in
turnout. Is it larger or smaller than
2012? What about in counties with
high percentages of African-Ameri-
cans, Latinos, millennials and edu-
cated whites? These trends will be
especially important in the four
Friday - Sunday, November 4 - 6, 2016 | A13
AFP/GETTY IMAGES
lion economy to rely on private-sec-
tor growth can’t be done without
forcing individual Saudis to become
self-reliant. The prince tells his ad-
visers the pace of change must not
slow. He warns that the kingdom has
lost two decades under previous
kings who failed to take the tough
decisions to wean the country from
its oil addiction.
Prince Mohammed also presses
on with revamping the role of reli-
gion, and offering entertainment
like the New York dancers in Jeddah
along with promises of Cirque du
Soleil and even a Six Flags amuse-
ment park in a few years’ time. To-
day, religious police who once pa-
trolled Saudi streets arresting
women for failure to cover their
hair or for mixing with men have
been banned from such arrests.
They have largely disappeared from
Saudi shopping malls, to the delight
of many Saudis. Still, another tradi-
tional institution has fallen, raising
the specter that more big changes
are imminent.
(Non ricordo).” Comey asks if she
used the server to discuss her
daughter’s wedding. Crooked Hillary
replies: “Non ricordo.”
The Director asks if she has ever
heard of the Clinton Foundation.
Crooked Hillary rises from the table
and shrieks, in a piercing F above
high C: “Non ricordo! Non ricordo!”
Mills, the confidante, leans for-
ward and asks Comey in a low, omi-
nous whisper if the FBI is recording
their conversation. The Director says
she has insulted him, smashes Mills’
laptop against the wall and orders
them to leave the building.
Act Three
Scene One: An outdoor stage in
Palm Beach, Florida.
Trump, beset by the vast forces of
Crooked Hillary and various female
accusers, has retreated to his king-
dom in southern Florida. Standing
before a huge throng, Trump defends
himself by singing the Duke of Man-
tua’s aria from Verdi’s “Rigoletto”:
“Questa o quella (This woman or that
woman).” Trump suddenly cries out
that Crooked Hillary “should be
locked up!” The Trumpian chorus
thunders: “Lock her up! Lock her up!
(Rinchiudetela!)”
Scene Two: The basement of
Crooked Hillary’s castle in Chappaqua.
It is the night before the election.
Crooked Hillary, Huma the Maidser-
vant, Carlos Danger and James
Comey sit at a table on top of which
is a silver chalice and small ceramic
swing states that report early.
Florida is this election’s most impor-
tant battleground. Democrats have car-
ried 18 states and the District of Colum-
bia in all of the past six presidential
contests. If Mrs. Clinton wins the 242
electoral votes from this “Blue Wall,”
As the exit polls and
results roll in, early
clues may show what’s
happening nationally.
she needs only Florida’s 29 to take the
White House. Mr. Trump must win
Florida to keep open his path to the
presidency. Results from early and ab-
sentee voting could be an important in-
dicator. The Panhandle, which is very
Republican, is in the Central Time Zone,
keeping the Sunshine State from being
called until late in the evening.
Ohio, with 18 electoral votes, is
this year’s second-most important
state. No Republican has ever won
the White House without the Buckeye
State. The split there is big cities ver-
sus suburban and rural counties. Mrs.
Clinton needs to carry Cuyahoga
County (Cleveland) by at least
160,000 votes and win big in Franklin
County (Columbus) and Hamilton
County (Cincinnati).
The next most important states
are North Carolina and Virginia, with
a combined 28 electoral votes. Mrs.
Growing anxiety has led to angry
finger pointing. Government blames
previous rulers for shortsighted reli-
ance on oil. Some Saudis blame the
current regime for mismanaging oil
production in recent years. Still oth-
ers praise Vision 2030 but condemn
its rapid execution.
Still others, who oppose any change,
accuse the deputy crown prince of na-
ively leading an America-inspired con-
spiracy to destabilize the kingdom and
make Iran the region’s hegemon. The
proof: McKinsey & Co., an American
consultancy, helped devise Vision 2030
and the U.S. Congress has passed legis-
lation allowing Americans to sue Saudi
Arabia for its alleged role in the 9/11
attacks. Clearly, say these voices, the
U.S. is a Crusader country out to de-
stroy Saudi Arabia and Sunni Islam.
Even some less-conspiratorial Saudis
have turned anti-American as a result
of this legislation.
Still, the only thing that seems
likely to move Mohammed bin Sal-
man from his charge toward the
Promised Land of Vision 2030 is the
death of his father, King Salman, who
turns 81 in December. So far, he has
enjoyed his father’s total support
since being named deputy crown
prince only 18 months ago.
Equally important, disgruntled
Saudi citizens at some level under-
stand that the kind of revolution they
are experiencing is fundamentally
different from the chaos and carnage
enveloping neighboring counties such
as Iraq, Syria and Yemen. So, while
Saudis may grumble, it is doubtful
they will stir the kind of strife that
has beggared their neighbors.
Ms. House, a former publisher of
The Wall Street Journal, is the author
of “On Saudi Arabia: Its People, Past,
Religion, Fault Lines—and Future”
(Knopf, 2012).
pitcher. Behind them is a mammoth
pile of destroyed electronics—lap-
tops, PCs, BlackBerrys, servers.
The Director places a document on
the table and the three sign it. Carlos
Danger pours white liquid from the
pitcher into the chalice and all drink
from it, including Comey. As the oth-
ers seem to fall asleep, Crooked Hil-
lary rises to sing her last aria: “I
spent my entire life helping everyone
(Tutta la mia vita).”
Final Act
Scene: A golden apartment in
Trump Tower on Fifth Ave.
It is 4 a.m. on election morning.
Trump is at his desk, tweeting curses
and maledictions at his enemies.
Trump’s consigliere, Rudolph Giu-
liani, enters the room and tells
Trump he is still a genius. Trump
tweets more curses. The Trump Fam-
ily enters with Chris Christie, now re-
turned from exile in New Jersey.
All walk out onto a balcony above
Fifth Avenue, led by Trump. A crowd
has filled the street below. Trump
suddenly climbs onto a chair and
raises his arms, as if about to jump
into the crowd. Instead, Trump
raises his right hand, forms his
thumb and fingers into a delicate
zero and sings the final aria in the
72-hour-long opera: “Believe me
(Credetemi). It will be so beautiful.
It’s going to be very, very beautiful.
Believe me.”
Opera ends. Trump begins three
days of curtain calls.
Clinton can win the presidency by
taking the Blue Wall plus these two,
even if Mr. Trump wins Florida and
every other tossup.
The early returns also include a
few bellwether counties. Vigo County,
Ind., has backed every presidential
winner since 1956 and been wrong
only twice since 1888. In Ohio, Ot-
tawa and Wood counties, near To-
ledo, have voted for every victor
since 1964 and 1976, respectively.
Hillsborough County, Fla., which in-
cludes Tampa, has supported the
winner in 19 of the last 20 elections
(1992 being the exception).
At 8 p.m. EST, polls close in Flor-
ida’s Panhandle, New Hampshire,
Pennsylvania, and most of Michigan.
An hour later come Arizona, Colo-
rado, New Mexico, Wisconsin and the
rest of Michigan’s Upper Peninsula.
The Clinton campaign wants Arizona.
Mr. Trump needs at least a couple of
the other states to get to 270.
At 10 p.m. EST, polls in Nevada and
Utah close. The former is a battle-
ground and the latter interesting be-
cause of Mormon antipathy for Mr.
Trump. Hawaii votes until 11 p.m. EST,
and Alaska until 1 a.m. Wednesday.
But by then, Americans will probably
know the outcome of this strangest of
elections. Happy viewing!
Mr. Rove helped organize the po-
litical-action committee American
Crossroads and is the author of “The
Triumph of William McKinley” (Si-
mon & Schuster, 2015).
P2GW309000-0-A01400-2--------AL

A14 | Friday - Sunday, November 4 - 6, 2016 * THE WALL STREET JOURNAL.

SPORTS

Chicago
Fear Then Joy in Wrigleyville
The crowd needed a television.
Right now. This was an emergency.
Just moments before, delirium
verged on Addison Avenue, out-
side the brick and steel hulk of
Wrigley Field. The Chicago Cubs
held a 6-3 lead on the Cleveland
Indians in Game 7 of the World
Series, with two in-
nings left to play.
Thousands of people
were pouring off side
streets and the ele-
vated train platform
JASON to be here when the
GAY Cubs actually did it,
actually won a Series
for the first time
since 1908. Crazy idiots climbed
streetlights in the way that crazy
idiots do in moments like this. An-
other fan scaled a set of girders
outside the ballpark, climbing atop
a platform and waving the team’s
single-letter “W” victory flag—
brainlessly tempting fate with six
outs left to go.
And then the Indians tied it. At
least that was the horrible rumor.
The sports bars with TVs were a
half block away. Phones didn’t
work; the crowd was so thick that
local cell capacity was choked.

SCOTT OLSON/GETTY IMAGES

“There is no service,” said 20-
year-old Brady Friedkin. A radio
might have done the trick, but no- Chicago Cubs fans celebrate outside
body seemed to have a radio. A Wrigley Field after the Cubs
thoroughly modern crowd was defeated the Cleveland Indians in
suddenly reliant on the most pri- Game 7 of the World Series.
mal communication tool: word-of-
mouth. It could have been 5,000
years ago. It could have ferred to as a “nervous confi- specting the sidewalk. She was IN THE GLOOM, THE CROWD found til the moment they did it, when
been…1908. dence”—which was just another looking for the commemorative a television. Or at least a few hun- the rain delay in Cleveland
Someone said Cleveland had way of saying he wasn't going to Wrigley brick her boyfriend had dred clever people did, around the ended, and Chicago scored two in
hit a three-run home run. The guy declare a Game 7 victory too early. bought her in honor of her long- corner from Wrigley, outside a tri- the top of the 10th, and held on
waving the W flag scurried back Nervous confidence was the time Cubs loyalty. “It’s in the Tin- ple-decker home at 3541 Sheffield to win it 8-7, ending 108 years of
down to the sidewalk and disap- mood throughout the Wrigleyville ker section,” she said, referring to Avenue. A party was under way on futility. But only they will know
peared. There was chatter, then a neighborhood during those early Joe Tinker, the turn-of-the century first-floor deck, with a TV a per- the truth.
hush, and then the red neon innings. The Cubs had started Cub who had been a member of son on the sidewalk could see It doesn’t really matter.
scoreboard outside Wrigley made promisingly with a leadoff home that 1908 World Series club. pretty well. It was good enough. On the street it got crazy, good
it official: run from Dexter Fowler, but they This is what people did up and crazy, strangers hugging strangers,
6-6. never built enough of a lead to down the block—look for porches drummers drumming and cham-
The mood flipped immediately, let the scene loosen into an out-
‘It’s like Charlie Brown and windows with TVs. It felt al- pagne showers erupting from
from jubilation to anxiety, with a right party. finally kicked the most quaint, from another time. porches. Crazy idiots who climb
heavy whiff of dread recognizable “I’m going to wait until the last The Indians were batting in the atop sanitation trucks in moments
to any longtime Cubs fan. In the out,” said Freddy Fagenholz, gen-
football,’ said a Cubs bottom of the ninth. The rain in like this climbed atop sanitation
panicked quiet, an optimist tried eral manager of Murphy’s Bleach- fan. ‘Now what?’ Wrigleyville had stopped, but the trucks, but the cops mostly let the
to begin the “Go Cubs Go” song, ers, another sports bar around the mood had sunk to fear. At a Star- madness go. An exhausting night
and it sounded like people singing corner. Not far away, a Murphy’s bucks coffee shop a few steps away, erupted in joy.
“Happy Birthday” to a patient customer named Brian Taylor, who Goodman’s Cubs story resem- workers were boarding up the win- “It’s like Charlie Brown finally
with two days left to live. No one looked exactly like the Cubs man- bled a lot of Cubs stories. She dows, unsure of what was next. kicked the football,” said a fan
had a heart in it, and the song pe- ager Joe Maddon, was dressed went to her first Cubs game with a “I don’t want to hear any neg- named Kevin Reardon. “Now
tered out fast. head to toe as Maddon in a full family member: her father, who ativity!” a voice shouted in the what?”
This November night had been Cubs uniform. Depending on how took her to Wrigley she was 12 crowd. In the middle of all of this
going so beautifully, so histori- Maddon’s decision-making panned years old. She was entranced, like You know what happened stood Gene Wasyliw, who had
cally, just minutes ago. What hor- out during Game 7, this was either nearly everyone is. “That was next. The Cubs held off the Indi- moved to Chicago when he was
ror was about to visit this time a good idea, or a perilous one. that,” she said. On Wednesday ans in the ninth, and then….it be- 2½ years old. He was now 70, and
upon the tormented Cubs and Outside, the crowds on the morning she had taken a $14 train gan raining in Cleveland. The like a lot of Cubs fans, he wasn’t
their fans? The crowd needed to street continued to build. The up to the city to be here when the crowd couldn’t help but laugh at sure if he’d ever see a night like
get to a TV, fast. Cubs had enough of a margin to Cubs finally won it all. the emotional torture of it. A this one. Wasyliw had been
encourage fresh arrivals to the And where was her boyfriend, rain delay? watching Game 7 at home, but
“WE’RE CUBS FANS,” Ryan Davie neighborhood, who wanted to be the one who’d bought her the A priest in the crowd—really, when Cleveland had tied it, he de-
said. “We can’t believe it happens, here, or felt they needed to. The brick? there was a priest, Father Bill cided he couldn’t watch it any-
until it happens.” comedian Robert Smigel and his “He’s a freaking Cardinals fan!” Corcoran, of Saint Elizabeth Seton more, and he went outside, pull-
It was earlier in the night, up- famous rubber canine puppet from Goodman yelled. “I came here by Church—pleaded for vigilance. ing on a rumpled Cubs cap he said
stairs at Casey Moran’s, a sports the Conan O’Brien show, Triumph myself!” “You have to have courage! Cor- was four decades old.
bar not far from Wrigley. Outside, the Insult Comic Dog, drew a gath- Still: she was happy. What Cubs ragio!” he said, using the Italian. “I had to be out here,” Wasyliw
a steady rain was coming down, ering next to the statue of beloved fan wouldn’t be happy to be here, “Never lose hope.” said. “Either to celebrate, or be
but here on a deck with a long late announcer Harry Caray. a few innings away from a moment Years from now—or, perhaps, one of a miserable crowd. But I
tunnel of flat screen TVs, fans al- “Standing in front of Chicago’s that changed everything about this today—the people in that crowd wasn’t going to be alone.”
lowed themselves to be cautiously statue to the great Kim Jong Il,” team? in Wrigleyville will tell their He wasn’t alone. He may not
merry. The Cubs were getting it Triumph bellowed. And then the Indians tied it up, friends and family that they have seen all of what happened,
done in Ohio. And yet still, lurking A few feet away, a fan named 6-6, and it felt like the Cubs were never lost hope, that they always but the crowd told him it was real.
underneath, was what Davie re- Kelly Goodman was closely in- going to be the Cubs again. believed in the Cubs, right up un- The Cubs had won.

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.
-15 1 2 3 4 5 6 7 8 9 10 66 Face reddener
11 12
PUZZLE
-10
-5 13 14 15 16
67 In the present CONTEST
Riga state
Glasgow
ow Copenhagen
C p h g 0
Moscow
oscow
17 18 19 68 Tommie of the
5
Miracle Mets 28 McDonald
10 20 21 22
69 None too bright with six Tonys
D bli
Dublin 15
A d
Amsterdam
Berlin
li
aw
Warsaw 23 24 25 70 Referendum 30 Safe, at sea
20
25 choice 31 Boomers’
26 27 28 29 30 31
London
kf
Frankfurt 30 71 Dead Sea harvest followers
Brussels Kiev
ev
Prague 35 32 33 34 35 36 37 Down 32 A number of
P i
Paris Munich
i h 1 Site of courses
38 39 40 41 42
Vienna
V Warm Humayun’s tomb 33 Faithful
Budapest
d p 43 44 45 46 47
Geneva Cold 2 Petites ___ 34 Cancer,
Milan 48 49 50 51 (French for one
h
Bucharest Stationary
girlfriends) 36 Lang. that
Showers
52 53 54 55 56 57
3 Bright gives us
Rome b
Istanbul 4 Foreman’s topper “tungsten”
58 59 60 61 62
Madrid
d id Rain
5 Dragon of Norse 40 “Heavens!”
63 64 65 41 Subordinate to
Lisbon
L b
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66 67 68 6 Sleep like ___ 44 Rich deposit
Algiers
Al i Athens
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69 70 71
Flurries
8 No longer in bed 49 Added number
Rabat 9 Fire 51 Way out
Ice CHANGE AT THE TOP | By Marie Kelly 10 Southpaw’s 53 Name on an
Today Tomorrow Today Tomorrow setups old column
Global Forecasts City Hi Lo W Hi Lo W City Hi Lo W Hi Lo W
The answer to 20 Futilely trying to 42 1972 Michael
this week’s contest control the Jackson album 11 Nodder’s words 55 Watch brand
s...sunny; pc... partly cloudy; c...cloudy; sh...showers; Geneva 13 9 pc 11 5 r Ottawa 5 -2 pc 9 1 c
t...t’storms; r...rain; sf...snow lurries; sn...snow; i...ice crossword is a uncontrollable 43 Lincoln, e.g. 12 Oscar nominee with a one-letter
Hanoi 29 20 pc 30 22 pc Paris 10 5 r 11 3 pc logo
Havana 28 18 s 28 18 pc Philadelphia 16 4 s 15 7 pc ive-letter word. 22 Plymouth Rock 45 Contract for “Nebraska”
City Hi
Today
Lo W
Tomorrow
Hi Lo W
Hong Kong 26 23 s 27 24 pc Phoenix 28 18 pc 29 17 s Across female 46 County on the 15 Three-player card 56 Chairman’s
Honolulu 29 23 pc 29 22 pc Pittsburgh 12 2 pc 14 5 pc
23 Canal settings, game prop
Amsterdam 10 5 r 10 4 pc Houston 30 18 pc 27 14 pc Port-au-Prince 32 21 pc 32 21 t 1 T, at times North Sea
often 19 Piston motion 57 Dawn
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Atlanta 26 11 s 22 7 s Johannesburg 29 16 pc 29 16 t Riyadh 31 14 s 32 16 pc
component
26 Left ventricle 50 Best New Artist 25 Sigh at a spa 59 Levelheaded
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13 Flawed title
Bangkok 32 25 pc 33 25 pc Lima 25 16 pc 25 16 pc San Diego 24 16 s 24 15 s
character of 29 Carousing 2009 Grammys eventually 62 Carmela’s
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Berlin 6 1 pc 6 2 r Los Angeles 26 15 s 25 14 s San Juan 29 25 pc 31 25 t 1815 32 Class schedule 52 Soprano Fleming marries
Bogota 19 10 c 18 10 pc Madrid 17 12 sh 15 4 sh Santiago 33 15 s 31 15 s 14 “Unfortunately...” letters 54 Requiring a Commander 64 First word in
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Boston 12 1 s 11 5 pc Melbourne 26 9 s 15 10 pc Sao Paulo 19 15 c 20 16 c
16 Indication of
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Brussels 10 5 r 10 2 pc Mexico City 21 12 pc 21 10 pc Seattle 17 12 s 15 10 r Previous Puzzle’s Solution
Buenos Aires 29 17 s 30 18 s Miami 28 21 s 28 21 pc Seoul 17 10 pc 19 10 pc perhaps 37 In ine fettle 58 Hinny’s mother
S O L T I S C O T M I E N
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Denver 22 5 pc 20 4 pc Nashville 22 6 s 21 6 s Tel Aviv 25 14 s 25 15 pc A R T S A L E S I S I S

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Detroit 13 4 s 17 6 s New Delhi 31 16 pc 30 16 pc Tokyo 17 12 s 20 11 s by 11:59 p.m. Eastern Time Sunday, Nov. 6. A solver selected at random D E M O C A N A D A S T A T
Dubai 33 26 s 32 25 s New Orleans 30 19 s 28 18 pc Toronto 10 4 s 13 5 c will win a WSJ mug. Last week’s winner: Rhonda Sampson, Broken D R A N K M I R A E M O
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P2GW309000-0-B00100-1--------AL
Euro vs. Dollar
1.14
1.1096 t 0.04% FTSE 100
1.12
1.10
1.08
A S
As of 4 p.m. ET
© 2016 Dow Jones & Company. All Rights Reserved.
Drug Firms Mount
Defense of Pricing
BY PETER LOFTUS
The pharmaceutical indus-
try is spending millions of
dollars in the U.S. to fight
groups advocating lower drug
costs, as criticism of high
prices mounts.
Drug companies have long
lobbied to protect their inter-
ests, but the industry-funded
push is “more extensive this
time,” said K.J. Hertz, a legis-
lative representative for se-
nior-citizen advocacy group
AARP, which supports reining
in drug prices. In some cases,
self-described patient advo-
cacy groups receiving industry
More Work
Left to Do
At Credit
Suisse
Tidjane Thiam has been
liberally swinging his ax at
Credit Suisse this year, but
no matter how hard the chief
executive tries to attack
costs, it is mostly revenue
that seems to be disappear-
ing.
The Swiss bank squeaked
into profit in the third quar-
ter when expec-
tations were for
a loss, but with
a return on eq-
uity of just 0.4%
for the quarter
HEARD and a loss for
ON THE the year, inves-
STREET tors are still a
PAUL J. long way away
DAVIES from getting a
decent return.
By far the
biggest problem remains the
Swiss bank’s global markets
division, which has had two
restructuring and downsiz-
ing plans since Mr. Thiam
took over as chief executive.
Total expenses here are
down 2% for the first nine
months of 2016, compared
with last year, and the bank
expects to hit its cost-cut-
ting target early.
However, the revenue fell
25% this year from last year,
hit hard by a collapse in Eu-
ropean equities trading and
much weaker performance in
fixed-income compared with
both U.S. and European ri-
vals—worse even than
Deutsche Bank.
Despite hitting its cost
target early, it seems likely
that Credit Suisse’s Mr.
Thiam is going to have to
swing the ax even more ag-
gressively to make this divi-
sion sustainably profitable,
unless there is some star-
tling industrywide recovery
Please see HEARD page B2
 Surprise profit fails to
assuage investors.................... B5
Pound Jumps on Brexit Ruling, Rate Policy
BY MIKE BIRD
The British pound surged
Thursday after a court ruled
that the U.K. government
needs parliamentary approval
to trigger Britain’s exit from
the European Union and the
Bank of England stood pat on
interest rates.
Analysts said sterling may
extend its gains in the coming
days as investors scramble to
cover short positions, or bets
that the pound will decline.
But the pound has been under
downward pressure against
‘CHATBOTS’ CATCH ON WITH BUSINESSES TECHNOLOGY | B3
BUSINESS &FINANCE
7050
6790.51 t 0.80% Gold
6900
6750
6600
O A S O
funding are speaking out
against efforts to curb drug
spending.
The industry-funded patient
groups “have this relationship
which should give them the in-
centive to take the industry
side,” said Rick Claypool, re-
search director for the Washing-
ton nonprofit Public Citizen, a
critic of the drug industry.
The industry is also financ-
ing a $109 million offensive
against a closely watched Cali-
fornia ballot proposal in the
Nov. 8 election that would re-
quire state agencies to pay the
same discounted prices for
drugs as the U.S. Department
The Funeral Is Reborn
As cremations supplant caskets, service providers diversify their offerings
Foundation Partners CEO Brad Rex in front of a beach panorama offered in ‘experience rooms’ as part of the firm’s funeral services.
BY JAMES R. HAGERTY
As more Americans choose
cremation—often dispensing
with the need for caskets,
burial plots and dreary ritu-
als—the funeral industry is re-
inventing itself. The goal: stay
relevant and avoid a plunge in
profit.
“This industry was really
built around selling a casket,”
Thomas Ryan, chief executive
of Service Corp. International,
the largest U.S. operator of fu-
neral homes, said in an inter-
view. “Now it’s really about re-
membering the person.”
That can mean elaborate
pageantry. “We don’t call it a
funeral service,” said Brad
Rex, chief executive of Foun-
dation Partners Group, which
owns 50 funeral homes and
nine cemeteries in 14 states.
“We call it a gathering.”
Most of Foundation’s homes
have a “multisensory experi-
ence room,” said Mr. Rex, who
previously ran Walt Disney
the dollar since the U.K.’s June
23 vote to exit from the EU,
and many analysts expect that
pressure to persist as inves-
tors focus on continuing eco-
nomic uncertainty.
The High Court ruled that
Prime Minister Theresa May
couldn’t begin formal negotia-
tions to leave the EU without
a parliamentary vote. Parlia-
mentary lawmakers largely
supported remaining in the
bloc, and though few are ex-
pected to defy the referendum
result, a vote could delay the
exit process or force the gov-
1350
1302.10 t 0.36% WTI crude
1300
1250
1200
A S O A
THE WALL STREET JOURNAL.
of Veterans Affairs.
The industry lobbying group
Pharmaceutical Research and
Manufacturers of America re-
cently raised dues from its
member companies for 2017 to
help fund efforts including de-
fending its positions on the
cost of medicines, a spokes-
woman said, though she de-
clined to say by how much.
PhRMA raised more than $200
million in dues in 2014, accord-
ing to a tax filing for the most
recent year available.
One of the biggest targets of
criticism from the drug indus-
try and patient groups is the
Institute for Clinical and Eco-
Funeral Practices
Cremations as a percentage of
deaths, by country
Japan 100%
Switzerland 88%
U.K. 75%
Canada* 64%
Germany 55%
U.S. 49%
France 35%
Italy 20%
*Excludes Quebec
Sources: Cremation Society of Great
Britain; U.S. National Funeral Directors
Association
THE WALL STREET JOURNAL.
Co.’s Epcot theme park in Or-
lando. Using audio and video
equipment, the experience
rooms can create the atmo-
sphere of a golf course, com-
plete with the scent of newly
ernment toward a softer ver-
sion of Brexit.
“Short positions [in the
pound] have been running at
very high levels, near all-time
highs, so there is this poten-
tial for a move higher over the
days ahead,” said Neil Mellor,
currency strategist at BNY
Mellon. “But the prevailing
view is the risks are still
geared toward the downside.”
The pound rose 0.8% imme-
diately after the ruling was
announced, climbing to $1.245.
It jumped higher again at mid-
day in London, when the Bank
55
44.66 t 1.50% German Bund
50
45
40
S O
Backers of a California ballot proposal for curbing drug prices.
nomic Review, or ICER, a Bos-
ton nonprofit that analyzes
drug costs and sometimes con-
cludes medicines are over-
priced—research that some in-
surers are using to bargain
with drugmakers.
Drugmakers and their lobby-
ing group say market competi-
tion is driving down the cost of
mowed grass, to salute the life
of a golfing fanatic. Or it can
conjure up a beach, mountain
or football stadium. The price
is included in the company’s
funeral-service fees, typically
ranging from $4,000 to
$8,000, Mr. Rex said.
Many funeral homes are
eliminating casket-viewing
rooms, considered depressing.
Instead, customers view ser-
vice and merchandise options
on flat screens, “just like if
you shop on Amazon,” Mr. Rex
said.
Another strategy is to apply
more salesmanship to people
seeking a basic $700 crema-
tion. Service Corp.’s salespeo-
ple ask those customers to
think about what will happen
to the ashes.
“Because you can either get
them back in what looks like a
Chinese food container, or we
can have something very re-
spectful and nice; that’s an urn
that may be $400 or $500, but
it’s beautiful and you can put
of England’s monetary policy
committee announced a unani-
mous vote to hold interest
rates and the central bank’s
bond-buying program un-
changed in November. That
took the pound to a high of
$1.248, up 1.4% on the day.
Late in New York, the pound
was trading at $1.2458, up
from $1.2302 late Wednesday.
The BOE now expects infla-
tion to rise to 2.7% by the end
of next year, well above the of-
ficial 2% target. That could
constrain the central bank in
terms of its ability to cut rates
0.15
yield 0.157% 10-Year Treasury
2.25
yield 1.811%
0.05 1.50
-0.05 0.75
-0.15 0.00
A S O A S O
Sources: Tullett Prebon; SIX Financial
Friday - Sunday, November 4 - 6, 2016 | B1
GILLES MINGASSON/AP IMAGES FOR AIDS HEALTHCARE FOUNDATION
Google
Rejects
Antitrust
Claims
Alphabet Inc.’s Google on
Thursday hit back at European
Union claims that it abuses its
dominance in internet shop-
ping and advertising services,
ramping up its fight against
medicines for many diseases, the bloc’s regulators.
and that government pricing With its formal response to
measures—such as the Califor- the EU’s antitrust charges,
nia ballot measure—could back-
fire. They also say ICER’s re- By Natalia Drozdiak in
search undervalues the benefits Brussels and Sam
of drugs, and could lead to in- Schechner in Paris
surance restrictions.
We don’t believe the ap- Google is taking a firmer
Please see PRICES page B2 stance against the bloc’s accu-
sations that it has shut out ri-
vals in various markets with a
number of its products.
The EU charges potentially
expose Google to billions of
euros in fines and demands
that it overhaul its operations
at a time when the Silicon Val-
ley giant is grappling with a
barrage of other legal attacks
in Europe.
On Thursday, Google again
defended the way it places re-
tailers’ ads for products on
some of its search results by
saying there is no evidence
that those ads hurt price-com-
parison websites.
The company contends
that the European Commis-
sion, the bloc’s antitrust reg-
ulator, looked at too small a
set of rival sites, and that, in
any event, on mobile devices
most people shop with dedi-
cated apps.
“The Commission’s revised
EVE EDELHEIT FOR THE WALL STREET JOURNAL
case still rests on a theory
that doesn’t fit the reality of
how most people shop on-
line,” said Kent Walker,
Google’s general counsel, in a
blog post focusing on the
company’s response to the
EU’s shopping charges.
A spokeswoman for the Eu-
ropean Commission said it
had received Google’s replies
and that it would consider
the responses carefully before
making any decision.
it on the mantel,” Mr. Ryan, Google last year rebuffed
the CEO, said in a recent in- the EU’s first set of shopping
vestor presentation. charges, saying the commis-
Another possible add-on sion failed to take into ac-
costing $300 to $400: insur- count the fast growth of com-
ance in case you die away panies such as Amazon.com
from home and your body Inc. and eBay Inc.
needs to be shipped. The commission circled
As baby boomers age, the back this July with an extra
number of deaths in the U.S. is layer of charges in the shop-
projected to rise to about 3.6 ping case, sharpening its ar-
million in 2036 from 2.7 mil- gument that Google’s compar-
lion this year. But that doesn’t ison-shopping service
mean a surge in casket sales: operates in a market separate
About half of U.S. deaths this from those e-commerce plat-
year are expected to result in forms—an argument Google
cremation, up from less than again rejected.
10% in 1980. The proportion In separate charges, the EU
will keep rising and should top in July also accused Google of
70% by 2030, according to the breaching antitrust rules by
National Funeral Directors As- restricting how a website that
sociation. offers a Google search func-
The research firm Freedo- tion can show advertisements
nia Group projects that U.S. sold by other companies.
casket shipments from manu- Google is gearing up for a
facturers in 2020 will total potentially long legal fight
$456 million, down from $603 with the EU and other regula-
million in 2015 and $1.2 billion tors in the region.
in 2000. Lower revenue from In the coming days, Alpha-
Please see FUNERAL page B2 Please see GOOGLE page B3
STEFAN WERMUTH/REUTERS
Analysts said investors may have closed bets against the pound.
further or to expand the quan- a currency because they push
titative-easing program, two down yields, making the local
measures aimed at shoring up market less attractive for for-
the U.K. economy against the Please see POUND page B2
potential effects of Brexit.
Central-bank rate cuts and  Heard: Politics are king in
bond buying tend to weigh on Brexit drama.............................. B8
P2GW309000-0-B00200-1--------AL
B2 | Friday - Sunday, November 4 - 6, 2016
INDEX TO BUSINESSES
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
Activision Blizzard......B8
Adidas....................B4,B8
Aera Energy................A6
Air France-KLM...........B4
Ak Investment............A8
AKP ............................. A1
Alphabet ................ B1,B3
American Airlines Group
.....................................B3
Apple...........................B3
AstraZeneca................B4
Aurora Casket.............B2
Automatic Data
Processing.................B3
BMW ........................... B4
C-D
Capstone Wealth
Management.............B8
Chevron.......................A6
China Forestry Holdings
.....................................B5
China Metal Recycling
(Holdings).................B5
Coppell Advisory
Solutions...................B8
Credit Suisse Group B1,5
Deutsche Bank ...... B1,B5
E-F
easyJet........................B4
Egypt EGX 30 Index...A4
Electronic Arts............B8
Emirates Airline ......... B4
Facebook......................B3
INDEX TO PEOPLE
B Hamburger, Brian ....... B8
Barker, Ryan ............... B2
Bartolacci, Joseph ...... B2
C Junkermann, Nicole....A2
Chudnovsky, Stan.......B3
Claypool, Rick..............B1
Creutz, Doug...............B8
D Louis-Dreyfus,
Dauch, David...............B4
Davis, Matthew John.B8
de Lapérouse, Philippe
.....................................A2
De Maeseneire, Patrick
.....................................A2
Dresslar, Tom..............B8
E T
Ellinghorst, Arndt.......B2
G-H
Giegold, Sven..............B5
Gleeson, Simon...........B4
Goldberg, Robert.........B2
Greenbaum, Augusta W6
HEARD
Continued from the prior page
in revenue.
There were disappoint-
ments elsewhere, too.
In the Asia-Pacific unit,
which includes wealth man-
agement and investment
banking and is the bank’s big
hope for growth, revenue for
the year so far is down 9%,
although the third quarter of
2016 was a little better than
both the second quarter and
last year’s third quarter.
The problem in Asia is
that, while private-banking
revenue is better and invest-
ment-banking advisory in-
come improved strongly for
the first nine months, these
POUND
Continued from the prior page
eign investors.
Some analysts said Thurs-
day’s sharp move higher may
be fueled by investors cover-
ing short positions, buying
sterling to close the bets they
had made on it declining fur-
ther.
Roger Hallam, currencies
chief investment officer at J.P.
Morgan Asset Management,
had bet on a weaker sterling
since the Brexit vote but in
October took profits on that
short position when the cur-
rency fell to the region of
$1.22 to $1.23 against the U.S.
dollar. The court ruling com-
bined with better-than-ex-
pected recent economic data
led Mr. Hallam to suggest ster-
ling could rise further in the
ADVERTISEMENT
The Mart
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BUSINESS OPPORTUNITY
à As with all investments,
appropriate advice should
be obtained prior to
entering into any
binding contract. à
THE WALL STREET JOURNAL.
BUSINESS NEWS
Florac...........................A2
Foundation Partners
Group.........................B1
G-H
GameStop....................B8
N
Norwegian Air Shuttle
.....................................B4
Pharmaceutical
P
VW to Battle for Cost Cuts
BY WILLIAM BOSTON
GlaxoSmithKline.........B4 Research and
Henkel ......................... B4 Manufacturers of
Volkswagen AG’s efforts to
Hermes International.B4 America.....................B1
cut costs amid its emissions-
Hillenbrand..................B2 Q-R
HSBC ........................... B7 Qatar Airways.............B4 cheating scandal face a new
Huawei Technologies..B3 Reebok.........................B4 roadblock, as major sharehold-
Hyundai Motor............B4 Ryanair Holdings ........ B4 ers and labor representatives
I S gather on Friday for an ex-
Inmarsat......................B3
Samsung Electronics..B3 traordinary shareholders
International Business Service International..B1 meeting to try to break an im-
Machines...................B4 Shire............................A2
International passe over restructuring.
Société Générale.........B7
Consolidated Airlines Space Exploration Chief Executive Matthias
Group.........................B4 Technologies.............B3 Müller took command of the
International Standard Chartered....B5 world’s second-largest auto
Consolidated Airlines T maker by sales a year ago fol-
Group.........................B4
Temasek Holdings lowing reports that the car
K
RAINER JENSEN/DPA/ZUMA PRESS
Private ...................... A2 maker had installed illegal
Kia Motors..................B4 Tesla Motors...............B2
emissions software in some
Koza Ipek Holding ...... A8 U-V models. He is now trying to re-
L-M UBS Group...................B5 align Volkswagen’s businesses.
Lenovo Group..............B4 Valeant Pharmaceutcals
.....................................B8 Mr. Müller aims to slash
Louis Dreyfus........A1,A2
Volkswagen.................B2 costs and boost lagging profits
Mastercard..................B3
Matthews International W-Z by scrapping unprofitable
.....................................B2 Wells Fargo.................B7 models, cutting thousands of
Microsoft.....................B8 ZF Friedrichshafen......B4 jobs and shrinking the com-
pany’s massive capital ex- Volkswagen van production in Poland. VW is debating job reductions with labor representatives.
penses.
His efforts are encumbered
by Volkswagen’s governance
profitable. Volkswagen em-
ploys more than 600,000 peo-
Friday’s extraordinary su-
pervisory board meeting was
wagen had made “substantial
progress” toward resolving 3-
Price, Nick...................B4 system, which grants labor ple world-wide, nearly half of called to ensure that decisions liter-engine vehicles on U.S.
Henger, Ralph ............. B5 R representatives half the seats them in Germany, at more can be made at the meeting roads with an emissions-
J-K Regli, Daniel................B5 on the Wolfsburg, Germany, than 100 factories. later this month, a person cheating device, and should
Rex, Brad.....................B1 auto maker’s board. Insiders say Mr. Diess is close to theboard said. return with a formal plan on
Kline, Christopher.......B8 Rorsted, Kasper.....B4,B8 Talks between Volkswagen’s aiming to cut Volkswagen In the wake of the diesel Nov. 30. The 80,000 diesel-
L Ryan, Thomas.............B1 management and worker rep- brand costs by nearly €4 bil- scandal, which so far has cost powered vehicles weren’t part
Lonsdale, Sarah.........W6 S resentatives have been held up lion ($4.4 billion) over the Volkswagen more than €18 bil- of an earlier court settlement
Schilbe, Stefan ........... B5 by union demands that Volks- next three years, but he needs lion in compensation and legal that covered nearly 500,000
Margarita..................A1 Schmidt, Mayo ........... A2 wagen agree to build new elec- Mr. Osterloh’s backing to fees, Mr. Müller opened wide- vehicles with 2-liter engines.
Louis-Dreyfus, Philippe Schweinitz, Oliver von tric vehicles and a giant bat- achieve that. Unions refuse to ranging talks with labor. They Arndt Ellinghorst, automo-
.....................................A2 .....................................B5 tery factory in Germany. support Mr. Diess unless man- aim to agree on streamlining tive analyst at brokerage Ever-
Seng, Ng Lap..............A7 Herbert Diess, a former agement commits to produc- and an investment shift to en- core ISI, said Volkswagen
M
Sewing, Christian.......B5 BMW AG executive who took tion in Germany. sure the company remains needs to follow PSA Peugeot
Mabeo, Peter.............W6 Sheffield, Scott .......... B5
Masiero, Roberto........B3 the helm at the Volkswagen Without that, Mr. Osterloh competitive against new-tech- Citroën of France, which has
Sudreau, Laure ........... A2
Mellor, Neil ................. B1 brand last year, has clashed is threatening to block ap- nology rivals such as Uber lowered its break-even point
repeatedly with labor chief proval of the company’s five- Technologies Inc. and Tesla and in the third quarter deliv-
Merrick, Amy.............W6
Meyer, Marie-Jeanne.A2 Thiam, Tidjane............B1 Bernd Osterloh over how to year investment plan at the Motors Inc. ered a 6.6% margin in the
Müller, Matthias.........B2 W restructure the brand and regular supervisory board Separately, a U.S. District company’s auto division de-
O-P Walker, Kent...............B1 make the German operation meeting on Nov. 18. Judge on Thursday said Volks- spite lower revenue.
Wilcox, Jonathan........B2
O'Shea, Mandy..........W6
Osterloh, Bernd .......... B2 Y
Ouattara, Hamed.......W6 Yuanqing, Yang...........B4
FUNERAL
gains were more than wiped
out by a 35% drop in equities
trading, which is by far the
single biggest source of reve-
Continued from the prior page
casket sales already is squeez-
ing some funeral homes. The
number of such homes in the
nue in the region. That may U.S. is estimated at 19,350,
be just cyclical and it could down 12% from 2000.
recover once rich Asians re- Kathryn McMiller, 60, a
discover their investing health-records consultant in
mojo, but the outlook for Rancho Santa Margarita, Calif.,
EVE EDELHEIT FOR THE WALL STREET JOURNAL
that remains uncertain. probably won’t need a funeral
Even on the most flatter- home. When the time comes,
ing view of Credit Suisse, us- Ms. McMiller wants to be cre-
ing its adjusted profits and mated and sees no need for a
ignoring the losses in the service or burial plot. She has
bad bank, the Swiss lender lived in 10 states and doesn’t
still only produced a 7.6% an- have a hometown.
nualized pretax return on eq- “What’s the point of being
uity in the third quarter on buried somewhere?” she
the back of a cost-to-income asked.
ratio that is still quite high Despite changing prefer-
at 83%. There undoubtedly ences, Service Corp.’s Mr. Ryan
remains a huge amount of projects that his company’s A room with a projected beach backdrop offered by a funeral-services provider in Florida.
work for Mr. Thiam and his revenue per funeral can in-
team to do. crease 1% to 2% a year as the Bay, Fla., area, has an upscale The average cost is around site or elsewhere. “We don’t
array of services and products service allowing customers to $6,500. The no-frills service use the term funeral,” said
grows. meet with a funeral director at averages about $1,500. Matt Linn, the 43-year-old
coming days “as the market
digests what [the ruling]
means.”
Either way, analysts expect
Casket makers say they be-
lieve more families who
choose cremation will also
buy, or even rent, a casket for
any hour, including on holi-
days and weekends. The home
handles the death-certificate
paperwork, picks up relatives
In Cedar Rapids, Iowa, the
Brosh Chapel funeral home
also offers space for other
types of events, including
owner of Brosh Chapel. His ti-
tle is celebration-event coordi-
nator.
Old-style funeral homes
further volatility as the gov- viewings. Meanwhile, the at the airport and offers grief weddings and reunions. A ca- “are extinct,” Mr. Linn said.
ernment appeals in the U.K.’s choice of urns is growing. support and other services. tering team provides meals on “You have to adapt.”
Supreme Court. Should that Walmart.com offers them for
bid fail and parliamentary de- as little as $25, but high-end
bates on Brexit begin, the
pound could face additional
urns can cost more than
$1,000. Some are shaped like
U.S. Casket Maker Diversifies Its Product Line
flux. motorcycle fuel tanks; others PITTSBURGH—Matthews an effort to boost growth. Last rialization divisions should be
Meanwhile, most are stick- like ducks or baseballs. International Corp., a maker of year, 56% of sales came from in the low single digits, Mr.
ing to their negative outlook The funeral industry also caskets, says the business is its “brand solutions” division, Bartolacci said.
on the currency, unsure offers myriad alternatives for still attractive even though a which makes gravure printing Competing with imports
whether Thursday’s decision ashes, including services that higher rate of cremation hurts and embossing tools used for from China and elsewhere is a
will eventually have much im- rocket remains into space. Re- sales. packaging, among other things. concern. Mr. Bartolacci said
pact on the Brexit process. mains can be incorporated Many families that don’t But last year Matthews bol- Chinese caskets are steady at
British government bonds into jewelry, lawn statues and buy caskets still want urns, stered its memorialization seg- 5% to 7% of the U.S. market.
appreciated after the court even furniture. “You buy a statues, cemetery markers or ment by buying Aurora Casket Shipping costs are a drag on
ruling, but later gave up those bench, and you put mom and other “memorialization” prod- Co. for about $214 million. That China’s sales of caskets to the
gains after the BOE revised its dad in this granite bench,” ucts made by the 166-year-old solidified Matthews’s position U.S. because the product is
inflation forecasts higher. said Lawrence Miller, chief ex- company, Joseph Bartolacci, as the second-largest U.S. bulky.
The FTSE 100 stock index ecutive of StoneMor Partners chief executive, said in an in- maker of caskets, behind the U.S. producers also have
fell 0.8%, its fourth consecu- LP, an operator of cemeteries terview. Batesville unit of Hillenbrand well-developed networks of
tive decline. and funeral homes. Honoring the dead “is not a Inc. Together, Mr. Bartolacci es- warehouses, allowing them to
—Jason Douglas Some funeral home opera- discretionary spend,” he said. timated, Batesville and Mat- deliver quickly at relatively low
contributed to this article. tors offer premium and dis- People feel the need for that thews have at least 70% of the cost. “We can get just about
count brands. Premier Care of even in recessions. market. anywhere in the country within
Florida Inc., which owns seven For years, Matthews has di- The long-term rate of sales four to six hours,” Mr. Bar-
funeral homes in the Tampa versified away from death in growth for Matthews’s memo- tolacci said.
BUSINESS OPPORTUNITY
#!-&)( !' $,*%&) "+%(
PRICES Mr. Wilcox, a corporate-
communications consultant
and former political speech-
writer, co-founded Patients
founder of Center for Medicine
in the Public Interest, a New
York nonprofit that receives
funding from the pharmaceuti-
Medicine in the Public Interest
is for work on health policy is-
sues including innovation and
patients’ access to medicines.
"9 6(.5( *1 450!(5. 8(5./%*( 288 +&)# Continued from the prior page Rising in Washington last year, cal industry. Pfizer Inc. gave Mr. Goldberg later emailed a
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2&'#* 0&8# !:) ,: %%+55,( 61/ proach ICER is taking should be and says it receives financial the group $105,000 last year member of the ICER advisory
\M',D^MO$ \- IN9X0- ^XX E0V&80VX the final word on what consti- support from PhRMA and and $15,000 in the first quar- committee, Ryan Barker, who
.2UF AP Z-4&; \-X[" E0V&80VX" ', W>.UW
'V77-0[4-7 9X&7N_[3$ ,77 9XL[X0V4H" ';-00[7 K-T[4" tutes value,” Eli Lilly CEO John drugmakers Amgen Inc. and ter of 2016, according to Pfizer had voted that the new multi-
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J;[4[L[4 7V&-0[_ J90;VN0 79Y90-09VXP E[&N4[_ Lechleiter said in an interview. Celgene Corp. Mr. Wilcox said disclosures. PhRMA provided ple-myeloma drugs weren’t
&4[_90V4 4[3[4L[3 0;[ 49<;0 0V &4[_90 (9_ 0;[ ?N77 In June, an industry-funded the group aims to help patients $75,000 to the group in each of cost-effective. Mr. Goldberg
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V? 0;[ VT[X9X< (9_P ,77 (9__[43 J977 ([ 4[6N94[_ 0V group called Patients Rising obtain medications. His wife, wrote: “So if it’s your kids dy-
T4[3[X0 - &-3;9[453 &;[&8 9X 0;[ -YVNX0 V? ]>F"FFF started the website “ICER Terry Wilcox, also a co-founder ing of myeloma, I expect you
Y-_[ VN0 0V *49-X D[30V ,33V&9-0[3" -3 - 4[?NX_-(7[
3[&N490H _[TV390" 9X V4_[4 0V ([ [79<9(7[ 0V (9_P Watch” to counter ICER re- of Patients Rising, said that
Drugmakers say [to] reject using…any drug that
7.3 2.39 407.32$/4.0 ".0/$"/+
,X<[7- E&;49YT" SWU1R >F=:/2FF ports, with posts like “Cost- “supporters do not dictate our competition is driving doesn’t have the evidence you
-3&;49YT)_-Y4[77P&VY Cutting Proposals Could Cost positions or programs.” needed to vote yes on net
%-Y4[77" O[73VX" E&;49YT" K-779V3" K-&;[4 + E97L-
Life Spans.” In May, two days Spokespeople for Celgene and
down the cost of health benefit.”
$-"/4.0993+ *49-X D[30V" S@U@R >W.:1>W.
(49-X)(0[30VP&VY before a planned ICER meeting Amgen said they support groups many medicines. Mr. Barker, a health policy ex-
in St. Louis to review new mul- that promote patients’ access to pert, said he viewed the email as
TRAVEL tiple-myeloma drugs, Patients medicines. A PhRMA spokes- “a personal attack against my
Rising founder Jonathan Wil- woman said the group supports 2013 and 2014, according to family.” Mr. Goldberg said peo-
cox held a news conference at Patients Rising to hear its per- PhRMA filings with the Inter- ple judging the value of drugs
Save Up To 60% a St. Louis hotel to air his con- spective on various issues, and nal Revenue Service. Contribu- should live by their decisions.
First & Business cerns about the group. He also that PhRMA “does not deter- tion data from more recent Steven Pearson, founder and
INTERNATIONAL
attended the ICER meeting, mine the advocacy agenda for years isn’t publicly available. president of ICER and a lecturer
Major Airlines, Corporate Travel
Never Fly Coach Again! and criticized the group’s find- patient organizations.” Mr. Goldberg said the funding at Harvard Medical School, said
www.cooktravel.net ings during a public-comment Also criticizing ICER at the was unrestricted. A Pfizer ICER is “seeing groups that are
(800) 435-8776 session. “Has this think tank Patients Rising press confer- spokeswoman said the com- funded by pharma who are more
stopped thinking?” he asked. ence was Robert Goldberg, co- pany’s funding of Center for vocal in criticizing us.”
P2GW309000-0-B00300-1--------UK

THE WALL STREET JOURNAL. Friday - Sunday, November 4 - 6, 2016 | B3

TECHNOLOGY WSJ.com/Tech

‘Chatbots’Catch on WithBusiness
BY KIM S. NASH bots will become the new in-
SpaceX
May Lose
Six months ago, Facebook
Inc. said it would open its
terface for corporate software.
Rather than launching individ-
ual software programs to
Launch
Messenger service, making it change health benefits, say, or BY ROBERT WALL
possible for businesses to start a retirement account,
build virtual assistants that employees could consult with LONDON—Elon Musk’s
can chat with the one billion- bots that have learned their Space Exploration Technolo-
plus real people who use the habits and use algorithms and gies Corp. may lose a space-
communications platform each machine learning to make sug- craft launch order from a ma-
month. gestions, he said. jor customer, Inmarsat PLC,
Since then, developers have ADP software engineers are even as the European satellite
ERIC RISBERG/ASSOCIATED PRESS

created more than 33,000 such working with social anthropol- operator voiced confidence in
“chatbots,” which have icons ogists and copywriters to tin- the rocket company’s ability to
and nicknames that at first ker with bot behavior. Tests return to flight this year.
glance might not appear that show that for bots to earn hu- SpaceX, as the rocket com-
different from a friend or rela- man acceptance, they must pany is named, lost one of its
tive in a user’s contact list. not act too much like people Falcon 9 rockets in an explo-
Last month, Mastercard or too much like computers. sion during a routine refueling
Inc. launched Kai, a bot for Bots that refer to them- exercise in September.
banks that makes it possible Facebook CEO Mark Zuckerberg at an April event. Other firms can access its Messenger service. selves in the third person Investigators believe a refu-
for Facebook Messenger users sound unnatural, Mr. Masiero eling procedure led to the fail-
to check activity on their have a sea of icons that are book Messenger bots are slow, ware agents that understand said. “I” and “we” work better. ure. SpaceX hopes to resume
credit, debit and loan accounts sitting there that you don’t with limited conversational ca- natural language and field Bots that fire replies in milli- flights before year-end; Penta-
and set up financial-manage- know how to use,” says Stan pabilities. multifaceted requests such as, seconds are unnerving, he gon and industry officials said
ment tools. Another Master- Chudnovsky, vice president Facebook is meeting with “Help me rent a car in Phila- said. His team has pro- any launch resumption before
card bot for merchants lets and head of product for Mes- developers and recently up- delphia two Saturdays from grammed delays into response mid-January is doubtful.
customers make purchases by senger at Facebook. dated its tools to, for example, now.” Some bots, learning the time so that a bot replies no Inmarsat Chief Executive
sending a Facebook message Facebook is using its power further customize conversa- habits of their human masters, sooner than two seconds after Rupert Pearce said on Thurs-
and paying with Mastercard’s to accelerate the growth of tion threads. “It’s very early may anticipate work. “Your a question. day that the launch of its
digital wallet. messaging and bots. In 2014, it days for bots,” Mr. Chud- monthly golf date isn’t yet ADP aims to pilot bot inter- fourth Global Xpress satellite
Such capabilities may be pushed users to employ Mes- novsky said. He predicts that scheduled. Would you like to faces on some of its human-re- on a SpaceX rocket would be
just the beginning for bots. A senger for direct messages, within perhaps two years, peo- call Kiawah Island?” sources software next year. delayed until next year and
range of companies are bet- and the platform now has ple and bots powered by arti- This is beyond today’s sim- At American Airlines that the company may shift a
ting that the convergence of more than one billion users. ficial intelligence will conduct ple bots that answer trivia Group Inc., Chief Information spacecraft due for launch next
messaging platforms, chatbots That same year, Facebook ac- complex dialogs. questions or reorder laundry Officer Maya Leibman said year to another rocket. “We are
and increasingly powerful arti- quired for $19 billion messag- A Facebook user planning a detergent based on data from bots may improve customer actively looking at alterna-
ficial intelligence will lead to ing service WhatsApp, which vacation, for example, could prior purchases, says Roberto service by providing faster ac- tives,” Mr. Pearce said.
the creation of a more natural also now has one billion users. send his criteria to Messenger, Masiero, senior vice president cess to information and a The satellite that may be
interface between machines April’s debut of develop- which would match the infor- of innovation labs at Auto- more consistent experience for shifted is a critical element of
and humans. ment tools for building Mes- mation to bots from travel- matic Data Processing. fliers. Developers at the airline Inmarsat’s plan to provide
“We are thinking of an in- senger bots has appealed to company partners. Partners “It’s a tectonic shift in how demonstrated how to use Am- high-speed in-flight Wi-Fi to
telligence center that will help startups and established would reply with offers. we interact with computers,” azon’s Echo, a voice-activated airlines flying in Europe.
you get to the right bot at the brands alike. Some users have The goal for many compa- Mr. Masiero said. bot device, to check in and re- Inmarsat is worried that
right time so you don’t have to complained that initial Face- nies is to build intelligent soft- Mr. Masiero predicts that trieve other information. even after SpaceX resumes
launches with the Falcon
booster, it may not be able to

GOOGLE as authorities in France, Spain

and Italy are pursuing Google
for allegedly unpaid taxes. The
company is also fighting in
Continued from page B1 French court over an order
bet is also expected to fire off from the country’s privacy
its response to EU charges is- regulator to apply the “right
sued in April over the tech gi- to be forgotten” on the inter-
ant’s conduct with its Android net world-wide. The company
mobile operating service. may also take a hit with a re-
Those allegations threaten to cent EU copyright proposal
undermine how Google earns designed to help news publish-
money from mobile devices, ers negotiate payment when
which have rapidly become us- aggregators like Google post
ers’ primary portal to the in- snippets of their articles on-
ternet. line.
The antitrust battle comes In response to the EU’s
shopping charges, Google said
it rejects the commission’s
proposed solution of providing
what the company called sub-
sidized advertising space for
price-comparison sites, in-
stead of the retailer ads that
Google’s usually shows. Forc-
ing Google to place competi-
tors’ product ads in its search
results “would just subsidize
sites that have become less
useful for consumers,” Mr.
Walker said.
In the separate advertising
case, the EU is leveling
charges at a relatively narrow
slice of Google’s business
called Adsense for Search,
whereby Google allows other
companies to embed Google
search boxes on their own
sites. Companies either pay
Google to use its search boxes,
or they allow Google to place
ads in the results, and split
the revenue.
The EU accuses Google of
restricting how third-party
websites can use search ads
from other companies when
using the search bar and, in
some cases, banning competi-
tors’ search ads altogether.
On Thursday, Google said
its AdSense for Search busi-
ness has always faced compe-
tition from rivals like Micro-
soft Corp., adding that the
company completely phased
out exclusivity requirements
for Google ads in its AdSense
for Search contracts in 2009.
It isn’t clear how much rev-
enue Google earns from Ad-
Sense for Search, but its
broader business of selling ads
on other companies’ websites
hauled in $7.4 billion—or
about 18% of its overall reve-
nue—in the first half of 2016.
make up lost time to ensure
its satellite is placed in orbit
as scheduled. Alternatives the
London-based company is con-
sidering include flying the
spacecraft on the European
Ariane 5 rocket, Lockheed
Martin Corp.’s Atlas V, or the
Russian Proton booster. Mr.
Pearce said Inmarsat could
stick with SpaceX if it can get
an earlier launch slot.
SpaceX wouldn’t comment
on Inmarsat’s plan.
—Andy Pasztor
and Olga Cotaga
contributed to this article.

Huawei Readies U.S. Sales

Huawei Technologies Co.
of China plans to sell its new
high-end flagship phone in the
U.S.—a first for the world’s
third-largest smartphone
CHRISTOF STACHE/AGENCE FRANCE-PRESSE/GETTY IMAGES

maker as the company tries to

grab a bigger piece of the pre-
mium-handset market.

By Juro Osawa
in Hong Kong and
Archibald Preuschat
in Munich

On Thursday, Huawei un-

veiled the Mate 9, its latest
flagship smartphone, with a
€699 ($776) price tag in Ger-
many. The company said the
new phone will initially be sold
in 12 countries in Asia, Europe Huawei executive Richard Yu with the new Mate 9 smartphone.
and the Middle East, and be
available in the U.S. later. security concerns. A 2012 con- Note 7 ahead of the peak holi-
The U.S. release date is ex- gressional report suggested day season.
pected to be in January, a per- that the Chinese government Huawei, already one of the
son familiar with the matter could use Huawei’s telecom world’s biggest suppliers of
said. In the U.S., the Mate 9 gear to spy on Americans. telecom-networking equip-
will likely be sold online, not Huawei denied the allegations. ment, initially focused on inex-
through carriers, the person While Alphabet Inc.’s pensive handsets in China, but
added. Google Nexus 6P, manufac- over the past few years it has
The launch of the Mate 9 is tured by Huawei, was sold in expanded in overseas markets
part of the Chinese technology the U.S. last year, the Chinese such as Europe, the Middle
company’s effort to sell more company hasn’t released its East, Africa and Latin America.
high-end devices to take on own flagship model in the U.S. The company has also been
Samsung Electronics Co. and until now. selling more-expensive phones
Apple Inc. in the global smart- It is an opportune time for to boost margins. In 2013, 3.5%
phone market. The new flag- the Chinese smartphone ven- of Huawei phones cost more
ship phone comes with Hua- dor: Rival Samsung has been than $400, but in the first half
wei’s own interface software, struggling with a global recall of this year, that portion rose
which uses artificial intelli- of its latest high-end phone, to 13%, according to IDC.
gence to automatically keep the Galaxy Note 7, after re- To justify the high price
applications, photos and vid- ports thatthe phones caught tags on its flagship models,
eos organized. That feature fire. Samsung was forced last Huawei has touted features
helps prevent the handset’s month to halt shipments of the such as processor chips de-
speed and performance from signed in-house and cameras
slowing, the company said. developed in collaboration
In April, Huawei launched Coming to the U.S. with German optics company
its high-end P9 smartphone, Huawei is challenging Apple and Leica Camera AG.
which features a dual-lens Samsung with a new high-end On Thursday, Huawei also
camera. flagship phone. unveiled a limited edition of
Huawei has set an ambi- the Mate 9 designed by
Global smartphone makers,
tious goal of becoming the Porsche Design Group, a unit
market share by shipments
world’s biggest smartphone of German luxury-car maker
maker within five years, but it 100% Porsche AG. The standard
has some catching up to do. It Mate 9 comes with a 5.9-inch
Samsung
held a 9.3% share of the global 80 display, while the Porsche De-
smartphone market in the sign version has a 5.5-inch
Apple
third quarter, behind Sam- curved display and will cost
60 Huawei
sung’s 20% and Apple’s 13%, more than $1,500. The phones
according to research firm In- OPPO also come with longer battery
Vivo
ternational Data Corp. 40 life and fast charging, which
As the world’s biggest mar- Huawei says delivers in 20
Others
ket for high-end smartphones, 20 minutes enough of a charge to
the U.S. is crucial for pre- last a full day.
mium-handset makers. But Analysts expect the discon-
Huawei faces challenges there 0 tinuation of the Galaxy Note 7
as its telecommunications-net- 3Q 2016 to boost sales of other high-
working equipment has been Source: IDC end phones from Samsung’s ri-
effectively banned because of THE WALL STREET JOURNAL. vals such as Apple and Huawei.
P2GW309000-0-B00400-1--------AL

B4 | Friday - Sunday, November 4 - 6, 2016 THE WALL STREET JOURNAL.

BUSINESS NEWS

Brexit Ruling Deepens Business Unease

BY NINA TRENTMANN has said the U.K. would trigger see what the court decision
AND DENISE ROLAND the process to leave the EU by means for the U.K.’s Brexit ne-
the end of March. Once Britain gotiations,” said a spokesman
LONDON—Brexit uncer- invokes Article 50 of the EU’s for ZF Friedrichshafen AG, a
tainty—hanging over big U.K. Lisbon Treaty—the mechanism large German car supplier with
and European corporations for that officially kicks off the di- U.K. operations in Birming-
months—just got worse. vorce proceedings—the U.K. ham, England. “At the mo-
Thursday’s decision by a has a two-year window to ne- ment, it just creates even more
U.K. court that the government gotiate its new relationship uncertainty for businesses like
here can’t trigger negotiations with the EU. ours.”
to leave the European Union “This is just round one,” The British government said
without a vote from Parlia- said Simon Gleeson, co-chair- it would go back to court, in
ment sent the pound higher, as man of public policy at law what is expected to be an ex-
investors scrambled to deter- firm Clifford Chance. “It will pedited appeals process.

CHRIS RATCLIFFE/BLOOMBERG NEWS

mine whether the decision continue to extend uncertainty “The continuing uncertainty
could derail or postpone a and make planning and invest- will inevitably leave many
British exit. ment tougher for businesses.” businesses in doubt as to how
But for many of the big Lack of clarity amid the un- to plan for future trade and in-
companies in the U.K. and Eu- precedented process of a ma- vestment, both within the U.K.
rope that opposed Brexit, the jor member leaving the EU has and abroad,” said Nick Price, a
ruling is far from a glimmer of clouded long-term investment managing associate at law firm
hope. Instead, it represents strategy at companies big and King & Wood Mallesons.
further uncertainty in the lon- small. For nonfinancial firms, —Robert Wall
ger term. “At the moment, ev- BMW Minis parked in Oxford, U.K. The German auto maker has several subsidiaries in the country. the biggest questions have been and Saabira Chaudhuri
erything is unclear,” said a around what sort of deal Britain contributed to this article.
BMW AG spokeswoman. “I am There was some relief for such as GlaxoSmithKline PLC Many of the index’s biggest could wrest from Europe over
not sure yet whether the court investors in some of the com- and AstraZeneca PLC, seen as components get most of their continued access to the EU’s tar-
decision today changes our po- panies hit hardest by the June havens during the uncertainty, revenue outside of Britain. iff-free single market. Many big
sition towards Brexit.” The 23 Brexit vote, and some pain both pulled back. As the British pound sank employers in the U.K. and Eu-
Munich-based car manufac- for those that have benefited. The FTSE 100, the index of over the past few months after rope have also hoped to con- See the story develop.
turer has several subsidiaries Shares in British airlines, for British blue chips that has the June vote, that revenue be- tinue to benefit from the bloc’s
in the U.K., among them Rolls- instance, soared after the rul- soared in the wake of Brexit, came more valuable in sterling. free movement of labor. Download on the App Store
Royce Motor Cars and Mini. ing. Pharmaceutical companies was down 0.8% Thursday. Prime Minister Theresa May “We will have to wait and

Adidas to Slim Down Air France Plans No-Frills Airline

Ailing Reebok Brand BY INTI LANDAURO
AND ROBERT WALL

BY ELLEN EMMERENTZE JERVELL been awaiting his first strate-
gic moves at Adidas.
Adidas AG’s new boss aims For Mr. Rorsted, the answer
to raise the company’s game in to Reebok’s sluggishness isn’t
the U.S. by streamlining its to ditch the brand, which some
struggling Reebok brand. investors have called for, but
Kasper Rorsted, who be- to make a streamlined Reebok
came Adidas’s chief executive more independent of Adidas.
in October, said Thursday he The Reebok overhaul would
planned to create a global generate a one-time cost of
team dedicated to running a about €30 million, Adidas said
leaner Reebok to lessen its in reporting third-quarter
drag on the German sports- earnings.
PARIS—Franco-Dutch airline
operator Air France-KLM is
rolling out a new medium-haul
and long-haul budget airline
that is aimed at serving cities
in the U.S. and Asia, its latest
maneuver to take on low-cost
rivals and Middle Eastern carri-
ers.
The new airline, set to start
flying on routes to Asia in win-
ter 2017, would take over some
of the least profitable Air

PHILIPPE WOJAZER/REUTERS
wear company’s results. Net profit rose 24% to €386 France services and will oper-
Adidas earlier posted robust million for the three months ate them with staff on lower
third-quarter results, helped ended in September from €311 salaries, the company said on
by double-digit sales increases million a year earlier. Adjusted Thursday. While the new airline
in its performance business for currency effects, sales rose would focus on flights to Asia
and at urban-wear units Adi- 17% to €5.4 billion. initially, it could later fly across
das Originals and Neo, though Investor confidence in Adi- the Atlantic, the carrier said.
a relatively downbeat outlook das has rested on the improv- The move comes as airlines The new medium-haul and long-haul budget airline is aimed at serving cities in the U.S. and Asia.
sent its share price sharply ing performance of its name- on both sides of the Atlantic
lower. sake brand in the U.S. The search for ways to fight back erating cheap flights to North protests by employees turned prove efficiency and cut costs
The stock closed down 6.3% company raised its financial against discount carriers. America from Europe, includ- violent, with executives fleeing without narrowing the gap in
after Mr. Rorsted said Adidas outlook four times this year, In Europe, the competition ing from France to destina- protesters who ripped the shirt competitiveness with its most
wouldn’t repeat 2016’s growth and recently surpassed rival is especially cutthroat, with tions such as New York and off one manager. important European rivals.
next year, with management’s Under Armour Inc. in quarterly fast-growing Ryanair Hold- Los Angeles. Canada’s WestJet Service on the new line Air France management is
focus on improving operating North American sales. ings PLC and other discount Airlines Ltd. and Iceland’s would be less lavish than on counting on the new airline to
profitability. “The great momentum airlines pushing aggressively WOW air also offer discount board Air France planes, but help it increase the number of
In the Reebok revamp, Mr. across all major markets into the traditional turf of the trans-Atlantic flights. won’t be as austere as on dis- passengers it flies to 100 mil-
Rorsted said Rebook outlets shows the strength of our continent’s legacy carriers. Air France is playing catch- count carriers, the company lion a year by 2020 from
would be among regional strategy,” Mr. Rorsted said. Several big carriers, includ- up with Lufthansa, which has said. around 91 million today, to
stores Adidas plans to sell in According to research by re- ing British Airways parent In- set up a discount long-haul Air France-KLM has lost generate revenue of 28 billion
the U.S. even as it plans to tail trackers NPD Group, Adi- ternational Consolidated Air- business within its low-fare ground over many years to euros ($31.14 billion), up from
open a new Reebok headquar- das’s share of the U.S. foot- lines Group SA, Deutsche Eurowings unit; Air Canada’s budget carriers within Europe €26.1 billion in 2015.
ters in Boston. “It is now time wear market rose to 7.1% in the Lufthansa AG and Air France- Rouge unit also has begun such as Ryanair and U.K.- Earlier Thursday, Air
to get back to the gym and re- first nine months of 2016. KLM, have already rolled out trans-Atlantic service. based easyJet PLC while it France said net profit rose in
double our efforts,” he said. In the third quarter, Adi- their own short-haul budget Air France said it would has faced rising competition the third quarter on lower fuel
Reebok, the fitness foot- das’s North American sales subsidiaries to compete. Air transfer some of its pilots to from carriers such as Dubai- costs and cost-cutting which
wear company that Adidas rose 20% to €927 million. France is now targeting typi- the new unit. They would fly based Emirates Airline and more than offset losses from
bought for €3 billion ($3.33 Adidas brand revenue rose cally more profitable medium- more hours for the same pay. Qatar Airways on long-haul strikes and diminished travel
billion) in 2006 to boost U.S. 20% in the quarter, boosted by and long-haul business with a The new airline would re- routes in the relatively lucra- to France after terrorist at-
sales, hasn’t grown at all in robust performance product lower-cost offering of its own. cruit new flight attendants, tive Asian market. tacks in the past year. Air
North America in the past and streetwear sales. If Air France eventually with fewer benefits than Air The carrier, which operates France-KLM, Europe’s largest
three years, Mr. Rorsted said. Adidas confirmed its out- turns some of its trans-Atlan- France crew currently enjoy. the low-cost, short-haul Hop airline group by traffic, said
He came to Adidas after look for 2016. It expects full- tic flights into discount ser- That is all likely to set up and Transavia brands within Eu- net profit rose to €544 million
eight years running German year sales to rise by a high- vices, it will be flying into a the airline for new tensions rope, in addition to its flagship in the three months to end-
consumer-products company teens percentage rate, with net crowded market. with labor unions, exacerbating network carriers Air France and September though revenue
Henkel AG, where he led a profit reaching between €975 Discount carrier Norwegian tensions that have embroiled KLM, has undertaken several re- contracted 5.1% during the pe-
turnaround. Investors have million and €1 billion. Air Shuttle ASA is already op- the airline for years. Last year, structuring programs to im- riod to €6.94 billion.

Business American Axle to Buy

Watch Rival for $1.6 Billion
BY JOHN D. STOLL
American Axle & Manufac-
LENOVO turing Holdings Inc., a Detroit
auto-parts maker that spun
Office-Building Sale out of General Motors more
Helps Profit Edge Up than two decades ago, contin-
Lenovo Group Ltd. swung to ued its diversification drive by
a slim profit in its fiscal second agreeing to buy Metaldyne
quarter, helped by the sale of an Performance Group Inc. for
office building, but the electron- $1.6 billion.
ics maker faced further strug- American Axle, which
gles in its smartphone venture. makes several components
TONY GENTILE/REUTERS
cludes the assumption of $1.7
billion in Metaldyne debt.
The diversification comes
with risks. It expands business
in a sector that in the past
felled far bigger companies
facing heavy financial burdens
when automotive production
collapsed. Moody’s Investors
Service said on Thursday it
put the company’s debt rating
under review for a possible
downgrade.

Sales fell from the year-ear- used in the undercarriage or American Axle has taken a
lier period in each of Lenovo’s mechanical functions of vehi- conservative approach to le-
three main businesses: personal cles, has remained dependent verage in recent years and the
computers, mobile devices and on GM for about two-thirds of company plans to employ that
data centers. its sales. Acquiring Metaldyne, same degree of prudence as it
“The market is not as good which makes parts for engines addresses its additional debt
as we expected,” Chief Executive Luxury-goods company Hermès said its sales increased 7% for the year’s first nine months. and transmissions, would give load, Mr. Dauch said.
Yang Yuanqing said on an inves- it a bigger footprint in Europe The deal comes amid big
tor call Thursday. one-time gain from the sale of ($4.11 billion), growing across have led to hundreds of millions and wider array of customers, profits for U.S. auto suppliers
Lenovo is the world’s largest an office building in Beijing that markets, and accelerated during of dollars in lost production. American Axle Chief Executive as North American vehicle pro-
PC maker by shipments, but it it will lease back. the third quarter, growing 10% The provisional agreement is David Dauch said in an inter- duction hits record highs and
has been trying to shift its busi- Second-quarter revenue fell year to year. subject to approval by union view on Thursday. global car makers continue to
ness toward smartphones and 7.6% to $11.2 billion. Earlier this year, Hermès—one members at a vote scheduled The combined company invest heavily in technology
servers, sectors with greater —Eva Dou of the most exclusive brands in for Monday. would have $7 billion in annual that improves fuel economy
growth potential. It acquired the sector—increased production The workers have staged par- revenue, vaulting it closer in and safety, such as with auton-
smartphone maker Motorola HERMÈS of its handbags. tial strikes since September, size to some of the bigger U.S.- omous driving features. The
Mobility and an International —Manuela Mesco leading to lost production of based auto-parts suppliers, sector was hit hard during the
Business Machines Corp. server
Leather Goods Give more than 60,000 cars, although such as Visteon Corp. and financial crisis, with many
unit in 2014, but has struggled 7% Boost to Sales KIA MOTORS they usually make up some of Cummins Inc. suppliers restructuring under
to make them competitive. French luxury-goods house the losses with extra work later American Axle agreed to bankruptcy protection, being
Lenovo said its net income Hermès International posted 7%
Auto Maker, Union in the year. pay $1.6 billion in cash and acquired or going out of busi-
totaled $157 million for the sales growth for the first nine Reach Tentative Pact Hyundai Motor Co., Kia’s par- stock to Metaldyne stockhold- ness.
quarter ended Sept. 30, rebound- months of the year as the com- Kia Motors Corp. and its ent, has also incurred significant ers, an about 52% premium to American Axle shares fell
ing from a net loss of $714 mil- pany increased production of union have reached a tentative losses from its worst strikes to the Southfield, Mich., com- about 18% to $13.68 apiece,
lion a year earlier. The company leather goods. wage deal for the year, putting date over the summer. pany’s Wednesday closing while Metaldyne’s gained
benefited from a $206 million Total sales rose to €3.7 billion an end to partial strikes that —In-Soo Nam share price. The deal also in- about 35% to $19.30.
P2GW309000-0-B00500-1--------AL
THE WALL STREET JOURNAL.
Europe Banks Get Hong Kong Scrutiny
HONG KONG—Hong Kong’s
securities regulator, boosting
oversight of the world’s top
market for initial public offer-
ings, is cracking down on
Western investment banks
over some listings.
By Alec Macfarlane,
Kane Wu
and Julie Steinberg
According to people famil-
iar with the matter, the list-
ings include those of China
Forestry Holdings Co., under-
written by UBS Group AG and
Standard Chartered PLC, and
China Metal Recycling (Hold-
ings) Ltd., underwritten by
UBS. The two companies,
whose 2009 IPOs raised a
combined total of more than
US$400 million, were put in
liquidation after regulators
found evidence of fraudulent
accounting.
Both banks have said Hong
Suisse Off
6.6% After
Earnings
BY JOHN LETZING
ZURICH—Credit Suisse
Group AG reported a surprise
profit for the third quarter, as
it curbed expenses and sold a
historic building, though in-
vestors were discouraged by
challenges the Swiss bank con-
tinues to face amid its con-
tinuing overhaul.
The Zurich-based bank said
Thursday its net profit in the
quarter was 41 million Swiss
francs ($42.1 million), com-
pared with 779 million francs
in the same period last year.
Net revenue fell 10%, to 5.4
billion francs. Analysts had ex-
pected a net loss of 174 million
francs and revenue of 5.1 bil-
lion francs.
Investors, however, sent the
bank’s shares down 6.6%. Mor-
gan Stanley analysts zeroed in
on Credit Suisse’s 0.4% return
on tangible equity in the quar-
ter. The profitability measure
suggests the bank still has a
“long way to go,” they wrote
in a research note.
Daniel Regli, a MainFirst
analyst, noted that Credit Su-
isse’s results follow a series of
upbeat reports from rivals,
which raised the bar. “Most of
the banks were able to sur-
prise positively, so I think the
market already assumed
Credit Suisse would follow,” he
said. In particular, Credit Su-
isse’s investment-bank trading
result likely fell short of ex-
pectations, the analyst added.
Credit Suisse Chief Execu-
tive Tidjane Thiam had his
own explanation for the stock
drop: Investors who have
bought in as the shares gained
value in recent months are us-
ing the quarterly results as a
reason to sell. “This is profit-
taking,” he said. The bank’s re-
sults, Mr. Thiam said, were
“undeniably good.”
Credit Suisse began a broad
strategic shift under Mr.
Thiam to limit investment
banking and focus more on its
wealth-management
nesses roughly one year ago,
busi-
just as markets were souring
and clients began to hold back
on investments and trades
that can generate fees for the
bank. Meanwhile, low and neg-
ative interest rates have con-
tinued to curb revenue growth
for the banking industry more
generally, forcing lenders to
rely on cost cuts rather than
sales increases.
Credit Suisse said Thursday
it will likely suffer from mar-
kets that are undercut by geo-
political and economic uncer-
tainty for “the next several
quarters.”
Total operating expenses
rose 2% in the third quarter
compared with the same pe-
riod last year, Credit Suisse
said, as the bank incurred
costs tied to its restructuring.
On an adjusted basis, its oper-
ating-cost base fell 2%. Gen-
eral and administrative ex-
penses fell 6%, the bank said,
while commission expenses
declined 23%.
Credit Suisse said it has
now cut 5,400 jobs, including
contractors, of the 6,000
planned as part of its restruc-
turing. Overall head count in
the quarter fell 1% compared
with the same period last year,
the bank said.
FINANCE & MARKETS
Kong’s Securities and Futures
Commission plans action
against them over IPOs.
Spokesmen for the banks de-
clined to comment beyond
their statements. The regula-
tor confirmed the investiga-
tions but declined to comment
further. Standard Chartered
scrapped its equities business
last year.
Bankers and lawyers in the
Asian financial hub say more
investigations and regulatory
actions could be on the way.
Hong Kong is the world’s
No. 1 market for IPOs this
year, with $21.2 billion raised
to top New York. IPOs of Chi-
nese companies seeking global
investors have long been the
lifeblood of the city’s bustling
financial scene.
While Hong Kong’s securi-
ties regulator in the past has
taken on cases against local
brokers and mainland Chinese
firms in Hong Kong, it has
Rules Curtail German Mortgage Lending
BY TODD BUELL
AND MADELEINE NISSEN
FRANKFURT—A new rule
on mortgage lending is being
credited with a sharp decline
in mortgages in Germany,
sparking debate about the op-
timal amount of bank regula-
tion eight years after the fi-
nancial crisis.
The rule, called the Mort-
gage Credit Directive and ad-
opted in Germany in March,
directs banks not to base the
decision to grant a mortgage
on expected future increases
in the value of the property.
Banks say the law focuses
excessively on borrowers’ abil-
ity to repay a loan. Supporters
maintain the rule helps con-
sumers by helping them avoid
too much debt.
German savings banks’
mortgage lending fell 10% in
the first eight months of this
year versus a year earlier, an
association of savings banks
said recently. Mortgage lend-
ing dropped 13% in annual
terms in April, the month after
the law took effect, data from
the Bundesbank showed. It fell
by 20% in July before growing
slightly in August.
For banks in Germany, Eu-
rope’s biggest economy, mort-
gages are an important source
of income. They need it be-
cause record-low interest rates
and intense competition in a
crowded financial-services
market are putting pressure
on profits.
German banks are now
pushing parliament to revise
the German law. A proposal in
Germany’s upper house from
three federal states is being
discussed in committee.
“The directive presumes
that banks are evil and trying
to rip people off,” said Oliver
von Schweinitz, a banking law-
yer with Grützmacher Gravert
Viegener in Hamburg. The reg-
ulations impose unnecessary
paperwork and make prospec-
tive borrowers afraid to bor-
OPEC Chides Critics
Of Oil-Output Deal
BY SELINA WILLIAMS
LONDON—The Organization
of the Petroleum Exporting
Countries expressed confi-
dence on Thursday that it
would complete an agreement
to curb output later this
month and dismissed critics
who questioned its influence.
The unusual statement from
the 14-member OPEC comes as
oil prices have declined almost
8% since last weekend, when a
series of meetings at the or-
ganization’s headquarters
ended in a deadlock.
The group pledged at a Sep-
tember meeting in Algiers to
cut production by as much as
2%, but left the details of
which countries will trim and
by how much until its Nov. 30
gathering of oil ministers.
“We remain deeply optimis-
tic about the possibility that
the Algiers agreement will be
complemented by precise, de-
cisive action among all pro-
ducers,” said the commentary
section of the group’s monthly
magazine, “OPEC Bulletin.”
OPEC’s statement came a
day after the U.S. government
Hong Kong on Top
Hong Kong has been the world’s top IPO market a number of times
and claims the No. 1 spot again so far this year.
Ranking of major exchanges by IPO
1 Hong Kong
5 rules implemented in 2013,
10
15
20
25
2009 2010 2011 2012
*As of Nov. 3 Note: There were no IPOs in Shanghai in 2013.
Source: Dealogic
rarely investigated the IPO
work of big Western invest-
ment banks. However, in re-
cent years, investors have
been stung by high-profile
failures of recently listed firms
Residential property advertisements are displayed in the window of a real-estate agency in Braunschweig, Germany.
row, Deutsche Bank AG man-
agement board member
Christian Sewing said at an
event in Berlin earlier this
year.
Others disagree. Tighter
consumer protection through
regulation of European mort-
gage markets “is desperately
needed” to combat the ex-
cesses that led to the crisis,
said Sven Giegold, a member
of the European Parliament
from Germany’s Green Party.
European authorities
agreed to the rules in Febru-
ary 2014, and Germany had
until March of this year to
make them national law. Euro-
pean rules give member states
the responsibility of making
said U.S. oil held in storage
last week rose the most in
more than 30 years, suggest-
ing the oversupply that far ex-
ceeds demand wouldn’t disap-
pear soon.
Oil-industry traders and an-
alysts have openly mocked
OPEC’s ability to follow
through on its deal in Algiers.
Brent crude, the international
benchmark for oil sold inter-
nationally, closed as high as
$53.14 in the weeks after the
Algiers agreement, but it has
fallen in recent days. It lost 51
cents, or 1.1%, on Thursday to
$46.35 a barrel on ICE Futures
Europe. U.S. crude futures fell
68 cents, or 1.5% to $44.66 a
barrel on the New York Mer-
cantile Exchange.
Analysts have cut forecasts
for oil prices, predicting they
will rise in the next year but
stay below $60 a year in 2017,
according to a survey of 14 in-
vestment banks by The Wall
Street Journal. Last summer,
many of the same banks were
predicting oil prices would
rise to more than $70 a barrel
this year—a level they now say
won’t be reached until 2018.
New York
Shanghai
Nasdaq
London
2013 2014 2015 2016*
THE WALL STREET JOURNAL.
that carried the imprimatur of
Western underwriters.
Hong Kong’s securities reg-
ulator “has become more will-
ing to take action against the
big-name banks than they
the directive national law.
The stricter mortgage rules
come against a backdrop of
strong German demand for
housing and weak financial
performance among German
banks.
Recent data from Ger-
many’s IVD real-estate associ-
ation show standard housing
is about 6% more expensive
this year than it was last year
through the end of the third
quarter, after a gain of about
5% last year, with stronger
gains in big cities. German sal-
aries also are increasing and
historically low interest rates
make loans substantially
cheaper, IVD said.
Ralph Henger, a real-estate
Looking Ahead at Oil Prices
Where investment banks in October's survey see the price
of U.S. crude-oil futures in the next few quarters
$110
100
90
80
70
60
50
40
30
20
Nymex crude oil, price per barrel*
10 *Through 9:15 a.m. Thursday in New York
0 Morgan Stanley
2014 2015
Source: WSJ Market Data Group (oil price); the companies (forecasts)
In a note on Wednesday,
Barclay’s analysts said OPEC
was partly to blame for the fall
in prices because of its record
production. “Neither OPEC’s
president nor its member
countries have the ability to
turn around the market-senti-
ment ship in the next three
weeks,” Barclays said.
Scott Sheffield, the retiring
chief executive of Pioneer Nat-
Friday - Sunday, November 4 - 6, 2016 | B5
were in the past,” said Robert
Cleaver, a partner at law firm
Linklaters LLP. “They have to
make an example of a few peo-
ple if they want to be effec-
tive.”
He said the new approach is
a product of underwriting
which could make investment
banks and bankers criminally
responsible for false informa-
tion in the prospectuses of
companies they take public—
raising the bar for work on
such deals. The regulator has
bulked up enforcement staff.
Investment banks them-
selves are stepping up their
efforts, as well, hiring due-dili-
gence firms to verify company
claims and building out com-
pliance teams.
China Forestry Holdings, a
forestry-plantation operator in
China, became embroiled in
scandal when its auditor found
accounting irregularities and
expert at the Cologne Institute
for Economic Research, said
the law doesn’t endanger
mortgage lending and that
cooling Germany’s property
market might prevent finan-
cially weak borrowers from
overleveraging.
German lending standards
are historically stricter than in
the U.S. or the U.K. and the
country didn’t suffer from the
debilitating collapse in real-es-
tate prices seen in Spain, Ire-
land, Britain or the U.S. nearly
10 years ago.
The rule “could pose a par-
ticular problem for older bor-
rowers, whose income streams
might be lower after retiring,
therefore limiting the ability
4Q 1Q
2016 2017
ural Resources Co., questioned
whether OPEC’s members will
reach a deal on production and
then stick to it.
“I give OPEC a 40% chance
of coming to an agreement,”
Mr. Sheffield said Wednesday
while talking to analysts dur-
ing his last quarterly earnings
call as Pioneer’s CEO. “If OPEC
fails in this agreement, we
could easily see another year
its former chief executive was
arrested in 2011 by Chinese
authorities for alleged embez-
zlement.
The company’s Hong Kong
liquidators are now suing
Standard Chartered, UBS and
other firms that worked on
the company’s IPO.
China Metal Recycling—the
country’s self-proclaimed big-
gest scrap-metal recycler by
revenue—fell under the scru-
tiny of short-seller Glaucus
Research Group California
LLC, which said in a 2013 re-
port that it had inflated reve-
nue. After an investigation,
Hong Kong’s securities regula-
tor found that the company’s
IPO prospectus had “over-
stated its financial position”
and sought its liquidation.
China Forestry is in the
process of being delisted,
while China Metal Recycling
was delisted in February, ac-
cording to exchange filings.
KRISZTIAN BOCSI/BLOOMBERG NEWS
to pay back the loan,” said
HSBC economist Stefan
Schilbe.
The association of coopera-
tive banks in the western Ger-
man city of Münster said that
because of the new law, a 64-
year-old woman was declined
a €35,000 ($38,850) loan to
adapt her bathroom for a
physical disability.
Banks say Germany applied
the EU directive more strictly
than it was intended. A
spokesman for Germany’s jus-
tice ministry disagrees, saying
banks are allowed to consider
an increase in the value of a
purchased property as long as
that isn’t the main reason for
approving a loan.
Standard
Chartered
RBC
Bank of America
Merrill Lynch
Barclays
J.P. Morgan
Citigroup
Société Générale
UBS
Deutsche Bank
Commerzbank
BNP Paribas
Credit Suisse
ING Bank
2Q 3Q 4Q
THE WALL STREET JOURNAL.
in the low $40s.”
OPEC warned “industry ob-
servers” against being “too
quick to judge or criticize the
organization or its members.”
“Over the years, we have
seen how wildly inaccurate
their predictions have been,” it
said. “What many of them
have failed to recognize is that
OPEC’s great strength is its
global reach and its diversity.”
P2GW309000-0-B00600-1--------AL

B6 | Friday - Sunday, November 4 - 6, 2016 THE WALL STREET JOURNAL.

MARKETS DIGEST
Nikkei 225 Index STOXX 600 Index S&P 500 Index Data as of 4 p.m. New York time
Last Year ago
17134.68 Market Closed Year-to-date t 9.98% 331.56 s 0.01, or 0.003% Year-to-date t 9.36% 2088.66 t 9.28, or 0.44% Trailing P/E ratio * 24.31 22.65
High, low, open and close for each 52-wk high/low 20012.40 14952.02 High, low, open and close for each 52-wk high/low 385.43 303.58 High, low, open and close for each P/E estimate * 18.02 17.89
trading day of the past three months. All-time high 38915.87 12/29/89 trading day of the past three months. All-time high 414.06 4/15/15 trading day of the past three months. Dividend yield 2.16 2.09
All-time high: 2190.15, 08/15/16

* P/E data based on as-reported earnings from Birinyi Associates Inc.

17250 355 2190

17000 350 2170

16750 345 2150

16500 340 2130

Session high
DOWN UP 16250 335 65-day moving average 2110
65-day moving average
t

Session open Close

65-day moving average Close Open
t

16000 330 2090

Bars measure the point change from session's open Session low
15750 325 2070
July Aug. Sept. Oct. Aug. Sept. Oct. Aug. Sept. Oct.

International Stock Indexes Data as of 4 p.m. New York time Global government bonds
Latest 52-Week Range YTD Latest, month-ago and year-ago yields and spreads over or under U.S. Treasurys on benchmark two-year
Region/Country Index Close NetChg % chg Low Close High % chg and 10-year government bonds around the world. Data as of 3 p.m. ET
World The Global Dow 2405.67 –7.94 –0.33 2033.03 • 2489.23 3.0 Country/ Spread Over Treasurys, in basis points Yield
MSCI EAFE 1654.58 –1.31 –0.08 1471.88 • 1956.39 –3.6 Coupon Maturity, in years Yield Latest Previous Month Ago Year ago Previous Month ago Year ago
MSCI EM USD 884.49 –5.72 –0.64 691.21 • 1044.05 11.4 3.250 Australia 2 1.641 83.1 82.8 76.3 106.4 1.650 1.556 1.834
4.750 10 2.310 49.7 55.2 29.2 48.3 2.356 1.918 2.695
Americas DJ Americas 504.42 –2.23 –0.44 433.38 • 529.32 3.5
1.250 Belgium 2 -146.2 -143.3 -0.640
-0.645 -145.4 -102.8 -0.640 -0.258
Brazil Sao Paulo Bovespa 62007.19 –1319.23 –2.08 37046.07 • 65291.06 43.0
1.000 10 0.411 -140.2 -142.2 -146.6 -133.7 0.382 0.160 0.876
Canada S&P/TSX Comp 14564.94 –29.78 –0.20 11531.22 • 14963.60 12.0
1.000 France 2 -0.594 -140.4 -142.1 -142.6 -101.6 -0.600 -0.633 -0.246
Mexico IPC All-Share 46712.54 –590.77 –1.25 39924.09 • 48956.06 8.7
0.250 10 0.469 -134.5 -135.9 -140.4 -127.5 0.446 0.221 0.938
Chile Santiago IPSA 3302.10 –16.41 –0.49 2730.24 • 3364.67 12.2
0.000 Germany 2 -0.626 -143.6 -145.4 -147.4 -107.5 -0.633 -0.681 -0.305
U.S. DJIA 17930.67 –28.97 –0.16 15450.56 • 18668.44 2.9
0.000 10 0.157 -165.6 -167.1 -171.6 -163.7 0.133 -0.091 0.575
Nasdaq Composite 5058.41 –47.16 –0.92 4209.76 • 5342.88 1.0
0.250 Italy 2 -0.009 -81.8 -81.4 -89.7 -64.3 0.007 -0.104 0.127
S&P 500 2088.66 –9.28 –0.44 1810.10 • 2193.81 2.2
1.600 10 1.637 -17.7 -20.7 -37.9 -65.8 1.598 1.247 1.555
CBOE Volatility 22.38 3.06 15.84 11.02 • 32.09 22.9
0.100 Japan 2 -0.252 -106.2 -107.4 -106.7 -76.1 -0.252 -0.273 0.009
EMEA Stoxx Europe 600 331.56 0.01 0.003 303.58 • 385.43 –9.4 0.100 10 -0.058 -187.2 -186.3 -169.5 -190.1 -0.058 -0.069 0.311
Stoxx Europe 50 2748.59 –5.54 –0.20 2556.96 • 3305.96 –11.3 4.000 Netherlands 2 -0.629 -143.8 -145.5 -145.3 -107.0 -0.633 -0.659 -0.300
Austria ATX 2469.20 40.20 1.66 1929.73 • 2515.09 3.0 0.500 10 0.279 -153.5 -155.3 -159.2 -146.7 0.252 0.033 0.746
Belgium Bel-20 3454.53 –2.49 –0.07 3117.61 • 3773.73 –6.6 4.450 Portugal 2 0.289 -52.1 -51.6 -40.8 -45.5 0.305 0.386 0.315
France CAC 40 4411.68 –2.99 –0.07 3892.46 • 5011.65 –4.9 2.875 10 3.245 143.1 142.5 174.0 35.3 3.229 3.366 2.565
Germany DAX 10325.88 –45.05 –0.43 8699.29 • 11430.87 –3.9 0.250 Spain 2 -0.199 -100.9 -100.0 -101.7 -72.8 -0.179 -0.223 0.042
Greece ATG 578.23 –3.33 –0.57 420.82 • 707.56 –8.4 1.300 10 1.239 -57.5 -60.7 -71.9 -48.2 1.198 0.907 1.731
Hungary BUX 29872.00 373.05 1.26 22054.97 • 30050.05 24.9 4.250 Sweden 2 -0.728 -153.7 -155.0 -146.5 -123.2 -0.729 -0.671 -0.462
Israel Tel Aviv 1387.60 –1.21 –0.09 1378.80 • 1588.75 –9.2 1.000 10 0.264 -154.9 -155.5 -145.0 -153.9 0.250 0.175 0.673
Italy FTSE MIB 16419.90 –54.62 –0.33 15017.42 • 22844.38 –23.3 1.250 U.K. 2 0.190 -61.9 -63.8 -70.0 -6.7 0.183 0.094 0.703
Netherlands AEX 442.31 –1.46 –0.33 378.53 • 474.87 0.1 2.000 10 1.098 -71.5 -73.7 -99.0 -23.1 1.068 0.635 1.982
Poland WIG 47899.61 0.51 0.00 41747.01 • 50504.31 3.1 0.750 U.S. 2 0.810 ... ... ... ... 0.821 0.794 0.770
Russia RTS Index 971.20 –1.89 –0.19 607.14 • 1018.98 28.3 1.500 10 1.813 ... ... ... ... 1.805 1.626 2.213
Spain IBEX 35 8879.90 6.50 0.07 7579.80 • 10552.70 –7.0
Sweden SX All Share 502.02 0.71 0.14 432.78 • 530.82 –0.6 Commodities Prices of futures contracts with the most open interest 3:30 p.m. New York time
Switzerland Swiss Market 7640.94 –59.47 –0.77 7425.05 • 9080.56 –13.3 EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; ICE-US: ICE Futures U.S.; MDEX: Bursa Malaysia
South Africa Johannesburg All Share 50239.27 –145.60 –0.29 45975.78 • 54704.22 –0.9 Derivatives Berhad; TCE: Tokyo Commodity Exchange; COMEX: Commodity Exchange; LME: London Metal Exchange;
NYMEX: New York Mercantile Exchange; ICE-EU: ICE Futures Europe. *Data as of 11/2/2016
Turkey BIST 100 76681.37 –490.22 –0.64 68230.47 • 86931.34 6.9
One-Day Change Year Year
U.K. FTSE 100 6790.51 –54.91 –0.80 5499.51 • 7129.83 8.8 Commodity Exchange Last price Net Percentage high low
Corn (cents/bu.) CBOT 348.25 2.00 0.58% 449.00 314.75
Asia-Pacific DJ Asia-Pacific TSM 1456.48 –0.18 –0.01 1188.42 • 1499.93 4.8
Soybeans (cents/bu.) CBOT 989.75 3.25 0.33 1,182.00 873.75
Australia S&P/ASX 200 5225.60 –3.40 –0.07 4765.30 • 5587.40 –1.3
Wheat (cents/bu.) CBOT 412.75 -5.00 -1.20% 551.50 386.75
China Shanghai Composite 3128.94 26.20 0.84 2655.66 • 3651.77 –11.6
Live cattle (cents/lb.) CME 104.350 -1.025 -0.97 125.500 96.100
Hong Kong Hang Seng 22683.51 –126.99 –0.56 18319.58 • 24099.70 3.5
Cocoa ($/ton) ICE-US 2,626 -6 -0.23 3,186 2,589
India S&P BSE Sensex 27430.28 –96.94 –0.35 22951.83 • 29045.28 5.0
Coffee (cents/lb.) ICE-US 165.80 2.90 1.78 166.90 119.40
Japan Nikkei Stock Avg 17134.68 … Closed 14952.02 • 20012.40 –10.0
Sugar (cents/lb.) ICE-US 21.48 -0.22 -1.01 24.10 13.48
Singapore Straits Times 2802.08 –5.06 –0.18 2532.70 • 3023.65 –2.8
Cotton (cents/lb.) ICE-US 68.19 -0.41 -0.60 77.98 54.19
South Korea Kospi 1983.80 4.86 0.25 1835.28 • 2068.72 1.1 Robusta coffee ($/ton) ICE-EU 2166.00 2.00 0.09 2,191.00 1,451.00
Taiwan Weighted 9067.27 –71.77 –0.79 7664.01 • 9385.65 8.7
Copper ($/lb.) COMEX 2.2425 0.0120 0.54 2.3290 1.9710
Source: SIX Financial Information;WSJ Market Data Group Gold ($/troy oz.) COMEX 1304.30 -3.90 -0.30 1,384.40 1,066.00
Silver ($/troy oz.) COMEX 18.340 -0.353 -1.89 21.250 13.865
Currencies London close on Nov. 3 Aluminum ($/mt)* LME 1,710.50 -23.50 -1.36 1,734.00 1,451.50
Tin ($/mt)* LME 20,750.00 -40.00 -0.19 20,790.00 13,225.00
Yen, euro vs. dollar; dollar vs. major U.S. trading partners US$vs,
Thu YTDchg Copper ($/mt)* LME 4,889.00 11.00 0.23 5,070.50 4,320.50
Country/currency in US$ per US$ (%) Lead ($/mt)* LME 2,065.00 -2.00 -0.10 2,106.00 1,598.00
20%
Europe Zinc ($/mt)* LME 2,432.00 -18.50 -0.75 2,450.50 1,467.00
Yen Bulgaria lev 0.5670 1.7638 –2.0 Nickel ($/mt)* LME 10,400.00 -85.00 -0.81 10,950.00 7,750.00
10
s
Croatia kuna 0.1476 6.773 –3.4 Rubber (Y.01/ton) TCE 178.00 ... Closed n.a. n.a.
Euro
s
Euro zone euro 1.1096 0.9013 –2.1
0 Palm oil (MYR/mt) MDEX 2774.00 16.00 0.58 2,828.00 2,189.00
Czech Rep. koruna-b 0.0411 24.355 –2.1
Denmark krone 0.1491 6.7059 –2.4 Crude oil ($/bbl.) NYMEX 44.62 -0.72 -1.59 53.62 34.06
–10 s WSJ Dollar index
Hungary forint 0.003611 276.90 –4.7 NY Harbor ULSD ($/gal.) NYMEX 1.4551 -0.0114 -0.78 1.6400 1.0459
Iceland krona 0.009000 111.11 –14.6 RBOB gasoline ($/gal.) NYMEX 1.4199 -0.0280 1.6351 0.9715
–20 -1.93
Norway krone 0.1223 8.1775 –7.5
Poland zloty
Natural gas ($/mmBtu) NYMEX 2.947 -0.031 -1.04 3.6750 2.5000
2015 2016 0.2563 3.9010 –0.6
Russia ruble-d 0.01569 63.717 –11.4 Brent crude ($/bbl.) ICE-EU 46.31 -0.55 -1.17 54.32 33.85
US$vs, US$vs,
YTDchg YTDchg Sweden krona 0.1119 8.9360 5.8 Gas oil ($/ton) ICE-EU 423.25 0.25 0.06 482.25 307.00
Thu Thu
Country/currency in US$ per US$ (%) Country/currency in US$ per US$ (%) Switzerland franc 1.0262 0.9745 –2.7
Turkey lira 0.3210 3.1148 6.8 Sources: SIX Financial Information; WSJ Market Data Group
Hong Kong dollar 0.1289 7.7559 0.1
Americas Ukraine hryvnia 0.0392 25.5305 6.4
Argentina peso-a 0.0662 15.1090 16.8
India rupee
Indonesia rupiah
0.0150
0.0000765
66.6705 0.7
13077 –5.5
U.K. pound 1.2453 0.8030 18.3 Cross rates London close on Nov 3
Brazil real 0.3088 3.2386 –18.2
Japan yen 0.009701 103.08 –14.3 Middle East/Africa
Canada dollar 0.7467 1.3392 –3.2 USD GBP CHF JPY HKD EUR CDN AUD
Kazakhstan tenge 0.002953 338.59 –0.05 Bahrain dinar 2.6525 0.3770 –0.03
Chile peso 0.001535 651.50 –8.1 Australia 1.3024 1.6218 1.3364 0.0126 0.1679 1.4449 0.9725 ...
Macau pataca 0.1251 7.9905 –0.2 Egypt pound-a 0.0726 13.7735 75.9
Colombia peso 0.0003264 3064.00 –3.5 Canada 1.3392 1.6673 1.3738 0.0130 0.1726 1.4854 ... 1.0279
Malaysia ringgit-c 0.2383 4.1958 –2.5 Israel shekel 0.2623 3.8126 –2.1
Ecuador US dollar-f 1 1 unch
New Zealand dollar 0.7319 1.3663 –6.6 Kuwait dinar 3.3072 0.3024 –0.4 Euro 0.9013 1.1224 0.9249 0.0087 0.1162 ... 0.6731 0.6921
Mexico peso-a 0.0520 19.2401 11.9
Pakistan rupee 0.0095 104.800 –0.1 Oman sul rial 2.5976 0.3850 0.01 Hong Kong 7.7559 9.6576 7.9580 0.0752 ... 8.6055 5.7925 5.9549
Peru sol 0.2961 3.3775 –1.1
Philippines peso 0.0207 48.385 3.3 Qatar rial 0.2747 3.641 –0.04 Japan 103.0800 128.3500 105.7700 ... 13.2910 114.3600 76.9900 79.1500
Uruguay peso-e 0.0355 28.180 –5.8
Singapore dollar 0.7222 1.3846 –2.4 Saudi Arabia riyal 0.2666 3.7506 –0.1 Switzerland 0.9745 1.2135 ... 0.0095 0.1257 1.0813 0.7279 0.7482
Venezuela bolivar 0.100050 10.00 58.5
South Korea won 0.0008738 1144.47 –2.7 South Africa rand 0.0741 13.4872 –12.9
U.K. 0.8030 ... 0.8241 0.0078 0.1035 0.8912 0.5997 0.6167
Asia-Pacific Sri Lanka rupee 0.0067395 148.38 2.9 Close Net Chg % Chg YTD % Chg
Australia dollar Taiwan dollar 0.03174 31.503 –4.3 U.S. ... 1.2453 1.0262 0.0097 0.1289 1.1096 0.7467 0.7678
0.7678 1.3024 –5.1 WSJ Dollar Index 87.71 –0.18 –0.21 –2.74
China yuan 0.1478 6.7654 4.2 Thailand baht 0.02860 34.960 –3.0 Sources: Tullett Prebon, WSJ Market Data Group Source: Tullett Prebon

Key Rates Top Stock Listings 4 p.m. New York time

Latest 52 wks ago % YTD% % YTD% % YTD%
Libor Cur Stock Sym Last Chg Chg Cur Stock Sym Last Chg Chg Cur Stock Sym Last Chg Chg Asia Titans 50
One month 0.53256% 0.19475% 4609.00 2038.50 Last: 141.29 t 0.27, or 0.19% YTD s 3.7%
Three month 0.88094 0.34390 Asia Titans ¥
HK$
TakedaPharm
TencentHoldings
4502
0700 202.00
-2.12
-1.17
-24.01
32.29
£
€
RoyDtchShell A
SAP
RDSA
SAP 76.69
-0.78 33.58
-1.05 4.51
150
Six month 1.24711 0.57070 HK$ AIAGroup 1299 47.65 -0.63 2.25 ¥ TokioMarineHldg 8766 4098.00 -2.80 -13.03 € Sanofi SAN 72.29 0.61 -8.03 High
One year 1.56011 0.90065 ¥ AstellasPharma 4503 1544.50 ... -10.80 ¥ ToyotaMtr 7203 5938.00 -2.21 -20.70 € SchneiderElectric SU 59.57 -0.90 13.34 Close 145
Euro Libor AU$ AustNZBk ANZ 27.35 0.63 -2.08 AU$ Wesfarmers WES 40.78 1.07 -1.99 € Siemens SIE 101.10 -0.15 12.48 Low 140
One month -0.38029% -0.14071% AU$ BHP BHP 22.66 0.44 26.88 AU$ WestpacBanking WBC 29.87 -0.53 -11.00 CHF Syngenta SYNN 388.40 -0.79 -0.99
t
Three month -0.32286 -0.07857 HK$ BankofChina 3988 3.44 -0.29 -0.58 AU$ Woolworths WOW 22.99 -0.43 -6.16 € Telefonica TEF 9.01 -0.06 -11.99 50–day 135
Six month -0.21657 -0.00143 HK$ CKHutchison 0001 95.45 -0.42 -8.57 € Total FP 42.32 -0.19 5.66 moving average 130
One year -0.07829 0.08500 HK$ CNOOC 0883 9.82 -0.51 21.69 Stoxx 50 CHF UBSGroup UBSG 13.32 -0.97 -31.76
125
Euribor AU$ CSL CSL 98.20 0.73 -6.75 CHF ABB ABBN 19.96 0.05 11.14 € Unilever UNA 37.77 -0.61 -5.82
One month -0.37300% -0.12300% ¥ Canon 7751 2997.00 -0.79 -18.45 € ASMLHolding ASML 92.38 -1.47 11.91 £ Unilever ULVR 3355.00 -1.73 14.64 5 12 19 26 2 9 16 23 30 7 14 21 28
Three month -0.31300 -0.07100 ¥ CentralJapanRwy 9022 17680 -2.35 -18.15 € AXA CS 19.98 0.99 -20.83 € Vinci DG 63.64 -1.82 7.61 Aug. Sept. Oct.
Six month -0.21300 0.00100 HK$ ChinaConstructnBk 0939 5.60 -0.71 5.46 € AirLiquide AI 90.61 -0.97 -12.58 £ VodafoneGroup VOD 217.50 -0.46 -1.58
One year -0.07100 0.09800 HK$ ChinaLifeInsurance 2628 19.24 ... -23.35 € Allianz ALV 138.15 0.47 -15.53 CHF ZurichInsurance ZURN 252.40 -0.20 -2.32
Yen Libor HK$ ChinaMobile 0941 87.40 -0.40 -0.11 € AnheuserBuschInBev ABI 101.50 -1.69 -11.28
DJIA Stoxx 50
One month -0.04000% 0.04943% HK$ ChinaPetro&Chem 0386 5.62 -1.23 19.83 £ AstraZeneca AZN 4434.50 -2.01 -3.94
AU$ CmwlthBkAust CBA 71.61 -0.78 -16.27 $ AmericanExpress AXP 65.33 -0.18 -6.07 Last: 2748.59 t 5.54, or 0.20% YTD t 11.3%
Three month -0.04086 0.07786 € BASF BAS 77.21 -1.14 9.18
Six month 0.01229 0.12000 ¥ EastJapanRailway 9020 9056.00 -2.27 -20.91 € BNP Paribas BNP 51.51 1.48 -1.38 $ Apple AAPL 109.83 -1.58 4.34 2920
One year 0.11529 0.22543 ¥ Fanuc 6954 18720 -0.64 -11.20 £ BT Group BT.A 371.35 -0.23 -21.27 $ Boeing BA 140.08 -0.48 -3.12
¥ Hitachi 6501 547.80 -1.95 -20.78 € BancoBilVizAr BBVA 6.26 1.21 -5.30 $ Caterpillar CAT 81.27 0.20 19.59 2880
Offer Bid
TW$ Hon Hai Precisn 2317 81.70 -1.09 102.23 € BancoSantander SAN 4.36 1.04 -3.50 $ Chevron CVX 105.38 -0.01 17.14 2840
Eurodollars
¥ HondaMotor 7267 2973.50 -3.46 -23.95 £ Barclays BARC 185.30 1.79 -15.35 $ CiscoSystems CSCO 30.32 -0.23 11.66
One month 0.6000% 0.5000%
$ CocaCola KO 42.03
2800
Three month 0.8500 0.7500
KRW HyundaiMtr 005380 136500 -2.15 -8.39 € Bayer BAYN 88.75 -0.42 -23.36 -0.05 -2.16
HK$ Ind&Comml 1398 4.64 -0.22 -0.85 £ BP BP. 451.35 -1.30 27.50 $ Disney DIS 93.38 1.60 -11.13 2760
Six month 1.2000 1.1000
¥ JapanTobacco 2914 4023.00 -0.12 -10.02 £ BritishAmTob BATS 4567.00 -0.47 21.11 $ DuPont DD 68.51 0.22 2.87 2720
One year 1.5000 1.4000
¥ KDDI 9433 3085.00 -4.40 -2.19 € Daimler DAI 62.19 -0.40 -19.84 $ ExxonMobil XOM 83.66 0.25 7.33
Latest 52 wks ago ¥ Mitsubishi 8058 2349.00 0.13 15.83 $ GenElec GE 28.28 -0.74 -9.21 5 12 19 26 2 9 16 23 30 7 14 21 28
€ DeutscheTelekom DTE 14.46 -0.17 -12.46
Aug. Sept. Oct.
Prime rates ¥ MitsubishiElectric 6503 1435.00 -1.64 11.89 £ Diageo DGE 2070.50 -2.91 11.53 $ GoldmanSachs GS 176.28 -0.17 -2.19
U.S. 3.50% 3.25% ¥ MitsubishiUFJFin 8306 534.10 -2.36 -29.45 $ HomeDepot HD 120.21 -0.07 -9.10
€ ENI ENI 12.71 -0.78 -7.90
Canada 2.70 2.70 ¥ Mitsui 8031 1439.00 -0.93 -0.45 $ Intel INTC 33.92 -1.97 -1.54
£ GlaxoSmithKline GSK 1554.00 -2.14 13.18
Japan
Hong Kong
1.475
5.00
1.475
5.00
¥
¥
Mizuho Fin
NTTDoCoMo
8411
9437
173.70
2606.50
-2.20
-1.66
-28.67
4.93
£ HSBC Hldgs HSBA 597.40 -1.13 11.41 $
$
IBM
JPMorganChase
IBM
JPM
152.38
68.38
0.28 10.73
-0.44 3.56
Dow Jones Industrial Average P/E: 20
€ INGGroep INGA 11.83 2.29 16.61
Policy rates AU$ NatAustBnk NAB 27.53 0.11 -8.84 £ ImperialBrands IMB 3843.00 -1.64 7.15 $ JohnsJohns JNJ 115.04 0.16 12.00 Last: 17930.67 t 28.97, or 0.16% YTD s 2.9%
ECB 0.00% 0.05% ¥ NipponTeleg 9432 4638.00 -0.94 -4.09 € IntesaSanpaolo ISP 2.04 1.19 -34.07 $ McDonalds MCD 111.76 -0.56 -5.40
Britain 0.25 0.50 ¥ NissanMotor 7201 1042.50 -2.39 -18.52 $ Merck MRK 58.43 -0.70 10.62 18700
€ LVMHMoetHennessy MC 162.90 0.09 12.42
Switzerland 0.50 0.50 ¥ Panasonic 6752 1012.00 -1.36 -18.42 £ LloydsBankingGroup LLOY 56.03 1.60 -23.32
$ Microsoft MSFT 59.21 -0.37 6.72
$ NikeClB NKE 49.74 0.04 -20.42 18400
Australia 1.50 2.00 HK$ PingAnInsofChina 2318 40.65 -0.49 -5.24 € LOreal OR 161.60 ... 4.06
U.S. discount 1.00 0.75 $ RelianceIndsGDR RIGD 30.90 -0.32 0.98 £ NationalGrid NG. 1020.50 -0.73 8.85
$ Pfizer PFE 29.87 -2.49 -7.47 18100
Fed-funds target 0.25 0.00 KRW SamsungElectronics 005930 1616000 -1.64 28.25 CHF Nestle NESN 70.75 -0.98 -5.10
$ Procter&Gamble PG 86.61 -0.15 9.07
Call money 2.25 2.00 ¥ Seven&I Hldgs 3382 4343.00 -2.21 -21.75 $ 3M MMM 166.88 0.69 10.78 17800
CHF Novartis NOVN 68.95 -0.72 -20.56
¥ SoftBankGroup 9984 6349.00 -2.91 3.42 $ TravelersCos TRV 105.71 0.09 -6.34
Overnight repurchase rates DKK NovoNordiskB NOVO-B 236.80 -0.46 -40.79 17500
U.S. 0.49% 0.18% ¥ Sony 6758 3265.00 -2.16 8.76 $ UnitedTech UTX 101.05 -0.48 5.18
£ Prudential PRU 1341.50 0.86 -12.38
5 12 19 26 2 9 16 23 30 7 14 21 28
Euro zone n.a. n.a. ¥ Sumitomo Mitsui 8316 3551.00 -2.50 -22.90 $ UnitedHealthGroup UNH 137.87 -0.80 17.20
£ ReckittBenckiser RB. 7085.00 -1.79 12.80
Aug. Sept. Oct.
HK$ SunHngKaiPrp 0016 115.80 -1.28 23.52 $ VISAClA V 80.65 0.09 4.00
£ RioTinto RIO 2788.50 -1.47 40.87
Sources: WSJ Market Data Group, SIX TW$ TaiwanSemiMfg 2330 184.50 -0.81 29.02
$ Verizon VZ 46.87 -0.15 1.41 Note: Price-to-earnings ratios are for trailing 12 months
CHF RocheHldgctf ROG 222.70 -0.71 -19.43
Financial Information, Tullett $ WalMart WMT 69.63 0.26 13.59 Sources: WSJ Market Data Group; Birinyi Associates
P2GW309000-0-B00700-1--------AL
THE WALL STREET JOURNAL.
SocGen Rides Bond-Trade Wave
Earnings are higher
than expected despite
decline in revenue
from retail banking
BY NOEMIE BISSERBE
PARIS—French lender So-
ciété Générale SA said third-
quarter profit slipped 2%, but
earnings were better than ex-
pected, as a buoyant invest-
ment-banking business offset
a decline in revenue from re-
tail banking.
The Paris-based lender,
France’s third-largest listed
bank by assets, said net profit
was €1.1 billion ($1.2 billion)
for the three months through
September, above analysts’ ex-
pectations of €922 million, ac-
cording to the data provider
FactSet.
The decline in profit from a
year earlier was due to a €237
million accounting charge re-
lated to its debt. Revenue
dropped 6%, to €6.01 billion.
The stock rose 5.5%, to
€36.07, in Paris.
Société Générale’s results
reflect a rebound in bond trad-
ing that has boosted earnings
Wells Fargo Mortgage Practices Scrutinized
BY EMILY GLAZER
Wells Fargo & Co. is in
talks with a group of federal
and state prosecutors examin-
ing potential abuses related to
mortgages as it continues to
grapple with its sales-prac-
tices scandal.
The bank disclosed Thurs-
day that it is in discussions
with the Residential Mort-
gage-Backed Securities Work-
ing Group of the Financial
Fraud Enforcement Task
Force.
That group, which includes
the Justice Department, has
levied billions of dollars in
fines on other big U.S. banks,
including a $16.65 billion pay-
out from Bank of America
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The Paris-based bank’s earnings declined 2%, while revenue dropped 6% from year-ago levels.
of other European lenders, de-
spite persistently low interest
rates and sluggish economic
growth.
Its global-banking and in-
vestor-solution business—
which includes investment
banking, security services and
asset management—reported
Corp. and $13 billion from J.P.
Morgan Chase & Co.
A number of big, European
banks are also in negotiations
with the Justice Department
related to how mortgages
were bundled and sold. Ger-
many’s Deutsche Bank AG ini-
tially was told it would have to
pay $14 billion, The Wall
Street Journal has reported,
but it now appears any settle-
ment could be far lower.
A Justice Department
spokesman declined to com-
ment on the discussions.
The task force has raised
“potential theories of liability”
with Wells Fargo related to
certain mortgage practices, ac-
cording to the bank’s filing.
The bank had said in previous
hear an insightful talk from a stellar panel exploring rich themes from Peter Shafer’s notorious work.
NATIONAL THEATRE, LONDON SE1 9PX | NOVEMBER 8
FINANCE & MARKETS
a 42% jump in net profit, to
€469 million, in the third
quarter from the year-ago pe-
riod.
Equity trading was lifted
by an increase in demand for
structured products, espe-
cially in Asia, while net profit
from bond, currency and loan
filings that it was responding
to requests for information
from government agencies re-
lated to the origination, un-
derwriting and securitization
of certain mortgages.
The disclosure
comes as the bank
addresses a scandal
over sales tactics.
“Other financial institutions
have entered into settlements
with these agencies, the na-
ture of which related to the
specific activities of those fi-
nancial institutions, including
the imposition of significant
EXPERIENCE
Friday - Sunday, November 4 - 6, 2016 | B7
ers, Rosbank, it posted a net
profit of €7 million in the
third quarter, compared with a
loss of €18 million a year ear-
lier, as the Russian economy
started to recover from the ef-
fects of lower oil prices and
Western sanctions.
However, net profit at its
retail bank in France fell 15%,
to €353 million, hit by low in-
terest rates and loan renegoti-
ations.
The overall strength of the
earnings helped raise the
bank’s core Tier 1 ratio, which
compares top-quality capital
such as equity and retained
GONZALO FUENTES/REUTERS
earnings with risk-weighted
assets, rose to 11.4% in Sep-
tember from 11.1% in June.
The French lender said it
was still targeting a core Tier
1 ratio of 11.5% to 12% by 2019.
Société Générale said
Thursday that it expected Eu-
ropean regulators to set for
trading soared 42%. the French bank a minimum
Net profit for Société Gé- core Tier 1 ratio of 7.75% be-
nérale’s international retail- ginning Jan. 1 and a ratio of
banking and financial-services about 9.5% by Jan. 1, 2019.
division gained 31%, to €457 The bank’s leverage ratio,
million. which measures capital held
In Russia, where Société by the bank against its total
Générale owns one of the assets, was also up, to 4.1%
country’s largest private lend- from 3.9% in June.
financial penalties and reme- lion fine in September and a
dial actions,” Wells Fargo said raft of other federal and state
in its most recent filing. investigations, including one
Wells Fargo also confirmed by the Justice Department.
in its latest filing that the Se- The SEC sent requests for
curities and Exchange Com- information to the bank asking
mission is one of the federal for documents in recent
and state agencies probing weeks, following three Demo-
matters related to its sales cratic senators’ calls in late
practices. The San Francisco- September for the SEC to in-
based bank didn’t specify what vestigate whether Wells Fargo
the SEC is examining, but the misled investors and violated
disclosure follows a Journal whistleblower protections
article published on Wednes- while allegedly engaged in ille-
day that the agency is in the gal sales practices, the Journal
early stages of inquiries re- reported.
lated to whether Wells Fargo Wells Fargo has said it is
violated rules around investor working to restore trust with
disclosures and other matters customers, employees and
relating to its recent sales-tac- shareholders, and is in the
tics scandal. process of making refunds to
That resulted in a $185 mil- customers who were affected.
© 2016 Dow Jones & Co., Inc. All rights reserved. 6DJ4418
Finance
Watch
HSBC
Prosecutors Seek
A Trial in France
French prosecutors recom-
mended that HSBC Holdings
PLC should stand trial for alleg-
edly helping people evade taxes
in France, a person familiar with
the matter said.
If French judges decide to fol-
low prosecutors’ advice, HSBC
could stand trial in Paris in the
first half of next year. The
judges could dismiss the case.
Prosecutors began investigat-
ing HSBC in 2014 as part of a
widening probe into whether the
bank helped recruit customers in
France, possibly breaching laws
authorizing only French-regis-
tered lenders to sign up custom-
ers in the country. The investiga-
tion also examined whether the
bank was complicit in laundering
the proceeds of any tax evasion.
“We will continue to defend
ourselves vigorously,” a spokes-
woman for the British bank said.
—Noemie Bisserbe
DEUTSCHE BANK
Chinese Asset Sale
Takes a Step Ahead
Deutsche Bank AG’s capital
position is closer to getting an
anticipated boost from the long-
agreed sale of its minority stake
in Chinese lender Hua Xia.
The China Banking Regulatory
Commission recently approved
the transfer of Deutsche Bank’s
just-under-20% stake to Chinese
insurer PICC Property and Casu-
alty Co. Ltd., Hua Xia Bank said
Thursday. The approval is a cru-
cial step to completing a deal
Deutsche Bank announced in De-
cember 2015. Deutsche Bank
confirmed the news.
The deal—at roughly $4 bil-
lion—would free up capital and
add 0.4 to 0.5 percentage point
to Deutsche Bank’s common eq-
uity Tier 1 capital ratio. The ratio
was 11.1% as of Sept. 30, and
the bank hopes to raise it to at
least 12.5% by 2019.
—Jenny Strasburg
P2GW309000-0-B00800-1--------AL
B8 | Friday - Sunday, November 4 - 6, 2016
Email: heard@wsj.com
Adidas Boss
Talks Down
Prospects
Adidas’s new boss is play-
ing the long game.
Kasper Rorsted is under
pressure to boost margins
toward those of rival Nike.
But his first decisions at the
German sportswear company
are having the opposite ef-
fect. This seems to be part of
a wider tactic of talking
down prospects as investors
look beyond what he called
an “exceptional year.”
The company’s third-quar-
ter operating margin slipped
to 10.4%, from 10.6% in 2015.
That is despite the continu-
ing bull market for sports-
wear and the popularity of
Adidas sneakers in particu-
lar. Third-quarter sales were
17% higher than last year.
The familiar culprit is cur-
rency: Sports gear requires
cotton and synthetic materi-
als whose cost has been ris-
ing with the dollar. However,
Mr. Rorsted also has been
adding disproportionately to
overheads since his arrival in
October.
Notably, this follows new
measures taken to revive the
struggling Reebok label, in-
cluding reorganizing its U.S.
brand team and cutting the
number of factory outlets by
half. One-off costs will total
€30 million ($33 million), of
which one-third fell in the
third quarter. Mr. Rorsted
probably wouldn’t be taking
the hit if he planned to sell
the business, as some had
speculated.
Adidas shares are up 68%
over the year and fetch 28
times next year’s projected
earnings. We have argued for
some months that investors
needed to quell their giddy
expectations, and Mr. Ror-
sted seems sensibly intent
on doing just that. But he is
barely a month into the job.
The selloff probably has fur-
ther to run.
—Stephen Wilmot
Barred Brokers Still Give Advice
BY MICHAEL WURSTHORN
Matthew John Davis sells
annuities as an investment ad-
viser in California. Two years
ago, he was barred from the
brokerage industry after he
declined to respond to allega-
tions that he forged docu-
ments and falsified clients’ ac-
count values.
Mr. Davis is one of dozens
of former brokers who were
permanently or temporarily
barred by U.S. regulators from
working at a brokerage firm
but who have begun new ca-
reers as investment advisers.
The transition is legal, but the
nuances between the profes-
sions of broker and invest-
ment adviser can be lost on
mom-and-pop investors, ex-
perts say, potentially exposing
them to bad actors.
The former brokers, whose
alleged misdeeds run from vi-
olations of brokerage-industry
rules to fraud, can benefit
from the fragmented land-
scape that governs investment
advice in the U.S. Brokers are
overseen by an industry self-
regulator, the Financial Indus-
try Regulatory Authority, and
have to give only “suitable”
advice on investments. Invest-
ment advisers are overseen by
state regulators and the Secu-
rities and Exchange Commis-
sion and are held to a “fidu-
ciary” standard that requires
them to put clients’ interests
ahead of their own.
While investment advisers
are supposed to be vetted by
The Financial Industry Regulatory Authority oversees brokers.
HEARD ON THE STREET
Politics Are King in Brexit Drama
Since the Brexit vote, po-
litical developments, includ-
ing the vote itself, have
driven down the pound. The
economy has been more sup-
portive of the currency. On
Thursday, both combined to
send the pound higher, rack-
ing up a more than 1% gain
against the dollar to $1.245.
The market regime may be
shifting again.
There were two surprises
for the pound Thursday. The
first was the High Court de-
cision that the government
can’t invoke Article 50, the
means for starting disentan-
gling the U.K. from the Euro-
pean Union, without a vote
from Parliament. The govern-
ment has said it would ap-
peal; another hearing is due
in December.
The second, arguably
more substantive element
was a change in tack from
the Bank of England. While
expectations of further near-
term policy loosening al-
ready had dissipated, some
analysts thought the BOE
would still indicate that it
Electronic Arts’ Tale of Two Shooters Has Happy Ending
For years, the reigning
logic in the videogame busi-
ness was that one can never
have too many shooters.
Electronic Arts may be test-
ing that theory.
The videogame publisher
recently released two mar-
quee shooter titles within
two weeks of each other.
These aren’t trivial releases
either: “Battlefield 1” is the
company’s biggest game of
the year that most analysts
expect will sell around 15
million units. “Titanfall 2”
currently is expected to sell
between six million and 10
million units. All told, both
games are key to EA unlock-
ing its own big achievement:
a record $4.8 billion in reve-
nue for the fiscal year end-
ing in March.
Unbrokered
The number of individuals permanently barred or temporarily
suspended by Financial Industry Regulatory Authority
Number of barred and
suspended brokers
1,600
Suspended
Barred
1,200
800
400
0 0
2011 ’12 ’13 ’14
Source: Financial Industry Regulatory Authority
state and federal regulators
when they do business, regula-
tors can differ on whether a
barred broker should be al-
lowed to operate in the
broader advisory universe.
They can conclude that there
is no issue in allowing a sanc-
tioned broker to become an
adviser. But in some cases, a
broker whom Finra has disci-
plined can slip by an unwitting
regulator or watchdog.
The scope of the issue is
difficult to assess as there is
no single repository of infor-
mation on brokers and advis-
ers available to the public be-
yond a simple name search. A
Wall Street Journal review of
about 900 SEC filings of in-
vestment-advisory firms that
disclosed a regulator had
FINANCIAL ANALYSIS & COMMENTARY
The Bank of England raised its forecasts for growth and inflation.
was leaning toward another
rate cut. Instead, the BOE
said that it could move pol-
icy in either direction as
needed. That might perhaps
be a statement of the obvi-
ous, but the inclusion of the
possibility that policy could
be tightened is still a new
development.
The BOE’s higher forecasts
for both growth and inflation
in the near term—with the
Shooters are one of the
most lucrative categories in
videogames. About half the
top-10 selling game titles
each year fall into this group,
according to NPD data. So
there is some logic to EA’s
move, especially as the com-
pany must compete with the
perennial “Call of Duty” fran-
chise from Activision Bliz-
zard. “Call of Duty” sequels
have been the top-selling
game for six of the past
seven years in the U.S., ac-
cording to NPD. The latest it-
eration, “Call of Duty: Infinite
Warfare,” goes on sale Friday.
That is a big target for
EA. But one risk the com-
pany faces is that having two
premium shooters competing
for a similar audience at the
same time means they could
FINANCE & MARKETS
Number of registered brokers
800,000
600,000
400,000
200,000
’15 2011 ’12 ’13 ’14 ’15
THE WALL STREET JOURNAL.
taken action against one of its
employees uncovered more
than 100 former brokers who
were barred or suspended by
Finra yet continued to provide
investment advice. The Jour-
nal affirmed that figure by
cross-checking the former bro-
kers named in those disciplin-
ary disclosures with Finra’s
public database on brokers,
BrokerCheck.
Because of the uneven over-
sight of investment-advisory
firms, securities experts say,
the 100-broker figure likely
undercounts the population of
Finra-barred or suspended
brokers who continue to give
out financial advice. There are
more than 641,000 brokers in
the U.S., and Finra said last
year it barred nearly 500 and
suspended more than 700.
The SEC said in September
that it will closely examine in-
vestment-advisory firms that
employ brokers disciplined or
barred from the brokerage in-
STEPHEN VOSS FOR THE WALL STREET JOURNAL
dustry.
Mr. Davis was fired from his
former brokerage in 2013 for
violating firm policies, at-
tempting to settle a client
complaint without notifying
higher-ups and changing a cli-
ent’s address without his or
her knowledge, according to
his Finra BrokerCheck record.
That same year, he was ap-
proved by California’s securi-
ties regulator to work as an
investment adviser, according
latter reaching 2.75% in 2018,
well above its 2% target—
give it a tricky trade-off to
manage. Gov. Mark Carney
set it out clearly, however:
The choice is either allowing
higher inflation to erode real
incomes, or tightening policy
which could lead to lower in-
comes and higher unemploy-
ment. Since sterling is play-
ing a safety-valve role for the
U.K. economy, the BOE is
shoot each other in the foot
rather than wound the rival
franchise. “Titanfall 2” is a
bigger question mark, as the
original version was limited
to just Microsoft’s Xbox con-
soles and PCs. Last week,
Doug Creutz of Cowen & Co.
downgraded EA to a “neu-
tral” rating, citing weak pre-
order data for the new game.
That fear seemed con-
firmed Wednesday, when re-
tailer GameStop lowered its
outlook, citing disappointing
sales of games released in
October. Those would have
included EA’s two shooters,
though GameStop didn’t
specify. That clipped the
gains EA’s shares were mak-
ing following its strong fiscal
second-quarter earnings the
night before.
to the SEC’s public disclosures
on investment advisers.
Finra banned Mr. Davis
from the brokerage industry in
2014 after he failed to meet
with the regulator to discuss
allegations he engaged in mis-
conduct in several customer
accounts. Finra automatically
bars brokers who fail to pro-
vide on-the-record testimony
around misconduct.
If Mr. Davis were to apply
to work as an investment ad-
viser in California now, he
wouldn’t be approved due to
Finra allegations, said Tom
Dresslar, a spokesman for Cal-
ifornia’s Department of Busi-
ness Oversight. California’s se-
curities regulator could take
further action but it may need
to conduct its own investiga-
tion first, Mr. Dresslar added.
Mr. Davis consented to
Finra’s banishment without
admitting or denying the
charges. When reached by The
Wall Street Journal, he de-
clined to address Finra’s alle-
gations.
Mr. Davis said he started
considering his options when
he could no longer afford an
attorney to continue fighting
Finra’s allegations. With his
investment adviser registra-
tion, Mr. Davis said he was
able to move to a new firm
and “maintain [his] relation-
ships with clients.” Still, Mr.
Davis said he lost most of his
clients following the Finra
banishment; he added that his
new clients are given disclo-
sures of the Finra action
against him. The firm he
works for, Texas-based Cop-
pell Advisory Solutions LLC,
didn’t respond to requests for
comment.
Advertisement
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Data as shown is for information purposes only. No offer is being made by
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choosing the former. But it
has a downside: The BOE
clearly stated it had limited
tolerance for much-higher in-
flation.
What next for the pound?
Politics ultimately remains in
the driving seat. The bigger
questions about the destiny
FRANK AUGSTEIN/ASSOCIATED PRESS
of the U.K. economy will be
settled by politicians, not by
the BOE. But in the near
term, the economic data may
actually count for more than
they have in recent weeks.
Continued strong data will
stop the downward momen-
tum of the pound.
The pound has moved in
three distinct phases since
the Brexit vote: the big de-
cline in the immediate wake
of the vote, a period in Au-
gust and September in which
decent economic data helped
buoy the currency somewhat,
and then October’s dose of
political reality, which sent it
down to fresh lows. Thursday
may mark the beginning of a
fresh phase. But political risk
will never be far away.
—Richard Barley
Loading Up
Electronic Arts’ net revenue*
Physical retail
$3 billion Expansion content
Full-game downloads
2 EA jumped 19% year over
1 months ended Sept. 30.
0 is collecting some of the
2012 ’13 ’14 ’15
*Past 12 months ended September
Source: the company
THE WALL STREET JOURNAL.
But investors needn’t
panic; EA benefits from a
wide slate of diverse games
that include several lucrative
sports franchises like FIFA
and Madden NFL. The com-
pany also continues to grow
its digital sales footprint,
S&P 500 Falls Again;
European Shares Rise
BY RIVA GOLD AND DANIEL HUANG
Stocks slipped Thursday,
with the S&P 500 falling for
eight consecutive sessions, its
longest stretch of declines
since October 2008.
The S&P 500 fell 0.4%. The
Dow Jones Industrial Average
fell 28.97 points, or 0.2%, to
17930.67. The Nasdaq Compos-
ite dropped
THURSDAY’S 0.9%.
MARKETS The CBOE
Volatility In-
dex, which
measures investors’ expecta-
tions for stock swings, moved
higher for seven sessions in a
row through Wednesday and
was up 16% by late afternoon
Thursday.
In Europe, the Stoxx Europe
600 rose less than 0.1%, end-
ing eight consecutive sessions
of losses. London’s FTSE 100
index, which tends to move in-
versely to the pound, fell 0.8%.
The S&P 500 has fallen
nearly 3% since Oct. 25 as
tightening polls in the U.S.
presidential election have
weighed on sentiment. Still,
that decline is much milder
than the 23% the S&P 500 lost
in its previous eight-session
losing streak during the finan-
cial crisis. The index slid 5.3%
over two sessions following
the U.K.’s vote to leave the Eu-
ropean Union in June.
Some investors and ana-
lysts said continuing jitters
and the need to reposition in
case of a surprise outcome in
the coming week, as happened
in the U.K., were prompting
the extended drift lower.
“There’s obviously a lot of
INTERNATIONAL INVESTMENT FUNDS
FUND NAME
n Chartered Asset Management Pte Ltd - Tel No: 65-6835-8866
Fax No: 65-6835 8865, Website: www.cam.com.sg, Email: cam@cam.com.sg
CAM-GTF Limited
For information about listing your funds,
please contact: Freda Fung tel: +852 2831
2504; email: freda.fung@wsj.com
THE WALL STREET JOURNAL.
WSJ.com/Heard
OVERHEARD
Starting this week, ordi-
nary savers can see how the
other half lives courtesy of
Goldman Sachs Asset Man-
agement. It launched an ETF
tracking its eponymous
“Hedge Fund VIP Index.”
based on the most
crowded…er, popular stock
trades of hedge funds. They
say it is “competitively
priced” with an expense ratio
of 0.45%.
That certainly is competitive
with the standard hedge fund
“two and 20” structure, though
it is five times that of the larg-
est passive stock competitor.
Alas, even leaving fees
aside, the best ideas of the
best and brightest haven’t
been very competitive with
those of the cheap and clue-
less recently. The VIP Index
did very well for a while, but
bets such as troubled drug
producer Valeant Pharma-
ceutcals caused it to trail the
S&P 500 by nearly 2 percent-
age points in the past year.
It isn’t always nicer behind
the velvet rope.
which brings higher margins
and offsets the downward
pressure at retail that is
hurting GameStop. It is
worth noting that revenue
from full-game downloads at
year for the trailing 12
It helps that “Titanfall 2”
’16 highest critic scores of
games this year—higher than
its predecessor. That could
help the game past the
launch window. It also helps
that EA still trades on par
with the Nasdaq Composite,
as a multiple of forward
earnings. That should limit
any downside should the aim
on one of its games fall
short.
—Dan Gallagher
angst going into the election,”
said Erik Davidson, chief in-
vestment officer at Wells
Fargo Private Bank. “The les-
sons of the Brexit vote are still
pretty recent, so I think people
are a little cautious about
what the markets have priced
in and what could happen.”
In corporate news, Face-
book shares slid 5.9% by late
afternoon despite its surging
profit, after the social-media
company warned of a slow-
down in advertising growth.
The tech sector led declines in
the S&P 500, falling 1% by late
afternoon.
Earlier, the British pound
got a boost after a U.K. court
ruled that the British govern-
ment would need Parliament
to vote on Brexit before it
could officially start the sepa-
ration process from the Euro-
pean Union. The pound was up
1.3% at $1.2458.
Sterling also got a bump af-
ter the Bank of England left its
interest rates unchanged as
widely expected and played
down the chances of a further
rate cut, while raising its infla-
tion forecasts.
Investors pulled back
slightly from government
bonds. The yield on the 10-
year U.S. Treasury note rose to
1.811%, from 1.799% Wednes-
day. Gold fell 0.4% to $1,302.10
after two sessions of gains,
when uncertainty over next
week’s U.S. election stoked de-
mand for havens.
In Asia, Japanese markets
were closed for a holiday. The
Shanghai Composite Index ad-
vanced 0.8%, while Hong
Kong’s Hang Seng fell 0.6%.
NAV —%RETURN—
GF AT LB DATE CR NAV YTD 12-MO 2-YR
OT OT MUS 10/28 USD 305661.31 9.1 7.6 -6.9
P2GW309000-0-W00100-1--------AL

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Why vacant lots Dan Neil

and back alleys skeptically drives
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flower shops comeback car
W6 W8

EATING | DRINKING | STYLE | FASHION | DESIGN | DECORATING | ADVENTURE | TRAVEL | GEAR | GADGETS

© 2016 Dow Jones & Company. All Rights Reserved. THE WALL STREET JOURNAL. Friday - Sunday, November 4 - 6, 2016 | W1

Not Your Babushka’s

Kluski
Fermented, foraged, whole-grain and invigoratingly herbal,
the flavors of the moment are straight out of Central and Eastern Europe.
Why does this old-world food seem so right-now?

F. MARTIN RAMIN/THE WALL STREET JOURNAL, FOOD STYLING BY SARAH KARNASIEWICZ, PROP STYLING BY CARLA GONZALEZ-HART

SUPER BOWL Silesian

dumplings in carrot broth
(kluski slaskie), served
at Apteka in Pittsburgh.

dissolution of the Soviet Union—and with spins on a colorful cuisine that ranges far soft Silesian-style dumplings in a broth
BY SARAH KARNASIEWICZ
more than 14 million Russian, Ukrainian beyond stereotypical babushka cooking. of fresh carrot juice and porcini and fen-
and Polish Americans among us—popular At Apteka, a modern Polish restaurant nel-infused almond yogurt.

S
TICK-TO-YOUR RIBS stews,
vegetables simmered into sub-
mission, doughy dumplings as
chubby and pale as a child’s
fist: Mention Eastern European
food to most Americans, and these are
the images they’ll conjure. Never mind
that at its largest, the U.S.S.R. covered
one-sixth of the earth’s land, swallowing
spice routes and diverse empires that
were sustained by much more than pork
and potatoes. Twenty-five years after the
notions of Slavic food have remained
largely frozen in amber.
Blame it on cultural baggage: The
Slavic penchant for hospitality has always
been most vigorously practiced at home,
and the privations of life behind the Iron
Curtain during most of the last century
hardly made for a robust restaurant cul-
ture. Nevertheless, a new generation of
stateside chefs is embracing Central and
Eastern European ingredients and tech-
niques, putting fresh—dare I say hip?—
that debuted in Pittsburgh, earlier this
year, the dishes defy tired assumptions
about what this kind of cooking can be.
“Yes, I love pierogies. But when I think
of spending my childhood summers in Po-
land, I think of mirabelle plum jam and
smoked eel and amazing bread,” said co-
chef/owner Tomasz Skowronski. He and
his partner, Kate Lasky, have assembled a
menu of Rust Belt-rooted and entirely ve-
gan riffs on Polish classics—salads of sor-
rel, mustard greens, shallots and apples;
“We aren’t slavish to tradition,” said
Mr. Skowronski. “Because you can ask,
‘What are real Polish ingredients?’ And
you realize that almost everything comes
from somewhere else.” As fluid as the
borders between Poland, Ukraine, Russia
and their neighbors have been, so, too, are
their foodways. “Ultimately, cooking this
way comes down to familiar techniques
and flavor contrasts,” said Mr. Skowronski.
“Smoked and preserved, sour and sweet.”
Please turn to page W2
P2GW309000-0-W00200-1--------AL
W2 | Friday - Sunday, November 4 - 6, 2016
SLAVIC BUT NOT SLAVISHLY SO
Continued from page W1
Those flavors are striking a
chord nationwide, often in restau-
rants not otherwise identifiably
Eastern European. This summer,
I sat down at Gristmill, a locavore
pizza place in Brooklyn, and was
floored by a salad of briny cucum-
bers and charred and pickled beans
topped with tangy kefir cream and
dehydrated dill that tasted like it
could have been flown in from a da-
cha outside Moscow.
For New York-based chef
Nastasha Pogrebinsky, who emi-
grated from Kiev to the U.S. in 1991,
it still comes as a surprise to see
American restaurants featuring the
flavors of her childhood. When she
opened Bear in partnership with
her brother, Sasha, on the edge of
Long Island City in 2011, she had to
confront a few voices in her head.
“As a teenager, people really did
call us ‘commies,’ and I worried
about people seeing my food as too
‘Russian’ or ‘ethnic,’ ” she said.
Ms. Pogrebinsky began tenta-
tively peppering her seasonal-
American fare with Slavic-accented
specials like forest mushrooms
slow-cooked with thick smetana
cream, and to her delight those
proved to be her menu’s biggest
hits. The siblings closed Bear this
spring to focus on other projects,
including negotiations with a devel-
‘We’re cooking now for the
first generation born after
the end of the Cold War.’
oper regarding a small chain of
casual Eastern European restau-
rants. “I never would have thought
something like this could go
national,” said Ms. Pogrebinsky.
“But then you realize we’re cooking
now for the first generation born
after the end of the Cold War.”
Bonnie Morales, the child of Be-
larusian immigrants, didn’t expect
to become a champion of this kind
of cooking, either. But at Kachka, in
Portland, Ore., she’s won raves for
her zakuski, small plates meant to
sustain sessions of socializing and
drinking. “The pickled everything,
the stuffed eggs, the mayonnaise-y
salads, the little fishy things:
I didn’t appreciate them,” Ms.
Morales said. It took her husband
eagerly asking for seconds of her
parents’ “super weird” suppers to
make her reconsider. “Eventually, I
started to wonder if I was the crazy
one. And now I’m in love with it.”
Her neighbor Vitaly Paley can
relate. Over the last 20-plus years,
the Russian-born, French-trained
chef has racked up accolades run-
ning four Portland restaurants.
While his refined seasonal-North-
west style was informed by memo-
ries of the wholesome ingredients
of his Soviet youth, he’d never
served blini in his life. “It honestly
never occurred to me,” he said.
Then, two years ago, at the urg-
ing of his friend, food writer and
fellow Russian expat Anya von
Bremzen, Mr. Paley agreed to stage
a playful Soviet-themed pop-up din-
ner. His ambivalence is apparent
even in the name he gave it: DaNet
(“Yes/No”). But after poring over
Russian cookbooks, mining Arme-
nian and Uzbeki recipes, recon-
structing elaborate Tsarist caviar-
topped crepes and flaky fish pies,
and reinterpreting currylike Geor-
gian chicken satsivi with Oregonian
game, he found himself a man in-
vigorated. “After years of trying
to forget where I came from, it got
under my skin,” he said. Later this
month, Mr. Paley launches a full
Russian afternoon tea at Portland’s
Heathman Hotel, complete with
Kiev tortes, his grandmother’s sour
cream cake and vintage samovars.
The trend extends across the
Atlantic, too. In Britain, the 2015
cookbook “Mamushka,” by Olia
Hercules, revealed a vividly flavor-
ful Ukrainian table, and Zuza Zak’s
“Polska,” published in September,
puts a 21st-century gloss on its au-
thor’s Polish gastronomic heritage.
Ms. Zak was 8 years old when
she left Warsaw and settled in Eng-
land with her family in 1987. She
channeled her curiosity and longing
for home into years of researching
and recording a personal canon of
Polish recipes, such as bracing aper-
itifs stiffened with herb-infused
vodka, smoky mackerel baked with
wild cherries, and crumbly short-
crust pastries dripping with salty
caramel. “I started out thinking
I’d show other people how colorful
and warm Polish food could be,”
she said. “But it awakened me, too.”
Silesian Dumplings in
Carrot Broth
(Kluski Slaskie)
TOTAL TIME: 2 hours SERVES: 4
2 pounds russet potatoes
2 egg yolks
Kosher salt
½ cup potato starch
½ cup dried porcini mushrooms
½ cup unsalted butter
2 tablespoons chopped garlic
¼ cup water
Freshly ground black pepper
Juice of 1 lemon
1 quart carrot juice
¼ cup plain whole-milk sour
cream or yogurt
1 teaspoon crushed fennel seeds
8 ounces fresh oyster or shiitake
mushrooms, trimmed
1½ tablespoons olive oil
Chopped fresh dill
Chopped fennel fronds
1. Heat oven to 375 degrees. Bake
potatoes until cooked through and
tender, about 1 hour. Set aside to
cool slightly. When potatoes are cool
enough to handle but still warm,
halve and scoop out flesh.
2. Run warm potato flesh through
a potato ricer or sieve, then spread
onto a baking sheet to cool slightly.
Transfer potato mixture, along with
yolks and 1 teaspoon kosher salt,
to a bowl. Stir with a fork to incorpo-
rate. Sprinkle in potato starch, stir-
ring until mixture just comes to-
gether. Turn mixture onto a work
surface and press into a rough rect-
SPREAD OF SPREADS // DO HOSPITALITY THE SLAVIC WAY, WITH COLORFUL FLAVORED BUTTERS AND HEARTY BREAD
FROM DENSE BLACK spelt buns to sour rye
rounds studded with caraway, bread is so central
to the Slavic table, it is baked right into the lan-
guage. The Russian word for hospitality, khlebo-
solny, translates literally as “bready-salty”—a refer-
ence to the traditional gesture of welcoming guests
with a platter of bread and salt. Nowadays, in Po-
land, that platter might just as likely be piled with
OFF DUTY
angle. Fold dough in half, then rotate
a quarter turn and fold again. Repeat
folding and turning two more times,
taking care not to overwork, until
dough is smooth and slightly sticky.
3. Make stock: Pulse dried mush-
rooms in a food processor until finely
ground. Melt butter in a saucepan
over medium heat. Add garlic,
ground mushrooms and ¼ cup wa-
ter, and cook, stirring frequently, until
mixture is thick, soft and golden,
about 15 minutes. Stir in ½ teaspoon
pepper, 1 teaspoon kosher salt and
lemon juice. Stir in carrot juice. Re-
duce heat to lowest setting to keep
stock warm but not simmering.
4. In a small bowl, combine sour
cream and crushed fennel. Set aside.
5. Toss fresh mushrooms with olive
oil and a pinch each of kosher salt
and black pepper. Spread on a baking
sheet. Roast in oven until tender and
crisp at edges, 10 minutes.
6. Make dumplings: Bring a large pot
of salted water to a boil. Pull off ta-
blespoon-sized pieces of dough and
roll into balls. Press a dimple into cen-
ter of each ball. Working in batches,
carefully drop dumplings into boiling
water. Cook until dumplings are ten-
der and rise to surface, about 3 min-
utes, using a slotted spoon to transfer
to a paper-towel lined plate as you go.
7. To serve, arrange dumplings in
a shallow bowl. Add roasted mush-
rooms, then ladle in carrot broth.
Finish with a dollop of fennel sour
cream, chopped dill and fennel fronds.
—Adapted from Tomasz Skowronski  Find recipes for a rosemary and thyme aperitif and salted caramel
and Kate Lasky of Apteka, Pittsburgh tart with pecans (mazurek) at wsj.com/food.
little kanapki, small open-face sandwiches meant
for sharing and socializing (especially over shots
of bracingly cold vodka). You can pick up toppers
of cured fish, briny roe, pickles, puréed eggplant
or herb-flecked soured cream at your local Eastern
European market. Or, take a page from “Polska”
author Zuza Zak’s playbook and slather slices of
dark, yeasty sourdough and rye with easy com-
pound butters amped up with anchovies, earthy
chanterelle mushrooms or rosy beets. Sometimes
the simplest things are the most sublime.
Anchovy Butter
TOTAL TIME: 35 minutes MAKES: about 1 cup
Drain 1 (2½-ounce) can oil-packed anchovies.
Add drained anchovies to a food processor,
along with 14 tablespoons unsalted butter,
softened. Process until completely blended,
scraping down sides of bowl as needed. Transfer
to a serving dish and chill in refrigerator at least
30 minutes before serving.
Beet Butter
TOTAL TIME: 35 minutes MAKES: about 1 cup
THE WALL STREET JOURNAL.
Pickle and Bean Salad
With Yogurt and Dill
TOTAL TIME: 45 minutes SERVES: 4
3 egg yolks, at room temperature
1 clove garlic
Kosher salt
½ cup grapeseed oil
2 tablespoons chopped radish
greens
1 large half-sour dill pickle, thinly
sliced, plus 3 tablespoons brine
1 pound green beans, trimmed
and halved
½ cup rice wine vinegar
¼ cup granulated sugar
½ cup water
1 tablespoon minced fresh dill
4 small radishes, thinly sliced
1/
3 cup plain whole-milk yogurt
1/
2 teaspoon dried dill
1. Make aioli: In a food processor, pulse
yolks, garlic and a generous pinch of
salt until combined. With motor run-
ning, very slowly pour in oil until aioli is
thick, creamy and emulsified. Add rad-
ish greens and 1 tablespoon pickle brine
and pulse to combine. Set aside.
2. Divide green beans into 3 equal
portions. Combine a third of beans
with rice wine vinegar, sugar and
½ cup water in a small saucepan. Bring
to a simmer over medium heat, then
immediately remove from heat. Trans-
fer mixture to refrigerator to cool.
3. Bring a medium pot of water to a
boil. Blanch half the remaining beans
for 2 minutes, then immediately plunge
beans into a bowl of ice water to cool.
Drain blanched beans and set aside.
4. Place a cast-iron skillet over me-
dium-high heat. Once pan is hot, add
remaining beans. Cook, stirring occa-
sionally, until beans are charred, about
5 minutes. Drain pickled beans and
combine with blanched and charred
beans in a medium bowl. Toss with
remaining brine and fresh dill.
5. To serve, spoon aioli onto a shallow
serving platter in an even layer. Cover
with bean salad, sliced pickles and rad-
ishes. Drizzle with yogurt Sprinkle with
3/
4 teaspoon kosher salt and dried dill.
—Adapted from Craig Hutchinson
of Gristmill, Brooklyn
F. MARTIN RAMIN/THE WALL STREET JOURNAL, FOOD STYLING BY SARAH KARNASIEWICZ, PROP STYLING BY CARLA GONZALEZ-HART
Add 1 clove garlic, chopped, a pinch of kosher
salt and 1 small beet, peeled, roasted, cooled
and roughly chopped, to a food processor. Pulse
once to combine. Add 14 tablespoons salted
butter, softened, and process until completely
blended, scraping down sides of bowl as needed.
Transfer to a serving dish and chill in refrigerator
at least 30 minutes before serving.
Chanterelle Butter
TOTAL TIME: 50 minutes MAKES: about 1 cup
Melt 1 tablespoon salted butter in a skillet over
medium heat. Add 1 clove garlic, chopped, and
a large handful of fresh chanterelles to pan.
Fry until mushrooms are softened and lightly
browned at edges, about 5 minutes. Season with
a pinch of kosher salt, remove from heat and
let cool to room temperature. // Add cooled
mushrooms and 14 tablespoons salted butter,
softened, to a food processor. Process until com-
pletely blended, scraping down sides of bowl as
needed. Transfer to a serving dish and chill in
refrigerator at least 30 minutes before serving.
—Adapted from “Polska” by Zuza Zak (Quadrille)
P2GW309000-0-W00300-1--------AL
THE WALL STREET JOURNAL.
Washington,
D.C.,
Declassified
Let the other tourists flock to the
National Mall while you make your way
to little-known art collections,
underground tunnels and the capital’s
other hidden corners
BY LINDA K. NATHAN
W
ashington,
D.C., is a
city of se-
crets. The
nation’s
capital specializes in subter-
fuge and stealth, from the
mysterious reason why the
CIA Museum only admits
CIA employees (and their
vetted visitors) to what ex-
actly Hillary Clinton’s cam-
paign chairman puts in his
risotto. So it stands to rea-
son that the city would har-
bor more than its share of
hidy-holes—tucked-away
spots for hush-hush confabs
and rendezvous. On the flip
side, some of the govern-
ment buildings you might
think are off-limits, or a big
bore, are neither, though vis-
its require a little advance
planning. Here, a look at
some of D.C.’s hidden attrac-
tions. (As for the CIA Mu-
seum, anyone can do a little
snooping through the collec-
tion online, at cia.gov.)
State of Art
The Diplomatic Reception
rooms, a suite of 42 rooms,
on the seventh and eighth
floors of the Harry S. Tru-
man State Department Build-
ing, are the elegant spaces
where treaties are signed,
trade agreements are ham-
mered out and foreign heads
of state meet with the Secre-
tary of State, Vice President
and members of Congress to
conduct the dance of diplo-
macy. Such lofty pursuits de-
mand a backdrop of Amer-
ica’s finest museum-quality
pieces—and these rooms
don’t disappoint. Approxi-
mately 5,000 objects of
American fine and decora-
tive arts are on display,
ranging from a Paul Revere
silver teapot to Chippendale
furniture. You can take a 45-
minute art-focused tour from
Monday to Friday, if you add
your name at least 90 days
in advance to the waiting list
and prepare yourself for a
possible cancellation to ac-
commodate a diplomat in
need. reception-
tours.state.gov
Interior Décor
Passersby might never
guess that the U.S. Depart-
ment of the Interior head-
quarters, a mass of uninvit-
ing concrete, contains a
series of circa-1930s murals
by some of America’s finest
painters, the legacy of Pres-
ident Franklin D. Roose-
velt’s New Deal. The collec-
tion includes expansive
works by Maynard Dixon,
Allan Houser, Gifford Beal
SHUTTLE DIPLOMACY Visitors will be welcome to peek inside several embassies on and
around D.C.’s Embassy Row during two annual open-house events, held in May.
and John Steuart Curry.
Moreover, 26 photos by An-
sel Adams, commissioned
by Secretary of the Interior
Harold Ickes in 1941, also
line a few hallways. Tours
are offered Tuesdays and
Thursdays at 2 p.m.
doi.gov/interiormu-
seum/tours
Diplomatic
Community
Though Washing-
ton’s embassies re-
main closed to all
but the privileged
few, on Saturday,
May 6, 2017, an
“Around the World”
tour will offer the
public entrée into
more than 40 em-
bassies; many pre-
pare national dishes you
can sample and, in some
cases, offer performances.
On the following Saturday,
the European Union embas-
sies and the EU delegation
to the U.S., will also open
their doors to the public for
the day. culturaltour-
ismdc.org/portal/passport-
dc1, euopenhouse.org
High Brows
Only the lucky (and calcu-
lating) few can get their
brows done next to a Su-
preme Court justice. Your
best shot: Karma by Erwin
Gomez, a hair and eyebrow
salon in the West End
neighborhood, which is fre-
quented by politicos and
the D.C. elite. karmaerwin-
gomez.com
Staying Power
The Jefferson hotel, a snug
and stately 95-room beaux-
arts structure within walking
distance of the White House,
is a favorite with denizens of
Capitol Hill and Embassy
Row. But you won’t find
them trading secrets in the
bar: Sub rosa rendezvous
take place in the clubby, pri-
vate “cabinet rooms” that
can be reserved (by anyone)
for drinks. Hotel guests who
don’t want to hobnob with
the hoi-polloi can hide out in
the volume-lined Book
Room, which is closed to the
public. jeffersondc.com
Sneaky Steaks
The walnut-wood-paneled
Del Frisco’s Double Eagle
Steakhouse, near Union Sta-
tion, maintains a private
underground entrance lead-
ing into the wine cellar and
lower-level private dining
rooms. According to a res-
taurant spokeswoman, the
secret entrance “has been
used regularly by members
from both sides of the aisle
for fundraising dinners, so-
Friday - Sunday, November 4 - 6, 2016 | W3
OFF DUTY
T.J KIRKPATRICK FOR THE WALL STREET JOURNAL
cial gatherings and speak- CORRIDORS OF
ing engagements.” The cel- POWER Clockwise
lar entrance opens directly from top: William
from the underground park- Gropper’s 1939
ing garage. delfriscos.com/ ‘Construction of a
steakhouse/washington-dc Dam,’ at the
Department of
Tunnel Vision Interior; Karma
Long ago, Capitol Hill plan- beauty salon, where
ners dug tunnels to join the bigwigs get
halls of Congress to nearby blowouts; the Book
office buildings. Get your Room at the
own tunnel experience by Jefferson hotel.
registering for a reader
identity card at the Library
of Congress’s James Madi-
son building. In five min-
utes, you have a nifty lami-
nated card that gives access
to the nation’s trove of lit-
erature and the iconic Itali-
anate main reading room.
Walk the steam tunnel from
Madison to the Thomas Jef-
ferson Building—perhaps
taking advantage of the
Dunkin’ Donuts coffee down
there—and emerge in the
Great Hall, a marble and
mural wonder. loc.gov/visit/
tours/online-tours/james-
madison-memorial-building
Hill of Spilled Beans
There are hushed restau-
rants in Georgetown—such
as the Seasons at the Four
Seasons hotel—where you
might catch a glimpse of in-
fluential diplomats, power
brokers and a Senator or
two. But if you want to over-
hear the best gossip in town,
head to one of the Capitol
Hill bars that lure in staffers
with cheap beer and spicy
wings. Tortilla Coast with $4
draft and a happy hour that
lasts until 8 p.m. is a favor-
ite, particularly among
homesick Texans. Capitol
Lounge boasts 25-cent wings
on Tuesday (with a two-
drink minimum) and a prom-
ise to leave partisanship at
the door. tortillacoast.com,
capitolloungedc.com
—Additional reporting
by Nina Sovich
REGISTER NOW
P2GW309000-0-W00400-1--------AL
W4 | Friday - Sunday, November 4 - 6, 2016
Designers Who Are Just Like You
These independent women designers’ brands grow via word-of-mouth, not marketing hype.
And they’re making the sort of relatable and accessible clothes we all search for
CHILD’S PLAY The co-founders of women’s fashion collective Dôen are sisters Katherine (seated) and Margaret
Kleveland, with Margaret’s son Julian (standing on table) and Katherine’s sons Wilder (left) and Shepard (right).
BY MEENAL MISTRY
WHEN AN ACQUAINTANCE first
told me about the fashion brand
Dôen, she mentioned it with a con-
spiratorial, satisfied air—the same
one women use when furtively be-
stowing upon you the name of a fa-
vorite facialist or a masseur with
magic hands.
It was midsummer. I was on ma-
ternity leave, bemoaning the lack of
easy-chic, cotton summer dresses.
The fast fashioneers didn’t have
what I wanted and I wasn’t about to
spend $600 for a hippie-ish frock
from a midrange label that would
be subjected to sweat, spit-up and
other less than glamorous fluids.
“You should look at Dôen,” the
friend suggested when I bumped
THE CULT CLOSET //
MORE WOMEN-POWERED
BRANDS THAT ARE SPREAD
BY WORD-OF-MOUTH
Rachel Comey // Zero + Maria Cor-
nejo // Nili Lotan // Black Crane //
Ulla Johnson // Electric Feathers //
Apiece Apart // Eleven Six // Ace &
Jig // Maryam Nassir Zadeh //
Creatures of Comfort // Lauren
Manoogian // Sofie D’Hoore
THE HEIGHTS OF FASHION
This fall, the classic, elastic-sided Chelsea boot has morphed into a variety of heel statements. Whether you’re looking for
a daily-wear flat, a hardy-but-glamorous high stepper or something in between, there’s one for you
Grounded Control
Originally created in the Victorian era, the
Chelsea boot defaults to a flat heel. This ele-
gantly low-slung pair makes a down-to-earth
companion for fall’s cropped trousers, long
dresses and flaring knee-length skirts. Boots,
$975, christianlouboutin.com
into her while strollering about
town. I logged onto the label’s web-
site that night and found exactly
what I’d been seeking: breezy, bohe-
mian frocks, most under $300, that
looked like the vintage find you
dream of but rarely score. (Alas,
most of the pieces I wanted had
sold out, but I happily signed up for
wait lists.)
Nowadays, it seems hard to dis-
cover anything actually new in fash-
ion. But there’s still a somewhat
hidden treasure trove of designers,
such as those at Dôen, who, with
relatively little fanfare, make
clothes that quietly build a cultish
fan base by word-of-mouth.
They’re women, often mothers,
who design what they themselves
would like to wear in real life—a
life that typically doesn’t involve
private jets or partying with ce-
lebrities. They’re rarely found in
fashion magazines. They don’t
mount high-production runway
shows. You’re more likely to learn
their names by asking that im-
pressively put-together mom at
the school-drop about her chic but
unidentifiable dress. For frus-
trated shoppers, coming across
these labels’ wares can be a reve-
lation. Aha! Where have you been
all my life?
That was the feeling that Jenni
THE TRANSMUTED BOOT
0.4”

 
A Mild Uprising
With a higher but still sensible heel of
1.8-inches and a squared-off silhouette, these
boots skew boyish. They would pal well with
slouchy jeans, a cashmere sweater and a
rich-as-Croesus cup of hot chocolate.
Boots, $525, tibi.com
OFF DUTY
Konner, the executive producer of
HBO’s show “Girls” and co-founder
of newsletter Lenny Letter, had
earlier this year when—on the ad-
vice of fashion stylist Jessica Kan-
tor—she tried on cropped sailor
pants by Los Angeles designer
Jesse Kamm.
Ms. Konner now owns four pairs
in different colors. “Most days, I
wear them with T-shirts,” said Ms.
Konner, “but I’ve even worn them
to fancier events with a silk blouse
For frustrated shoppers,
coming across these
labels can be a revelation:
Aha! Where have you
been all my life?
and a tuxedo jacket.” And she is
happy to spread the word. “I’ll
shout it from the rooftops,” added
Ms. Konner. “I love telling people
about my Kamm pants.”
The people in question might
never find out otherwise, given
that Ms. Kamm has shied away
from selling her collection to a lot
of stores, preferring to keep her
operation at a manageable size.
1.8”


Middle School
An ecstatic medium, these booties measure
up at 2.5-inches. Their stacked block heel pro-
vides a sturdy lift that can help elongate a day-
time look from 9 to 5 and still have the energy
to see you through a glass of Chenin Blanc that
night. Boots, $595, jennikayne.com
THE WALL STREET JOURNAL.
DATURA
The label’s
direct-to-
consumer
model allows
for accessible
prices. Coat,
$580,
datura.com
“As soon as your clothes are
everywhere,” she said, “you alien-
ate your customer base, and it’s
just not special anymore.”
Many of these designers aren’t
particularly attention-averse. It’s
just that, as Brooklyn-based de-
signer Caron Callahan put it, seek-
ing press is number 22 on her to-
do list. Dôen does a nice job of
getting the message out via the
“Journal” section on its website,
which features dreamily aspira-
tional images of friends of the
brand in its clothes. Others just
rely on the strength of their
product—and the happy sur- DÔEN
prise when a celebrity or influ- An ideal fall complement
encer buys their clothes and is to boho dresses: hand-
moved to share that publicly. Lean- knit sweaters. Sweater,
dra Medine, founder of the Man Re- $358, shopdoen.com
peller blog, has worn the batik-
print pieces by Los Angeles-
based Australian designer JESSE KAMM
Natalie Martin and posted Ms. Kamm’s cropped
about them on her well-traf- sailor pants have
ficked site. many dedicated fans,
Aside from social media happy to sing their
and friends, you might also praises. Pants, $395,
hear about these designers jessekamm.com
via a boutique owner who’s
moved to champion them.
Stores like Oroboro in
Brooklyn, Frances May in
Portland, Ore., Two Son in
Nashville, and Kick Pleat in
Houston and Austin, Tex.,
are enthusiastic word-of-
mouthers. “I’m drawn to
these designers because
they’re doing their own
thing,” said Kick Pleat owner Wendi
Koletar Martin, who carries Ms.
Kamm’s collection as well as Caron
Callahan, Rachel Comey and Apiece
Apart. “It’s also how my clients
want to dress; they want to be dif-
ferent but don’t want the clothes to
do all the talking.”
But the clothes do get people
JESSICA SAMPLE FOR THE WALL STREET JOURNAL (PORTRAIT); F. MARTIN RAMIN/THE WALL STREET JOURNAL, STYLING BY ANNE CARDENAS (CLOTHING)
talking. New York fashion stylist
Marina Muñoz, who supports indie
brands through both her work and
her wardrobe, said that certain
pieces, like dresses from Brooklyn-
based label Electric Feathers, will
always get queries, even in the
fashion-savvy corridors of Condé
Nast. “People who have never seen
[the brand] before will literally
run after you,” she said. Hannah NATALIE MARTIN
Henderson, co-owner of Venice, The hand-batiked dresses are
Calif., shop General Store, said beloved by Rihanna and Leandra
that women have gone out of their Medine. Dress, $333,
way to stop her and inquire about nataliemartincollection.com
her Dôen dresses.
The anti-corporate way in which
many of the labels operate ap-
peals to their customers. Both
Dôen and Spanish label
Datura sell directly to their
consumers, allowing for
more accessible prices.
Most of the brands also
carry over or evolve pop-
ular styles, bucking the
idea that a collection
needs to be reinvented
every six months. “It’s
slow fashion,” said
Ms. Martin about her
batiked dresses, which
are made by hand in Indonesia and CARON CALLAHAN
might not readily be available. “I Ms. Callahan makes her own patterns
think a lot of people are coming for pieces like this boxy jacket.
back to that.” Jacket, $365, caroncallahan.com
2.5” 3”
 
JOURNAL

F. MARTIN RAMIN/THE WALL STREET
High Horse
Though not quite teetering, the 3-inch heels
on this sculptural pair are still lofty
enough to inject some feminine drama into
your wardrobe. We’d wear them with a floaty
dress or on-trend cropped-flare pants.
Chloé Boots, $1,045, net-a-porter.com
P2GW309000-0-W00500-1--------AL

THE WALL STREET JOURNAL. Friday - Sunday, November 4 - 6, 2016 | W5

OFF DUTY
FÊTE ACCOMPLI // A GOOD-LOOKS GUIDE TO RECENT EVENTS

Christine
Centenera
in a
Balenciaga
blazer David
 Adjaye

THIS BUD’S ASKEW

Rambling but refined
Roksanda centerpieces by floral
Ilincic designer Brittany Asch

Jessica
of BRRCH. HOBNOBBING WITH...
Joffe
LAURE HERIARD DUBREUIL
Ruth The founder of the Webster boutiques
Chapman on all things festive
Best party you’ve ever been
to? The Met Gala. I only went
once, but I was so excited by
the theme—punk rock [“Punk:
Chaos to Couture,” 2013]. I had
Olivier Theyskens do my dress
and Eddie Borgo do my jewelry.
I remember my husband came
to pick me up in a nice car; it
Ashley Jonathan Saunders was almost like getting married
Adjaye and Christopher Kane or going to prom.
Best party city? Miami is a
great one. There’s something
Christene Barberich 
so friendly and relaxed here, plus
Ada Kokosar all these people come in from
Maryna Linchuk in a Roksanda out of town—to Art Basel in
Ilincic dress December, the Winter Music
Conference in March and Swim
Week in July—and all the
I was dancing on my chair.
Pre-party routine? I have
someone come and do my
makeup. I sit down, and she
removes my makeup from the
day while doing a little massage
on my face. I can’t do emails,
or anything. It makes me relax.
Party outfit? The number
one thing is to feel comfortable
when you leave home. So you’ll
still be comfortable, even if
you get there and you’re over-
or underdressed.
Secret to a good party? Be
ready to entertain—to relax,
be present and enjoy the mo-

A Party That Beat the Odds New Yorkers on the weekend.

Drink of choice? I’m a vodka-

ment. I want my guests to have
the best time: There’s always
too much food and too much
soda-lime person. Or tequila. to drink.

BILLY FARRELL AGENCY (DUBREUIL); GETTY IMAGES (11)

IT WOULDN’T BE a New York gath-
ering without some sort of traffic
snafu. “I thought I was going to
miss my own party,” said designer
Roksanda Ilincic of her near-no-show
at a dinner last week to celebrate
the new collection she created for e-
commerce site MatchesFashion. (Her
hotel, she explained, had dramatically
underestimated the travel time.)
In the end, the gridlock—com-
pounded by a miserable drizzle—
didn’t prevent Ms. Ilincic, a Serbian
designer based in London, and a
group of friends from making it to
Lower East Side eatery Le Turtle.
Joining Ms. Ilincic and Matches’ co-
executive chairmen Tom and Ruth
Chapman were London-spawned (and
consequently rain-resistant) design-
ers Jonathan Saunders, Christopher
Kane and Katie Hillier, and Ghanaian-
British architect David Adjaye.
Though grayness ruled outside,
a fair bit of color shone indoors.
Known for her sweet palette and sub-
tly dramatic shapes, Ms. Ilincic
brightened the evening in a candy-
pink dress embroidered with tiny silk
balls. For her part, stylist Ada Koko-
sar favored a deep berry hue, in the
form of a sweeping halter dress.
Ms. Ilincic had a different sort of
fancy dress in mind for the Hallow-
een weekend: “My daughter wants
to be a vampire, and she wants her
father to be a zombie. We’re basi-
cally going to be a walking haunted
house.” —Nick Remsen
It’s a “dancing-night drink.”
Music to dance to? I love disco.
I like it all as long as there’s a
good beat and somebody sing-
ing—an actual voice—like Mi-
chael Jackson or Madonna. You
can never go wrong with them.
What about karaoke? I love
George Michael. At the last
Balenciaga show, they played
a George Michael song and
Ideal night in? At home with
my family, having dinner with
my son, putting him to bed and
then enjoying a nice glass of red
wine with my husband—discuss-
ing each other’s days, or art.
My husband usually likes stron-
ger, deeper, full-bodied wines;
I like lighter, so Pinot Noir is
our meeting ground.
—Edited from an interview
with Donna Bulseco

NIGHT FLIGHT TO...

A SNEAKERS STORE?
M ANUFACTUR E DE H AU TE H OR LOGER IE
Travelers often squeeze in a little shopping, but these three
retail destinations are (almost) worth a special trip

ALCHEMIST // Two locations in

Miami Beach, Florida // It may
be a few blocks from the beach,
but Alchemist isn’t about flip-
flops, instead stocking brands like
Rick Owens and Off-White. The
Lincoln Road outpost (pictured) is
Instagram-ready, situated in a
glass box atop a Herzog & de
Meuron-designed parking garage.
What’s in store this season:
Vintage denim with a high-fashion
twist, said co-owner Roma Cohen.
“Brands like Fear of God are mak-
ing jeans with a vintage-looking
wash and those such as Vete-
ments are buying vintage stock
and reconstructing it.”

THE BROKEN ARM // Paris,

France // Grab a coffee at Broken
Arm’s cafe next door and then im-
merse yourself in the world of Eu-
ropean fashion at the cozy shop in
Paris’s Marais district. Scan
through selections from Raf Si-
mons, Prada and Loewe, but don’t
leave without checking out the col- TONDA CHRONOR
lection of rare, vintage fashion ANNIVERSAIRE
books. What’s in store this sea-
son: Special-edition printed shirts
by Prada, which are exclusive to
the Broken Arm “We introduced
them and they were among the
most wanted pieces in the shop,”
said owner Guillaume Steinmetz.

SNEAKERBOY // Sydney and

three other locations in Aus-
tralia // Sneaker freaks camp
out for days outside Sneaker-
boy’s four shops for regular re-
leases of limited-edition kicks,
but you don’t need to be an Air
Jordan obsessive to enjoy the
assortment of envy-inducing
Nikes and Adidas. What’s in
store this season: Unfussy re-
MICHAEL STAVARIDIS (LEFT)

issued styles, said founder

Chris Kyvetos. “Really interest-
parmigiani.ch
ing at the moment is a return
to classic mid-1990s and early
2000s running silhouettes, es-
pecially the Nike Air Max 95,
96 and 97.” —Jacob Gallagher
P2GW309000-0-W00600-1--------AL

W6 | Friday - Sunday, November 4 - 6, 2016 THE WALL STREET JOURNAL.

OFF DUTY

Into the Woods…and Parking Lots

Floral designers are foraging plants in the most unlikely locations and creating beauty with the seemingly motley booty

BY COURTNEY BARNES

P
eering into a posh
storefront window
along Old Bond
Street in the late
1920s, Londoners
surely didn’t expect to see
urns spilling over with wild
clematis gone to seed, hops
and simple berry-covered au-
tumn branches. But that is

what then-budding florist
Constance Spry had daringly
arranged for Atkinsons per-
fumery. Mixing humble flora
scavenged in the countryside
with a modicum of shop-
bought green orchids, she
charmed passersby and
changed the fashionable set’s
perceptions of what a bou-
quet could be. Later, Spry
would use masses of delicate
cow parsley, aka Queen
Anne’s lace, at the wedding of
Lady Violet Bonham Carter’s
daughter, Laura.
Today, Spry’s influence is
newly relevant. As uniform,
commercial bouquets yield to
looser, more organic arrange-
ments, a fresh crop of in-
trepid designers are finding
scavenging alluring again.
Louesa Roebuck and Sarah
Lonsdale, co-authors of “For-
aged Flora” (Ten Speed
Press), believe the current im-
pulse to gather roadside vege-
tation is a natural offshoot of
the trend toward eating sea-
sonal, local produce that you
might have even foraged
yourself. Plants such as wispy
wild fennel, stretching up to
12 feet in length and not typi-
cally sold in a florist’s shop,
have a rarefied, wayward
beauty that sets them apart
from mass-grown blooms,
said the authors.
‘Choosing to see
natural beauty
everywhere is much
of the art. It’s right in
front of our eyes.’
“I’ve been bringing home
strays—flora and animals—
since I was four,” said Ms.
Roebuck, a California-based
artist who took a circuitous
path to working with flowers
professionally. In the early
2000s, she was hauling un-
usual grasses and bundles of
fennel into her own boutique-
cum-gallery space, hanging
them beside clothes by avant-
garde Belgian designer Martin
Margiela. She refused to use
out-of-season, imported flow-
ers, partly because of her en-
vironmental ethos but also
because flower-market offer-
ings bored her.
Her scavenged installations
did not go unnoticed, and af-
ter the 2008 economic crisis
closed her shop, Ms. Roebuck
ONE MAN’S WEEDS For this arrangement, Brooklyn floral designer Amy Merrick collected shrub-rose hips from a road median, fennel flower from a friend’s garden and
goldenrod from an abandoned parking lot. See an identification guide to all the plants she used at wsj.com/design.
found herself arranging flow-
ers for Vivienne Westwood,
Berkeley restaurant Chez Pa-
nisse and the wedding of pho-
tographer Todd Selby and
Danielle Sherman, co-founder
of fashion house the Row. Es-
chewing a conventional bou-
quet, Ms. Sherman carried a
spare trailing passion vine—
foraged from a chain-link
fence on a construction site in
L.A.’s Koreatown—interlaced
with orchids purchased from
Sonoma County grower Cali-
fornia Carnivores.
“People are told too many
rules when it comes to ar-
ranging,” said Ms. Roebuck.
“If an uber-long vine makes
you happy, bring it on in and
let it meander over the edge
of a table or across a book-
shelf. Personally I like very
large arrangements kept loose
and uncontrived, or minute
clippings.” In journalist Kevin
West’s Los Angeles apart-
ment, she draped a 19th-cen-
tury portrait with a louche
cache of passionflower vines
she’d found in a Marin County
park rangers’ equipment lot
and removed with the bless-
ing of a friendly ranger.
Ms. Roebuck also mixes in
magnolia branches, which
show all stages of the blos-
som’s life cycle, from bud to
aged leathery petals. Fre-
quently the limbs are headed
for the city wood chipper
when she finds them.
fice asking for permission to
cut, and pay for, a discrete
clipping of wild jasmine she
spied climbing up the side of
the building.
“Choosing to see natural
beauty everywhere is so much
of the art, and I find it em-
powering that all of these
things are right in front of
our eyes if we just start to
look,” said Ms. Merrick.
Recently she combed
through alleyways and
friends’ yards for untended
rain-tree pods and evergreen
branches, some of which
ended up in a creation for
Vogue, and she encourages
her workshop students to
hunt for their own plant ma-
terial, even weeds growing in
sidewalk cracks. “I’ve learned
that arrangements look truly
natural, rather than ‘faux nat-
ural,’ when you do this.”
On her solar-powered
farm, Mandy O’Shea, a horti-
culturist, farmer and floral
GREEN SWEEP In a Napa Valley home, flora designer Louesa designer based near Athens,
Roebuck, co-author of ‘Foraged Flora’ (Ten Speed Press) combined Ga., grows uncommon variet-
roses cut from the homeowner’s garden with a foraged 7-foot ies of dahlia, garden roses,
wild rose cane. ranunculus, anemone and
more for her design business.
But she also likes to use for-
“You don’t have to own a yard for a nearly microscopic aged elements—native per-
truck and drive around for wild violet waiting to be simmon, Jackson vine, sweet
hours to bring non-floral-shop placed in the tiniest glass.” autumn clematis and even
elements into your home,” Have a pair of hand prun- naturally shed feathers—in
she said, “Keep your eyes ers on hand, too. Amy Mer- her arrangements.
open. Talk to the landscaper rick, a Brooklyn floral de- “When working on a party
clipping foliage down the signer, educator and Spry or wedding, I prefer to forage
street. Or search your back- devotee, walked into a law of- at least some of my foliage
F. MARTIN RAMIN/THE WALL STREET JOURNAL, FLORAL STYLING BY AMY MERIICK (TOP); LAURIE FRANKEL/TEN SPEED PRESS
from the site, if allowed. It
makes the décor more rele-
vant and unforced,” she said.
But be aware of some guide-
lines, advised Ms. O’Shea.
Besides getting permission to
snip, use a guidebook to avoid
plants that are poisonous,
protected, an important food
source for wildlife or hyper-
allergenic; and stay clear of
invasive plants with viable
seeds so you don’t inadver-
tently spread them.
Ms. O’Shea often knocks
on strangers’ doors when
she spies a beauty in some-
one’s yard: “I’ve never been
turned away and have actu-
ally met some really nice
people this way.” Even in the
wilderness, though, be sure
to leave at least 75% of a
plant (and much more for
trees), allowing future prop-
agation. Wherever you are,
Ms. Merrick added, “It
should look as if you were
never there.”
Ultimately, foraged items
in arrangements get people
talking, said Ms. O’Shea.
“They see this pod that
maybe they have never seen
before or plants they’ve al-
ways considered weeds
brought to light in a new and
flattering way. When we find
a familiar object in a com-
pletely different context, it
forces us to re-evaluate the
world ever so slightly, and I
love that.”

AFRICAN SCENE
From upcycled oil drums to culture-clash chairs, the best of the continent’s modern design

 Patricia
Urquiola Sefefo Studio Hamed Ouattara Gold
Color Series Cabinet, about $12,000, Southern
Dining Table Guild, +27-21-461-2856
by Mabeo,
$3,800, Mabeo, ALTHOUGH THE NEW BOOK “Africa Rising” (Ge- scavenged British cafe chair with colorful geometry
+267-390-8736 stalten) asks that Africa be regarded as a continent of inspired by ceremonial Nigerian textiles in a piece
distinct countries, not one vague idea, the works of called Ijoko Alejo (“Guest Chair,” part of a 2015 art
design it features share a characteristic: storytelling. installation). “I always felt jealous that [my parents]
“Gold” is the name that designer and manufac- had this bold heritage,” said Mr. Ilori.
 Ijoko Alejo turer Hamed Ouattara, a Burkina Faso resident, The Sefefo Color Series Dining Table also speaks
Chair from Home pointedly gave his cabinet, made of recycled materi- to cultural cross-pollination. For this table of panga
Affairs Collection, als such as oil barrels. “The piece is about how one panga wood, Botswana designer Peter Mabeo and
$1,557, Yinka Ilori, man’s trash can become another man’s treasure,” he his team applied traditional woodworking to Spaniard
VEERLE EVENS (CHAIR)

+44-74-3808- said. Of the case’s art deco-flavored facade, inspired
8669 by traditional ancestral textiles, the Paris-educated
designer added, “I would say art deco is African.”
London artist Yinka Ilori, born of a Nigerian cou-
ple, fused his and his parents’ cultures by covering a
Patricia Urquiola’s design, adding energetic yellow
paint at her suggestion to the hand-fluted pedestal.
“It is an expression of relationships between people
from different parts of the world,” said Mr. Mabeo.
—Augusta Greenbaum
P2GW309000-0-W00700-1--------AL

THE WALL STREET JOURNAL. Friday - Sunday, November 4 - 6, 2016 | W7

OFF DUTY
ON WINE: LETTIE TEAGUE

In Oregon, Making Chardonnay Cool Again

OREGON IS a single-grape state for ing, judging by the wines we
many wine drinkers, as tied to Pi- tasted that day and those I had
not Noir as Wisconsin is to a wheel later that week from other first-
of cheese. And yet sometime in the rate producers, like Soter Vine-
very near future, Oregon may be- yards, Domaine Drouhin and Stol-
come famous for a second grape. ler Family Estate.
Some of the state’s best winemak- Style varied greatly from one
ers are betting their reputations, if producer to the next: The 2013
not their fortunes, on Chardonnay. Brick House Essence Chardonnay
The grape has been planted in and impressive 2014 Roco Knudsen
Oregon for decades, but its pres- Vineyards Chardonnay were more
ence has been pretty low profile restrained, while the 2013 Antica
for much of that time. “I’ve been Terra Aurata Chardonnay and 2014
making Chardonnay since 1995, Bergström Old Stones Chardonnay

BRICK HOUSE WINES; F. MARTIN RAMIN/THE WALL STREET JOURNAL (BOTTLES)

and I still have people showing up
at my winery who don’t know,”
said Doug Tunnell, winemaker and
owner of Brick House Wine Com-
pany in Newberg, with a laugh.
Mr. Tunnell was one of five
winemakers I met with a few
months ago—on the porch of Ab-
bey Road Farm Bed & Breakfast in
Carlton—for an informal tasting
and chat about the current state of
Oregon Chardonnay. The others in-
cluded Josh Bergström, of Berg-
ström Wines; Ken Pahlow, of Wal-
ter Scott Wines; Rollin Soles, of
Roco Winery; and Maggie Harri-
son, of Antica Terra.
Although they’re well-known for
their Pinot Noirs, these vintners
are among a small but growing
group of Oregon producers who
are also making highly regarded
Chardonnays—even if the wines
are still under the radar for all but
the most obsessive oenophiles.
One of the biggest problems for
Oregon Chardonnays, according to
Mr. Bergström, is the overall “lack
of confidence” many drinkers have
in the wines, and perhaps a linger-
ing prejudice against Chardonnay
in general. Mr. Bergström, who has
been making Chardonnays since
2000, recalled how, in the early
years, even wine professionals were
uninterested in his bottlings. “I re-
member standing at trade tastings,
and people would say, ‘Let’s just
taste the Pinots,’ ” he said.
His response to that indifference
was decidedly daring: He tripled
the price of his Chardonnays from
one year to the next. For the 2006
Bergström Sigrid Chardonnay, re-
leased in 2008, “I went from $25
to $75 in one year,” he said.
ONE VINE DAY Grapes are harvested at Brick House Wines, which has been making Chardonnay for over 20 years.
For Mr. Bergström, the price in-
crease was about giving his custom-
ers confidence in his wines. “It was
saying, ‘You need to put this in your
mouth,’ ” he said. The move
prompted “hate mail” from outraged
Some of the state’s
best winemakers are
betting their reputations,
if not their fortunes,
on Chardonnay.
customers, said Mr. Bergström.
Some 150 demanded to be taken off
the winery mailing list. Neverthe-
less, the strategy succeeded. Today,
his Sigrid Chardonnay sells for $90
and is considered one of the very
best from Oregon, if not the U.S.
Mr. Pahlow has been making
prized Chardonnays and Pinot
Noirs (and a little Pinot Blanc, too)
for decades, most recently at Wal-
ter Scott Wines, the Eola-Amity
Hills winery he owns with his wife,
Erica Landon. Chardonnay cur-
rently accounts for about 30% of
his production, and Mr. Pahlow ex-
pects that to rise to 50% by 2018.
The number of acres in the state
devoted to growing Chardonnay is
increasing, too, from 842 acres in
2005 to 1,564 in 2015, according to
the Oregon Wine Board. Mr. Berg-
ström, who is also increasing his
Chardonnay production, said he
thought more winemakers in the
state were interested in the grape
because “Chardonnay does well in
‘bad’ Pinot Noir years.”
In cooler years, Chardonnay
vintners can “lean into” the wines,
said Ms. Harrison. “Oregon, with
its marginal climate giving rise to
were lush and layered. The 2014
Nuthouse Chardonnay that Mr.
Soles brought along from Argyle
Winery, where he was the long-
time winemaker and now is a con-
sultant, had a savory, mineral
character.
Mr. Pahlow brought two wines
that exemplified the range of
styles: his 2015 Walter Scott La
Combe Verte Chardonnay was
straightforward and bright; his
2014 Walter Scott Freedom Hill
Chardonnay was rich, marked by
notes of spice and toast.
Although each wine was an un-
deniably individual expression of
the Chardonnay grape, they all
shared a connective thread that
was decidedly Oregonian: an inten-
sity of fruit, coupled with a firm
cool growing seasons and naturally mineral thread. Whether powerful
elevated acid, may be one of the or restrained, elegant or assertive,
few places in the world where one all were beautifully balanced.
can actually pursue intensity,” she As the winemakers admired one
added in a follow-up email. another’s efforts, I was pleased—
Of course, it wasn’t so long ago but not particularly surprised—to
that Oregon winemakers were pur- hear that they met regularly, with
suing an altogether different white each other and other vintners, to
grape: Pinot Gris. In the 1990s, taste wines. “The more time we can
many producers and wine-trade spend together, the more we learn,”
pundits thought it would be the Mr. Pahlow said. Mr. Soles added:
state’s signature white. One reason “It’s the idea that a rising tide lifts
was revenue. “We needed a wine all boats. There’s still the belief that
that we could get cash for right we are all in this together.”
away,” Roco’s Mr. Soles said. All they need now are a few
(White wines don’t need to be aged more wine drinkers who under-
for an extended period and can be stand the exciting developments
sold the following spring.) unfolding in the state. “Chardon-
Now many producers are up- nay is one of the most notable va-
rooting their Pinot Gris vineyards rietals in the world,” said Mr. Berg-
and replanting them with Char- ström. “We need to educate our
donnay—even though, as Mr. Tun- consumers that our wines are seri-
nell observed, “Chardonnay is so ous.” And seriously delicious, too.
much more demanding than Pinot
Gris.” It is, however, more reward-  Email Lettie at wine@wsj.com

OENOFILE // FIVE OREGON CHARDONNAYS THAT WILL MAKE YOU RECONSIDER THIS MUCH-MALIGNED WHITE

2013 Brick House Es-
sence Chardonnay $45
Doug Tunnell has been
producing first-rate Char-
donnay for more than 20
years. His Essence, only
made in certain years, is a
single-parcel selection
that’s bottled unfiltered
and unfined. Marvelously
lush, it has an impres-
sively long finish.
2014 Roco Knudsen
Vineyards Chardonnay
$60
Rollin Soles has long-
standing connections to
some of the best vine-
yards in Oregon, includ-
ing Knudsen. This full-
bodied wine is marked
by beguiling aromas of
spice and pear, and a
bright mineral note.
2014 Bergström Old
Stones Chardonnay $35
Produced from the highly
regarded Temperance Hill
Vineyard in Eola-Amity
Hills, this entry-level
Chardonnay displays the
hallmarks of the Berg-
ström style: lots of con-
centration and power, bal-
anced by wonderfully
fresh and lively acidity.
2013 Antica Terra Aurata 2015 Walter Scott
Chardonnay $90 La Combe Verte
Maggie Harrison turns Chardonnay $30
out some of the most Walter Scott is dedicated
sought-after small-pro- to a diverse sampling,
duction wines in Oregon. offering five Chardon-
Her Aurata Chardonnay nays from various vine-
(178 cases) is a power- yards and clones. This
house of a wine. Barrel wine is a decidedly
fermented in new French Chablis-like example:
oak, it has notes of toast lithe and lively, with a
and crème brûlée. mineral edge.

SLOW FOOD FAST: SATISFYING AND SEASONAL FOOD IN ABOUT 30 MINUTES

Soy-Honey Chicken With Lemon Broccoli

BRYAN GARDNER FOR THE WALL STREET JOURNAL, FOOD STYLING BY HEATHER MELDROM, PROP STYLING BY ALEX BRANNIAN; ILLUSTRATION BY ALEXANDER WELLS

IT TOOK MUCH LONGER than expected
to launch Loring Place, chef Dan Kluger’s
new restaurant set to open in mid-No-
vember in Manhattan’s Greenwich Vil-
lage. But feeding his family over the last
couple years did afford Mr. Kluger the
opportunity to hone his home cooking.
“This comes straight out of my week-
night-meal playbook,” he said of this rec-
ipe for chicken legs with a soy-honey
The Chef: glaze plus a side of lemony steamed
Dan Kluger broccoli. Even a celebrated chef, it
seems, must contend with critics at
His Restaurant: home. “My kids can be kind of picky,”
Loring Place, Mr. Kluger said.
opening in Novem- The chicken’s lip-smacking, sweet-
ber in New York salty marinade, enhanced with garlic and
citrus zest, has proven a reliable crowd
pleaser. For maximum impact, let the
meat marinate up to a day in advance of
cooking. But if that’s not in the cards,
just 10 minutes of marinating will impart
plenty of flavor.
To cook the broccoli, Mr. Kluger
swears by microwaving. “It’s foolproof. It
comes out perfect every time,” he said.
There’s still that peanut gallery to con-
sider, however, when it comes to garnish-
ing the broccoli. “At home I might leave
off the lemon zest for my kids,” Mr.
Kluger admitted. You can make that call
based on the crowd you’re cooking for,
but the citrus certainly does make this
dish sing. —Kitty Greenwald

What He Is TOTAL TIME: 35 minutes SERVES: 4

Known For:
Taking produce- 3 pounds skin-on chicken ground black pepper 2 tablespoons honey
driven cooking from legs, thighs and drum- Zest of ½ orange 1 large head broccoli, cut
hippie to haute. sticks separated Zest of 2 lemons, plus juice into 1-inch florets (about
Raising city dwell- 2 cloves garlic, minced of 1 lemon 8 cups)
ers’ expectations of Kosher salt and freshly 3 tablespoons soy sauce 1 tablespoon olive oil
wholesome eating.
1. Preheat oven to 375 degrees. In a bowl, oven. Reserve marinade. Roast until just
toss chicken with garlic, a generous pinch of cooked through, about 25 minutes. Brush
black pepper, orange zest and half the lemon chicken with marinade twice during roasting.
zest. Rub seasoning all over chicken. In a me- 3. Meanwhile, toss broccoli with olive oil and a
dium baking dish, mix soy sauce, honey and pinch of salt. Place in a microwave-safe bowl
lemon juice until honey dissolves. Lay chicken and cover tightly with two layers of plastic
in marinade, flesh-side down, and marinate at wrap. Microwave on high until broccoli is ten-
least 10 minutes. (If marinating more than 1 der but still has some crunch, 2-3 minutes.
hour, make sure marinade doesn’t cover skin.) Transfer broccoli to a serving bowl. Top with
2. Remove chicken from marinade and trans- remaining lemon zest.
fer to a roasting pan, skin-side up. Lightly 4. Serve broccoli alongside chicken. Drizzle VICTORY ZAP Just a couple of minutes in the microwave cooks broccoli to
brush marinade over chicken, then transfer to chicken pan juices over top. the ideal crisp-tender point.
P2GW309000-0-W00800-1--------AL

W8 | Friday - Sunday, November 4 - 6, 2016 THE WALL STREET JOURNAL.

OFF DUTY

ALFA ROMEO
RARIN’ REBOOT The Alfa Romeo Giulia
Quadrifoglio has been setting speed records.

RUMBLE SEAT: DAN NEIL

2017 Alfa Romeo Giulia: E Pluribus Awesome

AS I FLEW OUT to California last
week to drive the 2017 Alfa Romeo
Giulia Quadrifoglio at Sonoma Race-
way, I could hardly fit my skepti-
cism in the overhead. We are in
Year Seven of Fiat Chrysler Auto-
mobiles’ CEO Sergio Marchionne’s
Five-Year Plan. This is the part
where the Italian brands Maserati
and Alfa Romeo are transformed
into profit-spewing global luxury
brands, in the mold of Porsche.
Molto fortuna, Bubba.
But give Mr. Marchionne credit.
The colossal machine he has built is
moving. FCA’s growing nimbleness
on the product side has helped it
catch the luxury-SUV wave at a pro-
pitious crest. Just arriving in your
local Nordstrom’s parking lot this
fall, and taking up two spaces, is
the new Maserati Levante SUV
($72,000), which looks enough like
2017 ALFA ROMEO GIULIA QUADRIFOGLIO
Base price: $70,000 (est.)
Powertrain: front-mounted, twin-
turbocharged, direct-injected 2.9-li-
ter DOHC V6 with variable boost,
variable cam phasing, cylinder deac-
tivation and stop-start; eight-speed
dual-clutch automatic transmission;
rear-wheel drive with torque vector-
ing
a Cayenne to make you sneeze. The
Levante has the potential to double
Mazzer’s North American sales,
which is always a winning strategy.
And now it’s Alfa Romeo’s turn
in FCA’s premium/luxury brand sau-
sage grinder. The company has in-
vested five billion euros into a total
wipe and reboot of Alfa Romeo, in-
cluding: a freshly automated assem-
bly hall in Cassino, Italy; a new
lightweight, front-engine/rear-drive
(or AWD) architecture; and a brace
of wee turbo’ed engines, also de-
signed in-house, with some bor-
rowed talent from Ferrari.
The Giulia debuts the brand’s vo-
luptuous form language, a blown-
glass bottle from which decants
Italian masculinity. The sedan sil-
houette is conservative but the face,
the historic hawk-bill grille, is
nicely dramatic, modernized with a
Power/torque: 505 hp at 6,500
rpm/443 pound-feet at
2,000-4,800 rpm
Length/weight: 182.6 inches/
3,800 pounds
Wheelbase: 111.0 inches
EPA fuel economy: 16/24 mpg,
city/highway (est.)
Trunk volume: 14 cubic feet (est.)
dull-gleaming V, for veloce? The
Quadrifoglio is skirted-round with
carbon aero bits—including an ac-
tive front splitter—and the five-
lobed alloy wheels look amazing,
especially wrapped in a haze of
Pirelli smoke.
The new Alfa brand means to be
smart, tech-intensive and aspira-
tional, with dominant chromosomes
of gorgeousness descended from
Italian couture and industrial de-
sign. With the new RWD/AWD pow-
ertrains, Alfa can again be taken se-
riously by enthusiasts.
Most important, Alfa is being re-
born as an honest-to-God volume
auto maker, offering mass-class on
a scale that will make old-time
Alfistis blow out their spark plugs.
The Giulia sedan is only the first of
a reported six vehicles to be built
on the new Giorgio architecture, in-
cluding two crossover/SUVs. And no
matter how fine the Giulia sport se-
dan turns out to be (absolutely fan-
tastic, by the way), everyone knows
Alfa’s long-term health depends on
the bucks-up SUV and crossover
models to follow.
Mr. Marchionne has said he
would like to see Alfa Romeo brand
sales in the neighborhood of
400,000 units annually, by the end
of 2018, a mere eightfold increase
over 2015. He also asked for a pony.
For these reasons and more, the
Giulia project seemed pretty un-
promising: Here’s yet another his-
toric European marque, being rein-
vented out of thin air and exploited
to sell luxury crossovers to people
who wouldn’t know Ascari from
Campari. Thanks, Fiat.
But then I drove the Giulia, and
it absolutely shut my mouth. Far
from irrelevant, the Giulia Quadrifo-
glio turns out to be instantly indis-
pensable, a must-drive: certainly
the lightest- and liveliest-handling,
the most poised, pointable and neu-
tral sport-sedan I’ve ever laid hands
to. I love the steering wheel so
much I’m thinking of having my
palms upholstered in faux suede.
Here’s a quick sketch: midsize,
five seats, majority-steel structure,
powered by a twin-turbo 2.9-liter
V6 (505 hp, 443 lb-ft between
2,000-4,800 rpm); eight-speed dual-
clutch automatic (no manual trans-
mission); and rear-wheel drive with
fully articulated torque vectoring.
The Quadrifoglio has a curb weight
of 3,800 pounds, with 50/50 weight
distribution, front/rear. On the
strength of its class-leading weight-
This is the lightest- and
liveliest-handling, the
most poised, pointable
and neutral sport-sedan
I’ve ever laid hands to.
to-power ratio (7.5 pounds per hp)
the Quadrifoglio snarls to 60 mph
in 3.8 seconds, and boasts a re-
ported top speed of 191 mph.
Those are big numbers. Here’s a
bigger one: The Alfa Q ship laid
down a blazing 7:32 minute lap
time at the Nürburgring, a record
for a series production four-door
sedan.
You might wonder how such an
overachieving car emerged from a
milieu that has so often rewarded
mediocrity. I sure did. It certainly
helped that the stakes were so high.
Legend has it Mr. Marchionne him-
self sent the early Giulia prototypes
back to the drawing board, declar-
ing them uncompetitive with the
German competition.
That decision set the Giulia, the
entire Alfa reboot back many
months. In the end, Alfa was
obliged to rebuild its own silo, so to
speak. For example: The Giorgio ar-
chitecture was developed in-house
and purpose-built for Alfa Romeo.
This is a costly bit of kit. While the
passenger cell is made of steel, the
front and rear sub-frames, suspen-
sion and brake componentry are all
aluminum, as are the doors and
fenders. The drive shaft is made of
carbon fiber.
The Quadrifoglio adds lightness
with a carbon-fiber roof and hood,
as well as optional carbon-ceramic
brakes, which are 50% lighter than
iron rotors. Why not? It’s only
money.
Alfa also developed its own en-
gines: The Quadrifoglio’s bi-turbo,
2.9-liter, 90-degree V6 is an evolu-
tion of Ferrari’s turbo V8, from
valvetrain design to cylinder bores.
At full throttle between the corners,
the Quadrifoglio climbs Sonoma’s
short, steep hills like they weren’t
even there.
Next year Alfa will start shipping
the Giulia Ti, powered by a 2.0-liter,
280-hp four cylinder, an engine also
of the company’s own design. I was
able to put some miles on the Giulia
Ti on the roads around Napa, and,
on balance, this would be the trim
level I recommend. The Ti is plenty
athletic for real-world driving,
while the touring tires are quieter,
ride better and offer more security
than the Quadrifoglio’s Pirelli P
Zero Corsa gumballs.
Actually, on a cool, damp
Sonoma Raceway, the Pirellis were
not really working that great. Un-
der heavy braking the front tires
skittered and hunted for grip, and
the car pushed wide and got loose
before the stability-control inter-
vened.
Until l get this car on up-to-temp
tires, I’ll remain officially skeptical.
That way maybe they will send me
another one. But the Quadrifoglio
absolutely shakes my faith in faith-
lessness. All of a sudden, I want to
believe in Alfa Romeo.

VERY EASY RIDER

An app-controlled electric go-kart that’s (pretty much) impossible to crash
REMEMBER THE GO-KART
you never got as a child? The
one your mom called “too
dangerous—end of story”?
With the all-electric Arrow
Smart-Kart, on sale this week,
you can right the wrongs of
the past, for the next genera-
tion at least, and do so with-
out putting your children at
risk of head trauma.
The Arrow is sized for chil-
dren age 5 to 9, but a deter-
mined adult can squeeze be-
hind the wheel. Yes, we drove
it. Yes, we were grinning like
imbeciles the whole time.
The younger set will be
thrilled by the Arrow’s sur-
prisingly brisk 12-mph top
tate this on rougher roads,
slap optional friction-reduc-
ing drift rings over the tires.)
If putting fledgling drivers
behind the wheel of a vehicle
with dual 250W electric mo-
tors gives you pause, rest as-
sured that safety features
abound. Once the Arrow is
tethered to an app over direct
Wi-Fi (no need to scour your
cul-de-sac for a network),
parents can set speed limits,
change gears and, thankfully,
tap an emergency brake if the
child is headed for trouble.
The geo-fencing feature shuts
down the vehicle should it
stray beyond boundaries
you’ve traced on a map. And
supervised mode for children
with better driving records).
The hallmark safety fea-
ture, however, is the anti-col-
lision system. Like premium
cars, the Arrow has a front
sensor that detects obstacles
and triggers the brakes.
Driving is only the begin-
ning, though. During our test
run, Actev Motors CEO and
co-founder Dave Bell pointed
out a front-mounted red laser,
which could one day (via a
software upgrade and some
accessories) allow multiple
Arrows to play dogfighting
games. “Like laser tag,” he
said, but on wheels.
We’ve never been more
ELLIOT STOKES

speed. Even more exciting, the kart won’t even start jealous of our children. $1,150
the Arrow will “drift,” or skid, without the parents’ app acti- as shown, actevmotors.com
through tight turns. (To facili- vated (though there’s an un- —Wilson Rothman
P2GW309000-0-W00900-1--------AL

HOMES | MARKETS | PEOPLE

© 2016 Dow Jones & Company. All Rights Reserved.

|
MANSION
UPKEEP | VALUES | NEIGHBORHOODS
THE WALL STREET JOURNAL.
| REDOS
‘A great city is not to be confounded

|
with a populous one.’ —Aristotle

SALES | FIXTURES | BROKERS

Friday - Sunday, November 4 - 6, 2016 | W9

1 2 3
ALSTON THOMPSON PHOTOGRAPHY FOR THE WALL STREET JOURNAL (#1, #3)

BOONE SPEED FOR THE WALL STREET JOURNAL (#2)

7
THE NEW 4

SILICON
CITIES
In search of more space and
a slower pace, tech executives
are seeking out new locales
from Oregon to Alabama.

6 BY CECILIE ROHWEDDER 5

WHEN JEFF HANLON left Silicon Valley last year, he

found the seemingly impossible: a town with a lively
startup scene, stately houses and home prices far below
those in the Bay Area and other urban technology hubs.
So Mr. Hanlon traded a 550-square-foot apartment

ART MERIPOL FOR THE WALL STREET JOURNAL (#4 & #5)
TONY LUONG FOR THE WALL STREET JOURNAL (#6, #7)

in Mountain View, Calif., that he rented for $2,400 a

month for a 4,000-square-foot house in a historic
neighborhood of Richmond, Va. Purchased for
$710,000 last year—a pittance by Silicon Valley stan-
dards—the 1902 home has five bedrooms, a formal
dining room and an eat-in kitchen, where Mr. Hanlon
and his husband, Rem Jurado, hosted extended family
last Christmas.
“A house like this would have never been an op-
tion” in Silicon Valley, says Mr. Hanlon, director of
customer care and education at IMVU, an online gam-
ing company in Mountain View, where he still travels
Please turn to page W10

ROOM TO ROAM 1. The dining room in Jeff Hanlon and Rem Jurado’s home in Richmond, Va. 2. Todd Edman, CEO of restaurant-software company Waitrainer, with daughter Lyra in their backyard in
Eugene, Ore. 3. The exterior of Messrs. Hanlon and Jurado’s home. 4. Owen Duncan feeding pigs. 5.The exterior of Donovan and Kaitlin Duncan’s Alabama home; hobby farmers, the couple sell produce
and meat to high-end restaurants. 6.The exterior of Gray and Tara Chynoweth’s home in Manchester, N.H. 7. The Chynoweths in their Manchester home.

HOUSE
WHERE TRUMAN CAPOTE DROPPED IN FOR SCOTCH OF THE DAY
When they first opened, two Manhattan apartment towers drew artists and business titans alike. The towers wsj.com/houseoftheday
have nearly floor-to-ceiling windows and are among the buildings’ prized features; the views are ‘to die for.’

BY KEIKO MORRIS

CAPOTE, CRONKITE AND

CARSON all called 860/870
United Nations Plaza home.
KNIGHT FRANK

Since opening in the glamor-

ous ’60s, these identical, 39-
story towers in Manhattan’s
Midtown East neighborhood Italy
were the “it” buildings for A grand villa in the hills
luminaries of business and overlooking Florence
entertainment.
The buildings were “new
and fresh,” said Kathy
Sloane, a Brown Harris Ste-
vens broker who is market-
ing two penthouse duplexes
RUSSELL PRATT PHOTOGRAPHY

in 870 United Nations Plaza.

At the time, “this was the
edgy new destination.”
In addition to writer Tru-
man Capote, comedian
Johnny Carson, news anchor
Walter Cronkite, photogra-
phers Richard Avedon and United States
Gordon Parks had apart- An artist’s studio
ments here, as did actor Yul grows into a house
Brynner. Among the current
DOROTHY HONG FOR THE WALL STREET JOURNAL

residents are real-estate de-

veloper Sheldon Solow and
publishing mogul S.I. New-
house Jr. Despite the high-
profile list, residents at the
towers have long cultivated
a low-key vibe that contin-
ues today.
IMAGE FACTORY

Overlooking the East

River, the towers have nearly
floor-to-ceiling windows,
which are among the build-
ings’ prized features, resi- Australia
MODERN LOVE The 39-story mirror towers at 860 and 870 United Nations Plaza have apartments that overlook the East River. The dents say. A minimalist seaside
buildings’ two roof decks offer 360-degree views. Please turn to page W12 home in Sorrento
P2GW309000-0-W01000-1--------AL
W10 | Friday - Sunday, November 4 - 6, 2016
Continued from page W9
regularly. “I love that Rich-
mond has a similar vibe to
San Francisco and has little
technology companies scat-
tered throughout.”
Tech jobs are multiplying
across America, attracting
executives and entrepreneurs
drawn to lower living costs
and a slower pace of life.
Places like Eugene, Ore.,
Manchester, N.H., and Hunts-
ville, Ala., may have around
200,000 residents each, but
they also have fledgling
startup scenes, regional of-
fices of large tech firms and
major universities or re-
search centers.
And all of them have
home prices that are a frac-
tion of those in Silicon Val-
ley. In the San Jose area, the
median sales price was
$841,000 in the first nine
months of this year, up 8%
from the same period last
year, according to data from
Realtor.com, the website of
the National Association of
Realtors (the site is owned
by News Corp., which owns
The Wall Street Journal).
In some places, the influx
of tech money is causing
house prices to rise. In Eu-
gene, the median sales price
of $239,000 in the nine
months through September
marked a 7% jump from the
same period last year, ac-
cording to Realtor.com.
For now, however, small
tech hubs are a bargain for
buyers. Here is a look at
some alternatives.
INSTEAD OF WASHINGTON,
D.C., TRY RICHMOND, VA.
When Mr. Hanlon had a
chance to move out of Sili-
con Valley, he first consid-
ered northern Virginia. But
prices in the tech-heavy area
around Washington, D.C., he
found, weren't much better.
So after searching real-es-
tate website Redfin, he ven-
tured south to Richmond,
the state’s capital with about
220,000 residents. The first
house he saw, in February of
last year, was a historic brick
home with white columns
and a modern interior. Mr.
Hanlon made an offer the
following week and bought
the house in March 2015.
Now he and Mr. Jurado,
26, enjoy the coffee shops in
their neighborhood. Mr. Han-
lon, 42, telecommutes to his
Bay Area job. And lower
wages and office rents al-
lowed the pair to start their
own business, a houseclean-
ing franchise called MaidPro.
Last month, Washington,
D.C.-based CoStar Group, an
online marketplace for com-
mercial real estate, said it
plans to base its research
center in Richmond, creating
about 730 jobs there.
Founder and CEO Andrew
Florance said the firm chose
Richmond for its educated
workforce, office rents half
of those in D.C. and more af-
fordable housing.
The median house price in
Richmond was $229,000 in
the nine months through
September, according to Re-
altor.com, compared with
$392,000 in the Washington,
D.C., metro area.
INSTEAD OF AUSTIN, TEXAS,
TRY HUNTSVILLE, ALA.
Donovan Duncan, president
of media at Curse, achieved
an entrepreneur’s dream in
August, when the Huntsville,
Ala.-based, online gaming ser-
vices company was bought by
a unit of Amazon for an un-
disclosed amount. But Mr.
Duncan, 33, is determined to
stay put.
“The cost of living here is
just incredible,” says Mr.
Duncan, 33. His house in
Gurley, outside Huntsville, is
a 2,600-square-foot home on
a 30-acre lot that he bought
for $400,000 in 2014. Mr.
Duncan and his wife, Kaitlin,
27, are hobby farmers, rais-
ing pigs and chicken whose
meat they sell, along with
eggs, fruit and vegetables, to
high-end restaurants.
Curse moved its head-
quarters to Huntsville from
San Francisco in 2013. As
employees grew older, Mr.
Duncan recalls, they wanted
THE WALL STREET JOURNAL.
MANSION
THE NEW SILICON CITIES
families, children and bigger
homes. “It was really hard to
do that in San Francisco,”
says Mr. Duncan, who has a
2-year-old son, Owen. One
drawback: no nonstop flights
to the West Coast.
Huntsville’s digital prowess
emerged from the aerospace
industries based there for de-
cades. The city of roughly
194,000 is now planning to
build a Google fiber network
for fast internet service—a
must for programmers work-
ing from home, said Lucia
Cape, senior vice president of
economic development at the
local Chamber of Commerce.
In the nine months
through September, the me-
dian sales price in Huntsville
was $167,000, according to
Realtor.com.
INSTEAD OF BOSTON,
TRY MANCHESTER, N.H.
Manchester, a city of
110,000 people that is an
hour’s drive from Boston, is
replacing long-gone manu-
facturing jobs by reinventing
itself as a tech center. With a
quaint, New England vibe
and no sales or income tax,
the city added 2,000 tech-
nology jobs in the last two
years, which increases the
number of tech jobs to 7,200,
according to Matt Cookson,
executive director of the
nonprofit New Hampshire
High Tech Council.
Among Manchester’s best
known companies is the in-
ternet-performance manage-
ment company Dyn. Gray
Chynoweth, a former Dyn ex-
ecutive who is now chief op-
erating officer at digital-ser-
vices firm SilverTech, says
Manchester benefits from its
proximity to Boston. Mr.
Chynoweth, 38, travels
weekly to Boston for work
and recently took his older
son, 5-year-old Graham, to
his first baseball game at
Fenway Park.
The Chynoweths live in a MOVING UP Jeff Hanlon,
five-bedroom Colonial they above with husband, Rem Ju-
bought for $280,000 when rado, traded a 550-square-foot
they got married in 2007. apartment in Silicon Valley for
Built in 1890, the 2,100- this five-bedroom house, left
square-foot house has a and top, in a historic neighbor-
wraparound porch. Helped hood of Richmond, Va.
ALSTON THOMPSON PHOTOGRAPHY FOR THE WALL STREET JOURNAL (3)
by the town’s low living
costs, the family saved
enough to buy a small house
on nearby Lake Waukewan.
A drawback: harsh winters.
In January 2016, the average
temperature was 29 degrees—
and this was one of the
warmer years. In 2011, the
city had 30 inches of snowfall.
In the first nine months of
this year, the median house
price in the Manchester-
Nashua area was $241,000, a
rise of 4% from the same pe- NATIVE SON Originally from
riod the previous year, ac- Eugene, Ore., Todd Edman,
cording to Realtor.com. above with his wife and kids,
returned to this small city. He
INSTEAD OF SAN FRANCISCO, bought this 2,200-square-foot,
TRY EUGENE, ORE. four-bedroom house, left, for
Todd Edman, CEO of $300,000 in 2007.
BOONE SPEED FOR THE WALL STREET JOURNAL (2)
Waitrainer, a restaurant-soft-
ware company, is what locals
call a “returning salmon”—a
native who left but returned
to Eugene, a small city of
163,000, drawn to its grow-
ing tech sector, short com-
mutes and quality of life.
The Eugene area has over
400 tech companies, ranging
from startups to regional of-
fices of companies like Sy-
mantec and Zynga. It has
four daily flights to San
Francisco and one to San A LITTLE BIT COUNTRY
Jose—but also a relaxed, Donovan Duncan, at right with
small-town feel and much wife, Kaitlin, and son, Owen, at
lower costs than those cities. their 30-acre property in Gur-
From 1998 until 2001, Mr. ley, Ala. Their house, above,
Edman lived in Livingston, was purchased for $400,000
N.J., and commuted an hour in 2014.
ART MERIPOL FOR THE WALL STREET JOURNAL (2)
and 45 minutes each way to
his job in New York. In Eu-
gene, his commute takes 12
minutes. The 2,200-square-
foot, four-bedroom house he
bought for $300,000 in 2007
has a music studio and a
backyard with a fire pit and
a sandbox for the Edmans’ 4-
year-old son, Steven, and
their 2-year-old daughter,
Lyra. Mr. Edman’s wife, Ce-
leste, is CEO of software
company Lunar Logic.
While median sales prices NORTHERN EXPOSURE The
rose in the first nine months five-bedroom Colonial of Gray
of 2016, to 239,000, median and Tara Chynoweth. The COO
rents declined by nearly 2% of a digital-services firm and
in that period, to $1,100 a his wife bought the 2,100-
month, according to Real- square-foot house for
tor.com. $280,000 in 2007.
TONY LUONG FOR THE WALL STREET JOURNAL (2)
P2GW309000-0-W01100-1--------AL

THE WALL STREET JOURNAL. Friday - Sunday, November 4 - 6, 2016 | W11

Greater Boston Fine ProPerties

BOSTON, MASSACHUSETTS BROOKLINE, MASSACHUSETTS NEWTON, MASSACHUSETTS

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©2016 Hammond Residential Real Estate. All Rights Reserved. Hammond

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the Equal Opportunity Act. Operated by a subsidiary of NRT LLC. www.HammondRE.com
P2GW309000-0-W01200-1--------AL

W12 | Friday - Sunday, November 4 - 6, 2016 THE WALL STREET JOURNAL.

MANSION

SCENE FROM ABOVE Views of the Manhattan skyline and the East River from the roof deck of the duplex penthouse listed by Reed Rubin and his wife, Jane Gregory Rubin.

IN MANHATTAN, A LOW-KEY HIGH LIFE

CLAIM TO
FAME
Some notable
former residents at
Continued from page W9 860/870 United
“The views are to die for,” said Nations Plaza in
Jane Phillips Donaldson, 72, who, Manhattan.
with her husband, former Securities
and Exchange Commission Chair-
man William H. Donaldson, 85, owns
one of the penthouse duplex apart-
ments located on the southeast cor-
ner of 870 United Nations Plaza,
near 47th and 48th streets. “The
sunsets can be just extraordinary, Johnny Carson
depending on the cloud formation.”
The Donaldsons moved to the
complex more than 20 years ago
with their 5-year-old son and have
owned their current unit for the
past 12 years, said Ms. Donaldson,
who co-founded Phillips Oppen-
heim, an executive-search firm for Richard Avedon
nonprofits. They bought the nine-
room duplex from David Koch, the
businessman, philanthropist and
conservative political financier.
Every room except the bath-
rooms has northern, southern or
eastern views that include the
river and several bridges. A small Katharine Graham
dining nook in the kitchen, where
the couple often has breakfast and
reads the papers, overlooks the
lush lawn and trees in the recently
renovated United Nations gardens.
The apartment also has a working
fireplace. The couple has listed the
apartment for $8.495 million; they Truman Capote
are moving to a smaller apartment
farther north, off East 57th Street
and Sutton Place.
In the past three years, 14
apartments have sold in tower 860
with an average sale price of $1.74
million, according to brokerage
Brown Harris Stevens. In 870, the Walter Cronkite
tower closest to the river, 16 have
sold during that period with prices
averaging $1.9 million.
“Somewhere in the mist of his-
tory and the time between the
1960s and today, the history and
value of these buildings were BRIGHT LIGHT The Donaldsons, above left, in their apartment, which is on the market for $8.495 million. A staircase to the second level
somehow obscured,” said Ms. and a home office, top left; the den and living room, top right and above. Yul Brynner
Sloane, the agent.
Designed by Harrison & Abram- bottle of Chivas and have a drink Ms. Rubin, 72, is an attorney
ovitz and developed by the Alumi- with him.” who retired from a practice spe-
num Company of America, the The Midcentury Modern décor cializing in nonprofit cultural in-
towers sit atop six floors of com- of the spacious main lobby stitutions. Mr. Rubin, 80, is a fi-
mercial office space. Floors 31 to shared by both towers has nancial adviser whose father
38 were designed with duplex largely remained true to its origi- once owned and built up the Fab-
apartments, many of them with nal design over the years, Mr. ergé cosmetics company.
working fireplaces and internal el- Hegarty said. The thick cherry- The Rubins moved to the
evators, said Emmet Hegarty, the red carpeting was installed after apartment in about 2005 from
complex’s on-site general manager. the towers opened because the another one in the tower that
Nikki Field, a Sotheby’s Interna- travertine floors proved slippery. was located on its northwest cor-
tional Realty broker who lives in Lavishly tiered glass chandeliers ner. Soon after moving in, they
the 870 building, currently has the designed by Carlo Scarpa and selected white marble tile for the
listing for an apartment once made by Venini of Italy hang dining room and kitchen floors,
owned by Mary Lasker, a medical- from the ceiling. drawing inspiration from the
research philanthropist. The unit The lobby is reminiscent of the United Nations headquarters
DOROTHY HONG FOR THE WALL STREET JOURNAL (7)
was listed for $6.5 million and is other works of Wallace Harrison, nearby. Undulating gray veins in
now in contract, but Ms. Field de- EXPANSIVE VIEW Reed Rubin, above, in the living room of the duplex pent- one of the architectural firm’s the marble are “subtle references
clined to disclose the final sale house he and his wife have listed for $6.5 million. partners, said Jane Gregory Rubin, to what is outside these incredi-
price because the deal hasn’t who with her husband, Reed Ru- ble windows,” Ms. Rubin said,
closed. Washington Post publisher Katha- two children in the building and bin, owns an apartment across the speaking of the river.
Amenities include two roof rine Graham. Residents also have a befriended neighbor Truman Ca- hall from the Donaldsons. The couple has listed the apart-
decks on each tower with 360-de- recreational room with pool table pote in the 1970s, said Ms. Lika, “It feels like you are walking into ment for $6.5 million because they
gree views, a gym, a library and a and golf simulator, used by some president of Lika Associates, a de- the Met,” Ms. Rubin said, referring have downsized to an apartment on
lounge that can be used for private for their lessons with a golf pro. sign and advertising firm. to New York’s Metropolitan Opera Park Avenue near East 63rd Street.
events. To illustrate the buildings’ Many residents have been there Mr. Capote “liked to drink House, which was designed by Mr. “I feel nicely surrounded by
pedigree, the lounge features a for the decades, Mr. Hegarty said. scotch and my husband liked to Harrison. “The red carpets and soar- good souls,” Ms. Rubin said. “I am
photo collage of past residents, in- Hope Lika, 68, and her husband, drink scotch,” Ms. Lika said. “He ing ceiling, walking into this makes going to miss that very much and
cluding actor Yul Brynner and Arthur, who died in 2011, raised would show up at the door with a you feel you are in a known place.” the big moon outside my window.”
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✧✩ ❖✫❀✬❀❖ ✭✮✯❖✰❖✯ ✮✩ r✱✲✳✴✩✵✶✬✭ ❜✬✰✬✲❖ ❘✰❖✩✯✫ ❀✶❖ ✷✸✹✹✫ ✽✴❀✶ ✺✷✫❀✼✲❖✩❀✱✿❂ ✲✮✩❉❖✩✴❖✩✲❖✫
↕➙ ➛➜➝➞ ↕➟➠➠➡➢➤➥➟➦
➉➊➋➌ ➉➋➍➎➏➊➐ ➌➋➉➎➐➉➋➑➒
❵❚P▼❇◆❅ ❇❆❅ ④❚❇❆❇ ❛◆◗❳❬❇◆ ❬❙❚◗❍
②❚❆❏❚P❺ ②❃❙▲❳ ❬❳❍❏❳❳❆ ⑨⑩⑨✈ ❇❆❅
⑨⑩⑨❥❊ ❍▼❳❱ ❋❃❅❳◗❳❅ ❚❍ ❃❆ ❶❙P❺❚❆❈⑦
▼❇❋ ②❃❙▲❳➀❍❃❅❇❱ ❺❆❃❏❆ ❇▲ ❶❙P❺⑦
❚❆❈▼❇❋ ➓❇◗❇P❳❊ ❍▼❳ ➔❙❳❳❆✇▲ →❃❆❅❃❆
◆❳▲❚❅❳❆P❳■
❛❄❳◆ ❍▼❳ P❃❙◆▲❳ ❃❨ ⑥✈✈ ❱❳❇◆▲❊
❍▼❳❚◆ ❈◆❇❆❅ P❃❙❆❍◆❱ ▼❃❙▲❳ ❏❇▲
❝❇▲▲❳❅ ❅❃❏❆ ❍▼◆❃❙❈▼ ❍▼❳❚◆ ❨❇❋❚◗❱
♠❇P❽❙❚◆❚❆❈ ❇ ➄❋❃❅❳◆❆❲ ❼❚P❍❃◆❚❇❆
❏❚❆❈ ❚❆ ⑨❤t❸① ❇❆❅ ❳❄❳❆❍❙❇◗◗❱ ▲❃◗❅■
❶❱ ❍▼❳ ❍❚❋❳ ❚❍ ❏❇▲ ❬❃❙❈▼❍ ❬❱ ❡❇❋
❇❆❅ ➣❚❆❇ ❡❚❆❈▼ ❚❆ ➂✈⑨❥❊ ❚❍ ❏❇▲
❬❇❅◗❱ ❚❆ ❆❳❳❅ ❃❨ ❇ ◆❳❆❃❄❇❍❚❃❆ ❍❃
◆❳▲❍❃◆❳ ❚❍▲ ❃◆❚❈❚❆❇◗ ▲❝◗❳❆❅❃◆▲■
➃▼❳ P❃❙❝◗❳ ❝❇❚❅ ❾❥■t ❋❚◗◗❚❃❆❊ ❃◆
❇❬❃❙❍ ♦t■❥❤ ❋❚◗◗❚❃❆❊ ❨❃◆ ❍▼❳ ❝◆❃❝⑦
❳◆❍❱ ❇❆❅ ❳❋❬❇◆❺❳❅ ❃❆ ❇ ❱❳❇◆◗❃❆❈❊
♦❥■❤⑩ ❋❚◗◗❚❃❆ ◆❳▲❍❃◆❇❍❚❃❆➀❇ P❃❆⑦
▲❚❅❳◆❇❬◗❳ ❚❆❄❳▲❍❋❳❆❍ ❨❃◆ ❇ ❨❇❋❚◗❱
❍▼❇❍ ❃❆◗❱ ▲❍❙❋❬◗❳❅ ❙❝❃❆ ❍▼❳ ❝◆❃❝⑦
❳◆❍❱ ❬❱ P▼❇❆P❳■
⑧◆■ ❡❚❆❈▼❊ ❏▼❃ ◗❳❇❅▲ ❍▼❳ ➣❃❬◗❳
②❃❙▲❳ ❿◆❃❙❝ ❃❨ P❃❋❝❇❆❚❳▲❊ ❏❚❍▼ ❚❆⑦
❍❳◆❳▲❍▲ ❚❆ ◆❳❇◗ ❳▲❍❇❍❳ ❇❆❅ ❍❳P▼❆❃◗⑦
❃❈❱❊ ❇❆❅ ▼❚▲ ❨❇❋❚◗❱ ❏❳◆❳ ◗❚❄❚❆❈ ❚❆
❍▼❳ ❇❨❨◗❙❳❆❍ P❃❋❋❙❍❳◆ ❍❃❏❆ ❃❨ ❿❳◆⑦
◆❇◆❅▲ ↔◆❃▲▲❊ ➂✈ ❋❚◗❳▲ ❆❃◆❍▼ ❃❨ →❃❆⑦
❅❃❆■ ➃▼❳ P❃❙❝◗❳ ❄❚❳❏❳❅ ②❚❆❏❚P❺
②❃❙▲❳ ❬❳P❇❙▲❳ ❍▼❳❱ ❏❳◆❳ ◗❃❃❺❚❆❈
❨❃◆ ❇ P❃❙❆❍◆❱ ▼❃❙▲❳ ▼❃❍❳◗ ❍❃ ❚❆❄❳▲❍
❚❆■ ❹▼❚◗❳ ❍▼❳❱ ❨❳◗❍ ❚❍▲ ◗❇❱❃❙❍ ❇❆❅ ◗❃⑦
P❇❍❚❃❆ ❚❆ ❍▼❳ ◆❙◆❇◗ P❃❙❆❍❱ ❃❨ ➣❃◆❍▼⑦
❇❋❝❍❃❆▲▼❚◆❳ ❅❚❅❆✇❍ ◗❳❆❅ ❍▼❳❋▲❳◗❄❳▲
❍❃ ▼❃❍❳◗ ❙▲❳❊ ❍▼❳❱ P❃❙◗❅ ❳❇▲❚◗❱ ▲❳❳
②❚❆❏❚P❺ ②❃❙▲❳ ❇▲ ❇ ▼❃❋❳■
➄❹❳ ◗❃❄❳❅ ❍▼❳ ❝◗❇P❳❊❲ ▲❇❚❅ ⑧◆■
❡❚❆❈▼■ ➄❹❳ ❨❳◗❍ ❚❍ ▼❇❅ ❆❃❍ ❬❳❳❆
◗❃❄❳❅ ❚❆ ❇ ◗❃❆❈❊ ◗❃❆❈ ❍❚❋❳■ ♣❍ ❏❇▲
❆❃❏▼❳◆❳ ❆❳❇◆ ❏▼❇❍ ❚❍ P❃❙◗❅ ▼❇❄❳
❬❳❳❆❯ ❚❍ ❏❇▲ ❇ ❍◆❇❈❳❅❱■❲
♣❆ ❬❙❱❚❆❈ ❍▼❳ ▼❃❙▲❳❊ ❍▼❳ ❡❚❆❈▼▲
❬❳P❇❋❳ ❃❆◗❱ ❚❍▲ ❨❃❙◆❍▼ ❃❏❆❳◆▲■
❵❚P▼❇◆❅ ❛◆◗❳❬❇◆ ▲❝❳❆❍ ❇❬❃❙❍ ❾⑥❊❤❥❤
♠❇◆❃❙❆❅ ♦⑥qt❊✈✈✈ ❚❆ ❍❃❅❇❱✇▲ ❋❃❆❳❱①
❍❃ ❬❙❚◗❅ ❍▼❳ ▼❃❙▲❳❊ ❨❚❆❇❆P❳❅ ❬❱ ▼❚▲
❏❚❨❳✇▲ ❋❇◆◆❚❇❈❳ ❅❃❏◆❱■ ②❳ P❃❋❋❚▲⑦
▲❚❃❆❳❅ ❇ ❨◆❚❳③❳ P❇◆❄❳❅ ❚❆❍❃ ❚❍▲ ❨❇⑦
P❇❅❳ ❃❨ ④❚❇❆❇❊ ❈❃❅❅❳▲▲ ❃❨ ▼❙❆❍❚❆❈❊
❚❆ ▼❃❆❃◆ ❃❨ ⑧◆▲■ ❛◆◗❳❬❇◆❊ ❏▼❃ ▼❇❅ ❇
❝❇▲▲❚❃❆ ❨❃◆ ▼❙❆❍❚❆❈■ ❡▼❳ ❅❚❳❅ ❚❆
⑨⑩⑨q❊ ❏▼❚◗❳ ▼❳◆ ❏❚❅❃❏❳◆ ▼❙▲❬❇❆❅
◗❚❄❳❅ ❃❆ ❙❆❍❚◗ ⑨⑩⑥⑥■
❶❳P❇❙▲❳ ❍▼❳ P❃❙❝◗❳ ▼❇❅ ❆❃ P▼❚◗⑦
❅◆❳❆❊ ❍▼❳ ▼❃❙▲❳ ❍▼❳❆ ❝❇▲▲❳❅ ❍❃ ❇
P❃❙▲❚❆❊ ❷❃▼❆ ❛◆◗❳❬❇◆■ ②❚▲ ❅❳▲P❳❆⑦
❅❇❆❍▲ ❃❏❆❳❅ ❍▼❳ ❝◆❃❝❳◆❍❱ ❙❆❍❚◗ ❍▼❳
⑨❸❸✈▲❊ ❏▼❳❆ ⑧◆■ ❡❚❆❈▼ ❙❆❅❳◆⑦
▲❍❇❆❅▲ ❚❍ ❏❇▲ ▲❃◗❅ ❨❚◆▲❍ ❍❃ ❇ ⑧❇◗❇❱⑦ ❰➵➮➽➶ ➮➵➾➺➱ ❮ ➾➻➼➵é➵ ➽Ï➵➻ ➺➳➵ ✃➽➽➻➶❮ê ✃➵ë➼➹➺➷ ➺➳➵ ❐➽✃✃➵➷➷ ì➼❮➪❮➬ ❰➽➺➺➽❒ ➮➵➾➺➱
▲❚❇❆ ❨❇❋❚◗❱ ❇❆❅ ❍▼❳❆ ❍❃ ❇ ◗❃P❇◗
❬❙▲❚❆❳▲▲❋❇❆❊ ❏▼❃ ◗❚❄❳❅ ❍▼❳◆❳ ❨❃◆
⑨⑨ ❱❳❇◆▲■
❹▼❳❆ ❍▼❳ ❡❚❆❈▼▲ ❍❃❃❺ ❃❄❳◆❊ ②❚❆⑦
❏❚P❺ ②❃❙▲❳ ❏❇▲ ▲❍◆❙P❍❙◆❇◗◗❱ ▲❃❙❆❅
❇❆❅ ◆❳❍❇❚❆❳❅ ❚❍▲ ❚❋❝◆❳▲▲❚❄❳ ❳❻❍❳◆❚❃◆■
❶❙❍ ❚❆▲❚❅❳ ❚❍ ❏❇▲ ❬❳◆❳❨❍ ❃❨ P▼❇◆❇P❍❳◆
❇❆❅ ❃◆❚❈❚❆❇◗ ❨❳❇❍❙◆❳▲ ▼❇❅ ❬❳❳❆ ◗❃▲❍■
♣❆ ❇❆ ❇❍❍❳❋❝❍ ❍❃ ❇PP❙◆❇❍❳◗❱ ◆❳▲❍❃◆❳
❚❍❊ ❍▼❳ P❃❙❝◗❳ ❍❇◗❺❳❅ ❍❃ ❛◆◗❳❬❇◆ ❅❳⑦
▲P❳❆❅❇❆❍▲ ❇❆❅ ❨❃◆❋❳◆ ▲❍❇❨❨ ❋❳❋⑦
❬❳◆▲ ❏▼❃ ▼❇❅ ❏❃◆❺❳❅ ❇❍ ❍▼❳ ▼❃❙▲❳■
♣❆P◗❙❅❚❆❈ ❍▼❳ ❼❚P❍❃◆❚❇❆ ❏❚❆❈❊
②❚❆❏❚P❺ ②❃❙▲❳ ❋❳❇▲❙◆❳▲ ⑨❤❊q⑩q
▲❽❙❇◆❳ ❨❳❳❍■ ♣❍ ❚▲ ❿◆❇❅❳ ♣ ◗❚▲❍❳❅➀❍▼❳
▼❚❈▼❳▲❍ ❝❃▲▲❚❬◗❳ ◗❳❄❳◗ ❃❨ ◗❇❆❅❋❇◆❺
▲❍❇❍❙▲ ❚❆ ❶◆❚❍❇❚❆➀◆❙◗❚❆❈ ❃❙❍ ❋❇➁❃◆
❇◗❍❳◆❇❍❚❃❆▲■ ❶❙❍ ❍▼❳ P❃❙❝◗❳ ◆❳❅❙P❳❅
❍▼❳ ❆❙❋❬❳◆ ❃❨ ❬❳❅◆❃❃❋▲ ❨◆❃❋ ➂❥
❍❃ ⑨❤❊ ❇◗◗❃❏❚❆❈ ❍▼❳❋ ❍❃ ❇❅❅ ❳❻❍◆❇
❬❇❍▼◆❃❃❋▲ ♠❍▼❳◆❳ ❇◆❳ ⑨➂① ❇▲ ❏❳◗◗ ❇▲
♥✆❑✝✞✻ ⑤ ✟✠✡✝✞✻☛ ❞☞✾✌●✍✌✆ ★ ⑤ ✪☛ ❁✎✏✪ ✉ ✑✒✓
❢✔✕✖✗✘✕
➎➍➧➨➒➊ ➑➩➫➭➯ ➲➳➵ ➵➸➺➵➻➼➽➻ ➽➾ ➚➼➪➶➼➹➘ ➚➽➴➷➵➬ ➮➵➾➺➱ ➺➳➵
✃➼➪➼➪❐ ➻➽➽❒➬ ❮❰➽Ï➵➬ ❮➪✃ ❮ ➷➼➺➺➼➪❐ ➻➽➽❒ ❰➵➮➽➶Ð
✙✚✛✚✜❧ ❦✚✢✣✤✥✦
❝◆❚❄❇❍❳ ▲❍❙❅❚❳▲ ❇❆❅ ▲❚❍❍❚❆❈ ◆❃❃❋▲■
➃▼❳ P❇❆❍❚◗❳❄❳◆❳❅ ❋❇❚❆ ▲❍❇❚◆P❇▲❳❊
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W14 | Friday - Sunday, November 4 - 6, 2016 THE WALL STREET JOURNAL.

MANSION
ANNOTATED ROOM

How to Warm Up a Midcentury Bedroom

New owners of a home by a storied architect wanted a ‘sexy retreat’ inside an iconic L.A. house

Doron Silverman was de-

lighted when he got the keys
to Hurley House, a 1958 Los
Angeles home designed by
the pioneering Swedish ar-
chitect Greta Magnusson
Grossman.
“We fell in love with the
Midcentury sense of style
and then found this property
that had not been changed 1
very much,” says Mr. Silver-
man of his roughly 2,700-
square-foot, four-bedroom
home.
There was just one draw-
back: At about 300 square
feet, the master bedroom 5
seemed rather small to the
couple.
“It’s typical Midcentury
design not to have big
rooms,” says Mr. Silverman,
the 41-year-old chief execu- 6
tive of Bedaga, a mattress-
production startup based in
Los Angeles.
To make the space more

JOE SCHMELZER FOR THE WALL STREET JOURNAL

comfortable, Mr. Silverman
and his wife, Samantha, a
36-year-old singer/song-
4
writer, chose to outfit the
room with “glamorous” ele-
ments.
“We’ve kept the design
very contained in the rest of 3 2
the house, but the bedroom
is a sexy retreat,” he says.
“It’s meant to be really fun.”
—Kristiano Ang

1. Mr. Silverman picked the
Robert Crowder stone-in-
spired wallpaper from L.A.
design store Harbinger to
pay homage to his favorite
piece in the house, an origi-
nal travertine wall in the liv-
ing room.
Price: $1,050 at $210/panel
2. The bed comes with a
brass frame and cashmere
headboard from Loro Piana,
the Italian luxury label. Mr. Sil-
verman chose to have the
seams on the cashmere re-
vealed, a riff on a handbag he
had seen with exposed seams.
Price: $14,500
3. Mr. Silverman discovered the
Mohebban Milano wool and
silk rug while roaming the Mai-
son et Objet design fair in Paris
last year. “I saw the patterns
and colors and convinced them
to sell me the very one they
were displaying,” he says.
Price: $2,500
4. The gray oak nightstands
are from interior designer
Natasha Baradaran, who
works with Mr. Silverman.
Each has a jewelry-like finish
on the front that he says
“adds dimension while not
being too loud.”
Price: $9,100 each
5. The two bronze and 6. The daybed was produced
ribbed-glass lamps on the by Mr. Silverman and crafted
nightstand are made by from black walnut and bronze
Home House Co-Op, of with sombrero boucle fabric.
Maine Design of L.A. “They It was the first Midcentury-
have interesting details on design piece he owned and
them if you look closely,” Mr. the sole remnant of his previ-
Silverman says. ous bedroom.
Price: $3,900 each Price: $6,500

HOUSE CALL | PRISCILLA PRESLEY

Life Before Catching Elvis’s Eye

The actress recalls moving often with her family, listening to the radio and losing friends

of music I liked. I told him rock ’n’

I found the telegram when I was 12. I was roll. He asked if I liked Elvis, “Of
babysitting my younger brother and sister at course,” I said. He said that he and
his wife were friends of Elvis and
home in Austin, Texas, and was bored. So I that Elvis lived about 45 minutes
went through my mother’s closet. In the back away in Bad Nauheim.
I guess he had seen me at the
I found a trunk with a folded flag on top. club writing letters and felt sorry
for me. He asked if I wanted to
Inside were baby photos of me meet Elvis at a party. I said I did.
with my mom and a man who My father knew his commanding
wasn’t my father. When I opened officer and felt comfortable, so he
the telegram, it informed my mom let me go with them.
of her husband’s death flying We arrived at a three-story
home to New London, Conn., on house with a white-picket fence.
leave at the end of World War II. The first time I saw Elvis, he was
I was devastated. I thought I al- sitting in a chair wearing a red
ready had a father. I called my sweater smoking a cigar. He tried
mother at a neighbor’s house, sob- to engage me in conversation, but
bing, and begged her to come home. honestly I was in awe and could
When she did, she told me about just barely answer his questions.
my biological father, James Wagner. At one point he went over to
She said the man she married, Paul the piano, and played and sang
Beaulieu, had adopted me. “Great Balls of Fire,” “Fever” and a
My mother asked me not to tell Fats Domino song. He kept looking
my younger siblings, Michelle and TENDER LOVE Priscilla Presley in over at me to see my reaction. Ev-
Donny, about my father and I London in 2014, right; in 1960 playing erything was very proper and
didn’t. But the information affected an Elvis album, above; in 1967 in Las sweet. When I arrived home, my
me for quite a while as I sorted out Vegas after the couple wed, below. parents were up and were all ears.
GETTY IMAGES (PORTRAIT); BETTMANN ARCHIVE (2, HISTORICAL)

how I viewed my adoptive father
and how I felt about him.
My adoptive father was an offi-
cer in the Air Force and a naviga-
tor on B-52s. We moved around a
lot, and I didn’t stay in one school
long enough to make close friends.
I was quite shy when I was
young, and I dreaded lunchtime at
school. I often ate alone. Eventu-
ally, I figured it was easier to be-
friend the new kids at school.
When I was 11, my family set-
tled again in Austin—this time for
several years, which was a relief.
We had a ranch-style home on the
base with four bedrooms, so my
younger brother and sister and I
had our own rooms.
I made close friends and lis-
tened to music on my radio. It was
an era when I could call up the lo-
cal radio station and dedicate
songs to my best friends. Then at
the end of eighth grade, my father
announced he was being trans-
ferred to Wiesbaden, Germany.
I had just turned 14—not a good
age to be pulled away. I begged my
dad to ask his commanding officer
to keep us in Texas. He gently told
me that was life in the military. He
said, “You’ll always make new
friends.” I was heartbroken.
We arrived in Wiesbaden on
June 15, 1959. For a short time we
lived in town in a small hotel.
Then we moved to a drab second-
floor apartment while we waited
to be assigned permanent housing.
That summer, I often walked
with my brother to the nearby Ea-
gles Club, where military families
gathered for lunch and dinner, and
to socialize and see weekend en-
tertainment. I went there during
Elvis and I saw each other regu-
larly until he was discharged from
the Army in 1960. We kept in
touch by phone and didn’t reunite
until 1962, when he paid for me to
visit him in Los Angeles. We mar-
ried in 1967.
Today, I live in Beverly Hills, in
the two-story Italian-style house
that I bought in 1973 after Elvis
and I divorced. My favorite space
is my bedroom, because it’s quiet
and I have alone time.
Though Elvis and I divorced and
he died nearly 40 years ago, I still
miss him. He was a huge part of
the day to listen to the jukebox my life. When he passed, I lost a
and write letters to my friends little bit of myself.
back in Texas. —As told to Marc Myers
One day I noticed a couple in
their mid-20s in the club’s audito- Priscilla Presley, 71, is an actress
rium. She was a singer rehearsing and co-founder of Elvis Presley En-
a song and her husband, an air- terprises. She is executive producer
man, booked the club’s entertain- of “The Wonder of You: Elvis Pres-
ment on the weekends. ley with the Royal Philharmonic
He saw me and asked what kind Orchestra” (Sony Legacy).
P2GW309000-0-W01500-1--------AL

THE WALL STREET JOURNAL. Friday - Sunday, November 4 - 6, 2016 | W15

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W16 | Friday - Sunday, November 4 - 6, 2016 THE WALL STREET JOURNAL.