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Your Guide to
Summer Soires
OFF DUTY
ASIA EDITION
VOL. XXXIX NO. 209
(India facsimile Vol. 7 No. 13)
FRIDAY - SUNDAY, JUNE 26 - 28, 2015
WSJ.com
Samsung Deal
Stews as Fund
Applies Heat
BY JONATHAN CHENG
AND MIN-JEONG LEE
ASSOCIATED PRESS
Opposition leader Aung San Suu Kyi, center, walked to cast her vote for constitution amendments at Myanmars Parliament on Thursday.
MyanmarKeepsStatusQuo
Constitutional amendments rejected, thwarting Suu Kyis presidential goals

BY SHIBANI MAHTANI
AND MYO MYO
YANGON, MyanmarLawmakers voted against key
amendments to the nations
military-drafted constitution,
retaining the militarys dominance in politics and blocking
Inside
opposition leader Aung San

Suu Kyis presidential bid as
historic elections near.
Speaking at a news conference after Thursdays vote,
Ms. Suu Kyi said the result
wasnt surprising and had already been a calculation of
her National League for De-
COZY UP WITH EMMA STONE
How to Eat Australian

Christopher Bailey:
Burberrys Mastermind
A Lavish Hotel Opens in
Historic French Chteau
WSJ.com/magazine
But the opposition leader,

now 70 years old, has hinted
in interviews that she might
have other strategies to still
allow her to assume the top
post.
Few
were
expecting
changes to the constitution
Please turn to page 18
Officials Masked Scope

Of U.S. Computer Breach
BY DEVLIN BARRETT
AND DAMIAN PALETTA
Outward
Bound
mocracy party. The vote, she

said, shows there are people
in government who dont
want change at all.
It would appear the vote
ended the slim possibility of
Ms. Suu Kyi becoming president after elections scheduled
for some time in November.
WASHINGTONThe Obama
administration for more than a
week avoided disclosing the
severity of an intrusion into
federal computers by defining
it as two breaches but divulging just one, said people familiar with the matter.
That approach has frustrated lawmakers as they
probe the administrations
handling of one of the biggest-ever thefts of government records.
Agents with the Federal Bureau of Investigation suspect
China was behind the hack of
Office of Personnel Management databases discovered in
April and that those hackers
accessed not only personnel

files but security-clearance
forms, current and former U.S.
officials said. Such forms contain information that foreign
intelligence agencies could use
to target espionage operations.
Chinese officials have said
they werent involved.
U.S. Director of National Intelligence James Clapper on
Thursday said China was the
leading suspect in the attacks, while also adding: You
have to kind of salute the Chinese for what they did, given
the difficulty of the intrusion.
The administration on
June 4 disclosed the breach
of personnel filesbut not
the security-clearance theft.
That theft was disclosed eight
days later, even though inves-
tigators knew about it much

earlier, people familiar with
the situation said.
OPM Director Katherine
Archuleta on Wednesday said
her agency was investigating
whether as many as 18 million
unique Social Security numbers were stolen as part of
the attack on security-clearance records, though she cautioned that the number was
unverified and preliminary.
Her statement came during testimony before the
House Oversight and Government Reform Committee.
Many lawmakers have accused the OPM of not providing enough information about
what was stolen.
Rep. Jason Chaffetz (R.,
SEOULA team from U.S.

hedge fund Elliott Advisors
LP asked executives from
Samsung C&T Corp. in April
about rumors the South Korean construction and trading
firm was weighing a merger
with Cheil Industries Inc., the
Samsung conglomerates de
facto holding company.
Samsung C&T denied at
the time that it was considering such a deal, Elliotts lawyers said at a recent court
hearing. Yet weeks later, Samsung C&T and Cheil Industries
announced merger plans.
Now, Elliott, which holds a
7.1% stake in Samsung C&T, is
trying to block the deal, seeking a court injunction and rallying investors to reject the
deal at a shareholder vote
next month.
A person familiar with an
April 9 meeting in Seoul between the two sides said
Thursday that Elliott told
Samsung C&Ts chief financial
officer that a merger with
Cheil Industries would hurt
the interests of shareholders,
including Elliott. However, a

lawyer for Samsung C&T said
executives couldnt have disclosed such highly classified
information about a potential
merger to Elliott. Samsung
C&T later added that Cheil Industries first proposed the
merger in late April.
The shareholder battle pits
South Koreas most powerful
corporate dynasty against one
of the U.S.s most aggressive
hedge funds. It also comes at
a critical juncture in the conglomerates once-in-a-generation power transfer.
The deal is widely seen as
part of moves by Samsung
conglomerate patriarch Lee
Kun-hee to transfer control of
the business group to his son,
Lee Jae-yong.
While
Samsung
has
squared off against dissenters
in the past, it has yet to be
challenged so aggressively by
a sophisticated activist investor.
Critics argue that minority
shareholders rights remain
secondary to those of the families that control South Koreas conglomerates. But there
2 | Friday - Sunday, June 26 - 28, 2015
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THE WALL STREET JOURNAL.
IN
PAGE TWO
Whats News
Inside
U.S. News: Next step

after trade vote: reach
a deal. 6
REUTERS
Supporters of the U.S. Affordable Care Act celebrate after the Supreme Court ruled that the Obama administration can continue to subsidize health-insurance purchases
by lower-income Americans across the country, placing President Obamas signature domestic policy achievement on a firmer footing for the remainder of his term.
Business & Finance

n Takatas CEO made a public appearance and disclosed that the
Japanese maker of air bags linked
to at least eight deaths is studying the possibility of a fund to
compensate victims. 21
n Didi Kuaidi has set a fundraising target of around $2 billion,
seeking more funds than the Chinese ride-hailing company earlier
planned to compete with Uber for
Chinese riders. 21
n Hon Hai is considering Chinese
listings for its mainland-based units
over the next three to five years,
the chairman of the primary assembler of Apple products said. 21
n Molycorp filed for protection

from creditors as the long-struggling U.S. rare-earths mining firm
turned a page on one of the most
dramatic commodities busts in recent years. 19
n McDonalds aims to franchise
its stores in Taiwan and expand its
franchise business in China as part
of efforts to cut costs globally. 22
n An affiliate of Alibaba began operating an online bank, though the
limited services available indicate
the challenges it faces in Chinas
tightly regulated banking sector. 25
n 21st Century Fox said Roger
Ailes has signed a new multiyear
contract to continue as chairman
and chief executive of Fox News. 22
n Boeing will slow production of

its 747 jet to one a month in 2016,
though the plane maker said it remains committed to the jet. 23
n IAC plans to pursue an initial
public offering of its Match Group
division, which includes dating
sites Match.com and Tinder. 23
n Hong Kongs securities regulator said it objected to a plan put
forward by the citys stock exchange to allow dual-class shares
and other weighted-voting structures in certain circumstances. 27
n J.P. Morgan is in talks with the
U.S. SEC to settle a probe into
whether the bank inappropriately
steered private-banking clients to
its own investment products. 24
World-Wide
n Eurozone finance ministers
concluded a meeting to give Athens and the institutions overseeing its bailout more time to agree
on conditions for desperately
needed aid, officials said.
n Japans military would consider joining U.S. forces in regular
patrols in the South China Sea,
underscoring how Chinas territorial claims are encouraging Tokyo
to play a greater role in regional
security. 4
n Islamic State militants staged
multiple attacks on the Syrian
Kurdish strongholds of Kobani and
Hasakah. 10
ONLINE TODAY
Digits
wsj.com/digits
China Real Time
wsj.com/chinarealtime
Photos of the Day
Facebook hires
Alex Stamos,
Yahoos top
cybersecurity
executive.
Expat
wsj.com/expat
Think you know

expat life? A
survey of about
14,000 expats
around the world
reveals a few
surprises.
Is politics behind
the fall in
applications to
Hong Kong
universities by
mainland Chinese
students this year?
Images behind the stories

making news world-wide
wsj.com/photosoftheday
World News: U.S.

economy stays stuck
in first gear. 10
Business & Finance:

Australian housing
loans get riskier. 19
THE WALL STREET JOURNAL
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Friday - Sunday, June 26 - 28, 2015 | 3
**
WORLD NEWS: ASIA
Crisis Group.
Clashes between armed supporters of both men in recent years
rarely led to a high body count. But,
Mr. Smith added: People pay attention to these minor tremors, because those are the kinds of fissures
that could bring down the government.
The government of Afghan President Ashraf Ghani is a fragile coalition that includes Mr. Dostum, who
brought in substantial votes from
ethnic Uzbeks in the north. Gov.
Atta, who was appointed by Mr.
Ghanis predecessor, former President Hamid Karzai, has been one of
the most vocal opponents of Mr.
Ghani.
Mr. Dostum and Gov. Atta said
they would lay aside their differences in response to an emergency
in the north. Fighting in Kunduz
province along the border with Tajikistan has been particularly heavy,
with Taliban militants encroaching
on the provincial capital and more
recently taking control of districts.
Adding to the governments worries, militants claiming allegiance to
Islamic State have also been making
inroads in Afghanistan. Taliban
commanders in parts of Afghanistan
BY NATHAN HODGE
KABULTwo of Afghanistans
most prominent power brokers have
forged an unexpected alliance to
fight the Taliban and other militant
groups that have been gaining
ground in the countrys embattled
north.
Abdul Rashid Dostum, Afghanistans first vice president, and Gov.
Atta Mohammad Noor, the head of
northern Balkh province, said this
week that their supporters would
join forces to retake territory from
the Taliban, who have been besieging district capitals in northern Afghanistan, putting the central government on the defensive.
The alliance comes as a surprise
to many observers: Both men have
waged an on-again, off-again struggle for control of northern Afghanistan, with the rivalry sometimes
erupting into open fighting between
the ethnic Uzbek factions of Mr.
Dostums Junbish-e Milli party and
ethnic Tajiks belonging to Gov.
Attas Jamiat-e Islami party.
If theres peace between those
men, its hugely significant, said
Graeme Smith, a senior analyst for
the Brussels-based International
ZUMA PRESS
Afghan Rivals
Join Forces to
Fight Militants
Afghan soldiers during an operation Wednesday against the Taliban in Kunduz province, where militants have made gains.
have switched loyalty to Islamic
State, often referred to by the acronym Daesh, presenting a potentially
powerful new threat to the state.
In remarks to local media, Mr.
Dostum said he would join forces
with Gov. Atta, to fight both Taliban
and Islamic State. Anybody who is
casting a stone toward the enemies
of AfghanistanDaesh and Talibanwe lend a hand to, he said.
An aide to Gov. Atta said the alliance was forged to bolster support
to Afghanistans army and police.
Both Mr. Dostum and Gov. Atta officially maintain they don't have private armies, but the Afghan govern-
U.S. Presses for Access to China

BY IAN TALLEY
have found discrimination against

foreign investment and few new
openings to industries since the
overhauls were announced.
U.S. and Chinese officials agreed
Wednesday to broaden their list of
sectors to be included under the bilateral investment treaty by September. But Mr. Lew cautioned against
any hopes for a quick deal.
China, meanwhile, is countering
with its own claim of restricted access to U.S. markets. In general, the
investment climate is good, said
Zhang Xiangchen, Chinas deputy
trade representative, through an interpreter. But there do exist some
barriers, particularly in areas where
Chinese companies have some advantages, including infrastructure.
China Mobile, he said, has been applying for a telecommunications license for quite a long time and
Chinese state-owned enterprises
also face restrictions.
AGENCE FRANCE-PRESSE/GETTY IMAGES
Top U.S. officials this week

pressed China for greater market access to its economy, reflecting growing concerns that Beijings promised
economic overhauls will prove to be
more rhetoric than reality.
Cabinet-level talks in Washington
between U.S. officials and their Chinese counterparts yielded little
progress on several economic issues,
including a bilateral investment
treaty, or BIT, that two years ago
fueled hopes of major new business
opportunities for both countries.
In late 2013, Chinese President Xi
Jinping outlined a set of new economic policies that would give market forces a decisive role in the
worlds second-largest economy.
Those policy blueprints, the revived
investment treaty talks and other
signals spurred optimism in the U.S.
that American companies would
gain unprecedented access to the
countrys 1.4 billion consumers as
they moved into the middle class, a
market largely closed to outside investment despite Chinas accession
to the World Trade Organization in
2001.
Those pronouncements led one
to believe that good things were going to happen, said William Reinsch, president of the National Foreign Trade Council, a trade group.
But it appears now that were going
backward; things are getting worse,
not better, he said.
Chinas economy is cooling faster
than expected and is struggling to
grow without major policy overhauls. The countrys previous double-digit growth relied heavily on
exports. Now, weakness overseas,
overinvestment in real estate and
manufacturing and questionable
borrowing strategies are forcing the

government to revise growth targets
to their slowest levels in decades.
U.S. officials are concerned Beijing may continue to rely on borrowing, exports and an exchange-rate
policy that, while priming shortterm growth, comes at the expense
of other countries and could lower
long-term growth prospects.
U.S. Treasury Secretary Jacob
Lew said he is concerned about how
Beijing plans to balance the goals
of maintaining short-term growth
while pressing forward with these
crucial reforms, keeping in mind
that full implementation of reforms
is ultimately necessary to maintain
growth over the longer term.
U.S. businesses complain new
rules, including security and antimonopoly laws, suggest more of a
closing than an opening of Chinas
markets. Instead of finding greater
access, U.S. industries say they
President Barack Obama and Secretary of State John Kerry meet with Chinese
Vice Premiers Liu Yandong and Wang Yang at the White House on Wednesday.
ment has recently allowed militias

loyal to both men to operate openly
to help combat the Taliban in northern Afghanistan, raising fears about
a return to the kind of warlordism
seen during the countrys civil war.
The main aim of this alliance is
providing security and support of
Afghan security forces, an aide to
Gov. Atta said.
Representatives of Mr. Ghanis
administration in Kabul couldnt be
reached to comment.
Mr. Dostum has a long history of
rivalry with Gov. Atta, an ethnic Tajik who controls Mazar-e Sharif, the
economic and trade capital of the
north. Mr. Dostums power base is

in the heavily Uzbek northern provinces such as Samangan, Jowzjan,
and Faryab, one province where the
Taliban and other militant groups
have been particularly active.
The security situation in Faryab
is not good, said Rahmatullah
Turkistani, a provincial council
member from Faryab who is a supporter of Mr. Dostum. One party
couldnt singlehandedly counter all
these threats, so we had to form a
coalition with Jamiat-e Islami.
Ehsanullah Amiri
and Habib Khan Totakhil
contributed to this article.
Pakistan Heat Wave Eases,

But Death Toll Increases
BY QASIM NAUMAN
ISLAMABADTemperatures
eased in southern Pakistan, but hundreds of people are still being
treated for symptoms related to a
devastating heat wave that has
claimed the lives of more than 1,000
people in the region, local government officials and relief workers
said.
The heat wave coincided with
the beginning of the Islamic holy
month of Ramadan, during which
Muslims fast from dawn to dusk and
avoid all food and drink. Religious
clerics issued statements this week
asking people to avoid fasting if it
puts their lives at risk. Health officials said, however, that they didnt
have a figure for how many of the
heat waves victims were fasting.
Pakistan Meteorological Department officials said the heat wave
ended Wednesday night.
Temperatures in Karachi, Pakistans largest city and economic
hub, spiked late last week, reaching
a high of 113 degrees Fahrenheit (45
degrees Celsius) on Sunday. Health
officials in southern Sindh province
said most of the deaths were reported from Karachi, the sprawling
port city that is the countrys economic hub.
Officials reported dozens of
other deaths from around Sindh
province. Many of the dead were elderly citizens and laborers, the officials said, without providing a precise figure. Hospital officials said a
majority of those affected by the
heat wave had suffered from heat
stroke.
The citys hospitals have handled
more than 10,000 patients with
heat-related symptoms since Sunday. The Jinnah Postgraduate Medical Centre, one of Karachis main
hospitals, treated more than 8,000,
said Seemin Jamali, a hospital
spokeswoman.
Footage aired on local television
channels showed hospital corridors
crowded with patients, many being
carried by loved ones. Many were
seen lying on gurneys, with attendants pouring water on their heads.
The rising temperatures also led
to a spike in electricity demand,
crippling the power infrastructure
and leading to prolonged blackouts
in many parts of the city. The outages sparked small protests by angry citizens in some parts of the
city. Karachis privately owned
power utility, K-Electric, said its
systems were overloaded because of
the spike in demand, as well as the
increased load from illegal power
connections.
The Pakistani military and the
countrys National Disaster Management Authority set up emergency
medical centers across Karachi, providing treatment, rehydration tablets and water to people with heatrelated symptoms.
Our mortuary has been overwhelmed, said Anwer Kazmi, a
spokesman for the Edhi Foundation,
a charity that runs Karachis main
morgue. We have had to bury dozens of unclaimed, unidentified bodies of people who died because of
the heat.
The provincial government as
well as the government of Pakistani
Prime Minister Nawaz Sharif have
faced strong criticism from opponents and in the media over the response to the crisis.
WORLD NEWS: ASIA
Plans
Japan Forces Open to Sea Patrols Seoul
Stimulus as
BY YUKA HAYASHI
AND CHIEKO TSUNEOKA
MERS Hits
Economy
BY KWANWOO JUN
CHIEKO TSUNEOKA/THE WALL STREET JOURNAL
TOKYOJapans military would

consider joining U.S. forces in regular patrols in the South China Sea,
according to the nations top uniformed officer, underscoring how
Chinas territorial claims are encouraging Tokyo to play a greater role in
regional security.
Adm. Katsutoshi Kawano, chief of
the Joint Staff of the Japan Self-Defense Forces, said in an interview
that Chinas recent moves to build
artificial islands have created very
serious potential concerns for Japan, a trading nation that relies on
the sea lane that runs through the
area.
Of course, the area is of the utmost importance for Japanese security, Adm. Kawano said. We dont
have any plans to conduct surveillance in the South China Sea currently but depending on the situation, I think there is a chance we
could consider doing so.
Adm. Kawano didnt specify what
actions by China might trigger Japanese consideration of patrols, and
any activity by Japans military beyond its borders would likely raise
concerns at home.
However, Japans participation
would be a welcome move for the
U.S., which has sought to rely more
on allies to provide peacekeeping in
the region. I view the South China
Sea as international water, not territorial water of any country, and so
Japan is welcome to conduct operations on the high seas as Japan sees
fit, said Adm. Harry Harris, head of
the U.S. Pacific Command, at a briefing in Tokyo earlier this month.
Troops from Japans navy have
been conducting joint drills this
week with the Philippine navy
around Palawan Island, just a few
hundred kilometers from the Spratly
Islands, which are at the heart of a
territorial dispute between Beijing
Adm. Katsutoshi Kawano said Chinas moves to build artificial islands have created serious potential concerns for Japan.
and Manila. The session features Japans P-3C surveillance aircraft,
which Adm. Kawano described as
having a superb ability for detecting submarines and other objects in
the water.
The U.S. has pledged to send aircraft and naval ships to contest
Chinas claims, and Australia already
runs military patrols.
Adm. Kawano took the helm of
the military late last year as Prime
Minister Shinzo Abe was seeking to
ease decades-old self-imposed restrictions on the nations Self-Defense Forces. Mr. Abe has cited
Chinas military buildup and North
Koreas nuclear-weapons development for the shift.
In the case of China, as we can
see with the South China Sea prob-
lem, they are rapidly expanding

their naval presence and their defense spending is still growing,
Adm. Kawano said. Also because
there is a lack of transparency, we
are very concerned about Chinas actions.
Asked about Adm. Kawanos
comments, a Chinese Defense Ministry spokesman said Chinas construction activities in the Spratly Islands are entirely a matter within
our sovereignty, which is beyond reproach. The spokesman said countries outside the region shouldnt
try to raise tensions with military
intervention which will only cause
an adverse impact.
In April, Japan and the U.S. revised the guidelines for their defense cooperation for the first time
in 18 years, allowing Japan to contribute more to peacekeeping in

Asia. Mr. Abe now must pass a set of
bills to change domestic laws governing his pacifist nations military,
a challenge given the caution expressed by lawmakers even within
his own coalition.
Adm. Kawano said he hoped to
see more military cooperation with
South Korea, an area that has suffered because of disagreements between Tokyo and Seoul over wartime history. A sign of a thaw came
this week when leaders of both nations attended events marking the
50th anniversary of normalizing diplomatic relations. Once the relations are normalized on political levels, I believe movements will emerge
on our levels, Adm. Kawano said.
Donors Pledge Billions in Aid to Nepal

KATHMANDU, NepalDevelopment agencies and foreign governments pledged billions of dollars to
help rebuild this earthquake-ravaged
nation, as Nepalese officials assured
donors that their money wouldnt be
lost to corruption and bureaucratic
waste.
Nepals two giant neighbors, India and China, which are competing
for strategic influence in the Himalayan nation, led the way in promised
contributions toward the $6.7 billion
the country says it needs for reconstruction after severe quakes in
April and May that killed nearly
9,000 people.
At a donor conference in Kathmandu on Thursday, New Delhi announced an additional $1 billion in
aid, a quarter of it as grants, bringing the countrys total pledges for
Nepal over the next five years to $2
billion. China said its grant assistance would total about $760 million
before 2018.
Japan is offering $260 million,
much of it for building quake-resistant schools, while the U.S. said it
would increase its total emergency
relief and recovery assistance to
$130 million. The European Union is
preparing around $112 million in
grants.
In addition, the Asian Development Bank said its help for Nepal
AGENCE FRANCE-PRESSE
BY RAYMOND ZHONG
Foreigners visit reconstruction at Durbar Square, Kathmandu on Wednesday.

would total $600 million. The World
Bank is offering up to $500 million
in low-interest loans.
We are committed to ensure
that transparency remains at the
core of the reconstruction effort,
Prime Minister Sushil Koirala told
the conference. We will leave no
stone unturned in ensuring that
your support reaches the intended
beneficiaries.
Nepals government, hamstrung
by political divisions, limited capacity and red tape, has struggled to
spend quickly on infrastructure development even in normal times. Do-
nors on Thursday expressed concern

about Nepals capacity to carry out a
rebuilding of the requisite scale and
speed.
In the past fiscal year, Kathmandu managed to spend only
three-quarters of the $850 million it
budgeted on roads, dams and other
infrastructure.
As challenging as the funding
will be the spending, said Sushma
Swaraj, Indias foreign minister.
Nepal ranked 126th out of 175
countries on Transparency Internationals 2014 corruption-perceptions
index, putting it behind Ethiopia and
Belarus.
This springs quakes and aftershocks wrecked 500,000 homes,
damaged roads, bridges and buildings across Nepal and set back the
tourism, agriculture and trade on
which the economy depends.
Output growth is expected at 3%
for the year that ends in mid-July,
down from the prequake forecast of
4.6%. As many as a million additional Nepalese will be plunged below the national poverty line by
mid-2016, the government predicts.
Nepal said it would create a special agency, led by the prime minister, to direct reconstruction. Officials said the new body will be
authorized to sidestep many of the
usual hurdles in procuring equipment, acquiring land and obtaining
environmental approvals.
But government ministries and
their local arms will still be carrying
out the actual rebuilding. Experts
worry that the new central agency
will simply become an extra layer of
bureaucracy that can be blamed
when projects founder.
Jamie McGoldrick, the United
Nations humanitarian coordinator
in Nepal, said the central government has heeded such concerns in
designing the new reconstruction
body. He said the circumstances will
impel efficiency and good performance. This is something that has
to work, he said.
SEOULSouth Korea slashed its

growth forecast for the year and announced a fiscal stimulus package to
support an anemic economy hit by a
viral-disease outbreak.
The stimulus, aimed at offsetting
the economic impact of Middle East
respiratory syndrome, comes two
weeks after the Bank of Korea lowered its base rate to a record-low
1.5%, citing the viruss impact.
The stimulus package of more
than 15 trillion won ($13.5 billion)
includes an unspecified amount of a
supplementary budget that has yet
to be fixed, the finance ministry
said on Thursday. Ministry officials
had said earlier the government
spending should focus on supporting MERS-hit businesses and financing local exporters, as well as creating more jobs, the finance ministry
said. The country last put forth a
supplementary budget in 2013.
The ministry said in a semiannual economic outlook it now expects South Koreas economy to
grow 3.1% year-over-year in 2015,
down from the 3.8% projected in December. It forecast 3.5% growth in
2016. The economy grew 3.3% in
2014.
Lee Chan-woo, director general
of the ministrys economic policy
bureau, said in a recent press briefing that South Korean growth would
slow to below 3% without support
from the extra budget spending.
The MERS virus, which has infected 180 people and killed 29 in
Korea as of Thursday, has dented
consumer spending in retail sales,
leisure and tourism industries as
people worried about infection have
stayed home.
More than 120,000 foreign tourists have canceled trips to South Korea since the first outbreak in the
country on May 20, the finance ministry report said.
Sales at department stores fell
17% and 9% each for the first and
second week of June from a year
earlier, and the number of people
attending amusement parks plunged
60% and 45%, respectively, during
the same weekly periods, according
to the ministry report.
Bank of Korea Gov. Lee Ju-yeol
said Wednesday there were signs
the declines in consumer spending
moderated toward the third week of
June, but he and the government
still expect the impact of the outbreak on the service sector to last
for a significant period.
The central bank said Thursday
its consumer-sentiment index fell to
99 in Junethe lowest since late
2012from 105 the previous month,
indicating the MERS outbreak has
sapped consumers confidence. A
reading below 100 indicates consumers who expect living conditions
to worsen outnumber those who expect them to improve.
With recovery momentum yet
to be firm enough due to sluggish
exports, the MERS outbreak can
lead the economy to undershoot its
expected growth path, the finance
ministry said in its economic outlook report.
South Korean exports fell 10.9%
from a year earlier in May, shrinking
for the fifth consecutive month on
Chinas economic slowdown and the
eurozones frail recovery.
WORLD NEWS: U.S.
Next Step After Trade Vote: Reach a Deal

The White House and Republican
leaders notched a significant victory
Wednesday with the Senates passage of divisive trade legislation,
but the win kicks off a grueling,
months-long process to complete a
Pacific trade pact that still faces domestic opposition and must win final congressional approval.
President Barack Obama is expected to sign the fast-track legislation within days, clearing a negotiating roadblock that prevented
officials from moving ahead on the
12-nation Trans-Pacific Partnership.
But even with the enhanced powers and the Senates subsequent action on Wednesday to advance a related bill on assistance to workers
deemed to have been hurt by international trade, challenges remain.
To say that this is an easy
march to victory is a big mistake,
said Gary Hufbauer, senior trade expert at the Peterson Institute for International Economics, which backs
trade liberalization. Granting the
president fast-track negotiating
powers, he said, is merely the prelude to Act Two of the drama.
The Senates 60-38 passage of
fast track, which gives the president
the power to submit trade deals to
Congress for an up-or-down vote
without amendments, capped a fight
that split the Democratic Party and
almost ended in defeat several times.
Supporters already worry that
the final vote on the Pacific deal
could spill into next years contentious U.S. election season, when
populist attacks from the left and
the right are likely to make freetrade policy much harder to enact.
Now attention shifts to the TPP
itself, a sweeping proposed pact
among the U.S., Japan, Malaysia,
Vietnam, Australia, Canada and six
other Pacific Rim countries.
The pact is aimed at lowering or
eliminating a host of tariffs and
other barriers on cars, dairy, meat,
wheat and thousands of other prod-
AGENCE FRANCE-PRESSE/GETTY IMAGES
BY WILLIAM MAULDIN
President Barack Obama won fast-track trade authorization, but hurdles remain for a proposed 12-nation Pacific deal.
ucts. Perhaps more important are
commercial rules of the road on everything from labor and environmental standards to intellectualproperty
protections
for
pharmaceuticals and movies.
A handful of sensitive issues remain before U.S. Trade Representative Michael Froman and other
trade ministers can sign the agreement, which could happen as soon
as next month.
Still unresolved are the degree to
which Japan will open its agricultural markets, the length of protection for pharmaceutical companies
new biologic drugs, and Canadas
protections of its dairy and other
markets, according to people following the talks. Other countries in the
deal are Brunei, Chile, Mexico, New
Zealand, Peru and Singapore.

If the TPP is completed in July, it
could take six months or more for
the agreement to get a final vote in
Congress, thanks to delays built into
the legislation and necessary legal
and bureaucratic steps. The earliest
possible time for a congressional
vote will be in the fall.
When the text of the agreement
is first published in full after the
ministers signing, it is all but certain
to trigger specific criticisms from environmental and labor groups, consumer watchdogs and even religious
leaders worried about the deals effect on the affordability of medicine.
When the inexcusable and antidemocratic veil of secrecy surrounding the TPP is finally lifted and the
American people see what is actu-
ally in the agreement, they are going to force their representatives in

Washington to vote that deal down,
said Robert Weissman, president of
Public Citizen, a government-watchdog group opposing both fast track
and the Pacific deal.
There will be another whole
battle over TPP, said Susan Schwab,
former U.S. trade representative in
the George W. Bush administration.
In a complicated trade agreement,
[critics] are always going to be able
to point to things they say are bad.
While most large U.S. companies
back the TPP, some domestically focused American manufacturers are
pressing lawmakers to defeat the
deal over concerns it would unleash
cheap imports from competitors.
Drug makers are among the top
companies lobbying for the TPP,

eyeing strong patent protections for
drugs and a bigger role in setting
government health policy.
Left-leaning groups and some
health professionals have criticized
such rules on humanitarian grounds,
warning of higher medicine prices.
One wild card is the auto industry, which some economists say
could be hurt by an relative increase
in imports, depending on the size
and timing of expected U.S. tariff
cuts to cars, trucks and parts imported from Japan.
Some of the pacts most vocal
critics are lawmakers from auto
states such as Michigan and Ohio.
For their part, the Big Three U.S.
auto makers have taken a more nuanced approach, demanding strong
rules to prevent Japan and other
countries from cheapening their currencies to gain a competitive advantage in the future, as well as policies
to help them sell more cars in Japan.
We would like to be in a position to support the TPP, but in order
to do that the TPP has to address
currency manipulation and a lot of
other nontariff barriers in a meaningful way, said Matt Blunt, head of
the American Automotive Policy
Council, which represents the big
Detroit auto makers.
Ford Motor Co. pushed for
stronger language committing the
Obama administration to include
binding rules to punish alleged currency manipulation, something U.S.
and foreign officials opposed.
While liberals and many conservatives say corporations are too involved in trade policy, business and
farm groups will be a key asset to
Mr. Obama and Republicans when
they seek to pass the TPP.
Agricultural groups are eager to
get better access to Japanese and
other markets. Hollywood studios
want firm rules to protect copyrights, and technology companies
are looking for guarantees of an
open Internet and the free flow of
data.
Continued from first page

Utah), who heads the oversight panel,
reiterated on Wednesday his call for
Ms. Archuleta to resign, something
she said she had no plans to do. An
OPM spokeswoman said the agency
had been completely consistent in
its accounting of the data breach.
As the investigation into the
personnel-records intrusion continued, it was discovered that OPM systems containing information related
to the background investigations of
current, former and prospective federal-government employees, and
those for whom a federal background investigation was conducted,
may also have been compromised,
the spokeswoman said. We notified
Congress of this intrusion as well.
As an investigation points to
burgeoning effects of the OPM hack,
with millions of personnel records,
background checks and Social Security numbers possibly stolen, questions over the administrations handling of the intrusion are growing.
Melanie Dougherty Thomas, who
advises companies dealing with
computer breaches, said deciding
how much to say about a breach
and whenis critical. The general
public understands there are
breaches all the time. If you wait too
long, you give the perception youre
trying to hide the facts, and that to
ASSOCIATED PRESS
Officials Masked Severity of Computer-System Breach
OPM Director Katherine Archuleta, left, testified before lawmakers Wednesday.

people is unforgivable, she said.
Before the OPM formally announced June 4 that it had been
hacked, officials at the agency denied to The Wall Street Journal that
security-clearance forms were
taken, as people familiar with the
attack had described. A day after
the public announcement, an OPM
spokesman said there was no evidence to suggest that information
other than what is normally found
in a personnel file has been exposed. By that time, the FBI al-
ready knewand told the OPM

that security-clearance forms had
been tapped, officials said.
On June 5, the same day as the
OPM denial, Janet Napolitano, president of the University of California
system, sent a letter to university officials saying anyone with a security
clearanceincluding people who have
never worked for the government
could be affected by the hack. Ms. Napolitano, a former head of the Department of Homeland Security, didnt
respond to requests for comment.
Officials familiar with the behind-the-scene discussions said officials at the White House and OPM
agreed to handle the problem as at
least two separate breachesone of
the personnel files and one of the
security-clearance forms.
That had major implications for
the initial description of damage.
Rather than saying the hack potentially involved the private details of
an estimated 18 million peopleand
possibly millions more if relatives
and close friends listed on the security-clearance forms are counted
the agency said about four million
people were potentially affected.
The FBI, which is investigating
the OPM hack, didnt define it the
same way. When responding to computer attacks on companies or government agencies, the FBI leaves it
to the victimized agency to tell the
public and its employees what was
taken. But in the case of the OPM,
FBI officials, including the director,
James Comey, also had to speak to
lawmakers about the incident, and
Mr. Comey didnt discuss the incident as two breaches, said people
familiar with the matter.
Some administration officials defended the White House and OPM
description of the breach, saying officials were following an internal
decision-making process, which cul-
minated in a June 8 finding by the

National Security Council that officials had high confidence the security-clearance forms had been accessed. Four days later, the
administration announced these
forms had, in fact, been tapped by
the hackers.
Ms. Archuleta said in her testimony Wednesday she believes 4.2
million personnel records of current
and former government employees
were stolen but said estimates were
less precise about the hack of background-check investigations, which
took place over a number of years.
It is my understanding that the
18 million [number] refers to a preliminary, unverified and approximate
number of unique Social Security
numbers in the background-investigations data, she said. It is a number I am not comfortable with.
The dispute over the extent of
the breach flared the day before in a
private briefing with lawmakers, said
people familiar with the discussion.
When Ms. Archuleta said she didnt
know where the figure of 18 million
Social Security numbers came from,
a senior FBI official interjected and
said it was based on her agencys
own data, these people said.
An FBI spokesman declined to
comment on the closed-door briefing, as did an OPM spokeswoman.
Special Advertising Feature
A Global Approach to Management

INTERNATIONAL LEARNING OFFERS
EMBA STUDENTS MULTICULTURAL
BUSINESS SKILLS AND NETWORKS
A CROSS-BORDER
FOCUS COUNTS
By Brent Hannon
he rise of cross-border
commerce, fueled by
improved air travel and
telecoms, increased immigration and a growing
commitment to trade, is one of the most
meaningful developments of the 21st
centuryand few institutions are as
committed to understanding this
dynamic as the Kellogg-HKUST
Executive MBA program.
The world and business have profoundly changed since 2000, says Sally
Blount, dean of the Kellogg School of
Management at Northwestern University
in Evanston, Illinois.
The world is now characterized by
reduced barriers to entry, shorter product
and idea life-cycles, endless data and
information, and too many distractions,
resulting in harder and more complex
problems to solve. All of this changes the
way we approach management education
in the 21st century.
As a partnership between the Hong
Kong University of Science and
Technologys Business School (HKUST
Business School), and the Kellogg School
in Evanston, the Kellogg-HKUST program
provides its students with in-depth
knowledge of two of the worlds biggest
economies, and students are further
exposed to the international arena
through the programs sister campuses in
Canada, China, Germany, Israel, and
Miami, Florida.
Our partnerships make six more
campuses available to students, which
makes our EMBA a truly global experience, says Professor Jitendra V. Singh,
dean of HKUST Business School. In
addition, the alumni of these schools form
an extended family that greatly enriches
the global reach of our student networks.
OVERSEAS SCHOOLING
All Kellogg-HKUST students take two

live-in weeks at Kellogg in Evanston and
can also take at least two elective weeks at
another overseas partner school. Eunjae
Won, CEO and co-founder of Seoul-based
Access Mobile Co., Ltd., which provides
mobile network services to companies
throughout Southeast Asia, chose
Guanghua-Kellogg in Beijing as an
overseas elective. I switched my second
overseas campus from another week in
Kellogg Chicago to the Beijing University
campus after taking a couple of Chinarelated courses, which highlighted the
urgency of learning Chinese business
culture and practices, says Ms. Won.
The classroom discussions and group
studies were among the highlights of her
overseas studies, she says. You get to
Professor Jitendra V. Singh is the dean of the HKUST Business School.

know talented people from different
backgrounds, and build amazing people
networks, says Ms. Won. Even though
Kellogg-HKUST provides a multicultural
experience, cohorts from affiliate schools
who do business in other continents are
still unique in their thoughts and styles.
Yang Guang, president of Asia Pacific
at Vancouver-based Westport
Innovations, Inc., a company that
engineers advanced natural gas engines
and vehicles, attended the KelloggRecanati campus in Tel Aviv because it
was a good fit for his work at Westport. It
offered a course called Venture Capital
and Project Management in a Technology
Company, says Mr. Yang. In Israel,
technology companies thrive because of
smart investment support and excellent
I SAW FIRST-HAND THE PEER

RELATIONSHIPS FORMED ACROSS
COUNTRIES, ORGANIZATIONS
AND MARKETS.
execution in taking technology to the
market. And what could be a better
experience than to learn from practitioners who are successful?
Another June graduate, Ian Bell, opted
for Miami to complement his two weeks
in Evanston. It was important for me to
get the U.S. experience from studying with
Kellogg, says Mr. Bell, managing director
at New York-based Evercore, an independent investment banking advisory firm.
They have some of the best lecturers in
the world, and this was evident in my time
on campus. Also, Miami is not a bad town
to hang out in.
Mr. Bell also benefited from the
multicultural backgrounds of his classmates: the 47 students in the June
graduating class represent 21 different
nationalities. The broad array of cultures
and nationalities in our class has been
extremely helpful to me in my current
job, he says. I cover clients across the

globe and regularly travel to over a dozen
different countries in Asia, and with the
help of my classmates Ive been able to
hone my knowledge of culture and
business across the region.
RELATIONSHIP NETWORKS
The structure of the Kellogg-HKUST

EMBA program ensures that students
remain in close proximity during their 18
months of study: it includes an initial
live-in week in Hong Kong, two weeks at
the Kellogg campus in Evanston, the
overseas electives, and a series of live-in
weekends in Hong Kong.
The resulting guanxi, or network of
relationships, is one of the highlights of
the program, says Ms. Blount, dean of the
Kellogg School. During a recent trip to
Hong Kong, I had the opportunity to meet
with students from all seven campuses
who had come together for a Global
Electives Week. I saw first-hand the
meaningful peer relationships that were
being formed across countries, organizations and markets, says Ms. Blount.
Harry M. Jansen Kraemer, Jr., clinical
professor of strategy at the Kellogg School
of Management, graduated from Kellogg
37 years ago and says he is still in contact
with many of his classmates.
I keep in touch with 30 or 40 of them
and, if Im trying to make a decision, if Ive
got issues that Im trying to understand, I
can call on them, he says. And these
folks are even closer than that, because
theyre living with one another when
theyre in class for the weekend.
The program was launched in 1998 and,
as the 17th Kellogg-HKUST class prepares
to graduate, the school will continue to
evolve and grow, says Prof. Singh.
Continuous improvement is a core part
of our partnership culture, he says. We
will also experiment with ways to use
technology to connect students in partner
schools, even when they are not physically
present for electives.
Brent Hannon is a Vancouver-based
business writer who specializes in Asia.
The Wall Street Journal news organization was not involved in the creation of this content
In one of its more interesting

annual traditions, each KelloggHKUST graduating class chooses
a Professor of the Year, and this
years winner is Harry M. Jansen
Kraemer, Jr. [pictured below],
clinical professor of strategy at
Kellogg School of Management in
Evanston, Illinois.
That was a big honor, and what
makes it special is that its not
something the administration was
involved in, he says. It is from
the students, out of all the
professors theyve had over that
period, so when I got the phone
call I got emotional about it.
This years graduates had 28
professors during their 18 months
of study, all highly accomplished
and qualified. Being named that
way is more impactful to me than
becoming CEO of a company,
says Prof. Kraemer, former CEO of
Baxter International, Inc., a $12
billion global health-care firm.
Prof. Kraemers classes
resonate with his students as they
are carefully tailored to their
specific needs, with a pronounced
emphasis on upper-level management, and a global outlook.
Im always using examples of
people who are leaders in running
organizations and dealing with
C-level issues, says Prof.
Kraemer. These students are all
people with 15 or more years of
experience trying to figure out
how to become CEO or president,
or theyve started a company and
are running it. So a lot of the
discussion is about what it takes
to run the organization or be one
of the C-level officers.
Given the international nature
of the Kellogg-HKUST program
it has five sister schools as well as
its Hong Kong and Evanston
campusesthere is an ongoing
focus on cross-border business
and a global orientation, says
Prof. Kraemer,
so he aims to
to talk about
issues from
a global
perspective.
Brent
Hannon
**
WORLD NEWS
U.S. Economy Stays Stuck in First Gear
Six years into the recovery, the

U.S. economy remains in a rut.
Growth has failed to achieve
much more than a 2% pace since the
recession ended in June 2009. Each
time the economy revs up, it is upended by a significant slowdown.
That happened again in the first
quarter, when the economy contracted at a 0.2% annual pace, according to revised Commerce Department data released Wednesday.
Many economists project a second-quarter rebound, with the economy growing at a 2% to 3% annual
rate, to be followed by a second-half
pickup. But even that acceleration
would put 2015 on a pace that looks
a lot like the previous three years.
It remains to be seen whether improved fundamentalssteady job
gains, early signs of stronger wage
growth, a healthier housing market
could position the recoverys seventh
year for a long-awaited, sustained acceleration. Though growth stalled in
the first quarter, activity is bubbling
beneath the surface, said Gregory
Daco, an economist at Oxford Economics. He expects an improved labor market to support consumption
while drags from an uneven global
economy and a retrenching U.S. energy industry dissipate gradually.
Like many economists, Mr. Daco
projects gross domestic product will
advance 2.3% in 2015nearly matching last years 2.4% growth, the highwater mark during the current recovery. Earlier this month, Federal
Reserve officials projected the expan-
REUTERS
BY ERIC MORATH
The U.S. economy is in a rut six years into the recovery. Above, workers constructing a Los Angeles apartment complex.
sion would slow to a rate of 1.8% to
2% in 2015.
Ellyn Davidson, a managing partner at Birmingham, Mich., advertising firm Brogan & Partners, said clients are maintaining a mixed view of
the economy. They still have tight
marketing budgets but are facing less
pressure than earlier in the recovery.
They arent under such a crunch to
meet immediate expectations, she
said. They can think more long-term
about whats going to grow their
business.
Fed officials are assessing
whether the economy is gathering
enough strength over the summer as

they decide whether to raise shortterm interest rates from near zero.
Stronger job growth could support a
first increase in September, but inflation remains weak and overall
growth has been choppy.
Economists say a breakout in
growth must be supported by stronger consumer spending, which represents more than two-thirds of economic output.
In the first quarter, consumer outlays grew at a 2.1% rate, an upward
revision from the prior estimate a
month ago. Separate data showed
that spending at retailers this spring

improved from the winter, a sign that
consumers might finally be spending
savings at the gas pump elsewhere.
On Thursday, the Commerce Department said personal spending in
May jumped a seasonally adjusted
0.9% from a month earlier.
Business at Schaeffers Corner
Market in Ruffs Dale, Pa., slowed
sharply during a bitter winter but
perked up again this spring. Increased traffic from roofers, cable installers and other contractors is
boosting sales of takeaway pizzas,
wings and hoagies featuring a full
pound of cold cuts, owner Kristen

Ranker said.
Business has ramped back up after the weather broke, A lot of folks
who were struggling to get jobs are
out working again, she said.
Despite the poor weather, spending on home building and improvements advanced at a 6.5% pace in the
first quarter, also better than previous
estimates. Home-construction figures
could be even stronger in the second
quarter and beyond. Sales of both
new and existing homes are at their
highest levels in more than five years.
But the latest GDP figures highlighted several areas of concern.
Business investmentspending on
construction, machinery, and research and developmentfell at a 2%
pace last quarter, still the worst
reading for the category since 2009.
A slowdown in the previously
booming energy sector is weighing on
output. The broader story in the first
quarter remains severe drags from
plummeting oil and gas drillingand
no offsetting boost from consumers
spending gas savings, said Morgan
Stanley economist Ted Wieseman.
Other recent data show manufacturers have struggled through the
first half of the year. Factories are
facing headwinds from a strong dollar that makes U.S.-made goods relatively more expensive overseas. Exports fell at a 5.9% pace from
January through March, led by an
11.6% decline in goods exports. Imports, which subtract from GDP, rose
at a 7.1% pace last quarter.
Kate Davidson
Islamic State Attacks

Two Syrian Kurdish Areas
BY RAJA ABDULRAHIM
AND MARIA ABI-HABIB
ANTAKYA, TurkeyIslamic State

militants attacked two Syrian Kurdish strongholds in a clear warning to
Kurdish militias and moderate opposition forces who are advancing toward the extremist groups de facto
capital of Raqqa.
Some three dozen militants penetrated the lightly guarded town of
Kobani at dawn on Thursday, residents and Kurdish officials said.
Disguised as Kurdish militants
and moderate opposition Free Syrian
Army fighters, the fighters sneaked
into the town in five cars, they said.
It was the groups first major
foray into Kobani after being pushed
out in January by Kurdish militias
backed from the air by a U.S.-led coalition that has targeted Islamic
State in Syria and Iraq.
Fighters detonated the first car
bomb at 5 a.m. local time, said Turkish officials in Sanliurfa province,
which borders Kobani.
They said the militants came
from Jarablus, a neighboring Syrian
border town, and then slipped into
the Kurdish-controlled area.
Security cameras showed a car
speeding into Kobani from the south
and exploding in a residential area,
according to Turkeys state-run Anadolu news agency.
Once inside the city, the militants
began randomly killing civilians on
the street and planted snipers atop
a handful of buildings, residents
said.
At least 20 civilians had been
killed in the skirmishes by Thursday
evening and 70 injured, said Redur
Xelil, a spokesman for the Kurdish
militia YPG, which controls Kobani.

In a simultaneous attack, Islamic
State re-entered the majority Kurdish city of Hasakah, 260 kilometers
east of Kobani, activists said. The
Syrian regime routed the militants
from the city earlier this month.
Launching a three-pronged assault, the militants took several
neighborhoods of southern Hasakah
that had been under regime control,
prompting at least 1,000 Kurdish
and Christian civilians to flee. Many
had sought refuge in the city after
being displaced from neighboring
towns overrun by Islamic State earlier this year.
The offensives appear

aimed at deterring an
advance by Kurds and
their allies toward a
militant stronghold.
Islamic State used a few dozen
fighters to each assault, suggesting
that the group doesnt mean to
launch fresh battles to reclaim either
city, but perhaps was seeking to
drum up morale after a string of defeats to the Kurds.
The offensives appeared to be
aimed at deterring the Kurdish militia and Syrian rebels who have been
inching toward Islamic States Syrian
base in the city of Raqqa after retaking the strategic border town of Tal
Abyad last week.
YPG fighters and allied Syrian
rebels this week advanced to within
50 kilometers of Raqqa.
OPINION: REVIEW & OUTLOOK
The Brawl for Samsungs Future
outh Korean soap operas are typically high on drama and thin on
meaning, but the battle between
mega-conglomerate Samsung and activist
American hedge fund Elliott Associates is
an exception. This saga carries major implications for shareholder rights and corporate governance in the worlds 14thlargest economy.
Last month executives at Cheil Industries, Samsungs de facto holding company (known until recently as Samsung
Everland), announced that they would acquire construction firm Samsung C&T for
about $9 billion in stock. Elliott Associates, which holds a 7% stake in Samsung
C&T, opposed the acquisition as an unlawful scheme to hastily railroad Samsung C&T shareholders into an unfair
takeover at a low-ball price. The hedge
fund sued for an injunction and is seeking
support to block the merger at a shareholder meeting next month.
Elliott has a strong case. Known for
constructing the worlds tallest building
(in Dubai), Samsung C&T also owns
stakes in firms such as Samsung Electronics, crown jewel of the conglomerate.
Yet its valuation under Cheils takeover
offer is 46% less than the book value of
its holdings alone (priced as of March),
not counting other assets.
Cheil says its bid reflects a ratio of the steep inheritance taxes.
two companies share prices, as required
This appearance of chaebol self-dealby law, and that there are business rea- ing at the expense of minority shareholdsons for the merger. But Elliott says the ers has earned Elliotts activist position a
deal would violate Samsung C&Ts obliga- surprising degree of public support. Poption to act in its shareholders interest, ulist South Koreans still often rail against
costing them $7 billion in lost value.
foreign investors, and some are doing so
Samsungs likely motive here is to help in this case. But more prominent is the
its founding family keep control after the group Solidarity of Minor Shareholders
death of Chairman Lee
of Samsung C&T, some
A U.S. investor
Kun-hee, who has been
2,500 retirees, professionhospitalized for a year. As
als and others campaignstands up for
is typical for South Koing against the proposed
reas family-run conglom- minority shareholders. merger and even challengerates, or chaebol, the Lee
ing it in court, following
family controls Samsungs
Elliotts lead. This is my
74 affiliated companies through a com- retirement money, one small shareholder
plex web of cross-shareholdings, despite said online. I have to protect my assets.
owning less than 2% of total shares. But
Such public frustration signals that
47-year-old Vice Chairman Lee Jae-yong President Park Guen-hye hasnt lived up
may have difficulty succeeding his father to promises to advance economic deafter paying expected inheritance taxes of mocratization. As a candidate, she
around $5 billion.
pledged to curb the ability of politically
Which is where the controversial connected chaebol to access cheap capimerger would come in. As major share- tal, suppress competition and overcharge
holders in Cheil Industries, the younger consumers.
Mr. Lee and his sisters would control
In a case similar to Samsungs pending
the merged entity, including the 4% takeover, Hyundai Motor last year paid
stake in Samsung Electronics currently $10 billion, or three times appraisal
held by Samsung C&T. Thats worth value, for land to build a new headquarsome $7 billion on the market, or more ters, infuriating its minority shareholders
than enough to cushion the blow from and reinforcing the perception that chae-
bol families often treat their listed companies as private piggybanks.

Seoul last year imposed a tax on corporate cash hoards to push chaebol to
invest more, raise wages or pay greater
dividends. The government also banned
certain new cross-shareholdings. But such
measures do little to limit conglomerates
capital advantages and political influence.
As if to prove the point, the Park Administration has signaled support for
pardoning chaebol executives convicted
of crimes. Samsungs Chairman Lee
earned such a pardon from then-President Lee Myung-bak in 2009 on grounds
of national interest, erasing a conviction for evading taxes in transferring
shares to his son.
A panel of judges is expected to rule
on Elliotts motions before the end of the
month. If they dont enjoin the merger,
shareholders will meet on July 17 and the
likely swing vote will belong to the Korean National Pension Service (the
fourth-largest in the world), which holds
a 10% stake in Samsung C&T. A vote
against Samsungs proposalor successful encouragement to scrap it and draft a
new onewould be a welcome blow for
corporate governance in an economy with
great potential but a deficit of domestic
competition and innovation.
Schumers Carbon Tax Prediction
huck Schumer is poised to become

the next Democratic leader of the
U.S. Senate, and hes already planning for 2017 when he expects Hillary
Clinton will be President. To wit, the New
Yorker is predicting that the political class
might join hands and pass a carbon tax.
If Hillary wins and we take back the
Senate, I believe many of our Republican
friends will say weve been starving the
government for revenues, Mr. Schumer
told an environmental event on Capitol
Hill according to the Politico website, but
many of them will not be for raising [income tax] rates. So Republicans and Democrats will both be hunting for revenues
and you might get a compromise over a
new carbon tax, he added. I think in 2017 year is starving for anything. But then
people of both parties might come to that he knows that entitlements continue to
as the best way to fund the government. grow unchecked and spending for ObamaA carbon tax is the emerging fashion in Care is just getting started. The political
Washington because it
pattern pre-Reagan had
The future Senate
serves two goals: It colbeen that Democratic Preslects heaps of revenue
idents
pass new entitleDemocratic leader
while raising the cost of
ments and then Republifloats a 2017 idea.
energy from fossil fuels.
cans would feel obliged to
The climate-change worripay for them. Perhaps he
ers are eager to force busifigures Republicans will
ness and consumers to use less oil and fall for that again.
natural gas, and that means raising their
Our view of a carbon tax is that it
price throughout the economy.
might be acceptable as part of a tax reIts amusing that Sen. Schumer thinks form that eliminatedentirelysome
a federal government that spends nearly current revenue source such as the pay$4 trillion and 21% of national output a roll or corporate income tax. But we dont
expect to live long enough to see that day.

A slippery compromise would trade a new
carbon tax for a reduction in some tax
rates, but the politicians would soon return to raising those rates again. The U.S.
would be left with the current tax burden
plus the new carbon taxand a permanently larger government.
Mr. Schumer deserves credit for honesty in laying out his all too plausible scenario. Reporters and debate moderators
should now ask every presidential candidate whether he or she supports a carbon
taxespecially Mrs. Clinton, if she ever
dares to take another media question.
Americans cant say they havent been
warned.
Japan to the South China Sea
hina has notched another gain in

its inadvertent campaign to expand defense cooperation among
its nervous neighbors. In a Journal interview published Thursday, Japans top
military commander said Japanese
forces may join U.S. troops in patrolling
the South China Sea, where China has
been aggressively staking territorial
claims around crucial international waterways.
The area is of the utmost importance
for Japanese security, said Admiral Katsutoshi Kawano. Because there is a lack
of transparency, we are very concerned
about Chinas actions.
China in recent months has built
some 2,000 acres of artificial land atop
reefs and shoals in the South China Seas
disputed Spratly island chain. Beijing insists the artificial islands are mainly for
weather monitoring and other peaceful
purposes, but it has placed artillery on as part of Washingtons Asian rebalat least one site and built runways that ance. The U.S. and the Philippines last
could host the full range of Chinese mili- year signed a new defense agreement
tary aircraft.
that could see U.S. Marines rotate
Admiral Kawanos disclosure comes as through Palawan bases.
Japanese troops this week are conductMalaysia this month said it would foring their second-ever joint exercises with mally protest Chinese incursions into its
the Philippine navy. To
200-mile exclusive ecopractice search-and-res- Japanese patrols would nomic zone, including the
cue missions around the underscore how Beijing anchoring of a Chinese
Spratlys, Japanese P-3 paCoast Guard vessel by
is alienating Asia.
trol planes with Japanese
Malaysias Luconia Shoals,
and Philippine troops
near gas wells operated
aboard have flown from
by state-owned Petronas.
Palawan Island, the Philippine province This represents a change, as Kuala Lumthat lies within 100 miles of the disputed pur previously kept quiet about Chinese
waters.
patrols near James Shoal, also within its
In separate drills nearby, other Philip- exclusive economic zone. Last month
pine troops this week are training with Malaysias defense chief warned that
Americans, who for the first time in- South China Sea tensions could escalate
cluded a littoral combat ship, the USS into one of the deadliest conflicts of our
Forth Worth, newly based in Singapore time.
Indonesia is beginning to raise its

voice about Chinese incursions around
its Natuna Islands. Vietnam, which saw
China plant an oil rig in its waters last
year, is on an arms-buying spree while
expanding cooperation with the U.S., Japan, India and others. All of these countries could benefit from a new U.S. fund
of $425 million to support Southeast
Asian military modernization over the
next five years. Japan is also boosting
regional arms sales.
The pattern is clear. China paints the
U.S. as an aggressor and reminds everyone of Japans imperial past, but amid
Beijings bullying its neighbors are clamoring for cooperation with Washington
and Tokyo. Japanese participation in
South China Sea patrols would boost
their effectiveness and underscore how
Beijings behavior is alienating the region.
OPINION
A Farewell to Arms
[ Bookshelf ]
The Right Way to Lose a War
By Dominic Tierney
Little, Brown, 384 pages, $28
BY MARK MOYAR
Americans like to win, not
least when it comes to wars. The
preoccupation with victory, says
Dominic Tierney, dangerously denies the reality that America has
failed in most of its wars since
1945. The time has come, he says,
for America to cast off its wishful thinking, unhealthy braggadocio, and illusory triumphalism.
Of Americas five major wars

since World War II,
only one resulted in victory.
The U.S. can then focus on how to
escape with a tolerable draw in
future wars, or even find the
right way to lose.
Of Americas five major wars
since World War II, Mr. Tierney
explains, only the 1991 Gulf War
resulted in victory for Uncle Sam.
The U.S. lost in Vietnam and Iraq.
Korea and Afghanistan ended in
stalemate. The age of decisive
military victories ended in 1945
because Americas rise to global
power necessitated its involve-
ment in unconventional wars and

civil wars noteworthy for their inscrutability and degree of
difficulty. In these wars, Mr. Tierney writes, weaker opponents repeatedly threw the U.S. military
to the mat, judo-style.
Citing various trends since
1945, Mr. Tierney contends that
the future of war is likely to consist mainly of untidy and unwinnable conflicts. To keep the U.S.
from getting bogged down in
quagmires, he prescribes a strategy of surge, talk, and leave. A
military surge will buy time to
improve security and negotiate a
withdrawal on tolerable terms.
Mr. Tierney covers his subject
matter with admirable thoroughness. He anticipates and parries
the most obvious critiques of a
surge, talk, and leave strategy.
He acknowledges that withdrawal
can have a great many unfavorable effects. Pulling out American
forces can undermine the credibility of our promises elsewhere,
he writes. Allies may desert us
and enemies may no longer be deterred. Hence the need for a
temporary surge, astute diplomacy and careful withdrawal.
Surge, talk, and leave sounds
a lot like the Obama administrations strategy in Afghanistan. Mr.
Tierney, however, is not entirely
comfortable with President
Obamas strategy. Mr. Obamas
plan to withdraw all U.S. troops
risks a resurgence of international
terrorists, he rightly warns. In
this case, he believes, the U.S.

should keep some of its military
forces in Afghanistan for the long
term. Leaving does not mean
abandonment, he states.
Mr. Tierney thinks that, under
a strategy of leaving, the U.S.
could keep a sizable follow-on
force of troops in countries like
Afghanistan as part of a longterm strategic partnership agreement. But he does not explain
how American citizens will be
persuaded that such a policy
amounts to leaving. Presidents
who have sold the American people on the need for overseas military commitments, like Franklin
Roosevelt and George W. Bush,
have generally won public support more effectively than presidents who have acted as if the
nation were not fully committed,

like Lyndon Johnson and Mr.
Obama.
Valid objections can also be
made to Mr. Tierneys claim that
civil wars and guerrilla wars are,
by their nature, likely to end in
American failure. The U.S. has
backed the eventual winners in a
variety of such warsfor instance
in the Philippines, El Salvador
and Colombia. America has been
less successful in wars requiring
U.S. combat troops, usually because its allies were especially
weak or its enemies especially
strong: Both Vietnam and Iraq
come to mind. But the fact that
the U.S. did not win those wars
does not prove that they were unwinnable. Mistakes, loss of will,
enemy cunning and chance events
played decisive roles in the outcome. Had the U.S. inserted
ground troops into Laos to cut
the Ho Chi Minh Trail in 1966, or
had it kept the Iraqi army intact
in 2003 instead of disbanding it,
Mr. Tierney might be writing
about the right way to win a
war.
At times, the U.S. has achieved
its objectives only because it
chose not to leave. If President
Truman had offered to negotiate
in 1950 or 1951 while preparing to
withdraw from South Korea, the
Chinese and North Koreans would
have blown smoke at the
negotiating table until the U.S.
forces had sailed home and then
seized South Korea by force. In-
stead, Americas willingness to

stay persuaded the Chinese communists to agree to a peace that
gave South Korea its prewar borders.
Mr. Tierney sagely rejects the
notion that the U.S. should sit out
of all messy wars simply because
it finds them unpleasant. The historical record shows that even the
most cautious of presidents can
end up fighting one. He faults the
Obama administration for shrinking Americas armed forces, arguing that such relative weakness
only encourages insurgents to
challenge American interests at
hot spots around the globe.
Mr. Tierneys blanket statements about the intractability of
civil wars and insurgencies, however, may well provide grist for
isolationists or nervous foreignpolicy realists. His broad argument for losing the right way
can be invoked to justify withholding assistance from Syrias
rebels and Ukraines government
and to rationalize forsaking Libya
and Yemenand, yes, Afghanistan. Perhaps the U.S. can withstand continued losses a while
longer, but a nation content to be
a loser will not long enjoy allies
who will fight or enemies who
will show restraint.
Mr. Moyar is the author of Strategic Failure: How President

Obamas Drone Warfare, Defense
Cuts, and Military Amateurism
Have Imperiled America.
Acquiring a Taste for Japan

[ Art ]
BY LEE LAWRENCE
Cincinnati, New York and
Hanford, Calif.
Whether a black-and-gold lacquer box or the vibrant print of a
cresting wave, a samurais helmet
or a flowing silk kimono, Japanese
works are a familiar sight in museums across the U.S. today. Three
shows currently on view provide
insights into how this came to be.
Masterpieces of Japanese Art,
at the Cincinnati Art Museum, focuses on collectors of the late 19th
and early 20th centuries; Discovering Japanese Art: American
Collectors and the Met, at New
Yorks Metropolitan Museum of
Art, carries this story through the
decades following World War II;
and Elegant Pastimes: Masterpieces of Japanese Art From the
Clark Collections at the Minneapolis Institute of Arts, at the
Clark Center for Japanese Art
and Culture in Hanford, Calif., focuses on a single contemporary
collector.
By no means is it the complete
storyit couldnt be without names
like William Sturgis Bigelow
(1850-1926) and Ernest Fenollosa
(1853-1908), who helped build the
holdings of Bostons Museum of
Fine Arts; Charles Lang Freer
(1854-1919), who gave the nation
his collection and a museum on the
Washington Mall to house it; or
Mary Griggs Burke (1916-2012), who
bequeathed her collection to the
Met and the Minneapolis Institute
of Arts. Nor do these three shows

illustrate the extent to which Japanese woodblock prints captured the
eye and wallet of American buyers.
Still, a visitor to all three comes
away with a vivid sense of how
American collectors taste for Japanese art originated, evolved and
shaped museum collections.
Americans began collecting
Japanese art in the late 19th century, and for one simple reason: It
became widely available for the
first time. In 1853 Commodore
Matthew Perry had sailed into the
port of Edo (present-day Tokyo),
prompting Japans rulers to abandon their 200-year-old policy of
near isolation and allow foreigners
in and goods out.
Both the Cincinnati and New
York shows illustrate the desire in
the early days for exotic curios, as
well as an appreciation for the
skilled hand behind beautiful and
utilitarian objects. To varying degrees, they include such things as
lacquered picnic boxes with interlocking compartments and netsuke,
charming palm-size sculptures that
serve as toggles.
There is, however, a difference
in taste between East Coast and
Midwest U.S. collectors. In Cincinnatis Masterpieces show, for example, cloisonn vases splashed
with golds and reds join porcelains
with Buddha images to give us a
feel for some of the wares that
crowded the Japanese Pavilion of
the 1876 Centennial Exhibition in
Philadelphia, the first major show
where Japanese exporters sought
to cater to the U.S. market. Early
purchases by collectors who later
donated to the Met, on the other

hand, tended to eschew such export ware and favor porcelains,
mostly from kilns that catered to
shoguns and other elites in the 17th
and 18th centuries. These are decorated with scenes from Chinese
paintings, favorite motifs like
cherry blossoms and designs that
look startlingly spare and modern.
Starting in the 1880s, American
collectors generally sought out
works traditionally prized by the
Japanese themselves. This comes
Starting in the 1880s,

American collectors
generally sought out
works traditionally prized
by the Japanese themselves.
through most startlingly in Cincinnati. Curator Hou-mei Sungs selection of paintings includes such
highlights as the lively depiction of
frogs in court dress living the poets life in Animal Story Scroll by
Ogawa Haritsu (1663-1747). While,
in the ceramics section, Ms. Sung
gives prominence to some 20
pieces with textured surfaces, subtle hues and sometimes loose,
asymmetrical forms. Ceramist Maria Longworth Nichols (1849-1932)
purchased these through Rookwood Pottery, the company she
founded in 1880, but it was not she
who selected them. Japanese artist
Kitaro Shirayamadani (1865-1948)
did. Nichols hired him as lead decorator in 1887 and sent him on
buying trips. Among the pieces he

brought back is a 19th-century teapot that bears the imprint of the
fingers that formed its body, textured its surface and worked
pieces of clay into a decorative lotus leaf and marching crab.
The Met exhibition, which also
begins with early collectors, goes
on to chronicle a revival of interestand opportunityafter World
War II. As assistant curator Monika Bincsik illustrates through the
seminal collection of Harry G.C.
Packard (1914-1991), Americans
appreciation of Japanese art now
broadened and deepened. A former
GI, Packard moved to Japan in the
late 1940s and collected till his
death. We see among other things
ceramics ranging from the fourth
through 18th century; paintings
that follow the Chinese artistscholar tradition along with a
1795-99 screen depicting scholars
in an otherworldly landscape by
eccentric artist Nagasawa Rosetsu
and a lively 11th-century bronze of
Zao Gongen, an indigenous Japanese deity worshiped in remote
mountain temples.
Throughout we encounter two
kinds of collectors, those who cast
a wide net and an increasing number who focused narrowly. Illustrating the latter are two 14th-century works of calligraphy at the
Met that speak of the passionate
pursuit of William Burto
(1921-2013) and Sylvan Barnet. In
the 1960s, they were among a rare
few who fell in love with a medium
prized by the Japanese but little
understood by Americans.
Finally, Japanese art has at-
tracted many who, like Willard

Bill Clark, combine and tweak
these approaches. With some 30
works, Elegant Pastimes is a
swan song as Mr. Clark, who began
collecting in 1978, closes down the
center he established in Californias Central Valley 20 years ago.
The shows pieces will join about
1,500 others that Mr. Clark and his
wife have donated to the Minneapolis Institute of Arts.
In the selection made by MIA
curator Andreas Marks (formerly
of the Clark Center), we see Mr.
Clark guided by humor as well as
quality. In a hanging scroll, a
rather bemused frog towers over a
tiny mouse, calligraphy spilling
around them like ropes of rain.
Painted sometime in the late 18th
or early 19th century, it is signed
Dairyusai Getsuju while drinking,
which is all anyone knows about
its author. That alone would be
enough for many collectors to give
it a pass, but not Mr. Clark. At the
same time, Mr. Clark has specializedserially. Twentieth-century
porcelains, sculptural bamboo and
recent lacquer work speak of a succession of passions as he mined an
undiscovered area, then moved on
when it became popular.
As Mr. Clark and his peers bow
out, there is a worrisome dearth of
younger collectors stepping in. One
can only hope that, as scholars revisit such areas as 19th-century export ware or museums deaccession
duplicate works, new buyers will
catch the bug.
Ms. Lawrence writes about Asian

and Islamic art for the Journal.
OPINION
BY MICHAEL CLARKE
Up to 28 people were killed in
an attack Tuesday by suspected
Uighur militants on a police
check-point in Kashgar, in the
southwest of Chinas Xinjiang Uighur Autonomous Region. According a Radio Free Asia report, the
attack began when a car sped
through the checkpoint, injuring a
traffic policeman. Two suspects
leapt out of the vehicle and killed
two other police officers with
knives. The fighting continued until Peoples Armed Police arrived
at the scene and shot and killed
not only the suspected militants
but also numerous bystanders.
Another spate of violence

this week raises questions
about the situation
in the region.
Major international media outlets carried the RFA report, but
the Chinese media has remained
largely silent. Chinese Foreign
Ministry Spokesman Lu Kang
would not confirm it when questioned by reporters about the incident, but simply noted that if it in
fact did take place, the Chinese
government has the responsibility
to take resolute steps to stop
these kinds of violent terror acts,
to maintain peace and stability in
Xinjiang.
While the exact circumstances

surrounding this incident remain
unclear, Beijing is facing escalating unrest in Xinjiang. In March,
the Xinjiang regional government
claimed that law enforcement
agencies had busted more than
180 terrorist gangs in Xinjiang
during the previous year. According to data compiled by Marc Julienne and Moritz Rudolf of the
Mercator Institute for China Studies in Berlin, terrorist attacks either in Xinjiang or linked to the
region (such as the Kunming mass
stabbing of March 1, 2014) have
claimed the lives of 468 people
and injured 548 between 2010 and
2014. The Heidelberg Institute for
International Conflict Research in
its annual Global Conflict Barometer report also categorized the situation in Xinjiang as one of limited war.
Is China thus facing an insurgency by Uighur militants in Xinjiang? According to RAND counterterrorism analyst Seth Jones,
insurgency is a protracted political-military activity directed toward subverting or displacing the
legitimacy of a constituted government and completely or partially controlling the resources of
a country through the use of irregular military forces and illegal
political organizations. Within
those parameters the situation in
Xinjiang arguably does not constitute an insurgency, as there is little evidence of a politically or
ideologically coherent organization behind the escalating vio-
GREG BAKER/AGENCE FRANCE-PRESSE/GETTY IMAGES
Is China Facing a Xinjiang Insurgency?
PROVOCATIVE MEASURES Paramilitary police patrol near the central square in

Hotan, Xinjiang.
lence, or that attackers are seeking to control territory.
However, an analysis of Beijings measures in response to the
escalating violence suggests that
it is guided by a judgment that it
faces the potential for an insurgency. Beijings response to date
has focused on three fronts:
strengthening of security and
counterterrorism measures; renewed attempts to strengthen
stability and ethnic unity; and
a renewed effort to demonstrate
the links between Uighur terrorism and hostile external forces.
On the first issue, Beijing rapidly increased Xinjiangs internal
security budget to some $1 billion
at the beginning of 2014, while
President Xi Xinping has instituted a special committee on
Chinas new National Security

Council to specifically deal with
security and counterterrorism
strategies in Xinjiang.
The authorities have also
ramped up repressive measures in
the region, with Xinjiang CCP
Chairman Zhang Chuxian calling
for a peoples war in which the
state will exterminate the savage and evil separatists who are
influenced and directed by foreign
extremists.
This has entailed not only accelerated arrests and trials of suspected terroristsincluding
public, mass sentencing rallies of
Uighur suspectsbut also continued sweeps of Uighur neighborhoods and mosques in search of
potential militants and their
weapons. Furthermore, there is
continued suspicion, and control

of, outward signs of religiosity
such as mosque attendance and
wearing of veils.
Along with using such hard
measures, authorities in Xinjiang
have embarked upon less repressive ones to explicitly weaken Islam. There are reports of countylevel regulations in southern
Xinjiang that compel shop owners
to stock both alcohol and cigarettes and advertise them through
eye-catching displays. Authorities have also attempted to elicit
the assistance of ordinary Uighurs
in apprehending suspected militants through the offer of financial rewards for tip-offs to police regarding suspicious
individuals and activities.
Such strategies, however, miss
a central element of an effective
counterinsurgency strategy. As
Mr. Jones notes, Popular support
is a common goal for all actors in
an insurgency. Both winning support and preventing insurgents
from gaining support are critical
components of any counterinsurgency. Beijings focus on hard repressive measures and its antireligious campaigns seems destined
to generate greater disaffection
amongst Uighurs and increase the
number of individuals who could
potentially be coaxed into undertaking violent actions against the
state.
Mr. Clarke is associate professor

at the National Security College,
Australian National University.
Obama Ignores the Tehran-Terror Connection

BY ROBERT M. MORGENTHAU
As the deadline for a nuclear
agreement with Iran approaches,
it is vital to recognize what the
agreement doesnt address: the Islamic Republics continuing support of terrorism.
By no means do I minimize the
importance of nuclear weapons.
An agreement to curtail the Islamic Republics nuclear ambitions
would serve U.S. interests, if we
have assured verification and the
ability to punish noncompliance.
Still, any deal that fails to hold
Iran accountable for its criminal
and terrorist conduct, past and
present, will fail to curtail such
conduct in the future.
The sanctions on Iran have
Paul Beckett, Asia Editor

Miguel Gonzalez Jr., Senior Editor
David Holland, News Editor
Hugo Restall, Editorial Page Editor
Tomasz Rustowski, Institutional Sales
Anjali Kapoor, Marketing
Simon Wan, IT
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Jacky Lo, Circulation Sales
Stuart Wood, Operations
Mark Pope, Publisher
Published since 1889 by
Dow Jones and Company

2015 Dow Jones & Company. All Rights Reserved
been in place for decades. They

were designed not only to curtail
Irans efforts to develop nuclear
weapons, but also to curtail its
support of terrorist organizations,
human-rights abuses and the development of ballistic missiles.
There is no doubt that the regime
is a state sponsor of terrorism: Its
actions have been documented in
executive orders and policies
spanning four successive U.S.
presidential administrations. Iran
also has been held responsible
and liable for terrorist acts by U.S.
courts.
For example, Iran is the primary source of funding for Hezbollah, Hamas and other terrorist
organizations. During the war in
Iraq, Tehran provided IEDs (Improvised Explosive Devices) to insurgents to kill American troops.
Today the Islamic Republic supports the Taliban as the U.S. attempts to withdraw from Afghanistan. In February 2014, the U.S.
Treasury Department reported
that Iran was helping smuggle al
Qaeda fighters into Syria. In
March of this year, a federal judge
found that Iran was complicit in
the 2000 bombing of the USS Cole
by al Qaeda.
Tehran also has growing influence in several South American
countries, including Argentina,
Bolivia, Ecuador and Venezuela.
The apparent murder of Argentine special prosecutor Alberto
Nisman in January focused the
worlds attention on a deal that
Nisman said he uncovered between Argentinas government
and Iran to cover up Irans role in

the 1994 terrorist bombing of 85
people in the Jewish Center in
Buenos Aries. In March, a report
in the Brazilian magazine Veja
based on testimony of defectors
who were close to Hugo Chvez
accused Venezuela of brokering
the cash transfer in that deal,
which included sharing Argentine
nuclear technology with Iran.
A nuclear deal will mean

billions for Iran, but no
means for curtailing
its support for terrorism.
Iran and Venezuela have signed
mutual-assistance agreements on
commercial, financial, technological and military matters. Iran has
even constructed a military base
in Venezuela to house Iranian unmanned aerial drones. According
to Iranian officials cited in the Jerusalem Post, these drones, called
Mohajers, are capable of aerial
surveillance and can be retrofitted
to deliver advanced weaponry.
In light of these facts, the fundamental question to be asked is
whether the deal the U.S. is negotiating with Iran will curtail its
role as a state sponsor of terrorism. The answer appears to be a
resounding no.
To be sure, U.S. Treasury Secretary Jack Lew recently affirmed
that the U.S. will aggressively
target the finances of Iranian-
backed terrorist groups and the

Iranian entities that support
them. This may prove more difficult in practice than his plain
words suggest.
Some parts of the Iranian government support global terrorism.
Others are involved in developing
missiles and a nuclear-weapons
capability. Still others abuse the
rights of their citizens. Irans Revolutionary Guard is deeply involved both in the nuclear program and in supporting Irans
terrorist proxies.
The president seems to contemplate issuing executive orders
suspending economic sanctions
against Iran for its nuclear programand releasing up to $140
billion in Iranian assets that it is
holding. It is hard to imagine how
any administration is supposed to
target the finances of terrorist
groups once the sanctions regimes
are suspended and enormous
sums are released. Sanctions have
worked for the precise reason that
they are comprehensive.
Meanwhile, the Obama administration already has been returning substantial cash assets frozen
by sanctions. By the end of June
Iran will have received almost $12
billion since January 2014. These
funds were released as part of a
Joint Plan of Action toward a final
agreement. Nothing in the reported emerging deal will prevent
Iran from using the return of
blocked funds to provide more
missiles to Hezbollah, more rockets to Hamas and more material
support to Irans terrorist proxies.
Based on everything that is

publicly known, Iran is not being
held accountable for its past conduct. Iran has supported terrorist
attacks against U.S. civilians
around the world, and against U.S.
servicemen and women, dating
back to the 1983 Hezbollah attacks
on the Marine barracks in Beirut.
American citizens and soldiers
have obtained court judgments
against the Islamic Republic. Yet
not a penny of the billions released so far will be used to redress the harm the regime has inflicted on U.S. citizens and
soldiers. Iran stands to receive 10
times more without any apparent
compensation for the victims of
its actions. This sends precisely
the wrong message about accountability.
Ending Irans military nuclear
program is the ultimate goal of
economic sanctions. These sanctions, particularly over the past
decade, have given the U.S. powerful leverage. It appears that this
leverage is being frittered away as
U.S. negotiators bend over backward to strike a deal. But meaningful deals are negotiated from
strength; not from desperation.
Any deal that fails to address or
curtail Irans role as a state sponsor of terrorismand that actually undercuts Americas ability to
confront that threatis a deal
that the U.S. must not make.
Mr. Morgenthau, Manhattan district attorney from 1975 to 2009,

is of counsel with the law firm of
Wachtell, Lipton, Rosen & Katz.
BOOKS
Americas Most Peculiar President

One Man Against the World
By Tim Weiner
Henry Holt, 369 pages, $30
BY MAX BOOT
Has the United States ever had a
weirder president than Richard
Nixon? The fact that his only close
competitors in this regard are his
predecessor, Lyndon Johnson, and his
indirect successor, Jimmy Carter,
could help to explain why the 1960s
and 70s were such troubled times for
America. But even LBJ (who loved to
lecture aides while sitting on the toilet) and Mr. Carter (who claimed to
have been attacked by a killer rabbit and to have experienced lust in
his heart) could not match Nixon for
sheer bizarreness. Evan Thomass terrifically engaging biography contains
many choice examples.
In 1968, Nixon invited Walter
Cronkite, the CBS anchorman, up to
his room and offered him a drink
while declining one himself. Realizing
that refusing a drink seemed a little
prissy, he said to Cronkite, I tell you
what, Ill have a sherry. But that
didnt sound like one of the boys either, so he blurted, In fact, Ill have a
double sherry.
At formal White House dinners,
Nixon would position himself to talk
to as few people as possible, with instructions that no conversation was
to last more than five minutes. This
was to be rigidly enforced; conversations were to be broken off in midsentence if necessary.
In St. Petersburg, Florida, a policeman was severely injured when
his motorcycle flipped over while
driving in the presidential motorcade.
In his considerate way, Nixon rushed
from his limousine to express his
sympathies. As was also his way, he
didnt know what to say, blurting to
the policeman who lay bleeding on
the ground, Do you like your work?
These are just three lesser-known
illustrations of Nixons legendary
awkwardness. More famous examples
include his 1970 Oval Office meeting
with the drug-addled Elvis Presley,
whom he deputized as a federal agent
in the war on illegal drugs; his predawn visit in 1970 to the Lincoln Memorial, valet in tow, where he engaged in a rambling and loopy
conversation with a group of dazed
hippies; and his jocular comment to
David Frost, before an interview in
1977, Well, did you do any fornicating this weekend?
The common theme running
through all these anecdotes is that
Nixon simply did not know how to interact with people. Yet instead of
choosing to spend his life in a monastery or at an accounting office, Nixon
chose the most public occupation
imaginable. He was, as Mr. Thomas
notes, an introvert in an extroverts
business, and it was through sheer
force of will that he became a tireless hand-shaker and baby-kisser. So
skilled did he become as a politician
that he won four national elections,
two as vice president, two as president, the last of these (in 1972) by the
widest margin then recorded.
This is only one of the many paradoxes that Mr. Thomas, a prolific and
talented biographer, explores in Being Nixon: A Man Divided, a book
that might best be called a psychobiography. Except that it is mercifully
devoid of any psychological jargon.
While breaking no scholarly ground,
Mr. Thomas presents a fair, insightful
and highly entertaining portrait of
the 37th president. Thats something

that Nixon himself would no doubt
have had a hard time imagining, because Mr. Thomas (grandson of Socialist Party leader Norman Thomas;
graduate of Phillips Andover, Harvard
and the University of Virginia Law
School; and a longtime writer at
Newsweek) is a paid-up member of
the Eastern Establishment that Nixon
so loathed and that so amply returned his animosity.
In one memorable example cited
by Mr. Thomas, the British ambassador to Washington, John Freeman,
remembered being asked in 1969 by
Alice Roosevelt Longworth, the society doyenne, what he thought of
President Nixon. He gave a respectful reply. Alice then hushed up the
whole company, saying in her wickedest voice, How extraordinary! Listen.
The Ambassador thinks well of Mr.
Nixon! Such a common little man!
Alice Roosevelt Longworth was a lifelong Republican and actually friends
with Nixon. Mr. Thomas, rather than
belittling Nixon, as so many others
have done at excruciating length,
tries to understand this fantastically
contradictory and intriguing figure
who set out to change the world and,
for better or worse, did just that.
The paradoxes are legion, and Mr.
Thomas does them justice. Nixon
was, for example, someone who disliked personal confrontation of any
kind. In 1969, while on the phone
with Henry Kissinger, the national-security adviser, discussing sending
troops to Cambodia, he said, Wait a
minute. Bebe has something to say to
you. Thereupon Nixons friend Bebe
Rebozo came on to say what Nixon
couldnt: The President wants you to
know, Henry, that if this doesnt work
out, its your ass. And rather than
How did a man with

a hard-right reputation
become one of the most
liberal presidents ever?
fire his secretary of the interior, Walter Hickel, for leaking a letter critical
of him, Nixon instead ordered the removal of the White House tennis
court, which was used by Hickel and
other cabinet officers, but not by
Nixon. Little wonder that when,
deep in the throes of the Watergate
scandal, Nixon had to fire his closest
aides, H.R. Haldeman and John Ehrlichman, he was crying uncontrollably.
Yet, Mr. Thomas notes, Nixon
seemed to welcome public confrontation, especially with reporters.
Remember, the press is the enemy,
he told speechwriter William Safire.
And he certainly acted like it, placing
prominent media personages on his
infamous enemies list. He seemed
equally to revel in confrontations
with peaceniks, annoying them by
making his much-parodied V gesture (signifying victory rather than
peace). When protesters flipped
him the bird, he flipped them off
right back. He called antiwar demonstrators bums right before the Kent
State shooting in 1970.
Nixon abhorred Ivy Leaguers almost as much as reporters and hippies. A benchwarmer on the Whittier
College football team, he spouted
contempt for their frilly games,
squash and crew. He told Haldeman,
while preparing for a government reshuffle: No goddamn Harvard men,
you understand! Under no conditions. He then proceeded to hire or
promote, among others, Mr. Kissinger
(Harvard), Elliot Richardson (Har-
MAN OF THE HOUR

Nixon in 1960, just after
becoming the Republican
nominee for president.
CORBIS IMAGES
Being Nixon
By Evan Thomas
Random House, 619 pages, $35
vard), James Schlesinger (Harvard),

Caspar Weinberger (Harvard) and
George Shultz (Princeton).
Likewise Nixon spewed anti-Semitic bile (Most Jews are disloyal)
while filling his administration with
Jews like Safire, Mr. Kissinger, Leonard Garment, Arthur Burns and Herbert Stein. Much more significantly,
when Israel was invaded by Arab
armies in 1973, Nixon risked Arab and
Soviet wrath in mounting the massive airlift of supplies that allowed
the Jewish state to survive. One of
the most stirring scenes in Mr.
Thomass book is the depiction of
Nixon cutting through bureaucratic
obstacles to get the cargo planes to
Israel when they were needed most.
Do it, now, he ordered a recalcitrant Defense Department. Tell them
to send everything that can fly.
In a similar vein, Nixon engaged
in vile racist invective in private, yet
he had been the Eisenhower administrations point man on civil rights and
took the lead in steering government contracts to black businesses.
He also presided over the peaceful
desegregation of Southern schools.
When he took office, Mr. Thomas
notes, 68 percent of black children
in the South attended all-black
schools. By 1972, only 8 percent did.
Such examples demonstrate the
sharp distinction between how Nixon
talked and how he acted. He often engaged in bluster and tough-guy posturing behind closed doors, but usuallythough far from alwayshe
knew better than to act on his darker
impulses. On Aug. 29, 1969, Nixon
was having a drink at his San
Clemente estate when he got word
that Palestinians had hijacked a TWA
airplane and landed in Damascus.
Bomb the airport, Nixon barked.
Mr. Kissinger decided not to take the
president at his word, and he never
heard anything more about it. (All
the passengers were eventually released.)
Nixon would routinely cut off all
White House contact with reporters
from papers like The New York Times
and The Washington Postcut him,
freeze him, dump himand then
just as routinely forget about it, Mr.
Thomas writes. Nixon had no intention of carrying out his bloodcurdling
threats; he expected his staff to protect him from himself. One of the reasons he got into trouble with Watergate is that he hired overzealous
aides, such as John Dean and Chuck
Colson, who were willing to take him
at his word when he ranted about
what he wanted done to his political
enemies. The damage was compounded when the White House tapes
were released. Americans who had
never heard any other presidents
private conversations (and certainly
not JFKs or LBJs salty monologues)
were shocked by Nixons profane, vindictive and paranoid conversations.

One of the enduring Nixon mysteries is why someone who had such
a hard-right reputation turned out to
be one of the most liberal presidents
ever. He increased spending on Social
Security, Medicare, the arts and public broadcasting. He was, Mr. Thomas
writes, by some measures, a bigger
spender on social programs than LBJ
had been. He presided over the extension of the Voting Rights Act, the
passage of the Clean Air Act and the
creation of the White House Office of
Consumer Affairs, the Environmental
Protection Agency, the Occupational
Safety and Health Administration,
and Amtrak. He imposed wage and
price controls in an unsuccessful effort to stop inflation and, in 1973,
proposed the creation of a national
health-insurance scheme, anticipating
ObamaCare by almost four decades.
Mr. Thomas fails to provide a
compelling explanation of why Nixon
tilted so far left in his presidency. He
suggests that the president loved to
do the unexpected and that he
needed to compromise with a Democratic-controlled Congress. He also
suggests that Nixon cared little about
domestic affairs and delegated such
matters to liberal assistants. But why
did he not hire more conservative
staffers and obstruct, rather than enable, the big spenders in Congress?
What Mr. Thomas does not sufficiently emphasize is the extent to
which Nixons economic policies,
along with the Arab oil boycott,
helped create stagflation and thus
contributed to his own downfall by
tanking the economy. Nixon had
many blind spots; one of the most
damaging was his lack of economic
acumen.
Where Mr. Thomas is overly kind
to Nixon is in exaggerating his
achievements with his openings to
Beijing and Moscow, which turned
out to be more glitz than substance.
The big changes in those countries
would occur with the rises of Deng
Xiaoping and Boris Yeltsin, not with
Nixons visits. In any case, China and
Russia remain our biggest geopolitical adversaries. Nixons diplomatic
outreach did not even achieve his immediate objective of peace with
honor. North Vietnam agreed to a
peace treaty in 1973 but immediately
began violating it. A question that
Mr. Thomas does not examine is
whether, if Watergate had not happened and if Nixon had remained in
office, he would have used U.S.
military power to save South Vietnam
in 1975. But these are insignificant
failings in what is otherwise a valuable and entertaining primer on Richard Nixons life.
i
i
i
The same cannot be said of One
Man Against the World: The Tragedy

of Richard Nixon, by former New
York Times reporter Tim Weiner.
This is little more than another antiNixon hit jobas if the world needed
one more. Mr. Weiner does not attempt to sketch Nixons entire life
and focuses solely on the presidential
years.
Right at the start, Mr. Weiner
calls Nixon a monster who at his
worst, stood on the brink of madness. He scores a few good points:
expressing skepticism about the
opening to China and about the impact of Nixons domestic initiatives.
(He quotes Mr. Shultz saying that the
economic policies were in the long
run . . . a catastrophe.) But mostly he
rehashes the familiar, and often unfair, indictment of Nixon. He writes,
for example, that Washington became a combat zone when the radical
left confronted Nixon, implying that
Nixon was entirely to blame for a situation that had actually begun under
Johnson. He also writes, with considerable hyperbole, that Nixon arrogated to himself the powers of a secret police, the power to spy on
American citizens, to break into their
homes, to tap their telephones, to
burglarize their offices, as if the
bungling White House plumbers
who burgled the Watergate were the
equivalent of the East German Stasi.
Mr. Weiner describes the secret
bombing of Cambodia as a massive
attack on a neutral nation that arguably violated the laws of war. In
reality, Cambodias neutrality had already been violated by the Viet Cong,
which used its territory as a base to
attack South Vietnam. Mr. Weiner
isnt even consistent: He criticizes
Nixon for being too belligerent and
for not being belligerent enough. In
1969, North Korea shot down a U.S.
spy plane. Nixons response was a
show of naval force in the Sea of Japan. North Korea went unpunished,
Mr. Weiner laments. Nixon had frozen in the face of a Communist attack. Rest assured that if Nixon had
launched a second Korean War based
on this provocation, Mr. Weiner
would be assailing him as a crazed
militarist.
This is hardly an isolated example
of Mr. Weiner twisting history. He
also writes that Nixon launched a
war on the poor by erasing Lyndon Johnsons Great Society programs. As we have seen, Nixon actually expanded the Great Society.
When Mr. Weiner is not distorting, he
is trivializing. He mocks Vietnamization, Nixons attempt to get South
Vietnam to take responsibility for its
own defense while U.S. troops were
pulling out, by writing, in a particularly tasteless passage, that it simply
amounted to changing the color of
the anticommunist corpses on the
battlefield. Vietnamization paid
off in 1972 when South Vietnamese
ground troops assisted by American
air power repelled the Norths Easter
Offensive, but you wouldnt know it
from reading Mr. Weiners book.
One Man Against the World is a
book that will only charm inveterate
Nixon haters eager to see their prejudices reconfirmed. By contrast, Evan
Thomass Being Nixon should be
read by anyone with a more open
mind about the oddest man ever to
occupy the Oval Office. What these
divergent accounts show is that even
now, four decades after he resigned
from the presidency and more than
two decades after his death, Nixon
has not lost the power to polarize.
Mr. Boot, a senior fellow at the
Council on Foreign Relations, is
writing The Road Not Taken:
Edward Lansdale and the American
Experience in Vietnam.
BOOKS
Just Another Jersey Guy
Ally
By Michael B. Oren
BY MATTI FRIEDMAN
In Romain Garys celebrated (if
now forgotten) memoir Promise at
Dawn, the author recalls an announcement from his mother. You
are going to be a French ambassador, she tells him. It was the
1920s; Gary was a child. He and his
mother were Lithuanian Jews, and
they were nowhere near France.
But by the time he wrote his memoir in 1960, Gary was a successful
novelist with an appreciation for
the narrative power of an unlikely
dream realized. He was also a
French ambassador.
When Oren met Yitzhak

Rabin as a teenager in 1970
he had never visited Israel.
But he vowed to become its
ambassador to the U.S.
In his memoir Ally: My Journey
Across the American-Israeli Divide, Michael B. Oren remembers
traveling to Washington, D.C., with
a Zionist youth group in 1970 and
shaking hands with the Israeli ambassador, Yitzhak Rabin. Silently,
I vowed, That is what Ill be somedayIsraels ambassador to America, writes Mr. Oren. At the time,
he was a New Jersey teenager who
had never even visited Israel. What
follows is a quintessentially American story of a young person who
refused to relinquish a dream irrespective of the obstacles, Mr. Oren

writes, culminating inwell, I
wouldnt want to spoil it.
Mr. Oren, who was Israels envoy to Washington between 2009
and 2013, is the author of a superb
history of the Six-Day War and the
definitive overview of Americas involvement in the Middle East,
Power, Faith, and Fantasy. Now
living in Israel, Mr. Oren has embarked on a political career as a
member of a centrist party.
Ally is correctly read as a
statement of intent from someone
moving from diplomacy into politics; the author is, as an ambassador might say, presenting his credentials. Mr. Oren pops up in every
major event in the life of the Jewish people since 1980 or so, garners praise from others (duly
quoted), and correctly predicts the
course of the American war in Iraq,
Barack Obamas approach to the
Middle East, and much else. His
wife is heroic; his children are very
good-looking.
There is much that is interesting here about Mr. Orens years in
Washington, and many tidbits of
inside information that will satisfy
those who have followed the deterioration of American-Israeli ties
since Mr. Obama and Benjamin Netanyahu took office six years ago.
We hear about Mr. Orens frantic
attempts to put out diplomatic
fires as two leaders who dont like
each other pursue divergent policies, feud, make up, fall out again,
undo years of trust and surprise
each other with policy announcements like new West Bank construction (Israel) or the public endorsement of a key Palestinian
negotiating demand (America).
Early on, the Obama administration misidentifies settlements as

the key driver of the Israel-Palestinian conflict, placing that issue at
the center of peace talks, and Mr.
Oren watches as it derails the
talks. White House officials publicly assert Israels right to defend
itself against Iran; privately they
say Dont you dare.
The Iranians persist with their
nuclear program and their calls for
Israels destruction, publicly labeling the U.S. the root of world terrorism. Meantime the White
House continues its policy of
meaningful dialogue.
I had to swear that American
and Israeli leaders were on the
same page regarding Iran, recalls
Mr. Oren, when, in reality, they
often worked from different
books. In 2011 he watches as
President Obama drops Hosni
Mubarak of Egypt after a three-de-
cade alliance, a move that ushers

the Muslim Brotherhood into
power. When news comes that Mr.
Mubarak has been overthrown, the
author is with National Security
Council officials who exchange
high-fives.
I found the account to be a useful recap of the journey I and other
admirers of America in the region
have traveledfrom optimism
about a fresh approach on the part
of a new kind of president, to concern that the Americans are misplaying their cards, to a suspicion
that the Americans dont know
what the cards are, to the realization that they are playing Go Fish
at the poker table.
One of the most interesting tensions on display here is largely implicit. Mr. Oren is Israels ambassador to America, but hes also an
Americana Civil War buff and a
football fan. We learn that Susan
Sher, Michelle Obamas chief of
staff, is a family friend. Bruce
Springsteen signs a poster for Mr.
Oren, referring to him as another
Jersey guy. The former Israeli ambassador is an adept navigator of
U.S. politics and culture because
they are his own.
It is worth noting that the
worst years of the American-Israeli
relationship in recent memory have
been years in which the Jewish
state has been led and represented,
in a way that is unprecedented, by
Americans. Mr. Netanyahu attended high school outside Philadelphia, graduated from MIT and
speaks American English. One of
his key claims to public support in
Israel is the idea that this background makes him a good international statesman, particularly in
the U.S. Mr. Netanyahu appointed
Sit-Downs With Stand-Ups
Sick in the Head

By Judd Apatow
BY DAVE SHIFLETT
Writer, producer and director
Judd Apatow is probably best
known for movies like The 40Year-Old Virgin, Knocked Up and
Anchorman, any one of which,
given their unbuttoned sexual humor, would earn him a ticket to the
chopping block from any respectable caliphate or two thumbs down
from most mothers superior. Yet
there is more to Mr. Apatow than
his pop-culture triumphs indicate.
His collection of interviews with
comedys top tierincluding Steve
Allen, Roseanne Barr, Albert
Brooks, Mel Brooks, Louis C.K.,
Jimmy Fallon, Harold Ramis, Chris
Rock, Amy Schumer and Jerry Seinfeldreveals an intelligent man
with a searching soul.
Born to a Jewish family (as
were a large portion of his interviewees), Mr. Apatow was raised
without religion, except for being
constantly reminded by his parents
that life isnt fair. As he tells us
in the introduction to Sick in the
Head, this mantra left a bit of a
void in my life, and I looked to
comedyand the insights of comediansto fill it. He was a diligent
and resourceful searcher from early
on, using credentials from a highschool radio station to line up
interviews with the likes of Allen
and Mr. Seinfeld, who were shocked
to find that Mr. Apatow was a 15-
year-old whose station had a

broadcast power of 10 watts.
Yet the youthful Mr. Apatow was
thoughtful, and his subjects responded in kind. Allen complained
about the canned laughter on
Laugh-In and talked about Lenny
Bruce, noting that he was the first
guyfirst comedian, I should say
to speak the language of musicians,
which is now common. Even
squares now say hip and cool and
I dig. Back in 1983, Mr. Seinfeld
told Mr. Apatow that his generation
Mel Brooks believes

that Blazing Saddles
probably wouldnt get
made today, thanks to
the rabid vigilantism
of the language police.
of comics didnt seem too daring
as a group, if you compared us to
say, the sixties or the fifties.
(What daring there is today is
thwarted on college campuses by
political correctness, Mr. Seinfeld
noted in a recent podcast.)
The interviews in Sick in the
Head, which mainly took place
between 2009 and 2015, allow lots
of room for Mr. Apatows views
and thus feel more like free-ranging conversations, full of quips,
occasional nuggets of wisdom and
anecdotes. Albert Brooks admits
to writing jokes for presidential
candidate Michael Dukakis. Even-
tually, he says, he was so disenchanted with him that he prayed

for his defeat. He had a better
time, he says, hanging out with
rock star Keith Moon, despite his
habit of tossing televisions out hotel windows, and with John Lennon, whom he calls a frustrated
comedian.
Among the stand-out interviews
is the one with Mel Brooks, who Mr.
Apatow says may be responsible for
five of the top 10 comic movies ever
made. Despite Mr. Brookss standing
as a comic deity, he comes across as
a regular guy who is unimpressed
by having won an Emmy, Grammy,
Oscar and Tony. When you get older,
he explains, youre more interested
in your cholesterol. He says that
Blazing Saddles (1974) probably
couldnt get made today, because of
the rabid vigilantism of the language police. The N-word couldnt
be used as frequently and spiritlessly, he says, even though the
movie lampooned racial prejudice.
A few interviews are somewhat
flat, including those with Jon Stewart and Stephen Colbert. (Mr. Apatow: Your mom sounds wonderful. Mr. Colbert: She was a lovely
lady.) Others underscore the link
between anguish and mirth suggested in the books title, including
the one with Ms. Barr, who says
that she has had severe mental illness my whole life. When asked
what hell is she replies, This
planet.
More amusing is the discovery
that comics who have made their
names pushing the envelope can
end up sounding as if they had
been raised by nuns. Louis C.K.,

whose routines might make Blackbeard blush, sees the cellphone as
possibly of satanic origin. Its a
sickness, he says of iPhone infatuation, and he promises that his
daughter will be the last one of
her friends to get a smartphone.
He forces her friends to surrender
theirs at his front door, as if they
were submachine guns, and
watches in horror as withdrawal
symptoms set in. They itch, they
shake, they cant listen to each
other.
Mr. Rock, meanwhile, has no
time for stripper jokes. I have two
daughters. That joke is never silly.
Musician Eddie Vedder (included
because Mr. Apatow likes his
music) denounces the Disney Channel in tones reminiscent of a Focus
on the Family press release: I
challenge you to find a single character, if not just even a single line
Mr. Oren, and then chose as his replacement Ron Dermer, a Florida
native who assisted Frank Luntz as
he designed the Contract With
America.
This abets the tendency of some
Americans to see Israel less as a
foreign ally than a kind of 51st
state. After Mr. Netanyahus controversial speech to Congress earlier this year, I heard repeatedly
from many Republican supporters
not that Mr. Netanyahu was a foreign leader they liked, but rather
that he was the kind of leader they
thought America should have. They
seemed to imagine our country as
a better version of their own.
This strikes me as a doubleedged sword for Israel. Israelis are
not at all American. Our national
character is Middle Eastern. People
here think and act in ways that are
foreign to Americans, as any visitor to this country understands by
the time they reach passport control.
If presenting an American face
to Americans has a positive influence on some in the U.S., it boomerangs on others. Its easier to
judge people harshly if you think
theyre exactly like you, and we
know what familiarity breeds.
There is no doubt that Mr. Oren
is talented and deeply committed
to his adopted homeland (he gave
up his U.S. citizenship when he became ambassador). He has shown
that he can operate on Israels behalf in America. But can he operate
with similar success in the tumult
of Israeli politics? Will he be as adept at shaping history as he has
been at writing it?
Mr. Friedman, a writer based
in Jerusalem, is the author of
The Aleppo Codex.
in a half-hour show, that has anything of value and that isnt said
with an attitude other than, you
know, being snarky.
Mr. Apatow rarely lets a conversation pass without bringing up religion, often discovering voids similar to his own. Albert Brooks,
however, confesses that when his
children resisted going to temple,
he said: Let me explain something
to you: If Hitler came back, hes not
going to ask if you went to temple.
Youre already on the train. So you
might as well know who you are
and why theyre going to take you.
Mr. Seinfeld, in a second interview two decades after the first,
tells Mr. Apatow that he practices
Transcendental Meditation and
that he used to post pictures from
the Hubble telescope in the Seinfeld writing room to provide cosmic perspective. It would calm me
when I would start to think that
what I was doing was important.
Mr. Apatow replies that such vastness makes him feel insignificant
and depressed. Yet he also expresses the hope that he may one
day find traditional religious consolation, though it will require, he
says, bringing his intellect to heel.
I plan on tricking myself into believing in religion one of these
days, he tells Sarah Silverman.
Im going to pick a religion and
then hypnotize myself. All things
are surely possible for a man who
played a central role in Ron Burgundys immaculate conception.
Mr. Shiflett posts his original
music and writing at
www.daveshiflett.com
MICHAEL F. MCELROY FOR THE WALL STREET JOURNAL
IN DEPTH
Kim Hess, 51, says she cant afford insurance so hasnt signed up for coverage under the U.S. Affordable Care Act. When she had leg pain, she found a doctor willing to take cash.
Meet the Americans Who

Prefer to Go Uninsured
BY LOUISE RADNOFSKY
he Affordable Care Act has a perplexing problem: Many uninsured Americans prefer their old ways of getting
health care. For millions, arranging treatment through cash, barter and charity is
still better than paying for insurance. They
include Lisa Khechoom of Glendale, Calif.,
who refuses to buy coverage. She says she
pays a flat $35 for a doctor visit and often
substitutes prescriptions with cheaper natural remedies for herself, her husband and
their children.
Im spending money either way, but its
going to be less, says the 41-year-old, who
runs a telecom-service business with her
husband that brings them an annual income of around $77,000. For the amount
of office visits I do make, why pay $3,500
for insurance when Im not even taking advantage of it? We go to the doctor and we
pay for it. Usually I can get a better deal
than if I had insurance.
The laws penalty for not carrying insurance grows to its maximum next year and
will start at $695 for an individual, up from
$325 this year. That isnt enough to sway
Ms. Khechoom, who says paying the penalty is still preferable to buying coverage.
The persistence of holdouts like Ms.
Khechoom suggests that the U.S. healthcare landscape under the landmark 2010
health law, in many ways, will look like it

did before: A large pool of uninsured will
use a thriving parallel market for treatment, one partly subsidized by taxpayers
and the premiums of people who do buy insurance.
The laws supporters are trying to figure
out how to get these people to embrace insurance. The laws opponents say the large
numbers rejecting its central aim prove it
is foundering. Both had been waiting to see
if the health-care overhaul survived the
U.S. Supreme Court, which ruled Thursday
against plaintiffs who had argued they
shouldnt have to pay penalties for staying
uninsured.
The 2010 law, popularly known as
Obamacare, was passed on the premise
that more than 50 million people in the
U.S. needed health coverage but couldnt
get it. It aimed to fix that by requiring big
employers to offer health benefits and insurers to sell individual policies to everyone, often with government-funded discounts.
Supporters hadnt imagined what the
Congressional Budget Office has since projected: that the largest group of people
who will remain uninsuredsome 45% of
themwill be people who forgo coverage
by choice, even though the law guarantees
they can get it through a job or on their
own.
Doing Without
How the uninsured get medical care:

Pay for care out-of-pocket as needed
Use free/low-cost clinics
Go without care/medicine
38%
28
26
Buy discount medications
20
Use the emergency room
14
Negotiate medical bills down
9
Get care in another country
4
Source: Poll by PerryUndem Research/Communication for the
Robert Wood Johnson Foundation of 1,270 uninsured adults, ages
18 to 64, May 5-17;
margin of error +/ 3.4 pct. pts.
The health laws champions hadnt

counted on universal coverage because the
law excludes unauthorized immigrants and
cant do much for poor Americans who
dont enroll in Medicaid, the federal-state
program for low-income people, or dont
qualify for it.
Studies put the number who have

gained insurance as a result of the law at
16 million to 17 million. About 35 million
are still uninsured, according to the CBO,
which projects that number will fall to 26
million over the next five years.
But sign-up rates for private coverage
under the law are already slowing, and the
Obama administration has said the CBOs
forecasts for people buying insurance in
the future might be too high.
Cant fit it in
Among the people behind those slowing

numbers is Teasa Lappin of Ravenna,
Texas. Ms. Lappin, 54, is an administrator
for an insurance agent but is uninsured.
There isnt room in the annual family budget of around $40,000, she says, to cover
herself and her husband, who has Medicare
and a supplemental plan.
She says she tried earlier this year to
keep up payments on a $316-a-month
health plan with a $6,000 deductible
bought under the health law. After nearly
draining her savings to pay for it, she says,
she stopped. I was digging deeper and
deeper in a hole.
Everything I ever need I pay for in
cash, Ms. Lappin says. She has pared her
medical treatment back to a twice-annual
blood test, for which she was told she
could pay $90, versus the $180 list price an
IN DEPTH
provider is happy to take cash for the $35 primary-care visit, she says. Getting her finger
stitched when she cut it in the kitchen came
to $100. If she had to, Ms. Khechoom says she
would pay cash for a hospital visit.
Some actively like going it alone. Bob
McConnell, 60, of Fort Mill, S.C., describes
himself as an investor who is generally well
off. Married and with two children, he says he
saves money by haggling directly with doctors and labs over fees. He also objects to the
law on philosophical grounds, seeing it as an
intrusion on his privacy.
Effectively, I am self-insuring, he says.
At his local pharmacy, he uses coupons he
couldnt apply if he had a plan through the
Affordable Care Act, he says. It costs less
than the pharmacy benefit plan I was covered
under as the copays were steep and I had to
pay full retail without coupons for a couple
essential name-brand products.
Many people Mr. Perrys firm surveyed
said they valued the financial security of having health insurance, but not as much as repaying debts, building savings or repairing
homes or cars.
Kim Hess, 51, says she cant squeeze
money for a health premium out of her budget. Ms. Hess, of Concord Township, Ohio,
works two part-time jobs as a nurse, making
about $27,000 a year, she says, and her husband has an income of $21,000. One bad illness would wipe out the family financially in
any case, she says. Having health care is not
going to save my house.
She has bulging discs that have all but
crippled her in one leg, she says. She turned
to the emergency room when her pain became
excruciating and used her contact network to
find a doctor willing to take cash to order her
an MRI and write her prescriptions.
If I wasnt a nurse, I would be lost, she
says. Uninsured people really have to be
savvy.
Respect the choice
Indeed, going it alone isnt easy. Many of

the uninsured still say they dont feel all their
health needs are being met by their efforts to
cobble together care. And negotiating is
stressful. Some have been stung by big bills
that took years to pay, although that could
happen when they had insurance, too.
Some of the health laws boosters have
concluded they have to recognize the tough
straits people are in. We do have to respect
the choice, Alison Betty, a GMMB partner,
told a recent conference of enrollment activists.
About 6.7 million people had paid-up
health plans through the laws online exchanges by the end of 2014, the Obama administration says. Around 11 million more
signed up for Medicaid.
Opting Out
The health law's backers are asking people why they are forgoing health insurance.
This is what they found:
Medical services
Uninsured who are condent

they could get the following
care and manage costs
without health insurance
of uninsured adults looked at

health plans in the past 12
months.
56%
Doctor visit
53
Prescription drugs
52
Check-up
21
Emergency care
21
48
42
Preventive test/
screening
32%
34
say the increasing ne amount

would make them more likely to
get insurance.
16
Employment and nances
Paid employee
43%
Pay off debts

50%
Put money away in savings
42
Home, car, other repairs

Self-employed
21
14
Unemployed:
Looking for work 17%
Disabled 3
Retired 2
Temporarily laid off 2
Other 18
Buy health insurance
20%
New apartment, home

17
Buy a car
13
Go on vacation
10
Source: Poll by PerryUndem Research/Communication for the Robert Wood Johnson Foundation of 1,270 uninsured adults, ages 18 to 64, May
5-17; margin of error +/ 3.4 pct. pts.
There are currently 10.2 million enrollees

with private coverage for 2015, officials announced this month. That is on track with the
administrations target, which Health and Human Services Secretary Sylvia Mathews Burwell revised downward last fall from a CBO
projection that 13 million would use the exchanges this year. We are in the middle of
doing our analysis for our next open enrollment, Ms. Burwell told The Wall Street Journal. It is an evolving picture.
Some state officials say those numbers reflect the most enthusiastic people to sign up,
and that they dont expect them to grow
PATRICK T. FALLON/BLOOMBERG
insurer would have been charged.

I would love to be able to afford it, she
says of insurance. What I have to do is pray
a lot and pay a lot.
Health-law holdouts are diverse in their
income, their health and where they live, surveys show. One commonality: They have often
considered insurance and concluded they are
still better off using doctors, hospitals and
labs who take cash, negotiate prices or write
off bills. In some cases, they look to charity
clinics, overseas travel and prescription-druggiveaway programs.
They know what theyre doing, says
Mike Perry, a pollster who recently completed
a study, Understanding the Uninsured Now,
for the Robert Wood Johnson Foundation,
which supports the health law, and the GMMB
communications firm, which works with the
foundation.
Theyve been to the site, he says of
HealthCare.gov, theyve done the math and
have figured that the cost of insurance and
deductibles, weighed against discounts on
premiums and fines for going uninsured,
comes out in favor of going it alone.
Most uninsured feel they can still get
care without insurance, and pay for it, Mr.
Perry says. More than half his respondents
said they had had prescriptions, doctors visits, checkups, emergency care or preventive
tests and screenings since being uninsured
and said they were confident they could continue to do so.
Holdouts are a challenge to the Affordable
Care Act because its goal was to improve the
U.S. system of insurance-based care by guaranteeing more people bought into it. The
laws insurance changes stand to work better
if more people participateespecially younger, healthier ones.
The laws ability to revamp the health-delivery system is also affected by the flourishing parallel system that serves the uninsured.
Doctors offices typically have price lists for
cash-paying patients, and the uninsured who
use them say theyre often surprisingly reasonable. Hospitals that charge high prices to
the uninsured at times are willing to haggle
them down, figuring it is easier to take in
whatever money they can.
Some who opt out of insurance inevitably
pass the costs on, as they always have. Federal law requires emergency rooms to offer
lifesaving treatment, regardless of a patients
ability to pay, and hospitals typically operate
formal charity programs for other urgent
needs. So when some of the uninsureds bills
go unmet, they are footed by a combination
of taxes and higher prices passed along to patients with insurance.
People like Ms. Khechoom say they are
paying their own way, making responsible
choices for themselves and their families. Her
Some health-law holdouts have concluded they are still better off using doctors, hospitals and labs who take cash, negotiate prices or write off bills.
much more. All exchanges got the low-hanging fruit in that first year, says Pat Kelly,
who heads the online exchange for Idaho, one
of 13 states that fully operate their own portals for consumers to shop for insurance
plans and sort out subsidies.
Mr. Kelly says that, like a business, he is
looking to shift from an acquisition mode to
a retention mode.
All this leaves medical providers in a bind.
Some health systems are paring back their
programs for the uninsured. Detroits Henry
Ford Health System now restricts eligibility
for its charity care programsasking people
to check first if they can get coverage on their
own, but agreeing to cover urgent needs if
they missed a sign-up deadline.
One of the decisions that we did make
was that we really wanted people to sign up,
says Nancy Schlichting, the systems chief executive officer. If we continued to offer exactly the same program that we had in the
past, people would decide, well, why should I
sign up?
Other programs keep offering the same
services to the uninsuredand find they need
to expand. The Healing Hands Health Center
in Bristol, Tenn., which has provided charity
care exclusively to the working uninsured for
18 years, has just bought a bigger building.
Patients make a $10 donation for a doctor
visit and $20 for the dentist, and can do gardening or window washing instead of paying.
The clinic staff recently diagnosed diabetic
ulcers for Phillip Hurd, 48, a home-health
aide, and helped him persuade the local hospital to operate and write off the cost. The
clinic encouraged Mr. Hurd to review insurance options on HealthCare.gov. He did. After
weighing the cost, he says, he concluded he
was better off staying at Healing Hands and
paying the penalty under the health-care law
if he had to.
Sarah Phillips, the centers development
director, says she is almost halfway to raising
$4 million for a new endowment to keep the
center going for years to come.
Id rather you have insurance. As a taxpayer, if Im paying taxes for this Affordable
Care Act, I want you to take it, she says, but
we need to keep doing what were doing.What if we werent here?
FROM PAGE ONE

before the general elections, which
are expected to be the freest in decades and will be the first under the
countrys reformist, nominally civilian government.
In November, the influential Parliament speaker, Shwe Mann, said
any changes to the constitution
wouldnt be considered until after
the fall elections.
Thursday marked the end of a
three-day debate on amendments to
the constitution, drafted under
Myanmars previous ruling junta.
Parliament voted against changing
the two most-controversial elements
of the document: a clause that guarantees military generals a quarter of
seats in Parliament and another that
blocks anyone with foreign family
members from becoming president.
The latter clause, 59f, is widely
believed to have been written with
Ms. Suu Kyi in mind. The opposition
leader and Nobel laureate is the
widow of a Briton and has two foreign-born sons.
Ms. Suu Kyi and her National
League for Democracy party said
they have steadily lost faith in con-
stitutional change as a path to her

becoming president. They have focused instead on campaigning and
winning over Myanmar voters.
The party enjoys popularity
across most of the country and in
by-elections held in 2012, won 43
out of 44 seats available.
Speaking on June 21 at the conclusion of a two-day meeting of executives from her party, Ms. Suu Kyi
said the NLD must aim for a landslide victory in the coming vote.
If the party controls most of the
available seats in Parliament, it
would be able to form the government and influence Myanmars transition and politics more than ever
beforeincluding potentially changing the constitution at a later date.
Neither clause voted down
Thursday received more than threequarters of the vote, the prerequisite for clauses to move on to a nationwide referendum, where they
potentially could be altered.
Military generals, who often vote
as a bloc, likely voted against
changing these clauses, exercising
their veto power against any change
to the constitution.
EUROPEAN PRESSPHOTO AGENCY
Myanmar Lawmakers
Reject Amendments
Aung San Suu Kyi speaks during a news conference at the Parliament building in Naypyitaw, Myanmar, on Thursday.
One of the proposed amendments voted down would have lowered the percentage of lawmakers
required to amend the constitution,
reducing it to 70% from 75%effectively removing the militarys veto.
The parliamentary decision, analysts say, reaffirms that Ms. Suu
Kyis presidential ambitions will be
hindered as long as Myanmars military, which ruled the country with
an iron fist for six decades and kept
the democracy leader under house
arrest until late 2010, retains its
grip over politics.
It has been clear for some time
that an Aung San Suu Kyi presi-
dency is a red line for the military,

said Richard Horsey, an independent
political analyst based in Yangon. It
has been clear for a while now and
is consistent with their previous
statements.
Speaking at the debate on constitutional amendments on Wednesday, a military member of Parliament, Tin Soe, argued that 59f, the
clause blocking Ms. Suu Kyis presidency, shouldnt be changed because
otherwise foreigners could influence
politics. If family members of a
president are loyal to another country, he said, that country could be
more easily controlled by foreign in-
terests.
Parliament on Thursday, though,
did vote to change one clause in the
constitution: 59d, which requires a
potential presidential candidate
have military experience before being considered for the top post. The
clause stipulates a president be
well acquainted with affairs of [the
country], including military affairs.
The amendment suggests the wording be changed from military affairs to defense.
Even for this amendment to
pass, a nationwide referendum on
the change would have to be held.
No time frame has been set for this.
On Samsungs Turf, Activist Fund Tries to Block Merger

are signs the face-off is encouraging
domestic shareholders to become
more assertive.
Elliott, meanwhile, is taking on
one of South Koreas best-known
families on its home soil, attempting
to navigate a system of regulations
and shareholder practices that has
ensnared overseas investors such as
Carl Icahn, Lone Star Funds and
Sovereign Asset Management.
Each emerged from the market
with lucrative returns, though not
without a public bruising that has
earned South Korea a reputation as
an inhospitable destination for foreign investors. South Korean government officials maintain the country treats domestic and foreign
investors equally.
The Lee family hasnt spoken
publicly about the merger and declined to comment through a
spokesman for this article.
In a sign the dispute is embold-
ening domestic shareholders, Korean

shareholders in Samsung C&T have
huddled in online chat forums to
weigh the relative merits of the
merger proposal, vowing independence from both Elliott and Samsung. Earlier this week, dozens of
them filed court petitions arguing
the deal unfairly undervalues Samsung C&T.
Koreans are starting to think
more like capitalists than as nationalists, said John Lee, who manages
a $2.3 billion corporate-governancefocused fund for domestic firm Meritz Asset Management. In the past,
nobody needed to ask whether it
could go through.
Both sides are lobbying shareholders ahead of the July 17 vote.
Under the deal, Samsung C&T shareholders would receive 0.35 Cheil Industries share for each of their existing shares.
Elliott argues that is a poor deal.
Samsung C&Ts stakes in three Sam-
sung affiliatesincluding crown

jewel Samsung Electronics Co.
were valued at 11.9 trillion won
($10.7 billion) when the merger was
announced in May, exceeding Samsung C&Ts $7.3 billion market capitalization.
Samsung C&T, which built
Dubais Burj Khalifa and Taiwans
Taipei 101, argues the deal is fair for
shareholders. It says the companys
prospects as a stand-alone entity in
the slowing construction industry
are bleak, and it is critical to seek
synergies with fashion-and-lifestyle
company Cheil Industries.
It is unclear how many others
might oppose the merger proposal,
which needs two-thirds approval at
the July shareholders meeting to
pass.
In recent days, Samsung C&T has
hired Goldman Sachs Group Inc. and
Credit Suisse Group AG and sent its
chief executive to Hong Kong to
meet with investors, people familiar
with the matter say.

Even if the deal goes through, analysts say the family still needs to
make several other moves to cement
the younger Mr. Lees control of
Samsung Electronics, the key part of
the conglomerate. As it continues to
reshape its empire, it could face increasing scrutiny and challenges
from outside shareholders.
Hedge funds are going to be
watching every move, said Kim
Woochan, a professor of finance at
Korea University who says he has
been peppered with calls from foreign investors interested in Samsungs restructuring.
Elliott, which manages $26 billion, is well known for its swashbuckling attitude. Founded in 1977
by Paul E. Singer, the firm is best
known for its yearslong campaign
against Argentinas governmentan
effort that led to international court
orders and hampered the countrys
ability to sell new debt.
After the Samsung C&T deal was

announced, Elliott, which owned
4.9% of Samsung C&T, snapped up a
further 2.2% in an apparent move to
increase its bargaining power. It also
sought its court injunction.
Days later, Samsung C&T sold all
of its treasury shares to KCC Corp.,
a construction-materials company.
That gave KCC a 6% stake in Samsung C&T, a move seen as trying to
build support for the merger plan.
Under South Korean law, Samsung
was barred from voting its treasury
shares.
Now that it has sold them, KCC
will be able to vote them in Samsungs favor, though Elliott is seeking a separate injunction to block
KCC from voting on the merger proposal. A spokesman for KCC declined
to comment.
A court will rule on both Elliott
motions next week.
David Benoit in New York
contributed this article.
WORLD NEWS
Greeces Bank Troubles Leave Premier Few Options

BY CHARLES FORELLE
ATHENSGreeces increasingly
fragile banking system is limiting
Prime Minister Alexis Tsiprass
room to bargain for better bailout
terms and, more than anything, has
shoved him toward compromise,
Greek officials say.
As nervous Greek savers continue to pull their money from
banks, the countrys four major
lenders are being sustained by a
life-support drip of emergency liquidity reviewed daily by the European Central Bank. If the ECB
chooses to end that assistance,
Greece would be forced overnight
into a perilous regime of capital
controls.
Their support is crucial for the
Greek banks to stay alive, says Re-
gina Argenio, an analyst at Standard

& Poors.
Short on cash, and with nowhere
else to turn, Greek banks have had
to rely on the central bank for
money to give to fleeing depositors.
Bankers in Athens say news that
Mr. Tsipras had proposed a compromise Monday has helped to stem the
flight of deposits, which they say
reached more than 1.5 billion
($1.68 billion) on Friday. Deposit
withdrawals fell to around a third of
that on Tuesday and appeared to remain at that lower pace Wednesday.
But a breakdown in negotiations
could quicken the pace anew. On
Thursday, eurozone finance ministers concluded a meeting to give
Athens and the institutions overseeing its bailout more time to agree
on conditions, and negotiations on
desperately needed aid looked set to

stretch into the weekend.
Few expect the ECB to shut off
the lifeline while the talks continue.
But it is unclear what the central
bank would do if there is no deal
when the eurozones portion of
Greeces 245 billion bailout program officially expires on Tuesday.
Getting Greeks to come back to
the banks wont be easy. Konstantinos Drakopoulos, who owns a clothing store in Athenss ritzy Kolonaki
district, got frightened in December,
when it became clear that Greece
would have new elections that could
open the door for the confrontational left-wing Syriza party.
I took my money and I sent it to
other countries, said Mr. Drakopoulos, standing in his shop on a warm
late afternoon. His racks were full of
loose, pastel dresses. He said he

keeps in Greece only the money he
needs to operate his business and
isnt planning to repatriate the rest
soon. As long as we have this government, we will have the crisis,
Mr. Drakopoulos said. Communism
is deadit is for Russia, for Cuba,
not for Greece.
Besides international transfers,
bank figures suggest there has been
a huge jump in cash withdrawals;
the chief executive of Piraeus Bank,
one of the four major banks, estimated in an investor conference call
last month that an amount equivalent to about a quarter of Greeces
annual economic output is circulating in the country as cash.
Some Greeks are using safe-deposit boxes as their banks, putting
in and taking out bills as needed.
That way, if banks are shut or capital controls are instituted, they will
have money on hand.
To replace the deposits, banks
have had nowhere to turn but the
ECB. In the worsened climate, banks
now cant sell bonds. They have also
lost access to repo markets in
which they could receive cash in exchange for some of their less-liquid
assets. They lost all the international exposure they had developed
since the end of 2012, said Ms. Argenio at Standard & Poors.
That means banks must lure
back domestic depositors if they
want to reduce their dependence on
the central bank. But bankers say
they need a dealand soonfor
that to happen.
Viktoria Dendrinou
As of 12 p.m. ET
Euro 1.1197 g 0.07%
Yen/US$ 123.64 g 0.18%
Yen/A$ 95.69 0.28%
Oil 59.86 g 0.68%
Gold 1173.10 0.04%
Takata CEO Will Study

Setting Up Air-Bag Fund
3-month Libor 0.28200
China Tips Its Cap

To More Bank Lending
BUSINESS & FINANCE 21
Friday - Sunday, June 26 - 28, 2015
10-year Treasury g 12/32 yield 2.414%
HEARD ON THE STREET 32
THE WA L L STR E ET JOU RNAL.
asia.WSJ.com
Australian Housing Loans Get Riskier
BY ROBB M. STEWART
AND VERA SPROTHEN
MELBOURNE, AustraliaWhen
Ben Oliver and his partner Tamzin
Dimmock went to their bank for a
home loan this year, they received a
surprisingly generous offer. Their
bank calculated it could lend them
about 850,000 Australian dollars, or
about US$655,000, far more than
they needed to buy their two-bedroom Melbourne apartment.
The pair put no money down on
the apartment, using family assets
as a security. They declined the full
amount offered by the bank, but
they did roll in a car loan and
credit-card debt to take advantage
of record-low interest rates.
Such aggressive lending practicesincluding offering interestonly loans with little or no down
paymentare starting to raise a red
flag with credit-rating firms, regulators and even Australias central
bank. Their concern is that frothy
house prices, combined with a rising
Risky Business?
Regulators are concerned Australias banks could be vulnerable to a housing-market correction, as housing-related debt
continues to climb.
Household debt as a percentage of
annual income
200%
Australia
150
U.K.
100
50
2000
05
10
52%
50
48
46
U.S.
44
Euro
area
42
14
40
2011
12
13
14
15
Molycorp Inc. filed for bankruptcy-court protection on Thursday, as the long-struggling rareearths miner turned a page on one
of the most dramatic commodities
busts in recent years.
The only U.S. miner and producer of rare-earth elements15 elements used as niche ingredients in
magnets, batteries, catalytic converters and other high-tech productssaid it had secured an agreement with creditors to restructure
its $1.7 billion in debt. The deal also
provides $225 million in new financing to continue operations.
Molycorp and 20 subsidiaries
filed chapter 11 petitions in the U.S.
Bankruptcy Court in Wilmington, Del.
The company said it expects to have
a court-approved restructuring plan
before the end of this year.
The filing was expected. Fueled
by restrictions on exports of rare
earths by China, the worlds dominant supplier, Molycorps market
value rocketed up to over $6 billion
five years ago. But China then relaxed its rules, increasing supplies,
and battery and magnet makers
found alternatives to their use of
rare earths. Molycorp went into a
long slide. It hasnt turned a profit
since 2011.
The companys facilities in the
U.S. and around the world, including
its flagship Mountain Pass mine in
the California desert, will continue
operating as usual, said Chief Executive Officer Geoff Bedford. Our
operations in Europe and Asia are
Westpac
71%
Commonwealth
Bank of Australia
70
Australia &
New Zealand
Banking Group
60
National
Australia Bank
58
Sources: Barclays (debt); Australian Bureau of Statistics (investor loans); Australian Prudential Regulation Authority (housing loans)
debt burden, may leave Australias

banks vulnerable to a housing-market correction as a long mining
boom ends.
Nearly nine years after a debtfueled housing bubble burst in the
U.S., helping tip the global economy

into a recession it is still recovering
from, some analysts worry Australia
could have a bank crisis of its own.
Banks in Australia appear to be
among the sturdiest in the world,
Rare-Earths Miner
Files for Protection
BY JOHN W. MILLER
AND ANJIE ZHENG
Housing loans as a percentage of

total loans, April 2015
Investor share of total new loans
not a part of todays filings, and

these businesses are cash-flow positive and play a vital role in many
key industries world-wide.
Rare-earth elements are considered a strategic resource because
they are used in military electronics.
The U.S. government, however, has
a large stockpile, and currently isnt
planning to bail out Molycorp, a U.S.
Department of Defense official has
said.
In 2010, Molycorpa former unit
of Chevron Corp. bought by privateequity firms in 2008 for $80 millionraised $394 million in a public
offering. Then, as prices and its
stock-market value soared, Molycorp overextended and took on debt.
It committed to an expansion at the
California mine, which after overruns cost $1.5 billion, and bought
Neo Material Technologies Inc., a
Toronto-based rare-earths processing firm, for $1.3 billion.
Demand dried up as customers
found alternatives, and prices collapsed. Japanese companies invested
over $1 billion during the 2011 shortage to come up with alternatives to
rare earths. Ford Motor Co., for example, cut in half its use of dysprosium, which as an alloy can increase
the heat resistance of a magnet.
Molycorp says oversupply has
been exacerbated by illegal mining
in China. Chinese officials have
made no secret of the fact that the
industry has long been plagued by
illegal production and trade.
Because rare earths are used in
tiny quantities, it doesnt take much
movement in supply or demand for
having sidestepped the financial crisis that drove many of their overseas peers into bankruptcy. The four
biggest lendersCommonwealth
Bank of Australia Ltd., Westpac
Banking Corp., Australia & New
Zealand Banking Group Ltd. and

National Australia Bank Ltd.
boast some of the highest credit ratings globally.
But with the tepid economy
keeping a lid on other forms of investment, mortgage lending is increasingly important to Australias
banks. Home loans now account for
nearly two-thirds of new lending, up
from 53% in 2008, official data
show. In contrast, residential loans
accounted for 38% of U.S. bank lending and just 13% in the U.K. in 2009,
according to the International Monetary Fund. Both countries were
burned by sharp drops in house
prices during the financial crisis.
Unlike in the U.S., Australian
banks offer recourse loans, meaning
that although the property is collateral for the loan, the borrower has
to give a personal guarantee of repayment.
Still, the central bank has
warned that any sudden collapse in
home prices risks destabilizing the
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BUSINESS & FINANCE
High Tech Rethinks Water Use for Cooling

Silicon Valleys appetite for data
is well known. Its thirst is less understood.
Amid record drought in California and other parts of the American
West, the machines that support everything from Instagram photos to
Netflix movie marathons require
substantial quantities of water for
the air-conditioning systems needed
to keep the servers cool.
California has more than 800 data
centers, the most of any state, according to an estimate by tech consultancy 451 Research LLC that excludes smaller computer rooms that
businesses use. Based on that and estimates for water use, the states
data centers consume roughly as
much water in a year as 158,000
Olympic sized swimming pools.
At a time when California authorities are telling waiters not to automatically offer water, data centers
water use has largely escaped scrutiny. While data centers water needs
are small relative to agriculture and
power producers, their growth is entangling the states most successful
business with its most pressing environmental problem.
Industry efforts at greater efficiency so far have mainly focused
on power. Some data center operators are looking for ways to reduce
their demands on municipal water
systems, by reusing dirty water or
harvesting rainwater. Others are
setting up giant storage tanks or
digging their own wells.
Its not like weve ignored water, said Patrick Flynn, head of sustainability efforts for IO Data Centers LLC, which operates two data
center complexes in Arizona. It just
turns out that the lowest hanging
fruit is investing in energy efficiency.
Data centers rely heavily on air
conditioning for cooling their thousands of computers and storage devices, requiring lots of electricity
and water. The biggest of these
computer farms are growing 4% a
year, 451 Research says. Emerson
Electric Co., which is a supplier of
cooling equipment to data centers,
expects operators to add the equivalent of three midsize centers a year
in California.
Every new data center brings a
thirsty customer. A midsize 15megawatt center uses between 80
million and 130 million gallons of
water a year for cooling, according
to industry estimates. At the high
end of that range, each new facility
is akin to planting 100 acres of almond trees, adding three hospitals
MEG ROUSSOS/BLOOMBERG NEWS
BY DREW FITZGERALD
Data centers use substantial amounts of water for air conditioning. Facebooks
center in Prineville, Ore., has a cooling system that uses some reclaimed water.
or opening more than two 18-hole
golf courses.
In California, Gov. Jerry Brown
ordered cities to cut annual water
use by 25%. Businesses have been
largely spared from the cutbacks.
State officials say restrictions are
intended to conserve without hurting the economy.
Data centers arent the states
biggest water users. But they generally require municipally-provided
clean, treated water like restaurants
and hotels. Agriculture, which accounts for roughly 80% of water use
in the state, can use untreated water
from streams and lakes. Electric
utilities, the states second largest
water consumer, also can sometimes
use salt water.
In Bluffdale, Utah, a 200-acre
National Security Agency data center campus will use more water than
the entire town of 8,000 when it
reaches full capacity, according to
initial design documents. It is on
track to use a 10th of the towns total water use this year, its third year
in operation.
Water use is just now emerging as
a central consideration for data center operators. Microsoft Corp., which

runs more than 100 data centers
globally, turns off its cooling units
when outside temperatures allow as
a way to reduce water use, according
to a company spokeswoman. Google
Inc. tries to harvest water from rain,
canals and other non-drinkable
sources to reduce its footprint.
At its 18 Bay Area data centers,
Digital Realty Trust Inc., which runs
several dozen centers around the
world, has set an internal goal to
eventually cut its water use by a
quarter. The company struck deals
with local utilities to use recycled
wastewater where available, but
that gray water isnt always available. In Los Angeles, for instance, a
new recycled water pipeline could
take years to reach most of the regions downtown data centers.
Its going to be a challenge,
Aaron Binkley, Digital Realtys director of sustainability programs.
In Sacramento, Calif., NTT Communications Corp.s RagingWire data
center, which houses systems for major websites including Twitter Inc.,
Waterlogged
A midsize data center uses roughly as much water as about 100 acres of almond
trees or three average hospitals, and more than two 18-hole golf courses.
Approximate annual water usage, in gallons*
Data Center
(15 megawatt)
130M
Hospital
(3 buildings)
130M
Almond orchard
(100 acres)
115M
Golf Courses
(2 18-hole courses)
100M
*Use varies depending on climate and other factors

Sources: California Department of Water Resources (orchards); James Hamilton (data centers); U.S. Department
of Energy (hospitals); Golf Course Superintendents Association of America (golf courses)
has drilled wells to secure cheap water and to have a second source
should its municipal supply be interrupted. Dupont Fabros Technology
Inc., the owner of a 250,000 square
foot data center in Santa Clara, Calif.,
has built two half-million gallon water storage tanks as back up to make
sure it doesnt run dry.
Other conservation efforts are
hamstrung by worries about website
failures. A cool climate is considered
safer, executives say. If youre a
CIO, what you get your ass kicked
for is downtime, said Chris Yetman,
chief operating officer at Vantage

Data Centers.
Some data centers rely on waterless cooling units, though experts
say the wrong technology can backfire by pulling more power from the
electrical grid, undermining the industrys more pressing effort to cut
electricity use.
Water is cheaper than electricity, said Jack Pouchet, Emersons
vice president of business development. If they dont start charging
more for water, theres going to be
a water shortage for everybody.
INDEX TO BUSINESSES AND PEOPLE

Businesses
This index of businesses

mentioned in todays
issue of The Wall Street
Journal is intended to
include all significant
reference to companies.
First reference to the
companies appears in
bold face type in all
articles except those
on page one and the
editorial pages.
Airbus Group SE...........23
Anheuser-Busch
InBev..........................22
Australia & New Zealand
Banking Group...........19
Bank of America...........24
BMW.............................22
Boeing...........................23
Cheil Industries .............. 1
Coatue Management....21
Commonwealth Bank
of Australia ............... 19
Constellation Brands....22
Diageo...........................22
Didi Kuaidi Joint...........21
Dupont Fabros
Technology.................20
Elliott Advisors...............1
Emerson Electric .......... 20
Ford Motor......................6
Gannett.........................25
Google......................20,23
Heineken.......................22
Honda Motor.................21
Hon Hai Precision
Industry ..................... 21
Humana.........................26
IAC/InterActiveCorp..23,26
IO Data Centers............20
J.P. Morgan Chase........24
Kozyak Tropin &
Throckmorton............22
Manitowoc....................25
McDonald's ................... 22
Microsoft.......................20
MillerCoors....................22
Molycorp ....................... 19
MSNBC..........................22
National Australia
Bank...........................19
News Corp.....................22
NTT Communications...20
Samsung C&T ................. 1
Samsung
Electronics..............1,18
Securities and Futures
Commission...............27
Sharp.............................21
Sovereign Asset
Management..............18
Takata ........................... 21
TKJ ................................ 21
Toyota Motor................21
21st Century Fox..........22
Uber Technologies........21
UnitedHealth Group ..... 26
Vantage Data Centers..20
Wells Fargo...................24
Westpac Banking..........19
People
This index lists the

names of businesspeople and government
regulators who receive
significant mention in
Todays Journal.
Ailes, Roger..................22
Argenio, Regina............18
Bedford, Geoff..............19
Buffett, Warren............25
Condon, Tim..................25
Diller, Barry .................. 23
Easterbrook, Steve.......22
Flynn, Patrick................20
Gou, Terry.....................21
Hastings, Reed.............25
Icahn, Brett...................25
Icahn, Carl.....................25
Liu Dongliang................25
Kennedy, Kevin.............21
Marino, Pete.................22
Lee Jae-yong...................1
Mosher, Randy..............22
Lee, John.......................18
Muilenburg, Dennis......23
Lee Kun-hee....................1
Murdoch, James...........22
Levin, Joey....................23
Murdoch, Lachlan.........22
Ozan, Kevin...................22
Pouchet, Jack................20
Ronzetti, Tucker...........22
Schechter, David...........25
Singer, Paul..............18,25
Takada, Shigehisa.........21
Yellen, Janet.................25
Corrections Amplifications
The attempt by scores of migrants to board trucks in Calais,
France, headed to Britain on June 23 has highlighted the issue of
mass migration to Europe from North Africa and nations in the
Middle East, an issue that was set to be a key topic of discussion
when European Union leaders met for a two-day summit in Brussels late this week. A World News article on Thursday incorrectly
said U.K. Prime Minister David Cameron said the attempt highlighted the issue.
BUSINESS & FINANCE
BY RICK CAREW
ZUMA PRESS
HONG KONGChinas homegrown competitor to Uber Technologies Inc. is boosting the stakes
in its fundraising battle with the
U.S. ride-hailing company.
Didi Kuaidi Joint Co. of China
has set a target for its latest round
of fundraising of roughly $2 billionmore than it had earlier
plannedto compete with Ubers
own fundraising efforts in China,
according to people familiar with
the situation.
The terms of the new fundraising, which is expected to be completed in the coming weeks, would
give Didi Kuaidi a valuation of
The ride-hailing app Didi Kuaidi is

embarking on a new funding round.
about $15 billion after including
the fresh capital, these people said.
Initially, the Chinese company had
considered raising as much as $1.5
billion, but strong demand from
existing and new investors led it to
increase the offering, one of the
people said.
Chinas ride-hailing market is a
two-horse race. On Monday, Uber
started formal fundraising specifically for its China operation,
UberChina. The U.S. company is
also raising money from big Chinese fund manager Hillhouse Capital Group in a convertible-bond
deal based on a discount to its future initial public offering price,
according to people familiar with
the situation. Beijing-based Hillhouse Capital, which is also an in-
vestor in Didi Kuaidi, is investing

in Ubers global operations, not its
local China operation.
Investors across the globe have
been eager to put money into fastgrowing Chinese startups, and the
Didi Kuaidi fundraising would be
among the countrys largest
startup-funding deals to date. Last
year, Chinese smartphone maker
Xiaomi Corp. raised just over $1
billion from investors; that put its
valuation at more than $46 billion,
making it the worlds most valuable startup at the time. Ubers
fundraising for its global parent
company is expected to value it at
$50 billion or more.
Didi Kuaidi and UberChina, both
of which spend huge sums on subsidies to entice drivers and riders,
want to raise fresh capital to lure
traffic to their services. Didi
Kuaidis backers include Chinese ecommerce company Alibaba Group
Holding Ltd. and Tencent Holdings
Ltd. Uber formed a strategic partnership with Chinese search engine
Baidu Inc. last year that included
an investment in Ubers China operations. Ubers service in China
uses Baidus mapping and payments service.
Didi Kuaidi is making a push to
broaden its offering to Chinese riders, throwing resources into expanding its premium car services
and a carpooling offering. Both
have been strengths of Uber globally. Didi Kuaidi, by contrast, previously focused mostly on the taxi
market. It was formed when
Chinas two primary taxi-hailing
apps, Didi Dache and Kuaidi Dache,
merged in February in a $6 billion
deal.
While there has been strong demand for the latest Didi Kuaidi
funding round, some early investors have taken money off the table
after racking up large gains. On
Wednesday, New York-listed eHi
Car Services Ltd. said it sold its
stake, bought in April of last year
for $25 million, to Eagle Legend
Global Ltd. for $161 million. EHi
Car Services plans to use that
profit to expand its fleet of rental
cars. Earlier this year, U.S. investment firm Coatue Management
LLC led a consortium of investors
that bought about $600 million of
shares from the management team
of Kuaidi Dache.
REUTERS
Paris Roads Blocked by Uber Protest
Scores of taxi drivers snarled traffic around Paris on Thursday to protest the
expansion of Uber Technologies Inc. and its network of nonprofessional drivers.
The unrest was one of several demonstrations taxi drivers mounted in cities
across France that targeted the U.S.-based companys car-hailing service.
Takata CEO Will Study

SettingUpAir-BagFund
BY YOKO KUBOTA
AND ERIC PFANNER
TOKYOThe reclusive chief executive of Takata Corp., the Japanese maker of air bags linked to at
least eight deaths world-wide, made
a long-awaited public appearance on
Thursday, saying the company was
studying the possibility of a fund to
compensate victims.
U.S. Sen. Richard Blumenthal (D.,
Conn.) this week called on the company to establish such a fund, raising pressure on Takata as it confronts the biggest automotive recall
in U.S. history, affecting about 32
million vehicles. Kevin Kennedy,
Takatas North American executive
vice president, said at the hearing
that he couldnt commit to establish
such a fund. Sen. Blumenthal asked
Mr. Kennedy to give the congressional panel an answer in two weeks
on the matter.
At his first news conference ever,
CEO Shigehisa Takada, 49 years old,
apologized over the recalls, and for
not speaking to the media until now.
The recalls began in 2008, when he
was president of the company, and
escalated in mid-2014, after he became CEO and chairman.
I felt that the priority of my job
is to ensure our products are safe,
he said. I regret that I havent offered enough explanations, he
added, saying he wouldnt step
down because he wants to resolve
the problem.
Mr. Takada said a fund was only
one option the company was considering for compensating victims,
adding that he wouldnt promise
any specific measure.
Mr. Takada has apologized earlier, at last years shareholder meeting and in press statements.
Mr. Takada bowed deeply to
open the news conference, which
followed the companys annual
shareholders meeting in Tokyo. He
spent much of the subsequent hourand-a-half staring resolutely ahead
as aides explained the details of the
recall, which until recently has attracted far less attention in the
companys domestic market than in
the U.S., where government pres-
REUTERS
Chinese Uber Rival

Aims for $2 Billion
Takata CEO Shigehisa Takata publicly apologized for safety problems in Tokyo.
sure has kept the company in the
spotlight.
Mr. Takada and other executives
offered little information to clear up
the uncertainty over what, exactly,
is causing Takata-made air bags to
explode, or how high Takatas recallrelated costs might climb.
Takata stuck with its 20 billion
($161.8 million) net profit outlook
for this financial year, repeating it
cant reasonably estimate how much
it would end up paying. So far, the
banks it deals with havent expressed concerns about Takatas financial position, Mr. Takada said.
But recalls and associated costs
to replace the inflatersthe components that contain an explosive
chemical that deploys air bags in a
crashcontinue to expand.
In May, Takata agreed with the
U.S. National Highway Traffic Safety
Administration to nearly double recalls in the U.S.
On Thursday, three Japanese
auto makers including Toyota Motor Corp. recalled around an additional 3 million vehicles world-wide,
while in South Korea, Honda Motor
Co. and three other auto makers and
importers were ordered by the government to recall more than 24,000
vehicles.
We will be discussing the costs
with auto makers, said Chief Financial Officer Yoichiro Nomura.
Mr. Takadas absence from public

view, until now, has prompted questions about whether he has been
fully engaged with the air-bag problem. Mr. Takada, the grandson of
the companys founder, took over as
the head of Takata in 2011 after the
death of his father, Juichiro, who
developed Takata into one of the
worlds biggest automotive safety
parts manufacturers.
Mr. Takadas mother Akiko, a
former executive who is now an adviser, has been actively involved in
some of Takatas operations, two
people knowledgeable about the
matter said.
But Mr. Takada said Thursday
that his mother wasnt making key
decisions related to the recalls. That
role, he said, was being filled by six
top executives, including himself.
Mr. Takada and his mother are
the biggest individual shareholders
at Takata, controlling about 2.9%
and 2.1% respectively, as of March.
Also, 52.1% of Takata shares were
held by TKJ Co., a Takada family investment vehicle.
Takata has produced roughly 200
million inflaters to date containing
ammonium nitrate, said Hiroshi Shimizu, a senior executive in charge of
quality. Takata believes the mix is
safe, Mr. Takada said.
In-Soo Nam in Seoul
Foxconn Still Interested in Sharp

BY LORRAINE LUK
TAIPEIHon Hai Precision Industry Co., the primary assembler

of Apple products, is considering
Chinese listings for its mainlandbased units over the next three to
five years, its chairman said on
Thursday.
At an annual shareholder meeting at Hon Hais headquarters in Taipei, Chairman Terry Gou also said
the company remains interested in
investing in Japans Sharp Corp. A
high-profile deal unraveled in 2013
after dismal earnings reports sent
Sharps shares plunging.
In March 2012, Hon Hai, commonly known as Foxconn Technology Group, agreed to buy a 10%
stake in the cash-strapped Japanese
company for 66.9 billion ($540.1
million). Although the deal didnt
come to fruition, Foxconn has since
been wooing the Japanese press as
it tries to reach a pact with Sharp, a
pioneer in liquid-crystal-display
technology used in smartphones and

televisions.
We will wait until Sharps management and the Japanese government feel comfortable with an investment, said Mr. Gou. Sharps
employees welcome our investment
as we turned around the Sakai plant
operations and gave them bonuses.
Mr. Gou has previously spotlighted his success in turning around
Sharps operations at Sakai, an advanced panel-making plant in which
he personally acquired a 50% stake
in 2012.
Japanese tech companies are
our friends. We can support each
other in competition with Samsung
and other South Korean tech firms,
he added.
Hon Hai has made its name in the
manufacturing industry as it assembles the majority of the worlds consumer electronics, including Apple
Inc.s iPhones and iPads, Sony
Corp.s PlayStation game consoles
and Sharp TVs. But the company
also makes many sophisticated hightech components used in automobiles and automated teller machines.
In the past two years, Hon Hai
has spun off several operations including industrial motherboard
maker Ennoconn Corp., the casing
and mechanical component unit
Eson Precision, the light-emitting diode component unit Advanced Optoelectronic and wireless chip packaging unit ShunShin Technology.
On Thursday, shareholders also
approved the companys plan to increase its 2014 dividend to 3.80 New
Taiwan dollars a share from 1.80
New Taiwan dollars, or to 12 U.S.
cents from 6 U.S. cents.
The payout represents 43% of
profit, up from 22% in 2013 but still
below the 60% average for Taiwan
tech companies. BlackRock Inc. privately called on Mr. Gou to increase
the dividend by tapping the companys cash pile of roughly $22 billion, The Wall Street Journal reported in December.
CORPORATE NEWS
News,
McDonalds New Tack in Taiwan Fox
Roger Ailes
BEIJINGMcDonalds Corp. is
aiming to sell its stores in Taiwan to
a franchise operator and expand its
franchise business in China, a
spokesman said Thursday, as the
fast-food chain tries to turn around
its fortunes in Asia and cut costs
globally.
McDonalds uses franchisees and
licensees in its more mature markets, like the U.S. But elsewhere it
has largely relied on a more costly
model of operating its own stores to
oversee their quality and growth.
The Oak Brook, Ill., companys
new chief executive, Steve Easter-
brook, has been overhauling its U.S.

business, including selling more restaurants to franchises and eliminating management layers. Now he is
turning to the international market
in an effort to boost sales and profits.
Mr. Easterbrook has said global
franchise ownership, including the
U.S., will expand to 90% from 81%
currently, and that the company will
sell 3,500 restaurants to franchisees
by 2018.
McDonalds is looking for a franchise candidate to run its 413 Taiwan stores, which it has operated itself since entering the market more
than three decades ago, the spokes-
year in Japan, where McDonalds

has also faced food contamination
scares, and in China declined 32%
and 4.8%, respectively, in the first
quarter, Kevin Ozan, McDonalds
chief financial officer, said in an
April earnings call.
McDonalds says it is still aiming
to pull back consumers that it lost
last year.
Executives also said previously
that McDonalds would close 700
underperforming stores primarily in
Japan, China and the U.S.
Mr. Easterbrook said the company expects China sales to return
to a normalized level of performance by midyear.
man said.
For more than two decades
McDonalds operated all its stores in
China, until 2008 when it turned to
franchising.
By the end of last year, around
20% of its 2,000-plus stores in
China were franchised, and the company plans to continue increasing
the licensees and franchisees, the
spokesman said.
Franchising is about growth and
economic efficiency, he said.
The companys sales in Asia tumbled after problems with one of its
suppliers last year affected its available menu items.
Sales at stores open more than a
In U.S., Trouble Brews for Imported Beers

BY JACOB GERSHMAN
AND TRIPP MICKLE
If you thought your favorite beer

was an import, think again. It may
have been brewed in St. Louisor
Latrobe, Pa., or Fort Worth, Texas.
And, if that beer is Becks, you
might soon be eligible for a refund.
The refundof as much as $50
for Becks drinkers who can produce
valid receiptsis part of the settlement of a class-action lawsuit claiming that the beers maker, AnheuserBusch InBev NV, tricked American
consumers into believing that the
beer was an authentic German pilsner, when it is really brewed in St.
Louis.
Even consumers who dont have
receipts may be entitled to as much
as a $12 refund. And thats true even
for beer drinkers who have known
all along that Becks is no longer
made in Germany.
The agreement between plaintiffs
and the worlds largest brewer won
preliminary approval on Tuesday
from a federal magistrate in Miami.
The deal is a costly one for AB InBev. In addition to the refunds, the
company agreed to pay as much as
$3.5 million in attorneys fees and
costs to Kozyak Tropin & Throckmorton LLP of Florida and three
other law firms, lawyers said.
Becks isnt the only brand to
trade on its foreign roots. Red
Stripe, owned by Diageo PLC, advertises itself as a Jamaican-style Lager; Fosters, made by MillerCoors
LLC, sports a kangaroo in reference
to its Australian heritage, and sister
brand Killians Irish Red alludes to
Ireland in its name. All say on their
packaging that they are brewed in
the U.S.
Production of Becks moved to St.
Louis from Germany in 2012, according to the suit against AB InBev. The
suit alleged that phrases featured on
Becks packaging, such as German
Quality beer and Originated in Bremen, Germany, gave consumers a
false impression about where the
beer was made, in violation of state
consumer protection laws.
Weve looked at other cases, and
dont think they have the same merit
we brought here, said Tucker Ronzetti, lead attorney at Kozyak Tropin,
which filed a separate suit against AB
InBevs Kirin brand. We hope the
change we have brought through this
settlement leads to better practices
throughout the market.
Brewers like AB InBev shifted production of imports to the U.S. after
foreign auto makers did the same in
recent years without losing prestige
or the import label for brands like
BMW and Mercedes.
If a BMW could make an X3 or X5
A Matter of Import
Anheuser-Busch settled a class-action lawsuit for allegedly

misleading consumers into thinking Becks was a German-made beer.
MADE IN ST. LOUIS
MADE IN IRELAND
MADE IN
MEXICO
MADE IN
FORT WORTH, TEXAS
MADE IN
LATROBE, PA.
MADE IN
THE NETHERLAND
NETHERLANDS
IMPORTED
NOT IMPORTED
Source: the companies
in South Carolina and sell it for the

same price, why couldnt brewers do
the same? That opened a window,
MillerCoors spokesman Pete Marino
said Wednesday.
MillerCoors made the decision to
move production of Fosters to the
U.S. about five years ago. The move
was largely driven by costs, Mr. Marino said. The Australian brand
comes in 25-ounce cans, which are
heavy and expensive to ship. Fosters
is now produced from MillerCoorss
brewery in Fort Worth. The company
employs an Australian brewmaster
and imports yeast to make the beer
taste like a Fosters made in Australia.
MillerCoors still makes its premium imports, Peroni and Pilsner
Urquell, in Italy and the Czech Republic, respectively. But it charges
about 20% more for those beers than
it does for Fosters, which is about
15% more than a domestic beer like
Miller Lite.
AB InBev made a similar calculation with Becks, reasoning it could
reduce costs and provide fresher beer
without hurting sales, according to
evidence presented in the suit. Imported Becks used exclusively German ingredients, including barley,
water and hops, while domestic
Becks uses local water, barley and
some domestic hops, according to the
suit.
Despite those changes, the company believed the labeling, packaging and marketing of Becks has always been truthful, transparent and
in compliance with all legal requirements, said Jorn Socquet, AnheuserBusch vice president of marketing.
Brewers say it is difficultbut
not impossibleto make the same
tasting beer in two different countries, provided the brewer replicates
conditions and uses ingredients
from the same source. Brewers are
able to manipulate the mineral
content of water, said Randy
Mosher, author of the book Tasting
Beer. But North American barley is
considered blander than European
barley, said Mr. Mosher, who teaches
brewing at the Siebel Institute of
Technology.
Imported beers remain a small
but fast-growing part of the market.
Imports in the first four months of
2015 surged 11.3% to 10.4 million barrels from a year earlier, according to
the Beer Institute. Over the same period, domestic volumes fell an estimated 2.7% to 55.4 million barrels,
the industry group estimated.
About two-thirds of beer imports
this year have come from Mexico, followed by the Netherlands, Belgium,
Canada and Ireland. Germany, home
of Becks, is a distant sixth.
Corona, the top-selling imported

beer, is still brewed in Mexico, even
though its U.S. manufacturing and
distribution rights are owned by
Constellation Brands Inc., a company based in Victor, N.Y. Heineken,
the No. 2 import, was the first foreign beer to arrive in the U.S. after
Prohibition ended in 1933 and continues to be shipped from the Netherlands. Dutch brewer Heineken NV
also ships its other brands to the U.S.
from abroad, including Dos Equis,
which is brewed in Mexico.
A spokeswoman said that using
ocean freight also has lowered the
brands carbon footprint because its
distribution network can tap into 16
U.S. ports. Outdoor advertisements in
2012 touted Heineken as imported,
which is rare for an import.
Becks drinkers can get 10 cents
back for every individual bottle purchased; 50 cents for a six-pack or
$1.75 per 20-pack. As part of the settlement, Anheuser-Busch agreed to
make labeling adjustments.
AB InBev faced a similar class action involving the marketing of its Kirin beer. In that case, which settled
late last year in a Florida circuit
court, the claim was that consumers
were led to believe the beer was from
Japan.
Mike Esterl contributed
to this article.
Extend CEO
Contract
BY JOE FLINT
Fox News Chairman and Chief

Executive Roger Ailes has signed a
new multiyear contract that will
keep him in charge of the cablenews powerhouse through the next
U.S. presidential election and beyond.
The agreement comes a year before Mr. Ailess current contract was
due to expire. The length of the new
contract wasnt disclosed, but a person familiar with the matter said it
runs three years.
Under terms of the agreement,
Mr. Ailes, 75 years old, will continue
to report to 21st Century Fox Chairman Rupert Murdoch. He will also
now report to Mr. Murdochs sons,
James, who next week will assume
the role of chief executive, and
Lachlan, who will become executive
co-chairman.
The reporting structure makes
Mr. Ailes the only 21st Century Fox
division head who still has a direct
line to the elder Mr. Murdoch. It is
also an about-face for the company,
which last week said Mr. Ailes
would report only to James and
Lachlan Murdoch. That announcement came after Mr. Ailes had said
publicly he would continue to report
to Rupert Murdoch.
Roger and I have always had,
and will continue to have, a very
special relationship, Mr. Murdoch
said. James and Lachlan Murdoch
added, Roger is an incredibly talented executive, and were pleased
he has accepted our offer to continue his extraordinary record of
success at 21st Century Fox.
Mr. Ailes said he looks forward
to working with all the Murdochs
to do my part to help bring 21st
Century Fox well into the future.
21st Century Fox and News Corp,
owner of The Wall Street Journal,
were part of the same company until 2013, when the elder Mr. Murdoch split up his media holdings.
Keeping Mr. Ailes on board was
crucial for 21st Century Fox, as Fox
News accounted for about 20% of
the parent companys profit of $4.5
billion in 2014. Besides consistently
topping CNN and MSNBC in the cable-news ratings race, Fox News often has bigger audiences in prime
time than most entertainment and
sports channels.
Besides Fox News and the Fox
Business Network, Mr. Ailes also is
chairman and chief executive of the
Fox Television Station Group, which
comprises 28 TV stations reaching
almost 40% of the U.S.s television
households.
George Stahl
contributed to this article
GETTY IMAGES
BY LAURIE BURKITT
Roger Ailes, the head of Fox News
* *
CORPORATE NEWS
BY LISA BEILFUSS
IAC/InterActiveCorp.s Match
Group division is preparing to court
new investors.
Barry Dillers media conglomerate on Thursday unveiled longawaited plans to pursue an initial
public offering of the division,
known for dating sites Match.com
and OkCupid as well as dating app
Tinder.
The plans come as the company
looks to capitalize on the growing
popularity of online matchmaking
ahead of a potential contract change
with Google Inc. that could affect its
search business.
Investor enthusiasm for the plans
pushed IAC shares up 5.2% to $81.25
in early afternoon trading in the U.S.
IAC, a hodgepodge of online companies Mr. Diller assembled or
launched over the years to try to tap
Internet trends, reorganized to create a management structure for the
Match division in late 2013, fueling
expectation that the company was
preparing for an eventual spinoff of
the segment. Sam Yagan, a cofounder of OkCupid, is chief executive of Match Group, a role he will
maintain post-separation.
The company on Thursday
named Joey Levin, the former head
of its search and application business, as CEO of the slimmed-down
IAC, which will have about 20 individual businesses. Greg Blatt will remain chairman of Match Group.
Chief Financial Officer Jeff Kip is
leaving IAC.
IAC has a long track record of
spinning off its successful business
units.
Among others, Expedia Inc., HSN
Inc., Live Nation Entertainment Inc.,
TripAdvisor Inc. and LendingTree
Inc. were previously part of IAC.
Spinning off Match, which represented nearly 30% of IACs revenue
last year, leaves the company with
three slower growing businesses:
search and applications, media and
e-commerce.
The remaining pieces will include
websites Ask.com and Investopedia,
along with news site Daily Beast and
video-sharing site Vimeo.
An IPO of Match, which is expected to be completed in the fourth
quarter, comes as the market for
dating sites in the U.S. is booming.
The services are expected to make
$1.17 billion in profits this year,
while dating apps are expected to
log $628.8 million, both up nearly
10% from 2014, according to IBISWorld. Match has about a 22% market share.
The planned separation also
comes ahead of the expiration of
IACs search contract with Google
next year.
Of the $1.6 billion in sales IACs
search and applications business
brought in last year, $1.4 billion
came through Google. IAC transmits
search queries to Google, which in
turn sends paid listings back to IAC
for display in search results. The
company makes money when a user
clicks on a resulting Google paid
listing, as Google kicks back a portion of the fee it charges the advertiser. Some analysts expect the
terms of the agreement to become
less favorable for IAC, which could
prompt the company to pursue an
alternative search partner.
Boeing to Cut Production of 747s
BY JON OSTROWER
Boeing Co. will slow production

of its 747 jet to just one a month in
2016, though the plane maker said it
remains committed to the jet and
expects a recovery in the air-cargo
market to drive future sales.
The company has just 32 firm orders for the upgraded 747-8 version
of the jumbo as of the end of May,
and sales have been sluggish as airlines and air-cargo operators opted
for the biggest twin-engine jets such
as the Boeing 777 or Airbus 350 to
handle long-range routes.
The updated 747-8, which was
introduced in 2011 and comes in
passenger and freighter versions,
had been viewed by analysts as one
of the key early challenges for incoming Chief Executive Dennis
Muilenburg.
Slowing production to extend the
programs life also allows Boeing to
remain on track to supply 747s to
replace the aircraft that serve as Air
Force One, the U.S. presidential
transport.
The larger and more fuel-efficient
747-8 was selected in January to replace two heavily modified Boeing
747-200 planes used by the president.
Boeing has yet to be awarded a contract, though the planes are expected
to come into service in 2021 following
several years of modifications and
testing.
Boeing has repeatedly cut 747
production, from an initial two
planes a month, to 1.75 and then to
1.5 at present. It plans to slim this
to 1.3 in September before its latest
cut, coming in March.
The one-a-month rate is still
profitable for the company, Mr.
Muilenburg said at an investor
DAVID RYDER/BLOOMBERG NEWS
IAC Sets Up
Match.com,
Other Sites
For an IPO
The updated 747-8, introduced in 2011, is expected to be one of the early challenges for Boeings incoming chief executive.
event last month, but Boeing jet
programs rarely have dropped below this level.
A commitment signed at the recent Paris Air Show for Russian
cargo operator Volga-Dnepr Group
to acquire up to 20 of the freighter
versions may provide Boeing with
some breathing room to secure
more sales and keep the production
line open, but the agreement has yet
to be firmed up and exactly how
many jets would be delivered and
over what period is still unclear.
The production slowdown could
actually ease some financial pressure on Boeing as 747-8 sales have
been heavily backed by the ExportImport Bank of the U.S., whose future remains in limbo.
Standard & Poors said Wednesday that Boeing could face a credit
downgrade if it is forced to step in
and provide additional financial
support if the Ex-Im Bank is closed
or required to limit its support for
jets.
Boeing has said it may temporarily provide financing for some aircraft purchases by airlines caught
up in the uncertain future of the ExIm Bank, with its mandate due to
expire June 30.
The plane makers customers are
the largest users of the Ex-Im Bank,
whose guarantees secure billions of
dollars in commercial funding annually. And Boeing, as one of the most
vocal proponents of reauthorizing
the government-backed corporation,
would have no alternative because

rival Airbus Group SE is able to rely
on European export credit agencies
to support some of its jet sales.
Standard & Poors said it didnt
expect Boeing itself to have to finance all of the deals now supported
by the Ex-Im Bank. However, it singled out the potential need for Boeing to have to use its finance arm to
back planes such as the 747-8 that
have been tougher to fund without
the federal agencys guarantees.
Cargolux Airlines International
SA, Korean Air Lines Co. and Atlas
Air Worldwide Holdings Inc. have all
used the bank to finance 747-8 deliveries.
Doug Cameron
Molycorp Seeks Protection From Creditors
Continued from page 19

prices to swing wildly. A market
once worth $17 billion is now worth
only around $1 billion.
Molycorp has suffered three
straight years of quarterly losses. As
of Dec. 31, 2014, Molycorp reported
negative cash flow from operations
of $222.2 million. And despite a recent order from Siemens AG for rare
earths to make magnets in its wind
turbines, demand is sluggish.
The popping of the rare-earths
bubble also burned hundreds of
other companies. Australias Lynas
Corp., the other big rare-earths producer outside China, has struggled
to turn a profit.
Mr. Bedford, who took over as
Molycorps chief executive in 2013,
insisted in a recent interview that

we have a very good deposit in
California but says the problem is
with the processing facilities.
It had aimed to produce 20,000
metric tons a year at Mountain Pass.
Instead, it has been able to generate
only slightly more than half that
amount. The company warned investors earlier this year that if
prices and profits dont improve, it
would have to cease operations as
a going concern.
Employees are working their
usual schedules and purchasing of
goods and services will continue,
the company added.
Molycorps workers in California
are represented by the United Steelworkers union. The workers are
aware of the companys troubles

and have been preparing for possible layoffs, said a union official.
Molycorp expects the New York
Stock Exchange to delist its shares
within nine days. The shares will
then be traded on an over-the-counter exchange. The company also said
it would postpone its annual shareholders meeting until the second
half of 2015.
According to court papers, Molycorp is down to its last $74 million
in cash, and only $21 million of that
is available to fund operations in the
U.S. that have filed for bankruptcy.
Assets are carried on the books
at a value of $2.5 billion.
The top-ranking debt is in the
hands of Oaktree Capital Manage-
ment LP and affiliates, a company

that specializes in alternative investments including distressed debt.
Senior secure bondholders are owed
$650 million, as well as $32.5 million for an interest payment that
was skipped June 1, amid restructuring talks. In court papers, Molycorp estimated it owes tens of millions of dollars to suppliers of raw
materials and other goods and services and is carrying more than $700
million in unsecured bond debt.
Molycorp is being advised by the
investment banking firm of Miller
Buckfire & Co. and is receiving financial advice from AlixPartners
LLP.
Peg Brickley
BUSINESS WATCH
HENNES & MAURITZ
Retailer Faces Challenge

With Its High-Street Position
Swedens Hennes & Mauritz AB

kept expanding at a steady pace in its
most recent quarter, clocking in net
profit of nearly $800 million. In some
of its markets, however, the fashion
giant is facing a growing challenge to
find its place on the high street.
In its pursuit of industry leader
Inditex SAthe parent company of
Zara, which offers pricier clothesthe
worlds second-largest fashion
company by revenue has sought to
move upmarket in recent years. It has
plowed more money into flagship
stores, opening 379 last year, and has
launched more upmarket brands

including COS.
But, the Swedish giant is
increasingly under siege by the cheaper
end of the fast-fashion world, with
rivals like Dublin-based Primark
aggressively opening new stores with
the promise of ultraslim price tags.
H&M said net profit increased to
6.45 billion Swedish kronor ($783.5
million) in the three months to May.
30, from 5.81 billion kronor a year
earlier. Sales in the quarter, excluding
value added tax, amounted to 45.87
billion kronor, up from 37.83 billion
kronor last year.
The groups closely watched gross
margin slipped to 59.4% from 60.8%,
mainly because of adverse currency
fluctuations, the company said.

Jens Hansegard
TARGET
Chief Merchant Tesija

Departs Executive Post
Target Corp. is parting ways with
its chief merchant, the highest level
executive change since Chief Executive
Brian Cornell started last year.
Kathryn Kathee Tesija is
relinquishing her role as chief
merchandising and supply-chain officer
on July 6. She has been with the
company for more than 30 years and
was once considered a strong
candidate to eventually become CEO.
Target declined to make her
available, and she couldnt be reached.

The decision removes an executive
who helped Target build its coveted
Tar-zhay reputation but also held
influential roles during years in which
many investors and insiders felt the
discounter had lost its way. Her
departure gives Mr. Cornell more room
to shape his executive ranks and
Targets offerings. Ms. Tesija, 52 years
old, will remain as an adviser until
April.
Paul Ziobro
Online>>
For more breaking news, go to

WSJ.com/Business and follow
@wsjbusiness on Twitter
MARKETS
J.P. Morgan in Talks on Adviser Actions

J.P. Morgan Chase & Co. is in
talks with the Securities and Exchange Commission to settle a probe
into whether the bank inappropriately steered private-banking clients
to its own investment products, people familiar with the matter said.
By Emily Glazer,
Julie Steinberg
and Aruna Viswanatha
The regulator has been examining whether J.P. Morgan guided clients to its own so-called proprietary
products and away from those offered by other firms. A settlement
including a fine could happen as
early as this summer, the people
said, though the size couldnt be determined.
Moving clients into a banks own
products generally leads to higher
fees for the bank. The practice,
while not banned, is closely watched
by regulators. The civil inquiry by
the SECs enforcement division has
moved alongside queries begun
more than a year ago by the Office
of the Comptroller of the Currency.
J.P. Morgan disclosed in a May
filing that the SEC and other regula-
tors are looking into its sale and use

of proprietary products, such as J.P.
Morgan mutual funds, in its wealthmanagement division. The bank said
at the time it was responding and
cooperating with the authorities.
Regulators including the SEC
have long monitored whether brokers sell their clients the right product for them, or push the ones that
make their firm the most money.
Financial advisers can operate
under different rules depending on
whether they register as an investment adviser with the SEC. If they
do, they must adhere to a fiduciary
standard requiring them to recommend only those investment products that are in the best interests of
their clients. Others generally adhere to a different standard that allows them to recommend products
that are merely suitable for the individual.
Generally, investment specialists
in J.P. Morgans private bank who
have discretion over client assets
are bound by a fiduciary standard,
whereas private bankers, who are
relationship managers, arent.
The SECs settlement talks with
J.P. Morgan come as the OCC is put-
ting more pressure on the large U.S.

banks it monitors to disclose possible conflicts of interest to customers, people familiar with the situation said. That includes banks such
as Bank of America Corp. and Wells
Fargo & Co.
The OCCs earlier inquiries into
J.P. Morgan in 2014 helped prompt
the bank to change the way it discloses to private-banking clients the
Regulators were
examining the banks sale
and use of proprietary
products.
differences between its own products and outside offerings and how
much of clients assets were invested in each. The OCC didnt force
the changes, The Wall Street Journal
reported last year.
But since the scrutiny intensified
over the last year, some banks have
come up with new policies, procedures and committees to specifically
address possible conflicts of interest, these people said.

For instance, Bank of America in
recent years has been giving more
details about its fees and potential
conflicts of interest when describing
investment products to clients, a
person familiar with the bank said.
The banks executives have said
publicly it supports increased transparency and a consistent higher
standard for investment professionals when recommending advice or
products.
The increased focus on conflicts
of interest also is showing up in pay
practices. About six months ago,
some parts of J.P. Morgans private
bank changed a metric that helped
determine compensation to further
emphasize the sales of non-J.P. Morgan products as well as in-house
products, people familiar with the
matter said.
The bank also has included in
regular training sessions a greater
focus on role playing in which employees are trained what to say if
clients ask about fee disclosures or
conflicts of interest, some of the
people said.
J.P. Morgan also notes in some of
its client disclosures that potential

conflicts could extend to situations
in which the bank has relationships
with third-party providers. A J.P.
Morgan division outside the private
bank known as J.P. Morgan Clearing
Corp. told clients in statements as
late as 2014 that a potential conflict of interest existed in the form
of an additional financial incentive
to J.P. Morgan for making available
to customers mutual funds whose
affiliates enter into revenue sharing
arrangements.
The OCC in recent months has
asked banks questions about fee
transparency for customers, people
familiar with the matter said. The
OCC also is asking banks about
whether they charge customers differently depending on whether they
purchase proprietary products or
third-party products.
Government and industry participants for years have been working
on policies to address alleged conflicts of interests on Wall Street.
The Labor Department put out a
proposal in April that would require
brokers giving retirement advice to
make recommendations in their clients best interests.
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MARKETS
Icahn Exits Netflix Stake PBOC Boosts Cash

Investor says he is worried about extremely overheated markets
BY DAVID BENOIT
BY SHEN HONG
VICTOR J. BLUE/BLOOMBERG NEWS
Less than three years after taking a big stake in Netflix Inc., Carl
Icahn is eyeing a different house of
cards.
The 79-year-old billionaire investor said Wednesday on Twitter that
he sold his remaining stake in Netflix, banking more than $2 billion in
profit, according to securities filings, in part because he is worried
that financial markets are extremely overheated and destined
for a fall.
Mr. Icahns investment in the
streaming-video provider and producer of the popular House of
Cards series was one of his most
successful.
The shares, which closed at
$678.61 on Wednesday, rose 12-fold
in the time he owned them.
Netflix is still a great company,
Mr. Icahn told CNBC Wednesday.
But the company isnt quite the bargain it was in 2012 when he bought
its shares for about $58 apiece, he
said, and the stock markets multiyear run is cause for concern.
If more respected investors had
warned about the market in [2007],
we might have avoided the crisis in
[2008], Mr. Icahn tweeted on
Wednesday.
Mr. Icahn has been sounding that
alarm for more than a year, arguing
that the Federal Reserves policy of
low interest rates is flooding the
market with cheap money and creating overvalued stocks. On
Wednesday, he called out high-yield
bonds as a potential trouble spot.
In an interview with CNBC, he
said investors are buying risky debt
at yields similar to what investment-grade companies pay and ignoring the risk that high-yield companies could go bust.
Other investors have followed
Mr. Icahns advice in the past, sending the market down amid his
gloominess.
In late 2013, Mr. Icahn said he
Carl Icahn made more than $2 billion on his investment in video provider Netflix.
was worried about a big drop in the
market, which helped push stocks
down that day.
Meanwhile, other investors share
his sentiments about lofty stock valuations. Investor Warren Buffett and
hedge-fund titan Paul Singer have
expressed concerns in recent
months about frothy stock prices,
and Fed Chairwoman Janet Yellen
has said valuations are quite high.
The S&P 500s price/earnings ratio for the past 12 months is at its
loftiest level since 2004, at 18,
above its average of 16.3 over the
past 15 years, according to FactSet.
The Nasdaq Composite Index
closed at another record Tuesday, as
did the index of smaller stocks, the
Russell 2000.
The Dow Jones Industrial Average and S&P 500 have both hit
highs this year, as stocks have continued to climb. The Dow and S&P
500 were up 6.5% and 7.6%, respectively, in the past year as of
Wednesdays close.
This year, Mr. Icahn hasnt made
the kind of large stock investments
he is best known for, though he has
added to some investments, including industrial-crane maker Manito-
woc Co. and media company Gannett Co.

While few investments can compare with his Netflix haul, Mr. Icahn
said he hopes his investment in Apple Inc., currently valued at about
$6.8 billion, may prove as lucrative.
Mr. Icahn first took a Netflix
stake in 2012, thanks to the advice
of son Brett Icahn and David
Schechter, who manage a portfolio
for Mr. Icahn. They believed that
Netflix was a high-demand product
but undervalued by the stock market. Initially, Mr. Icahn called for the
company to explore a sale.
Mr. Icahn met with Netflix cofounder and Chief Executive Reed
Hastings, who arranged for a private
showing of the soon-to-debut
House of Cards, starring Kevin
Spacey. It was Netflixs first original
series, and the company was betting
that new content would draw in
more subscribers.
Mr. Icahn rewrote his script on
the sale idea.
When I saw House of Cards
and met with Reed, I was sold on
what he was doing, Mr. Icahn said
in a 2013 interview with The Wall
Street Journal.
Alibaba Affiliate Opens Bank
An affiliate of Alibaba Group

Holding Ltd. began operating an online bank Thursday, though the limited services available indicate the
challenges it faces in Chinas tightly
regulated banking sector.
By Gillian Wong in Beijing
and Juro Osawa
in Hong Kong
Alibaba affiliate Ant Financial

Services Group said MYbank, which
has registered capital of 4 billion
yuan ($644 million), is ready to issue loans of under 5 million yuan to
small businesses, entrepreneurs and
consumers. People cant open accounts with MYbank yet because of
regulatory concerns over facial-recognition technology it wants to use
to verify account holders identities.
The move by Alibaba to push
further into Internet finance highlights the e-commerce giants ambitions to expand beyond online shopping.
Small
businesses
and
entrepreneurs in China have been
underserved by traditional lenders.
Because the regulatory authorities have not yet approved the
opening of accounts [online], that
has greatly affected the products we
had originally planned. We had ini-
For Bank Financing
tially prepared a lot of products but

they rely on the opening of accounts, said Tang Jiacai, MYbanks
chief information officer, in an interview this month.
Online banking is the next major
battleground for Chinas two largest
Internet companies, Alibaba, which
dominates e-commerce in China,
and Tencent Holdings Ltd., a socialnetwork and online-games company.
When MYbank and WeBank, an online bank backed by Tencent, won
approvals last year to set up privately owned banks, there were
hopes they would provide competition to help spur changes in banking. Critics have said state-run lenders favor state firms, leaving
individuals and small businesses underserved. WeBank started operating in January, with limited services.
Both MYbank and WeBank have
said they intend to help meet that
demand by operating without
branches to keep costs low and
reach more users. MYbank has only
300 employees, allowing it to invest
more in other areas. Ant Financial,
which operates Alipaythe online
payment system that processes
most of Alibabas e-commerce transactionssaid access to a large
amount of online data can enable

MYbank to determine the borrowers creditworthiness.
This is how we ease the borrowing strain on smaller enterprises
as we dont only evaluate them on
collaterals, MYbank Gov. Yu
Shengfa said Thursday.
Ant Financial already offers a
microloan service for small businesses through Alipay. Ant Financial
said its loan unit has lent more than
400 billion yuan to more than 1.6
million small businesses and entrepreneurs since 2010.
Still, without the ability to allow
users to open bank accounts remotely, the bank is limited in its
ability to collect deposits and conduct other banking services. Mr.
Tang said MYbank would continue
to talk with Chinese regulators. He
said the facial-recognition technology, if approved, could identify people with a high degree of accuracy.
Ant Financial didnt say when
bank accounts or other services
might be available.
Ant Financial owns a 30% stake
in MYbank. Its other stakeholders
include Shanghai Fosun High Technology (Group) Co., which holds a
25% stake. The rest is owned by private investors.
SHANGHAIChinas central bank

injected cash into the financial system on Thursday, for the first time
in 10 weeks, signaling its intention
to reduce borrowing costs in a
struggling economy.
The move was meant to quench
banks seasonal thirst for funds. But
analysts said that resorting to adjustments in the money market
likely diminishes the chances of imminent, more-forceful monetary-policy easing, such as cutting banks
reserve requirements.
The Peoples Bank of China offered 35 billion yuan ($5.6 billion) to
commercial lenders through moneymarket instruments called repurchase agreements, or reverse repos.
The last time the central bank
stepped into the money market was
April 16, when it offered banks 10
billion yuan of the same short-term
loans.
The PBOCs move doesnt surprise me. It could be part of the bigger story that funding costs are still
considered too high and they want
to see more loan growth, said Tim
Condon, economist at ING in Singapore.
While the PBOC initially succeeded in guiding money-market interest rates lower following a series
of monetary-easing steps since November, borrowing costs have rebounded in the past month, partly
as a result of a flurry of initial public offerings in Chinas booming
stock market.
The weighted average of the
seven-day repo rate, a benchmark of
short-term borrowing costs that
banks charge each other, fell to
around 1.93% in mid-May, from a
peak of 4.84% at the beginning of
the year.
However, it had gradually
climbed back to 3.08% as of late
Wednesday.
The PBOC wants the short-term
rates closer to 2% rather than 3%,
Mr. Condon said.
In a brief statement on its microblog, the PBOC said the Thursday
cash injection is aimed at stabilizing market expectations after demand for funds increased due to a
regulatory review of banks and recent large IPOs.
As we get closer to the end of
June, this is typically a season when
banks rush to seek funds to meet
capital requirements. This is also
the period when the last cash
crunch occurred two years ago,
said Liu Dongliang, senior analyst at
China Merchants Bank.
China experienced an unprecedented credit squeeze that nearly
choked its creaky financial system
in the summer of 2013, when a frantic scramble for funds by banks sent
the seven-day repo rate to a record
12%.
The PBOC initially intended to
use the crisis to rein in lenders involved in reckless financing behavior, but was forced to end the mayhem by pumping in large amounts
of money.
In a clear signal of the PBOCs
motivation, the central bank auctioned the reverse repos at an interest rate of 2.7% on Thursday, down
from 3.35% on April 16.
Last month, the bank announced
its third interest-rate cut in six
months, less than a month after
slashing the reserve-requirement ratiothe portion of deposits that
banks need to keep on reserve with
the central bankby a full percentage point.
That said, reverse repos cant
replace reserve-requirement cuts.
The former is short-term relief in a
tight funding environment. The latter unleashes liquidity in the long
run, Mr. Liu said.
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MARKETS
BY ANNAMARIA ANDRIOTIS
More Americans who recently

went through foreclosure or bankruptcy are getting home loans.
A new wave of nonbank lenders
is bringing these risky buyers back
into the housing market some seven
years after the mortgage meltdown.
The lenders are targeting borrowers
who have recently gone through a
foreclosure, short sale or bankruptcy, but who they say are safer
than their credit profiles suggest.
They are sometimes approving
borrowers in as little as a few
months or even weeks after a foreclosure.
Lenders are trying to carve out
niches that play upon the fact that
underwriting remains, by historic
standards, very tight, said Guy Cecala, publisher of Inside Mortgage Finance, a trade publication. Thats always the way it starts out and then
you keep loosening and loosening
were right at the beginning of that.
Several lenders have entered this
market since the housing crisis, and
their numbers, while still small,
have picked up over the past year.
Mr. Cecala estimates that mortgage
originations for borrowers who have
recently been through a major financial setback and are back on
their feet will total at least $5 billion this year. Thats up from around
$2 billion to $3 billion last year and
expected to be the highest since the
housing boom, he said. That compares with a total of $1.3 trillion of
mortgage originations that are expected for 2015, according to the
Mortgage Bankers Association.
The move represents a growing
appetite for riskier borrowers and a
possible turning point in the mortgage industry in which more lenders
are willing to experiment with

looser lending standards. Most large
lenders dont make such mortgages.
The lenders could be exposing
themselves to future losses. In many
cases, these mortgages fall outside of
the Consumer Financial Protection
Bureaus qualified mortgage definition, which went into effect last year.
Such mortgages require a borrowers monthly debt to remain under a certain threshold compared
with their income, and also require
that loan fees and interest rates
dont exceed a certain level, among
other criteria. Lenders that give out
nonqualified mortgages are at
greater risk of being sued by borrowers who default and claim that
the lender didnt adequately confirm
they could afford the loan.
Lenders, for their part, say they
review applicants income to ensure
they have the means to take on the
mortgage and require down payments that are often north of 25%.
They also check credit reports to
make sure borrowers are paying
their bills on time and for evidence
that their previous credit blemishes
were due to a one-time event, such
as a job loss or other hardship.
Lenders can charge such borrowers higher interest rates, often ranging from 5% to 10%.
We think there is a good credit
risk in a certain select group of
those people, said Jerry Schiano,
president of New Penn Financial
LLC, a mortgage lender based in
Plymouth Meeting, Pa., and a subsidiary of finance company Shellpoint Partners LLC. A life event
shouldnt define the person forever,
and they should have a chance to
improve themselves if they have appropriate income and reserves.
New Penn in October began giv-
PAUL J. RICHARDS/AGENCE FRANCE-PRESSE/GETTY IMAGES
Lenders Turn to Risky Buyers
A new wave of nonbank lenders is

targeting home-loan borrowers.
ing out mortgages to borrowers
with a completed foreclosure, short
sale or bankruptcy as recently as a
year earlier. The lender, which requires a minimum 620 FICO score,
on a scale that ranges from 300 to
850, has originated more than 100
of these loans since the beginning of
the year, totaling about $50 million.
Some lenders say they will approve borrowers with subprime
FICO scoresas low as around
500but in many cases, borrowers
have good credit scores despite still
having a negative event on their
credit reports. A foreclosure may
have lowered their score by up to
200 points, said John Ulzheimer,
president of consumer education at
CreditSesame.com, a credit-management site.
Data from FICO show that some
borrowers can recover quickly if
they dont fall behind on any other
debts or suffer other missteps.
The loans are often funded by or
sold to private-equity firms, hedge
funds and other investors who are

seeking investments with higher
yields and are prepared to take on
more risk. Annual yields can range
from 8% to 18%. Some lenders are
holding the loans on their books with
plans to eventually securitize them.
Malcolm Davies, a 39-year-old
partner at a commercial real-estate
investment banking firm, filed for
personal bankruptcy in 2009 after
he was unable to pay back construction loans on office buildings and
other investment properties he was
developing when the real-estate
market crashed. Two condominiums
owned by Mr. Davies also went into
foreclosure, a process that was completed in 2011.
As Mr. Daviess career and finances recovered and he and his
wife had three children, he began to
think about buying a home. The
bankruptcy and foreclosures remained on his credit reports, but his
FICO scores had rebounded up to
the low 700s. Last month, the Davieses closed on a $2.83 million home
in Manhattan Beach, Calif., after
making a 30% down payment. They
received the mortgage from Encinitas, Calif.-based lender Drop Mortgage, which launched last year and
works mostly with applicants who
have had a foreclosure or short sale.
Their interest rate is 4.375% on
an adjustable-rate mortgage, which
will reset in five years, nearly 1.5
percentage points higher than the
average rate at the time, according
to mortgage-information website
HSH.com.
Drop Mortgage has given out
$96 million in mortgages since July,
said its president, Jon Maddux. It
has no minimum FICO score requirement but prefers borrowers
above 600.
Continued from page 19

nations banks and the economy,
weakening consumer confidence and
driving unemployment higher. It is
especially concerned about investors buying houses as a bet on rising prices rather than as a place to
live. Nationally, house prices rose
more than 9% through May. In Sydney, they have risen 39% since 2012,
according to property research firm
CoreLogic RP Data.
It does worry me that the very
low historical interest rates are encouraging people to perhaps overinvest in housing, Treasury Secretary
John Fraser, a member of the central banks rate-setting board, told
lawmakers on June 1.
In 2010, when house prices last
rose sharply, the Reserve Bank of
Australia tightened policy to cool
things off. Lately the central bank
has been keeping rates at 2%, concerned that an increase could choke
off a revival of consumer sentiment
and construction.
A recent probe by the Australian
Prudential Regulation Authority, the
banking watchdog, uncovered what
it sees as unsettling lending practices. Asked to assess a range of hypothetical buyers, some banks were
prepared to lend about 50% more
than their conservative peers. Others
overstated household incomes when
determining the borrowers ability to
repay a loan. About half failed to
consider the impact of higher rates.
The outcomes were quite enlightening for us and, to be frank, a
little disconcerting, APRA Chairman Wayne Byres said.
AARON FRANCIS/THE AUSTRALIAN
Australian Banks Loosen Lending Practices
Ben Oliver and his partner were offered far more than they needed for a loan.
Representatives for the banks
said they are working with regulators to address concerns over lending practices.
For every $1 of debt held by
Australian households today, they
have almost $6 of assets, said Steven Mnchenberg, chief executive of
the Australian Bankers Association,
an industry body representing the
lenders. He said that households on
average are two years ahead on
their mortgage payments.
Australian households have
among the highest debt levels in the
world, according to data from Barclays. As of December, their debt
had risen to 194% of annual income,
higher than the U.S. peak of 135% in
2007.
Some analysts fear that banks

will end up with a raft of bad debt,
stretching their capital buffers, if investors who bet on housing at the
top of the market scramble to cash
out if they see prices dropping. This
risks creating a spiral where homes
are being cast off by increasingly
desperate sellers, swamping demand
and driving house prices well below
the value of loans.
Bond manager Pacific Investment
Management Co. said Australian
households are exhibiting irrational
exuberance, a phrase coined by the
former chairman of the U.S. Federal
Reserve, Alan Greenspan, in 1996,
during the tech bubble, to describe
how investor enthusiasm was pushing stock prices to levels that
werent a true reflection of economic fundamentals.

The IMF sent a team of investigators to Australia this month to
probe the housing market as part of
their annual country review. Creditratings firm Moodys Investors Service said recent growth in lending
to investors, combined with rapid
house-price appreciation in inner
Sydney and Melbourne, is weakening the average loan portfolio quality of Australian banks. Fitch Ratings is concerned about an increase
in interest-only loans.
The value of investor loans has
more than doubled in the past four
years. More than 51% of the loans
in April went to investors. Interest-only loans that dont require
the immediate paying down of
principal have quadrupled since
2000.
The banking regulator moved
last year to cap growth in investor
loans at 10% per annum. Until recently, the countrys biggest banks
had been waiving application fees
and asking for down payments as
low as 5% of purchase prices. In
Western Australia, where the mining downturn is damping house
prices, Commonwealth Bank unit
Bankwest increased the minimum
down payment on new investor
loans to 20% last month.
It is fair to say that the move in
house prices is a general concern. I
dont think its a bubble yet, but it
certainly has the potential and I
think it has to be watched closely,
Mike Smith, ANZs chief executive
officer, said last week.
Economic
Data Help
U.S. Stocks
Edge Higher
BY AUSTEN HUFFORD
AND SAUMYA VAISHAMPAYAN
U.S. stocks inched upward Thursday, buoyed by upbeat economic

data as investors monitored Greeces
bailout talks with creditors.
The Dow Jones Industrial Average rose 15 points, or 0.1%, to 17980
at midday. The S&P
ABREAST OF 500 index gained
THE MARKET two points, or 0.1%,
to 2111, and the
Nasdaq Composite Index advanced
nine points, or 0.2%, to 5131.
Investors continued to focus on
developments in Greeces bailout
talks. Eurozone finance ministers
said Greece and the institutions
overseeing its bailoutthe European Commission, the International
Monetary Fund and the European
Central Bankwill continue to work
toward a deal on how Greece can
cut spending and increase government revenue. Negotiations were expected to continue into the weekend. Without a deal, Greece is set to
default on a June 30 payment to the
International Monetary Fund.
The Stoxx Europe 600 shed 0.2%
to 396.39.
Health-insurance stocks rose following a ruling by the U.S. Supreme
Courts ruling that subsidies under
the Affordable Care Act, or Obamacare, were constitutional. UnitedHealth Group shares gained 2.7%
and Humana climbed 2.1%.
The health-care stocks are very
strong today because of the Supreme Court upholding, said trader
Ted Weisberg of Seaport Securities
Corp. Weve seen a lot of strength
in health-care stocks, which is sort
of a knee-jerk reaction to that ruling, he added.
While the day-to-day news about
Greeces bailout talks has been driving U.S. stock-market action recently, it doesnt change the outlook
for U.S. companies, stock investors
said. The stock markets muted
moves underscore the view that
many investors expect a deal between Greece and its creditors.
The macro news is really being
held hostage by Greece in the short
run, said Doug Foreman, who manages $10 billion for Kayne Anderson
Rudnick. But, he added, for the longer term the market continues to
be increasingly looking past that,
whatever happens.
In economic news, U.S. consumer
spending in May rose 0.9% from
April, the Commerce Department
said, beating expectations of a 0.7%
increase. The price index for personal consumption expenditures, the
Federal Reserves favored inflation
gauge, rose 0.3% in May from April.
Initial U.S. claims for unemployment benefits increased by 3,000 to
271,000 in the week ended June 20,
the Labor Department said. Economists expected 273,000 claims.
While economic reports have
been mixed this year, the economy
is on track for improvement in the
long run, said Kim Forrest, senior
equity analyst at Fort Pitt Capital
Group, which manages $1.8 billion.
IAC/InterActiveCorp
shares
climbed 5.1% as the company announced an initial public offering of
its Match Group division, which includes the dating app Tinder and
dating websites Match.com and OkCupid.
INTERNATIONAL INVESTOR
Shares in China
Take Another Fall
BY CHAO DENG
ground. It finished down 5.2% for

the day.
The Shenzhen Composite Index
finished down 3.8%.
Global investors withdrew a net
3.55 billion yuan from Shanghai
stocks on Thursday via a trading
link with Hong Kong, the fastest
pace of selling through that channel
in a month.
The latest bout of volatility in
Chinese stocks also came from increased margin calls from Chinese
brokerages. Investors who borrow
money to buy shares, known as buying on margin, can be forced to sell
holdings when prices drop unless
they add more money to their trading accounts.
Total margin loans eased to 2.21
trillion yuan on Wednesday from a
record 2.27 trillion last Thursday, according to data provider WIND Info.
Elsewhere in Asia, a lack of progress on Greek negotiations pushed
markets lower.
Australias S&P/ASX 200 was
down 0.95% to 5632.70, and Hong
Kongs Hang Seng Index was off
0.95% to 27145.75.
Japans Nikkei Stock Average declined 0.5% to 20771.40, after hitting
an 18-year high on Wednesday.
Aside from the Greek news, also
weighing on shares in Japan was a
decline in the dollar against the yen,
which is a negative for Japans exporters. The dollar was buying
123.58 in midday New York trading
Thursday, down from 123.86 late
Wednesday.
Gregor Stuart Hunter
Chinese shares tumbled Thursday, continuing their recent volatility, as investors showed disappointment that the government hasnt
taken stronger stimulus measures.
The Shanghai Composite Index
dropped 3.5% to 4527.78.
A lot of people were hoping for a
rate cut this month from Chinas
central bank, but inASIA-PACIFIC stead Beijing has
STOCKS
given the market incremental stimulus
measures, said David Welch, managing director at Reorient Group.
Chinas central bank injected
cash into the financial system for
the first time in 10 weeks on Thursday, signaling its intention to reduce
borrowing costs in a struggling
economy.
Also, the State Council said late
Wednesday it would remove the
countrys long-standing loan-to-deposit ratio limit of 75% for banks, in
a bid to spur more lending to a
slowing economy.
ANZ Bank said the removal could
allow 3.5 trillion yuan ($564 billion)
of potential credit into Chinas financial system.
But investors expected more. It
was a real big disappointment for
people, Mr. Welch said. I think
that was the catalyst for the selloff.
The ChiNext Price Index of
startup companies on the Shenzhen
Stock Exchange briefly dipped into
bear-market territory, down more
than 20% from a record high on
June 3, before regaining some
Data as shown is for information purposes only. No offer is being made by

Morningstar, Ltd. or this publication. Funds shown arent registered with the
U.S. Securities and Exchange Commission and arent available for sale to United
States citizens and/or residents except as noted. Prices are in local currencies.
All performance figures are calculated using the most recent prices available.
FUND NAME
NAV
GF AT LB DATE CR
n AHW CAPITAL MANAGEMENT

Tel (+49) 1805 - 23 82 82
www.ahw-capital.com
AHW Top-Div.Int.
GL
EQ LUX 07/29 EUR
NAV
46.59
%RETURN
YTD 12-MO 2-YR
-8.9
-8.2
-2.7
n ALLIANZ GLOBAL INVESTORS KAPITALANLAGEGESELLSCHAFT

Concentra AE
Industria AE
InternRent AE
EU EQ DEU 06/24 EUR

EU EQ DEU 06/24 EUR
EU BD DEU 06/24 EUR
111.90
111.70
45.74
19.9
18.2
4.6
20.2
17.7
11.9
22.2
20.9
6.8
n CHARTERED ASSET MANAGEMENT PTE LTD - TEL NO: 65-6835-8866

Fax No: 65-6835 8865, Website: www.cam.com.sg, Email: [email protected]
CAM-GTF Limited
OT
OT MUS 06/19 USD 316796.21
-6.8
-6.9
-4.4
FUND NAME
NAV
GF AT LB DATE CR
American Growth Fund AA

American Growth Fund AA (HKD)
Asia Total Return Fund AA Inc
Asia Total Return Fund AA
Asia Total Return Fund AA (HKD) Inc
Asia Value Dividend Equity Fund AA
Asia Value Dividend Equity Fund AA Inc
Asian Equity Fund A
Asian Equity Fund AA
Asian Sm Cap Equity Fund AA
Asian Small Cap Equity Fund AA (HKD)
China Value Fund A
China Value Fund AA
Dragon Growth Fund A
Dragon Growth Fund AA (HKD)
Emg Eastrn Europe Fund A
Emg Eastrn Europe Fund AA
European Growth Fund A
European Growth Fund AA
Global Contrarain Fund AA
Global Property Fund AA
Global Property Fund AA (HKD)
Global Resources Fund AA
Greater China Opportunities Fund AA
Healthcare Fund AA
India Equity Fund AA
International Growth Fund A
International Growth Fund AA
Japanese Growth Fund A
Japanese Growth Fund AA
Latin America Equity Fund AA
Russia Equity Fund AA
Strategic Income Fund AA
Taiwan Equity Fund AA
Turkey Equity Fund AA
U.S. Bond Fund AA
U.S. Bond Fund AA (HKD)
U.S. Bond Fund AA (HKD) Inc
U.S. Bond Fund AA Inc
U.S. Sm Cap Equity Fund AA
U.S. Special Opportunities Fund AA
U.S. Special Opportunities Fund AA (HKD)
U.S. Special Opportunities Fund AA Inc
U.S. Tsy Inf-ProtSec Fund AA
US
US
AS
AS
AS
OT
OT
OT
OT
AS
AS
AS
AS
AS
AS
EU
EU
EU
EU
GL
OT
OT
GL
AS
OT
EA
GL
GL
JP
JP
GL
EE
OT
AS
OT
US
US
US
US
US
US
US
US
OT
EQ
EQ
BD
BD
BD
OT
OT
OT
OT
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
OT
EQ
OT
BD
BD
BD
BD
EQ
BD
BD
BD
OT
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
SFC Rebuffs
HKEx Over
Rule Change
n CP CAPITAL ASSET MANAGEMENT LIMITED

www.cpgbl.com
CP Global Alpha Fund
OT
CP Multi-Strategy Currency Fund OT
CPS-Master Priv Fund
GL
OT WSM 06/25 USD

OT CYM 06/11 USD
OT WSM 06/25 USD
n HSBC Trinkaus Investment Managers SA

E-Mail: [email protected]
Telephone: 352 - 47 18471
Prosperity Return Fund A
Prosperity Return Fund B
Prosperity Return Fund C
Prosperity Return Fund D
Renaissance Hgh Grade Bd A
Renaissance Hgh Grade Bd B
Renaissance Hgh Grade Bd C
Renaissance Hgh Grade Bd D
JP
EU
EU
EU
EU
EU
EU
EU
BD
BA
BA
BA
BA
BA
BA
BA
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
12/06
12/06
12/06
12/06
12/06
12/06
12/06
12/06
JPY
JPY
USD
EUR
JPY
JPY
USD
EUR
125.98
115.90
153.47
US
EQ LUX 06/24 USD
17.7
30.8
18.3
NS
11.0
12.1
Advertisement
FUND NAME
8577.68
9032.12
79.01
121.37
10807.34
11130.39
96.94
102.83
n MANULIFE GLOBAL FUND TEL:(852)2108 1110

Internet:http://www.manulifefunds.com.hk
American Growth Fund A
13.5
NS
5.7
30.90
-9.3
4.6
-12.2
-9.0
3.5
17.9
-0.9
-4.6
-8.4
11.0
-11.1
-8.8
5.1
25.6
0.7
-4.1
0.3
13.2
-1.0
8.1
11.3
23.9
8.4
6.9
GL
NAV
1.76
10.93
0.95
1.00
9.96
1.88
1.15
3.52
1.13
2.50
10.10
10.20
3.19
2.38
11.53
3.38
1.45
11.44
0.83
0.98
1.02
9.60
0.81
1.17
2.04
1.40
4.94
1.13
3.59
0.92
0.89
0.46
1.08
1.72
0.81
1.21
9.88
9.80
0.99
1.21
0.92
9.60
0.92
1.28
143.47
10.8
17.6
Leading 10 Performers
FUND FUND
RATING * NAME
%RETURN
YTD 12-MO 2-YR
6.4
5.5
0.1
0.1
NS
14.4
15.6
13.6
13.5
18.3
18.2
19.7
19.6
21.4
21.2
5.7
5.6
9.7
9.6
4.5
0.5
NS
-0.5
17.2
9.2
3.3
6.6
6.5
17.7
17.6
-6.8
23.5
0.2
14.2
-14.3
0.2
NS
0.0
0.2
7.5
1.8
2.4
1.8
-0.5
10.5
NS
-0.4
NS
NS
19.1
NS
9.5
9.2
5.9
NS
33.2
32.8
28.9
28.6
-29.5
-29.6
-3.3
-3.6
0.4
5.4
NS
-25.8
19.3
21.5
12.2
6.2
5.9
8.2
7.9
-23.8
-27.7
-1.0
9.4
-16.2
0.7
NS
NS
NS
5.8
-5.2
NS
NS
-2.6
17.3
NS
2.6
NS
NS
17.6
NS
15.7
15.4
13.4
NS
24.4
24.1
27.1
26.8
-9.8
-9.9
11.3
11.1
11.5
11.5
NS
-4.4
NS
22.8
23.1
15.4
15.2
7.9
7.6
-4.1
-9.8
2.2
15.5
-5.1
3.2
NS
NS
NS
12.7
3.4
NS
NS
0.9
-15.2
-15.9
-10.9
FUND NAME
NS
NS
NS
NS
NS
NS
NS
NS
NS
NS
NAV
GF AT LB DATE CR
NAV
n ALEXANDRA INVESTMENT MANAGEMENT

Tel: +1 212 301 1800 Fax: +1 212 301 1810
AlexandraConvertibleBondFundI,Ltd.(ClassA) OT OT VGB 08/31 USD
2155.22
%RETURN
YTD 12-MO 2-YR
NS
NS
NS
NOTE: Changes in currency rates will affect performance and rankings.

KEY: ** 2YR and 5YR performance is annualized
NA-not available due to incomplete data;
NS-fund not in existence for entire period
the stock exchange, which has

pushed to loosen listing rules to attract more companies. The SFC is
concerned that easing rules would
be seen by investors as a weakening
of Hong Kongs widely respected
regulatory system.
The exchange said it would further engage with the SFC, whose
views it considers to be material to
the final proposal. Opposition from
the regulator could kill the exchanges proposal because as rule
NAV
%RETURN
YTD 12-MO 2-YR
n THE NATIONAL INVESTOR

TNI Tower | Zayed 1st Street Khalidia| Web:www.tni.ae
OT BMU 05/31 USD
OT IRL 06/23 USD
OT ARE 06/24 AED
1007.72
1361.59
11.61
4.3
3.4
12.2
-11.5
-6.4
9.7
-5.9
8.9
26.5
OT OT CYM 05/31 USD

OT OT USA 10/31 USD
OT OT CYM 01/31 USD
NS
129.92
102.66
4.5
2.4
11.3
5.6
3.2
11.3
5.6
3.8
0.7
% Return in $US **
1-YR 2-YR 5-YR
1.91
0.77
NS
NS
2.10
0.64
4.25
NS
2.08
0.49
4.08
7.03
1.38
0.38
2.07
NS
2.78
0.14
4.47
7.25
2.66 -0.05
6.24
7.94
0.93
-0.22
NS
NS
1.91
-0.23
3.78
7.25
1.10
-0.38
3.84
6.16
1.58 -0.50
4.95
6.82
Source: Morningstar, Ltd

1 Olivers Yard, 55-71 City Road
London EC1Y 1HQ United Kingdom
www.morningstar.co.uk; Email: [email protected]
Phone: +44 (0)203 107 0038; Fax: +44 (0)203 107 0001
amendments require the approval of

the SFCs directors. The stock exchanges leadership has previously
called for a change to the rules.
The SFC said the proposal
doesnt address how the exchanges
proposed conditions and safeguards
pertaining to the structures could
be monitored. It also voiced concerns about the criteria the exchange would use to determine
companies eligibility for weightedvoting-rights structures.
NAV
GF AT LB DATE CR
FUND NAME
GC Hi Yield Inc-Cls P USD MDIs sh
GC Hi Yield Inc-ClsA MDIs EUR H
Hi-Div Stk Cls A1
Hi-Div Stk Cls A2 MDIs
Hi-Div Stk Cls A2 MDIs AUD H
Hi-Div Stk Cls A2 MDIs CAD H
Hi-Div Stk Cls A2 MDIs GBP H
Hi-Div Stk Cls A2 MDIs HKD
Hi-Div Stk Cls A2 MDIs NZD H
Intel-China Converg Fund-A Units
Intel-Chinese Mainland Foc Fund
VP Classic-A Units
VP Classic-B Units
VP Classic-C Units
VP Classic-C Units AUD H
VP Classic-C Units CAD H
VP Classic-C Units NZD H
VP Taiwan Fund
OT
OT
OT
OT
OT
OT
OT
OT
OT
AS
AS
AS
AS
AS
AS
AS
AS
AS
OT
OT
OT
OT
OT
OT
OT
OT
OT
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
EQ
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
06/24 USD
06/24 EUR
06/24 USD
06/24 USD
06/24 AUD
06/24 CAD
06/24 GBP
06/24 HKD
06/24 NZD
06/24 USD
06/24 USD
06/24 USD
06/24 USD
06/24 USD
06/24 AUD
06/24 CAD
06/24 NZD
06/24 USD
NAV
9.35
10.45
84.92
12.89
11.80
11.82
11.21
11.78
11.88
190.48
52.66
328.36
148.91
18.94
15.55
15.32
15.57
16.06
%RETURN
YTD 12-MO 2-YR
8.6
NS
13.8
13.8
15.0
14.0
NS
13.9
15.7
29.7
29.6
23.0
22.7
23.7
25.2
25.2
26.8
4.2
5.9
NS
21.5
21.7
24.4
22.5
NS
21.6
25.2
60.0
56.6
47.7
47.0
48.7
54.6
52.6
54.8
-3.8
8.1
NS
18.0
18.4
NS
NS
NS
NS
NS
33.9
32.0
30.7
30.0
30.9
NS
NS
NS
10.8
n WEBSITE: WWW.VALUEPARTNERS.COM.HK, TEL: (852) 2880 9263

China A-Share Fund Cls A AUD H
China A-Share Fund Cls A AUD UnH
China A-Share Fund Cls A CAD H
China A-Share Fund Cls A EUR H
China A-Share Fund Cls A GBP H
China A-Share Fund Cls A GBP UnH
China A-Share Fund Cls A HKD H
China A-Share Fund Cls A HKD UnH
China A-Share Fund Cls A NZD H
China A-Share Fund Cls A NZD UnH
China A-Share Fund Cls A RMB (CNH)
China A-Share Fund Cls A USD
China A-Share Fund Cls A USD H
China Greenchip-A Units
China Greenchip-A Units AUD H
China Greenchip-A Units CAD H
China Greenchip-A Units NZD H
China Greenchip-A Units USD
China Greenchip-A2 QDIs Units
GC Hi Yield Inc - Cls A MDIs GBP H
GC Hi Yield Inc-Cls A MDIs AUD H
GC Hi Yield Inc-Cls A MDIs CAD H
GC Hi Yield Inc-Cls A MDIs NZD H
GC Hi Yield Inc-Cls P HKD Acc sh
GC Hi Yield Inc-Cls P HKD MDIs sh
GC Hi Yield Inc-Cls P MDIs SGD H
GC Hi Yield Inc-Cls P USD Acc sh
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
AS
AS
AS
AS
AS
AS
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
EQ
EQ
EQ
EQ
EQ
EQ
OT
OT
OT
OT
OT
OT
OT
OT
HKG
HKG
HKG
HKG
HKG
HKG
HKG
HKG
HKG
HKG
HKG
HKG
HKG
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
CYM
06/24 AUD
06/24 AUD
06/24 CAD
06/24 EUR
06/24 GBP
06/24 GBP
06/24 HKD
06/24 HKD
06/24 NZD
06/24 NZD
06/24 CNH
06/24 USD
06/24 USD
06/24 HKD
06/24 AUD
06/24 CAD
06/24 NZD
06/24 USD
06/24 HKD
06/24 GBP
06/24 AUD
06/24 CAD
06/24 NZD
06/24 HKD
06/24 HKD
06/24 SGD
06/24 USD
14.71
13.82
13.93
14.66
14.24
14.11
14.73
14.96
14.40
13.52
15.15
14.89
14.63
69.74
11.87
11.73
12.03
11.70
12.88
10.04
9.56
9.58
9.73
12.44
9.30
10.03
12.54
FUND NAME
NAV
GF AT LB DATE CR
Platinm-Emancipation
Platinm-Equity Plus
Platinm-Gbl Dividend
Platinm-Nordic
Platinm-Premier
Platinm-Turnberry
OT
OT
GL
OT
OT
OT
EQ
OT
EQ
OT
OT
BD
CYM
USA
CYM
CYM
CYM
USA
05/31
05/29
05/31
10/31
12/31
02/28
USD
USD
USD
SEK
USD
USD
NAV
105.47
35.02
NS
NS
NS
60.14
n WINTON CAPITAL MANAGEMENT LTD

Tel: +44 (0)20 7610 5350 Fax: +44 (0)20 7610 5301
Platinm-All Star
Platinm-All Weather
Platinm-Dynasty
YTD
Okasan US
Okasan Asset
JPYJPN
ShortTermHighYieldBondOp Management Co., Ltd.
Fidelity US
FIL Investments
JPYJPN
HighYieldFundAssetGrowth (Japan) Limited
Fidelity US
FIL Investments
JPYJPN
High Yield
(Japan) Limited
SMAM US
Sumitomo Mitsui
JPYJPN
ShortTermHighYieldBondUnHdg Asset Management Co., Lt
Fidelity
FIL Investments
JPYJPN
High Yield Bond A (Japan) Limited
MHAM US High Mizuho Asset
JPYJPN
Yield Bond Fund USD Management Co., Ltd.
SMTAM PIMCO Sumitomo Mitsui
JPYJPN
USH/YBdCcySelD1YUSD Trust Ast Mgmt Co., Ltd.
Invesco
INVESCO Asset
JPYJPN
Monthly Income Management (Japan) Limited
SMAM US
Sumitomo Mitsui
JPYJPN
High-YieldBondNoHedged Asset Management Co., Lt
Nikko PIMCO
Nikko Asset
JPYJPN
High Yield A
Management Co., Ltd.
NAV
GF AT LB DATE CR
TNI MENA Special Sits Fund OT

TNI MENA UCITS Fund
OT
TNI UAE Blue Chip Fund
OT
LEGAL
CURR. BASE
FUND MGM'T CO.
27.0
NS
27.3
27.6
23.5
32.7
26.5
29.6
24.9
NS
28.3
29.8
26.2
14.5
14.5
13.3
15.8
14.0
14.5
NS
9.8
8.8
10.6
8.6
8.5
8.9
8.6
NS
NS
NS
NS
NS
NS
NS
NS
NS
NS
NS
NS
NS
17.6
17.8
16.7
20.1
16.5
17.7
NS
8.3
6.5
9.8
6.0
6.1
NS
5.9
NS
NS
NS
NS
NS
NS
NS
NS
NS
NS
NS
NS
NS
19.5
NS
NS
NS
NS
NS
NS
NS
NS
NS
8.0
8.1
NS
8.1
[ALTERNATIVE INVESTMENT FUNDS www.WSJ.com] Advertisement
n PLATINUM CAPITAL MANAGEMENT

Tel: +44 207 024 9840, www.platinumfunds.net
6.5
Funds investing primarily in riskier and lower-quality bonds. The funds hold high yield portfolios, exposed
to economic and credit risk. Ranked on % total return (dividends reinvested) in U.S. dollars for one year
ending June 25, 2015
HONG KONGHong Kongs securities regulator said Thursday it objected to a plan put forward by the
citys stock exchange to allow dualclass shares and other weightedvoting structures in certain circumstances, potentially dealing a fatal
blow to the proposal.
In some jurisdictions, including
the U.S., companies can set up such
share structures to give more rights
to one class of their investors than
to another. One recent prominent
example was Alibaba Group Holding Ltd.s listing in New York in September, raising $25 billion with a
share structure that allows its partners to nominate the majority of the
board in perpetuity.
Hong Kongs loss of the Alibaba
offering to the U.S. prompted the
citys stock exchange to solicit investors views on changing its own
rules. After that survey last fall
drew a mixed response, the exchange said last week it was planning to begin a second round of
market consultations on whether to
allow such structures.
However, the Securities and Futures Commission said Thursday
that Hong Kongs reputation would
be harmed if [weighted-voting
rights] structures became commonplace. The agency said it had seen a
more detailed version of the draft
proposal than the excerpts the exchange released last week.
The objection by the securities
regulator is an embarrassment for
06/24 USD
06/24 HKD
06/24 USD
06/24 USD
06/24 HKD
06/24 USD
06/24 USD
06/24 USD
06/24 USD
06/24 USD
06/24 HKD
06/24 USD
06/24 USD
06/24 USD
06/24 HKD
06/24 USD
06/24 USD
06/24 USD
06/24 USD
06/24 USD
06/24 USD
06/24 HKD
06/24 USD
06/24 USD
06/24 USD
06/24 USD
06/24 USD
06/24 USD
06/24 USD
06/24 USD
06/24 USD
06/24 USD
06/24 USD
06/24 USD
06/24 USD
06/24 USD
06/17 HKD
06/24 HKD
06/24 USD
06/24 USD
06/24 USD
04/09 HKD
06/24 USD
06/24 USD
EQ BMU 06/17 USD
World High Yield Bond
BY JULIE STEINBERG
n PT CIPTADANA ASSET MANAGEMENT

Tel: +62 21 25574 883 Fax: +62 21 25574 893 Website: www.ciptadana.com
Indonesian Grth Fund
Fund Scorecard
Winton Evolution EUR Cls H

Winton Evolution GBP Cls G
Winton Evolution USD Cls F
Winton Futures EUR Cls C
Winton Futures GBP Cls D
Winton Futures JPY Cls E
Winton Futures USD Cls B
GL
GL
GL
GL
GL
GL
GL
OT
OT
OT
OT
OT
OT
OT
CYM
CYM
CYM
VGB
VGB
VGB
VGB
05/29
05/29
05/29
05/29
05/29
05/29
05/29
EUR 1403.67
GBP 1425.77
USD 1780.07
EUR
291.04
GBP
318.08
JPY 20324.17
USD 1035.07
For information about listing your funds, please contact: Freda Fung tel: +852 2831 2504; email: [email protected]
%RETURN
YTD 12-MO 2-YR
0.2
-18.2
3.4
2.6
-55.9
-1.2
-8.5
-63.7
-3.1
4.7
-66.0
-3.0
5.7
-45.6
0.3
1.2
-44.3
NS
1.7
1.7
1.3
1.6
1.6
1.1
1.2
17.2
17.6
16.7
13.6
14.0
13.4
13.2
12.0
12.3
11.9
9.0
9.3
9.0
8.9
LIST YOUR
FUNDS
In print & online. Contact:

[email protected]
BLUE CHIPS & BONDS

Dow Jones Asia Titans: Thursday's best and worst...
Major players &

benchmarks
At right, a look at the Asia Titans, the biggest and best known
companies in Asia. Below, some of the Dow Jones Titans indexes
of biggest and most liquid stocks in individual countries and regions
Giants around the world

Dow Jones Country Titans
Previous session
INDEX PERFORMANCE
Year-to-date
52-week
Italy
0.72%
Netherlands
0.30
18.4
26.8
China 88
-3.30
18.4
102.2
France
0.05
18.3
14.2
23.6%
9.9%
Germany
0.02
14.2
13.5
Hong Kong
-0.38
13.0
11.9
Spain
-0.14
11.3
6.1
Sweden
-0.36
10.3
17.2
U.K.
-0.47
Switzerland
-0.11
3.6
-0.16
South Korea
-0.89
-1.5%
0.1
-11.8
Turkey
-1.17
-3.8
3.4
Brazil
-1.88
-0.82%
9.8%
11.0%
0.40
9.7
15.0
Asian 50
-0.36
9.0
1.2
Constructn Mat
-0.06
8.0
-5.4
7.7
17.3
7.1
-0.5
Telecomm
0.28
6.7
2.8
Media
0.69
6.3
12.8
Pers H'hold Gds
0.03
6.0
5.6
Fincl Svcs
0.04
5.9
Chemicals
0.08
5.6
Global 50
0.15
2.1
-0.1
Technology
0.14
1.1
7.4
Arab 50
-0.35
35.1%
Electrical Components Equipment
77.04
99.00
1.43
12.6
12.6
1.36
Nippon Telegraph Telephone
Japan
Fixed Line Telecommunications
52-week
YTD
2.74
9,075
45.1
46.1
Taiwan Semiconductor ManufacturingTaiwan
Semiconductors
45.57
146.50
1.03
17.7
3.9
AIA Group
Life Insurance
19.99
52.70
0.76
35.6
22.6
-2.73%
44.6
28.6
-2.53
-4.2
-4.4
Hong Kong
Fanuc
Japan
Industrial Machinery
$1.24
25,645
Samsung Electronics
Korea
Semiconductors
0.21
1,269,000
China Life Insurance
Hong Kong
Life Insurance
38.21
34.25
-2.14
67.5
13.0
China Mobile
Hong Kong
Mobile Telecommunications
13.16
101.30
-1.84
34.5
11.7
Komatsu
Japan
Commercial Vehicles Trucks
5.15
2,524
-1.68
7.4
-6.0
Volume
in millions
Seven I Holdings
2.09
Japan (Broadline Retailers)
Tokio Marine Holdings
1.63
Japan (Property Casualty Insurance)
Shin-Etsu Chemical
1.54
Japan (Specialty Chemicals)
Canon
6.17
Japan (Electronic Office Equipment)
Commonwealth Bk Australia
2.83
Australia (Banks)
Honda Motor
3.71
Japan (Automobiles)
Reliance Industries GDR
0.37
United Kingdom (Exploration Production)
Rio Tinto
1.30
Australia (General Mining)
Nippon Steel Sumitomo Metal
21.90
Japan (Iron Steel)
Mitsubishi
3.30
Japan (Industrial Suppliers)
BHP Billiton
6.18
Australia (General Mining)
Sumitomo Mitsui Financial Group
5.38
Japan (Banks)
National Australia Bank
4.93
Australia (Banks)
East Japan Railway
0.61
Japan (Travel Tourism)
KDDI
3.99
Japan (Mobile Telecommunications)
Mizuho Financial Group
218.13
Japan (Banks)
Industrial Commercial Bank of China 274.19
Hong Kong (Banks)
Sun Hung Kai Properties
3.00
Hong Kong (Real Estate Holding Development)
SoftBank
4.82
Japan (Mobile Telecommunications)
Takeda Pharmaceutical
1.79
Japan (Pharmaceuticals)
14.5
-1.7
-7.3
-4.7%
37.6%
Taiwan
Company/Country (Industry)
Health Care
0.06
1.62%
...And the rest of Asia's blue chips
Tiger 50*
-0.02
2,388
Hon Hai Precision Industry
Dow Jones Regional Sector Titans
Auto & Parts
$5.66
Japan
-31.7
Retail
Mobile Telecommunications
NTT DoCoMo
0.8
-11.4
STOCK PERFORMANCE
Previous session
Industry
5.3
Singapore
Previous
close, in
local currency
Country
0.1
1.6
Volume
in millions
Company
*Asia excluding Japan

Source: SIX Financial Information
Latest,
in local
currency
STOCK PERFORMANCE
Latest 52-week
YTD
Company/Country (Industry)
5,307
0.61%
24.9%
21.8%
5,168
0.54
52.5
31.4
7,633
0.30
23.5
-3.0
4,210
0.23
26.0
9.6
87.29
0.11
6.4
1.9
4,061
...
14.9
15.2
31.00
...
-9.9
9.9
55.63
-0.07
-7.1
-4.1
330.50
-0.09
1.7
9.8
2,795
-0.13
31.3
26.1
28.51
-0.14
-16.4
3.9
5,513
-0.16
28.1
26.0
34.45
-0.20
3.6
2.5
11,275
-0.27
42.5
23.6
2,958
-0.29
43.8
16.2
271.00
-0.29
30.3
33.8
6.70
-0.30
37.3
18.4
128.90
-0.31
21.7
9.0
7,485
-0.44
-1.6
3.8
6,031
-0.59
28.1
20.7
Volume
in millions
Australia New Zeald Bkg

3.72
Australia (Banks)
PetroChina
99.98
Hong Kong (Integrated Oil Gas)
Nomura Holdings
14.84
Japan (Investment Services)
Hyundai Motor
0.55
Korea (Automobiles)
Mitsubishi UFJ Financial Group
47.41
Japan (Banks)
Hitachi
13.74
Japan (Electronic Equipment)
Woodside Petroleum
2.00
Australia (Exploration Production)
Mitsui Co.
4.93
Tencent Holdings
13.79
Hong Kong (Internet)
CNOOC
75.01
Hong Kong (Exploration Production)
Westpac Banking
4.57
Australia (Banks)
POSCO
0.22
Korea (Iron Steel)
Woolworths
3.69
Australia (Food Retailers Wholesalers)
China Construction Bank
316.55
Hong Kong (Banks)
Toyota Motor
5.50
Japan (Automobiles)
Wesfarmers
3.89
Australia (Home Improvement Retailers)
Itochu
5.55
Bank of China
528.55
Hong Kong (Banks)
Japan Tobacco
2.97
Japan (Tobacco)
Nissan Motor
7.30
Japan (Automobiles)
Latest,
in local
currency
STOCK PERFORMANCE
Latest 52-week
YTD
33.44
-0.59%
-1.4%
4.2%
9.04
-0.66
-7.9
5.4
835.90
-0.72
14.4
21.1
132,000
-0.75
-42.5
-21.9
905.00
-0.79
45.5
36.2
836.60
-0.81
12.9
-7.1
35.68
-0.97
-14.2
-6.1
1,693
-0.99
3.3
4.4
162.00
-1.04
36.9
44.0
11.34
-1.05
-17.7
8.6
33.31
-1.07
-3.3
0.5
227,500
-1.09
-25.4
-17.4
26.38
-1.20
-26.9
-14.0
7.28
-1.22
24.9
14.6
8,338
-1.31
38.8
10.3
39.91
-1.33
-6.3
-4.3
1,692
-1.40
29.3
30.9
5.13
-1.40
47.8
17.4
4,516
-1.41
21.6
35.7
1,258
-1.57
29.6
19.0
Sources: SIX Financial Information; WSJ Market Data Group
Tracking
credit
markets &
dealmakers
Credit derivatives
Spreads on credit derivatives are one way the market rates
creditworthiness. Regions that are treading in rough waters
can see spreads swing toward the maximumand vice versa.
Indexes below are for five-year swaps.
Markit iTraxx Indexes
Index: series/version
Mid-spread,
in pct. pts.
Mid-price
Europe: 23/1
Eur. High Volatility: 20/1
Europe Crossover: 23/1
Asia ex-Japan IG: 23/1
Japan: 23/1
SPREAD RANGE, in pct. pts.

since most recent roll
Maximum Minimum
Average
Coupon
Spreads
Spreads on
ve-year swaps
for corporate
debt; based on
Markit iTraxx
indexes.
At its most basic, the pricing of credit-default swaps measures how much a buyer has to pay to purchase-and
how much a seller demands to sell-protection from default on an issuer's debt. The snapshot below gives a
sense which way the market was moving yesterday.
Showing the biggest improvement...
And the most deterioration
CHANGE, in basis points
CHANGE, in basis points
0.68
101.56%
0.01%
0.76
0.53
0.62
0.52
101.68
0.01
0.66
0.48
0.54
Kowloon Canton Rwy
39
Tohoku Elec Pwr
40
2.95
109.14
0.05
3.35
2.43
2.79
Mitsui Chems
79
12
Nishimatsu Constr
77
15
4
Yesterday Yesterday Five-day 28-day
Yesterday Yesterday Five-day 28-day
1.08
99.64
0.01
1.15
1.04
1.08
Bridgestone
20
Cen Japan Rwy
27
0.55
102.20
0.01
0.62
0.48
0.54
Odakyu Elec Rwy
25
...
MARUI GROUP
43
Nippon Paper Inds
87
YAMAHA Mtr
29
2
2
Note: Data as of June 24
NOTICE TO READERS
All statistics published in
The Wall Street Journal
Asia from markets outside
the Asian-Pacific region
reflect preliminary data.
Credit-default swaps: Asian companies
In percentage points
Index roll
Europe Sub Financials

t
Europe
t
2.00
1.50
1.00
ANA HLDGS
74
12
Mitsubishi Heavy Inds
27
Hongkong Ld
109
Fuji Heavy Inds
28
SANYO Elec
42
East Japan Rwy
23
Korea Dev Bk
53
Mitsui Fudosan
36
Bk of Tokyo Mitsubishi
54
13
Korea Dep Ins
48
Source: Markit Group
0.50
0
Jan. Feb. Mar. April May June

2015
Source: Markit Group
WSJ.com>>
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Behind US deals: Bank revenues from equity capital markets

Behind every IPO,
follow-on or
convertible equity
offering is one or
more investment
banks. At right,
investment banks
historical and
year-to-date
revenues from global
equity-capital-market
(ECM) deals
n Equity capital markets n Debt capital markets (both in billions, left axis)
ECM as a percentage of total
75%
(right axis)
t
50
25
0
2007
2008
2009
2010
2011
2012
2013
2014
2015
Source: Dealogic
GLOBAL MARKETS LINEUP

Commodities
Currencies
Prices of futures contracts with the most open interest
EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; NYBOT: New York Board of Trade; MDEX: Bursa Malaysia
Derivatives Berhad; MATIF: Marche a Terme International de France; LME: London Metal Exchange; NYMEX: New York Mercantile Exchange;
ICE: IntercontinentalExchange. *Data as of 6/24/2015.
Year
ONE-DAY CHANGE
Commodity
Exchange
Last price
Net
Percentage
high
Corn (cents/bu.)
Soybeans (cents/bu.)
Wheat (cents/bu.)
Live cattle (cents/lb.)
Cocoa ($/ton)
Coffee (cents/lb.)
Sugar (cents/lb.)
Cotton (cents/lb.)
Rapeseed (euro/ton)
Cocoa (pounds/ton)
Robusta coffee ($/ton)
CBOT
CBOT
CBOT
CME
ICE-US
ICE-US
ICE-US
ICE-US
MATIF
ICE-EU
ICE-EU
Copper ($/lb.)
Gold ($/troy oz.)
Silver ($/troy oz.)
Aluminum ($/ton)*
Tin ($/ton)*
Copper ($/ton)*
Lead ($/ton)*
Zinc ($/ton)*
Nickel ($/ton)*
COMEX
COMEX
COMEX
LME
LME
LME
LME
LME
LME
Crude oil ($/bbl.)

Heating oil ($/gal.)
RBOB gasoline ($/gal.)
Natural gas ($/mmBtu)
Brent crude ($/bbl.)
Gas oil ($/ton)
380.25
975.75
532.25
148.525
3,265
133.45
11.88
65.45
391.00
2153.00
1805.00
8.75
19.75
9.00
-1.800
-17
-1.65
-0.14
0.86
3.75
-11.00
-13.00
2.6220
1172.70
15.840
1,730.00
15,250.00
5,779.50
1,805.00
2,058.00
12,830
-0.0020
-0.20
-0.050
7.00
40.00
45.50
20.00
18.00
130
59.84
1.8716
2.0025
2.826
63.78
575.75
-0.43
-0.0115
-0.0223
0.044
-0.38
-8.00
NYMEX
NYMEX
NYMEX
NYMEX
ICE-EU
ICE-EU
426.50
1,031.50
613.00
156.300
3,316
191.40
16.70
66.99
392
2,180
2,116
2.36%
2.07
1.72
-1.20%
-0.52
-1.22
-1.16
1.33
0.97
-0.51
-0.72
Year
low
351.75
895.75
469.25
137.950
2,667
126.30
11.52
61.28
330
1,844
1,592
0.41
0.26
0.79
1.12
0.88
1.02
64.12
2.0684
2.1371
3.1880
71.37
630.75
-0.71
-0.61
-1.10
1.58
-0.59
-1.37
AMERICAS
Per euro
In euros
Per
U.S. dollar
Argentina peso-a
10.1580
0.0984
9.0725
0.1102
3.4854
0.2869
3.1129
0.3212
Canada dollar
1.3836
0.7228
1.2359
0.8092
Chile peso
706.84
0.001415
631.30
0.001584
2861.00 0.0003495
2555.24
0.0003914
Ecuador US dollar-f
1.1197
0.8931
Mexico peso-a
17.3718
0.0576
15.5154
0.0645
Peru sol
3.5469
0.2819
3.1679
0.3157
Uruguay peso-e
30.132
0.0332
26.910
0.0372
U.S. dollar
1.1197
0.8931
7.05
0.141754
6.30
0.158729
Venezuela bolivar
Australia dollar
1.4465
0.6913
1.2920
China yuan
6.9524
0.1438
6.2094
0.1610
Hong Kong dollar
8.6800
0.1152
7.7522
0.1290
India rupee
71.1130
0.0141
63.5137
0.0157
14897
0.0000671
Indonesia rupiah
138.42
0.007224
123.64
0.008088
208.71
0.004792
186.21
0.005370
Macau pataca
8.9395
0.1119
7.9842
0.1252
Malaysia ringgit-c
4.2032
0.2379
3.7540
0.2664
New Zealand dollar
1.6206
0.6170
1.4476
0.6908
Pakistan rupee
113.989
0.0088
101.798
0.0098
Philippines peso
50.468
0.0198
45.075
0.0222
Singapore dollar
1.5040
0.6649
1.3433
0.7444
1245.03 0.0008032
WSJ.com>>
Close
ASIA-PACIFIC
DJ Asia-Pacific TSM
1553.43
-2.91
Australia
SPX/ASX 200
5632.70
-54.10
China
Shanghai Composite
4527.78
Net change
-0.19%
-0.95
-162.37 -3.46
27145.75
-259.22
India
S&P BSE Sensex
27895.97
166.30
Indonesia
Jakarta Composite
4920.04
-33.47
Nikkei Stock Average
PERFORMANCE
Percentage change
Yr.-to-date
PREVIOUS SESSION
Index
Japan
20771.40
0.60%
-0.68
-96.63
0.02962
6.6634
0.1501
0.003199
279.22
0.003581
0.007581
Iceland krona
147.69
0.006771
131.91
Norway krone
8.7524
0.1143
7.8177
0.1279
Poland zloty
4.1721
0.2397
3.7263
0.2684
Russia ruble-d
61.192
0.01634
54.653
0.01830
Sweden krona
9.2325
0.1083
8.2465
0.1213
Switzerland franc
1.0485
0.9538
0.9364
1.0679
2.9737
0.3363
2.6559
0.3765
23.7060
0.0422
21.1500
0.0473
0.7119
1.4048
0.6358
1.5728
Bahrain dinar
0.4221
2.3689
0.3770
2.6525
Egypt pound-a
8.5369
0.1171
7.6246
0.1312
Israel shekel
4.2274
0.2366
3.7756
0.2649
3.3068
U.K. pound
MIDDLE EAST/AFRICA
Kuwait dinar
0.3386
2.9534
0.3024
Oman sul rial
0.4311
2.3196
0.3850
2.5972
Qatar rial
4.077
0.2453
3.641
0.2747
Saudi Arabia riyal
4.1989
0.2382
3.7502
0.2667
South Africa rand
13.5608
0.0737
12.1125
0.0826
4.1126
0.2432
3.6728
0.2723
United Arab dirham
a-floating rate b-commercial rate c-government rate c-commercial rate d-Russian Central Bank rate.
Source: Tullett Prebon
Euro Stoxx
40.0
122.1
Denmark
OMX Copenhagen
862.70
1.19
17.0
Finland
OMX Helsinki
8573.21
-13.37
1.4
11.3
France
CAC-40
5041.71
-3.64
-5.9
1.0
Germany
DAX
11473.13
1.87
35.7
Italy
FTSE MIB
23642.62
199.55
AEX
492.39
-0.23
Euro Stoxx 50
-0.74
9045.32
-36.49
South Korea
Kospi
2085.06
-0.47
Taiwan
Weighted
9476.34
79.03
Thailand
SET
1519.47
1.21
EUROPE
Stoxx Europe 600
396.39
-0.93
Stoxx Europe 50
3421.98
-15.45
-0.53
4.9
10.0
Turkey
BIST 100
83277.09
-863.56
-0.04
-0.5
2.2
U.K.
FTSE 100
6807.82
-36.98
-0.02
8.8
4.5
AMERICAS
DJ Americas
519.35
1.00
0.84
0.08
-0.23
-0.45
PERFORMANCE
YearThree-yr.,
to-date
52-wk. annualized
4.8%
2.1%
3.5
-0.4
2.0
-0.0
8.9
3.4
9.6
1.2
7.2
-4.4
4.4
-3.1
9.0
0.6
8.9
2.1
18.0
25.1
11.8
21.4
44.6 134.8
13.7%
13.7
11.0
10.2
9.9
14.2
4.4
8.8
5.5
15.6
13.9
30.6
1.8
1.7
Brazil
Bovespa
53019.89
-822.64
1.5
2.8
Argentina
Merval
11487.96
-65.44
Mexico
IPC
45496.24
71.30
15.7
15.9
13.9
13.0
Price-toDividend earnings
yield*
ratio* S&P Dow Jones Index
0.60%53.06
1.93 23.23
6.00 16.12
6.80 14.19
2.03 21.66
2.38 18.95
2.07 12.89
3.76 30.31
Last
Shenzhen -c
760.62
U.S. TSM
22136.43
Global Select Div
237.86
Asia/Pacific Select Div 301.71
Hong Kong Select Div -c 196.68
U.S. Select Dividend -d 1399.29
Islamic Market
2985.50
Islamic Market 100
3297.32
Islamic China/HK Titans 30 1989.03
Sustainability Korea -c 1412.39
Brookfield Infrastructure 3488.87
DJ Commodity
558.87
Net
change
-27.40
25.07
-0.75
-2.23
-0.91
-0.76
-0.47
1.07
-16.81
-8.54
-9.43
1.05
Daily
PERFORMANCE
YearThree-yr.,
to-date
52-wk. annualized
-3.48% 74.4% 139.3%

0.11
3.3
8.0
-0.31
-0.7
-11.4
-0.73
-2.6 -16.9
-0.46
0.9
0.4
-0.05
-2.0
3.4
-0.02
4.3
3.1
0.03
3.6
3.9
-0.84
14.8
14.1
-0.60
2.5
-3.6
-0.27
-2.5
-3.4
0.19
-0.3 -22.5
34.3%
17.7
7.0
1.3
3.9
16.1
13.1
13.7
11.2
0.5
11.9
-6.3
Source: S&P Dow Jones Indices
U.S.-dollar and euro foreign-exchange rates in global trading
0.1221
0.0006
0.063
5.355
0.0070
2.065
0.172
5.771
8.279
0.251
0.230
RUPEE
63.514
49.160
99.894
51.393
10.240
71.113
8.193
0.0048
0.514
43.875
0.0571
16.919
1.409
47.282
67.828
2.052
1.881
RUPIAH
13305.00
10298.07
20926.10
10765.87
2144.17
14896.94
1716.30
209.48
107.62
9191.10
11.96
3544.22
295.17
9904.71
14208.67
438.10
394.11
YEN
123.635
95.690
194.450
100.043
19.911
138.420
15.948
1.9466
0.0093
85.430
0.1112
32.934
2.743
92.042
132.030
3.995
3.662
NZ$
1.448
1.120
2.277
1.171
0.233
1.621
0.187
0.0228
0.0001
0.012
0.0013
0.386
0.032
1.078
1.546
0.047
0.043
WON
1111.98
860.67
1748.92
899.77
179.01
1245.03
143.44
17.51
0.08
8.99
768.16
296.21
24.67
827.80
1187.38
35.93
32.94
0.08%
-0.00%
0.14
52-wk.
16.4%
13.5%
14.8
11.0
27.7
29.5
-0.16
10.5
12.8
-0.07
18.0
13.0
17.0
16.3
0.02
0.85
-0.05
-1.06
-0.12
-0.40
-1.03
-0.54
0.19
-1.53
-0.57
0.16
24.4
10.1
16.0
19.5
19.0
-31.9
10.0
3.1
0.7
5.4
-2.9
5.4
3.7
1.1
2.4
5.1
6.0
-0.8
33.9
43.9
5.4
6.2
European and Americas index data are as of 12:00 p.m. ET. Sources: SIX Financial Information; WSJ Market Data Group
*Fundamentals are based on data in U.S. dollar. Footnotes: c-in local currency. d-dividends reinvested. p-previous day. Note: All data as of 11:30 a.m. ET.
0.115
0.0141
0.0001
0.007
0.617
0.0008
0.238
0.020
0.665
0.954
0.029
0.026
-0.04
3.1
SMI
-1.46
6.952
0.801
0.0977
0.0005
0.050
4.289
0.0056
1.653
0.138
4.625
6.630
0.201
0.184
3610.91
4.1
Switzerland
3349.87
HK$
7.752
6.000
12.193
6.273
1.248
8.680
0.29
16.8
Straits Times
EURO
0.893
0.691
1.405
0.723
0.144
372.01
6.1
Singapore
YUAN
6.209
4.810
9.753
5.016
Net change
-0.73
-0.80
Daily
Euro Zone
PERFORMANCE
Percentage change
Yr.-to-date
PREVIOUS SESSION
-10.13
-61.42
-0.01%
-0.03
0.05
-0.20
-0.15
-0.20
-0.21
-0.38
-0.92
-1.08
-1.15
-3.61
Close
-13.50
7581.91
3457.40 -0.46
2588.98 -0.77
243.31
0.12
1553.27 -3.07
182.92 -0.28
3343.74 -6.62
260.26 -0.54
155.00 -0.60
537.31 -4.98
546.65 -5.95
5037.46 -58.78
621.88 -23.28
Index
941.32
PSEi
Net
change
Region/Country
11308.4
Philippines
S&P Dow Jones Indices
52-wk.
IBEX 35
-254.02
0.199
1.384
0.159
0.0195
0.0001
0.010
0.854
0.0011
0.329
0.027
0.920
1.320
0.040
0.037
0.1340
312.63
RTSI
34077.92
0.514
0.103
0.712
0.082
0.0100
0.00005
0.005
0.439
0.0006
0.169
0.014
0.473
0.679
0.021
0.019
7.4604
Hungary forint
Spain
KSE 100
2.032
1.045
0.208
1.447
0.167
0.0203
0.0001
0.010
0.893
0.0012
0.344
0.029
0.962
1.380
0.042
0.038
Denmark krone
Russia
Pakistan
0.774
1.573
0.809
0.1610
1.120
0.129
0.0157
0.0001
0.008
0.691
0.0009
0.266
0.022
0.744
1.068
0.032
0.030
0.0411
11.8
-42.20
U.S.
Australia
Britain
Canada
China
Euro
Hong Kong
India
Indonesia
Japan
New Zealand
South Korea
Malaysia
Philippines
Singapore
Switzerland
Taiwan
Thailand
24.307
-9.2
5733.29
C$
1.236
0.957
1.944
0.0367
3.0
NZSX-50
0.636
0.492
27.215
32.3
New Zealand
A$
1.292
1.1197
Czech Rep. koruna-b
-2.5
-14.87
US$
0.8931
18.7
-8.98
1716.81
Cross rates
-0.86
1670.91
Last
0.03231
33.760
0.1475
Netherlands
Topix
Global TSM
Global DOW
Global Titans 50
Asia/Pacific TSM
S&P BMI Asia Pac Emg Mkts
Dev Europe TSM
S&P BMI Emg Markets
Asian Titans 50
BRIC 50
S&P BMI China
China Offshore 50
Shanghai -c
30.948
0.02646
0.5724
6.778
4.1%
19.0
-0.46
Kuala Lumpur Composite
2.90% 21.25
2.67 19.39
2.86 16.93
2.21 17.30
2.17 17.95
2.99 22.08
4.54 16.44
2.99 12.97
9.77 13.09
2.07 14.41
2.38 12.58
1.13 25.97
0.02886
37.799
1.7470
0.1318
8.9%
15.0
-0.95
Malaysia
yield*
ratio* S&P Dow Jones Index
34.651
Thailand baht
0.5112
7.589
Turkey lira
0.0074733
Taiwan dollar
1.956
Croatia kuna
Ukraine hryvnia
1111.98 0.0008993
133.81
Per euro
Bulgaria lev
Stock indexes from around the world, grouped by region. Shown in local-currency terms.
Region/Country
Hang Seng
149.82 0.0066747
Per
In
U.S. dollar
U.S. dollars
Per
In
In euros
U.S. dollar
U.S. dollars
In euros
Euro zone euro
13305 0.0000752
Japan yen
Sri Lanka rupee
Hong Kong
EUROPE
0.7740
Kazakhstan tenge
South Korea won
Sources: SIX Financial Information; WSJ Market Data Group
Major stock market indexes
Per euro
ASIA-PACIFIC
48.71
1.6136
1.5242
2.5690
53.19
481.00
Follow the markets throughout the day with updated stock quotes, news and commentary at at
WSJ.com. Also, receive email alerts that summarize the days trading in Europe and Asia. To sign
up, go to WSJ.com/Email
In
U.S. dollars
Brazil real
Colombia peso
2.9545
2.4290
1,309.00 1,143.80
18.445
15.350
1,937.50 1,690.50
19,750.00 14,425.00
6,445.00 5,369.00
2,137.00 1,698.00
2,377.00 2,005.00
15,540
12,320
-0.08
-0.02
-0.31
London close on June 25
RINGGIT PH. PESO

3.754
45.075
2.906
34.897
5.904
70.894
3.038
36.473
0.605
7.259
4.203
50.468
0.484
5.815
0.0591
0.7097
0.0003
0.0034
0.030
0.365
2.593
31.138
0.0034
0.0405
12.007
0.083
2.795
33.555
4.009
48.131
0.121
1.457
0.111
1.335
S$ S FRANC
1.343
0.936
1.040
0.725
2.113
1.473
1.087
0.758
0.216
0.151
1.504
1.048
0.173
0.121
0.0211
0.0147
0.0001
0.0001
0.011
0.0076
0.928
0.647
0.0012
0.0008
0.358
0.249
0.030
0.021
0.697
1.435
0.043
0.030
0.040
0.028
TW$
30.948
23.954
48.675
25.042
4.984
34.651
3.992
0.4873
0.0023
0.250
21.379
0.0278
8.244
0.687
23.039
33.046
0.917
BAHT
33.760
26.130
53.098
27.317
5.435
37.799
4.355
0.5315
0.0025
0.273
23.321
0.0304
8.993
0.749
25.132
36.049
1.091
Source: Tullett Prebon
MSCI indexes
Developed and emerging-market regional and country indexes
from MSCI as of June. 25, 2015
yield
ratio MSCI Index
2.40% 19
MSCI ACWI
LOCAL-CURRENCY
Last
435.41
PERFORMANCE
Daily
YTD
0.49%
4.4%
52-wk.
3.3%
2.40
19
World (Developed Markets) 1,785.70
0.58
4.4
4.1
1.80
27
World Small Cap
0.70
7.6
6.4
2.40
19
Kokusai (World ex-Japan) 1,794.02
0.61
3.6
3.3
2.90
18
EAFE
1,913.50
0.32
7.8
-2.2
344.62
2.50
14
Emerging Markets (EM)
993.31
-0.27
3.9
-3.3
2.80
14
AC ASIA PACIFIC EX-JAPAN 489.84
-0.01
4.8
0.5
2.40
13
AC Far East ex-Japan
568.85
-0.16
7.4
5.9
1.70
19
Japan
1,028.50
0.15
18.7
39.1
2.50
12
China
78.27
0.73
18.5
29.7
1.10
25
China A (China Domestic)
4,963.50
2.15
46.9
131.4
2.50
12
Hong Kong
15,478.38
-0.58
13.4
13.2
1.40
19
India
1,032.45
-0.21
1.6
13.4
1.40
12
Korea
551.44
0.20
2.8
-5.4
3.20
16
Malaysia
604.45
0.33
-2.0
-8.6
3.50
14
Singapore
1,751.28
0.23
-1.1
0.6
2.70
14
Taiwan
352.39
0.13
2.7
8.8
2.90
17
Thailand
528.63
1.14
1.2
8.2
4.50
15
Australia
1,159.54
0.06
4.9
3.1
4.40
20
New Zealand
109.99
0.28
-3.1
-2.5
1.90
21
US BROAD MARKET
3.20
19
EUROPE
2,403.74
0.80
3.3
10.3
134.81
-0.35
15.5
14.8
Source: MSCI
SCANNING THE GLOBE

Dow Jones Industrial Average
LAST: 18003.04
YEAR TO DATE:
OVER 52 WEEKS
Nasdaq Composite Index
P/E: 16
s 36.97, or 0.21%
s 179.97, or 1.0%
s 1,156.91, or 6.9%
High
Close
Low
S&P 500 Index
P/E: 23*
LAST: 5134.46
YEAR TO DATE:
OVER 52 WEEKS
s 12.05, or 0.24%
P/E: 22
LAST: 2112.69
YEAR TO DATE:
OVER 52 WEEKS
s 398.41, or 8.4%
s 755.42, or 17.3%
s 4.11, or 0.19%
s 53.79, or 2.6%
s 155.47, or 7.9%
19000
5450
2400
18500
5300
2300
18000
5150
2200
17500
5000
2100
17000
4850
2000
50day
moving average
16500
27
2
10
Apr.
17
24
1
8
May
15
22 29
5
June
12
4700
19
27
2
10
Apr.
17
24
1
8
May
15
22 29
5
June
12
1900
19
27
2
10
Apr.
17
24
1
8
May
*Price-to-earnings ratio for the Nasdaq 100 Note: Price-to-earnings ratios are for trailing 12 months
Stock
Symbol
Volume,
in millions
Latest
CHANGE
Points
Percentage
AmExpress
Apple
Boeing
Caterpillar
Chevron
CiscoSys
CocaCola
Disney
DuPont
ExxonMobil
GenElec
GoldmanSachs
HomeDpt
Intel
IBM
JPMorgChas
JohnsJohns
McDonalds
Merck
Microsoft
Nike B
Pfizer
ProctGamb
3M
TravelersCos
UnitedTech
UtdHlthGp
Verizon
VISA ClA
AXP
AAPL
BA
CAT
CVX
CSCO
KO
DIS
DD
XOM
GE
GS
HD
INTC
IBM
JPM
JNJ
MCD
MRK
MSFT
NKE
PFE
PG
MMM
TRV
UTX
UNH
VZ
V
2.5
15.4
1.0
1.5
2.4
6.1
4.3
3.1
2.4
4.1
11.0
0.9
2.0
11.1
1.0
6.0
2.9
1.8
3.4
9.0
1.9
8.9
2.4
1.0
0.6
1.9
2.7
6.5
1.8
$80.05
128.17
142.81
87.16
98.99
28.50
40.26
115.01
66.34
84.54
27.15
213.71
112.98
32.21
166.60
69.00
99.51
96.38
57.91
45.65
105.14
33.95
79.72
156.72
98.20
113.78
122.46
47.80
68.71
0.69
0.06
0.19
1.01
0.28
0.02
0.07
1.24
0.14
0.14
0.11
0.72
0.63
0.30
0.37
0.02
0.18
0.26
0.33
0.02
1.08
0.28
0.21
0.82
0.58
0.19
3.29
0.51
0.15
0.85%
0.05
0.13
1.15
0.28
0.05
0.17
1.09
0.21
0.17
0.40
0.34
0.56
0.93
0.22
0.03
0.18
0.27
0.57
0.03
1.02
0.82
0.27
0.52
0.58
0.17
2.76
1.08
0.22
WalMart
WMT
2.4
72.30
0.08
0.12
22 29
5
June
12
19
Sources: WSJ Market Data Group; Birinyi Associates
U.S. stocks: most active...
DJIA component stocks
15
ADRs of Asian companies*
Stock
Volume,
Symbol in millions
Latest
CHANGE
Points
Percentage
VelocityShares3xLg
SPDR S&P 500
VelocityShares3x
BankAm
AT&T
BrcliPathVIX ShFut
Vale ads
TransUnion
iShMSCIEmgMarkets
PetrlBra ADS
ClvlndBioLabs
ChespkeEngy
SPDR FnclSelSct
Apple
FacebookClA
UGAZ
SPY
UWTI
BAC
T
VXX
VALE
TRU
EEM
PBR
CBLI
CHK
XLF
AAPL
FB
45.4
40.3
39.1
30.0
22.4
19.8
18.8
17.7
17.2
16.6
16.1
15.9
15.8
15.4
15.0
$2.19
210.55
3.31
17.45
36.30
17.22
6.17
24.60
40.35
9.16
6.33
11.06
24.89
128.17
88.19
0.12
0.05
0.11
0.04
0.52
0.09
0.23
2.10
0.09
0.31
3.50
0.49
0.07
0.06
0.67
5.94%
0.02
3.31
0.23
1.45
0.52
3.59
9.33
0.22
3.27
123.67
4.24
0.28
0.05
0.75
CBLI 16,120.2
GKOS 5,610.7
ATAI
204.9
RGSE 2,308.0
PTNR
128.0
$6.33
29.25
6.89
4.57
2.83
3.50
11.25
1.72
0.93
0.49
123.67%
62.50
33.18
25.55
20.90
$30.25
2.63
67.23
8.83
3.20
12.82
0.62
15.59
1.50
0.51
29.76%
19.07
18.82
14.52
13.77
52-WEEK
High
Low
$25.77 $19.39
13.24
9.26
18.64
13.14
51.41 33.96
87.62 40.74
251.99 176.69
63.97 45.48
6.03
3.77
69.26 40.22
8.12
5.68
32.95
16.43
7.62
5.13
9.17
6.30
2.58
1.94
16.49
2.44
75.52 48.32
31.84 23.84
11.88
3.51
2.94
1.07
18.43
11.25
19.88
12.93
14.18 10.88
154.88 73.59
37.12
18.73
26.29 13.02
17.59
12.72
36.44
28.61
86.99
48.17
60.85
41.14
38.02 29.60
Biggest gainers...
ClvlndBioLabs
Glaukos
ATA
RealGoodsSolarClA
PrtnrComm
...Biggest losers
MethodEl
BioPharmX
WorldAcpt
TrovaGene
DSHealthcareGroup
MEI
BPMX
WRLD
TROV
DSKX
5,844.1
223.9
1,319.9
1,335.8
504.5
Volume,
Symbol in OOOs
Stock
TaiwanSemi
ICICI Bk ADS
InfosysADS
TataMtrs ADS
CtripInt ADS
Baidu ADS
HDFCBankADS
AUOptronicsADS
BHPBillitonADS
AdvSemiEnggADS
SonyADS
MitsuUFJ ADS
SiliconwareADS
UtdMicro ADS
VimicroIntlADS
ChinaMobile
SKTelecomADS
ChinaFinOnADS
PranaBiotech
LGDisplayADS
ChinaUnicomADS
WiproADS
NeteaseADS
SiliconMotionADS
ChinaLifeInsADS
KT Crp ADS
HondaMotorADS
POSCOADS
DrReddysLabADS
CanonADS
TSM
IBN
INFY
TTM
CTRP
BIDU
HDB
AUO
BHP
ASX
SNE
MTU
SPIL
UMC
VIMC
CHL
SKM
JRJC
PRAN
LPL
CHU
WIT
NTES
SIMO
LFC
KT
HMC
PKX
RDY
CAJ
CHANGE
Latest Points Percentage
5,082.9 $24.07 0.17

2,901.3 10.44 0.03
1,752.1 16.10 0.34
1,434.7 34.98 0.01
1,257.5 72.92
...
1,049.3 207.91 2.41
930.0 61.27
1.41
860.1
4.48 0.01
814.9 43.46 0.93
567.5
6.86 0.14
545.9 31.35 0.84
387.4
7.35 0.01
337.7
7.72 0.09
313.7
2.13 0.05
311.5
11.89
...
310.8 65.61 0.90
273.2 25.40 0.14
261.7
5.86 0.04
232.1
1.27 0.04
230.4
11.26 0.29
203.1 16.33 0.13
181.2
12.14 0.08
179.2 146.29 1.89
167.7 36.81 0.92
166.2 22.00 0.45
140.5 12.95 0.08
134.5 32.82 0.23
121.6
51.18 0.24
120.7 54.68 0.84
104.4 33.47 0.14
0.71%
0.29
2.16
0.01
0.01
1.15
2.36
0.22
2.10
2.08
2.75
0.14
1.25
2.40
...
1.35
0.56
0.68
3.05
2.51
0.80
0.66
1.28
2.56
2.00
0.62
0.71
0.47
1.56
0.42
*Most active American depositary receipts tracked by Dow Jones

Source: WSJ Market Data Group
Global government bonds
Latest, month-ago and year-ago yields and spreads over or under U.S. Treasurys on benchmark two-year
and 10-year government bonds around the world. Data as of 12 p.m. ET
Country/
Maturity, in years
Yield
SPREAD OVER TREASURYS, in basis points

Latest
Previous
Month Ago
Year ago
Previous
YIELD
Month ago
Year ago
4.250
Australia 2
2.051
134.4
135.5
139.5
205.7
2.038
2.013
2.541
3.250
10
3.070
65.2
69.3
71.0
104.1
3.061
2.921
3.604
3.500
Belgium 2
-0.136
-84.3
-80.6
-76.5
-39.3
-0.122
-0.146
0.091
0.800
10
1.267
-115.2
-112.1
-130.6
-84.2
1.247
0.905
1.721
France 2
-0.164
-87.1
-82.8
-78.3
-40.4
-0.144
-0.165
0.081
10
1.243
-117.5
-114.5
-131.4
-96.1
1.223
0.897
1.603
0.500
Germany 2
-0.193
-90.1
-87.7
-83.2
-45.0
-0.193
-0.214
0.034
0.500
10
0.867
-155.1
-151.8
-160.9
-129.8
0.849
0.602
1.265
4.750
Italy 2
0.286
-42.2
-38.6
-50.7
10.3
0.298
0.111
0.588
1.500
10
2.118
-30.0
-24.0
-36.1
17.5
2.127
1.850
2.738
0.100
Japan 2
0.006
-70.1
-67.9
-61.9
-39.5
0.005
-0.001
0.089
0.400
10
0.474
-194.4
-190.7
-178.6
-198.7
0.460
0.425
0.576
0.500
Netherlands 2
-0.182
-88.9
-85.2
-81.1
-41.4
-0.169
-0.193
0.071
0.250
10
1.107
-131.1
-128.3
-142.0
-105.9
1.084
0.791
1.504
4.200
Portugal 2
-0.001
-70.8
-69.8
-62.5
33.6
-0.014
-0.006
0.820
4
3
2
1
Wednesday
1
month(s)
3.750
0.500
5%
Coupon
U.S. Treasury yield curve
The curve shows the yield to maturity of current bills, notes and bonds; all data as of 3 p.m. ET.
One year ago
2 3 5 710
years
maturity
30
Ryan Index
Yield to
maturity
Modified
duration
30-year Treasury
10-year Treasury
7 Year Treasury
Five-year Treasury
Ryan Index
3 Year Treasury
Two-year Treasury
1 Year Treasury
Six-month Treasury
Ryan Cash Index-a
Three-month bill
3.145%
2.371
2.101
1.685
1.838
1.042
0.684
0.290
0.081
0.094
0.005
19.41
8.84
6.46
4.78
7.40
2.92
1.98
0.99
0.50
0.45
0.25
One-month bill
...
0.08
Month
to-date
TOTAL RETURN
Quarter
to-date
5.43 %
2.26
1.52
0.83
1.66
0.16
0.06
0.02
0.02
0.01
...
Year
to-date 12-month
11.19 %
3.40
2.10
1.00
2.92
0.35
0.03
0.12
0.12
0.07
0.02
6.59 %
0.84
0.23
0.81
0.69
1.39
0.58
0.29
0.19
0.14
0.05
0.01
0.01
...
a-Performance of a cash investment
7.84 %
4.30
3.36
2.43
3.61
2.15
0.98
0.43
0.28
0.20
0.07
0.02
Source: Ryan ALM
Key money rates

Latest
Latest
52 wks ago
Prime rates
Euro Libor
One month
52 wks ago
U.S.
3.25%
3.25%
-0.07286%
0.08286%
2.85
3.00
Three month
-0.01571
0.17571
Offer
Eurodollars
One month
Bid
0.2500%
0.1500%
Three month
0.3300
0.2300
2.875
10
2.686
26.8
35.8
29.2
88.6
2.725
2.503
3.449
Canada
5.500
Spain 2
0.290
-41.8
-38.1
-50.9
2.4
0.303
0.110
0.508
Japan
1.475
1.475
Six month
0.05500
0.27286
Six month
0.4500
0.3500
Britain
0.50
0.50
One year
0.16929
0.44100
One year
0.7200
0.6200
1.600
10
2.101
-31.7
-27.4
-38.2
7.3
2.094
1.829
2.636
ECB
0.05
0.15
3.750
Sweden 2
-0.254
-96.2
-95.6
-88.5
-11.0
-0.272
-0.266
0.374
Switzerland
0.50
0.50
Euribor
One month
-0.06600%
0.10300%
Australia
2.00
2.50
Three month
-0.01400
0.20800
U.S. discount
0.75%
0.75%
2.500
10
1.037
-138.1
-134.7
-141.6
-83.0
1.021
0.795
1.733
Hong Kong
5.00
5.00
Six month
0.04900
0.30600
Fed-funds target
0.00
0.00
1.000
U.K. 2
0.838
13.1
12.1
7.0
35.3
0.804
0.688
0.837
One year
0.16300
0.48700
Call money
2.00
2.00
Hibor
One month
2.750
10
2.160
-25.8
-22.2
-27.1
8.8
2.145
1.940
2.651
0.625
U.S. 2
0.707
...
...
...
...
0.684
0.618
0.484
2.125
10
2.418
...
...
...
...
2.367
2.211
2.563
Libor
One month
0.24014%
0.21143%
0.18650%
0.15100%
Three month
0.28075
0.23385
Three month
0.38743
0.37429
Six month
0.44680
0.32590
Six month
0.54214
0.54857
One year
0.77575
0.54710
One year
0.84400
0.86286
Latest
Overnight repurchase rates

U.S.
0.17%
Euro zone
n.a.
52 wks ago
0.12%
n.a.
Sources: WSJ Market Data Group, SIX Financial Information, Tullett
MARKETS LINEUP
Moving the
markets
Asian index movers
At right, Japans benchmark stock index

and the biggest movers among the
larger Asian stocks indexes and stocks
Thursday. Below each index are its most
actively traded stocks. The charts show
the percentage change in each indexs or
stocks value, rather than the point
change, for purposes of comparison. The
index level or stock price is indicated on
each axis. All indexes and stocks are
shown in local currency terms.
Nikkei Stock Average
Japan
20771.40
0.46% or 96.63
The benchmark snapped a four-day

winning streak on concerns over apparently stalled Greek debt negotiations as
well as a weaker dollar.
Follow the markets throughout the

day, with updated stock quotes, news
and commentary at WSJ.com.
Also, receive emails that summarize
the days trading in Europe and Asia.
To sign up, go to WSJ.com/Email.
Stock
Volume
in millions
Close
218.13
271
Mizuho Fin
China
4527.78
3.46% or 162.37
Chinese stocks reversed a two-day rally

partly on concerns about increased supply of new shares, and despite moves
from Beijing to support the economy.
ASX 200
Australia
5632.70
0.95% or 54.10
The index retreated after four consecutive days of gains amid fading optimism that Greece is close to securing a
debt deal with its creditors.
S&P BSE Sensex

India
27895.97
0.60% or 166.30
The market closed at a more than onemonth high as government plans that
aim to boost construction of new
homes and cities helped lift sentiment.
24000
5400
7500
36000
20000
4500
6250
30000
16000
3600
5000
24000
12000
2700
3750
18000
8000
J A S O N D J F M A M J
2015
2014
WSJ.com>>
Shanghai Composite
Change
Net
-1
1800
2015
2014
Volume
in millions
Close
GDPowerDevelopment 1850.24
7.27
0.26
3.45
Stock
0.29
2500
2015
2014
Change
Net
Volume
in millions
Close
FairfaxMedia
24.96
0.86
Stock
Change
Net
Stock
12000
2015
2014
0.02
2.05
ICICIBank
Volume
in millions
Close
16.71
315.92
Change
Net
-1.83
0.58
0.47
Tokyo Electric
91.92
698
0.29
781.02
6.51
0.36
5.24
Alumina
18.06
1.57
0.06
3.40
StateBankofIndia
16.51
263.59
1.24
MitsuUFJFin
47.41
905
-7
0.79
ChinaMinshengBkA 760.36
9.40
0.41
4.18
Telstra
16.47
6.30
0.04
0.63
Vedanta
12.07
179.60
3.50
1.99
Sojitz
36.48
308
0.65
HuadianPowerIntl 634.70
11.18
0.74
7.09
MirvacGroup
13.41
1.94
0.02
1.28
NTPC
11.07
135.60
-1.20
0.88
Toshiba
31.75
430
...
0.07
SINOPEC
10.34
0.41
4.13
FortescueMetalsGrp
8.84
2.12
0.08
3.64
TataMotors
7.75
432.40
1.80
0.42
HainanAirlinesA
596.68
Asian stocks in the news

Nintendo Co. Ltd.
Rohm Co. Ltd.
Japan
8,500 Japan
21,420
s 2.6% or 540
s 2.3% or 190
Noble Group Ltd.
Singapore
S$0.74
s 2.8% or S$0.02
The company's shares have gained 9.1%

in the past week.
The company was up a day after it said

its new "Splatoon" game reached a
million in sales globally.
OCBC raised its target price on the

commodities trader.
In yen
In yen
In Singapore dollars
12500
2015
2014
Price-to-earnings ratio
Earnings per share, past four quarters
Dividend yield
30000
-0.3%
2.3%
10
1.20
240000
5000
12000
0.80
160000
2500
1.4%
45.5%
2015
2014
Dividend yield
6000
61
N.A.
1.4
2015
2014
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Consumer Goods
Nintendo Co. Ltd.
...
2.6%
1.2%
9.8%
7.2%
75.4%
Fortescue Metals Group
Australia
A$2.12
t 3.6% or A$0.08
In Australian dollars
40000
0.40
60
N.A.
2.6
2015
2014
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Industrials
Noble Group Ltd.
TDK Corp.
...
2.8%
0.7%
3.6%
8.1% -46.0%
80000
57
N.A.
0.7
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Technology
SK C&C Co. Ltd.
-0.3%
3.2%
0.8%
2.2%
1.4%
67.2%
2015
2014
28
N.A.
0.9
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Technology
FIH Mobile Ltd.
-0.3%
6.5%
0.8%
7.4%
1.4%
0.4%
Bank of China Ltd.
United Tractors
Negative analyst comment regarding

the company's hard-disk-drive shipment
outlook hurt the stock.
The bank's shares traded ex-dividend.
Losses in several large-cap stocks,

including this one, pulled the broader
Indonesian market lower.
In yen
In Hong Kong dollars
Japan
9,760
t 4.5% or 460
12500
Hong Kong
HK$5.13 Indonesia
18,875 rupiah
t 5.7% or HK$0.31
t 6.7% or 1,350 rupiah
10
In rupiah
40000
32000
10000
32000
24000
7500
24000
16000
5000
16000
8000
24
N.A.
2.7
2015
2014
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
0.7%
1.0%
In Hong Kong dollars
400000
18000
In yen
...
-2.7%
In won
7500
The miner's shares lost ground, despite

gains in the price of iron ore.
Industrials
Fanuc Corp.
The mobile-equipment assembler

jumped following an upbeat first-half
profit forecast late Wednesday.
Some exporters declined amid a weaker

dollar.
Dividend yield
The shares rebounded after falling

Wednesday when the NPS said it would
vote against a planned merger.
320000
25,645
t 2.7% or 720
2015
2014
HK$4.77
s 6.5% or HK$0.29
1.60
Fanuc Corp.
Japan
277,500 won Hong Kong
s 3.2% or 8,500 won
24000
20
N.A.
1.5
0.8%
9.1%
Korea
FIH Mobile Ltd.
10000
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Technology
Rohm Co. Ltd.
2.00
SK C&C Co. Ltd.
3.6%
44.4%
4
N.A.
2.8
2015
2014
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Basic Materials
Fortescue Metals Group
0.1% 0.5%
-3.6% -0.5%
-7.2%
-51.4%
2500
26
N.A.
1.2
2015
2014
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Industrials
TDK Corp.
... 0.7%
3.6%
-4.5% -0.3% 107.0%
7
N.A.
4.8
2015
2014
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Financials
Bank of China Ltd.
-0.1% 1.8%
-5.7% -0.6%
7.5%
49.6%
8000
13
N.A.
5.8
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Industrials
United Tractors
...
-6.7%
0.7%
-7.3%
3.6%
-17.6%
Email: [email protected]
HEARD ON THE STREET

FINANCIAL ANALYSIS & COMMENTARY
WSJ.com/Heard
China Tips Cap to More Bank Lending
China is scrapping one of its

most powerful tools for controlling
banks. That should actually make
the banks safer, even while modestly
boosting lending.
On Wednesday, Chinas State
Council said the preliminary draft of
a new banking law will do away
with the 75% cap on banks loan-todeposit ratios, which for years has
limited how much banks can lend.
The preliminary draft of

a new banking law will do
away with the 75% cap
on banks loan-to-deposit
ratios.
The change is part of a broader
effort, including liberalizing interest
rates, to bring Chinas monetary
policy and banking regulation closer
to modern global practices. The
loan-to-deposit ratio was a crude
measure to control bank behavior,
with undesirable consequences.
For one thing, the ceiling encouraged banks to disguise loans as investments or move them off their
balance sheets, contributing to the
boom in nontransparent shadow

banking.
It also penalized smaller banks,
with looser ties to the government.
These banks, often more commercially driven, have a harder time attracting deposits due to limited
branch networks and a perception
that they are less secure than the
huge state-owned banks.
As a result, midsize lenders like
Citic Bank and Minsheng Banking
Corp. frequently bump up against
the loan-to-deposit ceiling, while
their bigger competitors stay comfortably below it. Shares in these
two banks rose on Thursday as bigger banks stock prices were flat or
fell.
Back in 2009, China temporarily
suspended the ratio in response to
the financial crisis. It was a signal
to banks that they could go hog
wild.
This time banks are held back by
new, much more stringent capital
requirements under Chinas version
of the Basel III banking accords.
Beijing has other tools to tamp
down lending. Most notably, the reserve-requirement ratiothe percentage of deposits that banks must
park at the central bank rather than
lend outcurrently stands at 18.5%
for most large banks. Its effect is
Europe Needs to Adopt

Common Banking Rules
As Greece and Britain strain the

ties of the European Union from
each end and the European Commission promotes a vision for binding them more tightly, the everyday,
practical
problem
of
supervising Europes banks is
caught in the middle.
Danile Nouy, the eurozones
chief regulator, reminded the European Parliament on Thursday of
how far the region remains from
operating a single banking system.
There are more than 150 different so-called supervisory options
and national discretions, which in
effect allow national regulators to
bend what are meant to be common capital rules to fit local circumstances. Europe must more
quickly kill these off because its financial stability depends on Europeans being indifferent about
whether their deposits are in Luxembourg or Latvia.
The opt-outs arose in the arduous task of trying to create a single
rule book for 19 countries at various stages of financial development and strength. National interest in finance as a critical support
of other industries and consumers
makes some of them very hard to
shift.
The toughest to eradicate include the Danish Compromise,
which gives financial conglomerates a pass on the equity in their
insurance businesses. By rights this
should be discounted from bank
capital as a risky asset.
Ironically, French banks regulated by Ms. Nouy in her previous
job are among the biggest beneficiaries, though she never supported it. It is due to be phased out
by 2019, but should be dropped

faster.
Even more vexing is the credit
given in capital for deferred tax assets and credits. These intangible
assets are built up against past
losses and allow banks to reduce
future tax bills. They should be deducted from capital because they
cant absorb losses if a bank hits
trouble.
But, worse, they can perpetuate
the dangerous link between sovereigns and banks because they are
in effect funded by national governments when turned into credits.
Spanish, German and French banks
have them, but Greek and Portuguese bank capital is most reliant
on them.
Eradicating the exceptions will
prove costly to some banks and
hard to stomach for some national
regulators. Ms. Nouy will put proposals to end them to the single
supervisors board at a coming
meeting. To make the changes she
will need a two-thirds majority.
Recalcitrant members should
look to Greece to remember why
one rule book is important. It is a
key ingredient alongside a single
resolution mechanism and depositinsurance system to finally separating banks from national governments and protecting countries
against locally systemic bank runs.
If national regulators dont support the changes, they will face the
ignominy of Ms. Nouy asking the
European Parliament to do it for
them. With Europes financial fabric fraying at the edges, that could
mean a delay that would leave the
system exposed to future instability.
Paul J. Davies
OVERHEARD
Nearing the Limit
Bank loan-to-deposit ratios at the end of March

Citic Bank
74%
Bank of Communications
74
Bank of China
72
China Construction Bank
72
Minsheng Bank
72
Industrial & Commercial

Bank of China
69
China Merchants Bank
66
Agricultural Bank of China

Source: Bernstein estimates
similar to that of a loan-to-deposit

ratio ceiling of 81.5%, though banks
also can use nondeposit funding to
boost lending.
The central bank still has the extraordinary power to set outright
quotas for how much each individual bank can lend. That doesnt jibe
with Chinas stated goal of moving
toward a modern, market-driven financial system. But Beijing is unlikely to give up this power until it
is confident that the system is on
sound footing.
64
In any case, tamping down lending is the opposite of what Beijing

wants at the moment. Slow systemwide deposit growth has constrained the governments stimulus
efforts. Total deposits in the first
quarter were up just 4.9% from a
year earlier, slowing from the double-digit pace of the past few years,
according to Bernstein research.
Beijing may be giving bankers a
longer leash to lend, but they still
must obey their master.
Aaron Back
For most of us, Wednesday is

hump day. For oil traders, it is frequently jump or slump day.
That is because it is usually
when the U.S. Energy Information
Administration produces its weekly
statistics on oil inventories, production and consumption. The latest
set, for the week ended June 19,
had something for both bulls and
bearsbut the latter camp edged
it.
U.S. commercial crude-oil stocks
fell by 4.9 million barrels, so bulls
got that. But a little delving deeper
paints a different picture.
For one thing, some oil was just
transferred to the Strategic Petroleum Reserve, leaving a net reduction of 4.6 million barrels. Meanwhile, imports of crude oil fell by
2.1 million barrels last week. This
explains almost half of the net
draw in domestic crude stocks,
leaving 2.5 million barrels.
Now, look at two big refined
products: gasoline and distillate
(the latter includes diesel).
Stocks of these rose by a combined 2.5 million barrels. So crude
inventories were drawn down, processed by a refiner, and then simply put into storage in a different
form.
Published by Dow Jones Publishing Company (Asia). Printed in Hong Kong by Euron Limited, 2/F., Block 1, Tai Ping Industrial Centre, 57 Ting Kok Road, Tai Po, Hong Kong. Printed in Indonesia by PT Gramedia Printing Group, Jalan Palmerah Selatan 22-28, Jakarta 10270. Printed in Japan by The Mainichi Newspapers Co., Ltd., 1-1-1 Hitotsubashi, Chiyoda-ku, Tokyo, 100-8051. Printed in Korea by JoongAng Ilbo. 7, Soonwha-Dong, Chung-Ku, Seoul 100-130. 1997 June 04 Registration no.: SeoulKA00020 (Daily Newspaper), Publisher/Editor/Printer: Song, Pil-Ho.
Printed in Malaysia by KHL Printing Co. Sdn. Bhd. (ROC No: 235060-A) Lot 10 & 12, Jalan Modal 23/2, Seksyen 23 Kawasan Miel Phase 8, 40000 Shah Alam, Selangor, Malaysia. Printed in Philippines by FEP Printing Corporation, 3817 Mascardo St., Corner Metropolitan Ave., Pasong Tamo, Makati City. Printed in Singapore by Singapore Press Holdings Limited, 82 Genting Lane Media Centre Singapore 349567. Printed and distributed in Taiwan by The China Post, 8 Fu Shun Street, Taipei 104. Printed in Thailand by Nation Multimedia Group Public Co., Ltd.,
1854 Bangna-Trad Road, (K.M. 4.5), Prakanong, Bangkok 10260. Published and printed on behalf of the Wall Street Journal India Publishing Pvt Ltd, 9th Flr, Tower 2, Maker Maxity, Bandra Kurla Complex, Bandra (E), Mumbai400051 by Mr Suman Dubey at PLOT No.EL208, TTC Industrial Area, Mahape, Navi Mumbai - 400710 (Maharashtra), India, Editor: Suman Dubey, phone: +91-22-61456100. ACP no. F.2 (T/3) Press / 2009 FACSIMILE EDITION.
W10
W16
W11
EATING
DRINKING
ADVENTURE
TRAVEL
STYLE
FASHION
GEAR
Friday - Sunday, June 26 - 28, 2015
GADGETS
MANSION
asia.WSJ.com/lifestyle
The Off Duty Summer 25
Get This Patio Started

Your seasonal guide to outdoor entertaining: Twenty-five
winning ways to mastermind the grub, serve it stylishly,
make your terrace twinkle, dress effervescently,
snub mosquitoes and never run out of wine
PETER OUMANSKI
Pages W2-W9
W2 | Friday - Sunday, June 26 - 28, 2015
THE OFF DUTY SUMMER 25

2
1
Casual isnt the first word that comes to mind when
you think of hurricane lamps; even the name implies a
sense of urgency. Upending expectations are these
bamboo versions, which are as laid-back as a Caribbean
breeze. At roughly 20 to 30 centimeters talltheir woven
tops perched snugly on thin iron legsthey give off an
ideal eye-level glow when set on a dining table, said
Anthropologie home-design director Bernice Kelly. Take it
up a notch by borrowing a holiday-dcor trick: Fill the
glass with battery-powered string lights instead of a
candle, and itll look like a jar of captive fireflies. Bamboo
Pedestal Lantern, from $28 for small, anthropologie.com
F. MARTIN RAMIN/THE WALL STREET JOURNAL, STYLING BY ANNE CARDENAS (3)
Hold Your Flicker
Plant Flowers in
Your Drink
Paper straws beat plastic every time for a simple reason: They remain
resolutely anchored, even in the most effervescent of highballs. But
these suckers go one better, combining practicality and fun with a floral
design perfectly pitched for a garden party. Fully biodegradable and
embellished with food-grade ink, theyre waterproof, too, so you dont
have to worry about your straw getting soggy before youve finished
sipping. Garden Party Straws, $6 for 25, shopterrain.com
Get Tin
Into It
Function often trumps form when dining en plein air. No such
trade-off is necessary with these unbreakable tin plates, silkscreened with antique china patterns, from Parisian shop Au
Bain Marie. My family had these same plates, said
Connecticut decorator Sam Allen. I remember pulling them out
of the picnic basket and setting the blanket with them like a
table. Unlike paper plates, they are hefty enough to withstand
an errant gust of wind. (One caution: Cutting on them with a
sharp knife can mar the designs.) Iznik Tin Plate, $14 each,
aubainmarie.fr
Alexa Brazilian
Friday - Sunday, June 26 - 28, 2015 | W3
Move the Party to a European Villa

THE ONLY THING BETTER than a
house party is a destination house
party. These villas in some of Europes prettiest places can accommodate up to 18 people and offer
privacy, pools and plenty of patio
party space. Housekeeping services
are included and meals can be prepared for a fee, but with markets
nearby and kitchens as large as
these, cooking is part of the fun.
Mykonos, Greece
Thoroughly modern inside and

out, Villa Isaura has sweeping
views of the Aegean and sleeps 10.
The islands best beaches are minutes away, but theres an infinity
pool on hand for those disinclined
to wander. A chapel and labyrinth
provide quiet places for reflectionor to nurse hangovers.
From about $12,100 a week,
whitekeyvillas.com
Provence, France
Mas Colline is a newly renovated

6-bedroom Provenal farmhouse
on a forested hillside with views
of the mountains and ample room
around the pool for a party. From
about $10,750 a week,

justfrance.com
Tuscany, Italy
Amid the rolling vineyards and olive groves of Chiantis Conco

dOro, Ca di Pesa is an ancient
nine-bedroom stone house with a
pool and a cinema. Between al
fresco gatherings, guests can shop
at the Sunday market in nearby
Panzano and take day trips to
Florencea 40-minute drive away.
From about $16,200 a week,
homebaseabroad.com
Marbella, Spain
Just five minutes from Marbella,

Summer House is a seven-bedroom villa (a guest cottage has
two more bedrooms) with a
sunken tennis court, a rooftop terrace, a fully equipped fitness center and a swimming pool with
views of the mountains and the
sea. An in-house concierge will
share his address book of caterers
and entertainers and arrange private pickups (with Champagne)
for your guests. From about
$10,000 a week, elsolvillas.com
CHEZ PAR-TAY
Mas Colline villa,
in Provence
Strike Gold
Run Away
With a Spoon
Alexa Brazilian
It was in China that Marco Polo

discovered piatas, which he then
brought back to Europe. Later, missionaries adapted the popular but
pagan tradition to represent three
Christian virtues: faith (the blindfolded cudgel-swinger), hope (the
expectant crowd) and charity (the
eventual downpour of goodies).
This piata is no papier
mche, express-aisle, grocerystore donkey. Its a handcrafted,
made-to-order artisanal piata,
replete with shimmery metallic
JUST FRANCE (VILLA); F. MARTIN RAMIN/THE WALL STREET JOURNAL, STYLING BY ANNE CARDENAS (3)
The problem with

portable plastic
flatware is that it
tends to break on a
piece of steak and
rarely looks chic,
even on a beautifully
set table. The
translucent cutlery
from Mepra, made in
Italy from
polycarbonate
synthetic resin, is
designed to be
tougher and prettier
than most. Offered
in such pleasing
shades as inky
aubergine and this
sage green, theyre
something youll
never want to throw
away. You likely
neednt: Theyre
impact-resistant and
dishwasher-safe.
Mepra Uno Flatware
Set, $90 for six
settings,
lekkerhome.com
foil, a cotton hanging cord and a

two- to three-week wait time.
Available in metallic blue, gold,
or a hue of your choosing, the
Comet Piata Shaggy comes
prefilled with confetti, although a
hinged door lets you supplement
that with the tiny treasures of
your choice. Of course, its far too
chic for gummy bears and packets
of Sour Patch Kids. Instead, why
not let chocolate truffles or perhaps mini-bottles of single-malt
scotch rain down on your lawn
when the lucky swatter delivers
the crucial thwack? $175,
confettisystem. bigcartel.com
Keith Blanchard
Catch Fewer Rays
When you need a bit of shade,

reach for this updated version of
the classic wide-brimmed straw
hat. Its basket-like, open-work
design offers protection while
allowing in gentle breezes
and reducing your
chances of utterly irreparable hat head. Woven Straw
Hat, $135, toryburch.com
Cushion
The Blowout
Green is the taupe of outdoor furniture, said Los Angeles designer Judy Kameon. If
youre planning to do much backyard entertaining, go bolder when choosing pillows. These
gutsy blue patterns or red-and-yellow stripes wont fade away.
From left: Elaine Smith Poolside Link Pillow, $149, authenteak.com; Hamza Decorative Pillow, $125,
johnrobshaw.com; Plasma Beaded Pillow, $475, shop.sunbrellaperformanceart.com; Megan K. Victor Striped
Pillow, $30, society6.com; Cabo Pillow, $525, ankasa.com
Card Your Guest

Though assigned seating might seem too stuffy for your outdoor soiree, these place-card holdersunglazed-porcelain
takes on strawberries by ceramist Michiko Shimadaplayfully
uphold a tradition that can effectively encourage strangers to
interact, bonding as they gossip about you. And unlike the real
thing, these berries will still look fresh long after the harvest is
over. Strawberry Place-Card Holder, $15 each,
michikoshimada.com
Kelly Michle Guerotto
10
Get Carried Away

Among his many talents, fashion
designer Oscar de la Renta threw
renowned dinners, where he would
create table settings that married
humble materials such as wicker and
bamboo with antique china and
crystal. Likewise, this tray pairs a
16th-century Turkish textile motif
with woven rattan. And if the wind
takes advantage of your roscompromised balance, the vinylcoated surface wipes down easily.
Octagonal Pinecone Print Tray, $395,
oscardelarenta.com
Mieke ten Have
11 Take a Strand
Decorating with faux florals is generally a fast track to a party foul. But
tolein which leaves and buds are rendered in lacquered or enameled
metalwarecan be a sculptural antidote to synthetic flowers. This 175centimeter garland strand, its elements hand-painted and rustically
joined with wire, feels like a Parisian flea-market trove. Arrange it along
a table as a centerpiece, or entwine with outdoor lights for a luminous
botanical embellishment. Metallic Leaves Garland, $30, preorder at
shopterrain.com
M.T.H.
Drain Your Glass, Not Your Wallet

12
When next youre buying bottles for a crowd, make it a budget bacchanalia
with these delicious, inexpensive summer-weight wines
SUMMER IS BOTH
A SEASON and an
adjective with a
very particular
meaning. A summer novel is one
that wont tax
the intellect unduly; a summer romance is a love that wont last
past fall and a summer wine is invariably one of the cheapest on
the shelf.
Why is this the season for all
things insubstantial, inexpensive
and fleeting? Dont taste, character and flavor count no matter the
temperature? These qualities certainly seem de-emphasized by
many wine retailers at this time of
year. They describe wines in terms
of a place rather than taste: This
is great wine for the picnic/beach/
pool.
And wine drinkers respond accordingly. Even my most serious
oenophile friends factor in place
when selecting wines for the summer. One serves Sancerre because
he considers it the perfect pool
wine. Never mind that he hasnt
owned a pool in years.
Another friend buys only cheap
wines in summer because his
basement gets very hot. He wants
wines he doesnt have to keep
very long, and for him that means
those that are cheap. He has quite
a few pricey bottles baking away
in the very same basement, but
summer wine drinkers have their
own brand of logic.
The ultimate wine for the season is ros. Its cheap, readily
available and most often lauded as
perfect for the pool. I buy ros in
the summer, toonot because of a
pool or the price but because
summer is when the wines show
up in stores. Ross are almost impossible to find any other time of
the year. The best sell out long
before fall.
My favorite ros, produced by
Clos Sainte Magdeleine, in Cassis,
France, is not only fairly pricey
($30) but so complex that it actually improves over time. I buy a
few bottles and often put them
away, sometimes until the following summer.
Aside from ros, I buy few
wines based on the season. But
what if I did? What if I bought
STEFANO MARRA; F. MARTIN RAMIN/THE WALL STREET JOURNAL (BOTTLES)
BY LETTIE TEAGUE
wines just because they were

cheap and touted as boon companions at a backyard picnic or
barbecue? Would I find a lot of
bad wine or some good deals?
How little could I spend for the
summer? If I spent less on wine,
could I host even more parties?
I started my search looking for
wines that cost less than $10 a
bottle. I didnt get very far. A really cheap wine didnt turn out to
be a really good deal. The $7
white from Rueda, Spain, that my
friend Tom recommended was bitter and searingly high in acidity.
(Only later did I learn that Tom
used it strictly for making Sangria.) A $9 bottle of 2011 Bodan
Roan California Cabernet that Astor Wines & Spirits in Manhattan
called easy-drinking had no recognizable Cabernet character. This
is really sweet and fruity, said

my friend Jim, who took
a taste and put down his glass.
Jim, who will drink any wine as
long as its red, drew the line at
Bodan Roan.
I raised my price ceiling to $15
and immediately improved the
odds of finding a drinkable bottle.
Although there were some disappointments in this group, there
was a good deal more pleasure as
well, starting with a very dry but
beautifully floral 2014 M Plouzeau
Rive Gauche Chinon Ros ($14),
from the Loire Valley of France. It
was delicious, easy to drink and,
as Ian Dorin, wine director at
Wine Library in Springfield, N.J.,
noted, tasted like a $20 to $25
wine. I bought five bottles for
guests. Another ros, the 2014
Nicodemi Cerasuolo Montepul-
ciano dAbruzzo, from Abruzzo, Italy ($12), was a much darker,

more full-bodied wine. Marked by
beguiling aromas of sweet cherry
and spice, it was savory and deliciousa great match with food.
I found several white wines,
too, with character and flavor at
very good prices. The 2014 Novellum Chardonnay Pays dOc ($12)
was crisp and bright with a lovely
floral note, while the 2013 Cesani
Vernaccia di San Gimignano ($13)
from the Pancole subregion of
Tuscany was surprisingly full-bodied and complex. The 2014 Ken
Forrester Petit Chenin Blanc was
crisp and pleasantone of the
best $10 wines I can remember
tastingmade by a top South African producer.
A light, savory red from Tuscany, the 2013 Rosso dei Poggi,
from Badia di Morrona ($11),

proved so delicious that my friend
Jim finished the bottle. A substantial Australian Shiraz (the 2013
Three Rings Barossa Valley Shiraz) and a juicy Garnacha, or
Grenache, from Calatayud, Spain
(the 2012 Filon Real)would be
good for a picnic or barbecue, and
were affordable as well. They
were both $14.
I wouldnt have tasted any of
these wines had I not set my
sights deliberately low. And I did
find some perfectly pleasant, reasonably priced wines that I would
be happy to drink the rest of the
summer. There were even a few,
including the Rosso and the Chinon Ros, Id be happy to have in
my house all the way though the
fall. But longevity isnt really the
point of a summer wine, after all.
OENOFILE: FIVE AFFORDABLE WINES THAT MAKE A CASE FOR KEEPING THE LIBATIONS FLOWING
2013 Cesani Vernaccia
di San Gimignano, $13
This lively, mediumbodied white from a
high-altitude vineyard in
Tuscanys subregion of
Pancole is marked by
notes of almond and
citrus. A wonderfully
refreshing aperitif, its
perfect to drink by the
poolas I imagine some
savvy wine salesman
would advise.
2014 Novellum
Chardonnay Pays dOc,
$12
Highly regarded winemaker
Jean-Marc Lafagefrom
the Languedoc-Roussillon
region of France, on the
Mediterraneanturns out
this well-balanced
Chardonnay fermented
in-tank and finished in
French oak. The wine is
marked by notes of peach
and a bright acidity.
2013 Badia di Morrona

Rosso dei Poggi, $11
2014 M Plouzeau Rive

Gauche Chinon Ros, $14
Finding a wine with

character and a real
sense of place for just
over $10 a bottle is not
easy to do, but this light
and savory Sangiovesebased Tuscan red,
produced in a vineyard
between Pisa and
Florence, overdelivers on
the price.
Of the many ross Ive

tasted this year, this one
from the Chinon subregion
of Frances Loire Valley
may be the best deal.
Made from the Cabernet
Franc grape, its very dry
and delightfully floral. Ill
drink it through fallif the
five bottles Ive bought (so
far) last that long.
2014 Nicodemi Cerasuolo

Montepulciano dAbruzzo
Ros, $12
There arent many ross
that are substantial
enough to pair with a
meal, but this fairly dark
example, made from the
Montepulciano grape in
the Abruzzo region of
Italy, is fruity and lush
but not sweeta perfect
wine for a barbecue.
Dont Use
Your Fingers
13
Long before the Ice Bucket Challenge

became a viral sensation, the phrase
could easily have referred to the vexing
task of finding a rocks container that
didnt look like a motel freebie. That
search ends here: This luminous, curved
glass ice bucket is the color of a
cloudless summer sky. Its large enough
to fill six drinks before you have to go
back for refills but not so big that you
need a Best Western-sized scooper to
actually get the ice out. Pair it with
brushed-finish stainless-steel tongs and
add panache to your Arnold Palmers by
dropping in each cube one at a time.
Aaron Probyn Orb Aqua Ice Bucket, $50,
and Tongs, $10, crateandbarrel.com
Camp
It Up
14
Its time to rethink the summer shirt. For too

long, the unflattering Hawaiian shirt, as tacky
as it is tent sized, has reigned supreme.
Fortunately, a worthy challenger has emerged. Say
aloha to camp shirts, a happy medium between
surfer dude and Scoutmaster. Though playfully
patterned, they have a straight hem and tailored fit,
coming off as neat and natty, not overbearing and
oversize. Wear one atop swim trunks for a snappy
look at the shore, or match it with linen trousers to
create a rakish profile for your next summertime do.
We like to toss one on with a simple pair of khaki
shorts for a look thats ready-made for a lazy
Saturday. Mai Tai optional. Visvim Duke Shirt (left),
$670, barneys.com; Open Collar Camp Shirt, $180,
gitmanvintage.com
15
Invite
Pop Stars
Maybe your guest list includes a
few children. Maybe your grownup friends could stand to lighten
up a little. Either way, these ice
pop molds from Zoku will steal
the show. Fill them with your
favorite fruit juice, freeze and
serve. Or get creative by adding
fresh herbs or a shot of booze (for
the adults). They come in the
shapes of such characters as
(pictured left to right) Princess
Bella, Melodie the Songbird and
Cadence the Kittyan adorable
menagerie of eight in all. How
cool is that? Character Pops, $8
each, zokuhome.com
16
Choose a Chic-er
Picker Upper
Wipe away paper-napkin shame with these

handsome, blossom-patterned tissues from
Finnish brand Marimekko. Printed with
nontoxic, water-based colors, they could
convert the most committed cloth
connoisseur. Lumimarja (left) and Puketti
Paper Napkins, $6 for pack of 20,
us.marimekko.com
17
Become
Incensed
Be careful when choosing a
scented accoutrement for
your gatheringbetween the
food, guests perfumes and
any necessary bug spray, a
lot of competing scents may
already be in attendance.
Heres a good bet: Hang one
(or even a few) of these
chartreuse, bee hive-shaped
incense coils near your
minglers. Its subtle jasmine
scent lightly perfumes the
air as the coil burns
upwards. Just dont forget to
extinguish after use. Incense
Cone, from $14 for small,
anthropologie.com
18
Drink in the Views
Who says its lonely at the top? These hotel-roof bars offer ample room
to host your party when your own backyard just wont do
Ink48, New York City
Many so-called rooftop bars in

Manhattan are little more than openair balconies surrounded by viewblocking towers. The sprawling Press
Lounge, atop the Ink48 hotel,
however, has views of both the
Manhattan skyline and the Hudson
River. Bonus: an herb garden used in
the bars farm-to-table cuisine. 653
11th Avenue, thepresslounge.com
Montage, Beverly Hills
The Rooftop Grill and Pool at the

Montage are more about old
Hollywood glamour than a see-and-beseen scene. North and south-facing
vistas span the Hollywood Hills to
Sunset Boulevard, and fountains,
potted trees and private cabanas
create an oasis that feels much farther
removed from Los Angeles than just
nine stories. 225 North Canon Drive,
montagehotels.com/beverlyhills
1 Hotel South Beach, Miami
The 26,000-square-foot Rooftop Pool

Deck has an eco-luxury aesthetic that
features natural woods, palm trees,
native grasses sprouting from clay
pots and cushy couches covered in
neutral fabrics. A group-friendly
living room can be reserved for up
to 20 people. 2341 Collins Avenue,
1hotels.com
DECKED OUT Clockwise from above: The eco-chic Rooftop Pool Deck at Miamis 1 Hotel South Beach; Sugar
Bar, on the 32nd floor of Hong Kongs East Hotel, has views of Victoria Harbour; an herb garden is planted in
a former pool at the David Rockwell-designed Press Lounge atop Manhattans Ink48 hotel.
19
Pump Up the Outdoor Jam
Rule #1 for getting the party started: Ditch your

tiny speaker for something with enough power to
do your tunes justice. This 22.6-centimeter-tall,
water- and shock-proof model is more powerful
than your average speaker, and its 30-meter
range lets you mingle with guests at the far end
of the lawn without giving up control of the mix.
While you could simply perch it on a table, the
Megaboom is a snap to elevate (important when
playing music outdoors) using a standard camera
tripod or hook. You can even sync two of these
to create a stereo pair for patio-enveloping
sound. UE Megaboom, $300, ultimateears.com
20
Create a Chime Scene
For some of us, compiling a

playlist is too much pressure.
Sure, nothing beats the feeling
of getting the soundtrack right,
like when that Neil Young track
spurs a spontaneous kumbaya
moment around the fire. But
one false dubstep and all of a
sudden your guests are leaving
in droves. Simplify things with
this asymmetrical hooped wind
chime-cum-sculpture. Dangle it
from a sturdy tree branch and
a gentle breeze will trigger a
melody no one could take issue
with. And even on calm nights,
its a showstopper. Aura Double
Ring Chime, $275,
ladiesandgentlemenstudio.com
Upbeat, urban, ultramodern and

distinguished by killer views, East
Hotels Sugar Bar is a serene spot
filled with tufted ottomans and
oversize parasols 32 stories above
Victoria Harbour. Just inside, a disc
jockey spins funk and soul in a
tastefully clubby atmosphere of
flashing lights and an illuminated
dance floor. 32/F East, 29 Taikoo
Shing Road, Taikoo Shing,
sugar-hongkong.com
SH GROUP (1 HOTEL SOUTH BEACH); PREFERRED HOTELS & RESORTS (SUGAR BAR); KRIS TAMBURELLO (PRESS LOUNGE); F. MARTIN RAMIN/THE WALL STREET JOURNAL, STYLING BY ANNE CARDENAS (2)
East Hotel, Hong Kong

22
Put Together
A Lounge Act
21
Brighten
Up Your
Brolly
An outdoor umbrella is as much a

celebration of space as a defense
against the elements. Whether presiding over a beach chair or a caf
table, it defines a scene of protected
leisure. This masterpiece of engineering from Slik Outdoor Living adds
ambient light to the equation: Two
thousand built-in LED bulbs bring a
diffuse, easily adjustable amber glow
to your backyard events, letting you
entertain into the night without having to relight candles or search for
low-watt bulbs. Ni Parasol, from
$4,219, slikoutdoorliving.com
Keith Blanchard
Contrary to popular metaphor, rearranging your deck chairs

isnt necessarily a futile endeavor before catastrophe strikes.
Replace plain plastic loungers with any of these outdoor
recliners, which swap unwieldy cushions for innovative
materialsfrom the woven cords of MissoniHomes chaise
lounge to Fermobs tear-resistant polyester meshthat offer
ample poolside comfort. Here, the only icebergs your guests
need to consider are those melting in their drinks.
Fermob by Pascal
Mourgue Alize
Adjustable and
Stacking Sunlounger,
$1,435, 2modern.com
MissoniHome Cordula
Chaise Lounge, $5,012,
allmodern.com
24
Woodard Wrought Iron

Universal Adjustable
Chaise Lounge, $526,
hayneedle.com
23
Disinvite Insects,
Fragrantly
Scaring off mosquitoes usually requires
spraying noxious-smelling formulations. But
Aromaflage is designed to repel bugs and
attract humans. No DEET, just aromatic
oils, vanillin, botanical extracts and a little
vitamin E. A study at Iowa State University
found Aromaflage to be as effective as
DEET-fueled products, though it needed to
be reapplied more often. If you hate
mosquitoes and yearn to smell like citrus
and cedarwood with a hint of crme brle,
this should do the trick. Aromaflage, from
$30, aromaflage.com
K.B.
Polywood Euro Chaise

Lounge Chair, $899,
vermontwoodsstudios.com
Say Sante
When it comes to outdoor dining, the
south of France arguably does it best.
Just think of Saint-Tropezs Le Club 55
and its champagne-soaked lunches la
plage. These colorful tumblersideal
for enjoying ros out in the openhail
from the same sunny region, Biot, a
small hilltop town nestled between
Nice and Cannes thats famous for its
beautiful-yet-durable air bubble-filled
glassware. Made by local atelier
Verrerie du Val de Pome in a range of
delicious colors, these cups are tough
to chip: Theyre sturdy enough to hold
their own against wildly gesturing
guests, and they look equally
celebratory filled with water or wine.
Verrerie du Val de Pome Cups, from
$39 each, biotglass.com
Alexa Brazilian
Celerie Kemble for

Lane Venture Awning
Adjustable Chaise, $3,507,
designershouse.com
Keep Warm
And a Bit
Haute
25
Dont reach for any old scarf or

ratty sweater when the evening
chill sets in. That glamorous little
sundress deserves something far
more sophisticatedsuch as a
fine-gauge wool cardigan with a
touch of pearly beading. We covet
this one, which comes in three
other colors. Sweater, $1,050,
Miu Miu
ADVENTURE & TRAVEL

20 ODD QUESTIONS
John
Legend
by Definitive Technology. Theyve got Bluetooth, great sound and they look really
good.
MUSIC MAN Clockwise

from left: John Legend;
Villa DEste; Tom Ford
Buckley backpack;
Ginnys Supper Club in
New York; Symphony 1
headphones; a dish at
Chicagos Alinea.
The first extravagant thing I bought for myself

was: an apartment in New York, on Third
Street between First and Second Avenues,
when I got signed [in 2001]. That was three
apartments ago. My New York investments
have always paid off.
The best compliment I ever received was:
when Stevie Wonder told me that Ordinary
People was his favorite song of the year.
That was pretty good.
The best present Ive ever given was:
a coffee-table book of our wedding that
I gave to my wife as a Christmas present.
I made it with Couture Book. Its almost like
a fashion book, and she loved it.
The polymath
performer on tenting
cliff-side and dealing
with fans in airports
JOHN LEGEND WEARS A LOT OF HATS.
Known best for All of Me, the song that
bumped Pharrell Williamss Happy from
the top of the charts last year, Mr. Legend is
also a music producer, a principal in a film
company, and an education activist. Now,
hes adding an unlikely hat: tour guide.
Working with Four Seasons and TCS
World Travel, Mr. Legend has designed a
$120,000, 11-day safari into the gilded habitat of the celebrity species. In September, he
will lead up to 50 guests aboard a private
jet to five destinations from the Napa Valley
to Italys Lake Como, introducing them to
friends including Thelma Golden, director of
Harlems Studio Museum, and venture capitalist Tim Draper. There will be plenty of
luxury, too: Guests will sample rare wines
and get VIP tours of Milans Armani Museum and the Paris school where Van Cleef
& Arpels trains its watchmakers. Theyll also
zip around Lake Como on a Ferretti yacht.
Mr. Legend spoke to us from Los Angeles,
where he lives with his wife, model Chrissy
Teigen, who he said makes a mean osso
buco and cooks for him, even on the road.
When I fly I like to: watch movies, because I
never get to the theater. I also read. I just
finished an advance copy of Between the
World and Me, a look at the racial history
My arsenal of luggage consists of: two black

Tumi roller duffelsthe best big, durable,
functional bags; a Louis Vuitton roller bag
for underwear and toiletries in case things
get lost; and a Tom Ford backpack with the
cool zipper, for my laptop.
of our country by Ta-Nehisi Coates. Its really powerful and emotional.
St. Barts last spring and a week in the Maldives for Christmas.
My favorite travel app is: On the Fly by ITA

Software. We do a lot with frequent-flier
miles so I like to see all the options available. I even book my wifes flights.
A hotel room Ill never forget was: at the Four

Seasons Tented Camp Golden Triangle in
northern Thailand. We slept in a tent that
sat on a cliff, almost like a tree house. Its
one of most remarkable places Ive stayed
in the world.
I usually get to the airport at: the very last

minute. Interacting with people who want to
take a picture can be tough to deal with
when Im trying to make a flight. I know its
a high-class problem to have.
My wife and I made an agreement to: never

go more than a week without seeing each
other.
I drive: a Tesla, the new S85D model. Its

completely electric, so beautifully done. We
just plug it in at night like a golf cart. A
very special golf cart.
Lately Ive been listening to: Alabama Shakes

new album, Sound & Color. I like to listen
to albums, front to back. It takes you to a
zone.
The perfect vacation is: mellow. My wife and

I love to eat and just relax and recharge.
Our last vacation was a quick trip to the
Meadowood resort in the Napa Valley for
Memorial Day; before that, it was a week in
My first musical influence was: my grandmother. She taught me how to play gospel
piano as a child.
My favorite headphones are: the Symphony 1
A great place to hear music in New York City is:

downstairs in the lounge at Marcus Samuelssons Red Rooster [Ginnys Supper Club].
Great food. Great vibe.
A meal is more than a meal at: Alinea, in Chicago, where art and culinary science meet.
Dinner takes three or four hours, but its
worth it.
One thing Ive learned from my travels is:
were all alike. We tend to focus on what divides and separates us, but theres so much
that connects us, like art and music.
I dream of returning to: Italy. One of our first
vacations was at the Villa dEste on Lake
Como back in 2007. We just fell in love with
it and went back to be married there last
year.
The first time I left the country was: in college. I went to Jamaica with an a cappella
group, and we sang for our accommodations at a Sandals. It was pretty funny. We
were the only non-couples there.
Edited from an interview
by Christian L. Wright
AMANDA MARSALIS FOR THE WALL STREET JOURNAL, GROOMING BY TAMARA OGDEN, LOCATION: HELIPAD AT FOUR SEASONS HOTEL LOS ANGELES AT BEVERLY HILLS (PORTRAIT); PIERO MOLLICA (VILLA DESTE); CHRISTIAN SEEL (ALINEA); AYANO HISA (GINNYS)
ROAD WARRIOR
GUILLAUME DEGLISE is chief executive of Vinexpo, the worlds largest wine and spirits exhibition.
The French executive spoke with
the Journal about leaving space in
his suitcase for souvenirs, eschewing desserts and why he takes a
corkscrew along on his travels.
Favorite airline?
I fly Air France almost every week.
It is like being at home for me. I
was recently invited to their headquarters in Paris to discuss their
onboard wine-list strategy. Wine
sourcing and service is an important aspect of the French lifestyle.
How often do you travel?

It depends on the year, as Vinexpo
takes place in Bordeaux and then
Hong Kong every second year. So I
will travel more when the show
takes place in Hong Kong. I travel
about 30% of my time when we
are based in Bordeaux. When we
run our exhibitions overseas, I
travel up to 50% of my time. This
years show took place [last week]
in Bordeaux, and in preparation
for the show I traveled to the U.K.,
Hong Kong, China and the U.S.
Best airport?
On a recent trip to India, I was
amazed by Terminal 2 at the
Chhatrapati Shivaji International
Airport in Mumbai. It is visually
stunning with lots of Indian heritage integrated with world-class
design and architecture.
Where do you go most?

I often fly to Asia and to the U.S.,
where the consumption of wines
and spirits is fast increasing. But I
also frequently visit European
wine-producing regions.
Which city has the best taxis?

Tokyo. Drivers are polite, wear
white gloves and accept credit
cards, and the car doors automatically open for you. The moto-taxi
in Delhi is another great experience. It is the best way to see,
smell and experience the special
atmosphere of the city. They are so
cheap and you can get to so many
places in the city quite quickly, but
zipping through the traffic can be
a little daunting when you first experience these taxis.

Favorite hotel?
The service in the Mandarin Oriental Hong Kong is truly wonderful.
The Vinexpo team recently stayed
there. We also held our Vinexpo
Bordeaux Hong Kong press conference there in February. The team
there is slick and professional with
a touch of class. I also really rate
the Four Seasons Hotel Mexico D.F.
I have to say, I am more into city
hotels than resorts.
Which Asian country has the best
food?
Vietnam for the simple, fresh and
tasty meals.
Best coffee?
Italy and Portugal are far ahead of
other countries for coffee. Their
varieties are strong and well-balanced in taste, and you get quality
[blends] wherever you are.
Whats your packing strategy?
I travel a lot with Vinexpo, so I
GUILLAUME DEGLISE
Save Some Room for Souvenirs

need to pack quickly and efficiently. Business-travel packing
takes a bit of practice. I usually
bring one or two suits according
to the duration of the trip, a few
ties and shirts, some casual
clothesand a corkscrew, because
you never know where you can
enjoy a wonderful bottle of wine.
Do you check luggage or pack light?
I usually check in my luggage so
that I can bring whatever I want
without too much discussion with
the security at airports.
How do you keep fit on the road?
Walking as much as I can, to and
from the hotel and any events we
may have for Vinexpo. I try to occasionally swim in the pool or the
sea. I also have a ban on desserts.
Best travel experience?

I love skiing and, as a European, I
have always found it fun to ski in
July in the Southern Hemisphere.
My best experiences so far were
[in] Queenstown, New Zealand
and Valle Nevado, Chile.
Worst travel experience?
It happened long ago when I visited a wine importer in Haiti.
They were supposed to pick me up
at the airport but they missed the
appointment. There were [military] U.N. Blue Helmets everywhere and no taxis. It was late, a
storm broke, and I followed two
guys in a raggedy car. I was terrified. I thought it was going to be
the end, but after one hour we arrived at a guest house in the
countryside, where I enjoyed the
best rum I can remember.
Whats your best travel advice?
Dont pack too much; leave a little
room in your suitcase. When you
travel you always end up accumulating mementos and items from
your travels. I find that I always
come home to Bordeaux with more
luggage than when I left.
Edited from an interview
by Mark Lean
STYLE & FASHION

The best way to bring snap to your vacation wardrobe? Swim trunks printed with an aquatic photo
BY JACOB GALLAGHER
efore he dove headfirst into the world of

sporty swimwear, Orlebar Browns designer, Adam Brown,
made his living as a shutterbug.
Or at least, he tried to. I wasnt
very good, said Mr. Brown. I
took photographswhether I was
a photographer or not was a different matter. Though his life behind the lens didnt quite pan out,
with Orlebar Brown he has found
a new career as a printmaker, using more capable photographers
work to transform his labels trim
trunks into wearable works of
aquatic art. We now see our
shorts as quite a blank canvas,
said Mr. Brown. With the photo
print [a man] can express his per-
sonality in a more colorful way

while hes on holiday.
Slim Aarons spirited seaside
shots, Alex MacLeans epic aerial
landscapes, Jon Franks wavy pinhole capturesover the years
Orlebar Browns trunks have
showcased an eclectic array of
photographers, but its suits are
hardly the only submergible galleries on the market.
Brands such as Ted Baker, Onia
and Paul Smith have gotten in on
the print game, turning snaps of
various beachy locales into talking-point trunks. People like the
novelty of a cool photographic image, said Chris Manley, the
founder of Surfsidesupply Co., a
three-year-old swimwear label that
has included a couple of full-image
shorts in each collection since last
spring. [Swim trunks] are the one
area of a wardrobe where you can
have a little bit of fun and not take

yourself too seriously.
As Robbie Gordy, 28, a features
writer at Christies in New York,
pointed out, the contrast between
the image on your shorts and your
surroundings can make for an
amusing juxtaposition. Its rather
ironic, he said, when youre at
Lake Okoboji and youve got SaintTropez on your swim trunks.
All this levity has a limit, however. While its appealing to stand
out at the pool amid guys in generic suits, aim for a tasteful
splash, not an ostentatious belly
flop. Steer clear of photo-print
trunks that depict gaudy tropical
sunsets or monstrous silhouetted
palm trees. More restrained
prints, like those seen at right,
evoke an easygoing afternoon in
the sun, not a shoreside tequila
bender.
BODY SHOTS Photo-print swimsuits like these redefine the wet look. From
left: Lakely Tropical Print Swim Shorts, $110, tedbaker.com; Bulldog Roc Pool
Photographic Swim Shorts, $345, orlebarbrown.com; Surfsidesupply Co. Photo
Real Water Print Swim Trunks, $88, bloomingdales.com
SCANNING THE HORIZON

for the next Top Travel Business Leader.
tbla.cnbc.com
Find out more about the CNBC Travel Business Leader Award 2015.
KNOWLEDGE PARTNER
RESEARCH PARTNER
PRESENTED AT
F. MARTIN RAMIN/THE WALL STREET JOURNAL, STYLING BY ALEJANDRA SARMIENTO
Postcards From the Waters Edge
MANSION
FROM TOP TO BOTTOM: JUSTIN CLEMONS FOR THE WALL STREET JOURNAL; STEPHEN VOSS FOR THE WALL STREET JOURNAL (4); RICKY RHODES FOR THE WALL STREET JOURNAL (2)
$1 MILLION PARTY BARNS
With cathedral-like spaces and rustic grandeur, meticulously restored barns

leave the farmyard and become the life of the party
BY AMY GAMERMAN
fter Joe and Connie

Mitchells son and his
bride said their vows
beneath an arbor of
gnarled cedar trees on
the family ranch near Glen Rose,
Texas, it was time to celebrateso
everyone headed for the party barn.
There, under hand-hewn hemlock rafters strung with lights and
decked with greenery, more than
200 wedding guests dined on TexMex and danced to an eight-piece
band, crowding a dance floor that
was buried under hay a century
ago.
With all those twinkle lights in
an old barn, the atmosphere is just
incredibletheres so much history, said Mrs. Mitchell, 64, who
founded a telecommunications
company with her husband and
now raises a crossbreed of WagyuAngus cattle on their ranch.
Prized for their cathedral-like
architecture and antique wood patina, centuries-old post-and-beam
barns are being reborn as fullblown entertainment facilities,
complete with bars, catererfriendly kitchens, and guest bedrooms. The rustic look comes at a
premium, with prices for vintage
party barns starting in the hundreds of thousands of dollars.
It can cost well over $1 million
for a big, full-scale behemoth,
said Jim Dixon, an architect who
has remodeled old barns and designed new, old-style party barns
for clients in upstate New York
and Connecticutone of whom requested a barn with an indoor basketball court. The party barn allows them to have an excuse.
The 3,600-square-foot Englishframed barn where the Mitchells
have held wedding receptions for
three of their five children was
first built in 1850 on a farm in upstate New York. The Mitchells
spent about $300,000 to have it
READY FOR GUESTS Joe and Connie Mitchells barn, top, at their ranch near Glen Rose, Texas, hosted their sons wedding reception recently. Middle row: Fred and
Karen Schaufeld restored their barn in Leesburg, Va. It has ample space for entertaining, with kitchen countertops large enough to prepare and serve food. The
northeast facade was replaced with a wall of windows. Bottom row: Bob and Marcia Williams converted an old dairy barn on their farm in northeast Ohio. On the
left is a table made from wood found under the floorboards. On the right is a view of the barns rafters.
dismantled and loaded onto two
tractor-trailers bound for their
Ten Triple X Ranch, where it was
raised and fully restored in 2000.
In 2009, the Mitchells spent
$250,000 on another party barn
for the rancha smaller Dutch
barn from New Yorks Mohawk
Valley that dates to the American
Revolution. They put the barn
next to their house, and use it for
more intimate gatherings.
They acquired both barns from
Heritage Restorations, a company
with offices in Texas, Montana and
Connecticut that specializes in relocating and restoring historic
barns, mills and houses. Party
barns are 10% of our workand
probably growing, said Kevin Durkin, founder of the company, whose
barns are also converted into

homes and commercial spaces.
When people have homes in
the country, its a frequent requesta barn is on the wish-list,
said Ken Fulk, a San Francisco designer. He likes to hang chandeliers from the rafters of his own
white steel-framed party barn in
Napa, Calif., for formal dinners.
For owners of old barns, the
challenge is to refurbish dilapidated
agricultural structures without
compromising their character. The
Mitchells have kept their barns unadornedalthough they did put in
bathrooms. Its hard to have weddings where the bride goes to an
outhouse, Mrs. Mitchell said.
Karen Schaufeld spent two
years restoring a decaying 1867
barn on her farm in Leesburg, Va.

Being able to preserve the look
of the wood was really importantI didnt want to see drywall, said Ms. Schaufeld, 53, a
childrens book author and philanthropist. She and her husband,
Fred, the managing director of a
private-equity firm, acquired the
farm in 2004 for $4.5 million, according to public records.
During the remodel, the 1,945square-foot barn was raised on hydraulic lifts to replace its rotted
timbers. The old oak walls were reinforced with hidden structural insulation panels, then clad in
bright-red board-and-batten siding.
The barns entire northeast facade
is now floor-to-ceiling glass; unlike
their bovine predecessors, the
Schaufelds have views clear across

to Maryland. Theyve filled the
barn with art and antiques, including a folk-art painting of a cow
that can be winched up on a rope
to reveal a large flat-screen TV.
Its a great place to hang out.
Weve had, like, 120 people for
cocktails, said Ms. Schaufeld. The
barns kitchen was designed for
big parties, with ample counter
space for preparing and setting
out food. Caterers can park their
truck directly under the corncrib,
and the space where farm wagons
once unloaded corn from the
fields has been remodeled with a
service staircase and shelves for
storing racks of dishes and glassware. Ms. Schaufeld declined to
say what the barn remodel cost.
MANSION
TEXAS TOUCHES Barbara and

Bill Hoppe use their party barn
outside Houston as a pool
house. Inside, an antler
chandelier and stone fireplace.
JULIE SOEFER FOR THE WALL STREET JOURNAL (3)
RICKY RHODES FOR THE WALL STREET JOURNAL; BLACKBURN ARCHITECTS (BEFORE)
WEDDING BELLE An eightpiece band, right, performed at

the wedding reception Joe and
Connie Mitchell held in their
barn near Glen Rose, Texas.
The couple relocated and
restored a second barn on their
ranch, an 18th-century Dutch
barn, above.
COMEBACK Bob and Marcia

Williams restored the barn on
their farm in Ohio, left. Above
is the barn before it was
restored. They moved the
century-old structure nearly
650 meters away from the
road for a more scenic location.
Our converted barns tend to

be in the neighborhood of $1 million, said her architect, John
Blackburn, adding that its more
costly to restore an old barn than
to build a new one. If the barn is
in decent shape, you may be able
to do something for as low as
half-a-million dollars. But if you
want to pick it up and move it and
have unique finishes, that starts
to run up the cost.
Bob and Marcia Williams
moved their century-old dairy
barn nearly 650 meters away from
the road to a more scenic location
on their gentlemans farm in
northeast Ohio, which they bought
in 2007 for $725,000, according to
public records.
The barn cost more than the
farm, said Mr. Williams, 58, a retired insurance-industry executive,
who preferred not to state the total
cost of the 2010 conversion, which
Mr. Blackburn designed. The farmhouse is a beautiful place to have a
party for eightbut we can have a
hundredeasyat the barn.
They entertain 100 guests or
more at their annual holiday party
in the 3,260-square-foot barn. The
large stone fireplace is a new addition, as are the traditional sliding
barn doorscustom-made from reclaimed wood and hung on antique
metal tracksthat frame new glass
doors and floor-to-ceiling windows. The two haylofts on opposite ends of the barn have both
been converted into guest bedrooms, with steel railings shaped
with branches, leaves and tiny insects. A former grain silo is now a
two-story porch.
The barns dining table and
kitchen cabinets were crafted from
wormy chestnut panels discovered
under its rotting floorboards. (The
pockmarked wooda rarityis the
byproduct of a blight in the early
1900s that wiped out nearly all the
U.S.s American chestnut trees.)
The built-in ladders to the barns
rafters are original; guests sometimes like to climb them. Thats
the downside of having a barn,
said Mr. Williams, who has found
beer cans and other mementos on
the beams after his sons parties.
Inspired by a trip to the Cotswolds in the U.K., Bill Hoppe, a
managing director at BNY Mellon,
bought an 1810 hand-hewn Englishframed barn for his ranch west of
Houston. The barn, which he spotted on Heritage Restorations website and had transported from upstate New York, was remodeled in
2008 for about $580,000, he said
adding that he did some of the carpentry and electrical work himself.
It would probably be
$700,000 to $800,000 to replicate
it today, said Mr. Hoppe, 57, who
has thrown Thanksgiving dinners,
corporate gatherings and collegefraternity reunions in the 1,200square-foot barn.
A custom antler chandelier
hangs from an old hemlock beam
over a scarred wooden bar. The
bar, which seats 10, was fashioned
from a 19th-century threshingfloor board. It reeked of horse
manure, said Mr. Hoppe, who
pressure-washed and refinished
the bar-top himself.
HONOLULU, HI
JUSTIN CLEMONS FOR THE WALL STREET JOURNAL (2)
OLD SOUL Inside the barn,

below, restored by Fred and
Karen Schaufeld on their
farm in Leesburg, Va. Built
around 1867, the barn is
furnished with antiques and
works by local artists. The
walls and floorboards are
original. At left, before
restoration.
THE FIRST RESIDENTIAL BUILDINGS IN HAWAII

BY RICHARD MEIER & PARTNERS
S E L EC T YO U R M E I E R R E S I D E N C E S TA R T I N G J U N E 2 6 T H
R E S ID ENCE S AVA IL A BL E FROM $1.5 M
W A R D V I L L A G E TO K YO G A L L ER Y
2 - 5 - 16 - 8 01 S H I R O K A N E M I N ATO - K U
TO K YO 10 8 - 0 072 JA PA N
JA PA N .G A L L ER Y @ H O W A R D H U G H E S .CO M
0 3 - 5 4 8 8 - 6 370
W A R D V I L L A G E H O N O L UL U G A L L ER Y
124 0 A L A M OA N A B O UL E VA R D
H O N O L UL U, H I 9 6 814
D W I G H T. S Y N A N @ W A R D V I L L A G E .CO M
8 0 8 . 3 6 9.9 6 0 0
W A R D V I L L A G EG AT E W AY.C O M
STEPHEN VOSS FOR THE WALL STREET JOURNAL; BLACKBURN ARCHITECTS (BEFORE)
Obtain the Property Report required by Federal law and read it before signing anything. No Federal agency has judged the merits or value, if any, of this property. WARNING: THE
CALIFORNIA DEPARTMENT OF REAL ESTATE HAS NOT INSPECTED, EXAMINED OR QUALIFIED THIS OFFERING. This ad is not intended to be an offer to sell nor a solicitation
of offers to buy real estate in Ward Village development to residents of Connecticut, Idaho, New York, New Jersey, and Oregon, or to residents of any other jurisdiction where prohibited by law.
No offering can be made to residents of New York until an offering plan is led with the Department of Law of the State of New York. Ward Village is a proposed planned master development in
Honolulu, Hawaii that does not yet exist. Photos and drawings and other visual depictions in this advertisement are for illustrative purposes only and do not represent amenities or facilities
in Ward Village and should not be relied upon in deciding to purchase or lease an interest in the development. The Developer makes no guarantee, representation or warranty whatsoever that
the developments, facilities or improvements depicted will ultimately appear as shown. This is not intended to be an offering or solicitation of sale. Exclusive Project Broker Ward Village
Properties, LLC. Copyright 2015. Equal Housing Opportunity.
MANSION
When Your Home Is Your Tax Shelter

Guernsey, a small island in the English Channel, has a cap on income tax and
no inheritance or capital-gains taxes. But buying a home in this tax haven isnt easy
BY RUTH BLOOMFIELD
FROM TOP: DYLAN THOMAS FOR THE WALL STREET JOURNAL (3); BELL & CO.; MARTEL MAIDES
100 miles
100 km
U.K.
million for a 1,340-square-foot

penthouse. Meanwhile, a comparable open-market apartment is still
available at about $3.5 million.
Yes, we are expensive, but we
are not much more expensive than
places in the U.K., said Mr. Fox.
Rather like its lifestyle, the
property market in Guernsey is
sensible rather than thrilling. The
history of the market is like a step
graph, Mr. Whitman said. It is
flat for two or three years, then it
goes up for a year or two. It is not
an exciting market. Out of 1,600
[open market] homes there are
perhaps 50 or 100 sales per year.
Guernsey and Alderney both
tend to attract a mature crowd of
overseas buyers for whom the lack
of inheritance tax makes up for the
high prices. Around 80% are Britons, age 55-plus, who are living off
investments or the proceeds of the
sale of a business. Other buyers
tend to be from Europe, with the
odd pioneer from North America,
South Africa and New Zealand.
Michael and Anne Doury fell in
love with Alderney, a 20-minute
hop from Guernsey by twin-engine
plane, while on vacation. They
sold their home in Londons fashionable Notting Hill neighborhood
and, in April, moved into a threebedroom home on the island.
Despite being larger, their new
house cost around half what they
sold the Notting Hill property for.
The island observes the same tax
structure as Guernsey, but they say
Londons sky-high property prices
was the key financial reason behind
their move. We really felt the market had peaked, said Mr. Doury,
66, who is semi-retired after a long
career in television distribution.
Unlike Guernsey, Alderney operates a regular single-market system
and offers significantly more value
for the money for overseas buyers.
Currently on the market for
$2.57 million is the 5,122-squarefoot former home of the president
of Alderney, Val des Portes. This
imposing Georgian townhouse, with
six bedrooms and two bathrooms,
is considered the grandest house in
St. Anne, Alderneys only town.
Alderney suffered a tougher recession than Guernsey. Andrew
En
t is sandwiched between
England and France, yet it
is not part of the European
Union. Its expat community is mostly made up of
seniors looking for an old-fashioned way of life. And it expects
foreigners to pay at least twice as
much as locals for the privilege of
living on its 78 square kilometers.
Could old Guernsey be the
worlds most unlikely tax haven?
The quirky little jurisdiction is
one of seven permanently inhabited islands in the English Channel
and sits about 145 kilometers south
of Britains mainland. But despite
the proximity, Guernsey and neighboring islands like Alderney are little known even to the British.
I used to pick clients up at the
airport who would say, I had
never even heard of Guernsey before my accountant said I should
think about moving here, said
island estate-agent Richard Fox,
director of Martel Maides.
Financial advisers favor Guernsey for is its tax system. Here, income tax is capped at 20% and
there is no inheritance or capitalgains tax. Anybody with an EU
passport can take advantage of
this system by buying a property
and spending at least 91 days per
year on the island. (Those outside
the EU will also require a visa.)
Aside from low taxes, there is a
lot to like about Guernsey. Its
coastline is beautiful, and its main
town, St. Peter Port (where Victor
Hugo wrote Les Misrables), has
good restaurants and wine bars
and ample shopping. Opportunities
for sailing, golf, tennis and horseback riding abound. The flight
from London takes under an hour.
Homes range from fine Georgian manor houses, to 17th-century
granite farmhouses, to Victorian
and Regency townhouses, often
decorated with distinctive brickwork known as quoins.
A good example in St. Peter
Port is En Faadestreets and
buildings tend to have French
names because Guernsey was once
part of the province of Normandy.
This 4,600-square-foot Georgian
townhouse with four bedrooms and
four baths is listed at 2.85 million,
or $4.43 million and is for sale in
what is known as the open market.
Under Guernseys two-tier
property system, about 21,000 of
the islands homes are designated
as local market and reserved for
islanders. Foreigners can only buy
one of the 1,600-or-so open market properties, and they do not
come cheap.
This is partly, explained Mr.
Fox, because properties designated
as open market by the islands government have tended to be the
larger and more expensive homes.
And because demand for them has
outstripped supply, a hefty premium has developed since the system was established in the 1950s.
At Les Residences, for example,
a development of 13 apartments
overlooking the scenic Cobo Bay on
Guernseys west coast, a local
buyer recently paid just under $1.5
BY THE SEA
One of Guernseys beaches
and some of the sights in
St. Peter Port, below.
A flight from London takes
less than an hour.
s
li
Ch
anne
London
Alderney
Guernsey
FRANCE
Eggleston, managing director of

Bell & Co. estate agents, estimates
that property prices fell around
20% during the downturn. Today,
two-bedroom apartments cost
from around $390,000, and fourbedroom houses from around
$625,000 to $775,000.
But it could just be that affordable, peaceful Alderneywhich
measures 8 square kilometers
may end up having the last laugh
over its larger, wealthier neighbor
Guernsey, with its designer fashion stores and yacht club.
We dont usually attract the
mega rich here because we have
not got what they want for their
lifestyle, but if you like a quieter
existence [Alderney] is perfect,
said Mr. Eggleston.
ISLE STYLE On Guernsey, a Georgian home in St. Peter Port, above, is listed for
$4.43 million. A Georgian townhouse, below, on Alderney is listed for $2.57 million.
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GEAR & GADGETS
Eat My Sons Dust

Buying a motorcycle may be a mid-life-crisis clich, but sidecars can make riding a family affair
BY JONATHAN WELSH
THIRD WHEEL The 2015 Ural

Gear-Up, in woodland camo.
MICHAEL BYERS
hen Michael
Homsany and his
wife, Kendra Pinsker, wanted to
take their 7-yearold son on a road trip from Seattle
to Los Angeles two years ago, they
didnt get a minivan or RV. They
bought a sidecar motorcycle.
An avid biker when he was
younger, Mr. Homsany, 61, gave up
on two-wheel transport years ago,
but when his son turned 5old
enough for his parents to consider
bringing him along on a serious
adventureMr. Homsany was
ready to get back on a motorbike.
Only this time, he said, he wanted
space for the entire family.
His ride, a Yamaha V Star 1100
Custom with a DMC Kenna Double
sidecar, has since become his goto vehicle for a range of errands,
from grocery shopping to school
drop-offs.
Along with impulse-buying
sports cars, climbing on a motorcycle has long been a symptom of
a midlife crisis. Now, baby boomers and Gen-Xers in the midst of
such a crisis are using bikes to
shore up family bondsby adding
a third wheel.
Motorcycles with sidecars attachedoften called sidecar rigs or
hacksare growing in popularity,
fueled in part by riders who want
to bring their spouses, children or
even the dog along for the ride.
The sidecars family-friendliness was a selling point for Tony
Poulson, a 32-year-old cartoonist
in Salt Lake City. He has two children, both under three. Until
theyre old enough to ride, Mr.
Poulson and his wife use the sidecar for date nights.
Of course, children should take
standard motorcycle-safety precautions. Minors are required to
wear a helmet in most U.S. states.
And although seat belts are not required in states that classify a
sidecar as an extension of a motorcycle, owners can have them installed. According to Russ Rader, a
spokesperson for the Insurance Institute for Highway Safety, a sidecar rig isnt designed to be as
crashworthy as a car, but installing
a seat belt makes sense because it
mitigates the risk of passengers
being ejected in a collision.
Mr. Homsany said his son wears
a full-faced helmet, armored riding
jacket and gloves. And Mr. Poulson
sees the sidecar as a way to introduce his daughter to the sounds,

sights and feeling of being on a
bikea world you cant experience
inside the comfort of a car.
We are getting younger people
who bring their families, said Al
Olme, president of the United Sidecar Association, a U.S. club for
sidecar owners. Overall membership today totals about 1,000up
8% from a year ago. And the group
is keen on attracting riders with
children to its ranks. We try to
make our events as family-friendly
as possible by including activities
for kids, Mr. Olme said.
This week, the club is holding
its annual rally in Sturgis, S.D.,
several weeks before the truly
enormous Sturgis Motorcycle
Rally. Ours is a much smaller
event, Mr. Olme said, And I

dont think anyone is intimidated
when a bunch of sidecars show
up.
For inexperienced riders, a motorcycle with a sidecar can be less
intimidating than a two-wheeler.
The sidecars third wheel offers a
practical advantage: It keeps the
vehicle upright. Thats a big attraction for riders who might find
it difficult to hold up a 300-kilogram motorcycle at a stoplight.
Piloting a sidecar rig isnt as
straightforward as it seems, however. When accelerating, these
asymmetrical machines tend to
pull or yaw toward the sidecar
(which is usually mounted on the
right side of the bike), but they
want to turn in the opposite direction when slowing down. More
disconcerting, in sweeping turns,
a lightly loaded sidecar can suddenly rise off the ground. This is
known as flying the chair and
can be unsettling for the unprepared rider.
Evenly distributing the weight
of passengers and cargo can help
prevent thisand is vital for maintaining comfort and good handling.
But the adjusting of suspension
springs, tweaking of wheel angles
and other complexities of a sidecar
rig can turn off even longtime motorcycle riders. Owners have to accept their rigs quirks and realize
that driving one has little in common with riding a motorcycle.
To get a three-wheeler, riders

would traditionally have to bring
their motorcycle to specialist
shopslike DMC Sidecars in
Enumclaw, Wash., or Motorvation
Engineering in Sibley, Iowato
have the sidecars attached and set
up. But there are larger sidecarrig builders that sell the bike and
sidecar assembled and ready to
go. The Russian company Ural is
the heavy hitter. It sells about 600
bikes a yearor half its total productionto customers in the U.S.
Price can be a hurdle for younger riders. While you can still find
a nice motorcycle for a few thousand dollars, good hacks typically
cost much more. Urals start at
$13,000 and top out around $17,000
before adding accessories like
windshields and cargo racks, and it
is easy to spend $20,000 or more
buying and setting up a custom
motorcycle-sidecar combination.
While sidecars appear to be on
the rise now, their history is
marked by a fluctuating fan base.
They were popular in the early
days of motorized transportation,
when motorcycles competed with
cars as an efficient way to get
around on the eras rutted, unpaved roads. Sidecar rigs were a
major step up from two-wheelers,
allowing motorcyclists to carry
more passengers and cargo.
During those years we were
marketing the motorcycle and
sidecar as a serious alternative to
the car, said Bob Klein, a spokesman for the Milwaukee motorcycle giant Harley-Davidson. But the
arrival of reliable, enclosed and
relatively inexpensive cars like the
Ford Model T hurt hack sales, Mr.
Klein said. And while World War
II and the surge of motorcycle culture through the 1960s and into
the 70s gave sidecars a boost,
they have long been near or on
the fringe. Harley stopped offering
them in 2010.
Whether the current crop of
sidecar rigs marks a major comeback will rely in part on people
like Jamie Robinson, a former
professional motorcycle racer who
now produces cycle-centric travel
films. Based in Los Angeles, Mr.
Robinson, 39, and his son, Giacomo, who is 3, have been racking up kilometers in their Ural
Gear-Up rig, which can be shifted
into two-wheel drive on difficult
terrain.
Not all roads are smooth. After
using the rig to ferry Giacomo to
and from preschool, Mr. Robinson
got a stern request from school
administrators: They asked me to
please stop doing that.
But the father-and-son duo still
ride off school grounds. There is
always risk in motorcycling, and
the sidecar is also potentially dangerous, but the experience is
worth the risk, Mr. Robinson
said. The whole experience with
Giacomo has been very rich.

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As of 12 p.m. ET DJIA 18003.04 0.21% FTSE 100 6807.82 g 0.54% Nikkei 225 20771.40 g 0.46% Shanghai Comp. 4527.

SK. MENPEN R.I. NO: 01/SK/MENPEN/SCJJ/1998 TGL. 4 SEPT 1998

MCI (P) NO. 124/10/2014

KDN PP 9315/10/2012 (031275)

VOL. XXXIX NO. 209

(India facsimile Vol. 7 No. 13)

FRIDAY - SUNDAY, JUNE 26 - 28, 2015

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