Wallstreetjournaleurope 20170831 TheWallStreetJournal-Europe
Wallstreetjournaleurope 20170831 TheWallStreetJournal-Europe
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THURSDAY, AUGUST 31, 2017 ~ VOL. XXXV NO. 149 WSJ.com EUROPE EDITION
DJIA 21892.43 À 0.12% NASDAQ 6368.31 À 1.05% NIKKEI 19506.54 À 0.74% STOXX 600 371.01 À 0.70% BRENT 50.86 g 2.19% GOLD 1308.10 g 0.38% EURO 1.1922 g 0.43%
U.S. Hits
What’s Escape
News Route for
Business & Finance
INSIDE
Harvey came ashore
again, bringing heavy rains
and whipping winds—but
far less destruction—to
Uber’s New CEO Is Aiming
southwestern Louisiana. A1
The storm is upending
petroleum flows world-
wide, a consequence of the
For IPO as Early as 2019
U.S.’s growing influence in BY GREG BENSINGER and 36 months, though he in- resigned in late June under in-
the global energy sector. A6 dicated that wasn’t a firm vestor pressure. Mr. Kalanick
MIKE BLAKE/REUTERS
The U.N. Security Council Uber Technologies Inc.’s deadline, according to a per- appeared emotional as he
condemned North Korea in new chief executive, Dara son who attended the meeting. praised Mr. Khosrowshahi and
the aftermath of its mis- Khosrowshahi, said he would The wide range gives Mr. said he would support the new
sile launch over Japan. A3 start on Tuesday and aim for Khosrowshahi some leeway to CEO however he could, accord-
Trump and his national se- an initial public offering as restore order to a company ing to the person who at-
curity team gave mixed mes- soon as 2019, setting the stage beset by months of scandals tended the meeting.
sages about the U.S. approach for what would be one of the and legal issues, as well as to “This company has to
to North Korea, with the KICKING THE AMAZON’S most highly anticipated mar-
ket debuts in memory.
shore up losses that totaled
more than $3 billion last year.
change,” said Mr. Khosrow-
shahi, according to Uber. “What
president suggesting the win-
dow for talks has closed. A3 TIRES ON A GROCERY At his first appearance in Mr. Khosrowshahi was in- got us here is not what’s going
NATO said it would send NEW PLANE GAMBIT front of employees for the
ride-hailing firm Wednesday,
troduced to employees at the
San Francisco headquarters by
to get us to the next level.”
The 48-year-old CEO told
three observers to Russia’s Mr. Khosrowshahi set a time- the man he is succeeding, Tra- employees he wants to bring in
Zapad military exercise but THE MIDDLE SEAT, A9 BUSINESS & FINANCE, B1 line for an IPO of between 18 vis Kalanick, who reluctantly Please see UBER page A2
said Moscow’s invitation
fell short of obligations. A5
Trump called on Congress
to approve a steep cut in How Big Tiger, an Orange Tabby, Is One
Of the Last Cats at Sing Sing
Oracle #1
corporate tax rates and sim-
plify the U.S. tax system. A7
U.S. officials are worried
Mergers i i i
that politics could threaten Can Have New York prison once had hundreds of
funding for a children’s
health-insurance program. A7
Downsides resident felines; fewer than a dozen remain SaaS Enterprise
American and Iraqi of-
ficials are concerned next BY GREG IP BY CORINNE RAMEY cell block at Sing Sing Correc- Applications Revenue
month’s referendum on Kurd- tional Facility. The tabby is
istan’s independence will lead Corporate America is get- OSSINING, N.Y.—Tiger, a among the last cats of Sing
to the breakup of Iraq. A4 ting more concentrated. The pudgy orange tabby, broke Sing, which once had hundreds
country’s largest internet re- into a maximum-security of resident felines freely roam-
#1
At least 18,000 Rohingya tailer just acquired its largest prison in ing its buildings and
Muslims have fled violence in standalone or- Westchester County grounds. While other
Myanmar and crossed into ANALYSIS ganic grocer, about a decade ago. prisons have strug-
Bangladesh in recent days. A5 and two of its
largest aviation-
Now, he turns his
nose up at tuna from
gled with feline in-
vaders, the position
#2
CONTENTS Middle Seat............ A9 parts makers plan to the mess hall, but of cats at Sing Sing,
Business News...... B3 Opinion.............. A10-11
merge. From health insurance will gladly chow where the creatures
Crossword.............. A12 Review........................ A8
to internet search, fewer com- down on tinned tuna once had remarkable
Oracle Salesforce
Heard on Street.... B8 Technology............... B4
Life & Arts......... A9,12 U.S. News............. A6-7 panies control more of their inmates buy for him privileges, was un- Cloud Cloud
Markets...................... B8 Weather................... A12 markets. at the commissary. usual. 14.5% 12.4%
Markets Digest..... B6 World News........ A2-5
That can be good: size and While men lift Today, fewer than
€3.20; CHF5.50; £2.00; scale can enable companies to weights outside, he a dozen remain.
U.S. Military (Eur.) $2.20
reduce costs, invest in bet- meanders through This is a tale of 1,000+ Employees Segment, 2015
ter products and compete the yard, supervising men and cats. A tale
globally. But a provocative from the picnic table or rub- of how hardened convicts can
new study concludes the op- bing up against their legs. be softened by furry tails
posite. It found that in recent “I think this is the best among them. And of how, in a
decades a lack of competi- thing that ever happened to suburb 30 miles north of New oracle.com/applications
tion has driven up prices, him,” said one inmate, of the York City, unsanctioned felines Source: IDC “Worldwide SaaS Enterprise Applications Market Shares, 2015: The Top 15 by Buyer Size,”
s Copyright 2017 Dow Jones & hurting U.S. growth, wages cat’s living situation. “He has a once thrived behind the aging doc #US41913816, Dec. 2016; Table 4. For the purposes of this report, SaaS enterprise applications include
the following application markets: CRM, engineering, ERP, operations and manufacturing, and SCM.
Company. All Rights Reserved
and labor-force participation. family.” walls of a formerly notorious Copyright © 2017, Oracle and/or its affiliates. All rights reserved.
Please see IP page A2 Tiger’s family is an 80-man Please see CAT page A2
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To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A2 | Thursday, August 31, 2017 THE WALL STREET JOURNAL.
WORLD NEWS
Continued from Page One so as to boost profits at the tracted widespread atten- Trade Commission
The study is causing a stir expense of consumers. tion in the blogosphere. blessed Amazon.com Inc.’s
among economists, some of Other studies have come to Dietrich Vollrath, an econo- purchase of Whole Foods
whom are skeptical of its con- similar conclusions. One by mist at the University of Market Inc., no surprise
clusions. Yet its basic finding former President Barack Houston, calls it “an intrigu- since the combined company
is eye-opening. Obama’s Council of Economic ing (and very large) step for- would control only a small
In the study, Jan Advisers found return on cap- wards.” slice of the grocery market.
De Loecker of Belgium’s Uni- ital had become astronomical But some of its claims in- And Amazon, whose profit
versity of Leuven and for the most profitable pub- vite skepticism. Ample evi- margins are infamously thin
Jan Eeckhout of University licly traded companies, which dence already links depressed anyway, immediately cut
College London shouldn’t be possible if com- wages to globalization, prices on dozens of items—a
CAPITAL start from the petitors could freely enter weaker unions and the de- move sure to depress rather
ACCOUNT economic as- their market. mand for skills. Growth has than raise markups.
sumption that in The latest study goes even been weak globally since Critics worry that once
a competitive further, arguing the preva- 2009 and seems due mostly Amazon has eliminated its
market, a company can’t lence of market power helps to aging and repairing the competitors, it will be free to
charge much more for a prod- explain deeper economic mal- damage of the financial cri- jack up prices or squeeze sup-
uct than the cost of making adies. A company with such sis. The link to market power pliers. Yet the very thing
one more (what economists power often restricts produc- thus far appears mostly cir- that in theory makes
call the “marginal cost”). If it tion to prop up prices cumstantial. that possible, Amazon’s
did, another company would and profits. Messrs. By focusing on variable i.e., a handful of companies, time, increasingly contain size, also justifies the invest-
swoop in and undercut it. De Loecker and Eeckhout ar- costs the authors may under- each of which exercises some software that is costly to de- ments in technology and real
The authors analyze data gue this reduces demand for state how companies’ fixed market power, without gener- velop but almost costless to estate that make its offerings
on every publicly traded com- labor and thus explains why costs have risen, to pay for ating excessive profits be- reproduce, such as Tesla Inc.’s so irresistible to custom-
pany in the U.S. back to 1950 wages for low-skilled workers things such as software, com- cause these companies have self-driving software, an en- ers and difficult for competi-
to determine how much its have stagnated in recent de- puters, research and develop- to invest so much. The study’s hanced version of which the tors to match. For instance,
revenue exceeded its variable cades. Lower wages also dis- ment and marketing. One ma- authors say profits have company sells as a $5,000 op- Whole Foods doesn’t just give
costs, such as labor and com- courage people from working, jor fixed cost, depreciation, risen, but Mr. Cowen disputes tion. Amazon a big footprint in
modities. That excess, what which depresses labor-force has risen from 12% of GDP in their data. The question for trust groceries, but a network of
they call the markup of price participation. the 1960s to around 16% as One example of this is busters is whether this move physical pickup locations
over marginal cost, fluctuated They add that markups companies spend more on banks that now spend more toward companies with higher close to its most affluent cus-
between 16 % and 32% until may be evidence of barriers tech equipment that quickly on information technology to fixed costs and more market tomers.
1982 and has since climbed to entry by new competitors, becomes obsolete. manage risks and to design power is benign or malign. The latest study doesn’t re-
steadily, to 67%.The trend which is corroborated by Tyler Cowen, a blogger and and market products rather The policy implications are solve these tensions. But the
holds across industries, and is slumping business startup economist at George Mason than on branches. This favors either “‘We’re being too le- questions it raises about how
more pronounced in smaller rates. The especially sharp University, writes large banks that can spread nient,’ which is what we corporate size is reshaping
rather than the biggest com- rise in markups since 2009, that this might lead to more those costs over many more heard in the corridors of Eu- the economy beg for further
panies. they say, may explain why “monopolistic competition,” customers. Cars, mean- rope, or it could be, ‘Here’s investigation.
once had about 1,000 outdoor pawed partner. “From the mo- ing a previous female caller
cats, said retired Capt. Gloria ment I come in she’s by my carted him off to the vet.
Murli. side.” “It’s kind of ironic you have
In the early 2000s, volun- As for Tiger, Mr. Jimenez, violent criminals ready to de-
teers neutered about 400, 47 years old, was among the fend him,” said inmate Jer-
neatly clipping the tips of one early inmates adopted by the maine Archer, 44. The cat, Mr.
ear to keep track. Once a jail orange tabby. Then, Tiger Archer said, was getting old, fat
kitty, always a jail kitty, Capt. would catch mice, proudly sit- and slow. “But we love him.”
Murli said. “You can’t just take ting by his trophies at the cell
the cat and throw it into some block’s entrance. The cat, trot- THE WALL STREET JOURNAL.
other neighborhood.” ting with his tail in the air, Europe Edition ISSN 0921-99
She hopes to neuter at least pounced on joggers in the yard. The News Building, 1 London Bridge Street,
London, SE1 9GF
100 more. The tabby slept in Mr.
At New Jersey’s Bayside An inmate tries to coax Tiger outside at Sing Sing Correctional Facility in Ossining, N.Y. Jimenez’s cell. At 6 a.m., Tiger Thorold Barker, Editor, Europe
Grainne McCarthy, Senior News Editor, Europe
State Prison, inmates used to would jump on his bed to get Cicely K. Dyson, News Editor, Europe
catch and raise cats, stashing sweetness of the way inmates fused, the guard did it himself. comment. Court papers say he his attention, then leap to the Darren Everson, International Editions Editor
them in lockers during counts treated the animals was beau- Midnight, the mother cat, contended the kittens were window and wait for him to Joseph C. Sternberg, Editorial Page Editor
and inspections. In 2014, after tiful to me.” jumped out of the compactor sick, dangerous and violated get up.
Anna Foot, Advertising Sales
prison officials and the non- When inmate Todd Young, and came back to Mr. Wil- facility rules. Tiger, Mr. Jimenez noted Jacky Lo, Circulation Sales
profit Alley Cat Allies clashed who was at Sing Sing from liams’s cell, meowing, pacing Outrage generated by his with disapproval, could once Andrew Robinson, Communications
over a cat-feeding ban, the 1996 to 2011, talked on the and looking for her kittens, trial led to animal-welfare Jonathan Wright,
nonprofit helped neuter and phone in the yard, a black cat “black furry little things and groups neutering Sing Sing’s Global Managing Director & Publisher
return nearly 150 cats to the
grounds the next year, said
named Stinky and a gray one,
Mita, would climb all over him.
very cute,” he wrote in a letter
this month.
cats and returning many to
prison. Cat life at Sing Sing CORRECTIONS Advertising through Dow Jones Advertising
Sales: Hong Kong: 852-2831 2504; Singapore:
Becky Robinson, its president.
As for Sing Sing, no one
“Stinky would be on my left
and Mita on my right,” said
That “horrific” day remains
fresh in his memory, he added.
took on a semblance of order,
with inmates building wooden
AMPLIFICATIONS 65-6415 4300; Tokyo: 81-3 6269-2701;
Frankfurt: 49 69 29725390; London: 44 207
842 9600; Paris: 33 1 40 17 17 01;
knows how the cats got there. Mr. Young, adding he’s “like “I’m a 3x offender for armed feline houses outside the New York: 1-212-659-2176
Rumor has it tomcats were Dr. Dolittle with animals.” robbery’s [sic], but God is my buildings and officials install- Printers: France: POP La Courneuve; Germany:
Dogan Media Group/Hürriyet A.S. Branch; Italy:
brought in to control ubiqui- Kitty-human relations witness; I’ve never physically ing outdoor feeding stations. Labor Department data Qualiprinters s.r.l.; United Kingdom: Newsprinters
(Broxbourne) Limited, Great Cambridge Road,
tous rats at the aging prison, purred along peacefully until hurt anyone, nor have I ever Joel Jimenez, who spent were the source for a chart Waltham Cross, EN8 8DY
said Mr. Pica. The problem one fateful day. On March 11, harmed any animals!” wrote from 2005 to 2011 at Sing showing unadjusted U.S. job- Registered as a newspaper at the Post Office.
was they weren’t all toms. 2001, correction officer Ronald Mr. Williams, who is now incar- Sing, said cats were still “ev- less claims that accompanied a Trademarks appearing herein are used under
license from Dow Jones & Co.
Others say feral cats, lured Hunlock searched under an in- cerated at Attica Correctional erywhere” when he arrived. Heard on the Street column ©2017 Dow Jones & Company. All rights reserved.
Editeur responsable: Thorold Barker M-17936-
by mess hall scraps, simply mate’s bunk, where he discov- Facility in upstate New York. Inmates who worked as custo- Wednesday about wage 2003. Registered address: Avenue de Cortenbergh
showed up. In the 1970s, cats ered a box with five kittens, Mr. Hunlock was convicted dians cared for cats around growth. The chart incorrectly 60/4F, 1040 Brussels, Belgium
lived out in the open among court documents say. Mr. Hun- of one felony per kitten and their housing areas. Friendly said that the source was the NEED ASSISTANCE WITH
officers and “really rough lock ordered the inmate, John sentenced to a year in the ones sat on prisoners’ laps. Bureau for Labor Statistics. YOUR SUBSCRIPTION?
guys,” said filmmaker David Williams, to crush the kittens slammer—as an inmate. The “Some of the most hard- By web: http://services.wsje.com
Readers can alert The Wall Street By email: [email protected]
Hoffman, who taught a drama and their mother in a trash former guard and his lawyer ened inmates were totally an- Journal to any errors in news articles By phone: +44(0)20 3426 1313
class at the prison. “The compactor, and when he re- didn’t respond to requests to tisocial and hated other peo- by emailing [email protected].
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THE WALL STREET JOURNAL. Thursday, August 31, 2017 | A3
WORLD NEWS
South Koreans Feel Sidelined in Crisis
‘Korea passing’ enters
the lexicon to describe
the view that the U.S. is
bypassing Seoul
BY JOHN LYONS
WASHINGTON—President
Missile Launch
Donald Trump and his na-
tional security team issued BY FARNAZ FASSIHI fusal to comply and didn’t
mixed messages about the U.S. specify whether the council
approach to North Korea on UNITED NATIONS—The was considering further ac-
Wednesday, with Mr. Trump United Nations Security Coun- tion, such as tightening eco-
suggesting that the window cil adopted a statement con- nomic sanctions.
for talks has closed. demning North Korea “for its The U.S. has maintained
“The U.S. has been talking to outrageous actions and threats that all options, including a
North Korea, and paying them against another U.N. member military one, are on the table.
extortion money, for 25 years. state” in the aftermath of its But Russia and China, two
HONG GI-WON/YONHAP/ASSOCIATED PRESS
Talking is not the answer!” Mr. latest launch of a missile that countries that hold veto power
Trump said in an early morn- flew over Japan. on the Security Council, have
ing Twitter message. The “presidential state- made it clear that they would
Defense Secretary Jim Mat- ment,” which counts as the block the council from handing
tis, appearing later at the Pen- council’s fastest form of reac- the U.S. endorsement or per-
tagon with his South Korean tion to events, reiterated that mission for military escalation.
counterpart, said the U.S. is North Korea is in violation of Earlier Tuesday, U.S. Am-
“never out of diplomatic op- multiple Security Council res- bassador Nikki Haley said the
tions.” olutions banning ballistic-mis- council must get serious in re-
Last week, Secretary of sile and nuclear tests. acting to North Korea’s re-
State Rex Tillerson praised “The Security Council ex- peated provocations. In a
Pyongyang for exercising “re- South Korean soldiers took part in annual joint military exercises in Yongin Tuesday. presses its grave concern that statement after the Security
straint” by not conducting the DPRK is, by conducting Council meeting, she said:
missile tests during joint an- Moon Jae-in, also has said it The Trump administration coast of Hawaii, the Missile De- such a launch over Japan as “The world is united against
nual exercises between the wants to pursue a peaceful has been ratcheting up sanc- fense Agency said Wednesday. well as its recent actions and North Korea. The United
U.S. and South Korean militar- resolution to expanding hostil- tions and has sought the help In the test, the U.S. guided- public statements, deliberately States will not allow their law-
ies, which began on Aug. 21. ities. of China and other countries missile destroyer John Paul undermining regional peace lessness to continue. And the
However, Pyongyang then It wasn’t clear what Mr. to pressure Pyongyang, which Jones successfully intercepted and stability and has caused rest of the world is with us.”
launched a battery of missiles Trump meant by “extortion has continued missile tests a medium-range missile target grave security concerns U.K. and French ambassa-
last Friday, following them money.” Previous U.S. adminis- and other provocative ac- off the coast of Hawaii using around the world,” the state- dors, close allies of the U.S. on
with an intermediate-range trations have employed both tions. Standard missile-6 guided mis- ment said, referring to North North Korea policy, told re-
ballistic missile launch on carrots, such as humanitarian The U.S. Navy and the Mis- siles, the Missile Defense Korea by its acronym. porters that the international
Tuesday. aid, and sticks, including sanc- sile Defense Agency also con- Agency said. The statement stopped community must stand united
The government of South tions, to try to confront North ducted a previously scheduled —Nancy A. Youssef short of spelling out conse- in sending a strong message of
Korea, led by new President Korea’s nuclear program. missile defense test off the contributed to this article. quences for North Korea’s re- condemnation to North Korea.
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To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A4 | Thursday, August 31, 2017 HK JP KO ML SI IN UK FR MN PR THE WALL STREET JOURNAL.
WORLD NEWS
AKO RASHEED/REUTERS
Kurdish people gathering this month in northern Iraqi city of Kirkuk in support of a controversial plan to hold a referendum on Iraqi Kurdistan’s independence, to be held on Sept. 25.
Shaddadi
years ago, early in the battle
IS
Kirkuk
N
Deir Ezzour
By Maria Abi-Habib
IRAQ
in Beirut and Ghassan
Adnan in Baghdad SYRIA Tikrit
istan’s independence—planned
for next month and certain to
Ramadi Baghdad
pass—will likely dash the
hopes for return Mr. Mahmood
shares with thousands of Disputed territories
other Arabs displaced from
the semiautonomous northern Peshmerga forces clashing with Islamic State militants in November 2016 in Bashiqa, east of Mosul. Source: United States Institute of Peace THE WALL STREET JOURNAL.
region during the latest war.
American and Iraqi officials semiautomous region roughly dum, they say, would solidify ernment, or KRG, denies that Kurdistan. Kurdistan’s government has a
say they are worried the vote, the size of Ireland and home demographic changes wrought Kurdish forces forcefully dis- “We oppose the referendum cash-strapped economy heavily
hailed by Kurds as an exercise to some 5.2 million people. by the conflict, feed long- placed Arabs, and Majid Shigali for a number of reasons,” a se- dependent on oil revenues,
in democracy, will lead to the Since 1991 Kurdistan has en- standing grievances of the a senior Kurdish member of nior U.S. official said. “The key which fell to historic lows this
violent breakup of Iraq just as joyed broad self-rule under the Sunni Arab community, and Iraq’s parliament, defended the one is the potential for vio- year. A regional real-estate
it is on the verge of expelling Iraqi constitution, with its possibly set off clashes be- referendum and the ambition lence, particularly if it is held in boom ended in 2014 and con-
Islamic State. own security forces and immi- tween Kurds and Arabs over to make Kurdistan independent. disputed territories like Kirkuk struction cranes dotting the
“We will lose everything in gration controls. contested areas across four “We don’t expect there to be with its ethnic mix and various skyline of its capital, Erbril,
this referendum,” said Mr. While Washington and Bagh- provinces. any problems as all sides want forces.” now stand idle.
Mahmood from a refugee dad oppose the independence Mr. Mahmood’s hometown to live in peace,” Mr. Shigali Arab Iraqis accuse the KRG The U.S. is concerned the
camp in Baghdad, where he vote even within that region, of Zummar has a recent history said. “The only problem may of taking advantage of Bagh- referendum will break down
lives in a cramped tent with they have expressed particular typical of many such disputed surface is that of the disputed dad’s preoccupation with fight- the close cooperation between
his wife, three children and his alarm that it is to be held territories. Islamic State briefly territories and in this case, we ing Islamic State to seize Kir- Kurdistan’s government and
brother’s family. across the far broader, ethni- controlled the town until U.S.- will craft a constitution to ad- kuk, where the regional Baghdad, an alliance that has
“We thought the end of Is- cally mixed swath of northern backed Peshmerga fighters ex- dress it.” authorities voted on Tuesday to been crucial to defeating Is-
lamic State in Mosul would be Iraq where Kurdish Peshmerga pelled the group in August But U.S. and Iraqi officials take part in the referendum, lamic State. The Iraqi military,
an end to this violence,” the 32- fighters played a key role in ex- 2014. But then the Kurdish mi- say disputes won’t be easily re- over the protests of representa- backed by the U.S. and working
year-old said. “But the Kurds pelling the Sunni Arab extrem- litia kicked out the town’s Arab solved, particularly in the oil- tives from the Arab and Turk- with the Peshmerga and Iran-
are now making their demands. ists of Islamic State. residents and laid claim to their rich province of Kirkuk, claimed men communities. backed Shiite militias, has
We need to take the defense of In three years of chaotic homes, according to residents by Kurds and Arabs alike. The While optimism over the ref- pushed the radical group out of
our people into our hands.” fighting, Peshmerga fighters and human-rights groups. Peshmerga seized the ethnically erendum runs high among the main northern city Mosul,
The referendum, set for have grabbed disputed terri- “The Peshmerga treated us mixed city in northern Iraq in many Kurds, an independent and the same partnership-
Sept. 25, is an initiative of the tory from their Arab neigh- like Islamic State did,” Mr. June 2014, after Iraq’s army Kurdistan would face consider- scored a key victory on Sunday
Kurdistan Regional Govern- bors, human-rights groups and Mahmood said. fled south as Islamic State able financial challenges. Like in the strategic town of Tal
ment, which administers a Iraqi officials say. The referen- The Kurdistan Regional Gov- blitzed across lands bordering the government in Baghdad, Afar, near the Syrian border.
and we are killing them in Iraq. group in 2014. Eight bodies be- cated on the foothills of the
We don’t send them to Syria.” lieved to belong to the soldiers mountains that Islamic State
U.S.-backed Iraqi forces are have since been retrieved by controlled. “Not only has secu-
battling Islamic State, recently Lebanese authorities. rity returned to us, but there is
ousting the group from Mosul, Hezbollah leader Hassan also hope for a better future.”
Iraq’s second-largest city, and Nasrallah on Wednesday de- —Nour Alakraa in Berlin
the strategic town of Tal Afar fended the agreement, saying contributed to this article. A convoy of Islamic State fighters and their families leaving the Lebanon-Syria border.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL. Thursday, August 31, 2017 | A5
WORLD NEWS
Alliance
To Monitor
Russia Drills
WORLD WATCH
GAZA STRIP pay tribute to their mother’s
charity work on the eve of the
Guterres Urges Israel 20th anniversary of her death.
To Ease Blockade The princes, accompanied by
William’s wife, the duchess of
The U.N. secretary-general on Cambridge, huddled under um-
Wednesday urged Israel to ease brellas in the pouring rain as
its blockade of the Hamas-ruled they strolled through the Sunken
Gaza Strip and called for large- Garden, which is planted with
scale foreign aid, saying the situ- white flowers and dedicated to
ation in the isolated territory is the princess at her former home,
“one of the most dramatic hu- where she once strolled and
ANDREW MEDICHINI/ASSOCIATED PRESS
manitarian crises” he has seen. where she used to talk with the
Speaking at a U.N.-backed ele- gardeners about their ever-
mentary school in the northern changing displays.
Gaza Strip, António Guterres also William and Harry, who have
called for unity among the Pales- both promised to carry on their
tinians’ warring factions—Hamas, mother’s charity work, also chat-
which rules Gaza, and Fatah, the ted with representatives from
party of Palestinian Authority groups that Diana supported.
President Mahmoud Abbas. The princes then left the pal-
“The division only undermines ace grounds to meet with mem-
the cause of the Palestinian peo- SHELTER FROM THE SUN: Bishops at Pope Francis’ weekly general audience in St. Peter’s Square at the Vatican on Wednesday. bers of the public, who had braved
ple,” he said. In an apparent the rain for a chance to share
message to Hamas, he said “mil- VENEZUELA to repress political dissent and in- “I think we would argue that some documented cases amount- memories of Diana with her sons.
itantism” was causing damage still fear,” the U.N. human-rights over the course of time we have ing to torture, the report said. The weeks before the anniver-
to the region, adding that he U.N. Accuses Caracas office said, in a report that called seen an erosion of democratic life —Reuters sary of Diana’s death have been
had a dream to “come back to Of Rights Abuses for investigation and accountabil- in Venezuela,” the official said at met with reflection in Britain as
Gaza one day and to see Gaza ity. It called on President Nicolás a news conference. “It must be UNITED KINGDOM the public remembers “the peo-
as part of a Palestine state in The United Nations said Ven- Maduro’s government to release barely alive, if still alive, is the ple’s princess” and considers her
peace and prosperity.” ezuela’s security forces had com- arbitrarily detained demonstrators way I would look at it.” Princes Pay Tribute contributions to the country and
Mr. Guterres is on his first mitted extensive and apparently and to halt the unlawful use of Some 882 people are believed To Princess Diana the monarchy.
visit since taking office in Janu- deliberate human-rights viola- military courts to try civilians. to be in custody, among 5,341 de- Many brought flowers, which
ary. During his visit, he met with tions in crushing antigovernment U.N. High Commissioner for tained in street protests since Princes William and Harry the princes gathered and laid in
Israeli and Palestinian leaders to protests and that democracy Human Rights Zeid Ra’ad al-Hus- April, U.N. human-rights official visited a memorial garden at front of the black and gold gates
encourage peace talks. was “barely alive.” sein was asked whether the Hernan Vales said. Detainees are Kensington Palace in London of Kensington Palace.
—Associated Press The actions indicated “a policy country was now a dictatorship. often subjected to ill treatment, in dedicated to Princess Diana to —Associated Press
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A6 | Thursday, August 31, 2017 THE WALL STREET JOURNAL.
HARVEY’S DESTRUCTION
examiner in Harris County, in- cluding New Orleans and Ba- Abbott said federal funding
cluding a veteran Houston po- ton Rouge, “rain totals are sig- for recovery efforts will need
lice officer. Officials in nearby nificantly lower than what we to be greater than the
Pasadena also said that a fam- expected” in part because of roughly $120 billion provided
ily—four students and two of drier air from Mexico that to New Orleans after Hurri-
their great-grandparents— wrapped around the storm and cane Katrina.
were swept away by the flood- weakened its bands of heavy The damage caused by Har-
waters. rain, Mr. Lindner said. vey is “far larger than Katrina
There are three confirmed “Obviously, things are not and far larger than [super-
deaths in Galveston County, Nuns join a line of people Wednesday waiting to volunteer at an evacuation center in Houston. as bad as has been forecasted. storm] Sandy,” Mr. Abbott, a
Chief Medical Examiner Erin We’re very thankful for that,” Republican, said.
Barnhart said. Floodwaters urged residents who are still through the middle of Hous- Wednesday morning whether said Louisiana Gov. John Bel He said he expects “ongoing
have made it hard to coordi- in homes near the levee to ton, is expected to rise slightly to believe assurances that Edwards, a Democrat. “We’ve challenges” with flooding for
nate with outlying funeral leave. throughout the day and then their homes would remain dry. fared much better than we up to a week even though
homes, she said. If there is a breach, the wa- hold steady. Jake Emery, 42, who lives feared might be the case.” floodwaters are receding in
Jeff Lindner, a meteorolo- ter can rise “very fast” and “it Ed Russo with the U.S. in a multistory brick home, Harvey touched down at the Houston area and the
gist with the Harris County is going to be very deep,” he Army Corps of Engineers said surveyed the water at the edge roughly 4 a.m. in the south- storm is moving eastward.
Flood Control District, said the said. In some areas, the water officials plan to release a com- of his front yard. He said it western corner of Louisiana “The worst is not yet over
city’s watersheds have crested could rise to the rooftops, he bined total of 16,000 cubic feet came within an inch of the near the town of Cameron, for Southeast Texas as far as
and up to 30% of the county said. per second of water from the house Sunday night, then re- which is about 50 miles from the rain is concerned,” he
has been flooded. Mr. Lindner said officials two reservoirs. ceded—though it looked to the Texas border. said, referring to a region that
He added that officials were plan to continue to release wa- “The decision to make the have risen about 5 inches The far western reaches of includes Beaumont and Port
concerned about a levee near ter from the Barker and Ad- increased controlled releases since midnight as water the state already experienced Arthur.
a subdivision in northeast dicks reservoirs near the city, was difficult but necessary,” pushed up through storm up to 30 inches of rainfall over —Tawnell D. Hobbs,
Houston that “has sloughed a a move intended to relieve he said. drains. several days, and Wednesday’s Dan Frosch, Ben Kesling,
little bit.” pressure on dams and prevent In the west Houston suburb “You think you have it landfall accelerated flooding. Christopher M. Matthews
The likelihood of a breach more widespread flooding. of Memorial, residents on wa- beat,” he said. “You look up Harvey also packed a sev- and Erin Ailworth
remains low, he said, but he The Buffalo Bayou, which runs terlogged streets weren’t sure and it’s a beautiful cool morn- eral foot storm surge across contributed to this article.
U.S. NEWS
Economy Grew 3%
In Second Quarter
BY BEN LEUBSDORF chief U.S. economist at Mor-
gan Stanley. But so far, she
WASHINGTON—The U.S. said, the pace of growth has
economy expanded at its most remained steady: “It’s incredi-
robust pace in more than two ble to sustain this kind of mo-
years in the spring and ap- mentum this far into a busi-
pears to have momentum go- ness expansion.”
ing into the second half of the Wednesday’s report was an
year, supported by solid con- upgrade from the 2.6% GDP
sumer spending and a pickup growth pace the government
in business investment. had reported last month.
Gross domestic product, a Hitting 3% growth was no-
measure of the goods and ser- table because President Don-
vices produced across the U.S., ald Trump has said he wants
rose at a seasonally and infla- to lift annual economic growth
tion-adjusted annual rate of above 3% in a sustained fash-
3% in the second quarter, the ion by rolling back regulations,
Commerce Department said overhauling the tax code and
KEVIN LAMARQUE/REUTERS
its, but he offered few other The president also nodded dividual tax rates for high-in- obstacles to overcome. They
specifics. Instead, he repeated to Congress’s central role in come households and repeal haven’t settled on which tax
broad goals to make tax filing getting tax changes passed, af- the estate tax have found little breaks would go away, or
easier and lower tax rates on ter Republican lawmakers’ support among Democrats. whether they want a net tax
corporations and individuals. failure to get a health-care “Tax reform should not in- cut, or how much revenue the
He also said he wants to elimi- overhaul passed. crease the tax burden on the new tax code would raise.
nates “loopholes” that benefit “I don’t want to be disap- middle class and there should —Peter Nicholas
the wealthiest Americans. pointed by Congress, do you not be any tax cut for the contributed to this article. The GDP reading partly reflected stronger business investment.
WASHINGTON—State offi-
cials increasingly worry that
CHIP at a Glance to ensure funding for CHIP is
continued and services for vul-
nerable children are main-
cording the Medicaid and CHIP
Payment and Access Commis-
sion, or MACPAC, a nonpartisan
Disclosure
Is Halted
TOM WILLIAMS/CONGRESSIONAL QUARTERLY/NEWSCOM/ZUMA PRESS
this year’s turbulent health- tained,” the spokeswoman said. legislative agency that provides
care politics could threaten The uncertainty reflects the analysis and recommendations
funding for the Children’s political dynamic after the to Congress. An additional 27 BY TED MANN
Health Insurance Program, a failure of the hard-fought Re- states would exhaust their fed-
popular initiative that usually publican effort to topple most eral funds by March. The White House said it
wins broad bipartisan support. of the ACA. Some Republicans say the would halt a planned Obama-
Federal funding for CHIP is CHIP supporters face other reserves mean there isn’t an era rule that would have re-
set to end Sept. 30. The fed- obstacles. Congress must pass urgent need to reauthorize quired businesses to begin col-
eral-state program provides a broad spending bill by the funding. But some state offi- lecting data about how much
health coverage to more than end of September to avoid a cials say they would run out of they pay workers of different
eight million low-income, un- partial government shutdown, money sooner than projected. genders, races and ethnic
insured children whose family and lawmakers also face pres- Virginia is estimated to ex- groups, saying that it posed a
incomes are too high to qual- Sen. Orrin Hatch was a chief sponsor of the 1997 CHIP legislation. sure to raise the government’s haust its federal funds in burden to employers.
ify for Medicaid. debt limit in coming weeks. March, but due to its payment The data-collection require-
Republicans are looking to Serves more than eight million uninsured children CHIP is authorized through procedures the state’s CHIP ment was proposed by the
possibly attach a repeal of Af- About $16 billion allotted to states in fiscal 2017 2019, but federal money for the program would actually wind Obama administration in 2016
fordable Care Act taxes—in- Federal funding set to end Sept. 30 if not extended state portion of the program down in January, said Linda as part of its efforts to ad-
cluding levies on certain isn’t. Congress last reautho- Nablo, chief deputy director dress pay disparities among
health-insurance plans and rized that funding in 2015 for a for the Virginia Department of workers of different groups.
medical devices—to a CHIP re- Washington next week after its chairman of the Senate Fi- two-year period that ends Sept. Medical Assistance Services. The Trump administration
authorization bill, people fa- August recess, it isn’t clear nance Committee, was a chief 30. In fiscal 2017, federal CHIP Families would get a 60-day will stay implementation of
miliar with the thinking said. how hard lawmakers will push sponsor of the 1997 CHIP leg- allotments to the states came notice that their coverage was the rule, which would have re-
Members of both parties to attach measures to the CHIP islation along with the late to roughly $16 billion. ending, she said. quired employers to report the
have also discussed using the bill. But some state officials are Democratic Sen. Edward Ken- States have some cushion if More than 121,000 children pay data for the first time in
CHIP bill to extend payments worried enough that they al- nedy of Massachusetts. the federal funding is delayed, are covered in Virginia, includ- the spring. “It’s enormously
to insurers under the ACA. ready are looking at whether Mr. Hatch is working with with unspent federal funds re- ing 1,100 with cancer. About burdensome,” said Neomi Rao,
The risk, lobbyists and state they may have to wind down fellow lawmakers and the distributed to states that have 70,000 would be at risk of los- administrator of the Office of
health officials say, is that their programs if Congress fails Trump administration to find a used up their allotment cover- ing coverage at January’s end, Information and Regulatory
such brinkmanship could en- to reauthorize the funding. way to ensure funding is pro- ing some of the shortfall. she said. “We have kids in the Affairs, which analyzes the
danger quick passage of a CHIP has earned bipartisan vided, a committee spokes- Arizona, Minnesota, North middle of lifesaving treatment. cost of federal rules and regu-
funding reauthorization. support from the outset. Sen. woman said. Carolina and Washington, D.C., What do we say to those fami- lations. “We don’t believe it
When Congress returns to Orrin Hatch (R., Utah), now “There is a bipartisan desire would run out of their federal lies?” said Ms. Nablo. would actually help us gather
information about wage and
employment discrimination."
Wisconsin Suit Aims to Cut Through Butter Laws The Obama administration
proposal directed the Equal
Employment Opportunity Com-
mission to begin collecting
BY QUINT FORGEY devotees of the popular Kerry- should not restrict our liber- their state fairs, Wisconsin, cess, equal protection and wage and pay data from private
gold brand of butter, which is ties—particularly our ability home of a $43.4 billion dairy commercial speech clauses. employers with 100 or more
A new lawsuit is churning produced in Ireland and hasn’t to engage in a legitimate busi- industry, plays it straight. Wisconsin laws have employees and federal contrac-
up trouble in America’s Dairy- been tested by the state. Local ness and make a living.” The Wisconsin State Fair’s shielded the dairy industry tors with 50 or more employ-
land. Attorneys with the Wis- retailers say their inability to An Ozaukee County Circuit only butter competition is a from out-of-state competition ees. The proposal effectively
consin Institute for Law and sell the grass-fed, gold-pack- Court judge this month denied mostly corporate auction for decades, but have often expanded the range of data em-
Liberty are taking the state to aged spread has affected their the state’s motion to dismiss where networking bidders from crumbled under judicial scru- ployers were required to report
court over a 1953 law that bottom line. WILL is repre- the suit. “The Attorney Gen- a who’s-who list of the state’s tiny. The Wisconsin Supreme beginning this year on a form
mandates all butter sold in senting four consumers in eral will defend Wisconsin dairy world vie to purchase the Court in 1927 ruled unconsti- called the EEO-1. That form has
Wisconsin be graded and la- counties across Southeast Wis- laws against challenges and first-place winners from a tutional a law prohibiting the been used to collect informa-
beled on factors such as flavor, consin in the suit, as well as a we plan to represent the State cheese and butter contest held sale of oleomargarine and tion on the racial and gender
texture and color by state-li- health-food store in Grafton. of Wisconsin as this lawsuit two months prior. “The people other butter substitutes in the makeup of the workforce.
censed tasters. “I think the issue is impor- proceeds,” a spokesman for that enter the contest are pas- state, and in 1952 turned back In a memo, dated Tuesday,
Those convicted of selling tant because it’s a specific in- the Wisconsin Department of sionate,” said Katy Katzman an attempt to ban the sale of to Victoria Lipnic, the acting
unlabeled butter in the state stance of a larger problem,” Justice said in a statement. with the Wisconsin State Fair Dairy Queen soft-serve. chairwoman of the EEOC, Ms.
more than once could pay up Rick Esenberg, WILL president Butter is serious business in Dairy Promotion Board. In 1895, Wisconsin forbade Rao said the White House Of-
to $5,000 in fines and spend a and lead counsel, said of the Wisconsin. While other states WILL is alleging Wiscon- the sale of artificially colored fice of Management and Bud-
year in county jail. obscure, 64-year-old ordi- elect butter queens and honor sin’s butter law violates the margarine. That law wasn’t re- get would stay the rule and
The statute has enraged nance. “The government massive butter sculptures at state constitution’s due pro- pealed until 1967. conduct a review.
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A8 | Thursday, August 31, 2017 THE WALL STREET JOURNAL.
REVIEW
Summer Books
options had been available. And yet it’s aston-
life some of this elusive summer spirit. In fact, ishing how often my friends and I find our-
I think we all might benefit from doing so. selves engrossed in random books. My most
Summer is a time when we remember to put recent was “Thatched With Gold: The Memoirs
our smartphones down, even if only for a few of Mabell, Countess of Airlie”; another was
gotten medical attention so quickly. “I’m ority, given limited funding. “At the moment,
alive,” he says. “I can’t ask for much more we need to fix the current system because
than that.” people are dying literally over 100,000 a year,
Many others aren’t so fortunate. Every SNAKEBITES kill more than 100,000 people a year world-wide. Above, a cobra. and they can’t wait 15 to 20 years for a won-
year, more than 100,000 people world-wide der drug,” says David Williams, a toxinologist
are killed by snakebites, and about 400,000 travenously in hospitals or clinics, far from victim can get antivenom and medical care. and herpetologist at the University of Mel-
undergo limb amputations or are otherwise where many victims are bitten. And it is still “We’re just trying to fill the gap between the bourne in Australia and CEO of the nonprofit
disabled, according to the World Health Or- manufactured using the same basic method bite and the hospital,” says Dr. Lewin, who Global Snakebite Initiative.
ganization. Experts say the real toll is likely created in the 1890s, which involves milking helped to treat Mr. Heenan. Dr. Williams sees an urgent need to im-
much higher because so many poisonous snakes through their fangs, injecting the Lab tests show that the drug, known as an prove the prevention and treatment of snake-
snakebites go unreported. venom into horses or other large animals and sPLA2 inhibitor, blocks one of the deadliest bites, to tighten regulations to keep poor-
Yet the problem attracts little investment. collecting their antibodies. toxins in venoms from an array of snakes, Dr. quality antivenoms off the market, and to
Snakebite “envenoming,” or poisoning, is Scientists, including some from outside the Lewin says. The drug was originally devel- make antivenom production more efficient.
largely ignored by public-health authorities field, are working on ways to modernize oped by Eli Lilly and Shionogi for other pur- He supports both immediate and long-term
and drug developers, though experts hope snakebite medicine, but it isn’t easy: Venom poses but was shelved. Eli Lilly recently pro- approaches. “I think we need to innovate
that it will attract more attention and funding is a complex mixture of enzymes and proteins vided documents to help Dr. Lewin further his across the board,” he says.
after being added to the WHO’s official list of and varies by species of snake. research and development. As for the farm where Mr. Heenan was bit-
neglected tropical diseases in June. Matthew Lewin, an emergency-medicine Snakebite science needs groundbreaking ten, it has put up signs warning about rattle-
Antivenom can be hard to find in Africa doctor in Corte Madera, Calif., is developing solutions, says Jerry Harrison, a member of snakes. Once he recovers, Mr. Heenan is de-
and Asia, where snakebites pose the largest an antidote that could be administered to a the bands Talking Heads and the Modern Lov- termined to get back to work there. “I
threat. It can also be of poor quality. It usu- snakebite victim on the spot, blocking many ers, who co-founded a biotech company called guarantee you I will religiously watch every
ally has to be kept cool and administered in- immediately life-threatening effects until the Ophirex with Dr. Lewin to advance the drug. step from now on,” he says.
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THE WALL STREET JOURNAL. Thursday, August 31, 2017 | A9
LIFE&ARTS
tray tables, turn all lights on and
off. Then they recline each seat
with knee-knocking force.
One squeaks like a mouse on an
exercise wheel. “Write it up,” says
THE MIDDLE SEAT | By Scott McCartney Joyce Adkins, a veteran flight at-
tendant from Los Angeles who’s
How to Inspect
been part of the new-plane inspec-
tion team for 17 years. “No one
wants to hear that in the middle of
the night.”
Every Piece of a
The team leaves the seats re-
clined during a lunch break to see
if any creep back up, which would
indicate a mechanical defect.
Widebody Plane
In galleys, flight attendants ver-
ify temperature readings on ovens
and chillers. (On one plane, Ms.
Adkins says she discovered a
chiller wired backward, so off was
on and on was off.) They flush all
American Airlines pilots, mechanics and flight the toilets, blow fake smoke into
attendants kick the tires on a new Boeing 787-9 smoke alarms, make sure all prere-
corded emergency messages sound
when required. They check to
make sure carpet seams line up.
They look for scuffs and scratches.
“We basically touch everything
on the airplane that the crew and
customers contact,” says Steve
Young, a Los Angeles based flight
attendant. “We’re all airplane
geeks, very detail-oriented.”
In the cockpit, Gary Beam, an
American pilot whose main job is
TRAVIS DOVE FOR THE WALL STREET JOURNAL
PHOTO ILLUSTRATION BY THE WALL STREET JOURNAL; PHOTOS: GASOLINE GLAMOUR; KATE SPADE NEW YORK (3); CHASER BRAND; THREEPOTATOFOURCO; CUFFLINKS, INC; LETTERCLOTHINGCO; WILDFOX; UNCOMMONGOODS; ISTOCK (2)
FASHION
OPINION
REVIEW & OUTLOOK
First Resilience,
The Hurricane Learning Curve Then Boondoggle
H
urricane Harvey is still pouring torren- preparing to deploy overseas. By Monday more
tial rain on Texas and Louisiana, which than 12,000 Guardsman were assisting with An arrow straight up cars found their way blocked by a mas-
in recent decades has sive cattle drive down U.S. 90, as ranch-
means more damage to come. But it search and rescue, and preparing to help with
been the rising sever- ers moved their herds to higher
isn’t too soon to point out recovery. ity of hurricane dam- ground.
some compensating news: The lessons of failure The state ramped up more age. The culprit is the Disrupted drivers didn’t mind; they
Storm responders are putting in Katrina are saving than 200 buses to transport ever larger number of stopped to take pictures, according to
into practice the lessons of people out of coastal areas, people and their stuff the Houston Chronicle, eyewitnesses to
past extreme weather and sav- lives in South Texas. and more than 40,000 shelter BUSINESS
in the path of these a phenomenon seen only in John
WORLD
ing lives as a result. beds in safe zones. Houston By Holman W.
storms. Wayne movies. Another expression of
By late Tuesday the storm Mayor Sylvester Turner gave It has nothing to do resilience.
Jenkins, Jr.
had dropped 50 inches of rain on parts of Texas— clear instructions to residents to stock up and with climate change. At the time of Sandy, New York’s
breaking continental records. Harvey appears to avoid roads, and he quickly deployed police and During the past de- Mayor Mike Bloomberg and Gov. An-
have claimed at least 15 lives, including a family firefighters. Dallas opened a megashelter at its cade that we keep being told was the drew Cuomo blamed the damage, non-
hottest on record (the record being sensically, on global warming. They had
of six swept away in a vehicle that remains miss- convention center and put hundreds of buses on
skimpy), the U.S. also saw a dearth of an eye on the administration in Wash-
ing. The Houston police by Tuesday morning had standby for flood victims. Officials in smaller, hurricane landfalls. A major storm ington. They knew its hobbyhorses and
rescued at least 3,400 people from rising floodwa- coastal towns worked with state authorities on hadn’t hit the U.S. since 2005. talking points. Their blather was aimed
ter, and the Coast Guard rescued 3,000 on Mon- mandatory evacuations. Sandy, as many in the press played at creating an atmosphere conducive to
day. Officials are predicting the storm will force One theme is communication and clear lines down at the time, had actually been the billions in federal rebuilding grants
30,000 people into shelters and the economic of authority. Every analysis of Katrina has pointed downgraded to a tropical storm when it that soon would be flowing.
damage will be at least $30 billion. to confusion between Louisiana and Washington reached the New York and New Jersey
Yet as terrible as the toll is, it’s impossible to about who should be in charge. In this case, Gov- shore in 2012. The impact was worse
ignore the improved response compared to ernor Abbott and local officials appear to be tak- than it might have been for a simple Maybe we should start
storms past. Hurricane Katrina in 2005 left New ing the lead but are working closely with the feds reason: The storm followed an unusual budgeting for the kind of
westward track, and a garden-variety
Orleans a chaotic scene of failed evacuation, to marshal resources. These agencies are also us- bailout Houston will need.
storm surge happened to coincide with
stranding 100,000 people in the low-lying city. ing social media to provide instructions to vic- a full-moon high tide.
It killed 1,833, left three million without power tims, cut through rumors, and work with Housto- Harvey has been an energetic storm
and cost an estimated $100 billon to $130 billion. nians rushing to help neighbors. but also an uncharacteristically station- Two-thirds of Katrina’s damage in
A few weeks later more than 100 people died at- Corporate America also learned from Katrina. ary one. The deluge that fell and con- New Orleans wasn’t covered by insur-
tempting to leave Houston, part of a panicked Telecom companies have upgraded their networks tinues to fall on Houston is created by ance. Less than half of Houston com-
evacuation before Hurricane Rita. against natural disasters after Katrina knocked a storm hovering in place, sucking up mercial buildings and homes in the wa-
The federal government, local officials and out more than 1,000 cell sites and put 911 calls and moisture from the Gulf of Mexico and terlogged zone are covered by flood
private and charitable interests are now apply- other networks in gridlock. As Harvey neared, dumping it on land. insurance.
ing the lessons of these past failures. Katrina ex- AT&T and Verizon dispatched fuel for emergency Even press accounts that noted a It wouldn’t be politically realistic to
posed the Federal Emergency Management generators and deployed mobile cell sites. lack of discernible connection to cli- expect the Trump administration to
mate change somehow, by paragraph resist opening the spigots as every
Agency’s dysfunction, and Congress responded The Federal Communications Commission re-
three, were quoting climate-change other administration has. The back-
with reforms that altered how the agency ported Sunday that just 4% of 7,804 cell sites in campaigners. ground chant may not be “climate
works—particularly on prestorm preparation. Harvey’s path were knocked out. While Texans are This is a counsel of despair. Daily change”—perhaps the political sound
Prior to Katrina, FEMA waited until governors certainly getting busy signals, many emergency tides rise and fall along the East Coast effects will dwell instead on Houston’s
requested assistance, often arriving late as it did calls are getting through. By Friday Wal-Mart had anywhere from 2 feet to 11 feet. Storm role in protecting America’s “energy
in New Orleans. already dispatched more than 1,000 trucks of surges associated with hurricanes range independence.”
FEMA was on the ground in Texas nearly 48 goods to Houston, and Bass Pro Shops is handing from 7 feet to 23 feet. These dwarf the Only 10% of California residents have
hours before Harvey made landfall, working with over 80 of its Tracker boats for rescues. effect of any global-warming-caused in- earthquake insurance; 85% of the public
local partners and unifying a larger federal ef- The Texas stretch of the Gulf Coast is home crease in the steadily rising sea levels assets in San Francisco are “self-in-
fort. In addition to thousands of FEMA employ- to nearly five million barrels a day of oil and gas of the past century. sured”—i.e., uninsured. What will be
ees and the Coast Guard, the Energy Department refining capacity. Post-Katrina, refineries hard- The U.S. economy consists of mil- the accompanying music then?
lions of Americans who aren’t waiting If Gov. Jerry Brown is still in office,
was on hand to monitor oil and gas facilities, and ened their facilities against the flooding threat
around for someone to tell them what maybe he will find some way to con-
Health and Human Services sent 650 staffers to by investing in systems that guard electric to do. This makes it resilient. Private nect an earthquake to global warming.
provide medical assistance. The Department of equipment. They stacked up on emergency gen- boat owners in Houston leapt into ac- Otherwise taxpayers in the Midwest
Homeland Security on Saturday activated a erators and fortified against wind and storm tion to rescue the stranded, many can expect to hear how vital Silicon
post-Katrina program that stands up a “surge” damage. So while refineries are closed as they whose pleas were transmitted via social Valley is to America’s global leadership.
force of non-FEMA federal employees trained to ride out the storm, they should be back online media, bouncing server to server until If the U.S. were a private business,
assist in natural disasters. quickly when weather and roads clear. they reached the guy with a skiff down such “contingent” liabilities would
Former Louisiana Gov. Kathleen Blanco daw- The storm isn’t over, and no doubt some will the block. show up in measures of the federal
dled about getting her National Guard on the find reasons to point fingers. But at a time when Gasoline prices ticked up on reports debt and deficit. In Washington, they
streets to help with rescues and maintain order. Americans have so little trust in government, it’s of damage to the Gulf’s massive refin- do things differently.
ing industry, encouraging some to forgo One of the most interesting quotes
Texas Governor Greg Abbott quickly activated worth noting when it shows it can learn from
filling up and leaving more fuel avail- collected by Journal reporters this
the entire Texas National Guard, including those previous failures. able for those who value it most. For- week comes from Michael Williams, a
eign refiners are eyeing the higher mar- ballpark maintenance worker for the
A
Thousands in Houston have been solace to the hard-hit city. He noted
merica’s Seventh Circuit Court of Ap- attorneys were to collect $520,000 in fees. flooded out, and thousands more are succinctly: “Houston floods fast.
peals has given the plaintiffs bar some- Enter Theodore Frank, who directs the Center without power and likely to be so for They’re doing all this construction but
thing to chew on. Writing for a three- for Class Action Fairness at the Competitive En- days. The outages Americans experi- we still got no [storm] outlets.”
member panel, Judge Diane terprise Institute. He objected ence nowadays aren’t more frequent, Between the immediate displays of
Sykes on Friday threw out a A U.S. appeals court to the settlement on grounds but tolerance for them is lower, hence self-help and resilience, and the pre-
a growing number of householders dictable federal spendathon that’s com-
class-action lawsuit settle- tosses the Subway that while the lawyers were
who outfit themselves with emergency ing, let Mr. Williams be heard too. A
ment involving the Subway “handsomely compensated” generators. few such lessons and better planning
food chain’s “Footlong” sand- sandwich settlement. the class received “negligible Even those Houston-area residents might help lighten the burden of those
wich on grounds that the only to no relief.” who were free to move around in their facing future emergencies.
beneficiaries were the lawyers. During litigation it emerged
The case started in 2013 after an Australian that though the baked length of a roll may vary,
teenager posted a photo on Facebook of a Subway the amount of dough is uniform. Judge Sykes also
Footlong next to a tape-measure showing it to be noted that “after the settlement—despite the new
11 inches. The post went viral—and so did the law- measuring tools, protocols, and inspections—
Those Who Commute
yers. Nine class-action suits were launched there’s still the same small chance that Subway
around the U.S., later consolidated into one. will sell a class member a sandwich that is slightly
Subway soon announced steps to ensure its shorter than advertised,” owing to the inherent
Deserve a Salute
By James Bruce flourish, and too many unmarried fa-
baked rolls would be at least 12 inches. In 2016 vagaries of food production. It’s safe to assume,
C
thers don’t, as Charles Murray ex-
a lower court approved a settlement under wrote Judge Sykes, that Subway customers ramped almost to the point of plains in “Coming Apart.”
which Subway promised to maintain practices “know this as a matter of common sense.” These suffocation, surrounded by hard • For the schools. If you can afford a
to ensure more uniformity in its bread. The suing days we’ll take any victory for common sense. plastic and metal, you glide private education for your little angels,
through the darkness, wondering then good for you. But for many par-
whether you will survive. You’re not pi- ents, choosing a school means chang-
Nuclear Missiles Over Tokyo loting a submarine or a spacecraft
headed toward Mars. You’re just a New
ing districts. So get into that car, dad.
Take that train, mom.
R
esidents of northern Japan awoke Tues- their own nuclear arsenal, but that could change York commuter trying to get home, as • For the opportunity. What do New
day to sirens and cellphone warnings to if they conclude America isn’t reliable in a cri- the “Summer of Hell” for public transit York, Washington and San Francisco
nears its end. Or perhaps you’re leav- have in common, apart from terrible
take cover as a North Korean rocket flew sis. Or Japanese may simply decide they can’t ing Los Angeles on Tuesday to beat the
overhead. The intermediate- have their survival depend on Friday traffic.
range missile test will further Accepting a nuclear even a faithful ally’s judgment. Nearly 40% of American workers— Your daily grind
roil the politics of security in North Korea probably Some Japanese politicians are more than 50 million people—travel 30
Northeast Asia and is another already talking about their minutes or more to work, according to
brings prosperity
prod toward Japan acquiring means a nuclear Japan. own nuclear deterrent. And the Census Bureau. It’s a grind: the de- to me—and the world.
its own nuclear deterrent. while public opinion currently layed trains, the stink of sweaty dress
Pyongyang tested long- opposes nuclear weapons, fear shirts, the motionless traffic on the
range missiles over Japan in 1998 and 2009, could change minds. Japan has enough pluto- “freeways.” traffic? The answer is good white-
claiming they were satellite launches. The first nium from its civilian nuclear reactors for more But the worst part is the incessant collar jobs and a chance for a better
reminder that you are the world’s life. Cities are America’s economic en-
shocked Japanese and led to cooperation with than 1,000 nuclear warheads, and it has the
problem. Walking doesn’t pollute. gines, and they can take you to success
the U.S. on theater missile defense. After the know-how to build them in months. Cars and trains do. Today’s cultural only if you hop on board.
second, Tokyo curtailed the North’s funding This prospect should alarm China, which trends protest your lifestyle. Think • For America. According to Mark J.
sources within Japan’s ethnic Korean commu- would suddenly face a nuclear-armed regional about it the next time you drink your Perry, in terms of economic output,
nity. Tuesday’s launch is even more threatening rival. The U.S. also has a strong interest in pre- fair-trade coffee on a train built be- New York state rivals South Korea, but
because U.S. and allied intelligence agencies as- venting a nuclear Japan, not least because fore the Hogwarts Express. Your trip with 17 million fewer workers. Califor-
sess that North Korea now has the ability to hit South Korea might soon follow. East Asia would isn’t recyclable. nia beats France, but with six million
Japan with a miniaturized nuclear warhead join the Middle East in a new era of nuclear pro- As you face the day ahead—and the fewer workers. This kind of perfor-
mounted on a missile. liferation, with grave risks to world order. This straphanger next to you, who really mance wouldn’t be possible without
Much of Japan is protected by its own missile is one reason that acquiescing to a North Korea needs a shower—you may begin to for- millions of American commuters. Your
defenses as well as systems operated by U.S. with nuclear missiles is so dangerous. get why you commute. Here’s a fresh disagreeable journey helps support the
reminder: productivity that delivers prosperity to
forces in the region. Japan also recently de- Yet this is the line now peddled by former
• For your family. How you used to the country, indeed the world.
ployed four Patriot PAC-3 missile-defense bat- Obama National Security Adviser Susan Rice love the city when you were single and That includes the small town in Ar-
teries to the west of the country, but these and former Director of National Intelligence carefree! But that cute neighbor be- kansas where I live. I walk to work,
didn’t cover the northern island of Hokkaido James Clapper, who says the U.S. must begin came your spouse, and then came mar- which isn’t without hazards. One time
overflown by Tuesday’s missile. “accepting it and trying to cap it or control it.” riage and maybe children. A kitchen I was bitten by a duck overeager (in my
Japan’s ultimate security is the U.S. defense Having said for eight years that a nuclear North the size of a waffle iron felt hip when estimation) to protect its nest.
and nuclear umbrella, with its treaty guarantee is unacceptable, they now say that President you were eating out all the time, but But, overall, it’s wonderful. Yet I
that the U.S. will respond if Japan is attacked. Trump and Japanese Prime Minister Shinzo Abe then you learned to cook. know how much I depend on you, the
But the logic of deterrence depends on having had better get used to it. • For the community. If you drive big-city commuters: You set up my re-
a rational actor as an adversary, and rationality But “control it” how? North Korea has made from suburbia to an office downtown, tirement account, approved my mort-
can’t be guaranteed in North Korea. Its recent clear it won’t negotiate away its nuclear pro- you’re leaving a place where first gage application and routed my new
comes love, then comes marriage, shirt from a distribution center to my
development of an ICBM capable of hitting the gram. The U.S. can threaten mutual-assured de- then comes a baby in a carriage. In doorstep. So thank you—and have a
U.S. mainland also changes the equation. If struction, but Tuesday’s missile test over Japan cities the baby often comes first, safe trip home.
North Korea attacked Tokyo and the U.S. re- shows how North Korea will use its nuclear sometimes with no marriage at all.
sponded with an attack on Pyongyang, U.S. cit- threat to coerce and divide the U.S. and its al- That’s a crucial difference. Married fa- Mr. Bruce is an associate professor
ies might then be endangered. lies. Accepting a nuclear North Korea means ac- thers work to make their neighbor- of philosophy at John Brown University
Japanese leaders have long resisted building cepting a far more dangerous world. hoods places where children can in Siloam Springs, Ark.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL. Thursday, August 31, 2017 | A11
OPINION
P
for the apparent success: person- tion has relied on experts like
resident Trump visited nel and preparation. Mr. Trump Messrs. Long and Bossert to reas-
Texas Tuesday to assess has surrounded himself with lead- sure the public, which seems an
the damage from Hurri- ers experienced in this area. John appropriate strategy. Message dis-
cane Harvey and show Kelly, the president’s chief of staff, cipline matters. When responding
concern for its victims. is fresh off his stint as the secre- to a disaster, Mr. Cilluffo says, you
So far, his administration is tary of homeland security. He “can’t have one message here, an-
largely getting praise for effective brought to the White House his other message there, and a tweet
handling of the crisis. Washing- own deputy, Kirstjen Nielsen, a saying a third thing.”
ton’s disaster authorities appear veteran of George W. Bush’s Home- It’s reassuring that the White
to be in sync with the state on land Security Council. House understands the importance
roles and responsibilities; the Fed- Tom Bossert, another Bush of relying on trusted messengers
eral Emergency Management alumnus now advising Mr. Trump during a crisis—especially given
Agency and its leader, Brock Long, on homeland security, has acquit- the backlash to Mr. Trump’s com-
deployed resources as Harvey ap- ted himself well on television, pro- ments this month after the violence
proached; and the government re- jecting calm and expertise as he in Charlottesville, Va. During an
sponse as a whole appears well discusses the hurricane response. emergency, the government needs
coordinated. It may be premature to conclude wide cooperation from the public,
that Mr. Kelly has succeeded in which may not be possible under
REUTERS
bringing order to the Oval Office, any president with credibility prob-
The White House has but Harvey has demonstrated a re- lems. Messrs. Long and Bossert
assuring ability to focus on a di- Texas Gov. Greg Abbott and President Trump in Corpus Christi, Texas, Aug. 29. have the standing to appeal to
shown a focus on Harvey saster when needed. Americans across the partisan di-
that extends even to the Beyond the White House, Mr. emergency management. Frank the White House is actively moni- vide during Harvey and whatever
Trump still lags behind his prede- Cilluffo, a homeland security aide toring events. On Tuesday he disaster may come next.
president’s Twitter feed. cessors in filling political appoint- in the Bush administration, says retweeted an urgent alert from Mr. Trump’s handling of the
ments, but he appears to have pri- this showed the White House was Brazoria County saying that a levee hurricane response thus far is to
oritized the right ones. taking disaster readiness seri- at Columbia Lakes had been be commended, but this is no
“I give FEMA a grade of A-plus, The president has made nomi- ously. “Training is everything breached and residents needed to time for complacency. The recov-
all the way from the president nations for about half the slots at here,” he told me. “You want to get out immediately. ery in Texas will take a long time,
down,” Texas Gov. Greg Abbott the Department of Homeland Secu- make mistakes on the practice Mr. Trump’s tweets about the and new disasters are always in
told “Fox News Sunday.” Yes, Mr. rity, more than at most depart- field, not in the actual event.” storm have been informative and the offing. The Trump administra-
Abbott is a fellow Republican, but ments. Some nominees, such as Then in early August, weeks be- responsible, with a tone appropri- tion would serve Americans well
he is also interested in protecting Mr. Long’s two deputies at FEMA, fore Harvey showed up on the ra- ate to the human tragedy. To the by following its successful ap-
Texas and would not have said “A- await Senate confirmation hear- dar, Mr. Long hosted the president extent he has been criticized, it has proach to this first crisis with a
plus” if the state weren’t getting ings. Mr. Long is an experienced and other cabinet officials at been mostly for tweeting on unre- continuing focus on disaster man-
what it needed. hand, having previously served as FEMA for a briefing on the com- lated topics, such as his pardoning agement. Today it’s Harvey. To-
That assessment is backed up Alabama’s head of emergency man- ing hurricane season. of former Sheriff Joe Arpaio and morrow, who knows?
by Rear Adm. W. Craig Vanderwa- agement. He has been a reassuring Thus far, the most controversial the “great” new book by Sheriff Da-
gen, a former career emergency and take-charge presence through- part of the president’s hurricane vid Clarke. Although it isn’t realis- Mr. Troy, a former deputy sec-
manager who is plugged into the out the Harvey response. response has been communications. tic to expect the White House to retary of health and human ser-
Harvey effort. “Early read,” he told Mr. Long began preparing for On the positive side of the ledger, eschew all other subjects during a vices, is author of “Shall We Wake
me in an email, “is that Executive the next disaster the day he was Mr. Trump has used his vast Twit- crisis, perhaps the president could the President? Two Centuries of Di-
Branch is performing well under sworn in, when he presided over a ter following both to provide use- avoid tweeting about unessential saster Management From the Oval
this President.” cabinet-wide tabletop exercise on ful information and to convey that matters until the storm passes. Office” (Lyons Press, 2016).
S
central position in international fi- time and resources by banks, gov- likely will have other problems munity agree that Iran is fulfilling
ince taking office, President nance—particularly its control ernments and regulators. So far with the U.S. its commitments.
Trump hasn’t hesitated to over the invisible plumbing that there haven’t been sufficient in- Some members of Congress will The U.S. built an international
threaten or implement sanc- allows money to move around the centives to make those changes, be tempted to promote these re- consensus that Iran’s nuclear pro-
tions against countries such as world. but governments and banks will maining issues as new reason to gram was a problem. European
Venezuela and North Korea. Sanc- Recognizing how much of their reconsider if the U.S. abuses its keep sanctions in place. That’s why and Asian partners took appropri-
tions are useful tools, but Mr. work touches the U.S., major for- position. the 1974 Jackson-Vanik restrictions ate action, suffering real economic
Trump and bipartisan majorities in eign banks will often go so far as Policy makers and regulators in on most-favored-nation status for harm by ratcheting back oil pur-
U.S. Congress run the risk of mak- to treat themselves as “U.S. per- the U.S. have long been sensitive to chases and other commerce with
ing them less effective. sons” for legal and regulatory pur- this risk. They have taken it into Iran and then working to negoti-
The U.S. economy’s size isn’t poses. Countries or entities subject account in the application of new America’s central role in ate the deal.
the primary reason its sanctions to U.S. sanctions thus have a very sanctions and have worked closely If the U.S. cannot take “yes” for
are so powerful: Countries without difficult time with even simple with foreign banks to ensure finance gives it unique an answer, those same partners
a significant trade relationship banking transactions, which is cat- they’re doing permissible busi- clout, but this could erode likely will be at least as concerned
with the U.S. can still be severely astrophic for trade. ness—even business barred to their about the threat posed by Amer-
damaged by bilateral sanctions. Yet America’s dominant place in American competitors. if Congress isn’t careful. ica’s financial power as the threat
Though the European Union’s international banking, like its posi- For example, outreach surround- of Iran’s nuclear program.
gross domestic product almost tion in the broader international ing the Iran deal was designed to In a time when U.S. consistency
matches America’s, EU sanctions system, can be lost. The interna- assure foreign businesses and reg- Russia stayed in place for a gener- and reliability is openly questioned
are much less devastating. This in- tional financial plumbing can be ulators that remaining U.S. sanc- ation after Russia opened up emi- by some of America’s closest allies,
tions were tailored and not a back gration restrictions, the legisla- threats of permanent sanctions
door to enforcing the sanctions tion’s original aim. will draw more attention to the
lifted by the deal. Thanks to these Mr. Trump is right to say the risks of being dependent on the
PUBLISHED SINCE 1889 BY DOW JONES & COMPANY efforts, major foreign banks work- shift in power toward Congress U.S. financial system. America’s
Rupert Murdoch Robert Thomson ing with Iran have largely chosen will make it harder to use sanc- importance as an international fi-
Executive Chairman, News Corp Chief Executive Officer, News Corp to work with U.S. officials and stay tions as a chit in international nancial hub won’t disappear over-
Gerard Baker William Lewis in careful compliance. negotiations. night, and neither will the reach of
Editor in Chief Chief Executive Officer and Publisher Washington’s caution seems to For those who are deeply con- U.S. sanctions.
Matthew J. Murray DOW JONES MANAGEMENT: have been lost with the latest cerned by Russian meddling in If the U.S. comes to be seen as
Deputy Editor in Chief Mark Musgrave, Chief People Officer; sanctions against Iran, Russia and other countries’ elections—and by an untrustworthy custodian,
Edward Roussel, Innovation & Communications;
DEPUTY MANAGING EDITORS:
Anna Sedgley, Chief Operating Officer & CFO;
North Korea—legislation that Mr. Trump’s apparent noncha- there will be a slow and inexora-
Michael W. Miller, Senior Deputy;
Thorold Barker, Europe; Paul Beckett, Katie Vanneck-Smith, President passed with overwhelming sup- lance—congressional authority ble erosion of America’s role and
Washington; Andrew Dowell, Asia; OPERATING EXECUTIVES: port from both parties and was over sanctions may feel like prog- influence.
Christine Glancey, Operations; Ramin Beheshti, Product & Technology; signed into law by a hesitant Mr. ress. For banks, governments and Sanctions compare favorably
Jennifer J. Hicks, Digital; Jason P. Conti, General Counsel;
Neal Lipschutz, Standards; Alex Martin, News; Frank Filippo, Print Products & Services; Trump. The new sanctions will do regulators abroad, it looks as if with any other tool the U.S. has—
Shazna Nessa, Visuals; Ann Podd, Initiatives; Steve Grycuk, Customer Service; little to change the kinds of com- the U.S. is turning sanctions from and certainly very favorably to
Matthew Rose, Enterprise; Kristin Heitmann, Transformation; merce allowed with the target a means of achieving particular military action. They can help ad-
Stephen Wisnefski, Professional News Nancy McNeill, Advertising & Corporate Sales;
Jonathan Wright, International countries. The law’s main function ends into permanent stigmas. That dress real problems in the world,
Paul A. Gigot, Editor of the Editorial Page;
Daniel Henninger, Deputy Editor, Editorial Page
DJ Media Group: is to shift influence over lifting makes it more attractive to find which is why the U.S. shouldn’t
Almar Latour, Publisher; sanctions from the White House ways to leave the U.S. banking fritter them away.
WALL STREET JOURNAL MANAGEMENT: Kenneth Breen, Commercial
Suzi Watford, Marketing and Circulation; Professional Information Business: to Capitol Hill. system.
Joseph B. Vincent, Operations; Christopher Lloyd, Head; Congress has historically found Mr. Trump also is threatening Mr. Blanc, a senior fellow at the
Larry L. Hoffman, Production Ingrid Verschuren, Deputy Head it more attractive to levy sanctions loudly to trash the Joint Compre- Carnegie Endowment for Interna-
EDITORIAL AND CORPORATE HEADQUARTERS: than to lift them. Sanctions gener- hensive Plan of Action, better tional Peace, was the U.S. State
1211 Avenue of the Americas, New York, N.Y., 10036 ally target adversaries, so that known as the Iran deal. Never Department coordinator for Iran
Telephone 1-800-DOWJONES
even if a country changes the pol- mind that America’s international nuclear implementation (2015-17).
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A12 | Thursday, August 31, 2017 THE WALL STREET JOURNAL.
‘Truth-to-Materials’ Sculpture
Tom Joyce’s monumental works are a love letter to abstract shape, paying homage to forebears dating back to Brancusi
thought possible from forged steel.
BY ANN LANDI
And the same is true of several of
the outdoor sculptures, like “Stack
Santa Fe, N.M. VI” and the “Surge” series
THESE ARE strange times for (2015-17), five discrete plump
monumental sculpture, whether sculptures, whose gentle folds
outdoors or indoors, sited in public have an almost erotic charge. In
spaces or ensconced in the capa- the same gallery, a couple of huge
cious lobbies of high-rise buildings. charred drawings, made up of exu-
Yet for ambitious artists, big works berant circular shapes burned into
in durable materials can prove irre- wood fiber through “pyroengrav-
sistible. And while contemporary ing,” are impressive in size but
art may not carry the controversial oddly inert, like giant doodles with
charge of Confederate statues, it’s a protractor and compass.
still a cultural landscape dotted And what to make of the last in-
with extremes: Jeff Koons’s giant terior gallery, an installation called
balloon dogs and Damien Hirst’s “Tenet” (2017), which is literally
flayed vision of the Virgin Mary on the sculptor’s studio turned upside
the one hand, and on the other, down? A desk (with gloves, a note-
works by younger artists like Carol book and other implements of the
Bove and Roxy Paine, who riff on a artist’s trade attached), bookcases
Modernist tradition that the unini- and tools are all affixed to the ceil-
tiated may find hard to understand. ing. Mr. Joyce told me it was a
But another strain of sculpture kind of farewell, a notion I had
is still adventurously at work, and trouble grasping. To the average
this one stems from the venerable visitor, the dimly lighted installa-
“truth-to-materials” aesthetic and tion will seem spooky, threatening
DANIEL BARSOTTI/CCA
The Journal.
Anytime, Anywhere.
© 2017 Dow Jones & Co. Inc. All rights reserved. 6DJ5547
TECHNOLOGY: MICROSOFT’S CORTANA AND AMAZON’S ALEXA TO WORK TOGETHER B4
Euro vs. Dollar 1.1922 g 0.43% FTSE 100 7365.26 À 0.38% Gold 1308.10 g 0.38% WTI crude 45.96 g 1.03% German Bund yield 0.362% 10-Year Treasury yield 2.145%
Novartis Cancer Therapy Wins Approval Swiss pharmaceuticals giant and its expected high price within a month of treatment.
Drugmaker defends
Novartis AG said it would had cast a shadow over what The company also said it would
$475,000 price tag charge $475,000 for the treat- has otherwise been seen as a offer financial assistance—such
for treatment, which ment, which involves extract- groundbreaking treatment. as help with copay, travel and
ing a patient’s disease-fighting The treatment, called accommodation costs—to pri-
breaks new ground blood cells, modifying them to CLT019 but re-christened by vately insured patients.
attack cancer cells more vigor- Novartis after the FDA ap- “We have taken a very re-
BY DENISE ROLAND ously and then reinjecting proval as Kymriah, has been sponsible approach” to pricing,
NOVARTIS/ASSOCIATED PRESS
AND PETER LOFTUS them in the patient. The shown to dramatically raise said Bill Hinshaw, Novartis’s
$475,000 price tag was signifi- the chances of survival for U.S. oncology head. He cited
The U.S. Food and Drug Ad- cantly lower than many ana- children and young people independent cost-effectiveness
ministration approved a first- lysts had expected. with an aggressive form of leu- estimates that showed Kym-
of-its kind cancer therapy The procedure can only be kemia who don’t respond to riah could command a price
aimed at bolstering a patient’s undertaken at a limited num- standard treatment. of $600,000 to $750,000. He
own immune cells, while the ber of facilities in the U.S. It is In a bid to blunt criticism said that because patients will
drugmaker behind the treat- highly tailored to individual over the price, Novartis said it be children or young adults—
ment attempted to allay patients and can take the bet- would take payment for pa- who typically fall under their
worry over the high cost of ter part of a month to com- tients covered by Medicaid parents’ or caregivers’ private U.S. health regulators approved Novartis’s Kymriah treatment,
the procedure. plete. Those logistical hurdles only if they respond to Kymriah Please see GENES page B2 which uses a patient’s own immune cells to fight cancer.
A
Abbott Laboratories...B2
Alibaba Group.............B4
Allstate ....................... B5
Fresh Direct ................ B2
G
Grab.............................B3
H
1Malaysia
O
Development...........B7
P
Cardiac Software Updated
Alphabet......................B4
Honda Motor...............B3
Peapod.........................B2 Abbott releases Abbott’s software update “to re-
Amazon.com.....B1,B4,B8 duce the risk of patient harm
Apple...........................B4 Hyundai Motor............B3
Petróleos de
Venezuela................B1
patches to protect due to potential exploitation of
B I Portfolio Resources pacemakers against cybersecurity vulnerabilities”
Group.........................B2 for the pacemakers, which use
Bank of America.........B5 International Petroleum
Investment ............... B7 S
threat of hacking electrical jolts to maintain a
Bank of New York
Mellon.......................B7 J regular heartbeat in patients
Shenhua Group...........B8
Berkshire Hathaway...B5 BY PETER LOFTUS with abnormal heart rhythm.
sued last week that several business.) brownies and cookies, growers
Whole Foods private labels, in- Wal-Mart Stores Inc. and and retailers said.
cluding 365 Everyday Value, Kroger Co. have rolled out in- Mr. Jensen, the Washington
would be available on Ama- store pickup for online orders. cannabis producer, said he
zon.com and via some of its While Amazon hasn’t de- hopes that his sun-grown, nat-
grocery-delivery options. scribed exactly how it might urally produced plants over
Whole Foods also declined to use Whole Foods to bolster its time will yield a 20% to 30%
comment. online delivery options, people premium over the average
The new Whole Foods cate- familiar with the matter have market price.
gory on Amazon.com for cus- said that it is likely to introduce “I always buy organic prod-
tomers of AmazonFresh, its on- online grocery pickup in stores. ucts at the store and think
line grocery-delivery service, In an announcement last week, there is a future for that in the
displays nearly 900 results for Amazon said it would be adding [cannabis] industry,” said Mr.
everything from $4.99 organic lockers for package pickups in Jensen. But, he said, “it’s a bat-
vanilla ice cream to $6.99 Whole Foods stores. It is un- A shopper considered medicinal cannabis at a dispensary in Santa Ana, Calif., this month. tle getting that awareness out.”
creamy almond butter. On Ama- clear if the lockers will be used
zon’s Prime Now app, which of- for food orders. Still, the higher
fers faster delivery, about 90
products are available to start.
Amazon said previously it
would add other private label
prices charged by Whole Foods
for its organic store goods
could limit sales on a mass-
market platform such as Ama-
PLAN changing the tax code could
push some borrowing into for-
eign markets, Mr. King said.
Debt is popular because it
to their benefit, said Brian Kit-
tle, a tax lawyer at Mayer
Brown LLP. Companies includ-
ing Mylan NV, Medtronic PLC
BONDS
brands to its selection. zon, analysts say. Continued from the prior page is cheaper than selling equity. and Johnson Controls Interna- Continued from the prior page
tal markets. “If you remove in- Its low cost is enhanced by de- tional PLC have in recent Bond traders said that the
terest deductibility in one lo- ductibility, which began in the years moved abroad in part to majority of Venezuela bond
BUSINESS NEWS
BUSINESS WATCH
Messaging App Plans Initial Coin Offer NEW YORK TIMES in the Family,” which was created
BY PAUL VIGNA It also is experimenting with ada and the U.S. can match any new service Kik specifically for the social-media
a potential way for its inves- Kik also allows developers offers and sell it to a larger Court Dismisses Suit website’s recently redesigned
Messaging-app operator tors to essentially cash out of to publish games and services user base. Now, Kik is trying Brought by Palin Watch video tab.
Kik Interactive said Tuesday the company without actually within the platform. to recast its platform around Mr. Ball’s spirited and even
that it was aiming to raise selling their equity. The Ontario-based company an in-house currency and refo- A federal court on Tuesday theatrical promotion of Lonzo,
$125 million through an initial The market for digital coins has said it has 300 million cus its shareholders on the dismissed a defamation lawsuit who was selected second in the
coin offering in September, has exploded in 2017, with registered users. But Kik re- digital tokens it plans to issue. brought by Sarah Palin against National Basketball Association
one of the first established more than 100 firms raising vealed in the token offering’s Kik had previously disclosed New York Times Co., saying the draft this summer, has been the
companies to step into the more than $1.7 billion, up from marketing materials that it plans for a coin offering, but it former Alaska governor failed to subject of much media attention.
mushrooming, highly specula- 64 firms raising about $103 only has 15 million monthly hadn’t set a date until Tues- show that the newspaper acted Mr. Ball made headlines after
tive market for these digital million in 2016, according to active users, a key metric. day. maliciously when it made an error claiming Lonzo, who has yet to
tokens. research firm Smith & Crown. “We went on record two The new tokens, or coins, in an editorial about gun violence. play in an NBA game, is a better
In doing so, Kik, which has Most of these firms, years ago and said growth is a will have multiple purposes. The 2008 Republican vice- player than two-time MVP Steph
encountered growth issues, is though, are startups and in problem for us,” Chief Execu- They will allow Kik users to presidential nominee filed the Curry and that, in his prime, he
trying to tap into the surging many cases don’t have a work- tive Ted Livingston said in a purchase services within the suit after the Times ran an edi- himself could have taken on bas-
interest in cryptocurrencies ing product. In that, Kik is dif- recent interview. Kik has been app as well as enable pay- torial in June that suggested her ketball legend Michael Jordan in
and digital tokens associated ferent: Its messaging app is boxed out by larger rivals like ments between users. political-action committee helped a one-on-one contest.
with them. popular among teens in Can- Facebook Inc., he added, which The company said it hopes incite the 2011 assassination at- Trailers for the show indicate
that the tokens will entice tempt against former Demo- it will offer an inside look at the
more developers to build apps cratic Rep. Gabrielle Giffords. family, including LaVar’s efforts
for the platform. If they re- After publication, the Times to groom his three sons into
ceive the tokens as payment, corrected the article, noting that basketball legends, the building
and those coins then appreci- there was no evidence of a link of the Big Baller Brand business
ate in value, developers would between Ms. Palin’s activities and his wife’s rehabilitation after
gain even more from working and the shooting. a stroke.
on Kik. Representatives for Ms. Palin “We wanted to give our fans
At the same time, Kik is us- didn’t respond to a request for an unfiltered look into our lives
ing the initial sale of the to- comment. and show them a side of us that
kens to raise money for the —Imani Moise isn’t typically seen,” LaVar Ball
company and its investors. said in a statement.
Kik is creating 10 trillion FACEBOOK The video series is being pro-
NOAM GALAI/GETTY IMAGES FOR TECHCRUNCH
TECHNOLOGY WSJ.com/Tech
BOBBY YIP/REUTERS
Tencent Holdings Ltd. Tencent’s latest victory ment, among other functions. cept WeChat Pay comes as Ap-
Apple’s decision to accept comes as it challenges the more Chinese smartphone users ple struggles to gain traction
payments from the service established Alipay mobile-pay- spend so much time on WeChat with its own mobile-payment
came despite recent tensions ment system backed by local ri- that some analysts say they be- system, Apple Pay, which made
with Tencent, including over val Alibaba Group Holding Ltd. lieve it could hurt sales of Ap- its debut in China in May 2016.
the Chinese company’s rollout As WeChat Pay, which controls ple’s 10th-anniversary iPhone The system’s footprint in the A sign indicates acceptance of WeChat Pay, at a restaurant in
this year of a so-called minipro- 40% of the Chinese market, has expected in September, because country’s market is negligible, Guangzhou, China. Apple’s App Store now accepts the service.
gram system that has been gained wider acceptance, Ali- consumers here won’t see the iResearch says.
seen as a competitor to the App pay’s market share has fallen need to upgrade their handsets Also, Apple has sparred with function to comply with App from mobile-wallet accounts.
Store. from 80% in 2014 to about 50% as long as they can access the Tencent recently over pur- Store rules. The function al- Apple considered these pay-
“We are committed to offer- currently, according to data platform. chases in the App Store. Earlier lowed WeChat users to give ments to be in-app purchases,
ing customers across our eco- from iResearch Consulting Apple has said it views Ten- this year, Apple forced the Chi- small amounts of money to au- of which it takes a 30% cut.
system a variety of payment Group. Apple began accepting cent, one of the world’s biggest nese company’s WeChat mes- thors and other content cre- —Xiao Xiao
options that are simple and App Store payments from Ali- competitors in mobile games, saging app to disable its “tip” ators as gratuities via transfers contributed to this article.
Bespoke
at Royal Mansour. From staying in a traditional riad to a
private vintage sidecar tour, pool access and fine dining,
experience the beauty of Morocco.
Experience
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THE WALL STREET JOURNAL. Thursday, August 31, 2017 | B5
The Mart
On End-of-Day News BUSINESS OPPORTUNITY BUSINESS OPPORTUNITY
MARKETS DIGEST
Nikkei 225 Index STOXX 600 Index S&P 500 Index Data as of 4 p.m. New York time
Last Year ago
19506.54 s 143.99, or 0.74% Year-to-date s 2.05% 371.01 s 2.59, or 0.70% Year-to-date s 2.65% 2457.59 s 11.29, or 0.46% Trailing P/E ratio 23.53 24.71
High, low, open and close for each 52-wk high/low 20230.41 16251.54 High, low, open and close for each 52-wk high/low 396.45 328.80 High, low, open and close for each P/E estimate * 18.73 18.59
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 2.01 2.11
All-time high: 2480.91, 08/07/17
Weekly P/E data based on as-reported earnings from Birinyi Associates Inc.
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 2830.87 0.40 0.01 2386.93 • 2881.15 12.0 Country/ Spread Over Treasurys, in basis points Yield
MSCI EAFE 1915.56 –10.01 –0.52 1614.17 • 1955.39 11.6 Coupon Maturity, in years Yield Latest Previous Month Ago Year ago Previous Month ago Year ago
MSCI EM USD 1087.96 6.73 0.62 838.96 • 1088.07 37.0 2.750 Australia 2 1.885 55.5 53.1 46.3 65.9 1.848 1.818 1.457
2.750 10 2.688 54.6 50.5 40.0 27.8 2.635 2.693 1.846
Americas DJ Americas 591.73 2.41 0.41 503.44 • 599.20 9.5
3.000 Belgium 2 -189.8 -188.9 -187.2 -141.2 -0.572 -0.517 -0.615
-0.569
Brazil Sao Paulo Bovespa 70844.26 –485.60 –0.68 56459.11 • 71505.69 17.6
0.800 10 0.683 -145.9 -146.5 -147.4 -142.2 0.665 0.819 0.146
Canada S&P/TSX Comp 15138.15 55.45 0.37 14319.11 • 15943.09 –1.0
0.000 France 2 -0.515 -184.5 -182.9 -181.8 -137.6 -0.512 -0.463 -0.578
Mexico IPC All-Share 51195.44 –118.22 –0.23 43998.98 • 51772.37 12.2
1.000 10 0.674 -146.8 -146.8 -148.8 -141.9 0.661 0.805 0.149
Chile Santiago IPSA 3917.15 –5.05 –0.13 3120.87 • 3945.90 21.5
0.000 Germany 2 -0.756 -208.6 -206.6 -203.8 -141.0 -0.749 -0.683 -0.613
U.S. DJIA 21892.43 27.06 0.12 17883.56 • 22179.11 10.8
0.500 10 0.362 -177.9 -178.6 -174.9 -165.9 0.343 0.544 -0.091
Nasdaq Composite 6368.31 66.42 1.05 5034.41 • 6460.84 18.3
0.050 Italy 2 -0.026 -135.5 -134.0 -137.4 -88.1 -0.023 -0.019 -0.084
S&P 500 2457.59 11.29 0.46 2083.79 • 2490.87 9.8
2.200 10 2.082 -6.0 -6.4 -16.6 -46.0 2.066 2.127 1.108
CBOE Volatility 11.19 –0.51 –4.36 8.84 • 23.01 –20.3
0.100 Japan 2 -0.151 -148.1 -147.3 -146.8 -100.2 -0.155 -0.112 -0.204
EMEA Stoxx Europe 600 371.01 2.59 0.70 328.80 • 396.45 2.7 0.100 10 0.008 -213.3 -212.5 -221.5 -164.4 0.004 0.078 -0.076
Stoxx Europe 50 3016.84 15.89 0.53 2720.66 • 3279.71 0.2 4.000 Netherlands 2 -0.712 -204.2 -201.1 -203.1 -141.3 -0.694 -0.676 -0.616
Austria ATX 3201.43 32.61 1.03 2311.88 • 3285.00 22.3 0.750 10 0.497 -164.5 -165.2 -163.9 -154.9 0.478 0.654 0.019
Belgium Bel-20 3873.58 26.98 0.70 3384.68 • 4055.96 7.4 4.750 Portugal 2 -0.053 -138.2 -133.6 -131.2 -30.1 -0.019 0.043 0.496
France CAC 40 5056.34 24.42 0.49 4310.88 • 5442.10 4.0 4.125 10 2.841 70.0 71.0 58.5 143.9 2.839 2.878 3.007
Germany DAX 12002.47 56.59 0.47 10174.92 • 12951.54 4.5 2.750 Spain 2 -0.352 -168.1 -165.9 -168.9 -99.1 -0.342 -0.334 -0.194
Greece ATG 823.65 0.98 0.12 548.72 • 859.78 28.0 1.450 10 1.578 -56.4 -56.2 -76.3 -62.4 1.567 1.530 0.944
Hungary BUX 37903.88 264.26 0.70 27466.59 • 38147.22 18.4 4.250 Sweden 2 -0.673 -200.2 -200.9 -205.8 -143.8 -0.692 -0.702 -0.641
Israel Tel Aviv 1390.99 9.38 0.68 1346.71 • 1490.23 –5.4 1.000 10 0.590 -155.1 -155.7 -158.9 -147.3 0.573 0.703 0.095
Italy FTSE MIB 21503.46 94.84 0.44 15923.11 • 22065.42 11.8 1.750 U.K. 2 0.188 -114.2 -115.6 -110.0 -64.8 0.162 0.255 0.150
Netherlands AEX 513.01 2.98 0.58 436.28 • 537.84 6.2 4.250 10 1.032 -111.0 -113.0 -107.5 -102.9 1.000 1.218 0.539
Poland WIG 64957.87 569.44 0.88 46321.24 • 65191.96 25.5 1.250 U.S. 2 1.329 ... ... ... ... 1.317 1.355 0.797
Russia RTS Index 1084.41 16.83 1.58 944.88 • 1196.99 –5.9 2.250 10 2.141 ... ... ... ... 2.129 2.293 1.568
Spain IBEX 35 10245.80 53.20 0.52 8512.40 • 11184.40 9.6
Sweden SX All Share 550.46 4.63 0.85 489.12 • 598.42 3.0 Commodities Prices of futures contracts with the most open interest 3:30 p.m. New York time
Switzerland Swiss Market 8851.26 36.72 0.42 7585.56 • 9198.45 7.7 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 56168.00 –241.62 –0.43 48935.90 • 56896.89 10.9 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 8/29/2017
Turkey BIST 100 110423.11 … Closed 71792.96 •110530.75 41.3
One-Day Change Year Year
U.K. FTSE 100 7365.26 27.83 0.38 6654.48 • 7598.99 3.1 Commodity Exchange Last price Net Percentage high low
view’s progress. The depart- vestors, who own a significant Prime Minister Najib Razak in
ment will reopen the comment share of government bonds in 2009 to spur economic devel-
period starting Thursday for 15 Malaysia. Allegations of fraud opment but accumulated $13
days, soliciting feedback from involving 1MDB, which is un- billion in debt. It began strug-
consumers and the industry on der investigation in half a gling in 2015 to make pay-
the latest delay and how it dozen countries, have already ments on its debts and later
should structure it. spooked investors by weighing was found to be missing bil-
The Labor Department also on the country’s currency, the lions of dollars. Investigations
is working on a change that ringgit. are under way in the U.S.,
would make it easier for firms The payment announced on IPIC had extended an emergency loan and other financial help to Malaysia’s state-investment fund. Singapore and elsewhere. U.S.
to operate in exemption of the Wednesday is a balance pay- investigators allege that at
rule while encouraging the de- ment by 1MDB to compensate deadline and 1MDB made a Kuala Lumpur-based Kenanga ship of Malaysian government least $4.5 billion was stolen.
velopment of investor-friendly the Abu Dhabi sovereign payment of $350 million on Research said. debt securities fell for the sec- 1MDB has denied wrongdo-
products. The department said fund—a former business part- Aug. 11, with the understand- 1MDB is due to make an- ond consecutive month, by 2.3 ing and promised to cooperate
it “anticipates it will propose ner known as IPIC—for an ing that the balance would be other payment, of around billion ringgit ($539.1 million), with investigators. Mr. Najib
in the near future a new and emergency loan and other fi- paid by Aug. 31. $600 million, to IPIC by the compared with a net outflow denied wrongdoing and was
more streamlined class exemp- nancial support extended after 1MDB, which is wholly end of the year. of 300 million ringgit in cleared of any wrongdoing by
tion built in large part on re- 1MDB was unable to service its owned by the Malaysian fi- In July, total foreign owner- June, according to data from Malaysia’s attorney general.
cent innovations in the finan- debt obligations. nance ministry, said that all
cial services industry” and The precise amount of the funds were “paid from pro-
that any such changes couldn’t
be realistically implemented
payment wasn’t disclosed ei-
ther by 1MDB or IPIC, which
ceeds of the ongoing rational-
ization program,” referring to
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by the end of the year. stated earlier in a filing to the an effort to reduce debt by
“This is a carrot,” said London Stock Exchange that it selling assets. [ Search by company, category or country at europe.WSJ.com/funds ]
George Gerstein of a new po- had been made. The market has been
tential exemption, an attorney IPIC said the payment ful- watching closely to see if NAV —%RETURN—
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at Stradley Ronon who repre- filled the obligations that were 1MDB would be able to meet
n Chartered Asset Management Pte Ltd - Tel No: 65-6835-8866
sents financial-services firms. initially due July 31. 1MDB its payment deadline. Fax No: 65-6835 8865, Website: www.cam.com.sg, Email: [email protected]
Mr. Gerstein said Labor is missed an original deadline of A default would likely erode CAM-GTF Limited OT OT MUS 08/25 USD 308853.70 2.2 -2.3 6.7
signaling that it will propose a July 31 and an initial five-day investor confidence toward
new, more flexible exemption extension granted by IPIC to Malaysian government securi- Data as shown is for information purposes only. No offer is being made by
Morningstar, Ltd. or this publication. Funds shown aren’t registered with the
For information about listing your funds,
track for products that pose pay $628.75 million. The Abu ties and raise the risk of capi- U.S. Securities and Exchange Commission and aren’t available for sale to United
States citizens and/or residents except as noted. Prices are in local currencies.
please contact: Freda Fung tel: +852 2831
few conflicts of interest. Dhabi fund again extended the tal outflows from the country, All performance figures are calculated using the most recent prices available. 2504; email: [email protected]
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B8 | Thursday, August 31, 2017 THE WALL STREET JOURNAL.
MARKETS
Emerging Markets Pick Up LNG Slack
Gas demand is rising $400 million annually selling
imports to the domestic mar-
in developing Asian ket, but that isn’t enough to
nations as it weakens cover the annual $1.8 billion in
estimated costs to import the
in richer neighbors LNG.
Petrobangla is seeking $1.4
BY DEMI GUO billion in financing from the
government to offset the im-
Emerging-market nations in port costs.
Asia are turning to imports of Even so, the first pipeline to
liquefied natural gas to offset transport gas from the termi-
dwindling domestic supplies, nal was completed this month
bolstering LNG trade in the re- and Petrobangla expects the
gion as demand from bigger project to be finished in 2018.
markets eases. The World Bank’s IFC also
Nearly 90% of global LNG helped finance Pakistan’s first
demand growth will come floating LNG terminal in Port
from emerging and frontier Qasim, which became opera-
economies by 2022, the Inter- tional in early 2015, to facili-
national Energy Agency esti- tate imports from Qatar.
mates. Natural-gas prices fell Pakistan’s gas demand in
to their lowest in a decade in 2015 was 6 billion cubic feet a
2016, according to the IEA, day, while its domestic sup-
making it a more affordable plies covered 4 billion cubic
source of energy for develop- feet a day, according to num-
ing countries. LNG is a form of bers provided by Engro Elengy
Email: [email protected]
HEARD ON THE STREET FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard