The Wall Street Journal November 14 2016

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MONDAY, NOVEMBER 14, 2016 ~ VOL. CCLXVIII NO. 115
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rumps presidency
could boost growth and
bring higher rates and inflation along with the risk
of global trade wars, economists surveyed said. A1
The mortgage market
could be upended by the
election, with higher rates
and looser regulations. B1
Gold has fallen 8.5% since
Election Day amid investor optimism that Trumps policies
could boost the economy. B11
The dollar has climbed
2.4% on the election, as investors see higher rates. B11
Philippine officials returned $15 million of $81
million stolen from Bangladeshs account at the New
York Fed in February. B1
VW confirmed that the
U.S. and EU are probing carbon-dioxide emissions in
certain Audi automatictransmission vehicles. B3
Pfizers Celebrex posed
no higher risk to a patients
heart than rival painkillers,
according to a drug study. B1
Electric utilities reliance
on coal has dropped, making
Trumps vow to revive the industry hard to fulfill. B3
AMC appears set to win
approval for a $1.2 billion
deal for Carmike Cinemas. B5
World-Wide
Trump named RNC
Chairman Priebus as his
chief of staff, suggesting the
president-elect is interested
in a more conventional approach to governing. A1
House Republicans are
expected to renominate
Ryan as speaker, as grumblings over his tensions
with Trump recede. A4
Iraqi troops pushed
deeper into Mosul, securing densely populated areas as Islamic State resistance began to buckle. A1
BY MICHAEL C. BENDER
AND CAROL E. LEE
President-elect Donald Trump
named Republican National
Committee Chairman Reince
Priebus as his chief of staff, a selection that suggests the Republican is interested in a more conventional approach to governing
after his insurgent campaign.
Mr. Trump on Sunday also
named Stephen Bannon as his
chief strategist and senior
counsel. Mr. Bannon, who was
chief executive of the Trump
campaign, was in consideration
with Mr. Priebus for the White
Houses top personnel position.
Steve and Reince are highly
qualified leaders who worked
well together on our campaign
and led us to a historic victory,
Mr. Trump said in a statement.
Now I will have them both
with me in the White House as
we work to make America great
again.
The selection of Mr. Priebus as
staff chief is an important marker
in Mr. Trumps high-pressure
race against the clock to build the
next administration. That effort
begins in earnest on Monday, as
his broader transition team holds
its first formal meetings since a
shake-up on Friday that installed
Vice President-elect Mike Pence
atop the organization.
Still, Mr. Trumps transition
is slightly behind the pace set
by previous incoming presidents and the timetable estabPlease see STAFF page A4
Colombias president
plans to present a new peace
pact with rebels to Congress,
bypassing voters who rejected an earlier deal. A8
South Koreans called for
President Park to resign, in
the countrys largest demonstrations in decades. A9
Pro-Russian candidates
appear to have won presidential elections in Moldova and Bulgaria. A9
Chief Strategist
REINCE PRIEBUS
DONALD J. TRUMP
STEVE BANNON
BY JOSH ZUMBRUN
The presidency of Donald
Trump is poised to usher in a
new era for the U.S. economy
that forecasters say could
boost economic growth, bring
higher interest rates and inflation, and a new set of potential risks including international trade wars.
The Trump Transition.... A4,A6
Is nuclear power vital to

hitting emissions targets?
Energy, R1-8
Central bankers lowered

and made it difficult for funds
By Timothy W. Martin,
interest rates to near zero or
to meet mounting obligations
Georgi Kantchev
below to try to revive their
to workers and retirees who
and Kosaku Narioka
gasping economies. In the
are drawing government penprocess, though, they have
sions.
put in jeopardy the pensions
As low interest rates supof more than 100 million government workers
press investment gains in the pension plans, it
and retirees around the globe.
generally means one thing: Standards of living
In Costa Mesa, Calif., Mayor Stephen
for workers and retirees are decreasing, not
Mensinger is worried retirement payments
increasing.
will soon eat up all the citys cash. In AmsterUnless ordinary people have money in
dam, language teacher Frans van Leeuwen is
their pockets, they dont spend, the 70-yearangry his pension now will be less than what
old Mr. Kobayashi said during a recent protest
his father received, despite 30 years of contriof benefit cuts in downtown Tokyo. Higher
butions. In Tokyo, ex-government worker
interest rates would mean thered be more
Tadakazu Kobayashi no longer has enough inmoney at our disposal, even if slightly.
The low rates exacerbate cash problems alcome from pension checks to buy new clothes.
ready bedeviling the worlds pension funds.
Managers handling trillions of dollars in
government-run pension funds never expected Decades of underfunding, benefit overpromises, government austerity measures and two
rates to stay this low for so long. Now, the
recessions have left many retirement systems
world is starved for the safe, profitable bonds
with deep funding holes. A wave of retirees
that pension funds have long needed to surPlease see RATES page A10
vive. That has pulled down investment returns
8%
7
6
5
4
3
2
1
0
95
2000
10
Source: Bloomberg Barclays Global

Aggregate Index
THE WALL STREET JOURNAL.
England Has a Mole Problem:

Feuding Catchers
i
BY NEANDA SALVATERRA
Media............................ B5
Opinion............... A15-17
Sports........................ A14
Technology............... B4
U.S. News............. A2-3
Weather................... A13
World News........ A7-9
>
tude, low-growth orbit, said

Sean Snaith, director of the
Institute for Economic Competitiveness at the University
of Central Florida. The question is, he said, Will it put the
economy in a higher growth
orbit, or will it knock us down
into the atmosphere and a fiery re-entry?
On average, economists
Central-bank moves pull down returns, making it difficult to meet mounting obligations
Pros who whack the vermin fight over

their fields integrity; keep off my patch
Journal Report
The cautious optimism revealed in The Wall Street Journals latest monthly survey of
economists owes to the belief
that the Republicans proposals
to reduce taxes and invest in infrastructure will amount to a
substantial fiscal stimulus.
The change of administration could knock the U.S.
economy out of its low-alti-
marked up their growth forecasts. The economy could expand 2.2% in 2017 and 2.3% in
2018, as the fiscal stimulus
kicks into gear, up from about
1.5% over the past 12 months.
Inflation is seen at 2.2% next
year and 2.4% in 2018. If correct, it would be the first
stretch of sustained inflation
Please see RISE page A2
LOW RATES HAMMER PENSIONS Resistance

Yield on a global index
of government bonds
Obama faces the task of

reassuring allies about U.S.
foreign policy as he prepares for his final world
tour as president. A8
President-Elect
Era of Growth, Inflation, Risk Looms
Diminishing Returns
EU foreign ministers
said the bloc would stick to
its key policy positions but
would work with the new
U.S. administration. A7
Chief of Staff
NORWICH, U.K.There is
one thing Englands professional mole catchers find more
troubling than moles: each
other.
Amid a revival of the ancient anti-mole craft, rival associations are accusing one another of being impostorsand
caring more about money than
about the integrity of their
trade, which involves prodding
the ground to find mole tunnels and then rigging them
with lethal metal traps.
At the center of the conflict
sits Louise Chapman. The 48year-old ex-teacher roams Norfolk in an Audi A3 emblazoned
Lady Mole Catcher on the
side. When she isnt out trapping moles, she does after-dinner mole talks, TV appearances
andas head of the British
Mole Catchers Register, a trade
grouptrains aspiring mole
fighters. She has turned her
operation into a franchise.
Shes an embarrassment to
proper professional mole
catchers, says Ann Chippendale, who claims she, in fact,
was the first female traditional
Please see MOLES page A10
STARTING TODAY
The Wall Street Journal daily print edition is organized into two core
sections. The first section includes U.S. and World news, Sports and
Opinion, as well as new Life & Arts pages featuring the best of the
Journals lifestyle and arts journalism. The second section, Business
& Finance, highlights in-depth coverage of business and finance,
including technology, markets and Heard on the Street.
Please turn to page A2 to read more about the changes in a letter
from the editor in chief, Gerard Baker.
AUCTION WEEK:
5 PAINTINGS
TO WATCH
MEDIA EMPIRE
HEIRS TAKE
BIGGER ROLE
LIFE & ARTS, A11, A12
BUSINESS & FINANCE, B1
www.ebook3000.com
Weakens as
Iraqis Push
Into Mosul
BY YAROSLAV TROFIMOV
AND ALI A. NABHAN
MOSUL, IraqIraqi troops
pushed deeper into the countrys second largest city on
Sunday, securing densely populated areas as commanders
said Islamic State resistance
began to buckle.
The first neighborhoods
were the hardest because
Daesh desperately fought to
retain them. Now, as we go
forward, I expect the battle to
get easier, said Brig. Gen.
Maan al Saadi, the commander
of the 2nd Group of Iraqi Special Operations Forces, which
are spearheading the Mosul offensive. Daesh is the Arabic acronym for the terrorist group.
The enemy is collapsing
and losing control, and we are
now taking only two days to
seize a neighborhood where
we planned to be fighting for
four days, he said.
In the Arpachiya neighborhood, secured on Saturday,
Abed Abu Ahmed marked the
first morning free of Islamic
State with a shave. The 63year-old engineer stood outside
his home Sunday, small cuts on
his chin the only reminder of
the beards Islamic State mandated for all adult males.
We have been counting
minutes until the troops arrived here, he said. I dont
care if we lose our cars, if we
lose our homes, as long as
Daesh is gone from here.
Islamic State has been putting up a fierce fight. Since the
campaign began on Oct. 17, the
Please see MOSUL page A8
ANDREW HARRER/BLOOMBERG NEWS (PRIEBUS); SHAWN THEW/EUROPEAN PRESSPHOTO AGENCY (TRUMP); CHIP SOMODEVILLA/GETTY IMAGES (BANNON)
Insider Priebus is
appointed chief of
staff; outsider Bannon
named top strategist
Business & Finance
s Copyright 2016 Dow Jones &

Company. All Rights Reserved
STOXX 600 337.50 2.65%
HHHH $3.00
Trump Names White House Brass
Whats
News
CONTENTS
Banking & Finance... B7
Business News.... B2-3
Crossword............... A13
Heard on Street.. B12
Life & Arts....... A11-13
Markets Digest..... B8
NASDAQ 5237.11 3.8%
WSJ.com
A2 | Monday, November 14, 2016
NY
* *
U.S. NEWS
To Our Readers:
For more than 125

years, The Wall Street
Journal has represented
the best in business
journalism. Every single
day we strive to lead
the conversation and bring you, our readers, the clarity and insight you need. But
we do not achieve journalistic excellence,
nor can we maintain it, by standing still.
The Journal is always evolving.
Today, even as we continue in our efforts to set the standard in business
news, we confront changes in our own industry. Our readers are changing, too.
With information moving at an everfaster pace, many of you are pressed for
time, and your reading habits reflect this.
The reformatted newspaper youre
holding today addresses these realities. At
the same time, it preserves and builds on
our heritage, delivering the most essential
RISE
Continued from Page One
above 2% since before the recession in 2007-09.
While the forecasts are up
in all periods, the effect
would be stronger in 2018,
when new policies would
have had more time to take
effect. GDP forecasts were 0.25
THE
OUTLOOK p e r c e n t a g e
point higher in
2018 than in
forecasts before the election,
inflation forecasts were up
0.15 percentage point and the
yield on the 10-year Treasury
is expected to be 0.31 percentage point higher at the
end of 2018.
The forecasts were collected from 57 academic,
business and financial economists from Wednesday to Friday.
Mr. Trumps administration is only beginning to take
shape, and many economists
cautioned their estimates are
tentative.
Anyone who tells you they
absolutely know what will
happen under a Trump presidency is probably lying, said
Megan Greene, chief economist at Manulife Asset Management.
The priorities of the incoming administration and
congressional Republicans are
being hashed out. Ms. Greene
notes the policies Mr. Trump
could enact the most quickly,
such as restricting trade or
immigration, could do swift
harm to the economy. The
source of the current optimism is tax cuts and infrastructure plans, but these
would take longer to implement because they would
need to go through Congress.
Mr. Trump and GOP congressional leaders share goals
of cutting taxes and reducing
regulations. Most economists
believe tax cuts, especially if
not accompanied by spending
reductions, would produce a
and authoritative reporting, analysis and

commentary in one daily package.
The new format concentrates our paper into two core sections. Starting today, Section A will include U.S. and
World News, features and Opinion columns. Its your indispensable daily read.
Appearing in this section every day, Life
& Arts brings together the content previously found in Personal Journal and
Arena. That means you can enjoy our
eclectic and engaging arts, workplace,
lifestyle and sports coverage, plus our
columnists and popular crossword puzzle
all week. Greater New York will also appear in Section A, Monday to Friday.
The Business & Finance section
strengthens our core coverage. You can
expect the same amount of data and the
same breadth and depth of reporting and
analysis. Technology continues to be a key
area of coverage, found within Business &
Finance. You will also see, within the section, more clearly defined columns for
companies, equities, bonds, commodities,
currencies and financial institutions and
other categories of business news. Our
popular markets analysis now appears on
the back page, with our celebrated Heard
on the Street column. You can also find
markets data and round-the-clock analysis
at WSJ.com and through our apps.
As before, Journal Reports will appear
on select Mondays and Mansion on Fridays,
so the paper will comprise three sections
on those days. The Weekend edition will
remain a leisurely read, with multiple sections, including Review, Off Duty and WSJ.
Magazine, joining Section A and Business &
Finance.
Over the years, we have adjusted the
format of the paper many times in response to the challenges and opportunities presented by an evolving world. As
we saw last week in the historic U.S.

election, the world is indeed changing.
What never changes, however, is our
commitment to bringing you the most
compelling, intelligent and authoritative
journalism.
Please do share your thoughts at
readerfeedback@wsj.com, and thank you
for your continued loyalty to The Wall
Street Journal.
Sincerely,
Gerard Baker
Editor in Chief, The Wall Street Journal
Shifting Gears
The election of Donald Trump has caused economists to reassess their economic forecasts.
Real growth, ination and bond yields are now expected to rise faster in coming years.
Annual change in real GDP
Annual change in ination
10-year bond yield
3.5%
3.5%
3.5%
Forecast
3.0
Forecast
3.0
2.5
2.5
2.5
2.0
2.0
2.0
1.5
1.5
1.5
1.0
1.0
1.0
0.5
0.5
0.5
0
2012 13 14 15 16 17 18
Forecast
3.0
2012 13 14 15 16 17 18
2012 13 14 15 16 17 18
Postelection forecast change from previous month

0.02%
2016
0.04
2017
0.25
2018
0.1% 0 0.1 0.2 0.3
0.05%
2016
0.03
2017
0.15
2018
0.1% 0
0.1 0.2 0.3
Sources: St. Louis Federal Reserve (historical data); WSJ economist survey
conducted Nov. 9-11 (forecasts)
short-term boost to economic

growth. His proposals to increase infrastructure spending, if successful, could lead
to a large boost in construction employment, with spillover effects for other industries.
The economic impacts of
eliminating or significantly
altering the Affordable Care
Act depend crucially on what
the nations health-care system looks like afterward.
It is unclear how much
congressional Republicans
support Mr. Trumps proposals to curtail immigration, restrict trade or significantly
boost spending on infrastructure. And many of the factors
that have restrained growth,
including the continuing retirement of the baby-boomer
generation and low U.S. productivity growth, could still
act as a restraint on the U.S.
economy in coming years.
A return to the 4% a year
economic growth rates that
were often notched in the
1980s and 1990s is seen by
economists as unlikely.
The survey doesnt collect

forecasts for 2019 and beyond. Many policies, from education to the environment to
regulation to law-enforcement can ultimately be significant for the economy, but
may not significantly change
macroeconomic
variables
within the next two years.
In recent years, an assumption of ongoing congressional gridlock underpinned
most economic forecasts. Republican leaders in Congress
fought most of Democratic
President Barack Obamas initiatives, particularly those
that would increase the deficit.
Budget battles frequently
lasted until the 11th hour,
stoking fears that U.S. Treasury bonds could go unpaid.
In 2013, the battles shut
down the government for
more than two weeks.
Now that Republicans are
in control, theres no concern
about debt and deficits, said
Steven Blitz, chief economist
at Pangea Market Advisory.
Earlier this year, Mr. Blitz
2016
2017
2018
0.1% 0
0.23
0.19
0.1
0.2
0.31
0.3
feared the economy could

easily tip into recession but
said a combination of tax cuts
and rising spending would reduce that risk.
Over the past year, forecasters consistently fretted
that a severe slowdown in international growth was the
biggest risk to the U.S. Not
anymore. In the postelection
survey, 65% of economists
said the factors likeliest to
knock the economy off course
were potential White House
CORRECTIONS
AMPLIFICATIONS
SkyBridge Capital, a firm
that invests in hedge funds,
was incorrectly called a hedgefund firm in a Global Finance
article Thursday about the Labor Departments so-called fiduciary rule.
missteps.
The potential for a trade
war was cited as the biggest
risk to the economy by 43%
of economists. A move by the
U.S. to impose tariffs on foreign nations could lead to a
spiral of rising trade barriers,
higher import prices, and
shrinking markets for U.S. exporters. Other economists remain worried about the potential
for
business
investment to deteriorate further, after it earlier slumped
in part over uncertainty
about postelection policies.
Everyone will lose if there
is a global trade war, said
Jim OSullivan, chief U.S.
economist at High Frequency
Economics.
Uncertainty on major policy issues limits hiring and
investment decisions, said
Robert Dietz, chief economist
at the National Association of
Home Builders.
Overall, respondents to the
Journals survey see about a 1
in 5 chance of a recession in
the next 12 months. Those
odds have declined slightly
over the past three months,
but are up from 14% a year
ago.
It is still early days. A hallmark of Mr. Trumps campaign was confounding predictions, both good and bad.
There is no forecast model
that can prepare us for this,
said Bernard Baumohl, chief
global economist at the Economic Outlook Group.
TUESDAY: Statistics agencies

across Europe are expected to
announce another quarter of
weak growth. The German statistics agencys first estimate of
gross domestic product during
the three months ending in September is expected to show a
slight slowdown in the quarterto-quarter growth rateto 0.3%
from 0.4%. The European Union
statistics agencys second estimate of third-quarter economic
growth in the eurozone is expected to be unchanged at 0.3%.
If the U.S. economy is to end
the year on a strong note, it will
need support from consumers.
The Commerce Department will
release October retail-sales data,
allowing forecasters to firm up
their early fourth-quarter GDP
predictions. Economists predict
overall retail sales rose 0.5%
from the prior month and 0.4%
when auto sales are excluded.
WEDNESDAY: Bank of Canada Deputy Gov. Timothy Lane
speaks in Waterloo, Ontario, and
market watchers will look for
any hints on the central banks
view of the U.S. election results.
The U.S. is Canadas biggest
trading partner and the destination for roughly three-quarters of
Canadian exports.
THURSDAY: The U.S. Federal
Reserve has been laying the
groundwork for a mid-December
rate increase followed by a gradual path of rate increases in the
coming years. Might Mr. Trumps
surprise victory upend those
plans? Fed Chairwoman Janet
Yellen could offer clarity when
she makes her first post-election
remarks during testimony before
the Congressional Joint Economic
Committee.
The European Central Bank
will publish minutes of its October policy meeting, shedding
light on discussions within the
ECBs governing council as it prepares to decide whether to extend its 1.7 trillion stimulus.
President Mario Draghi said last
month that policy makers hadnt
discussed the future of their
bond-purchase program, due to
end in March. Still, the minutes
could show how concerned council members are about the eurozones weak growth and ultralow
inflation rate, as well as the political uncertainty outside the
bloc, including in the U.S.
THE WALL STREET JOURNAL (USPS 664-880)

(Eastern Edition ISSN 0099-9660) (Central Edition ISSN 1092-0935)
(Western Edition ISSN 0193-2241)
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Monday, November 14, 2016 | A3

T&CO. 2016
U.S. NEWS
ForeignStudents HitRecord
College enrollment
Study Hall
from abroad passes
International enrollment in U.S. colleges has been steadily rising
one million, but some the last 10 years, especially among Chinese and Indian students.
Places of origin of international
see bumpy road ahead Number of international
students in the U.S.
students in the U.S.*
BY DOUGLAS BELKIN
AND TE-PING CHEN
1.2 million
The number of international

students enrolled in U.S. colleges and universities exceeded one million for the first
time during 2015-16 academic
year, a 7% increase from the
previous year and nearly double the level of 10 years ago.
But some U.S. schools are
concerned about their ability
to continue to dominate the
global marketplace. They cite
the election of Donald Trump,
who ran on a platform of tightening U.S. borders, combined
with Chinas growing effort to
attract international students,
flat U.S. government education
spending and a spate of racist
attacks on college campuses
since the election.
I think there will be a
short-term chilling effect on
international students coming
here not unlike there was after
9/11, said Jason Lane, chairman of the Department of Education Policy and Leadership
at the University at AlbanySUNY. International students
will be concerned about what
the political environment
means for them.
China continues to send the
China Also Seeks

Foreign Enrollment
Chinas efforts since the
1990s to turn about 100
schools into world-class universities are starting to help the
nation emerge as a player in the
global competition for students
long dominated by the U.S.
While Chinese universities
overall continue to lag behind
their Western counterparts,
they have risen in rankings. This
year, two of Chinas top schools,
1.04 million
s 7.1% from
previous year
38.3%
Other
31.5
China
1.0
0.8
2015-2016
0.6
0.4
0.2
0
2006 07 08 09 10 11 12 13 14 15 16
*Academic years ending in years shown
Source: Institute of International Education
2.6
Canada
15.9
India
5.8
South
Korea
5.9
Saudi
Arabia
largest number of students to

the U.S. at 328,547, up 8.1%
over the 2014-15 academic
year, while India is second, at
165,918, up 25% from the prior
year, according to the Institute
of International Education,
which released its Open
Doors report on Monday.
The U.S. is by far the largest
destination for international
students, but investment in
higher education by China is
reshaping the global marketplace. A decade ago, China attracted very few students from
abroad; last year there were
397,635, according to the Chinese government. That is up
36% from 2011.
In 2015, 60% of students

studying in China came from
other Asian nations. South Koreans alone sent 66,672 last
year. The number of South Koreans studying in the U.S. declined last year by 4% to
61,007.
By 2020, China is projected
to attract more international
students than the U.K., which
is second to the U.S. in the
field, according to several analysts. The U.K.s decision to
leave the European Union
could hurt its prospects of attracting foreign students, they
said.
Last year in the U.S., international students spent about
Tsinghua University and Peking

University, jumped eight and 11
places, respectively, in the Times
Higher Educations World Reputation Rankings. They are now
at 18th and 21st place.
Chinese universities dont
have the same need as those in
the U.S. for an influx of foreignstudent cash, said Cheng Fangping, an education professor at
Beijings Renmin University. Instead, China is seeking to expand so-called soft power.
China has long hoped to
have a better mutual understanding with the worlds young
people, he said. Now that

Chinas economy is more developed, theres more of an emphasis on this.
But obstacles remain, said
Mr. Cheng, including a lack of
schools that have curriculum that can effectively cater to
students who dont speak Chinese. Students from developed
countries basically come to
China to study culture and language. Students from less-developed countries come here to
learn other things, like medicine
or science, he said.
Te-Ping Chen
$30.5 billion, according to the

IIE. U.S. colleges and universities have become increasingly
dependent on that revenue.
A demographic dip in U.S.
college-aged students comes
as state funding for public universities remains well below
levels from before the 2007-09
recession. Public schools often
charge international students
two to three times what domestic students pay.
The election of Mr. Trump,
who campaigned on a nativist
platform, combined with reports of racist incidents at several colleges and universities has sent concern across
schools that depend on international students. The Trump
transition team didnt respond
to a request for comment.
At San Diego State University last week, a Muslim student wearing a hijab was attacked in a parking lot because
of her faith and attire, the
school said. We condemn this
hateful act and urge all members of our community to join
us in condemning such hateful
acts, SDSU President Elliot
Hirshman said in a statement.
At the University of Pennsylvania, Mr. Trumps alma
mater, the mayor of Philadelphia denounced a series of racist texts allegedly sent to black
students. And at Elon University in North Carolina, the
school president condemned a
message written on a whiteboard that said, Bye Bye Latinos Hasta La Vista.
The uncertainty accompanying Mr. Trumps election
comes as the market for students grows more competitive.
Canada recently liberalized immigration rules for international students to encourage
them to stay. China is offering
significant scholarships to entice students to study there as
it spends billions of dollars to
improve its schools.
Allan Goodman, president
of the IIE, believes the lack of
school capacity in China and
India combined with concern
about the quality of degrees
given in those countries will
keep the U.S. well-fitted with
international students.
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Deradicalization Efforts Face a Test

BY NICOLE HONG
The fact that the judge

would consider deradicalization as part of a sentence is
absolutely new in the U.S.,
said Daniel Koehler, the expert
hired by Judge Davis. Dr.
Koehler, who started his career counseling neo-Nazi extremists in Germany, runs a
nonprofit there that helps implement deradicalization programs.
Since early 2014, more than
100 Americans have been arrested on charges related to
Islamic State. These defendants are mostly U.S. citizens
in their early 20s and often

convicted of crimes that carry
a maximum of decades in
prison, meaning they will be
released back to society as
middle-aged adults.
Given their youth, many Islamic State sympathizers still
have time for rehabilitation,
defense lawyers say, but federal prisons lack counseling
geared specifically at terrorism disengagement.
Moreover, there are few deradicalization experts or nonprofits in the U.S., spurring efforts like Judge Daviss.
D.YURMAN 2016
The future of deradicalization programs in the U.S. is

at a pivotal juncture this week,
when a federal judge in Minnesota will decide the sentence for nine convicted Islamic State sympathizers.
U.S. District Judge Michael
Davis, a senior federal judge in
Minneapolis, took an unprecedented step before the sentencings. He asked a deradicalization expert from Germany
to interview six of the nine defendants, all Somali-Americans
in their 20s, and determine

whether they would be candidates for a reduced sentence.
If Judge Davis decides to
send any of the defendants
into a deradicalization program instead of prison, it
could set the model for other
federal officials grappling with
how the legal system should
treat young people with a desire to join Islamic State. It
also would raise uncertainties
about the logistics of such a
program, including who would
fund it or be responsible for
any failures.
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THE TRUMP TRANSITION
Majority in GOP likely

to renominate the
lawmaker as Trump
win lessens tensions
BY KRISTINA PETERSON
AND SIOBHAN HUGHES
WASHINGTONJust a week
ago, House Speaker Paul
Ryans standing looked a little
dicey. But Donald Trumps unexpected presidential victory
has bolstered the Wisconsin
Republicans job security, despite tensions between the two
during the campaign.
House Republicans are expected to choose Mr. Ryan as
their nominee to be speaker
this week when lawmakers return to Washington for the
first time since late September. Other congressional leaders are also likely to keep their
posts, though a group of Democrats are asking House Minority Leader Nancy Pelosi (D.,
Calif.) to delay their leadership
elections. In the Senate,
Charles Schumer (D., N.Y.) is
expected to replace retiring
Minority Leader Harry Reid
(D., Nev.).
Grumblings over Mr. Ryans
tangles with Mr. Trump over

the past few months have receded since the New York businessman became the president-elect in an election that
also kept both chambers of
Congress under GOP control.
Although some of the most vocal Republicans are still likely
to oppose Mr. Ryan for the top
job, he is expected to coast to
victory in Tuesdays GOP vote,
according to a wide range of
lawmakers, including some
newly elected.
The outcome is the same,
but the drama is dramatically
lessened, said Rep. Patrick
McHenry of North Carolina,
House Republicans chief deputy whip.
Mr. Ryan will face a vote of
the full House in early January,
where he will need a majority
of those voting for an individual to win re-election. In this
weeks balloting, he would
need a majority of only reelected and new Republicans.
Had the Republican presidential nominee lost, ire aimed
at Mr. Ryan could have fueled
rebellion among Trump supporters in the House. Mr. Ryan
said he would no longer defend Mr. Trump in early October after a 2005 video sur-
ZACH GIBSON/GETTY IMAGES
Ryan Is Set to Keep His Speakership
Speaker Paul Ryan of Wisconsin is likely to win the backing of House Republicans this week.
faced in which the New Yorker
talked in crude sexual terms
about grabbing women without their consent. Mr. Trump,
in turn, called Mr. Ryan very
weak and ineffective.
But Mr. Trumps win leaves
Mr. Ryan positioned to help
Mr. Trump implement the

House GOP policy agenda. Last
week, the speaker gave the
president-elect a tour of the
Capitol.
The Democrats are the
ones in turmoil, Mr. Ryan said
last week on Fox News. The
Republicans are the ones who

are unified.
Mrs. Pelosi is expected to
run again for the top House
Democratic post in leadership
elections set for Thursday.
Some Democrats are asking
her to delay their internal
STAFF
FIVE THINGS
On the Role of White

House Chief of Staff
In a modern White House, the
job of chief of staff has emerged
as one of the most powerful
positions in all of government.
1. Supervises White House Staff
The chief of staff is responsible
for managing the entire Executive Office of the President, an
organization that includes everything from the residence
staff that attends to the first
family to the national security
adviser, to the White House
communications operation.
The presidents senior advis-
Outsider
BannonSet
ToReshape
Position
BY DAMIAN PALETTA
EDUARDO MUNOZ/REUTERS

lished by his own team.
President Barack Obama, for
example, named his chief of
staff two days after winning the
2008 campaign. Inside the
Trump transition team, a
broader group of officials known
as the landing team was supposed to have been announced
on Friday and start inspecting
agencies for potential changes
this coming week. That was delayed after Mr. Trump shuffled
the transition teams leadership.
Another contributing factor:
Mr. Trumps victory surprised
even his own top advisers, who,
before Tuesday, were unable to
focus the New York businessman on the 73 days between
the election and inauguration, a
senior aide said. They said Mr.
Trump didnt want to jinx himself by planning the transition
before he had actually won.
During their private White
House meeting on Thursday,
Mr. Obama walked his successor through the duties of running the country, and Mr.
Trump seemed surprised by the
scope, said people familiar with
the meeting. Trump aides were
described by those people as
unaware that the entire presidential staff working in the
West Wing had to be replaced
at the end of Mr. Obamas term.
Jason Miller, communications
director for the Trump transition, declined to comment on
those characterizations of the
White House visit. He said in a
statement that, President-elect
Trumps excellent judgment and
temperament has served him
well in business and in life, and
hes not going to be swayed by a
bunch of political insiders responsible for filling up the
swamp in the first place.
There are signs that Mr.
Trump has tempered several of
his top campaign promises. He
vowed during the campaign to
build a wall along the U.S.-Mexico border, but he said in a 60
Minutes interview broadcast
Sunday that a fence could be
sufficient in some parts.
He also told CBS that he is
rethinking his call to have a
prosecutor investigate Hillary
Clinton, saying of the Clintons
that I dont want to hurt them
and theyre good people.
Still, he said in the interview
that he would aim to jail or deport between two million and
three million illegal immigrants
vote, according to a House

Democratic aide. Also, House
Democrats on Monday evening
will participate in a conference
call in which Hillary Clinton is
to speak, the aide said, a move
that is seen as helping Mrs.
Pelosi bolster her position
ahead of the leadership elections.
Congress is scheduled to be
in session for two weeks this
month and two weeks in December, with only a few legislative tasks remaining before
the next crop of lawmakers are
sworn in. Their most pressing
deadline will be to keep the
government running after current funding expires Dec. 9.
The House this week is also
expected to pass two foreignpolicy bills with broad, bipartisan support.
One measure would reauthorize for a decade sanctions
on Iran set to expire at years
end. House lawmakers also are
expected to pass legislation
that would establish new sanctions against supporters of
Syrian President Bashar alAssads regime. The White
House is expected to oppose
both sanctions bills.
Carol E. Lee
contributed to this article.
President-elect Donald Trumps campaign manager, Kellyanne Conway, right, at Trump Tower in New York on Sunday.
PROFILE
Reince Priebus
Born: March 18, 1972
Education: University of Wisconsin-Whitewater, B.A.; University of Miami, J.D.
Political career: Ran for Wisconsin state Senate and lost,
2004; chairman, Wisconsin Republican Party, 2007-11; chairman, Republican National Committee, 2011 to present;
oversaw the post-2012 autopsy
of Republican Party weak-
nesses and a build-up of the

partys organization across the
country; asserted greater party
control over the scheduling and
oversight of the 2016 presidential debates.
PROFILE
Trump ties: Relationship developed during the campaign, providing a bridge to the GOP establishment; traveled to New
York in Sept. 2015 to urge Mr.
Trump not to run as an independent candidate and to sign
a pledge to support whoever
was nominated; opened doors
to GOP donors; gave Mr. Trump
access to party get-out-thevote machinery.
Education: Virginia Tech, B.A.;

Georgetown University, M.A.;
Harvard Business School, M.B.A
Stephen Bannon
Born: November 27, 1953
Career highlights: Naval officer; investment banker with

Goldman Sachs; co-founder of
the Government Accountability
Institute, a conservative nonprofit investigative research
group; was chairman of Breitbart.com, a conservative web-
whom he described as criminals,

gang members and drug dealers. He didnt specify how he
would do this. The Obama administration already has made
deporting illegal immigrants
with criminal records a priority.
The selection of Mr. Priebus
will, by definition, help organize the transition. This decision allows Mr. Trump and his
team to focus on identifying 15
cabinet positions and more
than 1,000 top posts that must
be confirmed by the Senate.
A trained attorney, Mr. Priebus first interacted with the

Trump inner circle in September
2015 when he persuaded the political neophyte to sign a pledge
to support the GOP nominee,
even if he lost the primary. He
was among a small group inside
a glass-encased Trump Tower
conference room with Mr.
Trump when they were informed the Washington Post
was preparing to publish an 11year-old video in which the
nominee made lewd comments
about forcing himself on women.

As the rest of Mr. Trumps
team strategized the response,
Mr. Priebus was largely sidelined
by an avalanche of calls and
emails from top Republicans
urging him to pull the partys
funding from the campaign.
While Mr. Priebuss elevation
is a nod to the Washington establishment, Mr. Bannon brings
a more disruptive political
force into the White House. The
former Goldman Sachs banker
became chairman of the Trump
erstraditionally including the

White House communications
director, political director, and
other senior counselors who
usually hold the rank of assistant or special assistant to the
presidentall report to the chief
of staff. They usually form the
inner circle of political and strategic decision-making in a
White House, with the chief of
staff in charge.
3. Executes the Vision

Once the president decides on a
course of action, its up to the
chief of staff to ensure those
instructions are carried out by
the White House staff and others within a sprawling administration that includes 15 cabinet
departments and a number of
independent agencies.
ensuring that only critical decisions get made by the president

is a way of keeping him or her
focused on key priorities rather
than getting bogged down in
the muddle of details.
2. Sets the Strategy

The chief of staff often plays a
critical role in setting White
Houses strategy on everything
from the legislative agenda that
a president wishes to pursue to
its public-facing communications
operation, as well as the administrations foreign-policy priorities.
4. Controls Presidential Access

Being gatekeeper to the president can mean everything from
deciding which decisions need
to be personally made by the
president, which can be delegated to subordinates and controlling who gets meetings with
and access to the president.
Because the size of the executive branch has grown so large,
site that is identified with the

alt right that has been critical
of Republican establishment
leaders, including House
Speaker Paul Ryan.
5. Acts as All-Purpose Adviser

The chief of staff ultimately is
an all-purpose adviser on everything from politics to policy,
guiding and counseling a president on some of the toughest
decisions, helping to navigate
major domestic and international crises and acting as both
a sounding board and counselor
in good times and bad. The
chief of staff also regularly
fields calls from lawmakers and
congressional leadership.
Byron Tau
Trump ties: Has known Mr.

Trump for years, turned Breitbart into a strongly pro-Trump
media voice during the GOP
primaries, and informally advised the Trump campaign
even before becoming a formal
adviser; was brought on as the
Trump campaigns chief executive in August, part of a major
staff shake-up that ousted Paul
Manafort as campaign chairman.
campaign in late summer, leaving his position atop Breitbart
News. That website has taken
aim at establishment GOP figures and is identified with the
alt right, a movement that
promotes nativism and views
immigration and multiculturalism as threats to white identity.
After he joined the campaign,
Mr. Bannon pushed Mr. Trump
to focus on white working-class
voters and was instrumental in
assembling a surprise news conference just hours before a presidential debate that featured Mr.
Trump and several women who
had accused his rivals husband,
former President Bill Clinton, of
sexual misconduct.
At the news conference, Mr.
Bannon, wearing glasses and
pushing his hands into his jacket
pockets, flashed a mischievous
smile as stunned reporters
who had been told they would
be witnessing debate preparationssurveyed the room.
Bannon is going to be
keeper of the image of Trump
as a fighter against the status
quo, and Reince is going to utilize his personal connections
with the speaker and others, to
make the trains run on time,
said Ken Blackwell, a former
Ohio state official and a member of the transition team.
Damian Paletta contributed
to this article.
WASHINGTONStephen
Bannons role as senior counsel and chief strategist to
President-elect Donald Trump
will give him unfettered access
to the 45th president. His demeanor suggests he will likely
approach the role much differently than his predecessors.
Others who have held similar roles, such as David Axelrod for President Barack
Obama and Karl Rove for President George W. Bush, offered
advice on policy issues but
also served as media surrogates.
Mr. Bannon, however, rarely
speaks in public and is known
to be more comfortable as a
strategist and behind-thescenes political bomb-thrower
than public cheerleader.
The chief strategist is set to
become one of the White
Houses central figures in its
first year as Mr. Trump weighs
crucial decisions about which
pieces of legislation to pursue,
when to negotiate and when to
dig in with Congress. The chief
strategist also could serve as
an important conduit between
the White House and publicinterest groups.
Mr. Bannon joined Mr.
Trumps campaign in August,
and the two only worked
closely together during the
end of the campaign.
Mr. Rove had spent almost
three decades in Republican
politics by the time he helped
Mr. Bush win the White House
in 2000, a much different career arc than Mr. Bannon. But
Mr. Bannons path in many
ways mirrors Mr. Trumps, as
a provocative outsider.
The often undefined nature
of the senior counselor and
chief strategist job can be a
blessing and a curse. The job
will allow Mr. Bannon to weigh
in on virtually any decision
Mr. Trump seeks his advice
on, but could also open him up
to internal jostling if other advisersor family members
try to marginalize his input.
WSJ
CEO COUNCIL
Wall Street Journal editors
will discuss the impact of the
Trump administration with
policy makers and business
leaders at the WSJ CEO
Council annual meeting
Monday and Tuesday in
Washington, D.C. Scheduled to
appear Monday are former
New York Mayor Rudy Giuliani
and Trump campaign manager
Kellyanne Conway, both of
whom are on the presidentelects transition team.
Updates and video from the
conference will appear on
WSJ.com. You can follow
along on Twitter at
#wsjceocouncil
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according to the findings of the Government Accountability Office (GAO). Following the direction of the GAO,
the VA re-awarded contracts in September 2016, but these awards were likewise filled with errors, which
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THE TRUMP TRANSITION
DEMOCRATS
Party Urged to Focus

On Working Class
Democrats, reeling after losing
the 2016 presidential race, spoke
Sunday of sharpening the partys
focus on working-class Americans who turned out for President-elect Donald Trump.
Youve got to have a vision
to strengthen the grass-roots,
Rep. Keith Ellison (D., Minn.), cochairman of the Congressional
Progressive Caucus, said Sunday
on ABC.
The partys left wing is rallying behind Mr. Ellison to become
next chairman of the Democratic
National Committee in the wake
of humbling Election Day losses.
Mr. Ellison has already won the
endorsement of Sen. Bernie
Sanders of Vermont, who lost to
Hillary Clinton during the Democratic presidential primaries, and
Sen. Harry Reid of Nevada.
Critics of the party establishment, including Mr. Ellison, say
the DNC has become too much
of a fundraising machine that
isnt connecting with rank-andfile voters, and that contributed
to the partys failure in the election.
We should make the voters
first. Not the donors first, Mr.
Ellison said.
Jon Hilsenrath
and Yuka Hayashi
BORDER CONTROL
Trump Is Open to
Fence in Some Areas
Donald Trump said parts of
the wall he has pledged to build
on the U.S.-Mexico border could
be fencing.
Asked during an interview
with CBS if he would accept a
fence, as some lawmakers have
suggested, Mr. Trump appeared
to adjust his signature campaign
pledge to build a wall on the border. For certain areas I would,
but certain areas, a wall is more
appropriate, he said. Im very
good at this. Its called construction.
Mr. Trumps comment came
as he and his advisers faced
questions about whether his policy agenda would follow his campaign pledges.
Yuka Hayashi
CONGRESS
Clinton Email Probe

Not GOP Priority
A senior congressional Republican says the partys agenda in
the coming Congress doesnt include further investigations of
Hillary Clinton.
Speaking Sunday on Fox
News, House Majority Leader
Kevin McCarthy said the GOP
will focus on job creation, overhauling and repealing President
Barack Obamas health-care law
and rebuilding Americas roads
and bridges.
Mr. McCarthy said he will
leave any inquiries of Mrs. Clinton to law enforcement.
Associated Press
Trump Aims to Put Stamp on Courts

BY JOE PALAZZOLO
The vacancy on the U.S. Supreme Court may be the most
talked-about empty seat in the
federal judiciary, but dozens
more await Donald Trump and
his White House throughout
the lower courts, including the
all-important federal courts of
appeals.
President Barack Obama
tipped the balance of the appeals courts in favor of Democrats in his two terms, tapping
a group of judges who are
likely to be protective of his
programs and policies.
Whether Mr. Trump can restore a Republican advantage
will depend on how quickly he
can start up the machinery for
selecting and vetting judicial
nominees and how much time
the Senate is willing to yield to
the process.
Republican-appointed judges
held majorities on nine of the
12 regional appeals courts
when Mr. Obama entered office.
He will leave office having created majorities of Democraticappointed judges on eight of
Blue Slip Gives

Democrats a Say
Democrats still have some
levers to pull in the Senate if
they object to a lower-court
nominee. When a president
makes a judicial nomination,
the Senate Judiciary Committee sends a form known as a
blue slip to the senators from
the nominees home state. If
both senators return the slips,
the chairman of the committee
typically moves the nominee
forward. If one or both with-
the 12, according to Sara Schiavoni, a professor at John Carroll University who studies judicial politics and selection.
Mr. Trump, who has promised to appoint judges in the
mold of the late Supreme Court
Justice Antonin Scalia, will enter office with at least 16 vacancies on the federal courts of
appeals, the last stop for the
vast majority of federal cases.
Many more could open during
his administration, as judges
consider whether to take a
form of semiretirement called
senior status.
Forty-eight federal appellate
judges became eligible for senior status during Mr. Obamas
two terms and could step down
from full-time work or resign
at any time, according to Russell Wheeler, a fellow at the
Brookings Institution who studies federal courts.
They dont have to, however.
Judicial appointments are for
life, and at least 25 full-time
appellate judges who plan to be
on the bench for the start of
Mr. Trumps presidency have
been eligible for senior status
holds them, tradition dictates
that the nomination languish.
Sen. Chuck Grassley (R.,
Iowa), chairman of the Senate
Judiciary Committee, will continue to honor the blue-slip
process, said Taylor Foy, a committee spokesman.
Democrats expect the tradition of deferring to home-state
senators on judicial nominees
to continue, and both parties
will use the vetting and hearing
process to ensure that qualified, mainstream, nonpartisan
judges are put on the bench, a
senior Democratic aide said.
Joe Palazzolo
since Mr. Obama entered office.

Researchers have found that
veteran judges are more likely
to step down when the party of
the president who appointed
them regains the executive
branch.
Another 25 appeals-court
judges will become eligible for
semiretirement from 2017 to
mid-2020, Mr. Wheeler said.
The federal trial courts have
81 vacancies, an unusually high
number driven by Republicans
control of the Senate in Mr.
Obamas final two years. A
dozen more trial-court vacancies are expected soon, according to the Administrative Office
of the U.S. Courts.
Democrats change of Senate
rules also could backfire on
them. Until 2013, the minority
party could often use procedure to delay judicial nominees
it opposed, by keeping debate
on the nominees open until the
majority could come up with
60 votes. A Republican blockade of Mr. Obamas nominations in 2013 prompted Democrats to require only a simple
majority of senators, instead of
60, to cut off debate on nominees to the lower courts. The
filibuster can still be used to
oppose Supreme Court nominees.
Republicans will likely have
a 52-48 majority in at least the
first two years of Mr. Trumps
administration.
Fifty-nine judicial nominees
sent to the Senate by Mr.
Obama still await a vote. Any
still pending by the close of the
current Congress in December
would become Mr. Trumps to
fill.
The Supreme Court vacancy
is likely to monopolize judgevetting resources early on in
Mr. Trumps term, possibly
slowing lower-court nomina-
Open Seats
Dozens of federal-court vacancies await Donald Trump and his White
House, including at least 17 on the federal courts of appeals, the last
stop for the vast majority of federal cases.
The regional circuits
1
2
3
7
10
D.C.
Circuit
11
5
Appointed by:
Vacant seat Republican Democrat
First Circuit: Boston
Second:
New York
Third:
Philadelphia
Fourth:
Richmond, Va.
Fifth: New
Orleans*
Sixth: Cincinnati
Seventh: Chicago
Eighth: St. Louis
Ninth: San
Francisco
10th: Denver
11th: Atlanta
Washington, D.C.
Federal Circuit
Note: The Federal Circuit has nationwide jurisdiction to hear appeals in specialized cases.
*Includes one future vacancy Includes two future vacancies
Source: Administrative Ofce of the U.S. Courts
tions, said Ms. Schiavoni. The

White House and Justice Department collaborate on selecting and vetting potential nominees, a process that can take
months for each, and Republican legislative priorities may
take precedent over personnel
issues, Ms. Schiavoni pointed

out.
There is not going to be an
instantaneous impact on the
lower courts, Ms. Schiavoni
said. Its going to be years before they can even make a dent
in the vacancies.
Orange County Goes From Red to Blue

BY ALEJANDRO LAZO
AND JIM CARLTON
As most of the country
turned red Tuesday, Southern
Californias cradle of conservatism went blue. Orange County
voted for Hillary Clinton, the
first time voters there supported
a Democratic presidential candidate since they helped elect
Franklin Delano Roosevelt in
1936.
The historic flip is a powerful signal of Californias new
rebel status. The nations most
populous state, which has been
in virtual lockstep with policies of the Obama White
House, now stands as the
countrys political outlier.
Mrs. Clinton won 62% of the
California vote, according to an
Associated Press tally.
We woke up feeling like
strangers in a foreign land,
said a statement from California Senate President pro Tempore Kevin de Len and Assembly Speaker Anthony
Rendonboth Latinos. They
pledged to preserve the states
liberal policies. We will lead

the resistance to any effort
that would shred our social
fabric or our Constitution.
Kamala Harris, the states
attorney general and its newly
elected Democratic U.S. Senator, promised immigrants she
would protect them by fighting
Republican
President-elect
Donald Trumps proposals to
build a wall on the border with
Mexico and deport the undocumented.
California has adopted some
of the most liberal policies for
undocumented immigrants, allowing them to obtain drivers
licenses and for children and
teens to access state-funded
health care.
Under Democratic Gov.
Jerry Brown, California has
gone further than most states
in implementing the Affordable Care Act. Mr. Trump has
pledged to repeal the law, but
said in an interview with The
Wall Street Journal he would
consider preserving at least
two provisions.
Mr. Brown has positioned
NICK UT/ASSOCIATED PRESS
WASHINGTON
WIRE
Senator-elect Kamala Harris

himself as a climate-change activist; Mr. Trump has called
climate change a hoax and is
likely to undo President Barack
Obamas energy and environmental agenda.
In California, we will do
our part to find common
ground whenever possible,
Mr. Brown said. But as Californians, we will also stay true
to our basic principles. We will
protect the precious rights of
our people and continue to
confront the existential threat
of our timedevastating climate change.

Mr. Brown joked months
ago that wed have to build a
wall around California if Mr.
Trump became president.
Some Californians now see the
state as so politically detached that a previously obscure proposal to place a secession measure on the ballot
began trending on Twitter, under the hashtag #Calexit.
California has effectively
become a one-party state in
recent years, amid a surge in
Latinos and other minorities
who typically vote Democrat,
political observers say.
Since the 2000 presidential
election, Californias voter-registration roles have jumped
24%, or 3.7 millionled by Latinos and Asians, according to
estimates by the San Francisco-based Field Poll.
Mrs. Clinton beat Mr.
Trump in Orange County by 5
percentage points and the
president-elect may have
helped the Democratic cause
there, party leaders said. Fred
U.S. WATCH
Ready for a Closer Look

NORTH DAKOTA
Taxes for Antiflood

Project Are Extended
Residents of Fargo, N.D., and a
nearby county will be pooling their
pennies for another 68 years to
help cover a massive, multibilliondollar channel around the city to
divert floodwaters from the Red
River.
More than 60% of residents of
Fargo and Cass County on Tuesday voted yes on a proposal to extend three half-cent sales taxes to
the year 2084 to pay for the
Fargo-Moorhead area diversion
project.
The $2.2 billion project is meant
to avoid the costly floods of past
years that have inundated the
Fargo area. With state and local
funding in place, construction led
by the Army Corps of Engineers is
expected to break ground this year.
Will Connors
GARY HERSHORN/GETTY IMAGES
PENNSYLVANIA
SHINING MOMENT: A supermoona large, bright full moonrising over Manhattan on Sunday. The moon will be at its brightest
because it is coming closer to Earth than at any time since 1948. NASA says its nearest approach will be at 6:21 a.m. EST on Monday.
Whitaker, chairman of the Orange County Republican Party,

noted his party performed well
in some local races.
Ling Ling Chang, a Republican running for a state Senate
seat partly in Orange County,
lead her Democratic opponent
in a preliminary vote count. If
Ms. Chang wins, it would prevent the Democrats from having a two-thirds majority in
the state Legislature, which
would give them the power to
raise taxes without GOP votes.
Henry Vandermeir, chairman of the Orange County
Democratic Party, said Democratic voter registration has
been increasing steadily in recent years and Republican registration has been falling as
the countys Latino population
has grown. The most recent
registration numbers from the
California secretary of state
show 34% of registered to vote
in Orange County as Democrats, compared with 37.8% for
Republicans. Statewide, 45%
are Democrats; 26% are Republicans.
Six People Injured in

Flash Mob Attack
Six people, including an off-duty
police detective and his wife, were
injured after a "flash mob" attack
by some among a crowd of juveniles in downtown Philadelphia, police said.
Police said a large crowd of juveniles was at 16th and Walnut
streets, a popular spot for dining
and shopping, at about 6 p.m. Saturday when some people began

randomly assaulting people on the
street.
A 55-year-old off-duty police
detective saw a man and a
woman being assaulted and tried
to arrest one of the offenders. He
was punched from behind by several people, police said.
Right afterward, there was another assault nearby, and two 16year-old youths were arrested.
Associated Press
REMEMBRANCES
Rocker Leon Russell

Dies in Nashville
Leon Russell, who performed,
sang and produced some of rock
'n' roll's top records, has died. He
was 74 years old. Mr. Russell's
wife, Jan Bridges, said her husband
died in his sleep on Sunday at
their Nashville home.
Tributes poured in from entertainers who appreciated Mr. Russell's gospel-infused southern boogie piano rock, blues and country
music.
Mr. Russell played keyboard for
the Los Angeles studio team
known as the Wrecking Crew,
helping producer Phil Spector develop his wall-of-sound approach in
the 1960s. He wrote Joe Cocker's
"Delta Lady" and in 1969 put together Mr. Cocker's "Mad Dogs
and Englishmen" tour.
Associated Press
NY
Monday, November 14, 2016 | A6A
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A6B | Monday, November 14, 2016
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WORLD NEWS
EU Struggles With Security Gaps Europe

Digs In,
Will Work
With U.S.
BY MATTHEW DALTON
BY LAURENCE NORMAN
AND JULIAN E. BARNES
PARISShortly after the

terror attacks here a year ago,
European leaders pledged to
close a legal loophole that militants could exploit to
pass through border crossings
without security checks.
A year later, negotiators in
Brussels are still quarreling
over how to change the problematic law, which forbids border guards from conducting
systematic security checks on
European citizens.
France and some other governments, fearing the return
of European-born jihadists
from Syria, have grown increasingly exasperated.
We have been quite irritated at the pace, said one
European diplomat involved in
the talks.
Faced with repeated attacks
by Islamic State and its sympathizers, the European Union
is struggling to find decisive
fixes for its myriad security
vulnerabilities. Efforts have
been hamstrung by the blocs
complex decision-making procedures, privacy concerns and
a cumbersome counterterrorism apparatus that relies on
coordination among the regions 28 governments.
The result is that some
glaring weaknesses have gone
unaddressed, including porous
border controls and the blocs
rudimentary databases, particularly compared with those
created by the U.S. government. U.S. officials have been
especially worried about the
regions vulnerabilities since
the Paris attacks, because
most Europeans can travel to
the U.S. without a visa.
EU officials say the attacks
have spurred normally turfconscious law-enforcement
and counterterrorism officials
PHILIPPE WOJAZER, PRESS POOL
A year after the Paris

attacks, turf battles
and privacy concerns
make fixes elusive
French President Franois Hollande laid a wreath at the site of one of the terror attacks that claimed 130 lives in Paris a year ago.
from national governments to
cooperate much more closely
than before through institutions such as Europol.
Governments have also deployed an EU border force and
security experts to Greece to
screen most of the refugees
arriving in the country.
When I look back, maybe a
year and a half ago, I would
not have said that we would
have done all this, said Gilles
de Kerchove, the EUs counterterrorism coordinator.
Still, acute problems arise
from the fact that among Europes handful of centralized
databases none are capable of
matching fingerprints, DNA
and other so-called biometric
data for law-enforcement or
counterterrorism purposes.
The regions most important police database, the
Schengen Information Sys-
France Remembers
PARISFrance marked the

first anniversary of the terror
attacks that claimed the lives
of 130 people a year ago, as
President Franois Hollande
joined survivors and families of
the dead at all six of the places

hit by Islamic State.
Thousands of people gathered across the French capital
on Sunday to hear the reading
of the names of those who
were killed when a group of terrorists hit the city on Nov. 13
last year.
The suffering is palpable
today, said Caroline Langlade,
who survived the attack on the
Bataclan concert hall.
Mr. Hollande and Paris
Mayor Anne Hidalgo laid
wreaths and unveiled plaques

at each of the locations, where
a minutes silence was observed
under an overcast sky.
Over the weekend, events
across France marked the anniversary of the attacks.
On Saturday, a Sting concert
at the Bataclan honored the 90
who died in the attack there.
A minutes silence was also
observed at the soccer match
between France and Sweden at
Frances national stadium.
Nick Kostov
tem, cant be used to match

fingerprints without knowing
a suspects real name. That
can allow extremists who are
known to authorities in one
European country to slip
through the fingers of police
elsewhere in Europe by using
a fake identity. There is no

serious way to stop a person
in France or elsewhere and see
what his background is instantaneously like you can in the
United States, said Pierre Lellouche, a legislator who served
on a French parliamen-
tary
team
reviewing the Paris attacks.
European authorities are
rushing to give the Schengen
database the capability to
match fingerprints, a project
they hope to test next year
and have operational in 2018.
Events across the capital

Sunday commemorated the
lives of the 130 people who
died in the attacks that ripped
through Paris last November.
www.ebook3000.com
BRUSSELSForeign ministers from the European Union

said the bloc would stand by its
key foreign-policy positions on
issues including the Iranian nuclear deal, Russias annexation
of Crimea and climate change,
but vowed to work with the
new U.S. administration.
Meeting to discuss the fallout from Donald Trumps victory in the presidential election, the blocs foreign
ministers said they would seek
to reinforce Europes voice on
security issues and other key
policies.
But they said they would
work speedily to deepen contacts with the Trump transition team and seek out Mr.
Trumps foreign-policy ideas
and plans.
EU foreign-policy chief Federica Mogherini said the U.S.
is, for Europe, a key, indispensable partner. However,
she told reporters late Sunday
that its not up to us but its
going to be up to the next U.S.
administration to define their
own positions. We have clear
in mind what our positions are
both in terms of EU interests
and in terms of EU principles.
The EU worked closely with
the Obama administration and
most in Europe had expected
an election win by Mr.
Obamas former secretary of
state, Hillary Clinton.
Mr. Trump during the campaign suggested the U.S. might
not unconditionally defend all
North Atlantic Treaty Organization members, a position that
would upend European security.
He has also criticized the Iran
nuclear deal and the Paris climate pact and suggested he is
seeking warmer ties with Russian President Vladimir Putin.
* *
WORLD NEWS
Trumpism Takes
Other Hue in EU
YURI GRIPAS/AGENCE FRANCE-PRESSE/GETTY IMAGES
EUROPE FILE
SIMON NIXON
President Obama, shown with adviser Valerie Jarrett at the White House on Friday, heads to Greece, Germany and Peru this week.
Obamas Last World Tour

After Trumps upset
win, future of U.S. role
abroad is expected to
dominate agenda
BY CAROL E. LEE
AND MARCUS WALKER
ATHENSPresident Barack
Obama begins his final world
tour while in office under a
cloud of uncertainty about the
future of Americas role on the
international stage after Donald Trumps election, an outcome he had repeatedly told
nervous
foreign
leaders
wouldnt happen.
It isnt the curtain call Mr.
Obama expected after eight
years of crisscrossing the
globe to try to shape a new
era of American foreign policy.
When he entered the White
House in 2009 amid two wars
and a global economic crisis,
Mr. Obamas chief goal was to
reassure U.S. allies that his administration would break from
the unilateral military action
of his predecessor, George W.
Bush, and focus on building international coalitions.
Now, as he prepares to
leave the White House, he
faces the task of reassuring allies anxious over whether his
successor will adhere to tenets
of American foreign policy
that have defined Democratic
U.K. Prime Minister

To Promote Trade
LONDONBritish Prime Minister Theresa May plans to use
a Monday speech to position
the U.K. as a pioneer in responding to the backlash against international trade, drawing a distinction between her view on
free trade and that of U.S. President-elect Donald Trump.
Less than a week after Mr.
Trump was elected on the back
of attacks against political insiders and with pledges to renegotiate free-trade deals that
he blames for economic ills,
Mrs. May plans to emphasize

the U.K.s opportunity to be a
leader for other countries as it
exits the European Union. According to excerpts of the
speech from her office, she will
urge the U.K. to be a champion
of free trade while supporting
families and communities that
can lose out to it.
The planned speech underscores the differences between
her and Mr. Trump on trade.
In both Britains EU referendum in June and the U.S. election,
voters in the U.K. and the U.S. appeared to reject free trade and
open markets, in a sign they believe global economic integration
has gone too far. Jenny Gross
and Republican U.S. administrations for decades.

We certainly expect that
the election will be the primary topic on peoples minds
everywhere we go, said Ben
Rhodes, a deputy national security adviser.
Mr. Obama arrives on Tuesday in Greece and then spends
two days in Germany. He plans
to use both stops to stress the
importance of a unified Europe. His weeklong trip ends
in Peru at a summit of the
Asia-Pacific Economic Cooperation countries, or APEC.
At each stop he will face
world leaders who, for various
reasons, are uneasy about a

Trump administration, from
German Chancellor Angela
Merkel to Chinese President Xi
Jinping.
Mr. Trump has suggested
that U.S. allies in Asia and the
Middle East should acquire
nuclear weapons to protect
themselves. He opposes the
deal with Iran to restrain its
nuclear program, a new international climate change agreement and a U.S. trade pact
with 11 Asian countriesall of
which have buy-in from U.S.
allies. He has also questioned
the usefulness of the North Atlantic Treaty Organization and
praised Russian President

Vladimir Putin as a strong
leader.
The final foreign trip of Mr.
Obamas presidency was tailored in part to reflect his
deep concerns about the future of Europe, which has
been roiled by populist political movements, the worst refugee crisis since World War II
and a newly aggressive Russia.
Underscoring the critical
role he believes Germany now
plays in generating stability on
the continent, he is visiting
the country for the second
time in just over six months.
The whole trip was designed to give Europe a boost
of self-confidence because Europe was increasingly worried
about the nature of the U.S.
presidential campaign, the
tone and tenor coming from
then-candidate
Donald
Trump, said Heather Conley,
an expert on Europe at the
Center for Strategic and International Studies.
Now Mr. Obama must explain what Europeans are
now coining the Trump effect, Ms. Conley said.
Mr. Obamas overarching
message to European leaders
will be that there are certain
things that have endured for
decades under administrations
of different parties, including
the trans-Atlantic alliance and
NATO, Mr. Rhodes said.
Europes antiestablishment politicians have barely

been able to contain their excitement at Donald Trumps
election victory. From
Frances Marine Le Pen to
Hungarys Viktor Orban to
the U.K.s Nigel Farage, they
have greeted the U.S. president-elects triumph as a validation of their own longstanding
opposition to
immigration
and free
trade. With a
series of political tests in
Europe over the next year European populist parties now
sense an opportunity to ride
to electoral success on Mr.
Trumps coattails.
But there is a crucial difference between the U.S. and
European situations. Last
week stocks rose and bonds
fell as investors bet that Mr.
Trumps pledges of lower corporate taxes, fewer regulations and more large-scale infrastructure spending will
boost company profits and
inflation, easing some of the
pressure on the Fed, which
may be able to raise rates
faster than previously expected. In contrast, it is hard
to see electoral success for
populist parties in the eurozone leading to significant
change in national economic
policies. Instead, it is likely to
heap more pressure on the
European Central Bankperhaps more than it can bear.
hat is partly because

eurozone fiscal rules
leave little scope for
significant changes in fiscal
policy. Most eurozone governments are still obliged to
continue to bring down deficits and debt levels. Those
countries that have the fiscal
capacity to provide more
stimulus are those that need
it least: In Germany, unemployment is below 6% and
there are signs that rising
wages are starting to feed
into domestic inflation.
Meanwhile, those countries
with the greatest slack and
therefore most at risk of deflation, such as Italy and Portugal, are those with the least
fiscal space.
Success for populist parties is also likely to make it
even harder for governments
to deliver either growth-enhancing domestic overhauls
or build a consensus around
the overhauls to the governance of the euro area that
most economists say are vital to secure its long-term financial stability.
Indeed, the prospects for
deeper eurozone integration
appear to be receding as
governments have responded
to euroskeptic pressure by
putting new obstacles in the
way. For example, the Netherlands now has a law requiring the government to
hold a referendum on any
EU-related legislation if
300,000 voters demand it.
t the same time, the
eurozone faces a series of imminent challenges that could test its cohesion. There is no sign of
any resolution to the threeway standoff among Berlin,
Athens and the International
Monetary Fund over debt relief for Greece. Similarly,
Rome and Brussels are at
loggerheads over next years
Italian budget as well as the
application of EU rules that
may require bondholders in
some Italian banks to take
losses as part of recapitalization exercises. Policy makers
fear that governments may
simply decide to act unilaterally in breach of EU rules
rather than pay a domestic
price, thereby calling into
question the legal premise
upon which the ECB has
based its actions.
Even if the eurozone
dodges these shocks, policy
makers fear trouble if inflation picks up. The prospect of
higher inflation may ease
pressure on the Fed. But it
threatens to make the ECBs
life harder as it will have to
choose between stopping
quantitative easingrunning
the risk that borrowing costs
for the most indebted governments could rise sharplyor
tolerating above-target inflation, which could undermine
competitiveness and living
standards in Germany.
The reality is there are
some decisions the eurozone
cant duck for much longer
and which may have to be
confronted just as politicians
are least able to respond.
BY JUAN FORERO
BOGOTA, ColombiaPresident Juan Manuel Santos plans
to present a new peace pact
with the FARC rebel group to
Congress for ratification, bypassing voters who rejected an
earlier accord, people familiar
with the strategy said.
On Saturday night, Mr. Santos unveiled the deal, saying it
replaces an accord voters narrowly rejected on Oct. 2.
People who have talked to
the president and government
officials say the Santos administration sees Congress as the
best option to approve the pact
with the Revolutionary Armed
Forces of Colombia. He has majority support among lawmakers, and the countrys highest
court has ruled that Mr. Santos
doesnt have to call a plebiscite
to approve a new pact.
The most salient ratification
process now is, in fact, Congress, one of these people said.
Politically, though, the move
is a gamble for a president who
still needs to implement the
complex agreement. Colombian
society is sharply polarized between those who believe a ballots-for-bullets approach to
ending a 52-year conflict is the
best route and others who say
it is a sellout to a terror group.
The new deal includes revisions after FARC yielded on
some points.
Weve ceded, even extended the borders wed
drawn, to move to the limits of
what is reasonable and acceptable for a political-military organization that was not defeated, the chief of the FARC
negotiating team, Luciano
Marin, said when the deal was

announced on Saturday.
President lvaro Uribe, Mr.
Santoss most determined opponent, supports congressional
ratification of an accord palatable to his side, a spokeswoman
said. But other leaders of the
no vote said this month that
Colombias 49 million people
should have a direct say.
The revised deal is marginally more acceptable, but
Colombia will continue to be a
deeply divided country during
its implementation, said Cynthia Arnson, a scholar at the
Woodrow Wilson Center in
Washington. Its a political
strategy, but what it buys the
government in terms of legitimacy is a big question mark.
What Mr. Santos has
wanted to avoid is that the implementation of the deal run
up against the political campaigning expected at the end
of 2017, when candidates running for Congress and the
presidency start looking for
political banners, one of which
could be an anti-FARC plank.
The next presidential election
is in 2018. Mr. Santos cant
run, but wants to ensure that
a candidate supportive of the
pact takes office, since implementation will run years.
The government has said
time is of the essence because
authorities want to begin disarming 6,000 FARC fighters before other groups, like drugtrafficking gangs, try to recruit
them. They are now in remote
camps where FARC rebels are
watched by the military and
United Nations monitors before
moving to remote hamlets to lay
down their weapons.

militants have dispatched more
than 200 suicide car bombs
against the black-clad Iraqi
Special Operations Forces units
that are pushing into Mosul
from the east, commanders
say. Other Iraqi and Kurdish
units are advancing from the
three other directions.
U.S. special operations
forces are also on the ground
in Mosul, advising the Iraqi
commanders and providing liaison with American warplanes
that hover above the city. At
an outpost in eastern Mosul,
the U.S. troops could be seen
on Sunday launching mortars
and firing from a rooftop gun.
What makes this fight especially difficult is that Mosul
remains packed with civilians.
More than 1.5 million people
are believed to still reside in
the city, the biggest urban
area in Iraq or Syria that remains in Islamic States hands.
That limits the utility of air
power or artillery, which cant
be used to strike densely populated areas without risking
harm to civilians.
Daesh is taking advantage
of civilians as human shields. A
family of civilians would be inside the house, and the enemy
would be targeting us from its
rooftop, Gen. Saadi said.
The fear of suicide car
bombs means no civilian cars
can be seen on the roads in
parts of Mosul retaken from
Islamic State. Those who drive
them risk being mistaken for
bombers and shot from a distance. Troops usually block off
side streets and alleyways with
seized private vehicles, to prevent car bombers approaching.
With many water and sewage
pipes broken during the fighting, streams are coursing down
streets. In some areas, bearded
ODD ANDERSEN/AGENCE FRANCE-PRESSE/GETTY IMAGES
Colombia, Rebels MOSUL

Again Seek Peace
The family of a 15-year-old boy killed in a mortar attack in Mosul mourns his death.
cadavers of killed Islamic State
fighters lie on the ground.
In areas of eastern Mosul
cleared earlier, such as Samah,
troops hand out water bottles
and Styrofoam trays of rice and
beans to families.
When civilians come by we
are not allowed to treat them
rudely or shout at them. Were
giving them so much water and
food that we are running out
ourselves, said soldier Yahya
Majid, after disbursing bottled
water to a family in Samah.
In Arpachiya, a middle-class
neighborhood of pleasant twostory villas, clearing operations against Islamic State
concluded only on Saturday.
Most of Mr. Abu Ahmeds
neighbors got a clean shave on
Sunday, too. There has been
no freedom at all, nothing,
said one neighbor, Ismail Khalil.
Daesh was asking us for help
but nobody did that because we
all know that the security
forces are on the right side.
On Sunday morning, as Gen.
Saadi and Lt. Gen. Abdul Ghani
al Assadi, the overall commander of Iraqi Special Operations Forces, arrived to inspect
the battlefield, soldiers waved
from a rooftop an upside-down
black-and-white Islamic State
flag captured from militants.
Islamic States positions
weren't far away, just across
the road in the Bakr neighborhood. Within minutes of the
generals arrival the gunfire became so intense it was difficult
to hear a conversation. Shortly
thereafter, a car bomb went off
a mile or two away, sending a
cloud of smoke into the sky.
When the shooting died
down, Gen. Assadi strolled
down the street, greeting local
residents. I recognize you, I
have seen you on television,
beamed 70-year-old Abbas
Mohammed. We feel like it is
a holiday today.
You are our people and
our family, our sisters and
mothers, Gen. Assadi said,
and asked for help in tracking
down Islamic State militants
in the area: We want you to
cooperate with us and to

guide us to where they are because they have caused you all
this pain for two years.
Islamic States members
have all fled, Mr. Mohammed
assured him. If there is anyone from Daesh in the neighborhood, we will inform you
immediately.
There most certainly are Islamic State members around,
commanders say. In recent
days, Iraqi Special Operations
Forces captured some 50
wanted Islamic State militants
who shaved off their beards
and tried to blend in among
civilians in eastern Mosul, according to officers.
Asked whether Islamic
State left behind sleeper cells
ready to strike behind front
lines, Lt. Gen. Munaf Abbas,
the deputy commander of
Iraqs Counterterrorism Service, didnt hesitate. One hundred percent, he said. We
cant know who is an innocent
citizen and who still has Daesh
ideas in his head.
* * * *
WORLD NEWS
South Korea Leader

Faces More Pressure
ED JONES/AGENCE FRANCE-PRESSE/GETTY IMAGES
BY ALASTAIR GALE
Protesters calling for the resignation of President Park Geun-hye clashed with police at a demonstration
in Seoul on Saturday, as the country saw its largest antigovernment protests in decades.
SEOULThe popular rejection of the political establishment that drove the U.K.s
Brexit vote and Donald Trumps
victory in the U.S. presidential
election is being felt in South
Korea, where hundreds of thousands of people took to the
streets of Seoul over the weekend to call for the resignation
of President Park Geun-hye.
Ms. Park is being targeted
by protesters for appearing to
allow a close friend to influence government decision
making, even though no formal claims of wrongdoing
have been made against the
president. Prosecutors plan to
question Ms. Park early this
week, an official said, in what
would be a first for a sitting

South Korean president.
Police said the demonstrators
numbered about 260,000 people, while protesters said there
were as many as one million.
The action in Seoulwhich
was accompanied by smaller
rallies in other South Korean
citieswas the largest since
mass demonstrations forced out
military leaders in the 1980s.
While public anger at the accusations began in October, the
latest demonstrations have attracted a much wider range of
protesters than previous rallies.
Ms. Parks family is as wellknown in South Korean politics
as the Clinton and Bush dynasties are in the U.S. She has been
a leading figure in the ruling
conservative party for many
years, but her public-approval

rating recently fell to 5%, the
lowest recorded for any South
Korean president. To many Koreans, she is seen as detached
and more closely allied with
big-business interests than
those of average people. She
rarely gives media interviews
and relies on a small group of
advisers for policy decisions.
Among the throngs of protesters were students angry at
a lack of graduate jobs as bluechip companies have moved
much of their operations and
hiring overseas to lower-cost
countries. South Koreas 10
largest business groups accounted for only 3.6% of employed workers in the country
as of the end of last year, according to government data.
Indonesia Tries New Tactics to Douse Annual Firestorms

BY SARA SCHONHARDT
DUMAI, IndonesiaLate
last month, a fire patrol here
was hard at work battling
small blazes on the dried-out
bogs that make eastern Sumatra island infamous as a major
source of Southeast Asias perennial, choking haze.
Members of the local fire
brigade and a soldier together
with young volunteers sucked
water from a nearby canal
with a hose. For about an
hour, they moved across the
scrubland, tackling flames that
popped up even before the
ones they were fighting were
extinguished. They had been
at it for weeks.
Even if we put the fire out
today, we have to go back tomorrow to make sure it is out
completely, said Rahmad,
who goes by one name, pointing to haze hanging above the
tree line as they prepared to
head back to base just outside
the coastal city of Dumai.
Their limited progress highlights the herculean task fac-
ing Indonesia as it confronts

one of the worlds worst deforestation problems, one
fueled in large part by global
demand for some of the countrys major exports: palm oil,
pulp and paper.
For years, villagers, midsized landholders and plantation owners alike have used
slash-and-burn as the cheapest, fastest way to clear land
for agriculture and development. Such fires can smolder
for weeks in the carbon-rich
peatdeep layers of decayed
vegetation built over thousands of yearsgenerating
thick clouds of smoke that
threaten the health of millions
of people regionwide.
Last year, one of the worst
on record, the fires consumed
around 6 million acresan
area bigger than the state of
New Jerseyand created a
haze visible from space. For
26 days, they also released
more greenhouse gases into
the atmosphere a day than the
U.S. economy, according to the
World Resources Institute.
Dampening Effect
After two bad years, 2016 looks set to be among the lowest in the past
decade for re alerts in Indonesia, thanks largely to the wet weather.
Daily re alerts
5,000
4,000
3,000
2,000
1,000
0
2014
15
*Through Oct. 31
Source: World Resources Institute
Wetter weather this year

helped bring the number of
fires down dramatically, according to early data.
At climate talks in Paris last
yeara year ago, President Joko
Widodo signaled Indonesia,
the regions largest economy,
would overhaul the way it
16*
manages its forests to help cut

its greenhouse gas emissions
by 29% by 2030. Lawmakers
here ratified the pact that
came out of those talks last
month.
National police said more
than 450 people suspected of
starting fires have been ar-
rested this year, from around

220 last year. Conviction can
bring jail time of up to 10
years and a fine up to 10 billion rupiah ($765,000).
The Ministry of Environment and Forestry also has
been stepping up prosecutions
of companies.
But researchers and activists say corruption, moneyed
interests and a lack of evidence have deterred investigations. In late summer, a government team sent to
investigate reports of burning
on a palm-oil plantation in
Riau province was taken hostage and threatened by contracted farmworkers until they
agreed to destroy the photos
and videos they had collected.
Officials are still investigating the case, said Rasio Ridho
Sari, director general at the
environment ministrys lawenforcement division.
Some experts recommend
alternative approaches, such
as distributing cheap landclearing machinery and rewarding villages that dont set
fires to raze landan approach being tested by some

companies and aid groups.
Meanwhile, the government
is using drones and satellite
images from NASA and other
sources to better detect and
investigate hot spots. It has
established a peatland restoration agency tasked with rewetting about 5 million acres and
installing sensors to track
those efforts.
The six-person motorbike
patrols focus on early detection and community outreach.
Zooming over dusty, rural
roads in high-risk areas carrying firefighting equipment,
they either attempt to quench
blazes they spot or call in water-bombing aircraft.
They access fire data, map
their routes and send reports
through their cellphones. But
signals can be spotty and a
lack of water and equipment
can make the job difficult.
Government funding has been
sporadic.
Ben Otto in Jakarta
WORLD WATCH
MOLDOVA, BULGARIA
AFGHANISTAN
JAPAN
Pro-Russian candidates appeared to have won presidential

elections in Moldova and Bulgaria, giving Moscow new allies
in its efforts to regain influence
in parts of Eastern Europe it regards as its backyard.
In the former Soviet republic
of Moldova, Socialist party candidate Igor Dodon won 55.5% of
the vote, according to preliminary
results from the electoral commission, beating his pro-European Union rival, Maia Sandu, in
a second-round runoff.
In Bulgaria, Socialist-backed
Rumen Radev secured 58.1% of
the vote, according to an exit poll
by Alpha Research released on
national television, defeating the
center-right governments favored
candidate, Tsetska Tsacheva.
Charles Duxbury
The U.S. Embassy in Afghanistan temporarily closed on Sunday in response to Taliban attacks that killed four people
inside a highly fortified U.S. military base north of Kabul and
seven in the vicinity of the German consulate in the northern
city of Mazar-e-Sharif.
A Taliban suicide bomber infiltrated security at Bagram Air
Field and detonated explosives
inside the base on Saturday, killing four Americans, including two
service members, Afghan and coalition officials said.
The U.S. Embassy said the
closure was a temporary precautionary measure. The attack
brought the number of Americans killed in Afghanistan over
the past month to eight.
Jessica Donati
Japans economy grew more

quickly than expected in the third
quarter, marking the third straight
quarter of expansion, but the upbeat figure masked continued
sluggishness in spending at home.
Gross domestic product expanded at an annualized 2.2%
pace in the three months
through September, the government said Monday, higher than
the 0.9% rise expected by economists. It was the longest stretch
of growth since 2013.
The surprise was driven by a
rebound in exports, which rose
2% compared with the previous
quarter.
Domestic indicators told a different story. Both household
spending and capital investment
were flat on the quarter.
Eleanor Warnock
SHAKIL ADIL/ASSOCIATED PRESS
Pro-Russians Pegged U.S. Embassy Shuts Export Rise Speeds

To Win Presidencies Amid Taliban Attacks Economic Upturn
FAREWELL: Mourners in Karachi, Pakistan, on Sunday at coffins of victims of a bomb blast Saturday.
TUCKER CARLSON
TONIGHT
Spirited Debate
# Powerful Opinion
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IN DEPTH

world-wide is leaving fewer active workers left to contribute.
The 60-and-older demographic
is expected to roughly double
between now and 2050, according to the United Nations.
Government-bond
yields
have risen since Donald Trump
was elected president, though
few investors expect a prolonged climb. Regardless, the
ultralow bond yields of recent
years have already hindered the
most straightforward way for
retirement funds to recover
through investment gains.
Difficult choices
Pension officials and government leaders are left with vexing choices. As investors, they
have to stash away more than
they did before or pile into riskier bets in hedge funds, private
equity or commodities. Countries, states and cities must decide whether to reduce benefits
for existing workers, cut back
public services or raise taxes to
pay for the bulging obligations.
Interest rates have never
been so low, said Corien Wortmann-Kool, chairwoman of the
Netherlands-based Stichting
Pensioenfonds ABP, Europes
largest pension fund. It manages assets worth 381 billion,
or $414 billion. That has put
the whole system under pressure. Only about 40% of ABPs
2.8 million members are active
employees paying into the fund.
Pension funds around the
world pay benefits through a
combination of investment
gains and contributions from
employers and workers. To ensure enough is saved, plans
adopt long-term annual return
assumptions to project how
much of their costs will be paid
from earnings. They range from
as low as a government bond
yield in much of Europe and
Asia to 8% or more in the U.S.
The problem is that investment-grade bonds that once
churned out 7.5% a year are
now barely yielding anything.
Global pensions on average
have roughly 30% of their
money in bonds.
Low rates helped pull down
assets of the worlds 300 largest pension funds by $530 billion in 2015, the first decline
since the financial crisis, according to a recent Pensions &
Investments and Willis Towers
Watson report. Funding gaps
for the two biggest funds in Europe and the U.S. have bal-
In Japan, Negative
Rates Bring Pain for
Pension Fund
The Japanese government
has turned to its $1.3 trillion
Government Pension Investment
Fund for cash injections six of
the past seven years. That fund,
the largest of its kind in the
world, manages reserves for
Japans public-pension system
and seeks returns that outpace
inflation. The more it earns, the
more it can shore up the governments pension system.
In February, Japanese cen-
Zero & Below

A series examining the ways
low and negative interest
rates have transformed the
economy
looned by $300 billion since
2008, according to a Wall
Street Journal analysis.
Few parts of Europe are feeling the pension pain more
acutely than the Netherlands,
home to 17 million people and
part of the eurozone, which introduced negative rates in 2014.
Unlike countries such as France
and Italy, where pensions are
an annual budget item,
the Netherlands has several
large plans that stockpile assets
and invest them. The goal is for
profits to grow faster than retiree obligations, allowing the
pension to become financially
self-sufficient and shrink as an
expense to lawmakers.
ABP currently holds 90.7
cents for every euro of obligations, a ratio that would be welcome in other corners of the
world. But Dutch regulators demand pension assets exceed liabilities, meaning more cash is
required than actually needed.
This spring, ABP officials
had to provide government regulators a rescue plan after years
of worsening finances. ABPs
members, representing one in
six people in the Netherlands,
havent seen their pension checks increase in a decade. ABP officials have warned
payments may be cut 1% next
year.
People are angry, not because pensions are low, but because we failed to deliver what
Low rates helped

pull down assets of
the 300 largest
pension funds by
$530 billion in 2015.
we promised them, said Gerard Riemen, managing director
of the Pensioenfederatie, a federation of 260 Dutch pension funds managing a total of
one trillion euros.
Benefit cuts have become such a divisive issue that
one party, 50PLUS, plans for
parliamentary-election campaigns early next year that demand the end of pension robbery.
Giving certainty has betral bankers adopted negative
interest rates for the first time
on some excess reserves held
at the central bank so commercial banks would boost lending.
The pension-investment fund
raised a political ruckus in August when it said it lost about
5.2 trillion ($49 billion) in the
space of three months, the result of a foray into volatile
global assets as it tried to escape low rates at home.
The funds target holdings
of low-yielding Japanese bonds
were cut to 35% of assets, from
60% two years ago, and it has
added heaps of foreign and domestic stocks.
ANDREW CULLEN FOR THE WALL STREET JOURNAL
RATES
Costa Mesa has outsourced government services such as park maintenance to absorb higher payments to the public-pension plan.
come expensive, said Ms.
Wortmann-Kool, ABPs chairwoman.
That is tough to swallow for
Mr. van Leeuwen, the Amsterdam language teacher. Sitting
on a bench near one of the
citys historic canals, he fumed
over how he had paid the ABP
every month for decades for a
pension he now believes will be
less than he expected.
Japan is wrestling with the
same question of generational
inequality. Roughly one-quarter
of its 127 million residents are
now old enough to collect
a pension. More than one-third
will be by 2035.
The demographic shift
means contributions from active workers arent sufficient to
cover obligations to retirees.
The government has tried to alleviate that pressure. It decided
to gradually increase the minimum age to collect a pension to
65, to require greater contributions from workers and employers and to reduce payouts
to retirees.
A typical Japanese couple
who are both 65 would collect
today a monthly pension of
218,000 ($2,048). If they live
to their early 90s, those payouts, adjusted for inflation,
would drop 12% to 192,000.
Mr. Kobayashi, the former
Tokyo government worker, said
the governments effort to
boost returns by making riskier
investments was supposed to
The government-mandated
target is a 1.7% return above
wage growth. Wed like to strive
to accomplish that goal, said
Shinichiro Mori, a deputy director-general of the funds investment-strategy department.
The fund posted a loss of
3.8% for the year ended in
March because of the yens
surge and global economic uncertainty. It was its worst performance since the 2008 global financial crisis. Mr. Mori said
performance should be evaluated from a long-term perspective, citing returns of 40 trillion
since 2001.
Kosaku Narioka
increase benefits for everyone,

even if only slightly. It didnt
turn out that wayAnd they are
inflicting the loss on us.
Mr. Kobayashi joined roughly
2,300 people who marched in
downtown Tokyo in October to
protest government plans to
cut pension benefits further.
In the U.S., the countrys
largest public-pension plan is
struggling with the same bleak
outlook. The California Public
Employees Retirement System,
which handles benefits for 1.8
million members, recently
posted a 0.6% return for its
2016 fiscal year, its worst annual result since the financial
crisis. Its investment consultant
recently estimated that annual
returns will be closer to 6%
over the next decade, shy of its
7.5% annual target.
Pension Pressure
Low interest rates have pulled down investment returns for government
pension funds, contributing to gaps between assets and liabilities at
funds in the Netherlands and California, and negative returns at the
fund that manages reserves for Japan's public-pension system.
Annual asset growth of world's top 300 pension funds
15%
10
5
0
5
10
Assets
Cutting costs
Calpers investment chief
Ted Eliopouloss strategy for
the era of lower returns is to
reduce costs and the complexity
in the funds $300 billion portfolio. He and the board decided
to pull out of hedge funds, shop
major chunks of Calpers realestate and forestry portfolios
and halve the number of external money managers by 2020.
Calpers isnt taking a passive approach to the anticipated
lower return rates, fund
spokeswoman said.
Yet the Sacramento-based
plan still has just 68% of the
money needed to meet future
retirement obligations. That
means cash-strapped cities and
counties that make annual payments to Calpers could be
forced to pay more.
That is a concern even for
cities such as affluent Costa
Mesa in Orange County. The
city has outsourced government
services such as park maintenance, street sweeping and the
jail, as a way to absorb higher
payments to Calpers. Pension
payments currently consume
about $20 million of the $100
million annual budget, but are
expected to rise to $40 million
in five years.
The outsourcing and other
moves eliminated one-quarter
For centuries, specialists

largely menbuilt livelihoods
around eradicating the animals.
They passed down their molekilling arcana in a long-lived
oral tradition, says Karen
Sayer, a history professor at
Leeds Trinity University who
studies human-vermin relationships.
There were boom times such
as the 1901 moleskin-coat craze
Queen Alexandra started. But
industrial pesticides eventually
displaced traditional trappers.
That changed in 2006, when
the European Union banned
strychnine, a popular mole poison. Traditionalists such as 71year-old Brian Alderton saw an
opening. He seeks out mole

tunnels with a special probe he
developed and uses traps invented in the 1920s by the
Scottish shepherd and renowned mole catcher John
Newton Duffus.
Its pure art, he says.
After the strychnine ban,
Mr. Alderton says, he realized
that in phone directories and
the public consciousness, mole
catchers were lumped in with
general pest controllersexterminators of rats, mice, insects
and bedbugs with no mole
mastery. He started the Register in 2007 to train mole specialists and distinguish them
from the untutored rat-killers.
Ms. Chippendale listed herself on the Register, but left in

2009 to form the rival Association, which aims to encourage
excellence in the profession
and practical art of mole catching. Administrative secretary
Duncan Emmett says other
groups exist to pursue different ambitions, be they motivated by financial return or to
press for political change.
Political change is one aim
of the Guild of Traditional Mole
Catchers, a third trade group.
It favors legislation requiring
daily mole-trap checks to prevent mole suffering and claims
to be the only organization
working collectively to pro-
13
14
15
ABP, Netherlands
California Public Employees'

Retirement System
$500 billion
$500 billion
400
400
300
300
200
200
100
100
0
08 09 10 11 12 13 14 15
Annual returns of Government Pension Investment Fund, Japan

15%
10
5
0
5
10
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
*ABP data for 2016 are through the third quarter.
Sources: P&I, Willis Towers Watson (top 300); fund documents THE WALL STREET JOURNAL.
GETTY IMAGES/ISTOCKPHOTO
A revival of Englands mole-catching craft has rival groups accusing one another of being impostors.
12
08 09 10 11 12 13 14 15 16*
MOLES
mole catcher listed on the Register. Disappointed with the
Registers training, she broke
away several years ago to help
form the rival Association of
Professional Mole Catchers.
Ms. Chapman says appreciative notes from students displayed on the Register website
testify to how good her classes
are. She says rivals including
the Association are copycats.
And some engage in mole-mafia-type behavior.
Perhaps the only point of
agreement between Ms. Chapman and Ms. Chippendale is
that a third organization purporting to represent U.K. mole
professionals, the Guild of Traditional Mole Catchers, has big
problems. It recently endured a
boardroom coup that its secretary, Martin Noble, declined to
discuss out of concern that his
integrity and the guilds are
being wrongly portrayed.
Some 31 million moles roam
the U.K., Oxford University zoology fellow Sandra Baker estimates. She says the worm-eating relatives of the shrew
arent all badtheir digging
boosts soil nutrients, and superstition says wearing a dead
mole around your neck cures
toothaches.
11
Liabilities
of city workers. The cost of

benefits for those remaining
will surge to 81 cents of every
salary dollar by 2023, from 37
cents in 2013, city officials say.
The mayor, Mr. Mensinger, is
hopeful for a state solution involving new taxes or a benefits
overhaul, either from lawmakers in Sacramento or from a
California ballot initiative for
2018 that would cap the
amount cities pay toward pension benefits for new workers.
Weaker cities across California could face bankruptcy without help, said former San Jose
Mayor Chuck Reed, who oversaw a pension overhaul there in
2012 and is backing the 2018
initiative that would shift onto
workers any extra cost above
the capped levels. The plans

are all based on assumptions
that have been overly optimistic, he said.
Costa Mesa resident James
Nance, 52, worries the
citys pension burden will affect
daily life. We could use more
police, said the self-employed
spa repairman. Id like to know
the city is safe and well protected, but I know there have
been tremendous cutbacks.
Costa Mesa ended the latest
fiscal year with an $11 million
surplus, its largest ever. But
that will soon disappear, Mr.
Mensinger said, as pension costs swallow up $2 of every $5 spent by the city.
We have this gigantic overhead cliff called pensions.
mote time-honored methods of

mole control alongside welfare
of the mole. It offers training
and accreditation for people
who reach levels 1, 2 and 3 of
its mole-knowledge hierarchy.
Those who reach level 3
may take a field test to become
master mole catchers.
Ms. Chapman, the Lady
Mole Catcher, derides the notion of master mole catcher
as simply made up. She says
the Guild-backed legislation is
ridiculous, as trapped moles
die instantaneously, so dont
suffer if left in a trap.
Ms. Chippendale, of the Association of Professional Mole
Catchers, says Ms. Chapmans
training through the Register
offers inaccurate information
on mole breeding. Shes taking
their money but shes not really doing the work. I am not
happy about it and I would say
these things to her face, Ms.
Chippendale says.
While Ms. Chippendale
hasnt confronted Ms. Chapman, someone did complain to
the U.K.s Advertising Standards Authority that Ms. Chapman was claiming to be Norfolks only Lady Mole Catcher.
The authority says it investigated this year.
Ms. Chapman says she
didnt know of other lady mole
catchers in Norfolk when she
started using the slogan. Others since surfaced, including a
self-proclaimed mole girl.

Ms. Chapman agreed to change
her slogan to Norfolks very
own lady mole catcher, rather
than its only oneafter paying
450 in lawyers fees. She says
rivals are jealous. Ive got
messages on my phone at
home saying You keep off my
patch. If not, there will be
trouble.
On a recent rainy morning,
Ms. Chapman loaded her Jack
Russell terrier, Buddy, into the
Lady Mole Catcher car and
drove to the Eaton Golf Club.
Its mole-beleaguered club
manager, Peter Johns, waited
by a golf cart. With Buddy running alongside, they drove to a
green that was pocked with
mounds of deep-brown moledug soil. Ms. Chapman probed
the lawn with a metal rod looking for tunnels.
Ms. Chapman laid one trap
underground and continued to
another that was marked with
a yellow flag. She dug it up and
pulled a desiccated mole from
the traps half-cylinder. She will
get 60 for the catch, one of
five that day. It is worth the
money, Mr. Johns saidshes
caught nearly 40 since he
hired her in April to replace a
pest-control generalist who
failed to eradicate the moles.
That is no surprise, Ms.
Chapman said. In this business, she said, there are too
many disingenuous people.
Monday, November 14, 2016 | A10A
NY
* *
NATIONAL TRANSPORTATION SAFETY BOARD
GREATER NEW YORK
La Guardia Airport, near Flushing Bay in Queens, doesnt have an unusually high number of runway incidents, aviation analysts say, despite its shorter runways. A Southwest Boeing 737 after a skid in 2013.
La Guardias Runways Come Up Short

When a jet carrying thenRepublican vice presidential
nominee Mike Pence skidded
on landing Oct. 27 at La Guardia Airport, a debate reignited
about whether the airports
famously short runways are
safe enough.
Nobody was injured after
Mr. Pences Eastern Air Lines
Boeing 737 slid about 200 feet
past the runway, but it marked
the latest of similar incidents
at the airport in Queens and
unleashed a new wave of speculation
about
potential
changes to the runways.
Some have even floated a
long-shot plan to build an additional runway on Rikers Island, the nearby site of New
York Citys main jail complex.
Others have noted the airports safety record is solid.
They argue the focus should
be on improving wait times
and traveler experience at La
Guardia, where a $4 billion
overhaul includes a new central terminal and expanded
taxiways with the aim of reducing flight delays.
Phil Derner Jr., president
of aviation research company
NYCAviation, said La Guardia
has this reputation as the
short runway airport, and
while its runways are comparatively short, its operations
have not been affected by
that at all, and the airport
doesnt have an unusually
GREATER NEW
YORK WATCH
HARLEM
Bronx Man Arrested

In Subway Slashing
Police arrested a man on Sunday for slashing a man on the
subway, a law enforcement official said.
Eric Cruz, a 39-year-old of the
Bronx, slashed another man on the
D train in Harlem around 2:10 a.m.
during an argument, the official
said. Mr. Cruz attempted to flee in
a taxi, where he was arrested. Police found a knife in the backseat.
Mr. Cruzs lawyer couldnt be
reached for comment.
The victim was treated at
Mount Sinai St. Lukes Hospital.
He suffered a deep laceration,
but is in stable condition, according to the official.
Zolan Kanno-Youngs
NEW YORK CITY
Trumps Immigration
Policy Protested
Thousands protested against
President-elect Donald Trumps
immigration policies in New York
City on Sunday.
About 3,000 people gathered
in front of Trump International
Hotel & Tower in Columbus Circle
and marched to the Trump
Tower on Fifth Avenue. No arrests were made.
Natalia Aristizabal, an organizer of the demonstration, said
illegal immigrants deserve to be
treated as humans. Were not
intimidated by a wall, she said.
A spokeswoman for Donald
Trump didnt return a request for
comment.
Zolan Kanno-Youngs
challenging than others because theres less room for error on a shorter runway, said
Peter Goelz, an aviation consultant and former managing
director of the NTSB.
It always helps to add runway space, but La Guardia is
constrained, by bodies of water, and it is what it is.
This geographical constraint usually stymies proposed solutions to the runway
issue. Generating some discussion has been an unconventional proposal from architect Jim Venturi at
ReThink Studio that would
build a new, longer runway on
the 413-acre Rikers Island.
The idea would require the
city to close the jail.
Mr. Venturi said the Rikers
runway would improve safety,
reduce flight delays and allow
a broader array of aircraft to
get in and out of La Guardia.
In September, New York
Gov. Andrew Cuomo expressed
interest in the proposal.
La Guardia is fundamentally limited by runway
space, Mr. Cuomo said.
Thats why I was very intrigued by the idea of the city
selling Rikers Island, because
Rikers prison is an operational
problem, and using Rikers to
build another runway for La
Guardia, because were doing
everything we can with La
Guardia, but what you have is
what you have in terms of
runway space.
Prepare for Landing

Some aviation experts recommend a minimum runway length of 6,000 feet for some commercial aircraft.
Here is how the New York-area airports measure up:
La Guardia
John F. Kennedy
Newark
Recommended
minimum:
6,000 ft.
Shortest:
7,001 ft.
Longest:
14,511 ft.
Shortest:
8,400 ft.
Shortest:
6,726 ft.
Longest:
7,003 ft.
Longest:
11,000 ft.
Features: High-intensity edge lighting;

grooved for added traction in bad weather;
lightweight, crushable material to slow
aircraft that overshoot
high number of runway-related incidents.
The Pence mishap echoed
other incidents at La Guardia,
which is operated by the Port
Authority of New York and
New Jersey. Last year, a Delta
Air Lines jet skidded off a
snowy runway; the National
Transportation Safety Board
faulted the pilot. In 2013, a
Southwest Airlines jet crashlanded on the runway and
skidded; the NTSB said the
captain had broken safety
rules. No one was killed in ei-
1 mile
1 mile
1 mile
High-intensity edge lights; grooved to

improve skid resistance and minimize
hydroplaning
ther incident. The NTSB is investigating the Pence incident.

All our airports need longer runways, but nowhere
more so than La Guardia, both
for safety and to reduce delays, the Global Gateway Alliance, an airport advocacy
group, said in a statement.
But aviation analysts said
the airport doesnt have an unusually high number of runway
incidents and questioned a
supposed correlation between
safety and runway length. The
runways also are surrounded
High-intensity edge lighting,

landing-approach system for bad
weather
by arrestor beds, areas of

spongy materials installed to
slow or halt aircraft that overshoot their landings.
A port authority spokesman stressed the importance
of safety, calling it the highest
priority and pointing out that
the arrestor beds, mandated
by the Federal Aviation Administration proved vital
during the Pence incident.
The airport was built on the
shores of Flushing Bay in the
1930s when Fiorello La Guardia
was mayor. Its two runways
are 7,000 feet long, compared

with those at John F. Kennedy
Airport, which are up to 14,000
feet, and Newark Liberty International Airport, where they
are up to 11,000 feet.
The Global Gateway Alliance, which advocates for improvements at New York-area
airports, said 6,000 feet is generally a safe minimum runway
length for small commercial
aircraft and 10,000 feet is considered safe for nearly any
commercial aircraft.
Shorter runways are more
New Priorities Likely for U.S. Attorney Offices

BY CORINNE RAMEY
Federal investigations with

ties to public officials, similar
to the one involving New York
City Mayor Bill de Blasio, probably will move forward in the
Trump administration, although the types of cases that
the U.S. Justice Department
will pursue over the longer
term is more uncertain, legal
analysts say.
Whomever occupies the U.S.
attorneys office takes the lead
role in choosing what crimes to
prosecute; Manhattan U.S. Attorney Preet Bharara, for example, has made political corruption a top priority.
New Yorks Southern and
Eastern districts have a tradition of independence from
Washington, and most former
prosecutors say the new administrations primary influence will be new leadership,
not politics. The Southern Districts Mr. Bharara, the Eastern

Districts Robert Capers and
Paul Fishman, of New Jersey,
arent likely to remain in office.
All were nominees of President
Barack Obama.
New U.S. attorneys ordinarily dont drop cases unless they
appear to be dead ends, which
is why the investigations already under way are likely to
proceed, according to current
and former prosecutors.
It is only in rare circumstances that a leadership
change impacts prosecutions or
well-developed investigations
already in progress at the time
of the transition, said Arlo
Devlin-Brown,
who
once
headed the public-corruption
unit in the Southern District.
Outgoing U.S. attorneys
sometime push to wrap up investigations before a change in
administrationsmore from a
MARY ALTAFFER/ASSOCIATED PRESS
BY MIKE VILENSKY
Manhattan U.S. Attorney Preet Bharara is an Obama appointee.

desire to finish what they
started than from political concerns, prosecutors said.
The bigger impact will be
the shift in priorities and
change in institutional knowledge.
If youre a public-integrity
prosecutor, and youve been

doing that for five years, you
know who all the players are,
said Anthony Capozzolo, a former prosecutor in the Eastern
District.
Under Mr. Bharara, the
Southern District has aggres-
sively pursued public-corruption cases, most recently in

September when it unsealed
charges against a former aide
to New York Gov. Andrew
Cuomo. The office is also looking into the fundraising activities of Mr. de Blasio, who
hasnt been charged with
wrongdoing.
Federal prosecutors also won
convictions against former New
York state Assembly Speaker
Sheldon Silver and former state
Senate Majority Leader Dean
Skelos. Both men are appealing.
Still, former prosecutors
say crimes such as corruption
or terrorism tend to capture
the interests of most people
who would head the office.
The larger questions, they
say, is whether civil rights,
police misconduct or environmental prosecutions could fall
off the radar under the Trump
administration.
Civics Game Advanced by Former Justice Is Classroom Hit

BY LESLIE BRODY
Amid a contentious presidential campaign, a civics videogame from a group founded

by retired Supreme Court Justice Sandra Day OConnor got
a lot of play in New York and
New Jersey classrooms.
iCivics, a nonprofit, has released 19 free games aimed at
helping students in grades 4
to 12 improve civil discourse,
use evidence in arguments and
understand others views.
Anna Nelson, vice principal
at Bronx Latin, said her seniors enjoyed Win the White
House, though at times got

frustrated when their approval
ratings sank or their camiCivics, a
nonprofit
founded by
Sandra Day
OConnor, has
released 19
free games.
paigns couldnt afford a flight.
Students learn by doing, she
said.
Students played that game
almost 175,000 times in New

York over the past year, and
nearly 163,000 times in New
Jersey, iCivics said.
Justice OConnor founded
iCivics in 2009 in hopes of restoring civics education in
American schools and combating disillusionment with the
political process. Funded
through philanthropy, its governing board includes current
Supreme Court Justice Sonia
Sotomayor.
Diana Turk, director of
teacher education at the NYU
Steinhardt School of Culture,
Education, and Human Devel-
www.ebook3000.com
opment, said that public

schools under pressure to
boost test scores often neglect
civics, so she applauded efforts to teach it by any means,
including videogames.
Students often dont understand the role citizens play
in a democracy, she said.
They dont understand the
importance of their own
voices.
Use of the game is growing
nationally. U.S. Students
played Win the White House
more than 1 million times in
October as teachers looked for
nonpartisan ways to explain
the electoral process, iCivics

officials said.
The day before the election
last week, the group released
an expanded version of Executive Command, which aims
to show students just how
hard it is to be president. It
challenges players to serve as
commander in chief, promote
their agendas to Congress,
juggle bills, manage foreign
policy and confront the limits
of their power. This is one
way to engage kids and help
them understand what is going on, said Louise Dub, executive director of iCivics.
A10B | Monday, November 14, 2016
NY
* *
GREATER NEW YORK

New Course
The Howard Hughes Corp. is hoping a mix of food and entertainment will bring crowds to its Seaport
District. A look at the project:
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STEVE REMICH FOR THE WALL STREET JOURNAL
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East River
500 feet
The South Street Seaport neighborhood is adding younger residents. The Pier 17 Building, below.
The Tin Building, which was

gutted in a re in the 1990s,
is going to be taken down
piece by piece and
reconstructed to comply
with requirements after
superstorm Sandy.
a
W
r
te
The Fulton Market Building

has been restored and now
houses an iPic movie theater.
Italian retailer 10 Corso
Como will also open a store
in the building.
The Pier 17 Building will

house restaurants by
Jean-Georges Vongerichten
and David Chang's
Momofuku Group. This
four-story building plus roof
deck will have a restaurant
on the roof as well with
public space and other food
and beverage space.
Source: Howard Hughes Corp.
Seaport Developer Looks to Make a Splash

Howard Hughes Corp.
is counting on crowds
to come for good times;
food, flicks and fashion
BY KEIKO MORRIS
The developer behind the retail-revitalization project in the

South Street Seaport neighborhood is ripping a page from
show business.
The Howard Hughes Corp.
has embraced what it hopes is
a buzzy blend of
PROPERTY food, entertainment and culture with its
400,000-square-foot Seaport
District along the East River in
lower Manhattan.
Last month, an eight-screen
iPic theater opened, offering a
full dining menu and bar and
bathrooms bedecked with murals. Eventually the district will
include a snazzy food market
by chef and restaurateur JeanGeorges Vongerichten and 10
Corso Como, a sprawling re-
tailer that offers an eclectic mix

of fashion, food, housewares
and art.
With more and more people
moving online, people arent
coming to brick-and-mortar
space for transactional reasons
as they had in the 80s, said
David R. Weinreb, chief executive officer of the Howard
Hughes Corp. Instead they are
coming for great social interactions or experience.
The Seaport District, with a
development cost estimated at
more than $500 million, is taking shape amid challenging
times for retail, especially the
traditional big national chains.
It gets off the ground following
openings of two nearby retail
giants, the 365,000-square-foot
Westfield World Trade Center
and the luxury shops and restaurants of Brookfield Place.
Often viewed as complementary to the other two projects,
it will have to somehow stand
apart in an environment constantly shifting under the pressures of online shopping, retail
analysts and experts said.
Although brick-and-mortar
stores arent expected to go
away, the days of making a retail development click by landing two or three big anchors
are gone.
Instead, developers are focused on creating multistore
retailing communities that are
constantly reinventing themselves, said Mike Moriarty, a
partner in the retail practice of
A.T. Kearney, a global strategy
and management consulting

firm.
The constant reinvention
can be difficult, he said.
As a developer, you do want
stability, but you should plan on
20% churn of retail tenants to
ensure innovation and newness
in the retail space, Mr. Moriarty said.
The Howard Hughes Corp.
became involved with the property in 2010, when the company
was spun out of General Growth

Properties Inc. The Howard
Hughes Corp. holds a long-term
city lease, controlling Pier 17
and portions of the South Street
Seaport Historic District. The
company tabled separate plans
to build a residential tower on
the waterfront.
So far, the company has restored the Fulton Market Building, home to the iPic theater,
rebuilt Pier 17 and is in the process of building a four-story
structure where David Changs
Momofuku Group will open a
restaurant.
The project also involves relocating, raising and restoring
the 1907 Tin Building, which
was once part of the Fulton Fish
Market. The company received
permission to move the building
back from the FDR Drive so it
can be raised above the flood
plain. The neighborhood was
heavily damaged in superstorm
Sandy.
That is where Mr. Vongerichten plans to pay homage to the
classic New York scene he used
to visit 30 years ago with a
40,000-square-foot food market.

The Fulton Fish Market was
pretty wild, Mr. Vongerichten
said. All the fish mongers
walking around with hooks on
their shoulders, burning the
fish boxes in a barrel. Youd
come back from the market
smelling like smoked fish.
The Tin Building also will
house restaurants such as a sushi bar and an oyster bar as
well as shops selling equipment
and cookbooks, and demonstration kitchens.
Other types of retail will be
spread across the first and second floors of other buildings.
The projects timing is spot
on as lower Manhattan adds
young residents, said Jessica
Lappin, the president of Alliance for Downtown New York.
We currently have over
30,000 residents between the
ages of 18 to 44 years old south
of Chambers Street, she said,
adding that residents told the
alliance they wanted more
chef-inspired restaurants, retail
with character and venues for
entertainment.
PROPERTY WATCH
MANHATTAN
Three Leases Signed

At Kaufman Buildings
EXPERIENCE
BROOKLYN AT ITS BEST
The Kaufman Organization has

fully leased two of four office
buildings that it renovated earlier
this year.
The commercial real-estate firm
signed three leases for spaces at
119 W. 24th St. and 19 W. 24th St.
Co-working firm Alley signed a
10-year expansion of its lease at
119 W. 24th St., taking 12,504
more square feet for a total of
more than 50,000 square feet.
At 19 W. 24th St., technology
company Blis and financial services
company PeerIQ each signed a
five-year lease for 5,418
square feet.
Kaufman invested $35 million to
renovate the four 1920s buildings;
the improvements include technology upgrades, redesigned lobbies
and new elevators, said Kaufman
principal Grant Greenspan.
Next up is fully leasing 15 W.
27th St. and 45 W. 27th St.
Emily Nonko
BROOKLYN
Gowanus Sees Uptick

In Speculative Outlays
Real-estate investments and
construction costs are going up in
Brooklyns Gowanus neighborhood
as New York City considers rezoning the area for more residential
development, a new study shows.

Speculative real-estate investments increased 47% in 2015 from
2014, and the average price per
buildable square foot rose to $262
from $223 in those same 12
months, according to the study by
GFI Realty Services LLC.
The study found that the neighborhood has seen less development because of its industrial zoning as well as the Gowanus Canal,
a polluted waterway that has been
designated a Superfund site by the
U.S. government.
The neighborhood hasnt
popped yet, said Michael Weiser,
GFIs president. But its not a
question of if it will happen, its a
matter of when.
Emily Nonko
Family History Inspires Cancer Lab
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CALL OR TEXT EVENTS TO 718.257.8483
barclayscenter.com/premiumseating
STONY BROOK, N.Y.Lalit

Bahl was a teenager when two
of his aunts died and he
learned the women in his family suffered from unusually
high rates of breast and colon
cancer.
Over three generations,
more than 20 family membersall but one femalehave
been diagnosed with cancer, including his sister.
Its something that has
haunted our family for a very
long time, said Mr. Bahl, 73
years old, who lives in Setauket, N.Y., in Suffolk County
on Long Island.
Now Mr. Bahl and his wife,
Kavita, are paying for a new
cancer-research program at the
Stony Brook University School
of Medicine with a $13.5 million
donation. Construction on the
Kavita and Lalit Bahl Molecular
Imaging Laboratory is scheduled to finish in 2018.
The 40,000-square-foot lab
will be housed in a 465,000square-foot medical and research center now under construction that is part of the
Stony Brooks expansion plans
for researching and treating
cancer. The Bahl Lab will focus
on developing new treatments
and tools for earlier diagnosis.
For the Bahls, contributing
to cancer research has become
personal.
Mr. Bahl, who works at a
hedge fund, grew up in India
HEATHER WALSH FOR THE WALL STREET JOURNAL
BY JOSEPH DE AVILA
A research lab at Stony Brook Cancer Center on Long Island.

and moved to the U.S. in the
1960s. Many of his family
members with cancer live or
lived in India. His sister, who
died seven years ago when she
was in her 50s, also moved to
the U.S.
It is rare to see so many
family members diagnosed
with cancer, said Yusuf Hannun,
director of the Stony Brook
Cancer Center, who will run the
new lab with Lina Obeid, dean
for research at Stony Brook
University School of Medicine.
Environmental factors could
have played a role, Dr. Obeid
said.
They sort of expect it to
happen to them, said Mrs.
Bahl, 68, When it happens,
its not a big surprise.

One focus of the lab will be
the study of the metabolic
processes of fatty molecules,
known as lipids, Dr. Hannun
said. Researchers hope to determine with a higher degree
of certainty if one type of fat
in a persons diet predisposes
that person to certain types of
cancer, he said.
The lab also will focus on
molecular imaging, a noninvasive technology that scientists
can use to study how cancer
grows to make earlier diagnoses and more effective treatments. The researchers also
plan to incorporate their work
on lipids with molecular imaging, Dr. Obeid said.
* * * *
LIFE&ARTS
SPORTS
Jason Gay
JASON SILVA/AGIF/AP
New York
The Ultimate
Fighting Championship finally thumped
into New York City
this weekend, late, bloody and
loud. The city was a holdout on
the global mixed-martial arts
phenomenon, owing to a nowoverturned state law prohibiting professional cage-fighting
as if that was ever frowned
upon in this brusque, elbow-toear town. If youve ever taken
the train at 8 a.m. on a Monday
around here, or waited in line
for one of those $7 almondmilk lattes, you know the truth:
New York City is a cage fight.
The headliner Saturday at
Madison Square Garden was
Conor McGregor, the 28-yearold Irish lightweight equipped
with a heavyweight tongue.
McGregor is one of a few stars
in this growing if polarizing
sport to cross over into the
mainstream, and he arrived in
New York with a boast of I run
this city and callouts to his
countrymens rugged roots here.
The Irish, we built this
town, he said. Now were
coming back to claim whats
ours. McGregor, who possesses
a tattoo across his chest of a
gorilla eating a heart (the tattoo looks like the worlds most
aggressive lobster bib), isnt
much for idle or humble talk,
but he was the perfect mouth
and antagonist in a city that
appreciates both.
After all, New York is a monument to self-regard like
McGregors. Forty-five years
ago, in this same arena, Norman
Mailer watched Joe Frazier beat
Muhammad Ali and was inspired to write a tribute to ego,
which he called the great word
of the 20th century. Everything we have done, Mailer
wrote, from monumental feats
to nightmares of human destruction, has been a function of
that extraordinary state of
psyche which gives us authority
to declare we are sure of ourselves when we are not.
Mailer, an immodest fighter
himself, would have probably
loved McGregors brash magnetism, plus the fact that hes
backed it up with his fists.
What makes McGregor a compelling fighter is how hes slid
up and down weight classes in
the UFC while maintaining a
dominant grip; hes the first
fighter to ever be a concurrent
champion in two separate
Please turn to page A14
Conor McGregor, after scoring a

second-round knockout Saturday.
FROM TOP: CHRISTIES IMAGES LTD; SOTHEBYS
A Brash
Champ
Worthy of
New York
Gerhard Richters Abstract Painting (809-2), now owned by Eric Clapton, is expected to fetch at least $18 million at Christies.
THE ART MARKET
A Chilly Auction Week
For the New York sales, Sothebys and Christies temper their expectationsbut also dangle
potential blockbusters such as a $45 million Monet and a $50 million Munch
BY KELLY CROW
If the art market could be
summed up in a painting, it would
be a still life. After several years
of surging growth, auction sales
slowed last year as wary collectors held onto more of their trophies rather than risk putting
them up for bid.
Sales continue to shrink, with
this weeks New York auctions offering one of the smallest batches
of works in recent seasons. Between now and Friday, Sothebys,
Christies and Phillips are expected
to sell around $1 billion in art,
down 57% from $2.3 billion at a
similar series of sales last November. Only Phillips, a boutique
house, projects it will sell more art
this week than last fall.
Necessity has compelled the
houses to get inventive with marketing to buyers spooked by global
economic uncertainty and sluggish
sales for newer art. In its Manhattan headquarters, Sothebys recreated the New York and Palm
Beach, Fla., homes of Ann

Ames, who asked the
house to sell the roughly
$100 million collection
she amassed with her
husband, former Oppenheimer & Co. partner Steven Ames, before his
death in March.
For its website, Sothebys created an animated video with specialist Simon Shaw
discussing Lszl Moholy-Nagys 1923 EM1
(Telephone Picture),
which is estimated to sell
Monday night for at least
$3 million.
Phillips consigned a
Roy Lichtenstein painting, Nudes
in Mirror, that a vandal slashed
several times a decade ago. The
auction house produced a separate
catalog to document the paintings
repairwith an acupuncture needleand discuss other damaged
works. Now in one piece, the
painting looks like a million dollars, said specialist Jean-Paul En-
At Sothebys, Edvard Munchs

Girls on the Bridge will have a
low estimate of $50 million.
gelen. But will collectors think the

Lichtenstein looks like $20 million,
its low estimate?
Experts from all three houses
agree that this fall, the sweet spot
for collectors, in terms of pricing,
hovers between $700,000 and $5
million. That may benefit designer
Tommy Hilfiger, who is selling five
works at Phillips on Wednesday
with a combined low estimate

of $5.5 million.
Other sellers include rocker
Eric Clapton, who enlisted
Christies to sell his Gerhard
Richter, Abstract Painting
(809-2), for at least $18 million.
Publishing executive Peter Brant
has asked the same house to sell
his John Currin painting of a
pair of nude women, Nice n
Easy, for at least $12 million,
up from the $5.4 million he paid
for it eight years earlier.
Tighter supply has spurred
the houses to showcase artists
who seldom or never have been in
a marquee New York evening sale
before, like Frantiek Kupka, a
Czech modernist whose 1924 The
Form of Blue is estimated to sell
for at least $1.5 million at Sothebys Monday.
Five pieces facing important tests
at the New York auctions.............. A12
FAMILY
GOBBLE, GOBBLE, GOBBLE, THREE TIMES A THANKSGIVING TURKEY
KAGAN MCLEOD
BY ANNE MARIE CHAKER

Thanksgiving grilled cheese with cranberry compote for the classroom? Or what
about pumpkin ravioli with sage brown butter for the office potluck?
Supermarkets and food-delivery services
are betting people have multiple, smaller
Thanksgivings in addition to the main event
next week. And they want to help extend the
holiday eating, and their sales.
People in the U.S. are enjoying more
Thanksgiving meals. Divorce and distance
may mean some families have multiple
meals. There is the increasing popularity of
Friendsgiving, a gathering of friends and
colleagues in the week or two leading up to
the big family meal; the classroom celebration, when children dress up as pilgrims
and bring a dish from home; and the office
potluck.
In the current issue of its catalog, gour-
www.ebook3000.com
met food retailer Dean & Deluca is pitching

turkey alternatives such as 24 oysters for
$129, a $109 venison rack and a $60 semiboneless quail that serves three people. A
roasted rack of venison, for instance, could
be a nice alternative for Thanksgiving at the
in-laws, says Michele Dowling Johnson, senior vice president for sales and marketing
at Dean & Deluca.
I couldnt personally bear to see another
turkey in an All-Clad roasting pan, says Michael Scabilia, Dean & Delucas chief merchant.
Hannah Streeb, a 36-year-old elementary
school teacher in Arvada, Colo., says her
family celebrates about five total Thanksgivings. For us, its more of a Thanksgiving
month, she says. She and her husband Tim,
managing director for a brand consulting
company, hosted 20 adults and 20 children
at their home earlier this month for a potluck meal that included two turkeys and a
Please see TURKEY page A13
LIFE & ARTS

MUSIC REVIEW | Jim Fusilli
snaking funk bass is the engine of

Whateva Will Be, and Black
Spasmodic bounces along on a
reggae beat.
As befits a project that reunites
one of Americas most influential
groups, We Got It From Here features guest musicians from across
the rock-and-pop spectrum. Mr. Lamar provides an explosive verse in
Conrad Tokyo, Andr 3000 of
Outkast dominates the narrative in
Kids and Anderson Paaks melodic singing lifts Movin Backwards. Elton John sings in Solid
Wall of Sound, which also features
Busta Rhymes. Jack White appears
on several tracks, most notably providing the tasty guitar bits in the
swaying Melatonin. Talib Kweli
and Kanye West join in on The
Killing Season, which also features
Dexter Mills Jr., aka Consequence,
who appears on several tracks.
But the skills of the Tribe members give the album its vitality. In
Enough!!, the contrasting rapping styles of Q-Tip and Mr. White
create tension in a sly soul setting.
Phife Dawg is never far from the
survivors thoughts. In Lost
Somebody, a touching tribute, a
sweet chorus acknowledges that
he is gone: No more crying, hes
in sunshine, hes all right now, see
his wings. Movin Backwards
gives the group members a chance
A Tribe Called Quest released its highly anticipated final album on Friday.
Phife Dawg, above, died in March. The groups other members: Q-Tip, top, Ali
Shaheed Muhammad, left, and Jarobi White, above left.
to comment on their own journey

to the reunion; Q-Tip raps: Moving backwards never, that was
never the plan / Can I vent? I was
content being my own man. But
reuniting Tribe, he realized, would
give him a more prominent platform to air his social commentary.
Who could be blind to racism?
he asks in the song.
At times, We Got It From
Here is pointedly political. In We
the People, over a fat synth riff,

Q-Tip raps in the voice of the oppressors: All you black folks, you
must go / All you Mexicans, you
must go... / Muslims and gays, boy,
we hate your ways. He and Phife
Dawg seem to predict the reaction
to the conduct of the press during
the recent presidential campaign:
The fog in the smog of new media
that logs false narratives of guys
that came up against the odds.
Reunions of beloved, long-gone
groups have a way of falling short
of the hype, but that isnt the case
at all with We Got It From

HereThank You 4 Your Service.
Perhaps because it is so fundamental to some of todays best music,
A Tribe Called Quests sound is as
fresh as it was the first time
around. Thus, with this album the
group found a way to return and
also say goodbye with the authority that gave it its exalted status.
Mr. Fusilli is the Journals rock
and pop music critic. Email him at
jfusilli@wsj.com and follow him on
Twitter @wsjrock.
FIVE WORKS TO WATCH

CLAUDE MONET
Prices for this Impressionist

masters Water Lily paintings
have soared above $80 million
lately. Christies expert Brooke
Lampley thinks its time to test
levels for his Grainstack series,
a group of 25 scenes of fields
and haystacks that Monet
painted in 1890-91. Only six
remain outside museum
collections. The record for a
Grainstack is $14 million, set
in 2002. On Wednesday,
Christies will ask $45 million
for this pink-and-purple version.
For more New York auction
offerings this week, go online:
WSJ.com/arts
WILLEM
DE KOONING
Among the 10 works by

this abstract painter up for
sale this week, Untitled
XXV is the biggest one to
watch. Former Georgian
Prime Minister Bidzina Ivanishvili paid Christies $27.1
million for this 1977 painting a decade ago, and later
resold it privately for more.
On Tuesday, Christies will
offer it up once again, this
time for $40 million, a record estimate for the artist.
NJIDEKA AKUNYILI
CROSBY
FROM TOP: CHRISTIES IMAGES LTD (2); SOTHEBYS
The timing of A Tribe Called

Quests reunion for its final album,
We Got It From HereThank You
4 Your Service (Epic), released on
Friday, makes sense. Tribes marriage of hip-hop and jazz, as best
illustrated by its second album,
The Low End Theory (1991),
which featured Ron Carter on bass
and samples of classic jazz masters,
is a major influence on contemporary music as exemplified by Common, Flying Lotus, Kendrick Lamar,
the Roots, Snoop Dogg, Jill Scott,
Kamasi Washington and others. For
hip-hop fans, the return of A Tribe
Called QuestKamaal Ibn John Fareed, known professionally as QTip; Ali Shaheed Muhammad; Malik
Taylor aka Phife Dawg; and Jarobi
Whiteand the arrival of We Got
It From HereThank You 4 Your
Service are cause for celebration.
But the celebration is bittersweet. Phife Dawg died suddenly
in March while the album was being recorded. Thus, as it was with
David Bowies Blackstar and
Leonard Cohens You Want It
Darker, We Got It From Here
takes on a new meaning in the
face of death. Fans who savor the
new album will remember not only
what was and appreciate whats
new, but will also experience the
last of its kind: Q-Tip has said this
will be the groups last album.
Though it toured on occasion in
the intervening years, there was little guarantee that Tribe would record again after its breakup in 1998.
The new album finds Tribe re-entering in stride: Delivered with
savvy patiencethough not without
biteswing and polyrhythmic funk
are at its heart. On The Space Program, the opening track, Mr. White
and Q-Tip trade off spitfire lyrics
that contrast the mellow, quavering
keys beneath them, and Phife Dawg
enters over guitar chords as the
crisp rhythm melts away. Conrad
Tokyo rises from a jazz-funk underpinning that zigs and zags. A
FROM TOP: JARED SISKIN/PMC/GETTY IMAGES; BRIAN ACH/INVISION/ASSOCIATED PRESS (3)
A Tribe Called Quest

Bids Farewell
This Nigerian-born, Los Angeles-based

painter makes her evening-sale debut at
Sothebys on Thursday, a milestone that
could affect her price levels. Ms. Crosby
is known for painting tightly compressed
scenes of family and friends doing everyday things like watching television. Sothebys has an estimate of $200,000 or
more on 2012s Drown, an intimate
double portrait of the artist embracing
her husband.
GERHARD RICHTER
This German painters market remains volatile, with some collectors clamoring for his
rainbow-hued squeegee abstracts from the
1980s, at least below $30 million, the houses
said. This season, Microsoft co-founder Paul
Allen will test demand for Richters figurative
work by asking $25 million for the artists
1963 Dsenjger (which means jetfighter)
at Phillips on Wednesday.
EDVARD MUNCH
In May 2008, collector Larissa Chertok paid Sothebys $30.8 million for the 1902 scene, Girls on
the Bridge. She hopes to sell it at Sothebys for
$50 million, a 62% price bump. Ms. Chertok is
likely to hit her target price since the house extended her a guarantee, but could this cheery
scene soar to Scream levels? Munchs most famous work fetched nearly $120 million in 2012.
K.C.
LIFE & ARTS
NATIONAL GEOGRAPHIC CHANNELS (2)
TURKEY
TELEVISION
Mars: A New Frontier for TV

BY JOHN JURGENSEN
The National Geographic TV series Mars is a joint mission: A
science documentary about the
quest to reach the red planet, combined with a science-fiction drama
about a crew of astronauts who
make it there in the year 2033.
The six-episode series also represents something of a moonshot
for National Geographic. Its the
networks most expensive TV project ever, with a production budget
of up to $20 million. Its Monday
premiere is being used to relaunch
the entire National Geographic
brand, including the 128-year-old
magazine.
For the TV channel, that means
fewer reality shows about rugged
characters and more high-gloss documentaries about science, adventure
and exploration. We are going to
take bigger swings, says Tim Pastore, president of original programming and production, as National
Geographic tries to break out in a
muddy, competitive marketplace.
The channel is part of a joint
venture between the National Geographic Society and 21st Century
Fox. 21st Century Fox and News
Corp, parent company of The Wall
Street Journal, share common
ownership.
With the reality TV boom fading, the buzzword in the industry
is premium nonfiction. Cable
channels are investing in movies
and miniseries with ambitious topics, bigger budgets and A-list filmmakers in hopes of turning documentaries into television events
From top: Scenes from National Geographics new television series, Mars.
that approach the theatrical. Docs
are taking on new luster in the TV
business as streaming video companies pour resources into the format, hunting for binge-worthy stories such as Netflixs true-crime
series, Making a Murderer.
History on Monday is expected
to announce an eight-hour series
produced by Leonardo DiCaprio
called Frontiersmen, about pioneers including Daniel Boone, Tecumseh and Lewis and Clark. A&E
is using the name recognition of
Oscar winner Alex Gibney to promote a new documentary series he
executive produced, The Killing
Season, which investigates an unsolved serial-killer case on Long
Island. Discovery recently aired a
horrormentary directed by Morgan Spurlock called Rats, which
premiered at the Toronto International Film Festival in September.
To create the event-level docs
that networks want, producers are

taking stylistic leaps and breaking the genre in a way you
couldnt do before, says Justin
Wilkes, Mars co-creator and
president of RadicalMedia. The
company produced Mars with
Imagine Entertainment, founded
by Brian Grazer and Ron Howard,
veterans of the Hollywood blockbuster who have recently pushed
into documentaries. The risky dual
format of Mars helped encourage National Geographic to build
its rebranding plan around the series, whose rollout includes two
books, a speakers tour and a curriculum guide for schools.
Mars didnt start out as a
scripted/unscripted hybrid. RadicalMedia initially planned to make
a straightforward documentary
about SpaceX, Elon Musks commercial space company. But Mr.
Musk wanted something bigger,
Weather
which led to the idea of creating a

futuristic story around the drama
inherent to the founders space
plan. As Mr. Musk says in the premiere episode of Mars, either
were going to become a multiplanet speciesor were going to
be stuck on one planet until some
eventual extinction event.
Directed by Everardo Gout,
Mars starts in 2033 with the
launch of a crews historic journey to Earths neighbor via a ship
designed by a space visionary
played by actor Olivier Martinez.
About seven minutes in, the focus
shifts to interviews with real-life
engineers and experts.
It wasnt rocket science, but
marrying two different forms of
filmmaking was a challenge. As
writers invented the fictional story
set in the future, documentary
crews spent months doing research and interviewing SpaceX
and NASA personnel. Transcripts
went to the writers to guide their
drama script and shore up its scientific accuracy. For instance, interviews with engineers working
on the landing system of SpaceXs
reusable rocket inspired a cliffhanger scene in the first episode.
In the editing room came the
trial-and-error process of weaving
the documentary footage into the
drama to ground it in realitybut
without weighing down one side
or the other. After a documentary
crew captured scenes of a headline-grabbing SpaceX maneuver,
the filmmakers restructured the
drama in the last episode around
the footage. Says Mr. Wilkes, That
was season-finale material.
ILLUSTRATIONS BY MIKE SUDAL
Series marks the rise of premium nonfiction and relaunches National Geographic brand
Continued from page A11

ham. Other events include the
preschool classroom celebration for their three-year old son
Everett; Mr. Streebs catered
company party, and the two
official family Thanksgivings:
Ms. Streebs family in Boulder,
Colo., and Mr. Streebs family in
Littleton, Colo.
In recent years, the Boulder
branch of the family has hosted
a Thanksgiving brunchfeaturing cranberry and walnut pancakes and turkey croissant
sandwiches. That
ones my favorite,
says Ms. Streeb.
The arrangement
allows family
members enough
time to visit other
branches of the family
for dinner in the evening.
The average American has at
least two Thanksgiving meals,
according to a Nielsen survey
of 2,000 adults conducted earlier this month. Of those survey
respondents, people ages 18 to
34 say they eat more than four
Thanksgiving meals on average.
And those who celebrate a
friends-only Thanksgiving are
likelier to be more
inventive with the
menu: 39% of
celebrants say
they are likely to
incorporate a
side dish from another culture, compared with 20% of those who
dont celebrate Friendsgiving.
Supermarkets and grocery
stores are getting in on the
multi-meal trend. Online grocer
FreshDirect sees a spike in
smaller bird sales in the week
leading up to Thanksgiving,
which it attributes to the growing friends-only Thanksgiving
phenomenon. This year, it is
pitching the idea of multiple
Thanksgivings to customers
with a Nov. 17 social-media promotion encouraging people to
post real-time
Friendsgiving
dishes on Instagram. In 2015,
20% of prepared
sides intended to
be eaten within a
few days were delivered the week before Thanksgiving, an indication that consumers are enjoying more than
one Thanksgiving meal, says
FreshDirect spokeswoman
Becky Wisdom.
Elana Karp, head chef of
New York-based meal-delivery
service Plated, says it has
moved toward other ways to
celebrate during the week,
than traditional turkey.
An acorn squash with cornbread and sausage stuffing could
work as something to bring to
the in-laws. A Thanksgiving
grilled cheese sandwich with
cranberry could work for a kindergarten classroom celebration.
The WSJ Daily Crossword | Edited by Mike Shenk

Shown are todays noon positions of weather systems and precipitation. Temperature bands are highs for the day.
20s
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U.S. Forecasts
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Portland, Ore.
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Salt Lake City
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Wash., D.C.
International
City
Amsterdam
Athens
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HOCKEY GAMES | By Mae Woodard

Across
1 Truck stop
vehicles
6 Programmers
output
10 Frequently, to
poets
13 Reception desk
worker
14 Homecoming
group, for short
16 For each
17 Hockey score by
an aging
monarch?
19 Sch. fundraiser
sponsor
20 Nintendo
console
21 Bumble Bee
product
22 Forget it!
24 Release into the 47 In the cereal

bloodstream, say
bowl too long,
maybe
26 Jurors take them
48 Like the pig at
27 Like a relaxed
a luau
hockey player?
52
Rich cake
31 Witch trial town
34 Versatile cards in 54 Sunrise direction
blackjack
55 French friend
35 Soaking spot
56 Entertainment
provider for GIs
36 Did some
gardening
57 Shoot to another
hockey player?
37 Theyre cast in
November
60 Road gunk
39 Plateaus cousin
61 Make blank
40 Words with
62 Zellweger of
budget or roll
Bridget Joness
Baby
41 Ready for
streaking
63 Person with a
cover
42 Fresh
64
Place
for a
43 Hockey venues
peephole
doubling as
chapels?
65 Fills completely
Solve this puzzle online and discuss it at WSJ.com/Puzzles.
s...sunny; pc... partly cloudy; c...cloudy; sh...showers;

t...tstorms; r...rain; sf...snow flurries; sn...snow; i...ice
Today
Tomorrow
City
Hi Lo W Hi Lo W
Anchorage
38 30 c
35 23 pc
Atlanta
69 46 s
70 50 s
Austin
78 50 s
80 48 s
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59 41 r
62 36 pc
Boise
64 47 pc 61 39 r
Boston
62 42 s
54 48 r
Burlington
53 36 pc 54 41 r
Charlotte
62 37 pc 67 39 s
Chicago
60 39 pc 59 40 pc
Cleveland
58 38 pc 57 45 pc
Dallas
77 51 s
78 55 s
Denver
70 43 s
76 45 s
Detroit
55 40 pc 57 43 pc
Honolulu
83 73 pc 83 73 pc
Houston
78 56 s
79 53 s
Indianapolis
58 42 pc 61 42 pc
Kansas City
65 40 s
70 44 s
Las Vegas
77 54 s
78 58 s
Little Rock
66 47 s
70 46 s
Los Angeles
86 57 s
80 56 s
Miami
82 67 pc 75 61 sh
Milwaukee
58 42 pc 58 41 c
Minneapolis
53 39 pc 60 36 pc
Nashville
68 44 s
70 44 pc
New Orleans
74 55 s
78 59 s
New York City
61 49 s
54 45 r
Oklahoma City
69 45 s
76 46 s
Tomorrow
Hi Lo W
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www.ebook3000.com
Down
1 Flat-bottomed
boats
2 Pop singer
Goulding
3 Combat doctor
4 Annoy
5 Winter Olympics
group
6 Angels With
Dirty Faces star
7 Gymnast Korbut
8 The Everly
Brothers, e.g.
9 Flows forth
10 Hot and cold,
for example
11 Cheese in a
Greek salad
12 Fairway hazard
15 Energyconserving
mammals
18 Phooey!
23 That lady
25 Marsh plant
26 Formerly
28 Western, in slang
29 Use four-letter
words
30 Online auction
site
31 Hulu choice
32 Top-notch
33 Anchors
top-of-thebroadcast
offering
37 Cutting edge
38 Bacchanalian
revelry
39 Physics quantity
41 Galoot
42 Hockey players,
e.g.
44 Forest female
45 More furious
46 Have a snack
49 Goading remark
50 Pageant host
51 Floodpreventing
embankments
52 Courage
53 Pronto, in
memos
54 Happy
Motoring brand
58 ___ Paulo, Brazil
59 Casserole bit
Previous Puzzles Solution

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The contest answer is MONET. Each of the five

starred entries conceals a number: 40 in
COMFORTYOURSELF, 8 in WEIGHTHE ISSUES,
2 in GOTWORD, 11 in PARALLELEVENTS, and 5 in
IFIVESAIDITONCE. Those five boxes in the grid
spell out contest answer Claude MONET, a fitting
answer since his name conceals the number 1.
* ****
SPORTS
Heard On
The Field
Gender Gap? Try Football

To boost male enrollment on campus, more small colleges are starting new teams.
New Yorks Young Gun

Misfires on First Shot
Since Broadway Joe Namath
last took a snap for the New York
Jets in 1976, the team has been in
search of its next franchise quarterback.
That search is likely to continue.
On Sunday, Bryce Petty became
the 29th player to start at quarterback for the Jets in the last four
decades, according to Stats LLC.
Petty threw his first career
touchdown pass, a 4-yard hook and
lateral to Bilal Powell, but was
largely ineffective in a 9-6 loss to
the Los Angeles Rams.
Petty, filling in for injured starter
Ryan Fitzpatrick, went 19 of 32 for
163 yards with a touchdown and an
interception. The Rams held the
Jets scoreless for the final 42:35 of
the game. Kind of took this one on
the chin, Petty said. Not going to
let this one define my career. Hopefully its the beginning of a long career for me.
With the loss, the Jets fell to
3-7 but it remains unclear who will
start at quarterback for the teams
next game against New England on
Nov. 27. Jets head coach Todd
Bowles referred to the quarterback
position as open.
Across the field on the Rams
sideline, Jared Goff remained a
quarterback in waiting. The No. 1
overall pick in this years draft was
in uniform, but hasnt played a snap
this season.
Watching Petty struggle in his
first career start, perhaps Rams
coach Jeff Fisher felt vindicated in
his decision to continue playing veteran Case Keenum, for now.
Im going to keep saying this
until [Goff] starts his first game,
thats hes improving, Fisher said.
Hes a play away from going into
the game.
The outlook for young quarterbacks wasnt all bleak: Last years
top two picks, Jameis Winston and
Marcus Mariota, each had strong
games in leading their respective
teams to victories.
Jim Chairusmi
CALDWELL, IdahoFive years

ago, the College of Idaho had a problem: enrollment was down and the
gender balance of the 1,000-member
student body was out of whack.
Nearly two thirds of the students on
this manicured residential campus 30
miles outside of Boise were women.
There were like 40 guys, said
Kylie Reagan, who was a sophomore
in 2011. You ended up dating your
best friends ex-boyfriendor you
went to Boise.
The schools unlikely solution? It
started a football team.
It was kind of a relief, said Reagan. One day you look up, and there
were just all these guys everywhere.
After years of dominance on college campuses by men, women
earned parity in numbers during the
1980s. Today, women outnumber men
57%-43%and enjoy higher graduation rates. When the ratio of women
to men tilts past 60-40 at a particular school, applications drop, enrollment officers say.
That makes the competition for
the shrinking pool of college-bound
boys a high-stakes chase, especially
for smaller private schools already favored by girls and facing enrollment
headwinds. For a growing number of
those schools, the answer is football.
Between 2005 and 2015, at least
86 colleges and universities fielded
new football teams. Of that pool, 67
saw an uptick in male enrollment on
the day of their first game, compared
with three years earlier. The average
shift in the gender balance was
nearly nine percentage points per
school, according to a Wall Street
Journal analysis of data from the
NCAA and the federal government.
When we did a market analysis,
we realized this was a gold mine, said
Marvin Henberg, the former College of
Idaho president, who pushed to bring
football back to the school. Three
years after announcing their team, total enrollment was up more than 10%
and the gender disparity was gone.
The turn to football as a savior
comes as the sport faces a huge challenge over head injuries, which are
cutting the number of youth players
in the game and casting a shadow
over the NFL. Still, schools that need
a quick boost of testosterone for their
struggling admissions picture cant
resist the allure of the sport. The
number of NCAA football teams and
players is at an all-time high.
Berry College in Rome, Ga., started
a team in 2013 to address a gender
imbalance that was approaching
70-30.
The students started to say to
me, Dean Heida, if Im going to be
around guys this weekend, Im not
staying at Berry, said Dean of Stu-
TODD MEIER FOR THE WALL STREET JOURNAL
AL BELLO/GETTY IMAGES
BY DOUGLAS BELKIN
The College of Idaho is one of 86 colleges and universities to start new football teams in the past decade.
dents Debbie Heida.
The teams first game drew 6,700
fans and sold out the stadium. The
student body grew to 2,141 from
1,928 three years earlier. Of the 213
additional students, 179 were men.
Mens lacrosse and soccer are both
growing at significant clips, but so
are the womens teams in those
sports so the effect on the gender imbalance isnt as strong.
And while football programs can
lead to losses of tens of millions of
dollars for some major programs,
only 12 of the 86 schools to start
teams in the last decade are at Division I universities.
The rest are at smaller schools
where athletic scholarships are generally small or prohibited and training facilities and stadiums are less
than palatial.
At College of Idaho, the push to
create a football team got off to a
bumpy start. It was twice raisedand
twice shot down before Henberg
started a campaign to persuade faculty it was the answer to the schools
anemic enrollment.
Many on campus worried that the
caricature of a football team populated by meatheads would hurt the
schools self-image as a progressive,
intellectual enclave.
There was a fear that youd have
100 physically imposing guys off to
themselves and theyd get rough,
said Lynda Danielson, a math professor who also attended College of
Idaho as a student. We were afraid
they would upset the balance here.
Henberg encouraged the faculty to
call their counterparts at schools
which had already started programs.
They signed on. The school sunk $6
million into the program, including a
new weight room, and signed an
agreement with the city of Campbell
to rebuild a municipal stadium.
Mike Moroski, a former pro quarterback hired to coach, had no trouble recruiting playerseven though
his scholarship budget was about
$3,500 a player. I told them they
had a chance to build the program
from the ground up, he said
High-school players like Hayden

Paul, who were looking at other small
schools out of state, opted to stay
close to home to play for the only
small college team in Idaho.
I would not be here if they did
not have a football team, said Paul,
a senior who plays center on the
team and will graduate this year.
There isnt a player on the team who
would say otherwise.
The first year, the team drew 65
players and only practiced. The second year, the squad grew to 100 players and by the third they had 115,
with many paying nearly the full
$34,000 cost to attend.
The reality is that football is very
lucrative, said former athletic director Marty Holly.
The Coyotes went 4 and 7 in 2014,
their first season, and sold out the
stadium for most of the home games.
Coach Moroski said he now receives
unsolicited between 2,000 and 3,000
highlight tapes from high-school
football players hoping to catch his
attention.
Continued from page A11

classes. What makes him a star,
however, is his stagecrafthis flash
(he arrived in New York with twin
Rolls-Royces and wore a white Gucci mink to a pre-fight press conference) and the cheeky taunting (he
has fiendishly recast the UFC roster
as a legion of minions there to do
his bidding.) If I wasnt here, this
whole ship goes down, he said earlier in the week.
On Saturday, McGregor was
paired against Eddie Alvarez, a 32year old lightweight champ from
Philadelphia, who, like most of
McGregors prior opponents, spent
the buildup to UFC 205the organization likes to label its fights numerically, like Super Bowls, or
rooms at a Holiday Innducking a
barrage of verbal attacks, as well as
a folding chair McGregor attempted
to swing at the press conference.
A good prizefight usually has a
cockamamie atmosphere like this
boxing is famously a Star Wars bar
of bruisers, yappers, yes men, hangers-on and People Whom Nobody Is
Quite Sure What They Do. There is
some of this in the UFC, but less
sounlike boxing, which is about
as organized a three live chickens
in a shoebox, the UFC has a clear
chain of command. Its leader is
Dana White, a former fighter who
serves as boss, promoter and potstirrer, and has grown the organization by doing one thing relentlessly:
pleasing the audience. Whites
power over the roster gives him the
ADAM HUNGER/REUTERS
The
Cheeky
Champ
McGregor made it look easy on Saturday night, knocking down Eddie Alvarez five times in two rounds.
ability to make fights that fans
want to see, with less of the inertia
and nonsense that have driven boxing into the ground.
White thought he had minted
the UFCs Michael Jordan with the
groundbreaking female fighter
Ronda Rousey, but Rousey lost a
stunner a year ago and hasnt
fought since. In McGregor, White
has a superstar who, like him, cant
sit still, and craves to give the people what they want. Saturday was
McGregors fourth fight in 11
months, which includes a loss and a
revenge win against the fighter
Nate Diaz. McGregors prior three
fights were sensations on Pay-PerView television, and it is assumed
the fourth will be as well; the gate
at the sold-out Garden was $17.7
million, said to be a record.
Today, there are new suits in

UFCs cageover the summer, the
organization was sold for $4 billion
to talent behemoth WME-IMG,
which is trying to inject sizzle into
the operation, adding celebrity investors like Conan OBrien, Ben Affleck and Venus and Serena Williams. A new network television
contract is coming down the road,
with expectations for a substantial
bump in payment. Meanwhile,
Rousey will make her much-anticipated return at UFC 207 in Las Vegas on Dec. 30.
But this is McGregors world for
now. After a lengthy undercard,
McGregor and Alvarez squared off
in the octagon at 1:20 a.m. (I know
it is a global sport, but the UFC
needs to do something about these
starts, 1:20 a.m. is ridiculous.)
McGregor went to work deliberately, but quickly, knocking Alvarez

down three times in the five-minute
opening round. He finished it in the
second with a four-strike combination that sent Alvarez down for the
fifth and final time.
After a pair of bloody battles
with Diaz, this one looked easy.
McGregor said the Alvarez fight felt
familiar, as if it had gone exactly
as hed wanted. In the cage he made
a stink about there not being two
title belts to celebrate withthe
UFC scrambled to locate another
backstage, borrowing one from welterweight champion Tyron Woodleybut later on, as 3 a.m. arrived,
he sounded more contemplative
than insolent. McGregor announced
he and his girlfriend, Dee Devlin,
were expecting a child.
Im crapping my jocks, he said

of fatherhood. Im not going to lie.
McGregor was asked when the
baby was due.
March, he thought.
May, Devlin corrected him.
McGregor smiled. He could still
bring that cheeky swaggerhe
went on about the fresh celebrity
investors like Conan OBrien, and
demanded the UFCs new owners
break off a piece of equity for him.
Wheres my share? McGregor
said. He was noncommittal about
when he would fight next, or
against whom. He raved about the
fans in the Garden, and the pricey
shopping around town. But
McGregor didnt have much more to
say about his moment at the UFCs
debut in New York City. He didnt
need to. Hed already said it all.
OPINION
Among the Trump Protesters
By Adam ONeal
housands of anti-Trump
protesters marched up
New Yorks Fifth Avenue
on Saturday afternoon, completing a two-mile journey
from Union Square to Trump
Tower. The march followed
days of similar rallies in Los
Angeles, Portland, Chicago
and elsewhere. Donald Trump
has tweeted that he loves the
demonstrators passion, while
accusing many of being professional protesters.
But why protest at all, given
the unambiguous results of
Tuesdays election? The demonstrators signs offered a few
clues. The F word was everpresent: as in F---take your
pickTrump, Giuliani, the police, family values, that guy,
the electoral system, Newt, Arpaio, Trumps Amerikkka, and
even you. One woman carried a sign pledging that she
would pay taxes only when Mr.
Trump does. Other placards
derided Adolf Trump and the
new groper in chief, warning
tiny hands off.
Enlightened college students carried apologetic messages: Sorry for the inconvenience, were trying to change
the world or Im sorry my
country is racist. And Not
my president, was a fan favorite, though many went
with Never my president.
Other slogans didnt really
add up, such as You cant
drink oil or one calling for
Vice President-elect Mike
Pence to be thrown over a
fence.
It was difficult to find a
unifying theme, since there
was something for almost everybody: POWs are heroes,

Black Lives Matter, Family
MDs for ObamaCare, Steve
Bannon must go.
The crowds chants were
equally confused. Many simply
expressed strong disagreement with Mr. Trumps policy
pronouncements and personal
style. Say it loud / Say it
clear / Refugees are welcome
here, they shouted. Men declared, Your body, your
choice, and women responded, My body, my
Why hit the streets?

To dismantle the
Electoral College
but mostly to yell.
choice. The policy-oriented
crowd wasnt entirely humorless: Hands too small. He
cant build a wall.
Flagsrainbow, Puerto Rican, anarchist, Socialist Alternative, Mexican, U.S. (sometimes desecrated, sometimes
not)were all present. But
what unified banner were the
protesters marching under?
It wasnt a rally in support
of Mrs. Clinton. Yes, her supporters made their presence
known by holding up #ImStillWithHer signs. Referencing Mr. Trumps nasty
woman insult at the third
presidential debate, many
women affirmed that We are
nasty, yes we are. They also
chanted Were with her,
though that one died down
quickly.
Any criticism of Mrs. Clintons role in losing to Mr.

Trump was absent. The crowd
was happy to chant, rather
than ponder how Mrs. Clinton
cleared the field in her primary or why the Democrats
lost to one of the most disliked presidential candidates
in U.S. history.
It slowly dawned on me
that this protest wasnt
much more than a collection
of angry people. A graying
radical with an SDS button
chatted up younger revolutionaries. A man wearing a
Planned Parenthood button
pushed children in a stroller.
Teenage girls stopped to take
selfies, while members of the
Revolutionary Communist
Party handed out fliers. A
group of middle-aged women
warned me to enjoy my freedoms as a journalist while I
still could.
With such disparate messages, the march seemed to
function mainly as a primal
scream. The protesters I spoke
with agreed. Claire Beach, a 23year-old building-code consultant, told me, Its just like a cathartic thing. . . . The one thing
you can do is protest.
A recurring theme: The
protest was more about the
protesters (or people they say
they speak for) than any big
idea. Ms. Beach admitted, I
dont have a lot of hope of it
changing much, but I think itd
be sad to have this happen
and not be someone who came
out and supported it.
The only policy that appeared to have uniform support was abolishing the Electoral College. We got the
popular vote was a common

chant, and the until-recently
arcane rules were derided on
signs. Yet everyone I spoke
with recognized that it isnt
going away.
Eduardo Esteva, a 21-yearold New York University student, expressed his frustration
with the system. It gave us
Bush. It gave us Trump. But
Mr. Esteva acknowledged that
any concrete change was
most likely not going to
happen because of the demonstrations, no matter how big
they grew to be.
Tens of millions of Americans are unhappy with the
elections outcome, and many
have legitimate concerns
about the tenor of Mr.
Trumps campaign. But catharsis doesnt build movements. It only entertains tourists and attracts reporters.
Where do these protests go
from here? Theyll likely continue for some timepeople
really are angryand Mr.
Trumps January inauguration
wont be pretty. But its hard
to see them doing anything
other than burning out. The
election for Democratic National Committee chairman
will tell you much more about
the future of Mr. Trumps opposition than any protest.
But maybe it isnt all hopeless. As one protester confided
to a friend, At least I can still
be the first female president.
Mr. ONeal is an assistant
editorial features editor at the
Journal.
L. Gordon Crovitz is away.
Santos Panics With the Election of Trump

D o n a l d
Trumps trade
agenda is extremely worrying to Latin
America. But
AMERICAS on issues of
regional secuBy Mary
rity the ReAnastasia
publican presOGrady
ident-elects
approach is
likely to be a welcome change
for democratic forces in the
hemisphere.
That hypothesis gained currency on Saturday night when
Colombian President Juan Manuel Santos appeared on television to tell his compatriots
that his government and the
Revolutionary Armed Forces of
Colombia (FARC) have agreed
on an amended version of their
peace deal. Mr. Santos promised that the new text would
address many of the objections
that Colombians had with the
original version, which the nation rejected in an Oct. 2 plebiscite.
This is a man in a hurry.
That it took his government, as
he acknowledged in his speech,
six years of negotiations to
make the deal that Colombians
said no to and only six weeks
to make it palatable to the nation stretches credulity. Even
Mr. Santos doesnt appear to
believe it, which would explain
why he now seems to have
abandoned his pledge that no
deal will be completed without
national approval at the ballot
box in a fair contest. The BBC
reported on Saturday night
that Mr. Santos would only go

to Congress (which he controls)
to make it law.
Mr. Santos told the nation
that completing his agreement
is urgent. But his Saturday
night speech, when few Colombians would have been tuned
in, suggests that he is no longer trying to convince his own
people. He appears to be betting on international backing
to salvage his agenda. For that
he needs to seal it before Barack Obama leaves office.
He needs backing from
someone. On Wednesday the
former head of criminal investigations in Colombia gave credible testimony to the Supreme
Court that he was part of a 2014
Santos re-election campaign effort to smear opposition candidate scar Ivn Zuluaga with allegations of illegal wiretapping,
in a tight race that Mr. Zuluaga
lost. The investigators claim
rocked the nation and it casts
doubt on the legitimacy of Mr.
Santoss second term.
Mr. Santos has relied heavily on Mr. Obama to advance
his peace agenda. That support has not been limited to
the U.S. presidents decision to
send an envoy to sit at the negotiating table in Havana. In
the U.S. extradition case of
former Colombian Agriculture
Minister Andrs Felipe Arias,
who will have a hearing in the
Southern District of Florida
federal court on Thursday, the
Obama Justice Department is
invoking a treaty that does
not existin an attempt to
help Mr. Santos put a political
enemy behind bars. Its hard

to imagine a Trump government doing the same sort of
favor for Mr. Santos.
Mr. Arias was a leading candidate to succeed President lvaro Uribe in 2010 until murky
allegations linking him to a
corruption scheme surfaced
mysteriously in the Colombian
press. As I wrote in a September column, he was later convicted by Colombias Supreme
Court of benefiting a third
party illegally, despite zero evidence that he knew about any
scam or enriched or benefited
himself or his family.
The Colombian
presidents deal with
FARC terrorists, six
years in the making,
is fixed in six weeks.
This crime in Colombia
does not exist in U.S. law. A
key witness also admitted during the trial that the whole
thing had been a set up to
destroy Mr. Ariass political
career. Mr. Arias had only one
shot to prove his innocence at
the high court. There is no appeal process. So he fled to the
U.S. in June 2014 and applied
for asylum.
On Aug. 24 U.S. federal
marshals took him into custody on Mr. Santoss extradition request. The timing of the
Miami arrestthe same day
Mr. Santos announced his deal
in Havana, backed by Ral

Castro and Mr. Obama
seemed an unlikely coincidence given that the Santos
government had asked for the
extradition two years earlier.
Colombians read it as a
message to Mr. Uribe, who remains close to his young protg and who was leading the
opposition to the FARC agreement. It would have been a
step too far for Mr. Santos to
arrest Mr. Uribe. But the U.S.
arrest of Mr. Arias was a blow
to the uribistas.
The Justice Department argues that Mr. Arias has to be
returned pursuant to an extradition treaty with Colombia.
Yet the Colombian Supreme
Court has twice ruled that the
treaty, calling for reciprocity,
is not in effect because it was
never properly ratified. Colombias foreign ministry does not
recognize it and Mr. Santos
has stated that he has no obligation to satisfy U.S. extradition requests. Mr. Uribe has
filed a statement with the federal court in Miami saying that
there is no treaty.
The persecution of Mr.
Arias, with the help of Mr.
Obama, is the kind of dirty
trick that has made Mr. Santos
unpopular and distrusted at
home. Even he doesnt seem to
think he can recover. Mr. Santoss bet is on international
support, which is why he is
trying to push through his deal
while he and the Castro brothers still have backing for it in
Washington.
Write to OGrady@wsj.com.
Keep Killer Cellphones Off the Road

By Scott Griffith
or too many people,

looking at a smartphone
screen while driving is
the new normal. According to
an AAA survey this year, 42%
report reading a text or email
behind the wheel, while a 2015
survey conducted by Harris
Poll found 30% of drivers admit to texting while driving.
Drivers like these are killing
and maiming more people every day on the roads.
Today cars are safer than
ever, drivers education is
widespread, and millions of
dollars are spent on safe-driving public service announcements like AT&Ts It Can
Wait campaign.
But road safety has taken a
turn for the worse, according to
statistics compiled by the National Highway Traffic Safety
Administration (NHTSA). In
2015, 35,000 people were killed
and more than 2.4 million were
injured on U.S. highways. The
increase in the fatality rate,
7.2% over 2014, is the largest

percentage increase in nearly
50 years and stops a 10-year
trend of declining fatalities.
NHTSA has called surging
auto fatalities an immediate
crisis based on its data that
showed 17,775 deaths in the
first six months of 2016, up
10.4% from last year, and about
16% higher than at the sixmonth mark in 2014. Following
this trend, if today is an average day, 100 people will die on
U.S. roads.
At least one-fifth of those
accidents will likely be related
to distracted driving. The same
thing will happen tomorrow,
and the next day. If this many
people were injured and killed
every day by some other
means, experts would call that
an epidemic. Why not this
time?
According to a recent
NHTSA survey, 20 percent of
drivers age 18-20 said texting
does not affect their driving,
and nearly 30 percent of drivers ages 21-34 said texting has
no impact. This is similar to

how people thought about driving under the influence of alcohol before law enforcement
started paying attention to the
data and acted by raising the
drinking age, establishing a
standard Blood Alcohol Limit
(BAC) and creating license
Cars are safer than

ever, yet traffic
fatalities are up. Is
texting to blame?
revocation laws and ignition interlock laws. Since 1982,
drunken driving fatalities are
down 52% overall, and 79% for
drivers under age 21, according
to the Foundation for Advancing Alcohol Responsibility.
There is no easy or obvious
way to stop drivers from being
distracted by their cellphones.
Overcoming this epidemic will
require an aggressive, coordi-
nated and systematic approach. It will have to involve

many groups and companies
from wireless carriers, to
smartphone manufacturers,
auto insurers, policy makers
and transportation agencies.
But states are making progress. A total of 46 states and
Washington, D.C., have passed
laws that ban texting, while 14
states have banned handheld
phone use. Law enforcement is
also more frequently investigating and reporting distraction as a cause of accidents.
Yet for now it comes down
to individuals choosing to turn
off cellphones or make them
inaccessible while driving. The
choice to put phones away
may also be a choice to keep
other people on the road alive.
Mr. Griffith is the former
chairman and CEO of Zipcar.
He is co-founder and chairman
of TrueMotion, whose driversafety app and data science algorithms helps prevent distracted driving.
www.ebook3000.com
BOOKSHELF | By Ebrahim Moosa
Imagining a Good
Islamic State
Caliphate: The History of an Idea
By Hugh Kennedy
(Basic, 309 pages, $27.99)
n 2013, when the Egyptian military toppled president

Mohammed Morsi, the countrys two most famous theologians offered starkly contrasting views of the shakeup. Ali Gomaa, formerly Egypts highest religious official,
claimed that since Mr. Morsi no longer had power, he was
no longer legitimate. Yusuf al-Qaradawi, a Qatar-based
sheik with a global public following, retorted that the military had committed rebellion, a grievous sin in Islam. But
the theologians were in total agreement about one thing:
Mr. Morsi was an imma key term in the language of
political Islam and often a synonym for an even more
weighty word, caliph.
The doctrine of the caliphate still animates the imagination of Muslim theologians,
politicians and ideologues, as
Hugh Kennedy shows powerfully in Caliphate: The History of an Idea. Since the
declaration of a caliphate by
Islamic State in June 2014,
most rightly hear that word
and shudder. Mr. Kennedy, the
author of many books of medieval political history, makes the
intriguing argument that while
it can be used and twisted by
groups like ISIS for sinister, brutal ends, the idea of caliphate is
not in itself dangerous or threatening. He writes: We need not be
afraid of it, even if we are fearful of how some
have chosen to interpret it.
Mr. Kennedys reasoning begins with the Quran itself. In
a generic sense, all human beings are Gods caliphs, an
idea he roots in verse 2:28 when God tells the angels: I am
placing a caliph on earth. The word caliph is ambiguous
and can also mean successor, yet early Muslim theologians
swiftly concluded that an eternal God cannot have a successor. Mr. Kennedy, a scholar fluent in Arabic sources,
suggests that the verse means that all of Adams progeny
will serve as Gods moral deputiescaliphson earth.
But many men throughout history thought otherwise.
And the focus of this book is those figures who became political caliphsrulers who claimed that they had the authority of God and his Prophet Muhammad. Think of Peter
as the successor of Christ, or how medieval Christian kings
and emperors ruled in the name of God.
The book describes the leadership style of the early caliphs, namely the Prophet Muhammads earliest companions, as humble, lacking ostentation and formed around a
network of alliances. But that shifted beginning with the
imperial reign of the seventh-century Umayyad dynasty out
of Damascus. The Umayyad caliph Muwiya introduced certain rituals of inauguration and pageantry, especially the
public oath of allegiance to the ruler, called the baya. In
the mid-eighth century, the empire of the Abbasids was
centered in Baghdad (749-1258) and later in Cairo
(1261-1517). Despite the intermittent fragmentation of Abbasid rule, it boasted a knowledge-based economy, an educated and efficient bureaucracy, and the florescence of science and culture.
While the idea of a caliphate is used and twisted

by Islamists for sinister and brutal ends, the
concept is not in itself threatening or dangerous.
In successive chapters, Mr. Kennedy narrates the history
of these caliphates, along with the Almohads (1130-1269),
Mamluks (c. 1250-1517), and a detailed account of the most
prominent of Shiite caliphates, the Fatimids (909-1171), who
ruled Egypt and parts of North Africa for centuries until
Saladin, a Kurdish military figure and later sultan, ousted
them. His story ends with the abolition of the Ottoman caliphate in 1924 by Mustafa Kemal Ataturk of Turkey.
Mr. Kennedy draws on dynastic histories and a variety of
historical records and documents to make these once magnificent empires and their impressive accomplishments in
science, medicine and technology, as well as literary and
cultural endeavors, come to life. Already by the eighth century, from Portugal to Central Asia, Mr. Kennedy reports,
people used coins which proclaimed an Islamic state. By
the middle of the ninth century, when the Abbasids came to
power, Baghdad had a population of nearly 500,000making it possibly the most populous city on the planet at the
time. As a city, in the authors words, it was a Middle Eastern Venice. Among the institutions the Abbasids fostered
was a network of colleges to train scholars and bureaucrats,
as well as the House of Wisdom, a library that literary figures and intellectuals could frequent, like European salons
during the Enlightenment. The Abbasids will be remembered for the translation movement they financed, especially the work of Hunayn ibn Ishaq, a talented Christian
who rendered texts from Syriac and Greek into the new lingua franca, Arabic.
None of these civilizational developments could have
materialized, Mr. Kennedy asserts, were it not for the caliphate. The caliphate provided the political stability and resources that made such grand achievements possible.
Few in Britain today, Mr. Kennedy points out, look back
to the ninth century Anglo-Saxon Chronicle to justify their
politics. But Messrs. Morsi, al-Qaradawi and Gomaa, among
many others throughout the Muslim world, draw heavily on
ancient texts and concepts to validate their political conduct. It is no coincidence that Islamic State adopted the
black dress of the Abbasids and has turned Raqqa, the second capital of the most celebrated of the Abbasid caliphs,
Harun al-Rashid, into its capital today. And recall that when
more than 100 prominent Muslim religious leaders recently
rebuked Islamic State leader Abu Bakr al-Baghdadi in an
open letter for proclaiming the title of caliph, they did not
say the concept of a caliphate was no longer viable. Theirs
was a qualified view: It was forbidden, they wrote, to proclaim a caliphate without the consent of all Muslims.
In order to grasp recent developments in the Middle East
and Muslim South Asia and Africalet alone to try to remake the regions politicsyou would be a fool to ignore
this history of the caliphate. In Mr. Kennedys optimistic
view the best thing about the caliphate is that it is a living
idea that may yet still serve as a model for good governance.
Mr. Moosa is a professor of Islamic Studies in the Keough
School of Global Affairs at the University of Notre Dame.
OPINION
REVIEW & OUTLOOK
LETTERS TO THE EDITOR
Trumps Dueling White House Heads
Moral Frames Make Political Comity Harder
onald Trumps success as President will Obama family friend Valerie Jarrett.
depend on whether he can merge his
Mr. Trump has sometimes set up competing
populist instincts with the reform forces within the Trump Organization, as he did
agenda of Republicans in Conwith his Atlantic City casinos.
Priebus and Bannon
gress to form a united and efThis arrangement can succeed
fective government. His
Messrs. Priebus and Bannon
will be equal partners. ifdivide
choices for his most senior
responsibilities cooperThis will be interesting. atively, but it will lead to a
White House aides suggest
those two tendencies will commess of leaking dysfunction if
pete in his Administration the
they divide into competing
way they did during the campaign.
factions. Someone will have to be the final word
Mr. Trump offered something for both camps on who gets to see the President and which isSunday with his announcement that Reince sues require a presidential decision.
Priebus will be his chief of staff while Stephen
The two men certainly come with different
Bannon will be chief strategist and senior coun- instincts and constituencies. Mr. Priebus is an
selor. Mr. Priebus is the head of the Republican establishment operative who built the WisconNational Committee who stuck with Mr. Trump sin GOP into one of the countrys most effective
despite the many valleys of the campaign and state parties. He has close ties to House
provided the get-out-the-vote operation that Speaker Paul Ryan and Republicans across the
Mr. Trump lacked. Mr. Bannon is a former Gold- country. He brings knowledge about how Washman Sachs banker, Naval officer and Breitbart ington works that is essential if Mr. Trump is
News executive who joined the campaign with going to move fast to take advantage of whatKellyanne Conway in August amid one of those ever honeymoon he will get.
valleys.
Mr. Bannon represents the insurgent forces
Its hard to know whether this is will be a that helped propel Mr. Trump to the GOP nomisublime union of yin and yang or Survivor: nation. His Breitbart website essentially beTrump White House. Typically the chief of came an arm of the Trump campaign and tarstaff runs the White House and is the Presi- geted other Republicans for attack, often
dents most trusted adviser. But its notable inventing facts along the way. Mr. Ryan has
that the announcement from the Trump transi- been a frequent target. The sites main policy
tion established no clear hierarchy between the preoccupations are hostility to trade and immitwo men. The transition statement said that gration, views that Mr. Bannon will presumably
Bannon and Priebus will continue the effective bring to White House debates.
leadership team they formed during the camA Washington clich is that personnel is polpaign, working as equal partners to transform icy, and that may be more true for Mr. Trump
the federal government, making it much more than for most Presidents because his campaign
efficient, effective and productive.
agenda was relatively general and narrow. Mr.
Equal partners? Rarely does any organiza- Trump assured Americans that he could run
tion run well if there are dueling heads, and one the government because he had succeeded in
reason the Obama Presidency suffered is that business, and voters gave him the benefit of the
his early chiefs of staff were undermined by the doubt. Well see how these competing White
competing influence of White House aide and House forces shake out.
Ending Aid to Terrorists
n his eulogy recently for Israeli statesman Mr. Graham (R., S.C.) says. Were not going to
Shimon Peres, President Obama spoke of the invest in a group of people that have laws like
unfinished business of Israeli-Palestinian this. Its just not a good investment. The same
peace. Now he or Donald
Palestinian laws guarantee
Palestinian law rewards civil-service employment to
Trump have an opportunity to
advance the causeby backing
terrorists upon their release
those who kill Jews,
legislation to stop the flow of
from prisonthe bloodier their
including Americans. crime, the cushier their post.If
U.S. tax dollars to Palestinian
terrorists.
youre in jail for five to six
Since the 1990s, as the U.S.
years, you come out with the ciand other countries have sent billions of dollars vilian rank of department head or lieutenant in
in aid to the Palestinians, Palestinian leaders have their security forces, you get to choose. If youre
paid hundreds of millions of dollars in rewards in jail 25 to 30 years, you become a deputy ministo those who carry out bombings, stabbings and ter or a major general, Mr. Graham adds.
other attacks in Israel. These payments, codified
Mr. Coats (R., Ind.) notes that Congress tried
in Palestinian law, are an official incentive pro- to stop subsidizing terror payments in 2014, but
gram for murder that in any other context would Palestinian leaders dodged that law with a shell
be recognized as state sponsorship of terror. But game that passed payments through the Palesthe U.S. and other Western states have looked the tine Liberation Organization, which technically
other way while continuing to send aid, giving isnt a recipient of U.S. aid. When lawmakers
Palestinian leaders no incentive to stop.
raised this with the State Department they got
Senators Lindsey Graham, Dan Coats and Roy only a tepid response, says Mr. Coats. One
Blunt have introduced a bill to end U.S. economic State Department report praised the payments
aid unless Palestinian leaders stop rewarding ter- as an effort to reintegrate released prisoners
rorists. Its called the Taylor Force Act, after the into society.
28-year-old U.S. Army veteran stabbed to death
The truth is these payments are blood-soaked
in March by a Palestinian in the Israeli city of gifts from a Palestinian leadership still devoted
Jaffa. Other American victims of recent Palestin- more to destroying Israel than to building a Palian terrorism include 13-year-old Hallel Yaffa Ar- estinian state. This has always been the chief imiel and 18-year-old Ezra Schwartz.
pediment to peace. Mr. Obama is unlikely to act
They will never achieve peace when you pay in his final days, but the Trump Administration
one of your young men to kill someone like Taylor and new Congress could send a powerful mesForce. Thats inconsistent and it needs to stop, sage by passing the Taylor Force Act.
Harry Reid and the Horse He Rode In On
arry Reid has done as much as anyone ing all he has done to help them. By killing the
to pave the way for Donald Trumps filibuster for nominees, he has made it easier
victory by promoting Washington dys- for Mr. Trump to get his nominees confirmed
function, so its no surprise
and fill Antonin Scalias seat
that he has reacted to the elec- Trump should revive the on the Supreme Court. By
tion result by proving the
stretching the rules for budget
nuclear repository at
point one more time.
reconciliation, he has set a
Yucca Mt. in Nevada. precedent for Republicans to
The
soon-to-be-former
Democratic Senate leader isrepeal much of ObamaCare by
sued a statement Friday that
ducking a filibuster.
showed his contempt for anyone who voted for
And by blocking vote after vote as Senate
Mr. Trump. I have personally been on the bal- Majority Leader, Mr. Reid made it impossible
lot in Nevada for 26 elections and I have never for Democrats in swing states to differentiate
seen anything like the reaction to the election themselves from President Obama and paved
completed last Tuesday. The election of Donald the way for a GOP Senate in 2014. A Republican
Trump has emboldened the forces of hate and Congress can now go far to repealing much of
bigotry in America, he said.
Mr. Obamas legacy.
White nationalists, Vladimir Putin and ISIS
Oh, and we hope the Trump Administration
are celebrating Donald Trumps victory, while in- takes another look at the nuclear-waste reposinocent, law-abiding Americans are wracked with tory at Yucca Mountain in Nevada. In an underfearespecially African Americans, Hispanic reported political bargain, Mr. Reid promised
Americans, Muslim Americans, LGBT Americans Mr. Obama that he would do the Presidents
and Asian Americans. Watching white national- dirty work on Capitol Hill if the President
ists celebrate while innocent Americans cry blocked the Yucca project. Mr. Obama named
tears of fear does not feel like America.
Reid aide Gregory Jaczko as chairman of the
Crazy Harry went downhill from there, and Nuclear Regulatory Commission in 2009, and
Democratic Senator Joe Manchin of West Vir- a year later Mr. Jaczko shut it down.
ginia was appalled enough to issue a public reMr. Jaczko later resigned after the four other
buke: Senator Harry Reids statement today commissioners, Democrat and Republican, deattacking President-elect Trump is wrong! It is nounced his abusive management style. A pair
an absolute embarrassment to the Senate as an of D.C. Circuit Court of Appeals rulings have
institution, our Democratic party, and the na- since rebuked the Administration for violating
tion. I want to be very clear, he does not speak the law in relation to Yucca, and in 2014 a govfor me.
ernment study found that the Yucca design for
As difficult as it is for anyone to lose an waste is environmentally safe. The U.S. still
election, the American people have spoken and needs a solution for nuclear waste that is piling
Donald Trump is our President-elect. Senator up at sites around the country.
Reids words needlessly feed the very divisiveMr. Trump owes no political debt to Nevada,
ness that is tearing this country apart. Now, which due to Mr. Reids efforts voted last week
more than ever, it is time for us all to come to- for Hillary Clinton and defeated the GOPs Senate
gether as Americans.
candidate. Reviving Yucca would be a sign the
Mr. Reid will be gone with the current Con- Senate is moving past Mr. Reids era of dishonest
gress but Republicans may miss him consider- political manipulation and partisan rancor.
In an otherwise optimistic review

of Americas history of resilience in
the aftermath of poor presidential
candidates and irreconcilable national
differences, Joseph Ragos History
Repeats Itself as Farce, Then as 2016
(op-ed, Nov. 5) cites George Nashs
worry that this years election is being
litigated over cultural and social disputes that are beyond pragmatic political accommodation. In fact, most political disputes in 2016 over culture,
governance, economics and foreign
policy are framed in moral terms that
dont lend themselves to win-win or
common-ground resolutions. It is not
possible to spare the life of half of an
unborn baby, give transgender Americans access to half the bathrooms of
their choice, etc. If states had not lost
so much ground in their balance-ofpower struggle with Washington,
there might be more opportunity for
compromise. But courts and federal
funding deals with states put Washington in the catbird seat.
Our problems and divisions in 2016
have roots in election traumas of decades ago. Our fiscal problems, for example, trace back to New Deal programs that threaten to bankrupt us 21
presidential elections later. The 1960s
counterculture revolution (a dozen
elections ago) is bearing fruit today.
Moral issues of 2016 echo 1960s culture-war themes: civil rights, anti-war
activism, gay liberation, feminism, the
sexual revolution, environmentalism,
class warfare and urban unrest. For
the most part, post-1964 election morality is now the norm.
Pray that the lefts plan to change
our traditions and our history doesnt
preclude history from repeating its

postelection recovery from trauma,
farce or indignity.
PAUL BRYAN
Tarpon Springs, Fla.
Mr. Rago cites Amity Shlaes who
says, We live in Lyndon Johnsons
America, a fact that makes comparisons with past presidents almost
meaningless. Our post-1965 culture is
dramatically different from what went
before. We now value diversity over
assimilation, groups over individualism, political correctness over freedom of speech, security over liberty,
big government over the Constitution,
etc. Americans today oppose the use
of military force, preferring drone
strikes and elite units regardless of
their effectiveness.
This all started in the 1960s when
the baby boomers took over from the
Greatest Generation and feeling
good became the dominant measure
of life. Forget social mores, discipline,
morality: Just do whatever feels good.
Fifty years later, our universities prohibit speech that might offend.
America no longer resembles the
times that Mr. Ragos experts describe.
Rather, late republican Rome provides
a more valid comparison. The presidential election result has shown us
that the politically correct culture we
see all across the media is not the culture of most of the nation, and Donald
Trumps election offers an opportunity
to redirect the nation along more traditional lines, which the election has
shown most Americans want.
LT. COL. FRITZ MEHRTENS, USA (RET.)
Irvine, Calif.
Optimism About Pessimistic Economic Views

In Dont Believe the Economic
Pessimists (op-ed, Nov. 7), John Cochrane rightly laments the slow
growth the U.S. economy has endured
in recent years, but he recommends
freer trade (among other things) for
better performance. He states: Trying to impoverish China will not revive America. While it is true that
poverty in China is certainly undesirable and will not help the U.S., more
trade with China and other low-wage
countries likely slows growth in
America.
Faster growth, to be sustainable,
usually requires greater business
spending on capital, such as new
equipment, technology, facilities, etc.
Better and more plentiful capital does
increase growth and productivity.
However, when firms can access
cheap labor abroad, they have less incentive to cut costs by investing in
new capital assets and instead hire
lower-wage workers. Conversely, in
the 19th century, scarce workers and
high wages in the U.S. compared with
Europe may well have led to greater
investment in labor-saving technology
and faster growth in the U.S.
Since granting China permanent
normal trade relations in 2001, U.S.
investment in capital as a share of
GDP has fallen, and slow productivity
and output growth have become
chronic problems for the U.S.
There are certainly other factors
Voting Lines for Democrats,

Republicans and Selfies?
Regarding Stephen Klein and Patrick Jaicomos We Hold These Truths
to Be Selfie-Evident (op-ed, Nov. 7)
on the right to post a selfie taken in
the voting booth: I believe they are
right that this is free speech. However,
I believe that the states have a right
to restrict this behavior for other reasons. Waiting in line to vote takes
long enough without having to wait
while everyone in front of you takes a
selfie. Lets see, you take the picture
and then check to make sure it is good
enough to post. Oh wait, then you
think you need to take another.
I would agree that you should have
the right to post a picture of your ballotfor anyone who is bold enough to
admit for whom they voted.
BILL WRIGHT
Grandville, Mich.
President Obamas Legacy:

A More Positive Appraisal
Regarding your editorial Obamas
Fiscal Legacy (Nov. 9): The real
Obama legacy is a Republican president, Republicans controlling the Senate and House and Republican control
of at least 31 state houses. A large
majority of governors are Republicans, and Republicans control the majority of county and city governments.
Finally, I can say something positive about President Obama.
JOHN HOWES
Ormond Beach, Fla.
Letters intended for publication should
be addressed to: The Editor, 1211 Avenue
of the Americas, New York, NY 10036,
or emailed to wsj.ltrs@wsj.com. Please
include your city and state. All letters
are subject to editing, and unpublished
letters can be neither acknowledged nor
returned.
that affect growth. But if the ability

to avoid paying U.S. workers high
wages were the path to prosperity, we
should have observed slow growth in
the three decades after World War II,
and much faster growth in the last 15
years. We have observed the opposite.
WILLIAM MILES
Wichita State University
Wichita, Kan.
An insidious problem with our tax
policy is that taxes are often collected
at the wrong level of government. Tax
collected by the feds and sent to the
states is seen there as free money.
Similarly, state tax receipts are sent
to municipalities and viewed by them
as free money. When money is considered free, it is spent without regard to
efficacy, often on projects that would
never be approved by local voters
spending what they see as their own
money. Of course this process is difficult to reform because the upper level
employs these gifts to buy influence
at the lower level.
The result isnt only a waste of
money but a loss of confidence in a
government thats funding bridges to
nowhere.
HERMANN VIETS
Wickford, R.I.
I completely agree with Mr. Cochrane that we shouldnt believe the
economic pessimists. The pessimists
are way too optimistic.
STEPHEN R. MEYER
Vero Beach, Fla.
George Caleb Bingham and

Irony of Managing Rivers
John Wilmerdings Painting a Political Protest (Masterpiece, Nov. 5)
about politician and painter George
Caleb Bingham is particularly interesting as is how his artistry complemented his Whig political views
about Henry Clays American System that supported internal improvements, including river improvements. The last paragraph alludes to
the irony of the grounded steamboat
as a metaphor for the disabled ship of
state and the 1978 placement of the
picture at the Carter White House.
The irony is more than double: Jimmy
Carter was the last president to veto
a public-works appropriation bill that
included funds for river and harbor
improvements in that very same year.
DAVID R. OLSON
Springfield, Ill.
Pepper ...
And Salt
THE WALL STREET JOURNAL
Is it just me or have these

numbers lost their crunchiness?
OPINION
By Tevi Troy
And Lanhee J. Chen
hen the new Congress

and President-elect
Trump take office in
January, Republicans
will have a real
chance to repeal President Obamas
Affordable Care Act. If they succeed,
it will be the result of their carefully
executed strategy to repeal the law
and repeated congressional votes to
do so. This approach was the subject of much derision from Democrats, but sticking to it has now put
the Republicans in a position where
they can reach their goal.
When Republicans won the House
of Representatives in 2010, they immediately began repeal efforts.
The House kept the

health-care law on the
policy agenda by passing
more than 50 repeal bills.
Since January 2011 the House has
passed more than 50 bills that
would repeal all or some of the Affordable Care Act. House Republicans knew that repeal had no
chance of passing a Democratic Senate, but the votes placed a marker
showing that a duly elected arm of
the U.S. government opposed the
law and was willing to take steps to
repeal it.
Democrats and liberal pundits
were merciless in their critique of
Republican efforts. As comedian
Bill Maher put it, The Republicans

in Congress voted to repeal
ObamaCare for a 40th time today.
Its really now less a governing
philosophy, and its more like Charlie Manson applying for parole.
After Republicans won the Senate
in 2014, the upper chamber worked
with the House to repeal core provisions of ObamaCare via the budget
process. This legislation reached
President Obama, who vetoed it.
The reaction was again dismissive:
It got them nothing, and with the
stroke of a pen, the president dispensed with it, said White House
Press Secretary Josh Earnest. Yet
Republicans had demonstrated a
legislative path to repeal.
The accusation that Republicans
have no plans for an appropriate replacement is false. The GOP has
multiple plans, including House
Speaker Paul Ryans A Better Way
as well as plans from Sens. Richard
Burr and Orrin Hatch and Rep. Fred
Upton; Rep. Pete Sessions and Sen.
Bill Cassidy; Rep. Tom Price, Sens.
John McCain and David Perdue; Rep.
Phil Roe and the Republican Study
Committee; and Sen. Ben Sasse,
among others. Add to this Improving Health and Health Care: An
Agenda for Reform, the consensus
health-reform plan by conservative
scholars, including one of us (Mr.
Chen), and its clear that the GOP
has a plethora of plans.
Most of these plans focus first on
driving down the cost of health
care, expanding access to consumerdirected health arrangements like
health-savings accounts, and replacing ObamaCares exchange subsidies
with a refundable tax credit or some
GETTY IMAGES
The GOPs ObamaCare Strategy Pays Off
House Speaker Paul Ryan before signing a bill to repeal the Affordable Care
Act, Jan. 7.
other tax benefit to help lower-income Americans afford health insurance.
In preparation for the Supreme
Courts King v. Burwell decision last
year on subsidies via state run exchanges, the GOP sought technical
guidance from health experts on
how to transition to a post-ObamaCare world. This was key to ensuring that Americans who had gained
coverage through the laws marketplace subsidies werent displaced
from their plans. This effort, too,
was dismissed as presumptuous and
unnecessary. But with the election
of unified Republican leadership in
Washington, we can see that it was
neither of those things.
There was a logical and sequential aspect to these efforts. First,
the GOP demonstrated that it opposed the Affordable Care Act, a law
that last Tuesdays exit polls
showed 45% of all voters and 80% of
Donald Trump voters felt had gone

too far. Second, the slow but increasing levels of repeal success
showed that the GOP was making
progress toward its goaland had a
way to repeal without reaching a filibuster-proof supermajority in the
Senate.
In 2011 the House repeatedly
voted to repeal the law. In 2015 both
the House and the Senate voted for
repeal, and bills were sent to the
presidents desk but vetoed. In 2017
the president will sign such legislation. Congressional Republicans
particularly Senate Majority Leader
Mitch McConnell, Speaker Ryan and
former Speaker John Boehnerdeserve a great deal of credit for devising a strategy that has been vindicated.
Once Mr. Trump and the new
Congress assume office, we advise a
four-step approach for repeal-andreplace. First, states should be given
greater latitude through executive

action to pursue aggressive reforms
to Medicaid. Second, Republicans in
Congress should move immediately
to craft a budget resolution and
pass it, thereby enabling the use of
budget reconciliation legislation to
repeal the lawas they did in 2015.
Third, they should implement transitional reforms that would prevent
potential disruptions in coverage
gained under the Affordable Care
Act, such as for those who benefit
from subsidies for marketplace coverage. Finally, a more extensive replacement bill can then follow.
Republicans disagree over the
precise nature and timing of a replacement, and Mr. Trump said last
week in an interview with this newspaper that he would like to keep
parts of the Affordable Care Act, including provisions regarding pre-existing conditions and extended coverage for the adult children of
policyholders.
These differences can be debated
and resolved in the new Congress.
But if repeal is successful, Republicans will be in a position to sort out
those disagreements because of a
carefully considered, and unfairly
derided, strategy to keep ObamaCare
on the political and policy agenda.
Mr. Troy, CEO of the American
Health Policy Institute and former
deputy secretary of Health and Human Services, is the author of Shall
We Wake the President (Lyons
Press, 2016). Mr. Chen is a fellow at
the Hoover Institution and director
of domestic policy studies in the
public policy program at Stanford
University.
Markets Werent Spooked by a President Trump

By David M. Primo
And Trung A. Dang
ess than one day after Donald

Trumps election as president,
we could already add one
more prediction to the dustbin of
history: that a Trump victory would
lead to immediate disaster for the
financial markets.
The warnings came from every
direction in the weeks and months
leading up to Nov. 8. An equity analyst told New York magazine that
Trump is widely considered to be
reckless and Clinton is widely considered to be a friend to Wall
Street. Two highly cited university
economists using advanced statistical techniques estimated that a
Trump victory would reduce the
value of the S&P 500, the UK, and
Asian stock markets by 10-15%.
Yet three major stock indexes
the Dow Jones Industrial Average,
the S&P 500 and the Nasdaqwere
all up on Nov. 9. Not since Bill Clintons re-election in 1996 have all
three increased simultaneously the
day after a presidential election.
The Dow gained more than 250
points Wednesday, and closed the
week at a record high.
You might wonder: What happened? But theres a better question: What didnt happen?
The days before the election
were rife with uncertainty. There
were fears of terrorist attacks, a
contested election, violence in the
streets, a breakdown of society
what you might call the end of
America. (We exaggerate, but have
you seen what disappointed voters
are posting on Facebook and Twitter?) These fearswarranted or
notwere amplified by journalists
who struggled to maintain objectivity. Then they bounced around the
echo chamber of social media.
By and large, none of these fears
materialized. Mr. Trump gave a
conventional victory speech. It was
matched by Hillary Clintons
equally uneventful concession
speech. The election is not contested. America has a new president and is on a path toward another peaceful transition of power.
Stock prices reflect millions of
individual decisions, so we need to
be cautious in attributing intentions to markets. But in the days
after the election, investors seemed
to be reacting to the stability of
Americas democratic institutions.
To the extent that anything can be

gleaned from the financial rally, it
is this: On balance, having the election definitively resolved has outweighed immediate concerns about
what President-elect Trump might
do in the days ahead.
How can we be so sure? Look at
two pieces of data: first, the movement in the futures marketsessentially bets on where stock prices
What investors feared was

an indecisive election.
Once the winner became
clear, confidence returned.
are headed. Early Wednesday
morning, when a Trump victory began to seem likely, S&P futures
plunged by 5%. That was a decline
consistent with analysts fears.
Second, consider what happened
when U.S. markets opened on
Wednesday at 9:30 a.m. It had become clear in the light of day that
the country had survived. The
S&P, for instance, began the trading
day within points of where it had
closed the day before, and it

headed upward from there.
This pattern is strong evidence
that what was really rattling investors wasnt the prospect of President Trump, but rather the fear of
what might ensue after a messy, indecisive election. Once that chaos
was averted, the worry subsided.
That isnt to say there are no
winners and losers in the markets
after a Trump victory. The Mexican
peso was off about 8% Wednesday,
tied to questions about what President Trump will do regarding trade
and the North American Free Trade
Agreement. Biotech companies,
whose drug-pricing practices Mrs.
Clinton had called outrageous,
jumped about 10% the day after the
election.
As many have noted, there are
striking parallels with the British
vote in June to leave the European Union. There, too, the public
was inundated with dire predictions about what would happen to
the financial markets if Brexit
won. Immediately after the vote
stocks nose-dived, with the S&P
down more than 3%. But that index fully recovered within a couple of weeks. Perhaps the biggest
difference is that the recovery after Mr. Trumps victory was nearly
instantaneous.
There is still significant uncertainty about what President Trump
will do, how Brexit will be resolved,
and a host of other geopolitical issues. Investors would be wise to
expect continued volatility in financial markets. And if Mr. Trump
makes good on many of his economic and foreign policy promises,
the markets could reverse course.
But the financial lesson from last
week is that the clarity of electionshaving a decisive winner and
a gracious losermay matter
nearly as much as, and in some
cases more than, the outcome.
This was an exhausting campaign. But those who worry about
the countrys future should take
solace in the way markets responded to an unexpected Trump
victory. Americas political system
is more resilient than many experts
would have us believe.
Mr. Primo is an associate professor of political science and business
administration at the University of
Rochester, where Mr. Dang is a
Ph.D. candidate in political science.
How Dodd-Frank Led to More Mayhem in Africa

By Tate Watkins
pontaneously
combusting
smartphones may be in the
news, but the danger not being
reported is the one caused by the
minerals inside these devices. Conflict minerals have fostered violence
where theyre mined in central Africa, and the U.S. response has made
the situation worse.
In the Democratic Republic of the
Congo, where the average resident
lives on about $400 a year, mining
is the most lucrative game around.
The value of the Congos mineral reserves is estimated at $24 trillion,
according to the United Nations Environmental Program, most of them
dug by informal miners working
with picks and shovels. But in a nation that has been crushed by civil
war on and off for two decades,
much of the mining sector is now
controlled by militias that have
committed murder, rape and other

atrocities against civilians.
When Congress passed the DoddFrank financial bill in 2010, it included a provision aimed at curbing
the violence caused by these minerals. Companies like Apple and Intel
use the metals to make electronic
components in devices such as cellphones and laptops. Legislators
hoped that by requiring U.S. companies to disclose purchases of tantalum, tin, tungsten and gold, the militias funding would dry up.
Rep. Barney Frank (D., Mass.) famously said at the time that the bill
was supposed to cut off funding to
people who kill people. But new research shows the regulation has had
the opposite effect and escalated violence in the eastern Congo.
In a forthcoming study in the
Journal of the Association of Environmental and Resource Economists,
my colleague Dominic Parker and
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co-author Bryan Vadheim document

that while the law may have cut off
one source of revenue to armed
groups, it led them to intensify their
plundering of civilians in the regionexacerbating the humanitarian crisis. By their estimates, violent
incidents more than doubled after
the law was implemented.
The economists assert that before
Dodd-Frank, Congolese militias
acted as stationary bandits. The
idea is that a strongman who seeks
to rule for years wont use his iron
fist to crush the people entirely
and he may even invest a bit in
roads, security and other provisions
to ensure he avoids an uprising that
could loosen his control. Messrs.
Parker and Vadheim stress that stationary bandits are no saints, but
the arrangement may be safer and
more economically productive than
anarchy.
The authors compare the eastern
Congos stationary bandits to the
mafia. They write that some militias
charged roughly the equivalent of

$1 to enter a mining site and took a
weekly cut of miners earnings. In
return for this tax, militias provided a degree of protectioneven
if only from themselvesas the
mob does.
A measure to curb violence

from conflict minerals has
caused militias simply to
expand their looting.
Dodd-Frank upset the stationarybandit equilibrium because, rather
than spending resources to scrutinize a fragmented and opaque supply chain, many U.S. companies simply stopped purchasing minerals
from the Congo. The Commerce Department admitted in a 2014 analysis that it did not have the ability
to distinguish whether specific
Notable & Quotable: Trump

From an interview with President-elect Trump by Lesley Stahl
broadcast Nov. 13 on 60 Minutes:
Stahl: Are you really going to
build a wall?
Trump: Yes.
Stahl: Theyre talking about a
fence in the Republican Congress.
Would you accept a fence?
Trump: For certain areas I would,
but certain areas, a wall is more appropriate. Im very good at this, its
called construction.
Stahl: So part wall, part fence?
Trump: There could be some
fencing.
Stahl: What about the pledge to
deport millions and millions of un-
www.ebook3000.com
documented immigrants?
Trump: What we are going to do
is get the people that are criminal
and have criminal records, gang
members, drug dealers, we have a
lot of these people, probably two
million, it could be even three million, we are getting them out of
our country or we are going to incarcerate. But were getting them
out of our country, theyre here illegally. After the border is secured
and after everything gets normalized, were going to make a determination on the people that youre
talking about, who are terrific
people, theyre terrific people, but
we are gonna make a determination at that point.
mineral purchases funded militias,

and in August a Government Accountability Office report found that
97% of companies that filed disclosures couldnt determine whether
the conflict minerals financed or
benefited armed groups.
Companies avoided the extra
costs and red tape by boycotting
tantalum, tin and tungsten mined in
the Congo. They instead looked to
suppliers in Australia and Brazil.
Congolese mineral exports plunged
by 90% in the wake of the legislation, according to DRC mining officials. Consequently, income to militias from such mines either plunged
or vanished entirely.
None of this stopped the militias
from killing. Some of them pivoted
and became roving bandits, expanding their looting to make up for
lost mining revenues. Mancur Olson,
the late Nobel laureate in economics
who outlined the theory of both
types of bandits, wrote in a 1993
American Political Science Review
article that the anarchy and theft
wrought by the roving sort destroy
the incentive to invest and produce,
leaving little for either the population or the bandits. Messrs. Parker
and Vadheim found that armed
groups specifically targeted farmers
during harvest timeespecially after bumper crops.
U.S. policies often affect people
halfway around the world, in this
case harming Congolese who are
suffering at the hands of roving bandits. If U.S. legislators are going to
write provisions into laws that attempt to help these people, they
must be sure that the laws dont
make civilian life in the Congo more
difficult than it already is.
Mr. Watkins is a research fellow
at the Property and Environment Research Center (PERC), a nonprofit
research institute.
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Home Loans Enter Uncertain Era

BY ANNAMARIA ANDRIOTIS
The remaking of U.S. politics also is likely to upend the

nations mortgage market.
There are two reasons why: interest rates and regulation.
Changes in these areas
could affect the course of the
housing recovery, the availability of credit to borrowers and
the extent to which lenders are
willing to take on new risk. It
may also affect the current
structure of the mortgage
market, in which banks mostly
Bangladesh
Recovers
Portion of
Stolen Cash
BY SYED ZAIN AL-MAHMOOD
DHAKA, BangladeshPhilippine authorities returned $15
million of $81 million stolen
from Bangladeshs account at
the Federal Reserve Bank of
New York in a February cyberheist, the first time the South
Asian country has been able to
retrieve any of the stolen
money.
Abu Hena Mohammad Razee
Hassan, deputy governor of
Bangladeshs central bank, said
the cash was delivered to the
Bangladeshi Embassy in Manila
by officials of the Philippine
central bank and the countrys
Anti-Money Laundering Council.
$15M
Amount returned by the

Philippines to Bangladeshs
account at New York Fed
Our ambassador received

the money and the amount will
soon be transferred to our account at the New York Federal
Reserve, he said.
The balance of the $81 million has disappeared into Manilas casino industry, and investigators say there is little
chance of tracing it.
In early February, cyberthieves used access codes of
Bangladesh Bank for the global
money-transfer network Swift
to transfer $81 million to four
bank accounts in the Philippines, while $20 million went to
the account of a nonprofit in Sri
Lanka. The transfer to Sri Lanka
was halted.
have focused on plain-vanilla

and jumbo loans while nonbank lenders have targeted
riskier borrowers, sometimes
with more exotic mortgage
products.
Interest rates are the most
immediate concern. Donald
Trumps victory has led to a
surge in bond yields and, in
turn, mortgage rates. In the
two days following the election, the average rate on 30year fixed-rate conforming
mortgages spiked a quarter of
a percentage point to 3.87%,
according to MortgageNewsDaily.com.
Mortgage rates are still incredibly low by historical standards; the average over the
past 45 years is 8.26%, according to data from Freddie Mac.
But the quick rise in the 10year Treasury yield has lenders worried mortgages could
become more expensive far
sooner than they had anticipated.
Depending on how far that
runs, higher rates could arrest
further gains in home prices.
their incomes could afford.

He said his firm expects
that by the end of 2017 rising
rates will have contributed to
home values declining in about
one-third of the U.S.
The speed and size of any
increase in rates will depend in
part on Mr. Trumps fiscal policies and whether markets believe that could lead inflation
higher. We have a new narrative, said Chris Whalen, senior managing director at Kroll
Bond Rating Agency Inc., notPlease see LEND page B2
Redstone Heirs Take On Bigger Role

Grandchildren gain influence in direction of media empire, await CBS-Viacom fortune
BY KEACH HAGEY
As the battle for control of
the $40 billion media empire
spanning Viacom Inc. and
CBS Corp. was escalating
over the summer, the 30year-old grandson of controlling shareholder Sumner Redstone secretly reached out to
Viacoms embattled chief executive, Philippe Dauman, to
begin settlement talks.
Tyler Korff, a lawyer and
rabbi, grew up knowing Mr.
Dauman and worked alongside him as a fellow director
of National Amusements
Inc., the holding company
through which the Redstone
family controls Viacom and
CBS. The two men had always
maintained a good relationship despite tensions between
Mr. Dauman and Mr. Korffs
mother, Shari Redstone.
In June, Messrs. Korff and
Dauman met with their lawyerswithout anyone elses
knowledgein a conference
room at Viacoms Times
Square headquarters in New
York to begin what turned
into hundreds of hours of negotiations, people familiar
with the matter said.
Those previously undisclosed conversations laid the
foundation for the August accord that provided a peaceful
transfer of power atop Viacomparent of MTV, Comedy
Central and Paramount Picturesthrough the exit of
Mr. Dauman and an overhaul
of the companys board.
The changes increased the
influence of National Amusements, which has since asked
CBS and Viacom to explore a
merger.
Mr. Korffs leadership in
the settlement talks is one of
several moves by the younger
generation of Redstones into
more prominent roles in the
family business. His sister,
Kimberlee Korff Ostheimer,
Please see FAMILY page B2
Sumners Branches
Sumner Redstones grandchildren will be the ultimate beneciaries of his controlling
stakes in Viacom and CBS, and are taking a more active role in the family business.
All ve cousins, and any of their children, will be the beneciaries of the trust once it goes into effect.
Tyler Korff
Brandon Korff
Real estate
developer
Kimberlee Korff
Ostheimer
ferrying
boxes full of
silicon wafers from
one station
to the next.
Every detail
KEYWORDS
of the facCHRISTOPHER tory is meaMIMS
sured by
sensors
pouring
data into a centralized repository where it can be processed to optimize production. The only humans present
are there to fix the machines
doing all the work.
But that means there is
Lawyer and rabbi

He is set to become
a trustee of the trust
that will take over
Sumners stakes in
CBS and Viacom.
Lawyer
Keryn Redstone
Lawyer
Shes been at odds
with her aunt and
recently secured a
settlement ensuring
equitable trust
disbursements.
Lauren
Redstone Ellis
Health policy
researcher
Each of Sharis children is now a

director of National Amusements.
Brents children dont
have roles in the
family business.
Brent Redstone
Brent was bought out of
the family business in
2006 amid litigation.
Shari Redstone
NATIONAL AMUSEMENTS
Shari
owns
Sumner
owns
20%
80%
CBS
VIACOM
Vice chairman of CBS and

Viacom and the president
of National Amusements
Painkiller
Gets Pass
In Study,
But Results
Questioned
BY RON WINSLOW
NEW ORLEANSA study of

arthritis drugs found that, contrary to common belief, Pfizer
Inc.s painkiller Celebrex posed
no higher risk to a patients
heart than ibuprofen or
naproxen, two widely used rivals.
Patients assigned to take
Celebrex suffered numerically
fewer heart-related deaths,
heart attacks and strokes than
those assigned to either of the
other drugs, according to two
different analyses of the
24,000-patient study.
But limitations of the data
led some researchers to question the results.
The three drugs are among
more than two dozen medicines known as nonsteroidal
anti-inflammatory drugs, or
NSAIDs, that account for some
100 million prescriptions in the
U.S. each year.
Doctors said the results provide reassurance to patients
taking moderate doses of Celebrex after more than a decade
of controversy over the heartrelated safety of a class of
NSAIDs called COX-2 inhibitors. The concern was triggered in 2004 when Merck &
Co. was forced to pull its
COX-2 drug Vioxx from the
market after a study linked it
to increased risk of a heart attack.
Pfizer withdrew a second
COX-2 at the time but was permitted to continue marketing
Celebrex provided it conduct
what became the current study
to assess its effect on heart
risk. The Vioxx link had persuaded many doctors that CelPlease see DRUG page B2
INSIDE
Shari married Ira Korff, a rabbi and

one-time National Amusements
executive. They have since divorced.
She is set to serve on the trust
that will take over Sumners
stakes in National Amusements.
National Amusements
owns a roughly 80% of
voting share for both.
Early in his career, Sumner goes to work

at the drive-in theater chain founded by
his father, Michael. It later becomes
National Amusements Inc.*
Source: Staff reports
He takes over leadership and uses

National Amusements as a vehicle
to invest in movie studios and,
eventually, take over Viacom.
Sumner Redstone
Sumner marries
Phyllis Raphael.
*Sumners brother, Edward, is bought out of the family business in 1972.
Factories to Grow Smarter

H
eres a paradox of
Americas highly automated, increasingly labor-independent manufacturing: While sophisticated, for
the most part, it isnt all that
high-tech. Picture metalstamping machines in an
auto-parts factory that can
easily have a long useful life
of up to 40 years.
Now picture the assembly
line just outside Austin, Texas,
where Samsung Electronics
Co. makes core chips for Apple Inc.s iPhones. I toured the
facility last summer. It is a
pristine white environment
filled with WALL-E-like robots
While prices have shot up in

many U.S. housing markets
over the past couple of years,
superlow mortgage rates have
kept higher prices within reach
of many borrowers.
The ultimate problem is
the impact of rising rates on
home values, said Stu Feldstein, president at SMR Research Corp., a mortgage-research firm. Were back into a
bubble condition in part because of low rates that have
enabled people to buy houses
much more expensive than
See more at WSJMarkets.com
still a big opportunity to use

in manufacturing all the
learning Silicon Valley has
applied to, for example, advertising. People are really
thinking about applying venture capital and technology
innovation to things that are
10 times the size of the ad
market, says Jon Sobel,
chief executive of Sight Machine Inc., which helps companies process all the data
coming off their assembly
lines. Manufacturing is a $12
trillion industry globally a
year. Annual spending on ads
globally is just north of a
Please see MIMS page B4
ALASKAS BET
ON HOUSING
PAYS OFF
BANKING & FINANCE, B7
Markets are complex. Trading in them shouldnt be.
The most liquid and actively traded security in the world.
Visit spdrs.com/spy
Assets for SPY as of 03/31/2016 were $184B. The second largest ETF had assets of $71B as of 03/31/2016. Average daily trading
volume over the past three months was over 146,835,868 shares as of 03/31/2016. Source: Bloomberg as of 03/31/2016.
ETFs trade like stocks, uctuate in market value and may trade at prices above or below the ETFs net asset value. Brokerage
commissions and ETF expenses will reduce returns.
There can be no assurance that a liquid market will be maintained for ETF Shares.
The SPDR S&P 500 ETF Trust is an exchange traded fund designed to generally correspond to the price and yield
performance of the S&P 500 Index.TM
LUKE SHARRETT/BLOOMBERG NEWS
SPDR , S&P and S&P 500 are registered trademarks of Standard & Poors Financial Services LLC (S&P) and have been
licensed for use by State Street Corporation. State Street Corporations nancial products are not sponsored, endorsed, sold
or promoted by S&P, S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their respective afliates and third
party licensors and none of such parties make any representation regarding the advisability of investing in such product(s)
nor do they have any liability in relation thereto, including for any errors, omissions, or interruptions of any index.
ALPS Distributors, Inc. is distributor for SPDR S&P 500 ETF Trust, a unit investment trust. ALPS Distributors, Inc. is not
afliated with State Street Global Markets, LLC.
Before investing, consider the funds investment objectives, risks, charges and expenses. To obtain a prospectus
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Read it carefully.
IBG-19394
GE has been a major proponent of the industrial internet. Above, a Texas GE diesel-locomotive facility.
www.ebook3000.com
Not FDIC Insured No Bank Guarantee May Lose Value
* * * *
BUSINESS NEWS
Electric-Car Makers Hope for Jolt Volkswagen

Confirms
Despite weak demand,
industry is counting on
help from regulations,
emission scandals
New Probe
At Audi
The coming weeks will feature big new showcases for the
humble electric-vehicle.
Auto makers, rushing to
meet tightening emissions
standards, will be unveiling
new battery-powered vehicles
at the Los Angeles Auto Show
this week, mirroring last
months flood of such cars by
European companies. These
curtain-raisers will be followed
by first shipments of General
Motors Co.s Chevrolet Bolt, a
$35,000 Tesla fighter that goes
on sale next month.
Whats missing are consumers, however. Auto makers are
suffering from a glut of U.S.
sedan and coupe inventory
amid strong demand for lighttrucks. The coming addition of
electric-vehicle capacity could
expand that oversupply.
Globally, sales of plug-in
electric cars are up in 2016,
driven by Chinese customers
taking advantage of aggressive
tax rebates and other incentives. But total volumes remain
less than 1% of the 83 million
light-vehicles likely to be sold
this year.
Tesla Motors Inc.s pricey
electrics aside, cars such as Nissan Motor Co.s Leaf and BMW
AGs i3 havent widely caught
on, and many auto makers say
it is unclear when demand for
electric vehicles will rise.
That is sobering news for
executives hoping they will
help meet tougher emissions
standards. China, Europe and
the U.S. have established regulations prodding development
of electric cars. Whether tax
incentives and extensive efforts to lower battery costs
can spur demand in the short
term isnt a sure bet.
Moodys Investors Service
BY WILLIAM BOSTON
MARK BLINCH/REUTERS
BY WILLIAM BOSTON
AND JOHN D. STOLL
A Chevrolet Bolt EV electric vehicle. Moodys Investors Service predicts 19 new electric models will go on sale in the U.S. by 2020.
predicts 19 new electric models will go on sale in the U.S.
alone by 2020, potentially tripling what is currently available.
Auto makers presenting in
California this week, including
Tata Motors Ltd.s Jaguar and
Hyundai Motor Co., are expected to give updates as to
how they will compete in this
electrification
race.
Fiat
Chrysler Automobiles NV will
show off a plug-in version of
its popular Pacifica minivan for
the first time just before the
Los Angeles Auto Show opens.
European auto makers have
become more optimistic about
electrics in the wake of Volkswagen AGs emissions-cheating scandal, which tarnished
diesels image as a green alternative to gasoline.
Volkswagen and MercedesBenz parent Daimler AG,
which combined sell 13 million
vehicles a year, predict electrics will account for between
15% and 30% of all vehicle
sales by 2025.
Not everyone is as bullish.
At the Paris auto show, for
instance, BMW AG sales chief
Long Road Ahead

Electric vehicle sales are growing but still make up less than 1%
of total light vehicle sales.
Global electric vehicle sales
Electric vehicle sales as a share
of global light vehicles sales
600,000
1.0%
First half
500,000
First half 2016

0.73%
0.8
400,000
0.6
300,000
0.4
200,000
0.2
100,000
0
2011 12 13 14 15 16
2011
Ian Robertson said diesel will

remain the preferred energy
source in Europe even in the
wake of Volkswagens problems.
We see some gasoline plug-in
hybrids replacing diesels, but
its inconclusive, he said.
There doesnt appear to be a
tipping pointanytime soon.
12
13
14
15
16
Sources: EVvolumes.com; WardsAuto.com
Researcher IHS Automotive

expects the launch of new EVs
to quadruple annual U.S. electric-car sales to about 320,000
by 2020, still less than 2% of
the current market. Selling
them would require heavy government incentives, it believes.
There really isnt enough
of a market to do justice to all

of the development and effort
being put into EVs, said IHS
analyst Paul Lacy.
Toyota Motor Corp., a
critic of pure electric vehicles
and heavily dependent on sales
of light trucks and hybrid vehicles that require gasoline for
most travel, said on Tuesday it
is reluctantly changing course.
Though electric vehicles
have many issues such as its
range, and the length of recharging time and battery performance, depending on the energy situation in each country
and region, and infrastructure,
we would like to get ourselves
ready to commercialize them,
said Takahiko Ijichi, Toyotas
executive vice president.
The International Energy
Agency, an energy policy advisory group whose 29 members
include the U.S., Germany and
Japan, said in its 2016 electricvehicle outlook that it will require substantive policy support to accelerate the
momentum of adoption of
electric cars.
Adrienne Roberts
BY REBECCA SMITH
Donald Trump campaigned
on a promise to resurrect the
ailing U.S. coal industry and
put miners back to work. Delivering on that vow could
prove nearly impossible.
Electric utilities that buy
more than 95% of the coal
mined in America have already
retired hundreds of their coalburning power plants from
Colorado to Connecticut
amounting to about a third of
the total capacityand have
plans to mothball even more.
While in Appalachia earlier
this year, Mr. Trump pledged
to bring the coal industry
back, 100% by rolling back
environmental regulations. But
coals biggest problem is that
it is no longer the cheapest
fossil fuel around. It is being
displaced by natural gas.
American Electric Power
Co. of Columbus, Ohio, one of
the nations biggest utility
companies, has sold or retired
half its fleet of coal-burning

power plants in recent years.
No matter who occupies the
White House, its not coming
back, said Nick Akins, AEPs
chief executive.
Even if Mr. Trump makes
good on his campaign promise
to relax or repeal pending limits on carbon emissions, it
wont be enough to restore
coals market share. Were
moving to a cleaner-energy
economy and were still getting pressure from investors
to reduce carbon emissions,
Mr. Akins said. I dont see
that changing.
Investors love gas-burning
power plants because they
take less time to construct,
cost less to operate and convert fuel into electricity with
greater efficiency. Gas has just
half the carbon emissions of
coal and, thanks to the U.S.
drilling boom, most of the
country is now flush with new
supplies.
Since the 2008 recession,
the gas glut has become so

acute that prices have plunged
by more than 60% while coal
has been relatively stable, federal data show.
To understand what the
coal industry is up against,
consider one of the newest
coal units in the U.S.: Duke
Energy Corp.s power plant in
Mooresboro, N.C. Built in 2012,
the plant already needs modernization it so it can compete
amid rapidly changing market
conditions. Duke is adding
equipment so the plant can
run on coal or gas, depending
on which can produce electricity more cheaply.
The percentage of electricity Duke generates by burning
coal has steadily dropped from
58% in 2005 to 35% in 2015,
mirroring a nationwide trend.
The company closed 40 coal
plants in the last five years
and expects its coal-fired
power generation to keep
dropping until it stabilizes at
23% in 2030.
Cheap Gas Tests Trumps

Promise to Revive Coal
Coals biggest problem: It is no longer the cheapest fossil fuel.

Aside from investors who
want to see cleaner electricity
generation, some state-level
power standards demand it. A
few states, such as California
and New York, now discourage
coal use altogether.
Many others require utilities to consider cost and pollution profiles when they de-
cide which power plants to

run. Since it is generally
cheaper and cleaner to make
electricity with gas, companies
havent been running their
coal plants as hard.
A rare bright spot for coal
miners: Natural-gas prices are
expected to rise modestly in
2017.
BERLINVolkswagen AG
and its Audi AG luxury unit on
Saturday confirmed that U.S.
and European investigators are
looking into fresh irregularities
related to levels of carbon-dioxide emissions in certain Audi automatic-transmission vehicles.
Volkswagen said it was in
talks with U.S. and European
regulators over the new issue,
which has emerged as a fresh investigative strand in its yearlong
diesel-engine emission scandal.
The vehicles now in question are both gasoline- and
diesel-powered.
The initial VW probe, news
of which broke last year, centered on software Volkswagen
admits to having installed to
mask a different sort of emission, nitrogen oxide, in many
of its diesel-powered cars.
Investigators are now looking into whether the way Audi
engineered some of its automatic transmissions was aimed
The transmission in
question was widely
used in Audis top
sedans and sportutility vehicles.
at reducing carbon-dioxide
emissions during lab tests but
allowing higher emissions during normal road use, Volkswagen and Audi confirmed.
The transmission in question
was widely used in Audis top
sedans and sport-utility vehicles.
Audi engineered the automatic
transmissions to run at very low
revolutions per minute during
treadmill tests to pass emissions
tests, but then to run at full performance on the road, resulting
in higher greenhouse-gas emissions, according to a person familiar with the situation and an
internal Audi document reviewed
by The Wall Street Journal.
The discovery of the use of
so-called defeat devices related
to carbon-dioxide emissions was
previously reported in a frontpage article in the Journal, but
neither Volkswagen, Audi nor
U.S. officials had commented on
the issue until now.
Audi disabled the test-recognition system shortly before
Volkswagen admitted to cheating on diesel emissions in
2015, according to the person
familiar with the situation.
The new revelation comes after Volkswagen has been in negotiations with U.S. environmental authorities and the Justice
Department for a year to settle
allegations of fraud and environmental violations after using defeat devices to cheat on dieselengine testing for a decade.
VW last year admitted to installing the emissions-cheating
software on nearly 11 million
diesel vehicles world-wide. The
company agreed in June to a
$14.7 billion settlement with the
U.S. environmental authorities,
state authorities and owners of
475,000 two-liter diesel vehicles
affected in the U.S.
Monsanto Herbicide Approved

A newly approved herbicide
will allow farmers to open a
new front in their war against
weeds next year, but some fear
fallout for their own crops
from illegal spraying of related
chemicals.
The U.S. Environmental
Protection Agency on Wednesday approved Monsanto Co.s
XtendiMax, a powerful new
formulation of the powerful
weed killer known as dicamba.
Farmers and the company
have said the new version is
needed to combat pest plants
that can choke out soybean
and cotton plants, and which
cant be killed by other sprays.
Monsanto currently doesnt
sell a version of the herbicide,
and state approvals for the
new formulation are pending.
The company expects to secure these before spring planting starts.
XtendiMax specifically was
designed for use with newly
engineered soybean and cot-
MONSANTO
BY JACOB BUNGE
Pigweed sprouts amid cotton.

ton plants, which also were
developed by Monsanto. These
plants were designed to resist
the weed killer, which is the
only form of the herbicide allowed to be sprayed over the
tops of these plants.
The company had intended
to release both products in
tandem, but, because the EPA
had yet to approve the herbicide, Monsanto had a limited
release of about 1 million
acres worth of the seeds ear-
lier this year.

With the company expecting planting of the seeds to
broaden to 18 million acres in
2017, some fear farmers could
be tempted to use older,
cheaper versions of dicamba
on the plants illegally.
Use of older dicamba formulations to clear fields for
planting or on crops like corn
and grasses isnt prohibited,
but those products tendency
to drift on the wind led regulators to ban their spraying on
the new soybean and cotton
plants, as the herbicides could
spread into nearby fields and
hurt rops there. XtendiMax
was designed not to spread to
neighboring fields.
Already in 2016, reports of
alleged dicamba damage to
crops jumped, agriculture officials and academics said.
Some farmers allegedly resorted to spraying the Monsanto-developed plants with
older versions of dicamba, according to complaints filed
with agricultural officials.
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B4 | Monday, November 14, 2016
TECHNOLOGY
WSJ.com/Tech
Slack Girds for Battle

With Messaging Rivals
Zuckerberg Refutes Election Criticism
BY RACHAEL KING
Mark Zuckerberg on Saturday vigorously defended Facebook Inc. against criticism

that fake news and misinformation on the social-media
site may have swayed the outcome of the presidential election, emphasizing his view
that Facebooks role isnt to be
arbiters of truth.
Mr. Zuckerberg, Facebooks
chief executive and co-founder,
said in a lengthy post that less
than 1% of the sites worldwide content could be classified as fake. Overall, this
makes it extremely unlikely
hoaxes changed the outcome
of this election in one direc-
Teams announcement.
Slack has been bracing for
the assault. It signed a partnership last month with International Business Machines
Corp., to use its Watson artificial-intelligence services.
The growing battle reflects
more than excitement over the
prospect of a more efficient
alternative email. Tech companies envision messaging as a
gateway to other business
software from other vendors.
For instance, a worker
could type in the chat box to
book vacation days in a human
resources program or enter a
transaction in an expense reporting program. The company that provides that interface could wield extraordinary
power in the enterprise software market.
Slack already lets users
beef up messages with information from partnerstweets
from Twitter Inc. or customer
information from Salesforce.com Inc.and add comments to files and share them.
The messaging service of-
Mark Zuckerberg says less than 1% of the Facebooks world-wide content could be classified as fake.
BY LI YUAN
HONG KONGFor six years,
Chinese billionaire Jia Yueting
shrugged off skeptics as he
pursued his vision of a business that could challenge Apple Inc., Netflix Inc., Amazon.com and Tesla Motors
Inc. all at once.
The founder of LeEco Holdings appeared to defy gravity
as he built a second-tier video
site into a conglomerate spanning smartphones, televisions,
electric cars, cloud computing
and a film studio, capped off in
Legal Notices
To advertise: 800-366-3975 or WSJ.com/classieds

CLASS ACTIONS

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August by a $2 billion deal to

buy U.S. TV maker Vizio Inc.
But a week ago, on Nov. 6,
Mr. Jia, 43 years old, told employees that his grand plans
a multibillion-dollar spending
spree largely funded by debt
and venture moneymay have
to come down to Earth. In a
5,500-word letter, he said the
company expanded too quickly
and faces a cash crunch.
As we sped ahead blindfolded, and expanded our business by burning cash, we got
overstretched in our global
strategy, he wrote.
Only one of LeEcos business
unitsthe
Shenzhen-listed
Leshi Internet Information &
Technology Corp., which runs
its video siteis profitable, according to the company.
Any further financial strain
for LeEco would have broad
implications in China and beyond. With its ability to raise
new funds in doubt, investors
will be watching whether it
can close the Vizio deal.
Mr. Jia said in an interview
the deal wont be affected and
he expects future acquisitions
in the U.S. The letter, he said,
wasnt meant to spook investors but rather to show his determination to carry on with
his vision despite difficulties.
Visio said the deal is still in

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Continued from page B1

half a trillion dollars.
This transformation in the
way we make things has
many namesthe fourth industrial revolution, the industrial Internet of Things, smart
factoriesbut at base it is
about harvesting as much
data as possible from all the
machines in factories, shipping it to the cloud, parsing it
with artificial intelligence,
and using the results to make
those factories more productive, less costly to operate
and more reliable.
The goal is to break data
out of its silosthe machine,
the factory floor, the shipping
and logistics systemand
pool it in a way that allows
for real-time decision-making.
Here are examples of what
this revolution can accomplish: deciphering how ambient air temperature affects
productivity of an entire factory. Or ramping up and down
production in a way that is
more responsive to sales. Or
preventing unplanned downtime, as when a single critical
machine breaks unexpectedly,
which can be incredibly costly
because it can hold up an
enormous production line
stretching from raw materials
to finished goods.
Id thought, based on all the
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and news that is visited most

often by Facebooks users.
Mr. Zuckerbergs weekend
post amplified comments he
made Thursday that the accusation Facebook influenced the
election was a pretty crazy
idea.
Facebook has often expressed pride in the way it can
shape users actions and purchase decisions, and has used
that to generate billions of
dollars in advertising revenue.
But Mr. Zuckerbergs post contends Facebooks power is limited in shaping political views.
Facebook has described
themselves as a neutral platform. but theyre creating this
product that delivers news to
people and thats sort of traditionally associated with media
companies, said Michelle De
Mooy, an acting director of
the privacy team at the Center
for Democracy & Technology, a
nonprofit and nonpartisan
tech advocacy organization in
Washington, D.C.
Facebooks power as a
source of information raises
questions of whether it should
force its users to see opposing
views or hire an ombudsman
who can oversee news on the
platform, she said.
About 44% of Americans
get at least some of their news
from Facebook, according to
Pew Research Center.
Saturday, Mr. Zuckerberg
said he was proud of the role
Facebook played in connecting
voters with candidates and
fostering discussion about the
election. A lot of that [dialogue] may not have happened
without Facebook.
Chinese Tycoon Says LeEco Grew Too Fast
ADVERTISEMENT

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As readers reacted to Mr.

Zuckerbergs post on Saturday,
the CEO took to the comments
section to address a handful of
specific questions. He rejected
the idea that Facebook identify
itself as a media company because its primary use is connecting friends. News and media aren't the primary things
people do on Facebook, so I find
it odd when people insist we
call ourselves a news or media
company in order to acknowledge its importance, he said.
The election has forced
Facebook to reckon with the
way the platform has shaped
political discourse through its
news feed, the central river of
information, images, videos
progress but declined to comment further.

As Chinas economy slowed
in the past few years, LeEco
was one of many mobile-internet companies that drew investors seeking assets that
could fight the tide. But cooling sentiment toward tech
startups this year has made
attracting money harder.
The market capitalization
and valuation of LeEcos various businesses dont make
sense under the current market conditions, said Zhang Yifan, managing director at
Shenzhen Commando Capital
Asset Management Co., who

doesnt own shares in the
company.
Mr. Jia has employed unorthodox methods to fund his
dream. At the end of 2015, he
pledged 85% of his Leshi
sharesnearly a one-third
stakeas collateral for personal credit lines, according to
the companys annual report.
He lent the proceeds to new
ventures such as the smartphone and car makers, the
company says.
LeEco declined to disclose
how much Mr. Jia has raised
this way.
ALISON YIN/ASSOCIATED PRESS FOR LEECO
Slack CEO
Stewart
Butterfield
says theres
room for more
than one
provider.
tion or the other, he said.

Fake news occurs across party
lines, he noted.
Content on Facebook includes personal updates, photos and other information that
isnt considered news. Since
not everyone sees the same
content, some users feeds
may feature significantly more
fake news than others.
Mr. Zuckerberg said that
Facebook is developing tools
to reduce fake news on the
site, but that its responsibility
should be limited.
Defining the truth is complicated, Mr. Zuckerberg
wrote. We must be extremely
cautious about becoming arbiters of truth ourselves.
ASSOCIATED PRESS
Slack Technologies Inc.

built up a $3.8 billion valuation and buzz as one of Silicon
Valleys hottest startups by
getting millions of office
workers to use its group messaging app. Now some of the
tech industrys biggest players
want to be part of the conversation.
Microsoft Corp. this month
unveiled its Teams workplace
collaboration service, which
came on the heels of Facebook Inc.s launch last month
of Workplace by Facebook.
The tech giants moves put
pressure on the San Francisco
startup, whose user base is
tiny by comparison.
Ive been paranoid about
this for a long time,
Slack Chief Executive Stewart
Butterfield said in an interview after the Microsoft
fers a free version but its two

paid tiers, at $6.67 and $12.50
per user per month, are considered costly by some standards. It doesnt disclose revenue or other financial data.
Slack already has battled
other competitors large and
small, including Atlassian
Corp.s HipChat and Alphabet
Inc.s Google Spaces, and Symphony Communication Services LLC, a startup backed by
Wall Street. (Dow Jones Newswires, which is owned by Wall
Street Journal publisher News
Corp, is a provider of news on
the Symphony platform.)
Revenue from what International Data Corp. analysts call
workplace-application messaging, which also includes collaborative apps such as Google
Docs and Skype videoconferencing, hit $4.4 billion last
year, and IDC expects it to
reach $6.7 billion by 2020.
Microsoft, the king of office
software, and Facebook, with
1.79 billion monthly users for
its social network, bring new
heft to the fight. Microsoft
Teams, due to become generally available in early 2017,
also lets workers chat with
far-flung teammates and
search through conversations.
It is designed to work with
Microsoft productivity apps
so, for instance, users can embed Skype video conversations
in the message queue.
Microsoft said it would include Teams free with the
commercial version of the online Office 365 productivity
suite, which claims 85 million
users. Facebooks Workplace
service adapts the companys
messenger, newsfeed, events
and other features for use
within companies.
Mr. Butterfield said the
market is large enough for
more than one provider, and
there are plenty of companies
that dont use Office 365.
Microsoft agreed. The goal
is not to take away any success others have had, a Microsoft spokeswoman said.
Some analysts say the market is Slacks to lose. Microsoft Teams put out a road map
and theyre going to build out
a lot of business partnerships,
but right now this doesnt take
anything away from Slack,
said Mike Gotta, research vice
president of Gartner Inc.
BY DEEPA SEETHARAMAN
Chinese billionaire and LeEco founder Jia Yueting in San Francisco

last month. We sped ahead blindfolded, he wrote to employees.
industry chatter about the industrial internet, that we
were pretty far along in this
process. But that turns out not
to be the case.
Even General Electric
Inc.which along with Siemens AG, International Business Machines Corp., Cisco
Systems Inc. and others has
been a major proponent of the
industrial internet in the U.S.
has faced challenges implementing the new process in its
own manufacturing facilities.
While manufacturing
is sophisticated, for
the most part, it
actually isnt all
that high-tech.
Candidly, one of the
things we work on is how we
can get our legacy equipment
connected, says Karen Kerr,
senior managing director at
GE Ventures. GE has nearly
500 factories, and the companys goal is to transform 75
of them into smart, connected
factories this year.
Part of the challenge is to
properly use the hardware
companies already have.
Newer machinery is bristling
with sensors and data ports
that are typically only used
when these machines are being built or repaired, says

Dennis Hodges, chief information officer of Inteva Products
LLC, a major manufacturer of
auto parts. Though the data
from these sensors was never
intended to be used for realtime insight into how a machine is doing, it turns out
that even indirect measures
of a machines health, like its
temperature, can be combined with other data to allow engineers to understand
things about a device they
cant measure directly, and
what to do to keep them from
breaking.
Recently I put on a smartwatch that could be a harbinger of this sensors-everywhere future. The Matrix
PowerWatch, launching this
week, never needs recharging.
Its power source is thermoelectrics, which means that it
can turn any difference in
temperature into electricity.
As I looked at it, a little
power bar slowly grew, until
the watch was generating 200
microwatts of energy harvested directly from my body
heat. It is a relatively tiny
amount of power, but enough
for a smartwatchor for the
sensors and transmitters deployed in smart factories.
Power sources like this are
key to getting sensors onto
more of our built environment,
preventing the cost and time
in changing sensor batteries.
NY
Monday, November 14, 2016 | B4A
LETS TACKLE
RETIREMENT
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creating a secure retirement will take everyones effortsadvisors,
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B4B | Monday, November 14, 2016
NY
U.S. ANNUAL MEETING

NOV. 1415 | WASHINGTON, D.C.
Days after a historic election, WSJ editors join top advisors to

President-elect Donald Trump, senior Democrats and business leaders
to discuss the impact of the new administration on a slate of critical
issues, from national security to the economy to health care.
SPEAKERS INCLUDE:
Preet Bharara
Oliver Hart
U.S. Attorney, Southern District of New York
Kellyanne Conway
2016 Nobel Memorial Prize in Economic Sciences Recipient

Andrew E. Furer Professor of Economics,
Harvard University
Campaign Manager, Trump Presidential Campaign

Senior Advisor, Presidential Transition Team
Gene Sperling
Tom Frieden, M.D., M.P.H.

Director, Centers for Disease Control and Prevention
U.S. Department of Health & Human Services
Economics Advisor, Clinton Presidential Campaign, 2016

Director, National Economic Council (19962001
and 20112014)
Daniel K. Tarullo
Rudy Giuliani
Federal Reserve Board of Governors
Senior Advisor, Trump Presidential Campaign

Vice Chairman, Presidential Transition Team
Former Mayor of New York City
Elizabeth Warren
U.S. Senator (D., Mass.)
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Live Nation Amps Concert-Spending Push

Promoter seeks to
increase revenue by
offering VIP services,
specialty drinks, food
Fan Spending
Average per person spending
on-site at select entertainment
and sports venues.
Disneyland
$40
BY HANNAH KARP
Sporting events
(MLB, NHL, NBA)
$30
Live Nation
amphitheaters
$20
KEVIN WINTER/GETTY IMAGES/LIVE NATION
Live Nation Entertainment

Inc. wants music fans to spend
as much money at its shows as
they do at a Disneyland outing. Now, the countrys biggest
concert promoter just has to
figure out how to get that
done in what is a much
shorter time frame.
As part of an effort to boost
the slim profit it makes selling
concert tickets, Live Nation
has focused on increasing the
amount each fan spends on average on items such as food
and drinks. Spending at its amphitheaters grew 10% this year
over last to $22 a fan a day.
It hopes ultimately to lift
that figure to at least $30, akin
to what major league ballparks
collect per visitor and near estimates of Disney parks
roughly $40 a visitorat the
40-plus amphitheaters and the
festivals it runs, executives
said. Live Nation is experimenting with a range of new
ideas, from using smartphone
apps to market services, selling more wine and high-price
craft beers, to VIP lounges and
using brightly clad ambassa-
Sean Diddy Combs and Mase perform during the Bad Boy Family Reunion Tour in last month.
dors to direct fans to the
least-busy concession stands.
This high-margin spend
has been a key driver of our
growing concerts profitability
in 2016, Chief Executive Michael Rapino told investors.
Live Nation has been posting
record revenue lately amid a
boom in the live-music business, but its profit margins have
remained thin, around oneninth the size of Disneys margins on its parks and resorts
last year, with much of Live Nations $131 million in operating
income in 2015 coming from
sponsorship and advertising.
The top 100 global tours
grossed $4.7 billion last year,
up 16% from 2014, according
to concert-industry publica-
tion Pollstar. But the vast majority of ticket revenue flows

to performers, with promoters
keeping only a sliver. Live Nation lost $32 million last year
on $7.2 billion in revenue.
The Beverly Hills, Calif.based company a year ago
launched the effort to boost
margins from add-on sales by
hiring theme-park veteran
$22
10
0
2013 14
15
16
Source: Live Nation
Tom See. Mr. See worked for

years at Walt Disney Parks &
Resorts and later was vice
president of sales at Universal
Studios Hollywood.
But catching up to spending
at Disneyland and other such
theme parks is especially challenging because concertgoers
typically are at a venue for
much less time than theme
park visitors. He said Live Nation can clear that hurdle by
increasing what he calls its
speed of play, using ambassadors to help fans navigate
venues so they have more time

to make transactions. A Disney
spokeswoman didnt respond
to a request for comment.
Time is our Achilles heel,
Mr. See said. But if we can
service you faster, youll probably spend more.
Part of the challenge is
coming up with more things to
sell than standbys such as
beer and T-shirtsespecially
because fans sensibilities can
vary widely. At concerts this
summer at the Jiffy Lube Live
amphitheater in Virginia and
the Jones Beach Theater in
Long Island, N.Y., Mr. See
tested ultra lounges that offered food choices by a chef
trained at Napa Culinary Institute. The package included an
escort to their seats at show
time in an effort to alleviate
all the frictions of coming to
a show.
Still he said they have a
lot of learning to do on the
V.I.P. side as his team mulls
offering various perks for certain shows, such as a wellknown DJ in ultra lounges
geared toward hip-hop fans.
Using Live Nations app,
meanwhile, fans can now see
the food and drink options
available when they enter a
venue and can upgrade their
seats if better ones are available. At some shows this summer they were able to order
food directly to their seats.
BY ERICH SCHWARTZEL
The sleepy movie-theater industry rarely is a player in bigticket deals. But after working
for months to get skeptical investors on board, AMC Entertainment Holdings Inc. appears poised to win shareholder
approval for an acquisition that
would make it the largest exhibitor in the world.
AMC, which is the secondbiggest theater chain in the
U.S., plans to pay $1.2 billion
to acquire Carmike Cinemas
Inc., a tie-up that Carmike
The movie-theater
chain would become
the worlds largest
exhibitor if two deals
receive approval.
shareholders are expected to
vote on Tuesday. The initial
deal, announced in March, was
met with investor backlash
and forced a delay of the vote.
Meanwhile, AMC Chief Executive Adam Aron is pursuing
a second acquisition that
would expand the company to
Europe. The deal is expected
to close by the end of the year.
Two acquisitions at the
same time, said Mr. Aron in a
recent interview. We have a

capital expenditure for each,
so we need to make sure we
raise the funds.
AMCs dealsthe $650 million purchase of Europes
Odeon & UCI Cinemas Group,
in addition to the Carmike acquisitionare expected to take
AMCs theatrical footprint to
about 900 locations, from
about 388. Its stateside merger
with Carmike, currently the
nations No. 4 exhibitor with
273 theaters, is considered the
largest possible tie-up in exhibition that would pass Justice
Department scrutiny.
The deal combines AMC, an
urban-centric chain that has
drawn attention for its recent
state-of the-art auditorium
renovations, with Carmike,
which largely has operated
lower-cost multiplexes in rural
parts of the country.
It has been a long eight
months for AMC, majorityowned by Beijing-based Dalian
Wanda Group Co., since the
Carmike deal was announced.
Shareholder blowback to the
initial offer$30 a share in a
$1.1 billion dealforced the
company to delay votes on the
acquisition, and political opposition began mounting because
of AMCs Chinese ownership.
But now that AMC has come
back with an offer of $33.06 a
share and some AMC stock,
enough support is expected to
win shareholder approval, ac-
cause of the sweetened terms.

They include Magnetar Financial LLC and Driehaus Capital
Management LLC, which
didnt have Carmike stock a
month before the acquisitions
announcement but is now the
companys largest shareholder,
with a stake of just under 10%.
Those late-arriving shareholders have annoyed investors such as Chris Mittleman,
whose Mittleman Brothers
LLC is Carmikes second-largest shareholder with a 9.5%
stake. He said his firm would
vote against the deal.
Among his grievances: Carmike didnt shop itself around
to other companies that could
have run up the bid, and a premium should be offered because
Carmike represents the biggest
possible company that AMC
likely could acquire under antitrust rules. Irate about AMCs
valuation of Carmike, Mr. Mittleman argued that $40 a share
was a minimum fair value. Carmike declined to comment.
Resistance to the deal also
has come from Washington,
D.C., operative Richard Berman, a lobbyist who has
waged a campaign against
AMCs controlling stakeholder,
Wanda. Even if the deal goes
through, Mr. Berman said he
would battle Chinese intrusion
into U.S. media holdings.
Mr. Aron rejected the claim
that Wanda controlled the operations of AMC.
Screen Shot
AMCs acquisitions will boost its
footprint to about 900 theaters
900 theaters
Odeon
800
242
700
Carmike
600
273
500
400
AMC
300
388
200
100
0
2012 13 14 15 16*
Note: Final tally will be smaller after
post-acquisition divestitures.
Source: the company
cording to people familiar with

the matter. The improved
terms helped persuade some
major investors and proxy advisory firms to reverse course
and endorse the deal.
New shareholders who have
come on board since the initial
offer also are helping to muster enough votes to complete
the deal, say people familiar
with the matter.
Several investment firms
specializing in arbitrage bets
have bought into Carmike since
March and now appear likely
to see short-term gains be-
James Fish Jr.

Is Named CEO
Films Doctor Strange,

Trolls Hold the Lead
Moviegoers drained by the
drama of the U.S. presidential
election sought refuge at the
movies over the weekend, where
ticket sales were robust.
Marvels Doctor Strange led
the North American box office
for the second week with $43
million, according to estimates
Sunday. It was an especially
strong hold for the Benedict
Cumberbatch-led
superhero
blockbuster.
Trolls, the musical animated release from 20th Century Fox with Anna Kendrick
and Justin Timberlake, also held
up well in its second week with
$35.1 million, bringing its cumu-
lative domestic total to $94 million.

Denis Villeneuves science-fiction thriller Arrival, starring
Amy Adams, scored the weekends top debut with a betterthan-expected $24 million for
Paramount Pictures.
Opening in fourth was Universal Pictures Almost Christmas, the first holiday-themed
release to hit theaters. The family-gathering comedy, starring
Danny Glover and Gabrielle
Union, made its debut with $15.6
million. Overall, the weekends
results were up about 47% from
last year, according to comScore.
Associated Press
Estimated Box-Office Figures, Through Sunday

FILM
million vehicles in the U.S. are

covered by the settlement, court
filings show.
We want our customers to
have a great ownership experience, so we are pleased to resolve this litigation in a way that
benefits them and demonstrates
that we stand behind the quality
and reliability of our vehicles,
Toyota said.
The settlement was reported
earlier by the Detroit News.
Sara Randazzo
TOYOTA MOTOR
Auto Maker Agrees

To Pay $3.4 Billion
Toyota Motor Corp. has
agreed to pay up to about $3.4
billion to settle claims that certain of its trucks and sport-utility vehicles lacked proper rust
protection, leading to premature
corrosion of vehicle frames.
The deal, filed in U.S. District
Court in Los Angeles this month,
settles litigation in two states
over problems with Toyota Tacoma trucks from model years
2005 to 2010, Tundras from
2007 to 2008 and Sequoias
from 2005 to 2008. Around 1.5
OSRAM LICHT
Union Set to Block

A Potential Sale
Waste Management Inc. selected James Fish Jr. as the companys chief executive, succeeding
longtime CEO David Steiner.
Mr. Fish also has been elected
to the companys board.
Chairman W. Robert Reum said
the move was the culmination of
a succession planning process we
started 18 months ago with the
support of the entire board, on
which Mr. Steiner will remain.
Mr. Steiner served as CEO at
the waste-services company since
2004. Under his tenure, recycling
pressured the top line of the Houston-based trash hauler, but the
company said last month its revenue rose 5.6% as average prices of
recycled commodities rose and recycling volumes improved.
Mr. Fish, 54 years old, has
held several roles since he joined
Waste Management in 2001. Before becoming chief financial officer in 2012, he served as senior
vice president for the companys
eastern group, and area vice
president for Pennsylvania and
West Virginia, among other roles.
The company said it is still
looking for a CFO. Mr. Fish will
continue to lead the finance organization until one is found.
Joshua Jamerson
Trolls features the voices of Anna Kendrick and Justin Timberlake.
SALES, IN MILLIONS
BUSINESS WATCH
WASTE MANAGEMENT
DREAMWORKS ANIMATION/ASSOCIATED PRESS
AMC Is Poised to Take Top Billing
Recycling has pinched Waste Management, but last month the hauler said revenue had risen 5.6%.
A powerful German labor union

said it was prepared to block a potential sale of LED and lighting
specialist Osram Licht AG, which
the union said is better off as a
stand-alone company.
Munich-based Osram has been
the subject of takeover speculation since Chinas Sanan Optoelectronics Co. in October revealed it was in preliminary deal
talks.with the German company.
Osram is in a great position,
with a solid capital structure
and growth potential, said
Juergen Wechsler, regional director of the IG Metall trade
union in Bavaria. We therefore
dont need a partner and are in
a great position.
An Osram spokesman declined to comment.
Eyk Henning
www.ebook3000.com
DISTRIBUTOR
WEEKEND* CUMULATIVE% CHANGE
1. Doctor Strange
Disney
$43.0
2. Trolls
3. Arrival
20th Century Fox $35.1

Paramount
$24.0
4. Almost Christmas Universal

5. Hacksaw Ridge Lions Gate
*Friday, Saturday and Sunday
$15.6
$10.8
$153.0
-49%
$94.0
$24.0
-25%
--
$15.6
$32.3
--29%
Source: comScore
New York Observer

Shuts Print Edition
BY LUKAS I. ALPERT
The New York Observer, the
salmon-colored society paper
owned by President-elect Donald Trumps son-in-law, Jared
Kushner, is closing its weekly
print edition and will go online
only, the company has announced.
In a memo to readers on
Friday, Joseph Meyer, the
chairman and chief executive
of Observer Media, the publications parent company, said
that the move was driven by
market realities as readers migrate online and away from
the printed edition.
We reach more people in
an hour online than we reach
in a week through print, and
will continue to focus on
bringing our content to
readers wherever they are, via
new digital, social, and mobile
platforms, wrote Mr. Meyer,
who is Mr. Kushners brother-
in-law.
Mr. Meyer said the Nov. 9
issue was the Observers last.
In shifting its content entirely
online, New York will be
dropped from the title to reflect the broader national focus of the publication since it
rebranded its website as simply Observer.com in 2015.
Mr. Kushner, the heir to a
real-estate empire founded by
his father and a close adviser
to Mr. Trump, acquired the paper in 2006. In the months
leading up to the election, Mr.
Kushner had reached out to
media
executives
about
launching a television venture
built around Mr. Trumps appeal, people familiar with the
matter had said.
The weekly paper dates to
1987 when it was founded by
former investment banker Arthur Carter to chronicle city
culture, media, politics and
real estate.
GENEROUS FARMERS
ON LONG ISLAND
NY
GENEROUS HELPINGS
ON STATEN ISLAND
Hey New York, nearly 1.4 million people in our city face hunger.
Help City Harvest rescue excess food for our neighbors in need.
Donate at cityharvest.org.
2016 City Harvest
BANKING & FINANCE
Alaskas Bet on Housing Bust Pays Off

Stung by oils decline,
state fund diversified
into rental homes to
yield $300 million gain
BY RYAN DEZEMBER
Oil-rich Alaska has suffered with the collapse in
crude prices. But it offset
some losses with a big wager
on another market that collapsed: housing.
The fund that manages the
states oil royalties four years
ago backed a self-storage
magnate who was buying
hundreds of millions of dollars worth of foreclosed
homes. A year later, the company went public as American Homes 4 Rent. That
company is now the secondlargest owner of rental
homes in the U.S., with more
than 48,000 properties and a
rising stock price recently.
In September, the oil fund
sold the bulk of its American
Homes 4 Rent shares at a
$300 million profit, making
the wager one of Alaskas
top-performing investments
in recent years, according to
securities filings and state records.
Any time we have a large
success like that, its a big
deal, said Randall Hoffbeck,
who heads Alaskas Revenue
Department.
The unconventional housing bet is part of Alaskas
push to diversify the fund,
called Alaska Permanent
Fund, which invests royalties
that energy producers pay
the state, as it seeks to boost
gains amid waning oil revenue.
An oil fund like Alaskas is
rare in the U.S. Much of
Alaskas oil is produced on
state land, meaning royalties
are paid to state coffers instead of to the federal government or individual landowners, as is typical in the
rest of the country.
The Alaska Permanent
Fund, which managed $53.9
billion as of Nov. 9, was cre-
BENCHMARK ALASKAN CRUDE

PRICE PER BARREL
S&P CORELOGIC CASE-SHILLER

U.S. NA
NATIONAL HOME PRICE NSA INDEX
$150
200
100
175
50
150
Northern States
Other Big Wagers
125
5
0
2012
13
14
15
16
2012
13
14
15
16
Sources: Alaska Department of Revenue (oil); S&P Global (homes)

Photo: Trans-Alaska Pipeline near Valdez (Kim Mincer/Planet Pix/Zuma Press)
In addition to its rentalhome holdings, Alaska has

also been making other large
bets unrelated to its traditional investments, such as
stocks, bonds and allocations
to private-equity funds.
A recent success for the
state was a $129 million
investment in Seattle
biopharmaceutical startup
Juno Therapeutics Inc.
Alaska this year sold
about one-third of its stake in
the company for $335 million;
it still holds shares worth
more than $500 million.
Junos shares, which closed at
$31.68 Friday, are down 28%
year to date.
Not all wagers have
worked so well. The funds
$385 million stake in a
London-listed fund that
invests in energy deals
alongside private-equity firm
Riverstone Holdings LLC has
lost value during the energy
bust.
In recent years, the funds
investment profits have exceeded all other state income,
including oil revenue.
Ryan Dezember
Much of Alaskas oil is produced on state land, meaning royalties are paid to state coffers. Above, the Trans-Alaskan Pipeline.
ated in 1976 to bank some of
the royalties paid to the state
by oil companies following
huge crude discoveries in the
states North Slope.
Those finds have supported the states economy
for the past four decades, but
Alaskas oil production has
dwindled in recent years as
oil companies turned their
attention to reservessuch
as shale fields in the continental U.S.that were easier
and cheaper to bring to market.
As oil prices have fallen
from more than $100 a barrel
in mid-2014 to less than $50,
Alaskas revenue has declined
80% over the past two years,
state officials say.
To save cash, Alaska has
eliminated hundreds of jobs,

ended educational programs
and even cut back on snow
plowing. Gov. Bill Walker in
September announced the unprecedentedand unpopularstep of cutting in half
the annual dividend payment
the Permanent Fund paid to
residents. The Fund sent each
resident a $1,022 check this
year, for a total cost of about
$696 million.
In 2012, the funds managers were particularly eager to
capitalize on the epic dislocation in the housing market, said Steve Moseley, who
joined the fund in late 2013
to manage certain investments including the housing
bet.
The funds trustees were
initially skeptical about buying thousands of homes, according to minutes from the
groups meetings. One trustee
said it felt more like buying a
concept rather than assets.
Owning and renting singlefamily homes had been primarily a local, mom-and-pop
business. But Wall Street
jumped in after the financial
crisis when millions of Americans lost their homes to
foreclosure and huge numbers of homes could be
bought for less than they cost
to build. Blackstone Group LP,
Starwood Capital Group and
others raced to courthouse
steps to buy foreclosed
homes in bulk.
Eventually the Alaska
trustees came around, per-
suaded by B. Wayne Hughes,

who made a fortune turning
self-storage units into Public
Storage, a real-estate investment trust with a $37 billion
stock-market value. He was
looking for cash to make a
big housing bet.
It was a bold and unusual
move, Mr. Moseley said of
the trustees decision to join
Mr. Hughes, and they put
real money behind it.
Mr. Hughes, now 83 years
old and chairman of American Homes 4 Rent, told Permanent Fund officials he
wanted to identify the most
desirable tenants and then
find the sort of homes they
would want to live in, according to fund meeting minutes.
He focused on families with
school-age children and annual incomes of around

$85,000.
The Alaska fund eventually
wagered more on his idea,
buying additional shares in
American Homes 4 Rents
2013 initial public offering
and launching a separate
$200 million venture with
the company to buy upscale
homes. Overall, the fund invested $925 million with Mr.
Hughes and continues to hold
about 1.7 million shares as
well as its interest in the
high-end rental venture.
After a few years of essentially flat trading, its shares
have risen about 23% this
year, giving Alaska an opportunity to pocket some of its
gains.
Insurers Draw Hope From Trump

BY LESLIE SCISM
Insurers are hoping that in
a Trump administration they
will be deemed less important, systemically, that is.
Three of the biggest insurers were designated as systemically important financial
institutions, or SIFIs, in 2013
and 2014 by a panel of federal
regulators created under the
2010 Dodd-Frank regulatoryoverhaul law. Because of the
designation, American International Group Inc. and Prudential Financial Inc. face
stiffer regulation and capital
cushions than peers, though
final rules are still being
crafted.
MetLife Inc. was similarly
tagged but went to court and
won a ruling in March rescinding the label on the basis of a
flawed designation process.
The government is appealing.
A Trump presidency, industry experts and investors say,
could mean a friendlier regulatory environment. President-elect Donald Trump told
The Wall Street Journal on
Friday he planned on deregu-
A Very Good Week

Insurance stocks rallied on prospects
for less regulation and higher bond
yields in a Trump administration.
Stock performance
16%
14
MetLife
12
Prudential
Financial
10
8
6
4
2
S&P 500
0
Nov. 4
Source: WSJ Market Data Group
lating financial institutions.

Mr. Trumps team, people familiar with the matter said, is
focused on rescinding certain
Dodd-Frank provisions Republicans find most objectionable,
such as the Financial Stability
Oversight Councils authority
to designate large nonbanks
systemically important.
Since Tuesdays close,
shares of MetLife have advanced 12%, Prudentials are

up 10% and AIGs have advanced 6.4%, while the
broader market is up 1.2%, according to FactSet.
MetLife Chief Executive
Steven Kandarian briefly addressed the elections impact
at an investor event Thursday,
saying it may result in a
more constructive approach
at the federal level.
In addition, some analysts
think new conflict-of-interest
regulations issued in April by
the Labor Department designed to protect retirees
from unnecessarily expensive
investment products could
also be pulled back. If so, that
shift could benefit insurers
selling
commission-based
variable and indexed annuities.
More generally, insurers
are already benefiting from
upward movement in the 10year Treasury yield, which on
Thursday reached 2.118%, up
from 1.867% on Tuesday. The
U.S. bond market was
closed Friday for Veterans
Day.
Hary Tanoesoedibjo
and MNC Group Indonesia
would like to
congratulate Mr. Donald J. Trump

as President-elect of
the United States of America.
We look forward to continuing
FINANCE WATCH
STATE BANK OF INDIA
WOORI BANK
Quarterly Profit
Declines 35%
Seoul Cuts Its Stake

In Lender With Sale
State Bank of India, the

countrys biggest lender, reported
a 35% drop in its fiscal secondquarter net profit as it set aside
more funds for rising bad loans.
The bank reported a net
profit of 25.38 billion rupees
($376 million) in the three
months ended Sept. 30, compared with 38.79 billion rupees a
year earlier. That met the 25.33
billion rupees that was the average forecast of analysts polled
by Thomson Reuters.
The bank reported a net interest income of 144.38 billion rupees during the July-September
period, marginally up from 142.53
billion rupees a year earlier.
However, its gross bad loans
rose to 7.14% of total lending,
from 4.15% a year earlier. It was
6.94% in the preceding quarter.
Debiprasad Nayak
South Koreas government

has sold a $2.1 billion stake in
Woori Bank to multiple investors,
according to the countrys top financial regulator. The sale is the
governments latest move to privatize the lender and recoup
some of the taxpayer money it
used to bail out the bank some
two decades ago.
The Financial Services Commission said Sunday that the
sale of the 29.7% stake in
tranches to seven successful bidders, including Chinese-owned
Tong Yang Life Insurance Co., will
reduce state-run Korea Deposit
Insurance Corp.s share in Woori
to 21% from 51% previously.
The Korea Deposit Insurance
Corp. can collect 2.4 trillion won
(about $2.1 billion) from the latest stake sale, raising the total
of recouped bailout money to
our fruitful partnerships

10.6 trillion won83.4% of the
public funds injected into Woori.
The FSC said the government
would continue efforts to sell its
remaining share in Woori and
keep its promise to return the
bank to private hands as soon as
possible.
The Seoul government spent
12.8 trillion won of taxpayers
money to bail out troubled local
financial firms in the wake of the
1997-1998 Asian financial crisis.
Woori was established in 2001
as their holding company. The
Korea Deposit Insurance Corp.
once owned 100% of Woori but
gradually cut down its holdings
in favor of privatization.
The seven successful bidders
for the stake are Tong Yang Life
Insurance, owned by Chinas Anbang Insurance Group; Eugene
Asset Management; Hanwha Life
Insurance; Kiwoom Securities;
IMM Private Equity; Mirae Asset
Global Investments and Korea Investment & Securities.
Kwanwoo Jun
and building a stronger relationship

between the United States and Indonesia.
www.ebook3000.com
MARKETS DIGEST
Dow Jones Industrial Average
New to the Market
S&P 500 Index

Last Year ago
18847.66 s 959.38, or 5.36% last week Trailing P/E ratio * 20.08

P/E estimate *
17.66
High, low, open and close for each of
Dividend
yield
2.52
the past 52 weeks
16.61
15.67
2.52
All-time high 18847.66, 11/11/16
Current divisor 0.14602128057775
Last
2164.45 s 79.27, or 3.80% last week

High, low, open and close for each of
the past 52 weeks
Year ago
Trailing P/E ratio * 23.99 22.70

P/E estimate *
18.05 17.25
Dividend yield
2.17
2.11
All-time high: 2190.15, 08/15/16
19200
2150
200-day moving average
18600
2100
18000
2050
17400
2000
16800
1950
Week's high
UP
Friday's close
DOWN
Monday's open
Monday's open 16200
Friday's close
Week's low
1900
15600
1850
15000
1800
N
t
Primary
market
NYSE weekly volume, in billions of shares
N D
Composite
Koch Industries Inc. has agreed to purchase buildingproducts and paper maker Georgia-Pacific Corp. for $13.2
billion.
Major U.S. Stock-Market Indexes
Nasdaq Composite
Latest Week
Close
Net chg
Low
% chg
52-Week
Close (l)
Low
Dow Jones
Industrial Average 18873.66 17994.64 18847.66
Transportation Avg 8611.17 8116.68 8578.65
Utility Average
671.59 621.54
627.82
Total Stock Market 22569.15 21729.69 22440.45
566.59
Barron's 400
566.92 530.69
5.36
6.24
959.38
503.51
-25.45
926.30
43.37
4.31
8.29
15660.18
6625.53
551.13
18663.11
446.15
3.78
1.96
4266.84
3947.80
-3.90
High
l 18847.66
l 8578.65
l
723.51
l 22658.47
l
566.59
s 190.74, or 3.78%
% chg
YTD 3-yr. ann.
% chg
9.3
7.1
12.0
7.1
8.7
8.2
14.2
8.7
6.3
9.7
6.1
6.8
7.7
6.5
5.1
6.3
5.5
4.6
3.5
10.1
12.2
last week
5300
5302.68 5122.77
4855.79 4685.74
5237.11
4751.95
190.74
91.49
5339.52
4909.97
5100
Standard & Poor's

2164.45
1562.99
781.84
79.27
84.16
74.67
3.80
5.69
10.56
1829.08
1238.82
588.26
Russell 2000
1282.82 1164.57 1282.38
NYSE Composite
10735.00 10416.34 10652.24
Value Line
485.04 456.36
484.80
NYSE Arca Biotech 3438.33 2935.22 3378.03
NYSE Arca Pharma
503.16 470.89
492.99
KBW Bank
82.74
74.34
82.67
PHLX Gold/Silver
92.36
77.51
78.05
PHLX Oil Service
160.05 149.49
156.65
PHLX Semiconductor 838.02 798.20
837.24
14.17
CBOE Volatility
21.48
13.26
118.94
362.89
28.44
490.85
25.87
9.31
-11.07
6.80
34.37
-8.34
10.22
3.53
6.23
17.00
5.54
12.69
953.72
9029.88
383.82
2642.53
464.16
56.51
38.84
128.61
559.18
11.34
2182.30 2100.59
1563.92 1498.03
782.31 714.96
500 Index
MidCap 400
SmallCap 600
-12.42
4.54
4.28
-37.05
Philadelphia Stock Exchange
2190.15
1581.51
l
781.84
7.0
11.2
15.7
l 1282.38
l 10890.79
11.8
4.9
7.5
-6.8
-6.1
12.2
71.3
-10.4
30.1
-29.4
5.9
11.8
16.4
6.9
6.6
7.3
l
l
l
l
l
l
489.19
3868.26
554.66
l
82.67
112.86
180.73
l
838.6
28.14
International Stock Indexes
DJ TSM
Americas
Brazil
Canada
Mexico
Chile
Close
The Global Dow

DJ Global Index
DJ Global ex U.S.
Global Dow Euro
2441.45
316.42
208.91
2117.80
Global
Global ex U.S.
Developed ex U.S.
Global Small-Cap
Global Large-Cap
3259.63
2109.86
2059.74
4461.93
3089.44
DJ Americas
Sao Paulo Bovespa
S&P/TSX Comp
IPC All-Share
Santiago IPSA
520.49
59183.51
14555.41
44978.25
3230.85
Stoxx Europe 600

Stoxx Europe 50
Eurozone
Euro Stoxx
Euro Stoxx 50
Belgium
Bel-20
France
CAC 40
Germany
DAX
Israel
Tel Aviv
Italy
FTSE MIB
Netherlands AEX
Spain
IBEX 35
Sweden
SX All Share
Switzerland Swiss Market
U.K.
FTSE 100
Asia-Pacific
Australia
China
Hong Kong
India
Japan
Singapore
South Korea
Taiwan
Latest Week
% chg
337.50
2810.87
324.14
3030.02
3491.41
4489.27
10667.95
1424.94
16812.37
445.41
8639.20
506.67
7880.29
6730.43
Europe
DJ Asia-Pacific TSM 1427.20

S&P/ASX 200
5370.70
Shanghai Composite 3196.04
Hang Seng
22531.09
S&P BSE Sensex
26818.82
Nikkei Stock Avg
17374.79
Straits Times
2814.60
Kospi
1984.43
Weighted
8957.76
52-Week Range
Close
Low
2.15
1.56
0.90
4.67
1.73
0.91
0.31
2.47
1.60
3.34
3.92
0.32
3.68
1.49
2.65
2.96
1.95
2.56
1.51
2.55
3.98
2.69
3.03
1.11
1.73
2.01
3.78
0.56
1.11
3.67
2.26
0.49
1.67
2.78
0.93
0.12
1.22
2047.44
272.15
184.52
1699.54
2795.15
1863.63
1843.94
3665.30
2667.12
433.35
37497.48
11843.11
40265.37
2759.77
303.58
2566.26
284.92
2680.35
3130.76
3896.71
8752.87
1382.34
15104
382.61
7645.5
435.21
7496.62
5536.97
1190.45
4765.3
2655.66
18319.58
22951.83
14952.02
2532.70
1835.28
7664.01
YTD
% chg
High
2489.83
328.12
222.45
2141.23
4.5
2.7
0.6
4.6
3376.69
2245.72
2184.88
4630.74
3200.14
2.9
0.6
2.3
5.9
2.5
529.33
64924.52
14939.04
48694.90
3358.44
6.8
36.5
11.9
4.7
9.8
385.43 7.7
3293.71 9.3
365.68 6.1
3506.45 7.3
3760.89 5.6
4957.60 3.2
11382.23 0.7
1576.14 6.8
22718 21.5
472.24
0.8
10386.9 9.5
528.37
0.3
9016.56 10.6
7097.50
7.8
1498.20
5587.4
3651.77
24099.70
29045.28
20012.40
2960.78
2068.72
9385.65
2.7
1.4
9.7
2.8
2.7
8.7
2.4
1.2
7.4
Source: SIX Financial Information;WSJ Market Data Group
Consumer Rates and Returns to Investor
s 926.30, or 4.31%
New car loan
Prime rate
t
3.50
22500
22100
21700
4 7 8 9 10 11
November
LightStream
San Diego, CA
1.74%
866-619-2688
Think Mutual Bank

Rochester, MN
1.89%
800-288-3425
First Savings Bank of Hegewisch

1.99%
Chicago, IL
773-646-4200
2.50
Pentagon Federal Credit Union

1.99%
Alexandria, VA
877-412-4381
2.00
D J FMAM J J A S O N
2016
2.98%
Bankrate.com avg:
2.09%
PNC Bank
Hayesville, NC
Yield/Rate (%)
Last (l)Week ago
Federal-funds rate target

0.25-0.5 0.25-0.5
Prime rate*
3.50
3.50
Libor, 3-month
0.88
0.91
Money market, annual yield
0.27
0.26
Five-year CD, annual yield
1.21
1.21
30-year mortgage, fixed
3.61
3.86
15-year mortgage, fixed
2.86
2.99
Jumbo mortgages, $417,000-plus 4.50
4.34
Five-year adj mortgage (ARM) 3.35
3.15
New-car loan, 48-month
2.95
2.98
HELOC, $30,000
4.75
4.71
3-yr chg
52-Week Range (%)
Low 0 2 4 6 8 High (pct pts)
0.00 l
3.25
0.36 l
0.22 l
1.17 l
3.43
2.70
4.02
2.97
2.87
4.29
l
l
l
l
l
l
0.50
3.50
0.91
0.29
1.42
4.08
3.34
4.70
3.86
3.38
5.01
21300
9/21
Last Week
Close Net chg %Chg
DJ Commodity
TR/CC CRB Index
Crude oil, $ per barrel
YTD
% chg
533.08
180.74
6.01 1.14 17.47

-1.76 -0.97 2.54
43.41
-0.66 -1.50 17.20
Natural gas, $/MMBtu 2.619 -0.148 -5.35 12.07

Gold, $ per troy oz.
1223.50 -79.80 -6.12 15.39
U.S. Dollar Index
98.99
2.10
2.17
WSJ Dollar Index
89.65
2.12
2.42 -0.58
0.30
Euro, per dollar
0.9211 0.0235
2.62
Yen, per dollar

U.K. pound, in dollars
106.68
3.56
3.46 -11.32
1.26
0.01
0.59 -14.54
52-Week
Low Close(l) High
0.04
% Chg
552.44 12.31
DJ Commodity
420.23
TR/CC CRB Index
155.01
Crude oil, $ per barrel 26.21
Natural gas, $/MMBtu
1.64
3.34 10.93
1050.80
1364.90 13.20
Gold, $ per troy oz.

U.S. Dollar Index
92.57
WSJ Dollar Index
84.64
Euro, per dollar
0.87
Yen, per dollar
99.88
U.K. pound, in dollars
1.21
195.82 -2.18
51.60
l
l
100.20
6.55
0.19
0.25
0.25
0.67
-0.16
-0.16
-0.62
-0.53
-0.14
-0.39
0.02
-0.35
Bankrate.com rates based on survey of over 4,800 online banks. *Base rate posted by 70% of the nation's largest
banks. Excludes closing costs.
Sources: SIX Financial Information; WSJ Market Data Group; Bankrate.com
5.00%
123.64 -13.00
Lockup
expiration Issue date
18%
12
3.00
One year ago
2.00
1.00
Thursday
1
3 6
month(s)
1 2 3 5 710
years
maturity
0.00
s Yen
Offer Offer amt Through Lockup

Symbol price($) ($ mil.) Friday (%) provision
Issuer
SUPV
11.00
322.6
30.6
180 days
MRUS
10.00
61.4
74.0
180 days
May 18, 16 PhaseRx
PZRX
5.00
18.5
75.2
180 days
Nov. 20 May 24, 16 Midland States Bancorp MSBI
22.00
92.1
24.6
180 days
IPO Scorecard
Performance of IPOs, most-recent listed first
Smart Sand
SND Nov. 4/$11.00
GDS Hldgs
GDS Nov. 2/$10.00
Acushnet
GOLF Oct. 28/$17.00
11.36
3.3
3.4
9.65
3.5
7.3
18.46
8.6
2.8
BlackLine
BL Oct. 28/$17.00
23.89
40.5
Quantenna Comm
QTNA Oct. 28/$16.00
16.19
1.2
s WSJ Dollar index
Corporate Borrowing Rates and Yields

Spread +/- Treasurys,
Yield (%)
in basis pts, 52-wk Range
Last Wk ago
Last
Low High
10-yr Treasury, Ryan ALM

DJ Corporate
Aggregate, Barclays Capital
High Yield 100, Merrill Lynch
Fixed-Rate MBS, Barclays
Muni Master, Merrill
EMBI Global, J.P. Morgan
2.118
2.917
2.340
6.163
2.550
1.849
5.871
44
460
13
5
374
44
400
10
-9
348
70
741
31
5
538
Myovant Sciences
MYOV Oct. 27/$15.00
ZTO Express
ZTO Oct. 27/$19.50
Ra Pharmaceuticals
RARX Oct. 26/$13.00
11.53 23.1 13.0
13.31
2.4
2.4
0.8
Forterra
FRTA Oct. 20/$18.00
18.41
2.3
11.6
4.5
iRhythm Tech
IRTC Oct. 20/$17.00
24.23
42.5
7.0
14.58 25.2 12.0
Other Stock Offerings

Secondaries and follow-ons expected this week in the U.S. market
Symbol/
Primary Amount
exchange ($mil.)
Nov. 15
PetroShare
Oil & Gas
Nov. 16
Sanchez Production Partners SPP

Oil & Gas
A
PRHR
A
Fridays
price ($) Bookrunner(s)
8.7
1.85
Roth Cptl Ptnrs
150.0
15.35
Johnson Rice & Co, Citi,

RBC Cptl Mkts, BofA ML
Shelf registrations allow a company to prepare a stock or bond for

sale, without selling the whole issue at once. Corporations sell as
conditions become favorable. Here are the shelf sales, or takedowns,
over the last week:
Issuer/Industry
Takedown date/ Deal value Registration

Registration date ($ mil.)
(mil.)
PRA Health Sciences

Healthcare
Nov. 10
March 2,316
$421.9
...
Northwest Natural Gas

Utility & Energy
Nov. 10
Nov. 8,316
$48.1
$30.5
WFS, JPM,
RBC Cptl Mkts
Bovie Medical
Healthcare
Nov. 10
Dec. 16,314
$12.0
$25.0
Piper Jaffray
$1,292.5 $15,799.8
Sources: J.P. Morgan; Ryan ALM; S&P Dow Jones Indices; Barclays Capital; Merrill Lynch
GS
Nov. 9
March 16,316
$416.3
...
MS, Barclays
Summit Materials
Construction/Building
Nov. 9
April 13,316
$367.2
...
Barclays
Public and Private Borrowing

Treasurys
Monday, November 14
Thursday, November 17
Auction of 13-week & 26-week bills;

announced on Nov.10; settles on Nov.17
Auction of 10-year tips;

Tuesday, November 15
Auction of four-week bills;
Public and Municipal Finance

Deals of $ 150 million or more expected this week
Sale
Final
maturity Issuer
Total
($mil.)
Rating
Bookrunner/
Fitch Moodys S&P Bond Counsel(s)
Nov. 14 prelim.
Pennsylvania
Turnpike
Commission
186.3 N.R.
N.R.
Nov. 15 prelim.
King Public
Hospital Dt #1
186.7 N.R.
A2
Nov. 15 June 1, 2046 Massachusetts
200.0 N.R.
Aa1
AAA Preliminary/
Locke Lord LLP
Nov. 15 June 1, 2046 Washington

Suburban
Sanitary Dt
381.8 AAA
Aaa
AAA Preliminary/
McKennon
Shelton&Henn
Nov. 17 prelim.
Clark SD
510.8 N.R.
A1
AA- Preliminary/
Nov. 18 prelim.
Cincinnati
City-Ohio
192.9 N.R.
N.R.
N.R. M. Stanley/
Nov. 18 prelim.
Columbia CitySouth Carolina
176.6 N.R.
N.R.
N.R. Raymond
James/
Nov. 18 Nov. 15, 2032 Denver City

and CoColorado
250.0 N.R.
N.R.
N.R. RBC Cptl Mkt/

Hogan Lovells US
Becker Stowe & Bieber
Nov. 18 prelim.
Fort Bend
(Katy) ISD
225.0 N.R.
N.R.
N.R. J P Morgan
Securities
Nov. 18 prelim.
Los Angeles
Metro Trans
Auth
515.0 N.R.
N.R.
N.R. BoA Merrill/
Nov. 18 prelim.
Philadelphia
CoPennsylvania
283.1 N.R.
N.R.
N.R. RBC Cptl Mkt
Nov. 18 prelim.
Richmond CoVirginia
450.0 N.R.
N.R.
N.R. Wells Fargo & Co
Nov. 18 prelim.
Salt River Proj

Agric Imp &
Pwr Dt
719.8 N.R.
N.R.
N.R. M. Stanley/
Chiesa Shahinian
& Giantomasi
Nov. 18 prelim.
TSASC
1,024.4 N.R.
N.R.
Total Return
52-wk
3-yr
3.37 3.89
6.82 4.96
3.76 3.30
7.560 2.909
3.05 3.33
2.998 4.099
9.468 5.884
Bookrunner(s)
MS
US Silica Holdings
Oil & Gas
Sources: Ryan ALM; Tullett Prebon; WSJ Market Data Group
Bond total return index
% Chg From
Friday3s Offer 1st-day
close ($) price close
Company SYMBOL
IPO date/Offer price
Sources: WSJ Market Data Group; FactSet Research Systems
2016
1.783
2.730
2.100
6.217
2.270
1.677
5.543
% Chg From
Friday3s Offer 1st-day
close ($) price close
Company SYMBOL
IPO date/Offer price
s Euro
12
30
12.00/ Roth Cptl Ptnrs

14.00
May 18, 16 Merus
1.53 -17.35
Yen, euro vs. dollar; dollar vs.

major U.S. trading partners
4.00
2.0
Below, companies whose officers and other insiders will become eligible
to sell shares in their newly public companies for the first time. Such
sales can move the stocks price.
0.95 -0.76
l
l
Plus, get deeper money-flows data and

email delivery of key stock-market
data.
All are available free at
WSJMarkets.com
Yield to maturity of current bills,

notes and bonds
SNES
Nq
Bookrunner(s)
10.00/ Stifel, FBR Cptl Mrkts,

10.00 Stephens
Lockup Expirations
91.66 -0.55
Real-time U.S. stock

quotes are available on
WSJ.com. Track mostactive stocks, new
highs/lows, mutual
funds and ETFs.
WSJ
.COM
15.0
Senestech
Developer of chemicals to
manage animal pest
populations.
Hilton Worldwide Holdings Nov. 9

Dining & Lodging
May 11,316
Benchmark Yields and Rates

Treasury yield curve Forex Race
3.00
New car loan
11/15
IGLEU
Nq
Off the Shelf
Commodities and
Currencies
Selected rates
A consumer rate against its

benchmark over the past year
Interest rate
last week
12.9
5.2
5.0
2.0
8.7
1.2
-11.4 16.3
-8.9
2.8
13.1
7.9
72.3 -5.6
-0.7 -18.6
26.2 18.7
-22.2
4.2
U.S. consumer rates
4.00%
10/14 Eagleline Acquisition

Blank check company.
Expected Issuer/Business
DJ US TSM
Sources: SIX Financial Information; WSJ Market Data Group
Region/Country Index
11/14
5000
4 7 8 9 10 11
November
Other Indexes
World
Symbol/
Pricing
primary Shares Range($)
exchange (mil.) Low/High
Issuer/business
5200
Nasdaq Stock Market

Nasdaq Composite
Nasdaq 100
Expected
pricing date Filed
Sources: Dealogic; WSJ Market Data Group
* P/E data based on as-reported earnings from Birinyi Associates Inc.
High
Initial public offerings of stock expected this week; might include some
offerings, U.S. and foreign, open to institutional investors only via the
Rule 144a market; deal amounts are for the U.S. market only
Financial Flashback
The Wall Street Journal, November 14, 2005
30
20
10
0
N D
IPOs in the U.S. Market
Nov. 14 May 18, 16 Grupo Supervielle
Bars measure the point change from Monday's open

N D
Public Offerings of Stock
N.R. Loop Capital

Markets/
M. Stanley/
Foster Pepper
N.R. Jefferies
Source:Thomson Reuters/Ipreo
Corporate Debt
Expected this week
Expected
wk ending Issuer/Business
Nov. 17
Years to Deal value

Rating
maturity ($ mil.)
Fitch Moodys S&P Bookrunner(s)
Envision Healthcare

Outsourced medical services. HY
HY- High-yield index
$750.0
B3
Barclays, JPM,
SunTrust, WFS
Source: Dealogic
NY
CLOSED-END FUNDS
Listed are the 300 largest closed-end funds as
measured by assets.
Closed-end funds sell a limited number of shares and
invest the proceeds in securities. Unlike open-end
funds, closed-ends generally do not buy their shares
back from investors who wish to cash in their holdings.
Instead, fund shares trade on a stock exchange.
a-The NAV and market price are ex dividend. b-The
NAV is fully diluted. c-NAV is as of Thursdays close. dNAV is as of Wednesdays close. e-NAV assumes rights
offering is fully subscribed. f-Rights offering in process.
g-Rights offering announced. h-Lipper data has been
adjusted for rights offering. j-Rights offering has
expired, but Lipper data not yet adjusted. l-NAV as of
previous day. o-Tender offer in process. v-NAV is
converted at the commercial Rand rate. w-Convertible
Note-NAV (not market) conversion value. y-NAV and
market price are in Canadian dollars. NA signifies that
the information is not available or not applicable. NS
signifies fund not in existence of entire period.
12 month yield is computed by dividing income
dividends paid (during the previous twelve months for
periods ending at month-end or during the previous
fifty-two weeks for periods ending at any time other
than month-end) by the latest month-end market price
adjusted for capital gains distributions.
Source: Lipper
Friday, November 11, 2016
52 wk
Prem Ttl
Fund (SYM)
NAV Close /Disc Ret
General Equity Funds
Adams Divers Equity Fd ADX 15.62 13.02 -16.6 4.9
Boulder Growth & Income BIF 10.74 8.50 -20.9 18.2
Central Securities CET 26.04 20.94 -19.6 10.9
CohSteer Opprtnty Fd FOF 12.61 11.47 -9.0 13.6
Cornerstone Strategic CLM 13.06 15.11 +15.7 15.2
EtnVnc TaxAdvDiv EVT
19.75 NA 11.6
Gabelli Dividend & Incm GDV 21.24 19.09 -10.1 12.2
Gabelli Equity Trust GAB 5.76 5.31 -7.8 9.4
Genl American Investors GAM 36.90 29.88 -19.0 -4.0
HnckJohn TxAdv HTD 24.02 21.50 -10.5 12.7
Liberty All-Star Equity USA 5.96 4.95 -16.9 4.6
Royce Micro-Cap RMT 9.34 7.77 -16.8 17.0
Royce Value Trust RVT 15.13 12.65 -16.4 17.3
Source Capital SOR 40.59 35.98 -11.4 8.0
Tri-Continental TY
25.25 21.16 -16.2 10.3
Zweig Fund ZF
12.80 NA NA NA
Specialized Equity Funds
Adams Natural Rscs Fd PEO 23.12 19.30 -16.5 4.6
AllnzGI NFJ Div Interest NFJ 14.42 12.48 -13.5 11.4
AlpnGlblPrProp AWP 6.12 5.08 -17.0 -1.3
ASA Gold & Prec Metals ASA
11.62 NA 61.2
BlkRk Enh Cap Inco CII 14.57 12.98 -10.9 1.1
BlkRk Engy Res Tr BGR 15.04 13.58 -9.7 2.4
BlackRock Enh Eq Div Tr BDJ 8.86 7.75 -12.5 12.3
Blackrock Global Trust BOE 13.26 11.48 -13.4 1.1
BlkRk Health Sci BME 32.74 35.70 +9.0 6.3
BlkRk Intl Grwth&Inco BGY 6.27 5.45 -13.1 -2.3
BlackRck Rscs Comm Str Tr BCX 9.31 7.87 -15.5 21.1
BlackRock Science & Tech BST 19.90 18.10 -9.0 13.7
BlackRock Utility & Infr BUI 18.50 17.88 -3.4 16.2
CBREClarionGlblRlEstIncm IGR 8.46 7.23 -14.5 5.7
Central Fund of Canada CEF 13.81 NA NA NA
ClearBridge Amer Engy CBA
8.62 NA -10.1
ClearBridge Engy MLP Fd CEM 16.22 15.07 -7.1 -12.2
Clearbridge Engy MLP Opp EMO 13.69 13.18 -3.7 -5.9
Clearbridge Engy MLP TR CTR 13.78 12.50 -9.3 -4.8
Cohen & Steers Infr Fd UTF 21.56 19.69 -8.7 13.0
C&S MLP Incm & Engy Opp MIE 11.57 10.00 -13.6 -0.3
Cohen & Steers Qual Inc RQI 12.73 11.64 -8.6 14.9
CohnStrsPfdInco RNP 21.24 18.26 -14.0 14.3
Cohen & Steers TR RFI 12.84 11.81 -8.0 8.4
CLSeligmn Prem Tech Gr Fd STK 17.30 17.92 +3.6 11.3
Divers Real Asset Incm Fd DRA 18.01 15.47 -14.1 5.1
Duff & Phelps DNP
8.89 10.00 +12.5 17.0
Duff&PhelpsGblUtilIncFd DPG 17.25 14.68 -14.9 7.7
Eaton Vance Eqty Inco Fd EOI
11.96 NA 3.9
Eaton Vance Eqty Inco II EOS
13.12 NA 7.7
EtnVncRskMngd ETJ
8.84 NA -1.3
Etn Vnc Tax Mgd Buy-Write ETB
16.37 NA 12.1
Eaton Vance BuyWrite Opp ETV
14.69 NA 8.4
Eaton Vance Tax-Mng Div ETY
10.21 NA 2.7
EatonVanceTax-MngdOpp ETW
10.52 NA 1.7
EtnVncTxMngGlDvEqInc EXG
8.13 NA 0.7
Fiduciary/Clymr Opp Fd FMO 14.16 15.00 +5.9 18.2
FT Energy Inc & Growth Fd FEN 24.26 24.75 +2.0 15.7
FstTrEnhEqtIncFd FFA 14.97 13.18 -12.0 7.9
First Tr Engy Infr Fd FIF 18.49 17.16 -7.2 21.7
First Tr MLP & Engy Incm FEI 14.97 15.42 +3.0 18.2
Gabelli Hlthcr & Well GRX 10.72 9.71 -9.4 1.8
Gabelli Utility Tr GUT 5.14 6.41 +24.7 24.1
GAMCOGlblGoldNatRscs&Inc GGN 5.62 NA NA NA
GoldmanSachsMLPIncOpp GMZ
9.09 NA -1.7
Goldman Sachs MLP Energy GER
6.90 NA -7.0
John Hancock Finl Opps Fd BTO 31.03 31.48 +1.5 19.7
KayneAndersonEngyTRFd KYE 12.17 10.99 -9.7 -9.5
Kayne Anderson MLP Invt KYN 18.58 19.58 +5.4 11.1
52 wk
Prem Ttl
Fund (SYM)
NAV Close /Disc Ret
Kayne Andrsn Midstr Engy KMF 16.21 14.55 -10.2 -4.8
Macquarie Glbl Infrstrctr MGU 22.23 18.92 -14.9 3.6
NeubergerBermanMLPIncm NML 9.79 8.78 -10.3 -9.7
Neubrgr Brm Rl Est Sec Fd NRO 5.54 5.08 -8.3 16.3
Nuveen Dow 30 Dynamic DIAX 16.25 14.34 -11.8 9.8
NuvCorEqAlpha JCE 14.16 13.15 -7.1 4.1
NuvDivInco JDD
12.26 11.00 -10.3 14.1
Nuveen Engy MLP Fd JMF 12.79 12.98 +1.5 18.9
NuvNASDAQ100DynOver QQQX 19.57 18.34 -6.3 3.9
Nuveen Real Estate Fd JRS 10.97 10.02 -8.7 7.2
NuvS&P500DynOverwrite SPXX
13.56 NA 8.6
NuveenS&P500Buy-Write BXMX 13.47 12.69 -5.8 6.9
Reaves Utility Fund UTG 31.07 28.92 -6.9 7.1
Tekla Hlthcr Investors HQH 24.49 24.05 -1.8 -12.9
Tekla Healthcare Opps Fd THQ 17.84 16.53 -7.3 8.2
Tekla Life Sciences HQL 19.78 18.65 -5.7 -13.2
Tekla World Hlthcr Fd THW 15.06 14.18 -5.8 -0.4
Tortoise Engy Ind Fd NDP 15.82 15.51 -2.0 31.9
Tortoise Energy TYG 28.71 30.31 +5.6 19.1
Tortoise MLP Fund NTG 19.10 19.21 +0.6 28.1
Voya Gl Equity Div IGD 7.76 6.87 -11.5 7.9
Income Preferred Stock Funds
Calamos Strat Fd CSQ 11.21 9.92 -11.5 13.0
Cohen & Steers Dur Pfd LDP 25.91 23.28 -10.2 12.5
Cohen & Strs Sel Prf Inco PSF 26.69 25.31 -5.2 11.4
FT Interm Duration Pfd FPF 23.42 21.23 -9.4 7.2
Flaherty & Crumrine Dyn DFP 24.46 22.66 -7.4 7.0
Flaherty & Crumrine Pfd FFC 18.82 19.36 +2.9 4.2
John Hancock Pfd Income HPI 20.95 19.55 -6.7 7.3
John Hancock Pfd II HPF 20.70 19.55 -5.6 9.0
John Hancock Pfd Inc III HPS 18.40 16.69 -9.3 5.8
JHancock Pr Div PDT 15.21 13.49 -11.3 10.6
LMP Cap & Inco Fd SCD 14.97 12.57 -16.0 12.6
Nuveen Preferred & Incm JPI 24.12 22.64 -6.1 7.5
Nuveen Preferred Inc Opp JPC 10.19 9.03 -11.4 7.8
Nuveen Preferred Incm Fd JPS 9.51 8.71 -8.4 4.2
TCW Strategic Income Fund TSI 5.91 5.22 -11.7 2.8
Virtus Global Dividend ZTR 12.48 NA NA NA
Convertible Sec's. Funds
AdvntClymrFd AVK
13.50 NA 8.4
AllianzGI Conv & Incm NCV 6.41 5.99 -6.6 19.3
AllianzGI Conv & Incm II NCZ 5.72 5.32 -7.0 18.8
AllianzGI Equity & Conv NIE 20.94 18.10 -13.6 8.9
Calamos Conv Hi Inco Fd CHY 11.19 10.02 -10.5 2.8
Calamos CHI
10.58 9.49 -10.3 7.0
World Equity Funds
Alpine Tot Dyn Div AOD 8.74 7.24 -17.2 3.0
Calamos Glbl Dyn Inc CHW 8.04 6.99 -13.1 8.1
Cdn Genl Inv CGI
26.62 17.99 -32.4 0.1
China Fund CHN
18.23 15.61 -14.4 0.3
Clough Global Opp Fd GLO
8.83 NA -9.7
EtnVncTxAdvGblDiv ETG
14.05 NA -4.9
EatonVance TxAdv Opport ETO
20.39 NA 4.6
First Trust Dynamic Eur FDEU 17.06 15.15 -11.2 -10.6
Gabelli Glbl Multimedia GGT 8.06 7.30 -9.4 4.0
GDL Fund GDL
11.80 9.69 -17.9 4.0
India Fund IFN
26.37 22.76 -13.7 7.1
Japan Sml Cap JOF
10.46 NA 8.6
Korea Fund KF
36.96 32.34 -12.5 3.0
Mexico Fund MXF
14.28 NA -15.3
MS China a Shr Fd CAF
18.01 NA 7.4
MS India Invest IIF
26.66 NA 8.9
New Germany Fund GF 14.87 13.29 -10.6 -1.7
Swiss Helvetia Fund SWZ 11.63 10.43 -10.3 4.0
Templeton Dragon TDF 19.60 16.75 -14.5 1.0
Templeton Emerging EMF 13.68 11.90 -13.0 18.4
Voya Infr Indls & Matls IDE 14.60 13.44 -7.9 21.7
Wells Fargo Gl Div Opp EOD 6.22 5.21 -16.2 -2.5
Prem12 Mo
Fund (SYM)
NAV Close /Disc Yld
U.S. Mortgage Bond Funds
BlackRock Income Trust BKT 6.86 6.23 -9.2 5.3
Brkfld Mortgage Opp Incm BOI 16.55 13.91 -16.0 10.6
Brookfield TR Fund HTR 24.14 20.33 -15.8 10.5
Nuveen Mtg Oppy Term Fd JLS 25.20 23.20 -7.9 6.0
Investment Grade Bond Funds
Blackrock Core Bond Tr BHK 14.36 12.82 -10.7 6.0
BlkRk Credit Alloc Incm BTZ 14.31 12.25 -14.4 7.1
John Hancock Income Secs JHS 15.25 13.93 -8.7 5.9
MFS Inc Tr MIN
4.77 4.40 -7.8 9.1
WstAstClymr InfLnkd Fd WIW 12.39 NA NA 3.5
WstAssetClymr InflLnk Sec WIA 12.68 NA NA 3.3
Loan Participation Funds
Apollo Sr Fltg Rate Fd AFT 18.07 16.65 -7.9 6.6
BlackRock FR Incm Strat FRA 14.80 13.73 -7.2 5.4
Blkrk FltRt InTr BGT 14.30 13.48 -5.7 5.1
BlackstoneGSO Strat Cred BGB NA 14.51 NA 8.5
Prem12 Mo
Fund (SYM)
NAV Close /Disc Yld
Blackstone GSO Sr Float BSL NA 17.36 NA 6.0
Eagle Point Credit ECC NA 16.56 NA 14.3
Eaton Vance FR Incm Tr EFT 15.17 14.75 -2.8 6.2
EatonVnc SrFltRate EFR 14.83 14.30 -3.6 6.6
Eaton Vance Sr Incm Tr EVF 6.95 6.43 -7.5 6.4
1st Tr Sr Fltg Rt Fd II FCT 14.11 13.44 -4.7 6.2
Invesco Credit Opps Fund VTA 12.87 11.44 -11.1 7.7
Invesco Senior Income Tr VVR 4.77 4.33 -9.2 6.8
Nuveen Credit Strt Inc Fd JQC 9.25 8.27 -10.6 7.3
NuvFloatRteInco Fd JFR 11.48 11.16 -2.8 6.5
Nuv Float Rte Opp Fd JRO 11.43 11.36 -0.6 6.8
Nuveen Senior Income Fund NSL 6.82 6.44 -5.6 6.5
Pioneer Floating Rate Tr PHD 12.52 11.62 -7.2 6.1
Voya Prime Rate Trust PPR 5.73 5.27 -8.0 5.9
High Yield Bond Funds
AllianceBernstein Glbl AWF 13.24 11.55 -12.8 8.9
Barings Glbl Short Dur HY BGH 20.18 17.61 -12.7 10.0
BlackRock Corp Hi Yd Fd HYT 11.58 9.90 -14.5 9.4
BlkRk Debt Strat Fd DSU 4.05 3.48 -14.1 6.6
BlackRockDurInco Tr BLW 16.66 14.82 -11.1 8.5
Credit Suisse High Yld DHY 2.61 2.36 -9.6 11.6
DoubleLine Incm Solutions DSL NA 17.55 NA 10.0
Dreyfus Hi Yld Fd DHF 3.41 3.10 -9.1 10.1
Fst Tr Hi Inc Lg/Shrt Fd FSD 17.45 15.02 -13.9 6.8
Guggenheim Strat Opps Fd GOF 18.56 18.66 +0.5 11.1
Ivy High Income Opps Fund IVH 15.40 13.28 -13.8 11.3
Neuberger Berman HYS NHS 12.90 10.86 -15.8 8.2
NexPoint Credit Strat Fd NHF 25.08 20.88 -16.7 13.4
Nuveen Gl Hi Incm Fd JGH 17.23 14.70 -14.7 9.95
Nuveen High Incm Dec18 JHA 10.00 10.10 +1.0 NS
Pioneer High Income Trust PHT 10.18 9.54 -6.3 11.3
Prud Gl Shrt Dur Hi Yd GHY 16.50 14.37 -12.9 8.8
Prudentl Sh Dur Hi Yd Fd ISD 16.73 14.88 -11.1 8.5
Wells Fargo Incm Opps Fd EAD 9.00 7.75 -13.9 9.4
Wstrn Asset Glbl Hi Inco EHI 10.93 9.26 -15.3 11.6
Wstrn Asset High Inco II HIX 7.49 6.73 -10.1 10.9
Wstrn Asset Opp Fd HIO 5.49 4.76 -13.3 8.5
West Asst HY Def Opp Fd HYI 16.33 14.30 -12.4 8.8
Other Domestic Taxable Bond Funds
Ares Dynamic Credit Alloc ARDC NA 14.40 NA 8.8
Barings Corp Investors MCI NA 16.57 NA 7.0
BlackRock Multi-Sector IT BIT 18.60 15.78 -15.2 9.7
BlackRock Taxable Mun Bd BBN 22.99 20.74 -9.8 6.9
Doubleline Oppor Credit DBL NA 23.21 NA 10.1
Duff & Phelps Utl & Cp Bd DUC 10.06 9.24 -8.2 6.3
EtnVncLtdFd EVV
NA 12.92 NA 8.9
Franklin Ltd Duration IT FTF NA 11.74 NA 6.1
GuggenheimTaxableMuni GBAB 23.03 20.53 -10.9 7.3
John Hancock Investors JHI 17.70 16.23 -8.3 8.3
KKR Income Opps Fund KIO NA NA NA 9.5
MFS Charter MCR
9.30 8.20 -11.8 8.6
MFS Multimkt MMT 6.65 5.76 -13.4 8.8
Nuveen Build Am Bd Fd NBB 21.66 20.42 -5.7 6.1
PIMCO Corporate & Incm PTY NA 13.95 NA 11.1
PIMCO Corporate & Incm PCN NA 14.08 NA 9.2
PIMCO HiInco PHK
NA 8.74 NA 14.7
PIMCO Inco Str Fd PFL NA 10.12 NA 10.1
PIMCO Incm Strategy Fd II PFN NA 8.99 NA 10.9
Putnam Mas Inco PIM 4.92 4.40 -10.6 7.0
Putnam Premier Income Tr PPT 5.41 4.79 -11.5 6.3
Wells Fargo Multi-Sector ERC 14.02 12.08 -13.8 8.5
World Income Funds
Abeerden Asia-Pacific FAX 5.56 4.80 -13.7 6.0
Etn Vnc Short Dur Fd EVG NA 13.12 NA 7.3
Legg Mason BW Glbl Incm BWG 13.75 11.77 -14.4 10.0
MS EmMktDomDebt EDD NA 7.12 NA 9.6
PIMCO Dynamic Credit PCI NA 19.15 NA 10.8
PIMCODynamicIncomeFund PDI NA 26.44 NA 14.8
PIMCO Income Opportunity PKO NA 21.59 NA 10.0
PIMCO Strat Income Fund RCS NA 8.53 NA 10.1
Templeton Emerging TEI 11.92 10.31 -13.5 9.1
Templeton Global GIM 6.92 6.12 -11.6 4.7
Wstrn Asset Emerg Mkts ESD 17.25 14.39 -16.6 8.2
Wstrn Asset Emerg Mkt II EMD 12.41 10.45 -15.8 7.6
Wstrn Asset Gl Def Opp Fd GDO 18.71 16.58 -11.4 7.8
National Muni Bond Funds
AllianceBrnstn NtlMun AFB 15.02 13.34 -11.2 5.2
Blackrock Invest BKN 16.18 15.12 -6.6 5.6
BlackRockMun2030Target BTT 23.79 21.98 -7.6 4.1
BlackRock Municipal Trust BFK 14.70 14.06 -4.4 6.0
BlackRockMuni BLE 15.37 14.55 -5.3 6.1
BlackRockMuni Tr BYM 15.44 14.01 -9.3 5.6
BlkRk MuniAssets Fd MUA 14.26 13.60 -4.6 4.9
BlkRk Munienhanced MEN 12.12 11.45 -5.5 5.9
BlkRk MuniHldgs Inv MFL 15.08 14.16 -6.1 5.8
BlkRk MuniHldgs Qlty II MUE 14.42 13.14 -8.9 5.8
BlkRk MuniHldgs MHD 17.37 16.28 -6.3 6.1
BlkRk MuniVest MVF 9.92 9.76 -1.6 6.2
BlkRk MuniVest II MVT 15.62 15.63 +0.1 6.0
Prem12 Mo
Fund (SYM)
NAV Close /Disc Yld
BlkRk MuniYield MYD 15.13 14.09 -6.9 6.2
BlkRk MuniYld Quality MQY 15.96 14.80 -7.3 5.9
BlkRk MuniYld Qlty II MQT 14.06 12.67 -9.9 5.8
BlRkMunyldQltyIII MYI 14.68 13.70 -6.7 6.0
Deutsche Mun Income Tr KTF 13.06 12.96 -0.8 6.3
Dreyfus Mun Bd Infr Fd DMB 13.96 12.69 -9.1 5.8
Dreyfus Municipal Income DMF 9.54 8.86 -7.1 5.7
Dreyfus Strat Muni Bond DSM 8.57 8.24 -3.9 5.9
Dreyfus Strategic Munis LEO 8.80 8.53 -3.1 5.8
Eaton Vance Mun Bd Fd EIM 13.97 12.63 -9.6 5.6
Eaton Vance Mun Income EVN 13.59 12.59 -7.4 5.9
EV National Municipal Opp EOT 22.48 21.54 -4.2 4.7
Invesco Adv Mun Incm II VKI 12.38 11.03 -10.9 6.4
Invesco Mun Incm Opps Tr OIA 7.60 7.23 -4.9 5.1
Invesco Mun Opportunity VMO 13.80 12.66 -8.3 6.6
Invesco Municipal Trust VKQ 13.77 12.32 -10.5 6.2
Invesco Qlty Mun Inco IQI 13.82 12.41 -10.2 5.8
Invesco Inv Grade Muni VGM 14.26 12.79 -10.3 6.4
Invesco Value Mun Incm Tr IIM 16.41 14.59 -11.1 5.4
MainStay DefinedTerm MMD NA NA NA 5.9
MFS Munl Inco MFM 7.46 6.77 -9.2 5.5
NuveenAMT-FreeMunValue NUW 16.99 16.46 -3.1 4.5
Nuveen AMT-Free Quality NEA 15.03 13.24 -11.9 5.4
Nuveen Enh AMT-Fr Muni NVG 16.20 14.35 -11.4 5.5
Nuveen Enh Muni Credit NZF 15.87 14.24 -10.3 5.8
Nuveen Enhncd Mun Val Fd NEV 15.20 14.65 -3.6 6.4
Nuveen Intermed Dur Mun NID 13.69 12.56 -8.3 5.1
NuveenMuniIncoOpp Fd NMZ 13.36 13.12 -1.8 6.7
Nuveen Muni Value Fund NUV 10.25 9.65 -5.9 3.9
Nuveen Quality Muni NAD 15.41 13.72 -11.0 5.9
Nuveen Sel Tax Free NXP 15.27 13.99 -8.4 3.7
Nuveen Sel TF NXQ 14.72 13.35 -9.3 3.7
PIMCO MuniFd PMF
NA 14.70 NA 6.2
Pimco Muni Inc II PML 12.23 12.27 +0.3 6.1
PIMCO Muni Inc III PMX NA 11.35 NA 6.2
Pioneer Mun Hi Inc Adv Tr MAV 12.24 12.30 +0.5 6.6
Pioneer Mun Hi Incm Tr MHI 13.09 12.30 -6.0 6.3
Putnam Tr PMM
7.97 7.15 -10.3 5.8
PutnamMuniOpportunities PMO 13.28 11.98 -9.8 5.7
Wstrn Asset Mngd Muni MMU 14.19 13.48 -5.0 5.5
WesternAssetMunTrFund MTT 22.04 22.32 +1.3 4.5
Single State Muni Bond
BlackRock CA Municipal Tr BFZ 15.50 15.05 -2.9 5.4
BlkRk MuniHldgs CA Qlty MUC 15.74 14.40 -8.5 5.2
Blkrck MunHl NJ Qlty MUJ 15.80 14.05 -11.1 5.7
BlRk MuHldg NY Qlty MHN 14.89 13.73 -7.8 5.4
BlkRk MuniYld CA Fd MYC 16.05 15.66 -2.4 5.2
BlkRk MuniYld CA Quality MCA 15.93 14.51 -8.9 5.3
BlkRk MuniYld MI Qlty MIY 15.55 13.91 -10.5 5.6
BlkRk MuniYld NJ Fd MYJ 16.19 15.96 -1.4 5.5
BlRk Muyld NY Qlty MYN 14.29 13.06 -8.6 5.2
Eaton Vance CA Mun Bd EVM 12.71 11.39 -10.4 5.5
Invesco CA Value Mun Incm VCV 13.67 12.45 -8.9 5.6
Invesco PA Value Mun Incm VPV 14.18 12.31 -13.2 5.9
Invesco Inv Grade NY Muni VTN 14.86 13.52 -9.0 5.8
Nuveen California AMT NKX 15.81 14.71 -7.0 5.6
Nuveen CA Muni Value NCA 10.43 10.40 -0.3 4.4
Nuveen CA Quality Muni NAC 15.80 14.22 -10.0 5.9
NuveenMDPremiumIncome NMY 14.57 12.65 -13.2 5.0
Nuveen MI Quality Income NUM 15.53 13.68 -11.9 5.2
NuveenNCPremiumIncome NNC 15.02 13.13 -12.6 4.2
Nuveen NJ Div Adv NXJ 15.70 13.67 -12.9 5.4
NuvAMTFreeMuniIncm NRK 14.57 12.87 -11.7 5.2
Nuveen NY Div Fnd NAN 15.22 13.67 -10.2 5.4
Nuveen Ohio Qual Income NUO 16.68 14.70 -11.9 5.1
Nuveen Pa Investment Qual NQP 15.35 13.35 -13.0 5.6
NuveenVAPremiumIncome NPV 14.44 13.46 -6.8 4.7
PIMCO California Muni PCQ NA 15.58 NA 5.8
PIMCO California Mun II PCK NA 9.48 NA 6.3
52 wk
Prem Ttl
Fund (SYM)
NAV Close /Disc Ret
General Equity Funds
Specialized Equity Funds
Corsair Opportunity:A 9.66 NA NA NS
Corsair Opportunity:I 9.70 NA NA 3.6
NexPointRlEstStrat;A 20.07 NA NA NS
NexPointRlEstStrat;C 20.02 NA NA NS
NexPointRlEstStrat;Z 20.01 NA NA NS
SharesPost 100
27.00 NA NA 7.3
Versus Cap MMgr RE Inc:F 27.01 NA NA 6.4
Versus Cap MMgr RE Inc:I 27.07 NA NA 6.8
Wildermuth Endwmnt Str 11.45 NA NA 8.0
Wildermuth Endwmnt S:C 11.39 NA NA NS
Income Preferred Stock Funds
Convertible Sec's. Funds
Calmos Dyn Conv and Inc CCD 19.25 17.19 -10.7 1.5
World Equity Funds
BMO LGM Front ME
9.05 NA NA 5.9
Prem12 Mo
Fund (SYM)
NAV Close /Disc Yld
U.S. Mortgage Bond Funds
Vertical Capital Income 12.41 NA NA 2.9
Loan Participation Funds
504 Fund
9.98 NA NA 3.3
FS Global Crdt Opptys D NA NA NA 2.6
Invesco Sr Loan A
6.47 NA NA 5.4
Invesco Sr Loan B
6.47 NA NA 5.4
Invesco Sr Loan C
6.49 NA NA 4.7
Invesco Sr Loan IB
6.48 NA NA 5.7
Invesco Sr Loan IC
6.48 NA NA 5.5
Invesco Sr Loan Y
6.48 NA NA 5.6
Voya Senior Income:A 12.70 NA NA 5.5
Voya Senior Income:B 12.64 NA NA 5.0
Voya Senior Income:C 12.68 NA NA 5.0
Voya Senior Income:I 12.66 NA NA 5.8
Voya Senior Income:W 12.71 NA NA 5.7
Prem12 Mo
Fund (SYM)
NAV Close /Disc Yld
High Yield Bond Funds
PionrILSInterval
11.10 NA NA 5.7
WA Middle Mkt Dbt 771.35 NA NA 11.3
WA Middle Mkt Inc WMF772.23 NA NA 11.5
Other Domestic Taxable Bond Funds
Capstone Church Capital 11.63 NA NA 1.3
GL Beyond Income
4.61 NA NA NE
Palmer Square Opp Income 18.22 NA NA 6.6
Resource Credit Inc:A
NA NA NA 3.4
Resource Credit Inc:C
NA NA NA 3.0
Resource Credit Inc:D
NA NA NA 3.1
Resource Credit Inc:I
NA NA NA 3.4
Resource Credit Inc:T
NA NA NA 3.0
Resource Credit Inc:U
NA NA NA 3.4
Resource Credit Inc:W NA NA NA 3.1
Borrowing Benchmarks | WSJ.com/bonds

Money Rates
November 11, 2016
Key annual interest rates paid to borrow or lend money in U.S. and
international markets. Rates below are a guide to general levels but
dont always represent actual transactions.
Inflation
Other short-term rates

Sept. index
level
Chg From (%)

Aug. '16 Sept. '15
241.428
248.731
0.24
0.18
1.5
2.2
Week
ago
52-Week
High
Low
3.50 3.50 3.50 3.25

2.70 2.70 2.70 2.70
1.475 1.475 1.475 1.475
Policy Rates
0.00
0.50
0.25
1.50
Euro zone
Switzerland
Britain
Australia
0.00
0.50
0.25
1.50
0.48
0.49
0.09
Euro Libor
One month
Three month
Six month
One year
1.00
1.00
0.75
0.4300
0.5625
0.3000
0.4100
0.4300
0.4500
0.7500
0.4000
0.5500
0.5600
0.1000
0.3100
0.0200
0.0600
0.1200
...
...
...
0.73
0.90
n.q. -0.07 -0.14

n.q. -0.07 -0.08
n.q. -0.07 -0.08
n.q. n.q. n.q.
n.q. n.q. n.q.
n.q. n.q. n.q.
n.q.
n.q.
n.q.
n.q.
n.q.
n.q.
Libor
One month
Three month
Six month
One year
0.53817
0.90567
1.26211
1.58789
0.53256
0.88094
1.24711
1.56011
0.54633
0.90567
1.26433
1.59567
0.19725
0.36360
0.60175
0.93085
-0.382
-0.331
-0.214
-0.075
-0.380
-0.323
-0.217
-0.078
-0.148
-0.092
-0.002
0.076
-0.382
-0.332
-0.218
-0.083
0.4400
0.5625
0.3000
0.4100
0.4300
Treasury bill auction

0.270 0.240 0.295 0.075
0.420 0.350 0.420 0.135
0.535 0.500 0.585 0.330
One month
Three month
Six month
One year
-0.374
-0.312
-0.210
-0.069
Latest
-0.373
-0.313
-0.213
-0.071
Value
Traded
-0.137
-0.083
-0.011
0.082
DTCC GCF Repo Index

Treasury
MBS
0.501
0.538
71.434 1.266 0.075

88.350 1.328 0.087
Open Implied
Settle Change Interest Rate
Secondary market
Fannie Mae
DTCC GCF Repo Index Futures
30-year mortgage yields

30 days
3.297 3.032 3.610 2.806
60 days
3.328 3.063 3.646 2.832
Treasury Nov
Treasury Dec
Treasury Jan
99.515 unch. 3647 0.485

99.300 -0.005 2970 0.700
99.240 -0.005 1763 0.760
Notes on data:
U.S. prime rate is effective December 17, 2015.
Discount rate is effective December 17, 2015.
U.S. prime rate is the base rate on corporate loans posted by at least 70% of the 10 largest U.S. banks;
Other prime rates arent directly comparable; lending practices vary widely by location;
DTCC GCF Repo Index is Depository Trust & Clearing Corp.'s weighted average for overnight trades in
applicable CUSIPs. Value traded is in billions of U.S. dollars.
Futures on the DTCC GCF Repo Index are traded on NYSE Liffe US.
Sources: Federal Reserve; Bureau of Labor Statistics; DTCC; SIX Financial Information;
General Electric Capital Corp.; Tullett Prebon Information, Ltd.
Proposed New Issue
$1,024,385,000*
YOUR GUIDE TO
WHATS HAPPENING NOW
TSASC, INC.
Tobacco Settlement Bonds
Every morning, get a complete look at the trends moving

global markets with The Daily Shot. Exclusive to members,
WSJs latest newsletter delivers a sophisticated, impartial
view of the markets in 30-plus charts, from credit to
currencies to commodities. Its the essential insight
you need to start your day.
$584,385,000* Fiscal 2017 Series A (Senior)

$440,000,000* Fiscal 2017 Series B (Subordinate)
PRICING IS EXPECTED DURING THE WEEK OF NOVEMBER 14, 2016
RETAIL INVESTORS WILL RECEIVE PRIORITY
DURING A ONE DAY RETAIL ORDER PERIOD
SIGN UP AT WSJ.COM/DAILYSHOT
TSASC, Inc. is a local development corporation organized under the Not-For-Profit Corporation Law
of the State of New York. TSASC, Inc. is an instrumentality of, but separate and apart from, The City
of New York
Proceeds from the Bonds will primarily be used to refund all of TSASC, Inc.s currently outstanding bonds
EXCLUSIVE TO
WSJ MEMBERS
Repayment of the Bonds will be from a portion of New York Citys share of Tobacco Settlement
Revenues derived from the Master Settlement Agreement between certain tobacco manufacturers
and 46 states, including New York
Interest on the Bonds is Federally Tax-Exempt**
Interest on the Bonds is exempt from personal income taxes imposed by the State of New York and
The City of New York **
Only certain of the Senior Bonds (Series A) will be offered to retail investors
Contact your broker for further information and to obtain copies of the Preliminary Offering Circular.
The Daily Shot
Jefferies
Citigroup
Siebert Cisneros Shank

& Co., L.L.C
BofA Merrill Lynch

Ramirez & Co., Inc.
Barclays
Raymond James
Wells Fargo Securities
Academy Securities Inc.

Cabrera Capital Markets, LLC
Hilltop Securities Inc.
Mischler Financial Group, Inc.
PNC Capital Markets LLC
Stern Brothers & Co.
US Bancorp
Loop Capital Markets

RBC Capital Markets
Blaylock Beal Van, LLC

BNY Mellon Capital Markets, LLC
Drexel Hamilton, LLC
FTN Financial Capital Markets
Janney Montgomery Scott
Mesirow Financial, Inc.
Morgan Stanley
Oppenheimer & Co.
Rice Financial Products
Roosevelt & Cross Incorporated
Company
TD Securities
Stifel, Nicolaus & Company, The Williams Capital Group, L.P.
Incorporated
* Preliminary. Subject to change; when, as and if issued.

** Upon issuance of the Bonds, Transaction Counsel is expected to deliver an opinion that interest on the Bonds is excluded
from gross income tax for Federal Income tax purposes and exempt from personal income taxes imposed by the State of New
York and The City of New York. The form of Transaction Counsels opinion is available in the Preliminary Offering Circular.
Before purchasing any Bonds, you should consult with your tax advisor.
Investment and insurance products:

NOT a Deposit
www.ebook3000.com
-0.374
-0.313
-0.213
-0.074
52-Week
High
Low
Under no circumstances shall this announcement constitute an offer to sell or a solicitation of an offer to buy, nor shall there be
any sale of the Bonds in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of such jurisdiction. The Bonds will be sold by means of an Offering Circular. Prospective
investors should carefully consider certain risks and other considerations contained in the Preliminary Offering Circular. One or
a combination of the risks factors may adversely affect the ability of TSASC, Inc. to pay debt service on the Bonds and could have
an adverse effect on the liquidity and/or market value of the Bonds.
SPEED-READ
THE MARKETS
0.27
Euro interbank offered rate (Euribor)
Federal funds
4 weeks
13 weeks
26 weeks
0.67
30 day
Two month
Three month
Four month
Five month
Six month
1.30
Discount
Effective rate
High
Low
Bid
Offer
2.00
Euro commercial paper
0.00
0.50
0.25
1.50
U.S. government rates

1.00
2.25
n.q.
90 days
0.05
0.50
0.50
2.00
Overnight repurchase
U.S.
2.25
Commercial paper (AA financial)
Prime rates
U.S.
Canada
Japan
2.25
Commercial paper
30 to 270 days
International rates
Latest
52-Week
high
low
Call money
U.S. consumer price index

All items
Core
Week
ago
Latest
NOT FDIC-Insured
NO Bank Guarantee
MAY Lose Value
NOT Insured by Any Federal

Government Agency
* ***
CREDIT MARKETS
BY HEATHER GILLERS
President-elect
Donald
Trump is promising an infrastructure boom once he is
sworn in. In some parts of the
country, a burst of new construction spending by states
and cities is already under way.
State and local governments
around the U.S. have issued
$149 billion in bonds for new
infrastructure projects so far
this year, putting 2016 municipal borrowing on track to surpass each of the past five years,
according to Thomson Reuters
data.
Much of the new bond issuance happened in the second
and third quarters, after a long
stretch of low borrowing. Total
bond issuance, including refinancing, has reached $388 billion, also a five-year record.
On Tuesday, voters across
the country authorized state
and local governments to borrow an additional $55.7 billion
for similar projects, according
to Ipreo. It was by far the most
borrowing approved since
2008.
I think theres a lot of mo-
mentum, not only at the political level but also by the general
public, to start spending more
on infrastructure, said Dan
Heckman, senior fixed-income
strategist at U.S. Bank Wealth
Management.
Mr. Trump made a $1 trillion
infrastructure investment over
the next decade one of his first
priorities as president, promising
in
his
victory
speech Wednesday to rebuild
our highways, bridges, tunnels,
airports, schools, hospitals.
The proposal relies on private
financing. Experts and industry
officials say it is unlikely the
nations aging infrastructure
can be updated without public
support.
In the short term, however,
costs could go up for government borrowers. Municipalbond prices have dropped
along with Treasurys in days
after the election, with interest
rates for an A-rated 20-year
general-obligation bond at
3.2% on Thursday, compared
with 2.94% on Monday, according to Thomson Reuters. Analysts cited concerns that inflation
under
a
Trump
administration could increase

borrowing costs.
In an era where the range
has been pretty tight, thats a
pretty dramatic move in such a
short period of time, and he
hasnt even taken office yet,
said Howard Cure, director of
municipal research at Evercore
Wealth Management.
Florida Bond Finance Director Ben Watkins is relieved to
have refinanced more than $1
billion in mostly state general
obligation bonds since June.
His only regret, he said, is that
he didnt also push through a
planned $250 million bond to
improve Floridas turnpike and
another deal to refinance
school-construction borrowing.
With this change in [municipal bond] rates, I wish I had
been smart enough to go ahead
and sell regardless of what the
market felt like, Mr. Watkins
said.
Local infrastructure projects
have languished for years as
cities and states struggled to
balance their budgets after the
recession. Long-term borrowing for new projects by major
U.S. cities hit a 24-year low in
ROBERT GALBRAITH/REUTERS
Cities, States Issue Flood

Of Bonds to Fund Projects
San Franciscos BART system won voters approval on Tuesday to issue $3.5 billion in bonds.
2014, according to an analysis
by Pew Charitable Trusts.
With expectations of a federal rate increase in December,
local officials were eager to get
in on historically low interest
rates, many analysts said.
Municipalities issued $108
billion in bonds in the third
quarter, compared with $86 billion in the third quarter of
2015, according to Thomson
Reuters data. They also asked
voters Tuesday to approve
nearly 700 ballot measures
seeking to issue bonds and won
approval for more than 70% of
them, according to Ipreo.
The low interest rates are

very attractive to us and the
idea of waiting any longer
means the cost will drive up,
said Alicia Trost, spokeswoman
for San Franciscos Bay Area
Rapid Transit. The transportation system won voters approval Tuesday to issue $3.5
billion in bonds, its first referendum since 2004. The money
will be used to replace 90 miles
of rail and fix leaky tunnels and
other infrastructure improvements.
Voters in Texas El Paso Independent School District approved $668.7 million in new
borrowing in what was the

school systems first successful
bond referendum since 2007,
said spokeswoman Melissa
Martinez. The money will pay
for a consolidation of school
campuses to accommodate declining enrollment, 81 new
school buses and laptops for
middle-school students in the
60,000-student district.
A citizens committee working on the referendum chose
not to limit the borrowing to
$500 million after learning that
the additional money would
add only $2.39 to the tax bill
for a $100,000 home.
EQUITIES
AHEAD OF THE TAPE | Steven Russolillo
Earnings Recession Is
Over, but Dont Expect
Investors to Celebrate
The earnings recession
is finally
over, but that
might not be
enough to
push the market higher.
With more than 90% of
S&P 500 companies having
reported results for the latest quarter, earnings for the
biggest U.S. companies are
finally growing again. Thirdquarter adjusted earnings
are projected to increase
2.9% from the same period a
year ago, according to FactSet. That marks the first
3.5%
Projected earnings growth for

S&P 500 companies in the
current quarter
year-over-year growth rate

after five consecutive quarters of contractions.
Better times should be
ahead, too, thanks to stabilizing oil prices and the rebounding energy sector. Energy companies such as
Exxon Mobil Corp. and
Valero Energy Corp. should
benefit. And it isnt just energy companies that should
rebound. Technology titans
such as Apple Inc., the biggest contributor to S&P 500
earnings, and International
Business Machines Corp.
are expecting earnings
growth will return in 2017.
But there is a difference
between an earnings recession ending and earnings
growing impressively. A year
ago, analysts were calling for
earnings growth of 13.1% for
the recently completed quarter. That projection fell
sharply and even turned negative as recently as September before recently bouncing
back into positive territory.
The further out you go,
the more optimistic analysts
tend to be, said John Butters, senior earnings analyst
at FactSet.
History might be repeating itself. Earnings growth
this quarter is expected to
improve to 3.5%, followed by
11.4% and 10.5% in the first
two quarters of 2017.
The earnings-expectation
game will continue, meaning
the bar will inevitably be
lowered. But investors havent rewarded so-called
earnings beats as much as
they used to.
For the third quarter, Mr.
Butters found an S&P 500
companys stock price rose
0.7%, on average, in a fourday span following an earnings report that beat expectations. That is roughly half
the average gain in a comparable time frame over the
past five years. Earnings
misses were punished more
than usual, too.
The reason why could be
because stocks are near records. Even if earnings keep
rising, there is no guarantee
companies will be rewarded
by investors.
Bouncing Back
Expected earnings growth
for S&P 500 companies,
change from year earlier
15%
10
5
Analyst projections
0
2016
Source: FactSet
17
ETF Trading Soars After Trump Win

BY ASJYLYN LODER
AND SARAH KROUSE
ETFs After the Election
As investors pivoted quickly

after Donald Trumps election
victory, their go-to was exchange-traded funds.
New York-based brokerage
firm Convergex saw clients
trading almost three times
more ETFs on Wednesday, the
day after the election, than
they did on Tuesday while
overall share trading rose 50%,
according to Chief Executive
Eric Noll.
In times of market stress,
traders and institutions have
to adjust their portfolios
quickly. The easiest way for
people to refocus their portfolios without picking individual
stocks is ETFs, said Mr. Noll.
Weve seen this trend developing over the past couple of
years and it is really picking
up steam now.
Almost 3.2 billion shares of
exchange-traded
funds
changed hands Wednesday,
more than double the usual
volume, after Mr. Trumps unexpected victory. Traders and
investors placed bets via ETFs
on markets expected to be influenced by his administrations regulations, trade policy
and spending.
Mr. Trumps pledge to repeal financial regulations imposed by the Dodd-Frank Act
pushed up trading Wednesday
in State Street Global Advisors Financial Select Sector
SPDR Fund to $5 billion, the
most in five years.
His promise to dismantle
the Obama administrations
Affordable Care Act propelled
$756 million of investor flows
into the iShares Nasdaq Biotech ETF on Thursday, the
most in the funds history, according to FactSet.
His vow to limit immigration and trade with Mexico
and build a wall along its border sent volume in the iShares
MSCI Mexico Capped ETF to a
record 17.6 million shares the
day after the election as the
fund fell 8.5%, according to
FactSet. A small and littletraded ProShares ETF that
uses leverage to bet against
Mexican stocks saw record
The need for speed after Donald Trump's surprise win drove investors into exchange-traded funds.
FAST
MOVERS
Mexico
Health care
Financials
Volume in iShares MSCI

Mexico Capped ETF rose
to new highs as Mexican
stocks plunged.
Inows into the iShares

NASDAQ Biotechnology
ETF increased in the
days after the election.
The Financial Select Sector

SPDR fund also had record
inows last week as bank
stocks soared.
DAILY
VOLUME
20 million shares
12 million shares
300 million shares
10
0
100
0
Oct.
Nov.
Nov.
$55
$300
$22
50
280
21
45
260
20
40
240
Oct.
DAILY
NET
FLOWS
200
0
Oct.
SHARE
PRICE
$400 million
Nov.
$800 million
400
400
Oct.
Nov.
1
Oct.
Nov.
Oct.
$2 billion
200
200
Nov.
19
Oct.
Nov.
Oct.
Oct.
Nov.
Nov.
Source: FactSet
volume, while the price moved

so rapidly that trading was
briefly halted. Trading remained elevated for the rest of
the week and the double-leveraged ETF ended the week up
22.5%.
Exchanges and ETF issuers
were eager to avoid a repeat
of the rocky trading that
snarled markets on Aug. 24 of
last year, when a global selloff
triggered ETF trading halts
and fund prices diverged from
the stocks they are supposed
to track. Since then, fund
firms and exchanges have
sought market structure improvements to ensure smooth
trading.
After-hours trading can be
especially tricky for ETFs. Futures and overseas stocks can
swing wildly while the U.S. equity markets are shut for the
night, making it harder to
keep the ETFs prices in line
with their assets and causing
disruptions when U.S. markets

open.
To
prevent
problems,
BlackRock Inc.s capital-markets team had a follow-thesun strategy to ensure orderly trading from the time
the Asian markets opened to
the close of the U.S. trading
day, said Samara Cohen, U.S.
Head of iShares Capital Markets.
Convergexs Mr. Noll said he
was answering emails and taking calls at home until 3:30
a.m. and was back in his office
by 6:30 a.m.
Dave Lavalle, U.S. head of
SPDR ETF capital markets at
State Street, who watched the
election results and the markets throughout the night
from his Brooklyn home, received an email at 6:18 a.m.
Wednesday from a contact at
the New York Stock Exchange
who said the exchange was
all hands on deck.
By 9:02 a.m., the NYSEs

Arca electronic exchange had
notified traders that it would
allow stocks to trade in a
wider price band in the early
minutes of trading. The move
helps prevent trading halts
that occur when prices move
too far too quickly.
NYSE Arca had done the
same after the U.K.s surprise
vote in June to exit from the
European Union.
By the end of the day, there
had been only 14 trading halts,
six of which were exchangetraded products, including the
ProShares Mexico ETF, according to Nasdaq Inc. That compares with nearly 70 trading
halts the day after the Brexit
vote and were nearly 1,300 on
Aug. 24, 2015.
Ive learned to expect the
unexpected, and thats how we
went into this, said Ms. Cohen. More umbrellas, less
rain.
THE TICKER | Market events coming this week
Monday
Oct., expected
Earnings expected*
Retail sales, ex. autos

Sept., previous up 0.5%
Oct., expected
up 0.4%
Estimate/Year Ago($)
Advance Auto 1.71/1.95

TransDigm
3.20/2.83
Tuesday
STEVEN SENNE/ASSOCIATED PRESS
Empire Manufacturing
Oct., previous
-6.8
Nov., expected
-3.0
Import price index
Oct., expected
up 0.3%
J.M. Smucker is expected to report $1.93 in earnings per share on Friday.
Earnings expected*
Business inventories
Aug., previous
up 0.2%
Sept., expected up 0.2%
Retail sales
Sept., previous
up 0.5%
Agilent
0.52/0.50
Aramark
0.48/0.44
Dicks Sporting Goods
0.42/0.45
TJX Cos.
0.87/0.86
Wednesday
Mort. bankers indexes
Purch., previous
up 1%
Refinan., prev. down 3%
EIA status report
up 0.6%
Previous change in stocks in

millions of barrels
Crude oil
Gasoline
Distillates
up 2.4
down 2.8
down 1.9
Capacity utilization
Sept., previous
75.4%
Oct., expected
75.5%
Industrial production
Oct., expected
up 0.2%
Producer Price Index
All items, Sept. up 0.3%
Oct., expected
up 0.3%
Core, Sept.
up 0.2%
Oct., expected
up 0.2%
Earnings expected*
Cisco Systems 0.59/0.59

L Brands
0.40/0.55
0.54/0.61
0.83/0.86
Housing starts
Sept., previous 1.05 mil.
Oct., expected 1.15 mil.
Initial jobless claims

Previous
254,000
Expected
255,000
Philadelphia Fed survey

Oct., previous
9.7
Nov., expected
7.5
EIA report: natural gas
Earnings expected*
NetApp
Target
Thursday
Previous change in stocks in

billions of cubic feet
up 54
Building permits
Sept., previous 1.225 mil.
Oct., expected 1.19 mil.
Consumer Price Index
All items, Sept. up 0.3%
Oct., expected
up 0.4%
Core, Sept.
up 0.1%
Oct., expected
up 0.2%
App. Materials 0.65/0.29

Intuit
0.03/0.09
J.M. Smucker 1.93/1.62
Ross Stores
0.56/0.53
salesforce.com 0.21/0.21
Wal-Mart
0.96/1.03
Friday
Earnings expected*
Foot Locker
1.10/1.00
* FACTSET ESTIMATES EARNINGS-PER-SHARE ESTIMATES DONT INCLUDE EXTRAORDINARY ITEMS (LOSSES IN PARENTHESES) ADJUSTED FOR STOCK SPLITNOTE: FORECASTS ARE FROM
DOW JONES WEEKLY SURVEY OF ECONOMISTS
COMMODITIES
Prices decline sharply

amid faith in economy
under president-elect;
a surge in bond yields
BY IRA IOSEBASHVILI
AND STEPHANIE YANG
Investors piled into gold

when polls showed Donald
Trumps chances for victory
were improving. Now that he
has won the presidential election, they are selling.
The turnabout reflects how
rapidly markets are reassessing what Mr. Trumps presidency could mean for U.S.
economic growth, inflation
and interest rates.
Investor optimism that Mr.
Trumps policies could boost
the economy dragged down
gold prices 8.5% from their
six-week high reached on
Election Day. Gold prices on
Friday suffered their biggest
one-day loss in nearly three
years, closing down 3.3% at
$1,224.30 a troy ounce.
Investors have faith in the
dollar and the American economy as a whole, said Timothy Major, a stockbroker at
Paulson Investment Co.,
which focuses on precious
metals. Im not seeing any
real strong cases for gold.
During most of the campaign, Mr. Trumps antitrade
stance and limited policy details sent worried investors
fleeing to gold as a haven.
Some gold bugs also felt common cause with Mr. Trump,
who has praised bullion as an
investment.
Ahead of the election we
forecast gold could rise to
$1,500 an ounce were Trump
to win, analysts at HSBC said
in a note a day after the election. We expect much of this
move to happen swiftly.
But his first moves as president-electincluding a conciliatory victory speech that
included plans for infrastructure spendingleft investors
with renewed hope for a stable transition and allowed
them to focus on Mr. Trumps
plans for economic growth.
U.S. bond yields have
surged on hopes this boost to

fiscal spending succeeds. Rising bond yields make gold a
less-attractive prospect for investors, as the metal pays
nothing to its holders.
Some gold bulls are worried a more robust economy
could allow the Federal Reserve to raise rates at a faster
pace next year after likely
raising rates in December.
Gold prices are still up 15%
this year, fueled by expectations that the Fed would raise
rates very gradually in coming
years. Before that, gold had
three straight losing years.
Many investors say a bullish case for the metal still exists, even in a world of rising
interest rates. There is still a
lack of clarity on the policies
of a Trump administration, or
how they will be funded. And
many economists say his protectionist trade policy could
undermine U.S. growth.
The tax cuts and fiscal
spending Mr. Trump has proposed could send inflation
higher. Some investors buy
gold when consumer prices
rise, expecting the metal to
hold its value better than
other assets.
ANDREY RUDAKOV/BLOOMBERG
Investors Ditch Gold After Trumps Win
Workers melt gold at a mine in Kazakhstan. Gold prices on Friday fell 3.3%, logging their biggest one-day loss in nearly three years.
Reversing Course
In the run-up to the election, gold prices tended to rise when
Donald Trump narrowed Hillary Clintons lead. But now that hes
won the presidency, gold prices are falling.
Election
Day
Continuous front-month Comex gold price

$1,325
1,300
1,275
1,250
1,225
1,200
Oct. 24
November
Clintons lead in polls
Election
Day
10%
8
6
4
2
0
Oct. 24
November
Sources: WSJ Market Data Group (price);

RealClearPolitics (running average of national polls)
Election Drives
Metals Volatility
Metals prices have swung
wildly since Donald Trump,
who has pledged to curb Chinese imports while investing in
infrastructure, was elected
president of the U.S.
Copper prices on the London Metal Exchange are up
8.7% since the election result,
while aluminum and zinc were
up 2.7% and 2.4%, respectively.
Most metal prices tumbled
when it became clear that Mr.
Trump was headed to victory
because traders were unclear
about his policy positions.
Prices then rose as the market
considered the potential positive effect of Mr. Trumps call
for rebuilding infrastructure.
The swings underscore the
uncertainty about Mr. Trump
and what his agenda will mean
for the metals market.

Irrespective of the infrastructure boost, Trumps policies could negatively impact
Chinas exports to the U.S. if
Trump follows through on his
campaign pledges to place
trade restrictions on China
steel, cement and solar, among
other sectors, would be vulnerable, said Alexander Wolf, senior emerging markets economist at Standard Life
Investments.
Mr. Trumps victory coincides with a global metals glut.
In recent months, Chinese producers have stepped up output
of important metals such as
aluminum and steel.
Mr. Trump vowed to impose across-the-board tariffs
on imports from China, a large
exporter of metals to the U.S.
Already, China is facing
large U.S. tariffs. Under pressure from American steelmak-
ers, the U.S. in the past year

has imposed tariffs as high as
266% on some steel from
China. It has imposed similar
tariffs on aluminum products.
While the U.S. is an important market for China, U.S. imports of Chinese steel have
been on a downward trajectory
in 2016, totaling 615,690 million tons in the first three
quarters of this year, less than
half of what was imported in
all of 2015, according to Platts
Steel Data and Analysis.
Aluminum imports from
China doubled between 2011
and 2015, but have started declining this year.
If the U.S. imposes protectionist measures, it will likely
douse optimism that Mr.
Trumps proposed infrastructure spending will require more
metals flowing into the U.S.,
analysts said.
Biman Mukherji
CURRENCIES
$63
million
Dollar Roars to Life After Election
The amount in paper profit made by
investors shorting shares of
Smith & Wesson Holding Corp.
after the stock fell 22% last week
BY CHELSEY DULANEY
A Misfire for Gun Maker

Shares of gun maker Smith
& Wesson Holding Corp. sank
22% last week, including a 15%
slide Wednesday.
That is good news for holders of the $264 million of short
positions, who made a quick $63
MONEYBEAT
REUTERS
Suddenly, the dollar is back

in fashion.
Donald Trumps unexpected
win in the U.S. presidential
election sent the dollar up
2.4% against a basket of 16
major peers to its biggest
weekly gain since May 2015,
and analysts say the rally
likely has further to go.
Investors
expect
Mr.
Trumps proposals to boost
fiscal spending, cut taxes and
loosen regulation will bolster
economic growth and ultimately prompt the Federal Reserve to step up the pace of
short-term interest-rate increases.
That is helping to shake the
dollar out of a monthslong
slump.
The strong U.S. growth potential warrants dollar outperformance in the final two
months of the year, said
Vassili Serebriakov, currency
strategist at Crdit Agricole.
The bank is recommending its
clients buy the dollar-yen currency pair, forecasting it could
strengthen by an additional
1.2% by the end of the year, after a 3.5% gain last week.
The dollars rise has come
as a surprise to many traders
and portfolio managers. Analysts initially expected the dollar to weaken under the promise of a Trump presidency due
to protectionist trade-policy
proposals. As Mr. Trumps victory crystallized on the night
of the election, the WSJ Dollar
Index measuring the greenback against 16 other currencies fell as much as 0.8%.
But the U.S. currency has
since bounced back, rising
nearly 2% against major peers
to an eight-month high as Mr.
Trump outlined expansionary
spending proposals.
Investors say the biggest
boon for the dollar could be
higher U.S. interest rates. Mr.
Trumps plans for big fiscal
spending are expected to
boost inflation and bolster the
case for lifting U.S. rates.
Fed-funds futures, a popular tool for betting on U.S. in-
A board displayed quotes for the peso against the dollar in Mexico City last week.
terest-rate policy, show investors assign a 81% chance to
the Fed raising rates at its
meeting next month, according to CME Group data. That is
up from 32% at the start of
the month. Higher rates boost
the currency by making dollar
assets more attractive.
Following a two-year rally
in which the dollar rose more
than 20% against major peers,
many analysts had abandoned
calls for further dollar
strength this year, citing tepid
growth and the risk that a dollar rally would increase market turbulence. Before the
election, the WSJ Dollar Index
had slipped 2.4% this year as
investors accepted that U.S.
rates were likely to remain
lower for longer.
Now, investors are assigning a 58% chance that the Fed
will raise rates at least twice
by next November, according
to CME Group data.
Many analysts question
whether a sustained dollar
rally is in the cards, noting
that global growth remains
soft and that months will pass
before investors get a chance
to scrutinize a fuller Trump
economic package.
Brad Bechtel, a managing
director in foreign-exchange
trading at Jefferies Group,
warns that investors are get-
Rate Play
Some investors expect the dollar
to surge as the Fed raises rates.
92
90
88
86
84
J F M A M J J A S O N
Source: WSJ Market Data Group
ting ahead of themselves by

driving the dollar up so
sharply.
Were pricing in the effects
of his new term right away,
but how long before we actually get to implementation?
he said. The market is overshooting.
Mr. Trumps proposals to
renegotiate key trade agreements could also depress stagnant global growth, which
could weigh on the U.S. economy and the dollar, said Mr.
Bechtel.
If he starts emphasizing
the potential for trade wars...it

could completely derail the
whole thing, he said.
The dollar has been especially strong against emerging-market currencies. Developing nations often come
under pressure when U.S.
rates rise as local assets become less attractive to yieldseeking investors. Emerging
markets dollar-denominated
debt also becomes more expensive to pay back.
Since the election, the U.S.
dollar has strengthened 14%
against the Mexican peso, 8.1%
against the Brazilian real and
2.4% against the Indonesian
rupiah.
Emerging-market
stocks and bonds also suffered
about $2.4 billion in outflows
last week, with much of that
cash exiting since the election,
according to the Institute for
International Finance.
Ugo Lancioni, head of currency management for asset
manager Neuberger Berman,
said the selloff in emergingmarkets assets could eventually upend the dollars rally.
If the dollar goes too far, it
triggers a selloff in emerging
markets and runs the risk that
the Fed will be less incentivized to raise rates, said Mr.
Lancioni, who in recent weeks
has pared back bets that the
dollar will rise.
www.ebook3000.com
million in profit from betting on

the stock to decline, according to
S3 Partners, a financial-analytics
firm.
U.S. President-elect Donald
Trumps surprise victory last
Tuesday hit gun stocks particularly hard. Typically, shares of
gun makers rise when there is
talk of increased gun regulations
as investors expect a pickup in
gun sales in response. Mr.
Trumps win, however, pushed

gun stocks down because his
policies arent thought to favor
heavier gun regulation.
Short interest in Smith &
Wesson climbed from $243 million in early November leading
up to the election. Since the
vote, investors have largely kept
their short positions in place, according to Ihor Dusaniwsky,
head of research at S3 Partners.
Ben Eisen
ONLINE
WSJ
.COM
For more
MoneyBeat blog
posts, go to
blogs.wsj.com/
MoneyBeat
Currencies
U.S.-dollar foreign-exchange rates in late New York trading
Country/currency
in US$
US$vs,
YTDchg
Fri
per US$ (%)
Country/currency
Americas
Vietnam dong
Argentina peso
.0654 15.2985 18.2
Brazil real
.2918 3.4268 13.5
Canada dollar
.7385 1.3541 2.2
Chile peso
.001507 663.50 6.4
Colombia peso
.0003227 3098.50 2.4
Ecuador US dollar
1
1 unch
Mexico peso
.0478 20.9164 21.6
Peru new sol
.2938 3.403 0.3
Uruguay peso
.03557 28.1100 6.0
Venezuela b. fuerte .100150 9.9851 58.4
Europe
Asia-Pacific
Australian dollar
.7545 1.3254 3.4
China yuan
.1467 6.8151 5.0
Hong Kong dollar
.1289 7.7586 0.1
India rupee
.01480 67.554 2.0
Indonesia rupiah .0000748 13365 3.4
Japan yen
.009374 106.68 11.3
Kazakhstan tenge .002953 338.67 0.02
Macau pataca
.1251 7.9910 0.2
Malaysia ringgit
.2287 4.3726 1.6
New Zealand dollar
.7115 1.4055 4.0
Pakistan rupee
.00955 104.710 0.2
Philippines peso
.0204 49.000 4.6
Singapore dollar
.7079 1.4126 0.4
South Korea won .0008584 1164.91 0.9
Sri Lanka rupee
.0067696 147.72 2.4
Taiwan dollar
.03142 31.825 3.3
Thailand baht
.02825 35.400 1.7
Czech Rep. koruna

Denmark krone
Euro area euro
Hungary forint
Iceland krona
Norway krone
Poland zloty
Russia ruble
Sweden krona
Switzerland franc
Turkey lira
Ukraine hryvnia
UK pound
in US$
.00004478
US$vs,
YTDchg
Fri
per US$ (%)
22332
0.8
.04017 24.896 0.04

.1459 6.8559 0.2
1.0857 .9211 0.04
.003508 285.06 1.9
.008916 112.16 13.8
.1192 8.3921 5.1
.2456 4.0719 3.8
.01520 65.788 8.5
.1100 9.0928 7.7
1.0122 .9879 1.4
.3078 3.2488 11.3
.0390 25.6300 6.8
1.2593 .7941 17.0
Middle East/Africa
Bahrain dinar
Egypt pound
Israel shekel
Kuwait dinar
Oman sul rial
Qatar rial
Saudi Arabia riyal
South Africa rand
2.6523 .3770 0.02

.0605 16.5290 111.1
.2606 3.8372 1.4
3.2789 .3050 0.5
2.5968 .3851 0.04
.2746 3.641 0.04
.2666 3.7507 0.1
.0698 14.3354 7.4
Close Net Chg % Chg YTD%Chg
WSJ Dollar Index 89.65
0.24 0.27 0.58
Sources: Tullett Prebon, WSJ Market Data Group
MARKETS
Trumps Agenda Jazzes Stocks

So much for Wall Street hating uncertainty.
Since the Republicans swept
Washington, investors have
snapped up stocks and sold
bonds, anticipating a future in
which President-elect Donald
Trump and Republicans in
Congress cut taxes, slash regulation and push through a
large fiscal stimulus.
While the market moves
About Face
The U.S. election upended investors assumptions across markets...
S&P 500 performance
2200
2150
By Colin Barr,
Chris Dieterich
and Corrie Driebusch
seem to point to a future in
which stronger growth will finally put ultralow interest
rates behind us, the so-called
reflation trade in which stocks
rise and bonds fall amounts to
a roll of the dice.
That is because investors
are betting that the full Trump
economic agenda will accomplish what the investment
world likes, such as tax relief
and deregulation, while largely
ignoring
the
potentially
growth-reducing impact of
other campaign promises, such
as much tougher stances on
trade and immigration.
The rush out of long-term
Treasurys and into industrial
stocks might already have
gone too far, portfolio managers warn.
For many money managers,
it is the latest sign of the markets eagerness to call an end
to the era of low rates, even
before a stronger recovery
takes root.
Trades based on rising
growth and inflation are probably going to work through Inauguration Day, but then we
have to start dealing with the
reality, said Scott Minerd,
global chief investment officer
at Guggenheim Partners LLC,
an asset manager with $250
billion under management.
Price declines in the U.S.
long bond, whose yield rose the
most last week in seven years
to 2.928%, have pushed the 30year yield near its likely level
Nov. 7-11
Best week
since 2014
s3.8%
Oct. 25 through Nov. 4

Longest losing streak
since 1980
t 3.1%
2100
Election
Day
2050 One-hour intervals

Oct. 25
26
27
28
31
Nov. 1
...Investors sold bonds on expectations

of higher interest rates...
Yield on 10-year Treasury note*
...They bought sectors perceived

to benet from less regulations...
Nasdaq Biotechnology index
2.2%
3600
2.0
3200
Election
Day
1.6
Monday
Tuesday
2800
Five-minute intervals
2400
Wednesday Thursday
10
11
...And they bet on lower taxes, which

could help earnings continue their
recent improvement.
Est.
S&P 500 quarterly earnings
as of
Nov. 11
10% change from year earlier

Since Nov. 4
s 14%
YTD through Nov. 4

t 26%
5
10
J
M A
M J
2014
*Yields rise as prices fall; U.S. bond market closed Friday

Sources: FactSet (S&P 500 performance and earnings); Thomson Reuters (Treasurys); WSJ Market Data Group (NBI)
when the Federal Reserve completes its current tightening cycle in two to three years, Mr.
Minerd said. Rates are not going to continue to go straight
up, he said.
Yet investors embrace of
the reflation narrative is evident in the scramble out of assets that benefit from low rates
and into those deemed likely to
gain from higher rates.
Dispersion, measuring the
standard deviation of one-day
returns for S&P 500 industry
groups, surged on Wednesday
to the highest since 2008, ac-
2.118%
Highest yield
since January
1.8
cording to Macro Risk Advisors.

S&P 500 financials rose
4.1% that day, as investors bet
banks will benefit from rising
long-term interest rates that
tend to fatten their lending
profits and potentially from
deregulation that will open
new lending opportunities.
Utilities sank 3.7%, reflecting
a bet that rising rates will diminish the sectors appeal. It
was the sectors largest daily
gap since 2009.
Investors pulled $400 million from emerging-markets
stock funds and $73 million
from emerging-markets debt

funds in the week ended
Wednesday, according to Bank
of America Merrill Lynch, the
largest in 19 weeks in both
cases.
The iShares TIPS Bond ETF
has pulled in $1.4 billion so far
this month, the biggest monthto-date tally on record, according to BlackRock Inc. TIPS are
inflation-protected government
bonds that increase their payout when inflation exceeds a
certain threshold.
Stephen Cucchiaro, chief
investment officer at 3 EDGE
15
16
Asset Management, said his

firm sold emerging-market
equity exchange-traded funds
and gold after the election
jostled both markets.
Its a race against time,
Mr. Cucchiaro said. Will the
economic piece kick in before
the deficit rises and inflation
spikes up?
But buying the financials
and inflation-protected bonds
are trades that investors have
been trying for years with
only occasional success.
Sharp rises in U.S. bond
yields in the spring of 2010
and the second half of 2013

were quickly reversed, reflecting the persistence of soft
global growth, aging populations that limit consumption
and rising debt loads that
constrain spending.
Over the longer term, the
secular forces on the global
economy dont change, said
Brian Levitt, senior investment
strategist at OppenheimerFunds.
Mr. Levitt said that likely
means that even after Mr.
Trumps election, inflation
doesnt actually go up substantially.
A Trump agenda likely will
provide good news for stock investors at a time of stretched
valuations and soft growth.
Lower taxes could boost earnings at a time they have been in
decline.
Cutting the effective corporate tax rate to 20% from the
current 26% stands to double
the 2017 earnings growth rate
of S&P 500 companies, Goldman Sachs Group Inc. estimates.
The relief would be welcome. Third-quarter earnings
are on track to rise 2.9% from
a year earlier, snapping a
string of five quarterly declines, according to FactSet.
Still, some analysts warn
that the volatile trading after
the election surprise might
have led to gains that arent
sustainable.
The Nasdaq Biotechnology
Index surged 14% last week,
its best performance since
2000, reflecting wagers that a
Trump administration will be
easier on drug-price regulation than a Democratic one.
Connor Browne, a portfolio
manager at Thornburg Investment Management, said that
his firm is trimming biotechnology holdings.
Even within health care,
were not totally convinced
that the positive stock-market
reaction is the correct one,
he said.
Ben Eisen
HEARD ON THE STREET

Tesla at Risk of Getting Sunburn
Sunburned
SolarCitys adjusted
earnings per share
$0
0.50
1.00
1.50
2.00
2.50
3.00
2013
14
15
16
Source: FactSet
MARCIO JOSE SANCHEZ/ASSOCIATED PRESS
Election season isnt over

quite yet.
The outcome of Tesla Motors proposed acquisition of
SolarCity will be known next
week. SolarCitys third-quarter results, and the way the
company flattered the numbers, shouldnt reassure
Tesla stockholders that the
deal is a wise one.
The solar-roofing company reported a net loss of
$225 million on sales of
$200 million. Meanwhile, SolarCity cut its guidance for
total panel installations for
the third time this year.
SolarCitys latest loss
came despite a decision to
extend the assumed useful
life of installed solar panels
to 35 years from 30 starting
July 1. The new assumption
helps flatter profitability by
reducing depreciation expense. SolarCity changed the
useful life after commissioning a new engineering study
which concluded panels will
last longer than previously
expected. But since these
panels are a relatively new
product, experience is scant.
Even positives in the re-
Elon Musk, chairman of SolarCity
port come with big caveats:

SolarCity reported a cash
balance of $259 million, a
$113 million increase from
the second quarter. But that
increase came in part from
new debt, rather than traditional cash-flow generation.
Worse, a good chunk of
that debt was bought by SolarCity executives and board
members, rather than the
general public. Chairman
Elon Musk, CEO Lyndon Rive
and technology chief Peter
Rive bought a combined

$100 million of a $124 million solar-bond issue during
the quarter.
SolarCitys results are the
last major piece of information before the results of the
shareholder vote become
known on Nov. 17. If shareholders approve, Tesla will
acquire each SolarCity share
outstanding in exchange for
0.11 share of Tesla.
The deal has attracted
controversy: One indepen-
dent shareholder advisory

service, Institutional Shareholder Services, recommended the deal be approved, citing the
transaction as a necessary
step toward [Teslas] goal of
being an integrated sustainable energy company. But
rival firm Glass Lewis said
the deal mostly amounts to
a thinly veiled bailout plan.
Mr. Musk is the chairman
and largest shareholder of
both companies.
Regardless of motivation,
Tesla will have to scramble
to meet the promises it has
made to its shareholders.
Meeting its production goal
of 500,000 cars by 2018, up
from about 80,000 this year,
is still the key to Tesla justifying its sky high stock valuation. Completing that task
will require significant capital to get the Model 3 mass
market sedan into production on time.
Bringing an unprofitable
and heavily indebted SolarCity into the fold will only
increase the odds that Tesla
investors eventually get
scorched. Charley Grant
OVERHEARD
CEOs have been cautiously
expressing their views about
a Donald Trump presidency.
PepsiCos Indra Nooyi criticized Mr. Trumps statements
about women. Companies
such as New Balance supported his antitrade stance.
Grubhub CEO Matt Maloney was more blunt, criticizing his employees for supporting Mr. Trump.
Please reply to this email
with your resignation because
you have no place here, he
wrote the day after the election.
The email quickly went viral. The hashtag #boycottgrubhub spread on Twitter.
Some suggested Mr. Maloney
should be fired.
He tried to apologize and
said he didnt ask for anyone
to resign if they supported
Mr. Trump.
Grubhub shares are down
by one-fifth since earnings
late last month on concerns
of slowing growth. Perhaps
Mr. Maloney was trying to
get his customers so angry
that they worked up an appetite.
Lighter Inventory Helps Lift Retailers Fortunes for Now

For U.S. retailers, lighter
inventory is in vogue. In a
sector with shrinking sales,
however, it is only one piece
of the profitability puzzle.
As third-quarter results
roll in from department
stores such as Nordstrom,
Macys and Kohls, as well
as many specialty retailers,
lighter inventory has been a
constant theme. For many,
this has meant less discounting and better gross margins. That trend could make
for a relatively strong fourth
quarter, marking a swift reversal in sentiment for a sector that just last spring
many investors were writing
off as doomed.
But light inventory can
Sales Over
Macys gross prot,
change from a year earlier
10%
5
0
5
10
15
FY 2015
16
Note: Fiscal year ends in January

Source: FactSet
cut both ways, and investors

may not be properly accounting for that risk.
Having lower inventory
makes it more difficult for
retailers to maximize sales.
That, in turn, makes it
tougher for them to cover

the fixed costs of running
stores and administrative expenses. Tight inventory can
also mean selling out of a
popular item. To the extent
that lower inventory means
less breadth of offering, it
also puts more pressure on
retailers to hit the right
fashion notes. Failing to do
so could mean having to discount anyway.
Granted, some retailers,
among them Nordstrom and
Kohls, have been able to find
the sweet spot. They can get
away with missing a few
sales because their gross
margin rate has improved
enough that gross-margin
dollars offset them, accord-
ing to Richard Jaffe, an analyst with Stifel Nicolaus.

Both Nordstrom and Kohls
also have been trimming expenses, relieving some of the
pressure to leverage their
fixed costs.
Still, it doesnt take much
to disrupt the inventory balance. Retailers that sell out
of items are often tempted
to order more. If that incremental merchandise doesnt
resonate or if consumers
continue to wait for discounts, it could kick off another round of promotions.
As for cutting costs, that
isnt a long-term strategy
with e-commerce operations
demanding big investments.
For many retailers, the obvi-
ous expenses have already

been cut. Even closing stores
doesnt solve the problem
unless retailers reduce their
selling general and administrative expenses in equal
proportion to the closures.
That should prove increasingly difficult as retailers invest in e-commerce to compete against Amazon.com.
Macys, which has plans to
close 100 stores, said Thursday that costs were higher
than expected due in part to
higher investment in e-commerce.
Leaner inventories could
mean a stretch of stronger
results, but that alone wont
reverse retails long-term
fortunes.Miriam Gottfried
Sales Probe
Takes Toll
On Alexion
It has been a difficult year
for Alexion Pharmaceuticals. It just got worse.
Alexion, a biotech company specializing in rare-disease treatments, said Wednesday it would delay filing
its quarterly report with the
Securities and Exchange
Commission because of
an internal investigation into
sales practices of Soliris, a
treatment for blood diseases.
The inquiry stems from allegations recently made by a
former employee that some
sales practices were inconsistent with company policies and procedures.
Alexion said in a statement that the company has
yet to discover any facts that
would require a restatement
of past financials. Still, the
situation is serious enough
that the company delayed its
filling and has retained outside counsel in its investigation. The risks to investors
are significant. Soliris sales
of $729 million accounted
for nearly all of the companys third-quarter revenue.
Meanwhile, an attempt to
diversify product offerings
has been slow to generate
results.
Alexion spent $8.4 billion
to acquire Synageva BioPharma last year. But two
drugs acquired in that deal
have yielded minimal sales.
Despite a more-than-30%
decline in the share price
this year, it is debatable
whether equity investors are
being adequately compensated for risk. Shares trade
at more than 20 times forward earnings, according to
FactSet.
That means an awful lot
continues to ride on Soliris
sales. Until more clarity
emerges on the sales investigation, Alexion shareholders
will have cause to sweat.
Charley Grant
JOURNAL REPORT | BIG ISSUES
F
The Eollow
Onlinxperts
e
wsj.c
om/e at
x
2016 Dow Jones & Company. All Rights Reserved.
Monday, November 14, 2016 | R1
perts
SQUARING OFF
We invited advocates on each side of seven crucial energy issues to

make their best case. Read their debates here and join the conversation online.
Is Nuclear Power
Vital to Hitting
Emissions Targets?
Nuclear power is fizzling.
In recent years, many countries have largely stopped building new nuclear
plants and are looking elsewhere for power. In the wake of the Fukushima
disaster in 2011, Japan shut down all its nuclear reactors, though a few have
restarted since last year. Germany also moved to phase out nuclear power
by 2022. (China is a notable exception, with 20 reactors under construction.)
Market conditions heavily favor cheaper fuels such as natural gas over nuclear. And the regulatory climate favors other sources of energy. In the U.S.,
the Obama administration introduced rules requiring power plants to cut CO2
emissions 32% from 2005 levels by 2030, though President-elect Donald
Trump says he will drop that rule. While nuclear plants dont generate CO2,
companies can tap federal tax credits for investing in renewables. Whats
more, power companies can sell renewable electricity at higher prices because utilities need wind and solar supply to comply with state rules.
Meanwhile, fears about catastrophic nuclear accidents and unresolved
questions about waste storage linger.
With all that, some experts say nuclear plants are the best way to transition
to a low-carbon future until the price of renewable energy drops further. But
others say the plants are too risky and costly to keep in operation.
GEORGIA POWER COMPANY
YES
Renewables Cant
Fill the Gap Yet
BY SUSAN TIERNEY
IM ALL FOR making smart
investments in energy efficiency and renewable energy. We should be aiming
to reduce carbon emissions
and limit the worst effects
of climate change.
At the same time, we
need to keep electricity affordable and accessible to regular folks and sophisticated energy
managers alike. That means nuclear power is
an essential piece of the equation, at least for
now. We need to retain the carbon-free power
produced at existing nuclear plants for as long
as they can safely operate.
A heavy load
In the near term, existing nuclear plants
are vital to hitting our carbon-reduction targets. We need them to help transition the
power system to a lower-carbon profile. And
getting it right economically is essential to
many peoples willingness to pull carbon out
of the system.
Consider: Todays nuclear plants provide
one-fifth of our power but nearly two-thirds
of carbon-free electricity. Yes, the costs of
wind and solar are dropping dramatically.
Thats great news. But for now, they provide
just 5% of our power supply. And scaling up
their market share takes time. Retaining existing nuclear power is good for consumers. A
nuclear plant operates around the clock, and
wind and solar only operate when the wind is
blowing and the sun is shining. In 2015, one
megawatt of wind capacity produced power
32% of the time, one megawatt of solar produced power 29% of the time.
In the long term, of course, the current
fleet of nuclear plants will eventually retire
and needs to be replaced by electric resources
that dont contribute to climate change. But
in the near term, any time a nuclear unit retires, its output is replaced by plants that
burn fossil fuel. Thats the reality we face.
Given all that, allowing existing nuclear
Dr. Tierney is a senior adviser at the
Analysis Group, an economic, financial
and strategic consulting firm. She can be
reached at reports@wsj.com.
plants to close would be a disaster. Nuclear

plants output helps to keep electricity prices
lower than they would otherwise be, and premature loss of safely operating nuclear plants
would leave the nations electric-resource mix
much less diverse, with much higher costs and
much higher carbon emissions. To repeat: I,
too, want to see the nations power sector reduce its carbon footprint, rather than increase
it because existing nuclear units are closing.
Were already probably facing big increases
in power costs due to market forces and infrastructure needs. Several nuclear plants are
scheduled to retire, and many other of the nations 100 reactorsincluding some of the nations best-performing plantsare financially
challenged.
No reward
Thats happening in large part due to the
effect of historically low natural-gas prices on
revenue in wholesale power markets. Whats
more, most of those power markets dont
compensate nuclear units for their carbon-free
generation. Companies that generate nuclear
power dont get credit for producing carbonfree electricity, the way they do for using renewables. And utilities that buy the power
dont get rewarded for buying that electricity.
Its also important to remember that nuclear retirements differ from other generating-unit retirements: Unlike other kinds of
traditional power plants, nuclear plants cannot practically be mothballed and then
Please see NUCLEAR YES page R2
Carbon Impact
NO
Nuclear Isnt
Cleanor Cheap
BY MICHAEL DORSEY
A RIDICULOUSLY expensive way to boil water!
Thats what a good
friend always remarked
when asked what he
thought about nuclear
power.
In October 2016, the
world experienced an unprecedented historical milestone. For the first time in history, the
International Energy Agency confirmed that in
the previous year renewable energy, largely
from solar and wind, became the biggest
source of new global electricity capacity, surpassing coal. This achievement received headline attention. In fact, solar and wind alone already have more energy-generation capacity
than nuclear power. By the end of 2015, the
world-wide capacity of wind-power generation
all by itself reached 432 gigawatts, while
global nuclear-power-generation capacity was
only 383 gigawatts.
Nuclear advocates have always faced a
tough reality. Questions of safety aside, the
Power Supply
2006
U.S. electricity generation
by source, 2006 vs. 2015.
As coal use has plunged,
natural gas and renewables
have risen; nuclear has
49%
been almost at.
Life-cycle greenhouse-gas emissions by power

source, in grams of CO2 equivalent per kilowatthour generated. Nuclear is one of the lowest.
Hydropower 7
Wind 12
Coal
Natural gas
Nuclear
Hydropower
Wind, solar,
other renewables
Petroleum
Other
Nuclear 16
Concentrated solar
26
Geothermal
40
Biopower
43
Solar photovoltaic
54
Note: Figures are

medians of multiple
published estimates for
each power source.
Conventional
natural gas
Unconventional
natural gas
20%
20%
19%
7%
493
1,001
Source: National Renewable Energy Laboratory
33%
33%
475
Coal
2015
2%
2%
1%
6%
7%
1%
1%
Source: Energy Information Administration
costs of licensing, maintaining and running a

nuclear-power plant and properly disposing of
the waste are becoming increasingly impossible to manage.
Rising costs
Approximately a quarter of U.S. reactors
have underwater operating expenses. They
are cost-ineffective and noncompetitive at
current electricity-generation rates. Upsidedown nuclear finances are worsened as the
prices of solar- and wind-energy generation
continue to fall.
From California to New York and at many
points in between, like Illinois and Nebraska,
nuclear plants have been closed, are closing or
are scheduled to close. The Nuclear Energy Institute, the industrys leading trade association, has forecast that possibly an additional 15
to 20 nuclear plants are at risk of a premature
shutdown in the next decade due to financial
troubles. The U.S. Nuclear Regulatory Commission is currently overseeing the decommissioning of 19 closed nuclear reactors across the
country. Some countriesBelgium, Germany,
Spain and Switzerlandhave announced that
they are phasing out nuclear power entirely.
Some critics argue that closing nuclear
plants will increase the amount of fossil-fuel
use, and, by extension, the amount of greenhouse gases that are then released into the
atmosphere.
Limited carbon impact

But the only way that fossil-fuel power generation goes up is if those plants increase
their output. The reality is that every efficient
power plant already operates at its maximum
output. And when energy companies make
their big investments these days, they are
moving in two dominant directions: building
new renewable capacity and making their inefficient fossil-fuel plants efficientthey arent
building new, dirty plants. There arent huge
amounts of new carbon that are about to
come on line if we close down nuclear plants.
Some also say renewables are costly and
take too long to get up to speed, so we need
nuclear in the meantime.
First, nuclear plants are retired over
yearssometimes it can take almost a decade.
Meanwhile, the price of solar took just five
years to drop almost 70%, and it continues to
fall at record rates. Renewables are now vastly
cheaper than nuclear power, and the price will
continue to fall.
Please see NUCLEAR NO page R2
Dr. Dorsey is a director on the Sierra
Club National Board and full member of
the Club of Rome. He can be reached at
reports@wsj.com.
INSIDE
Should Federal Fuel-Economy
Standards Be Relaxed?
R2
Is It Time to Deregulate
All Electric Utilities?
R3
Does the Oil-and-Gas

Industry Still Need
Tax Breaks?
R4
Whats the Best Way to

Finance New Energy
Technologies?
R5
www.ebook3000.com
Are Low Oil Prices

Good for the Economy?
R6
Is OPEC Still Relevant in

Energy Markets?
R7
R2 | Monday, November 14, 2016
Should Federal Fuel-Economy Standards Be Relaxed?

In 2012 the Obama administration finalized new, tougher fuel-efficiency standards
requiring cars and light-duty trucks to average 54.5 miles per gallon of gasoline by
model year 2025, up from 35.5 miles per
gallon in the 2016 model year under the previous standards.
YES
They Make Cars More

Costly, With Little
Environmental Gain
BY THOMAS J. PYLE
BUYING A CAR is one of
the most important decisions a family makes, and
for many its a struggle to
balance safety, affordability
and their preferences for
looks, size and other features.
Unfortunately, federal fuel-efficiency mandates are making these decisions more difficult by driving up the costs of new vehicles by
thousands of dollars.
Indeed, in many cases it is now impossible
for people to buy the car they want or need
or, in some cases, to buy a new car at all. They
simply cant afford it.
In effect, bureaucrats in Washington have
decided for them what kind of car they can
drive.
Its time to scale back the regulations and
return the decision of what type of vehicle to
buy where it belongswith the consumer.
Administration officials said the tougher

standards would protect the environment
and strengthen the economy at the same
time. The targeted fuel efficiency would dramatically reduce vehicles greenhouse-gas
emissions, the administration said, and
would save consumers money thanks to
greatly reduced spending on gasoline, encourage innovation, increase the global competitiveness of U.S. auto makers and create
jobs in the auto industry.
All those arguments are still made today
by supporters of the fuel-efficiency mandates.
bating climate change.

Sure, greater fuel efficiency gives drivers
more money to spend in other ways. But if you
cant afford to buy a vehicle in the first place,
that hardly matters to you. As for the effect
on the economy, consumer spending on other
items has no greater effect on GDP growth
than consumer spending on gasolineand
spending choices should be left to consumers.
The argument that tough fuel-efficiency
standards support the global competitiveness
of American auto makers ignores the fact that
those companies can compete without being
told what to do by the government. For the
same reason, innovation, and the companies
that supply innovative products to the auto
makers, wouldnt wither without onerous fuelefficiency standards.
In short, the mandates will do nothing to
address their stated goal. In exchange, they
will continue to increase the price of new vehicles, price millions of Americans out of the
market for new cars, and result in the federal
government making decisions about what
kinds of cars consumers buy.
Thats a bad deal. Auto makers should build
cars and trucks that best fit the needs of
Americans and their families, not bureaucrats.
Mr. Pyle is president of the Institute for
Energy Research. He can be reached at
reports@wsj.com.
But opponents say the standards are

hurting consumers by driving up the price of
cars. And the environmental impact, they
say, isnt enough to justify those costs. The
auto industry, these critics argue, can thrive
and remain innovative without the government setting stringent efficiency mandates.
spending is the largest component of economic growth, fuel-cost savings translate into
broad-based economic gains and job growth.
NO
Consumers and Auto

Makers Benefit From
The Standards
Supporting competitiveness
Second, to remain competitive, the Big
Three auto makers of Detroit must offer more
fuel-efficient vehicles. During the last global
spike in oil prices (when fuel-efficiency standards had essentially stagnated for years), the
Detroit Three found themselves overinvested
in gas-guzzling vehicles they couldnt sell.
This contributed to their financial downfall in
2009. Foreign auto makers, which offered a
wider variety of more fuel-efficient models,
were able to seize additional U.S. market
share. Maintaining strong fuel-economy standards will reduce the risk of market-share
losses for American auto makers when fuel
prices inevitably rise again, according to a recent study commissioned by Ceres.
In addition, weakening the standards would
put the Detroit Three auto makers at a competitive disadvantage by reducing the economies of scale that come from producing vehicles on global platforms, rather than using
different platforms for the domestic and international markets. Global platforms are crucial
because meeting global market demand for
more fuel-efficient vehicles will become increasingly important: By 2025, vehicles sold
outside the U.S. will account for about twothirds of American auto makers total sales.
Third, maintaining strong fuel-efficiency
standards locks in growth for innovative suppliers to the auto industry. The Ceres study
shows that supplierswhich employ 2 times
as many people as auto makers, and are making the bulk of investments in fuel-saving
technologystand to gain about $90 billion in
increased orders through 2025 under the standards. The requirements are creating new
markets and driving innovation. For example,
the use of carbon fiber and aluminum is expected to double in the next five years because of the standards.
BY CAROL LEE RAWN

FEDERAL FUEL-ECONOMY
standards are creating U.S.
jobs, driving innovation,
enhancing auto makers
global competitiveness and
reducing our countrys dependence on oilall while
guaranteeing billions of
dollars in fuel savings for American families
and businesses.
Weakening the standards, as some auto
makers are advocating, would undermine our
economic self-interest. Heres why:
First, the standards benefit consumers and
the economy. The standards set different mileage goals for different sizes of cars and trucks.
Any vehicle you want will get better gas mileage than its predecessor. And less money
spent on gas leaves consumers with more
money to spend elsewhere. Because consumer
Big price increases
Theres no point
Why did the administration impose these
onerous mandates in the first place? Proponents claim the mandates are critical for combating climate change. But the administration
itself has said that the regulations would have
a negligible impact on climatereducing
global temperatures by, at best, 0.02 degree
Celsius by 2100. A regulation that produces
only that meager effect is not critical for com-
Flawed studies
DANIEL ACKER/BLOOMBERG NEWS
Cars that consume less fuel are a great

choice for many people, but for others, especially for families with small children, larger
vehicles like minivans and SUVs are a necessity, not a luxury. These vehicles give families
much more transportation flexibility, which is
critical when trying to balance caring for children and work responsibilities.
For others, whose livelihood depends on
their vehicle, power and durability make the
most sense.
How much of an effect have the fuel-efficiency mandates had on those choices?
In publishing its mandates, the administration has acknowledged that they would cause
the price of an average vehicle to increase by
nearly $3,000 by 2025. A study by the National Automobile Dealers Association found
that an increase of that size could price nearly
seven million drivers out of the new-car market.
The administrations estimate, however, appears to be a dramatic understatement, as
new research suggests the cost increases for
new vehicles are much higher.
Economists Salim Furth and David Kreutzer
looked at the average price of new vehicles
over several years, adjusted for changes in
various measures of the vehicles quality. They
found that prior to 2008, the price of new vehicles was falling, but after the first round of
the new fuel-economy mandates, those prices
dramatically increased.
Today, new vehicles cost over $6,000 more
than they likely would have without the
Obama administrations mandates, the study
found.
Federal fuel-economy standards mandate much higher mileage for cars and light trucks by 2025.
Fleet Performance
Mileage Priority
Average miles per gallon of new vehicles in the

U.S. by model year. Mileage has tracked federal
standards closely in most years.
The percentage of people in an online panel saying

they would consider the following factors when
buying their next car
85%
Cost
40 mpg
Gas mileage
70%
Type of vehicle
69%
Car
30
Light truck
20
Size
64%
57%
Comfort
10
52%
Brand name
Style
0
1990
95
2000
05
10
Luxury 17%
40%
Source: AYTM online panel of
508 respondents, August 2016
Source: Transportation Department
The study by economists Salim Furth and

David Kreutzer on the effect of the administrations fuel-efficiency standards on car prices is
flawed. The study looks at overall increases in
prices but doesnt separate the effect of the
standards from the effect of other factors, such
as the increasing popularity of more-expensive,
larger vehicles. In addition, the price trend
changed in 2008three years before the standards went into effect. Meanwhile, a study by
Synapse Energy Economics predicts that with
the standards, consumers will save more than
$3,000 over the life of a car because lower fuel
costs will outweigh higher vehicle costs.
The National Automobile Dealers Association report on the standards effect also has
several flaws, according to an assessment of
the standards by the Environmental Protection
Agency, the National Highway Traffic Safety
Administration and the California Air Resources Board. For instance, the NADA report
overestimates costs associated with the standards, and ignores the role of the used-car
market in consumer buying decisions.
Finally, the transportation sector is now the
largest source of greenhouse-gas emissions in
the U.S. We simply cannot meet our climate
goals without reducing vehicle emissions.
The bottom line: Making great vehicles that
go farther on every gallon of fuel is good for
the auto industry and good for America.
Ms. Rawn directs the Transportation Program at Ceres, an advocacy group that promotes sustainable business practices. She
can be reached at reports@wsj.com.
THE READERS WEIGH IN | FUEL-ECONOMY STANDARDS

Four years ago the Obama administration adopted average fuel-economy
standards for cars and light trucks of 54.5 miles per gallon by 2025, up from
35.5 mpg for the 2016 model year (or an average window sticker of about 27
mpg, based on different formulas). We asked readers whether they thought the
standards should be relaxed. Here are edited excerpts of what they had to say.
We mandate labeling on food, so
certainly a consumer wants to know
what the machine will get.
Matthew Dovell
Volts I see on the road daily, and

how many Suburbans, Tahoes, and
Silverados.
Jordan T. McGee
We dont need to have a fleetwide standard because that leads

to companies like Chevrolet making
cars whose mpg is rated (city/hwy)
at 15/19, 13/23 and 12/17 but then
compensating with cars like the
Spark EV, 119, and the Volt EV, 106.
Ask me how many Sparks and
Since this is the government,

then it must be good right? Im just
curious what they will tax next. The
current tax rate for fuel is 18.4
cents a gallon for gasoline and 24.4
cents for diesel fuel. The better the
fuel mileage, the less money the
federal government takes in. Until
Nuclear Yes
Continued from the prior page
brought back on line if need be, because of
the huge costs incurred even in a temporary
shutdown. This means that once a unit is retired, its electric-system benefits go away for
good. With this in mind, keeping a plant in
operation provides important insurance to
help keep us on course to reduce carbon
emissions.
And there are potentially benefits to nuclear in the long termif we continue invest-
we get to the point where we are

not using fossil fuels, the tax rate
will go up or they will find another
source to tax.
Either way, Joe Average gets
stuck.
Mike Barnes
account other factors in the consumption equation, such as distance driven.

James Howard
cus. Its time to stop rearranging

the chairs on the Titanic and demand innovation.
Paul Becker
Insufficient half-measure.
Gregg Davey
35 mpg looks good compared to

the past. 54 mpg looks good compared to the present. But if we
think longer term, 54 might be half
of what we could achieve without
compromising our cars performance.
G. Stewart Duncan
Without demand these standards

will fail to achieve meaningful results. Companies may manufacture
Prius and Volt to comply with CAFE
mandates, but the vast majority of
consumers prefer full-size vehicles
that cannot meet the standards.
Developing and mainstreaming an
alternative fuel source such as hydrogen is the only way everyone will
be satisfied. That is where R&D
dollars and regulations need to fo-
Heres a way to reduce the cost

of cars after a higher initial investment: Choose the vehicle wisely,
maintain it properly, and keep it for
15 years to minimize the effects of
depreciation.
Rick Becker
Raising the gas tax would do

more to reduce emissions than raising the CAFE. That will take into
ing in nuclear and figuring out how to design

advanced technologies to bring down their
construction and operating costs, bring them
to markets in much shorter time frames, and
address the core safety and waste-management problems of this fuel.
Its too soon to know that we can do that,
and its also too soon to throw out them out of
the running. We need to keep our options as
robust as possible if we want to address climate change both urgently and cost-effectively.
Weve got our work cut out for us, even
with existing nuclear plants as part of our
near-term mix.
Nuclear No
Continued from the prior page

Finally, theres one big falsehood at the
core of arguments for nuclear: that its
clean. The full life cycle of nuclear power
from mining, milling, the separation of the
uranium from the ore, to ultimate plant decommissioningcollectively generates vast
amounts of carbon dioxide.
To put it another way: Nuclear reactors
are only carbon-free when they are created
out of thin air, like something in a Bugs
High miles per gallon fuel innovation. A well-managed carbon tax

would take us into a cleaner future.
We have to decide now what does
the future look like for our children.
Its not about us, its about them.
Maurizio Larranaga
Bunny cartoon. And they bring many other

environmental costs beyond carbon, such as
the disposal of their waste, When we account
for the full environmental cost of nuclear
plants over their lifetime, they do not make
fiscal sense.
Continuing advancements, steadily falling
prices and economies of scale are rapidly accelerating the spread of renewables. Spending
time and resources on 20th-century nuclear
power plants is folly.
Focusing efforts on a cleaner, renewable energy future is a triple win: for the environment, the economy and public health.
Is It Time to Deregulate All Electric Utilities?

About two decades ago, the electric industry started getting a makeover. A number
of states launched initiatives to break apart
monopoly utilities and allow retail companies
to sell electricity to consumers.
Today, in more than a dozen states and
the District of Columbia, retail customers can
YES
It Is the Best Way to

Lower Costs and
Increase Innovation
BY ANDREW N. KLEIT
TODAYS MODERN society
requires a reliable electricity system. Anyone who has
lived through a major
blackout, such as occurred
in the Northeast in 2003,
knows that when the lights
go out, life shuts down.
Users of electricity also want power to be
affordable, of course, and at the same time,
policy makers increasingly are demanding that
more of the nations energy come from renewable sources such as wind and solar.
Meeting these competing challenges wont
be easy. Creating a cleaner, more reliable and
less expensive electricity grid is going to require new ideas and a great amount of technological development to lower costs. Unfortunately, these are things that run counter to the
incentives of regulated utilities.
shop around for the best deals on electricity,

sometimes in the same way they shop
around for a cellphone provider.
The question is, has the experiment with
choice paid off, and is it time for the rest of
the country to embrace open, competitive
retail electricity markets?
cause it doesnt have to run through the gantlet of regulatory review.

The push to create a cleaner portfolio of
generation resources is just one challenge that
calls out for the further use of market forces.
Electricity for the most part cant be
stored, meaning supply must nearly match demand at all times or the grid could come under stress and crash. The problem with renewable power such as wind and solar is that it
operates when nature allows, not when grid
demand calls for it.
This is already causing problems in California, which has invested heavily in solar energy. The supply of solar power declines rapidly in the late afternoonright when people
are coming home from school and work. The
result is tremendous stress on the electricity
grid, as a large amount of electricity capacity
must be ramped up at significant cost to
supply power to the system in a short period.
Please see DEREGULATE YES page R4
Voters in Nevada apparently think so.

Last week, they overwhelmingly approved a
ballot measure that aims to end the monopoly of the states largest utility and allow
customers to choose their provider.
Supporters of deregulation say that monopoly utilities have little incentive to inno-
NO
The Evidence So Far

Shows Little Benefit
To Customers
BY KENNETH ROSE
IT WAS SUPPOSED to be
easy. Surely competition
would be better for electricity markets than oldfashioned regulationthe
same form of regulation
utilities had been subject to
for almost 100 years.
Well, as it turns out, introducing competition for electricity supply is much more com-
Around the Country

A status report on the states and deregulation of electricity and natural-gas markets
plicated than many policy makers had anticipated. As a result, the effort to restructure the
complex and essential business of electric utilities hasnt delivered the expected benefits.
In the mid-1990s, after industries such as
airlines were successfully opened to competition, it seemed like it was time for the musty
old electric-utility business to get a makeover.
By the end of the 1990s, about half of the
states either had already passed legislation to
open their utilities to competition or were seriously thinking about ituntil something
went seriously wrong. Beginning in 2000 and
continuing into 2001, the restructured power
market in California came apart at the seams.
An electricity-supply shortage led to blackouts, soaring prices for consumers and the
collapse or near-collapse of major investorowned utilities. States that hadnt yet passed
or implemented electric-competition laws
stopped in their tracks; others repealed their
laws or restricted competition in some way.
When the dust settled, 13 states and the
District of Columbia decided to forge ahead
with full retail deregulation, allowing all retail
customers to choose their suppliers and pay
market-based electricity rates. (A few states
adopted a hybrid approach, in some cases offering choice only to certain customers.)
So has the promise of lower prices materialized?
Failure to deliver
Innovation incentives
In a regulated system, government agencies

make basic production and grid-access decisions, and set electricity rates in a way that
guarantees utilities a certain rate of return on
capital investments and other approved costs.
Because utilities profits are a function of how
much they spend, there is little incentive to
cut costs and increase efficiency.
The other option is to rely as much as possible on market forces. While no one has figured out how to completely deregulate the
electricity market, restructuring clears the
way for competition in certain segments, such
as generation, that arent natural monopolies.
In restructured markets, investment decisions are made by entrepreneurs and engineers instead of government lawyers, and
companies spend money only if they believe
there is a market for the products they are
building. Innovation happens more quickly be-
vate or operate efficiently, and that it will

take market forces to create a cheaper,
cleaner, more reliable electricity system.
Opponents say choice hasnt exactly delivered on its promise of lower prices. In fact,
its legacy so far is one of price run-ups and
instability, they say.
Natural gas deregulated

Electricity deregulated
Natural gas/electricity deregulated
Natural gas/electricity regulated
Source: ElectricChoice.com

JOURNAL
Turns out, its hard to see any clear benefit.

Comparing the weighted average price for residential customers in the 14 jurisdictions with
full retail competition to the 30 states that
stayed regulated from 2002 through 2015
shows that rate increases for residential customers were about the same. Prices went up
50% in states that proceeded with choice and
52% in states that stayed regulated, according
to Energy Information Administration data.
Larger customers seem to have fared better
over the same period; commercial customers
in regulated states saw a 50% price increase
compared with 27% for choice states. Industrial customers in regulated states saw a 53%
increase compared with a 30% increase in
choice states. However, time frame matters.
From 2002 to 2008, commercial and industrial
customers in choice states saw rate increases
of 43% and 60%, respectively, due mostly to
Please see DEREGULATE NO page R4
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Does the Oil-and-Gas Industry Still Need Tax Breaks?

U.S. oil-and-gas companies receive billions
of dollars in federal tax incentives annually
linked to activities such as tapping new
wells. Do these incentives benefit consumers, or are they simply gifts that unfairly favor the fossil-fuel industry?
The White House clearly is in the camp
YES
They Have Benefited

A Sector Critical to
The U.S. Economy
BY MARK J. PERRY
THE CALL TO eliminate tax
deductions for the oil and
natural-gas industry is no
less absurd today than it
was in 2013, the last time
the issue was a headlinemaker.
These incentives have
encouraged domestic investment in energy
production and enabled U.S. companies to
compete with overseas rivals, allowing the
American petroleum industry to flourish.
But the tax breaks havent just been good
for oil-and-gas firms; theyve also led to billions of dollars in savings for American consumers and businesses from lower energy
costs. Have no illusions about it: Tax incentives are essential for unconventional oil-andgas production, and there would have been no
shale revolution without them.
Incentives such as the intangible drilling
deduction and the special percentage depletion allowance encouraged energy firms to invest hundreds of billions of dollars in the advanced technologies needed to tap shale
formations richly endowed with oil and natural gas. Tax breaks also enabled producers to
unlock sizable deposits of oil and gas in ultradeep waters. Together, these investments
have put the U.S. on the path to becoming energy independent, a hopeless quest only 15
years ago.
that wants the tax breaks reduced. Not only

has President Barack Obama repeatedly
called for a repeal of much of the oil-andgas industrys favorable tax treatment, his
budget proposal for fiscal 2017 included a
new $10-a-barrel fee on oil to help fund lowcarbon infrastructure projects.
to the U.S. economy, or so blinded by its climate crusade it doesnt care that the attempt
to put oil-and-gas producers at a disadvantage
is essentially an attack on Americans standard of living.
Thanks to an abundance of domestic oil and
gas, the amount U.S. consumers spend on energy has fallen below 4% of total consumer expenditures this year for the first time in history, according to the U.S. Bureau of Economic
Analysis. In dollar terms, lower energy costs
over just the past few years have translated
into hundreds of billions of dollars in savings
for American households, dwarfing any taxpayer savings that could be achieved by repealing oil-and-gas tax breaks.
Tax reform might be fair if legitimate taxdeductible expenses were to be eliminated
across the board for all industries that currently take themincluding farmers, auto
makers, food producers, drug companies and
software firmsand if that were to be accompanied by reductions in the corporate tax
rates that applied to a broader tax base.
But singling out the elimination of legitimate tax-deductible production expenses for
one of Americas most essential industries
an industry critical to job creation, affordable
energy and even our nations national securityis the kind of misguided thinking we
cant afford.
Dr. Perry is a scholar at the American
Enterprise Institute and a professor of economics in the School of Management at the
University of Michigan-Flint. He can be
They say tax incentives have fueled investments in unconventional production, which
has led to abundant supplies of oil and gas
and lower prices for consumers. They believe
the debate isnt really about taxes, but rather
about climate-change crusaders wanting to
punish the fossil-fuel industry.
Those calling for an end to the breaks say

oil-and-gas firms have made huge profits
over the years and have more than enough
incentive to continue doing business. They
say Washington needs to end special carveouts to overhaul the corporate tax code.
Industry supporters see it differently.
Lets focus on two of the largest oil and gas

tax breaksthe intangible drilling-costs deduction and the special percentage depletion
allowanceand how they exemplify the kind
of special carve-outs Congress needs to eliminate if it is to reform the corporate tax code.
These special breaks offer producers significantly more generous capital cost write-offs
than those available to other U.S. taxpayers.
NO
By Playing Favorites,
They Shift the Tax
Burden to Others
BY RYAN ALEXANDER
Potential savings
The intangible drilling costs deduction allows qualified oil-and-gas companies to immediately deduct all costs for designing and fabricating drilling platforms, including wages,
fuel, repairs, hauling and supplies related to
drilling wells and preparing them for production. Companies in other industries that construct plants, equipment or other productive
assets generally must capitalize all of the associated costs over time, typically based on
the assets useful life. By targeting subsidies
to oil and gas, tax rules like this disadvantage
other businesses that make equally important
contributions to our economy. The Joint Committee on Taxation estimates that repealing it
would save taxpayers $13 billion over 10 years.
Then theres the special percentage depletion allowance, which allows some oil-and-gas
companies to deduct more than they invest in
an asset, the very definition of a tax shelter.
Natural-resource developers can claim a depletion deduction for the costs of acquiring a
proportion of a resource as it is depleted. The
special allowance gives independent producers
a flat deduction of 15% of their gross income
from the first 1,000 barrels-a-day of production. Although the deduction is generally limited to the value of a propertys production,
nothing prevents a producer from deducting
more than its investment in the property. As
a result, oil-and-gas producers or royalty owners may pay zero tax on their income on certain properties. Owners of marginal wells are
provided with even more generous rules. Repealing this allowance would save taxpayers
more than $12 billion over 10 years, the Joint
Committee on Taxation estimates.
THE TAX BREAKS that

Congress provides on income derived from or devoted to certain activities
are designed to encourage
that specific activity. But
what they end up doing is
distorting economic decision making and rewarding activity that would
occur even without the special treatment.
The oil-and-gas industry is a perfect example. It has enjoyed special tax preferences since
the start of the modern income tax in the early
20th century. Yet despite the cyclical nature of
oil-and-gas markets, the industry has made
huge profits over the years and proved that demand for its products is more than enough incentive to continue doing business.
We dont needand cant affordto continue to provide these incentives to this industry. Like all tax breaks, oil and gas exclusions
are costly to the U.S. Treasury and shift the
tax burden to others, either through higher
current tax rates or borrowing that will increase taxes on future generations.
The real fight
Misguided thinking
The anti-fossil-fuel crowd is either dangerously ignorant of the importance of fossil fuels
Deregulate Yes
Continued from page R3
To address this, Californiawhich has a
competitive wholesale electricity marketis
joining forces with utilities and grid operators
in neighboring states in an energy imbalance
market that allows for transfers of power
among participants. A free flow of electrons
across the West will allow grid operators to
balance supply and demand at a lower cost,
and allow California to permit increased penetration of renewable energy sources without
building unneeded capacity paid for by consumers. (The market already has saved California ratepayers more than $100 million
since late 2014, according to the California
electricity-grid-market monitor.)
As technology advances in other areas,
power markets will have to adapt further. For
example, many are looking forward to an era
of electric vehicles, but their widespread use
could put more strain on the grid, threatening
its reliability. One solution is time of day
pricing that incentivizes drivers to charge up
at night, when power usage and wholesale
prices generally are lower. An innovation like
that isnt likely to happen quicklyor at all
in a system where regulators set pricing rules.
Of course, many supply-and-demand challenges could be solved if the cost of storing
Picking winners
EDDIE SEAL/BLOOMBERG NEWS
Oil powers more than 90% of the transportation sector, while natural gas heats almost
half of our homes, powers much of the manufacturing sector and now generates the largest
share of our electricity. Considering oil and gas
are indispensable to our economy, we should
be looking for ways to encourage more production, not looking for ways to punish producers.
The truth is, the fight over the industrys
tax deductions isnt really a fight about taxes.
Rather its a debate about the importance and
future of fossil-fuel production in the U.S.
For climate crusaders who view oil and gas
as a problem instead of the lifeblood of our
economy, rejiggering the tax code is seen as a
catalyst for restructuring the energy economy.
They began their assault on oil-and-gas producers under the guise of punishing the industry for windfall profits. In 2013, critics
called for eliminating industry tax credits and
deductions, maintaining that $100-a-barrel oil
was here to stay. It was inconceivable that the
industry could ever again face lean times.
But oil prices did fall. In fact, they crashed.
Two years of low energy prices have wreaked
havoc on the industry. U.S. independent producerswhich lean the most heavily on the tax
deductions and creditshave been hit hardest.
Since 2015, more than 100 oil-and-gas producers have filed for bankruptcy. More than
1,000 drilling rigs have been idled in recent
years, and more than 100,000 American workers let go. Profits for major firms in the industry have suffered. In the second quarter of this
year, Exxon Mobil Corp. reported its smallest
profit for any quarter since 1999 and Chevron
Corp. and ConocoPhillips each had a loss of
more than $2 billion in the first half of this
year. Not surprisingly, criticism over industry
profits has vanished as quickly as the peak-oil
theory. The underlying cause of the debate is
now fully in the open.
Tax breaks for the oil-and-gas industry have often come under the budget microscope but survived.
Breaking It Down
Federal tax subsidies for fossil-fuel production total $4.76 billion a year in forgone revenue, the U.S.
government recently estimated. Four of the biggest tax breaks and their annual cost:
FUELS
INVOLVED
WHAT IT IS
Expensing of
intangible drilling costs
Oil and
natural gas
Favored treatment of the many costs associated with tapping new oil and gas wells.
$1.63 billion
Domestic manufacturing
deduction for fossil fuels
Oil, coal,
natural gas,
lignite,
oil shale
This broad deduction for domestic manufacturing and production income effectively
provides a lower tax rate for earnings from
fossil-fuel production.
$1.05 billion
Percentage depletion for

oil and natural-gas wells
Oil and
natural gas
Effectively gives independent oil and naturalgas producers and royalty owners a lower tax
rate than they would get from cost depletion,
the type of depletion used by most other
industries.
$966 million
Accelerated amortization
period for geological and
geophysical expenditures
Oil and
natural gas
Independent producers can amortize these

costs over two years, compared with seven
years for integrated oil companies.
$288 million
PROVISION
Source: U.S. Self-Review of Fossil Fuel Subsidies, December 2015
electricity was brought down to economical

levels, allowing it to be implemented in the
grid. But again, that is going to require a great
amount of technological development to lower
costs, along with market rules that allow competitive firms to connect storage facilities to
the grid. These are investments that regulated
monopolists have little incentive to make.
Imperfect system
Restructuring hasnt lived up to all of its
promises. Business customers in restructured
states appear to have benefited more than
residential customers in terms of lower power
prices, perhaps because they have more incentive to shop around.
But in terms of keeping the cost of energy
production down, restructuring has worked.
Most important, no restructured state is repeating the mistake of spending billions of
dollars on nuclear power, which low-cost natural gas has made a money loser.
New technologies, innovation, green power
and competitive markets all go together. To
create a cleaner, more reliable and less expensive electricity grid, it is time to escape the
dictates of government officials and free up
competitive forces.
Dr. Kleit is a professor of energy and environmental economics at Pennsylvania State
University. Email him at reports@wsj.com.
ANNUAL
REVENUE COST
Deregulate No
Continued from page R3
trends in the price of natural gas, while customers in regulated states saw increases that
were 9 and 19 percentage points below that.
Why didnt things work out as hoped?
Many factors have played a role over the past
20 years, but a big factor is something policy
makers have no control overindustry structure. That is a function of the generation and
distribution technologies, and affects nearly
every aspect the business. For starters, electricity markets still need considerable economies of scale to operate efficiently, and restructuring hasnt provided sufficient benefits
to overcome the loss of efficiency that occurs
when monopoly utilities are dismantled.
The right balance

Traditional utility regulation is far from
perfect, but the version of deregulation we
have come up with today is inferior in many
respects and isnt going to magically lead to
cheaper, cleaner, more reliable electricity.
What deregulation has delivered so far is
retail and wholesale price volatility, which has
created considerable tumult for both buyers
and sellers of power. When customers have
complained (understandably) about price
spikes, regulators and legislators have re-
Industry supporters may say tax breaks and

deductions are what spurred unconventional
forms of oil-and-gas production that led to
lower energy prices for American consumers.
I would say market forcesincluding $100a-barrel oil and technological advanceswere
the main drivers of the hydraulic-fracturing
production boom that brought us shale oil, not
broad undisciplined tax subsidies. Whats
more, the industrys tax deductions dont just
go to companies that take risks. They are
available regardless of whether a well is being
developed with proven technology, drilled in
proven formations or would be highly profitable without the favorable tax treatment.
Would energy prices increase for most
Americans if the tax breaks were eliminated?
Its unlikelyeven if the repeal caused some
marginally economic properties in the U.S. to
go unexploited. World supply and demand determine oil and gas prices, and what we have
seen in the current drop of oil prices is that
Saudi Arabia effectively determines the price
of oileven in the U.S.
The oil-and-gas industry likes to say its being unfairly singled out when its tax subsidies
are cited as examples of our broken tax system, or that anti-fossil-fuel groups are trying
to punish it to advance clean energy. Taxpayers for Common Sense sees it differently.
We believe Congress effectively is picking
fossil-fuel investments as the winners, while
leaving other investments as relative losers.
Eliminating the industrys special deductions
and breaks would help Congress broaden the
tax base and lower the overall corporate tax
rate, a widely supported goal of tax reform.
Ms. Alexander is president of Taxpayers for
Common Sense, an advocacy group that
monitors government spending. She can be
sponded with price controls. When prices subsequently dropped, power sellers cried foul
and in some cases received subsidies. Such
concessions prevent the market from functioning well and have created a version of deregulation that doesnt work for anyone.
I would argue that the decision we face between market forces and regulation is on a
spectrum; it doesnt have to be an either/or
choice, as many believe. The best approach,
the one that fits the industrys structure most
closely and will provide the incentives needed
to take the electricity system into the future,
is likely to combine elements of both.
But we cant forget that regulation has kept
our electricity system stable for more than
100 years, through recessions and world wars,
and forced the industry to reduce pollution
from power plants significantly since the
1970s. Simply hoping that competition will
lead us to a clean-energy utopia is unwise and
likely to end in disappointment.
Retail markets were given a chance, and it
didnt work outno shame in that. But it is
time to learn from our mistakes and find a
balance between regulation and markets that
is a better fit for this business.
Dr. Rose is an independent consultant and
a senior fellow in economics at the Institute
of Public Utilities at Michigan State University. Email him at reports@wsj.com.
NY
Whats the Best Way to Finance New Energy Tech?

BY CASSANDRA SWEET
As diplomats from 200 nations
gather this week in Marrakesh,
Morocco, for U.N.-sponsored
global climate talks, one likely
topic of discussion will be better, cleaner and lower-cost energy technologies.
Raising financial support
for new energy technologies is
a
major
roadblock,
particularly
as
private
funding has
declined. U.S.
venture-capital equity financing for
Severin
new energy
Borenstien
and
other
clean technologies has
fallen to $2.2
billion this
year through
September,
from
$5.7
billion
in
2011, accordJim Rogers
ing to Dow
Jones VentureSource.
To explore
the challenge
of financing
new energy
technologies,
we
spoke
with Severin
Jesse Pichel
Borenstein,
E.T. Grether
chair in business administration and public policy at the
University of California at
Berkeleys Haas School of Business; Jim Rogers, former chairman and chief executive of
Duke Energy Corp.; and Jesse
Pichel, managing director at
Roth Capital Partners in New
York. Here are edited excerpts.
Costs Are Lower
WSJ: What do you see as the
most promising way to finance

new energy technologies?
MR. BORENSTEIN: The good
news has been the great technological progress in solar
photovoltaic cells, wind power
and storage, which has
brought renewable costs way
down. But the bad news for
renewables has been the fracking revolution that has lowered natural-gas and oil prices
to less than half the consensus
forecasts of a decade ago. Innovative approaches to financing are important, but they
cant overcome the tide of fundamentals.
MR. ROGERS: Venture-capital
and private-equity investment
of clean-tech startups is diminished. There are multiple
approaches emerging to take
their place. Some are similar
to Bill Gatess bold approach
of putting billions of dollars
into looking for big solutions.
There is another approach, in
which organizations or investment groups focus more on
helping startups scale their
technology. As a consequence
of scaling it, it attracts new investment. Broadscale Group
[an investment firm working
with energy and industrial
companies and strategic partners] is an example of this.
MR. PICHEL: Most VCs who got
into the clean-tech sector
early had poor performance,
which for all practical purposes forced them out of the
sector. Or they have become
much more discerning, which
means the clean-tech companies they will look at fall into
a very small universe.
Now, we have seen the VC
marketplace mature with certain VC clean-tech specialists
rising to the top. There are a
dozen VCs that have cut teeth
in the sector and have developed an expertise. They are
shortlisted for any new investment in the sector. Again,
these groups are much more
discerning and there are fewer
of them, which means fewer
companies can get VC funding.
We have seen the advent of
strategic VCs that are backed
by utility, fossil-fuel or energyequipment global conglomerates. Some of these strategic
VCs in the advanced-energy
sector are backed by multiple
strategic limited partners.
This has two advantages: The
strategic VC can leverage the
expertise of the limited partners to gain confidence around
an investment. And the limited
partners can become earlyadoption customers or partners for the company.
Also, we are seeing more
socially responsible investing,
or SRI, impact investing and
green initiatives. We have
seen numerous billionaires
start SRI/green funds. Many
of these executives are from

the technology, industrial and
fossil-fuel arenas. These investors do not require the
high rates of return witnessed
from traditional VCs. These
investors are often motivated
by the challenge and impact
from such investment, and
not the short-term gain in
value. These are often the
best investors a startup company can have.
Finally, many of the new
strategic investors are from
China, who are increasingly putting money to work, especially if
there is an application in China.
Natural gas
WSJ: Are cheap oil and gas mak-
ing it difficult to finance new,

cleaner energy technologies?
MR. ROGERS: With cheap, available gas, the power industry
has switched from coal to gas.
From 2005-2015 the power sector reduced its carbon emissions by 20% primarily due to
this shift. Would there have
been a similar switch so soon,
with any of the clean technologies on the horizon today? Gas
made electricity cleaner and
cheaper, and did it really fast.
MR. BORENSTEIN: Cheap natural
gas has lowered electricity
prices and has been the primary driver of reduced coal
consumption. That has probably
reduced GHG emissions, though
the most recent research on fugitive emissions [leaking natural gas] suggests the gains may
be significantly smaller than we
have been thinking.
In any case, the role of natural gas is limited when it comes
to reducing world-wide GHG
emissions. We need to move to
low- or zero-GHG energy
sources rapidly, which could
mean wind and solar, but eventually could also mean nextgeneration nuclear power, some
tidal/wave power technologies
that are still in their infancy,
and carbon capture and sequestration, which could be combined with coal or natural-gas
power plants to vastly reduce
their emissions.
Energy mandates?
WSJ: Should the government in-
tervene with financial help or

mandates for energy companies
to adopt new technologies? California is requiring its three
largest utilities to buy or contract for 1,325 megawatts of
grid energy storage by 2020,
and other states are considering similar measures.
MR. BORENSTEIN: We should
subsidize new energy sources
and in some cases even mandate certain sources, along with
pricing greenhouse gases. Those
are not conflicting policies, they
are complementary policies.
We need to create cost-effective, low-carbon energy,
and that means experimenting. We should support new
technologies with the goal of
their spreading to the developing world. Any technology
we subsidize should be subject
to that test: Is this something
that the developing world is
plausibly going to follow?
I would argue that rooftop
solar does not meet that test.
The panels have gotten much
cheaper, but its hard to see
how the developing world is
ever going to find it cost-effective to put solar panels on
individual homes.
MR. ROGERS: There needs to be
an increase in government res e a rc h - a n d - d e v e l o p m e n t
spending. . We talk about climate change, but were not investing to reduce the carbon
footprint of our electricity
sector or our transportation
sector. Nature could provide
30% to 40% of the solution to
the carbon emissions in our
environment, through things
such as reforestation.
There is no great sense of
urgency to develop new technologies that produce low-carbon electricity to consumers
thats affordable and drives
our economy.
MR. PICHEL: The fossil industry
has enjoyed favorable government policy and subsidies for
decades, and that continues
today. Renewables are still not
competing on a level playing
field in terms of policy support. In addition, fossils emit
carbon pollution, and their extraction methods have a negative environmental profile,
thus fossils have a cost to society that is not properly reflected. A renewable electron
is pollution-free, sustainable,
anti-inflationary and is inherently worth more than a fossil
electron, and that should be
priced correctly in U.S. policy.
Given the steep cost-reduction curves of renewables and
the strategic national benefit

of having a lower-cost, sustainable, more diversified, and
distributed power complex, it
would behoove the U.S. to support the industry with R&D
and deployment mandates. Its
in our national interest.
MR. BORENSTEIN: When you
run experiments, at some
point, some of those experiments have to be declared failures. You cant just keep pouring money into a technology
that isnt going to work. Were
supporting carbon capture and
storage right now, and we
should be giving it a try. At
some point, if it doesnt make
progress, you pull the plug.
MR. PICHEL: The German model
[of subsidizing renewable energy] seemed to work, and it
brought down the level of subsidy as the cost came out.
Once
industry
volumes
reached a certain level, the
subsidies ratcheted down. The

idea was to efficiently subsidize the industry.
America gives a straight
30% off [in the form of a federal investment-tax credit],
and that really did not bring
down the costs as quickly as in
other countries. The tax equity
has a cost, and the accounting
treatment is also complex. You
havent really seen as many
corporations invest in renewable energy through tax credits as I would have hoped because its complicated and
theres impact to the balance
sheet and income statement
for the companies that do it.
If it were simpler to invest
in clean energy, there would
be more investment.
Ms. Sweet is a reporter for
The Wall Street Journal in
San Francisco. Email her at
cassandra.sweet@wsj.com.
Shrinking Support
U.S. venture-capital investment in companies developing clean energy
technologies has been trending lower of late. Venture nancing by year:
$7 billion
6
5
4
3
2
1
0
03 04 05 06 07 08 09 10
11
12
13
14
15
Note: Includes venture nancing for biofuels, energy-efciency products and services,
batteries and other grid energy-storage devices, solar and wind power, recycling and some
water products.
Source: Dow Jones VentureSource
Developing countries will consume

65% of global energy by 2040.
The world energy landscape is changing dramatically.
For example, two-thirds of energy-supply investment
is now taking place in emerging economies. This
creates opportunities as well as risks. CME Group
gives producers and suppliers the tools they need
to capture these opportunities while managing risks
in volatile oil and natural gas markets. This is how
the energy industry can deliver in the face of everchanging consumer demand. This is how the world
advances. Learn more at cmegroup.com/fuel.
CME Group is a trademark of CME Group Inc. The Globe logo is a trademark of Chicago Mercantile Exchange Inc. All other trademarks are the property of their respective owners.
Copyright 2016 CME Group. All rights reserved.
www.ebook3000.com
16*
* Through Sept. 30
Are Low Oil Prices Good for the Economy?

Oil prices have been on a wild ride lately.
From late 2010 to late 2014, U.S. crude
traded between roughly $80 and $110 a barrel. Then came a plunge. Earlier this year,
they were down to around $26but then
soared to $50 in early June, signaling that a
longstanding oil glut might be waning.
YES
It Gives Consumers
More Money and Cuts
Manufacturing Costs
BY STEPHEN MOORE
THE GREATEST stimulus to
the U.S. economy in the
past two years has been the
steep decline in oil prices.
Two years ago, the price of
oil was $105 a barrel. Today it is closer to $45
about a 60% decline.
Think about the boon to American consumers. In 2014, gasoline cost more than $4 a gallon at the pump in many areas of the country.
Now the price is closer to $2.50 a gallon.
Heres a rule of thumb. Every one-penny reduction in gas prices puts more than $1 billion
a year into the hands of consumers for them
to save or to spend on other things. So, that
$1.50 reduction in the price at the pump has
been a $150 billion a year stimulus plan.
What other policy could possibly carry that
kind of economic wallop? And whens the last
time you saw someone at the gas pump complaining about low gas prices?
Some will say that putting extra cash in
consumers pockets doesnt really help the
economy because they dont necessarily spend
what they save at the pump. But thats great:
Savings and investment are the seed corn of a
prosperous economynot consumption.
The recovery that many experts predicted

didnt materialize, however. Prices recently
eased below $50 once again.
What comes next? Oil prices are now expected to hover between $40 and $50 for
longer than many had forecast; some dont
see a major increase in prices coming for
short run. But remember: The two biggest

booms in the stock market in U.S. history were
in the 1980s and 1990s. In both of those decades, oil prices fell and fell and fell. The
worst decade since the Great Depression for
stocks was the 1970s, and that was when the
oil price soared from $3 to $30 a barrel.
No shortage
We can also put aside the inane idea that
America is running out of oil. It was only a
few years ago that Barack Obama said in a
speech at Georgetown University: The United
States of America cannot afford to bet our
long-term prosperity, our long-term security,
on a resource [oil] that will eventually run
out. Paul Krugman wrote in 2010 that commodity marketsare telling us that were living in a finite world. And they both have Nobel Prizes! In reality, America isnt running
out of cheap oil, we are running into it.
If we continue to promote cheap, abundant
and reliable made-in-America energy, the U.S.
within six years can become not just energy
independent, but the energy dominant country
in the world.
Thats spectacularly good news for not just
our national economy, but our national security as well.
Mr. Moore is an economist at Freedom
Works, economic adviser to President-elect
Donald Trump, and co-author of Fueling
Freedom: Exposing the Mad War on Energy.
He can be reached at reports@wsj.com.
two years. One of the factors holding down

the price: The boom in shale oil, which now
accounts for half of the supply in the U.S.
market.
But is a lower price good or bad for the
economy? Some say that the effect is positive, lowering prices at the gas pump for
consumers, as well as the cost of doing

business for many companies that rely on
oil.
Others argue that any such benefits are
minor, and are outweighed by the negative
effects on the U.S. oil industrywhich has
become a big part of the economy.
spend that money on other goods and services, which stimulates the economy, directly
via increased consumption and to some extent
indirectly through investment unrelated to oil.
The trouble here is figuring out just how
much purchasing powerand actual purchasingcomes from lower prices.
For one thing, it cannot be taken for
granted that refineries will always pass on
their cost savings to consumers at the pump,
so lower oil prices dont always translate into
lower prices for drivers. On the consumer
side, instead of spending the windfall income
from lower gasoline prices, households might
use it to pay off debts or increase savings.
As for cutting the cost of doing business for
manufacturers that use oil, its true that any
modern economy runs on energy. But energy
costs tend to be small relative to other costs
in production, with the exception of a few industries that use crude oil as feedstock. So,
businesses arent really saving that much under low oil prices.
More broadly, whatever stimulus the economy has gotten from lower prices has been
canceled out by the damage done to the oil
sector. Oil has become a much larger portion
of the American economy, so the economy is
much more vulnerable to oil-price declines.
While the oil industry thrives when prices are
high and positively contributes to growth of
the domestic economy, it pulls the economy
down when oil prices slump.
The result: The recent drop in oil prices has
meant a net zero effect on real growth in the
gross domestic product.
Also remember that the overall economic
effects of lower prices depend on the environment in which a major change in prices occurs. Part of the recent oil-price drop is due to
increased supply. However, there has also
been a decrease in demand because of slowing
growth in the global economy. Even if lower
oil prices had a modestly positive effect instead of a neutral one, it would make almost
no difference in the face of such a powerful
global trend.
NO
The Damage to the Oil

Sector Cancels Out
The Positives
BY CHRISTIANE BAUMEISTER
EVER SINCE the oil crises
of the 1970s, the conventional wisdom holds that
oil-price increases are bad
for the economy. This suggests that lower oil prices
should be good news for
the economy.
Not necessarily.
There is no question that falling oil prices
have brought down the cost of production for
industries that depend heavily on oil, or that
theyve increased the disposable income available to households. What matters in the end,
however, is the overall effect of lower oil
prices on the U.S. economy. And that effect
has been negligible.
Effects cancel out

A drop in the retail price of gasoline acts
like a tax cut from the point of view of gasoline consumers. Having extra money in their
pockets means that households are able to
Other beneficiaries
No clear benefit
EDDIE SEAL/BLOOMBERG NEWS
It isnt just motorists who benefit mightily

from low energy prices. Energy is the fundamental input in everything we produce in
America. The chair you are sitting in. The
breakfast you ate this morning. The car you
drive. The computer you power up.
That means American manufacturers have
lower production costs when prices of oil and
gas (and coal, for that matter) fall.
And because energy prices have fallen
faster in the U.S. than in other countriesnatural gas is half as expensive in the U.S. as in
Europe and Asialow energy prices are a
competitive advantage to almost all America
companies.
The blessings of low oil prices are doubly
felt in the U.S. because we still import hundreds of billions of dollars of oil a year. The
big losers from low energy prices are Iran,
Saudi Arabia, Russia, ISIS and OPEC. Couldnt
happen to a nicer group of people.
Now, it is true that many of my friends in
the oil and natural-gas industry are hurting,
and the stocks of these companies have been
hammered. The good news is that technology
is improving all the time.
The current low oil prices were brought to
you by fracking and other new drilling technologies that have made the shale oil and gas revolution a reality. And because those production
technologies keep getting better and better, oil
and gas companies are learning to make money
even with oil at $40 to $50 a barrel. Necessity
really is the mother of invention.
What about the argument that oil production is a big part of the American economy
now, so the shocks to the oil industry cancel
out the benefits felt elsewhere? That argument
doesnt hold up. As a nation, we are sufficiently
diversified to withstand oil slumps. Even Texas
has seen growth as oil prices have fallen.
Some naysayers also think that the big reason the price of oil is down is that the economy is downso a low price isnt a good
thing. Yes, there are good and bad reasons
that oil prices fall. The good reason is the
supply rises. The bad is a weak economy. We
dont want the world to go into a depression
to keep oil prices low. But more supply is always a good thing because it reduces the fundamental economic challenge of scarcity.
I also keep hearing that low energy prices
are bad news for stocks. Maybe in the very
Low oil prices mean savings for consumers and businessesbut also hurt the U.S. oil industry.
Oil and Economic Output

U.S. gross domestic product per unit of energy use has
increased steadily, indicating less economic dependence
on oil and less vulnerability to price changes
Gross domestic product per unit of energy use

for selected countries, 2013
$12.53*
U.K.
$8*
Germany
10.93
Brazil
10.63
Mexico
10.45
Japan
9.95
France
9.70
8.40
India
7.67
Australia
7.36
U.S.
Canada
0
1990
95
00
05
10
*GDP in constant 2011 dollars per kg of oil equivalent
China
Russia
5.86
5.30
4.94
Source: World Bank
Some argue that lower oil prices give

American companies a competitive advantage
internationally. But consider that a weakened
global economy is driving down demand for
U.S. exports. Whats more, the appreciation of
the U.S. dollar against almost all of its trading
partners makes exports more expensiveand
thus less attractive.
Theres also the argument that low energy
prices are good for the U.S. economy because
they hurt the economies of countries with
which we are not on good terms at the moment. Good along which dimension? Because
low oil prices undermine the fiscal stability in
countries that depend on foreign-exchange
earnings from oil exports? Because these budget troubles might threaten political stability?
Because they might spur governments to increase oil production to keep revenue from
falling furtherputting additional downward
pressure on the oil price and hence hurting
the U.S. economy even more? Because they reduce their imports from the U.S.?
The supposed positive effect of low oil
prices on the stock market is also dubious.
Historically, the correlation between oil prices
and stock prices has been both negative and
positive. The market is responding not to oilprice fluctuations themselves, but to whats
driving those fluctuations.
Simply put, when lower oil prices reflect
mostly a weaker global economy, stock prices
will tend to respond by going down. When
lower oil prices are mainly due to good news
about plentiful supplies, the market will tend
to respond by going up.
The bottom line: Low oil prices have only
modest effects on real GDP growth, and which
direction it goes depends on how much of the
stimulating effect from consumption is offset
by the loss in investment in the oil sector.
Dr. Baumeister is an assistant professor
in the department of economics at the
University of Notre Dame. Email her at
reports@wsj.com.
THE READERS WEIGH IN | OIL PRICES AND THE ECONOMY

Are low oil prices good for the economy? By almost a 2 to 1 margin, readers
said yes in a recent online poll for the Journal. Here are edited excerpts of
their comments.
Oil has been and will continue to
be a deeply cyclical, capital-intensive
business. The question of does
low oil help the consumer? doesnt
take into effect time. Over the short
run, of course lower crude and gas
prices boost discretionary spending.
Over the long run, though, todays lack of upstream capital investment will end up affecting production and ergo, drive prices back
up. After all, whats the best cure
for low prices? Low prices...
Max Schlubach
Lower prices for oil = lower
transportation costs, which = lower
production costs, which = lower
prices for all goods and services. In
theory.
Todd Jess @Tjesster
If prices are low, there is no
profits for energy self-dependency,

and U.S. will spend its dollars on
foreign oil. How is that good?
Peter Tan @peterthl
Cheaper gas means people are
willing to travel more, meaning
more tourism dollars, travel dollars,
and even everyday spending at
stores, restaurants, etc., etc.
Jay Scott
Lower commodity prices are
good if they are caused by better
tech increasing supply faster than
demand growth.
John Pritchard
The economy cares much more
about the stability of the price of oil
than it does about the price of oil
itself.
Andrew Matheson @thenewmath1
Low With the Flow

Are low oil prices good for the
economy? Here is how readers
responded in an online poll:
Yes | 64%
No | 36%
Low oil prices have affected my

friends in the business. Theyve
lost their jobs, and if they have
found jobs they have taken huge
pay cuts. When you are in the industry for decades and have a
family and a home and all of a
sudden find yourself making maybe
half of what you once earned. Im
not talking about overpaid executives either.
ErinandClint Hamilton
Cost of production is cheaper,

which may reflect on energy prices,
transportation,shipping, etc., if the
prices are low, but of course on the
other side it may back down innovation for new energy development
and drilling for new oil refineries for
some companies may not be profitable enough.
Edi Musliji
The situation which causes low
prices defunds exploration to an extent which in the long run makes it
a seesaw, so it is neither good nor
bad.
Asderathos @Asderathos
Usually falling oil prices have
been beneficial for the global economy. However, this time is different
because the oil price is falling to a
level which is making most oil production uneconomic. Many oil producers are likely to lose significant
amounts of money. These unprecedented losses could have serious
effects for global finance and the
state of the global economy. This

will outweigh any benefits consumers and firms may notice from
cheaper petrol prices.
Abrahams Arun
People are stupid if they think
low oil prices are good for our economy! I live and work in oil-field
country. It has killed ours.
Bobbie @CarterMomma47
Oil means energy...and energy at
a lower price means products at a
lower price, which in turn means
economy deflation.
Marco Fabbri
Its not as easy as a yes or no
answer! It affects different sectors
in different ways.
Lucas Carson @eklu65
Still costs more to take it out of
the ground in the U.S., so the thing
that led our economic recovery is
still going to die off.
Steven Depuy
BY ELENA CHERNEY
For two years, the Organization of the Petroleum Exporting
Countries has appeared powerless to stop a slide in prices
that has punished the economies of oil-dependent members, including Saudi Arabia.
Such a state of affairs calls
into question whether the oncepowerful cartel is still a relevant force in todays market.
The group reasserted itself in
September in
Algiers, saying its members agreed
to cut production. Details are to
be ironed out
in Vienna on
Jason Bordoff Nov. 30. But
doubts
remain as to
the likelihood
of a meaningful accord.
To explore
OPECs ability to act effectively, The
Helima Croft
Wall Street
Journal consulted
a
panel of experts: Jason
Bordoff, professor of professional
practice in
international
Bassam
and public
Fattouh
affairs and
founding director, Center on Global Energy
Policy, at Columbia University;
Helima Croft, head of commodity strategy, RBC Capital Markets; and Bassam Fattouh, director of the Oxford Institute
for Energy Studies. Here are
edited excerpts.
Still relevant
WSJ: Is OPEC still relevant?
MR. BORDOFF: In some ways,
OPEC is still relevant. It is a very

large source of current and future supply and can still affect
the market physically and psychologically. Even with strong
growth in U.S. tight oil, OPEC
supply will be needed in the medium term to meet growth in
global oil demand.
The recent agreement in Algiers reminds us that the potential for OPEC market management still exists. And OPEC
remains relevant because of its
ability to affect market sentiment, discourage short sellers
and change risk perceptions.
But its relevance is a far cry
from the public perceptions of
OPEC as a dominant cartel.
Real market management
would require OPEC to be willing to cut production millions
of barrels a day, as the Saudis
did in the 1980s when they
slashed output by more than
75% from over 10 million barrels a day. That is not likely.
Effective market management would also require the
ability to quickly put additional
supplies onto the market to offset price spikes from unexpected supply or demand
shocks. Yet OPEC spare capacity, largely held by Saudi Arabia, is at historically low levels,
so that buffer doesnt exist.
MS. CROFT: I think of 2016 as
the year OPEC became relevant
again for the market. After
OPEC took a pass on pulling
barrels to defend prices in November 2014, many market
participants completely wrote
off the organization as irredeemably obsolete. It was seen
as too riddled by internal divisions and conflicting agendas
to be able to forge any type of
consensus on market-management measures, and admittedly
still is seen that way by some
market participants. The Iranian-Saudi regional rivalry in
particular was continuously
cited as an intractable obstacle
to an output agreement.
A number of oil watchers believed Saudi Arabia was so
committed to crushing U.S.
shale producers and so financially strong that the leadership
wouldn't flinch even if prices
dropped to the single digits.
Sentiment began to shift
when some of the key OPEC
players and Russia started
talking up the prospects of an
output freeze and the need for
higher prices. The very public
freeze discussions helped kickstart the rally in the first
quarter, after prices plunged
into the 20s.
On multiple occasions,
OPEC rhetorically intervened
when the oil market was
caught in a bear trap and
sparked a rally by signaling a
willingness to take assertive
action. We saw it this August,

when the products-driven selloff pushed prices below $40
and OPEC came out with the
announcement of the special
meeting in Algiers.
Even with the continued
skepticism, OPEC has largely
put in something of a psychological floor in the run-up to
its Nov. 30 meeting in Vienna
and has demonstrated that the
multiple pronouncements of
the organizations demise
were premature.
MR. FATTOUH: By signaling a
shift [earlier this year] from
pure market-share strategy toward cooperation, OPEC did
influence market outcomes by
shifting market sentiment and
squeezing many of the shorts
out and providing support to
the oil price, even though
there has been no impact on
physical balances so far.
An agreement to cut output
in November will have a key
impact on balances and will
help speed the rebalancing
process, especially because
OPEC has been the main contributor to supply growth.
Eyes on Vienna
ASSOCIATED PRESS
Is OPEC Still Relevant in Energy Markets?
Qatars oil minister after an OPEC meeting in 1983, when the groups power was at a peak.
OPEC and the World

Crude oil production in thousand barrels a day. OPEC output has risen 5.5% over the past decade, compared
with 10% for the rest of the world.
50 thousand
WSJ: Is it realistic to think that
OPEC members can turn their

Algiers consensus into a deal
on Nov. 30?
MR. BORDOFF: It remains to be
seen whether OPEC really has
the ability or willingness to
curtail supply. Several countries
are already exempted from the
deal, and there exists deep mistrust within OPEC today, exacerbated by Saudi-Iran tensions,
as well as the lack of member
adherence to the last cut in December 2008 in Algeria.
It is also by no means clear
that Russia will join the deal
and, even if so, from what
level it might agree to freeze
or cut output given that its
September production surged
to a record high. President
Vladimir Putin has pledged his
support for a coordinated cut,
although Rosneft CEO Igor
Sechin has opposed it.
OPEC reasserted
itself in Algiers,
but details are to
be ironed out.
MR. FATTOUH: Assigning quotas for individual countries
has proved to be difficult, and
this time is no different. There
are countries like Iran and
Iraq, which have ambitious
plans to increase their productive capacity and believe that
other countries have taken
their market share over the
years. Bringing these countries back within the quota
system will prove to be the
most challenging.
Second, there are countries
like the U.A.E. and Kuwait that
have already embarked on expansion plans, but perhaps
will be more amenable to participate in modest cuts if this
is led by Saudi Arabia. Third,
there are countries like Nigeria and Libya that have been
suffering from output disruptions, but now they are seeing
some recovery in their output
and they are demanding special treatment.
Outside OPEC, the signals
from Russia about cooperating
on an output freeze or cuts
have been conflicting so far,
and in the past Russia didn't
abide by its output agreements with OPEC. Without
collective effort, Saudi Arabia
won't act on its own, and
without Saudi Arabia being on
board, there is no chance for a
meaningful OPEC agreement.
Modest prospects
WSJ: Do these tensions mean
that any deal isn't likely to be
meaningful?
MR. BORDOFF: Even if the
strongest version of the Algiers
agreement were actually implemented, the price support
would be meaningful but still
modest relative to the magnitude of the price collapse.
There seems to be no prospect
of much deeper cuts that would
be needed to return prices to
their previous levels.
OPECs ability to truly stabilize the market, as it did in the
1980s with deep Saudi production cuts, is further constrained
by the emergence of short-cycle U.S. shale-oil supply.
The sort of intervention being contemplated in Algiers is
quite different from longstanding public perceptions of
OPEC as a market stabilizer or
cartel. OPEC has shown it can
react in modest ways to mar-
OPEC
Rest of world
40
30
20
oline demand is slightly over

500,000 barrels a year, compared with 9 million in the
U.S. and 3 million in China. Vehicle penetration rates are in
the low teens, compared with
75% to 80% in North America
and 30% in Brazil.
MR. FATTOUH: If climate-change
policies result in lower future
oil demand, OPEC options are
more limited. OPEC for instance can decide to cut output
and increase the oil price and
try to capture larger share of
oil rent while it can. High oil
prices, however, increase the
pace of demand reduction, induce government to accelerate
their policies, and would encourage supply growth in other
parts of the world.
OPEC could accelerate its investment pace and increase its
output to put downward pressure on the oil price to induce
a rebound in global demand
and drive out high-cost producers. But such a strategy has a
limited impact in terms of increasing OPEC revenues; the
increase in oil demand or market share won't compensate for
the lower oil price, and hence
OPEC oil revenues will fall in
such a scenario. Given the limited effectiveness of such investment-and-output policy options, OPEC members recognize
that diversifying their economies and income sources is the
only long-term viable option.
Climate change
WSJ: To what degree do you
10
0
2006
2007
2008
*Figures are for rst half of 2016.
2009
2010
2011
2012
2013
Saudis and Iran

WSJ: The consensus on reduc-
ing output couldnt have happened without Saudi Arabia

softening its opposition to any
deal that didnt include Iran.
What led the kingdom to shift
on this issue?
MS. CROFT: The fact the Saudis
essentially gave so much
ground in Algiersbasically
putting no limits on Iranian
outputis a pretty remarkable
volte-face and in our view
speaks to changing internal
dynamics in the kingdom.
However, I think the fact that
Iran is essentially back to presanctions levels and may not
be able to put many more barrels on the market also accounts for this newfound pragmatism in Saudi oil policy.
MR. FATTOUH: Saudi Arabia is
highly reliant on oil revenues,
and lower oil prices have had
an adverse impact on its economy despite its relatively
strong fiscal buffers. Low oil
prices are forcing the government to tighten the economy
at a quicker pace than perhaps
originally anticipated, and
there is recognition that although low oil prices have
been conducive to kick-start
reforms, a persistent low-oilprice environment will make
these reforms more difficult
politically and socially. Higher
oil prices, say toward the $60
level, will give the Saudi government some breathing space.
MR BORDOFF: I would note
comments Minister Khalid alFalih just made in London,
warning that the dramatic cuts
in oil and gas investment due to
the price collapse will lead to
an underinvestment cycle that
could cause prices to spike
sharply in the next few years.
While Saudi Arabia may not
want very low oil prices, it also
recognizes very high $100-plus
oil prices can curb demand, including by accelerating the shift
away from oil toward electric
vehicles and other alternatives.
2015
2016*
Source: Energy Information Administration
ket emergencies, not act as a

true swing supplieras the
Texas Railroad Commission
did after World War II or
OPEC did in its earlier years.
MS. CROFT: I see this as a very
modest interventionputting in
a floor for prices and firming
the case for $50. This is a barebones recovery that provides
only a modicum of relief for the
most cash-strapped sovereign
producers, such as Venezuela,
Iraq and Nigeria. But since these
countries don't drive the OPEC
bus, they will have to make do
with the price that the powerful
players see as optimal for now.
2014
global demand will likely remain steady rather than spectacular or slow. We remain
much more concerned with
peak demand over the coming
years rather than peak-supply
fears of last decade.
The push to reduce global
greenhouse-gas emissions provides an additional headwind
for demand growth, especially
in the developed world. However, what OPEC is hanging its

hopes on is emerging-markets
demand, especially India.
Emerging markets have singlehandedly carried global oil demand growth since the recession. India has been the real
bright spot and will be the primary driver of demand growth
for years to come. Indian gas-
think climate-change regulation, or the specter of it, is

pushing OPEC members to diversify their economies?
MR. BORDOFF: Even if OPEC
leaders don't believe the world
is getting off oil anytime soon,
they recognize the greater possibility that demand for oil
could begin declining far sooner
than expected in response to
climate policy, technological innovations like electric vehicles,
and structural economic shifts
in places like China.
Ms. Cherney is The Wall
Street Journals global
energy editor. Email her at
elena.cherney@wsj.com.
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Peak demand
WSJ: Many analysts are pre-
dicting
that
oil-demand
growth will peak and then decline. What impact would that
have on OPEC?
MS. CROFT: Going forward,
www.ebook3000.com
2016 Liberty Mutual Insurance. Insurance underwritten by

Liberty Mutual Insurance Co., Boston, MA, or its affiliates or subsidiaries.

THE EXPERTS
Insights on Climate Change and Carbon Pricing

Few Will Pay for Climate-Change Fight
The Experts are an

online group of industry and thought
leaders who blog
about topical issues
in their fields of
expertise. Edited
excerpts follow. For
more, go to
WSJ.com/Experts.
A wide range of polls point to a clear and

growing trend: Americans of all political stripes
are increasingly worried about climate change.
But what are Americans actually willing to
pay to do something about it?
This is what researchers from the Energy
Policy Institute at the University of Chicago and
the Associated Press-NORC Center for Public
Affairs Research at the University of Chicago
set out to better understand. Their nationally
representative poll found that 43% of Americans were unwilling to pay an additional $1 a
month in their electricity bill to combat climate
changeand a large majority were unwilling to
pay $10 per month. Thats despite the fact that
77% said they think climate change is happening and 65% think it is a problem the government should do something about. Support
plummets as the amount of the fee increases.
This is an upside-down result. The best available science tells us that Americans should be
willing to pay considerably more, because the
damages from climate change are so greatincluding to them personally. If we use the federal governments estimate of the combined social cost of carbon pollution and apply it to the
typical U.S. households electricity consumption
on todays national grid mix, the average household faces damages of almost $20 per month.
Yet just 29% of respondents said they would be
willing to pay at least that much.
The reality may be that while most Americans see climate change as a collective threat,
they dont see it as a threat to them personally.
This suggests that despite the massive flooding,
long droughts and extreme weather that scientists have linked to a changing climate, many
Americans are still not associating their personal damages from these events with climate
change. This is potentially bad news for climate
policy. After all, if 43% of Americans are unwilling to pay even $1 to solve a $20 problem, the
policy landscape is likely to be challenging.
Sam Ori, executive director, Energy Policy
Institute at the University of Chicago
i
Carbon Price Alone Isnt the Answer

Carbon pricing is trending. The year has seen
a notable uptick of buzz about the virtues of a
carbon tax to ease our climate-change woes.
The constant refrain: By putting a price on pollution to reflect its costs, government can ensure markets will efficiently adjust and naturally limit emissions. And yet there is a
problem here. To the extent that pricing carbon
has emerged as the ideal of climate policy, it
has also been idealized in ways that may be diverting attention from other needed actions.
A ton of evidence suggests that no enacted
carbon price will make a big enough dent by itself in U.S. emissions to resolve the emissions
problem. MIT scholars Jesse Jenkins and Valerie
Karplus have shown that the binding constraints of politics keep legislated carbon prices
low. They document that only a few of the
worlds 22 jurisdictions with carbon taxes have
pegged them anywhere near the true social cost
of carbon at which point climate damages are
fully priced in. In short, carbon-pricing enthusiasts may be overexcited about the power of
prices to ameliorate the nations carbon problem.
Carbon prices should be treated as just one
useful tool among many. Indeed, there is another
side of the carbon-price equation that no one
should forget: the enormous flows of revenue
that will result from even a modest carbon tax.
Those revenue yields are critical to carbon
pricing. Not only can the revenue help ameliorate the ugly politics of imposing a new tax by
offsetting some of the burdens a tax would
place on consumers, producers and communities, but the money also would be available to
support further efforts to reduce greenhousegas emissions and ameliorate climate change.
My favorite use of, say, $30 billion a year of
any future U.S. carbon tax revenue: clean-energy R&D and technology development.
Mark Muro, senior fellow, Brookings
Institution
i
Three Things States Should Do Now

Despite the absence of federal regulatory certainty, the power sector is moving inexorably
toward reduced carbon emissions. But how do
electricity planners, who work on 20- to 40year time horizons, engage in long-term planning in the middle of an energy revolution?
How can we chart a path forward that simultaneously reduces our carbon footprint and provides market certainty for power producers?
There are three actions every state should be
taking right now to provide market certainty in
a carbon-constrained future.
First, states have the opportunity to align
their renewable-energy policies in a way that
fully captures federal wind and solar tax credits
to save their citizens millions of dollars. In
some cases, this could mean extending renewable-energy portfolio standards that have expired, or will expire, before 2022.
Second, energy efficiency is the lowest-cost resource across the board, yet only 29 states have
an efficiency standard for electric and gas utilities. Among the states that do, many could nearly
double the savings they are already achieving.
Third, as a former governor, I suspect every
state would prefer to design and implement
their own emissions policy over having one designed for them by the federal government.
States can establish emissions standards that

chart their own course to a low-carbon future
one that takes advantage of their individual
technology challenges and opportunities.
States that act quickly will not only reduce
their energy portfolio risk, they will save their
ratepayers a lot of money.
Bill Ritter Jr., former governor of Colorado,
director of the Center for the New Energy
Economy at Colorado State University
i
How China Wastes Its Renewable Energy

Last year, China submitted its plan for bringing down carbon emissions as part of the U.N.
process to address global climate change. Its plan
calls for peaking carbon emissions by 2030 or
sooner; lowering the overall carbon intensity of
Chinas GDP; and increasing low-carbon energy
sources to about 20% of the total energy mix.
Key to achieving these goals is Chinas plan
to dramatically scale up renewable energy from
wind, solar, geothermal and other low- or nocarbon sources. China is already the largest renewable-energy investor in the world, contributing about $102 billion, or 36% of total global
investment, to these projects in 2015. (By comparison, the U.S. invested about $44 billion in
the same period.) China is not just putting up
the money, its putting up the projects, with
over 45 gigawatts of new solar and wind capacity developed in 2015.
But China is also the leader in the percentage
of that energy that never reaches consumers.
Chinas wasted, or curtailed, wind energy averages about 21% nationally, reaching as high as
40% in some provinces.
Why is China wasting so much of its renewable energy? A few years ago, the answer may
have focused on ghost projectsbig wind and
solar farms with no connections to the grid.
Those connectivity problems still exist. But in
fact a bigger problem today is renewable power
that is physically connected to the grid, but not
transmitted to meet actual energy demand.
This is part of a larger power-sector-management issue in China. In particular, China faces
issues in three important grid-management areas: power-sector planning, market design and
energy pricing. As a result, although renewable
power plants are built, the power they generate
is often wasted because it cannot be transmitted to demand centers, cannot be used at the
right time, or is perceived to be too expensive.
Chinese leadership must build a power system that is smarter, more flexible and less
prone to prioritizing cheap coal over lower-carbon energy sources. Otherwise, Chinas promise
to the world may never become reality.
Kate Gordon, vice chair, and Anders Hove,
associate research director, Paulson Institute
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