Wall Street Journal số ra ngày 27/2/2014

Wall Street Journal số ra ngày 27/2/2014

VOL XXXII NO 20 THURSDAY, FEBRUARY 27, 2014

ar-Less than five years later,the Frenchman faces accusa-tions his company has losthundreds of thousands of dol-lars for customers of his bit-

coin exchange, Mt Gox,

where all transactions havebeen halted and users remainunable to access their money

Mr Karpelès describeshimself on his LinkedIn pro-file as primarily “a technicalgeek.” His profile cites “a longexperience in company cre-ation,” but the snowballingpopularity of bitcoin and the

resulting growth in Mt Gox’scustomer base appear to haveraised challenges that weremore than the company, un-der the 28-year-old from asuburb of Dijon, in easternFrance, could handle

On Wednesday, a day after

Mt Gox shut down, dealingthe most severe blow yet tothe bitcoin world, Mr

Karpelès issued a terse ment on the exchange’s web-site “I am still in Japan, andworking very hard with thesupport of different parties tofind a solution to our recentissues,” the statement said

state-Those who have followed

Mr Karpelès’s rise and fallclose up describe him as soft-spoken and mild-mannered—

“geeky but kind,” as one

per-son who knows him put it

They also say he is a talentedsoftware developer

Computers have indeedbeen part of Mr Karpelès’slife since he was very young,according to a 2007 Frenchdocumentary His comments

in the film together with acharting of his online pres-ence—he has blogged underthe handle “Magical Tux” andposted on Facebook, LinkedInand Twitter—paint a portrait

 Japanese regulators will examine bitcoin 26

LinkedIn CEO Jeff Weiner wants to build a global bazaar for finding work, recruiting talent and sector news

Interview 20

PBOC is steering the yuan lower to gain more trading flexibility

Credit Suisse Group AG

Chief Executive Brady Dougantold lawmakers the bank “re-grets very deeply” havingaided American tax evasion,but said the misconduct wasmostly limited to a smallgroup of employees at Swit-zerland’s second-largest bank

In an often tense hearing,

Mr Dougan faced repeatedquestioning from Sen CarlLevin (D., Mich.), chairman ofthe U.S Senate’s PermanentSubcommittee on Investiga-tions, on the scope of thebank’s activities to recruit U.S

customers and why the bankappears to be relying on Swisssecrecy laws to avoid sharinginformation about those ac-counts with U.S authorities

Mr Dougan, a normally served American, mostlymaintained a calm demeanorduring the hearing despite of-ten brusque queries from Mr

re-Levin At one point the CEOstopped short and blinked insurprise after being cut off by

the subcommittee chairman

“You’re not cooperatingwith us, hiding behind a [banksecrecy] law which applies inSwitzerland, but whichdoesn't apply here, and yetyou want to do business here,”

Mr Levin said

Mr Dougan said Credit isse is limited by those Swisslaws from providing data—in-cluding client names—to theU.S Justice Department TheJustice Department has beeninvestigating the bank, whichmay agree to a significant set-tlement this year, since 2011.The CEO added the bank’spast help to U.S clients seek-ing to hide assets was mostlyprovided by a core group ofbetween 10 and 15 bankersthat “went to great lengths todisguise their bad conduct.”The testimony came a dayafter the subcommittee saidthe Swiss bank, second in sizeonly to UBS AG in terms of as-sets, aggressively sought to

Su-Please turn to page 24

B Y J OHN L ETZING

A ND A LAN Z IBEL

RussiaFlexesasUkraineRegroups

MOSCOW—President mir Putin ordered surprisemilitary exercises for 150,000troops in Russia, includingsome based about 300 kilo-meters from Ukraine, where

Vladi-the ouster of Vladi-the presidenthas left a political vacuum

The test of combat ness applies to ground, air de-fense and tank units as well

readi-as Russia’s Northern and tic fleets It is among the larg-est such exercises the country

Bal-has undertaken in recentyears, and comes amid risingdispleasure in Moscow withdevelopments in Ukraine

Also on Wednesday, test leaders named a “govern-ment of national unity,” to re-place the ousted Russia-

pro-backed President ViktorYanukovych, whose where-abouts remains unknown

Since pro-Western ers in Ukraine overthrew Mr

protest-Yanukovych last weekend,Russia has recalled its ambas-

Please turn to page 7

HCM

Human Capital Recruiting Talent

CRM

Sales Service Marketing

HEARD ON THE STREET

Email: heard@wsj.com FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard

ChinaCars FindBalm

InFrench Partner

Coming to the aid of adowntrodden French carcompany today will helpChina’s No 2 auto maker pre-pare for an uncertain tomor-

row

Investors watched

ner-vously as Dongfeng Motor

spent $1.1 billion for a 14%

stake in PSA Peugeot

Cit-roën, matching an

invest-ment by the French state

Dongfeng’s Hong Kong-listedshares have fallen 6% sinceofficial news of the deal last

week

But in exchange for thecash, Dongfeng has actuallyextracted key benefits, espe-cially cooperation with themore experienced French carmaker on research and devel-opment Dongfeng, whichruns a joint venture with Peu-geot in China, now can accesstechnology such as an inno-vative drivetrain that usescompressed air to save on

on the technology developed

by its main joint-venture

partners Peugeot, Nissan,

Honda and, soon, Renault.

This strategy has workedbecause rules restrict foreigncar makers from owningmore than 50% of ventures inChina, giving locals leverage

to share profits without vesting big on technology and

in-design

Yet this regulation maynot last A Chinese commerceministry official said last yearthat reviewing the 50% ruleshould be on policy makers’

agenda, meaning the localsand their products could have

to compete head-to-head withthe foreign makers at somepoint Dongfeng has justbought itself insurance

against this

Meanwhile, with $4 billion

in cash on its balance sheet

as of last June earning sly interest, making a bet onPeugeot seems worth the risk

many expect

What at first blush seemslike a risky French adventuremay just turn out to be a

profitable affair

—Abheek Bhattacharya

U.K May Lift Rates First

It isn’t a race, and there

are no prizes for winning But

the Bank of England looks like

it will be first out of the

blocks among its major global

peers in raising interest rates

On the face of it, that

might be surprising, The U.K

has been a laggard in the

re-covery from the global

finan-cial crisis Even now, the level

of gross domestic product is

1.4% below its 2008 peak in

real terms But the economy

finally appears to have

bounced back decisively in

2013, and shows few signs of

flagging

For the BOE’s peers, the

picture is more nuanced The

U.S Federal Reserve is still

extricating itself from its

bond-purchase program Far

from tightening policy, it is

still supplying stimulus, albeit

at lower levels The Bank of

Japan is engaged in a

her-culean effort to boost

infla-tion And the European

Cen-tral Bank may yet be forced to

loosen policy, although its

main strategy appears to be

simply to buy time for

disin-flationary pressures to abate

True, the BOE has been

ag-gressive in efforts to push

back against expectations of

rising rates Policy makershave been keen to emphasizethat they don’t want to takeany chances with a recoverythat could falter without solid

foundations

But the latest crop of U.K

GDP data, which provide moreinformation on the sources ofdemand, should help putsome fears to rest Both nettrade and investment madepositive contributions togrowth of 0.7% in the fourthquarter In particular, busi-ness investment—for so longthe missing piece of the puz-

zle—rose 2.4% on the quarterand 8.5% on the year Revi-sions to previous figures showthat business investment hasbeen rising for four consecu-tive quarters, BNP Paribasnotes, an outcome thatchimes much better with sur-veys of business activity and

confidence

The net trade contribution,however, was less impressive,due to a fall in imports ratherthan burgeoning exports TheU.K continues to run a largetrade deficit Still, if this pic-ture can be continued, it

points to a more sustainablegrowth picture

Survey data such as thepurchasing managers’ indexeshave suggested a strong start

to 2014, although poorweather may yet hurt first-quarter growth And the grad-ual recovery in Europe mayhelp boost the U.K furthergiven that the euro zone issuch an important trade part-

sumes

True, inflation is quiescent

at present But the risk is thatholding rates low for too longcauses capital to be misallo-cated and stokes furtherproblems in the housing mar-ket An emergency setting formonetary policy is increas-ingly looking at odds with the

state of the U.K economy

—Richard Barley

Look Out for Mobile-Deal Strings

Consolidation among phone operators remains theplat du jour in Europe TheContinent’s antitrust watch-dog is expected to rule onproposed takeovers in Ger-many and Ireland this spring;

cell-other markets such as Italylook ripe for deals But elimi-nating a competitor may notalways have the desired effect

of more stable prices

Regulators face a toughbalancing act On the onehand, taking out a competitor

so prices can rise should helpoperators justify much-needed investment; Europebadly trails the U.S and Asia

in its rollout of tion wireless networks Butregulators also have a duty toensure operators don’t growmerely at the expense ofhigher prices and lesser-qual-ity services for consumers

fourth-genera-For investors in Europeanwireless operators, thatmakes the key uncertaintywhat kind of remedies regula-tors might impose to permit

more deals

So far, the test case is tria Hutchison 3G Austriabought Orange Austria in De-cember 2012, reducing thenumber of mobile operators

Aus-in the country from four tothree One remedy was to re-serve spectrum for a new en-trant But the price of wire-less services in Austria is thelowest in Europe, whichmeant the offer didn’t garnerany interest Prices have sincestarted to rise after increases

kicked in in October

Germany could prove ferent The European regula-tor is expected to approve

takeover of E-Plus, bringingtogether the two smallestGerman operators by sub-

scribers In theory, remediescould be lighter because Ger-many already has a low con-centration of mobile-operatorbrands: Mobile operators andother service providers that

don’t own their own wirelessnetworks, so-called virtualnetwork operators, have a20% share of the Germanmarket, the highest in Europe,

notes Citigroup

But if Germany is forced toseek a new entrant, therecould be takers Germany isEurope’s biggest market bymobile subscriptions and data

prices are high T-Mobile

Austria charges €17 ($23.37)

while T-Mobile Germany

charges €96 for the same type

of smartphone plan, according

to a report last May from sultants Rewheel Like Aus-tria, Germany also might de-mand that an acquirer offerbetter access terms for virtualoperators So far, these ha-ven’t taken off in Austria But

con-in Germany, if access termsare set low enough and areopen to all virtual operators,the potential for price cuts is

high, says Citigroup

The European telecom tor has seen valuation multi-ples increase by more than25% over the past year onhopes that consolidation willbring gains The sector now isvalued at 5.7 times forecast

sec-2014 earnings before interest,taxes, depreciation and amor-

tization

Telefĩnica Deutschland willsee the benefit of large costsavings But if remedies im-posed by regulators work tokeep prices down, investorsmight not reap the same gains

elsewhere —Renée Schultes

Call Waiting

German mobile-operatormarket share by subscribers

The Wall Street Journal Source: Citigroup

*As of June 2013

Telefĩnica Deutschland/E-Plus

T-MobileVodafone

E-PlusTelefĩnica Deutschland

Federal Deposit InsuranceCorp.’s latest quarterly bank-

ing profile Wednesday

Banks began 2013 ing unrealized gains of morethan $35 billion on these se-curities Taper talk from the

show-Federal Reserve, whichpushed long-term bond

yields higher, eroded thosegains to just $907 million by

the end of the third quarter

The banks ended the fourthquarter showing unrealized

losses of $8.1 billion

While the reappearance

of this particular ghost ofthe financial crisis isn’t ex-

actly welcome, it shouldn’tstrike horror in investors

This time, the unrealizedlosses are driven by rising

interest rates rather thancredit impairment and fears

of default As the bondsheld in the portfolios ma-

ture, the losses will reverse

Some losses do rundeeper than others

OVERHEARD

TheCaseAgainst

PaloAlto’sStock

The outcomes of

patent-in-fringement lawsuits are

noto-riously difficult to predict

But for investors in Palo Alto

Networks, they could be even

costlier to ignore

How much they are

ignor-ing it is a good question The

company’s share price jumped

nearly 23% over roughly a

two-week period, between

some favorable pretrial

deci-sions in a case brought by

ri-val Juniper Networks and

the start of the trial this

Mon-day The stock got another

4.3% lift that day after Palo

Alto posted its fiscal

second-quarter results, which

in-cluded a 46% jump in revenue

from the same period last

year and an upbeat outlook

This particular case has a

twist in that it involves the

co-founder of Palo Alto, who

is listed as an inventor on

several of the patents at issue

in the case Nir Zuk was the

chief technology officer at

NetScreen Technologies until

it was acquired by Juniper in

2004 for about $4 billion He

stayed with Juniper for about

a year before leaving the

com-pany to get Palo Alto up and

running

Juniper claims Mr Zuk

in-corporated its technology into

Palo Alto’s products, which

Palo Alto denies Palo Alto

also hit back with its own

pat-ent-infringement suit againstJuniper last year In the trialthat began Monday, Juniper isseeking an injunction on theproducts in question PaloAlto said in its quarterly filingthis week that it doesn't be-

lieve a loss is “probable.”

But there is a range ofpossible outcomes to the casethat are short of a “loss” thatmay not be fully factored intoPalo Alto’s generous valua-

tech-$573 million for the currentfiscal year, against a marketcapitalization of almost 10

times that

Walter Pritchard of group has a $49 price target

Citi-on Palo Alto based in part Citi-on

a projected 2% royalty ratestemming from the case; thatprice target is more than 30%

below Palo Alto’s currentmarket value

Trading at about 135 timesforward earnings, Palo Alto’sshares already are baking instrong business growth withfew hazards on the roadahead Court cases, though,have a certain knack for cre-

ating surprise potholes

—Dan Gallagher

There and Back

U.K quarterly GDP, cumulativechange from 2008 peak

The Wall Street Journal Source: Office for National Statistics

0

–8–6–4–2

might take to permit more consolidation.

PAGE TWO

BEIJING—China’s central bankengineered the recent decline inthe country’s currency to shakeout speculators as it prepares toallow a wider trading range forthe tightly tethered yuan,according to people familiar withthe central bank’s thinking

In the past week, the People’sBank of China has been guidingthe yuan lower against the dollar

It has done so by setting a weakerbenchmark against which theyuan can trade It has alsointervened in the currency market

by directing state-owned Chinesebanks to buy dollars, according totraders

The moves brought the yuan,also known as the renminbi, to itsweakest level in seven months andrepresent a reversal of thepractice for most of last year,when the central bank keptpushing the yuan higher againstthe dollar, even as the currencies

in other emerging-marketcountries tumbled Money hasbeen pouring into China—

sometimes, analysts have said, bycircumventing currency controls—

to take advantage of theseemingly unstoppable rise

By guiding the yuan weaker,the PBOC intends to thwart short-term speculators betting on acontinued rise and to introducegreater two-way volatility into itstrading “The PBOC is testing themarket as it prepares to widen theyuan’s trading band,” said one ofthe people familiar with thebank’s thinking

While it is a short-term move,making the yuan behave more like

a market-driven currency fits into

a broader plan to restructure theeconomy so that it is lessdependent on investment andexports

Though increasingly important

in international trade, the yuanisn’t freely convertible Thecentral bank sets the value,permitting the yuan to fluctuatewithin a controlled range againstthe dollar Currently, the PBOCallows investors to push theyuan’s value 1% in either directionfrom that set rate in daily trading

Many analysts and economistsexpect the central bank to expandthat range this year by allowingthe currency to move up or down

by 2% daily The last time theband was widened was in April

2012, when it was increased to 1%

The PBOC decided to tampdown expectations for one-wayappreciation in the yuan and curbspeculative trading during a two-day currency-policy meeting thatended Feb 18, the people said

At the meeting, a deputy

governor, Hu Xiaolian, called forgreater efforts to prevent risksfrom cross-border capital flowsand joined other officials inexpressing concern about “hotmoney” inflows, according to aPBOC statement issued after themeeting The PBOC also decided

to expand the yuan’s trading bandthis year in an “orderly” manner,the statement said, as it movestoward making the yuan a freercurrency On Feb 19, the day afterthe meeting, the yuan started itsrecent slide, falling to the lowestlevel in almost two months

The yuan ended at 6.1248 perdollar on Wednesday in mainlandtrading, barely changed from theclosing of 6.1266 Tuesday Thecurrency has fallen 1.2% againstthe dollar since the beginning ofthis year, a dramatic move for acurrency that often barely budgesand that gained 2.9% in 2013

The slide added to jittersamong investors already anxiousabout a slowing Chinese economyand touched off concerns about aselloff of yuan in offshoremarkets Chinese officials sought

to calm nerves Wednesday

“The movement in renminbi isdue to an adjustment of tradingstrategy by main marketparticipants,” China’s foreign-exchange regulator said in thegovernment’s first comments,published on the regulator’swebsite

“The yuan fluctuations arenormal compared to volatility indeveloped and emerging marketcurrencies,” the regulator said

“Don’t read too much into them.”

Following the comments, the yuanreversed course and strengthenedslightly

PBOC officials have said in thepast that the yuan is nearing itsfair-market value, or “equilibriumlevel,” meaning the chances of anydrastic movements in the

currency are limited

Widening the trading rangewon’t eliminate the PBOC’s grip

on the currency, because thecentral bank will still maintain thedaily reference rate for the yuan

Nonetheless, the potential changewould be an important steptoward establishing a market-based exchange-rate system, inwhich the yuan would move upand down just like any othermajor currency The exchange-ratereform is part of China’s plan tooverhaul its financial sector,elevate the country’s status in theinternational monetary system

and someday, according to someChinese officials, rival the U.S

dollar as the de facto globalcurrency

A freer yuan may also helpChina deflect foreign complaintsabout its currency policies TheU.S and others have pressedBeijing for years to relax its hold

on the yuan, allowing it to rise invalue and boost Chinese consumerdemand

China has long resisted callsfor a free float, preferring agradual approach out of concernthat drastic measures woulddestabilize its capital markets orhurt the country’s powerful exportmarket

A move to widen the yuan’strading range would come asChina’s juggernaut economicmachine is slowing down, leading

to questions of whether leadersmight try to stimulate growth andhelp struggling companies

The yuan “has appreciated allthese years and probably won’t gotoo much higher from now on,”

said Du Hanbing, who runs abusiness in the southern city ofShenzhen that makes embossingmachines and sells them in theU.S and Canada “I’m moreconcerned about foreign demandand my customers’ ability to pay

Source: Thomson Reuters Eikon The Wall Street Journal

Note: Inverted scale

to show the weakness

Jan

’142013

Daily high

Tradingband

Daily highand lowrepresentdollarstrength

Daily low

Business & Finance

n Airbus Group NV,

embold-ened by strong financial results

and an order backlog, is

turn-ing its back on its longtime

Eu-ropean backers and will rely

less on government support 17

n The popularity of “The Lego

Movie” may be coming at just

the right time for the Danish

toy maker, as the company is

expected to report an abrupt

slowdown in its U.S business

for 2013 17

n Anheuser-Busch InBev is

taking its cost-cutting knife to

Grupo Modelo SAB, the

Mexi-can brewer it acquired control

of last year 19

n Westfield Group, one of the

world’s biggest owners of

shopping malls, said it may list

in the U.S or London after a

planned breakup of its global

mall empire 19

n Citigroup Inc., which owes

its survival to the U.S

govern-ment, has spent the years since

the 2008 financial crisis

qui-etly building an army of

veter-ans in top Washington jobs 25

n China and global companies

are taking new steps to fulfill

the country’s ambitions for

electric cars, as it remains well

behind its target to roll out

low-emission vehicles 23

n Singapore is pulling out all

the stops to build its own

ver-sion of Silicon Valley as it

at-tempts to create a startup hub

for Southeast Asia 22

World-Wide

n Rome’s strained finances

are forcing the city to confrontunpalatable choices—such ascutting public services or rais-ing taxes—to gain time as itsearches for ways to close a

yawning budget gap 4

n Syrian government forces

ambushed and killed dozens ofrebels in a Damascus suburb,saying the rebels were part of

a new offensive to squeeze the

capital 10

n Hezbollah vowed to retaliate

for an Israeli airstrike that hitone of its bases near Lebanon’s

frontier with Syria 10

n Germany’s constitutional

court struck down a 3%

threshold for political parties

to be elected to the European

Parliament 4

n Administration lawyers

have presented the WhiteHouse with options for restruc-turing the NSA’s phone-surveil-lance program, from ditchingthe controversial collection al-together to running it through

the telephone companies 8

n U.S authorities are

investi-gating the flow of funds fromGabon to the U.S to determinewhether any assets are trace-able to public corruption in the

central African country 9

n The former editor in chief

of Ming Pao, a prominent HongKong newspaper, was stabbedand has been hospitalized, po-

lice said 11

What’s News—

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Beijing Smog Alarm

Coverage with a slideshow at WSJ.com/China

OFF THE WALL

Try Plowing Through Six-Month Winters

Airports in much of the

world get occasional snow,and North America hastaken a beating this season But inNordic countries, where winter canlast six months and airplane deic-ing starts in August, skill at oper-ating through sleet, snow andfrost is vital for business and is apoint of pride

Stockholm’s Arlanda Airportsets a goal of never succumbing towinter “That’s also the sport ofit,” says Arlanda operations headLena Rökaas

Her team spends months ducting off-season drills But whenher squad’s big day came in De-cember, the Swedish manager wor-ried she and her colleagueswouldn’t be able to handle whatwas coming at them

con-Undaunted, her crew headedout in tight formation as if “get-ting ready for battle,” Ms Rökaassays They plowed relentlesslyahead and protected a perfect 50-year record: Arlanda stayed opendespite getting

socked by morethan a third of ameter of snow

Swedish crewswax nostalgicabout a 1968 bliz-zard when Arlandawas the only West-ern European air-port operating andarriving planes parked on one ofits two runways “It’s a lovelystory,” says Arlanda spokeswomanSusanne Rundström

Nordics call it “snowhow,” amix of massive machines, finelyhoned plowing patterns and con-stant practice

“We consider ourselves almostworld champions,” says Heini No-ronen-Juhola, vice president foraviation and safety at Helsinki-Vantaa Airport Helsinki has devel-oped more than 20 clearing rou-tines, each linked to specificweather conditions Ms Noronen-Juhola considers the playbook “ourbig secret.”

As at other Nordic airports,Helsinki’s 120 maintenance peoplespend summers choreographingequipment They usually clean tar-macs with diagonal rows of vehi-cles, sometimes referred to as aconga line Each machine shovessnow to the vehicle behind it andultimately off the edge of the run-way Drivers follow their maneu-vers precisely so air controllers,who also know the routines, cantime arriving and departing flightsdown to the minute

“It’s like dancing,” says Ms ronen-Juhola

No-In winter, her crews work

round-the-clock shifts, like fighters, and hustle at the firstsight of snow Helsinki airport lastclosed in 2003, for 30 minutes, be-cause of snow and air-traffic-con-trol problems Like other Nordicairports, it frequently cuts capac-ity and cancels some flights

fire-Another Nordic secret: pushingproducers for absurdly powerfulequipment Oslo Airport runs two

of the world’s largest pelled snowblowers, built by Nor-wegian airport-equipment makerØveraasen AS Only two other ofthe TV2000 units operate at air-ports; they, too, are in Norway

self-pro-The 2,000-horsepower chines can shoot 10,000 tons ofsnow an hour more than 45 metersfrom the tarmac “It’s like throw-ing a car every second,” says Hen-ning Bråtebæk, operations director

ma-at Oslo Airport

Helsinki Airport pushed Finnishsnow specialist Vammas in the1990s to develop some of the firstmachines able to plow, sweep andblow snow simultaneously Several

of these machines can clear a

run-way in about 10minutes, a job that

a generation agotook half an hour

Back then, way clearing re-quired many differ-ent machines

run-Opening scenes ofthe 1970 disasterfilm “Airport”

show assorted tractor-size vehiclestackling a blizzard, including somethat spit fire to melt ice

Today, all-in-one cleaners areabout as long as a locomotive

Most have two mighty engines,one for motion and the other tosweep and blow They can run forhours without stopping—and Nor-dics keep going

“They don’t go for breaks—

there’s big pride in that,” says Ms

Rökaas in Stockholm of her ers, who mainly use Swiss snowequipment from Aebi SchmidtHolding AG “Someone goes outand gives them coffee.”

driv-The machines can run for solong that producers have to worryabout drivers’ comfort Vammasboasts that its cabs are so cozy,with their heated seats, frost-resis-tant windows, stereo speakers andvibration-free suspension, that op-erators are comfortable in T-shirts

Over the past decade, tion machines have caught on atairports across Canada and theU.S After a crippling winter storm

combina-in 2011, frequently sweltercombina-ing las-Fort Worth Airport bought 10Vammas machines for about $1million each Vammas was ac-quired by Fortbrand Services Inc

Dal-of Plainview, N.Y., in 2010 It

manu-factures Vammas machines in land and in the U.S

Fin-“They look very cool,” says port spokesman David Magaña

air-When snow was forecast in cember, the airport prepared tounleash its yellow monsters Un-fortunately, what arrived was sleetthat landed and froze, creating “ahockey rink from here to Tennes-see,” says Mr Magaña With snow-plows offering little help againstice, nearly 90% of flights were can-celed for a day

De-Still, versatile Nordic machineshave been so popular that otherbig vehicle makers have jumped in

American truck maker Oshkosh

Corp., based in wintry Wisconsin,touts its new multifunction ma-chine as “a rolling 81,000-poundSwiss Army Knife.” Product man-

ager Les Crook boasts that its stick control, covered in buttonsfor each function, “is just like aGame Boy.”

joy-Not to be outdone, Øveraasenlast year unveiled a new productline with the curvy lines of asports car and cabs that rise like acherry-picker to give driversgreater visibility “The futuristicdesign is a real eye-catcher,” says

an Øveraasen brochure Bård Eker,whose industrial-design firm Øver-aasen hired for the new line, sayshis company refrained from mak-ing the look too futuristic for fear

of scaring off customers

While big equipment helps getthe job done, veterans say qualitysnow time is critical Oslo Airport,for example, gets hit on average

60 days each winter “We get a lot

of practice,” says Mr Bråtebæk.But this year, as the U.S has ex-perienced a Nordic winter, North-ern Europe has been unusuallywarm That worries Ms Rökaas inStockholm “The worst thing forthese people is when there is nosnow,” she says of drivers, whoshe fears might get bored andquit

As for the future, officials arecounting on snow and dreaming

up new ways to prepare

“We would love to have a roof

on the airport,” says Ms Juhola in Helsinki “It’s a greatidea.”

NEWS NATO Ministers Warn Afghans on Exit

BRUSSELS—A meeting of allieddefense ministers opened Wednes-day with a renewed warning to Af-ghanistan that the North AtlanticTreaty Organization would with-draw its forces by the end of theyear without a signed securityagreement, along with a promise tohelp Ukraine pursue democraticoverhauls

NATO Secretary-General AndersFogh Rasmussen said the alliance isready to establish a training mission

to advise the Afghan security forcesafter the end of 2014, but said with-

out a legal framework to protecttroops, international forces wouldleave

Afghan President Hamid Karzaihas so far declined to sign a bilat-eral security agreement with theU.S Such an accord is a prerequisitefor NATO to agree on a status-of-forces pact with the alliance thatwould offer legal protections to in-ternational troops serving in Af-ghanistan

“Our preferred option is to stay,with a training mission to advise,assist, train the Afghan forces,” Mr

Rasmussen said “If we don’t get thelegal framework we will have to

withdraw everything.”

Mr Rasmussen’s remarks, andhis frustration, echoed the messagefrom President Barack Obama andother U.S officials on Tuesday

U.S officials said they wouldseek to conclude the security agree-ment with Mr Karzai’s successorand meanwhile step up planning for

a possible withdrawal from thecountry

“Time is of the essence,” Mr

Rasmussen said “It appears Mr

Karzai isn’t ready to sign the rity agreement.”

secu-Mr Rasmussen said NATO wouldcontinue its negotiations with the

next Afghan president Afghan tions are scheduled for April, al-though a runoff could mean the vot-ing results aren’t settled for monthsmore

elec-NATO ministers are also set todiscuss the situation in Ukraine,where street protests drove the pro-Russian government from power

Ukrainian officials are due to tend the summit and discuss the se-curity situation

at-“Ukraine is a close and standing partner to NATO AndNATO is a sincere friend of Ukraine

long-We stand ready to continue ing Ukraine in its democratic re-

assist-forms,” Mr Rasmussen said

He said restarting membershiptalks would be up to Ukraine, butsignaled that the alliance was in nohurry to expand further “I thinkthere are more urgent priorities toaddress right now,” he added.NATO has discussed membershipfor Ukraine, but hasn’t invited it tobecome a member, amid reserva-tions among some allies FormerPresident Viktor Yanukovych said in

2010, soon after he took office, thatUkraine wouldn’t pursue NATOmembership

The defense ministerial meeting

is scheduled to last two days

B Y J ULIAN E . B ARNES

S o l d e x c l u s i v e l y i n L o u i s V u i t t o n s t o r e s a n d o n l o u i s v u i t t o n c o m

D o w n l o a d t h e L o u i s V u i t t o n p a s s a p p t o r e v e a l e x c l u s i v e c o n t e n t

HEARD ON THE FIELD SPORTS

Cricket’s Big Three Hog the Crease

ICC Restructuring Gives Leading Nations Even More Say Over Running of Game

The restructuring approved at

the International Cricket Council

board meeting in Singapore on Feb

8 made it abundantly clear who is in

charge of world cricket: the England

and Wales Cricket Board, Cricket

Australia and the Board of Control

for Cricket in India

The plan, which is almost certain

to be rubber-stamped at a full board

meeting in June, hands over

wide-reaching powers to two

subcommit-tees, the Executive Committee and

the Financial and Commercial

Af-fairs Committee, which include

rep-resentatives of the Big Three

Each one will also feature two

other representatives from the

re-maining seven national associations,

and their decisions still have to be

ratified by the main ICC board But

two, of course, is not enough to vote

down three; while the chances of the

main board stamping on measures

proposed by the Big Three are

un-likely—particularly given that BCCI

President N Srinivasan just became

ICC chairman

The Pakistan Cricket Board and

Sri Lanka Cricket, traditionally two

of the BCCI’s closer allies, were the

only boards to abstain in Singapore,

while previously skeptical boards

in-cluding Cricket South Africa and the

Bangladesh Cricket Board were won

over with concessions

As well as the altered committee

structure, the proposed World Test

Championship involving the top four

teams has been ditched and replaced

with a reprieved Champions Trophy

The idea of two-tier Test cricket hasalso been shelved, with a route cre-ated for associate nations to poten-tially become Test-playing nations

on a promotion and relegation basis

And last to be thrown on the scrapheap is the Future Tours Program—

which was bound to happen onceboards started ignoring it—replacedwith legally binding bilateral series

agreements

The new rules also give the BigThree a larger slice of the game’sglobal revenues On the face of it,that sounds fair enough: they, inparticular India, are the game’s mostlucrative markets, contributing its

big-spending audiences

Getting the power to decide most everything about the gamebased on any financial metric, how-ever, isn’t fair enough at all Ofcourse money will tend to equalpower, but this implies that a team

al-or nation’s contribution to a spal-ort issolely about how much revenue itgenerates It’s a reductive definition

of sport that misses the whole point

of the enterprise, and risks reducingcricket to just another commodity

The intangibles with a sport likecricket are bigger and more impor-tant than with almost any otherproduct, but ruthless and single-minded pursuit of short-term finan-cial gain could accidentally stranglethe goose that lays the golden egg

Top-level international cricketdoesn’t have many teams, but it hasshrewdly maximized its resources byforcing those teams to all play each

other, based on the FTP, keeping thesmaller nations competitive with adecent share of the financial spoilsand making for more rewarding in-ternational competition Now, thebig, rich teams would be free to just

play each other all the time

The Big Three claim—and otherboards such as the West IndiesCricket Board have supported theirview—that the new proposals willbenefit everyone financially, reason-ing that everyone’s slice of the piegrows if the pie itself keeps growing

at the rate it has thanks to rights deals

media-This presupposes that the recentspike in cricket’s popularity, fed al-

most entirely by India, will continue

But while benefiting financiallymight be great for a cricket board,it’s not much use to the fans if itcomes, as it currently sometimesdoes for certain boards, at the cost

of its best players actually playingfor the country Potentially shorn ofplayers, games and revenue, theyrisk withering away, at which pointthe already small number of teamsplaying at the highest level will be

reduced even further

Only a couple of things are tain in all this One is that for theimmediate future, the Big Three, and

cer-in particular India, will contcer-inue toget richer In growing their power,which is in fact a formalization ofsomething that’s been happening for

a while, they have secured their ownshort-term financial bounty Whathappens in the longer term, andwhat happens to the other boards,

remains to be seen

The other is that cricket has putitself decidedly on the wrong side ofhistory where governance is con-

cerned

Two years ago, a report by mer Lord Chief Justice of Englandand Wales Lord Woolf, commis-sioned by the ICC, proposed moving

for-in entirely the opposite direction,toward best-practice modern stan-dards of corporate governance andtransparency With its new struc-ture, described by Woolf as “a reallyalarming position for the future ofcricket,” the ICC has decided to gothe other way, thereby creating an

uncertain future for itself

B Y R ICHARD L ORD

Bangladesh’s Anamul Haque watches India captain Virat Kohli bowl in Wednesday’s Asia Cup match in Fatullah Kohli scored a century as India won by six wickets.

Leading From the Rear:

South Korea’s Other Title

After a respectable 14 podiumappearances in Vancouver’s 2010Winter Olympics, South Korea’s

outlook was bright going into the

2014 Games The Koreans weren’table to live up to expectations,

earning only eight medals in Sochi,but they were the best in the

world in one unfortunate category:

finishing last

For the third consecutive pics, The Wall Street Journal

Olym-awarded lead, tin and zinc medals

to the three worst performers tocomplete a given event (based on

time or score of last-place finishers

in every Olympic event; no fications or nonfinishers were

disquali-counted) South Korean Olympiansfinished in the bottom three places

in an astounding 19 differentevents, more often than any other

The 84-year-old Bannister will

be patron of the May 24 eventthat will see 30 races finishing in

front of Buckingham Palace

The winner of the senior men’srace will be awarded the new Sir

Roger Bannister trophy, and therewill be runs for children, families,

seniors and wheelchair athletes

“The mile has a wonderful metry as a race, neither too short

sym-nor too long,” Bannister said onWednesday “And I’m looking for-

ward very much to being involvedwith this event.”

In an achievement that stands

as one of the seminal moments intrack history, Bannister covered

four laps on a cinder track in 3minutes, 59.4 seconds on May 6,

1954, in the English city of Oxford

At the time, many thought the featwas an impossible one

—Associated Press

HEARD ON THE PITCH

EUROPE NEWS

Rome’s Woes Hand Renzi First Setback

Snag to Central Government Transfer Leaves Eternal City Teetering on Bankruptcy; Cuts to Jobs, Services Loom

ROME—The Eternal City, now

teetering on the brink of a

Detroit-style bankruptcy, has served Italy’s

new prime minister his first major

political headache

On the first day of his

premier-ship, Matteo Renzi had to withdraw

a decree, promulgated by his

prede-cessor, that would have helped the

city of Rome fill an €816 million

($1.17 billion) budget gap, after

fili-bustering by opposition lawmakers

in the Parliament on Wednesday

signaled the bill had little likelihood

of passing

As a result, Rome’s city fathers

must now face unpalatable

choices—such as cutting public

services, raising taxes or delaying

payments to suppliers—to gain time

as they search for ways to close a

yawning budget gap If it fails, the

city could be placed under an

ad-ministrator tasked with selling off

city assets, such as its utilities

“It’s time to stop the accounting

tricks and declare Rome’s default,”

said Guido Guidesi, a

parliamentar-ian from the Northern League,

which opposed the measure

Rome’s mayor, Ignazio Marino, a

U.S.-trained transplant surgeon,

rode to electoral victory last year on

promises to vanquish nepotism,

im-prove basic services and bolster

tourism in the city center with

ini-tiatives such as keeping the Imperial

Forum illuminated and open all

night Instead, he has been battling

to hold together the budget On

Wednesday, he signaled he had no

intention of presiding over deep

cuts, while the head of the city

council warned of the broader

im-pact of Rome’s financial troubles

“A default of Italy’s capital city

would trigger a chain reaction that

could sweep across the national

economy,” said Mirko Coratti, head

of Rome’s city council said on

Wednesday

The heart of the mayor’s planhas been an appeal for a €485 mil-lion transfer from the central gov-ernment to compensate Rome forthe extra costs it incurs in its role

as a major tourist destination, thenation’s capital and the seat of theVatican

“Rome is unique compared withother cities” and deserves state sup-port because of huge numbers ofvisitors who use services but don’tcontribute much to the economy,

Mr Marino said in a recent view

inter-But even before the government

of Enrico Letta fell this month, theproposed transfer had promptedcomplaints that the aid was unfair,given the dire straits of other cities

Rome has long struggled to ance its books Because of its dearth

bal-of industry, the city depends heavily

on trash-collection levies and thesale of bus and subway tickets Itstruggles much more than other Eu-ropean cities to collect either one

About one in four passengers onRome’s public transit system doesn’tbuy tickets, costing around €100million in lost revenue annually,compared with just 2% of passen-gers on London’s public transit net-work

Meanwhile, employee ism at Rome’s public-transit andtrash-collection agencies runs ashigh as 19%, far above the nationalaverage

absentee-Just six years ago, some €12 lion in city debts was transferred to

bil-a specibil-al fund subsidized bil-and gubil-ar-anteed by the national government

guar-in a move aimed at givguar-ing Rome a

fresh start But Italy’s economy hasshrunk by almost 10% since then,eroding the tax base just as nationalausterity programs pushed extracosts onto local governments

Even before the withdrawal ofthe “Save Rome” decree, Mr Marinowas facing unpalatable choices Hehas already raised cremation andcemetery fees and plans to central-ize city procurement, which he sayswill save €300 million a year

Now, without the transfer fromthe central government, he may beforced to impose income and prop-erty tax surcharge—already amongthe highest in the country—and tocut salaries to the city’s 20,000 em-ployees or trim city services such aschild-care centers or job-trainingprograms

The political fallout could be

se-vere The mayor of Taranto, a east city that defaulted on millions

south-in debt south-in 2006, has suffered some

of the lowest poll ratings in thecountry after cutting back services

Mr Renzi, who was the mayor ofFlorence until becoming prime min-ister, is expected to promulgate anew decree for Rome soon, but theterms are unclear The new primeminister has said he intends to givelocal administrations more budgetleeway

Draconian measures could alsoexacerbate Rome’s historic struggles

to cope with its growth and to ance the needs of its historic citycenter—which hosts around 10 mil-lion tourists a year—with a poorlyserved periphery Rome’s populationhas grown tenfold since themid-19th century Few tourists seethe city’s sprawling outskirts, butthey are home to more than 80% ofRome’s 2.6 million residents

bal-Nearly 400,000 people live yond the capital’s busy ring road,most of them unserved by publictransit and forced to drive to work

be-Rome has 978 cars per every 1,000city residents, more than twice therate of Paris and almost three timesthat of London Recent heavy rainscaused large-scale damage, exposingthe need for major maintenance ofthe city’s road network

If basic services aren’t improved,

“people will just leave…and Romeends up like Venice,” which todayhas a small and aging city popula-tion, says Francesco Rosso, a geolo-gist who for 20 years has suffered athree-hour commute into the center

Tourism is an important source

of revenue but no panacea Rome’sshare of tourism is only half thelevel of Florence’s per capita, ac-cording to Pierluigi Testa, head of acivic advocacy group And confer-ence tourism—a lucrative niche—

has grown only 12% in Rome since

2000, compared with 52% globally,

court struck down a 3% threshold for

political parties to be elected to the

European Parliament, a ruling that

could pave the way for more fringe,

single-issue and extremist parties to

win seats in a May vote

The court found Germany’s law

requiring that parties win at least 3%

of the vote to the European Union’s

legislative body violates the

consti-tution, saying it harms voters and

parties Although Wednesday’s

rul-ing applies only in Germany, it could

have a tangible impact on the

assem-bly because the country, the bloc’s

most populous, fills 13% of the

Euro-pean Parliament’s seats It adds to

other factors that analysts say could

challenge the dominance of large,

mainstream parties in the body

Pollsters are already predicting

more success in parliamentary

elec-tions for marginal parties across

Eu-rope In many countries that share

the euro, voters have grown angry

at established parties and European

institutions after four years of

pain-ful economic crises This is less true

in Germany, where the economy has

remained strong

Yet the ruling will make it easier

for small German parties that are

hostile to the EU, such as the native for Germany, or AfD, and sev-eral neo-Nazi parties, to win seats

Alter-The ruling comes despite the EUurging members to set thresholds of

up to 5%, a move meant to keepfringe parties from slowing debate

A fractured European Parliamentcould find it difficult to generatemajorities and reach compromiseswith other EU institutions Thiscould cripple the already slow andcomplex European legislative pro-cess and potentially discredit Eu-rope’s only directly elected assembly

“This is a catastrophic decision,”

said Manfred Güllner, head of many’s Forsa polling group “Without

Ger-a threshold, democrGer-acy does not work

We saw that in the Weimar Republic

And we see that today at the man] municipal level, where thresh-olds have been largely abolished.”

[Ger-Assemblies elected via pure portional representation, Mr Güllnersaid, “get captured by malcontentswho don’t do any work and use theirmandates as public platforms It’s adictatorship of minorities.”

pro-Germany has been extremely cerned about checking the power ofextremists since the end of the Naziera There is still a 5% hurdle for na-tional legislative elections, set up inthe postwar constitution to prevent

con-parties such as those on the far-rightfrom getting a hold on national poli-tics But the new ruling said this de-nied some voters equal rights

“Every eligible voter’s vote musthave the same value and the samelegitimate chance of success,” An-dreas Vosskuhle, president of theKarlsruhe-based ConstitutionalCourt, said as he delivered Wednes-day’s decision “It can’t be assumed

by implication that the flexiblebuilding of majorities practiced un-

til now would be notably hindered

by the election of new ians from smaller parties.”

parliamentar-Nineteen small parties, includingthe Pirate Party and far-right NPD,and more than a thousand citizensfiled suit after the Bundestag, thelower house of the German parlia-ment, introduced the 3% hurdle in

2013 That followed the Karlsruhecourt’s rejection of an earlier 5% hur-dle for European elections in 2011

Wednesday’s ruling poses a

chal-lenge for conservative ChancellorAngela Merkel’s government—a so-called grand coalition of the largestcenter-left and center-right parties

Although opinion polls suggest thetwo parties will get a higher propor-tion of the votes than at the last Eu-ropean elections in 2009, they couldend up with fewer seats Partiesthat scored below the threshold rep-resented more than 10% of the totalvote in the most recent election

Given the rise of the AfD, theconservatives are “fishing on thefringes of the right [wing],” saidGero Neugebauer, a political scien-tist at Berlin’s Free University “Thelarge [parties] can only lose, andthe smaller ones can try to win.”

The Social Democrats’ mentary floor leader, Thomas Op-permann, said his center-left party

parlia-“wants to do everything so that treme and right-wing German par-ties have no place in the new Euro-pean Parliament.”

ex-The European Parliament passed

a resolution in late 2012 ing member states to establish mini-mum thresholds to “effectively safe-guard the functionality ofparliament.” Fourteen of 28 memberstates have some kind of threshold

encourag-—Gabriele Steinhauser contributed to this article.

Open to All

Germany’s 2009 European Parliament election results

German parties no longer have to poll above a threshold to enter the European Parliament, giving fringe parties that fell short of the 5%

threshold in 2009 the chance to win seats.

The Wall Street Journal Source: European Parliament

Christian DemocratsSocial DemocratsGreensFree DemocratsLeft

Below the 5% vote threshold

(no seats in Parliament)

Free VotersRepublicansAnimal Protection PartyPirates

The GreyOthers

PERSONAL JOURNAL

Help! I’m on a Conference Call:

How to Get Things Done

Rambling, Multitasking or Zoning Out Are Among Abuses in Ritual of Office Life

The conference call is one ofthe most familiar rituals of officelife—and one of the most hated

Abuses are rife People on theline interrupt others, zone out or

multitask, forgetting

to hit “mute” whiletalking to kids orslurping drinks

Sales executive Erica Pearcehas seen teleconferences inter-rupted by home FedEx deliveries,crying children and the sound of aco-worker vacuuming his house

“Nobody could hear,” she says ofthe cleaning As leader of themeeting, she said into the phone,

“If you’re vacuuming, I appreciatethat, and you’re welcome to come

to my house afterward But youneed to be on mute.”

Another conference call endedwhen a participant put his line onhold, starting a stream of elevatormusic, says Ms Pearce of Scotts-

dale, Ariz., a global account tive for a software company Con-ference-call complaints are sowidespread that a recent comedyvideo showing how ridiculous con-ference-call behavior such as se-cretly playing solitaire would look

execu-“in real life” has drawn more thansix million views

But conference calls aren’t ing anywhere; they are too usefulfor businesses dealing with far-flung workplaces, flexible sched-ules and a clampdown on business-travel expenses Time spent inaudio conferences in the U.S is ex-pected to grow 9.6% a year through

go-2017, according to Wainhouse search, a Boston market-researchfirm; about 65% of all conferencing

Re-is still done by audio calls

There are ways to fix the lems For instance, meeting lead-ers must set firmer ground rulesthan they do for face-to-face meet-ings and tighter, more explicitagendas Leaders also have to

prob-work harder to get participantstalking, both by asking more ques-tions and by listening more

Many conference calls are splitbetween people in a conferenceroom and others on a muddy-sounding call-in line This oftenmakes remote participants “feellike second-class citizens, like,

‘The cool kids are here,’ ” saysLaura Stack, author of “Execution

Is the Strategy.”

She advises leaders to have allparticipants say their names whenthey speak so remote callers knowwhat’s going on If someone cracks

a joke and the room bursts intolaughter, the leader should “let theothers know who said what andrepeat the joke,” says Ms Stack, aDenver productivity consultantand trainer

One of the biggest problemswith virtual meetings is that it ishard for participants to build rap-port with each other, a hurdlecited by 75% of 3,301 businesspeo-

ple surveyed in 2012 by RW3, aNew York culture and leadershiptraining company The absence ofnonverbal cues such as facial ex-pressions makes many people hes-itant to speak up and makes itharder to pay attention In thesurvey, 71% of participants cited alack of participation by others as aproblem with virtual meetings

To build relationships, Ms

Pearce takes time during the conferences she leads to have par-ticipants who don’t know eachother introduce themselves, ex-plain their roles in the project athand, and tell what they want out

tele-of the meeting, she says

For teleconferences, agendasand goals should be clearer andmore explicit than for face-to-facemeetings “You need to scriptthem more tightly” to keep peo-ple’s attention from wandering,says Daniel Mittleman, an associ-ate professor in computing anddigital media at DePaul University,

The Coach

Manages the flow

of conversation toward a planned goal, noting when the conversation goes off-topic.

The Monopolizer

Thinks through solutions out loud, talking endlessly without regard for other participants.

The Host

Explains the to-face joking or visual displays in the meeting room so that remote participants understand and don’t feel left out.

face-The Lurker

Blindsides other participants by sitting through entire calls without announcing his presence until the end, if at all.

The Interrupter

Fails to adapt to communication delays and repeatedly breaks

in while others are

Meeting leaders should talkless than in face-to-face meetingsand listen more, says Paul Done-hue, president of Paul Charles &Associates, a Londonderry, N.H.,sales-management consulting firm.For a problem-solving teleconfer-ence, for example, a leader mighttalk 40% of the time and listen60%, compared with a 55%-to-45%ratio when meeting face-to-facefor the same purpose, Mr Done-hue says

Leaders should spend as muchtime on preparing questions to askparticipants as on writing theagenda, Mr Donehue says He ad-vises leaders to use a form withspaces to note comments by indi-vidual participants during themeeting This helps leaders listenclosely and hold participants’ at-tention by citing their earlier input.Managing conflicts is harder inteleconferences Not everyone cansense when a silent participant isfrustrated or angry “There’ssometimes a little passive-aggres-siveness in that silence,” Ms Stacksays “Some people just check out,thinking, ‘OK, you dummies, goahead and do that I’m going to sithere on mute.’ ” She suggests pos-ing a question: “ ‘Jane, you’re kind

of quiet What are your thoughts?’You sometimes get an explosion,”but this can get important issuesout in the open, Ms Stack says.Participants can help meetingsrun more smoothly by volunteer-ing to serve as moderator, keepingpeople on-topic and sticking totime limits Divvying up moderat-ing and note-taking duties can freemeeting leaders to participate andkeep people engaged, Ms Stacksays Some managers encourageany participant to moderate,breaking in if a speaker wandersoff-topic and asking that everyonestick to the agenda, says Steven M.Smith, senior consultant in Seattlefor SolutionsIQ, a managementconsulting and training firm.Time-zone differences can irri-tate people who have to rise atmidnight to meet with colleagues

in the U.S., says Michael Schell,chief executive officer of RW3

“It’s important to move the ing times around” to be fair, hesays Also, meetings should startpromptly; taking 10 minutes to getcoffee might seem normal at 9a.m in New York, but it can seemdisrespectful to a colleague inAustralia who got out of bed tojoin the call, Mr Schell says.Videoconferencing can solvesome of the problems The tech-nology is increasingly inexpensiveand easy to use, and a growingnumber of applications, such asVidyo and Blue Jeans Network,can connect users on a variety ofdevices, including webcams, lap-tops, tablets or smartphones, saysDavid Coleman, founder and man-aging director of CollaborativeStrategies Inc., San Mateo, Calif.The technology can createother challenges, though Mr.Smith says participants who aren’ttech-savvy often consume valuablemeeting time getting used to unfa-miliar systems

meet-Videoconferencing also canmake people self-conscious Manypeople avoid video, Ms Stack says,because they don’t want to put onmakeup or change their workoutclothes “I cannot tell you howmany times I’ve heard people say,

‘I don’t know what’s wrong with

my webcam I can’t get it to work,

so I’m just going to be here invoice,’ ” she says

Email sue.shellenbarger@wsj.com.

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Major players & benchmarks

Credit derivatives

Spreads on credit derivatives are one way the market ratescreditworthiness Regions that are treading in rough waters

can see spreads swing toward the maximum—and vice versa

Indexes below are for five-year swaps

Index: series/version in pct pts Mid-price Coupon Maximum Minimum Average

for corporatedebt; based on

Markit iTraxxindexes

In percentage points

3.00 2.00 1.00 0

–1

t Asia ex-Japan IG

t Australia

2013Sept Oct Nov. Dec Jan Feb.2014Index roll

Source: Markit Group

14500

29 6 13 20 27 Dec Jan.3 10 17 24 31Feb.7 14 21

HighClose

Low

50–daymoving average

t

Stoxx Europe 50: Wednesday's best and worst

Previous close, in STOCK PERFORMANCE

Company Country Industry Volume local currency Previous session YTD 52-week

Anheuser-Busch InBev Belgium Brewers 2,300,703 76.34 2.79% -1.2% 9.4%

Telefon L.M Ericsson B Sweden Telecommunications Equipment 7,202,453 84.20 1.32 7.3 5.9

Sanofi SA France Pharmaceuticals 2,429,752 75.36 1.13 -2.3 6.3

GlaxoSmithKline United Kingdom Pharmaceuticals 7,464,453 1,691 0.96 4.9 15.9

Tesco United Kingdom Food Retailers & Wholesalers 36,667,361 326.00 -2.74% -2.5 -10.7

Credit Suisse Group AG Switzerland Banks 8,473,479 27.50 -2.48 0.8 12.2

Schneider Electric France ElectricalComponents&Equipment 1,942,801 64.03 -2.26 1.0 13.7

Deutsche Telekom Germany Mobile Telecommunications 12,006,052 12.38 -2.02 -0.4 51.9

Barclays United Kingdom Banks 45,055,452 253.15 -1.84 -6.9 -14.8

And the rest of Europe's blue chips

Spain (Fixed Line Telecommunications)

Roche Holding Part Cert. 1,416,017 273.00 0.52 9.6 28.8

Italy (Integrated Oil & Gas)

Zurich Insurance Group 473,482 268.50 -0.04 3.9 7.6

Switzerland (Full Line Insurance)

British American Tobacco 2,418,275 3,174 -0.08 -2.0 -7.2

United Kingdom (Tobacco)

Netherlands (Food Products)

Royal Dutch Shell A 2,804,434 2,189 -0.39 1.2 2.4 United Kingdom (Integrated Oil & Gas)

AstraZeneca 1,578,851 4,075 -0.49 14.0 38.3 United Kingdom (Pharmaceuticals)

Lloyds Banking Group PLC 115,459,412 80.83 -0.49 2.5 52.1 United Kingdom (Banks)

Banco Santander S.A. 23,545,457 6.59 -0.53 2.2 22.0 Spain (Banks)

BHP Billiton 5,716,358 1,917 -0.60 2.6 -8.0 United Kingdom (General Mining)

Vodafone Group 95,804,879 245.25 -0.69 0.01 46.4 United Kingdom (Mobile Telecommunications)

BNP Paribas 2,928,662 59.04 -0.77 4.2 41.7 France (Banks)

National Grid 5,337,647 830.00 -0.78 5.3 16.2 United Kingdom (Multiutilities)

Banco Bilbao Vizcaya Argn 13,024,043 9.09 -0.85 1.6 27.7 Spain (Banks)

Reckitt Benckiser Grp 1,120,278 5,005 -0.89 4.4 14.6 United Kingdom (Nondurable Household Products)

Rio Tinto 4,529,912 3,408 -0.92 -0.1 -2.6 United Kingdom (General Mining)

Bayer 1,523,396 100.35 -0.94 -1.6 35.9 Germany (Specialty Chemicals)

Unilever 4,482,585 2,447 -0.97 -1.4 -5.4 United Kingdom (Food Products)

Diageo 4,121,465 1,874 -1.19 -6.3 -4.5 United Kingdom (Distillers & Vintners)

Glencore Xstrata PLC 26,373,971 329.85 -1.24 5.5 -13.9 United Kingdom (General Mining)

ING Groep 8,740,996 10.53 -1.31 4.2 75.2 Netherlands (Life Insurance)

Deutsche Bank 4,844,888 35.06 -1.39 1.1 0.3 Germany (Banks)

AXA 6,894,120 19.08 -1.55 -5.6 45.1 France (Full Line Insurance)

Moet Hennessy Louis Vuitt 961,326 135.15 -1.60 1.9 3.4 France (Clothing & Accessories)

Sources: SIX Financial Information

DJIA component stocks

Stock Symbol in millions Latest Points Percentage

AT&T T 31.5 $32.00 –0.17 –0.54%

AmExpress AXP 3.7 89.68 –0.23 –0.26 Boeing BA 4.1 126.68 –0.10 –0.08 Caterpillar CAT 3.7 97.26 0.85 0.88 Chevron CVX 5.0 115.58 0.61 0.53 CiscoSys CSCO 39.0 21.94 0.10 0.46 CocaCola KO 14.7 37.87 0.10 0.26 Disney DIS 5.2 80.10 –0.11 –0.14 DuPont DD 3.4 65.47 0.55 0.85 ExxonMobil XOM 6.7 95.90 –0.41 –0.43 GenElec GE 26.3 25.31 0.04 0.14 GoldmanSachs GS 3.5 162.53 –0.40 –0.25 HomeDpt HD 8.4 81.69 0.71 0.88 Intel INTC 16.9 24.81 0.19 0.77

JPMorgChas JPM 20.9 56.69 –0.34 –0.60 JohnsJohns JNJ 4.6 90.98 –0.13 –0.14 McDonalds MCD 3.4 95.91 –0.71 –0.73 Merck MRK 7.3 56.24 0.34 0.60 Microsoft MSFT 34.5 37.45 –0.09 –0.24 Nike B NKE 3.2 78.44 0.33 0.42 Pfizer PFE 20.3 31.97 0.07 0.24 ProctGamb PG 6.8 77.86 –0.26 –0.33

TravelersCos TRV 1.7 83.42 0.08 0.10 UnitedTech UTX 2.0 115.94 0.05 0.04 UtdHlthGp UNH 4.3 75.96 0.64 0.85 Verizon VZ 93.4 46.30 0.01 0.02 VISA ClA V 1.8 226.12 –0.99 –0.44 WalMart WMT 7.7 74.89 1.54 2.10

Source: WSJ Market Data Group

Credit-default swaps: European companies

Atitsmostbasic,thepricingofcredit-defaultswapsmeasureshowmuchabuyerhastopaytopurchase-andhow much a seller demands to sell-protection from default on an issuer's debt The snapshot below gives a

sense which way the market was moving yesterday

Showing the biggest improvement

CHANGE, in basis points

Yesterday Yesterday Five-day 28-day

Stora Enso 205 –8 –16 –50

CASINO GUICHARDPERRACHON 113 –4 –5 –5

ATLANTIA 92 –3 –7 –12

And the most deterioration

CHANGE, in basis points

Yesterday Yesterday Five-day 28-day

Landbk Baden Wuertbg 77 2 6 7

Grohe Hldg 60

Source: Markit Group

BLUE CHIPS & BONDS

Below, a look at the Dow Jones Stoxx

50, the biggest and best knowncompanies in Europe, including the U.K

Behind every IPO,follow-on or

convertible equityoffering is one or

more investmentbanks At right,

investment bankshistorical and

year-to-daterevenues from global

equity-capital-market(ECM) deals

Source: Dealogic

75%

6

50 4

25 2

0 0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

n Equity capital markets n Debt capital markets (both in billions, left axis)

ECM as a percentage of total(right axis)

t

UPHEAVAL IN UKRAINE

ProtestsStokeTensioninCrimea

SIMFEROPOL,

Ukraine—Thou-sands of Crimean Tatars descended

Wednesday on Crimea’s parliament

to shout down Russian nationalists,

emerging as a bulwark for Kiev’s

new pro-Europe powers as

separat-ist sentiment in the region grows

Crimea—a Black Sea peninsula

that belonged to Russia until 1954

and remains dominated by ethnic

Russians—has swiftly become the

epicenter of a backlash against the

Kiev protesters who toppled

Presi-dent Viktor Yanukovych As his

op-ponents build a new government,

some of the more radical Russian

lo-cals in Crimea are demanding the

autonomous region secede or once

again become part of Russia

But Crimean Tatars—indigenous

Muslims who account for about 12%

of Crimea’s population of two

mil-lion people—are the exception Their

strained relations with Russia go

back centuries, and many bristle at

the idea of their homeland moving

farther into Moscow’s orbit Many

traveled to Kiev during the

demon-strations to support the pro-Europe

camp In Crimea, they have become

the most powerful local advocates

for recognizing the new powers and

remaining part of Ukraine

“The Crimean Tatars are the key

problem for the Russian

national-ists,” said Ihor Semyvolos, executive

director of the Association of Middle

East Studies in Kiev and an expert

on the region

On Wednesday, Ukraine’s acting

interior minister, Arsen Avakov, said

his main task was to prevent the

outbreak of armed conflict in

Cri-mea He said his instructions to all

police and security personnel in the

region were clear: “Don’t provoke

any sort of conflict or armed

stand-off with civilians at any cost.”

The tension was palpable

Wednesday on the square in

Simfer-opol “Crimea is Ukraine!” thousands

of Tatars shouted while waving

Ta-tar and Ukrainian flags outside theregional legislature, where officialsheld talks on Crimea’s tumult TheTatars raised their voices and whis-tled to drown out an opposingcrowd of Russians waving Crimeanand Russian flags and chanting

“Russia!” and “The fascists won’tcome!”

“Our biggest demand is to not low a split of Ukraine,” said ElmiraBaranova, a 40-year-old Crimean Ta-tar from Fedosiya, who arrived atthe Simferopol rally wrapped in aUkrainian flag Ms Baranova saidthe Tatars wouldn’t “allow Russia tobreak up Ukraine and take away Cri-mea.”

al-Refat Chubarov, the Crimean tar leader, has called for people pro-moting separatism to be prosecutedand has said Crimean Tatars won’ttolerate a breakup of the country

Ta-Still, pro-Russian sentiment inCrimea runs strong, and the rise of

a more nationalist Ukrainian ship after the collapse of Mr Yanuk-ovych’s government last weekendhas alienated some local Russiansand fueled talk of separatism

leader-Violence in Crimea has remainedlimited to a few street scuffles, butthe atmosphere is tense A Russianbusinessman has taken control as defacto mayor of Sevastopol, home tothe Russian fleet, and called the newpowers in Kiev illegitimate Thespeaker of the Crimean parliamentfloated the idea of secession late lastweek, though he has since toneddown his rhetoric and vowed tofight for more autonomy Some eth-nic Russians have signed up to mili-tias in recent days, saying they mustprotect their cities from what theydescribe as bandits who have takenpower in Kiev

Many local Russians express cern about the role Ukrainian na-tionalists from the country’s westplayed in toppling Mr Yanukovych

con-They worry that under the ists’ influence, the new governmentwill pursue policies that drive

national-Ukraine away from Russia and crackdown on the use of the Russian lan-guage A large swath get their newsfrom Russian outlets, some of whichhave focused on such fears

“I don’t want to unite with dits and fascists who will tell mewhat language to speak or where myplace is,” said Elena Sokolova, a 36-year-old computer programmer fromSimferopol, who was chanting “Rus-sia!” from atop a planter at the rally

he won’t take a formal position inthe new government He has urgedCrimeans to disregard what hecalled fear-mongering about a ban

on the Russian language, as well asfalse rumors about the supposed ar-rival of far-right nationalist hood-lums in Crimea

Still, some decisions by the newprovisional powers in Kiev alreadyhave stoked anger in the southernregion, including the disbanding onWednesday of the Berkut, a specialnational antiriot unit that Mr Yanu-kovych’s government ordered ontoKiev’s main square to quell the pro-tests Berkut officers—many im-ported to the capital from Mr Yanu-kovych’s regional strongholds,

including Crimea—have become gets of public wrath across much ofUkraine after their clashes with pro-testers left dozens dead last week

tar-The decision rattled many in mea who have greeted the injuredBerkut returning from Kiev as he-roes Russian activists here say Mr

Cri-Yanukovych sent the forces to Kievwithout proper defenses and sub-jected them to abuse from protest-ers before abandoning and embar-rassing them Thousands turned out

to a funeral last weekend in pol for some of the local riot policewho died in the Kiev clashes Thenew Sevastopol mayor, Alexei Chalyvowed Wednesday to retain the Ber-kut in the Crimean city

Simfero-The presence of the Tatars in mea, though, suggests the regionwouldn’t break off without a strug-gle For centuries, Tatars controlledthe Black Sea peninsula under theCrimean Khanate, a protectorate ofthe Ottoman Empire before Cathe-rine the Great annexed the regionfor Russia in 1783 The Russian Em-pire later fought against the Otto-mans, France and Britain over theterritory in the 1850s Crimean War,

Cri-a conflict fCri-amous in pCri-art for the roleplayed by British nurse FlorenceNightingale

In 1954, Soviet leader NikitaKhrushchev transferred Crimea fromRussia to Ukraine, then both Sovietrepublics The peninsula stayed part

of independent Ukraine after the viet Union’s collapse in 1991, despiteits majority-Russian population

So-Today, many Crimean Tatars stillharbor deep resentment against theKremlin, because of they were de-ported en masse to Central Asia onthe orders of Joseph Stalin out ofparanoia that they would join withthe Nazis and create a fifth column

Mr Semyvolos of the Association

of Middle East Studies in Kiev sayslong-term peace in Crimea depends

on negotiations among local leadersthat take into account the welfare ofthe Tatars

B Y P AUL S ONNE

Ukrainians Rush to Get Out of Local Currency

MOSCOW—Ukrainians are ing local banks with inquiries aboutswitching their funds into safer dol-lars and euros amid a record-break-ing slide in the country’s currency

delug-The Ukrainian arm of the Russian

lender Alfa Bank extended its

work-ing hours Wednesday to help dealwith demand A local branch of Rus-sia’s Sberbank said ordinary Ukraini-ans were concerned about the deval-uation “People in Ukraine do reallyprefer foreign currency depositsthese days,” Sberbank said by email

The dollar Wednesday shot above

10 against the hryvnia for the firsttime, in parallel with a slump in theRussian ruble A Ukrainian centralbank official said it was dropping itsincreasingly ineffective efforts atsupporting the currency

The local banking associationsuggested a temporary limit of

$1,000 per person for daily currency purchases The centralbank said it wasn’t considering lim-its on cash withdrawals, thoughmany banks already limit withdraw-als from their ATMs

foreign-Ukraine is facing a “horrifyingeconomic crisis,” said acting Presi-dent Oleksandr Turchynov Heblamed the previous governmentand corruption for the malaise

Ukraine is reeling from violentprotests and the political vacuumleft after the ouster of President Vik-tor Yanukovych The cratering cur-rency presents further problems

Terms of a bond that Russiabought from the country as part of

an aid deal in December state thatUkraine’s debt pile should not repre-sent more than 60% of its annualeconomic output As the hryvniaslides, dollar-denominated debt be-comes more expensive to repay,ratcheting that ratio higher

Tim Ash, an analyst at StandardBank in London, said that while thedollar traded at around 8.30 againstthe hryvnia, the debt ratio stood at42% “However, at an exchange rate

of 10, this ratio increases to 46% ofGDP,” he said “There may well beother claims on the sovereign outthere, so the danger is that the ratiomay already be above 50%.”

Asked about the threshold, sia’s finance minister Anton Silu-anov said that “if the covenants areviolated, then we enter talks aboutthe execution of our agreement.” Hedidn't elaborate

Rus-The ruble also hit record lows,accelerating its plunge after RussianPresident Vladimir Putin orderedmilitary exercises in a region close

to Ukraine As a more easily tradablecurrency, the ruble was bearingsome strain as a proxy for thehryvnia, analysts said

“All the mess in the ruble islinked to Ukraine,” said PavelDemeshchik, a dealer at ING Bank inMoscow

To be sure, there are signs thatdemand for dollars and euros inUkraine could wane—foreign cur-rency is getting staggeringly expen-sive and it is often difficult to matchbuyers and sellers

“People see the rate and walkaway,” said a cashier at OTP Bankclose to Maidan, Kiev’s centralsquare where the antigovernmentprotest started in late November

Associated Press

A Russian armored personnel carrier on the street this week in Ukraine’s Black Sea port of Sevastopol, which is home to a major Russian naval base.

The presence of Tatars suggests Crimea wouldn’t break away easily.

Major stock market indexes Stock indexes from around the world, grouped by region Shown in local-currency terms

PREVIOUS SESSION PERFORMANCE Region/Country Index Close Net change Percentage change Yr.-to-date 52-wk.

Austria ATX 2676.98 -6.15 -0.23 5.1 11.5 Belgium Bel-20 3055.80 14.09 0.46% 4.5 21.7 Czech Republic PX 1019.77 -9.79 -0.95 3.1 2.7 Denmark OMX Copenhagen 657.12 -5.38 -0.81 16.1 32.6 Finland OMX Helsinki 7522.44 -42.88 -0.57 2.5 22.5 France CAC-40 4396.91 -17.64 -0.40 2.4 21.4 Germany DAX 9661.73 -37.62 -0.39 1.1 27.2 Hungary BUX 17794.88 41.19 0.23 -4.1 -3.7 Ireland ISEQ 5103.62 -47.04 -0.91 12.4 36.7 Italy FTSE MIB 20398.10 -75.07 -0.37 7.5 31.2 Netherlands AEX 398.64 -2.13 -0.53 -0.8 18.9 Norway All-Shares 609.19 0.54 0.09 1.1 17.3 Poland WIG 52983.97 -703.83 -1.31 3.3 15.5 Portugal PSI 20 7254.24 -87.69 -1.19 10.6 20.7 Russia RTSI 1286.07 -20.30 -1.55% -10.9 -16.0

PREVIOUS SESSION PERFORMANCE Region/Country Index Close Net change Percentage change Yr.-to-date 52-wk Spain IBEX 35 10224.30 -18.20 -0.18 3.1 28.1 Sweden OMX Stockholm 442.67 0.39 0.09% 4.5 19.8 Switzerland SMI 8532.99 26.70 0.31 4.0 14.0 Turkey BIST 100 61503.04 -620.8 -1.00 -9.3 -20.7

Australia SPX/ASX 200 5437.00 3.20 0.06 1.6 7.9 China Shanghai Composite 2041.25 7.04 0.35 -3.5 -11.8 Hong Kong Hang Seng 22437.44 120.24 0.54 -3.7 -0.6 India S&P BSE Sensex 20986.99 134.52 0.65 -0.9 9.6 Japan Nikkei Stock Average 14970.97 -80.63 -0.54 -8.1 33.0 Singapore Straits Times 3088.25 -15.37 -0.50 -2.5 -5.3 South Korea Kospi 1970.77 5.91 0.30 -2.0 -1.7

Brazil Bovespa 46603.31 -112.60 -0.24 -9.5 -18.2 Mexico IPC 38675.12 -348.53 -0.89 -9.5 -11.1

Note: Americas index data are as of 3:00 p.m ET Sources: SIX Financial Information; WSJ Market Data Group

Cross rates U.S.-dollar and euro foreign-exchange rates in global trading

USD GBP CHF SEK RUB NOK JPY ILS EUR DKK CDN AUD Australia 1.1160 1.8579 1.2510 0.1712 0.0310 0.1839 0.0109 0.3171 1.5255 0.2044 1.0038

yield ratio MSCI Index Last Daily YTD 52-wk 2.50% 16 MSCI ACWI* 408.34 -0.03% -0.1% 15.0%

2.50 17 World (Developed Markets) 1,669.41 -0.07 0.5 18.8 2.40 17 World ex-EMU 203.02 -0.07 0.2 18.4 2.40 17 World ex-UK 1,679.44 -0.09 0.4 19.3 3.10 16 EAFE 1,938.47 -0.36 1.2 14.9 2.70 11 Emerging Markets (EM) 955.54 0.30 -4.7 -10.6

3.20 18 EMU 202.18 -0.07 2.3 21.5 3.20 18 Europe ex-UK 124.20 0.15 3.2 18.7 4.20 13 Europe Value 117.40 -0.12 3.4 17.5 2.40 21 Europe Growth 109.06 0.15 2.3 15.6 2.30 23 Europe Small Cap 277.19 0.25 6.3 34.8 3.70 6 EM Europe 258.26 -1.48 -6.0 -17.4 3.60 13 UK 2,012.55 -0.53 1.0 8.3 3.30 17 Nordic Countries 212.00 0.52 5.1 16.6

3.00 18 South Africa 1,138.55 -0.37 0.1 13.3 3.00 13 AC ASIA PACIFIC EX-JAPAN 459.04 -0.16 -1.9 -4.0

*Twenty-four developed and 21 emerging markets Source: MSCI

S&P Dow Jones Indices

Price-to-Dividend earnings PERFORMANCE (euros) PERFORMANCE (U.S.dollars)

yield* ratio* S&P Dow Jones Index Last Daily 52-wk Last Daily 52-wk.

6.35%14.98 Global Select Div 251.92 -0.64 13.4

6.71 14.35 Asia/Pacific Select Div 283.18 0.86% -8.2% 331.21 0.37 -4.3

U.S Select Dividend -d 1244.21 0.27 21.7

3.29 29.14 S&P Glb Nat Resources 1993.13 0.01 -6.4 2708.51 -0.39 -2.4

*Fundamentals are based on data in U.S dollar Footnotes: a-in US dollar b-dividends reinvested c-in local currency Note:All data as of 2 p.m.ET Source: S&P Dow Jones Indices

GLOBAL MARKETS LINEUP

WSJ.com >> Follow the markets throughout the day with updated stock quotes, news and commentary at WSJ.com Also, receive email alerts that summarize the day’s trading in Europe and Asia To sign up, go to WSJ.com/email.

Commodities Prices of futures contracts with the most open interest

EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; ICE-US: ICE Futures U.S.MDEX: Bursa Malaysia

Derivatives Berhad; LIFFE: London International Financial Futures Exchange; COMEX: Commodity Exchange; LME: London Metals Exchange;

NYMEX: New York Mercantile Exchange;ICE-EU: ICE Futures Europe *Data as of February 25, 2014

ONE-DAY CHANGE Year Year Commodity Exchange Last price Net Percentage high low

Corn(cents/bu.) CBOT 459.75 -1.50 -0.33% 465.00 414.50

Soybeans(cents/bu.) CBOT 1397.50 10.25 0.74% 1,397.75 1,247.50

Live cattle(cents/lb.) CME 145.150 2.750 1.93 145.300 135.375

Gold($/troy oz.) COMEX 1328.90 -13.80 -1.03 1,345.60 1,203.70

Silver($/troy oz.) COMEX 21.270 -0.731 -3.32 22.215 19.030

Aluminum($/ton)* LME 1,755.00 13.00 0.75 1,813.00 1,686.50

Tin($/ton)* LME 23,150.00 55.00 0.24 23,175.00 21,410.00

Copper($/ton)* LME 7,055.00 -6.50 -0.09 7,422.00 7,051.00

Lead($/ton)* LME 2,132.00 11.00 0.52 2,242.00 2,097.50

Zinc($/ton)* LME 2,045.00 12.00 0.59 2,110.00 1,964.00

Heating oil($/gal.) NYMEX 3.0390 0.0044 0.14 3.0901 2.8758

RBOB gasoline($/gal.) NYMEX 2.9855 0.0139 0.47 3.0394 2.7831

Natural gas($/mmBtu) NYMEX 4.546 -0.145 -3.09 5.2090 3.8580

Brent crude($/bbl.) ICE-EU 109.50 -0.01 -0.01 110.82 104.75

Sources: SIX Financial Information; WSJ Market Data Group

Currencies London close on Feb 26

EUROPE Per euro In euros U.S dollar U.S dollars

1-mo forward 1.0000 1.0000 0.7316 1.3669 3-mos forward 1.0000 1.0000 0.7316 1.3669 6-mos forward 0.9999 1.0001 0.7315 1.3670

Czech Rep koruna-b 27.345 0.0366 20.005 0.0500

Turkey lira 3.0644 0.3263 2.2419 0.4461

U.K pound 0.8211 1.2179 0.6007 1.6647 1-mo forward 0.8213 1.2176 0.6008 1.6643 3-mos forward 0.8216 1.2171 0.6011 1.6636 6-mos forward 0.8222 1.2162 0.6015 1.6624

MIDDLE EAST/AFRICA Bahrain dinar 0.5152 1.9408 0.3769 2.6529

Saudi Arabia riyal 5.1265 0.1951 3.7505 0.2666

South Africa rand 14.8304 0.0674 10.8497 0.0922

United Arab dirham 5.0207 0.1992 3.6731 0.2723

a-floating rate b-financial c-government rate c-commercial rate d-Russian Central Bank rate.

Source: ICAP Plc.

UPHEAVAL IN UKRAINE

Zuma Press

Fatherland party head Arseniy Yatsenyuk was nominated to be prime minister.

Russia Tests Its Troops

sador from Kiev, suspended a $15billion bailout package, and threat-ened to raise natural-gas prices andimpose trade sanctions Russia’sPrime Minister Dmitry Medvedevsaid Monday that the situationposed a threat to Russian interests

in the former Soviet republic

Russia’s Defense Minister SergeiShoigu said that the exercise hadbeen planned months ago and hadnothing to do with the unrest inUkraine—in which more than 80people were killed in clashes withpolice last week Another senior de-fense official told local news agen-cies that the ministry didn’t see theunrest in Ukraine as a reason to de-lay the exercise

But the timing of the show ofstrength is certain to heighten con-cerns over the possibility of militaryintervention in Russian-speaking re-gions of Ukraine, particularly Cri-mea, where the Russian Black SeaFleet is based

U.S Secretary of State JohnKerry said Russia needed to “bevery careful” in its next steps “Weare not looking for confrontation

But we are making it clear that ery country should respect the terri-torial integrity here, the sovereignty

ev-of Ukraine Russia has said it would

do that and we think it’s importantthat Russia keeps its word,” he said

on NBC television

Tense, competing protests tween pro-Russian and pro-Westernresidents erupted on Wednesday inSimferopol, the regional capital,where the local parliament dis-cussed Crimea’s future

be-“What kind of signal does this

on the ground? This is likely only toinflame passions rather than coolthem,” said Eugene Rumer, director

of the Russia program at the ington-based Carnegie Endowmentfor International Peace

Wash-The announcement of the tary exercises sent the ruble to newlows against the euro and Russianexchanges tumbling

mili-The last large-scale, readiness test was held in May andinvolved 160,000 soldiers, tanks andaircraft in Siberia Russia alsostaged a test of 80,000 soldiers inFebruary 2013, as well as severalsmaller drills in the Black Sea and incentral Russia

military-Senior Russian officials in recentdays have said that military inter-vention wasn’t on the table; “Such ascenario is impossible,” ValentinaMatvienko, the head of Russia’s up-per house, said Wednesday

But Andrey Klimov, deputy man of the international affairs com-mittee in Russia’s Parliament, saidRussia had a responsibility to protectits military assets in Ukraine “TheRussian army must be prepared touse our forces to protect its ownbases even if there is just a 1% proba-bility that something might happen

chair-to our people there,” he said

Defense ministers from the NorthAtlantic Treaty Organization, meet-ing in Brussels, offered their supportfor “Ukrainian sovereignty and inde-pendence, territorial integrity, demo-cratic development and the principle

of inviolability of frontiers.”

At a news conference, NATO retary-General Anders Fogh Rasmus-sen didn’t explicitly criticize the mili-

Sec-tary drill, nor did he address theprospect of Ukraine joining NATO—

something Russia opposes But he iterated the allies’ position that Kievshould be able to make its own secu-rity arrangements “Every nation has

re-an inherent right to decide for itselfwhen it comes to alliances and for-eign and security policies,” he said

The newest military tests involveunits in Russia’s Western and Cen-tral military districts

Russia is broken into four largemilitary districts spanning from theFar East to its European borders

The western district is based in St

Petersburg and stretches from sia’s western arctic to its borderwith Ukraine and Belarus The cen-tral district is based in Yekaterin-burg and stretches from Siberia tojust west of the Ural Mountains

Rus-The exercises began Wednesdayand are scheduled to last until Mon-day They will be conducted in twoparts, Mr Shoigu said The first willinvolve spot checks of combat readi-ness The second will involve opera-tional and tactical exercises with the6th Army, based in St Petersburg;

the 20th Army, based in Voronezh,some 300 kilometers from theUkrainian border; and the 2nd Army

in Samara, near the Kazakh border

“The Supreme Commander[Vladimir Putin] has ordered a test

of the ability of our troops to spond in crisis situations thatthreaten the military security of thecountry including terrorist, biologi-cal and man-made threats,” Mr

re-Shoigu said, according to the fax news agency

Inter-—Julian E Barnes contributed to this article.

Pro-Russia protesters shout slogans Wednesday during a small demonstration in Donetsk in the eastern part of Ukraine.

European Union and the U.S Deliberate Over Money for Ukraine

The European Union pledged tomove fast to draw up financial as-sistance for Ukraine but officialssaid privately it could be days—oreven weeks—before the bloc an-nounces an aid package

EU foreign-policy chief CatherineAshton met senior EU colleaguesWednesday afternoon to define thekind of assistance Brussels couldoffer On a visit to Kiev earlier thisweek, she discussed the issue byphone with International MonetaryFund Managing Director Christine

Lagarde, an EU official said

In Washington, Secretary of StateJohn Kerry said the U.S is consideringproviding Ukraine $1 billion in loanguarantees and additional financialsupport through a new IMF bailoutpackage He also pressed Ukraine’snew government to begin institutingeconomic overhauls

Olivier Bailly, a spokesman for theEuropean Commission, said the Euro-peans were working at full speed toget “clearer ideas on the different op-tions as soon as possible.”

EU enlargement chief Stefan Fületold lawmakers the EU had raised ex-pectations in Ukraine and must nowkeep its promises However, a seniorFrench official said Western countriesshould wait until after Ukraine holdspresidential elections in May beforepledging large-scale assistance

In Brussels, officials said they couldwork out by next week the maximumamounts EU institutions could give

But people familiar with the planningsaid no package is imminent

First, the EU wants to see what

economic overhauls and anticorruptionmeasures the new Ukrainian govern-ment commits to Second, the blocwants its contribution to come as part

of a broader, internationally agreedpackage

"We are not shying away from ing a lead role," said one of the offi-cials, but Europe on its own does "nothave the means to do what is neces-sary," the person said

tak-Officials have already spelled outsome of the resources the EU couldgive The EU's executive currently has

€610 million ($834 million) set aside

to help Ukraine deal with financialchallenges—an amount that could rise

to €1 billion this year if the new ernment adopts credible economic poli-cies This type of assistance is usuallytied to an IMF deal, something thatcould take weeks or months to negoti-ate However, a senior EU official said

gov-if the Washington-based lender agreed

to a fast-track bridge loan with Kiev, itcould unlock the EU money

—Laurence Norman and Stacy Meichtry

Civic Activists Nominated For Government ‘of Unity’

KIEV, Ukraine—Protest leaderstapped civic activists for a “govern-ment of national unity,” moving tostave off criticism that veteran poli-ticians were maneuvering to retakepower following last week’s ouster

of Russia-backed President ViktorYanukovych

Candidates for Ukraine’s newgovernment—including the owner of

an auto-repair shop and a ist—on which Parliament will voteThursday, were presented to a mix

journal-of cheers and boos among sands of people at a “national as-sembly” on Kiev’s main square, thecenter of three months of proteststhat saw at least 80 killed

thou-Arseniy Yatsenyuk, a 40-year-oldformer economy minister and leader

of the Fatherland party, was posed as prime minister

pro-His government, if confirmed,will face severe challenges, under-lined Wednesday when the nationalcurrency, the hryvnia, fell to multi-year lows of more than 10 to thedollar Ukraine’s foreign-currencyreserves have dropped to $15 billion,and the interim government has said

it would put together a program ofoverhauls to secure a loan programfrom the International MonetaryFund as quickly as possible

Russia, which backed Mr ovych with a $15 billion bailout offer

Yanuk-in December, has Yanuk-indicated it is likely to hand over any more cash

un-“We need to renew trust in thegovernment The government needs

to return the trust of creditors andinvestors,” Parliamentary Speakerand Acting President OleksandrTurchynov told the crowd

The new government will alsohave to face down anger in pro-Rus-sian regions of the country, includ-ing the southern Crimean peninsula,where hundreds of supporters ofgreater autonomy and closer tieswith Russia clashed with CrimeanTatars, who strongly support an in-

dependent Ukraine

The new government may notlast long Not only does it face hugechallenges, but it also will likely bereformatted after presidential elec-tions in May The president and Par-liament share responsibility fornaming ministers

“Whoever joins the cabinet, itwill be a kamikaze government.They have to deal with such a mess,and take unpopular steps,” said Va-syl Yariv, a business coach who was

on the square

Many posts in the proposed ernment went to activists and civicleaders who have led protests sincelate last year

gov-Demonstrations began after thegovernment shelved a partnershipdeal with the European Union in fa-vor of closer ties with Russia, butswiftly grew into a broader outcryagainst corruption and policeabuses

In a nod to those demands,muckraking journalist Tetyana Chor-novol, who has investigated top pol-iticians, was proposed as head of ananticorruption bureau, with unclearpowers

Dmytro Bulatov, the leader of agroup of car owners who led protestconvoys, was put forward as minis-ter for youth and sport

Mr Bulatov appeared on stageWednesday missing part of his ear,which he says was severed when hewas tortured after being kidnapped

in January by a group of unknownmen

Olha Bohomolets, a doctor whohelped coordinate the medical cen-ter, could become deputy primeminister for humanitarian affairs

“I want to promise you that if inthis government I see corruptschemes, I’ll come onto the Maidanand coordinate the medical centeragain,” she said, referring to theprotest square

—Alexander Kolyandr and Lukas I Alpert contributed to this article.

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FTSE 100 lost 0.5% to6799.15 and France’sCAC 40 fell 0.4% to4396.91 Germany’s DAXslipped 0.4%, to 9661.73, despite arise to 8.5 points in the forward-looking GfK consumer-climate indi-cator for March The result marked

a seven-year high

“Investors may be reluctant tochase share prices higher in theshort-term with indexes approach-ing technically overbought territory

European equities have rallied bymore than 6% in the past threeweeks, regaining all the ground lost

in January,” said Ian Williams, egist at Peel Hunt in London

strat-In the U.S., stocks ended the day

in the black but the S&P 500 treated from record levels for a

re-third-straight session

The Dow Jones Industrial age rose 18.75 points, or 0.1%, to16198.41, while the S&P 500 wasbarely higher at 1845.16 At its ses-sion peak Wednesday, the index rose

Aver-to 1852.73, above its all-time closinghigh of 1848.38 but short of its all-

time intraday high of 1858.71

The Nasdaq Composite Indexrose 4.48 points, or 0.1%, to

4292.06

A report on the U.S housingmarket, showing that new-homesales climbed 9.6% in January, andbetter-than-feared reports fromsome retailers helped supportstocks early in the session, but trad-ing wasn’t broadly bullish, traders

and investors said

Volume was “kind of light,” saidJoseph Greco, managing director oftrading with Meridian Equity Part-ners And while the housing reportwas encouraging, “it’s much more a

tactical trading and stock-pickingmarket.”

The political tensions in Ukrainecontinued to rattle European mar-kets The Ukrainian hryvnia plungedagainst the dollar, while the coun-try’s dollar bonds weakened afterefforts to form a new government

were delayed until Thursday

The hryvnia was quoted ataround 10.40 to the dollar late inEurope, a roughly 2% decline on theday and almost 10% this week Typi-cally the central bank sells dollarswhenever the dollar-hryvnia ratestrays much above 8 The develop-ments in Ukraine weighed on senti-ment in neighboring Russia, wherethe ruble again hit an all-time low

against the euro-dollar basket

The dollar strengthened againstmajor rivals on the back of thehousing report Late Wednesday inNew York, the euro was fetching

$1.3683, down from $1.3745 lateTuesday, while the dollar was trad-

ing at ¥102.42 from ¥102.24

The British pound weakened to

$1.6664 from $1.6681 as the U.K.’sgross domestic product increased0.7% in the last three months of

2013 from the previous quarter,matching the preliminary estimate,according to data from the Office

for National Statistics

U.S Treasury prices wereboosted by a $35 billion sale of five-year notes that drew the highest de-mand in more than a year Thebenchmark 10-year note rose 8/32 in

price to yield 2.675.%

In commodity markets, gold fell

$14.80, or 1.1% to $1,328.20 a troyounce on the Comex division of theNew York Mercantile Exchange,snapping a three-day winningstreak Crude oil climbed 76 cents,

or 0.7%, to $102.59 a barrel onNymex

Gold prices have been marchinghigher since the start of the year, asinvestors focused first on worriesabout slower economic growth inthe U.S and then on signs of trouble

in emerging markets Gold is ered by some as a haven in times of

consid-financial-market stress

B Y C HIARA A LBANESE

MARKET REPORT

Japan Looks at Bitcoin

TOKYO—Japan’s chief

govern-ment spokesman and a member of

the central bank’s policy board said

authorities were looking into the

regulation of bitcoin, a day after

To-kyo-based bitcoin exchange Mt Gox

shut its website and halted trading

Compared with regulators in

many other advanced economies,

Japanese regulators have been

rela-tively silent on bitcoin But

Wednes-day, after Mt Gox’s abrupt closure

underscored the risks of a virtual

currency, several of them started

speaking Wednesday morning,

Ja-pan’s top government spokesman,

Chief Cabinet Secretary Yoshihide

Suga, said the government was

look-ing into the matter, collectlook-ing

infor-mation through the Financial

Serv-ices Agency, the Ministry of Finance

and the police “The government

will take measures if necessary once

we have an assessment of the

situa-tion,” he said

Later Wednesday, Bank of Japan

policy board member Koji Ishida

also addressed the matter, saying, “Ithink the Japanese government willmake a proper assessment” on the

regulation of bitcoin

Mt Gox stopped all transactions

on Tuesday, and its website wentblank The site later came back, car-rying only a message that said thehalt in operations was only “for thetime being in order to protect the

site and our users.”

On Wednesday, Mt Gox’s chiefexecutive officer said in a freshmessage on the site that he remains

in Japan and is working hard to find

a solution to Mt Gox’s recent bles He also asked clients whosefunds have been stuck to refrain

trou-from getting in touch

“I would like to kindly ask thatpeople refrain from asking questions

to our staff: they have been structed not to give any response orinformation Please visit this pagefor further announcements and up-dates,” Mark Karpèles said in the

“aren’t subject to our regulatoryoversight.” In similar comments re-cently, the Bank of Japan said it

“isn’t in a position” to regulate coin exchanges, while the Ministry

bit-of Finance said such supervisionisn’t its job

Contacted again Wednesday, cials at the FSA, Finance Ministryand the Bank of Japan all said theyhadn’t changed their stance on theissue A Tokyo Metropolitan Policespokeswoman said she didn’t haveenough information to comment

offi-Some investors with bitcoins tied

up at Mt Gox had sought guidancefrom authorities about protectionfor customers of the exchange butsay they have received no clear an-

B Y T AKASHI M OCHIZUKI

Meet Mt Gox’s Geek-in-Chief

cuses more broadly on geeks He

said he sometimes didn’t move from

his room for days

“In real life, if I want to talk to

someone on the subway, I’m just a

nobody But when I am on the

Inter-net, I am Magical Tux,” he said in

the film Even now, people in the

bitcoin community refer to him by

that name

On a blog last updated in 2012,

which appeared to have been taken

down by early Thursday in Tokyo, a

person identified as Magical Tux

in-dicated an interest in quantum

physics and writings on the

exis-tence of alternative worlds He

wrote in one posting from March

2010 that he had been up till 5 a.m

reading about theories that “are

giv-ing an extra role to conscious

be-ings, even making them immortal.”

But Mr Karpelès also showed a

domestic side online, posting cat

photos and bragging about his skills

at baking apple pie In 2006, he

up-loaded a how-to video on YouTube,

outlining a more-than-seven-hour

process for pie baking

In the documentary, in part

pro-duced by French broadcaster Canal

Plus, he spoke to the camera in a

messy room, surrounded by comic

books and computers A black

T-shirt he wore said, “There’s no place

like 127.0.0.1.”, referring to the

num-ber used to redirect a computer

connected to the Internet to itself,

or home, in other words

An anime fan, he went to Japan

for a monthlong visit in 2007 Back

in France, he triumphantly

an-nounced on his blog that he had

wowed one Japanese girl with his

iPhone, a product that wasn’t then

on sale in Japan

By 2009, he said he was planning

a move to Tokyo and posted a blog

entry in Japanese “I do

computer-related work (a programmer); my

goal is world domination,” it said

Soon after he arrived in Japan,

Mr Karpelès got interested in

bit-coin “One of my customers

re-quested bitcoin as payment in

2009,” he said in an email interview

with The Wall Street Journal on

Feb 17

Less than half a year after his

ar-rival, he founded Tibanne Co The

name of the company, which would

Continued from first page

come to operate one of the world’spre-eminent bitcoin platforms, wasclose to that of Mr Karpelès’s

white-and-orange cat, Tibane

Mr Karpelès’s Twitter feed cates that in the early days, Mt Goxwas like any other small techstartup The team went out forburgers together, and McDonald’s

indi-deliveries were common

People close to the companycalled the atmosphere of the Mt

Gox offices “free-spirited” and saidthe company’s growth was a sur-

prise

As bitcoin caught on, Mt Gox panded At one point, it handled80% of bitcoin trades At the Mt

ex-Gox offices in Tokyo’s Shibuyaneighborhood, sometimes called

“Bit Valley,” a staff of around 30handled the requests and questions

of customers, which last yearreached one million in number

With the growth came new aches The first whiffs of troublecame in May last year U.S regula-tors said the exchange wasn’t prop-erly registered in the U.S In June,

head-Mt Gox registered there as amoney-services business

People close to Mt Gox say thatthroughout the recent turmoil, Mr

Karpelès was stressed but tried toprotect employees He hasn’t re-sponded to repeated requests byThe Wall Street Journal for com-ment since the Feb 17 email inter-

Some investors have recountedlosses of hundreds of thousands of

Mt Gox.” A flaw in the softwareused by all bitcoin exchanges poten-tially made possible fraudulentwithdrawals Other exchanges ap-pear not to have been harmed bythis, but Mt Gox has had to halt op-

erations

Mr Ver, who helps connect ers in the bitcoin community andhas known people at Mt Gox forseveral years, spoke bluntly, sayingthe bitcoin turmoil “was caused by

play-a single mismplay-anplay-aged compplay-any, not

by any problem with bitcoin itself.”

The entrepreneur, who handlesbusiness development for Block-chain.info, a provider of so-calledbitcoin “wallets,” confirmed his re-marks in the YouTube video to The

Wall Street Journal

As for Magical Tux, his last ter post was on Jan 12 It was a re-sponse to a customer complaintabout web-hosting services pro-vided by Tibanne, the company that

U.S NEWS

Surveillance Revamp Weighed

WASHINGTON—Administration

lawyers have presented the White

House with four options for

restruc-turing the National Security

Agency’s phone-surveillance

pro-gram, from ditching the

controver-sial collection altogether to running

it through the telephone companies,

according to officials familiar with

the discussions

President Barack Obama in

Janu-ary asked U.S intelligence agencies

and the attorney general to report by

March 28 on alternatives for

revamp-ing the program in a way that would

take it out of the NSA’s hands

The Office of Director of National

Intelligence and the Justice

Depart-ment have provided the options

ahead of schedule, these people said

None of the three options for

re-locating the data have gained

uni-versal favor But failure to agree on

one of them would leave only the

option of abolishing the program,

which would be a setback for

intelli-gence agencies and other backers of

the surveillance effort Of the three

options for relocating the data, two

of them—with phone companies or

another government

agency—ap-pear most technically possible

Under the current program, the

NSA collects millions of U.S phone

records from three phone

compa-nies, which former officials have

identified as AT&T Inc., Verizon

Communications Inc and Sprint

Corp

Since the start of revelations

about NSA surveillance last year by

former NSA contractor Edward

Snowden, the phone-records

pro-gram has sparked the most

contro-versy Some lawmakers and

govern-ment officials have defended it as

critical to fighting terrorism, while

others argue it amounts to a massive

violation of constitutional rights

Obama administration officials

have sought to preserve the

collec-tion of phone records in a way that

raises fewer concerns about privacy

One way of doing that wouldhave the phone companies retainthe data, officials said The NSAwould then tell the companies when

it needs searches of call recordsconcerning specific phone numbersthe agency believes are connected toterrorism The companies wouldprovide the results to the NSA

Under this model, the NSA wouldonly collect the data that comes inresponse to the search, rather thanmillions of unrelated Americanphone records

Several lawmakers have posed legislation on Capitol Hill thatwould take this approach But tele-communications companies opposethis option Phone companies likelywould demand liability protectionand possibly other conditions toavoid outside demands for data—forinstance, for run-of-the-mill legalcases such as divorce proceedings

pro-Already, some criminal dants have sought access to the NSArecords, claiming the data couldhelp show their innocence

defen-The phone-company option isalso opposed by the chairman of theHouse intelligence committee, Rep

Mike Rogers (R., Mich.), who toldThe Wall Street Journal this weekthat the proposal doesn’t haveenough support for committee ap-proval and a House floor vote

Phone companies have not yetbeen consulted on options, a telecom-munications-industry official said

A second option presented to theWhite House would have a govern-ment agency other than the NSAhold the data, according to a U.S of-ficial Candidates for this optioncould include the Federal Bureau ofInvestigation, which some currentand former intelligence officialshave recommended

Another possibility floated inpolicy circles was turning the pro-gram over to the custody of the For-eign Intelligence Surveillance Court,which oversees the phone-data andother NSA surveillance programs,but judges have balked at an ex-panded role for the court

A third option would be for an tity outside the phone companies orthe government to hold the data, offi-cials said This approach has beencriticized by privacy groups who saysuch a third party would just become

en-an extension of the NSA en-and wouldprovide no additional privacy benefit

A final alternative would be toscrap the phone-data program andinstead bolster investigative effortsunder current authorities to obtainthe information about possible ter-rorist connections some other way,

an official said Mr Obama edged this approach in his Januaryspeech, but said “more work needs

acknowl-to be done acknowl-to determine exactly howthis system might work.”

Caitlin Hayden, a spokeswomanfor the White House National Secu-rity Council, declined to speak aboutspecific proposals

She said that since the president’sJan 17 speech unveiling surveillance-overhaul measures, the Justice De-partment and intelligence agencieshave worked on developing options

“They have kept us abreast oftheir progress, and we look forward

to reviewing those options,” shesaid “Beyond that, I’m not in a po-sition to discuss the details of anongoing process.”

Mr Obama will consult withCongress and will seek legislation,

as needed, she added

Two of the options echo mendations of the president’s re-view panel, which issued a report inDecember that proposed the NSAphone program be overhauled sothe data be held by either the phonecompanies or a third party

recom-In his January speech, Mr Obamasaid both of those approaches “posedifficult problems.” Retaining the

data at the phone companies, hesaid, “could require companies to al-ter their procedures in ways thatraise new privacy concerns.”

Establishing a third party to holdthe data, he said, could be evenmore difficult “Any third partymaintaining a single consolidateddatabase would be carrying outwhat’s essentially a governmentfunction, but with more expense,more legal ambiguity, potentiallyless accountability, all of whichwould have a doubtful impact on in-creasing public confidence that theirprivacy is being protected,” he said

Separately on Tuesday, the tice Department notified a convictedterror suspect that NSA bulk-datasurveillance had been used againsthim before he pleaded guilty to acharge of attempted material sup-port for terrorism

Jus-The defendant, an Albanian migrant named Agron Hasbajrami,pleaded guilty in federal court inBrooklyn in 2012, after he was ac-cused of sending more than $1,000

im-to someone in Pakistan im-to financeterrorism

Since the revelations about NSAspying, the government has notifiedtwo criminal defendants that theyintended to offer evidence derivedfrom NSA interception of electroniccommunications The Hasbajraminotification marks the first timesuch a notice has been given to adefendant who has already pleadedguilty, officials said

The letter notifying Mr jrami noted that he was still seeking

Hasba-to have his conviction vacated Mr

Hasbajrami’s attorney, Steve Zissou,said he would seek more informa-tion about the surveillance of hisclient

Patrick Toomey, a lawyer at theAmerican Civil Liberties Union, saidthe new filing shows “warrantlesssurveillance has played a role inmore criminal cases than the gov-ernment has ever before admitted,and the government has been im-properly withholding that fact fromdefendants for years.”

President Proposing Upgrades to Roads, Rails

President Barack Obama onWednesday was expected to proposespending $302 billion to repair theU.S.’s roads and transit systems, one

of the few areas where both crats and Republicans agree thegovernment needs to spend moremoney

Demo-Though revamping America’s frastructure has garnered bipartisansupport, Congress for years hasgrappled with how to pay for it OnWednesday, House Ways and MeansCommittee Chairman Dave Camp(R., Mich.) released a plan to over-haul the tax code that included

in-$126.5 billion in spending for ways and other infrastructure

high-Mr Obama wants to pay for hisfour-year plan by, among otherthings, closing tax loopholes andchanging how businesses are taxed,the White House said It is unclear,however, exactly which loopholes

Mr Obama wants to close andwhether they would gain lawmakers’

support

House Speaker John Boehner (R.,Ohio) said he and Mr Obama dis-cussed the country’s infrastructureproblems when they met Tuesday,their first one-on-one meeting inover a year, but didn’t come to anagreement

“We’ve got to find the fundingmechanism to fund our infrastruc-ture needs and so the hunt has beenunder way for the last year and ahalf to find that funding source Iwish I could report to you thatwe’ve found it, but we haven’t,” Mr

Boehner said at a news conferenceWednesday

One idea that has been floated ispaying for the upgrades by raisingfuel taxes The U.S.’s 18.4-cent-a-gal-lon gas tax and 24.4-cent-a-gallondiesel-fuel tax haven’t been raised in

20 years They are a major source offunding for highway repairs

Highway upgrades sometimesare paid for by transferring moneyfrom the Treasury Department’sgeneral fund Mr Boehner said hedoesn’t think Republicans couldsupport that

Another proposal that has beendiscussed, which is supported bySen Rand Paul (R., Ky.), would payfor infrastructure upgrades by mak-ing changes to the tax code to en-courage U.S companies operatinginternationally to bring money keptoverseas back home

The president also is expected toannounce the start of a $600 millioncompetition for grants aimed atroads, ports and transit systems

Mr Obama’s plans are aimed atputting Americans back to work Hewill tell Congress that if it doesn’tfind money to support the HighwayTrust Fund, 700,000 jobs will be put

at risk The Highway Trust Fund issupported by the gas tax and otherrevenue and could have difficultymeeting all of its obligation in thesecond half of this fiscal year, thenonpartisan Congressional BudgetOffice said Wednesday

Infrastructure projects have longbeen on Mr Obama’s list of priori-ties Recently, Vice President Joe Bi-den traveled to ports in Illinois,Texas and the Panama Canal tohighlight their importance

—Kristina Peterson contributed to this article.

European Pressphoto Agency

One recommendation for phone surveillance at the National Security Agency, whose Maryland headquarters are shown above, would be to end the program.

None of the three options for relocating data have gained universal favor.

For information about listing your funds, please contact: Lauren Berkemeyer tel: +44 20 7572 2102; email: lauren.berkemeyer@dowjones.com

Data as shown is for information purposes only No offer is being made by Morningstar, Ltd or this publication Funds shown aren’t registered with the U.S Securities and Exchange Commission and aren’t available for sale to United States citizens and/or residents except as noted Prices are in local currencies All performance figures are calculated using the most recent prices available 12-month and 2-year returns may be calculated over 11- and 23-month periods pending receipt and publication of the last month end price.

NAV —%RETURN—

FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CRNAV NAV YTD 12-MO 2-YR—%RETURN— FUND NAME GF AT LB DATE CRNAV NAV YTD 12-MO 2-YR—%RETURN— FUND NAME GF AT LB DATE CRNAV NAV YTD 12-MO 2-YR—%RETURN—

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n ARIX ABSOLUTE RETURN INVESTABLE INDEX

Feri Institutional Advisors, www.feri.de

ARIX Composite Gross USD OT OT GBR 01/31.00 USD1603.72 0.1 5.8 6.1

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Citi Alumni Are a Force in Washington

WASHINGTON—While many otherbanks have faded from view in Wash-

ington’s power circles, Citigroup Inc.

is becoming more prominent

Several alumni of the bank, whichwas bailed out by U.S taxpayers dur-ing the financial crisis, hold top jobs

in government and at the Federal serve—a sign that Citigroup’s reputa-tion is on the mend after the lowstouched during the 2008 turmoil Butsome lawmakers and advocacygroups are raising concerns thatCiti’s newfound favor with govern-ment gives it inordinate sway withinthe Obama administration TheWhite House declined to comment

Re-At least five former Citigroup ficials now hold top jobs in Wash-ington, including Treasury SecretaryJacob Lew, U.S Trade Representa-tive Michael Froman and the Trea-sury’s Nathan Sheets, who is await-ing confirmation as undersecretaryfor international affairs

of-Stanley Fischer, who was ously a vice chairman at Citigroup,was nominated in February to be theFederal Reserve’s next vice chairman,while Marisa Lago is now Treasury’sassistant secretary for internationalmarkets and development

previ-Some, like Peter Orszag, former

director of the Office of ment and Budget, have gone fromgovernment posts to Citigroup

Manage-The ascension of Citigroup cials to top government jobs marks

offi-a significoffi-ant turnoffi-about for the boffi-ank,which saw its reputation tarnished

in the wake of a $45 billion ment rescue during the financial cri-sis in 2008 The bank has spent theyears since the crisis trying to re-build its image by installing a newchief executive, fully repaying itsgovernment funds and hiring dozens

govern-of Washington lobbyists

For some, Citigroup is replacing

Goldman Sachs Group Inc as Wall

Street’s farm team for Washington’sbig leagues

“Goldman’s tried to keep a lowprofile They’ve been vilified for solong, so they’re not a good choice

J.P Morgan isn’t a good pool either,they’ve been tarnished Citi is dif-ferent,” said Stavros Gadinis, assis-tant professor of law who focuses

on financial regulation at the versity of California at Berkeley

Uni-The recent round of appointeeswere originally recruited to Citigroupfrom top government and economicposts, part of a push by former exec-utives, including ex-Chairman RobertRubin, himself a former Treasurysecretary, and former Chief ExecutiveVikram Pandit to hire government of-

ficials who could raise the bank’s ternational profile, said people in-volved in the effort

in-Citigroup sought out economic,regulatory and business leaders whocould work easily with overseasCEOs, the people said

“A lot of the people that now areserving or used to serve in senior po-sitions were part of a very consciouseffort,” said one of the people “The

objective and the hope was that ple like this reinforced the institu-tion’s reputation as the strongest inthe world in thought leadership.”

peo-However, another person said itwas “absurd” to suggest that thebank knew that those high-profilehires would later go back into gov-ernment and help boost Citigroup’simage

But the bank did offer pay ages to some officials that rewarded

pack-a return to high-profile government

jobs, in some cases giving big outs upon leaving

pay-Mr Froman got a $2 millionpayment from Citigroup in recogni-tion of his service and for waivingrights to investment fund holdingswhen he left the bank to join theObama administration last year

Mr Froman told the Senate hewould donate those funds to charity

Mr Froman no longer holds Citistock or interests in any Citigroupfunds, according to the Office of theU.S Trade Representative

“If a company offers financial centives to go into government ser-vice, does that compromise the real

or perceived independence of the dividuals while in public service?”

in-Sen Charles Grassley (R., Iowa) said

in an emailed statement “It doesn’tappear that the Obama Administra-tion adequately considers whetherhiring so many people from thesame firm, including those who havereceived financial incentives to jointhe Administration, keeps enoughdistance between the governmentand the private sector that has aninterest in government regulations.”

The addition of Obama tration officials with Citigroup ontheir résumé is troublesome be-cause it can give a public perception

adminis-of undue influence, said MichaelSmallberg, an investigator with the

Project on Government Oversight

A spokeswoman said Citigroup is

“proud that many of its current andformer people have been dedicatedpublic servants to their home coun-tries.”

There is little evidence the nections have helped so far, in partbecause Wall Street remains understiff scrutiny and toughened rules inthe wake of the 2010 Dodd-Franklaw Citigroup, along with all bigbanks, is subject to higher capitalrequirements and the Volcker ruleban on proprietary trading.Citigroup has made it easier forthose heading to the public sector tocontinue compensation arrangementsthat can be worth millions of dollars

con-As part of a long-standing policy, ployees who voluntarily leave for afull-time paid career in government,charity or education post are still onschedule to receive a full award oftheir deferred stock and deferredcash annual incentive awards, ac-cording to a 2013 Citigroup quarterlyreport filed with the Securities andExchange Commission Those wholeave for other jobs forfeit the por-tions that aren’t yet ready to becashed in

em-And the bank says it acceleratesthe vesting of outstanding compen-sation in cases where there may beconflicts of interest

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DJE Real Estate P OT OT LUX 02/26 EUR 4.31 -0.7 -8.0 -6.9 DJE-Absolut P OT OT LUX 02/26 EUR 255.08 1.3 8.0 7.9 DJE-Alpha Glbl P OT OT LUX 02/26 EUR 187.79 -3.4 7.4 5.3 DJE-Div& Substanz P OT OT LUX 02/26 EUR 280.70 -0.8 7.1 9.3 DJE-Gold&Resourc P OT EQ LUX 02/26 EUR 130.89 7.9 -15.4 -18.9 DJE-Renten Glbl P EU BD LUX 02/26 EUR 150.73 1.3 2.8 4.5 LuxPro-Dragon I AS EQ LUX 07/20 EUR 144.57 -8.5 5.0 7.6 LuxPro-Dragon P AS EQ LUX 07/20 EUR 140.29 -8.8 4.4 7.0 LuxTopic-Aktien Europa EU EQ LUX 02/26 EUR 20.37 0.0 7.4 5.6 LuxTopic-Pacific OT OT LUX 02/26 EUR 19.62 -1.6 -8.6 -0.7

n OTHER FUNDS

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Medinvest Plc Dublin OT EQ IRL 09/30 USD NS.00 NS 1.3 -4.4

n WINTON CAPITAL MANAGEMENT LTD

Tel: +44 (0)20 7610 5350 Fax: +44 (0)20 7610 5301

Winton Evolution EUR Cls H GL OT CYM 01/31 EUR NS.00 -3.1 7.2 1.5 Winton Evolution GBP Cls G GL OT CYM 01/31 GBP NS.00 -3.1 7.6 1.9 Winton Evolution USD Cls F GL OT CYM 01/31 USD NS.00 -3.1 7.6 1.8 Winton Futures EUR Cls C GL OT VGB 01/31 EUR 245.63 -2.4 3.8 0.9 Winton Futures GBP Cls D GL OT VGB 01/31 GBP 267.48 -2.4 4.1 1.3 Winton Futures JPY Cls E GL OT VGB 01/31 JPY 17199.60 -2.3 4.4 1.0 Winton Futures USD Cls B GL OT VGB 01/31 USD 876.58 -2.4 4.2 1.2

Pictet-Brazil Index-P USD OT OT LUX 02/25 USD 62.82 -8.4 -23.5 -21.2 Pictet-CHF Bonds-P CH BD LUX 02/25 CHF 466.13 1.2 1.4 2.4 Pictet-China Index-P USD AS EQ LUX 02/25 USD 98.14 -6.8 -2.8 0.4 Pictet-Clean Energy-P USD OT OT LUX 02/25 USD 87.02 1.9 32.1 13.2 Pictet-Digital Comm-P USD OT EQ LUX 02/25 USD 214.42 3.9 41.0 23.0 Pictet-Eastern Europe-P EUR EU EQ LUX 02/25 EUR 316.48 -8.3 -14.2 -5.1 Pictet-Em Corp Bds-P USD OT OT LUX 02/25 USD 100.96 1.1 -1.7 NS Pictet-Em Loc Curr Dbt-P USD OT OT LUX 02/25 USD 176.56 -1.2 -12.7 -3.7

Pictet-Em Mkts Hgh Div-P USD GL EQ LUX 02/26 USD 106.00 -5.4 -8.1 NS Pictet-Em Mkts Index-P USD GL EQ LUX 02/25 USD 233.65 -4.6 -7.8 -3.7

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Pictet-Envir Megatr Sel-P EUR OT OT LUX 02/25 EUR 122.07 0.8 12.6 10.7 Pictet-Eu Equities Sel-P EUR EU EQ LUX 02/25 EUR 543.20 -0.8 7.3 10.5 Pictet-EUR Bonds-P EU BD LUX 02/25 EUR 476.40 2.5 3.3 6.2 Pictet-EUR Corp Bds Ex Fin-P EU BD LUX 02/25 EUR 133.02 1.7 3.2 4.5

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Pictet-European Sust Eq-P EUR EU EQ LUX 02/25 EUR 190.90 3.6 18.2 14.4 Pictet-Generics-P USD OT EQ LUX 02/25 USD 212.25 11.2 35.3 24.6

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Pictet-Japanese Eq Opp-P JPY JP EQ LUX 02/26 JPY 6978.00 -6.9 27.9 25.1 Pictet-Japanese Eq Sel-P JPY JP EQ LUX 02/26 JPY 10628.71 -7.9 25.7 21.8 Pictet-Latam Index-P USD GL EQ LUX 02/25 USD 71.88 -8.5 -21.4 -15.4

Pictet-LatinAmLocCurrDbt-PUSD OT OT LUX 02/25 USD 136.63 1.3 -15.0 -5.3 Pictet-Pac (ExJpn) Idx-P USD AS EQ LUX 02/26 USD 363.03 1.1 0.6 7.8 Pictet-Piclife-P CHF OT OT LUX 02/25 CHF 906.54 0.8 5.3 6.9

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Pictet-Russian Equities-P USD EE EQ LUX 02/25 USD 60.75 -10.9 -9.8 -8.6 Pictet-Security-P USD GL EQ LUX 02/25 USD 168.26 2.0 22.0 14.5

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Pictet-Small Cap Europe-P EUR EU EQ LUX 02/25 EUR 865.61 5.4 30.8 23.9

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Pictet-USDGovernmentBonds-P US BD LUX 02/25 USD 581.09 1.7 -1.7 0.2

Pictet-USDShortMid-TermBds-P US BD LUX 02/25 USD 125.84 0.2 0.2 0.3 Pictet-Water-P EUR OT OT LUX 02/25 EUR 198.96 1.6 12.3 11.8

Pictet-World Gvt Bonds-P EUR OT OT LUX 02/25 EUR 132.59 2.8 -3.5 -1.8 PTR-Banyan-P USD OT OT LUX 02/20 USD 95.94 -6.5 -9.2 -4.5 PTR-Corto Europe-P EUR OT OT LUX 02/25 EUR 131.26 4.6 16.1 16.0 PTR-Kosmos-P EUR OT OT LUX 02/25 EUR 107.01 0.5 1.2 1.6 PTR-Mandarin-P USD OT OT LUX 02/26 USD 103.29 -2.7 7.1 3.7

n POLAR CAPITAL PARTNERS LIMITED

InternationalFundManagers(Ireland)LimitedPH-3531670660Fax-35316701185

Global Technology OT EQ IRL 02/25 USD 23.73 3.9 32.8 15.1 Japan Fund USD JP EQ IRL 02/26 USD 21.18 -6.2 11.6 5.9 Polar Healthcare Class I USD OT EQ IRL 02/25 USD 33.77 19.1 72.3 46.6 Polar Healthcare Class R USD OT EQ IRL 02/25 USD 33.12 19.0 71.7 46.0

n Hemisphere Management (Ireland) Limited

Discovery USD A GL OT CYM 12/31 USD 101.35 NS NS NS Elbrus USD A OT OT CYM 01/31 USD 10.10 NS NS NS Europn Conviction USD B EU EQ CYM 01/31 USD 161.54 0.3 1.1 5.3 Europn Forager USD B EU EQ CYM 01/31 USD 324.09 2.6 11.7 11.9 Latin America USD A GL EQ CYM 06/30 USD NS.00 NS NS NS

n HERMITAGE CAPITAL MANAGEMENT LTD.

Tel: +7501 258 3160 www.hermitagefund.com

The Hermitage Fund GL EQ JEY 03/12 USD 963.12 4.5 105.6 -23.2

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T: +44(0)20 7838 7580, F: +44(0) 20 7838 7590, www.horsemancapital.com

Horseman EurSelLtd EUR EU EQ GBR 01/31 EUR 349.13 4.3 31.3 29.1 Horseman EurSelLtd USD EU EQ GBR 01/31 USD 349.13 NS NS NS Horseman Glbl Ltd EUR GL EQ CYM 01/31 USD 577.71 NS NS NS Horseman Glbl Ltd USD GL EQ CYM 01/31 USD 577.71 NS NS NS

n HSBC ALTERNATIVE INVESTMENTS LIMITED

T +44 20 7860 3074 F + 44 20 7860 3174 www.hail.hsbc.com HSBC ALTERNATIVE STRATEGY FUND

Special Opp EUR OT OT GGY 12/31 EUR 122.21 14.2 14.2 17.0 Special Opp Inst EUR OT OT GGY 03/31 EUR 88.51 0.7 -0.3 13.3 Special Opp Inst USD OT OT GGY 03/28 USD 123.18 4.2 18.5 10.6 Special Opp USD OT OT GGY 12/31 USD 129.13 14.0 14.0 17.3

n HSBC Portfolio Selection Fund

GH Fund CHF Hdg OT OT GGY 01/31 CHF 125.95 0.5 6.7 6.1

GH Fund EUR Hdg (Non-V) OT OT GGY 01/31 EUR 140.23 0.5 6.3 6.0

GH Fund GBP Hdg OT OT GGY 01/31 GBP 154.96 0.5 6.9 6.7

GH Fund Inst USD OT OT GGY 01/31 USD 133.63 0.6 7.3 7.0

GH FUND S EUR OT OT CYM 01/31 EUR 156.05 0.6 7.7 7.2

n HSBC Trinkaus Investment Managers SA

E-Mail: funds@hsbctrinkaus.lu Telephone: 352 - 47 18471

HSBCTrinkausGoldenOpportunities OT OT LUX 02/25 USD 85.86 22.7 -25.9 -22.7 Prosperity Return Fund A JP BD LUX 12/06 JPY 8577.68 -9.3 -8.4 0.3 Prosperity Return Fund B EU BA LUX 12/06 JPY 9032.12 4.6 11.0 13.2 Prosperity Return Fund C EU BA LUX 12/06 USD 79.01 -12.2 -11.1 -1.0 Prosperity Return Fund D EU BA LUX 12/06 EUR 121.37 -9.0 -8.8 8.1 Renaissance Hgh Grade Bd A EU BA LUX 12/06 JPY 10807.34 3.5 5.1 11.3 Renaissance Hgh Grade Bd B EU BA LUX 12/06 JPY 11130.39 17.9 25.6 23.9 Renaissance Hgh Grade Bd C EU BA LUX 12/06 USD 96.94 -0.9 0.7 8.4 Renaissance Hgh Grade Bd D EU BA LUX 12/06 EUR 102.83 -4.6 -4.1 6.9

n MP ASSET MANAGEMENT INC.

Tel: + 386 1 587 47 77

MP-BALKAN.SI EE EQ SVN 08/12 EUR 19.29 -1.9 -8.4 -10.9 MP-TURKEY.SI OT OT SVN 02/24 EUR 33.54 -7.4 -29.9 -4.7

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n PT CIPTADANA ASSET MANAGEMENT

Tel: +6221 25574 883 Fax: +6221 25574 893 Website: www.ciptadana-asset.com

Indonesian Grth Fund GL EQ BMU 02/19 USD 154.09 13.0 -16.5 -10.2

n THE NATIONAL INVESTOR

PO Box 47435, Abu Dhabi, UAE Web:www.tni.ae

MENA Special Sits Fund OT OT BMU 01/31 USD 1127.97 1.1 5.8 6.7 MENA UCITS Fund OT OT IRL 02/20 USD 1393.41 7.5 30.0 19.1 UAE Blue Chip Fund OT OT ARE 02/20 AED 10.81 15.9 81.3 52.9

n YUKI MANAGEMENT & RESEARCH

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YMR-N Growth Fund JP EQ IRL 02/26 JPY 13497.00 -6.1 37.6 26.4

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n Yuki Mizuho Series

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GH FUND S GBP OT OT CYM 01/31 GBP 163.37 0.6 7.8 7.6

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GH Fund USD OT OT GGY 01/31 USD 318.33 0.5 6.5 6.4 Hedge Investments OT OT GGY 08/16 USD 158.48 NS NS 3.6 Leverage GH USD OT OT GGY 01/31 USD 148.62 0.9 11.1 10.7 MultiAdv Arb CHF Hdg OT OT JEY 01/31 CHF 100.74 0.8 3.6 3.9 MultiAdv Arb EUR Hdg OT OT JEY 01/31 EUR 112.34 0.8 4.0 4.2 MultiAdv Arb GBP Hdg OT OT JEY 01/31 GBP 122.34 0.8 4.4 4.7 MultiAdv Arb S EUR OT OT JEY 01/31 EUR 126.73 1.0 5.3 5.6 MultiAdv Arb S GBP OT OT JEY 01/31 GBP 133.92 0.9 5.6 6.0 MultiAdv Arb S USD OT OT JEY 01/31 USD 144.88 0.8 5.2 5.7 MultiAdv Arb USD OT OT JEY 01/31 USD 212.29 0.8 4.1 4.5

n HSBC Uni-folio

Asian AdbantEdge EUR OT EQ JEY 01/31 EUR 97.06 -0.4 4.9 4.0 Asian AdvantEdge OT EQ JEY 01/31 USD 181.80 -0.4 5.0 4.7 Emerg AdvantEdge OT EQ JEY 09/28 USD 151.22 3.4 -2.4 -5.5 Emerg AdvantEdge EUR OT EQ JEY 09/28 EUR 82.99 2.8 -3.0 -5.9 Europ AdvantEdge EUR OT EQ JEY 06/30 EUR 127.84 -3.4 -1.3 2.2 Europ AdvantEdge USD OT EQ JEY 06/30 USD 135.07 2.0 4.3 5.1 Real AdvantEdge EUR OT OT JEY 04/30 EUR 104.69 1.3 -9.5 -1.9 Real AdvantEdge USD OT OT JEY 04/30 USD 105.31 1.5 -8.8 -1.7 Trading AdvantEdge OT OT GGY 01/31 USD 126.86 -2.6 -12.0 -8.6 Trading AdvantEdge EUR OT OT GGY 01/31 EUR 114.61 -2.2 -12.0 -8.6 Trading AdvantEdge GBP OT OT GGY 01/31 GBP 122.37 -2.6 -12.0 -8.5

n MERIDEN GROUP

Tel: + 376 741 175 Fax: + 376 741 183 Email: meriden@meriden-ipm.com

Antanta Combined Fund EE EQ AND 02/21 USD 208.41 -0.7 -22.8 -19.2 Antanta MidCap Fund EE EQ AND 02/21 USD 353.52 -2.1 -15.4 -17.2 Meriden Opps Fund GL OT AND 02/05 EUR 22.68 0.0 -11.2 -11.0 Meriden Protective Div GL EQ AND 11/24 EUR NS.00 -2.8 NS NS

n Pictet Funds (Europe) SA, ROUTE DES ACACIAS 60, CH-1211 GENEVA 73

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Some are raising concerns that Citigroup has inordinate sway within the Obama administration.

WORLD NEWS U.S Probes Fund Flows From Gabon

U.S authorities are investigatingthe flow of funds from Gabon to theU.S to determine whether any as-sets are traceable to public corrup-

tion in the central African country,according to a law-enforcement doc-ument and people familiar with thematter

As part of a broader effort to dress possible foreign graft, Home-land Security agents and Justice De-partment prosecutors have searchedfor assets in the U.S linked to Gabo-nese President Ali Bongo and hisfamily, as well as his chief of staff,Maixent Accrombessi, these peoplesaid Prosecutors could seek to seizeassets they believe are ill-gotten

ad-The case puts Gabon in the crosshairs of U.S policy in Africa Presi-dent Barack Obama is looking to in-crease trade and military ties withstable African partners like Gabon,

an economy growing at about 7%

this year But the Justice ment is taking a harder tack againstcorruption on the continent

Depart-Two U.S Senate probes into themovement of foreign assets into thecountry since 1999 concluded that

Mr Bongo’s late father, Omar, whoruled the country for 41 years, usedhis position to amass a personal for-tune during Gabon’s oil boom

The current U.S probe came tolight last year after customs offi-cials at Los Angeles InternationalAirport said they found more than

$150,000 in the luggage of a time hairdresser and aide to Mr

one-Bongo Agents seized the moneyfrom the man, Derek Ashby, because

he hadn’t disclosed the full amount

on currency forms, according todocuments filed in federal court inCalifornia in July

In September, federal agentsraided the Pennsylvania home oflobbyist Joseph Szlavik, weeks after

he allegedly transported cash fromGabon to the U.S., said people famil-iar with the matter Prosecutors areinvestigating whether Messrs Szla-vik and Ashby violated any criminallaws, according to the law-enforce-ment document

Bringing bulk cash into the U.S

is legal, as long as the person ing it declares the proper amount

and states whether they are ing it on someone else’s behalf

carry-Money-laundering laws prohibit anyperson from knowingly engaging in

a financial transaction that involvesthe proceeds of corruption

Mr Ashby told agents he hadn’tbothered to count all of the cash hewas carrying because he was trans-

porting it from Gabon to Mr

Bongo’s estranged wife in Los les, Inge Collins, according to courtdocuments “He was just unaware ofthe total amount he was provided,”

Ange-said Michael R Kilts, a lawyer for

Mr Ashby Mr Szlavik declined tocomment through his lawyer, AitanGoelman Neither man has beencharged with a crime

Since 2000, Ms Collins has ceived millions of dollars in cashpayments and wire transfers from

re-Mr Bongo and through Messrs

Ashby and Szlavik, said a person miliar with the matter

fa-Mr Bongo’s office said thismonth that it was aware of theprobe of his associates but receivedword from the U.S State Depart-ment this month that neither thepresident nor his government is un-der investigation by U.S authorities

It added that the policies of the der Bongo’s presidency outlined inthe prior Senate investigations “arenot the policies of the current presi-dency” or the rest of the govern-ment A State Department spokes-man declined to comment, as did aJustice Department spokesman

el-U.S Attorney General Eric

Holder announced a new feiture program in 2010 aimed at

asset-for-“combating large-scale foreign cial corruption.”

offi-From 2011 to 2012, Gabon held aUnited Nations Security Council seatand helped push through two of Mr.Obama’s most difficult U.N votes:sanctions against Iran’s nuclear pro-gram and support for the removal ofLibyan leader Moammar Gadhafi

In 2011, Mr Bongo asked the U.S.Treasury for help training Gaboneseauditors to investigate corruptionthere, said Eric Benjaminson, thenU.S ambassador That same year,

Mr Bongo had a 50-minute sation with Mr Obama in the WhiteHouse in which the U.S leader ex-pressed his desire for the Gabonese

conver-to increase anticorruption efforts,said Mr Benjaminson, who was inthe room Mr Bongo agreed, butsaid he faced challenges in uproot-ing a long tradition of corruption inthe country, said Mr Benjaminson

A White House spokesman clined to comment

de-Ms Collins, who has also beencontacted as part of the investiga-tion, said she was cooperating anddenied any wrongdoing

By Joe Palazzolo, Christopher M Matthews and Drew Hinshaw

Gabonese President Ali Bongo, seen

in Tunisia earlier this month.

trading firm FXCM Inc agreed to

pay fines and refunds totaling

al-most £10 million ($16.7 million) to

settle allegations by a U.K financial

regulator that the company

with-held profits from clients and failed

to inform British authorities that it

was under investigation in the U.S

The Financial Conduct

Author-ity said that U.K units of FXCM

withheld £6 million from customers

on foreign-exchange transactions

between August 2006 and December

2010 The regulator said the broker

pocketed profits when exchange

rates moved in its customers’ favor

while a trade was in process, but it

passed on losses that occurred on

other trades

FXCM, which is based in New

York and is publicly listed on the

New York Stock Exchange, is a

dom-inant broker in online

foreign-ex-change trading for retail clients and

serves banks, hedge funds and other

asset managers The company in

2012 sought to boost its

institu-tional-trading business by investing

in, and trading with, an trading platform called FastMatch,

electronic-in partnership with Credit Suisse

Group AG In trades with retail

cus-tomers, FXCM matches orders tronically with quotes from morethan a dozen banks and other so-

elec-called market-making firms

As part of its settlement, FXCMagreed to pay £4 million in finesplus almost £6 million to refund

money to U.K clients

In a statement, FXCM playeddown the impact on customers as

“typically very limited,” with vidual traders suffering an averagehit of $3.70 apiece because of thepractices over the four-year period

indi-addressed in the settlement

“It’s not like this was a majorsource of profit,” FXCM Chief Exec-utive Drew Niv said in an interviewWednesday, adding that FXCM oper-ated similarly to competitors when

it pocketed price improvements stead of crediting customers FXCMchanged its practices in 2010 topass along those price improve-ments to customers, Mr Niv said

in-“This is how the system was set

up As far as we were concerned atthe time, the customer traded with

us, and we hedged,” Mr Niv said

“The only thing we held back onwas the price improvement We stillgave the customer the best price out

of multiple market makers.”

FXCM said it had provisioned $15million in the third quarter of 2013

for this matter

The FCA became aware of thepractice in 2011 But it was unawarethat U.S authorities had begun theirown probe into the matter a yearearlier In 2011, FXCM agreed to paymore than $14 million to settle alle-gations from U.S market regulatorsthat the company had failed to su-pervise customer accounts As a re-sult, regulators said, FXCM custom-ers suffered detrimental pricing on

trades

FXCM’s failure to alert the FCAbreached requirements that busi-nesses be open and cooperative withthe U.K regulator “I’m not contest-ing that,” Mr Niv said, adding that

an FXCM executive at the time sponsible for informing the Britishregulator mistakenly “thought he

re-had.”

B Y J ENNY S TRASBURG

A ND M AX C OLCHESTER

Companies Pay Up For Cybersecurity

Few know the costs of hackingbetter than Robert Carr

Since cybercriminals gained cess to more than 100 millioncredit- and debit-card numbers

ac-from Heartland Payment Systems

Inc in 2007, Mr Carr, its chief utive, has quadrupled his securitybudget Heartland also paid $150million in fines and legal costs fromthe breach and suffered damage toits reputation as a payment proces-

exec-sor

“We’ve done a lot of things sincethe breach that we didn’t do beforethe breach,” Mr Carr said in a re-cent interview, pointing to reducingthe number of computer systemsthat process valuable card data,while adding more encryption and

system-monitoring tools

Heartland’s experience scores long-standing questions overthe costs and benefits of cybersecu-rity The Obama administrationstoked the debate earlier this month

under-by issuing new guidelines urgingcompanies in important industriessuch as energy, banking and tele-communications to do more to pro-tect and monitor their networks,

and to train employees

Some business groups criticizedthe proposal, saying it would pushthem to spend money for uncertainbenefits Increased spending mightnot make sense for an individualfirm, they say, even if it might make

the nation safer

The White House proposal is

“propublic and not procommercial,”

said Larry Clinton, president of theInternet Security Alliance, a busi-ness group whose members include

General Electric Co., Wells Fargo &

Co and Verizon CommunicationsInc Cybersecurity measures must

be cost-effective for an individualcompany, or be “supported by somesort of economic incentive,” he said

Mr Clinton said the nected global economy creates

intercon-“massive economic incentives to beinsecure.” For instance, lengthy in-ternational supply chains can offersavings for manufacturers, but canopen doors for hackers The samegoes for sprawling, interconnectedinternal networks that allowcompanies to manage assets from

afar

The vulnerability has been ondisplay recently, as retailers dis-closed thefts of customer data In

the most prominent example,

Tar-get Corp said hackers stole 40

mil-lion credit- and debit-card numbers,along with passcodes, from itsstores The thieves gained access toTarget’s cash-register systemsthrough a refrigeration contractor

risks of cyberattacks

The debate will be joined thisweek at the annual RSA Conference,the equivalent of the Detroit autoshow for the anti-hacker industry

More than 400 cybersecurity panies will display their wares at

com-the San Francisco event

Companies wrestle daily withthe question of how much security

is enough Global cybersecurityspending by critical infrastructureindustries was expected to hit $46billion in 2013, up 10% from a yearearlier, according to Allied Business

Intelligence Inc

“Large and small companies form cost-benefit analyses for everydollar spent,” lobbyists for the wire-less and cable industries wrote in aDecember letter to the government

per-on the issue

For instance, after Iran-linkedhackers began attacking U.S bankwebsites in 2012, the industry be-gan to invest more heavily in com-puter security, a former U.S officialsaid And after RSA, the security di-vision of EMC Corp., suffered abreach in 2011, higher up executivesbecame more involved in cybersecu-rity risk calculations, RSA’s Execu-tive Chairman Art Coviello said in arecent interview with The Wall

Street Journal

Here’s part of the problem: It is

a lot cheaper to hack than defend ahack For $1 million, Richard Be-jtlich, chief security strategist at

FireEye Inc and a former cyber

in-vestigator for the U.S Air Force,said he could assemble a team thatcould hack into nearly any target

But $1 million wouldn’t be nearlyenough for a company to defend it-

self

Complete security is “not thing most people can afford, letalone anyone can afford,” Mr Be-jtlich said He agrees with other ex-ecutives who say that if the govern-ment wants businesses to improvecyberdefenses, it should subsidizethe cost, with tax breaks, for exam-

some-ple

In a 2005 note to clients, ner Inc analyst Avivah Litan esti-mated for every $5.62 businessesspend after a breach, they couldspend $1 beforehand on encryptionand network protection to preventintrusions and minimize damage

Gart-Today, she says, the ratio is aboutthe same

But Ms Litan says she is oftenrebuffed when she pitches corporateboards on bolstering cyberdefenses

“They say it costs more to securethe system than to suffer thebreach,” said Ms Litan, who de-clined to name clients but works

with retailers

Target, for example, spent ily on cybersecurity, according toformer employees and people famil-iar with retailer networks Lastsummer, it brought in consultantsfrom the Chertoff Group, a Wash-ington firm with close ties to na-tional-security agencies, to reviewits security and interview the com-pany’s intelligence analysts, former

heav-employees said

Chertoff’s findings, delivered tothe company last fall, couldn’t belearned Target security staffwarned about possible weak spots

in its payment-card system beforethe breach, people familiar with thematter said, but the warnings werewaved off as the holiday-shoppingseason approached Target declined

sensitivity of the issue

Mr Carr, the Heartland tive, says businesses face a careful

BUSINESS & FINANCE

CEO Concedes Bank Misconduct

help Americans hide funds in

unde-clared Swiss accounts In a report

released Tuesday, the subcommittee

described the bank as a willing

par-ticipant in its clients’ attempts to

evade taxes, saying it set up a

branch at Zurich’s airport so

cus-tomers could attend to banking en

route to ski vacations

On Wednesday, Mr Levin opened

the hearing by noting that despite

an ongoing crackdown, “the sad

truth is that the era of bank secrecy

is not over.” Mr Levin said that as

U.S authorities began scrutinizing

the bank in 2008, Credit Suisse

ini-tially promised it would “clean up”

its business with Americans But,

Mr Levin said the bank moved

slowly to address the issue and “was

holding back about how bad the

problem was.”

Mr Levin and other lawmakers

also expressed frustration with the

DOJ for failing to act more

aggres-sively to make Credit Suisse

ac-countable

In written remarks prepared for

Wednesday’s hearing, however, two

top DOJ officials defended their

strategy for pursuing U.S tax

eva-sion, saying the agency has pressed

charges against 73 holders of

off-shore accounts and 35 bankers since

2009

Credit Suisse is one of about a

dozen Swiss banks under DOJ

inves-tigation for allegedly helping

Ameri-can clients hide assets using Swiss

accounts Since 2008 the bank said

it has wound down many U.S

ac-counts, with the exception of a

re-maining 3,500, and has stopped

tak-ing new American clients for its

Swiss private-banking business

Mr Levin repeatedly asked why

Credit Suisse won’t provide

infor-mation about customers the bank

recruited within the U.S

Mr Dougan and three other

ex-ecutives, including the bank’s

gen-eral counsel, said the bank can’t

provide extensive information about

U.S clients until the Senate ratifies

Continued from first page

an amended 2009 double-taxationtreaty between the U.S and Switzer-land The bank has noted the proto-col already has been approved by

the Swiss Parliament

The Senate has yet to ratify theagreement amid opposition fromone lawmaker, Sen Rand Paul (R.,Ky.) A spokeswoman for Mr Pauldidn’t immediately respond to a re-

quest for comment

Credit Suisse executives alsowere quizzed at length about evi-dence in the Senate report that bankmanagement may have sought to ar-tificially bolster the performance ofits Swiss private-banking business

in financial reporting for 2012 byaugmenting its so-called net new as-sets figure Like other Swiss banks,Credit Suisse has seen money gener-ally flow out of its Swiss privatebank from clients in many regions

as those international customersseek to comply with laws at home

Credit Suisse executives knowledged at the hearing that it isconducting an internal review of thematter There is so far no indicationfigures were inaccurately reported

ac-to the public, they said

“I’m not trying to minimize it,”

Mr Dougan said, “but it’s a detail.”

Mr Levin quickly responded:

“You may call it a detail, I’d call itsomething investors would presum-

ably look at.”

The Senate report estimatesCredit Suisse had at one time some22,000 American clients, storing 12billion Swiss francs ($13.5 billion atcurrent exchange rates) at the bank

The report notes that clients ated with about 1% of the Americanaccounts have been identified to

associ-U.S authorities

Mr Dougan and his colleaguestestifying Wednesday said a signifi-cant portion of the U.S.-linked as-sets cited in the report have beendeemed tax compliant The execu-tives also said more than a third ofthe accounts cited in the report held

less than $10,000

In early 2009, Credit Suisse rivalUBS reached a deferred prosecutionagreement with the DOJ, admitted

to helping American clients evadetaxes and agreed to pay $780 mil-lion UBS ultimately handed thou-sands of names of clients to U.S au-

thorities

Credit Suisse is expected toeventually reach a settlement withthe DOJ that exceeds the amount

WORLD NEWS

Syrian Regime Says

It Killed 175 Rebels

BEIRUT—The Syrian government

said its forces ambushed and killed

dozens of rebels near Damascus,

al-leging they were part of a new

of-fensive to squeeze the capital and

pressure the regime to accept a

po-litical solution to the war

There were conflicting reports

over who was killed Wednesday in a

desert area on the fringes of the

rebel-held suburb of Eastern

Gh-outa, which has been under siege by

Syrian forces for more than seven

months

Syrian state news agencies said

all the 175 dead were rebels from

the al Qaeda-linked Nusra Front

They reported the fighters came

through southern Syrian from

neighboring Jordan, where rebels

say they are receiving sophisticated

weapons from Gulf Arab states,

in-cluding shoulder-fired missiles

ca-pable of taking down jets

The opposition said the dead

in-cluded some rebel fighters, but were

mostly civilians trying to escape the

siege of Eastern Ghouta, where

ac-tivists have reported starvation and

medical care is scarce for the

500,000 residents

State TV showed images of

bod-ies piled up and foreign passports

from Saudi Arabia, Iraq and other

countries

Rebels said recently that they

have begun to receive more

sophis-ticated weapons for the first time,

including antitank guided missiles

and Manpad antiaircraft missiles

They said the aid was in preparation

for the new offensive to push into

Damascus from southern Syria inhopes of forcing President Basharal-Assad’s regime to accept a politi-cal settlement The plan arose out offrustration with the regime’s refusal

to discuss a political compromise atthe recent Geneva peace conference

An activist from Eastern Ghoutacontradicted the government’s ac-count, saying those killed were actu-ally heading out of Eastern Ghouta,not into it, and going in the oppo-site direction to Quneitra in south-western Syria near Israel A pivotalbattle for fighters trying to reachDamascus has been raging aroundQuneitra for about a week

“More than 40 Syrian fighterswere killed and 15 escaped from theSyrian army ambush while theywere trying to get out of EasternGhouta,” the activist said “Theywere heading to Quneitra to fightthere.”

The Army of Islam, an Islamistrebel group which is powerful in thearea near the ambush, said the gov-ernment killed 45 people, mostly ci-vilians, who were trying to get out

of Eastern Ghouta The Army of lam is part of an alliance of reli-gious rebel groups knows as the Is-lamic Front

Is-Susan Ahmad, an activist inEastern Ghouta, said dozens of Syr-ian civilians and fighters wanted toleave because they didn’t want todie of hunger

“They tried to run away from thegovernment siege.…They wereshelled and later Assad’s forces shotthe wounded.”

Several opposition groups cluding the U.K.-based Syrian Obser-vatory for Human Rights said theambush was carried out mainly bymembers of the Iranian-backed Leb-anese militia Hezbollah The grouphas been actively fighting alongsidethe Syrian regime for close to ayear, particularly around Damascusand other parts of central Syria

in-—Mohammed Nour Alakraa contributed to this article.

B Y M ARIA A BI- H ABIB

Hezbollah Vows It Will

Retaliate for Israeli Strike

BEIRUT—Hezbollah vowed it

would retaliate for an Israeli

air-strike that damaged one of its bases

near Lebanon’s frontier with Syria,

raising the specter of a wider

con-flict along the country’s

already-vol-atile southern and eastern borders

The Shiite militant and political

group said Wednesday that Israeli

warplanes struck one of its

posi-tions late Monday near the eastern

town of Janta in the Bekaa Valley,

which borders Syria Hezbollah

de-nied reports that the raid on the

base resulted in casualties and

dam-age to artillery and rocket batteries

The statement by Hezbollah,

broadcast over its Al Manar

televi-sion station, was the first public

ac-knowledgment in Lebanon that the

Israeli raid had targeted Lebanese

territory It raised fears, politically

explosive here, that this small

na-tion might be dragged further into

the conflict in Syria and into

re-newed conflict with Israel, its

pow-erful neighbor and enemy to the

south

Hezbollah, which fought the

Is-raeli armed forces to a draw in 2006

in southern Lebanon, showed fewworries

“This aggression won’t standwithout a response,” the group said

The threat, about 36 hours afterthe attack, came after local mediareported that some Hezbollah fight-ers had been killed in the airstrikeand that trailers carrying missileshad been the target

Israel refused to confirm or denythat it carried out Monday’s raid

But the deputy commander of itsNorthern Command reserves saidHezbollah had little choice but toconfirm the attack on one of itsbases

“I assume that Hezbollah ized it could no longer deny theevent after the entire world around

real-it had reported real-it,” Eyal Ben Reuven,

a reserve major general in the raeli army, told Israel Radio

Is-The general said Hezbollah wasunlikely to attack Israel because itwas already preoccupied in Lebanonand Syria, where, along with Iran, ithas joined sides with PresidentBashar al-Assad to put down the re-bellion there

—Joshua Mitnick in Tel Aviv contributed to this article.

The resignation and the dents come as India—the world’sbiggest importer of weapons—isworking to upgrade its defense ca-pabilities to face a more assertiveChina, as well as its longtime rival,Pakistan

acci-Admiral D.K Joshi’s resignationcame hours after a fire broke outaboard a submarine during a train-ing exercise Two submariners wentmissing and seven others were hos-pitalized for the effects of smoke in-halation INS Sindhuratna, a Soviet-built diesel-powered sub, was about

75 kilometers off the coast of bai

Mum-The whereabouts of the two mariners wasn’t known as three sec-tions of the sub haven’t yet been in-spected due to fears that fire couldrestart, Commander Rahul Sinha, anaval spokesman, said “The subma-rine is disabled and at sea We ex-pect it to be brought to Mumbaidockyard early tomorrow morning,”

a successor is announced, it said

In January, another submarine,INS Sindhugosh, ran aground offMumbai in low tide, and a few otherwarships ran aground India hasabout 15 submarines The air forceflies mostly Soviet-era MiG planes,several of which have crashed in re-cent years, killing their pilots Thearmy is trying to buy advancedtanks and guns

The most damaging of the navalincidents took place in August when

18 sailors died after explosions and

a fire rocked a Russia-built rine, INS Sindhurakshak, in a Mum-bai naval dockyard The Indian gov-ernment asked the navy to conductcomprehensive checks of weaponsand safety on board all its subma-rines since last year’s incident

subma-Despite the heightened focus onsafety, ships belonging to the IndianNavy have run aground or weredamaged after hitting underwaterobjects in recent months A mine-sweeper reportedly caught fire whileundergoing repairs in a dockyard

In November, the navy sioned its second aircraft carrier tobolster its blue-water presence TheINS Vikramaditya can carry morethan 30 planes, including Russian-made MiG-29K and U.K.-built SeaHarrier fighter jets, as well as Ka-

commis-mov, Sea King, Dhruv and Chetak licopters

he-“It is a challenging situation forthe navy,” said C Uday Bhaskar, aretired Indian Navy commodore andformer director of the National Mar-itime Foundation “It is time for us

to take a deeper look into the higheredifice of delays in defense modern-ization and induction of new equip-ment in India.”

China, which fought a war withIndia in 1962, has begun a rapidmodernization drive of its navy Ithas also been venturing away fromits home waters, with warships sent

on antipiracy patrols off Somaliaand on voyages between the islands

of Japan into the Pacific Ocean

Tensions between China and dia, the world’s two most-populousnations, have intensified, particu-larly along their disputed Himalayanborder India has grown increasinglyconcerned about China’s presence inthe Indian Ocean region, with Bei-jing funding the construction ofports in Pakistan and Sri Lanka

In-India is spending about $30 lion a year to buy new aircraft, mis-siles, planes and other defenseequipment to modernize the Soviet-vintage equipment of its armedforces One key defense project isthe potential acquisition of 126 Ra-fale fighter jets from Dassault Avia-tion S.A of France for an estimatedvalue of more than $10 billion

Drug Use Eyed in Death of Navy SEALs

Drug use is suspected in thedeaths of two former U.S NavySEALs who worked as securityguards on a container ship moored

in the Seychelles, police said lateTuesday

The two men, identified as frey Reynolds and Mark Kennedy,both 44 years old, were found deadlast week in their cabin on theMaersk Alabama, operated by Dan-ish container-shipping giant MaerskLine, a unit of A.P Moller-MaerskA/S

Jef-The Seychelles police statementsaid an autopsy on the bodies of thetwo men concluded that they died of

“respiratory failure with suspicion

of a heart attack.”

“The police preliminary gation report includes suspicion ofdrug use, as indicated by the pres-ence of a syringe and traces of her-oin which were found in the cabin,”

investi-and fluid samples from the men’sbodies are being sent to Mauritiusfor forensic analysis, the statementsaid

Mr Reynolds and Mr Kennedyworked for Virginia-based maritimesecurity firm Trident Group, formed

in 2000 by former SEALs to provideprotection against pirate attacks

“Trident Group continues tomonitor the situation with our fallenoperators Assumptions are being

reported about this situation out the benefit of any fact-based in-formation,” Trident Group Chief Ex-ecutive Thomas Rothrauff said in astatement on the company’s website

with-The U.S.-flagged Maersk Alabamaoperates off the east coast of Africa,one of the highest-risk areas for pi-rate attacks

The ship was seized by Somalipirates in the same waters in 2009

Her then-captain, Richard Phillips,was taken hostage on a lifeboat andwas rescued three days later, whenU.S Navy snipers shot dead thethree pirates holding him

The 2013 film “Captain Phillips,”

starring Tom Hanks as the captain,

is based on the incident

The opposition said some

of the dead were civilians

trying to escape a siege.

China Lights Electric-Car Spark

China and global companies aretaking new steps to fulfill the coun-try’s ambitions for electric cars,which so far have exceeded Bei-jing’s grasp

Chinese auto makers BYD Co.

and BAIC Motor Co on Wednesday

won approval from Beijing’s pal government to sell electric cars

munici-in the city Shares of BYD, which ispartially backed by Warren Buffett,jumped 9.6% in Hong Kong BYD’sall-electric e6 crossover has beensold mainly in the southern Chinesecity of Shenzhen, where the com-pany is based Most of the vehiclesoperate as taxicabs and buses

Meanwhile, Switzerland’s ABB

Ltd said it would make and markethome, wall-mounted, electric-carchargers in China, part of an effort

to address a lack of charging tions and other infrastructure nec-essary if electric cars are to hitChina’s roads in serious numbers

sta-Chunyuan Gu, ABB’s China man and president, said he believeddemand for cars and chargingequipment will take off after a slowstart “Either you believe or youdon’t believe,” he said “What’s dif-ficult to predict is how fast the vol-ume will come.”

chair-China’s government wants

500,000 hybrid and electric cles on its roads by next year andfive million by 2020 But onlyaround 17,600 such vehicles werepurchased in China last year, in-cluding hybrid and pure-electriccars and buses It is likely that nomore than 50,000 such vehicles are

vehi-in use vehi-in Chvehi-ina

China long has said it wanted tolead the world in developing andselling electric cars, in part to re-duce its reliance on oil and improveair quality Big sections of Chinaagain were covered by thick, pol-luted air this week, in large part be-cause of automotive emissions

Global automotive companieshave been drawn to China’s vast po-tential; the country recorded about

22 million auto sales last year

Elec-tric-car maker Tesla Motors Inc.

last month said it would sell itsModel S sedan in China startingaround $120,000

Tesla is aiming its car at the ury segment But Mr Gu said gov-ernment incentives were needed ifBeijing wanted to reach the massmarket China in September rolledout an incentive program underwhich buyers of electric cars canreceive up to 60,000 yuan, or about

lux-$9,800, in subsidies Buyers of tain gasoline-electric hybrids canget up to 35,000 yuan Some localgovernments also offer incentives

cer-Building a suitable charging frastructure also is a must if elec-

in-trical vehicles are to take off, Mr

Gu said ABB this month announced

a six-year agreement to supplyhome, wall-mounted fast chargersfor Denza cars Manufactured by ajoint venture of BYD and Germany’s

Daimler AG, the Denza will go on

sale this year

Denza didn’t respond to quests for comment

re-“I am very confident that onceChina overcomes all these hurdles,the volumes will increase fasterthan we can project,” Mr Gu said

ABB reported a “solid

perform-ance” in China for last year, despite

“a mixed business climate and ket environment.” China revenuerose 7.7% to $5.6 billion as the com-pany benefited from the country’sgreater emphasis on stable eco-nomic growth and low-carbon, sus-tainable development ABB invested

mar-$136 million in China last year

BYD this week also received proval to sell its plug-in hybrid, theQin, in Shanghai as part of a trial

ap-The company declined to providedetails about plans for rolling outits vehicles in Beijing and Shanghai

BAIC couldn’t be reached forcomment

BYD was a pioneer in developingelectric cars in China, but hasstruggled to win international rec-ognition for its green-vehicle tech-nology

A Beijing government officialsaid the city would provide a sub-sidy for the sale of BYD’s e6 carseven though they are built in Shen-zhen The official said Beijingaimed to have in place around 1,000charging units in some 100 stationsthroughout the city by year-end, upfrom 20 stations today

“It was previously mission possible for ordinary consumers touse BYD’s electric cars in Beijingbecause of the many approvals thatneeded to be got,” said LepingHuang, an analyst at Nomura

im-—Rose Yu in Shanghai contributed to this article.

By Colum Murphy

in Shanghai and

Joanne Chiu in Hong Kong

Japan Post Outlines Plan on Way to IPO

TOKYO—Japan’s postal system,which runs one of the world’s big-gest banks as well as Japan’s largestinsurer, announced a nearly $13 bil-lion investment plan Wednesdaythat it said would pave the way for

a public stock offering next year

A share offering of Japan Post

Group, which government officials

have said could raise some $40 lion, would be one of the largest ever

bil-But much remains uncertain, ing whether the publicly traded com-pany could engage in bread-and-but-ter financial businesses such ascorporate and mortgage lending

includ-To entice global investors, JapanPost needs to demonstrate how itwould pivot away from its more thancenturylong history as a rule-boundgovernment entity, said Ed Rogers,chief executive officer of the Tokyo-based Rogers Investment Advisors

“The prospect of a Japan Post[initial public offering] immediatelyposes the question of what kind ofmandate or mission such a priva-tized company with trillions in as-sets would have,” Mr Rogers said

“Certainly, as an entity responsible

to shareholders, it cannot simply ford to let the cash sit idle.”

af-Japan Post Chief Executive TaizoNishimuro said Wednesday that hewanted to be ready for a listing byMarch 2015, and suggested that thegovernment could set the frame-work as soon as this summer Offi-cials have said they envisioned list-ing two-thirds of the group

“We haven’t agreed on anything,including whether only Japan PostHoldings will be listing or its two fi-nancial units will also be listing,”

Mr Nishimuro said as Japan Postannounced its first medium-termbusiness plan

The business plan included onlymodest steps into new areas JapanPost said it would look at expanding

its e-commerce activities and oping more commercial real estate

devel-to take advantage of its vast wide landholdings

nation-Much of the nearly $13 billion ininvestment over the next threeyears is aimed at polishing up JapanPost’s basic operations and facili-ties, which often lag behind those ofprivate competitors Nearly $5 bil-lion is earmarked for upgrading thegroup’s computer systems

The huge investment will likelygive Japan’s economy a boost, but it

is also feeding worries among vate-sector banks and insurers Theycite the potential for unfair compe-tition from an institution with24,000 outlets in all corners of Ja-pan Last year, the American Cham-ber of Commerce in Japan ex-pressed concern about Japan Post’sbank and insurance units expandingtheir presence

pri-Some companies stand to gainfrom a more business-oriented Ja-pan Post In July, American FamilyLife Assurance Co., the companyknown for the Aflac duck, formed an

alliance with the Japanese group tosell cancer insurance at post offices

To put Japan Post’s size in spective, on the list of Fortune Global

per-500 companies, it is No 13 in revenuebehind nine oil or resource compa-nies, two auto makers and Wal-MartStores Inc In Japan, only Toyota Mo-tor Corp is larger by revenue

Japan Post has improved its ance sheet with the help of costcuts, recording a net profit of nearly

bal-$4 billion in the nine-month periodended in December However, thatprofit came overwhelmingly from itsbanking business, while its postal-service and insurance business wereonly slightly in the black

Japan has privatized several mer state-owned monopolies in re-cent decades, including the staterailway and, telephone company

for-The publicly listed descendants ofthose monopolies generally haveheld their own, giving the govern-ment confidence to move aheadwith a listing of Japan Post to raisefunds for reconstruction of areas hit

by the 2011 earthquake and tsunami

Government officials offered the

$40 billion estimate for the JapanPost IPO size last year If it is thatsize, the listing would be larger thanthe current record holder for an IPO,

the 2010 offering of Agricultural

Bank of China Ltd at $22.1 billion.

Any offering of that size isbound to get global investors’ atten-tion, but getting their money is an-other matter Many in the marketsay Japan Post’s allure will depend

on its ability to free itself from strictions long imposed by its state-owned status

re-The postal bank is barred frommaking major loans and can’t acceptdeposits of more than ¥10 million, alittle less than $100,000 Japan Posthas plowed most of its depositors’

funds—70% of its nearly $3 trillion

in assets—into Japanese governmentbonds, making it the largest creditor

of the Japanese government

“Unless Japan Post announces amore-specific business plan beforethe IPO, it may be difficult to attractinvestors next year,” said MitsushigeAkino, chief fund manager at Ichi-yoshi Asset Management

In an interview last October, Mr

Nishimuro, the Japan Post chief ecutive, said the group would havemore freedom to enter new busi-nesses if the government reducedits share below 50% “I have to saythat’s our main purpose for a list-ing,” he said

ex-But the 78-yold CEO, who lier led Toshiba Corp and the TokyoStock Exchange, acknowledged thatthe company still had a public role toplay and said he wouldn’t close un-profitable post offices He said thecompany had a duty to maintainservices that people need

ear-Fund managers say that if est in Japan Post from individualand institutional investors flagged,government organizations, includingpublic pension funds, would likelyabsorb a big chunk of shares

15.5 million

17.9 million

Totalpassenger-car sales

1,416

3,038

Electric-only vehiclesPlug-in hybrids

Source: China Association of Automobile Manufacturers

The Wall Street Journal

Japan’s postal system covers the country by motorcycle and truck—not to mention 24,000 outlets Officials have estimated an IPO could raise $40 billion.

BEIJING—China’s largest making province has been addingtwice as much new production ca-pacity as it has shut down, under-scoring a challenge for Beijing’scampaign to reduce overcapacityand air pollution

steel-Official efforts to eliminate moded steel capacity in Hebei prov-ince haven’t been effective so far, a

out-senior official with a unit of Hebei

Iron and Steel Group Ltd., China’s

largest mill, said Wednesday

Up to the end of last year, steelmills in Hebei were adding new ca-pacity at a pace of around 30 milliontons a year, twice the average 15 mil-lion tons of outdated capacity thatthe government wants to shut eachyear until 2017, said Wang Jiguang,marketing director at Hebei Iron andSteel’s sales unit

The central government hasidentified eliminating industrialovercapacity as a priority for thisyear, seeing the problem as a waste-ful drag on growth

Hebei is a proving ground for thecampaign An industrial province thesize of Oklahoma that surrounds thenation’s capital, Hebei accounts for

a quarter of China’s steel and hasbeen in the government’s cross hairsfor contributing to an unruly steelmarket and filthy air Steel-makingcapacity in Hebei was growing even

as Beijing was urging steelmakersnationwide to restrain “the blind ex-pansion of capacity.”

“This target of eliminating 15million tons of outdated capacity ayear, compared to our addition ofnew capacity of 30 million tons ayear, indicates that the speed ofelimination is not quite fast enough

to digest the outdated capacity,” Mr.Wang said

Mr Wang’s remarks, made licly in an apparently unscripted ad-dress to a conference attended byindustry executives from around theworld, reflect an unusual degree ofcandor from an official about thegovernment campaign President XiJinping made an example of Hebeiofficials last fall during a televisedMao-style “self-criticism” session,getting them to admit they had pur-sued growth at the expense of theenvironment and other concerns.China’s steel industry is deeplyentrenched in its economy In Hebeialone, job losses could run as high as200,000 if all state-required cuts arecarried out, according to some ana-lysts’ estimates So far, the localgovernment has used showy displays

pub-of demolishing old steel factories,taking down 6.8 million tons in No-vember and 8.2 million tons in Feb-ruary However, these facilities hadalready stood empty for more than ayear, Mr Wang said

“It’s just the smaller, more dated steel facilities that have beenshut,” Mr Wang said The state-backed China Iron and Steel Associa-tion corroborated Mr Wang’s view

out-in an earlier out-interview

Steel factories have increasinglybecome a target for official ire amidintense pollution Hebei suspendedsteel production this week as itsought to help Beijing roll backheavy smog Mr Wang said the cen-tral and local governments’ efforts

to cut steel capacity would likelysucceed only “in a few years.”

WORLD NEWS Argentina Meltdowns Stick to Schedule

In Buenos Aires these days, a bering theory is making the rounds

so-at coffee houses and backyard asado

grill-outs: Argentina is destined toexperience an economic meltdownabout once per decade, and thereisn’t much anyone here can do aboutit

“We have always had instability,”

said David Gambarin, an affable year-old real-estate broker who stillputs on a suit and goes to his office

90-in downtown Buenos Aires “This ishow we Argentines are.”

Barely a decade after its 2001crash, Argentina is on the verge ofturmoil again The peso plunged inJanuary, and economists say that amix of inflation and recession is likely

to follow Already, butchers and storeowners are jacking up prices To holdinflation back, President CristinaKirchner is restricting access to dol-lars and threatening shopkeeperswith closure, but economists notethat such tactics failed in the past

Like many here, Mr Gambarin isgreeting the tumult with resigna-tion A Russian immigrant who ar-rived in Buenos Aires as a boy, hehas lived through five coups Histwo children have weathered a dic-tatorship, bank collapses and infla-tion rates that surged so quickly inthe 1980s that shoppers ran to thecheckout lines to buy items beforethey were marked up again Thecurrent downturn will be the secondcrisis in the adult lives of Mr Gam-barin’s four grandchildren

“We seem to do everything sible to fulfill the prophecy ofnever-ending crisis,” said Mr Gam-barin’s 64-year-old son-in-law, Rod-olfo Cohan, over coffee at his apart-ment in the middle-class Belgranoneighborhood

pos-In the 1940s, President JuanPerón closed the Argentine economy

to trade with the rest of the world

In the 1960s, the country enduredstagnation, inflation and militarycoups In 1975, 1981 and 1989, failed

economic plans led the currency toplunge The last crisis hit in 2001,when Argentina defaulted on about

$100 billion in sovereign bonds Thedefault—the largest ever at thetime—brought down Argentina’sbanks, currency and government

Economists classify Argentina as

an “emerging market,” but its omy, which depends on commoditiessuch as beef and soy, has been in de-cline for a century In 1910, Argentinawas among the world’s 10 wealthiestcountries; today, its per capita income

econ-is less than half that of the U.S

There is little debate about thecause of Argentina’s serial financialwoes “Bad government,” says theeconomist Marina Dal Poggetto, apartner at the Estudio Bein consul-tancy in Buenos Aires

For decades, Argentine leadershave overspent during good years

and failed to save for lean ones Toprolong the good times, they haveborrowed heavily or simply printedmoney What followed were bouts ofinflation, currency crashes, bankcollapses…and worse

The wall behind Ms Dal getto’s desk is covered with pictureframes containing row after row ofArgentine currencies discarded invarious failed economic plans Ar-gentina has chopped 13 zeros fromits bank notes since 1969 In 1991,for example, the 10,000 austral notewas replaced by the one peso note,worth $1 Today, that same one pesonote is worth 9 cents

Pog-Well-to-do and middle-class gentines have a long history of sav-ing in dollars in case their own cur-rency crashes The governmentestimates that Argentines have $160billion stashed offshore or in home

Ar-safes Illegal dollar sellers, called bolitos, are everywhere in Buenos

ar-Aires today

For the poorest Argentines, ses can mean calamity With littleaccess to dollars, the poor watchhelplessly as inflation wipes out thevalue of their wages, leaving themunable to buy food Mobs looted su-permarkets across Argentina in thecrises of 1989 and 2001

cri-Mr Gambarin says that he usedhis wits to build a real-estate busi-ness during a lifetime of turbulence,starting his career around the time

of Mr Perón’s rise Mr Gambarin’sdaughter, Nilta, and his son-in-law,Rodolfo Cohan, began their marriedlives at the start of one of Argen-tina’s darkest eras, the “Dirty War”

from 1976 to 1983, when some10,000 to 30,000 people were killed,mainly by state security services

The Cohans’ first child was born

in 1975, the year of the “Rodrigazo”—

a jarring currency devaluation namedafter Economy Minister Celestino Ro-drigo The policy wiped out savingsand wages and produced 35% infla-tion a month Their second childcame the next year, as military offic-ers ousted the “Rodrigazo” govern-ment and imposed a murderous dic-tatorship Their third child camealong in 1982, the year the militarywent to war with the U.K over theFalkland Islands—largely seen as abid to distract Argentines from theircollapsing economy

Now a new generation is coming

of age in turmoil “Crisis is in theArgentine DNA,” says Mr Cohan’sthird child, Luciano Cohan

It is also in the lesson plans.When Luciano studied economics atthe University of Buenos Aires, one

of the school’s top professors wasAxel Kicillof, an economist withlamb-chop sideburns whose disser-tation was a Marxist take on JohnMaynard Keynes Today, Mr Kicillof

is Argentina’s economy minister—the mind behind its nationalizationsand its price, import and currencycontrols

Luciano said that he no longerbelieves Mr Kicillof’s theories—orthe government’s statistics Argen-tina’s government says that the infla-tion rate was 10.9% in 2013 An econ-omist himself now, he capturedthousands of prices from online re-tailers to come up with his own esti-mate: around 29%

In the best case, inflation willrise to 35% to 40% this year, and theeconomy will stagnate, Lucianosays “The worst-case scenario isdifficult to put into words,” he said

Mr Gambarin, the family’s year-old patriarch, says that he al-ready knows what will happen

90-“Nothing Nothing will happen Weare used to this Every few years,things get wiped out Eventuallysomeone else will come in promising

to fix Argentina But everything willremain the same.”

Prime Minister Tony Abbott nounced a 320 million Australiandollars (US$288.6 million) drought-relief package on Wednesday, themajority of which will be allocated

an-as loans to farms The rest of themoney will go toward emergencywater infrastructure programs, pestmanagement and social and mental-health services to help farmers copewith the effects of the drought

The National Farmers’ tion estimates that the country’s ag-ricultural sector contributes toabout 12% of Australia’s GDP

Federa-An area larger than France andGermany combined has been classi-fied as drought-stricken by the gov-ernment The Australian Bureau ofAgricultural and Resource Econom-ics and Sciences warned this monththat the country’s summer cropcould fall by 25% to 4 million tons in2013-14, with Queensland and north-ern New South Wales hit particu-larly hard Meanwhile, cattle farm-

ers have been destroying livestock

as prices have collapsed fromaround A$500 for a calf to A$200.The decision on the package bythe government to give financial as-sistance to farmers underscores thedivisions in the Liberal-National co-alition on farms policy AgricultureMinister Barnaby Joyce is deputyleader of the junior National Party,which is seen as favorable towardproviding support for farmers, butthe ruling pro-business Liberal Partyhas been wary of promising moresubsidies and handouts

During a drought between 2001and 2009, the Australian govern-ment gave about A$4.5 billion in aid

to the agricultural industry Droughtwas declared again in parts of in-land Queensland in April last year.However, Treasurer Joe Hockeysaid at the beginning of this monththat farmers should not expect amultibillion-dollar rescue package,

as speculation started to mountover whether the government wasconsidering a A$7 billion rescuepackage to relieve farmers’ debts.Wednesday’s announcementcomes as support for Mr Abbott’sgovernment has slipped with pollsshowing support for the oppositionLabor Party is increasing

B Y I SABELLA S TEGER

Hong Kong Ex-Editor Stabbed

The former editor in chief ofMing Pao, a prominent Hong Kongnewspaper, was stabbed Wednesdayand has been hospitalized in criticalcondition, police said

The ouster of Kevin Lau in ary had sparked protests by many ofthe paper’s staffers The assaultprompted an outcry from local jour-nalist groups, with one lumping it inwith other threats against journal-ists in the city in recent months

Janu-Hong Kong’s chief executive, ung Chun-ying, said he was gravelyconcerned about the assault

Le-Current Ming Pao chief editorCheung Kin-bor said that Mr Lauwas attacked by a knife-wielding as-sailant on Tai Hong Street in thecity’s Sai Wan Ho neighborhood

“We still know nothing about thedetails,” said Mr Cheung “We areawaiting reports from the doctorand the police.”

Police said that they received acall around 10:20 a.m from the vic-tim Mr Lau, 49 years old, told themhis assailant was wearing a helmetand had attacked him with a knifebefore jumping onto a motorcycledriven by another person and speed-ing away

The motive behind the attack mained unclear Attempts to reach

re-Mr Lau weren’t successful

Some staff members had manded an explanation for MingPao’s decision to replace Mr Lau

de-Ming Pao has said his removal won’tchange the paper’s editorial direc-tion

Nearly 300 former Ming Paostaffers have also signed a petitionexpressing their concern about po-tential threats to Hong Kong’s pressfreedom

Mr Lau’s removal was one factorbehind a weekend rally to support

press freedom in the former Britishcolony, which organizers said at-tracted 6,000 people and police saiddrew some 2,200 This month, theCommittee to Protect Journalistsalso warned that journalists face in-creased self-censorship threats asChina’s economic sway grows

Though Hong Kong returned toChinese control in 1997, it retains itsown independent political, economicand judicial systems under the “onecountry, two systems” principle gov-erning its relationship with Beijing

As China’s slowing economy dents

sales growth of everything from

per-sonal computers to Oreo cookies,

some companies are finding growth

in a surprising place: chewing gum

Gum is growing at double-digit

rates in China, igniting a turf battle

for China’s chewers Snack food

maker Mondelez International Inc.

entered the fray in 2012 with a

sugar-free brand and a high-profile

campaign with a Taiwanese

celeb-rity Meanwhile, market leaders

Wil-liam Wrigley Jr., a division of Mars

Inc., and Korea’s Orion Group have

expanded distribution and offered

flavors such as grapefruit, cucumber

and tea to encourage China’s

swell-ing middle class to chew more

Rising disposable incomes in

China are increasingly making gum

a mainstay in the pockets of young

adults, the key gum-chewing

seg-ment But companies’ aggressive

marketing of gum as a way to

im-prove oral health, increase

concen-tration and lower stress levels is

also winning over consumers In the

last two years, ad spending on

chewing gum has more than

dou-bled to 7.55 billion yuan ($1.24

bil-lion), before factoring in discounts

given on advertising rates,

accord-ing to Nielsen-CCData

Qu Zhu, 30 years old, a Beijing

investment banker, typically buys a

40-piece container of chewing gum

each month “Chinese food has so

much garlic,” he said “I need to

freshen my breath after eating.”

In a TV commercial in China for

Extra gum, a man eating crispy fried

noodles at a restaurant complains to

the female chef that it could break

his teeth She tells him his teeth

aren’t good, and offers him a pack

of Extra, which Wrigley promotes as

“caring about teeth, caring evenmore about you.”

While nearly all sales of aged food have been affected byChina’s weakening economy, gum isstill seeing “dynamic growth” due tomanufacturer promotions and risingconsumer demand, according to Eu-romonitor analyst Vera Wang Wei

pack-Gum sales grew nearly 14% inChina last year to $2.8 billion,nearly double the level of 2009

Still, annual growth has moderatedsince a recent 2011 peak of 20%

Even as China’s economy slows,

“my expectation is that gum will bequite resilient,” said TorstenStocker, a partner at A.T Kearney, a

consulting firm

Gum isn’t popular with everyone

Zhang Lu, a 22-year-old student inBeijing, said she’s afraid that chew-ing gum will build up her jaw mus-cles and make her face look fat

“You know Chinese girls care abouttheir shapes,” she said

Michael Yeung, president ofWrigley Asia Pacific, said “there’s

no science” behind this concern

A rapidly expanding market forchewing gum in China comes even

as the treat’s sales have weakened

or even declined in mature Westernmarkets, despite the introduction ofnewfangled products such as caf-

feinated gum

The double-digit growth in China

“is one of the reasons we launchedthere,” Mondelez Chief ExecutiveIrene Rosenfeld told analysts in No-

vember

Mondelez, after launching itsStride brand in China in the thirdquarter of 2012, hired Taiwanese ce-lebrity Ke Zhen Dong as its spokes-man and sponsored the popular Chi-

nese talent show “Super Boy.”

Mondelez also installed over100,000 checkout counter displays

for the gum in 10 months

For the maker of Oreos, gum hasbeen a “phenomenal success,” gen-erating about $100 million in annual

sales, said Ms Rosenfeld

Confectionery company Orionsaid it posted sales of more than 1trillion won ($932 million) for thefirst time in China in 2012—andcontinued its strong growth lastyear—on the back of its top-sellingproduct there: Xylitol chewing gum

Orion, which also sells vored treat Yegam and Choco Piesnacks in China, first entered themarket in 2003 and has been grow-ing at a 30% annual rate in the coun-try, it said in its 2012 annual report

potato-fla-Because gum consumption is stilllow in China compared with othercountries, companies see “large po-tential” for growth, said Cherry Dai,

a project manager at SmithStreet, aconsulting firm “Girls want to eat

gum to stay slim,” said Ms Dai

Last year, the average Chineseconsumer chewed $1.80 worth of

gum By comparison, Britons chewedmore than four times this amount,Americans more than six times andJapanese 6.5 times, according to Eu-

romonitor

The biggest challenge, gum ers say, is to convert more consum-ers, especially those in lower-tiercities, into habitual gum chewers

mak-“Gum is an impulse-purchaseitem, and if you don’t see it, youdon’t buy it,” said Mr Yeung ofWrigley, which now sells gum inmore than 2.1 million stores in China,

up from 1.8 million in 2008 “Bymaking it more available in cities, itwill help us grow in economically

pull-ing out all the stops to build its own

version of Silicon Valley as it

at-tempts to create a startup hub for

Southeast Asia

Excited by deals such as

Face-book Inc.’s $19 billion agreement

last week to buy messaging company

WhatsApp Inc., Singapore’s policy

makers and technology

entrepre-neurs are betting that one day a tech

giant could swoop down to grab one

of its own homegrown startups

Ven-ture-capital tech investments in

Sin-gapore last year outstripped those in

Japan, South Korea and Hong Kong

The city state, with its population

of just 5.4 million, isn’t quite Silicon

Valley Singapore has yet to produce

anything like a Google Inc or

Face-book, much less a service like China’s

messaging app WeChat, with 272

million monthly active users It has

had mixed success in trying to kick

start innovation in various industries

including biotechnology, media and

entertainment

Still, investors say the

technol-ogy ecosystem here is becoming

more active One concern is that

in-sufficient entrepreneurial spirit

among young Singaporeans and thegovernment’s financial largessecould inadvertently enable somestartups to limp along on state

funds, some analysts say

In recent years, the Singaporegovernment has been trying to fundlocal technological innovation by in-vesting some 100 million Singaporedollars, or roughly US$79 million,for early-stage startups as part ofthe S$16 billion it has pledged forscientific research and development

Well-known U.S venture-capital

firms such as Andreessen Horowitz

have funded local startups, including

video site Viki, which Japanese line retailer Rakuten Inc bought for

on-$200 million in September Rakutenalso agreed earlier this month to ac-quire Cyprus-based messaging app

Viber Media Inc.

Another Singaporean tech pany attracting investors is RedMart,

com-an online grocery-delivery servicefounded in 2011 that has raised morethan $10 million from investors in-cluding Facebook co-founder and Sin-

gapore resident Eduardo Saverin

One hotspot in Singapore’s ling startup scene is a seven-story,renovated factory building known asBlock 71, west of downtown On a re-

fledg-cent Friday evening, a few dozentechnology entrepreneurs gathered

to drink beer, nibble on cheese andalmonds, and discuss their startups

Hugh Mason, a 47-year-old ish entrepreneur, says there areabout 100 startups and more than $1billion of investment under manage-

Brit-ment in the building

In 2010, Mr Mason and hisfriend, 38-year-old Singapore nativeand anti-spam pioneer Meng Weng

Wong, co-founded Singapore’s

Joy-ful Frog Digital Incubator, which

hosts frequent gatherings at itsheadquarters in Block 71

Mr Wong, decked out in a piece suit and carrying the com-pany’s green stuffed frog mascotSmoochy on his shoulder, movedabout the room, introducing out-of-town visitors to regular attendees Asign read, “Silicon Valley isn’t a

three-place It’s an idea.”

Venture capital invested in porean tech companies by funds lastyear totaled $1.71 billion While that

Singa-is behind China’s $3.46 billion, it Singa-isahead of Japan, South Korea andHong Kong, according to data fromAsian Venture Capital Journal ofHong Kong PricewaterhouseCoopersLLP and the National Venture Capi-tal Association put venture fundingfor software companies alone in theU.S at $11 billion last year Still,funding devoted to Singapore’s techcompanies, including from the gov-ernment, skyrocketed last year toaccount for 19% of funding forAsia—up from just $27.3 million, or

0.3%, in 2011

Brad Templeton, a Silicon ley-based Internet pioneer whoconsults with Google on self-drivingcars, said while Singapore’s techscene seems more active now than

Val-it was in previous years, he addedthat “too much government canhurt a startup community rather

than help it.”

In its policies, Singapore’s ernment has attempted to mimic Is-rael, which has developed a robusttechnology industry over the years

gov-One government program designed

to assist early-stage startups is the

“Technology Incubation Scheme,”

which began in 2010 Under thatprogram, the government co-in-vests as much as 85% of capital inselect startups, capped at theequivalent of S$500,000 Technol-ogy incubators—organizations thatprovide mentoring and physicalspace—pitch in the remaining 15%

and are allowed to buy out the ernment’s stake after three years

gov-There are now 15 incubators andmore than 100 startups participat-

ing in the program

“In the past, I might have fundedtwo or three startups a year NowI’ve been doing one a month,” saidLeslie Loh, who heads Singaporean

venture-capital firm Red Dot

Ven-tures, which was launched in 2011.

Douglas Abrams, who has worked

in Singapore’s technology capital industry since 2000, saidthere has been a marked increase inthe value of Singaporean “exits”—

venture-when startups are acquired or sellstock to the public Mr Abrams, nowchief executive of technology ven-ture-capital firm Expara, said thatlast year some 20 companies had ex-its totaling more than S$400 mil-lion, compared with about S$50 mil-

lion in previous years

The Wall Street Journal

1 billion yuan = $164 million

Spending on gum marketing in China,

in billions of yuan*

*Ad spending for TV, newspaper, magazine and radio; Figures exclude discounts given on advertising rates

8

0246

’09

2008 ’10 ’11 ’12 ’13

7.5 billion

The government has been trying to fund local

technological innovation.

Information Harvesting

Sows the Seeds of Mistrust

Some Farmers Worry

Data Might Be Sold

To Traders, Wind Up

In the Hands of Rivals

Or Aid Agricultural Firms

Big agricultural companies say the next

revolution on the farm will come fromfeeding data gathered by tractors andother machinery into computers that tellfarmers how to increase their output ofcrops like corn and soybeans

Monsanto Co., DuPont Co and other

companies are racing to roll out tive planting” technology to farmers acrossthe U.S who know from years of experiencethat tiny adjustments in planting depth orthe distance between crop rows can make abig difference in revenue at harvest time

“prescrip-Some farmers are leery about the newtechnology They worry their data might besold to commodities traders, wind up in thehands of rival farmers or give more leverage

to giant seed companies that are among themost enthusiastic sellers of data-drivenplanting advice The companies vow not to

misuse the information

“There’s a lot of value to that tion,” says Brooks Hurst, 46 years old, whoworks 2,400 hectares with his father andbrothers near Tarkio, Mo “I’m afraid, asfarmers, we are not going to be the onesreaping the benefit.”

informa-Many tractors and combines already areguided by Global Positioning System satel-lites that plant ever-straighter rows whilefarmers, freed from steering, monitor prog-ress on iPads and other tablet computersnow common in tractor cabs

The same machinery collects data oncrops and soil But many farmers have hap-hazardly managed the information, scattered

in piles of paperwork in their offices orstored on thumb drives clattering in pickup-truck ashtrays The data often were turnedover by hand for piecemeal analysis

Sellers of prescriptive-planting ogy want to accelerate, streamline and com-

technol-bine all those data with their highly detailedrecords on historic weather patterns, topog-raphy and crop performance

Algorithms and human experts crunch allthe data and can zap advice directly to farm-ers and their machines Supporters say thepush could be as important as the develop-ment of mechanized tractors in the first half

of the 20th century and the rise of cally modified seeds in the 1990s

geneti-The world’s biggest seed company, santo, estimates that data-driven plantingadvice to farmers could increase world-widecrop production by about $20 billion a year,

Mon-or about one-third the value of last year’sU.S corn crop

The technology could help improve theaverage corn harvest to more than 200 bush-els an acre from the current 160 bushels,companies say Such a gain would generate

an extra $182 an acre in revenue for farmers,based on recent prices Iowa corn farmersgot about $759 an acre last year One bushelequals more than 35 liters

So far, farmers who use prescriptiveplanting have seen yields climb by a moremodest five to 10 bushels an acre, the com-panies say

The gains are likely to accelerate as panies gather information from more farm-ers Monsanto has been testing a technology-powered planting service called FieldScriptswith farmers since 2010 and is starting topitch it this year in Illinois, Iowa, Minnesotaand Indiana, four of the biggest corn-produc-ing states Farmers pay the company $10 anacre

com-No one knows how much is being spent todevelop and market high-tech planting serv-ices, but 20% of Monsanto’s projectedgrowth in per-share earnings by 2018 couldcome from FieldScripts and other technol-ogy-fueled improvements, estimates MichaelCox, co-director of investment research atsecurities firm Piper Jaffray Cos

“I see it as another potential tion of the company,” says Robert Fraley,chief technology officer for Monsanto, based

transforma-in St Louis He helped develop Monsanto’sfirst genetically modified seeds in the early1980s

In November, Monsanto paid $930 million

to acquire Climate Corp., a mining company in San Francisco launched

weather-data-by former Google Inc executives tural cooperative Land O’Lakes Inc boughtsatellite-imaging specialist Geosys in Decem-ber for an undisclosed amount

Agricul-DuPont announced this month a ration with a weather-and-market analysisfirm, DTN/The Progressive Farmer, to pro-vide real-time climate and market informa-tion to DuPont’s data-services users

collabo-Late last year, Deere & Co agreed to

beam data from the Moline, Ill., company’sgreen tractors, combines and other machin-ery to computer servers where DuPont and

Dow Chemical Co can formulate specialized

seed-planting recommendations

“When a farmer buys a combine or buys

a tractor, they’ve got all these ways to lect information,” says DuPont marketingmanager Joe Foresman The Wilmington,Del., company’s Pioneer unit has been sift-ing through farm-level data for about a de-cade, but now “this space is starting to ma-ture.”

col-DuPont and Monsanto are excited abouttheir data-driven services, partly becausethey can be rolled out to farmers muchfaster than new seeds, which often must en-dure a decade of development and regulatoryreview

Many farmers who have tried prescriptiveplanting are enthusiastic about the results

*Doesn’t add up to 100% due to rounding †Company was later acquired Sources: Context Network (market share); Monsanto (field analysis) The Wall Street Journal

The two biggest corn-seed companies got

even bigger in the past decade…

Bumper Crop

…and now Monsanto, DuPont and others are pitching

‘prescriptive planting’ services to increase crops.

Corn-seed

1 The farmer provides field

boundaries, historic crop yields,soil conditions and other data to

a company

2 The company analyzes the

data and its own informationabout seed performance indifferent areas and soil types

3 The company sends a

computer file withrecommendations back to thefarmer, who uploads it into aplanter

4 The farmer's equipment then

plants based upon therecommendations The companymonitors weather and otherfactors, advising farmers on how

to manage crops as they grow

Circled areas: Lower number of seeds

per acre recommended

Shaded areas (uncircled): Portions of

the field that can grow more corn andcan take more seeds per acre

recognized nutrients in soil on a patch of land previously used as a cattle feedlot.

Mr Nelson steps down from the cab

of his tractorcarrying the iPad that he uses to plan and implement his corn and soybean plantings on his farm

IN DEPTH

Rolls-Royce Holdings Preps New Jet Engines

LONDON—Rolls-Royce Holdings

PLC on Tuesday unveiled details ofits next generation of engine designs,which it hopes will be used to powerlong-range commercial aircraft for

Airbus Group NV and Boeing Co.

The London-based engine maker

is turning to geared-turbofan nology for the new engines They aredesigned to be more efficient thanRolls-Royce’s most recent turbine en-

tech-gine, the Trent XWB Rival Pratt &

Whitney, a unit of U.S.-based United Technologies Corp., pioneered the

technology

The first new engine, called theAdvance, is expected to be ready bythe end of the decade; the other, theUltraFan, is to be ready by 2025 TheUltraFan is meant to build on the Ad-vance and offer about 10% better fuelconsumption and emissions than theTrent XWB

Rolls-Royce is the world’s largest maker of commercial and mil-itary jet engines after General Elec-tric Co., the exclusive supplier forBoeing’s coming twin-engine 777X

second-That jet is due to enter service in

2020 Rolls-Royce also competeswith Pratt & Whitney

Rolls-Royce’s Trent XWB is the

only engine used for the long-rangeAirbus A350, which is scheduled toenter commercial service this year

Airbus Group NV’s chief executive,

Tom Enders, said it was interestingthat Rolls-Royce had announcedplans for the new engines

“The pacemaker so far has ways been the airframe manufac-turer,” Mr Enders said during an in-

al-terview after presenting Airbus’sfull-year earnings in Toulouse,France “We haven’t made a decision

on re-engining any long-range craft yet.”

air-Rolls-Royce shifted away from themarket for smaller engines thatpower narrow-body jets to focus onlong-range engines for wide-bodiedaircraft such as Boeing’s 787 Dream-liner and Airbus’s A380 superjumbo,along with the A350

The move followed the ending of

a joint venture with Pratt & Whitneyand a decision not to participate inthe Airbus A320neo (for “new engineoption”) modernization project

Industry insiders and analystshave suggested that Rolls-Royce’smove away from the narrow-body jetmarket was shortsighted as demandfor the short-to-medium-haul planeslike the Airbus A320 family and theBoeing 737 series has triggered in-creased rates in production fromboth manufacturers

Mr Enders said that John Rose,the predecessor of Rolls-Royce CEOJohn Rishton, “effectively managedthem out of the single-aisle businessbecause he didn’t assess the situa-tion and our appetite for theA320neo correctly.”

Rolls-Royce said Tuesday it hadmoved away from but “not out” ofthe market and if an opportunitycame along to develop a new smallerengine, it would seriously consider it

“But we don’t see that happeninguntil well into the next decade,” aspokesman for Rolls-Royce said

The engine company has longbeen separate from Rolls-Royce Mo-tor Cars Ltd., now a unit of BMW AG

—David Pearson contributed to this article.

producer United Co Rusal PLC

ac-cepted Indonesia’s controversialmove to restrict the export of min-eral ores and said it would build arefinery to comply with the coun-try’s new laws

The laws have raised concernsamong global mineral competitors

But Rusal Chief Executive Oleg paska said Indonesia’s stable econ-omy would enable the country tomake the transition from mining tohigher-value processing Rusal is theworld’s largest aluminum producer

Deri-“I understand the government isnow facing pressures, but I truly be-lieve this law is a win-win and bene-ficial in the long run for the coun-try,” Mr Deripaska said

In addition to the broad port ban, Indonesia is imposing aprogressive export tax for mineralconcentrates—rising each year untilhitting 60% by late 2016—to forcemining companies to refine the con-centrates Coal is excluded from therestriction list

ore-ex-Copper companies

Freeport-Mc-MoRan Copper & Gold Inc., the

big-gest taxpayer in Indonesia, and

Newmont Mining Corp have said

the obligation to process copperwith higher purity levels was eco-nomically unfeasible and view theexport tax on copper concentrates

as a breach of their contracts withthe government

Small domestic mining nies have pressured the government

compa-to relax the rules, citing their lack offinancial resources and the potential

of thousands of lost jobs

Though the export law was sued in 2009, slow implementationled to a belief that the governmentwouldn’t follow through and compa-nies held off on investing in pro-cessing facilities It took effect inJanuary and companies are now re-alizing that the government is seri-ous, Mr Deripaska said

is-“If you introduce the ban andthen revoke it, the second time you

do it, people won’t believe you,”

said Maxim Sokov, the first deputyCEO of En+ Group, Rusal’s single-biggest shareholder

Indonesia is a major producer ofmining commodities such as nickelore, bauxite, tin, copper and thermalcoal The commodity boom in the2000s boosted mining, but smallmargins—particularly for small localmining companies—contributed toland degradation that cost the gov-ernment, Mr Deripaska said

The ban will help pare mental costs as small mining com-panies curb production and sup-port weak aluminum prices in themedium term by lowering global

environ-supply of ores, Mr Deripaska said

He warned that tight supply inthe physical market could pushdelivery premiums, the extra costpaid by buyers to have thealuminum delivered, to more than

$500 a ton by the end of the secondquarter from $400-$450 a toncurrently

The price of aluminum, used initems as diverse as beverage cans,automobiles and aircraft, hoversaround $1,700 a ton That is downfrom about $2,100 a ton a year agoand well below its mid-2008 peak ofnearly $3,500

Mr Deripaska forecast prices foraluminum would rise to $2,500 aton and for alumina to between

$425 and $450 a ton in the next 2.5years, estimating that global de-mand would rise 6% annually in thenext three to four years

That growth rate represents 3.5million tons of additional demandfor aluminum, Mr Deripaska said,part of the reason that Rusal signed

a memorandum of understandingTuesday to create a joint venture

with Indonesian company Arbaya

Energi to develop a processing

fa-cility that will turn bauxite into mina, an intermediary product used

alu-to produce aluminum

Rusal, based in Russia, didn’tprovide a value for the project.Indonesia’s coordinating ministerfor economic affairs, Hatta Rajasa,said the project might represent aninvestment of about $3 billion, withabout half of it for the aluminaplant and another half for support-ing infrastructure, such as roads,ports and power plants in West Kal-imantan province

“We’ll conduct feasibility studies

by the end of this year and afterthat, we can start the project Theconstruction phase usually takesaround 2.5 years,” Mr Deripaskasaid The annual output might reach1.5 million tons of alumina.Indonesia is a country of some17,000 islands and home to morethan 240 million people, but much

of the country is minimallydeveloped “It’s clear that Indonesianeeds industrialization,” Mr.Deripaska said “Domestic aluminumconsumption is about 700,000 tons

a year In 10 years, it can go to 2.5million tons We like this market.”Indonesia’s vast reserve ofthermal coal—used to generatesteam to help turn bauxite intoalumina—will make the plantefficient, he said

Rusal in 2007 signed a randum of understanding with

memo-diversified miner Aneka Tambang

to develop a 1.2-million-ton aluminaplant but didn’t follow throughbecause of the global financialcrisis

BUSINESS & FINANCE

Airbus Turns Back to Supporters

aircraft sales But it has welcomedthis funding in the past

Also irking the company, many recently decided to scale backits orders for Eurofighter combatjets—which are made by Airbus,BAE Systems and Italy’s Finmeccan-ica SpA—because of domestic bud-get pressures Mr Enders said thiscontract is being renegotiated withGerman authorities

Ger-Airbus, meanwhile, is moving tospeed production of its A320 single-aisle jet, after posting a strong im-provement in 2013 earnings thanks

to a sharp increase in aircraft eries

deliv-The move to a production rate of

46 A320s a month from 42 starting

in 2016 was dictated by a swelling

Continued from page 17 order backlog for the

short-to-me-dium-haul planes that means thatairlines ordering now are unlikely toget them before the end of the de-cade

Boeing is also ramping up duction of its competing narrow-body 737 family to 47 a month by

pro-2017 from 42 in the first half of 2014

The company has been cautiousabout raising A320 production be-cause it didn’t want to strain itssupply chain when the company ispreparing to launch a re-enginedversion of the plane in 2016 that hasalready captured 2,610 orders

Airbus reported a 21% surge inoperating income before nonrecur-ring items—a key indicator of thecompany’s underlying perform-ance—to €3.6 billion on margin im-

provements at the company’s mercial-aircraft division Its groupoperating profit margin increased to6%, still shy of the 7% to 8% targetset for 2015

com-Revenue was up 5% at €59.3 lion, and net profit rose 22% to

bil-€1.47 billion despite €913 million incharges that included €434 millionagainst newly identified costs forthe A350, which is due to go intoservice by the end of this year

Airbus was cautious on the look for 2014, saying it expects a

out-“moderate” growth in operatingmargin It also said that the A350program remained “challenging”

and that any delays could lead toextra provisions The A350 is at itsmost critical stage as the manufac-turing process gets under way

The geared-turbofan technology is designed

to be more efficient than the company’s most recent turbine engine.

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David Nelson, a farmer near Fort Dodge,Iowa, who began testing FieldScripts aboutthree years ago, says it recognized nutrients

in soil on a patch of land previously used as

a cattle feedlot

The conclusion was based on fertilizermaps and soil samples gathered by Mr Nel-son, 39 Monsanto’s system said the landcould support denser rows of corn, andFieldScripts helped Mr Nelson increase hiscorn harvest last year by 8 to 12 bushels anacre above the 10-year average of 190 bush-els The increase brought Mr Nelson an addi-tional $34 to $51 an acre “We’re pushing ev-ery acre to its maximum potential,” Mr

Nelson adds

Other farmers are reluctant The can Farm Bureau Federation, a trade groupfor farmers, has warned members that seedcompanies touting higher crop yields fromprescriptive planting have a vested interest

Ameri-in persuadAmeri-ing farmers to plant more Thetrade group also says the services mightsteer farmers to buy certain seeds, spraysand equipment for their land

Jerry Demmer, a 61-year-old corn andsoybean farmer near Albert Lea, Minn., isthinking about trying a data-analysis servicebut has “tossed and turned” over who willcontrol the information “It’s our data,” Mr

Demmer says, but “I’m not sure how we’regoing to protect that.”

One reason that suspicions run deepamong some farmers: a surge in seed prices

as the biggest companies piled up more ket share during the past 15 years, largelythrough takeovers Monsanto and DuPontsell about 70% of all corn seed in the U.S

mar-Last year, farmers paid about $118 an acrefor corn seed, up 166% from the inflation-ad-justed cost of $45 an acre in 2005, according

to estimates from Purdue University

Companies say the higher prices reflectthe benefits of using their genetically modi-fied seeds, including bigger crops and resis-tance to insects and weed-killing sprays thathave helped reduce the usage of harsh pesti-cides

Mr Fraley, the technology chief at santo, says it also decides annual seed pricesbased on seed supplies and commoditiesprices Data gathered by FieldScripts aren’tlikely to be “a particularly big” factor in pric-ing decisions, he says “We’ll price our seedthe way we’ve always priced our seed.”

Mon-Mr Foresman of DuPont says the pany doesn’t use data it collects from farm-ers to help set seed prices

com-Battles with seed makers over who trols the seeds produced by genetically mod-ified crops make some farmers even morewary about sharing information with thecompanies

con-In 2012, DuPont hired Agro ProtectionUSA Inc., an intellectual-property-protectionfirm staffed largely by retired law-enforce-ment officers, to watch for signs of farmerswho are saving second-generation seeds

Saving the seeds violates licensing ments farmers sign when they buy seeds

agree-Monsanto has filed lawsuits againstnearly 150 U.S farmers since 1997 for re-planting seeds that contain the company’sproprietary characteristics Last year, thecompany won a U.S Supreme Court victory

in a case against an Indiana farmer who was

75 years old at the time

The most-worried farmers fear thatsomehow rivals could use the data to theirown advantage For example, if nearby farm-ers saw crop-yield information, it might spurunwanted competition to rent farmland,pushing land costs higher

Other farmers fret that Wall Street

trad-ers could use the data to make bets on tures contracts If such bets push futures-contract prices lower early in the growingseason, it might squeeze the profits farmersotherwise could lock in for their crops byselling futures

fu-So far, there are no publicly known ples where a farmer’s prescriptive-plantinginformation was misused Monsanto and Du-Pont officials say the companies have noplans to sell data gathered from farmers

exam-Deere says it gets consent from customersbefore sharing any of their data

Kip Tom, 58, has been testing Monsanto’ssystem on his 8,100-hectare farm near Lees-burg, Ind., for about three years and says he

“would not plant 1 acre without it.” He willstart paying for the service this year But hekeeps a close eye on how data flow from and

to his farm machinery

Last year, Mr Tom unplugged a cable side one of his combines, which he worriedwas capturing details of his planting algo-rithm as he harvested corn Mr Tom says thecombine’s manufacturer “didn’t have any in-volvement in developing that intellectualproperty or that information, so we didn’tbelieve they should have access to that.”

in-Some farmers have discussed aggregatingdata on their own so they could decide whatinformation to sell and at what price Otherfarmers are joining forces with smaller tech-nology companies that are trying to keep ag-ricultural giants from dominating the pre-scriptive-planting business

The owner of one small company, Steve

Cubbage of Prime Meridian LLC, says his

Nevada, Mo., company’s independence fromthe seed, machinery and chemical industry

“adds credibility,” giving farmers an tive with “their overall best interests inmind.”

alterna-About 100 farmers use Prime Meridian’sprecision-seeding service, and Mr Cubbageexpects the number to “increase dramaticallyover the next few years.” The company is de-veloping a system to store farm-by-farm in-formation on a cloud-computing service thatcould give access to seed dealers, financialadvisers and other outsiders approved byfarmers

The Farm Bureau has held internal talksabout whether the trade group should set upits own computer servers as a data store-house, says Mace Thornton, a spokesman forthe trade group No decision has beenreached

Big companies “can help me in the shortterm,” says Brian Dunn, 43, who growswheat, corn and sorghum on 1,000 hectaresnear St John, Kan “But are they going to be

my friend in the long term?” He uses PrimeMeridian’s service

Mr Hurst, the Missouri farmer concernedthat seed companies will keep most of thebenefits of prescriptive planting for them-selves, is testing DuPont’s technology onsome of his land to see what happens

In a move to ease farmers’ worries, santo said last month that it supports indus-trywide standards for managing informationcollected from fields The company aims tobuild a free online data storehouse wherefarmers could upload information rangingfrom crop yields to planting dates Monsantosays it wouldn’t access the data without per-mission from farmers

Mon-Mr Fraley says Monsanto’s farmer veys show that the company is “enjoyingthe highest level of trust among our custom-ers that we’ve ever seen.” Some farmers

sur-“will be early adopters,” he says, while

“some of the folks aren’t going to open upright yet.”

Mr Nelson uses tractor-mounted computers to help make decisions about his plantings High-tech planting advice could boost crop output by about $20 billion a year, Monsanto estimates.

LinkedIn Corp wants to be the

place where workers of the world

unite, but Wall Street isn’t

con-vinced it’s achieving its goals fast

enough

In the past week, the company

has unveiled two initiatives that

show Chief Executive Jeff Weiner’s

ambition to turn the professional

networking site into a global bazaar

for finding work,

recruiting talent

and keeping current

with industry news

LinkedIn saidlast week that its

277 million users can now publish

their own articles on the website, a

move that potentially transforms a

person’s résumé into a portfolio

with essays, work samples, video

clips and employment history—and

fills LinkedIn’s pages with free

con-tent

And on Monday the company

un-veiled a Chinese-language version of

its site With the new site, LinkedIn

aims to bring major Chinese

employ-ers and the country’s 140 million

professionals onto its networking

platform

LinkedIn’s latest quarterly results

showed steady, if slowing, growth

The new initiatives could help the

company stretch the amount of time

users spent on the site, a measure

where it has lagged behind

competi-tors like Twitter and Facebook

Ac-cording to comScore, visitors spent

an average of 23 minutes on

LinkedIn during the month of

Janu-ary, a figure that has been largely

flat over the last year

In an interview, the 44-year-old

CEO discussed the company’s latest

moves, and his vision for a

post-ré-sumé world Edited excerpts:

WSJ: Who are LinkedIn’s potential

users in China?

Mr Weiner: There’s at least three

ways to think about economic

op-portunity in China One is Chinese

citizens—people living in China

looking for economic opportunity

A second are multinational

[cor-porations] looking to expand their

presence and hire the right talent to

do that successfully

And then you’ve got companies

that have had significant success in

China that are expanding and are

looking to identify and hire the right

talent to make that expansion

suc-cessful…It’s not just about

multina-tionals doing business in China butabout successful Chinese companiesexpanding their presence on a global

basis

WSJ: Hiring and recruiting in China

is very different from the U.S.; forexample, in China, recruiters andprofessionals are more open aboutsalaries How will LinkedIn adapt?

Mr Weiner: That’s one of the

rea-sons we’re so excited about DerekShen, who is our newly announcedpresident of LinkedIn China…that’swhat he’s been asked to do here

He’s very much taken a startupmentality and we’re not just going

to be localizing in terms of guage…but also thinking about how

lan-we can best meet the needs of ourmembers in China

WSJ: Is there concern on the part of

the state that Chinese nationalscould use LinkedIn as an organizing

tool?

Mr Weiner: We’ve been able to

oper-ate now in China for years Our vision

is well aligned with what the Chinesegovernment is trying to accomplishright now: creating economic oppor-

tunity in a thriving middle class

WSJ: Are there any restrictions for

how people on mainland China canaccess the site?

Mr Weiner: There may be We’re

expecting requests to filter tent We are strongly in support offreedom of expression and we areopposed to censorship but recog-nize that in order to obtain a li-cense [in China], there will be re-quests to filter content and that’sgoing to be necessary for us toachieve the kind of scale that we’d

con-like

WSJ: Tell me how that works Will

someone from the Chinese ment be in regular contact with youabout what can and can’t go on the

govern-site?

Mr Weiner: This is the first time

we’re available in a local language inChina, and we just recently appliedfor our license, so we’re going tohave a much better understanding in

the weeks and months ahead

WSJ: Is the site hosted in China?

Mr Weiner: To date, it has not been.

For LinkedIn members outside ofChina, we will not be serving theirdata from within China For Chinesemembers who live within China,we’ll be serving that data [from

China]

WSJ: Will a person’s essay or

portfo-lio eclipse the importance of theirrésumé?

Mr Weiner: From my own anecdotal

experience, when I’m meeting one for the first time, they’ll say:

some-‘Hey I read your latest influencerpost and thank you so much forsharing,’ or ‘Here’s what I thought.’

In addition to reflecting who youare as a professional, [an article] is

a really compelling way to engagewith other people and potentiallypeople that you’re going to do busi-ness with It’s not just about a titleand a description of your job It’sabout rich media, it’s about a video

of that keynote [speech] youdid…it’s about the general contrac-tor uploading not a description ofthe dream house they just com-pleted, but the pictures It’s about allthe expertise and the experiencethat you’ve gained in that job that

you’re willing to share

WSJ: Updating your LinkedIn profile

is often read as a sign that you’relooking for work Now you’ve got areason to update it a lot more Willthat raise some eyebrows among

employers?

Mr Weiner: People are updating their

profiles when they’re not just ing for jobs Because of the way theworld works today, people seeking

look-to do business with you are going look-to

be doing a search on your name

Your LinkedIn profile is going toshow up at or near the top of thesearch results That means you get achance to put your best professionalfoot forward, completely indepen-dently of whether you’re seeking a

job

WSJ: Is all of this new content going

to increase the amount of time viduals spend on the site?

indi-Mr Weiner: We actually generated

more posts in the first two hours ofthe extension of this platform thanthe team had forecast for that entireday…We’ve continued to see a steadystream of the volume of posts thathas exceeded our expectations andthe engagement on those posts are

doing very well

WSJ: Advertising accounts for about

a quarter of LinkedIn’s revenue

With more and more content, do youexpect ad revenue to increase as a

percentage of the total?

Mr Weiner: It’s certainly possible…I

think that will be in part driventhrough engagement and through ef-forts like the expansion of our pub-lishing platform We’ve been havingsome success with sponsored con-tent and specifically sponsored up-

dates

WSJ: Give us a glimpse into

LinkedIn’s long-term future

Mr Weiner: With regard to

net-works, the goal there is to connectall professionals and we’re about

277 million right now…We believethe immediately addressable oppor-tunity is 600 million professionals

Longer term, the vision is to createeconomic opportunity for the threebillion people in the global work-

force

We’re mapping the global omy…a profile for every member ofthe global workforce; a profile forevery company in the world; everyjob offered by those companies,whether that’s full time or tempo-rary or for-profit or volunteer; everyskill required to obtain those jobs; apresence for every university orhigher education organization thatcan help our membership acquirethe skills necessary to obtain those

Huawei Turns Sights to U.S Smartphone Market

BARCELONA—Locked out of the

lucrative U.S telecoms network

mar-ket, Huawei Technologies Co now

has its eyes trained on America’s

smartphone sector

Huawei Chief Executive Eric Xu

told reporters at the Mobile World

Congress here Wednesday that the

Chinese company’s focus will shift to

the U.S this year—after not releasing

new devices there last

year—comple-menting its push in Europe and Asia

“We’re going to make a change

this year, and we’re going to

con-tinue to launch smartphones for the

U.S market,” said Mr Xu, one of

three senior executives who rotate

through the CEO job Mr Xu is set to

hand the baton to Guo Ping by the

end of next month, under the

com-pany’s six-month rotating CEO

sys-tem

Mr Xu said the company won’ttry to challenge the positions of Ap-ple Inc and Samsung Electronics Co

in the U.S Rather, the company seesitself competing with the large num-ber of manufacturers fighting formarket share under those two giants,

he said

This week, Huawei took thewraps off several new, high-endsmartphones and tablets One wasthe seven-inch MediaPad X1—a ra-zor-thin €300 ($412) tablet, powered

by Google Inc.’s Android operatingsystem, that its executives repeat-edly compared with Apple’s high-end

iPad Mini

Huawei’s push into the largelyhigh-end U.S market comes as sev-eral device makers like Nokia Corp

and BlackBerry Inc are turning theireyes to faster-growing, entry-levelsmartphone markets in places such

as India and Africa While Huawei

will continue to sell ultracheap droid smartphones in these markets,

An-Mr Xu said the cheap phones aren’tits main focus

“We’re not interested in the lowend of the market Only by pursuinghigh end can we pursue our growth,”

he said

Consumer devices account for anincreasing part of the Chinese com-pany’s revenue Last year, they ac-counted for 23%, or about $9.1 bil-

lion, of its overall revenue, thecompany said This year, it aims toincrease smartphone sales to be-tween 80 million and 100 million de-

vices, from 50 million last year

Its range of tablets and phones largely run Android’s operat-ing system The company has alsojoined with Microsoft Corp to makeWindows Phone-powered devices

smart-Sales of these haven’t been tory, Mr Xu said

satisfac-Currently, Huawei’s smartphonesales largely stem from countries inAsia China alone accounts for 40%

of the company’s smartphone sales,while other major markets includethe Middle East and Africa, Latin

America and Europe

In a bid to improve its brandawareness in the U.S., Huawei lastyear signed several sponsorshipdeals with the likes of U.S pop starsthe Jonas Brothers The company has

also recruited several foreign tives to help it transition from a low-cost maker of telecom equipment to

execu-a globexecu-al mexecu-aker of its own-brexecu-andproducts Those include Colin Giles,

a former Nokia veteran, who nowruns the company’s consumer group

“For sure we need to build thebrand, we accept that,” Mr Giles said

in an interview “Also we need to prove distribution and get good at

im-retail.”

That is all the more challenging

in the U.S., where lawmakers have fectively shut Huawei out of thewireless-equipment market A con-gressional report in 2012 concludedthat Huawei posed risks to nationalsecurity, alleging that the companies’

ef-equipment could become a vehiclefor Chinese spying The company has

called the report misleading

—Sam Schechner contributed to this article.

B Y S VEN G RUNDBERG

BUSINESS & FINANCE

Huawei’s smartphone sales largely stem from

countries in Asia China alone accounts for 40%

of its smartphone sales.

OPINION: REVIEW & OUTLOOK

Kong took a brutal turn

Wednes-day with the stabbing of

journal-ist Kevin Lau, a prominent critic of

gov-ernment policy Mr Lau was chief editor

of the Ming Pao newspaper until his

fir-ing last month, which touched off

pro-tests over the decline of press freedom

and other civil liberties in the

semi-au-tonomous Chinese territory He is now

hospitalized with life-threatening

inju-ries.

The attack occurred in broad daylight

on a sidewalk near Mr Lau’s apartment.

A man in a helmet stabbed the journalist

six times before escaping on a

motorcy-cle driven by an accomplice Police are

reviewing security cameras for leads on

suspects Hong Kong is an exceptionally

safe city, and random crime—especially

of this magnitude—is almost unheard of.

So suspicion that the attack was

politi-cally motivated is widespread and

war-ranted.

Such fears are fueled by the victim’s

high profile as critic of the governments

in both Beijing and Hong Kong As editor

of Ming Pao, Mr Lau investigated the suspicious 2012 death of former political prisoner Li Wangyang, which Chinese authorities called a suicide though it ap- peared to be a murder He also recently joined with the International Consortium

of Investigative ists in exposing the off-

where China’s top leaders stash their enormous fam- ily wealth.

Mr Lau was a larly strong opponent of the Hong Kong government’s 2012 attempt—at Beijing’s urging—to impose a program of “na- tional education” on public schools.

particu-When Hong Kongers learned that ing materials promoted the Chinese Communist Party as a “progressive, self- less, and united ruling group,” they massed in protest and eventually forced local officials to scrap the scheme.

teach-After Mr Lau was fired last month and replaced with a Malaysian journalist

who had supported “national education,”

more than 90% of Ming Pao’s staff filed

a petition demanding an explanation.

Four columnists protested by leaving their spaces blank—among them Demo- cratic Party founding chairman Martin Lee—while some 110 staffers dressed in

black and held a silent protest outside the news- paper’s office.

The attack on Mr Lau

is especially alarming because it’s part of a pattern Recent years have seen a spate of physical attacks on Hong Kong media critical of China’s ruling Communist Party and its local allies These include the baton beating

of iSun Affairs publisher Chen Ping, the theft and burning of some 20,000 cop- ies of Apple Daily newspaper, and the failed attack on the home of Apple Daily owner Jimmy Lai Many such cases go unsolved Police “can’t chase people into mainland China,” Mr Lai has said, “and that is where these at-

tacks come from.”

This pattern of violence—along with the recent firing of Mr Lau and others—

brought an estimated 6,000 Hong Kongers into the street for a “Free Speech, Free Hong Kong” rally on Sun- day In the wake of Wednesday’s stab- bing, tens of thousands could march this weekend.

Hong Kong’s chief executive, Leung Chun-ying, denounced Wednesday’s at- tack as a “savage act” and visited Mr.

Lau in the hospital “Hong Kong is a ful society and we will not tolerate vio- lence,” he said.

law-Perhaps Mr Leung realizes that any appearance of political violence threat- ens Hong Kong’s reputation for civic and commercial freedom, along with Bei- jing’s reputation both among the terri- tory’s citizens and global investors.

Bringing swift and transparent justice to the attacker and anyone who may have participated in Wednesday’s stabbing is the only way to start restoring that rep- utation.

that he plans to retire from the

U.S House of Representatives at

the end of this Congress, and his initial

parting shot came with unusual

ill-grace “I find serving in the House to

be obnoxious,” the 87-year-old told the

Detroit News “It’s become very hard

because of the acrimony and

bitter-ness, both in Congress and in the

streets.”

The Democrat from southeastern

Michigan was first elected in 1955 and

never served in the minority until after

the GOP sweep of 1994 He was among

those who, Congress after Congress,

steadily built the modern

administra-tive state with its vast powers to

re-distribute income and regulate to

pun-ish or reward companies.

In his political heyday as Chairman

of the Energy and Commerce tee in the 1980s, Mr.

Commit-Dingell liked to boast that his writ extended to every corner of the American economy He wasn’t far off Yet when all economic and cultural questions become political, is it any wonder that politics becomes more ac- rimonious?

Mr Dingell may have intended his

“obnoxious” barb at the tea party and Americans angry with Washington, but most of those people don’t know how

to maneuver through the corridors of power They can’t afford to hire some-

one from “the Dingell bar,” the name adopted with an almost civic pride by the Washington lawyers who were well

paid for representing businesses caught in the

cross-hairs Many were his former staffers.

The “Dingell method,”

another phrase from the era, was to conduct an investigation, selectively leak what his staff found to

a newspaper and TV network (double the media points), then haul the poor business targets for a public grilling before the cameras The journalists would win prizes for the appearance of enterprise The CEOs would be advised

by the Dingell bar to be obsequious

and remorseful whether guilty or not.

The acrimony was one-sided.

The irony of Mr Dingell’s later years is that he was pushed aside by younger liberals from the Watergate generation like Henry Waxman and Ed Markey Mr Dingell represented car makers and the United Auto Workers, which often made him less ideological

on environmental regulation and tural issues.

cul-For those sins, Democrats deposed him as committee chairman in 2008 in favor of Mr Waxman, who recently an- nounced that he will also retire at the end of this Congress If he and Mr.

Dingell are unhappy with our current political distemper, they might con- sider that this is the House they built.

rare since Republicans took the

House in 2010, but one of them was

the 2012 reform of federal flood

insur-ance A mere two years later, House

Re-publicans want to abandon their work and

expand the middle-class

subsidy on the backs of

taxpayers Where’s the tea

party when you really need

them?

The goal of the

Biggert-Waters reform of 2012 was

to require that property

owners gradually adjust to

paying actuarially sound rates for

tax-payer-backed flood insurance Millions of

Americans have long paid below-market

rates to cover their shoreline homes,

leav-ing the National Flood Insurance Program

under water by some $24 billion after

Hurricanes Katrina and Sandy The federal

program has $1.3 trillion in outstanding

insurance, though private insurers provide

flood coverage for losses above the federal

$350,000 limit and are eager to do more.

Under the reform, already-subsidized vacation homes, businesses and “severe repetitive loss” properties would see pre- miums rise 25% per year until they paid actuarial rates Owners of primary resi- dences with federal flood insurance would

see no change unless they sold their home, in which case the new homeowner would pay the actuarial rate.

Biggert-Waters also structed the Federal Emer- gency Management Agency

in-to collect more refined data when it conducts its periodic remap- ping surveys This new information, such

as current elevation levels, would help the federal flood insurance program more ac- curately price premiums Property owners would pay new rates when the maps were done, a process which could take three to five years.

Even these modest price increases were too much for beach-side mansion owners and the Realtors who want to sell

those homes, and so they descended on Congress to demand repeal Michael Grimm of New York City’s Staten Island has led the charge for repeal, and the House will vote on his bill as early as Wednesday.

He proposes to limit the breadth of FEMA’s remapping (which hasn’t even be- gun), repeal the home-sale trigger so new owners don’t pay higher rates, and retro- actively refund premiums for properties sold since July 6, 2012 Some 700,000 of 1.1 million covered properties would enjoy taxpayer subsidies in perpetuity.

To (ostensibly) pay for this, the Grimm bill would impose a surcharge of

$250 on all businesses and non-primary residences with federal flood insurance and $25 for primary residences So, say, the Michigander who lives on a lake but has little risk of flooding would foot the bill for a Palm Beach mansion FEMA would have less information by which to charge sound premiums We would be back to the future of encouraging more people to live in flood zones with tax-

payers socializing the hurricane risk.

Senate Democrats, who passed a bill to delay Biggert-Waters in January in the face of similar political pressure, would jump at the chance to expand this middle- class entitlement They also don’t want to face the fact that the federal program’s fi- nances can’t be fixed without charging market rates.

Political discredit here also goes to House GOP leaders, who chose to dodge the regular legislative order that Speaker John Boehner promised in 2011 He is let- ting Mr Grimm’s bill avoid vetting in committee and is bringing it directly for

a quick and dirty floor vote If Senator Ted Cruz and Heritage Action are looking for something of substance to rebel against, this is it.

Who Stabbed Kevin Lau?

The House That John Built

Flooding Capitol Hill

The dean of Congress says he’ll retire from the body he made.

Hong Kong’s battle for democracy takes a brutal turn.

Republicans cave to the Realtors on taxpayer flood insurance.

Comments? The Journal welcomes

readers’ responses toall articles and editorials It is important toinclude your full name, address andtelephone number Please send letters to

the editor to: Letters@WSJ.com

BUSINESS & FINANCE

ABInBev Net Gets Boost FromGrupoModeloCuts

LEUVEN,

Belgium—Anheuser-Busch InBev NV is taking its

cost-cutting knife to Grupo Modelo SAB,

the Mexican brewer it acquired trol of last year

con-AB InBev, the world’s largestbrewer, said Wednesday that it hasalready managed to shave hundreds

of millions off the brewer’s annualcosts since it completed the $20 bil-lion purchase of the half of GrupoModelo it didn’t already own inJune last year

The brewer of Budweiser, StellaArtois and Bud Light also posted a45% increase in fourth-quarterprofit, driven in part by cost cutting

at Grupo Modelo

The gain came despite weak beersales throughout much of AB In-Bev’s brewing empire, reflecting thestill-shaky state of the global econ-omy Volume sold by the companyfell 2% in the most recent quarter,compared with a year earlier

AB InBev’s fourth-quarter netprofit totaled $2.52 billion, up from

$1.74 billion a year earlier Severalone-time items helped the latest re-sult, including the return of excessfunds that the company had contrib-uted to its employee-retirementplan in Brazil A 15% decline in fi-nancing costs also contributed tothe improved profit

Shares in AB InBev rose 2.8% to

€76.34 ($104.93) in Brussels

“In extreme markets with cups, they managed to performwell,” said Kris Kippers, an analyst

hic-at Petercam in Brussels “It is ing how different they are fromtheir colleagues.”

strik-Heineken NV and Carlsberg A/S

have struggled to increase profits inthe face of flagging beer sales

AB InBev’s revenue rose slightly

to $11.71 billion, from $11.62 billion

The latest result was mainly utable to revenue growth in Brazil,where price increases and strongsales of premium beers helped off-set bad weather and high food-priceinflation that sapped the public’sdisposable income

attrib-In Mexico, earnings before est, taxes, depreciation and amorti-zation rose 44% to $575 million

inter-The brewer said it achieved $360million in annual synergies fromGrupo Modelo in the final sevenmonths of last year

A further $75 million came fromapplying AB InBev’s cost-cutting

techniques before the deal had beenofficially completed Those tech-niques involve scrutiny of each bud-get item The process requires man-agers to justify every cost anew Thecompany also uses its significantsize to negotiate favorable dealswith suppliers

AB InBev management is hoping

to achieve $1 billion in annual costcuts by the end of 2016 at GrupoModelo Analysts say the companymight manage to achieve all thosesavings by the end of 2015

The U.S., AB InBev’s biggest ket, was a weak spot Volume in thebrewer’s North American division,which is mainly the U.S., fell 1.8% inthe fourth quarter and 2.4% over all

mar-of 2013 “We expect an improvement

in the industry volume trend in

2014, driven by a stronger omy,” Chief Financial Officer FelipeDutra said

econ-The year is off to a rough start,because of heavy snowfall in theU.S., Mr Dutra said

The soccer World Cup in Brazil,

AB InBev’s second-largest market, islikely to help sales The company es-timates the event could boost vol-umes by one to two percentagepoints in Brazil for the year

AB InBev also plans to sell rona, Grupo Modelo’s main beer, inmore markets outside Mexico “It is

Co-a very exciting brCo-and,” Chief tive Carlos Brito said

Anheuser-Busch InBev's sales volume by region, in millions of hectoliters

The Wall Street Journal Source: the company

0 25 50 75 100 125

North AmericaLatin America NorthAsia PacificLatin America SouthWestern EuropeMexicoCentral and Eastern EuropeGlobal export and holding companies

2013

2012

Westfield Weighs Stock-Listing Spot

SYDNEY—Westfield Group, one

of the world’s largest owners ofshopping malls, said it may list inthe U.S or London after a plannedbreakup of its global mall empire

The separation plan is expected

to tie the company’s fortunes moreclosely to glitzy new projects such

as a retail wing of New York’s WorldTrade Center The 95-year-old com-pany may first need to overcomesome investors’ concerns, though,about the terms of a deal that willhave it jettisoning many older prop-erties to focus on tonier develop-ments in Los Angeles and New York

“We’re going to look at listingthe company in New York, London

or here in Australia—all of them areunder consideration,” WestfieldGroup Chief Executive Peter Lowysaid in an interview Wednesday

The breakup plan, disclosed inDecember, calls for Westfield to sellits remaining 50% interest in Austra-

lian and New Zealand malls to

West-field Retail Trust, which was formed

in 2010 to house its more-mature cal assets The listed trust, to be re-named Scentre Group, will own 47malls in Australia and New Zealand,leaving Westfield Group with 39 cen-ters in the U.S and five in the U.K

lo-and Europe valued at $18 billion

The deal aims to unlock thevalue of its U.S and European as-sets, which have a higher proportion

of new developments and thus moreupside potential The properties inAustralia, where the Lowy familystarted the company in 1959, are

seen as more of a stable yield play.Shareholders are due to vote onthe plan in May Westfield Groupshareholders will get 1,000 shares inthe new Westfield Corp and 1,246shares in Scentre Group for every1,000 shares in Westfield Group thatthey own Shareholders in the retailtrust will get a combination of cashand shares, terms some investorshave suggested may need to besweetened to win their endorsement

“A number of large investors haveexpressed their opposition to the cur-rent terms,” said Winston Sammut,managing director of Sydney-based

fund manager Maxim Asset

Manage-ment, which owns shares in both

Westfield and Westfield Retail Trust

“I’m aware a number of sized institutional investors are also

medium-of the same mind It’s not over yet.”

Mr Lowy played down the pect of an amended deal He said re-cent talks among management andinvestors had been positive.Westfield on Wednesday re-ported a net profit for the yearthrough December of 1.60 billionAustralian dollars (US$1.44 billion),down 6.7% from the previous year.Hurt by the slower growth pro-file of its older malls and the end of

pros-a long mining boom in Austrpros-alipros-a,which has shaken consumers’ confi-dence, Westfield returned a total ofjust 31% over five years, comparedwith over 250% for Simon PropertyGroup Inc and Taubman CentersInc., according to SNL Financial.The company Wednesday said itwould sell another batch of U.S.malls valued at about US$1 billion

B Y R OSS K ELLY

Rubenstein Doubtful Over Buyout-Shop Tax Change

BERLIN—Carlyle Group LP

co-founder David Rubenstein said U.S

lawmakers are “unlikely” to take uplegislation this year that could po-tentially increase taxes on deal prof-its reaped by private-equitymanagers

Mr Rubenstein’s comments cameafter the chairman of the U.S HouseWays and Means Committee, Repub-lican Dave Camp of Michigan, saidCongress should “clean up” thetreatment of private-equity firms’

share of deal profits, called “carriedinterest.” These profits are cur-rently treated as capital gains andtaxed at a lower rate than ordinaryincome

“We can clean up provisions likecarried interest that allow certainprivate-equity firms to get the in-vestment-income tax rate on whatanyone else would call normal wageincome,” Mr Camp said in an opin-ion piece published Wednesday inThe Wall Street Journal outlining aseries of tax-reform proposals

But Mr Rubenstein, whose firm

is based in Washington and who isoften viewed by private-equitywatchers as an authority on nationalpolitics, said various factors wouldlikely prevent any measures fromtaking hold anytime soon

Montana Democrat Max Baucus,previously the chairman of the Sen-ate Finance Committee, was justconfirmed as the U.S ambassador toChina, lowering the chances thatchamber will take up such legisla-tion, Mr Rubenstein said In addi-

tion, a term limit will force

Mr Camp to relinquish his tee chairmanship in the House nextyear, he said

commit-“It’s unlikely that will get intolaw,” Mr Rubenstein said of

Mr Camp’s proposal before an ence at the SuperReturn Interna-tional private-equity conference inGermany’s capital “I don’t thinkthere is likely to be any tax-reformlegislation passed by this Congress

audi-at all.”

Private-equity-firm managers, cluding Mr Rubenstein and found-ers of other large buyout firms, haveargued that carried interest they re-ceive after investing in a companyand later selling it should be treated

in-as a capital gain Proponents of ing these profits at a higher ratecontend the money is compensationfor services private-equity managersrender when working on companiesthey take private

tax-The carried-interest debate bled up in the wake of the recessionand financial-overhaul law latertaken up on Capitol Hill But the is-sue so far hasn’t been addressed inany legislation passed by Congress.Still, many private-equity managersexpect at some point to receive themore stringent tax treatment.Meanwhile, Mr Rubenstein saidsovereign-wealth funds will soonbecome the largest contributors ofinvestment capital to private-equityfirms, surpassing giant pensionfunds Sovereign-wealth funds cur-rently manage about $5.4 trillion, anumber that will exceed $8 trillion

Subject to shareholder approval

in May, the board said it would point Mr Frérot for four moreyears

ap-The decision represents a victoryfor the executive, who had come un-der pressure from one of the group’sbiggest shareholders, the Dassaultfamily, which owns a 6.3% stake

Veolia has been hard hit by theeconomic crisis in Europe, which

has eaten into its long-term ing while calling into question some

financ-of its most prfinanc-ofitable waste and ter contracts in Europe The utilityhas moved to restructure its busi-nesses and geographical exposure,while selling some assets in the U.K

wa-and the U.S

Veolia shares are trading at afifth of their value six years ago

Against this backdrop, Dassaultshareholders pushed for a change ofleadership, according to a boardmember and people familiar withthe matter “The Dassault family hasbeen frustrated with the returns,”

the board member said

The dissent against Mr Frérotwas first reported earlier thismonth by French magazine Le Point,which said Dassault shareholders

were seeking to replace Mr Frérotwith David Azéma, a senior officialcurrently managing the Frenchagency that oversees governmentstakes in private companies

But on Tuesday, Mr Azéma toldReuters he was “not a candidate forthe position.” Mr Azéma didn’t re-spond to several requests for com-ment

The French government, Veolia’slargest shareholder with a 9.3%

stake, was set to support Mr Frérot

at Wednesday’s board meeting, theboard member said

Mr Frérot already faced an tempt to unseat him two years agowith pressure from some members

at-of the board In the end, the boardendorsed Mr Frérot and his strate-gic plan

A few hours after a colorful closing ceremony of the Sochi Olympics, which were intended as

a showcase for a modern and self-confident Russia, a court in Mos-cow sentenced a group of opposi-tion activists to prison terms ranging from two to four years

Their “crimes” all involved protest-ing President Vladimir Putin’s in-auguration at a rally in Bolotnaya Square in May 2012

Monday’s verdict prompted a street demonstration, which was violently broken up by Russia’s spe-cial riot police known as the OMON

Hundreds of protesters—according

to official figures—were detained and hauled away to police stations

They included opposition leaders Alexei Navalny and Boris Nemtsov, who were sentenced, respectively,

to seven and 10 days in jail on the charge of “disobeying the authori-ties.” The arrest of Mr Nemtsov, an elected regional assemblyman, ap-pears to be in direct violation of a Russian law that limits prosecution

of elected legislators

Moscow’s renewed crackdown heralds the end of a short-lived Olympic reprieve, which brought the release of a number of political prisoners It’s now a return to business as usual for the Kremlin

The intentionally harsh sentences for the Bolotnaya Square prison-ers, and the arrests of those who raised their voices on their behalf, are meant to serve as a warning and to prevent the reemergence of street protests against Mr Putin’s corrupt and undemocratic rule

It is no coincidence that this crackdown came days after the vic-tory of a popular uprising against

Mr Putin’s client regime in Ukraine—a regime that tried to emulate the Kremlin’s system of crony capitalism and authoritarian control Vladimir Putin, it seems, has drawn precisely the wrong les-sons from the success of Ukraine’s Maidan movement The Kremlin faults Viktor Yanukovych not for killing his own people, but for not killing enough of them

For weeks Russian television stations have carried hate-filled appeals to crush the protesters in Kiev Russian Prime Minister Dmitry Medvedev’s public advice

to Mr Yanukovych was to not be a

“doormat people wipe their feet on.” All this has left little doubt as

to the Kremlin’s thinking: In Mos-cow's view, the events in Ukraine

amount to a Western-inspired coup

d’état—similar to the one that, by

the Kremlin’s paranoid reasoning, almost succeeded in Russia during the mass protests of 2011 and

2012 Hence the harsh sentences for the Bolotnaya prisoners—a message that Mr Putin, unlike Mr

Yanukovych, will not be a “door-mat.”

For Vladimir Putin, maintaining the status quo in Ukraine was not primarily about preserving a post-Soviet sphere of influence or recre-ating a Moscow-led empire—al-though such outcomes would have been added benefits His principal fear is that a democratic, pro-Eu-ropean Ukraine—a country with similar cultural, linguistic and

reli-gious traditions—will set a “dan-gerous” precedent for Russia, and that it will be only a matter of time before Russian citizens begin to demand a similar level of political and economic freedom

The uncomfortable truth for the Kremlin is that the underlying rea-sons for Ukraine’s uprising are also present in Russia A recent survey

by the independent pollster Levada Center showed that only 22% of Russians want Vladimir Putin to remain president beyond his cur-rent term—a rather unimpressive figure for someone who controls the message on every single na-tional television network Even ac-cording to official numbers from

the flawed 2012 presidential elec-tion, Mr Putin has lost majority support in Moscow, Kaliningrad, Vladimir, Omsk, Vladivostok and other major population centers across the country

In the 2013 mayoral election in Moscow—the first important poll

in years that had a semblance of competition—Mr Navalny, one of the opposition leaders arrested on Monday, came from nowhere to win 30% of the vote While Russia’s traditionalist and less economi-cally and technologieconomi-cally developed regions still provide Mr Putin’s party with votes, educated, mod-ernized, urban middle-class Rus-sians increasingly reject an archaic political system based on nepo-tism, repression and international confrontation Russia’s dynamic is,

in this way, not unlike Ukraine’s East-West political divide

A wise statesman would pre-pare for inevitable change by grad-ually expanding his country’s polit-ical space and allowing for increased competition, both in the media and at the ballot box In opting for increased repression, Vladimir Putin—while denouncing the uprising in Ukraine—is doing everything to produce one in Rus-sia

Mr Kara-Murza is a leader of the People’s Freedom Party, a demo-cratic opposition party in Russia.

A police officer detains a protester outside the Moscow court on Feb 24.

The End of Russia’s Olympic Truce on Dissent

B Y V LADIMIR V . K ARA- M URZA

As Ukrainians mourn their dead and vow to prosecute their re-cently deposed leader, the valor of those who died must now inspire others to build a new Ukraine wor-thy of their struggle and sacrifice

Democracy and a better future must be secured in pragmatic terms Economic benefits must be-gin to flow in tandem with Ukraine’s nascent commitment to genuine self-government and re-sponsibility

Europe and the U.S are rushing

to put together billions of dollars

in financial aid for Ukraine, keenly aware that they have been granted

a second chance Last November’s potential trade deal with the Euro-pean Union was scuttled when Ukraine turned to Russia at the last moment for economic suste-nance

But if efforts to forge a newly generous package get bogged down

in trans-Atlantic negotiations and the institutional requirements of the International Monetary Fund, the moment to help Ukraine gain a solid economic footing may be lost And should its currency, the hryvnia, meanwhile succumb to panic and meltdown, the opening for freedom may be squandered

The most expedient way to es-tablish a sound-money founda-tion—in keeping with Ukrainian as-pirations for an independent nation capable of succeeding in the global economy—would be to initi-ate a currency board

Currency boards helped launch the free-market reforms and bud-getary discipline that lifted former Soviet republics Estonia and Lithu-ania out of the wreckage of central

planning in the early 1990s

Slumped production gave way to economic growth and financial sta-bility after Estonia replaced the hyperinflating Soviet ruble with its own currency, the kroon, anchored

by the German mark in June 1992

Lithuania opted to fix its currency, the litas, to the U.S dollar when it adopted a currency board in March 1994; capital inflows amounting to almost 7% of GDP poured into the country that same year

A currency board for Ukraine could obtain similar results It would provide a solid platform for effectively utilizing financial assis-tance and thereby shore up fragile hopes for improved economic prospects

How would it work? A currency board is an exchange-rate arrange-ment whereby the monetary au-thority is required to exchange lo-cal currency for the foreign anchor currency at a fixed exchange rate

Absolute, unlimited convertibility

must be maintained to ensure that all holders of the nation’s notes and coins can convert them into the anchor currency on demand;

this is best achieved by holding re-serves equal to 100% of the na-tion’s monetary base or slightly more

Under a currency board, there

is no central bank to intervene in foreign-exchange markets or ma-nipulate interest rates “By design,

a currency board has no discre-tionary monetary powers and can-not engage in the fiduciary issue of money,” according to Steve Hanke, professor of economics at John Hopkins University “Its operations are passive and automatic.”

This turns out to be a great vir-tue for an emerging-market coun-try seeking to gain the confidence

of citizens and establish credibility with outside investors If Ukraine were to willingly embrace the dis-cipline and accountability inherent

in a currency board, it would send

a signal of economic self-assurance and underlying faith in the produc-tive potential of its people

The choice of anchor currency

is totally voluntary Ukraine’s cen-tral bank has long targeted the dol-lar in trying to manage the ex-change rate value of the hryvnia,

so it might wish to formalize the dollar anchor in its currency board People are familiar with the dollar as a reference point of value for the hryvnia

The current problem is that Ukraine’s central bank has used a crawling-peg approach, which can

no longer be sustained Nothing prevents the hryvnia now from sliding into oblivion The Kiev Post reports that individuals and com-panies seeking to convert bank de-posits into hard currency must wait six working days to do so

While the EU, the U.S., and the IMF acknowledge that Ukraine’s fi-nancial situation is dire, they have not put forward a plan to quickly address the deteriorating currency situation The joint statement is-sued on Monday by U.S Treasury Secretary Jack Lew and IMF Man-aging Director Christine Lagarde offered the vague promise that “if

a fully established government in Ukraine makes a request, then the IMF would provide the best foun-dation for economic advice and fi-nancing.”

Catherine Ashton, the EU’s for-eign-affairs chief, is likewise turn-ing to the IMF as the arbiter of aid for Ukraine She is keenly aware,

no doubt, of the difficulties of get-ting a 28-nation bloc to move quickly to help its neighbor

But can Ukraine wait? And what happens to the hryvnia in the next

10 days? If an IMF program for

comprehensive economic reform is presented to a destabilized Ukraine weeks down the road, disillusion-ment will have already started to take hold

And then there is the danger the IMF will do more harm than good If it imposes its usual for-mula of budgetary austerity and currency devaluation as a condi-tion for Western loans—plus in-sists on raising the price of natural gas to Ukrainian homes and indus-tries—it will spur further tension within an already divided popula-tion

A much better strategy for Ukraine would begin with the im-mediate creation of a currency board anchored by the dollar For-eign investment would start to contribute directly to the solid growth of a monetary base on which to build a functioning econ-omy

If Ukraine chooses to switch to the euro at some point in the fu-ture, as Estonia did in January

2011 and Lithuania plans to do in

2015, it will be a further boon to full European integration Indeed,

it will testify to the dedication and resolve of Ukrainians to embrace the responsibilities—along with the benefits—of free markets and democratic values

But first Ukraine must get through this perilous period Fix-ing the hryvnia to the dollar is the fastest way to restore Ukrainians’ faith in their money

Ms Shelton, author of “The Com-ing Soviet Crash” (Free Press, 1989) and “Money Meltdown” (Free Press, 1994), is a senior fel-low at the Atlas Economic Re-search Foundation.

If the hryvnia succumbs to panic and meltdown, the opening for freedom may

be squandered.

A Currency Board for Ukraine

B Y J UDY S HELTON

Ukraine’s uprising fans Putin’s fears of losing control over Russia.

by how poorly Western markets are doing,” said Mr Goings “It’s driven by

where the people are.”

In the fourth quarter of 2013, Tupperware’s net sales rose 1% to

$717 million, while earnings rose 20%

to $89.7 million, as strength in emerging markets offset weakness in

developed countries such as the U.S

Emerging markets made up 63% of Tupperware’s sales in the latest

quarter

Indonesia is Tupperware’s largest market In the fourth quarter,

Tupperware’s sales there climbed 33%

Sales in China were up more than 20%

and sales in Brazil up 19%

Kathy Chu

Tupperware Expects Its Sales

To Rise in Emerging Markets

Tupperware Brands Corp Chief

Executive Rick Goings said Wednesday

he expects at least 80% of the company’s revenue to come from

emerging markets by 2019, up from about 60% in the fourth quarter,

driven by a swelling middle class in countries such as Indonesia, China and

Brazil

In an interview with The Wall Street Journal, Mr Goings said the

Orlando, Fla., company is growing fastest in markets where women are

looking for opportunities to earn a living Tupperware relies on a largely

female sales force of 2.9 million to sell its brightly colored food-storage

containers to friends and family through house parties

The expected growth “is not driven

Switzerland’s PPLI providers were the subject of a Wall Street Journal

report this week that said the U.S

Justice Department and Internal Revenue Service are scrutinizing the

use of the product, which blends banking and insurance by linking the

value of a client’s policy to assets held

in a Swiss bank account

The U.S authorities are examining whether Americans used Swiss

insurance products to hide assets, the WSJ reported, citing people with

knowledge of the matter

Mr Pfister’s comments came as Swiss Life said full-year net profit

surged to 781 million Swiss francs ($880 million) in 2013, up almost

700% from 98 million Swiss francs a year earlier The performance was

driven by a 5.4% increase in premiums and policy fees and a 1% reduction in

group costs

Neil MacLucas

Swiss Life Chief Executive:

Products Are Tax Compliant

The chief executive of Swiss Life

Holding AG said on Wednesday that

the insurer’s private placement life

insurance products were tax compliant

and not designed to attract untaxed

assets owned by U.S clients

Bruno Pfister said that, from the

end of 2008, Zurich-based Swiss Life

had only accepted U.S customer

assets for the product, which is often

referred to as PPLI, if they were tax

compliant The company stopped

taking new business from U.S clients

in 2012, he said

Swiss Life hasn’t been contacted by

U.S authorities with regard to the

PPLI business, he added “We consider

our PPLI portfolio to be tax compliant,”

Mr Pfister said “It has never been our

goal to attract untaxed assets.”

INDEX TO BUSINESSES

ABB 23

Agricultural Bank of China 23

Airbus Group N.V 17,21 Andreessen Horowitz 22

Aneka Tambang 21

Anheuser-Busch InBev.19 Apple 17,20 Arbaya Energi 21

AT&T 8

BAIC Motor 23

BlackBerry 20

Boeing 21

BYD 23

Carlsberg 19

Carlyle Group 19

Citigroup 25

Comcast 18

Credit Suisse Group 24

Daimler 23

Deere 12

Dongfeng Motor Group 32 Dow Chemical 12

DuPont 12

Facebook 22

Financial Conduct Authority 24

FireEye 24

Freeport-McMoRan Copper & Gold 21

FXCM 24

General Electric 24

Goldman Sachs Group 25

Google 20,22 Grupo Modelo 19

Heartland Payment Systems 24

Hebei Iron and Steel Group 23

Heineken 19

Honda Motor 32

ITV 18

Japan Post Group 23

Joyful Frog Digital Incubator 22

Juniper Networks 32

Lego 17

LinkedIn 20

Mars 22

Maxim Asset Management 19

Microsoft 20

Mondelez International22 Monsanto 12

Mt Gox 1

Newmont Mining 21

News Corp 18

Nissan Motor 32

Nokia 20

Orion Group 22

Oshkosh 31

Palo Alto Networks 32

Prime Meridian 13

PSA Peugeot Citroën 32

Rakuten 22

Red Dot Ventures 22

Renault S.A 32

Rolls-Royce Holdings 21

Samsung Electronics 20

Sprint 8

Target 24

Telefonica Deutschland32 T-Mobile Austria 32

T-Mobile Germany 32

United Rusal 21

United Technologies 21

Veolia Environnement 19

Verizon Communications 8

Viber Media 22

Viki 22

Wells Fargo & Co 24

Westfield Group 19

Westfield Retail Trust.19 WhatsApp 22

Businesses

This index of businesses

mentioned in today’s

issue of The Wall Street

Journal is intended to

include all significant

reference to companies.

First reference to the

companies appears in

bold face type in all

articles except those

on page one and the

editorial pages.

Corrections  Amplifications

The Straits Exchange Foundation,

Tai-wan’s semiofficial organization that handles affairs with China, was incor-rectly referred to as Strait Exchange Foundation in a World News article Feb

12 about talks between China and Tai-wan

Readers can alert the London newsroom of The Wall Street Journal to any errors in news articles

by emailing wsjcontact@wsj.com or by calling

+44 (0)20 7842 9901.

BUSINESS & FINANCE ITV Bulks Up Production Arm

LONDON—ITV PLC Wednesday

hailed the performance of its U.S

business and said its fast-growing

production arm is seeking more

deals, as the U.K media company

reported a 27% jump in its yearly

profit

One of ITV’s most popular

shows, “Downton Abbey,” is

co-pro-duced by Carnival Films, part of

Comcast Corp.’s NBCUniversal, and

PBS’s Masterpiece series, both based

in the U.S But to insulate itself from

advertising markets ITV Studios is

spending to create its own television

shows, such as the British drama

“Mr Selfridge,” for its own channels

and to sell to overseas broadcasters

ITV Studios also is expanding by

pursuing acquisitions in the U.K., as

well as the U.S., where it is now a

top-five independent content

pro-ducer “If [the right opportunities]

come up, then we will go for them,”

said Chief Executive Adam Crozier

In the past year and a half, ITV

has bought U.S production

compa-nies Thinkfactory Media, Gurney

Production and High Noon

Enter-tainment Last week, it acquired

New York-based DiGa Vision

“If you look at our American

business, our revenue doubled last

year and tripled since 2010,” said

Mr Crozier

The U.K.’s biggest over-the-air

commercial broadcaster, which also

shows music competition “The X

Factor,” said 2013 net profit rose to

£326 million ($544 million) from

£256 million in 2012 Revenue

in-creased 9% to £2.39 billion

Nonadvertising revenue gained

17% to £1.21 billion, and revenue

from ITV Studios rose 20% to £875

million The company said it expects

advertising revenue from its chan-nels, which rose 2% last year, to climb 2% in the first three months

of this year Its advertising revenue also is set for a boost this summer from the FIFA soccer World Cup

“The television-advertising mar-ket continues to show signs of

im-provement,” Mr Crozier said

ITV proposed a full-year divi-dend of 3.5 pence, up 35% from a year earlier and a special dividend

of 4 pence—valued at £161 million—

in line with last year

“Our financial position has been transformed,” Mr Crozier said

Jane Anscombe, analyst at Edi-son Investment Research, said ITV’s

strategic approach is paying off

ITV, which is four years into a five-year plan to generate half its revenue from sources other than traditional television-advertising spots, is also pushing its

digital-me-dia presence to capture tablet and smartphone users, as well as

spon-sorship deals

The company expects online, pay and interactive to post double-digit revenue growth this year, helped by the launch of the pay drama channel

ITV Encore

Mr Crozier ruled out ITV bid-ding for U.K over-the-air peer Chan-nel 5, which is up for sale “We are not looking at Channel 5,” he said

B Y S IMON Z EKARIA

Prosecutors

In the U.K.

Charge Four Journalists

LONDON—British prosecutors said four journalists—three of them

from News Corp’s Sun newspaper—

have been charged with misconduct

in public office, a move that puts a fresh spotlight on journalistic prac-tices at a newspaper that is part of

Rupert Murdoch’s media giant

Reporters from News Corp’s daily the Sun—Tom Wells, Neil Mil-lard and Brandon Malinsky—have all been charged with misconduct in public office, the Crown Prosecution Service said Tuesday Graham Brough, a journalist who used to write for the Trinity Mirror Group title the Daily Mirror, was also

charged

News U.K., News Corp’s U.K

newspaper unit, declined to com-ment A spokesman for Trinity Mir-ror said the company wasn’t pre-pared to comment immediately

News Corp also owns Dow Jones &

Co., the publisher of The Wall Street Journal

All four men were arrested as part of Operation Elveden, a police probe into alleged corrupt payments

by journalists to police officers, in exchange for tips and stories

Former police officer Sam Azouelos and former corrections of-ficer Reggie Nunkoo were also charged with the same offense, said prosecutors Prosecutors and the police didn’t disclose any other

de-tails of the alleged offenses

Attempts to reach the six indi-viduals charged weren’t successful

The men have yet to enter pleas, which could happen at subsequent

hearings

Operation Elveden was launched

to run in parallel with investigations into phone hacking, or the illegal in-terception of voice-mail messages, and computer hacking Separately, former News Corp employees in-cluding Rebekah Brooks and Andy Coulson, both of whom once edited News Corp newspapers, are facing charges related to alleged phone hacking, bribery and obstruction in

a continuing trial at London’s Cen-tral Criminal Court They and five other defendants have pleaded not

guilty to the charges

The charges are centered around allegations of phone hacking at News Corp’s now-closed News of the World tabloid Ms Brooks and Mr

Coulson both served as top editor at that paper Ms Brooks also edited

the Sun

The men charged in the Elveden inquiry are to appear March 10 be-fore Westminster Magistrates Court

B Y A LEXIS F LYNN

‘Downton Abbey,’ above, is one of ITV’s most popular series, but the broadcaster aims to create more of its own shows.

BUSINESS BRIEFS

Online >>

For more breaking news, go to WSJ.com/Business and follow

@wsjbusiness on Twitter.

Hardly a day goes by without

news of another cyberattack

Sup-posedly well-guarded corporate,

government or consumer data

land in the wrong hands thanks to

crafty hackers who attack

alleg-edly impenetrable networks in

search of valuable data On Jan

30, Yahoo surfaced as one of the

latest victims when the company

disclosed that its users’ email

ac-counts had been compromised In

2013, Target, Neiman Marcus, the

U.S Navy and even Internet

com-panies like Twitter and Living

So-cial, were victims of major

cyberattacks

So it should come as no

sur-prise that U.S intelligence

offi-cials ranked cybersecurity as the

number one threat to U.S

inter-ests during a recent congressional

hearing Despite years of widely

reported and costly break-ins, we

are still woefully deficient when it

comes to protecting our digital

as-sets

The problem is that the

sys-tems and safeguards currently in

use have not kept pace with the

rapid technological changes

Tra-ditional security mechanisms,

such as firewalls and antivirus

systems, are static, difficult to

configure, and even tougher to

update as new threats emerge

Most successful attacks today

are based on so-called zero-day

exploits, meaning that the attacks

have never been seen or used

be-fore They are also able to adaptquickly, so if one approach isblocked by a firewall or antivirussystem, the exploit repackages it-self so as to be undetectable

What’s more, breaches today arepersistent, meaning that once at-tackers get into a system, they areable to hide software carefullythat waits for instructions on how

to proceed In the recent Targetcase, the malware was installedthrough a previously unknownhole in an HVAC provider’s sys-tem, and it remained inside thepoint-of-sale system for months,quietly collecting the personal andcredit-card data of millions of cus-tomers Investigations into howthis breach occurred are still on-going

There is some good news: trepreneurs have paid close atten-tion to these scary scenarios, andthanks to them, better cybersecu-rity measures are on the horizon

En-From June 2012 to June 2013,venture capitalists, angel inves-tors and private-equity funds inthe U.S alone pumped an esti-mated $1.4 billion into the sec-tor—a 29% jump from the previ-ous year, according to researchfirm CB Insights A well-fundednew generation of young privatecompanies is taking cutting-edgetechnologies pioneered at placeslike Facebook, LinkedIn andGoogle, as well as top universities,and turning them against hackers

By relying on machine ing, virtualization and big-data-

learn-analytics techniques, these ups are able to watch in real timefor patterns or anomalies thatshouldn’t be there and, for thefirst time, protect against novelattacks before they happen Manynext-generation approaches tothwarting computer break-ins arealready in advanced trials

start-One company based in SiliconValley, Shadow Networks, creates

a shadow network full of fake chines that act like honey pots, at-tracting and detecting maliciousintrusions Another, Bromium, hasdeveloped a technique to virtual-ize every process running on en-terprise computers to isolatethem and prevent a single infec-tion from taking over an entiremachine or network

ma-Still others are working onbringing massive data-process-ing capabilities to bear on de-tecting malicious players based

on patterns in their behavior

Lastline, backed by our firm, lies on next-generation cloud-based emulation technology todetect previously unseen mal-ware when it attempts to enter

Lastline was able to use its nology to identify and block everyone of them

tech-The continued evolution of bersecurity innovation is essential

cy-if we ever hope to gain the upperhand in this virtual war We knowthat because it has worked before:

In the 1990s, for example, themost common attacks were bufferoverflow attacks, where anattacker takes advantage of thefact that a program expects an in-put to be no longer than a certainlength By moving to higher-levelprogramming languages withbuilt-in protections against theseattacks, such as Java and C#,these attacks were rendered moot

In the 2000s, intrusions calledSQL injections became hackers’

most common tool The two est public hacks of the 2000s,where more than 100 millioncredit-card numbers were stolenfrom retailer T.J Maxx and pay-ment processor Heartland, weredirect results of these types ofintrusions Security researchersquickly responded, founding com-panies like Imperva to defend

larg-against these SQL injection tacks

at-With all the recent high-profileinfiltrations, we might be tempted

to lose faith that anything canstop the incessant and sophisti-cated schemes being aimed at ournetworks That would be a mis-take Yes, plenty of the strategies

in the works today will fail, andnew methods of attack will surelyemerge But if we maintain our in-vestments, we have a real shot atensuring that our digital

information is secure and cybercriminals are shut out

Mr Walecka is a founding ner at Redpoint Ventures, a ven- ture-capital firm in Silicon Valley.

part-All future ries of the Obama

histo-presidency will

an-alyze the phrase,

“leading from

be-hind,” the idea

that the U.S superpower should

behave as no more than a co-equal

partner in managing the affairs of

the world Chapters will be

de-voted to laying this revisionist

template over Libya, Syria and

Iran There is one area, though, in

which the returns are already in

on this new notion of American

leadership: For five years, the U.S

has been leading the world

econ-omy from behind It’s not pretty

Across the post-war period, the

U.S has been the “engine” that

pulls the world economy That

en-gine has sputtered the past five

years, with annual U.S growth

ro-tating around 2% rather than the

historic average of more than 3%

Economies elsewhere are faltering

or choking Even China is

deceler-ating The European Union this

week predicted weak growth

through 2015

After the great recession ended

in early 2009, the normal

post-re-cession growth spike in the U.S

never happened, meaning the

world’s people missed out on a lot

of productive economic activity

And don’t hold your breath cording to the Congressional Bud-get Office’s outlook report thisFeb 4, “The growth of potentialGDP over the next 10 years ismuch slower than the averagesince 1950.”

Ac-Hang around the Washingtonpolitical and pundit class thesedays, and you get the impressionthis doesn’t matter much We’llmuddle through till the magic suncomes out again Raise the mini-mum wage, create more tax cred-its or spend $300 billion pouringfederal concrete, and the cloudswill part

You think so? Let’s try to scribe the future of a slower U.S

de-economy as provocatively as sible, and we’re not talking aboutMedicare bombs If the Americaneconomic engine slows perma-nently to about 2%, you’re going

pos-to see more fires around the worldlike Ukraine and Venezuela At themargin, the world’s weakest, mostmisgoverned countries will pop,and violently

No one in our politics should

be so nạve as to think that in adangerously low-growth world,the U.S won’t have to get “in-volved.” Weakening economiesbreed anger and political volatil-ity, as in the 1930s, and if the

flames get high enough, there will

be U.S boots on the ground where

some-The Arab Spring erupted justthree years ago As in Ukraine or

Venezuela, the scenes from MiddleEastern capitals were the same:

thousands of young demonstrators(a million in Cairo’s TahrirSquare), bonfires and bloodshed

Yes, it’s about political freedomand corruption, but left unseenbecause it can’t be photographed

in these revolutionary contexts isthe reality of economic hopeless-ness

Mainly that means massive lessness, notably among youngpeople It’s 39% in Egypt and 38%

job-for university graduates in sia These are growth revolutions

Tuni-Why are Ukrainians fighting anddying to join the low-growth Euro-pean Union? The EU has a systemthat makes real economic growththeoretically possible, unlike er-ratic Russia Aligned with the EU,

a free Poland has grown, even ifItaly and France have fritteredaway what they had France re-

ported record unemployed thisweek

The U.S and Western Europehave lived through these recentyears with the illusion that eco-nomic mediocrity can’t be so badbecause they’ve had no OrangeRevolutions on their lovelystreets In fact, these vain and de-celerating advanced economies areliving off the accumulated inheri-tance of a century and a half ofgood growth

Angus Maddison, the late andeminent economist for the OECD,produced a famous chart in 1995,depicted nearby For the longesttime—basically from after the Gar-den of Eden until the 19th cen-tury—economic benefit for the av-erage person in the West or Japanwas flat as toast The Mona Lisaaside, there was a reason someoneback then said life was nasty,brutish and short

Maddison describes 1820 til

1950 as the “capitalist epoch.” Hemeans that admiringly The tools

of capitalism unlocked the edge created until then Whatcame to be called “economicgrowth” gave more people jobsthat finally lifted them and theirfamilies from the muck of jobless-ness and poverty Maddison notedthat much of the world never re-ally participated in the capitalistepoch No wonder they revolt now

knowl-This history is worth restatingbecause the importance of strongeconomic growth, and the un-avoidable necessity of a U.S thatleads that growth, may be disap-pearing down the memory hole ofpublic policy, on the left and evenamong some on the right Bothshare the grim view that the U.S

economy is flat-lining, and thefight is over how to divide what’sleft

There is no alternative tostrong economic growth None

They know this in Beijing, Seoul,Kuala Lumpur, Jakarta, Warsaw,Bratislava, Taipei, even Hanoi Themissing piece is a global growthagenda led by a U.S president andtreasury secretary who aren’t fun-damentally at odds with capital-ism The revival of tax reform an-nounced this week by House Waysand Means Chairman Dave Camp

is a start

In a puckish moment, AngusMaddison noted that global in-come inequality was rather mini-

mal in the 11th century Now those

were the days

Write to henninger@wsj.com

[ Wonder Land ]

Next-Generation Cybersecurity Ratchets Up

The Growth Revolutions Erupt

The Capitalist Epoch To Be Continued?

GDP per capita in 1990 international dollars, years 1000-1995

Source: Angus Maddison

$20,000

JapanWest EuropeChina

0

2,5005,0007,50010,00012,50015,00017,500

Thorold Barker, Editor,

Europe, Middle East & Africa

Bruce Orwall, Senior Editor, Europe Gren Manuel, Executive Editor, Europe Terence Roth, Managing Editor, Europe Lauren Berkemeyer, Marketing Kate Dobbin, Communications Florence LeFevre, Institutional Sales Europe Michael Lloyd, Institutional Sales U.K.

Jonathan Wright, Circulation Sales Kelly Leach, Publisher

Published since 1889 by

Dow Jones & Company

© 2014 Dow Jones & Company All Rights Reserved

Silicon Valley is jumping into the effort to find more sophisticated ways of stopping attacks like the one on Target.

Ukrainians want what we’ve

got: The benefits of real

economic growth.

China Sparks Electric Cars With Sales Coming in Beijing

BUSINESS & FINANCE 23

U.K Looks to Be First to Raise Rates

HEARD ON THE STREET 32

Airbus Vows to Fly With Its Own Wings

TOULOUSE, France—Airbus

Group NV, emboldened by strong

fi-nancial results and an order backlogextending well into the next decade,

is turning its back on its longtimeEuropean supporters

Driving the shift in attitude ward the governments of France,Germany, Spain and the U.K is theoverhaul of Airbus’s governance lastyear But a shift in the commercialaircraft market is also at play, saidChief Executive Tom Enders

to-“Ten years ago, almost 50% ofour order intake was coming fromEurope; last year it was less than10%,” said Mr Enders in an inter-view “It shows that for us Europe isless and less important in relativeterms.”

Mr Enders said Airbus has

“walked away” from €623 million($856 million) in loans from Ger-many for the new Airbus A350widebody jet Other governmentshave already ponied up their share,

but the German government had layed its contribution to put pres-sure on Airbus to allocate work inGermany, where Airbus assemblesaircraft and manufactures defenseequipment

de-Airbus will take a similar tackwhen it needs to fund the develop-ment of future aircraft programs inGermany and other countries, said

Mr Enders, relying much less ongovernment support

“Money is important, but what isequally important is not to be hand-cuffed to a certain workshare,” hesaid With interest rates now verylow, the alternative—borrowing incapital markets—is a much more at-tractive option, he added

Mr Enders’s remarks are the est evidence of Airbus’s governanceshift at play The aircraft makersealed an agreement last year tolimit the involvement of the Frenchand German governments and in-crease the percentage of sharestraded on stock markets

lat-Streamlining the company’s

oversight was one of the priorities

of Mr Enders, who served as CEO of what was then known as Eu-ropean Aeronautic Defence & Space

co-Co from 2005 to 2007 before turning to the CEO post in June

re-2012 One of his first moves was totry merging with British defense gi-ant BAE Systems PLC, but GermanChancellor Angela Merkel blockedthe deal, fearing Germany wouldlose influence

Airbus and its trans-Atlantic val Boeing Co have been at logger-heads for years inside the WTO dis-pute settlement system over mutualaccusations that they benefit fromunfair state assistance, althoughAirbus has argued all along that theaid it receives is in the form of re-payable loans, while Boeing gets taxbreaks that don’t have to be repaid.Airbus has received billions ofeuros in loans from European gov-ernments to support the develop-ment of new jetliner models overthe past four decades This includes

ri-a €500 million lori-an from Germri-anyfor the A350 four years ago

A German economics ministryspokeswoman said earlier thismonth that the latest offer to Airbus

“remains on the table.”

Airbus doesn’t need the cash Ithas some €9 billion to €10 billion onits books thanks to booming Airbus

Please turn to page 21

Lego A/S, which is expected to

re-port an abrupt slowdown in its U.S

business in 2013 year after severalyears of heady gains

Closely held Lego is slated topublish its 2013 financial resultsThursday

Soren Torp Laursen, who runsLego’s North American business,said in a recent news release thatU.S sales growth last year “wasmore moderate than the supernatu-ral increases we recorded over thelast eight years.”

Lego’s interlocking plastic brickshave remained wildly popular, even

as demand for other traditional toyshas weakened amid competitionfrom digital games, including mobile

apps that can be played on Apple

Inc.’s iPad Lego has said that U.S

and European toy markets are beingpressured by the flood of new com-petition

The U.S slowdown came ahead

of the launch of “The Lego Movie,”

which has been No 1 at U.S box fices for three successive weeks

of-Lego, which gets a share of the film’stake, has said it expects the movie toboost sales in 2014, both in NorthAmerica and in other markets, such

as Europe

Citing data supplied by NPDGroup, Lego said its U.S consumersales grew 1% to $1.35 billion in

2013, giving the company a 7.8%

share of the U.S toy market and sitioning it as “America’s third-larg-

po-est toy manufacturer.”

U.S sales make up a substantialportion of Lego’s revenue, which to-taled about $4 billion in 2012 Twoyears ago, Lego’s U.S sales soared26%, helped by a strong receptionfor a barrage of new products

Recently, Lego has been signaling

a slowdown It said in Septemberthat sales in North America andLatin America rose 4% in the firsthalf of 2013 Taken with the NPDdata, that means Lego’s momentum

in the Americas essentially came to

a halt in the second half of 2013,likely boosting the company’s reli-ance on better-performing markets

in Asia and Europe

But European demand also pears to be slowing In January,Lego said sales in Germany—anotherkey market—grew 4% in 2013, downfrom 13% in 2012 Germany made upslightly more than 10% of Lego’s

ap-2012 sales

Lego’s U.S struggles reflect awider downturn in the world’s big-gest toy market, which generatesabout $22 billion in annual revenuefor the industry, NPD says

Lego had already been relying onHollywood to help offset the indus-try malaise The company has prof-ited for many years through its tie-ins with popular movie franchisessuch as Star Wars, Harry Potter andthe Avengers But “The Lego Movie”

is taking the company’s affiliationwith the big screen to a new level

Thus far, the movie has pulled insome $183 million at the U.S box of-fice and over $90 million abroad

—Jens Hansegard contributed to this article.

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