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OFF DUTY
ASIA EDITION
VOL. XXXVIII NO. 245
(India facsimile Vol. 6 No. 49)
WSJ.com
FRIDAY - SUNDAY, AUGUST 15 - 17, 2014
InsuranceTitans
Wager on Asia
BY ENDA CURRAN
Reuters
Well-wishers greet Pope Francis, center, upon his arrival at Seoul Air Base in Seongnam, on Thursday, accompanied by South Korean
President Park Geun-hye, second right, who said the pontiffs decision to make the trip demonstrated his special interest in the country.
Pope Kicks Off South Korea Visit

BY DEBORAH BALL
SEOULPope Francis arrived in South Korea on

Thursday for his first trip to
Asia as pontiff, kicking off a
five-day visit that will showcase the Vaticans efforts to
spread the faith on a continent where just 3% of the population is Catholic.
The opening day of the
visitPope Francis third
abroad and the first papal trip

to Asia since St. John Paul II
went to India in 1999included meetings with bishops
and South Korean President
Park Geun-hye, who said the
pontiffs decision to make the
trip demonstrated his special
interest in the country
whose population is 10% Catholicand a desire to bring
peace to a divided continent.
During his stay, the pope
will hold a Mass for reconciliation on the Korean peninsula.

Koreas quest for peace is
a cause close to our hearts,
for it affects the stability of
the entire area and indeed of
our whole war-weary world,
he said during a meeting with
South Korean government officials. (Visit WSJ.com for live
updates on the popes visit to
South Korea.)
Less than an hour before
Walls of the Perth Mint Are a Golden Opportunity

i
the popes plane landed in

Seoul, North Korea fired three
short-range missiles into the
sea. It fired two more around
1 p.m. local time. South Koreas Defense Ministry said
the rockets, launched from
North Koreas east coast,
posed no danger to the popes
Please turn to page 14
Pope Francis telegraphs his

best wishes to China.......... 14
Inside
Dust Worth Hundreds of Thousands; Love to Have a Scrape

BY RHIANNON HOYLE
PERTH, Australia Greg
Cooke knows where gold
worth hundreds of thousands
of dollars is hidden. But like
many people in this mining
city, his problem isnt finding
the precious metal; it is being
able to recover it.
Thats because the gold is
in the form of dust that has
accumulated in the brickwork
of the old Perth Mint since its
founding in the 1890s at the
height of one of the worlds
great gold rushes. Decades of
refining resulted in tiny fragments of gold embedding
themselves in the fabric of the
mints historic melting house.
To paraphrase a well-known
bit of mining lore, theres gold

in them thar walls!
The gold in the walls isnt
visible. You cant see it, said
Mr. Cooke, a gold pourer at
the mint. But the moment
you point it out to people, you
see their eyes darting around
the room with excitement.
Security is unobtrusive in
the melting house, which was
decommissioned in 1990.
Tourists seeking a fix of Australias gold rush history wander around the room pretty
much undisturbed though
they are within spitting distance of the secret hoard.
Id love to have a scrape,
said Sacha Hibbitt, a 19-yearold student from England. I
like gold, and it would be nice
to sell to pay for our trip.

It is a different story at the
mints current gold-refining
hub near Perth airport, 15 kilometers away. There, the mint
doesnt allow visitors and all
employees must be vetted by
the polices Gold-Stealing Detection Unitnicknamed the
gold squad. To get to work
requires passing through
something like airport security, including metal detectors,
while employees every move
is captured by cameras.
In 2011, the Perth Mint
produced the worlds largest
gold bullion coin, weighing
one ton and worth about
US$50 million. The coin had
its own security detail on a
HONG KONGTwo octogenarian insurance magnates

are making bets on Asia. Warren Buffetts Berkshire Hathaway Inc. and Maurice
Hank Greenbergs Starr
Cos. are quietly expanding
their operations, hoping to
capitalize on a fast-growing
market that they believe is
underserved by existing insurers.
In recent months, the two
have been building up their
presences in Asias general insurance market, a sector that
remains dominated by local
players though some foreign
firms, such as Frances AXA
SA, are active here. Mr.
Greenberg, 89 years old, a
former chief executive officer
of American International
Group Inc., completed the
first foreign takeover of a
Chinese state-owned general
insurer last month. The 83year-old Mr. Buffetts firm has
been hiring high-level executives from AIG and others as
it builds up its fledgling commercial insurance business.
The insurance market in
Asia offers so much potential
for growth, said Sally Yim, a
senior credit officer at
Moodys Investors Service.
Thats why these two tycoons are expanding here.
AIG remains one of the
Lenovos Phones Gain

In Emerging Markets
BY JURO OSAWA
Style and
Substance
THE BEST OF FALL FASHION
Chef Niki Nakayama:

First in Her Class
The Fortress
Of Modernism
WSJ.com/magazine
most significant insurers in

Asia, and is working to grow
as well. Already, it has property-casualty operations in
countries including Japan,
China, South Korea, Singapore, Vietnam, Thailand, Australia and Indonesia.
Other foreign insurers, including the U.K.s Prudential
PLC and Germanys Allianz
SE, are also present, selling
life insurance and general
protection policies. But analysts say that in general insurance, outside of auto protection, there are large coverage
gaps in areas from real estate
to aviation. Those underserviced markets, mixed with a
rapidly rising middle class
and relatively strong economic growth, have caught
the eye of Mr. Buffett and Mr.
Greenberg. Premiums in Asia
outside of Japan for property
and casualty insurance grew
almost 15% a year in the decade ending in 2012, compared with 3% in the U.S., according to Swiss Re.
Last month, the Starr
group, led by Mr. Greenberg,
completed its takeover of
Chinas Dazhong Insurance in
the first foreign buyout in the
country of a state-backed general insurer. It originally held
a minority stake.
Mr. Buffetts Berkshire
Hathaway has hired two sePlease turn to page 14
HONG
KONGLenovo
Group Ltd. is on a fast track
to become a significant competitor in smartphonesnot
just in China but also overseas, taking on Samsung
Electronics Co. and Apple
Inc.
Already the worlds largest
personal-computer maker by
shipments, the Chinese company has made significant
progress in smartphones. In
the second quarter, Lenovo
not only became the No. 1
smartphone maker in China,
overtaking Samsung, but was
the No. 4 vendor by shipments world-wide, according
to research firm IDC. Analysts
predict Lenovo could become

an even bigger player after it
completes its acquisition of
Google Inc.s Motorola Mobility handset unit, which the
Chinese company agreed to
buy for $2.91 billion earlier
this year.
Although China is still the
most important market for
our smartphone business, we
think we have even more opportunities outside China,
Chief Executive Yang Yuanqing said in an interview.
Thanks to strong smartphone sales in Southeast Asia,
Eastern Europe and Latin
America, Lenovo said Thursday that its net profit rose
23% to $214 million for the
2 | Friday - Sunday, August 15 - 17, 2014
HK JP ID MU KO ML PH SI TL TW IN
**
THE WALL STREET JOURNAL.
PAGE TWO
Whats News
Inside
Asia News: Darwin

embraces presence of
U.S. marines. 4
European Pressphoto Agency
Indian kite maker Jagmohan Kanojia displays kites, representing the colors of Indian national flag with pictures of freedom fighters and prominent political leaders,
in his home workshop in Amritsar, India, on Thursday. The kites are made especially for Indias Independence Day on Friday.
Business & Finance

n Small protests popping up outside banks and government offices around China have cast a
spotlight on shadow lending. 15
n As Moscows relations sour
with the West, Russias energy
sector is pivoting toward Asia,
with oil exports to the region
jumping to record highs. 15
n China Mobile is on the lookout
for acquisitions to reverse slowing
growth after the worlds largest
wireless carrier by subscribers
posted a drop in first-half profit. 16
n Electrolux held preliminary discussions to potentially acquire GEs
appliances business, joining a group

of other potential suitors considering a deal that could expand their
reach in North America. 19
n Chinas Fosun and French private-equity partner Ardian
dropped their offer to acquire
French resort operator Club Med,
clearing the way for a competing
Italian investor. 16
n Hyundai workers voted to walk
off the job as early as next week
following a series of failed agreements over wage and benefit issues at the auto maker. 18
n The dismissal of a Chinese
cabinet adviser who did work on
behalf of Qualcomm indicates the
confusion over rules regarding re-
lationships between government

advisers and private businesses. 17
n Wal-Mart cut its earnings guidance for the year as it posted another decline in traffic and flat
same-store sales. 17
n Cisco again moved to reduce
costs after reporting a quarter of
little sales growth, saying it cut
about 6,000 employees. 18
n Crown Resorts posted a 66%
jump in annual profit, as strong
earnings in Macau continued to
offset weakness at its hotels and
casinos in Australia. 18
n Vietnam will likely start importing coal next year to keep up
with rising demand, the chairman
of an energy trade group said. 21
World-Wide
n South Koreas central bank cut
its benchmark rate by a quarter
percentage point to 2.25%, joining
government efforts to boost growth.
n A convoy of trucks that Russia
says are carrying humanitarian
aid for cities in eastern Ukraine
headed toward the Ukraine border, while Kiev said it was dispatching its own shipments of aid.
n A fresh cease-fire in the Gaza
conflict appeared to be holding after
Israeli and Palestinian negotiators
meeting in Cairo agreed to extend a
truce to give more time for talks.
ONLINE TODAY
Hong Kong
Korea Real Time
wsj.com/chinarealtime
wsj.com/korearealtime
wsj.com/searealtime
South Korea is
considering easing
its no-fly zone
rules to help
domestic airlines.
Indonesias
counterterrorism
chief says he is
concerned about
the proliferation of
hate speech.
Hong Kong
residents have
gotten wealthier,
but a new analysis
finds the citys
quality of life
continues to slide.
Japan Real Time
Archaeologists report a
rare pyramidlike tomb in
Japan.
wsj.com/japanrealtime
In Depth: Israel
outflanks the White
House. 12-13
Indonesia
The Peoples Money:

China acts as cash
departs. 15
THE WALL STREET JOURNAL
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Friday - Sunday, August 15 - 17, 2014 | 3
WORLD NEWS: ASIA
BY TREFOR MOSS
AND CRIS LARANO
MANILAPhilippine President
Benigno Aquino III, who has been
butting heads with the Supreme
Court over his spending program,
said he is pondering changing the
constitution so he can run for another six-year term.
Mr. Aquino said the judiciary,
which struck down a spending program he created to stimulate the
economy, has grown too powerful
and meddles in the executive
branchs business.
Before all of this happened, I
admit I had a closed mind [to constitutional change], said Mr.
Aquino, who has rejected the possibility of two terms in the past. But
now I am aware of [the threat of]
judicial reach. Congress and the executive can act, but then they can
be punished at any time.
Mr. Aquino made his comments
on Wednesday to local television
station News5, alluding to a Supreme Court decision in July that he
overreached his authority with his
stimulus spending. That court decisionwhich Mr. Aquino is appeal-
inghas sparked an impeachment

drive in Congress, though it is
highly unlikely to succeed.
Asked on Thursday whether Mr.
Aquino wants a second term, presidential spokesman Herminio Coloma
said the president would listen to
his bosses, the Filipino people in
deciding how to ensure that the reforms and transformation that he
has begun will continue and will become permanent.
While the publics view of Mr.
Aquinos administration has deteriorated, it is still generally favorable:
A survey released on Monday by Social Weather Stations, a Philippine
polling firm, found that 56% of people were satisfied with the governments performance, while 26% were
dissatisfied.
Presidents are limited to one sixyear term under the 1987 constitution enacted during the presidency
of Mr. Aquinos mother, Corazon
Aquino, who served from 1986 to
1992.
The term limit was introduced in
reaction to Ferdinand Marcoss 20year rule, which was marked by corruption and human-rights violations.
The next election is slated for

May 9, 2016, with Mr. Aquino due to
step down the following month.
Vice President Jejomar Binaya
member of the opposition United
Nationalist Allianceis the early favorite for the presidency.
Mr. Binay on Thursday urged Mr.
Aquino not to take advice to try to
run again from quarters with
vested interests who are driven
mainly by self-preservation.
Three possibilities exist to
change the constitution, but the
clearest route for Mr. Aquino would
be to get the backing of three-quarters of Congress, which his coalition
firmly holds, and then a majority
vote in a national referendum.
Ramon Casiple, executive director at the Institute for Political Reform, a Manila-based advocacy
group, said Mr. Aquinos Liberal
Party lacks a strong presidential
candidate for 2016, but he warned
that a bid to change the constitution
could split the ruling coalition and
instigate a political battle.
It also could create instability as
Mr. Aquino tries to persuade foreign
investors to pump more money into
the Philippines, Mr. Casiple said.
Reuters
Aquino Weighs Pursuit of Second Term
Mr. Aquino speaks at armed-forces headquarters in Quezon City on Thursday.
WORLD NEWS: ASIA

Eyes on Australian Skies
Australian bases a lure for U.S. forces
Robertson Barracks
Royal Australian Airforce Base Darwin
Darwin port
RAAF Base Tindal

CPL Craig Barret/Commonwealth of Australia/Agence France-Presse
Pakistani
Protesters
Head for
Islamabad
RAAF Base Curtin

RAAF Base Townsville
BY SAEED SHAH
ISLAMABADThousands of protesters led by former cricket star
Imran Khan set out on Thursday to
march on Islamabad, aiming to
bring down a government they accuse of stealing last years election.
The looming confrontation has
renewed the political role of the
military, casting some doubt on the
strength of democratic institutions
in a nuclear power that has seen
several coups and has been ruled by
the army for half its history.
Dubbed a Freedom March by
Mr. Khan, the caravan of cars and
buses began on Thursday afternoon
from the eastern city of Lahore, the
provincial capital of Punjab and the
power base for Prime Minister
Nawaz Sharif. Mr. Khans following
was bolstered by cleric Tahir ul
Qadri, who is leading thousands in a
separate demonstration on the road
from Lahore to Islamabad. Despite
some fiery rhetoric, leaders have
said the protests will be peaceful.
You have to fight for freedom,
you have to snatch freedom, Mr.
Khan told the crowd as his march
began. We will reach Islamabad
and there, we will see the dawn of a
new Pakistan.
The 300-kilometer journey normally takes about five hours by vehicle, but with the slow-moving
demonstrators arent likely to reach
the capital before Friday morning.
Ahead of the protest, which coincided with Pakistans Independence
Day, the government had used shipping containers to seal off roads in
both Lahore and Islamabad to hinder the marches, while gasoline has
also been in short supply.
The government said on Thursday, however, that it would allow
both protest rallies to travel to Islamabad. At the start of this month,
the government had authorized the
military to deploy hundreds of soldiers in Islamabad to bolster civilian
law enforcement.
Political insiders said the military was playing a mediating role
between the protesters and the government. In particular, some politicians have pointed to a meeting on
Wednesday between the army chief,
Gen. Raheel Sharif, Interior Minister
Chaudhry Nisar Ali Khan, and Shahbaz Sharif, the chief minister of
Punjab and the prime ministers influential brother.
After the meeting, the interior
minister said the armed forces of
Pakistan are not involved in this entire issue at all. The military didnt
respond to a request to comment.
The protesters also appear to be
looking to the military. Mr. Khan is
demanding early elections and the
resignation of Mr. Sharif, but as he
has a majority in Parliament, analysts said only military intervention
can bring this about. Mr. Khan, in a
television interview Tuesday, said
he wanted a government of technocrats to oversee a new election.
At a ceremony in the city of
Quetta on Thursday, Mr. Sharif, appearing with the general, said in a
speech: Can there be a bigger freedom march than Pakistans civil and
military leadership sitting together
to celebrate Pakistans Independence
Day?
Qasim Nauman
contributed to this article.
RAAF Base Learmonth
HMAS Stirling naval base
AUSTRALIA
Air-to-air air-weapons range
Air-weapons range
Offshore training area
Ground exercise/training area
Sydney
Source: Department of the Prime Minister and Cabinet
Seven nations are participating in the Pitch Black combat exercises in Darwin.
The Wall Street Journal
Darwin Embraces U.S. Marines

BY ROB TAYLOR
DARWIN, AustraliaU.S. warplanes are thundering across the

tropical sky here every day this
week as they participate in one of
Asias biggest air combat exercises.
Their presence also points to the
growing importance U.S. and Australian defense officials place on
this remote port city, and its rugged
Outback surroundings, as Washington looks for more places where it
can expand its military footprint in
Asia without triggering too much of
a backlash.
The U.S. is gradually ramping up
the number of Marines at a base
outside of Darwin, after President
Barack Obama announced plans in
2011 to eventually rotate 2,500 of
them through the area for six
months every year. And as senior
U.S. officers tour the area this week
for the biennial Pitch Black military
exercises, which bring together
fighter aircraft from seven nations,
it is becoming clearer that both the
U.S. and Australia want to do more
in the areaand other parts of Australia, as well.
Both countries have ruled out
the idea of permanent bases on Australian soil. But Washington and
Canberra have said in recent months
they are considering additional deployments of American aircraft
through northern Australia, as well
as potentially bringing more U.S.
warships and submarines to Australian ports.
I know that everybody wants to

see as many visits from U.S. ships as
they can have, Australian Defense
Minister David Johnston said
Wednesday at Robertson Barracks, a
sprawling army base on a dusty
scrub plain just outside of Darwin,
where around 1,150 Marines are living and working from beige huts
known locally as dongas.
The U.S. is focused on getting
the Marines deployment up to full
forceexpected in 2016and getting U.S. Air Force aircraft out here
in more numbers and more frequently, U.S. Marines Liaison Officer Col. Javier Ball said in an interview Thursday. The possibility of
more naval visits was a good idea,
he added, though he said it wasnt
yet approved.
U.S. Secretary of State John
Kerry and Defense Secretary Chuck
Hagel and their Australian counterparts, Foreign Minister Julie Bishop
and Mr. Johnston, signed an agreement this week that called for the
two sides to share costs of additional barracks, mess halls and
training facilities in northern Australia.
U.S. officials have also said they
would like Australia to participate
in an Asia missile ballistic shield it
is developing with Japan, a move
that some military analysts say
would likely include the use of a sophisticated Australian radar network that is believed to be capable
of detecting stealth aircraft and
missile launches far away in Asia.
Australias government, meanwhile, is working on a new strategic

blueprint to be completed by next
year that will aim to better align the
Australian and U.S. presences in the
north, already home to more than
15,000 Australian personnel and
support stafftwo-thirds of the
Australian armys total combat
power. A force posture review in
2012 recommended placing more
military assets in northern Australia, nearer to the billions of dollarsworth of oil and gas deposits off the
countrys northwest seaboard, including ones involving Chevron
Corp. and other U.S. companies.
Canberra is working on
plans to better align with
U.S. forces in the north.
The moves come as Washington
seeks to expand its presence in Asia
as part of its touted pivot to the
region, aimed at reassuring allies
about Americas staying power there
as Chinas military and economic
might grows. But U.S. officials have
to tread lightly to avoid raising
alarms in Beijing, which has expressed skepticism over the U.S.
shift in the region.
Col. Ball said there was no link
between additional Australian deployments and regional concerns
over a more-assertive China.
Northern Australia, for its part,

appears happy to participate. Although Darwin has boomed in recent years, largely due to energy investments nearby, it has only about
135,000 people.
It has vast, largely unpopulated
areas ideal for carrying out live-fire
drills. It is close enough to the rest
of Asia that it can serve as a useful
staging ground for humanitarian or
other missions. Yet it is far-enough
away that it remains relatively insulated from enemy missile launches.
And unlike places such as Okinawa in Japan or parts of the Philippines, U.S. military personnel remain generally popular.
Wed love to see more of them,
says Ruth Dargan, a bartender at
the Shenannigans Irish pub in one
of Darwins shopping districts, popular with visiting U.S. sailors and
Marines for pints of Kilkenny cream
ale. They come in small groups.
They are polite. Theyll buy the
whole bar a pint.
To maintain support, the Pentagon has crafted a public-relations
approach whereby only groups of
six or fewer Marines may leave Robertson Barracks at a time to avoid
drawing attention around waterfront bars and shops.
Before they came there was
some apprehension. Right or wrong,
they had a reputation for trouble to
quash, and they have quashed it,
says longtime Darwin government
worker Tricia Marcato. People have
been pleasantly surprised.
Afghan Election Rivals Remain at Odds

BY NATHAN HODGE
KABULNew strains emerged in
Afghanistans delicate political transition, just a week after U.S. Secretary of State John Kerry traveled to
Kabul for the second time in a
month to defuse a political crisis
concerning who will take over from
President Hamid Karzai.
As the vote audit for a disputed
election remains painfully slow and
a crucial deadline looms, fresh suggestions of political fraud have
emerged, along with provocative
comments from a key player.
Former Foreign Minister Abdullah Abdullah and former Finance
Minister Ashraf Ghani are vying to
succeed Mr. Karzai, who must step
down after more than a decade in
power. But the failure of a June 14
runoff to produce a clear winner led

to a political standoff that brought
the country close to civil war.
Gov. Atta Mohammad Noor of
northern Balkh province was at the
center of the deepening crisis: In
early July, he declared he would
only recognize an Abdullah-led government, raising fears of secession.
In an interview Thursday, Gov.
Atta warned that Mr. Abdullahs supporters would take to the streets if
Mr. Ghani was declared the winner. A
Ghani victory, he added, would be
seen as a foreign imposition.
We have accepted the agreement to have a national unity government, and the results should be
transparent, he said. We support
these two points but we do not see
honesty in our counterpart. Its
clear that the world should not im-
pose anything on us.

Mr. Kerry met the candidates
last week to encourage them to stick
to a political deal that would pave
the way for an inclusive government, with the losing candidate selecting a chief executive officer in a
new administration.
The defining of that post has
sparked contention between the two
camps as they discuss the implementation of the political deal and
try to resolve major differences
about how to forge a national unity
government.
Mr. Ghani said this week that the
chief executive officer would serve
at the presidents pleasure, suggesting the new post could be dismissed
as easily as it could be created.
The position of CEO is derivative from a decree by the president,
by the next president, he said in a

press briefing Tuesday. Until we
amend the constitution, the position
of the CEO solely depends on the
discretion of the president.
Added Mr. Ghani: Its not called
a government of dual authority or a
coalition, its called a government of
national unity.
U.S. and international officials
say Afghanistan needs a new government before a North Atlantic
Treaty Organization summit the
first week of September, when
member states will decide whether
to commit to a post-2014 trainingand-assistance mission after the
withdrawal of combat troops at the
end of this year.
Ehsanullah Amiri
and Habib Khan Totakhil
WORLD NEWS: ASIA
Top U.S. Military Officer Visits Vietnam

HANOIThe U.S.s top-ranked
military officer met his Vietnamese
counterpart here Thursday, as the
U.S. capitalizes on tensions between
China and its Asia-Pacific neighbors
to revamp its own regional alliances.
Gen. Martin Dempsey became
the first chairman of the Joint
Chiefs of Staff to visit the Southeast
Asian country since the Vietnam
War. Vietnams Defense Ministry
said in a statement that he and Gen.
Do Ba Ty, the chief of General Staff
of the Vietnam Peoples Army, discussed future cooperation between
the American and Vietnamese militaries.
The move is the latest initiative
on the part of Washington and its
Asian allies to boost the defense capabilities of Southeast Asian countriesnotably Vietnam and the Philippinesthat are struggling to
stand up to China in their territorial
disputes in the South China Sea.
Gen. Dempsey told reporters in
Hanoi that traveling to Vietnam had
become a top priority for him. His
visit came a week after Sen. John
McCain, also in Hanoi, said he
hoped the U.S. would begin easing
its restrictions on lethal arms exports to Vietnam as early as next
month.
While cutting-edge U.S. weaponry may be beyond Vietnams financial means, military analysts say
Hanoi is interested in acquiring
used American systems such as P-3C
Orion surveillance planes, which the
U.S. is in the process of retiring.
Vietnam has also begun accepting used Japanese equipment. On
Aug. 1, Japan announced that it
would give Vietnam six secondhand
vessels, which could be converted
into patrol boats.
Hanois relations with Washing-
Reuters
BY VU TRONG KHANH
AND TREFOR MOSS
Gen. Martin Dempsey, the U.S.s top-ranked military officer, reviews the honor guard during a welcoming ceremony at Vietnams Defense Ministry in Hanoi.
ton and Tokyo have been warming
in recent years, while its ties with
China have come under severe
strain. The U.S. and Vietnam forged
closer ties last summer when Vietnamese President Truong Tan Sang
visited the U.S., while Tokyo and Hanoi signed a strategic pact in March
and pledged to expand joint maritime security efforts.
Vietnams concerns about Chinas
rising power sharpened in May,
when Beijing deployed an oil rig to
waters claimed by Vietnam. The deployment led to tense encounters
between Vietnamese and Chinese

vessels and triggered riots in Vietnam that left at least three Chinese
nationals dead and hundreds of foreign-owned factories damaged. The
drilling rig was moved out of the
contested area last month.
In early August, China rejected
U.S. and Philippine proposals at the
Asean Regional Foruman annual
meeting of Asian foreign and defense ministers, held this year in
Myanmarfor a freeze on potentially provocative acts in the South
China Sea. Chinas dismissal of the
initiative raised fears that the pattern of regular flare-ups would continue, as Beijing asserts its claims in
the face of complaints from Southeast Asian countries.
The Philippines, like Vietnam,
has responded to what it regards as
Chinese aggression by seeking to
improve its military capabilities.
Last month, the U.S. State Department said it had approved a Philippine request for the sale of two secondhand C-130 Hercules transport
aircraft to Manila for $61 million.
This week, Manila also said it
was proceeding with the purchase

of 10 new patrol boats from Japan,
funded by a $181 million loan provided by Tokyo.
South Korea also said in June
that it planned to donate a secondhand warship to Manila. Seoul had
earlier secured a $410 million order
for new fighter jets from the Philippines.
Gen. Dempsey is scheduled to
meet Vietnamese Prime Minister
Nguyen Tan Dung and Defense Minister Phung Quang Thanh later in
his visit, which concludes Saturday.
Japan Protests Drill At Perth Mint, Walls Are Golden

By Russia in Pacific
BY YUKA HAYASHI
TOKYOTokyo lodged a protest
with Moscow after Russia began a
large-scale military exercise at a
northern Pacific island chain that
Japan also claims, a further setback
for Prime Minister Shinzo Abes
bumpy efforts to strengthen ties
with the northern neighbor.
Japans foreign ministry said it
summoned a top official from the
Russian embassy on Wednesday to
complain about the military drill,
which began Tuesday. Tokyo said
that the event was taking place
around the four islands north of
Hokkaido that are known as the
Northern Territories in Japan and
the southern Kurils in Russia. The
dispute over the island chain has
strained relations between the two
countries since World War II.
The Russian Defense Ministry
said the exercises involved more
than 1,000 troops and approximately 100 pieces of military hardware, along with the participation
of the air force, army and a task
force of the Pacific Fleet, according
to Russian news agency Interfax.
The drill included a landing of Russian airmen from helicopters on one
of the islands.
These are routine exercises, a
stage of the training of multi-service
forces and units of the district, Col.

Alexander Gordeyev, a spokesman
for Russias eastern military district,
told Interfax.
Through several summit meetings over the past year and a half,
Mr. Abe had established personal
ties with President Vladimir Putin.
Officials in Tokyo had hoped
such efforts would result in more
economic cooperation, particularly
in the energy sector, as well as
progress in the island dispute. But
the conflict in Ukraine has prompted
Japan to follow the suit of Western
nations and impose additional sanctions against Russia, casting a
shadow over the relationship.
This is utterly unacceptable for
our country, Mr. Abe told reporters
when asked about the military drill.
Maritime tensions have recently
flared in the western Pacific as
China has sought to reassert its territorial claims in the region. Russia
has also increased its military activity in the region. During the AprilJune quarter, Japans air force
scrambled fighter jets in response to
Russian aircraft on 235 occasions,
compared with just 31 a year earlier,
according to Japans Self-Defense
Forces. For the year ended March,
Japan reported 359 cases of fighter
jet scrambles in response to Russian
targets, up from 248 a year earlier.
Continued from first page

recent roadshow around Europe and
Asia, even though it takes heavylifting equipment to move it around.
When 14 of the 15 old furnaces in
the Perth Mints melting house were
scrapped, they were crushed and
around 18 kilograms of gold was recovered, worth around US$800,000
at todays prices. That inspired
management to look a little higher,
sending a young worker up for days
to scrape the ceiling for gold.
It is one of those old corrugated
roofs, so we got a young kid on a
cherry picker, hoisted him up with a
wire brush and told him to start
scraping, said Mr. Cooke. He recovered an extra 1.5 kilograms.
Around the time the mint was
founded in the 1890s, thousands of
people were working on gold deposits in Western Australia. Among
them was a young American engineer named Herbert Hoover, who
managed the Sons of Gwalia mine
for a year before returning to America. He became the 31st president of
the U.S. in 1929.
Nuggets unearthed in the red
clay of the Outback were brought to
Perth to be melted down into gold
bars or coins.
How the gold came to end up in
the mints walls is explained by the
old technology. For decades, gold
was refined using charcoal and
coke, which were variable in temperature. When the furnaces got too
hot, sometimes reaching 1,700 de-
Greg Cooke, harvester of gold dust

grees Celsius, it caused the gold to
vaporize and lodge itself in the
brickwork.
In the 1950s, officials became so
worried by the scale of the losses
that they installed a device in the
mints main smokestack to catch
gold dust.
Mr. Cooke believes there is still
more gold in the walls of the mint.
All I want to know is who does the
cleaning? said Julie Bitton, 48, who
was visiting the mint from New
South Wales.
Still, harvesting the precious
metal isnt likely to happen soon, if
at all. Golds appeal cuts little ice
with Western Australias heritage
officers who demand the walls remain untouched because of the
buildings heritage listing. This
years massive renovation of the old
mint, which stands on the same site
where it was established, excluded

the melting house.
It is important that works to
heritage places are undertaken with
care to try to protect the elements
that tell the individual stories of a
place, said State Heritage Office
Executive Director Graeme Gammie.
That includes protecting old woodwork and even original paint.
Disappointed prospectors should
draw comfort from the fact that
gold is found in plenty of unusual
placesfrom termite mounds to the
human body.
Last year, Australian scientists
found that eucalyptus trees in the
Outback were drawing gold particles
up from the soil via the trees root
system and depositing them in their
leaves and branches. Alas, these
nuggets are only about one-fifth the
diameter of a human hair.
Back at the old mint, Mr. Cooke
says the brick walls arent the only
hidden store of gold. Officials carry
out nearly 50 gold-pouring demonstrations for tour groups each week,
and residue of the precious metal
that remains in the clay-and-graphite pots needs to be recovered. Every two weeks, the pots are crushed
to recover gold worth as much as
US$200 apiece.
We lose a gram of gold a day in
the furnace or the pots or from
spilling, Mr. Cooke said. That is an
ounce a month and might not sound
like a lot, but it is a lot for our accountants.
WORLD NEWS
Locals Say Help Still Needed for Yazidis

Conditions Appear to Have Improved for Group Fleeing Islamic State Offensive, but Some Remain on Mountain
DOHUK, IraqThousands of Yazidi refugees on an Iraqi mountainside still need aid, even though U.S.
airstrikes and airdrops appear to
have improved conditions there, according to some local officials and
families that have escaped.
The U.S. on Wednesday dispatched a small assessment team
that spent 24 hours in the Sinjar
Mountains and concluded that a
large number of the trapped members of Iraqs Yazidi religious minority had already managed to flee. U.S.
officials said the assessment makes
it unlikely the U.S. military will
carry out a risky evacuation, which
had been considered.
U.S. President Barack Obama said
Thursday that the U.S. airstrikes had
broken the siege that had trapped
the Yazidis. The situation on the
mountain has greatly improved, and
Americans should be very proud of
our efforts, Mr. Obama said. Because of the skill and professionalism of our military and the generosity of our people, we broke
the...siege of Mount Sinjar, we
helped vulnerable people reach
safety and we helped save many innocent lives.
The U.S. assessment appeared to
surprise local Iraqi officials and disappoint some Yazidis who have relatives still on the mountains.
How much can a small team of
people see in a mountain that is 64
kilometers [40 miles] wide? There
are valleys and caves where people
are living, said Shawkat Othman, a
director for Dohuk city in the province of Dohuk, where thousands of
displaced Iraqis have sought refuge.
I am sure they didn't see 10% of
Sinjar, Mr. Othman said, referring
to the U.S. team. Theres still a big
crisis in this area with several thou-
Associated Press
BY NOUR MALAS
AND JOE PARKINSON
An Iraqi Yazidi woman and her daughter take shelter under a bridge in the city of Dohuk in northern Iraq on Thursday.
sand people there. Its a crisis as
long as militants are around the
mountain.
For the past week, officials from
Iraq, the U.S. and international aid
agencies have offered different estimates on the number of Yazidis on
the mountains, which was besieged
on one side by the militant group
calling itself Islamic State. They also
have struggled to keep track of how
many were successfully fleeing each
day across different routes.
The United Nations refugee
agency said Thursday that some
95,000 people have left the Sinjar
area since Aug. 6. At least 15,000 of
those are living in a camp across the

border in Syria and 80,000 have
crossed into Dohuk province, in the
Kurdish region of Iraq, said Ned
Colt, an agency spokesman in Iraq.
Just last week, the U.N. gave a rough
estimate of 40,000.
Marzio Babille, the Iraq representative for Unicef, said that in the
past two days, high numbers have
been flooding out. About 2,000 remain, he said, including some who
dont want to leave the mountain.
He was watching refugees being
transported in trucks and pickups
across a makeshift bridge connecting Iraq and Syria.
Zuhair Lazgeen, a Yazidi activist

living in Dohuk who has relatives on
Sinjar, said thousands of people
were still left on the mountainside.
Their conditions appear to have improved, he said, except for the elderly or sick.
Elderly people who cant or prefer not to walk cannot leave, Mr.
Lazgeen said. My relatives are
starting to say, you can smell the
dead people. Everywhere you go.
The Yazidis have been escaping
their mountain hide-outs using different ways and routessome fleeing along the base of the mountain,
others going across the border to
Syria with the help of a Kurdish militia, or more recently, being plucked
to safety in helicopter rescues.
The chaos around their plight
and the complicated ways they are
getting out with many players involved has limited visibility across
the rugged mountainside and challenged policymakers.
Mr. Colt of the U.N. refugee
agency said the agency doesnt have
its own people in the areas affected
and can register the refugees only
crossing out into Dohuk. But he said
there was anecdotal evidence from
those arriving into Dohuk on Thursday that the route was now safe, and
that some families are returning to
either pick up relatives en route or
belongings they need.
In the Kurdish border town of
Zakho, now home to thousands of
displaced Yazidis, many refugees
disagreed with Washingtons assessment that those still on Mount Sinjar could leave.
Some said the route off the
mountain has been secured by the
Syrian Kurdish militia called the
Peoples Protection Units, or YPG,
but that many refugees were still
too afraid to leave.
The YPG are controlling it and
ferrying people out on trucks, focusing on the most vulnerable, said
Marwan Sabri, 34 years old, who
said he walked down from the
mountain with 11 of his family. But
Mr. Sabri said there is no food on
the route, and he saw only two helicopters carrying emergency aid.
Hero Mirza, a 40-year-old market-stall owner, said that thousands
on the mountain were trapped or
too weak to leave. Mr. Mirza said he
arrived in Zakho on Thursday carrying his 90-year-old mother.
The corridors to walk across the
Islamic State lines are shifting and it
is very dangerous, Mr. Mirza said.
Many are too scared or too weak.
Euro-Zones Economy Stalls as Germany Weakens

BY BRIAN BLACKSTONE
AND WILLIAM HOROBIN
FRANKFURT The euro-zone
economy stalled last quarter after
12 months of weak growth, with
German output falling more than
expected, underscoring concerns
that the region is mired in a deep
rut of high joblessness and weak
consumer prices that could worsen
amid tension in Ukraine and the
Middle East.
Gross domestic product in the
18-member currency bloc was flat
in the second quarter compared
with the first, the European Unions
statistics office said Thursday. That
translated into 0.2% growth in annualized terms, down from the first
quarters 0.8% pace. European equity markets fell and safe-haven
government bond markets rallied
early Thursday as national figures
trickled out in advance of the regionwide figures.
The weak recovery leaves the
euro zone lagging other advanced
economies, such as the U.S. and the
U.K., which have experienced
firmer, albeit uneven, expansions.
Those economies have recouped
the output lost in the aftermath of
the global financial crisis in 2008
and 2009. The euro zone has yet to
do so and remains 2.4% below its
precrisis peak, leaving it vulnerable
to outside shocks from Ukraine,

Russia and elsewhere that could tip
it back into recession.
The euro zone will probably remain stuck in stop-and-go mode,
said Peter Vanden Houte, an economist at ING, in a research note.
The report will likely put added
pressure on the European Central
Bank to do more to spur growth
and boost inflation, which at 0.4%
is far below the banks target of
just under 2%. The ECB has forecast 2014 GDP growth of 1%, but
analysts at consultancy Capital
Economics said it would probably
be 0.5% to 0.7%.
In June, the ECB cut its key interest rates and introduced a new
program of cheap loans to banks
that are intended to be passed on
to businesses.
But some economists say the
central bank should go further and
engage in large-scale purchases of
public and private debt to reduce
borrowing costs and add to the
money supply.
The euro zones three largest
economies, which account for twothirds of the regions 9.6 trillion
($12.8 trillion) GDP, failed to grow.
German GDP shrank 0.2% from the
first quartera bigger drop than
economists had expectedand Italys output fell at a similar pace.
The French economy, the blocs
second largest behind Germany,

stagnated for a second straight
quarter.
Some softness had been expected in Germany. Its economy
grew sharply during the first quarter as an unusually warm winter
boosted construction, making some
payback likely. Germanys statistics
office Destatis said Thursday that
net trade was a drag last quarter,
as import growth outpaced exports.
The meager recovery

leaves the currency bloc
lagging other advanced
economies, such as the
U.S. and the U.K.
Construction declined, but Destatis
said this was due to projects being
pushed forward because of the unusually mild winter. Both private
and public consumption rose.
Geopolitical uncertainties likely
had only a small effect on Germany
last quarter, analysts said, given
that the crisis in Ukraine intensified last month and the effects of
sanctions imposed by the U.S. and
EU on Russiawith countersanctions from Moscowhave yet to be
felt. Recent German business surveys suggest these risks are starting to weigh heavily on sentiment.
Were seeing the crisis worsen
in Ukraine and Russia as well as a
difficult political situation in the
Middle East, Kasper Rorsted, chief
executive of German consumer
products company Henkel AG, said
Tuesday. The situation remains
volatile, and we dont see it changing any time soon.
In France, poor second-quarter
growth has upended the governments plans to bring down its budget deficit, only a month after Paris
adopted a revised budget to try to
stay on track.
President Franois Hollandes
government had been banking on
1% growth this year to bring the
deficit down to 3.8% of GDP. But in
an editorial published in Le Monde
on Thursday, French Finance Minister Michel Sapin wrote that the
economy is now likely to grow just
0.5% this year, and by no more than
1.0% next year. It is better to admit what is than to hope for what
wont be, he wrote in the editorial.
Although it remains the weakest
part of the global economy six
years after the onset of the financial crisis, the euro zone echoed a
litany of similarly sour reports this
week from Asia, all pointing to
signs of sudden weakness among
many major economies.

Japan reported a sharp contraction in the second quarter as output fell 6.8% following an April increase in the countrys sales tax.
Japanese officials remain confident
the economy will improve the rest
of the year, but the drop in consumer spending have raised alarms
that the government may have to
turn to added stimulus measures
and put off a further sales-tax increase this fall.
In China, the central bank reported Wednesday that the broadest measure of new lending had
plunged by two-thirds in July from
the previous month, setting off
alarm bells that the worlds second
largest national economy might be
heading for a hard landing. Analysts argued such concerns were
overblownJuly is often a down
month for credit and Junes credit
growth had been exceptionally
strong.
Even so, the credit figures suggested that several months of
mini-stimulus spending on infrastructure, transportation and information technology and eased liquidity by the central bank hasnt
done much to lift the economy. Industrial production, for instance,
increased 9%, year over year in
July, about the same growth rate as
it had in June.
OPINION: REVIEW & OUTLOOK
Beijing vs. Foreign Capitalist Roaders
i Jinping may be an economic reformer, but he is also proving to

be an economic nationalist. Under
his leadership, Beijing has stepped up
regulatory harassment of foreign businesses, most recently using a 2008 antitrust law. This may shore up the Communist Partys populist street cred, but it is
remarkably short-sighted for a leader
who is supposed to rule China for the
next decade.
Regulators from the National Development and Reform Commission have targeted some big names, including Microsoft, Qualcomm, Daimler and General
Motors. Agents raided offices and warned
companies not to challenge the investigations.
The heavy-handed tactics have raised
suspicions that this campaign is politically motivated. On Wednesday the European Union Chamber of Commerce protested the new tactics: Competition law
should not be used as an administrative blocks because of concerns about the Chiinstrument to harm targeted companies nese governments hacking programs.
or serve other aims, such as administraSo Beijing has put its thumb on the
tively forcing price reductions. The U.S. scale to give domestic firms a leg up. For
Chamber of Commerce
instance, regulators are inChina uses antitrust vestigating automakers remade a similar complaint
in May.
with local parts
as an instrument of lationships
Smart managers know
suppliers that allow them
that there is no point in economic nationalism. to control costs and ensure
fighting Chinas governquality. Its not clear how
ment. Many have immedithis gives them an advanately cut prices to placate Beijing, which tage over domestic firms. Their main ofonly encourages more actions.
fense seems to be making profits.
The investigations are clustered in inThe offensive against foreign technoldustries in which foreign firms have a ogy firms is even more nonsensical. For
competitive advantage and Chinese firms instance, Microsoft is under investigation
are struggling. Chinese consumers prefer for price-gouging, but it has never made
to buy foreign brands of automobiles, a big profit in China because most copies
which has allowed General Motors and of its software there are pirated. Beijing
others to expand quickly. In the telecom seems to treat intellectual property as an
equipment industry, Chinese firms such as unfair advantage rather than an asset that
Huawei have made inroads into global deserves protection.
markets but recently encountered roadThe irony is that the real monopolists
in China are state-owned companies.

China National Petroleum, the bailiwick of
the recently detained Zhou Yongkang, is
the fourth largest company in the world
by revenues. Perhaps Beijing will eventually get around to deregulating the energy
industry, but its more likely the attacks
on foreign firms will continue as a way to
distract from the huge cost to consumers
from such national champions.
Western nationsEuropeans in particularalso abuse antitrust laws for protectionist purposes, so they cant claim some
great moral superiority. But wise leaders
try to keep market interventions to a minimum because they know that foreign competition benefits their own economy. Mr.
Xi seems to believe in a zero-sum contest
in which Beijing can create world-beating
companies by hobbling the incumbents. As
Chinas growth naturally slows down as a
middle-income country, that is a recipe for
mediocrity and stagnation.
Irans War on Journalism
oon after seizing power in Irans

1979 revolution, Ayatollah Khomeini
vowed that in his new Islamic Republic there would be freedom of expression, pen and views for all. Its fair to say
the regime has honored that promise only
in the breach.
The regimes latest journalistic victims
are Jason Rezaian, the Washington Posts
Iranian-American Tehran correspondent,
his wife, Yeganeh Salehi, herself a correspondent for the United Arab Emiratesbased National newspaper, and two other
journalists, at least one of whom is reportedly a U.S. citizen.
Plainclothes agents on July 22 barged
into Mr. Rezaian and Ms. Salehis Tehran

apartment, according to the New Yorkbased International Campaign for Human
Rights in Iran. They confiscated laptops
and other personal belongings and hauled
the couple to an unknown location. Mr.
Rezaian and Ms. Salehi havent been
heard from since.
A likely destination is the political
wing of one of Tehrans prisons. Its a fate
shared by thousands of less-prominent
Iranian dissidents, including labor and
womens-rights activists, novelists and
filmmakers, Muslim converts to Christianity branded as apostates, and not a few
freethinking ayatollahs, among others.
Its unclear what alleged crime the

Tehran regime will accuse Mr. Rezaian,
his wife and colleagues of committing.
We have no official information regarding the charges against them, an Iranian
foreign ministry spokeswoman said on
Tuesday. President Hasan Rouhani, the
purported moderate who took office almost exactly a year ago, hasnt weighed in
on the case.
Such ambiguity helps feed a media
narrative that the arrests are part of an
effort by regime hardliners to sideline Mr.
Rouhani and his supposedly moderate allies. Its an argument that ignores that Mr.
Rouhani served as a top director of the Is-
lamic Republics security apparatus for

two decades before becoming President.
He cheered the bloody crackdown on the
1999 student uprising and, a decade later,
the even bloodier one on the 2009 Green
uprising.
Then again, even if Mr. Rouhani is
Mikhail Gorbachev in a turban, its unclear
how absolving him of responsibility for
cases like Mr. Rezaian and Ms. Salehis
helps the cause of reform. If Mr. Rouhani is
as powerless as they say he is to stop the
regime from persecuting journalists, then
why should anyone believe the Iranian
President is fully empowered to negotiate
in good faith on the nuclear dossier?
The Advocates Devil
rivacy and national security are often said to be in tension in the U.S.
surveillance debate, so congratulations to Senator Pat Leahy for the feat of
managing to subvert both at once. Thats
the verdict of Judge John Bates, on behalf of the Judiciary, in an unusual letter last week that deserves more readers.
The Article III courts seldom comment
on legislation, but Judge Bates wrote in
his capacity as the director of the Administrative Office of the U.S. Courts. Even
more remarkably, he assails the National
Security Agency overhaul bill that the
Judiciary Chairman is trying to push
through the Senate as counterproductive
and even unconstitutional.
Mr. Leahy is attempting to disinter the
idea of an internal special advocate to
argue against executive-branch lawyers
in front of the secret Foreign Intelligence
Surveillance Court, or FISC. As endorsed
by President Barack Obama, this roving
legal adversary would speak for no client
other than the nebula of civil liberties
and could obstruct fast-moving antiterror investigations.
National security professionals must
have convinced their boss that this devils
advocate was a dangerous idea, because
the House passed a compromise reached
with the Administration in May whose
damage was marginal. The ombudsman

Gutting standing isnt all thats unwas diluted to a standing outside panel of usual, and problematic. We have learned
amici curiae that the FISC would invite to from Edward Snowden and subsequent
opine in cases involving novel or major declassifications that the FISC does not
interpretations of surveillance law.
function like an ordinary court but rather
Judge Bates and likely the majority of comports itself like an executive branch
his colleagues prefer that the advocate policy maker involved in interagency disstay dead, writing that the
putes.
A judge criticizes a
new mandate would raise
This merging of execusubstantial legal questions
tive
and judicial roles viosurveillance bill on
and impede the courts
lates the separation of
work without furthering behalf of the judiciary. powers and frustrates pothe interests of privacy or
litical accountability. This
civil liberties. The FISC
is why these columns, and
typically considers warrant applications such legal eminences as Laurence Silberfor discrete intelligence targets, rather man and Robert Bork, opposed the FISC
than conducting dorm-room seminars on process from its start in the 1970s. The
legal philosophy. He calls it doubtful political irony now is that the same liberthat an ACLU busybody could meaning- als who created FISC now say its inadefully assist the court in developing the quate and needs still another layer of
factual record.
advocate oversight.
Judge Bates also raises potentially
Judge Bates used to lead the FISC and
serious legal issues. The courts are only in a notable October 2011 ruling he
supposed to adjudicate cases and con- clipped the wings of one program as in
troversies under Article III, but the ad- some respects, deficient on statutory and
vocate would be certified to appeal FISC constitutional grounds. His letter is in
decisions to the Supreme Court on any part the unfortunate byproduct of the
abstract question of law, regardless of ju- FISCs view of itself as an intelligence
risdiction. It is unusual, to say the least, and foreign policy consultant, and he
for an inferior court to determine the even showboats that the FISC is hardly
process or participants in Supreme Court a rubber stamp.
proceedings.
Judge Bates argues that the special
advocate will undermine privacy by

harming the relationship between spyagency lawyers and FISC judges. He believes that the FISCs current configuration places additional burdens of candor
on government advocates and the advocate may hinder the FISCs ability to obtain complete and accurate information.
With the seal of secrecy broken to adversaries, the government might become cagey about sharing material that is sensitive or complicates a surveillance
application.
All true, but Judge Bates comes
closer to identifying the real practical
problem when he observes that an advocate might prompt the NSA not to pursue potentially valuable intelligencegathering activities. That objection
applies equally to the FISC itself, to the
extent that the oversight Judge Bates
heralds causes the NSA to dial down
surveillance and collect less useful information to avoid displeasing judges
who will never answer to voters.
Maybe, then, Mr. Leahys main feat is
to come up with something that is more
corrupting to the judiciary and political
accountability than the FISC status quo.
Lets hope Judge Batess remonstrance
causes Congress to bury the devils advocate for good.
OPINION
BY SHEILA LAWLOR
British parliamentarians are
currently in recess, but theyre
likely giving a great deal of thought
to the general election next year.
How should they play the Europe
questionwhether the U.K. should
remain a member of the European
Union and on what termsin the
run-up to polling day?
Talks must start from a clean

sheet on which Londons
arrangement with Brussels
would be set out going forward.
The question is especially portentous for Prime Minister David
Cameron. The Conservative leader
has pledged that if voters return
his party to power, he will renegotiate Britains relationship with
Brussels and put the deal before
voters in an in-or-out referendum. Mr. Cameron recognizes that
a majority of voters in Britain are
skeptical of the EU and that more
voted for the United Kingdom Independence Party, or UKIP, than
his Conservative party in last
springs European Parliament elections. If he can win most of the euroskeptic vote in May, he will be
back in Downing Street.
For this he needs to assure vot-
ers that he seeks, and can indeed

achieve, the radical changes they
want while remaining in Europe, as
he himself wants. To that end, his
government recently shortened the
time EU nationals can claim unemployment benefits in the U.K. to
three months from six. But such
limited measures are unlikely to be
sufficient.
British euroscepticism is essentially pragmatic. It sees a sclerotic
EU system holding back dynamic
economies from what they do best
by imposing burdensome regulations on job-creators and encouraging people to immigrate to highincome nations, not in search of
high-skilled jobs, but of welfarestate benefits. In Britain, for example, immigrants need to earn above
35,000 a year before they become
net contributors to, rather than
beneficiaries of, the tax and welfare system.
How, then, should the prime
minister go about the renegotiation? One of the U.K.s leading EUlaw specialists, Martin Howe, has a
simple but powerful strategy he
calls zero plus. Mr. Howe proposes that negotiations start from
zerofrom a clean sheet on which
Britains arrangement with Brussels would be set out going forward. A new category of EU membership reflecting Londons more
limited relationship with Brussels
could be created. Britain would be
the first member in this category,
European Pressphoto Agency
How to Stay in the EU on British Terms
British Prime Minister David Cameron (right) and European Commission

President-Elect Jean-Claude Juncker.
but it would be open to other
states, including those which
might see it as a transitional stage
to full membership.
The alternative to a zero-plus
start would be to chip away at the
existing treaties. This alternative
wouldnt produce satisfactory results for Britain. Negotiations
would be long and probably inconclusive, as officials in Brussels
would argue endlessly with their
U.K. counterparts over each clause.
Even if substantial changes are
won, it is unlikely that each of the
27 members of the EU would ratify
them, as they would have to.
The zero-plus strategy isnt
aimed at leaving the EU but at remaining within it in a way that is
acceptable to British voters. But it
will be an ineffective strategy unless the government considers all

the options. These must include
that of leaving the EU, if Britains
aims arent met. Otherwise London
would have no leverage and the
negotiations would be doomed to
failure.
Mr. Howes proposal provides a
pragmatic course for renegotiation
through which Britain can uphold
its interests. It should appeal to
most euroskeptics but also to the
shrinking population of europhiles,
who see Britains long-term future
in the EU. A special category of
membership which limits treaty
obligations to mutual free movement of goods, services and capital
would thus have much to recommend it. Such a special category
has its precedents. Already different EU relationship categories exist, for example between European
states in and out of the euro zone.
Moreover, there are many countries outside the EU itself which
enjoy special legal relationships in
their trading with it.
Ultimately, treaties between a
single country and a bloc work because both sides benefit. The present arrangements, in which Britain
is a full (though non-euro zone)
member of the EU arent seen by
the majority of voters as being to
their benefit. And the electorate
has left politicians in no doubt of
its view on the matter. But Britain
sells its goods to EU countries and
benefits from free-trade arrangements with the EU. Most voters
therefore support free trade.
A zero-plus strategy would allow each side to negotiate on the
basis of strong mutual interest to
maintain a trade-based relationship. David Cameron and his colleagues should see it as a practical
way to meet voters wishes. U.K.
leaders should view zero plus as an
expression of Britains tradition of
conservative pragmatism. Its aim,
after all, is simply to preserve
what works well.
Ms. Lawlor is director of the

Politeia think tank in London,
which published Martin Howes
Zero Plus: The Principles of EU
Renegotiation.
Dark Lady of Letters

[ Bookshelf ]
Susan Sontag: A Biography

By Daniel Schreiber
(Northwestern, 280 pages, $35)
BY MICAH MATTIX
When it comes to Susan Sontag,
there are those who dislike both
the woman and the work and those
who just dislike the woman. In the
preface to his biography of Sontagthe first since the essayist
and novelist died in 2004Daniel
Schreiber reluctantly puts himself
in the latter group. Writing on Sontag, the German critic tells us, was
both wonderful and difficult:
Wonderful because I had the
chance to immerse myself in almost everything Sontag had ever
written or said. . . . Difficult, also,
because Sontags character made it
impossible for me to adopt the

tone of unbridled admiration authors of literary biographies usually adopt.
Even readers who have never
opened the New York Review of
Books, where so many of her essays appeared, know the name Susan Sontag. Even those who never
puzzled their way through Notes
on Camp, her provocative 1964 article in Partisan Review that helped
define a certain ironic intellectual
pose, will recall she was one of
Americas most celebrated public
intellectuals. Sontag was famous
for writings on film, photography
and philosophy, as well as for the
striking photographs of her that
appeared in publications like Vogue
and Mademoiselle, which once led
Mary Ellmann to call her the Chanel of the arts. Mr. Schreibers
book, translated from the German
by David Dollenmayer, presents an
opportunity to ask what it adds up
toaside from a sort of intellectual
glamour. And, not least, how did
Susan Sontag become Susan Sontag?
She was born Susan Rosenblatt
on Jan. 16, 1933, in Manhattan. Her
parents lived in China at the time,
where her father ran the Kung
Chen Fur Corporation in Tianjin.
Her mother, Mildred, flew to New
York to give birth but soon returned to China, leaving Susan in
the care of a nanny in the home of
Susans paternal grandparents. Susan would see her parents only a
few months each year until her father died of tuberculosis in 1938,
and her mother returned to the
States. Mildred eventually moved
Susan and her younger sister to Arizona because of Susans asthma,
and in 1945, Mildred married

Nathan Sontag, a pilot in the Army
Air Corps.
Along the way Susan became a
voracious reader. She later claimed
to have read (and understood)
most of the classics and the philosopher Arthur Schopenhauer by the
age of 14. She entered Berkeley for
a semester shortly after the family
moved to Los Angeles but left for
the University of Chicago in 1949,
where she completed its rigorous
Great Books curriculum in just two
years.
It was at Chicago that sociology
instructor Philip Rieff became enamored with the 17-year-old Sontag
after she sat in on a lecture on
Freud. He took her out to dinner
that evening, then breakfast and
lunch the next day. The second evening, he proposed, and the couple
was married 10 days later, which
caused a stir on campus. While the
marriage was initially happy, Sontag and Rieff would divorce eight
years later, shortly after Sontag returned from a year overseas where
she was supposed to be studying at
Oxford but had moved to Paris after only four months. In 1959, she
and her young son, David, moved
to New York City, where she determined to make it as a writer and
oppositional intellectual, as Mr.
Schreiber puts it.
In recounting Sontags early
years, Mr. Schreiber calls attention
to inconsistencies in her own accounts. She claimed, for example,
that she had no idea where her
family was from, even though she
knew her grandparents had emigrated from Lodz. She would later
claim that she was born in Poland
herself. Mr. Schreiber is also
rightly skeptical of Sontags claims

about her own youthful brilliance.
Her idealization of her childhood,
Mr. Schreiber writes, would serve
above all to promote the aura of
genius in which Sontag consciously
wrapped herself later in life.
As a New York intellectual, she
became more notable for the aura
than for the genius. Poet and critic
Richard Howard told Mr. Schreiber
Sontag cultivated an aura of

genius that tipped over into
condescension. She could
not talk to stupid people,
noted one contemporary.
that Sontag could not talk to stupid people. The truth is that she
couldnt talk to anyone she thought
was less important than she was
and could be condescending even
toward those close to heran aspect of her character Mr. Schreiber
mostly ignores in his relatively anecdote-free account. According to
Carl Rollyson and Lisa Paddocks
perceptive 2000 biography of Sontag, she apparently once told her
partner, the photographer Annie
Leibovitz, who had already done
work for Rolling Stone and Vanity
Fair, you may turn out to be a
photographer, after all. Mr.
Schreiber rarely shows us this side
of her character, and he gives perhaps too much weight to the rosier
judgments of Sontags living
friends and associates he has interviewed.
Mr. Schreibers exposition and
occasional defense of her character
occupy a large part of the book. He

is careful to avoid unqualified
praise of her creative work. Her
novels (such as The Benefactor
and The Death Kit) and films
(Duet for Cannibals and Brother
Carl), he all but admits, are
largely derivative. With respect to
her essays, he rightly touts Sontags facility with complex ideas.
Her inaugural collection of essays
Against Interpretation (1966)
proved popular largely because, as
Eliot Weinberger wrote, cloaked in
a familiar and unthreatening critical discourse, it finally brought the
tenets of Dadaism and Futurism
and Surrealism to Riverside Drive.
She was a native voice translating
certain ideas of the European
avant-garde for the American public.
Yet in defending Sontags essay
collection Under the Sign of Saturn (1980), Mr. Schreiber makes a
dubious claim: that it fared poorly
in America because the challenging subject matter was too exotic.
The book included pieces on the
American social critic Paul Goodman, French playwright Antonin
Artaud and fascismhardly The
Cosby Show but not as exotic as
all that. For good or ill, Sontag
seems to have been suited most
naturally to essays and journalismforms that almost by definition are unlikely to deeply influence the culture. This might help
explain why the dark lady of
American letters, so talked about
in her time, left little substantial
mark.
Mr. Mattix is an assistant professor in literature

at Houston Baptist University.
OPINION
BY SCOTT W. ATLAS
The liberal attraction to making
government the sole source of
health-care insurance has not
abated even as the deficiencies in
ObamaCare, a halfway move toward
the single-payer model, have become increasingly evident. The
question is whether growing signs
of single-payer trouble overseas
will be enough to discourage this
countrys flirtation with socialized
medicine.
The government singlepayer model that liberals

aspire to for the U.S. is
increasingly in trouble
around the world.
The Obama administration
showed its hand long ago with the
nomination of Tom Daschle, an advocate for Britains socialized National Health Service, as secretary
of Health and Human Services in
2009. (Mr. Daschle withdrew amid
criticism for nonpayment of taxes.)
The White House installed another
outspoken NHS fan, Donald Berwick, as an interim appointee
(2010-11) to run the Centers for
Medicare and Medicaid Services.
This summer, the Commonwealth Funda private foundation
focused on health care that is a favorite of progressive policy types
issued a report ranking the NHS as
the best medical system among
those in 11 of the worlds most advanced nations, including Canada,
France, Germany, Switzerland and
Sweden. Coming in last: U.S. health
care.
Yet the Commonwealth rankings
are contradicted by objective data
about access and medical-care

quality in peer-reviewed academic
journals. For instance, Americans
diagnosed with heart disease receive treatment with medications
significantly more frequently than
patients in Western Europe, according to Kenneth Thorpe in Health
Affairs in 2007. In Lancet Oncology
in that same year, Arduino Verdecchia published data demonstrating
that American cancer patients have
survival rates for all major cancers
better than those in Western Europe and far better than in the U.K.
Similar examples concerning the
deadliest and most significant
diseases abound in medical journals. One may ask why the Commonwealth Funds health-care rankings published in June dont reflect
that reality. The answer lies in the
reports methodology, which relied
heavily on subjective surveys about
perceptions and experiences of
patients and physicians.
Yet even as the single-payer system remains the ideal for many on
the left, its worth examining how
Britains NHS, established in 1948,
is faring. The answer: badly. NHS
Englanda government body that
receives about 100 billion a year
from the Department of Health to
run Englands health-care system
reported this month that its hospital waiting lists soared to their
highest point since 2006, with 3.2
million patients waiting for treatment after diagnosis. NHS England
figures for July 2013 show that
508,555 people in London alone
were waiting for operations or
other treatmentsthe highest total
for at least five years.
Even cancer patients have to
wait: According to a June report by
NHS England, more than 15% of patients referred by their general
practitioner for urgent treatment
after being diagnosed with sus-
Getty Images/Ikon Images
Where ObamaCare Is Going
pected cancer waited more than 62

daystwo full monthsto begin
their first definitive treatment.
In response the British government has enlisted private care for
help, including most recently
through the Health and Social Care
Act 2012. In May last year, the Nuffield Trust, an independent research and policy institute, along
with the Institute for Fiscal Studies,
the U.K.s leading independent microeconomic research institute, issued a report on NHS-funded private care. The report showed that
over the past decade the NHS, desperate to reduce its ever-expanding
rolls, has increasingly sent patients
to private care. The share of NHSfunded hip and knee replacements
by private doctors increased to 19%
in 2011-12, from a negligible
amount in 2003-04.
In 2006-07, according to the report, the NHS spent 5.6 billion on
private care outside its system.
This increased by 55% to 8.7 billion in 2011-12, including a 76% rise
in spending on nonprimary care,

going to 8.3 billion from 4.7 billion, despite significant reductions
in spending on private care attributed to the financial crisis.
Britons who can afford to avoid
the NHS are eager to do so. Even
with a slight decrease due to the
2008 financial crisis and its aftermath, about six million British
citizens buy private health insurance and about 250,000 choose to
pay for private treatment out-ofpocket each yearthough NHS insurance costs $3,500 annually for
every British man, woman and
child.
The socialized-medicine model
is struggling elsewhere in Europe
as well. Even in Sweden, often heralded as the paradigm of a successful welfare state, months-long wait
times for treatment routinely available in the U.S. have been widely
documented. To fix the problem,
the Swedish government has aggressively introduced private-market forces into health care to im-
prove access, quality and choices.

Municipal governments have increased spending on private-care
contracts by 50% in the past
decade, according to Nringslivets
Ekonomifakta, part of the Confederation of Swedish Enterprise, a
Swedish employers association.
Swedish primary-care clinics
and nursing facilities are increasingly run by the private sector or
receive substantial public funding.
Widespread private competition
has also been introduced into pharmacies to tear down the previous
government monopoly over all prescription and non-prescription
drugs. Though Swedish economist
Per Bylund calculates that the average Swedish family already pays
nearly $20,000 annually in taxes
toward health care, about 12% of
working adults bought private insurance in 2013, a number that has
increased by 67% in five years,
according to the trade organization
Insurance Sweden. Almost 600,000
Swedes now use private insurance,
though they are guaranteed public health care.
The recent Veterans Affairs
scandal, following the disastrous
ObamaCare rollout, was a red flag
about problems of nationalized
health. Now concrete evidence is
coming in from other countries
that have tried it for decades. The
reality is that the key goals for
health-care reformreducing
spending, expanding access to
affordable coverage, preserving
personal choice and portability of
coverage, promoting competition in
insurance markets, and maintaining
excellence in medicinedo not
require government to directly
provide insurance or health care.
Dr. Atlas is a physician and a

senior fellow at Stanford Universitys Hoover Institution.
Want to Defeat ISIS? Help the Syrian Opposition

BY HADI AL-BAHRA
It is said that common foes build
strong partnerships. Long before
the terrorist army of the Islamic
State of Iraq and al-Sham marched
into the Iraqi city of Mosul, threatened to exterminate the Yazidis and
Christians in Iraq, and attacked the
countrys Kurds, the Syrian Opposition and the Free Syrian Army were
battling ISIS and pushing back this
common threat to our people.
Now more than ever, there is a
national-security impetus for the
United States to support and arm
the Syrian opposition to halt and
defeat the ISIS campaign. The current U.S. airstrikes in Iraq will slow
down these Islamic extremists, but
airstrikes are also needed in Syria
to hit at the heart of the ISIS. Defeating them requires the inclusion
in a broader U.S.-backed effort of
the Free Syrian Army and the Syrian tribes who already have extensive experience fighting ISIS.
The conflict has crossed borders
and now threatens to destabilize
the wider Middle East. ISIS could
not have reached Iraq and crossed
into Jordan and Lebanon had the
world heeded our warnings earlier
this yearand formed a regional
strategy to combat this threat by
supporting those of us who have
been fighting these terrorists for

months with little to no outside
support.
We agree with Americas chairman of the Joint Chiefs of Staff,
Gen. Martin Dempsey, who said recently that to effectively handle the
ISIS terrorist threat, the U.S. needs
a partnership with those who can
reject it from inside out. The U.S.
has that partner with the Free Syrian Army and the Syrian Opposition.
To achieve this shared goal, we
need quality military aid, and fast.
We face an existential battle in
Syria against the Bashar Assad regime that is bent on the eradication
of all who oppose it. The slaughtermore than 160,000 Syrians
have been killedis being conducted on an industrial scale. Recent evidence presented by defectors has revealed how meticulously
the killing has been planned by Assad and his Iranian backers.
Yet we have enemies in common
with the U.S. and other potential allies. Before al Qaeda spawned ISIS,
Assads security services provided a
haven for al Qaeda on Syrian territorylong before our revolution
against the Assad regime began in
2011. We have fought ISIS and are
fighting other al Qaeda affiliates in
Syria. In the past few days, the
forces of Assad and Iranian-backed

Hezbollah have been making dangerous advances on the oppositionheld ancient city of Aleppo in
northwestern Syria. ISIS is trying to
aid the advances by pushing deeper
into areas in the north that were
liberated during our revolution
against the regime. This ISIS advance so close to the Turkish border presents a direct threat to us
and to U.S. interests.
Our warnings about the

terrorist group are coming
true. Please send military
aid before its too late.
The Free Syrian Army and tribal
leaders have proven to be the most
effective force in fighting against
ISIS and al Qaeda affiliates. On May
16, Free Syrian Army units in Aleppo
province announced the launch of
an anti-al Qaeda offensive titled Operation Earthquake of the North. On
May 19, five powerful rebel coalitions signed a Revolutionary Covenant denouncing fundamentalism
and extremism. On June 12, the
Free Syrian Armys Southern Front
Command released a statement reit-
erating the rebels commitment to

democratic principles.
We have put forth a blueprint
for stabilizing and freeing Syria
from the threats that endanger
both the Syrian people, regional allies and the West. We have proposed a scalable Syrian Rapid Deployment Force, which would form
the nucleus of a larger stabilization
force of more than 10,000 vetted
and trained fighterscritical to defeating ISIS and Assads killing machine. We are also in the process of
establishing offices and services in
the liberated areas of Syria to support a political framework that will
oversee and coordinate with a military chain of command.
We welcome President Obamas
recent initiative to support us as
the genuine and vetted Syrian opposition with a proposed package
of $500 million for military training
and equipment. This military support will be helpful in the battle
against ISIS, and it will save lives
and prevent further spread of the
conflict regionally.
But this support will not be
enough if it does not arrive quickly
and match the pace of the ISIS advance. Opposition forces will also
need to be enabled with an air-defense capability. We need man-portable air-defense systems (Man-
pads) to defend homes and towns

and villages from the incessant air
bombardment and regime military
assaults. These weapon systems
will not fall into extremist hands
because our forces are actively
fighting those very extremists. We
also know this because the Free
Syrian Army has already benefited
from lethal support from the U.S.,
demonstrating on the battlefield
that it can effectively and responsibly use U.S.-made advancedweapon systems such as the T.O.W.
antitank guided missile. Manpads
must be the next step.
The Free Syrian Army is the tip
of the spear in the fight against
ISIS terrorism. If properly enabled,
our opposition forces have the experience and personnel to turn the
tide on the ground. Together with
the U.S., we can end the suffering in
Syria. In partnership, we can deal a
mortal blow to the terrorist threat
facing both our peoples. But time is
of the essence, as ISIS and Assad
will exploit any delay to destroy
those who stand against them. The
U.S. State Department recently referred to ISIS as worse than al
Qaeda. Given the dire threat, what
could be worse than complacency?
Mr. al-Bahra is president of the

Syrian Opposition Coalition.
BOOKS
One of Us
A Spy Among Friends
By Ben Macintyre
Crown, 368 pages, $27
Kim Philbys duplicity has appalled and fascinated his compatriots for over half a century. During
the 1940s he was an efficient, debonair and popular officer in the U.K.s
Secret Intelligence Service (MI6)
who was expected to rise to its highest level. All the time, though, he
was spying with ruthless efficiency
for Soviet Russia, remitting many
damaging Anglo-American secrets to
Moscow. Hundreds died because of
his treachery.
In his fluent but derivative biography, A Spy Among Friends, Ben
Macintyre rehashes a familiar story.
Harold Kim Philby was born in
1912. His father was an able linguist
who became a devoted adviser of
King Ibn Saud of Saudi Arabia, converted to Islam and was an intrepid
desert explorer. Philby became a
Communist sympathizer while at
Cambridge University. His father was
nonchalant about this radical zeal:
Excess can always be toned down
later, he said. On a visit to Vienna in
1933-34, Philby met Litzi Friedman,
a Communist of Hungarian Jewish
descent, whom he secretly married
and who persuaded him to become a
Soviet agent. One of Philbys first assignments for the NKVD was to rifle
through his fathers papers.
Mr. Macintyre suggests that although Philby was a sincere Communist, the impelling motive for his
treachery was conceit. As the historian Hugh Trevor-Roper, who
worked with Philby in wartime espionage, suggested long ago in The
Philby Affair (1968), this most
deadly of the Cambridge Five was a
narcissist who loved the secret
power of treason. Cheating people
made him feel clever. His covert
faith was not deterred by the Stalinist purges of the 1930s, in which at
least four of his Soviet controllers
were killed. The strains of his double
life intensified his descent into highfunctioning alcoholism.
Suspected of being a spy

for a decade before his 1963
defection to Moscow, Kim
Philby escaped punishment
with the help of a smooth
manner and loyal friends.
In 1939, Philby, having shed Litzi,
started to live with Aileen Furse, a
store detective. She believes in upbringing, the British navy, personal
freedom, democracy, the constitutional system, honor . . . , he reported to his Moscow controllers. I
am certain I can cure her of these
confusions. She soon became his
second wife (there would be two
more) but died in her 40s
after years of heavy drinking and
self-medication.
Philby was recruited, with the
help of his Cambridge contemporary
and fellow Soviet agent Guy Burgess,
into MI6 in 1940. He came to specialize in counterintelligence, and in
1944 was appointed head of the section charged with collecting and interpreting intelligence on Communist espionage and subversion. He
faced several quandaries. If his antiSoviet operations all failed, he
would be fired as section head, but
he would injure the communist
Popperfoto/Getty Images
BY RICHARD DAVENPORT-HINES
NOTHING TO SEE HERE Kim Philby at a 1955 press conference in his mothers house during which he denied being a communist.
cause if they succeeded too well. If
he recruited the best operatives to
his section, they might penetrate Soviet intelligence and thus unmask
him; but if he hired mediocrities his
credibility in London would be jeopardized. His solution was to project
an image of a hard-working yet relaxed leader of a section that
seemed smooth-running but was
never as successful as it promised.
Among other betrayals, Philby
provided Moscow with a list of the
leading Catholic anti-Nazi activists
in Germany, who, when Soviet forces
reached Germany in 1945, were deported or shot because they were an
anti-communist elite as well. He also
betrayed anti-Soviet insurgents and
prototype Bay of Pigs operations
in Albania, Georgia, Lithuania, Estonia, Armenia and the Ukraine.
In 1949, Philby became MI6s representative in Washington, where he
kept Moscow informed of AngloAmerican intelligence collaboration.
He had drunken lunches, at first
weekly and then every other day,
with James Angleton of the CIAs Office of Special Operations and subsequently head of CIA counterintelligence. Angleton believed that he
was extracting information from
Philby, but as a result of these sessions, says Mr. Macintyre, Philby
produced more valuable intelligence for Moscow than at any time
in his life.
In 1950, Philby forewarned Guy
Burgess, who lodged in the basement of his Washington home, that
their fellow Cambridge-recruited spy
Donald Maclean was about to be detained. When Maclean and Burgess
fled to Moscow, Philby was summoned to London for repeated interrogations. Intelligence chiefs at MI5
felt sure of his guilt, but they lacked
a confession to convict him. At MI6
he had stout defendersnotably his
stalwart friend Nicholas Elliott. This
disagreement about Philbys guilt re-
mained for years, Mr. Macintyre

writes, the source of poisonous discord between the intelligence services.
Philby was extruded from MI6
with a generous payoff but kept under close surveillance. He had no opportunities to pass secrets to Moscow until, in 1956, MI6 fixed a cover
job for him as correspondent for the
Observer and the Economist in Beirut, where he resumed report-writing and analysis for the intelligence
service. The KGB defector Anatoliy
Golitsyn provided new pointers
against Philby in 1962, and shortly
afterward an old woman friend from
the 1930s, who resented the anti-Israel bias of his Observer articles on
the Middle East, volunteered damning new evidence to MI5 that he had
been a Soviet spy and Communist
recruiter. Philby was confronted in
Beirut by Elliott. In the interrogation, Elliott stressed more than once
that he believed that Philby had
stopped spying for Soviet Russia in
1949that is, before he was posted
to Washington. MI6 wanted no admissions that would have to be
shared with the CIA, no confessions
that might create pressure for extradition or public trial in America.
Philby made a brief written confession that he had been a Soviet
agent, but the British government
was reeling from the damage of
other recent espionage trials. MI6
was set on avoiding another spy
trial that would give a propaganda
coup to Russia by discrediting the
London government. Elliott, doubtless under instructions from London,
left Beirut, leaving Philby free to escape to Russia in January 1963. He
remained in Moscow for a quarter of
a centuryan English gentleman in
his manners, alcoholic in his habits,
spreading disinformation in the
West and creating a myth of himself
as a hero of ideological constancy.
How sleepless must be Kim Philbys
nights in Moscow, Ronald Reagan

said before the spys death in 1988.
How profoundly he and others like
him must be aware that the people
they betrayed are going to be victors
in the end.
In addition to Philbys self-serving, party-line autobiography, My
Silent War (1968), two of his four
wives published memoirs, and there
have been biographical studies by
investigative journalists, sensationmongers, conspiracy theorists and
scholars. Mr. Macintyre, a journalist
with the Times of London, gives a
deft synthesis of this mass of previous work, but his only significant
new source is the office diaries of
MI5s deputy chief, Guy Liddell,
which were released in 2012. Mr.
Macintyres angle is to narrate the
Philby story in the context of his
long friendships with Elliott and Angleton. The sections on Angleton
have been inflated, perhaps to increase the books interest to American readers, but show all too convincingly that a profound and
poisonous paranoia seized Angleton after Philbys defection and contaminated his work at the CIA until
his forced retirement in 1974.
A Spy Among Friends is a rollicking book. Mr. Macintyre is full of
pep and never falters in the headlong rush of his narrative. He makes
sweeping generalizations (Englishmen are naturally reticent) and
peppers his text with clichs: a military attach is a whiskery old warhorse, a German diplomat is a luxury-loving
aristocrat
and
a
flamboyant homosexual, and an Oxford don is inevitably eccentric.
The chief defect of Mr. Macintyres book, however, is that he unwittingly treats English society, and
particularly its secret service, in
Marxist terms. English nationals
who spied for the Soviets seem to
have been instructed that, if caught,
their statements should emphasize
their class alienation, their revulsion

at bourgeois snobbery and their rejection of social distinctions. Tales
of class stigma and subjugation were
duly offered by William Marshall, a
clerk in the SIS radio-communications department, who was convicted of spying in 1952; by the wife
of George Blake, the ex-MI6 case officer in Berlin, who was uncovered
as a Soviet spy in 1961; and by John
Vassall, a clerk at the British Admiralty who was convicted of supplying naval secrets to the Soviets in
1962. Philby, too, slyly reinforced in
My Silent War the Marxist denigration of the Establishment.
Similarly Mr. Macintyre depicts
the Philby affair as a skirmish in
Britains never-ending, hard-fought,
and entirely ludicrous class war. He
reiterates
this
simplification
throughout his book, but although
he is obsessed with the English class
system, he really doesnt understand
what he calls the minute gradations
of social stratification that meant so
much in Britain. The actress-daughter of a Montreal businessman and a
man whose family money came from
shipping timber are both called
aristocratic, for example.
A Spy Among Friends ends
with an afterword by John le Carr,
who worked in MI6 at the same time
as Nicholas Elliott. This epilogue is
based on detailed notes that Mr. le
Carr claims to have taken during
boozy meetings with Elliott in the
late 1980s. It is worth reading for a
slightly off-color story about Graham Greene, whose great ambition
in his secret-service days was to use
the SIS code word for eunuch in
an encrypted telegram. This final
note somehow encapsulates Mr. Macintyres tale of masculine loyalties
and manly derring-do.
Mr. Davenport-Hines is the
author of An English Affair: Sex,
Class and Power in the Age of
Profumo.
* *
BOOKS
The Madmen of Benghazi

By Grard de Villiers
Vintage Crime, 261 pages, $14.95
BY EDWARD N. LUTTWAK
When Gerard de Villiers died in
October 2013 at 83 years old, after
having written more than 200 novels
that sold at least 120 million copies,
everybody waited to hear the customary tribute of the French Minister
of Culture. But Aurlie Filippetti, who
has offered generous, kind words
upon the deaths of numerous writers
and artists during her time in office,
said nothing. When asked, Ms. Filippetti said that she preferred to remain silent, but then added the sibylline pronouncement To choose is to
make sense, which was interpreted
as dismissive of de Villiers.
The readiest explanation for Ms.
Filippettis refusal to honor the pulp
novelists 48 years of nonstop writingat least four books every year
since 1965is that Malko Linge, the
hero of all 200 books, is an Austrian
aristocrat and CIA contract agent
who invariably encounters, skilfully
seduces and athletically beds glamorous women even in the most unpromising locales, say, on the edge of the
Libyan desert, as he does in Les
Fous de Benghazi (2012), just released in English as The Madmen of
Benghazi.
That an eco-leftist, feminist government official would publicly disapprove of soft-core porn would not be
surprising. But Ms. Filippetti is herself a novelist, and the sex scenes in
her book, Un homme dans la poche,
are far more graphic than anything in
The Madmen of Benghazi. Set in
post-Gadhafi Libya, the book contains
one remarkably artless straight sex
scene and one barely glimpsed lesbian tryst as de Villiers efficiently
tells the story: Malko successfully
protects Ibrahim al-Senussi, hereditary claimant to the Libyan throne
from the usual Islamist fanatics. The
books seductee is al-Senussis gorgeous English mistress Cynthia. As

for his missions wider purposethe
restoration of the Libyan monarchy
it certainly makes much more sense
than the U.S. policy that was actually
attempted, which was driven by the
entirely feckless hope of installing a
democracy among the decidedly prenational Libyans.
But that is the fundamental aspect
of all 200 de Villiers novels that may
have actually displeased Ms. Filippetti: He writes as a hardheaded political realist, anti-dictator in general
(with none of the easy liberal indulgence for left-wing dictators so common among French intellectuals), actively anti-Communist while the Cold
War lasted, and firmly anti-Islamist
since then. He is what some might
call politically incorrectin other
words, his books tell unvarnished
truths that many prefer to ignore.
De Villiers was also a writer who
worked very hard. He was famous for
cultivating top spies and diplomats as
sources, and French intelligence officers and prime ministers read his
books for coded information and
analysis of events that had just occurred or were still unfolding across
the Middle East. Les Fous de Benghazi was published six months before the attack on the U.S. mission in
the Libyan city. There really is an alSenussi claimant to the Libyan
throneI know him personally and
he is a fine gent.
All of de Villierss novels are set
very realistically, the technical stuff is
invariably correct and the story only
a slight projection of well-documented recent events. In the last
novel he published before he died,
The Revenge of the Kremlin, which
will be published in English in April
2015Madmen is the first in a series of de Villierss novels that are being released in the U.S.the death of
the exiled ex-oligarch Boris Berezovsky, officially ruled a suicide, is instead depicted as an assassination by
Putins agents, a version that many
Asaf Hanuka
Hard Political Realism From a Sex-Filled Soap Opera
would deem more accurate than the

official verdict, given the exceptionally cruel murder of Berezovskys
protg Alexander Litvinenko and his
own despoliation.
In Madmen, there is a passage
that reads today as a most remarkable anticipation: In commenting on
the outflow of weapons from postGadhafi Libya, there is a reference
to two truckloads that might be
headed to Gaza but not necessarily
to Hamas. Probably [to] a radical
Salafist group there called the Jund
Ansar Allah, that is financed by Qatar, Saudi Arabia and Yemen. . . .
theyre also linked with the Egyptian Muslim Brotherhoods clandestine branch. That Hamas must now
compete not only with the Iran-financed Islamic Jihad (whose leader
has appropriately converted to
Shiism) but also with ultraradical
Salafists financed by the most reactionary Saudi families, against their
governments will, is in fact a subtext of the fighting in Gaza. For de
Villiers, incidentally, all this violent
radicalism was a logical extension of
the violence of everyday Muslim life
in the Middle East.
Still, as a writer de Villiers had a
serious shortcoming: The man could
not write. Now that Michel Houelle-
becqs svelte and peppery prose has

finally emancipated the French from
enslavement to the cadenced solemnities of Racine & Co.a very large
company from Balzac to Zola down
to most living writersthere is no
excuse for writing as de Villiers did.
Indeed his French prose is so mechanical, so flat and so replete with
FranglaisCes types sont la crme
du Crime Organis Bangkok and
Tiger Trap va faire beaucoup de
mal aux bad boys are two of many
examplesthat William Rodarmors
English translation of Madmen is
actually better than the original.
You might not think so because of
the string-of-cliches text: Ibrahim
al-Senussi was stark naked when he
stepped out of the shower, and he
stopped dead at his bedroom door.
Cynthia was sitting on the edge of
the big bed . . . between the lapels
of the young womans Chanel suit
his birthday present to herhe
could see her nipples straining
against the raw-silk blouse. But the
original is decidedly worse.
In many of de Villierss earlier
novels, critics found even worse
things to complain about: Outrageously blatant product placements,
which were sometimes amazingly extended. One airline certainly got its
moneys worth: in spite of the comfort of the DC-8 of Scandinavian Airlines that brought him from Copenhagen to New York in six hours . . . the
abundant breakfast served by the
beautiful blonde stewardess and it
goes on and on about the amenities
in the arrival lounge and the wellcooked beef and rare wine served on
board.
Product placements werent unusual for a writer relentlessly commercialby publishing his own books
he retained full profits, not just royalties, and meanwhile published other
adventure and erotic authors. Product placements were also ultimately
harmless, but for one major exception: the CIA itself.
As depicted by de Villiers, the
CIA is ruthlessly efficient, instantly

ready to plunge into action anywhere neededespecially if the
place is dangerous and staffed by
capable killers. Thus de Villiers
added 200 titles to the already oceanic fabulation of television series,
films and leak-fueled reporting that
excites false fears all over the world
and systematically misleads the U.S.
taxpayer, who keeps funding an organization whose operational record
is one of abysmal incompetence.
If I might mention one personal
example: While I was working in the
field identifying and arresting real
terrorists and their enablers, some 18
loudmouths flew into town to kidnap
a self-described imama harmless
oaf who was in any case a police informerchatting all the while on
their cellphones with people in the
703 area code of Langley, Va.
The chatting, by the way, was logistically essential: The visitors
were staying in several different
five-star hotels so that they could
claim the best suites in each one.
They remained in town even after
the oaf was kidnapped, charging everything on their government credit
cards.
Given the persistent silence of our
diplomats, who cohabit with the CIA
in overseas missions and know the
sad truth, a French novelist can
hardly be blamed for covering up the
enormous gap between our reliably
competent armed forces and the
CIAs operatives who hardly operate at all and usually fail when they
do. But I cannot help thinking that de
Villiers contributed not a little to the
especial suspicion of the United
States that is a feature of French life.
What we need is another de Villiers
only this one will write a comedy series about our intelligence services
that would be altogether closer to the
truth.
Mr. Luttwak is the author, most
recently, of The Rise of China vs.
the Logic of Strategy (Harvard,
2012).
The Legends of Mexico City

The Interior Circuit
By Francisco Goldman
Grove, 337 pages, $26
BY KONSTANTIN KAKAES
The most unexpected restaurant
Ive ever been to is a Chinese place
called Ka Wong Seng. It is in a quiet,
semi-industrial area near a sunken
highway in an otherwise anonymous
working-class neighborhood of Mexico City. Theres no shortage of globalized cuisine scattered through the
citys wealthy quarters. Ka Wong
Seng is different. In the middle of a
neighborhood where finding even a
sit-down taco place would be a surprise, it looks as if it fell into a Chinatown wormhole and emerged intact,
complete with gleaming, delicious
roasted duck.
I had never understood why it existed until reading Francisco Goldmans diary of Mexico City life, The
Interior Circuit, in which he explains
that the familys real business is the
importation of Chinese food ingredients, which they sell and deliver to
restaurants throughout the city and
beyond. After his wife, who was
raised in Mexico City, died in a 2007
accident (recounted in fictionalized
form in Say Her Name, his previous
book), Mr. Goldman, the son of a Guatemalan mother and American father,
returned to the city, where he has
lived on and off since the 1980s, to

grieve and recuperate. The text
swings from accounts of Mr. Goldmans own feelings and doings in recent years (such as his lunch at Ka
Wong Seng) to lengthy glosses on
Mexican political life.
Earlier books that purported to be
about the city, such as Jonathan Kandells definitive 1988 La Capital,
were also dominated by politics. But
in Mr. Kandells case, the history had
heft. Not so with the present volume.
As Mr. Goldman confesses, I didnt
really know what I was talking about.
I had never paid much attention to
Mexican politics. For years, Id considered [Mexico City] my place of escape from, or my neutral place between, the two bordering countries
where before Id spent almost all my
adult life: the United States and Guatemala. The neighborhoods Mr. Goldman dwells in and uponthe gentrifying areas of Condesa and Roma,
and, briefly, Coyoacncan indeed be
wonderful refuges from the wider
world for those with the modest (by
American standards) means needed
to live there. But Mr. Goldmans indifference becomes problematic when
he proposes to set himself up as an
analyst of the political system.
In the summer of 2012, Mr. Goldman moves into an apartment in the
same building as Marcelo Ebrard, the
citys mayor (whose term would end
that December). Mr. Goldman men-
tions one sit-down interview with Mr.

EbrardPublic security is always a
delicate matter, the mayor says, Human development. Sustainability. The
renewing of the economy. But otherwise his high-profile neighbor figures
in person only minimally in the book;
Mr. Goldman sees him in the crowd in
front of the building after everyone
runs outside following a minor earthquake, and makes pals with Mr. Ebrards bodyguards.
Ka Wong Seng looks as if it

fell into a Chinatown
wormhole and emerged
complete with roasted duck.
Mr. Goldman clearly thinks a lot of
Mr. Ebrard, who is the most prominent center-leaning politician of Mexicos fractured left. Even out of office,
he remains the lefts premier modernizing technocrat and a likely presidential candidate in 2018. I too think
a lot of Mr. Ebrard, but Mr. Goldmans
analysis of his politics rests too narrowly on his single interview and
verges on hagiography. Mr. Goldman
also gives Mr. Ebrard credit for some
programs, such as a vitally improved
bus network, that were in fact established under his predecessor.
Mr. Goldmans indictment of Mexi-
can president Enrique Pea Nieto (a

political rival of Mr. Ebrard) as a corrupt and incompetent authoritarian is
still less persuasive. If Mr. Goldman
could substantiate the rumors he alludes to about Mr. Pea Nieto, it
would be newsworthy, as would substantiation of claims, which Mr. Goldman repeats, of a pact between the
PRI and narcotics kingpins. Mr. Goldman fails to come up with evidence of
insinuated corruption and does not
seriously attempt to evaluate Mr.
Pea Nietos efforts to reform the PRI,
dismissing talk of reform as garbage.
Mr. Goldman devotes many pages
to recounting an episode in which he
finds himself on the losing end of a
drunken brawl with a busload of rich
20-somethings, an incident he sees as
emblematic of the impunity the sons
of the privileged enjoy in Mexico. He
casts the anecdote as a visit to the
barbaric and murderous Mexico of
legend and of all too dispiriting and
terrifying fact. But it comes off instead how his friend Juanca warned
it would at the time, as an incident in
which the drunken Mr. Goldman is
partly to blame: Youd look like a f
moron if you wrote that s down.
As Mr. Goldman muses over his
own culpability, he abruptly decides
to drive to Tepito, a neighborhood
near the city center pervaded by a
labyrinthine, quasi-legal market,
which then becomes central to the
second half of the book. Mr. Goldman

tags along with a reporter friend as
the reporter seeks out the families of
a dozen young people who were abducted from an after-hours nightclub
and almost certainly killed.
A crime like that begs impatiently for a narrative, Mr. Goldman
writes. He yields to that impatience.
The Art of Political Murder (2007),
his nonfiction masterpiece about the
assassination of a Guatemalan bishop,
took him eight years to write. His
first novel, The Long Night of White
Chickens (1992), drew on a deepseated sense of place to celebrate
Guatemala City as a city with at
least one of everything. Mr. Goldmans Tepito is, by contrast, cursorily
sketched. He offers a verbose but superficial look at the Tepiteo cult of
La Santa Muerte (Saint Death) before explaining: Many years spent in
Central America had long ago used up
whatever fascination Id once had
with folk religions.
Mr. Goldmans world-weariness is,
in light of the tragedy of his personal
life, understandable. But his demands
that the reader be interested in something that he himself is not committed to exploring (he narrates his own
reading, in New York, of Mexican
magazine articles about the kidnapping) feel self-indulgent.
Mr. Kakaes was the Economists
bureau chief in Mexico City from
2005 to 2009.
IN DEPTH
Israel Outflanks White House

BY ADAM ENTOUS
Jerusalem
Bloomberg News
hite House and State Department

officials who were leading U.S. efforts to rein in Israels military
campaign in the Gaza Strip were caught off
guard last month when they learned that
the Israeli military had been quietly securing supplies of ammunition from the Pentagon without their approval.
Since then the Obama administration has
tightened its control on arms transfers to
Israel. But Israeli and U.S. officials say that
the adroit bureaucratic maneuvering made
it plain how little influence the White House
and State Department have with the government of Israeli Prime Minister Benjamin Netanyahuand that both sides know it.
The munitions surprise and previously
unreported U.S. response added to a string
of slights and arguments that have bubbled
behind the scenes during the Gaza conflict,
according to events related by senior American, Palestinian and Israeli officials involved.
In addition, current and former American officials say, U.S.-Israel ties have been
hurt by leaks that they believe were meant
to undercut the administrations standing
by mischaracterizing its position and delay
a cease-fire. The battles have driven U.S.-Israeli relations to the lowest point since
President Barack Obama took office.
Now, as Egyptian officials shuttle between representatives of Israel and Hamas
seeking a long-term deal to end the fighting, U.S. officials are bystanders instead of
in their historic role as mediators. The
White House finds itself largely on the outside looking in.
U.S. officials said Mr. Obama had a particularly combative phone call on Wednesday with Mr. Netanyahu, who they say has
pushed the administration aside but wants
it to provide Israel with security assurances
in exchange for signing on to a long-term
deal.
As a 72-hour pause in the fighting expired at midnight Wednesday, a senior
Hamas official said negotiators agreed to
another cease-fire, this one of five days.
The cease-fire was holding on Thursday.
The frayed relations raise questions
about whether Mr. Obama and Mr. Netanyahu can effectively work together. Relations between them have long been
strained over other issues, including Mr.
Obamas outreach to Iran and U.S.-backed
peace talks with the Palestinians.
Today, many administration officials say
the Gaza conflictthe third between Israel
and Hamas in under six yearshas persuaded them that Mr. Netanyahu and his
national security team are both reckless
and untrustworthy.
Israeli officials, in turn, describe the
Obama administration as weak and naive,
and are doing as much as they can to bypass the White House in favor of allies in
Congress and elsewhere in the administration.
While Israeli officials have privately told
their U.S. counterparts the poor state of relations isnt in Israels interest long term,
they also said they believed Mr. Netanyahu
wasnt too worried about the tensions. The
reason is that he can rely on the firmness
of Israeli support in Congress, even if he
doesnt have the White Houses full approval for his policies. The prime minister
thinks he can simply wait out the current
administration, they say.
The allegations are unfounded, said Israels ambassador to the U.S., Ron Dermer.
Israel deeply appreciates the support we
have received during the recent conflict in
Gaza from both the Obama administration
and the Congress for Israels right to defend itself and for increased funding of Iron
Dome.
A senior Obama administration official
said the White House didnt intend to get
into a tit for tat with the Israelis when
Mr. Netanyahu, left, looks on as Mr. Obama speaks at the White House in March. The frayed ties raise questions whether the two can effectively work together.
the war broke out in Gaza. We have many,
many friends around the world. The United
States is their strongest friend, the official
said. The notion that they are playing the
United States, or that theyre manipulating
us publicly, completely miscalculates their
place in the world.
American officials say they believe they
have been able to exert at least some influence over Mr. Netanyahu during the Gaza
conflict. But they admit their influence has
been weakened as he has used his sway in
Washington, from the Pentagon and Congress to lobby groups, to defuse U.S. diplomatic pressure on his government over the
past month.
Tensions really started to flare after Israel launched Gaza ground operations July
17 and the civilian death toll started to rise
sharply, prompting U.S. officials to complain that Israel wasnt showing enough restraint. Israeli officials rejected that notion,
saying Hamas was using civilians as human
shields.
U.S. officials say Mr. Netanyahu told
them he was interested in a cease-fire from
the start, but the two sides clashed over
the process of achieving one and the players who would take part.
Bracing for a longer military campaign
than expected, Israel approached the Defense Department within days of the start
of the ground fighting to request money for
more interceptors for the Iron Dome, which
shoots down rockets aimed at population
centers.
After consulting with the White House,
Defense Secretary Chuck Hagel told aides to
submit a proposal to Congress for $225
million.
Within the administration, the request
was deemed noncontroversial because the
Iron Dome was defensive and couldnt be
used in Gaza ground fighting, U.S. officials
said.
In meetings at the Pentagon, the State
Department and the White House, Israeli
officials told the Americans Israel had
enough Iron Dome interceptors for the current Gaza operation, but wanted to replenish its stocks, according to U.S. officials
who attended. So with Israels consent, the
administration didnt seek immediate emergency funding, Pentagon officials said, adding that they expected Congress to approve
the request sometime in the fall.
Unknown to many policy makers, Israel
was moving on separate tracks to replenish
supplies of lethal munitions being used in
Gaza and to expedite approval of the Iron
Dome funds on Capitol Hill.
On July 20, Israels defense ministry
asked the U.S. military for a range of munitions, including 120mm mortar shells and
40mm illuminating rounds, which were already kept stored at a prepositioned weapons stockpile in Israel.
The request was approved through military channels three days later but not
made public. Under terms of the deal, the
Israelis used U.S. financing to pay for $3
million in tank rounds. No presidential approval or signoff by the secretary of state
was required or sought, according to officials.
A U.S. defense official said the standard
review process was properly followed.
While the military-to-military relationship between Israel and the U.S. was operating normally, ties on the diplomatic front
were imploding. For the Americans, they
worsened dramatically on July 25, when
aides to Secretary of State John Kerry sent
a draft of a confidential cease-fire paper to
Mr. Netanyahus advisers for feedback.
The Americans wanted the Israelis to
propose changes. The U.S. didnt intend or
expect the draft paper to be presented to
the Israeli cabinet, but that was what Mr.
Netanyahu did. U.S. officials say Mr. Netanyahus office breached protocol by sending
back no comments and presenting the paper to the cabinet for a vote.
The paper was also leaked to the Israeli
media. U.S. officials say they believe the Israeli government publicly mischaracterized
Mr. Kerrys ideas with the intent of buying
more time to prosecute the fight against
Hamas because Israeli officials were angry
over outreach by Mr. Kerry to Qatar and
Turkey.
Israel and Egypt had sought to sideline
Qatar and Turkeytwo countries that
backed Hamasrather than increase their
influence. U.S. officials say Mr. Kerry

reached out to the two because they had leverage with Hamas that would be critical to
getting the group to agree to another
cease-fire.
From Israels perspective, Mr. Kerrys
cease-fire draft reflected an approach completely out of sync with Israel, not just on a
governmental level but on a societal level,
said Michael Oren, a former Israeli ambassador to the U.S. under Mr. Netanyahu.
The best thing that Kerry can do is stay
out....We need time to do the job, we need
to inflict a painful and unequivocal blow on
Hamas. Anything less would be a Hamas
victory, Mr. Oren said in the days immediately after Israel rejected the cease-fire
draft.
The watershed moment came in the
early morning in Gaza on July 30. An Israeli
shell struck a United Nations school in Jabaliya that sheltered about 3,000 people.
Later that day, it was reported in the U.S.
that the 120mm and 40mm rounds had
been released to the Israeli military.
We were blindsided, one U.S. diplomat
said.
White House and State Department officials had already become increasingly disturbed by what they saw as heavy-handed
battlefield tactics that they believed risked
a humanitarian catastrophe capable of
harming regional stability and Israels interests.
They were especially concerned that Israel was using artillery, instead of more
precision-guided munitions, in densely populated areas. The realization that munitions
transfers had been made without their
knowledge came as a shock.
There was no intent to blindside anyone. The process for this transfer was followed precisely along the lines that it
should have, another U.S. defense official
said.
Then the officials learned that, in addition to asking for tank shells and other munitions, Israel had submitted a request
through military-to-military channels for a
large number of Hellfire missiles, according
to Israeli and American officials.
The Pentagons Defense Security Cooper-
IN DEPTH
ation Agency, or DSCA, was about to release an
initial batch of the Hellfires, according to Israeli and congressional officials. It was immediately put on hold by the Pentagon, and top
officials at the White House instructed the
DSCA, the U.S. militarys European Command
and other agencies to consult with policy makers at the White House and the State Department before approving any additional requests.
A senior Obama administration official
said the weapons transfers shouldnt have
been a routine check-the-box approval process, given the context. The official said the
decision to scrutinize future transfers at the
highest levels amounted to the United States
saying The buck stops here. Wait a second.Its not OK anymore.
White House and State Department officials were worried about public reaction.
The Palestinians, in particular, were angry,
according to U.S. diplomats.

The U.S. is a partner in this crime, Jibril
Rajoub, a leader in Palestinian President Mahmoud Abbass Western-backed Fatah party,
said of the decision to provide arms to Israel
during the conflict.
Even as tensions with the White House and
the State Department were spilling over, Israeli officials worked to expedite the Iron
Dome money on Capitol Hill.
Republican Sen. John McCain of Arizona
said Israeli officials told lawmakers the money
was urgently needed because they were running out of interceptors and couldnt hold out
for a month or more.
Sen. Lindsey Graham, a South Carolina Republican, said Congresss goal in approving
the money quickly on Aug. 1 was to send a
message to the administration to stop calling
Israel out about civilian casualties.
A senior Republican congressional aide

said Israeli officials told senators they wanted
the money sooner rather than later. He said
Israels main purpose in accelerating the vote
in Congress to before legislators August recess was to provide an overwhelming show
of support for the military operation.
The last straw for many U.S. diplomats
came on Aug. 2 when they say Israeli officials
leaked to the media that Mr. Netanyahu had
told the U.S. ambassador to Israel, Dan Shapiro, that the Obama administration was not
to ever second-guess me again about how to
deal with Hamas.
The White House and State Department
have sought to regain greater control over
U.S.-Israeli policy. They decided to require
White House and State Department approval
for even routine munitions requests by Israel,
officials say.
Instead of being handled as a military-tomilitary matter, each case is now subject to

reviewslowing the approval process and signaling to Israel that military assistance once
taken for granted is now under closer scrutiny.
A senior U.S. official said the U.S. and Israel clashed mainly because the U.S. wanted a
cease-fire before Mr. Netanyahu was ready to
accept one. Now we both want one, one of
the officials said.
A top Israeli official said the rift runs
deeper than that. Weve been there before
with a lot of tension with us and Washington.
What we have now, on top of that, is mistrust
and a collision of different perspectives on the
Middle East, the official said. Its become
very personal.
Joshua Mitnick
U.S.s Man in Baghdad Key to Political Deal

Brett McGurk played a lead role in the
Obama administrations 2010 effort to back
Iraqi Prime Minister Nouri al-Malikis bid for
a second term, earning him the nickname the
Maliki Whisperer.
By Sunday, the State Department official

had turned against Mr. Maliki to ensure he
wouldnt stymie a new political transition.
As the administrations point-man on Iraq,
the 41-year-old diplomat has been leading the
U.S. pivot on Mr. Maliki and facing down the
challenges the Obama administration has in
helping stabilize a country in political turmoil and fighting a growing threat from the
militants calling themselves the Islamic State.
Mr. McGurk, despite his midlevel title of
deputy assistant secretary of state, has
played a central role in crafting U.S. policy in
Iraq for a decade. He is now serving as the
White Houses leading interlocutor to build
ties with Mr. Malikis successor and forge a
unified front in battling Islamic State militants.
It was the lightning-quick advances of
those militants since June that dramatically
altered the White Houses view of Mr. Malikis ability to lead and the need for political
change in Baghdad, say U.S. officials. President Barack Obama had grown convinced
that Mr. Maliki, a Shiite politician, had become too divisive to lead his multisectarian
countrys fight.
Into this maelstrom, the Obama administration has again put Mr. McGurk, this time
with the aim of promoting a new leadership
in Baghdad. The actions Mr. McGurk take in
the coming days will be critical to whether a
new government coalesces in Baghdad and
how deeply the Obama administration becomes involved in a country it has sought to
extract itself from.
That role was in evidence on Sunday, after
Mr. Maliki gave a nationally televised speech
warning he might deploy Iraqs army to blunt
his political opponents push for power.
In response, Mr. McGurk quickly wrote a
tweet demanding the Iraqi leader honor his
countrys constitution. The State Department
official then called Iraqi politicians to make
sure they werent being placed under house
arrest, U.S. officials said.
Mr. McGurks daylong intervention was
among the most aggressive steps taken by
the U.S. to sever ties with an Iraqi leader the
White House appeared content to leave at the
helm in Baghdad just months earlier.
The United States stands ready to fully
support a new and inclusive Iraqi government, particularly in its fight against #ISIS,
Mr. McGurk tweeted Monday following the
Iraqi parliaments naming of a prime ministerial candidate, Haider al-Abadi, to succeed
Mr. Maliki.
Mr. Malikis expected ouster marked a
dramatic U-turn for Mr. McGurk, who critics
and supporters say has had one of the most
important and enduring influences on Americas relationship with Mr. Maliki throughout
the premiers eight-year term in office.
Brendan Smialowski/Press Pool
By Jay Solomon
in Washington
and Matt Bradley in Baghdad
Mr. McGurk, center, talking with Secretary of State Kerry in June. Mr. McGurk, despite his title of
deputy assistant secretary of state, has played a central role in crafting U.S. policy in Iraq for a decade.
Its not unusual that you have a point
person to run a policy, the Obama administrations ambassador to Iraq from 2009-12,
James Jeffrey, said of Mr. McGurks significant role in Baghdad. Hes very, very competent.
A lawyer by training, Mr. McGurk moved
to Baghdad in 2004 as a legal adviser to the
U.S. governments occupying administrative
office, the Coalition Provisional Authority, as
well as to the American ambassador.
As the top Iraq officer in President George
W. Bushs National Security Council, Mr.
McGurk developed a relationship with Mr.
Maliki after the prime minister took office in
2006.
U.S. officials had struggled to find a
leader from Iraqs Shiite sect that they believed was acceptable to the countrys Sunni
and Kurdish communities, but not overly dependent on neighboring Iran, said officials
who worked on Iraq policy then.
Mr. McGurk grew so close to Mr. Maliki
that U.S. Embassy staff in Baghdad called him
the prime ministers whisperer, said officials who worked with him during the Bush
and Obama administrations. The relationship
grew, despite language barriers.
When Mr. Maliki in 2008 led a successful
military campaign against a rival Shiite militia, the Mahdi Army, which drew strong sup-
port from Iran, it calmed U.S. fears that the

Iraqi leader would solely rule along sectarian
lines.
He moved a divisions worth of force
from Anbar province all across Iraq into
Basra, Mr. McGurk said in a 2010 interview
with the Council on Foreign Relations. That
was really quite extraordinary.
Mr. McGurks experience made him one of
the few senior Bush administration officials
who transitioned into Mr. Obamas foreignpolicy team. He helped the White House
manage a review of its Iraq policy in 2009
and then served as a senior adviser to the
president as the U.S. began drawing down its
military presence.xx
In 2010, Mr. Maliki faced a tough re-election. Mr. McGurks exhaustive diplomacy
helped to keep Mr. Maliki in office even after
his political bloc came in a narrow second
place in the elections, said Iraqi and American diplomats. Mr. McGurk continued to defend Mr. Maliki as he grew more authoritarian, sectarian and isolated, they said.
Mr. Jeffrey said he didnt see the diplomat
as siding with Mr. Maliki. Anyone who
works these things knows that for a thousand
reasons it is the default position that you
kind of have to try and live with whoever is
in office.
Mr. McGurk was named in 2012 to be am-
bassador to Iraq, but withdrew his nomination after emails surfaced documenting his
romantic relationship with a Wall Street
Journal reporter in Baghdad, who subsequently resigned from the Journal. Republicans argued Mr. McGurk, who was married at
the time, wasnt fit to serve in an ambassadorial post. Instead, the administration appointed him to his current post, which
doesnt require confirmation.
In June, Islamic State militants gained
control of Mosul, Iraqs second-largest city.
U.S. officials worried the militia could quickly
move on Baghdad as Mr. Malikis security
forces either didnt fight or simply abandoned their posts.
Mr. McGurk flew to Iraq and stayed for six
weeks in a bid to rally Mr. Maliki and the
army to put up a fight against Islamic State
militants. He told a congressional hearing
last month that the Iraqi government didnt
seem to initially comprehend the threat the
group posed.
Soon, his positionand the administrationsflipped from supporting Mr. Maliki
to working with Iraqi politicians to find his
replacement, according to U.S. officials.
The Obama administration has denied it
has overtly sought to remove Mr. Maliki.
But Mr. McGurk, Secretary of State John
Kerry, and the U.S. ambassador to Iraq,
Robert Beecroft, began rallying Iraqi politicians to put in place a new Iraqi leadership
after Mosuls fall, seeking to capitalize on
April parliamentary elections.
Mr. McGurk has mixed the political
wrangling with helping to articulate the
U.S. view on the need to fight Islamic State
militants. We have to give it everything we
have, he told the congressional hearing
last month.
In recent weeks, the U.S. joined an unlikely alliance of Iraqi politicians, Shiite religious leaders, and Mideast governments in
pushing for Mr. Malikis removal. Iraqs top
Shiite cleric, the Grand Ayatollah Ali Al Sistani, has used Friday prayer settlements to
calls for a more inclusive government,
similar language that Mr. McGurk and others have used in seeking to replace Mr. Maliki.
Washingtons long-term Mideast nemesis, Iran, also provided the Obama administration with an assist in pushing for Mr.
Malikis ouster.
In June, the State Departments No. 2
diplomat, William Burns met in Vienna with
Tehrans foreign minister to try to coordinate a strategy on Iraq. While U.S. officials
have had no follow-on meetings with Iranian officials, according to the State Department, Mr. McGurk and others have regularly tracked Irans positions through
intermediaries.
On Wednesday, Irans Supreme Leader
Ayatollah Ali Khamenei joined Mr. McGurk
by taking to Twitter to express his support
for Mr. Malikis anointed successor, Mr.
Abadi.
As new PM is elected, God willing,
problems will be solved & govt will give a
good lesson to terrorists who seek sedition
in #Iraq, read a message on Mr. Khameneis Twitter account.
FROM PAGE ONE

plane. North Korea often tests rockets coinciding with widely watched
events, such as visits by U.S. President Barack Obama in April and Chinese President Xi Jinping in July.
Pope Francis, who once dreamed
of becoming a missionary in Japan,
is likely to underscore his aspirations to expand the Catholic faith in
Asia.
At the meeting with local bishops, he highlighted the dynamism of
the countrys church, which was
founded by Korean scholars.
You are heirs to an impressive
traditionfrom being a land of mission, yours has now become a land
of missionaries, he said.
Sticking with his desire to use a
locally made compact car during his
visit, the pope traveled Thursday in
a Kia Soul, shunning larger bulletproof vehicles.
Since his election last year, the
pontiff has stressed to the clergy the
importance of frugality and asked
them to forgo expensive limousines.
Scenes of the pope riding in the
dark-colored Soul were broadcast
live across the country, and Kia Motors Corp. said it was honored by
the popes use of the car. But the
choice of a compact vehicle also
complicated security arrangements
for authorities and forced more road
closures.
While the popes agenda is
mainly focused on religious events,

it may offer the 77-year-old a chance
to make a fresh statement on the
Vaticans hopes to improve relations
with China, where the government
and Holy See have clashed over the
delicate question of naming bishops.
He could also address the plight
of Christians in the Middle East and
some Asian countries.
On Tuesday, he called for Muslim
leaders to push for an end to recent
atrocities by Islamic fighters in
northern Iraq. He also sent a special
envoy to Iraq this week.
This trip is the third pontifical
visit to South Korea, after John
Paulwho called for a great harvest of faith in Asia in the third
millenniumtraveled to the country
twice, in 1984 and 1989.
Pope Francis predecessor, Pope
Benedict XVI, didnt get to Asia at
all during his eight-year papacy.
Pope Francis is scheduled to travel
in January to Sri Lanka and the Philippines, which is home to more than
half of the regions Catholics.
The central reason for the Korea
trip is Asian Youth Day, which involves thousands of young Catholics
from 23 countries. There will be a
closing Mass on Sunday.
The pope will also preside over a
ceremony on Saturday to beatify 124
Korean martyrs who were tortured
and killed in the 18th and 19th centuries after refusing to renounce
Reuters
Pontiff Arrives in South Korea, Urges Peace
Pope Francis rode in a Kia Soul on his way to a Mass in Seoul on Thursday.
their faith.
There are at least 10,000 documented Catholic Korean martyrs, a
phenomenon that highlights the tenacity of the small church.
The Vatican has said North Korean authorities declined an invitation to allow Catholics there to
travel and join in Mondays Mass for
peace and reconciliation on the peninsula.
North Korea, which hasnt made
any official comment on the popes
visit, affords virtually no religious
freedom, and the number of Catholics currently worshiping there in
secret is unknown.
The Vatican has ruled out any

side trip by the pope to the demilitarized zone that divides the two Koreas.
While in South Korea, Pope Francis will meet family members of the
victims of Aprils ferry disaster, in
which about 300 people died. He
will also meet a small group of socalled comfort womenKorean
women who were forced into sexual
slavery by Japanese troops during
the World War II.
Attention will be paid to any
comments from the pope on the
Holy Sees relations with China. The
Vatican and Beijing have had no offi-
cial relations for nearly 60 years and

have clashed over the power to nominate Catholic bishops. During the
flight from Rome to Seoul, the papal
plane flew over Chinese territory.
When St. John Paul II flew to the
Philippines in 1995the latest papal
visit to East AsiaChinese authorities denied permission to enter the
countrys airspace. This time, as is
tradition when flying over a country,
Pope Francis dispatched a telegram
to China, invoking the divine blessings of peace and well-being upon
the nation.
Hua Chunying, a spokesperson
for Chinas Ministry of Foreign Affairs, said the popes remarks were
noted.
China has always been sincere
and has always been making positive
efforts to improve Sino-Vatican relations. We are willing to continue
working with Vatican through constructive dialogues to promote bilateral relations, she said.
By the end of his stay, the pope
will have delivered 10 speeches, including four in English, a rarity for a
pontiff who virtually always uses
Italian for his public appearances. In
a gesture of appreciation to the Vatican staff, he has brought a Holy See
switchboard operator with him for
the trip.
Jeyup S. Kwaak,
James T. Areddy and Olivia Geng
Pope Francis Telegraphs Best Wishes to Chinese

BY DEBORAH BALL
SEOULIn the fraught relationship between the Vatican and China,
the smallest of signals can say a lot.
In this case, it was a telegram from
on high.
The Holy See and Beijing have
had no official relations for decades.
In a clash over who has the power
to nominate the Catholic bishops in
the country, the Chinese government claims the right to decide the
names, while Rome regards it as the
exclusive prerogative of the Holy
See.
In the 17 months since being
elected pontiff, Pope Francis has
played his cards close to his chest,
saying little about relations with
China, except to reveal that he and
President Xi Jinping exchanged congratulatory messages when each
was elected last year.
As a result, the popes five-day
trip to South Koreahis first voyage
to Asiais being touted as a prime
opportunity for the Argentine pontiff to make a declaration about relations with China.
The first hint came from the papal plane on the way from Rome to
Seoul. Soon after entering Chinese
airspace, Pope Francis dispatched a
telegram to President Xi. I extend
the best wishes to your excellency
and your fellow citizens, and I invoke the divine blessings of peace
and well-being upon the nation.
On the face of it, the telegram
amounted to little more than diplomatic niceties. The pope traditionally sends a telegram to the governments of the countries he flies over.
On the Rome-Seoul flight, he sent
no fewer than nine of them, one for

each country he traversed.
But the case of China is a special
one. The last time a pope traveled
to East Asia, when St. John Paul II
flew to the Philippines in 1995, Chinese authorities denied permission
to fly over their territory, forcing
the papal plane into a long detour.
This time, Beijing allowed Pope
Francis to fly over China. The gesture is significant, particularly in
light of the especially poor state of
relations, which have hit a low in recent years after Chinese authorities
placed a Catholic bishop under

house arrest.
The Vatican has long been anxious to repair relations with Beijing.
In its quest to spread the faith in
Asia, where Catholicism today represents a tiny slice of the population, China is a prize. Its huge population and the spiritual vacuum left
by eroding Communist ideology are
a dream for Vatican evangelists.
As a result, the dog-whistle message sent from the papal plane will
surely perk up the antenna of Vatican- and China-watchers alike.
Insurance Magnates From West Aim at Markets in Asia

nior executives from AIGs Asian operations and has picked up staff
from other companies, too, as part
of ambitious plans to boost its commercial insurance business in the
region, according to people familiar
with the matter.
People like Warren Buffett have
a very sensitive nose, said Jonathan Zhao, head of actuarial and insurance-advisory services for the
Asian-Pacific region at Ernst &
Young. There is a big potential for
commercial insurance in Asia that
has not been captured and this is
one area that could potentially push
the local players out and get the international players in.
Mr. Greenbergs acquisition of
Dazhong turned heads in the industry and marked a significant expansion in China by the man who
helped turn AIG into the worlds
biggest insurer before his forced departure from the company amid an
accounting scandal in 2005. Since
then, Mr. Greenberg has been building the Starr Cos. insurance operations across the world.
He has already started to restructure his Chinese acquisition,
renaming it Starr Property & Casualty Insurance (China) Co. Ltd.

(Starr China). New product lines are
planned in commercial propertyand-casualty products, covering everything from political risk to food
safety.
Mr. Greenbergs company, which
already has operations in Hong

Kong, Japan, Australia and elsewhere in Asia, has deep links to
China. The purchase of Dazhong was
made by Starr Indemnity & Liability
Co., part of the Starr group, which
can trace its roots back to Cornelius
Vander Starr, who founded insurer
C.V. Starr & Co. in Shanghai in 1919.

Mr. Buffetts conglomerate,
which has long been a big player in
insurance in the U.S., established a
U.S. commercial-coverage business
last year. It has been in the process
of expanding globally. Berkshire
Hathaway Specialty Insurance,
which provides commercial property, casualty and other types of

coverage, is applying for licenses to
regulators in Sydney, Hong Kong,
Singapore and Europe, as well as recruiting talent from established rivals such as AIG, a separate person
familiar with the matter said.
Booming Asia | Property and casualty coverage takes off

Compound annual growth in premiums in decade through 2012
Canada
9.8%
France
7.6%
Germany
5.3%
Italy
Japan
Hank Greenberg
4.9%
3.5%
U.K.
3.2%
U.S.
3.0%
Asia, excluding Japan
Source: Swiss Re via Credit Suisse; Bloomberg News (photos)
14.5%
Warren Buffett
As of 12 p.m. ET
Euro 1.3376 0.07%
Yen/US$ 102.46 g 0.02%
Yen/A$ 95.48 0.17%
Oil 96.09 g 1.54%
Gold 1311.90 g 0.07%
Wal-Mart Cuts Profit Outlook

As U.S. Store Traffic Weakens
10-year Treasury 3/32 yield 2.417%
SAIC Motor Is
Ready for the Road
BUSINESS & FINANCE 17
HEARD ON THE STREET 28
Friday - Sunday, August 15 - 17, 2014
asia.WSJ.com
Yuan positions for foreign-exchange purchases represent money China's central bank injects into the nancial system to buy
foreign currency from its citizens. It measures the volume of capital ows. Negative gures indicate capital outows.
Russias
Oil Exports
To Asia
Hit Record
Yuan positions for forex purchase
BY ERIC YEP
THE PEOPLES MONEY | By Wei Gu
China Acts as Cash Departs
China is trying to regain

control of the cash flowing across
its leaky borders and the effects
will be felt around the world.
Beijing technically bans its
citizens from buying overseas
properties and stocks, and limits
the money they
can transfer
abroad to $50,000
a year. Despite
these rules,
wealthy Chinese
have found ways
to move their
money across the border, making
them the biggest international
buyers of properties in places like
the U.S. and fueling a boom in
Macaus casinos.
Underground channelssuch
as the money-exchange shops
found across Hong Konghave
flourished in recent years. Some
Chinese banks have quietly
provided services to funnel
customers money across the
border.
There seems to be a desire to
tighten, said Oliver Barron, head
of investment bank North Square
Blue Oaks Beijing office. The
government is reacting to
perceived outflows as Chinese
businessmen want to get their
money out.
The government has a lot of
leaks to plug. These include
longstanding strategies such as
businesses over-invoicing their
purchases or individuals using
Leaky Great Wall | Capital leaves China as the property market weakens
700 billion yuan
Domestic house price growth
Yuan positions
House price growth
14%
Chinese overseas property purchases
600
12
14
500
10
12
400
300
200
100
100
0
2009
200
2010
11
12
13
14
Sources: People's Bank of China, OSBO (forex purchase, price growth); Jones Lang LaSalle (overseas purchases)
informal money-transfer
networks. Other methods are
more controversial, such as a
Bank of China program that
allowed clients to move large
sums abroad.
In the gambling center of
Macau, the rich have used junkets,
which lend them money in the
former Portuguese territory and
collect the debts back home. Less
wealthy gamblers use their
UnionPay cards, Chinas only
domestic bank card, to make fake
purchases, pocketing the cash
they receive.
Chinas gambling capital is

among the first to feel the chill.
Macaus casino revenue fell for a
second straight month in July,
dropping 3.6% from a year earlier.
Grant Bowie, chief executive
officer of MGM China Holdings
Ltd.MGM Resorts
Internationals China venture
said at a news conference this
past week that Chinas moves to
strengthen capital controls
represent a significant policy
shift that has made Chinese
visitors to Macau more
circumspect.
Estimate
$16 billion
10
8
6
10
11
12
13
14
Both of the main channels for

getting cash out in Macau are
being squeezed. UnionPay said in
March that its payment network
has tightened checks on
suspicious transactions in the
territory to combat money
laundering.
Junket operators are facing
pressure from casinos and
regulators to disclose the names
of their customers.
Other methods of moving
money are also disappearing.
Jewelry counters on casino floors,
Zhang Liang
Shadow-Lending Troubles Spur Protests

BEIJINGSmall protests popping
up outside banks and government
offices around China in recent days
have cast a spotlight on shadow
lending, a sector providing important alternative financing channels
for small firms shut out of regular
bank loans.
On Tuesday, a group of investors
in the city of Chengdu, in Sichuan
province, held a demonstration in
front of local government buildings
after one of the biggest credit-guarantee companies in Sichuan failed to
step in and cover loans to small
firms it had insured.
A day earlier, investors staged
protests outside Industrial & Commercial Bank of China Ltd.
branches in Guangzhou and Shanghai. The investors, which numbered
a few dozen, had been told they
would need to wait at least 15
months to get the payout on a trustcompany product sold at the bank.
They wanted the lender to step in to
ensure payment.
Swindler ICBC, pay back our
blood-and-sweat money, said a
banner outside a bank office in
Guangzhou.
The products prospectus said
ICBC has no liability to pay back the
3-month Libor 0.23110
A photo taken by a protester shows investors at an ICBC office in Guangzhou.

The banner says, Swindler ICBC, pay back our blood-and-sweat money.
debt in case of default. Several investors said the bank had assured
them of the products low risks.
Neither ICBC nor the trust company responded to requests for
comment.
Regulators have long sought to
rein in the proliferation of shadow
lending amid concerns over a
buildup of debt. Chinas trust com-
panies act as conduits by raising

money to invest in assets or to
make loans. Some analysts have predicted that there could be a wave of
defaults among trust companies, but
so far there have been only a handful of failures.
The protests, which follow other
similar events around China in recent months, serve as a reminder of
the difficulty of pinning down who

is responsible when something goes
wrong.
The Sichuan protests illustrate
the problematic role of lightly regulated credit-guarantee companies,
which have become an important
component on the path to loans for
Chinas small and medium-size
firms. Banks and other financial institutions typically require significant collateral, which small firms
rarely have, to back a loan. But lenders are sometimes willing to extend
credit if another company is willing
to promise to pay off the loan if the
borrower cant. The credit-guarantee companies give banks and other
lenders peace of mind that their
loans are safe, charging the borrower a small fee for the service.
An investor surnamed Gao in
Chengdu said he invested 500,000
yuan (about $81,000) in a small loan
company late last year, with the
funds then being lent out to small
businesses in the province. Mr. Gao
said he was promised at least a 15%
annualized return on his investment, which pays off at the end of
2014.
The lending was guaranteed by
As Moscows relations sour with

the West, Russias energy sector is
pivoting to Asia, with oil exports to
the region jumping to record highs
and analysts predicting a boost for
some Asian energy companies.
Russia has sent more than 30%
of its oil exportsmore than 1.2
million barrels a day, the most
everto Asia this year, trade and
analyst data showed. Around a fifth
of Russias oil exports went to AsiaPacific in 2012, according to the International Energy Agency.
Meanwhile, Russian oil exports
to Europe via its largest pipeline
network have fallen from a peak of
3.72 million barrels a day in May
2012, to less than three million barrels a day in July.
Most of the oil heading to Asia is
shipped to China, and comes as Russia seeks to boost ties to the energyhungry region amid heightened tensions with Europe. While the crude
oil is priced at slightly above the
Dubai benchmark, it is a plus for
Asian buyers as the oil is relatively
close and they get to diversify away
from the conflict-ridden Middle
East.
The impact of sanctions on the
gas sector, however, remains uncertain and energy companies have
warned of higher risks. At stake is
Russia and Chinas $400-billion natural-gas deal signed in May, which
will need a separate network of
pipelines and new exploration work
to be conducted.
They are clearly, in the medium
term, moving more barrels to Asia,
said Johannes Benigni, head of energy consulting firm JBC Energy.
Asia isnt just benefiting from
the arrival of more Russian crude
oil. Earlier this month, sanctions
were imposed on the transfer of
Western goods and technology to
Russias oil-and-gas industry, especially for exploration in deep water,
the Arctic and shale.
Analysts say chief among the potential Asian benefactors could be
Chinas Honghua Group Ltd., one of
the worlds largest builders of onshore drilling rigs, which gets about
12% of its total revenue from Russia
from companies such as Eurasia
Drilling Co. and Eriell Group.
Honghua can provide similar
quality rigs as Western companies
with a 20% price discount, plus
cheaper and more-efficient delivery
thanks to access by rail instead of
ship, said Gordon Kwan, head of
oil-and-gas research at Nomura.
Other Chinese companies that
may benefit from Russian operations are Petro-King Oilfield Services Ltd., which has worked on Rosnefts Sakhalin offshore drilling
BUSINESS & FINANCE
Drops
China Mobile SeeksAcquisitions Fosun
Offer to Buy
BY LORRAINE LUK
HONG KONGChina Mobile Ltd.

is on the lookout for acquisitions to
reverse slowing growth, its chairman said Thursday, after the worlds
largest wireless carrier by subscribers posted an 8.5% decline in firsthalf net profit.
China Mobile has been hit by the
governments continued efforts to
promote competition by state-controlled companies. Being the dominant player in China, China Mobile
was ordered to reduce the interconnection feesmoney it receives
from smaller domestic rivals to connect to its networkbeginning this
year.
We will continue to look for investment opportunities outside in
an active but cautious manner. We
are interested in companies that will
help grow our core telecom businessfor example, content and Internet companies, Chairman Xi
Gouhua said at the companys earnings conference.

Our targets are not limited to
those in emerging countries. We will
also invest in companies that operate in developed markets if they offer good growth opportunities.
China Mobile has already become
more active in pursuing growth opportunities beyond its saturated
home market. In June, China Mobile
agreed to buy an 18% stake in Thai
telecommunications carrier True
Corp. for $882 million, marking its
first significant overseas investment.
Facing rising competition in
China, the company is doubling its
capital spending to $12 billion this
year to upgrade its network in order
to provide speedier fourth-generation mobile services. China Mobile
is hoping its head start in building a
faster 4G network capable of handling data-heavy applications such
as video streaming and mobile
games could help the company re-
gain growth momentum.

China Mobiles net profit for the
six months ended June 30 fell to
57.74 billion yuan ($9.37 billion)
from 63.13 billion yuan a year earlier. Revenue rose 7.1% to 324.68 billion yuan from 303.10 billion yuan a
year ago.
Tencent Holdings Ltd. s popular
instant-communication application
WeChat, which allows users to send
free voice and text messages, was
also a drain on the companys revenue from texting. To mitigate the
loss in revenue, China Mobile has
been striving to expand its new data
and multimedia content services.
With more than 790 million mobile subscribers, China Mobile controls more than 50% of the worlds
largest mobile market by subscribers.
But the companys results were in
contrast to a 26% increase in firsthalf earnings reported by smaller rival China Unicom last week.
While the costly network invest-
ments will continue to weigh on the

companys earnings this year, China
Mobile could see better growth next
year as its leading 4G network coverage is expected to boost its data
revenue and help lure more consumers from rivals, said analysts.
The network advantage China
Mobile is building in 4G will continue
to pay dividends for the years ahead.
We also believe [Apple Inc.s] iPhone
6 will be a major catalyst for subscriber additions, said Chris Lane, an
analyst at Bernstein Research.
China Mobile only started offering Apples iPhones on its new 4G
network in January, several years
behind China Unicom and China
Telecom because it operates on a
less popular homegrown 3G technology standard called TD-SCDMA.
Mr. Xi said on Thursday the Chinese carrier would offer Apples new
iPhone to its users, but he declined
to comment on when it might be
available.
Lenovos Phones Gain in Emerging Markets

quarter through June from $174 million a year earlier, beating analysts
expectations.
Revenue increased 18% to $10.4
billion.
Lenovo said its smartphone shipments in the quarter jumped nearly
fourfold in Southeast Asia and sixfold in Eastern Europe, without disclosing figures.
Those are our future potential
markets, so we definitely put more
effort and more resources into those
markets, Mr. Yang said.
But Lenovos success in the
global market also hinges on how
much it can benefit from Motorola.
Mr. Yang said Motorolas strength in
North America and Latin America,
as well as its intellectual property
and close ties with mobile carriers
world-wide, will help Lenovo become a more-competitive player
abroad. In the U.S., Lenovo plans to
concentrate on Motorola-branded
smartphones, rather than introducing phones with the Lenovo logo.
Motorola is unprofitable under
Google, but it is recovering faster
than expected, and Lenovo continues to predict it can make the business profitable in four to six quarters after it closes the deal, Mr.
Yang said.
Chinese players such as Lenovo
and Huawei Technologies Co. are
stepping up their overseas expan-
Lenovo Expands Its Reach

Second-quarter market share among smartphone vendors
China
World-wide
Lenovo
12.5%
Samsung
Xiaomi
12.4
Apple
25.2%
11.9
Coolpad
11.5
Huawei
Huawei
11.4
Lenovo
5.4
LG
4.9
Samsung
9.8
Note: Period (April-June)

Source: IDC
6.9
sion, posing a threat to Samsung as

they sell affordable Android handsets with competitive technological
features to millions of consumers
replacing their basic cellphones
with smartphones. As the market
for high-end smartphones becomes
saturated, the industrys growth is
being fueled by demand for inexpensive models in emerging markets,
such as Southeast Asia, India, Brazil
and Russia.
Lenovo, for example, now holds
8% of the Malaysian market and 7%
of Vietnams, after having little
presence in those two countries a
year ago, according to Counterpoint
Research.
They seem to have found a
sweet spot, said Counterpoint analyst Tom Kang. Like most Chinese
handset makers, Lenovo sells smartphones that are much less expensive
than the iPhone or Samsungs flagship Galaxy phones. Among Chinese
companies, Lenovo is the most familiar brand in Southeast Asia
thanks to its PC business, Mr. Kang
said.
While many smartphone makers
outsource their production, Lenovo
manufactures its own handsets at
its huge industrial complex in the
central Chinese city of Wuhan. Inhouse manufacturing has given the
company flexibility in making
changes to its product lineup.
Still, Lenovos success in the
global market isnt guaranteed.

Challenges from other Chinese rivals that offer even less-expensive
phones could put more pressure on
its profit margins, not just in China
but overseas, Sanford C. Bernstein
analyst Alberto Moel said.
Mr. Yang said Lenovos smartphone business in China is profitable but earns only a little bit of
money. Profitability from smartphones in emerging markets is
higher than in China, he said.
Huawei, the worlds third-largest
smartphone maker ahead of Lenovo,
said last month that its smartphone
shipments in the Middle East and
Africa in the first half of this year
jumped more than sixfold from a
year earlier, while its Latin America
shipments rose nearly fourfold. Upstart Xiaomi Inc., meanwhile, is also
trying to sell more smartphones
abroad.
PCs still account for nearly 80%
of Lenovos revenue, but the mobiledevices business, which represents
15%, is growing quickly. In the second quarter, Lenovos global smartphone market share was 5.4%, trailing Samsung with 25.2%, Apple with
11.9% and Huawei with 6.9%, according to IDC. In China, Lenovo became
the biggest smartphone vendor by
grabbing 12.5% of the market, while
rival Samsung, with 9.8%, struggled
with high inventories of unsold
phones.
Resort Firm
Club Med
BY BLANDINE HENAULT
AND CHAO DENG
PARISChina-based Fosun International Ltd. and its French private-equity partner Ardian have
dropped their offer for French resort operator Club Mditerrane
SA, clearing the way for a competing Italian investor and highlighting
the challenges facing the global ambitions of one of Chinas largest privately owned conglomerates.
More than 18 months ago, Club
Meds board and management unanimously backed a Fosun-led offer
that valued the company at 558
million ($746 million). Last month,
however, the company recommended a competing offer from
Global Resorts, a company controlled by Investindustrial, a private-equity fund managed by Andrea Bonomi.
The move marks a further setback in Fosuns attempts to strike
international deals and its aim to
build a business model similar to
the U.S. firm Berkshire Hathaway.
The Chinese conglomerate, which
made its first foray overseas by purchasing an almost 10% stake in Club
Med in 2010, followed with the purchase of New Yorks Chase Manhattan Plaza for $725 million and the
acquisition of a Portuguese insurer
for $1.4 billion.
However, its attempts to make
bigger foreign purchases have pitted
the company against competitive
foreign bidders. Fosun lost out in
June to a domestic competitor for
South Korean insurer LIG Insurance
Co. and is currently trying to buy
publisher Forbes Media LLC.
Mr. Bonomi, who owns nearly
11% of Club Med, offered 21
($28.07) a share for the company, or
22% above Fosuns bid.
Fosun and Ardian are now left
with an 18.5% Club Med stake. Fosun
has long said that it wants to help
Western brands such as Club Med
expand in China, taking advantage
of an increasingly sophisticated and
wealthy consumer market on the
mainland.
The pair havent ruled out exploring any potential options which
would serve Fosuns and Club Meds
best interests, Fosun said in a filing
to the Hong Kong Stock Exchange
on Thursday.
INDEX TO BUSINESSES AND PEOPLE

Businesses
This index of businesses mentioned in

todays issue of The Wall Street Journal
is intended to include all significant
reference to companies. First reference
to the companies appears in bold face
type in all articles except those
on page one and the editorial pages.
American International Group....................1

Apple .................................................. 1,16,28
Ardian.........................................................16
Arista Networks........................................18
Autoliv........................................................19
AXA .............................................................. 1
Bank of China ............................................ 15
Barclays.................................................20,28
Berkshire Hathaway...............................1,16
Bloomberg..................................................20
BorgWarner................................................19
Brevan Howard Asset Management........20
Caxton Associates.....................................20
China Credit Trust ..................................... 23
China Mobile.........................................16,23
China Telecom............................................16
China Unicom.............................................16
Cisco Systems.......................................18,22
Club Mditerrane.....................................16
Country Garden Holdings..........................21
Crown Resorts......................................18,23
Daewoo Shipbuilding & Marine
Engineering.............................................20
Delphi Automotive .................................... 19
Denso..........................................................19
Dongfeng Motor Group ............................. 28
Echo Entertainment Group ....................... 18
Electrolux...................................................19
Eriell Group................................................15
Eurasia Drilling GDR..................................15
Ford Motor.................................................19
Fosun International...................................16
GE...............................................................19
General Electric..........................................19
Google...........................................................1
Guangzhou Automobile Group..................28
Henkel & Co. ................................................ 6
Huawei Technologies.................................16
Industrial & Commercial Bank of China...15
International Energy Agency....................15
InvestIndustrial..........................................16
Jones Lang LaSalle....................................21
Kabam.........................................................28
Kate Spade.................................................17
Kia Motors ................................................. 14
King Digital Entertainment.......................28
Kohls..........................................................22
Lenovo Group..........................................1,23
LG Electronics............................................19
LIG Insurance.............................................16
London Stock Exchange Group ................. 20
Machine Zone.............................................28
Macy's ........................................................ 17
Markit.........................................................20
Melco Crown Entertainment.....................18
MGM Resorts International......................15
Michael Kors Holdings .............................. 17
Mobileye.....................................................19
Prudential.....................................................1
Qualcomm .................................................. 17
Robert Bosch..............................................19
RWE............................................................22
SAIC Motor ................................................ 28
Samsung Electronics..............................1,19
Samsung Securities...................................20
Starr ............................................................. 1
Swire Pacific..............................................18
Swiss Re.......................................................1
Telstra ........................................................ 23
Tencent Holdings.......................................23
ThyssenKrupp ............................................ 22
True.............................................................16
TRW Automotive Holdings.......................19
Wal-Mart Stores...................................17,22
Xiaomi ........................................................ 16
ZF Friedrichshafen.....................................19
Zynga..........................................................28
People
This index lists the names of businesspeople and government regulators who
receive significant mention in Todays
Journal.
Ashe, Neil .................................................. 17
Barron, Oliver ............................................ 15
Bonomi, Andrea.........................................16
Bowie, Grant..............................................15
Buffett, Warren...........................................1
Chambers, John.........................................18
Craigie, Rowen...........................................18
Foran, Greg.................................................17
Greenberg, Maurice.....................................1
Hau Thai-Tang ........................................... 19
Ho, Lawrence.............................................18
Holley, Charles...........................................17
Johnson, Brian...........................................19
Lee, Ben ..................................................... 21
Matsumoto, Takashi..................................23
McMillon, Doug..........................................17
Ngai, Tran Viet .......................................... 21
Packer, James............................................18
Pride, Jason ............................................... 22
Roth, Phil...................................................22
Sheng Jiemin.............................................17
Simon, Bill..................................................17
Slosar, John ............................................... 18
Subramanian, Savita.................................22
Xia, Darren.................................................21
Yang Yuanqing.............................................1
Yim, Sally.....................................................1
Zhang Liang...............................................23
Zhang Xinzhu.............................................17
Zhao, Jonathan..........................................14
BUSINESS & FINANCE
Qualcomm Case Sparks Debate in China

BY LAURIE BURKITT
BEIJINGThe rules guiding relationships between Chinas cabinet

advisers and private businesses are
spurring debate, after the dismissal
of a government antitrust adviser
who conducted paid work on behalf
of U.S.-based Qualcomm Inc.
Chinas State Council dismissed
Zhang Xinzhu from its antitrust advisory panel this week after learning
that he worked on a report advising
the wireless-technology company on
pricing and business strategies, according to state-run news agency
China News Service.
Chinese regulators have been investigating whether Qualcomm
holds monopoly power over important technology, a matter before the
antitrust panel on which Mr. Zhang
served.
Qualcomm is one of several multinational companies under pressure
in China, where regulators are tightening enforcement of antitrust law.

The Qualcomm investigation has
attracted attention in recent
months, as China prepares to roll
out a new fourth-generation telecommunications network that relies
on Qualcomms technology. Officials
have told state media that the investigation is nearing a conclusion.
A Qualcomm spokeswoman said
the company hired a U.S. firm to
provide an economic analysis related to the governments antitrust
investigation, stating that Mr. Zhang
was one of the people engaged by
that firm. She said Qualcomm paid
the firm its standard rates, while
having no direct financial dealings
with Mr. Zhang.
Mr. Zhang declined to comment
on his relationship with Qualcomm
in a text message Wednesday, saying, The timing is terrible.
In an interview with state media
earlier in the week, he was quoted

as saying he had been removed for
speaking out on behalf of foreign
corporations. In another state-media
report, published Thursday, he denied reports that he had been paid
as much as 6 million yuan
($975,000) for the Qualcomm work.
A government adviser
was dismissed for work
related to Qualcomm.
Some experts say that despite a
lack of clarity from the cabinet, Mr.
Zhang should have known that the
relationship with Qualcomm was a
conflict of interest. Sheng Jiemin, a
law professor at Peking University
who says he is a close friend of Mr.
Zhangs, said the National Develop-
ment and Reform Commission

makes clear that panelists cant
have overlapping roles in the public
and private sector.
Still, other people say potential
conflicts of interest often pop up in
cabinet advisory panels. Committee
members frequently are also lawyers who represent companies or
academics who write industry or
corporate papers, an economic-arbitration committee member said. The
person said some members step
down voluntarily if they feel their
roles are inappropriate.
Conflict is an issue and its not
clearly defined in China. When its
not clearly defined, who do you
have to blame? the person said.
Chinas State Council leans on
expertsoften lawyers or academicsfor advice on such matters as
antitrust and economics. But the
cabinet hasnt outlined clear restrictions on the relationships its advis-
ers can have with companies, said

people who serve on government
committees. Internal regulations are
complicated, the committee member
said, adding that advisers operate in
a gray zone.
Experts serving on government
panels are told not to disclose information to the public, the person
said. There is an understanding that
advisers wont take an antigovernment stance, the person said.
No one can find out the rules,
said a person serving on an economic-arbitration committee.
The State Council couldnt be
reached for more information on the
rules.
It was unclear if Mr. Zhang disclosed to the committee any relationship he held with corporations
or if he was required to do so.
Kersten Zhang in Beijing
and Don Clark in San Francisco
WELCOME TO OUR WORLD

BREITLING.COM
AVENGER GMT
Health Costs, Weak Store Traffic Hinder Wal-Mart

BY SHELLY BANJO
AND MICHAEL CALIA
The worlds largest retailer is
having a hard time returning to
growth and doesnt expect sales to
improve in the U.S. for much of the
rest of the year.
Wal-Mart Stores Inc. cut its
earnings guidance for the year after
it posted its seventh straight quarterly decline in U.S. store traffic and
said growth in online sales would
slow. It cited sluggish consumer
spending and higher costs associated with building new smaller-format stores, increased health-care expenses, and greater investments in
its e-commerce operations.
Sales excluding newly opened or
closed stores in the U.S. were flat.
That was a mild improvement after
five straight quarters of declines,
but nevertheless underscored the
challenges facing a division that
made up 60% of the retail companys
$476 billion in revenue last year yet
hasnt recorded positive comparable-store sales since 2012.
We wanted to see stronger

comps in Wal-Mart U.S. and Sams
Club, Chief Executive Doug McMillon said. Stronger sales in the U.S.
businesses wouldve also helped our
profit performance.
A rough streak of results from retailers is raising concerns about the
health of the consumer as the economy chugs through the second half
of the year. The bad news came not
just from Wal-Mart, but also from
Macys Inc., Michael Kors Holdings
Ltd. and Kate Spade & Co., companies that until recently had weathered the weak demand and heavy
discounting that have plagued the
industry. The Commerce Department
said Wednesday that spending at
U.S. retailers was flat in July.
For the three months ended July
31, Wal-Mart posted a profit of
$4.09 billion, up slightly from $4.07
billion a year earlier. Revenue rose
2.8% to $120.1 billion.
Wal-Mart investors had low expectations going into Thursdays report. The departure of U.S. chief Bill
Simon earlier this month had stoked
concerns that efforts to improve

store merchandise and operations
hadnt managed to materially boost
sales. Meanwhile, Wal-Marts core
low-income customers continue to
struggle with depressed wages and
cuts in government benefits.
Our customers are still under
pressure, Chief Financial Officer
Charles Holley said. They are concerned with their cost of living and
employment.
Shoppers like Jessica Manzanares, 28 years old, continue to
pinch pennies.
All the prices are going up on
gas, food, school supplies, said the
mother of three as she compared
notebook prices at a Wal-Mart store
in Denver.
This year, Ms. Mazanares is comparing school-supply prices between
the dollar-store where she is an assistant manager and Wal-Mart. Its
a little bit cheaper here, and a penny
here and there adds up.
One unexpected headwind came
from health care, where costs are
rising quickly as more employees
sign up for coverage. The company

said it now expects to shell out an
additional $500 million in healthcare expenses related to increased
employee enrollment and higher
costs, up from the $330 million in
increases it originally expected.
Health-care costs increased approximately $180 million versus last
year and were well above our initial
estimates, said Wal-Mart U.S. CEO
Greg Foran, who stepped into the
role this week following the departure of Mr. Simon.
The company now expects fullyear earnings of $4.90 to $5.15 a
share, down from its previous range
of $5.10 to $5.45 a share. U.S. comparable-store sales in the three
months ending Oct. 31 should be relatively flat, the company said.
Wal-Mart said it continued to
spend on compliance costs, including $43 million on costs related to a
continuing investigation into alleged
violations of the U.S. antibribery law
and changes to its global compliance
program. It also added more hours
for employees in the front end of the
store, as well as overnight stockers

and bakery workers, bumping up
salaries and wages by $200 million
from the previous year.
Wal-Mart now expects to spend
an extra five cents to seven cents a
share on e-commerce, including
building a new distribution center
this year in Indiana. It previously
said it expected to spend an extra
two cents to four cents a share.
The company also cut its online
sales-growth projections for the
year to mid-20s from 30%. Its online sales, as well as its smaller-format grocery stores, have been
among the few positive sales drivers
for the company. During the quarter
ended July 31, global online sales
rose 24% and contributed 0.3 percentage point to Wal-Marts U.S.
sales, excluding newly opened or
closed stores. Wal-Mart brought in
$10 billion in online sales last year.
We grew faster than the market,
but we didnt grow as fast as we
wanted to, said Neil Ashe, who
leads global e-commerce at WalMart.
* *
CORPORATE NEWS
BY DON CLARK
Cisco Systems Inc. once again

moved to shed jobs after reporting a
quarter of little sales growth, saying
it will remove about 6,000 employees from its payrolls.
The cuts, which amount to about
8% of the technology companys
global workforce, come as Cisco continues to struggle in emerging markets and in selling to cable companies and other service providers.
The Silicon Valley company,
known for networking hardware, said
it expects to record pretax charges of
as much as $700 million to cover the
costs of the restructuring, which continues a recent pattern. A year ago,
the company announced plans to cut
4,000 jobs, or 5% of its workforce.
Ciscos fourth-quarter financial results, reported Wednesday, topped its
projections and showed signs that
the worst of a recent slowdown is
over. Nevertheless, the company still
hasnt been able to return to growth.
Ciscos fourth-quarter profit slid 1%
on revenue that edged down 0.5%.
John Chambers, Ciscos chief executive, said in an interview that the
job reductions are designed to make
room for adding different kinds of
skills rather than cutting total costs.
Shedding employees in declining
businesses, he said, will allow the
company to add needed skills in
units that are growing.
We will exit this year pretty

much with the same number of people we started the year with, he
said. Some groups will not be affected at all. Others will.
Cisco said it plans to add staff in
areas that include its data center,
software, security and cloud offerings. Mr. Chambers declined to spell
out which areas will bear the brunt
of cuts until affected employees are
notified. But he acknowledged that
examples could include sales representatives in countries where revenues are shrinking.
Mr. Chambers said the company
expects revenue in the fiscal first
quarter to be flat to up 1% from a
year earlier. He said the company
expects weakness in its service provider video business, which declined
10% in the fourth period.
He also expects struggles to remain in the emerging markets, particularly China, Brazil, Mexico, India
and Russia.
The emerging markets lost momentum in Q4, Mr. Chambers said.
Ciscos shares were off 2.4% at
$24.60 on the Nasdaq Stock Market
on Thursday afternoon.
Bill Kreher, an analyst at Edward
Jones, said Cisco is moving more
quickly than in the past to trim costs
in businesses where it faces stiff
competition, such as in switching and
routing. The pace of change is
quicker than ever, he said.
Cisco, based in San Jose, Calif., is

best known for routing and switching systems that funnel data among
server systems and around the Internet. But the company has
branched into new markets through
acquisitions, including television
set-top boxes, videoconferencing
and computer-security products.
The company recently announced
plans to offer computer services to
other companies, based on a model
the industry calls cloud computing.
Cisco, whose customers include
many kinds of companies and telecom vendors, is often among the
first to experience the effects of new
boom-and-bust cycles.
Ciscos biggest business remains
switching systems. It has introduced
a switching system called the Nexus
9000 that has been attracting orders, though Mr. Chambers has said
it would take some time for the
hardware to show significant sales.
On Wednesday, Cisco said the
switching market declined 4% in the
fourth quarter. Routing devices declined 7%.
In all, Cisco reported net income
for the quarter ended July 26 of
$2.25 billion, or 43 cents a share,
compared with profit of $2.27 billion, or 42 cents, in the year-earlier
period. Revenue fell to $12.36 billion
from $12.4 billion.
Tess Stynes
Agence France-Presse/Getty Images
Cisco Says It Will Drop

6,000 From Workforce
Construction work progressed in July on a Crown Resorts casino in Sydney.
Gambling in Macau
Lifts Crown Resorts
BY ROBB M. STEWART
MELBOURNE, AustraliaBillionaire James Packers Crown Resorts
Ltd. posted a 66% jump in annual
profit, as strong earnings in the
gambling hub of Macau continued to
offset weakness at the companys
hotels and casinos in Australia.
Still, Crown faces intensifying
challenges early in the 2015 fiscal
year, with Beijings crackdown on
corruption contributing to falling
revenue at Macau casinos, including
one owned by the company and Hong
Kong businessman Lawrence Ho.
In Australia, gamblers are tightening spending as the economy cools
at the end of a long mining boom,
and as unemployment edges higher.
On Thursday, Crown said its net
profit rose to 655.8 million Australian
dollars (US$610.2 million) in the year
through June from A$395.8 million a
year earlier, when earnings were held
back by an almost A$70 million loss
on the sale of a stake in rival Echo
Entertainment Group Ltd.
Normalized profit, a figure used
by casinos that seeks to smooth out
volatility in their VIP business associated with high-roller gamblers,
was 35% higher at A$640 million, in
line with the A$636 million average
of six analyst forecasts compiled by
The Wall Street Journal.
Crown has been scouting for new
locations and upgrading existing ca-
sinos to attract wealthy Asian gamblers. In July, Crown joined Chinas

state-owned Greenland Holdings
Group in bidding for a new casino license in Brisbane, competing against
a consortium featuring Echo and two
Hong Kong-based companies.
Crown also wants to open a A$1.5
billion casino-hotel complex in Sydney around 2019, pitting it against
Echos flagship The Star casino.
But with those casinos some
years away from opening, Crown remains reliant on its Melco Crown
Entertainment Ltd. venture in
Macau to drive profits in the absence of a major turnaround in Australia, where it owns casino complexes in Melbourne and Perth.
Crown said its share of profits
from its 33.6% stake in Melco Crown
Entertainment rose 91% on a normalized basis to A$291.2 million, while
earnings before interest, tax, depreciation and amortization on a similar
basis at Crown Perth nudged up just
0.3%, and Crown Melbournes normalized Ebitda rose 2.8%.
A concern for investors is
industry data showing that casino
revenue in Macau fell for a secondstraight month in July, dropping
3.6% from a year earlier as high rollers from mainland China stayed
away. The retreat in Macau has been
driven by the same VIP gamblers
who powered the citys rise to the
top in recent years.
Hyundai Nearer to Strike

BY IN-SOO NAM
SEOULWorkers at Hyundai
Motor Co. voted on Thursday to
walk off the job as early as next
week, following a series of failed negotiations over wage and benefit issues.
In Korea, militant labor unions
putting down tools after wage negotiations have gone nowhere is common at this time of year, hurting
corporate profitability.
But this year, any significant
work stoppage would prove more
damaging to Hyundai, South Koreas
largest auto maker by sales, which
is reeling from an appreciating local
currency.
We urge the company to accept
our demand. Otherwise, we all could
perish together, said union spokesman Hwang Ki-tae.
The company had no immediate
comment on the workers decision.
Hyundai union leaders are set to
meet on Monday, and make a final
decision on whether to go on a partial or a full strike, Mr. Hwang said.
The companys 47,000 unionized

workers can legally start a strike as
soon as next week on Friday, according to him.
Hyundais management has been
under pressure to reach a deal with
its workers, after General Motors
Co. Korean unit agreed last month
to new wage terms, including a
union demand that fixed bonuses be
counted as basic salary. Ssangyong
Motor Co., the local unit of Indian
sport utility vehicle maker Mahindra & Mahindra, also struck a similar deal in late July.
Following a favorable South Korean Supreme Court ruling in December, labor unions across industries have been demanding bonuses
and other benefits to be integrated
into ordinary pay. This would result
in raising the base salary, which is a
sensitive issue for local manufacturers, particularly in the labor-intensive automotive industry, as base
salary is used to calculate
everything from overtime payments
to annual pay increases and severance pay.
CORPORATE NEWS
Auto-Parts Giants Search for Mergers

BY JOSEPH B. WHITE
AND JOHN D. STOLL
DETROITGerman auto parts

maker ZF Friedrichshafen AGs attempt to buy U.S. rival TRW Automotive Holdings Corp. for more
than $10 billion would be the biggest
deal to hit the automotive supply
chain in years, but it isnt alone:
auto supplier M&A has sizzled in
2014 and industry executives are
hunting for more deals.
ZF has been in talks with TRW for
several weeks about an acquisition
and the parties are still apart on various issues, people familiar with the
matter said. If sealed, the deal would
marry two companies with a combined $37 billion in revenue, creating
a company roughly the size of market
leaders Robert Bosch GmbH or Japans Denso Corp. It would also be
better positioned to compete in an industry moving toward electrified vehicles and self-driving cars.
Since news of the deal emerged,
several major auto suppliersincluding U.S.-based Delphi Automotive
and BorgWarner Inc., and Swedish
safety-parts supplier Autoliv Inc.
have indicated they are eager to ink
deals in the second half of 2014.
While likely smaller in scale, the
transactions will be driven by similar
factors: easier access to financing, a
desire to snap up companies with advanced technology on the shelf and
fears of being left behind.
We want to acquire leadingedge technology that will drive
growth for us, BorgWarner Chief
Executive James Verrier said this
month. The pipeline is pretty robust and long and deep. Delphi, its
crosstown rival, said it expects to
pull the trigger on deals ranging
from $200 million to $1 billion by
the end of the year.
The statements come amid an uptick in supplier M&A activity. To date,
there have been more than $13 billion
in global auto-supply deals in 2014,
exceeding the $12.4 billion in deals
done over the entire 2013 period and
the highest mark since 2006, according to data provider Dealogic.
In a study to be published later
this month, PricewaterhouseCoopers
LLP will report that while deal sizes
are shrinking slightly, far more
transactions are getting done and
that trend is expected to accelerate
in 2014. European suppliers, are
showing renewed vigor amid rising
sales in their core markets, and Chinese suppliersspending the most
on R&D and growing fastestare
consistent drivers of deal activity.
Private-equity firms, meanwhile,
remain active suitors (the biggest in
2014 was the purchase of Gates Corp.
by Blackstone Group for $5.4 billion).
ZFs deal is expected to further
boost the appetite for strategic
deals. In a note to investors, Morgan
Stanley auto analyst Adam Jonas
said certain suppliers should prioritize and aggressively pursue acquisitions, especially in light of a potential TRW+ZF combination.
Like other analysts, Mr. Jonas
doesnt believe the ZF deal kicks off
a wave of Tier-1 auto supplier consolidation, but we do think that the
potential big combination could
Electrolux in Talks to Buy

GEs Appliance Business
STOCKHOLMSwedish appliance manufacturer Electrolux AB

has held preliminary discussions
about acquiring General Electric
Co.s appliance business, joining a
group of other potential suitors considering a deal that could expand
their reach in North America.
By Jens Hansegard,
Ted Mann
and Joann S. Lublin
GEs century-old appliance business, which along with lighting generated $8.3 billion in revenue last
year, could help Electrolux Chief
Keith McLoughlins drive to expand
his companys sales beyond Europe,
where growth has been slow. Electrolux, with $15.9 billion in 2013
revenue, said in a statement Thursday that it has held discussions
about a possible acquisition, but no
agreement has been reached and
there can be no assurances that an
agreement will be reached.
GE, looking to possibly shed a
profitable appliance business with
low margins and significant labor
costs, has also been approached by
Electrolux rivals. Other potential
bidders include South Koreas LG
Electronics Inc. and Samsung Electronics Co. as well as Arcelik AS of
Turkey, a lower-cost producer, according to a person familiar with
the discussions.
GE is evaluating a wide range of
strategic options for our appliances
business, including discussions with
Electrolux and other interested parties, GE spokesman Seth Martin
said, confirming Electroluxs interest but not naming other parties.
LG, Samsung and Arcelik
couldnt be immediately reached for

comment.
Electrolux, whose home appliances include Frigidaire and AEG, is
nearing the end of a restructuring
designed to reduce overhead costs
and revamp its manufacturing footprint. In recent years, it has been
dogged by malaise in European markets, prompting Mr. McLoughlin to
pursue growth in Asia and North
America.
Electrolux has a history of expanding through acquisitions. It
made a flurry of acquisitions
throughout the 1960s, acquired
Frigidaire in 1986, bought AEGs
household division in 1994, and
bought Chilean appliance manufacturer CTI in 2011.
A clutch of major Nordic industrial companies have been acquisitive in recent years amid strong underlying economic conditions in
Scandinavian countries, including
Sweden, and many deals have been
aimed at grabbing companies with
manufacturing operations or customers near the U.S. market. Swedish lock maker Assa Abloy AB, for
instance, has been hunting for
American acquisitions, motivated by
the view that the U.S. construction
market will continue to improve.
Electrolux is doing better in Europe despite the continents darkening economic outlook, but weakness
in Latin America was a key factor in
the company reporting a 4.8% revenue decline in the second quarter.
Electroluxs products include refrigerators, dishwashers, washing machines, cookers, air conditioners and
vacuum cleanerswith many of
those products overlapping with
GEs product lines.
Bulking Up
A merger of ZF and TRW would create one of the biggest auto parts suppliers
by 2013 sales
Robert Bosch
Denso
Magna International
Continental
Aisin Seiki
Hyundai Mobis
Faurecia
Johnson Controls
ZF Friedrichshafen AG
Lear
TRW Automotive
Yazaki Corp.
$0
$10B
Source: Automotive News
jump start some companies into action that may have been on the
fence about strategic M&A.
Mr. Jonas singled out Swedish
safety-parts supplier Autoliv. Last
month, Chief Executive Jan Carlson
said we have talked about an
amount of $1 billion or so for a
transaction, and indicated Autoliv
may need an acquisition by years
end to reach its targeted leverage
ratio.
Some technology suppliers, however, are proving to be too pricey.
Mobileye NV, the maker of vehiclesensing technology essential for
driverless cars, went public this
month and now sports a market
value of nearly $7 billion.
Mr. Carlson said Mobileyes multibillion-dollar valuation before the IPO
wasnt within Autolivs budget.
$20B
$30B
$40B
Delphi executives will also have

to take a step back and give far
more scrutiny to a deal that exceeds
$1 billion to avoid getting big for
the sake of bigness, according to
Rodney ONeal, the companys chief
executive.
Brian Johnson, an analyst with
Barclays, said the ZF deal is designed to help the private German
company to survive in a future
world in which electric vehicles become the dominant vehicle. And it
will take more than just one or two
small acquisitions to succeed.
In the next five years, a battle is
brewing in the industry, Mr. Jonas
said, referring to a race to control
the central nervous system of a vehicles web of electronic components. It is unclear how many auto
suppliers have ZF-size ambitions.
The German auto companys

salvo comes amid an era when many
once-massive auto suppliers are actually pulling back from being heavily-diversified one-stop shops. Many
suppliers, have drastically slimmed
their focus on a few niche areas, and
tried to use that expertise to
broaden their customer base.
China will be another driving factor in automotive supplier deals.
Larger, diversified industrial companies looking for a way to accelerate
growth could acquire auto parts
businesses to ride the projected expansion of the Chinese market.
You really have to have that
global footprint, says Richard Walawender, head of corporate, international and automotive practice
groups at Detroit law firm Miller
Canfield. Thats true for U.S. and
European companies that lack a
presence in China or emerging
markets, and it is true for Chinese
firms that lack operations outside
their home market, he says. Miller
Canfield has worked with several
Chinese firms that acquired North
American auto parts operations.
The Chinese governments recent
moves to ease restrictions on overseas investments are spurring more
shopping by Chinese companies interested in the U.S. automotive sector, Mr. Walawender says.
The trend is for them to be
looking at larger deals, Mr. Walawender says. They have become a
lot more sophisticated as buyers.
Jeff Bennett
and Christina Rogers
MARKETS
Brevan Howard Cuts

Risk After Losses
BY LAURENCE FLETCHER
LONDONBrevan Howard Asset
Management LLPs flagship $26.5
billion hedge fund has more than
halved its risk levels this year and
moved back toward interest-rate
trading, the specialty of its founders, during a testing 2014.
The fund, managed by billionaire
Alan Howard and renowned for its
profits during the credit crisis, lost
money every month in the first half
of this year, hit by losses on Japanese equities, U.S. interest rates and
currencies such as the Canadian dollar.
The fund has now shifted much
of its focus back toward interestrate trading, Mr. Howards bread
and butter.
Ultralow interest rates, driven
down by central-bank action, have
made life tough for macro traders.
It may be that market perceptions [of interest rates are] shifting in
the U.K. and U.S., said a person close
to Brevan. Opportunities in trading
rates may be about to change.
The fund has also drastically cut
its risk levels during the first half of
the year, according to a report sent
to investors and reviewed by The
Wall Street Journal.
Its so-called value at riska
measure widely used by banks and
hedge funds to show exposure to
lossesas a proportion of its net asset value dropped to 0.28% at the
end of June.
That compares with 0.65% at the
end of last year and as much as 1.2%
early last year. While VAR can fall
either because a fund manager cuts
risk, changes the way it constructs
its trades or simply as a result of a
drop in market volatility, it means
the funds risk is now not far from
its lowest-ever, when it dropped below 0.2% in early 2008 during the
credit crisis.
Brevan Howard declined to comment.
The reduction in risk comes as
many macro funds struggle to find
interesting trading ideas amid becalmed markets that many see as offering few bargains. According to
Hedge Fund Research, a data provider, the average macro fund is up
just 0.3% in the first seven months
of the year.
Brevan itself is facing a testing

time. Despite posting its first
monthly gain of the year in July, the
Master fund has still lost money in 11
out of the past 15 months of trading.
After what Mr. Howard described
as a somewhat disappointing year
in 2013, the Master fund is down
3.7% so far this year, meaning it
could be heading for its first-ever
calendar year of losses.
As losses have mounted, Brevan
has cut back exposure to currency
and equity trading and moved back
toward interest-rate trading.
This marks a return to a key area
of expertise for Mr. Howard who,
along with Brevans other co-founders, was part of Credit Suisses developed-markets rates trading team.
Theyve gone back to their
roots, said one investor, who asked
not to be named.
The reduction in risk

comes as many macro
funds struggle to find
interesting trading ideas
amid becalmed markets.
The proportion of its risk that is
in currencies has been cut to 15%,
according to the investor report,
while its allocation to interest rates
has risen to 42%. Each accounted
for about one-third of risk at the
start of the year, said the investor.
Caxton Associates LP, an $8 billion macro hedge-fund firm, is also
trimming its exposure to currencies
after losses in the area weighed on
its performance this year.
The New York-based firm has
taken down more than half of its
bets against developed-markets currencies to plow more into commodities, investor updates indicate.
Like Brevan, Caxton lost money
for the six consecutive months to
start the year before turning it
around in July. Its main fund is
down about 5% in 2014.
Geneva-based Mr. Howard, one
of the co-founders of the firm, is
ranked 53rd in this years Sunday
Times Rich List for Britain, with a
1.6 billion ($2.67 billion) fortune.
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Bloomberg and Markit

Circle a Barclays Unit
BY TELIS DEMOS
AND KATY BURNE
Rival financial-data providers

Bloomberg LP and Markit Ltd. are
separately looking at acquiring the
fixed-income index unit of Barclays
PLC, operator of a widely used
benchmark for fixed-income portfolio managers, according to people
familiar with the matter.
Bids being discussed are about
$1 billion, said the people. Some
other potential bidders still are
monitoring the discussions, one of
the people said.
Privately held Bloomberg and recently listed Markit both provide a
wide swath of financial data and
trading services to big banks, including for derivatives, loans and
currencies. Adding the fixed-income
indexes would give each firm another major link to clients.
The prospective sale, earlier reported by Reuters, is part of Barclayss process of slimming down its
investment-banking footprint in
fixed income. The index unit, known
as Index Portfolio and Risk Solutions, provides some of the most
widely used benchmarks for measuring the movements in prices of
corporate and government bonds.
Lance Uggla, Markits chief executive, told analysts on the companys
earnings call Wednesday that Markit
was interested in expanding its index
business. Were aware of the assets
that are for sale in the space, and if
they make sense for us, theyre definitely things we would consider, he
said. He didnt comment on any specific deals and said the company
didnt have anything to disclose.
There is growing interest in index businesses following long-running regulatory probes into alleged
manipulation of financial benchmarks, including the London interbank offered rate, or Libor, that
Tracking Business
Some financial indexes and their
owners.
INDEX: Bloomberg Commodity
Index Family
TRACKS: commodities
OWNER: UBS AG
INDEX: CDX and iTraxx
TRACKS: Derivatives
OWNER: Markit Ltd.
INDEX: Dow Jones Industrial
Average
TRACKS: Stocks, S&P Dow Jones
Indexes
OWNER: McGraw Hill Financial Inc.
and CME Group Inc.
INDEX: Russell 2000
TRACKS: Small stocks
OWNER: Frank Russell Co., which
is being acquired by London Stock
Exchange Group PLC
INDEX: S&P 500
TRACKS: Stocks
OWNER: S&P Dow Jones Indices
INDEX: U.S. Aggregate
TRACKS: Bonds
OWNER: Barclays PLC
tracks rates on trillions of dollars of
loans to individuals and businesses.
Regulators have called for transparent index standards and have urged
the adoption of reliable yardsticks.
Unlike with stocks, which have a
central, liquid market for trading
and pricing, traders in the decentralized bond market often rely on
indexes and other measures to track
performance.
In June, London Stock Exchange
Group agreed to pay $2.7 billion for
Frank Russell Co., owner of Russell
Investments and operator of the
widely watched Russell 2000 barometer of small-stock performance.

London-based Markit raised $1.5
billion in an IPO in June. It increased
the stakes in its competition with
Bloomberg by announcing last year
new tools for sending instant messages, which Bloomberg has dominated through its terminals for many
years. Bloombergs news service
competes with Dow Jones & Co.,
publisher of The Wall Street Journal.
Markit already has a suite of
widely used indexes of its own tracking derivatives tied to corporate and
sovereign debt around the world,
among other things. Derivatives are
contracts that pay out based on the
performance of a separate stock,
bond or other instrument.
I really like the index business,
Mr. Uggla told analysts Wednesday.
Its a great recurring revenue business. It plays well with our data
business. He also noted that
Bloomberg recently struck a strategic
partnership with UBS AG over the
banks commodities indexes and acquired UBSs Australia bond indexes.
Barclays has dominated the index
business largely because fixed-income portfolio managers have relied
on its flagship: the U.S. Aggregate
bond index.
The index unit was something of
a surprise hit for the U.K. bank,
which took it on through its acquisition of the North American investment banking and capital markets
business of Lehman Brothers Holdings Inc. in 2008. Barclays held annual meetings with clients to hear
what changes should be made, the
people said. In November 2013, the
bank added Russian ruble- and
Turkish lira-denominated local-currency government debt to the Barclays Global Aggregate index, and
commercial mortgage bonds issued
and backed by U.S. agencies to the
U.S. Aggregate Bond Index.
Russia Oil Exports to Asia Climb
Continued from page 15

projects, and drilling-pipe maker Hilong Holding Ltd.
Western sanctions also targeted
Russias largest shipbuilder, stateowned United Shipbuilding Corp.,
earlier this month for its work with
the Russian Navy.
United Shipbuilding has been
trying to enter the lucrative market
for building liquefied-natural-gas
tankers, a bright spot in an otherwise frail shipping sector but one
dominated by powerful Japanese
and South Korean companies.
Analysts say United Shipbuilding
is a potential competitor in the LNG
tanker business in the long run,
with strong support from its government. However, it doesnt yet
have the capability to build LNG
tankers, and the sanctions against
it, which include bans on technology
transfers and constraints on access
to financing, should help Asian shipbuilders protect their market share.
South Koreas Daewoo Shipbuilding & Marine Engineering Co.,
in particular, is likely to benefit
from sanctions against United Shipbuilding. Daewoo Shipbuilding has
been the front-runner for producing
tankers that can operate in harsh
Arctic environments, such as Russias Yamal gas project in the Arctic
Russian Crude Exports

Around 30% of Russia's oil exports this year have gone to Asia, and are expected
to rise. Exports via Transneft pipeline, in millions of barrels a day.*
Exports to Europe
Exports to Asia
4.0
1.0
0.8
3.5
July
0.92
0.6
3.0
0.4
July
2.96
2.5
2.0
2010 11
12
13
14
0.2
0
2010 11
12
13
14
*three-month moving average

Source: KBC Advanced Technologies
permafrost that needs a fleet of 16

ships.
Russian companies invested in Yamal also face Western sanctions,
which could delay the project and future orders for Daewoo Shipbuilding.
But sanctions against Russias shipbuilder may be a good excuse to place
the remaining orders at Daewoo
Shipbuilding, said Young Soo Han, an
analyst at Samsung Securities.
Deals between our company and
Yamal stand as they are. We have so
far got orders to build 10 ice-breaking LNG ships for Yamal and are
awaiting more orders from the company. We are positive, a spokesman
for Daewoo Shipbuilding said.
Mr. Han said that if Russian shipbuilders struggle to secure enough
capital to enhance their competitiveness because of the sanctions, Russia
will have no choice but to rely more
on overseas shipbuilders.
In-Soo Nam in Seoul
MARKETS
China Moves
To Fill Leaks
As Money
Flows Abroad

where gamblers could do a quick
buy-and-return transaction and
come away with cash, have recently
been shut.
These outlets were put on these
prime real-estate locations for one
reasonto drive the mass business,
said Ben Lee, managing partner of
IGamiX Management and Consulting, who advises casinos. Moving
them away should thus have an inverse relationship to the growth of
business there.
The biggest global impact of the
crackdown will be felt in real estate.
Chinese buyers have buoyed property markets from Sydney to Vancouver to London. Given the high
prices of the homes involved, the
buyers are certainly moving more
than $50,000 out of the country.
One route favored by real-estate
investors that has been shut down is
a money-transfer service run by
Bank of China Ltd. called You Hui
Tong. Bank of China has said that it
has received some regulatory approval for the service. China is also
working on a deal with U.S. regulators that would force U.S. banks to
disclose the assets of Chinese depositors.
The squeeze is already hitting
Chinese developers working overseas, such as Country Garden Holdings Co. The developer has marketed some of the 10,000 units in a
new waterfront land development in
Danga Bay, Malaysia, to mainland
buyers.
Country Gardens Malaysia project, its first international foray, was
lauded as a success in its 2013 annual report, with contract sales of 7
billion yuan ($1.13 billion). But this
year, it has suffered from cancellations, mainly from Chinese buyers,
according to people close to the
matter. Some have cited difficulty in
obtaining mortgages or moving
funds offshore as one of the reasons
for canceling.
The company said in an emailed
response that You Hui Tong isnt the
only overseas remittance method its
Chinese buyers use. Although the
impact of the closing of the service
is limited, it does affect its marketing campaign, the company said.
The developer is now trying to
attract buyers through discounts. It
is also offering customers advice on
how to get the cash needed to buy a
unit out of China. During a recent
visit to its sales office, about a 10minute drive from Singapore, a
saleswoman said that with the Bank
of China channel closed for now, clients should look into underground
money-exchange channels.
Some Chinese are using friends
and family members transfer quotas to get the money they need over
the border. But that practice has
raised red flags, too, with global
banks increasingly scrutinizing
money laundering.
For those who seek government
approvals for big property purchases abroad, various regulatory
bodies in China are asking detailed
questions about where the money
comes from and what they are buying with it, said Darren Xia, China
director at real-estate firm Jones
Lang LaSalle.
The government isnt turning
the tap off, Mr. Xia said. But they
dont want it to get out of control.
Vietnam to Import Coal in 2015

BY VU TRONG KHANH
HANOIVietnam will likely start

importing coal next year, two years
earlier than expected, to help generate electricity to keep up with rising
business and consumer demand, the
chairman of an energy trade group
said Thursday.
Domestic coal production is
slowing down, while several new
coal-fired power plants will become
operational over the next years,
Vietnam Energy Association Chairman Tran Viet Ngai said in an interview.
Mr. Ngai made his prediction after
Deputy Prime Minister Hoang Trung
Hai told the Ministry of Industry and
Trade on Tuesday to adjust the countrys plan for coal imports and consider an earlier start date and larger
volumes, according to a statement on
the governments website.
Mr. Hai didn't specify when coal

imports would begin and couldnt be
reached for further comment.
The deputy prime minister also
told state-owned coal producers to
maximize their exploration and production to increase output, noting
that production is falling below the
governments targets.
Vietnams electricity demand is
expected to rise by an average of
14% a year during the 2011-2015 period and subsequently by 11% a year
through 2020, according to the
Asian Development Bank.
Coal is expected to play an increasingly large role in meeting that
demand. Vietnam has been relying
solely on domestic coal, but supplies
are proving harder and more costly
to retrieve.
Its not easy for Vietnam to increase its coal output now, given that
production cost is higher while there
hasnt been sufficient investment in

the coal-mining sector, Mr. Ngai
said. We now have to dig deeper to
get coal and importing is inevitable.
Vietnam has placed orders to import coal from Indonesia, Australia,
India and China, Mr. Ngai said. He
added that the first two sources are
the most promising. He said annual
imports might rise to 40 million tons
by 2020 and 100 million by 2030. By
2020, Vietnam should be burning 67
million tons of the fuel annually,
from 12 million in 2012, under the
governments long-range plans.
Coal-fired plants account for 37%
of Vietnams total electricity generation capacity, and will provide 60%
by 2020, Mr. Ngai said.
Vietnams other major sources of
electricity are facing their own obstacles. The nations hydropower
potential has almost been fully
tapped, while commercial disputes
and sovereignty issues are delaying

use of the countrys abundant gas
reserves. Renewable-energy sources
beyond hydropower are in their infancy, and Vietnams first nuclearpower complex isnt expected to
produce energy before 2023.
Nguyen Van Bien, deputy general
director of state-owned Vietnam National Coal-Mineral Industries Holding Corp., said the recent economic
slowdown has dented coal-mining
investment. Mr. Bien said Vietnam
has been cutting coal exports to
save the fuel for domestic use.
According to government data,
Vietnam exported 12.8 million tons
of coal in 2013, down 16% from a
year earlier and well below a recent
peak of 25 million tons in 2009. Exports are expected to fall 38% to
eight million tons this year and to
between four million and five million tons next year.
MARKETS
Blue Chips
Stay Afloat;
Europe Data
Disappoint
Anxiety Can Be a Good Thing
Stocks Rarely Sink in Periods of Carefulness; You Want to Buy When Things Look Bad
BY E.S. BROWNING
With stock prices high and the
globe unsettled, investors are feeling unusually anxious. Paradoxically,
that could be a fine thing for markets, some stock strategists say.
When everyone thinks things
look bad, that is when you want to
buy, said Savita Subramanian, chief
U.S. stock strategist at Bank of
America Merrill Lynch. It is when
everyone is positive that you want
to sell.
Historically, markets typically fall
apart when euphoria leads to reckless investing, as before the collapses
of 2000 and 2008. It is less common
for markets to fall hard when investors are acting cautiously.
After some sharp price swings,
the Dow Jones Industrial Average is
down 3% from its July 16 record of
17138.20. On Wednesday, it rose
91.26 points to 16651.80. It is up just
0.5% for 2014 but up 154% from its
March 2009 low.
The Russell 2000 small-stock index is 5.5% below its record, which
dates from March. Earlier this
month, the Russell was off nearly
8%.
Anxiety levels have grown since
the spring of 2013, when the Federal
Reserve indicated it would trim the
stimulus that has supported markets since 2008.
Professional investors such as
pension funds, insurance companies
and hedge funds have cut stock
ownership since the spring of 2013,
government data show. Investors
have shifted toward Treasury bonds.
The 10-year U.S. Treasury note
Wednesday yielded just 2.41%, its
lowest level in more than a year.
Yields fall when bond prices rise.
Money managers are sending clients reports discussing whether
stocks are in a bubble. To protect
themselves from declines, people
are buying options at higher rates
than at any time this year, said Phil
Roth, an independent market analyst. These are signs of caution, not
euphoria.
His conclusion: The stock market
doesnt show significant vulnerability right now. If investors get
overly optimistic this autumn,
stocks could sell off, but he would
be surprised to see a big drop now,
he said.
Merrills strongest indicator in
this domain is one it has been tracking since 1984. When this indicator
has been at its current level, stocks
have risen 98% of the time, Ms. Subramanian said.
The indicator is based on the advice offered by Wall Street strategists like Ms. Subramanian. In fact,
it includes her recommendations.
Feeling Fidgety
A ve-year-long rally in U.S. stocks has taken valuations higher, leaving some investors anxious. But some strategists say thats a good sign,
despite recent stock-fund outows and a low level of volatility, or expected price swings.
S&P 500 trailing price-to-earnings ratio
Dow bull markets end Jan. 14, 2000
35
BY SAUMYA VAISHAMPAYAN
Tuesday
Oct. 9, 2007
17.54
30
25
20
Long-term average
15
10
5
0
1990
95
2000
Longest Dow Jones Industrial Average

bull markets
CBOE VolatilityIndex
$10 billion
100
DAYS
CHANGE
June 13, 1949

Dec. 13, 1961
4,565
355%
Oct. 11, 1990

Jan. 14, 2000
3,381
396
2,931
497
March 9, 2009
Aug. 13, 2014
1,982
154
Aug. 12, 1982

Aug. 25, 1987
1,838
250
10
Weekly investment ows into U.S. mutual

and exchange-traded stock funds
PERIOD
Aug. 24, 1921

Sept. 3, 1929
05
80
Wednesday
5
40
10
Aug.6
15
20
20
$18.5 billion
J
Sources: Birinyi Associates (S&P 500); Market Data Group (bull markets); Lipper (stock ows); FactSet (VIX)
Embarrassingly, Wall Street advice

is a contrarian indicator.
When investment strategists are
very bullish, it typically is a sign of
excess optimism. Stocks generally
do poorly then.
When strategists are very bearish, stocks usually do well.
Wall Street strategists today are
bearish. They recommend that investors hold just 51% of their money
in stocks, far below the average recommendation of 60% over the past
15 years. That is well below the peak
of 66% before stocks started to
crumble in 2007. For Merrill, any
average recommendation below 54%
is a buy signal. This indicator currently forecasts a 22% stock gain in
the next 12 months.
Ms. Subramanian herself forecasts only half that big a gain, but
the indicator has made her wonder.
Of all the indicators she follows, this
was the only one that accurately
forecast a 30% gain for the S&P 500
last year.
Merrill also tracks the exuberance of money managers, who also
are bearish. Its surveys show money
managers holding 5% of assets in
cash, the most since June 2012.
12.9
60
That is up from 4.5% a month ago.

Mutual-fund data, meanwhile, indicate the same pessimism. Mutualfund holdings of stocks whose performance depends on strong
economic growth are the lowest
since 2009, Merrill said.
They are basically in the bunkers from a positioning standpoint,
Ms. Subramanian said.
History isnt a perfect predictor,
of course. The current era is exceptional, with stocks heavily dependent on Fed support. History may be
less useful than usual.
And despite all the signs of nervousness, there still is excess in
parts of the market, such as socialmedia stocks, biotechnology stocks
and junk bonds, said Jason Pride, director of investment strategy at
Glenmede Trust, which oversees
$26 billion in Philadelphia.
He, too, thinks the broad market
will rise, but the riskier stocks could
fall further, he said. If they do, there
is always the danger that investors
who have made big bets with borrowed money could sell not just the
risky stocks but also their broader
holdings. That could pull down
many stocks.
0
2004
06
08
10
12
14
It isnt our base case, but it is

possible something could leak over
from risky stocks to the broader
market, Mr. Pride said.
Mr. Roth added that surveys of
futures traders and newsletter writers suggest that some investors still
are overly optimistic. If they panic,
their selling could hurt the broad
market.
Others worry about valuations
being above their long-run average
and point to signs of complacency.
The fear gauge known as the CBOE
Volatility Index, or VIX, was at 13 on
Wednesday, well below its long-run
average of 20. The current bull market is fourth-longest on record at
1,982 days.
Mr. Prides firm has turned away
from economically sensitive stocks
and toward those tied to dividends
or to sales of staple products. He
also shifted some money to foreign
stocks from areas like junk bonds.
He finds many foreign stocks more
attractively priced than U.S. stocks.
The most likely scenario is that
U.S. stocks will grind slowly higher,
Mr. Pride said. But he considers the
risk of a decline greater than the
likelihood of a big gain.
Argentine Bonds Fall as Deal Hopes Fade

BY NICOLE HONG
Argentine bond prices fell to a
nearly seven-week low on Thursday,
as hopes dimmed for a speedy resolution to the countrys default.
The countrys dollar bonds due
2033, which were among the ones in
default, fell to 83.25 cents on the
dollar early Thursday, down from 84
cents Wednesday, according to traders. This is their weakest level since
June 27, traders said. The yield rose
to 10.75% from 10.62%; bond yields
rise when prices fall.
Driving the bond prices lower is

the fading optimism for a privatesector solution to Argentinas default. Late Wednesday, one of Argentinas holdout creditors, Aurelius
Capital Management LP, said there
is no realistic prospect that its
debt dispute with the Argentine
government can be resolved with a
third-party deal. U.S. and Argentine
banks, including J.P. Morgan Chase
& Co. and Citigroup Inc., had been
trying to reach a deal to help Argentina pay off the debt it owes to its
holdout creditors, according to peo-
ple familiar with the discussions.

The countrys bonds are still
trading at lofty levels, considering
many analysts had anticipated
prices would plummet closer to 60
cents on the dollar after the default.
But the bonds will stay under pressure as the debt dispute drags on,
analysts said.
Argentina defaulted on some of
its bonds on July 30, after it missed
an approximately $539 million interest payment due to its restructured
bondholders. A U.S. federal judge
has ruled that Argentina cant pay
its restructured bondholders until it

pays the holdouts, which are a
group of hedge funds suing the
country for full payment on bonds it
defaulted on in 2001.
Argentina has argued that it isnt
in default because it deposited with
Bank of New York Mellon the money
necessary for the interest payment
on June 26. However, BNY Mellon
hasnt passed the money along to
bondholders because the U.S. judge
warned that any bank who helps Argentina process the payment would
be violating a U.S. court order.
U.S. stocks rose on Thursday, extending the Dow industrials march

back into positive territory for the
year.
The Dow Jones Industrial Average added 52 points, or 0.3%, to
16794 in early afABREAST OF ternoon trading.
THE MARKET The S&P 500 rose
eight points, or
0.4%, to 1955, and the Nasdaq Composite Index gained 16 points, or
0.4%, to 44450.
Jobless claims rose by 21,000 to
311,000 in the week ended Aug. 9,
the Labor Department said Thursday. Economists had expected new
claims to rise to 295,000. Separately,
U.S. import prices fell 0.2% in July
from June, versus projections for a
0.3% decline.
Stocks have seesawed in the past
month. While the Dow is now higher
for the year, it remains below its
July 16 record close of 17138.20. The
mid-July swoon was sparked by a
surge in geopolitical risks and concerns about how the end of the Federal Reserves easy monetary policy
might affect the market.
In the last 30 days, you had the
market topping out and you had a
nice pullback, which to me is very
healthy and logical, said Bill
Nichols, head of U.S. equities at brokerage Cantor Fitzgerald LP.
Still, many investors say that improving economic data, especially in
the labor market, and corporate
earnings should support stocks in
the long run. The underlying fundamentals still warrant higher prices.
The market is not that expensive
given the economic data that weve
had, said Robert Pavlik, chief market strategist at Banyan Partners.
Cisco Systems said it would reduce about 8% of its global workforce. The technology company reported a 1% drop in fiscal fourthquarter profit and a 0.5% decline in
revenue, with results topping expectations. Cisco shares fell 2.7%.
Wal-Mart Stores cut its full-year
earnings guidance and reported its
seventh straight decline in quarterly
U.S. store traffic. Revenue rose 2.8%
to $120.1 billion, topping analyst estimates. Shares rose 0.4%.
Kohls reported a slight improvement in second-quarter earnings,
with per-share results topping estimates. Sales fell 1.3% in the quarter,
missing expectations for a 0.7%
drop. Shares rose 3.2%.
Data showed July retail-sales
growth was flat from the previous
month, part of a trend that has
shown slowing growth at stores and
restaurants since the spring.
European stocks rose despite
data showing the euro-zone economy failed to grow in the second
quarter. German government bonds
jumped to a record high, signaling
that investors expect further stimulus from the European Central Bank.
Stocks initially fell after the data
but later recovered, with the Stoxx
Europe 600 adding 0.3% to 331.04.
RWE shares fell 2.1% after the
German power providers first-half
operating earnings fell more than
40%.
ThyssenKrupp rose 0.4% as the
German steel products maker raised
its 2014 profit outlook after swinging to a profit in the third quarter.
INTERNATIONAL INVESTOR
Tokyo, Sydney Rise,

But Hong Kong Falls
BY CHAO DENG
AND DANIEL INMAN
economic data for July against possibly fresh catalysts from reform.
Meanwhile, the Nikkei Stock Average added 0.7% to 15314.57, overcoming a weaker-than-expected report on retail sales in the worlds
largest economy. However, trading
in Tokyo was thin as many traders
were absent for the Obon midsummer holiday.
With a more accommodating
currency market and a lowered level
of risk-off sentiment, the market
should be more able to trend upward as valuations remain cheap by
most standards, said Okasan Securities director Takashi Matsumoto.
Australias S&P/ASX 200 hit a
nearly two-week high with a gain of
0.6% to 5548.50, as earnings there
magnified a broad-based recovery.
Telstra was up 2.2% in Sydney
after the telecom company said it
would buy back up to 1 billion Australian dollars (US$930 million) of
its own shares and that net profit
for the year through June rose to
A$4.3 billion.
Also in Sydney, gambling company Crown Resorts gained 5.6% after it posted a 66% jump in net
profit for the year through June, as
strong earnings in the gambling hub
of Macau continued to offset weakness at its hotels and casinos in
Australia.
Elsewhere in Asia, South Koreas
Kospi was up less than 0.1% at
2063.22, Singapores Straits Times
Index was down 0.2% at 3294.83
and Indias Sensex rose 0.7% to
26103.23.
Bradford Frischkorn
Asian stocks finished mixed

Thursday, with Japan and Australia
posting gains and the Hong Kong
market declining amid a spate of
earnings news.
Hong Kongs Hang Seng Index
lost 0.4% to 24801.36, as investors
began to take profit from a strong
run that started
ASIAN-PACIFIC in early July. The
STOCKS
index set a fresh
high for the year
on Wednesday, after a string of
weak Chinese economic data that
day, including a fall in credit growth
in July, fueled hopes for further economic stimulus from policy makers.
In Hong Kong, Internet giant
Tencent Holdings led a selloff in
technology stocks, falling 2.3%. The
firm issued guidance for possibly
flat revenue from mobile games in
the second half of the year, even as
it reported a 59% year-over-year
rise in second-quarter profit.
Personal-computer maker Lenovo Group also fell, declining 1.4%
in Hong Kong, despite reporting
solid earnings growth of 23% for the
second quarter, on the back of
stronger personal-computer and
smartphone sales. China Mobile
was up 1.1%, despite a fall in firsthalf profit due to regulatory policies
favoring competition against statecontrolled firms and as the carrier
invested heavily in network upgrades.
The Shanghai Composite Index
was down 0.7% at 2206.47, as investors there weighed disappointing
NAV
GF AT LB DATE CR
FUND NAME
Data as shown is for information purposes only. No offer is being made by

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

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

Concentra AE
Industria AE
InternRent AE
EU EQ DEU 08/13 EUR

EU EQ DEU 08/13 EUR
EU BD DEU 08/13 EUR
86.42
93.34
42.31
-4.6
3.2
8.4
6.5
11.1
3.8
15.1
12.5
-4.0
n CHARTERED ASSET MANAGEMENT PTE LTD - TEL NO: 65-6835-8866

Fax No: 65-6835 8865, Website: www.cam.com.sg, Email: cam@cam.com.sg
CAM-GTF Limited
OT
OT MUS 08/08 USD 355819.56
7.1
6.5
-1.3
American Growth Fund A

American Growth Fund AA
American Growth Fund AA (HKD)
Asia Total Return Fund AA Inc
Asia Value Dividend Equity Fund AA
Asian Equity Fund A
Asian Equity Fund AA
Asian Sm Cap Equity Fund AA
Asian Small Cap Equity Fund AA (HKD)
China Value Fund A
China Value Fund AA
Dragon Growth Fund A
Dragon Growth Fund AA (HKD)
Emg Eastrn Europe Fund A
Emg Eastrn Europe Fund AA
European Growth Fund A
European Growth Fund AA
Global Contrarain Fund AA
Global Property Fund AA
Global Resources Fund AA
Greater China Opportunities Fund AA
Healthcare Fund AA
India Equity Fund AA
International Growth Fund A
International Growth Fund AA
Japanese Growth Fund A
Japanese Growth Fund AA
Latin America Equity Fund AA
Russia Equity Fund AA
Strategic Income Fund AA
Advertisement
JP
EU
EU
EU
EU
EU
EU
EU
BD
BA
BA
BA
BA
BA
BA
BA
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
12/06
12/06
12/06
12/06
12/06
12/06
12/06
12/06
JPY
JPY
USD
EUR
JPY
JPY
USD
EUR
NAV
US EQ LUX 08/13 USD

US EQ LUX 08/13 USD
US EQ LUX 08/13 HKD
AS BD LUX 08/13 USD
OT OT LUX 08/13 USD
OT OT LUX 08/13 USD
OT OT LUX 08/13 USD
OT OT LUX 08/13 USD
OT OT LUX 08/13 HKD
AS EQ LUX 08/13 USD
AS EQ LUX 08/13 USD
AS EQ LUX 08/13 USD
AS EQ LUX 08/13 HKD
EU EQ LUX 08/13 USD
EU EQ LUX 08/13 USD
EU EQ LUX 08/13 USD
EU EQ LUX 08/13 USD
GL EQ LUX 08/13 USD
OT EQ LUX 08/13 USD
GL EQ LUX 08/13 USD
AS EQ LUX 08/13 USD
OT EQ LUX 08/13 USD
EA EQ LUX 08/13 USD
GL EQ LUX 08/13 USD
GL EQ LUX 08/13 USD
JP EQ LUX 08/13 USD
JP EQ LUX 08/13 USD
GL EQ LUX 08/13 USD
EE EQ LUX 08/13 USD
OT OT LUX 08/13 USD
Funds that balance equity/bond investments for Malaysian Ringgit-based investors. The equity
component does not exceed 75% in the normal running of the fund Ranked on % total return (dividends
reinvested) in U.S. dollars for one year ending August 14, 2014
Leading 10 Performers
FUND FUND
RATING * NAME
27.69
1.58
9.90
0.99
1.74
3.35
1.07
2.40
9.72
8.39
2.63
2.02
9.77
4.38
1.88
11.22
0.81
0.94
1.00
1.08
1.03
1.66
1.26
4.53
1.04
3.29
0.84
1.17
0.57
1.13
%RETURN
YTD 12-MO 2-YR
3.2
3.0
NS
5.3
13.0
4.5
4.3
10.7
NS
4.4
4.2
6.3
6.1
-10.7
-10.8
-3.1
-3.2
1.8
11.5
11.2
NS
6.1
26.7
2.4
2.2
0.7
0.5
10.7
-14.5
2.8
14.4
14.1
NS
4.9
16.6
14.6
14.3
15.2
NS
14.2
13.9
18.7
18.4
-5.0
-5.2
7.0
6.7
6.3
13.1
13.2
NS
15.3
36.0
12.4
12.2
1.4
1.1
9.1
-6.5
4.0
18.9
18.6
NS
2.4
19.8
16.3
16.0
26.5
NS
17.2
16.9
21.6
21.3
1.0
0.8
16.6
16.3
5.9
11.5
4.5
NS
21.0
16.3
17.0
16.8
14.2
13.9
2.5
-3.2
2.6
4
3
5
4
2
5
4
2
2
Eastspring
Eastspring
Investments Balanced Investments Berhad
Eastspring
Eastspring
Investments Dynamic Investments Berhad
Hwang
Hwang Investment
Absolute Return II Management Berhad
MAAKL-CM
MAAKL Mutual
Flexi
Berhad
RHB-OSK
RHB Asset
Smart Balanced Management Sdn Bhd
MAAKL-ML
MAAKL Mutual
Flexi
Berhad
MAAKL HW
MAAKL Mutual
Flexi
Berhad
RHB-OSK
RHB Asset
Growth Income Focus Management Sdn Bhd
KAF FIRST
KAF Investment
FUND
Funds Berhad
AMB
Amanah Mutual
Lifestyle Trust Today Berhad
protest. If it wasnt sold by ICBC,

we would not have bought the product, since we never heard of this
trust firm before, he said.
Outstanding trust assets under
management in China stood at 12.48
trillion yuan at the end of June, according to the government-backed
China Trustee Association, more
than quadruple the amount of four
years ago.
A large part of the trust business
in China involves extending loans on
behalf of banks in a way that
NAV
GF AT LB DATE CR
Taiwan Equity Fund AA

Turkey Equity Fund AA
U.S. Bond Fund AA
U.S. Bond Fund AA (HKD) Inc
U.S. Bond Fund AA Inc
U.S. Sm Cap Equity Fund AA
U.S. Special Opportunities Fund AA
U.S. Tsy Inf-ProtSec Fund AA
AS
OT
US
US
US
US
US
OT
EQ
OT
BD
BD
BD
EQ
BD
OT
LUX
LUX
LUX
LUX
LUX
LUX
LUX
LUX
08/13 USD
08/13 USD
08/13 USD
08/13 HKD
08/13 USD
08/13 USD
08/13 USD
08/13 USD
NAV
%RETURN
YTD 12-MO 2-YR
1.59
0.93
1.25
9.98
1.00
1.11
1.03
1.33
7.8
14.3
4.0
NS
NS
-2.9
4.7
5.2
17.0
-4.5
5.2
NS
NS
9.7
8.8
2.8
13.1
1.4
3.1
NS
NS
11.6
12.1
-1.8
n PT CIPTADANA ASSET MANAGEMENT

Tel: +62 21 25574 883 Fax: +62 21 25574 893 Website: www.ciptadana.com
GL
EQ BMU 08/06 USD
175.01
28.4
4.8
n SENSIBLE ASSET MANAGEMENT LIMITED

www.samfund.com.hk Tel: (852) 2868 6848 Fax: (852) 2810 9948
Asia Value Formula Fd-B
OT
OT CYM 05/14 USD
9.39
n THE NATIONAL INVESTOR

TNI Tower | Zayed 1st Street Khalidia| Web:www.tni.ae
TNI MENA Special Sits Fund OT
TNI MENA UCITS Fund
OT
TNI UAE Blue Chip Fund
OT
OT BMU 07/31 USD

OT IRL 08/12 USD
OT ARE 08/13 AED
1190.81
1548.54
12.00
-2.1
-6.1
-7.8
1.0
6.7
19.4
28.7
7.8
26.5
48.4
7.9
23.9
54.9
107.54
88.88
130.36
10.0
-3.4
6.2
14.0
-7.7
5.6
8577.68
9032.12
79.01
121.37
10807.34
11130.39
96.94
102.83
-9.3
4.6
-12.2
-9.0
3.5
17.9
-0.9
-4.6
-8.4
11.0
-11.1
-8.8
5.1
25.6
0.7
-4.1
NAV
GF AT LB DATE CR
NAV
%RETURN
YTD 12-MO 2-YR
2155.22
FUND NAME
NAV
GF AT LB DATE CR
NAV
MYRMYS
14.75 27.07 17.47 15.02
MYRMYS
17.37 24.84 23.41 12.69
MYRMYS
16.10
21.93 17.06 18.76
MYRMYS
15.90
19.85 18.84 16.44
MYRMYS
15.54 16.64 12.77
9.33
MYRMYS
9.24
16.59 13.52 20.22
MYRMYS
15.25
16.53 17.22 14.94
MYRMYS
11.33 13.08
9.12 11.43
MYRMYS
6.02
5.17
12.65
7.71
Source: Morningstar, Ltd

1 Olivers Yard, 55-71 City Road
London EC1Y 1HQ United Kingdom
www.morningstar.co.uk; Email: mediaservice@morningstar.com
Phone: +44 (0)203 107 0038; Fax: +44 (0)203 107 0001
doesnt appear on their balance

sheets. Such opacity has led to uncertainty over the extent of the
banking systems exposure to trust
products.
In recent months, several defaults and near-defaults in the financial sector have sent jitters
through the market.
In March, a Shanghai-based solar-equipment maker failed to meet
interest payments on a bond, making it the countrys first corporatebond default.
Grace Zhu
NAV
GF AT LB DATE CR
FUND NAME
NAV
%RETURN
YTD 12-MO 2-YR
n WEBSITE: WWW.VALUEPARTNERS.COM.HK, TEL: (852) 2880 9263, FAX: (852) 2564 8487
*formerly known as China ABH Shares Fund
Intel-Chin Mainlnd Foc
Intel-China Converg*
VP Classic - A
VP CLassic - B
VP High Dividend Stk
AS
AS
AS
AS
OT
EQ
EQ
EQ
EQ
OT
CYM
CYM
CYM
CYM
CYM
08/13
08/13
08/13
08/13
08/13
USD
USD
USD
USD
USD
37.43
134.87
249.21
113.50
75.74
1.9
5.3
6.0
5.6
11.0
10.3
13.7
17.2
16.6
14.3
13.5
15.5
17.9
17.3
16.0
LIST YOUR
FUNDS
%RETURN
YTD 12-MO 2-YR
NS
NS
n SUPERFUND
For info about open funds, contact info@superfund.com and www.superfund.com
*Closed for New Investments
n PLATINUM CAPITAL MANAGEMENT
Tel: +44 207 024 9840, www.platinumfunds.net
Platinm-All Star
Platinm-All Weather
Platinm-Dynasty
Platinm-Emancipation
Platinm-Equity Plus
Platinm-Gbl Dividend
Platinm-Nordic
Platinm-Premier
Platinm-Turnberry
18.59 29.76 16.63 15.90
In print & online. Contact:

NS
NS
-7.9
10.2
0.3
13.2
-1.0
8.1
11.3
23.9
8.4
6.9
% Return in $US **
1-YR 2-YR 5-YR
YTD
MYRMYS
NOTE: Changes in currency rates will affect performance and rankings.

KEY: ** 2YR and 5YR performance is annualized
NA-not available due to incomplete data;
NS-fund not in existence for entire period
FUND NAME
Indonesian Grth Fund
LEGAL
CURR. BASE
FUND MGM'T CO.
[ALTERNATIVE INVESTMENT FUNDS www.WSJ.com] Advertisement
AlexandraConvertibleBondFundI,Ltd.(ClassA) OT OT VGB 08/31 USD
n HSBC Trinkaus Investment Managers SA

E-Mail: funds@hsbctrinkaus.lu
Telephone: 352 - 47 18471
Prosperity Return Fund A
Prosperity Return Fund B
Prosperity Return Fund C
Prosperity Return Fund D
Renaissance Hgh Grade Bd A
Renaissance Hgh Grade Bd B
Renaissance Hgh Grade Bd C
Renaissance Hgh Grade Bd D
MYR Allocation
n ALEXANDRA INVESTMENT MANAGEMENT

Tel: +1 212 301 1800 Fax: +1 212 301 1810
n CREDIT PACIFIC ASSET MANAGMENT

www.creditpacific.com
OT WSM 08/14 USD
OT CYM 08/12 USD
OT WSM 08/14 USD
Fund Scorecard

Huitong Credit & Guaranty Co.,
which said in a statement on July 15
that its chairman and other executives hadnt been seen for more
than a week. Phones rang unanswered at both the company and local government offices on Thursday.
I learned from local press that
the executives [of Huitong] have run
away and then I knew my investment was in danger, Mr. Gao said.
Besides small loan companies,
Huitong also guaranteed loans to
small firms made by trust companies and banks. It isnt clear
whether those investments are at
risk.
The role of banks in the sale of
trust-company instruments is at the
heart of the ICBC protests. The
product that sparked the protests
was issued by China Credit Trust
Co. and attracted a total of 1.3 billion yuan from investors. It had required a minimum investment of at
least three million yuan and promised around a 10% annualized return.
The trust company said in July
that it would pay back investors
over the coming 15 months, after
selling its collateral, including several coal mines. The original repayment date had been in late July.
ICBC managers told us the
product was safe and both the principal and interests are guaranteed,
said Zhang Liang, an investor in
Guangzhou who attended Mondays
n MANULIFE GLOBAL FUND TEL:(852)2108 1110

Internet:http://www.manulifefunds.com.hk
FUND NAME
CP Global Alpha Fund

OT
CP Multi-Strategy Currency Fund OT
CPS-Master Priv Fund
GL
Protests Put
Spotlight
On Shadow
Lending
OT
OT
OT
OT
OT
GL
OT
OT
OT
OT
OT
OT
EQ
OT
EQ
OT
OT
BD
CYM
USA
CYM
CYM
USA
CYM
CYM
CYM
USA
06/30
10/31
06/30
05/31
05/29
06/30
10/31
12/31
02/28
USD
USD
USD
USD
USD
USD
SEK
USD
USD
113.34
129.92
91.02
105.47
35.02
66.50
NS
NS
60.14
2.2
2.4
-6.3
0.2
-18.2
-2.2
2.6
-55.9
-1.2
7.0
3.2
-1.5
-8.5
-63.7
7.6
4.7
-66.0
-3.0
8.4
3.8
-3.4
5.7
-45.6
5.8
1.2
-44.3
NS
Superfund Cayman*
Superfund GCT USD*
Superfund Green Gold A (SPC)
Superfund Green Gold B (SPC)
Superfund Q-AG*
GL
GL
GL
GL
GL
OT
OT
OT
OT
OT
CYM
LUX
CYM
CYM
AUT
08/12
08/12
08/12
08/12
08/12
USD
USD
USD
USD
EUR
36.99
1615.65
846.57
740.12
5809.00
n WINTON CAPITAL MANAGEMENT LTD

Tel: +44 (0)20 7610 5350 Fax: +44 (0)20 7610 5301
Winton Evolution EUR Cls H
Winton Evolution GBP Cls G
Winton Evolution USD Cls F
Winton Futures EUR Cls C
Winton Futures GBP Cls D
Winton Futures JPY Cls E
Winton Futures USD Cls B
GL
GL
GL
GL
GL
GL
GL
OT
OT
OT
OT
OT
OT
OT
CYM
CYM
CYM
VGB
VGB
VGB
VGB
07/31
07/31
07/31
07/31
07/31
07/31
07/31
For information about listing your funds, please email wsja.advertising@dowjones.com or call +852 2573-7121
EUR 1146.06
GBP 1161.60
USD 1461.46
EUR
247.99
GBP
270.33
JPY 17346.38
USD
885.47
-3.6
-4.8
3.3
2.2
-4.4
-1.9
-5.6
-4.1
-4.9
-4.8
-0.9
-4.5
-14.3
-14.8
-4.0
-2.6
-2.5
-2.5
-1.5
-1.3
-1.5
-1.4
4.4
4.7
4.6
3.7
4.0
3.8
3.9
1.3
1.7
1.6
1.6
2.0
2.0
2.0
wsja.advertising@dowjones.com
BLUE CHIPS & BONDS
Major players &

benchmarks
Dow Jones Asia Titans: Thursday's best and worst...

Volume
in millions
Company
Country
Industry
Hon Hai Precision Industry
Taiwan
Electrical Components Equipment $38.76
Previous
close, in
local currency
STOCK PERFORMANCE
Previous session
109.00
52-week
YTD
177.7%
36.1%
2.83%
At right, a look at the Asia Titans, the biggest and best known
companies in Asia. Below, some of the Dow Jones Titans indexes
of biggest and most liquid stocks in individual countries and regions
Nippon Telegraph Telephone
Japan
Fixed Line Telecommunications
1.67
6,771
2.03
32.2
19.6
Reliance Industries GDR
United KingdomExploration Production
0.09
33.09
1.94
16.3
13.9
Seven I Holdings
Japan
Broadline Retailers
1.40
4,380
1.88
21.0
4.8
Giants around the world
Tokio Marine Holdings
Japan
Property Casualty Insurance
2.16
3,225
2.5
-8.3
Tencent Holdings
Hong Kong
Internet
$43.48
130.10
76.6
31.7
PetroChina
Hong Kong
Integrated Oil Gas
77.71
10.68
-1.66
15.1
25.8
China Life Insurance
Hong Kong
Life Insurance
34.00
23.00
-1.50
16.3
-5.2
0.46
230,000
-1.50
-1.3
-2.7
175.42
5.88
-1.0
0.5
1.59
Dow Jones Country Titans

Previous session
Turkey
-0.18%
South Africa
-0.85
Canada
0.32
Hong Kong
0.26
INDEX PERFORMANCE
Year-to-date
52-week
16.6%
5.3%
13.2
24.1
12.1
21.4
7.3
12.3
6.8
21.2
Spain
-0.20
Australia
-0.07
5.3
11.6
Brazil
0.48
4.3
7.3
Singapore
-0.17
4.0
1.4
Italy
-0.42
3.2
11.9
0.42
2.3
3.3
Switzerland
Sweden
-0.81
1.3
6.3
South Korea
-0.10
0.7
10.0
China 88
-0.84
0.3
-1.2
U.K.
0.40
-1.1%
0.9
France
0.20
-2.0
2.2
Netherlands
0.02
-5.3
-0.6
Japan
0.64
-5.6
6.6
Germany
0.27
-6.0
6.3
Hyundai Motor
Korea
Automobiles
China Construction Bank
Hong Kong
Banks
Arab 50
17.1%
0.48%
10.5
24.0
Real Estate
-0.09
10.3
12.0
Health Care
0.69
8.5
17.3
Utilities
0.50
7.9
10.6
Tiger 50*
0.03
7.1
13.7
Oil & Gas
0.04
6.9
16.6
Travel & Leisure
0.38
Global 50
0.13
Asian 50
0.32
4.1
17.6
3.4
11.6
1.7
Volume
in millions
Company/Country (Industry)
Shin-Etsu Chemical
0.65
Japan (Specialty Chemicals)
Itochu
4.60
Japan (Industrial Suppliers)
Taiwan Semiconductor Manufacturing 32.96
Taiwan (Semiconductors)
NTT DoCoMo
4.19
Japan (Mobile Telecommunications)
SoftBank
8.25
China Mobile
35.87
Hong Kong (Mobile Telecommunications)
POSCO
0.16
Korea (Iron Steel)
KDDI
1.24
Takeda Pharmaceutical
1.30
Japan (Pharmaceuticals)
Wesfarmers
2.00
Australia (Home Improvement Retailers)
Fanuc
0.41
Japan (Industrial Machinery)
Nippon Steel Sumitomo Metal
32.78
Japan (Iron Steel)
Mitsubishi
3.06
National Australia Bank
5.32
Australia (Banks)
Canon
2.52
Japan (Electronic Office Equipment)
Sumitomo Mitsui Financial Group
4.39
Japan (Banks)
CNOOC
97.94
Hong Kong (Exploration Production)
Westpac Banking
6.92
Australia (Banks)
Japan Tobacco Inc
1.88
Japan (Tobacco)
AIA Group
17.18
Hong Kong (Life Insurance)
23.9%
-0.20
-1.18
...And the rest of Asia's blue chips
Dow Jones Regional Sector Titans
Technology
-2.33%
5.6
*Asia excluding Japan

Source: SIX Financial Information
Latest,
in local
currency
STOCK PERFORMANCE
Latest 52-week
YTD
Company/Country (Industry)
6,381
1.30%
2.3%
3.9%
1,314
1.27
9.5
1.1
124.00
1.22
29.2
17.5
1,808
1.20
17.0
4.8
7,056
1.18
13.1
-23.3
88.30
1.09
5.1
10.0
333,000
1.06
-0.6
2.0
5,987
1.03
17.4
-7.5
4,660
0.93
0.3
-3.4
43.50
0.93
4.1
-1.2
17,630
0.89
16.8
-8.4
307.80
0.85
1.3
-12.6
2,148
0.85
11.9
6.5
34.60
0.82
9.9
-0.7
3,399
0.79
9.1
2.1
4,116
0.76
-9.3
-24.1
14.64
0.69
-0.3
1.5
33.95
0.68
7.4
4.8
3,521
0.66
1.6
2.9
43.40
0.58
20.9
11.6
Volume
in millions
Komatsu
2.54
Japan (Commercial Vehicles Trucks)
Woolworths
2.30
Australia (Food Retailers Wholesalers)
Hitachi
13.11
Japan (Electronic Equipment)
Mizuho Financial Group
68.69
Japan (Banks)
East Japan Railway
0.53
Japan (Travel Tourism)
Nomura Holdings
9.76
Japan (Investment Services)
Mitsui Co.
5.54
Mitsubishi UFJ Financial Group
26.67
Japan (Banks)
Toyota Motor
4.31
Japan (Automobiles)
Commonwealth Bk Australia
3.65
Australia (Banks)
Nissan Motor
8.17
Japan (Automobiles)
Australia New Zeald Bkg
4.95
Australia (Banks)
Woodside Petroleum
1.83
Australia (Exploration Production)
BHP Billiton
6.39
Australia (General Mining)
Samsung Electronics
0.21
Korea (Semiconductors)
Bank of China
303.79
Hong Kong (Banks)
Industrial Commercial Bank of China 174.08
Hong Kong (Banks)
Honda Motor
4.49
Japan (Automobiles)
Sun Hung Kai Properties
3.05
Hong Kong (Real Estate Holding Development)
Rio Tinto
2.57
Australia (General Mining)
Latest,
in local
currency
STOCK PERFORMANCE
Latest 52-week
YTD
2,334
0.50%
2.6%
9.2%
36.10
0.47
8.5
6.6
778.70
0.45
24.8
-2.2
196.40
0.36
-5.6
-13.9
8,291
0.35
5.8
-1.1
645.20
0.34
-11.0
-20.2
1,707
0.26
20.6
16.5
593.10
0.19
-2.0
-14.5
6,009
0.17
-4.8
-6.4
81.02
0.07
9.8
4.1
999.60
0.05
-3.8
13.1
32.74
...
7.8
1.6
42.07
...
9.8
8.1
38.16
-0.21
2.2
0.4
1,261,000
-0.24
-3.0
-8.1
3.69
-0.54
10.5
3.4
5.25
-0.57
-0.8
0.2
3,469
-0.62
-9.0
-19.9
116.80
-0.76
19.9
28.6
65.05
-1.03
5.9
-4.6
Sources: SIX Financial Information; WSJ Market Data Group
Credit derivatives
Credit-default swaps: Asian companies
Spreads on credit derivatives are one way the market rates

creditworthiness. Regions that are treading in rough waters
can see spreads swing toward the maximumand vice versa.
Indexes below are for five-year swaps.
At its most basic, the pricing of credit-default swaps measures how much a buyer has to pay to purchase-and
how much a seller demands to sell-protection from default on an issuer's debt. The snapshot below gives a
sense which way the market was moving yesterday.
Markit iTraxx Indexes
Showing the biggest improvement...
Index: series/version
Mid-spread,
in pct. pts.
Mid-price
Europe: 21/1
Eur. High Volatility: 20/1
Europe Crossover: 21/1
Asia ex-Japan IG: 21/1
Japan: 21/1
0.65
101.66%
Coupon
0.01%
SPREAD RANGE, in pct. pts.

since most recent roll
Maximum Minimum
Average
CHANGE, in basis points
0.81
0.56
0.66
0.77
100.98
0.01
1.11
0.68
0.86
Samsung Electrs
40
...
Kirin Hldgs
23
2.69
110.11
0.05
3.11
2.19
2.62
SK Innovation
77
Sumitomo Rlty Dev
52
1.05
99.76
0.01
1.13
0.99
1.04
Expt Import Bk Korea
60
...
Mitsubishi Matls
96
0.69
101.50
0.01
0.72
0.63
0.66
Sun Hung Kai Pptys
115
Canon
19
...
Korea Dev Bk
61
...
Nippon Telegraph Tel
20
...
...
Hana Bank
72
...
Komatsu
24
...
...
...
...
Note: Data as of August 13
In percentage points
Spreads
Spreads on
ve-year swaps
for corporate
debt; based on
Markit iTraxx
indexes.
3.00
Index roll
2.00
Australia
t
1.00
NOTICE TO READERS
All statistics published in
Asia from markets outside
the Asian-Pacific region
reflect preliminary data.
And the most deterioration
CHANGE, in basis points
Japan
1
Mar. April May June July Aug.
2014
Source: Markit Group
WSJ.com>>
Follow the markets throughout the day, with updated

stock quotes, news and commentary at WSJ.com/Email.
Also, receive emails that summarize the days trading in
Europe and Asia. To sign up, go to WSJ.com.
Yesterday Yesterday Five-day 28-day
Yesterday Yesterday Five-day 28-day
CNOOC
81
Bridgestone
21
...
...
Lg Electrs
84
Mitsubishi Heavy Inds
28
...
GS Caltex Oil
73
ANA HLDGS
103
Nankai Elec Rwy
52
79
Daiwa Secs Gp
Source: Markit Group
Behind Asias deals: Bank revenues from equity capital markets

Behind every IPO,
follow-on or
convertible equity
offering is one or
more investment
banks. At right,
investment banks
historical and
year-to-date
revenues from global
equity-capital-market
(ECM) deals
n Equity capital markets n Debt capital markets (both in billions, left axis)
3
75%
t
Tracking
credit
markets &
dealmakers
ECM as a percentage of total
50
(right axis)
25
0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Source: Dealogic
GLOBAL MARKETS LINEUP

Commodities
Currencies
Prices of futures contracts with the most open interest
EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; NYBOT: New York Board of Trade; MDEX: Bursa Malaysia
Derivatives Berhad; LIFFE: London International Financial Futures Exchange; LME: London Mercantile Exchange; NYMEX: New York Mercantile Exchange;
ICE: IntercontinentalExchange *Data as of August 13, 2014
Year
ONE-DAY CHANGE
Commodity
Exchange
Last price
Net
Percentage
high
CBOT
Corn (cents/bu.)
Soybeans (cents/bu.)
Wheat (cents/bu.)
Live cattle (cents/lb.)
Cocoa ($/ton)
Coffee (cents/lb.)
Sugar (cents/lb.)
Cotton (cents/lb.)
Rapeseed (euro/ton)
Cocoa (pounds/ton)
Robusta coffee ($/ton)
CBOT
CBOT
CME
ICE-US
ICE-US
ICE-US
ICE-US
LIFFE
LIFFE
LIFFE
Copper ($/lb.)
Gold ($/troy oz.)
Silver ($/troy oz.)
Aluminum ($/ton)*
Tin ($/ton)*
Copper ($/ton)*
Lead ($/ton)*
Zinc ($/ton)*
Nickel ($/ton)*
COMEX
Crude oil ($/bbl.)

Heating oil ($/gal.)
RBOB gasoline ($/gal.)
Natural gas ($/mmBtu)
Brent crude ($/bbl.)
Gas oil ($/ton)
NYMEX
COMEX
COMEX
LME
LME
LME
LME
LME
LME
371.75
1054.00
550.25
146.475
3,225
186.70
15.88
65.00
322.25
2,030
1,946
2.00
7.25
4.75
-0.075
-6
-2.90
-0.14
0.28
0.50
6
-19
3.1085
1313.30
19.865
2,044.00
22,525.00
6,917.00
2,242.50
2,305.00
18,700
-0.0240
-1.20
0.020
-7.00
unch.
-93.50
-29.50
-33.50
-255
94.77
2.8316
2.5625
3.941
102.52
864.75
-1.97
-0.0703
-0.0641
0.079
-2.54
-10.25
NYMEX
NYMEX
NYMEX
ICE-EU
ICE-EU
517.00
1,279.25
765.00
160.750
3,248
222.60
18.91
84.74
386
2,031
2,216
0.54%
0.69
0.87
-0.05%
-0.19
-1.53
-0.87
0.43
0.16
0.30
-0.97
Year
low
358.00
1,038.75
542.25
130.900
2,639
119.90
15.72
62.02
301
1,651
1,568
0.10
-0.34
unch.
-1.33
-1.30
-1.43
-1.35
105.55
3.0848
2.8999
4.8790
114.44
949.25
-2.04
-2.42
-2.44
2.05
-2.42
-1.17
In euros
Argentina peso-a
In
U.S. dollars
11.0705
0.0903
8.2766
0.1208
3.0375
0.3292
2.2709
0.4404
Canada dollar
1.4595
0.6852
1.0911
0.9165
Chile peso
772.31
0.001295
577.40
0.001732
2507.47 0.0003988
EUROPE
1874.65 0.0005334
PERFORMANCE
Percentage change
Yr.-to-date
PREVIOUS SESSION
Index
Close
ASIA-PACIFIC
DJ Asia-Pacific TSM
1527.09
Australia
SPX/ASX 200
5548.50
33.80
China
Shanghai Composite
2206.47
-16.41
Hong Kong
Hang Seng
24801.36
-88.98
India
S&P BSE Sensex
26103.23
184.28
Indonesia
Jakarta Composite
5155.55
-12.72
0.7476
1.3376
0.9999
1.0001
0.7475
1.3378
3-mos. forward
0.9996
1.0004
0.7473
1.3381
6-mos. forward
0.9991
1.0009
0.7470
1.3387
Czech Rep. koruna-b
27.821
0.0359
20.799
0.0481
Denmark krone
7.4552
0.1341
5.5737
0.1794
Hungary forint
312.29
0.003202
233.47
0.004283
Norway krone
8.2273
0.1215
6.1509
0.1626
Poland zloty
4.1796
0.2393
3.1248
0.3200
Russia ruble-d
48.049
0.02081
35.923
0.02784
Sweden krona
9.1673
0.1091
6.8537
0.1459
Switzerland franc
1.2114
0.8255
0.9057
1.1042
1.2111
0.8257
0.9055
1.1044
1.1049
0.7476
17.4861
0.0572
13.0730
0.0765
Peru sol
3.7319
0.2680
2.7901
0.3584
Uruguay peso-e
31.592
0.0317
23.619
0.0423
U.S. dollar
1.3376
0.7476
8.49
0.117736
6.35
0.157480
1.4354
0.6967
1.0731
0.9319
1-mo. forward
1-mo. forward
1.4385
0.6952
1.0755
0.9298
3-mos. forward
1.2106
0.8261
0.9050
3-mos. forward
1.4446
0.6922
1.0800
0.9259
6-mos. forward
1.2095
0.8268
0.9042
1.1059
6-mos. forward
1.4537
0.6879
1.0868
0.9201
Turkey lira
2.8766
0.3476
2.1506
0.4650
U.K. pound
ASIA-PACIFIC
Australia dollar
China yuan
0.8013
1.2480
0.5990
1.6693
0.8015
1.2477
0.5992
1.6689
3-mos. forward
0.8019
1.2470
0.5995
1.6680
6-mos. forward
0.8027
1.2458
0.6001
1.6663
MIDDLE EAST/AFRICA
Bahrain dinar
0.5044
1.9826
0.3771
2.6518
Egypt pound-a
0.1045
7.1529
0.1398
0.2880
8.2336
0.1215
6.1556
0.1625
Hong Kong dollar
10.3672
0.0965
7.7508
0.1290
1-mo. forward
India rupee
81.4714
0.0123
60.9100
0.0164
11707 0.0000854
Indonesia rupiah
15659 0.0000639
Japan yen
137.04
0.007297
102.46
0.009760
1-mo. forward
137.02
0.007298
102.44
0.009762
3-mos. forward
136.96
0.007302
102.39
0.009766
6-mos. forward
136.83
0.007308
102.30
0.009775
Malaysia ringgit-c
4.2518
0.2352
3.1788
0.3146
New Zealand dollar
1.5752
0.6348
1.1777
0.8491
Pakistan rupee
132.527
0.0075
99.080
0.0101
Philippines peso
58.457
0.0171
43.704
0.0229
Singapore dollar
1.6656
0.6004
1.2452
0.8031
South Korea won
1365.92
0.0007321
Taiwan dollar
40.084
0.02495
29.968
0.03337
Thailand baht
42.604
0.02347
31.852
0.03140
4.6446
0.2153
3.4725
Jordan dinar
0.9463
1.0568
0.7075
1.4135
Kuwait dinar
0.3791
2.6377
0.2834
3.5281
Lebanon pound
0.1994
3.7502
0.2667
South Africa rand
14.1007
0.0709
10.5420
0.0949
4.9129
0.2035
3.6730
0.2723
United Arab dirham
1021.20 0.0009792
a-floating rate b-commercial rate c-government rate c-commercial rate d-Russian Central Bank rate.
Source: ICAP Plc.
Net change
6.48
0.43%
0.61
-0.74%
-0.36
0.71
-0.25
5.4%
52-wk.
10.3%
3.7
7.7
4.3
6.0
Close
PREVIOUS SESSION
Region/Country
Index
Net change
Euro Zone
Euro Stoxx
308.20
Euro Stoxx 50
3058.16
1.99
Denmark
OMX Copenhagen
655.25
-1.33
7403.12
6.36
CAC-40
4205.43
10.64
0.25
-2.1
2.2
20.6
10.0
Germany
DAX
9225.10
26.22
0.29
-3.4
9.3
2.7
11.6
Italy
FTSE MIB
19480.96
-56.30
Netherlands
AEX
395.84
0.57
Malaysia
Kuala Lumpur Composite
1861.58
3.54
0.19
-0.3
3.9
Russia
RTSI
1231.94
11.14
New Zealand
NZSX-50
5062.41
7.71
0.15
6.9
11.7
Spain
IBEX 35
10294.8
-9.20
20.7
Switzerland
SMI
8430.10
41.39
7.3
Turkey
BIST 100
77569.92
-48.64
2.3
U.K.
FTSE 100
6685.26
28.58
2.6
7.2
AMERICAS
DJ Americas
492.46
1.51
7.2
17.0
Brazil
Bovespa
55687.48
106.29
18.7
6.1
Argentina
Merval
8422.80
Mexico
IPC
-6.58
12.8
19.9
4.0
-0.20
South Korea
Kospi
2063.22
0.86
Taiwan
Weighted
9230.61
-0.70
Thailand
SET
1541.97
-2.58
EUROPE
Stoxx Europe 600
331.04
1.02
0.31
0.8
7.3
Stoxx Europe 50
2943.43
9.74
0.33
0.8
6.6
S&P Dow Jones Indices
Price-toDividend earnings
yield*
ratio* S&P Dow Jones Index
2.40% 19.34
2.82 19.55
2.94 15.08
2.37 15.65
2.30 15.93
3.24 20.67
2.78 14.95
3.09 11.59
3.34 10.32
2.80 11.53
3.13 10.44
2.03 12.69
Last
Global TSM
Global DOW
Global Titans 50
Asia/Pacific TSM
S&P BMI Asia Pac Emg Mkts
Dev Europe TSM
S&P BMI Emg Markets
Asian Titans 50
BRIC 50
S&P BMI China
China Offshore 50
Shanghai -c
Net
change
3349.58
8.69
2569.52
4.60
240.91
0.25
1527.34
6.73
181.78
1.09
3333.94 10.90
275.52
0.42
154.78
0.54
547.56
0.47
473.82 -3.63
4505.41 -31.52
291.88 -2.36
0.04
-0.01
-0.17
PERFORMANCE
YearThree-yr.,
to-date
52-wk. annualized
Daily
0.26%
0.18
0.10
0.44
0.60
0.33
0.15
0.35
0.09
-0.76
-0.69
-0.80
3.6%
3.4
3.4
5.4
3.0
-1.6
8.2
1.7
9.1
5.3
7.5
5.3
13.7%
14.2
12.9
10.8
8.4
10.4
12.1
6.1
15.6
14.0
15.1
8.0
12.1%
11.4
13.0
6.6
7.3
10.0
2.6
7.8
0.4
6.3
6.4
-4.0
yield*
ratio* S&P Dow Jones Index
1.13%23.85
1.91 20.64
5.15 16.79
5.20 16.43
2.12 19.72
2.40 17.80
2.62 11.30
3.67 25.19
U.S.
Australia
Britain
Canada
China
Euro
Hong Kong
India
Indonesia
Japan
New Zealand
South Korea
Malaysia
Philippines
Singapore
Switzerland
Taiwan
Thailand
US$
0.932
1.669
0.916
0.1625
1.338
0.129
0.0164
0.0001
0.010
0.849
0.0010
0.315
0.023
0.803
1.104
0.033
0.031
1.791
0.983
0.174
1.435
0.138
0.0176
0.0001
0.010
0.911
0.0011
0.338
0.025
0.862
1.185
0.036
0.034
0.599
0.558
0.549
0.097
0.801
0.077
0.0098
0.0001
0.006
0.509
0.0006
0.188
0.014
0.481
0.661
0.020
0.019
C$
1.091
1.017
1.821
0.177
1.459
0.141
0.0179
0.0001
0.011
0.927
0.0011
0.343
0.025
0.876
1.205
0.036
0.034
YUAN
6.156
5.736
10.276
5.641
8.234
0.794
0.1011
0.0005
0.060
5.227
0.0060
1.936
0.141
4.943
6.797
0.205
0.193
EURO
0.748
0.697
1.248
0.685
0.121
0.096
0.0123
0.0001
0.007
0.635
0.0007
0.235
0.017
0.600
0.826
0.025
0.023
HK$
7.751
7.223
12.938
7.103
1.259
10.367
0.1272
0.0007
0.076
6.581
0.0076
2.438
0.177
6.224
8.558
0.259
0.243
RUPEE
60.910
56.760
101.678
55.822
9.895
81.471
7.859
0.0052
0.594
51.721
0.0596
19.162
1.394
48.915
67.255
2.033
1.912
RUPIAH
11707.25
10909.60
19543.06
10729.40
1901.89
15659.28
1510.46
192.21
114.26
9941.04
11.46
3682.97
267.88
9401.70
12926.82
390.66
367.56
YEN
102.458
95.477
171.034
93.900
16.645
137.045
13.219
1.6821
0.0088
Last
Net
change
Shenzhen -c
354.73 -2.72
U.S. TSM
20348.73 18.49
Global Select Div
260.36 1.35
Asia/Pacific Select Div 358.36 1.74
Hong Kong Select Div -c 206.21 -0.55
U.S. Select Dividend -d 1317.78 3.09
Islamic Market
2875.87 5.60
Islamic Market 100
3162.27 4.47
Islamic China/HK Titans 30 1858.97 -8.33
Sustainability Korea -c 1534.07 0.48
Brookfield Infrastructure 3619.06 18.55
DJ Commodity
669.19 -1.10
87.001
0.1003
32.232
2.344
82.280
113.131
3.419
3.217
NZ$
1.178
1.097
1.966
1.079
0.191
1.575
0.152
0.0193
0.0001
0.011
0.0012
0.370
0.027
0.946
1.300
0.039
0.037
WON
1021.20
951.62
1704.69
935.90
165.90
1365.92
131.75
16.77
0.09
9.97
867.13
321.26
23.37
820.09
1127.58
34.08
32.06
-0.29
0.14
0.91
-0.09
0.49
-0.06
0.43
0.31
11.73
-1.5
4.3
-14.6
-9.2
3.8
17.1
2.8
4.4
14.4
2.6
-0.9
1.5
5.8
15.2
8.1
9.4
56.2
116.9
4.7
5.4
0.19
-102.69 -1.20
44735.69
Daily
-0.76%
0.09
0.52
0.49
-0.27
0.23
0.20
0.14
-0.45
0.03
0.52
-0.16
PERFORMANCE
YearThree-yr.,
to-date
52-wk. annualized
8.3%
4.8
4.1
7.2
3.2
6.5
4.9
5.2
10.6
4.2
13.7
-3.3
11.3%
17.0
14.2
7.9
-1.5
16.5
15.6
17.0
13.7
9.1
21.9
-5.9
-3.8%
18.4
8.5
7.3
3.1
20.2
11.7
14.3
8.2
3.1
16.1
-5.3
Source: S&P Dow Jones Indices
U.S.-dollar and euro foreign-exchange rates in global trading

A$
1.073
0.09
0.03
European and Americas index data are as of 12:00 p.m. ET. Sources: SIX Financial Information; WSJ Market Data Group
*Fundamentals are based on data in U.S. dollar. Footnotes: c-in local currency. d-dividends reinvested. p-previous day. Note: All data as of 11:30 a.m. ET.
Cross rates
15.2
OMX Helsinki
France
11.4
3294.83
0.9
Finland
10.3
1.07
7.2
26.2
10.0
-2.4
74.76
-1.6
15.8
34.8
-6.0
7061.00
0.07
-0.20%
52-wk.
6.6%
6.4
0.66
Closed
-1.9%
0.19%
23.3
0.66
28505.55
PERFORMANCE
Percentage change
Yr.-to-date
0.58
8.37
Straits Times
1507.30 0.0006634
5.0162
100.94
Singapore
2016.12 0.0004960
Saudi Arabia riyal
1270.50
PSEi
9.5674
Israel shekel
15314.57
Philippines
In
U.S. dollars
1-mo. forward
Nikkei Stock Average
KSE 100
Per
U.S. dollar
Euro zone euro
Topix
Pakistan
In euros
Stock indexes from around the world, grouped by region. Shown in local-currency terms.
Region/Country
Japan
Per euro
1.3376
Venezuela bolivar
WSJ.com>>
Per
U.S. dollar
Brazil real
Mexico peso-a
Sources: SIX Financial Information; WSJ Market Data Group
Major stock market indexes
Per euro
Ecuador US dollar-f
88.34
2.8220
2.5210
3.7400
102.36
864.25
Follow the markets throughout the day with updated stock quotes, news and commentary at at
WSJ.com. Also, receive email alerts that summarize the days trading in Europe and Asia. To sign
up, go to WSJ.com/Email
AMERICAS
Colombia peso
3.3570
2.8845
1,390.80 1,207.00
22.160
18.650
2,051.00 1,686.50
23,770.00 21,410.00
7,422.00 6,430.00
2,287.00 2,033.00
2,410.00 1,948.00
21,100
13,425
-0.77
-0.09
London close on Aug. 14
RINGGIT PH. PESO

3.179
43.704
2.962
40.726
5.306
72.955
2.913
40.053
0.516
7.100
4.252
58.457
0.410
5.639
0.0522
0.7175
0.0003
0.0037
0.031
0.427
2.699
37.110
0.0031
0.0428
13.749
0.073
2.553
35.097
3.510
48.256
0.106
1.458
0.100
1.372
S$ S FRANC
1.245
0.906
1.160
0.844
2.079
1.512
1.141
0.830
0.202
0.147
1.666
1.211
0.161
0.117
0.0204
0.0149
0.0001
0.0001
0.012
0.009
1.057
0.769
0.0012
0.0009
0.392
0.285
0.028
0.021
0.727
1.375
0.042
0.030
0.039
0.028
TW$
29.968
27.926
50.025
27.464
4.868
40.084
3.866
0.4920
0.0026
0.292
25.446
0.0293
9.427
0.686
24.066
33.089
BAHT
31.852
29.681
53.170
29.191
5.174
42.604
4.109
0.5229
0.0027
0.311
27.046
0.0312
10.020
0.729
25.579
35.170
1.063
0.941
Source: ICAP Plc.
MSCI indexes
Developed and emerging-market regional and country indexes
from MSCI as of August. 14, 2014
yield
ratio MSCI Index
LOCAL-CURRENCY
Last
PERFORMANCE
Daily
YTD
52-wk.
3.3%
13.3%
2.50% 17
MSCI ACWI*
2.50
18
World (Developed Markets) 1,708.74
-0.55
2.9
13.3
1.90
23
World Small Cap
323.83
-0.57
1.5
13.7
2.50
18
Kokusai (World ex-Japan)
1,724.42
-0.58
3.3
14.0
3.10
16
EAFE
1,897.75
-0.42
-0.9
10.0
1,070.87 -0.60
6.8
13.0
422.04 -0.56%
2.70
13
Emerging Markets (EM)
2.90
14
AC ASIA PACIFIC EX-JAPAN 506.43
-0.59
8.2
15.1
2.50
13
AC Far East ex-Japan
565.14
-0.79
7.3
14.5
1.90
15
Japan
772.35
0.35
-4.1
10.3
3.20
10
China
67.03
1.00
6.2
18.2
2.40
12
China A (China Domestic)
2,358.54
-0.01
2.5
9.7
2.60
16
Hong Kong
14,447.67
0.57
8.1
15.5
1.40
19
India
982.76
0.44
20.3
31.0
1.00
10
Korea
592.58
1.00
0.5
8.9
2.90
16
Malaysia
656.07
0.36
-1.6
2.8
3.20
14
Singapore
1,755.07
-0.01
3.3
2.4
2.90
17
Taiwan
334.88
0.80
10.6
16.5
6.8
3.10
15
Thailand
541.45
2.42
17.6
4.30
17
Australia
1,128.79
-0.24
3.2
9.2
4.30
22
New Zealand
109.10 -0.06
3.9
7.0
1.90
19
US BROAD MARKET
4.8
15.4
3.30
17
EUROPE
0.6
9.9
2,207.46 -0.70
112.82
*Twenty-four developed and 21 emerging markets
0.38
Source: MSCI
SCANNING THE GLOBE

P/E: 16
Dow Jones Industrial Average
s 43.60, or 0.26%
LAST: 16695.40
YEAR TO DATE:
OVER 52 WEEKS
s 1,583.21, or 10.5%
P/E: 18
S&P 500 Index
s 11.17, or 0.25%
LAST: 4445.29
YEAR TO DATE:
OVER 52 WEEKS
s 118.74, or 0.7%
High
P/E: 22*
Nasdaq Composite Index
s 5.81, or 0.30%
LAST: 1952.53
YEAR TO DATE:
OVER 52 WEEKS
s 268.70, or 6.4%
s 839.18, or 23.3%
s 104.17, or 5.6%
s 291.21, or 17.5%
17250
4550
2100
16900
4400
2000
16550
4250
1900
16200
4100
1800
15850
3950
1700
Close
Low
50day
moving average
15500
16
23 30
6
June
13
20
27
3
July
11
18
25
3800
1
8
Aug.
16
23 30
6
June
13
20
27
3
July
11
18
25
1600
1
8
Aug.
16
23 30
6
June
13
20
27
3
July
U.S. stocks: most active...
Symbol
Volume,
in millions
Latest
AT&T
AmExpress
Boeing
Caterpillar
Chevron
CiscoSys
CocaCola
Disney
DuPont
ExxonMobil
GenElec
GoldmanSachs
HomeDpt
Intel
IBM
JPMorgChas
JohnsJohns
McDonalds
Merck
Microsoft
Nike B
Pfizer
ProctGamb
3M
TravelersCos
UnitedTech
UtdHlthGp
Verizon
VISA ClA
T
AXP
BA
CAT
CVX
CSCO
KO
DIS
DD
XOM
GE
GS
HD
INTC
IBM
JPM
JNJ
MCD
MRK
MSFT
NKE
PFE
PG
MMM
TRV
UTX
UNH
VZ
V
6.7
1.2
2.8
1.6
1.9
41.4
2.7
3.3
0.7
2.4
9.1
0.8
2.9
15.1
0.9
3.5
2.3
3.3
3.0
9.6
0.9
8.7
2.0
0.8
0.5
1.2
1.1
5.7
0.7
$34.85
87.51
124.27
105.71
127.24
24.57
40.06
88.35
65.17
98.99
25.84
172.51
83.63
33.95
187.90
56.88
101.71
93.57
58.43
44.16
77.11
28.59
81.81
142.16
92.12
105.88
81.44
48.90
212.03
0.16
0.11
2.29
0.55
0.36
0.63
0.12
0.75
0.06
0.10
0.01
0.14
0.51
0.15
0.05
0.16
0.03
0.39
0.58
0.08
0.14
0.38
0.33
0.36
0.85
0.32
0.07
0.02
0.60
0.48%
0.13
1.88
0.52
0.28
2.52
0.30
0.86
0.09
0.10
0.02
0.08
0.61
0.44
0.03
0.28
0.03
0.42
0.99
0.18
0.18
1.36
0.40
0.25
0.93
0.30
0.09
0.04
0.28
WalMart
WMT
3.7
74.13
0.10
0.14
Stock
CHANGE
Points
Percentage
18
25
1
8
Aug.
Sources: WSJ Market Data Group; Birinyi Associates
*Price-to-earnings ratio for the Nasdaq 100 Note: Price-to-earnings ratios are for trailing 12 months
DJIA component stocks
11
Stock
Volume,
Symbol in millions
PlugPwr
CiscoSys
SPDR S&P 500
SiriusXMHoldings
AdvMicro
iShMSCIEmgMarkets
Sprint
BrcliPathVIX ShFut
Vale ads
Apple
PenneyJC
Nokia
Intel
FacebookClA
Twitter
PLUG
CSCO
SPY
SIRI
AMD
EEM
S
VXX
VALE
AAPL
JCP
NOK
INTC
FB
TWTR
ADRs of Asian companies*

Latest
CHANGE
Points
Percentage
43.0
41.4
29.2
27.4
19.2
18.5
17.6
17.1
17.1
17.1
16.0
15.7
15.1
14.5
14.4
$6.17
24.57
195.47
3.52
4.13
44.59
5.70
29.20
13.39
97.31
9.59
7.79
33.95
73.92
45.15
0.31
0.63
0.63
0.03
0.02
0.03
0.12
0.69
0.36
0.07
0.24
0.05
0.15
0.15
1.00
5.31%
2.52
0.32
1.00
0.49
0.08
2.06
2.31
2.65
0.07
2.57
0.65
0.44
0.20
2.27
USU 4,952.2
INPH
689.7
ISDR
52.6
SNFCA
96.6
CERU
777.2
$6.42
2.99
10.92
5.00
5.47
1.85
0.79
2.04
0.90
0.95
40.48%
35.91
22.95
21.95
21.02
$3.28
51.11
16.05
20.88
19.03
0.89
13.44
3.60
4.33
3.37
21.35%
20.82
18.32
17.18
15.05
52-WEEK
High
Low
USEC
Interphase
IssuerDirect
SecNtlFnl A
CeruleanPharma
...Biggest losers
Vapor
RedRobin
Energy XXI
NoodlesClA
K12
VPCO
764.0
RRGB 2,568.2
EXXI 14,090.7
NDLS 4,047.0
LRN
1,356.1
TaiwanSemi
ChinaMobile
Baidu ADS
UtdMicro ADS
BHPBillitonADS
ICICI Bk ADS
TataMtrs ADS
CtripInt ADS
SonyADS
InfosysADS
NeteaseADS
HDFC Bnk
SKTelecomADS
HondaMtr ADS
MitsuUFJ ADS
SiliconwareADS
AdvSemiEnggADS
POSCOADS
pSivida
SiliconMotionADS
51job ADS
PranaBiotech
NomuraHoldingsADS
ChinaUnicomADS
LGDisplayADS
ChinaFinOnADS
KT Crp ADS
PhlpLngDst
Cnooc ADS
WiproADS
$23.07 $15.70
58.85
41.35
229.60 132.31
2.58
1.88
73.91 62.60
52.48 24.94
43.32
21.75
68.71 35.96
21.94
15.23
63.20 44.81
86.75 62.01
49.82 26.62
29.00 20.36
42.96 32.42
6.74
5.19
9.08
5.11
6.89
4.00
82.32
63.71
5.60
2.27
27.21 10.85
43.00 29.50
13.29
1.47
8.21
5.82
17.61
11.71
16.54 10.46
8.20
1.61
17.37
13.10
73.99 56.88
211.49 147.24
14.26
8.79
Biggest gainers...
Volume,
Symbol in OOOs
Stock
TSM
CHL
BIDU
UMC
BHP
IBN
TTM
CTRP
SNE
INFY
NTES
HDB
SKM
HMC
MTU
SPIL
ASX
PKX
PSDV
SIMO
JOBS
PRAN
NMR
CHU
LPL
JRJC
KT
PHI
CEO
WIT
CHANGE
Latest Points Percentage
3,305.8 $20.55 0.22

1,809.2 58.64 2.09
1,563.9 219.01 0.42
1,473.1
2.13
...
759.4
71.14 0.04
699.6 52.14
2.17
685.3 43.25 1.05
595.3 66.45 0.47
581.4 17.98 0.04
441.9 58.12 0.19
421.1 85.49
1.43
419.8 49.22
1.10
402.0 28.04 0.14
382.8 34.07 0.27
375.0
5.78 0.02
349.3
7.12 0.17
312.9
6.27 0.28
258.4 81.84
1.83
257.6
4.70 0.12
255.7 26.38 0.47
176.3 35.95 0.60
165.6
2.06 0.04
157.4
6.30 0.01
149.9 16.64 0.05
121.2 16.42 0.06
93.9
4.44 0.08
91.4 16.49 0.15
85.9 73.67 3.47
85.7 186.74 0.51
78.6
11.76 0.02
1.08%
3.70
0.19
...
0.06
4.34
2.49
0.70
0.20
0.33
1.70
2.29
0.50
0.79
0.35
2.37
4.67
2.29
2.62
1.75
1.70
1.98
0.16
0.30
0.37
1.77
0.92
4.94
0.27
0.17
*Most active American depositary receipts tracked by Dow Jones

Source: WSJ Market Data Group
Global government bonds
U.S. Treasury yield curve
Latest, month-ago and year-ago yields and spreads over or under U.S. Treasurys on benchmark two-year
and 10-year government bonds around the world. Data as of 12 p.m. ET
The curve shows the yield to maturity of current bills, notes and bonds; all data as of 3 p.m. ET.
Country/
Maturity, in years
Yield
SPREAD OVER TREASURYS, in basis points

Latest
Previous
Month Ago
Year ago
Previous
YIELD
Month ago
Year ago
3.800
Austria* 2
0.018
-39.0
-39.7
-40.5
-6.9
0.015
0.059
0.265
3.500
10
1.281
-113.0
-111.3
-106.6
-52.1
1.307
1.481
2.196
2.750
Belgium 2
0.033
-37.5
-37.5
-40.5
-2.4
0.037
0.059
0.310
2.600
10
1.395
-101.6
-98.5
-89.5
-9.2
1.435
1.653
2.625
4.250
Finland* 2
0.027
-38.1
-38.3
-44.0
-9.7
0.029
0.024
0.237
10
1.283
-112.8
-111.8
-110.0
-56.3
1.302
1.448
2.154
France 2
0.049
-35.9
-34.5
-40.7
9.4
0.067
0.057
0.429
1.750
10
1.400
-101.1
-98.9
-100.2
-38.0
1.431
1.545
2.337
0.250
Germany 2
0.003
-40.5
-41.1
-43.6
-10.8
0.001
0.028
0.226
1.500
10
1.015
-139.6
-139.2
-133.5
-89.1
1.028
1.213
1.826
n.a.
Greece 2
n.a.
...
...
...
...
...
...
...
n.a.
10
n.a.
...
...
...
...
...
...
...
4.750
Italy 2
0.444
3.6
6.6
7.1
150.1
0.478
0.535
1.835
3.750
10
2.649
23.8
30.1
22.0
146.3
2.721
2.768
4.180
4
3
2
Wednesday
3.375
0.250
5%
Coupon
One year ago

0
month(s)
2 3 5 710
years
maturity
30
Month
to-date
TOTAL RETURN
Ryan Index
Yield to
maturity
Modified
duration
Quarter
to-date
30-year Treasury
10-year Treasury
7 Year Treasury
Five-year Treasury
Ryan Index
3 Year Treasury
Two-year Treasury
1 Year Treasury
Six-month Treasury
Ryan Cash Index-a
Three-month bill
3.242%
2.430
2.054
1.577
1.767
0.883
0.416
0.086
0.056
0.055
0.035
18.69
8.85
6.42
4.75
7.27
2.95
1.95
0.94
0.50
0.44
0.25
1.55 %
1.36
1.28
0.96
0.98
0.45
0.26
0.03
0.01
0.01
...
2.22 %
1.17
0.81
0.52
0.87
0.27
0.22
0.06
0.02
0.02
...
17.10 %
7.80
5.01
2.66
5.63
1.14
0.72
0.24
0.09
0.10
0.04
14.46 %
6.27
4.46
2.61
5.02
1.53
0.95
0.36
0.15
0.16
0.07
One-month bill
0.041
0.08
...
...
0.02
0.04
a-Performance of a cash investment
Year
to-date 12-month
Source: Ryan ALM
Key money rates

Latest
52 wks ago
Prime rates
Latest
Euro Libor
One month
3.250
Netherlands 2
0.040
-36.8
-37.5
-41.6
-8.7
0.037
0.048
0.247
U.S.
3.25%
3.25%
2.000
10
1.203
-120.8
-120.1
-111.6
-54.3
1.219
1.431
2.174
Canada
3.00
3.00
Three month
5.450
Portugal* 2
1.022
61.4
67.4
46.4
422.7
1.086
0.928
4.561
Japan
1.475
1.475
Britain
0.50
0.50
Euribor
One month
52 wks ago
Offer
Eurodollars
One month
Bid
0.08143%
0.07929%
0.16286
0.15143
Six month
0.26357
0.26500
Six month
0.3300
0.2300
One year
0.43000
0.47714
One year
0.5800
0.4800
Three month
0.2000%
0.1000%
0.2500
0.1500
4.800
10
3.514
110.3
123.4
125.0
375.6
3.654
3.798
6.473
ECB
0.15
0.50
3.250
Spain 2
0.196
-21.2
-19.3
-0.8
132.1
0.219
0.456
1.655
Switzerland
0.50
0.50
0.09000%
0.12800%
Australia
2.50
2.50
Three month
0.19900
0.22600
U.S. discount
0.75%
0.75%
3.800
10
2.499
8.8
17.1
22.8
168.1
2.591
2.776
4.398
Hong Kong
5.00
5.00
Six month
0.29900
0.34300
Fed-funds target
0.00
0.00
2.000
U.K. 2
0.708
30.0
29.1
36.2
10.6
0.703
0.826
0.440
One year
0.47900
0.54400
Call money
2.00
2.00
2.250
10
2.439
2.8
2.1
6.0
-7.7
2.441
2.607
2.640
0.500
U.S. 2
0.408
...
...
...
...
0.412
0.464
0.334
2.500
10
2.411
...
...
...
...
2.420
2.547
2.717
Libor
One month
Hibor
One month
0.15500%
0.18406%
0.21571%
0.20714%
Three month
0.23360
0.26320
Three month
0.36786
0.38286
Six month
0.33090
0.39550
Six month
0.53929
0.54357
One year
0.55530
0.66760
One year
0.84429
0.87000
Latest
Overnight repurchase rates

U.S.
0.08%
Euro zone
0.00
52 wks ago
0.07%
0.05
Sources: WSJ Market Data Group, SIX Financial Information, ICAP
MARKETS LINEUP
Moving the
markets
Asian index movers
At right, Japans benchmark stock index

and the biggest movers among the
larger Asian stocks indexes and stocks
Thursday. Below each index are its most
actively traded stocks. The charts show
the percentage change in each indexs or
stocks value, rather than the point
change, for purposes of comparison. The
index level or stock price is indicated on
each axis. All indexes and stocks are
shown in local currency terms.
Nikkei Stock Average
Shanghai Composite
S&P BSE Sensex
ASX 200
Japan
China
India
Australia
15314.57
0.66% or 100.94
The benchmark advanced for a fourth

consecutive trading day, helped by a
stronger dollar and subsequent buying
in exporter shares.
2206.47
0.74% or 16.41
Weakness in cyclical sectors, such as

coal mining and metal production, and
re-emerging concerns about the economy weighed on the market.
30000
7500
17500
2500
25000
6250
14000
2000
20000
5000
10500
1500
15000
3750
1000
A S O N D J F M A M J J
2013
2014
Also, receive emails that summarize

the days trading in Europe and Asia.
To sign up, go to WSJ.com/Email.
Change
Net
A S O N D J F M A M J
2013
2014
Volume
in millions
Close
Change
Net
Close
634.15
5.16
0.07
1.34
HindalcoIndustries
InnerMongoliaBaot 324.96
5.05
0.21
3.99
TataSteel
8.55
535.55
0.85
SichuanChanghongA 204.41
3.71
0.13
3.39
BharatHeavyElec
6.74
209.45
XinhuZhongbao
184.17
3.90
0.01
0.26
TataMotors
6.35
481.36
7.86
1.66
MirvacGroup
10.31
1.85
0.01
0.54
InsigmaTechnologyA
121.13
7.62
0.42
5.83
Oil&NaturalGas
6.31
405.83
3.83
0.95
Alumina
10.10
1.49
-0.02
1.33
Close
Mizuho Fin
68.69
196
Unitika
57.50
45
unch.
NipponStl&SmtmoMtl
32.78
308
MitsuUFJFin
26.67
593
0.19
KawasakiKisen
18.18
222
1.37
Stock
0.36
WintimeEnergy
Change
Net
2500
10000
2013
2014
Volume
in millions
Volume
in millions
Stock
Telstra shares rose on a share buyback

and stronger-than-expected fiscal 2014
net profit. Rio Tinto and Fortescue Metals fell on lower spot iron-ore prices.
3000
7000
WSJ.com>>
The index closed at a near three-week

high amid gains in regional markets
and as lower inflation helped support
economic optimism.
5548.50
0.61% or 33.80
21000
2013
2014
Follow the markets throughout the

day, with updated stock quotes, news
and commentary at WSJ.com.
26103.23
0.71% or 184.28
Stock
Volume
in millions
Close
14.03
179.75
Change
Net
Stock
0.17
Telstra
56.84
5.56
1.05
0.20
FairfaxMedia
27.66
0.93
0.05
5.08
0.25
0.12
FortescueMetalsGrp
17.59
4.45
-0.08
1.77
0.30
0.12
2.21
Asian stocks in the news

Oriental Land Co. Ltd.
Japan
Wynn Macau Ltd.
20,020 Hong Kong

s 2.5% or 495
Philippine Long Distance Tele. CSL Ltd.

HK$31.50
Philippines
s 3.4% or HK$1.05
3,250.00 peso
Crown Resorts Ltd.
Australia
A$70.42 Australia
s 4.0% or 126.00 peso
s 4.7% or A$3.18
A$15.66
s 5.6% or A$0.83
The operator of Tokyo Disneyland and

other theme parks said it would raise
prices for its After Six Passport.
The gaming sector got a boost after SJM

Holdings reported its earnings results.
The shares closed at their highest level

since May 2013.
Analysts upgraded their earnings

estimates following the company's fiscal
2014 report on Wednesday.
The gaming concern posted a 66% jump

in net profit for the year through June.
In yen
In Hong Kong dollars
in peso
In Australian dollars
In Australian dollars
30000
50
4000
100.00
20.00
18000
30
3000
75.00
15.00
12000
20
2000
50.00
10.00
10
2013
2014
23
N.A.
0.6
-0.3%
2.5%
1.0%
4.2%
8.1%
23.0%
1000
2013
2014
36
N.A.
6.2
Price-to-earnings ratio
Earnings per share, past four quarters
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Consumer Services
Oriental Land Co. Ltd.
-0.3%
3.4%
1.0%
7.3%
8.1%
43.8%
HK$3.25
Thailand
t 1.8% or HK$0.06
103.0 baht
20
N.A.
4.2
Telecommunications
Philippine Long Distance Tele.
-0.3%
4.0%
0.6%
7.8%
6.9%
5.9%
The company's shares are down 15%

from a year ago.
In baht
6.00
200
-0.2%
-1.8%
12.2%
7.0%
TW$25.10
Hong Kong
-0.3%
5.6%
Consumer Services
Crown Resorts Ltd.
1.0%
3.2%
8.1%
12.3%
City Developments Ltd.
HK$130.10 Singapore
t 2.3% or HK$3.10
S$9.78
t 2.7% or S$0.27
The shares ended lower following the

release of second-quarter earnings late
Wednesday.
The Internet firm forecasted possible

flat revenue from mobile games in the
second half of the year.
The property developer reported a 33%

drop in second-quarter net profit.
In Taiwan dollars
In Singapore dollars
40
150
15.00
120
12.00
3.60
120
24
90
9.00
2.40
80
16
60
6.00
40
2013
2014
3
N.A.
16.7
1.5%
-1.5%
1.3%
9.7%
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
32
7.4%
-4.4%
8
2013
2014
22
N.A.
6.1
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Financials
Evergrande Real Estate Group
-0.4%
4.7%
19
N.A.
2.3
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Health Care
CSL Ltd.
160
Dividend yield
27
N.A.
1.8
Tencent Holdings Ltd.
t 2.1% or TW$0.54
5.00
2013
2014
4.80
1.20
2013
2014
Taiwan
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
t 1.9% or 2.0 baht
The shares closed at a more-than fiveweek low.
25.00
2013
2014
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Consumer Services
Wynn Macau Ltd.
Evergrande Real Estate Group Total Access Communication China Steel Corp.
Hong Kong
25.00
40
Dividend yield
125.00
24000
6000
2013
2014
5000
Telecommunications
Total Access Communication
-0.3%
-1.9%
0.6%
-1.9%
6.9%
-14.5%
30
2013
2014
24
N.A.
2.8
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
0.0%
-2.1%
1.0%
-1.0%
5.7%
1.6%
3.00
2013
2014
53
N.A.
0.2
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Basic Materials
China Steel Corp.
Dividend yield
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Technology
Tencent Holdings Ltd.
-0.4%
-2.3%
1.7%
1.4%
29.1%
75.8%
14
N.A.
0.8
PERCENTAGE CHANGE
Daily
1 wk. 52 wks
Financials
City Developments Ltd.
-0.2% 1.5%
-2.7% -3.4%
7.4%
-8.7%
HEARD ON THE STREET
Email: heard@wsj.com
SAIC Motor to Hit the Road
SinKing
King Digital's quarterly bookings
$500 to
$525 million*
$700 million
600
500
400
300
200
100
0
2013
WSJ.com/Heard
FINANCIAL ANALYSIS & COMMENTARY
2014
*Forecast
Source: the company
Candy Crush Saga game
King Digitals Crown Gets

Dented by Fickle Gamers
In videogames, even new platforms can bring the same old problems.
Companies such as King Digital
and Zynga are learning that anew.
For all the changes that have swept
the business in the past few years,
videogame makers face the same existential challenge of how to keep an
audience coming back for more,
hoping past hits will fund new ones.
For King, those new hits arent
coming fast enough to offset the decline of Candy Crush Saga. The
company missed Wall Streets revenue forecast for the second quarter
Tuesday and forecast what will be
its first year-over-year bookings decline for the third quarter. The news
crushed its shares, pushing them
below the $14 marka new low for
a stock that went public at $22.50
in March.
The problem of big hits quickly
melting down is especially acute in
mobile and social games, given their
focus on far more fickle casual gamers. This has played out before in
other areas of the game business.
The Nintendo Wii and games like
Guitar Hero were massive hits
among those who didnt consider
themselves gamers. This crowd then
quickly fled to smartphones and
tablets that offered compelling,
easy-to-play games at much cheaper
prices.
Both King and Zynga have specialized in freemium games,
meaning ones that are free to download and play, in the hope players
will purchase items within them.
Both are struggling to keep their
most lucrative players on board.
Kings monthly unique payers, a
measure of those who have actually
purchased items in its games, have

been declining. They are now off
20% since peaking in last years
third quarter. On the same metric,
Zynga peaked earlier, in early 2012,
and is now down 59% from that
point.
To remedy the problem of fickle
casual gamers, publishers are focusing their newest freemium titles on
more of a hard-core crowd. This is
also the area to which investment
dollars are going.
Kabam, maker of games like
Kingdoms of Camelot, raised $120
million from Alibaba last month in a
late-stage round that valued the
game maker at $1 billion. Machine
Zone, publisher of Game of War:
Fire Age that is now the third topgrossing title on Apples App Store,
is reportedly in talks for a funding
round that would value it around $3
billion.
Games like these may appeal
more to a core gamer accustomed to
spending more, although they also
have to compete with traditional
game consoles in this regard.
Kings saving grace has been that
investors have better understood
this risk from the start.
At its peak since its IPO in
March, the stock has barely traded
over nine times forward earnings
making it far cheaper than any
other game stock, according to FactSet. The sharp selloff on Wednesday
put the multiple even lower, around
7.5 times.
Still, the lack of growth across
its portfolio means that low multiple is deserved. In this business,
players dont get points for past
hits.
Dan Gallagher
OVERHEARD
Japans dreadful second-quarter
gross-domestic-product data raise
the specter of additional central-bank
action. Yet the Bank of Japan says
its already-massive monetary stimulus is open-ended.
So why do analysts think the
bank needs to clarify its intentions
soon? One reason might be a BOJ
table that forecasts the size of its
balance sheetwhich goes only to
the end of this year.
Economists at Barclays say that
come October, the BOJ is likely to
prolong the program through June of
next year. Capital Economics, meanwhile, says that the bank likely will
confirm the program will continue
another year.
The bank confirms each month at
its policy meeting that it is continuing the programexpanding the
monetary base by 60 trillion to 70
trillion yen (about $587 billion to
$685 billion) a year.
But in this world of forward guidance, by failing to update the forecasting table, the BOJ leaves moneyprinting-addicted investors nervous
that their fix might end.
In the worlds largest car market,

the biggest ride is worth the extra
effort.
Global investors dont look
closely at SAIC Motor, Chinas biggest car maker by sales, because it
is listed on the mostly walled-off
stock market in Shanghai. But they
should give it serious thought, not
just because of its solid earnings
Wednesday, but also because its
scarcity to foreigners may lift soon.
State-owned SAICs profits
soared 18% in the first half from the
year before, thanks to its enviable
position in Chinas auto market. It is
the General Motors or Volkswagen
of China. Actually, it is both, as the
joint-venture partner for the two
most popular brands in the country.
Their rapidly rising sales filter directly to SAICs bottom line.
Volkswagen is Chinas most popular brand, commanding 15.3% of
the market between January and
July, compared with 13.4% last year,
according to Macquarie, not including its Skoda and Audi units. VWs
upcoming models, along with older
hits like the Tiguan SUV, should
keep it growing. The recent spate of
regulatory actions against foreign
auto makers will have minimal effect on these companies.
With these moneymakers in tow,
Well Connected
SAIC Motor's joint ventures make
some of China's best-selling cars.
Brands associated with SAIC
Volkswagen
Wuling
7.8%
Hyundai
5.8%
Changan
5.4%
Buick
4.7%
Toyota
4.6%
Nissan
4.6%
Ford
4.2%
Chevrolet
3.7%
Honda
3.5%
15.3%
Note: Market share January-July

Source: Macquarie
SAIC raked in enough cash last year

to pay out 53% of its profits as dividends. Its cash flows should stay
strong enough to maintain this payout ratio until 2016, says Nomura.
That the stock trades in mainland China, where local investors
prefer to bet on higher-growth
firms instead of staid car makers,
ironically is another positive. SAIC
languishes at 6.4 times forward
earnings, while Hong Kong-listed
Dongfeng Motor goes for 7.2 times
and Guangzhou Automobile Group
8.8 times.
A move by Chinese officials to
let Hong Kong investors buy Shanghai stocks, and vice versa, should
close that valuation gap. The plan
includes letting any investor in
Hong Kong buy from a list of designated Shanghai stocksincluding
SAIC.
The program is supposed to
launch in October. Even if it is delayed, SAICs 7.1% dividend yield
makes it worth the wait.
The trouble is, getting hold of
SAIC stock now requires some doing. Institutional investors can access mainland stock markets
through quotas from the government under the Qualified Foreign
Institutional Investor program, or
through brokers who have those
quotas.
Buying SAIC shares now would
ensure enjoying the potential upside
once Shanghai connects with Hong
Kong and a whole new world of investors gains access to Chinas biggest auto company.
SAIC is a play on two important
changes in China: Consumers flocking to cars, and Beijings slow efforts to pry open its closed capital
markets. Investors should get ready
to ride both.
Abheek Bhattacharya
Published by Dow Jones Publishing Company (Asia). Printed in Hong Kong by Superflag Printing and Communication Ltd., 1/F, 8 Chun Ying St., Tseung Kwan O Ind. Est., Tseung Kwan O, NT. Printed in Indonesia by PT Gramedia Printing Group, Jalan Palmerah Selatan 22-28, Jakarta 10270. Printed in Japan by The Mainichi Newspapers Co., Ltd., 1-1-1 Hitotsubashi, Chiyoda-ku, Tokyo, 100-8051. Printed in Korea by JoongAng Ilbo. 7, Soonwha-Dong, Chung-Ku, Seoul 100-130. 1997 June 04 Registration no.: SeoulKA00020 (Daily Newspaper),
Publisher/Editor/Printer: Song, Pil-Ho. Printed in Malaysia by KHL Printing Co. Sdn. Bhd. (ROC No: 235060-A) Lot 10 & 12, Jalan Modal 23/2, Seksyen 23 Kawasan Miel Phase 8, 40000 Shah Alam, Selangor, Malaysia. Printed in Philippines by FEP Printing Corporation, 3817 Mascardo St., Corner Metropolitan Ave., Pasong Tamo, Makati City. Printed in Singapore by Singapore Press Holdings Limited, 82 Genting Lane Media Centre Singapore 349567. Printed and distributed in Taiwan by The China Post, 8 Fu Shun Street, Taipei 104. Printed in Thailand by
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asia.WSJ.com/lifestyle
Friday - Sunday, August 15 - 17, 2014
Get Back in the Swing
Photo Illustration by Danny Kim for The Wall Street Journal Styling by Athanasia Nichols Grooming by Birgitte Phillipides for Malin + Goetz Model: Timothy Weinert/CESD
The latest golf techno-gadgets promise to make

the game easier. But can the flood of data they
provide help a frustrated, lapsed player
reconnect with a favorite childhood sport?
Page W2
[ INSIDE ]
WHOLE LOTTA
LOVE FOR
CULOTTES
Fashion is
embracing the
new anti-dowdy
take on the
cropped pants W6
HIGH NOTES
Kuala Lumpurs
music scene
finds a new
beat W4
RED CARPET Overseas developers court Hong Kong home buyers W11
W2 | Friday - Sunday, August 15 - 17, 2014
GEAR & GADGETS
Greens Technology
SWING STATES // HOW A SENSOR THAT CLIPS TO A GOLF GLOVE CAN

MAP A PLAYERS TECHNIQUE DOWN TO THE LAST DETAIL
Capture
Analyze
Calculate
Two accelerometers inside the Zepp Golf measure speed,

velocity and the direction of your hand movement, while a
gyro tracks rotation. Roughly 1,000 data points are recorded
each second.
To develop the algorithms that make sense of the raw

motion data, Zepp employed high-frame-rate video
cameras, motion-capture suits, and speed guns to track
golfers swings.
The Zepp Golf figures out the speed of the club head by
taking into account the clubs size, length and the flex of
the shaft, referencing a database with specs for over
10,000 clubs.
BY JOANNA STERN
here I was in Scotland, the

birthplace of golf, at the first
tee of the Queens Course at
Gleneagles. I made sure my
knees and arms were properly
bent, my weight balanced. But when I
swung, my shot sailed away from the fairway and into the tall grass at least 120
yards to the leftsmack where some fluffy

sheep had decided to graze. Chagrined, I
tried again. And again. Then again.
Not since William Wallace came down
from the highlands to fight for Scotlands independence had this countryside seen such a
spectacular array of stray projectiles.
It wasnt always that way for me. When I
was younger, the sport was second nature.
Without a thought, I could send that dimpled ball soaring through the sky and be
pretty certain where it would land. Of

course, I had more time then. These days, I
only make it to the course once or twice a
year, and when I do, getting back into the
swing of things is harder than it used to be.
As a tech columnist, I know my problem
is one that gadget-makers have tried to
tackle for years. I receive a gazillion emails
about new golf gizmos that promise to do
everything but fish my ball out of water
with a deep-sea drone. There are bone-con-
ducting headphones for anxious golfers who

need help relaxing on the course, gloves that
tell you if youre gripping your club too
tightly and the $10,000 Segway golf cart.
My needs are simple, though: I just want
to be able to hit a ball straight, even
though the golf-ball-size dust bunnies in my
closet are the only thing my clubs have
made contact with in the past six months.
Could technology help me do that? I pored
over the least absurd-sounding emails and
Photo Illustration by Danny Kim for The Wall Street Journal, Styling by Athanasia Nichols, Grooming by Birgitte Phillipides for Malin + Goetz, Model: Timothy Weinert/CESD
How the latest golf gizmos can help you hit the ball straight
Friday - Sunday, August 15 - 17, 2014 | W3
GEAR & GADGETS

took the most plausible good-for-all-levels golf gadgets to a local course.
TRIPLE BOGEY // THE THREE GOLF GIZMOS WE TESTED
The Instructor in Your Smartphone

Naturally, in the age of self-driving cars and
robotic pharmacists, there are gadgets that
promise to replace the antiquated human
golf instructor. Lots of devices gather data
about your swing with the hopes of turning
you into Jack Nicklaus. Most, like the
SwingTip or Swingbyte, awkwardly latch to
your club. I opted for the Zepp Golf ($150,
zepp.com), a Starburst-size neon-yellow
model, because it clips more discreetly to a
golf glove.
This Bluetooth-connected sensor delivers
all sorts of information about your golf
technique to a smartphonethe speed and
trajectory of your club, the angle of your
backswing, plus a slew of other technicalsounding golf metrics that casual players
will have to look up. (Obviously, theres an
app for that: the $2 Golf Glossary for
iPhone.) Based on this data, Zepp gives your
swing an overall score.
At first, I had trouble deciphering all
this information. Zepp would tell me that
my swing got a failing score of 68 because
my backswing was at 126 degrees, my hand
plane at 5%. Thanks, but exactly how will
that help me make the ball go into the little
hole?
As I stood at the driving range mat and
struggled to make sense of all the numbers,
a fella named Larry came over wearing a
Zepp on his glove. We commiserated about
the complicated interface, but he showed
me how to access the apps videos, which
offer tips to help you overcome the shortcomings in your technique. Now, not only
was I feeling crappy about my golf game
but someone else was teaching me how to
use technology!
Once I mastered its quirks, the Zepp was
quite useful. When I hit a shot that headed
straight for the 150-yard flag instead of directly at the side nets, Id tap the corner of
the sensor to mark that swing as a favorite. I could then use the app to watch an
animated rendering and establish that
swing as a model against which my future
attempts would be compared and graded.
When I hit a bad shot, the Zepp helped me
realize that the problem was usually related
to my hand or club plane.
As helpful as the instructional videos
were, they werent as effective as a $100,
hourlong lesson with a pro: Joe Bush at
Shackamaxon Country Club, in Scotch
Plains, N.J.
After a few minutes of staring down my
swing at the practice range, Mr. Bush deduced that my shots would stop hooking
left if I weakened my gripor, in other
words, completely changed the way I held
the club by rotating my bottom hand. Sure
enough, after a few swings, my shots were
going straight. I started to remember how
good playing this sport could feel.
After I made those pro-guided swing
changes, I recalibrated the app to reflect

Zepp Golf
When strapped to a golf glove,
the Zepp captures a flurry of
motion-related data about each
swing. $150, zepp.com
my improved techniquewhich made the
Zepp a better teacher. Less anxious that I
would send unsuspecting fellow golfers to
the hospital, I ventured onto the course.
The Computerized Caddie
The Arccos ($399, arccos.com), which goes

on sale this month, is like having your very
own caddie, except it doesnt carry clubs or
polish balls. This set of 14 gumdrop-shape
sensors, which stick into the top of your
The app informed me that Id

hit 193 yards. I doubt even
Jack Nicklauss caddie was
that precise.
golf clubs like thumbtacks, keeps track of
your game and suggests appropriate clubs
to use. Its similar to a competing product
called Game Golf, but that model requires
you to clip a vibrating beeper-like device to
your pants; when I used it, I was never sure
if my shots were registering or my table
was ready at the Olive Garden.
Leveraging my smartphones GPS via
Bluetooth, the Arccos app not only figured
out what course I was on, it knew I was at
the 18th hole, 393 yards from the green.
(The app has access to maps of 17,225 golf
courses in the U.S.which the company
says is all of them.) After I teed off and
drove my cart to where my ball landed, the
app crisply informed me Id hit 193 yards,

Arccos
With the help of your smartphones
GPS, this set of 14 sensors tracks your
performance by club type. $399,
arccosgolf.com
and that I was still 200 away from the cup.
I doubt even Jack Nicklauss caddie was
that precise and attentive.
The more you use Arccos, the more data
it collects about how you perform with various clubs. After youve played a few rounds,
all that seemingly boring information can
come in handy. Instead of wondering which
club I should hit with (perhaps my 6 iron
would do the trick?), I could base my decision on hard numbers. If I was stuck in the
rough, say, 120 yards from the green, I could
look up data on which club had worked best
under similar circumstances.
The downside: Arccos only works if you
keep your iPhone in your pocket, since the
system relies on your phones GPS. I left my
phone in the cart at the seventh hole, and
the app refused to acknowledge a Tiger
Woods-worthy chip shot Id just made. Its
sensors were also too sensitive at times.
When I accidentally dropped my 7 iron on
the ground, Arccos registered that as a
shot. Still, the Arccos unobtrusively collected helpful information about my game
in real time and took care of the tedious aspects of scoring so I didnt have to.
The Digitized Guide

With the Garmins Approach S6 watch
($400, garmin.com), the all-important
course map is always with you on the tee,
instead of being left on the golf carts steering wheel. The Garmin puts maps of any of
38,000 international golf courses on your
wrist and tells which way the flag is. That
was helpful when I found myself in the
rough behind a sand trap I couldnt see over.

Garmin Approach S6
A GPS-enabled watch puts
color maps of any of 38,000 golf
courses on your wrist. $400,
www.garmin.com
It does more than that, however. Similar
to the Zepp, the watch measures swing
tempo and swing strength, though you have
to manually turn that feature on by tapping
and scrolling through numerous menus, and
I never quite got it to work right. But the
colorful maps are the watchs selling feature. At hole 16, the birds-eye view indicated a sand trap on my left and another a
bit further up on the right. The only thing
the watch was missing was a beverage-cart
call button.
Despite its multitude of features, this is
no James Bond watchin fact, 007 might
have been outwitted by Goldfinger had he
worn it. The interface is confusing, and the
touchscreen is about as unresponsive as the
ones on the back of airplane seats. If I
spent as much time practicing my swing as
I did poking at the watch, Id be a great
golfer, said Golf Pro Joe as I held everyone
up at the fourth hole.
Thats pretty much what I discovered
with all these gizmos: The less futz, the
better the putts. And it doesnt matter if
that futzing is with a touchscreen or your
grip on the club. Gadgets can take you out
of the zone, but those that discreetly handle the drudgery of golfkeeping score,
choosing clubscan be of help, too. With
the aid of GPS satellites, accelerometers
and my teacher Joe, I started losing myself
in the game again. I rediscovered the feeling of swinging at the ball and watching it
soar through the sky (in the right direction)
as everything just fades away.
Sheep may graze comfortably near golf
courses again.
A SHORT HISTORY OF 21ST-CENTURY GOLF INNOVATIONS

Inventors have been trying to lower the bar for beginner golfers since well before the rise of Bluetooth. Here are a few of the most creative
2001
2006
2008
2013
This practice club

solves the problem of
having to walk over to
the ball, bend over and
pick it up when working
on your putting. Its golf
ball is attached to a 10pound (4-kilogram)
fishing line, and can be
retrieved using the reel.
Electronically
assisted putting
has long been a
golfers fantasy.
This one, offered
by Restoration
Hardware and
Frontgate, clips
near the head of
a club and shoots
a red laser-beam
guide up to 500
yards away.
This soft-sided indoor golf ball is

intended to be a less destructive
alternative to the standard version
for players who want to practice at
home. Its crocheted exterior
surrounds a hollow rubber ball filled
with beads, giving it the feel of a
firm Hacky Sack. Each one is
handmade in China, according to its
inventor, Adam
Tuttle, because
I have yet to
be able to find
a machine that
can crochet
a sphere.
Glide across sand traps and water or

sidle up to greens without leaving
tire marks. Ten of these $58,000 vehicles have been sold since their introduction last year.
Chris Kornelis
Putt & Reel
Laser Putter
The Golf Cart Hovercraft
The Floppy
2011
EZ Drinker Toilet Golf Kit

Blue Ridge Product Solutions iteration of this washroom accessory includes a contoured bath rug, seatheight putter, golf balls and flag.
Danny Kim for The Wall Street Journal, Styling by Athanasia Nichols, Grooming by Birgitte Phillipides for Malin + Goetz, Model: Timothy Weinert/CESD, Club: Callaway, Glove: Titleist, Pants: Maide Bonobos, Shirt: Polo Golf, Shoes and Belt: Brooks Brothers; Illustrations by Joe McKendry
CULTURE & ENTERTAINMENT

HIGH NOTES A new
generation of singers,
including, clockwise
from left, Cheryl Tan,
Dasha Logan and Poova
Plachciak, are
transforming Kuala
Lumpurs club scene
with fresh sounds.
ne is the daughter of the

countrys deputy prime minister and another is the child of
a local rock star from the
1970s. A third is from a stockbroker family.
They are among a growing number of
young Malaysian women resisting pressures
to marry rich or earn law degrees and are
instead focusing on their passion for singing. The trend has turned Kuala Lumpurs
jazz and cabaret scene into a testing ground
for vocalists and a source of new pop stars.
I cant really explain the phenomenon,
says Michael Veerapen, a veteran jazz pianist who has coached a few aspiring songstresses. Maybe theres just more room
now, financially and emotionally, for these
ladies to express themselves.
Cheryl Tan, who worked in musical theater during her early teens, says her stockbroker father advised against a career in finance and told her to pursue what she
really wanted to do. Ms. Tan, who counts
Sheila Jordan and Ella Fitzgerald as influences, studied music at Wesleyan University in Connecticut and performed in venues around New York.
After returning to Kuala Lumpur two
years ago, the 25-year-old joined a local pianist to form the Malaysian Music Project,
which regularly performs at clubs in the
capital.
I want to contribute to my own countrys musical scene, says Ms. Tan, who also
performs solo in Singapore. Her father has
even followed her musical lead and taken
up drums.
Dasha Logan, daughter of Loganathan Arumugam, or Loga, the late lead singer of the
Alleycats, is also putting on shows in Kuala
Lumpur and her hometown of Penang. I
couldnt imagine a better place to find my
voice and get mentored, says the 26-yearold. Ms. Logans latest showwhich she
called Strippedwas on July 5 in Penang.
Restaurants in Kuala Lumpur featuring
musical acts include Alexis Bistro, Mezze,
and the Bee (at Publika), while jazz mainstay
No Black Tie, which has open mike nights on
Mondays, is another good place to find new
singing talent. No Black Ties founder Evelyn
Hii says many singers return to Kuala Lumpur after studying music abroad and hone
their craft in front of live audiences, forming
bands and exploring their sounds.
The emergence of many more live music venues, providing increased opportunities to perform for a live audience, has
given birth to a new generation of women
singers in the Klang Valley, she says.
Jazz-oriented artists like Ms. Logan tend
to avoid television pop competitions like
Malaysian Idol and Akademi Fantasia.
There are a few competitions but I
wouldnt join, Ms. Logan says. With so
many new venues in K.L., its not so difficult to make it now.
Ms. Logans father, who died of cancer in
2007 at the age of 54, encouraged her to
perform. He used to advise me about how
to use the mike. Even things like making
sure I wore shoes that grounded me in case
of lightning.
Najwa Mahiaddin, the daughter of Ma-
Kuala Lumpurs music scene finds a new beat

with a group of young cabaret singers
Wong Horng Yih (Tan); Vignes Balasingam (Plachciak)
Malaysias
Blossoming
Jazz Age
BY JOHN KRICH
laysian Deputy Prime Minister Muhyiddin

Yassin, went abroad to study at New Yorks
Juilliard School. She has a YouTube channel
featuring her music videos and she recently
returned to Malaysia to promote her EP recording Aurora with a launch party and
series of concerts.
There are so many great young women
singers here nowthey can do jazz, pop,
anything, says Steve Thornton, a jazz percussionist who moved to Malaysia from
New York in 1997.
I think this is the kind of place where if
you are really talented, youre going to have
a chance. Another thing is that Malaysia has
a lot of fantastic looking women, and the record companies are looking to package that.
These performers are following in the
footsteps of Yunalis Mat Zaraai, a trailblazer
known as Yuna who was signed in 2011 by a
management company in Los Angeles after
putting her music videos on Myspace. She
has released several albums since, appeared
on U.S. talk shows such as Conan and
Jimmy Kimmel Live! and seen her Twitter
following rise to 1.1 million.
The 27-year-old, who began writing songs
when she was 14, lives in the U.S. Her next
tour of North America starts at the end of
the month. Yuna has also launched a clothing
line with Malaysian brand November Culture.
Theres always pressure world-wide on
women to choose safe careers, maybe a little more so in Malaysia because theres not
so much emphasis on the arts, says Greg
Henderson, an Australian record producer
in Kuala Lumpur. But things are looser, especially with the religious thing. Yuna has
liberated women to perform pop in a
tudung, for instance, he says.
Janet Lee was raised in a Chinese family
in the town of Taiping in Perak state and
took a winding route to her singing career,
having earlier worked in information technology, marketing and banking. As a child,
she would sing The Phantom of the Opera
songs and Natalie Cole tracks into a shampoo bottle. In Kuala Lumpur, she persuaded
a childrens choir leader to let her join, even
though she was 19 years old. Later she got
her start performing at friends weddings.
Thats where I really learned how to
grab an audience, when youre not the main
dish, but just the garnish, says Ms. Lee,
who earns a living from private functions
and corporate events, as well as Chinesethemed musical theater. She created the
one-woman cabaret Shanghai Jazz after
her partner died in a motorcycle accident.
Poova Plachciak, 34 years old, says her
parents werent overly impressed with her
decision to become a singer. But now her
mother calls herself a big fan while her law
lecturer father and younger brother often
attend her gigs in Kuala Lumpur.
Being Indian, I had to have a proper education and I was exposed to Carnatic music. But what really got me going as a kid
was Glen Campbell and the Carpenters,
says Ms. Plachciak, whose music style has
evolved from earthy blues to electronica.
She has an album on iTunes called Ticket to
Faketown and is working on another.
Although there are days when I am not
confident about this journey, my love for
what I do keeps me going, Ms. Plachciak
says. Its the best decision I ever made,
and Im not going to look back.
CULTURE & ENTERTAINMENT
Comic Appeal
Old Master Q grabs buyers interest at Sothebys sale
SOTHEBYS IN HONG KONG is betting that nostalgia sells with a
new exhibit featuring the original
drawings of the iconic comic Old
Master Q.
Titled Old Master Q: What the
@#$% Is Going On?, the exhibit,
which runs until Aug. 29, features
121 works, ranging from blackand-white ink drawings of multipaneled comics to the colorful
covers of the biweekly publication. Sothebys is selling the
works on behalf of the studio behind the strip, though they wont
be put on the block for auction.
Popular among Hong Kongers
and the Chinese diaspora, the
comic was created by Alphonso
Wong and has been a newsstand
staple for more than 50 years. The
series centered on the title character, a bumbling Chinese man
easily identified by his traditional
clothes and trademark cap. Lighthearted and humorous, Old Master Q frequently commented on
pop culture and the fast-changing
lifestyle of modern Hong Kong.
Born in Tianjin, China, Mr.
Wong was trained in Western art
in Beijing before moving to Hong
Kong in 1956 to work as an illustrator for a book-publishing company. The earliest Old Master Q
comic strips appeared in local
newspapers in 1962, though the
biweekly publication didnt appear
until 1964.
Mr. Wong stopped drawing the
comic in 1997, when he was no
longer able to work, but the strip
continues today. The 89-year-old
Mr. Wong graduallyand reluctantlyceded control

of the drawing and
publishing to a studio led by his son
Joseph Wong, an architecture professor
in Taipei. The younger Mr. Wong now
leads the artists and
also manages the
business of licensing
the Old Master Q
image.
My father never
wanted me to do it,
but its what Ive
long wanted to do,
Joseph Wong said in
an interview. He
thought I was wasting my time. Dont
do this. Its too hard
work. Now, he
doesnt say a word,
which means Im doing a good job.
Sothebys curator Angelika Li,
who has been a fan of the strip
since she was a child, approached
the studio early last year about
organizing a show. She said she
long hoped to use the Sothebys
Hong Kong gallery for something
really local. The comic is about
our collective identity, our daily
lives, in Hong Kong.
The Wongs gave their consent
and it was up to Joseph Wong to
begin the time-consuming task of
sifting through his fathers archives. He sought to find the best
of the early drawings, though he
found many of the earliest originals were lost to decay.
OMQ ZMEDIA LTD. (2)
BY JASON CHOW
Hes so disorganized, the

younger Mr. Wong said of his father. The drawings were in drawers and boxes. Some were eaten
by termites. Others were so yellowed with age. It took a lot of
time to find the best works.
The 121 works on display at Sothebys range from 1968 to 1983
and in price from 50,000 to
100,000 Hong Kong dollars
(US$6,450 to US$12,900).
Old Master Q drawings have
rarely been offered at international auction houses in the past.
The last time was in 2012 at a
Christies sale, when three cover
drawings sold for HK$100,000.
Ms. Li said buyers at the cur-
Scholarly Contemplation (1981), ink and color on paper, above left; Fighting for
Seats (1973), ink on paper, above. (Seats available here! the waiter says.)
rent exhibit have come from Hong
Kong and afar, including many
Chinese living in Europe and the
U.S.
Theres a certain charm to
BY CHRISTINA BINKLEY
THE RACE TO DRESS Washingtons
best-dressed couple is on.
As Hollywood turns to the Emmys on Aug. 25, the presidents
wife is once again a sought-after
fashion commodity. But its Robin
Wright, the nations first lady on
the political drama House of
Cards, who is on fashion labels
radar, along with her co-star
Kevin Spacey.
Brands are usually most interested in dressing younger stars.
But this year the 48-year-old Ms.
Wright and the 55-year-old Mr.
Spacey present a perfect storm of
temptations for any fashion label.
To begin, theyre both nominated
for best-actor Emmys for their
roles as the machiavellian Frank
and Claire Underwood. That means
that one or both could appear on
the Emmys stage, giving some designers duds global exposure.
(Netflix expects to release the third
season of House early in 2015.)
Ms. Wrights power wardrobe
anchored in sleek black and gray
tailored suits and dresseshas
made her a valuable fashion influencer, particularly for young pro-
fessional women. Her characters

clothing and haircut are closely followed on blogs and social media,
where some women post photos of
themselves at their desks in Clairelike outfits. Its a public reaction
the actress welcomes, though she
says it took her by surprise. When
my publicist told me that people
were blogging about itthe hair
and the clothes, Ms. Wright says,
I was like, really? Wow!
The actress potent strongwoman air has made her particularly influential, leaving some designers faintly gaga.
I just love her, Jason Wu said
recently. He expressed a desire to
dress Ms. Wright in either of the
labels he designs, his eponymous
line or Hugo Boss. Were talking.
Among the many designers
also in the running to dress Ms.
Wright is Ralph Laurenwhom
she names as one of her favorites.
She has worn the label on past
red carpets, including last years
Emmys. Its also possible that she
could move further upscale. Now
that her character has become the
first lady, Ms. Wright has been requesting more Christian Dior for
the show, says the shows costume
designer, Johanna Argan.
Netflix
The Race to Dress

TVs First Couple
DECKED OUT House of Cards stars Robin Wright and Kevin Spacey.
Burberry is a likely candidate
for Mr. Spacey, who wears the label on the show as well as on red
carpets including the Academy
Awards and Golden Globes.
Burberry lauds its good relationship with Mr. Spacey and Ms.
Argan, but most other brands
were cagey when asked if they are
sending clothes for the Emmys.
Fashion labels are loath to admit
that they are trying to dress a
star for the red carpet, for fear of
being embarrassed if they arent
chosen. Stars are notorious for
changing their minds at the last
momentoften deciding on a stylists rack of potential looks a few

hours before an event.
House of Cards isnt nominated for an Emmy for best costumes. Contemporary costuming is
often overlooked in awards. But
the snub hasnt affected the impact
of the show on current fashions.
Designer Narciso Rodriguez
another Robin Wright fansays
clients have contacted him about
looks such as a gray flannel dress
that she wore on the show. The
designer, known for his minimalist
clothing, says dressing Ms. Wright
this, Joseph Wong said. The single-line, black-and-white drawing is

so simple but lively, and Old Master
Q is so funny, satirical and clumsy,
he said.
as Claire Underwood has brought
a renewed interest into this part
of my work, which is the foundation of my business.
Mr. Spacey, too, is a new fashion icon. Esquire Magazine has
encouraged politicians to dress
like Frank Underwood, dont behave like him.
Ms. Wright, who works closely
with Ms. Argan in selecting her
characters clothes, says she understands why her characters
outfits have proven so intriguing.
Its powerful and its sexy. What
man doesnt like that in a
woman? asks Ms. Wright.
Mr. Rodriguez, who spent hours
in his archives working with Ms.
Wright and Ms. Argan, says the
costumes resonate because of their
discipline. The consistency in
dress and style makes it even more
intoxicating, he says. Theres
greater strength in being subtle.
Because Ms. Argan buys most
of the clothes off the rack from
department stores, the brands
arent always aware of their involvement until episodes are released. Thats another reason that
fashion brands often prefer redcarpet dressing to working with
film or television studios: Red-carpet photos get wide distribution
and usually credit the designer.
Ms. Argan says that the fashion label Theory once called to
find out which Theory dress Claire
had worn in an episode. I was
like, I dont have the tags anymore, she says.
STYLE & FASHION
Putting the Cool in Culottes

Long thought of as dowdy and unflattering, the cropped,
wide pants are suddenly the silhouette of the season
BY ALEXA BRAZILIAN
Danny Kim for The Wall Street Journal, Styling by Paula Knight, Hair & Makeup by Liz Christensen, Models: Ada Roth/Major Model Management and Alex Nyame/Red Model Management
ur closets may be
stuffed to the gills,
but we all go
through phases
when we want to
wear just one piece of clothing.
Over and over again. My current
fashion fixation is a pair of culottes: wide-leg, fluid silk pants
from London-based label Mother
of Pearl that fall just below my
calf in a festive stripe-and-floral
pattern.
This summer, Ive worn them
everywhere but to bedalthough
theyd be perfectly comfortable
there, too. For a work dinner in
London, I paired them with loafers, a white shell and my favorite
Stella McCartney tuxedo jacket.
The breezy, cropped trousers cut a
much chicer line than any fulllength suit could. At a casual
weekend party in the country,
they were easier and more elegant
than a summer dress, worn with a
simple linen T-shirt and flat
bronze K. Jacques sandals. And
for a wedding in New York this
fall, Im planning on wearing them
with a vintage neoprene racerback top and my favorite spindly
sandals from Manolo Blahnik.
It seems designers are having a
similar love affair with culottes at
the moment, even if the
silhouettewith its voluminous
wide leg and cropped length that
can fall anywhere from just below
the knee to just above the ankle
is often considered tough to pull
off. (More on that later.)
Essentially, you can run

around frantically in
them and still look
completely elegant.
But culottes also have many
advantages, not the least of which
is their barbecue-to-black-tie versatility. Theyre also transitional,
the perfect piece to wear from
summer into fall (and winter into
spring, too). This year Balenciaga,
Rosie Assoulin and Proenza
Schouler endorsed the style for
spring. French designer Christophe Lemaire sent a lightweight
A-line khaki pair down his runway
for spring and then created thick
drab wool and gray-denim versions for fall. Other brands in the
fall-season culotte camp include
Michael Kors, Derek Lam and
Marni. Chlo designer Clare
Waight Keller cut them in supple
tan leather, and Delpozo designer
Josep Font created voluminous
variations in powder-blue and
ochre-yellow wool.
The culotte is a little bit of an
F-you piece, said Lowell Delaney, co-designer of the two-yearold London label, Trager Delaney,
which has included culottes in
nearly every collection to date.
Its such a power move because it
isnt a conventionally sexy look. It

says, I dont care and I still look
better than you even though
youre wearing a miniskirt. Its
androgynous but feminine at the
same time.
Before its recent resurgence,
culotte was a bit of a dirty word
in the fashion world. It can make
you think of 1992, when your mom
was wearing skorts, said Ms. Delaney. The style also has costume-y
connotations stemming from its
historical connection to the split
skirt (very wide-legged pants
made to look like a skirt) which en-
abled horse-loving Victorian

women to switch from riding sidesaddle to western.
They can also have a mumsy
and institutional air about them.
People often associate them with
school uniforms and the Brownies,
said Mother of Pearl creative director Amy Powney, who created
printed-silk renditions for spring
and wool versions for fall. But the
silhouette actually [works for] lots
of different body types.
Despite designer endorsements, the skirt-trouser hybrid
which not only adds volume to the
leg but falls at a rather unconventional spotis still a hard sell for
the average woman. The shape du
jour can be surprisingly flattering,
however. [One of] the lengths of
the season hits the lower calf,
which looks really fresh and chic
and gives the illusion of slimmer
legs because youre just seeing the
skinny ankle, said Suno co-designer Erin Beatty.
Matches Fashion buying director Natalie Kingham started snapping up the silhouette this past
spring for the luxury London retailer. The reality is, they can be
more flattering than the popular

midi-skirt and more streamlined
and sophisticated than a summer
dress. Its slim over the hip and
bottom and then kicks out, so its
great for women with bigger
thighs, said Ms. Kingham. At the
moment the culotte customer is
still young, fashion-forward and
likes to experiment, but that will
change.
That shift is sure to happen as
more women learn how best to
wear the shape. For taller, slimmer
women, a chunky brogue or Vansstyle slip-on sneaker matched with
a relaxed T-shirt easily nails the gamine quality that many designers
(Acne Studios, Marni, Emporio Armani) captured on their catwalks.
However, a substantially high heel
is the surest and sexiest way for
women with less than Amazonian
frames to make the look work. Ms.
Delaney wears hers with a vintage
pair of peep-toes with a chunky
heel and thick velvet straps. You
need to balance the proportions of
the wide leg with a substantial
shoe, whether its a heel or a heavy
flat, she said. For the chillier
months of winter, Ms. Kingham
suggested trying culottes with a
clog-type heel or a knee-high boot.
This idea of contrast applies
equally to what you wear on top.
Anything that accentuates the
waist and slims your torso will do
nicelyfrom a tucked-in silk button-down to a cropped cashmere
crew neck sweater or a strapless
bustier top paired with a tailored
jacket or skinny cardigan.
Los Angeles designer Rosetta
Getty created Bermuda-length culottesripe for vacation or a day in
the cityfor her upcoming resort
collection, inspired by visionary
artist and art dealer Betty Parsons,
who was partial to wearing shorts.
There has been this shift toward
more-comfortable yet still-polished
clothing as of late, and the culotte
speaks to this demand, said Ms.
Getty. My personal style is very
much tomboy with a feminine edge,
which in essence is what the culotte embodies.
Indeed, many of the designers
who offer the silhouette in their
collections find culottes can-do
spirit most appealing. I cycle to
work in themthey look as sophisticated as a skirt but you can
jump around in them if you need
to, said Mother of Pearls Ms.
Powney. Trager Delaneys Ms. Delaney finds culottes especially
handy when hosting one of the
regular dinner parties she throws
in the garden of her London
apartment. Theyre totally perfect for entertaining. You dont
have to worry about bending over
to pick up a piece of chicken that
fell off the barbecue, she said.
Ms. Delaney has also designed
forest-green versions for female
staffers of chef Skye Gyngells hotly
anticipated restaurant, Spring,
opening in Londons Somerset
House this fall.
Essentially, you can run around
frantically in them, she said, and
still look completely elegant.
STYLE & FASHION
A Cure for the

Packers Plight
BY JAMIE PALLOT
f there were a Freudian

term for the way I feel before having to pack for a
trip, it would be kofferkrankheit (suitcase-sickness). My condition can perhaps
be traced to a couple of traumatizing incidents in my early manhood: when an editor at the Milan
shows let his gaze linger over my
outfit, then sniffed last season?;
a chilly night spent in a hiking
shelter in northern Thailand, my
sleep-deprived brain cycling
through all the warm, woolly
items Id left at home. Whatever
the source of my infirmity, its
textbook definition would read:
acute anxiety caused by trying to
fill a bag with the exact combination of items to ensure an optimum wardrobe while traveling.
My angst levels were spiking
as I contemplated a marathon trip
last spring. I was to spend three
weeks in Vietnam with a chef
friend on a food-research mission
before flying to Italy for a romantic interlude. Then I was joining a
three-day birthdayfest in Berlin,
after which I would spend a week
walking Spains Camino de Santiago pilgrimage trail from San Sebastian to Bilbao. Next, 10 days
ransacking Basque Country with a
band of culinary crusaders, followed by a London detour, which
included lunch in the membersonly dining room at the Houses of
Parliament (dress code: theyll let
you know when youve broken it).
If its exhausting just reading
that itinerary, think how depleting
it was to pack for itespecially
given my self-imposed single-suitcase allowance. Yet, I made it
through the trip without any major
breakdowns. More important, over
the course of several conversations
with fellow travelers along the way,
I learned I wasnt alone. Almost everyone hates to pack; and they hate
it in ways that go straight to the
core of their being. As Tolstoy
might have put it: Every happy
packer is alike; each unhappy
packer is unhappy in his own way.
Below, some advice from seasoned
travelers, happy and otherwise.
Plan, Dont Panic

There may not be a single best
way to pack, but leaving it until
the last minute is certainly the
worst. Dont pack the night before
you leave, said Craig Markham,
director of marketing for Firmdale
Hotel Group, which owns the
Crosby Street Hotel in New York
and the new Ham Yard in London.
Do it at least 24 hours ahead, then
take a second look the next day. A
good packer will pull something
out; a bad one will put more in.
Check, Please
Its hard to resist the allure of being a carry-on crusader, striding
past the sorry hordes at baggage

claim. But if youre away for more
than a few days, youre bound to
hit the worn-it-already wall, which
can only be fixed by buying more
stuff. George Esquivel, the Los Angeles-based shoe designer and creative director for Tumi, always
checks at least one bag: Most of
my travel is for work, so I need to
look my best, and that means having enough possibilities. Trust me:
Even if youre traveling for pleasure as I was, the time you spend
waiting for your bag will be made
up for by the luxury of a few more
options when dressing for dinner.
Mix High and Low

Try to balance luxury items that
make you feel good with massmarket staples; people will notice
and appreciate the high-end
pieces, and you wont stress about
the wear and tear on the other
stuff. My go-to combination is a
cream Jil Sander cotton poplin
jacket with a pair of J. Crew chinos. Theyre close enough colorwise to pass for a suit, and you
can put the chinos through all
manner of laundry facilities without worrying theyll get ruined.
Go With What You Know

It sounds obvious, but your first
step should be to pull out your favorite piecesthe ones you wear
all the time and feel confident in
and select two or three that are
appropriate for where youre going. A few people I spoke to fessed
up to MPPD, or Multiple Packing
Personality Disorder: filling a bag
with things they rarely wear at
home but think will work abroad.
Steven Learner, founder and creative director of New Yorks Collective Design Fair, recently stocked
up on polo shirts for a 14-day slog
to Zurich, Basel, Milan, Venice, and
London. Theyre not usually part of
his repertoire, but he reasoned
theyd work both casually and as
more formal attire under a jacket
for meetings. They did neither. I
felt like a schlump, he said. I
wasnt that comfortable, and neither did I feel properly dressed.
Crossover Dreams
Youll get more mileage out of
clothes that bridge performance
and designer wear, like my beloved Arcteryx Veilance Field
Jacket. It has enough pockets to
carry everything I need for flying,
from documents to iPad Mini to
sleep mask; its completely windand waterproof; and its slick
enough to take bar-hopping on a
spring night in Trastevere.
Stow Your Secret Weapons

One thing Ive found indispensable
is a multi-compartment Dopp kit,
which unzips to become a hanging
medicine cabinet. On this recent
trip, I also discovered Castaner espadrilleslight and flat enough to
make packing a breeze but smart
Illustration by Vincent Mah; F. Martin Ramin/The Wall Street Journal, Styling by Anne Cardenas
Even seasoned travelers can seize up

with anxiety when its time to
mastermind a suitcase strategy. Here,
seven lessons from the road
HES A (WELL-PACKED) TRAVELING MAN // THE TOOLS FOR HAPPY TRAILS

The smartest footwear
choicea slip-on that can
be both casual and
polished. Gommino Driving
Shoes, $445, tods.com
Mesh packing cubes keep

all contents organized.
Nylon Journey Packing
Cube, $45, tumi.com, Dry
Pique Cotton Short Sleeve
Polo Shirt, $23, uniqlo.com
A bag that turns into a

makeshift medicine
cabinet with a single zip.
Spacepak Toiletry Bag,
$42, flight001.com
Tough but stylish, this

suitcase has a helpful built-in
mesh divider. Topas Cabin
Multiwheel Iata Suitcase,
$980, rimowa.com
Beautiful, wrinkle-free shirts,

the result of a specially
finished cotton. William
Check Classic Fit Traveller
Shirt, $115, us.thomaspink.com
Worth the space: a

handheld steamer that
can freshen up any
garment. Ultrasteam
Steambrush, $40,
rowentausa.com
enough to wear on the town in a

pinch. Mr. Markham swears by his
Rowenta steamer; its ability to dewrinkle anything on the spot compensates for the space it takes up.
For art dealer Edward Nahem, its
a utilitarian yet chic Brunello
Cucinelli vest with multiple pockets for phone, passport, glasses,
etc. Mr. Esquivel uses Tumi packing cubes to keep things like Tshirts and underwear separately
organized, and to quarantine dirty
laundry.
Worn with a good tailored

jacket, inexpensive chinos can
get you through several chic
dinners and drinks. Slim
Essential Chino, $70, jcrew.com
Learn to Love the Laundry

On an extended trip like mine,
washing your clothes as you go is
a necessity. But sometimes, it can
lighten things up in other ways. In
Naples, to avoid exorbitant hotel
laundry fees, I dropped my clothes
off at a neighborhood lavanderia.
When I wandered over later to see
if they were ready, the proprietor
told me to check for myself, gesturing toward the street. Puzzled,
I stepped back outside and saw my
belongings spread out on a row of
Double-duty at its best:

a smart tweed blazer
that reverses into a field
jacket. TT Reversible
Wind Stretch Storm
Jacket, $4,995,
loropiana.com
drying racks on the sidewalk. I began to protest; all my precious

stuff, hanging out for all the world
to see? Then I caught myself: the
owner was grinning, proud of her
handiwork; the Neapolitan sunshine was bathing the street in a
rosy glow; and a cafe next door
beckoned with the prospect of a
killer caffe freddo. I took a deep
breath, returned the smile and felt
my anxietypacking-related and
otherwisedissolve in the spring
breeze blowing off the bay.
ADVENTURE & TRAVEL

ROAD WARRIOR
In Travel, Let Fate

Fill In the Details
20 ODD QUESTIONS
Francis Ford Coppola

THE STORY OF what got Francis Ford Coppola into
the hotel business is one of a simple plan that became complicated. It started with the making of his
Vietnam War epic, Apocalypse Now, released 35
years ago this week. Though shooting in the jungles
of the Philippines pushed Mr. Coppola to his limits
psychologically and financially, he nonetheless grew
attached to the setting. When you work or stay in
a location for a long time, as I did, you fall in love
with it, said Mr. Coppola, now 75. David Lean,
when he made Lawrence of Arabia, couldnt bear
to leave the desert. Well, I felt the same way about
the jungle.
He later considered buying a nearby island, but at
the urging of his wife, Eleanor, found something
closer to the U.S.a remote, rundown lodge in Belize. I just wanted to have a place to go off in the
My first big travel experience was: a
road trip from the East Coast to
the West Coast. I may have been
11 or 12. I remember somewhere
in the middle, we stopped at an
A&W Root Beer stand, something
Id never seen before. There was a
girl working there, probably 14
years old, in her A&W clothes and
hat. She had jet-black hair and
was the most beautiful girl Id
ever seen. She looked like Snow
White all grown up.
The most underrated destination is:
Ireland. Its a beautiful country,
and the people are extraordinary.
They have such a wonderful literary tradition, one of warmth and
humor. Also, Irish ice cream is
among the best in the world,
which no one knows.
The first time I visit a city I: like to
book one of those tour buses that
stop at all the hotels picking up
guests that signed up, and then a
guide talks you through all the areas of the city. The second day I
like to go with a car to the areas I
found interesting.
My favorite souvenir is from: Paris. I
dont have many souvenirs, but I
remember when we first bought
an apartment there about 25 years
ago. My kids were all thrilled, and
they ran out along the Seine, and
Sofia came back with a little Eiffel
Tower. It made me think of that
wonderful Alec Guinness movie,
The Lavender Hill Mob, where
they attempt to smuggle gold disguised as miniature Eiffel Towers,
some of which accidentally get
sold to a bunch of schoolgirls.
They then have to run around try-
jungle and write, he said.

Thats not what happened. As the Coppolas improved the property, they needed caretakers. Guests
were inevitable. If you say yes enough, he said,
youll find yourself in the hotel business. In 1993,
his Blancaneaux Lodge opened to the public. Over the
next 21 years came the Turtle Inn in Belize; La Lancha on Lake Petn Itz in Guatemala; Jardn Escondido in Buenos Aires; and Palazzo Margherita in his
ancestral village of Bernalda, in southern Italy.
All exude casual luxury, focus on great food and
wine, and reflect Mr. Coppolas love of film. Palazzo
Margheritas salon was inspired by the movies of
Luchino Visconti; ceiling fans in Blancaneaux Lodge
came from the set of Apocalypse Now. Even if Mr.
Coppola didnt quite end up with his ideal writing retreat, he got something bettera great tale to tell.
ing to buy them back. So, I have

this little 10-inch [25-centimeter]
Eiffel Tower, and when I see it I
always have a laugh.
On weekends I love to: stay at home
in Napa, look out at the little
birds and animals that visit me,
and admire the trees.
One of my most memorable trips
was: when George Lucas invited
my whole family to go across Canada with his family on the Royal
Canadian Pacific train. He rented
the whole train. We went from Toronto to Vancouver in these four
or so carssleeping cars and dining cars, with wonderful service.
The trip itself had three phases of
escalating beauty and grandeur.
The first third heading west was
absolutely beautiful. Then the second part, across the plains, was
spectacular. The final third,
through Banff and on to Vancouver, was beyond spectacular.
One of the most important business
lessons Ive learned came from: Fred
Astaire. He once told me that
when he was younger, he sold the
right for people to have Fred
Astaire dance studios. The schools
had nothing to do with him; they
just used his picture and his
name. And he told me that was
one of the worst decisions he ever
made. If youre going to make
wine or open a hotel, youre not
just selling your name, you have
to be personally immersed in it
and know what youre offering
people under your auspices.
My favorite luggage is: Ghurka, a
line of very beautiful leather
[goods] made by a wonderful

American company. I wont give
my bag up. My wife is always saying, Well, why dont you get a new
rolling bag? But I love this one.
What makes a hotel great is: sort of
like what makes a great wine; its
much more than the fruit you
drink, and the bottle and the label. Its the story connected to it;
the context and the history. A hotel is made great by the guests
who stayed there 100 years ago,
and all the detail and personality
that developed over that time.
The Hotel Metropole in Hanoi has
a wonderful story. Somerset
Maugham stayed there.
I still have: my old VW Westfalia.
It is like a little camper, but done
beautifully within a Volkswagen
bus. They were ingeniously supplied with a refrigerator, a stove
and several beds that can fold up,
and a hammock below a pop-up
roof. I used to like to go off by the
beach with my little boys in it. I
wrote while I watched the kids.
The ultimate luxury is: traveling
with family. My family is spread
around in different places, and
travel means we can get together
with the kids and see the grandkids and have time with them. At
a certain point in your life, you
get the idea that if you buy a new
car, its a thrill for about a week.
After a while it no longer continues to give you that pleasure. Material objects are very short lived,
but a memory with your family
lives forever.
Edited from an interview
by Matthew Kronsberg
How often are you up in the air?

Probably three weeks in a month.
I mainly travel from Singapore to
the rest of Southeast Asia, Greater
China and Korea, along with trips
to Opera Softwares headquarters
in Europe once per quarter.
Favorite hotel?
The Conrad in Singapore. Prior to
moving to Asia, I was frequently
traveling to the region from London, and this was my hotel of
choice. It practically became my
second home. The level of service
is unparalleled. Even now that I
live in Singapore, I like to go back
to have brunch or dinner as it is
just next door to our office.
Favorite airline?
Singapore Airlines is still the best
choice for travel both in the region and the rest of the world,
though their prices are becoming
less and less attractive compared
to other airlines.
Best airline seats?
I prefer aisle seats, especially on
long-haul flights, as I dont like to
wake people up if I need to walk
to the restroom or to stretch my
legs. I also try to be at the front of
the plane, so I can get out quickly
and rush to my first appointment.
Frequent-flier program?
At the moment, KrisFlyer from
Singapore Airlines is the one I use
the most.
Favorite airport?
Changi Airport. It takes me 30
minutes from landing to walking
into my apartment in downtown
Singapore.
Preferred luggage?
I travel with a Samsonite spinner
carry-on luggage that my wife
gave me as a present. Its very
smooth and light when rushing
from gate to gate.
Packing strategies?
I pack very lightly and only take
carry-on luggage. It usually takes
me 10 minutes to pack. I fold all
items on my bed, pack my shirts
in special bags that my tailor
gives me so they dont crease,
place trousers at the bottom,
shirts in the middle, rest at the
top ... and I am ready to go.
Which travel apps do you use?
Google Maps is my essential for
directions.
Whats your best travel advice?
For leisure travelers, my advice is
not to plan excessively. The best
discoveries are made getting lost
walking in alleys and meeting
with locals. Its good to have a
master plan, but let chance and
Opera Software
Chad Keig (Coppola); Aaron Joel Santos for The Wall Street Journal (hotel); Getty Images (Astaire)
MOB SCENE
Clockwise from left:
Francis Ford Coppola at
his Inglenook winery in
Napa Valley, Calif.; the
Hotel Metropole Hanoi;
Fred Astaire; a Ghurka
Cavalier bag.
FABRIZIO CARUSO is Opera Softwares senior vice president for

Asia.
The Singapore-based Italian
spoke with the Journal about fussfree packing, chic Shanghai bars
with skyline views and undersea
fine-dining in the Maldives.
fate fill in the details.

How do you stay fit while traveling?
I try to go to the hotel gym and
swimming pool whenever I can,
which is not very often, as traveling for work usually means that my
schedule tends to be quite packed.
Best travel experience?
A week at the Conrad in the
Maldives with my wife. It is as
close as it gets to heaven on
earth. One of their restaurants,
Ithaa, sits five meters underwater,
which means you can have a sixcourse menu while being surrounded by sharks, manta rays
and all sorts of tropical fish.
What is your worst travel experience?
A weekend in Batam [Indonesia]
with my wife, to try to escape
from the hustle and bustle of the
city. It was so bad we decided to
leave earlier than planned.
Whats left on the bucket list?
Despite having traveled to so
many places, there are yet so
many more to see! My top three
would be: Bhutan, the place with
the highest happiness index in the
world; Machu Picchu for the mysterious Inca ruins; and Belize to
dive in the great blue hole.
Favorite city?
It is difficult to pick a favorite as
each city gives different sensations and moods. I like London,
where I lived for seven years, for
its charm and beauty, but also for
the fact it is so cosmopolitan. It
really feels like one can discover
the whole world in London.
Favorite restaurant/bar?
The iconic M on the Bund and
Glamour Bar in Shanghai are
among my favorites for the great
food and cocktails and impressive
views of the Shanghai skyline.
Loewy and Skye in Jakarta tops
my list, and M Cafe in Manila is a
must-go on Thursday nights.
Which city has the best taxis?
Tokyo probably has the best taxi
drivers, so polite and knowledgeable. Despite my many visits
there, I still get impressed by
doors that open automatically.
Edited from an interview
by Mark Lean
EATING & DRINKING

ON WINE: WILL LYONS
A Hop to Scotch Whisky Country

IMPISHLY EXCITING is perhaps the
perfect way to describe a traveler
journeying through Scotch whisky
country in midsummer. With days
that draw out long into the evening, mild weather and wild, highmountain beauty, its not difficult
to see how a generation of Romantics fell for the Highlands. The
A9 runs through its heart: Once
past Perth, it approaches the middle of Scotland, then swings
northward past Loch Garry, climbing more than 300 meters to the
northern shores of Loch Ericht.
At this point, whisky lovers will
crane their necks to catch a
glimpse of Dalwhinnie. By no
means the first distillery in this,
the largest Scotch whisky region, it
nonetheless stands as a landmark,
beyond which lie the mountains of
the Cairngorms and Speyside.
Unlike Islay or the Lowlands,
the Highlands are so vastmore
than half of all single malt whisky
is produced herethat its difficult to think of one overarching
defining characteristic.
One could argue that Highland
malts are characterized as big and
full-bodied. Certainly, the further
north you travel, the sweeter,
more powerful and more complex

the whisky becomes. As a rule of
thumb, the eastern Highlands produce gently peated, slightly drier
malts; Speysides are the sweetest;
and in the west, the malts are
peated but dont take on the overwhelmingly pungent, phenolic
character of Islay malts.
Which leaves the islandsnot
a category recognized by the
Scotch Whisky Regulations 2009,
but a term that whisky writer
Charles Maclean says is commonly
used by retailers and publishers.
This collection of distilleries,
which includes some of the most
picturesque spots on the Scotch
whisky trail, is made up of Tobermory on the Isle of Mull, Talisker
on the Isle of Skye, the Arran distillery on Arran, Isle of Jura on
Jura, and Scapa and Highland
Park on the Orkney Islands.
The last of these has just released a new single malt whisky,
Dark Origins, which is aged primarily in casks that used to contain
sherryhence the dark character.
Highland Park is one of my favorite single malts, so to put its new
product to the test, I visited the
whisky bar at Londons Athe-
naeum Hotel and tasted a range of

island whisky with whisky sommelier Ivo Silva.
Unlike wine, whisky appreciation takes time. A first sniff can
tell you a lot, but with time in the
glass it evolves, revealing layers of
flavor. Mr. Silva says he prefers to
leave his whisky to relax for five
minutes. For aged whisky, he uses
the scale of one minute for every
year it has spent in the barrel.

The island whiskies are obviously linked by being near the sea,
but in taste-profile they are very
different. I found Scapa, Arran and
Ledaig to be the lightest; these
could almost be aperitif whiskies.
Prophecy by Isle of Jura was powerful with a dry character. Which
led us to Dark Origins, which we
tasted beside the Highland Park 18
Year Old. It has more smoke and

there was an obvious sweet, licorice character, but I felt it wasnt
as dark or dense as its name suggested. The 18 Year Old on the
other hand was magnificent, with
smoke, vanilla and spice giving
way to a smooth finish.
The only downside is that you
have to take a long boat ride to
visit the distillery.
DRINKING NOW: THREE SCOTTISH WHISKIES WORTH SEEKING OUT

Ledaig 10 Year Old,
from the Isle of Mull
40 ($67)
Talisker 10 Year Old,

from the Isle of Skye
40 ($67)
Lively, fresh and

vibrant, with citrus
and apple notes on
the nose, Ledaig
10 Year Old whisky
is oak-aged. This
comes through on
the palate, which is a
little sweeter. With
lovely peaty smoke
and a vanilla richness,
this is good whisky.
The Isle of Skye may only

have one distillery but in
Talisker it has one of the
greats. Its 10 Year Old
whisky has a strong gold
color. A bracing, peppery,
spicy nose fills the glass
with peat smoke and
autumnal bonfires. Its a
big experience in the
mouth with an intense,
peppery finish.
Highland Park
18 Year Old, from
the Orkney Islands
100 ($168)
A bright burnished gold
in the glass, the nose
on this impressive
whisky is complex,
revealing more over
time. Orange peel,
toffee, butterscotch and
vanilla all lie on a bed of
fresh oak and a whiff
of peat smoke. The
finish is spicy and dry.
HALF FULL
AT HEART, the highball is a stunningly straightforward drink:

spirit topped with sparkle, plus,
perhaps, a squeeze of citrus for
good measure.
Thanks to that simplicity, the
highball is having a moment. Bars
are devoting entire sections of the
menu to this drink format
though they are finding fresh
ways to elevate the highball beyond classics like the gin and
tonic and the vodka-soda. The
growing canon of neo-highballs
ranges from drinks made with artisan sodas to pre-mixed cocktails
on tap.
Why now? Some suggest a
backlash against years of increasingly baroque and boozy speakeasy-style cocktails. Others point
to the growing taste for Japanese
whiskey.
In Japan, the highball is perhaps the most popular way to consume the spirit, according to Suntory brand ambassador Neyah
White. There, the preferred version
is a mizuwariwhiskey cut with
spring or carbonated water, a close
cousin to the Scotch and soda.
[Highballs] are smart drinks
to serve, Mr. White said. Consumers like them because theyre
affordable and relatively light on
the alcohol; bartenders love them
because they are quick to serve.
At San Francisco bar Trick
Dog, founding partner Josh Harris
credits Mr. White for bringing
highballs to his attention. Trick
Dog has added its own unique

spin, using regional sodas sourced
from the Fizzary, a San Franciscobased soda shop.
Many of the new combinations
add up to more than the sum of
their parts. Nutty oloroso Sherry
mixed with Sidral Mundet apple
soda evokes a caramel apple.
Aquavit paired with Cel-Ray celery
soda becomes an ultra-light, refreshing sipper. Bitter amaro
Averna poured with Milwaukees
Dang root beer delivers an intensely herbal flavor bomb. Often
we start with sodas and then add
a spirit, which is backwards from
how we create other cocktails,
explained Trick Dogs creative director Morgan Schick.
At Playground Bar and Lounge
in Tucson, Ariz., beverage director
Karl Goranowski turned to highballs to quench the thirst of the
600 to 1,000 guests that show up
on a busy night. After 10 p.m.,
only highballs and draft and bottled cocktails are available. The
goal: a high-quality drink at
nightclub speed, said Mr. Goranowski. But if its only three or
four ingredients, you want to get
the right ones and get the balance
right.
Of course, the streamlined
and forgivingnature of these
drinks makes them ideal for home
bartenders, too. With highballs,
said Mr. Schick, theres no way to
mess up.
Kara Newman
F. Martin Ramin/The Wall Street Journal, Styling by Anne Cardenas
Kick Into
Highball Gear
Sidral & Sherry
Deep Search Hi-Ball
Zazarac
Sidral Mundet is an apple soda from

Mexico that mixes beautifully with
nutty oloroso Sherry for a caramel
apple effect. Sidral and other
specialty sodas can be ordered from
soda-emporium.com or
sodapopstop.com.
Mr. Goranowski describes this drink, a

best-seller at Tucsons Playground Bar
and Lounge, as juicy and fun. He
scrapped tequila for smokier mezcal,
since raspberry and smoke work really
well together.
From bartender Shaher Misif, this is a

lighter take on the classic Sazerac. With
its whiskey-soda roots, it also bears a
passing resemblance to the Japanesestyle highball.
Pour 60 ml oloroso Sherry into a

highball glass, then fill glass threequarters full with Sidral Mundet apple
soda (about 90 ml). Add ice. Squeeze
juice from 1 lime wedge into cocktail,
then drop spent lime into glass.
Adapted from Trick Dog,
San Francisco
In a Collins glass, combine 30 ml

Pierde Almas mezcal, 22 ml fresh
lemon juice, 22 ml St. George
raspberry liqueur and 90 ml soda
water with ice. Stir to combine.
Garnish with a lemon twist and serve
with a straw.
Adapted from Playground Bar and
Lounge, Tucson, Ariz.
Pour 15 ml absinthe into a highball

glass, gently rotating glass to coat inside.
Spill out excess absinthe. Add 2 grams
raw sugar, 2 dashes Angostura bitters,
2 dashes orange bitters, 60 ml rye
whiskey and 3 ice cubes. Fill rest of
glass with club soda and stir to
combine. Garnish with
lemon peel.
Adapted from Highball Lounge, Boston
Clockwise from top: Jessica Norman; Marianne Majerus; GAP Photos (3)
DESIGN & DECORATING
GOING FOR THE GOLD

Beds of marigolds in the walled
garden at the Untermyer Gardens
Conservatory in Yonkers, N.Y.
Oh, Come On. Marigolds? Seriously?

Esteemed gardeners are revisiting the flower best known
as gas-station landscapingand revealing its long-obscured charms
BY CYNTHIA KLING
ot even good taste,

it might seem, can
rescue certain tools
for the sophisticated
gardener. Plastic
pots. Impatiens. Perhaps, above
all, the lowly marigold.
It can appear fakesplashy and
eager to please, with nothing to
sayuntil you get a snoot full of
its garbagey spice smell. Certainly
anyone who studied garden design
in the last 50 years learned to
avoid the marigold like the plague.
It was considered too easy to grow,
too common. Something to stick in
a gas-station island in a mindless
effort to enhance curb appeal.
Well, not so fast.
Venture through the gates of
the walled garden at the Untermyer Gardens Conservancy in
Yonkers, N.Y., this summer and
youll encounter hundreds and
hundreds of marigoldsnot apologizing for themselves, either, but
planted in bold sculptural mounds
punctuated by erect Japanese hollies. Beds averaging 2 meters
wide line the gardens canals and
travel around the mosaic reflecting pools. Given the Indo-Persian
feeling of this design, its almost
like stepping into an ancient Indian miniature painting.
So who changed the marigold
paradigm? A new generation of
gardeners who champion all
plantsparticularly those that are
strong, hardy and dont need a lot
of chemicals to thrive. People like
European gardening rock star Piet
Oudolf, who glorified Joe Pye
weed in New Yorks High Line
project, and Rick Darke, recognized globally as an expert on

grasses, who uses such plants in
his naturalistic settings.
The plants that are still around
after all these years are the best of
the bestthats why theyre here,
said Mr. Darke, who loves marigolds not only because his mother
and grandmother grew them, but
because their strong scent keeps
predatory insects away.
Still, Stephen Byrns, chairman
of the board of the Untermeyer
Gardens Conservancy, was thrown
when horticulturist Timothy
Tilghman and pro-bono adviser
Marco Polo Stufano walked into
his office and told him they
planned to cast marigolds as the
stars of the big summer display. I

had to bite my tongue. I thought
that everything we were doing
would be uber-sophisticated, and
here Timothy and Marco were
suggesting something so pedestrian, said the architect, who apparently hadnt gotten the memo
on the new-new gardening style.
He had reason to be concerned.
After almost 70 years of neglect,
and attacks by vandals and invasive weeds, the walled garden
characterized by intersecting waterways, sculpture and incredible
plantingshad only recently reclaimed its former glory, thanks to
a project put together by the Conservancy and the City of Yonkers
to redo the entire 17-hectare es-
tate. People were visiting again

and Mr. Byrns didnt want to undo
progress. But Timothy and Marco
were the experts, so I thought,
what the heck, he said.
Turns out that Messrs. Tilghman and Stufano knew exactly
what they were doing. Marigolds
are important to Latin, Indian and
Eastern cultures, says Mr. Tilghman. The duo particularly liked
the idea of using them for a public
garden in multi-culti Yonkers.
Recontextualizing such a devalued flower took planning, however. Mr. Tilghman and his gardener, Jessica Norman, chose 13
different marigold varieties such
as Janie, Inca II, Discovery and
Cresta to get a range of colors,
OVERLOOKED LOOKERS // OTHER BANAL BEAUTIES THE PROS LOVE
DAY LILY
When I was brand new, I
killed everything. Then I
read that day lilies were
tough and easy. I ordered a
bunch, stuck them in the
ground and they were so
happy, sexy and upfront, in
the most ravishing colors.
Ive grown them for 53
years but a 5-year-old could
do it.
Sydney Eddison,
author of Gardening
For A Lifetime
QUEEN OF THE PRAIRIE

It grows 6 to 8 feet [1.8 to
2.4 meters] tall, robust, very
reliable, with a fluffy pink
flower in early summer that
turns chestnut brown. I like
to pair it with Joe Pye
weed and flat asters, other
competitive plants that
wont push each other out.
Garden designer
Piet Oudolf, who
masterminded the
landscaping of the High
Line in New York City
BEGONIA
At my own house this
summer, I married pink
begonias with purple salvia,
backed by eggplants.
[The mix] is a real showstopper. Begonias come in
so many colors and can tolerate full shade to sun. I
love em.
Paul Keyes, landscape
designer in the
New York area
SUMMER PHLOX
It has a long history, like
marigolds, and its a North
American native. It can be
popped in any garden with
sun, but mine is now in
shade and its still blooming
its head off. The scent is
that of an old-fashioned
summer evening.
Rick Darke, whos
created more than
30 gardens around
the world
heights and bloom sizes, and

planted 1,500 along the canals, in
yellows, golds, reds and oranges.
When you mass them, said Mr.
Tilghman, it gives them greater
importance. A taller white variety,
French Vanilla, planted down the
middle of each bed, makes the
whole scheme sparkle.
While the snooty perennial
look has been far trendier in recent years, annuals like marigolds
have their advantages. Come August, perennials typically withdraw their color to survive the
heat while annuals are just coming into show, Mr. Tilghman said.
Consider the rose garden: lovely
in early summer, but soon the
blooms are gone and all you see
are thorned canes that look like
rebar. The dainty marigolds we
put in this spring are now proudly
displaying raucous color, he
added, when the rest of the garden is trying to go solid green.
The key to using annuals creatively, said Mr. Stufanorespected for transforming Wave
Hill Garden, in the Bronx, from a
sad mess into an arresting jewel
is to forget fads. Train yourself to
just look at the plants essential
qualities, its texture, form, height
and color, without letting the
chicness factor seep into your
brain. He often used ordinary
plants like marigolds and thistles
in unusual ways at Wave Hill.
There is nothing too common, he said. You have to look
at a plant with fresh eyes. What is
it really about? What can it do for
me? I tell people to think of flowers as a great big box of Crayola
crayons, he added. See what you
have. Dont rule anything out.
MANSION
LONDON BID Real-estate agency Knight Frank

held an event in Hong Kong to sell units in
the Neo Bankside condo building, above, in
London. The penthouse unit, at left, is listed for
$33.3 million.
Red-Carpet Real Estate

To sell condos an ocean away, developers travel to Hong Kong and throw lavish events
in luxury hotels; lawyers, interior designers are standing by
n real estate-obsessed Hong Kong,
the launch of a new luxury condo
can be a red-carpet event with local
celebrities and paparazzi.
In late June, photographers and
gawkers gathered outside a trendy Chinese
restaurant to snap photos of Archie Kao,
the TV actor best known for his role in
CSI: Crime Scene Investigation, and Godfrey Gao, a top fashion model. Paying their
appearance fees was Canadian developer
Westbank Corp., which came to Hong Kong
to presell condos at Vancouver House, a
new luxury building planned in Canada.
The Chinese, whether theyre in Vancouver, from Hong Kong or from China,
have always been important to us, said Ian
Gillespie, Westbanks president and founder,
who estimates that 75% of his sales are to
ethnic Chinese. On the first day of the companys Hong Kong event, 10 units were sold.
Turning to celebrities for extra buzz is a
sign of the growing clout of Hong Kong as
an international real-estate marketplace. As
the citys property prices continue to soar,
investors there have shifted their focus to
properties overseas. As a result, developers
are ramping up their sales efforts with stylish eventstypically at luxury hotelsto
promote their latest projects. And while
London has been the largest magnet for
Hong Kong buyers, cities in Australia and
the U.S. are increasingly popular.
Lawrence Chu, a 34-year-old Hong Kong
fund manager, bought two units at Vancouver House, a building with a bold, twisting
design created by Danish architect Bjarke
Ingels. Mr. Chu, who attended high school
in the Canadian city, bought a one-bedroom
and a two-bedroom unit, spending about
$2.014 million. The purchases, he said, will
help him diversify his investments and
serve as a pied--terre for when he visits
the city. I heard about Vancouver House
before the sales started, Mr. Chu said. I
knew the story, and the developer is well
known for nice buildings.
Mr. Gillespie said 25% of the units in the
building have been allocated for buyers in
Hong Kong; another 20% are targeted at
buyers in mainland China. Condos there
range from $366,000 for a studio to over
$18 million for the penthouse unit.
Hong Kongs heated property market,
marked by stratospheric prices and high
taxes, is driving some locals to shop elsewhere. Hong Kongs residential prices are
Clockwise from top: Knight Frank (2); MESA Development; Barratt London; BIG-Bjarke Ingels/Luxigon;
BY JASON CHOW
MIAMI I.P. Global helped pitch condos in NINE,

where units start at $390,000.
VANCOUVER Developer Westbank Corp. came to Hong Kong to presell condos at Vancouver House,
in rendering above on the right, which will have units ranging from $366,000 to over $18 million.
SUBURBAN LONDON Developer Barratt Homes held an event in Hong Kong to pitch its Greenland
Place project, rendering above. The units range from about $589,000 to $1.178 million.
among the worlds most expensive, fetching
as much as $2,500 per square foot. In addition, the government has imposed a stamp
duty of up to 8.5% on real-estate purchases
that arent an individuals primary home.
Many wealthy Hong Kong buyers say
they want residences overseas for their
children who plan to go abroad for school.
Still other buyers are looking for a rentalproperty income.
Mimi Capas, head of international marketing at property agency Knight Frank in

Hong Kong, said that in the past year, she
has brought about 30 projects, almost all
from London, for weekend sales events, at
which as many as 50 units have been sold.
Anything at 600,000 [$1 million] or less,
they have no problem buying without thinking too much, said Ms. Capas.
In late June, U.K. developer Barratt
Homes teamed with international property

firm JLL to pitch Greenland Place project,
slated for completion in suburban London
in late 2015. Barratt set up shop in a hotel
conference room for a weekend. In addition
to eager selling agents, lawyers were present to help sign deals on the spot. Interior
designers were also on hand to help select
finishes, and rental agents were available to
discuss the condos as investment properties. Prices ranged from $589,000 for a
540-square-foot, one-bedroom condo to
$1.178 million for a two-bedroom unit.
Gerald Thomas, sales director of East
London at Barratt Homes, said about 10% to
15% of the companys total sales are derived
from overseas events, which typically cost
100,000, or $168,000, each.
Critics say these glitzy Hong Kong
events that sell property in London shut
out local British buyers. Late last year,
many developers, including Barratt, pledged
to launch sales in their home country before going abroad.
Hong Kong-based I.P. Global made its
first foray into the Miami market recently,
selling units of NINE, a building located
downtown with condos ranging from
$390,000 to $1.2 million. Tim Murphy, the
companys chief executive, said about 10%
of his clients this year have purchased more
than one property, adding that wealthy
Asians consider real estate an important
part of their overall investment strategy.
Mr. Chu is one of them. In addition to
his Vancouver House purchase, he has a
condo apartment in Londons Notting Hill,
bought last year for about $1.68 million. He
first learned about the project, called Portobello Square, after visiting a sales event
at a Hong Kong hotel last year. Quite a few
of my friends are buying, he said. The developers are going to where the money is.
MANSION
INSIDE STORY
A King, a Nobel Laureate

And the Hulk
Once an entertaining space for French royalty, a townhouse outside Paris now houses
a gallerist and his funky collection of art, furniture and comic-book-inspired artifacts
he same family has run the
Paris ceramics gallery Lefebvre
& Fils since 1880, selling antique and modern sculptures,
and decorative objects. But
when Louis Lefebvre took over the family
business in 2010, he made a change, shifting the gallerys focus away from historic
pieces and instead showcasing edgy, contemporary work.
The same dichotomy of old and new is
evident at Mr. Lefebvres townhouse in Versailles, the historic town just outside Paris.
With an off-white stone exterior and tall
windows, Mr. Lefebvres dwelling is representative of classical residential architecture in Versailles. It also has a long history:
In the late 18th century, King Louis XVI, living at the Palace of Versailles down the
street, gave it to his younger sister lisabeth, who used it and an adjacent building
(once another wing) as a salon. In 1946,
when the home was functioning as an orphanage, its residents included a young Elie
Wiesel, according to Chroniques de Versailles, a book by architectural author
Denis Lemari.
None of that history weighs down the
4,000-square-foot, seven-bedroom homes
beige-and-white interior. It houses Mr. Lefebvres vast collection of modern art, furniture and comic-book-inspired artifacts,
resulting in slightly cluttered, country-living-meets-bachelor-pad vibe. Theres a lot
[more objects] in warehouses, but I like to
move things around, said Mr. Lefebvre, 49,
who sports an aging rock stars grayish
mane and whose gallery recently hosted
shows by New York-based artists Jennie
Jieun Lee and Robin Cameron.
In the late 18th century,

King Louis XVI, living at the
Palace of Versailles down the
street, gave the home to his
younger sister lisabeth, who
used it and an adjacent
building as a salon.
The interiors of the home are plain, with
white walls and light-brown flooring serving as a canvas. In a small waiting room
just off the second-floor living room,
framed original American comics that Mr.
Lefebvre began collecting as a teenager surround a sculpture of a human figure
slumped over a table.
Littered, almost haphazardly, in the adjacent living space are pieces like a horseshoe-shaped chair made of crochet material
by Dutch designer Marcel Wanders; a neon
light-emitting table that once sat in Le Rgines, a Parisian nightclub; and a steel
armchair created by Ron Arad, the sculptordesigner. Just dont expect to be comfortable, Mr. Lefebvre quipped as a guest settled into Mr. Arads piece, which was akin
to settling into a rocky rowboat.
Inside an unused fireplace in the dining
area, which comes with parquet wooden
SOMETHING OLD, SOMETHING NEW 1. In the living room, objects

include a crochet chair by Marcel Wanders and yellow sculpture by
Xavier Veilhan 2. Louis Lefebvre 3. In the 18th century, King Louis XVI
gave the home to his sister lisabeth.
7
Julien Fernandez for The Wall Street Journal (7)
BY KRISTIANO ANG
flooring similar to that in Versailles Palace,

sits a bust of the Incredible Hulk that was
issued by Marvel Studios. The nearby
kitchen, which overlooks the garden, is
equipped with a 19th-century butchers table and Sesame Street-themed cookie jars,
which Mr. Lefebvre said were auctioned
from the estate of Andy Warhol. Some of
it is of high value, while some of it is of no
value, he said. Ive always liked to collect
and my passion met my work.
The heart of Mr. Lefebvres property is
the approximately 0.18-acre (0.07-hectare)
garden, a slightly unkempt space with everything from hyacinths to cypress trees
sheltering the home from outside view. The
COME TOGETHER 4. The dining room includes a table by Martin Szekely and
pink light by Johanna Grawunder 5. Fornasetti plates 6. The kitchen 7. In the
waiting room, framed original American comics surround a sculpture by Atelier
Van Lieshout.
plot is overlooked by the three-story main
building and two slate cottagesone of
which Mr. Lefebvre uses for storage and the
other that is in ruins.
When Mr. Lefebvre bought the townhouse
for about $2.2 million in 2006, he says that
he was oblivious to much of the homes history. He had merely been looking for a larger
home in Paris but couldnt find anything
suitable within his budget. Personal history,
however, played a role. The previous owner
was a longtime friend of Mr. Lefebvres, and
he often visited as a teenager.
Since then, Mr. Lefebvre has spent about
$270,000 on refurbishments. The mud-andsand patio leading to the garden was paved
over with limestone and some walls were

restored. He also knocked openings into the
houses stairwell to let in natural light. His
two sons, Lucas, 17, and Maxence, 8, visit
most weekends and have individual bedrooms set aside for them.
For many years, Mr. Lefebvre didnt live
in the home, as it was inhabited by his thenromantic partner. Now that he is engaged
and permanently moved back into his residence, Mr. Lefebvre plans to spend another
$270,000 to $400,000 on improvements. He
also anticipates that his children will be
there more often in the coming years.
Theres a lot of good vibes in the
house, he says. Its a happy house.
MANSION
FOREIGN CORRESPONDENT
Londoners Cash In and Move Out

Some homeowners in the citys prime area are selling their properties and
buying in the country, where they get more square footage for less money;
theres often enough cash left over for other family expenses
COUNTRY
$9.258 MILLION A contemporary house in Walton-on-Thames, 30 kilometers southwest of central London, measures about 9,500 square feet.
PRIME LONDON
BY RUTH BLOOMFIELD
From top: Strutt & Parker (2); Fine and Country/Knight Frank (2)
roperty buyers in the

U.K. are minding the
gap.
A record divide between prices in prime
central London and prime country
locations is creating a stir in the
British capital, as buyers cash in
on their city pads and swap them
for country retreats.
Strong growth since 2010
means prices in prime central
London are 38% higher than at
the peak of the market in 2007,
according to research by estate
agency Savills, and stand at an average 5.8 million, or $9.8 million.
At the same time, high-end country homes, which were hit hard by
the downturn and have been
slower to recover, are 5.6% below
peak prices.
There is an incredibly wide
gap between prices, which widens
the further out of London you are
prepared to go, said Lucian Cook,
director of residential research at
Savills. The people who have the
real advantage are those who
make the wholesale lifestyle
choice and move beyond Londons
commuter zone.
London homeowners have noticed the price differential. A study
by Hamptons International published in June reported a 75% annual increase in Londoners buying
outside the capital. In the past year,
more than $25 billion was spent on
44,000 propertiesthe highest volume and value since 2007.
Some of these buyers are exiting London to avoid a 7% stamp
duty levied on homes purchased
for more than 2 million ($3.37
million) and are opting for less expensive properties in the country.
There are also fears that a new
mansion tax may be introduced
after next years general election.
The strength of the pound also
has made real estate more expensive for overseas buyers, encouraging them to look for better
value outside London.
$9.174 MILLION In Belgravia, the heart of prime London, a three-bedroom apartment with 2,057 square feet is available
in Eaton Place.
COUNTRY
PRIME LONDON
$10.9 MILLION Built in 1586 and located 290 kilometers

from prime London, Brereton Hall measures more than
27,000 square feet, and comes with 46 hectares of land.
Current listings illustrate just
how big the London-country divide has become. Brereton Hall,
one of Englands finest historic
houses, is on the market for $10.9
million. The house, built in 1586,
is in the county of Cheshire, about
290 kilometers from central London. Behind the imposing castellated facade is living space total-
$11.1 MILLION A one-bedroom apartment measuring 989

square feet is located in one of the citys most prestigious
buildings, One Hyde Park in Knightsbridge.
ing more than 27,000 square feet.

Alternatively buyers could pay
$11.1 million for a 989-square-foot,
one-bedroom apartment in one of
prime central Londons most prestigious buildings, One Hyde Park
in Knightsbridge.
In another example, a buyer
could pay $9.258 million for a
9,500-square-foot contemporary
house in Walton-on-Thames, 30
kilometers southwest of central
London. In Belgravia, in the heart
of prime London, a three-bedroom
apartment that is less than a
quarter of the size is listed for
$9.174 million.
Buyers prepared to commute
from the village of Brightling, 96
kilometers southeast of central
London, could move into a

thatched cottage that dates from
1570 and is on the market for between $1.262 million to $1.338
million. It has four bedrooms and
two bathrooms in 1,832 square
feet. Meanwhile, for $1.345 million, a buyer in prime London
could get a one-bedroom pied-terre located on one of the grandest streets in Knightsbridge.
Some buyers are attempting to
keep a foot in both camps. David
Adams, managing director of John
Taylor London, said some owners
in prime London are downsizing
to a pied--terre and buying a
country house as well.
Real-estate agents believe the
relative affordability of the countryside may not last. Real-estate
agents Knight Frank recorded a
1.1% rise in the value of prime
country properties, those worth
$842,000 or more, in the second
quarter of 2014. This is the sixth
consecutive price rise in a sector
that was laid low by the recession
and brings annual price increase
to 5.2%.
Meanwhile, the significant
price growth of prime London has
been cooling off since the start of
this year. Hugo Thistlethwayte,
managing director of buying
agency Prime Purchase, says that
now that price growth in prime
London has slowed, there is less
reason to hang around in hopes
of higher profits.
But cooling off isnt the same
as collapsing, said Richard Barber,
a partner at W.A. Ellis estate
agents who sees the current prime
London scenario as a normal correction to a market that has been
flying for several years.
Nonetheless, Mr. Cook of
Savills agrees that now could be a
smart time to escape from prime
London. If you are in a mind-set
to make a lifestyle choice, he
said, I think there is as good an
opportunity as there has been
whether it is buying a bigger, better property or releasing some
cash to pay school fees or whatever else.

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A BAC O, BA HA M AS
HA R B OU R I SL A N D, BA HA M AS
Damianos Sothebys International Realty

+1 242.362.4211 | SIRbahamas.com
Damianos Sothebys International Realty

+1 242.376.1841 | SIRbahamas.com
H R I N G E , S W E DE N
L AG U NA B E AC H , C A
HM Sothebys International Realty

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PAS O ROB L E S , C A
R A N C HO S A N TA F E , C A
P ORTOL A VA L L E Y, C A
Eagle Oak Ranch.
748 acres in Paso Robles
Wine Country! Lavish
8,200 sf main residence,
2 other residences and barn/
stables. Irrigated pastures.
Encompasses 2 parcels.
Become a gentleman
farmer and plant some vines.
$12,000,000.
Linda.Wilson@
SothebysRealty.com
Located in Palo Altos most

sought after neighborhood,
this custom home melds
clean and sophisticated lines
with the neighborhoods
craftsman-style aesthetic.
Enjoy a residence in the
center of the Silicon Valley
within walking distance of
busy downtown Palo Alto.
$8,950,000. Michael Dreyfus.
Dreyfus Sothebys International Realty

+1 650.485.3476 | DreyfusSIR.com
Staked in the 1930s as one

of the prime oceanfront
locations, this property has
not been available since 1971.
Located on the point of what
was to become South Laguna
Beachs Point Place, is this
secluded 2 BR. Price upon
request. Charles Brickell.
Family compound, directly

on the oceanfront features
a 3 BR main residence,
guest house, pool and
private green courtyards.
$17,000,000-$20,000,000.
Patricia Kramer,
Eric Iantorno and
Cathleen Shera.
Pacic Sothebys International Realty

+1 858.352.7771 | SandyLaneSoiree.com
PA L O A LTO, C A
The ultimate safe haven and

a picture-perfect location to
build your ultimate beach
house on a gorgeous coastal
plateau bordering the 4th
hole of the Arnold Palmer
Signature Course at the
renowned Four Seasons
Resort Peninsula Papagayo.
$1,200,000.
Bryan Bruce.
Costa Rica Sothebys International Realty

+1 866.696.2899 | sircostarica.com
DE L M A R , C A
Since the year 1000,
kings, nobles and some of
Swedens most well-known
entrepreneurs have been
owners of Hringe Castle,
located by the sea in
Stockholms archipelago,
20 mins from Stockholm.
17 buildings, 6,000 sq m,
153,000 sq m land. WEB:
2Y3DMH. $11,700,000 US.
lennart.a@sothebysrealty.se
Sweden Sothebys International Realty

+46 (0) 8.545.80000 | skeppsholmen.se
G UA NAC AS T E , C O S TA R I C A
Beachfront home in a private

enclave at The Dunmore
Resort. This fully furnished
home offers 4,464 sf of living
space, 4 BR, 5.5 baths. Access
to resort amenities, concierge
and management services.
$8,250,000 US.
Nick.Damianos@
SothebysRealty.com
Sandy Cay. Private Island,

8 acres, 2 beaches, 6 BR,
6 baths. Gym, marina
complete with 5 boats plus
lot and dock on Man O
War Cay. Electricity from
mainland. Turn-key. Life is
less taxing offshore.
WEB: HBNGXG.
$8,000,000 US.
George.Damianos@
SothebysRealty.com
Stunning custom-built
home in prestigious Portola
Valley. Built to exacting
specifications with 7,000+ sf
of living space, it offers firstin-class infrastructure along
with the finest finishes and
amenities. The home has a
flexible floor plan with
3 levels of living space.
WEB: 81425041. $5,495,000.
Michael Dreyfus.
Wilson & Co. Sothebys International Realty

+1 805.801.3232 | WilsonandCoSIR.com
Dreyfus Sothebys International Realty

+1 650.485.3476 | DreyfusSIR.com
R A NC HO S A N TA F E , C A
S A N F R A N C I S C O, C A
Well-designed equestrian
estate with quality materials
used in its 2 residences, guest
house and spacious barn.
4 legal parcels total 24.79
private acres with riding
arena, pastures, tennis court.
Price upon request.
Cathy Gilchrist and
Clinton Selfridge.
This meticulously maintained

and highly upgraded
statement home at The
Bridges offers unparalleled
options for peaceful daily
living and grand entertaining
year-round. 5 BR, 6 full
and 2 half baths. Offered at
$3,995,000. K. Ann Brizolis.
Full floor 3 BR, 3.5 bath

co-op in classic Pacific
Heights doorman building.
Contemporary interiors, bay
and park views. Private entry
gallery and library.
3 parking spaces.
PacHtsViewCoop.com.
WEB: 0086720. $8,200,000.
Janet Feinberg Schindler.

+1 858.756.4328 | pacicsothebysrealty.com

+1 858.775.6511 / 619.519.0964 | pacicsothebysrealty.com
Sothebys International Realty San Francisco Brokerage

+1 415.296.2211 | sothebyshomes.com/sanfrancisco
SH E L L B E AC H , C A
DA R I E N , C T
R E DDI NG , C T
Oceanfront 5 BR, 5 bath

estate situated on 1 acre in
the exclusively gated The
Bluffs. Showcasing lavish
rooms, 23 ceilings, radiant
floor heat, elevator, wine
cellar, art gallery and massive
oceanfront deck. Live the
quintessential California
lifestyle! $5,950,000.
Linda.Wilson@
SothebysRealty.com
Wilson & Co. Sothebys International Realty

+1 805.801.3232 | WilsonandCoSIR.com
William Pitt Sothebys International Realty

+1 203.655.8234 | williampitt.com
WASH I N G TON , C T
M A RC O I SL A N D, F L
With sweeping Lake
Waramaug views, this
just completed exquisite
estate offers the highest
level of craftsmanship
and unmatched attention
to detail. Setting a new
standard in country living,
this 5 BR home offers luxury
appointments, 20+ acres
and pool. WEB: L149662.
$4,795,000. Rick Distel.

Superb 24 acre estate,

56 miles from New York City.
Totally renovated 6 BR,
14 room antique Georgian.
Pool; pool house with
pavilion; 2 story, 8,000 sf
car barn which can be easily
converted for equestrian use.
$5,495,000. Ginny Beasley
and Michael McKee.
Exquisitely maintained and

recently updated Victorian
built in 1886. On the corner
of one of Dariens most
desirable cul-de-sacs, this
4 to 5 BR grand dame with
finished third floor is located
close to shopping and the
train station. The best of
yesteryear blended with
todays modern comforts.
$1,275,000. Ingrid Hess.

NA P L E S , F L
Spectacular waterfront home
with amazing bay views
located walking distance t
o the beach. Gourmet
kitchen, expansive windows,
pool, spa, outdoor kitchen,
dock with boat and jet ski
lifts. $2,995,000.
Michelle Thomas.
michelle.thomas@
sothebysrealty.com
Premier Sothebys International Realty

+1 239.860.7176 | premiersothebysrealty.com
Tranquil privacy, central

location. Key West-style
home on 2.5 acres with
2 houses, pool, excellent
schools, butterfly garden,
orchid house, lush
landscaping and
concrete construction.
$1,025,000.
Michelle Thomas.
michelle.thomas@
premiersothebysrealty.com

+1 239.860.7176 | premiersothebysrealty.com
MMXIV Sothebys International Realty Afliates LLC. A Realogy Company. All Rights Reserved. 2014 Summer Landscape, used with permission Sothebys International Realty is a registered trademark licensed to Sothebys International Realty
Afliates LLC. An Equal Opportunity Company. Equal Housing Opportunity . Each ofce is Independently Owned and Operated except ofces Operated by Sothebys International Realty, Inc.
S A R AS OTA , F L
HONOLU LU, H I
Villa Solstice, one of the
Gulf Coasts most amazing
homes. Experience this
private tropical resort set on
two waterfront lots providing
incredible water views.
Complete with a lagoon pool,
pool house, boat dock and
fishing pier. $13,800,000.
Cheryl Loeffler and
Joel Schemmel. Cheryl.
Loeffler@sothebysrealty.com
CARMEL, IN
Magnificent ocean front
estate with exceptional
attention to detail. Built
on 13,056 sf of land, the
single level home features
4 BR suites, lap pool
with spa and tropical
gardens. $11,499,000.
Kelly Allen and Anela Chung.
Extraordinary estate nestled

on the 15th hole of the Pete
Dye Bridgewater Club Golf
Course on private Whistling
Lane. Lavish details include
breathtaking views, soaring
ceilings, covered veranda,
and elaborate woodwork.
$1,999,000. Jay ONeil.

+1 941.302.9674 | Premiersir.com/id/KQ4BYR
List Sothebys International Realty

+1 808.306.7005 / 808.864.2110 | listsothebysrealty.com
Encore Sothebys International Realty

+1 317.848.0008 | encoresothebysrealty.com
I N DIA NA P OL I S , I N
B R E WST E R , C A P E C OD, M A
C A P E C OD, M A
This waterfront home offers

the ultimate coastal living
experience with unparalleled
180 views. Exceptional
design for entertaining.
Home offers superior
craftsmanship and private
grounds with stairs to the
sandy beach. A special
opportunity. $3,650,000.
Gayle Tambolleo.
gayle@oldcape.com
Can the words rustic, modern

and exquisite co-exist in the
same descriptive? Apparently
so. Elegantly nestled into an
exclusive, wooded 2+ acre
parcel, this home stands,
timeless, and perfectly
matched to its natural
surroundings. $2,895,000.
Jonathan Eriksen.
Encore Sothebys International Realty

+1 317.590.1869 | encoresothebysrealty.com
oldCape Sothebys International Realty

+1 508.776.2580 | oldCape.com
N E W YOR K , N Y
N E W YOR K , N Y
Newly completed custom

home in the Grand View
Association of East Orleans.
Five en-suite BR and
4,227 sf of glorious living
space affording saltwater
views. Association landing.
Easy walk to Nauset Beach.
$2,750,000. Jim Trainor
and Eric Ehnstrom.
Eric@oldCape.com
oldCape Sothebys International Realty

+1 508.360.2244 | oldCape.com
N E W YOR K , N Y
115 Mercer Street. Trophy
Soho Penthouse duplex with
striking downtown views.
Features 2,741 sf interior,
2,500 sf exterior, 3 BR,
3 baths. WEB: 0019577.
$10,595,000.
Christopher S. Poore
and Eyal Dagan.
One57 New condominium,

1,988 sf, 2 BR, 2.5 baths, 107
ceilings, open city and river
views. 5 star hotel services,
garage, pool, fitness center,
spa and more. WEB: 0019454
$11,995,000.
L. Summers and G. Devlin.
Ultimate Penthouse
50 East 89th Street.
Surrounded by panoramic
views of Manhattan.
Approximately 1,450 sf of
landscaped wrap terrace.
LR with floor to ceiling
doors/windows, 11 ceiling,
fireplace, 3 BR, 3.5 baths.
WEB: 0019155. $9,500,000.
Louise C. Beit.
Sothebys International Realty East Side Manhattan Brokerage

+1 212.606.7789 / 212.606.7729 | sothebyshomes.com/nyc

+1 212.606.7676 / 212.606.7712 | sothebyshomes.com/nyc

+1 212.606.7703 | sothebyshomes.com/nyc
N E W YOR K , N Y
N E W YOR K , N Y
C HA R L E S TOW N , R I
Live luxuriously in this corner
2 BR, 2 bath penthouse
condo with a private 567 sf
terrace boasting dramatic city
views at the Onyx-Chelsea.
Full-service boutique
building with full-time
doorman. WEB: 0137291.
$2,200,000. Glenn Norrgard
and John Tenore.
Estate condition classic eightroom home on Madison

Avenue and 82nd Street.
High floor residence in an
intimate co-op. Grand room
proportions and multiple
exposures yield breathtaking,
protected views of the skyline.
WEB: 0137225. $5,500,000.
Chris Casey.
Vintage oceanfront cottage

on almost a half-acre.
Pine floors, brick fireplace,
4 BR, 2.5 baths. A magical
presence front row on
Central Beach. Enjoy
gorgeous private beach, pond
access for boating, tennis,
ballfield, and playground.
$3,195,000.
Raymond A. Mott.
Sothebys International Realty Downtown Manhattan Brokerage

Sothebys International Realty Downtown Manhattan Brokerage

Mott & Chace Sothebys International Realty

+1 401.741.3596 | mottandchace.com
WA K E F I E L D, R I
K IAWA H I SL A N D, S C
JOH N S ON C I T Y, T N
An oasis in beautiful East
Tennessee. Historic southern
4 BR, 4 bath home on 2.5
acres is the perfect country
setting within minutes to the
city. Pool, tennis court, 3+ car
garage and mountain view.
Price upon request. Loretta.
Trayer@MountainSIR.com
Indigo Park offers 16 LEED

Certified, sustainably built
homes with long marsh views
and innumerable luxurious
amenities available to owners.
2-5 BRs available. Each home
includes Kiawah membership
opportunities. Prices upon
request. Mid Rutledge.
Historic Edgewood Farm

is situated in a private
compound on almost five
bucolic acres surrounded by
stone walls, all within walking
distance to the charming
town of Wakefield. 5 BR,
gourmet kitchen, 4.2 baths,
9 fireplaces, tennis court
and skating pond make
this a truly unique offering.
$1,375,000. Mary Philbin.
Mott and Chace Sothebys International Realty

+1 401.793.1701 | mottandchace.com
Daniel Ravenel Sothebys International Realty

+1 843.345.9137 | DanielRavenelSIR.com/IndigoPark.html
Mountain Sothebys International Realty

+1 828.898.8965 | MountainNCHomes.com
M C L E A N , VA
JAC K S ON HOL E , W Y
JAC K S ON H OL E , W Y
Riverfront estate on 5.4 acres

of Virginia Gold Coast.
Barrel-vaulted domed
ceilings with 17th century
fireplace, Pelion stone floors
imported from Greece.
River Rooms floor-to-ceiling
arches overlook the Potomac.
Indoor lap pool opens to
terrace. $9,995,000.
Penny Yerks.
TTR Sothebys International Realty

+1 703.760.0744 | ttrsir.com
Bar B Bar Ranch. 72+ acres

with Snake River frontage.
This luxury lodge has direct
Teton Views, a guest home
and recreation house. At
the gateway to Yellowstone.
Moments to the town of
Jackson Hole. $24,750,000.
Spackmans & Associates.
Spackmans@JHSIR.com
Jackson Hole Sothebys International Realty

+1 307.738.8156 | JHSIR.com
In tax friendly Wyoming,

the Bar BC Ranch and Bar
BC East offer a variety of
35+acre elevated, riverfront
or meadow parcels with
Teton views, Snake River
and/or Grand Teton National
Park access. #2CQ3PY.
Prices upon request.
TomEvansRE@JHSIR.com
and Spackmans@JHSIR.com
Jackson Hole Sothebys International Realty

+1 307.739.8149 / 307.738.8156 | JHSIR.com
MMXIV Sothebys International Realty Afliates LLC. A Realogy Company. All Rights Reserved. 2014 Summer Landscape, used with permission Sothebys International Realty is a registered trademark licensed to Sothebys International Realty
Afliates LLC. An Equal Opportunity Company. Equal Housing Opportunity . Each ofce is Independently Owned and Operated except ofces Operated by Sothebys International Realty, Inc.
ADVERTISEMENT
MANSION
Distinctive Properties & Estates

UNITED STATES
Where the CEOs Are

!"#$%&'()**'
The housing markets in the U.S. with the greatest percentages of resident
CEOs in the metro workforce
Percentage of residents identied as CEOs
Median asking home price
Bridgeport-StamfordNorwalk, Conn.
1.82%
Boulder, Colo.
1.45%
SebastianVero Beach, Fla.
1.37%
Naples-Marco Island, Fla.
1.28%
Cape Coral-Fort Myers, Fla.
1.27%
Oxnard-Thousand OaksVentura, Calif.
1.21%
Fort Lauderdale-Pompano BeachDeereld Beach, Fla.
1.20%*
North Port-BradentonSarasota, Fla.
1.20%
Barnstable Town, Mass.
1.13%
San Jose-SunnyvaleSanta Clara, Calif.
1.10%
* For Miami-Fort Lauderdale metro area

Sources: Census Bureau; Trulia (prices)

$445,335
$238,900
$445,000
$249,000
$595,000
$229,000
$279,990
$457,250
$721,880
SPREAD SHEET | STEFANOS CHEN
Hail to the Chiefs

+

! " #
$569,000
#$
UNITED STATES
UNITED STATES
"#$%$& %! #% '(
%! #$% $) *++

$ !' ' '+#

,-.,,/

!

FINLAND
Luxury Villa by one of the Most Beautiful
Lakes in the World,
Saimaa, Finland for $3.2 Million
Architectural gem presented in several intl exhibitions, built in 2007, fully equipped and furnished, 3 bedrooms, 2,350-square-foot (218
m2), the whole property round 20 ac (8 ha) of
pine wood forest. 217 miles (350 km) from
Helsinki, nearest airport 22 miles (35 km).
Breathtaking views to the Lake Saimaa,
Puruvesi. Excellent for relaxing and fishing.
Area praised in WSJ 7/22/2014. Inquiries and
request for a pdf brochure.
sahuovin@gmail.com
Distinctive Properties.
List Your Property Today in
The Wall Street Journal Asia.
Call (852) 2831-2553, (65) 6415-4279 or (813) 6269-2701
Metro areas in the U.S. with the

highest concentration of CEOs have
one thing in common: rising prices
hen it comes to
real estate, many
chief executives
in the U.S. take a
sunny outlook:
Five of the top housing markets
for CEOs are in Florida, including
Miami, Sarasota and Vero Beach.
Spread Sheet analyzed data
from the U.S. Census Bureau to
identify housing markets with the
largest percentage of resident
CEOs in the local workforce. (This
census group includes legislators
as well as CEOs.)
Top spots include Connecticuts
Fairfield County and Boulder,
Colo. The markets run the gamut,
from urban centers to vacation
getaways, but they have at least
one thing in common: Home
prices are rising.
These guys didnt get to where
they are by making poor financial
decisions, said Doug Grant, an
agent with Coldwell Banker in Naples, Fla., who says sales of $2
million-plus, single-family homes
are up 83% in the first quarter,
compared with last year.
Florida is also a popular destination because there is no individual state income taxa fact that
attracts buyers from New York
and elsewhere, said Elena Bluntzer with ONE Sothebys International Realty in Miami.
Charles DallAcqua, the 59-yearold chief executive of Leading Response, a marketing-services company, moved to Sarasota, Fla.,
from Annapolis, Md., in part because it was near one of his companys call centers at the time. He
and his wife, Valerie, live in a
3,600-square-foot waterfront
Mediterranean-style home.
Some move to where the action is. Lisa Reeves, 51, the chief
executive of business-analytics
company GridCraft, said her home
in Boulder, Colo., is a real hotbed
for early-stage technology.
She and her husband, Duer
Reeves, also a tech CEO, moved to
the city from the San Francisco
Bay Area in the late 1990s in pursuit of new opportunities. Now
they live in a roughly 7,800-squarefoot contemporary home with
mountain views and plenty of outdoor activities for their children.
I think Boulder is the next
kind of Silicon Valley, said Karen
Bernardi, an agent with Coldwell
Banker who helped the couple
find their home. Prices are up 6%
from last year, according to realestate website Trulia.
In many cases, what starts as a
vacation home can become essentially a primary residence for
CEOs with the flexibility to work
remotely, said Stewart Young, regional director of Cape Cod for
LandVest.
Towns in Connecticuts Fairfield County made the list because
of the large number of finance executives who commute to New
York. Great schools and amenities
attract them, said Michelle Genovesi, of William Raveis Real Estate in Norwalk, Conn.
Mostly, though, CEOs are attracted to other CEOs, said Barbara Ackerman, a Sarasota, Fla.based agent with Coldwell Banker.
Once you please one CEO, they
refer you to the next, she said.
ADVERTISEMENT
NEWPORT, RI
MIDDLETOWN, RHODE ISLAND
WILSHIRE BLVD., LOS ANGELES, CA
Meticulous restoration of an authentic classic shingle-style carriage house

sited along the boundaries of Ballard Park refuge with beautiful woodland views.
Five bedroomsfour with ensuite bathsstone walls, bluestone terraces,
elegant mature landscaping, and gardens. Absolutely turn-key. Close proximity to
New York Yacht Club and Newport Country Club.
Oceanfront - Modern architectural masterpiece on nearly one acre at

the Southern tip of Eastons Point. Approx. 7,300 sq. ft. of dynamic design
graciously appointed with panels, moldings, stone fireplaces, coffered ceilings
and hardwoods. Replete with stunning two level entry hall, elegant living room
with stone fireplace, formal dining room, 2 bedroom guest quarters and blue
stone patio with infinity pool. Walk to the beach. Minutes to Newport.
EXCLUSIVE GRANDEUR: BEVERLY WEST RESIDENCES. A luxury collection

of 35 residences overlooking the Los Angeles Country Club and Beverly Hills.
Fully customized homes or furnished turn-key models, drawing inspiration from
the home collections of leading international designers. Beverly West is the NA
flagship of Emaar Properties, owner of the worlds tallest building. Suites from
1,700 to 8, 215 sq. ft. - among the largest of any LA luxury condominium.
$3,995,000
$6,850,000
GustaveWhite.com
LilaDelman.com http://liladel.re/395tuckerman Prices from $2.3 to over $25 million
Gustave White Sothebys International Realty
Lila Delman Real Estate International
The Beverly West Residences
phone: 401.849.3000
phone: 401.848.2101
phone: 310.550.0581
BORDERS SEQUOIA NATL PARK, CALIFORNIA
TAMPA AREA, FLORIDA
Marco Island, FlorIda
Floridas Best 55+ Resort Lifestyle at Valencia Lakes is easily

accessible from both Tampa and Sarasota. A lifestyle director offers clubs, events,
shows and activities in a 27,000 sq. ft. clubhouse. Enjoy pools, bistro, fitness and
everything from tennis to softball and more with new villas and single-family
homes from the $180s - $400s. Try before you buy.
Stay & Play for 3 days and 2 nights for $99!
MAJOR PRICE REDUCTION! Turnkey furnished, gated estate on Gulf Of Mexico!

Moor your Yacht on 255 of teakwood dock. An Architectural masterpiece
includes 11,662 SF and 5BD/ 9BA (6 full and 3 half) with 2 master suites. 33
grand foyer, Mahogany pub, game room and den. 10 seat theatre, gym and spa.
Unsurpassed quality and craftsmanship built around magnificent sunset views!
From the $180s to the $400s
$8,500,000
Three hours from Los Angeles. 360 acre ranch, completely fenced with
nearly one half mile of river frontage. Swimming holes and shing on your
private river and separate ponds. Two attractive/furnished cabins, a separate
ofce/studio. Sequoia National Park views, valuable water rights, main
highway frontage, partially zoned for future mixed-use development, Three
Rivers, California. One of a kind property!
$2,195,000
www.kaweahranch.com
Bill Haxton
phone: 559.679.6990
mountainviewrealty@sbcglobal.net
email: Details@LilaDelman.com
glhomes.com
email: info@BeverlyWestResidences.com
cathyrogers.premiersothebysrealty.com
GL Homes

Cathy Rogers
phone: 800.495.6406
phone: +1.239.821.7926
Cathy.Rogers@sothebysrealty.com
Marietta, South Carolina
Brentwood, tennessee
NEWPORT BEACH, CALIFORNIA
Immaculate mountain view estate just minutes from Asheville, NC &

Greenville, SC. 4BR, 4.5BA, 5800+sf. Features include an expansive master suite,
abundant outdoor living, breathtaking water feature & wine room with custom
finishes. One membership at The Cliffs provides access to 7 championship
courses, wellness centers, marinas, restaurants & more.
This meticulously maintained French Chateau poised on 3 acres of

picturesque rolling hills is better than a brand new house, in one of the most
affluent areas and finest school districts in the country. Minutes from downtown
Nashville, yet enveloped by the tranquility of a country setting. Available fully
furnished (price available upon request).
Bayshores Bayfront. Spacious newer contemporary residence on the harbor

located in a gated community. An ideal western exposure maximizes the
sparkling water views. Five bedroom suites, a formal dining room and a media
room complete the residence of approximately 5,000 square feet. Features
include custom mahogany windows, doors and millwork, and exotic anagre,
imported granites and limestone finishes.
$1,995,000
$5,589,000
$10,700,000
CliffsLiving.com/WSJmansion
www.5106pickney.com
The Cliffs Communities

Vince Roser
Benchmark Realty
phone: 866.411.5773
phone: 615.693.1550
info@cliffsinfo.com
RobGiem.com
HM Sothebys International Realty

Rob Giem
graffamtammy@gmail.com
To Advertise Call: +852-2831-2552
phone: 949.933.7046
email: rob@robgiem.com
GEAR & GADGETS

RUMBLE SEAT: DAN NEIL
Jaguar F-Type R Coupe: Go Ahead, Have a Fling
2015 JAGUAR F-TYPE R COUPE
Dan Neil/The Wall Street Journal (2)
e had this discussion last year,

when I drove the
first Jaguar FType V8 S, the
convertible precursor to this
weeks roofed test car, the F-Type
R Coupe. At the time, I suggested
that if I had by some means a hundred grand in hand, Id acquire the
services of Jags oversexed convertible over the dignified, the impeccable, the ever more perfecting
Porsche 911 Carrera.
Seriously, a Jag, of any description, full stop, over any
Porsche 911 Carrera? Really? The
American Dental Association
burned me in effigy.
Its like this: The 911 is the
sports car you marry, the sports
car you drive to church, the sports
car that bears your children. A
Porsche 911 is a car that you will
let sit in your garage undriven for
days at a time, for years on end,
drinking the full draught of depreciation, because you just cantlet
go. History. Motorsports glory.
Flawless performance. Its all there.
I knew a guy in San Francisco
who kept his 911 SC under a silver
Porsche car cover, parked on the
street, and he had to move it every 12 hours to stay ahead of the
tow trucks. It was like he was
helping the car move its bowels.
The Jaguar F-Type R Coupe,
our cool six-figure test car, is a
whole different proposition. Laffaire, if you will. However you see
yourself, whatever the color of the
sky in your world, the R Coupe
has to be a temporary thing in
your lifea phase, your wife calls
itbecause A) the car is so frank
and so candidly on-the-make that
even you, would-be man whore,
cannot bear the attention for long.
I mean, look at it. The thrust of
hood, the broad shoulders, daring
roofline, the rhythmic silhouette,
the cabin glass masked Pharaonically in deep kohl. Easy, there, Tiger. Buy a dude a drink.
The Porsche 911 is also a gorgeous, flashy car that gets a lot of
attention. In parts of Arkansas
they are probably reported as
UFOs. But there is something altogether more explicit in Jags
goodly hoodliness.
And if the looks didnt garner
enough attention, theres B), the
Jaguars crow-stunning sound, the
beautiful, beastly, oak-splitting
racket that the R Coupe is capable
of making in the throes of a
heated overrun, a version of
which I will now attempt onomatopoeically: SPLAT! SPLAT!
Hee-dee-de-DUMP dump, rat-inyer-hat, rat-in-yer-hat
Now, to be clear, this symphony of blasting caps is an artistic choice on the part of Jaguars
engineers, part of the brand experience, to use the jargon. Its
brought about through an interplay of engine management (fuel
delivery and cam phasing) and the
R Coupes active exhaust system,
which unrestricts the silencers
whenever rpm rises above 3,500
or else whenever the computer
thinks it would sound cool.
Whats interesting here is

where Jaguars engineering staff
drew the line in the noise making,
what they consider within established erogenous norms for a luxury road car. Clearly they are not
getting enough love at home. This
thing is cray-cray Hollywood loud,
South Beach loud, like your pretty
little sports car is warming up
with the open-wheelers at Eldora.
Whammalammadingdong! Sometimes it feels like a lot of drama
for a trip to the market.
You dont have to be E.O. Wilson to figure out that these are
vocalizations of some kind. Mating
call? Driving around Raleigh, N.C.,
I did feel distinctly like a one-man
heterosexual pride parade.
Establishing dominance? Im
afraid so. Theres obviously a degree of leg humping in the purchase of a 550-hp British sports
car that sounds like a grumpy
Mount Vesuvius. And its just a
fact that the valets cannot long ignore the wheezy, supercharged
throb of the R Coupe sitting in the
porte-cochere.
Another theory: Its the lonely
song of the motor loon, a locating
beacon to a dwindling species of
car enthusiasts for whom the
sound of a slat-kicking, anvil-lashing V8 still means something.
Dudes. Am I right?
Base price: $99,000

Price, as tested: $104,975
Powertrain: Front-mounted supercharged
5.0-liter, DOHC 32-valve, direct-injection V8
with variable cam phasing and active
exhaust; eight-speed automatic transmission;
rear-wheel drive with electronic limited-slip
differential.
Horsepower/torque: 550 hp at 6,500
rpm/502 pound-feet at 2,500-5,500 rpm
Length/weight: 176.0 inches/3,638 pounds
Wheelbase: 103.2 inches
0-60 mph: <4 seconds
EPA fuel economy: 16/23/18 mpg, city/highway/combined
Cargo capacity: 11 cubic feet
Lets do the walk-around: With
a length (176.0 inches) thats
within fractions of the Porsche 911
Carrera, the mostly aluminum FType Coupe is the pillarless hardtop sibling of the F-Type, the twoseat convertible introduced last
year. The base Coupe sells for
$65,000 with a supercharged 3.0liter, 340-hp V6, eight-speed automatic transmission and standard
18-inch wheels.
To no ones surprise, the topshelf F-Type R Coupe looks great,
handles very nicely indeed, and is
respectably athletic. The lads at
Motor Trend clocked an R Coupe
at 11.8 seconds and 122 mph in the
quarter-mile; so among other
things, the R Coupe is straightline quicker than a comparably
priced Porsche 911 Carrera S with
a PDK gearbox.
The R Coupe (as tested,
$104,975) gets the hottest version
of the companys blown 5.0-liter,
direct-injection V8: The nominal
output of 550 hp is 55 more than
the same engine in the mid-range
F-Type S Coupe, thanks mostly to
higher boost pressure and more
aggressive throttle mapping. Curb
weight of the R Coupe is quoted
at 3,638 pounds. Thats 6.6 pounds
per horsepower, as compared with
the Porsches 7.8.
The F-Type thus straddles the
space occupied by Porsche Boxster/Cayman at the low end

($60,000-80,000), and the 911 S at
the high end. With the 911 you are
free to keep on spending until you
arrive at something like the Turbo
S, nearing $200,000.
With either the V6 or V8 engine, the F-Type Coupe is limited
to a close-ratio eight-speed paddle-shifter automatic transmission,
yes, with a torque converternot
a dual-clutch automated manual
and certainly not a clutch-pedal
actuated manual transmission. But
the shiftable auto-box (with ZF
mechatronics) is superb, with automatic rev-matching function on
downshift, hugely punchy and immediate midrange response.
Stylistically and otherwise, the
F-Type Coupe is the car the FType always wanted to be: a sinuous fastback, a closed-cabin version of the F-Type but barely
levitated on 20-inch black alloy
wheels ($1,000 option), with railto-rail panoramic roof glass
($1,200) that dips dramatically
into the rear deck like the plunging back line of a formal gown.
The F-Type Coupes sucked-in
waistline (the negative surfaces
ahead of the rear wheels, along
the lower door) presents opportunities for symmetries that are unrealized in the open-top car.
In the convertible, the steeply

raked windshield seems like an unfinished bridge span. But the
coupes roof connects the line,
completes the thought, and the silhouette lands elegantly at the cars
chamfered decklid, which conceals
an active spoiler. The taillights
comprise lovely red LED lamps set
into a nearly vertical, Kamm-like
wraparound. The rear three-quarter shot at night is insane.
Theres historical precedent.
The 1961 Jaguar E-Type FHC
(fixed-head coupe), with its alluring side-hinge hatch, is rightly regarded as sculpturally superior to
the E-Types roadster sibling.
If the looks of the Coupe dont
sell you, perhaps some finite-element analysis will. According to
the company, the Coupes chassis
is a whopping 83% stiffer than the
convertibles load-bearing structure (33,000 newton-meters per
degree of deflection, as compared
with 18,000 Nm/deg). Thats
enough of a difference to constitute a whole different feeling car:
palpably harder and more resolute,
especially when higher cornering
loads meet dodgy pavement.
Vis--vis the 911? Lets be reasonable. The one thing about the
Porsche is that you can pull one
off the dealers lot, take it right to
the track and know you can lap it
until the tires give out. The R
Coupe doesnt inspire that kind of
confidence.
The elephant in the garage is
the Chevrolet Corvette Stingray,
another desperately fast, reclining
nude with tailpipe histrionics. The
Z51 3LT Corvettedry-sump lubrication, electronic limited-slip differential, cooling circuits for the
differential and transmissionis
nicely track-hardened and costs
about $30,000 less than the R
Coupe. If ones relationship with a
911 has the high solemnity of Lutheran matrimony, the Vette is a
hookup in Ibiza.
So go ahead, have your fling
with your British chippy or even
your complaisant Yank. The 911 will
still love you when you come back.

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Corporate Partner

Be prepared for the corporate world.

LEARN. ENGAGE. GROW.

Gadgets That Perfect Your Swing

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